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R-09-05-28-12A2 - 5/28/2009RESOLUTION NO. R -09-05-28-12A2 WHEREAS, the City of Round Rock desires to retain financial advisory services, and WHEREAS, Specialized Public Finance Inc. has submitted a Financial Advisory Services Agreement to provide said services, and WHEREAS, the City Council desires to enter into said agreement with Specialized Public Finance Inc., Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the Mayor is hereby authorized and directed to execute on behalf of the City a Financial Advisory Services Agreement with Specialized Public Finance Inc. for financial advisory services, a copy of said agreement being attached hereto as Exhibit "A" and incorporated herein for all purposes. The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended RESOLVED this 28th day of May, 2009. ALAN MCGRAW, Mayor City of Round Rock, Texas ATTEST: SARA . WHITE, City Secretary 0:\wdox\SCC1nts\0112\0905\MDNICIPAL\R90528A2.DOC/rmC FINANCIAL ADVISORY SERVICES AGREEMENT EXHIBIT b a nAn a This Financial Advisory Services Agreement (the "Agreement") is made and entered into by and between the City of Round Rock, Texas ("Issuer") and Specialized Public Finance Inc. ("SPFI") effective as of the date executed by the Issuer as set forth on the signature page hereof. WITNESSETH: WHEREAS, the Issuer will have under consideration from time to time the authorization and issuance of indebtedness in amounts and forms which cannot presently be determined and, in connection with the authorization, sale, issuance and delivery of such indebtedness, Issuer desires to retain an independent financial advisor; and WHEREAS, the Issuer desires to obtain the professional services of SPFI to advise the Issuer regarding the issuance and sale of certain evidences of indebtedness or debt obligations that may be authorized and issued or otherwise created or assumed by the Issuer (hereafter referred to collectively as "Debt") from time to time during the period in which this Agreement shall be effective; and WHEREAS, SPFI is willing to provide its professional services and its facilities as financial advisor in connection with all programs of financing as may be considered and authorized by Issuer during the period in which this Agreement shall be effective. NOW, THEREFORE, the Issuer and SPFI, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, do hereby agree as follows: SECTION I DESCRIPTION OF SERVICES Upon the request of the Issuer, SPFI agrees to perform the financial advisory services stated in the following provisions of this Section I; and for having rendered such services, the Issuer agrees to pay to SPFI the compensation as provided in Section VI hereof. 1. Financial Planning . Provide financial planning services related to Debt plans and programs. 2. Debt Elements. Provide recommendations regarding Debt under consideration, including such elements as timing, structure, security provisions, and such other provisions as may be appropriate. 3. Method of Sale. Make a recommendation as to an appropriate method of sale, including but not limited to competitive sale, negotiated sale or private/limited offering. 4. Price Fairness. Advise the Issuer as to the fairness of the price offered by the underwriters. 5. Offering Documents. Participate in and direct, as appropriate, the preparation of the offering documents and/or assist bond counsel with same. 6. Auditors. Coordinate verification by an independent auditor of any calculations incident to the Debt, as required. 7. Printing. Coordinate all work incident to printing of the offering documents and other documents required by Issuer. 8. Closing. Provide the Issuer a post sale/closing booklet or update for the Debt and other outstanding debt, as needed. SECTION II OTHER AVAILABLE SERVICES In addition to the services set forth and described in Section I herein above, SPFI agrees to make available to the Issuer the following services, when so requested by the Issuer and subject to the agreement by Issuer and SPFI regarding the compensation, if any, to be paid for such services, it being understood and agreed that the services set forth in this Section II may require further agreement as to the compensation to be received by SPFI for such services: 1. Call Defeasance and Refunding. Evaluate and advise on exercising any call defeasance and/or refunding of any outstanding Debt. 2. Capital Program Modeling. Evaluate and advise on the development of any capital improvements programs. SECTION III CONTINUING DISCLOSURE It is understood and agreed that the Issuer, in connection with the sale and delivery of Debt, will be required to comply with certain continuing disclosure undertakings, including preparation and submission of annual reports (the "annual reports") and reporting of certain specified material events (the "material events") pursuant written undertakings of the Issuer and in accordance with the provisions of Securities and Exchange Commission Rule 15c2-12, as amended (the "Rule). SPFI shall provide continuing disclosure services on the terms and conditions, for the time period and for the compensation set forth herein. 1. This Agreement shall apply to all Debt delivered subsequent to the effective date of the continuing disclosure undertakings of Issuer and as specified in the Rule, to the extent that any particular issue of Debt does not qualify for exceptions to the continuing disclosure requirements of the Rule. 2. SPFI agrees to perform annual reporting and material event notification duties required by the undertakings of Issuer and the Rule. 3. The fees of SPFI for providing the foregoing continuing disclosure services shall be negotiated annually (not to exceed $1,000 per similarly -secured type of Debt) and shall only apply in a year when similarly - secured Debt is not sold. The fees of SPFI for providing material event notification services shall be waived. SECTION IV TERM OF AGREEMENT This Agreement shall become effective as of the date executed by the Issuer as set forth on the signature page hereof and, unless terminated by either party pursuant to Section V of this Agreement, shall remain in effect thereafter for a period of three (3) years from such date. Unless SPFI or Issuer shall notify the other party in writing at least thirty (30) days in advance of the applicable anniversary date that this Agreement will not be renewed, this Agreement will automatically renew on the third anniversary of the date hereof for an additional one (1) year period and thereafter will automatically renew on each anniversary date for successive one (1) year periods under the same terms as the initial 3 year period. SECTION V TERMINATION This Agreement may be terminated with or without cause by the Issuer or SPFI upon the giving of at least thirty (30) days' prior written notice to the other party of its intention to terminate. In the event of such termination, it is understood and agreed that only the amounts due SPFI 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. SECTION VI COMPENSATION AND EXPENSE REIMBURSEMENT The fees due to SPFI for the services set forth and described in Section I of this Agreement with respect to each issuance of Debt during the term of this Agreement shall be calculated in accordance with the schedule set forth on Appendix A attached hereto. Unless specifically provided otherwise on Appendix A or in a separate written agreement between Issuer and SPFI, such fees, together with any other fees as may have been mutually agreed upon and all expenses for which SPFI is entitled to reimbursement, shall become due and payable concurrently with the delivery of the Debt to the purchaser. SECTION VII MISCELLANEOUS 1. Choice of Law. This Agreement shall be construed and given effect in accordance with the laws of the State of Texas. Proper venue for any legal action arising out of this Agreement shall be Williamson County, Texas. 2. Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the Issuer and SPFI, their respective heirs, executors, personal representatives, successors and assigns; provided however, neither party hereto may assign or transfer any of its rights or obligations hereunder without the prior written consent of the other party. 3. Entire Agreement. This instrument contains the entire agreement between the parties relating to the rights herein granted and obligations herein assumed. Any oral or written representations or modifications concerning this Agreement shall be of no force or effect except for a subsequent modification in writing signed by all parties hereto. Specialized Public Finance Inc. By: Managing Director By: Managing Director CITY OF ROUND ROCK, TEXAS By: Title: Date: ATTEST: Title Fee Schedule: Base Fee -Any Issue Plus $12.50 per $1,000 up to Plus $11.50 per $1,000 next Plus $7.00 per $1,000 next Plus $4.65 per $1,000 next Plus $2.75 per $1,000 next Plus $2.50 per $1,000 next Plus $1.95 per $1,000 next Plus $1.35 per $1,000 next Plus $1.30 per $1,000 next Plus $1.25 per $1,000 over APPENDIX A $ 3,000 $250,000 ora total of $6,125 $250,000 or a total of $9,000 $500,000 ora total of $12,500 $1,500,000 ora total of $19,475 $2,500,000 ora total of $26,350 $5,000,000 ora total of $38,850 $10,000,000 ora total of$58,350 $10,000,000 or a total of$71,850 $20,000,000 or a total of$97,850 $50,W0,000 for $250,000 Bonds for $500,000 Bonds for $1,000,000 Bonds for $2,500,000 Bonds for $5,000,000 Bonds for $10,000,000 Bonds for $20,000,000 Bonds for $30,000,000 Bonds for $50,000,000 Bonds The above charges shall be multiplied by 1.25 times for the completion of an application to a federal or state government agency or for the issuance of revenue bonds or refunding bonds, reflecting the additional services required. The charges for ancillary services, including computer structuring and official statement printing, shall be levied only for those services which are reasonably necessary in completing the transaction and which are reasonable in amount, unless such charges were incurred at the specified direction of the Issuer. The payment of charges for financial advisory services in Section I of the foregoing Agreement shall be contingent upon the delivery of bonds and shall be due at the time that bonds are delivered. The payment of charges for services described in Section II of the foregoing Agreement shall be due and payable in accordance with the mutual agreement therefor between SPFI and Issuer. The Issuer shall be responsible for the following expenses, if and when applicable: Bond counsel Bond ratings Computer structuring Continuing Disclosure, as per Section III Credit enhancement Verification and escrow agent Official statement preparation Official statement printing Paying agent/registrar/trustee Travel related expenses related to ratings or credit enhancement, with prior approval Underwriter and underwriters' counsel Delivery, copy, conference call charges and other miscellaneous charges The payment of reimbursable expenses that SPFI has assumed on behalf of the Issuer shall NOT be contingent upon the delivery of bonds and shall be due at the time that services are rendered and payable upon receipt of an invoice therefor submitted by SPFI. DATE: May 21, 2009 SUBJECT: City Council Meeting — May 28, 2009 ITEM: 12A2. Consider a resolution authorizing the mayor to execute an agreement with Specialized Public Finance Inc. for financial advisory services. Department: Staff Person: Justification: Finance Cheryl Delaney, Finance Director This agreement authorizes Specialized Public Finance, Inc. (SPFI) to serve as the City's financial advisor for the City. Financial advisory services will include items such as financial planning, recommending debt structure, managing the bond issuance process and providing market timing advice associated with issuing debt. Funding: Cost: Fees are charged when bonds are issued Source of funds: Bond proceeds Outside Resources: Garry Kimball, Managing Director, Specialized Public Finance, Inc. Background Information: The City conducted a Request for Proposal (RFP) for financial advisory services. The solicitation was advertised in the Round Rock Leader, posted on the City's public website, and sent directly to 12 vendors identified as providing this service by the State of Texas. Two proposals were submitted to the City in response to the RFP and were subjected to the best value evaluation process. Section 252.043 of the Texas Local Government Code provides for award of contract to the bidder who provides goods or services at the best value for the City. In determining the best value, the City may consider price, reputation, quality, extent to which the goods and/or services meet City needs, past relationship with the City, total Tong -term cost to the City, and any relevant criteria specifically listed in the RFP. After evaluation of the proposals received, the team is recommending award of contract to Specialized Public Finance. Public Comment: N/A EXECUTED DOCUMENT FOLLOWS FINANCIAL ADVISORY SERVICES AGREEMENT This Financial Advisory Services Agreement (the "Agreement") is made and entered into by and between the City of Round Rock, Texas ("Issuer") and Specialized Public Finance Inc. ("SPFI") effective as of the date executed by the Issuer as set forth on the signature page hereof. WITNESSETH: WHEREAS, the Issuer will have under consideration from time to time the authorization and issuance of indebtedness in amounts and forms which cannot presently be determined and, in connection with the authorization, sale, issuance and delivery of such indebtedness, Issuer desires to retain an independent financial advisor; and WHEREAS, the Issuer desires to obtain the professional services of SPFI to advise the Issuer regarding the issuance and sale of certain evidences of indebtedness or debt obligations that may be authorized and issued or otherwise created or assumed by the Issuer (hereafter referred to collectively as "Debt") from time to time during the period in which this Agreement shall be effective; and WHEREAS, SPFI is willing to provide its professional services and its facilities as financial advisor in connection with all programs of financing as may be considered and authorized by Issuer during the period in which this Agreement shall be effective. NOW, THEREFORE, the Issuer and SPFI, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, do hereby agree as follows: SECTION I DESCRIPTION OF SERVICES Upon the request of the Issuer, SPFI agrees to perform the financial advisory services stated in the following provisions of this Section I; and for having rendered such services, the Issuer agrees to pay to SPFI the compensation as provided in Section VI hereof. 1. Financial Planning . Provide financial planning services related to Debt plans and programs. 2. Debt Elements. Provide recommendations regarding Debt under consideration, including such elements as timing, structure, security provisions, and such other provisions as may be appropriate. 3. Method of Sale. Make a recommendation as to an appropriate method of sale, including but not limited to competitive sale, negotiated sale or private/limited offering. 4. Price Fairness. Advise the Issuer as to the fairness of the price offered by the underwriters. ---061'u9- - IZ/Jc2 5. Offering Documents. Participate in and direct, as appropriate, the preparation of the offering documents and/or assist bond counsel with same. 6. Auditors. Coordinate verification by an independent auditor of any calculations incident to the Debt, as required. 7. Printing. Coordinate all work incident to printing of the offering documents and other documents required by Issuer. 8. Closing. Provide the Issuer a post sale/closing booklet or update for the Debt and other outstanding debt, as needed. SECTION II OTHER AVAILABLE SERVICES In addition to the services set forth and described in Section I herein above, SPFI agrees to make available to the Issuer the following services, when so requested by the Issuer and subject to the agreement by Issuer and SPFI regarding the compensation, if any, to be paid for such services, it being understood and agreed that the services set forth in this Section II may require further agreement as to the compensation to be received by SPFI for such services: 1. Call Defeasance and Refunding. Evaluate and advise on exercising any call defeasance and/or refunding of any outstanding Debt. 2. Capital Program Modeling. Evaluate and advise on the development of any capital improvements programs. SECTION III CONTINUING DISCLOSURE It is understood and agreed that the Issuer, in connection with the sale and delivery of Debt, will be required to comply with certain continuing disclosure undertakings, including preparation and submission of annual reports (the "annual reports") and reporting of certain specified material events (the "material events") pursuant written undertakings of the Issuer and in accordance with the provisions of Securities and Exchange Commission Rule 15c2-12, as amended (the "Rule). SPFI shall provide continuing disclosure services on the terms and conditions, for the time period and for the compensation set forth herein. 1. This Agreement shall apply to all Debt delivered subsequent to the effective date of the continuing disclosure undertakings of Issuer and as specified in the Rule, to the extent that any particular issue of Debt does not qualify for exceptions to the continuing disclosure requirements of the Rule. 2. SPFI agrees to perform annual reporting and material event notification duties required by the undertakings of Issuer and the Rule. 3. The fees of SPFI for providing the foregoing continuing disclosure services shall be negotiated annually (not to exceed $1,000 per similarly -secured type of Debt) and shall only apply in a year when similarly - secured Debt is not sold. The fees of SPFI for providing material event notification services shall be waived. SECTION IV TERM OF AGREEMENT This Agreement shall become effective as of the date executed by the Issuer as set forth on the signature page hereof and, unless terminated by either party pursuant to Section V of this Agreement, shall remain in effect thereafter for a period of three (3) years from such date. Unless SPFI or Issuer shall notify the other party in writing at least thirty (30) days in advance of the applicable anniversary date that this Agreement will not be renewed, this Agreement will automatically renew on the third anniversary of the date hereof for an additional one (1) year period and thereafter will automatically renew on each anniversary date for successive one (1) year periods under the same terms as the initial 3 year period. SECTION V TERMINATION This Agreement may be terminated with or without cause by the Issuer or SPFI upon the giving of at least thirty (30) days' prior written notice to the other party of its intention to terminate. In the event of such termination, it is understood and agreed that only the amounts due SPFI 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. SECTION VI COMPENSATION AND EXPENSE REIMBURSEMENT The fees due to SPFI for the services set forth and described in Section I of this Agreement with respect to each issuance of Debt during the term of this Agreement shall be calculated in accordance with the schedule set forth on Appendix A attached hereto. Unless specifically provided otherwise on Appendix A or in a separate written agreement between Issuer and SPFI, such fees, together with any other fees as may have been mutually agreed upon and all expenses for which SPFI is entitled to reimbursement, shall become due and payable concurrently with the delivery of the Debt to the purchaser. SECTION VII MISCELLANEOUS 1. Choice of Law. This Agreement shall be construed and given effect in accordance with the laws of the State of Texas. Proper venue for any legal action arising out of this Agreement shall be Williamson County, Texas. 2. Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the Issuer and SPFI, their respective heirs, executors, personal representatives, successors and assigns; provided however, neither party hereto may assign or transfer any of its rights or obligations hereunder without the prior written consent of the other party. 3. Entire Agreement. This instrument contains the entire agreement between the parties relating to the rights herein granted and obligations herein assumed. Any oral or written representations or modifications concerning this Agreement shall be of no force or effect except for a subsequent modification in writing signed by all parties hereto. ATTEST: ' 1401 Title col Specialized Public Finance Inc. By:�._ Managing Dir CITY OF ROUND ROCK, TEXAS By: Title: VI,al/p-r— Date: '5. Vb. 09 Fee Schedule: Base Fee -Any Issue Plus $12.50 per $1,000 up to Plus $11.50 per $1,000 next Plus $7.00 per $1,000 next Plus $4.65 per $1,000 next Plus $2.75 per $1,000 next Plus $2.50 per $1,000 next Plus $1.95 per $1,000 next Plus $1.35 per $1,000 next Plus $1.30 per $1,000 next Plus $1.25 per $1,000 over APPENDIX A $ 3,000 $250,000 or atotal of $6,125 $250,000 or atotal of$9,000 $500,000 or atotal of$12,500 $1,500,000 or a total of $19,475 $2,500,000 or a total of $26,350 $5,000,000 ora total of $38,850 $10,000,000 ora total of$58,350 $10,000,000 or a total of$71,850 $20,000,000 or a total of$97,850 $50,000,000 for $250,000 Bonds for $500,000 Bonds for $1,000,000 Bonds for $2,500,000 Bonds for $5,000,000 Bonds for $10,000,000 Bonds for $20,000,000 Bonds for $30,000,000 Bonds for $50,000,000 Bonds The above charges shall be multiplied by 1.25 times for the completion of an application to a federal or state government agency or for the issuance of revenue bonds or refunding bonds, reflecting the additional services required. The charges for ancillary services, including computer structuring and official statement printing, shall be levied only for those services which are reasonably necessary in completing the transaction and which are reasonable in amount, unless such charges were incurred at the specified direction of the Issuer. The payment of charges for financial advisory services in Section I of the foregoing Agreement shall be contingent upon the delivery of bonds and shall be due at the time that bonds are delivered. The payment of charges for services described in Section II of the foregoing Agreement shall be due and payable in accordance with the mutual agreement therefor between SPFI and Issuer. The Issuer shall be responsible for the following expenses, if and when applicable: Bond counsel Bond ratings Computer structuring Continuing Disclosure, as per Section III Credit enhancement Verification and escrow agent Official statement preparation Official statement printing Paying agent/registrar/trustee Travel related expenses related to ratings or credit enhancement, with prior approval Underwriter and underwriters' counsel Delivery, copy, conference call charges and other miscellaneous charges The payment of reimbursable expenses that SPFI has assumed on behalf of the Issuer shall NOT be contingent upon the delivery of bonds and shall be due at the time that services are rendered and payable upon receipt of an invoice therefor submitted by SPFI.