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Bond Accountability Commission 2 Recommendations Page 42

We recommend that CMSD’s Financial Advisor Agreements be modified to clarify that the Financial Advisors cannot underwrite CMSD securities on which they have advised CMSD. We recommend that CMSD investigate periodically the market for financial advisory services to ensure that its financial advisory fees remain in line with the market. In such an evaluation, it is appropriate for CMSD to consider the quality of services, and not merely the levels of fees. We recommend that CMSD enter into a contract with Bond Counsel that clarifies for CMSD the roles and responsibilities of Bond Counsel,42 as well as CMSD’s roles and responsibilities. We have found that sometimes municipal issuers do not fully understand Bond Counsel’s precise roles, potential limitations on Bond Counsel roles and responsibilities, or the full potential range of services Bond Counsel might provide. Such a contract should also provide for a range of continuing Bond Counsel services for CMSD, not merely services at the time of, or with fees dependent upon the completion of, Bond or Note issues. We recommend that CMSD investigate periodically the market for Bond Counsel services to ensure that its Bond Counsel fees remain in line with the market. In such an                                                             42

This was encouraged in the National Association of Bond Lawyers’ M ODEL E NGAGEMENT L ETTERS (1998 ed.) According to the publication— The Committee [on Professional Responsibility] believes that consistent use of written engagement letters will (a) minimize disagreements or misunderstandings; (b) focus attention on the conditions and guidelines that will govern the proposed attorney-client relationship; and (c) lead to more productive relationships. Although in the past, relationships in the municipal securities market were often created informally, as transactions have become increasingly complex under federal tax and securities law regulatory pressures, carefully negotiated written contracts are now advisable.

BAC2 Recomendations Final 04062010  
BAC2 Recomendations Final 04062010