HomeMy WebLinkAbout2021/01/12-Attachments-M&C 21-0012City of Fort Worth, Texas
Mayor and Council Communication
DATE: 01/12/21 M&C FILE NUMBER: M&C 21-0012
LOG NAME: 13FIN ADVISOR AMEND 2021
SUBJECT
(ALL) Authorize Amendments to Existing Agreements with Hilltop Securities, Inc. and Estrada Hinojosa & Company, Inc. for Financial Advisory
Services and with HTS Continuing Disclosure Services, a Division of Hilltop Securities, Inc., and Hilltop Securities Asset Management, LLC for
Continuing Disclosure and Arbitrage Rebate Services for the Financial Management Services Department with Amendments Extending the Term
of Each Agreement
RECOMMENDATION:
It is recommended that the City Council authorize the execution of necessary amendments to existing Agreements with Hilltop Securities, Inc.
(formerly known as FirstSouthwest) and Estrada Hinojosa & Company, Inc. for the provision of financial advisory services and with HTS Continuing
Disclosure Services, a Division of Hilltop Securities, Inc., and Hilltop Securities Asset Management, LLC for continuing disclosure and arbitrage
rebate services for the Financial Management Services Department, with amendments extending each agreement for an additional year ending
January 31, 2022.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to authorize amendments to existing Agreements to allow the current providers to
continue delivering financial advisory, arbitrage rebate compliance, and continuing disclosure services for the City. As a result of the unanticipated
City Hall financing transaction, staff recommends for City Council to authorize amendments to the above mentioned contracts for an additional one
year period ending January 31, 2022. This will ensure continuity of these critical services as staff works diligently to complete the City Hall
financing transaction and as staff begins preparation work for the upcoming spring debt program.
On July 23, 2013, (M&C C-26350) the City Council authorized contracts with Hilltop Securities, Inc. (formerly known as FirstSouthwest) (City
Secretary Contract (CSC) No. 45144) and Estrada Hinojosa & Company (CSC No. 45274) to provide financial advisory services and with Hilltop
Securities Asset Management, LLC (CSC No. 45387) and HTS Disclosure Services, a Division of Hilltop Securities (CSC No. 45200) to provide
arbitrage rebate compliance services and continuing disclosure services to the City.
On June 23, 2020, (M&C 20-0442) the City Council authorized amendments to the above mentioned contracts under the same terms and
conditions until January 31, 2021.
Hilltop Securities, Inc. and Estrada Hinojosa & Company, Inc., have satisfactorily served as the City's co -financial advisors for over two decades.
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. In accordance with the current contract, the fee will be split 65/35 between the two firms, respectively.
Typically, no charges for financial advisory services related to bond transactions are incurred unless bonds are actually sold. Funds required to pay
financial advisory fees will be available from proceeds of bond sales and/or participating operating funds. 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 and senior vice presidents or administrative personnel. An individual engagement letter will be executed for each
special project compensated on an hourly basis.
Arbitrage rebate compliance services will be provided by Hilltop Securities Asset Management, LLC, and HTS Disclosure Services, a Division of
Hilltop Securities, Inc., will provide continuing disclosure services. Disclosure services will be compensated at a rate of $2,500.00 per year for
assistance in preparation and distribution of each annual report and the amount of $3,500.00 per year for distribution of audited financial
statements. Funds required to pay arbitrage calculation and continuing disclosure fees will be paid from the General Fund and General Debt
Service Fund. Arbitrage rebate compliance services will be compensated at a rate of $1,400.00 per issue per computation year. Additional fees
would apply for specialized arbitrage -related services, if needed, in connection with an IRS refund request or if assistance is required to respond
to IRS information requests.
M/WBE Office - Hilltop Securities, Inc. the lead financial advisor, and Estrada Hinojosa & Company, Inc., 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.
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that funds will be available from proceeds of bond sales and/or participating operating funds upon issuance of
bonds, and that funds are currently available in the General Fund and General Debt Service Fund as previously appropriated, to support the
approval of the recommendation and execution of the contracts. Prior to any expenditure being incurred, the Financial Management Services
Department has the responsibility to validate the availability of funds.
Submitted for City Manager's Office by. Jay Chapa 5804
Originating Business Unit Head: Reginald Zeno 8517
Additional Information Contact: Alex Laufer 2268