HomeMy WebLinkAboutResolution 2026-34161RESOLUTION NO. 2026-34161
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 MORGAN STANLEY
& CO. LLC, AS SENIOR MANAGER, ALONG WITH JEFFERIES LLC AND
STIFEL, NICOLAUS & COMPANY, INCORPORATED, AS CO -MANAGERS, TO
PROVIDE UNDERWRITING SERVICES FOR THE RESORT TAX REVENUE
REFUNDING BONDS, SERIES 2026 ("SERIES 2026 REFUNDING BONDS")
THAT THE CITY ANTICIPATES WILL BE ISSUED IN 2026.
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; and
WHEREAS, 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 (RFC)
2017-163-WG for Underwriter Services; 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 pool was approved for services from January 17, 2018, through January
17, 2023 (5 years), with an additional five (5) years, on a year-to-year basis, if mutually agreed
upon by both parties; and
WHEREAS, four optional renewals have been exercised and the contracts extended to
January 17, 2027; and
WHEREAS, on December 15, 2015, the City issued its $194,920,000 principal amount of
Resort Tax Revenue Bonds Series 2015 (the "Series 2015 Bonds") for the purpose of providing
funds to finance a portion of the costs of acquiring and constructing renovations to the Convention
Center and related improvements and pay the costs of issuing the Series 2015 Bonds; and
WHEREAS, given the current interest rate environment, the City's Chief Financial Officer,
in conjunction with the City's Financial Advisor, PFM Financial Advisors LLC (the "Financial
Advisor"), has identified a refinancing opportunity to achieve debt service savings; and
WHEREAS, on December 17, 2025, the Commission approved a referral to the Finance
and Economic Resiliency Committee ("FERC") to review the potential refunding of outstanding
Series 2015 Bonds; and
WHEREAS, the City's Chief Financial Officer and Financial Advisor presented the
opportunity, which was discussed by the FERC on February 20, 2026, and the FERC
recommended that Administration move forward with the refinancing; and
WHEREAS, the process to select firms to serve as a senior or co -manager for a particular
issue involves a review of work previously assigned to the various firms during the tens of the
pool, experience in and commitment to Florida municipal finance, the capability of a fimr 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; and
WHEREAS, the City anticipates the issuance of the Series 2026 Refunding Bonds in 2026
to refund all or a portion of the outstanding Series 2015 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 hereby accept the recommendation of the City Manager and approve the selection
of Morgan Stanley & Co. LLC, as Senior Manager, along with Jefferies LLC and Stifel, Nicolaus
& Company, Incorporated, as Co -Managers, to provide underwriting services for the Resort Tax
Revenue Refunding Bonds, Series 2026 ("Series 2026 Refunding Bonds") that the City
anticipates will be issued in 2026.
PASSED and ADOPTED this /7 day of March, 20
ATTEST: Steven Meiner, Mayor
MAR 2 0 2026 •-
Rafae E. Gra ado, City Clerk
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tPO0
APPROVED AS TO
FORM & LANGUAGE
& FO CUTION
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City A orney YtX Date
Resolutions • C7 C
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Eric Carpenter, City Manager
DATE: March 18, 2026
TITLE: 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 MORGAN STANLEY 8 CO.
LLC, AS SENIOR MANAGER, ALONG WITH JEFFERIES LLC AND STIFEL,
NICOLAUS 8 COMPANY, INCORPORATED, AS CO -MANAGERS, TO PROVIDE
UNDERWRITING SERVICES FOR THE RESORT TAX REVENUE REFUNDING
BONDS, SERIES 2026 ("SERIES 2026 REFUNDING BONDS") THAT THE CITY
ANTICIPATES WILL BE ISSUED IN 2026.
The Administration recommends that the Mayor and City Commission approve the City Manager's
recommendation of underwriters for the Series 2026 Refunding 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 pool was
approved for services from January 17, 2018, through January 17, 2023 (5 years), with an
additional five (5) years, on a year-to-year basis, if mutually agreed upon by both parties. Four
optional renewals have been exercised, and the contracts were extended through January 17,
2027.
On December 15, 2015, the City issued its $194,920,000 principal amount of Resort Tax Revenue
Bonds, Series 2015 (the "Series 2015 Bonds") for the purpose of providing funds to finance a
portion of the costs of acquiring and constructing renovations to the Convention Center and
related improvements and pay the costs of issuing the Series 2015 Bonds. The Series 2015
Bonds are solely payable from and secured by a pledge of and first lien on the Pledged Funds
derived by the City from Resort Tax Revenues and all moneys, securities and instruments held in
the funds and accounts created under the Bond Resolution. The Series 2015 Bonds were issued
with interest rates of 3.00% to 5.00% payable semiannually on March 1 and September 1.
Given the current interest rate environment, the City's Chief Financial Officer, in conjunction with
the City's Financial Advisor, PFM Financial Advisors LLC (the "Financial Advisor"), has identified
a refinancing opportunity to achieve debt service savings. A debt refunding opportunity is a
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chance to replace existing debt obligations with new ones that offer cost savings and improved
financial conditions for the City.
On December 17, 2025, the Commission approved a referral to the Finance and Economic
Resiliency Committee ("FERC") to review the potential refunding of outstanding Series 2015
Bonds. The City's Chief Financial Officer and Financial Advisor presented the opportunity, which
was discussed by the FERC on February 20, 2026, and the FERC recommended that
Administration move forward with the refinancing.
ANALYSIS
The selected firms participate in the bond issues by assisting the City, its Chief Financial Officer
and its Financial Advisor with development of financing structures, preparation of preliminary and
final official statements, bond resolutions, and other documentation as may be required. The
underwriters' price, market and sell the bonds to investors in municipal securities.
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. 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 agreement. 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 process to select firms to serve as a senior or co -manager for a particular issue involves a
review of work Previously assigned to the various firms during the term of the pool, 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. 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. The list of firms is recommended by the City Manager following
consultation with the City's Chief Financial Officer and Financial Advisor.
The City anticipates the issuance of Series 2026 Refunding Bonds in May 2026 to refund all or a
portion of the outstanding Series 2015 Bonds. The firms recommended for the Series 2026
Refunding Bonds, based on a combination of the above considerations, are as follows:
• Senior Manager: Morgan Stanley & Co. LLC
• Co -Managers: Jefferies LLC and Stifel, Nicolaus & Company, Inc.
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A list of the underwriters' recent transactions with the City and the resulting total participation in
the City's fond financings based on this recommendation are provided as an attachment.
The City and its Financial Advisor will work with the underwriters to provide information on how
City taxpayers and residents can purchase the Series 2026 Refunding Bonds through the new
issue order period.
The resolution for the issuance of the Series 2026 Refunding Bonds will delegate to the City
Manager, relying upon the recommendation of the Chief Financial Officer and the City's Financial
Advisor, the determination of various terms of the Series 2026 Refunding Bonds, including the
payment of all related costs and expenses in connection with the issuance of the Series 2026
Refunding Bonds and all other actions necessary or desirable in connection with the issuance of
the Series 2026 Refunding Bonds.
FISCAL IMPACT STATEMENT
Does this Ordinance require a Business Impact Estimate?
(FOR ORDINANCES ONLY)
If applicable, the Business Impact Estimate (BIE) was published on:
See BIE at: https://www.miamibeachfi.gov/city-hall/city-clerkimeeting-notices)
FINANCIAL INFORMATION
CONCLUSION
The Administration recommends that the Mayor and City Commission approve the City Manager's
recommendation of underwriters for the Series 2026 Refunding Bonds.
Applicable Area
Citywide
Is this a "Residents Right to Know" item. Is this item related to a G.O. Bond
pursuant to City Code Section 2-117? Project?
a`O
No
Was this Agenda Item initially requested by a lobbyist which, as defined in Code Sec. 2-481,
includes a principal engaged in lobbying? No
If so, specify the name of lobbyist(s) and principal(s):
Department
Finance
Sponsor(s)
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Co-sponsor(s)
Condensed Title
Approve Selection of Underwriting Services, Resort Tax Revenue Refunding Bonds, Series
2026. FN
Previous Action (For City Clerk Use Only)
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pfm
January 26, 2026
Memorandum
To: City of Miami Beach, Florida
From: PFM Financial Advisors LLC
RE: Resort Tax Revenue Refunding Bonds, Series 2026 — Plan of Finance
PFM Financial Advisors LLC ("PFM"), serving in our capacity as financial advisor to the City of
Miami Beach, Florida (the "City"), has worked with the Administration to develop a plan of
finance for the issuance of Resort Tax Revenue Refunding Bonds, Series 2026 (the"Series
2026 Bonds"). The purpose of this memorandum is to describe the plan of finance and provide
the findings that result in a recommendation to move forward with the proposed financing
structure and method of sale.
Purpose & Structure
Series 2026 Bonds will be issued to provide for a refunding of the Resort Tax Revenue Bonds,
Series 2015 (the "Series 2015 Bonds") for debt service savings. The Series 2015 Bonds are
currently callable.
The Series 2026 Bonds will be issued with a final maturity no longer than the bonds being
refinanced, which is September 1, 2045. Closing is anticipated to occur as early as June 2026.
Principal will be paid on an annual basis beginning September 1, 2026, with interest paid semi-
annually every March and September, commencing September 1, 2026.
Security & Ratincs
The Series 2015 Bonds are the only outstanding obligations of the City that are secured by a
pledge of and lien upon the resort tax revenues. The resort tax revenues are the proceeds of
a municipal tax imposed, levied, and collected on the rent of every occupancy of a room in any
hotel, motel, rooming house or apartment house in the City, and the total sales price of all
food, beverages, alcoholic beverages, and wine sold at retail of any restaurant in the City.
The Series 2015A Bonds currently have ratings assigned by two of the three major rating
agencies: Aa3 by Moody's and AA- by S&P. We anticipate that the Series 2026 Bonds will
maintain the same ratings.
Method of Sale
In the municipal bond market, some issuers have strong preferences for either a negotiated or
competitive sale approach, and oftentimes issuers achieve very successful results from either
alternative. Ultimately, the decision in favor of either method may be influenced by a
combination of broader policy and financial objectives, issuer -specific characteristics, and
market conditions.
There are numerous considerations in establishing a method of sale for any bond issue.
Factors supporting one sale methodology versus another are summarized in the table provided
as Exhibit A. The items listed in the table should be viewed as indicators of the most effective
approach given a set of circumstances. Issuers may find characteristics for a specific set of
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circumstances that fall in both columns. Florida State Statutes' indicate that revenue bonds
shall be sold by competitive sale, absent findings for reasons for a negotiated sale. In our view
a negotiated sale for the Series 2026 Bonds is the appropriate method of sale for the following
reasons:
• Infrequency to Market and Market Awareness — It has been nearty a decade since the
City has issued resort tax -backed debt, which is more nuanced compared to traditional
revenue -backed bond offerings (e.g., sales tax bonds). A team of underwriters can serve
to pre -market investors about the unique security structure and promote the transaction to
generate interest in the offering.
• Credit Quality and Pledged Revenues — While the Series 2026 Bonds are anticipated to
maintain strong Aa3/AA- ratings, the underlying revenue stream might be viewed as
cyclical. Resort taxes can be sensitive to tourism levels, which are heavily influenced by
travel trends, economic conditions, and natural disasters like tropical storms and
hurricanes. As such, the bonds may benefit from greater pre -marketing activity to
proactively speak to investors about the strength and resiliency of the City's tourism and
market the credit more widely to potential investors.
• Investors — Using a negotiated sales approach would allow local and Florida -based retail
investors to purchase the bonds during the primary offering, which would be consistent
with the City of Miami Beach's prior practices for publicly offered debt.
Underwriter Selection
The City has a pool of underwriters and, at its sole discretion, may select one or more firms to
serve as senior manager or co -manager from the underwriting pool for each of its bond
financings. The process to select firms to serve as a senior or co -manager for a particular
issue involves a review of work previously assigned to the various firms during the tens of the
pool, 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. Utilizing a
rotating underwriter pool can also promote fairness and competition among firms.
The firms listed below are recommended for the Series 2026 Bonds:
• Senior Manager: Morgan Stanley & Co. LLC
• Co -Managers: Jefferies LLC: Stifel, Nicolaus & Company, Inc.
Provided in Exhibit B is a summary of the underwriting history among the firms in the City's
underwriter pool since 2015.
Conclusion
PFM recommends that the City proceed with the Series 2026 Bonds to refund the Series 2015
Bonds for debt service savings. At present time, the fact pattern surrounding the issuance of
the Series 2026 Bonds are such that a negotiated sale is warranted. This recommendation is
based on the considerations described above. Please feel free to contact us should you have
any questions or comments regarding the recommendations outlined in this memorandum.
'SS 218 385
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Exhibit A
Attributes Competitive Sale Negotiated Sale
kw
Type of Organization
Broad -based, general-purpose
government
Special-purpose enterprise, independent
authority
Frequency of Issuance
Regular borrower in public market
New or infrequent issuer of debt
MarketAwareness
Active secondary market with
wide investor base
Little or no institutional base, but growing
dealer interest
Croft Qualft
Rating
'AA' or better
'A- category or lower
Pledged Revenues
General taxes
to o'ect supported revenues
Security Structure
Conventional resolution and cash
flow; rate covenant and coverage
Unusual or weak covenants:
subordinated debt
Trend
Stable
Declining or under stress
Market Conditions
Interest Rates
Stable, predictable market
Volatile or declining market
Demand
Strong investor demand, good
liquidity, light forward calendar
Oversold market, heavy supply; coupon,
structure or maturity requirements not
favored in current market
Dom sbucmrs
Tax Status
Tax-exempt, no concerns
Taxable
Debt Instrument
Traditional serial and term. full-
coupon bontls
Aggressive use of innovative bond
structuring, derivative products, swaps,
or variable-nde debt instruments
Use of Underwrders
Broad market participation
Ability to select "best qualified banker
and direct business to local or regional
firms
Investors
Process blind to ultimate
investors
Sale can be managed to achieve wide
distribution or targeted allotments; can
give priority to retail/ local investors
Pre -Marketing
Limited need for pre -marketing
Speck pre -sale activity to educate
investors
Flexibildy in Timing
Less flexibility necessary
Greater flexibility in timing
Fine Timing Structure
Limited options given to ladders
Unlimited ability to fine-tune
Cant
Gross Spread
Reflected in winning (lowest TIC)
bid. Generally dependent on
supply and demand.
Spreads are negotiated within a range of
comparable transactions and issuer
standards.
Interest Rate
Highest market price for
commodity offered on day of sale
Best match of product with specific
investor demand
Preparodon
Resolution1stuctu ,
CredittSecurily features fairly
standard, allowing Issuer o
determine preference for
managing
Professional banking support and more
direct marketing input in balancing
security for investor vs. flexibility for
issuer
Disclosure
Issuer relies on own program
disclosure
Underwriterscounsel assists in the
preparation of official statement
3 of
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