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HomeMy WebLinkAbout42-03 RESOLUTIONRESOLUTION NO. 42-03 A RESOLUTION TO APPROVE A BOND COUNSEL AGREEMENT WITH KUTAK ROCK, LLP WHEREAS, Kutak Rock, LLP with lead counsel Gordon M. Wilbourn was selected by the City Professional Selection Committee to be Fayetteville's bond counsel through 2003. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council of the City of Fayetteville, Arkansas hereby approves the engagement letter (attached as Exhibit A) and all of its terms wherein the City engages Kutak Rock, LLP as its bond counsel for 2003. PASSED and APPROVED this the lst day of April, 2003. By: �Sfrwak, Sondra Smith, City Clerk APPROVED. By ,4„.t. "sad D COODY, Mayor/ NORTHWEST ARKANSAS OFFICE THE THREE 51 BUILDING 2I4 WEST DICK•ON STREET FAYETTEVILLE. ARKANSAS 7E701-5271 •111-•73.4200 Honorable Dan Coody City of Fayetteville, Arkansas 113 W. Mountain Fayetteville, AR 72701 KUTAK ROCK LLP SUITE 1100 425 WEST CAPITOL AVENUE LITTLE ROCK. ARKANSAS 72201-3409 501-975-3000 FACSIMILE 501-975-3001 www.kutakrock com March 11,2003 Re: City of Fayetteville, Arkansas — 2003 Bond Counsel Services Dear Mayor Coody: ATLANTA CHICAGO DENVER 0E5 MOINES FAYETTEVILLE CITY LINCOLN NEWPORT PEACH OKLAHOMA CITY OM•HA PASADENA RICHMOND SCOTTSDALE WASHINGTON The purpose of this engagement letter is to set forth certain matters concerning the services we would expect to perform as counsel to the City of Fayetteville, Arkansas (the "City") in connection with its financings and refinancings of various capital improvements and equipment during the calendar year 2003 (the "2003 Projects"). Specifically excluded from the provisions of this letter are financings relating to the acquisition, construction and equipping of the City's proposed wastewater treatment facility, which financings are the subject of a separate engagement letter between Kutak Rock LLP and the City dated June 5, 2000. We understand that the 2003 Projects may be financed utilizing various structures and revenue sources, including, but not limited to, general obligation bonds and notes, special revenue bonds and notes, sales and use tax bonds and notes, and lease/purchase arrangements. SCOPE OF ENGAGEMENT (a) Where the issuance of the City's bonds or notes ("Bonds") occurs in connection with this engagement, we would serve a.s bond counsel ("Bond Counsel") to the City and would expect to perform the following duties for each such issuance: Subject to the completion of proceedings to our satisfaction, render our legal opinion (the "Bond Opinion") regarding the validity and binding effect of the Bonds, the source of payment and security for the Bonds, and the excludability of interest on the Bonds from gross income for federal and Arkansas incomc tax purposes; (2) Prepare and review resolutions, ordinances, documents and certificates necessary or appropriate to the authorization, issuance and delivery of the Bonds, coordinate the authorization and execution of such resolutions, ordinances, documents and certificates, and review enabling legislation; 1045784.01 KUTAK ROCK LLP Honorable Dan Coody March 11,2003 Page 2 (3) Assist the City and any underwriter of the Bonds in seeking from other govemmental authorities such approvals, permissions and exemptions as we determine are necessary or appropriate in connection with the authorization, issuancc and delivery of the Bonds; (4) Review legal issues relating to the structure of the Bond issue; (5) Review certified proceedings; (6) Undertake such additional duties as are necessary to render our Bond Opinion; (7) Assist the City in presenting information to bond rating organizations and providers of credit enhancement relating to legal issues affecting the issuancc of the Bonds; and (8) Draft the continuing disclosure undertaking of the City. In addition to the customary duties of Bond Counsel set forth above, we understand that we may additionally be asked to (i) draft the Bond Purchase Agreement between the City and thc underwriter(s) with respect to the Bonds and (ii) assist the City in preparing the official statement (the "Official Statement") with respect to the Bonds, and, subject to the satisfactory completion of our review, provide to the City written advice that, in the course of our participation, no information has come to our attention which leads us to believe that the Official Statement, as of its date (except for the financial statements, other statistical data, feasibility reports and statements of trends and forecasts, and information concerning any credit enhancer and The Depository Trust Company, contained in thc Official Statement and its appendices, as to which we will express no belief), contains any untrue statement of material fact or omits to state any material fact necessary to make the statements in the Official Statement, in light of the circumstances under which they were, not misleading. Although it is permissible for Bond Counsel to undertake the activities described in this paragraph, they are typically performed by counsel to the underwriter. Each Bond Opinion will be addressed to the City and will be delivered by us on the date that an issue of Bonds is exchanged for the purchase price thereof (the "Closing"). Each Bond Opinion will be based on facts and law existing as of its date. In rendering our Bond Opinion, we will rely upon the certified proceedings and other certifications of public officials and other persons furnished to us without undertaking to verify the same by independent investigation, and we will assume continuing compliance by the City with applicable laws relating to the Bonds During the course of this engagement, we will rely on the City to provide us with complete and timely information on all developments pertaining to any aspect of each issue of Bonds and their security. 10-4578401 KUTAK ROCK LLP Honorable Dan Coody March 11,2003 Page 3 (b) Where a 2003 Project is to be financed through a lease/purchase agreement ("Lease/Purchase Agreement"), we would serve as Bond Counsel to the City in conncction with each such Lease/Purchase Agreement and would expect to perform the same or similar duties as those set forth above in connection with the issuance of Bonds, modified as necessary to meet the requirements of the particular leasing program; and (c) Where a 2003 Project is to be financed with the proceeds of any sales and use tax, whether or not in connection with the issuance of Bonds or a Lease/Purchase Agreement, we would serve as special counsel to the City with respect to election mattcrs, and would expect to prepare or assist in the preparation of all resolutions, ordinances, ballots and other materials for such election and, upon request, to attend all public meetings relating to such election. Our duties in this engagement are limited to those expressly set forth above. Among other things, our duties will not include: Preparing requests for tax rulings from the Internal Revenue Service, or no action letters from the Securities and Exchange Commission; (II) Drafting state constitutional or legislative amendments; (III) Pursuing test cases or other litigation; (IV) Making any investigation or expressing any view as to the creditworthiness of the City or the Bonds; (V) Representing the City in Internal Revenue Service examinations or inquiries, or Securities and Exchange Commission investigations; or (VI) Except as set forth in (c) above, addressing any other matter not specifically set forth above that is not required to render our Bond Opinion. ATTORNEY-CLIENT RELATIONSHIP Upon execution of this engagement letter, the City will be our client and an attorney- client relationship will exist between us. We assume that all other parties in connection with the issuance of any Bonds or the entry into any Lease/Purchase Agreements will understand that in those transactions we represent only the City, we are not counsel to any other party, and we are not acting as an intermediary among the parties. Our services as counsel to the City are limited to those contracted for herein, and the City's execution of this engagement letter will constitute an acknowledgment of those limitations. Our representation of the City will not affect, however, our responsibility to render objective Bond Opinions where required in connection with this engagement. 10-45784.01 KUTAK ROCK LLP Honorable Dan Coody March 11,2003 Page 4 CONFLICTS During the course of any Bond and lease/purchase financings referenced above, our firm will likely be representing the underwriter(s) of the Bonds or the lessor(s) under Lease/Purchase Agreements in separate unrelated matters. We do not believe such representations, if they occur, will adversely affect our ability to represent you as provided in this letter because such matters will be sufficiently different from the issuance of the Bonds or the entry into the Lease/Purchase Agreement so as to makc such representations not adverse to our representation of you. Execution of this letter will signify the City's consent to our representation of said underwriter(s) and lessor(s) consistent with the circumstances described in this paragraph. FEES (a) In connection with each issue of Bonds as described above, we propose Bond Counsel fees as set forth in the following table: Principal Amount Up to S5,000,000 55,000,001 — $10,000,000 510,000,001 - 515,000,000 $15,000,001 - 520,000,000 520,000,001 - $30,000,000 530,000,001 - 550,000,000 Bond Counsel Fee $25,000 $30,000 $35,000 $37,500 $40,000 545,000 In the event we are asked to undertake additional duties traditionally performed by underwriter's counsel (including the preparation of the Bond Purchase Agreement and Official Statement), we propose an additional fee of $5,000 in connection with each such issue under $10,000,000 in principal amount and 57,500 in connection with cach such issue over $10,000,000 in principal amount. (b) In connection with each Lease/Purchase Agreement as described above, we propose Bond Counsel fees as set forth in the following table: 10-45784 01 Principal Amount Up to 55,000,000 55,000,001 — $10,000,000 510,000,001 - $15,000,000 S15,000,001 - $20,000,000 520,000,001 - $30,000,000 530,000,001 - $50,000,000 Bond Counsel Fee $12,500 $15,000 $17,500 $20,000 $25,000 $30,000 KUTAK ROCK LLP Honorable Dan Coody March 11,2003 Page 5 (c) For serving the City as special counsel with respect to election matters as described above, we propose a fee based upon a flat hourly rate of $200 per hour for all attorneys of the firm who perform legal services in connection with such engagement. In addition, with respect to each representation of the City described above, we will expect to be reimbursed for all client charges made or incurred on your behalf, such as travel costs, photocopying, deliveries, long distance telephone charges, fax charges, filing fees, computer-assisted research and other out-of-pocket expenses. We understand and agree that our fees with respcct to Bonds and Lease/Purchase Agreements will be paid at thc time of Closing of each such financing. If the financing is not consummated, we understand that we will not be paid for time expended on your behalf but will be reimbursed for client charges made or incurred on your behalf. Our fees with respect to election matters will bc billed on a monthly basis and are payable irrespective of the submission of questions to the voters or the ultimate approval of questions submitted. If the foregoing terms are acceptable to you, please so indicate by returning the enclosed copy of this engagement letter signed by an appropriate officer, retaining the original for your files. We look forward to working with you. Accepted and Approved: CITY OF VETT VILLE, ARKANSAS ina4 if By: Dated: 10-45784 01 KUTAK ROCK LLP • NAME OF FILE: CROSS REFERENCE: Date Resolution No. 42-03 Document • • 1 04/01/03 Res. 42-03 2 • 03/18/03 Staff Review form w/attachments memo to Council re: Debt Management Program draft resolution 3 4/803 Memo to Steve Davis NOTES: FAYETTENILLE T111 CITY Of FAYETTEVILLE, ARKANSAS DEPARTMENTAL CORRESPONDENCE To: Stephen Davis Finance & Internal Services Dir. From: Clarice Buffalohead-Pearman City Clerk Division Date: 4/8/03 Re: Res. 42-03 Attached please find an executed copy of the above referenced resolution passed by the City Council April 1, 2003 approving a bond counsel agreement with Kutak Rock, LLP regarding the 2003 Debt Management Program. The original resolution with attached letter agreement will be microfilmed and filed in the city clerk's office. If anything else is needed please let the city clerk's office know. /cbp cc Nancy Smith, Internal Auditor XX AGENDA REQUEST CONTRACT REVIEW GRANT REVIEW • STAFF REVIEW FORM For the Fayetteville City Council Meeting of: • April 1.2003 4,0 111/460.) oKettke FROM: Stephen Davis Finance & Internal Services Name Division Finance & Internal Services Department ACTION REQUIRED: Approve bond counsel agreement with Gordon Wilbourn of Kutak Rock, LLP for the 2003 Debt Management Program. COST TO CITY: No cost with the item Cost of this request Account Number Funds Used to Date Project Number Remaining Balance Program Category / Project Name Program / Project Category Name Fund Name BUDGET REVIEW: Budget Manager Budgeted Item _3_,/ 3_ 07 Date Budget Adjustment Attached CONTRACT/G• LEASE REVIEW: Ac ing Man y Attorney 3/41163 te 3/14615 Date 77)1 // :5 /03 Internal Mditor Date tLQtQo 311410 Date Purchasing Manager STAFF RECOMMENDATION: Staff recommends approval of bond counsel agreement with Gordon Wilbourn of Kutak Rock, LLP. Division Head Department Director Finance & Internal Services Dir. Chief ministrative Officer 1 a Ma or KASteve Davis\Debt F Date Date Date /11-03 Date 3/(71;3 Date Cross Reference New Item: Yes No Previous Ord/ReS#: Orig. Contract Date Orig. Contract Number a cing\Staff_Review_Bond Counsel Services Description Comments: Budget Manager 0 Staff Review Form - Page 2 110 Meeting Date Reference Comments: Accounting Manager City Attorney Purchasing Manager ADA Coordinator Internal Auditor Grants Coordinator K:\Steve Davis \Debt Financing\Staff_Review_Bond Counsel Services FAYETTEfILLE THE CITY OF FAYETTEVILLE, ARKANSAS DEPARTMENTAL CORRESPONDENCE • TO: THROUGH: FROM: DATE: SUBJECT: Background Fayetteville Cit Council Dan Coody Hugh Earnest, Chief A ministra ve 0 icer Stephen Davis, Finance & Inte ices Director March 12,2003 Debt Management Program: Bond Counsel Services City Council approved a Debt Management Policy (Policy) on November 5, 2002. The Debt Management Committee met afier approval of the Policy and determined the City needed to seek statement of qualifications for bond counsel services and to seek requests for proposals for bond underwriter services and for leasing services. A professional selection committee was formed to: 1) provide oversight of the drafting of the request for qualifications for bond counsel services and the request for proposals for the bond underwriter services and leasing services; 2) review the responses to the request for qualification/proposals; conduct interviews of the selected respondents; and, 3) recommcnd service providers for leasing services and bond underwriter services. Current Status In mid-January 2003, the Professional Selection Committee (Committee) met, reviewed and approved the request for qualifications for bond counsel services and request for proposals for bond underwriter and leasing services. The Committee reviewed the responses, developed a short list to interview for each service to be provided and selected the firm or firms to provide the service. The firms selected to provide services under this set of request for qualifications and request for proposals are as follows: Bond Counsel Services - Gordon Wilboum of Kutak Rock LLP; Leasing Services - Banc of America Leasing & Capital, LLC, and, Bond Underwriter Services — (two firms were selected to provide bond underwriter services): Stephens, Inc and Crews & Associates. Staffsubmitted, for City Council approval, a resolution of intent to reimburse for Council action at the March 18, 2003 City Council meeting. Staff is in the process of negotiating a master lease or leases with Banc of America Leasing & Capital, LLC. The master lease agreements are to provide the funding mechanism to leverage current and future City funds in acquiring solid waste residential collection vehicles and fire apparatus vehicles. K:\Stcvc Davis\Debt Financing\Bond Counsel Services_ 2003.doc Staff has also negotiated a bond counsel services agreement with Kutak Rock, LLP. The bond counsel fees to be paid under this agreement will either be deducted from the bond issue proceeds or will be incorporated into the total moneys included in the individual lease payment agreement schedules. Recommendation Staff recommends City Council approval of the bond counsel services agreement with Gordon Wilboum of Kutak Rock, LLP. K:\Stcvc Davis \Debt Financing \Bond Counsel Services_ 2003.doe RESOLUTION NO. A RESOLUTION TO APPROVE A BOND COUNSEL AGREEMENT WITH KUTAK ROCK, LLP WHEREAS, Kutak Rock, LLP with lead counsel Gordon M. Wilbourn was selected by the City Professional Selection Committee to be Fayetteville's bond counsel through 2003. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council of the City of Fayetteville, Arkansas hereby approves the engagement letter (attached as Exhibit A) and all of its terms wherein the City engages Kutak Rock, LLP as its bond counsel for 2003. PASSED and APPROVED this the 1st day of April, 2003. ATTEST - Sondra Smith, City Clerk APPROVED: rSP 141 By: DAN COODY, Mayor