HomeMy WebLinkAboutPR 14720: EDC - VINSON & ELKINS BOND COUNSEL SERVICES1Vlemo~andum
City of Port Arthur, Texas
Finance Department
To: Steve Fitzgibbons; Citv Manager
From: Rebecca Underhill; Director of Fin~~E,~'
Date: May 9, 2008
' Subject: Proposed Resolution 14720
RECOMMENDATION
PR 14720 authorizes the PAEDC Chief Executive Officer to execute an agreement for bond counsel
services with Vinson & Elkins, L.L.P.
BACKGROUND
Vinson and Elkins has served as bond counsel to the PAEDC in the past. This contract will be considered
by the EDC Board at their May 21, 2008 meeting.
Cc: ,Floyd Batiste
Guy Goodso^
P. R. NO. 14720
jja: 5/9/08
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE PORT ARTHUR
SECTION 4A ECONOMIC DEVELOPMENT CORPORATION
TO EXECUTE AN ENGAGEMENT LETTER WITH VINSON
& ELHINS, L.L.P.
WHEREAS, the Port Arthur Section 4A Economic Development corporation desires to enter into
an agreement with Vinson & Elkins, L.L.P. for services as bond counsel in. connection with the
authorization, issuance, sale and delivery of sales tax revenue bonds; and
WHEREAS, the City Council desires to authorize the President and Secretary of the Port Arthur
Section 4A Economic Development Corporation execute an Engagement Letter with Vinson & Elkins,
L.L.P. `
NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PORT ARTHUR:
Section 1. That the facts and opinions in the preamble aze true and correct:
Section 2. That the President and Secretary are herein authorized to execute an Engagement
Letter in substantially the same form as attached hereto as Exhibit "A".
Section 3. That a copy of the caption of this Resolution shall be spread upon the Minutes of the
City Council.
READ, ADOPTED, AND APPROVED, this _ day of May, 2008, AD, at a Regulaz Meeting
of the City Council of the City of Port Arthur, Texas by the following vote:
AYES: Mayor:
Councilmembers:
NOES:
Mayor
ATTEST:
Terri Hanks, Acting City Secretary
APPROVED AS TO FORM:
Mark Sokolow, City Attorney
APPROVED FOR ADMINISTRATION:
Ft~rd Batiste, CEO Port Arthur ED,C l ,
Rebecca Underhill, Finance Director
Z:\Finance\Resolutions\Vinson and Elkins-EDC.doc
EXHIBIT ``A"
Thomas A. Sage tsage@velaw.com
Tel 713.758.2159 Fax 713.615.5728
May 6, 2008
City of Port Arthur Section 4A
Economic Development Corporation
444 Fourth Street
Port Arthur, Texas 77640
Re: Engagement Letter
Ladies and Gentlemen:
This letter, when accepted by you; will constitute an agreement between this firm and
the City of Port Arthur Section 4A Economic Development Corporation (the "Corporation")
for our services as bond counsel in connection with the authorization, issuance, sale and
delivery of sales tax revenue bonds (the "Bonds") to be issued by the Corporation for the
construction of a facility to house the corporate headquarters of EnGlobal, Inc.
We agree that our services as bond counsel will include the following:
1. Attendance at all meetings of the Board of Directors of the Corporation or the
City Council of the City of Port Arthur as required or requested in connection
with the planning and authorization of such issue, including consultation on
federal income tax matters;
2. Preparation of the order of the Board of Directors authorizing issuance of the
Bonds, together with all other legal documents comprising the transcript of
proceedings for authorization and issuance of the Bands;
3. Consultation with representatives of the City, the Corporation and the
Corporation's financial advisor regarding information to be included in .the
Official Statement for th'e Bonds, limited solely to the description of the
Bohds and the status of the Bonds and the interest thereon under federal
income tax law;
4. Preparation of and submission to the Attomey General of Texas of a transcript
of proceedings for the Bonds to obtain the approval of the Attorney General
and registration by the Comptroller of Public Accounts of Texas;
Vinson 8 Elkins LLP Attorneys at Law
Abu Dhabi Austin Beijing Dallas Dubai Hong Kong Houston
London Moscow New York Shanghai Tokyo Washington
First City Tower, 1001 Fannin Street, Suite 2500
Houston, TX 77002-6760
TeI 713.758.2222 Fax 713.756.2346 www.velaw.com
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May ta, 2008 Page 2
5. Preparation and filing of legal documents required under federal income tax
law for the Bonds, and the preparation of and delivery to the Corporation of a
letter explaining the federal income tax treatment of bond proceeds;
6. Supervision of the printing of the Bonds and their delivery to the purchasers;
7. Representation of the Corporation at the closing of the sale of Bonds,
including preparation of closing documents; and
8. If appropriate,. the delivery at closing of our approving opinion as to the
validity of the Bonds under' Texas law and the exclusion of interest on the
Bonds from gross income of bondholders under federal income tax law.
For the services outlined above, our fee would be $40,000, with such fee to be paid from
bond proceeds, and contingent on delivery of the Bonds. If no bonds are issued, no fee
would be~due. '
The Corporation would also reimburse us for certain charges incurred in connection
with the bond issue, including travel, long distance telephone charges, and photocopy and
document delivery charges. All such charges will be subject to approval by the Corporation.
The services outlined above do not include such matters as services as disclosure.
counsel in connection with bond issues, work on post-closing federal tax or disclosure issues,
obtaining IRS rulings or clarifications of federal tax law, presentations to rating agencies or
bond insurers, or "blue sky" or securities registration services. We will be pleased to provide
legal services in connection with ahy matters not included in paragraphs 1 through 8 above,
provided that such additional services are performed on mutually agreeable terms, to be set
forth in a separate letter of engagement.
The firm represents the City of Port Arthur, Texas and, "from time to time, a number
of financial institutions, including institutions that act as financial advisors or underwriters in
connection with the issuance of municipal bonds. This means that we may have represented,
may currently represent, or in the future may represent financial institutions that have
interests opposing your interests in connection with the Bonds. Moreover, we presently
represent and in the past have represented First Southwest Company. This will not in any
way affect the diligence or vigor with which we represent your interests in connection with
the issuance of the Bonds. If this is a concern to you, please let us know and we will check
on the particular financial institutions involved in the issuance and underwriting of the
Bonds. '
un~,cr~o '1 (.9 ~nA9.. i
May ia, 2008 Page 3
This agreement shall remain in force and effect until the Bonds have been sold and
delivered; provided; however, that this agreement maybe terminated by either party on thirty
days written notice. This agreement incorporates the Standard Terms of Engagement for
Legal Services, a copy of which is attached.
A~~~crn., 4(.91 f1R9.. 1
May 14, 2008 Page 6
If the arrangement set out above meets with your approval, please execute this
agreement in the space provided below and return one executed copy to the undersigned.
Very truly yours,
Thomas A. Sage
4
16za:zlso
Attachment
ACCEPTED:
CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEV"ELOPMENT CORPORATION
By
Name:
Title:
ta..,~«~., zF~ i nay., i
VINSON & ELKINS L.L.P.
Standard Terms of Engagement
for Legal Services
This statement sets forth certain standard terms of our engagement as your lawyers and is
intended as a supplement to the engagement letter that we have with you as our client. Unless
modified in writing by mutual agreement, these terms will be an integral part of our agreement
with you as reflected in tihe engagement letter. Therefore, we ask that you ieview this statement
carefully and contact us promptly if you have any questions. We suggest that you retain this
statement in your file with the engagement letter.
The Scope of Our Work
You should have a clear understanding of the legal services we v<-i11 provide. Any
questions that you have should be dealt with promptly.
We will at all times act on your behalf to the best of our ability. Any expressions on our
part. concerning the outcome of your legal matters are expressions of our best professional
judgment, but are not guarantees. Such opinions are necessarily limited by our kriowledge of the
facts and are based on the state of the law at the time they are expressed.
It is our policy that the person or entity that we represent is the person or entity that is
identified in our engagement letter, and absent an express ageement to the contrary does -not
include any affiliates of such persomor entity (e.g., if you aze a corporation or partnership, any
pazents, subsidiaries, employees, officers, directors, shareholders or partners of the corporation
or partnership; or commonly owned corporations or partnerships; or, if you are a trade
association, any members of the trade association). If you believe this engagement includes
additional entities or persons as our clients you should inform us immediately.
It is also our policy that the attorney-client relationship will be considered terminated
upon our completion of any services that you have retained us to perform. If you later retain us
to perform further or additional-services, our attorney-client relationship will be revived subject
to the terms of engagement that we agree on at that time.
This .engagement shall be subject to. the Texas Disciplinary Rules of Professional
Conduct.
Who~Will Provide the Legal Services
Customarily, each client of the Firm is served by a principal. attorney contact. The
principal attorney should be someone in whom you have confidence and with whom you enjoy
working. You are free to request a change of principal attorney at any time. Subject to the
supervisory role of the principal attorney, your work or parts of it may be performed by other
lawyers and non-lawyers in the Firm. Such delegation maybe for the purpose of involving
lawyers ormon-lawyers with special expertise in.a given area or For the purpose of providing
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services on the most efficiebt and timely basis. Whenever practicable, we will advise you of the
names of those attorneys and non-lawyers who work on your matters.
How Our Fees Will Be Set
Generally, our fees are based on the time spent by the lawyers and non-lawyers who work
on the matter. We will charge for all time spent in representing your interests, including, byway
of illustration, telephone and office conferences with you and your representatives, consultants
(if any), opposing counsel, and others; conferences among our legal and non-lawyer personnel;
factual investigation; legal research; responding to your requests for us to provide information to
your auditors in connection with reviews or audits of financial statements; drafting letters and
other documents; and travel. We will keep accurate records of the time we devote to your work
in units of quarters of an hour.
The hourly rates of our lawyers and non-lawyers are, from time to time, reviewed and
adjusted and maybe changed with or without notice to reflect current levels of legal experience,
changes in overhead costs; and other factors. London rates. are set in UK pounds sterling and are
converted to dollars. using the official exchange rate established by the UK government at the
beginning of the calendar quarter in which the time was worked.
Although we may from time to time, at the client's request, furnish estimates of legal fees
and other charges that we anticipate will be.incurred, these estimates are by their nature inexact
(due to unforeseeable circumstances) and, therefore, the actual fees and charges ultimately billed
may vary from such estimates. `
W"ith your advance agreement, the fees ultimately charged may be based upon a number
of factors, such as:
The time and effort required, the novelty and complexity of the issues presented,
and the skill required to perform the legal services promptly;
- The fees customarily charged in the community for similar services and the value
of the services to you;
The amount of moriey or value of property involved and the results obtained;
- The time constraints imposed by you as our client and other circumstances, such
as an emergency closing, the need for injunctive relief from court, or substantial
disruption of other office business;
- The nature and longevity of our professional relationship with you;
- The experience, reputation and expertise of the lawyers performing the services;
- The extent to which office procedures and systems have produced ahigh-quality
product efficiently.
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For certain well-defined services (for example; a simple business incorporation), we will
(if requested) quote a flat fee. It is our policy not to accept representation on a flat-fee basis
except in such defined-service areas or pursuant to a special arrangement tailored to the needs of
a particular client. In all such situations, the flat fee arrangement will be expressed in a letter,
setting forth both the amount of the fee and the scope of the services to be provided.
We also will, in appropriate circumstances, provide legal services on a contingent fee
basis. Any contingent fee representation must be the subject of a separate and specific
engagement Letter.
Additional Charges
In addition to our fees, there will be -other charges for items incident to the performance
of our legal services, such as reprographics, couriers, travel expenses, some .long distance
telephone calls, facsimile transmissions, postage, overtime for secretaries and other non-legal
staff specialized computer applications such as computerized legal research, media services and -
practice support, records retrieval, and filing fees. The current basis for these charges in the
Firm's U,S. offices is set forth below. Charges for similar services in the Firm's foreign offices
may vary from those shown below. The Firm will review this schedule of charges periodically
and adjust them to take into account changes in the Firm's. costs and other factors.
Reprographics and Production Services
The Firm charges $.15 per page for non-color duplicating and scanning, including
printing electronic and scanned images: and printing for duplication purposes.
Additional charges apply for color and oversized (over 11x17 inches) documents.
There are special chazges for other production services, which are available on
request. .
Courier Services
Charges, which may vary based on the service provider used and the service
provided, are billed at the Firm's actual cost.
Computer Aided Legal Research (CALR)
.Charges for services are billed at the Firm's actual cost.
Telefax
The Firm charges $0.25 per page for outgoing telefaxes, which includes all
telephone costs. There.is no charge for incoming faxes.
Telephone
The Firm does not chazge for-local or domestic long distance calls originating in
- the Firm's U.S. offices. Other lorig distance calls, including international long
Houston 3401566x.1
distance calls, audio conferencing sendces, and calling card calls are charged at
the Firm's actual cost for the call or conference.
Travel-Related Expenses
Airfare, hotel, meals, ground transportation and other travel related costs are
billed at the Firm's actual costs, including negotiated discounts.
All Other Costs
The Firm charges actual disbursements for third-party services such as court
reporters, expert witnesses, etc., and may recoup expenses reasonably incurred in
connection with services performed in-house, such as postage, non-legal staff
overtime, file retrieval, media services and practice support, etc. A current
schedule of these charges is available on request.
Unless special arrangements are otherwise made, fees and expenses of others (such as
experts, .investigators, consultants and court reporters) will be the responsibility of, and billed
directly to, the client. Further, all invoices in excess of $500 will be forwarded to the client for
direct payment.
Billing Arrangements and Terms
Our billing rates are based on the assumption of prompt payment. Consequently, unless
other arrangements are made; fees for services and other charges will be billed monthly and are
payable within thirty days of receipt.
By engaging us, you acknowledge and. agree that you are responsible for payment of fees,
expenses and disbursements. In appropriate matters as an accommodation to you, we may agree
to direct our bills to third-party payors (e.g., an insurer); but you agree that you will remain fully
responsible for timely payment of our bills if for any reason the third party does not timely pay
such bills. Likewise, we a~-ee that we-owe our professional obligations to~you, even when a
third party pays our bills.
Advances
Clients of the Firm are sometimes asked to deposit funds as an advance payment with the
Firm. The advance payment will be applied first to payment of charges for such items as
photocopying, messengers, travel, etc., as more fully described above, and then. to fees for
services. The advance will be deposited in our client advance account and we will charge such
other charges and our fees against the advance and credit them on our billing statements. In the
event such other charges and our fees for services exceed the advance deposited with us, we will
bill you for the excess monthly or may request additional advances: Any unused portion of
amounts advanced will be refundable at the conclusion of our representation.
Houston 3401 ~66v.1
Confidentiality
We will preserve the confidentiality of information you provide us consistent with
applicable law including the rules of professional conduct governing lawyers. This confirms
your agreement that, with respect to firm. brochures or other material or information regarding
the firm and its practice, we may indicate the general nature of our representation of you and
your identity as a firm client.
Client and Firm Documents
We will maintain any documents that you famish to us in our client file (or files) for this
matter: At your request, we will return your documents to you at the conclusion of the matter (or
eailier, if appropriate). It is your obligation to telLus which, if any, of the documents that you
famish us that you want returned. We will return those documents to you promptly afrer our
receipt of payment for outstanding fees and charges. Our own files pertaining to this matter,
including the work performed by our atfomeys, will ,be retained by the Firm. Any documents
retained by the firm will be kept for a certain period of time, and ultimately we will destroy them
in accordance with our record retention program schedule then in effect. .
Third Party Contractors
Like many law firms and other organizations, our Firm from time to time uses ordeals with third
parties in connection with certain areas of our practice or operations. For instance, these third
parties may include vendors, consultants, advisors, or other service providers in areas such as
litigation support, storage, document management, hardware and software systems, law firm
practice management, information technology, accounting and financial matters, and the like.
Additionally, the Firm may use temporary lawyers and non-lawyers in certain matters. In
performing their services, these parties may have some access to confidential client information,
and the Firm accordingly has appropriate confidentiality arrangements with them obligating
them to preserve the confidentiality of any such information. You consent to the Firm allowing
non-employee contractors access to such information as described. We take our confidentiality
obligations very seriously; do not hesitate to contact us with any questions.
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