Resolution 2018-30137RESOLUTION NO.
2018 -30137
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER,
PURSUANT TO REQUEST FOR QUALIFICATIONS NO. 2017 - 163 -WG, FOR
UNDERWRITER SERVICES; AUTHORIZING THE ADMINISTRATION TO ENTER INTO
NEGOTIATIONS WITH MORGAN STANLEY & CO. LLC; MERRILL LYNCH, PIERCE,
FENNER & SMITH INC.; J.P. MORGAN SECURITIES LLC; CITIGROUP GLOBAL MARKETS
INC.; WELLS FARGO BANK, N.A.; RAYMOND JAMES & ASSOCIATES, INC.; JEFFERIES
LLC; GOLDMAN SACHS & CO. LLC; PNC CAPITAL MARKETS LLC; ESTRADA HINOJOSA
& COMPANY, INC.; STIFEL, NICOLAUS & COMPANY, INC.; LOOP CAPITAL MARKETS
LLC; HILLTOP SECURITIES INC.; SIEBERT, CISNEROS, SHANK & CO., L.L.C.; AND
FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT
WITH EACH OF THE FOREGOING PROPOSERS, UPON CONCLUSION OF SUCCESSFUL
NEGOTIATIONS BY THE ADMINISTRATION.
WHEREAS, on June 7, 2017, the Mayor and City Commission authorized the issuance
of Request for Qualifications (RFQ) 2017- 163 -WG for Underwriter Services; and
WHEREAS, on June 8, 2017, RFQ No. 2017 - 163 -WG for Underwriter Services (the
RFQ) was issued; and
WHEREAS, on July 13, 2017, the City received proposals from the following nineteen
(19) firms: W Its Fargo Bank, N.A.; Siebert, Cisneros, Shank & Co., L.L.C.; Academy Securities,
Inc.; Loop Capital Markets LLC; Neighborly Corporation; Estrada Hinojosa & Company, Inc.;.
Jefferies LLC; Suntrust Robinson Humphrey, Inc.; Goldman Sachs & Co. LLC; Hilltop Securities
Inc.; Merrill Lynch, Pierce, Fenner & Smith Inc.; Stifel, Nicolaus & Company, Inc.; Morgan
Stanley & Co. LLC; Raymond James & Associates, Inc.; PNC Capital Markets LLC; Citigroup
Global Markets Inc.; J.P. Morgan Securities LLC; Janney Montgomery Scott LLC; Mischler
Financial Group, Inc.; and
WHEREAS, the Evaluation Committee appointed by the City Manager pursuant to LTC#
405 -2017 convened on November 8, 2017, to consider the responsive proposals received; and
WHEREAS, the Committee was provided an overview of the project, information relative
to the City's Cone of Silence Ordinance and the Government Sunshine Law, general information
on the scope of services and a copy of each proposal; and
WHEREAS, the Committee was instructed to score and rank each proposal pursuant to
the evaluation criteria established in the RFQ; and
WHEREAS, the evaluation process resulted in the ranking of proposers as follows:
Morgan Stanley & Co. LLC, as the top ranked proposer; Merrill Lynch, Pierce, Fenner & Smith
Inc., JP Morgan Securities LLC, and Citigroup Global Markets Inc., tied as the second ranked
proposers; Wells Fargo Bank, N.A., as the fifth ranked proposer; Raymond James & Associates,
Inc., as the sixth ranked proposer; Jefferies LLC, as the seventh ranked proposer; Goldman
Sachs & Co., LLC, as the eighth ranked proposer; PNC Capital Markets LLC and Estrada
Hinojosa & Company, Inc., as the ninth ranked proposers; Stifel, Nicolaus & Company, Inc., as
the eleventh ranked proposer; Loop Capital Markets LLC, as the twelfth ranked proposer; Hilltop
Securities Inc., as the thirteenth ranked proposer; and Siebert, Cisneros, Shank & Co., L.L.C.,
as the fourteenth ranked proposer; and
WHEREAS, after reviewing all of the submissions and the Evaluation Committee's
rankings, the City Manager exercised his due diligence and is recommending that the
Administration by authorized to enter into negotiations with Morgan Stanley & Co. LLC; Merrill
Lynch, Pierce, Fenner & Smith Inc.; JP Morgan Securities LLC; Citigroup Global Markets Inc.;
Wells Fargo Bank, N.A.; Raymond James & Associates, Inc.; Jefferies LLC; Goldman Sachs &
Co., LLC; PNC Capital Markets LLC; Estrada Hinojosa & Company, Inc.; Stifel, Nicolaus &
Company, Inc.; Loop Capital Markets LLC; Hilltop Securities Inc.; and Siebert, Cisneros, Shank
& Co., L.L.C., to establish a pool of underwriters to provide underwriting services to the City for
the issuance of various municipal bonds.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission accept the recommendation of the —City Manager-, p- ur_suant to Reque_st for
Qualifications No. 2017- 163 -WG, for Underwriter Services; authorizing the Administration to
enter into negotiations with Morgan Stanley & Co. LLC, Merrill Lynch, Pierce, Fenner & Smith
Inc., JP Morgan Securities LLC, Citigroup Global Markets Inc., Wells Fargo Bank, N.A.,
Raymond James & Associates, Inc., Jefferies LLC, Goldman Sachs & Co., LLC, PNC Capital
Markets LLC, Estrada Hinojosa & Company, Inc., Stifel, Nicolaus & Company, Inc., Loop Capital
Markets LLC, Hilltop Securities Inc., and Siebert, Cisneros, Shank & Co., L.L.C., and further
authorizing the Mayor and City Clerk to execute an agreement with each of the foregoing
proposers, upon conclusion of successful negotiations by the Administration.
PASSED AND ADOPTED this 17
ATTEST:
day of anuar 2018.
RAFA L E. GRANA
T :\AGENDA \2018 \01 January\
DAN GELBER, MAYOR
s \RFQ2017- 163 -WG- RESO v2 11 17 17.doc
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Resolutions - C7 H
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Jimmy L. Morales, City Manager
DATE: January 17, 2018
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY
MANAGER, PURSUANT TO REQUEST FOR QUALIFICATIONS NO. 2017- 163 -WG,
FOR UNDERWRITER SERVICES; AUTHORIZING THE ADMINISTRATION TO
ENTER INTO NEGOTIATIONS WITH MORGAN STANLEY & CO. LLC; MERRILL
LYNCH, PIERCE, FENNER & SMITH INC.; J.P. MORGAN SECURITIES LLC;
CITIGROUP GLOBAL MARKETS INC.; WELLS FARGO BANK, N.A.; RAYMOND
JAMES & ASSOCIATES, INC.; JEFFERIES LLC; GOLDMAN SACHS & CO. LLC;
PNC CAPITAL MARKETS LLC; ESTRADA HINOJOSA & COMPANY, INC.; STIFEL,
NICOLAUS & COMPANY, INC.; LOOP CAPITAL MARKETS LLC; HILLTOP
SECURITIES INC.; SIEBERT, CISNEROS, SHANK & CO., L.L.C.; AND FURTHER
AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT
WITH EACH OF THE FOREGOING PROPOSERS, UPON CONCLUSION OF
SUCCESSFUL NEGOTIATIONS BY THE ADMINISTRATION.
RECOMMENDATION
Adopt the Resolution.
ANALYSIS
On April 14, 2010, the Mayor and City Commission accepted the City Manager's recommendation to
award RFP 15 -09 -10 for Underwriter Services and as a result created a pool of fifteen (15) firms to
provide underwriting services on an as needed basis. The award is valid through April 13, 2018.
To seek proposals for a replacement pool of underwriters, on June 7, 2017, the Mayor and City
Commission authorized the issuance of Request for Qualifications (RFQ) 2017- 163 -WG for
Underwriter Services. The RFQ sought statements of qualifications from underwriting firms to
establish a team of underwriters to provide Underwriter Services to the City for the issuance of
various municipal bonds.
The firm(s) selected would participate in future bond issues by assisting the City and its financial
advisor with development of financing plans, preparation of preliminary and final official statements,
bond resolution, and pricing, marketing, underwriting and selling the bonds to investors.
The City, at its sole discretion, may select one or more firms to serve as senior manager or co-
manager from the underwriting team for each of its future bond financings. The City Manager will
make a recommendation to the City Commission for the selection of one or more underwriters from
the pool to provide services on a particular financing based on the characteristics of the financing
Page 236 of 923
and such merits as solely determined by the City.
RFQ PROCESS
On June 8, 2017, RFQ No. 2017- 163 -WG for Underwriter Services was issued. RFQ responses
were received on July 13, 2017. The Procurement Department issued solicitation notices to 608
firms utilizing www.publicpurchase.com. Fifty three (53) prospective proposers accessed the
advertised solicitation. The City received proposals from the following nineteen (19) firms: Wells
Fargo Bank, N.A., Siebert, Cisneros, Shank & Co., L.L.C., Academy Securities, Inc., Loop Capital
Markets LLC, Neighborly Corporation, Estrada Hinojosa & Company, Inc., Jefferies LLC, Suntrust
Robinson Humphrey, Inc., Goldman Sachs & Co. LLC, Hilltop Securities Inc., Merrill Lynch, Pierce,
Fenner & Smith Inc., Stifel, Nicolaus & Company, Inc., Morgan Stanley & Co. LLC, Raymond James
& Associates, Inc., PNC Capital Markets LLC, Citigroup Global Markets Inc., J.P. Morgan Securities
LLC, Janney Montgomery Scott LLC, Mischler Financial Group, Inc.
The Evaluation Committee appointed by the City Manager, pursuant to LTC# 405 -2017, convened
on November 8, 2017, to consider the responsive proposals received. The Committee was
comprised of Natasha Nicholson, Senior Management and Budget Analyst, Public Works
Administration, City of Miami Beach, Vivian Parks, re sa ury Manager, Finance Department, City of
Miami Beach, Julie Santamaria, Financial Advisor to the City of Miami Beach and John Woodruff,
CFO, Finance Department.
The Committee was provided an overview of the project, information relative to the City's Cone of
Silence Ordinance and the Government Sunshine Law. The Committee was also provided with
general information on the scope of services and a copy of each proposal. The Committee was
instructed to score and rank each proposal pursuant to the evaluation criteria established in the
RFQ.
The evaluation process resulted in the ranking of proposers indicated in Attachment A. A summary of
each top- ranked firm is also attached.
CONCLUSION
The City received a robust response to the RFQ, with 19 firms responding. While it is in the City's
best interest to maintain a relatively large pool of potential underwriters to assure that the City always
has access to top firms for its bond issuances, it is unlikely that the City will need 19 firms. I have
reviewed the proposals submitted and the results of the Evaluation Committee process. In doing so, I
note that many of the firms have extensive experience in public sector bonds. I also note that, when
considering the results of the Evaluation Committee, the top 14 firms received an average score
ranging from 98 to 72.5 of the available 100 points that could be assigned by the Evaluation
Committee. The firms receiving the lowest scores received an average score ranging from 60.75 to
51.25.
As previously stated, this award recommendation is a prequalification of firms for future bond
issuances. At the time the City contemplates issuing a bond, a recommendation will be presented to
the City Commission, based on the analysis provided by City's CFO and financial advisor, of the
most qualified firms for a particular bond issuance. Again, for this reason, it is in the City's best
interest to maintain a relatively large pool of qualified potential underwriters. For this reason, I believe
it would be in the City's best interest to prequalify the top 14 firms receiving an average score higher
than 72 points (out of a possible 100) based on the evaluation criteria set forth in the RFQ.
Accordingly, I recommend that the Mayor and City Commission approve the resolution authorizing
the Administration to establish a pool of underwriters to provide underwriting services to the City for
the issuance of various municipal bonds that includes Morgan Stanley & Co. LLC, Merrill Lynch,
Page 237 of 923
Pierce, Fenner & Smith Inc., J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Wells
Fargo Bank, N.A., Raymond James & Associates, Inc., Jefferies LLC, Goldman Sachs & Co. LLC,
PNC Capital Markets LLC, Estrada Hinojosa & Company, Inc., Stifel, Nicolaus & Company, Inc.,
Loop Capital Markets LLC, Hilltop Securities Inc., and Siebert, Cisneros, Shank & Co., L.L.C.
KEY INTENDED OUTCOMES SUPPORTED
Ensure Expenditure Trends Are Sustainable Over The Long Term
FINANCIAL INFORMATION
The cost of the related services, determined upon successful negotiations, are subject to funds
availability approved through the City's budgeting process. Grant funding will not be utilized for this
project.
Legislative Tracking
Finance /Procurement
ATTACHMENTS:
Description
D Attachment A
D Underwriters Biographies -- Provided by Firms in proposal package
o Resolution
Page 238 of 923
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Page 239 of 923
Below are biographies of respective firms as provided in their proposal submissions:
Morgan Stanley & Co. LLC
Morgan Stanley is a recognized leader in negotiated municipal financings and consistently ranks in the
top underwriters of municipal debt nationally. Since January 1, 2015 Morgan Stanley ranks #4
nationally in senior- managed negotiated underwritings for municipal issuers. Morgan Stanley and
members of the finance team assigned to the City have experience with credits that are relevant to the
City's debt portfolio and will leverage this experience to successfully execute any of the City's future
financings One of Morgan Stanley's biggest assets is their distribution network, which provides the City
access to the deepest and broadest network of investors of any bank in the industry.
Merrill Lynch, Pierce, Fenner & Smith Inc.
BofAML has been the #1 underwriter of municipal bonds in each of the past five years. They believe
their firm's commitment to this critical sector sets them apart from their competitors. They are also
ranked #1 for Florida municipal financings during that same time period. This market leadership
provides- their- fir -m- substantial - recent and relevant experience-that-they-would-use-as-leverage-on-the
City's behalf.
JP Morgan Securities LLC.
J.P. Morgan Chase is a large global financial institution that services a multitude of clients throughout
the world. The sheer size of their firm (with over $255 billion of total capital) allows them to have the
capital strength and ability to commit capital in support of their clients' financings, regardless of size.
Their firm regularly deploys its balance sheet to provide smooth market access and attractive pricing,
even in the most distressed market environments. In addition to this large underwriting capacity, they
also use their capital to provide access to credit for their municipal clients. In total they provide $17
billion of credit to municipal clients' throughout the country, including over $769 million committed to
issuers in the State of Florida.
Citigroup Global Markets, Inc.
Over the past two decades, Citi has established itself as the preeminent underwriter of municipal
securities. The key elements in their success relevant to the City are their (i) leadership position in and
commitment to municipal finance, (ii) experience nationally and in Florida and (iii) record of
performance in the distribution of tax - exempt bonds to all investor segments. These factors make Citi
ideally suited to continue to serve as a member of the City's bond underwriting team. Citi is the
national leader in municipal finance having ranked as the #1 ranked senior manager of negotiated
municipal bonds in 17 of the past 23 years, including 2017 year -to -date; Citi is the #1 ranked negotiated
underwriter of Florida tax - exempt transactions since 2015, senior managing 45 transactions totaling
$3.55 billion, representing a market share of 15.3% market share for the State.
Wells Fargo Bank, N.A. Municipal Products Group
Wells Fargo is one of the best capitalized institutions in the nation with over $157 billion of total capital
as of March 31, 2017, and one of the strongest institutions in the nation with credit ratings of Aal from
Moody's, AA- from S &P, and AA from Fitch. Their strong ratings, and exceptional capital position have
made them a powerful underwriter, and a prominent credit provider for municipal issuers across the
country. As further indication of Wells Fargo's dedication and support for the municipal market, Wells
Fargo held approximately $53.1 billion of municipal bonds on its balance sheet as of December 2016.
Page 240 of 923
Raymond James & Associates, Inc.
Raymond James is proud to be the only major financial services firm founded and headquartered in
Florida, with their global headquarters in St. Petersburg. The Firm currently maintains 289 offices in
Florida - including their St. Petersburg headquarters. Their 1,198 retail advisors manage 294,743 client
accounts for Floridians totaling more than $74 billion. Raymond James has proven its local commitment
in that they have 20 retail offices with 84 advisors in Miami -Dade County, including an office in the City
of Miami Beach, which maintain 12,310 accounts with assets under management of $4.86 billion.
Raymond James has the ability to not only reach local retail investors through its established retail
network, but also to utilize its strong community presence and deep local knowledge to ensure retail
investors are fully educated on the City's financings.
Jeffries LLC
Jeffries has established a strong nationally recognized public finance practice. They are a true
investment bank competing solely on their ideas, distribution, and pricing. Jeffries is in the underwriting
pools of all top ten municipal bond issuers. Jeffries has gained the confidence of many issuers across
the nation - and - their clients - have - -benefited from their proactive - approach - in- presenting - and - executing
value -added ideas that have lowered their costs of financing and resulted in debt service savings.
Jeffries has nearly $11 billion in capital and dedicates over $1 billion to the municipal market.
Goldman Sachs & Co. LLC
Goldman Sachs has a strong a strong presence in the State of Florida. They're strong capital position
and credit profile, enable them to structure and lead innovative financings. The firm has a track record
of success in marketing, selling, and trading bonds for their clients. Their financial strength allows them
the flexibility to underwrite bonds for their clients. Since 2015, they have served as senior manager
over $1 billion of municipal debt issuance in the State, and co- manager on over $2 billion. This
experience includes numerous state and local -level credits across the State.
PNC Capital Markets LLC
PNCCM is a leading underwriter in the public finance market. Since 2012, PNCCM's extensive public
finance experience has included serving as senior or sole manager on 1,175 issues totaling more than
$21 billion in par amount (excluding private placements). In 2016, PNCCM ranked 13th as senior
manager for negotiated municipal underwriting within the PNC Footprint, senior managing 107
negotiated transactions totaling in excess of $4.0 billion in aggregate par. PNCCM is strongly
committed to the state of Florida (the "State "). PNC employs 2,400 people statewide (with four Public
Finance employees) and maintains 193 branches and 420 ATMs in Florida. PNC has developed a
relationship with the City of Miami Beach and over the past several years PNC's finance professionals
have become acutely familiar with the City's strengths and challenges.
Estrada Hinosa & Company, Inc..
Estrada Hinojosa's 25 years of credentials to validate the Firm's technical expertise and merit their
continued participation in the City's underwriting team. Their Financing Team is experienced with Miami
Beach and specialized in providing the investment banking services requested in this RFQ. They have
a Miami -Dade presence and providing timely access to the lead bankers and principals, maximizing the
firm's resources, capital and manpower. Estrada Hinojosa has participated as an underwriter in over
3,126 transactions totaling over $320 billion in par amount. The Firm has been involved in 226 Florida
financings, representing over $31 billion in bonds issued. The Firm has assisted some of the largest
cities as well as the smallest throughout the nation.
Stifel, Nicolaus & Company, Inc.
Stifel began as a single office in St. Louis in 1890 and today is a full service investment bank with 396
offices and nearly 7,500 employees worldwide. Stifel brings deep expertise to providing financial
Page 241 of 923
services to an array of clients, including governments, individuals and private businesses. At Stifel, their
people make the difference, as their financial professionals respect the importance of relationships built
on trust and demonstrated value. Stifel ranked as the top public finance firm nationally each year since
2010 based on the number of senior managed negotiated transactions executed. In 2017, Stifel has
maintained this top ranking based on number of transactions underwritten and is currently the 6th
ranked underwriter based on par amount underwritten.
Loop Capital Markets, LLC
Loop Capital Markets is a boutique investment bank and the largest minority -owned investment bank in
the country. Since their inception in 1997, the Firm has grown in headcount, offices, revenues and
business lines. Since its founding the Firm has grown from six to over 180 professionals and from one
office in Chicago to 21 offices nationally, including offices in Miami and Ponte Vedra Beach. The Firm
offers services through six business groups: fixed income sales, equity sales, transition management,
financial consulting services, corporate investment banking and public finance. The Firm's flagship
business remains public finance, accounting for 33% of headcount and 31% of revenues. During this
period of growth, they have established reputations on Wall Street — among— their
clients, competitors, and industry experts, serving since their founding on over $1.1 trillion in municipal
financings, including $42.1 billion as senior manager.
Hilltop Securities Inc.
HilltopSecurities' strong institutional relationships will access distinct sectors of the marketplace. As a
nationally recognized leader in the field of public finance and as the largest financial advisor in the
country that is also a broker /dealer, HilltopSecurities has the benefit of exposure to a wider variety of
underwritings. Also lending to their broad perspective of the marketplace is their extensive involvement
as a correspondent clearing firm to approximately 75 clearing correspondents located in all 50 states. In
additional to having previously served as an underwriter to the City of Miami Beach, HilltopSecurities'
prior Florida underwriting experience has included the cities of Bartow, Daytona Beach, Jacksonville,
Lauderhill, Leesburg, Kissimmee, Orlando, Oviedo, Pensacola, Port Orange, and Winter Haven; the
counties of Lake, Miami -Dade, and Taylor; the Citizens Property Insurance Corporation; the Greater
Orlando Aviation Authority; Fort Pierce Utilities Authority; and the Tohopekaliga Water Authority among
others.
Siebert, Cisneros, Shank & Co. LLC
Siebert Cisneros Shank are pleased to have been part of the City's past bond issuances and look
forward for the opportunity to continue to contribute to future City offerings. Siebert Cisneros Shank's
position as one of the top underwriters of municipal debt, their depth of experience in the State of
Florida, particularly the South Florida region, and their proven ability to structure and market general
obligation ( "GO "), special obligation and revenue bonds comparable to the City's credits in the current
market, make their firm an ideal candidate to serve in the City's underwriting pool. Siebert Cisneros
Shank is a national investment banking firm whose core business has been public finance since its
founding in 1996. The firm has participated in over $1.2 trillion in par amount for issuers across the
country including those of similar size and credit to that of the City.
Page 242 of 923