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HomeMy WebLinkAboutProfessional Services Agreement - Barnes and Thornburg LLC - Bond Counsel Services1316 C0UNTy-Ci"i'y BUILDING 227 WAFTH"RSON BoutAWARD SOUTH TIFNI). INMANA 46601-1830 CITY OF SOUTH BEND PETE BuT'nuEG, MAYOR 'BOARD OF PULIC WORKS August 14, 2018 Philip Faccenda Barnes and Thornburg LLP 700 1" Source Bank Center 100 North Michigan South Bend, IN 46601 RE: Professional Services Agreement Dear Mr. Faccenda: 1'1-10W, 574/235-9251 FAX 574/ 235-9171 The Board of Public Works, at its meeting held on August 14, 2018, approved the agreement for bond counsel services for the preparation and issuance of tax-exempt 501 (C)(3) qualified bonds in support of Potawatomi Zoo Capital projects in the amount of $52,000. Enclosed please find a copy of the agreement for your records. If you have any further questions regarding this matter, please call this office at (574) 235- 925 1. Sincerely, Linda M. Martin, Clerk Enclosure A. TFIF.RESF�' J. DoRAU GARY A. Giw-i- SUZANNA M. FiuTZBEiw ELIZABI"i,ii A. MARADIK JAMES Philip J. Faccenda, Jr. (574)237-1148 philip,faccenda@btlaw.com 'CIA EMAIL Jennifer C. Hockenhull, City Controller Department of Finance & Administration City of South Bend 227 West Jefferson Boulevard, Suite 120ON South Bend, IN 46601 700 1 st Source Bank Center 100 North Michigan South Bold, IN 40601-1632 U.S.A. (574)233-I171 Fax (574) 237-1125 wtimhtlaw.com July 23, 2018 Re: City of South Bend Economic Development Revenue Bonds (Potawatomi Zoo Project) Dear Jeri: The purpose of this letter is to set the terms and conditions under which our Firm will serve as bond counsel to the City of South Bend, Indiana (the "City") in connection with the proposed issuance of economic development revenue bonds of the City (the "Bonds") for the purpose of funding improvements to the Potawatomi Zoo and the payment of the costs of issuance of the Bonds which Bonds we understand will be payable from the economic development portion of the local income taxes received by the City (the "Transaction"). It is our understanding that Crowe Horwath LLP will be serving as municipal advisor for the City in the Transaction (the "Municipal Advisor"). I am enclosing our Standard Terms of Engagement for Legal Services dated January 2016, setting forth the standard terms upon which our Firm accepts client engagements. Our engagement by you in this matter will be governed by these standard terms to the extent not expressly modified by this letter. In particular, the section in the Standard Terms of Engagement for Legal Services under the caption "Waiver of Certain Potential Conflicts of Interest" will not apply in this engagement. I do want to highlight one (1) item that we have discussed with Stephanie previously. Barnes & Thornburg represents the Potawatomi Zoological Society ("PZS") and two (2) of my partners serve on the Board of Directors of the PZS. We do not believe that our representation of the PZS will adversely affect. or impact our representation of the City as bond counsel in connection with the Transaction or vice versa. We had analyzed this issue when we were asked to review the financing language that was included in the agreement that the City entered into with the PZS to ensure the language provided the appropriate bonding and other funding options for the City. By exeeutilig this correspondence; you are providing your consent to our continuing to serve as counsel to the PZS. Atlanta California Chicago Delaware Indiana w ichigan h.-linneapoHs Ohio Wasltington. D.C. Jennifer C. Hockenhull, City Controller City of South Bend July 23, 201.8 Page 2 Identity of Client It is important from the outset of our relationship that we have a clear understanding as to the identity of our client. Our only client in this matter is the City, and not any of its agencies, instrumentalities, boards, commissions, officials, officers, employees or other affiliates. You have agreed that our representation of the City in this matter will not give rise to any attorney - client relationship between our Firm and any agency, instrumentality, board, commission, official, officer, employee or other affiliate of the City. You have also agreed that, during the course of our representation of the City in this matter, our Firm will not be given any confidential information regarding any agency, instrumentality, board, commission, official, officer, employee or other affiliate of the City. Accordingly, our Firm's representation of the City in this matter will not give rise to any conflict of interest in the event other clients of our Firm are adverse to any agency, instrumentality, board, commission, official, officer, employee or other affiliate of the City.. Services Bond counsel is engaged to render an objective legal opinion with respect to the authorization and issuance of bonds. As bond counsel in the Transaction, we advocate the interests of the City and not any other party to the Transaction. We also assume that the other parties to the Transaction, including, but not limited to any underwriter (the "Underwriter"), will retain such counsel as they deem necessary and appropriate to represent their interests in this Transaction. City: As bond counsel, we will provide the following services as and when requested by the L We will assist the City and the Municipal Advisor in structuring the Transaction, preparing a detailed timetable establishing the duties and obligations of each party to the Transaction and assisting with the representatives of the City in understanding all of the City's financial options for the Transaction. 2. We will prepare the documentation for the Transaction, including all legal notices, ordinances, and resolutions of the Economic Development Commission and the Common Council of the City, and related affidavits and certificates. 3. We will assist City officials in preparing for and attending required meetings, including the required public hearings. 4. We will prepare the documentation for the financing, including the necessary resolutions, ordinances and internal working group agenda, all legal notices and related affidavits and. certificates. 5. We will attend any meetings, as requested by the City. Jennifer C. Hockenhull, City Controller City of South Bend July 23, 2018 Page 3 6. We will assist the Municipal Advisor in preparing or reviewing certain sections of the official statement or offering circular that will be used to market the Bonds, specifically, the portions that describe the Bonds and other legal documents, federal tax matters, and our legal opinion. 7. We will assist the. City in its continuing disclosure undertaking, if necessary, under federal securities law to allow the Underwriter to purchase the Bonds. 8. We will prepare or assist in preparing for and participate in any meetings with any rating agency, municipal bond insurer or other credit provider concerning the Transaction. 9. We will coordinate the scheduling and supervise the closing of the Transaction, including preparation of required closing documents. Subject to the completion of proceedings to our satisfaction with respect to the Bonds, we will render our opinion to the effect that: (i) the Bonds are the valid and binding obligation of the issuer of the Bonds, enforceable against such issuer in accordance with their terms, and (ii) the interest on the Bonds is excludable from gross income for federal income tax purposes and is exempt from taxation in the State of Indiana (all subject to certain limitations which will be expressed in the opinion). The opinion for the Bonds will be executed and delivered by us in written form on the date the Bonds are exchanged for their purchase price (the "Closing") and will be based on facts and law existing as of its date. In rendering the 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. Upon delivery of the opinion for the Bonds, our responsibilities as bond counsel will be concluded with respect to the Transaction. Specifically, but without implied limitation, we do not undertake (unless separately engaged) to provide continuing advice to the City or any other party concerning any actions necessary to assure that interest on the Bonds will continue to be excludable from gross income for federal income tax purposes. As bond counsel, we will not provide the following services in connection with the Transaction: 1. We will not review the financial condition of the City, the feasibility of the projects to be financed with the proceeds of the Bonds or the adequacy of the security provided to owners of the Bonds, and we will express no opinion relating thereto. 2. Except as specifically set forth above, we will not assume or undertake responsibility for the preparation of an official statement or any other disclosure {■ a � t • � i Ea i Jennifer C. Hockenhull, City Controller City of South Bend July 23, 2018 Page 4 document with respect to the Bonds, nor are we responsible for performing an independent investigation to determine the accuracy, completeness or sufficiency of any such document. 3. We will not provide any other services not specifically set forth above. Although I will be the lawyer responsible for this matter, I may assign portions of the work to be done to other Firm lawyers. In an effort to effect greater efficiencies and to reduce total fees, I may also ask one or more of our paralegals to assist in this matter as well in the areas of (1) filing certain documents,;such as the UCC filing statements, with certain state and local agencies and (2) compiling the executed documents for the transcript. Municipal Advisor Matters We understand that the Municipal Advisor is an independent registered municipal advisor, and that the City will look primarily to the Municipal Advisor for financial advice in the Transaction. We (a) are not a financial advisor or financial expert regarding the issuance of municipal securities or municipal financial products, and (b) are not subject to the fiduciary duty imposed on independent registered municipal advisors by the United States Securities and Exchange Commission and the Municipal Securities Rulemaking Board. Fees We agree that we will provide services on an hourly basis until such time as the structure and budget of the Transaction is being finalized in connection with the preparation of the preliminary offering document at which time we agree to provide a fixed fee based upon: (i) our understanding of the terms and structure of the Transaction and the assumptions set forth in this letter, (ii) the duties we will undertake pursuant to this letter, (iii) the time we anticipate devoting to the remainder of the Transaction, (iv) the responsibilities we assume, and (v) the then current structure of the Transaction. We estimate that our fees may range from $45,000 to $52,000 for the Transaction. In addition to our fixed, fee, we anticipate incurring expenses in the Transaction (i.e., in connection with the publication of the required notices of public hearing and notices for the Bond sale as required by law, and the preparation of the bond transcript), all of which will be charged to the City. Also, our fixed fee quotation will assume that there are no changes to current law that would affect the amount of services that would need to be provided to the City. Our fee and expenses are usually paid shortly after the Closing out of the proceeds of the Bonds, and we customarily do not submit any statement until shortly after the Closing unless there is a substantial delay in completing the financing. E-Verify Participation In connection with this engagement, we agree that Barnes & Thornburg LLP is enrolled in and will verify the work eligibility status of all newly hired employees through the Federal E- Verify program (unless and until the E-Verify program no longer exists). This letter confirms Jennifer C. Hockenhull, City Controller City of South Bend July 23, 2018 Page 5 that Barnes & Thornburg LLP has signed an affidavit stating that it does not knowingly employ an unauthorized alien, and we will provide a copy of that affidavit to you upon request. PZS Representation As we discussed, we currently represent the PZS as its lawyers in various matters unrelated to the Transaction. In serving as bond counsel in the Transaction, it will only be on the express understanding that we will not and cannot represent either PZS or the City should either of you assert a legal claim against the other in connection with matters relating to the Transaction or should a controversy otherwise develop between you in that regard. In such a circumstance, we would withdraw from further representation of the City in regard to matters relating to the Transaction. Under Rule 1.7 of the Indiana Rules of Professional Conduct, we are precluded from representing a client if the representation of the client will be directly adverse to another client, or there is a significant risk that the representation of the client will be materially limited by our responsibilities to another client, a former client or a third person or by our personal interest, unless. (a) we reasonably believe that we will be able to provide competent and diligent representation to each affected client; (b) the representation is not prohibited by law; (c) the representation does not involve the assertion of a claim by one client against another client represented by us in the same litigation or other proceeding before a tribunal; and (d) each affected client gives informed consent, confirmed in writing. Loyalty and independent judgment are essential elements in the Iawyer's relationship to a client. Loyalty to a current client prohibits undertaking representations directly adverse to the client without the client's informed consent. Even where there is no direct adversity, a conflict of interest exists if there is a significant risk that a lawyer's ability to consider, recommend or carry out an appropriate course of action for the client will be materially limited as a result of the lawyer's other responsibilities or interests; the conflict in effect forecloses alternatives that would otherwise be available to the client. In the present circumstances, we believe that we will be able to provide competent and diligent representation to the City as bond counsel in the Transaction and competent and diligent representation to PZS in unrelated matters. The representation is not prohibited by law. The representation does. not involve the assertion of a claim by one client against another client represented by us in the same litigation or other proceeding before a tribunal. We expect that PZS will give informed consent, confirmed in writing, to allow us to serve as bond counsel in the Transaction concurrently with our representation of PZS in unrelated matters. This fetter confirms the City's consent to our continued representation of PZS in any existing or new matters that are unrelated to the Transaction, concurrently with our serving as bond counsel in the Transaction. Jennifer C. Hockenhull, City Controller City of South Bend July 23, 2018 Page 6 Conclusion If you agree to our service as bond counsel in the Transaction upon the terms set forth herein and acknowledge that the statements made in the heading "Municipal Advisor Matters" are accurate and true to your knowledge, please indicate your acknowledgement and agreement on behalf of the City by executing the enclosed copy of this letter in the space provided below and return the executed copy to me. You may terminate our engagement as bond counsel at any time simply by notifying us. We may terminate our engagement for nonpayment of our -fees and other charges and where we are required or permitted to do so by the Rules of Professional Conduct after giving you reasonable notice and allowing time for you to engage successor counsel, if necessary. We ask you to acknowledge that, in reviewing and executing this letter, you have not relied on any advice provided by our Firm but instead have acted solely in reliance upon the advice of other legal counsel. We are pleased to have this opportunity to be of service to you. Sincerely, BARNES & THORNBuRG LLP Philip J. Faccendaj Jr. PJF/bej Enclosure cc: Beiliamin J. Dougherty, J.D. Stephanie Steele, Esq. AGREED TO AND ACCEPTED: CITY OF SOUTH BEND, INDIANA By: APP"V&D P"Isue work,, Printed,- kini ' -r Aktjil Title:—r,j"tM rzo te-K DMS 127873350 BARN B- &,'fl-i0FMURG i . i, 1 ' FIX01 Whol 11-AM I I My a Ski OLVA I Date -August 7, 2018 Name Benjamin Dougherty Department Admin &Finance lust 14, 2018 Phone Extension 7678 Required Prior to Submittal to Board Legal ✓ Attorney Name Elliot Anderson Controller review is required for all Contracts $5,000.00 or more Controller ❑ and' greater than one year Iin length per the City Purchasing Policy Purchasing F-1 Check the Appropriate Item Type - Required for All Submissions F-1 Agreement F1 Contract ❑ Proposal F-1 Addendum M Professional Services F-1 Amendment 0I Bid Opening El Bid Award ❑ Req. to Advertise El Title Sheet E] Quote Opening F-1 Quote Award F-1 Chg Order No. F-1 C/0 & PCA No. E] PCA F-1 Ease./Encroach. F-1 Traffic Control F-1 Resolution ❑ Other: 0 Claim Required Information Company or Vendor Name Barnes & Thornburg LLP New Vendor ❑I Yes 0 If Yes, Approved' by Purchasing M�No MBE/WBE Contractor 11 F� MBE Completed E-Verify Form Attached WBE ❑ Yes El No Project Name Econ. Dev. Rev. Bonds, Series 2018 (Potawatomi Zoo Project) Project Number Funding Source Account No. 453-1104-452.38-04 Amount $52,000.00 Terms of Contract Hourly rate and fixed fee, payable from bond proceeds. Purpose/Description Bond counsel services for preparation and issuance of tax- exempt, 501(c)(3) qualified bonds in support of zoo capital r)roiects (r)ursuant to PZS Lease and Manaaement Agreement). Amount of El increase $ El Decrease $ Previous Amount $ Current Percent of Change: % New Amount Total Percent of Change Time Extension: Dispersal After Approval Copy Original n F1 El n El n