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HomeMy WebLinkAbout2012-02-14 City Council Item No. 6 CITY OF LAKE LSINORE DREAM EXTREME, REPORT TO CITY COUNCIL TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: ROBERT A. BRADY CITY MANAGER DATE: FEBRUARY 14, 2012 SUBJECT: ASSESSMENT DISTRICT, COMMUNITY FACILITIES DISTRICT AND BOND REBATE PROFESSIONAL SERVICES AGREEMENTS Background The City currently has five assessment districts (ADs), twenty -six community facilities districts (CFDs), and related outstanding bonds for many of those districts along with other bonds issued for other similar infrastructure improvements. State and federal law, the various bond indentures and County polices require specific administration activities be conducted annually. 1. Assessment District/CFD Services In February 2009, the City awarded a professional services agreement to Francisco & Associates, Inc. to provide annual administration services for the CFDs. Prior to 2009, these services were provided by Harris & Associates, Inc. In 2011, the City terminated its contract with NBS for providing assessment district administration services and amended the Francisco & Associates' contract to also provide the Assessment District services. Joe Francisco has been the lead consultant for these Assessment District services while Dennis Anderson has been the lead consultant related to the CFDs. The existing contract with Francisco & Associates expires this month. Mr. Francisco proposes to continue to provide the Assessment District and related services through Francisco & Associates. Dennis Anderson, who has traditionally provided the CFD consulting services at the Francisco firm, recently rejoined Harris & Associates. Accordingly, Mr. Anderson proposes to provide such CFD consulting services through the Harris firm. AGENDA ITEM NO. 6 Page 1 Professional Services Agreements February 14 2012 Page 2 2. Bond Rebate Calculation Services As noted above, the City terminated its relationship with NBS last year. NBS had also provided bond related consulting services to the City along with its affiliated financing entities that have issued debt to finance various infrastructure improvements. These existing bonds must be maintained in accordance with the regulations set by the Internal Revenue Service (IRS) in order to maintain their tax exempt status. One of the on -going requirements set by the IRS is that the measurement of any arbitrage earnings (investment return in excess of the yield on the bonds) must be made before the end of the 5th bond year and periodically after that. Generally, any interest earnings on bond proceeds invested above the bond yield will have to be "rebated" to the United States treasury within sixty days of each five -year anniversary date and after the final redemption of the bonds. Because the "rebate" calculations were previously made by NBS, the City needs to retain a new consultant to conduct the rebate calculations. Staff has obtained a proposal from a recognized expert in the field, Samuel Norber. Discussion 1. Proposal to contract with Francisco firm and Harris firm for administration of Assessment Districts /CFDs To assist in compliance with State law and County procedures, the City has previously retained Francisco & Associates to provide assessment district and CFD administration, including preparation of annual reports, delinquency management, calculation of assessment and special taxes, submittal of assessments and special taxes to the County for placement on the property tax roll, handling of all public inquires related to the CFDs, and preparation of required documents for annexation into an existing CFD. City staff proposes to generally divide the Assessment District and CFD administration work between the Francisco firm and the Harris pectively. Joe r is throughout Ca�fornE has over 25 years of experience managing asse and will continue to provide administration services services for the all districts. l Dennis A. Andersont the along with delinquency management se principal consultant for Harris & Associates who has over 23 years of experience managing community facilities districts and has been assisting the City of Lake Elsinore since 1998, will provide administration services for the City's CFDs including handling public inquiries for all districts. Page 2 Professional Services Agreements February 142012 Page 3 2. Proposal to contract with Samuel Norber for Bond Rebate Services To assist in compliance with the IRS Code and U.S. Treasury Regulations, the City needs specific services relating to arbitrage and rebate calculations. Those services generally include: • Document Review. Pertinent documents of the issue will be reviewed including the Official Statement, Trust Indenture, Tax Certificate, and IRS form 8038 -G to determine whether the issue is subject to the rebate requirement and identify what general and /or elective exceptions are available to the issue. • Bond Yield. Sources and uses of all proceeds will be identified to determine how the rebate requirement applies to each fund. Produce a debt service schedule for the issue and calculate and /or verify the bond yield. • Excess Earnings Calculation. Trust statements and /or City accounting records will be utilized to create a cash flow report for each fund. These reports will be used to identify all investment activity and interest earnings attributable to the funds. Calculate the arbitrage earnings on investment of funds subject to rebate and determine the issuer's net rebate and /or penalty liability. • Investment Yield Calculation. The investment yield will be calculated for each fund as a "reality check" to reaffirm the accuracy of the cash flow report. This measure not only ensures the accuracy `,I of the report but also is a useful tool when analyzing investment opportunities. • Summary. A report that summarizes the rebate liability of the issue, identifies the methodology employed, computational assumptions, conclusions, and any recommended changes in record keeping and investment policies. Analyze all transactions and explore every legally permissible avenue to minimize the rebate liability. Identify outstanding proceeds subject to the rebate requirement, and identify the instruments and yields of the investment vehicles utilized by each fund. • Filing Requirement. Coordinate the preparation and filing of the IRS form 8038 - T with the payment as required. The Law Offices of Samuel Norber has presented a proposal to the City to provide these services. Mr. Norber has specialized in municipal finance and tax law since graduating from law school in 1980. He practiced with two major "bond" firms in New York before joining Nossaman LLP, in Los Angeles, as a partner in 1988. In March 2000, Mr. Norber opened his own firm. Page 3 Professional Services Agreements February 14 2012 Page 4 Mr. Norber's firm focuses exclusively on the tax issues that relate to public finance such as tax allocation bonds, certificates of participation, nonprofit 501(c)(3) borrowers, tax and revenue anticipation notes, '? housing revenue bonds, revenue bonds secured by the financed facilities, Mello -Roos bonds and assessment bonds, sales tax revenue bonds, Build America Bonds and tax credit bonds. Since opening in March 2000, the firm has issued tax opinions in transactions totaling more than $11.9 billion. Additionally, Mr. Norber's rates are consistent with other providers of such services. Fiscal Impact Fees for the services to be provided would be paid as part of the bond and special district resources set aside for administration. Accordingly, there is no impact to the City's General Fund. Recommendations 1. Approve a Professional Services Agreement with Francisco & Associates, Inc. to provide annual assessment district administration and other related services, beginning February 1, 2012, in the form attached subject to any minor modifications approved by the City Attorney. 2. Approve a Professional Services Agreement with Harris & Associates, Inc. to provide annual community facilities district administration and other related services, beginning February 1, 2012, in the form attached subject to any minor modifications approved by the City Attorney. 3. Approve a Professional Services Agreement with the Law Offices of Samuel Norber to provide bond rebate calculation and other related services, beginning February 1, 2012, in the form attached subject to any minor modifications approved by the City Attorney. Prepared by: James Riley w4,. Director of Ad istrative Services Approved by: Robert A. Brad ' City Manager i Page 4 Professional Services Agreements February 14 2012 Page 5 Attachments: 1. Form of Professional Services Agreement 2. Francisco & Associates Scope of Services /Fee Schedule 3. Harris & Associates Scope of Services /Fee Schedule 4. Samuel Norber Scope of Services /Fee Schedule Page 5 Page 6 Attachment No. .1 Page 7 AGREEMENT FOR PROFESSIONAL SERVICES Th Agreement for Profess Serv (the "Agreement ") is made and entered into as of the day of , 2012, by and between the City of Lake Elsinore, a municipal corporation ( "City") and a ( "Consultant "). RECITALS A. Consultant is specially trained, experienced and competent to perform the special services which will be required by this Agreement. B. Consultant possesses the skill, experience, ability, background, certification and knowledge to provide the services described in this Agreement on the terms and conditions described herein. C. City desires to retain Consultant to render professional consulting services and related work as set forth in this Agreement. AGREEMENT 1. Scope of Services. Consultant shall perform the services described on Exhibit A which is attached hereto and incorporated herein by reference. Consultant shall provide said services at the time, place, and in the manner specified in Exhibit A, subject to the direction of the City through its staff that it may provide from time to time. 2. Time of Performance. The services of Consultant are to commence upon execution of this Agreement and shall continue for a period of three (3) years, with two (2) optional one (1) year extensions. 3. Compensation. Compensation to be paid to Consultant shall be in accordance with the Schedule of Charges set forth in Exhibit B, which is attached hereto and incorporated herein by reference. Payment by City under this Agreement shall not be deemed a waiver of defects, even if such defects were known to the City at the time of payment. 4. Method of Payment. Consultant shall submit monthly billings to City describing the work performed during the preceding month. Consultant's bills shall . include a brief description of the services performed, the date the services were performed, the number of hours spent and by whom, and a description of any reimbursable expenditures. City shall pay Consultant no later than 30 days after approval of the monthly invoice by City staff. 5. Extra Work. At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the parties did not reasonably anticipate would be necessary at the execution of this Agreement. Consultant shall not perform, nor be compensated for, Extra Work without written authorization from City. Extra work will be invoiced separately from services performed in accordance with the Scope of Services Page` 8 6. Termination. This Agreement may be terminated by the City immediately for cause or by either party without cause upon thirty (30) days' written notice of termination. Upon termination, Consultant shall be entitled to compensation for services performed up to the effective date of termination. 7. Ownership of Documents. All plans, studies, documents and other writings prepared by and for Consultant, its officers, employees and agents and subcontractors in the course of implementing this Agreement, except working notepad internal documents, shall become the property of the City upon payment to Consultant for such work, and the City shall have the sole right to use such materials in its discretion without further compensation to Consultant or to any other party. Consultant shall, at Consultant's expense, . provide such reports, plans, studies, documents and other writings to City upon written request. City acknowledges that any use of such materials in a manner beyond the intended purpose as set forth herein shall be at the sole risk of the City. City further agrees to defend, indemnify and hold harmless. Consultant, its officers, officials, agents, employees and volunteers from any claims, demands, actions, losses, damages, injuries, and liability, direct or indirect (including any and all costs and expenses in connection therein), arising out of the City's use of such materials in a manner beyond the intended purpose as set forth herein. a. Licensing of Intellectual' Property. This Agreement creates a nonexclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ( "Documents & Data "). Consultant shall require that all subcontractors agree in writing that City is granted a nonexclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or provided to Consultant by the City. City shall not be limited in any way in its use of the 'Documents & Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City's sole risk. b. Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents & Data either created ' by or provided to Consultant in, connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall' not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the services under this Agreement. Nor shall such materials be disclosed to any person or entity not connected with the performance of the services under this Agreement. Nothing furnished to Consultant which is otherwise known to Consultant or is generally known, or has become known, to the related industry shall be deemed confidential. Consultant shall not use City's name or insignia, photographs relating to project for .which Consultant's services are rendered, or any publicity pertaining to the Consultant's services under this Agreement in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City. Page 9 8. Consultant's Books and Records. a. Consultant shall maintain any and all ledgers, books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for services,' or expenditures and disbursements charged to City for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant to this Agreement.! b. Consultant shall maintain all documents and records which demonstrate performance under this Agreement for a minimum period of three (3) years, or for any longer period required by law, from the date of termination or completion of this Agreement. c. Any records or documents required to be maintained pursuant to this Agreement shall be made' available for inspection or audit, at any time during regular business hours, upon written request by the City Manager, City Attorney, City Auditor or a designated representative of these officers; Copies of such documents shall be provided to the City for inspection at City Hall when it is practical to do so. Otherwise, unless an alternative is mutually agreed upon, the records shall be available at Consultant's address indicated for receipt of notices in this Agreement. d. Where City has reason to believe that such records or documents may be lost or discarded due to dissolution, disbandment or termination of Consultant's business, City may, by written request by any of the above- named officers, require that custody of the records be given to the. City and that the records and documents be maintained in City Hall. Access . to such records and documents shall be granted to any party authorized by Consultant, Consultant's representatives, or Consultant's successor -in- interest. 9. Independent Contractor. It is understood that Consultant, in the performance of the work and services agreed to be performed, shall act as and be an independent contractor and shall not act as an agent or employee of the City. Consultant shall obtain no rights to retirement benefits or other' benefits which accrue to City's employees, and Consultant hereby expressly waives any claim it may have to any such rights. 10.: Interests of Consultant. Consultant (including principals, associates and professional employees) covenants and represents that it does not now have any investment or interest in real property and shall not acquire any interest, direct or indirect, in the area covered by this Agreement or any other source of income, interest in real property or investment which would be affected in any manner or degree by the performance of Consultant's services hereunder. Consultant further covenants and represents that in the performance of its duties hereunder no person having any such interest shall perform any services under this Agreement. Consultant is not a designated employee within the meaning of the Political Reform Act because Consultant: a. will conduct research and arrive at conclusions with respect to his/her rendition of information, advice, recommendation or counsel independent ofthe control and direction ofthe City or of any City official, other than normal agreement monitoring; and Page 10 b. possesses no authority with respect to any City decision beyond rendition of information, advice, recommendation or counsel. (FPPC Reg. 1'8700(a)(2).) 11. Professional Ability of Consultant. City has relied upon the professional training and ability of Consultant to perform the services hereunder as a material . inducement to enter into this Agreement. Consultant shall therefore provide properly skilled professional and technical personnel to perform all services under this Agreement. All work performed by. Consultant under this Agreement shall be in accordance with applicable legal requirements and shall meet the standard of quality ordinarily to be expected of competent professionals in Consultant's field of expertise. 12. Compliance with Laws. Consultant shall use the standard of care in its profession to comply with all applicable federal, state and local laws, codes, ordinances and regulations. 13. Licenses. Consultant represents and warrants to City that it has the licenses, permits, qualifications, insurance and approvals of whatsoever nature which are legally required of Consultant to practice its profession. Consultant represents and warrants to City that Consultant shall, at, its sole cost and expense, keep in effect or obtain at all times during the term of this Agreement, any licenses, permits, insurance and approvals which are legally required of Consultant to practice its profession. 14. Indemnity. Consultant agrees to indemnify and hold harmless the City, its officers, officials, employees and agents from and against any and all claims, demands, actions, losses, damages, injuries, and liability, direct or indirect (including costs and expenses in connection therein), to the extent arising out of the negligent performance of services under this Agreement, except for any such claim arising out of the negligence or willful misconduct of the City, its officers, agents, employees or volunteers. 15. Insurance Requirements. a. Insurance. Consultant, at Consultant's own cost and expense, shall procure and maintain, for the duration of the contract, the following insurance policies. i. Workers' Compensation Coverage. Consultant shall maintain Workers' Compensation Insurance and Employer's Liability Insurance for his/her employees in accordance with the laws of the State of California. In addition, Consultant shall require each subcontractor to similarly maintain Workers' Compensation Insurance and Employer's Liability Insurance in accordance with the laws of the State of California for all of the subcontractor's employees. Any notice of cancellation or non- renewal of all Workers' Compensation policies must be received by the City at least thirty (30) days prior to such, change. The insurer shall agree to waive all rights of subrogation against City, its officers, agents, employees and volunteers for losses arising from work performed by Consultant for City. ii. General Liability Coverage.. Consultant shall maintain commercial general liability insurance in an amount not less than one million dollars ($1,000,000) per Page 11 occurrence for bodily injury, personal injury and property damage. If a commercial general liability insurance form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit. iii. Automobile Liability Coverage. Consultant shall maintain automobile liability insurance covering bodily injury and property damage for all activities of the Consultant arising out of or in connection with the work to be performed under this Agreement, including coverage for owned, hired and non-owned vehicles, in an amount of not less than one million dollars ($1,000,000) combined single limit for each occurrence. iv. Professional Liability Coverage. Consultant shall maintain professional errors and omissions liability insurance for protection against claims alleging negligent acts, errors or omissions which may arise from Consultant's operations under this Agreement, whether such operations by the Consultant or by its employees, subcontractors, or subconsultants. The amount of this insurance shall not be less than one million dollars ($1,000,000) on a claims -made annual aggregate basis, or a combined single limit, per occurrence basis. b. Endorsements. Each general liability and automobile liability insurance policy shall be, with insurers possessing a Best's rating of no less than A:VII and shall be endorsed with the following specific language: i The City, its elected or appointed officers, officials, employees, and agents are to be covered as additional insureds with respect to liability arising out of work performed by or on behalf of the Consultant, including materials, parts or equipment furnished in connection with such work or operations. ii. This policy shall be considered primary insurance as respects the City, its elected or appointed officers, officials, employees, and agents. Any insurance maintained by the City, including any self - insured retention the City may have, shall be considered excess insurance only and shall not contribute with it. iii. This insurance shall act for each insured and additional insured as though a separate policy had been written for each except with respect to the limits: of liability of the insuring company. iv. The insurer waives all rights of subrogation against the City, its elected or appointed officers, officials, employees or agents. v. The insurance provided by this Policy canceled except after thirty (30) days written notice has been received by the City and 10 -day notice for nonpayment of the premium. Page 12 c. Deductibles and Self - Insured Retentions. Any deductibles or self - insured retentions must be declared to and approved by the City.. At the City's option, Consultant shall demonstrate financial lcapability for payment of such deductibles or self- insured retentions. d. Certificates of Insurance. Consultant shall provide certificates of insurance with original endorsements to City as evidence of the insurance coverage required herein. Certificates of such insurance shall be filed with the City on or before commencement of performance of this Agreement. Current certification of insurance shall be kept on file with the City at all times during the term of this Agreement. 16. Notices. Any notice required to be given under this Agreement shall be in writing and either served personally or sent prepaid, first class mail. Any such notice shall be addressed to the other party at the address set forth below. Notice shall be deemed communicated within 48 hours from the time of mailing if mailed as provided in this section. If to City: City of Lake Elsinore Attn: City Manager 130 South Main Street Lake Elsinore, CA 92530 If to Consultant: 17. Entire Agreement: This Agreement constitutes the complete and exclusive statement of Agreement between the City and Consultant. All prior written and oral communications, including correspondence, drafts, memoranda, and representations, are superseded in total by this Agreement. 18. Amendments. This Agreement may be modified or amended only by a written document executed by both Consultant and City and approved as to form' by the City Attorney. 19. Assignment and Subcontracting. The parties recognize that a substantial inducement to City for entering into this Agreement is the professional reputation, experience and competence of Consultant and the subcontractors listed in Exhibit D. Consultant shall be fully responsible to City for all acts or omissions of any subcontractors. Assignments of any or all rights, duties or obligations of the Consultant under this Agreement will be permitted only with the express consent of the City. Consultant shall not subcontract any portion of the work to be performed under this Agreement except as provided in Exhibit D without the written authorization of the City. If City consents to such subcontract, Consultant shall be fully responsible to City for all acts or omissions of those subcontractors. Nothing in this Agreement shall create any contractual relationship between City and any subcontractor nor shall it create any obligation on the part of the City to pay or to see to the payment of any monies due to any such subcontractor other than as otherwise is required by law. 20. • Waiver. Waiver of a breach or default under this Agreement shall not constitute a continuing waiver of a subsequent breach of the same or any other provision under this Agreement. Page 13 21. Severability. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. 22. Controlling Law Venue. This Agreement and all matters relating to it shall be governed by the laws of the State of California and any action brought relating to this Agreement shall be held exclusively in a state court in the County of Riverside. 23. Litigation Expenses and Attorneys' Fees. If either party to this Agreement commences any legal action against the other party arising out of this Agreement, the prevailing party shall be entitled to recover its reasonable litigation expenses, including court costs, expert witness fees, discovery expenses, and attorneys' fees. 24. Mediation. The parties agree to make a good faith attempt to resolve any disputes arising out of this Agreement through mediation prior to commencing litigation. The parties shall mutually agree upon the mediator and share the costs of mediation equally. If the parties are unable to agree upon a mediator, the dispute shall be submitted to JAMS /ENDISPUTE ( "JAMS ") or its successor in interest. JAMS shall provide the parties with the names of five qualified mediators. Each party shall have the 'option to strike two of the five mediators selected by JAMS and thereafter the mediator remaining shall hear the dispute. If the dispute remains unresolved after mediation, either party may commence litigation. 25. Execution. This Agreement may be executed in several counterparts, each of which shall constitute one and the same instrument and shall become binding upon the parties when at least one copy hereof shall have been signed by both parties hereto. In approving this Agreement, it shall not be necessary to produce or account for more than one such counterpart. 26. Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and to bind each respective party. 27. Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, ! commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability.. For the term of this Agreement, no member, officer or employee of City, during the term of or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. 28. Equal Opportunity Employment. Consultant represents that it is an equal opportunity and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non- discrimination shall include, but not be limited to, all activities related to initial employment, 14 upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. IN WITNESS, WHEREOF the parties have caused this Agreement to be executed on the date first written above. CITY OF LAKE ELSINORE: CONSULTANT: ATTEST: City Clerk APPROVED AS TO FORM: City Attorney Attachments: •Exhibit - Scope of Services Exhibit B - Fee Schedule Exhibit C - Certificate of Exemption from Workers Compensation Insurance Exhibit D - List of Subcontractors Page 15 EXHIBIT "A,, SCOPE OF SERVICES Page 16 EXHIBIT "B SCHEDULE OF CHARGES Page 17 EXHIBIT "C,, CERTIFICATE OF EXEMPTION FROM WORKERS COMPENSATION INSURANCE : I hereby certify that in the performance of the work for which this Agreement is entered into, I shall not employ any person in any manner so as to become subject to the Workers' Compensation Laws of the State of California Executed on this day of , 20 at , California. Consultant Page 18 EXHIBIT «D,, LIST OF SUBCONTRACTORS No sub-contractors at time of contract execution. Sub - contractors may be added with the prior written consent of the City. Page 19 Attachment No. 2 Page 20'' EXHIBIT A FRANCISCO & ASSOCIATES, INC. SCOPE OF SERVICES L ANNUAL ADMINISTRATION LANDSCAPE AND STREET LIGHTING DISTRICTS PREPARE DISTRICT ENGINEER'S REPORTS The services for this phase include the tasks required for preparing the Engineer's Report for the district pursuant to the Landscaping and Lighting Act of 1972. All tasks will be performed annually, for each year covered by this Agreement. Task 1. Meet with City staff to discuss methods to be used to update assessment rolls, exchange pertinent information, review methodology for determining benefit zone assessments and finalize project scheduling: Task 2. Prepare a Preliminary Engineer's Report in which annual assessment rates for each special benefit zone will be established. The assessment rates will be based on projected landscape maintenance and street lighting costs, to be provided by the City. Task 3. Update assessment district diagrams and exhibits to reflect minor changes to benefit zone boundaries due to land development activity. Preliminary revision of the database and related computer work will be completed at this time. Task 4. Submit the Preliminary Engineer's Report with updated diagrams along with the preliminary assessment rolls to the City for review and comment. Revisions will be made and the report finalized for approval by the City Council. Task 5 Prepare draft agenda report and resolutions for the City Council meeting to approve the Annual Assessment levy, for review by City staff. Task 6. Attend City Council meeting involving approval of the Engineer's Report and the adoption of a resolution of intention to levy and collect assessments. PREPARE ANNUAL ASSESSMENT ROLL Following adoption by the City Council of the assessment, rate per benefit unit to be levied upon parcels within each special benefit zone in the Landscape and Street Lighting Districts, Francisco & Associates will prepare the annual assessment roll for submission to the County Auditor - Controller. Task 7. Prepare an Assessment Roll in CD form as required by the County. Auditor- Controller. Task 8. Submit the roll to the responsible officials for inclusion in the ensuing year's tax roll, and make such adjustments and corrections as required by the Auditor - Controller. Task 9. After acceptance of the Assessment Roll for inclusion on the ensuing year's tax roll, provide the City with a copy of the final Engineer's Report with updated assessment diagrams and final assessment rolls. Page 21 DISTRICT ADMINISTRATION SERVICES Francisco & Associates will assist the City of Lake Elsinore in the administration of the Landscape and Street Lighting Districts throughout the course of the year. Task 10. Assist the City in answering inquiries from property owners and preparing reports regarding their assessments. ADDITIONAL SERVICES Francisco & Associates will provide Additional Services upon written authorization on a time and materials basis, in accordance with the rate schedule current at the time of providing services, or on a lump sum fee basis, as negotiated. Additional Services may include: • Financial studies; • Formation of and administration of new assessment districts or related districts; • • Attend additional meetings other than those listed under the Scope of Services; • Prepare mailed notices or ballots to property owners; and • Any other services desired and authorized by the City of Lake Elsinore related to assessment or tax districts. RESPONSIBILITIES OF THE CITY • Designate a responsible official to manage and coordinate the project; • Make available records and documentation required in conjunction with the preparation of this report; • Provide proposed budgets for landscaping and park maintenance costs and for street lighting by zone for each year; • Provide all legal notices; • Retain qualified legal counsel to provide legal advice during the district process; • Schedule, administer, and accomplish the publishing of notices of the hearing in accordance with government code sections newspapers, ostin g (�.a . posting, etc.) • Schedule and agendize City Council Meetings and Hearings as required under the Act; • Provide envelopes and postage for any, and all mailings; and • Respond to written communications in writing, and review draft reports and submittals in a timely manner. Page 22 EXHIBIT A (continued) FRANCISCO & ASSOCIATES, INC. SCOPE OF SERVICES II. ANNEXATION OF TERRITORY INTO LANDSCAPE AND STREET LIGHTING DISTRICTS ENGINEER'S REPORT Task 1. Discuss with City staff the locations of improvements proposed to be maintained, the different levels of maintenance, if any, strategies for approaching the benefit analysis and cost apportionment, budget requirements for future maintenance, time frames, noticing and balloting issues, and other considerations. Task 2. Gather support data, cost estimates for the operation, maintenance and services to be included, the proposed development plan including the number and type of residential properties, and other pertinent information. Task 3. Develop the property owner database from the current County Assessor's Roll. Identify all public property and ascertain whether benefit from the improvements is received. This includes City, school, County, State, and Federal properties and facilities, as well as flood control and other special district properties. Identify all parcels within the area of special benefit. Task 4. Analyze the locations of the improvements proposed to be maintained to determine the specially benefiting parcels and the method of apportioning costs. Task 5. Prepare a draft Engineer's Report based on the requirements of the Landscaping and Lighting Act of 1972 and Article XIIID of the California State Constitution (the Report will be prepared by a Registered Professional Engineer). Prepare an Assessment Diagram. Submit up to five (5) copies of the draft Report. Review with City staff and discuss comments. Task 6. Finalize the Engineer's Report based on comments received from City staff and the property owner and submit up to twenty (20) copies for processing and filing. DISTRICT FORMATION Task 7' Prepare all resolutions required by City Council. Task 8. Prepare all staff reports required by City Council. Task 9. Attend one (1) City Council meeting involving approval of the Engineer's Report and adoption of a Resolution of Intention to annex property into the District. Task 10. Prepare the required Notice and Ballot for mailing to the property owner in the District, based on the text provided by legal counsel. The notice will be mailed, in a City provided envelope. Page 23 Task 11. Attend one (1) Public Hearing to present the Engineer's Report, provide technical support, answer questions and tabulate the ballots. If required, revisions will be made to the Engineer's Report after the public hearing, as directed by the City Council. (Revisions at this time are limited to reducing assessments, unless another balloting is requested.) RESPONSIBILITIES OF THE CITY • City to designate a responsible official to manage and coordinate the project. • Make available to. Francisco & Associates all available data, information, reports, maps, plans, specifications, cost estimates and other reasonable information for the proper performance for Francisco &.Associates' services. • Provide (or have developer provide) cost estimates, a Iegal description of the proposed boundary, and maps of the development plan and proposed improvements, electronically if available. • Prepare all notices of public hearings or other meetings to be published by City Clerk, and schedule and agendize City meetings and hearings as required by law. • Provide qualified legal counsel to draft legal notices, review resolutions, etc., and to provide legal advice to City staff and to the Assessment Engineer as required. Page 24 EXHIBIT A (continued) FRANCISCO & ASSOCIATES, INC: SCOPE OF SERVICES III. 1913/1915 ACT ASSESSMENT DISTRICT ADMINISTRATION PHASE I — ASSESSMENT DISTRICT ADMINISTRATION Task 1 Develop the ensuing year's assessment database for each assessment district. The assessment databases will include a listing of each parcel's original assessment amount, remaining principal amount, and the current year's principal, interest and administrative charges. Task 2 Coordinate with the City on a periodic basis to analyze the cash flow and fund balances in each assessment district fund. This will include recommending credits to the ensuing year's levy due to interest earnings or bond calls. When warranted assist with the bond call spreads and coordinate the early redemption of outstanding bonds. Task 3 Coordinate with the County Assessor's office in July of each fiscal year to determine which parcels within the City's assessment districts have segregated. For each parcel that has segregated determine the new parcels corresponding to each segregated parcel and reallocate their assessment lien.! Task 4 Based upon the parcel changes described in Task No. 3 update the assessment database for each assessment district. Task 5 . After receiving City approval, submit the assessment levies to the County in their required electronic format. If there are any additional parcel kick -outs research the parcels and resubmit them to the County so that they are included on the ensuing year's property tax roll. Task 6 Prepare an electronic listing of the assessment levies for each assessment district and forward to the City. Task 7 Provide a toll free number to field property owner inquiries throughout the fiscal year. Task 8 Prepare an annual report, which will include findings and recommendations, as well as a summary of significant events. The report will contain district summary information; amounts applied to the tax roll for each parcel, broken down by principal, interest and adjustments; fund analysis; delinquency summary information; value to lien ratios; current debt services and amortization schedules; cash flow analysis; and bond call summaries. Task 9 Prepare and submit the required CDIAC reports each year for each applicable assessment district. Task, 10 Prepare the annual report required pursuant to Revenue and Taxation Code, Section 163 to the County Assessor. The Report will contain: • The lien amount on each subject parcel at the time the lien was created. Page 25 • In the case in which a lien has been completely satisfied, the date and amount of the payment in satisfaction of the lien, and the identity of the party that made that payment. • The amount of the principal balance of the lien on each subject parcel. PHASE II - ASSESSMENT PREPAYMENT CALCULATIONS Task 1 Prov assessment prepayment calculat to i nterested ' part throughout the fiscal year. The prepayment calculations will take into account, remaining principal, interest to the next bond call date, prepayment penalties, city administrative fees, etc. Task 2 Mail, fax or e -mail the prepayment calculation to the interested property owner within 24 hours of the request. Task 3 Coordinate the Release of Lien with the County when a property owner has paid their assessment off in full. PHASE III - CONTINUING DISCLOSURE Prepare and disseminate Disclosure Reports to the Nationally- Recognized Municipal Securities Information Repositories (NRMSIR), the Municipal Securities Rulemaking Board (MSRB) and the appropriate State Information Depository (SID). Task 1 Prepare the Annual Continuing Disclosure Report and respond to secondary information requirements set forth in SEC Section 15c2 -12, as amended and SEC Section 1Ob -5. Task 2 Prepare Notice of Material/Significant Events if any of the following events occur. • Principal and interest payment delinquencies. • Non- payment related defaults. • Modifications to rights of bond holders • Optional, contingent or unscheduled bond calls. • Defeasances. • Rating changes. • Adverse tax opinions or events affecting the tax exempt status of bonds. • Unscheduled draws on the debt reserves reflecting financial difficulties. • Unscheduled draws on the credit enhancements reflecting financial difficulties. • Substitution of the credit or liquidity providers or their failure to perform. • Release, substitution or sale of property securing repayment of bonds. PHASE IV — ASSESSMENT SEGREGATION SERVICES Task 1 Review with City staff the scope of work, project schedule and any other pertinent project information. Discuss the pros and cons of using the Standard Procedure for Division of Land and Bond versus the Alternative Procedure for Division of Land and Bond. Page 26 Task 2 Upon receipt of the signed application and a copy of the map showing the newly segregated parcels, apportion the original assessment amount to each newly segregated parcel. The allocation of the original assessment amount to the newly created parcels will be based upon the proportionate benefit they receive from the improvements that were financed from the bond proceeds. Task 3 Prepare a Notice of Amended Assessment and an Amended Assessment Diagram that shows how the original parcels have been segregated based upon the requirements of Section 3114, of the Streets and Highways Code and per the County requirements. Task 4 Send to the underwriter or other original purchaser of any bonds a notice, by certified or registered mail, that an apportionment of an assessment has been made and that, unless a request for a hearing is received within 14 days from the date of mailing of the notice, the apportioned assessments shall be recorded. (If a request for a hearing is received, a report shall be filed and hearing shall be scheduled, noticed, and held in accordance with the Standard Procedures for Division of Land and Bond). Task 5 File the approved amended assessment and amended assessment diagram with the City Engineer and record a copy of the amended assessment diagram and Notice of Assessment Lien in the County Recorder's office. Task 6 Each Fiscal Year, prepare an annual segregation report that identifies all parcels that have been segregated. The report shall show how . the original parcels have had their unpaid assessments apportioned in accordance with the benefits received. Page 27 EXHIBIT A (continued) FRANCISCO & ASSOCIATES, INC. SCOPE OF SERVICES IV. DELINQUENT MANAGEMENT SERVICES DELINQUENCY MANAGEMENT ADMINISTRATION Task 1 Coordinate with the County each year and obtain a listing of delinquent parcels for each bonded assessment district and community facilities district which have not paid their assessments by. December 10. This report is available approximately one (1) month after the December 10 payment due date. Task 2 Prepare a Delinquency Report identifying all parcels which have not paid their December installment. The report will be prepared in January of each year and include the assessor parcel number, property owner name, mailing address, situs address, delinquent installment amount and corresponding payment due date. Task 3 Prepare Delinquency Reminder Letters, approved by the. City and mail them to each property owner in January giving them 30 days to cure their delinquency. Task 4 Coordinate with the County each year and obtain a listing of delinquent parcels for each bonded assessment district which have not paid their assessments by April 10. This report is available approximately one (1) month after the April 10 payment due date. Task 5 Prepare an updated Delinquency Report identifying all parcels which have not paid their December and/or April installment: The report will be prepared in May of each year and include the assessor parcel number, property owner name, mailing address, situs address, delinquent installment amounts and corresponding payment due dates. Task 6 Prepare Delinquency; Reminder Letters, approved by the City and mail them to each property owner in May giving them 30 days to cure their delinquency. Task 7 Coordinate with the County each year and obtain a listing of delinquent parcels for each bonded assessment district which have not paid their assessments by July 1. This report will be requested in. July of each year. Task 8 Prepare Delinquency Demand Letters, approved by the City and mail them to each property owner in July giving them 30 days to cure their delinquency. Task 9 Prepare a Final Delinquency Report identifying all parcels remaining delinquent and their corresponding delinquent installment amounts. The report will be prepared in August of each year and include the assessor parcel number, property owner name, mailing address, situs address, delinquent installment amounts and corresponding payment due dates. Task 10 If required, coordinate with Legal Counsel and strip the delinquent assessments from the County's Secured Property Tax Roll. Assist Legal Counsel with the foreclosure process as necessary. Page 28 Task 11 Francisco & Associates will prepare a Ili-annual delinquency report identifying the parcels within each district remaining delinquent and their staus:of delinquency (e.g. on a payment plan, pursuing foreclosure, etc.) CITY. COUNCIL RESOLUTIONS & AGENDA REPORTS In addition to the tasks listed above, Francisco & Associates will prepare, or assist in the preparation of, resolutions and City Council agenda reports pertaining to the districts that Francisco & Associates currently administers, as well as for any future district formations and annexations that Francisco & Associates will oversee These tasks will be included in the separate task assignments for each district or annexation. Page 29 EXHIBIT A (continued) FRANCISCO & ASSOCIATES, INC. SCOPE OF SERVICES V. CASH FLOW ANALYSIS SERVICES PROJECT INVOICE AND. CASI-I FLOW ADMINISTRATION Task 1 Coordinate with the City staff, Trustee and other members of the project team on a monthly basis to ensure all invoices associated with each financing district has the required Tax Certificates and that the proposed expenses are coded to each district/fund correctly prior to final payment. Task 2 Preparea bi- annual fund balance /expenditure report for each district/fund in April and October of each year to verify that all revenues and expenditures were coded correctly. If there are any inconsistencies with cash flow coordinate with the City staff, Trustee and other members of the project team to rectify the inconsistency. Services additional to those described in this Scope of Services will be provided upon written authorization on a time and materials basis, in accordance with the Schedule of Hourly Rates current at the time of providing the services or on a lump sum fee basis, as negotiated. Additional Services may include any other services desired and authorized by the City, including additional formations and /or administration of new assessment districts. - I Page 30 EXHIBIT 13 FEE FOR SERVICES I. ANNUAL ADMINISTRATION LANDSCAPE AND STREET LIGHTING DISTRICTS The following are Francisco & Associates' annual lump sum fixed fees for the administration of the City's Landscape and Street Lighting Districts, by district: Citywide Landscape and Street Lighting District — Francisco & Associates will maintain the fee charged since 1998, at $27,000. Landscape and Street Lighting District No. 1 — The fee for this district will be based on the number of parcels within the district, charged at $3 per parcel. Assessed District Parcels Fee Citywide LLMD 22,858. $27,000 LLMD No. 1 3,110 $9,330 $36,330 II. ANNEXATION OF TERRITORY INTO LANDSCAPE AND STREET LIGHTING DISTRICT NO. 1 District Formation $4,700 lump sum 1II.1913/1915 ACT ASSESSMENT DISTRICT ADMINISTRATION The following is our estimated fee schedule for the annual administration of the Bonded. Assessment Districts. - The final Invoice will reflect the true number of parcels that were administered. Assessment District Administrative Services Assessment District Services $16.00 per parcel within the District FY 2011 -12 Estimated District No. of Parcels Fe AD 86 -1R (Northwest Sewer) 154 $2,464 AD 90 -1A (Sununerhill) 612 $9,792 AD 93 -1R (Canyon HMs) 2,294 $36,704 $48,960 Prepayment Calculations $100 Charge to Requestor if requesting more than one payoff. Continuing Disclosure Reports $1,300 /assessment district $200 /material report Page.31 The follow is our lump sum rate schedule for Assessment Segregation Services.. Assessment Segregations Fe e Per Segregation $1,800 Plus Mapping Costs $25.00 /parcel (first 20 parcels) $15.00 /parcel each parcel over 20` Reimbursable expenses such as mileage, overnight mail, County Fees, County Assessor maps, Secured Property Tax Roll, bluelines, mylars, etc. are included in the lump sum fees. IV. DELINQUENCY ADMINISTRATIVE SERVICES Delinquency Administration Delinquency Reminder Letter Hourly Delinquency Demand letter Hourly Effect Removal from Tax Roll Hourly Preparation of Bi- Annual Report Hourly:: V PROJECT INVOICE AND CASH FLOW ADMINISTRATION Tax Certificate /Invoicing Hourly Cash Flow /Fund Balance Reporting Hourly VI. ADDITIONAL SERVICES If additional Services are requested by the City they could be performed for an agreed lump sum or billed at the following hourly rates. Principal Engineer $180/hr. Project Manager $150/hr. Project Engineer $135/hr. Senior Financial Analyst $ 100 /hr. Financial Analyst $85/hr. Word Processing $65/hr. Page 32 • • • Attachment No. 3 • Page 33 EXHIBIT A HARRIS & ASSOCIATES SCOPE OF SERVICES I. ANNUAL ADMINISTRATION COMMUNITY FACILITIES DISTRICTS CFD ANNUAL SPECIAL TAX ROLL UPDATE Research and Data Gathering , Task 1. Update all Assessor Parcel listings to reflect the County Assessor's Roll' as defined by the Rate and Method of Apportionment. Task 2. Identify and secure from the. County, Developers and Builders the data required to develop and update working files for the current year. This includes: a: Identify and secure copies of all Final Tract maps for residential development within CFD. b. Identify and secure copies of all building permits for residential and non- , residential development within the CFD. , Task 3. Update the CFD database with data procured in Task 2. Task 4 Determine the amount of funds required, current fund balances, allocation for delinquencies, and administrative charges required for special tax computations. Task 5. Apportion special taxes as defined by the Rate and Method of Apportionment. Task 6. Prepare draft agenda report and resolutions for the City Council meeting to approve the Annual Special Tax levy, for review by City staff. Task 7. Support City staff during council meeting for approval and setting of the Annual Special Tax. Prepare and Submit Special Tax Levy Task 8. Compile and transmit a complete list of the identified special tax levies for each assessor parcel within the CFD to the County Auditor - Controller, via compact disc or other County approved: media, prior to County deadline. Task 9. Following acceptance of the data and confirmation of parcels by County, prepare and submit any parcel corrections, computation for special tax, or updates of the Annual Special Tax Roll, requested by the County. C:\ Users\ david. CEQA \AppData\local\MicrosoftlWindows \Temporary Internet Files\ Content .Outlook 7X0UC3C31Special Tax Consultant scope of services 2012 (HA) revised.doc Page 34 GENERAL YEAR -ROUND ADMINISTRATION , Property Owner Inquiries Task 10. Assist in responding to inquiries from property owners regarding special tax levies and other CFD matters on an ongoing basis during the year as required. Report periodically to the City about the source, frequency and nature of inquiries received. CFD Year End Reports Task 11. After completion and acceptance of Annual Special Tax Roll, prepare a year-end report consisting of data drawn from areas defined in the Rate and Method of Apportionment. Standard areas covered are presented below:. a. Development Status: Number of residential properties and square footage of commercial: and industrial properties developed, current assessed valuation of developed and undeveloped properties, and number of sales and prices of properties sold in the; prior year. b. Capital Projects Status: A progress report on construction activity (status of individual projects included in the Notice of Special Tax) and Fund balances on CFD construction accounts. c.. CFD Financial Status: Reserve Fund balance, Capitalized Interest Fund balance, tax delinquency rates, foreclosure actions initiated by the CFD to remedy special tax delinquencies, number of actions and dollar amount of delinquencies, outstanding principal and interest amounts, and debt authorization levels. Task 12. Prepare draft agenda report for the City Council meeting to receive and file the CFD Year End Reports, for review by City staff. 13. Support City staff during council meeting. ADDITIONAL SERVICES Services additional to those described in this Scope of Services will be provided upon written authorization on a time and materials basis, in accordance with the Schedule of Hourly Rates current at the time, of providing the services or on a lump sum fee basis, as negotiated. Additional Services may include any other services desired and authorized by the City, including additional formations and /or administration of new CFDs. RESPONSIBILITIES OF THE CITY • Provide necessary maps, documents, and fund amounts required to establish special tax. • Set and schedule meetings, transmit data and review documents in a timely manner to facilitate progress. • Provide envelopes and postage to mail delinquency notices. C: \Usersldavid.CEQA\AppDatalLocal \Microsoft\Windows \Temporary Internet Files\ Content .Outlook17X0UC3C3\Special Tax Consultant scope of services 2012 (HA) revised.doc Page 35 EXHIBIT A (continued) HARRIS & ASSOCIATES ' SCOPE OF SERVICES II FORMATION OF A MELLO -ROOS COMMUNITY FACILITIES DISTRICT DISTRICT FORMATION Task 1. Gather support data, cost estimates for entire project, current appraisal report, absorption schedule for building development based on building permit issuance, and an annualized schedule for public works of construction. Task 2. Coordinate with City staff, bond counsel, underwriter, financial consultant, property owner, design engineer and appraisal engineer, as needed for this project. Task 3. Review construction estimates of direct and indirect costs. Review the special tax allocation methodology and formulae to be applied. Task 4. Review estimates of annual direct and indirect costs for the improvements to be operated and maintained. Review the maximum annual cost for the improvements, and the special tax allocation methodology and formulae to be applied. Task 5. Prepare boundary map, with proper certifications for a Community Facilities District, and confirm delivery of specified quantities of mylars and bond copies of the boundary map. Task 6. Prepare the boundary for the District boundary and any improvement areas, if necessary. Task 7. Provide a description of improvements to be constructed through public financing under the proposed District and a description of improvements to be operated and maintained. Task 8. Prepare draft agenda report for the City Council meeting for Resolution of Intention (ROI) to form a Community Facilities District, for review by City staff. Task 9. Attend City Council meeting for the ROI to form a Community Facilities District. Task 10. Upon completion of City Clerk's signature, on the boundary map, transmit boundary map to the Riverside County Recorder for recordation. Recordation will occur within 15 days after the adoption of the Resolution of Intention. Task 11. Prepare CFD Report to reflect final public works of construction facilities, their costs, incidental expenses and projected financing costs as supplied by others, and the facilities to be operated and maintained, their costs and administrative expenses. Furnish specified quantities of the final CFD Report as ordered by the City.' In summary the report will include as requested by the Act: o A Description of the District • A Description of Facilities • Cost Estimates • A list of Property Owners C: \Users \david.CEQA.AppData\ Local \Microsoftlwindows \Temporary Internet Files \Content.Outlook\7X0UC3C3 \Special Tax Consultant scope of services 2012 (HA) revised.doc Page 36 Task 12. Prepare draft agenda report for the City Council meeting for the public hearing, for City staff review. Task 13. Attend public hearing for Resolution of Formation and election. Task 14. Upon receipt of the Notice of Special Tax from the City's Bond Counsel, coordinate getting the City Clerk's signature with notary and transmit Notice of Special Tax to the Riverside County Recorder's office for recordation. Task 15. Prepare draft agenda report for the City Council meeting to adopt, the ordinance to levy the special taxes, for City staff review: BOND ISSUANCE Task 16. Prepare tables required by City and City's Financial Advisor for the preliminary official statement for the bonds. Task 17. Review the preliminary official statement for consistency with the Rate and Method of Apportionment of Special Taxes and the CFI) Report. Task 18. Provide the required Certificate of the Special Tax Consultant. ACQUISITION AUDIT The acquisition audit will be conducted in accordance with the provisions of the Acquisition Agreement between the City and the. Developer. Task 19. Collect copies of contracts, agreements, change orders, invoices, and canceled checks from developer, bound per vendor. Task 20. Review developer provided data for reimbursement eligibility and confirmed cost amounts. Task 21. Submit a summary report identifying reimbursement eligibility and confirmed cost amounts to the City. Task 22. Meet with the developer on a monthly basis to review construction progress and change orders. RESPONSIBILITIES OF THE CITY • City to designate a responsible official to manage and coordinate the project. • City shall make available to Harris all, available data, information, reports, maps, plans, specifications, cost estimates and other reasonable information for the proper, performance for Harris' services. • City shall provide (by developer) cost estimates and electronic map files in AutoCAD format of the development plan and proposed improvements. • City shall prepare (by bond counsel), all notices pertaining to the public hearings and post all notices pertaining to the public hearings. C.\Users \david.CEQAAAppData\ Local \Microsoft\Windows\Temporary Internet Files \ Content , Outlook \ 7X0003C31Special Tax Consultant scope of services 2012 (HA) revised.doc Page 37 • City shall cause to be published all notices of public hearings or other meetings (Le., newspaper and posting): • City (by bond counsel) shall prepare all resolutions required by City Council. • All environmental documentation will be provided by others. • City shall retain a qualified real estate appraiser to provide appraised values of the property included in the formation and annexation process, as required. • City shall schedule and agendize City meetings and hearings as required under the Act. C: \Users\david.CEQA'AppData\LocaI Microsoft \WindowslTemporary Internet Files\ Content .Outlook\7X0UC3C31Special Tax Consultant scope of services 2012 (HA) revised.doc Page 38 EXHIBIT A (continued) HARRIS & ASSOCIATES SCOPE OF SERVICES III. ANNEXATION OF TERRITORY INTO AN EXISTING SERVICES" CFD RATE AND METHOD OF TAXATION Task 1. Coordinate with Project Team (City staff, special counsel, and property owners) as needed for this project. Task 2. Prepare boundary map, with proper certifications for a Community Facilities District, and confirm delivery of specified quantities of mylars and bluelines of the boundary map to the County Recorder's Office for recordation after the Resolution of Intention. Task 3. Review the legal description for the District boundary. Task 4. • Provide a description of improvements to be operated and maintained. Task 5. Prepare all resolutions required by City Council. Task 6. Prepare all staff reports required by City Council. Task 7. Attend City Council meeting for Resolution of Intention (ROI) to annex territory to a Community Facilities District. Task 8. Prepare CFD Report'to reflect facilities to be operated and maintained, their costs and administrative expenses. Furnish specified quantities of the final CFD Report as ordered by the City. In summary the report will include as requested by the Act: • A Description of the District • A Description of Facilities • Cost Estimates • A list of Property Owners Task 9. Attend public hearing for Resolution of Annexation and election. Task 10. Assist with the preparation and recording of the Notice of Special Tax. RESPONSIBILITIES OF THE CITY • City to designate a responsible official to manage and coordinate the project. • City shall make available to Harris all available data, information, reports, maps, plans, specifications, cost estimates and other reasonable information for the proper performance for Harris' services. • City shall provide (by developer) cost estimates, a legal description of the proposed boundary, and electronic map files in AutoCAD format of the development plan and proposed improvements. • City shall prepare and post all notices pertaining to the public hearings. • City shall cause to be published all notices: of public hearings or other meetings (Le., newspaper and posting). • All environmental documentation will be provided by others. • City shall schedule and agendize City meetings and hearings as required under the Act. C:1 Users \david.CEQA\AppData\Local\ Microsoft\Windows \Temporary Internet Files \ Content. Outlook \7X0UC3C3 \Special Tax Consultant scope of services 2012 (HA) revised.doc Page 39 EXHIBIT A (continued) HARRIS & ASSOCIATES SCOPE OF SERVICES IV. ADDITIONAL SERVICES DEVELOPMENT REVIEW FOR CONDITIONS OF APPROVAL Harris will review the planning applications received for new developments and will prepare draft Conditions of Approval for the Department of Administrative Services. Conditions will be prepared in a Microsoft Word format and transmitted directly to the City's planner assigned to each application. The City will transmit copies of the planning applications to Harris in a timely! manner. Hams will return the comments back by the City's deadline. CONTINUING DISCLOSURE REPORTS Harris will prepare the required annual continuing disclosure reports for each of the CFD bonds, per the requirements on the continuing disclosure agreement the City entered into when the bonds were issued. Any required fund balance information is to be provided by the City or the City's Fiscal Agent to Harris. Task 1 Prepare the Annual Continuing Disclosure Report and respond to secondary information requirements set forth in SEC Section 15c2 -12, as amended and SEC Section 10b -5. Task 2 Prepare Notice of Material /Significant Events if any of the following events occur. • Principal and interest payment delinquencies. • Non- payment related defaults. • Modifications to rights of bond holders • • Optional, contingent or unscheduled bond calls. ▪ Defeasances. • Rating changes. • Adverse tax opinions or events affecting the tax exempt status of bonds. • Unscheduled draws on the debt reserves reflecting financial difficulties. • Unscheduled draws on the credit enhancements reflecting financial difficulties. • Substitution of the credit or liquidity providers or their failure to perform. • Release, substitution or sale of property securing repayment of bonds. CDIAC MELLO -ROOS YEAR END FISCAL STATUS REPORTS Harris will prepare the California Debt & Investment Advisory Commission ( CDIAC) Mello- Roos Year End Fiscal Status Reports for each of the CFD bond issues. The Reports will be C3 Users \david.CEQA1AppData\ Local \Microsoft\Windows1Temporary Internet Files\ Content.Outlook \X0UC3C3\Special Tax Consultant scope of services 2012 (HA) revised.doc Page 40 submitted prior to the annual October 31 deadline. City shall provide to Harris the CDIAC number and password assigned to each bond issue for filing the Report via the CDIAC website. CITY COUNCIL RESOLUTIONS& AGENDA REPORTS In addition to the tasks listed above, Harris will prepare, or assist in the preparation of, resolutions and City Council agenda reports pertaining to the districts that Harris currently administers, as well as for any future district formations and annexations that Harris will oversee. These tasks will be included in the separate task assignments for each district or annexation. Services additional to those described in this Scope of Services will be provided upon written authorization on a time and materials basis, in accordance with the Schedule of Hourly Rates current at the time of providing the services or on a lump sum fee basis, as negotiated. Additional Services may include any other services desired and authorized by the City, including additional formations and /or administration of new CFDs, assessment districts, impact fee or other services as requested by the City. C:\ Users\ david. CEQA \AppData \LocalMicrosoft\Windows \Temporary Internet Files \ Content: Outlook\TXOt1C3C3\Special Tax Consultant scope of services 2012 (HA) revised;doc Page 41 �EXIIIBIT B FEE FOR SERVICES I. ANNUAL ADMINISTRATION OF CFDs The following is Harris & Associates' annual lump sum fixed fee for the administration of the City's: Community Facilities Districts, by,district: For the City's CFDs formed prior to 2000, Harris will maintain the fees that have been charged in the past. These are: CFD 88 -3 (West Lake Elsinore) $13,500 CFD 90 -2 (Tuscany Hills) $13,500 CFD 95 -1 (Civic Center) $5,000 CFD 98 -1 (Summerhill) $7,000 For all CFDs formed after 2002, Harris' administration fee will be $16 per parcel within the CFD, with a minimum fee of $5,000. Based on this, the following would be the maximum estimated fees for the current CFDs formed after 2002, based on the expected build -out in each CFD: Approximate No. Estimated District Parcels .Maximum Fee CFD 2003- 2IA- A' (Canyon 'Hills) 594 $9,504 CFD 2003 -2 1A -B (Canyon Hills) 1,478 $23,648 CFD 2003 -2 IA -C (Canyon Hills) 450 $7,200 CFD 2003 -2 IA -D (Canyon Hills) 716 $11,456 CFD 2004 -3 IA -1 (Rosetta Canyon) 509 $8,144 CFD 2004-3 IA -2 (Rosetta Canyon) 563 $9,008 CFD 2005 -1 (Serenity) 233 $5,000 CFD 2005 -2 IA -A (Alberhill Ranch) 442 $7,072 CFD 2005 -2 IA -B ( Alberhill Ranch) 482 $7,712 CFD 2005 -2 IA -C (Alberhill Ranch) 257 $5,000 CFD 2005 -4 (Lakeview Villas) 50 $5,000 CFD 2005 -5 (Wasson Canyon) 191 $5,000 CFD 2005 -6 (City Center) 144 $5,000 CFD 2006 -1 IA -A (Summerly) 214 • $5,000 CFD 2006 -1 IA -B (Summerly) 368 $5,888 CFD 2006 -1 IA -C (Summerly)' 323 $5,168 CFD 2006 -1 1A -D (Summerly) 296 $5,000 CFD 2006 -1 IA -E (Summerly); 133 $5,000 CFD 2006 -1 IA -F (Summerly) 139 $5,000 CFD 2006 -2 (Viscaya) 168 $5,000 CFD 2006 -3 (La Strada) 128 $5,000 CFD 2006 -4 (Tract 30698 & 32129) 184 $5,000 CFD 2006 -6 (Tessera) 90 $5,000 CFD 2006 -8 (Running Deer Estates) 100 $5000 CFD 2006 -9 (Trieste) 121 $5,000 CFD 2006 -10 (Riverlake Villas) 51 $5,000 CFD 2007-4 (Makenna Court) 81 $5,000 ..- CFD 2007 -5 (Red Kite) 48 $5,000 $184,800 C:\ Users \david.CEQA1AppData\LocaI Microsoft\WindowsiTemporary Internet FilestContent .Outlook\7X0UC3C31Special Tax Consultant scope of services 2012 (HA) revised:doc Page 42 For the City's services CFDs, the fee will be based on $1.50 per parcel with a minimum fee of $5,000, as. follows: District Parcels Fee Police, Fire, Paramedic CFD 2003 -1 /2007 -1 4,319 $6,479 Parks, Open Space, Storm Drain CFD 2006 -5 541 $5,000 Parks, Open Space, Street Lighting CFD 2009 -1 340 $5,000 $16,479 II. FORMATION OF A MELLO -ROOS COMMUNITY FACILITIES DISTRICT The following are Harris & Associates' fees for the formation of a new community facilities district: District Formation /Bond Issuance Proposed CFD 500 units or less $15,000 lump sum Proposed CFD greater than 500 units! $25,000 lump sum Acquisition Audit Services Time & Materials based on Hourly Rate Schedule III. ANNEXATION OF TERRITORY INTO AN EXISTING SERVICES CFD District Formation $4,700 lump sum IV. ADDITIONAL SERVICES Development Review � p Time & Materials based on Hourly Rate Schedule Continuing Disclosure Reports $1,300 per Bond Issue, $200 per material report CDIAC Year End Status Report $200 per Bond Issue Other Additional Services As negotiated If additional Services are requested by the City they could be performed for an agreed lump sum or billed based on the hourly rates in effective at the time services are performed. Schedule of Hourly Rates (In Effect January 1, 2012 = December 31, 2012) Project Manager $180/hr. Senior Project Engineer $150/hr. Project Engineer $135/hr. Senior Project Analyst $110/hr. Project Analyst $85/hr. Word Processing $65/hr. Hourly rates may adjusted annually beginning January 1, 2013. C:1 Usersldavid :CEQA\AppData \Local\Microsoft \Windows \Temporary Internet Files \Content. Outlook \7XOUC3C31Special Tax Consultant scope of services 2012 (HA) revised:doc Page 43 1 • • I . • • • • • • • • • • • • 1. jl Attachment No..4 Page 44 LAW OFFICES OF SAMUEL NORBER Beverly Hills. Law. Building 424 South .Beverly Drive Beverly Hills, (California 90212 Direct - (310) 201 -9870 Fax - (310) 201 -9873 Main - (310) 553-8533 Email - snorber @earthlink.net October 20, 2011 Mr. James Riley City of Lake. Elsinore Lake Elsinore, California RE: DESCRIPTION AND COSTS OF ARBITRAGE REBATE COMPLIANCE SERVICES Dear Mr. Riley: The following is a ' description of the services I provide in connection the calculation of the arbitrage rebate with respect to a tax-exempt financing, and the cost of such services. For each tax - exempt financing, I provide the following services: (1) Calculate the yield of the tax - exempt obligations. (2) Determine whether the financing qualifies for an exception from rebate. (3) Calculate the excess investment earnings within the legally permitted time period. !: (4) Deliver appropriate documentation required to support the calculations (5) Provide an executive summary describing the method used, major assumptions; conclusions and any recommendations for changes in record keeping for investments. (6) Provide a legal opinion that the rebate calculation results are in compliance with the rebate regulations. (7) Complete Form 8038T if necessary every 5th year and when the obligations are completely retired and provide instructions relative to filing and paying the liability. (8) Assist the issuer (and conduit borrower, if any) in explaining the calculations and responding to questions, in the event of an IRS inquiry. (9) Provide consultation to the issuer's staff as necessary regarding matters related to the rebate provisions. (10) Provide assistance and consultation as necessary to retain records and documentation at least three years after the issue's final maturity. 11 Provide three (3) copies of my report. With respect to documentation, I like to start with the following documents. 11129301 Page 45 LAW OFFICES OF SAMUEL NORBER Mr. James Riley October 20, 2011 Page 2 (1) The tax certificate for the transaction. Sometimes this is called the " Nonarb i trage Cert or "No Arbitrage Certificate ", and sometimes there is a second document called the "Use of Proceeds Certificate." (2) Form 8038 or 8038G, as applicable. (3) The final Official Statement. This will enable me to compute, or verify, the arbitrage yield, if the transaction is made up of fixed rate bonds. If the transaction involves variable rate bonds, I will also need statements showing the interest payments- which were made during the computation period. (4) For a refunding transaction, the verification report (if', one has been prepared). (5) Trustee statements for every fund which contains bond proceeds during the computation period. These typically include funds with names like: (1) "Costs of. Issuance Fund" or "Delivery : Costs Fund ", (2) "Project Fund" or "Construction Fund ", and (3) "Reserve Fund (6) Trustee reports for the fund (or funds) which are used for the payment of debt service. This may be referred to as: the "Debt Service Fund," "Bond Fund," or may be made up of an "Interest Fund" and "Principal Fund." (7) A copy of the document index from the transcript for the financing. This enables me to tell if there is some other useful document. Obviously, as I' review these documents and the index to the transcript, it `. is possible that I will request some other document. My fees for these services, which are described below, depend on whether the rebate calculation is for a single year, or for multiple years. In addition, there is an initial one- time setup fee for the first rebate calculation for each financing. With respect to an annual rebate calculation, the costs for the services described above are as follows: (1) One -time Setup Fee $ 500 (2) Annual Rebate Calculation and Report 1,500 Thus, the first year's total cost for each tax-exempt issue is $2,000, and each subsequent year's cost is $1,500. H 12930 - Page 46 LAW OFFICES OF SAMUEL NORBER Mr. James Riley October 20, 2011 Page 3 With respect to a single, 5 -year rebate calculation, the costs for the services described above are as follows: (1) One -time Setup Fee $ 500 (2) 5 -Year Rebate Calculation and. Report 2,500 Thus, the cost of the first 5 -year calculation is $3,000, and the cost of each subsequent 5 -year calculation is $2,500. . Please feel free to call me with any questions, or if you need additional information. Very truly yours, Samuel Norber of the LAW OFFICES OF SAMUEL NORBER , I 11129301 Page ;