Loading...
17-Move to approve a financial advisory contract with Southwest SecuritiesCITY COUNCIL AGENDA ITEM BRIEFING SHEET Submittal Date: Originating Department: Presented By: Agenda Item No.: Ol/04/10 Council Date: Finance Gene Anderson 17. O1/11/10 RECOMMENDED MOTION: Move to approve a financial advisory contract with Southwest Securities, Inc. POLICY ISSUE(S): Fiscal Management The attached contract sets out the exact nature of the City of Paris' relationship with Southwest Securities, Inc. with regard to the upcoming refunding of a substantial portion of the City's outstanding long-term debt and the upcoming issuance of new debt for the Collegiate Drive Project. This contract is not mandatory for the refunding issue or new issue to take place or for Southwest Securities to act as the City's financial advisors; however, staff is recommending its approval for two reasons. First, federal regulators do not require but like to see such agreements in place between taxing entities and their financial advisors. Second, the current Council has not been through either the refunding process or the process for issuing new debt. This document spells out the type of services provided by a financial advisor thus allowing the Council to see why the City needs a financial advisor in these circumstances. BOARD/COMMISSION RECOMMENDATION: N/A EXHIBITS: Resolution ACTION: BUDGET INFO: ❑ Financial Report ❑ Minute Order Expense $NA ❑ Department Report Z Resolution Budgeted Amt. $NA ❑ Presentation ❑ Ordinance y'I'D Actual $NA ❑ Public Hearing ❑ Other Acct. Name NA Acct. Number NA FISCAL NOTES: None REVIEWED AND APPROVED BY: Z Administration Z City Clerk ❑ Community Development ❑ EMS/IT Z Finance ❑ Fire ❑ Municipal Court E Legal ❑ Library ❑ Police ❑ Eng./Public Works ❑ Urilities City of Paris - _„k, ~ J Revised 2/04/08 DRAFT attorney\reswork\current\SWs Financial Adivosry Contract Res 2009 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, APPROVING AND AUTHORIZING THE EXECUTION OF A FINANCIAL ADVISORY CONTRACT WITH SOUTHWEST SECURITIES GROUP FOR PROFESSIOIVAL SERVICES IN THE CAPACITY OF FINANCIAL ADVISOR FOR THE CITY OF PARIS; MAKING OTHER FINDIIVGS A1VD PROVISIONS RELATED TO THE SUBJECT; A1VD DECLARING AN EFFECTIVE DATE. WHEREAS, the City of Paris is in need of financial advisor services and Southwest Securities Group, 1201 Elm Street, Suite 3500, Dallas, Texas 75270-2180, has made a proposal for professional services for various types of debt obligations, and with the authorization, issuance, sale and delivery of such obligations; and, WHEREAS, is deemed to be in the best interest of the City of Paris that such financial advisory contract with Southwest Securities Group, in the form of Exhibit A attached hereto and made a part hereof, be approved; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUIVCIL OF THE CITY OF PARIS THAT: Section 1. The findings set out in the preamble to this resolution are hereby in all things approved. Section 2. The proposal of Southwest Securities Group for professional services described in the Financial Advisory Contract attached hereto as Exhibit A be, and the same is hereby accepted; and, Section 3. The Mayor of the City of Paris be, and he is hereby authorized and directed to execute on behalf of the City of Paris the Financial Advisory Contract in the form of Exhibit A attached hereto. Section 4. This resolution shall be effective immediately upon passage. PASSED AND ADOPTED this 11th day of January, 2010. Jesse James Freelen, Mayor ATTEST: Janice Ellis, City Clerk APPROVED AS TO FORM: W. Kent McIlyar, City Attorney , .J swS ~ 7~ ~ E C. ~ G R O U P = ;7y Building what you ualue. FINANCIAL ADVISORY CONTRACT Honarable Mayor and City Council City of Paris c/o Kevin Carruth 135 First Street SE Paris, Texas 75460 Ladies and Gentlemen: 1. We understand that you contemplate the authorization and issuance of various types of debt obligations, including, but not limited to, general obligation bonds, certificates of obligation, revenue bonds and tax notes in various amounts; and that in connection with the authorization, issuance, sale and delivery of such obligations, you desire this proposal from us to perform professional services in the capacity of Financial Advisor for your City. 2. By this proposal, we offer our professional services and our facilities as Financial Advisor and agree to perform the following duties normally performed by such advisor and to perform such other duties as, in our judgment may be necessary or advisable: a. We will make a study of the debt structure of your City, the trend of the assessed valuation, its taxing power and the present and estimated future 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 securities in question, the study 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 these securities in question; and on the basis of such studies, we will devise and recommend for your approval, a plan of financing to cover the proposed obligations. Such plan shall include a maturity schedule and other terms and conditions, such as option of prior payment and the like, as will, in our opinion, result in the issuance of obligations under terms and conditions most advantageous to your City, consistent with a minimum effective interest rate. b. We will assist you in obtaining competitive bids for services rendered from such other parties associated with the issuance, sale and deliver}of the obligations c. We understand that you have retained, or expect to retain McCall Parkhurst & Horton L.L.P., a firm of recognized municipal bond attorneys, who will prepare the proceedings aid advise of the steps necessary to be taken in a bond election, if required, the legal issuance of the obligations and final delivery of the obligations; and who will issue an opinion approving the legaliTy of the obligations. The fee of said firm is to be paid by the City. We will maintain liaison with this firm of bond attorneys and shall assist in all the financial advisory aspects involved in the preparation of appropriate legal proceedings and documents. EXHIBIT A- - ~ ~ 14 ~ Honorable Mayor and City Council City of Paris Page 2 d. If a bond election is required, we will assemble and transmit to the bond attorneys such data as may be required in the preparation of the necessary petitions, orders, resolutions, notices and bonds; and will assist your governing body in the expeditious handling thereof. We will arrange for the delivery to such official as you may designate such sets of election supplies, including ballots as are required for each polling place. The cost of such supplies is to be paid by the City. We will represent and assist the City in the preparation and submission of any application for financial assistance to the Texas Water Development Board ("TWDB") as well as representing you at the appropriate TWDB approval hearing(s). If the TWDB loan requires the obligations to be delivered in installments versus the traditional single delivery, then our fee will be increased by 20%. We agree to assist in the preparation of an Official Statement or other offering document containing official data and other information of the nature and to the extent ordinarily required in bidding on obligations of this type, all of which we are to furnish in sufficient copies to permit mailing to prospective bidders, a list of which we agree to provide. The costs of printing and electronically posting/distributing such Official Statements and any document duplication and delivery costs are to be paid by the City. g. We will advise you of current bond market conditions, forthcoming securities issues and other general information and economic data which might normally influence interest rates or bidding conditions, so that the date for the sale of any obligations in the open market can be set at a time which, in our opinion, will be favorable. h. We agree to conduct and handle the sale and delivery of the obligations whether sold at competitive or negotiated sale(including TWDB). We will arrange for the printing of the obligations, if the City should choose not to issue book-entry bonds, the cost for which is to be paid by the City. 3. We will consult with you on the matter of bond ratings for the proposed issues and, when so instructed, will direct the preparation of such information as, in our opinion, is required for submission to the bond rating agencies. In case it is considered advisable for a personal presentation of information to the bond rating agencies, we will be available to accompany City representatives to Dallas, Texas or New York, New York for such presentation. All costs of such presentation, including any fees or charges of the rating agencies and the aost of travel by ourrepresentative shall be at the City's expense. 4. If appropriate, we will direct the preparation of such information, as in our opinion, is required for submission to the municipal bond insurance companies for consideration to qualify the proposed issue for municipal bond insurance. The cost of such insurance is to be paid by the successful purchaser of the proposed issue or directly by the City, as circumstances dictate. 5 We agree to direct and coordinate the entire program of financing herein contemplated and to assume and pay our own travel, communication and out-of-pocket expenses. It is specifically understood and agreed, however, that this obligation on our part shall not cover payment of any local election expenses; nor shall it cover the cost of publication of notices in newspapers nor other publication costs, the fees of the State of Texas Attorney General, nor the expenses of any litigation. Honorable Mayor and City Council City of Paris Page 3 6. As consideration for the services rendered by us and as reimbursement for the expenses which we are to incur, it is understood and agreed that your City is to pay, and we are to accept, a cash fee for such professional services in accordance with the fee schedule set forth herein. Such fee shall become due and payable simultaneous~ with delivery of the obligations to the purchaser 7 In the event this proposed financing is not consummated, then the fee due us shall be nothing; however, should the same or similar proposition again be considered within twenty-four (24) months from the date of your acceptance hereof, then, at our option, the agreement covered by this proposal shall apply to any obligations authorized. 8. It is further understood and agreed that we reserve the right to submit a bid for any obligations offeredat public competitive sale. 9. This agreement may be terminated by either party by giving 30 days written notice to the other party. 10. This proposal is submitted in duplicate and, when accepted by you, it will constitute the entire agreement between your City and the undersigned for the purposes and considerations herein specified. Your acceptance will be indicated by the signature of your Mayor, attested by your City Secretary on both copies, and the return of one executed cop ty o us. Respectfully submitted, SOUTHWEST SECURITIES, INC. By: • Dan A. Almon, Senior Vice President ACCEPTANCE ACCEPTED pursuant to resolution adopted by the Mayar and City Council of the City of Paris, Texas, on this the day of 12009. Mayor ATTEST: City Secretary 14 '~'2 Honorable Mayor and City Council City of Paris Page 4 FEESCHEDULE IF THE AMOUNT OF OBLIGATIONS DELIVERED TO PURCHASER IS: AND NOT MORE THAN MORE THAN THE FEE IS MINIM UM FEE $ 4,500 $ 100,000 $ 500,000 $ 4,500 plus $12.00 per $1,000 for all over$100,000 500,000 1,000,000 9,300 plus $6.00 per $1,000 for all over $500,000 1,000,000 1,500,000 12,300 plus $5.00 per $1,000 for all over $1,000,000 1,500,000 2,500,000 14,800 plus $4.00 per $1,000 for all over $1,500,000 2,500,000 5,000,000 18,800 plus $2.40 per $1,000 for all over $2,500,000 5,000,000 10,000,000 24,800 plus $2.10 per $1,000 for all over $5,000,000 10,000,000 20,000,000 35,300 plus $1.80 per $1,000 for all over $10,000,000 20,000,000 No Limit 53,300 plus $1.40 per $1,000 for all over $20,000,000 14 ~