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HomeMy WebLinkAboutContract 45200 (2)AGREEMENT CITsEcRETARYi45wo_Y FOR CONTRACi PIO. CONTINUING DISCLOSURE SERVICES BY AND BETWEEN CITY OF FORT WORTH, TEXAS (HEREINAFTER REFERRED TO AS THE "ISSUER") AND FSC CONTINUING DISCLOSURE SERVICES, A DIVISION OF FIRST SOUTHWEST COMPANY In connection with the sale and delivery of certain bonds, notes, certificates, or other municipal obligations (the "Bonds"), the Issuer has made certain undertakings to disclose to the investing public, on a periodic and continuing basis, certain information, as more fully set forth in such undertakings and as contemplated by the provisions of Securities and Exchange Commission Rule 15c2-12, as amended (the "Rule"). The Issuer has agreed to engage FSC Continuing Disclosure Services, a Division of First Southwest Company ("Continuing Disclosure Services"), to assist it with these continuing disclosure obligations, for the consideration and on the terms and conditions set forth herein, including the preparation and submission of annual reports (the "Annual Reports") and the reporting of certain specified events (the "Events"), which are set forth in the Issuer's undertakings, the Rule and in Subsection 2c. below. This agreement (the "Agreement") between the Issuer and the Continuing Disclosure Services shall be effective in accordance with the terms of Section 8 "Effective Dates of Agreement" as provided for below. The parties agree as follows: 1. This Agreement shall apply to all issues of Bonds delivered subsequent to the effective date of the continuing disclosure requirements as specified in the Rule, to the extent that any particular issue does not qualify for exceptions to the continuing disclosure requirements of the Rule. 2. Continuing Disclosure Services agrees to perform the following in connection with providing services relating to the Issuer's continuing disclosure obligations: a. assist the Issuer in compiling data determined or selected by the Issuer to be disclosed; b. assist the Issuer in identifying other information to be considered by Issuer for continuing disclosure reporting purposes; c. assist the Issuer in preparing the presentation of such information, to include Annual Reports containing financial information and operating data of the type provided in the final official statement of applicable issues, and notices concerning the occurrence of the specified Events and other items listed below: RECEIVED DEC 1821113 1) Principal and interest payment delinquencies 2) Non-payment related defaults FSC — Continuing Disclosure Services Page 1 of 6 ©C'9 !1l! 01 1 l )g A `i¶ 2K it 3) Unscheduled draws on debt service reserves reflecting financial difficulties 4) Unscheduled draws on credit enhancements reflecting financial difficulties 5) Substitution of credit or liquidity providers, or their failure to perform 6) Adverse tax opinions or events affecting the tax-exempt status of the security 7) Modifications to rights of security holders 8) Bond calls 9) Defeasances 10) Release, substitution, or sale of property securing repayment of the securities 11) Rating changes 12) The issuance by the IRS of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the securities of the Issuer 13) Tender offers 14) Bankruptcy, insolvency, receivership or similar proceeding 15) Mergers, consolidations, acquisitions, the sale of all or substantially all of the assets of the obligated person or their termination 16) Appointment of a successor or additional trustee or the change of the name of a trustee 17) Noncompliance with the Rule d. assist the Issuer in distributing or filing, in the Issuer's name, the above mentioned Annual Reports, notices and audited annual financial statements to the Nationally Recognized Municipal Securities Infoimation Repository ("NRMSIR') which is the Municipal Securities Rulemaking Board (` MSRB"), appropriate State Information Depository ("SID '), rating agencies, and other entities, as required by the Issuer's continuing disclosure obligations. e. provide to the Issuer confirmation of distribution or dissemination of reports and notices. 3. Issuer acknowledges and agrees to the following: Continuing Disclosure Services will be compensated for the performance of services with respect to assisting the Issuer with preparation and submission of continuing disclosure reports in accordance with the schedule as set forth below: 1) $1,500 per year for assistance in distribution of audited annual financial statements, if Issuer is not exempt from filing with the SID and/or NRMSIR or 2) $3,500 per year for assistance in preparation and distribution of each annual report and assistance in distribution of audited annual financial statements, if Issuer is not exempt from filing reports with the SID and NRMSIR, plus 3) $100 minimum fee for assistance in preparation and distribution of each notice concerning occurrence of an Event or noncompliance with the Rule; in addition, a fee of $125 per hour for all time in excess of five (5) hours FSC — Continuing Disclosure Services Page 2 of 6 spent in assisting with preparation and distribution of each notice concerning occurrence of an Event or noncompliance with the Rule. b. Issuer will provide to Continuing Disclosure Services, and Continuing Disclosure Services shall be entitled to rely upon, all information regarding the issuance of the Bonds, including the final official statement and the Issuer's commitment or undertaking regarding continuing disclosure as contained in the resolution authorizing issuance of the Bonds or separate contract or agreement; annual financial infon nation and operating data of the type provided in the final official statement; information concerning the occurrence of an Event or noncompliance with the Rule; and any other information necessary to prepare continuing disclosure reports. c. Issuer will provide to Continuing Disclosure Services, and Continuing Disclosure Services shall be entitled to rely upon, annual written confirmation of all outstanding Bond issues for which the Issuer has a continuing disclosure obligation. d. Issuer will provide to Continuing Disclosure Services all information required for preparation of each Annual Report, including financial information and operating data of the type provided in the final official statement and other information deemed necessary by Issuer, no later than 45 days prior to the date on which each Annual Report is due. e. Issuer will provide full and complete copies of the audited annual financial statement no later than ten (10) days prior to the date on which it is due. f. Issuer will notify Continuing Disclosure Services immediately upon the occurrence or immediately upon the Issuer's knowledge of the occurrence of each Event or noncompliance with the Rule, and the Issuer will immediately provide all information necessary for preparation of the notice of occurrence of each such Event or noncompliance with the Rule. g. Issuer shall have the sole responsibility for determining the disclosure to be made in all cases. The Issuer shall review and provide approval of the content and foriu of all continuing disclosure reports and notices, with the exception of the following, which will be filed automatically on the Issuer's behalf, unless the Issuer has notified Continuing Disclosure Services otherwise in writing* bond calls, defeasances, and rating changes In the event of a disagreement between the Issuer and Continuing Disclosure Services regarding the disclosure to be made, either the Issuer or Continuing Disclosure Services may, but neither is obligated to, terminate this Agreement by written notice to the other party. h A separate Annual Report will be prepared and distributed for each type of security pledge in effect for outstanding financing issues or Bonds of the Issuer. i. Issuer will inform Continuing Disclosure Services of the retirement of any Bonds included under the scope of this Agreement within 30 days of such retirement 4 In the event that Continuing Disclosure Services and the Issuer determine that advice of counsel is appropriate with respect to any question concerning disclosure, then (i) the Issuer may consult with its counsel, or (ii) the Issuer may authorize Continuing Disclosure Services to seek legal FSC — Continuing Disclosure Services Page 3 of 6 advice from independent counsel regarding the disclosure. The Issuer agrees that it shall be responsible for the fees and expenses of its own counsel. The Issuer agrees to reimburse Continuing Disclosure Services the fees and expenses of independent counsel if paid by Continuing Disclosure Services, for advice rendered pursuant to authorization by the Issuer. 5. To the extent allowed by law, the Issuer agrees to hold harmless and to indemnify Continuing Disclosure Services and its employees, affiliates, officers, directors and agents from and against any and all claims, damages losses, liabilities, reasonable costs and expenses whatsoever (including attorneys' fees and expenses) which Continuing Disclosure Services may incur by reason of or in connection with the distribution of information in the disclosure reports in accordance with this Agreement, except to the extent such claims, damages, losses, liabilities, costs and expenses result directly from Continuing Disclosure Services' willful misconduct, negligence, or gross negligence in the distribution of such information. In order to provide for just and equitable contribution, if a claim for indemnification pursuant to the foregoing indemnification provision is made, but it is determined in an appropriate proceeding that such indemnification may not be enforced, even though the express provisions hereof provide for indemnification in such case, then the Issuer, on the one hand, and Continuing Disclosure Services, on the other hand, shall contribute to the claims, damages losses liabilities, costs and expenses to which Continuing Disclosure Services may be subject in accordance with the relative benefits received by Issuer, on the one hand, and Continuing Disclosure Services, on the other hand, and also the relative fault of Issuer, on the one hand, and Continuing Disclosure Services, on the other hand, in connection with the acts or omissions which resulted in such claims, damages, losses, liabilities costs or expenses; and relevant equitable considerations shall also be considered. Notwithstanding the foregoing, Continuing Disclosure Services, shall not be obligated to contribute any amount hereunder that exceeds the amount of fees previously received by Continuing Disclosure Services pursuant to this Agreement 6. The fees due to Continuing Disclosure Services in providing Continuing Disclosure Services shall be calculated in accordance with Section 3a. of this Agreement The fees will be invoiced each year during the term of the Agreement, unless terminated earlier, and fees will be payable within 30 days of receipt of invoice, except that the fees for the first year's service will be invoiced and be payable upon acceptance of this Agreement. In addition, the Issuer agrees to reimburse Continuing Disclosure Services for the following expenses* (i) legal fees and expenses of counsel incurred by Continuing Disclosure Services pursuant to the terms of Section 4. above, and (ii) other out-of-pocket expenses reasonably incurred by Continuing Disclosure Services in performing its obligations hereunder. Continuing Disclosure Services shall annually submit a written invoice for reimbursable expenses incurred during the previous twelve-month period. 7. Bonds Issued Subsequent to Agreement: The provisions of this Agreement will include additional municipal bonds and financings (including financing lease obligations) issued during the stated term of this Agreement, if such bonds are subject to the continuing disclosure requirements In this connection, the Issuer agrees that the Issuer will notify Continuing Disclosure Services of any municipal bonds and financing (including financing lease obligations) issued by the Issuer during any fiscal year of the Issuer during the term of this Agreement, and will provide Continuing Disclosure Services with such information as shall be FSC — Continuing Disclosure Services Page 4 of 6 necessary in order for Continuing Disclosure Services to perform the services contracted for hereunder. 8 Effective Dates of Agreement. This Agreement shall become effective as of August 1, 2013 and remain in effect thereafter for a period of one (1) year from the date of acceptance. Unless (i) terminated prior to the anniversary date or (ii) Continuing Disclosure services or Issuer shall notify the other party in writing at least thirty (30) days in advance of the applicable anniversary date that this Agreement will not be renewed, this Agreement will be automatically renewed on the first and second anniversary of the date hereof for an additional one-year period This agreement may be teiuuinated with or without cause by the Issuer or Continuing Disclosure Services upon thirty (30) days written notice to the other party In the event of such termination, it is understood and agreed that only the amounts due to Continuing Disclosure Services for services provided and expenses incurred to and including the date of termination will be due and payable. No penalty will be assessed for termination of this Agreement In the event this Agreement expires or is terminated prior to its stated term, all records provided to Continuing Disclosure Services by the Issuer shall be returned to the Issuer as soon as practicable. In addition, the parties hereto agree that upon termination of this Agreement Continuing Disclosure Services shall have no continuing obligation to the Issuer regarding any service contemplated herein. Notwithstanding the foregoing all indemnification, hold harmless and/or contribution obligations, pursuant to Section 5 of this Agreement, shall survive any termination regardless of whether the termination occurs as a result of the expiration of the term hereof or the Agreement is terminated sooner by either the Issuer or Continuing Disclosure Services under this Section 8, pursuant to Subsection 3.g., or otherwise. Provision of Notices Provision of information, delivery of certification and notices of Events and noncompliance with the Rule, unless directed otherwise in writing, shall be sent to: City of Fort Worth, Texas 1000 Throckmorton Street Fort Worth, Texas 76102 Susan Alanis Assistant City Manager Phone* (817) 392-6222 Fax: (817) 392-6134 Email: susan.alanis@fortworthtexas.gov FSC Continuing Disclosure Services, a Division of First Southwest Company 325 North St. Paul Street, Suite 800 Dallas, Texas 75201 Attention' Julie James Vice President for Continuing Disclosure Phone' (214) 953-8701 Fax: (214) 953-4050 Email: juhe.james@firstsw com FSC — Continuing Disclosure Services Page 5 of 6 Acceptance of Agreement 9. This Agreement is submitted in triplicate originals. When accepted by the Issuer, it will constitute the entire Agreement between the Issuer and Continuing Disclosure Services for the purposes and the consideration specified above. Acceptance will be indicated on all copies and returned to Continuing Disclosure Services. An executed original will be returned for your files. Respectfully submitted, FSC Continuing Disclosure Services, a Division of First Southwest Company t By ill A. Feinberg Chairman and Chief Executive d5j By 3-u4 James CY Vice President Date ACCEPTANCE CLAUSE The above and foreping hin all t ings accepted and approved by the City of Fort Worth, Texas, on this the day of _ 013. OFFICIAL RECORD \CITY SECRETARY ET. WORTH, TX Authorized Representative -Cowl Title ROVED AS TO FO AN/9 �GALITV: ASSJ' TANT CITY ATTO Ote Cs /6 357) Attet,b FSC —Continuing Disclosure Services Y\ aid Page 6 of 6 M&C - Council Agenda Page 1 of 2 City of Fort Worth, Texas Mayor and ouncil Communication COUNCIL ACTION: Approved on 7/23/2013 DATE: Tuesday, July 23, 2013 LOG NAME: 1313 FA CONTRACT SUBJECT: REFERENCE NO.: **C-26350 Authorize Necessary and Related Agreements with First Southwest Company, First Southwest Asset Management, Inc., and Estrada Hinojosa & Company, Inc., for the Provision of Financial Advisory, Arbitrage Rebate and Continuing Disclosure Services (ALL COUNCIL DISTRICTS) RECOMMENDATION: It is recommended that the City Council: 1. Authorize the execution of necessary and related Agreements with First Southwest Company, First Southwest Asset Management, Inc., and Estrada Hinojosa & Company, Inc., for the provision of financial advisory, arbitrage rebate and continuing disclosure services; and 2. Authorize a commencement date of August 1, 2013 and expiration date of July 31, 2014 with two one- year renewal options for each Agreement. DISCUSSION: First Southwest Company and Estrada Hinojosa & Company, Inc. (Estrada Hinojosa), have satisfactorily served as the City's co -financial advisors for over a decade. During this same period, First Southwest Asset Management, Inc., and First Southwest Company's FSC Disclosure Services Division have provided arbitrage rebate compliance services and continuing disclosure services to the City. Staff is recommending that the City continue these relationships with First Southwest Company serving as lead financial advisor and Estrada Hinojosa, a minority -owned firm, acting as co -financial advisor. Approval of the Agreements will ensure continuity as the City enters its traditional debt -issuance season. The fee structure for financial advisory services will be a base fee in the amount of $35,000 00 plus $0.75 per $1,000.00 denomination for each series of bond issues. As in the current contract, the fee will be split 65/35 between the two firms, respectively. First Southwest Company, the lead financial advisor, and Estrada Hinojosa, a certified minority -owned firm and the co -financial advisor are in compliance with the City's BDE Ordinance by committing to the work fees on bond transactions being split 65/35 between the two firms respectively on this project. Typically, no charges for financial advisory services related to bond transactions are incurred unless bonds are actually sold. The Agreements will also provide for the financial advisors to provide special financial consulting work not directly related to a bond sale with compensation paid based on an hourly rate ranging from the amount of $75.00 for work performed by administrative assistants to the amount of $250.00 per hour for work performed by managing directors, executive vice presidents or senior vice presidents. An individual engagement letter will be executed for each special project compensated on an hourly basis. Arbitrage rebate compliance services will be provided by First Southwest Asset Management, Inc., and FSC Disclosure Services, a Division of First Southwest Company, will provide continuing disclosure services. Disclosure services will be compensated at a rate of $2,500.00 per year for assistance in http://apps.cfwnet.org/ecouncil/printrnc.asp?id=18709&print=true&DocType=Print 12/3/2013 M&C - Council Agenda Page 2 of 2 preparation and distribution of each annual report and the amount of $3,500.00 per year for distribution of audited financial statements. Arbitrage rebate compliance services will be compensated at a rate of $1,400 00 per computation year. Additional fees would apply for specialized arbitrage -related services, if needed, in connection with an IRS refund request of commercial paper calulations. The costs for those services are reflected in the fee schedule, which is attached. FISCAL INFORMATION / CERTIFICATION: The Financial Management Services Director certifies that funds required to pay financial advisory fees will be available from proceeds of bond sales, appropriate debt service funds, and/or appropriate operating funds. FUND CENTERS: TO Fund/Account/Centers CERTIFICATIONS: Submitted for City Manager's Office bv: Originating Department Head: Additional Information Contact: ATTACHMENTS 1. CFW 2013 Fee Schedule.pdf (Public) 2. example.pdf (CFVV Internal) FROM Fund/Account/Centers PE47 554010 0132000 GDO6 554010 0132000 Susan Alanis (8180) Jay Chapa (8517) Lisa Parks (6630) $0.00 $0.00 http://apps.cfwnet.Orb/ecounci1/printme.asp?ici=18709&prnnt=true&DoeType=Print 12/3/2013