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HomeMy WebLinkAboutR-2010-181 Dunlap & Associates for Loan Financing RESOLUTION NO. 2010-181 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF DANIA BEACH, FLORIDA, AUTHORIZING THE PROPER CITY OFFICIALS TO EXECUTE AN AGREEMENT WITH DUNLAP AND ASSOCIATES, INC. TO PROVIDE FINANCIAL ADVISORY SERVICES IN SECURING LOAN FINANCING FOR CITY CAPITAL PROJECTS AND EQUIPMENT; PROVIDING FOR CONFLICTS• FURTHER PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City has sought to secure loan financing as a means to pay for planned and approved capital projects and equipment purchases reflected in the 2010-2011 annual budget; and WHEREAS, the City has determined that professional assistance from an experienced financial advisory firm is prudent and necessary in order to prepare, solicit, evaluate and select City loan financing agreements that meet the City's capital needs; and WHEREAS, the Administration has identified and recommends Dunlap and Associates, Inc. as a qualified and experienced financial advisory firm that will meet the City's financial consulting needs; and WHEREAS,the attached Agreement accurately reflects the substance and terms that was recently awarded to Dunlap and Associates, Inc. through competitive bidding by the City of Oakland Park, which complies with the purchasing procedures of the City of Dania Beach; NOW,THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF DANIA BEACH, FLORIDA: Section 1. That the City Commission authorizes the proper City officials to execute the attached Financial Advisory Agreement with Dunlap and Associates, Inc. Section 2. That the funds to pay for these financial advisory services will be charged to and paid from respective capital projects planned and approved in the City's 2010-2011 annual budget, and further providing that the annual financial advisory retainer of$6,000.00 will be charged to and paid from the Stormwater Fund Professional Services Account. Section 3. That the City Manager and City Attorney are authorized to make minor revisions to the terms of the Financial Advisory Agreement as are deemed necessary and proper for the best interests of the City. Section 4. That all resolutions or parts of resolutions in conflict with this Resolution are repealed to the extent of such conflict. Section 5. That this Resolution shall be in force and become effective immediately upon its passage and adoption. PASSED AND ADOPTED on October 12, 2010. �ZXZ&2 C. K. McELY A MAYOR-COMMISSIONER ATTEST: LOUISE STILSON, CMC CITY CLERK gyp. APPROVED AS TO FORM AND CORRECTNESS: �r THOMAS)ANSJBRO, CITY ATTORNEY 2 RESOLUTION#2010-181 FINANCIAL ADVISORY AGREEMENT This Financial Advisory Agreement (the "Agreement") is made and entered into by and between the City of Dania Beach, Florida ("Issuer") and Dunlap &Associates, Inc. ("D&A") or its successor entity 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 D&A 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 (hereinafter referred to collectively as the "Debt Instruments") from time to time during the period in which this Agreement shall be effective; and WHEREAS, D&A 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 D&A, 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 an authorized representative of the Issuer, D&A 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 D&A the compensation as provided in Section V hereof. A. Financial Planning. At the direction of Issuer, D&A shall: 1. Survey and Analysis. Conduct a survey of the financial resources of the Issuer to determine the extent of its capacity to authorize, issue and service any Debt Instruments contemplated. This survey will include an analysis of any existing debt structure as compared with the existing and 3 RESOLUTION #2010-181 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. 2. Future Financings. Consider and analyze future financing needs as projected by the Issuer's staff and consulting engineers or other experts, if any, employed by the Issuer. 3. Recommendations for Debt Instruments. On the basis of the information developed by the survey described above, and other information and experience available, submit to the Issuer, in a written detailed report, recommendations regarding 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 such other provisions as may be appropriate in order to make the issue attractive to investors while achieving the objectives of the Issuer. All recommendations will be consistent with the goal of designing the Debt Instruments to be sold on terms which are advantageous to the Issuer, including the lowest interest cost consistent with all other considerations. 4. Market Information. Advise the Issuer of our interpretation of current bond market conditions, other related forthcoming bond issues and general information, with 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 favorable time. 5. Elections. In the event it is necessary to hold an election to authorize the Debt Instruments then under consideration, D&A will assist in coordinating the assembly of such data as may be required for the preparation of necessary petitions, orders, resolutions, ordinances, notices and certificates in connection with the election, including assistance in the transmission of such data to a firm of municipal bond attorneys ("Bond Counsel") retained by the Issuer. B. Debt Management and Financial Implementation. At the direction of Issuer, D&A shall: Method of Sale. Evaluate the particular financing being contemplated, giving consideration to the complexity, market acceptance, rating, size and structure in order to make a recommendation as to an appropriate method of sale, and: 4 RESOLUTION#2010-181 a. If the Debt Instruments are to be sold by an advertised competitive sale, D&A will: (1) Supervise the sale of the Debt Instruments, reserving 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; (2) Disseminate information to prospective bidders, organize such informational meetings as may be necessary, and facilitate prospective bidders' efforts in making timely submission of proper bids; (3) Assist the staff of the Issuer in coordinating the receipt of bids, the safekeeping of good faith checks and the tabulation and comparison of submitted bids; and (4) Advise the Issuer regarding the best bid and provide advice regarding acceptance or rejection of the bids. b. If the Debt Instruments are to be sold by negotiated sale, D&A will: (1) Recommend for Issuer's final approval and acceptance one or more investment banking firms as managers of an underwriting syndicate for the purpose of negotiating the purchase of the Debt Instruments. (2) Cooperate with and assist any selected managing underwriter and their counsel or disclosure counsel in connection with their efforts to prepare any Official Statement or Offering Memorandum. D&A will review the bond purchase contract, underwriter's agreement and other related documents. The costs incurred in such efforts, including the printing of the documents, will be paid in accordance with the terms of the Issuer's agreement with the underwriters, but shall not be or become an obligation of D&A. (3) Assist the staff of the Issuer in the safekeeping of any good faith checks, to the extent there are any such, and provide a cost comparison, for both expenses and interest which are suggested by the underwriters, to the then current market. (4) Advise the Issuer as to the fairness of the price offered by the underwriters. 2. Offering, Documents. Coordinate the preparation of the notice of sale and bidding instructions, official statement, official bid form and such other documents as may be required and 5 RESOLUTION#2010-181 1 submit all such documents to the Issuer for examination, approval and certification. After such examination, approval and certification, D&A shall provide the Issuer with a supply of all such documents sufficient to its needs and distribute by mail or, where appropriate, by electronic delivery, sets of the same to prospective purchasers of the Debt Instruments. Also, D&A and the City shall provide copies of the final Official Statement to the purchaser of the Debt Instruments in accordance with the Notice of Sale and Bidding Instructions. 3. Credit Ratings. Make recommendations to the issuer as to the advisability of obtaining a credit rating, or ratings, for the Debt Instruments and, when directed by the Issuer, coordinate the preparation of such information as may be appropriate 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, D&A will arrange for such personal presentations, utilizing such composition of representatives from the Issuer as may be finally approved or directed by the Issuer. 4. Trustee, Pang Agent, gistrar. Upon request, consult with the Issuer in the selection of a Trustee, Paying Agent/Registrar or both for the Debt Instruments, and assist in the negotiation of agreements pertinent to these services and the fees incident thereto. 5. Financial Publications. When appropriate, advise financial publications of the forthcoming sale of the Debt Instruments and provide them with all pertinent information. 6. Consultants. After consulting with and receiving directions from the Issuer, arrange for such reports and opinions of recognized independent consultants as may be appropriate for the successful marketing of the Debt Instruments. 7. Auditors. In the event formal verification by an independent auditor of any calculations incident to the Debt Instruments is required, make arrangements for such services. 8. Issuer Meetings. Attend meetings of the governing body of the issuer, its staff, representatives or committees as requested at all times when D&A may be of assistance or service and the subject of financing is to be discussed. 9. Printing. To the extent authorized by the Issuer, coordinate all work incident to printing of the offering documents and the Debt Instruments. RESOLUTION#2010-181 10. Bond Counsel. Maintain liaison with Bond Counsel in the preparation of all legal documents pertaining to the authorization, sale and issuance of the Debt Instruments. 11. Changes in Laws. Provide to the Issuer copies of proposed or enacted changes in federal and state laws, rules and regulations having, or expected to have, a significant effect on the municipal bond market of which D&A becomes aware in the ordinary course of its business, it being understood that D&A does not and may not act as an attorney for, or provide legal advice or services to,the Issuer. 12. Delivery of Debt Instruments. As soon as a bid for the Debt Instruments is accepted by the Issuer, coordinate the efforts of all concerned to the end that the Debt Instruments may be delivered and paid for as expeditiously as possible and assist the Issuer in the preparation or verification of final closing figures incident to the delivery of the Debt Instruments. 13. Debt Service Schedule; Authorizing Resolution. After the closing of the sale and delivery of the Debt Instruments, deliver to the Issuer a schedule of annual debt service requirements for the Debt Instruments and, in coordination with Bond Counsel, assure that the trustee, paying agent/registrar or both have been provided with a copy of the authorizing ordinance, order or resolution. SECTION II OTHER AVAILABLE SERVICES RELATED TO DEBT FINANCING In addition to the services set forth and described in Section I herein above, D&A agrees to make available to Issuer the following services, when so requested by the Issuer and subject to the agreement by Issuer and D&A 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 shall require further agreement as to the compensation to be received by D&A for such services: 1. Investment of Funds. From time to time, as an incident to the other services provided hereunder as financial advisor, D&A may competitively bid such investments as may be directed and authorized by the Issuer to be purchased, it being understood that D&A will be compensated in the normal and customary manner for each such transaction pursuant to U.S. Treasury Regulations. In any instance wherein D&A may become entitled to receive fees or other compensation in any form from a third party with respect to these investment activities on behalf of Issuer, we will disclose to Issuer the nature and, to the extent such is known, the amount of any such compensation so that Issuer may consider the information in making its investment decision. 7 RESOLUTION#2010-181 2. Exercising Calls and Refunding. Provide advice and assistance with regard to exercising any call and/or refunding of any outstanding Debt Instruments. 3. Capital Improvements Programs. Provide advice and assistance in the development of any capital improvement programs of the Issuer. 4. Long-Range Planning. Provide advice and assistance in the development of other long-range financing plans of the Issuer. 5. Post-Sale Services. Subsequent to the sale and delivery of Debt Instruments, review the transaction and transaction documentation with legal counsel for the Issuer, Bond Counsel, auditors and other experts and consultants retained by the Issuer and assist in developing appropriate responses to legal processes, audit procedures, inquiries, internal reviews and similar matters. SECTION III 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 IV of this Agreement, shall remain in effect thereafter for a period of five (5) years from such date, with three one-year renewal options exercisable by the City. SECTION IV TERMINATION This Agreement may be terminated with or without cause by the Issuer or D&A upon the giving of at least thirty (30) days' prior written notice to the other party of its intention to terminate, specifying in such notice the effective date of such termination. In the event of such termination, it is understood and agreed that only the amounts due D&A for services provided and expenses incurred to the date of termination will be due and payable. At the time of termination all reports, studies, evaluations, whether complete or not, will be sent to the City of Dania Beach within ten (10) days of termination. No penalty will be assessed for termination of this Agreement. SECTION V COMPENSATION AND EXPENSE REIMBURSEMENT The fees due to D&A for the services set forth and described in Section I of this Agreement with respect to each issuance of Debt Instruments during the term of this Agreement shall be calculated in 8 RESOLUTION #2010-181 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 D&A, such fees, together with any other fees as may have been mutually agreed upon and all expenses for which D&A is entitled to reimbursement, shall become due and payable concurrently with the delivery of the Debt Instruments to the purchaser or purchase of investments or investment services. SECTION VI MISCELLANEOUS 1. Choice of Law. This Agreement shall be construed and given effect in accordance with the laws of the State of Florida. Venue for any action relative to the enforcement of the terms and provisions of this agreement shall be in Broward County, Florida. 2. Notice Requirements. All notices or other communications which shall or may be given pursuant to this agreement shall be in writing and shall be delivered by personal service, or by registered mail addressed to the other party at the address indicated herein or as the same may be changed from time to time. Such notice shall be deemed given on the day on which personally serviced; or, if by mail, on the fifth day after being posted or the date of actual receipt, whichever is earlier. City of Dania Beach Dunlap & Associates, Inc. J. Craig Dunlap President City of Dania Beach Dunlap & Associates, Inc. 100 W. Dania Beach Blvd. 1 l46 Keyes Avenue Dania Beach, Florida 33004 Winter Park, FL 32789 2. Binding Effect Assignment., This Agreement shall be binding upon and inure to the benefit of the Issuer and D&A, their respective 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. IN WITNESS WHEREOF, the parties hereto have made and executed this Agreement and have hereunto signed in their names by their duly authorized representatives. 9 RESOLUTION #2010-181 ATTEST: CITY OF DANIA BEACH By: By: Louise Stilson, CMC Robert Baldwin City Clerk City Manager APPROVED AS TO FORM: Date: By: Thomas J.Ansbro City Attorney CONSULTANT: DUNLAP& ASSOCIATES, INC. By: J. Craig Dunlap,President Date: 10 RESOLUTION#2010-181 APPENDIX A I a. An annual retainer of$6,000 payable quarterly in arrears depending upon the specific scope as defined by the Issuer. b. D&A would propose an hourly fee with a not-to-exceed amount negotiated with the Issuer prior to implementationthe wo rk,based upon the following hourly fees: President or Senior Vice President $175/hour Vice President $150/hour Assistant Vice President $100/hour c. Upon completion of a bond financing,a bond fee payable to D&A would be as follows: Debt Issue Development and Sales Service GO $ .95/$1,000 from$1-25 million $ .75/$1,000 from$25-50 million $ .60/$1,000 from$50-75 million $ .40/$1,000 from$75-100 million Revenue $1.15/$1,000 from$1-25 million $1.00/$1,000 from$25-50 million $ .75/$1,000 from$50-75 million $ .50/$1,000 from$75-100 million Minimum fee on Bonds is$20,000. Minimum fee on Bank Loans is$20,000. This fee schedule would apply to all types of financing arrangements sold at either competitive or negotiated sale, based upon our proposal to provide a full range of consulting services under all financing scenarios. Reimbursable expenses—The fee schedule does not include out-of-pocket expenses which will be documented and billed at cost. • For investment services, D&A will arrange for the competitive bidding of bond proceeds and will be compensated by the successful bidder in an amount consistent with Federal tax regulations. • For escrow restructurings,the fees will be negotiated on a case-by-case basis. 11 RESOLUTION#2010-181 I