Resolution 2021-31576 RESOLUTION NO. 2021-31576
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF
THE CITY MANAGER AND APPROVING THE SELECTION OF THE
FOLLOWING INVESTMENT BANKING FIRMS TO PROVIDE
UNDERWRITING SERVICES FOR THE MIAMI BEACH WATER AND
SEWER REFUNDING REVENUE BONDS, SERIES 2021A, WHICH THE
CITY ANTICIPATES WILL BE ISSUED IN 2021: PNC BANK, AS THE
SENIOR MANAGER, AND HILLTOP BANK,AS CO-MANAGER.
WHEREAS, 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 15 firms to provide underwriting services, on an as needed basis. The award
was valid through April 13, 2018; and
WHEREAS, in order 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; and
WHEREAS, on January 17, 2018, the Mayor and City Commission approved a
resolution authorizing the Administration to establish a pool of 14 underwriters to provide
underwriting services to the City for the issuance of bonds; and
WHEREAS, the selected firms participate in the bond issues by assisting the City, its
Chief Financial Officer, and its Financial Advisor, Julie Santamaria with RBC Capital Markets,
with the development of financing structures, preparation of preliminary and final official
statements, bond resolutions, and other documentation, as may be required. The underwriters
price the bonds, market the bonds, and sell the bonds to investors; and
WHEREAS, additionally, firms appointed as the senior managing underwriter are
required to provide the services listed below throughout the bond issuance process. Co-
managing underwriters provide assistance as requested and support in the marketing,
distribution and underwriting of the assigned transactions. 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 bond financings. All fees are contingent upon the issuance of the proposed
bonds, and paid for from bond proceeds as part of the costs of issuance. The required services
include, but are not limited to, the following:
1. Participate in drafting of all bond documents, including the Official Statement;
2. Assist in preparation and discussions with rating agencies and bond insurers, if
requested;
3. Make recommendations for the proposed financing, including, but not limited to, the
timing of the sale, the overall sales approach, the structure of the bonds, the call
provisions, and the use of credit enhancement;
4. Lead the underwriting team in marketing and distributing the bonds to both retail and
institutional investors;
5. Underwrite the financing based upon terms and conditions agreed to by both the City,
the financial advisor, and the underwriters in the Bond Purchase Agreement;
6. Assist with the closing of the financing, including reviewing all closing documents and
providing a post-financing report to the City which highlights the key characteristics of
the financing; and
WHEREAS, the process to select firms to serve as a senior or co-manager for a
particular issue involves a review of work assigned to the firms in recent years, experience in
and commitment to Florida municipal finance, the capability of a firm to senior manage large
and/or complex credit structures, the size of the bond issue to be sold, and the various markets
that the firm has access to for marketing and distribution. For example, certain firms have
greater capabilities to sell new issue bonds to retail investors, such as the City's residents and
taxpayers, and other firms' primary distribution channels are to institutional investors. A firm's
response to other business requests, such as the City's Line of Credit and Equipment Line of
Credit, and resulting commitment to the City is also considered; and
WHEREAS, the team of firms for a particular issue is recommended by the City
Manager following consultation with the City's Chief Financial Officer and Financial Advisor.
Pursuant to this process, the City Manager recommended the selection of PNC, as the senior
manager; Hilltop Bank, as co-manager, to provide underwriting services for the City of Miami
Beach Water and Sewer Refunding Revenue Bonds, Series 2021A.
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 hereby accept the recommendation of the City Manager and approve the selection
of the following underwriting firms to provide underwriting services for the Miami Beach
Refunding Revenue Bonds, Series 2021A, which the City anticipates will be issued in 2021:
PNC Bank, as the senior manager, and Hilltop Bank, as co-manager.
PASSED AND ADOPTED this 1" day of .4 0');2021.
ATTEST:
r-/-Y Dan Gelber, Mayor
22a24Rafael E. Grana2/,2ity Clerk
I `: y APPROVED AS TO
INCORPORATEI? 5 FORM &LANGUAGE
s^= &FOR EXECUTION
City Attorney P(L Date
Exhibit 1
City of Miami Beach, Florida
Current Team of Investment Banking Firms
As of 2/10/21
Underwriting History w/City Recommended
Underwriters for
2015-2019 Transactions this Transaction Total After 2021 Transaction
Senior Senior Co. Senior
Firm • Manager Co Manager Total Manager Manager' Manager - Co Manager Total
# # # # # #
Issues Year Issues Year Issues #Issues #Issues Issues Year Issues Year Issues
•
Bank of America Merrill 2019, 2019,
1 Lynch 1 2015 2 2015 3 - - 1 2015 2 2015 3 ;
2 Citigroup 1 2017 1 2015 2 - - 1 2017 1 2015 2
2017, 2017,
3 Estrada Hinojosa - 2 2015 2 - - . - 2 2015 2
•
4 Goldman' - - - - - - - -
5 Hilltop3 - - - - 1 - 1 2021 1
•
6 Jeffries' - 1 2019 1 - - - 1 2019_ . 1
2019, 2019,
7 JP Morgan 2 2015 1 2015 3 - - 2 2015 1 2015 3
2017, 2017,
8 Loop Capital Markets 2 2015 2 2 2015 2
9 Morgan Stanley 1 2015 1 2015 2 - - 1 2015 1 2015 2
10 PNC1 - 1 2019 1 1 - 1 2021 1 2019 2,
Raymond James
11 Morgan Keegan 1 2017. . 1 2015_ 2 _ - - 1 2017 1 2015 2
Siebert Brandford _
12 Shank - 2 2015 2 - - - 2 2015 2
Stifel, Nicolaus&
13 Company, Ince - 1 2017 1 - - - 1 2017 1
2017, 2017,
14 Wells Fargo Securities 1 2015 2 2015 3 - - 1 2015 2 2015 .3 •
'New to pool in 2018.
'Was previously Sterne Agee. Stifel acquired Sterne Agee in 2015. Stifel is no longer active in Florida general governmental finance.
'Was previously First Southw est. First Southw est resigned from City's underwriting pool during the Investment Advisor procurement process in 2014.
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Resolutions -C7 H
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Raul J. Aguila, Interim City Manager
DATE: February 10, 2021
SUBJECT:A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF
THE CITY MANAGER AND APPROVING THE SELECTION OF THE
FOLLOWING INVESTMENT BANKING FIRMS TO PROVIDE
UNDERWRITING SERVICES FOR THE MIAMI BEACH WATER AND
SEWER REFUNDING REVENUE BONDS, SERIES 2021A, WHICH THE
CITY ANTICIPATES WILL BE ISSUED IN 2021: PNC BANK, AS THE
SENIOR MANAGER,AND HILLTOP BANK,AS CO-MANAGER.
ECOMMENDATION
Accept the recommendation of the City Manager and approve the selection of the following
investment banking firms to provide underwriting services for the Miami Beach Water and Sewer
Refunding Revenue Bonds, Series 2021A(which the City anticipates will be issued in 2021): PNC
Bank, as the senior manager, and Hilltop Bank, as co-manager.
BACKGROUND/HISTORY
Given the favorable interest rate environment caused by the Federal Reserve's response to the
COVID-19 pandemic, the City's Finance Department, in conjunction with the City's Financial Advisor,
RBC Capital Markets ("Financial Advisor"), has identified opportunities to achieve debt service
savings from lower interest rates.
As set forth more fully below, the Administration proposes that the City Commission approve the
selection of underwriters for the issuance of the City's Water and Sewer Refunding Revenue Bonds,
Series 2021A (the "Series 2021A Bonds"). The details of the proposed Series 2021A bonds are
discussed more fully below.
On May 8, 2020, the Finance and Economic Resiliency Committee ("FERC") reviewed the proposed
refunding of the $40,000,000 Water and Sewer Revenue Refunding Bonds, Taxable Series 2009J-
1 B, and Water and Sewer Revenue Bonds, Taxable Series 2009J-1 C (together, the "Outstanding
Series 2009 Bonds"), and favorably recommended that the Administration proceed with the
refinancing as the Outstanding Series 2009 Bonds came closer to the call date of December 1, 2020
and market conditions improved.
ANALYSIS
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The City's Finance Team and Financial Advisor have identified the following savings opportunity,
which is discussed in greater detail below. The refunding of these obligations was recommended to
the FERC on May 8, 2020, and the FERC recommended that Administration move forward with the
refinancing.
The City's $40 million in Outstanding Series 2009 Bonds became callable on December 1, 2020,
and have interest rates ranging from 4.375-5.00% with a final maturity on December 1, 2039. A
public offering of the Series 2021A Bonds enables the City to lock in savings with a fixed rate through
the final maturity of the Series 2021A Bonds. The Administration and its Financial Advisor reviewed
the possibility of refinancing the Outstanding Series 2009 Bonds with a bank loan, but determined
that the ability to lock in the debt service through the final maturity of the refunding is the best
alternative for utility rate setting.
Based on current market conditions, the net present value savings from refinancing the Outstanding
Series 2009 Bonds would be approximately $11 million. which is 28% of bonds refunded. The total
savings over 18 years would be approximately$17 Trillion. The final maturity of the refunding will not
be later than 2039, which is the final maturity of the Outstanding Series 2009 Bonds.
Municipal bond underwriting firms assist the City through the bond issuance process and serve as a
liaison between the City and investors in the sale of its bonds. The underwriters' main role is to
generate investor demand and to market, price and sell the City's Series 2021A Bonds to retail and
institutional investors. This Resolution is only to select the underwriters from the City's underwriting
pool for the Series 2021 A Bonds.
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 15 firms to provide
underwriting services on an as needed basis. The award was 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. On June 8, 2017, RFQ No. 2017-163-WG for Underwriter Services was
issued. RFQ responses were received on July 13, 2017. On January 17, 2018, the Mayor and City
Commission approved a resolution authorizing the Administration to establish a pool of 14
underwriters to provide underwriting services to the City for the issuance of bonds.
The selected firms participate in the bond issues by assisting the City, its Chief Financial Officer and
its Financial Advisor, Julie Santamaria with RBC Capital Markets, with development of financing
structures, preparation of preliminary and final official statements, bond resolutions, and other
documentation as may be required.
Because of the character of the Series 2021A Bonds, the prevailing market conditions, the economic
conditions due to COVID-19 and the recommendations of the Financial Advisor, it was determined
that a negotiated sale of the Series 2021A Bonds rather than a sale through a competitive bid is in
the best interest of the City.
A firm appointed as the senior managing underwriter is required to provide the services listed below
throughout the bond issuance process. Co-managing underwriters provide assistance as requested
and support in the marketing, distribution and underwriting of the assigned transaction. The City, at
Page 311 of 1252
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 bond financings. The City reserves the right to assign less than all
of the members of the underwriting pool for a particular financing, and reserves the right to remove
any underwriter from participation in the underwriting syndicate if the underwriter and the City are
unable to agree on any provision of the bond purchase contract. All fees are contingent upon the
issuance of the proposed bonds. The required services include, but are not limited to, the following:
1. Participate in drafting of all bond documents, including the Official Statement.
2. Assist in preparation and discussions with rating agencies and bond insurers, if requested.
3. Make recommendations for the proposed financing, including, but not limited to, the timing of
the sale, the overall sales approach, the structure of the bonds, the call provisions, and the use
of credit enhancement.
4. Lead the underwriting team in marketing and distributing the bonds to both retail and
institutional investors.
5. Underwrite the financing based upon terms and conditions agreed to by both the City, financial
advisor, and the underwriters in the Bond Purchase Agreement.
6. Assist with the closing of the financing, including reviewing all closing documents and providing
a post-financing report to the City which highlights the key characteristics of the financing.
The underwriters in a negotiated sale pre-market the bonds to retail and institutional investors in the
weeks prior to pricing. A negotiated sale process enables the underwriters to premarket as they
know that they are part of the underwriting team and will have bonds to sell to investors. For an
issuer such as Miami Beach, which has many residents who would likely be interested in purchasing
the Series 2021A Bonds, premarketing allows retail investors to prepare for the bond sale and be
ready to place orders for the bonds. The City can instruct the underwriters for the bonds to fill
resident orders before orders from other investors in a negotiated sale. For example, the City posted
information on its website prior to the pricing for the GO Bonds and convention center bonds and
orders from residents were filled first before other retail and institutional orders. The City can post
information on the Series 2021A bond sale on its website and place advertisements in local
newspapers to inform residents of the upcoming negotiated sale. During a negotiated new issue
order period, all investors pay the same price for the bonds, whether they are an individual
purchasing a $5,000 bond or an institutional investor purchasing millions of dollars in bonds. The
negotiated sale ensures that City taxpayers and residents who place orders for the bonds during the
new issue order period will have the highest priority to purchase the bonds.
The process to select firms to serve as a senior or co-manager for a particular issue involves a
review of work assigned to the firms in recent years, experience in and commitment to Florida
municipal finance, the size of the bond issue to be sold, the credit of the offering, and the various
markets that the firm has access to for marketing and distribution. A firm's response to other
business requests, such as lines of credit and bank loans, and resulting commitment to the City is
also considered. The team of firms for a particular issue is recommended by the City Manager
following consultation with the City's Chief Financial Officer and Financial Advisor.
The City anticipates the issuance of the Series 2021A Bonds in April 2021 to refund outstanding
obligations if market conditions allow. The firms recommended for the Series 2021A Bonds, based
on a combination of the above considerations, are as follows:
Senior Manager PNC
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Co-Manager: Hilltop
A list of the underwriters' recent transactions with the City and the resulting total participation in the
City's bond financings based on this recommendation are provided on the following page. (Exhibit 1)
The City and its Financial Advisor will work with the underwriters to provide information on how City
taxpayers and residents can purchase the Series 2021A Bonds through the new issue order period.
The Resolution for the issuance of the Series 2021A Bonds will delegate to the Mayor, relying upon
the recommendation of the Chief Financial Officer and the City's Financial Advisor, the determination
of various terms of the Series 2021A Bonds, including the payment of all related costs and expenses
in connection with the issuance of the Series 2021A Bonds and all other actions necessary or
desirable in connection with the issuance of the Series 2021A Bonds.
CONCLUSION
The Administration recommends that the Mayor and City Commission of the City of Miami Beach,
Florida approve the City Manager's recommendation of underwriters for the Series 2021A Bonds.
Applicable Area
Citywide
Is this a "Residents Right Does this item utilize G.O.
to Know" item. pursuant to Bond Funds?
City Code Section 2-14?
Yes No
Legislative Tracking
Finance
ATTACHMENTS:
Description
o Resolution
❑ Exhibit 1
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