2000-386ORDINANCE NO 0900(:3 - ~<~ G~
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A FINANCIAL
ADVISORY AREEMENT BETWEEN THE CITY OF DENTON AND FIRST SOUTHWEST
COMPANY, APPROVING THE EXPENDITURE OF FUNDS THEREFOR, AND
PROVIDING FOR AN EFFECTIVE DATE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION 1 The City Cotmcfl hereby approves the Financial Admsory Agreement,
attached hereto, between the City of Denton and F~rst Southwest Company, and the C~ty
Manager is hereby authorized to execute the agreement on behalf of the C~ty
SECTION 2 The City Council approves the expenditure of funds for stud agreement as
authonzed m the attached agreement
SECTION 3 This ordinance shall become effective ~mmedlately upon its passage and
approval
PASSED AND APPROVED thru the [ ~5/~ day of ~0_~/qtv t" ,2000
EULINE BROCK, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
FEXTANCIAL ADVISORY AGREEMENT
By and Between
CITY OF DENTON, TEXAS
(Herein referred to as the "City")
and
FIRST SOUTHWEST COMPANY
It is understood that the City will have consideration from time to t~me the authorization
and issuance of indebtedness m mounts and forms which cannot presently be determined
and that m connection with the authorization, sale, issuance and delivery of such
~ndebtedness of the City, we have been requested to submit a proposal to provide
professional services to the City m 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 City, shall become the agreement (the "Agreement") between
the City and First Southwest Company effective at the date of ~ts acceptance as provided
for herein below
A TI'ns agreement shall apply to any and all evidences of indebtedness or
debt obhgatlons that may be authorized and issued or otherwise created or assumed by
the City (hereinafter referred to collectively as the "Debt Instruments") from time to time
dunng the period in which this Agreement shall be effective
B We agree to provide our professional services and our faclhtles as
Financial Advisor and agree to direct and coordinate all programs of financing as may be
considered and authonzed dunng 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 lnmdent to litigation, mandamus
action, test case or other similar legal actions
C We agree to perform the following duties normally performed by such
financial adwsors and all other duties as, m our judgment, may be necessary or advisable
1 We will conduct a survey of the financial resoumes of the City to
determine the extent of its capamty to authorize, issue and service debt This survey will
include an analys~s 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
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 City, resulting from ~mprovements to be financed
by the Debt Instruments 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
2 On the basis of the information developed by the survey descnbed
above, and other information and experience available to us, we will submit to the City
our recommendations on the Debt Instruments under consideration lncludmg 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 and marketing experience with the goal of designing Deb
Instruments which can be sold under terms most advantageous to the City and at the
lowest interest cost consistent with all other considerations
3 We will advise the City of current bond market conditions, forthcoming
bond issues and other general lnformatlon and economic data which might normally be
expected to influence interest rate or bidding conditions so that the date of sale of the
Debt Instruments may be set at a time which in our opinion, and yours, will be favorable
4 We understand the City has retained, or will retain, a firm ofmumcipal
bond attorneys ("Bond Counsel") whose fees will be paid by the City 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 reqmred for the preparation of necessary petitions, orders, resolutions,
ordinances, notices and certfficates in connection with the election
5 We will recommend the method of sale of the Debt Instruments that, in
our oplmon, is in the best interest of the City and will proceed, as directed by the City,
with one of the following methods
a Advertised Sale We will superwse the sale of the Debt
Instruments at a public sale in accordance with procedures set out here~n We reserve the
right, either acting alone or in conjunction with others, to submit a bid for any debt
Instruments issued under th~s Agreement which the City advertises for competitive bids
b 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 direct 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 Offenng Memorandum We w~ll cooperate
with the underwnters in obtaimng any Blue Sky Memorandum and Legal Investment
Survey, preparation of the Bond Purchase Contract, Underwriters Agreement and any
other related documents The costs thereof, including the pnntlng of the documents, will
be pa~d by the underwriters
6
forthcoming sale
an formation
When appropraate, we wall advase financaal pubhcataons of the
of the Debt Instruments and provide them wath all pertanent
7 We wall coordanate the preparation of the Notice of Sale and
Badd~ng Instruetlons, Officml Statement, Officaal Bid Form and such other documents as
may be required We wall submit to the Caty all such documents for examanataon,
approval and certfficatIon After such examanataon, approval and certfficatxon, we will
prowde the City w~th a supply of all such documents sufficaent to ars needs and wall
dastnbute by marl sets of the same to prospective bidders and to banks, lafe, fire and
casualty insurance companaes, anvestment counselors and other prospecUve purchasers of
the Debt Instruments We wall also promde sufficaent copaes of the final Officaal
Statement to the purchaser of the Debt Instruments an accordance w~th the Notace of Sale
and Bidding Instructions
8 We will, after consultang wath the Caty, arrange for such reports
and op~mons of recognized andependent consultants we deem necessary and requared an
the successful marketing of the Debt Instruments
9 Subject to the approval of the Caty, we will organaze and make
arrangements for such investor mformataon meetangs as, an our judgment, may be
necessary
10 We will make recommendations to the City as to the advlsablhty
of obttumng a credit rating, or ratings, for the Debt Instruments and, when directed by the
City, we will coordinate the preparation of such anformatlon as, m our oplmon, ~s
required for submission to the rating agency, or agencies In those cases where the
admsabfllty of personal presentation of lnformataon to the ratang agency, or agencaes, may
be lndmated, we will arrange for such personal presentations, ~nclud~ng representatives
from the City
11 We will assist the staff of the City at any advertased sale of Debt
Instruments m coordinating the receipt and tabulataon and comparison of bids and we will
adwse the City as to the best bid We will provade the C~ty w~th our recommendation as
to acceptance or rejection of such bid
12 As soon as a bad for the Debt Instruments ~s accepted by the Caty,
we will proceed to coordinate the efforts of all concerned to the end that the Debt
Instruments may be delavered and prod for as expedatlously as possable We shall assist
the City m the preparataon or veraficataon of final closang figures ancadent to the dehvery
of, and payment for, the Debt Instruments
13 We will maintain halson wath Bond Counsel ~n the preparation of
all legal documents pertaanmg to the authorazatlon, sale and assuance of the Debt
Instruments Bond Counsel wall provide an unqualafied legal opanaon as to the legality of
the ~ssuance of the Debt Instruments at the tame of delavery
14 If requested, we will counsel with the C~ty in the select~on of a
Trustee and Paying Agent/Registrar for the Debt Instruments, and we will assist ~n the
preparation of agreements pertinent to these services and the fees incident thereto
15 In the event formal verification by an independent auditor of any
calculations incident to the Debt Instruments is reqmred, we will make arrangements for
such services
16 We agree to coordinate all work incident to pnnt~ng and execution
of the Debt Instruments
17 After the closing of the sale and delivery of the Debt Instruments,
we will dehver to the Ctty a schedule of annual debt service reqmrements of the Debt
Instruments In coordination w~th Bond Counsel, we will assure that the Paying
Agent/Registrar has been prowded with a copy of the authorizing ordinance, order or
resolution
18 We will attend any and all meetings of the governing body of the
Cxty, ~ts staff, representatives or committees as requested at all times when we may be of
asmstance or sermce and the subject of financing is to be d~scussed
19 In concert w~th Bond Counsel we w~ll adwse the City and ~ts staff
of changes, proposed or enacted, m Federal and State laws and regulations which would
affect the mumc~pal bond market
20 We will work with the City, its staff and any consultants employed
by the City m developing financml feambthty studies and analyzing alternative financmg
plans
D In addition to the services set out above, we agree to provide the following
services when so request
1 We will prowde our advice as to the :nvestment of certmn funds of
the City We will, when so d~rected, purchase those :nvestments authorized to be
purchased and, except for mvestmant of the proceeds of Debt Instruments, we wall charge
a normal and customary commismon, to be mutually agreed upon, for each such
transaction
2 We w~ll provide our advtce and assistance with regard to
exermsmg call and/or refunding of any outstanding Debt Instruments
3 We will prowde our advice and assistance in the development of,
and financing for, any capital ~mprovements programs of the City
4 We wall provide our adwce and assistance ~n the development of
the long-range financing plan of the City
5 We w~ll provide any other financing planmng sermces as may be
requested by the City
E The fee due to F~rst Southwest Company calculated ~n accordance w~th
Appendix A attached hereto, any other fees as may be mutually agreed upon and all
expenses for whmh F~rst Southwest Company ~s entitled to reimbursement, shall become
due and payable concurrently with the dehvery of the Debt Instruments to the purchaser
F This Agreement shall become effective at the date of acceptance by the
City set out hereto below and shall mmmn m effect thereafter for a period of five (5)
years from the date of acceptance This Agreement will be automatically renewed for
successive one (1) year periods on each anniversary date unless otherwise terminated, in
writing, by either party This Agreement may be terminated w~thout cause by the C~ty or
F~rst Southwest upon thirty (30) days' written notme to the other party In the event of
such termination, ~t is understood and agreed that only the amount due First Southwest
for services provided and expenses incurred to the date of termination will be due and
payable No penalty wall be assessed for termination of this Agreement
This Agreement is submitted in duplicate originals When accepted by the City, ~t,
together with Appendix A attached hereto, w~ll constitute the entire Agreement between
the City and First Southwest Company for the purposes and considerations herein
specified Acceptance w~ll be ~nthcated by the signature of authorized officials of the
City together with the date of acceptance on both copras and the return of one executed
copy to First Southwest Company
Respectfully submitted,
FIRST SOUTHWEST COMPANY
By
By
APPENDIX A
CITY OF DENTON, TEXAS
FEE SCHEDULE AND EXPENSE ITEMS
In consideration for the services rendered by us, ~t is understood and agreed that our fee
for each ~ssue of Debt Instruments will be as follows
Base Fee - Any Issue $ 5,000
Plus $7 50 per $1,000 up to $ 500,000
Plus $5 00per$1000 next $ 500,000
Plus $3 00 per $1000 next $ 1,500,000
Plus $2 50 per $1000 next $ 2,500,000
Plus $1 75 per $1000 next $ 5,000,000
Plus $1 00 per $1000 next $10,000,000
Plus $0 75 per $1000 next $10,000,000
Plus $0 50 per $1000 next $20,000,000
Plus $0 40 per $1000 next $50,000,000
The above charges shall be increased by an additional charge, mutually agreeable to the
C~ty and the Company for the ~ssuance of refunding bonds, reflecting addmonal services
and expenses reqmred
The Cxty will be responmble for the payment of the expenses hsted below The payment
of reimbursable expenses that the Company has assumed on behalf of the City shall not
be eontmgent upon the Dehvery of the Debt Instruments
· Bond counsel
· Bond pnntmg
· Bond ratings
· Credit enhancement
· Officml statement pnnt~ng and postage
· Paying agent/registrar/trustee
· Travel expenses of C~ty personnel
· Travel expenses of Company's personnel, w~th prior approval
· Mmcellaneous, ~ncludlng copy, dehvery
Normally associated w~th Refunding Bond Issues
· Computer structunng
· Underwriter and underwriters counsel
ACCEPTANCE CLAUSE
The above and forego,ng is .heart, by in all thm~s .a~c~ep}e_d and approved by the City of
DentoN, Texas on this the/'/7~'~ day of F_.J~ , 2000, by action of
the City of Denton, Texas
By ~~~
MICHAEL W JE~, CIT~t~NAGER
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL~ORM
HERB~OU~TY/~YATTORNEY
BY