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HomeMy WebLinkAboutResolution - 2005-R0527 - Contract - First Southwest Company - Financial Advisory Services - 11/18/2005Resolution No, 2005-RO527 November 18, 2005 Item 5.8 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 a directed to execute for and on behalf of the City of Lubbock, a contract for Cnanc advisory services, by and between the City of Lubbock and First Southwest Company of Lubbock, Texas, and related documents. Said Contract is attached hereto and incorporated in this resolution as if fully set forth herein and shall be included in the minutes of the City Council. Passed by the City Council this ATTEST: Garza, City Secretary APPROVED AS TO CONTENT: Je es,�)Ieftinancia/j—fficer APPROVED AS TO FORM: Xhn M. Knight 1-1 Assistant City Attorney 18th day of November '2005. gs/cedocs/Res-Contract-First Southwest Company Nov. 8, 2005 Resolution No. 2005-RO527 CONTPAC T NO. 5555 FIRST AMENDMENT TO FINANCIAL ADVISORY AGREEMENT WITNESSETH: WHEREAS, the City of Lubbock, Texas (the "Issuer"), and First Southwest Company ("FSC"), previously entered into a certain Financial Advisory Agreement, effective as of September 16, 2004 (the "Agreement"); and WHEREAS, the Issuer and FSC desire to amend the Agreement to provide for additional professional services to be performed through FSC's affiliate First Southwest Asset Management, Inc. ("FSAM"), a duly registered investment advisor, as set forth below. NOW THEREFORE, the Issuer, FSC and FSAM, in consideration of the mutual covenants and agreements contained in the Agreement and those set forth herein, do hereby agree to amend the Agreement as follows: APPENDIX A OTHER SERVICES APPENDIX A of the Agreement shall be amended to provide that the following investment advisory services shall be performed by FSAM:. 1. Provide full-time, discretionary management of the Issuer's investment portfolio within the guidelines of the Issuer's investment policy; 2. Assist in developing and implementing investment strategies that will enhance the portfolio performance under current and anticipated changes in market conditions, cash flow needs, and appropriate state laws of Texas and ordinances, resolutions, and policies of the Issuer; 3. Work with staff to ensure the coordination of investment transactions and the availability of funds as needed; 4. Provide technical and fundamental market research including yield curve analysis and market timing models; 5. Provide executive reporting on the economy and market conditions as they may pertain to the Issuer's investment portfolios; 6. Assist staff in developing ongoing cash flow forecasts; 7. Attend required meetings with Issuer staff and the Audit Committee to report on investment portfolio results; 8. Aid the Issuer in establishing guidelines for selecting financial institutions; 9. Monitor the creditworthiness of financial institutions and investments in the portfolio; L-1969 10. Monitor collateral arrangements; 11. Provide monthly statements that identify performance to policy and to appropriate benchmarks; 12. Review all investment management procedures and documentation and propose improvements in the current program; 13. Propose appropriate internal controls for the entire investment function and assist staff in developing written documentation of those; 14. Review and verify repurchase agreement documentation; 15. Perform a broker/dealer due diligence on all Issuer approved and proposed brokers; 16. Provide monthly performance reports that at a minimum conform to the required reporting under the Public Funds Investment Act; 17. Review and reconcile internal reports to external statements; 18. Assist the Issuer in providing audit information; 19. Provide data necessary to complete arbitrage calculations; and 20. Other mutually -agreed upon procedures and services. The fees due to FSAM for the performance of the investment advisory services set forth above shall be calculated as follows:. In year one, a fixed quarterly fee of $10,000 ($40,000 annually) shall be payable quarterly, in arrears. In the second year, under the terms of the Agreement and this Amendment, the quarterly fee shall be reduced to $9,000. Investment of Certain Bond Proceeds Upon direction of clients, certain bond proceeds may be invested into a competitively bid flexible repurchase agreement ("flex repo"). FSAM will review all available investment options and if it is determined that a flex repo is the best option, we can assist the Issuer with implementation. FSAM, acting as bidding agent on the Issuer's behalf, would then receive a one- time fee, not to exceed $31,000 paid by the winning counter -party to the agreement. This fee represents our compensation for the additional services provided in our role as bidding agent and would be separate from the fixed advisory fee discussed above. The bidding agent fee paid by the winning provider would be fully disclosed to the Issuer. If bond proceeds are not invested in a flex repo and instead invested in other instruments, then FSAM will provide those services at no additional fee. Insurance Insurance Coverages of FSAM Professional Insurance Coverage: FSAM's insurance shall contain a combined single limit of a minimum of $500,000 per occurrence and in the aggregate. Workers' Compensation and Employers Liability Insurance: FSAM shall elect to obtain workers' compensation coverage pursuant to Section 406.002 of the Texas Labor Code. FSAM shall maintain said coverage throughout the term of this contract and shall comply with all provision of Title 5 of the Texas Labor Code to ensure that FSAM maintains said coverage. Any termination of workers' compensation insurance coverage by FSAM or any cancellation or non- renewal of workers' compensation insurance coverage for FSAM shall be a material breach of this contract. FSAM may maintain Occupational Accident and Disability Insurance in lieu of Workers' Compensation. In either event, the policy must be endorsed to include a waiver of subrogation in favor of the City of Lubbock. Employer's Liability with limits of at least $500,000 each accident, $500,000 by disease policy limit, and $500,000 by disease each employee shall also be obtained and maintained throughout the term of this contract. MODIFICATIONS The Agreement, except as amended by this First Amendment to Financial Advisory Agreement, remains in effect in all other respects. IN WITNESS WHEREOF, the parties have made and executed this Amendment in multiple copies, each of which shall be an original, on this the 18th day of November, 2005. FIRST SOUTHWEST COMPANY By: ill A. Feinberg Chairman and Chief Executive By: Vince Viaille Vice President FIRST SOUTHWEST ASSET MANAGEMENT, INC. By: Hiff A. Feinberg Chairman and Chief Executive O r L-1969 ATTEST: CITY OF Ll By: By: Name: Rebecca Garza Name: Marc Title: City Secretary APPROVED AS TO FORM: By: _. r ame: John M. Knight Title: Assistant City Attorney Title: Mayor TEXAS Date: November 18, 2005 APPROVED AS TO CONTENT: By: n, 'AL Name: Jeffrey A. Yates Title: Chief Financial Officer ACERTIFICATE OF LIABILITY INSURANCE DATE-COR-D.12/21/0D4 PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION Roach Howard Smith & Hunter ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE 9330 LBd Freeway HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR Y ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. Suite #1500 Dallas, Texas 75243-3463 INSURERS AFFORDING COVERAGE INSURED INSURER A: Great Northern First Southwest Company INSURER B: Federal Insurance Company First Southwest Asset Management INSURER C: 325 N. St. Paul, Suite 800 INSURER D; Dallas, TX 75201 THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM CR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSRI TR7YPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATION LIMITS GENERAL LIABILITY ✓ COMMERCIAL GENERAL LIABILITY CLAIMS MADE a OCCUR 35787714 12115/04 12/15/05 EACH OCCURRENCE $ 1,000:©00 FIRE DAMAGE (Any one fire) S 100,000 MED EXP 9Any one Gerson $ 10,000 PERSONAL 8 ADV INJURY $ 1,000,000 A GENERAL AGGREGATE S 2,000,000 GEN'LAGGREGATFLIMITAPPLIES PER: PRODUCTS-COMPIOPAGG S 2,000,000 RO- LOC POLICY PIECI AUTOMOBILE ✓ LIABILITY ANY AUTO 74968567 12/15/04 12/15/05 COMBINED SINGLE LIMIT S 1,000,000 (Ea accident) ALL OWNED AUTOS BODILY INJURY (Per person) B SCHEDULED AUTGS - ✓ ✓ HIRED AUTOS NON -OWNED AUTOS BODILY INJURY $ (Peraccident) PROPERTY DAMAGE S (Per accident) GARAGE LIABILITY AUTO ONLY - EA ACCIDENT S OTHER THAN EA ACC S _ AUTO ONLY: AGG S ANY AUTO EXCESS LIABILITY ✓ OCCUR O CLAIMS MADE 79785393 12/15/04 12/15105 EACH OCCURRENCE S 1,000,000 AGGREGATE $ 1,000,000 $ B ✓ UMBRELLA FORM - $-- DEDUCTIBLE _ FB ✓ RETENTION S 10,000 WORKERS COMPENSATION AND EMPLOYERS' LIABILITY 7170$177 12/15/04 12/15105 $ ✓ WC ST', 0TH• T E.L. EACH ACCIDENT $ .500,000 El. DISEASE - EA EMPLOYEE $ 500,000 E.L.. DISEASE - POLICY LIMIT $ 500,000 OTHER DESCRIPTION OF OPERATIONSILOCATIONSIVEHICLEStEXCLUSIONS ADDED BY ENDORSEMENTISPECIAL PROVISIONS Certificate holder is named as an additional insured on GL, Auto and Umbrella policies. Waiver of subrogation is provided in favor of Certifeiate holder, its employees, elected officials and elective representatives for injuries, including death, property damage, or any other lass to the sam may be covered by the proceeds of insurance. TE HOLDER I I ADDITIONAL To Whom It May Concern SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR AUTHORIZED 4EPRESENTAT11rE (7197) ® ACORD CORPORATION 1988 IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon. ACORD 25-5 (7197)