Res 080-85 6/18/1985 J
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RESOLUTION NO. j()-%c_S
RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE A
CONTRACT WITH HERBERT R. SMITH, INC. , FOR
THE PERFORMANCE OF PROFESSIONAL FINANCIAL
ADVISORY SERVICES.
WHEREAS, it is desired to enter into a contract with Herbert
R. Smith, Inc. , for the performance of financial advisory
services for the Holliday Creek Bond Issue.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF WICHITA FALLS, TEXAS, THAT:
That certain contract, a copy of which is attached hereto,
is hereby approved, and the Mayor of the City of Wichita Falls is
authorized to execute the same for the City of Wichita Falls.
PASSED AND APPROVED this the 18th day of June, 1985.
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A Y O R 40110117e://
ATTEST:
City Clerk
TI . . . ..
I INVESTMENT ADVISORS
Herbert R. Smith, Incorporated
1105 Holliday•Wichtla Falla.Ta:u 76301•Phone 8174235565
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June 6, 1985
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} FINANCIAL ADVISORY CONTRACT
il The Honorable Gary Cook
and City Council
1 City of Wichita Falls
1301 Sixth Street
Wichita Falls, Texas 76301
1 Gentlemen:
1. We understand you are contemplating the issuance of
1 securities of the kinds , in the amounts , and for the purposes
indicated as follows:
1 Refunding the outstanding general obligation bonds
for the City and issue new bonds for the Holliday
Creek project.
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and in connection with the issuance of these securities , you
I desire this proposal from us to perform professional services
in the capacity of Financial Adviser for the CITY OF WICHITA
FALLS (hereinafter called "Issuer" ) .
i 2. By this proposal , we offer our professional services
and our facilities as Financial Adviser for the issuance and
sale of the above-described securities , and in that capacity we
j agree to perform the following duties and to perform such other
duties , as , in our judgement , may be necessary or advisable:
a . We will make a survey of the financial resources of
the Issuer to determine the extent of its borrowing
capacity. This survey will include an analysis of the
existing debt structure as compared to existing and
1 orojected sources of income which may be pledged to
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secure navment of dent service , and °Tnere appropriate ,
will include a study of the trend of the assessed
valuation of the Issuer , the Issuer ' s taxing Dower ,
and the present and estimated future taxing `
requirements . If the revenues of a system or facility
are to be pledged to reoavment of the securities in
Question , the survey will take into account any
outstanding obligations which are payable from the net
revenues thereof , additinnaL net revenues to arise
from any proposed rate increase and the additional net
revenues as projected by your consulting engineers as
a result of the improvements to he financed by the
securities in question . We will also take into
account Your future rinancina needs and operations as
projected by your staff and/or your consulting
engineers and ocher experts .
b. On the basis of the information developed by the
survey described in the above and foreooinQ paragraph ,
and on the basis of other information and exoeri once
available to us , we will submit our written
recommendations on the financing in question . Our
plan will include recommendations as to the date of
issue , interest r_ayment dates , schedule of grinoioel
r outi nn of prior payment and any other
maturities ,,
re.-essery additional security provisions designed to
make the issue more attractive to investors . ,A11
recommendations will be based on our best professional
judgment , with the coal of designing securities which
can be sold under terms most advantageous to Issuer ,
and at the lowest interest cost consistent with all
other considerations .
c . We will advise you of current bond market conditions ,
forthcomina bond issues , and other aeneral information
and economic data which might normally be expected to
influence the interest rates or biddina conditions , so
that the date for the sale of tie securities c=n be
set a `ice whi c^ , in our opinion , -di ll ne tavorable .
d . If it is necessary to hold an election to authorize
the securities , we will , under the direction of the
c and ar_tornet;Ts , assist in coordinatina the assembly
�nr! transmittal to the bond attorneys of such data as
^av he r°Allred for the cr. en.lrat' on of the necessary
peti ttons , orders , rep '-1 )- ,itinnS , notices and
certiticates in connection wirn trio eLee.tion ,
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`:le will coordinate the preparation and submission of
the Official T1otire of Gale , the Official Statement or
Offering Statement , and such other market documents
which you may recruire . 7e will also su?ervise
Preparation of the uniform hid form , containing
provisions recognized by the municipal securities
1 industry as being consistent .iith the securities
offered for sale . 'tie will submit to You all such
offering documents , including the Official Statement ,
for your prover examination , approval and
certification . After such examination , aoDroval and
certification , we will furnish you with a supply of
4 such documents and shall mail a set of the same to a
list of prospective bidders , a copy of -•lnicn list
shall be submitted to you ucon recuest . 4e. will also
supply sufficient copies of tie Official Statement or
I Offering Statement to the purchaser of the securities
in accordance with tie terms of the Notice of Sale .
f . rEe will 773 'ce recommendations to the Issuer on the
matter of bond rating (s ) for the proposed issue , and
when directed by you , shall coordinate the preparation
of such information as in our opinion is recuired for
submission to the rating agency (ies ) . In those cases
where the advisability of personal presentation of
information to the bond rating agencies may be
1 indicated , c•'ill arrange for sucn personal
presentation .
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g . If the securities are to be sold at public sale , we
will disseminate i nfrr^'ati on to prospective bidders ,
organize such informarinn meetings as in our judgment
may be necessary , and work with oroscective bidders to
1 assist them in timely submitting wooer bids . 'Are will
assist you at the bond sale for the ouroose of
coordinatina the receipt of bids , -end the furnishing
of good faith er.ecks where indicated , and for the
purpose of tabulation and comparison of bids , and will
advise you as to tie nest bid , and will provide our
recommendation as to acceptance or rejection of such
1 bid . As soon as a hid for the bonds shall be accepted
ov you , we will proceed to coordinate the efforts of
all concerned to the end that tne bonds may be
I delivered and ^aid for as exoeditiorlsly as possible .
we shall assist vnu in the :recar=tion of verification
of final closing figures , and when reauested , will
provide suggestions on a program of temoorary
inyoStrnPnr of boPd DroCeedS , in consultation with the
Issuer ' _architect or r`on_aulting Pnnineer ,, consistent
with the construction timetable for t.;'.'' protect .
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7e wi 11 act as your anent_ in arranging for the
printing of the securities , submit same for exeeuri "n
and impression of seal , and attend to their delivery
to the Attorney General_ for nooroval and the
Comptroller of Public niccounts for registration , it t
being understood that title to and ownership of the
printed securities shall be in the Issuer until tnev
are sold and delivered to the purchaser . c
After closing we will deliver to you and your paving
agent (s ) definitive debt records , including a schedule of
annual debt service rechirements on the obligations being
delivered to the purchaser .
2 . we agree to direct and coordinate the entire orooram
of financing herein contemplated . In tnat connection , we
understand that you have retained , or expect to retain , McCa1L ,
Parkhurst & Horton of Dallas , Texas , a firm of recognized
municipal bond attorneys , who will prepare the proceedings and
advise the steps necessary to oe taken to issue the securities
and who will issue an opinion approving their legality . . ;e
will maintain liason with this firm of bond attorneys and snail
assist in all tinancial advisory aspects involved in the
oreoaration of appropriate legal proceedings and documents .
Where the issuance and sale of the securities , and
construction of tne Project in Question , requires the approval
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of any state or governmental agency' , we shall assist you in the
Preparation of all financial information required for inclusion
in anolications for such approval and , when reauested by you ,
shall appear on your behalf to provide aoprooriate testimony at
public hearings herore state and other governmental commissions
and boards . ^:e jai 11 also be available to participate wirh you
in any 7relirilinary conferences with the staffs of any state or
governmental agencies involved , and we will , for qualified
projects , coordinate the preparation of financial assisrance
applications required for state involvement .
t . In addition to the eforestated duties as financial
adviser , FierK- r. r R. Smith , Incorporated will be responsible for
the following in a refundina and/or advance refunding issuance
of bonds:
Determine the proper agent service schedule , interest
cost , and underwritina cost of the issue .
Coordinate with the bond counsel , underwriter and Issuer
the aporonri ate timing of tne bond sale .
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Establish with the U .S. Treasury, in an advance refunding
issue , the amount of Treasury securities to be Purchased
directly from the U .S. Treasury and the amount of Treasury
1 securities to ne purchased in the open (secondary) market .
Select an underwriter for the sale of the bonds after
1/ reviewing experience , expertise , and compatibility in
working with Herbert R . Smith , Incoroorated and the
Issuer .
1 Negotiate , on behalf of the Issuer , with the underwriter ,
to the extent allowed by IRS arbitrage rules , the maturity
structure and coupon selection to insure the lowest
4 possible interest cost for the Issuer . •
Review and make recommended changes in the purchase
1 contract of the underwriter which must be approved by the
City Council .
5. In consideration for the services rendered by us in
1 connection with the issuance and sale of the above described
securities , it is understood and agreed that our tee will be as
follows:
SEE ATTACHED _EXHIBIT A
J In consideration of the above fee , we will assume and be
responsible for the following expenses:
a . Cost of printing the bonds.
1 h . Expenses of obtaining the approving opinion of the
Attorney General of the State of Texas. •
1 ^ . Expenses of compiling information , editing , printing
and disseminating an Official Notice of Sale on bonds
to be sold.
1 d . Expenses of obtaining CUSIP identification numbers
for bonds .
iOur fee and reimbursable expenses shall become due and payable
simultaneously with the delivery of the securities to the
ipurchaser .
g . In the event any bond election be necessary , i F such
election shall fail , the fee due us shall be S-0- ; however ,
i should tie same or similar propositions again ce submitted to
election held within ?a mont `.s r:rnm dare hereof , then at
our nation the agreement covedred by this nr000sa1 shall apply
to anv such securities .
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7. This agreement shall he terminated by the 'eli yery to
the purchaser of all the scour ities covered hereby , whether
deliverd all at one time or in installments .
R . Soecial Conditions . in addition to the terms and
obligations herein contained , this proposal and agreement is
subject to the following special conditions : _a
Herbert R. Smith , Incorporated will make every effort
to have a principal representative at each public or
private informational meeting (as requested by the
City Council) .
Should a personal presentation to rating agencies be
required (per Page 3, paragraph f .) a representative
of Herbert R. Smith , Incorporated will accompany a
delegation of the Issuer to New York for said
presentation. The related expenses of the Herbert R.
Smith, Incorporated representative and the Issuer ' s
delegation shall be paid by the Issuer .
9 . This proposal is submitted in duoticate
originals . when accented by Issure_r , it will constitute
the entire agreement between Issuer and the undersigned
for the purpose and considerations herein specified . Your
acceptance will be indicated by proper signatures of your
authorized officers or representatives on both copies and
tne returning of one executed cony to us .
Respectfully submitted ,
7-1erhert R. Smith , Incorporated
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luronv Da is Of
Vice ?resident
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ACCEPTANCE
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I ACCEPTED pursuant to adopted by the
City Council of the City of Wichita halls on this day of
, 1985.
City of Wi cni to 7 ails
71 Jim 'erzina
City •Ianaaer
IATTEST:
1 By:
Title:
1 i (SEAL)
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EXHIBIT A
FEE SCHEDULE FOR GENERAL OBLIGATION AND REVENUE BONDS
Ci zc of Enna Issue 7c+A
s -0- - 5nn , 0nn c n , fnn
500 , 000 - 1 , 000 , 000 F 004 plus 5 . ? 7.-)er S1 , 000
over 5500 , 000
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1 , 000 , of o - 1 , 504 , (inn q, 625 plus $77: . 00 oer 41 , ^nn
over $1 0 0 0 0 1 0
1 , 5'00, 000 - 2 , 500 , 000 11, 125 plus ner S1, 000
over 57:1 , 5rin , f0n
2 , 500 , 000 - 5 , 000 , 000 11 , F95 plus 51 . 50 nor 51 , 000
over $2 , 500 , 000
5 , 000, 000 - 10, 000 , 000 1Q , 27 ; 01 11s S1 . 2 per 1_ , 000
over 55 , 000, 000
10 , 020 , 000 - 20 , ;inn , 200 _ ? , x"75 plus 51 . rn cer
over $10, 000, 000
20, 000 , 000 - All Over 34 , '775 plus S0 . 00 per $1, 000
over 520 , 000, 000
The fPe for bonds issnPdl in mult-.i^le installments shall be the
net amount as calculated from the annve schedule for e > cn
instaLlTent less a 10% reduction in the fee for each
installment_ sold subsecuent to rna tirst pond issue sold .
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