1999-54
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AN AGREEMENT BETWEEN THE CITY OF CLERMONT AND PUBLIC FINANCIAL
MANAGEMENT, INC. FOR FINANCIAL ADVISORY SERVICES
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This agreement, effective this ~ day of September 1999, by and between the City of
Clermont, Florida (hereinafter called the "City") and Public Financial Management, Inc,
(hereinafter called the "Financial Advisor" or "PFM"), sets forth the tenns and conditions under
which the Financial Advisor shall provide services to the City.
WITNESSETH
WHEREAS, the City issued a Request for Proposal for Financial Advisory Services and
PFM was selected by the City; and PFM has been providing Financial Advisory Services to the
City since January, 1995; and
WHEREAS, the City is desirous of obtaining the services of a financial advisor to the
City to develop and assist in implementing strategies to meet its current and long-term operations
and capital financing needs and render assistance in the preparation and marketing of debt
transactions by the City; and
WHEREAS, the Financial Advisor represents that it is capable of providing the necessary
financial consulting services,
NOW, THEREFORE, in consideration of the above mentioned premises and for the
purposes of this Agreement and the various covenants, conditions, terms and provisions which
follow:
I.
SCOPE OF SERVICES
PFM sha1l provide, upon request of the City Manager or City Finance Director services
related to financial planning and policy development and services related to debt issuance. The
services provided shall include but not necessarily be limited to the following:
1.
Services related to the Financial Plan nine and Policy Development upon
request of the City:
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Assist the City in the fonnulation of Financial and Debt Policies and
Administrative Procedures.
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Review current debt structure, identifying strengths and weaknesses of
structure so that future debt issues can be structured to maximize ability to
finance future capital needs. This will include, but not be limited to,
reviewing existing debt for the possibility of refunding that debt to provide
the City with savings.
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Analyze future debt capacity to determine the City's ability to raise future
debt capital.
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Assist the City in the development of the City's Capital Improvement
program by identifying sources of capital funding for infrastructure needs,
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Assist the City with the development of the City's Financial Plan by assessing
capital needs, identifying potential revenue sources, analyze financing
alternatives such as pay-as-you-go, lease/purchasing, short-term vs, long-term
financings, assessments, user fees, impact fees, developer contributions,
public/private projects, and grants and provide analysis of each alternative as
required as to the budgetary and financial impact.
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Review the reports of accountants, independent engineers and other project
feasibility consultants to ensure that such studies adequately address
technical, economic, and financial risk factors affecting the marketability of
any proposed revenue debt issues; provide bond market assumptions
necessary for financial projections included in these studies; attend all
relevant working sessions regarding the preparations, review and completion
of such independent studies; and provide written comments and
recommendations regarding assumptions, analytic methods, and conclusions
contained therein.
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Develop, manage and maintain computer models for long-term capital
planning which provide for inputs regarding levels of ad valorem and non-ad
valorem taxation, growth rates by operating revenue and expenditure item,
timing, magnitude and cost of debt issuance, and project operating and capital
balances, selected operating and debt ratios and other financial performance
measures as may be determined by the City.
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Provide debt services schedules reflecting varying interest rates, issue sizes,
and maturity structures as these are needed for feasibility consultants or for
related City fiscal planning; and
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Attend meetings with staff, consultants and the City.
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Review underwriter's proposals and submit a written analysis of same to the
City,
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Undertake any and all other financial planning and policy development
assignments made by the City regarding bond and other financings, and
financial policy including budget, tax, cash management issues and related
fiscal policy and programs.
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Assist the City in preparing financial presentations for public hearings and/or
referendums.
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Provide special financial services as requested by the City.
2.
Services Rela~bt Transact.ons (Includes short term gnancines. notes.
loans. letters of credit. line of credit and bonds). Upon the reQuest of the
City:
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Analyze financial and economic factors to determine if the issuance of bonds
is appropriate.
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Develop a financing plan in concert with City's staff which would include
recommendations as to the timing and number of series of bonds to be issued.
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Assist the City by recommending the best method of sale, either as a
negotiated sale, private placement or a public sale. In a public sale, make
recommendation as to the determination of the best bid, In the event of a
negotiated sale, assist in the solicitation, review and evaluation of any
investment banking proposals, and provide advice and information necessary
to aid in such selection.
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Advise as to the various financing alternatives available to the City,
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Develop alternatives related to Debt Transaction including evaluation of
revenues available, maturity schedule and cash flow requirements.
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Evaluate benefits of Bond Insurance and/or security insurance for Debt
Reserve Fund. If appropriate, develop credit rating presentation and
coordinate the overall presentation to rating agencies,
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Assist the City in the procurement of other services relating to debt issuance
such as Printing, Paying Agent, Registrar, etc.
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Identify key bond covenant features and advise on provisions to be included
in bond resolutions regarding security, creation of reserve funds, flow of
funds, redemption provisions, additional parity debt test, etc.; review and
comment on successive drafts of bond resolutions.
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Review the terms, conditions and structure of any proposed debt offering
undertaken by the City and provide suggestions, modifications and
enhancements where appropriate and necessary to reflect the constraints or
current financial policy and fiscal capability.
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Assist in the preparation of the preliminary and final official statement and
coordinate with the City the appropriate data, disclosure infonnation and
pertinent factors regarding the City and the proposed financing program,
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Provide regular updates of tax-exempt bond market conditions and advise the
City as to the most advantageous timing for issuing its debt.
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Advise the City on the condition of the bond market at the time of sale,
including volume, timing considerations, competing offerings, and general
economic considerations.
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Assist and advise the City in negotiations with investment banking groups
regarding fees, pricing of the bonds and final terms of any security offering,
and make in writing definitive recommendations regarding a proposed
offering. Provide assurance that the pricing of the bonds is the lowest price
based on existing market conditions.
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Arrange for the closing of the transaction including, but not limited, to bond
printing, signing and final delivery of the bonds.
If the transaction is competitive, the services of the financial advisor will be modified to
reflect that process.
3.
Special Services. Upon reQuest of the City:
PFM may provide other services which shall include, but not be limited to, the following:
1.
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II.
Impact fee financial analysis
Grantsmanship
Rate analysis
Management analysis
Referendum assistance
Legislative initiatives
Project assessment analysis
Implementation of revenue enhancement programs
Arbitrage and rebate services
Financial analysis of projects being developed by engineer/architect
Negotiate on behalf of the City for proposed projects
Services for acquisition of Private Utility
WORK SCHEDULE
The services of the Financial Advisor are to commence as soon as practicable after the
execution of this Agreement and a request by the City for such service, and shall be undertaken
for each financial transaction or project and completed as to assure completion in a manner and
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time which are in accordance with the purpose of this Agreement. Services which are not related
to a particular transaction shall be completed as agreed between the City and the Financial
Advisor,
III.
FINANCIAL ADVISORY COMPENSATION
For the services described, PFM's professional fees and expenses shall be paid as follows:
1.
For services related to financial planning, policy development and financial
analysis, PFM shall receive hourly rates as listed below. Fees for support staff are
included in the hourly rates for professionals. Services will be billed monthly.
Experience Level
Hourlv Rate
Managing Director
Senior Managing Consultant
Consultant
$175
160
130
2,
For services related to the issuance of the City's proposed Water and Wastewater
Revenue Bonds, Series 1999, PFM proposes to charge a flat fee of $16,250, with
future issues or refundings to be negotiated at a later date. For structuring and
bidding any escrow associated with the proposed Series 1999 Bonds, PFM
proposes to charge a fee not-to-exceed $3,500, PFM does reserve the right to
negotiate additional fees for the proposed Series 1999 Bonds if there are
unforeseen circumstances associated with the Series 1999 Bond, such as the
project is delayed, the scope of services is expanded, the bonds are competitively
bid, etc. Fees to be billed at closing of transaction.
3.
For services related to Special Services, PFM shall negotiate in advance a not-to-
exceed amount and a specific completion date,
Reimbursable Expense
In addition to the above, PFM will be compensated for necessary, reasonable, and
documented out-of-pocket expenses incurred for travel, meals, lodging,
reproductions, telephone, mail, and other ordinary cost and any actual
extraordinary cost for graphics, printing, data processing and computer time which
are incurred by PFM. Appropriate documentation will be provided,
The City and the Financial Advisor reserve the right, during the term of this
Agreement, to review the method of compensation.
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IV.
TERMS AND TERMINATION
This agreement shall remain in effect unless canceled in writing by either party upon
thirty (30) days written notice to the other party.
V.
ASSIGNABILITY
The Financial Advisor shall not assign any interest in this Agreement or subcontract any
of the work performed under the Agreement and shall not transfer any interest in the same
without the prior written consent of the City.
VI.
INFORMATION TO BE ]FURNISHED TO THE FINANCIAL ADVISOR
All information, data, reports, and records in the possession of the City necessary for
carrying out the work to be performed under this Agreement shall be furnished to the Financial
Advisor without charge by the City, and the City shall cooperate with the Financial Advisor in
every way possible,
VII.
NOTICES
When either party desires to give notice unto the other, it must be given by written notice,
sent by registered United States mail, with return receipt requested, addressed to the party for
whom it is intended, at the place last specified, and the place for giving notice in compliance
with the provisions of this paragraph. For the present, the parties designate the following as the
respective places for giving notice, to-wit:
FOR CITY:
Mr. Wayne Saunders, City Manager
Mr. Joseph Van Zile, Director of Finance
1 Westgate Plaza
P.O. Box 120219
Clermont, Florida 34712-0219
FOR THE FINANCIAL ADVISOR:
Ms. Lavon P. Wisher, Managing Director
Public Financial Management, Inc.
10100 Deer Run Farms Road
Suite 201
Fort Myers, FL 33912
VIII. TITLE TRANSFER
The products of this Agreement shall be the sole and exclusive property of the City upon
completion or other termination of this Agreement. The Financial Advisor shall deliver to the
City copies of any and all material pertaining to this Agreement.
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IX.
FINANCIAL ADVISOR'S REPRESENTATIVES
A. Assignment of Named Individuals
The following named individuals from PFM shall provided the services set forth in this
Agreement: PFM shall, from time to time, amend team members.
Lavon Wisher, Managing Director, Engagement Manager
Patti Garrett, Senior Managing Consultant
Randal Webb, Consultant
Other Team Members:
David Moore, Senior Managing Consultant
Virginia Rutledge, Senior Managing Consultant
David Miller, Senior Managing Consultant
Hugh Marble, Consultant
John Grady, Consultant
B. Changes in Staff Requested by the City
The City has the right to request, for any reason, PFM to replace any member of the
advisory staff. Should the City make such a request, PFM shall promptly suggest a substitute for
approval by the City.
IN WITNESS THEREOF, the City and Financial Advisory have executed this Agreement
as of the day and year herein above written
CLERMONT, FLORIDA
BY:~
O[D~URVILLE, JR., Mayor
DATE: -óZ:?-5;;
PUBLIC FINANCIAL MANAGEMENT, INC,
JJ afHn1 &. Lu ~
Managing Director
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