Request for Proposals_Financial Advisor THE CITY OF 411WA Dubuque
D UBE All-America City.
Masterpiece on the Mississippi
2012
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Financial Advisor Services
DATE: July 24, 2012
Budget Director Jennifer Larson is recommending City Council approval of Piper Jaffray
for financial advisor services for City of Dubuque in connection with issuing bonds for
future projects, bond refundings, and debt capacity, debt structuring and cashflow
analysis.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
/7AAh kt1&1
Michael C. Van Milligen
MCVM:jml
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
Jenny Larson, Budget Director
Kenneth TeKippe, Finance Director
Masterpiece on the Mississippi
TO: Michael C. Van Milligen, City Manager
FROM: Jennifer Larson, Budget Director
SUBJECT: Financial Advisor Services
DATE: July 24, 2012
INTRODUCTION
Dubuque
Leal
All- America City
11111r
2012
The purpose of this memorandum is to recommend approval of Piper Jaffray for financial
advisor services for the City of Dubuque.
DISCUSSION
A request for proposal (RFP) was developed relative to providing financial advisor services to
the City of Dubuque in connection with issuing bonds for future projects, bond refundings and
debt capacity, debt structuring and cashflows analysis. The RFP was distributed to thirteen
firms. Five firms submitted quality proposals in response to the invitation. The firms that
submitted proposals included: Northland Securities; Public Financial Management (PFM);
Piper Jaffray, Inc.; Speer Financial, Inc.; and Independent Public Advisors. Two of the firms
submitting proposals (Northland Securities and Piper Jaffray, Inc) also provide underwriting
services (buy /sell bonds), but agreed in writing not to bid on underwriting services, place
bonds or be part of any syndicate bidding on the City's bonds if awarded the City contract for
providing financial advisor services.
A committee was established to review the proposals, interview selected firms and provide a
recommendation. The committee included Finance Director Ken TeKippe, Assistant Finance
Director Jean Nachtman and Budget Director Jennifer Larson. After reviewing the proposals,
three firms were invited to Dubuque for interviews. The firms interviewed included Northland
Securities; Public Financial Management (PFM); and Piper Jaffray, Inc. All of the firms would
be able to adequately serve as our advisor based on the RFP responses and interviews.
It is the consensus of the committee that Piper Jaffray, Inc. be selected as the City's financial
advisor for at least the next five years.
Factors that contributed to the selection included:
• Size of firm
• Number of Iowa governmental bodies that are currently clients of firm (School Districts
including Dubuque, Sioux City, Ames, Council Bluffs, Waterloo, Cedar Rapids,
Ballard, Gilbert, Knoxville, Johnston, North Polk and West Des Moines; Cities
including Coralville, Burlington, Fairfield, Fort Madison, Grimes, New Hampton,
Urbandale, Keokuk, DeWitt and Waukon; and Counties including Boone and Polk.
• Work to be completed in the Des Moines office
• Positive comments on firm from City's bond counsel, Bill Noth since Piper Jaffray
agreed in writing not to underwrite, place bonds or be part of a syndicate bidding on
City of Dubuque bonds
• Competitive fees
• Quality of proposal, interview presentation and responses to interview questions
• Ease of working with the primary individual(s) assigned to City
• Number and dollars of bond issues involved in Iowa and across the country
There has been significant staff turnover at Public Financial Management in the past three
months. During the interview process, it was presented to the City that PFM would provide a
team approach, headed by Jenny Blankenship, Senior Managing consultant, to serve the
City's needs. They operate with a queue approach and work is assigned to staff available.
Previously, the City had been assigned one person to handle all calculations and bond sales
for the City.
Piper Jaffray, Inc. represented during the interview that they would assign two members of its
staff to handle all requests and bond sales, Managing Director Timothy Oswald and Vice
President Travis Squires. City staff would be able to call at any time to speak directly to either
Tim or Travis to have any questions addressed or analysis performed. It is important to City
staff that the contacts are consistent due to the complexity and frequency of information that
is requested.
Piper Jaffray, Inc.'s fees are 1/8 of 1% of the par amount issued for General Obligation bonds
with a floor of $8,000 per issue and a cap of $15,000 per issue. Revenue bonds are .25% of
the par amount issued with a floor of $9,000 and a cap of $20,000 per issue. There is no
annual retainer fee. There is not a fee for continuing disclosure if it only involves the financial
advisor uploading a Certified Annual Financial Report (CAFR) that includes the required
tables to Electronic Municipal Market Access.
It was the consensus of the committee that both PFM and Piper Jaffray could adequately
serve as financial advisor; however it was more favorable to hire a financial advisor that could
dedicate staff as a resource to the City of Dubuque as opposed to a team /queue system.
Although price was not a primary consideration, the fees proposed by Piper Jaffray are lower
than PFM.
Copies of the RFP and Piper Jaffray's proposal are attached.
RECOMMENDATION
I respectfully recommend the approval of Piper Jaffray, Inc. as the City's financial advisor for
at least the next five years.
Attachments
2
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Prepared by
Tim Oswald
Managing Director
515/247 -2358
June, 2012
Since 1895. Member SIPC and FINRA.
PiperJaffray & Co.
Financial Advisory Services
Request for Proposal
City of Dubuque, Iowa
GUIDES FOR
THE JOURNEY®
Pip erJaffray.
Table of Contents
Section 1 Profile of Firm
Section 2 Statement of Qualifications
Section 3 Scope of Services
Section 4 References
Section 5 Insurance
Section 6 Fees and Compensation
Section 7 Special conditions
Section 8 Legal Violations and Conflicts of Interest
Section 9 Questions that We think the City should be asking
Section 10 Sample form of time line (Get Started Letter)
Financial Advisory Services proposal for City of
Dubuque, Iowa
GUIDES Er PiperJaffray
- 1 - THE JOURNEY'
Section 1 - Profile of Firm
Date the firm was established, location of the firm's main office and other offices and
the number of employees in each office, and whether the firm is a member of the
National Association of Independent Public Financial Advisors (NAIPFA).
Ownership and Philosophy
Piper Jaffray is an equal - opportunity employer and a full service investment banking
firm founded in 1895. Headquartered in Minneapolis, Piper is a publicly owned
securities firm (NYSE: PJC), maintaining 31 offices primarily in the Midwest, Rocky
Mountain, Southwest, Eastern and Pacific Coast states, as well as three international
offices (London, Shanghai, Hong Kong). We serve corporations, government and non-
profit entities, and institutional investors on a national basis predominantly across the
western half of the United States. Piper Jaffray has capabilities and expertise that rival
those of national firms in our areas of focus.
Our public finance offices and staffing are as follows:
Office Bankers Admin Support
Albany 2
Atlanta 1 1
Birmingham 1
Boston 1
Charleston 2
Chicago 2
eve a� 2
Dallas 2 1
Denver 6 2
Des Moines 4 1
El Segunno 12 2
Hartford 1
Helena 1
Houston 4 1
Indianapolis 1
Jacksonville 2
Kansas City 9 2
Memphis 2
Mil ee 1 1
Minneapolis 16 4
Nashville 1
Orange County 3
Philadelphia 6
Phoenix 5 1
Pittsburgh 7 2
Portland 1
Sacramento 1
St. Louis 6 1
San Antonio 1
San Francisco 9 1
Seattle 3 1
Washington DC 2
117 22
Financial Advisory Services proposal for City of GUIDES FOR
Dubuque, Iowa - 2 - THE JOURNEY"
PiperJaffray.
Section 1 - Profile of Firm, continued
As a regulated Broker - dealer, we are members of, and regulated by, FINRA and subject
to rules and regulations of the Municipal Securities Rulemaking Board and Securities
Exchange Commission. Employees that would assist the City all maintain Series 7 and
63 licenses (among others). The MSRB was established by an act of Congress to write
rules for the municipal securities industry, enforced by the SEC and FINRA. Only
registered broker - dealers are, at this point, subject to the rules of the MSRB (though this
will change in years to come).
As a broker dealer, Piper is not eligible to be a member of the National Association of
Independent Public Financial Advisors, a trade - organization created by independent
financial advisors to advocate for their interests.
Piper Jaffray has a philosophy honoring a commitment to client service, and providing a
quality work environment for its employees. These values are reflected in the
company's guiding principles below:
We create and implement superior financial solutions for our clients. Serving clients is our
fundamental purpose.
We earn our clients' trust by delivering the best guidance and service.
Great people working together as a team are our competitive advantage.
As we serve, we are committed to these core values:
Always place our clients' interests first
Conduct ourselves with integrity and respect and treat others with respect
Work in partnership with our clients and each other
Maintain a high - quality environment that attracts, retains and develops the best
people
Contribute our talents and resources to serve the communities in which we live
and work
We have a strong tradition of supporting our communities. We provide support in
many ways, including cash grants, loan assistance, in -kind donations, and sponsorships
of nonprofit organizations. Employees donate thousands of hours of volunteer time
each year and their personal contributions to community and higher education
nonprofit organizations are matched through the company's Matching Gift Program.
Our company's size and strength ensure that we continue to be a leading corporate
citizen where we do business.
Financial Advisory Services proposal for City of
Dubuque, Iowa
GUIDES FOR
- 3 - THE JOURNEY'
PiperJaffray
Section 1 - Profile of Firm, continued
Capital Markets Overview
Value is achieved through focus on: creative investment banking and underwriting to
meet the needs of strategic clients, and quality advice, product and execution for select
investors in fixed- income products.
iDenver
NeYork
Baltimore
ashington, DC
Jacksonville
• Public Finance 011 ices
A Sales Caicos
7r Trading Desks
'el Corporate Headquarters
Public Finance Overview
The Piper Jaffray Public Finance department is staffed by 139 employees, including 117
investment banking professionals in 32 offices. Our investment bankers possess the
understanding, knowledge and creativity needed to meet the capital needs of a diverse
group of public sector, nonprofit and for - profit debt issuers. These investment bankers
are committed to and capable of meeting the financing needs of clients of all sizes.
In 2011, the department managed 573 negotiated bond issues totaling over $36.55
billion; 443 of which were sole or senior managed. In addition, the department served
as a financial advisor on 155 separate issues totaling $1.60 billion. The firm ranks
number two in the Midwest by volume for municipal long -term underwritings sole or
senior - managed. (Paragraph source: Thomson Financial)
Regional Market Areas
The Public Finance department is able to provide top quality service to clients by having
our investment bankers located strategically throughout the country. We are members
of our local communities, which enables us to readily respond to our clients' requests.
Following is a brief overview of the regional markets covered by Piper Jaffray.
Financial Advisory Services proposal for City of GUIDES FOR
Dubuque, Iowa - 4 - THE JOURNEY'
PiperJaffray,
Section 1 - Profile of Firm, continued
Midwest
Piper Jaffray has been a leading underwriter of municipal issues in this region since
1990. This is a direct result of our strong presence in the Midwest including our
headquarters in Minneapolis and offices in Chicago, Des Moines, Kansas City,
Milwaukee and St. Louis. A total of 40 investment banking professionals work with a
wide variety of clients in these and other states in the region in several specialty areas
including housing, health care, higher education finance and state and local government
including school and special districts.
Rocky Mountain
We have seven investment banking professionals in Denver and Helena covering the
states in the Rocky Mountain region. Our office in Denver has been m existence since
1990. This office focuses heavily on clients in Colorado, Utah and Wyoming, with
additional business extending to other states in the region. In addition, for more than a
decade we have maintained an office in Helena that has been a key element in our firm's
significant presence in Montana municipal underwriting.
Pacific Northwest
We have four investment banking professionals in Seattle and Portland covering the
Pacific Northwest states of Washington, Idaho and Oregon. We have functional
specialists in governmental, health care and housing finance in this region.
California
We have offices in San Francisco, Los Angeles, Sacramento and Orange County where
25 investment banking professionals and analysts provide a strong presence in the
California market. Our California offices specialize in education finance and serve as
the state's leading Public Finance firm to local school districts. They also specialize in
city and redevelopment finance with significant experience in California land -based
financings.
Southwest
Our offices in Dallas, Houston, Phoenix and San Antonio concentrate on serving issuers
in the southwest region of the United States. With 12 investment banking professionals
in Arizona and Texas, we are among the major Public Finance firms in this region.
East
Our 29 investment banking professional in our Albany, Boston, Hartford, Indianapolis,
Jacksonville, Memphis, Nashville, New York, Philadelphia and Pittsburgh offices
concentrate on serving issuers in the eastern region of the United States.
Additional ResQurces,
Although our proposal is to act as financial advisor to the City, additional resources
available to our advisory staff include our extensive experience as an active player in the
municipal marketplace, buying, selling and supporting municipal issues in the primary
and secondary market, as well as a provider of derivative solutions to clients seeking
such structures. Our advisory services reflect the fact that our staff has daily access to
our sales and trading operations, access which allows us to provide unique guidance to
our financial advisory clients not generally available to governmental bodies whose
financial advisors are not broker dealers.
Financial Advisory Services proposal for City of
Dubuque, Iowa
GUIDES FOR 1 PiperJaffray.
- 5 - THE JOURNE]C•
Section 2 — Statement of Qualifications
Location of Office that will assist the City
We maintain a 4- person public finance staff in our Des Moines, Iowa office, who
specialize primarily in local government securities work with Iowa governmental
bodies. Piper has maintained an office in Iowa providing financial advisory services to
Iowa governmental bodies since 1987, when it acquired the Iowa based staff from the
failed E. F. Hutton, who had a presence in Iowa since the early 1980's.
Timothy J. Oswald
Piper Jaffray & Co.
3900 Ingersoll Ave, Suite 110
Des Moines, IA 50312
247 -2358 (direct dial)
280 -7567 fax
timothy.j.oswald@pic.com
Rankings as Financial Advisor for Competitive Sales in Iowa
According to Piper Jaffray files, presented below are the number of transactions and par
amount, as well as percentages, of competitively -sold securities in Iowa over the 2005-
2011 calendar years (negotiated sales and private placements are not included).
# Issues Par Value of % of Number % of Par
Financial Advisor Advised Advised Issues Issues Advised Value Advised
Piper Jaffray 743 3,334,199,029 48.22% 35.98%
PFM 421 3,057,444,000 27.32% 33.00%
Speer Financial 176 733,375,000 11.42% 7.91%
Springsted 127 1,756,175,000 8.24% 18.95%
Ruan Securities / D.A. Davidson 55 309,615,000 3.57% 3.34%
Northland Securities 19 75,48S,000 1.23% 0.81%
Totals
1,541 9,266,293,029 100.00% 100.00%
Team that will work with the City
Our team will include Tim Oswald and Travis Squires in our Des Moines, Iowa office.
Mr. Oswald is the primary contact for all dealings with the City, and is the senior
banker and principal in charge in our Des Moines office. Backup to Mr. Oswald will be
provided by Travis Squires. Mr. Squires will be involved in all aspects of the City's
financings. In addition to Tim and Travis, an analyst will be assigned to provide
financial modeling support, final numbers with respect to bond sales, gaming cash flow
analysis, TIF analysis (if any), and utility cash flow analysis, including future
borrowing/capital expenditure capacity. Each of the individuals involved have
experience assisting cities, counties and school corporations in Iowa.
The resumes are presented below:
Financial Advisory Services proposal for City of
Dubuque, Iowa
GUIDES FOR
_6_ THEJOURNEY
PiperJaffray.
TIMOTHY J. OSWALD. MANAGING DIRECTOR
Mr. Oswald joined Piper Jaffray's Public Finance Department in 1989 and is a
Managing Director. Since 1999, Mr. Oswald has been the principal in charge of the Des
Moines office.
Mr. Oswald regularly assists, as advisor or underwriter, on general obligation, sales tax
revenue and essential utility revenue bonds. In 2011, he assisted in the sale of 31
different series of general obligation bonds, 14 different series of sales tax revenue
bonds, 4 different lease or certificate issues, and 5 different series of essential utility
revenue bonds, all of which included new money issues, current refundings, advance
refundings, and included both tax exempt and taxable transactions. Mr. Oswald has
extensive experience with unique structured bonds, such as (1) tax credit bonds:
{assisted on the sale and issuance of qualified school construction (tax credit) bonds and
qualified zone academy (tax credit) bonds for issuers including Sioux City CSD, Council
Bluffs CSD, Waterloo CSD and Cedar Rapids CSD }; (2) urban renewal tax increment
revenue bonds {Altoona, Bass Pro; Coralville, multiple series for a hotel, convention
center, brewery /restaurant, blight remediation, site acquisition and redevelopment,
flood land acquisition and flood mitigation); (3) annual appropriation general
obligation and tax increment revenue bonds {Altoona, Coralville, Spirit Lake, Storm
Lake, DeWitt }; and (4) lease or turn -key lease facilities (Williamsburg fire station,
Coralville Plaza on 5th, Coralville Marriott Hotel & Conference Center, Kirkwood
Community College, the Hotel at Kirkwood Center project, and currently assisting the
City of Marion on a turn -key lease of a new police station ). In addition to financings,
Mr. Oswald drafted the first model set of board policies used by the Iowa Association
of School Business Officers regarding financial and debt management, policies that have
since been revised to incorporate ongoing disclosure obligations. Mr. Oswald has guest
lectured at the University of Iowa — Pappajohn School of Business and annually teaches
a class (on debt management and debt policies) at Iowa State University as part of the
School Business Managers Academy.
Mr. Oswald has a Bachelors of Arts degree in Economics from the College of St.
Thomas, St. Paul, MN. Mr. Oswald holds Series 7, Series 63 and Series 53 securities
licenses.
Mr. Oswald regularly (annually) assists the following Iowa governmental bodies:
{Schools} Cedar Rapids, Dubuque, Sioux City, Waterloo, Council Bluffs, Clear Creek
Amana, College Community (Cedar Rapids Prairie), and Ames; {Cities} Coralville,
Keokuk, DeWitt, Mt. Pleasant, Spirit Lake, Storm Lake, Okoboji, Arnolds Park, Sioux
Center, Grinnell and Ottumwa (sewer capital planning); {Counties, less frequent than
annually }: Boone, Dickinson, Hardin, O'Brien, Polk and Wapello; {Others}
Kirkwood Community College and Iowa Great Lakes Sanitary District.
Financial Advisory Services proposal for City of
Dubuque, Iowa
']
GUIDES FOR PiperJaff ray.
- - THE JOURNEY'
TRAVIS R. SQUIRES, VICE PRESIDENT
Mr. Squires joined the Des Moines office of Piper Jaffray in 2006. Since 2010, Mr.
Squires has been in an officer role and currently holds the title of Vice President in the
Des Moines office.
Mr. Squires regularly assists, as advisor or underwriter, on general obligation, sales tax
revenue and essential utility revenue bonds. Since joining Piper Jaffray in 2006, he has
provided financial modeling support and analytical support on over 400 transactions
totaling in excess of $1 billion in par amount. Since the beginning of 2011, he has served
as the primary contact for sale of 32 different series of general obligation bonds, 8
different series of sales tax revenue bonds, 1 lease issue, and 2 different series of essential
utility revenue bonds, all of which included new money issues, current refundings,
advance refundings, and included both tax exempt and taxable transactions. Mr.
Squires has assisted numerous public entities in long range financial plans requiring
extensive financial modeling. His experience includes the development of a sales tax
revenue and enrollment model for Iowa schools, individualized capital and budget
planning tools for Cities and School Districts in Iowa, and modeling to provide ongoing
refunding and restructuring analysis for outstanding debt of their office's clients.
Mr. Squires graduated Summary Cum Laude from the University of Northern Iowa in
Cedar Falls, IA with a Bachelor of Arts degree in Finance. Mr. Squires currently holds a
Series 7 and 63 licenses with FINRA.
Mr. Squires regularly (annually) assists the following Iowa governmental bodies:
{Schools} Ballard, Gilbert, Knoxville, Johnston, North Polk, and West Des Moines;
{Cities} Burlington, Fairfield, Fort Madison, Grimes, New Hampton, Urbandale, and
Waukon; {Others} Grant Wood Area Education Agency.
Financial Advisory Services proposal for City of
Dubuque, Iowa
GUIDES FOR I PiperJaffray
_ 8 - THE JOURNESG •
Section 3 — Scope of Services
In general, the Scope of Services outlined mirrors the typical requirements of a financial
advisor in a municipal financing. In our experience, financings first begin with the
identification of a particular need, often capital improvement in nature. With the
identification of the need comes a discussion about potential options to address the
need, and ultimately, the legal authority to pay for such options. It is at this point that
the concept of financing begins, with the requisite debt schedules starting to be
prepared. For most of our clients, and from what we know about the City's financings,
we believe this to be true for the City as well. There are annual resources that are or
may be available, often time resources that have some existing obligations assigned for a
period of time, but for which balances may exist from time to time. Simply "running a
bond schedule" using typical or customary approach is inconsistent with long -range
planning. In a true long -range plan, cash assets available from time to time are
identified and, if earmarked (legally or otherwise), available resources are identified as
to the fiscal year available. If the leveraging of those assets is to be contemplated
(borrowing money), that leveraging is also identified year by year. In our experience,
often the time at which leveraging becomes available determines when a project is to be
contemplated.
{As a sidebar, we note that the Legislature changed the TIF laws effective July 1, 2012,
such that projects must be defined in the Urban Renewal Plan prior to being eligible for
reimbursement from the Division of Taxes ( "TIF "). It is likely that past practice with
respect to 11F is not going to be acceptable in the future, and we note the City has seven
separate urban renewal areas, one with no valuation, two with modest TIF valuations,
and the balance having material TIF valuations. The City needs to carefully consult
with its legal counsel and financial advisor to ensure that future capital improvement
projects are eligible to be certified as TIF debt in the future.}
To that end, we maintain an excel model that identifies all of the debts of the issuer (in
this case, the City), the source of repayment of those debts (by fiscal year and bond
series), the cash receipts that are available from time to time to support those debts (for
example, annual installments of gaining rent), and the surplus balances that may exist
from time to time. This single file would encompass all of the City's various funding
options available, including debt service tax levies, various gaming sources, 11F, utility
revenues, airport revenues, local option sales tax revenues, etc. Our approach with an
issuer, such as the City, is to share this file back and forth with finance staff such that
our workings are collaborative. We try to generate the schedules both for fiscal year
planning, but also such that the City can easily prepare the necessary annual budget
forms.
Once a funding source is identified and a bond schedule agreed upon, we then move to
circulating proposed bond terms. We have included in Section 10 a sample initial bond
memo that we use with bond counsel and issuers; we developed the form with input
from the bond attorneys practicing in Iowa to ensure that we circulate one simple, easy
to read document that included all of the information that a person (whether elected
official, staff or outside professional) would need to know to complete their work on
the transaction.
Financial Advisory Services proposal for City of
Dubuque, Iowa
GUIDES FOR I PiperJaffray
_9_ THEJOURNEL•
•
Section 3 — Scope of Services, continued
In the current marketplace, we believe that the City is best served offering its highly
rated general obligation, water revenue and sewer revenue bonds in competitive sale
format (we assume that the water and sewer bonds, if any, would be highly rated based
on the City's excellent rating).
The City might consider negotiated bond sales (with someone other than Piper Jaffray)
for tax increment revenue bonds, annual appropriation bonds, unique structures most
commonly sold in a negotiated format, or when fees and interest rates are such that a
negotiated sale is likely to produce a more favorable outcome for the offering being
contemplated than a competitive sale might produce. In that set of circumstances, our
role includes the creation of a form of RFP, including coordinating with the City's
purchasing and finance departments, as well as creating an evaluation process and
ranking system to score responses.
If the bonds are general obligation or essential utility revenue securities, we will take the
lead creating the draft preliminary official statement, as well as the final (after the sale)
official statement, subject to acceptable indemnity language in our contract. The
official statement is the City's communication with the municipal market, and under
current securities laws and interpretations, the City has liability for its communications
with the investor public. As such, we believe that the City needs to take an active role in
the preparation and review of the preliminary official statement, including action by the
City Council accepting the document and directing its publication.
If the bonds have a security source other than general obligation or essential utility, we
will discuss with the City and bond counsel the most efficient method for preparation of
the preliminary official statement.
Once an official statement draft is prepared, the credit rating process begins. We
coordinate the rating process, including necessary document shuffling and coordinating
rating calls. Unless there is some extenuating circumstance, we do not recommend a
rating presentation that causes people to travel to Chicago or New York. We
occasionally ask that the rating analyst visit us at the Issuer, so that recent updates can
be seen visually.
The City has an excellent municipal credit rating, higher than any of the municipal
bond insurors practicing in the marketplace. While we send information to the insurors
regarding each of our clients' sales, we seriously doubt that, in the current market
environment, insurance would be advantageous to the City. If that set of facts were to
change, for whatever reason, we would be an aggressive advocate for insurance (as used
to be the case, pre - 2007).
We typically advise use of the PARITY on -line bidding system. We will review the
merits of the system with the City, if the City has not previously used such system. Bids
are received at the administrative offices of the City, and we typically are physically
present for the receipt of bids. Bidding shall be set such that the bids are received during
normal business hours, with adequate time for us to evaluate bids, prepare
recommendation and supporting schedules, and adequate time for the City Council to
consider the action item and recommendations. This sometimes means that bids are
due on the day of the board meeting; other times, depending upon board schedule, we
receive bids the day before board meetings (as a matter of practice, this is Kirkwood's
standing process, in order to give staff time to prepare for the Board meeting).
Financial Advisory Services proposal for City of
Dubuque, Iowa
GUIDES FOR
- - THE JOURNEY'
1 PiperJaffray.
Section 3 - Scope of Services, continued
Your RFP makes a reference to pre - marketing of the issue. We would like to draw a
distinction when using the term marketing. It is never the role of the financial advisor
to market a securities offering; that is a prohibited act under current securities rules. It
is the role of the financial advisor to ensure that the underwriters who regularly practice
in a particular area or a particular state (and who are the entities licensed to market a
securities offering): (a) are aware of the offering; and (b) have adequate time to
understand the offering and ask questions they deem appropriate to ensure their interest
in the offering. To that end, it is our practice that (a) the official statement be published
not less than two weeks prior to the sale date; and (b) that the official statement be
published WITH the bond rating already assigned. Most bond rating agencies need
two to three weeks to review, ask questions, review documents and assign a rating. The
timelines that we communicate with you, bond counsel and others will reflect these
facts. We believe that we are the only financial advisory firm practicing in Iowa that
regularly uses this approach.
Of course, we coordinate the closing process and circulate memorandum and
distribution lists to support closing.
We have significant experience working on multi -year wastewater capital improvement
programs, and we believe that the City has some form of consent decree with the EPA
or DNR (though the makeup of that document we are not aware) regarding separation
of combined sewers and wastewater plant upgrades. We have developed a form of cash
flow modeling for future revenue and expense, as well as debt and capital set - asides,
which projects out into the future the actual increases in revenue necessary to support
the ongoing commitment on the part of a city. Other client communities have relied on
us to be a part of their presentations to city council regarding future rate increases
necessary, the timing and sizing of those increases. In most instances, we will advocate
for earlier rate increases than is typical in order to spread the burden out over multiple
years and attempt to avoid shocking rate increases. We believe that the DNR and SRF
are familiar and comfortable with our approach and documentation surrounding long-
term funding of operations and capital improvements. We note that the DNR has a
mandate, on the drinking water side of the SRF program, to establish the sufficiency of
the operation, and this almost always requires a long-range finance plan.
With our input, our clients have utilized multiple different types of security for SRF
financings, in addition to the usual and customary revenue bonds, we have also used
LOST and TIF bonds as funding sources in other communities. Each has its own
unique set of requirements, statutorily and otherwise, as our familiarity with multiple
different funding options should be of value to the City as it plans for the future.
We do not provide arbitrage rebate services; however, we typically work with a CPA in
Omaha to provide this service. To that end, we typically set up an initial call with him
to identify the process that the issuer will use, the paperwork they will retain etc. This
up -front discussion saves tremendous time on the back end when it comes to
completing the actual calculation.
Financial Advisory Services proposal for City of
Dubuque, Iowa
GUIDES FOR
- 11 - THE JOURNEY•
PiperJaffray.
Section 3 — Scope of Services, continued
With respect to debt management policies, we would want to be involved in any review
of existing or assist with the creation of new policies. This is an area that the rating
agencies and investors are focusing more time and attention. This is also an area where
the City can and should lead others with best practices. As with any policy, debt
management and operating policies should be reviewed and updated on a regular
schedule. We are prepared to share debt management guidance that we typically give
our clients as part of this process, as well as review existing policies with the City's staff.
With respect to post -sale compliance, assuming a competitive sale of securities, if
engaged, we can monitor the secondary trading market for transactions of the City, and
share this information with the City and its bond counsel periodically. It would be
unusual for a financial advisor to render an opinion regarding tax code compliance;
this opinion is typically in the responsibility of bond counsel, however, we will work
with bond counsel to provide the information requested by bond counsel. In the event
of a negotiated sale, we will work with the underwriter to monitor secondary trades,
and provide the information to the City and bond counsel regarding the secondary
trading activity with respect to the securities offered. We would expect that the
underwriter will work with the City, us and bond counsel to identify any circumstances
where trades vary from certifications.
Continuing disclosure is a service that most of our clients request we assist with, and we
have proposed to do so here, provided however, that if the City prepares an annual
CAFR, this constitutes the annual filing (so long as the requisite tables are included in
the CAFR), and as such, we do not charge a fee to assist uploading a CAFR to EMMA
(the MSRB's website for municipal securities filings).
Typically, issuers ask us to prepare and present annually an overview of their financial
position as it relates to bonding, future leveraging opportunities, debt limit, and,
perhaps, prepare comparisons to rating medians. We will take part in such a session
annually at a time mutually agreeable to both. The effort of identifying the resources,
debts and future debts is on -going depending upon the request of the City.
We are frequently in Northeast Iowa for one meeting or another, and would anticipate
regular in- person dialogue with the City.
Financial Advisory Services proposal for City of
Dubuque, Iowa
GUIDES OR Pi
- THE JOU RNE
perJaff ray.
12 JOURNEY'
Section 4 — References
References include:
Kelly Hayworth, City Administrator
City of Coralville
1512 7th St.
Coralville, IA 52241
319/248 -1703
Khavworth0 .ci.coralville.ia.us
Jim Choate, Chief Financial Officer
Kirkwood Community College
7725 Kirkwood Blvd. SW
Cedar Rapids, IA 52404
319/398 -7612
Jim.choate @kirkwood.edu
Kelley Brown, City Administrator
City of Grimes
101 N. Harvey St.
Grimes, IA 50111
515/986 -3036
kelbrown @ci.grimes.ia.us
Kevin Kelleher
Dubuque Community School District
2300 Chaney
Dubuque, IA 52001
563/552 -3038
kkelleher@dubuque.k12.ia.us
Deb Anderson, Budget Director
Polk County
111 Court Ave. Suite 372
Des Moines, IA 50309
515/286 -3016
DAnders@a.co.polk.ia.us
Justin Yarosevich, City Clerk
City of Storm Lake
620 Erie St.
Storm Lake, IA 50588
712/732 -8000
Justin@.stormlake.org
Nicci Lamb, Finance Director
City of Urbandale
3600 86th St.
Urbandale, IA 50322
515/278 -3900
nlamb @urbandale.org
Tom Ridout, Controller
Northeast Iowa Community College
1625 Hwy. 150 PO Box 400
Calmar, IA 52132
563/562 -3263 ext 211
ridoutt@nicc.edu
Financial Advisory Services proposal for City of
Dubuque, Iowa
GUIDES FOR
- - THE ray
� THE JOURNEY.•
Piper Jaffray & Co.
January 9, 2012
GD��EU� °y
$650,000
Elkader
GO Ann. App. Corporate
Purpose Bonds, Series 2012A
Financial Advisor
1 PiperJaffray
January 18,2012
$1,870,000
DeWitt
Sewer Revenue Refunding
Bonds
Placement Agent
GIDES FOR
,ro:U]n11NUEr PiperJaffray
February 3, 2012
$1,935,000
Coralville
Sewer Revenue Refunding
Bonds, Series 2012A
Placement Agent
TGO . \Ol: ' I PiperJaffray
January 9, 2012
$415,000
Elkader
General Obligation Refunding
Bonds, Series 20128
Financial Advisor
GUIDES FOR PiperJaffray
nn<]nuxuer•
January 18,2012
$772,000
DeWitt
Water Revenue Refunding
Bonds
Placement Agent
1G7,SNO ' I PiperJaffray
February 15, 2012
$3,348,000
Jefferson
Sewer Revenue Capital Loan
Notes
Placement Agent
GVIDE [ON
T„EJOU> R.EY 1 PiperJaffray.
January 10,2012
$5,935,000
Asbury
General Obligation Refunding
Bonds, Series 2012A, 8, & C
Financial Advisor
TcDOWNR ' I PiperJaffray.
February 6, 2012
$3,390,000
Burlington
General Obligation Refunding
Bonds, 20128
Financial Advisor
GUIDES FOR I PiperJaffray
7TIE]n11NYEY.'
February 16, 2012
$1,570,000
New Hampton
General Obligation Capital
Loan Notes
Financial Advisor
TGJONE • I PiperJaffray.
2012 Experience Iowa City Issues
January 11, 2012
$3,540,000
Sioux Center
Water Revenue Refunding
Capital Loan Notes
Financial Advisor
1 ° °i °E. °�• PiperJaffray
February 7, 2012
GUJUES FOR
$4,273,000
Ottumwa
Sewer Revenue Capital Loan
Notes
Placement Agent
PiperJaffray.
'1111: n11NXI�.Y.•
February 14, 2012
$830,000
Onawa
General Obligation Refunding
Capital Loan Notes
Placement Agent
TGJOK I PiperJaffray.
January 12,2012
$3,825,000
Storm Lake
GO Urban Renewal
Refunding Bonds
Financial Advisor
I PiperJaffray.
nlr•.]nuNanr.
February 8,2012
$3,515,000
Arnolds Park
General Obligation Urban
Renewal Refunding Bonds
Financial Advisor
GUIDES FOR I PiperJaffray
1'llh:]MIIIXM.Y' J
February 21, 2012
$9,611,000
Mount Pleasant
Sewer Revenue & Refunding
Bonds
Placement Agent
TJM'FY
GDIOU I E I PiperJaffray.
XEOU•
February 28, 2012
$995,000
Jefferson
Sewer Revenue Refunding
Bonds
Placement Agent
GUIDES FOR
IID;jDI.s,Z,"' PiperJaffray.
March 5, 2012
$820,000
DeWitt
GO Urban Renewal Bonds,
Series 20128
Financial Advisor
° °,DEtiOR I PiperJaffray
uu' JDUxurr
Apri124, 2012
$6,300,000
Spirit Lake
General Obligation Refunding
Capital Loan Notes
Financial Advisor
UIDES FOR
,HCI,1Dtr::. PiperJaffray
March 5, 2012
$4,035,000
Ottumwa
General Obligation Capital
Loan Notes
Placement Agent
1G14 DO ' PiperJaffray
April 2,2012
$4,120,000
Ottumwa
General Obligation Capital
Loan Notes
Ottumwa
G °'DEt FOR I PiperJaffray.
'f11R�D11xNRY.'
April 24, 2012
$2,675,000
Spirit Lake
Water Revenue Refunding
Capital Loan Notes
Financial Advisor
GVIUES NR I PiperJaffray.
-1'114 �(1111<NI.Y•
March 6, 2012
$700,000
Riverdale
General Obligation Capital
Loan Notes
Financial Advisor
QUID“ FOR
1111. .1DURNRY.' PiperJaffray
April 5, 2012
$2,950,000
Mount Pleasant Municipal
Utilities
Water Revenue Refunding
Bonds
Placement Agent
GUIDES NE I PiperJaffray.
THEJOVRNY'
May 8, 2012
$2,340,000
Jefferson
General Obligation UR
Corporate Purpose Bonds
Financial Advisor
'FGVIIFjOUNNI YDEt FOR ' I PiperJaffray
March 5, 2012
$870,000
DeWitt
General Obligation Refunding
Bonds, Series 2012A
Financial Advisor
GUIDES FOR I PiperJaffray.
'rnF'JOUxNPY•
April 10, 2012
$4,639,000
Boone
Sewer Revenue Refunding
Bonds
Placement Agent
(iUIDEi FOk
r`.,.J IZ:. PiperJaffray
May72012
$2,780,000
Albia
General Obligation Capital
Loan Notes
Financial Advisor
GUIDLS FOR
,'11 N.�DIIRNRY• PiperJaffray.
February 28, 2012
$995,000
Jefferson
General Obligation Refunding
Bonds
Placement Agent
I G Op FO 1 PiperJaffray
April 6, 2012
$4,985,000
Marshalltown
Sewer Revenue Refunding
Bonds
Placement Agent
GUIDEE FOR
'II1R]DIIRNN.Y• PiperJaffray
May 29, 2012
GDIDLS fOR
$1,500,000
Williamsburg
General Obligation Corporate
Purpose Bonds
Financial Advisor
1 PiperJaffray
l ill'- �DIINNI!Y'
June 26, 2012
$9,095,000
Spirit Lake
GO Urban Renewal Annual
Approp. Refunding, 2012A
Financial Advisor
GUIDES FOR I PiperJaffray
INY.JMINY /:Y.'
April 27. 2012
$6,000,000
Coralville
Annual Appropriation General
Obligation Urban Renewal
Bonds, Series 2012F
Financial Advisor
GUIDES IUN I PiperJaffray
THE JOUR.YE):'
July 9, 2012
$4,000,000
Adel
General Obligation Urban
Renewal Bonds, Series A
Financial Advisor
EJOUR'DR I PiperJaffray
THC JOVR�'EY.'
June 4, 2012
$975,000
Tama
General Obligation Refunding
Bonds, Series 2012
Financial Advisor
GUIDES FOR
'I HFJnIINN1:Y' PiperJaffray.
June 18, 2012
$4,968,000
Burlington
Sewer Rev. Loan Agreement
Anticipation Note, 2012D
Placement Agent
PiperJaffray
July 9, 2012
$1,650,000
Adel
General Obligation Refunding
Bonds, Series 8
Financial Advisor
GDIDEl FUR I PiperJaffray.
TXE JOVRNEI:'
June 18,2012
$2,192,000
Burlington
Taxable GO Loan Agreement
Anticipation Notes, 2012G
Placement Agent
GVIDE.S FOR I PiperJaffray.
'rl uuDuRN1Y•
June 18, 2012
$817,000
Burlington
General Obligation Refunding
Bonds, 2012F
Placement Agent
GUIDES FOR I PiperJaffray.
•rnF. Jnultwv
July 24, 2012
$4,300,000
Spirit Lake
GO Urban Renewal Annual
Approp. Refunding, 2012B
Financial Advisor
GOUR PiperJaffray
THE jOURNE
Y'
June 18,2012
$1,362,000
Burlington
GO Loan Agreement
Anticipation Note, 2012C
Placement Agent
GUIDES FOR
„rv.JDDRNI:Y• PiperJaffray.
June 25, 2012
$2,165,000
Coralville
Taxable GO Corporate
Purpose Bonds, 2012G
Financial Advisor
DUDES iOR I PiperJaffray.
'I'IIR JMIRNI'Y•
July 24, 2012
$1,150,000
Spirit Lake
General Obligation Urban
Renewal Bonds, 2012B
Financial Advisor
GUM) FUR I PiperJaffray
TUE
June 18, 2012
$1,431,000
Burlington
Taxable GO Loan Agreement
Anticipation Notes, 2012E
Placement Agent
GUIDE.SFON I PiperJaffray.
nuJnuxFEY:
June 25, 2012
$4,210,000
Coralville
General Obligation Corporate
Purpose Bonds, 2012C
Financial Advisor
GVIUES FOR I PiperJaffray
'I'IIR JO11NN1Y'
Section 5 — Insurance
1. We will name the City of Dubuque on our general liability policy and provide a
certificate upon the City's request. A separat�orsei ent is not needed as the
language is included on a contractual blanket basis within our insurance policy. We
will not name the City as additional insured on our Professional Liability policy.
We maintain a $1,000,000 general liability policy, with the balance of any
requirement being assigned to our umbrella policy.
2. The minimum rating must be A- or higher from A.M. Best
3. We do not intend to subcontract any work. If that changes, we will review
insurance requirements with the City and ensure that any subcontractor meets the
City's requirements.
4. We do not use ISO forms
Financial Advisory Services proposal for City of GUIDES FOR
Dubuque, Iowa - 14 - THEJOURNEY• Pip erJaff ray.
Section 6— Fees and Compensation
We have fee relationships that are "fixed," "hourly" and "contingent fee" in nature.
The vast majority of our clients prefer a contingent fee structure, as such; we will
propose a contingent fee structure to our agreement, with a fixed component to protect
both us and the City in the event that transaction sizes increase dramatically, without an
hourly calculator. We are willing to consider any alternate structure that the City so
desires.
Each method of fees has an inherent conflict of interest. In an hourly fee structure, the
party has no interest in keeping the hours spent to a minimum, and as such, an unethical
provider might create work for themselves to have to deal with from time to time as a
means of increasing overall billings. In a contingent fee structure, the incentive is on the
provider to see that the transaction is completed, since their payment is entirely a
function of completed transactions. In this case, an unethical provider might suggest
approaches that produce transactions solely as a means of increasing overall billings. In
a fixed fee arrangement, both parties make assumptions as to the work to be done and
the amount of time required and liability created by the work effort. In a fixed fee
arrangement, there is no reward to the Issuer (the City, in this case) for an efficient
transaction requiring less time than previously contemplated.
Our proposed fees are fixed for the duration of the agreement, which we understand to
be initially S- years, with mutual renewal options, yet to be negotiated.
We would object to a termination (using the 30 -day option) if a timeline has been
established for a bond transaction and work is being undertaken, other than for cause
on our part. It would hardly seem fair to use our services through planning, establish a
financing and a timeline, get started, then get fired (again, other than for cause). We are
fine with the 30-day provision once a financing is complete and prior to the time the
next financing timeline has been established.
Typically, contracts are non - assignable. We note that we are a publicly held
corporation, and as such, our stock trades and is subject to acquisition by third parties.
We do not believe that an acquisition by a third party where the third party assumes the
responsibilities of the contract is an assignment of that contract. If the acquirer rejects
the contract, then that should be grounds for the City to have the right to immediately
terminate the agreement.
Finanaal Advisory Services proposal for City of
Dubuque, Iowa
GUIDES FOR
- 15 . THE JOURNEY.'
PiperJaffray.
Section 6— Fees and Compensation, continued
Proposed fee structure
G.O Bonds/Notes
1/8 of 1% of the par amount issued; with a floor of
$8,000 per issue and a cap of $15,000 per issue
Special Assessment bonds
.25% of the par amount issued; with a floor of
$9,000 per issue and a cap of $20,000 per issue
Utility Revenue bonds/notes
(non SRF)
Same as special assessment bonds
TIT revenue or lease revenue
obligations
Same as GO bonds/notes, except that disdosure
counsel will be required of the City as discussed
herein
SRF obligations
No fee if we are minimally involved, for example,
simply run a debt schedule. Alternate fee to be
agreed upon at that time (probably hourly fees,
though we are open to other ideas) if we provide
more comprehensive rate analysis, working with
engineers and others to establish rates and charges
and assist with the SRF application process
Annual retainer
None
Continuing disdosure
dissemination agent
$1,000 per credit per year, provided, however, that
if the City sells bonds of that credit type during the
fiscal year in question and we act as financial
advisor on the issue, no fee will be charged.
A credit is the class of payment obligation. For
example, a general obligation bond is one credit
lass, regardless whether that bond is paid from
taxes, TIF, utility revenues, gaming revenues etc.
The City has several GO issues outstanding, but
would pay one fee total for all of those issues of the
same credit.
No fee if we are simply uploading a CAFR (that
includes required info) to EMMA.
Reimbursement/other fees
City will reimburse for the cost of printing, mailing
and obtaining an electronic link for the official
statements, at $2,500 per issue. City is additionally
responsible for (all, if any) the costs of bond
counsel, local legal counsel, disclosure counsel
costs, all rating fees, CUSIP fees, bond
underwriting costs, paying agent and registration
fees, CPA verification fees in an advance refunding,
escrow agent fees, any other printing or mailing
costs and publication expenses, all typical and
standard "Costs of Issuance" for a bond
transaction. Arbitrage rebate compliance services
will be provided by a third party under direct
contract with the City, if necessary, and not part of
this fee structure.
Financial Advisory Services proposal for City of
Dubuque, Iowa
GUIDES FOR 1 PiperJaffray.
- 16 - THE JOURNE]L'
Section 6 — Fees and Compensation, continued
We will assist the City putting together the preliminary and final official statements for
a general obligation or essential utility revenue bond issue. Our engagement will not
include disclosure counsel effort on behalf of the City, and we will not be the primary
party assisting the City putting together the official statement for a lease revenue
obligation, a TIF Revenue obligation or a special assessment obligation, if any. City
will need to retain separate counsel for that effort, in the event that those types of
securities are to be offered. In the event that a 10(b)5 opinion is required for a
transaction, if it is required of Piper, the City will reimburse Piper for all out of pocket
costs associated with retaining such legal opinion.
Items covered by fee
All preliminary calculations, numbers runs, long -range planning associated with a
capital project financing, assistance with ratings, municipal bond insurance, official
statements, closing, bond sale and attendance at City Council meetings (and other
planning meetings as requested by the City), preparation of final numbers. In addition,
we are often asked between bond sales to do various calculations regarding future
capital improvement projects and their impact on the City (i.e. taxes, TIF income etc),
as well as calculations regarding estimated interest earnings on idle bond proceeds
during construction (if only the estimates produced real money!). All of those services
are covered by the proposed fee schedule.
Transcripts
In an email from the City to Piper, there was a reference to production of a book that
incorporates various numbers and other details of the financing. Often, this sort of
document also incorporates the legal proceedings and is called a transcript. In our
experience, transcripts are most efficiently provided by bond counsel, as they are the
person to whom most documents are returned. If the City wants a full -blown
transcript, we will work with the City and its bond counsel to ensure that all of the
items and numbers runs necessary to fully complete the transcript are present. In the
event that the City wants a document more in line with the copy shared with us via
email, we will provide such a document with content consistent with that previously
shared with us at no additional cost to the City.
We will provide electronic copies of the preliminary and final official statements, bid
summary, bids received, final numbers, and rating reports to the City for archive as part
of this engagement.
Financial Advisory Services proposal for City of
Dubuque, Iowa
GUIDES I Pi
- 17 - T perJaffray. THE JOUU RNEY.'
Section 7 — Special conditions
Conflicts of Interest
We note that the activities discussed "Special Conditions" are prohibited by MSRB Rule
G23. A financial advisor may not negotiate, or bid to purchase at competitive sale, a
municipal bond for which the firm has a financial advisory relationship. A firm may
not resign a financial advisory relationship and be hired as underwriter. Though the
rule doesn't specifically contemplate, we believe that the rule intends that a financial
advisory may not be fired by the Issuer and then hired as a negotiated underwriter for
said transaction.
As discussed herein, there are inherent conflicts of interest every time a fee is paid, and
this can be true with respect to refinancings. A financial advisor can still potentially
have a conflict of interest by recommending a refinancing, simply because a fee would
be paid to said firm. It is important that the City's debt management policies
contemplate appropriate refinancings, and that the City document deviation, if any, to
protect itself and its advisory team, if the City deviates from the policy.
There are other types of conflicts of interest, however, that should be contemplated.
For example, the City should insist that its financial advisors not work with third
parties who are adversarial (i.e. negotiating agreements) to the City during the term of
the Agreement.
Financial Advisory Services proposal for City of
Dubuque, Iowa
GUIOUS FOR PiperJaff ray.
- 18 - THE JOURNEY'
Section 8 — Legal Violations and Conflicts of Interest
Due to the nature of our business, we are involved in a variety of legal proceedings on
an ongoing basis. These proceedings include litigation, arbitration and regulatory
proceedings, which may arise from, among other things, transactional activity,
regulatory examinations of our businesses and investigations of securities industry
practices by governmental agencies and self - regulatory organizations. The securities
industry is highly regulated, and the regulatory scrutiny applied to securities firms has
increased dramatically in recent years, resulting in a higher number of regulatory
investigations and enforcement actions and significantly greater uncertainty regarding
the likely outcome of these matters.
Piper has no reason to believe that current and past regulatory matters or litigation will
affect in any way Piper's ability to provide any of the services contemplated.
For more information regarding litigation and regulatory matters involving Piper
Jaffray, please refer to the Piper Jaffray's Form BD filed with the Financial Industry
Regulatory Authority ( "FINRA "). You can request electronic delivery of the relevant
sections of a Company's Form BD by accessing the Regulatory Systems page of
FINRA's website at httpJ /www.finra.org/ Investors /ToolsCalculatorsBrokerCheck/
and conducting a FINRA Broker Check.
Financial Advisory Services proposal for City of
Dubuque, lowa
GUIDES FOR
- - THE JOURNEY.* I P1perJaff rJOURNEY.*
Section 9 — Questions that We think the City should be asking
What is the most creative financing that you have worked on and what makes that
financing so creative?
Do you have ideas on ways to lower the City's interest expense on future borrowings?
'What is the project you are least proud of working on and why?
What is your experience with urban renewal? Give examples of unique urban renewal
approaches that you have created or advocated for in the past.
Given what you know about the City, do you see risks, issues or concerns that the City
should be considering going forward?
How do your employees get paid, and is it related to the fees that we pay?
Financial Advisory Services proposal for City of
Dubuque, Iowa
GUIDES FOR
- - THE PiperJaffray
2,Q THE JOURNEY.'
Section 10 — Sample form oftimeline (Get Started Letter)
Financial Advisory Services proposal for City of
Dubuque, Iowa
GUIDES FOR PiperJaffray
- 21 - THE JOURNEY.'
PiperJaffray.
October 29, 2011
Mr. R. Mark Cory, Esq.
Ahlers & Cooney P.C.
100 Court Ave., Suite 600
Des Moines, IA 50309
3900 Ingersoll Avenue, Suite 110 Des Moines, Iowa 50312
Tel 515 -247 -2340 I Tel: 800 - 333 -6008 I Fax- 515-280-7567
Piper Jaffray & Co. Since 1895. Member SlPC and FINRA.
RE: NTE $4,000,000 Arnolds Park, Iowa, general obligation urban renewal refunding
bonds (double exempt)
Dear Mark:
Here are the terms of offering:
Action Dates
Date to schedule hearing:
Date to hold hearing:
Schedule sale/authorize POS:
Sale Date:
Issuance Date:
Closing date:
November 9
December 14
January 11
February 8 (bids at 11am)
March 7
March 29
POS Dates
Expect date of POS to review:
Due diligence conference call
Legal/disclosure / POS comments due:
Date POS due to Issuer for approval:
October 6
November 3 at 10am
November 9
December 14
Terms
Term Bond:
Method of Sale
Dated date:
Call Date:
Maturities Callable on Above Date:
Good faith amount:
Award Basis:
Interest Rates:
Interest payment dates:
Change in principal:
Purchase Price:
Registrar and Paying Agent:
Continuing Disclosure:
Permitted at bidders option
Sealed bid with notice of sale with PARITY
March 29, 2012
June 1, 2017
2018 -2024
$35,555
TIC
1/8, 1/20 or 1 /100 of 1%
Rates must be in level or ascending order only
12/1/2012 & semiannually thereafter
Unlimited as to amount per maturity
Not less than 98.5% of par
Bankers Trust Company
Over $10 million (EMMA Filing = 210 Days)
Mr. R. Mark Cory, Esq.
Page Two
October 29, 2011
Terms
Continuing Disclosure Tables:
Type of Refunding:
Prior bonds to be called:
Amount of prior to be called:
Bond Proceeds Delivered To:
Use of Accrued Interest:
Very truly yours,
Via Email
Timothy J. Oswald
Managing Director
TJO:
Encls.
c: Ron Walker
Diana VanVleet
1. Audited Financial Statements of the Issuer
2. Other Official Statement Information (Population,
Employment Statistics, Retail Sales, Property Valuations,
Tax Rates, Historic Tax Rates, Tax Collections, Major
Taxpayers, Direct Debt, Overlapping Debt, Debt Limit and
Financial Summary)
Current refunding
10/1/2005 Series A & B
$1,585,000 & $1,905,000 respectivelly
Local Bank
Use to reduce amount of issue
ESTIMATED PAYMENT SCHEDULE
Date
Principal
Payments
Interest
Payment
Paying
Agent
Expense
Annual
Debt
Service
Interest
Rate
12/1/2012
Present
Value of
Savings
30,973
69,637
30,973
38,664
6/1/2013
385,000
30,973
500
447,445
0.400%
12/1/2013
- 35,836
30,203
2,829
- 35,047
6/1/2014
360,000
30,203
500
420,905
0.650%
12/1/2014
32,619
29,033
369,929
390,703
- 20,773
6/1/2015
330,000
29,033
500
388,565
0.850%
12/1/2015
29,207
27,630
27,626
6/1/2016
260,000
27,630
500
315,760
1.150%
12/1/2016
-4,951
26,135
52,641
27,630
25,011
6/1/2017
260,000
26,135
500
312,770
1.450%
1211/2017
25,511
24,250
50,521
23,337
6/1/2018
260,000
24,250
500
309,000
1.800%
12/1/2018
19,505
21,910
308,696
286,635
22,061
6/1/2019
275,000
21,910
500
319,320
2.000%
12/1/2019
18,433
19,160
16,309
6/1/2020
290,000
19,160
500
328,820
2.250%
12/1/2020
16,566
15,898
37,598
21,910
15,688
6/1/2021
250,000
15,898
500
282,295
2.500%
12/1/2021
16,188
12,773
31,876
13,852
6/1/2022
235,000
12,773
500
261,045
2.700%
12/3/2022
10,943
9,600
323,092
309,660
13,432
6/3/2023
300,000
9,600
500
319,700
2.900%
12/1/2023
10,313
5,250
8,535
6/1/2024
350,000
5,2.50
500
361,000
3.000%
Totals:
3,555,000
505,62.5
6,500
4,067,125
8,250
ESTIMATED SAVINGS
Date
Existing
Bond
Payments
Proposed "New"
Bond
Payments
Estimated
Semi - Annual
Savings
Plus
Surplus
Bond $
Plus
Accrued
Interest
Annual
Savings
Present
Value of
Savings
12/1/2012
69,637
30,973
38,664
38,236
6/1/2013
380,637
416,473
- 35,836
2,829
- 35,047
12/1/2013
63,929
30,203
33,727
32,619
6/1/2014
369,929
390,703
- 20,773
12,954
- 19,868
12/1/2014
58,239
29,033
29,207
27,626
6/1/2015
354,239
359,533
- 5,293
23,914
-4,951
12/1/2015
52,641
27,630
25,011
23,136
6/1/2016
313,641
288,130
25,511
50,521
23,337
12/1/2016
47,696
26,135
21,561
19,505
6/1/2017
308,696
286,635
22,061
43,621
19,737
12/1/2017
42,683
24,250
18,433
16,309
6/1/2018
303,683
284,750
18,933
37,366
16,566
12/1/2018
37,598
21,910
15,688
13,574
6/1/2019
313,598
297,410
16,188
31,876
13,852
12/1/2019
32,092
19,160
12,932
10,943
6/1/2020
323,092
309,660
13,432
26,364
11,240
12/1/2020
26,210
15,898
10,313
8,535
6/1/2021
276,710
266,398
10,313
20,625
8,440
12/1/2021
21,023
12,773
8,250
6,677
6/1/2022
256,523
248,273
8,250
16,500
6,603
12/1/2022
16,088
9,600
6,488
5,135
6/1/2023
316,588
310,100
6,488
12,975
5,078
12/1/2023
9,713
5,250
4,463
3,455
6/1/2024
360,213
355,750
4,463
8,925
3,416
12/1/2024
2,188
0
2,188
1,656
6/1/2025
102,688
500
102,188
104,375
76,507
Totals:
4,459,970
4,067,125
392,845
3,850
0
396,695
336,167
Savings as a % of refunded bonds:
9.63%
TO:
FROM:
SUBJECT:
DATE:
GENERAL
Firms Interested in Providing Financial Advisory Services
Jenny Larson, Budget Director
REQUEST FOR PROPOSAL —
INDEPENDENT FINANCIAL ADVISORY SERVICES
June 19, 2012
The City of Dubuque is seeking proposals to provide independent financial advisory
services. Qualified firms are invited to submit a proposal in the format outlined in this
Request for Proposal (RFP).
BORROWING INFORMATION
The City has an Aa1 bond rating from Moody's Investors Service since April 2010 as part
of the recalibrating of municipal bonds. Scheduling of future year bond issues is
dependent on projects approved through the City's Five Year Capital Improvement
Program, specifically from either General Obligation or Revenue bond issues. Many City
projects are funded from non - borrowing. The City may be utilizing the State of Iowa
Revolving Loan Fund for projects that qualify due to the favorable borrowing costs.
William Noth from the Ahlers & Cooney law firm in Des Moines serves as the City's bond
counsel. Wells Fargo Bank provides paying agent services for City bond issues. The City
does not anticipate any negotiated bond sales.
BASIS OF AWARD
A review committee of City staff will evaluate proposals based upon written responses to
the RFP, the respondent's qualifications, past financial advisor work, proposed fees and
other factors deemed important. The City may schedule interviews with a limited number
of prospective firms. The City may reject any or all proposals if, in the opinion of the City,
they do not meet the City's requirements. The recommendation of the committee will be
subject to City Manager and City Council approval.
1
SUBMISSION DEADLINE
Five (5) hard copies and one (1) electronic filing of the proposals must be received no later
than 5:00 p.m., June 29, 2012. The proposals should be submitted to:
Jenny Larson, Budget Director
City of Dubuque
50 West 13th Street
Dubuque, Iowa 52001 -4864
JLarson @CityofDubuque.org
A copy of the Comprehensive Annual Financial Report (CAFR) for the fiscal year ended
June 30, 2011 is available at www.cityofdubuque.orq/2011CAFR.
Questions concerning this RFP may be addressed to Jenny Larson via e-mail
jlarson a@.cityofdubuque.orq until June 22, 2012.
2
CITY OF DUBUQUE, IOWA
Request for Proposal: Financial Advisory Services
May 22, 2012
Description of Firm
Please provide a description of your firm including, at a minimum the following:
• Date the firm was established;
• Location of the firm's main office and other offices and the number of
employees in each office; and
• Whether the firm is an independent financial advisory firm and /or a member
of National Association of Independent Public Financial Advisors (NAIPFA).
Statement of Qualifications
Please provide a statement of your firm's qualifications.
Scope of Services
Key responsibilities of the Financial Advisor include:
• Assists in evaluating capital funding alternatives and developing a financing
plan;
• Assists with obtaining required authorizations including providing assistance
in any referendum campaign;
• Provides advice on method of sales (where appropriate);
• Develops RFP for financing team;
• Evaluates proposal submissions;
• Recommends timing of bond sale;
• Identifies tasks, responsibilities, and dates for completing activities leading
up to bond sale;
• Designs debt structure;
• Provides advice on approach to ratings and assists with rating
presentations;
• Evaluates use of and obtains bids for credit enhancement Of appropriate)
• Assists in producing and reviewing documents, including preliminary and
final official statements;
• Conducts pre- marketing of issue (competitive sale);
• Evaluates bids, including accuracy of TIC calculation, and recommends
award (competitive sale), present at City council meeting on date of sale;
• Reviews pricing and allocations of bonds (negotiated sale);
• Coordinates supplying information to City bond counsel and rating agency;
• Work with City staff to ensure costs of debt repayment are favorable short
and long term;
• Assists with closing arrangements and provide follow -up and post sale
analysis;
• Provides advice on investment of bond proceeds Of appropriate);
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• Provides advice related to compliance with arbitrage regulations;
• Assist in TIF financings including cash flow, preparing materials for
negotiating and best financial plans;
• Assist in SRF borrowings and determine best financing options;
• Assist with maintaining a City debt management policy
• Filing annual continuing disclosure report; and
• Provide refunding analysis in connection with new bond issues and /or when
appropriate at other times;
• Provide input on Post - Issuance Compliance Policy for Tax - Exempt Qualified
Obligations.
Please provide your firm's plan for service to the City.
References
Please provide at least three government client references including, at a minimum, the
following:
• Name of client;
• Description of services provided to the client in the past three years;
• Firm's staff that worked with the client; and
• Name and telephone number of a client contact person.
Staff to be assigned to our account
Please provide the following information on your staff:
• Detail of staff to be assigned to City of Dubuque;
• Description of specific duties performed by each assigned staff person;
• Qualifications of staff - years in public finance, other relevant experience,
education and accreditation; and
• Percent of total staff time in the debt issuing process attributable to each
staff person.
Insurance
The financial advisory services firm shall adhere to insurance requirements for
professional services as detailed by the insurance schedule attached during the term of
this agreement. Please provide confirmation that the requirements will be met. Insurance
certificate can be supplied at a later date by the successful firm.
Fees
Please provide a fee schedule for potential bond issues and for other projects and services
including, at a minimum, the following:
• Fee schedule;
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• List of services covered by fees. Specifically state which costs are included
in the fee proposal and costs that are to be reimbursed;
• List of bond issue expenses to be paid by the City;
• Number of years for which the fee schedule is valid;
• Type of debt subject to a higher fee, if any;
• Treatment of multiple issues sold at the same time; impact on fees; and
• Annual continuing disclosure report;
• Retainer fee Of applicable).
Duration of Contract and Options for Renewal
The contract duration will be five years with the right to cancel the contract by either party
with 30 -days notice. There may be an automatic renewal clause available upon
completion of the initial five -year term. Please provide options(s) for such a clause.
Special Conditions
To minimize any conflict of interest, any firm with underwriting capabilities who is selected
to serve as the City of Dubuque's financial advisor will not be permitted to underwrite the
City's bonds or submit bids to purchase the same during the contract period and for a
period of at least one year after its engagement as financial advisor has ended.
The City of Dubuque will use the competitive bidding method of bond sale for bond issues
when the following conditions apply:
• The market, if familiar with the issuer, and the issuer is a stable and regular
borrower in the public market;
• There is an active secondary market with a broad investor base for the
issuer's bonds;
• The issue has an unenhanced credit rating of A or above or can obtain a
credit enhancement prior to the competitive sale;
• The debt structure is backed by the issuer's full faith and credit or a strong,
known or historically performing revenue stream;
• The issue is neither too large to be easily absorbed by the market nor too
small to attract investors without a concerted sales effort;
• The issue is not viewed by the market as carrying complex or innovative
features or requiring explanation as to the bonds' soundness; and
• Interest rates are stable, market demand is strong, and the market is able to
absorb a reasonable amount of buying or selling at reasonable price
changes.
However, negotiated sales for TIF related projects may occur.
Legal Violations and Conflicts of Interest
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State whether your firm, within the past five years, has had any legal or regulatory
violations, and describe any investigations by the SEC or other regulatory agencies, or
other legal action (such as litigation) in which the firm has been involved.
The firm engaged as the City of Dubuque's Financial Advisor may not engage in activities
on behalf of the City that produce a direct or indirect financial gain for the firm, other than
the agreed -upon compensation, without the City's prior consent.
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