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R2001-0174 12-10-01 RESOLUTION NO. R200'1-174 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO ENTER INTO A CONTRACT WITH RBC DAIN RAUSCHER, INC. FOR INVESTMENT SERVICES ASSOCIATED WITH THE SELLING OF GENERAL OBLIGATION, CERTIFICATES OF OBLIGATION AND REVENUE BONDS. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That certain contract by and between the City of Pearland and RBC Dain Rauscher, 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 2. That the City Manager or his designee is hereby authorized to execute and the City Secretary to attest a contract with RBC Dain Rauscher, Inc. for investment services associated with the selling of General Obligation, Certificates of Obligation and Revenue Bonds. PASSED, APPROVED and ADOPTED thisthe 10 dayof December , A.D., 2001. TOM REID MAYOR CATTEST: ,/"} ~ SEGRETARY ~/ APPROVED AS TO FORM: DARRIN M. COKER CITY ATTORNEY INVE STMIiNT $ ERVICIlS INVIiSTMI;NT BANKING FINANCIAL ADVISORY AGREEMENT NOVEMBER 7, 2001 The City of Pearland 3519 Liberty Drive Pearland, Texas 77704 Ladies and Genflemen: 1. We understand that the City of Pearland (the "Issuer') will have under consideration from time to time the authorization and issuance of obligations evidencing indebtedness (all such obligations shall be referred to as "Obligations') and that in connection with the issuance of such Obligations you hereby agree to retain RBC Dain Rauscher Inc. ('~d3CDRI') to perform professional services as your financial advisor in accordance with the terms of this financial advisory agreement ("Agreement'). This Agreement shall apply to all Obligations that may be authorized and/or issued or otherwise created or assumed from time to time during the period in which this Agreement is effective. 2. To fulfill these duties as financial advisor, we agree to perform the following: (a) We will conduct a review of the financial resources of the Issuer to determine the extent of the borrowing capacity of the Issuer. This review will include an analysis of (I) the existing debt structure in relation to sources of income projected by the Issuer which may be pledged to secure payment of the Obligations to be issued, and (2) where appropriate, the trends (as estimated by representatives of the Issuer) of assessed valuation, taxing power, and future financing needs. In the event revenues of existing or projected facilities operated by the Issuer are to be pledged to repayment of the Obligations then under consideration, the survey will take into account any outstanding indebtedness payable from the revenues thereof, additional revenues to be available from any proposed rate increases and additional revenues, as projected by consulting engineers employed by the Issuer, if any resulting from improvements to be financed by the Obligations under consideration. We will also take into account future financing needs and operations as projected by the Issuer's staff and consulting engineers or other experts, if any, employed by the Issuer. 00) On the basis of the information and estimates developed through our review described above and other information that we consider appropriate, we will submit written recommendations with respect to a plan of finance for the issuance of Obligations that will include (1) the date of issue, (2) interest structure (fixed or variable), (3) interest payment dates, (4) a schedule of maturities, (5) early redemption options, (6) security provisions, and (7) other matters that we consider appropriate to increase the marketability of the Obligations. (c) In order to assist you in selecting a date for the sale of the Obligations, we will advise you of current conditions h, the relevant debt market, upcoming bond issues, and other general information and economic data which might reasonably be expected to influence interest rates or bidding conditions. First CityTower (713) 651-3346 Dain Rauscher Incorporated Suite 400 Fax (713) 651-3347 Member NYSE/SIPC 1001 Fannin Toll Frcc (800) 727-7391 Houston,TX 77002 (d) We understand that you have retained or expect to retain a firm of recognized municipal bond attorneys, whose fees will be paid by you, who will prepare the proceedings, who will provide advice concerning the steps necessary to be taken to issue the Obligations, and who will issue an opinion (in a form standard for the particular type of financing) approving the legality of the Obligations and tax exemption of the interest paid thereon, lin addition, one or more of the bond attorneys, your counsel or counsel to the underwriters of the Obligations will issue an opinion to the effect that the disclosure document does not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading (subject to market exceptions).] We will maintain liaison with the bond attorneys and other attorneys to the transaction and shall assist in all financial advisory aspects involved in the preparation of appropriate legal proceeding and documents. (e) We will assist in the preparation of the Issuer's disclosure documents including the Preliminary Official Statement and the Official Statement. (~ In connection with a competitive sale, we will: i. coordinate the preparation of the Official Notice of Sale, the Uniform Bid Form (containing provisions recognized by the municipal securities industry as being consistent with the securities offered for sale) and other such documents which you may request or deem appropriate; ii. submit ali such documents for examination, approval, and certification by appropriate officials, employees, and agents of the Issuer, including bond attorneys; iff. coordinate delivery of these documents to a list of prospective bidders; iv. where appropriate, we will organize investor meetings; v. coordinate the receipt of bids; vi. advise as to the best bid, including acceptance or rejection of the best bid; vii. if a bid is accepted, coordinate the delivery of and payment for the Obligations; viii. assist in verification of final closing figures; ix. provide copies of documents to the purchaser of the Obligations in accordance with the terms of the Official Notice of Sale and the Uniform Bid Form. (g) If it is necessary to hold an election to authorize the Obligations, we will assist in coordinating the assembly and transmittal to the bond attorneys of information provided by or on behalf of the Issuer that is requested by the bond attorneys in connection xvith the preparation of the documents evidencing the legal proceedings that are necessary to conduct the election. (h) In the event formal verification by an independent auditor of any calculations incident to the Obligations is required, we will make arrangements for such services. (i) We will make recommendations to the Issuer on the matter of credit rating(s) for the proposed issue of Obligations. Upon the request of the Issuer, we will coordinate the preparation of information to be submitted to any rating agency. In those cases where it is appropriate to make a formal presentation of such information to any rating agency, we will arrange for such presentation. 0) We will make recommendations to the Issuer as to the advisability of obtaining municipal bond insurance or other credit enhancement, or qualifications for such insurance or enhancement, for the Obligations and, when directed by the Issuer, we will coordinate the preparation of such information as, in our opinion, is required for submission to the appropriate company, institution or institutions. In those cases where the advisability of personal presentation of information to the appropriate company, institution or institutions, may be indicated, we will arrange for such personal presentations. The premiums for said insurance, if deemed advisable, will be paid by the Issuer if purchased direcdy or the underwriters if purchased as a bidder's option. (k) We will attend any and all meetings of governing body of the Issuer, its staff, representatives or committees as requested at all times when we may be of assistance or service and the subject of financing is to be discussed. (1) After dosing, we will deliver to the Issuer and the paying agent(s) definitive debt records, including a schedule of annual debt service requirements on the Obligations. 3. While this Agreement is in effect, the Issuer agrees (upon our request) to provide or cause to be provided to us information rehting to the Issuer, the security for the Obligations, and other matters that we consider appropriate to enable us to perform our duties under this Agreement. With respect to all information provided by or on behalf of the Issuer to us under this Agreement, the Issuer agrees to obtain certifications (in a form reasonably satisfactory to us) from appropriate representatives of the Issuer as to the accuracy of such information and to use its best efforts to obtain certifications (in a form reasonably satisfactory to us) from representatives of other parties than the Issuer, where appropriate. The Issuer acknowledges that we shall be entifled to rely on the accuracy and completeness of all information provided by or on behalf of the Issuer. 4. The Issuer acknowledges that it is responsible for the contents of its disclosure document and is subject to and may be held liable under federal or state securities laws for violations thereof, including misleading or incomplete disclosure. To the extent permissible by law, the Issuer agrees to indemnify and hold us harmless against any losses, claims, damages or liabilities, to which we may become subject under federal or state securities laws or regulation, at common law or other, vise (including in setflement of any litigation if such setflement is effected with the written consent of the Issuer), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon omission or alleged omission to state in the disclosure document a material fact required to be stated therein or necessary to make the statements therein not misleading; and will reimburse us for any legal or other expenses reasonably incurred by us in connection with investigating or defending any such loss, claim, damage, liability or action. 5. All actions taken and all recommendations made by us in performing our duties under this Agreement will be based on our best professional judgment with the goal of obtaining the most favorable terms for the Issuer and is not a guarantee of result; provided that we agree to indemnify and hold the Issuer harmless against any losses, claims, damages or liabilities to which you may become subject by reason of, or as a result of our gross negligence or willful misconduct; provided further that such losses, claims, damages or liabilities are not attributable to the Issuer's own negligence or misconduct in carrying out its duties. 6. In connection with Rule G-23 of the Municipal Securities Rulemaking Board, the Issuer agrees that RBC Dain Rauscher Inc. may submit a bid (either independenfly or as a member of a syndicate) for any issue of Obligations when offered for sale at competitive bid and prior to submitting any such bid we shall obtain the Issuer's written consent to bid on the particular issue of Obligations. 7. In consideration for the services rendered by us pursuant to this Agreement in connection with the authorization, issuance, and sale of Obligations, the Issuer agrees that our fee wi[l be computed as shown on the "Fee Schedule" attached hereto. Our fee and reimbursable expenses shall become due and payable simultaneously with the delivery of the Obligations to be the Purchaser except that our reimbursable expenses shall be payable monthly upon our submission of a written statement. Our fees do not include and we will be entifled to be reimbursed from the Issuer for any actual "unt-of-pocket" expenses incurred in connection with the provision of such services, including, but not limited to, reasonable travel expenses ur any other expenses incurred on behalf of the Issuer. 8. At the request of the Issuer, we will provide our assistance as to the investment of certain proceeds from the sale of the Obligations. However, it is acknowledged that the purchase and sale of securities or other investments whether such funds are for construction purposes, reserve fund deposits, for ultimate use in defeasing outstanding obligations of the Issuer, or represent an investment for any funds of the Issuer, do not constitute the rendering of financial advisory or investment advisory services and are not subiect to the terms of this Agreement. We will charge our normal and customary commission for such purchase or sale transaction, which information will be provided to the Issuer under a separate letter. 9. Special Conditions: In addition to the terms and obligations herein contained, this Agreement is subject to the following special conditions: 10. This Agreement shall be for a period of thirty six months from its date; however, this Agreement may be terminated by either party upon thirty days written notice. 11. This Agreement is submitted hi duplicate originals. It constitutes the entire financial advisory agreement of the parties and may be amended only by a writing signed by the Issuer and RBCDRI. The Issuer's acceptance of this Agreement will occur upon proper signature by the authorized representative(s) of the Issuer and the return of one executed copy to RBCDRL Respectfully submitted, RBC DAIN RAUSCHER INC. By ~~'~ ~ Name /-~*a~,,~ -~, .._r'~,~b ~-.~,-~.,~-' Tire Managing Director Date November 1, 2001 ACCEPTANCE CITY OF PEARLAND, TEXAS Name Bill Eisen Tide City Mana§er FEE SCHEDULE In consideration for the services rendered by RBC Dain Rauscher Inc., the Issuer agrees that our fee for each issue of Obligations will be as follows: STANDARD FEE SCHEDULE More And Not 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 * Fees for refunding Certificates are 125% of the fee quote above. Fees for advance refunding Certificates and/or other Obligations involving escrow Agreements, will be the fee schedule set out above plus 25 percent, and, in addition to our Financial Advisory fee, we will charge a computer fee to be negotiated on a case by case basis. RBC Dain Rauscher Inc. will bill the Issuer at Closing for each issue of Obligations a net amount which will include a fee calculated on the above schedule as well as costs and expenses, where applicable, incurred on behalf of the Issuer. Such expenses incurred could include preparation, printing, and distribution of the Notice of Sale, Official Statement, rating fees and travel expenses related to rating, if any, printing of the Obligations, and all appropriate costs and expenses associated with the closing and delivery of the Obligations.