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2011-115-1508 - Bond Counsel Services City of Miami Gardens Agenda Cover Memo Council Meeting Date: July 13, 2011 Item Type: (Enter X in box) Resolution Ordinance Other X Fiscal Impact: (Enter X in box) Yes No Ordinance Reading: (Enter X in box) 1st Reading 2nd Reading X Public Hearing: (Enter X in box) Yes No Yes No X Funding Source: Various Bond Issues Advertising Requirement: (Enter X in box) Yes No X Contract/P.O. Required: (Enter X in box) Yes No RFP/RFQ/Bid #: X N/A Strategic Plan Related (Enter X in box) Yes No Strategic Plan Priority Area: Enhance Organizational Bus. & Economic Dev Public Safety Quality of Education Qual. of Life & City Image Communcation Strategic Plan Obj./Strategy: (list the specific objective/strategy this item will address) X Sponsor Name City Attorney Sonja Dickens Department: Legal Department Short Title: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MIAMI GARDENS, FLORIDA AUTHORIZING THE CITY ATTORNEY TO ENTER INTO THAT AGREEMENT FOR BOND COUNSEL SERVICES WITH BRYANT, MILLER & OLIVE, ATTACHED HERETO AS EXHIBIT EXHIBIT “A”; PROVIDING FOR THE ADOPTION OF REPRESENTATIONS; PROVIDING FOR AN EFFECTIVE DATE. Summary: Periodically, the City has been required to issue revenue bonds for capital improvements and for equipment, etc. In addition, the City has previously issued a tax anticipation bond on an emergency basis in order to ensure adequate cash flow until such time as sufficient ad valorem taxes are remitted to the City by the Tax Collector for Miami-Dade County to pay all the obligations of the City. Previously, the City utilized the services of Jeff DeCarlo of Adorno and Yoss as bond counsel on these matters. However, due to a conflict of interest, Jeff DeCarlo is no longer able to serve as bond counsel for the City. The City is required to have bond counsel who is required to issue ITEM K-12) CONSENT AGENDA RESOLUTION Bond Council Services 1515 NW 167 Street, Building 5 Suite 200 Miami Gardens, Florida 33169 opinions which are separate and apart from those of the City Attorney. The City previously hired Jolinda Herring of Bryant, Miller & Olive to serve as the City’s disclosure counsel on the City Hall bond issue. The firm of Bryant, Miller & Olive specializes in bond matters and represent a number of various municipalities across the State of Florida and is more than qualified to serve as City’s bond counsel for ongoing bond issues. Proposed Action: The City Attorney recommends the approval of the resolution. Attachment: Exhibit “A” – Engagement Letter Exhibit “B” = Firm Qualifications } July 5, 2011 Sonja Dickens City Attorney City of Miami Gardens 1515 N.W. 167th Street Building 5, Suite 200 Miami Gardens, Florida 33169 Re: Bond Counsel Services for City of Miami Gardens Dear Sonja: The purpose of this letter is to advise you of our fee estimate and to describe the services we will perform as bond counsel to the City of Miami Gardens, Florida (the “Issuer”). SCOPE OF ENGAGEMENT As Bond Counsel, 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 Bonds, the source of payment and security for the Bonds, and the excludability of interest on the Bonds from gross income for federal income tax purposes. (2) Draft the basic agreements governing the issuance of the Bonds. (3) Prepare and review other documents necessary or appropriate to the authorization, issuance and delivery of the Bonds, coordinate the authorization and execution of documents, and review and, where appropriate, draft enabling legislation. (4) Assist the Issuer in seeking from other governmental authorities such approvals, permissions and exemptions as we determine are necessary or appropriate in connection with the authorization, issuance, sale and delivery of the Bonds, except that we will not be responsible for any required blue sky filings. Page -2-(5) Review legal issues relating to the structure of the Bond issue. (6) Serve as the Issuer’s closing agent in connection with the closing of the Bonds. (7) Assist the Issuer in presenting information relating to the structure and legality of the Bonds to bond rating organizations and providers of credit enhancement. (8) Prepare the Issuer’s declaration of official intent, if any, to reimburse Project costs paid by the Issuer prior to the issuance of the Bonds. Our Bond Opinion will be addressed to the Issuer and will be delivered by us on the date the Bonds are exchanged for its purchase price (the “Closing”). The Bond Opinion will be based on facts and law existing as of its date. In rendering our Bond Opinion, we will rely on the certified proceedings and other certifications of public officials, officers of the Issuer 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 rely on you to provide us with complete and timely information on all developments pertaining to any aspect of the financing, the Bonds and the security for the Bonds. Among other things, we will require the Issuer to execute a certificate of fact relating to the use of Bond proceeds. Among other things, our duties as Bond Counsel do not include: (a) Preparation of blue sky or investment surveys with respect to the Bond. (b) Investigation or expression of any view as to the creditworthiness of the Issuer, the Bond, any credit enhancement provider, or the debt instrument; or, providing services related to hedging or derivative financial products (e.g. "swaps" and related documents or opinions). (c) Representation of the Issuer in post-closing regulatory investigation or matters. (d) Bankruptcy matters. (e) Drafting state constitutional or legislative amendments. (f) Pursuing test cases or other litigation, such as contested validation proceedings, except as set forth above. (g) Representing the Issuer in Internal Revenue Service examinations or inquiries, or Securities and Exchange Commission investigations. Page -3-(h) After Closing, providing continuing advice to the Issuer or any other party concerning any actions necessary to assure that interest paid on the Bond will continue to be excludable from gross income for federal income tax purposes unless specifically engaged for such purpose (e.g., our engagement does not include rebate calculations for any Bond, but such services can be separately contracted for with Integrity Public Financial Consulting, Inc., a subsidiary of the Firm). (i) Addressing any other matter not specifically set forth above that is not required to render our Bond Opinion.ATTORNEY-CLIENT RELATIONSHIP We understand that the City Attorney will act as Issuer’s counsel in these transactions. We assume that other parties to the transactions will retain such counsel as they deem necessary and appropriate to represent their interests in these transactions. FEES The Issuer will be responsible for payment of our fee, please refer to Exhibit A for a schedule of our fees. Our fee is based upon: ((i) our current understanding of the terms, structure, size and schedule of the financings represented by the Bonds; (ii) the duties we will undertake pursuant to our engagement letter with the Issuer and as described in this letter; (iii) the time we anticipate devoting to the financings in connection therewith; (iv) the Bonds being sold as a private placement to a bank or a public offering; and (v) the responsibilities we will assume. Our fee may vary: (a) if the principal amount of Bonds actually issued differs significantly from the amount previously stated; (b) if material changes in the structure or schedule of the financing occur; or (c) if unusual or unforeseen circumstances arise which require a significant increase in our time or responsibility. If, at any time, we believe that circumstances require an adjustment of our original fee estimate, we will advise you. In addition, we will be reimbursed for all client charges made or incurred in connection with the transactions. Such costs generally include travel costs, photocopying, document printing, deliveries, long distance telephone charges, telecopier charges, filing fees, computerassisted research and other expenses. Our fee is usually paid at the Closing, and we customarily do not submit any statement until the Closing unless there is a substantial delay in completing the financing. Detailed supporting documentation is available upon request for statement billings. If the financing is not consummated, we understand and agree that we will not be paid the stated fee; however, we will be paid all out-of-pocket expenses incurred. Page -4-CONFLICTS The rules regulating The Florida Bar provide that common representation of multiple parties is permissible where the clients are generally aligned in interest, even though there is some difference in interest among them. The Firm has disclosed to the Issuer that it has, and may in the future, serve as bond or disclosure counsel to other local governments or otherwise act as original purchaser's counsel on public finance matters in Florida. The Firm has an active and wide-ranging practice in public finance in Florida and elsewhere in the United States. In the course of that practice and other engagements the Firm undertakes, the Firm represents numerous public entities, financial institutions, credit banks, credit enhancers, underwriters and issuers of bonds, lenders, borrowers, counterparties and trustees. Therefore, in the course of the Firm’s representation of the Issuer as Bond Counsel in public finance transactions, the Firm may now or in the future represent entities that, by virtue of their involvement in a particular transaction, industry, business, trade, or otherwise, have interests adverse to those of the Issuer in matters unrelated to the particular public finance transactions in which the Firm represents the Issuer. Material risks may arise when an attorney represents clients with adverse interests. For example, confidential information disclosed by a client during the course of an engagement might, if inadvertently disclosed to another client, be detrimental to the client. Usually this is not a relevant factor when dealing with public entities subject to the Florida public records laws. Such representations may create the perception that the lawyer might represent one client less zealously in order to advance the interests of another client. The Firm believes that the Issuer is a sophisticated client that readily appreciates the implications of conflicts and waivers and has ready access to independent counsel. After careful consideration, the Firm reasonably believes that it can and will competently and zealously represent the Issuer in public finance transactions notwithstanding its current or future representation of clients with interests adverse to the Issuer in unrelated matters. The Firm will maintain confidentiality and not disclose or use any of the Issuer's nonpublic, confidential information acquired as a result of its representation of the Issuer to the Issuer's disadvantage in connection with any matter in which the Firm represents an entity adverse to the Issuer. The Firm encourages the Issuer to consult independent counsel regarding the issues addressed herein. In that regard, it is the Firm’s belief that a disinterested lawyer would conclude that the advantages to the Issuer of engaging the Firm outweigh any existing or potential material risks arising from the Firm’s representation of other entities, would conclude that it is proper to seek consent, and would counsel the Issuer to consent to this representation. In each transaction, the Issuer will be our client and an attorney-client relationship will exist between the Issuer and us. In performing our services as Bond Counsel, we will represent the interest of the Issuer exclusively. We will not be representing any other party and will not be acting as an intermediary among the parties. Our representation of the Issuer will not affect, however, our responsibility to render an objective Bond Opinion. Page -5-ADDITONAL SERVICES The Firm shall also be available to assist with special counsel services, including litigation support and general governmental services. Such services shall be on an hourly basis. The fees for any legal opinions in our role as special counsel may be based on a negotiated fee agreed to by the parties, and not be based solely on the basis of time charges. BRYANT MILLER OLIVE P.A. By: Shareholder Accepted and Approved: CITY OF MIAMI GARDENS, FLORIDA By: Title: Date: } Exhibit A The Firm will strive to provide the highest quality of services to the City at reasonable prices. At this time it is virtually impossible to set forth proposed fees that recognize the complexity of the transactions, the amount of work to be completed, and any benefit that the City should receive for repeated transactions. Therefore, it is generally best to evaluate fees once both parties have a better understanding of these matters and to negotiate fees at such time. All fees set forth below are negotiable. We are unaware of any situation where the Firm has been unable to negotiate a fee arrangement that was satisfactory to the issuer. The fees provided for Bond Counsel services for the issuance of bonds will be presented as a price per $1,000 of par value issued in each of the cumulative ascending levels of debt in any issuance. Minimum fee for a successful closing of debt: $10,000.00. Fees for advice and services not directly related to a bond financing are presented on an hourly basis. Hourly Hourly Fee Senior Shareholder $325.00 Shareholder and Of Counsel $300.00 Senior Associate $250.00 Associate $200.00 Paralegal $100.00 Law Clerk $60.00 Fixed Rate General Obligation Bonds Fixed Rate Revenue Bonds Variable Rate Revenue/Refunding Bonds FIRST $25,000,000 @$1.40 @$1.50 @$1.75 SECOND $25,000,000 @$1.15 @$1.25 @$1.50 THIRD $25,000,000 @$1.00 @$1.00 @$1.25 FOURTH $25,000,000 @$0.60 @$0.75 @$1.00 FIFTH $25,000,000 @$0.40 @$0.50 @$0.75 SIXTH $25,000,000 @$0.25 @$0.25 @$0.50 _______________________________________________________________ _______________________________________________________________ Bond Counsel Services for City of Miami Gardens, Florida Bryant Miller Olive SunTrust International Center 1 SE 3rd Avenue Suite 2200 Miami, FL 33131 (305) 374-7349 www.bmolaw.com __________________________________________________________________ _______________________________________________________________2 Firm Overview and Public Finance Achievements Bryant Miller Olive P.A. (the “Firm”) has been a leader in Florida public finance law for more than 40 years. Established in 1970, the Firm first appeared in The Bond Buyer's Municipal Marketplace (referred to in the industry as "The Red Book") as a nationally recognized bond counsel firm in 1973. The Firm has offices in Miami, Orlando, Tampa, Jacksonville, Tallahassee, Atlanta andWashington, D.C. Our Firm has 21 attorneys who practice public finance law, all of whom have experience with the issuance of taxable and tax-exempt bonds or notes for Florida local governments. This gives the Firm more Florida-based municipal law attorneys than any other law firm, and creates a depth of knowledge and experience that surpasses those found at other firms. Complex transactions are the mainstay of the Firm's practice. Members of the Firm have represented more than 500 bond issuers, including issuers in Alabama, Connecticut, the District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Vermont, Virginia and the U.S. Virgin Islands. As the largest and most resourceful public finance legal group in the southeast, the Firm offers the best of both worlds: the depth and expertise of a large firm, and the responsiveness, efficiency, creativity and minimal conflicts of a small firm. For the last 16 years, the Firm has consistently been the top-ranked bond counsel firm in Florida by The Bond Buyer, based on the number of transactions completed. In 2009, the Firm was also ranked as the number one bond counsel firm for Washington D.C. In addition, since 2005, the Firm has been recognized as the leading disclosure and underwriter's counsel firm in the southeastern United States, based on dollar volume. The Firm is rated "AV Preeminent" by Martindale-Hubbell. The Firm's public finance attorneys have extensive experience serving as bond counsel, disclosure counsel, underwriter's counsel, special counsel and special tax counsel in connection with debt issued by federal and state agencies, counties, cities, special districts, utilities, universities, and 501(c)(3) corporations. In addition to its public finance law services, the Firm offers a multidisciplinary range of legal services, with practice groups focused on Affordable Housing, Bankruptcy and Creditors’ Rights, Corporate Trust and Default, Energy and Utility, Environment and Climate Change, Government Procurement, Government Consulting, Labor and Employment, Land Use, Litigation, Public Policy, Public Private Partnership, Real Property, and State and Local Government. Of particular interest to the City of Miami Gardens, Florida (the “City”), the Firm has extensive capabilities and experience related to government procurement law, government consulting, general state and local government law, real estate law and labor and employment matters. __________________________________________________________________ _______________________________________________________________3 Bond Counsel Experience The Firm has been the top-ranked Bond Counsel firm in the State of Florida for the last 16 years, based upon the number of transactions completed. In the past five years, the Firm has served as bond counsel, disclosure counsel, underwriter's counsel, special counsel and swap counsel on more than 1,000 financings involving more than $50 billion in principal amount of governmental bonds. These transactions have financed a wide range of projects including general governmental projects, public utilities, water and sewer improvements, recreation, parking and public safety facilities, education projects (K-12 and higher education), electric generation and transportation facilities, solid waste management facilities, healthcare, and affordable housing. As bond counsel, we prepare all of the legal documentation relating to the bonds which are issued, including, but not limited to, the bond resolution and the competitive sale documents, if applicable, applicable closing documents and tax certifications. We also render a legal opinion as to both the validity and tax-exempt status of the bonds. Members of the Firm are noted for excelling on challenging deals. Just a few examples of our work include the our representation of the South Florida Water Management District as Bond Counsel in its acquisition of thousands of acres of land from the U.S. Sugar Corporation as part of the State's efforts to restore the Florida Everglades. Since 2006, the Firm has represented the Florida Department of Transportation on certain matters related to public private partnership financings, including financings for the Port of Miami Tunnel. We also served as bond counsel for the City of Miami, Florida on the Marlins Stadium project involving the financing of the parking garages related to the stadium. 0 20 40 60 2008 2009 2010 Florida Bond Counsel (2008-2010) Based onNumber of Issuances __________________________________________________________________ _______________________________________________________________4 Bond Counsel Experience in Complex and Innovative Financings The Firm has been extremely innovative in municipal finance throughout its history and we are proud of this tradition of innovation in serving the needs of our public finance clients. The Firm believes that innovation in public finance does not take place in a vacuum. We believe it results when a thorough understanding of a client's financing objectives is combined with an in-depth knowledge of all areas of law potentially affecting the structure of a financing, including state bond and regulatory law, federal income tax law, and federal and state securities laws. Attorneys at the Firm have been at the forefront of developing innovative programs that have helped the State of Florida and its local governments save millions of dollars. Examples include: (i) the creation of pooled loan programs, including the Sunshine State Governmental Financing Commission and the First Florida Governmental Financing Commission, which have allowed local governments to pool loans together in order to reduce issuance costs and achieve economies of scale; (ii) significant involvement in the concept of "covenant to budget and appropriate" financings, which has allowed governments the ability to issue long-term debt with less restrictive covenants and without pledging specific revenue sources; (iii) validation of the first bonds in Florida for the purpose of funding deficits in pension funds, resolving issues related to whether such bonds could only be issued for "capital projects;" (iv) participation in the issuance of the first bonds in Florida to fund Other Post Employment Benefit liabilities; (v) serving as lead counsel on some of the first transactions in the country where issuers were able to negotiate termination provisions or acceptable intercreditor provisions with municipal bond insurers in light of the severe turmoil in the municipal municipal bond marketplace; and (vi) development of an innovative program to allow underlying State pollution control loans to be securitized, resulting in savings not otherwise achievable in a traditional advance refunding. Experience with Local Municipalities Bryant Miller Olive has worked with several cities similar to the City to address financing needs. For example, JoLinda Herring, served as lead attorney for the first bonds issued by the cities of City of Marathon, Town of Golden Beach and Town of Surfside. Below is a summary of these financings:  We served as bond counsel to the City of Marathon for financings of improvements to their utility system.  We served as bond and disclosure counsel to the Town of Golden Beach, Florida as they issued general obligation bonds to finance the construction of various capital improvements which included streetscape projects, underground power, landscaping and irrigation and acquisition of property for public purpose. __________________________________________________________________ _______________________________________________________________5  We serve as bond counsel to the Town of Surfside. The Town is currently issuing bonds to finance capital project to its utility system.  We are familiar with the City having served as Disclosure Counsel on its first public offering transaction to fund a City Hall. The Firm helped the City work through such issues as what is material and needs to be disclosed to the marketplace, as well as the issue of the lack of 10-year historical data which many rating agencies and insurers require. Also, we have been a resource for the City for updates and changes in public finance. Bond Validation Experience The Firm has helped draft and shape much of Florida's municipal finance law. The Firm’s state constitutional law expertise is often called upon in validation proceedings. We believe that no other firm has the level of experience in validations in Florida as Bryant Miller Olive, P.A. As additional evidence of our validation expertise, the Firm is bond counsel to the City of Sarasota (the "City of Sarasota") and disclosure counsel to Sarasota County ("Sarasota County"). Sarasota County entered into an agreement with the Baltimore Orioles in July 2009 which obligated the Orioles to relocate to Sarasota County for spring training. The City of Sarasota agreed to convey the spring training complex to Sarasota County, and Sarasota County agreed to construct new facilities and renovate existing facilities at the complex for the Orioles. The City of Sarasota also agreed to transfer funds to Sarasota County to offset part of the cost of construction. Sarasota County determined to issue bonds which were to be secured in part by Sarasota County's Tourist Development Tax. Simultaneously, the City of Sarasota also authorized issuance of bonds to fulfill its obligations. The Firm represented the City of Sarasota in the court validation action to approve the issuance of its bonds. After the four day trial, the Court entered a judgment validating the bonds and resolved the issues in the favor of the City of Sarasota. The contested issues included whether the underlying transaction was void ab initio because the elected officials violated the public meetings requirements of the Sunshine Law. In addition, arguments included whether the 2010 Office of Tourism, Trade and Economic Development general law was an unconstitutional special act, whether the transaction violated the public purpose clause of Article VII of the Florida Constitution, whether an unconstitutional lending of credit had occurred and whether an indemnification provision for environmental remediation was unconstitutional. Regulatory Agencies The Firm constantly monitors such actions of the SEC and other regulatory agencies and keeps its clients abreast of these changes as they occur. __________________________________________________________________ _______________________________________________________________6 Tax Experience and Approach As part of its public finance practice group, the Firm has in-house section 103 tax attorneys. The Firm is qualified to promptly respond to all matters of federal taxation relating to the issuance of state and local government debt and its tax experience is frequently sought in connection with bond financings throughout the country. Two of the Firm's attorneys, Leonard T. Marcinko and Robert C. Reid, concentrate their practices in the tax area and are nationally recognized for their tax capabilities with respect to municipal bonds. A portion of Ken Artin's practice is also devoted to federal tax matters. In addition to our legal professionals, Integrity Public Finance Consulting, LLC, a wholly owned subsidiary of the Firm, provides comprehensive arbitrage rebate services for municipal bond issuers on a nationwide basis. The Firm and its tax practitioners are regularly involved in assisting its public finance clients in complying with the provisions of the Internal Revenue Code of 1986, as amended (the "Code") and the income tax regulations and rulings issued thereunder (the "Regulations") relating to the issuance of tax-exempt bonds. This includes advising clients with respect to the complex provisions of the Code and Regulations relating to arbitrage and rebate. The Firm’s tax attorneys will undertake an analysis of each bond issue for compliance with all relevant provisions of the federal tax laws. The Firm's practice is that at least two attorneys approve the tax analysis before any legal opinion is given. Where appropriate, the Firm is also available to assist in obtaining any necessary rulings from the Internal Revenue Service. The Firm regularly monitors the current position of the Internal Revenue Service on various matters of interest to its public finance clients, including the Service's recently expanded enforcement activities in the bond area. For each issue, the bond attorneys and tax attorneys will regularly consult throughout the development of the specific plan of finance, the drafting of the basic bond documents, and the development of the specialized documents and certificates which are necessary to evidence the issuer's compliance with all relevant provisions of the federal tax laws.