Loading...
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 Paae 1 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 Paae 2 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 Page 1 Formatted: List Paragraph, Bulleted + Level: 1 + Aligned at: 0.25' + Indent at: 0.5 • Formatted: List Paragraph • 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. Page 2 Formatted: List Paragraph, Bulleted + Level: 1 + PJigied at: 0.25' + Indent at: 0.5" Formatted: List Paragraph, Bulleted + Level: 1 1 + Aligned at: 0.25' + Indent at: 0.5' -[ Formatted: Normal Formatted: Underline Formatted: Font: Times New Roman, Underline Formatted: Font: Times New Raman, Underline '� Formatted: Font: 11 pt Formatted: List Paragraph, Bulleted + Level: 1 + Aligned at: 0.25' + Indent at: 0.5 Managing Director Page 3