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Res 215-84 11/6/1984RESOLUTION NO. cam(/b-d9 RESOLUTION AUTHORIZING THE CITY MANAGER 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 1984-85 Cypress Street Water Treatment Plant Expansion Project. 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 City Manager is authorized to execute the same for the City of Wichita Falls. PASSED AND APPROVED this the 6th day of November, 1984 . 0 R ATTEST: e At _ / /.Li r ' City'Clerk INVESTMENT ADVISORS Herbert R. Smith, Incorporated 1105 Holliday•Wichita Falls,Texas 76301•Phone 817-723-5565 October 23, 1984 FINANCIAL ADVISORY CONTRACT The Honorable Gary Cook and City Council City of Wichita Falls 1301 Sixth Street Wichita Falls , Texas 76301 G ent l em en: 1. We understand you are contemplating the issuance of securities of the kinds , in the amounts , and for the purposes indicated as follows : Refunding the outstanding water and sewer revenue bonds for the City and issue new bonds for the Cypress Water Plant project . and in connection with the issuance of these securities , you desire this proposal from us to perform professional services in the capacity of Financial Adviser for the CITY OF WICHITA FALLS (hereinafter called "Issuer" ) . 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 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 projected sources of income which may be pledged to Page 2 secure payment of debt service , and wher e appr opr i at e, will include a study of the trend of the assessed valuation of the Issuer , the Issuer ' s taxing power , and the present and estimated future taxing requirements . If the revenues of a system or facility are to be pledged to repayment of the securities in question , the survey will take into account any outstanding obligations which are payable from the net revenues thereof , additional 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 be financed by the securities in question . We will also take into account your future financing needs and operations as projected by your staff and/ or your consulting engineers and other experts . b . On the basis of the information developed by the survey described in the above and foregoing paragraph , and on the basis of other information and experience 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 payment dates , schedule of principal maturities , options of prior payment , and any other necessary additional security provisions designed to make the issue more attractive to investors . All recommendations will be based on our best professional judgment , with the goal of designing securities which can be sold under terms most advantageous to Issuer , and at the lowest interest cost consistent with all of her co ns i der at i ons . c . We will advise you of current bond market conditions , forthcoming bond issues , and other general information and economic data which might normally be expected to influence the i nt er es t rat es or bidding conditions , so that the date for the sale of the securities can be set a time which , in our opinion , will be favorable. d . If it is necessary to hold an election to authorize the securities , we will , under the direction of the bond attorneys , assist in coordinating the assembly and transmittal to the bond attorneys of such data as may be required for the preparation of the necessary petitions , orders , resolutions , notices and certificates in connection with the election. Page 3 e . We will coordinate the preparation and submission of the Official Notice of Sale, the Official Statement or Offering Statement , and such other market documents which you may require . We will also supervise re aration of the uniform bid form , containingPg provisions recognized by the municipal securities industry as being consistent with the securities offered for sale . We will submit to you all such offering documents , including the Official Statement , for your proper examination , approval and certification . After such examination , approval and certification , we will furnish you with a supply of such documents and shall mail a set of the same to a list of prospective bidders , a copy of which list shall be submitted to you upon request . We will also supply sufficient copies of the Official Statement or Offering Statement to the purchaser of the securities in accordance with the terms of the Notice of Sale. f . We will make 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 required 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 indicated , we will arrange for such personal pr es ent at i on . g . If the securities are to be sold at public sale , we will disseminate information to prospective bidders , organize such information meetings as in our judgment may be necessary, and work with prospective bidders to assist them in timely submitting proper bids . We will assist you at the bond sale for the purpose of coordinating the receipt of bids , and the furnishing of good faith checks where indicated , and for the purpose of tabulation and comparison of bids , and will advise you as to the best bid , and will provide our recommendation as to acceptance or rejection of such bid . As soon as a bid for the bonds shall be accepted by you , we will proceed to coordinate the efforts of all concerned to the end that the bonds may be delivered and paid for as expeditiously as possible . We shall assist you in the preparation of verification of final closing figures , and when requested , will provide suggestions on a program of temporary investment of bond proceeds , in consultation with the Issuer ' s architect or consulting engineer , consistent with the construction timetable for the project . Page 4 h . We will act as your agent in arranging for the printing of the securities , submit same for execution and impression of seal , and attend to their delivery to the Attorney General for approval and the Comptroller of Public Accounts for registration , it being understood that title to and ownership of the printed securities shall be in the Issuer until they are sold and delivered to the purchaser . After closing we will deliver to you and your paying agent (s ) definitive debt records , including a schedule of annual debt service requirements on the obligations being delivered to the purchaser . 3. We agree to direct and coordinate the entire program of financing herein contemplated . In that connection , we understand that you have retained or expect to retain a firm of recognized municipal bond attorneys , who will prepare the proceedings and advise the steps necessary to be taken to issue the securities and who will issue an opinion approving their legality. We will maintain liason with this firm of bond attorneys and shall assist in all financial advisory aspects involved in the preparation of appropriate legal proceedings and documents . Where the issuance and sale of the securities , and construction of the proj ect in question , requires the approval of any state or governmental agency, we shall assist you in the preparation of all financial information required for inclusion in applications for such approval and , when requested by you , shall appear on your behalf to provide appropriate testimony at public hearings before state and other governmental commissions and boards . We will also be available to participate with you in any preliminary conferences with the staffs of any state or governmental agencies involved , and we will , for qualified projects , coordinate the preparation of financial assistance applications required for state involvement . 4. In addition to the of or es tat ed duties as financial adviser , Herbert R . Smith , Incorporated will be responsible for the following in a refunding and/or advance refunding issuance of bonds : Determine the proper debit service schedule , interest cost , and underwriting cost of the issue . Coordinate with the bond counsel , underwriter and Issuer the appropriate timing of the bond sale. Page 5 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 securities to be purchased in the open (secondary) market . Select an underwriter for the sale of the bonds after reviewing experience , expertise , and compatibility in working with Herbert R . Smith , Incorporated and the Issuer . 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 possible i nt er es t cost for the Issuer . Review and make recommended changes in the purchase contract of the underwriter which must be approved by the City Council . 5. In consideration for the services rendered by us in connection with the issuance and sale of the above described securities , it is understood and agreed that our fee will be as follows : SEE ATTACHED EXHIBIT A In consideration of the above fee , we will assume and be responsible for the following expenses : a . Cost of printing the bonds . b . Expenses of obtaining the approving opinion of the Attorney General of the State of Texas . c . Expenses of compiling information, editing , printing and disseminating an Official Notice of Sale on bonds to be sold. d . Expenses of obtaining CUSIP identification numbers for bonds . Our fee and reimbursable expenses shall become due and payable simultaneously with the delivery of the securities to the purchaser . 6. In the event any bond election be necessary , if such election shall fail , the fee due us shall be $-0- ; however , should the same or similar propositions again be submitted to el ecti on held within 24 months from date hereof , then at our option the agreement covedred by this proposal shall apply to any such securities . Page 6 7. This agreement shall be terminated by the delivery to the purchaser of all the securities covered hereby , whet her deliverd all at one time or in installments . 8. Special Conditions . In addition to the terms and obligations herein contained , this proposal and agreement is s ubj ect to the following special conditions : Herbert R. Smith, Incorporated will make every effort to have a principal r epr es ent at i ve 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 pr es ent at i on. 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 duplicate originals . When accepted by Issurer , it will constitute the entire agreement between Issuer and the undersigned for the purpose and considerations herein specified . Your acceptance will be i ndi cat ed by proper signatures of your authorized officers or representatives on both copies and the returning of one executed copy to us . Respectfully submitted , Herbert R . Smith, Incorporated Murphy Davis Vice President Page 7 ACCEPTANCE ACCEPTED pursuant to adopted by the City Council of the City of Wichita Falls on this day of 1984 . City of Wichita Falls Jim Ber zi na City Manager ATTEST: By: Titl e: SEAL) EXHIBIT A FEE SCHEDULE FOR GENERAL OBLIGATION AND REVENUE BONDS Size of Bond Issue Fee 0- 500 , 000 6 , 000 500 , 000 - 1, 000, 000 6, 000 plus $5 . 25 per $1 , 000 over $500, 000 1 , 000, 000 - 1, 500, 000 8, 625 plus $5 . 00 per $1 , 000 over $1 , 000, 000 1 , 500, 000 - 2 , 500, 000 11 , 125 plus $3 . 50 per $1 , 000 over $1 , 500, 000 2 , 500, 000 - 5 , 000, 000 14, 625 plus $1 . 50 per $1 , 000 over $2 , 500, 000 5, 000, 000 - 10, 000, 000 18, 325 plus $1 . 25 per $1 , 000 over $5 , 000, 000 10, 000, 000 - 20, 000, 000 2 4, 575 plus $1 . 00 per $1 , 000 over $10, 000, 000 20, 000, 000 -All Over 34, 575 plus $0. 90 per $1 , 000 over $20, 000, 000 The fee for bonds issued in multiple installments shall be the net amount as calculated from the above schedule for each installment less a 10% reduction in the fee for each installment sold subsequent to the first bond issue sold .