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HomeMy WebLinkAboutR-2024-046 Florida Municipal Loan Council Stormwater BondRESOLUTION NO. 2024-11:licl A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF DANIA BEACH, FLORIDA, AUTHORIZING THE PROPER CITY OFFICIALS TO EXECUTE THE NECESSARY DOCUMENTS FOR PARTICIPATION IN THE FLORIDA MUNICIPAL LOAN COUNCIL STORMW ATER REVENUE BOND PROGRAM TO FUND CERTAIN STORMWATER DRAINAGE CAPITAL IMPROVEMENT PROJECTS ; PROVIDING FOR CONFLICTS; FURTHER, PROVIDING FOR AN EFFECTIVE DA TE. WHEREAS, the City has identified several stormwater drainage capital improvements (the "Improvements") that are necessary to mitigate flooding and related property damages; and WHEREAS, due to the extent of the necessary Improvements and significant cost, which has been exacerbated by inflation in recent years, the cunent Stormwater Assessment Fee is not sufficient to fund the Improvements; and WHEREAS, the City engaged Raftelis Financial Consultants to prepare a Revenue Sufficiency Report which has indicated that a Stormwater Revenue Bond of up to Thirty Million Dollars ($30 million) is required in order to complete the Improvements; and WHEREAS, the City desires to issue the Revenue Bond through the Florida Municipal Loan Council (FMLC) which offers a turnkey bond issuance program that provides all bond professionals, coordination of the issuance process, assistance in closing, and post-issuance compliance services; and WHEREAS, the City Administration recommends that the City Commission authorize the proper City officials to execute a letter of intent with the FMLC and an engagement letter with their financial advisor Public Resources Advisory Group (PRAG) to begin the issuance process . NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF DANIA BEACH, FLORIDA: Section 1. That the above "Whereas" clauses are true and conect, and they are made a prut of and incorporated into this Resolution by this reference. Section 2. That all resolutions or pruts of resolutions in conflict with this Res olution ru·e repealed to the extent of such conflict. Section 3. That the proper City officials are authorized to execute the FMLC letter of intent and the PRAG engagement letter, which are made a pru1 of and in corporated into this Resolution by this reference as Exhibit 'A ' and Exhibit 'B ', respectively. Section 4. That this Resolution shall become effective within ten (10) days of its passage and adoption. p ASSED AND ADOPTED on ~ r I I 9 ' 2024. Motion b y (bn1rY1 . James;-'second by \),cl!.. kblf:( L-e we jltn . FINAL VOTE ON ADOPTION: Unanimous / Yes N o Commissioner Joyce L. Davis Commissioner Tamara James Commissioner Marco Salvino Vice Mayor Lori Lewellen Mayor Archibald J. Ryan IV APPROVED AS TO FORM AND CORRECTNESS: 2 RESOLUTION #2024 -D.1io FLORIDA LEAGUE OF CITIES Frank DiPaolo Finance Director City of Dania Beach 100 W Dania Beach Blvd. Dania Beach, FL 33004 January 24, 2024 Re: Florida Municipal Loan Council Financing Programs Dear Mr. DiPaolo, We understand that the City of Dania Beach (the "City") is interested in working with the Florida Municipal Loan Council ("FMLC") and utilizing one of its financing programs. The purpose of this letter is to document the City's intent to move forward with using the FMLC's financing programs to finance various stormwater related projects as well as to outline the services provided by the FMLC. The FMLC offers two financing programs: • Competitive Capital Access Program (Bank Loan RFP Program) • Fixed-Rate Bond Program (Bond Issue Program) The services provided by the FMLC under both programs are described in Exhibit A. The Florida League of Cities serves as Administrator for the FMLC. The FMLC's compensation will be based on the Compensation Schedule attached below as Exhibit B. All compensation is due upon closing. No fees are due if the financing does not close. The FMLC does not serve as a financial advisor or as a municipal advisor in connection with the issuance of financing. Please note nothing in this letter is an expressed nor an implied commitment by the FMLC to provide financing. We look forward to working with the City on this financing. Sincerely, FLORIDA LEAGUE OF CITIES, as Administrator for the FMLC Paul Shamoun, Director of Financial Services Accepted: City of Dania Beach, Florida Signature.: ________________ _ Printed Name: ______________ _ Title: _________________ _ 301 S. Bronough Street, Suite 300 Tallahassee, Florida 32301 Phone: 850.222.9684 Fax: 850.222.3806 P.O. Box 1757 Tallahassee, Florida 32302-1757 fldties.corn Exhibit A Description of Services Competitive Capital Access Program (Bank Loan RFP Program): Services through closing - • Team of professionals (Bond Counsel, Financial Advisor) • Coordination of RFP process and professionals • Pre-reviewed form set of bond documents • Assist in the closing of the financing FMLC Fixed-Rate Bond Program: Services through closing - • Team of bond professionals (Bond Counsel, Financial Advisor, Underwriter, Disclosure Counsel, Trustee) • Coordination of professionals and issuance process • Access to bond insurance* • Access to an existing surety bond to fund reserve requirements* • Assist in the closing of the financing *Subject to a credit review by bond insurer Ongoing Administrative Services - • Florida League of Cities serves as Administrator over the life of the loan • Arbitrage Rebate Calculations • Continuing Disclosure Services • Monthly Account Statements and Reconciliation • Investment of Bond Proceeds • Audit Confirmations • Oversight by FMLC Board of Directors 2 of 3 LC LOCAL VOICES FLORIDA LEAGUE OF CITIES Exhibit B Compensation Schedule Competitive Capital Access Program (Bank Loan RFP Program): An upfront fee to be collected through the cost of issuance for each borrower at the rate of 10/100 of 1% (.001) with a minimum fee of $5,000 and a maximum fee of $15,000 per loan. FMLC Fixed-Rate Bond Program (Bond Issue Program): For administrative services rendered through closing, an upfront fee to be collected through the costs of issuance for each borrower at the rate of 5/100 of 1% (.0005) with a minimum fee of $10,000 per bond issue. For ongoing administrative services, the fee shall be computed annually for each borrower at the rate of 10/100 of 1 % (.001) of the principal balance outstanding, with a minimum annual fee of $1,500 and a maximum annual fee of $10,000. 3 of 3 LC LOCAL flORIDA lEAGUE 0~ CITl~S PRAG Frank DiPaolo Finance Director City of Dania Beach 100 W Dania Beach Blvd. Dania Beach, FL 33004 Re: Municipal Advisory Services Dear Mr. DiPaolo: January 24, 2024 150 SECOND AVENUE NORTH, SUTTE 400 ST. PETERSBURG, FLORIDA 33701 TEL: (727) 822-3339 I FAX: (727) 822-3502 PUBLIC RESOURCES ADVISORY GROUP The purpose of this engagement letter (the "Agreement") is to document the relationship between Public Resources Advisory Group, Inc. ("PRAG") and the City of Dania Beach, FL (the "City"). The City desires to utilize the services of PRAG as an independent registered municipal advisor to assist the City with general financial advisory and in issuing debt which will finance all or a portion of a multi-phased stormwater improvement project throughout the City (the "Project"). It is also our understanding that the City intends to use the Florida Municipal Loan Council ("FMLC") financing programs. PRAG does serve as an independent registered municipal advisor to the Florida League of Cities ("FLC") and the FMLC. At this time we are not aware of any divergence of interest between the City and the FLC or FMLC. Scope of Services PRAG' s services to the City will include the following: a. Review the City's existing debt and documentation thereto as applicable; b. Provide the City with information on the municipal debt market as appropriate; c. Provide the City with debt structuring alternatives and debt service analyses as requested; d. Work with the City and its legal and other consultants to develop a plan of finance for the Project; e. Present the plan of finance to senior management and the City Council as appropriate; f. Develop a financing timetable; g. Assist in the development of a request for proposals to be distributed to conunercial banks, if the Project is financed with a bank loan; h. Sununarize bank proposals indicating key terms of each, if the Project is financed with a bank loan; i. Review a special assessment methodology report to be prepared by an outside consultant; j. If the Project is financed with a bond issue, assist in the development of a preliminary and final official statement, prepare and present information to the rating agencies, and assist the City coordinating any other parties required such as an official statement printer and a registrar and paying agent; k. Assist in the development and preparation of loan documents; I. Negotiate final terms and pricing of the debt; and, m. Perform functions to facilitate the closing of the financing. n. Serve as the City's Independent Registered Municipal Advisory and provide other municipal advisory services as mutually agreed upon in writing. Cmnpensation PRAG's work associated with the analysis described in (a) through (e) in the Scope of Services will be based on PRAG' s Hourly Rates outlined in the Compensation Schedule attached hereto as Attachment I, billed monthly. PRAG' s compensation related to an FMLC financing described in (f) through (rn) in the Scope of Services will be based on the PRAG Transaction Fees for Single Borrower Transactions through the Florida Municipal Loan Council as outlined in the same Compensation Schedule attached hereto as Attachment I billed at closing of the financing, however such compensation is subject to negotiation with the City should the financing take longer than expected and require additional work by PRAG due to complications with the assessment process. Services described in (n) in the Scope of Services shall be based on the Hourly Rates or Transaction Fee as appropriate. INDEPENDENT FINANCIAL ADVISORS ----PRAG Expenses shall include, but are not limited to, reasonable and necessary travel-related expenses (reimbursed pursuant to Section 112.061, Florida Statutes). In no event will expenses exceed $1,000 without the approval of the City. Term The term of this engagement will be two (2) years beginning from the execution of this Agreement but may be terminated by either party upon thirty (30) days' written notice. Contacts The PRAG contacts that will work with the City on this engagement include: Mickey Johnston, Senior Managing Director, 727-822-3339, mjohnston@pragadvisors.com Wendell Gaertner, Senior Managing Director, 727-822-3339, wgaertner@pragadvisors.com Other Matters PRAG is not providing any legal or accounting advice or counsel under this engagement. Without limiting the foregoing, PRAG is not providing any interpretation of any laws or regulations that may be applicable to the City or that are otherwise related to the work hereunder. Required Disclosures MSRB Rule G-42 requires that municipal advisors provide to their clients certain disclosures of legal events or disciplinary history material to its client's evaluation of the municipal advisor or the integrity of the municipal advisor's management or advisory personnel. MSRB Rule 10 requires municipal advisors to provide certain written information to their clients. Accordingly, PRAG has provided Attachment II attached hereto which includes the required disclosures. We look forward to working with you on this project. Sincerely, PUBLIC RESOURCES ADVISORY GROUP Wendell G. Gaertner Senior Managing Director Accepted by: City of Dania Beach, Florida Frank DiPaolo, Finance Director Date: _______ _ INDEPENDENT FINANCIAL ADVISORS ----PRAG ATTACHMENT I COMPENSATION SCHEDULE PRAG Transaction Fees for Single Borrower Transactions through the Florida Municipal Loan Council Public Offering/Private Placement Bank Loan Par Range Fee Par Range Fee First $50 million $1.00 per $1,000 Up to $30 million $0.60 per $1,000 Above $50 million $0.75 per $1,000 Above $30 million $0.25 per $1,000 Minimum $20,000 Minimum $12,500 Maximum $75,000 Maximum $20,000 Category Hourly Rate Billing Policy Sr. Managing Director $275 No cletical or Managing Director $200 secretarial time is to be billed Vice President $175 Assistant Vice President $150 ----PRAG ATTACHMENT II REQUIRED DISCLOSURES Required Disclosure Pursuant to MSRB Rule G-42 The City of Dania Beach (the "City") has retained Public Resources Advisory Group ("PRAG") as an independent registered municipal advisor to assist with the scope of services pursuant to the letter agreement dated January 24, 2024 (the "Agreement") and attached hereto. Some of these activities qualify as municipal advisory activities pursuant to Section 15B of the Securities Exchange Act of 1934. As a registered municipal advisor, PRAG is required to have written documentation of its agreement with you and must provide certain information to you. This Jetter will serve as the wtitten documentation required under MSRB Rule G-42 of certain specific terms, disclosures and other items of information relating to our municipal advisory relationship as of the date this letter is sigoed by PRAG. 1. Scope of Services (a) Services to be provided: The scope of services with respect to PRAG's engagement with the City (the "Scope of Services") are as described in the attached Agreement. 2. Term. We understand that our engagement will end two (2) years following the execution of the Agreement. In addition, we understand that our engagement may be terminated with or without cause by either party with thirty (30) days' notice. In case of any termination, we believe that the terminating party should endeavor to provide reasonable notice of such termination to the other party so as to pennit an orderly transition. 3. Municipal Advisor's Regulatory Duties When Servicing the City. MSRB Rule G-42 requires that PRAG make a reasonable inquiry as to the facts that are relevant to the City's determination whether to proceed with a course of action or that form the basis for the advice provided by PRAG to the City with respect to municipal financial products or the issuance of municipal securities, including with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues, based on all the facts and circumstances. The rule also requires that PRAG undertake a reasonable investigation to determine that it is not basing any recommendation on materially inaccurate or incomplete information. PRAG is also required under the rule to use reasonable diligence to know the essential facts about the City and the authority of each person acting on the City's behalf. Accordingly, PRAG will seek the City's assistance and cooperation, and the assistance and cooperation of the City's agents, with the carrying of these regulatory duties, including providing PRAG with accurate and complete infonnation and reasonable access to relevant documents, other infonnation and personnel needed to fulfill such duties. In addition, if the City provides direction to PRAG to review a recommendation made by a third party, PRAG requests that the City provide any information it has received from such third party relating to its recommendation. 4. Compensation. The form and basis of compensation for PRAG's services as municipal advisor are as provided in this Agreement. 5. Disclosures of Conflicts of Interest. MSRB Rule G-42 requires that municipal advisors provide to their clients 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. Accordingly, PRAG makes the following disclosures with respect to material conflicts of interest in connection with the Scope of Services under this Agreement, together with explanations of how PRAG addresses or intends to manage or mitigate each conflict. With respect to all of the conflicts disclosed below, PRAG mitigates such conflicts through its adherence to its fiduciary duty to the City, which includes a duty of loyalty to the City in performing all municipal advisory activities for the City. This duty ofloyalty obligates PRAG to deal honestly and with the utmost good faith with the City and to act in the City's best interests without regard to PRAG's financial or other interests. (a) Compensation-Based Conflicts: The transactional fees due under this Agreement will be contingent upon the successful closing of a transaction and is based on the size or nature of the transaction. While this fonn of compensation is customary in the municipal securities market, this may present a potential conflict of interest because it could create an incentive for PRAG to recommend unnecessary financings or financing structures that are disadvantageous to the City or to advise the City to increase the size of the issue. In addition, for non-transactional services, fees may be paid based on hourly fees of PRAG's personnel, with the aggregate amount equaling the number of hours worked by such personnel times agreed-upon hourly iPRAG billing rates. This presents a potential conflict of interest because PRAG may have the incentive to spend more time than necessary on an engagement. If the hourly fees are subject to a maximum amount, the potential conflict of interest arises because of the incentive for PRAG to fail to do a thorough analysis of alternatives and/or recommend alternatives that would be less time-consuming for staff. (b) Other Municipal Advisor Relations/tips: PRAG serves 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 the City. For example, PRAG serves as municipal advisor to other municipal advisory clients and, in such cases, owes a regulatory duty to such other clients just as it does to the City under this Agreement. These other clients may, from time to time and depending on the specific circumstances, have competing interests. In acting in the interests of its various clients, PRAG could potentially face a conflict of interest arising from these competing client interests. PRAG cmTently serves as an independent registered municipal advisor to the Florida League of Cities ("FLC") and the FMLC. At this time we are not aware of any divergence of interest between the City and the FLC or FMLC and, as such, we have no conflicts in connection with providing services to the City. 6. Disclosures oflnformation Regarding Legal Events and Disciplinary History. MSRB Rule G-42 requires that municipal advisors provide to their clients certain disclosures of legal events or disciplinary histmy material to its client's evaluation of the municipal advisor or the integrity of the municipal advisor's management or advismy personnel. Accordingly, PRAG sets out below required disclosures and related information in connection with such disclosures. There are no legal events or disciplinary history that are material to the City's evaluation of PRAG or the integrity of PRAG's management or advisory personnel disclosed, or that should be disclosed, on any Form MA and Form MA-I filed with the SEC. The City may electronically access PRAG's most recent Form MA and each of our most recent Form MA-I filed with the SEC at the following website: www.sec.gov/edgar/searchedgar/companysearch.html. PRAG has not made any material, legal or disciplinary event disclosures on Fonn MA or any Form MA-I filed with the SEC. 7. Future Supplemental Disclosures. As required by MSRB Rule G-42, this letter may be supplemented or amended, from time to time as necessaiy, to reflect changed circumstances resulting in new conflicts of interest or changes in the conflicts of interest described above, or to provide updated infonnation with regard to any legal or disciplinary events of PRAG. PRAG will provide the City with any such supplement or amendment as it becomes available throughout the tenn of the Agreement. Required Disclosure Pursuant to MSRB Rule G-10 Public Resources Advisory Group, Inc. is cmTently registered as a Municipal Advisor with the U.S. Securities and Exchange Commission and the Municipal Securities Rulemaking Board ("MSRB"). As a Municipal Advisor, we are required to provide the following written infonnation to our municipal entity and obligated person clients in accordance with MSRB Rule G-10: The MSRB website at www.msrb.org, includes the Municipal Advisory client brochure that describes the protections that may be provided by the MSRB Rules and how to file a complaint with an appropriate regulatory authority.