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1999-175 ORDINANCE NO qq-/75-- AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT FOR PROFESSIONAL LEGAL SERVICES WITH THE LAW FIRM OF HAYTHE & CURLEY, NEW YORK, NEW YORK, PERTAINING TO FEDERAL TAX ISSUES RELATING TO THE SALE, ASSIGNMENT, OR OTHER DIVESTITURE OF ALL OR A PORTION OF THE ELECTRIC UTILITY ASSETS OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, PROVIDING FOR RETROACTIVE EFFECT OF THE AGREEMENT, AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City Council deems it necessary and in the public interest to engage the law firm of Haythe & Curley, a General Partnership ("H&C'), New York, New York, to provide professional legal services to the City as special outside counsel, and shall advise the City concerning federal tax issues, issues pertaining to outstanding tax-exempt debt, and strategic planning issues pertaining to the sale, assignment, or other divestiture of all or a portion of the electric utility assets of the City of Denton, Texas, and WHEREAS, the City, in order to ascertain its legal rights and alternatives, considering the approach of several critical deadlines in the divestiture process, on November 9, 1998, and from time-to-time thereafter, requested that H&C prowde it w~th legal advice and servmes in the highly specialized areas of federal tax law and ~ssues pertmmng to outstanding tax-exempt indebtedness as they relate to Denton's possible divestiture of all or a portion of its electric utility assets, and other matters of significant importance concermng the proper posturing of Denton Municipal Electnc's actiwtles consldenng the current market and the effect of impending electric deregulation legislation H&C are presently assisting and supporting City staff, and have already provided the City with much needed adwce and legal support Accordingly, it is appropriate that the Agreement for Professional Legal Services with H&C attached hereto, should be ratified, and should be made retroactively effective as of November 9, 1998 in order to properly compensate H&C for its work and expenses incurred at the specific instance and request of the C~ty, which work has directly benefited the City, and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the foregoing professional servmes, as set forth in the Agreement for Professional Legal Servmes, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I That the City Manager is hereby authorized to execute an Agreement for Professional Legal Services with the law firm of Haythe & Curley, a General Parmersh~p, New York, New York, for professional legal services pertmmng to federal tax issues relating to the sale, assignment, or other divestiture of all or a portion of the electric utility assets of the City of Denton, Texas, in substantially the form of the Agreement for Professional Legal Services attached hereto and incorporated herewtth by reference SECTION II That the award of th~s Agreement ~s on the bas~s of the demonstrated competence and quahficat~ons of H&C and the abthty of H&C to perform the professional legal services needed by the C~ty for a fmr and reasonable price SECTION III That the expenthture of funds as provided for ~n the attached Agreement for Professional Legal Services is hereby authorized SECTION IV That the Agreement for Professional Legal Servmes is hereby ratffied and retroactively approved, and shall be effective from and after November 9, 1998 SECTION V That this ordinance shall become effective ~mmethately upon as passage and approval PASSED AND APPROVED th/s the t/~{-~ dayof C~ ,1999 JAC~LLER, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY S \Our Documenls\Ordmanees\99\Haythe & Curley PSA DME d~vest doc AGREEMENT FOR PROFESSIONAL LEGAL SERVICES STATE OF TEXAS § COUNTY OF DENTON § THIS AGRKEMENT, made and entered into th~s the ~ day of ~d?~6~~ , 1999, by and between HAYTHE & CLTRLEY, a General Partnership, 237 Park ~Avdnue, New York, New York 10017, hereinafter referred to as "Consultant", and the CITY OF DENTON, a Texas Mumctpal Corporation, 215 E McKum~y, Denton, Texas 76201, h~rcmafler referred to as "City" WHEREAS, the City finds it necessary to employ outside legal counsel to perform professional legal services in a special,zed area of law, tax-exempt finance, and WHE1LEAS, the Consultant xs wflhng to perform such services in a professional manner as an lndepelldent contractor, and WHEREAS, the City desires to engage the Consultant to render the professional services m connection therewith, and the Consultm~t is wllhng to provide such services, and WHeReAS, the Consultant reqmre$ that its "Standard Terms of Representation - May 1997" documant, a copy o£ which ~s attached h~r~to and mcorporaWcl by reference herewith, shall severn this contractual relationship, cxcept as supplemented or amended by th~s Agreement, and the C~ty ~s wdhng to proceed on that bas~s respecting tlus engagement, NOW, THEREFORE, m cons~deratton of the prom~ses and mutual obhgatwns contained hereto, the parties hereto do hereby AGREE as follows I ~ The Consultant shall perform the following services m a professional manner work~ng as an independent contractor not under the d~rect sup~'viston and control of the City A Serwces to be provided 1 The Consultant shall serve as special counsel to the City of Denton, Texas and its Municipal Electric Utility, in whtch capacity it shall advise the City concerning federal tax issues, lasUes pertaining to outstanding tax-exempt debt, and strategic planmng matters, in each case pertaxmng to the d~vestlture of a portwn of its Electric Utility System, including its interest in the Texas Mulllclpal power Agency (TMPA") This engagement shall not encompass any ht~gatwn work or any work in connection w~th any ruling request that may be submitted to thc Internal Revenue Service or m connection w~th any restmcturm8 of TM'PA Consultant shall also corl~ult, as requested, with the City Manager, the Director of Electric UtthUes, the City Attorney, any other designated City staff and desigihatcd out~d~ legal counsel of tho City, respecting any and all aspects of the services to be performed under th~s Agreement 2 The Consultant shall perform all the professional services requtred in a timely fashion, and shall complete same In comphance w~th schedules established and coordinated by the City through its Director of l~lectnc Utilities and City Attorney, through ~hscussions with the Consultant~ as appropriate to car~ out the t=rms and ~,ond~tlons of this Agreement II Term This Agreement shall terminate upon the completion of the services provided for herein, or upon the exhaustion of the funds provided hereunder, or on December 31, 2000, wtuchever event shall first occur Th~s Agreement may be sooner terminated in accordance with the provisions hereof Time is of thc essence of Llus Agreement, and Consultant shall make all reasonable efforts to complete the services set forth herein as expedit~ously as possible dunng the t~rm of th~s Agreement, and to meet the schedules established by the City, through its D~rector/'or Electric Utilities and C~ty Attorney, or as the progress ofthis matter may reasonably re~lulre III Com?~n.~-t~on and Method of Payment A Consultant shall charge the follow~ng fees for its profosslonal scrvwcs hereunder, based on the following fees for ~ts professional services hereunder, based on thc following hourly bflhng rates for the attorneys and support staff involved in th~s matter Margaret C Henry /;250 00/hour David L Dubrow $31 $ 00/hour ~'erry E Muntz $250 00/hour R~chard ,l Kralmn $275 00/hour Sheroe D Rembach $150 O0/hour Mlchelle Donnay $185 00/hour D Michael Berkowltz $ 95 00/hour B The foregoing rates are lB force and effect as of the date of execution of th~s Agreement Should th~s contractual relatwnstup be ongoing tn December 1999, City and Consultant agree to renegotlate these rates to take IntO account increases m bflhng rates by the Consultant for similar services C Consultant wsll try to reduc~ costs whenever feasible by utilizing qualified partners, associates, paralegals, and support staff Thc Consultant shall bill the C~ty through the Contract For Professional Le/~al Services - Page 2 submission of itemized invoices, statements, and other documemailon, together w~th support,zig data indicating the pro~ress of the work and the services perforr~ed on the basis of monthly s~atem~ts showing hourly r~tes indicating who p¢ffonued the work, what type of work was done, and descriptions and/or details of all seduces rendered along with specific description and supporting documentation, if available, respecting any reasonable and necessary out-of-pocket expenses recurred D Consultant and the City agree that all charges for the legal services for this engagement, Including reasonable out-of-pocket expenses, will not exceed Seventy Two Thousand Dollars ($ 72,000) No retainer shall be required for this engagement E City shall either pay directly or reimburse the Consultant, as thc case may be, for rea.~onable a~tual out-o-i-pocket expenses, including but not limited to, long-distance telephone, telacopier, reproduction, overnlsht courier, and travel expenses prudently mcun'ed by Consultant All copies will bc charged at thc rate of twenty cents ($ 20) per copy for copies made within Consultant's offices, wxth as much photocopying as possible being done by outside vendors at bulk rates, if bulk copyxng ~s necessary The parties agree that the charges for facsimile transmission are at the rate of $! 50 per page Database searches, secretarial overUme when reqtured by the urgency of a client's matter, long d~stance telephone calls, special dehvenes, and other similar items shall be billed at or belo~v Consultant's estimated costs F The pan,es anticipate Invoices or statements for services will be g~nerated on a monthly bas~s and that said invoices or statements will be sent on or about the 1~ day' of each month The City shall make payment to the Consultant w~thm thirty (30) days of the satisfactory completion of services and receipt of an itemized invoice or statement All reimbursable expenses, including, but not necessarily hmitcd to travel, lodging, and m~als shall bc pa~d at the actual cost, pursuant to thc terms, conditions, and hm~tatlons heremabove set forth All mvoxces and bills shall be approved for payment by the C,ty Attorney and the Director of Electric Utdlries G It Is understood that the Consultant shall work under the direction of the Director for Electric Uuhtles or her designee, and the C~ty Attorney H All notices, billing statements and Invoices shall be made in writing and may be given by personal dehvery or by ma,l Not~ces and ,nvolces sent by mall to the C~ty shall be addressed to Herbert L Prouty, City Attorney, 215 E McKmney, Denton, Texas 7620! Notices and payments sent by mail to the Consultant shall be addressed to Margaret C, Henry, Panner, Haythe & Curley, 237 Park Avenue, New York, New York 10017 When so addressed, thc notice, mvo~ee, and/or payment shall be deemed given upon deposit m the Prated States Mail, postage prepaid In all other instances, notices, ~nvoices, and/or payments shall be deemed given at the time of actual del,very Changes may be made in the names and addresses of the responsible person et office to whom notices, invoices, and/or payments are to be sent, provaded reasonable written notice is given Contract For Profmssional Legal Services - Page 3 ]~rofess~onal Competency A The Consullant agrees that in the performance o£ these professional services Consultant shall be responsible for ~he level of competency and shall use the same degree of skill and care presently maintained by oiher pracUcmg professionals perfonmng the same or slinllar types of work For the purpose oF this Al~reement, the key person who will be coordinating and pelformm$ most of the work hereunder shall be Marearet C Henry, Partner However, nothing herein shall limit Consultant from using offset quahfied and competent members of its fi~m to perform the scrvwes rcclulred harem B All legal documents as well aa any legal optmons prepared or obtained under the terms of this Al/recreant are instruments of service and the City shall retain ownership and a property interest therein If this Agreement *s tcrmmated at any time for any reason prior to payment to the Consultant for work under this Agreement, all such documents prepared or obtained under the terms of the Agreement shall upon termination be delivered to and become the property of the City upon request and w~thout restriction on their use or fu.nher compensatwn ~o the Consultant V ~r~hb~hmentandMalntenanc¢ofReeords Full and accurate records shall be mmntauled by the Consultant at ~ts place of business with respect to all matters covered by this Agreement Such records ~hall be maintained for a per~od of at least three (3) years after receipt of final payment under this Agreement VI ~lj./ll/i~lJl/~,~ At any time dunng normal business hours and upon reasonable no/ace to the Consultant, there shall be made available to the City all of the Consultant's records with respect to all mattcrs covered by th~s Agreement The Consultant shall perrmt the City to au&t, examine, and make excerpts or transcripts from such record$~ and to make audits of contracts, ~nvolces, matenals, and other data relating to all matters covered by this Agreem6~'tt VII AeeomphshmentofPro~ect The Consultant shall commence, carry on, and complete any and all projects with all practicable dispatch, tn a sound, cconomwal and efficient manner, and, in accordance with the prov~slor~s hereof and all applicable law~ In accomplishing the projects, the Consultant shall take such steps as are appropriate to ensure that the work involved is properly coordinated with related work being earned on by the City VIII (~gnfllcts of Interesl/Confidentlahtv The City and Consultant agree that for purposes of thts engagement, the prowswna of Haythe & Curley Standard Terms of Repr=$antatwn [May 1997] "Confidentiality and Client Confhcts" at page 1~, and 15 ~herem, shall gov~-cn IX Indemmtv and Independent Contractor Relatwnshtp A The Consultant shall p~rform all services as an independent contractor not under the direct supervision and control of the City Nothing her=in shall be construed as creating a relatwnship of employer and employee bet~veen the par~les Con~ract For Professional Leial Services - Pate 4 B Consultant agrees to mdemm~ the C~t'~ agmnst all losses arising out of the ncsh~¢nce o~ Consultant, pro¥~ded, howc~cr, ~at m ~e ~ven~ ~hat th~s ~nd~ty ~5 called ~nto play, the ~ount of Consultant's ~ndenm~ficat~on obhgat~on to the C~ty shall be me~ur~ by ~s comp~atlve fault relative to all individuals or ~ll~ (including the City) whos~ acts or omissions conmbuted to the C~ty's losses, and prodded, fu~er, that Consul~t's mdzn~fica~on obhgation to the CxW shall not exceed the amount of Co~ul~t's apphcable professional habflxty msur~ce coverage C Consult~ shall mamt~ ~d shall bc caused to be m force at all ~mes dunng ~e te~ offs A~emcm, a legally binding pohcy of professional hablhW ms~cc, hstcd by A M Best ~t~ C~rs, wxth a ra~ng of "A-" or above, lssu~ by ~ ~nsur~ce c~er approv~ to do business In Texas by the Texas Depa~ent of Instance Such Oov~age shall cover any claim hereunder occas~ed by ~e Consuk~t's neghgent professional act, ~r or omni,on, m m amount not less than Two Mflhon Dollars ($2,000,0~ 00) combined single hmlt coverage per occu~cc ~ ~ ev~t of ch~ge or cancella~on of the pohcy by the insurer, the Consultant h~eby coven~ts to l~edlately ~vlse the City th~rcol, and m s~ch event, ~le Consulter shall, prior to the effective date of ch~ge or caneellal~on, deliver a copy of a substitute policy fu~shlng the same coverage The Consultant shall provide a copy of such pohcy or the d~l~alOnS page of the policy, whichever ~s re~onably sat~sf~to~, to the C~ty through its D~rector of Elccmc Utilities, simult~eously with the execution of th~s Ageement X ~tna~lon of A~eem~t A In co~ect~on with ~ work outhned In this Agreement, ~t ~s a~ccd ~d fully understood by the Consull~t that ~e C~W may cancel or mdefimtely suspend ~her work h~e~d~ or t~ma~e th~s A~e~ent a ~y t~me upon ~Ren notice to Consultanh Consulter shall ceme all work ~d labor being peffo~ed under this A~c~t Consultant may t~lnate this A~c~t by giving thc C~Iy fi~een (15) days ~ffen notice tha~ Consulter is no longer m a position to coBtlnue represen~ng the C~W Consulter shall invoice the City for fll work satisfactonly compl~ed ~d shall be compensated m aceord~ce w~th the t2~s of th~ Awe~t Ali r~ons ~d other docments, or data, or work relaed to the project shall become the pmpeffy of the CIty upon te~ma~on of th~s A~ement B T~s A~ent may be te~matcd ~n whole or m p~, ~n ~tmg, by either p~y m th~ ~v~t of ~bst~tml fallur~ by th~ other p~y to ~lfill its obhgat~ons ~d~r th~s A~e~ment ~ough no fault of the re.mating p~y Provided, however, that no such t~ma~on may be affected, unless ~he other pa~ ~s g~ven [1] wn~n notice (d~hvered by ce~lfied mml, ret~ receipt r~qu~st~d) of intel ~o t~mate, ~d not less ~ th~y (30) calendar days to cure ~e fafl~e, ~d [2] ~ oppo~umty for consultation w~th the t~natmg p~y prior lo Con~xact For Professional I~gal Services - Page C Noflung contained hereto or elsewhere m this Agreement shall reqmre the C~ty to pay for any work which IS ~n~atisfactory or which is not submitted in compliance vath the terms of tlus Agreement XI Alternate Dispute Resolution The Consultant and the C~ty agree that, If necessary, they will use their best efforts to resolve any (hsputes regarding the Agreement throuih the use of m¢chat~on or other forms of alternate dispute resolution set forth m Chapter 154 of the Texas Civil Practice and Rcmeches Code (V A T C S ) XII £nt~reAm-eemant This Agreement represents thc cnUre agreement and understanding between the part,es, and any neEotiauons, proposals, or oral agreements are intended to be mtel/xated hereto and to be superseded by this written Agreement. Any supplement or amendmem to thts Agreement to be effective shall be m writing and signed by the City and the Consultant XHI C va The Consultant shall comply wtth all federal, state, and local laws, rules, regulations, and ordinances applicable W thc work covered hereunder as they may now read or hereafter be amended, including, but not lmuted to the State of New York D~sclphnary Rules of Professional Conduct XIV ove.~Lp..y~.~illg.~ For The purpose of determining place of agreement and law govermng same, flus Agreement ~s entered into m the City and County of Denton, S~ate of Texas, and shall be governed by the laws of the State of Texas Venue and junschctton of any suit or cause of action arising under or m connection with this Agreement shall be exclusively m a court of competent junSdlCnOn s~ttmg m Denton County, Texas XV Dlscnmmauon Protubited In perform,,~g the services reqmred hereunder, the Consultant shall not chscrunmate agmnst any person on the bas~s of race, color, rehg:on~ sex, nauonal ongm or anceslry, age, or physical handicap XVI Personnel A The Consultant represents that it has or will secure at ~ts own expense all personnel reqmred to perform all the services requtred under tius Agreement Such personnel shall not be employees or have any contractual relations uath the City Consultant shall reform the City of any conflict of interest or potent]al conflict of mterest that may arise during the term of th~s Agreement, m accordance vath Consultant's responslblhties under the State of New York Disciplinary Rules of Professional Conduct, and sub.]ect to the provxslons of paragraph VIII heremabove B All services reqtured hereunder will be performed by the Consultant or under its chrect supervrswn All personnel engaged m work shall be qualified and shall be authorized or permitted under state and local laws to perform such services Contract For Pro~'esslonai Lc§a! Services - Page 6 XVII ~ The Consultani shall not ~sslg~ ~u¥ interest m this A~mcnt ~d shM1 not ~sfer ~ interest m ~ts A~eement (wh~er by ~s~ent, nova~ton, or othc~se) ~thout the prior wut~n consent of thc C~t~ ~cto XVIII S~rabtl~tv All ~s~ents and covenants contained hs~m ~ severable, ~nd m ~he ewm ~y of ~em, wtth the exertion of those con.mod m secuons h~ded "Scop~ of Sc~ces" ~d "Comp~sat~on ~d M~od of Pa~ent" hereof, shall be held to be mv~hd by ~ co~ of competent ju~sd~ction, ~h~s A~eem~nt shall be mte~ret~ as ~ough such mwhd agreements or coven~ts were not cont~ed herein ~X Re~nn~h~ht~esforClaxmsand L~abfl~W Appwval by the C~ shall not constRute nor be deemed a release of the responsibfltty ~d habdlty of the Consultant for the accuracy ~d competency or,ts work, nor shall such approval be deemed W be ~ ~s~ptwn of such r~ons~blllty of the C~W for ~y defea m ~y repo~ or o~er documents pr~ed by ~e Consulter, ~ts attorneys ~d employ~s ~ Modification of A~reement No w~ver or mod~fca~on of tMs Agreement or of aay cov~a~t, condtt~on, or hmttatton h~retn contained shall be vahd ~l~s m ~tmg ~d duly executed by ~e p~y to be charged therewith, ~d no e~d~ce of any waiver or modification shall be offered or ~celved In cvld~lcc ~ ~y pwceedmg arising be~e~ ~e p~les hereto out of or affecting t~s A~eement, or ~o n~ts or obhgatwns of ~e p~es he~der, ~less such wa~v~ or mod~ficatwn ~s m writing, duly execut~ as afor=said, ~d, the p~es ~ a~c that the provxs~ons oft~s ~cle will not be waived ~ h~em set fo~h XXi Ca~t~ons The captions of th~s Agreement are for mfo~atwnal pu~oses only and shall not m any way affect the substantive te~s or conditions of th~s Agreement ~ BroWne Effect a~d Effective Dat~ Th~s A~m~t shall b~ binding upon and ~nure io the benefit of the pa~es hereto ~d their respective legal repres~tat~v~, successors, ~d assigns where pe~lR~ by th~s A~ment Th~s A~eem~nt ~s hereby rahfied ~d rstroact~wly approved by ~he City ~d Consultant ~d shall b~ effecuve as of Novemb~ 9, 1998 ~ ~T~SS ~REOF, the C~ty of Denton, Texas, h~ executed th~s A~eemenl m four (~) on~nal counte~a~s by and t~ough ~ts duly-authonzcd C~ty Manager, ~d Consultant h~ execu~Id ~ls A~eem~t by ~d ~ugh its duly-authored ~d~sl~cd Pmn~, dated ~s the "CITY" CITY OF DENTON, TEXAS A Tex~ Mumc~pal Co~orat~on Con~act For ~ofess~onal Legal Se~ces - Page 7 ATTEST JE~ER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, C~TY ATTORNEY "CONSULTANT" HAYTHE &CUR. LEY A General Parme~h~p · Partner At 1EST S/Our Do~um~Conuscrs~99~Hay~e & Cufley PSA DME Dtv~.doo Contract For Professtonal Legal Services