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HomeMy WebLinkAboutResolution - 3096 - Agreement - First Southwest Company - Financial Advisory Services - 05_11_1989Resolution #3096 May 13, 1989 Item #26 DGV:da RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Proposal and Agreement for Financial Advisory Services by and between the City of Lubbock and First Southwest Company, attached herewith, which shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copied herein in detail. Passed by the City Council this 11th day of May , 1989. B.C. McMINN, MAYOR ATTEST: Rane a Boyd, City Secretary APPROVED AS TO CONTENT: �aa-ryr 92� Robert assengale, ssistant City Manager for Financial Services APPROVED AS TO FORM: Ddr(ald G. Vandiver, First Assistant City Attorney PROPOSAL AND AGREEMENT FOR FINANCIAL ADVISORY SERVICES By and Between CITY OF LUBBOCK (Hereinafter referred to as the "Issuer") AND FIRST SOUTHWEST COMPANY It is understood that the Issuer will have under consideration from time to time the authorization and issuance of indebtedness in amounts and forms which cannot be determined and that in connection with the authorization, sale, issuance and delivery of such indebtedness of the Issuer, we have been requested to submit a proposal to provide professional services to the Issuer in the capacity of Financial Advisor. We are pleased to comply with this request and submit the following proposal for consideration. This proposal, if accepted by the Issuer, shall become the agreement (the "Agreement") between the Issuer and First Southwest Company effective at the date of its acceptance as provided for herein below. 1. This Agreement shall apply to any and all evidences of indebtedness or debt obligations that may be authorized and issued or otherwise created or assumed by the Issuer (hereinafter referred to collectively as the "Debt Instruments") from time to time during the period in which this Agreement shall be effective. 2. We agree to provide our professional services and our facilities as Financial Advisor and agree to direct and coordinate all programs of financing as may be considered and authorized during the period in which this agreement shall be effective and to assume and pay those expenses set out in Appendix A, provided, however, that our obligations to pay expenses shall not include any costs incident to litigation, mandamus action, test case or other similar legal actions. 3. We agree to perform the following duties normally performed by such financial advisors and all other duties as, in our judgement, may be necessary or advisable: a. We will conduct a survey of the financial resources of the Issuer to determine the extent of its capacity to authorize, issue and service debt. This survey will include an analysis of the existing debt structure (if any) as compared with the existing and projected sources of revenues which may be pledged to secure payment of debt service, and where appropriate, will include a study of the trend of the assessed valuation, taxing power and present and future taxing requirements of the Issuer. In the event revenues of existing or projected facilities operated by the Issuer are to be pledged to repayment of the Debt Instruments then under consideration, the survey will take into account any outstanding indebtedness payable from the revenues thereof, additional revenues to be available from any proposed rate increases and additional revenues, as projected by consulting engineers employed by the Issuer, resulting from improvements to be financed by the Debt Instruments then under consideration. We will also take into account future financing needs and operations as projected by the Issuer's staff and consulting engineers or other experts, if any, employed by the Issuer. b. On the basis of the information developed by the survey described above, and other information and experience available to us, we will submit to the Issuer our recommendations on the Debt instruments under consideration including such elements as the date of issue, interest payment dates, schedule of principal maturities, options of prior payment, security provisions, and any other additional provisions designed to make the issue attractive to investors. All recommendations will be based upon our professional judgement with the goal of designing Debt Instruments which can be sold under terms most advantageous to the Issuer and at the lowest interest cost consistent with all other considerations. C. We will advise the Issuer of current bond market conditions, forthcoming bond issues and other general information and economic data which might normally be expected to influence interest rates or bidding conditions so that the date of sale of the Debt Instruments may be set at a time which, in our opinion, will be favorable. d. We understand the Issuer has retained, or will retain, a firm of municipal bond attorneys (the "Bond Counsel"). In the event it is necessary to hold an election to authorize the Debt Instruments then under consideration, we will assist in coordinating the assembly and transmittal to Bond Counsel of such data as may be required for the preparation of necessary orders, resolutions, notices and certificates in connection with the election. e. If so directed by Issuer, we will advise and assist you and your other consultants in the preparation and submission of any application for funding made to a State or Federal Agency. Further, if so requested, a representative of this firm shall accompany and assist you and your other consultants in any meetings or hearings before the appropriate agency. f. We will recommend the method of sale of the Debt Instruments that, in our opinion, is in the best interest of the Issuer and will proceed, as directed by the Issuer, with one of the following methods: 1. Advertised Sale: We will supervise the sale of the Debt Instruments at a public sale in accordance with procedures set out herein. We reserve the right, alone or in conjunction with others, to submit a bid for any Debt Instruments issued under this Agreement which the Issuer advertises for competitive bid. In compliance with Rule G-23 of the Municipal Securities Rulemaking Board, we will request consent to bid in writing, in any instance where we elect to bid, prior to submitting a bid for each installment of Debt Instruments. 2. 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. We will collaborate 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 by the underwriters. In the event of a negotiated sale of Debt Instruments to a depository bank of the City or other local bank, we will prepare and provide to the prospective purchasers a Limited Offering Memorandum. 3. Private Placement: Upon authorization by the Issuer and acting in its behalf, we will place privately the Debt Instruments directly with institutional investors for a placement fee of $7.50 per $1,000 par value of Debt -2- Instruments issued and placed, which fee will be in addition to the fees set forth in Appendix A attached hereto. We will prepare and provide to the prospective purchasers a Limited Offering Memorandum and other related documents. It is understood and agreed that the term "Private Placement" does not refer to the negotiated sale of Debt Instruments to a depository bank of the City or other local bank or the sale of Debt Instruments to a State or Federal Agency. g. When appropriate, we will advise financial publications of the forthcoming sale of the Debt Instruments and provide them with all pertinent information. h. We will coordinate the preparation of the Notice of Sale and Bidding Instructions, Official Statement, Official Bid Form and such other documents as may be required. We will submit to the Issuer all such documents for examination, approval and certification. After such examination, approval and certification, we will provide the Issuer with a supply of all such documents sufficient to its needs and will distribute by mail sets of the same to prospective bidders and to banks, life, fire and casualty insurance companies, in counselors and other prospective purchasers of the Debt Instruments. We will also provide sufficient copies of the Official Statement to the purchaser of the Debt Instruments in accordance with the Notice of Sale and Bidding Instructions. i. We will, after consulting with the Issuer, arrange for such reports and opinions of recognized independent consultants we deem necessary and required in the successful marketing of the Debt Instruments. j. Subject to the approval of the Issuer, we will organize and make arrangements for such information meetings as, in our judgement, may be necessary. k. We will make recommendations to the Issuer as to the advisability of obtaining a credit rating, or ratings, for the Debt Instruments and, when directed by the Issuer, we will coordinate the preparation of such information as, in our opinion, is required for submission to the rating agency, or agencies. In those cases where the advisability of personal presentation of information to the rating agency, or agencies, may be indicated, we will arrange for such personal presentation. 1. We will assist the staff of the Issuer at any advertised sale of Debt Instruments in coordinating receipt and tabulation and comparison of bids and we will advise as to the best bid. We will provide the Issuer with our recommendation as to acceptance or rejection of such bid. m. As soon as a bid for the Debt Instruments is accepted by the Issuer, we will proceed to coordinate the efforts of all concerned to the end that the Debt Instruments may be delivered and paid for as expeditiously as possible. We will assist the Issuer in the preparation or verification of final closing figures incident to the delivery of the Debt Instruments. n. We will maintain liaison with Bond Counsel in the preparation of all legal documents pertaining to the authorization, sale and issuance of the Debt Instruments. Bond Counsel will provide a legal opinion as to the legality of the issuance of the Debt Instruments at the time of delivery. o. If requested, we will counsel with the Issuer in the selection of a Paying Agent/Registrar for the Debt Instruments, and we' will assist in the preparation of agreements pertinent to these services and the fees incident thereto. -3- p. 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. q. We agree to do, or cause to be done, all work incident to printing of the Debt Instruments, obtaining as may be required by the Attorney General, registration by the Comptroller of Public Accounts and delivery to the purchaser. r. After the closing of the sale and delivery of the Debt Instruments, we will deliver to the Issuer a schedule of annual debt service requirements on the Debt Instruments. In coordination with Bond Counsel we will assure that the Paying Agent/Registrar has been provided with a copy of the authorizing ordinance, order or resolution. s. 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. t. 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. u. 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. 4. 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 Instruments. 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 plan of the Issuer. e. We will provide any other financing planning services as may be requested by the Issuer. 5. The fee due to First Southwest Company in accordance with Appendix A attached hereto, any other fees as may be mutually agreed and all expenses for which First Southwest Company is entitled to reimbursement, shall become due and payable concurrently with the delivery of the Debt Instruments to the purchaser. This fee does not apply to the advance refunding of any of the Issuer's debt. The fee for advance refunding and payment of associated expenses is to be negotiated separately. 6. This Agreement shall become effective at the date of acceptance by the Issuer set out herein below and remain in effect thereafter for a period of five years from the date of acceptance, provided, however, this Agreement may be terminated with or without cause by the Issuer upon thirty (30) days written notice. In the event of such termination, it is understood and agreed that only the amount due to First Southwest Company for services provided and expenses incurred to the date of termination will be due and payable. No penalty will be assessed for termination of this Agreement. -4- This Agreement is submitted in duplicate originals. When accepted by the Issuer, it, together with Appendix A attached hereto, will constitute the entire Agreement between the Issuer and First Southwest Company for the purposes and the considerations herein specified. Acceptance will be indicated by the signature of authorized officials of the Issuer together with the date of acceptance on both copies and return of one executed copy to First Southwest Company. Respectfully submitted, FIRS U EST CDMP Y i Joe W."Smith Senior Vice President ACCEPTANCE CLAUSE ACCEPTED pursuant to a motion of the City Council of the City of Lubbock on this the 11th day of May , 19 89. C ,/,? e-, & I ayM or, City Lubbock, Texas ATTEST: cl� - City Skrxetary, City of L bock, Texas (SEAL) . -5- APPENDIX A FEE SCHEDULE AND EXPENSE ITEMS In consideration for the services rendered by us, it is understood and agreed that our fee for each issue of Debt Instruments will be as follows: Base Fee - Any Issue $ 3,750.00 Plus $6.50 per $1,000 up to $ 500,000 or a total of $ 7,000.00 for $ 500,000 Bonds; Plus $6.00 per $1,000 next $ 500,000 or a total of $10,000.00 for $ 1,000,000 Bonds; Plus $3.50 per $1,000 next $ 1,500,000 or a total of $15,250.00 for $ 2,500,000 Bonds; Plus $2.50 per $1,000 next $ 2,500,000 or a total of $21,500.00 for $ 5,000,000 Bonds; Plus $2.25 per $1,000 next $ 5,000,000 or a total of $32,750.00 for $10,000,000 Bonds; Plus $1.75 per $1,000 next $10,000,000 or a total of $50,250.00 for $20,000,000 Bonds; Plus $1.25 per $1,000 next $10,000,000 or a total of $62,750.00 for $30,000,000 Bonds; Plus $1.20 per $1,000 next $20,000,000 or a total of $86,750.00 for $50,000,000 Bonds. Fees for revenue issues shall be the amount shown above plus a 10% additional charge. No hourly fee will be charged for any of our services or for the furnishing of any other financial services. Expenses Items Paid By Preparation, printing and distribution of Official Statements and accompanying documents (Advertised Sale) First Southwest Company Bond Counsel fees and charges First Southwest Company Rating Fees Travel of City Officials to Rating Meetings Travel of First Southwest Company representatives including travel to ratings meetings Printing of Debt Instruments Attorney General's examination fee and fees of any other State and Federal Agency Paying Agent/Registrar's fees and charges Election costs - supplies; election ballots election officials salaries; costs of Notice of Election published in newspaper, etc. City City First Southwest Company First Southwest Company City City City -6- Other Possible Expense Items* Expense Items Paid By Reports of Independent Consultants City Information Meetings City Verification of calculations City Delivery of Debt Instruments City *These expense items are unlikely to occur under present circumstances and have not occurred before, but are listed for clarity. -7-