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R-87-1006 - 6/11/1987WHEREAS, in connection with the issuance of City bonds the City will require certain professional services and financial advice; and WHEREAS, First Southwest Company has submitted a proposed Financial Advisor Contract for review by the City Council; and WHEREAS, the City Council desires to enter into the Financial Advisor Contract with First Southwest Company; 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 Advisor Contract with First Southwest Company, a copy of said contract being attached hereto and incorporated herein for all purposes RESOLVED this // -511) day of , 1987. ATTEST: 4 ,62/TOZ&064/Z-C1--, NE LAND, City Secretary RESOLUTION NO. /1 MIKE ROBINSON, Mayor City of Round Rock, Texas • PROPOSAL AND AGREEMENT FOR FINANCIAL ADVISORY SERVICES By and Between CITY OF ROUND ROCK, TEXAS And FIRST SOUTHWEST COMPANY It is understood that the City of Round Rock, Texas, (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 judgment, 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 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 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 judgment 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. - 1 - 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, firms of municipal bond attorneys (the "Bond Counsel ") whose fees will be paid by the Issuer. 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 petitions, orders, resolutions, ordinances, notices and certificates in connection with the election. e. 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 bids. In compliance with Rule G -23 of the Municipal Securities Rulemaking Board, we will request consent to bid in writing, in any instance wherein 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. 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 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. f. When appropriate, we will advise financial publications of the forthcoming sale of the Debt Instruments and provide them with all pertinent information. g. 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, investment 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. h. 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. i. Subject to the approval of the Issuer, we will organize and make arrangements for such information meetings as, in our judgment, may be necessary. -2- 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 financing plan of the Issuer. 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. 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 three years from the date of acceptance. 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 the return of one executed copy to First Southwest Company. ACCEPTED pursuant t Resolution adopted by the City Council of the City of Round Rock, Texas on this //U of 1987. ATTEST: (SEAL) e. We will provide any other financing planning sevices as may be requested by the C Secretary By - 4 - Respectfully submitted, FIRST SOUTHWEST COMPANY ACCEPTANCE 42dei William G. Newma I� r. Authorized Representative Mayor 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 $ 3,000 Plus $12.50 per $1,000 up to $ 250,000 or a total of $ 6,125 for $ 250,000 Bonds Plus 11.50 per $1,000 next 250,000 or a total of 9,000 for 500,000 Bonds Plus 7.00 per $1,000 next 500,000 or a total of 12,500 for 1,000,000 Bonds Plus 4.65 per $1,000 next 1,500,000 or a total of 19,475 for 2,500,000 Bonds Plus 2.75 per $1,000 next 2,500,000 or a total of 26,350 for 5,000,000 Bonds Plus 2.50 per $1,000 next 5,000,000 or a total of 38,850 for 10,000,000 Bonds Plus 1.95 per $1,000 next 10,000,000 or a total of 58,350 for 20,000,000 Bonds Plus 1.35 per $1,000 next 10,000,000 or a total of 71,850 for 30,000,000 Bonds Plus 1.30 per $1,000 next 20,000,000 or a total of 97,850 for 50,000,000 Bonds Plus 1.25 per $1,000 over 50,000,000 Selected Sample Fees $ 50,000 $ 3,625.00 100,000 4,250.00 250,000 6,125.00 500,000 9,000.00 750,000 10,750.00 1,000,000 12,500.00 2,500,000 19,475.00 5,000,000 26,350.00 10,000,000 38,850.00 25,000,000 65,100.00 50,000,000 97,850.00 100,000,000 160,350.00 Expense Items Paid By Bond Election Supplies (if required) Financial Advisor Preparation, Printing and Distribution of Issuer Official Statements and Accompanying Documents (Negotiated Refunding Issues) Reports of Independent Consultants Issuer Rating Fees Issuer Travel to Rating Meetings Issuer Printing of Debt Instruments Financial Advisor Delivery of Debt Instruments Financial Advisor In State Travel and Communication Expenses Financial Advisor of Financial Advisor DATE: June 9, 1987 SUBJECT: Council Agenda, June 11, 1987 ITEM: 13B - Consider a resolution authorizing the Mayor to enter into a financial advisory agreement. This is for the formal authorization to retain First Southwest Company as Financial Advisors for the City of Round Rock. The rates shown on the last page were instituted in 1976 and compare to be very competitive in the market place. The time of this contract is for 3 years. Staff has enjoyed a very strong working relationship with First Southwest Company for many years and recommends renewal of this contract. This contract does not include a provision for retaining bond council to assist in legal document preparation in conjunction with bond sales. Staff will bring back a contract for bond council at a subsequent meeting.