HomeMy WebLinkAbout06-088 - Foster Pepper PLLC - 2006 Water Sewer Revenue Bond Counsel ServicesFOSTER PEPPER.
September 21, 2006
Mr. Kevin A. Fuhrer
Finance Director / Risk Manager
City of Tukwila
6200 Southcenter Boulevard
Tukwila, WA 98188-2544
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Direct Phone (206) 447-8965
Direct Facsimile (206) 749-2014
E -Mail spith@foster.com
Re: Work to Compile Official Statement for Water & Sewer Bonds
Dear Kevin:
This is to confirm our discussion concerning our firm's compilation of the official
statement for the City's upcoming sewer revenue bond issue. As you know, we are serving as
bond counsel to the City on this transaction. At the City's request, and with the concurrence of
the underwriter, we will compile the preliminary official statement and the official statement for
this issue. We will structure the official statement based on similar documents which we
developed for the City and for other jurisdictions. We will prepare a first draft of the document,
and we will be principally responsible for the content of the sections relating to the bonds,
various legal issues, and tax issues. We will rely on the City for assistance in the description of
the water and sewer utility and the general economic description of the City, and surrounding
areas. At Closing we will provide the City and the underwriter with a "10b-5" opinion with
respect to the official statement.
As we discussed, we will charge $12,500.00 for preparation of the official statement.
However, as I mentioned on the phone, if the hourly value (at our standard hourly rates) of the
work we do on this transaction as bond counsel, plus the work that we do on the official
statement, is far less than the actual bond counsel fee plus disclosure counsel fee, I will reduce
the fee for the official statement work. I wanted to make sure that we do not charge too much for
the transaction. But our experience is that it is quite difficult to accurately estimate the amount
of time that it takes to develop a preliminary official statement and official statement.
Also, as I mentioned on the phone, Bill Tonkin will be working with Cindy Nevins and
me both in the preparation of bond documents and the official statement itself.
TEL. 206 447.4400 FAX. 206.447.9700 1111 THIRD AVENUE, SUITE 3400, SEATTLE, WASHINGTON 98101-3299 WWW.FOSTER.COM
SEATTLE WASHINGTON SPOKANE WASHINGTON PORTLAND OREGON
50732186.1
Mr. Kevin A. Fuhrer
September 21, 2006
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If you have any questions or concerns, please do not hesitate to call. If the foregoing is
acceptable to the City, I would appreciate it if you or another responsible City Official would
sign the enclosed copy of the letter and return it to me at your convenience.
Sincerely,
Hug D. Spitzer
Enclosure
cc: Sean Keatts
Bill Tonkin
Accepted and approved:
CITY OF TUKWILA
Printed Name: �l`EVEN /4 /1/41 til &LET
Title: /V/ 4 Y O f�
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SCOPE OF BOND COUNSEL SERVICES
FOSTER PEPPER PLLC
The range of services provided by bond counsel can be narrow or broad, and frequently
varies from financing to financing. In addition, the amount of work necessary to perform the same
services can be quite different depending upon the nature and complexity of the financing. In the
following, we use the term "bonds" to include any obligation of the issuing local government (the
"Issuer") for which we are asked to serve as bond counsel.
A. BOND COUNSEL SERVICES
Those services which Foster Pepper PLLC traditionally provides as bond counsel to the
Issuer include:
(1) Advising the Issuer and its consultants on the legal requirements applicable to and,
when requested, participating with those consultants and Issuer's staff in planning, the fmancing of
a project, including advice on state law and federal income tax and securities laws;
(2) Reviewing the transcripts relating to the prior issuance by the Issuer of related
outstanding obligations (typically revenue obligations), to assure conformity of the bonds with
applicable covenants and conditions;
(3) Based on facts provided by the issuer, performing the necessary legal analysis to
determine, in financings in which the bonds are intended to be tax-exempt, whether interest on the
bonds will qualify for an exclusion from gross income for federal income tax purposes, and
preparing tax exemption and nonarbitrage certificates;
(4) Drafting the ordinances/resolutions and other documents necessary to authorize the
bonds to be sold and issued (including, where applicable, ballot title ordinances/resolutions);
(5)
Attending certain meetings relating to the sale and issuance of the bonds;
(6) Forwarding Issuer financing documents to bond rating agencies and/or bond
insurers, when requested by the Issuer or Issuer's financial consultant or underwriter, and explaining
those documents to agency and insurer representatives;
(7) When requested by the Issuer or Issuer's financial consultant or underwriter, reading
those portions of drafts of the official statement, offering circular or other sales material relating to
the bonds prepared by the Issuer's investment bankers necessary to assure the accuracy only of the
description of the bonds, the source of payment and security for the bonds, any continuing
disclosure undertaking and the federal tax treatment of the interest on the bonds;
(8) Preparing closing documents necessary to support the issuance of the bonds and
assembling the transcript after the closing; and
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(9) Subject to the completion of proceedings to our satisfaction, furnishing the firm's
approving legal opinion for the bonds regarding the validity and binding effect of the bonds and the
excludability of interest on the bonds from gross income for federal income tax purposes.
Our bond opinion will be based on facts and law existing as of its date, and will constitute
the expression of our professional judgment on the matters expressly addressed and not a guarantee
of result. In rendering that 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 the Issuer's continuing compliance, after
the issue date, with applicable laws relating to the bonds. During the course of this engagement, we
will rely on the Issuer to provide us with complete and timely information on all developments
pertaining to any aspect of the bonds and their security, as well as the expected use of bond
proceeds. We understand and expect that officers and employees of the Issuer will cooperate with
us in this regard.
B. OTHER SERVICES
Traditional bond counsel services described above do not include the following additional
bond and project -related work for the Issuer which we would be pleased to perform on request,
working with the Issuer's attorney or other designated representatives. The provision of these
services involves appropriate fee arrangements.
(1) The drafting or review for sufficiency of any environmental impact statements or
other evidence of compliance with the State and National Environmental Policy Acts, the Shorelines
Management Act, Growth Management Act and similar laws;
(2) The drafting or review for accuracy of portions of any official statement, offering
circular or other sales material relating to the issuance of the bonds prepared by the Issuer or its
underwriter or otherwise used in connection with such bonds, other than the review of those
portions of the official statement describing the bonds, the source of payment and security for the
bonds, any continuing disclosure undertaking and the expected federal tax treatment of the interest
on the bonds is included in our services as bond counsel (See item A.7 above);
(3) Giving advice to the Issuer's consultants regarding the applicability of the
registration requirements under federal or state securities laws or regarding federal and state
securities disclosure requirements or due diligence review;
(4) Drafting or negotiating of bond purchase agreements (though as a matter of course
as bond counsel we typically review such agreements to assure that they conform to the Issuer's
bond authorization documents);
(5) Negotiation and drafting of repurchase agreements, investment contracts, custodial
agreements, swap agreements, credit enhancement or liquidity facilities (other than bond insurance),
and contracts (including contracts with developers or owners of property included within local
improvement districts formed by the Issuer), or disputes or litigation in connection therewith;
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(6) Attending rating agency or public information meetings in connection with the
issuance of bonds;
(7) Preparation of supplemental opinions required of bond counsel by the Issuer or the
underwriter of bonds in connection with their issuance;
(8) The drafting or obtaining of state or federal legislation;
(9) Participating in administrative proceedings, trial or appellate litigation;
(10) Drafting special assessment district formation and assessment documents and
attending special assessment hearings;
(11) Work in connection with seeking or obtaining governmental assistance or approvals
from governmental agencies other than the Issuer, necessary for carrying out the purposes of the
bond issue;
(12) Providing services relating to public works bidding, negotiating design or
construction contracts, or carrying out the acquisition of property or the construction of projects;
(13) Representing the Issuer in Internal Revenue Service examinations or inquiries, or
Securities and Exchange Commission investigations;
(14) After closing, providing continuing advice to the Issuer or any other party
concerning any 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., our engagement as bond
counsel does not include rebate calculations for the bonds, dealing with changes of use or delays in
the expenditure of proceeds);
(15) Assisting the Issuer with its continuing disclosure obligations consistent with
applicable securities laws; or
(16) Addressing any other matter not specifically set forth above that is not required to
furnish our bond opinion.
C. FILE MANAGEMENT
After the transaction is concluded, we will deliver to the Issuer a complete copy of the
transcript of the transaction. A transcript is delivered generally within 30 to 60 days after closing.
We then close our files regarding the matter, and our representation on the transaction is completed.
Additional services after closing would be addressed under Part B, above.
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