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R-87-1061 - 11/12/1987WHEREAS, in connection with the issuance of Certificates of Obligation the City will require certain professional services and financial advice; and WHEREAS, Harrison Mayes Securities 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 Harrison Mayes Securities; 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 Contractor with Harrison Mayes Securities, a copy of said contract being attached hereto and incorporated herein for all purposes. RESOLVED this /a 7 day of / y7 6.7Z f0 be.A/ 1987. ATTEST: I I LiiJ ' rAtaL.+ J LAND, City Secretary x RESOLUTION NO. /663 // MIKE ROBINSON, Mayor City of Round Rock, Texas PROPOSAL AND AGREEMENT FOR FINANCIAL ADVISORY SERVICES By and Between CITY OF ROUND ROCK, TEXAS And HARRISON MAYES SECURITIES, INC. Austin, Texas It is understood that the City has authorized the issuance of $1,850,000 Combination Tax and Revenue Certificates of Obligation and we been requested to submit a proposal to provide professional services to the City 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 City and Harrison Mayes Securities, Inc. effective at the date of its acceptance as provided for herein below. I. This Agreement shall apply only to the $1;850, 000„ Combination Tax and Revenue Certificates of Obligation, Series 1988, during the period in which this Agreement shall be effective. II. We agree to provide our professional services and our facilities as Financial Advisor and agree to direct and coordinate all programs of the Certificates of Obligation financing as 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. III. 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 City to determine the extent of its capacity to authorize, issue and service debt on the Certificates of Obligation. 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 City. In the event revenues of existing or projected facilities operated by the City are to be pledged to repayment of the Certificates of Obligation now 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 City, resulting from improvements to be financed ! by the Certificates of Obligation now under consideration. We will also take into account future financing needs and operations as projected by the City's staff and consulting engineers or other experts, if any, employed by the City. B. On the basis of the information developed by the survey described above, and other information and experience 1 roar r, I ii available to us, we will submit to the City our recommendations of the Certificates of Obligation 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 Certificates of Obligation which can be sold under terms most advantageous to the City and at the lowest interest cost consistent with all other considerations. C. We will advise the City 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 Certificates of Obligation may be set at a time which, in our opinion, will be favorable. D. It is understood and agreed upon that the City will retain a firm or firms of municipal bond attorneys to act as bond counsel on the proposed Certificates of Obligation issue whose fees will be paid by the City. E. We will recommend the method of sale of the Certificates of Obligation that, in our opinion, is in the best interest of the City and will proceed, as directed by the City, with one of the following methods: 1. Advertised Sale: We will supervise the sale of the Certificates of Obligation at a public sale in accordance with procedures set out herein. We do hereby agree not to submit a bid for any Certificates of Obligation issued under this Agreement which the City advertises for competitive bids. 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 Certificates of Obligation and in no event will participate either directly or indirectly in the underwriting of the Certificates of Obligation. 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 City and acting in its behalf, we will place privately the Certificates of Obligation directly with institutional investors for a placement fee of $10.00 per $1,000 par value of Certificates of Obligation issued and placed, which fee will be in addition to the applicable reimbursable expenses as set forth in Appendix A attached hereto. We will prepare and provide to the prospective purchasers a Limited Offering Memorandum and other related documents. 4. Texas Water Development Board or Farmers Home Administration: We will prepare the application and coordinate as required under the current funding rules of either organization, all required funding procedures in the placement of Certificates of Obligation with the organization on behalf of.the City. The fee due is commensurate with a standard bond sale as stated in Appendix A. F. When appropriate, we will advise financial publications of the forthcoming sale of the Certificates of Obligation and provide them with all pertinent information. 2 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 City all such documents for examination, approval and certification. After such examination, approval and certification, we will provide the City 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 Certificates of Obligation. We will also provide sufficient copies of the Official Statement to the purchaser of the Certificates of Obligation in accordance with the Notice of Sale and Bidding Instructions. H. We will, after consulting with the City, arrange for such reports and opinions of recognized independent consultants we deem necessary and required in the successful marketing of the Certificates of Obligation. I. Subject to the approval of the City, we will organize and make arrangements for such information meetings as, in our judgment, may be necessary. J. We will make recommendations to the City as to the advisability of obtaining a credit rating, or ratings, for the Certificates of Obligation and, and when directed by the City, we will coordinate the preparation of such information as, in our opinion, is required for submission to the rating agency, or agencies. In those cases where the advisability of personal presentation of information to the rating agency, or agencies, may be indicated, we will arrange for such personal presentations. K. We will assist the staff of the City at the advertised sale of Certificates of Obligation in coordinating the receipt and tabulation and comparison of bids and we will advise the City as to the best bid. We will provide the City with our recommendation as to acceptance or rejection of such bid. L. As soon as a bid for the Certificates of Obligation is accepted by the City, we will proceed to coordinate the efforts of all concerned to the end that the Certificates of Obligation may be delivered and paid for as expeditiously as possible. We will assist the City in the preparation of verification of final closing figures incident to the delivery of the Certificates of Obligation. M. We will maintain liaison with Bond and General Counsel in the preparation of all legal documents pertaining to the authorization, sale and issuance of the Certificates of Obligation. Bond Counsel will provide an unqualified legal opinion as to the legality of the issuance of the Certificates of Obligation at the time of delivery. N. If requested, we will counsel with the City in the selection of a Paying Agent /Registrar for the Certificates of Obligation, and we will assist in the preparation of agreements pertinent to these services and the fees incident thereto. O. In the event formal verification by an independent auditor of any calculations incident to the Certificates of Obligation is required, we will make arrangements for such services. P. We agree to do, or cause to be done, all work incident to printing of the Certificates of Obligation, obtaining approval, as may be required by the Attorney General, registration by the Comptroller of Public Accounts and delivery to the purchaser. 3 Q. After the closing of the sale and delivery of the Certificates of Obligation, we will deliver to the City a schedule of annual debt service requirements on the Certificates of Obligation. In coordination with Bond Counsel, we will assure that the Paying Agent /Registrar has been provided with a copy of the authorizing ordinance, order or resolution. R. We will attend any and all meetings of the governing body of the City, its staff, representatives or committees as requested at all times when we may be of assistance or service and the subject of bond financing is to be discussed. S. We will advise the City and its staff of changes, proposed or enacted, in Federal and State laws and regulations which would effect the municipal bond market. IV. In addition to the services set out above, we agree to provide the following services when so requested: A. We will provide our advice as to the investment of certain funds of the issuer. We will, when so directed, assist in the purchase of those investments authorized to be purchased. B. We will provide our advice and assistance with regard to exercising any call and /or refunding of any outstanding Debt Instruments. C. We will provide our advice and assistance in the development of, and financing for, any capital bond improvements programs of the City. D. We will provide any other financing planning services such as rate studies, financial impact analysis, etc., as may be requested by the City on a hourly negotiated basis. V. The fee due to Harrison Mayes Securities, Inc. in accordance with Appendix A attached hereto, any other fees as may be mutually agreed and all expenses for which Harrison Mayes Securities, Inc. is entitled to reimbursement, shall become due and payable concurrently with the delivery of the Certificates of Obligation to the purchaser or services performed. VI. This Agreement shall become effective at the date of acceptance by the City set out herein below and remain in effect until completion or terminated with or without cause by the City upon thirty (30) days written notice. In the event of such termination, it is understood and agreed that only the amount due to Harrison Mayes Securities, Inc. 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. This Agreement is submitted in duplicate originals. When accepted by the City, it, together with Appendix A attached hereto, will constitute the entire Agreement between the City and Harrison Mayes Securities, Inc. for the purposes and the considerations herein specified. Acceptance will be indicated by the signature of authorized officials of the City together with the date of acc- ptance on both copies and the return of one executed copy o Harrison Mayes Securities, Inc. Respe tf / ubmitted, G i Wil is . rison III - President Harriso Mayes Securities, Inc. 4 ACCEPTANCE ACCEPTED and adopted by the of ROUND ROCK, TEXAS meeting of the Council. (SEAL) 12th TITLE Mayor ATTEST: TI LE City Secretary City Council of November , 1987, at a Regular 5 on this APPENDIX A FEE SCHEDULE AND EXPENSE ITEMS In consideration for the services rendered, it is understood and agreed that our fee for the issue of Certificates of Obligation will be as follows: Base Fee: This Issue $3;000`! Plus 1.00% for the first $1,000,000 amount of Bonds issued Plus 0.75% for the next $4,000,000 amount of Bonds issued Plus 0.50% for the next $5,000,000 amount of Bonds issued Plus 0.25% for all over $10,000,000 amount of Bonds issued Plus Any Reimbursable Expense Items: Bond Rating Fees Travel to Rating Meetings Paying Agent /Registrar Fees Expenses Paid by Financial Advisor: Printing of Bond Prospectus Printing of Certificates of Obligation Delivery Charges All In -State Travel and Communication Expenses of Financial Advisor Negotiated Additional Service: All additional financing services performed at the request of the issuer will be billed at an hourly rate of $100.00. 6