August 21, 2014

1. BOND COUNSEL ROLES & RESPONSIBILITIES August 21, 2014 Patricia A. Zelmer, Esq. and Heather R. James, Esq. Ice Miller LLP One American Square, Suite 2900 Indianapolis, Indiana 46282

2. OVERVIEW OF BOND COUNSEL'S ROLES & RESPONSIBILITIES • Furnishing to the issuer of the bonds and to the purchaser(s) of the bonds an approving opinion as to the legality of the issue and, if applicable, the exclusion from gross income of interest on the bonds under Federal tax law.  • The opinion is an "unqualified" (in that, it does not contain the typical exceptions seen in a corporate or commercial transaction opinion) bond counsel opinion.  • The unqualified opinion of bond counsel must be given on the basis that bond counsel is "firmly convinced that, under the law in effect on the date of the opinion, the highest court of the relevant jurisdiction, acting reasonably and properly briefed on the issues, would reach the legal conclusions stated in the opinion."

3. OVERVIEW OF BOND COUNSEL'S ROLES & RESPONSIBILITIES • In addition to providing the bond opinion, bond counsel may undertake several other additional functions during the course of a transaction, including: • Preparation or review of all documentation (e.g., ordinances, resolutions, agreements, leases, indentures, certificates, notices, and other forms) requisite to the authorization, issuance, and sale of bonds (this includes general obligation bonds, revenue bonds (most common form for utility deals), special taxing district (e.g. park or redevelopment) bonds, lease rental (e.g. jail, juvenile detention center, courthouse) bonds and tax warrants); • Attendance at meetings of the appropriate fiscal or legislative bodies or boards (if necessary) at which proceedings affecting the transaction will be considered or voted upon;

4. OVERVIEW OF BOND COUNSEL'S ROLES & RESPONSIBILITIES • Rendering tax advice throughout different stages of the transaction in order to arrive at the best and proper structure; • Consultations with the various parties (normally the elected and appointed officials, local attorneys, financial advisors, other consultants (like engineers or architects), if any, and appropriate financial parties, including a purchaser such as SRF or RD, rating agencies, or letter of credit issuers, involved in the transaction regarding the details of the transaction and the legal proceedings required for the transaction; • Negotiations with key taxpayers, ratepayers or developers, if any; • Monitoring and helping to draft or implement key legislation related to the issuer's ability to complete projects or programs;

5. OVERVIEW OF BOND COUNSEL'S ROLES & RESPONSIBILITIES • Responding to inquiries from prospective purchasers of the bonds; • Attendance at and supervision of the bond closingor pre-closing; • Examination of the executed transcript documents; • Assembling, duplicating, and binding the transcript documents for delivery to the parties to the transaction; • Consulting about litigation and remonstrance and objection processes; • Developing post-issuance compliance procedures; and • Aiding the issuer in rebate obligations, among an array of possible other responsibilities.

6. Bond Counsel City/Town Representatives (including Local Counsel) Architect or Engineer Financial Advisor Roles in a Project Financing

7. TOPICS THAT ENGINEERS ADDRESS FOR THE PROJECT TEAM • Topics that Engineers address for the Project Team: • Timing; when are funds needed; any need for interim borrowing to pay preliminary costs? • Will issuer spend its own money and seek reimbursement later from the bond issue? • What is the project/what permits are needed/what approvals are needed for the issuer to take this project to bid? • What are the cost estimates for the project? What plan is in place if bids come in high?

8. TOPICS THAT ENGINEERS ADDRESS FOR THE PROJECT TEAM • Based on the nature of the project, will the bond issue go to the SRF Program, RD or the open market? If SRF or RD, are all those requirements being met and by whom? • How long will it take the issuer to complete the project and spend all the bond proceeds? • Are there other phases of the project that need to be considered at the outset of the transaction? • Does the issuer have any unique requirements that create a potential difficulty for construction/financing or managing the project?

9. ROLE OF LOCAL COUNSEL • Project Side: • responsible for title insurance • responsible for warranty deeds • letting of construction bids • ongoing construction issues (e.g. change orders, retainage, performance bonds, etc.)

10. ROLE OF LOCAL COUNSEL • Legal Side: • Local counsel opinion must opine on the following: • validity of documents entered into by the municipality • open door matters • due process matters (publication of appropriate notices) • validity of the creation of various commissions, districts, areas, etc. • validity of pledge of revenues • absence of litigation on any of the above matters (either filed or threatened)

11. WHEN TO INVOLVE BOND COUNSEL • Whenever you have a project that you'd like to fund, involve bond counsel immediately to discuss and consider: • Future needs • What projects can be funded with what types of bonds • Timing restraints

12. WHEN TO INVOLVE BOND COUNSEL • How will you pay debt service/lease rentals • User fees • Property taxes • Local option income taxes • TIF • Debt limit (constitutional/statutory) • Preserve • Not an issue

13. WHEN TO INVOLVE BOND COUNSEL • Petition/remonstrance or referendum • Kill the project in your community • Not an issue • Who can you sell to • SRF/RD/Bond Bank • Open Market Competitive Sale • Negotiated sale

14. Patricia A. Zelmer Ice Miller LLP One American Square, Suite 2900 Indianapolis, Indiana 46282 (574) 271-3841 Heather R. James Ice Miller LLP One American Square, Suite 2900 Indianapolis, Indiana 46282 (317) 236-2199 Thank You! QUESTIONS?