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HomeMy WebLinkAbout08 CSA FOR DAVID TAUSSIG & ASSOCIATES• ~ DA REPORT Agenda Item 8 AG N Reviewed: Finance Director MEETING DATE: JANUARY 4, 2011 TO: HONORABLE CHAIRMAN AND AGENCY BOARD MEMBERS VIA: DAVID C. BIGGS, AGENCY EXECUTIVE DIRECTOR FROM: CHRISTINE SHINGLETON, ASSISTANT CITY MANAGER SUBJECT: CONSULTANT SERVICES AGREEMENT WITH DAVID TAUSSIG & ASSOCIATES FOR PROFESSIONAL CONSULTANT SERVICES FOR THE TUSTIN LEGACY PROJECT SUMMARY Approval is requested for a Consultant Services Agreement (CSA) to provide professional services to assist the Agency in estimating community facilities district supportable bonded indebtedness for each phase of future development at Tustin Legacy (the Project) in conjunction with refinement and revisions of the City's disposition and business strategy for the Project and also for an update to the Tustin Legacy Backbone Infrastructure Program. RECOMMENDATION It is recommended that the Tustin Community Redevelopment Agency authorize the Executive Director or Assistant City Manager to execute the attached CSA with David Taussig & Associates, subject to any non-substantive modifications as may be deemed necessary by the City Attorney prior to execution of the Agreement. FISCAL IMPACT As the City Council was previously informed in June and September of 2010, it was expected that the Redevelopment Agency would incur expenses for activities associated with revision of the City's disposition and business strategy for the Tustin Legacy Project, including but not limited to, necessary financial analysis, market analysis, legal consultation, real estate surveys, subdivision mapping and engineering services, land use planning and design and other expenses. Support for refinement of the disposition and business strategy for the Tustin Legacy project is an acceptable use of MCAS Tustin Redevelopment funds. January 4, 2011 Consultant Services Agreement -Taussig Page 2 As currently proposed, the services for David Taussig & Associates shall not exceed $47,500. There was $70,000 included in the Agency's FY 2010-11 Budget for fiscal consultant services; no additional appropriations will be necessary. BACKGROUND At the City Council/Agency meeting of September 7, 2010, Agency staff identified the need to obtain additional consultant support for development of the revised disposition and business strategy for the former Master Development footprint at Tustin Legacy. Given the highly complex nature of the Project and the recent economic and real estate market conditions, it was pointed out that the engagement of a number of outside consultant firms with specific expertise in a variety of development, design, finance, and real estate related disciplines would assist the Agency in the preparation of a viable business strategy. One anticipated need for outside services included the need for evaluation and testing of what the potential Community Facilities District (CFD) burden might be and proceeds generated from future CFD's that would be issued to support a portion of infrastructure construction and costs of providing services to new development by phase and recommendations about the impact on product pricing and land values. In addition, it was expected that an update to the Tustin Legacy Backbone Infrastructure Fair Share Program would also be necessary as part of the refinement of the disposition and business strategy for the Project. The Tustin Legacy Backbone Infrastructure Fair Share Program was adopted by the City Council originally in 2006 and subsequently updated in 2008. The Tustin Legacy Backbone Infrastructure Program was established in response to provisions of the MCAS Tustin Final Environmental Impact Statement/Environmental Impact Report ("Final EIS/EIR), as subsequently supplemented and amended, which requires all applicants for private development at Tustin Legacy to enter into an agreement to establish, on a pro-rated or fair-share basis, each development area's required construction obligation or financial contribution toward development of Tustin Legacy Backbone Infrastructure. Based on the Final EIS/EIR, it was determined that development at Tustin Legacy would contribute to the need for certain backbone infrastructure located -both on and off the site including, but not limited to, roadway improvements, traffic and circulation mitigation, water and sewer improvements, storm drains and flood control channels, water quality requirements, retention and detention basins, and utility backbone systems (electricity, gas, cable, telecommunications, etc.), park, open space, and community facilities, and other environmental mitigation requirements related to new development. Attached is a CSA with David Taussig & Associates, Inc. (DTA). DTA is a national public finance and urban economics consulting firm with offices in Newport Beach, January 4, 2011 Consultant Services Agreement - Taussig Page 3 Riverside, and San Francisco, California, as well as in Chicago and Dallas. Since its establishment in 1985, the firm has specialized in financing public infrastructure, facilities and services for public agencies and private clients throughout the United States. The firm has vast knowledge of the Tustin Legacy project, having provided financial services to the City in preparation of the Tustin Legacy Backbone Infrastructure Program Fair Share Program, financial services related to all CFD's previously issued by the City at Tustin Legacy, in addition to being a team member on the Redevelopment Agency's recent November MCAS Tustin Tax Allocation Bond issuance. There are very few firms providing the quality of services provided by DTA. Procuring the services of this firm will benefit the Tustin Legacy Project in time and cost savings and would be the most cost efficient approach given the steep learning curve needed for gaining expertise regarding the Project. Going through an open solicitation process would result in the Agency largely having to pay to educate new firms regarding the complexities of the Tustin Legacy Project. In addition to providing input on potential CFD proceeds that might be possible in the future from proposed development within the Master Developer footprint, DTA's scope of work will involve a number of other tasks, including: • Assisting the Agency in updating the Tustin Legacy Backbone Infrastructure Fair Share Program based on updated parcel information. This will include an additional nexus description and potential modifications to land use information contained in the original program. • Preparing an alternative analysis that South Orange County Community College District (SOCCCD) has asked the Agency to develop as part of its update of the Tustin Legacy Backbone Infrastructure Fair Share Program. The alternative analysis would examine certain land use scenarios that SOCCCD is preparing for its ATEP Site, should it decide to purse development of a portion of its site for private development uses. This will assist in identifying what SOCCCD's potential Fair Share contributions for private development would be on the ATEP Site. • Participation in team meetings and presentations for the refinement and modification of a disposition and business strategy for Tustin Legacy. January 4, 2011 Consultant Services Agreement - Taussig Page 4 Staff will be prepared to respond to any questions that the City Council might have. Approved for Forwarding By: ._ ~` ,~~ Christine Shingleton Assistant City Manag Dav' .Biggs, City anager Attachment: Consultant Services Agreement CONSULTANT SERVICES AGREEMENT This Agreement for Consultant Services (herein "Agreement"), is made and entered into by and between the TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and politic, ("Agency"), and David Taussig & Associates, Inc. ("Consultant"). WHEREAS, Consultant is qualified to provide the necessary services and has agreed to provide such services; and WHEREAS, Agency has identified a Scope of Services, a copy of which is attached hereto as Exhibit "A", and is by this reference incorporated herein as though set forth in full hereto (the "Scope of Services"). WHEREAS, Consultant is qualified to provide the necessary services, and has been selected because of its extensive related experience and familiarization with the Tustin Legacy Project and has agreed to provide services to the Agency. NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein, Agency agrees to employ and does hereby employ Consultant and Consultant agrees to provide consulting services as follows: 1. SERVICES OF CONSULTANT 1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, Consultant shall provide those services specified in the "Proposal and Scope of Services" attached hereto as Exhibit "A" and incorporated herein by this reference, (the "services" or the "work"). Consultant warrants that all services shall be performed in a competent, professional and satisfactory manner in accordance with all standards prevalent in the industry. In the event of any inconsistency between the terms contained in Exhibit "A" and the terms set forth in the main body of this Agreement, the terms set forth in the main body of this Agreement shall govern. 1.2 Compliance with Law. All services rendered hereunder shall be provided in accordance with all laws, ordinances, resolutions, statutes, rules, and regulations of the City of Tustin and Tustin Community Redevelopment Agency and of any federal, state or local governmental agency of competent jurisdiction. 1.3 Licenses and Permits. Consultant shall obtain at its sole cost and expense such licenses, permits and approvals as may be required by law for the performance of the services required by this Agreement. 1.4 Familiarity with Work. By executing this Contract, Consultant warrants that Consultant (a) has thoroughly investigated and considered the work to be performed, (b) has investigated the site of the work and become fully acquainted with the -1- conditions there existing, (c) has carefully considered how the work should be performed, and (d) fully understands the facilities, difficulties and restrictions attending performance of the work under this Agreement. Should the Consultant discover any latent or unknown conditions materially differing from those inherent in the work or as represented by the Agency, Consultant shall immediately inform Agency of such fact and shall not proceed with any work except at Consultant's risk until written instructions are received from the Contract Officer. 1.5 Care of Work. Consultant shall adopt and follow reasonable procedures and methods during the term of the Agreement to prevent loss or damage to materials, papers or other components of the work, and shall be responsible for all such damage until acceptance of the work by Agency, except such loss or damages as may be caused by Agency's own negligence. 1.6 Additional Services. Consultant shall perform services in addition to those specified in the Proposal when directed to do so in writing by the Contract Officer, provided that Consultant shall not be required to perform any additional services without compensation. Any additional compensation not exceeding $10,000 must be approved in writing by the Contract Officer. Any greater increase must be approved in writing by the Executive Director. 1.7 Special Requirements. Any additional terms and conditions of this Agreement are set forth in Exhibits "B", "C" and "D" and are incorporated herein by this reference. In the event of a conflict between the provisions of Exhibit "B", "C" and "D" and any other provision or provisions of this Agreement, the provisions of Exhibit A shall govern. 2. COMPENSATION 2.1 Compensation of Consultant. For the services rendered pursuant to this Agreement, the Consultant shall be compensated and reimbursed only such amounts as are prescribed in Exhibit "C", in an amount not to exceed Forty Seven, Five Hundred Dollars ($ 47,500). 2.2 Method of Payment. In any month in which Consultant wishes to receive payment, Consultant shall no later than the first working day of such month, submit to Agency in the form approved by Agency's Director of Finance, an invoice for services rendered prior to the date of the invoice. Agency shall pay Consultant for all expenses stated thereon which are approved by Agency consistent with this Agreement, no later than the last working day of said month. 2.3 Changes. In the event any change or changes in the work is requested by Agency, the parties hereto shall execute an addendum to this Agreement, setting forth with particularity all terms of such addendum, including, but not limited to, any additional Consultant's fees. Addenda may be entered into: -2- A. To provide for revisions or modifications to documents or other work product or work when documents or other work product or work is required by the enactment or revision of law subsequent to the preparation of any documents, other work product or work; B. To provide for additional services not included in this Agreement or not customarily furnished in accordance with generally accepted practice in Consultant's profession. 2.4 Payment for Changes. Changes approved pursuant to an Addendum shall be compensated based on a time and materials amount and at the personnel hourly rates identified in either Attachment 1 or Attachment 2 to Exhibit "A",as applicable, or a not to exceed amount as determined in writing by the parties. 3. PERFORMANCE SCHEDULE 3.1 Time of Essence. Time is of the essence in the performance of this Agreement. 3.2 Schedule of Performance. All services rendered pursuant to this Agreement shall be performed within any time periods prescribed in any Schedule of Performance attached hereto as Exhibit "D". The extension of any time period specified in or pursuant to Exhibit "D" must be approved in writing by the Contract Officer. 3.3 Force Majeure. The time for performance of services to be rendered pursuant to this Agreement may be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of the Consultant, including, but not restricted to, acts of God or of a public enemy, acts of the government, fires, earthquakes, floods, epidemic, quarantine restrictions, riots, strikes, freight embargoes, and unusually severe weather if the Consultant shall within ten (10) days of the commencement of such condition notify the Contract Officer who shall thereupon ascertain the facts and the extent of any necessary delay, and extend the time for performing the services for the period of the enforced delay when and if in the Contract Officer's judgment such delay is justified, and the Contract Officer's determination shall be final and conclusive upon the parties to this Agreement. 3.4 Term. Unless earlier terminated in accordance with Section 7.7 of this Agreement, this Agreement shall continue in full force and effect until satisfactory completion of the services but not exceeding one (1) year from the date hereof, unless extended by mutual written agreement of the parties. 4. COORDINATION OF WORK 4.1 Representative of Consultant. The following Principal of the Consultant is hereby designated as being the principal and representative of Consultant -3- authorized to act in its behalf with respect to the work specified herein and make all decisions in connection therewith: David Taussig, President David Taussig & Associates, Inc. 1301 Dove Street, Suite 600 Newport Beach, CA 92660 Phone: (949) 955-1500 It is expressly understood that the experience, knowledge, capability and reputation of the foregoing Principal is a substantial inducement for Agency to enter into this Agreement. Therefore, the foregoing Principal shall be responsible during the term of this Agreement for directing all activities of Consultant and devoting sufficient time to personally supervise the services hereunder. The foregoing Principal may not be changed by Consultant without the express written approval of Agency. 4.2 Contract Officer. The Contract Officer shall be the Assistant City Manager of the City of Tustin unless otherwise designated in writing by the Executive Director of Agency. It shall be the Consultant's responsibility to keep the Contract Officer fully informed of the progress of the performance of the services and Consultant shall refer any decisions which must be made by Agency to the Contract Officer. Unless otherwise specified herein, any approval of Agency required hereunder shall mean the approval of the Contract Officer. 4.3 Prohibition Against Subcontracting or Assignment. The experience, knowledge, capability and reputation of Consultant, its principals and employees were a substantial inducement for the Agency to enter into this Agreement. Therefore, Consultant shall not contract with any other entity to perform in whole or in part the services required hereunder without the express written approval of the Agency. In addition, neither this Agreement nor any interest herein may be assigned or transferred, voluntarily or by operation of law, without the prior written approval of Agency. 4.4 Independent Contractor. Neither the Agency nor any of its employees shall have any control over the manner, mode or means by which Consultant, its agents or employees perform the services required herein, except as otherwise set forth herein. Consultant shall perform all services required herein as an independent contractor of Agency and shall remain at all times as to Agency a wholly independent contractor with only such obligations as are consistent with that role. Consultant shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of Agency. Consultant shall be solely responsible for compliance with State and Federal Law with respect to the wages, hours, benefits, and working conditions of its employees, including requirement for payroll deductions for taxes. Employees or independent contractors of Consultant are not Agency employees. -4- 5. INSURANCE /INDEMNIFICATION 5.1 Insurance. A. Consultant shall maintain in full force and effect during the term of these Agreement policies of commercial general liability and automobile liability insurance (each of which shall include property damage and bodily injury) and each with limits of at least $1,000,000 combined single limit coverage per occurrence. B. Consultant shall maintain in full force and effect during the term of this Agreement a policy of professional liability insurance coverage with lirnits of at least $1,000,000 combined single limit coverage per claim or per occurrence. C. Consultant shall carry and pay for such workers' compensation insurance as is required fully protect Consultant and its employees under California Worker's Compensation Insurance Law. The insurance company shall agree to waive all rights of subrogation against the Agency for losses paid under the policy, which losses arose from the work performed by the named insured. D. Other applicable insurance requirements are: (1) Name the Agency, its officials and employees as an additional insured on the commercial, general and automobile policies. (2) The insurance shall be issued by a company authorized by the Insurance Department of the State of California and rated A, VII or better (if an admitted carrier) or A-, X (if offered, by a surplus line broker), by the latest edition of Best's Key Rating Guide, except that the Agency will accept workers' compensation insurance rated B-VIII or better or from the State Compensation Fund. (3) The Insurance shall not be cancelled, except after thirty (30) days written prior notice to the Agency; and (4) The commercial general and automobile liability insurance shall each be primary as respects the Agency, and any other insurance maintained by the Agency shall be in excess of this insurance and not contribute to it. E. Upon execution of this Agreement, Consultant shall provide to Agency certificates of insurance and insurer endorsements evidencing the required insurance. Insurer endorsements (or a copy of the policy binder if applicable) shall be provided as evidence of meeting the requirements of Subsections (1), (3) and (4) of Section D above and the waiver of subrogation requirement in Section C above. If self- insured for worker's compensation, Consultant shall submit to Agency a copy of its certification of self-insurance issued by the Department of Industrial Relations. 5.2 Indemnification. The Consultant shall defend, indemnify and hold harmless the Agency, its officers and employees, from and against any and all actions, suits, proceedings, claims, demands, losses, costs, and expenses, including legal costs and attorneys' fees, for injury to or death of person or persons, for damage to property, including property owned by Agency, arising from errors and omissions of Consultant, its officers, employees and agents, and arising out of or related to Consultant's performance -5- under this Agreement, except for such loss as may be caused by Agency's sole negligence or that of its officers or employees. The Consultant shall also defend, indemnify and hold the Agency harmless from any claims or liability for Agency health and welfare, retirement benefits, or any other benefits of part-time or fulltime City employment sought by Consultant's officers, employees, or independent contractors, whether legal action, administrative proceeding or pursuant to State statue. 6. RECORDS AND REPORTS 6.1 Reports. Consultant shall periodically prepare and submit to the Contract Officer such reports concerning the performance of the services required by this Agreement as the Contract Officer shall require. 6.2 Records. Consultant shall keep such books and records as shall be necessary to properly perform the services required by this Agreement and enable the Contract Officer to evaluate the performance of such services. The Contract Officer shall have full and free access to such books and records at all reasonable times, including the right to inspect, copy, audit and make records and transcripts from such records. 6.3 Ownership of Documents. All drawings, specifications, reports, records, documents and other materials prepared by Consultant in the performance of this Agreement shall be the property of Agency and shall be delivered to Agency upon request of the Contract Officer or upon the termination of this Agreement, and Consultant shall have no claim for further employment or additional compensation as a result of the exercise by Agency of its full rights or ownership of the documents and materials hereunder. Consultant may retain copies of such documents for its own use. Consultant shall have an unrestricted right to use the concepts embodied therein. 6.4 Release of Documents. All drawings, specifications, reports, records, documents and other materials prepared by Consultant in the performance of services under this Agreement shall not be released publicly without the prior written approval of the Contract Officer. 7. ENFORCEMENT OF AGREEMENT 7.1 both as to validity State of California, in relation to this Orange, State of C covenants and ag such action. California Law. This Agreement shall be construed and interpreted and to performance of the parties in accordance with the laws of the Legal actions concerning any dispute, claim or matter arising out of or 4greement shall be instituted in the Superior Court of the County of alifornia, or any other appropriate court in such county, and Consultant ees to submit to the personal jurisdiction of such court in the event of -6- 7.2 Disputes. In the event of any dispute arising under this Agreement, the injured party shall notify the injuring party in writing of its contentions by submitting a claim therefore. The injured party shall continue performing its obligations hereunder so long as the injuring party cures any default within ninety (90) days after service of the notice, or if the cure of the default is commenced within thirty (30) days after service of said notice and is cured within a reasonable time after commencement; provided that if the default is an immediate danger to the health, safety and general welfare, the Agency may take immediate action under Section 7.6 of this Agreement. Compliance with the provisions of this Section shall be a condition precedent to any legal action, and such compliance shall not be a waiver of any party's right to take legal action in the event that the dispute is not cured. 7.3 Waiver. No delay or omission in the exercise of any right or remedy of anon-defaulting party on any default shall impair such right or remedy or be construed as a waiver. No consent or approval of Agency shall be deemed to waive or render unnecessary Agency's consent to or approval of any subsequent act of Consultant. Any waiver by either party of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of this Agreement. 7.4 Rights and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 7.5 Legal Action. In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, t:o obtain injunctive relief, a declaratory judgment or any other remedy consistent with the purposes of this Agreement. 7.6 Termination Prior to Expiration of Term. The Agency reserves the right to terminate this Agreement at any time, with or without cause, upon thirty (30) days written notice to Consultant, except that where termination is due to the fault of the Consultant and constitutes an immediate danger to health, safety and general welfare, the period of notice shall be such shorter time as may be appropriate. Upon receipt of the notice of termination, Consultant shall immediately cease all services hereunder except such as may be specifically approved by the Contract Officer. Consultant shall be entitled to compensation for all services rendered prior to receipt of the notice of termination and for any services authorized by the Contract Officer thereafter. 7.7 Termination for Default of Consultant. If termination is due to the failure of the Consultant to fulfill its obligations under this Agreement, Agency may take over the work and prosecute the same to completion by contract or otherwise, and the Consultant shall be liable to the extent that the total cost for completion of the services required hereunder exceeds the compensation herein stipulated, provided that the Agency -7- shall use reasonable efforts to mitigate damages, and Agency may withhold any payments to the Consultant for the purpose of set-off or partial payment of the amounts owed to Agency. 7.8 Attorneys Fees. If either party commences an action against the other party arising out .of or in connection with this Agreement or it subject matter, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs of suit from the losing party. 8. AGENCY AND CITY OFFICERS AND EMPLOYEES; NON-DISCRIMINATION 8.1 Non-Liability of Agency/City Officers and Employees. No officer or employee of Agency or City shall be personally liable to the Consultant, or any successor- in-interest, in the event of any default or breach by the Agency or for any amount which may become due to the Consultant or its successor, or for breach of any obligation of the terms of this Agreement. 8.2 Covenant Against Discrimination. Consultant covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination or segregation in the performance of or in connection with this Agreement regarding any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry. Consultant shall take affirmative action to insure that applicants and employees, are treated without regard to their race, color, creed, religion, sex, marital status, national origin, or ancestry. 9. MISCELLANEOUS PROVISIONS 9.1 Notice. Any notice, demand, request, consent, approval, or communication either party desires or is required to give to the other party or any other person shall be in writing and either served personally or sent by pre-paid, first-class mail to the address set forth below. Either party may change its address by notifying the other party of the change of address in writing. Notice shall be deemed communicated forty- eight (48) hours from the time of mailing if mailed as provided in this Section. To Agency: TUSTIN COMMUNITY REDEVELOPMENT AGENCY 300 Centennial Way Tustin, CA 92780 Attention: Assistant City Manager (Contract Officer) -8- To Consultant: David Taussig & Associates, Inc. 1301 Dove Street, Suite 600 Newport Beach, CA 92660 Attention: David Taussig, President 9.2 Integrated Agreement. This Agreement contains all of the agreements of the parties and cannot be amended or modified except by written agreement. 9.3 Amendment. This Agreement may be amended at any time by the mutual consent of the parties by an instrument in writing. 9.4 Severability. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Agreement, which shall be interpreted to carry out the intent of the parties hereunder. 9.5 Corporate Authority. The persons executing this Agreement on behalf of the parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said parties and that by so executing this Agreement the parties hereto are formally bound to the provisions of this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates stated below. "Agency" Dated: TUSTIN COMMUNITY REDEVELOPMENT AGENCY By: David C. Biggs Executive Director APPROVED AS TO FORM: Doug Holland City Attorney -9- "Consultant" DAVID TAUSSIG & ASSOCIATES, INC. By: David Taussig, President -10- EXHIBIT "A" "Scope of Work/Services" Attachment 1 -Update of Tustin Legacy Fair Share Backbone Infrastructure Program Attachment 2 -Community Facilities District Analysis EXHIBIT "A" ATTACHMENT 1 UPDATE OF TUSTIN LEGACY FAIR SHARE BACKBONE INFRASTRUCTURE PROGRAM DAVID PROPOSAL TO CITY OF TUSTIN FOR UPDATE OF TUSTIN LEGACY FAIR SHARE BACKBONE INFRASTRUCTURE PROGRAM DECEMBER 2U, 2010 Pt.tlTic h,inancc l~'~~cilitic~~ Pl~~rlr~il~ ~ ~r~l~~ril h:c.onumic~~ I~i~~~~r~~idc `~~tn I~z~~~rlcisct_} C;hica~~o 1)~~ll~~s UPDATE OF TUSTIN LEGACY FAIR SHARE BACKBONE INFRASTRUCTURE PROGRAM DECEMBER 2O, 2OIU Prepared for City of Tustin 300 Centennial Way Tusti~~, CA 92780 (714) 573-3000 Prepared by DAV1D TAUSSIG & ASSOCIA'CES, INC. 1301 Dove Street, Suite 600 Newport Beach, California 92660 (949) 955-1500 TABLE OF CONTENTS Section Pale L OBJECTIVE .....................................................................................1 IL SCOPE OF WORK ............................................................................1 III. FEE SCHEDULE ...............................................................................2 UPDATE OF TUSTIN LEGACY FAIR SHARE BACKBONE INFRASTRUCTURE PROGRAM SECTION I OBJECTIVE ANll STAF F ASSIGNMEN"TS In 2008, DTA provided to the City of Tustin (the "City"), in memorandum format with supporting spreadsheets, a financial model that allocated backbone infrastructure costs to the participating developers within the Tustin Legacy project (the "Project"). This study (the "Study") identified fair share cost allocations supported by a clear nexus between costs allocated and benefits received from the backbone improvements. At the request of the City, DTA has provided herein a proposal to update the previous Study to account for changes in infrastructure costs and projected development as currently projected for the Project. It is understood that the City will provide updated line item costs to be applied to all of the improvements, and well as any changes to anticipated land uses. DTA will then use these revised costs and land uses to prepare a new analysis and provide updated cost allocations. Steve Runk, DTA's Vice President of Engineering Services, will be the Project Manager. He will be assisted by Kuda Wekwete, who is an Associate level employee at DTA. SECTION II SCOPE OF WORK The Scope of Work consists of five major tasks, each of which includes numerous subtasks: TASK NO. 1 -MEET WITH CITY OF TUSTIN TO COLLECT UPDATED INFRAS"TRUC"TUBE COSTS The cost allocation study shall be updated based on increases in facilities costs, as well as changes in the land uses to be developed. The City will provide new facilities cost estimates on a line item basis and new land use data reflecting new development plans. DTA will then update the facility lists and estimated cost section of the Study. TASK NO. 2 -PERFORM AN UPDA"I'Ell ANALYSIS TO ALLOCATE BACKBONE INFRASTRUCTURE COSTS Using the same assumptions, demand variable criteria, demographics, ownership and basically the same spreadsheet models, D"hA will determine the new cost allocations by planning area number, as was provided in the previous Study. TASK NO.3 -PREPARE AN UPllA'1'Ell REPORT In memorandum format and organized in the same manner as the previous Study, DTA will summarize the above analysis, clearly identifying the new updated cost allocations. TASK NO. 4 -REPEAT TASKS 2 AND 3, WITH AN ADJUSTMENT FOR SOUTH ORANGE COUNTY City of Tustin December 20, 2010 Fair Share Backbone Lnfrastructtcre Program Update Pnge 1 COMMUNITY COLLEGE DISTRIC"1''S PROPOSF;D ALTERNATIVE LAND USES Revise backbone infrastructure cost allocations for Project based upon additional land use changes proposed by South Orange County Community College District ("SOCCCD") for its parcel, as provided to DTA by the City. Provide an addendum to the memorandum including revised tables and a brief explanation of the changes caused by the SOCCCD-proposed land uses. TASK NO.S -MEETINGS Attend two meetings with the City. The first shall be a data gathering meeting as described under Task I, above. The second shall include a presentation and discussion of the results of Tasks I -4. SECTION III FEE SCHEDULE DTA's proposed Fee Schedule for the tasks listed in the Scope of Work described in Section II shall not exceed $23,000 without prior authorization from The City of Tustin. This total includes $5,000 for changes to the two drafts that may be requested by the City or other interested parties after their completion and submital to the City, plus $3,000 for attendance at and preparation for the two meetings. All tasks shall be billed on a time and materials basis according to actual hours worked at the rates shown below: Fees for services shall be charged according to the following professional services fee schedule: David Taussig & Associates, Inc. Hourly Rates = 2011 President $285/Hour Vice President $230/Hour Senior Associate $180/Hour Associate $165/Hour Senior Analyst $ 145/Hour Analyst $125/Hour Research Assistant $ I OS/Hour In addition to fees for services, Client shall reimburse DTA for out-of-pocket and administrative expenses by paying a charge equal to 3`% of DTA's monthly billings for labor, plus clerical time @ $75 per hour, travel costs, and any outside vendor payments, not to exceed a total of $1,000. Invoices shall be submitted on a monthly basis and shall be due within thirty days thereafter. A late charge of 1.2 percent per month shall be charged on late payments. Limitations Any labor expenses totalling more than $5,000 in hourly billings for attendance at more than the two (2) meetings, detailed written responses to resolve disputes, or preparation of major revisions to the City of Tustin December 20, 2010 Fair Share Backbone Infrastructure Program Update Page 2 draft reports will be classified as Additional Work and require additional charges billed at hourly rates identified in the table above. Other examples of Additional Work, if not included in the $5,000 set aside for such work, shall include: 0 Additional analyses based on revised assumptions requested by the City, including possible changes in facility categories. 0 Additional research required of DTA for timely data collection if City is unable to provide data 0 Actual implementation of fee programs 0 Reproduction of more than ten (10) copies of technical memoranda or draft or final reports. All hourly rates for services apply fora 12 month period from execution of the agreement and are subject to acost-of-living increase every 7 2 mouths. J:APIZOPOSAL\AB1600ATustinA2011 Updatc.duc City of Tustin December 20, 2010 Fair Share Backbone /nfrastructure Program Update Page 3 EXHIBIT "A" ATTACHMENT 2 TUSTIN LEGACY COMMUNITY FACILITIES DISTRICT SPECIAL TAX CONSULTING SERVICES plzoY~sAr. ,~.o CIT~~ of ~T~~sTI FoH TUSTi:~ LFGAC:v 4M~IU\`I`I'1' FACtLI"PIES DISTF~ICT SPECIAL TAX ~.t~'~'SUI~'I"ItiG SEF2.~'ICE~S F.t'I'.VII3I~:R 2{~, 201 DAVID Tf1USS1G ~J & ASSOCIATES .. ~50C?t~ Birch Strut, Sia. 6~t7C~. Neati~:~ort Beach. CA 9"'~'~1 TUSTIN LEGACY COMMUNITY FACILITIES DISTRICT SPECIAL TAX CONSULTING SERVICES DECEmf3E Ii 20, 2010 Prepared for City of Tustin 300 Centennial Way Tustin, CA 92780 (714) 573-3000 Prepared by DAVID TAUSSIG & ASSOCIATES, INC. 1301 Dove Street, Suite 600 Newport Beach, California 92660 (949) 955-1500 City of Tustin Page A-1 Community Facilities Special Tax Consulting Services (Tustin Legacy) December 20, 2010 EXHIBIT A -SCOPE OF WORK Community Facilities District Special Tax Consulting Services City of Tustin Tustin Legacy Project David Taussig and Associates, Inc. ("DTA") shall provide the City of Tustin (the "City") with the special tax consulting services necessary to assist the City in the formation of one or more Community Facilities Districts ("CFDs") to finance public facilities and services related to future phases of the Tustin Legacy project (the "Project") and the issuance of bonds by said CFD(s). More specifically, DTA will provide updated CFD capacity analyses and a technical memorandum summarizing the burdens, impacts, and proceeds associated with future phases of the Project. To accomplish these goals, DTA shall perform the following tasks: • Attend a kickoff meeting with City staff and prepare updated CFD capacity analyses for each of the future phases of the Project. • Prepare a technical memorandum to summarize the CFD bond assumptions, projected property tax rates, and bonding capacity as outlined in the updated CFD pro formas. Results will be discussed in a meeting with City staff and/or other stakeholders. • Prepare sensitivity analyses and attend up to four (4) additional meetings with the City, consultants, and other interested parties to discuss financing strategies. David Taussig, President of DTA, will be the Project Manager. He will be assisted by Mike Medve, a Senior Associate with DTA. Generally, DTA shall prepare revised CFD pro formas in order to determine the bonding capacity and projected tax rates for the Project. Specifically, DTA will conduct the following activities: Task 1. Background Research DTA will review planning, engineering, existing property tax, development absorption, and financial information regarding the Project. All infonnatiou shall be provided by City and/or their consultants. DTA shall base its CFD capacity analyses on data received from these sources, and shall not conduct any independent research to verify the accuracy of such data. Task 2. Updated CFD Pro Forma Prepare an updated community facilities district pro forma for each phase of the Project to estimate supportable bonded indebtedness, special tax and total property tax rates, and carrying costs (i.c. special taxes). City understands that bonded indebtedness will be constrained by a number of factors including, but not limited to, interest rates, maximum special taxes, and the appraised value to public debt ratio (e.g., the value to lien ratio) of the Project. Provided that City supplies DTA with an estimated appraised value for each phase of the Project, DTA will estimate the overall value to lien ratio for the Project at time of bond issuance. DTA will not conduct nor obtain an independent appraisal of the City of Tustin Page A-2 Community Facilities District Special Tax Consulting Services (Tustin Legacy) December 20, 2010 Project. If no estimate of appraised value is provided, DTA's bonding capacity analysis shall be limited to a test of sufficient special taxes. Task 3. Technical Memorandum DTA shall prepare a four (4) page technical memorandum with tables to compare and summarize the CFD bond assumptions, projected property tax rates, and bonding capacity as outlined in the updated CFD pro formas for each phase. This memorandum may also include a description and estimated cost of the proposed public facilities to be financed by the CFD(s), estimated bonded indebtedness and related issuance costs and incidental expenses, anticipated dates of issuance, an explanation of the special tax apportionment methodology, and projections of special taxes for each year that bonds are outstanding. Task 4. Meetings Attend up to six (6) meetings with the City, consultants, and other interested parties, to present and/or discuss Rate and Method of Apportionment and/or the CFD Report. The breakdown of the meetings is as follows: one (1) introductory meeting, one (1) meeting to discuss the results of the CFD analyses, and four (4) additional meetings. City of Tustin Page A-3 Community Facilities District Special Tux Consulting Services (Tustin Legacy) December 20, 2070 DAVID TAUSSIG ~J & ASSOCIATES ~0~0 Bir~~'f"3 Strecst, Ste. 4~C10C3. Newoart Bach, ~,~ ~l'~:~', i EXHIBIT B -FEE SCHEDULE Community Facilities District Special Tax Consulting Services The City of Tustin Tustin Legacy DTA shall be remunerated for consulting services on an hourly basis according to the rates set forth in Table 1 below, with invoices being submitted to City on a monthly basis. DTA shall perform tasks listed under Exhibit A -Scope of Work, as requested by City, until fees equal the following levels: Tasks 1 through 4: $22,500 Any additional tasks not listed in the Scope of Work that are assigned by City if the Total Fee listed above has been exceeded, shall be charged at the hourly rates listed below. An excessive number of meetings (more than six (6)) or tax spread computer runs (more than fifteen (15)) may also require additional fees if the maximum fee has been exceeded. Such additional fees shall be added to the "Total Fee" amounts listed above. Consulting services shall be billed according to the following hourly rates: r ~ ,; i .. President $285/Hour Vice President $230/Hour Senior Associate $180/Hour Associate $165/Hour Senior Analyst $145/Hour Financial Analyst $125/Hour Research Assistant $105/Hour In addition to fees for services, Client shall reimburse DTA for out-of-pocket and administrative expenses by paying a charge equal to 3% of DTA's monthly billings for labor, plus clerical time @ $75 per hour, travel costs, and any outside vendor payments, not to exceed a total of $1,000. Invoices shall be submitted on a monthly basis and shall be due within thirty days thereafter. A late charge of 1.2 percent per month shall be charged on late payments. Invoices shall be paid by City within thirty (30) days of the date of each invoice. A 1.2% charge may be imposed against accounts which are not paid within thirty (30) days of the date of each invoice. All hourly rates for services apply fora 12 month period from execution of the agreement and are subject to acost-of-living increase every 12 months. City of Tustin Page B-1 Community Facilities District Special Tax Consulting Services (Tustin Legacy) December 20, 2010 Limitations The budget stated within this Fee Schedule is an estimate that may be exceeded depending upon the complexity of the analyses conducted herein and any additional work that may be requested of DTA by the City. DTA shall notify City if and when charges approach the estimates listed above so as to obtain written consent for additional fees to continue work. J:APROPOSAL\MELLOV"Tustin Legacy\Tustin Legacy Bonding Capacity.doc City of Tustin Page B-2 Community Facilities District Special Tax Consulting Services (Tustin Legacy) December 20, 2010 EXHIBIT "B" "Special Requirements" 1. Consultant shall not release to the public or the press information on this project without prior authorization by Contract Officer. 2. Conflict of Interest and Confidentiality. In order to assure Agency that Consultant is not subject to any conflict of interest, Consultant affirms that while the work is in progress neither Consultant nor any of its offices or employees will accept work from or provide services for any company related to the Tustin Legacy project. Consultant agrees that during the term of Agreement, unless other modified by mutual agreement in writing by the parties, it shall not challenge, comment on, or oppose, nor shall it fund or in any way assist any other person or entity (other than the Agency or City of Tustin) to challenge or oppose, to or before any local, regional, state or federal agency or assist in party in any actions or proceedings to set aside, enjoin, challenge, appeal, or other pursue any legal, equitable or administrative remedies regarding the approval or implementation of any proposals, applications, approvals, or permits related to the Tustin Legacy project. In addition, Consultant agrees that during the term of Agreement for all other tasks identified in the Scope of Services, neither Consultant nor its officers or employees will accept work from or provide services to other development interests at Tustin Legacy without a written request to the Agency and written release granted by the Agency. Consultant understands and agrees that all work it undertakes for the Agency shall be considered confidential and shall not be shared by Consultant with any other party without a written release from the Agency. In the event of uncertainty about whether a potential conflict of interest exists, Consultant shall advise Contract Officer whose decision to review and consider a conflict waiver shall be final. 3. A no-fee business license shall be provided by the Agency to Consultant. 4. Consultant shall present to the Agency certificates of insurance and endorsement forms pursuant to Agreement requirements verifying that the Consultant has the insurance as required by this agreement. 5. If Contract Officer determines that a product deliverable is unacceptable, either before or after a draft or final draft is issued, because it does not conform to the requirements of this agreement, the Consultant shall submit a revised report or product at Consultant's expense. 6. The Consultant shall review and replace project personnel assigned to project who do not perform assigned work in a manner satisfactory to Contract Officer. Consultant's principals, or Agency/City-approved designee, assigned to the individual Scope of Work items under this Agreement (see Exhibit "A") shall be available to meet with Contract Officer as required at designated dates and times to coordinate scope of services required by the Agreement, to resolve problems, to discuss progress on scope of work at Contract Officer's direction and to discuss assumptions developed during task levels. 7. Field investigations necessary. The Consultant shall obtain necessary field data and make site investigations and studies necessary to the proper accomplish- ment of the work required under this contract. EXHIBIT "C" "Schedule of Compensation" 1. Agency compensate the Consultant up to a total compensation not to exceed $47,500, unless modified in writing pursuant to Sections 1.6, 2.3 and 2.4 of the Agreement. The following is a breakdown of associated fees for the recommended Scope of Work items described in Exhibit "A": • A. Update of Tustin Legacy Fair Share Program - $23,000, plus not to exceed $1,000 for out-of-pocket reimbursable and administrative expenses. • B. Community Facilities District Analysis - $22,500, plus not to exceed $1,000 for out-of pocket reimbursable and administrative expenses. Total: $47,500 2. Any additional meeting or planning time not identified in Exhibit A of Consultant's proposals will be billed at hourly rates identified in Exhibit A. Additional work that is outside the Scope of Work as identified in Exhibit A, will require an amendment to the Consultant Services Agreement as identified in Sections 1.6 and 2.3 of the Agreement. EXHIBIT "D" "Schedule of Performance" DELIVERABLES AND TIMING 1. Exhibit A Attachment 1-Update of Tustin Legacy Fair Share Backbone Infrastructure Program The Agency will issue a notice to proceed to Consultant and provide information necessary for Consultant to complete its analysis for each of the sub-tasks required for this Scope of Work as identified in Exhibit A, Attachment 1. As part of the notice to proceed with individual sub-tasks for this Scope of Work, the Agency will in writing identify the time frame required for consultant's completion of individual sub-tasks required, which shall be incorporated herein as though a part of this Agreement. The final deliverables for the Update of the Tustin Legacy Fair Share Backbone Infrastructure Program will be: • In a technical memorandum format, a written report that will include the information and analysis needed to support the conclusions. Exhibits that support the conclusions will be provided. • In a technical memorandum format, provide an addendum to the above report including revised tables and brief description of the changes caused by the SOCCCD of any proposed private development land uses. 2. Exhibit A, Attachment 2 -Community Facilities District Special Tax Consulting The Agency will issue a notice to proceed to Consultant and provide information necessary for Consultant to complete their analysis for tasks required for this Scope of Work as identified in Exhibit A, Attachment 2. As part of the notice to proceed for this Scope of Work, the Agency will in writing identify the time frame required for consultants completion of individual sub-tasks required, which shall be incorporated herein as though a part of this Agreement. The deliverables for the Community Facilities District analysis will include as outlined in Exhibit A-1: updated community facility pro formas for each phase of the project; a Technical Memorandum with tables to compare and summarize the CFD bond assumptions, projected property tax rates, and bonding capacity as outlined in the CFD pro formas prepared for each phase of the Project.