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