"At its core, this is the sale of an asset," Seltzer said. But, he added, "due to the political overlay, there is a higher level of sensitivity on . . . employee benefits, environmental issues, and employee retention."
One of the city's most politically connected law firms, Ballard declined to say how much it had been paid or how much it expected to bill the city for its work. But the 16 Ballard lawyers who represented the city in negotiations with UIL Holdings Corp. have already brought in hundreds of thousands of dollars. To date, the firm has been paid $555,000 by PGW, according to Pennsylvania Gas Commission records.
The commission said PGW had budgeted $960,000 for Ballard's legal work. Among the firm's lawyers is Ed Rendell, former mayor and Pennsylvania governor.
Seltzer, a Ballard partner who is also a certified public accountant, is a transactional lawyer focusing on mergers and acquisitions and licensing matters for a variety of industries, including professional sports teams and pharmaceutical companies.
Seltzer said the critical issue facing the city in negotiations was minimizing the city's exposure to litigation once the deal was closed. Far more than most asset sales, the deal includes terms that protect the city from complaints it failed to disclose costly liabilities before the transaction was closed.
The proposed contract bars complaints on environmental and labor-and-employment matters, Seltzer said. On other matters, the contract sets a $20 million threshold before a complaint may be lodged, and it caps payouts on such disputes at $100 million, Seltzer said.
The transaction is unusual if only because PGW is one of the nation's last municipally owned utilities. Other big cities in the Northeast long ago sold their gas utilities.
But Seltzer said the auction process also was unusual in that the city got to negotiate with UIL and others after bids were submitted. Each bidder submitted a proposed purchase price and other terms.
Once the city officials had those bids in hand, it went back to a handful of firms that made the final cut, seeking to refine terms, primarily focusing on minimizing disputes after the deal was closed.
Seltzer maintained that feature alone frees up substantial capital for the city, since typically sellers must reserve funds for a time to cover claims.
When the deal was announced, Mayor Nutter said that all PGW employees would be offered employment at UIL, which will have dual headquarters in Philadelphia and New Haven, Conn.
The company has the option of not filling a position if an employee retires or accepts a job elsewhere, but total employment may not dip below 1,350 for three years. PGW currently has about 1,650 employees.
The deal is considered far from done. Some council members have voiced concerns that PGW is too valuable an asset to be sold, and that a sale would be harmful to the city.