The New York City Department of Law, in a memo to Mayor David N. Dinkins last week, renamed Brown & Wood as the city's bond counsel.

In addition, the department proposed that Barnes & Darby, a minority-owned firm, serve as co-bond counsel. Lord Day & Lord, Barrett Smith was renamed disclosure counsel.

Rogers & Wells was named underwriter's counsel, and Wood Williams Ralfalsky & Harris, a minority-owned firm, was suggested for co-underwriter's counsel.

Rogers & Wells also was recommended for counsel for the city's certificates of participation program, and Orrick, Herrington & Sutcliffe was recommended for underwriters' counsel.

The department also suggested the appointment of a number of law firms to other posts. Mudge Rose Guthrie Alexander & Ferdon was named bond counsel to the New York City Water Finance Authority, and Barnes & Darby was named underwriters' counsel.

The firm of Wood Williams Rafalsky & Harris was also named bond counsel to the New York City Health and Hospitals Corp., which is in the process of seeking underwriters. Orrick, Herrington & Sutcliffe was named underwriter's counsel; Rogers & Wells was named bond counsel to the hospital.

The firm of Hawkins, Delafield & Wood was named bond counsel to the New York City Housing and Development Corp. Wilkie Farr & Gallagher was named underwriters's counsel.

And Orrick, Herrington & Sutcliffe was named bond counsel to the Trust for Cultural Resources of the City of New York. Willkie Farr & Gallagher was named underwriter's counsel, and Mudge Rose Guthrie Alexander & Ferdon was named special counsel.

Victor Kovner, corporation counsel to the city, in the memo says, "I believe these recommendations will provide for an appropriately balanced use of the city's most experienced and talented firms with expertise in public finance.

"In addition, these recommendations will provide experienced New York-based minority-owned firms with the opportunity to play a major role in city and city-related financings."

While the law department's recommendations are considered almost final, a procurement policy hearing must still be held.

The recommendation selection process was not without some controversy, according to sources familiar with the interview process.

In an oral hearing for bond counsel before the selection panel, at which the city specifically requested in the request for proposals that the law firms making the oral presentations not put anything in writing, at least two of the law firms said they could not give the city clean legal opinions on its bond offerings.

The two firms, which have served as bond counsel for a number of issuers in New York, told city officials it was their opinion that the city was violating the state constitution, according to sources familiar with -- and present at -- the presentation.

The firms, Hawkins Delafield and LeBoeuf, Lamb, Leiby & MacRae, told the city that the method its uses to structure its debt repayment does not comply with the state constitution, according to legal sources and city officials who wished to remain anonymous.

But city officials have argued that the method of repayment is legal. A senior city official said, "It is not cut and dry in either direction. We feel comfortable with the interpretation of the state constitution that we have been using for the last several years. the stat comptroller has signed off on the bond deals. It has been approved by Brown & Wood, and Rogers & Wells before that."

A spokeswoman for the city comptroller said, "We have legal research from the city's Office of Management and Budget, the city comptroller, the former bond counsel, Rogers and Wells, the current bond counsel, Brown and Wood, and the city's law department," that supports the way the city has been structuring its debt repayments.

As for the opinions of the two law firms, the spokeswoman said, "All I can say is that we have a great body of legal research behind us that says the way we structure debt repayment is quite within the laws."

Marvin Nailor, a spokesman for the state comptroller, said the office would look into the questions about the city's repayment schedule.

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