13-0604_FIELDMAN, ROLAPP & ASSOCIATES, INC._Agenda Report_H1bCapistrano
port
TO: Karen P. Brust, City ~a t
FROM: Cindy Russell, Chief Fina cial Officer/City TreasurerW
DATE: June 4, 2013
6/4/2013
H1b
SUBJECT: Consideration of the Refunding Opportunities for the 2002 and 2004 Water
Certificates of Participation (Water System Facilities) and the San Juan Basin
Authority Lease Revenue Bonds (Groundwater Recovery Project) Issue of
2002, and Agreements for Financial Advisor Services (Fieldman, Rolapp &
Associates, Inc.) and Bond/Disclosure Counsel Services (Orrick, Herrington &
Sutcliffe, LLP)
RECOMMENDATION:
By motion,
1. Authorize City staff to proceed with a combined refunding of the 2002 and 2004 Water
Certificates of Participation; and,
2. Authorize City staff to proceed with a refunding of the San Juan Basin Authority Lease
Revenue Bonds (Groundwater Recovery Project) Issue of 2002 and notify the San
Juan Basin Authority of the City's intent to proceed with the refunding; and,
3. Approve the Professional Services Agreement for Financial Advisor Services with
Fieldman, Rolapp & Associates, Inc., in the amount of $37,500, plus expenses not to
exceed $1,500 for the combined refunding of the Certificates of Participation, Series
2002 and Series 2004; and $40,500, plus expenses not to exceed $3,500 for the
refunding of the San Juan Basin Authority Lease Revenue Bonds, Issue of 2002 for a
total of $78,000 plus costs not to exceed $5,000; and,
4. Approve the Agreement for Bond/Disclosure Counsel Services with Orrick, Herrington
& Sutcliffe, LLP, in the amount of $85,000, for the combined refunding of the
Certificates of Participation, Series 2002 and Series 2004; and $135,000 for the
refunding of both the Certificates of Participation, Series 2002 and Series 2004 and
the San Juan Basin Authority Lease Revenue Bonds, Issue of 2002.
EXECUTIVE SUMMARY:
Based on current interest rates and market conditions, the City's Financial Advisor,
Fieldman, Rolapp & Associates, Inc. (FRA) has identified the opportunity for the City to
City Council Agenda Report
June 4, 2013
Page 2 of 6
realize savings on its annual lease payments to the San Juan Capistrano Public Financing
Authority (SJCPFA) for the Certificates of Participation, Series 2002 (2002 COPs) and Series
2004 (2004 COPs) that were issued for water system improvements as well as the annual
lease payments to the San Juan Basin Authority (SJBA) for the San Juan Basin Authority
Lease Revenue Bonds, Issue of 2002 (2002 SJBA Bonds) issued for the construction of the
Groundwater Recovery Plant (GWRP). Based on preliminary estimates it is expected that by
reducing the average interest (coupon) rate on these obligations, the City ·could potentially
realize an average annual savings of $143,220 on a combined refunding (refinancing) of the
2002 COPs and 2004 COPs, as well as $221,964 on the 2002 SJBA Bonds for a total of
$365,184 and still pay these obligations off in the timeframe originally planned for.
Additionally, the net present value savings as a percentage of the amounts refunded are
8.98% and 13.16% for the combined refunding (refinancing) of the 2002 COPs and 2004
COPs and the 2002 SJBA Bonds, respectively. These percentages are well above the
benchmark savings for refunding debt of 3% to 5% of the amount refunded.
In order to facilitate the refunding of these obligations, the City needs to retain the services of
a financial advisor and bond/disclosure (legal) counsel. City staff is recommending an
agreement with the City's current financial advisor, Fieldman, Rolapp & Associates (FRA), at
a fixed cost of $37,500, plus expenses not to exceed $1,500 for the combined refunding of
the 2002 and 2004 COPs; and $40,500, plus expenses not to exceed $3,500 for the
refunding of the 2002 SJBA Bonds for a total of $78,000, plus expenses not to exceed $5,000
for both refunding issues. City staff is also recommending Orrick, Herrington & Sutcliffe, LLP
as bond and disclosure counsel at a cost of $85,000, for the combined refunding of the 2002
and 2004 COPs; and $135,000 for the refunding of both the 2002 and 2004 COPs and the
2002 SJBA Bonds. These costs are entirely contingent on and payable from the proceeds of
the refunding issue. These costs have been included in the cost of issuance, and included in
the calculations above.
DISCUSSION/ANALYSIS:
San Juan Capistrano Public Financing Authority...., Certificates of Participation Refunding
In December 2010, the City's financial advisor Fieldman, Rolapp & Associates (FRA)
recommended the City consider refunding the 2002 COPs based on lower interest rates and ·
market conditions at that time in order to reduce its annual debt service costs. Ralph
Andersen and Associates included in its Final Report on the Management and Operations
Audit of the Utilities Enterprise dated December 12, 2011, (Ralph Andersen Final Report) a
refunding analysis conducted by Public Finance Management (PFM) of the SJCPFA's three
outstanding COPs for potential savings on debt service costs. The PFM analysis concluded
that based on current interest rates at that time, the 2002 COPs could be refunded and the
Ralph Andersen Final Report recommended the City explore the opportunity further either
with· PFM or their financial advisor to determine if the refunding of the 2002 COPs was
desirable.
During 2012, FRA updated its analysis of the 2002 COPs refunding and also included an
analysis of the refunding of the 2004 COPs as the call date of December 1, 2013, is
City Council Agenda Report
June 4, 2013
Page 3 of 6
approaching for this issue. The very conservative preliminary estimates are based on the
following assumptions:
• A combined refunding of the 2002 and 2004 COPs.
• A competitive sale of the Refunding Certificates of Participation.
• An average coupon (interest) rate based on current interest rates and market
conditions.
• The City's current A rating on its water enterprise obligations.
• No bond insurance to enhance the current A rating to AA, however a recommendation
that the City allow the option for bidders to purchase bond insurance at the competitive
sale if it produces a bid with a lower True Interest Cost. ,
• All costs of issuance associated with the refunding issue are included in the calculation
of cost savings
• No extension on the term of either past its original end date.
Attachment 1 to this report includes a summary of the COPs Refunding results, as well as
detailed information for reference (See Attachment 1 -Exhibit A). The following is an
overview of the results:
Summary of 2002 and 2004 Certificates of Participation and Refunding Opportunity
Refunding Issue 2002 COPS 2004 COPS Combined COPS
Attachment 1 -Exhibit A Pages 3 and 6 Pages 4 and 7 Pages 2 and 5
Current COPS
Principal (Par) amount outstanding $4,720,000 19,270,000 $23,990,000
Call Date(1) 12/01/10 12/01/13 N/A
Final Maturity Date(2) 12/01/21 12/01/34 12/01/34
A\oerage Interest Rate 4.99% 4.64% 4.67%
Refunding COPS (Prelimina!Y Estimates}
Principal (Par) amount $4,225,000 $19,200,000 $23,425,000
A\oerage Interest Rate 3.89% 4.02% 4.01%
Final Maturity Date(2) 12/01/21 12/01/34 12/01/34
Net Present Value Savings ($) $472,124 $1,682,702 $2,154,826
Net Present Value Savings (%) 10.00% 8.73% 8.98%
Average Annual Savings(3) $104,059 $100,651 $143,220
(1) The COPs can be called within 90 days of the call date. There is no advance refunding of either COP issue.
(2) The portion of the refunding COPs, related to the 2002 COPs is still paid off in 2021, while the remainder has a
final maturity date in 2034, which is the same as the 2004 COPs. See Attachment 1, Exhibit A, Page 5.
(3) The average annual savings on the 2002 COPs is through 2021 when the portion of the refunding related to the
2002 COPs is paid off. The savings on the 2004 COPs continues through 2034.
San Juan Basin Authority Lease Revenue Bond Refunding
The San Juan Basin Authority issued $31,555,000 of Lease Revenue Bonds in January 2003
(SJBA 2002 Bonds) to fund the construction of the Ground Water Recovery Plant (GWRP).
The SJBA 2002 Bonds are secured by lease payments made under the Lease Agreement for
City's use and possession of the GRWP. Based on the same assumptions used for the
Refunding COPs, FRA also prepared a very conservative preliminary estimate of the cost
City Council Agenda Report
June 4, 2013
Page 4 of 6
savings that could be realized by the City. Attachment 1 to this report also includes a
summary of the SJBA 2002 Bond Refunding, as well as detailed information (See Attachment
1 -Exhibit B). The following is an overview of the results:
Summary of the SJBA 2002 Bonds Refunding Opportunity
Refunding Issue
Current COPS
Principal (Par) amount outstanding
Call Date
Final Maturity Date
A\ierage Interest Rate
Refunding COPS (Preliminary Estimates)
Principal (Par) amount
A\ierage Interest Rate
Final Maturity Date
Total Gross Sa\1ngs(1l
Net Present Value Sa\Angs ($)
Net Present Value Sa\Angs (%)
Average Annual Savings
Professional Services
Amount
$24,780,000
12/1/2012
12/01/34
5.04%
$23,925,000
4.05%
12/01/34
$4,883,200
$3,262,015
13.16%
$221,964
In order to facilitate the refunding of the 2002 and 2004 COPs and the 2002 SJBA Bonds, the
City needs to retain a financial advisor and bond/disclosure (legal) counsel. Since this is a
refunding of existing obligations, the financial advisor has the most familiarity with the
obligations, and with the City. Therefore a formal Request for Proposals (RFP) process
would not necessarily produce the most economically feasible result.
The City's financial advisor Fieldman, Rolapp & Associates (FRA) has worked closely with
the City on its water enterprise system financings over the past ten years as well as other
non-enterprise financings for more than twenty years. FRA has continually provided sound
financial advisor services and assisted the City in preparation of information to be reviewed
by the rating agencies to assure the best results and obtaining very successful pricing during
the competitive sale process. Additionally, FRA assists the City with regular reviews by the
bond rating agencies and other related matters on an as needed basis at no charge. The
costs proposed by FRA for financial advisor services are approximately 10%-15% below
FRA's cost for original 2004 COPs that were similar in sizing to each of the refunding issues.
Additionally, the City will save staff time related to the RFP process and providing
background and other financial information on these issues, which will is assist in moving this
process along as quickly as possible. Therefore, a formal Request for Proposal (RFP)
process would not necessarily provide the most cost-effective overall results. Section 3-
4.306(e)(3) allows for formal RFP process to be bypassed when extenuating circumstances
would make the formal RPF process not the most cost-effective approach.
City Council Agenda Report
June 4, 2013
Page 5 of 6
City staff also requested a proposal from its current bond counsel firm Stradling, Yocca
Carlson & Rauth (SYCR). Staff requested bond counsel with specific water system financing
expertise be assigned. Since new bond counsel was anticipated to be proposed by SYCR, ·
and given the fact that SYCR is also general counsel for the San Juan Basin Authority, City
staff also requested proposals from the City's general legal counsel firm, Rutan & Tucker and
Orrick, Herrington & Sutcliffe, LLP based on their familiarity with the City and/or professional
expertise and reputation. The results of the limited RFP process were as follows:
Stradling,
Yocca, Orrick,
Carlson and Harrington and Rutan &
Refunding Issue Rauth Sutcliffe Tucker
2002 and 2004 COPS Refunding (Combined) $60,000 $85,000 $99,120
SJBA 2002 Bonds Refunding $70,000 $50,000 $98,940
Total for Both Refundings $130,000 $135,000 $198,060
All three firms have extensive water related financing experience, solid reputations, and
strong references. Based on the proposals submitted, water related expertise, professional
expertise and references; staff recommends the selection of Orrick, Herrington & Sutcliffe,
LLP (Orrick) to the City Council for bond/disclosure counsel services.
FISCAL IMPACT:
The City's Water Enterprise Debt Service fund makes lease payments to the SJCPFA on the
2002 and 2004 COPs, and to the SJBA on the SJBA 2002 Bonds. The annual lease
payments are equivalent to the annual debt service payment on each of these obligations.
Based on the preliminary estimates discussed earlier in this report, the estimated potential
savings to the City's Water Enterprise Fund is as follows:
Total Potential Cost Sal.ings to the City's Water Enterprise Fund
Net Present Value Net Present Value A~.erage Annual
Refunding Issue Gross Savings Sal.ings ($) Sal.ings (%) Savings
SJCPFA 2002 and 2004 COPS Refunding (Combined) $3,150,852 $2,154,826 8.98% $143,220
SJBA 2002 Bonds Refunding 4,883,200 3,262,015 13.16% 221,964
Total $8,034,052 $5,416,841 $365,184
The cost of financial advisor and bond/disclosure counsel services has been included in the
estimated cost of issuance for each refunding. The total cost of issuance for each refunding
issue has been conservatively estimated at $200,000, and is approximately 0.85% of the
principal amount to be issued. See Attachment 1; Exhibit A, Page 1 and Exhibit B, Page 1.
All costs associated with the refunding issues are paid directly from the proceeds of the
refunding issue at the time of closing.
City Council Agenda Report
June 4, 2013
Page 6 of6
PRIOR CITY COUNCIL REVIEW:
• On December 7, 2010, the City Council considered the possible refunding of the 2002
Certificates of Participation.
COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS:
• On May 12, 2013, the Utilities Commission reviewed the refunding opportunities for
the 2002 and 2004 Water Certificates of Participation and the San Juan Basin
Authority Lease Revenue Bonds (Groundwater Recovery Project) Issue of 2002. The
Utilities Commission approved a recommendation to the City Council to move forward
with both refundings, and approve the agreements for Financial Advisor Services with
Fieldman, Rolapp & Associates, Inc. and Bond/Disclosure Counsel Services with
Orrick, Herrington & Sutcliffe, LLP. (See Attachment 4)
NOTIFICATION:
Jim Fabian, Principal-Fieldman, Rolapp & Associates, Inc.
Stephen A. Spitz, Partner -Orrick, Herrington & Sutcliffe, LLP
ATTACHMENTS:
Attachment 1 -Summary and Detail of Water Debt Obligation Refunding Opportunities
Attachment 2-Agreement for Financial Advisor Services (Fieldman, Rolapp & Associates)
Attachment 3 -Proposal for Bond and Disclosure Counsel Services (Orrick, Herrington &
Sutcliffe, LLP)
Attachment 4-Draft Minutes of the Utilities Commission meeting of May 21, 2013
San Juan Capistrano Water Debt Refunding Opportunities
with No Bond Insurance (1)
Call Date
Principal Outstanding as of
3/11/2013
Security
Refunding Gross Savings ($)
Refunding NPV Savings ($)
Any date on or after 12/1/2010@ 100%
$4,720,000
Installment payments from Net Revenues of
the Water System
Any date on or after 12/1/2013@ 100%
$19,270,000
Installment payments from Net Revenues of
the Water System
Any date on or after 12/1/2012@ 100%
$24,780,000
Lease payments from Revenues of the Water
System included as an O&M expense
)> I Refunding NPV Savings (%) I
-j
-j Average Annual Savings ($)(2)
)> ~ 0 ·-·---~--··--' 0
~ <1l The above refunding numbers are based on an A rated scale as of March 7, 2013, and assumes no bond insurance. We are recommending that the City allow
m the option for bidders to purchase bond insurance at the competitive sale if it produces a bid with a lower True Interest Cost to the City.
z
-j __,
(2) The average annual savings of the combined refundings is higher through December 1, 2021, when the 2002 COPs are paid off.
HELDMAN ROLAPP 5/1/2013
:-\SSOCL\1'[ S
May 2, 2013 8:06 am Prepared by DBC Finance (Finance 7.003 San Juan Capistrano, City of:REF0204) Page I
SOURCES AND USES OF FUNDS
Water Debt
Combined Current Refunding of 2002 and 2004 Water Revenue COPs
Sources:
Bond Proceeds:
Par Amount
Net Premium/OlD
Other Sources of Funds:
Debt Service Reserve Fund
Uses:
Refunding Escrow Deposits:
Cash Deposit
SLGS Purchases
Other Fund Deposits:
Debt Service Reserve Fund
Delivery Date Expenses:
Cost oflssuance
Underwriter's Discount
Other Uses of Funds:
Additional Proceeds
Notes:
NR/A Scale sent by Citi 3-7-13 per Robert Porr
COl= $200k
Underwriter's Discount of$8/Bond
Refunding of
2002 Water
Revenue COPs
4,225,000.00
339,013.50
4,564,013.50
679,853.76
5,243,867.26
Refunding of
2002 Water
Revenue COPs
0.61
4,833,782.00
4,833,782.61.
338,287.68
36,072.57
33,800.00
69,872.57
1,924.40
5,243,867.26
Refunding of
2004 Water
Revenue COPs Total
19,200,000.00 23,425,000.00
917,687.05 1,256,700.55
20,117,687.05 24,681,700.55
1,440,312.50 2,120,166.26
21,557,999.55 26,801,866.81
Ref1mding of
2004 Water
Revenue COPs Total
0.54 1.15
19,700,610.00 24,534,392.00
19,700,610.54 24,534,393.15
1,537,307.32 1,875,595.00
163,9.27.43 200,000.00
153,600.00 187,400.00
317,527.43 387,400.00
2,554.26 4,478.66
21,557,999.55 26,801,866.81
ATTACHMENT 1 -EXHIBIT A
May 2, 2013 8:06am Prepared by DBC Finance (Finance 7.003 San Juan Capistrano, City of:REF0204) Page 2
SUMMARY OF REFUNDING RESULTS
Water Debt
Combined Current Refunding of2002 and 2004 Water Revenue COPs
Dated Date
Delivery Date
Arbitrage yield
Escrow yield
Bond Par Amount
True Interest Cost
Net Interest Cost
Average Coupon
Average Life
Par amount of refunded bonds
Average coupon of refunded bonds
Average life of refunded bonds
PV of prior debt to 10/31/2013@ 3.298846%
Net PV Savings
Percentage savings of refunded bonds
Percentage savings of refimding bonds
10/31/2013
10/31/2013
3.298846%
0.029591%
23,425,000.00
3.464963%
3.579662%
4.010385%
10.598
23,990,000.00
4.668303%
10.796
27,226,581.75
2,154,825.82
8.982183%
9.198830%
____ , ___ ,_, __ , ............... _, ...................... .. _____ ....................... ,_,.., ___ ............. _ ... __ ........ __ _
May 2, 2013 8:06 am Prep¥ed by DBC Finance (Finance 7.003 San Juan Capistrano, City ot:REF0204) Page 3
SUMMARY OF REFUNDING RESULTS
Water Debt
Refunding of2002 Water Revenue COPs·
Dated Date
Delivery Date
Arbitrage yield
Escrow yield
Bond Par Amou11t
True Interest Cost
Net Interest Cost
Average Coupon
Average Life
Par amount of refunded bonds
Average coupon of refunded bonds
Average life of refunded bonds
PV of prior debt to 10/3112013@ 3.298846%
Net PV Savings
Percentage savings of refunded bonds
Percentage savings of refunding bonds
---··--.. ---..... __ ,_,, __ ,, _____ ................................................. ---'-
10/31/2013
10/3112013
3.298846%
0.029592%
4,225,000.00
2.048389%
2.166812%
3.894225%
4.182
4,720,000.00
4.992576%
4.391
5,130,654.94
472,124,22
10.002632%
11.174538%
------· _,_,_, __ .. ___ , ____ _
May 2, 2013 8:06 am Prepared by DBC Finance (Finance 7.003 Sfm Juan Capistrano, City of:REF0204) Page 4
SUMMARY OF REFUNDING RESULTS
Water Debt
Refunding of2004 Water Revenue COPs
Dated Date
Delivery Date
Arbitrage yield
Escrow yield
Bond Par Amount
True Interest Cost
Net Interest Cost
Average Coupon
Average Life
Par amount of refunded bonds
Average coupon of refunded bonds
Average life of refunded bonds
PV of prior debt to 10/3112013@ 3.298846%
Net PY Savings
Percentage savings of refunded bonds
Percentage savings of refimding bonds
_______ ..................... _ .......... .
10/31/2013
10/31/2013
3.298846%
0.029591%
19,200,000.00
3.595054%
3.687922%
4.019286%
. 12.010
19,270,000.00
4.640094%
12.364
22,095,926.81
1 ,682, 701.60
8.732235%
8.764071%
May 2, 2013 8:06 am Prepared by DBC Finance (Finance 7.003 San Juan Capistrano, City ot:lUIF0204) Page 5
SAVINGS
Water Debt
Combined Current Refunding of2002 and 2004 Water Revenue COPs
Present Value
Prior Refunding to 10/31/2013
Date Debt Service Debt Service Savings @ 3.2988462%
12/0112013 1,550,650.63 1,536,621.24 14,029.39 13,989.92
12/01/2014 2,096,498.76 1,875,595.00 220,903.76 214,710.82
12/01/2015 2,059,636.26 1,835,295.00 224,341.26 210,843.91
12/01/2016 2,056,105.00 1,835,445.00 220,660.00 200,627.18
12/01/2017 2,059,288.76 1,839,445.00 219,843.76 193,412.96
12/01/2018 2,064,138.76 1,846,645.00 217,493.76 185,145.97
12/0112019 2,060,238.76 1,841,845.00 218,393.76 179,862.14
12/0112020 2,058,388.76 1,835,445.00 222,943.76 177,612.49
12/01/2021 2,062,728.76 I ,842,445.00 220,283.76 169,773.39
12/01/2022 1,403,101.26 1,297,245.00 105,856.26 79,220.15
12/01/2023 1,404,221.26 1,296,845.00 107,376.26 77,742.18
12/01/2024 1,407,996.26 1,305,245.00 102,751.26 71,995.18
12/01/2025 1,409,971.26 1,303,745.00 106,226.26 72,036.95
12/01/2026 1,414,261.26 1,310,245.00 104,016.26 68,292.82
12/01/2027 1,416,481.26 1,309,245.00 107,236.26 68,142.16
12/01/2028 1,421,387.50 1,315,645.00 105,742.50 65,004.16
12/01/2029 1,422,700.00 1,315,245.00 107,455.00 63,883.01
12/01/2030 1,426,637.50 1,322,445.00 104,192.50 59,898.74
12/0112031 1,427,962.50 1,321,656.26 106,306.24 59,081.43
12/01/2032 1,431,675.00 1,324,3 77.50 107,297.50 57,648.59
12/0112033 1,437,537.50 1,333,947.50 103,590.00 53,812.71
12/0112034 1,440,312.50 1,336,400.00 103,912.50 52,181.54
36,531,919.51 33,381,067.50 3,150,852.01 2,394,918.42
Savings Summary
PV of savings from cash flow
Less: Prior fm1ds on hand
Plus: Refunding funds on hand
Net PV Savings
2,394,918.42
-2,120,166.26
1,880,073.66
2,154,825.82
------.... --.. ·-···-··-····"'"'""'"""'"'"'' _____ _
May 2, 2013 8:06 am Prepared by DBC Finance (Finance 7.003 San Juan Capistrano, City of:REF0204) Page 6
SAVINGS
Water Debt
Refunding of 2002 Water Revenue COPs
Present Value
Prior Refunding to I 0/31/2013
Date Debt Service Debt Service Savings @ 3.2988462%
12/01/2013 549,538.13 542,563.61 6,974.52 6,954.90
12/01/2014 664,936.26 550,300.00 114,636.26 111,228.03
12/01/2015 664,461.26 547,000.00 117,461.26 110,192.44
12/0112016 662,492.50 544,400.00 118,092.50 107,146.13
12/01/2017 663,732.50 547,200.00 116,532.50 I02,285:oo
12/01/2018 663,382.50 549,200.00 114,182.50 96,951.40
12/0l/2019 661,132.50 545,400.00 115,732.50 95,043.57
12/0112020 657,632.50 541,000.00 116,632.50 92,638.37
12/01/2021 662,287.50 546,000.00 116,287.50 89,326.07
---····--·····-·····-···--........ _ .. ,_,_,_.., ______ ,_, __ ,_., ______ ,,,, .......... ___ ...... ______ ........ -.......... __ , __ ...
5,849,595.65 4,913,063.61 936,532.04 811,765.90
Savings Summary
PV of savings fi·om cash flow
Less: Prior ftmds on hand
Plus: Refunding funds on hand
Net PV Savings
811,765.90
-679,853.76
340,212.08
472,124.22
---·--·--·--·-·--·-··--
May 2, 2013 8:06 am Prepared by DBC Finance (Finance 7.003 San Juan Capistrano, City ot:REF0204) Page 7
SAVINGS
Water Debt
Refunding of2004 Water Revenue COPs
Present Value
Prior Refunding to 10/31/2013
Date Debt Service Debt Service Savings @ 3.2988462%
12/0112013 1,001,112.50 994,057.63 7,054.87 7,035.02
12/0112014 1,431,562.50 1,325,295.00 106,267.50 103,482.79
12/0112015 I ,395,175.00 1,288,295.00 106,880.00 100,651.47
12/01/2016 1,393,612.50 1,291,045.00 102,567.50 93,481.06
12/0 l/2017 1,395,556.26 1,292,245.00 103,311.26 91,127.97
12/0l/2018 1,400,756.26 1,297,445.00 103,311.26 88,194.57
12/0112019 1,399,106.26 1,296,445.00 102,661.26 84,818.57
12/0112020 1,400,756.26 1,294,445.00 106,311.26 84,974.12
12/01/2021 1,400,441.26 I ,296,445.00 103,996.26 80,447.32
12/01/2022 1,403,101.26 1,297,245.00 105,856.26 79,220.15
12/01/2023 1,404,221.26 1,296,845.00 107,376.26 77,742.18
12/0112024 I ,407,996.26 1,305,245.00 102,751.26 71,995.18
12/0112025 1,409,971.26 1,303,745.00 106,226.26 72,036.95
12/01/2026 I ,414,261.26 1,310,245.00 104,016.26 68,292.82
12/01/2027 I ,416,481.26 1,309,245.00 107,236.26 68,142.16
12/0 l/2028 1,421,387.50 1,315,645.00 105,742.50 65,004.16
12/0 l/2029 1,422,700.00 1,315,245.00 107,455.00 63,883.01
12/01/2030 1,426,637.50 1,322,445.00 I 04,192.50 59,898.74
12/01/2031 1,427,962.50 1,321,656.26 106,306.24 59,081.43
12/01/2032 1,431,675.00 1,324,377.50 107,297.50 57,648.59
12/01/2033 1,437,537.50 1,333,947.50 103,590.00 53,812.71
12/01/2034 1,440,312.50 1,336,400.00 103,912.50 52,181.54
30,682,323.86 28,468,003.89 2,214,319.97 1,583,152.52
Savings Summary
PV of savings from cash flow
Less: Prior funds on hand
Plus: Refunding funds on hand
Net PV Savings
1 ,583,152.52
-I ,440,312.50
1,539,861.58
1,682,701.60
May 15, 2013 4:44pm Prepared by Fieldman, Rolapp & Associates (AVR) (Finance 7.002 San Juan ... :WATER-REF02BON,REF02BON) Page I
SOURCES AND USES OF FUNDS
Water Debt
Refunding of 2002 Lease Revenue Bonds
(San Juan Basin Authority)
Notes:
Sources:
Dated Date
Delivery Date
Bond Proceeds:
Par Amount
Net Premium
Other Sources of Funds:
Debt Service Reserve Fund
Uses:
Refunding Escrow Deposits:
Cash Deposit
SLGS Purchases
Other Fund Deposits:
Debt Service Reserve Fund
Delivery Date Expenses:
Cost of Issuance
Underwriter's Discount
Other Uses of Funds:
Additional Proceeds
NRI A Scale sent by Citi 3-7-13 per Robert Porr
COl . $200k
Underwriter's Discount of $8/Bond
-·······-·····-····----.. -.... --·-------------.. ·------------"'"'" -----
10/31/2013
10/3112013
23,925,000.00
1,576,018.55
25,501,018.55
2,252,537.50
27,753,556.05
0.38
25,406,655.00
25,406,655.38
1,953,777.52
200,000.00
191,400.00
391,400.00
1,723.15
27,753,556.05
ATTACHMENT 1 -EXHIBIT B
May 15, 2013 4:44 pm Prepared by Fieldman, Rolapp & Associates (A VR) (Finance 7.002 Srm Juan ... :WAri::I\-RI·:F·02BON,REI·"02BON) Page 2
SUMMARY OF REFUNDJNG RESULTS
Water Debt
Refunding of 2002 Lease Revenue Bonds
(San .I uan Basin Authority)
Dated Date
Date
yield
Escrow yield
Bond Par Amount
True Interest Cost
Net Interest Cost
Average Coupon
Average Life
Par amount of refunded bonds
Average coupon of refunded bonds
Average life of refunded bonds
PV of prior debt to l 0/31/2013@ 3.102406%
Net PV Savings
Percentage savings of reli.mded bonds
Percentage of refunding bonds
I 0/31/2013
I 0/31/2013
3.102406%
23.925,000.00
3.288048%
3.431559%
4.052784%
9.316
24.780.000.00
5.036726'Yo
10.047
29,222,375.99
3,262,015.36
13.163904%
13.634338%
May 15, 2013 4:44pm Prepared by Fieldman, Rolapp & Associates (AVR) (Finance 7.002 San Juan ... :WATER-REF02BON,REF02BON) Page 3
SAVINGS
Water Debt
Refunding of 2002 Lease Revenue Bonds
(San .Juan Basin Authority)
Present Value
Prior .Refunding to 10/31/2013
Date Debt Service Debt Service Savings @ 3.1024065%
12/01/2013 1,620,156.25 1,598,488.34 21,667.91 21,610.54
12/0112014 2,250,812.50 2,021,077.50 229,735.00 224,653.71
12/0112015 2,251,212.50 2,018,277.50 232,935.00 220,612.57
12/01/2016 2,248,725.00 2,018,477.50 230,247.50 211,320.35
12/0 l/2017 2,248,350.00 2,015,677.50 232,672.50 206,966.14
12/01/2018 2,249,825.00 2,021,077.50 228,747.50 197,243.11
12/0112019 2,247,887.50 2,014,277.50 233,610.00 195,197.67
12/01/2020 2,252,537.50 2,020,677.50 231,860.00 187,768.44
12/01/2021 2,248,250.00 2,014,677.50 233,572.50 183,300.42
12/01/2022 2,249,000.00 2,016,677.50 232,322.50 176,703.06
12/01/2023 2,251,000.00 2,021,277.50 229,722.50 169,339.92
12/01/2024 2,249, 000.00 2,018,277.50 230,722.50 164,812.17
12/01/2025 I, 148,000.00 916,527.50 231,472.50 160,309.84
12/01/2026 1,147,750.00 915,777.50 231,972.50 155,760.62
12/0112027 1,145,750.00 913,527.50 232,222.50 151,176.61
12/01/2028 1,147,000.00 916,527.50 230,472.50 145,436.28
12/01/2029 1,146,250.00 913,327.50 232,922.50 142,460.90
12/01/2030 1,148,500.00 917,047.50 231,452.50 137,197.74
12/01/2031 1,148,500.00 918,737.50 229,762.50 131,995.72
12/0112032 1,146,250.00 914,310.00 231,940.00 129,127.18
12/01/2033 1, 146,750.00 912,932.50 233,817.50 126,148.36
12/0112034 1,149,750.00 920,400.00 229,350.00 119,910.84
37,841,256.25 32,958,055.84 4,883,200.41 3,559,052.19
Savings Summary
PV of savings from cash flow
Less: Prior funds on hand
Plus: Refunding funds on hand
Net PV Savings
3,559,052.19
-2,252,537.50
l ,955,500.67
3,262,015.36
PROFESSIONAL SERVICES AGREEMENT
FOR FINANCIAL ADVISOR
This agreement has been entered into this __ day of , 2013 by and between the
City of San Juan Capistrano, fCalifornia] (the "City") and Fieldman, Rolapp & Associates, Inc.
(herein, the "Consultant").
WHEREAS, the City desires independent financial advisory services to be performed in
connection with refunding of outstanding bonds related to water improvement projects (herein,
the "Project"); and
WHEREAS, the City desires to retain the professional and technical services of the Consultant
for the purpose of refunding outstanding debt, (herein, the "Services");
WHEREAS, the Consultant is well qualified to provide professional financial advice to entities
such as the City;
NOW, THEREFORE, in consideration of the above recitals and the mutual covenants and
conditions hereinafter set forth, it is agreed as follows:
Section 1
Section 2
Financial Advisory Services.
As directed by the City, Consultant will provide services in connection with the
Project as such Services are fully described in Exhibit A attached to this
Agreement. Consultant is engaged in an expert financial advisory capacity to the
City only. It is expressly understood that the Services rendered hereunder are
rendered solely to the City of San Juan Capistrano. Consultant does not
undertake any responsibility to review disclosure documents on behalf of owners
or beneficial owners of bonds or debt which may arise from the Consultant's
work hereunder.
Additional Requested Services.
The City may request that Consultant provide additional services beyond the
scope of those referenced in Section 1 above and specifically listed in Exhibit A
to this Agreement. Services performed for the City by Consultant that are not
otherwise specifically identified in Exhibit A to this Agreement shall be
Additional Services. Additional Services shall not be conducted by the
Consultant without prior written authorization from the City. Additional
Services include, but are not limited to, the following:
2.01 Assisting the City in obtaining enabling legislation or conducting referendum
elections.
2.02 Extraordinary services and extensive computer analysis in the structuring or
planning of any debt issue or financing program.
2.03 The repeat of any element of a service described in Exhibit A to this Agreement
which is made necessary through no fault of Consultant.
CITY OF SAN JUAN CAPISTRANO/FIELDMAN, ROLAPP & ASSOCIATES
FRA Project No. __
00075721
Page 1
ATTACHMENT 2-Page 1 of 12
2.04
credit or
considered within the scope
2Jl5 Services rendered in connection with any of the City to a
disclosure entered into in order to with Securities
Commission Rule 15c2~12 or other similar rules.
2.06 Services rendered to the in connection with calculations or determination
3.01
3.02
:un
3JJ4
3.06
Section 4
any rebate to the United States of America from
investment activities associated with debt issued to fund the
For of Services in this
Services the the Consultant's
will as in of Exhibit B attached to this
of Consultant's expenses shaU be made at the tirne and in the form as
for in Exhibit B to this
of Consultant's and expenses
after submission of Consultant's invoice for services.
In the the Consultant are abandoned
Consultant shall be for Services ,.,,.,,.r,.,,,.,.,.,,rl
of abandonment as if such Services were an additional service
to Section 2 of this to a maximum fee of An act of
abandonment shall be deemed to have occurred when no action has been taken
the relative to the services of Consultant for a of three
months from the date of the initial of a and there has been
the
schedule of Consultant fees set forth in this and Exhibits is
months from the date of this
PersonneL
Consultant
Consultant for a of twelve (
to
Con~ultant shall make available other
to Consultant's services. The
in Consultant's staff
The and agree that such "'",."'""'."'"'
Consultant and shall not be considered be '"ty'""~'""""'
Rf)L,\PP & ;\SSC)CIA 1'ES 2
ATTACHMENT 2-Page 2 of 12
Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Term of Agreement.
This Agreement shall continue in full force and effect for a period of thirty-six
(36) months from the date hereof unless terminated by either patty by not less
than thirty (30) days written notice to the other party except that the Agreement
shall continue in full force and effect until completion of Consultant's services or
until an abandonment shall have occurred as described in Section 3.04 hereof.
This Agreement may be extended from time to time as agreed by the City and the
Consultant.
Modification.
This Agreement contains the entire agreement of the parties. It may be amended
in whole or in part from time to time by mutual consent of the parties. This shall
not prohibit the City and Consultant from entering into separate agreements for
other services.
Assignment.
The rights and obligations of the City under this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of the City. This
agreement may not be assigned by the Consultant without the consent of the City
except for compensation due Consultant.
Disclosure.
Consultant does not assume the responsibilities of the City, nor the
responsibilities of the other professionals and vendors representing the City, in
the provision of services and the preparation of the financing documents,
including initial and secondary market disclosure, for financings undertaken by
the City. Information obtained by Consultant and included in any disclosure
documents is, by reason of experience, believed to be accurate; however, such
information is not guaranteed by Consultant.
Confidentiality.
The Consultant agrees that all financial, statistical, personal, technical and other
data and information designated by the City as confidential shall be protected by
the Consultant from unauthorized use or disclosure. The City acknowledges that
the Consultant is required to comply with applicable laws governing disclosure
of public information.
Indemnification.
To the fullest extent permitted by law, Consultant agrees to protect, defend, and
hold harmless the City and its elective and appointive boards, officers, agents,
and employees from any and all claims, liabilities, expenses, or damages of any
nature, including attorneys' fees, for injury or death of any person, or damages of
any nature, including interference with use of property, arising out of, or in any
way connected with the negligence, recklessness and/or intentional wrongful
CITY OF SAN JUAN CAPISTRANOIFIELDMAN, ROLAPP & ASSOCIATES Page 3
FRA Project No. __
00075721
ATTACHMENT 2-Page 3 of 12
This hold harmless agreemeO! shall of whether
any insurance are T'he
upon the amount of indenmification to be ""'''"''"'''"
Section 11 Insurance.
11 .01 Consultant :'.hall and
insurance
1 L02 at its own expense, shan obtain and maintain insurance at all times
of this contract. insurance must be written with a
Best Guide "A"-rated or insurance carrier admitted to write insurance in
the state where the work is located.
11.()3 Insurance coverages shall not be less than the
A Workers'
I L
2.
2.
3. Products
4.
limits of not l.ess than
UUHWCf,'-' and
Errors and omissions with limits
Sed:ion 12 Pennits/Ucenses,
for it
Section Effect,
13.01 A waiver or the of a breach of any of this
be construed as a waiver of any
the Consultant
CiTY OF SAN JlJAN ROLAPP & ASSOCIATES 4
FRA No.
00075721
ATTACHMENT 2-Page 4 of 12
13.02 All agreements contained herein are severable and in the event any of them shall
be held to be invalid by any competent court, this Agreement shall be interpreted
as if such invalid agreements or covenants were not contained herein, and the
remaining provisions of this Agreement shall not be affected by such
determination and shall remain in full force and effect. This Agreement shall not
fail because any part or any clause hereof shall be held indefinite or invalid.
13.03 Each party hereto represents and warrants that this Agreement has been duly
authorized and executed by it and constitutes its valid and binding agreement,
and that any governmental approvals necessary for the performance of this
Agreement have been obtained.
13.04 The validity, interpretation and construction of this Agreement and of each part
hereof shall be governed by the laws of the State of California. Venue for any
lawsuit concerning this agreement is Orange County, California.
IN WITNESS Whereof, the parties have duly executed this Agreement as· of the day and year
first above set forth.
CITY OF SAN JUAN CAPISTRANO
By: --------------------------
Date:----'--------
FIELD MAN, ROLAPP & ASSOCIATES, INC.
19900 MacArthur Boulevard, Suite 1 1 00
92612
Da
APPROVED AS TO FORM:
Title:
Title:
ATTEST:
Maria Morris, City Clerk
CITY OF SAN JUAN CAPISTRANO/FIELDMAN, ROLAPP & ASSOCIATES
FRA Project No.· __
00075721
PageS
ATTACHMENT 2-Page 5 of 12
EXHIBIT A
TO
PROF'ESSJONAL SERVICES AGREEMENT FOR :FINANCIAL ADVISOR
BY AND BETWEEN
THE CITV OF SAN CAPISTRANO
AND
ROLAPP & ASSOCIATES
A.
The Consultant shall all the duties and services described in Section 1 of this
and shaH such other services as it deems necessary or advisable to
consistent with the standards and of nn,lP~Q'"""I
the time such services are rendered to the
The may, vvith the concurrence of
Services not identified within the terms of
may be described in an addendum to this Exhibit A and arc
Exhibit B to this
B.
Consultant shaH assume
and execution of each debt issue
Services which are rendered
shall be such as to minimize the costs of the transaction coincident with
described in
and market access. The Consultant's debt issuance Services
• Establish the
• the
Monitor the Transaction Process
Review the Official both and final
Procure and Coordinate Additional Service Providers
Provide Financial Advice to the Related to Documents
"' and
• Plan and Schedule Presentation and Investor
• Conduct Credit Enhancement Procurement and Evaluation
• Conduct Market of Market
• Recommend Award of Debt Issuance
• Provide and Assistance
ROLAPP & ASSOCIATES Exhibit
ATTACHMENT 2-Page 6 of 12
Specifically, Consultant will:
l. Establish the Financing Objectives.
At the onset of the financing transaction process for the Project, the Consultant shall
review the City's financing needs and in conjunction with the City's management, outline
the objectives ofthe financing transaction to be undertaken and its proposed form.
Unless previously determined, Consultant shall recommend the method of sale of debt
and outline the steps required to achieve efficient market access.
2. Develop the Financing Timetable.
The Consultant shall take the lead role in preparing a schedule and detailed description of
the interconnected responsibilities of each team member and update this schedule, with
refinements, as necessary, as the work progresses.
3. Monitor the Transaction Process.
The Consultant shall have primary responsibility for the successful implementation of the
financing strategy and timetable that is adopted for each debt issue relating to the Project.
The Consultant shall coordinate (and assist, where appropriate) in the preparation of the
legal and disclosure documents and shall monitor the progress of all activities leading to
the sale of debt. The Consultant shall prepare the timetables and work schedules
necessary to achieve this end in a timely, efficient and cost-effective manner and will
coordinate and monitor the activities of all parties engaged in the financing transaction.
4. Review the Official Statement .
a. Upon direction of the City, the Consultant shall review the official statement
for each debt issue relating to the Project to insure that the City's official
statement is compiled in a manner consistent with industry standards.
b. The Consultant shall post the official statement on its website at
www .fieldman.com.
5. Procure and Coordinate Additional Service Providers.
Should the City desire, the Consultant may act as City's representative in procuring the
services of financial printers for the official statement and related documents, and for the
printing of any securities. In addition, the Consultant may act as the City's representative
in procuring the services of trustees, paying agents, fiscal agents, feasibility consultants,
redevelopment consultants, or escrow verification agents or other professionals, if the
City directs.
6. Provide Financial Advice to the City Relating to Financing Documents.
Simultaneous with the review of official statements for each debt issue relating to the
Project, the Consultant shall assist the managing underwriters, bond counsel and/or other
legal advisors in the drafting of the respective financing resolutions, notices and other
CITY OF SAN JUAN CAPISTRANO/FIELDMAN, ROLAPP & ASSDCIATES Exhibit A, Page 2
FRA Project No. __
00075721
ATTACHMENT 2-Page 7 of 12
documents. In this regard, the Consultant shall monitor document for a
consistent and accurate presentation of the recommended business terms and financing
stmcture of each debt issue relating to the Project, it being specifically understood
however that the Consultant's services shall in no manner be construed as the Consultant
in the of law.
7.
The Consultant shall work with the staff to
debt issue relating to the Project that is consistent with that
coordinates each transaction with outstanding issues and that reflects current conditions
in the capital markets.
8.
The Consultant shaH
"""''"'-"''"")''"' rating agency
are available for the opn,btum materials and assist the
City officials in preparing for the
9.
the Consultant will initiate discussions with bond
and vendors of other forms of credit enhancements to determine
of and cost benefit of credit
The Consultant shall provide regular summaries of current
trends in the market and how these may favorably or affect
For all types of the Consultant shall undertake such
activities sale of securities bid
• Review and comment on terms of Notice of Sale Inviting Bids
• Provide advice on debt sale scheduling
• Provide advice on the use of electronic bidding
• Coordinate bid opening with the City officials
• bids received and make for"''''"'~'"
"' Provide confirmation of issue bids
where appropriate
• Coordinate with the successful bidder(s)
CITY OF SAN JUAN CAPISTRANO/FIELDMAN, ROLAPP & ASSOCIATES Exhihit A, 3
FRA No.
00075721
ATTACHMENT 2-Page 8 of 12
11. Recommend Award of Debt Issuance.
Based upon activities outlined in Task lO(a) and lO(b) above, the Consultant will
recommend accepting or rejecting offers to purchase the debt issue. If the City elects
to award the debt issue, the Consultant will instruct all parties and help facilitate the
actions required to formally consummate the award.
12. Provide Pre-Closing and Closing Activities.
The Consultant shall assist in arranging for the closing of each financing. The
Consultant shall assist counsel in assuming responsibility for such arrangements as
they are required, including arranging for or monitoring the progress of bond
printing, qualification of issues for book-entry status, signing and final delivery of the
securities and settlement of the costs of issuance.
CITY OF SAN JUAN CAPISTRANO/FIELDMAN, ROLAPP & ASSOCIATES
FRA Project No. __
Exhibit A, Page 4
00075721
ATTACHMENT 2-Page 9 of 12
EXHffiiTB
TO
PROFESSIONAL SERVICES AGREEMENT FOR FINANCIAL ADVISOR
BY AND BETWEEN
THE CITY OF SAN JUAN CAPISTRANO
AND
FIELDMAN, ROLAPP & ASSOCIATES
Compensation and Expenses
Part 1: Fee for Services
Financial Advisory Services performed pursuant to Section 1 of this Agreement, and as more
fully described in the Scope of Services set forth in Exhibit A, the Consultant will be
compensated as described in the table below:
Transaction
San Juan Basin Authority Lease Revenue Bonds
Fees
$40,500
San Juan Capistrano Public Finance Authority COPs
Series 2002 and 2004
$37,500
Payment of compensation earned by Consultant pursuant to this Part 1 shall be contingent on, and
payable at the closing of the debt issue(s) undertaken to finance the Project.
Part 2: Additional Services
Upon authorization of the City in writing of Additional Services to be provided and unless agreed
to otherwise, financial advisory services performed pursuant to Section 2 of this Agreement will
be compensated at the then current hourly rates. The table below reflects the rates in effect as of
the date of execution of this Agreement.
Personnel Hourly Rate
Executive Officers ............................................................ $300.00
Principals .......................................................................... $290.00
Senior Vice President .................... : .................................. $275.00
Vice Presidents ................................................................. $225.00
Assistant Vice President ................................................... $195.00
Senior Associate ............................................................... $150.00
Associate ........................................................................... $125.00
Analyst ................................................................................ $85.00
Administrative Assistants .......... ; ........................................ $65.00
Clerical. ............................................................................... $35.00
Hourly Compensation will be billed on a monthly basis.
CITY OF SAN JUAN CAPISTRANOIFIELDMAN, ROLAPP & ASSOCIATES
FRA Project No. __
00075721
Exhibit B, Page 1
ATTACHMENT 2..: Page 10 of 12
Expenses
Expenses will be billed for separately and will cover, among other things, travel, lodging,
subsistence, overnight courier, conference calls, computer, and fax transmission charges.
Advances made on behalf of the City for costs of preparing, printing or distributing disclosure
materials or related matter whether by postal services or electronic means, may also be billed
through to the City upon prior authorization. Additionally, a surcharge of 6% of the
compensation amount is added to verifiable out-of-pocket costs for recovery of costs such as
telephone, postage, document reproduction and the like. Expenses for the San Juan Basin
Authority Lease Revenue Bonds will be capped at $3,500 and for the City of San Juan Capistrano
Public Financing Authority Revenue COP's will be capped at $1,500.
Limiting Tenns and Conditions
The above compensation is based on completion of work orders within six months of the City's
authorization to proceed, and assumes that the City will provide all necessary information in a
timely manner.
The fee shown above in Part 1 presumes attendance at up to 8 meetings in the City's offices or
such other location within a 25-mile radius of the City place of business as the City may
designate. Preparation for, and attendance at City Council meetings on any basis other than "by
appointment" may be charged at our normal hourly rates as shown in Part 2, above.
Abandonment
If, once commenced, the services of the Consultant are termipated prior to completion of our final
report for any reason, the Consultant will be compensated for professional services and
reimbursed for expenses incurred through the time of receive notification of such termination at
the standard hourly rates shown above, subject to a minimum charge of $0
CITY OF SAN JUAN CAPISTRANO/FIELDMAN, ROLAPP & ASSOCIATES
FRA Project No. __
00075721
Exhibit B, Page 2
ATTACHMENT 2-Page 11 of 12
ATTACHMENT 2-Page 12 of 12
AGREEMENT FOR Bffi:jQ COUNSEL ~ERVICES
THIS AGREEMENT is entered into as of June , 2013, between the CITY OF
SAN JUAN CAPISTRANO (the "Issuer") and ORRICK, HERRINGTON & SUTCLIFFE LLP
("Bond Counsel"), as follows:
Recitals
A. Issuer desires to engage the services of bond counsel in connection with a
proposed (i) issuance of revenue bonds by the San Juan Capistrano Financing Authority or the
San Juan Basin Authority backed by installment payments or lease payments to be made by the
Issuer or (ii) execution and delivery of certificates of participation evidencing interests in
installment payments to be made by the Issuer (in either case, the "Bonds"), to be sold at
competitive sale for the purpose of refunding all or a portion of the San Juan Capistrano Public
Financing Authority Revenue Certificates of Participation, Series 2002 (the "Water System
Refunding"), and/or refunding all or a portion of the San Juan Basin Authority Lease Revenue
Bonds (Groundwater Recovery Project), Issue of2002 (the "SJBA Refunding"), each issued to
fund certain water system capital improvement projects (the "Projects").
B. Bond Counsel possesses the necessary professional capabilities and
resources to provide the legal services required by Issuer as described in this Agreement.
1 . Scope of Services.
Bond Counsel shall perform the following legal services:
(1) Analysis of the validity of the Bonds under State Of California law and the
exclusion of interest on the Bonds from gross income under federal tax law.
(2) Consultation with representatives of the Issuer, including Rutan & Tucker,
LLP ("Issuer Cmmsel"), Fieldman, Rolapp & Associates, and others, with respect to the
timing, terms, and legal structure of the proposed Bonds.
(3) Preparation of documents to be adopted or entered into by the Issuer, the
San Juan Capistrano Public Financing Authority or the San Juan Basin Authority required
for the authorization, sale and issuance of the Bonds, including preparation of the
resolutions approving the issuance of the Bonds, the notice of sale, any indenture or trust
agreement providing for the issuance of the Bonds, and any installment sale agreement or
lease entered into by the Issuer backing the Bonds (the "Major Legal Documents").
( 4) Coordination of preparation of the Preliminary Official Statement and
final Official Statement for the Bonds based on information provided by the Issuer and
others. ·
OHSUSA:753749804.1
ATTACHMENT 3-Page 1 of 5
(5) Preparation of the Continuing Disclosure
summaries ofthe Major Documents included in
(7) Attendance at of the working
by
Juan Juan Basin Authority
and coordination ofthc Bond
of Counsel's customary form of legal opinion to
validity of Bonds the , ... ,. .. ""''"''" status of
thereon.
(I 0) Preparation
shall have to render
circulate documents to and
Counsel to the extent requested by or
entitled to assume that Issuer reviewed all documents and
of f(Jr prior to
Cmmsel
any litigation or other or
ofthe Bonds, the Projects or any related matter.
not include the content or validity of any
or
to or
OllSUSA:753749804.l 2
ATTACHMENT 3-Page 2 of 5
post issuance tax compliance or disclosure (although Bond Counsel may be
"'"'!"''"''"'"'''"to provide either or both
to the Bond or the Project after "'·''"'"'''"''"'
2.
Bond will paid a fixed the services of $85,000 if the
proceeds with Water System Refunding only and $135,000 if the proceeds with
Water System Refunding and the Refunding.
fee is in part, upon the assumption that the
HH<HlvlH~ will conform to the
will conform to the thereof contained
the Water System Refunding and the Refunding will proceed on
same schedule, the will not have an extraordinary of
problems/issues, Counsel will not be to more than two out of town trips and
will be required to attend no more than the usual of meetings and conference calls, Bond
will not be required to an inordinate amount of drafts of the Major Legal
the structure of the transaction will not materially change (particularly after
ofthe Major Documents has commenced), and Bonds not
December 31,2013.
Bond Counsel wili not for customarily
incurred by Bond Counsel performing bond counsel services Section 1 of
Any publication or printing costs required connection with Bonds shall
be paid directly by but if paid by the Bond Counsel on behalf of shall be
to Counsel on demand.
payable by Issuer
entirely
OHSUS/\:753749804. l 3
ATTACHMENT 3-Page 3 of 5
terminate upon issuance of the Bonds; provided that Issuer shall remain liable for any unpaid
compensation or reimbursement due under Section 2 of this Agreement. Upon termination,
Bond Counsel shall have no future duty of any kind to or with respect to the Bonds or the Issuer.
This Agreement shall not be the basis of any breach of contract claim that would have the effect
of extending the statute of limitations pertaining to legal malpractice to the statute of limitations
pertaining to breach of contract. Except as state above, Bond Counsel retains. the right to discard
any files and materials. It is Bond Counsel's current policy (subject to change) to discard all
files and materials after issuance of the Bonds'( except the closing transcript until after the Bonds
are paid or defeased) or following cessation of work on the financing without issuance of Bonds.
4. Nature of Engagement; Client Relationships With Other Parties. The role
of bond counsel, generally, is to prepare or review the proceedings for issuance of the bonds,
notes or other evidence of indebtedness and to provide an expert l~gal opinion with respect to the
validity thereof and other subjects (usually including the tax status of interest thereon) addressed
by the opinion. Consistent with the historical origin and unique role of bond counsel, and
reliance thereon by the public finance market, Bond Counsel's role as bond counsel under this
Agreement is to provide opinions and related legal services that represent an objective judgment
on the matters addressed rather than the partisan position of an advocate.
In performing its services as bond counsel in connection with the Bonds, Bond
Counsel will act as special counsel to Issuer (as such and not any particular body, board, office
or official) with respect to issuance of the Bonds; i.e., Bond Counsel will assist Issuer Counsel in
representing Issuer but only with respect to validity of the Bonds and the Major Legal
Documents as to the Issuer and tax status of interest on the Bonds, and in a manner not
inconsistent with the role of Bond Counsel described in the first sentence of this section.
Issuer acknowledges that Bond Counsel regularly performs legal services for
many private and public entities in connection with a wide variety of matters .. For example,
Bond Counsel has.represented, is representing or may in the future represent other public
entities, underwriters, trustees, rating agencies, insurers, credit enhancement providers, lenders,
contractors, suppliers, financial and other consultants/advisors, accountants, investment and
swap providers/brokers, providers/brokers of derivative products and others who may have a role
or interest in the Bond financing or the Projects or that may be involved with or adverse to Issuer
in this or some other matter. Bond Counsel agrees not to represent any such entity in connection
with the Bond financing, during the term of this Agreement, without the consent oflssuer.
Given the special, limited role of bond counsel described above, Issuer acknowledges and agrees
that no conflict of interest exists or would exist, and waives any actual or potential conflict of
interest that might be deemed to arise, now or in the future, from this Agreement or any such
other relationship that Bond Counsel may have had, have or enter into, and Issuer specifically
consents to any and all such relationships.
5. Limitation of Rights to Parties. Nothing in this Agreement or in any ofthe
documents contemplated hereby, expressed or implied, is intended or shall be construed to give
any person other than Issuer and Bond Counsel any legal or equitable right or claim under or in
respect of this Agreement, and this Agreement shall inure to the sole and exclusive benefit of
Issuer and Bond Counsel.
OHSUSA:7537498041 4
ATTACHMENT 3-Page 4 of 5
I
6. Counterparts. This Agreement may be executed in any number of
counterparts and each counterpart shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same Agreement.
Issuer and Bond Counsel have executed this Agreement by their duly authorized
representatives as of the date provided above.
7. Insurance. Bond Counsel advises that it does maintain errors and
omissions insurance coverage applicable to the services to be rendered under this Agreement.
CITY OF SAN JUAN CAPISTRANO
John Taylor, Mayor
ORRICK, HERRINGTON & SUTCLIFFE LLP
By:
ATTEST:
Maria Morris, City Clerk
OHSUSA:753749804.l 5
ATTACHMENT 3-Page 5 of 5
CALL TO ORDER
UTILITIES COMMiSSION MINUTES
TUESDAY MAY 21, 2013
The meeting of the Utilities Commission was called to order by Chairman Lytle at 8:05 am.
PLEDGE OF ALLEGIANCE:
Commissioner Miller led the Pledge of Allegiance.
ROLL CALL:
Commissioners Present:
Staff Present
Tom Lytle, Chair
Richard Hartl, Vice Chair
Dan Merkle
Ray Miller
Lee Goode
Keith VanDer Maaten, Utilities Director
Francie Kennedy, Water Conservation Coordinator
Ziad Mazboudi, Senior Civil Engineer
Tom Bokosky, Human Resources Manager
Cindy Russell, Chief Financial Officer
Justin Kirk, Senior Management Analyst
Betsy Dubois, Administrative Specialist
PRESENTATIONS:
None
COMMISSION REPORTS/ORAL COMMUNICATIONS:
Resident John Perry addressed the Commission.
Susan Hinman, Director of MWDOC, gave an update to the Commission.
Resident Jim Reardon addressed the Commission
Karl Seckle with MWDOC addressed the Commission
ITEMS RECEIVED TOO LATE TO BE AGENDIZED:
None
CONSENT CALENDAR:
1. Consideration of Meeting Minutes from the April 22. 2013 Meeting
2. Consideration of the Utilities Department Update for the Month of April. 201 ~
3. gonsideration of the Award of an Outside Contract Services for Backflow Program
ATTACHMENT 4-Page 1 of 3
UC Meeting Minutes 2 May 21. 2013
4. Consideration of Easements within the Riding Park
5. Consideration of the Award of a Construction Agreement for the Installation of Water lines at
the Reata Park
This item was pulled by the Commission. Commissioner Merkle inquired about the exhibits
that were not attached to the item. J. Kirk explained that the exhibits were not necessary for
action on this item.
Motion to approve Items H5 Moved by Commissioner Merkle; seconded by Vice-Chair
Hartl and carried 5-0-0.
6. Consideration of Soticitation of Bids for the Marbetla Recycled,d:~: ~ooversion
7.
".,;l/i~~;;:g>,
Item H-5 was pulled for further discussiott:' ·
balance of the consent calendar moved by ··~!l~~un1r~
Commissioner Goode and carried 5-0-0.
UNFINISHED BUSINESS
None
NEW BUSINESS:
Chairman Lytle requ that ite~;.!~1 and J2 be:$witched
. rove ltems::i~J~~~~rove the
er Mi/ler; ~~rseconded by
f Discussion Regardi~cjiit~e Utiliffis;C,ol!lmission,:if~eting Twice a Month.
, .. , ,.,_\~,,··<:v:;?~:<· · .. , ,_. ,,:;'
This it an DerM~'§ten.
Moti91l&~fq continue i£fitfi:'D~1 indel(ff!teiY Moved by Commissioner Merkle; seconded by
cotffmitiSioner Miller and carried 5~0J.o.
2.
,·1~?·:'
This item was· ·r;~s~nteg'by Tom Bokosky, Human Resources Manager.
Motion to continu~~~:3if~m J2 until the City Manager can present the item to the
Commission Moverf by Commissioner Miller; seconded by Commissioner Goode and
carried 5-0-0.
3. Consideration of the Refunding Opportunities of the 2002 and 2004 Water Certificates of
Participation (Water System Facilities) and the San Juan Basin Authoritv Lease Revenue
Bonds (Groundwater Recover Project) Issue of 2002. and Agreements for Financial Advisor
Services (Fieldman. Rolapp and Associates. Inc.) and Bond/Disclosure Counsel Services
(Orrick. Harrington and Sutcliffe. LLP)
This item was presented by C. Russell.
ATTACHMENT 4-Page 2 of 3
UC Meeting Minutes 3 May 21,2013
Motion to Recommend to City Council Moved by Commissioner Merkle; seconded by
Vice Chair Hartl and carried 5-0-0.
4. Consideration of the City of Sal"! Juan Capistrano's Third Quarter Financial Report for the
Period from July 1, 2012 through March 31, 2_913, Water and Sewer Enterprise Funds (City
Council Urgent Strategic Priority}; and Proposed Budget Revisions and Update on the City
Council's Priorities ..
This item was presented by C. Russell.
Motion to Recommend to City Council Moved by Commissioner Miller; seconded by
Commissioner Goode and carried 5-0~0.
COMMISSIONER QUESTIONS/COMMENTS:
Commissioner Goode shared a mailer he had received and suggested that the Utilities
Department consider doing a newsletter. K. Van Der Maaten replied that a citywide newsletter
was being considered.
ADJOURNMENT:
Action:
Motion to Adjourn to Special Utilities Commission Meeting dated June 4, 2013 at Bam
Moved by Commissioner Miller; seconded by Commissioner Goode, and carried
unanimously, 5~0-0 to adjourn to the Special Utilities Commission meeting on June
2013 at Bam
Respectfully submitted,
Keith VanDer Maaten,
Commission Secretary
Prepared by,
Betsy Dubois,
Administrative Specialist
ATTACHMENT 4 -Page 3 of 3