BCRUA_R-20-11-18-8A RESOLUTION NO. R-20-11-18-8A
WHEREAS, the Brushy Creek Regional Utility Authority, Inc. (BCRUA) desires to retain
municipal advisory services; and
WHEREAS, the firm of Specialized Public Finance, Inc. submitted an engagement letter to
provide said services; and
WHEREAS, the BCRUA wishes to enter into an engagement letter with Specialized Public
Finance, Inc., Now Therefore
BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE BRUSHY CREEK
REGIONAL UTILITY AUTHORITY:
That the Board President is hereby authorized and directed to execute on behalf of the BCRUA
an Engagement Letter Agreement with Specialized Public Finance, Inc. for municipal advisory
services, a copy of same being attached hereto as Exhibit"A" and incorporated herein for all purposes.
The Board 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 18th day of November, 2020.
REN FLORES, Presi -
� --
Brushy Creek Regional Utility Authority
ATTEST:
ANNE FF , S t
etary
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Finance,Inc.-Municipal Advisory Services(00459695xA08F8).doc
ENGAGEMENT LETTER FOR MUNICIPAL ADVISORY SERVICES
Specialized Public Finance,Inc.("SPFI"or"Municipal Advisor")has been engaged to serve as the Municipal Advisor
to the Brushy Creek Regional Utility Authority,Inc.("Issuer"). This document is our written engagement and sets
forth the duties and responsibilities ofthe Municipal Advisor in connection with the issuance of Contract Revenue
Bonds or similar instruments by the Issuer. Prior municipal advisory engagements made by the Issuer are hereby
terminated.
Section 1:Municipal Advisor Role. The Municipal Advisor is engaged as a recognized independent expert whose
primary responsibility is to give objective advice on the structure and issuance of municipal securities. In ourcapacity
as Municipal Advisorto thelssuer,we will provide the followingservices:(1)Evaluate alternatives andoptionsrelated
to the Issuer's objective of reducing financing costs related to previously issued bonds;(2) Prepare preliminary
financing schedules for review and consideration by the Issuer,(3)Provide advice on the structure and suitabilityof
municipal securities relative to the financial resources ofthe Issuer for new projects;(4)Work with Bond Counsel and
the Issuer to prepare the offering documents necessary for the sale of municipal securities;and(5)Provide assistance
in coordinatingwith underwriters,bond rating agen cies,the Texas Water Development Board,and other professionals,
as needed,related to the proper structuring and final issuance of municipal securities.
Section 2:Disclosure of Conflicts of Interest. Rules established by the Municipal Securities Rulemaking Board and
the Securities and Exchange Commission require the registered Municipal Advisorto provide a written description of
any material conflicts of interest,including any plans to mitigate any such conflicts of interest. Federal law imposes
an explicit fiduciary duty on the Municipal Advisor to act in the best interest of the Issuer. This means several
important things:(1)SPFI has a duty to exercise due care in performing municipal advisory activities;(2)SPFI has a
duty of loyalty,requiring advice to be rendered in the best interest ofthe Issuer,without regard to the financial interests
of SPFI;(3)SPFI must have the knowledge and expertise needed to provide the Issuerwith informed advice;(4)SPFI
has a duty to understand the Issuer's specific financial circumstances so that any advice may be deemed suitable to
the Issuer's situation;and(5)SPFI has a duty to discussmaterial risks and benefits with the Issuerso as to bestserve
the Issuer's needs. Specific conflicts of interest wil I be disclosed in detail in a separate letter provided by SPFI before
the date of execution of this engagement
Section 3: Term of Engagement. The term of this engagement shall extend from the date of execution of this
Engagement Letter for a period of(3)years from such date. Unless SPFI or Issuer shall notify the other party in
writing at least(30)days in advance of the applicable anniversary date that this engagement will not be renewed,this
engagement will be automatically renewed on the third anniversary of the date hereoffor successive(1)yearperiods.
Section 4:Fees and Expenses. The Issuer agrees to pay to SPFI for the services described in Section 1),above,the
amount ofO.175%ofthe paramount of municipal securities issued and delivered,subjectto a$35,000 minimum.The
foregoing charges shall be multiplied by 1.25 times for the issuance of refunding bonds,reflecting the additional
services required. Additionally,the Issuer agrees to reimburse SPFI for any transaction-related costs advanced by
SPFI in the normal course of issuance ofthe municipal securities covered by this engagement,including but not limited
to paying agent fees,bond offering document preparation,rating agency fees(including any ratings-related travel
expenses,at the specific instruction of the Issuer),CUSIP registration fees,escrow agent fees,verification agent fees,
and any fees related to the bidding of escrow securities to the extent they are beneficial to the transaction or required
due to the inability to subscribe to State and Local Government Securities or SLGS.
Section 5:Allocation of Fees. For any financing provided exclusively by the Texas Water Development Board,the
combined fees otherwise due on the entire amount financed for the Cities of Cedar Park,Leander and Round Rock
in any calendar year will be allocated as follows:
75%to Specialized Public Finance,Inc.
25%to the municipal advisory firm representing the City of Leander
This engagement shall take effect upon action by a duly authorized representative of the Issuer to approve this
engagement and may be cancel) at any time
wiithf Xdays prior written notice.
Representative of the Issuer: y ` Date:
1-6-21
Representative of the MunicipalAdvisor: <'? Date: -
r
ENGAGEMENT LETTER FOR MUNICIPAL ADVISORY SERVICES
Specialized Public Finance,Inc.("SPFr'or"Municipal Advisor")has been engagedto serve as the Municipal Advisor
to the Brushy Creek Regional Utility Authority,Inc.("Issuer"). This document is our written engagement and sets
forth the duties and responsibilities of the Municipal Advisor in connection with the issuance of Contract Revenue
Bonds or similar instruments by the Issuer. Prior municipal advisory engagements made by the Issuer are hereby
terminated.
Section 1:Municipal Advisor Role. The Municipal Advisor is engaged as a recognized independent expert whose
primary responsibility is to give objective advice on the structure and issuance of municipal securities. In our capacity
as Mun icipal Advisor to the Issuer,we wi I l provide the following services:(1)Evaluate alternatives and options related
to the Issuer's objective of reducing financing costs related to previously issued bonds;(2) Prepare preliminary
financing schedules for review and consideration by the Issuer,(3)Provide advice on the structure and suitability of
municipal securities relative to the financial resources ofthe Issuer for new projects;(4)Workwith Bond Counsel and
the Issuer to prepare the offering documents necessary for the sale of municipal securities;and(5)Provide assistance
in coordinating with underwriters,bond rating agencies,the Texas Water Development Board,and other professionals,
as needed,related to the proper structuring and final issuance of municipal securities.
Section 2:Disclosure of Conflicts of Interest. Rules established by the Municipal Securities Rulemaking Board and
the Securities and Exchange Commission require the registered Municipal Advisorto provide a written description of
any material conflicts of interest,including any plans to mitigate any such conflicts of interest. Federal law imposes
an explicit fiduciary duty on the Municipal Advisor to act in the best interest of the Issuer. This means several
important things:(1)SPFI has a duty to exercise due care in performing municipal advisory activities;(2)SPFI has a
duty of loyalty,requiring advice to be rendered in the best interest ofthe Issuer,without regard to the financial interests
of SPFI;(3)SPFI must havethe knowledge and expertise needed to provide the Issuerwith informed advice;(4)SPFI
has a duty to understand the Issuer's specific financial circumstances so that any advice may be deemed suitable to
the Issuer's situation;and(5)SPFI has a duty to discuss material risks and benefits with the Issuerso as to best serve
the Issuer's needs. Specific conflicts of interest will be disclosed in detail in a separate letter provided by SPFI before
the date of execution of this engagement
Section 3: Term of Engagement. The term of this engagement shall extend from the date of execution of this
Engagement Letter for a period of(3)years from such date. Unless SPFI or Issuer shall notify the other party in
writing at least(30)days in advance of the applicable anniversary date that this engagement will not be renewed,this
engagement will be automatically renewed on the third anniversary of the date hereof for successive(1)year periods.
Section 4:Fees and Expenses. The Issuer agreesto pay to SPFI forthe services described in Section 1),above,the
amount ofO.175%ofthe paramount ofmunicipal securities issued and delivered,subject to a$3 5,000 minimum.The
foregoing charges shall be multiplied by 1.25 times for the issuance of refunding bonds,reflecting the additional
services required. Additionally,the Issuer agrees to reimburse SPFI for any transaction-related costs advanced by
SPFI in the normal course of issuance of the municipal securities covered by this engagement,including but not Iimited
to paying agent fees,bond offering document preparation,rating agency fees(including any ratings-related travel
expenses,at the specific instruction of the Issuer),CUSIP registration fees,escrow agent fees,verification agent fees,
and any fees related to the bidding of escrow securities to the extent they are beneficial to the transaction or required
due to the inability to subscribe to State and Local Government Securities or SLGS.
Section 5:Allocation of Fees. For any financing provided exclusively by the Texas Water Development Board,the
combined fees otherwise due on the entire amount financed for the Cities of Cedar Park,Leander and Round Rock
in any calendar year will be allocated as follows:
75%to Specialized Public Finance,Inc.
25%to the municipal advisory firm representing the City of Leander
This engagement shall take effect upon action by a duly authorized representative of the Issuer to approve this
engagement and may be cancelled at anytime with 3;04ays prior written notice.
Representative of the Issuer: V - Date: 11-19-267
Representative of the MunicipalAdvisor: Date:
DISCLOSURE STATEMENT
OF
SPECIALIZED PUBLIC FINANCE, INC.
This Disclosure Statement is provided by SPECIALIZED PUBLIC FINANCE, INC. ("Specialized Public
Finance, Inc." or "the Advisor") to Brushy Creek Regional Utility Authority, Inc. (the "Client") in
connection with our existing Financial Advisory Services Agreement or similar instrument (the
"Agreement").This Disclosure Statement provides information regarding conflicts of interest and legal or
disciplinary events of Specialized Public Finance, Inc. required to be disclosed to Client pursuant to
Municipal Securities Rulemaking Board ("MSRB") Rule G-42(b) and (c)(ii),which took effect on June 23,
2016.
PART A—Disclosures of Conflicts of Interest
Newly adopted MSRB Rule G-42 requires that Specialized Public Finance, Inc.provide disclosures relating
to any actual or potential material conflicts of interest, including certain categories of potential conflicts of
interest identified in Rule G-42, if applicable. If no such material conflicts of interest are known to exist
based on the exercise of reasonable diligence, Specialized Public Finance, Inc. is required to provide a
written statement to that effect.
Material Conflicts of Interest— Specialized Public Finance, Inc. makes the disclosures set forth below
with respect to material conflicts of interest in connection with the Agreement, together with explanations
of how the Advisor addresses or intends to manage or mitigate each conflict.
General Mitigations—With respect to all of the conflicts disclosed below,Specialized Public Finance, Inc.
mitigates such conflicts through its adherence to its fiduciary duty to Client, which includes a duty of loyalty
to Client in performing all advisory activities for Client. This duty of loyalty obligates Specialized Public
Finance, Inc.to deal honestly and with the utmost good faith with Client and to act in Client's best interests
without regard to Specialized Public Finance, Inc.'s financial or other interests. Furthermore, Specialized
Public Finance, Inc.'s supervisory structure provides strong safeguards against individual representatives
of Specialized Public Finance, Inc. potentially departing from their regulatory duties due to personal
interests.The disclosures below describe, as applicable, any additional mitigations that may be relevant
with respect to any specific conflict disclosed below.
Compensation-Based Conflicts. The fees due under the Agreement will be based on the size of the
financing and the payment of such fees shall be contingent upon closing of the financing transaction.While
this form of compensation is customary in the municipal securities market, this may present a conflict
because it could create an incentive for the Advisor to recommend unnecessary financings or financings
that are disadvantageous to Client, or to advise Client to increase the size of the issue. This conflict of
interest is mitigated by the general mitigations described above.
Specialized Public Finance, Inc. Also Advising Wholesale Utility Customers of Client. In addition to
serving as Advisorto Client, Specialized Public Finance, Inc. serves as Advisorto certain wholesale utility
customers of Client. Client and the wholesale utility customers may have conflicting interestswith regard to
fees,terms of the issuance,and other matters.Such conflict is mitigated by thefact that no wholesale utility
customer contracts are originated by Specialized Public Finance, Inc. and all work done on behalf of the
Client is undertaken at the specific request of the Client. Additionally, as it relates to the primary goals of
any such financing transaction, achieving the lowest possible debt service and bond issuance costs are
common to both the Client and the wholesale utility customers.
Specialized Public Finance Inc. as an independent municipal advisory firm is not affiliated with
any broker-dealer. As such, Specialized Public Finance Inc has NONE of the following potential
conflicts of interest unique to municipal advisors affiliated with a broker-dealer.
THE FOLLOWING CONFLICTS OF INTEREST DO NOT APPLY TO
SPECIALIZED PUBLIC FINANCE, INC.
Affiliate Conflict. The Affiliate's business with Client could create an incentive for the municipal advisor to
recommend to Client a course of action designed to increase the level of Client's business activities with
the Affiliate or to recommend against a course of action that would reduce or eliminate Client's business
activities with the Affiliate.
Solicitor Payments to Be Retained. Such payments could create an incentive for the Solicitor to make a
biased recommendation to Client in conflict with the fiduciary duty of the municipal advisor.
Payments From Third Parties for Recommendations. Such payments could create an incentive for the
municipal advisor to make a biased recommendation of the Recommended Third-Party to Client.
Fee-Splitting Arrangements. Such fee-splitting arrangements could result in divided loyalties of the
municipal advisor and the Third-Party besides Client.
Underwriting Relationships. Broker dealer municipal advisors serve a wide variety of other clients that
may from time to time have interests that could have a direct or indirect impact on the interests of Client.
These other clients may, from time to time and depending on the specific circumstances,have competing
interests, such as accessing the new issue market with the most advantageous timing and with limited
competition at the time of the offering. In acting in the interests of its various clients, the broker-dealer
municipal advisor could potentially face a conflict of interest arising from these competing client interests.
In other cases,as a broker-dealer that engages in underwritings of new issuances of municipal securities
by other municipal entities,the interests of the broker-dealer municipal advisor to achieve a successful and
profitable underwriting for its municipal entity underwriting clients could potentially constitute a conflict of
interest.
Broker-Dealer and Investment Advisory Business. Such securities-related activities,which may include
but are not limited to the buying and selling of new issue and outstanding securities and investment advice
in connection with such securities, including securities of Client, may be undertaken on behalf of, or as
counterparty to, Client, personnel of Client, and current or potential investors in the securities of Client.
These other clients may, from time to time and depending on the specific circumstances,have interests in
conflict with those of Client,such as when their buying or selling of Client's securities may have an adverse
effect on the market for Client's securities,and the interests of such other clients could create the incentive
for the broker-dealer and investment advisor affiliated municipal advisorto make recommendations to Client
that could result in more advantageous pricing for the other clients.
Secondary Market Transactions in Client's Securities. The broker-dealer municipal advisor, in
connection with its sales and trading activities, may take a principal position in securities, including
securities of Client, and therefore could have interests in conflict with those of Client with respect to the
value of Client's securities while held in inventory and the levels of mark-up or mark-down that may be
available in connection with purchases and sales thereof. In particular,the broker-dealer municipal advisor
or its affiliates may submit orders for and acquire Client's securities issued in an Issue under the Agreement
from members of the underwriting syndicate,either for its own account or for the accounts of its customers.
This activity may result in a conflict of interest with Client in that it could create the incentive for the broker-
dealer municipal advisor to make recommendations to Client that could result in more advantageous pricing
of Client's bond in the marketplace.
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PART B—Disclosures of Information Regarding Legal Events and Disciplinary History
Newly adopted MSRB Rule G-42 requires that Specialized Public Finance, Inc.provide certain disclosures
of legal or disciplinary events material to its client's evaluation of the Advisor or the integrity of the Advisor's
management or advisory personnel.
Accordingly, Specialized Public Finance, Inc. sets out below required disclosures and related information
in connection with such disclosures.
There are NO legal or disciplinary events of disclosure relating to Specialized Public Finance, Inc.
or the integrity of Specialized Public Finance, Inc.'s management or advisory personnel disclosed,
or that should be disclosed, on any Form MA or Form MA-1 filed with the SEC.
How to Access Form MA and Form MA-I Filings. Specialized Public Finance, Inc.'s most recent Form
MA and each most recent Form MA-1 filed with the SEC are available on the SEC's EDGAR system at
http://www.sec.gov.The SEC permits certain items of information required on Form MA or MA-I to be
provided by reference to such required information already filed by Specialized Public Finance, Inc. in its
capacity as a state-registered investment adviser.Specialized Public Finance, Inc.'s most recent Form ADV
is publicly accessible at the Investment Adviser Public Disclosure website at
http://www.adviserinfo.sec.gov, Specialized Public Finance, Inc.'s CRD number is 148951. The SEC
municipal advisor registration number for Specialized Public Finance, Inc.is 866-00363-00.
PART C—Future Supplemental Disclosures
As required by newly adopted MSRB Rule G-42, this Disclosure Statement may be supplemented or
amended, from time to time as needed, to reflect changed circumstances resulting in new conflicts of
interest or changes in the conflicts of interest described above,or to provide updated information with regard
to any legal or disciplinary events of Specialized Public Finance, Inc. Specialized Public Finance, Inc.will
provide Client with any such supplement or amendment as it becomes available throughout the term of the
Agreement.
Dated: October 29, 2020
Specialized Public Finance, Inc.
Disclosure language adapted from Securities Industry and Financial Markets Association("SIFMA") suggested municipal advisory
conflicts of interest disclosure dated June 1,2016.
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