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HomeMy WebLinkAboutRESOLUTION - 33-03 - 4/22/2003 - ENGAGEMENT LETTER/CHAPMAN & CUTLERRESOLUTION NO. 33-03 A RESOLUTION APPROVING AN ENGAGEMENT LETTER BETWEEN CHAPMAN AND CUTLER AND THE VILLAGE OF ELK GROVE VILLAGE AND AUTHORIZING THE ACCEPTANCE OF SAID LETTER BY SIGNATURE OF THE VILLAGE MANAGER WHEREAS, the Village of Elk Grove Village has previously approved the Devon/Rohlwing Redevelopment Plan, designation of the Devon Redevelopment Project Area and the adoption of tax increment allocation financing for the redevelopment project area for property located at the intersection of Devon Avenue and Rohlwing Road in the Village of Elk Grove Village; and WHEREAS, in accordance with the redevelopment agreement it is necessary for the Village to engage Bond Counsel for the purpose of representing the Village with all relevant Illinois statutory and constitutional provisions with respect to the issuance of tax increment revenue notes to be issued by the Village of Elk Grove Village; and WHEREAS, the law firm of Chapman and Cutler has presented an engagement letter to the Village for the purpose of the Village engaging them as Bond Counsel for the above -stated purposes. NOW, THEREFORE BE IT RESOLVED by the Mayor and Board of Trustees of the Village of Elk Grove Village, Counties of Cook and DuPage, Illinois as follows: Section 1: That the engagement letter dated April 21, 2003 submitted by the law firm of Chapman and Cutler to Ms. Mary Riordan, a special attorney for the Village, be and the same is hereby approved and the Village Manager is hereby authorized to execute and accept said engagement letter on behalf of the Village. Section 2: That this Resolution shall be in full force and effect from and after its passage and approval according to law. VOTE. AYES:6 NAYS:0 ABSENT.0 PASSED this 22nd day of April 2003. APPROVED this 22nd day of April 2003. ATTEST. Ann h Walsh Village Cleric Resrohlwing.doc 2 APPROVED: Craig B. Johnson, Mayor Theodore S. Chapman 1877-1943 Henry E. Cutler 1879-1959 Patricia M. Curtner 312-8453815 312-516-1815 Fax curtnet®chapmamcom VIA MESSENGER Law Offices of CHAPMAN AND CUTLER 111 West Monroe Street, Chicago, Illinois 60603-4080 Telephone (312) 8453000 Facsimile (312) 701-2361 chapman.com Ms. Mary Riordan 980 North Michigan Avenue Suite 950 Chicago, Illinois 60611 April 21, 2003 Re: Village of Elk Grove Village, Cook and DuPage Counties, Illinois Tax Increment Revenue Note (Devon/Rohlwing Project), Series 2003 Dear Mary: Salt Lake City 50 South Main Street Salt Lake City, Utah 84144 (801)533-0066 We are pleased to provide an engagement letter for our services as bond counsel for the captioned transaction. You have advised us that the Village expects to issue a "drawdown" tax increment revenue note (the "2003 Note") to pay or reimburse certain redevelopment project costs in the Devon/Rohlwing Redevelopment Project Area (the "Redevelopment Project Area ") heretofore designated by the Village (the "2003 Capital Project") and costs of issuing the 2003 Note and that we are to be retained for the purpose of rendering our customary approving legal opinion. I. DESCRIPTION OF SERVICES As Bond Counsel, we will work with the Village and any parties who may become participants in the financing, including designated Village officers and employees, general counsel to the Village, the purchasers of the 2003 Note and other parties to the transaction and to provide the following services as necessary: 1. Review the proposed timetable and consult with the other parties to the transaction as necessary in order to implement the financing in accordance with that timetable. 2. Review all relevant Illinois statutory and constitutional provisions, including all pending legislation and any other recent developments, relating to the issuance of the 2003 Note. 3. Obtain detailed information about the proposed issue and review the nature of use of and the private and public ownership of the 2003 Capital Project. 1496601.01.02 Law Offire. of CHAPMAN AND CUTLER 4. Consider the issues arising under the Internal Revenue Code of 1986, as amended (the "Code"), and all applicable tax regulations relating to the issuance of the 2003 Note on a tax-exempt basis in view of the proposed use of the 2003 Capital Project and prepare all necessary tax compliance documents. S. Prepare or review major transaction documents, including tax compliance certificates, review the purchase agreement, if applicable, and draft descriptions of the documents which we have drafted as necessary. As Bond Counsel, upon request, we will assist the Village in reviewing (only) those sections of the redevelopment agreement relating to the 2003 Capital Project and any official statement or any other disclosure document to be disseminated in connection with the sale of the 2003 Note involving the description of the 2003 Note, the security for the 2003 Note, and matters pertaining to tax exemption. 6. Prepare or review all pertinent proceedings to be considered by the President and Board of Trustees of the Village; confirm the necessary quorum, meeting and notice requirements, and draft pertinent excerpts of minutes of the meetings relating to the financing; and supervise the filing of all necessary state and/or federal reporting or notice requirements for the 2003 Note. 7. Prepare, revise as necessary and coordinate the distribution and execution of necessary closing documents and the 2003 Note, opinions and document transcripts. 8. Attend or host such drafting sessions and other conferences necessary to implement the financing, including the preclosing, if needed, and closing. 9. Render our customary approving legal opinion regarding the validity of the 2003 Note, the sources of payment therefor and the federal income tax treatment of interest thereon (the "Note Opinion"), which opinion will be delivered by us in written form on the date the 2003 Note is deemed issued (the "Closing"). The Note Opinion will be based on facts and law existing as of its date. In rendering the Note Opinion, we will rely upon the certified proceedings and other certifications of Village officials and other persons furnished to us. We are not engaged and will not provide services intended to verify the truth or accuracy of these proceedings or certifications. We understand that you and necessary members of the Village staff and other employees of and consultants to the Village will cooperate with us in this regard. Please note that our opinion represents our legal judgment based upon our review of the law and the facts so supplied to us that we deem relevant and is not a guarantee of result. II. LIMITATIONS Our duties as Bond Counsel are limited to those expressly set forth above in this letter. Among other things, our duties do not include: Law oRim, of CHAPMAN AND CUTLER 1. Except as described in Paragraph 5 above, assisting in the preparation or review of any redevelopment agreement, an official statement or any other disclosure document with respect to the 2003 Note, or performing an independent investigation to determine the accuracy, completeness or sufficiency of any such document or rendering any advice, view or comfort that any redevelopment agreement, the official statement or other disclosure document does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading; 2. Preparing requests for tax rulings from the Internal Revenue Service (the "Service "); 3. Preparing blue sky or investment surveys with respect to the 2003 Note; 4. Drafting state legislative amendments; 5. Pursuing test cases or other litigation; 6. Making an investigation or expressing any view as to the creditworthiness of the Village, the 2003 Capital Project or of the 2003 Note; 7. Opining on a continuing disclosure undertaking pertaining to the 2003 Note and, after the execution and delivery of the 2003 Note, providing advice concerning any actions necessary to assure compliance with any continuing disclosure undertaking; 8. Responding to Service audits or Securities and Exchange Village investigations; 9. After Closing, providing continuing advice to the Village or any other party concerning any actions necessary to assure that interest paid on the 2003 Note will continue to be excluded from gross income for federal income tax purposes, e.g., we will not undertake rebate calculations for the 2003 Note without a separate engagement for that purpose; 10. Providing any advice, opinion or representation as to the financial feasibility or the fiscal prudence of issuing the 2003 Note or to any other aspect of the financing, such as the investment of proceeds of the 2003 Note or the use of the 2003 Capital Project. 11. Any other matter not specifically set forth above that is not required to render the Note Opinion. The Note Opinion represents our legal judgment based upon our review of the law and the facts that we deem relevant to render such opinion. The Service has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Service, interest on such L. orr e, or CHAPMAN AND CUTLER tax-exempt obligations is includible in the gross income of the owners thereof for federal income tax purposes. No assurances can be given as to whether or not the Service will commence an audit of the 2003 Note, or as to whether the Service would agree with the Note Opinion. If an audit is commenced, the Service will treat the Village as the taxpayer, and the holders of the 2003 Note may have no right to participate in such procedure. As Bond Counsel we are neither obligated to defend the tax-exempt status of the 2003 Note nor responsible to pay or reimburse the costs of the Village or the holders of the 2003 Note with respect to any audit or litigation relating to the 2003 Note. HI. ATTORNEY-CLIENT RELATIONSHIP Upon execution of this engagement letter the Village will be our client, and an attorney- client relationship will exist between us. However, our services as Bond Counsel are limited to those as set forth in this engagement letter, and the Village's execution of this engagement letter will constitute an acknowledgment of those limitations. We will not act as an intermediary among the parties to the transaction. This engagement letter will also serve to give express written notice to the Village that (a) from time to time we represent in a variety of capacities and/or consult with most underwriters, investment bankers, financial advisors and other persons active in Illinois public finance on a wide range of issues, (b) we act as general counsel to the Harris Trust & Savings Bank (the "Bank"), and (c) prior to the Village's execution of this engagement letter, we have consulted with you and may have consulted with a number of such firms regarding the 2003 Note. Neither our representation of the Village nor such additional relationships or prior consultations will affect, however, our responsibility to render an objective bond counsel Note Opinion. By executing this letter the Village will have consented to our representation of the Bank and will be deemed to have waived any conflict of interest claims you may have arising from our relationship with the Bank. We assume that the Village will have you as its counsel available as needed to provide advocacy in the transaction and that all other parties to the transaction will retain such counsel as they deem necessary and appropriate to represent their interests. Our representation of the Village and the attorney-client relationship created by this engagement letter will be concluded upon the issuance of the 2003 Note. Nevertheless, subsequent to the Closing, we will prepare and provide a transcript of proceedings pertaining to the 2003 Note and, at your direction or request, make certain that a Federal Information Reporting Form 8038-G is filed for the 2003 Note. IV. FEES As is customary, we will bill our fees as Bond Counsel on a transactional basis instead of hourly. Disbursements are typically itemized and billed separately. Factors which affect our L.w Offices of CHAPMAN AND CUTLER billing include: (a) our estimate of the risk involved in our writing our normal "unqualified" approving Note Opinion (risk is related to the size, complexity and tax questions in the transaction); (b) an estimate of the time necessary to do the work; (c) the complexity of the issue (number of parties, timetable, type of financing and so forth); (d) recognition of the partially contingent nature of our fee, since it is customarily the case that if no financing is ever completed, we render a reduced statement of charges (the amount of reduction depends upon a number of factors, including the point at which the financing is cancelled and the amount of work and disbursements to the date we are notified that the issue will not go forward); and (e) a recognition that we carry the time for services rendered on our books until a financing is completed, rather than billing monthly or quarterly. Based upon our understanding that (i) the principal amount of the 2003 Note will be approximately $4,500,000, (ii) that the proceeds of the 2003 Note will be used to pay or reimburse costs of the 2003 Capital Project and related costs of issuance, (iii) that the 2003 Note will be issued as a tax-exempt drawdown note secured solely and only by a portion of the incremental property taxes, if any, to be derived from the Redevelopment Project Area and (iv) that the 2003 Note will be deemed issued on the first date on which its aggregate principal amount equals or exceeds $50,000, we expect our aggregate fees as Bond Counsel to be $35,000. If, at any time, we believe that circumstances require an adjustment of our original fee estimate, we will consult with you and prepare an amendment to this engagement letter. You have advised us that the Village anticipates delivering the executed but unissued 2003 Note to the purchaser thereof, pending that purchaser's performance of certain conditions precedent to the issuance of the 2003 Note. Accordingly we will provide a preliminary Note Opinion and will present an interim statement of charges in the amount of $15,000 upon the delivery prior to issuance of the 2003 Note; upon the actual issuance of the 2003 Note and our rendering the Note Opinion, we will present a statement for the balance of our fee. We may submit a statement for charges following the Closing. If, for any reason, the financing is not consummated or is completed without the rendition of our Note Opinion as bond counsel, or our services are otherwise terminated, we will expect to be compensated at our normal hourly rates and for client disbursements actually incurred after submission of our interim statement and to the date of termination. The undersigned will act as your primary contact for this issue, with assistance as needed from other members of our bond and tax departments. V. RECORDS After Closing we will prepare and send to all parties in CD -Rom format what we have assembled as the financing transcript. In addition, at the Village's request, to be made at or prior to Closing, any other papers and property provided by the Village will be promptly returned to the Village upon receipt of payment for our outstanding fees and client disbursements. All other materials shall thereupon constitute our own files and property, and these materials, including Law Offices of CHAPMAN AND CUTLER lawyer work product pertaining to the transaction, will be retained or discarded by us at our sole discretion. If the foregoing terms are acceptable, please have the Village so indicate by returning the enclosed copy of this engagement letter and dated and signed by an authorized officer, retaining the originals for your files. I look forward to working with you and the Village and to a successful transaction. Very truly yours, CHAPMAN AND CUTLER By Patricia M. Curtner PMC:ae Accepted and Approved: VILLAGE OF ELK GROVE VILLAGE, COOK AND DUPAGE COUNTIES, ILLINOIS By: Craig B. Johnson Title: Mayor Date: April 22 , 2003