Financial Advisor Contract AgreementMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Financial Advisor Contract Amendment
DATE: February 10, 2014
Dubuque
band
AI- America City
1
2007 • 2012 • 2013
Budget Director Jennifer Larson is recommending approval of a contract amendment
with the City's Financial Advisor, Piper Jaffray. The current contract does not include
disclosure services with respect to annual appropriation bonds or revenue bonds; only
general obligation bonds.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM /jml
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
Jennifer Larson, Budget Director
Kenneth TeKippe, Finance Director
THE CITY OF
Dui
Masterpiece on the Mississippi
TO: Michael C. Van Milligen, City Manager
FROM: Jennifer Larson, Budget Director
SUBJECT: Financial Advisor Contract Amendment
DATE: February 10, 2014
Dubuque
band
AI- America City
11111r
2007 • 2012 • 2013
INTRODUCTION
The purpose of this memorandum is to recommend approval of a revised amendment to
the Financial Advisor contract.
BACKGROUND
The City plans to issue sales tax increment bonds using State of Iowa sales tax revenue
to help fund the Bee Branch Creek Watershed project. The City anticipates issuing the
bonds during calendar year 2014.
DISCUSSION
The current contract with the City's Financial Advisor, Piper Jaffray, does not include
disclosure services with respect to annual appropriation bonds or revenue bonds; only
general obligation bonds.
Bill Noth, City bond counsel, has recommended that the City retain Piper Jaffray to
provide the disclosure services since it would be most cost effective. Piper Jaffray will
retain legal counsel to provide the disclosure services.
Even though Piper Jaffray will be providing the disclosure services related to the sales
tax increment bonds, the official statement is the City's communication to the markets
regarding the bonds and the City retains the responsibility for accurate and not
misleading communication.
Bill Noth has recommended additional changes to the amended contract and those
changes have been now incorporated in the amendment with exception of items that
were already included in the base agreement.
RECOMMENDATION
I respectfully recommend the approval of the revised contract amendment for Piper
Jaffray to provide disclosure services related to the sales tax increment bonds.
JML
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
Kenneth TeKippe, Finance Director
AMENDMENT TO FINANCIAL SERVICES AGREEMENT
This Amendment to Financial Services Agreement ( "Amendment "), is entered into the _ day of
January, 2014, by and between the City of Dubuque, Iowa (the "Issuer"), and Piper Jaffray &
Co. (the "Financial Services Provider").
RECITALS
WHEREAS, the Issuer and the Financial Services Provider entered into a Financial Services
Agreement dated as October 15, 2012 (the "Agreement "); and
WHEREAS, the Issuer has selected Ahlers & Cooney, P.C. as bond counsel ( "Bond Counsel ")
and has not relied on Financial Services Provider for any assistance selecting Bond Counsel,
Financial Services Provider is not party to the engagement agreement between Issuer and
Bond Counsel, including having a working knowledge of any limitations under said agreement;
and Financial Services Provider shall assume no responsibility for the work or opinions provided
by Bond Counsel; and
WHEREAS, the Issuer desires to amend the Agreement to include the sale and issuance of
Flood Mitigation Sales Tax Increment Revenue Bonds (Annual Appropriation General Obligation
Backup) (in one or more series) proceeds of which will be used for a variety of flood mitigation
and water quality projects (the "Project "); and
WHEREAS, the Issuer desires to engage the Financial Services Provider to render services
with respect to the Project.
NOW THEREFORE, the parties agree as follows:
The following Project is included in the scope of services to be provided under the Agreement:
Flood Mitigation Sales Tax Increment Revenue Bonds with an annual appropriation general
obligation backup pledge, in one or more series in an amount to be determined by the Flood
Mitigation Board.
Section 1 — Scope of Services is amended to include only the below services with respect to the
Project:
➢ Creation of a form of request for proposal for managing underwriter regarding the Project
➢ Creation of an evaluation form for proposals received for managing underwriter
➢ Assistance with City evaluating proposals received for managing underwriter
➢ Assist City preparing plan of finance for presentation to Flood Mitigation Board
➢ Attend Flood Mitigation Board meetings as requested by the City
➢ Coordinate efforts of City, bond counsel, managing underwriter, and counsel to the Financial
Advisor, regarding timeline, rating process, and completion of the Project.
➢ Evaluate the bond terms as proposed by the Managing Underwriter. Comment as to the
appropriateness of the terms in relation to the impact that the proposed term has on the
Issuer.
➢ Compare pricing details provided by the Underwriter with information available through the
MSRB's EMMA system. Assemble the data provided by EMMA and provide copies to the
City and Bond Counsel. In coordination with the efforts of Bond Counsel, communicate with
the Underwriter regarding discrepancies between the Underwriter's information provided to
the Issuer about pricing and the information provided by EMMA.
➢ Participate in the pricing process for the securities and advise the Issuer as to the
appropriateness of accepting or requiring re- pricing of the securities
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Section 2 — Compensation is clarified that the Project shall be treated as a TIF revenue bond for
purposes of determining the Financial Services Provider's fee with respect to the Project.
Section 3 — Expenses is amended to include: The Financial Services Provider shall retain
counsel to the Financial Services Provider, in its sole discretion, to produce the Issuer's official
statement with respect to the Project. The Issuer shall reimburse the Financial Services
Provider for the actual out -of- pocket cost for this cost, not to exceed $32,500. The Issuer
agrees, and agrees to direct all parties involved that are engaged by the City on the Project, to
cooperate in all respects with the reasonable requests of counsel to the Financial Services
Provider with respect to, but not limited to, its due diligence effort, and all aspects of the
preparation of the official statement. In the event that the Issuer wants a reliance letter from
counsel to the Financial Services Provider, the Financial Services Provider will consent to such
a reliance letter, the cost of which must be borne by the Issuer.
This amendment forms part of, is subject to and incorporated into the above - referenced
Agreement.
IN WITNESS WHEREOF, the parties have executed this Amendment on the date first above
written. By the signature of its representative below, each party affirms that it has taken all
necessary action to authorize said representative to execute this Amendment.
CITY OF DUB QUE, IOWA
By:
Its: May
PIPER .)AFFRAY & CO.
Managing Director
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AMENDMENT TO FINANCIAL SERVICES AGREEMENT
This Amendment to Financial Services Agreement ( "Amendment "), is entered into the
day of , 2014-3, by and between the City of Dubuque, Iowa (the
"Issuer "), and Piper Jaffray & Co. (the "Financial Services Provider ").
RECITALS
WHEREAS, the Issuer and the Financial Services Provider entered into a Financial
Services Agreement dated as October 15August 6, 2012 (the "Agreement "); and
WHEREAS, the Issuer has selected Ahlers & Cooney, P.C. as bond counsel ( "Bond
Counsel ") and has not relied on Financial Services Provider for any assistance selecting
Bond Counsel, Financial Services Provider is not party to the engagement agreement
between Issuer and Bond Counsel, including having a working knowledge of any
limitations under said agreement; and Financial Services Provider shall assume no
responsibility for the work or opinions provided by Bond Counsel; and
WHEREAS, the Issuer desires to amend the Agreement to include the sale and issuance
of Flood Mitigation Sales Tax Increment Revenue Bonds (Annual Appropriation General
Obligation Backup) (in one or more series) proceeds of which will be used for a variety
of flood mitigation and water quality projects (the "Project "); and
WHEREAS, the Issuer desires to engage the Financial Services Provider to render the
services with respect to the Project.
NOW THEREFORE, the parties agree as follows:
The following Project is included in the scope of services to be provided under the
Agreement:
Flood Mitigation Sales Tax Increments Bonds with an annual appropriation general
obligation backup pledge, in one or more series in an amount to be determined by the
Flood Mitigation Board.
Section 1 — Scope of Services is amended to include only the below services with respect
to the Project:
➢ Creation of a form of request for proposal for managing underwriter regarding the
Project
➢ Creation of an evaluation form for proposals received for managing underwriter
➢ Assistance with City evaluating proposals received for managing underwriter
➢ Assist City preparing plan of finance for presentation to Flood Mitigation Board
➢ Attend Flood Mitigation Board meetings as requested by the City
➢ Coordinate efforts of City, bond counsel, managing underwriter, and counsel to the
Financial Advisor, regarding timeline, rating process, and completion of the Project.
• Propose bond terms for the securities being sold
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• At the request of the Issuer, attend staff or City Council meetings concerning the securities
• Participate in the pricing process for the securities and advise the Issuer as to the appropriateness
of accepting or requiring re- pricing of the securities
• Review initial and secondary market (using EMMA as the source of information) trading
activities and provide summary information to Issuer and Bond Counsel
• Serve as Issuer's liaison with the managing underwriter to resolve re- offering discrepancies or.- - -
other pricing issues and to document trading activity as needed
• Coordinate the closing of the transaction
LSection 1 - Extent of Duties Arising Under This Agreementtis amended to provide as follows:
While acting as a municipal advisor to the Issuer under this amendment to the Agreement, the
Financial Services Provider shall have those fiduciary and other duties or obligations as may be imposed
under Section 15B of the Securities Exchange Act of 1934, as amended, and the rules of the Municipal
Securities Rulemaking Board.
� L
Section 2 — Compensation is clarified that the Project shall be treated as a TIF revenue
bond for purposes of determining the Financial Services Provider's fee with respect to the
Prod ect.
Section 3 — Expenses is amended to include: The Financial Services Provider shall retain
counsel to the Financial Services Provider, in its sole discretion, to produce the Issuer's
official statement with respect to the Project. The Issuer shall reimburse the Financial
Services Provider for the actual out -of- pocket cost for this cost, not to exceed $30,000.
The Issuer agrees, and agrees to direct all parties involved that are engaged by the City on
the Project, to cooperate in all respects with the reasonable requests of counsel to the
Financial Services Provider with respect to, but not limited to, its due diligence effort,
and all aspects of the preparation of the official statement. In the event that the Issuer
wants a reliance letter from counsel to the Financial Services Provider, the Financial
Services Provider will consent to such a reliance letter, the cost of which must be borne
by the Issuer.
This amendment forms part of, is subject to and incorporated into the above - referenced
Agreement.
IN WITNESS WHEREOF, the parties have executed this Amendment on the date first
above written. By the signature of its representative below, each party affirms that it has
taken all necessary action to authorize said representative to execute this Amendment.
CITY OF DUBUQUE, IOWA
By:
Its: [
PIPER JAI-PRAY & CO.
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Managing Director
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