Ice Miller Donadio & RyanICE
MILLER
DONADIO
& RYAN
,T
December 17, 1996
Lucy A. Emison
(317) 236-2473
internet:emison@imdr.com
VIA OVERNIGHT DELIVERY
Debra M. Grisham
City Attorney
City Hall
One Civic Square
Cannel, Indiana 46032
Re: City of Cannel ("City") Economic Development Project - Keystone Square
Dear Deb:
We wanted to follow up on our letter of October 23, 1996 and our conversation this week
and to provide you with an updated description of our role as bond counsel for the economic
development financing in the City and our fee arrangements. As we understand it the financing
will involve the creation of an economic development area under IC 36-7-14 to finance local
public improvements and the issuance of bonds payable from tax increment revenues CTIF")
by the Carmel Redevelopment Commission CRedevelopment Commission").
The role of bond counsel in public finance is a unique role. Our job is principally to
render certain approving opinions regarding the validity of the bonds under applicable state and
federal laws and to render certain opinions concerning the tax status of the bonds and other
matters. In order to perform those functions we will, of necessity, be required to perform
essentially the following functions:
(a)
Preparation or review of all documentation e(!~, ordinances, resolutions,
agreements, leases, indentures, certificates, notices, and other forms) requisite to
the authorization, issuance, and sale of bonds;
With offices in Indianapolis and South Bend
One American Square · Box 82001 · Indianapolis, Indiana 46282-0002 · (317) 236-2100 ° FAX (317) 236-2219
211 West Washington · Suite 2420 ° South Bend, Indiana 46601-1785 ° (219) 234-7933 ° FAX (219) 234-7965
Debra M. Grisham
December 17, 1996
Page 2
(b)
Attendance if necessary (but attendance is rarely necessary) at meetings of the
Common Council or the Redevelopment Commission at which proceedings
affecting the transaction will be considered or voted upon;
(c)
Consultations with the various parties (normally the financial advisor, other
consultants, if any, and you), including bond insurers, rating agencies, or letter
of credit issuers, involved in the transactions regarding the details and problems
of the transactions and the legal proceedings required for them;
(d) Negotiations with key taxpayers, if any;
Monitoring key legislation related to your ability to complete your projects or
programs;
(f) Arranging for the printing of the bonds, if required;
(g) . Responding to inquiries from prospective purchasers of the bonds;
(h) Attendance at and supervision of the bond closing;
(i) Examination of the executed transcript documents;
(j)
If no problems arise forcing a decision not to issue the bonds, furnishing to the
issuer and to the purchasers of the bonds an approving opinion as to the legality
of the issue and the exclusion from gross income of interest on the bonds; and
Assembling, duplicating, and binding the transcript documents for delivery to the
parties to the transactions.
We will be drafting documents (or reviewing documents drafted by you or other parties)
and generally supervising the proceedings as they move toward closing. While our primary
responsibility is to the City as the issuer, we also have a responsibility to those persons or
entities who will ultimately hold the bonds to render an independent, objective opinion on the
bonds. Our main functions are to opine objectively that the bonds have been lawfully issued,
that their tax status is that for which the bond purchasers have bargained and agreed, and that
certain legal steps have been undertaken regarding timely payment of the bonds and the interest
on the bonds. Unless the City decides to make special arrangements, our engagement does not
include post issuance advice or any obligation to monitor or give advice on the City' s continuing
compliance with any tax requirements, as set forth in the bonds and the closing documents,
which must be followed after issuance of the bonds in order to preserve the exclusion from gross
Debra M. Grisham
December 17, 1996
Page 3
income of interest on the bonds or to give advice on continuing compliance with securities law
requirements.
As indicated above, if bonds are issued, we will be required to give an opinion as to
certain federal and state tax matters. We will make inquiries of you regarding matters relating
to this compliance with applicable federal and state tax laws during the course of this transaction,
and we will also be preparing documents containing covenants with which you must comply in
order to enable us to deliver these opinions.
Also, as noted above, one of our tasks is to give an opinion as to the validity and
enforceability of the bonds under state laws. We will be making inquiries of you during the
course of these transactions regarding steps taken to comply with applicable state laws. We will
also be preparing documents from time to time which assure or demonstrate such compliance
and, in some cases, reviewing documents prepared by you or other parties to the same effect.
Issuers of municipal or other governmental securities must also comply with applicable
federal and state securities laws. For the bond issue, your financial advisor should compile
certain information provided by the City in an Official Statement and prepare certain accounting
materials related thereto. Our Firm normally provides very limited materials for use in the
Official Statement, including a section on federal tax matters, the bond resolution or a summary
of it, the bond sale notice, a remedies section, and our opinion. We do not undertake
responsibility for compiling or reviewing other materials nor are we generally engaged to
conduct due diligence to investigate the accuracy of the materials compiled or provided other
than those we provide. If additional due diligence or securities law compliance work or an
opinion on securities law matters is required on a particular project, our fee will be adjusted
accordingly.
We do, of course, want to remind you that the City, as the issuer of the bonds, does have
certain securities law responsibilities under applicable federal and state laws and should assure
itself that the provisions of all applicable securities laws have been met.
We also want to advise you that an issuer must undertake certain efforts to qualify
securities for sale or to register those securities in certain jurisdictions. We have undertaken no
responsibility for registering or qualifying securities in any state and believe that the competitive
bidder to whom the bonds are awarded or the purchaser of the bonds at negotiated sale will
undertake responsibility for determining when to register or qualify securities sold in any
particular jurisdiction.
We do not and will not represent the Linder Company, the underwriter, or the trustee
with respect to this matter. There may be circumstances where we would represent one or more
of these entities on unrelated matters.
Debra M. Grisham
December 17, 1996
Page 4
We wouM estimate at this time that the fee relating to a typical financing of this nature
would be in the range of $35,000 to $50,000. Because of the complicated nature of this type
of financing, this estimate is higher than our estimate for a comparably sized, straightforward
governmental bond issue. It is possible that we will run into unanticipated difficulties or
complexities which would cause us to take substantially more time than anticipated to complete
a particular financing. We will monitor the time involved in the financing and will let you know
if we begin to exceed the fee range quoted above. In addition, our fee will include charges for
items such as long distance telephone calls, copying expenses, telecopy expense, courier services
and travel expenses incurred in the course of working on this bond issue. Assuming there is no
out-of-state or overnight travel involved in this financing, we do not expect these expenses to
exceed $1,000 to $2,000.
The fee is payable upon completion of each bond issue when we deliver the approving
opinion. If no financing is consummated, our fee for time and expenses incurred to the date of
termination of the financing would be payable at that time. As is typical in municipal finance
matters in such an event, we can work with the City to be compensated from available City
funds or from another financing. If the City does not complete a financing, our fee for advising
the City as to the establishment of an economic development area and a tax increment allocation
area and the adoption of an economic development plan would be in the range of $3,000 to
$5,000. We estimate that expenses would not exceed $300 to $400.
We understand that we will be paid within 30 days of our invoice. We understand that
we will continue as bond counsel on this project until the issuance of bonds, whether or not there
is a change in the City administration. We also understand that should we be replaced as bond
counsel we will be compensated for our fees and charges to the time of replacement at the time
of replacement.
At the closing, we will provide the City and you with a final bond transcript. With
respect to maintenance of documentation subsequent to the closing, our Firm will retain our
correspondence file and a final bond transcript with the originals (or copies thereof) of the
documents that are necessary for closing the bond issue. When the bonds have been retired, we
will destroy the entire file other than our approving opinion. The purpose for advising you of
our internal procedures is to allow you to make an independent determination as to which other
materials or drafts need to be maintained in your files and which may be discarded.
Debra M. Grisham
December 17, 1996
Page 5
If the terms of this engagement letter are acceptable to the City, please have an
authorized representative of the City sign the acceptance below and return it to my attention.
If you have any questions, please feel free to call Karen Arland at (317) 236-2244 or me at the
number listed above. We look forward to working with you.
Very truly yours,
LAE:kla
ICE MILLER DONADIO & RYAN
Lucy A. Emison
cc: Karen Aftand
4424~9.1
On behalf of the City of Carreel, Indiana, the foregoing terms of employment of Ice
Miller Donadio & Ryan, as bond counsel, are hereby approved and acxepted this day of
, 1996.
CITY OF CARMEL, INDIANA
By:
Approved and Accepted this ~#' day of//)t~.~~~'~ ,1996.
CITY OF CARMEL, by and through its
Board of public Works and Safety
ONE CIVIC SQUARE
CARMEL, INDIANA 46032
s Brainard, Mayor
atso~"'
B:dly~'~alker, Mem/~er
AT~
Diana L. Cordray,
December 27, 1996
Lucy A. Emison
Ice Miller Donadio & Ryan
One American Square
Box 82001
Indianapolis, IN 46282-0002
Re: Agreement for Legal Services
Enclosed is a copy of the signed contract approved by the Carmel
Board of Public Works December 18, 1996. Please call if you have
any questions.
Sincerely,
Rebecca L. Wolf
Chief Deputy Clerk
cc: file, city atty
DLC/RLW/rlw