1998-158S \Our Documont~dlnanees\98\O'Melvony Ordinance doc
OP. DINANCE NO
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A CONTRACT
FOR PROFESSIONAL LEGAL SERVICES WITH THE LAW FIRM OF O'MELVENY &
MYERS, L L P, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND
PROVIDING AN EFFECTIVE DATE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I. That the City Manager m hereby authorized to execute a Contract for
Professional Legal Services with the law firm of O'Melveny & Myers, L L P, New York, New
York, regarding various legal issues concerning tax-exempt finance in connection with the
Denton Mumclpal Electric Utility m the areas of electric deregulation and restmctunng, a copy
of which contract is attached hereto and incorporated here~n
~e_QTI.Q...~_~ That the expenditure of funds as prowded ~n the attached contract is
hereby authorized
~ That this ordinance shall become effective immediately upon Its passage
and approval
PASSED AND APPROVED this th~//0/~d4~ day of [7~_~._ ,1998
JAC~ LLER, MAYOR
ATTEST
JENNIFER WALTERS, CITY SECRETARY
HERBERT L PROUTY, CITY ATTORNEY
CONTRACT FOR PROFESSIONAL LEGAL SERVICES
STATE OF TEXAS §
COUNTY OF DENTON § ~_~d
THIS AGREEMENT, made and entered into this the ay of'gMt~, 1998, by and
between O'Melveny & Myers, L L P, a Limited Liability Partnership, 153 East 53rd Street,
Citicorp Center, New York, New York 10022-4611, hereinafter referred to as "Consultant", and
the CITY OF DENTON, a Texas Municipal Corporation, 215 E McKlnney, Denton, Texas
76201, hereinafter referred to as "City"
WHEREAS, the City finds it necessary to employ outside legal counsel to perform
professional legal services in a specmhzed area of law, tax-exempt finance, and
WHEREAS, the Consultant is willing to perform such services in a professional manner
as an independent contractor, and
WHEREAS, the City desires to engage the Consultant to render the professional services
in connecUon therewith, and the Consultant is willing to provide such services
NOW, THEREFORE, ~n consideration of the promises and mutual obhgatlons contmned
herein, the parties hereto do hereby AGREE as follows
I of~ The Consultant shall perform the following services ~n a
professional manner working as an independent contractor not under the direct supervision and
control of the City
A Services to be provided
1 The Consultant shall serve as specml tax counsel to the City of Denton, Texas and
its Municipal Electric Utility, and shall furnish advice and counsel to the City in connection with
legal issues pertmnmg to the City's compliance with the new Treasury Department "Output
Facilities Regulations" and other related tax regulations, advice as to the current tax roles which
affect the C~ty's ability to ~ssue tax-exempt bond indebtedness to fund electric transmission
and/or d~stnbuUon facilities, advice to the City respecting whether or not certain contracts or
arrangements considered by the City, do or do not constitute a "private use"
2 Consultant shall also serve as legal counsel to the City of Denton, Texas and its
Munlmpal Electric Utility, and shall negotiate with representatives of other Cities, Texas
Municipal Power Agency ("TMPA") and the firm of Fulbnght & Jaworskl regarding use of tax-
exempt financmg and restmctunng of Denton's relationship with TMPA, shall work with
designated City of Denton officials and employees and the Reed Consulting Group to continue to
develop altemaUves for restructunng of its TMPA relationship, shall brief the Mayor, other City
Council members, and the Public Utilities Board, as requested
3 Consultant shall also consult, as requested, with the Clty Manager, the Director of
Electric Utilities, the City Attorney, any other designated City staff and designated outside legal
counsel of the City, respecting any and all aspects of the services to be performed under this
Agreement
4 The Consultant shall perform all the professional services required in a timely
fasluon, and shall complete same m compliance with schedules established and coordinated by
the City through its Director of Electric Utilities and City Attorney, through discussions with the
Consultant, as appropriate to carry out the terms and conditions of this Agreement
II Term This Agreement shall terminate upon the earlier of the completion of the
professional services contemplated hereby or the exhaustion of the funds provided hereby This
Agreement may be sooner terminated in accordance with the provisions hereof Time is of the
essence of this Agreement, and the Consultant shall make all reasonable efforts to complete the
services set forth hereto as expeditiously as possible dunng the term of this Agreement, and to
meet the schedules established by the City, through its Director for Electric Utilities and City
Attorney, or as the progress of this matter may reasonably require
III Compensation and Method of Payment
A The Consultant shall charge the following fees for its professional services
hereunder, based on the following fees for its professional services hereunder, based on the
following hourly billing rates for the attorneys and support staff involved in this matter
Partners and Snecial Counsel
Margaret C Henry $320 00/hour
Robert E Ferdon $400 00/hour
James P Marlin $360 O0/hour
Richard M Jones $360 00/hour
Dean Weiner $395 00/hour
Trams Gibbs $325 00/hour
Associate
John Cardenas $115 00/hour
Parale~al
Patrick Alvarez $ 90 00/hour
SuDnort Staff
$35 00 to $55 00 per hour
Attorney time will be billed at one-tenth (1) hour minimum billing increments
B Notwithstanding the foregoing provisions of Article III A hereinabove, at such
times as the Consultant shall adjust its hourly billing rates for attorneys and support staff for the
firm as a whole, the foregoing hourly rates may be increased to reflect prevalhng "low
Contract For Professional Legal Services - Page 2
gmdehne" rates, with the exception of Messrs Ferdon, Marlin, and Jones, whose billing rates
shall reflect a d~scount below their low guideline bflhng rates comparable to that afforded
above
C The Consultant will try to reduce costs whenever feasible by utthz~ng quahfied
partners, associates, paralegals, and support staff The Consultant shall bill the City through the
submlss~on of ~temlzed invoices, statements, and other documentation, together with supporting
data lndmatmg the progress of the work and the services performed on the basis of monthly
statements showing hourly rates mdlcatmg who performed the work, what type of work was
done, and descriptions and/or detmls of all services rendered, along w~th specific description
and suppo~ng documentation, if avtulable, respecting any reasonable and necessary out-of-
pocket expenses incurred
D Consultant and the City agree that all charges for the legal services hereunder,
including reasonable out-of-pocket expenses, shall not exceed Seventy Five Thousand Dollars
and No/100 ($75,000 00)
E The City shall e~ther pay d~rectly or reimburse the Consultant, as the case may be,
for reasonable actual out-of-pocket expenses, including but not limited to, long-distance
telephone, telecopaer, reproduction, overmght comer, and travel expenses prudently recurred by
Consultant All copies will be charged at the rate of fifteen cents ($15) per copy for cop~es
made within Consultant's offices, w~th as much photocopying as possible being done by outside
vendors at bulk rates, ff bulk copying is necessary The parties agree that the charges for
facsimile transmission are at the rate orS1 25 per page Database searches, secretarial overtime
when reqmred by the urgency of a chent's matter, long distance telephone calls, special
dehvenes, and other s~mflar ~tems are billed at or below Consultant's estimated costs
F The parties anticipate invoices or statements for services will. be. g. tehne, rate~ on ~
monthly bas~s and that smd ~nvo~ces or statements will be sent on or about the 1> aay oI eac
month The C~ty shall make payment to the Consultant within thirty (30) days of the
satisfactory completion of services and receipt of an ~temlzed lnvmce or statement All
reimbursable expenses, including, but not necessarily limited to travel, lodging, and meals shall
be paid at the actual cost, pursuant to the terms, conditions, and hm~tatlons herelnabove set
forth All mvmces and bills shall be approved for payment by the Caty Attorney and the
Director of Electric Utilities
G It is understood that the Consultant shall work under the direction of the D~rector
for Electric Utflitaes or her designee, and the City Attorney
H All notices, bflhng statements and invoices shall be made in writing and may be
given by personal dehvery or by mml Notices and lnvmces sent by mall shall be addressed to
Herbert L Prouty, C~ty Attorney, 215 E Mclrdnney, Denton, Texas 76201 When so addressed,
the notice, mvome, and/or payment shall be deemed given upon deposit an the Umted States
Mall, postage prepmd In all other instances, notices, ~nvmces, and/or payments shall be
deemed g~ven at the time of actual delivery Changes may be made in the names and addresses
of the responsible person or office to whom notices, lnvmces, and/or payments are to be sent,
provided reasonable written not~ee as given
Contract For Professional Legal Servmes - Page 3
IV Professional Comnetencv
A The Consultant agrees that an the performance of these professional services,
Consultant shall be responsible for the level of competency and shall use the same degree
of skall and care presently m~unttuned by other practicing professionals performing the
same or smular types of work For the purpose of this Agreement, the key person who
will be coordinating and performing most of the work hereunder shall be Margaret C
Henry, Attorney However, nothtng herein shall limit Consultant from using other
qualified and competent members of its firm to perform the services required herein
B All legal documents as well as any legal opinions prepared or obtmned under the
terms of this Agreement are instruments of service and the City shall retmn ownership
and a property interest therein If thru Agreement is terminated at any time for any reason
prior to payment to the Consultant for work under this Agreement, all such documents
prepared or obtmned under the terms of the Agreement shall upon termination be
delivered to and become the property of the City upon request and without restncnon on
their use or further compensation to the Consultant
V Estabhehment and Mammnanee of Records Full and accurate records shall be
maintained by the Consultant at its place of business with respect to all matters covered by this
Agreement Such records shall be maintained for a period of at least three (3) years after receipt
of final payment under this Agreement
VI ~ At any time dunng normal business hours and upon
reasonable notice to the Consultant, there shall be made avmlable to the City all of the
Consultant's records with respect to all matters covered by this Agreement The Consultant shall
permit the City to audit, examine, and make excerpts or transcripts from such records, and to
make audits of contracts, invoices, matermls, and other data relating to all matters covered by
this Agreement
VII Aceomn!~hmentofPro~ect The Consultant shall commence, carry on, and
complete any and all projects with all practicable d~spatch, m a sound, economical and efficient
manner, and, in accordance with the pmvmlons hereof and all applicable laws In accomplishing
the projects, the Consultant shall take such steps as are appropriate to ensure that the work
involved is properly coordinated with related work being camed on by the City
VIII Conflicts of Interest/Consent of Denton The City agrees that Consultant may
contlnue~ to represent, or may in the future represent, existing or new clients in any matter that is
not substantially related to Consultant's work for the City on the engagement described above,
and that Consultant may obtain eonfidentxal information of interest to the City that would not be
disclosed to the City By executing this Agreement and consenting to the arrangements
described in it, the City wmves any conflict of interest that might arise in such a situation and
agrees not to seek to disqualify Consultant m those engagements or assert a conflict
The City's above consent to conflicting representation, however, does not apply to any
other m,tter where, as a result of Consultant's representation of the City, Consultant has obtmned
proprietary or other confidential information of a non-pubhe nature, that, if known to the other
ehent, could be used an the other matter by the other client to the City's detriment or
disadvantage
Contract For Professmnal Legal Services - Page 4
IX Indemmtv and Indenendent Contractor Relatxonslun
A The Consultant shall perform all services as an independent contractor not under
the direct superwslon and control of the City Nothing herein shall be construed as
creating a relationship of employer and employee between the parties
B The City and Consultant agree to cooperate in the defense of any clmms, action,
stat, or pmceechng of any kind brought by a third party which may result from or d~rectly
or indirectly arise from any neghgence and/or errors or omissions on the part of the
Consultant or from any breach of the Consultant's obhgat~ons under tlus Agreement In
the event of any lmgatlon or claim under tlus Agreement ~n which Consultant is joined as
a party, Consultant shall prowde suitable counsel to defend the C~ty and Consultant
against such clmm, provided the Consultant shall have the right to proceed with the
competent counsel of 1ts own choosing The Consultant agrees to defend, mdemmfy and
hold harmless the City and all of its officers, agents, servants, and employees agmnst any
and all such claims to the extent of coverage by Consultant's professional hablllty pohcy
The Consultant agrees to pay all expenses, ~ncludlng but not limited to attorneys' fees,
and satisfy all judgments which may be ~ncurred or rendered agtunst the Consultant's
professional hab~hty insurance policy Nothing here~n constitutes a wmver of any rights
or remedies the C~ty may have to pursue under either law or eqmty, including, w~thout
lmmatxon, a cause of action for damage or loss to the City, resulting from Consultant's
negligent errors or omissions, or breach of contract, and all such rights and remedies are
expressly reserved
C, Consultant shall mamtmn and shall be caused to be m fome at all times during the
term of this Agreement, a legally binding pohcy of professional habthty insurance, listed
by Best Rated Carriers, with a rating of "A-" or above, ~ssued by an insurance career
approved to do business m Texas by the Texas Department of Insurance Such coverage
shall cover any clmm hereunder occasioned by the Consultant's negligent professional
act, error or omlssmn, m an amount not less than Two Million Dollars ($2,000,000 00)
combined single la'mt coverage occurrence In the event of change or cancellation of the
pohcy by the insurer, the Consultant hereby covenants to immediately admse the C~ty
thereof, and m such event, the Consultant shall, prior to the effective date of change or
cancellation, deliver a copy of a substitute policy furmshmg the same coverage The
Consultant shall prowde a copy of such policy or the declarations page of the pohcy,
whmhever is reasonably satisfactory, to the City through its Director of Electric Utthtles,
s~multaneously with the execution ofth~s Agreement
X Termination of A~reement
A In counect~on with the work outlined in this Agreement, it ~s agreed and fully
understood by the Consultant that the City may cancel or ~ndefimtely suspend further
work hereunder or terminate this Agreement at any t~me upon written notice to
Consultant, Consultant shall cease all work and labor being performed under this
Agreement Consultant may terminate th~s Agreement by giving the City fifteen (15)
days written not,ce that Consultant is no longer in a poslt~on to continue representing the
City Consultant shall invoice the C~ty for all work satisfactorily completed and shall be
compensated in accordance w~th the terms of th~s Agreement All reports and other
Contract For Professional Legal Services - Page 5
documents, or data, or work related to the project shall become the property of the C~ty
upon tenmnation oftlus Agreement
B ' This Agreement may be terminated in whole or m part, in writing, by either party
~n the event of substantial failure by the other party to fulfill ~ts obhgat~ons under flus
Agreement through no fault of the ternnnatlng party Provided, however, that no such
termmatmn may be affected, unless the other party is g~ven [1] written notice (delivered
by certffied mml, return receipt requested) of ~ntent to terminate, and not less than thirty
(30) calendar days to cure the fiulure, and [2] an oppormmty for consultation with the
termmatmg party prior to tenmnat~on
C Nothing contained herein or elsewhere in th~s Agreement shall reqmre the City to
pay for any work whmh is unsatisfactory or whmh is not submitted ~n compliance with
the terms of this Agreement
XI Alternate D~spute Resolution The Consultant and the City agree that, ~f
necessary, they will use their best efforts to resolve any disputes regarding the Agreement
through the use of mediation or other forms of alternate dmpute resohitlon set forth ~n Chapter
154 of the Texas Civil Practice and Remedies Code (V A T C S )
XII ~ Thxs Agreement represents the entire agreement and
understanding between the parUes, and any negotmtions, proposals, or oral agreements are
mtended to be integrated here~n and to be superseded by th~s written Agreement Any
supplement or amendment to this Agreement to be effective shall be ~n writing and signed by the
City and the Consultant
XiII ~ The Consultant shall comply with all federal, state,
and local laws, rules, regulations, and ordinances applicable to the work covered hereunder as
they may~ now read or hereafter be amended
XIV ~overmne Law For the purpose of deternnmng place of agreement and law
governing same, thas Agreement ~s entered mto ~n the C~ty and County of Denton, State of
Texas, a~d shall be governed by the laws of the State of Texas Venue and junsdictmn of any
suit or cause of action arising under or in connection w~th this Agreement shall be exchis~vely in
' t
a court of competent jurisdiction sitting in Denton Coun y
XV Discrimination Prohibited In performing the services reqmred hereunder, the
Consultant shall not discriminate agmnst any person on the bas~s of race, color, religion, sex,
national ongm or ancestry, age, or physical handicap
XVI Personnel
A The Consultant represents that at has or wall secure at its own expense all
personnel reqmred to perform all the services required under this Agreement Such
personnel shall not be employees or have any contractual relations w~th the City
Consultant shall anform the C~ty of any conflict of interest or potential conflict of anterest
that may arise dunng the term of th~s Agreement, ~n accordance w~th Consultant's
Contract For Professional Legal Services - Page 6
responsibthtles under the State of New York and State of California Disciplinary Rules of
Professional Conduct, and subject to the provisions of paragraph VIII, herelnabove
B All services required hereunder wall be performed by the Consultant or under its
direct supervision All personnel engaged m work shall be qualified and shall be
authorized or pennatted under state and local laws to perform such services
XVII ~ The Consultant shall not assign any interest in flus Agreement and
shall not transfer any interest m this Agreement (whether by assignment, novation, or
otherwise) without the prior written consent of the City thereto
XVIII Severablhtv All agreements and covenants contained herein are severable, and
in the event any of them, with the exception of those contained an sections headed "Scope of
Services", and "Compensation and Method of Payment" hereof, shall be held to be invalid by
any court of competent jurisdiction, fins Agreement shall be interpreted as though such invalid
agreements or covenants were not contained herein
XiX ResnonslbthtlesforCl"~m~andLlabflatv Approval by the City shall not
constitute nor be deemed a release of the responsibility and liability of the Consultant for the
accuracy and competency of its work, nor shall such approval be deemed to be an assumption of
such responsibility of the City for any defect an any report or other documents prepared by the
Consultant, its attorneys and employees
XX Mochfication of Aareement No waiver or morhfcatlon of this Agreement or of
any covenant, condition, or limitation herein contained shall be valid unless in writing and duly
executed by the party to be charged therewith, and no evidence of any wmver or modification
shall be offered or received in evidence m any proceeding arising between the parties hereto out
of or affecting flus Agreement, or the rights or obligations of the parties hereunder, unless such
waiver or modification is in writing, duly executed as aforesmd, and, the parties further agree
that the provisions of this section will not be waived as herein set forth
XXI ~ The captions of this Agreement are for informational purposes only
and shall~not in any way affect the substantive terms or conditions of this Agreement
XXII B_.iBIJIgg.F.~ This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective legal representatives, successors, and assigns where
permitted by this Agreement
IN WITNESS HEREOF, the City of Denton, Texas, has caused this Agreement to be
executed m duplicate original counterparts by its duly-authorized City Manager, and Consultant
has ~9xeeuted this Agreement through its duly-authorized undersigned Partner, dated this the
q~OQ--~ day o~aX~1998
Contract For Professional Legal Serwces - Page 7
CITY OF DENTON
A Texas Mumc~pal Corporation
TED I~NP~VID~S', City Manag
ATTEST
JENNIFER WALTERS, CITY SECRETARY
HERBERT L PROUTY, CITY ATTORNEY
O'MELVENY & MYERS, L L P
A Limited Lmbfl~ty Parmcrsh~p
ROBER
ATTES~
F ~sharedkteptkLGL\Our Documents\Contracts\98~4 240'Melveny & Myers Contract doc
Contract For Professional Legal Services - Page 8