12. D.A. Davidson Agreemente Ci1y 0i Kjlivll
Incorporated 1892
Telephone (406) 758-7700
FAX (406) 758-7758
Post Office Box 1997
Kalispell, Montana
Zip 59903-1997
Date: April 18, 1996
To: Mayor and Council
From: Al Thelen, Interim City Manager
Re: Agreement with D.A. Davidson to Serve as the City
Fiscal Advisor for Sale of Water Revenue Bonds
The attached proposal from D.A. Davidson relates to the fiscal
assistance that we need to have to implement the Water Bond
Sale.
Douglas Rauthe
Mayor
Al Thelen
Interim City Manager
City Council
Members:
Gary W. Nystul
Ward I
Cliff Collins
Ward I
Norbert F. Donahue
Ward 11
Dale Haarr
Ward 11
Jim Atkinson
Ward III
Lauren Granmo
Ward III
Pamela B. Kennedy
Ward IV
` Since this company handled our last SID Bonds and was the only WarduIVeLarson
bidder on an issue that was difficult to sell, they also handled
our General Obligation Refinancing in 1992 and have provided
some initial direction on this issue, they are the most
knowledgeable firm regarding our finances.
As indicated in the attached contract, they will be able to
present a bid on this bond but we anticipate that several firms
will bid on the purchase of the bonds. It is recommended that
you approve this contract for fiscal services and authorize the
mayor to sign. ($7,500)
April 11, 1996
Amy Robertson
Finance Director
City of Kalispell
312 First Avenue East
Kalispell, MT 59903
Dear Amy:
Fixed -Income Department
Davidson BLdMV
8 Turd St. No.
P.O. Box 5015
Great Faf, MT 59403
(406) 771-4360
1-800-332-5915
FAX (406) 791-7315
Pursuant to our discussion of last week, I have enclosed information regarding the services D.A.
Davidson & Co. would propose to render in the capacity of financial advisor for the proposed
sale of your water system revenue bonds. In addition, we have enclosed a proposed form of
contract as well as a preliminary financing time schedule which we would propose to follow if
employed in this capacity.
D.A. Davidson & Co. has enjoyed a long and mutually beneficial relationship with the City of
Kalispell. Our strong historical knowledge of your City and its operations when coupled with
our current work on the tax increment issue allow us to move efficiently and quickly in
marketing bonds for the water system. We trust that these materials are sufficient, but should
you have questions or comments regarding these or any other matters please do not hesitate to
contact me at 1-800-332-5915.
Very truly yours,
)L3 "-
Kreg A. ones
Senior Vice President
KAJ:Ida
Enclosures
cc: Al Thelan✓
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OFFICES - MONTANA - WASHINGTON - IDAHO - WYOMING - CAUFC
D.A. Davidson & Co. is the dominant firm in Montana public finance largely because of the
quality service we provide our clients. The commitment we have made to our Montana
marketplace is evidenced by the fact that we have four Montana based investment bankers and that
we operate the only municipal trading desk in Montana. This commitment of resources and
personnel is critical in our financial advisory work because of the level of service we demand for
our clients.
All of our services are targeted toward the following key objectives:
• To ensure that all proceedings are in compliance with federal and state bonding laws;
• To maximize exposure of the City's issue through distribution of the sale documents
utilizing extensive dealer relations.
• To ensure that the objectives of City officials are reflected in the financing structure;
• To ensure that the financing moves forward in a timely, well -coordinated and
trouble -free fashion with minimal administrative burden on the City; and
• To obtain the lowest possible interest rate on the City's bonds through optimum
structuring of the issue and aggressive marketing techniques.
Our Financial Advisory services encompass all elements necessary to the successful completion
of the financing. More specifically, they include:
Structuring Analytics
• Sizing
• Cash Flow Analysis
• Capitalized Cost Estimates
• Maturity Schedules
Funding Sources
• Investment Earnings Analysis
• Cost Analysis
• Taxpayer Impact Analysis
• Disclosure Document Preparation
0 Recommendations concerning Continuing Disclosure Requirements
• Recommendations for Bidding Restrictions and Sale Method
• Bidding Material Preparation
• Disclosure Document and. Bidding Material Dissemination
• Bidding Facilitation and Conducting Bond Sale
• Review of all Resolutions and necessary governmental actions
• Coordination with all Project Professionals
• Preparation of Financing Time and Responsibility Schedule
• Rating Agency Application Preparation and Presentations
• Bond Insurance Cost/Benefit Analysis and Presentations
• Bond Market Monitoring and Bond Sale Timing
• Development of Request for Paying Agent and Registrar Services
• Preparation of Debt Service Schedules
• Administration and Coordination of Closing the Bond Issue
April 11, 1996
City Council
City of Kalispell
312 First Avenue East
Kalispell, MT 59903
Council Members:
Fused-Ineame Department
Davidson
8 Third SL No.
P.O. Bees 5015
Great Fans, MT 59403
(ans) 771-4360
143OG- 2-5915
FAX (406) 791-7315
We understand that the City of Kalispell is contemplating the issuance of Water System Revenue Bonds
to finance improvements within the City. D.A. Davidson & Co., a Montana corporation, requests your
consideration in retaining our firm as Financial Advisor for this project to assist you with the issuance
and public sale of bonds.
We submit the following outline of services we will provide. This outline is not intended to be all
inclusive. We will provide all services and advice necessary to insure the lowest possible interest rate
consistent with the financing and objectives of the City.
a. We will review all financial information necessary to determine the ability of the City to
incur and repay the debt. This review will include an analysis as to the effect of the
issuance of these bonds on the ability of the City to incur future obligations.
b. We will prepare and provide information relating to the total revenues necessary to retire
the bonds, including reserve funds and sinking funds.
c. We will recommend maturity schedules, call features, method and timing of bond sale and
other terms necessary to ensure the lowest interest rate on the bonds.
d. We will consult with the City's choice of bond counsel. These attorneys will draft all legal
proceedings, including resolutions, ordinances and certificates. They will advise as to
proper legal procedure to insure a favorable and marketable legal opinion on the bonds.
e. We will prepare a bond prospectus which will contain the Official Notice of Sale, legal
authorization of the bonds and financial information concerning the quality of the bonds and
the City. This prospectus will be sent to all interested bidders nationwide.
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OFFICES • MONTANA • WASHINGTON • IDAHO • WYOMING • CALIF
Page Two
City of Kalispell
April 11, 1996
f. We will prepare presentations for bond rating and insurance agencies, if necessary.
g. We will also prepare advertisements to be published locally and in the nationally circulated
Bond Buyer.
h. We will attend the sale of bonds and will check the accuracy of bids and verify that the bids
comply with the Notice of Sale.
i. We will assist the City in delivery of the bonds to the successful bidder in such a manner
that bond proceeds will be immediately available for reinvestment and will assist the City's
staff in maximizing investment earnings of unused construction funds.
j. In the event of the possibility of a refinancing for a more favorable interest rate on the
_ bonds, D.A. Davidson & Co. will examine the feasibility of such a refinancing at no
additional cost to the City.
k. D.A. Davidson & Co. expressly reserves the right to either bid on the bonds independently
for its own account or as a participant with others in a syndicate organized to submit a bid;
provided (1) the City, after sufficient opportunity to determine whether it is in its best
interests to allow D.A. Davidson & Co. to participate in the competitive sale of the bonds,
consents to such a bid in writing prior to the sale, and (2) D.A. Davidson & Co. has
provided disclosure of the existence of its financial advisory relationship to the City within
the prospectus to be provided to D.A. Davidson & Co.'s customers.
For our services performed on behalf of the City you agree to pay us the total of $7,500 payable at the
time the City receives bond proceeds. If for any reason the bonds are not sold there will be no
obligation on the part of the City to D.A. Davidson & Co. It is understood and agreed that advertising
costs, bond printing charges, costs of printing and distributing the Official Statement, paying agent and
registration charges, and the cost of bond counsel will be paid by the City. D.A. Davidson & Co. shall
be responsible for any costs it may incur in the performance of its obligations, including expenses
incurred for travel in Montana and related costs.
Page Three
City of Kalispell
April 11, 1996
If we are retained as your fiscal agent on this capital improvement program, we will work solely on
your behalf to complete this program in accordance with your time schedule and in the most economical
manner possible consistent with your future plans.
Respectfully submitted,
D.A. DAVIDSON & CO.
Kreg A. Jones
Senior Vice President
This Proposal and Agreement is hereby accepted for and on behalf of the City of Kalispell, Montana
on this day of April, 1996.
Mayor City Clerk
r
City of Kalispell, Montana
Water System Revenue Bonds, Series 1996
Financing Time Schedule
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RESPONSIBLE
DATE
ACTION
PARTY
April 16
•
Request for information for disclosure document
DAD
April 22
•
Make recommendations to City concerning general
DAD
structure and terms of Bonds.
•
Request for bids for Paying Agent/Registrar
DAD
April 29
•
Distribute Draft Resolution Calling for Sale of Bonds
BC
May 6
•
City Council adopts Resolution Calling for the Sale of
City
Bonds, regular meeting of the Council
•
Provide comments on the draft P.O.S.
City/BC
May 13
a
Distribute draft Preliminary Official Statement (P.O.S.) to
DAD
the City and BC for review
May 24
•
Distribute P.O.S. and Bidding Materials to potential
DAD
bidders
May 30
•
Distribute draft Bond Resolution
BC
June 3
•
Open bids for purchase of Bonds - 12:00 NOON MST
City/DAD
•
City Council adopts Resolution Awarding the Sale of
City
Bonds, special meeting of the Council at 12:00 NOON
MST
June 17
•
Adopt Bond Resolution (regular meeting of the Council)
City
Distribute Final Official Statements
DAD
June 19
•
Distribute Closing Documents
BC
•
Distribute Closing Memorandum
DAD
June 27
•
Closing/Delivery of bond proceeds
All
Issuer - City of Kalispell ........................ City
Financial Advisor - D.A. Davidson & Co. ........... DAD
Bond Counsel - Dorsey & Whitney ................. BC