DARSWEIL L. ROGERS, COMMISSIONER FAYETTEVILLE PUBLIC WORKS COMMISION ‘WADE. FOWLER, JR- COMMISSIONER 58 ‘OLD WILMINGTON RD EVELYN. SHAW, COMMISSIONER 7.6K ne (0, RALPH HUFF, il, COMMISSIONER He FAYETTEVILLE, NORTH CAROLINA 28302-4 ELAR BALL, CEOUENERAL MANAGER TELEPHWE Nd t abt WWHLFAYPWC.COM December 16, 2020 ‘eff Jenking, Periner Bemhard Capital Partners Management, LP 400 Convention Street, Suite 1010 Baton Rouge, LA 70802 Re: Non-Binding Letter of itent Relating lv Proposed Concession Agreement Dear Mr. Jenkins: | have received and discussed with my fellow Commissioners and our staff your December 7, 2020 correspondence and the proposed Letter of Intent (attached). As | believe you are aware, following Bemhard Capital Partners Management. LP's (‘Bemhard’s") presentation regarding a proposed concession arrangement at a joint closed session ofthe Fayettevile Public Works Commission (PWC) tnd tho City Council of the City of Fayetteville on December 1. 2020, PANO requested from Demherd the following: (1) a copy of the presentation; (2) access to the financial model on which the ‘concession financing structure would be Dased; and (3) detailed information about the govemance ralationshins ofthe antes identified In tha presentation Ta date, PWC: has received only a copy of the presentation, even though PWC and Bernhard previously executed a nondisclosure agreement that allows Bernhard to submit to PWC confidentially any documents and files that qualify as trade secret information. PWC remains unable to evaluate Bernhard's proposal, and we therefore also remain unable to determine whether Bemhard's proposal would serve the best interest of the City of Fayetteville and our customers in the long term. As a result, we find Bernhard's submission of a proposed Letter of Intent at this time to be, respectfully, premature and not able to pass prudency standards for utility governance in decision making. PWC Is unable to enter into me proposed Letter of intent. However, we appreciate Bernhard’s interest in working with PWC. ec: The Honorable Mitch Cotvin, Mayor . Ralph Hulf, Il, Commissioner Darsweil Rogers, Commissioner Evelyn O. Shaw, Commissioner Elaina L. Ball, CEO/General Manager BUILDING COMMUNITY CONNECTIONS SINCE 1905 AN EQUAL EMPLOYMENT OPPORTUNITY EMPLOYERKC FAYETTEVILLE! OFFICE OF THE MAYOR March 16, 2021 Wade Fowler Chairman Fayetteville Public Works Commission 955 Old Wilmington Road Fayetteville, North Carolina 28301 Blaina Ball CEO/General Manager Fayetteville Public Works Commission 955 Old Wilmington Road Fayetteville, North Carolina 28301 Dear Chairman Fowler and Ms, Ball ‘The purpose of this letter is to follow up on our discussion at our March 8, 2021 meeting which included City Manager Doug Hewett and the March 7, 2021 letter all of us received from Jeff Jenkins at Bernhard Capital Partners (“Bernhard”), I have carefully considered the information shared with Mr. Hewett and me during your March 8® presentation regarding Bernhard’ proposal to PWC and the City to enter into a concession arrangement, as well as information that the PWC Commissioners have shared with individual members of City Council Regarding your March 8" presentation, I understood from you that information you shared was PWC's analysis of Betnhard’s proposed December 7, 2020 Letter of Intent (“LOI”). A literal reading of the LOL states that the proposal made by Bernhard is preliminary and 2 final proposal will only be made by Bemhard after they have completed their due diligence of PWC, which is dependent upon PWC and the City providing Bernhard with certain financial and other information reasonably necessary for them to complete their analysis. I understand that PWC requested that Bernhard provide you with their financial model regarding the proposed transaction, which they have done. If my understanding regarding the above is incorrect, please advise Mr. Hewett and me immediately as to your specific points of difference. Also, I gleaned from your presentation that PWC developed certain financial models relating to the proposed concession arrangement which I assume are based, at least in part, upon the information Bernhard provided to you. It would scem logical that if Bernhard’s proposal is preliminary, then PWC’s financial ‘models and any resulting assumptions by PWC and its consultant are likewise preliminary. As stated above, please advise Mr. Hewett and me immediately if you believe that any aspect of the above is incorrect and ‘your specific points of difference, As Ladvised you during our meeting, City Council has authorized the engagement of a consultant/valuation firm to review and advise City Council as to the faimess of any definitive proposal from Bemhard, Each ‘member of City Council will then use their own judgment as to whether the transaction proposed is fair to 433 Hay Street | Fayetteville, NC 28301 | www.fayettevillenc.gov | An Equal Opportunity EmployerWade Fowler, Chairman Elaina Ball, CEO/General Manager Fayetteville Public Works Commission March 16, 2021 Page 2 the City and its residents. ‘Therefore, I am requesting that Ms. Ball coordinate the immediate delivery to the City of the following relating to the proposed concession arrangement: (1) Bernhard’s financial model with supporting detail, if any; (2) PWC’s financial model with supporting detail; and (3) the report of PWC’s consultant which was shared with the individual members of City County, Mr. Hewett and myself. If you haven't already done so as Mr. Jenkins’ recent letter to each of you and me suggests, please provide them and Mr. Hewett with the information requested | appreciate your anticipated cooperation and look forward to working with you to determine if the proposals under consideration regarding the concession arrangement make sense for the City of Fayetteville, its residents and rate payers. Please contact Mr. Hewett or me with any questions regarding this request. Sincerely, Mitch Colvin Mayor cc: Doug Hewett, City Menager Jay Toland, CFOse ae See seen 5 FATETEVLE PUBL WOR cous DLRALPH HF, COMMISSIONER. He IN UTILITY FAVETTEVILE, NORTH CAROLINA 30219 BLANAL OAL, CEOIOENERAL MANAGER ets poy ae-et ‘wine Sd MIAEMAIL MColvin@ci.fav.nc.us March 18, 2021 Mayor Mitch Colvin City of Fayetteville 433 Hay Stucet Fayetteville, NC 28301 Re: Correspondence Received 3/17/21 Regarding an Unsolicited Concession Offer to Operate PWC for Dear Mayor Colvin: The purpose of this letter is to respond to your leller reveived yesterday, 3/17/21, regarding analysis and information requests regarding an unsolicited/non-competed matter by a capital investment firm. I have recsived and discussed with my fellow Commissioners und our staff your correspondence. PWC conducted an analysis following a joint closed session of the Fayetteville Public Works Commission (PWC) and the City Council of the City of Fayetteville on December 1, 2020. The analysis 1s derived trom material provided to both the City of Fayetteville and the PWC at the joint session and subsequent information provided to both entities. Given that this ‘matter has been presented to the full City Council, our response to your correspondence is being provided to the full Council to assist in the conversation around this matter. The material provided to PWC and the City of Fayetteville indicated this information was preliminary in nature, ‘The qualifier of being preliminary does not impede PWC from analyzing the matter. PWC developed and paid for a financial analysis of the unsolicited and non-competed matter to comply with dic organization's need for fiscal responsibility, due diligence, and policy prudency. PWC recognizes this proprietary analysis for its importance to future decisions. It is, in our estimation, an essential tool for our internal evaluation of the self-described “preliminary” matter. Hence, PWC considers this analysis proprietary. It is, as well, useful for the framework to which subsequent offers from this investment firm or others may be applied. On your information requests, while the investment firm has already shown you their financial model in the joint meeting held on January 15, 2021 between PWC and the investment firm and at which you and Council Member Davis were in aliendance, PWC cannot comply with your request. The capital investment firm may decide to share their financial model with you at the City, but itis not PWC’s to share. Since this is unsolicited in nature and in conformance to procurement standards, PWC is not required to turn over such information requested by you (in BUILDING COMMUNITY CONNECTIONS SINCE 1905 AN EQUAL EMPLOYMENT OPPORTUNITY EMPLOYERPage? ‘Re: Correspondence Received 3/17/21 Regarding an Unsolicited Concession Offer to Operate PWC for your letter following the three information requests you have made) Ww the investment firm. Additionally, it is an uncommon and potentially harmful negotiating strategy to turn over the complete analysis of an unsolicited offer to a counterparty, should the Commissioners of PWC. Ucteumine that continued discussions occur. Please also be aware that PWC is required to notify the investment firm af information requests related to their concession offer and will do so today. PWC has provided the investment firm with the utility’s operations and ‘maintenance projections, power supply costs, and capital expenditure plan, These three items, along with other available information including with the investment firm’s financing and rate csoumptions will create the revenue requitcuicut aud dieir assumpuons on liquidity targets will create the debt and cash balances. As of the date of this correspondence, the investment firm has yet to respond to our recent communications on this matter. Reiterating basic concepts of cost of Service, the information provided to the investment firm from PWC is sufficient, PWC is unable to enter into a commitment st this time. Hawever, we appreciate the investment firm’s interest in working with the City of Fayetteville and PWC. Very truly yours, a WORKS COMMISSION Wade R. Fowler, Jr. Chairman cc: Darsweil Rogers, Commissioner Evelyn O. Shaw, Commissioner Blaina L. Ball, CEO/Gcneral Manager City of Fayetteville City CouncilJames West. From: Jeff Yuknis Sent: Tuesday, May 19, 2020 9:42 PM To: Joe Eason; James West; Lucie Kantrow cc rsullivan@statefederalstrategies.com Subject: RE: BCP FPWC NDA and Concession Discussion ‘Attachments: Summary Process Overview.pdf ‘CAUTION: External Email A few updates. Jeff 4. The NDAs in process with Lucie and she willbe discussing with the Nelson Mullins team tomorrow morning prior to a turnaround to you soon thereafter. 2. lasked lefferies (our Banker/Advisor) to Work up @ nign level process uiagiam that begins to outline the novt ouple montha. Thot draft ic attached. Natahly we are already well down the path on “Initial Engagement and Due Diligence”. +3. Also in process with Julius of our team and Jefferies i a refined and detalled due diligence list under the phases ‘we briefly discussed yesterday, The Bernhard Capital Overview, experience and team biographies is drafted. | would like to walk you through it this week, Original Appointment——- From: Jeff Yuknis Sent: Sunday, May 17, 2020 3:14 PM To: Jeff Yuknis; Joe Eason; James West; Lucie Kantrow ‘Subject: NDA and Cunvessivn Discussion ‘When: Monday, May 18, 2020 1:00 PM-2:00 PM (UTC-06:00) Central Time (US & Canada).James West o_oeme——— Jeff Yuknis ‘Wednesday, September 23, 2020 5:40 PM James West; Joe Eason Ideas on Concession Structure 2020.09.22 Fayerteville Project ideas for Structures 4148-5617-3863 v2 - 4833-1518-7404 4docx ‘CAUTION: Evierral Ena Jamie, As discussed. I Ure PWC was inclined to determine that " Urrick and Nelson, Mullins worked with us on the attached structural ideas. We certainly look forward to the opportunity to further discuss any and all with you. Jeff Get Outlook for This message is intended only for the usc of the individual or entity to which it is addressed, and may contain inform ation that is privileged, confidential and exempt from disclosure under applicable law. Any review. retransmission. dis semination or other use of, or taking of any action in reliance upon, this information by persons or entities other tha ‘nthe intended recipient is prohibited. if you receive this in error, please contact the sender and delete the material f am all computers(oy ty die oe aes EERE PS ieee NOISSNDSIG NOISSAS qg4sSO1) IVWLIidvVDd GUVHNYAg ALTILLA NMO. H actopleyuseg ym eseyd }X9U 0} 06 0} JOYJOYM Sploap O} UO!SS|WLWOD JO} Ss! days }XON jlounog A\lD UM UOISSas PSsold jUIOf Pjoy 0} paploep SJeUOIssILLOD OMd 0} Jeyo Arewwns e papiaoid preyuseg 0zOz Jequiaydas pueyuleg UM UOoH}eWUOJUI BuUeYs O/AA\d 6LOZ JEQUIAON BOUuIS JBUOISSILULIOD Od Pue Siaquajy JOUNOD/JJe}s AUD YM Buse AloJonposul Ue pey pleyoeg BLOZ suNr sous jediounu UI JSBAU! 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JNsel UIM pseyuoeg 0} sjuaLUAed jeloUeUY JayjO pue SjaAg| ]Gap peseaiOU| « (soueoiny) Xa jelouBUY SUIeJUIEL Od < (Buyes vy) Sayed Jomo] Ajueoyiubis ye Ayn ayy Jo spaau ainjny soUeUY Oo} BIGe OMd < Buyseau! Ayjyn jediounw jo pooas Oe} OU sey pyeyag <« 4290 94} JO ae s90uednd90 pejadxeun Jayyeam o} AjAjioeded yqap Jo uoljjiw pyZ$ 0} dn epiaoid Pjnoo siy} (seseasou! xe} JOU) sPUuog OH Mau Jo} siseq se (“IA/%p Ajueund) yyMos6 {Old 40/PUe LO TId Buijsixe yo6se} pinoo AyD + syoaloid Jo} spuny asies 0} Ajjoeces gap Buysixe asp (senuane) sees AjI/I]N poseesou! pue aseq xe} MO16 — s}yauaq jUuIOf ancy yeu} SOANENU! U! JUSW}SAAUI }UIO! 10} SaniuModdo puy pue juewdojensp olwouose punoue uo\ssnosip o1aj}eujs JSNqol & Ul Od UM abebuy Jeyo preywag Ueu] J9UjO AjID 0} Uado SaAeUWAyYy < sexe} Bulsies jnoyyIM senusAds @SeSJOU! 0} AID JO SJISSP SpUe}sJapUN UOISSILUWIOD < ALITLLA NMOY HH SDDARSWEIL L ROGERS, COMMISSIONER FAYETTEVILLE PUBLIC WORKS COMMISSION WADE. FOWLER, JR. COMMISSIONER 986 OLD WILMINGTON RO EVELYN 0. SHAW, COMMISSIONER . P20, BOX 1089 ELAINA L BALL, CEOIGENERAL MANAGER HOME, ettevile UTIL! a FAYETTEVILLE, NORTH CAROLINA 28302-1088 TELEPHONE (910) 485-1401 WWW FAYPWe.cOM March 18, 2021 Via US Mail Certified, Return-Receipt Requested, Postage Pre| Bernhard Capital Partners Management, LP Attn: Jeff Jenkins, Partner 400 Convention Street, Suite 1010 Baton Rouge, LA 70802 Re: Notice Pursuant to Nondisclosure Agreement Dear Mr. Jenkins: In accordance with Section 3 of the Nondisclosure Agreement between the Fayetteville Public Works Commission (PWC) and Bemhard Capital Partners Management, LP (BCPM) effective July 29, 2020, please be advised that the Mayor of the City of Fayetteville, pursuant to the attached letter dated March 16, 2021, which was received by PWC on March 17, 2021, has requested from PWC information provided to PWC by BCPM that BCPM has designated as confidential. Sincerely, Fayetteville Public Works Commission By: /s/ Janes 2 West. James P. West, Chief Legal Officer and General Counsel Attachment ce: Elaina Ball, CEO/GM BUILDING COMMUNITY CONNECTIONS SINCE 1905 AN EQUAL E LOYMENT OPPORTUNITY EMPLOYERKC FAYETTEVILLE! OFFICE OF THE MAYOR March 16, 2021 Wade Fowler Chairman Fayetteville Public Works Commission 955 Old Wilmington Road Fayetteville, North Carolina 28301 Blaina Ball CEO/General Manager Fayetteville Public Works Commission 955 Old Wilmington Road Fayetteville, North Carolina 28301 Dear Chairman Fowler and Ms, Ball ‘The purpose of this letter is to follow up on our discussion at our March 8, 2021 meeting which included City Manager Doug Hewett and the March 7, 2021 letter all of us received from Jeff Jenkins at Bernhard Capital Partners (“Bernhard”), I have carefully considered the information shared with Mr. Hewett and me during your March 8® presentation regarding Bemnhard’s proposal to PWC and the City to enter into a concession arrangement, as well as information that the PWC Commissioners have shared with individual members of City Council Regarding your March 8" presentation, I understood from you that information you shared was PWC's analysis of Betnhard’s proposed December 7, 2020 Letter of Intent (“LOI”). A literal reading of the LOL states that the proposal made by Bernhard is preliminary and 2 final proposal will only be made by Bemhard after they have completed their due diligence of PWC, which is dependent upon PWC and the City providing Bernhard with certain financial and other information reasonably necessary for them to complete their analysis. I understand that PWC requested that Bernhard provide you with their financial model regarding the proposed transaction, which they have done. If my understanding regarding the above is incorrect, please advise Mr. Hewett and me immediately as to your specific points of difference. Also, I gleaned from your presentation that PWC developed certain financial models relating to the proposed concession arrangement which I assume are based, at least in part, upon the information Bernhard provided to you. It would scem logical that if Bernhard’s proposal is preliminary, then PWC’s financial ‘models and any resulting assumptions by PWC and its consultant are likewise preliminary. As stated above, please advise Mr. Hewett and me immediately if you believe that any aspect of the above is incorrect and ‘your specific points of difference. As Ladvised you during our meeting, City Council has authorized the engagement of a consultant/valuation firm to review and advise City Council as to the faimess of any definitive proposal from Bemhard, Each ‘member of City Council will then use their own judgment as to whether the transaction proposed is fair to 433 Hay Street | Fayetteville, NC 28301 | www.fayettevillenc.gov | An Equal Opportunity EmployerWade Fowler, Chairman Elaina Ball, CEO/General Manager Fayetteville Public Works Commission March 16, 2021 Page 2 the City and its residents. ‘Therefore, I am requesting that Ms. Ball coordinate the immediate delivery to the City of the following relating to the proposed concession arrangement: (1) Bernhard’s financial model with supporting detail, if any; (2) PWC’s financial model with supporting detail; and (3) the report of PWC’s consultant which was shared with the individual members of City County, Mr. Hewett and myself. If you haven't already done so as Mr. Jenkins’ recent letter to each of you and me suggests, please provide them and Mr. Hewett with the information requested | appreciate your anticipated cooperation and look forward to working with you to determine if the proposals under consideration regarding the concession arrangement make sense for the City of Fayetteville, its residents and rate payers. Please contact Mr. Hewett or me with any questions regarding this request. Sincerely, Mitch Colvin Mayor cc: Doug Hewett, City Menager Jay Toland, CFO