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Financial Advisory RFP for PFMTHE CITY OF DUB E ~-~~ MEMORANDUM February 15, 2007 TO: FROM: The Honorable Mayor and City Council Members Michael C. Van Milligen, City Manager , . SUBJECT: Financial Advisor Services 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 and/or bond refundings. Finance Director Ken TeKippe is recommending selection of Public Financial Management (PFM) to provide these services to Dubuque. PFM has provided these services to Dubuque since 2002. The major change in the current arrangement is that a $5,000 annual retainer will be paid to obtain additional services from PFM. I concur with the recommendation and respectfully request Mayor and City Council approval. %~~--._ Mi ael C. Van illigen MCVM/jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Ken TeKippe Finance Director THE CITY OF DuB E ~~ Memorandum TO: Michael C. Van Milligen, City Manager FROM: Ken TeKippe, Finance Director `~~ ~ ~~' SUBJECT: Financial Advisor Services DATE: February 14, 2007 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 and/or bond refundings. The RFP was distributed to eight firms. Six firms submitted quality proposals in response to the invitation. The firms that submitted proposals included: Robert W. Baird & Co., Inc.; Public Financial Management (PFM); Speer Financial, Inc.; Springsted Public Finance Advisors; Piper Jaffray & Co.; and Ehlers & Associates, Inc. Two of the firms submitting proposals (Robert W. Baird & Co. and Piper Jaffray & Co.) also provide underwriting services (buy/sell bonds), but agreed not to bid on underwriting services 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 Jean Nachtman, Assistant Finance Director, Jenny Larson, Budget Director, Dave Heiar, Economic Development Director, Steve Sampson Brown, Project Manager, and myself. After reviewing the proposals, five firms were invited to Dubuque for interviews. The firms interviewed included Robert W. Baird & Co., Inc.; Public Financial Management (PFM); Speer Financial, Inc.; Springsted Public Finance Advisors; and Piper Jaffray & Co. All the firms would be able to adequately serve as our advisor based on the interviews. After a follow up interview and additional review and discussion, it is the consensus of the committee that PFM be retained as the financial advisor firm for at least the next five years. Factors that contributed to the selection included: • Independent financial advisor* • Size of firm with considerable City of Dubuque staff experience • Number of larger Iowa cities that are currently clients of firm (includes Ames, Ankeny, Cedar Falls, Council Bluffs, Davenport, Des Moines, Iowa City, Marion, Sioux City, West Des Moines). Firm currently provides services to 11 out of 22 Iowa cities with 20,000 plus in population, and 2 of the 3 Iowa Aaa rated Cities. • Work to be completed in the Des Moines office • Continuity • Positive comments on firm from City's bond counsel, Bill Noth • Longevity of clients • Competitive fees with other independent financial advisors • Quality of proposal, responses to interview questions, and interview • Ease of working with the primary individual assigned to City • Number and dollars of bond issues involved in Iowa and across the country *Selection of PFM provides the opportunity for Piper Jaffray & Co. and Robert W. Baird & Co., large players in the underwriting field, to bid on future bonds issues. Piper Jaffray was the successful bidder for 3 of the last 11 bond issues. PFM acquired the Evensen Dodge firm in 2003, after Evensen Dodge was awarded financial advisor services to Dubuque in 2002. There has not been any cities leave the PFM firm that were acquired from Evensen Dodge. Prior to 2002, Speer Financial, Inc. served as the City's financial advisor. After deciding to retain PFM, the benefits of an annual retainer fee were reviewed with a decision to recommend. This will provide considerable more access and services from PFM. PFM fees for general obligation bond issues under $10 million will be $13,000 (single issue billed at 85% of base fee $11,050), and $18,000 for $10-$20 million issues. City bond issues are normally under $10 million. Revenue bond issue fees are 25% higher. The annual retainer fee is $5,000 which includes the cost of preparing the annual disclosure statement that was previously billed separately and helped reduce the fee for general obligation bond issues under $10 million which represents the bulk of Dubuque's issues. Firms interviewed indicated that there are certain factors affecting the City bond rating that are within the City's control: such as establishing long term debt policy, accumulating cash reserve policy and financial and management strengths. Other factors that are out of the City's direct control are taxable valuation, per capita income, and population growth. Factors affecting our interest costs will continue to be: • Length of the bond issue • Credit rating • Official statement • Type of issue • Timing of issue • Market • City's financial strength • Area economy • County and school district success Copies of the RFP, PFM's proposal, firm overview, responses to questions and proposed fee revision letter dated February 9, 2007 are enclosed. PFM will make quarterly visits to Dubuque to discuss issues relative to City projects and borrowings. If there are any questions on the process or recommendation, the committee and/or I would be available to review. Your approval to proceed with finalizing a contract would be appreciated. Thank you. KT/jg Enclosures City of Dubuque REQUEST FOR PROPOSAL FOR FINANCIAL ADVISOR SERVICES December 5, 2006 Finance Department City Hall 50 West 13th Street Dubuque, Iowa 52001-4864 THE CITY OF DUB E ~~ TO: FROM: SUBJECT: DATE: GENERAL Memorandum Firms Interested in Providing Financial Advisory Services Ken TeKippe, Finance Director ~(~,.,. r Q REQUEST FOR PROPOSAL - INDEPENDENT FINANCIAL ADVISORY SERVICES December 5, 2006 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 Aa2 bond rating from Moody's Investors Service since September 2003. 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. The vast majority of 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 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. SUBMISSION DEADLINE Eight (8) copies of the proposals must be received no later than 5:00 p.m., Tuesday, December 19, 2006. The proposals should be submitted to: Ken TeKippe, Finance Director City of Dubuque 50 West 13th Street Dubuque, Iowa 52001-4864 A copy of the Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2005 is enclosed. The June 30, 2006 CAFR is not available. A $3,810,000 General Obligation Bond issue was finalized in May 2006 for stormwater and parking projects and $3,345,000 of debt was refinanced with the issue. Questions concerning this RFP may be addressed to Ken TeKippe via telephone 563-589-4133, fax 563-589-0890 or via a-mail ktekippe(c~cityofdubugue.org until December 12, 2006. CITY OF DUBUQUE, IOWA Request for Proposal: Financial Advisory Services December 5, 2006 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 (if 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); * 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 (if appropriate); * Provides advice related to compliance with arbitrage regulations; * Filing annual continuing disclosure report; and * Provide refunding analysis in connection with new bond issues and/or when appropriate at other times. 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; * 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. 2 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. Legal Violations and Conflicts of Interest 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. 3 INSURANCE SCHEDULE C INSURANCE REQUIREMENTS FOR PROFESSIONAL SERVICES TO THE CITY OF DUBUQUE 1. All policies of insurance required hereunder shall be with an insurer authorized to do business in Iowa. All insurers shall have a rating of A better in the current A.M. Best Rating Guide. 2. All policies of insurance shall be endorsed to provide a thirty (30) day advance notice of cancellation to the City of Dubuque, except for 10 day notice for non- payment, if cancellation is prior to the expiration date. This endorsement supersedes the standard cancellation statement on the Certificate of Insurance. 3. shall furnish a signed Certificate of Insurance to the City of Dubuque, Iowa for the coverage required in Paragraph 6 below. Such Certificates shall include copies of the following endorsements: a) Commercial General Liability policy is primary and non-contributing. b) Commercial General Liability additional insured endorsement. c) Governmental Immunities Endorsement. shall also be required to provide Certificates of Insurance of all subcontractors and all sub-sub contractors who perform work or services pursuant to the provisions of this contract. Said certificates shall meet the same insurance requirements as required of 4. Each certificate shall be submitted to the contracting department of the City of Dubuque. 5. Failure to provide minimum coverage shall not be deemed a waiver of these requirements by the City of Dubuque. Failure to obtain or maintain the required insurance shall be considered a material breach of this agreement. 6. Contractor shall be required to carry the following minimum coverage/limits or greater if required by law or other legal agreement: a) COMMERCIAL GENERAL LIABILITY General Aggregate Limit $2,000,000 Products-Completed Operations Aggregate Limit $1,000,000 Personal and Advertising Injury Limit $1,000,000 Each Occurrence Limit $1,000,000 Fire Damage limit (any one occurrence) $ 50,000 Medical Payments $ 5,000 1 of 2 June 2005 INSURANCE SCHEDULE C (Continued) INSURANCE REQUIREMENTS FOR PROFESSIONAL SERVICES TO THE CITY OF DUBUQUE This coverage shall be written on an occurrence form, not claims made form. All deviations or exclusions from the standard ISO commercial general liability form CG 0001 or Business owners BP 0002 shall be clearly identified. Form CG 25 04 03 97 'Designated Location (s) General Aggregate Limit' shall be included. Governmental Immunity endorsement identical or equivalent to form attached. Additional Insured Requirement: The City of Dubuque, including all its elected and appointed officials, all its employees and volunteers, all its boards, commissions and/or authorities and their board members, employees and volunteers shall be named as an additional insured on General Liability including "ongoing operations" coverage equivalent to ISO CG 20 10 07 04. b) Automobile $1,000,000 combined single limit. c) WORKERS COMPENSATION 8~ EMPLOYERS LIABILITY Statutory for Coverage A Employers Liability: Each Accident $ 100,000 Each Employee Disease $ 100,000 Policy Limit Disease $ 500,000 d) PROFESSIONAL LIABILITY $1,000,000 e) UMBRELLA/EXCESS LIABILITY $1,000,000 Completion Checklist ^ Certificate of Liability Insurance (2 pages) ^ Designated Location(s) General Aggregate Limit CG 25 04 03 97 ^ Additional Insured CG 20 10 07 04 ^ Governmental Immunities Endorsement 2 of 2 June 2005 .~w CERTII=KATE taF LIABILITY INSURANCE anT€ tMrauDtvYrrYt aztzstzpos p~DUCi;a (563) 556-p272 FAX (563) 556-4425 INSURANCE AGENCY STRIrET At3DRESS THIS CERTIFICATE IS tSSUEd AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER THIS CERTIFlCATE DOES NOT AMEND, EXTENd OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. CITY, STATEx ZIP CODE '- ~' INSURERS AFFORDING COVERAGE NAiC #! rNSI~tEO Co~pBny iNSt.IRERA' Insurance Co~any ."""...~".~"._.._ ~~_ ~" " _... Street Address INSU~ce~s: ~` City State, Zip Code INSURER c ~"T. INSURCRD: w._._...WW.. _ .__ _ .-_, ~__ _._ ^ ~ . ___ iNBUi2ER ~. COVERAGES THE POLICtlrS OF MtSUR1WCE LISTED $ELOW HAVE BEEN ISSUED TO THE INSURER NAMED ABOVE fiOR THE POLICY PERIOD INDICATED. NflTWiTHSTANDIN+ ANY REQUIREMENT, TERM OR CONDi7'tON OF ANY CONTRACT OR OTWER DOCUMENT WITH RESPECT TO t'+/HICH THIS CERTIFICATE MAY BE ISSUED UR tNAY PERT'AEN, THE INSURANCE AFFORDED BY 7kE POLICIES DESCRIBED HEREIN IS SUBJECT TO All THE TERMS, EXCLUSKtN5 AND CflNDITION,~i Of" SUCH POLICIES. AGGREGATE LIMEYS SHOWN MAY MAVE BEEN REDUCED BY PAID CLAIMS. ~~ TYPE Of INSURANCE POt.ICY NUMBER POLX:Y EFFECTIVE POt.ICY EXPIRATION Li4t1T8 _. ~.-. GENERAL. LY1Bq,ITY EACIi OCCt IRRF.NCE 5 ]. paa pa ~( COMMERCIAL GENERAL LtA$ILITY DAMAGE ~ b RENTED ~ € sa ~ ap CLAIMS AiAL7E' ~ OCCUR 6'}?rU k){P (krrv arse Pe!atxfs7 € 5 ~ ..__.. A ~ X PERSO#iAL B ADV INJURY ; o(yo € --~ ~ GENERAL AC3CitSEGJat"E . ^ .._._._._.. ~ 2 , aaa * Oa GI=N'L AGGI~GATF LAAtT APPLIES PER'. Pi2t7UU{'"! S - C{)MP!OP AGG € j ~ aaa a a{) POLfCY' SECT X LOC ____m.._. AUTDMO8ILE LlA81LiTY /w~~~ ,y ~~C, ~ ~ 1/I!t/' S C~~ ~ / ~ ~ CUAA{91N£U :il±~hiLE t.MafT jLa :Kaswrd, € )( ANY AL1T0 9 ~ r aaa ~ fla ALL OYNiC6 AUTOS ,~} ~ .i/ / itC?OtLY iNJ;IRY SCHEDULED AUTOS ~ ~~ J 1 Ef>ex Pmcs^n) € A X HIRED AU7DS ' "'' 8{SDIi Y INJURY NON-OWNED AUTOS (~ 4 ~ ~ f ` ~ I"~ 1F~' GAT ~ tear arclrStrnli _._._._.. . _ .. .. ` . ~~_ _... . _ . PROPl3Z7Y DAMAGE --~ .. __ .. ~___.___~___ tfrer asxixie~Mi ~ t"rARAGF. LiA9lLiTY AUTO ONLY - Eh ACGIUEN7 b A1VY AUT{7 EA ACC {;7Y4ER THAN E ~ ~ ~ J,UTO (7tH Y: ~ EXCESStitMSItELLA L-4f31LiTY [AChi OCCURRENCE f j s paa, pa OCCUR ~ CIAR,A.S MADE AGCiRktiATtr = j a{~ {~(} ~ S ----- UEDUCTii~LE € X RE'I`!"NTIC7N € _._ s .._..._________...__..~ _. WORKERS COMPENBATiON AND WC: ST"ATU•- C7TH• X A EMPLOYERS lJAs81LITY AAIY PRC1t+RiETQR/PARThtERiEXEL11TtVE E L. EACH ACC3L51:N7" S IaO ~ p OFFICERIMEMf3EREXCLUD[LYr' EL.UISEA'SE-ERE:MPL{7YE.. ....~,._._._.___.___...._ .»_.~.__..._~..___ € Lap 0 ._.._._.._~ Yom, dead+4! ulKlest SPECIAL PROVISIONS bebvv E.1, DISEASE • POLICY LMIT F Spp ~~SSIONAL LIABILITY sj,ooa,0ao lETtON ~ OPERATIONS /LOCATIONS 1 VEIMCX.ES t EXCLUSIONS ADDED 8Y ENDORSEMENT 1 SPECiAi tS HE CITY'OF DUBUfMiE IS AN ADDITIONAL INSURED ON GENERAL LIA6ILITY POLICIES INCL. ONGOING & COMPLETED ERATIONS COVERAGE EtXJMLANT TO ISO CG 2010 0704 & CG 2037 0704.. GENERAL LIABILITY POLICY IS PRIMARY NON-CONTRIBUTING. FARM CG 2504 0397' "DESIGNATED LOCATIONS" GENERAL LIABILITY AGGREGATE LIMIT SHALL BE CLUDED. C,DVERNMENTAL IMAIiNITIES ENDORSEMENT IS INCLUDED. ALL POLICIES OF INSURANCE SHALL BE ENDORSED PROVIQE THIRTY {38) DAY J#DyANCE NOTICE {)F CANCELLATION TO THE CITY OI` DUBlK~UE. CITY OF DUBtKAJE CITY HALL. Sp M1. 13TH STREET DUBUQUE, IA 520p1 SHOULD ANY OF THE AOOVE DESCRIBED POLICIES BIE CANCELLED BEFORE THE EXPIRAT/ON DWTE THEREOF, THE Issualcs INSURER waL{ -1~11H~>jdEl6 NUVi 3p DAYS WfttTTEN NO'T'ICE TO THE CERTIFICATE HOLDER NAMED TO TH1: LEFT. ~~IK7~1'I~i~xl~~X AUTHORIZED REPR@SENTATIVE ACORD 25 {21m4/08I tt3ACC}Rb CARPgRATIt~N t9RR 1'MPt)~T/~NT If the certificate holder is an ADDITIONAL INSURED, the palicy(ies) must lie endorsed. A statement on this cert~cate does not confer rights W the certifica#e holder in lieu of suds endarsement(s}. If SUBROGATION 13 WAfVEO, subject to the 4erms and conditions of the policy, certain policies may require an endorsemerrt. A staterr~nt on this certificate does not confer rights to the certificate ha#der in lieu of such endorsements}. flisc~tM~R The Certificate of Insurance on the reverse side of his form does not constitute a contract between the issuing insurers}, authorized representative or producer, and the certifgie holder, nor does it affin»ativety or negatively amend, exterxt or after the cx~verage affarc~d by the policies fisted thereon. SPECIMEN ~8) ROLICY NUMBER; COMMERCIAL GENERAL LiABILlTY CG 25 fl4 03 97 THIS ENi3l~RSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY, I~E~I~NAT~D L~J~ATl+C~N{S} ~I~NERAL AGGRI=GATT= LIMIT TJtis entiarsemsn; modifies insurance provided under the failpwing: COPIIMERCIr'~ GENERAL L1ASiLl~i Y COVERAGE PART SCHEDULE ANY AND ALL COVERED LOCP,TiONS (if no entry appears above, information recuired to comniete will b£ Shown in tr~~ r1F+r-lar~linnc as applicable to this endorsement.) A. For alt sums which the insured becomes legally obligated to pay as damages caused by `occurrences' under COVERAGE A (SECTION !), and for aU medlcat expenses caused by ac~- derztS under COVERAGE C {SECTION i), which can be attributed' only to operations at a single designated `location' shown In the Schedule above: '!. A separate Designated Location Genera! Aggregate Limit. applies to each designated "location", and that limit !s equal to fhe amount of the General Aggregate Limit shown in the Declarations. Z The C7esignated Location Genera! Aggregate Limit is the mast we w~i pay for the sum of a!! damages under CdVERAGE A, except. dam- ages because of `bodily in}ury" ar "Property damage' nduded in the `pnxiucts-completed operations hazard', and far medical expenses under COVERAGE C regardless of the, num- bet af: a. ~lnsureds; CG ?..5440397 b, Claims made or `suits' brought; or c. Persons ar organizations making dolma or brining `suits'. 3. Any payments made under COVERAGE A for damages or under COVERAGE C for• medcal expenses shall reduce the Desig- nated Loca#ion General Aggregate limit for that designated "tacat-an'. Su~'1 paymenrts shat! not reduce the General Aggregate Limit shown in the Dedara#ians not shah they re- duce any other Designated Location General Aggregate Limit for any other designated `location' sho~m in the Schedule above, 4, The limits shaven in the Declarations for Each Occurrence, Fre Damage and Medico! E7c pense continue to apply, However, instead of be'sng subject to the Genera! Aggregate Limit shown in the Declarations, suc~..Iimits wilt be subject to the applicable Desr'~nated Location Genera! Aggregate i,,,imii, SPECIMEN Copyright, insurance Services Office, Inc., '1996 Page ~ of 2 I:I POLICY NUMBER: coiuM~RCiAL ~i:l~i=i~a~ t.iaarur~r CG 2ti to OT D4 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIC?NA~. INSURED -- 0111tNERS, LESSEES t3R CtJN7RACTC?RS -- SCHEDULED PERSt3N CJR t~R+GANIZATIC-N This endorsement modifies insurance provided under the following: CC7MMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name flf Additional Insured Person{s} flr flr anization s : Locations C}f Covered O ations The City of Dubuque, including all its elected and appointed officials, all its employees and volunteers, a71 its boards, commissions andJor authorities and their board members, employees and volunteers. Information r aired to complete this Schedule, if nat spawn above, will be shown in the Declarations. A. Section ti -Who Is An insured is amended to include as an additional insured the person(s) or organization{s) shown in the Schedule, but only with respect tD liability for "bodily injury", "property damage" or "personal and advertising injury" caused., in whole or in part, by: t. Your acts or omissions; or 2, The acts or omissions of those acting on your behalf; fn the performance of your ongoing operations for the additional rcrsured{s} at the location{s) desig- nated above. E~i~iEN B. With .respect to the insurance afforded to these additional insureds, the following additional exclu- sions apply: This insurance does not apply to "bodily injury" or "property damage" occurring after. t. Ail work, including materials, parts or equip- ment furnished in connection with such work, on the project {other than service, matntena~e . or repairs) to be performed by or on behaH of the additional insured{s} act the location of the covered operations has. been completed; or 2 That portron of "your work" out of which the injury or damage arises has been put to its in- tended use by any person or organization other than another contractor or subt~ntractor en- gaged in performing operations for a principal as a part of the same project, CG 20 1~ D7 i!4 ®iS0 Properties. lnc., 2004 Pale 1 of t O CITY OF DUBUQUE, IOWA GOVERNMENTAL IMMUNITIES ENDORSEMENT Nonwaiver of Governmental Immunity. The insurance carrier expressly agrees and states that the purchase of this policy and the including of the City of Dubuque, Iowa as an Additional Insured does not waive any of the defenses of governmental immunity available to the City of Dubuque, Iowa under Code of Iowa Section 670.4 as it is now exists and as it may be amended from time to time. 2. Claims Coverage. The insurance carrier further agrees that this policy of insurance shall cover only those claims not subject to the defense of governmental immunity under the Code of Iowa Section 670.4 as it now exists and as it may be amended from time to time. Those claims not subject to Code of Iowa Section 670.4 shall be covered by the terms and conditions of this insurance policy. 3. Assertion of Government Immunity. The City of Dubuque, Iowa shall be responsible for asserting any defense of governmental immunity, and may do so at any time arid shall do so upon the timely written request of the insurance carrier. 4. Non-Denial of Coverage. The insurance carrier shall not deny coverage under this policy and the insurance carrier shall not deny any of the rights and benefits accruing to the City of Dubuque, Iowa under this policy for reasons of governmental immunity unless and until a court of competent jurisdiction has ruled in favor of the defense(s) of governmental immunity asserted by the City of Dubuque, Iowa. No Other Change in Policy. The above preservation of governmental immunities shall not otherwise change or alter the coverage available under the policy. SPECIMEN 1 of 1 June 2005 2600 Grand Avenue Suds 214 . Des Moines, IA 50312 ~ ~ ~ Y^. ~ ~ ` ^ ~ _ r• i. The PFM Group i-u4,,n r .~na I i 1an~;yE i ~rr~~ ,,._. PFiVi?CBS'; I41:r"5!y6:1TlE3a~ L~l: P~Pd': 3d.is~~~; February 9, 2007 Memorandum To: Ken TeKippe, Finance Director, City of Dubuque Jean Nachtrnan, Assistant Finance Director, City of Dubique From: Tionna. Pooler, Senior Managing Consultant, Public Financial Management R,e: Proposed Finanaal Advisory Fees 515-243-2H00 515-243-6994 fax www.pitn.com PFM is pleased that you have chosen to continue our partnership. The originally proposed fees are consistent with those charged to clients of a similar size; however after some discussion, we have revised the proposed fees in consideration of the City's needs. The proposed fee revision is as follows: Transaction Fees: PFM proposes flat fees for the issuance of General Obligation, Tax Increment, Revenue and Refunding Bonds as follows: Under $10.0 Million .~ $13,000" $10.1 to $20.0 Million $18,000 $20.1 to $30.0 Million $25,000 $30.1 to $40.0 Million $30,000 Over $40.0 Million To be ne otiated Tax Increment Same as GO Bonds G.O.Refundin Same as GO bonds lus escrow fees Revenue Bonds 125% of the GO Bond Fee Multi a Issues Sold Concurrent) Smallest issue billed at 85%of base fee 'Sin le Issue Sold Under $10.0 Million Billed at 85% of base fee ~ PPM Proposed Fees February 9, 2407 Page 2 Annual Retainer. As your financial advisor, PFM will provide ongoing services independent of the issuance of bonds. The proposed annual retainer fee for these services is intended to provide compensation at reduced rates compared to hourly fees. It is anticipated that retainer fees will be added to transactions fees and incorporated with the first bond issue of the annual period; if it has been determined that no bond issues are planned, the annual retainer will be billed in July. The proposed annual fee is $5,000, and will include the following. • Development & implementation of a rating strategy • On-going review of refunding opportunities • Annual continuing disclosure • Preparation of cash flow analyses including. / Tax valuation projections / Debt service levy analyses / Urban renewal planning / Enterprise Fund Analysis • On-going consultation and advice and attendance at meetings (at least quarterly) Additional analyses not included above will be considered on an individual basis; if a project is sufficiently large or complex to warrant additional compensation, PFM will notify the City in advance and will work to negotiate a mutually acceptable fee. Such instances are rare; examples include the creation of a new utility or enterprise. Expenses: Transaction fees or annual retainer fees will cover the costs of the services described above. Incidental expenses such as mileage and meals, as well as expenses incurred on behalf of the City such as official statement printing and posting, will be billed at cost. The PFM Group Firm Overview ~. Our Goal is to help our clients raise, invest and manage their resources in the most cost-effective manner possible. 2600 Grand Avenue Suites 214 Des Moines, IA 50312 www.pfm.com __ _. r Re-Introduction to PFM Ann Arbor Memphis Arlington Miami Atlanta Milwaukee Austin Minneapolis Boston Newport Beach Charlotte New York Chicago Oakland Cleveland Orlando Des Moines Philadelphia Fargo Phoenix Fort Myers Pittsburgh Harrisburg Princeton Long Island San Francisco Los Angeles Seattle Malvern St. Louis Washington D.C. PFM is the Nation's Leading Financial and Investment Advisor to Public Agencies PFM was founded in 1975 on the principle of providing sound independent financial advice to state and local governments. Today PFM is the nation's leading advisory firm with offices strategically .located throughout the United States. yt.~ -. • • p~~~ 12 t r Firm Background Our only business is providing financial, investment and consulting advice to public sector clients. PFM has five primary businesses, Transaction Management related to debt issuance, Investment Advice and Portfolio Management for bond proceeds and working capital and Strategic Consulting for operating and capital budgets, Investment Consulting and Structured Products. With these five businesses, PFM serves only one interest, that of our client. PFM's only business is providing financial, investment and consulting advice to public sector clients • PFM was founded in 1975 on the principle of providing sound independent financial advice to state and local governments. • PFM is the nation's leading municipal finance and investment advisory firm with offices throughout the United States. • PFM is unique in that it is involved in all aspects of a government's finances. strafeg onsut~ir~ ~~~s 3 Market Stature Although rankings provide a shorthand method of measuring success, the length of service and level of satisfaction we provide is a better measure of true success. Our decade-long association with many of our clients is an affirmation of our ability to service their needs thoughtfully and efficiently. When calculated based on the number and size of transactions, PFM becomes the most experienced player in the capital markets. PFM is Continually Ranked as a Leader in Public Finance 2005 Year End Iowa Overall Long-Term Municipal New Issues National Municipal Financial Advisory Ranking Source: The Bond Buyer/Securities Data Company # transactions dollars in millions PFM , i ~ Springsted 2~ ~ ~g4,9 Incorporated Piper Jaffray & Co. 8b 331.2 Public Financial 2006 Third Quarter Midwest Long-Term Municipal New Issues Advisors 1 58.3 National Municipal Financial Advisory Ranking Source: The Bond Buyer/Securities Data Company Speer Financial Inc. 19 54.3 # transactions dollars in million Capital Markets ? 1 16 5 PFM ' - ~ Advisors LLC . ~n; . Springsted Incorporated Kaufman Hall & 147. 1,943.4 , Associates Inc. ;1 15.9 Susan D. Musselman Ehlers & Associates 158: 1,025.2 Inc. '1 14.2 Caine Mitter & 14 653 8 Ruan Securities Inc. ;4 13.7 . Associates Ina Stem Brothers & Co. 7 528.0 Northland Securities `3 9.1 Columbia Capital 2 2 476.2 Management McDonald Partners Ina , 3 461.3 Piper Jaffray ~ Co, 66 369.3 Lehman Brothers 3 340.0 D.A. Davidson & Co. 7 260.3 2005_National Overall ~ #1; 2005 Iowa GO ~ # 1; 2005 Iowa Competii Practices In order to best serve our clients, we do not limit ourselves to any single area of public finance, but rather develop and maintain expertise in all phases of the business. As a firm, we seek to blend together our national experience with specialized functional expertise, regional knowledge and local perspective. Our specialized practices continually prove that we maintain an unmatched breadth and depth of expertise in public finance to fully serve all levels of government. PFM's Breadth of Expertise Is Unrivaled By Any Other Firm ,, Water & Wastewater ~ # 1 Economic Development ~ # 2 Higher Education ~ # 1 Education ~ # 1 Public Power ^~ #2 Transportation ~ # 2 p~M 5 Organization PFM serves our clientele by creating project teams comprised of experts in specific financing techniques, governmental businesses and geographic regions. Our specialized teams ensure that our clients receive complete and thorough advice directly from the optimal mix of over 100 PFM finance professionals. PFM's Organization Sets Us Apart Frorn Other Financial Advisory Firms. Arbitrage Rebate Balance.5heet Management Debt Issuance Financial Plamung InvesfinentPolicies Lease Negotiation Pension Management Portfolio Management Benchmarking SVatcgic Consulting E;r.ner~} \iu«icipa} IL_althcaFC &~ Itit!hcr L-.ducuion I30 E]Fing [nve9t~nfManagemcu! IuvcstrTletlt Gblivu{ling PpbEidPo~,ccr Schb©t Districts snua w~~te' fi~~orty (<acilities Rt Gbnccntioit C'enlee~, Strategic Consu[ting Trans}iurWtinn Water ~ W~stcwatcf ~Vurklurce & Lehur Det~elcmmerif ~~~ ~ Commitment to Iowa At PFM we are committed to developing long-term relationships with our clients to ensure that their interests are protected and their goals are achieved. We are an active practice serving every type of municipal issuer including cities, states, U.S. territories, authorities, counties, municipalities, townships, territories and school districts. Ankeny CSD Howard-WinneshiekCSD ~~/~,ga„/ p,o~~~ Cedar Rapids CSD Mason City CSD r/~?^" Decorah CSD Springville CSD Des Moines Ind. CSD Urbandale CSD At PFM We are Committed To Developing Long-term Relationships With Our Clients. ~~~ 17 PFM Core Businesses Financial Advisor Public Financial Management, Inc. PFM Comprises Four Specialized Areas Of Business As a financial advisor, PFM engages in capital planning, revenue forecasting and evaluation, resource allocation, debt management policy development and debt transaction management (including structuring, documentation and execution). PFM delivers an unmatched depth and breadth of experience and expertise that helps clients resolve the myriad of technical and financial concerns they routinely confront during the capital formation process. Our national reputation and consistent growth, from $5 billion in managed debt transactions in 1986 to $39.5 billion in 2005, reflect our clients' recognition of our capabilities and the value we add. Strategic Consultant As a strategic consultant, PFM brings its clients the most effective capital and operating budget advice available. We have a proven track record in using various techniques for performance management, benchmarking, revenue enhancement and privatization. Since 1993, PFM has helped clients eliminate billions of dollars of projected budget deficits without increasing taxes or reducing services. ~~~~ 18 PFM Core Businesses PFM Asset Management LLC PFM Advisors PFM Comprises Four Specialized Areas Of Business Investment Manager PFM Asset Management LLC is a specialized component of .PFM, which is devoted exclusively to providing investment advice and portfolio management for funds of state and local governments. As an investment manager, PFM brings a comprehensive spectrum of services to the business of money management. PFM manages both state-oriented investment pools and individual client portfolios designed to earn competitive yields, while maximizing safety and liquidity. Services include timely market-driven portfolio management, portfolio design, state-of-the-art accounting and arbitrage rebate calculation services. The value of this service to clients is evident in the growth of assets under our management, from $1 billion in 1986 to over $48 billion today. Investment Consultant PFM Advisors is a specialized component that provides investment and retirement plan consulting services to pension funds, endowments and similar funds. PFM Advisors believes that a true partnership with our clients can only be achieved by fully understanding the unique characteristics of their fund. Structuring simple, reliable, and fundamentally sound asset and retirement planning management strategies results in predictable investment returns, sound vendor services and few surprises. PFM Advisors clients include public funds, Taft-Hartley funds, corporate funds, hospital, foundation and endowment funds. I9 Scope of Services PFM offers its clients a Complete SCOpe Of Strategic Consulting ~ ,~, SerVICeS t0 meet all thelr ~ Multi'-Year Strategic-Plans Workforce &-Labor Management ' Financial Advisory financial needs. Asa Operational Improvement Financin Schedule -: g Water/Wastewater Consulting Debt Structuring national firm, PFM IS Budget Development & Negotiated vs: Competitwe '~ able to offer an unrivaled Performance Budgeting.- Revenue Enhancement FinancthgTe~m Selection Financing AltePnatives breadth Of eXperlenCe Privatization: it C l P Financing Terms ap a lanning & Draft Documents and market expertise. Management Marketing Plan -Economic Development Rating Presentation Only PFM offers a Bond Pricing horizontally integrated ,Investment Management Fixed-Income Portfolio. Closing Refunding verification services array Of SerVICeS ` Management _ Cash Management designed to meet all their Bond Proceeds Investment Management investment consulting financial needs Policy Development Cash Flow Forecastin 9 Investment Poll.cy ' . Escrow Structuring/Restructuring Structuring Asst Allocatcon P~lodels j Structured Investment, Products Performance Benchmark$ Arbitrage Rebate Compliance Manager Implementation Accounting/Recprdkeeping ~ Regulatory Cornplrance ~ Services ' Customized.G~uarterly Reports. Manager Monitoring.. ' 'Structured Products Qualitative Analysis j Swap and Derivatives Asset/Liability~nalysis, ` Policy,Development Special Pr"ajects ti _....,.. ..~.~._ . ... i Board. and Staff Education ~ _~ _..~_._..~._..._.._._..~~....___ Transaction Analysis and Stru cturing Transaction Pricing and Execu tion'' PFM Offers the Broadest Fair Market ©pniop Letters' Scope of Services of Any " "transaction Disclosure!-.Repo Ongoing Monitoring and rting I Financial Advisor Risk Management p~~ 10 1 Financial Advisory Services PFM delivers an unmatched depth and breadth of experience and expertise that helps clients resolve the myriad technical and financial concerns they routinely confront during the capital formation process. Our national reputation and consistent growth, from $5 billion in managed debt transactions in 1986 to $39.5 billion in 2005, reflect our clients' recognition of our capabilities and the value we add. PFM Provides A Fully Integrated Scope Of Services Cash Flow Modeling Assist in development of operating and capital budgets, creating the budgetary and cash flow models used to determine how much capital spending a given entity can afford, and how they intend to pay back associated debt. Transaction Management PFM also manages the borrowing process. Generally, we represent the municipality's interests in dealing with all other parties to municipal bond transactions. Innovation PFM uses innovative ideas and structures as tools to assist clients in realizing their objectives and solving their problems. ~F~ 11 Strategic Consulting Group PFM works with governmental entities to develop sound operating and capital budgets, optimize asset and debt portfolios and otherwise improve their financial position. We have a proven track record using various techniques for performance management, benchmarking, revenue enhancement and privatization. Our Team Targets the Issues that Plague Distressed Cities • PFM clients include governmental entities ranging from distressed communities nearing bankruptcy to those with strong financial positions. • PFM works with these governmental entities to develop sound operating capital budgets, optimize asset and debt portfolios and otherwise improve their financial positions. • We apply proven techniques that move these communities along the continuum of excellent financial health. P~M~ 112 Investment Advisory Group PFM is the only financial advisory firm to manage over $13 billion of public moneys on behalf of municipal entities; advice for more than $5 billion and each year provide advice on structured products such as interest rate swaps and guaranteed investment contracts with an annual value of more that $17 billion. Again, among financial advisors, only PFM participates in the capital markets so consistently. PFM Is One Of The Nation's Leading And Most Highly Regarded Investment Advisors To Public Agencies $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $- PFM Assets Under Management ($ Millions) 1992 1994 1996 1998 2000 2002 2004 Actively Managed ^ Advisory Only :~ r~=AS' 113 Why PFM? -PFM, has established a partnership with the City. -PFM offers wholly independent advice. -PFM has unmatched technical resources. -PFM offers extensive expertise. :a.: c {..,. .,, s~.. r Our Goal is to help our clients raise, invest and manage their resources in the most cost-effective manner possible. The PFM Group Firm Overview 2600 Grand Avenue Suites 214 Des Moines, IA 50312 www.pfm.com City of Dubuque, Iowa Proposal to Provide Financial Advisory Services December 19, 2006 The PFM Group 2600 Grand Avenue Suite 214 Des Moines, IA 50312 515-243-2600 515-243-6994 fax www.pfm.com r Table of Contents Transmittal Letter TAB Description of the Firm I Statement of Qualifications II Scope of Services III References IV Project Personnel V Insurance ~ Fees VII Legal Violations and Conflicts of Interest VIII Appendix IX ir•= ~r_ _..~ ~ <:. ~~ r_r. The PFM Group ter- _ . Ken Tehippe Finance Director City of Dubuque 50 West 13``' Street Dubuque, Iowa 52001-4864 Dear Ken: 2600 Grand Avenue Suite 214 Des Moines, IA 50312 December 19, 2006 The PFM Group ("PFM"), comprising Public Financial Management, Inc. and PFM Asset Management LI,C, is pleased to submit our proposal to the Ciry of Dubuque, Iowa ("Ciry'~ to provide financial advisory and investment advisory services. We appreciate die opportunity to have worked with die Ciry in the past and look forward to extending our relationship with the introduction of additional team members and resources. We believe that PFM is exceptionally well-qualified to provide the City financial and investment advisory services because of the following: • Knowledge of the City -PFM, and formerly Evensen Dodge, has worked with die City for a number of years. Our historical knowledge of die City's debt portfolio and credit profile will be invaluable as die new Budget Director makes her transition to the City, and as die Ciry continues to seek positive rating feedback and position itself for an eventual rating upgrade. • Financial Advisory Approach -PFM prides itself on finding ways to assist our city clients beyond die debt management process. City officials are pulled in many different directions and may not have the extra time to analyze the impact of the most recent historical financial performance, adopted budget or the capital improvement plan. In many instances, PFM works collaboratively with Ciry officials serving as an extension of staff. • Financial Planning -PFM views financial planning as an essential component of a City's overall debt issuance and financing programs. When it is conducive to meeting the needs of the City, PFM works collaboratively with staff to develop and maintain a variety of cash flow analyses including tax valuation projections, general fund analyses, debt service levy analyses, urban renewal planning and water and sewer cash flow analyses. PFM would like to take the opportunity to extend our existing relationship with the Ciry, and introduce additional worthwhile services. Such services can allow us to assist City staff with analyzing the City's financial performance, effects of capital requirements and adjustments to user rates. City of Dubuque, Iowa Proposal ~P` M~ December 19, 2006 ~~ Page 2 ~_ PFM is confident that the above and other considerations, as more fully presented in our proposal, demonstrate that we can continue to provide a high level of service, innovation and commitment which will exceed the expectations of the Ciry. We look forward to meeting with Ciry officials to further discuss our proposal and we thank you for your consideration. Sincerely, Public Financial Management n~ ~"_ G ~ ~,/'l(/~~ Tionna Reed Pooler Senior Managing Consultant Description of the Firm ~~~~ ~~ ~- History of PFM PFM, including Public Financial Management, Inc. and PFM Asset Management LLC, was founded in 1975 with a staff of five. Both Public Financial Management, Inc. and PFM Asset Management LLC (referred to collectively as "PFM"} are owned and managed by 55 managing directors who, as a group, set overall strategic direction. Today PFM is the nation's leading provider of independent financial and investment advisory services, headquartered in Philadelphia, Pennsylvania, with offices throughout .the United States. PFM currently manages over $24 billion in assets. PFM Advisors, a division of PFM Asset Management, provides investment consulting services for an additional $8 billion. We are an independent advisor, not a broker or dealer, and as such we do not maintain an inventory from which we buy or sell securities for our clients. PFM has five primary business activities: • Financial Advising: managing transactions related to debt issuance; • Investment Management: providing investment advice and portfolio management for working capital and bond proceeds; • Investment Consulting: structuring simple, reliable, and fundamentally sound asset management strategies and retirement plan. • Strategic Consulting: offering highly effective capital and operating budget advice. • Structured Products: developing innovative financing techniques and investment products Independence As an independent financial advisory firm, we are fully and solely committed to the City's concerns. The attention of our professionals is not diverted by the potential conflicts arising from being in the underwriting and securities distribution business. While we are sensitive to investor preferences from a credit, marketing, structuring and pricing perspective, we make our client's needs and requirements our first priority. We serve only one interest: that of our client's and no one else. This fact- coupled with our proven track record and comprehensive approach to finance makes PFM a leader in providing sound, independent financial and investment advisory services to local and state governments as well as institutional borrowers and investors. City of Dubuque, Iowa' Proposal to Provide Financial Advisory Services I 1 _~, iS ~'li'~a r ~~- The Business Financial Advisor As a financial advisor, PFM engages in capital planning, revenue forecasting and evaluation, resource allocation, debt management policy development and debt transaction management (including structuring, documentation and execution). PFM delivers unmatched experience and expertise that helps clients resolve the myriad of technical and financial concerns they routinely confront during the capital formation process. Our national reputation and consistent growth, from $5 billion in managed debt transactions in 1986 to $39.5 billion in 2005, reflect our clients' recognition of our capabilities and the value we add. Investment Manager PFM Asset Management LLC is devoted exclusively to providing investment advice and portfolio management for not-for-profit organizations, corporations, pension funds and other institutions. As an investment manager, PFM brings a comprehensive spectrum of services to the business of money management. PFM manages both investment pools and individual client portfolios designed to earn competitive yields, while maximizing safety and liquidity. Services include timely market-driven portfolio management, portfolio design, state-of-the-art accounting and arbitrage rebate calculation services. The value of this service to clients is evident in the growth of assets under our management, from $1 billion in 1986 to over $48 billion today. Investment Consultant PFM Advisors is a specialized component that provides investment and retirement plan consulting services to pension funds, endowments and similar funds. PFM Advisors believes that a true partnership with our clients can only be achieved by fully understanding the unique characteristics of their fund. Structuring simple, reliable, and fundamentally sound asset and retirement planning management strategies results in predictable investment returns, sound vendor services and few surprises. PFM Advisors clients include public funds, Taft-Hartley funds, corporate funds, hospital, foundation and endowment funds. PFM's professional staff is the best in the public finance industry. We provide our clients with financial, industry and regional expertise needed to craft customized solutions to their problems. Experience PFM's professionals have unparalleled experience and expertise in government and financial markets. Included among PFM's professionals are former finance directors, city managers, county administrators, transit agency CFOs and school business managers. In addition to government service, many of our professionals previously worked as attorneys, commercial and investment bankers, portfolio managers, controllers, accountants, city planners, systems managers, architects and engineers. This broad experience provides perspective for our work and an understanding of the unique pressures that often weigh on our clients. Geographic Diversity PFM is the largest financial advisory firm in the public finance industry with a national presence. With 30 offices nationwide, PFM professionals are City of Dubuque, Iowa -Proposal to Provide Financial Advisory Services 12 ~'~~' ~- ~... ~_ Personnel located in every region of the country, within easy distance of many of our largest clients. This proximity gives us a better understanding of the local issues and problems affecting our clients, as well as the day-to-day contact needed to properly meet their needs. Per the City's request, a list of offices is provided below, with the number of employees stated in parenthesis following the office location. City of Dubuque, Iowa -Proposal to Provide Financial Advisory Services 13 ~'~3' ~~ ~_ ~.- Locations Ann Arbor, MI (7) 734 9949700 Kari Blanchett, Sr. Managing Consultant Michael F. Dixon, Sr. Managing Consultant Arlington, VA (12) 703 741-0175 JoAnne Carter, Managing Director Dan Hartman, Managing Director Atlanta, GA (5) 404 876-1919 Peter Kessenich, Managing Director Austin, TX (10) 512 472-7194 Bill Newman, Managing Director Boston, MA (9) 617 330.6914 June Matte, Managing Director Charlotte, NC (3) 704 541-8339 Michael Mace, Managing Director Chicago, IL (6) 312 977-1570 Timothy P. Sullivan, Managing Director Cleveland, OH (4) 440 239-7070 Ted Ricci, Managing Director Des Moines, IA (9) 515 243-2600 Jon Burmeister, Managing Director Jeanne Vanda, Managing Director Fargo, ND (1) 701 235-4416 Myron L. Knutson, Managing Director Fort Myers, FL (3) 941 939-3009 Hal Canary, Managing Director Harrisburg, PA (96) 717 232-2723 Barbara Fava, Managing Director Debbie Goodnight, Managing Director Michael Harris, Managing Director Marty Margolis, Managing Director Jeffrey Pearsall, Managing Director David Sallack, Managing Director Ken Schiebel, Managing Director Michael Varano, Managing Director Gten Williard, Managing Director Long Island, NY (20) 631 467-0200 Frank Sullivan, Managing Director Los Angeles, CA (4) 213489-4075 Jan Mazyck, Managing Director Malvern, PA (3) 610 647-5487 L. Gordon Walker, Managing Director Memphis, TN (12) 901 682-8356 Marlin Mosby, Managing Director Lisa Daniels, Managing Director Miami, FL (2) 305448-6992 Raul Masvidal, Senior Managing Consultant Milwaukee, WI (3) 414 771-2700 David B. Anderson, Senior Managing Consultant Minneapolis, MN (15) 612 371-3720 Katherine C. Kardell, Managing Director New York, NY (8) 212 218.8350 Michael Mace, Managing Director Robert A. Rich, Managing Director Nancy Winkler, Managing Director Newport Beach, CA (6) 949 721-9422 Keith Curry, Managing Director Oakland, CA (1) 510 622-7762 Lewis Clinton, Senior Managing Consultant Orlando, FL (13) 407 648-2208 Steven Alexander, Managing Director David Miller, Managing Director David Moore, Managing Director Philadelphia, PA (103) 215 567-6100 F. John White, Managing Director Steve Boyle, Managing Director Barbara Bisgaier, Managing Director Michael Cosack, Managing Director Dean Kaplan, Managing Director Brett Matteo, Managing Director Michael Nadol, Managing Director Scott Quehl, Managing Director Anne Romanick, Managing Director John Spagnola, Managing Director Nancy Winkler, Managing Director Phoenix, AZ (1) 602 387-5187 Lauren Brant, Managing Director Pittsburgh, PA (2) 412 561-2608 William Kruck, Senior Managing Consultant Princeton, NJ (4) 609 452-0263 Stephen B. Faber, Managing Director San Francisco, CA (25) 415 982-5544 Lauren Brant, Managing Director Nancy Janes, Managing Director Peter Miller, Managing Director Seattle, WA (6) 206 262-8180 John Bonow, Managing Director St. Louis, MO (5) 314 878-5000 Bill Sullivan, Managing Director City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services I Q~ ~,`.,-, ~:,_.. Statement of Qualifications ~- ~~b ~~ .~ Record of Achievement Over its thirty year history, PFM has built a solid presence in the municipal marketplace. On a national level, we have been involved in financing programs totaling in excess of $290 billion. Last year, PFM advised on 60 bond transactions with a total volume of over $1.2 billion, and was ranked as the number one financial advisor in Iowa. The following charts demonstrate our excellence nationally, as well as our proven track record serving Iowa's municipalities. 2005 Year End Overall Long-Term Municipal New Issues 2005 Year End Iowa Overall Long-Term Municipal New Issues National Municipal Financial Advisory Ranking National Municipal Financial Advisory Ranking Source: The Bond Buyer/Securties Data Company Source: The Bond Buyer/Securities Data Company # transactions dollars in millions # transactions dollars in millions PFM PFM . ~ Public Resources 107 21,950 8 Springsted 20 894:9 Advisory Group Incorporated First Southwest 613 17 797 8 Piper Jaffray & Co. 85 331.2 Company RBC Capital Markets 245 8,118.2 Public Financial l` 58.3 Advisors Kautman Hall & 74 7,042.7 Speer Finanaal Inc. 19 54.3 Associates Inc. Kelling Northcross & y4 5 170.0 Capital Markets S 16.5 Nobriga , Advisors LLC Montague OeRose & Z9 5 107.8 Kaufman Hall 8 ~.1 15 9 Associates LLC , Associates Inc. Lamont Financial 52 -' 4,857.7 Susan D. Musselman 1 14.2 Services Corp. Inc. A.C. Advisoryinc. 24 4,481.3 Ruan Securities Inc. 'r4 13.7 Goldman Sachs 8 Co. 18 4,389.8 Northland Securities <' 3 9.1 2005 Year End Iowa General Obligation Long-Term Municipal New Issues 2005 Year End Iowa Competitive Long-Term Municipal New Issues National Municipal Financial Adur'sory Ranking National Municipal Financial Advisory Ranking Soume: The Bond Buyer/Secunties Data Company Source: The Bond Buyer/Securities Data Company # transactions dollars in millions # transactions dollars in millions PFM ~ • PFM r Piper Jaffray 8 Co. b5 X69 i Piper Jaffray & Co. 79 317 fi Speer Finanaal lnc. 15 41.5 Springsted Incorporated 19 194.9 Springsted ~ 41 2 Speer Financial Inc. 18 48.7 Incorporated Capital Markets Z 16 5 Capital Markets ~ 16 5 Advisors LLC Advisors LLC Susan D. Musselman ~ 14 2 Susan D. Musselman ~ 14 2 Inc. Inc. Northland Securities 2 4.4 Northland Securities 2 7.5 Ruan Securities Inc. ? 2 1.1 Ruan Securities Inc. 2 4.3 City of Dubuque, Iowa -Proposal to Provide Financial Advisory Services I t ~~'~Mg .~ Record of Achievement Although rankings provide a shorthand method of measuring success, the length of service and level of satisfaction we provide our clients is a better measure of true success. At PFM, we view our decade-long association with many clients as an affirmation of our ability to service their needs thoughtfully and efficiently. We are committed to developing long-term relationships with our clients to ensure that their interests are protected and their goals are achieved. In developing this impressive history of value added service to our clients, PFM purposefully adopted a strategy to garner the largest market share when calculated based on both the number and size of transactions managed. We reasoned that managing a large number of transactions would make us an experienced player in the capital markets, thereby allowing us to provide our clients with fresh market information. We know the preferences of the investor community and the financial and credit structures that are currently best accepted. We know which investors are active buyers, the types of securities they currently prefer, and the maximum price they are willing to pay for a given security. Additionally, we know what constitutes reasonable compensation levels for other professional services rendered during the transaction. With this current information, PFM can structure transactions to minimize our clients' cost of borrowing. At the same time, given the number of transactions we manage each year, PFM also has a broad and deep network of capital market professionals with which we interact. This network of investors, underwriters, bankers, credit specialists and lawyers facilitates the transaction management process to our clients. As the largest financial advisory firm, PFM has the ability to solve our clients' intractable problems by using our market power to move the agenda. Our constant participation in the markets only serves to further enhance our ability to do so. Number of Transactions 8,000 - - - - ---- ------- - - -- -- -- -- _ _ - _ PFM ~~~ first Southw c5t s~npany ^ - ~ 6.000 I i - ^ 5~xingstc~ hC. - 5.000 Q,~ . - i i i 3,000 I i - - _ i 2.000 • - - ^ Pnnder .Y Corny ~ - .~_~fifc FCSOUfC es 1,000- _ - ~ '. s PG Corhen3G:rroany_ Y`~.Wewy ~3iwp CxikJ man • ~3tM-Wrthw eSt Securit~ei - 'ac:ns.3~~~.. • l.annfi[Fwrcral~v~~~; _ _ - ~ 0 ~--- MOnta9ue-[bRb5e 8~Ftss~k~teS -------_---, -------~ 0 50 100 150 200 250 300 350 Par Amount (Billions) City of Dubuque, Iowa -Proposal to Provide Financial Advisory Services 17 ~_ I'F~€° ~. .~.. Record of Achievement Besides managing a large number of transactions, PFM also serves as financial advisor on many of the largest transactions brought to market each year. These transactions often involve intricate financial plans, the sale of sophisticated securities, high-end quantitative modeling and complicated tax analysis. Our managing such transactions ensures that PFM remains on the cutting edge of the public finance industry. Our clients benefit from our ability to optimize their transactions using the complete array of structures, securities and techniques available. Ankeny CSD Howard-VVlnneshiek CSD Cedar Rapids CSD Mason City CSD Decaah CSD Springville CSD Des MoinesJnd. CS0 Urbandale CSD PFM is the only financial advisory firm to also offer a full array of investment advisory services including active and passive strategies. We manage over $24 billion of money; we provide advice on structured products such as interest rate swaps and guaranteed investment contracts with an annual value of more that $20.6 billion. Again, among financial advisors, only PFM participates in the capital markets so broadly. Iowa Expertise As demonstrated by our regional rankings, PFM has unparalleled local financial advisory experience. We have built our reputation and success working for cities like the City of Dubuque, Iowa. Because our Des Moines office works extensively with Iowa cities, PFM has developed an expertise in the structuring of general obligation and revenue bonds to optimally meet the needs of local cities. PFM has a solid knowledge of the Iowa statutes and public hearing requirements related to either essential or general corporate purposes. In addition, PFM understands the unique characteristics related specifically to Iowa such as the constraints of the $8.10 levy limit, the credit rating implications of imposing the $0.27 emergency levy, urban renewal laws and the related proposed legislative changes. Many times over the last several years, PFM has been hired by the Iowa League of Cities to develop analyses to articulate the effects on Iowa cities of any proposed legislation. Through this connection, PFM has been able to communicate to our clients the individual effects of this legislation. Financial Expertise PFM's professionals possess the advanced financial skills needed to negotiate aggressive business terms for transactions, structure complex debt issues, analyze credit quality, negotiate bond pricing levels, develop customized computer models, conduct disclosure reviews, invest available moneys, meet federal tax laws and otherwise optimally complete any transaction. We have experts in debt refinancings, derivative products, lease transactions, fixed-income portfolio management, accounting and governmental budgeting. Furthermore, PFM's professionals have a record of developing innovative financing techniques designed to meet our clients' needs at the lowest possible cost of capital. We operate at the high end of the public finance industry, providing advice and counsel based on sound financial principles and sophisticated technical analysis. City of Dubuque, Iowa -Proposal to Provide Financial Advisory Services I Scone of Services ~F'iba" ~. ~_ ~- ScoUe of Services Scope of Services Overview PFM's integrated approach to providing services offers our clients a unique opportunity for leading-edge expertise in the many facets of municipal finance. As will be demonstrated throughout our proposal, PFM possesses the necessary understanding and ability to deliver the requested scope of services in a professional and timely manner. Specifically, PFM's proposed scope of services includes, but is not limited to: financial planning and debt management, capital financing, debt issue development, arbitrage rebate management, continuing disclosure, and investment program management. Capital Financing As anon-underwriting financial advisory firm, PFM offers its clients advice on financing alternatives that is independent and objective. This independence from the underwriting business is important because it allows PFM to develop objective capital financing plans for our clients which incorporate a full range of financing alternatives. As your advisor, we are not blindly committed to the notion that a municipal financing must result in the issuance of municipal bonds. In order to assess the City's ability to raise debt capital in the future, several financial models are formulated to assess the viability of alternative financing strategies to economically provide the required level of funding over time. Optimization models will be developed to address various financing alternatives, including pay-as-you-go financing, usage of cash reserves, grants and state revolving fund loans. In addition, these financial models would include assessments of the various funding sources such as the City's urban renewal areas, debt service levy, water enterprise fund, sewer enterprise fund and potentially the general fund. There are several steps in the development of a capital financing plan. The first step is the identification of the key assumptions that will be common to all strategies. The second step is to identify and review all of the alternative funding sources or options. The third step is to structure each alternative and evaluate its feasibility. Once the models are constructed, existing debt structures of the City are incorporated to test the impact of each alternative financing strategy on the overall financial performance and financing plan. As a result, the current financing program can be evaluated by itself and in concert with previous or future financings or refundings depending on the financing policies established from the outset (e.g., minimize debt service, maintain level debt service, lengthen or shorten maturities, etc.). Through the use of these models, PFM can approach the development of capital financing plan in two ways. The first approach consists of developing a capital budget after an assessment of the City's infrastructure needs. This approach requires a thorough review of all of the available funding sources and options available to the City. In addition, it requires a review of the fiscal impact on the City given additional sources of revenue need to be identified or existing resources need to be enhanced. The second approach is for the City to review its resources that are available without increasing its taxes or rates and charges. For example, the City could have some existing debt being paid off which frees up those same resources for another project. This City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services 11U .~- ~~,~~- ~... ~- ~_ Scope of Services approach allows the City to formulate its capital budget based solely on its existing resources and enables the City to live within its means. Finally, the models will have the flexibility to project the capital program using both "constant" and "current" dollar scenarios. This will prevent the City from embarking on a financing plan that, while feasible using constant dollars, becomes suspect or infeasible when the impact of inflation is recognized. Through the use of these models, PFM is able to articulate the related fiscal and credit rating impacts and communication these findings to City officials. Issuance Authorization As a part of the issuance planning process, PFM works with bond counsel to prepare an outline of the necessary public hearings and notice publication deadlines to ensure the City is compliant with legal requirements. From time to time, securing bond authorization is subject to a direct voter referendum, in which case PFM can provide assistance in educating the public to generate support. Method of Sale Considerations PFM, as an independent financial advisory firm, places considerable corporate emphasis on the professional and skillful conduct of competitive issues. The public finance departments of investment banks generate the vast majority of their revenues from negotiated bond issues and therefore have a natural bias, both in attitude and experience, to negotiated issues. PFM works on dozens of competitive issues each year and, in fact, the team prides itself on successfully bringing non-general obligation issuers to the competitive markets. The following describes the general attributes that argue for a competitive versus a negotiated sale. The decision is made depending primarily upon the attributes of the issue and market conditions at the time of sale. Issuer Type of Qrgan~zation Frequency of Issuance Martcet Awareness Credit Quality Rating Pledged Revenues Security Structure Trend Market Conditions Interest Rates Demand Debt Structure Tax Status Debt Instrument Cost Gross Spread Interest Rate Broad-based,.. general- purpose governmen f Regular borrower in public market Active secondary market with wide investor base "A" or better General obligation Conventional resolution: and cashflow; rate covenant and coverage' Stable Stable,:: predictable market Strong investor demand, good liquidity, light forward calendar Tax-exempt, no concerns Traditional serial and term, full-coupon bonds Historically, spreads have been lower for competitive sales Highest market price for commodity offered on day of sale Special-purpose, independent authority New or infrequent City of debt Little or no institutional base, but growing dealer interest Below single "A" Project supported revenues Uhusualorweak covenants; subordinated debt Improving or under stress Volatile or declining. market Oversold market, heavy supply Taxable- Aggressive use of innovative bond structuring, derivative products, swaps or variable-rate debt instruments Recent data shows negotiated deals to have equal or higher spreads than competitive sales Best match of product with specific investor demand City of Dubuque, Iowa' Proposal to Provide Fnancial Advisory Services ~ 11 ~F'b~, ~- ~. ~- Scope of Services At the outset of the engagement, we will evaluate the existing and expected credit market conditions, features of the credit, and financing time schedule associated with the proposed bond sale. These and other factors will be used to develop a recommended method of sale. Finance Team Development PFM will assist the City, as needed, in identifying and procuring special financial related services that may be needed over the course of its financing program; both in drafting requests for proposal and compiling and evaluating responses. Some of these services are generic to any financing alternative while others may or may not be required depending on the financing vehicle chosen. Services needed for many financings include: • Special Tax Counsel • Underwriter Selection • Trustee Selection • Paying Agent Selection • Feasibility Consultants • Special Credit Facilities (includes such items as letters of credit or bond insurance) At each point where a special service is required, PFM will research and develop a set of bid specifications for the desired service, develop a distribution list, and supervise the circulation of the requests for proposals. PFM will analyze and summarize bid responses and outline the advantages and disadvantages of each response to assist the City in its review process. PFM will present specific recommendations based upon quantitative and qualitative analyses of each respondent's bid recognizing: (a) Price PFM can advise not only on the pricing of each bid with respect to the others but also on the pricing with respect to similar costs of concurrent or planned financings currently in the capital markets. (b) Credit Impact Where opinions are being solicited as opposed to hard products, PFM can advise on the relative merits of opinions, as perceived by the financial markets, which may affect the marketability or pricing in a financing. (c) Expertise Notwithstanding other factors, certain firms are more experienced than others in specific areas such as economic forecasting, furnishing fetters of credit, or structuring a particular financing alternative. PFM can advise the City on these firms, especially as this may relate to capital market acceptance of the underlying securities being issued. (d) Distribution Recognizing certain financing vehicles are more successfully sold in institutional versus individual markets, PFM can advise as to which banking firms are better suited to successfully market each type of security. This can be particularly important in a negotiated offering when the senior manager and underwriting syndicate are chosen. City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services I iG ~'~I4~° ~. ~.. ~. ~. ~_ `~_ Scope of Services Underwriter Selection When it is determined that a negotiated sale is appropriate, PFM wilt work with City officials to develop a detailed request for underwriting proposals. This approach to the selection of its underwriting group gives the City an opportunity to control all components of the underwriting spread and identify those firms which are most experienced with marketing securities of the type being offered. In addition, through our experience in bringing over $41 billion in debt to market for our clients, PFM professionals have worked with a wide variety of underwriting firms and investment bankers and will use this experience to the City's benefit. Once the underwriting group has been chosen, PFM will negotiate on the City's behalf to ensure that the issue is aggressively priced relative to current market conditions. Issuance Planning In recent years, volatile market conditions have forced issuers to carefully time their tax-exempt borrowings. Factors such as wildly fluctuating interest rates, unprecedented upheaval in the international economic community, and regular federal tax reform proposals have combined to create an unstable tax-exempt market environment. To assist its clients with the timing of proposed issues, PFM closely monitors all such developments and evaluates the potential impact of each on new-issue, tax-exempt securities. In addition, PFM's regional and national perspective would allow the City to coordinate its offerings with those of other issuers. This effort is designed to focus underwriter interest on the City's transaction by separating them from other sales. Our overall goal is to identify a market in which: (i} interest rates are stable; (ii) the supply of tax-exempt securities is light; and (iii) there is no scheduled economic releases that can cause market upset. While PFM is committed to identifying a favorable sale date for each of the City's transactions, we recognize that there are inherent risks in trying to anticipate market trends and believe that the City's. own cash flow needs would normally be the most important factor affecting the timing of a particular sale. Our advice to the City concerning issue timing will reflect PFM's sensitivity to your needs, our experience with the sale of more than $41 billion of tax-exempt debt, as well as our cautious interpretation of all current market and legislative information. Develop and Monitor Financing Schedule To facilitate the timely completion of all tasks, PFM will prepare a bond sale calendar that clearly identifies the responsibilities of each participant in the transaction. The schedule will be designed to permit sufficient time for review of all disclosure materials by City officials prior to final printing and distribution. PFM will utilize its extensive experience to prepare a schedule that allows for the orderly completion of each component of the transaction. Moreover, we will work closely with all external participants (e.g., printers, rating analysts, etc.) to ensure that their tasks are coordinated with the activities of the City's staff. Finally, we will keep City officials informed about the progress of the financing and, if necessary, remind team members of deadlines. City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services I 1 ~~'~~, ~d ~_ ~_ ~. Scope of Services Debt Structuring The determination of an efficient issue structure is a function of three elements: (i) is the proposed amortization schedule well coordinated with the City's existing debt obligations and revenues? (ii) are the resources pledged to debt redemption sufficient to meet total debt service coverage requirements when existing and proposed debt is combined? (iii) is the proposed maturity schedule designed to attract maximum interest from underwriters and potential investors in the current market? Working with City staff, PFM will use the information it has gathered from development phase of the engagement to facilitate the formulation of the issue structure and the terms under which the bonds are to be offered in order to answer the aforementioned questions in the best possible manner, given the current market. PFM's experience with the structuring and sale of over $41 billion of debt has given us an appreciation for this task and an awareness of how to design terms and conditions of sale that are compatible with underwriter and investor interests under varying market conditions while consistent with the City's fiscal policy objectives. Some of the key issues to be addressed are: Maturity Schedule and Pattern of Debt Service In general, PFM believes that the City should schedule the redemption of its debt to maintain required debt service coverage ratios, while preserving future debt capacity, or in the case of general obligation debt, to provide for the lowest total debt service while limiting the millage impact. PFM will utilize its technical expertise, understanding of the specific credit requirements needed to maintain the City's current credit ratings and extensive market experience to develop a maturity schedule for each bond issue that addresses all of these concerns. Security Our experience in the municipal market will enable us to identify reasonable security provisions for each of the City's financing programs. As these provisions are developed, PFM will evaluate the potential impact of each term and condition of the financing on the City's ability to: • Efficiently fund other projects in the future, • Efficiently manage its investments, • Minimize required debt service coverage without affecting bond ratings, • Refinance debt in the future. Rating Agency Discussion PFM has developed considerable experience working with the major national rating agencies. As a result of our experience advising more than one hundred clients each year to issue tax-exempt securities for a wide range of purposes, PFM has developed a clear understanding of the analytical methods utilized by Moody's Investors Service, Standard & Poor's Inc. and Fitch IBCA. Our professional staff is trained to conduct in-depth credit analyses comparable to the rating agencies so that both credit strengths and weaknesses can be identified by the City prior to the presentation of materials to rating analysts. This experience has been utilized effectively recently to improve the credit ratings assigned to several communities across the nation. City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services ~ 14 ~- ~r~~a Scone of Services As a normal course of any financial advisory engagement, PFM professionals are called upon to meet with officials of our client, other professionals participating on the financing team, outside interests which may require a briefing on the details of a financing mechanism or program, rating analysts, investors and representatives of Letter of Credit Banks or bond insurers. The experience gained in completing over $12 billion of transactions in the past two years alone enables PFM to provide essential information to interested individuals in a timely and complete manner. Over the past two years, PFM has submitted over 200 financings to the rating agencies for ratings. Of this number, approximately 60 of the issues were insured and another 20 were backed by credit enhancements in the form of letters of credit from major international banks. As a result of this experience, we have developed a very effective working relationship with Moody's Investors Service, Standard & Poor's Corporation, and Fitch IBCA. We will work closely with the rating agencies to fully understand their concerns and methodology and to design the City's presentations, as described below, to specifically address each agency's questions in a meaningful way. In addition, we maintain close personal contact with staff members at the rating agencies regarding their views of debt covenants, innovative financing techniques and unusual debt structures. Recommend Presentation Format When the City makes a formal rating presentation, a presentation document should be developed. This document will provide a level of detail concerning the City's financial performance and results that is not permitted in the preliminary official statement. The presentation document is the appropriate forum for the graphic presentation of pertinent financial material-particularly data demonstrating trends in income, debt service and debt service coverage. The presentation document offers the City an opportunity to be creative in its presentation. It should not, however, become overly promotional. While it is perfectly acceptable to focus on the City's strengths, the document must also describe problems facing the City. This document offers an excellent forum in which to delineate management approaches to problem resolution. PFM's advisory team will offer an objective appraisal of the presentation document format and suggest improvements based on our firm's extensive experience with the rating process. Provide Outline for Presentation To ensure that all relevant points are covered in the rating presentation, PFM will develop brief summaries or talking points of important items to be' covered by each of the participahts in the rating meeting. Such talking points will set clear parameters for officials' remarks on each topic. In addition to making sure that all necessary information is presented, the talking points will set limits on the time to be spent on each item and suggest ways to present the material in the most favorable light. The importance of this phase of the project varies with the experience of the individuals participating in the meeting. However, even the best speakers and most technically competent officials need guidance in the development of a rating presentation. The rating analysts' view of public finance is different than that of the public officials. For this reason, the input of PFM's advisors, who have dealt with the rating agencies a number of times in the City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services 11J ~'~~I' ~. ~. .~~ Scotie of Services past, can be very important. Common sense goes a long way in these meetings, but it is no substitute for experience. Assist with the Collection of Data PFM will assist the City with the compilation, review, and revision of documentation required by the rating agencies. Our purpose in this phase of the project is to ensure that the City has all required documentation available in a format that is consistent with market expectations. The ready availability of this material demonstrates a significant degree of management control and sophistication and is a very favorable rating factor. Conduct Rehearsal of Rating Presentation Prior to the rating meeting, PFM will conduct.a rehearsal of the rating agency presentation. The rehearsal offers three significant benefits; first, it ensures that the essential items of information are covered in a logical manner; second, it helps each individual refine his or her delivery style; and third, it enables the City to control the timing of the presentation. Credit Enhancement PFM will consider the benefits of obtaining credit enhancement in relation to the premium costs. The effective interest cost of the City's financings may be reduced and structural flexibility enhanced with some form of credit enhancement. This additional assurance improves the credit quality of the debt; thus the debt receives a higher rating and the City reduces its interest expense. There are two major types of credit enhancement: bond insurance and letters of credit. With either of these forms of credit enhancement, the debt assumes the rating of the stronger pledge. The Tax Reform Act of 1986 extends the treatment of credit enhancement premiums as an interest expense in calculating the yield on the bonds so the City can recover a portion of the cost of the credit enhancement, thereby reducing the effective cost of such enhancements. It is important to realize that a credit enhancement is not always in an issuers' best interest. Depending on market conditions, the cost of the insurance may exceed the present value benefit of the insurance. PFM assesses these issues continuously, and we would be prepared to analyze the City's credit, in light of prevailing market conditions at the time of sale, to determine whether bond insurance would be acost-effective means of reducing the City's borrowing expense. City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services ~ 16 ~- ~~;~~' ~~ ~~ ~. ~. ,~ i Scope of Services Document Development Working closely with the City's staff and bond counsel, PFM will be actively involved in the development of key disclosure materials required to effectively market the City's issues. These disclosure materials include the preliminary official statement ("POS"), the final official statement ("OS"), the official bid form and the notice of sale. The importance of the POS cannot be overstated. It serves not only as the primary marketing and promotional toot for City and underwriter and as the vehicle for the disclosure of important financial and legal information about the City, but also as the primary source of information to rating agencies. It distributes factual data, but also relays a message about the City's management style. Therefore, summary and technical explanations must be clear and the documentation must be comprehensive and well organized. With minor modification following the sale, the POS becomes the final OS- the public document of record for the financing and the City's only official contact to most of your investors. For the City' offerings, PFM will work closely with the administrative staff to ensure that the POS is in full compliance with SEC guidelines, industry standards, and the guidelines developed by the GFOA and MSR6. Once a financial plan has been adopted by the City, the financing team will be responsible for drafting, printing, adopting, and distributing all legal and disclosure documents. PFM's project team members have experience assisting issuers across the nation to prepare the necessary legal documents and other disclosure documents for the issuance of taxable and tax-exempt securities. On complex projects, this phase of the project can be extremely time-consuming. PFM will coordinate with City officials, bond counsel, and other team members the preparation, review, and finalization of all bond document preparation activities, including the preparation and review of trust indentures, official statements, loan agreements, reimbursement contracts, trust participation agreements, purchase contracts, remarketing agreements, and other contracts that may be necessary for bond issues and other debt instruments considered by the City. Other documents, such as feasibility studies, use agreements, and arbitrage certificates, are the responsibility of other parties, but their preparation will be incorporated into the document preparation work coordinated by PFM prior to the sale of securities. City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services 117 ~~~~' ~.. .~.. ~. ~. ~- ~--. Scone of Services Competitive Issuance Process PFM maintains extensive mailing lists, targeted by region and debt structure, of not only potential underwriters but major investors to whom all disclosure materials will be distributed. Utilizing these lists, PFM can ensure that all interested parties are provided with all the information they need to make an informed investment decision concerning the City's proposed offering. Furthermore, PFM encourages interest in the City's new issues through our direct contact with many major underwriting desks. The advantages of this activity are two-fold. First, PFM is able to inquire about the possible impact of different financing features including early call provisions or the resizing after award of the bonds. Second, by canvassing potential investors and underwriters, PFM is able to give added market exposure to any of the City's new bond issues. In those cases where we are working directly with the City on a competitive sale, PFM will follow up the mailing of the POS the week before the sale with individual calls to all the major national and regional firms that we feel should be interested in the financing to answer any specific questions they might have and to encourage them to submit bids to the City. We have found that this process has been very successful in increasing the number and competitiveness of the bids an issuer would receive. Bid Evaluation and Award Recommendation Bids will be submitted pursuant to bid specifications outlined in the preliminary offering statement. The bonds will be awarded to the bidder offering the lowest interest rate to be determined on a true interest cost basis (TIC). The TIC shall be determined by the "present worth method," i.e., by ascertaining the semiannual rate, compounded semi-annually, necessary to discount to present worth as of the anticipated dated date of the bonds, the amount payable on each interest payment date and on each stated maturity date or earlier mandatory redemption, so that the aggregate of such amounts will equal the aggregate purchase price offered therefore. The TIC shall be stated in terms of an annual percentage rate and shall be that rate of interest which is twice the semiannual rate so ascertained. In advance of the sale, PFM will create a bid evaluation model, to verify the accuracy of the bids submitted; typically the financial advisor's computation of the TIC of each bid is controlling. Subsequent to the receipt of all bids, PFM will verify and tabulate all bids, and provide a written recommendation to the City. In most cases, PFM makes an oral presentation of the sales results and recommendation to the governing body on the evening of the competitive sale. Negotiated Issuance Process PFM plays an exceptionally strong supervisory role in negotiated sales. Notwithstanding any existing relationships between the City and an underwriter, we circulate an underwriting RFP which begins the process of negotiation by setting an upper limit for spread quotes. The interview process further defines the terms and conditions of the forthcoming issue. The City and PFM will select the main sales syndicate and set the management fee split, rather than leaving these important details to the lead underwriter. We also generate the Investment Banking Agreement which is geared to clearly indicate the services to be provided by the underwriters, City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services 11Q ~~t4~" ~~ .~.. +~ Scope of Services distinguishing the services from those provided by PFM, and sets the upper limit for spreads, reimbursable expenses and rate. PFM requires that a pricing book be prepared by the underwriter at least one week prior to pricing, so that the City can review the spread items, including a detailed list of expenses, and is fully prepared to negotiate. While the pricing book contains comparable rate and spread information on other recent bond sales, we also collect comparable information and would inform the City on the reasonableness of the pricing quotes. PFM will work with the City throughout the pricing, assisting in evaluating the efforts of the underwriting team. To be sure that the bonds are selling in the manner represented, we will call other firms in the syndicate to check the sales progress information. Our contact with other underwriting firms gives us sufficient information to be able to override the underwriter and to insist on lower interest rates and/or spreads. PFM will also make recommendations regarding the bond allocation among underwriters, to ensure that those who are selling the bonds at the best rates are receiving a sufficient supply of bonds. Issuance Coordination Once the working group has been selected, PFM assumes the role of coordinator and catalyst, dissemination all pertinent information to bond counsel, rating agencies, and potential bidders. The objective of this process is to create a package of terms that creates broad-based interest in the debt among investors while ensuring the lowest possible cost to the City and future flexibility. After assisting the City in developing its financing priorities, it will be PFM's job to represent the City's point of view to the other team members during all discussions about the structure of the financing. Closing the Transaction PFM will work with all parties involved with the closing to prepare a schedule of tasks to be completed prior to closing and identify the party responsible for completing the task. These tasks include printing and preparing bond certificates (if printed bonds are used), completing the final official statement, preparing closing documents, arranging for the transfer of funds and investment of funds (at the City's request). In preparation for closing, PFM will work with the City's bond counsel and other members of the financing team to prepare and review all required documentation. If the transaction is a refunding, PFM will assist in the purchase of U.S. Treasury securities for the escrow. Other closing arrangements will also be completed so that officials of the City can be confident that each transaction will be completely and professionally brought to a close. Subsequent to closing, PFM will provide a comprehensive post- sale memorandum to the City. Once bond proceeds have been delivered, PFM is also prepared to offer the City its full range of investment management services as described in the next section. These services will be performed by PFM's Investment Advisory Group located in PFM's Harrisburg office. City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services ~ 19 ~'~'~~` ~. ~. ~_ Scone of Services Investment Management Services While many firms are managing pension funds, corporate funds and equities, the importance of properly managing public sector funds -particularly bond proceeds, construction accounts and operating funds-has often been ignored. PFM's investment advisory team specializes exclusively in directing the management of public sector funds. Moreover, our market presence ensures that we have access to the best market rates. Through the economies of scale afforded by managing $5.0 billion in assets for clients across the country, we have a market presence and expertise that no individual government agency could duplicate at such a modest expense. Investment Policy Development While overall investment policies are governed by state law, we also believe that they should be responsive to individual investment policies and needs as well. We work closely with our clients to define overall investment objectives and an optimal asset and maturity structure for the investment portfolio. In order to create a customized investment program, we review current investments, as well as revenue and expense projections. In designing a customized investment program for the City, we keep in mind three basic goals: (i) to preserve capital, (ii) to provide needed liquidity, and, within the constraints of preserving capital and maintaining liquidity, (iii) to optimize earnings. Liability Management Our approach to our investment advisory work is unique in that we assist in developing a customized management strategy for related liabilities in addition to developing a customized asset management strategy. Our investment advisory team assists in preparing and monitoring cash flow and disbursement projections. Investing cash that is not needed for immediate purposes in longer-maturity and hence higher-yielding securities can improve overall returns substantially, especially when the yield curve has a steep upward slope. By matching assets and liabilities, we are able to invest at high rates while maintaining adequate liquidity. Por[folio Management 1. Investment Philosophy: Active Management Faced with the complexity of the Tax Reform Act and the time constraints created by a finance officer's regular duties, finance officers may be inclined to follow a passive strategy that relies on a commercial or investment bank to supply a portfolio of securities that needs no adjustment for the life of the tax-exempt debt, or by rolling short-term certificates of deposit. This approach overlooks an important source of investment income and still leaves unanswered the question of how to deal with the tax law's arbitrage and rebate requirements. As finance officers, issuers assume the implied fiduciary responsibilities of optimizing return, avoiding risk, and providing adequate liquidity. Merely buying a portfolio and ignoring it fails to fulfill these responsibilities. No mechanism is created for dealing with the unexpected. PFM's active management can respond to changes in the markets and changes in payment or construction schedules. City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services 12~ ~~~~t" ~. i r~ r ~~ Scone of Services PFM's active management calls for assets and liabilities to be monitored on a regular basis. Based on this monitoring, we can trade out of securities that have become more risky or whose returns have fallen behind the market, and into new securities which promise better returns or greater security. The passive approach offers an opportunity for abuse: there is an inherent conflict of interest in having a banker provide a portfolio of investments. Commercial and investment banks can increase their earnings on a financing by providing investments for bond proceeds at prices advantageous to them. On the other hand, in competitive shopping for investments undertaken by an active manager on behalf of the City, the spreads between high and low bids can amount to hundreds of thousands of dollars-and in some cases may be even greater than the underwriting spreads themselves. Actively monitoring the markets and soliciting bids from a wide range of dealers ensures that investments are purchased at the best possible yield. The 1986 Tax Reform Act has added a new dimension to our philosophy of active management, since in many cases borrowers do not benefit from investment earnings in excess of their borrowing rate. Portfolio management means choosing a mix of investments that will maximize yield not subject to rebate. If an issuer borrows at a relatively low rate, this may mean passing up high-yielding federal agency obligations and certificates of deposit in favor of a Treasury Bill portfolio, since the greater liquidity of Bills is of possible benefit while the greater yield of other investments is of no benefit. In other cases, it may mean maximizing yields at the start of a construction project, since extra investment earnings may be carried forward to offset the affects of a lower investment rate in later periods. In every case, PFM's approach to active management means that arbitrage rebate rules are considered at the time that we make investment decisions, and not just at the time-which may be a year or more after the investment decisions-that rebate calculations are undertaken. PFM's approach to overall portfolio structure, the mix of investments, and the interest rate risk (should rates and construction draw schedules both move against the City) all are conditioned by the rebate requirements. Active proceeds management programs, such as PFM's, requires daily in-depth contact with the markets fora range of financial instruments such as Treasury and Agency securities, certificates of deposit, repurchase agreements, and commercial paper. Active management also calls for the expertise to move funds from one investment to another. Only the most frequent issuers can justify the expense of creating the facilities and in-house expertise demanded to fill this role and few finance officers have the time to take on this additional full-time burden. As one writer concluded in Public Investor, the Government Finance Officers Association's monthly newsletter, "full-time market professionals should be able to produce better results City of Dubuque, Iowa -Proposal to Provide Financial Advisory Services 121 ~~~~ ~~ ~~ '~ Scotie of Services through active management than their part-time public-sector counterparts who generally lack facilities, resources and experience." Ideally, the City should select a manager who does not own, underwrite, sell, or take delivery of investment securities and therefore does not profit from investment transactions. A manager should be compensated solely by a management fee paid by the City, and not through spreads earned on the sale or trading of securities. PFM is not a securities dealer; therefore, our only compensation for our investment management services are management fees. 2. Active Management in Volatile Markets Market conditions have fluctuated dramatically during the last year and PFM has been able to monitor and to take advantage of this volatility. This volatility can create opportunities to maximize investment returns, even while avoiding risk. By monitoring the markets, PFM can add value through swaps, arbitrage and' trading. With market conditions- and interest rates--changing from minute to minute, the performance of PFM-managed funds can be improved substantially through informed and careful timing of investment purchases and sales. For example, it is possible to take advantage of volatile markets to improve earnings without subjecting a portfolio to increased risk. The difference in yields between four-month U.S. Treasury Bills (highly secure short-term securities offered and guaranteed by the U.S.. Federal Government) and four-month Federal Agency Discount Notes (securities offered by and guaranteed by federal agencies, such as the Federal National Mortgage Association which issues FNMAs or "Fannie Maes") of the same maturity from May 1988 through April 1989 ranged from nearly 115 basis points (or 1.15%) to -23 basis points (or -0.23%). PFM took advantage of this volatility by moving the funds from one security to another by purchasing Treasury securities when the difference between the two types of securities was low. While both Treasury and Agency securities are highly secure, Treasury securities are deemed more secure by the markets because they are a direct obligation of the U.S. Government. Therefore if the Agency securities offer little or no interest rate advantage, a PFM portfolio manager will choose Treasury securities over Agency securities. However, if the rates on Agency obligations become significantly higher than the rates on Treasury securities of comparable term, the portfolio manager might swap into Agency obligations thereby picking up significantly higher yield while maintaining high security. 3. Active Management: Investment Decisions With an eye toward maximizing retums and avoiding risk, PFM will evaluate a number of factors in relation to prevailing and anticipated market conditions- The paramount consideration for PFM investment managers is protecting the assets under management from unnecessary risk. Avoiding risk requires careful selection of securities as well as careful monitoring of the credit worthiness of all participants in the investment City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services 122 i'~~~" ~.. ~. ~- ~- Scone of Services process. Secondly the PFM investment manager will select securities which will maximize returns. This will require careful analysis of disbursement requirements. Proper timing of investment maturities will ensure that returns are maximized, while maintaining adequate liquidity. Finally, once the securities are selected, PFM's money management professionals who have an active market presence-will canvass securities dealers and brokers to obtain the securities at the lowest available cost. Arbitrage Rebate Compliance As investment advisor to a tax-exempt bond issuer, PFM assumes responsibility for all calculations, monitoring and documentation necessary for compliance with federal tax regulations, including the arbitrage and rebate provisions. The Tax Reform Act of 1986 created a great deal of confusion and concern among tax-exempt bond issuers interested in managing their funds efficiently while complying fully with the new tax law. Many issuers have tried to address this problem by placing their bond proceeds in low-interest-bearing devices. Others have bid out all their investments at once, and have ignored the investments thereafter. Unfortunately, these simplistic responses do not give issuers the interest revenues they require, the flexibility that is essential to financing a capital project, and-worst of all-may yet fall short of complying with the Tax Reform Act regulations. For example, an issuer who invests in low-yielding securities might be faced with the prospect of the U.S. Treasury demanding that the City calculate its rebate based on the investments it could have obtained. Given this uncertain climate, issuers now recognize the importance of obtaining expert advice with regard to investing their funds and with regard to arbitrage and rebate compliance. PFM has worked with leading bond counsel firms across the nation on tax- exempt financings ranging from several hundred thousand dollars to $700 million. Our approach to working with bond counsel firms is simple: PFM turns to bond counsel to interpret the provisions of the Internal Revenue Code with respect to the client's bond issue. Based on these interpretations, PFM prepares all of the mathematical computations necessary to compute the arbitrage rebate amount, if any, on the bonds. This report is then submitted to bond counsel which reviews PFM's methodology, and based on this review, issues a letter of comfort to the City stating that the methodology employed to calculate the yield on the bonds, the yield on the investments and the arbitrage rebate amount (if any), is in compliance with federal tax law. Bond counsel's role is to continue such reviews on an annual basis. PFM's sophisticated accounting and reporting system provides accurate and up-to-date reports on the City's investment portfolio(s). These reports are furnished to bond counsel for use in its annual review. City of Dubuque, Iowa -Proposal to Provide Financial Advisory Services' 22 ~'~~f° ~. i ~r r_ ~_ Z Scope of Services Continuing Disclosure Services PFM's role in advising our clients with respect to current or new SEC rules for secondary market disclosure varies with each client and is dependent upon their particular situation. Our assistance to the City may include some or all of the following: • Assisting with drafting the official statement for the primary offering. The official statement will create certain information standards for the annual information statements which are to be filed with the information repositories. • Reviewing the agreement, drafted by bond counsel, that is made between the City and bondholders which sets forth the ongoing obligations of the City to comply with the SEC rules. • Assisting with preparing and filing the annual information statement required by the SEC. We will review the information statement or assist in its preparation, and we will distribute the statement to the required information repositories if requested, including online disclosure through DisclosureUSA.org. • Assisting the City with developing procedures for determining when a specific material "event" has occurred, assessing specific financial events to determine whether such events should be disclosed, preparing the event disclosure statement, and filing the disclosure statement with the information repositories. Refunding Analysis Throughout the financial planning and debt management process, PFM actively monitors our client's outstanding debt for refunding opportunities. In 2005, PFM implemented $922 million in refundings which saved our clients several millions of dollars in interest expense. As the City contemplates refunding some or all of its outstanding bonds, it is important to properly analyze all aspects of the proposed transaction to optimize savings. PFM employs a "funnel approach" to evaluate refundings, whereby each series, and then each outstanding maturity, is examined in progressively more and more detail to identify and analyze refunding opportunities. This approach recognizes that to identify the optimal universe of refunding candidates, the savings that may be realized by refunding a given bond must reach some threshold level, and that this threshold savings level must bear some defensible relationship to the theoretical value of the bond's embedded call option. PFM's approach to evaluating refundings also recognizes that these absolute and relative savings criteria must not be determined only on amaturity-by-maturity basis. Rather, if maximum value is to be realized, consideration must also be given to the dynamic effect that refunding several bonds or series of bonds at the same time may have on the escrow and/or bond structure. PFM begins its refunding analysis by categorizing each of the City's bonds based on each series' legal refunding status and the gross and present value savings that may be garnered by refunding a given maturity. PFM then continues to systematically analyze each maturity to determine why it City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services 124 .1'~3~° ~.. ~~ ~_ Scone of Services generates its level of savings and whether these savings may be increased using a variety of techniques. Next, PFM provides option valuation analysis that permits the City to determine whether or not these resultant savings are sufficient to merit a refunding in consideration of the City's policies and goals. Finally, PFM calculates the marginal impact on savings produced by refunding a given bond as part of a larger transaction. Plan of Service Collectively, Evensen Dodge and PFM have partnered with the City of Dubuque for a number of years, providing comprehensive financial advisory services such as debt issuance and continuing disclosure. In the last three years, PFM has managed the following transactions for the City: • $1,750,000 General Obligation Bonds, Series 2005A (April, 2005) • $4,270,000 General Obligation Urban Renewal Bonds, Series 20056 (April, 2005) • $2,995,000 General Obligation Urban Renewal Bonds, Taxable Series 2005C (April, 2005) • $2,900,000 General Obligation Bonds, Series 2006A (May, 2006) • $910,000 General Obligation Urban Renewal Bonds, Series 20068 (May, 2006) • $3,525,000 General Obligation Refunding Bonds, Series 2006C (May, 2006) In structuring these transactions, PFM maximized savings potential by isolating the state-exempt urban renewal bonds from corporate purpose bonds, allowing those issues to receive the potential benefit of double- exemption. While the value of double-exemption varies based on the purchaser of the bonds, PFM believes we should position the City to receive the lowest-cost of financing possible. In 2006, PFM assisted the City with the advance refunding of callable maturities of General Obligation Bonds, Series 2000B, and a portion of the General Obligation Bonds, Series 2000C. In addition to our regular review of the City's refunding opportunities, the City also received a refunding proposal from another firm, suggesting that all callable maturities be refunded. What the proposal failed to consider, however, was the impact that the increased size of the overall refunding would have on the City's bank qualification status. PFM helped the City determine that the estimated savings to be generated by refunding the additional bonds was not substantial enough to justify forgoing the benefit of bank qualification. The result was the successful bank-qualified issuance of new money and refunding bonds, generating over 7.5% present value savings to the City. Most recently, PFM has assisted the City with the allocation of refunding debt service (please see Appendix). This detailed allocation will enable the City's new Budget Director to more easily reconcile reports and prepare for levy askings. City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services 175 .~F~~~ r ~- ~- Scope of Services In addition to a continuation of the existing services, PFM proposes to expand the services provided. PFM's technical abilities extend beyond those demonstrated in the projects that have been completed, and include the preparation of cash flow analyses including tax valuation projections, general fund analyses, debt service levy analyses, urban renewal planning and water and sewer cash flow analysis. As can be seen in the detailed references that follow, PFM offers a comprehensive approach to financial planning, and would like the opportunity to include the provision of these services in a renewed contract. City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services 126 References ~?~~° ~.. ~~ References PFM's state-wide rankings speak to an unsurpassed level and quality of service, provided to local municipalities by a local regional office with a commitment to Iowa. The following summary of debt transactions spans only the last three years, and articulates the depth of services provided to clients within the Des Moines metro area. PFM is proud of the service and expertise we provide, and sincerely hope that City staff will take the opportunity to speak to area peers and learn from them the -evel of commitment and resources we have extended to them. Contacts have been included as requested, and are as follows: ~~~i1' I ~ cm~ocr~ mor~i City of Des Moines Allen McKinley, Finance Director, 515-283-4844 Merrill Stanley, Deputy City Manager, 515-283-4523 PFM was selected as financial advisor in the fall of 1998. Because PFM had prepared a debt profile for the City of Des Moines, the transition process was swift and PFM was able to immediately begin assisting the City of Des Moines with its financial planning initiatives. The research undertaken to develop the debt profile provided PFM with a thorough foundation moving forward. Since 1998, PFM has developed and implemented tax-exempt and taxable G.O. and TIF financing plans for various City improvements including street, park, library and flood control projects. In addition, PFM has implemented financings related to the City of Des Moines' economic development projects such as Gateway and Court Avenue. In the fall of 1999, PFM developed and implemented a master lease equipment program allowing the City to enter into non-appropriated leases {not fully subject to G.O. debt capacity). The master lease equipment program provides flexibility to structure the financing mechanism to meet the timing of the equipment acquisition and match the useful life of the equipment with the financing term. In the summer of 2000, PFM assisted the City of Des Moines in developing and implementing a financing plan for the issuance of just under $30,000,000 in refunding and new money Parking Revenue Bonds. Through the use of PFM's spreadsheet modeling, the City of Des Moines was able to assess the impact of various rate increases and capital expenditures on the long-term financial viability of the parking fund. In the past, Des Moines City staff was responsible for its own cash flow modeling. Through PFM's "extension of staff" methodology, this responsibility has been transferred to PFM with review and oversight provided by Des Moines City staff. In 2002, PFM assisted the City of Des Moines in developing and implementing a financing plan and cash flow analysis for the issuance of $26,685,000 in refunding and new money Sewer Revenue Bonds for the City's Sewer Enterprise Fund and the Des Moines Metropolitan Wastewater Reclamation Authority (WRA). The WRA is composed of ten incorporated cities, two sanitary sewer districts and unincorporated areas within two counties in the central portion of Iowa. In addition, PFM assisted the City of Des Moines in the issuance of $41,640,000 General Obligation Bonds in June of 2002 (both taxable and tax-exempt). Currently, PFM is assisting the City by analyzing the financial performance of the City's Storm Water Management Utility through the development of a cash flow analysis. Upon completion of this analysis, PFM will assist the City in formulating a financial plan and initial credit assessment for the City's only City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services 120 ~~'1~f" ~_ ~_ - References issuance of approximately $10,000,000 in Storm Water Management Utility Revenue Bonds. In the last three years, PFM has managed the following transactions for the city: • $21,335,000 General Obligation Refunding Bonds, Series 2004A (May, 2004) • $33,300,000 General Obligation Refunding Bonds, Series 20048 (May, 2004) • $13,685,000 General Obligation Bonds, Series 2004C (June, 2004) • $14,425,000 General Obligation Bonds, Series 2004D (Urban Renewal) (June, 2004) • $4,830,000 General Obligation Bonds, (Taxable) Series 2004E (June, 2004) • $8,510,000 Stormwater Management Utility Revenue Bonds, Series 2004E (June, 2004) • $5,160,000 Sewer Revenue Bonds, Series 2004G (November, 2004) • $14,040,000 Sewer Revenue Refunding Bonds, Series 2004H (November, 2004) • $28,430,000 General Obligation Refunding Bonds, Series 2005A (March, 2005) • $27,775,000 General Obligation Bonds, Series 20056 (May, 2005) • $10,000,000 General Obligation Bonds, Series 2005C (Urban Renewal) (May, 2005) • $4,985,000 General Obligation Bonds, Taxable Series 2005D (May, 2005) • $28,185,000 General Obligation Refunding Bonds, Series 2005E (October, 2005) • $20,295,000 General Obligation Bonds, Series 2006A (August, 2006) • $9,210,000 General Obligation Bonds, Series 20068 (Urban Renewal) (August, 2006) • $1,170,000 General Obligation Bonds, Taxable Series 2006C (August, 2006) • $16,750,000 Stormwater Management Utility Revenue Bonds, Series 2006D (December, 2006) ~~E C1TY~~ ~~ ~~ES ~A~~? City of West Des Moines Jody Smith, Director of Administrative Services, 515-222-3600 PFM was retained by the City of West Des Moines, Iowa to develop a comprehensive cash flow model, which provided the city with a "big picture" look at its ability to maintain a constant property tax rate of $11.40 per $1,000 of taxable valuation for the next three fiscal years. The comprehensive cash flow model was comprised of the following analyses: 1) Current and Projected Taxable Valuations, 2) Current and Projected Debt Service Levy Rates, 3) Four Urban Renewal Tax Increment Cash Flows and 4) General Fund and Total Tax Rate projections. PFM started this assignment by reviewing the components of the city's 1-1-00 taxable valuation by taxing jurisdiction. By mid April of 2001, PFM was able to obtain the city's 1-1-01 preliminary 100% assessed valuations from the Polk and Dallas County Assessors Offices. In addition, PFM was given some insights as to the preliminary rollback percentages (52% residential and 98% commercial) to be applied to the 1-1- 01 100% assessed valuations. Based on this information, PFM developed an estimate of taxable valuation for FY 03 by May of 2001. In other words, PFM provided the city with an estimate of its taxable valuation for FY 03 approximately seven months before actual figures were "officiall}!' available. A review of the actual taxable valuations showed that PFM's projections were approximately 1.50% higher due to actual rollback percentages being slightly lower than estimated (51.667% residential and 97.77% commercial). Finally, PFM also estimated the city's taxable valuation for FY 04 by reviewing the city's building permit information. City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services 129 ~- ~~~~~ ~~ References Another component of the comprehensive cash flow model was the debt service levy model. The debt service levy model begins by calculating the city's current debt service rate factoring in the existing debt, debt service cash balance and abatements from the urban renewal areas, road use tax, and water and sewer utilities. Using the city's Five Year Capital Improvement Plan (CIP) and the projected taxable valuations, PFM projected the future debt service rates by structuring future bond issues as identified in the city's CIP. In addition to the debt service levy model, PFM developed cash flow analyses for four of the city's six Urban Renewal Districts. Based on the information developed above, PFM estimated the FY 03 & 04 increment valuation to project the future tax increment revenues for each district. Using the city's CIP, PFM developed funding strategies for all of the city's capital projects within each Urban Renewal District. Once it was determined that the city was able to fund all of its capital projects, PFM estimated the amount of tax increment valuation to be returned to the various taxing jurisdictions within each Urban Renewal District. Based upon our projections, the city released approximately $70,000,000 of tax increment valuation in FY 03 and are planning on releasing more in the future. The individual components of our comprehensive cash flow model identified above were the cornerstones to the General Fund and Total Tax Rate analysis. Using the projected tax valuations, projected debt service tax rates, the proposed tax increment valuation release, PFM developed estimates as to the amount of tax resources generated by the various tax levies (regular, transit, liability, retirement and other employee benefits) assuming a total tax rate at $11.40 per $1,000 of taxable valuation. This planning process provided the city with an estimate of available tax resources approximately seven months before the actual tax valuations and provided additional time to develop alternative strategies to balance their general fund budget for the next three years. Another benefit was the development of funding strategies for their capital projects for the next three years. In the last three years, PFM has managed the following transaction for the city: • $3,055,000 General Obligation Refunding Bonds, Series 2005A (February, 2005) • $6,000,000 General Obligation Bonds, Series 2006A (June, 2006) City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services I 2Q ~Fl~~~ .~. ~_ ~_ city of Ankeny a.r~g~~s ~t nil togerhrr References City of Ames Duane Pitcher, Director of Finance, 515-239-5114 The City of Ames has been a longstanding client, engaging Evensen Dodge over 15 years ago. In 2003, this relationship was extended to PFM, and since then PFM has provided debt management, capital planning, and debt issue development. PFM has partnered with the City to develop comprehensive credit review to highlight its superior credit levels to Moody's Investor's Service, and is currently rated Aaa by the agency. In the last three years, PFM has managed the following transactions for the City: • $6,030,000 General Obligation Corporate Purpose Bonds, Series 2004 (October, 2004) • $5,495,000 General Obligation Corporate Purpose and Refunding Bonds, Series 2005A (September, 2005) • $5,285,000 General Obligation Corporate Purpose Bonds, Series 2006A (October, 2006) City of Ankeny Dick Ash, Assistant City Manager, 515-965-6420 Dennis Bockenstedt, Finance Director, 515-965-6409 The City of Ankeny began its financial advisory relationship over twenty years ago with Evensen Dodge, who joined PFM in 2003. PFM has been dedicated to continuing a successful relationship with the city, and has improved upon service with increased technical expertise. PFM is providing extensive analyses of the city's water and sewer funds. This past fall, PFM completed the city's first competitive water revenue issuance in many years. In the last three years, PFM has managed the following transactions for the city: • $5,350,000 General Obligation Bond Anticipation Project Notes, Series 2004 (May, 2004) • $12,880,000 General Obligation Bond Anticipation Project Note, Series 2005A (May, 2005) • $14,790,000 General Obligation Bonds, Series 20056 (May, 2005) • $4,025,000 Water Revenue Bonds, Series 2005C (October, 2005) • $11,625,000 General Obligation Bond Anticipation Project Notes, Series 2006A (May, 2006) • $5,695,000 General Obligation Bonds, Series 20066 (May, 2006) • $3,890,000 Water Revenue Bonds, Series 2006C (December, 2006) City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services ~ 31 ~_ PFM" ®- i References City of Norwalk, Iowa ~; : ORVt~ALK Mark Miller, City Administrator, 515-981-0228 ~ ~'y `~~~" PFM has served as the financial advisor to the City of Norwalk since 2002. In that time, we have assisted the city with the issuance of various debt issuances and extensive financial planning in connection with urban renewal projects, public improvements, and the identification and execution of refundings. In 2004, PFM was instrumental in assisting Norwalk educate its Council on the impact of the W RA reorganization on the city's sewer enterprise. As the only community with partial membership, Norwalk's increased participation on the WRA required a careful analysis of its existing obligations compared to the new obligations under the reorganized entity including the net annual surcharge payment resulting from its increased capacity. As with the cities of Altoona and Clive, PFM has created specialized, highly tailored models for the City of Norwalk to aid capital planning. In addition to monitoring the city's legal debt capacity, PFM maintains cash flows for the city's water and sewer enterprises, the city's various tax increment districts, and the debt service fund. Working collaboratively with the city, its council, and the Warren County Assessor in 2005, PFM expanded the planning and modeling services provided to the city with the introduction of a Comprehensive Financial Analysis. In addition to the analysis already provided, PFM undertook an exhaustive analysis of the general fund, special revenue fund, and road use tax fund. Of these, the general fund analysis proved to provide the most value to the City. An extensive, months-long project, the general fund analysis began with a database of the building permits, as well as each abated parcel in the City of Norwalk. After modeling the abatement program as well as permit activity, PFM was able to help the city better plan for general fund expenditures by projecting additional valuation that would result from new assessed values and the expiration of tax abatements on existing parcels. PFM then applied rollback figures, accounted for parcels within tax increment districts, and provided estimated assessed and taxable values for the general fund, tax increment finance fund, and debt service fund. The Comprehensive Financial Analysis has been updated with estimated assessed valuations, and is currently being used to assist the city in long term budgetary planning. In the last three years, PFM has managed the following transactions for the city: • $900,000 General Obligation Urban Renewal Corporate Purpose Bonds, Series 2004A (February, 2004) • $465,000 General Obligation Corporate Purpose Refunding Bonds, Series 20046 (March, 2004) • $515,000 General Obligation Refunding Notes, Series 2005 (February, 2005) • $2,500,000 General Obligation Urban Renewal Fire Station Bonds, Series 20056 (June, 2005) • $670,000 General Obligation Urban Renewal Fire Station Bonds, Series 2005C (October, 2005) • $700,000 General Obligation Corporate Purpose Bonds, Series 2006A (April, 2006) City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services I 22 Project .Personnel ~~~" _~ ~= Ms. Christine Smith Managing Associate Ms. Susanne Gerlach Senior Associate Proiect Personnel PFM proposes to assign a team of PFM professionals led by Ms. Tionna Pooler to continue working with the City on its bond issues and to provide other consulting activities as needed. Tionna Pooler, a Senior Managing Consultant in PFM's Des Moines office, will serve as engagement manager and provide management support. Ms. Pooler will manage all day-to-day activities related to any bond transactions or consulting services, will conduct and/or supervise numerical, analytical, and technical support for all bond transactions and related consulting services. Other members of PFM's team include Mr. David Reeser, Director of Arbitrage Compliance, (in the event arbitrage services are needed), Mr. Mike Maloney, Consultant who will provide quantitative support, Ms. Christine Smith, Managing Associate and Ms. Susanne Gerlach, Senior Associate who will provide technical and research support. Staff time is anticipated to allocated as describe below; resumes for the proposed team follow the staff allocations. Staff Member Title Estimated Attributable Time Senior Managing 55% Tionna Pooler Consultant Mike Maloney Consultant 20% Managing 15% Christine Smith Associate Susanne Gerlach Senior Associate 10% Time will be allocated as Director of needed if investment or David Reeser Arbitrage arbitrage services are Compliance requested. Tionna Pooler, Senior Managing Consultant Ms. Tionna Pooler began at Public Financial Management in July of 2000 as a member of the Quantitative Strategies Group, a team of consultants based at the corporate headquarters specializing in the maintenance and creation of complex analytical models. Ms. Pooler has over six years of public finance experience, and since she joined PFM, Ms. Pooler has contributed to the analytical support of several northeastern clients, including the budget analysis of Nassau County and the development of a defeasance model for the Philadelphia Parking Authority. In addition to general municipal financings for Montgomery County, Maryland, and the State of Connecticut, Ms. Pooler has also provided refinancing and proceeds allocation analyses for the Power Authority of the State of New York, and for the Waste System Authority of Eastern Montgomery County Pennsylvania's $127 million dollar waste-to-energy facility refunding. Since becoming a member of Des Moines staff in December 2002, Ms. Pooler's projects have included financial and analytical analysis for the State of Kansas Department Transportation ("KDOT"), support for the development of a financing plan for the St. Louis Metropolitan Sewer District, financial analysis for the Bremer County/City of Waverly joint Law Enforcement Center project, as well as the financial, credit, and feasibility analysis of the City of Dubuque, Iowa -Proposal to Provide Fnanciai Advisory Services ~ 34 Support Services: ~- ~~~ C ~.,~.,- Proiect Personnel reorganization of a regional wastewater utility. Ms. Pooler has assisted and/or directed the issuance of over $1 billion in municipal debt. Currently, Ms. Pooler provides general municipal financial advisory services to several jurisdictions in Iowa, including the highly rated City of Dubuque. Ms. Pooler's other Iowa clients include: the City of Ames, the City of Ankeny, the City of Iowa Falls, the City of Marion, the City of North Liberty, the City of Norwalk, the City of Windsor Heights, Polk County, Iowa, and the Des Moines Metropolitan Wastewater Reclamation Authority, for which Ms. Pooler provides management and analytical services. Ms. Pooler earned a Bachelor of Arts degree in Psychology from Yale University in 2000, and is currently pursuing a Master of Public Administration from Drake University. Mike Maloney, Consultant Michael Maloney joined PFM in 2006 and is currently staffed in the Des Moines office. Michael works primarily providing technical and quantitative support for various clients. His present duties include structuring, sizing, and pricing new money and refunding municipal bond issues, assessing municipal City's outstanding debt and performing analysis of refunding opportunities. Mr. Maloney graduated from Grinnell College with a Bachelor of Arts in General Science with a Mathematics concentration; he has less than one year of public finance experience. Christine Smith, Managing Associate Ms. Smith joined PFM in 1993 as a Senior Associate and became a Managing Associate with the firm in 2002. Ms. Smith has worked on thousands of bond financings providing analytical, technical and general project support. Her responsibilities include overseeing production of disclosure documents including official statements and transcripts, coordinating bond closings, and maintaining all relevant documentation on client projects. Ms. Smith has worked on all types of bond transactions including general obligation, revenue, local option sales tax, utility and education. Additionally, Ms. Smith handles all office administration for the Des Moines office of PFM. Prior to joining PFM, Ms. Smith worked for a Midwest regional financial advisory firm. While there, she supported several financial project teams, including work on economic development projects, refundings and the development of a state school pooled financing program. Ms. Smith has over nineteen years of public finance experience, and earned her B.A. in English and Communications from Augsburg College in Minneapolis. City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services 135 f.'~'" ~... r...~ ~~ ~_ ~_ Proiect Personnel Susanne Gerlach, Senior Associate Ms. Susanne Gerlach joined PFM in August of 2006 and holds the role of Senior Associate in the Des Moines, Iowa office. Ms. Gerlach is responsible for the creating, printing, publishing and distribution of Official Statements. In addition, Ms. Gerlach provides overall administrative support to the Des Moines, Iowa office. Ms. Gerlach has less than one year of experience in public finance. Prior to joining PFM in 2006, Ms. Gerlach worked as an administrative specialist in sales and marketing for DuPont de Nemours and Pioneer Hi- Bred, International, Inc. for over nine years. Ms. Gerlach is pursing a Bachelor of Arts degree in Marketing from Simpson College. She will graduate in May of 2006. David Reeser, Director of Arbitrage Compliance Mr. Reeser joined PFM in 1996, and has over 10 years of public finance experience. He directs and manages PFM's Arbitrage Rebate Compliance Practice. As the Director of PFM's Arbitrage Compliance Practice, Mr. Reeser oversees the arbitrage rebate services provided to several hundred tax- exempt Citys. Mr. Reeser also works closely with .City bond counsels to provide analytical and technical services on a myriad of complex arbitrage compliance issues, including transferred proceeds, expenditure allocations, compliance with the universal cap, investment valuation, yield restriction, exception compliance, interest rate swap integration, and arbitrage yield computations. Mr. Reeser has developed models, approaches, and methodologies to assist Citys in complying with the arbitrage rebate requirement. The analytical approaches he developed have enabled Citys to fully comply with the arbitrage requirements, while saving hundreds of thousands of dollars in the form of reduced rebate liabilities. Mr. Reeser also advises Citys on the investment of tax-exempt bond proceeds, particularly in circumstances requiring the analysis of complex arbitrage issues. Mr. Reeser is a graduate of Swarthmore College where he earned a Bachelor of Arts degree in Economics. He has also earned a Masters Degree in Business Administration from Penn State University. He holds Series 6 and Series 63 licenses from the National Association of Securities Dealers (NASD). City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services ~ 36 ~+ /~ V/ ^~ l J ,~ , ~ u..; C 7 f 1 9~ ~,~.'~P ~c ~r~ tY1. s ~: ,. ~ ~ ~:: ~~ ~~ S i i~; ~~ a ~{, 1~~ Hivnn-~ 9 .w,* 9~ ~.~ ~- ~~ ,, ~ ~ ~ ~ ~, ,~ ~}~. 4 # : S-_ t 9~` ,d ~k .~.. ~~ ~_ ~_ Insurance Insurance Public Financial Management, Inc. has a comprehensive insurance program, including property, casualty, comprehensive general liability, automobile liability and workers compensation. PFM maintains professional liability and fidelity bond coverages which total $15 million and $10 million respectively. Evidence of insurance certificates are available upon request. City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services' J~ cg Fees ~- ,~ ~~~~' ~o ?_ Fees Since the acquisition of Evensen Dodge in 2003, PFM has honored the existing contract with the City of Dubuque. PFM has offered a higher level of service than was previously available, and proposes to expand the services available to the City. To provide compensation for the increased technical ability and resources, PFM proposes the following revised schedule of compensation as follows: Hourly Fees Hourly fees for consulting services, including secretarial support and all overhead costs are as follows: Managing Director $190 Senior Managing Consultant $170 Consultant $140 Work Tasks PFM will not charge separate hourly fees for planning services directly related to debt issues; compensation for planning services will be included in the debt issuance fees as outlined in the table below. Such planning services would include cashflow modeling and forecasting for enterprise funds, any models developed to analyze and forecast general obligation debt or TIF debt capacity or models used to forecast property tax impact from general obligation debt issues. PFM would propose to charge separately for services provided for operations and investment consulting, such as Strategic Municipal Consulting and Investment Management services. Fees for such services would initially be based on the above stated hourly rates and would be negotiated based on a specific scope of services, work tasks and deliverables. PFM proposes flat fees for the issuance of General Obligation, Tax Increment, Revenue and Refunding Bonds as follows: • • Under $10.0 Million ••~ •. $13,000 $10.1 to $20.0 Million $18,000 $20.1 to $30.0 Million $25,000 $30.1 to $40.0 Million $30,000 Over $40.0 Million To be negotiated Tax Increment Same as GO Bonds G.O. refundin Same as GO bonds lus escrow fees Revenue Bonds 125% of the GO Bond Fee Multiple Issues Sold Concurrently Smallest issue billed at 85%of base fee The fees quoted above will be valid for the term of the financial advisory agreement with the City and any renewals thereof. City of Dubuque, Iowa -Proposal to Provide Financial Advisory Services 140 .~~~g ~.. ~- ~_ Fees PFM prides itself with providing our city clients with the highest level of client service. PFM's level of client service is unmatched by any of our competitors. These additional services include the development, monitoring and maintenance of several detailed and highly customized cash flow spreadsheet models. PFM attempts to work collaboratively with City staff to provide them with our resources to assist them with articulating the effects of the city's proposed budget and capital plan. This approach recognizes that City staff has many additional responsibilities and our available resources allows them to leverage their intimidate knowledge of the City to review the analyses developed by PFM as opposed to developing the analyses themselves. PFM is also keenly aware that cities don't have unlimited resources to constantly pay for the high hourly fees associated with a consultant's assistance. Thus, PFM has attempted to balance this additional client . service relative to offering competitive financial advisory fees. Based on comparisons with our competitors as they relate to financial advisory fees, our financial advisory fees are more than likely on the higher end of the range. However, based on discussions with our clients, they strongly feel that the resources provided and the level of client service offered far exceeds the perceived higher financial advisory fees. PFM is committed to providing the City with the highest level of client services available which will far exceed the level of services provided by our competitors. Arbitrage Rebate and Compliance Services (at option of the City) Fees for arbitrage rebate and compliance services are as follows: Initial Engagement (Charged once per transaction) $500 Report fee (per report) $2,000 Final Report (five year) $2,500 Out-of-pocket expense $50 Additional fees may apply for transferred proceeds analysis, and analysis of commingled funds. Investment Management Services (at option of the City) Fees for investment management services depend on the type of service provided and will be quoted on a project by project basis. Out-of-Pocket Expenses PFM expects to be reimbursed for documented costs associated with official statement production and distribution, and travel. In addition, PFM expects the City to pay any credit agency fees related to obtaining credit ratings. Term of Agreement Our goal is to work with the City. We welcome any discussion on the term of any agreement in order to meet the needs of the City. As indicated in the Request for Proposal, PFM agrees that the current term of this agreement would be for a five year period, following the date of execution, with an automatic renewal clause available upon completion; the initial agreed upon fees would apply during the renewal period. City of Dubuque, Iowa _ Proposal to Provide Financial Advisory Services ~ 41 Legal Violations and Conflicts of Interest ~~" Leal Violations and Conflicts of Interest In March 2006 Public Financial Management, Inc. received a subpoena in connection with a routine examination for certain documents from the staff of the SEC issued pursuant to confidential investigative order of the Commission. The SEC has assured us in writing that this proceeding `should not be construed as an expression of opinion on the part of the Commission or its staff that any violation of law has occurred, nor should it reflect adversely on the character or reliability of any person or entity." Investigation Disclosure Conflict of Interest None of PFM's clients present a conflict of interest with the City of Dubuque's proposed engagement. No member of PFM's ownership, management or staff is a party to any agreements or holds any property interest that would present a conflict with the City of Dubuque's projects, or will any member participate in activities that produce or direct or indirect financial gain, other than the agreed upon compensation, without the City's prior consent. City of Dubuque, Iowa -Proposal to Provide Fnancial Advisory Services ~ 43 Appendix City of Dubuque Debt Allocation Addendum Summary Refunding of Series 2000B and Series 2000C Payment at 12/01/06 06/01/07 12/01/07 06/01/08 12/0]/08 06/01/09 12/01/09 06/Ol/]C 12/Ol/1C 06/01/1] 12/07/11 06/Ol/]~ 12/01 / L' OG/Ol/1' 12/01/1? O6/O1/1-" 12/01/1< 06/01/]` 12/01/1! OG/01/1c 12/01/1( O6/Ol/1; 12/01/1' OG/O1/li 12/Ol/]! OG/Ol/1! 12/01/]! 06/01/21 Series 2006C Refundin of Series 2000B & 2000C Original Debt (2000BC) Refunded Debt Unrefunded Balance (2000BC) Refunding Debt (2006C) Total Obligation (2000BC +2006C) Savings (Total -Original) lit Interest Tota1 I~r Interest Total 'lam[ Interest Total ~'2L Interest Total L'~t Interest Total 'Lat Interest Total 0 197,544 197,544 0 92,548 92,548 0 104,996 ]04,996 0 80,754 80,754 0 185,750 185,750 0 11,794 11,794 370,000 197,544 567,544 0 92,548 92,548 370,000 104,996 474,996 0 69,549 69,549 370,000 174,545 544,545 0 22,999 22,999 0 187,675 187,675 0 92,548 92,548 0 95,127 95,]27 0 69,549 69,549 0 164,676 764,676 0 22,999 ?2,999 395,000 187,675 582,675 0 92,548 92,548 395,000 95,127 490,127 0 69,549 69,549 395,000 164,676 559,676 0 22,999 22,999 0 177,148 ]77,148 0 92,548 92,548 0 84,600 84,600 0 69,549 69,549 0 154,149 154,149 0 22,999 22,999 410,000 177,148 587,148 0 92,548 92,548 410,000 84,600 494,600 0 69,549 69,549 410,000 ]54,]49 564,149 0 22,999 22,999 0 166,220 166,220 0 92,548 92,548 0 73,672 73,672 0 69,549 69,549 0 143,221 143,221 0 22,999 22,999 425,OW 166,220 591,220 130,OW 92,548 222,548 295,000 73,672 368,672 165,000 69,549 234,549 460,000 143,221 603,221 (35,000) 22,999 (L' (1011 0 154,891 154,891 0 88,778 88,778 0 66,1]3 66,113 0 GG,538 66,538 0 132,650 132,650 0 22,241 22,241 455,000 154,891 609,891 140,000 88,778 228,778 315,000 66,113 381,113 170,000 GG,538 236,538 485,000 132,650 617,650 (30,000); 22,241 (7,759; 0 142,759 142,759 0 84,718 84,718 0 58,041 58,04] 0 63,393 63,393 0 121,433 121,433 0 2],326 21,326 475,000 142,759 617,759 145,000 84,718 229,718 330,000 58,041 388,041 175,000 63,393 238,393 505,000 121,433 626,433 (30,000) 21,326 ffi,G74 0 130,098 130,098 0 80,513 80,513 0 49,584 49,584 0 60,111 60,111 0 109,696 109,696 0 20,-102 20,402 500,000 130,098 630,098 155,000 80,513 235,513 345,000 49,584 394,584 185,000 60,111 245,111 530,000 109,696 639,696 (30,0001 20,402 (9,598'; 0 116,762 116,762 0 76,018 76,018 0 40,744 40,744 0 56,643 56,643 0 97,386 97,386 0 19,376 19,376 525,000 116,762 641,762 160,000 76,018 236,018 365,01)0 40,744 405,744 185,000 56,643 241,643 550,000 97,386 647,386 (35,0(N`I) 19,376 (5,634; 0 102,769 102,769 0 71,378 71,378 0 31,391 31,391 0 53,128 53,128 0 84,518 84,518 0 18,251 18,251 555,000 102,769 657,769 170,000 71,378 241,378 385,000 31,391 416,391 ]95,000 53,128 248,128 580,000 84,5]8 664,518 (251)001 18,251 rG,749'; 0 87,973 87,973 0 66,448 66,448 0 21,525 21,525 0 49,374 49,374 0 70,899 70,899 0 ]7,074 17,074 590,000 87,973 677,973 180,000 66,448 246,448 410,000 21,525 431,525 200,000 49,374 249,374 610,000 70,899 680,899 (211,0001 17,074 (3,936', 0 72,247 72,247 0 6],2?8 61,228 0 11,019 11,019 0 45,474 45,47# 0 SG,493 56,493 0 15,754 15,754 620,000 72,247 692,247 190,000 61,228 251,228 430,000 11,019 441,019 2]0,000 45,474 255,474 640,000 56,493 696,493 (200001 15,754 !4,246• 0 55,718 55,718 0 55,718 55,718 0 0 0 0 41,326 41,326 0 41,326 41,326 0 14,392 14,392 655,000 55,718 710,718 655,000 55,718 710,718 0 0 0 650,000 -11,326 691,326 650,000 41,326 691,326 5,000 14,392 19,392 0 38,259 38,259 0 38,259 38,259 0 0 0 0 28,326 28,326 0 28,326 28,326 0 9,933 9,933 685,000 38,259 723,259 685,000 38,259 723,259 0 0 0 675,000 28,326 703,326 675,000 28,326 703,326 10,000 9,933 19,933 0 19,997 19,997 0 19,997 19,997 0 0 0 0 14,658 14,658 0 14,658 14,658 0 5,339 5,339 735,000 19,997 754,997 735,000 19,997 754,997 0 0 0 715,000 14,658 729,658 715,000 14,658 729,658 20,000 5,339 25,339 ,___, .,. , .,. > , -„ , , -, , , , , .. > -+ -~ - ,>w ~,,_~,~» ~,vw,»> i,J n,iwv s,iii,tJ-t lu,3 ii,IJi ~IaU,000i JUU,`l64 3''0,964 Prepared G0~ PuGlic Finanlzal Management Page 1 oj4 Date: 1 ?/ 18/?006; Tinee: 3:-19 PAI City of Dubuque Debt Allocation Addendum Summary Refunding of Series 2000B and Series 2000C Payment 12x1€ 12/01/Ob 06/01/07 12/01/07 OG/07/OE 12/Ol/OF 06/01/05 12/01/05 06/Ol/1C t2/0]/iC O6/Ol/I1 12/0]/17 O6/01/1~ 12/Oi/1~ OG/Ol/1? 12/01/1? 06/01/14 12/01/14 06/01/]° 12/01/1_° O6/Ol/lf 12/01/1( O6/Ol/li 12/01/1. O6/O1/lf 12/01/lf 06/01/15 t2/Ol/1S 06/01/2( Series 2006C Refundi n of Series 2000B Original Debt (2000B) Refunded Debt 2000B Unrefunded Balance Refunding Debt (2006C) Total Obligation (2000B +2006C) Savings (Total -Original) L';at Interest Total L'~t Interest Total Pat interest Total Pis ce Total 1.'a[ interest Total 1'as Int€tr=&4 ota 0 65,769 65,769 0 55,329 55,329 0 10,440 10,440 45,472 45,472 0 55,9]2 55,912 0 9,857 9,857 115,000 65,769 180,769 0 55,329 55,329 115,000 10,440 125,440 39,163 39,163 115,000 49,603 164,603 0 16,167 16,167 0 62,434 62,434 0 55,329 55,329 0 7,105 7,105 39,163 39,163 0 46,268 46,268 0 ]6,167 ]6,167 120,000 62,434 182,434 0 55,329 55,329 120,000 7,105 727,105 39,163 39,163 120,000 46,268 166,268 0 16,167 16,167 0 58,954 58,954 0 55,329 55,329 0 3,625 3,625 39,163 39,163 0 42,788 42,788 0 16,167 16,167 125,000 58,954 183,954 0 55,329 55,329 125,000 3,625 128,625 39,163 39,163 125,000 42,788 167,788 0 16,167 16,167 0 55,329 55,329 0 55,329 55,329 0 0 0 39,]63 39,163 0 39,163 39,163 0 ]6,167 16,167 130,000 55,329 185,329 ]30,000 55,329 185,329 0 0 0 165,000 39,163 204,163 165,000 39,163 204,163 (35,000} 16,767 { 18,3331 0 51,559 51,559 0 51,559 51,559 0 0 0 0 36,151 36,]51 0 36,151 36,151 0 15,408 15,403 140,000 51,559 191,559 140,000 51,559 191,559 0 0 0 170,000 36,151 206,]51 ]70,000 36,151 206,151 (30,000) 15,408 (14,592` 0 47,499 47,499 0 47,499 47,499 0 0 0 0 33,006 33,006 0 33,006 33,006 0 14,493 14,493 145,000 47,499 192,499 145,000 47,499 192,499 0 0 0 175,000 33,006 208,006 175,000 33,006 208,006 (30,(x)0) 14,493 (15j07:• 0 43,294 43,294 0 43,294 43,294 0 0 0 0 29,725 29,725 0 29,725 29,725 0 13,569 13,569 155,000 43,294 198,294 155,000 '43,294 198,294 0 0 0 185,000 29,725 214,725 185,000 ?9,75 2]4,725 (3(1,000) ]3,569 (16,4311 0 38,799 38,799 0 38,799 38,799 0 0 0 0 26,256 26,256 0 26,256 26,256 0 72,543 12,543 ]60,000 38,799 198,799 1GQC100 38,799 ]98,799 0 0 0 185,000 26,256 211,256 185,000 26,256 211,256 (25,000) 12,543 (13,x57'. 0 34,]59 34,159 0 34,159 34,159 0 0 0 0 22,741 22,741 0 22,741 22,741 0 11,-118 11,418 170,000 34,]59 204,159 170,000 34,159 204,159 0 0 0 195,000 22,741 217,741 195,000 22,741 217,741 (35,(H101 11,418 .13,582'• 0 29,229 29,229 0 29,229 29,229 0 0 0 0 18,988 18,988 0 18,988 18,988 0 1Q,242 10,242 180,000 29,229 209,229 780,000 29,229 209,229 0 0 0 200,000 18,988 218,988 200,000 18,988 218,988 (20,0(10} ]0,242 (9,753; 0 24,009 24,009 0 24,009 24,009 0 0 0 0 15,088 15,088 0 15,088 ]5,088 0 8,922 8 922 790,000 24,009 214,009 190,000 24,009 214,009 0 0 0 210,000 li,088 225,088 21Q,000 15,088 225,088 (30,1kN)} 8,922 i l 1,178; 0 18,499 18,499 0 18,499 18,499 0 0 0 0 10,940 1Q,940 0 10,940 10,940 0 7,559 7,559 200,000 18,499 218,499 200,000 18,499 218,499 0 0 0 170,000 10,940 180,940 170,000 10,940 180,910 3QC100 7,559 37,559 0 12,699 12,699 0 12,699 12,699 0 0 0 0 7,540 7,540 0 7,540 7,540 0 5,159 5,159 210,000 12,699 222,699 21(1000 12,699 222,699 0 0 0 180,000 7,540 187,540 18Q000 7,540 187,540 3Q000 5,159 35,159 0 6,609 G,G09 0 6,609 6,609 0 0 0 0 3,895 3,895 0 3,895 3,895 0 2,77# 2 714 225,000 7 71,5 M!1 6,609 ~ !10'7 ioa 231,609 a aio ina 225,000 , nnc nun 6,609 231,609 0 0 0 190,000 3,895 193,895 190,000 3,895 193,895 35,000 2,714 , 37,71} -~ -> --~--- - _, ~ ,~ , ~ ~~ , _, ~~o,~~~ :.,i~~,~iv t,~a~,uuu iiV,U1u s,t»,mu (I?u,0u01 327,083 207,083 Prepared by Public Finanaal A-Ianagement Page 2 of 4 Date.• 12/ 18/ 2006; Time: 3:-19 PAI City of Dubuque Debt Allocation Addendum Summary Refunding of Series 2000B and Series 2000C Payment ~~ 12/01/06 06/01/07 12/01/Oi O6/01/OF 12/01/OE 06/Ol/OS 12/01/05 OG/01/1( 12/01/1( 06/01/1] 12/01/11 OG/01/1' 12/01/1' OG/01/1_' 12/01/1' OG/Ol/t- 12/Ol/1~ O6/Ol/1` 12/01/1° O6/Ot/1c 12/01/11 06/01/1. 12/01/1' O6/Ot/1F 12/01/1f 06/01/1! 12/01/1'. OG/O1 /2( Series 2006C Refundin of Series 2000C Parking Portion Original Debt (2000C Parking) Refunded Debt 2000C Unrefunded Balance Refunding Debt (2006C) Total Obligation (2000C +2006C) Savings (Total -Original) L';1[ IIISerest T°tal L'~[ Interest ~~( 'I.~[ Interest Total L'2[ Interest Total ~''~[ Interest Total La[ es ~c S.al 0 117,775 117,775 0 33,213 33,213 0 84,563 84,563 0 31,402 31,402 0 115,965 115,965 0 1,810 1,810 230,000 117,775 347,775 0 33,213 33,213 230,000 84,563 314,563 0 27,045 27,045 230,000 11],608 341,608 0 6,168 6,168 0 111,881 111,881 0 33,213 33,2]3 0 78,669 78,669 0 27,045 27,045 0 105,714 ]05,714 0 6,168 6,168 245,000 11],881 356,881 0 33,273 33,213 245,000 78,669 323,669 0 27,045 27,045 245,000 105,714 350,714 0 6,168 G,I68 0 105,603 105,603 0 33,213 33,213 0 72,391 72,391 0 27,045 27,045 0 99,436 99,436 0 6,168 6,168 255,000 105,603 360,603 0 33,213 33,2]3 255,000 72,391 327,39] 0 27,045 27,045 255,000 99,436 354,436 0 6,168 6,168 0 99,069 99,069 0 33,213 33,213 0 65,856 65,856 0 27,045 27,045 0 92,901 92,901 0 6,168 6,168 265,000 99,069 364,069 0 33,2]3 33,213 265,000 G5,85G 330,856 0 27,045 27,045 265,000 92,901 357,901 0 6,168 6,168 0 92,278 92,278 0 33,213 33,213 0 59,066 59,066 0 27,045 27,045 0 86,111 SG,tll 0 6,168 6,168 280,000 92,278 372,278 0 33,213 33,213 280,000 59,066 339,066 0 27,045 27,035 280,000 SG,111 366,111 0 6,168 6,168 0 85,103 85,103 0 33,213 33,213 0 51,891 51,891 0 27,045 27,045 0 78,936 78,936 0 6,168 6,]68 295,000 85,103 380,103 0 33,2]3 33,213 295,000 51,891 346,891 0 27,045 27,045 295,000 78,936 373,936 0 6,168 6,168 0 77,544 77,544 0 33,213 33,213 0 44,331 44,331 0 27,045 27,045 0 71,376 71,376 0 6,168 6,168 310,000 77,544 387,544 0 33,2]3 33,2]3 310,0(10 44,331 354,331 0 27,045 27,045 310,000 71,376 381,376 0 6,168 6,168 0 69,600 69,600 0 33,213 33,213 0 36,388 36,388 0 27,045 27,045 0 63,433 63,433 0 6,168 6,168 325,000 69,600 394,600 0 33,213 33,213 325,000 36,388 361,388 0 27,045 27,045 325,000 63,-133 388,433 0 6,168 6,168 0 6],272 61,272 0 33,213 33,213 0 28,059 28,059 0 27,045 27,045 0 55,104 55,104 0 6,168 6,168 345,000 61,272 406,272 0 33,213 33,213 345,000 28,059 373,059 0 27,045 27,045 345,000 55,104 400,104 0 6,168 6,]68 0 52,431 52,431 0 33,213 33,213 0 19,219 19,219 0 27,045 27,045 0 46,264 46,264 0 6,168 6,168 365,000 52,431 417,431 0 33,213 33,213 365,000 19,219 384,219 0 27,045 27,045 365,000 46,264 411,264 0 6,168 6,168 0 43,078 43,078 0 33,213 33,213 0 9,866 9,866 0 27,045 27,045 0 36,911 36,911 0 6,168 6,168 385,000 43,078 428,078 0 33,2]3 33,213 365,000 9,866 394,866 0 27,045 27,045 385,000 36,911 421,911 0 6,168 6,168 0 33,213 33,213 0 33,213 33,213 0 0 0 0 27,045 27,045 0 27,045 27,045 0 6,168 6,168 405,000 33,213 438,213 405,000 33,213 438,213 0 0 0 425,000 27,045 452,045 425,000 27,045 452,045 ;2Q000) 6,168 ~ 13,8331 0 22,834 22,834 0 22,834 22,834 0 0 0 0 18,545 18,545 0 18,545 18,545 0 4,289 4,389 425,000 22,834 447,834 425,000 22,834 447,834 0 0 0 440,000 18,545 458,545 440,000 18,545 458,545 (1;,(xx)) 4,289 ! 10,71 Ij 0 11,944 11,944 0 11,944 11,944 0 0 0 0 9,635 9,635 0 9,635 9,635 0 2,309 2,309 455,000 a roc nnn 11,944 466,944 455,000 11,944 466,944 0 0 0 470,000 9,635 479,635 470,000 9,635 479,635 j15,000) 2,309 (12.691? •---•--- -> - ~--- -~- ->- .- > , ~ , ~ > ~ , , ~ , , _y i,»o,wv /V'l,/%/ _,v-w,L// a,o»,uu~ t,tstu,wt o,+4JsY1 (,U,lK0.p 156,859 106,859 Prej~arerl Ly PuGlic Finan~ra/ ~1lanagement Page 3 oj4 Date: 1?/ 18/?006; Time: 3:4% RlI City of Dubuque Debt Allocation Addendum Summary Refunding of Series 20008 and Series 2000( Payment P~1€ 12/01/06 06/01/07 12/01/07 06/01/08 12/01/08 06/01/09 12/01/09 O6/Ol/10 12/01/10 06/01/17 12/01/17 06/01/12 12/01/12 06/01/13 ]2/01/13 06/01/14 12/01/14 l1G/01 /15 12/01/15 O6/01/IE 12/01/]( O6/Ol/li 12/O1/li O6/Ot/lf 12/Ol/lf 06/01/15 12/01/15 06/01/2( Series 2006( Refundin of Series 2000( Airport Portion Original Debt (2000( Airport) Refunded Debt 2000( Unrefunded Balance Refunding Debt (2006() Total Obligation (2000( +2006() Savings (Total -Original) 1;;L Interest T°tal I'~t Interest Total Pit Interest Total I';]r I nterest Total 1';tt Interest Total Pet I nterest TO[aI 0 14,000 14,000 0 4,006 4,006 0 9,994 9,994 0 3,880 3,880 0 13,873 13,873 0 127 127 25,000 14,000 39,000 0 4,006 4,006 25,000 9,99# 34,994 0 3,341 3,341 25,000 13,335 38,335 0 665 665 0 13,359 13,359 0 4,006 4,006 0 9,353 9,353 0 3,34] 3,341 0 12,694 12,694 0 GGS 665 30,000 13,359 43,359 0 4,006 4,006 30,000 9,353 39,353 0 3,347 3,34] 30,000 12,694 42,694 0 665 665 0 12,591 12,591 0 4,006 4,006 0 8,584 8,584 0 3,341 3,341 0 11,926 71,926 0 GGS 665 30,000 12,591 42,591 0 4,006 4,006 3Q000 8,584 38,584 0 3,341 3,341 3Q,000 11,926 41,926 0 665 665 0 11,822 11,822 0 4,006 4,006 0 7,816 7,8]6 0 3,341 3,341 0 11,]57 11,157 0 GGS 665 30,000 11,822 41,822 0 4,WG 4,006 30,000 7,816 37,816 0 3,341 3,341 30,000 11,157 41,157 0 665 GGS 0 11,053 11,053 0 4,006 4,006 0 7,047 7,047 0 3,341 3,341 0 10,388 10,388 0 GGS 665 35,000 11,053 46,053 0 4,006 4,006 35,000 7,047 42,047 0 3,341 3,341 35,000 10,388 45,388 0 665 665 0 10,156 10,156 0 4,006 4,006 0 6,150 6,150 0 3,34] 3,341 0 9,49] 9,491 0 665 665 35,000 10,156 45,]56 0 4,006 4,006 35,000 6,150 41,150 0 3,341 3,341 35,000 9,49] 44,491 0 GGS 665 0 9,259 9,259 0 4,006 4,006 0 5,253 5,253 0 3,341 3,341 0 8,594 8,594 0 665 665 35,000 9,259 44,259 0 4,006 4,006 35,000 5,253 40,253 0 3,341 3,341 35,000 8,594 43,594 0 GGS GGS 0 8,363 8,363 0 4,006 4,006 0 4,356 4,356 0 3,341 3,341 0 7,698 7,698 0 665 665 40,000 8,363 48,363 0 4,006 4,006 40,000 4,356 44,356 0 3,341 3,341 40,000 7,698 47,698 0 665 665 0 7,338 7,338 0 4,006 4,006 0 3,331 3,331 0 3,341 3,341 0 6,673 6,673 0 665 665 40,000 7,338 47,338 0 4,006 4,006 40,000 3,331 43,331 0 3,341 3,341 40,000 6,673 #6,673 0 GGS 665 0 6,313 6,313 0 4,006 4,006 0 2,306 2,306 0 3,341 3,341 0 5,648 5,648 0 GGS 665 45,000 6,313 51,313 0 4,006 4,006 45,000 2,306 47,306 0 3,341 3,341 45,000 5,648 50,648 0 665 GGS 0 5,159 5,159 0 4,006 4,006 0 1,153 ],153 0 3,341 3,341 0 4,494 4,494 0 GGS GG5 45,000 5,]59 50,159 0 4,006 4,006 45,000 1,153 46,153 0 3,341 3,341 45,000 4,494 49,494 0 665 665 0 4,006 4,006 0 4,006 4,006 0 0 0 0 3,341 3,341 0 3,341 3,341 0 665 665 50,000 4,006 54,006 50,000 4,006 54,006 0 0 0 55,000 3,341 58,341 55,000 3,34] 58,34] (1,000) 665 !4,335, 0 2,725 2,725 0 2,725 2,725 U 0 0 0 2,241 2,241 0 2,241 2,241 0 48-4 484 50,000 2,725 52,725 50,000 2,725 52,725 0 0 0 55,000 2,241 57,241 55,000 2,241 57,241 (5,(100) 484 ~~,5161 0 1,444 1,444 0 1,444 1,444 0 0 0 0 1,128 1,128 0 1,128 ],128 0 316 316 55,00(1 cna nnn 1,444 nnc .ar 56,444 ,o 55,000 1,444 56,444 0 0 0 55,000 1,]28 56,128 55,000 1,128 56,128 0 316 316 -- ---•--- -- , -- - , .. ~• , •. , .. .. , .. . , .. , u ., s,yuu ~~~,vw G10,17J //J,1J.~ (IlI,l41V) 1/,UYY /,lf-'= Prepared b~~ Pu~lu Finan~za! Afanagement Page 4 oj4 Date: 12/ 18/2006; Tinee: 3:-19 Pht v City of Dubuque, Iowa Financial Advisory Interview Submitted January 5, 2007 The PFM Group 2600 Grand Avenue Suite 214 Des Moines, IA 50312 515-243-2600 515-243-6994 fax www.pfm.com ~~e. t_ .~. _ Table of Contents Transmittal Letter TAB Responses I Insurance Documentation II Sample Work Products III ~ ~~~ o PFM ._= The PFM Group P!!blic rinenciat P~+anagen:ent Anc. PFPri Assei Management. !_LC PFM Ad•/isors Ken TeKippe Finance Director Ciry of Dubuque 50 West 13`~ Street Dubuque, Iowa 52001-4864 Dear Ken: 2600 Grand Avenue 515-243-2600 Suite 214 515-243-6994 fax Des Moines, IA 50312 www.pfm.com January 5, 2007 The PFM Group ("PFM', comprising Public Financial Management, Inc. and PFM Asset Management LLC, is pleased to have been selected for a financial advisory services interview. We look forward to meeting with you on Monday, and have enclosed the requested responses. The City of Dubuque is a valued client, and we sincerely hope for the opportunity to continue to provide a high level of service, innovation and commitment which will exceed the expectations of the City. Please do not hesitate to contact me with any questions or concerns. Sincerely, Public Financial Management ~r ~ ~~ f ~ ~ /~ I v V , Tionna Reed Pooler Senior Managing Consultant ~~.. !_ Responses PFM° ~- ~_ Responses { ~=~ -~.-- ~ ~ As with the City's recent issues, official statements will be primarily prepared by Susanne Gerlach, Senior Associate, and Christine Smith, Managing Associate; either of whom may contact the City to obtain required information not otherwise available. Tionna Pooler, Senior Managing Consultant, will serve as the engagement manager for all transactions, will oversee the production of the official statement, and will be responsible for all review. PFM will not charge the City for preliminary advice or direction for potential projects. Typically, PFM's financial advisory fees are contingent upon the sale of a bond issue. If a bond issue is delayed, PFM will invoice its regularly scheduled financial advisory fees at the time of sale. The act of delaying an issuance may cause PFM to incur additional expenses on the City's behalf (additional printing costs, additional mileage, etc). These expenses will be documented and included in the invoice for financial advisory fees. In most cases, the cancellation of a bond issue will nullify any financial advisory fees that would have been incurred; exceptions to this rule would require special circumstances, and any payment would be at the discretion of the City. While the financial advisory fee is typically waived, PFM will seek to recover actual expenses incurred in the preparation of a cancelled bond issue. City of Dubuque, Iowa - Finandal Advisory Interview Responses I 1 ~M" ~~ s ~_ Responses Estimated Fee Schedule for $5 Million General Obligation Bonds Service ~ Estimated Costs Financial Advisory Fees $13,000 Official Statement Printing 1,000 i-Deal Electronic Posting 300 Mileage (Assumes 1 round trip) 199 Meals Assumes 1 round tri 30 . . As noted above, i-Deal charges a fee for posting the City's official statement to PFM's bond sale calendar on the i-Deal website. The costs of electronic bidding (both submitting a bid and providing a good faith deposit via Sure Bid) are borne by the bidder rather than the City. Following the acquisition of Evensen Dodge, PFM honored the fee schedule provided for by the existing contract. The fees outlined in PFM's proposal, and the example provided above, are different than the fees previously charged. PFM attempts to create consistency based on the size of the client and the services provided; the fees above reflect the proposed level of service, and are representative of those charged to PFM's larger city clients such as the cities of Des Moines and West Des Moines. City of Dubuque, Iowa' Financial Advisory Interview Responses I '1 ~`-- .~°PFM" ~~ ~.... Responses The City's valuation and population have shown steady growth over the last several years, and in recognition of that, the City was upgraded from Aa3 to Aa2 in September of 2003. The City has expressed a strong desire to attain AAA status; it is very rare, however, for a municipality to go from Aa2 to AAA without first reaching Aa1. The City's Aa2 rating was last affirmed in April of 2006. The table below compares the City's statistics at the time of affirmation to Aa1 issuers; it can be seen that while the City has better than average debt statistics, its tax base is smaller than that of other municipalities regionally and nationally. General Fund balance statistics are more favorable than Aa1 issuers, but the vulnerability of gaming revenues that made up a significant percentage of general fund revenues (over 20%) somewhat dampens performance; if gaming revenues are removed from the ratios, financial statistics would no longer significantly outperform Aa1 issuers. The City stands among few in Iowa with such high ratings, and as such has been recognized for its sound management and financial vitality. We would be pleased to continuing working with the City to represent its strengths to the credit agencies and maintain its premium rating. Upgrades are not issued lightly, and more highly rated issuers are upgraded less often. PFM believes very strongly in realistic expectations supported by sound data; based on our research and conversations with rating analysts, we have found it to be unlikely for the City to be a candidate for upgrade until the City's actual valuation approaches the $4 billion threshold. l7uauque . Aar' west vm, la Aat wnea~on, i~ Aa1 rvauonai Aa1 nauona~ Aa2 Sample Size 109 240 Debt::';. Direct Debt 1.4% 3.11% 1.1% 0.9% 1.0°io Overall Debt 1.6% 5.5% 3.5.% 2.3% 2.4% Direct Debt Per Capita $709 $3,125 $990 $1,351 $1,155 Overall Debt Per capita $809 $4,671 $3,178 $3,283 $2,578 Payout 63.0% 73.0% 62.6% 75.3% 70.7% ,~~!xt~ase . Full Value (Millions) 52,910. $4,338 $4,9$9 $4,060 $4,038 Full Value Per Capita 550,446 $93,494 $90,028 $160,860 $115,433 5 Yr Avg AV Grth 7.2% 7.3% 6.7% 10.7% 8.4% Top 10 Tax Payers 12.4% 14.3% 6.2% 8.7% 8.5% PCI as a % of US 91.0% 145.5% 158.2% 182.7% 139.3% MFI as a % of US 93.0% 141.7% 180.8% 181.0% 151.2% MHV as a % of US T4.0% 117.6% 185.7% 204.6% 156.7% 2000 Population 57,686 46,403 55,416 24,476 35,041 Change (1990-2000) 0.2% 46.4% 7:7% 8.7% 12.7Me Finances `, , General Fund Balance 38.3% 23.6% 34.2% 28.8% 27.9% Unreserved GF Balance 31.1% 23.6% 25.0% 24.1% 24.5% UR Undesignated GFB 13.1% 23.6% 21.1% 16.0% 15.5% General Fund Revenues 544,089 $37,101 $28,048 $27,675 $34,070 City of Dubuque, Iowa' Fnandal Advisory Interview Responses 13 ~M~ i ~_- Restionses PFM has a proven history of assisting clients achieve positive rating changes, and is well poised to partner with the City in its long-term rating goals. Some examples of positive rating changes include the cities of Cedar Falls, Des Moines, Oskaloosa, and West Des Moines. Positive rating changes to occur in the last three years are as follows (table includes Des Moines office clients only): Dncitivo Ratinn Framnloe Sinop 9nn3 /nac Mninpc nffrr_P nnlvl Issuer Ra.tin4Agency Rating Change Date Chan e Ankeny, IA Water Moody's Investors Baa to A2 October 2005 Service Columbia (MO) Moody's Investors Al to Aa3 September Libra District Service 2005 " Davenport, IA GO Moody's Investors Negative to November Service Stable Outlook 2004 Des Moines Metro Moody's Investors Stable to November Wastewater Service Positive. 2006 Reclamation Outlook Authori Kansas Standard & Poor's AA+ to AAA September Department of 2006 Transportation Lee's Summit, MO Moody's. Investors Aa2 to Aa1 January 2006 GO Service Missouri Highways Standard & Poor's AA+ to AAA September & Transportation 2006 Commission Polk County,. IA Standard & Poor's Stable to November GO Positive 2806. Outlook State of Iowa GO Fitch Ratings AA to AA+ November 2006 When executed appropriately, bonds issued via competitive sale have historically achieved the lowest available interest rates. Given the City's history of prudent debt management, strong financial performance, high credit ratings, and strong security, the City is a prime candidate for continued competitive sales. To maximize the effectiveness of competitive sales and reduce interest costs, PFM would continue to do the following on the City's behalf: / Recommend a marketable bond structure; / Avoid selling bonds in direct competition with like credits; / Avoid competitive sales in volatile markets, or during major economic releases; / Develop a clear and informative offering document that highlights security strengths; and City of Dubuque, Iowa -Financial Advisory Interview Responses 14 PFM' ~. e Responses / Inform potential bidders of the sale with sufficient advance notice While it is not likely that the City will issue bonds on a negotiated basis, the best way to ensure fair negotiated pricing is through the engagement of an independent financial advisor with pricing expertise. As the #1 financial advisor for negotiated sales, PFM has the market presence and experience to help the City select the appropriate underwriter for the transaction, and to negotiate on behalf of the City with only its interests in mind. While PFM represents some state-level or specialty clients who issue on a negotiated basis, the majority of our local issuers sell bonds on a competitive basis using a variety of underwriters selected based on providing the lowest cost to the issuer on the day of sale. Bidders vary based on security type, par amount, bank qualification and tax status; most common bidders on local bond issues are: Common Comnetitive Bidders I Bank Name Location Common Role BB&T Capital Markets Richmond, VA Syndicate Manager Citigroup Global Chicago, IL Syndicate Manager Markets, INC Crews & Associates Little Rock, AR Syndicate Manager/ Member Cronin & Co, INC Minnea olis, MN S ndicate Maria er/ Member Davenport & Company, Chicago, IL Syndicate Manager INC Duncan Williams Mem his, TN S ndicate Maria er/ Member Griffin, Kubik, Stephens Chicago, IL Syndicate Manager & Thompson Harris N/A Chica o, IL S ndicate Maria er/ Member Legg Mason Wood Minneapolis, MN Syndicate Manager Walker, INC Morgan. Keegan & Memphis,. TN Syndicate Manager Com an Northland Securities, Minneapolis, MN Syndicate Manager INC Pi er Jaffra Kansas Ci , MO 5 ndicate Maria er RBC Dain Rauscher INC Chicago, IL Syndicate Manager Robert W. Baird & CO Milwaukee, WI S ndicate Maria er Ruan Securities Des Moines, IA Syndicate Manager/ Member Stiffel, Niclaus & CO., Minneapolis, MN Syndicate-Manager.: lNC UMB Bank, n.a. Kansas City, MO Syndicate Manager Wells Fa o Minnea olis, MN S ndicate Maria er/ Member Cily of Dubuque, Iowa' Financial Advisory Interview Responses I C ~PFM" ~~ ~- Responses All of these bidders, as well as others, played a role in the City's 2005 and 2006 bond issues. The winning underwriters for the last five City issuances are listed below. Ci of Dubu ue Com etitive Sale Results Series Name Par Amount Underwriter s General Obligation $4,270,000 UMB Bank, n.a. (Manager) Urban Renewal Bonds, Series 20056 General Obligation $2,995,000 Northland Securities (Manager) Urban Renewal Bonds, Bernardi Securities (Member) Taxable Series 2005C General Obligation $2,900,000 UMB Bank, n.a. (Manager) Bonds, Series 2006A American Trust & Savings Bank General Obligation $910,000 UMB Bank, n.a. (Manager) Urban Renewal Bonds, American Trust & Savings Bank Series 20066 General Obligation $3,525,000 UMB Bank, n.a. (Manager) Refunding Bonds, American Trust & Savings Bank Series 2006C When selecting an underwriter on a negotiated basis, the ability of the firm to place the City's bonds at a fair market price is the most important factor to consider. It is in the City's best interest to work with an independent financial advisor to evaluate banker proposals, and choose a qualified underwriter at a fair level of compensation rather than the low-cost provide. If an underwriter performs badly, the City will pay higher interest costs over the life of the bonds that will far outweigh any money saved in the one-time payment of compensation to the underwriter. On a competitive basis, the underwriter is most often chosen based on a calculation of the True Interest Cost (TIC) to the issuer. This calculation compares both the proposed interest rates and the proposed purchase price of the bonds (which takes into account the compensation to the underwriter). The City has used this methodology to select an underwriter on a competitive basis; for the last five issuances, the winning bidder and their compensation have been provided in the table on the following page. City of Dubuque, Iowa - Fnandal Advisory Interview Responses I V M° . ~- ~_- '' Responses Ci of Dubu ue Underwriter Com ensation Series.Name Underwrliters Av .Life Cam. ensation General Obligation Urban UMB Bank, n.a. 11.7 $29,639.40 Renewal Bonds, Series 20058 years ($6.94/bond) General Obligation Urban Northland Securities 6:7 $19,467.00 Renewal Bonds, Taxable Bernardi Securities yearn ($6.50/ bond) Series 2005C General Obligation Bonds, UMB Bank, n.a. 11.4 years $29,215.25 Series 2006A American Trust & Savings Bank ($10.07/bond) General Obligation Urban UMB Bank, n.a. 8.9 $6,334.70 Renewal Bands, Series 200 66 American Trust & Savin s Bank ears $6.961 bond General Obligation Refunding UMB Bank, n.a. 10.9 years $17,446.99 Bonds, Series 2006C American Trust & Savings Bank ($4.95/bond) Most cities in Iowa employ Ahlers & Cooney, P.C or Dorsey & Whitney LLP for bond counsel. PFM has worked extensively with both, and has partnered with Ahlers & Cooney .P.C. on a number of transactions for the City of Dubuque. The Iowa League of Cities reports 22 cities with populations over 20,000. PFM provides comprehensive financial advisory services for half of these cities, as shown in the following table. Samples of in-depth analyses provided to peer cities are included behind tab three. mar a Iowa tea' ex enence Ci Po ulatian Years of Service Ames Anken 50,731 36,161 16 22 Cedar Falls Council Bluffs 36,145 58,268 14 6 Davenport Des Moines 98,359 198,682 20+ 9 Dubuque -.Iowa Ci 57,686 62',380 6 22 Marion Sioux Ci 26,294 85,013 19 20+ West Des Moines 51,744 6 City of Dubuque, Iowa' Financial Advisory Interview Responses ~M~ .~T ~_ ..~-- Resuonses PFM has developed an expertise in the structuring of general obligation and revenue bonds to optimally meet the needs of local city issuers. PFM has a solid knowledge of the Iowa statutes and public hearing requirements related to both essential and general corporate purposes. In addition, PFM understands the unique characteristics related specifically to Iowa such as the constraints of the $8.10 levy limit, the credit rating implications of imposing the $0.27 emergency levy, urban renewal laws and the related proposed legislative changes. PFM is routinely involved in the capital planning process, enabling us to assist our clients with budgetary debt projections, tax levy askings, and enterprise fund user rate requirements. • • There are three national rating agencies, Fitch Ratings, Moody's Investors F' l.~C~~.~~.~1~ Service, and Standard & Poor's. PFM has extensive experience working with Y~U~ IIiESiK each of these agencies. Moody's Investors Service is the predominant rating agency among local issuers, and the proposed financial advisory team has specific experience presenting credits to Moody's analysts. ~~~~~ &PC~t3R'S City of Dutwque, Iowa -Financial Advisory Interview Responses I o ~M° ~_ Resuonses To optimally serve our clients, PFM performs in-depth analysis that requires on-going data. Assuming the City will engage PFM to provide the wide range of analyses offered, the following items will be needed: Information Required ~ Item A Iication Budget-All funds Official Statements, planning models, continuing disclosure Buildin Permits Official Statements Capital Improvement Planning models Plan Certificate of?axes Debt levy analysis and, Bud et 41-383 Customer & Usage Enterprise fund planning models Data Debt abatement Debt levy analysis, enterprise fund planning schedules models Employees & Official Statements Pensions Forms 635 & 703 Debt fe anal sis Funds on Hand Official Statements Insurance Official Statements Levies &Tax Collection Official Statements Unaudited financial Enterprise fund planning models erformance User Rates Enterprise fund planning models Valuations by TIF. TIF planningmode~ district PFM has met all insurance requirements; insurance certificates are included behind tab two. City of Dubuque, Iowa' Financial Advisory Interview Responses I n .PFM .~- ~_ Responses Single issue $5,000,000 general obligation bond $13,000 Combined issue with: $3,000,000 general obligation bonds (Parking) $1,000,000 general obligation bonds (Street) $3,000,000 refinancing existing bonds $7,000,000 Total Issue $24,050 or $37,050 Note: If the parking and street bonds are both tax-exempt, they can be sold in a single series. The cost for two bond issues (one $4 million, one $3 million) would be $24,050. If the bonds are sold as three issues, the cost would be $37,050. Single issue $10,000,000 revenue bonds $16,250 The day following the sale, PFM will provide the City will final debt schedules and any debt allocations. The addendum to the official statement will be available within five business days of the sale. After the closing of the bonds, bond counsel and .PFM separately prepare a reference book of related documents and reports or easy access. PFM tries to provide this document within 3 months of closing. Because we attempt to complete this task in order of issuance, clients selling bonds later in the year may wait longer than 3 months. Because all pertinent documents are provided immediately after the sale, many clients have found that the final documentation is not urgently needed; if the City requires more immediate attention, PFM will be happy to provide post-sale analysis books on an expedited basis. Fees are typically paid upon the receipt of invoice, which is intended to be provided after closing. Should an invoice arrive prior to closing, PFM expects that the City will wait until bond proceeds have been received before paying the invoice. Annual retainer fees can be paid at the discretion of the City, either from bond proceeds of the first bond issue of the year, or from operating funds if no bond issue is expected. City of Dubuque, Iowa -Financial Advisory Interview Responses 11~ .~ ~PFM` ~. ~_ Insurance Documentation rre.,r$• ~az~u DI IRI FI ACORDTN CERTIFICATE OF LIABILITY INSURANCE °"'~`M"'°°"YY"' 11/28/06 PRODUCER Frank Crystal & Co., Inc. Financial S uare q THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFlCATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. 32 Old Slip New York, NY 10005 INSURERS AFFORDING COVERAGE NAIC # INSURED INSURER A: Great Northern InS. CO. Public Financial Management, Inc. INSURER B: Federal Insurance Company Two Logan Square, Suite 1600 INSURER C: Pacific Indemnity Co. 18th and Arch Streets INSURER D: Indian Harbor Insurance Co. Philadelphia, PA 19103 INSURER E: CAVERAGES THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. LTR NS TYPE OF INSURANCE POLICY NUMBER pALICY EMFEC Y VE P pLAICY EXPIRATION LIMITS /~ GENERAL LIABILITY 35363950 11/30/06 11/30/07 EACH OCCURRENCE $1 p00 000 X COMMERCIAL GENERAL LIABILITY DAMAGE TO RENTED $1 000 000 CLAIMS MADE ~ OCCUR MED EXP (Any one person) $1 Q QOQ PERSONAL 8 ADV INJURY $1 Q00 000 GENERAL AGGREGATE $2 O00 O00 GENL AGGREGATE LIMIT APPLIES PER: PRODUCTS -COMP/OP AGG Slncluded POLICY JECOT- LOC B AUTOMOBILE LIABILITY 73248555 11/30/06 11/30/07 COMBINED SINGLE LIMIT (Ea accident) $1,000,000 ANY AUTO ALL OWNED AUTOS BODILY INJURY SCHEDULED AUTOS (Per person) $ X HIRED AUTOS BODILY INJURY X NON-0WNED AUTOS (Per accident) $ PROPERTY DAMAGE (Per accident) $ GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $ ANY AUTO OTHER THAN EA ACC $ AUTOONLY: AGG S B EXCESSAINBRELLA LIABILITY 79774080 11/30/06 11/30/07 EACH OCCURRENCE S10 000 000 X OCCUR ~ CLAIMS MADE AGGREGATE 510 OOO OOO $ DEDUCTIBLE $ RETENTION $ S C WORKERS COMPENSATION AND 71642435 11/30/06 11/30/07 X WC srATU- oTH- I EMPLOYERS' LU161LITY E.L. EACH ACCIDENT $1 O00 000 ANY PROPRIETORIPARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? E.L. DISEASE - EA EMPLOYEE $1,000,000 If es, describe under SPECIAL PROVISIONS below E.L. DISEASE -POLICY LIMIT $1 000,000 p orHER Professional ELU09526406 11/30/06 11/30/07 $15,000,000 Liability $500,000 Retention DESCRIPTION OF OPERATIONS /LOCATIONS /VEHICLES /EXCLUSIONS ADDED BY ENDORSEMENT/SPECIAL PROVISIONS Evidence of Coverage only. CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION Public Financial Management, ITIC DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL ~_ DAYS WRITTEN Two Logan Square, SUlte 1600 NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO DO so SHALL 18th and Arch Streets INPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR Philadelphia, PA 19103 REPRESENTATIVES. UTH ORI D R EPRESENTATIVE ZE A a v~ Q n '- a _ - ` . ~ ~r~"~ ~~l A ~a r `~"~.~ ACORD 25 (2001/08) 1 Of 2 #195597 TMB ©ACORD CORPORATION 1988 IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or after the coverage afforded by the policies listed thereon. ACORD 25-S (2001/08) 2 of 2 #195597 !`linn,iF• Z049ft PIIRI FI ~~,M CERTIFICATE OF LIABILITY INSURANCE ;;;27/~°'Y"' PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION Frank Crystal & Co., Inc. Financial S uare q ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFlCATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. 32 Old Slip New York, NY 10005 INSURERS AFFORDING COVERAGE INSURED INSURER A: Indian Harbor II1SUranCe CO. Public Financial Management, IflC. INSURER B: Two Logan Square, SUlte 1600 INSURER C: 18th and Arch Streets INSURER D: Philadelphia, PA 19103 INSURER E: (_AVFRArFC THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. ~ TYPE OF fNSURANCE POLICY NUMBER PDAICY MF~C~TIVE POLAICY EIIXLPUIDRATK)N LIMITS GENERAL LIABILITY EACH OCCURRENCE $ COMMERCIAL GENERAL LIABILITY FIRE DAMAGE (Any one fire) $ CLAIMS MADE ~ OCCUR MED EXP (Any one person) $ PERSONAL 8 ADV INJURY $ GENERAL AGGREGATE $ GENLAGGREGATELIMITAPPLIESPER: PRODUCTS -COMP/OPAGG $ POLICY Po- LOC AU TOMOBILE LIABILITY COMBINED SINGLE LIMIT ANY AUTO (Ea accident) $ ALL OWNED AUTOS BODILY INJURY SCHEDULED AUTQS (Per person) $ HIRED AUTOS BODILY IWURY $ NON-0WNED AUTOS (Per accident) PROPERTY DAMAGE (Per accdent) $ GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $ ANY AUTO OTHER THAN EA ACC $ AUTO ONLY: AGG $ EXCESS LU161UTY EACH OCCURRENCE $ OCCUR ~ CLAIMS MADE AGGREGATE $ $ DEDUCTIBLE $ RETENTION $ $ WORKERS COMPENSATK)N AND WC STATU- OTH- EMPLOYERS' LIABILITY E.L EACH ACCIDENT $ E.L. DISEASE - EA EMPLOYEE $ EL. DISEASE • POLICY LIMIT $ A OTHER Professional lability ELU09526406 11/30/06 11/30/07 $15,000,000 DESCRIPTION OF OPERATK)NSA.OCATIONSNEHICLES/EXCLUSIONS ADDED BY ENDORSEMENT/SPECIAL PROVISIONS Evidence of Coverage Only Public Financial Management, Inc Two Logan Square, Suite 1600 18th and Arch Streets Philadelphia, PA 19103 ecr~Rn ~~s t~ia~i, ,.s ~ IF1UA7'2fl GANGELLA I TUN SHOULD ANYOF TH E ABOVE D ESCRIBED POLK:IES BE CANCELLED BEFORE TH E EXPIRATION DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL3p._DAYSWRITTEN NOTK:ETOTHE CERTIFICATE HOLDERNAMED TOTHE LEFT, BUTFAILURE TODOSOSHALL IM POSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON TH E INSURER,ITS AGENTS OR REPRESENTATIVES. AUTHORr~D REPRESENTATIVE RICt o ACORD CORPORATION 1988 IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certficate does not confer rights to the certrficate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certrficate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certirficate holder, nor does it affirmatively or negatively amend, extend or after the coverage afforded by the policies listed thereon. ACORD25-S (7/97)2 of 2 #194738 rro.,r~• ~o~~sz DIIQI CI ACORD CERTIFICATE OF LIABILITY INSURANCE °"''' ,N ;;;28;x PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION Frank Crystal & Co., Inc. ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE Financial Square HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. 32 Old Slip New York, NY 10005 INSURERS AFFORDING COVERAGE INSURED INSURER A: Federal Insurance Company Public Financial Management, InC. INSURER B: Two Logan Square, Suite 1600 INSURER C: 18th and Arch Streets INSURER D: Philadelphia, PA 19103 INSURER E: C[)VFRe[;FS THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. NSR TR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DA MM/DD/YY POLICY EXPIRATION D TE MMiDD/YY LIMITS GENERAL LIABILITY EACH OCCURRENCE $ COMMERCIAL GENERAL LIABILITY FIRE DAMAGE (Any one fire) $ CLAIMS MADE ~ OCCUR MED EXP (Any one person) $ PERSONAL & ADV INJURY $ GENERAL AGGREGATE $ GENT_AGGREGATELIMITAPPLIESPER: PRODUCTS -COMP/OPAGG $ POLICY j Ra LOC AU TOMOBILE LIABILITY COMBINED SINGLE OMIT ANY AUTO (Ea accident) $ ALL OWNED AUTOS BODILY INJURY SCHEDULED ALROS (Per person) $ HIRED AUTOS BODILY INJURY NON-OWNED AUTOS (Per accident) $ PROPERTY DAMAGE (Per aaidenq $ GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $ ANY AUTO OTHER THAN ~` ACC $ AUTO ONLY: AGG $ EXCESS LU181LITY EACH OCCURRENCE $ OCCUR ~ CLAIMS MADE AGGREGATE __ $ DEDUCTIBLE $ RETENTION $ $ WORKERS COMPENSATION AND WC STATU- OTH- EMPLOYERS LIABILITY EL. EACH ACCIDENT $ EL DISEASE -EA EMPLOYEE $ EL. DISEASE -POLICY LIMIT $ A DTMER Financial nsitution Bond 81470605 11/30/06 11/30/07 $10,000,000 $75,000 Deductible DESCRIPTION OF OPERATK)NStLOCATIONSIVEHICLES!EXCLUSIONS ADDED BY ENDORSENENT/SPECIAL PROYLSIONS Evidence of Coverage Only Public Financial Management, Inc Two Logan Square, Suite 1600 18th and Arch Streets Philadelphia, PA 19103 I ACCRD 25-S f7/971~ .,f ~ ~~os~~n SHOULD ANYOFTH E ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE TH E EXPIRATION DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL3p.._DAYSWRITTEN NOTK:ETOTHE CERTIFICATE HOLDERNAMEDTOTHELEFT, BUT FAILURE TO DO SOSHALL IM POSE NOOBLIGATION OR LIABILITYOF ANY KIND UPON TH E INSURER,ITS AGENTS OR REPRESENTATIVES AUTHORIZED REPRESENTATIVE I TOAD [~ ACAR^ CARPARAT1nN 19RR IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certrficate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or after the coverage afforded by the policies listed thereon. ACORD 25-S (7/97)2 o f 2# 19 5 5 7 0 PFM' ~~ ~_ Sample Work Products SAhfPLE WORK PRODUCTS 2000 - 2001 $126,050,994 $404,672 3.21038 43,394 9,831 $457,397 $73,958 $139,785 $227,960 $26,790 $900 $469,393 -$11 496 $87 310 $75 814 2001 - 2002 149,685,535 482,155 3.221 I2 95,701 5,330 583,166 71,998 140,375 228,735 $137,289 37,366 1,200 6!6,963 , (33 777) , 75 814 , 42 037 2002 - 2003 160,045,943 337,000 2.10565 56,914 393,914 105,018 140,720 23,845 116,910 6,698 1,200 399,391 , (5,477) , 42 037 , 36 561 2003 - 2004 171,400,916 373,627 2.(7984 20,611 394,238 106,230 140,820 27,670 115,940 1,200 391,860 2,378 , 36 561 , 38 939 2004 - 2005 181,918,081 386,787 2.12616 11,250 398,037 '+~.i~<~i, 140,675 3a 063 114,970 - 900 382,704 IS 333 , 38 939 , 54 272 2005 -2006 193,122,785 410.610 2.12616 410,610 i?,?LiU I'S.''3 149,000 1,600 378,441 , 32 169 , 54 272 , 86 441 2006 - 2007 199,968,870 573,739 2.86939 573,789 ~'i > F 13=.-is? 151,333 $189,059 $189,059 2,0(10 573,789 , 0 , 86 441 , 86 441 2007 - 2008 204,545,078 567,06L 2.77230 567,061 9.'OS 1-!'_..~~. 153,393 179,706 179,706 2,400 567,061 0 , 86 441 , 86 441 2008 - 2009 212,946,733 570,593 2.67951 570,593 ;`ri 135.'0 155,208 181,556 181,556 2,800 570,593 0 , 86 441 , 86 441 2009 - 2010 223,003,585 596,884 2.67657 596,884 231,778 183,080 $179,627 362,707 2,400 596,884 0 , 86 441 , 86 441 2010 - 2011 230,271,566 612,571 2.66021 612,571 224,428 179,262 170,752 535,330 385,343 2,800 612,571 0 , 86 441 , 86 44! 2011 - 2012 237,776,421 634,668 2.66918 634,668 227,078 180,248 172,752 33,601 404,391 3,200 634,668 0 , 86 441 , 86 441 2012 - 2013 245,525,868 650,766 2.65050 650,766 229,158 180,868 169,434 33,001 418,009 3,600 650,766 0 , 86 441 , 36 441 2013 - 2014 253,527,881 670,437 2.64163 670,487 230,743 181,106 170,948 32,369 435,744 4,000 670,487 0 , 86 441 , 86 441 2014 - 2015 261,790,689 688,257 2.62902 688,252 231,833 180,984 172,109 31,705 452,419 4,000 685,252 0 , 86 441 , 86 441 2015 - 2016 270,322,793 686,530 2,53985 686,580 232,333 180,530 172,912 31,007 450,248 4,000 686,580 0 , 86 441 , 86 441 2016 - 2017 279,132,970 694,199 2.48698 694,199 237,333 179,748 (73,340 35,277 452,867 4,000 694,199 0 , 86 441 , 86 441 2017 - 2018 288,230,283 689098 2.39391 689,998 236,475 183,643 168,415 34,324 449,523 4,000 689,998 0 , 86 441 , 86 441 2018 - 2019 297,624,088 454.427 152685 454,427 182,009 173,365 33,339 450,427 4,000 454,427 0 , 86 441 , 36 44( 2019 - 2020 307,324,050 454A08 ].47860 454,408 180,065 172,789 32,329 450,408 4,000 454,408 0 , 86,441 , 86,441 Prepared by Public Finandal Management 1 of ]0 Date: 1 /4/2007; Time: 7:27 PM SAMPLE \WORK PRODUCTS FY 00-O1 $2,999,992 $35.9261 $107,778 $58,963 $33,958 ($6,548) $109,216 $195,588 ($87,810) $53 539 FY 01-02 5,682,054 $31.4540 178,723 78,963 78,958 $22,129 ($8,134) (]2,264) 159,651 19,072 , 72 611 FY 02-03 9,595,001 x33.1026 317,620 98,103 81,888 66,495 $46,741 (18,764) 274,462 43,158 , 115 769 FY 03-04 18,225,766 $33.4149 609,012 116,343 79,538 64,975 46,741 10,757 318,353 290,659 , 406 428 FY 04-OS 21,167,465 x34.4379 728,962 133,643 82,138 63,415 $101,386 46,741 (12,766) 414,556 314,407 , 720 835 FY OS-06 23,563,145 $34.5207 813,416 144,963 79,443 66,815 $88,766 93,853 $205,343 $51,257 $228,686 32,723 991,847 (178,431) , 542 404 FY 06-07 26,028,500 $34.5207 898,522 155,545 81,693 64,970 88,766 97,698 223,620 61,627 221,066 28,208 1,023,191 (124,(,69) , 417 734 FY 07-08 27,946,818 $34.5207 964,744 170,375 83,663 68,080 88,766 96,273 218,895 60,353 221,516 20,208 1,028,127 (63,384) , 354 351 FY 08-09 29,857,210 $34.5207 1,030,692 179,200 80,348 65,930 88,766 94,548 219,170 64,058 221,706 9,375 1,023,099 7,593 , 361 943 FY 09-10 31,896,354 $34.5207 1,101,084 187,240 82,000 63,730 88,766 97,673 219,270 62,538 221,576 9,375 1,032,167 68,918 , 430 861 FY 10-11 33,451,117 $34.5207 1,154,756 199,400 83,325 66,480 88,766 100,513 219,195 60,982 221,130 1,039,790 114,966 , 545 827 FY 11-12 33,451,117 $34.5207 1,154,756 210,400 79,350 63,950 88,766 98,048 218,945 59,390 220,359 1,039,207 115,549 , 661 376 FY 12-13 33,451,117 $34.5207 1,154,756 66,365 88,766 100,328 223,520 62,766 219,269 761,013 393,743 , 1 055 119 FY 13-14 33,451,117 $34.5207 1,154,756 68,485 88,766 102,268 222,580 60,903 222,852 765,853 388,903 , , 1 444 023 FY 14-15 33,451.,117 $34.5207 1,154,756 88,766 103,800 221,290 59,004 220,889 693,748 461 008 , , 1 905 030 FY 15-16 33,451,117 $34.5207 1,154,756 88,766 224,728 62,069 223,579 599,141 , 555,615 , , 2 460 645 FY 16-17 33,451,117 $34.5207 1,154,756 88,766 227,605 59,884 220,713 596,967 557,789 , , 3 018 434 FY 17-18 33,451,117 $34.5207 1,154,756 88,766 225,000 62,669 222,517 598,952 555 804 , , 3 574 238 FY 18-19 21,408,71.5 $34.5207 739,044 88,766 227,200 60,211 223,801 599,977 , 139,067 , , 3 713 305 FY 19-20 21,408,715 $34.5207 739,044 88,766 228,800 62,730 219,555 599,851 139,193 , , 3 852 498 FY 20-21 11,132,532 $34.5207 384,303 , , FY 21-22 11,132,532 $34.5207 384,303 384,303 4,236,801 384,303 4,621,104 Prepued by Public Financial Management 2 of 10 Date: 1/4/2007; Time: 7:27 PM SAMPLE WORT{ PRODUCTS v ,~ .~~~n,. 4 ~"' F`1 F ~ a ~ 5!3012 3 ' 613 7 t ~ ~ `;,. 1. ~_ ~~,._ ._ __ a. _a. ,.a.,' ~~~., ...,.~,t- ~ . ~i'~'"'s b/~u up9._r:_~~:~i3o Ioto.,~..~Mo/zu~.~. Intergovernmental Revenues 588,582 597,187 704,000 716,000 724,000 915,000 lvliscellaneous Revenues Q Q 0 Q Q 4 Total Revenues 588,582 597,187 704,000 716,000 724,000 915,000 Streets Salaries & Wages 194,705 202,296 219,684 229,887 238,537 259,936 Employee Benefits & Cost 18.5% 83,110 98,485 116,705 138,296 163,880 194,198 Staff Development 3.0% 1,000 1,030 1,061 1,093 1,126 1,159 Repair, MTCE, Utilities 3.0% 19,000 ]9,570 20,157 20,762 21,385 22,026 Contractual Services 3.0% 118,000 ~->,'+'~t+ 35,010 36,060 37,142 38,256 Commodities 3.0% 11,500 11,845 12,200 12,566 12,943 13,332 Capital Outlay 5.0% 6100 100,000 105,000 110.250 t 1. 5.7[,3 12] 551 Tam 433,415 467,216 509,817 548,913 590,775 650,458 Street Lighting Repair, MTCE, Utilities 5.0% 84,500 88,725 93,161 97,8]9 102,710 107,846 Contractual Services 5.0% 2,000 2,100 2,205 2,315 2,431 2,553 Commodities 5.0% 1-000 ],050 1.]03 1.158 1.216 1,276 Total 87,500 91,875 96,469 101,292 106,357 111,675 Snow & Ice Control Repair, MTCE, Utilities 5.0% 4,000 4,200 4,410 4,631 4,862 5,105 Contractual Services 5.0% 12.(OQ 12.(00 13230 ],~,g92 14.586 15 31~ 16,000 16,800 17,640 18,522 19,448 T 20,421 Street Cleatung Repair, MTCE, Utilities 5.0% 10,000 10,500 11,025 11,576 12,155 12,763 Commodities 5.0% 500 525 551 579 608 638 Capital Outlay 5.0% 2.000 2"100 2.205 2.315 2.431 ~ 553 Toral 12,500 13,125 13,781 14,470 15,194 15,954 Total Expenses 549,415 589,016, 637,707 683,198 731,774 798,507 Prepared by Public Financial Management 3 of 10 Date: 1/4/2007; Tiu~e: 7:27 PM SAMPLE \X~ORK PRODUCTS ~ ';~ ~ z~ ~~~ . u to >~ 1 r9+anpaat ~e _. .. ~St.uet3ient l{naud~~Ac p }3ud ct r ~^13ud et t,<<~~ Nrc u-tert ~ { ~ 6 :_. .~' ~ l Fro ected~ ~' iJ~ ', .Prpicte' ~` `Yr~.Feeteh ' ~` f~ica~e~cfcil' ti 1 rolei'IcJ "`Projected` . ~,Hl,._01 02, 00"tll ,w ,i - . 'F~1~H2 0,'~,~;FYp3=04~ ;`I?~'-Dd-0 .z~ ~ ~ ; ~`ti)~+.t16 f~.,, ~ „s F'y' U6-(Y'7 1zY 0~ 08 = ~ ., ~~ ~~FY~18-09 ~ '~09 1~1 =k+R~ iU-11 .: F~' 11-12 ~F'fl' 201-13 Rate: Per < 1,000 gallons $4.01 $4.01 $4.25 $4.25 $4.55 $4.87 $5.12 $5.38 $5.65 $5.93 $5.93 $5.93 $5.93 Number of Customers 30,613 30,952 31,453 ~ 31,816 32,134 32,456 32,780 33,108 33,439 33,773 34,111 34,452 34,797 Average Rate Per < 1,000 $4.11 $4.06 $4.31 $4.53 $4.85 $5.19 $5.46 $5.73 $6.02 $6.32 $6.32 $6.32 $6,32 WATER (1K GALLONS) Total SewerUsa e 153,697 156,546 160,333 161,936 163,556 165,191 166,843 168,512 170,197 171,899 173,618 175,354 177,107 OPERATING REVENUES Sales to Customers $631,535 $635,799 $690,797 $733,496 $784,244 $856,747 $910,744 $965,844 $1,024,277 $1,086,246 $1,097,109 $1,108,080 $1,119,161 SAC Fees 68,879 69,642 70,769 $71,586 $72,302 $73,025 $73,755 $74,493 $75,238 $75,990 $76,750 $77,517 $78,293 Penalties 15,482 14,458 16,263 17,757 17,500 17,500 17,500 17,500 17,500 17,500 17,500 17,500 17,500 Sales Tax Collections 5,158 4,858 5,369 5,524 5,524 5,524 5,524 5,524 5,524 5,524 5,524 5,524 5,524 Miscellaneous Revenues 65,537 54.746 39,831 2,443 6,000 6.000 6,000 6,000 6,000 6,000 6,000 6,000 6.000 Total Operating Revenues $786,591 $779,503 $823,029 $830,806 $885,571 $958,797 $1,013,523 $1,069,361 $1,128,539 $1,191,261 $1,202,883 $1,214,622 $1,226,478 OPERATING EXPENSES Operation and Maintenance: Personal Services $128,167 $142,935 $137,750 $104,308 $108,497 $137,827 $144,718 $151,954 $159,552 $67,000 $70,350 $73,868 $77,561 Contractual Services 50,502 73,000 83,435 76,322 101,300 99,300 104,265 109,478 114,952 36,000 37,800 39,690 41,675 Commodities 21,178 18.382 21.009 12,555 11,250 17.000 17.850 18:743 19,680 0 0 0 0 Subtotal0&M $199,847 $234,317 $242,194 $193,185 $221,047 $254,127 $266,833 $280,175 $294,184 $103,000 $108,150 $113,558 $119,235 Administration: Personal Services $36,894 $42,603 $42,4RR $42,827 $49,599 $49,084 $51,538 $54,115 $56,821 $59,662 $62,645 $65,777 $69,066 Contractual Services 47,181 17,863 14,847 15,552 10,900 14,900 15,645 16,427 17,249 18,111 19,017 19,967 20,966 Corrunodities 1.506 1,786 1.484 4.753 5.500 5,500 5.775 6,064 6,367 6,685 7,020 7.371 7,739 Subtotal Admin $85,581 $62,252 $58,819 $63,132 $65,999 $69,484 $72,958 $76,606 $80,436 $84,458 $88,681 $93,115 $97,771 WRA O&M (Other) $71,318 $82,345 $64,181 $89,302 $57,403 $0 $0 $0 $0 $0 $0 $0 $0 WRA O&M (City) 0 0 0 0 0 65,554 62,381 278,975 290,928 303,413 294,390 307,067 319,310 Annual WRA O&M Reserve 0 0 0 0 0 1 049 3,887 4,054 4,229 4,412 4,603 4,803 5,013 Total Operating Expense $356,746 $378,914 $365,194 $345,619 $344,449 $390,214 $406,059 $639,810 $669,777 $495,283 $495,824 $518,543 $541,328 Prepared by Public Financial 14fanagement 4 of 10 Date: 1/4/2007; Time: 7:27 PM SAMPLE IY~ORK PRODUCT'S -~--> -- W.. >.., .n,.,~,-rii aiw~,»a a/.i4,~/iS $/13,649 Prepared b}* Public Financial Management 5 of l0 Date: 1/4/2007; Time: 7:27 PM SAMPLE ~X~ORK PRODUCTS ,., trl~ Ala ~ ' T7{t~ ' '1~tidg,Vt f"°' i,)ud~tt' t. ,a©jd °~' Ytu~~~~'ed~ ~'j`~, 'rf~]ut~ - ; Yroit}~ite:Y ~PtajGCted Projected r ~ ~ ~ ;~,•,§q~l 012 34 ~Y_;i1~ U3f :`; ~Y p~ 04' ,~~'=~04 b~5,,;' , } Qla~{1~~~.i%1' 06-07 liX 07-08 ~. T'~' OH-tt9, ,, R~ U9 ill ,;1:F1~,1U-i J : ~ I'Y•11-(2 FY 202-i3 Revenue for Debt Service $461,906 $475,792 $490,605 $493,354 $549,622 $577,083 $645,964 $468,051 $497,263 $734,477 $745,558 $734,578 $723,649 Sewer Debt Service Series 1999 Bonds $57,673 $61,413 $59,925 $58,420 $56,880 $60,323 $58,523 $56,703 $59,863 $57,748 $60,588 $58,138 $60 638 SRF Series 1999A 70,905 70,536 71,123 70,625 71,084 , SRF Series 1999B 50,349 49,365 49,380 50,353 50,240 SRF Series 2000 62,613 76,883 77,906 77,358 77,770 SRF Series 2002 0 0 17.125 17.833 17.508 Subtotal Norwalk Revenue Debt $241,541 $258,196 $275,460 $274,589 $273,482 $60,323 $58,523 $56,703 $59,863 $57,748 $60,588 $58,138 $60,638 Debt Redistribution Pmts $82,282 $84,156 $81,357 $78,637 $0 $0 $0 $0 $0 $0 $0 $0 $0 Existing Debt Service (Other) 7,062 7,779 9,036 7,573 9,604 9,397 9,603 9,607 9,599 9,592 9,587 9 583 9 587 Refunding Debt Service ` 0 0 0 0 51,636 45,872 45,771 45,773 45,460 45,186 38 254 , 31 869 , 0 WRA Core Debt (City) WRA Expansion Debt (City)' 0 0 0 0 0 0 0 0 30,098 41,181 41,230 41,173 41,203 , 41,221 , 41,165 41,191 WRA SW Exp. Debt (City)' 0 0 0 0 0 51,218 68,011 68,067 68,106 68,128 68,134 68,027 67,901 Total Revenue Debt $330,885 $350,131 $365,853 0 $360,799 0 $334,722 21,579 $218,486 26,916 $250,004 26,913 $248,293 26.905 $251,105 26,893 $248,749 26,875 $244,659 26,824 $235,605 26,923 $206,240 Subordinated D/S Sanitary District Mortgage 21,458 21,458 21,4.58 21,458 21,458 21,458 21,458 21,458 21,458 21,458 21,458 21 458 21 458 General Obligation Debt 14.931 17,144 4,324 0 0 0 0 0 0 0 0 , , Total Sewer Debt $367,274 $388,733 $391,635 $382,257 $356,180 $239,944 $271,462 $269,751 $272,563 . $270,207 $266,117 0 $257,063 0 $227,698 CASHFLOW AFTER DEBT $94,633 $87,059 $98,970 Capital Outlays $528,323 $314,700 $380,137 WRA R&R/ Capital 37,732 30,274 18,055 WRA Equipment Replacement 0 0 0 WRA Insurance Reserves 0 0 0 WRA O&M Reserve 0 0 0 WRA Debt Transfer 0 0 0 $111,098 $193,442 $337,139 $374,502 $198,300 $224,700 $464,270 $479,442 $477,515 $495,951 $31,067 $53,000 $26,300 $75,000 $75,000 $75,000 $75,000 $75,000 $65,000 $35,000 34,128 20,650 4Q127 41,967 44,637 44,733 45,180 45,632 46,088 46,549 217 12,918 1,018 610 2,480 2,480 2,575 2,575 2,671 2,671 0 4,831 4,139 0 2,983 2,983 3,102 3,001 3,121. 3,236 19,846 31,079 0 1,049 0 0 0 0 0 0 (117,000) 0 0 0 0 0 0 0 0 Prepared by Public Financial Management 6 of l0 Date: 1 /4/2007; Time: 7:27 PM SAMPLE WORK PRODUCTS ,.~,,,, ~ ~ ~T;±+' ~~a}itT~~ '3taze~ihn,~fi`+ { , ~. ,1~; -, 1'., tf."'t _ 1;~+'~`~. C ~"f~~AI~J~ ~ PruJK~~ed'` '`' 15rUjeetc~ ~~1?1er`Fd - ~ ` P `rgj 1 Ytoj~Ctc~l ~ Projected ' ri ., -_`' } r ,r~l 111'i~~~';~ ~jl-U2 "`Fl' U~ D3 ;'. a . ~ .~ "FYO~-(14 lei ~'.U4 1 4:, ;~~ 115. F}`'06~ (!7 ~ ; FY OI-l18'~ k+Y 0$-09 ,,. FS'~0~9-70 i~iFY 30-11 ,. ~F7G'~1~-lZ Imo' 2012-13 ~ Net WRA Surcharge Annual Surplus/ (Deficit) 0 0 O I ($471,423) ($257,915) ($299,222) 0 $25 839 61,879 $126 084 67.488 $198 067 73,621 $182 254 80,002 ($6 802 87.238 $12 26 95,092 1u3,72y 113.073 123,306 , , , , , ) , 7 $243,321 $249,504 $247,562 $285,189 Transfers (Out)/In General Fund ($1,500) ($7,827) $9,594 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Misc Sources/Uses (3,522) (16,789) 166,736 (1,019) (300) 3,294 (300) (300) (300) 0 0 0 0 Transfers (Out)/In Equipment Revolving Fund 0 (15,325) (6 092 (5 347) (10,823) (8 921 (12,486) 0 0 0 (107,500 ) (107,500) (107,500) (107,500) (107,500) (107,500) (107,500) , , , ) 0 0 0 0 0 0 0 0 0 Debt Proceeds 371.818 226,041 185.636 0 0 0 0 0 0 0 0 0 0 Restricted Cash Improvement Fund $67,546 $70,101 $72,242 $73,927 $75,927 $77,727 $77,727 $77,727 $77,727 $77,727 $77,727 $77 727 $77 727 Sinking Fund 21,453 21,427 22,739 20,591 24,091 27,591 27,591 27,591 27,591 27,591 27 591 , 27 591 , 27 591 Debt Service Reserve Fund 258,688 258,335 274,890 273,784 273,784 273,784 273,784 273,784 273,784 60,638 , 60 638 , 60 638 , 60 638 Sewer Surplus 153,974 301,847 138,435 141,935 141,935 141,935 249,435 356,935 464,435 571,935 , 679,435 , 786,935 , 894,435 Total Cash $584,483 $657,370 $556,966 $571,231 $702,516 $909,177 $1,091,131 $1,084,029 $1,095,996 $1,126,170 $1,375,674 $1,623,237 $1,908,426 Notes: 'Outstanding debt only, based on current flow. Pxepaxed by Public Financial Management 7 of 10 Date: 1/4/2007; Time: 7:27 PM SAMPLE ~iUORK PRODUCTS } Proloct ~' 'Ff~ {~ :x~4~rfij~c~`.cl -~' .''A~~Iecisd- Rate: Per < 1,000 gallons $3.55 $3.55 $3.30 $3.30 $3.40 $3.40 $3.40 $3.40 $3.40 $3 40 Minimum 1,499 gallons $8.32 $8.32 $7.95 $7.95 $8.19 $8.19 $8.19 $8.19 $8.19 . $8.19 Average Rate Per < 1,000 $3.46 $3.40 $3.20 53.20 $3.30 $3.30 $3.30 S3.30 53.30 $3.30 WATER (1K GALLONS) Total Water Usa a 198,809 206,224 212,410 218,783 225,346 232,106 239,070 246,242 253,629 261,238 OPERATING REVENUES Sales to Customers $688,215 $700,154 $708,660 $700,104 $721,108 $765,023 $787,974 $811,613 $835,961 $861,040 Penalties 14,478 13,605 13,882 13,882 13,882 13,882 13,882 13,882 13,832 13 882 Sales Tax Collections 32,912 33,027 33,925 33,925 33,925 33,925 33,925 33,925 33 925 , 33 925 Miscellaneous Revenues 27.646 15,188 22.460 22.460 22.460 22,460 22.460 22460 , 22,460 , 22 460 Total Operating Revenues $763,251 $761,974 $778,927 $770,371 $791,375 $835,290 $858,241 $881,880 $906,228 , $931_,307 OPERATING EXPENSES Operation and Maintenance: Personal Services $126,726 $133,289 $126,778 $155,823 $163,614 $171,795 $180,385 $189,404 $198,874 $208 818 Contractual Services 161,226 163,732 23,891 23,000 24,150 25,358 26,625 27,957 29,354 , 30 822 Corrunodities 2 863 3 443 0 2 200 2 310 2 426 2 547 2 674 2 808 , 2 948 Subtotal0&M $290,815 $300,464 $150,669 $181,023 $190,074 $199,578 $209,557 $220,035 $231,036 $242,588 Administration: Personal Services $36,266 $41,421 $42,648 $50,075 $52,579 $55,208 $57,968 $60,866 $63,910 $67 105 Contractual Services 42,855 44,433 202,426 232,000 243,600 255,780 268,569 281,997 296,097 , 310 902 Commodities 1 149 1.901 0 6 750 7,088 7,442 7 814 8 205 8 615 , 9 046 Subtotal Admin $80,270 $87,755 $245,074 $288,825 $303,266 $318,430 $334,351 $351,069 $368,622 $387,053 Total Operating Expense $371,085 $388,219 $395,743 $469,848 $493,340 $518,007 $543,908 $571,103 $599,658 $629,64] Prepared by Public Financial Management 8 of 10 Date: 1 /4/2007; Time: 7:27 Plvl SAMPLE WORK PRODUCTS ti~ L ` Y.Se:is~Etsx+'~ ~~;,:, ~. ~1 . ,~ t ~.~. ' C Ii:tzCl(#L'FI i}~FIV{ C~ktS :~AhM Yl ,~.~n_!~i[, rr ~~ i # ti ~ki,r "~" ~ ~ 8 e ~'~~'r ~-=r ~~ ~ ~r 2ouo.ol Fx~2noX oz~: ,Fl', zoo2 U3. " ..~ o~-p~ = F~~ ~zoo4~u5 L're'ecf~d >~ zops-06 ' p' ~F. CMS~._. r;. ''£i'v f~c1 ' " 9'ro"'ehfPtl` ~ ;!~`P~a ef;tcd=' ~, -`Pro eeted ~~~zo ~- Ir- ~~~ zo ~~ a ~ ~ogs o9 ° EY 2pp9 Io NET OPERATING REV $392,166 $373,755 $383,184 $300,523 $298,034 $317,283 $314,333 $310,777 $306,570 ~_ $301 666 Capital Charges 0 45,249 17,520 17,520 17,520 17,520 17,520 17,520 17,520 , 17 520 Interest on Reserves 15,972 22.207 15.148 15,148 15,148 15.148 15.148 15.148 15.148 , 15 148 Revenue for Debt Service $408,138 $441,211 $415,852 $333,191 $330,702 $349,951 $347,001 $343,445 $339,238 . $334,334 Revenue for Debt Service $408,138 $441,211 $415,852 $333,191 $330,702 $349,951 $347,001 $343,445 $339,238 $334,334 Water Debt Service DMWW Rev Bonds $186,254 $182,316 $183,248 $183,916 $184,323 $184,443 $184,275 $183,843 $183,145 $182,183 DMWW DSRF Earnings (16,228) (7,502) (4,394) (4,394) (4,394) (4,394) (4,394) (4,394) (4,394) (4,394) Series 2000 SRF Loan 83.639 81.984 83.022 83.447 3 800 83.082 83.327 83.502 83.604 82.635 Subtotal Revenue Debt $253,665 $256,798 $261,876 $262,969 $263,729 $263,130 $263,208 $262,950 $262,355 $260,424 Subordinated D/S Community Development Loan $25,261 $25,261 $25,261 $25,261 $0 $0 $0 $0 $0 $0 General Obligation Debt 14.933 17.144 0 0 0 0 0 0 Total Water Debt $293,859 $299,203 $287,137 $288,230 $263,729 $263,130 $263,208 $262,950 0 $262,355 0 $260.424 CASHFLOW AFTER DEBT $114,279 $142,008 $128,716 $44,961 ................................ Ca italOutla s .~ .......................y......... $130610......... ......~.........: ) ($37,895) ................................... ($109,187) .............................. ...... ($47,00) ........:................... Transfers (Out)/In General Fund ($1,500) ($8,337) $340 $340 Misc Sources/Uses 33,187 (22,185) (21,078) 0 Transfers (Out)/In Improvement 31,510 (46,000) (2],989) (10,000) Equipment Revolving Fund 4( ,2911 4 086 119 7( .1191 Annual Surplus/ (Deficit) $42,575 $23,505 ($30,317) ($19,318) $66,974 $86,820 $83,792 $80,495 $76,883 $73,910 $340 $340 $340 $340 $340 $340 0 0 0 0 0 0 (10,000) (10,000) (10,000) (10,000) (IQ,000) (10,000) 71 ,llyl 119 17.1191 7 119 7f .119) 7l .1191 $195 $20,041 $17,013 $13,716 $10,104 $7,131 Prepared by Public Financial Management 9 of 10 Date: l /4/2007; Time: 7:27 PM SAMPLE WORK PRODUCTS 1'ri+jecfed ~~Pr,eii Vii; Y Restricted Cash Improvement Fund $351,617 $283,233 $305,222 $315,222 $325,222 $335,222 $345,222 $355,222 $365,222 $375,222 Sinking Fund 6,916 3,667 6,910 6,910 6,910 6,910 6,910 6,910 6,910 6,910 Debt Service Reserve Fund 83,561 83,022 83,447 83,447 83,447 83,447 83,447 83,447 83,447 83,447 Prepared b}* Public Financial Management 10 of 10 Date: 1 /4/2007; Time: 7:27 PM