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Ordinance No. 14,323ORDINANCE NO. 14,323 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING AN ADDENDUM TO THE ENGAGEMENT LETTER WITH BRACEWELL LLP, FOR LEGAL SERVICES ASSOCIATED WITH THE CREATION OF ONE OR MORE PUBLIC IMPROVEMENT DISTRICTS AND THE ISSUANCE OF BONDS AND OTHER DEIST OBLIGATIONS RELATED TIIERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. ****************************************************************************** WHEREAS, in connection with the development of public improvement districts ("PIDs"), the City of Baytown, Texas (the "City") may desire to issue bonds and other obligations from time to time for various public purposes authorized by Texas statutes in order to finance or refinance various public projects located within a PID; and WHEREAS, the City desires to engage competent, experienced counsel for services in connection with the creation and development of PIDs and the issuance of PID bonds and other obligations; and WHEREAS, Bracewell LLP ("Bracewell" or the "Firm") is a full service firm that is experienced with the creation and development of PIDs and the provision of bond counsel services in connection with the issuance of PID obligations; and WHEREAS, the City and the Firm desire to enter into an addendum to their existing engagement letter (the "Engagement Letter") that sets forth the agreement between the parties with respect to bond counsel services; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section 1: The recitals set forth in the preamble of this ordinance are true and correct in all material respects. Section 2: It is hereby found, determined and declared that there is a substantial need for the Finn's legal services; the legal services cannot be adequately performed by the in-house attorneys and supporting personnel of the City; the PID-related bond counsel services cannot reasonably be obtained from attorneys in private practice under a contract providing only for the payment of hourly fees, without regard to the outcome of the matter, because of the nature of the matter for which the services will be obtained; and the compensation for such PID-related bond counsel services will be paid, in whole or in part, from the proceeds of bonds or other obligations issued by the City. Section 3: That the City Council of the City authorizes the City Attorney to execute the Addendum to the Engagement Letter between the City and the Firm, which addendum is attached hereto as Exhibit "A" and incorporated herein for all intents and purposes. Section 4: This ordinance shall take effect immediately from and after its passage by the City Council of the City of Baytown. INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the City of Baytown this the 131h day of February, 2020. BRANDON CAPETILLO, Ayor ATT ST: LETICIA BRYSCH, dty Clerk APPROVED AS TO FORM: ANACIO RAMIREZ, S City Attorney R: Karen Files City Council Ordinances 2020 February 13 DM-#6098365-v2-City of Baytown Resolution_Approving_Engagement Agreement.docx 2 Exhibit "A" BRACEWELL January 9, 2019 Mr. Ignacio Ramirez City Attorney City of Baytown, Texas 2401 Market Street Baytown TX 77522-0424 Re: Addendum to Engagement Letter —City of Baytown, Texas Dear Mr. Ramirez: Thank you for engaging us to represent the City of Baytown, Texas ("City" or "Client") as special counsel to the City. We appreciate the confidence you have shown in Bracewell LLP ("Bracewell" or "Firm") and look forward to this opportunity to represent your interests. This addendum to our existing bond counsel engagement letter is for the purpose of adding an additional matter to our scope of services. The Terms of Engagement attached to the original engagement letter will continue to govern this engagement. This addendum has been approved by Bracewell subject to the conditions described in this letter. A. Scope of Engagement Bracewell will represent Client in connection with advice and counsel regarding the creation of one or more public improvement districts (each, a "PID") and the negotiation of related development agreements (each, a "Development Agreement") with the developer(s) undertaking development within the PID (each, a "Developer") of the PID. Bracewell will also represent the City in connection with its issuance, from time to time, of bonds, and other debt obligations ("Obligations") related thereto. We agree that our services as counsel to the City in connection with PID matters may include the following as directed by the City: 1. Assisting the City with the development of a PID Policy. 2. Drafting the Development Agreement and other City documents relating to the PID, including policies and procedures for creation of a PID by the City. 3. Drafting documents relating to the creation of the PID and the levy of Assessments. 4. Attendance at all meetings of the City Council as required or requested in connection with the planning and authorization of Obligations, including consultation on federal income tax matters; AUVIN CONNECTICUT DALLAS DUBAI HOUSTON LONDON NEW YORK SAN ANTONIO SEATTLE WASHINGTON, DC 5. Preparation of the ordinances of the City Council authorizing issuance of Obligations, together with all other legal documents comprising the transcript of proceedings for authorization and issuance of Obligations; 6. Preparation of and submission to the Attorney General of Texas of a transcript of proceedings for each series of Obligations to obtain the approval of the Attorney General and registration of Obligations by the Comptroller of Public Accounts of Texas; 7. Preparation and filing of legal documents required under federal income tax law for the Obligations; 8. Representation of the City at the closing of the sale of Obligations, including preparation of all closing documents; and 9. If appropriate, the delivery at closing of our approving opinion as to the validity of the Obligations under Texas law, and the exclusion of interest on the Obligations from gross income of the holders under federal income tax law. The services outlined above do not include such matters as services as disclosure counsel in connection with the sale of the Obligations, work on post -closing federal tax or disclosure issues, obtaining IRS rulings or clarifications of federal tax law, presentations to rating agencies or bond insurers, or "blue sky" or securities registration services. We will be pleased to provide legal services in connection with any matters not included in paragraphs 1 through 9 above, but we believe that such additional services, if requested by the City, should be the subject of an addendum to this letter or a separate letter of engagement. Our representation of the City with respect to any particular series of Obligations will end upon the closing for that particular series of Obligations. This Engagement Letter may be supplemented to reflect new matters or issues that deviate from the current engagement in scope, billing arrangements, complexity, risk, or that otherwise require a substantial change in terms and conditions. The Terms of Engagement, however, will govern all projects and engagements for Client. B. Fees. Expenses and Billine Third Party Payment of Certain PID Creation Fees Although Client remains primarily responsible for the timely payment of all invoices, Bracewell acknowledges that Client may pay the portion of the legal fees, other than PID bond counsel fees, and certain fees related to the negotiation of the Development Agreement, related to the creation of a PID or other items related to this engagement from an escrow account funded by the developer of the PID. Invoices will be delivered to Client. Client is Bracewell's only client in this engagement; no attorney - client or other relationship exists between Bracewell and the Developer, and the Developer will not have any authority as to the performance of this engagement. Client understands and consents to fees and expenses being paid from funds deposited by the Developer. If Developer fails to fund an escrow to pay such fees, Client will be responsible for making payment. 2. Development Agreement Related Fees. Legal fees incurred in connection with the development of City policies or the negotiation of the Development Agreement may be paid from the proceeds of the Obligations to be issued by the City in connection with the PID. Such fees shall be in addition to any fees due under Section C of this Agreement. However, if Obligations are not expected to be issued or have not been issued within twelve months of the execution of the Development Agreement or if the Development Agreement is not executed, the Firm will invoice the City for such fees and expenses, and the City will be responsible for the timely payment of such fees and expenses. Fees described in paragraphs 1 and 2 will be based primarily on an hourly charge determined by the amount of time devoted by Bracewell professionals to perform the legal services contemplated by this engagement. Other factors authorized by Rule 1.5(a) of the ABA Model Rules of Professional Conduct also may be considered when determining the fees charged by Bracewell. Billing rates for our attorneys vary according to the experience of the individuals. Our current billing rates for those attorneys in our section who you might ask to work on your matter range from $250 an hour for the most junior associate to $950 an hour for the most senior partner. In an effort to reduce overall legal costs, we utilize paralegal and administrative assistant personnel whenever appropriate. Time devoted by such paralegal personnel to client matters is currently charged at billing rates generally ranging from $150 to $350 per hour. Billing rates for attorneys, paralegal and administrative assistant personnel are, from time to time, reviewed and adjusted. Matters involving the production of electronically stored information may result in additional fees and expenses being incurred by the Firm and/or by third -party vendors on behalf of Client. See the attached Terms of Engagement for more details. 3. Ongoing PID Administrative Related Fees. Legal fees relating to the ongoing administration of the PID, including the review of annual updates to the Service and Assessment Plan, shall be billed at our hourly rates determined by the amount of time devoted by Bracewell professionals to this work. Our fees for ongoing administration of the PID will be paid from assessments levied for administrative costs within the PID. C. PID Bond Counsel Fees Our services as Bond Counsel under this Letter will commence following the adoption of a Service and Assessment Plan for a public improvement district. Any services provided prior to the adoption of the Service and Assessment Plan shall be addressed as provided in Section B of this Letter. For our services as bond counsel in connection with the authorization, issuance and sale of each series of public improvement district Obligations, the City will pay us, from the proceeds of sale of each issue or installment of the Obligations, the following: 1. an amount equal to 3% of the first $5,000,000 in principal amount of such Series of Obligations; and 2. 2-1/2% of the principal amount of such Series of Obligations above said first $5,000,000 in principal amount but not exceeding $10,000,000 in principal amount; and 3. 2% of the principal amount of such Series of Obligations above $10,000,000 in principal amount but not exceeding $15,000,000 in principal amount; plus 4. an amount equal to 1-1/2% of the principal amount of such Series of Obligations above $15,000,000 in principal amount. The above fee schedule shall be applicable to each separate series, issue or installment of Obligations, but shall only be due with respect to Obligations actually issued, sold and delivered. Our fee for bond counsel services for any separate issue or installment of Obligations shall not be less than $50,000. Our fee for serving as bond counsel on any issue of refunding bonds for the refunding of any Obligations will be 1% of the principal amount of such bonds, but not less than $50,000. If the City chooses to issue bond anticipation notes in connection with a bond issue, our fee for such services will be 1% of the principal amount of such note, but not less than $10,000. Thank you again for the opportunity to represent you in this matter. Very truly yours, Bracewell LLP Jonathan K. Frels Partner Attachments AGREED AND ACCEPTED: City of Baytown, Texas By: - Its:_ Date: �------- � -- ----- — 6083251.3 CITY OF BAYTOWN BAYTO N OFFICE OF I HE CITY CLERK 2401 Market Street P.O. &m 424 Baytown,Texas 77522-0424 (281)420-6504 February 18, 2020 CM/RRR#7016 1370 0000 9474 8720-TR#9590 9402 4286 8190 1549 89 BRACEWELL Attn: Mr. Jonathan K. Frels 711 Louisiana I Suite 2300 Houston, Texas 77002-2770 Ref: Addendum to Engagement Letter—City of Baytown,Texas Dear Mr: Frels: Please find enclosed one original of the above noted Addendum to Engagement Letter (contingency fees) for legal services associated with the creation of one or more Public Improvement Districts (PID'S) and the issuance of bonds and other debt obligations related thereto, having been signed by City Manager of the City of Baytown, Mr. Richard L. Davis on this the 18th day of February, 2020. This Addendum to Engagement Letter having been attached as Exhibit "A" under City of Baytown Ordinance No. 14,323 dated February 13, 2020. Should you requi anything further, do not hesitate in contacting our Legal Department to 281-420-6506. Respect , Sy 'ta A .. r. P A. inistrative Asst. of Baytown Office of the City Clerk 2401 Market Street Baytown,Texas 77520 Enclosures cc: Legal Department www.baytown.org BRACEWELL January 9, 2019 Mr. Ignacio Ramirez City Attorney City of Baytown,Texas 2401 Market Street Baytown TX 77522-0424 Re: Addendum to Engagement Letter—City of Baytown,Texas Dear Mr. Ramirez: Thank you for engaging us to represent the City of Baytown, Texas ("City" or "Client") as special counsel to the City. We appreciate the confidence you have shown in Bracewell LLP ("Bracewell" or"Firm") and look forward to this opportunity to represent your interests. This addendum to our existing bond counsel engagement letter is for the purpose of adding an additional matter to our scope of services. The Terms of Engagement attached to the original engagement letter will continue to govern this engagement. This addendum has been approved by Bracewell subject to the conditions described in this letter. A. Scope of Engagement Bracewell will represent Client in connection with advice and counsel regarding the creation of one or more public improvement districts (each, a "PID") and the negotiation of related development agreements (each, a "Development Agreement")with the developer(s) undertaking development within the PID (each, a "Developer") of the PID. Bracewell will also represent the City in connection with its issuance, from time to time, of bonds, and other debt obligations("Obligations") related thereto. We agree that our services as counsel to the City in connection with PID matters may include the following as directed by the City: 1. Assisting the City with the development of a PID Policy. 2. Drafting the Development Agreement and other City documents relating to the PID, including policies and procedures for creation of a PID by the City. 3. Drafting documents relating to the creation of the PID and the levy of Assessments. 4. Attendance at all meetings of the City Council as required or requested in connection with the planning and authorization of Obligations, including consultation on federal income tax matters; AUS!IN CONNECTICUT DALLAS DUBAI HOUSTON LONDON NEW YORK SAN ANTONIO SEATTLE WASHINGTON, DC 5. Preparation of the ordinances of the City Council authorizing issuance of Obligations, together with all other legal documents comprising the transcript of proceedings for authorization and issuance of Obligations; 6. Preparation of and submission to the Attorney General of Texas of a transcript of proceedings for each series of Obligations to obtain the approval of the Attorney General and registration of Obligations by the Comptroller of Public Accounts of Texas; 7. Preparation and filing of legal documents required under federal income tax law for the Obligations; 8. Representation of the City at the closing of the sale of Obligations, including preparation of all closing documents; and 9. If appropriate, the delivery at closing of our approving opinion as to the validity of the Obligations under Texas law, and the exclusion of interest on the Obligations from gross income of the holders under federal income tax law. The services outlined above do not include such matters as services as disclosure counsel in connection with the sale of the Obligations, work on post-closing federal tax or disclosure issues, obtaining IRS rulings or clarifications of federal tax law, presentations to rating agencies or bond insurers, or "blue sky" or securities registration services. We will be pleased to provide legal services in connection with any matters not included in paragraphs 1 through 9 above, but we believe that such additional services, if requested by the City, should be the subject of an addendum to this letter or a separate letter of engagement. Our representation of the City with respect to any particular series of Obligations will end upon the closing for that particular series of Obligations. This Engagement Letter may be supplemented to reflect new matters or issues that deviate from the current engagement in scope, billing arrangements, complexity, risk, or that otherwise require a substantial change in terms and conditions. The Terms of Engagement, however, will govern all projects and engagements for Client. B. Fees, Expenses and Billing 1. Third Party Payment of Certain PID Creation Fees Although Client remains primarily responsible for the timely payment of all invoices, Bracewell acknowledges that Client may pay the portion of the legal fees, other than PID bond counsel fees, and certain fees related to the negotiation of the Development Agreement, related to the creation of a PID or other items related to this engagement from an escrow account funded by the developer of the PID. Invoices will be delivered to Client. Client is Bracewell's only client in this engagement; no attorney- client or other relationship exists between Bracewell and the Developer, and the Developer will not have any authority as to the performance of this engagement. Client understands and consents to fees and expenses being paid from funds deposited by the Developer. If Developer fails to fund an escrow to pay such fees, Client will be responsible for making payment. 2. Development Agreement Related Fees. Legal fees incurred in connection with the development of City policies or the negotiation of the Development Agreement may be paid from the proceeds of the Obligations to be issued by the City in connection with the PID. Such fees shall be in addition to any fees due under Section C of this Agreement. However, if Obligations are not expected to be issued or have not been issued within twelve months of the execution of the Development Agreement or if the Development Agreement is not executed, the Firm will invoice the City for such fees and expenses, and the City will be responsible for the timely payment of such fees and expenses. Fees described in paragraphs 1 and 2 will be based primarily on an hourly charge determined by the amount of time devoted by Bracewell professionals to perform the legal services contemplated by this engagement. Other factors authorized by Rule 1.5(a) of the ABA Model Rules of Professional Conduct also may be considered when determining the fees charged by Bracewell. Billing rates for our attorneys vary according to the experience of the individuals. Our current billing rates for those attorneys in our section who you might ask to work on your matter range from $250 an hour for the most junior associate to $950 an hour for the most senior partner. In an effort to reduce overall legal costs, we utilize paralegal and administrative assistant personnel whenever appropriate. Time devoted by such paralegal personnel to client matters is currently charged at billing rates generally ranging from $150 to $350 per hour. Billing rates for attorneys, paralegal and administrative assistant personnel are, from time to time, reviewed and adjusted. Matters involving the production of electronically stored information may result in additional fees and expenses being incurred by the Firm and/or by third-party vendors on behalf of Client. See the attached Terms of Engagement for more details. 3. Ongoing PID Administrative Related Fees. Legal fees relating to the ongoing administration of the PID, including the review of annual updates to the Service and Assessment Plan, shall be billed at our hourly rates determined by the amount of time devoted by Bracewell professionals to this work. Our fees for ongoing administration of the PID will be paid from assessments levied for administrative costs within the PID. C. PID Bond Counsel Fees Our services as Bond Counsel under this Letter will commence following the adoption of a Service and Assessment Plan for a public improvement district. Any services provided prior to the adoption of the Service and Assessment Plan shall be addressed as provided in Section B of this Letter. For our services as bond counsel in connection with the authorization, issuance and sale of each series of public improvement district Obligations, the City will pay us, from the proceeds of sale of each issue or installment of the Obligations, the following: 1. an amount equal to 3% of the first $5,000,000 in principal amount of such Series of Obligations; and 2. 2-1/2%of the principal amount of such Series of Obligations above said first $5,000,000 in principal amount but not exceeding$10,000,000 in principal amount; and 1 3. 2% of the principal amount of such Series of Obligations above $10,000,000 in principal amount but not exceeding$15,000,000 in principal amount; plus 4. an amount equal to 1-1/2% of the principal amount of such Series of Obligations above $15,000,000 in principal amount. The above fee schedule shall be applicable to each separate series, issue or installment of Obligations, but shall only be due with respect to Obligations actually issued, sold and delivered. Our fee for bond counsel services for any separate issue or installment of Obligations shall not be less than $50,000. Our fee for serving as bond counsel on any issue of refunding bonds for the refunding of any Obligations will be 1%of the principal amount of such bonds, but not less than $50,000. If the City chooses to issue bond anticipation notes in connection with a bond issue, our fee for such services will be 1%of the principal amount of such note, but not less than $10,000. Thank you again for the opportunity to represent you in this matter. Very truly yours, Bracewell LLP ekiree.--74"1":/. Jonathan K. Frels Partner Attachments AGREED AND ACCEPTED: City of Baytown,Texas By: (R• &/ Its: G Date: 1ib... -1p t,L - #608325I.3