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URA Res. No. 2007-02AVON URBAN RENEWAL AUTHORITY RESOLUTION NO. 07-02 SERIES OF 2007 A RESOLUTION TO APPOINT CERTAIN OFFICERS AND AGENTS OF THE AUTHORITY A RESOLUTION APPOINTING SHERMAN & HOWARD L.L.C. AS GENERAL COUNSEL TO THE AUTHORITY AND APPOINTING STAN BERNSTEIN AND ASSOCIATES, INC. AS FINANCIAL CONSULTANT TO THE AUTHORITY. WHEREAS, the Avon Urban Renewal Authority (the "Authority") is a duly organized body corporate and politic under and by virtue of the laws of the State of Colorado including the Urban Renewal Law, constituting Part 1 of Article 25 of Title 31, Colorado Revised Statutes ("C.R.S."); and WHEREAS, the Board of Commissioners of the Authority (the "Board") is authorized by Section 31-25-104(2)(c), C.R.S., and the bylaws of the Authority (the "Bylaws") to retain attorneys, advisors, experts and other agents and consultants and to delegate to one or more of its agents or employees such duties as it deems proper; and WHEREAS, there are on file with the Secretary of the Authority the forms of. (l) an engagement letter addressed to the Authority from Sherman & Howard L.L.C. relating to its proposed legal representation of the Authority (the "Sherman & Howard Engagement Letter"), a copy of which is attached as Exhibit A; and (2) an engagement letter addressed to the Authority from Stan Bernstein and Associates, Inc. relating to its proposed affiliation with the Authority as financial consultant (the "Stan Bernstein Engagement Letter"), a copy of which is attached as Exhibit B. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE AVON URBAN RENEWAL AUTHORITY: 1. The Board hereby accepts and approves the Sherman & Howard Engagement Letter as submitted by Sherman & Howard L.L.C., and Sherman & Howard L.L.C. shall serve as General Counsel to the Authority upon the terms, conditions, and provisions as set forth in the Sherman & Howard Engagement Letter. 2. The Board hereby accepts and approves the Stan Bernstein Engagement Letter as submitted by Stan Bernstein and Associates, Inc., and Stan Bernstein and Associates, Inc. shall serve as financial consultant to the Authority upon the terms, conditions, and provisions as set forth in the Stan Bernstein Engagement Letter. [REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK] ADOPTED this 28th day of August, 2007. 8~j O~ ATTEST: . 4" c Pat f-~ Kenn , Aut ority Clerk AVON URBAN RENEWAL AUTHORITY ",c CG Ronald C. Wolfe, CERTIFIED BY: STATE OF COLORADO ) COUNTY OF EAGLE ) SS. AVON URBAN RENEWAL AUTHORITY ) I, Patty McKenny, the duly qualified and acting Town Clerk of the Town of Avon, Colorado (the "Town"), acting as the Authority Clerk of the Avon Urban Renewal Authority (the "Authority") do hereby certify: 1. That the foregoing pages are a true, correct, and complete copy of a resolution (the "Resolution") concerning the appointment of certain Authority agents, adopted by the Board of Commissioners (the "Board") of the Authority, at a regular meeting of the Board held at the Town Municipal Building on August 28, 2007. 2. The Resolution was adopted at an open, regular meeting of the Board on Tuesday, August 28, 2007 by an affirmative vote of the members of the Board as follows: Name "Yes" "No" Absent Ronald Wolfe Brian Sipes ✓ Richard Carroll Dave Dantas Kristi Ferraro ✓ Amy Phillips Tamra Nottingham Underwood ✓ 3. The Resolution has been signed by the Chairman of the Board, sealed with the corporate seal of the Authority, attested by the Secretary, certified by me as Authority Clerk, and duly recorded in the books of the Authority; and that the same remains of record in the book of records of the Authority. 4. Notice of the regular meeting of August 28, 2007, in the form attached hereto as Exhibit I, was posted in a public place within the boundaries of the Authority no less than twenty-four hours prior to such meeting. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of said Authority this day of August, 2007. a.tl C - Authority erk EXHIBIT 1 (Attach Notice of Meeting) EXHIBIT A Sherman & Howard Engagement Letter A-1 Sherman & Howard L.L.C. Randy D. Funk Direct Dial Number: (303) 299-8046 E-mail: rfunk(a_,)sah.com ATTORNEYS & COUNSELORS AT LAW 633 SEVENTEENTH STREEKSUITE 3000 DENVER, COLORADO 80202 TELEPHONE: 303 297.2900 FAX: 303 298-0940 OFFICES IN: COLORADO SPRINGS RENO • LAS VEGAS • PHOENIX August 28, 2007 Mr. Ronald C. Wolfe Chairman of the Board of Commissioners Avon Urban Renewal Authority P.O. Box 975 Avon, Colorado, 81620 Dear Chairman Wolfe: This letter is to confirm our engagement as counsel to the Avon Urban Renewal Authority (the "Authority"). We have completed our engagement with the Town of Avon to create the Authority as set forth in our letter dated September 6, 2006, and we look forward to representing the Authority. We appreciate the Authority's confidence in us and will do our best to continue to merit it. In establishing the attorney-client relationship, we believe that it is good practice to set forth in some detail and in writing the elements of our mutual understanding as to the scope of our representation and the terms of our employment. While some (perhaps most) of the matters covered in this letter will never be relevant or of concern between us, we hope you will understand that, as attorneys and counsellors, it is our natural function to try to make communication clear and complete, and to anticipate and resolve questions before they arise. Also, we believe that since performance of our services may require our joint effort and cooperation, the better our mutual understanding of our respective roles, responsibilities and contributions, the more efficient, effective and economical our work for the Authority can be. Scope of Employment We understand our employment will include those matters requested by you, the Executive Director of the Authority, the Treasurer of the Authority, or the Board of Commissioners of the Authority and will likely include providing the Authority legal advice and assistance in a variety of areas including, but not limited to the organization of the Authority; the approval and implementation of urban renewal plans, the planning of Authority financing projects. Authority is Client We understand that the Authority, rather than any individual Commissioner or employee, is our client. We expect that most of our contacts with the Authority will be through the Authority's staff, and we will generally rely upon the Authority's staff to keep the Board of Commissioners informed about the advice and other legal services we provide. However, since Sherman & Howard L.L.C. Avon Urban Renewal Authority August 28, 2007 Page 2 the ultimate responsibility for the management of the Authority is vested in the Board of Commissioners, there may be occasions when we will deem it advisable to communicate directly with the Board of Commissioners. Conflicts of Interest Before accepting any new business, the Colorado Rules of Professional Conduct (the "Rules") require us to evaluate whether there exist any ethical constraints to representing the Authority. As you are aware, our firm currently represents the Town of Avon (the "Town") in a variety of matters While the Authority and the Town cooperate in many material respects, they are separate entities and could possibly have interests that are adverse to one another. We do not believe that our current or prospective engagements as counsel to the Town will materially limit or adversely affect our ability to represent the Authority because the potential for adversity between the Town and the Authority is remote and minor. In reviewing our current and potential future representation of the parties discussed above, we have considered: whether we can represent each client with undivided loyalty; whether we can protect the confidentiality of each client; the duration and extent of our engagement with the parties; the likelihood that a conflict will eventuate, possibly requiring our withdrawal from the representation; and should any conflict arise, any prejudice to each client which might result therefrom. Consent Requested. Pursuant to the matters discussed herein, we will treat your execution of this letter as consent to our current representation of the Town. Your execution of this letter will also signify the Authority's consent to our prospective representation of the Town while we are representing the Authority hereunder. If at any time a question should arise about an adverse representation, please do not hesitate to contact us. Supervision and Delegation I will be the attorney who will coordinate and oversee the services we perform on the Authority's behalf. We routinely delegate selected responsibilities to other persons in our firm when, because of special experience, time availability or other reasons, they are in a better position to carry them out. In addition, we will try, where feasible, to delegate tasks to persons who can properly perform them at the least cost to the Authority. Financial Arrangements I am enclosing a Memorandum about Financial Arrangements, which outlines the financial terms of our engagement. Please read the memorandum carefully. If anything in the financial arrangements presents a problem, or is unclear, please advise me promptly so that we may discuss it and reach a full understanding. Sherman & Howard's rates for the work by its attorneys and legal assistants vary based on the experience and expertise of the individuals involved. Typically, we adjust these rates at the beginning of a calendar year to reflect changing economic conditions. Colorado's ethics rules governing attorneys require that the basis or rate of legal fees be communicated to the client Sherman & Howard L.L.C. Avon Urban Renewal Authority August 28, 2007 Page 3 in writing. Accordingly, set out below are the firm's current billing rates for the attorneys and legal assistants who will be working with the Authority. We are sensitive to the Authority's budgetary constraints and for certain matters as mutually agreed we will provide some discount from these fees. Generally, when our fees are able to be reimbursed from a third-party or paid from a financing transaction, we will charge our standard rates. For other matters when such recovery is not likely, we will discount our rates by 10%. We will always strive to use the most cost-effective means to accomplish the Authority's objectives. If you have any questions about the fees being charged for your representation, please contact me. Attorney/ Hourly Effective Leeal Assistant Rate Date Randy D. Funk $350.00 December 17, 2006 Matthew O. Gray $190.00 December 17, 2006 Public Contract for Services - Compliance with § 8-17.5-101 C.R.S. In connection with our engagement with the Authority, Sherman & Howard L.L.C. qualifies as a "contractor" pursuant to § 8-17.5-101(2), C.R.S. and we hereby certify that, as of the date hereof. (i) we do not knowingly employ or contract with an illegal alien, and (ii) we have participated in the Basic Pilot Program (as defined in § 8-17.5-101(1), C.R.S.) in order to confirm the employment eligibility of all employees who are newly hired for employment in the United States. In compliance with Section § 8-17.5-102(2), C.R.S., the provisions set forth in Exhibit A to this engagement letter are incorporated herein and made a part hereof. We are pleased to have the Authority as a client, and look forward to a mutually satisfactory and beneficial relationship. Our effectiveness and the Authority's best interest are enhanced by an atmosphere of candor and confidence between us, not only as to the facts and circumstances of the legal issues on which we are working, but also as to the client-attorney relationship itself. We hope you will not hesitate to discuss with us any question or concern you might have about either. Sincerely, Randy D. Funk Sherman & Howard L.L.C. Avon Urban Renewal Authority August 28, 2007 Page 4 Accepted and Approved: AVON URBAN RENEWAL AUTHORITY By: Mr. Ronald C. Wolfe Its: Chairman Date: RDF/rh Enclosure Sherman & Howard L.L.C. Exhibit A A. Sherman & Howard L.L.C. shall not: (I) knowingly employ or contract with an illegal alien to perform work described in this engagement letter under Scope of Employment (the "Legal Services") or (II) enter into a contract with a subcontractor that fails to certify to Sherman & Howard L.L.C. that the subcontractor shall not knowingly employ or contract with an illegal alien to perform the Legal Services. B. Sherman & Howard L.L.C.: (I) has confirmed or attempted to confirm the employment eligibility of all employees who are newly hired for employment in the United States through participation in the Basic Pilot Program; (II) shall not use Basic Pilot Program procedures to undertake preemployment screening of job applicants while performing Legal Services; (III) shall be required (only if Sherman & Howard L.L.C. obtains actual knowledge that a subcontractor performing Legal Services knowingly employs or contracts with an illegal alien): (a) to notify the subcontractor and the Authority within three days that Sherman & Howard L.L.C. has actual knowledge that the subcontractor is employing or contracting with an illegal alien; and (b) terminate the subcontract with the subcontractor if within three days of receiving the notice required pursuant to subparagraph (a) of this subparagraph (III) the subcontractor does not stop employing or contracting with the illegal alien; except that Sherman & Howard L.L.C. shall not terminate the contract with the subcontractor if during such three days the subcontractor provides information to establish that the subcontractor has not knowingly employed or contracted with an illegal alien; and (IV) shall comply with any reasonable request by the Department of Labor and Employment made in the course of an investigation that such department is undertaking pursuant to § 8-17.5-102(5) C.R.S. Sherman & Howard L.L.C. MEMORANDUM ABOUT FIRM POLICIES 1. FINANCIAL ARRANGEMENTS I . Periodic Billines for Legal Services. Unless we have reached a different agreement in a specific matter, the firm submits statements for legal services monthly. These are generally mailed toward the middle of the month following the latest date covered in the statement. In retaining Sherman & Howard, you agree to pay our statements upon presentation. If you do not pay statements within 30 days after receipt, the firm may, at its option, charge a late fee at the rate of 12% per annum on the balance due. 2. Determining the Fee. This firm has offices in Colorado, Nevada and Arizona. In fixing fees for services, our lawyers are bound by the rules of professional conduct established by the Supreme Courts of those states. These rules list a number of factors to be considered in establishing a fee. These include: time spent; reputation; the skill and experience required to complete the services properly; the extent to which the acceptance of the particular matter will preclude other employment; the amount involved; the results obtained; the time limitations imposed by the client or by the circumstances; the nature and length of the professional relationship with the client; and whether the fee is fixed or contingent. Generally, the firm fixes the fees for its services based primarily on hourly rates for the lawyers or paralegals performing the services. These rates reflect the experience and expertise of the individuals involved. At the present time, hourly rates for Members and Counsel range from $310 to $425; rates for Associates range from $190 to $290; and rates for Paralegals range from $100 to $135. We adjust hourly rates from time to time, generally at year end. We will use the modified rates in setting fees for work performed after such adjustments. Circumstances, including those set out above, may require departure from the application of hourly rates. When expressly agreed in writing, fees may be fixed on some other basis. 3. Retainers. With new clients or with substantial new matters for existing clients, the firm may require the client to pay a retainer. A retainer is in the nature of a deposit, held by the firm for the protection of its investment of time and effort. With a retainer, we still bill for services on a periodic basis. Ordinarily, we will apply the retainer against fees and expenses billed on our periodic statements, but you agree to pay the full amount of those statements as submitted. This will keep the retainer at the agreed amount through the course of the representation. At the time of the final billing, we will apply the retainer against the balance due and return any excess. 4. Paralegals. Certain work may be done by paralegals or legal assistants. Such persons, although not lawyers, have undergone training to perform certain services that would otherwise need to be performed by lawyers. That work is supervised by lawyers. The use of paralegals allows us to deliver legal services to you at a lower cost. 5. Contract Personnel. On occasion, when the nature of a specific engagement or personnel needs require, we may use contract lawyers or paralegals to assist on a specific project. Ordinarily, we bill for their services based on experience and expertise of the individuals on the same basis as for "regular" lawyers and paralegals. Sherman & Howard L.L.C. 6. Client Disbursements. Most matters require the firm to incur certain expenses on your behalf. Some of these reflect payments to third parties while others represent internal costs incurred to provide services. These expenses include items such as fees for court filings, delivery and copying charges, travel expenses, computer assisted research and a variety of others. In retaining the firm, you agree that we have the authority to use our judgment in making such expenditures on your behalf and that you will pay such amounts as billed on our periodic statements. We will do our best to minimize these costs and generally will seek your approval before incurring significant items of expense. If the nature of the matter is such that we anticipate substantial advances, we may require a separate deposit for such purpose. We also may request that substantial individual items such as expert witness fees, the costs of deposition transcripts and major printing costs be billed directly to you by the vendor. You agree to pay such items as billed by the vendors. II. DOCUMENT RETENTION POLICY Sherman & Howard has adopted a policy for client file retention to comply with applicable legal ethics rules. Under that policy, at the conclusion of our representation of a client in a matter, a responsible firm attorney will direct a review of the file to determine which materials should be retained because of pending proceedings or as a record of the representation and which are no longer needed. Ordinarily, we will retain for several years such materials as correspondence, final substantive work product, documents obtained from the client, and documents obtained from third parties. We may not retain such materials as duplicates of the above-described material, or drafts and notes. Duplicates, drafts and notes are generally no longer needed by the client or by the firm after the conclusion of the representation. As to the client file materials that we retain, ordinarily the firm will keep files for Business, Real Estate, Litigation and Employment Law matters for seven years, Tax and Estate Plan matters for ten years and Public Finance matters for seven years after the final maturity of the bonds. At the end of that time, unless a client has advised us in writing to the contrary, we will destroy the bulk of the file. We would not destroy original legal documents such as corporate records, employee benefit plans, deeds or contracts, if these original documents are in our file. Nor will we destroy originals or copies of wills, estate plans, or trusts. Ordinarily, we will return those to the client. If the file is especially voluminous, we may return the client documents to the client sooner than the end of this period as our storage facilities are limited. If a client wishes to make other arrangements for retention or disposition of files, the client should advise the firm in writing. Whatever alternative arrangements are agreed to should be put in writing so both client and the firm are clear on their obligations. If at any time the client's files become subject to legal or administrative process or become relevant to pending or threatened litigation, the client should also advise us of that promptly, so the firm can take appropriate steps to preserve those files. At the conclusion of a representation, even if the client directs the firm to return files from the representation, the firm always reserves the right to retain a copy of the client files. 2 BUS RE11406721.1 EXHIBIT B Stan Bernstein Engagement Letter B-1 Stan Bernstein and Associates, Inc. Financial Planners and Consultants For Local Governments, Municipal Bond Underwriters, and Real Estate Developers 8400 East Prentice Ave., Penthouse Greenwood Village, Colorado 80111 Telephone: 303-409-7611; Fax: 303-409-7612; Email: stanplan@earthlink.net August 21, 2007 Town of Avon Urban Renewal Authority c/o Mr. Scott Wright, CPA, CPFO Asst. Town Manager - Finance Town of Avon, Colorado RE: ENGAGEMENT LETTER FOR PROFESSIONAL FINANCIAL PLANNING SERVICES FOR TOWN OF AVON URBAN RENEWAL AUTHORITY Dear Scott: Please accept this engagement letter as my firm's intent to continue providing professional financial planning and modeling services for the Town of Avon Urban Renewal Authority (the "URA"). We are excited about the Urban Renewal plans for the Town of Avon and are pleased to continue to work in a financial planning capacity. I anticipate that we will continue to provide financial planning and modeling services in conjunction with the URA's proposed issuance of its Property Tax Increment Revenue Bonds which presumably will be issued during 2008. We anticipate revising our property tax increment revenue projections (based upon updated information we will receive from Eagle County and from various real estate developers located within the boundaries of the URA); working with you, Larry, Leland Consulting, David Bell (the URA's investment banker), various URA Revenue Bond investors, and the various attorneys who will be involved with the issuance of the URA Revenue Bonds. Our Fee structure for basic financial modeling will be offered to the URA at our discounted municipal rate of $140 per hour for myself,, and $120 per hour for my associate Amy Bernstein. In addition, it is our firm's policy that if our work product becomes a part of the official statement (or any other type of offering document) that is used in conjunction with the marketing of URA Revenue Bonds we charge an additional fee of 0.075% of the par amount of the bond issue ( which for a $21 million bond issue would be $15,750 and compensates us for our additional risk and exposure) - this fee would be paid from the proceeds of the bond issue. Mr. Scott Wright August 21, 2007 Page ii If you are in agreement with the terms of this engagement letter please indicate so by signing below and returning a copy of this letter to my office. If you have any questions or comments regarding this engagement letter do not hesitate to contact me and I will be happy to make revisions, etc. Very truly yours, Stan Bernstein and Associates, Inc. Signed: Avon Urban Renewal Authority, Ronald Wolfe, Chairman Memo To: Board Chairman and Commissioners Thru: Larry Brooks, Executive Director From: Scott Wright, TreasurerQ,- Date: August 23, 2007 Re: AURA Resolution No. 07-02 Appointment of Certain Officers and Agents of the Authority Summary: The attached resolution approves the appointment of Sherman and Howard as general counsel to the Authority, and Stan Bernstein & Associates as financial consultant to the Authority. The respective engagement letters from each firm sets forth the scope of their engagement, hourly rates and other matters. Financial Implications: The attached engagement letters set forth billing rates for services provided. In addition, Stan Bernstein & Associates includes a fee of 7 '/2 basis points of the par value of the bond issue for including their work product in the official statement or associated offering documents. This fee would be paid for from bond proceeds. Recommendation: Staff recommends that the Board approve Resolution No. 07-02, a resolution appointing Sherman and Howard LLC as general counsel to the Authority and appointing Stan Bernstein & Associates, Inc. as financial consultant to the Authority. Executive Director Comments: Page 1 Attachments: A -AURA Resolution No. 07-02 B - Exhibit A - Sherman and Howard Engagement Letter C - Exhibit B - Stan Bernstein & Associates Engagement Letter 0 Page 2 AVON URBAN RENEWAL AUTHORITY TUESDAY, AUGUST 28, 2007 AVON MUNICIPAL BUILDING, 400 BENCHMARK ROAD AUTHORITY AGENDA MEETING BEGINS AT 4 PM 1. CONVENE MEETING 2. APPROVAL OF AGENDA 3. NEW BUSINESS a. Avon Urban Renewal Authority Overview & Board Orientation (Anne Ricker, Leland Consulting) Review of Authority powers and functions, responsibilities of commissioners and other general issues b. Depfa Bank Term Letter and Presentation of Proposed Timetable & Terms for issuing Tax Increment Revenues Bonds (David Bell, Stifel Nicolaus) Review details of Tax increment financing 4. RESOLUTIONS a. Resolution No. 07-01, Series of 2007, A Resolution to approve the Bylaws of the Avon Urban Renewal Authority (Scott Wright, Asst. Town Manager Finance, Randy Funk, Sherman & Howard) Attached are the proposed bylaws of the Avon Renewal Authority which set forth terms and requirements to effectuate certain provisions of Colorado State Statutes and Urban Renewal Law b. Resolution No. 07-02, Series of 2007, A Resolution to appoint certain officers and agents of the authority, A Resolution appointing Sherman & Howard L.L.C. as General Counsel to the Authority and appointing Stan Bernstein and Associates, Inc. as financial consultant to the Authority (Scott Wright, Asst. Town Manager Finance, Randy Funk, Sherman & Howard) The respective engagement letters from each firm set forth the scope of their engagement, hourly rates and other matters c. Resolution No. 07-03, Series of 2007, A Resolution to approve a Cooperation Agreement between the Town of Avon, Colorado and the Avon Urban Renewal Authority (Scott Wright, Asst. Town Manager Finance, Randy Funk, Sherman & Howard) The cooperation agreement between the Avon Urban Renewal Authority and the Town of Avon sets forth several key financial and operating policies regarding the two entities Resolution No. 07-04, Series of 2007, A Resolution to designate a public place within the boundaries of the Authority where notices of meetings of the Authority's Board of Commissioners shall be posted (Scott Wright, Asst. Town Manager Finance, Randy Funk, Sherman & Howard) This resolution designates the public places whereby meeting notices will be posted during 2007; adopted annually at the first regularly scheduled Authority meeting of each calendar year 5. ADJOURNMENT AT 5:15 PM Avon Council Meeting. 07.08.28 Page 2 of 4