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HomeMy WebLinkAboutOrdinance No. 01-1285 CITY OF THE COLONY, TEXAS ORDINANCE NO. 01- AN ORDINANCE OF THE CITY OF THE COLONY, TEXAS, AUTHORIZING THE MAYOR TO ENTER INTO AN ENGAGEMENT LETTER WITH McCALL, PARKHURST & HORTON, LLP FOR SERVICES PROVIDED IN CONNECTION WITH THE ISSUANCE OF BONDS AND CREATION OF THE PROJECT AGREEMENT FOR THE DEVELOPMENT OF THE COMMUNITY COMPLEX; ATTACHING THE APPROVED FORM OF ENGAGEMENT LETTER AS EXHIBIT "A"; AND PROVIDING AN EFFECTIVE DATE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS: SECTION 1. That the Mayor o£ the City o£ The Colony, Texas is hereby authorized to execute on behalf of the City an engagement letter McCall, Parkhurst & Horton, LLP for services provided in connection with the issuance of bonds and creation of the project agreement for the development o£the Community Complex. The approved form of the engagement letter is attached hereto as Exhibit "A", and made a part hereof for such purposes. SECTION 2. This Ordinance shall take effect immediately from and after its passage by the City Council of the City o£The Colony, Texas. DULY PASSED AND APPROVED by the City Council of the City of The Colony, Texas this 19th day of March, 2001. ATTEST: William W. Manning, ~vl '~ ,/~u~ha~ I~ev~.ih,fDeputy City Secretary APPROVED AS TO FORM: H~-kel, (~ity~ - -- . LAW OFFICES MCCALL, PARKHURST&HORTON L.L.P. 600 CONGRESS AVENUE 717 NORTH HARWOOD 700 N, ST. MARY'S STREET 1250 ONE AMERICAN CENTER NINTH FLOOR 1225 ONE RIVERWALK PLACE AUSTIN, TEXAS 78701-3248 DALLAS, TEXAS 75201-8587 SAN ANTONIO, TEXAS 78205-3503 TELEPHONE: 512 478-3805 TELEPHONE; 214 754-9200 TELEPHONE: 210 225-2800 FACSIMILE: 512 472-0871 FACSIMILE: 214 754-9250 FACSIMILE: 210 225-2984 March 15, 2001 Mayor and Members of the City Council City of The Colony 6800 North Main The Colony, Texas 75056 Members of the Board of Directors The Colony Community Development Corporation 5151 North Colony Boulevard The Colony, Texas 75056 Re: $7,000,000 City of The Colony Combination Tax and Revenue Certificates of Obligations, Series 2001 Ladies and Gentlemen: The purpose of this engagement letter is to set forth certain matters concerning the services we will perform as bond counsel to the City of The Colony, Texas (the "City") and The Colony Community Development Corporation (the "Corporation") in connection with the issuance of the above-referenced certificates of obligation (the "Obligations") and the execution and delivery of a Project Agreement between the City and the Corporation in connection with the construction and funding of the projects to be financed with the proceeds of the Obligations. We understand that the Corporation was created by and on behalf of the City to provide public facilities for the use and benefit of the City and to promote economic development within the City. We also understand that the Obligations will be authorized, issued and delivered to acquire, construct and equip public park facilities and other public improvements for the City's proposed community complex (the "Project"), and will be secured by a pledge of ad valorem taxes and a limited pledge of surplus net revenues of the City's waterworks and sewer system. We further understand that the Project Agreement will be entered into as a necessary part of the financing transaction to provide for the construction, operation and ownership of the Project and for the Corporation to provide funds to pay the costs of providing the Project. SCOPE OF ENGAGEMENT In this engagement, we expect to perform the following duties: (1) Subject to the completion of proceedings to our satisfaction, render our legal opinion (the "Bond Opinion") regarding the validity and binding effect of the Obligations, the source of payment and security for the Obligations, and the excludability of interest on the Obligations fi.om gross income for federal income tax purposes. (2) Prepare and review documents necessary or appropriate to the authorization, issuance and delivery of the Obligations, coordinate the authorization and execution of such documents, and review enabling legislation. (3) Assist the City in seeking from other governmental authorities such approvals, permissions and exemptions as we determine are necessary or appropriate in connection with the authorization, issuance and delivery of the Obligations, except that we will not be responsible for any required federal or state securities law filings. In this connection, we particularly undertake to assist the City in having the Obligations approved by the Public Finance Division of the Office of the Texas Attorney General, and, following such approval, registered by the Texas Comptroller of Public Accounts. (4) Review legal issues relating to the structure of the Obligation issue. (5) Draft and circulate for review and comment by the Corporation, the City, their respective staffs and general counsel the Project Agreement, and coordinate the authorization and execution of such document. (6) Attend meetings of the City Council and the Board of Directors as requested. Our Bond Opinion will be delivered by us on the date the Obligations are exchanged for their purchase price (the "Closing"). The City will be entitled to rely on our Bond Opinion. The Bond Opinion 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 City and the Corporation with applicable laws relating to the Obligations. During the course of this engagement, we will rely on you to provide us with complete and timely information on all developments pertaining to any aspect of the Obligations and their security. We understand that you will direct members of your staff and other employees and consultants of the City and Corporation to cooperate with us in this regard. Our duties in this engagement are limited to those expressly set forth above. Unless we are separately engaged in writing to perform other services, our duties do not include any other services, including the following: -2- (1) Review of procurement requirements, or preparation or review of requests for bids or proposals or preparation or review of construction documents. (2) Assisting in the preparation or review of financial disclosure with respect to the Obligations. (3) Preparing requests for tax rulings from the Internal Revenue Service, or no action letters from the Securities and Exchange Commission. (4) Preparing state securities law memoranda or investment surveys with respect to the Obligations. (5) Drafting state constitutional or legislative amendments. (6) Pursuing test cases or other litigation. (7) Making an investigation or expressing any view as to the creditworthiness of the City, the Corporation or the Obligations. (8) Representing the City or the Corporation in Internal Revenue Service examinations or inquiries, or Securities and Exchange Commission investigations. (9) After Closing, providing continuing advice to the City, the Corporation or any other party concerning any actions necessary to assure that interest paid on the Obligations will continue to be excludable from gross income for federal income tax purposes (e.g., our engagement does not include rebate calculations for the Obligations). (10) Negotiating the terms of, or opining as to, any investment contract. (11) Except as hereinafter described, assisting in the preparation or review of an official statement or any other disclosure document with respect to the Obligations, or performing an independent investigation to determine the accuracy, completeness or sufficiency of any such document or rendering advice that the official statement or other disclosure document does not contain any untrue statement of a 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. We will review those sections of the disclosure document to be disseminated in connection with the sale of the Obligations which describe the Obligations, the ordinance of the City Council authorizing the issuance of the Obligations, and the tax-exempt treatment of the interest on the Obligations for purposes of federal income taxation. (12) Addressing any other matter not specifically set forth above that is not required to render our Bond Opinion. -3- ATTORNEY-CLIENT RELATIONSHIP Upon execution of this engagement letter, the City and the Corporation will each be our client and an attorney-client relationship will exist between each of you and us. We further assume that all other parties in this transaction understand that we represent only the City and the Corporation in this transaction, 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 letter; the City's and Corporation's execution of this engagement letter will constitute an acknowledgment of those limitations. Our representation of the City and the Corporation will not affect, however, our responsibility to render an objective Bond Opinion. Our representation of the City and the Corporation and the attorney-client relationships created by this engagement letter will be concluded upon issuance of the Obligations. Nevertheless, subsequent to Closing, we will mail the appropriate Internal Revenue Service Form 8038-G, and prepare and distribute to the participants in the transaction a transcript of the proceedings pertaining to the Obligations. CONFLICTS As you are aware, our firm represents many political subdivisions and investment banking firms, among others, who do business with political subdivisions. It is possible that during the time that we are representing the City or the Corporation, one or more of our present or future clients will have transactions with the City or the Corporation. It is also possible that we may be asked to represent, in an unrelated matter, one or more of the entities involved in the issuance or purchase of the Obligations. We do not believe such representation, if it occurs, will adversely affect our ability to represent you as provided in this letter, either because such matters will be sufficiently different from the issuance of the Obligations 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 Obligations. Execution of this letter will signify the City's and the Corporation's consent to our representation of others consistent with the circumstances described in this paragraph. The City's and Corporation's execution of this engagement letter will also constitute an acknowledgment of and consent to our representation of the City and the Corporation, each in their respective capacities in the proposed transaction, as bond counsel. While we believe that the interests of the City and the Corporation in the transaction herein described are the same, to the extent that there are any conflicts in connection therewith the City's and Corporation's execution of this engagement letter constitutes a waiver of such conflicts. FEES Based upon: (i) our current understanding of the terms, structure, size and schedule of the financing represented by the Obligations; (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, our fee will be $15,000.00, to be paid by the City. In addition, the City will reimburse us for out-of pocket expenses incurred in connection with the proposed transaction, such -4- as travel costs, photocopying, deliveries, long distance telephone charges, telecopier charges, filing fees (including the Texas Attorney General filing fee for the Obligations of $1,000) and other expenses. Our statement for payment of our fee and reimbursement for out-of-pocket expenses will be billed after the Closing. If the financing is not consummated, we understand and agree that we will not be paid, except that we would be entitled to reimbursement for the Attorney General filing fee, if we have advanced it on behalf of the City. 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 materials retained by us after the termination of this engagement. If the foregoing terms are acceptable to you, please so indicate by returning the enclosed copy of this engagement letter dated and signed by an authorized officer, retaining the original for your files. We look forward to working with you. Respectfully yours, McCa~. rst ~L.L.P. Accepted an~Approved C' e Colo Mayor Date: ,..,~- I'/ The Colony ~ommunity Development Corporation ...;;. /) . /o irectors Date: 4-,.~' C / -5-