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HomeMy WebLinkAboutAgenda - 11-04-1996 - 8l a 1 Orange County Board of County Commissioners Action Agenda Item No Action Agenda Item Abstract 9- Meeting Date: November 4, 1996 Subject: Appointment of Bond Counsel Department: Finance/Manager/Attorney Attachment(s): Public Hearing: Yes No x Request for Proposals Budget Amendment 10/31/96 Staff/Attorney Memo Needed: Yes No x Information Contact Ken Chavious, ext 2450 Rod Visser, ext 2300 Geof Gledhill, 732-2196 Telephone and Extension Number Hillsborough 732-8181 Chapel Hill 9684501 Durham 688-7331 Mebane 227-2031 Purpose: To consider appointment of new County bond counsel. Background: At the October 15, 1996 meeting, the Board of Commissioners adopted a resolution authorizing the staff and Attorney to prepare and distribute a Request for Proposals (RFP)to various law firms in North Carolina to ascertain their interest in, and qualifications for, serving as the County's bond counsel in the planned Southern Village Elementary School project financing. This RFP was necessitated by the change in emphasis of the practice of the County's current bond counsel, the Brown &Wood law firm of New York. After consultation with staff of the Local Government Commission concerning law firms in the State likely to be qualified to provide bond counsel services, staff distributed the RFP to six firms, five of which responded. Based on staff/attorney evaluation, the Manager recommends that the Board select the Sanford Law Firm to serve as the County's bond counsel for the Southern Village Elementary School financing project. While this appointment is for this specific financing, the Board may, at its option, choose to retain the Sanford Law Firm as bond counsel for future financings, or pursue another RFP process for any such financings. Recommendation(s): The Manager recommends that the Board appoint the Sanford Law Firm to serve as bond counsel for the Southern Village Elementary School project financing. M 2 , S ORANGE COUNTY, NORTH CAROLINA REQUEST FOR PROPOSALS BOND COUNSEL SERVICES SOUTHERN VILLAGE ELEMENTARY SCHOOL FINANCING OCTOBER 21, 1996 DESCRIPTION OF ENGAGEMENT Orange County's adopted Capital Improvements Plan includes construction of a$14 million elementary school in the Southern Village Development in southern Orange County. The school's planned opening is Summer, 1999. The school building and related improvements will be located on a combination of land currently owned by the Chapel Hill-Carrboro Board of Education and by the Town of Chapel Hill. It is anticipated that title to the land upon which the school will be constructed will pass to the County prior to closing, and that security satisfactory to the prospective lender will be made. Orange County wishes to engage a qualified firm to provide all bond counsel services, including providing a tax certificate(s)satisfactory to the County and a tax opinion upon which Orange County and the lender can rely,related to a 160A-20"private placement"financing of this facility. In order to obtain the lowest possible interest cost, Orange County prefers a"split forward"financing approach of$5 million in December 1996 and $9 million sometime in 1997,thus preserving the County's"bank qualification"for both calendar years 1996 and 1997. Orange County's interest is in obtaining the most favorable tax status for this financing, and thus is willing to consider alternatives that bond counsel may suggest to accomplish this purpose. PROPOSAL REQUIREMENTS Proposals must address the following points: 1. Briefly describe the firm's practice in public finance, including information relating to total size and staffing, research capability,professional staff,and support staff. Include biographical information on the individuals who would be directly responsible for the County's work. Do not include information on staff who would not have day-to-day contact with the County's business. 2. Describe any experience your firm has in handling 160A-20 financings,especially involving school construction, distinguishing between private placements and Certificates of Participation(COPS). 3. Describe the firm's capability and experience in Section 103 of the Internal Revenue Code of 1986, as amended, and any other provisions of the Internal Revenue Code applicable to public finance. 4. Describe other areas of the firm's expertise related to government practice from which the firm believes the County may benefit. 5. Identify three(3)capital financing challenges encountered by North Carolina local governmental units, the information about which is not privileged,with which the firm has worked,and describe the solutions to those problems developed by the firm. Provide names and telephone numbers of references from the local governmental units involved. r 3 6. Provide names and telephone numbers of three(3)additional individuals(local government finance officers or attorneys, underwriters,or investment bankers)with whom the firm has worked on local government finance matters, who may also be contacted as references concerning the firm's qualifications and performance. 7. Describe your methodology in calculating fees for services as bond counsel. Provide a range of the costs estimated for your services for the Southern Village Elementary School financing, and an explanation of factors and variables that would influence those costs. 8. Disclose any known or potential conflicts of interest which would or might exist if your firm were to be selected as Orange County bond counsel for this or future financings. 9. State whether the firm,or any public finance issue in which the firm has been involved, is or has been under investigation or subject to proceedings before any court or regulatory agency having jurisdiction over public finance securities. If the answer is affirmative,provide as many details as are not privileged. ADDITIONAL REQUIREMENTS Interested firms must provide three(3)copies of proposals to Ken Chavious,Finance Director, 208 South Cameron Street,PO Box 8181, Hillsborough,NC,27278. All documentation must be received by 5:00pm on Monday,October 28, 1996. Any response to this Request for Proposals will not be privileged and will be public information upon receipt by Orange County. Orange County may elect to interview one or more of the firms responding to this Request for Proposals. If the County does so, interviews will be conducted on Thursday, October 31,between the hours of 9:00am and 12:00pm. The County will notify any responding firms that it wishes to interview. The successful firm should be prepared to provide rapid review and counsel on a Request for Financing Proposals which Orange County will send to prospective lenders during the business week ending November 8, 1996. Although at this time the County contemplates engagement of bond counsel only for this specific financing,the County may, at its option, retain the law firm selected for a longer period to provide traditional bond counsel services on any financings in which the County is the obligor. The County may unilaterally terminate its arrangement with the firm selected at any time,with or without cause. The County is not responsible for any costs incurred by any firm in connection with the preparation of a proposal,nor for any failure or delivery at the time and place required. Orange County will select bond counsel solely within its discretion. The weight which Orange County lends to specific proposal requirements is also solely within its discretion. The County reserves the right to negotiate with any proposer,and to waive any irregularities and informalities in the proposals received. GENERAL INFORMATION County staff and the County Attorney will evaluate all statements of qualification and proposals that are timely received,and provide recommendations to the Orange County Manager. The Manager's recommendation on selection of bond counsel is expected to be presented to the Orange County Board of Commissioners for a decision on Monday,November 4, 1996. For further information concerning this process,contact Finance Director Ken Chavious at(919) 732-8181,ext 2453,or County Attorney Geof Gledhill at(919)732-2196. Y 4 MEMORANDUM FOR: Orange County Board of Commissioners John M. Link, Jr., County Manager FROM: Rod Visser, Assistant County Manager Ken Chavious, Finance Director Geof Gledhill, County Attorney DATE: October 31, 1996 RE: Appointment of Bond Counsel At the October 15 meeting, the Board instructed us to prepare and distribute a Request for Proposals (RFP) for bond counsel services. We prepared the accompanying RFP, and distributed it to six North Carolina law firms that are well-recognized for their public finance work. Five firms responded to the RFP. We feel that each firm prepared a strong response, and that any of the firms would be capable of doing a good job for Orange County on the Southern Village Elementary financing, or any future financings. Two firms provided responses that we all felt were particularly strong, and the attorneys for these firms who would be our principal contacts were interviewed this morning. Our recommendation is that the Board of Commissioners appoint the Sanford Law Firm to act as the County's bond counsel for the Southern Village Elementary School project financing. The Board may wish to retain the Sanford Law Firm in an ongoing relationship for future bond counsel work, but we recommend that the Board make a decision on that point sometime in the future. The Sanford Law Firm attorney who will perform the County's bond counsel work will be Mr. Robert Jessup. We were very favorably impressed by Mr. Jessup's knowledge, experience, and interpersonal skills, and feel he will do an excellent job for Orange County on this financing project. Specifically, some of the factors that permit us to enthusiastically recommend appointment of Mr. Jessup and the Sanford Law Firm are: • Relevant Experience- The firm has extensive experience in installment purchase financing review, to include numerous school financings. The firm has handled either Certificates of Participation (COPs), private placements, or both for school facilities in Sampson, Bladen, Iredell, Richmond, Halifax, Moore, and Brunswick Counties. Moreover, the firm recently served as underwriters'counsel on a"split forward financing"deal for a Moore County school that is very similar to the financing approach we are contemplating for the Southern Village Elementary School. • Creativity-The firm's record, and Mr. Jessup's responses, reveal a strong orientation toward creativity and innovation in finding appropriate solutions to clients'capital financing needs. • Accessibility-The firm will be readily available to consult as needed with us on either the Southern Village project or other financing issues. The firm is prepared to work with us under the extremely tight timeframes we face in bringing about a successful December 1996 closing for partial funding of the Southern Village school. Mr. Jessup is also an Orange County resident, whose response to the RFP uniquely reflected an awareness of the County's recent and planned efforts in school capital financing. 5 • Versatility- Mr. Jessup and his firm present the view that bond attorneys should have extensive expertise in tax law as well. This point is particularly important, as it affords the County greater responsiveness since our principal bond counsel will not have to delay service while awaiting answers from the tax experts in his own, or outside, firms. • Teamwork-It is clear that Mr. Jessup would actively protect Orange County's interests in the role of bond counsel. He has a strong desire to assist with the County's overall capital finance planning, and volunteered his willingness to attend meetings and participate in the planning process, if the County believes that would be helpful in developing long-term capital financing plans • Competitive Fees-The firm has given us a solid quote of$12,000 for the Southern Village Elementary project, if undertaken as we have described it. This fee is very competitive, and in our view, very reasonable based on the level of service we believe we will receive from Mr. Jessup and the Sanford Law Firm. We also note that Mr. Jessup and the Sanford Law Firm enjoy an excellent reputation for bond counsel services in North Carolina, and have no known or anticipated conflicts of interest should the firm be appointed as Orange County's bond counsel. Please let any one of us know if you would like to discuss or review the complete proposal of either the Sanford Law Firm, or any of the other responding law firms, prior to Monday night's meeting.