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HomeMy WebLinkAboutResolution No. R18-38--------- A -M -W -W BE IT RESOLVED by the City Council of the City of Laurel, Montana, Section 1: Approval. The engagement letter between the City of Laurel and Dorsey & Whitney, LLP relating to serving as bond counsel for the Water System Revenue Bond, a copy attached hereto, is hereby approved. Section 2: Execution. The Mayor or Chief Administrative Officer and the City Clerk of the City of Laurel are hereby given authority to execute the engagement letter on the City's behalf. Introduced at a regular meeting of the City Council on July 17, 2017 by Council Member Sparks PASSED and ADOPTED by the City Council of the City of Laurel, Montana, this 17'h day of July, 2018. APPROVED by the Mayor this 17t" day of July, 2018. CITY OF LAUREL ... ... . ..... Tfio— mas C. Nelson, Mayor ATTEST: Beflra'nVLng Jerk -Treasurer n APPROVED AS TO FORM: Sam Painter, Civil City Attorney R18-38 Dorsey& Whitney —Bond Counsel Water System Revenue Bond IDORSEY" always ahead June 4, 2018 Mr. Tom Nelson, Mayor Ms. Bethany Langve, City Clerk/Treasurer City of Laurel P.O. Box 10 Laurel, MT 59044 DAN SEMMENS semmens.dan@dorsey.com Via First Class Mail Re: Water System Revenue Bond (DNRC Drinking Water State Revolving Loan Program), Sedimentation Basin Project City of Laurel, Montana Dear Mayor Nelson and Ms. Langve: This letter sets forth the services we will provide and our estimated fees for serving as bond counsel in connection with the issuance by the City of Laurel, Montana (the "City"), of its Water System Revenue Bond (the "Bond"), to evidence a loan from the State's Drinking Water State Revolving Fund Program (the "Program"), for its sedimentation basin project (the "Project"). As bond counsel, our principal function is to render an opinion with respect to authorization and issuance of the Bond. The opinion is rendered in written form at the time the Bond is delivered to the Department of Natural Resources and Conservation (the "DNRC"). The opinion would be addressed to the DNRC, as purchaser, and the City, and both parties are entitled to rely on it. The opinion addresses three basic matters: the validity of the Bond, based upon the proceedings taken in its authorization and issuance; 2. certain matters relating to the security for the payment of the Bond; and 3. the exemptions from current federal and state income taxation of the interest payable on the Bond. In fulfilling that function and responsibility, we have or will perform the following tasks for the City: prepare the bond resolution and the Bond and review proceedings of the City relating to other outstanding bonds and notes relating to financing improvements to the City's municipal water system (the "System"); 2. review water rate ordinances and resolutions to confirm that rates and charges are in effect at the time the Bond is issued to provide adequate revenues to pay the costs of operating and maintaining the System and to pay debt service on the 125 Bank Street I Suite 600 1 Missoula, MT 1 59802-4407 1 T 406.721.6025 1 F 406.543.0863 1 dorsey.com Mr. Tom Nelson Ms. Bethany Langve June 4, 2018 Page 2 Bond consistent with the Program requirements and adopted in accordance with the provisions of law; 3. coordinate with the City Clerk/Treasurer, or other designated officer of the City, the adoption of resolutions and other actions necessary to be taken by the governing body of the City; 4. advise the City of the statutory requirements for the issuance of the Bond and the Program rules for the purchase of the Bond by the Program; 5. prepare closing documents for the City and supervise closing on the Bond; and 6. deliver the opinion discussed above to the City and the DNRC. The fee for our services is a function of the size of the bond issue and the amount of time expended. There is a minimum amount of work that has to be done irrespective of the size of the bond issue. We understand that the size of the bond issue will be approximately $4,577,000. We estimate our fee will be $17,000 to $22,000, depending primarily on the amount of assistance needed to satisfy conditions precedent to the issuance of the Bond. If, as we proceed, we discover factors that are currently unanticipated that would cause us to exceed this estimate, we would let you know. We would expect to be paid at the time of closing on the Bond. Our fees are eligible costs of the Project and can be included in the amount of the Bond. It is mutually understood that the services set forth in this letter are solely for the benefit of the City. You should be aware that we have served as bond counsel to the State of Montana (the "State") with respect to establishing the Program and the issuance of the State's general obligation bonds to fund the Program. As bond counsel for the City's Bond, we would not represent the State or the DNRC in the negotiation of the terms of the Bond, the bond resolution, or other aspects of the proposed financing. At this point, the terms of the financing have been established in the approved Program documents and regulations and our principal task is to draft a bond resolution that conforms to these requirements and the terms of the Commitment Agreement or commitment letter prepared by DNRC. (In advising the City of the statutory and other legal requirements for the issuance of the Bond, in accordance with provisions of the Commitment Agreement or commitment letter, the requirements of the Program and statutory provisions, we can advise the City with respect to the legal implications of the covenants in the Commitment Agreement or commitment letter and statutory and Program requirements that would be contained in the bond resolution.) Accordingly, we do not anticipate that our acting as bond counsel to the State with respect to the Program will present any practical impediment to our acting as bond counsel to the City with respect to the Bond; and, in fact, we believe our familiarity with the Program could be an advantage to the City in completing its proceedings efficiently. As bond counsel to the State and the Program, however, we are available to the State, and we would intend to respond to questions raised by the DNRC regarding requirements of the Program, the operative documents relating to the State's Bond and the legal issues relating to Mr. Tom Nelson Ms. Bethany Lang\e June 4.2O1O Page 3 the type 0fobligation beingpu[chaaedhxthoProoFanitoevidenoethePr000amloan.iDthis case amunicipal revenue bond. |nsuch aresponse, vvewould not attempt tOadvocate o position onbehalf ofeither the State mrthe City, but torespond inour capacity aobond counsel with respect tothe State's outstanding bonds. While vvewould attempt torender independent advice, the potential for a conflict of interest or the appearance of a conflict of interest is present. The State has consented to our acting as bond counsel to the City in connection with the Bond. \&etrust that our serving aebond counsel tothe City and aobond counsel b}the State with respect to the Program is acceptable to the City. Ifso, please sign theettached Acknowledgment and return the same to us at your earliest convenience. Ifthere are any questions, please give uoecall ooxvecan answer those questions or provide any additional information about our firm or our qualifications to serve the City in this Very truly yours, , /Dan Sernme s Mr. Tom Nelson Ms. Bethany Langve June 4, 2018 Page 4 ACKNOWLEDGMENT The undersigned acknowledges receipt of the attached and foregoing engagement letter dated June 4, 2018, and confirms consent to the representation described therein on behalf of the City. Accepted this day of '2018. CITY OF LAUREL, MONTANA Its: