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13-R-32 - Memorandum of Understanding with SCUCIADRESOLUTION NO. 13-R-32 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING A MEMORANDUM OF UNDERSTANDING WITH SCHERTZ-CIBOLO-UNIVERSAL CITY INDEPENDENT SCHOOL DISTRICT, AND OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the City staff of the City of Schertz (the "City") has recommended that the City enter into a Memorandum of Understanding with Schertz-Cibolo-Universal City Independent School District (the "District") relating to certain legal matters involved in negotiating contracts for the proposed joint Natatorium project and; WHEREAS, the City Council has determined that it is in the best interest of the City to contract with the District pursuant to the Memorandum of Understanding attached hereto as Exhibit A (the "MOU"). BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council hereby authorizes the City Manager to execute and deliver the MOU with the District in substantially the form set forth on Exhibit A. Section 2. The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the City Council. Section 3. All resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict, and the provisions of this Resolution shall be and remain controlling as to the matters resolved herein. Section 4. This Resolution shall be conshued and enforced in accordance with the laws of the State of Texas and the United States of America. Section 5. If any provision of this Resolution or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Resolution and the application of such provision to other persons and circumstances shall nevertheless.be valid, and the City Council hereby declares that this Resolution would have been enacted without such invalid provision. Section 6. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Chapter 551, Texas Government Code, as amended. Section 7. This Resolution shall be in force and effect from and after its final passage, and it is so resolved. PASSED AND ADOPTED, this 9th day of April, 2013. CIT S HE T ,TEXAS Michael R. Carpenter, Mayor ATTEST: Brenda Dennis, City Secretary (CITY SEAL) EXHIBIT A MEMORANDUM OF UNDERSTANDING See attached A-1 MEMORANDUM OF' UNDERSTANDING This Memorandum of Understanding (this "Memorandum") is between the City of Schertz, Texas (the "City") and the Schertz-Cibolo-Universal City Independent School District (the "District") and relates to the provision of certain legal services in connection with a proposed joint natatorium project involving the City and the District, as further described on Exhibit A (the "Project"). Existing Leal Relationships. The City Attorney for the City is Katherine Tapley of the law firm of Fulbright & Jaworski L.L.P. ("Fulbright"). Other attorneys with Fulbright, including but not limited to Michael Spain and Samantha Dyal, also per~ortn City Attorney services for the City. General Counsel for the District is Gem•ge Grimes of the law firm of Walsh, Anderson, Gallegos, Green & Trevino, P.C. ("Walsh Anderson"). Other attorneys with Walsh Anderson also perform General Counsel services for the Dishict. Fulbright is the designated Bond Counsel for both the City and the Dishict. Jeff Kuhn has for many years been the lead Fulbright partner acting as Bond Counsel for the City (the "City's Bond Counsel"), and Bob Dransfield has for many years been the lead Fulbright partner acting as Bond Counsel for the District (the "Dishict's Bond Counsel"). Anticipated Anreements. The relationship between the City and the District with respect to designing, fmancing, constructing, maintaining, and operating the Project will involve allocation between the City and the District of current and ongoing rights, duties, obligations, and liabilities of the City and the District. The City and the District anticipate that such allocation will be set forth in detail in a defmitive agreement or agreements (whether one or more, the "Agreements"). The preparation of such Agreements will involve presentations to and input from the City Council of the City and the Board of Trustees of the Dishict and will involve negotiations between (for the City) designated staff of the City and the City Attorney and (for the District) designated staff of the District and the District's General Counsel. In addition, because the financing, constuction, ownership, and ongoing maintenance and operation of the Project will likely involve legal issues related to public finance matters, each of the City and the District expects to consult Bond Counsel. City Attorney and District General Counsel. This Memorandum documents the agreement of the City and the District that Fulbright shall represent the City as City Attorney in connection with the Project and the negotiation and drafting of the Agreements, and Walsh Anderson shall represent the District as its General Counsel in connection with the Project and the negotiation and drafting of the Agreements. In such representation, the District agrees that Fulbright, in its capacity as City Attorney, may hold in confidence its communications with the City staff and its communications with the City Council of the City during executive sessions of the City. Furthermore, the District agrees that, since there is no substantial relationship between Fulbright's representation of the City as City Attorney and Fulbright's representation of the District as the District's Bond Counsel, no conflict currently exists which would prohibit Fulbright's representation of the City in negotiations with the City. Bond Counsel. This Memorandum also documents the agreement of the City and the District with respect to Bond Counsel matters relating to the Project and the Agreements ("Bond 50611593.2 Counsel Matters"). With respect to Bond Counsel Matters, the City and the District desire to be jointly represented by Bob Dransfield of Fulbright. The City and the District do not anticipate the issuance of any joint bond obligation; they acknowledge, however, that as noted above the financing, consttuction, ownership, and ongoing maintenance and operation of the Project will likely involve legal issues related to public fmance matters. Mr. Dransfield may be assisted from time to time on Bond Counsel Matters by other Fulbright attorneys, but no Fulbright attorney providing City Attorney services will be involved with 1VIr. Dransfield on Bond Counsel Matters. Irr the remainder of this Bond Counsel section of this Memorandum, references to Fulbright mean NIr. Dransfield and other Fulbright attorneys working with him on Bond Counsel Matters. While the benefits of being jointly represented on Bond Counsel Matters may be obvious to the City and the Dishict, there are also several concerns that each should consider carefully before agreeing to such joint representation. These concerns generally exist any time joint representation of two or more clients is undertaken in the same matter by the same lawyer or lawyers. Nevertheless, these concerns should be understood by each of the City and the District at the outset. The first concern relates to the sharing of confidential information. All communications between or among the City and the Dishict and Fulbright as to Bond Counsel Matters will be treated as strictly confidential under the attorney-client privilege, and those communications cannot be disclosed to any third parties without the City's and the District's consent. Both the City and the District will enjoy the same privilege with respect to communications with Fulbright as to Bond Counsel Matters. Both the City and the District should be aware, however, that, if Fulbright jointly represents the City and the District as to Bond Counsel Matters, there will be no privilege of confidentiality as to those matters as between the City and the District. Thus, for example, any communications to Fulbright by either client in the joint representation would generally be deemed received by the other client. This does not mean that Fulbright will automatically repeat to each client everything that one client confides in Fulbright as to Bond Counsel Matters. It does mean, however, that either client will generally have the right to fmd out what the. other client tells Fulbright concerning Bond Counsel Matters or what Fulbright advises the other client to the extent such information is any way relevant to Bond Counsel Matters. Ethics rules require Fulbright to adhere to this rule in order to ensure that Fulbright can fulfill its obligations to both clients as to Bond Counsel Matters. This does not mean that anyone else (i. e., any other client in other matters or• any non- client) can gain access to such communications through Fulbright. Indeed, the privilege protecting the confidentiality of such communications would remain fully intact as to third paz•ties. Furthermore, neither the City nor the District would be able to waive that privilege without the other's consent. This is an important point, and each of the City and the District, by execution of this Memorandum, acknowledges and agrees that it cannot and will not attempt to waive the attorney-client privilege or attorney work product privilege that is common to it and the other jointly-represented client without the consent of both the City and the District. If either the City or the District considers imparting to Fulbright any information that the client may wish to keep secret from the other client, Fulbright will not be able to maintain such confidentiality from the other client if the information is at all relevant to the representation of the other client as to Bond Counsel Matters. It is extremely important that, prior to the time 50611593.2 - 2 - either the City or the District discloses to Fulbright any information that it desires to be kept confidential from the other client, it should so notify Mr. Dransfield in writing of its intention but not disclose the precise information. Prior to receiving the precise information, Mr. Dransfield will determine whether it is appropriate for him to hold such type of information confidential from the other client and will so inform the client which requested confidentiality. Itr the event that it is necessary for Fulbright to withdraw as counsel for either the City or the District in connection with Bond Counsel Matters or Fulbright's representation of either the City or the District as to Bond Counsel Matters otherwise terminates, the City and the District should understand that any information either has provided to Fulbright that is relevant to the representation of the other client may be used for the benefit of or supplied to the other client to be used by the other client as deemed appropriate in furtherance of its interests. If Fulbright is to undertake this joint representation, the City and the District agree that as soon as either becomes aware (or suspects) that its interests may be in conflict with those of the other client with respect to Bond Counsel Matters, it will inform Mr. Dransfield immediately in writing and will refrain from revealing any further confidential information to Fulbright until the possible conflict is resolved. If the City and the District disagree as to Bond Counsel Matters, they will so inform Mr. Dransfield in writing, and 14r•. Dransfield will ask them to resolve their differences between themselves, without his assistance. If the unresolved differences are serious enough, Mr. Dransfield may be required by applicable ethics rules to withdraw fiom the joint representation completely. Other Public Finance Matters. Both the City and the District ar•e currently involved in public fmance matters totally unrelated to the Project and the Agreements, and the above- described joint representation arrangements do not apply to such other matters. As to such matters, the City may continue to work with the City's Bond Counsel as it always has, and the District may continue to work with the District's Bond Counsel as it always has. Leal Fees. The City and the Dishict will each continue its existing fee arrangement with the City Attorney and the District's General Counsel, respectively. The City and the District each agree that it will be responsible for the payment of one-half of the legal fees and expenses and othet• charges for Fulbright's joint representation on Bond Counsel Matters; provided, if services provided by Fulbright in its joint representation clearly benefit only the City or the Distict, the fees and expenses and other charges for such services will be paid by the benefitted pazt3'• City and District A>7reement. The City Council of the City and appropriate staff of the City have conferred with the City Attorney and the City's Bond Counsel, and the Board of Trustees of the Distict and appropriate Dishict staff have conferred with the District's General Counsel and the District's Bond Counsel, concerning this Memorandum and the above-described roles applicable to Fulbright with respect to the Project and the Agreements. Following such discussions, the City Council and the Board of Trustees has each by official action (i) agreed that such arrangement is acceptable, (ii) authorized the City Manager and Superintendent, respectively, to execute and deliver this Memorandum to the other parties hereto, and (iii) directed its staff and legal counsel to proceed with the planning of the Project and the negotiation and drafting of the Agreements as described herein for presentation to the City Council and the Board of Trustees, respectively, for consideration and action. soeiisse.z - 3 - Effective Date; Termination. This Memorandum is effective as of the date it has been fully executed on behalf of the City and the District and shall continue in effect until either the City or the Dishict notifies the other in writing that it desires to terminate this Memorandum. Such notice shall be delivered by mail or in person to the principal business address of the City (attention City Manager) or the Dishict (attention Superintendent of Schools), as the case may be. AGREED AND CONSENTED: CITY OF SCHERTZ, TEXAS By: John . Kesse ,City Manager SCHERTZ-CIBOLO-UNIVERSAL CITY INDEPENDENT SCHOOL DISTRICT By: Greg Gibson, Superintendent of Schools Date of execution: April °f , 2013 Date of execution: April _, 2013 By their acknowledgment below, the City Attorney and Mi•. Dransfield as Bond Counsel have agreed to the above-described roles of Fulbright with respect to the Project and the Agreements. FULBRIGHT & JAWORSKI L.L.P. Katherine A. Tapley, as City Attorney Robert D. Dransfield, as Bond Counsel 50611593.2 - 4 - EXHIBIT A THE NATATORIUM PROJECT The natatorium facility is currently in the master planning phase. It is anticipated that the main pool will be designed for competition quality and will be 25 meters x 25 yards and not less than 6 feet deep, with currently undefined bleacher seating. The facility may also contain a second body of water cmrently referred to as a "zero entry" pool. Irr addition to the aquatic aspect, there will also be associated support spaces that would include toilet/locker rooms, meeting facilities, offices, a small lobby space, and other mechanical electrical, and plumbing space. It is anticipated that the footprint of the facility will be in the 25,000-30,000 square foot range. The existing City recreation center parking will be expanded as part of the overall project design. The new facility may or may not be connected to the existing City recreation center (operated by the YMCA by contract with the City) depending on the final budget constraints. 50611593.2 ~ ~ A-1