08-08-95171
Board of Directors Room
City Hall - 500 W. Markham
Little Rock, Arkansas
August 8, 1995 - 4:15 P.M.
The Board of Directors of the City of Little Rock, Arkansas,
reconvened from the August 1, 1995 regular meeting with Mayor Jim
Dailey presiding. City Clerk Robbie Hancock called the roll with
the following Directors present: Directors Sharp, Mason,
Kumpuris, Adcock, Wilson, Hinton, Hodges, Keck, Joyce and Wyrick
- total 10; Absent - None.
With a quorum being present, Mayor Dailey declared the Board
of Directors in session and announced that the purpose of the
reconvened meeting was to consider the Ordinance providing for
the issuance and sale of Airport Revenue Bonds, which was on the
Agenda for third reading.
Consideration was then given to Ordinance No. 16,951,
entitled:
AN ORDINANCE PROVIDING FOR THE ISSUANCE AND SALE OF AIRPORT
REVENUE BONDS FOR THE PURPOSE OF REFUNDING OUTSTANDING AIRPORT
REVENUE BONDS; PROVIDING FOR THE PAYMENT OF THE PRINCIPAL OF AND
INTEREST ON THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF
A SUPPLEMENTAL TRUST INDENTURE; AND PRESCRIBING OTHER MATTERS
RELATING THERETO; AND DECLARING AN EMERGENCY;
(In the principal amount of $5,300,000.)
City Attorney Tom Carpenter advised the Board of Directors that
the last WHEREAS clause had been changed from the principal
amount of $5,225,000 to $5,300,000. There was a motion by
Director Keck, seconded by Director Adcock, to amend the
Ordinance to change the principal amount in the last WHEREAS
clause from $5,225,000 to $5,300,000, and the motion was
unanimously adopted. There was a motion by Director Keck,
seconded by Director Wyrick, to suspend the rules and place the
Ordinance, as amended, on third and final reading, having been
read the first and second times at the regular meeting held
August 1, 1995. The motion was unanimously adopted by the Board
Members present, being eleven in number and two - thirds or more of
the members of the Board of Directors - elect, and the third and
last reading of the Ordinance ensued. Mrs. Susan Fleming,
representing the financial advisor Stephens, Inc., introduced Mr.
Tom Pate of Hill Crawford & Lanford, Inc. Mr. Pate, speaking on
behalf of the underwriters, explained the sale of the Bonds. He
said the average coupon rate was 5.44 percent on the 20 year bond
issue, and the longest bonds sold at an interest rate of 5.75
percent that were discounted at 98.5 cents to yield 5.87 percent.
The amount of savings generated was $954,171.13, or 18% of the
par amount of the current issue, which is a tremendous savings.
A roll call vote was then taken on passage of the Ordinance as
follows: Ayes - Directors Sharp, Mason, Kumpuris, Adcock,
Wilson, Hinton, Hodges, Keck, Joyce, Wyrick and Mayor Dailey -
total 11; Noes - None; Absent - None.
The Emergency Clause contained in Section 8 of the foregoing
Ordinance was then read and adopted by the following roll call
vote: Ayes - Directors Sharp, Mason, Kumpuris, Adcock, Wilson,
Hinton, Hodges, Keck, Joyce, Wyrick and Mayor Dailey - total 11;
Noes - None; Absent - None. Therefore, the Ordinance, as
amended, together with the Emergency Section, was declared
PASSED.
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Mayor Dailey then stated that Mr. P. A. Hollingsworth, a
member of the Little Rock Regional Airport Commission, had asked
to address the Board of Directors regarding allegations made at
the Agenda Meeting on July 25, 1995, and the Board of Directors
Meeting held August 1, 1995. Mr. Hollingsworth's statement was
as follows:
"Thank you, Mayor and members of the Board of Directors. I
requested to appear today because I thought it would be incumbent
upon me as an Airport Commissioner to respond to the allegations
that had been made concerning my role as an Airport Commissioner
in the vote on the bonds that you just approved, the one you
approved almost a year ago, and the one we presently have pending
before us regarding the PFC. I reviewed the tapes of the Board
meetings to really get a full appreciation of the issues that
were discussed here concerning my involvement. And I have also
gone back and reviewed the Minutes and the tapes of the Airport
Commission, going back to the 184 and 185 refunding and also
dealing with the 195 PFC issuance of the Bonds. I read Mr.
Carpenter, the City Attorney's report and I have thought that
after reviewing all that it was incumbent upon me to respond to
the allegations that there was a conflict of interest in my
voting on bond counsel proposals concerning all three of the
issues. I'd like to state that I am not a novice to City
government. I have been both a City director and served on
several commissions during the past 25 years and I am well aware,
I think, of what the rules say and always have tried to abide and
conducted my way in such a way as to be in compliance with not
only the spirit of the rules but also the letter of the rules. I
have reviewed what happened in this particular case concerning
the hiring of bond counsel and I would state that it has been my
experience in serving on the Airport Commission since 1990, which
this Board appointed me to in 1990, that we have always gone
according to a policy that the Airport Commission promulgated
pursuant to FAA regulations and pursuant and consistent with
Arkansas State law and with the Board of Directors ordinances
that you have passed. I've always thought that we complied with
those and that we certainly went beyond what was expected of us.
It has been my experience since I've been on the Board that we've
always complied with what we considered to be a duty to include
diverse people and coming in ( ?) for our contracts. That
includes underwriters, bond counsel and other people who do work
at the Airport. We have generally informed people who are doing
business for the Airport that we expect them to have an attitude
that they would involve disadvantaged businesses or minorities,
which usually in this case means blacks and in some cases women.
We have consistently adhered to that and have always voted on
these issues when they came before us in a fair way. I would
like to refer specifically to when we went into the process of
selecting bond counsel for the 184 and 185 refunding, which we
did in 1994. That was around May and June of 1994 that we went
through the process and Susan Fleming of Stephens was our
Financial Advisor on this along with another company called
Unison, which is a minority firm that also works along with
Stephens to do the financial advising to the Airport Commission.
When we put out our RFP we made it clear that we were going to
hire minority underwriters and minority bond counsel, that we
were going to have co- underwriters and co -bond counsel. In my
review of the Minutes and my review of the tapes concerning the
selection of bond counsel indicated to me on that refunding that
there were 6 or 7 majority firms, what I consider to be white
firms, they were all local firms. There was only one minority
firm that submitted an application and appeared before the
selection commission and the Airport Commission. That was Mays
and Crutcher. At no time during our deliberations was there any
discussion about the hiring of Mays and Crutcher. I think
everyone that was involved in the process including
representatives of the City, at that time I think Brenda Donald
was your representative, assumed that if they were the only firm
to apply that there was no need to discuss them. There was some
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August 8, 1995
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discussion about the majority firms, but it was eventually
decided that since Wright, Lindsey & Jennings had proposed
minority participation that they would be the most qualified one
to receive the bond counsel work or the co -bond counsel work.
There was at no time any attempt by me to influence any of my
fellow commissioners or any people who served on the selection
committee to consider Mays and Crutcher. They were just a non -
issue. We didn't discuss them at all. The recommendation was
made by the selection commission that we hire co -bond counsel
Wright, Lindsey & Jennings and Mays & Crutcher, and that was done
and the financial advisor, subsequently to that June decision, in
September of 194 advised us that to take advantage of the cost
savings that we should have the same team to represent us in the
185 refunding and we all agreed to do that without any discussion
about Mays & Crutcher. Now when we came to the 195 PFC, and I've
sent Board Members the Minutes so that you can look at them,
there was a selection process started again for underwriters and
co -bond counsel. Once again the only minority firm that applied
was Mays and Crutcher. There were 5 majority firms that applied.
Three of those 5 majority firms indicated that they would
probably associate with Mays & Crutcher as minority counsel. We
never discussed the hiring of minority counsel. We did have
quite intensive discussions about which majority firms would be
hired and it really came down to 3 majority firms being
considered, with the strong competition being between two of
those majority firms. In this process there was never any
discussion about the minority firm. There was never any attempt
to sway any of the commissioners or anyone that we should hire
Mays & Crutcher. It was just not discussed because they were the
only minority firm that had appeared and certainly I did not say
anything one way or another about their participation. When we
went into the regular meeting on May 30 of 1995, the only
discussion at that meeting was which of the two firms would be
hired between Williams & Anderson and Wright, Lindsey & Jennings.
Williams & Anderson received 3 of the votes and Wright, Lindsey &
Jennings received 1 vote. There was one commissioner who was not
present. We did not discuss the hiring of a minority counsel
during the meeting. At the June 14 meeting it was noted that we
had not hired a minority counsel and that since everyone was in
agreement that Mays & Crutcher would be hired, then they were
hired at that meeting as minority co -bond counsel. There was no
debate about that and there was no discussion about that. It was
accepted that since they were the only firm that they would be
hired. Now I do not believe that I have done anything that's a
conflict of interest, but I understand that there is some concern
not only from this Board but from my fellow commissioners.
Certainly if that appearance that I could be unfair, in the next
deliberations concerning minority counsels, I will not
participate in the selection of minority counsel. The truth of
the matter is if there had been competition from minority counsel
it would have probably become apparent to me that I had a
relationship with Richard Mays which not only is business but an
extremely personnel relationship. I'm the godfather of his
children. He's the godfather of mine. I realize that could
present problems for people that were competing with him in which
I was a decision maker, but there was no competition for his
position so there was no discussion so there was no need for me
to advocate for him and if that had happened I am sure it would
have become apparent to me, if not from the people that were
competing with him, that probably I should not participate. But
hind sight is always 20/20, and those facts did not occur. There
was never any discussion of Mays & Crutcher. The City Attorney's
report indicates that my vote was crucial in the hiring of Mays &
Crutcher. That is not a fact. There was never a vote on Mays &
Crutcher that was not unanimous, because they were the only
minority firm applying. I wanted to appear before you to give
you those facts and to state what my position is. I am a member
of this community. I plan to remain a member of this community.
I plan to be active in this community. I am not going to shrink
away from what I consider an obligation and responsibility to
participate. I do not want to do anything that brings any
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August 8, 1995
reflection of impropriety upon any body that I serve and I will
not do that. But I do not believe that this issue has been
treated fairly in the context of what the facts are and I thought
it appropriate for me to respond to you to let you know as the
body that appointed me to the Airport Commission that I am going
to continue to serve in the highest standard and in the best
possible way that I can. But I do want you to know that I do not
think that I have done anything illegal or improper in the
selection of co -bond counsel. That Richard Mays as a member of
Mays & Crutcher was never an issue as to whether or not he would
be bond counsel. I receive no income from Mays & Crutcher. I'm
not a part of that law firm. I've never been and I will not
pretend to be. Whatever other things that have happened to give
that perception have been totally erroneous and have been
explained. The underwriters' counsel has given an opinion that
there was no material adverse impact upon these bonds by the so-
called relationship between Richard Mays and myself. And, Mr.
Mayor, I wanted to appear before you and the other members of the
Board to let you know my side because I did not want the
allegations and accusations to go without at least you having a
response from me. I appreciate the opportunity to speak to you.
Thank you very much."
There were no comments or questions by the Board of
Directors.
There being no further business to be presented, the
reconvened meeting was adjourned at 4:35 o'clock P.M. with the
Board of Directors to meet again in regular session on Tuesday,
August 15, 1995, at 6:00 o'clock P.M.
ATTEST:
City Clerk Robbie Hancock
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APPROVED:
gMyor Jim Daile