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HomeMy WebLinkAboutResolution 2003-064 IGA for arizona public entity NCFE loss recoveryMARANA RESOLUTION NO. 2003-64 A RESOLUTION OF THE MAYOR AND cOUNCIL OF THE TOWN OF MARANA, ARIZONA, AUTHORIZING THE TOWN TO ENTER INTO AN INTERGOVERNMENTAL AGREEMENT WITH OTHER PUBLIC ENTITIES FOR THE FORMATION OF THE ARIZONA pUBLIC ENTITY NCFE LOSS REC°VERY COALITION, INC. WHEREAS, the Town of Marana is a participant in the Local Government Investment Pool (LG~), administered by the Office of the Treasurer of the State of Arizona, into which the Town has invested certain funds; and WHEREAS, as a result of the Town's participation in LGIP and the insolvency and ensuing bankruptcy of National Century Financial Enterprises, an Ohio corporation (NCFE), the Town has suffered financial loss; and · of of the Town of Marana have determined that recovery WHEREAS, the Mayor and Council and the lost funds is in the best interest of the Town and its residents; WHEREAS, the Town has been presented with an Arizona Public Entity NCFE Loss Recovery Intergovernmental Agreement, which is attached hereto as Exhibit A and incorporated herein by this reference; and Agreement provides for the creation of, and the Town' s WHEREAS, the Intergovernmental the Arizona Public Entity NCFE Loss membership in, a non-profit organization to be known as Recovery Coalition, Inc., whose purpose shall be to pursue recovery of the losses and/or claims of its members; and WHEREAS, A.R.S. 11-952 grants the Town the authority to enter into intergovernmental agreements; and WHEREAS, the Mayor and Council have determined that approval of the Intergovernmental Agreement is in the best interest of the Town and its residents. NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of the Town of Marana, Arizona, as follows: Section 1. The Town is hereby authorized to enter into the Arizona Public Entity NCFE Loss Recovery Intergovernmental Agreement, attached hereto as Exhibit A and incorporated herein by this reference. Section 2. The Mayor of the Town of Marana is hereby authorized to execute said Section 3. Section 4. Intergovernmental Agreement on behalf of the Town. The Town staff is hereby authorized to take all steps necessary to implement said Intergovernmental Agreement and give it effect. All orders or resolutions in conflict herewith shall be and the same are, to the extent of such conflict, hereby repealed, and this resolution shall be in full force and effect immediately upon its adoption. PASSED AND ADOPTED by the Mayor and Council of the Town of Marana, Arizona, this 17th day of June, 2003. ~, Jr. ATTEST: elyn C~ronson wn Clerk APPROVED AS TO FO~RM: As Town Attorney and not personally Exhibit A Arizona Public Entity NCFE Loss Recovery Intergovernmental Agreement ARIZONA PUBLIC ENTITY NCFE LOSS RECOVERY iNTERGOVERNMENTAL AGREEMENT WHEREAS A.R.S. § § 11-951, et seq., provide for and authorize public agencies to enter into contracts or agreements, including those for the contracting of services and the joint exercise of powers common to the contracting parties and for joint cooperative action, and WHEREAS as a consequence of the insolvency and ensuing bankruptcy of National Century Financial Enterprises, an Ohio corporation ("NCFE"), in which various public agencies, including the parties hereto, had pooled investment funds through the Office of the Treasurer of the State of Arizona pursuant to state law, significant losses and/or claims have accrued to the parties, and WHEREAS it is the desire of the parties hereto to have their collective interests protected through joint participation, coordination and pursuit of all available legal remedies on their behalf by a co-ordinating body, hereinafter identified, empowered to act regarding recovery of the losses, claims and/or causes of action as stated to which the parties may be entitled, including the identification and retention of legal counsel to represent the parties and the co-ordinating body empowered to act on their behalf to be selected pursuant to the authorizations conveyed herein and otherwise consistent with applicable law, provided, however, that nothing herein shall be construed to interfere with pursuit of the parties' claims in the NCFE Ohio banlaxtptcy proceeding, Jointly Administered Case No. 02°65235, Eastern Division, Southern District of Ohio, United States Bankruptcy Court, pursuant to proofs of claim heretofore filed on their behalf by the Office of the Arizona Attorney General, and provided further that no party or public agency seeking to join in this agreement may join or remain a party if to do so would create either a conflict of interest in fact or a legal representational conflict, and WHEREAS it is the desire of the parties to limit and confine participation in this agreement to those public agencies, as defined in A.R.S. § 11-951, which deposited funds with and for the purpose of investment by the Treasurer of the State of Arizona in the local government investment pool ("LGIP") authorized by Arizona law and which is the subject of the losses and claims pursued in the Ohio NCFE bankruptcy proceeding under the proofs of claim heretofore filed therein and on their behalf by the Office of the Arizona Attorney General; NOW, THEREFORE, the undersigned agree as follows: 1. The duration of this intergovernmental agreement shall begin on the__ day of May, 2003 and shall continue through and including that date which is thirty (30) days following the entry of any final and non-appealed judgment in a court of competent jurisdiction or, in lieu thereof, execution of any final settlement ofclairns, hereinafter described, arising out of the pursuit through retained legal counsel of said claims, and continuing through distribution of recovered funds, if any, and final audit provided, however, that in the event that all parties to this agreement concur in a determination to terminate this agreement in the absence of a final judgment or settlement, the agreement may then be terminated by unanimous consent; 2. It is agreed by the parties that conflicts and inter-party claims with respect to losses and claims arising from or involving and/or relating to the insolvency and ensuing bankruptcy of NCFE, as described herein, against other parties are waived, provided, however, that this provision shall not be construed as waiving anY claims against the o o o State of Arizona and/or the Treasurer of the State of Arizona; It i s a greed b y t he parties t hat t he c o-ordinating body referenced i n ¶ 6 o f this agreement is specifically authorized to serve as the agent, in law and in fact, for the parties and the parties agree to hold the co-ordinating body harmless for all acts performed in good faith and in conformity with this agreement on behalf of the parties; The purpose of this intergovernmental agreement is to convey and delegate to the entity hereinafter identified, as applicable or appropriate, the decision-making authority for all litigation-related issues regarding the notes and investments for which recovery is sought, including the rights to pursue recovery, and all the authority and responsibility to select, retain and supervise competent legal counsel, and to file claims and initiate litigation provided, however, that the parties shall retain all of the right, title and interest in their individual respective notes and investments as described herein; It is agreed that the scope of representation shall include representation of the parties and the co-ordinating body, acting on behalf of the legal interests of each participating party, with respect to losses and claims arising fxom or involving and/or relating to the insolvency and ensuing bankruptcy of NCFE as described herein, including analysis and determination of any third parties who or which might be held responsible, whether on grounds of fi:aud, breach of fiduciary duty, negligence or other grounds, for the said losses and claims; The parties agree that for the purpose of pursuing the objectives and purposes of this o agreement, a separate nonprofit corporation, to be known as the "Arizona Public Entity NCFE Loss Recovery Coalition, Inc." as authorized under A.R.S. § 11-952(A), is created, to be governed by a Board of Directors consisting of nine (9) members comprised of: A. four (4) members representing Arizona municipalities, one B each for the cities of Chandler, Mesa and Scottsdale and one at-large member, to be appointed by the League o f Arizona Cities and Towns, representing the remaining signatory municipalities; two (2) members representing Arizona counties, one member for Pima County and one at-large member representing the remaining signatory counties; one (1) member representing the signatory school districts, community college districts and universities; one (1) member representing the signatory special taxing districts; and one (1) member representing the interests of the Gila River Indian Community; It is agreed that, in order to facilitate the expeditious implementation of this agreement and promote its objectives, as an initial and temporary Chair of the Board of Directors of the nonprofit corporation referenced in ¶ 6, the at-large municipality member representative appointed by the League of Arizona Cities and Towns is approved and appointed to serve in said capacity until such time as the full board of directors may determine to elect a new or different Chair and/or vote to continue said 4 o 10. 11. member as Chair on an indefinite basis; It is agreed that for the purposes of this agreement relating to the identification and selection of outside legal counsel as described herein, the nonprofit corporation Board of Directors and/or initial Chair shall select and utilize the procurement code and/or procedures of one of the public agency parties hereto to implement the objectives of this agreement. If the selected procurement code or procedure requires the signature of an officer, the board, through its Chair, is authorized to so execute. The board is also authorized to utilize, to the extent practicable, agreements and/or contractual procedures presently existing between parties and their respective qualified outside contract legal counsel, if any, to facilitate adherence to the requirements for the selection and retention of counsel for outside legal services under circumstances implication litigation; It is the intent of this provision that such existing outside legal counsel may be utilized in a co-counsel role, as necessary, with any additional outside legal counsel selected by the entity board and to facilitate representation of the parties in Arizona by such selected counsel if not otherwise licensed in Arizona, including existing outside legal counsel, new outside counsel or internally-employed legal counsel for one or more of the parties; The separate nonprofit corporation shall be invested with the authority to establish all necessary policies and procedures, including bylaws, consistent with and in furtherance of the implementation and attainment of the objectives of this agreement; The initial interim Chair of the Board of Directors shall have the authority to execute this agreement on behalf of and for the benefit of the parties, which authority shall also include the power to execute the agreement with any additional qualified participants desiring to join and to open and maintain a checking account for deposits and disbursements of funds for the purposes and in furtherance of the objectives of this agreement, all drafts against said account to require the signatures of the Chair and one (1) other board member, provided, however, that said account shall be opened and maintained at a financial institution which presents no conflicts of interest with those of the participating parties to this agreement relating to its subject 12. matter; The parties agree that, with respect to the identification, selection and retention of any outside legal counsel for the purposes set forth herein, an affirmative vote of two- thirds (2/3) of the board members present, including members participating by electronic means, shall be required. The parties also agree that with respect to any substantive matters other than the identification, selection and retention of outside legal counsel coming before the board, a simple majority vote of the board members present, including members participating by electronic means, shall be required, provided that, any decision regarding whether to settle or compromise a claim on behalf of any party shall be made only after consultation with and approval by such 13. It is agreed by the parties that a party having not already prepared and filed an administrative claim against the State of Arizona relating to the subject matter of this agreement pursuant to A.R.S. §§ 12-821, et seq., shall not file such a claim unless 6 14. 15. pre-approved by a majority vote of the board and provided further that if any such claim has been filed by a public agency seeking to join this agreement, the party agrees to withdraw said claim; The manner of financing the joint objectives of this agreement shall be to identify and select, through the board and/or the Chair, acting on behalf of the board, such competent outside counsel on the basis of said counsel' s willingness to undertake the representation on a contingent fee basis, with acknowledgment that out of pocket costs and expenses will be determined and become the responsibility of the parties, allocated to each on a pro-rata basis bearing the same percentage relative obligation for allocated costs to the whole as the party's individual claim bears to the whole of the aggregated parties' claims,provided, however, that, in the event that any selected competent outside counsel requires any "up front" cost retainer upon the condition that said counsel will not "front" costs attendant to the representation and litigation, the parties agree that they will each bear such costs, as billed, on the same pro-rata basis as heretofore described; The parties agree that, in recognition of the circumstance that certain expenses, including initial "start-up" costs, may be incurred for necessary operational purposes related to the objectives of this agreement, the parties-participants the County of Pima, Arizona, the City of Chandler, Arizona, the City of Scottsdale, Arizona, the Madcopa County Community College District and the Gila River Indian Community agree to budget sufficient funds to address the said initial or continuing operational costs related to the purposes of this agreement, apart from and in addition to any 16. 17. litigation costs which may be incurred within the terms and conditions of¶ 16 of this agreement, and initially each will contribute to and deposit with the board, through the Chair, the sum of Five Thousand Dollars ($5,000.00) for such operational purposes, and such additional amounts as may by mutual agreement of said "start-up" initial contributors be deemed necessary, contingent upon recognition by all other parties hereto, as evidenced by such other parties' execution of this agreement, of the fight of each "start-up" fund contributor to an absolute right of reimbursement for such sums from revenues recovered prior to distribution of any loss-claim recoveries, and provided further that each party to this agreement, regardless of date of joining in this agreement, shall be and become liable for such party' s allocated costs, including any costs accrued prior to such party's joining, if any; The board shall be authorized to make binding decisions on behalf of and for the benefit of the parties, to make pro-rata disbursements of monies recovered, if any, to the parties and to make pro-rata billings for costs, if any, to the parties,provided that, any decision regarding whether to settle or compromise a claim on behalf of any party shall be made only after consultation with and approval by such party; The permissible method to be employed in accomplishing the partial or complete termination of the agreement shall be the giving of thirty (30) days' written advance notice, together with a formal action by the parties' respective governing bodies, to each member of the board of intent t o disassociate from the intergovemmental agreement, provided, however, that any and all allocated costs which have accrued to such party prior to the giving of such notice, and formal governing body action 8 18. 19. 20. 21. acknowledging the obligation, shall remain the obligation of such withdrawing party, and provided further that, in the event that prior to such notice of disassociation, any agreement shall have been executed on behalf o f such p arty b y the board with competent outside counsel for the purposes described herein, any obligation of the party for the payment of an allocated contingent fee, if any, from monies ultimately recovered as a result of such counsel's services, shall also be satisfied or acknowledged prior to the withdrawal becoming effective as to such party; Any property, tangible, intangible, personal, real or mixed, which may be acquired under the terms of this agreement will, upon partial or complete termination of the agreement, be disposed of in accordance with the pro-rata distribution protocols identified in ¶ 26 of this agreement; With respect to any party to this agreement which is a school district as defined by applicable Arizona law, such a party, by executing this agreement, accompanied by written documentation that its participation has been first approved by the Arizona State Board of Education acknowledges the application of the limitations on extensions of this agreement as provided under A.R.S. § 11-952(1); The parties agree that, subject to the other requirements of this agreement, the board shall be authorized to identify, select, retain and supervise competent outside legal counsel and direct such counsel to file actions intended to protect the interests of the parties, each one of which parties shall be deemed to be a client for legal representation purposes; The parties agree that the board is authorized to admit additional participant parties, 9 22. 23. 24. 25. 26. subject to the provisions, conditions and restrictions of this agreement; Not less than once each quarter, and more frequently as determined by events identified by retained outside counsel, the Chair of the board shall report to the members of the board on the status of the proceedings and respond to any questions or concerns of individual parties in that regard; the Each party by execution of this agreement avers that it has complied with provisions ofA.R.S. § 11-952(D) regarding submission of the agreement to its own legal counsel for review and confirmation as to form and authorization as granted to such party under the laws of the State of Arizona applicable to such party; Each party acknowledges that finalized executed copies of this agreement shall be filed with the Arizona Secretary of State pursuant to A.R.S. § 11-952(G) and that the board is designated as the facilitating entity to ensure compliance with such filing requirement; It is agreed that this agreement is subject to the provisions ofA.R.S. § 23-1022 and that the parties post the notices required by such law; The parties agree that the distribution table attached to this agreement as Exhibit"A" is by this reference incorporated herein and made a part of this agreement, which exhibit may be amended from time to time to reflect the addition of additional participants not having executed the agreement contemporaneously with the original signatories hereto, and that said table accurately reflects procedures for the accounting for costs and the allocation of monies recovered, if any, on a pro-rata basis, for the benefit of each party, provided that, included in the costs first to be 10 27. 28. 29. 30. reimbursed are those relating to any advanced funds as described in ~l 15 of this agreement, including the "start-up" cost funds heretofore referenced and contributed by the parties there identified as providing said funds; The parties agree and aver that, by affixing their authorized representatives' signatures to this agreement, each has complied with any and all laws, rules and regulations and has passed or enacted such necessary resolutions, ordinances or other similar authorizations as are necessary for their execution of this agreement pursuant to A.R.S. § 11-952(H); The parties acknowledge and agree that this agreement constitutes the whole of the agreement between and among all parties and the board and that its terms shall not be altered or amended except in writing upon the concurrence of all parties, provided that, in the event of the successful identification, selection and retention of competent outside counsel by the board to represent the interests of the parties for the purposes and objectives described herein, any such written legal retention contract executed with outside retained legal counsel as provided herein shall be deemed to be a part of this agreement and incorporated herein; This agreement may be executed in multiple counterpart form, with each such counterpart constituting a binding original agreement between and among the parties and the board; Nothing in this agreement is intended to create, nor shall any provision be construed to authorize the creation of, a joint venture nor the creation of any rights in or of third-party beneficiaries; 11 31. 32. 33. PIMA COUNTY, ARIZONA By:_ Title: It is the intent of the parties and the board that this agreement and its provisions be severable, such that if anyportion or portions of the agreement are finally declared to be unlawful or void in a court of competent jurisdiction, the remaining portion or portions of the agreement which survive any such determination shall remain valid and enforceable according to their terms; Notice is herewith given of recognition of the application to this agreement of A.R.S. § 38-511 and Executive Order 99-4 and that the agreement is subject to cancellation on the grounds of conflict of interest in the event of a determination of a violation of either said statute or executive order, the terms of which statute and executive order are by this reference incorporated herein; This agreement is entered into on the date set forth in ¶ 1 above. TOWN OF MARANA, ARIZONA Approved as to form: By: By: Title: Approved as to form: By: ACCEPTANCE OF OBLIGATIONS: Arizona Public Entity NCFE Loss Recovery Coalition, Inc By: Title: Chair 12 EXHIBIT "A" The following table identifies all of the original participants in the intergovernmental agreement to which this exhibit is attached, along with their original investment losses expressed as both a dollar amount and as a percentage of the overall total loss of the original participants. As and when additional participants may join following the date of signing by the original participants, a revised exhibit will be prepared reflecting newly calculated loss claims and corresponding percentage figures to be utilized for the purposes of cost allocations and revenue distributions as may accrue to the participants in the course of performance of the provisions of the agreement, such revised exhibit being deemed to be a clerical revision not constituting a substantive amendment otherwise requiting formal approval as an amendment to the agreement. All expense and cost allocations and all pro-rata recovered revenue distributions shall be made in strict conformity with the table percentages hereinafter set forth. 13 (Finalized list in process) 14