Fort Walton Beach Council agenda — 02-09-2010 Regular — reading text

toto priceprice theirtheir portfoliosportfolios onon aa dailydaily basisbasi , s, toto quantifyquantify thethe aggressivenessaggressiveness ofof anyany individualindividual newnew issueissue pricingpricing relativerelative toto thethe restrest of of the the market.market. ThisThis modelmodel complementscomplements PFM'PFM' ss alreadyalready extensiveextensive anecdotal anecdotal knowledge knowledge ofof thethe markets markets andand givesgives usus thethe uniqueunique abilityability toto provideprovide ourour clientsclients withwith quantifiablequantifiable andand objectiveobjective datadata toto supportsupport ourour pricingpricing recommendations.recommendations. Finally,Finally, nono otherother municipalmunicipal financialfinancial advisoradvisor hashas committedcommitted itselfitself toto thethe investment investment advisory advisory businessbusiness inin thethe wayway thatthat PFMPFM has.has. SinceSince ourour InvestmentInvestment AdvisoryAdvisory GroupGroup hashas threethree " " traders"traders" whowho executeexecute tradestrades forfor client'client' ss accountsaccounts averagingaveragi $ ng $ 150150 millionmillion perper day,day, wewe areare inin totaltotal andand dailydaily contactcontact withwith thethe U.U. S.S. governmentgovernment bondbond market,market, thethe marketmarket thatthat heavilyheavily influences influences thethe pricingpricing ofof municipal municipal securities.securities. 86-86-  After the pricing is completed, PFM will provide the CITY with a financial advisor' s memorandum so that the CITY can evaluate the fairness of the pricing of its bonds. Contained in the memorandum is a list of yields on recently priced comparable issues, a list of underwriter' s fees on recently priced comparable issues, municipal market conditions leading up to and on the day of the sale, a description of the call provisions, ratings, credit enhancements and special features of the issue and a general background of the issue. This document serves not only as a measure of the fairness of the sales terms but as a comprehensive reference to which the CITY may refer in the future. 10. Assist with Gosingthe Bond Issue. PFM will work with all parties involved with the closing to prepare a schedule of tasks to be completed prior to closing and identify the party responsible for if printed completing the task. These tasks include printing and preparing bond certificates ( bonds are used), completing the final official statement, preparing closing documents, arranging for the transfer of funds and investment of funds. In preparation for closing, PFM will work with the CITY' s bond counsel and other members of the financing team to prepare and review all required documentation. This will include our direct dealings with the official statement printer and bond printer, as well as coordination of bond registration with the underwriter and registrar. Our advisory team will arrange for either registration of the bonds with the Depository Trust Company or delivery of the bonds and the Other simultaneous transfer of " same day" funds into the accounts identified by the CITY. closing arrangements will also be completed so that officials of the CITY can be confident that each transaction will be completely and professionally brought to a close. Through PRXs affiliated registered investment advisor, PFM Asset Management, LLC, PFM is also prepared to offer the CITY its full range of investment management and arbitrage rebate compliance services. This might include the procurement of structured investment products or other investment securities for a bond construction account or refunding escrow. If needed, these services would be performed by PFM Asset Management, LLC pursuant to a separately negotiated letter agreement. 87_  Service to be ranked: Financial Advisor Services CONSULTANT SERVICES PROPOSAL RANKING SUMMARY Name of Community: CITY OF LAKE WALES, POLK COUNTY, FLORIDA Name of Person Ranking Firms: Dorothy Pendergrass Firm A: The PFM Group Firm B: First Southwest Company Firm C: Firm D: Firm E: Firm F: Firm G: Firm H: POSSIBLE EVALUATION FACTORS A B C DD E FF G HH POINTS 1. Summary of Fee Schedule 2525 25 1515 Project Understanding, proposed approach, 25 25 25 methodology 3. Summary of Proposer' s Qualifications 25 25 25 Completeness of proposal and complies with 25 25 25 requested information. TOTAL 100 100 90 The First Ranked Firm is: The Second Ranked Firm is: The Third Ranked Firm is: Proposal Ranked by: Signature: 88-  MEMORANDUM April 28, 2009 TO: Honorable Mayor and City Commissioners AGO VIA: Anthony G. Otte, City Manager FROM: Dorothy Pendergrass, Finance Director RE: Financial Advisory Services Agreement SYNOPSIS: Contract with Public Financial Management, Inc. forfinancial advisory services. STAFF RECOMMENDATION: Authorize the the proposed agreements with Public Financial City Manager to execute Management, Inc. ( The PFM Group) for provision of financial advisory services. BACKGROUND: On October 29, 2003, the City Commission approved the selection of William R. Hough & Company as the City' s financial advisor. The City Commission authorized the City Manager to execute the initial service agreement with an ending date of November 4, 2004, renewal each year thereafter. On February 17, 2009, the City issued a request for proposal for financial advisory services. The PFM Group and First Southwest Company submitted proposals. A selection committee selected the PFM Group for recommendation to provide financial advisory services to the City. The attached financial advisory agreement is for five years and the agreement may be renewed thereafter by the City upon written notice to the financial advisor and written acceptance of the same. In addition, either party may cancel and terminate the agreement upon thirty ( 30) days' written notice to the other party. The agreement authorizes the PFM Group act as Financial Advisor to the City. Upon request, the PFM Group may assist, evaluate, and advise Staff regarding: The development of capital plan and financial policies Review of existing debt structure and review of the capital budget Analyze future debt capacity and identify financing alternatives Develop and monitor financing schedule and analyze structure alternatives Recommend a negotiated or competitive sale, assist issuer in selecting working group members and procuring services for underwriter selection Work with members of working group to develop financing terms, develop financing documents, coordinate the marketing of bonds, and assist with rating agency presentations and assist with the pricing of bonds and bond closing. As Financial Advisor they will be available to attend meetings and participate in conference calls and conferences with City personnel and other consultants. 89_ FISCAL IMPACT: City Debt Issuance Services For tasks outlined in EXHIBIT A of the contract related to debt issuance, FINANCIAL ADVISOR shall be compensated based on the following fee schedule for advisory services on debt transactions including bonds, notes, loans, capital leases, and other debt obligations whether taxable or tax -exempt, fixed rate or variable rate). TRANSACTION $ 111 95/$ 1, 000 par Debt Transaction 1 — 20, 000 amount 80 /$ 1, 000 par Debt Transaction 20, 001 - 40,000 amount 65/$ 1, 000 par Debt Transaction 40, 001 amount Minimum Debt Transaction Fee 17, 500 These contingent fees are subject to a minimum fee of $17, 500 per bond/ bank issue. For multi- purpose debt transactions, such as combined new money and refunding, the above fee schedule would be multiplied by 150 %. Negotiated and competitive transactions are billed at the same rate. Refunding issues will also be billed in accordance to the schedule above, with the exception of a $ 2, 500 addition for extra services required for refunding. Notes ( Bank Loans) and other financing that require a limited scope of services will be billed at 60% of the bond fees referenced above subject to a minimum fee of $12, 500. For non -transactional services as specified in the Scope of Services, the following hourly rates shall be paid for the indicated levels of experience or their equivalents. Experience Level Hourly Rate Managing Director & Senior Managing Consultant $ 190. 00 Consultant $ 180. 00 Administrative Staff $ 125. 00 Structured Products, Investment Advisorv, and ArbitraLre Rebate Services The financial advisory compensation proposed above does not apply to services related to procurements of bond proceeds investments, investment management, or arbitrage rebate. Fees for these special services shall be negotiated as a function of the complexity of the proposed engagement and the specific scope of services outlined. PFM Asset Management, LLC, registered investment advisor, is prepared to offer the City its full range of investment management and arbitrage rebate compliance services. This might include the procurement of structured investment products or other investment securities for a bond construction account or refunding escrow. If needed, PFM Asset Management, LLC, would perform these services pursuant to a separately negotiated letter agreement. PFM Asset Management, LLC fully discloses all fees related to any transaction. 90- Swaps Swaps used as debt management tools would also be subject to a negotiated fee