R-2012-012-2012-01-23 RESOLUTION NO. R2012 -12
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, TERMINATING THE CITY'S EXISTING FINANCIAL ADVISORY
CONTRACT WITH RBC CAPITAL MARKETS, AND AUTHORIZING THE
CITY MANAGER OR HIS DESIGNEE TO ENTER INTO A NEW FINANCIAL
ADVISORY SERVICES AGREEMENT WITH BOSC, INC.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That the City's existing Financial Advisory Services Agreement with
RBC Capital Markets is hereby terminated.
Section 2. That certain Financial Advisory Services Agreement by and between
the City of Pearland and BOSC, Inc., a copy of which is attached hereto as Exhibit "A" and
made a part hereof for all purposes, is hereby authorized and approved.
Section 3. That the City Manager or his designee is hereby authorized to execute
and the City Secretary to attest a Financial Advisory Services Agreement with BOSC, Inc.
PASSED, APPROVED and ADOPTED this the 23 day of January A.D., 2012.
—=:)erric
TOM REID
MAYOR
ATTEST:
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APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
EXHIBIT
��' Resolution No. 2012 -12
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January 24, 2012
Mr. Duncan Lamme
Managing Director
RBC Capital Markets, LLC
1001 Fannin, Suite 1200
Houston, Texas 77002
Re: Termination of Financial Advisory Agreement
Dear Mr. Lamme:
Pursuant to the provisions of the financial advisory agreement (the "Agreement ")
between RBC Capital Markets and City of Pearland, Texas (the "City "), please accept
this letter as official written notification that the City is terminating the Agreement. We
appreciate you waiving the 30 -day notice provision.
Please provide the City with a disk containing copies of all electronic documents
prepared by RBC Capital Markets on behalf of the City during the last three years. Such
documents should include our continuing disclosure filings, official statements, tax rate
impact analysis, outstanding debt service and any presentations to the City.
We thank you for the services RBC Capital Markets has provided to the City.
Sincerely,
//
v
Bill Eisen
City Manager
City of Pearland, Texas
3519 LIBERTY DRIVE • PEARLAND, TEXAS 77581 -5416 • 281- 652 -1600 • www.ci.pearland.tx.us
* Printed on Recycled Paper
EXHIBIT A
DESCRIPTION OF BASIC SERVICES
Upon the request of an authorized representative of the Issuer, Advisor will perform the
following financial advisory services pursuant to the terns of the Agreement for Financial
Advisory Services.
Financial Planning.
• Perfonn any necessary analyses of the financial resources of the Issuer to determine the
extent of its capacity to authorize, issue and service any Issuer Obligations
contemplated, including an analysis of any existing debt structure as compared with the
existing and projected sources of revenue that may be pledged to secure payment of
debt service. Advisor will also survey any trends of the assessed valuation, taxing
power and present and future taxing requirements of the Issuer, as appropriate. If the
revenues of a system or facility are to be pledged to repayment of the proposed Issuer
Obligations, the survey will take into account (i) any outstanding obligations which are
payable from the revenues thereof, (ii) additional revenues expected from any proposed
rate increase, and (iii) the additional revenues as projected by your consulting
engineers as the result of the improvements to be financed by the proposed Issuer
Obligations. Advisor will also take into account any policy considerations, future
financing needs and operational considerations, as provided or projected by Issuer's
staff and /or consulting engineers or other experts engaged by the Issuer.
• Assist in the formulation of a 5 -10 Year Capital Improvement Plan to review the
Issuer's anticipated financing needs in light of future available revenues to support the
Issuer's financing needs and applicable State laws restricting debt capacity and assist in
periodically updating such plan.
• Subunit to the Issuer recommendations regarding Issuer Obligations under
consideration, including such terns as the type of debt to be issued (e.g., current
interest obligation, capital appreciation obligation, or other obligation), principal
amount, interest rate mode (e.g., fixed, floating, or other interest rate mode), type of
debt instrument (e.g. tax - exempt, taxable, tax - credit, etc.), fonn of debt instrument (e.g.
Unlimited Tax Bond, Maintenance Tax Note, Tax and Revenue Anticipation Note,
Contractual Obligation, etc.), date of issue, interest payment dates, schedule of
principal maturities, options of prior payment, security provisions, and such other
provisions as we believe are appropriate in order to achieve the objectives of the Issuer
and make the issue attractive to investors. Such recommendations will be based on
information developed by the survey described above and other information available
to us. All recommendations will be consistent with the goal of structuring the Issuer
Obligations to be sold on terms that are advantageous to the Issuer, including the
lowest interest cost consistent with all other considerations.
• Advise the Issuer of current debt market conditions, forthcoming debt issues and
general information, including economic data, which might be expected to influence
interest rates or bidding conditions, as deemed necessary.
A -1
• In the event that an election is required to authorize the Issuer Obligations then under
consideration, Advisor will assist in gathering such information and data as may be
required for any petitions, orders, resolutions, ordinances, notices and certificates in
connection with the election, including assistance in the transmission of such data to
the Issuer's legal counsel.
• Consult with the Issuer regarding State funding and available revenues pursuant to
existing or proposed rules, as requested.
Debt Management.
• Assist in the preparation of a debt management policy for the Issuer.
• Evaluate new money and refunding financing transactions contemplated by the Issuer,
giving consideration to the complexity, market acceptance, rating, size and structure of
such transactions in order to make a recommendation as to an appropriate method of
sale.
• For qualified projects or financings, upon request, coordinate and assist in the
preparation of applications for financial assistance from state or federal governmental
agencies.
• In connection with the marketing, offer, sale and delivery of any Issuer Obligations,
whether such Issuer Obligations are publicly offered (through negotiated sale or
competitive bidding) or privately placed:
* Assist with the preparation of any offering materials for use in connection with
the marketing, offer and sale of the Issuer Obligations, including the notice of
sale and bidding instructions, preliminary official statement, official statement,
official bid form and such other documents and information as may be required
for the marketing, offer and sale of Issuer Obligations (collectively, "Offering
Documents "); however, Offering Documents shall be prepared based on
information provided by the Issuer and the Issuer shall be solely responsible for
the accuracy of the information provided, except to the extent that any such
information is expressly attributed by the Offering Document to another source.
Offering Documents will be prepared in accordance with customary industry
standards and submitted to the Issuer and its legal counsel for examination and
approval by the Issuer. Offering Documents shall be certified by the Issuer, as
directed by the Issuer's legal counsel. (See "Legal, Regulatory and
Administrative Matters ", below.)
* After Issuer's examination and approval of an Offering Document, Advisor will
assist the Issuer with any arrangements for the printing of the Offering Document
and provide the Issuer with Offering Documents in sufficient quantity to meet its
needs and distribute such documents by mail or, where appropriate, by electronic
delivery, to prospective purchasers or the underwriters, as applicable, of the
Issuer Obligations.
A -2
* Provide copies of the final official statement to the purchaser or underwriters, as
applicable, of the Issuer Obligations in accordance with the notice of sale and
bidding instructions or the Issuer's agreement with the underwriters, as
appropriate.
* Advise the Issuer as to the utility of credit ratings and bond insurance or other
forms of credit or liquidity enhancement for Issuer Obligations.
* Coordinate the preparation of information as may be requested by, or appropriate
for submission to, a rating agency, bond insurer, or credit or liquidity
enhancement provider; and, consult with and advise the Issuer regarding the
form of any oral or written presentations to a rating agency, bond insurer, or
credit or liquidity enhancement provider. Any oral or written presentation shall
be based on information provided by the Issuer and the Issuer shall be solely
responsible for the accuracy of the information provided to any rating agency,
bond insurer, or credit or liquidity enhancement provider.
* To the extent that the Issuer elects to make a personal presentation of information
to one or more rating agencies, bond insurers, or credit or liquidity enhancement
providers, Advisor will arrange for such personal presentations, utilizing such
composition of representatives from the Issuer as may be approved or directed by
the Issuer. Any costs and expenses incurred by representatives of the Issuer as a
result of their participation in any personal presentation shall be paid and /or
reimbursed pursuant to and in accordance with the Issuer's internal policies
governing travel on official business of the Issuer.
* Coordinate and assist the Issuer's staff in the safekeeping of good faith checks, if
any.
* When appropriate, advise financial publications of the forthcoming sale of the
Issuer Obligations and provide them with all pertinent information.
* After consulting with and receiving directions from the Issuer, arrange for such
reports and opinions of recognized independent consultants as may be
appropriate for the successful marketing of the Issuer Obligations.
• If Issuer Obligations are to be sold by an advertised competitive sale, Advisor will:
* Disseminate Offering Documents to prospective bidders and organize such
informational meetings as may be necessary.
* Coordinate the receipt of bids and the tabulation and comparison of submitted
bids.
* Advise the Issuer regarding the best bid and provide advice regarding acceptance
or rejection of bids.
A -3
• If Issuer Obligations are to be sold by negotiated sale, Advisor will:
* In connection with the Issuer's selection of one or more investment banking
firms to serve as managers of an underwriting syndicate for the purpose of
negotiating the purchase of Issuer Obligations, provide any advice and assistance
requested by the Issuer; however, the selection of members of an underwriting
syndicate shall controlled by the Issuer and be approved by the Issuer.
* Cooperate in the preparation of a bond purchase contract, an underwriters
agreement and other related documents; and, consult with the Issuer in
connection with the Issuer's policy concerning certain terms of the syndicate's
agreement among underwriters (e.g., order priority and designation policy) to
achieve the most efficient and lowest interest cost for the Issuer Obligations,
consistent with other considerations of the Issuer.
* Advise the Issuer as to the fairness of the price offered by the underwriters for the
Issuer Obligations.
• Upon request, advise the Issuer in the selection of professional consultants and fiscal
agents required in connection with Issuer Obligations, including trustees, paying
agents, registrars, escrow agents, verification agents, and assist in the negotiation of
agreements related to these services and the fees incident thereto, upon request.
• Attend meetings of the governing body of the Issuer, its staff, representatives or
committees, as requested by the Issuer.
• Provide the Issuer's legal counsel with financial information requested by such counsel
in connection with such counsel's preparation of legal documents pertaining to the
authorization, sale and issuance of the Issuer Obligations.
• Upon request, consult with the Issuer regarding proposed or enacted changes in federal
and state laws, rules and regulations that have (or are expected to have) a material
effect on the municipal bond market, it being understood that Advisor does not and
may not act as an attorney for, or provide legal advice or services to, the Issuer.
• Coordinate the efforts of all interested parties to effect the delivery of the Issuer
Obligations, and assist the Issuer in the preparation or verification of final closing
figures incident to the delivery of the Issuer Obligations.
• After the closing of the sale and delivery of the Issuer Obligations, deliver to the Issuer
a schedule of annual debt service requirements for the Issuer Obligations and, in
coordination with the Issuer's legal counsel, assure that the paying agent /registrar
and /or trustee has been provided with a copy of the authorizing ordinance, order or
resolution.
A -4
Legal, Regulatory and Administrative Matters
• Advisor will coordinate the issuance of the Issuer Obligations; however, Issuer shall
retain a firm of recognized municipal bond attorneys to prepare proceedings and advise
the Issuer regarding procedures required to issue the Issuer Obligations and issue an
unqualified opinion (in an acceptable form) approving the legality of the Issuer
Obligations. Advisor will coordinate with such firm of bond attorneys and assist in all
financial advisory aspects involved in the preparation of appropriate legal proceedings
and documentation.
• The Issuer shall also be responsible for the retention and engagement of competent
legal counsel to advise the Issuer concerning all other legal matters related to the
marketing, offer, sale and delivery of any Issuer Obligations, including applicable
federal and state securities laws and regulations; and, the Issuer shall be responsible
for the engagement of competent legal counsel to render an opinion covering the
Issuer's exercise of appropriate discretion and diligence in the preparation and
dissemination of any Offering Documents (e.g., a 10b -5 opinion addressing the
accuracy and completeness of each Offering Document).
• To the extent that the issuance and sale of the securities, and construction of the project
in question, requires the approval of any state or governmental agency, Advisor will
assist the Issuer in the preparation of all financial information required for inclusion in
applications for such approval. When requested by the Issuer, Advisor will appear on
Issuer's behalf to provide appropriate testimony at public hearings before state and
other governmental commissions and boards. Advisor will also participate in any
preliminary conferences with the staff of any state or governmental agencies, as
necessary.
• Advisor will annually coordinate the preparation and filing of the Issuer's ongoing
disclosure obligations required pursuant to SEC Rule 15(c)2 -12 for City's debt
obligations and provide guidance on the submission thereof.
• Issuer will coordinate the use of other consultants, as necessary, to perform ongoing
activities to ensure the Issuer remains in compliance with applicable Federal and State
laws.
A -5
EXHIBIT B
DESCRIPTION OF ADDITIONAL SERVICES
Upon the request of an authorized representative of the Issuer, Advisor (or one or more
affiliates of Advisor) will perform the following financial advisory services pursuant to the terms
of the Agreement, subject to the mutual agreement of the Issuer and Advisor regarding the terms
and conditions thereof.
• Purchase such investments as may be directed and authorized by Issuer to be
purchased. To the extent that Advisor is entitled to receive fees or other compensation
in any form from a third party with respect to investment activities on behalf of the
Issuer, Advisor will disclose to the Issuer the nature and amount of any such
compensation so that the Issuer may consider the information in making its investment
decision.
• Provide other services (either directly or through an affiliate of Advisor) with respect to
matters which do not involve or affect the financial advisory services covered within
the Agreement, including:
o Trust Services,
o Cash/Investment Management Services,
o Financial Products Advisory Services (relating to the use and execution of
financial products and certain hedging transactions),
o Other Fiscal, Consulting or Advisory Services.
B -1
APPENDIX A
Fees
The fees due Advisor will not exceed those contained in our customary fee schedule as listed
below.
Fee Schedule for Financial Advisory Services — Sale of Issuer Obligations
Obligation Proceeds
And Not
More Than More Than The Fee Is
$ 0 $ 500,000 $ 5,000 minimum fee
500,000 1,000,000 $ 5,000 plus $5.00 per $1,000
for all over $500,000
1,000,000 5,000,000 $7,500 plus $2.50 per $1,000
for all over $1,000,000
5,000,000 10,000,000 $17,500 plus $1.25 per $1,000
for all over $5,000,000
10,000,000 20,000,000 $23,500 plus $1.00 per $1,000
for all over $10,000,000
20,000,000 No Limit $33,500 plus $0.40 per $1,000
for all over $20,000,000
The above charges may be multiplied by up to 1.25 times for the completion of a negotiated
sale, the issuance of revenue or refunding bonds, or the issuance of obligations associated with a
federal or state program. The charges for Issuer Obligations issued with a floating interest rate,
including services provided for the substitution of liquidity facilities or remarketing agreements, will
be negotiated with the Issuer.
The payment of charges for financial advisory services described in Article II of the
Agreement shall be contingent upon the delivery of Issuer Obligations and shall be due at the time
that Issuer Obligations are delivered. The payment of charges for services described in Article III of
the Agreement shall be due and payable in accordance with the mutual agreement therefor between
Advisor and Issuer.
Expenses
The Issuer shall be responsible for the following expenses, if and when applicable, whether
they are charged to the Issuer directly as expenses or charged to the Issuer by Advisor as
reimbursable expenses: fees and expenses of the Issuer's legal counsel, including bond counsel;
administrative and regulatory review and approval fees; bond printing expenses; credit rating fees;
credit enhancement fees; fees of other professionals, including accountants; official statement
printing and distribution expenses; fees of paying agents, registrars, trustees or escrow agents; travel
expenses outside of the State of Texas; fees and expenses of underwriter(s) and underwriter's
counsel; and, any other miscellaneous expenses incurred on behalf of the Issuer.
The payment of reimbursable expenses that Advisor has assumed on behalf of the Issuer shall
NOT be contingent upon the delivery of Issuer Obligations and shall be due at the time that services
are rendered and payable within thirty days receipt of an invoice therefor submitted by Advisor.
Appendix A -1
BOSC, Inc EXHIBIT "A"
IX* f:ntnfUl Cora,
Public Finance Division Resolution No. 2012 -12
1401 McKinney Street, Suite 1650
Houston, TX 77010
Tel. 713.289.5899
Fax 713.354.0255
AGREEMENT FOR FINANCIAL ADVISORY SERVICES
This Agreement for Financial Advisory Services (the "Agreement ") by and between the
CITY OF PEARLAND, TEXAS, a political subdivision of the State of Texas ( "Issuer "), and
BOSC, INC. ( "Advisor "), is entered into and effective as of the date executed by the Issuer, as
set forth on the signature page hereof.
I. BACKGROUND
Section 1. The Issuer expects to have under consideration from time to time the
authorization and issuance of indebtedness in amounts and forms which cannot presently be
determined and, in connection with the authorization, sale, issuance and delivery of such
indebtedness, the Issuer desires to retain a financial advisor.
Section 2. The Issuer desires to obtain the professional services of Advisor to advise
the Issuer regarding the execution, issuance and sale of certain evidences of indebtedness or debt
obligations that may be authorized and issued or otherwise created or assumed by the Issuer
(hereinafter referred to collectively as the "Issuer Obligations ") from time to time during the
period in which this Agreement shall be effective.
Section 3. Advisor represents and warrants to Issuer that Advisor has the professional
licenses, certificates, knowledge, expertise and experience to provide the services set forth in this
Agreement. Advisor is willing to provide its professional services and facilities as financial
advisor in connection with all programs of financing as may be considered and authorized by
Issuer during the period in which this Agreement shall be effective.
II. SCOPE OF BASIC SERVICES
Advisor agrees to provide the Issuer with the services identified in Exhibit A.
III. ADDITIONAL SERVICES
In addition to the services described in Article II, Advisor agrees to perform and make
available to Issuer the services identified in Exhibit B, when so requested by the Issuer. The
terms of the services identified in Exhibit B shall be set forth as an amendment to this
Agreement or in a separate document.
IV. TERM OF AGREEMENT
This Agreement shall become effective as of the date executed by the Issuer as set forth
on the signature page hereof and, unless terminated by either party pursuant to Article V of this
Agreement, shall remain in effect thereafter for a period of five (5) years from such date. Unless
Advisor or Issuer notify the other party in writing at least thirty (30) days in advance of the
Broker /Dealer Services and Securities offered by BOSC, Inc., an SEC registered investment adviser, a registered broker /dealer, member FINRA /SIPC. SEC registration does not imply a certain level of
skill or training. Insurance offered by BOSC Agency, Inc., an affiliated agency. Investments and insurance are not insured by FDIC, are not deposits or other obligations of, and are not guaranteed by,
any bank or bank affiliate. Investments are subject to risks, including possible loss of principal amount invested.
applicable anniversary date that this Agreement will not be renewed, this Agreement will be
automatically renewed if mutually agreed upon by Advisor and Issuer on the fifth anniversary of
the date hereof for an additional five (5) year period.
V. TERMINATION
This Agreement may be terminated with or without cause by the Issuer or Advisor upon
the giving of at least thirty (30) days' prior written notice to the other party of its intention to
terminate, specifying in such notice the effective date of such termination. Advisor may not
terminate for the express purpose of taking an underwriting position in any bonds to be issued by
the Issuer. In the event of such termination, it is understood and agreed that only the amounts
due Advisor for services provided and expenses incurred to the date of termination will be due
and payable. No penalty will be assessed for termination of this Agreement by either party.
VI. COMPENSATION AND REIMBURSEMENT
The fees due to Advisor for the services described in Article II of this Agreement with
respect to each issuance of Issuer Obligations during the term of this Agreement shall be
calculated in accordance with the schedule set forth on Appendix A attached hereto.
Except to the extent specifically provided otherwise by this Agreement or assumed in
writing by Advisor, the Issuer shall reimburse Advisor for expenses incurred in connection with
the performance of services hereunder, including reasonable expenses described in Appendix A.
Unless specifically provided otherwise on Appendix A or in a separate written agreement
between Issuer and Advisor, such fees, together with any other fees as may have been mutually
agreed upon and all expenses for which Advisor is entitled to reimbursement, shall become due
and payable concurrently with the delivery of Issuer Obligations.
VII. MISCELLANEOUS
Section 1. While this Agreement is in effect, the Issuer will provide or cause to be
provided to Advisor information concerning the Issuer, including information relating to the
Issuer's financial condition and results of operations, the sources of security and payment for any
Issuer Obligations, and such other information (excluding confidential information unless such
confidential information is reasonably required to provide disclosure to investors) as Advisor
reasonably considers necessary or appropriate to perform its duties under this Agreement. Such
information will be taken or derived from the Issuer's official records or from other sources that
the Issuer determines and reasonably believes to be accurate and reliable, based on due inquiry
and investigation by the Issuer of such other sources; and, the Issuer expressly authorizes
Advisor to rely on the accuracy and completeness of all information provided to Advisor by or
on behalf of the Issuer.
Section 2. As an inducement to Advisor to enter into this Agreement and to perform
the duties assigned to it hereunder, the Issuer agrees to comply with all applicable requirements
and procedures imposed by law relating to, and all covenants and agreements entered into in
connection with or supporting, the validity, enforceability and terms (including terms relating to
security and tax - exemption) of any Issuer Obligations. As an inducement to Issuer to enter into
-2-
this Agreement and to perform the duties assigned to it hereunder, the Advisor agrees to comply
with all applicable requirements and procedures imposed by law relating to, and all covenants
and agreements entered into in connection with or supporting, the validity, enforceability and
terms (including terms relating to security and tax - exemption) of any services by Advisor.
Further Advisor represents and warrants to Issuer that Advisor is familiar with the applicable
law, rules, regulations, and requirements in order for Advisor to perform Advisor's professional
services as a highly qualified and competent provider of said financial services.
Section 3. All actions and recommendations of Advisor pursuant to this Agreement
will be based on Advisor's professional judgment and information that the Issuer provides to
Advisor. Advisor's recommendations represent its professional judgment based upon Advisor's
review of information provided by the Issuer, to the extent that Advisor deems such information
relevant to any such recommendation, and Advisor's own knowledge and experience. Advisor's
recommendations will be offered in reliance upon the representations and covenants contained in
the agreements, certificates and other instruments prepared, executed and delivered in connection
with Issuer Obligations. The Issuer understands and agrees that this Agreement shall constitute
an agreement for professional services, and neither the performance by Advisor of its duties
hereunder nor the implementation of any of Advisor's recommendations shall be construed by
the Issuer as a guarantee of any result or outcome.
Section 4. This instrument contains the entire agreement between the parties relating
to the rights herein granted and obligations herein assumed. Any oral or written representations
or modifications concerning this Agreement shall be of no force or effect except for a subsequent
modification in writing signed by all parties hereto.
Section 5. If any provision of this Agreement shall be held or deemed to be or shall,
in fact, be invalid, inoperative or unenforceable as applied in any particular case because it
conflicts with any provision or provisions of any constitution, statute, rule of public policy, or
any other reason, such circumstances shall not have the effect of rendering the provision in
question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering
any other provision or provisions of this Agreement invalid, inoperative or unenforceable to any
extent whatever.
Section 6. Any notice or other communication to be given to the Issuer under this
Agreement may be given by delivering the same in writing to the City of Pearland, Texas, 3519
Liberty Drive, Pearland, Texas 77581, Attention: Finance Director; and, any notice or other
communication to be given to Advisor under this Agreement may be given by delivering the
same in writing to BOSC, Inc., 1401 McKinney Street, Suite 1650 Houston, Texas 77010,
Attention: Public Finance Department.
Section 7. This Agreement shall be construed and given effect in accordance with the
laws of the State of Texas. Venue for any dispute regarding this Agreement shall be in the courts
of Harris County, Texas.
Section 8. This Agreement shall be binding upon and inure to the benefit of the
Issuer and Advisor, their respective successors and assigns; provided, however, that neither party
hereto may assign or transfer any of its rights or obligations hereunder without the prior written
consent of the other party.
-3-
Section 9. The terms of this Agreement shall not be waived, altered, modified,
amended or supplemented in any manner whatsoever except by written instrument signed by all
of the parties hereto.
Section 10. This Agreement is submitted in duplicate originals. When accepted and
executed by the parties hereto, this Agreement will constitute the entire Agreement for the
purpose and consideration herein specified.
[Signature Page Follows]
-4-
BOSC, INC.
By
Name: / - r' 4 ^ 1 0
Title: /14ii/9(Mw pr
By
Name: C./ /NN iieSvC4
Title: jCE f'/1-EJ, - r
CITY OF PEARLAND, TEXAS
By:
Name: \
Title: ■tc� NAGY+
Date: i / Z
-5-
0BOSC,
Inc.
1401 McKinney Street,Suite 1650
Houston,Texas 77010
Phone: (713) 289-5899
Ryan O'Hara, Frank Ildebrando,John Robuck and Karen Blogg To Join BOSC, Inc. In Houston Office
BOSC,Inc. is pleased to announce the continued expansion of its municipal platform with the coming additions of Ryan O'Hara, Frank
Ildebrando,John Robuck and Karen Blogg to its Texas Public Finance team. Collectively,with over 100 years of experience,the Houston
team will continue to serve cities, counties, school districts and special districts throughout Texas from BOSC, Inc.'s Houston Public
Finance office.
BOSC,Inc.is a registered broker/dealer and a subsidiary of BOK Financial Corp.,a publically traded company(symbol"BOKF") that has
remained profitable and well capitalized with$2.5 billion of capital as of December 31,2010. As a regional financial institution,the firm's
capital position compares favorably with other regional firm's conducting public finance business in Texas.
Total Equity Capital Comparison
$3,003 I
S2,500 Ir
$2,000 III I
i
S1,500 II
$1,000 0 •
$500
�� «t_
BOKF Raymond James Piper Jaffray PlainsCapital Southwest Coastal Securites
Securities
Capital reported as of the respective company's most recent year end—BOKF is parent company of BOSC,hr.and PlansCapital is patent company of FirstSouthwest.
In fact, BOKF was the largest financial institution that turned down funds offered through the Treasury Department's Troubled Asset
Relief Program ("TARP") due to its strong capital position. Additionally, the Bank of Texas, an affiliate of BOSC, Inc., has a strong
presence in the Houston area with 16 locations and a total of 50 locations throughout the State of Texas.
As a regional broker/dealer dedicated to supporting the financing needs of Texas municipal issuers,the addition of these seasoned public
finance professionals in Houston will provide more Texas municipal issuers with access to the vast resources available within the BOSC,
Inc./BOKF platform. A platform that has enabled BOSC, Inc. to participate in over $5.0 billion of successful financings for Texas
municipal issuers over the last 3 years(see representative listing of financings on following pages) and a platform that has further supported
the financing needs of Texas municipal issuers by providing capital through the Bank of Texas, who has directly purchased over $200
million of Texas municipal debt obligations over the last 2 years.
Mr.William Gumbert,Manager of BOSC, Inc.'s Texas Public Finance Department stated, 'We look forward to adding Ryan, Frank,John and
Karen to our Texas Public Finance team. Their collective experience and track record within the Texas municipal market and their proven commitment to do
business the "right wig"will compliment the business principles of our existing Texas Public Finance team.It is an exciting time at BOSC,Inc. as we continue to
differentiate our platform through the experienced professionals that comprise our Texas Public Finance team, our commitment to remain accountable for
performance,our commitment to advocate for the "best interests"of all Texas municipal issuers and the capital resources we have dedicated to support the financing
needs of Texas municipal issuers."
BOSC, Inc.'s Texas Municipal Finance Team
'.„_ ,,,., .!
ril .-..
114
11)1t.' npili--.' 4141'-
111,',..... I.,.
17.
Bill Gumbert Josh McLaughlin Nlike Jolly Dr.Cathy Bryce Omar Garcia Rick Menchaca ,1iison Long Mark Pryce
Managing Director Investment Banker Investment Banker Investment Banker Investment Banker Investment Banker Associate Senior Underwriter
(214)576-0880 (214)576-0878 (512)868-1980 (214)477-5972 (512)243-5917 (512)392-8555 (214)576-0881 (214)576-0872
Broker/Dealer Services and Securities offered by BOSC,Inc.,an SEC registered investment adviser,a registered broker/dealer,member FINRA/SIPC.SEC regutranon does not imply a cert in level of skill or training.Insurance
offered by BOSC Agency,Inc.,an affiliated agency.Investments and insurance are not insured by FDIC,are not deposits or other obligations of,and are not guaranteed by,any bank or bank affiliate.Investments are sublea to asks,
including possible loss of principal amount invested.
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Recent Texas Municipal Financings Completed by BOSC, Inc.
a _.,
gas ..
0. . ilivr ;%w. f • )
CA(1ty of Copperas A
c
$9,110,000.00 $51,150,000.00 $22,390,000.00 $8,185,000.00 $15,290,000.00 $39,000,000.00
City of Bedford City of Copperas Cos
City of Alvin City of Austin City of Baytown General ObligationCity of Bellaire
Contract Revenue
General Obligation Certificates of General Obligation General Obligation
Refunding& and Limited Tax
Refunding Bonds, Obligation, &Refunding Bonds. I rovement Bonds, Refunding Bonds,
Series 2011 Series 2011 Series 2011 Series 2011 Series 201IA&B ' Bonds,Series 2011
,x ' FORT WORTH "".`N 0 HalkI—
' s .
ThTON : ' Hel litg
$10,845,000.00 $15,215,000.00
City of Denton $137,895,000.00 $78,325,000.00 Grayson County $8,000,000.00
Cityof Fort Worth Grand Mission
General Obligation Denton County City of Harker Heights
Permanent Drainage Utility Municipal Junior College District Combination Tax and
Refunding& Utility District Consolidated Fund
Improvement Bonds, Improvement Bonds, 1 System Revenue Revenue Certificates of
Bonds,Series 2011 Number] Revenue Refunding
Series 2011 Series OlOA&B Bonds,Series 2010 Obligation,Series 2011
11'..„1--- 11414,i°f' t
i `, t `F 0:11''.
0 ~`T LIAbII[CITY
1/111: .k...
$67,325,000.00 $31,400,000.00
Harris County Harris County Hays County $9,295,000.00 City of Killeen $10,000,000.00
City of Keller City of League City-
Municipal Municipal Combination Tax& Pass-Through Toll
Utility District Utility District Limited Pledge General Obligation Revenue and Limited Combination Tax and
Number 71 Number 419 Revenue Certificates of Refunding Bonds, Tax Bonds, Revenue Certificates of
Obligation,Series 2010 Series 2011 Series 2011 Obligation,Series 2010
* a" °
ietE I �,..
�'.
'1!.
sy. IN
17r� \
S60,800,000.00 Z67
Orchard Cultural Ed.
$36,270,000.00 $20,030,000.00 $23,010,010.00 ' $8,090,000.00
Montgomery County Facilities Corp.
City of LeanderCity of Pasadena City of Pearland City of San Marcos
Municipal Revenue Bonds
Combination Tax and General Obligation Water&Sewer System Combination Tax and
UtilityDistrict mbell Art
Revenue Certificates of Refunding Bonds, Revenue Bonds, Revenue Certificates of
Obligation,Series 2012 Number 90 Foundation Project), Series 2012 Series 2010A&B Obligation,Series 2011
Series 2010A&B
'di."'"` O'''11 SMU ill jogIL _ a .
SEAL' CXAS 30000.00
SE AS $]1G 3 T $17,220,000.00 —
Southwest Higher fexoma Area Solid $7,965,000.00
$6,000,000.00 Education Auth.Inc. $13,450,000.00 Waste Authority $14,500,000.00 City of Richardson
City of Sealy Higher Education City of TempleCity of Tomball Combination Tax and
8 Regional Solid Waste
Combination Tax and Revenue Bonds General Obligation Combination Tax and Revenue Certificates of
Disposal Contract
Revenue Certificates of (SMU Project) Refunding Bonds, Revenue Certificates of Obligation,
Obligation,Series 2010 Series 2011A Revenue Refunding Obligation,Series 2012 Series 2011
Series 2010 Bonds,Series 2010
Broker/Dealer Services and Securities offered by BOSC,Inc.,an SEC registered investment adviser,a registered broker/dealer,member FINRA/SIPC.SEC registration does not imply a certain level of skill or training.Insurance
offered by BOSC Agency,Inc.,an affiliated agency.Investments and insurance are not insured by FDIC,are not deposits or other obligations of,and are not guaranteed by,any bank or bank affiliate.Investments are subject to risks,
including possible loss of principal amount invested.
,
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'• - CITY OF PFARLiJID -
ra.
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e y '
Overview of 0 BOSC, Inc.'s
Municipal Finance Qualifications
and Bond Refunding Opportunity
Friday, January 6, 2012
Broker/Dealer Services and Securities offered by BOSC,inc.,an SEC registered investment adviser,a registered broker/dealer,member FINRA/SIPC.SEC registration does not imply a certain level of skill or
training.insurance offered by BOSC Agency,Inc.,an affiliated agency. Investments and insurance arc not insured by FDiC,are not deposits or other obligations of,and arc not guaranteed by,any bank or bank
affiliate.investments arc subject to risks,including possible loss of principal amount invested.
/4 M
Introduction to BOSC, Inc.
0 BOK Financial Corporation (`BOKF"), a publicly traded
corporation (Symbol: `BOKF") with over 4,200 employees, is a
leading regional financial holding company, and its subsidiary, ! .�.•
BOSC, Inc. is a full-service registered broker/dealer that 0 , _,:..a..
provides brokerage/investment banking services, including ®oOKCENTER U`'
our Texas Public Finance and Municipal Sales, Trading and ra4'
Underwriting Departments. ..
❑ Through BOSC, Inc. and its affiliates, BOKF has 49 locations and
over 750 employees within the State of Texas, including 17 locations
within the Greater Houston Area.
.......::..:.....
... .: :::
COW RAI)O STATE BANK AND TRUST (i ifflOW�'(
i. '' RANK i II KANSAS CITY
/ �)SC, Inc. BANK()f OKIAHOMA
�� ®BANK OF ARf ZONA j
RANK OF ARKANSAS
1
OF ALBUQUERQUE i- MINK OF TF xAs
U BOKF, with $24.2 billion in assets and $2.7 billion in total capital as of June 30, 2011, has a long history of
financial success. In fact, BOKF is the largest eligible financial institution that elected NOT to participate
in the Treasury's Capital Purchase Program, an element of the Troubled Asset Relief Program
("TARP").
1
Comparison to Certain Other Regional Financial Services Firms —
Capital Position
❑ As shown below, our total equity capital compares quite favorably to various regional financial services
competitors, and our capital position has continued to increase and we have remained profitable.
Total Equity Capital Comparison
$3,000 I
$2,500'r
$2,000 II
$1500 01
111
$1,00011 ,
BOKI' Raymond James Piper Jaffray PlainsCapital Southwest Coastal Securites
Securities
Capital reported as of the respective company's most recent year end—BOKF is parent company of BOSC,Inc.and PlainsCapital is parent company of FirstSouthwest.
BOKF — History o f Total Capital BOKF — History of Net Income
$31) $250 i
S25 S24i
$200I$2A i?.41 I S213 S71t' S'Ill I
S223 I s $150
$1.95
$15 I sI16
$1.7, ,,I.v,
' I e MO$1DI
$50I
$Op$05 p I I I I I $oI
FY2006 FY2007 FY 2008 FY 2009 FY 2)10 FY2006 FY2)07 FY2006 FY2009 FY2010
2
wawa
Commitment to Municipal Finance
❑ The Public Finance Division of BOSC, Inc. has been providing financial services to municipal issuers for over 90
years (since 1919).
❑ Municipal fmance is an integral part of BOSC, Inc.'s business and as such, revenues relating to municipal products
comprise approximately 40% of BOSC, Inc.'s revenues, and the continued expansion of our municipal businesses
is among the top growth initiatives within the firm.
❑ In addition to our municipal finance services, additional examples of our platform's commitment to the municipal
business include:
• Our affiliate, Bank of Texas, directly investing over $200 million of Texas municipal debt obligations
through the purchase of"private placements" over the last 2 years;
• Our affiliate, Cavanal Hill, managing 2 tax-exempt bond funds with collective net assets of$362 million (as
of September 30, 2011); and
• The $250-plus million of other municipal debt obligations within the investment portfolio at BOKF.
❑ Unlike many of our national competitors, BOSC, Inc. has continued to expand its Texas municipal practice,
adding 13 seasoned professionals in the State of Texas over the last 5 years to further support the financing needs
of Texas municipal issuers.
❑ Additionally, we are proud to announce Ryan O'Hara, Frank Ildebrando and John Robuck have agreed to join the
BOSC, Inc. Municipal Finance Team in our Houston, Texas office.
3
'' Overview of Bond Underwriting Capabilities
❑ BOSC, Inc. has over 250 registered representatives that participate in providing investment banking services and
the distribution of fixed income securities throughout 18 offices in Texas, Arkansas, Arizona, Colorado, Kansas,
New Mexico, Oklahoma and Wisconsin.
❑ Over the last 2-years, BOSC, Inc.'s Texas sales representatives have been involved in the distribution of over $5
billion of securities in the primary and secondary market.
❑ 145 professionals are dedicated to the distribution of municipal bonds:
Summary of BOSC, Inc's Sales and
Trading Distribution Network
• 69 institutional brokers;
• 67 retail sales representatives; and . R.,d„
• 9 municipal traders/underwriters. • Intitutional 5ai*s
* Untlerwrit Irig f Ins!armorial
❑ Texas based underwriting/commitment desk.
• BOSC, Inc. has 2 experienced full-time Texas municipal bond oiguir
underwriters and a municipal bond trader located on our Texas
trading floor.
4
, r Historywith the City
f+;.�.
❑ BOSC, Inc. has a proven history of supporting the financing needs of the City of Pearland as we previously served
as the Senior Managing underwriter for the City's $5,400,000 Permanent Improvement Bonds, Series 2011 sold at
competitive sale. In addition, BOSC, Inc. has also previously served as an underwriter for the sales of the City's
$8,970,000 Water & Sewer System Revenue Refunding Bonds, Series 2010B, $14,040,000 Water & Sewer System
Revenue Bonds, Series 2010A, $12,145,000 Certificates of Obligation, Series 2009A and $28,395,000 Permanent
Improvement & Refunding Bonds, Series 2009.
, .LNt�kqNil* *lie
# . viral
$5,400,000.00 $8,970,000.00 $14,040,000.00 $12,145,000.00 $28,395,000.00
City of Pearland City of Pearland City of Pearland City of Pearland City of Pearland
Permanent Water&Sewer System Water&Sewer System Certificates of Permanent Improvement&
Improvement Bonds, Revenue Refunding Bonds, Revenue Bonds- Obligation, Refunding Bonds,
Series 2011 Series 2010B Series 2010A Series 2009A Series 2009
(Senior Manager— (Co-Manager— (Co-Manager— (Co-Manager— (Co-Manager—
Competitive Sale) Negotiated Sale) Negotiated Sale) Negotiated Sale) Negotiated Sale)
❑ In addition, BOSC, Inc. has also participated in the financings for Pearland I.S.D., participating in the bond sale to
convert and fix the interest rate on the District's $22,550,000 Unlimited Tax Schoolhouse Bonds in February 2011.
5
Texas Municipal Debt — An Investment in Texas Communities
p
❑ Over the last 24-months, our affiliate Bank of Texas, has completed over $200 million of private placements to
support the financing needs of Texas municipalities. It is one thing to "sell" a debt obligation of a Texas
municipality— It is another to directly "invest" in Texas communities.
Potential Benefits of Private Placement
Ss BANK OF TEXAS EBOSC Inc.
• Lower Interest Cost;
• Reduced Cost of Issuance;
• Enhanced Structuring Flexibility; and
• Proven, Simple and Efficient Process.
StagAILia
AtSi do
I q
6
4,M, BOSC, Inc. — Representative Listing of Recent Texas Municipal
moBirai Financings Completed
n..-
iftCI"1'l'UFALLF,N �� ld.nnnlw
�. � M
$12,000,000.01 $9,11 U,UW.W $51,150,000.W $22,300,000.00 $22,390,000.00
City of Allen City of Alvin City of Austin City of Austin City of Baytown
General Obligation Bonds, General Obligation Certificates of Obligation, Certificates of Obligation, General Obligation
Series 2010 Refunding Bonds, Series 2011 Series 2010 &Refunding Bonds,
Series 2011 Series 2011
11
.fal,
Brownsville Brownsville
- (4., -;:i.-) ..
,II /(i ,MM ,v,
$8,185,000.00 $6,640,00000 $8,650,000.00 $12,570,000.01 $10,830,000.00
City of Bedford City of Belaire City of Bellaire City of Brownsville City of Brownsville
General Obligation Refunding General Obligation General Obligation General Obligation Combination Tax and
&Improvement Bonds, Refunding Bonds, Refunding Bonds, Refundiig Bonds, Revenue Certificates of
Series 2011 Series 2011A Series201113 Series 2010 ()hli,satl.n,Scnes 2010
_- _- - .,
`,;of St_ /-.. <-'.,� .•>�.,, FORT WORTH
gv ifit_kD' '1f
�4; City of Copperas Cove DENTON � i
$5,915,000.00 $39,000,000.00 $10,845,00000 $137,895,0(0.00 $78,325,000.00
City of Buda City of Copperas Cove City of Denton Denton County City of Fort Worth
General Obligation Contract Revenue General Obligation Permanent Improvement Bonds, Drainage Utility System
Refunding Bonds, and limited Tax Bonds, Refunding&Improvement Series 2010A& Revenue Bonds,
Series 2010 Series 2011 Bonds,Series 2011 Taxable Series 2010B Series 2111 I
LOA slut Hark S
`r
GRAi :URY He1g t
�;.zr
$4,700,000.00 $15,215,000.00 $8,000,000.00 $67,325,000.00 $12,344,998.00
City of Granbury Grayson County City of Harker Heights Hays County Hays County
Utility System Junior College District Combination Tax and Revenue Combination Tax&Limited Unlimited Tax
Revenue Bonds, Consolidated Fund Revenue Certificates of Obligation, Pledge Revenue Certificates of Refunding Bonds,
Series 2012 Refunding,Series 2010 Series 2011 Obligation,Series 2010 Series 2010
4 4
BOSC, Inc. — Representative Listing of Recent Texas Municipal
Financings Completed (Continued)
* Fir, - �,
a 4 "�II
rfya�I �1 Di D' /, LLAOiIlCITY
$9,295,000.00 $31,400,000.00 $2,675,000.00 $10,000,00000 $36,270,000.00
City of Keller City of Killeen City of Lake Worth City of League City City of Leander
General Obligation Pass-Through Toll Revenue and General Obligation Combination Tax and Combination Tax and
Refunding Bonds, Limited Tax Bonds, Refunding Bonds, Revenue Certificates of Revenue Certificates of
Series 2)11 Series 2)11 Series 2011 Obligation,Series 2011) Obligation,Series 2012
x
rTh
McKINNEY Nt H ,.
$10,025,000.00 $5,455,000.00
$14,310,000.(10 North Richland Hills $60,800,000.00 $20,030,000.00
City of McKinney Tat&Waterworks&Sewer Orchard Cultural Ed. Cityof Pasadena
City of Leander Tax&Limited Pledge
General Obligation Waterworks&Sewer System(Limited Pledge) facilities Corporation General Obligation
Refunding Bonds, System Certificates of Revenue Certificates of Revenue Bonds Refunding Bonds,
Series 2012 Obligation,Series 2)10 Obligation,Series 2011 (Kimball Art foundation Series 2012
Project),Series 2010A&B
1
` �
' •"•'--- ''. - '420/ /111".....--
i
$23,010,000.00 $7,965,000.00 $7,800,000.00r $8090,000.00 $6,000,000.00
City of Pearland City of Richardson City of Round Rock City of San Marcos City of Sealy
Water and Sewer System Combination Tax and Revenue Hotel Occupancy Tax Combination Tax&Revenue Combination Tax and Revenue
Revalue Bonds,Series 2010A& Certificates of Obligation, Revenue Bonds, Certificates of Obligation, Certificates of Obligation,
Refunding Bonds,Series 2010B Series 2011 Series 2012 Series 21)11 Series 2010
•- 4
f ` SN_U :`` CC*
4
$116330,0 0.00
Southwest Higher Education
Authority inc $13,450,000.00 $5,745,000.00 $17,220,000.00 $14,500,000.00
Higher Education Revenue City of Temple City of Temple Texoma Area Solid City of Tomball
Bonds(Southern Methodist General Obligation Limed Tax Notes, Waste Authority Combination Tax&Revenue
University Project) Refunding Bonds, Series 2011 Regional Solid Waste Certificates of Obligation,
Series 2010 Series 201 IA Disposal Contract Revenue Series 2012
Refunding Bonds,Series 2010
7
8
4 Current Market Review — Interest Rates
The Bond Buyer 20-Bond Index -
A Tax-Exempt General Obligation Bond Yield Index
January 1, 1999 To The Present
6.25 - -
High = 6.09%
6.00
5.75
kfti
5.50
5.25 Average = 4.78% `
\dt:°\ t IA
�.�.. 5.00 II
1
4.75
4.50
4.25
4.00
Fixed interest rates have been volatile and14 IIIL
3.75 are currently within 0.01% of a historical low. LOW = 3.82%
Current = 3.83%
3.50 i
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
9
nlabCurrent Market Review — Interest Rate Curve
Comparison of Tax-Exempt Interest Rates - Municipal Market Data "AAA" Yield Curves
f
5.00°/o - 4.69% 4.71"/0
4.50% •
Interest rates on a 16-year bond
have declined by 1.30% since 4.11%
4.00% — January 5, 2011.
3.19% 3.49% 3.54%
3.00% 11 3.20%
2.81%
i
•
2.00% 1.74"l
1.87%
1.00%
0.37% 0.87% —• Yield Curve as of January 5, 2011 (One Year Ago)
0 2O% ~4--Current Yield Curve as of January 5, 2012
1-Year 5-Years 10-Years 16-Years 20-Years 25-Years 30-Years
to
nRefund Outstanding Bonds at Lower Interest Rate
❑ With municipal interest rates being within 0.01% of a historical low and interest rates on bonds maturing in 16
years declining by 1.30% since January 2011, the City has an opportunity to reduce its interest cost by refunding a
portion of its outstanding General Obligation Bonds (collectively, the "Bonds to be Refunded") at a lower interest
rate.
❑ Based upon current market conditions, the City's bonds maturing within the next 16-years produce a savings at
this time, as shown below.
Summary of Bonds to be Refunded
Principal Maturities
Amount To To Be Interest Redemption Redemption
Issue Outstandin I Be Refunded Refunded Rate Date Price
Permanent Improvement Bonds, Series $ 12,110,000 03/01/2016—23; 4.38% 03/01/2013 100.0%
2003 2028
Certificates of Ob '• .don, Series 2003 12,575,000 03/01/2014—23 4.11% 03/01/2013 100.0%
'Totals: $ 24,685,000 --- 4.29% ---
11
` ' Refund OutstandingBonds at Lower Interest Rate (Continued)
4.50...„,
❑ Savings Available
• Based upon current market conditions, the table below summarizes the savings potentially available to the
City. Please note, the savings are net of all costs associated with the refunding program.
I
Summary of Savings Available
Descri.tion Finding
Princi al Amount of Bonds to be Refunded $24,685,000
Interest Rate on the Bonds to be Refunded 4.29%
Interest Rate on the Refunding Bonds 2.55%
Escrow Yield 0.22%
Total Debt Service Savings $2,406,796
Average Annual Savings (i.e. Years 2012/13 —2027/28) (16-Years) 150,425
Present Value Debt Service Savings 1,943,503
Present Value Savings as a Percentage of the Principal Amount of
the Bonds to be Refunded 7.87%
0 )portunity Cost of Advance Refunding (i.e. "Ne_ative Arbitrage") $457,749
12
boom'``°f `` Refund Outstanding Bonds at Lower Interest Rate (Continued)
Comparison of Tax-Exempt Interest Rates -
Municipal Market Data "AAA" Yield Curves As Of
January 5, 2012 (Current) And The 10-Year Average
5.00 -
4.50 - - — —
•
+
4.00 - 1 Difference of 0.95%
3.50
3.00 t
Difference
2.50 of 1.53% Interest rates for bonds maturing within
the next 16-years, which correlates with
2.00 the time period of the City's bonds that
~" are cost-effective to refund at a lower
1.50 interest rate, are currently an average of
1.53%below the 10-year average.
1.00 —1
0.50 ♦—Current Yield Curve-January 5,2012 _
—41-10-Year Average Yield Curve
0.00 ...4....r T r...+"•T"..T..." T...T.••?•"'?"'.,....5
.-- N M 7 M •'' N CO ON O N M 7 M V' N 00 ON O N M V1 ' N CO fib O
N N N N N N N N N N M
>4 >4 >4 >4 r >4 >4
13
Refund Outstanding Bonds at Lower Interest Rate (Continued)
❑ Opportunity Cost of Advance Refunding— "Negative Arbitrage"
■ Since investment rates on United States Treasury obligations are significantly lower than the interest rate on
the Refunding Bonds, a refunding currently generates approximately $457,749 less in investment income
than is permitted under Federal Tax Law to repay the Bonds to be Refunded until their respective
redemption dates (i.e. "Negative Arbitrage").
• "Negative Arbitrage" does not change the savings currently available as summarized within the
aforementioned table as it is not an "actual" cost—it is solely an opportunity cost.
• Being an opportunity cost, to evaluate an acceptable amount of "Negative Arbitrage" within a refunding
program, current and future interest rates must be considered.
❖ If the thought is interest rates will increase by more than 0.25% at the time an "advance refunding"
may be completed without any "Negative Arbitrage," the City's savings would be higher by
completing an "advance refunding" at this time.
❖ On the other hand, if the thought is interest rates will not increase by more than 0.25%, it is more
cost-effective for the City to wait and complete the refunding at another time.
14
gioioa BOSC:, Inc.'s Texas Municipal Finance Team
William J.Gumbert Rick Menchaca
Managing Director,Director of Texas Public Finance .r. Investment Banker,Texas Public Finance
AIL
`' BOSC, Inc. BOSC, Inc.
333 West Campbell Road,Suite 350 I Richardson,Texas 75080 333 West Campbell Road,Suite 350 I Richardson,Texas 75080
A E-Mail:bgumbert@boscinc.com E-Mail:rmenchaca@boscinc.com
Direct:214.576.0880 I Mobile:214.212.3153 I Fax:214.576.0890 Direct:512.392.8555 I Mobile:512.395.5550 I Fax:512.392.4833
-„ SecurR.anered by BUSC,bx'.,Regstered Invomun Mars,a regmlered.Dice/pea.,venter f MRNSIPC Ssurt.offered by BOX,Nis.,R.y(naed Investment Advisor,•req.,.&Dicer/Dula.Harter nIMM/sIRC
AI
''. - Mark Pryce Joshua M.McLaughlin
Director,Municipal Institutional Underwriting - Investment Banker,Texas Public Finance
1 0 BOSC,Inc. ' BOSC, Inc.
k a
333 West Campbell Road,Suite 350 I Richardson,Texas 75080 '' 333 West Campbell Road,Suite 350 I Richardson,Texas 75080
E-Mail:mpryce@boscinc.com E-Mail:jmdaughlin@boscinc.com
Direct:214.576.0872 I Fax:214.576.0890 Direct:214.576.0878 I Mobile:972.897.0503 I Fax:214.576.0890
Ssurvla onsed by BOSO lec..Regsteed ba.nrl AENsor,a reere,.d.Dice/DeMe,Mn:te fllW LrC Securities offered by BOAC,Irc.,Registered Investment M*,a registered Broker/Dealer,Me ma FIMNSIVC
Mike Jolly Dr.Cathy Bryce
Investment Banker,Texas Public Finance �" Investment Banker,Texas Public finance
t QOSC, Inc.rl ; BOSC, Inc.
333 West Campbell Road,Suite 350 Richardson,Texas 75080 333 West Campbell Road,Suite 350 I Richardson,Texas 75080
E-Mail:mjolly@boscinc.com E-Mail:cbryce@boscinc.com
Direct:512.868.1980 Mobile:512.751.0479 Fax:214.576.0890 Mobile:214.477.5972 Fax:214.576.0890
��' �' SecurlUes oared by BOX,bb.,Regbeered Usaenvt Mrner,a rev Weren bakerlfkJe.Mer:ter FINPNSIPC secaRles affaed by BOX,br.,Reg Weret Imdnime MHsar,a lgscered Biakn/Dub,Manger FIIIRNSIVC
. j Alison M.Long Bradley Johnson
7`3t' tin,
Associate,Texas Public Finance (411114 Analyst,Texas Public Finance
'Al
':. ' #w +� BOSC, Inc. `±, [3OSC, Inc.
lit
�`;: 333 West Campbell Road,Suite 350 Richardson,Texas 75080 333 West Campbell Road,Suite 350 I Richardson,Texas 75080
`>-, E-Mail:amabry@boscinc.com s? E-Mail:bradley.johnson@boscinc.com
Direct:214.576.0881 I Mobile:254.744.4555 I Fax:214.576.0890 Direct:214.576.0884 I Mobile:214.499.6511 I Fax:214.576.0890
Wleed by BOX,No.,R cS.,.d Inrstment AErbs,•reglseaed Brorer/Deals,Nember FlNM/sIPC r� Scowl.oared br BOSC,Inc.,Rrystred Intern[Mbwr,a revs..BeDice/Dealer,Member flMVNAK
15