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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