Having served as counsel to public clients for over 100 years, K&L Gates understands the demands placed upon states and municipalities – and those who work with them. We have represented hundreds of cities, towns, counties, states, state agencies, ports, public utilities, wastewater and transit agencies, school districts, fire districts, irrigation districts, and other public entities. We have also represented underwriters, bond trustees, credit enhancement providers, conduit borrowers, and other entities involved in public finance transactions.
Bond Counsel Services
The firm is ranked among the nation's leaders in providing bond counsel services. In 2009, our public finance attorneys served as bond counsel for the issuance of over $5.92 billion in bonds, ranking 14th nationally by Thomson Reuters. The Bond Buyer list of top bond counsel firms ranked the firm second in the Far West region for the dollar volume of bond issues and for the number of bond issues handled (167) in 2008. Additionally, our municipal lawyers are listed in The Bond Buyer's Municipal Marketplace.
As bond counsel in WA, OR, AK, ID, IL, and MO, we provide legal services in the issuance of general obligation bonds, utility revenue bonds, assessment bonds, industrial development bonds (and other types of private activity bonds), short-term obligations (tax, revenue and bond anticipation notes), lines of credit, lease financing, tax increment financing, 501(c)(3) bonds, and refundings. We are assisting clients in financing projects using new tools available under the federal recovery act, including Recovery Zone Bonds, Build America Bonds and various tax credit bonds. We help clients identify and resolve legal, practical and political concerns in all phases of a bond issue. These may include:
- Structuring bonds
- Drafting election proceedings
- Reviewing disclosure documents
- Providing advice on compliance with state constitutional and statutory requirements
- Providing advice on compliance with federal tax and securities regulations
- Drafting closing documents and preparing bond transcripts
In addition to our extensive experience working with issuers in Washington, Oregon, Alaska, Idaho, Montana and Illinois, we have worked with clients elsewhere in the United States and abroad. Our specific bond experience includes:
General Obligation Bonds. The firm has extensive experience in the issuance of voted and non-voted general obligation bonds sold either by negotiated or competitive sale. We act as bond counsel for hundreds of general obligation issues per year, which are sold to underwriters or are privately purchased by banks.
Revenue Bonds. Public finance attorneys at the firm have prepared proceedings, provided opinions and drafted disclosure documents for municipal obligations secured by a variety of types of revenue, including water, sewer and electric revenue bonds, lease revenue bonds, housing bonds, revenue anticipation notes, and refundings of such obligations.
Assessment and Local Improvement District Bonds. We have extensive experience in the area of assessment district formation, assessments and financings. We assist issuers with issues that arise at all phases of the process of an assessment-based financing. As bond counsel, we prepare or review formation and assessment proceedings, strategize on potential issues and solutions, attend hearings if requested and assist with interim and long-term assessment bond financings.
Certificates of Participation and Lease Financing. We have worked as bond counsel with the states of Oregon and Alaska, as well as cities, counties and towns, on certificate of participation ("COP") transactions. We have also represented public and private clients in financing commercial projects through the use of tax-exempt COPs, tax-exempt revenue bonds supported by lease payments to be made by a governmental entity or public development authority, or tax-exempt COPs secured by leasehold interests in the facilities. These projects have included lease-to-own and lease-leaseback transactions for the acquisition or construction of office buildings, parking garages, housing projects and transportation facilities. In addition to the basic bond documents, we draft the leases and subleases, as well as design, development, construction, financing and operating agreements necessary for such transactions.
Innovative Debt Instruments. Our public finance attorneys have experience with all types of debt transactions, including lines of credit, Recovery Zone Bonds and Build America Bonds, tax credit bonds including Clean Renewable Energy Bonds, Qualified School Construction Bonds and Qualified Energy Conservation Bonds, variable rate transactions with and without put options, auction rate securities, commercial paper, cross-border leases, obligations that are credit enhanced with insurance, letters of credit and guarantees, derivative products, investment agreements, capital appreciation bonds and others.
Other Services
While finance matters have historically been the heart of our municipal practice, we do more than just bonds. Our attorneys provide a wide variety of other legal services to our municipal clients, helping them with energy issues, planning, permitting, land acquisition, procurement, construction claims and contracts, taxation, labor matters, litigation, environmental and regulatory proceedings, and state and federal grants. We regularly work with municipal clients on open public meetings, public records policy and disclosure, and election law issues.
Interest Rate Swaps
K&L Gates has extensive experience negotiating interest rate swap transactions on behalf of municipal issuers. We have also negotiated numerous hedging transactions in connection with power purchase contracts for municipal utilities. We have significant experience with interest rate swap and other derivative transactions on behalf of corporate clients.
We represent end users and do not represent dealers in swap transactions. We focus on interest rate swap transactions from the perspective of our issuer clients, negotiating terms that also are acceptable to a variety of providers. In our experience, a number of "standard" swap provisions must be modified to accommodate state law as well as the complex borrowing structures and covenants of municipal issuers.
Housing and Nonprofit Capital Facility Finance
The firm is very active as bond counsel to issuers of housing and nonprofit revenue bonds. These transactions have included public and private sales, fixed and variable rate issues, master trust indentures and interest rate swaps. The security for these bonds has included project revenues, taxes, contingent loan agreements, insurance, letters of credit, pass-through certificates and mortgages. We also have experience with the allocation side and policy challenges of administering the low-income housing tax credit program.
School District Finance
We maintain the largest school district finance practice in the Pacific Northwest, both in numbers of finance attorneys and the number of issues for which we act as bond counsel. We assist districts with drafting bond and levy measures and election resolutions and have a broad range of experience in all types of school district finance, including conditional sales contracts, leases, tax, revenue and bond anticipation notes, qualified zone academy bonds, qualified school construction bonds, limited general obligation bonds, voted general obligation bonds and refunding bonds.
Higher Education Finance
During our many years of representing higher education clients, we have enjoyed excellent working relationships with their finance staff, line staff, attorneys and financial advisors. We have not only worked on numerous bond issues and property acquisitions and developments, but also provided advice with respect to student fee structures, state initiatives, ongoing disclosure to the secondary market, private use of public facilities, legislative options, privatization of public functions and other issues.
We have worked with many issuers to provide tax-exempt lease financing for educational facilities, including buildings and equipment. While most of these transactions involved governmental borrowings supported by local and state taxes, as opposed to conduit financings, they have provided us with significant experience in dealing with lessors, intermediary banks and state law issues regarding security for lease transactions.
Public-Private Partnerships
K&L Gates assists public and select private entities in virtually every aspect of infrastructure development, including financing, planning, permitting, land acquisition, real estate transactions, competitive bidding, construction contracts and claims, environmental and regulatory proceedings, and litigation. We are assisting clients in the use of Recovery Zone Facility Bonds in public-private projects.
Public-private development is increasingly important, crossing all lines in traditional public sector development. We have helped municipal and private sector clients form and manage some of the largest, most complex public-private sector joint ventures in the Pacific Northwest and Illinois, including the development of major cultural and port facilities and large-scale urban redevelopments. We also have experience with multiple facets of public-private partnerships, including privatization, risk shift, and joint development. We bring synthesized, multi-disciplinary experience to these projects in order to effectively manage a vast array of implications of public-private partnerships, including but not limited to procurement issues, environmental issues, litigation, permitting, condemnation and Supreme Court, federal, state and local tax matters. Our public finance lawyers regularly work together with our colleagues in the Construction and Engineering, Real Estate, and Environmental, Land and Natural Resources practice areas.
K&L Gates pioneered the use of 63‑20 financings in the Northwest, an innovative financing vehicle well suited to financing the public portion of projects that also include separate private components. These financings have been successfully used to provide tax‑exempt financings, utilizing a nonprofit corporation, for projects that are used by, and ultimately will be owned by, a public entity; thus enabling public entities to achieve their public purposes without incurring debt and with greater flexibility to negotiate construction contracts.
Securities Law
Our firm has extensive experience in bond issuers’ original and secondary disclosure obligations and other securities law issues. We keep abreast of Securities and Exchange Commission requirements, practices in other regions and case law developments, and are ever mindful of the potential liabilities to all parties, particularly the issuer, of inadequate disclosure. We often prepare official statements as bond counsel and disclosure counsel on behalf of the issuer.
Tax, Arbitrage and U.S. Treasury Regulations
We closely monitor Treasury regulations and interpretations of the Internal Revenue Code. We offer the services of two full-time tax attorneys who focus entirely on federal tax law matters relating to municipal finance. Together with our municipal finance practice group, we offer comprehensive tax services on all types of public financing transactions, including tax-exempt bonds issued by state and local government units and public agencies. We advise municipal issuers, underwriters, borrowers and credit-enhancers on all aspects of federal tax laws affecting tax-exempt bonds, including structuring of governmental bonds and private activity bonds, complying with arbitrage and rebate regulations and responding to IRS examinations and audits
In addition to keeping abreast of finance issues, our bond lawyers continually review and discuss proposals for federal legislation that may impact our clients or the municipal bond market, including the federal recovery act. We also have a large Washington D.C. office with close contacts on "both sides of the aisle" and extensive lobbying skills. These connections allow us to keep our finger on the pulse of the municipal bond market.
Taxable Obligations
While most of our work as bond counsel involves the issuance of tax-exempt bonds, an increasing percentage of taxable bonds are being issued, including Build America Bonds. As the demand for private activity bonds has grown, we have been involved with the issuance of taxable portions of tax-exempt bond issues in order to pay for costs that cannot be financed with tax-exempt bonds. We have also served as bond counsel in the issuance of taxable obligations for the financing of pension liabilities, including the State of Oregon's $2.08 billion pension obligation bonds.
We have also acted as bond counsel for large taxable bond issues for sports facilities. Specific issues have combined taxable and tax‑exempt bonds to finance a new baseball stadium and basketball arena. Each of these taxable bond issues share virtually all of the characteristics of tax‑exempt bonds, except of course, for the federal tax law analysis and the tax opinion.
Underwriter’s Counsel
The firm has acted as underwriter’s counsel in many bond financings for cities, towns, housing authorities, counties, public utility districts and other state agencies. In addition, we routinely serve as disclosure counsel to issuers, preparing official statements and providing a “10(b)(5)” opinion with respect to federal securities laws.
We take pride in preparing clearly written, careful disclosure documents that are mindful of the federal securities laws applicable to municipal offerings. We counsel clients on various aspects of the federal securities laws and their applicability to primary disclosure documents – the preliminary and final official statements – as well as annual filings, material event notices and other disclosure.
As underwriter’s counsel, in addition to our technical proficiency, we also strive to develop a team relationship among the players. We enjoy an excellent working relationship with the other members of a financing team. We are also technologically adept and are happy to use extranets, emailed documents or any other form of communication that works for the finance team.
Additional Public Entity Services
Public Transportation
K&L Gates attorneys have played significant roles in major local and regional transportation projects throughout the Northwest. Our clients have included the Central Puget Sound Regional Transit Authority (Sound Transit), King County Metro (public transit agency within King County government), Portland Metro, Tri-Met, Spokane Transit, Pullman Transit, Pierce Transit, Kitsap Transit, CTRAN, and the now dissolved Seattle Popular Monorail Authority. Projects for these clients have involved public-private partnerships and arrangements among multiple public entities. We have served in various capacities-as bond counsel, general counsel and special counsel-on matters relating to public contracting, debt financing, land use issues, federal, state and local permitting, litigation and condemnation. This is an area of legal complexity, political controversy and multi-jurisdictional partnerships and thus requires both technical legal skills and a keen sensitivity to public process.
Public Policy Practice
Our Washington, D.C., office has represented municipal corporations and public agencies since the opening of the office in 1973. On behalf of the Port of Seattle, we secured legislation, including project authorization and appropriations for aviation, maritime, and surface transportation projects; participated in rulemaking and regulatory proceedings; and lobbied executive agencies. We have represented other ports on a variety of trade, environmental cleanup, customs and infrastructure improvement projects.
We have also represented associations of cities, such as the Tri-City Industrial Development Council (Pasco, Kennewick and Richland, Wash.), on federal assistance for local economic development and assisted the cities of Spokane, Yakima and Port Angeles on various matters.
Energy & Utilities
K&L Gates is widely recognized as a leader in the area of public and private utility finance and has been involved in financing of a wide variety of utility systems and energy projects. Our municipal finance lawyers have represented issuers and underwriters in numerous financing transactions, ranging in size from several million to more than a billion dollars each. We rank among the very top firms nationwide in providing bond counsel services for public power utilities.
Public Contracting
Our services to public entities involved in major public works projects have included direct negotiations with contractors, daily assistance to the consulting engineer and government staff, review and drafting of correspondence, providing legal opinions on the merit of claims, interpretation of contract provisions, advice to the government staff and its engineers on claims analysis strategies, participation in contractor claim negotiations, and the defense and prosecution of major claim litigation matters.
Our firm includes attorneys with extensive experience in the areas of alternative public contracting and procurement, including participation in procurements for and negotiation of contracts involving design-build, design-build-operate-maintain and design-build-finance-operate-maintain services. We actively work with public and private owners in drafting and negotiating agreements with proposers, general contractors, subcontractors, engineers, architects, system operators and concessionaires. Our attorneys have also negotiated inter- and intra-agency agreements for federal agencies and memoranda of understanding and agreements between federal, state and local agencies.
The firm assisted clients in the preparation of agreements between owners, contractors, architects, engineers and consultants ranging in value from less than $1 million to over $1.6 billion. In addition, our lawyers have detailed knowledge of federal procurement and contracting requirements. We led industry efforts to improve federal procurement practices and eliminate many unnecessary costs and risks associated with doing business with the federal government.
Port and Maritime
Our lawyers understand that, as public agencies, the mission of the ports includes both economic development and other public goals. Ports also have unique public outreach and participation responsibilities and requirements. We recognize that ports need to balance these different objectives and concerns. These factors can be critical in the way that we structure communications on legal and policy issues and ensure that decisions are adequately documented. We strive to develop an approach that maintains the attorney-client relationship, including privilege, where necessary and appropriate, while recognizing the unique public demands often placed on ports.
Our role in advising ports' in-house counsel and support staff is based on years of experience, as many of our team members bring the perspective of having previously worked with ports or similar municipal agencies on comparable matters. We believe this perspective allows us to provide practical, business oriented advice to senior management and in-house counsel teams, while managing matters with sensitivity to time and budget constraints.
For decades, our D.C. office has provided services to the maritime industry and has grown into one of the premier maritime and lobbying firms in the nation. The firm's clients include the owners and operators of containerships and bulk cargo vessels, passenger cruise vessels, and specialized vessels including fishing, dredging, gaming, entertainment, towing and recreational boats; port authorities; marinas; and a variety of industry associations and coalitions.
Ballot Titles
For many years, K&L Gates attorneys have been involved in all aspects of ballot title law, from helping draft titles to litigation about the adequacy of ballot titles. We have also represented interested parties in working with the Washington Attorney General’s office regarding the ballot titles for many recent initiatives and referenda. We drafted the ballot title to amend the Oregon Constitution to provide for the State's issuance of its $2.08 billion pension obligation bonds. We are keenly aware of the unique challenges drafting ballot propositions requires, and are adept at answering the myriad of legal questions that arise through the process.
Public Disclosure/Open Meetings
We regularly work with municipal clients on open public meetings, public records policy and disclosure, and election law issues. We have advised and assisted clients as to legal issues in conducting bond elections, including public disclosure commission issues, permissible and non-permissible involvement in an election campaign dealing with mail ballots and other issues. We also have drafted and managed the preparation of complex preliminary and final bond offering documents.
Legislation
We understand the importance of developing and tracking legislative proposals. We have drafted and monitored bills and proposed ordinances at the state and local levels on behalf of many public clients, including state legislation related to energy and resource issues, public finance, boundary modification, school construction funding and impact fees. In addition, we analyze proposed legislation for its impact on our public clients.
Constitutional Law
Our lawyers have a wealth of experience in the area of state and federal constitutional law. We have successfully challenged term limits legislation and defended dual majority local government structures. We have litigated a number of substantial cases on behalf of municipalities regarding the constitutionality of municipal ordinances, including those regulating First Amendment protected activities and public disclosure laws. We regularly advise clients on the state constitutional implications of innovative finance structures and aspects of public-private partnerships.
Public Entity Litigation
Our firm is the most experienced private firm in the Northwest representing public entities in litigation. Our lawyers are uniquely qualified to serve public entities because of the breadth of their substantive experience and their experience in litigating matters in the public spotlight. With dozens of litigators in the firm’s offices who are fluent in public entity litigation, supported by experienced paralegals, K&L Gates is able to appropriately staff any litigation matter no matter how large or small. We have also developed a proprietary database system to organize documents and information, which is particularly useful for document intensive litigation.