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, THE CITY OF NASHUA “the Gate City”

Financial Services

Purchasing Department

April 11, 2019
Memo #19-143

TO: MAYOR DONCHESS
FINANCE COMMITTEE
SUBJECT: FISCAL AGENT AGREEMENT WITH CITY ARTS NASHUA (VALUE: $0)
DEPARTMENT: 183 ECONOMIC DEVELOPMENT; FUND: NONE
Please see attached communication from Tim Cummings, Director of Economic Development dated April

40, 2019 for the information related to this purchase.

The Director of Economic Development and the Purchasing Department recommend approval of this
request to name City Arts Nashua of Nashua, NH as Fiscal Agent for the Performing Arts Center.

an Hike
Purchasing Manager

Cc: TCummings J Graziano

229 Main Street « Nashua, New Hampshire 03061 » Phone (603) 589-3330 » Fax (603) 589-3233 |

THE CITY OF NASHUA “the Gate City’

Economic Development

To: J. Donchess, Mayor/Chair of Finance Committee
From: T. Cummings, Economic Development Director
Ce: Members of the Finance Committee

Date: April 10, 2019

Re: Request for Approval of Fiscal Agent Agreement for the Performing Arts Center Project

The Office of Economic Development has been working with City Arts Nashua to develop a
Fiscal Agent agreement relative to the capital campaign efforts for the future performing arts
center.

The idea is to partner with an established 501 c3 entity while the development of a legal entity for
this specific project occurs. This partnership with City Arts Nashua will allow the project to take
advantage of the benefits of the tax exempt status while also developing a private (non-public)
structure, which is highly desirable from the feedback we received during the fundraising
feasibility study that occurred this past summer.

The Office of Economic Development recommends entering into this Fiscal Agent Agreement for
with City Arts Nashua.

FISCAL AGENT AGREEMENT

This Agreement is made as of the day of April, 2019 by and between the City of Nashua, a
municipal corporation with a principal address of 229 Main Street, Nashua, NH 03061 (hereafter referred
to as the “Sponsored Organization”) and City Arts Nashua, a New Hampshire 501(c)3 charitable
organization with a principal address of PO Box 1603, Nashua, NH 03061 (hereafter referred to as the
“Fiscal Agent’).

Purpose of Agreement

The Sponsored Organization has proposed that the Fiscal Agent sponsor and assist in the financial
administration of the fundraising activities for a yet-to-be formed private nonprofit organization, which
will support the operations Nashua Performing Arts Center (‘the Project”). The City of Nashua is
creating a strategic partnership with City Arts Nashua for the sole purpose of the administration and
bookkeeping relative to the fundraising needs of the yet-to-be formed private nonprofit.

The Fiscal Agent has determined that sponsorship of the Project would be consistent with its goals, and
wishes to make arrangements with the Sponsored Organization for the implementation and operation of
the Project.

City Arts Nashua agrees to serve as the fiscal agent for the fundraising activities associated with a
downtown Performing Arts Center to be located at 201 Main Street, Nashua, NH 03061 under the
following stipulation(s):

1. The Fiscal Agent status is in relation to the administration of the fundraising activities for the
Performing Arts Center only.

2. The Fiscal Agent hereby agrees to sponsor the Project and assume administrative, financial and
legal responsibility for purposes of the requirements of funding organizations. The Sponsored
Organization agrees to implement and operate the Project, in accordance with the terms of this
agreement and with any requirements imposed by The Fiscal Agent.

3. The Project shall be operated in a manner consistent with the Fiscal Agent’s tax-exempt status
and as described in this Agreement. No material changes in the purposes or activities of the
Project shall be made without prior written permission of the Fiscal Agent and in accordance with
any requirements imposed by The Fiscal Agent, nor shall the Sponsored Organization carry on
activities or use funds in any way that jeopardizes the Fiscal Agent’s tax-exempt status.

4. The Sponsored Organization shall not, and shall not permit the Project to, attempt to influence
legislation or participate or intervene in any political campaign on behalf (or in opposition to) any
candidate for public office or otherwise engage in the carrying on of propaganda (within the
meaning of section 501(c)(3) of the Internal Revenue Code of 1986).

10.

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The Sponsored Organization is responsible for the complete administration of the Performing
Arts Center’s building and creation.

The Sponsored Organization will provide the Fiscal Agent with reports describing the progress
of the Project and the programs and services of the Project at each Fiscal Sponsor Board of
Director’s meeting, but in no event no less than quarterly, starting April 1, 2019,

On behalf of the Sponsored Organization, the Fiscal Sponsor will establish and operate for the use
of the Project a designated, separate bank account at a FDIC insured or NCUA insured financial
institution with a physical branch in New Hampshire (“Account”), The Account will be
segregated on the Fiscal Sponsor’s books. All amounts deposited into the Account will be used
in its support, less administrative charges under this Agreement, if any, and subject to the
conditions set forth herein. Interest attributable to the funds in the Account will accrue for the
benefit of the Project. The Fiscal Sponsor will provide upon request up-to-date accounting of the
Account to the Sponsored Organization.

The Fiscal Agent shall make deposits into the Account in a timely manner.

The Sponsored Organization will provide the Fiscal Agent with reports describing programs and
services of the Project at each City Arts Nashua Board of Directors Meeting.

The Sponsored Organization will provide all information and prepare all reports, including
interim and final reports, required by funding organizations with the Fiscal Agent’s assistance and
final approval.

Fiscal Agent shall have authority over the financial administration of the Account and other assets
received by it for support of the Project. Fiscal Agent will make disbursements from the Account
to support the Project, subject to the terms and conditions of the Agreement in amounts and at
times in Fiscal Agent’s discretion. All other authority and responsibility related to the Project
shall be vested in and exercised by Sponsored Organization, including the duty to comply with
the terms of this Agreement and with the terms of any agreements with funding sources,
including the preparation of grant reports, although ultimate responsibility for administration of
the restricted fund rests with Fiscal Agent. Any grant of noncash items shall be granted to
Sponsored Organization on an “as is” basis without any warranty or representation about the
condition of such items.

Fiscal Agent agrees that all grants, charitable contributions and gifts that it receives for the
Project and Sponsored Organization will be reported as contributions to Fiscal Agent as required
by law. Further, upon request of the donor, Sponsored Organization agrees to acknowledge
receipt of any such grant, charitable contribution or gift in writing and to furnish evidence of
Fiscal Agent’s Sponsor’s status as an exempt organization under Section 501(c)(3) to the donor.
Fiscal Agent agrees to immediately notify Sponsored Organization of any change in its tax-
exempt status.

Sponsored Organization will use all funds disbursed from the Account for the purposes of the
Project and Sponsored Organization will repay Fiscal Agent any portion of any grant that is not
spent or committed for those purposes. Any changes in the purpose for which Account funds are

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spent must be approved in writing by Fiscal Agent before implementation. Sponsored
Organization acknowledges and agrees that Fiscal Agent shall have no duty to use Fiscal Agent
funds to pay expenses related to Sponsored Organization’s operations.

As compensation for the services provided by Fiscal Agent under this Agreement, Fiscal Agent
shall be entitled to receive two percent (2%) of all income received up to a lifetime maximum of
Forty Thousand Dollars ($40,000.00) by Fiscal Agent on behalf of the Project , such 2% to be
paid from the Account to Fiscal Agent quarterly.

The Sponsored Organization designates Tim Cummings, Director of Economic Development to
act as Authorizing Official. The Authorizing Official shall act as principal coordinator of the
Project’s daily business with the Fiscal Agent, and shall have authority to sign disbursement
requests to be submitted to the Fiscal Agent.

The Fiscal Agent and Sponsored Organization will maintain all financial records relating to the
Project according to generally accepted accounting principles, retain records as long as required
by law, and make records available to auditors as required by law.

The Fiscal Agent and the Sponsored Organization will reflect the activities of the Project, to the
extent required, on their state and federal government tax returns and financial reports. All
disbursements from an the Account shall be treated as payments made to or on behalf of
the Sponsored Organization to accomplish the purposes of the Project. The Sponsored
Organization will provide the Fiscal Agent with proper documentation to accomplish this,
including furnishing the Fiscal Agent with the Sponsored Organization’s Federal Employer
Identification Number.

The Sponsored Organization will give proper credit to the Fiscal Agent in all publicity and
marketing as decided upon in a case by case basis with the Chair of City Arts Nashua.

The Sponsored Organization retains all assets both tangible and intangible in nature. The Fiscal
Agent acknowledges and waives any ownership of assets acquired during the duration of this
Project and this Agreement.

Sponsored Organization shall indemnify, defend and hold harmless Fiscal Agent and its
employees, officers, directors, successors and assigns (“Indemnified Parties”) from and against
any and all liability that may be incurred by Fiscal Agent arising from Fiscal Agent’s acting as
sponsor under this Agreement, except to the extent arising from the Indemnified Parties own
negligence, willful misconduct or breach of the terms of this Agreement. This indemnity shall
include all reasonable costs of collection, including reasonable attorneys’ fees, but shall be
limited to the amount of funds held by or due to Fiscal Agent from the Sponsored Organization’s
Account under this Agreement.

This Agreement shall expire one year after its execution unless it is agreed to by mutual written
consent of both parties to extend.

Either party may terminate this Agreement by giving 60 days written notice to the other party.
The other party shall not have the right to prevent termination, but legal and funding requirements

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may affect the terms of the termination process, particularly if funds have been committed to or
received by Fiscal Agent on behalf of Sponsored Organization but not yet fully expended. Upon
termination of this Agreement, so long as there is another nonprofit corporation which is (i) tax
exempt under IRC Section 501(c)(3), (ii) not classified as a private foundation under IRC Section
509(a), Git) willing and able to sponsor the Project, and (iv) otherwise satisfactory to Fiscal Agent
and Sponsored Organization (a “Successor”), the balance of assets held by Fiscal Agent in its
restricted fund for the Project together with any other tangible and intangible assets held or
liabilities incurred by Fiscal Agent in connection with the Project shall be transferred to
Successor as soon as practicable after provision of the above notice. Sponsored Organization shall
be eligible to be a Successor itself so long as Sponsored Organization has received a
determination letter from the Internal Revenue Service indicating that Sponsored Organization
meets the qualifications to be an IRC Section 501(c)(3) organization and is not classified as a
private foundation under IRC Section 509(a). If no Successor is found within 60 days of such
written notice, Fiscal Agent may dispose of the Project assets and liabilities in any manner
consistent with applicable tax and charitable trust laws.

This Agreement shall be governed exclusively by the laws of the State of New Hampshire and
any claim or action brought relating to this Agreement or referable in anyway shall be brought in
Hillsborough County (New Hampshire) Superior Court Southern Judicial District or in the New
Hampshire 9th Circuit Court-—Nashua and not elsewhere.

This Agreement shall not be assigned in whole in part by either party without the express prior
written consent fo the other party. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties and their respective successors and assigns. This Agreement may not be
amended, supplemented or modified except by an instrument in writing signed by both parties.
This Agreement may be executed in counterparts, each of which when so executed shall be
deemed to be an original, and such counterparts shall together constitute one and the same
instrument.

In witness whereof, the parties hereto have executed this agreement on the day and year first written

above.

Accepted for City of Nashua (The “Sponsored Organization’):

James W. Donchess, Mayor

Witness Signature Name

Accepted for City Arts Nashua, (The “Fiscal Agent”):

Authorized Signer Name Title

Witness Signature Name

| THE CITY OF NASHUA “the Gate City’

Economic Development

To: James Donchess, Mayor

From: T. Cummings, Economic Development Director
Ce: Steve Bolton, Corporation Counsel

Date: April 3, 2019

Re: Contract for Legal Counsel Services for NMTC

The Office of Economic Development in partnership with the City’s Office of Corporation Counsel
solicited proposals for New Market Tax Credit (““NMTC”) legal services. Specifically, the services sought
are to assist with the development of the deal structure, provide a legal opinion on the NMTC transaction
and provide legal guidance as necessary to bring the NMTC transaction to a closure.

I along with Steve Bolton solicited proposals who have past experience closing NMTC transactions. Three
firms responded and after Steve and I reviewed the proposals and evaluated each proposal based on the
following criteria: qualifications and experience, past performance and service on similar projects,
proposed approach to scope of work, responses in interviews and cost.

Drummond Woodsum was chosen unanimously for their comprehensive knowledge and their strong past
experience working with municipalities, which translates into understanding the various perspectives and
priorities of a municipal corporation.

I am recommending awarding a contract for NMTC legal services for in the amount not to exceed $55,000
with an additional $1,500 for miscellaneous expenses to Drummond Woodsum for a grand total of
$56,500. However, the way the proposal is structured the city is only obligating to pay $5,000 for legal
work necessary in advance and in preparation of a NMTC closing.

It should be noted that the way you typically pay for this type of service is at the time of the NUTC
closing and it is bundled into the fees associated with the transaction. Should the transaction not
commence the city is only obligated to $5,000, which will come from the consulting budget set aside by
the Downtown Improvements Committee.

John S. Kaminski 253. i
DrummondWoodsum John S. Kaminski emcee etee

ATTORNEYS AT LAW 84 Marginal Way, Suite 800
Poriland, ME 04101-2480
207.772.1941 Main
207.772.3627 Fax

March 18, 2019
VIA EMAIL ONLY

Tim Cummings, Director of Economic Development
Steven A. Bolton, Esq., Corporation Counsel

City of Nashua

229 Main Street

Nashua, NH 03061-2019

Re: Nashua Performing Arts Center
Dear Tim and Steve:

Following up on my recent call with you, this letter contains our proposal regarding legal!
services involving the Nashua Performing Arts Center (the “Project”) and its financing through
the Federal New Markets Tax Credit (“NMTC”) program. We appreciate the opportunity to
submit a proposal to provide legal services for the Project to the City and its nonprofit affiliates
to be formed for the NMTC transaction. From our conversations and the materials you’ ve sent
me, it is an exciting project and would be a wonderful addition to downtown Nashua.

This letter is a proposal for the City’s review and consideration. If there are aspects of the
proposal on which you have questions or on which you want to discuss possible changes, please
let me know.

My previous letter dated February 20 (copy enclosed) provided detailed information about our
professional background and experience in NMTC transactions. As mentioned on our call, I
would lead our team here on this project and would involve other professionals here as needed to
deliver the services as efficiently as possible. Although Iam not admitted to the Bar in New
Hampshire, many of my colleagues are and we would involve New Hampshire-admitted
attorneys when needed.

We have discussed a proposal for our services in which we would be compensated based on our
tine spent charged at hourly rates subject to a not-to-exceed cap under the terms and conditions
described in this letter. In order to effectively set out this proposal, this letter describes the scope
of services we would provide, the applicable rates and the amount of that cap. Please bear in
mind that this cap is designed to allow the City to budget for these services and is not a fixed fee.
If the transaction goes smoothly the total fee could be less than that cap.

We also recognize that the City is most at risk financially prior to the receipt of notice that the
Project will receive a NMIC allocation. As ] mentioned on the call, we are willing to share that
tisk with the City by agreeing to limited fees (as more fully described below) if the Project does
not receive an allocation.

800.727.1941 | dwmlaw.com SFP MERITAS® LAW FIRMS WORLDWIDE

City of Nashua
March 18, 2019

Page 2

Our services in connection with the Project under the terms of this fee arrangement will consist
of the following tasks:

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Advising the City regarding the structure of the proposed NMTC transaction
financing (including with reference to bond financing, leases, appropriate use of
proceeds) to ensure compliance with NMTC requirements. We expect to work
with a recognized NMTC accounting firm which will be retained to prepare the
projections:

Working with the City and its economic development / NMTC consultant to
present the Project to Community Development Entities in seeking an NMTC
allocation and presenting the Project to potential tax credit investors and in
evaluating / negotiating proposals;

Providing strategic advice on the formation of nonprofits to be formed as part of
the NMTC transaction structure to ensure they meet the multiple objectives
required and meet NMTC requirements;

Assisting with formation and preparation of organizational documents for one or
more nonprofit entities to participate in the NMTC transaction,

Preparing resolutions, certificates and other corporate documents necessary for
the approval and closing of the NMTC transaction;

Working with board members of nonprofits entities (and municipal officials if
needed) to explain the NMTC transaction that they will be considering for
approval;

Negotiating and preparing the leverage loan documents;

Reviewing and negotiating the documents by which the NMTC investor funds the
transaction:

Reviewing and negotiating the put and call and tax credit indemnification
documents;

Developing, preparing and negotiating with the investor and CDE the provisions
of the QLICI loan documents

Conducting required due diligence and preparing the qualified active low-income
community business (“QALICB”) tax opinion customarily provided by
developer's or sponsor’s counsel; and