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HomeMy WebLinkAboutPFM Assett Managment 2008-07-17 Cross RefAGREEMENT FOR PROFESSIONAL CONSULTING SERVICES FOR FINANCIAL ADVISORY SERVICES This Agreement is entered in Ukiah, California, on July TJ, 2008, among the CITY OF UKIAH, CALIFORNIA, hereinafter referred to as "City," the Ukiah Redevelopment Agency, hereinafter referred to as "Agency" and PUBLIC FINANCIAL MANAGEMENT, INC. hereinafter referred to as "Consultant," a corporation organized and in good standing under the laws of the State of California. RECITALS This Agreement is predicated on the following facts: a. City/Agency requires consulting services related to Financial Advisory Services. b. Consultant represents that it has the qualifications, skills, experience, and expertise, and possesses the proper and licenses to provide these services, and is willing to provide them according to the terms of this Agreement. C. City/Agency and Consultant agree upon the Scope -of -Work and Work Schedule attached hereto as Attachment "A" describing contract provisions for the project and setting forth the completion dates for the various services to be provided pursuant to this Agreement. AGREEMENT 1.0 DESCRIPTION OF PROJECT 1.1 The Project is described in detail in the attached Scope -of -Work (Attachment "A" from PFM's Proposal for Financial Advisory Services, pages 36 - 40). 2.0 SCOPE OF SERVICES 2.1 As set forth in Attachment "A". 2.2. Additional Services. Additional services, if any, shall only proceed upon written agreement between City, Agency and Consultant. The written Agreement shall be in the form of an Amendment to this Agreement. 3.0 CONDUCT OF WORK 3.1 Term. The term of this agreement begins on the Effective Date and shall continue for an indefinite term and until terminated in accordance with paragraph 7.8. 3.2 Time of Completion. Consultant shall commence performance of services as required by the Scope -of -Work upon receipt of a Notice to Proceed from the City and/or the Agency. Consultant shall complete each task to the City's or the Agency's reasonable satisfaction, even if contract disputes arise or Consultant contends it is entitled to further compensation. 4.0 COMPENSATION FOR SERVICES 4.1 Basis for Compensation. For the performance of the professional services of this Agreement, Consultant shall be compensated on a time and expense basis as per the Schedule of Fees in attachment "B". The specifics of the requested services, time frame and costs will be established with each service requested by the City or the Agency under the Scope of Work identified in Attachment °A". Labor charges shall be based upon hourly billing rates for the various classifications of personnel employed by the Consultant to perform the Scope of Work as set forth in Attachment "B". When applicable and authorized by the City or the Agency, the Consultant may also charge for reimbursable expenses related to services performed for the City or the Agency including printing/reproduction, postage, travel, and long distance phone charges. Documentation of such expenses must be submitted with an invoice. 4.2 Changes. Should changes in compensation be required because of changes to the Scope -of -Work of this Agreement, the parties shall agree in writing to any changes in compensation. "Changes to the Scope -of -Work" means different activities than those described in Attachment "A" and not additional time to complete those activities than the parties anticipate on the date they entered this Agreement. 4.3 Sub -contractor Payment. The use of sub -consultants or other services to perform a portion of the work of this Agreement shall be approved by City or Agency prior to commencement of work. 4.4 Terms of Payment. Payment to Consultant for services rendered in accordance with this contract shall be based upon submission of monthly invoices for the work satisfactorily performed prior to the date of the invoice less any amount already paid to consultant, which amounts shall be due and payable thirty (30) days after receipt by City/Agency. The invoices shall provide a description of each item of work performed, the time expended to perform each task, the fees charged for that task, and the direct expenses incurred and billed for. Invoices shall be accompanied by documentation sufficient to enable City/Agency to determine progress made and to support the expenses claimed. Amounts unpaid thirty (30) days after the invoice date shall bear interest at the legal rate prevailing at the principal place of business of the Consultant. Consultant retains the right to stop work if payments are not made in a timely manner. 5.0 ASSURANCES OF CONSULTANT 5.1 Independent Contractor. Consultant is an independent contractor and is solely responsible for its acts or omissions. Consultant (including its agents, servants, and employees) is not the City's or the Agency's agent, employee, or representative for any purpose. It is the express intention of the parties hereto that Consultant is an independent contractor and not an employee, joint venturer, or partner of Ukiah for any purpose whatsoever. Ukiah shall have no right to, and shall not control the manner or prescribe the method of accomplishing those services contracted to and performed by Consultant under this Agreement, and the general public and all governmental agencies regulating such activity shall be so informed. Those provisions of this Agreement that reserve ultimate authority in Ukiah have been inserted solely to achieve compliance with federal and state laws, rules, regulations, and interpretations thereof. No such provisions and no other provisions of this Agreement shall be interpreted or construed as creating or establishing the relationship of employer and employee between Consultant and Ukiah. Consultant shall pay all estimated and actual federal and state income and self- employment taxes that are due the state and federal government and shall furnish and pay worker's compensation insurance, unemployment insurance and any other benefits required by law for himself and his employees, if any. Consultant agrees to indemnify and hold City and its officers, agents and employees harmless from and against any claims or demands by federal, state or local government agencies for any such taxes or benefits due but not paid by Consultant, including the legal costs associated with defending against any audit, claim, demand or law suit. Consultant warrants and represents that it is a properly licensed professional or professional organization with a substantial investment in its business and that it maintains its own offices and staff which it will use in performing under this Agreement. 5.2 Conflict of Interest. Consultant understands that its professional responsibility is solely to City and Agency. Consultant has no interest and will not acquire any direct or indirect interest that would conflict with its performance of the Agreement_ Consultant shall not in the performance of this Agreement employ a person having such an interest. If the City Manager/Agency Executive Director determines that the Consultant has a disclosure obligation under the City's/Agency's local conflict of interest code, the Consultant shall file the required disclosure form with the City Clerk within 10 days of being notified of the City Manager's/Agency's Executive Director's determination. 6.0 INDEMNIFICATION 6.1 Insurance Liability. Without limiting Consultant's obligations arising under Paragraph 6.2 Consultant shall not begin work under this Agreement until it procures and maintains for the duration of this Agreement insurance against claims for injuries to persons or damages to property, which may arise from or in connection with its performance under this Agreement. A. Minimum Scope of Insurance Coverage shall be at least as broad as: Insurance Services Office ("ISO) Commercial General Liability Coverage Form No. CG 00 01 11 85. 2. ISO Form No. CA 0001 (Ed. 1/87) covering Automobile Liability, Code 1 "any auto" or Code 8, 9 if no owned autos and endorsement CA 0025, 3. Worker's Compensation Insurance as required by the Labor Code of the State of California and Employers Liability Insurance. 4. Errors and Omissions liability insurance appropriate to the consultant's profession. Architects' and engineers' coverage is to be endorsed to include contractual liability. B. Minimum Limits of Insurance Consultant shall maintain limits no less than: 1, General Liability: $1,000,000 combined single limit per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, the general aggregate limit shall apply separately to the work performed under this Agreement, or the aggregate limit shall be twice the prescribed per occurrence limit. 2. Automobile Liability: $1,000,000 combined single limit per accident for bodily injury and property damage. 3. Worker's Compensation and Employers Liability: Worker's compensation limits as required by the Labor Code of the State of California and Employers Liability limits of $1,000,000 per accident. 4. Errors and Omissions liability: $1,000,000 per occurrence. C. Deductibles and Self -Insured Retentions Any deductibles or self-insured retentions must be declared to and approved by the City/Agency. At the option of the City/Agency, either the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects to the City/Agency, its officers, officials, employees and volunteers; or the Consultant shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. D. Other Insurance Provisions The policies are to contain, or be endorsed to contain, the following provisions: 1. General Liability and Automobile Liability Coverages The City/Agency, it officers, officials, employees and volunteers are to be covered as additional insureds as respects; liability arising out of activities performed by or on behalf of the Consultant, products and completed operations of the Consultant, premises owned, occupied or used by the Consultant, or automobiles owned, hired or borrowed by the Consultant. The coverage shall contain no special limitations on the scope -of - protection afforded to the City/Agency, its officers, officials, employees or volunteers. The Consultant's insurance coverage shall be primary insurance as respects to the City/Agency, its officers, officials, employees and volunteers. Any insurance or self-insurance maintained by the City/Agency, its officers, officials, employees or volunteers shall be excess of the Consultant's insurance and shall not contribute with it. 4 C. Any failure to comply with reporting provisions of the policies shall not affect overage provided to the City/Agency, its officers, officials, employees or volunteers. d. The Consultant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 2. Worker's Compensation and Employers Liabilitv Coverage The insurer shall agree to waive all rights of subrogation against the City/Agency, its officers, officials, employees and volunteers for losses arising from Consultant's performance of the work, pursuant to this Agreement. Professional Liability Coverage If written on a claims -made basis, the retroactivity date shall be the effective date of this Agreement. The policy period shall extend from July 18, 2008 to December 31, 2011. 4. All Coverages Each Insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the City/Agency. E. Acceptability of Insurers Insurance is to be placed with admitted California insurers with an A.M. Best's rating of no less than A- for financial strength, AA for long-term credit rating and AMB -1 for short- term credit rating. F. Verification of Coverage Consultant shall furnish the City/Agency with certificates of Insurance and with original Endorsements effecting coverage required by this Agreement. The Certificates and Endorsements for each insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. The Certificates and Endorsements are to be on forms provided or approved by the City/Agency. Where by statute, the City/Agency's Workers' Compensation - related forms cannot be used, equivalent forms approved by the Insurance Commissioner are to be substituted. All Certificates and Endorsements are to be received and approved by the City/Agency before Consultant begins the work of this Agreement. The City/Agency reserves the right to require complete, certified copies of all required insurance policies, at any time. If Consultant fails to provide the coverages required herein, the City/Agency shall have the right, but not the obligation, to purchase any or all of them. In that event, the cost of insurance becomes part of the compensation due the contractor after notice to Consultant that City/Agency has paid the premium. G. Subcontractors If Consultant uses subcontractors or sub -consultants, it shall cover them under its policies or require them to separately comply with the insurance requirements set forth in this Paragraph 6.1. 6.2 Indemnification. Notwithstanding the foregoing insurance requirements, and in addition thereto, Consultant agrees to indemnify the City/Agency for any claim, cost or liability that arises out of, or pertains to, or relates to the performance of services under this contract by Consultant, but this indemnity does not apply to liability for damages for death or bodily injury to persons, injury to property, or other loss, arising from the sole and active negligence or willful misconduct of the City/Agency. "Indemnify," as used herein includes the expenses of defending against a claim and the payment of any settlement or judgment arising out of the claim. Defense costs include all costs associated with defending the claim, including, but not limited to, the fees of attorneys, investigators, consultants, experts and expert witnesses, and litigation expenses. References in this paragraph to City/Agency or Consultant, include their officers, employees, agents, and subcontractors. 7.0 CONTRACT PROVISIONS 7.1 Ownership of Work. All documents furnished to Consultant by City/Agency and all documents or reports and supportive data prepared by Consultant under this Agreement are owned and become the property of the City/Agency upon their creation and shall be given to City/Agency immediately upon demand and at the completion of Consultant's services at no additional cost to City/Agency. Deliverables are identified in the Scope -of -Work, Attachment "A". All documents produced by Consultant shall be furnished to City/Agency in digital format and hardcopy. Consultant shall produce the digital format, using software and media approved by City/Agency. 7.2 Governing Law. Consultant shall comply with the laws and regulations of the United States, the State of California, and all local governments having jurisdiction over this Agreement. The interpretation and enforcement of this Agreement shall be governed by California law and any action arising under or in connection with this Agreement must be filed in a Court of competent jurisdiction in Mendocino County. 7.3 Entire Agreement. This Agreement plus its Attachment(s) and executed Amendments set forth the entire understanding between the parties. 7.4 Severability. If any term of this Agreement is held invalid by a court of competent jurisdiction, the remainder of this Agreement shall remain in effect. 7.5 Modification. No modification of this Agreement is valid unless made with the agreement of both parties in writing. 7.6 Assignment. Consultant's services are considered unique and personal. Consultant shall not assign, transfer, or sub -contract its interest or obligation under all or any portion of this Agreement without City's or Agency's prior written consent. C� 7.7 Waiver. No waiver of a breach of any covenant, term, or condition of this Agreement shall be a waiver of any other or subsequent breach of the same or any other covenant, term or condition or a waiver of the covenant, term or condition itself. 7.8 Termination. This Agreement may only be terminated by either party: 1) for breach of the Agreement; 2) because funds are no longer available to pay Consultant for services provided under this Agreement; 3) City/Agency has abandoned and does not wish to complete the project for which Consultant was retained; or 4) upon 30 days prior written notice to the other party by the party terminating the Agreement. A party shall notify the other party of any alleged breach of the Agreement and of the action required to cure the breach. If the non -breaching fails to cure the breach within the time specified in the notice, the contract shall be terminated as of that time. If terminated for lack of funds or abandonment of the project, the contract shall terminate on the date notice of termination is given to Consultant. City/Agency shall pay the Consultant only for services performed and expenses incurred as of the effective termination date. In such event, as a condition to payment, Consultant shall provide to City/Agency all finished or unfinished documents, data, studies, surveys, drawings, maps, models, photographs and reports prepared by the Consultant under this Agreement. Consultant shall be entitled to receive just and equitable compensation for any work satisfactorily completed hereunder, subject to off- set for any direct or consequential damages City/Agency may incur as a result of Consultant's breach of contract. 7.9 Confidentiality. Consultant hereby agrees that, except as necessary to provide the services required by this Agreement, it will not, without the prior consent of the City Manager, disclose or make any other use of information it receives from the City or in the course of performing its services for the City pertaining to the City's finances, financial condition, investments, investment decisions or similar information, or information which the City has identified as confidential. 7.10 Duplicate Originals. This Agreement may be executed in duplicate originals, each bearing the original signature of the parties. When so signed, each such document shall be admissible in administrative or judicial proceedings as proof of the terms of the Agreement between the parties. 8.0 NOTICES Whenever notice is permitted or required under the terms of this Agreement, it shall be deemed given when delivered by overnight courier, personal delivery, certified mail or fax or 48 hours after deposit in the United States Mail with proper first class postage affixed thereto. Notice may given to the address or fax number of each party as stated below: CITY OF UKIAH/UKIAH REDEVELOPMENT AGENCY Economic Development Manager 300 SEMINARY AVENUE UKIAH, CALIFORNIA 95482-5400 FAX: 707-463-6201 Public Financial Management, Inc. 50 California Street, Suite 2300 San Francisco, CA 94111 FAX: 415 982-4513 Either party may require notices to be sent or delivered to different addresses or fax numbers by giving written notice of the change as provided herein. 7 9.0 SIGNATURES IN WITNESS WHEREOF, the parties have executed this Agreement the Effective Date: CONSULTANT BY: 1W4 —19olS Gamble Date Senior Managing Consultant IRS IDN Number: 231992164 CITY OF UKIAH/UKIAH REDEVELOPMENT AGENCY BYE. hambers, Date City anager/Agency Executive Director ATT wn e- - City Clerk APPROVED AS TO FOR bAVQ J. PP City Attorney, City of Ukiah 8 PFM SCOPE OF WORK Attachment A Introduction and Background - - - --- - --- - - - Our approach for this work should be viewed as the second and third phases of the work undertaken in the fall of 2007. At that time, PFM and Seifel were engaged by the City to provide a framework and set of criteria for evaluating alternative approaches to providing the most programmatically effective and efficient utilization of the City's redevelopment capacity. Following the successful refunding of the City's existing tax increment bonds in the spring of 2007, it became clear that the City was in the position of having substantial tax increment bond capacity that could be invested to achieve the City's economic development and housing objectives. However, City staff wanted to ensure the most successful investment of those resources by providing a set of criteria and an analytical framework by which alternative uses of redevelopment funds could be considered. Drawing upon our considerable experience in other jurisdictions, PFM and Seifel made a presentation to the Ukiah City Council in September of 2007. At that meeting, we provided the Council perspectives on and examples of a number of ways in which the City could most effectively re -invest its tax increment capacity. We particularly focused on how the City could most effectively leverage its own dollars through the use of public-private partnerships. We provided examples of how the City might further grow its economic base and tag increment capacity through these investments. We provided an overview of public financing tools the City could use to maximize its impact and future flexibility. Without attempting to recap this entire discussion, we felt that the Council did take away a better understanding of their choices and how the process could move forward. Given this history, we appreciate having the opportunity to work with the Council and staff on the next phases of the work. The next (second) phase will be application of the criteria and framework previously presented to the range of actual redevelopment opportunities before the City. The third phase will be the implementation of the public financing mechanisms needed to implement the objectives agreed upon in phase 2. _Phase 2. Choosing a Successful Redevelopment Investment Strate2v _ In working with the City last year, a number of potential projects were identified as hla- ving the potential for further investment. Along with the projects that the City was already aware of, PFM/Seifel identified some other potential projects. During the initial part of this work, we would re -visit these alternatives with City staff to ensure that we have a complete list of possibilities. We would then apply the criteria we have identified to these projects, actually scoring them according to their relative impacts on revitalization goals, tag increment generation, return on investment, private partner capacity, use Agency/City capacity, timeliness, and other considerations. We have attached several pages from our presentation to the Council from last year to illustrate our approach to this process (attach pages 26-32). Given the inherently intuitive nature of the possible weighting of criteria, it will be important to allocate sufficient time to this process to allow the Council and the public to consider the rankings of the alternatives. We would expect a highly interactive process with the staff, the Council and the public, including at least two public meetings, would be necessary in order to arrive at an initial selection of alternatives. PFM/Seifel understand that this decision process is far from mechanistic, and we view our role as attempting to facilitate a decision that is based on the analysis and information available, and fully reflective of the community's values. There is City and Redevelopment Agency of Ukiah — Request for Financial Advisory Services 136 e not a single "right" strategy, but there should be a strategy that is will achieve the community's objectives efficiently and effectively. It is possible that the set of choices decided upon will require that other conditions be put in place prior to implementation. For example, changes in the redevelopment plan may be needed. Also, establishment of appropriate partnerships with private or other partners may be necessary. PFM/Seifel will work closely with the City to develop and implement all of the steps needed to realize the objectives, once the alternatives have been decided upon. Integration of Housing and Redevelopment Strategies Simultaneously with the consideration of redevelopment strategies, PFM and Seifel will work with the City to determine potential locations for affordable housing development, as well as alternatives for partnering with affordable housing developers. With respect to location, it will be important to consider sites that complement the City's overall development objectives. By partnering with a capable non-profit or for-profit affordable housing developer, the City will be acquiring needed technical skills and experience to move projects forward expeditiously, and competing effectively for the extemal funding sources necessary to accomplish these projects. PFM/Seifel are very experienced in structuring processes that enable public entities to locate and partner with experienced affordable housing developers. It is likely that this process will extend beyond the time frame needed to begin to implement the other strategies that emerge from the Phase 2 work. Nevertheless, it is important to start this in order to ensure overall integration of the affordable housing and downtown redevelopment work. Coordination with Other Public Entities, including the School District, County and others. Ukiah enjoys the advantage and sometimes challenge of being the center of government activities for a broader geographic area. This creates opportunities for partnerships with the County and the school district that can be mutually advantageous. Public employment is a significant part of the economic base of Ukiah, and the relationships with the other public entities should be viewed as important pieces of the local economy. Therefore, it is important to dovetail to the extent possible the development objectives of the other entities with Ukiah's objectives. PFM and Seifel are experienced in the development of effective partnerships involving multiple government entities. These partnerships can be built around economic, operational and development objectives. The combination of revenue streams from different government entities can substantially strengthen public financing strategies by creating greater diversity of revenues. The provision of public amenities can be an important component of an overall economic development strategy, and the delivery of these amenities may well require close coordination with other public partners. In this context, it should also be noted that non- profit partners may also be helpful in achieving economic development objectives. Therefore, opportunities for working with non -profits should be considered if available. I Time Required for Phase 2: Four months While we understand the uncertainties of this process, it would be our objective to reach closure on selection of alternatives four months from the time we are engaged. Criteria for Success PFM has identified several criteria which can be used to select a financing strategy. The first of these is that the strategy achieves the City and Agency's revitalization goals, which have been identified as: City and Redevelopment Agency of Ukiah — Request for Financial Advisory Services 137 • revitalizing downtown • retaining and enhancing businesses • improving infrastructure and buildings • enhancing housing opportunities • promoting private investment and Tax Increment (Tl) growth The second basis for selecting a financing strategy is its effectiveness in generating a "return on investment" for the City and Agency in the form of increased taxes. Some key issues in determining this return are; • How much tax growth will result from the project? • How quickly will this growth occur? • How certain is the projected level of growth? • Are there intangible or symbolic benefits? • Are there long-term cost impacts resulting from the project? Another factor in the financing strategy is the private partner and its financing capacity. For any private partner, the City and Agency must consider whether they have a successful track record with projects of this kind, what is their financial capacity in general and specifically for this project, and finally what rate of return will they receive on the project. For a very strong project, the City and Agency could expect a ratio of 5 to 1 of private and public investment. The City and Agency must also consider their own position, asking many of the same questions of themselves as of the developer. For example, has the Agency (or City) done a similar project before? What is the Agency's financial capacity in general, and for this project? How should they be involved in the project? What resources does the Agency need? The final consideration is one of timing. Namely the City and Agency must consider • How Iong it will take to launch the project • Any political challenges that may arise • What market there is for the project • The impact of financial markets on the availability of private and public capital Using these and other criteria, the City and Agency can consider the utility of the strategies before them. PFM and Seifel can assist the City and Agency in this effort by bringing to bear their prior experience, facilitating the selection of the most advantageous strategy possible. Phase 3: Selection and Implementation of Public Finance Alternatives _W As the City moves toward the selection of investment alternatives in Phase 2, some of the public finance choices will begin to become clear. There is an expectation that the City will use some of the tax increment bond capacity already identified. However, it will be necessary to specify how much of this capacity will be needed, when it will be needed, and what other public financing tools may be used (such as Mello Roos) to supplement this capacity. It is important that the City make the most efficient use possible of its tax increment capacity. This can be done by maxi*niying the leveraging of private partnerships, and by considering alternative financing strategies. The City's ability to tap its tax increment capacity relatively quickly is a significant City and Redevelopment Agency or Ukiah — Request for financial Advisory Sandces 138 advantage that should be maximized. Therefore, once these strategic choices have been made, PFM will work closely with the City to implement a tax increment bond issuance. Credit Considerations. We have provided below a schematic description of the steps needed to accomplish a tax increment bond issuance for the City. In addition to these steps, special consideration needs to be given to the Agency's approach to the current credit situation, In late 2006, PFM was asked to manage the refunding of the Agency's existing debt We did so, accomplishing a substantial savings that has accrued to the Agency. In the course of managing this transaction, we saw that the insurers were not very interested in backing the credit because of its relatively small size. Although a new money issue for the Agency is potentially large enough to attract stronger interest from insurers, we have witnessed a substantial reduction in the value of insurance due to the lowered perception of their value in the market place. The relationship between the cost and value of insurance has continued to be quite dynamic, and it will be essential to analyze this relationship on an ongoing basis to gauge the potential value of insurance for the transaction. PFM will analyze the value of the insurance options on a maturity -by -maturity basis to determine whether or not they make sense. Negotiated Sale Given the state of the credit markets, and Ukiah's relatively small size and low visibility, it makes sense to conduct a tax increment bond sale on a negotiated basis with an underwriter of the Agency's selection. PFM,,vill of course work closely with the Agency to choose an underwriter with the appropriate skills to ensure a successful sale, and will negotiate appropriate bond pricing and compensation with that underwriter. PFM's very significant presence its the bond market (the largest of any financial advisor by far), and our unparalleled level of technical resources enables us to provide the City with the highest level of assurance that the bonds have been appropriately priced. Implementation of Other Financing Alternatives While it appears fairly certain that the Agencywill utilize a tax increment bond issue, it should be noted that other alternatives may well be appropriate. For instance, depending on the type of development sought, a Mello Roos financing may provide value. Although we are primarily addressing issues relating to a tax increment transaction, some of the same issues will apply to other types of transactions. However, time frames may vary. Timing A tax increment bond sale will require approximately three months. Other financing methods will require additional time, and will be determined as we move forward. Outline of General TasksThe scope of services to be provided by PFM relating to new issues, remarketing, restructurings or refunding of tax-exempt or taxable bond transactions will typically include, but not necessarily be limited to, the following- Advise ollowingAdvise and consult with the City in structuring their taxable or tax-exempt financing transactions and the projects which are funded with proceeds of such transactions; My and Redevelopment Agency of Ukiah — Raquas( for Financial Advisory services 139 I i PFNi� • Assist the City by analyzing the merits of negotiated sales vs. competitive sales vs. private placements of securities, and offer recommendations on same; • Coordinate the issuance of the City bonds and notes; • Advise and assist the City on the preparation of requests for proposal and in the selection of underwriters and/or other service providers (bond counsel, tax counsel, financial printers, etc.) as may be required to structure and execute a securities -related transaction; • Assist in the preparation and review of all instruments and documents required for bond and note financing transactions, including the bond indenture and official statement; • Review the maturities, call features, premiums, interest rates, reserve provision, flow of funds and other features of proposed bond issues and advise the City as to the financial impacts of such issues; • Analyze cash flow assumptions with regard to interest rates, fees, application of bond proceeds, investment of funds and other program requirements to assess the reasonableness of the cash flow projections based on such assumptions; 0 Prepare (for reliance upon by rating agencies, bond trustees, bond counsel, bondholders, bond dealers and analysts or other third parties) detailed cash flow projections and analyses of specified bond issues and related projects or programs, such cash projections and analyses to be accompanied by a listing of all significant underlying assumptions; • Assist the City in preparing for, and participating in, transaction -related presentations to and negotiations with financial institutions, developers, governmental entities and others; • In consultation with the City, provide the rating agencies with information necessary to enable them to analyze the structure and credit quality of proposed transactions; C Assist in preparing for and making presentations to bond rating agencies • Prepare analyses to comply with asset release test and/or cash flow certificate requirements as may be established by the bond trust indentures; • Advise and assist the City in negotiating underwriters' fees and other terms of bond purchase contracts with underwriters, as well as the terms and provision of agreements with bond trustees and other financial institutions; a Consult with other members of the financing team to provide advice regarding the strategy for reinvestment of bond proceeds and program revenues and, upon request, prepare investment agreement bid specifications and solicit bids in compliance with applicable laws and regulations; • Upon request of the City, assist in establishing financial management and operating systems and procedures to comply with applicable state and federal laws or regulations or with the requirements of bond indentures or program agreements and train City staff in the implementation of such systems and procedures; • Upon request of the City, perform arbitrage rebate analyses as may be required by the IRS Code and trust indentures relating to the City's bond transactions; and • Such other reasonably related services as may be requested by the City. City and Redevalopmenl Agency of Ukiah — Request for Financial Advisory Services 140 PPM" Section H: Fee Schedule We propose that the first portion of the work — Phase 2 as described in Section E above, be performed by PFM/Seifel on an hourly basis at the rates shown below. We propose a budget for this work of $45,000 based on the tasks we outlined in Phase 1. This method of compensation is appropriate given the uncertainty regarding the actual length of the City's decision process. We would provide the City with monthly statements to track billings against the budget, and would only bill up to the proposed amount. Out-of-pocket costs such as travel, telephone and the like would also be billed. We propose a flat fee for management of the tax increment bonds of $39,000, assuming that the City uses most of its capacity. We would be willing to consider a different fee if the size and type of bond issue under consideration changes in a significant way. PFM would also bill for out-of- pocket costs for this portion of the work. If additional methods of financing are utilized, appropriate compensation can be set based on the actual work required. Public Financial Management, Inc. For services that are determined to be "non -transactional", PFM proposes that fees be based on the following hourly billing schedule, plus out-of-pocket expenses, subject to prior approval by the City. Professional Hourly Rate Managing Directors $275 Senior Managing Consultant $250 Consultant $225 Expenses In addition to our professional fees, we would request reimbursement for all out-of-pocket expenses on an actual cost basis (PFM does not charge a multiplier on expenses). Expenses include items such as travel, mileage, parking, meals, postage, express mail delivery services, telephone, photocopying, outside graphics fees, etc. We do not charge for normal secretarial support, word processing or computer charges. We expect to be able to cap our expenses at approximately $2,000 per transaction. Travel is usually the largest expense component, given our Northern California presence, expenses should be considerably less than the proposed cap. Appropriate documentation and third party receipts will be provided with each invoice. Seifel Consulting, Inc. Seifel Consulting Inc. bills on a time and materials basis, using the following rates for 2008. Billing rates are subject to annual revision. 2008 Hourly Rates (Time) Professional Hourly Rate President $275 Senior Managing Consultant $200 Managing Consultant $180 Senior Consultant $150 Consultant $125 Analyst $115 Research Analyst $105 Technical Staff $105 Administrative Support $80 City and Redevelopment Agency of Ukiah — Request for Financial Advisory services 148 Section H: Fee Schedule We propose that the first portion of the work — Phase 2 as described in Section E above, be performed by PFM/Seifel on an hourly basis at the rates shown below. We propose a budget for this work of $45,000 based on the tasks we outlined in Phase 1. This method of compensation is appropriate given the uncertainty regarding the actual length of the City's decision process. We would provide the City with monthly statements to track billings against the budget, and would only bill up to the proposed amount. Out-of-pocket costs such as travel, telephone and the like would also be billed. We propose a flat fee for management of the tax increment bonds of $39,000, assuming that the City uses most of its capacity. We would be willing to consider a different fee if the size and type of bond issue under consideration changes in a significant way. PFM would also bill for out-of- pocket costs for this portion of the work. If additional methods of financing are utilized, appropriate compensation can be set based on the actual work required. Public Financial Management, Inc. For services that are determined to be "non -transactional", PFM proposes that fees be based on the following hourly billing schedule, plus out-of-pocket expenses, subject to prior approval by the City. Professional Hourly Rate Managing Directors $275 Senior Managing Consultant $250 Consultant $225 Expenses In addition to our professional fees, we would request reimbursement for all out-of-pocket expenses on an actual cost basis (PFM does not charge a multiplier on expenses). Expenses include items such as travel, mileage, parking, meals, postage, express mail delivery services, telephone, photocopying, outside graphics fees, etc. We do not charge for normal secretarial support, word processing or computer charges. We expect to be able to cap our expenses at approximately $2,000 per transaction. Travel is usually the largest expense component; given our Northern California presence, expenses should be considerably less than the proposed cap. Appropriate documentation and third party receipts will be provided with each invoice. Seifel Consulting, Inc. Seifel Consulting Inc. bills on a time and materials basis, using the following rates for 2008. Billing rates are subject to annual revision. 2008 Hourly Rates (Time) Professional Hourly Rate President $275 Senior Managing Consultant $200 Managing Consultant $180 Senior Consultant $150 Consultant $125 Analyst $115 Research Analyst $105 Technical Staff $105 Administrative Support $80 City and Redevelopment Agency of Ukiah — Request for Financial Advisory services 148 R I PfM 50 California Street Suite 2300 San Francisco, CA 94111 415.982:5544 pfmxom COU No. 1213194 January 30, 2018 Sage Sangiacomo City Manager City of Ukiah 300 Seminary Avenue Ukiah, CA 95482 Re: Notice of Assignment of Contract for Financial Advisory Services Dear Sage This letter is to inform you that we are pleased to offer the same great financial advisory services pursuant to agreement for Financial Advisory Services dated July 17, 2008 between the City of Ukiah and Public Financial Management, Inc. ("PFMI") through our affiliated company PFM Financial Advisors LLC ("PFMFA"), a municipal advisor registered with the SEC and MSRB. Delivery of our services will not be impacted as current financial advisory personnel will continue to provide services to you under PFMFA. Please sign this letter to acknowledge your consent and return it to Cayla Wilbur, Senior Associate, by email wilburc@pfm.com. In all other respects the agreement is ratified, and the terms and conditions remain in full force and effect. We appreciate your assistance and look forward to our continued service to the City of Ukiah. Thank you in advance for your prompt attention to this matter. Acknowledgment: The City of Ukiah Authorized Si nature ��- T4rJ ti ACDtv 0 Name Date Sincerely, Robert Gamble, Managing Director 0;,P,47,4� Title DISCLOSURE OF CONFLICTS OF INTEREST AND OTHER IMPORTANT MUNICIPAL ADVISORY INFORMATION PFM Financial Advisors LLC I. Introduction Public Financial Management, Inc., PFM Financial Advisors LLC, Western Financial Group, LLC (a wholly-owned subsidiary of PFM Financial Advisors LLC), and PFM Swap Advisors LLC (hereinafter, referred to as "We," "Us," or "Our") are registered municipal advisors with the Securities and Exchange Commission (the "SEC") and the Municipal Securities Rulemaking Board (the "MSRB"), pursuant to the Securities Exchange Act of 1934 Rule 1513al -2. In accordance with MSRB rules, this disclosure statement is provided by Us to each client prior to the execution of its advisory agreement with written disclosures of all material conflicts of interests and legal or disciplinary events that are required to be disclosed with respect to providing financial advisory services pursuant to MSRB Rule G -42(b) and (c) (ii). We employ a number of resources to identify and subsequently manage actual or potential conflicts of interest in addition to disclosing actual and potential conflicts of interest provided herein. How We Identify and Manage Conflicts of Interest Code of Ethics. The Code requires that all employees conduct all aspects of Our business with the highest standards of integrity, honesty and fair dealing. All employees are required to avoid even the appearance of misconduct or impropriety and avoid actual or apparent conflicts of interest between personal and professional relationships that would or could interfere with an employee's independent exercise of judgment in performing the obligations and responsibilities owed to a municipal advisor and Our clients. Policies and Procedures. We have adopted policies and procedures that include specific rules and standards for conduct. Some of these policies and procedures provide guidance and reporting requirements about matters that allows Us to monitor behavior that might give rise to a conflict of interest. These include policies concerning the making of gifts and charitable contributions, entertaining clients, and engaging in outside activities, all of which may involve relationships with clients and others that are important to Our analysis of potential conflicts of interest. Supervisory Structure. We have both a compliance and supervisory structure in place that enables Us to identify and monitor employees' activities, both on a transaction and Firm -wide basis, to ensure compliance with appropriate standards. Prior to undertaking any engagement with a new client or an additional engagement with an existing client, appropriate municipal advisory personnel will review the possible intersection of the client's interests, the proposed engagement, Our engagement personnel, experience and existing obligations to other clients and related parties. This review, together with employing the resources described above, allows Us to evaluate any situations that may be an actual or potential conflict of interest. Disclosures. We will disclose to clients those situations that We believe would create a material conflict of interest, such as: l) any advice, service or product that any affiliate may provide to a client that is directly related to the municipal advisory work We perform for such client; 2) any payment made to obtain or retain a municipal advisory engagement with a client; 3) any fee -splitting arrangement with any provider of an investment or services to a client; 4) any conflict that may arise from the type of compensation arrangement We may have with a client; and 5) any other actual or potential situation that We are or become aware of that might constitute a material conflict of interest that could reasonably expect to impair Our ability to provide advice to or on behalf of clients consistent with regulatory requirements. if We identify such situations or circumstances, We will prepare meaningful disclosure that will describe the implications of the situation and how We intend to manage the situation. We will also disclose any legal or disciplinary events that are material to a client's evaluation or the integrity of Our management or advisory personnel. We will provide this disclosure (or a means to access this information) in writing prior to starting Our proposed engagement, and will provide such additional information or clarification as the client may request. We will also advise Our clients in writing of any subsequent material conflict of interest that may arise, as well as the related implications, Our plan to manage that situation, and any additional information such client may require. Revised 10-2017 Page I 1I. General Conflict of Interest Disclosures Disclosure of Conflicts Concerning the Firm's Affiliates Our affiliates offer a wide variety of financial services, and Our clients may be interested in pursuing services separately provided by an affiliate. The affiliate's business with the client could create an incentive for lis to recommend a course of action designed to increase the level of the client's business activities with the affiliate or to recommend against a course of action that would reduce the client's business activities with the affiliate. In either instance, We may be perceived as recommending services for a client that are not in the best interests of Our clients, but rather are in Our interests or the interests of Our affiliates. Accordingly, We mitigate any perceived conflict of interest that may arise in this situation by disclosing it to the client, and by requiring that there be a review of the municipal securities transaction or municipal financial product to ensure that it is suitable for the client in light of various factors, after reasonable inquiry, including the client's needs, objectives and financial circumstances. Further, We receive no compensation from Our affiliates with respect to a client introduction or referral. If a client chooses to work with an affiliate, We require that the client consult and enter into a separate agreement for services, so that the client can make an independent, informed, evaluation of the services offered. Disclosure of Conflicts Related to the Firm's Compensation From time to time, We may be compensated by a municipal advisory fee that is or will be set forth in an agreement with the client to be, or that has been, negotiated and entered into in connection with a municipal advisory service. Payment of such fee may be contingent on the closing of the transaction and the amount of the fee may be based, in whole or in part, on a percentage of the principal or par amount of municipal securities or municipal financial product. While this form of compensation is customary in the municipal securities market, it may be deemed to present a conflict of interest since We may appear to have an incentive to recommend to the client a transaction that is larger in size than is necessary. Further, We may also receive compensation in the form of a fixed fee arrangement. While this form of compensation is customary, it may also present a potential conflict of interest, if the transaction requires more work than contemplated and We are perceived as recommending a less time consuming alternative contrary to the client's best interest so as not to sustain a loss. Finally, We may contract with clients on an hourly fee bases. If We do not agree on a maximum amount of hours at the outset of the engagement, this arrangement may pose a conflict of interest as We would not have a financial incentive to recommend an alternative that would result in fewer hours. We manage and mitigate all of these types of conflicts by disclosing the fee structure to the client, and by requiring that there be a review of the municipal securities transaction or municipal financial product to ensure that it is suitable for the client in light of various factors, after reasonable inquiry, including the client's needs, objectives and financial circumstances. Disclosure Concerning Provision of Services to State and Local Government, and Non -Profit Clients We regularly provide financial advisory services to state and local governments, their agencies, and instrumentalities, and non- profit clients. While Our clients have expressed that this experience in providing services to a wide variety of clients generally provides great benefit for all of Our clients, there may be or may have been clients with interests that are different from (and adverse to) other clients. If for some reason any client sees Our engagement with any other particular client as a conflict, We will mitigate this conflict by engaging in a broad range of conduct, if and as applicable. Such conduct may include one or any combination of the following: i ) disclosing the conflict to the client; 2) requiring that there be a review of the municipal securities transaction or municipal financial product to ensure that it is suitable for the c lient in light of various factors, including the client's needs, objectives and financial circumstances; 3) implementing procedures that establishes an -Informational Bubble" that creates physical, technological and procedural barriers and/or separations to ensure that non-public information is isolated to particular area such that certain governmental transaction team members and supporting functions operate separately during the course of work performed; and 4) in the rare event that a conflict cannot be resolved, We will withdraw from the engagement. Revised 10-2017 Page 2 Disclosure Related to Legal and Disciplinary Events As registered municipal advisors with the Securities and Exchange Commission (the "SEC") and the Municipal Securities Rulemaking Board (the "MSRB"), pursuant to the Securities Exchange Act of 1934 Rule 1513al -2, Our legal, disciplinary and judicial events are required to be disclosed on Our forms MA and MA -I filed with the SEC, in `Item 9 Disclosure Information' of form MA, 'Item 6 Disclosure Information' of form MA -1, and if applicable, the corresponding disclosure reporting page(s) ("DRP"). To review the foregoing disclosure items and material change(s) or amendment(s), if any, clients may electronically access PFM Financial Advisors LLC filed forms MA and MA -I on the SEC's Electronic Data Gathering, Analysis, and Retrieval system, listed by date of filing starting with the most recently filed, at: PFM Financial Advisors LLC — htt12://www.sec.Qov/cai-bin/browse-edaar?company=PFM-Financial&owner—exclude&action=eetcompan% III. Specific Conflicts of Interest Disclosures —City of Ukiah 2018 Notice of Assignment To Our knowledge, following reasonable inquiry, we are not aware of any other actual or potential conflict of interest that could reasonably be anticipated to impair Our ability to provide advice to or on behalf ofthe client in accordance with applicable standards of conduct of MSRB Rule G-42. IV. Municipal Advisory Complaint and Client Education Disclosure The MSRB protects state and local governments and other municipal entities and the public interest by promoting fair and efficient municipal securities markets. To that end, MSRB rules are designed to govern the professional conduct of brokers, dealers, municipal securities dealers and municipal advisors. Accordingly, if you as municipal advisory customer have a complaint about any of these financial professionals, please contact the MSRB's website at www.msrb.ora, and consult the MSRB's Municipal Advisory Client brochure. The MSRB's Municipal Advisory Client brochure describes the protections available to municipal advisory clients under MSRB rules, and describes the process for fling a complaint with the appropriate regulatory authority. PFM's Financial Advisory services are provided by Public Financial Management Inc., Western Financial Group, LLC, and PFM Financial Advisors LLC. PFM's Swap Advisory services are provided by PFM Swap Advisors LLC. All entities are registered municipal advisors with the MSRB and SEC under the Dodd Frank Act of 2010. Revised 10-2017 Page 3