2016-252ORDINANCE NO. �Q � ��.���
AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY
MANAGER TO EXECUTE A THIRD SUPPLEMENT TO A PROFESSIONAL SERVICES
AGREEMENT BY AND BETWEEN THE CITY OF DENTON, TEXAS AND THE LAW FIRM
OF COLE SCHOTZ, P.C., DALLAS, TEXAS FOR LEGAL SERVICES RELATING TO
TR.ANSACTIONAL AND REGULATORY WORK PERTAINING TO THE TEXAS MUNICIPAL
POWER AGENCY; PROVIDING FOR ADDITIONAL EXPENDITURE AGENCY OF NOT-TO-
EXCEED $400,000; PROVIDING AN EFFECTIVE DATE. (FILE 5380 IN
THEADDITIONALAMOUNT NOT-TO-EXCEED $400,000, AGGREGATING A TOTAL NOT-
TO-EXCEED $799,500).
WHEREAS, on October 12, 2013, the City Manager awarded a Professional Services
Agreement (hereafter the "Agreement") to Cole Schotz, P.C. in the amount of $75,000 for legal
services regarding operational, transitional, transactional, and related legal work relating to the Texas
Municipal Power Agency; and
WHEREAS, on November 18, 2014, City Council approved a First Supplement to the
Professional Services Agreement with Cole Schotz, P.C., (hereafter the "First Supplement") in the
further amount of $125,000 aggregating a not-to-exceed amount of $200,000 for additional services
relating to the Texas Municipal Power Agency; and
WHEREAS, on March 3, 2016, the Purchasing Manager approved a Change Order to the
Professional Services Agreement with Cole Schotz, P.C., in the further amount of $49,500
aggregating a not-to-exceed amount of $249,500 for additional services relating to the Texas
Municipal Power Agency; and
WHEREAS, on June 7, 2016, the City Council approved a Second Supplement to the
Professional Services Agreement with Cole Schotz, P.C. (hereafter the "Second Supplement") in the
further amount of $150,000 aggregating a not-to-exceed amount of $399.500 for additional services
relating to the Texas Municipal Power
WHEREAS, there appears to the Council that further professional services must be
completed; and the City Manager having recommended to the Council that the "Second Supplement
to Professional Services Agreement with Cole Schotz, P.C. (hereafterthe "Second Supplement") be
authorized to amend such Agreements, with respect to the scope of work and an increase in the
payment amount by $400,000; and said fees under the proposed Second Supplement are fair and
reasonable, and are consistent with and not higher than the recommended practices and fees
published by the professional associations applicable to the provider's profession; and such fees do
not exceed the maximum provided by law; NOW, THEREFORE,
TH� COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Manager is hereby authorized to enter into the "Third Supplement
to Professional Services Agreement99 with Cole Schotz, P.C. (the "Third Supplement"), in
substantially the form that is attached hereto as Exhibit "A" and incorporated herewith by reference,
which increases the amount of the engagement by and between the City of Denton, Texas and Cole
Schotz, P.C., which Agreement is on file in the office of the Purchasing Agent, in the additional
amount of $400,000, which amount is hereby approved; and the expenditure of funds therefor is
hereby authorized in accordance with said Second Supplement. The total purchase order amount
therefore increases to the amount of not-to-exceed $799,500.
SECTION 2. � The City Council of the City of Denton, Texas hereby expressly delegates the
authority to expend funds and to take any actions that may be required or permitted to be performed
by the City of Denton, Texas under File No. 53 80, to the City Manager of the City of Denton, Texas,
or his designee.
SECTION 3. The recitations and statements contained in the preamble hereto are
incorporated herewith as a part of this Ordinance for all purposes.
SECTION 4. This ordinance shall become effective, and is hereby approved on this date.
PASSED �?�1:� APPROVED this the � day of ���i� �, 2016.
f°�' �
�_; r � ,�
.e
``� i J N r r��
,�,1`� � �u���� �� ��`� CHRIS WATTS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
:
��1�I�'��.��'I�'L3 AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
By:
Cole Schotz Pc.
James W. Waiker
Membar
Reply ro Texos Offtce
Wd�ar': Direct Lfnm 469•557-9391
Wrtters Oirect Faw 4G9•333•0361
Writer'i E-MaEb �walkerQcdes�otzcom
September 6, 2016
Anita Burgess, Esq.
City Attorney
City of Denton
Municipal Building
215 East McKinney
Denton, TX 7b201
2515 McKinney Arenue, Suita 1350
aana:, nc �a2o,
469-557•9390 469-533-1587 fax
Naw Jersey
New York
Delaware
Maryload
Florida
Re; Extension of that certain Engagement Contract regarding the representation
of the City of Denton in connection with analysis, drafting and research in
support of negotiations regarding certain Asset Purchase Agreements for the
sale of the Gibbons Creek Power Plant and all related Generation Assets,
Transrnission Assets now owned by the Texas Municipal Power Agency
("TMPA") and all tasks relevant to the Decommissioning and Dissolution of
TMPA and its various assets (hereinafter referred to globally as the "TMPA
Negotiations").
Dear Anita:
I want to thank you for entrusting your legal needs to Cole Schotz, P.C. ("Cole Schotz" or
the "Firm"). We are aware that there are many lawyers with whom you and the City of Denton
("Denton") could work, and we appreciate your giving us the opportunity to serve Denton.
Since the Firm's founding in 1928, we have prided ourselves on providing superior legal
representation, sound advice and unparalleled service to our clients.
We have been diligently workin� on this matter for the City of Denton and the scale of the
project and depth of the legal work required to protect Denton's legal interests require an additional
extension of our engagement in order to facilitate completion of the TMPA Negotiations. We are
therefore submitting this extension of our legal services agreement to you in your capacity as City
Attomey for Denton. This conespondence constitutes our proposed engagement agreemeni
memorializing your engagement of the Firm to represent Denton's legal interests in the TMPA
Negotiations. Our representation of Denton in relation to the TMPA Negotiations will be limited to
providing legal services reasonably within the ambit of these negotiations and the scope of our
representation will nat extend to include any other type of legal services absent a written
supplement to this engagement agreement. This representation will continue and the extension will
become effective upon your execution of this engagement agreement in the space provided below.
www.coleschotz.com
Cole Schotz P.C.
Anita Burgess, Esq.
September 6, 2016
Page 2
Le�al Services to be Provided
You agree that we will represent Denton in the TMPA Negotiations. The scope of our
engagement can only be extended pursuant to a supplemental written engagement agreement.
Denton, by and through its employees and elected officials, agrees to fully cooperate with us and to
provide us with all information relevant to the tasks and issues involved in the TMPA Negotiations.
We agree to provide conscientious, competent and diligent services and at a11 times will seek to
achieve a favorable transactional outcome on a cost-effective basis. You should be aware that
because of the uncertainty of sizeable commercial transactions of this nature (i.e., selling a power
generating facility, mining land and/or transmission assets), the interpretation of and changes in the
law, and many unknown factors, attorneys cannot and do not warrant, predict or guarantee results or
the final outcome of any matter.
Our Firm's representation of Denton was first approved by Denton's City Manager on
October 3, 2013 and has been continued through several extensions in light of the continuing nature
and complexity of the TMPA Negotiations. We have now agreed that there is a need to continue
this engagement in order to coznplete the remaining work relevant to the TMPA Negotiations,
including our continuing analysis of Denton's legal interests in relation to its status as a Mernber
City of TMPA, the ongoing review, drafting and negotiation of one or more Asset Purchase
Agreements, and all attendant indemnity and decommissioning agreements, relating to the potential
sale of certain TMPA assets and the bearing or impact same will have upon Denton's interests, the
final negotiations of an Operating Agreement between the TMPA and Denton and the other
Member Cities in support of and supplement to the current Power Sales Contract between the same
parties, and all related tasks and analysis, in an amount not-to-exceed an additional $400,000. While
we expect that this amount will cover all legal services necessary to complete the above-described
tasks, we recognize that certain vaziables exists and certain factors are outside ttie control of the
Firm, Denton and the TMPA that may require a greater than expected amount of legal services that
we cannot accurately predict on a current basis.
Le�al Fees and Expenses
Our objective to charge a fair fee for the services rendered is achieved primarily through the
maintaining of accurate records of the time spent by each attorney and paralegal on a particular
matter and then billing for that attorney's and para-professianal's time in accordance with the range
of hourly rates established. The time spent by certain professionals having specific expertise
necessary to complete the substantive analysis required by the sale of certain TMPA assets, the
securing and evaluating environmental liability coverage for Denton's benefit, the sale of certain
parcels of real estate and all related tasks shall be billed at standard Firm rates, and the following
discounted rates shall otherwise apply:
James W, Walker $410.00 per hour
Emily Lamond $390.00 per hour
Our rates aze geriodically reviewed and adjusted based upon fihe increasing experience of the
attorneys and various economic factors. Any rate changes will be reflected in our monthly invoices.
Cole 5chorz P.C.
Anita Burgess, Esq.
September 6, 2016
Page 3
We will not raise any rates being charged absent your prior written approval of same. The
referenced hourly rates apply to all services rendered including telephone calls, drafting and review
of correspondence and documents, travel time, legal research, negotiations, internal and external
meetings and conferences and any other service relating to this matter. James W. Walker, as the
undersigned counsel, will principally handle and direct all aspects of Denton's legal representation
required by this engagement. Emily Lamond, as an environmental Iawyer, Catherine Bostock, as an
environmental coverage specialist, Alan Rubin, as a corporate and tax lawyer, and Chris Caslin, as a
real estate lawyer, will a11 be involved in reviewing, analyzing, drafting and providing assistance to
the lead negotiator and Denton personnel in relation to the sale of the TMPA Gibbons Creek
generation plant, and ultimately the sale and disposition of the remaining Mining and Transmission
assets, in order to protect Denton's legal interests in each such transaction. The Firm agrees to
utilize the services of associates and para-professionals for all supporting reseazch and related tasks
on an as-needed basis and in an effort to ensure that the most effective professional is efficiently
performing each necessary task at the lowest available billing rate. We welcome you to view our
website (www.coleschotz.com) if you would like additional information about the attorneys who
will be working on this matter.
In addition to legal fees, Denton agrees to promptly pay for expenses such as filing fees,
messenger services, telephone calls, photocopying, Lexis and Westlaw research, travel, postage,
facsunile transmissions, scanning, coding, overtime clerical assistance, subpaenas, search fees,
transcripts, experts' fees and reports, title, survey, fees and expenses related to harvesting, hosring
and processing any and all electronically stored information, and any other necessary expenses in
legal matters.
Bi11in� and Pavment
We will send Denton our invoices on a monthly basis for services and expenses and we will
issue a final invoice upon termination of our representation in this matter. Denton agrees to tender
payment upon receipt of each invoice. Please direct any questions you might have about the nature
or scope of legal services provided Denton to the undersigned counsel.
Termination of Renresentation and Disposition of Documents and the File
Our representation will terminate upon completion of the TMPA Negotiations. We reserve
the right to withdraw from this matter, however, if Denton fails to honor this agreement, including
failure to honor fee anangements, or for any just reason as permitted or required under the Texas
Rules of Professional Conduct or by the Rules of Court. We will also withdraw at Denton's request.
Tf we withdraw, Denton agrees to promptly pay us for all services rendered and all fees and
expenses incurred prior to the date of withdrawal. At the conclusion of our representation, we will
return to Denton any original documents that it has furnished to us. If Denton would like to have
any other documents or pleadings from the file we maintain on this matter, please advise us
accordingly and we will provide your office all requested copies of our file documents and
materials. Pursuant to the Firm's document retention policy, Denton's file will be retained for seven
{7) years after wluch time the file may be destroyed without further notice to Denton or your office.
Cole Schotz P.C.
Anita Burgess, Esq.
September 6, 201b
Page 4
Conflicts of Tnterest
Before accepting this engagement, we have undertaken reasonable and customary efforts to
deternune whether there are any potential conflicts of interest that would baz our Firm from
representing Denton. Based upon this inquiry and the information available to us, we are not aware
of any potential conflict of interest or basis for disqualification from this engagement. We reviewed
this issue in accordance with the rules of professional responsibility applicable and currently in
force in Texas. The execution and return of the enclosed copy of this letter by you represents an
express agreement to the applicability of these rules.
Texas Law on Retention of Attornevs
Pursuant to Texas state law, Denton has the right to complain to the Chief Disciplinary
Counsel of the State Bar of Texas about professional misconduct by any attorney, including any
professional misconduct by the Firm's attorneys. Complaints must be made in Writing. Complaint
forms are available from the State Bar of Texas Commission for Lawyer Discipline. The State Bar
of Texas investigates and prosecutes professional misconduct committed by Texas attomeys.
Although not every complaint against or dispute with an attorney includes professional misconduct,
the State Bar's Office of Chief Disciplinary Counsel will provide You information about how to file
a complaint. The toll-free number for the State Bar of Texas is 1-800-932-1900.
This agreement, as well as our entire attorney-client relationship, shall be guided exclusively
by Texas law. Should any dispute arise regarding same which cannot be resolved amicably, the
courts of the State of Texas, in and for DaIlas County, shall be the exclusive jurisdiction and venue
for any such dispute.
Conclusion
This written agreement constitutes the entire agreement relating to Denton's engagement of
this Firm in connection with the TMPA Negotiations. This written engagement agreement is not
subject to any oral agreements or understandings, and can be modified only by further written
agreement signed by legal representatives of boih Denton and the Firm. Unless expressly stated in
this engagement agreement, no obligation or undertaking shall be implied on the part of the Firm.
Please carefully review this engagement agreement. If the terms of our engagement in the
TMPA Negotiations are acceptable, please sign and return the enclosed copy of this letter, so that
we may continue our work. This engagement agreement may be executed in counterparts which
taken together, shall constitute one and the same letter. A facsimile signature will be as valid as an
original signature for a11 purposes relevant to this engagement agreernent. The signature of the
undersigned counsel on this letter signifies the Firm's agreement to these terms of our engagement
in the TMPA Negotiations.
We look forward to continuing our work with you and the City of Denton. If at any time you
have questions about the services we are performing, please do not hesitate to contact the
undersigned counsel.
�ole Schotz P.C.
Ai��t� €3u�-�css, I�sq,
Septenlb�r 6, 2(�l �
P��e 5
Sii�cer�l�� �iotta`s,
CO��� SCTIOTZ P.�.
�
T�»�e� '�l, W�.Iltei�
JWi�1:�h
CITY �I� D�NT�OI�T
H4t�jARD Iv�AI�TII�, xN�'ERiI'u� CI1: Y IvIAIr1�C�ER
APPRC►VED AS TQ L�GAL ��C�R1'��:
A�Ii'� A I�UI�.G�S �, CiTY .r�TTQRN�Y
r, ,
i
,
�
�Y: 4 ��e � __-_ _ ,,
� �", � � � � � �,