HomeMy WebLinkAboutCouncil_Engagement_Agreement_NTE_$60,000,000_March_08,_2023Ahlers & Cooney, P.C.
Attorneys at Law
100 Court Avenue, Suite 600
Des Moines, Iowa 50309-2231
Phone: 515-243-7611
Fax: 515-243-2149
www.ahlerslaw.com
Steven M. Nadel
515.246.0306
snadel@ahlerslaw.com
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
March 3, 2023
Via Email and Overnight mail
City of Waterloo
Kelley Felchle
City Clerk
715 Mulberry Street
Waterloo, Iowa 50703
RE: BOND COUNSEL ENGAGEMENT AGREEMENT
Not to exceed $60,000,000 Communications Utility Revenue Capital Loan Notes; and
Taxable Communications Utility Revenue Capital Loan Notes (for working capital)
Dear Kelley:
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 Waterloo Municipal Communications Utility, Iowa (the
Issuer") in connection with the issuance from time to time of bonds, notes, or other obligations
Bonds"). We understand the Bonds are being issued for the purpose of all construction and
acquisitions in connection with the construction of the Municipal Communications Utility and
working capital during construction and initial operations, and will be secured by the revenues of
the Municipal Communications Utility. We further understand that final sizing of the issue has
not yet been completed, but it is anticipated that the Bonds will be sold in negotiated sale with
one or more banks. We understand the Issuer currently retains, and expects to continue to obtain
the advice of Speer Financial, Inc., a Municipal Advisor properly registered with the MSRB in
connection with the issuance of the Bonds. While additional members of our firm may be
involved in representing the Issuer on other matters unrelated to the Bonds, this Agreement
relates to the agreed-upon scope of bond counsel services described herein.
SCOPE OF ENGAGEMENT
In the role of Bond Counsel, we will provide the following services:
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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 income tax purposes.
2) Prepare and review documents necessary or appropriate to the authorization,
issuance and delivery of the Bonds, 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"), if any, 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.
8) File an appropriate Form 8038 with the IRS after Closing.
9) Review output agreements (wholesale and retail) provided by the Issuer, with
respect to private use issues.
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, for each
series of bonds. 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 each
series of 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.
The duties covered by a fee for Bonds issued under this engagement are limited to those
expressly set forth above. Our fee for a Bond issue does not include the following services, or
any other matter not required to render our Bond Opinion:
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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 will be required before we assume one or more of these duties.
The remaining services in this list, specifically those listed in subparts (h)–(k) below, are not
included in this 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 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
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exist between us with respect to the issuance of each series of the 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
Agreement with respect to a Series of Bonds will be concluded upon issuance of such 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.
OTHER REPRESENTATIONS
As you are aware, our firm represents many political subdivisions, companies and
individuals. It is possible that during the time that we are representing the Issuer, one or more of
our present or future clients will have transactions with the Issuer. We do not believe such
representation, if it occurs, will adversely affect our ability to represent you as provided in this
Agreement, either because such matters will be sufficiently different from the issuance of the
Bonds so as to make such representations not adverse to our representation of you, or because
the potential for such adversity is remote or minor and outweighed by the consideration that it is
unlikely that advice given to the other client will be relevant to any aspect of the issuance of the
Bonds. We will decline to participate in any matter where the interests of our clients, including
the Issuer, may differ to the point where separate representation is advisable. The firm
historically has arranged its practice to hold such occasions to a minimum, and intends to
continue doing so. Execution of this Agreement will signify the Issuer's consent to our
representation of others consistent with the circumstances described in this paragraph.
FEES
Bond 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. Our fee is based upon: (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 Agreement; (iii) the time we anticipate devoting to the
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financing; and (iv) the responsibilities we will assume in connection therewith. We will
communicate our anticipated flat 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 Board Chairperson and/or
General Manager are delegated authority to approve our fees. If, at any time, we believe that
circumstances require an adjustment of our original fee estimate, 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 stated above; (b) material changes in the structure or
schedule of the financing occur; or (c) if the number or complexity of output agreements is
unexpected; or (d) unusual or unforeseen circumstances arise which require a significant increase
or decrease in our time or responsibility. It is not anticipated that it will be necessary for 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 Bond 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 $500 for each series of Bonds. We will contact you prior to incurring expenses that
exceed this amount.
Billing Matters:
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 receipt.
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 (not to exceed the fee we would have received if we had rendered our Bond Opinion). My
current hourly rate is $470. Work performed by other attorneys will be billed at their current
hourly rate. Associate attorneys begin at $275, and work by legal assistants will be billed at
135. The hourly rates reflected herein are subject to our periodic review and adjustment –
typically annually.
Other Advice:
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If requested, we will maintain one or more separate accounts for periodic services
rendered to the Utility in connection with other matters unrelated to any particular Bond
financing. Such services may involve the rendering of advice, opinions or other assistance in
connection with such issues including, but not limited to (i) financing alternatives in connection
with a particular project, (ii) compliance with lending programs, e.g. SRF compliance or
procedures; (iii) compliance with continuing disclosure undertaking(s), (iv) the impact of
specified actions on tax-exempt status of outstanding Bonds, (v) legislative initiatives and
proposals, or (vi) other matters the Utility may seek advice or guidance upon. Billings for such
separate services will be based on our standard hourly rate of the individual attorney performing
the services. Statements for any such additional services shall be submitted periodically, but no
less frequently than semi-annually.
RECORDS
In the interest of facilitating our services to you, we may send documents, information or
data electronically or via the Internet or store electronic documents or data via computer software
applications hosted remotely or utilize cloud-based storage. Your confidential electronic
documents or data may be transmitted or stored using these methods. We may use third party
service providers to store or transmit these documents or data. In using these electronic
communication and storage methods, we employ reasonable efforts to keep such
communications, documents and data secure in accordance with our obligations under applicable
laws, regulations, and professional standards; however, you recognize and accept that we have
no control over the unauthorized interception or breach of any communications, documents or
data once it has been transmitted or if it has been subject to unauthorized access while stored,
notwithstanding all reasonable security measures employed by us or by our third party vendors.
By your acceptance of this letter, you consent to our use of these electronic devices and
applications and submission of confidential client information to or through third party service
providers during this engagement.
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 Agreement. 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.
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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 hesitate to write or call.
Very truly yours,
AHLERS & COONEY, P.C.
By
s/ Steven M. Nadel
Steven M. Nadel
SMN:im
Accepted:
Waterloo Municipal Communications Utility, Iowa*
By ____________________________________ Date: ______________________________
Approved by action of the governing body on _______________, 2023.
02168936-1\24268-001
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March 8, 2023
March 8