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09-079 Colantuono & Levin, PC ti Colantuono & Levin, PC 11406 Pleasant Valley Road Michael G. Colantuono Penn Valley, CA 95946-9001 MColantuono@CLLAW.Us Main: (530) 432-7357 (530) 432-7359 FAX: (530) 432-7356 WWW.CLLAW.US ` July 2, 2009 VIA.E-MAIL AND U.S. MAIL Carol A. Korade, City Attorney City of Cupertino 10300 Torre Avenue Cupertino, CA 95014-3202 Re: Representation of the City of Cupertino Dear Carol: As you asked, I write to propose the terms under which we will.assist you in representing your client, the City of Cupertino ("you" or "City") by providing such support as you request on public finance issues, including a proposed update of the City's utility users tax ordinance, and other municipal law matters within our expertise. At present, our sole project for you is to provide advice and support to the City in drafting and negotiating with Apple and Hewlett- Packard the update of the telephone component of the City's utility users tax. .If we can assist .you on other matters, please let me know. Colantuono & Levin and all of its professionals are very pleased to have the opportunity to represent you in this matter. This letter sets forth the basis upon which our firm will provide legal services to you and bill you for services and costs. The firm maintains a conflict of interest index which lists all clients of our firm and matters in which we represent them. We will not represent any party with an interest that may be adverse to an indexed personwithout first determining if a professional conflict of interest would arise. We propose to index the following with respect to this matter: Client-Affiliated Parties: City of Cupertino Carol Korade David Woo Adverse Parties: Apple Computer, Inc. Hewlett-Packard Development Company, L.P. All telephony providers doing business in Cupertino. 94655.1 k Carol A. Korade, Esq. July 2, 2009 Page 2 Please let me know if any of these names are incorrect or if there are other parties with an interest in this matter that we�should list, such as any affiliates of Apple and HP or other large utility consumers in the City who might oppose the updated tax. Unless we hear from you to the contrary, we will assume that the above listing is accurate and complete. We have reviewed our files and our conflicts index and have no other client relationships which create conflicts of interest under the Rules of.Professional Conduct except as follows: We represent the San Jose Water Company, an investor-owned utility which provides domestic water service in Cupertino and its neighboring cities (SJWC), with respect to groundwater extraction charges imposed on SJWC and other groundwater users in Santa Clara County by the Santa Clara Valley Water'District. SJWC operates Cupertino's water utility pursuant to a lease and is adverse to Cupertino with respect to that lease. However, Cupertino and SJWC have similar interests with respect to the work we are doing for SJWC in that neither wishes its customers or residents to pay excessive water rates due to excessive groundwater charges. We do not and will not represent SJWC on issues, other than the groundwater extraction charge, as to which its interests are adverse to Cupertino's without your further consent. By signing where indicated below, however, you consent to our continued representation of SJWC on this issue and other issues as to which its interests are not adverse to Cupertino'.s while simultaneously representing Cupertino. You should consider carefully the pros and cons of granting this conflict waiver. Among the pros are your access to our services on the work we are to do for you and our continued service to SJWC in an effort to avoid costs which must be passed on to Cupertino residents. Among the cons are the potential that we will be perceived to have divided loyalties given that SJWC and Cupertino are adverse on other issues. Whether to grant this consent is a business judgment as to which the City should consult with you. As we have discussed, the nature of the matter makes it impossible for us to precisely estimate the total fees that may be incurred. You will receive monthly statements informing you of the fees and.costs incurred during the prior month. We will, of course, do our best to represent you efficiently and without undue expense. I will have primary responsibility for your representation, and the firm will use other attorneys and legal assistants in the best exercise of our professional judgment. If at any time you have questions, concerns or,criticisms, please contact me at once. Naturally, we expect you to keep us reasonably informed of all significant developments in matters relating to this representation. 94655.1 w Carol A. Korade, Esq. July 2, 2009 Page 3 We review all statements before they are issued to ensure that the amount charged is appropriate. The statement for fees is simply the product of the hours worked multiplied by the hourly rates for the attorneys.and legal assistants who did the work. Our hourly rates are based upon the experience, reputation and ability of the lawyer or legal assistant performing the services, and for 2009 range between $150 and $375 per hour for attorneys' time, and between $110 and $135 for the time of paralegals and legal assistants. As a courtesy to you, we will reduce our rates on this project to $280 per hour for the work of any our attorneys; this is a discount from my standard billing rate of$375 per hour. Our rate structure in general and the rates of particular lawyers may be increased from time to time, and are usually adjusted as of the beginning of each calendar year. We are open to alternative billing arrangements for particular tasks; such as flat fees, not to exceed amounts, and the like. If you wish to discuss such arrangements for a future assignment, please let me know. It may be necessary to bill you for items such as, but not limited to, authorized travel, long-distance telephone calls, filing fees, photocopying, word processing, secretarial overtime, computerized legal research and the like. These items are separately itemized on our statement as "disbursements." These amounts will be billed in addition to our fees. We will send you monthly statements, and expect payinent within 15 days of the billing date. If payment is not received within 30 days of the billing date, we reserve the right to charge interest on the unpaid balance at the rate of 1%per month and to terminate our representation. We rarely have disputes with clients over our fees. Nevertheless, you should.be aware that you are entitled to require that any fee dispute be resolved by binding arbitration in Los Angeles or Nevada Counties pursuant to the arbitration rules for legal fee disputes of the Los Angeles and Nevada County Bar Associations. You agree that all disputes between us regarding the services rendered or fees charged not resolved by the County Bar Arbitration procedures shall be submitted to binding arbitration in San Francisco or Sacramento to be conducted by JAMS in accordance with its commercial arbitration.rules. You have the right to terminate our representation at any time. We have the same right, subject to an obligation to give you reasonable notice to arrange alternative representation. In either circumstance, you agree to secure new counsel to represent you as quickly as possible and to cooperate fully in the substitution of the new counsel as counsel of record in any litigation in which we may subsequently agree to represent you. Notwithstanding the termination of our representation, you will remain obligated to pay to us all fees and costs incurred prior thereto. I apologize for the formality of this letter, but we are required by California law to provide this information to you in writing. We are also required to inform you that we currently maintain professional. liability insurance coverage. 94655.1 w Carol A. Korade, Esq. July 2, 2009 Page 4 Please review the foregoing and, if it meets with your approval, execute it and return it to me by fax and in the enclosed envelope. If you have any questions, please feel free to call ane at the direct-dial number above. 'hank you for the opportunity to represent you! Very truly yours--.,.,_.._...n...- Michael G. Colantuono MGC:mgc Enclosures (second original and return envelope) On behalf of the City of Cupertino, I agree to retain Colantuono & Levin, P.C. to provide legal. services as set forth above and consent to the firm's simultaneous representation of Cupertino and the San Jose Water Company, as outlined above. Printed name: Title: Date: 94655.1 Michael G, Colantuono MColantuono@CLLAW.US (530) 432-7359 Colantuono & Levin, PC 1 1406 Pleasant Valley Road Penn Valley, CA 95946-9001 Main: (530) 432-7357 FAX: (530) 432-7356 WWW.CLLAW.US July 8, :'009 VIA E-MAIL AND U.S. MAIL Dave Knapp, City Manager City of Cupertino 10300 Torre Avenue Cupertino, CA 95014-3202 Re: Representation of the City of Cu erp tino Dear Mr. Knapp: As Ms. Korade asked, I write to propose- the terms under which we will assist her in representing the City of Cupertino ("you" or "Cit:y") by providing such support as she requests on public finance issues, including a proposed update of the City's utility users tax ordinance, and other municipal law matters within our expertise. At present, our sole project for you is to provide advice and support to the City in drafting and negotiating with Apple and Hewlett- Packard the update of the telephone component of the City's utility users tax. If we can assist you on other matters, please let me know. Colantuono & Levin and all of its professionals are very pleased to have the opportunity to represent you in this matter. This letter sets forth the basis upon which our firm will provide legal services to you and bill you for services and costs. The firm maintains a conflict of interest index which lists all clients of our firm and matters in which we represent them. We will not represent any party with an interest that may be adverse to an indexed person without first determining if a professional conflict of interest would arise. We propose to index the following with respect to this matter: Client-Affiliated Parties: Adverse Parties: City of Cupertino Carol K~~rade David ~Noo Dave Knapp Apple Comf~uter, Inc. Hewlett-Packard Develoi~ment Company, L.P. 94655.2 Dave Knapp, City Manager July 8, 2009 Page 2 All telephony providers doing business in Cupertino. Please let me know if any of these names are incorrect or if there are other parties with an interest in this matter that we should list, such as a:ny affiliates of Apple and HP or other large utility consumers in the City who might oppose the; updated tax. Unless we hear from you to the contrary, we will assume that the above listing is accurate and complete. We have reviewed our files and our conflicts index and have no other client relationships which create conflicts of interest under the Rules cf Professional Conduct except as follows: We represent the San Jose Water Company, an investor-owned utility which provides domestic water service in Cupertino and its neighboring cities (SJ'JVC), with respect to groundwater extraction charges imposed on SJWC and other groundwater users in Santa Clara County by the Santa Clara Valley Water District. SJWC operates Cupertino's water utility pursuant to a lease and is adverse to Cupertino with respect to that lease. However, Cupertino and SJWC have similar interests with respect to the work we are doing for SJWC in that neither wishes its customers or residents to pay excessive water rates due to excessive groundwater charges. We do not and will not represent SJWC on issues, other than the groundwater extraction charge, as to which its interests are adverse to Cupertino's without your farther consent. By signing where indicated below, however, you consent to our continued representation of SJWC on this issue and other issues as to which its interests are not adverse to Cupertino's while simultaneously representing Cupertino. You should consider carefully the pros and cons of granting this conflict waiver. Among the pros are your access to our services on the work we are to do for you and our continued service to SJWC in an effort to avoid costs which must be passed on to Cupertino residents. Among the cons are the potential that we will be perceived to have divided loyalties given that SJWC and Cupertino are adverse on other issues. Whether to grant this consent is a business judgment as to which the City should consult with Ms. Korade or other independent counsel. As we have discussed, the nature of the matter makes it impossible for us to precisely estimate the total fees that maybe incurred. You `vill receive monthly statements informing you of the fees and costs incurred during the prior month. We will, of course, do our best to represent you efficiently and without undue expense. I will have primary responsibility for your representation, and the firm will use other attorneys and legal assistants in the best exercise of our professional judgment. If at any time you have questions, concerns or criticisms, please contact me at once. Naturally, we expect you to keep us reasonably informed of all significant developments in matters relating to this representation. 94655.2 Dave Knapp, City Manager July 8, 2009 Page 3 We review all statements before they are issued to ensure that the amount charged is appropriate. The statement for fees is simply the product of the hours worked multiplied by the hourly rates for the attorneys and legal assistants v~~ho did the work. Our hourly rates are based-upon the experif~nce, reputation and ability of the lawyer or legal assistant performing the services, and for 20Ci9 range between $150 and $375 per hour for attorneys' time, and between $110 and $135 for the time of paralegals and legal assistants. As a courtesy to you, we will reduce our rates on this project to $280 per hour for the work of any our attorneys; this is a discount from my standard billing rate of $375 per hour. Our rate structure in general and the rates of particular lawyers maybe increased from time to time, and are usually adjusted as of the beginning of each calendar year. We are open to alternative billing arrangements for particular tasks; such as flat fees. not to exceed amounts, and the like. If you wish to discuss such arrangements for a future assignment, please let me know. It may be necessary to bill you for items such as, but not limited to, authorized travel, long-distance telephone calls, filing fees, photocol-ying, word processing, secretarial overtime, computerized legal research and the like. These items are separately itemized on our statement as "disbursements." These amounts will be billed in addition to our fees. We will send you monthly statements, and expect payment within 15 days of the billing date. If payment is not received within 30 days of the billing date, we reserve the right to charge interest on the unpaid balance at the rate of 1 % pe~° month and to terminate our representation. We rarely have disputes with clients over our fees. Nevertheless, you should be aware that you are entitled to require that any fee dispute be resolved by binding arbitration in Los Angeles or Nevada Counties pursuant to the arbitration rules for legal fee disputes of the Los Angeles and Nevada County Bar Associations. You agree that all disputes between us regarding the services rendered or fees charged not resolved by the County Bar Arbitration procedures shall be submitted to binding arbitration in San Fr;~ncisco or Sacramento to be conducted by JAMS in accordance with its commercial arbitrati~~n rules. You have the right to terminate our representation at any time. We have the same right, subject to an obligation to give you reasonable notice to arrange alternative representation. In either circumstance, you agree to secure new cour.~sel to represent you as quickly as possible and to cooperate fully in the substitution of the new ccunsel as counsel of record in any litigation in which we may subsequently agree to represent yo~a. Notwithstanding the termination of our representation, you will remain obligated to pay to us all fees and costs incurred prior thereto. I apologize for the formality of this letter, -but we are required by California law to provide this information to you in writing. We are also required to inform you that we currently maintain professional liability insurance coverage. 94655.2 Dave Knapp, City Manager July 8, 2009 Page 4 Please review the foregoing and, if it meets with your approval, execute it and return it to me by fax and in the enclosed envelope. If you have any questions, please feel free to call me at the direct-dial number above. Thank you for the opportunity to represent you! Very trulCyour Michael G. Colantuono MGC:mgc Enclosures (second original and return envelope) On behalf of the City of Cupertino, I agree to retain Colantuono & Levin, P.C. to provide legal services as set forth above and consent to the firm's simultaneous representation of Cupertino and the San Jose Water Company, as outlined abo~re. Dave Knapp, City Manager (date) 94655.2