RESOLUTION 92-20562 RESOLUTION NO. 92-20562
A RESOLUTION OF THE CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, AUTHORIZING THE
EMPLOYMENT OF INVESTMENT BANKING FIRMS FOR
THE REFUNDING OF THE $25,115,000 GENERAL
OBLIGATION REFUNDING BONDS, SERIES 1986, THE
$37,395,000 GENERAL OBLIGATION REFUNDING BONDS,
SERIES 1987 AND THE $3,000,000 GENERAL OBLIGATION
BONDS, SERIES 1987.
Whereas, the City of Miami Beach desires to refund a portion of its general obligation
bonded debt to achieve savings, and:
Whereas, the appointment of Investment Banking firms is necessary for such a transaction
to be undertaken, and:
Whereas, the appointment of multiple banking firms will produce the maximum possible
distribution of the new bonds to be issued:
NOW THEREFOR BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, that the firms of Kidder Peabody and Co., Inc. be
employed as lead Investment Banker with an allocation of 40% of the issue and that the
firms of Lehman Brothers, William R. Hough and Co., Howard Gary and Company and
AIBC Investment Services Corp. be employed as co-managers with an allocation of 15%
each of the bonds to be issued.
Passed and adopted this 22nd day of July ,1992.
/ /
A
Mayor
Attest:
FOR A 'ROVED
L: GA DEPT.
al PFA
Te4a,(//41( atezoiptp Xetteilti4
. )1,144
City Clerk Date
CITY OF MIAMI BEACH
tl:;1
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
OFFICE OF THE CITY MANAGER TELEPHONE: (305) 673-7010
FAX: (305) 673-7782
COMMISSION MEMORANDUM NO. Cq
DATE: July 22 , 1992
TO: Mayor Seymour Gelber and
Members of the City Commission
FROM: Roger M. Carito
City Manager
SUBJECT:Selection of Investment Banking Firms to Serve the City on the Refunding of its
General Obligation Bonded Debt as per RFP No. 76-91/92
Administration Recommendation
The Administration recommends that the City Commission award the investment banking
services for a refunding of the City's General Obligation debt in the following percentages
to the team of:
Kidder, Peabody and Co., Inc. (lead manager) 40%
Lehman Brothers 15%
William R. Hough and Co. 15%
Howard Gary and Co. 15%
AIBC Investment Services Corp. 15%
Background
The Finance Committee of the City Commission asked that the Administration review the
possible savings that could result from a refinancing of the City's bonded debt. At the time
of the request the interest rate environment was such that no savings could be achieved in
such a refinancing. However, in anticipation of further interest rate reductions, that have
occurred, the City issued a Request For Proposals for investment banking services for the
refunding of the $25,115,000 General Obligation Refunding Bonds, Series 1986, the
$37,395,000 General Obligation Refunding Bonds, Series 1987 and the $3,000,000 General
Obligation Bonds, Series 1987. In addition to the above mentioned team, the financing team
will include city staff including a city attorney, the Bond Counsel for the City, the Financial
Advisor for the City and an attorney selected by the investment bankers. All of the fees for
the team will be contingent upon the issuance of the bonds. The anticipated size of the
refunding bond issue is $55,000,000.
The function that the Investment Bankers play in the proposed transaction is to actually be
the City's agent in the sale of the bonds. In this role the Investment Bankers (underwriters)
will commit to the purchase of our bonds and then sell these bonds to the public. During
the period which the underwriters hold the bonds, their capital is at risk as they have
already purchased the bonds from the City and if the interest rates change the value of the
bonds will be affected.
117
AGENDA
ITEM
DATE 7=22-92-
•
•
Award of RFP 76-91/92 Page 2
The "RFP" was advertised on April 10, 1992, with an opening date of May 5, 1992. A total
of twenty-two sets of specifications were mailed and the City received thirteen replies
including one no bid response. The responses were received from the following firms:
AIBC Investment Services Corp. Lehman Brothers
Bear Stearns Merrill Lynch (no bid)
Clayton Brown & Assoc., Inc. PaineWeber, Inc.
Donaldson, Lufkin & Jenrette Raymond James & Assoc.
Guzman & Company The First Boston Corp.
Howard Gary & Company William R. Hough & Co.
Kidder Peabody & Co., Inc.
Analysis
The City Manager appointed the following selection committee:
Denise Bynum, Chief Accountant
Perry Fabian, Chairman of the Budget Advisory Committee
Peter F. Liu, Director OMB
Robert J. Nachlinger, Finance Director
Robert Reboso, Asst. to the City Manager
Judith Ford, Asst. Purchasing Agent, non-voting Chairman
The Committee meet on July 10, 1992, toreview the proposals for responsiveness, to assign
weights to the selection criteria and to discuss the composition of the financing team. The
Committee determined that the best distribution of the proposed bonds would be achieved
by selecting two national firms and two regional firms as investment bankers. The
Committee evaluated the proposals based on the following criteria:
1. Responsiveness to the RFP
2. Experience and qualifications of the firm
3. Similar underwriting experience, especially in Florida
4. Qualifications of personnel
5. Commitment to Florida municipal finance
6. Distribution capabilities and strategies
7. Availability/accessibility of firm
8. Proposed fees
On July 13, 1992, the selection committee scored the twelve proposing firms with a
maximum score of 5,000 as follows:
National Firms Score
1. Kidder Peabody & Co., Inc. (lead manager) 4,495
2. Lehman Brothers 4,410
3. The First Boston Corp. 4,085
4. Bear Stearns 4,015
5. PaineWeber Inc. 3,905
6. Donaldson, Lufkin & Jenrette 3,755
7. Clayton Brown & Assoc., Inc. 3,515
Regional Firms
1. Raymond James & Assoc., Inc.* 4,310
2. William R. Hough & Co. 4,115
3. Howard Gary & Company 3,270
4. AIBC Investment Services Corp. 3,045
5. Guzman & Company 2,830
* This firm was selected as Financial Advisor as a result of RFP 75-91/92 and
therefor could not be a member of the underwriting team.
•
Award of RFP 76-91/92 Page 3
Conclusion
As a result of the evaluation process that was undertaken by the Selection Committee, the
two top ranked national firms, Kidder Peabody & Co., Inc. and Lehman Brothers, and the
two available top ranked regional firms, William R. Hough & Co. and Howard Gary &
Company should be selected as Investment Bankers for the City of Miami Beach. The
Administration would also request that the firm of AIBC Investment Services Corp. be
added to the team to allow for the access of a Hispanic firm into the banking team. This
will result in Black and Hispanic firms for the first time being included in a bond
transaction for the City of Miami Beach.
URIGINAL
RESOLUTION NO. 92-20562
Authorizing the employment of investment
banking firms for the refunding of the
$25, 115,000 general obligation refunding
bonds, series 1986, the $37,395,000
general obligation refunding bonds,
series 1987 and the $3,000,000 general
obligation bonds, series 1987.
OMMMO
A