C7F-Approve First Year Renewal Option Financial Advisory ServicesCOMMISSION ITEM SUMMARY
Condensed Title:
A Resolution of the Mayor and City Commission of the City of Miami Beach,
Florida, approving the first year renewal option to the professional services
agreement between the City and RBC Oain Rauscher, Inc. (d/b/a RBC Capital
Markets), dated March 14, 2007, for financial advisory services; said renewal
term having been deemed to commence retroactively on March 15, 2012, and
ending on March 14, 2013.
Key Intended Outcome Supported:
Improve the City's overall financial health and maintain overall bond rating.
Supporting Data (Surveys, Environmental Scan, etc.):
Issue:
I Should the "!1a}!or and City Commissior ap_erove the Resolution?
Item Summary/Recommendation:
The Administration recommends that the Mayor and City Commission adopt the
Resolution which approves the first year renewal option to the Professional Services
Agreement between the City and RBC Dain Rauscher, Inc. (0/B/A RBC Capital
Markets), dated March 14, 2007, for Financial Advisor Services; said renewal term
having been deemed to commence retroactively on March 15, 2012, and ending on
March 14, 2013.
Advisory Board Recommendation:
IN/A
Financial Information:
Amount
Source of Funds: N/A
OBPI
Total
Ci Clerk's Office Le islative Trackin
Patricia Walker, Chief Financial Officer
Si n-Offs:
Department Director
POW
MIAMI BEACH
Account
Fees paid from proceeds of new
Bonds issued.
Manager
161
JMG
AGENDA ITEM
DATE
Approved
(9 MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, ~.miamibeachll.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Bower and Members of the City Commis~ion
FROM: Jorge M. Gonzalez, City Manager
DATE: June 6, 2012
SUBJECT: A RESOLUTION OF THE MAYOR A D CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, APPROVING THE FIRST YEAR RENEWAL
OPTION TO THE PROFESSIONAL SERVICES AGREEMENT BETWEEN
THE CITY AND RBC DAIN RAUSCHER, INC. (D/B/A RBC CAPITAL
MARKETS), DATED MARCH 14, 2007, FOR FINANCIAL ADVISORY
SERVICES; SAID RENEWAL TERM HAVING BEEN DEEMED TO
COMMENCE RETROACTIVELY ON MARCH 15, 2012, AND ENDING ON
MARCH 14, 2013.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution
KEY INTENDED OUTCOME SUPPORTED
Improve the City's overall financial health and maintain overall bond rating.
BACKGROUND
The Mayor and City Commission, at its March 14, 2007 City Commission meeting, passed and
adopted Resolution 2007-26484, which accepted the City Manager's recommendation
pertaining to the ranking of firms pursuant to Request for Proposals (RFP) No. 20~06/07 for
Financial Advisory Services. It further authorized the Administration to enter into negotiations
with RBC Capital Markets and authorized the Mayor and City Clerk to execute an agreement
upon the completion of successful negotiations by the Administration;
ANALYSIS
The purpose of this resolution is to recommend the first year renewal of the contract with RBC
Capital Markets for Financial Advisory Services. The original contract was for an initial five (5)
year term with up to five (5) additional one (1) year renewal terms.
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Commission Memorandum
Financial Advisor Renewal
June 6, 2012
Page 2 of2
RBC Capital Markets acts as Financial Advisors for the City's ongoing capital program, including
Water & Sewer Bonds, Stormwater Bonds, Parking Bonds, and with the Line of Credit financing
program. They are currently assisting the City with the financing" plan for the undergrounding of
the utilities for Sunset Islands 3 & 4.
Addition, they serve as Financial Advisors for the Miami Beach Health Facilities Authority (HFA).
Currently, Mt. Sinai has applied to the HFA for a substantial bond refunding series of
approximately $160 million. When RBC Capital Markets serves as the Financial Advisors to the
HFA, the issuer, in this case Mt. Sinai, shall compensate them from the proceeds from the sale
of the bonds or other fees charged for a project.
RBC Capital Markets also provides the City with various other financial advisory services some
ef whiel'l iRelude the fellewiMg:
Review existing debt structure and financial resources to determine available
borrowing eapaeity.
-Advise as to market conditions and recommend the timing of the sale of bonds.
Provide information concerning the structure of financing programs used by other
issuers.
Advise on the use of a negotiated or competitive bid sale for each issue.
-Advise as to the advantages and disadvantages of municipal bond issuance or other
credit enhancements.
-Assist in negotiating the interest rates proposed by the underwriters.
Review the bond purchase agreement and advise as to its acceptance or rejection in
light of market conditions.
Assist legal counsel in the preparation and distribution of the Official Statement.
Arrange for distribution of the Official Statement to bond underwriters and investors
in accordance with the objectives communicated by the City.
Included as Exhibit A is a more comprehensive list of the scope of services that RBC Capital
Markets is required to perform and was part of their original contract with the City. In this Exhibit
is also the fee structure that will continue to be in effect should this resolution be approved.
CONCLUSION
The Administration recommends that the Mayor and City Commission adopt the Resolution
which approves the first year renewal option to the Professional Services Agreement between
the City and RBC Dain Rauscher, Inc. (0/B/A RBC Capital Markets), dated March 14, 2007, for
Financial Advisor Services; said renewal term having been deemed to commence retroactively
on March 15, 2012, and ending on March 14, 2013.
JMG/PDW
163
RESOLUTION NO.-----
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, APPROVING/ THE FIRST YEAR
RENEWAL OPTION TO THE PROFESSIONAL SERVICES
AGREEMENT BETWEEN THE CITY AND RBC DAIN RAUSCHER,
INC. (D/B/A RBC CAPITAL MARKETS), DATED MARCH 14, 2007,
FOR FINANCIAL ADVISORY SERVICES; SAID RENEWAL TERM
HAVING BEEN DEEMED TO COMMENCE RETROACTIVELY ON
MARCH 15,2012, AND ENDING ON MARCH 14,2013.
WHEREAS, at its March 14, 2007 meeting, the Mayor and City Commission
adopted Resolution No. 2007~26484, which accepted the City Manager's
recommendation pertaining to the ranking of firms pursuant to Request for Proposals
(RFP) No. 20-06/07 for Financial Advisory Services, authorizing the Administration to
enter into negotiations with RBC Capital Markets, and further authorizing the Mayor and
City Clerk to execute an agreement upon the completion of successful negotiations by
the Administration; and
WHEREAS, the aforestated Agreement provides for the City, at its sole
discretion, to renew the Agreement, upon the same term and conditions, for up to five (5)
additional one (1) year renewal terms; and
WHEREAS, the Administration requests that the City Commission hereby
approve the exercise of the first renewal term, which would be deemed to have
commenced retroactively on March 15, 2012 and which would expire on March 14,
2013.
NOW, THEREFORE, BE IT DULY RESOLVED THAT THE MAYOR AND
CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, hereby approve the
first year renewal option to the Professional Services Agreement between the City and
RBC Dain Rauscher, Inc. (D/B/A RBC Capital Markets), dated March 14, 2007, for
Financial Advisor Services; said renewal term having been deemed to commence
retroactively on March 15, 2012, and ending on March 14, 2013.
PASSED and ADOPTED this -----day of _____ .2012.
MAYOR
ATTEST:
CITY CLERK
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EXHIBIT A
SCOPE OF SERVICES
l.-Financings Involving A Public Offering of Debt Securities. The Consultant agrees that upon
request the following services may be performed by the Consultant in consideration of the
compensation in Paragraph 4 of this Exhibit '~A".
• a. Review existing debt structure and financial resources to determine available
borrowing capacity.
b. Evaluate financing mechanisms and assist in the financing component of any such
mechanisms chosen by the City.
c. To be available, upon proper notification, to participate in conference calls,
conferences, with the personnel of the City and other consultants to the City
regarding financing matters.
d. Provide information concerning the structure of financing programs used by other
issuers.
e. Recommend in conjunction with bond counsel, provtswns and covenants to be
contained in bond issues, including, but not limited to bond amounts, maturities,
interest rates, redemption provisions, flow of funds, debt service coverage
requirements, reserve funds, security pledges and conditions relating to the issuance
of additional bonds.
• f. Assist with the preparation of debt service requirements for proposed issues.
~ g. Advise on the use of a negotiated or competitive bid sale for each issue.
h. Coordinate bond closing and transfer of funds.
"' 1. Advise as to the advantages and disadvantages of municipal bond insurance or other
credit. enhancements.
j. Coordinate with and provide the municipal bond rating agencies (and credit
enhancers, if applicable) with information necessary to obtain an appropriate rating
on the bonds.
% k. Advise as to market conditions and recommend the timing of the sale of the bonds.
I. Assist where needed at the time of a competitive sale in checking all bids for
compliance with bid specifications, and make a recommendations as to award of the
bonds in the best interest of the City.
m. Assist, upon request, in selection of the book~running managing underwriter and co-
managing underwriters for negotiated sale of bonds.
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n Advise whether to utilize a selling group.
o. · Assist in negotiating the interest rates proposed by the underwriters for the bonds as
well as the underwriters compensation and expenses on the issue expressed in terms
of the gross underwriters discount.
p. Review the bond purchase agreement and advise as to its acceptance or rejection in
light of market conditions.
q. Assist legal counsel in the preparation an.d distribution of the Official Statement.
r. Arrange for distribution of the Official Statement to bond underwriters and investors
in accordance with the objectives communicated to the Consultant by the City or its
agents or representatives.
s. Assist, at bond closing, and coordinate printing, signing and delivery of bonds,
including receipt oftranscript, bond printing, CUSIP numbers and delivery of bonds.
2. Financings Not Involving a Public Offering of Debt Securities. The Consultant agrees that
upon request the following services may be performed by the Consultant (in addition to the services
previously described) in consideration ofthe compensation in Paragraph 4 of this Exhibit "A".
a. Assist in the selection of a financing vehicle, including but not limited to, private
placement of debt, participation in pooled loan programs, short term borrowing
programs, bank loans, tax anticipation notes, certificates of participation, and revenue
anticipation notes or other alternative financial products, including but not. limited to
interest rate swaps, caps or collars and investment of bond proceeds.
b. In conjunction with City's legal counsel, assist in the preparation of private
placement memorandums, loan applications, or other information related to the
financing.
3. ~ervices Not Involving Specific Financings. The Consultant agrees that upon request the
following services may be performed by the Consultant in consideration of the compensation in
Paragraph 4 of this Exhibit "A".
a. Attend meetings related to the City's business as requested.
b. Prepare debt capacity reports and other requested services, such as periodic rating
agency updates and other special studies as directed by the City.
4. Compensation. The Consultant shall be compensated; for all work performed, for the City
pursuant to Paragraphs 1, 2, and 3 of this Exhibit "A" as follows: 13
a. The Consultant shall be paid the following hourly rates for all time expended by its
personnel for specific projects requested in writing by the City, as follows:
Managing Director and Director
Vice President
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$225 per hour
$200 per hour
Associate Vice President and
Financial Analyst
Support Staff
$150 per hour
no charge
Altematively, the City may wish to negotiate a fixed price for such special projects.
The City and the Consultant acknowledge that there will be special projects for which
the services of the Consultant may be requested whieh are not appropriately
compensated for on an hourly rate and which do not result in the issuance of bonds as
more specifically referenced below. Fees for these special services shall be negotiated
on a case by case basis and shall be agreed to in writing by both parties.
b. In connection with the issuance of debt, the Consultant sh~:dl be paid at closing in
accordance with the following schedule with a minimum fee of $15,000 per
transaction:
Par Amount of Bonds Issued
First $0 -$50,000,000
$50,000,000 -$I 00,000,000
$100,000,000-and more
Fee Per $1,000
$1.25
$1.00
$0.75
There shall be a surcharge of $5,000 for competitive sales and/or refundings.
c. In the capacity of placement and/or pricing agent of interest rate swaps or other
derivative products, Consultant will charge a fee of five basis points (0.05%) of the
weighted average balance to be swapped each year, discounted at a taxable yield,
with a cap to be negotiated on each transaction reflecting the complexity and risk
associated with such transactions. For the reinvestment of bond proceeds Consultant
will charge a fee of 3 basis points computed on the same basis as described in the
previous sentence.
d. For the preparation of the bid solicitation and review of bids received for securities to
be purchased for escrow accounts, guaranteed investment agreements and other
investments, the Consultant shall be paid a Placement Fee of five basis points
(0.05%) of the weighted average balance to be invested each year of the agreement,
discounted at a taxable yield by the Agreement Provider on behalf of the City.
e. For conduit financings proposed to be issued through the City, the Consultant
shall be paid on the same fee schedule as set forth above in paragraph (b) by the
Borrower. In the event that no bonds are actually issued, the Consultant shall receive
a fee from the Borrower, such fee subject to negotiation between the Consultant and
the Borrower, but in no event less than the dollar amount for the hours expended on
the project to compensate the Consultant for the preparation and presentation to the
City of a report analyzing the credit, the proposed marketing plan, and analyzing the
City's protection from any risk of default on the financing and making a
recommendation regarding the issuance of the proposed bonds.
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167
f. The Consultant shall be reimbursed for all out·of-pocket expenses. Travel expense
reimbursement shall comply with the City's polley for reimbursement of City
employees.
5. Other Services. The City agrees that the following category of services, or other
services not enumerated herein, when requested in writing to be performed by the Consultant shall be
compensated in a mutually agreed upon manner con finned in writing by both parties.
a. Assisting with validation proceedings and/or testifying as an expert witness with respect to
offeFings.
b. Providing secondary market disclosure services upon request in compliance with Rule
15e(2H 2 of' the Securities and Exchange Commission.
c. Participating in the development of a financial plan for the City's capital improvements
pPogram.
d. Advice on various budget and funding matters not specifically related to the offer of
seeuritles or other flnancings referenced in Paragraphs 1 and 2 of this Exhibit.
6. Th~ parties acknowledge that if the Consultant sells securities for investment
programs to the City such sale is in the Consultant's role as a bmker/dealer and as principal and the
City acknowledges that a mark·up will be charged on the sale, which markup shall be disclosed to
the City.
7. Richard Montalbano, Managing Director, will be the primary banker for the
Consultant for all work performed herewith. Sonya Little, Vice President, will provide project
support for all work performed herewith. Other professionals will perform services as directed by
Richard Montalbano. Neither Richard Montalbano nor Sonya Little may be removed from this
position without City's written approval.
8. The Consultant shall be entitled to the reimbursement of expenses associated with all
servle~s eontempltlted herein in full.
9. The parties acknowledge that the Consultant may have ongoing business
relationships with other investment banking firms and financial advisors, including firms doing
business with the City. 15
10. This Exhibit does not govern, nor does it prohibit the Consultant from serving in
othc.\lr roles, suck as investing funds as a broker/dealer, selling securities to the City as principal or
other activities.
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