Loading...
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✓ C;O AKITMEvr C P `f 9�1 OADCO 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. `�MJTyfA r Q 5 A 5 9JJ OAOGF 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 AP1i,IL 19% S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 21 28 29 30 MAY 1996 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 JUNE am S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 n 29 30 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