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A5548 - HARRELL & COMPANY ADVISORS LLC FINANCIAL SERVICES CONSULTING
CITY COUNCIL STAFF REPORT DATE: OCTOBER 26, 2023 CONSENT CALENDAR SUBJECT: APPROVE AMENDMENT NO. 4 TO CONSULTING SERVICES AGREEMENT A5548 WITH HARRELL & COMPANY ADVISORS, LLC FROM: Scott C. Stiles, City Manager BY: Department of Finance and Treasury SUMMARY: The City Council will consider Amendment No. 4 to Agreement A5548 with Harrell & Company Advisors, LLC. This amendment extends the current agreement for an additional 3 years. RECOMMENDATION: 1. Approve Amendment No. 4 (Attachment A) to Consulting Services Agreement No. A5548 with Harrell & Company Advisors LLC, approving an extension through October 31, 2026, for financial advising services in an amount not to exceed $236,000. 2. Authorize the City Manager to execute all necessary documents. BACKGROUND: The City’s Financial Advisor, Harrell & Company Advisors, LLC has a current agreement which will expire October 31, 2023. Harrell & Company has been the Financial Advisor for the City since 2007 and provides many valuable services to the City of Palm Springs, as noted below: • Responsible for preparing all annual compliance that is required with the City’s debt. • Advise on any refunding of debt or issuance of new debt. • Prepares all annual compliance related to the dissolution of the Redevelopment Agency, including the Recognized Obligation Payment Schedules (ROPS). • Consult on various financial transactions for the City. Item 1N - Page 1 DocuSign Envelope ID: 1ABE936A-69BA-4CA8-8992-FA1220C4961C City Council Staff Report October 26, 2023 -- Page 2 Approve Amendment No. 4 to A5548 with Harrell & Company Advisors, LLC STAFF ANALYSIS: The Finance Department would like to retain Harrell & Company Advisors for an additional three years. Suzanne Harrell, the City’s main contact, has been a valuable resource to the Finance team as Ms. Harrell has great historical knowledge of many financial transactions the City has completed over the last 16 years that Harrell & Company has served as the City’s Financial Advisors. Over the past few months, the City has partnered with Ms. Harrell and her team to compile various financing strategies as the City looks to build a new Fire Station and renovate the City’s Library, amongst other capital projects. These strategy sessions have been very helpful to City Staff in understanding the options for major financing. City Staff plans to continue with these sessions in hopes to eventually lead up to major financing. The total cost over the 3 years of this amendment is projected not to exceed $236,000. This is considerably more than prior amendments due to a projected 2 new issuances of debt for financing major capital projects at a cost of $70,000 each (total of $140,000). Harrell & Company has not raised their rates since the initial contract was put in place in 2007. FISCAL IMPACT: Approval of this amendment would allow the appropriation of an additional $140,000 to the fiscal year 2024-2025 budget in Finance Department Account 1001035-40105. REVIEWED BY: Department Director: Kristopher J. Mooney Procurement and Contracting Director: Kim Baker City Manager: Scott Stiles ATTACHMENTS: A. Amendment No.4 to Consulting Services Agreement No. A5548 with Harrell & Company Advisors, LLC for financial advising consultation services Item 1N - Page 2 DocuSign Envelope ID: 1ABE936A-69BA-4CA8-8992-FA1220C4961C ATTACHMENT A Item 1N - Page 3 DocuSign Envelope ID: 1ABE936A-69BA-4CA8-8992-FA1220C4961C AMENDMENT NO. 4 TO THE CONSULTING SERVICES AGREEMENT BETWEEN THE CITY OF PALM SPRINGS AND HARRELL & COMPANY ADVISORS LLC 1.Parties and Date. This Amendment No. 4 to the Consulting Services Agreement ("Amendment") is made and entered into this ____ day of October, 2023, by and between the City of Palm Springs, a California charter city ("City"), in its capacity as successor agency to the City of Palm Springs Community Redevelopment Agency, and Harrell & Company Advisors LLC, a California limited liability company ("Consultant"). 2. Recitals. 2.1 Consultant. The City and Consultant entered into an agreement titled “Consulting Services Agreement”, dated September 5, 2007, for the services of a financial advisor and Dissemination Agent ("Agreement"). The initial Agreement term was three (3) years, and the total amount expended by the City during the initial term for the services provided by Consultant was Ninety-Five Thousand Dollars and Zero Cents ($95,000.00). 2.2 First Amendment. The City and Consultant entered into Amendment No. 1 to the Agreement, dated September 22, 2010, for the purposes of extending the Agreement term for another three (3) years. The total amount expended by the City during this three year renewal term for the services provided by Consultant was Eighty-Seven Thousand Five Hundred Dollars and Zero Cents ($87,500.00). 2.3 Second Amendment. The City and Consultant entered into Amendment No. 2 to the Agreement, dated, November 6, 2013, for the purposes of extending the Agreement term for an additional five (5) years, amending certain exhibits to the Agreement, and adding additional language to the Agreement. The total amount expended by the City during this subsequent five year renewal term for the services provided by Consultant was One Hundred Seventeen Thousand Nine Hundred Dollars and Zero Cents ($117,900.00). 2.4 Third Amendment. The City and Consultant entered into Amendment No. 3 to the Agreement, dated October 17, 2018, for the purposes of extending the Agreement term for another five (5) year term and to further amend language to the Agreement. The total amount expended by the City during this second five year renewal term for the services provided by Consultant was One Hundred Thirty-Two Thousand Two Hundred Fifty Dollars and Zero Cents ($132,250.00). Item 1N - Page 4 DocuSign Envelope ID: 1ABE936A-69BA-4CA8-8992-FA1220C4961C 2 2.5 Amendment Purpose. The City and Consultant now desire to again amend the Agreement to extend the Agreement term for an additional three (3) years. The amount that is estimated to be expended by the City during this upcoming renewal term for the services provided by Consultant is not to exceed Two Hundred Thirty-Six Thousand Dollars and Zero Cents ($236,000.00). 2.6 Amendment Authority. This Amendment No. 4 is authorized pursuant to Section 11.3 of the Agreement. 3. Terms. 3.1 Amendment. Section 4.1 of the Agreement is hereby amended in its entirety to read as follows: “4.1 Term. Unless earlier terminated in accordance with Section 9.5 of this Agreement, this Agreement shall continue in full force and effect for a period of three (3) years, ending on October 31, 2026, unless extended by mutual written agreement of the parties.” 3.2 Continuing Effect of Agreement. Except as amended by this Amendment No. 4, all other provisions of the Agreement remain in full force and effect and shall govern the actions of the parties under this Amendment No. 4. From and after the date of this Amendment No. 4, whenever the term “Agreement” appears in the Agreement, it shall mean the Agreement as amended by this Amendment No. 4. 3.3 Adequate Consideration. The Parties hereto irrevocably stipulate and agree that they have each received adequate and independent consideration for the performance of the obligations that they have undertaken pursuant to this Amendment No. 4. 3.4 Severability. If any portion of this Amendment No. 4 is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. [SIGNATURE PAGE ON NEXT PAGE] Item 1N - Page 5 DocuSign Envelope ID: 1ABE936A-69BA-4CA8-8992-FA1220C4961C 3 SIGNATURE PAGE FOR AMENDMENT NO. 4 TO THE CONSULTING SERVICES AGREEMENT BETWEEN THE CITY OF PALM SPRINGS AND HARRELL & COMPANY ADVISORS LLC CITY OF PALM SPRINGS By: Scott Stiles City Manager Date ATTEST: By: Brenda Pree City Clerk APPROVED AS TO FORM: By: FOR Best Best & Krieger LLP City Attorney HARRELL & COMPANY ADVISORS LLC Signature Name Title Date Item 1N - Page 6 DocuSign Envelope ID: 1ABE936A-69BA-4CA8-8992-FA1220C4961C Managing Member 11/9/2023 Suzanne Harrell 11/9/2023 CITY OF PALM SPRINGS – PUBLIC INTEGRITY DISCLOSURE APPLICANT DISCLOSURE FORM Page 1 of 2 (Revised 05/16/19) PUBLIC INTEGRITY DISCLOSURE APPLICANT DISCLOSURE FORM 1.Name of Entity 2.Address of Entity (Principle Place of Business) 3.Local or California Address (if different than #2) 4.State where Entity is Registered with Secretary of State If other than California, is the Entity also registered in California? Yes No 5.Type of Entity Corporation Limited Liability Company Partnership Trust Other (please specify) 6.Officers, Directors, Members, Managers, Trustees, Other Fiduciaries (please specify) Note: If any response is not a natural person, please identify all officers, directors, members, managers and other fiduciaries for the member, manager, trust or other entity _________________________________________________ Officer Director Member Manager [name] General Partner Limited Partner Other ____________________________________ _________________________________________________ Officer Director Member Manager [name] General Partner Limited Partner Other ____________________________________ _________________________________________________ Officer Director Member Manager [name] General Partner Limited Partner Other ____________________________________ Harrell & Company Advisors, LLC 13891 Newport Ave, Suite 145, Tustin, CA 92780 California Suzanne Harrell DocuSign Envelope ID: 1ABE936A-69BA-4CA8-8992-FA1220C4961C CITY OF PALM SPRINGS – PUBLIC INTEGRITY DISCLOSURE APPLICANT DISCLOSURE FORM Page 2 of 2 (Revised 05/16/19) 7. Owners/Investors with a 5% beneficial interest in the Applicant Entity or a related entity EXAMPLE JANE DOE [name of owner/investor] 50%, ABC COMPANY, Inc. [percentage of beneficial interest in entity and name of entity] A. [name of owner/investor] [percentage of beneficial interest in entity and name of entity] B. [name of owner/investor] [percentage of beneficial interest in entity and name of entity] C. [name of owner/investor] [percentage of beneficial interest in entity and name of entity] D. [name of owner/investor] [percentage of beneficial interest in entity and name of entity] E. [name of owner/investor] [percentage of beneficial interest in entity and name of entity] I DECLARE UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE STATE OF CALIFORNIA THAT THE FOREGOING IS TRUE AND CORRECT. Signature of Disclosing Party, Printed Name, Title Date PENALTIES Falsification of information or failure to report information required to be reported may subject you to administrative action by the City. October 11, 2023 Suzanne Harrell 100% Suzanne Harrell, Managing Director DocuSign Envelope ID: 1ABE936A-69BA-4CA8-8992-FA1220C4961C CITY OF PALM SPRINGS 3200 E TAHQUITZ CANYON WAY, PALM SPRINGS, CA 92262 (760) 322-8328 BUSINESS LICENSE CERTIFICATE Fees Paid:$174.00 ISSUANCE OF THIS LICENSE DOES NOT ENTITLE THE LICENSEE TO OPERATE OR MAINTAIN A BUSINESS IN VIOLATION OF ANY OTHER LAW OR ORDINANCE. THIS IS NOT AN ENDORSEMENT OF THE ACTIVITY NOR OF THE APPLICANT'S QUALIFICATIONS. Business Name:Harrell & Company Advisors DBA: Owner:Suzanne Harrell Mailing Address:13891 Newport Ave. Suite 145 Tustin, CA 92780 License Number:OC-003216-2023 Expiration Date:10/31/2024 PLEASE NOTE THAT IT IS YOUR RESPONSIBILITY TO RENEW AND UPDATE THIS LICENSE ANNUALLY. Business Location:13891 Newport Ave. Suite 145, Tustin, CA 92780 Business Description:Financial Advisor TO BE POSTED IN A CONSPICUOUS PLACE DocuSign Envelope ID: 1ABE936A-69BA-4CA8-8992-FA1220C4961C CITY OF PALM SPRINGS, CA CONFLICT OF INTEREST AND NON-DISCRIMINATION CERTIFICATION Conflict of Interest. Contractor acknowledges that no officer or employee of the City has or shall have any direct or indirect financial interest in this Agreement nor shall Contractor enter into any agreement of any kind with any such officer or employee during the term of this Agreement and for one year thereafter. Contractor warrants that Contractor has not paid or given, and will not pay or give, any third party any money or other consideration in exchange for obtaining this Agreement. Covenant Against Discrimination. In connection with its performance under this Agreement, Contractor shall not discriminate against any employee or applicant for employment because of actual or perceived race, religion, color, sex, age, marital status, ancestry, national origin ( i.e., place of origin, immigration status, cultural or linguistic characteristics, or ethnicity), sexual orientation, gender identity, gender expression, physical or mental disability, or medical condition (each a “prohibited basis”). Contractor shall ensure that applicants are employed, and that employees are treated during their employment, without regard to any prohibited basis. As a condition precedent to City’s lawful capacity to enter this Agreement, and in executing this Agreement, Contractor certifies that its actions and omissions hereunder shall not incorporate any discrimination arising from or related to any prohibited basis in any Contractor activity, including but not limited to the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship; and further, that Contractor is in full compliance with the provisions of Palm Springs Municipal Code Section 7.09.040, including without limitation the provision of benefits, relating to non-discrimination in city contracting. NAME OF CONTRACTOR/VENDOR: Harrell & Company Advisors, LLC NAME and TITLE of Authorized Representative: (Print) Suzanne Harrell, Managing Member Signature and Date of Authorized Representative: (Sign) ___________________________________________ (Date) October 11, 2023 DocuSign Envelope ID: 1ABE936A-69BA-4CA8-8992-FA1220C4961C 08/18/2023 Robert Harris Insurance Agency, Inc. Lic. #0216736 3150 Bristol St., Suite 200 Costa Mesa CA 92626 Alaina Shortes-Bosold (714) 619-4480 (714) 619-4481 alaina@reharris.com Harrell & Company Advisors LLC 13891 Newport Ave Ste 145 Tustin CA 92780-7838 Travelers Casualty Insurance Co of America 19046 Lloyds of London CL2381825566 A 6805607R688 08/22/2023 08/22/2024 2,000,000 300,000 5,000 2,000,000 4,000,000 4,000,000 A 6805607R688 08/22/2023 08/22/2024 2,000,0000 B Professional Liability Claims Made MPL1008120.23 08/22/2023 08/22/2024 Occurrence Limit $3,000,000 Aggregate Limit $3,000,000 City of Palm Springs; Successor Agency to the Palm Springs Community Redevelopment Agency; City of Palm Springs Financing Authority is named Additional Insured as their interest may appear as respects operations of the Named Insured (see blanket Additional Insured policy form #CGD8420219 attached). Coverage provided is Primary over any other insurance maintained by the Additional Insured. In the event of non-payment of premium, a 10 Day notice of cancellation will be sent. City of Palm Springs;Successor Agency to the Palm Springs CommunityRedevelopment 3200 E. Tahquitz Canyon Way Palm Springs CA 92263 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. INSURER(S) AFFORDING COVERAGE INSURER F : INSURER E : INSURER D : INSURER C : INSURER B : INSURER A : NAIC # NAME:CONTACT (A/C, No):FAX E-MAILADDRESS: PRODUCER (A/C, No, Ext):PHONE INSURED REVISION NUMBER:CERTIFICATE NUMBER:COVERAGES IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. OTHER: (Per accident) (Ea accident) $ $ N / A SUBR WVD ADDL INSD THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. $ $ $ $PROPERTY DAMAGE BODILY INJURY (Per accident) BODILY INJURY (Per person) COMBINED SINGLE LIMIT AUTOS ONLY AUTOSAUTOS ONLY NON-OWNED SCHEDULEDOWNED ANY AUTO AUTOMOBILE LIABILITY Y / N WORKERS COMPENSATION AND EMPLOYERS' LIABILITY OFFICER/MEMBER EXCLUDED? (Mandatory in NH) DESCRIPTION OF OPERATIONS below If yes, describe under ANY PROPRIETOR/PARTNER/EXECUTIVE $ $ $ E.L. DISEASE - POLICY LIMIT E.L. DISEASE - EA EMPLOYEE E.L. EACH ACCIDENT EROTH-STATUTEPER LIMITS(MM/DD/YYYY)POLICY EXP(MM/DD/YYYY)POLICY EFFPOLICY NUMBERTYPE OF INSURANCELTRINSR DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) EXCESS LIAB UMBRELLA LIAB $EACH OCCURRENCE $AGGREGATE $ OCCUR CLAIMS-MADE DED RETENTION $ $PRODUCTS - COMP/OP AGG $GENERAL AGGREGATE $PERSONAL & ADV INJURY $MED EXP (Any one person) $EACH OCCURRENCE DAMAGE TO RENTED $PREMISES (Ea occurrence) COMMERCIAL GENERAL LIABILITY CLAIMS-MADE OCCUR GEN'L AGGREGATE LIMIT APPLIES PER: POLICY PRO-JECT LOC CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY) CANCELLATION AUTHORIZED REPRESENTATIVE ACORD 25 (2016/03) © 1988-2015 ACORD CORPORATION. All rights reserved. CERTIFICATE HOLDER The ACORD name and logo are registered marks of ACORD HIRED AUTOS ONLY DocuSign Envelope ID: 1ABE936A-69BA-4CA8-8992-FA1220C4961C DocuSign Envelope ID: 1ABE936A-69BA-4CA8-8992-FA1220C4961C DocuSign Envelope ID: 1ABE936A-69BA-4CA8-8992-FA1220C4961C DocuSign Envelope ID: 1ABE936A-69BA-4CA8-8992-FA1220C4961C ! " # $ % & ' (% ' ) * + , + - # # !./ 012./3 $$ 4 5 " 6 . + 6 *?)+,7 ) 8 ) 70.02.)) 34 *. ! 8 9 5 9 % 9 9 $" $$ 9 % % $ 9% 3 0$$ &9 5 $ 8 *. + 5 8 8 9 58 5 A $&% 9 $ 55$ $ 9 9 2"$5 9 B F$$ 0 B 8 $$B 8 7$ 05 B 8 7$$B 8 7$B :9 8 9$ H &$$ 8$$&% 9 9 /$ 3 3 2 " /3 I #%% .9 $ I #%% ) / 5 8 7 A3 5 " " 5$ " % 8 9 8 8 2 $ 8 9 8 9 5 A*, 8 &99 % I #%% 9 / &$$ 5 9 9 2"$5 9 B F$$ 0 B 8 $$B 8 7$ 05 B 8 7$$B 8 7$B :9 8 9$ H% 9 9 " 9 9 / 9" 5 $ 5 9 $ . 88"3 ) 8 3 !7) ) ) . 3 7 /3 ? ) 9 > 25 " @" @ DocuSign Envelope ID: 1ABE936A-69BA-4CA8-8992-FA1220C4961C AMENDMENT NO. 3 TO CONSULTING SERVICES AGREEMENT Harrell & Company Advisors, LLC This Amendment No. 3 to the Consulting Services Agreement ("Amendment') is made and entered into this 17th day of October, 2018, by and between the City of Palm Springs, California, a California Charter City ("City"), and in its capacity as Successor Agency to the City of Palm Springs Community Redevelopment Agency, and Harrell & Company Advisors, LLC, ("Consultant'). RECITALS A. City and Consultant have entered into a Consulting Services Agreement, as amended, for the services of a financial advisor and Dissemination Agent ("Agreement'). B. City and Consultant are agreeable to modifying certain terms and conditions to the Agreement pursuant to the terms of this Amendment. AGREEMENT In consideration of the promises and covenants contained in this Amendment and other good and valuable consideration, the City and the Consultant agree: SECTION 1. Section 4 of the Agreement (titled "Term"), including all subsequent subsections, is amended to read: 4. TERM 4.1 Term. Unless earlier terminated in accordance with Section 9.5 of this Agreement, this Agreement shall continue in full force and effect for a period of five (5) years ending on October 31, 2023, unless extended by mutual written agreement of the parties. SECTION 2. Exhibit A-1 (titled Scope of Services and Compensation) is terminated and is no longer in effect. All references in the Agreement to Exhibit A-1 are amended to read Exhibit A-2 (titled Scope of Services and Compensation) as attached which defines the amended Scope of Services and Compensation to be performed by the Consultant compensation to be paid to the Consultant and is made part of this Agreement. A new Exhibit B-1 (titled Municipal Advisor Disclosure) is hereby attached and becomes part of this Agreement and both are attached hereto and incorporated herein. SECTION 3. Section 1.5 of the Agreement is hereby amended to read: 1.5 Fiduciary Duty. In connection with the services described herein, certain disclosures are required by the Securities and Exchange Commission and the Municipal Securities Rulemaking Board regarding the Advisor's fiduciary duty to their Consulting Services Agmt. Amend. No. 3 ORIGINAL BID Harrell &Company Advisors, LLC Page 1 of 2 AND/OR AGREEMENT municipal clients. These disclosures are attached as Exhibit B-1 (titled Municipal Advisor Disclosure). SECTION 4. Section 10.2 of the Agreement is hereby amended to read: 10.2 Covenant Against Discrimination. In connection with its performance under this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of actual or perceived race, religion, color, sex, age, marital status, ancestry, national origin ( i.e., place of origin, immigration status, cultural or linguistic characteristics, or ethnicity), sexual orientation, gender identity, gender expression, physical or mental disability, or medical condition (each a "prohibited basis"). Consultant shall ensure that applicants are employed, and that employees are treated during their employment, without regard to any prohibited basis. As a condition precedent to City's lawful capacity to enter this Agreement, and in executing this Agreement, Consultant certifies that its actions and omissions hereunder shall not incorporate any discrimination arising from or related to any prohibited basis in any Consultant activity, including but not limited to the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship; and further, that Consultant is in full compliance with the provisions of Palm Springs Municipal Code Section 7.09.040, including without limitation the provision of benefits, relating to non-discrimination in city contracting. SECTION 5. City and Consultant agree that the terms of the Agreement, as amended, shall remain unchanged and in full force and effect, except as specifically provided in this Amendment. In witness whereof, City and Consultant have executed and entered into this Amendment as of the date first written above. CITY OF PALM SPRINGS, CONSULTANT A California Charter City Harrell & Company Advisors, LLC David H. Ready, City M nager Suza a Harrell, Managing Director ATTEST: APPROVED AS TO FORM: IN —�__ �U�` �,}A 6AZ (ony J. M Cit Edward Kotkin, City Attor rrrr 600'APPROVED BY CITY COUNCIL � .Consulting Services Agmt. Amend. No. 3 l0 17 55�? Harrell & Company Advisors, LLC Page 2 of 2 EXHIBIT A-2 SCOPE OF SERVICES AND COMPENSATION Service: Review and analysis of financial documents,financial statements and development proposals Harrell & Company will review and analyze financial documents, financial statements and development proposals. This service will also include attendance at periodic finance committee meetings, review of City monthly financial reports and other financial duties as requested by the City Manager, Assistant City Manager or Finance Director. Harrell & Company will provide such assistance on an as-needed/as-requested basis at a rate of$140 per hour for time spent working on authorized projects. Harrell & Company does not bill for any time spent relating to questions concerning outstanding bonds that arise after issuance or for travel time to the City. Typically,we spend about 10 or more hours a year on bond related questions. Fees will be payable upon receipt of periodic invoices. i i Service: Preparation of ROPS and related Successor Agency financial issues Harrell & Company will prepare annual ROPS and Prior Period Adjustment schedules, and provide any data or follow up materials as requested by the Department of Finance or staff. Harrell & Company will draft required resolutions for review by staff and City Attorney and submit approved documents to the County and Department of Finance as required. Harrell & Company will also review and analyze any Successor Agency financial transactions. Harrell & Company will provide such assistance on an as-needed basis at a rate of$140 per hour. Fees will be payable upon receipt of periodic invoices. i Page A-2-1 Service: Preparation and Filing of Annual Continuing Disclosure Reports for outstanding bond issues i The Securities and Exchange Commission and the Municipal Securities Rulemaking Board require that the City and its related entities (such as the Successor Agency, and special districts like assessment districts) annually provide ongoing financial disclosure to the bond market. These reports are generally due within 180 to 270 days after the City's fiscal year end. Further, during any year, if a material event should occur(such as a rating change or a bond defeasance), the City must also post notice of such event in a timely manner. i Harrell & Company will prepare and file all annual reports and any material event notices so that the City continues to stay in compliance with all the requirements for continuing disclosure for all series of outstanding debt. Harrell & Company will also prepare other reports required by State Law or bond indentures. r Harrell & Company proposes the following fees for these services as follows: Preparation and Filing of Annual Report: Tax Allocation $1,200 first issue for a project area $200 each subsequent issue for project area General Fund Lease $750 each issue Revenue (Enterprise Fund) $1,500 first issue 750 each subsequent issue for enterprise Special Tax/Assessment $1,500 each issue Preparation and Filing of Material Event Notices: $25 per notice Report of Independent Financial Consultant(Required for PFC Bonds) $750 Report Required by California Debt and Investment Advisory Commission(POB) $500 Annual Debt Transparency Report Required by California Debt and Investment Advisory Commission (for issues after January 1, 2017) $750 Out-of-Pocket expenses (Taxpayer Data for Tax Allocation Bonds) At cost Fees will be payable upon receipt of periodic invoices. i Page A-2-2 i I Service: Financial advisory services in connection with bond issuance Financial Assessment/Financing Plan. Harrell & Company works with staff to develop a plan for each financing. The bond structure is consistent with the City's objectives for any financing. The financing structure developed for the City financing ensures that the credit rating is appropriate for the issue, while raising the required funds; takes into account financing limitations (such as the 25 year sunset on the Measure J tax and former RDA plan limits); and We analyze the various financing conditions as they arise and advise the City on the advantages and disadvantages to each, if applicable. In connection with lease financing, this includes the selection of City assets to be leased which meet both financial and siesmic qualifications of the rating agency. Revenue Projections. Harrell & Company prepares revenue projections for inclusion in the Official Statement when required(for example, former Redevelopment Agency tax increment). Financing Schedule. Harrell&Company develops and monitors the schedule of activities during the financing to assist the City in meeting agenda deadlines and public notice requirements. Bond Sizing. Harrell &Company prepares all numerical analysis associated with the issuance of the bonds, including preparation of sources and uses and debt service cashflows and refunding analysis. Harrell & Company has the expertise to prepare all numerical analysis in-house. Review Legal Documents. Harrell & Company reviews all legal documents prepared by bond counsel in connection with the issuance of the bonds. Ms. Harrell also prepares staff reports for the bond approval for inclusion in the City's agenda and coordinates with the City Clerk on documentation required to be on file. Terms and Conditions of Sale. The bond issue is structured using terms and conditions which most advantageously meet current market conditions and the objectives of the City. Generally, the financing structure addresses sizing considerations for the proposed debt,the leased assets and, in consultation with the City's bond counsel, any tax law implications. Official Statement. Ms. Harrell prepares the official statement and works closely with staff and the City's disclosure counsel to make sure all relevant financial information is included in the official statement, and will provide for distribution to the underwriter, both in printed and electronic formats. Harrell & Company routinely prepares official statements in-house while many financial advisors do not. This provides the firm with the foundation to prepare the best presentation of financial information that is relevant to investors. This generally goes beyond just the cookie-cutter approach to drafting this document. We believe it is the City's chance to shine, and this includes not only making sure that the legal structure and risks are well documented, but that special and important features of the City's financial operations are highlighted. 1 I t f Page A-2-3 Rating Agency Presentations. Working with staff, Harrell & Company will also determine strategies for submitting the financing to the rating agencies. Ms. Harrell emphasizes the City's operations and management in a comprehensive presentation. A comprehensive presentation that markets both the issuer and the financing by laying out the City's objectives and the security for the bonds, disclosing all positive and negative credit factors, and plans to mitigate any negative factor, is critical to obtaining the highest credit rating. Bond Sale. Ms. Harrell works with the staff to select the time frame for marketing the City's bonds. In the case of a negotiated sale, we: advise the City on the propriety of the underwriter's proposed pricing and compensation relative to the current market conditions; negotiate to provide the lowest available rates and costs to the City; . provide the City with a pricing analysis and comparison of its transaction with other recent sales of comparable credit quality or review and analyze such comparison if provided by the City's underwriter; and provide quantitative schedules showing the results of the final pricing. In the case of a competitive sale of bonds, Harrell & Company: conducts the public sale, using an internet platform such as IPREO®; arranges for advertising of the bond sale in nationally prominent financial publications coordinates local publication requirements; and evaluates the bids and recommend the most favorable bid for award. Market Access. Ms. Harrell uses a variety of sources to obtain current market information. This information is critical in timing of the bond sale as well as in negotiating market rates in a negotiated sale. i The primary tool used by Ms. Harrell to access current market information is the Thomson Municipal Market Monitor("TM3"). TM3 provides real-time data for: Municipal Market Data Index(MMD) Municipal Market News Results of Competitive and Negotiated Trade Data in the Secondary Market F Bond Sales in the Primary Market Upcoming Bond Sale Calendar In the pricing phase of a bond issue, we access TM3 for all the recent bond pricings of similar security or credit quality and the MMD Index for the date of the sales. } In a negotiated sale,unless otherwise prepared by the underwriter, we will compile all the relevant information and provide a comparison of the proposed rates on the City's financing with all other comparable financings. If such information is prepared by the underwiter, we will analyze for accuracy and make suggestions if appropriate. Because the market changes over time, we focus Page A-2-4 i primarily on the spread to MMD proposed for the City's financings compared to the actual spreads on other financings. This ensures that the City is getting a competitive market interest rate for its bonds. TM3 also provides data on upcoming competitive and negotiated bond sales, which are reviewed when scheduling the City's bond sale. Typically, the City's bond sale would be scheduled around any large upcoming sales. Other factors taken into account in scheduling the upcoming bond sale is the April 17'h deadline for income taxes, since buyers usually are redeeming their investments around that date instead of making new investments. TM3 has a market news and commentary feature as well. This feature provides real-time information on market conditions, federal reserve board actions and calendars, latest economic news releases and other helpful information used in monitoring the market for planning purposes and for up-to-date pricing trends as the bond sale date approaches. Bond Closing. Following the pricing of the bonds, we prepare final cashflows, complete the official statement with the final pricing information, and begin the process of documentation for closing the transaction. This includes reviewing all the closing documents prepared by bond counsel and making sure that any necessary representations are made by parties to the financing. We will also review the arrangement for closing and transfer of funds. Post Issuance Services. Harrell & Company works with the City to fulfill its continuing disclosure responsibilities under the Securities and Exchange Commission Rule 15c2-12 and the use of the MSRB's Electronic Municipal Market Access ("EMMA") system. In addition, periodically the rating agencies review each bond issue for changes in the underlying credit factors. Ms. Harrell assists the City staff in maintaining these rating agency relationships, preparing required updated information as well as getting ready for dialogue with the analysts as i the reviews occur. Meetings. Ms. Harrell attends any meetings as requested or required and prepares any presentations necessary for the City Council. i Page A-2-5 Harrell &Company proposes the following fees for these services as follows: • A fixed fee of $10,000 for preparation of the preliminary/final official statements for each separately sold and marketed bond issue. ® A fixed fee for all other financial advisory services in connection with each series of bond issue separately marketed and sold as follows— i Issue Size Fixed Greater Than or Equal To Less Than Fee $0 $5 Million $25,000 $5 Million $10 Million 40,000 $10 Million $15 Million 50,000 $15 Million $25 Million 60,000 $25 Million N/A 75,000 These fees are contingent on the successful sale of bonds and payable from bond proceeds. • Out-of-pocket expenses billed at cost. These fees are also billed at closing. These fees are generally applicable to any type of financing. The total fee including preparation of the official statement will be limited to not more than a total of$70,000 for such issue regardless of the size of the borrowing. I i i i I 4 b i Page A-2-6 EXHIBIT B-1 Municipal Advisor Disclosures Harrell & Company Advisors, LLC (Harrell & Co.) is registered as a "municipal advisor" pursuant to Section 15B of the Securities Exchange Act(Act) and rules and regulations adopted by the United States Securities and Exchange Commission (SEC) and the Municipal Securities Rulemaking Board (MSRB). The SEC has approved MSRB Rule G-42 which,among other matters,requires Harrell&Co. to provide the City with information regarding any conflicts of interest that Harrell&Co. may have and with information about where to find Harrell&Co.'s SEC filings on the SEC website. As a Municipal Advisor in connection with services provided under this agreement or any bonds that are issued pursuant to this agreement, Harrell & Co. will owe a fiduciary duty to the City (and its related entities) and will carry out its duties in accordance with such duty. Simply put, this means that Harrell & Co. owes the City both a duty of loyalty and a duty of care and that in performing services that Harrell & Co. may undertake in connection with any bond issue, Harrell &Co. will put the needs of the City ahead of its own. This standard of care is higher than that required of other financial services providers such as underwriters. The fees to be paid by the City to Harrell & Co. for the issuance of bonds are based on the relative size of the transaction and contingent on the successful closing of the financing. Although this form of compensation may be customary, it presents a conflict because Harrell & Co. may have an incentive to recommend unnecessary financings or financings that are disadvantageous to the City. In addition,if facts or circumstances arise that could cause the financing to be delayed or fail to close, Harrell&Co. may have an incentive to discourage a full consideration of such facts and circumstances, or to discourage consideration of alternatives that may result in the cancellation of the financing. Harrell & Co. manages and mitigates this conflict primarily by adherence to the fiduciary duty which Harrell & Co. owes to municipal entities such as the City which require Harrell &Co. to put the interests of the City ahead of its own. Harrell&Co.has determined,after exercising reasonable diligence,that other than described above,that it has no known material conflicts of interest that would impair its ability to provide advice to the City in accordance with its fiduciary duty to municipal entity clients such as the City. To the extent any such material conflicts of interest arise after the date of our engagement Harrell & Co. will inform the City of such conflicts. The City may terminate Harrell & Co.'s services at any time upon written notice. Harrell & Co. may withdraw from its representation as Municipal Advisor upon written notice to the City subject to the fiduciary duty described above which may require it to continue to represent the City until an appropriate replacement is identified which will depend on the status of the transaction. B-1-1 Harrell&Co. is required to disclose to the SEC information regarding criminal actions, regulatory actions, investigations, terminations,judgments, liens, civil judicial actions, customer complaints, arbitrations and civil litigation involving us. Pursuant to MSRB Rule G-42,Harrell& Co. is required to disclose any legal or disciplinary event that is material to the City's evaluation of Harrell & Co. or the integrity of its management or advisory personnel. As reflected in Harrell & Co.'s filings with the SEC, Harrell & Co. has determined that no such event exists. Copies of our filings with the United States Securities and Exchange Commission can currently be found by accessing the SEC's EDGAR system Company Search Page which is currently available at https://www.sec.gov/edgar/searchedgar/companysearch.html and searching for either "Harrell & Co Advisors"or for our CIK number which is 0001610917. The City's current disclosure counsel (Norton Rose Fulbright LLP) acts as compliance counsel to Harrell & Co. in connection with their general regulatory obligations as a municipal advisor; however, such representation does not include representation with respect to the services to be provided under this agreement or any evaluation or opinion as to whether Harrell & Co. is satisfying or has satisfied any fiduciary duty, fair dealing obligation or suitability analysis with respect to individual transactions or clients. The Act prohibits underwriters from switching from a financial advisory role in developing a financing to an underwriting role. Harrell&Co. is not engaged in underwriting. The MSRB has made available on its website (www.msrb.org) a municipal advisory client brochure that describes the protections that may be provided by MSRB rules and how to file a complaint with the appropriate regulatory authority. B-1-2 AMENDMENT NO. 2 TO CONSULTING SERVICES AGREEMENT Harrell & Company Advisors, LLC This Amendment No. 2 to the Consulting Services Agreement ("Amendment") is made and entered into this 6T" day of November, 2013, by and between.the City of Palm Springs, California, a California Charter City, and in its capacity as Successor Agency to the City of Palm Springs Community Redevelopment Agency, (collectively "City"), and Harrell & Company Advisors, LLC, ("Consultant"). RECITALS A. City and Consultant have entered into a Consulting Services Agreement, dated September 22, 2010, as amended, for the services of a financial advisor to the City ("Agreement"). B. City and Consultant are agreeable to modifying certain terms and conditions to the Agreement pursuant to the terms of this Amendment. AGREEMENT In consideration of the promises and covenants contained in this Amendment and other good and valuable consideration, the City and the Consultant agree: SECTION 1. Amendment No. 1 to the Agreement is terminated and is no longer in effect. SECTION 2. Subsection 4.1 of the Agreement is amended to read: 4.1 Term. Unless earlier terminated in accordance with Section 9.5 of this Agreement, this Agreement shall continue in full force and effect for a period of five (5) years ending on October 31, 2018, unless extended by mutual written agreement of the parties. SECTION 3. Exhibit A (titled Scope of ServicesANork) and Exhibit B (titled Schedule of Compensation) are terminated and are no longer in effect. All references in the Agreement to "Exhibit A" and "Exhibit B" are amended to read "Exhibit A-1." Exhibit A-1, Scope of Services and Compensation, attached to this Amendment, defines the scope of services to be performed by Consultant and the compensation to be paid to Consultant and is made a part of the Agreement. SECTION 4. Subsection 1.5 is added to the Agreement to read: 1.5 Fiduciary Duty. Consultant acknowledges that Consultant's services under this Agreement are fiduciary services and that Consultant will deal honestly and in good faith with the City and to act in the City's best interests without regard to financial or other interests of Consultant. Consultant also acknowledges that Consultant has a duty of loyalty to the City pursuant to the Municipal Securities Rulemaking Board rules regarding the Fiduciary Duty of a Municipal Advisor and that Consultant does not Consulting Services Agmt. Amend. No. 2 Harrell & Company Advisors, LLC Page 1 of 2 ORIGINAL blU k4DIOR AGREEMENT have any conflict of interest that would impair the Consultant's ability to satisfy and fully comply with the fiduciary duty and duty of loyalty as provided in this Subsection. Consultant further acknowledges that Consultant is a "designated" as a consultant who is required to comply with the City's Conflict of Interest laws or rules, including the submission of periodic disclosure statements in the manner provided by law. SECTION 5. City and Consultant agree that the terms of the Agreement, as amended, shall remain unchanged and in full force and effect, except as specifically provided in this Amendment. In witness whereof, City and Consultant have executed and entered into this Amendment as of the date first written above. CITY OF PALM SPRINGS, CONSULTANT A California Charter City Harrell & Company Advisors, LLC David H. Ready, City Ma na Suzau> a Harrell, Managing Director ATTEST: APPROVED AS TO FORM: ames Thompson, City Clerk Doug s'Floilland, City Attorney 111 APPROVED BY CITY COUNCIL Ill m Ill Consulting Services Agmt. Amend. No. 2 Harrell & Company Advisors, LLC Page 2 of 2 EXHIBIT Al Service: Review and analysis of financial documents, financial statements and development proposals Harrell & Company will review and analyze financial documents, financial statements and development proposals. This service will also include attendance at periodic finance committee meetings, review of City monthly financial reports and other financial duties as requested by the City Manager or Chief of Staff. Harrell & Company will provide such assistance on an as- needed/as-requested basis at a rate of $140 per hour for time spent working on authorized projects. Harrell &Company does not bill for any time spent relating to questions concerning outstanding bonds that arise after issuance or for travel time to the City. Typically, we spend about 10 or more hours a year on bond related questions. Fees will be payable upon receipt of periodic invoices. Service: Preparation of ROPS and related Successor Agency financial issues Harrell&Company will prepare semi-annual ROPS, and provide any data or follow up materials as requested by the Department of Finance or staff. Harrell & Company will also review and analyze any Successor Agency financial transactions. Harrell & Company will provide such assistance on an as-needed basis at a rate of$140 per hour. Fees will be payable upon receipt of periodic invoices. Page A-1 Service: Preparation and Filing of Annual Continuing Disclosure Reports for outstanding bond issues The Securities and Exchange Commission and the Municipal Securities Rulemaking Board require that the City and its related entities (such as the Successor Agency, and special districts like assessment districts) annually provide ongoing financial disclosure to the bond market. These reports are generally due within 180 to 270 days after the City's fiscal year end. The City must disclose in all future financings for a five year period if any of the deadlines for filing these reports has been missed. Further, during any year, if a material event should occur (such as a rating change or a bond defeasance), the City must also post notice of such event in a timely manner. Harrell &Company will prepare and file all annual reports and any material event notices so that the City continues to stay in compliance with all the requirements for continuing disclosure for all series of outstanding debt. Harrell &Company will also prepare other reports required by State Law or bond indentures. Harrell & Company proposes the following fees for these services as follows: Preparation and Filing of Annual Report: Tax Allocation $1,200 first issue for a project area $200 each subsequent issue for project area General Fund Lease $750 each issue Revenue (Enterprise Fund) $1,500 first issue 750 each subsequent issue for enterprise Special Tax/Assessment $1,500 each issue Preparation and Filing of Material Event Notices: $25 per notice Report of Independent Financial Consultant(Required for PFC Bonds) $750 Report Required by California Debt and Investment Advisory Commission (POB) $500 Out-of-Pocket expenses (Taxpayer Data for Tax Allocation Bonds) At cost Fees will be payable upon receipt of periodic invoices. Page A-2 Service: Financial advisory services in connection with bond issuance Financial Assessment/Financing Plan. Harrell & Company works with staff to develop a Financing Plan for each financing. The bond structure is consistent with the City's objectives for any financing. The financing structure developed for the City financing ensures that • the credit rating is appropriate for the issue, while raising the required funds; • takes into account financing limitations (such as the 25 year sunset on the Measure J tax and former RDA plan limits); and • provides the City with the most flexibility in the future. We analyze the various financing conditions as they arise and advise the City on the advantages and disadvantages to each. In connection with lease financing, this includes the selection of City assets to be leased which meet both financial and siesmic qualifications of the rating agency. Once the structure is decided, the Financing Plan is finalized. Revenue Projections. Harrell & Company prepares revenue projections for inclusion in the Official Statement when required (for example, former Redevelopment Agency tax increment). Financing Schedule. Harrell & Company develops and monitors the schedule of activities during the financing to assist the City in meeting agenda deadlines and public notice requirements. Bond Sizing. Harrell & Company prepares all numerical analysis associated with the issuance of the bonds, including preparation of sources and uses and debt service cashflows and refunding analysis. Harrell& Company has the expertise to prepare all numerical analysis in-house. Review Legal Documents. Harrell & Company reviews all legal documents prepared by bond counsel in connection with the issuance of the bonds. Ms. Harrell also prepares staff reports for the bond approval for inclusion in the City's agenda and coordinates with the City Clerk on documentation required to be on file. Disclosure Issues. Ms. Harrell is well versed in defining disclosure issues necessary to meet SEC and GFOA guidelines, and incorporates any required disclosure in the Official Statement. Terms and Conditions of Sale. The bond issue is structured using terms and conditions which most advantageously meet current market conditions and the objectives of the City. Generally, the financing structure addresses sizing considerations for the proposed debt, the leased assets and, in consultation with the City's bond counsel, any tax law implications. Official Statement. We provide the City staff with a list of information that will be required disclosure for the financing. Ms. Harrell prepares the official statement and works closely with the City's disclosure counsel to make sure all relevant financial information is included in the Page A-3 official statement, and will provide for distribution to the underwriter, both in printed and electronic formats. Harrell & Company routinely prepares official statements in-house while many financial advisors do not. This provides the firm with the foundation to prepare the best presentation of financial information that is relevant to investors. This generally goes beyond just the cookie- cutter approach to drafting this document. We believe it is the City's chance to shine, and this includes not only making sure that the legal structure and risks are well documented, but that special and important features of the City's financial operations are highlighted. Rating Agency Presentations. Working with staff, Harrell & Company will also determine strategies for submitting the financing to the rating agencies. Ms. Harrell emphasizes the City's operations and management in a comprehensive presentation. Presentations prepared for analysts in connection with the City's most recent financings highlight financial performance in the face of the economic downturn. A comprehensive presentation that markets both the issuer and the financing by laying out the City's objectives and the security for the bonds, disclosing all positive and negative credit factors, and plans to mitigate any negative factor, is critical to obtaining the highest credit rating. Each presentation that Harrell & Company prepares is highly individualized for each public agency. Bond Sale. Ms. Harrell works with the staff to select the most competitive time frame possible for marketing the City's bonds. In the case of this negotiated sale, we: • prepare Request for Proposals for Underwriter and assist in the selection process; • advise the City on the propriety of the underwriter's proposed pricing and compensation relative to the current market conditions; • negotiate to provide the lowest available rates and costs to the City; • provide the City with a pricing analysis and comparison of its transaction with other recent sales of comparable credit quality; and • provide quantitative schedules showing the results of the final pricing. In the case of a competitive sale of bonds, Harrell&Company: • conducts the public sale, using an internet platform such as IPREO®; • arranges for advertising of the bond sale in nationally prominent financial publications • coordinates local publication requirements; and • evaluates the bids and recommend the most favorable bid for award. Market Access. Ms. Harrell uses a variety of sources to obtain current market information. This information is critical in timing of the bond sale as well as in negotiating market rates in a negotiated sale. Page A-4 The primary tool used by Ms. Harrell to access current market information is the Thomson Municipal Market Monitor ("TM3"). TM3 provides real-time data for: Municipal Market Data Index(MMD) Municipal Market News Results of Competitive and Negotiated Trade Data in the Secondary Market Bond Sales in the Primary Market Upcoming Bond Sale Calendar In the pricing phase of a bond issue, we access TM3 for all the recent bond pricings of similar security or credit quality and the MMD Index for the date of the sales. Harrell & Company maintains a data base of these bond sales going back to 2006. In a negotiated sale, we will compile all the relevant information and provide a comparison of the proposed rates on the City's financing with all other comparable financings. Because the market changes over time, we focus primarily on the spread to MMD proposed for the City's financings compared to the actual spreads on other financings. This ensures that the City is getting a competitive market interest rate for its bonds. TM3 also provides data on upcoming competitive and negotiated bond sales, which are reviewed when scheduling the City's bond sale. Typically,the City's bond sale would be scheduled around any large upcoming sales. Other factors taken into account in scheduling the upcoming bond sale is the April 17a' deadline for income taxes, since buyers usually are redeeming their investments around that date instead of making new investments. We recommended delaying the sale for a few weeks past that date to make sure that wasn't a factor in the sale. TM3 has a market news and commentary feature as well. This feature provides real-time information on market conditions, federal reserve board actions and calendars, latest economic news releases and other helpful information used in monitoring the market for planning purposes and for up-to-date pricing trends as the bond sale date approaches. Bond Closing. Following the pricing of the bonds, we prepare final cashflows, complete the official statement with the final pricing information, and begin the process of documentation for closing the transaction. This includes reviewing all the closing documents prepared by bond counsel and making sure that any necessary representations are made by parties to the financing. We will also review the arrangement for closing and transfer of funds. Post Issuance Services. Harrell & Company works with the City to fulfill its continuing disclosure responsibilities under the Securities and Exchange Commission Rule 15c2-12 and the use of the MSRB's Electronic Municipal Market Access("EMMA") system. In addition, every two years subsequent to sale, the rating agencies review each bond issue for changes in the underlying credit factors. Ms. Harrell assists the City staff in maintaining these rating agency relationships, preparing required updated information as well as getting ready for dialogue with the analysts as the reviews occur. Meetings. Ms. Harrell attends any meetings as requested or required and prepares any presentations necessary for the City Council. Page A-5 Harrell &Company proposes the following fees for these services as follows: • A fixed fee of$10,000 for preparation of the preliminary/final official statements for each separately sold and marketed bond issue. • A fixed fee for all other financial advisory services in connection with each series of bond issue separately marketed and sold as follows— Issue Size Fixed Greater Than or Equal To Less Than Fee $0 $5 Million $25,000 $5 Million $10 Million 40,000 $10 Million $15 Million 50,000 $15 Million $25 Million 60,000 $25 Million N/A 75,000 These fees are contingent on the successful sale of bonds and payable from bond proceeds. • Out-of-pocket expenses billed at cost. These fees are also billed at closing. These fees are generally applicable to any type of financing. The total fee including preparation of the official statement will be limited to not more than a total of $70,000 for such issue regardless of the size of the borrowing. Page A-6 CONSULTING SERVICES AGREEMENT—AMENDMENT #1 Harrell& Company Advisors, LLC THIS AMENDMENT TO AGREEMENT FOR CONSULTING SERVICES ("Agreement") is made and entered into on September 22, 2010, by and between the City of Palm Springs, a California charter city and municipal corporation ("City"), and Harrell & Company Advisors, LLC, a Financial Advisor, ("Consultant"). City and Consultant are individually referred to as"Party" and are collectively referred to as the"Parties". AGREEMENT Section 4.4 of the Agreement is hereby amended to read as follows: 4.4 Term. Unless terminated in accordance with Section 4.5 of this Agreement, this Agreement shall continue in full force and effect for three years until September 22, 2013. All other terms of the original contract shall remain in place. Revised:6/16/10 720599.1 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates stated below. "CITY" City of Palm Springs Date: vo to David H. Ready City Manager APPROVED BY CITY COUNCIL APPROVED AS TO FORM: ATTEST �'�a•�o a B .By. ouglas C. Holl ames Thompson, o jq Z0t0 I City Attorney City Clerk "CONSULTANT" Harrell & Company Advisors, LLC a � Z3I � o Date: By Suzan4e4farrell, Managing Director 2 Revised:6/16/10 720599.1 CONSULTING SERVICES AGREEMENT THIS AGREEMENT FOR CONSULTING SERVICES (the "Agreement") is made and entered into this 5' day of Sq2lcm6cr, 2007, by and between the City of Palm Springs, a public body, corporate and politic (the "City"), the Community Redevelopment Agency of the City of Palm Springs, a public body, corporate and politic ("Agency"), and Harrell & Company Advisors, LLC, a financial advisory firm ("Consultant'). RECITALS A. City and Agency require the services of a financial advisor in the development of sound and practical financing plans to implement financings that each undertake from time to time ('Bond Issuance'). B. City and Agency also require the services of a financial advisor to prepare and disseminate periodic reports required under Securities and Exchange Commission Rule 15c2-12 and under various trust indentures for previously issued debt ("Annual Reports"). C. Based on its experience, education, training, and reputation, Consultant is qualified to provide the necessary services to the City and the Agency and desires to provide such services. D. City and Agency desire to retain the services of Consultant. NOW, THEREFORE, in consideration of the promises and mutual agreements contained herein, City and Agency agree to retain and do hereby retain Consultant and Consultant agrees to provide services to the City and Agency as follows: AGREEMENT 1. CONSULTANT SERVICES 1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, Consultant shall perform the work or services set forth in the Scope of Services attached to this Agreement as Exhibit "A" and incorporated herein by reference (the "services" or "work"), which includes the agreed upon schedule of fees. Consultant warrants that all services and work 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 the Scope of Services 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 under this Agreement shall be provided in accordance with all laws, ordinances, resolutions, statutes, rules, and 507639.1 Revised:2109107 000003 regulations of Agency and 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 Agreement, Consultant warrants that it has carefully considered how the work should be performed and fully understands the facilities, difficulties, and restrictions attending performance of the work under this Agreement. 2. TIME FOR COMPLETION. Consultant shall not be accountable for delays in the progress of its work caused by any condition beyond its control and without the fault or negligence of Consultant. Delays shall not entitle Consultant to any additional compensation regardless of the party responsible for the delay. 3. COMPENSATION OF CONSULTANT 3.1 Compensation of Consultant. For the services rendered pursuant to this Agreement, Consultant shall be compensated and reimbursed, in accordance with the schedule of fees set forth in Exhibit "B." 3.2 Method of Payment. Consultant submit to Agency in the form approved by City's Finance Director and Treasurer an invoice for services rendered prior to the date of the invoice. Payments shall be based on the fees as set forth in Exhibit "B" for authorized services performed. City and/or Agency shall pay Consultant for all expenses stated thereon, which are approved by City and/or Agency consistent with this Agreement, within thirty (30) days of receipt of Consultant's invoice. With respect to Bond Issuance, payment for fees and expenses as described in Exhibit "B" shall only be payable from proceeds of any bonds issued, and are contingent on the issuance of such bonds. 3.3 Changes. In the event any change or changes in the Scope of Services/Work is requested by City or Agency, the parties hereto shall execute a written amendment to this Agreement, setting forth with particularity all terms of such amendment, including, but not limited to, any additional fees. An amendment may be entered into: 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; 507639 2 2 Revised:2109/07 000OU 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. 4. TERM 4.1 Term. The term of this Agreement is a 3 year period commencing from the date first written above. 5. COORDINATION OF WORK 5.1 Representative of Consultant. The following principal of Consultant is hereby designated as being the principal and representative of Consultant authorized to act in its behalf with respect to the services and work specified herein and make all decisions in connection therewith: Suzanne Harrell, Managing Director. It is expressly understood that the experience, knowledge, education, capability, and reputation of the foregoing principal is a substantial inducement for City and 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 prior written approval of the Contract Officer. 51 Contract Officer. The Contract Officer shall be the City Manager and Agency Executive Director, or his/her designee. It shall be the Consultant's responsibility to keep the Contract Officer, or his/her designee, fully informed of the progress of the performance of the services and Consultant shall refer any decisions that must be made by City or Agency to the Contract Officer. Unless otherwise specified herein, any approval of City or Agency required hereunder shall mean the approval of the Contract Officer_ 5.3 Prohibition Against Subcontracting or Assignment. The experience, knowledge, education, capability, and reputation of Consultant, its principals and employees, were a substantial inducement for Agency to enter into this Agreement. Therefore, Consultant shall not contract with any other individual or entity to perform in whole or in part the services required hereunder without the express written approval of City or 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 City or Agency. 5.4 Independent Contractor. Neither City nor 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 City and Agency and shall not be an employee of City and Agency and shall remain at all times as to City and Agency a wholly independent 3 Revised:2109107 5(17b31)2 000005 contractor with only such obligations as are consistent with that role; however, City and Agency shall have the right to review Consultant's work product, result, and advice. 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 City or Agency. 5.5 Personnel. Consultant shall not alter the assignment of its personnel without the prior written approval of the Contract Officer. Acting through the City Manager and Agency Executive Director, the City and Agency shall have the unrestricted right to order the removal of any personnel assigned by Consultant by providing written notice to Consultant. 6. INSURANCE I Consultant shall procure and maintain, at its sole cost and expense, policies of insurance as set forth in Exhibit "C", which is attached hereto and is incorporated herein by reference. 7. INDEMNIFICATION. To the fullest extent permitted by law, Consultant shall defend (at Consultant's sole cost and expense), indemnify, protect, and hold harmless City and Agency, its elected officials, officers, employees, agents, and volunteers (collectively the "Indemnified Parties"), from and against any and all liabilities, actions, suits, claims, demands, losses, costs, judgments, arbitration awards, settlements, damages, demands, orders, penalties, and expenses including legal costs and attorney fees (collectively "Claims"), including but not limited to Claims arising from injuries to or death of persons (Consultant's employees included), for damage to property, including property owned by City or Agency, from any violation of any federal, state, or local law or ordinance, and from errors and omissions committed by Consultant, its officers, employees, representatives, and agents, which Claims arise out of or are related to Consultant's performance under this Agreement, but excluding such Claims arising from the negligence or willful misconduct of the City or Agency, its elected officials, officers, employees, agents, and volunteers. Under no circumstances shall the insurance requirements and limits set forth in this Agreement be construed to limit Consultant's indemnification obligation or other liability hereunder. 8. RECORDS AND REPORTS 8.1 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. 8.2 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, q Revised:2/09107 507639.2 000006 including the right to inspect, copy, audit, and make records and transcripts from such records. 8.3 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 City or 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. 8.4 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. 8.5 Cost Records. Consultant shall maintain all books, documents, papers, employee time sheets, accounting records, and other evidence pertaining to costs incurred while performing under this Agreement and shall make such materials available at its offices at all reasonable times during the term of this Agreement and for three (3) years from the date of final payment for inspection by City or Agency and copies thereof shall be promptly fumished to Agency upon request. 9. ENFORCEMENT OF AGREEMENT 9.1 California Law. This Agreement shall be construed and interpreted both as to validity and to performance of the parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim, or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in such county, and Consultant covenants and agrees to submit to the personal jurisdiction of such court in the event of such action. 9.2 Waiver. No delay or omission in the exercise of any right or remedy of a non-defaulting party on any default shall impair such right or remedy or be construed as a waiver. No consent or approval of City or Agency shall be deemed to waive or render unnecessary City or 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. 9.3 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. 5 Revised:2/M07 5076.192 000007 9.4 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, to obtain injunctive relief, a declaratory judgment, or any other remedy consistent with the purposes of this Agreement. M Termination Prior to Expiration of Term. City and Agency reserve 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 Consultant and constitutes an immediate danger to health, safety, and general welfare, the period of notice shall be such shorter time as may be determined by the Agency. 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_ Consultant may terminate this Agreement, with or without cause, upon thirty (30) days written notice to Agency_ 10. CITY AND AGENCY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION 10.1 Non-Liability of City or Agency Officers and Employees. No officer or employee of City or Agency shall be personally liable to the Consultant, or any successor-in-interest, in the event of any default or breach by City or 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. 10.2 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, disability, sexual orientation, national origin, or ancestry. 11. MISCELLANEOUS PROVISIONS 11.1 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 seventy-two (72) hours from the time of mailing if mailed as provided in this Section. G Revised:2/09/07 507639.2 000008 To City: City of Palm Springs Attention: City Clerk 3200 E. Tahquitz Canyon Way Palm Springs, California 92262 To Agency_ Community Redevelopment Agency of the City of Palm Springs Attention: Executive Director 3200 E. Tahquitz Canyon Way Palm Springs, California 92262 To Consultant: Suzanne Harrell, Managing Director Harrell & Company Advisors, LLC 333 City Boulevard West, Suite 1430 Orange, CA 92868 11.2 Integrated Agreement. This Agreement contains all of the agreements of the parties and cannot be amended or modified except by written agreement. 11.3 Amendment. This Agreement may be amended at any time by the mutual consent of the parties by an instrument in writing. 11.4 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. 11.5 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. 7 Revised:2109107 507639.2 000009 IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates stated below. "CITY" City of Palm Springs Date: O By: David H. Ready, J. .D. City Manager APPROVED By egy coUNCIL «AGENCY" laic P' Community Redevelopment Agency of the City of Palm Springs Dater .6 By: David H. Ready, J D. Executive Director r*P ROVED AS TO FORM, ATTEST D u la C. 25617-- Iland, mes Thompson, j j JS/Z�g = gency ounsel City Clerk ! F _ "CONSULTANT" Harrell & Company Advisors, LLC <57 Date: ev u an Q. Harrel Managing Director g ReViSed 2J09/07 307639.2 �} (y U00010 EXHIBIT "A" CONSULTANT'S SCOPE OF SERVICES/WORK Band Issuance 1. Financial Assessment. Develop alternative structures for the Bond Issuance for review and approval by the City or Agency. Size the bond issue, structure those terms and conditions which most advantageously meet demands or current market conditions and the City's or Agency's objectives. 2. Prepare Revenue Projections (if required) for inclusion in the Official Statement. 3. Financing Schedule. Develop and monitor the schedule of activities during the financing to assist the City in meeting agenda deadlines and public notice requirements. 4. Document Review. Review and comment on all legal documents prepared by the City's bond counsel to ensure conformance with the proposed financing structure_ 5. Disclosure Issues. Provide technical support in defining disclosure issues necessary to meet GFOA guidelines. 6. Official Statement. Prepare the Preliminary and Final Official Statement to be used in connection with the offering of the bonds, and in a competitive offering, prepare the official notice of sale and notice of intention to sell bonds. Arrange for printing and mailing of the Preliminary Official Statement. Revise the Preliminary Official Statement for final interest rates and tables related thereto. Arrange for printing and distribution of Final Official Statement within seven business days from the sale date. 7. Rating and Insurance Agencies. Submit documentation, conduct negotiations and attend meetings with rating agencies and bond insurance companies as may be required. 8. Timing of Sale. Advise the City or Agency of market movements, trends and developments and make recommendations as to the timing of the sale of the bonds in relation to market conditions. 9. Pricing (Negotiated Offering). Review the Purchase Contract prepared by the Underwriter and advise on the proposed pricing by the Underwriter. 9 Revised.2/09/07 $07639.2 000011 10.Pricing (Competitive Offering). Coordinate the plans of the bid opening, evaluate the bids submitted, check for mathematical accuracy, advise the City or Agency of the bids and make a recommendation as to award. Revise cash flows for final pricing information and order securities for bond defeasance escrow, if required. 11.Bond Closing. Review the proposed arrangements for closing and delivery of the bonds including certificates and representations of other parties to ensure certification of information relied upon in the financing. 12,Bond Administration. Advise the City and Agency in administration of the financing after bond closing. 13.Attendance at Meetings. Attend all meetings of the working group and the City Council or Agency Board as required. Annual Reports o Continuing Disclosure 1. On an annual basis, prepare the Annual Report required by each Continuing Disclosure Agreement/Certificate and submit the Annual Report to the Dissemination Agent, if applicable, or directly to the Repositories. o Other Reports 2. Prepare the Report of Independent Financial Consultant, if any, required by the indentures. 3. Prepare any additional reports as requested. 10 Revised:2/09107 507639.2 000012 EXHIBIT B SCHEDULE OF COMPENSATION • Bondlssuance Fixed fee of $20,000 for a principal amount of Bonds issued up to $2,000,000 principal amount; an additional $7,500 for each $1,000,000 principal amount of Bonds issued in excess of $2,000,000 up to $4,000,000; an additional $5,000 for each $1,000,000 principal amount of Bonds issued in excess of $4,000,000 up to $10,000,000; an additional $2,500 for each $1,000,000 principal amount of Bonds in excess of $10,000,000 up to $15,000,000; and an additional $1,250 for each $1,000,000 principal amount of Bonds in excess of $15,000,000, plus all out-of-pocket expenses, payable upon delivery of the Bonds. • Annual Reports o Continuing Disclosure For each Annual Continuing Disclosure Report: Type of Financing Fee Tax Allocation $1,200 first issue for a project area $200 each subsequent issue for project area General Fund Lease $750 first issue, no charge for each subsequent issue Revenue (Enterprise Fund) $1,500 each issue Special Tax/Assessment $1,500 each issue Payable upon completion of Annual Report Revised:2/09/07 507639.2 � �� � 2 • Reports Report of Independent Financial Consultant re PFC $1,000.00 Bond Redemption -1998 PFC Bonds Report of Independent Financial Consultant re PFC $1,000,00 Bond Redemption -2006 PFC Bonds Preparation of the Payment Schedules — 1998 AD 155 No Charge Bonds Additional Reports of Independent Financial $500.00- Consultant $1,000.00 Payable upon completion of Annual Report 507639 3 z Revised:7109/07 0000Y12 EXHIBIT "C" INSURANCE PROVISIONS Including Verification of Coverage, Sufficiency of Insurers, Errors and Omissions Coverage, Minimum Scope of Insurance, Deductibles and Self-Insured Retentions, and Severability of Interests (Separation of Insureds) 13 Revised:2I0M7 5076392 0000.�� Insurance Consultant shall procure and maintain, at its sole cost and expense, and submit concurrently with its execution of this Agreement, in a form and content satisfactory to City and Agency, public liability and property damage insurance against all claims for injuries against persons or damages to property resulting from Consultant's performance under this Agreement. Consultant shall also carry workers' compensation insurance in accordance with California workers' compensation laws. Such insurance shall be kept in full force and effect during the term of this Agreement, including any extension thereof, and shall not be cancelable without thirty (30) days written notice to City and Agency of any proposed cancellation. Certificates of insurance evidencing the foregoing and designating the City and Agency, its elected officials, officers, employees, agents, and volunteers as additional named insureds by original endorsement shall be delivered to and approved by City and Agency prior to commencement of services. The procuring of such insurance and the delivery of policies, certificates, and endorsements evidencing the same shall not be construed as a limitation of Consultant's obligation to indemnify City and Agency, its elected officials, officers, agents, employees, and volunteers. A. Minimum Scope of Insurance. The minimum amount of insurance required hereunder shall be as follows: 1. Comprehensive general liability and personal injury with limits of at least one million dollars ($1,000,000.00) combined single limit coverage per occurrence; 2. Professional liability (errors and omissions) insurance with limits of at least three million dollars ($3,000,000.00) per occurrence; and, 3. Workers' Compensation insurance in the statutory amount as required by the State of California and Employer's Liability Insurance with limits of at least one million dollars $1 million per occurrence. For any claims related to this Agreement, Consultant's insurance coverage shall be primary insurance as respects City or Agency and its respective elected officials, officers, employees, agents, and volunteers. Any insurance or self-insurance maintained by City or Agency and its respective elected officials, officers, employees, agents, and volunteers shall be in excess of Consultant's insurance and shall not contribute with it. For Workers' Compensation and Employer's Liability Insurance only, the insurer shall waive all rights of subrogation and contribution it may have against City or Agency, its elected officials, officers, employees, agents, and volunteers. 8. Errors and Omissions Coverage. If Consultant provides claims made professional liability insurance, Consultant shall also agree in writing either (1) to purchase tail insurance in the amount required by this Agreement to cover claims made within three years of the completion of Consultant's services under this Agreement, or (2) to maintain professional liability insurance coverage with the same carrier, or equivalent coverage with another company, in the amount required by this Agreement 14 Revised:2JO9107 507639.2 000016 00016 for at least three years after completion of Consultant's services under this Agreement. Consultant shall also be required to provide evidence to City and Agency of the purchase of the required tail insurance or continuation of the professional liability policy. C. Sufficiency of Insurers. Insurance required herein shall be provided by authorized insurers in good standing with the State of California. Coverage shall be provided by insurers admitted in the State of California with an A.M. Best's Key Rating of A-, Class VII, or better, unless otherwise acceptable to the City and Agency. D. Verification of Coverage. Consultant shall furnish City and Agency with both certificates of insurance and endorsements, including additional insured endorsements, effecting all of the coverages required by this Agreement. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All proof of insurance is to be received and approved by the City and Agency before work commences. City and Agency reserve the right to require Consultant's insurers to provide complete, certified copies of all required insurance policies at any time. Additional insured endorsements are not required for Errors and Omissions and Workers' Compensation policies. E. Deductibles and Self-Insured Retentions. Any deductibles or self- insured retentions must be declared to and approved by the City and Agency. At the option of the City and Agency, either the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City andAgency, its elected officials, officers, employees, agents, and volunteers; or, Consultant shall procure a bond guaranteeing payment of losses and related investigations, claim administration, and defense expenses. F. Severability of Interests (Separation of Insureds). This insurance applies separately to each insured against whom claim is made or suit is brought except with respect to the limits of the insurer's liability. 15 Revised 2109/07 507639.2 00001a