K U T A K R O C K L L P. June 27, Proposal to Provide Bond and Disclosure Counsel Services

Transcription

1 P E N F I E L D W. T A T E I I I penfield.tate@kutakrock.com (303) VIA E MAIL K U T A K R O C K L L P S UI TE CALIFORNIA STREET DENVER, CO LORADO FACSIMILE w w w. k u t a k r o c k. c o m June 27, 2017 A T L A N T A C H I C A G O F A Y E T T E V I L L E I R V I N E K A N S A S C I T Y L I T T L E R O C K L O S A N G E L E S M I N N E A P O L I S O K L A H O M A C I T Y O M A H A P H I L A D E L P H I A R I C H M O N D R O G E R S S C O T T S D A L E S P O K A N E W A S H I N G T O N, D. C. W I C H I T A Mr. Bentley Henderson, County Administrator bhenderson@archuletacounty.org Mr. Larry Walton, Finance Director lwalton@archuletacounty.org Ms. Deb Hinsvark, Municipal Advisor dhinsvark@ehlers-inc.com Re: Proposal to Provide Bond and Disclosure Counsel Services Dear Messrs. Henderson and Walton and Ms. Hinsvark: Kutak Rock LLP is pleased to submit the enclosed proposal to provide bond and disclosure counsel services, pre- and post-election, for the issuance of bonds to construct a new Sheriff and Detention Facility and to rehabilitate the Downtown Courthouse (the Project ). If we are selected as your counsel, we request an immediate meeting or conference, as you prefer, to discuss the Project in detail. We can meet your time frames for a reimbursement resolution by July 18, a ballot question by August 15 and closing the financing no later than March We will also recommend setting earlier time frames for the distribution and discussion of both documents with other parties. Kutak Rock is a national law firm with more than 500 attorneys in 18 cities, including a Denver office that opened in 1977 and currently houses 85 lawyers. The firm provides results-driven and exceptional services in public finance, real estate, litigation and business and corporate law. We have served as bond counsel in all 50 states and the District of Columbia and have annually placed among the most active bond counsel firms in the nation. According to rankings compiled by Thomson Reuters, the statistician for the public finance industry, Kutak Rock has been listed as the number one bond counsel in Colorado, based on total dollar amount of bond issues completed in the role, in nine of the past 13 years (we came in second in the other four years). With respect to number of issues in which the firm served as bond counsel, we have finished in first place in Colorado in each of the past 13 years. In 2016, the firm was bond counsel for over 40% of the total number of bond issues in Colorado. Nationally, Kutak Rock is one of the most active firms in the roles of both bond counsel and disclosure counsel. For the first quarter of 2017, Thomson Reuters ranked the firm the number four bond counsel and number four disclosure counsel in the nation. Penfield W. Tate III, a public finance partner in the Denver office, would serve as the lead attorney for Kutak Rock. Mr. Tate would be supported by a public finance associate and one of the firm s public finance tax experts.

2 K U T A K R O C K L L P June 27, 2017 Page 2 Kutak Rock has served as bond counsel and disclosure counsel in numerous Colorado financings that have required an approving bond election. In these financings the firm has typically advised the Colorado municipality in the full range of issues incident to the bond election process. The firm also has extensive experience with bonds that have financed jails, correctional facilities, detention centers, prisons, courthouses and judicial complexes. Internal records show we have provided services in more than 175 financings of such facilities having an aggregate principal amount exceeding $4 billion. In Colorado, we have completed almost 50 such financings and have served as bond counsel for such financings to such issuers as the State of Colorado, Pitkin County, Alamosa County, El Paso County, Routt County, Pueblo County, Logan County, Chaffee County and Larimer County, among many others. Kutak Rock s public finance practice is carried out by more than 110 attorneys located coast to coast. With 30 bond attorneys, our Denver office has a larger public finance group than any other law firm in Colorado. The cornerstone of our national public finance practice is a corps of 10 tax attorneys who devote substantially all of their time to tax matters related to the structuring of tax-exempt financings and related arbitrage matters. Through their analytical expertise, the firm has been able to adopt cutting-edge tax positions and obtain tax rulings that often provide our clients with exceptional benefits. We are pleased to have this opportunity to respond to your solicitation and welcome any requests for additional information. Please contact me at or at penfield.tate@kutakrock.com if you should have any questions about our proposal or if you would like further information about our firm. Sincerely yours, Enclosure Penfield W. Tate III

3 1. Cover Letter/Executive Summary PROPOSAL TO PROVIDE BOND AND DISCLOSURE COUNSEL SERVICES TO ARCHULETA COUNTY IN RESPONSE TO RFP NO We have attached a cover letter that functions as an executive summary of our proposal. 2. Firm Overview, Experience and Staffing Kutak Rock was established in Omaha, Nebraska in 1965 as a three-lawyer practice. Today, more than 500 attorneys practice with the firm. The firm is a limited liability partnership established under the laws of Nebraska. A 12-member Executive Committee composed of senior partners is responsible for the day-to-day operation of the law firm. The firm opened its second office, in Denver, on January 1, Kutak Rock became a national firm on January 1, 1978, when mergers with other firms created its offices in Washington, D.C. and Atlanta. Over the years, the firm has grown significantly, establishing other offices in Chicago, Fayetteville, Irvine, Kansas City, Little Rock, Los Angeles, Minneapolis, Oklahoma City, Philadelphia, Richmond, Rogers, Scottsdale, Spokane and Wichita. The firm maintains expertise in the areas of public finance, general corporate law, corporate finance, securities, litigation, labor and employment law, real estate, intellectual property and technology law, health care law, employee benefits and pension fund law, securitization, tax, tax credits, banking, bankruptcy, insurance, antitrust, environmental law and government relations. The attorneys of Kutak Rock work together in integrated, national practice groups to maintain and enhance their technical expertise and to reinforce and support one another in achieving client objectives. The firm strives to maintain the highest professional ethics in all its engagements. Robert Kutak, a founder of the firm, was in the forefront of the development of professional ethics for lawyers and in the 1980s was the driving force behind the development of the new Model Rules of Professional Conduct, which substantially rewrote the ethical provisions that had been in place for years. In fact, the ABA Commission that authored the new ethics rules was referred to as the Kutak Commission. Kutak Rock opened its doors in 1965 with a stated commitment to a diverse and equal opportunity work environment and to improving diversity in the legal profession. That early commitment continues today in firmwide structures, such as the firm s national inclusiveness and diversity committee, three-year strategic plan and annual tactics, and multiple affinity groups and inclusiveness engagement groups designed to encourage every person at Kutak Rock to take responsibility for enhancing the firm s inclusive and diverse working environment. As a result, 56% of Kutak Rock s attorneys are women and/or minorities. The firm excels especially in the area of partner promotion, with more racial and ethnic minority partners than the national average, LGBT partners at over two times the national average, partners with disabilities at over eight times the national average, and more women partners than the national average. In 2017 the firm met all of the Human Rights Campaign s 2017 Corporate Equality Index criteria. In 2016 Kutak Rock was certified as a Gold Standard firm by the Women in Law Empowerment Forum ( WILEF ). Kutak Rock was one of only three AmLaw 200 law firms recognized on The American Lawyer s Honor Roll for its high percentage of women who made partner between 2008 and 2014, and the firm exceeded the benchmark again in 2015 and In addition, in 2016 the firm received an A grade for gender diversity from Above the Law and NavForward. The National Law Journal matched those accolades, ranking Kutak Rock among its best 10% of 350 law firms for gender diversity. General Electric Company named KutakRock.com

4 Kutak Rock a finalist for GE s 2016 outside counsel Diversity and Inclusion award. The firm also seeks to improve the legal profession as a whole by supporting external diversity and inclusiveness organizations at national, state and local levels. Nationally, we partner with and serve organizations such as ACE Mentoring, Center for Legal Inclusiveness, Corporate Counsel of Women of Color, Hispanic National Bar Association, Hispanic National Bar Foundation, Leadership Council on Legal Diversity, Minority Corporate Counsel Association, National Asian Pacific American Bar Association, National Association of Women Lawyers and National Bar Association. Our attorneys lead and serve on committees and task forces of state and metropolitan bar associations and other diversity and inclusiveness initiatives across the United States. The firm is rated AV by Martindale-Hubbell the highest rating that independent organization confers on a law firm. Colorado Public Finance ARCHULETA COUNTY PROJECT Kutak Rock s Denver office has 30 public finance lawyers the largest public finance department in any Kutak Rock office and the largest group of public finance lawyers of any firm with a Colorado office. A description of our national public finance practice is provided in Appendix A. Based on rankings compiled by Thomson Reuters, Kutak Rock has been the number one bond counsel in Colorado in each of the years 2004 through 2016 based on number of issues and number one based on principal amount in nine of those 13 years (we were second in the other four years). Kutak Rock has served as bond counsel to issuers and borrowers of every type in Colorado, including the State, various State agencies, authorities and enterprises, cities, town, counties, recreation districts, school districts, water and sanitation districts, fire protection districts, metropolitan districts, library districts, water conservancy districts, public highway authorities, regional transportation authorities, urban renewal authorities, downtown development authorities and nonprofit corporations of varied size, location and business activity. Since 1977, the year the Denver office opened, Kutak Rock has participated in more than 3,650 bond issues for Colorado governments aggregating in excess of $97.7 billion in principal amount, including more than 2,800 issues aggregating in excess of $70.9 billion in principal amount in which the firm served as bond counsel and more than 1,600 issues aggregating in excess of $32.7 billion in principal amount in which the firm served as disclosure or underwriter s counsel or in equivalent roles. The firm served in multiple roles in many of these transactions. Kutak Rock serves, or has recently served, as bond counsel to the City and County of Denver, the Cities of Colorado Springs, Boulder, Aurora, Pueblo, Aspen, Glenwood Springs, Westminster and Englewood, the Counties of El Paso, Boulder, Pueblo, Larimer and Pitkin, the Colorado Springs Urban Renewal Authority, the Denver Urban Renewal Authority, Denver Public Schools, the Colorado State Treasurer, the Colorado Department of Transportation, the Colorado Bridge Enterprise, the Colorado High Performance Transportation Enterprise, the Roaring Fork Transportation Authority, the E-470 Public Highway Authority, the Northwest Parkway Public Highway Authority, the Denver Health and Hospital Authority, the University of Colorado Hospital Authority, the Colorado Health Facilities Authority, the Colorado Agricultural Development Authority, the Colorado Educational and Cultural Facilities Authority, the Auraria Higher Education Center, Colorado State University, Colorado School of Mines, Colorado State Board for Community Colleges and Occupational Education, University of Northern Colorado, Adams State University, Fort Lewis College, Colorado Mesa University, Metropolitan State University of Denver and Colorado College. In addition, the University of Colorado has placed our firm in a pool of designated bond counsel. KutakRock.com 2

5 Kutak Rock has served as bond counsel to the County for an issuance of tax anticipation notes in 2010 and as bond counsel and disclosure counsel for Archuleta School District No. 50 JT for a general obligation bond issue in Since 2002 the firm has also served as bond counsel in six financings for the Pagosa Area Water and Sanitation District situated in Archuleta County. Jail and Courthouse Financing Kutak Rock has provided legal services in a variety of bond transactions that have financed jails, prisons, correctional facilities, detention centers, judicial centers and courthouses in 23 states (including Colorado) and one U.S. territory. These financings, numbering more than 175, have an aggregate principal amount exceeding $4 billion. A substantially complete list of these financings is attached to this proposal as Appendix B. The debt instruments used in these financings have included general obligation bonds, revenue bonds, certificates of participation and special tax and special obligation bonds. In recent years we have participated in many governmental lease-purchase financings of jails and prisons, including public/private partnership transactions. Reimbursement Resolution and Ballot Question Experience Penfield W. Tate III, the proposed lead attorney for any engagement with the County, served as co-bond counsel and disclosure counsel in the following three issues for the City and County of Denver, and provided all necessary pre-election and post-election services: $3,500,000 City and County of Denver, Colorado 4.75% General Obligation Justice System Facilities Bonds (Denver Mini-Bond Program), Series 2007 $125,000,000 City and County of Denver, Colorado General Obligation Justice System Facilities Bonds, Series 2006 $77,000,000 City and County of Denver, Colorado General Obligation Justice System Facilities and Zoo Bonds, Series 2005 This experience is particularly relevant as the ballot question for these financings required the careful construction of a single subject, for TABOR purposes, that would accommodate the need to finance three very different facilities with unique requirements that were also a considerable distance apart. The official statement covers for each of the above-captioned transactions are provided in Appendix C to this proposal as examples of Mr. Tate s capabilities and expertise. He served as bond counsel in these transactions before joining Kutak Rock. We have also attached examples of a reimbursement resolution and ballot question prepared for one of the financings. Proposed Working Group If selected to serve as the County s bond and disclosure counsel, Kutak Rock would assign Penfield W. Tate III, a public finance partner in Kutak Rock s Denver office, as the lead attorney for the firm s representation of the County. Mr. Tate would serve as the principal contact person at the firm for County officials and coordinate the participation of other attorneys in the working group. Ashley S. Dennis, a public finance associate, would support him with legal research and document drafting. Matthias M. Edrich, one of the firm s Section 103 tax attorneys, would conduct the tax analysis for the County s financing and prepare all necessary tax documents. Brief résumés of these attorneys follow. KutakRock.com 3

6 Penfield W. Tate III, a partner in the firm s Denver office, has focused his practice in public finance and municipal law for more than 35 years and has experience working as bond counsel, disclosure counsel, trustee s counsel and underwriter s counsel. He has wideranging experience representing public entities, lenders and underwriters engaged in the process of financing essential public improvements and advising local and state governments in the exercise of their administrative responsibilities. Since 2004 Mr. Tate has served as bond counsel for Colorado municipal bond issuers for financings aggregating in excess of $7 billion. During the same period, he has served as underwriter s or disclosure counsel for financings aggregating more than $4.9 billion for public entities throughout the United States. He has been involved in a variety of financings, including fixed and variable rate, taxable and tax-exempt, senior and subordinate, revenue, general obligation, master lease and master indenture issuances, and lease-purchases. He is also experienced in transactions involving letters of credit, municipal bond insurance, standby bond purchase arrangements and other forms of credit enhancement. In government, Mr. Tate has served in both the Colorado Senate and House of Representatives. He has served as executive director of the Department of Administration for former Governor Roy Romer, as well as on both the State of Colorado Banking Board and the Colorado Housing and Finance Authority. As an aide to former Denver Mayor Federico Peña, he represented the mayor s office on issues involving airport finance, business and economic development, and housing development. Mr. Tate earned a bachelor s degree from Colorado State University in 1978 and his J.D. from Antioch School of Law in He is admitted to practice in Colorado, the United States Supreme Court, the United States Court of Appeals for the Tenth Circuit and the United States District Court for the District of Colorado. Ashley S. Dennis, an associate in the firm s Denver office, concentrates her practice in Colorado public finance. Since joining Kutak Rock after graduating from law school in 2015, she has assisted in a number of general obligation bond financings as well as refundings for Colorado entities including a judicial center and detention facility financing for Alamosa County, Colorado and a fire station and city hall financing for the City of Greeley, Colorado. Before joining the firm, Ms. Dennis completed an internship with the U.S. Department of Housing and Urban Development in the Office of Fair Housing and Equal Opportunity and a Judicial Externship with the Colorado Court of Appeals. She earned a bachelor s degree from the University of Denver in 2012 and her law degree from the University of Denver College of Law in She is admitted to practice in Colorado. Matthias M. Edrich, a partner in Kutak Rock s Denver office, serves as a tax attorney in the firm s national federal tax practice. He advises government, nonprofit and for-profit clients concerning the federal tax treatment of municipal and corporate securities offerings. Mr. Edrich also represents governmental and nonprofit clients in Internal Revenue Service audits of municipal debt. Prior to joining Kutak Rock, he served as special tax counsel and bond counsel in a national public finance law firm and also served as disclosure counsel to a local international airport. He recently completed two terms as chair of the Tax Committee of the National Association of Bond Lawyers and has chaired or served as panel speaker at recent NABL tax seminars. Mr. Edrich received his B.S. from the University of Colorado at Boulder in 2003, an M.B.A. and law degree from the University of Denver in 2007 and an LL.M. in taxation from the University of Denver in He is licensed to practice in Colorado and is admitted to the U.S. Tax Court. 3. Scope of Services Kutak Rock views the role of bond counsel as a proactive facilitator. As bond counsel, our goal would be to work with members of the County to achieve its objectives in an effective and efficient manner. This will require careful preliminary work in the early stages of the financing and collaboration with appropriate members KutakRock.com 4

7 of the County, its staff and the remainder of the financing team in structuring the transaction and achieving the purposes identified by the County within the organizational parameters and timeline of the ballot issue. It has been our experience that lack of attention to tax and securities issues and other structural matters early in the process can make an otherwise uncomplicated transaction unnecessarily trying. As bond counsel, our aim would be to make the transaction as smooth and successful for the County as possible. Bond Counsel As bond counsel, Kutak Rock would expect to adhere closely to the following procedures which address both pre-election and post-election duties for the delivery of legal services in connection with any individual financing: (1) Attend initial meeting with the County s staff to discuss concepts and establish procedures for issuance of bonds and other debt obligations. (2) Attend meetings with members of financing team (including the County s staff, financial advisor, underwriter, counsel, etc.) to structure financings to the best advantage of the County and to ensure compliance with Colorado law and procedures and federal tax and securities requirements; advise and consult with the County s staff and underwriter as to legal aspects of a preferred structure, e.g., use of serial or term bonds, use of fixed rate or variable rate bonds, use of competitive and negotiated bond sales, etc., and if requested, attend meetings of the County s Commissioners to answer questions relating to authorization and sale of bonds. (3) Prepare legal documents to conform to selected financing structure, including election proceedings (resolution, notices, ballots, etc.), bond resolution, financing (lease) agreement, tax certifications, bond counsel legal opinion regarding validity and tax exemption of securities and other necessary closing documents and certificates (such as no-arbitrage and general certificates). Conduct due diligence. (4) Advise the County with respect to Colorado election law matters. (5) Assist the County with preparing for and responding to any due diligence review performed by its lender/underwriter; assist the County with determining compliance with and any reporting obligations under Rule 15c2-12. (6) Prepare/review/revise the official statement, private placement memorandum or other offering document. (7) Coordinate with rating agencies and credit enhancers to assist the County in obtaining highest rating possible on bonds. (8) Assist the County s staff, financial advisors, underwriters and counsel in reviewing and negotiating a bond purchase agreement or other purchase or placement document. (9) Prepare final documents and certificates for adoption and execution. (10) Deliver our opinion of bond counsel and any supplemental opinion requested by the County and/or its lender/underwriter. KutakRock.com 5

8 team. (11) Prepare closing transcripts for distribution to the County and other members of financing Disclosure Counsel As disclosure counsel, Kutak Rock would expect to adhere closely to the following procedures, many of which overlap and are compatible with our work as your bond counsel. (1) Attend organizational meeting with the appropriate County representatives, underwriter and financial advisor to determine approach to the transaction and identification of particular issues that may require disclosure; establish schedule for disclosure component of transaction. (2) Review prior official statements, disclosure undertakings and financial statements of the County; review due diligence procedures and develop efficiencies with County officials; prepare disclosure on the County to comply with federal disclosure regulations including the delivery of such statement in an acceptable format dictated by the MSRB. (3) Obtain information from the County, financial advisor, underwriter, underwriter s counsel and other officials as appropriate to assist in preparing Preliminary Official Statement. (4) Prepare and circulate first draft of Preliminary Official Statement. (5) Conduct document markup session for Preliminary Official Statement with appropriate parties; revise and circulate Preliminary Official Statement. (6) Apprise the County of rulings and findings by federal and state regulatory agencies, including, among others, the Internal Revenue Service, the Securities and Exchange Commission, the Municipal Securities Rulemaking Board and the state legislature, that affect the Commonwealth of Pennsylvania s financing process regarding post-issuance compliance and ongoing disclosure. (7) Transmit Preliminary Official Statement to printer or coordinate posting of electronic version; finalize Official Statement. (8) Prepare all documents and materials necessary to comply with applicable continuing disclosure requirements for the transaction. Election Notices (9) At closing, render required opinion. The firm recognizes the importance that the constitutionally and statutorily required notices play in a successful bond election. Therefore, we customarily provide forms of the TABOR Notice, the website posting notice and, if necessary, the 10-day notice (which is usually published by the County Clerk), and provide more hands on involvement than other bond attorneys in the contents of these notices, especially the summaries of written comments section of the TABOR Notice. KutakRock.com 6

9 4. Compensation Pre-Election Services In our experience, hourly rates are the most economical for entities wishing to engage legal counsel for pre-election services, such as those described in section B of the County s Request for Proposals No , including factual, legal and political research and due diligence; advising on and drafting the reimbursement resolution; crafting the language of the ballot question and any related TABOR notices; and providing any other services required by the Project or requested by the County. After meeting with representatives of and consultants to the County and obtaining additional information about the Project, we will be prepared to finalize a not-toexceed figure for the pre-election services but presently believe that it will not exceed $4,000. We intend to staff this Project as leanly as possible to control cost and without compromising the quality or breadth of expertise required by the engagement. To that end, as circumstances require, additional expertise within the firm may be utilized but only with the express written consent of the County. The hourly rates for core members of the proposed working group are as follows: Expense Reimbursement Attorney Hourly Rate Penfield W. Tate III $500 Ashley S. Dennis $235 Matthias M. Edrich $400 In addition to its legal services fee, the firm would request reimbursement for such out-of-pocket expenses as costs of document reproduction, overnight delivery services, electronic legal research, postage and transcript preparation. We would not expect expenses to exceed $2,500, and we would be willing to cap expenses at such level. Post-Election Services and Alternative Arrangements Should the ballot issue pass, we are willing to continue to provide services at the agreed-upon pre-election hourly rates quoted above. Alternatively, at the County s option the hourly fees accumulated pre-election will be rolled into a flat fee for post-election bond and disclosure counsel services. In order to provide that estimated flat fee, we will require a clearer picture of the Project being financed. It is our expectation that we will be in a position to provide the flat fee estimate at the time the structure is determined and the reimbursement resolution and election question are finalized. KutakRock.com 7

10 APPENDIX A PUBLIC FINANCE PRACTICE KutakRock.com Appendix A