HomeMy WebLinkAboutAhlers & Cooney, PC-5/12/2014CITY OF WATERLOO, IOWA
CITY CLERK AND FINANCE DEPARTMENT
715 Mulberry Street • Waterloo, IA 50703 • (319) 291-4323 Fax (319) 291-4571
Council Communication
City Council Meeting:
Prepared:
Dept. Head Signature:
Number of Attachments:
SUBJECT:
May 12, 2014
May 6, 2014
`?,e4 GL ' , GL1 .
Bond Counsel Engagement Agreement
Bond Counsel
Submitted by: Michelle Weidner, Chief Financial Officer
Recommended City Council Action:
Resolution to approve the bond counsel agreement with Ahlers & Cooney, P.C.
Summary Statement: Ahlers & Cooney, P.C. has adopted a policy requiring
that the City sign an engagement letter defining their responsibilities with regard
to bond issues.
Expenditure Required: Amounts to be set per bond issue.
Source of Funds: Repayment will be made from bond issue proceeds
and the general fund as appropriate.
Policy Issue: The agreement protects both the City and the Ahlers
& Cooney law firm by outlining the responsibilities of the parties with regard to
bond consultation and issuance services provided by the firm.
Alternative:
bonds.
The City could choose to hire another firm or not sell
Background Information: The City has a long standing, successful relationship
with the Ahlers & Cooney firm. They are experts in the field of Iowa law and
federal tax regulations relating to bond issues. It is in the taxpayers' best interest
to ensure that the city's bond issuances comply with both state and federal law.
CITY WEBSITE: www.cityofwaterlooiowa.com
WE'RE WORKING FOR YOU!
An Equal Opportunity/Affirmative Action Employer
AHLERS COONEY, P.C.
100 COURT AVENUE, SUITE 600
DES MOINES, IOWA 50309-2231
FAX: 515-243-2149
WWW.AHLERSLAW.COM
J. Eric Boehtert Direct Dial:
Eboehlert@ahlerslaw.com 515.246.0367
April 30, 2014
Mayor and City Council
CIO Michelle Weidner, CFO
715 Mulberry Street
Waterloo, IA 50703
RE: BOND COUNSEL ENGAGEMENT AGREEMENT
Dear Mayor and Council:
The purpose of this Engagement Agreement (the "Agreement") is to disclose and
memorialize the terms and conditions under which services will be rendered by Ahlers &
Cooney, P.C. as bond counsel to the City of Waterloo, Iowa (the "Issuer") for the issuance of
bonds, notes, or other obligations ("Bonds"). While additional members of our firm may be
involved in representing the Issuer on other matters unrelated to the Bonds, the undersigned will
be primarily responsible for the bond counsel services described herein.
SCOPE OF ENGAGEMENT
In the role of Bond Counsel, we will provide the following services:
(1) Subject to the completion of proceedings and execution of documents to our
satisfaction, render our legal opinion (the "Bond Opinion") regarding the validity and
enforceability of the Bonds, the source of payment and security for the Bonds, and the
tax status of the Bonds for federal and state of Iowa, if applicable income tax
purposes.
(2) Prepare and review documents necessary or appropriate to the authorization, issuance
and delivery of the Bonds, including election proceedings, if necessary, and
coordinate the authorization and execution of such documents.
(3) Review legal issues relating to the structure of the Bond issue.
(4) Review or prepare those sections of the official statement, private placement
memorandum or other form of offering or disclosure document (the "Offering
Documents") to be disseminated in connection with the sale of the Bonds that
describe the terms of the Bonds, Iowa and federal law pertinent to the validity of the
Bonds, the tax status of interest on the Bonds, the Bond Opinion and the Issuer's
Continuing Disclosure Certificate, if applicable.
(5) Upon request, assist the Issuer in presenting information to bond rating organizations
and providers of credit enhancement relating to the issuance of Bonds.
(6) Prepare the notice of sale relating to the competitive sale of Bonds.
(7) Draft the Continuing Disclosure Certificate of the Issuer, if applicable.
WISHARD & BAILY - 1888; GUERNSEY & BAILY - 1893; BAILY & STIPP - 1901; STIPP, PERRY, BANNISTER & STARZINGER - 1914; BANNISTER. CARPENTER,
AHLERS & COONEY - 1950; AHLERS. COONEY, DORWEILER, ALLBEE. HAYNIE & SMITH - 1974; AHLERS. COONEY, DORWEILER, HAYNIE, SMITH & ALLBEE, P.C. - 1990
Waterloo, Iowa
Bond Counsel Engagement Agreement
April 30, 2014
Page 2
(8) File an appropriate Form 8038 with the IRS after Closing.
As Bond Counsel, our examination will extend to the actions and approvals necessary to
authorize the issuance and initial delivery of the Bonds to the original purchaser thereof. Our
Bond Opinion does not extend to any re -offering of the Bonds by the original purchaser or other
persons. The Bond Opinion will be delivered by us 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 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 Issuer with
applicable laws relating to the Bonds. During the course of this engagement, we will rely on the
Issuer, and authorized officials, to provide us with complete and timely information on all
developments pertaining to any aspect of the Bonds and their security.
Our duties in this engagement are limited to those expressly set forth above. This
Engagement Agreement does not include the following services, or any other matter not required
to render our Bond Opinion:
(a) Except as described in paragraph (4) above, assisting in the preparation or review of
the Offering Documents with respect to the Bonds, or performing an independent
investigation to determine the accuracy, completeness or sufficiency of any such
document or rendering advice that the Offering Documents do not contain any untrue
statement of material fact or omit to state a material fact necessary to make the
statements contained therein, in light of the circumstances under which they were
made, not misleading.
(b) Preparing requests for tax rulings from the Internal Revenue Service, or "no action"
letters from the Securities and Exchange Commission.
(c) Drafting state constitutional or legislative amendments.
(d) Pursuing test cases or other litigation, such as contested validation proceedings.
(e) Except as described in paragraph (7) above, assisting in the preparation of, or opinion
on, a continuing disclosure undertaking pertaining to the Bonds, or after Closing,
providing advice concerning any actions necessary to assure compliance with any
continuing disclosure undertaking, including monitoring Issuer's continued
compliance with the undertaking.
(f) Representing the Issuer in Internal Revenue Service examinations or inquiries, or
Securities and Exchange Commission investigations.
(g) After Closing, providing continuing advice to the Issuer or any other party concerning
actions necessary to assure that interest paid on the Bonds will continue to be
excludable from gross income for federal income tax purposes (e.g. this Bond
Counsel engagement for the Bonds does not include rebate calculations, nor
continuing post -issuance compliance activities).
We will provide one or more of the services listed in (a)—(g) upon your request, however,
a separate, written Engagement Agreement will be required before we assume one or more of
Waterloo, Iowa
Bond Counsel Engagement Agreement
April 30, 2014
Page 3
these duties. The remaining services in this list, specifically those listed in subparts (h)—(k), are
not included in this Engagement Agreement, nor will they be provided by us at any time.
(h) Acting as an underwriter, or otherwise marketing the Bonds.
(i) Acting in a financial advisory role.
(j) Preparing blue sky or investment surveys with respect to the Bonds.
(k) Making an investigation or expressing any view as to the creditworthiness of the
Issuer or of the Bonds.
ATTORNEY-CLIENT RELATIONSHIP
Upon execution of this Engagement Agreement and upon notification that bond counsel
services are requested of us hereunder, the Issuer will be our client and an attorney-client
relationship will exist between us with respect to the issuance of each series of Bonds. We
assume that all other parties will retain such counsel as they deem necessary and appropriate to
represent their interests in this transaction. We further assume that all parties understand that in
this transaction we represent only the Issuer, we are not counsel to any other party, and we are
not acting as an intermediary among the parties. Our services as bond counsel are limited to
those contracted for in this Agreement; the Issuer's execution of this Agreement will constitute
an acknowledgement of those limitations. Our representation of the Issuer will not affect,
however, our responsibility to render an objective Bond Opinion.
Our representation of the Issuer and the attorney-client relationship created by this
Engagement Agreement will be concluded upon issuance of the Bonds. Nevertheless,
subsequent to Closing, we will mail the appropriate completed Internal Revenue Service Form
8038 and, if requested by the Issuer, prepare and distribute to the participants in the transaction a
transcript of the proceedings pertaining to the Bonds.
FEES
We will charge a flat fee for services rendered under this Agreement for each series of
Bonds for which we give a Bond Opinion. Based on: (i) our current understanding of the terms,
structure, size and schedule of the financing represented by the Bonds; (ii) the duties we will
undertake pursuant to this engagement letter; (iii) the time we anticipate devoting to the
financing; and (iv) the responsibilities we will assume in connection therewith, we will
communicate our anticipated fee to the Issuer's finance team, including your Municipal Advisor,
as applicable, for purposes of sizing each new Bond issue. It is anticipated that our fee will be
capitalized into the Bond issue. It is understood that the Chief Financial Officer is delegated
authority to approve our fees. If, at any time, we believe that circumstances require an
adjustment of our original fee esimate, we will advise you. Such adjustment might be necessary
in the event: (a) the principal amount of Bonds actually issued differs significantly from the
amount at the time we advised you of our fee estimate; (b) material changes in the structure or
schedule of the financing occur; or (c) unusual or unforeseen circumstances arise which require a
significant increase in our time or responsibility. It is not anticipated that it will be necessary for
Waterloo, Iowa
Bond Counsel Engagement Agreement
April 30, 2014
Page 4
us to personally attend meetings in order to provide the Bond Counsel services outlined above
but we will do so in the event that circumstances require.
In addition to our flat fee, we will bill for all customary client charges made or incurred
on your behalf, such as travel costs reimbursement, photocopying, deliveries, computer-assisted
research, bond printing, and other related expenses. We estimate that such charges will not
exceed $750 (per issue). We will contact you prior to incurring expenses that exceed this
amount.
We will submit a summary invoice for the professional services described herein after
Closing for each Bond issue. In the event of a substantial delay in completing the financing, we
reserve the right to present an interim statement for payment. Unless other arrangements have
been agreed upon in advance, we anticipate our statements to be paid in full within thirty (30)
days of reciept.
If, for any reason, the financing represented by an issue of Bonds is not consummated or
is completed without the delivery of our Bond Opinion, or our services are otherwise terminated,
we will expect to be compensated at our normal hourly rates, plus client charges, as described
above. My current hourly rate is $260. Work performed by other attorneys will be billed at their
current hourly rate. Associate attorneys begin at $175, and work by legal assistants will be billed
at $100. The hourly rates reflected herein are subject to our periodic review and adjustment —
typically annually.
RECORDS
At your request, papers and property furnished by you will be returned promptly upon
receipt of payment for outstanding fees and client charges. Our own files, including lawyer work
product, pertaining to the transaction will be retained by us. For various reasons, including the
minimization of unnecessary storage expenses, we reserve the right to dispose of any documents
or other material retained by us after the termination of this engagement. It is our practice to
retain transcripts for each financing for at least the life of the Bonds. You will be notified prior
to destruction of our file, and will have the option to request them, should you desire.
Waterloo, Iowa
Bond Counsel Engagement Agreement
April 30, 2014
Page 5
Please carefully review the terms and conditions of this Agreement. If the above
correctly reflects our mutual understanding please obtain necessary approvals, execute,
date and return to me an executed copy of this letter. Please retain also an original for the
Issuer's file.
If you have questions regarding any aspect of the above or our representation as Bond
Counsel, please do not hestitate to write or call.
It has been a pleasure to serve you in the past, and we look forward to our continued
relationship.
JEB:sk
Accepted:
WaterlooAowa*
B
Very truly yours,
J. Eric Boehlert
FOR THE FIRM
Date: tl�
*Approved by Resolution No. (ION- 31of the Council on Z , 2014.
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