Loading...
HomeMy WebLinkAboutRes1996-101 , , , Sponsored by: Garzini CITY OF SEWARD, ALASKA RESOLUTION NO. 96-101 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, APPROVING A FINANCIAL ADVISORY AGREEMENT WITH PUBLIC FINANCE MANAGEMENT, INC. WHEREAS, the City of Seward currently has a contract with Coastal Securities Ltd. for financial advisory services; and WHEREAS, the City's accounts have been handled exclusively by Coastal Securities Partner Don Grimes since the early 1980's when the City obtained financing for the Spring Creek Correctional Center; and WHEREAS, Grimes has recently left Coastal Securities and has joined Public Financial Management, Inc., in Austin, Texas, as a Senior Managing Consultant; and WHEREAS, Grimes will continue to offer financial advisory services in Alaska under his new affiliation and has expressed a desire to continue to represent the City of Seward under an agreement similar to the one we currently have in place with Coastal Securities; and WHEREAS, the City's agreement with Coastal Securities provides that the City may terminate the agreement upon 30 day's notice; and WHEREAS, Coastal Securities understands the City's desire to remain with Don Grimes and was only in the Alaska market because of the Alaska clients Grimes brought to the firm; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The City Manager is hereby authorized to issue to Coastal Securities, Ltd., a notice of termination as provided under the City's financial advisory services agreement. Section 2. The City Manager is further authorized to enter into a financial advisory services agreement with Public Financial Management, Inc., on behalf of the City of Seward. A copy of the contract is attached and incorporated herein by reference. Section 3. This resolution shall take effect immediately upon its adoption. PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this 12th day of August, 1996. CITY OF SEWARD, ALASKA RESOLUTION NO. 96-101 THE CITY OF SEWARD, ALASKA ~~~ ouis A. Jkncardino, ayor AYES: NOES: ABSENT: ABSTAIN: Anderson, Bencardino, Crane, Deeter, Keil, King, Sieminski None None None ATTEST: , , , FINANCIAL ADVISORY CONTRACT Date: July 22, 1996 To: Honorable Mayor and Council Members City of Seward, Alaska City Hall P. O. Box 167 Seward, Alaska 99664 Attn.: Mr. Ronald A. Garzini, City Manager Ladies and Gentlemen: 1. Public Financial Management, Inc. (hereinafter referred to as "PFM") understands that the City of Seward, Alaska (hereinafter referred to as the "Issuer") is contemplating the issuance of securities of various kinds, in various amounts and for various purposes (hereinafter referred to collectively as the "Debt Instruments), In connection with the issuance of these Debt Instruments you have requested this proposal from us to perform professional services in the capacity of Financial Advisor. 2. By this proposal, PFM offers its professional services and facilities as Financial Advisor for the issuance and sale of the above-described Debt Instruments, and in that capacity PFM agrees to perform the following duties, and to perform such other duties, as, in its judgment may be necessary or advisable: a. We will make a survey of the financial resources of the Issuer to determine the extent of its borrowing capacity. This survey will include an analysis of the existing debt structure as compared to existing and projected sources of income which may be pledged to secure payment of debt service, and where appropriate, will include a study of the trend of the assessed valuation of the Issuer, the Issuer's taxing power, and the present and estimated future taxing requirements. If the revenues of a system or facility are to be pledged to repayment of the Debt Instruments under consideration, the survey will take into account any outstanding obligations which are payable from the net revenues thereof, additional net revenues to arise from any proposed rate increase, and the additional net revenues as projected by your consulting engineers as a result of the improvements to be financed by the Debt Instruments under consideration. We will also take into City of Seward, Alaska Page 1 of7 account future financing needs and operations of the Issuer as projected by staff and/or consulting engineers and other experts. b. On the basis of the information developed by the survey described in the above and foregoing paragraph, and on the basis of other information and experience available to us, we will submit our recommendations on the financing under consideration. Our plan will include recommendations as to method of sale, the date of issue, interest payment dates, schedule of principal maturities, options of prior payment, and any other necessary additional security provisions designed to make the issue more attractive to investors. All recommendations will be based on our best professional judgment, with the goal of designing Debt Instruments which can be sold under terms most advantageous to Issuer, and at the lowest interest cost consistent with all other considerations. c. We will advise you of current bond market conditions, forthcoming bond issues, and other general information and economic data which might normally be expected to influence the interest rates or bidding conditions, so that the date for the sale of the Debt Instruments can be set at a time, which, in our opinion will be favorable. d. If it is necessary to hold an election to authorize the Debt Instruments, we will, under the direction of the bond attorneys, assist in coordinating the assembly and transmittal to the bond attorneys of such data as may be required for the preparation of the necessary resolutions, notices and certificates in connection with the election. e. We will assist you in your preparation and submission of the Official Notice of Sale, the Official Statement or Offering Statement, and such other market documents as may be required. We will submit to you all such offering documents, including the Official Statement, for your proper examination and approval. After your examination and approval of all offering documents, including the Official Statement, we will obtain a supply of such documents for you and shall mail a set of the same to a list of prospective purchasers, a copy of which list shall be submitted to you upon request. f. We will make recommendations to the Issuer on the matter of bond rating agencies for the proposed issue and when directed by you shall coordinate the preparation of such information as in our opinion is required for submission to the rating agencies. In those cases where the advisability of personal presentation of information to the bond rating agencies may be indicated, we will arrange for such personal presentation. City of Seward, Alaska Page 2 of7 , g. If the Debt Instruments are to be sold at public sale we will disseminate information to prospective bidders, we will organize such information meetings as in our judgment may be necessary, and will work with prospective bidders to assist them in timely submitting proper bids (on an Official Bid Form which we will prepare). We will assist you at the bond sale for the purpose of coordinating the receipt of bids, and the furnishing of good faith checks where indicated, and for the purpose of tabulation and comparison of bids, and will advise you as to the best bid, and will provide our recommendation as to acceptance or rejection of such bid. , If the Debt Instruments are to be sold by negotiated sale, we will recommend one or more investment banking firms as managers of an underwriting syndicate for the purpose of negotiating the purchase of the Debt Instruments and in no event will we participate either directly or indirectly in the underwriting of the Debt Instruments sold by negotiation. We will cooperate with any managing underwriter selected and counsel to the underwriters in the preparation of the Official Statement or Offering Memorandum. We will cooperate with the underwriters in obtaining any Blue Sky Memorandum and Legal Investment Survey, preparing Bond Purchase Contract, Underwriters Agreement and any other related documents. The costs thereof, including the printing of the documents, will be paid for in accordance with the terms of your agreement with the underwriters. h. We will act as your agent in arranging for the printing of the Debt Instruments, and will submit same for execution by the appropriate officials, it being understood that title to and ownership of the printed Debt Instruments shall be in the Issuer until they are delivered to the purchaser. 1. As soon as a bid for the Debt Instruments or a purchase contract shall be accepted by you, we will proceed to coordinate the efforts of all concerned to the end that the bonds may be delivered and paid for as expeditiously as possible. We shall assist you in the preparation or verification of final closing figures, and when requested, will provide suggestions on a program of temporary investment of bond proceeds, in consultation with your architect or consulting engineer. consistent with the construction timetable for the project. J. After closing we will deliver to you and your paying agent(s) definitive debt records, including a schedule of semi-annual debt service requirements on the obligation being delivered to the purchaser. , City of Seward, Alaska Page 3 of7 k. In the event formal verification by an independent auditor of any calculations incident to the Debt Instruments is required, we will make arrangements for such services at your expense. 1. We will attend any and all meetings of the governing body of the Issuer, its staff. representatives or committees, as requested at all times, when we may be of assistance or service and the subject of financing is to be discussed. m. We will advise the Issuer and its staff of changes, proposed or enacted, in Federal and State laws and regulations which would affect the municipal bond market. n. We will work with the Issuer, its staff and any consultants employed by the Issuer in developing financial feasibility studies and analyzing alternative financing plans. 3. In addition to the services set out above, we agree to provide the following services when so requested: a. We will provide our advice as to the investment of certain funds of the Issuer. We will, when so directed, purchase those investments authorized to be purchased and we will charge a normal and customary commission for each such transaction. b. We will provide our advice and assistance with regard to exercising any call and/or refunding of any outstanding Debt Instrument. c. We will provide our advice and assistance in the development of, and financing for, any capital improvements programs of the Issuer. d. We will provide our advice and assistance in the development of the long-range financing plan of the Issuer. e. We will provide any other financial planning services as may be requested by the Issuer. 4. We agree to direct and coordinate the entire program of financing herein contemplated. In that connection we propose to work with a firm of nationally-recognized municipal bond attorneys selected by the Issuer who will prepare the proceedings and advise the steps necessary to be taken to issue the Debt Instruments and who will issue an opinion City of Seward, Alaska Page 4 of7 , , , approving their legality. We will maintain liaison with this firm of bond attorneys and shall assist in all financial advisory aspects involved in the preparation of appropriate legal proceedings and documents. Where the issuance and sale of the Debt Instruments, and construction of the project under consideration, requires the approval of any state or governmental agency, we shall assist you in the preparation of all financial information required for inclusion in applications for such approval. and when requested by you, shall appear on your behalf to provide appropriate testimony at public hearings before state and other governmental commissions and boards. 5. In consideration for the services rendered by us in connection with the issuance and sale of the above-described Debt Instruments it is understood and agreed that our fee will be as follows: A base fee of $10,000 for each issue of Debt Instruments plus an additional $1.25 per $1.000 (1/8 of 1%) of Debt Instruments issued. When two or more issues are marketed and delivered simultaneously and are substantially the same credit, such issues will be billed as one series. Charges for Bond Bank issues may be reduced by mutual agreement, to an amount not less than 50% of the above formula amount. All expenses not previously recovered from the Issuer will be reimbursable upon delivery of an issue of Debt Instruments. Such expenses shall include all reasonable travel expenses and other out- of-pocket expenses incurred on behalf of the Issuer. For services rendered which do not relate to the issuance of Debt Instruments, we will make ourselves available at standard hourly rates being charged other Alaska clients (currently $190 per hour for Managing Director's or Senior Managing Consultant's time, $100 per hour for Consultant's time and no charge for Associate's time). City of Seward, Alaska Page 5 of7 It is specifically understood and agreed that the Issuer will be responsible for all issuance expenses, including but not limited to the following: Fee of bond counsel, fees of paying agent bank, pnntmg and distribution of Official Statement and accompanying documents, reports of independent consultants, rating fees, travel expenses, printing and delivery of Debt Instruments. 6. In the event any bond election be necessary, if such election shall fail, no fee will be due us; however, should the same or similar propositions again be submitted to election held within 24 months from the date of the unsuccessful election, then at our option the agreement covered by this proposal shall apply to any such Debt Instruments. 7. It is further understood and agreed that PFM will not be permitted to bid for the Debt Instruments when offered for public sale. 8. This Agreement shall remain in force until such time as either party exercises its option to terminate this agreement, with or without cause, upon thirty days' notice. Upon termination, only reimbursable costs incurred by PFM and payment for any fees due shall be paid to PFM. 9. In addition to the terms and obligations herein contained, this proposal and agreement is subject to the following special conditions: None. 10. This proposal is submitted in duplicate originals. When accepted by Issuer it will constitute the entire agreement between Issuer and PFM for the purpose and considerations herein specified. Your acceptance will be indicated by proper signatures of your authorized officers or representatives on both copies and the returning of one executed copy to us. City of Seward, Alaska Page 60f7 , Respectfully submitted, PUBLIC FINANCIAL MANAGEMENT, INC. BY~.(sv.~ Don W. Grimes Senior Managing Consultant ACCEPTANCE ACCEPTED on this /3 -Ht day of /1iAGt..t.JS7"' , ~t\.ti~t:.7!t!;, ..'t~\.t _ C":: r -. < ~ .11'./"''- (0-., .....4. .... .... "" /~,. ~, ..' ~ ~ . '... .f' (j:"{SEAL) ) ~-:. 1'. . \ .... ... : ' l wi I ~ ~ .. I~ . ~ ;": :) ;, .~ : .. ... ^ Q .. .. '. ......'''','.:1 , -. --._.":. .- ....~ ,1996. CITY OF SEWARD, ALASKA BYP6W~ Ron A. Garzml C y Manager City of Seward, Alaska Page 70f7