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HomeMy WebLinkAbout12/6/2000 - STAFF REPORTS (2) 9 Date: December 6, 2000 Memo To: City Council/Redevelopment Agency From: Director of Finance &Treasurer and Director of Redevelopment Re: Contract for Financial Advisor with Harrell & Company Advisors, LLC Recommendation: It is recommended that the City Council and the Redevelopment Agency approve a contract for financial advising services with Harrell & Company Advisors, LLC not to exceed $10,000 per year, plus compensation for new bond issues according to the schedule on Exhibit"B" of the contract. Summary: A financial advisor provides services generally related to the issuance of debt. Suzanne Harrell was formerly a principal of Rod Gunn &Associates, and has assisted the City and Agency in debt issuance and administration for the last ten years. Prior to this contract, the financial advising services were approved individually as part of each bond issue. However, recent Federal law requires continuing disclosure of financial information relevant to the bond issues, and the reports and documentation have a cost. The contract formalizes the arrangement with Ms. Harrell's new company, and establishes set costs for the various services. Background: In the past, the City and Agency have contracted for financial advising services on an individual bond issue basis. The cost for new bond issues were part of the approval process for the issue, and included in the amount financed. Other services never exceeded more than $5,000 per year, and were approved by the City Manager. Because Federal law requires continuing disclosure of financial information relevant to recent bond issues, it is possible that the current$5,000 cap on personal services contracts might be exceeded. The proposed contract defines the scope of services and rates to be charged. Ms. Harrell has been the financial advisor on all of the City's or Agency's bond issues for the last nine years. She was intimately involved with the design and implementation of the City's most complicated and creative financing including the 1994 Series A & B Redevelopment/Housing issue, the 1998 refinancing of the Assessment District No. 155 debt and the 1998 dual issue of Airport Passenger Facility Charge and eju —Ro General Airport Revenue Bonds. Ms. Harrell brings a wealth of experience to her company, and has extensive contacts with underwriters, bond counsels, bond insurers and other professionals in the public finance field. Her overall experience in the industry and specific experience with the City's and Agency's bond issues is not duplicable with any other financial advisor. Attached is the City's Standard Contract Services Agreement and a Minute Order for Council consideration. Submitted by: - *W4 , 4VVL Thomas M. Kanarr 4ire ohn . aymond Director of Finance &Treasurer or o edevelopment Approved: David H. Re dy City Mare Attachments: Resolution (CRA) Minute Order(City) Contract Ica- � a� CITY OF PALM SPRINGS CONTRACT SERVICES AGREEMENT FOR HARRELL & COMPANY ADVISORS. LLC. (SHORT FORM) THIS CONTRACT SERVICES AGREEMENT (herein "Agreement') is made and entered into this 6th day of December, 2000, by and between the CITY OF PALM SPRINGS, a municipal corporation and the Palm Springs Community Redevelopment Agency (herein "City") and Harrell & Company Advisors, LLC (herein "Contractor"). (The term Contractor includes professionals performing in a consulting capacity). NOW, THEREFORE, the parties hereto agree as follows: 1.0 SERVICES OF CONTRACTOR 1.1 Scope of Services. In compliance with all of the terms and conditions of this Agreement, the Contractor shall perform the work or services set forth in the "Scope of Services" attached hereto as Exhibit "A" and incorporated herein by reference. Contractor warrants that all work and services set forth in the Scope of Services will be performed in a competent, professional and satisfactory manner. 1.2 Compliance With Law. All work and services rendered hereunder shall be provided in accordance with all ordinances, resolutions, statutes, rules, and regulations of the City and any Federal, State or local governmental agency of competent jurisdiction. 1.3 Licenses, Permits. Fees and Assessments. Contractor shall obtain at its sole cost and expense such licenses, permits and approvals as may be required by law for the performance of the services required by this Agreement. 2.0 COMPENSATION 2.1 Contract Sum. For the services rendered pursuant to this Agreement, Contractor shall be compensated in accordance with the "Schedule of Compensation".attached hereto as Exhibit "B" and incorporated herein by this reference, but not exceeding the maximum contract amount of V0,000 Dollars ("Contract Sum") per year, excepting the compensation for new bond issues, which amount shall be calculated per the schedule in Exhibit "B". 2.2 Method of Payment. Provided that Contractor is not in default under the terms of this Agreement, Contractor shall be paid as outlined in Exhibit "B", Schedule of Compensation. 1 ev ��� 3.1 Representative of Contractor. Suzanne Harrell is hereby designated as being the principal and representative of Contractor authorized to act in its behalf with respect to the work and services specified herein and make all decisions in connection therewith. 3.2 Contract Officer. Thomas M. Kanarr is hereby designated as being the representative the City authorized to act in its behalf with respect to the work and services specified herein and make all decisions in connection therewith ("Contract Officer"). The City Manager of City shall have the right to designate another Contract Officer by providing written notice to Contractor. 3.3 Prohibition Against Subcontracting or Assignment. Contractor shall not contract with any entity to perform in whole or in part the work or services required hereunder without the express written approval of the City. Neither this Agreement nor any interest herein may be assigned or transferred, voluntarily or by operation of law, without the prior written approval of City. Any such prohibited assignment or transfer shall be void. 3.4 Independent Contractor. Neither the City nor any of its employees shall have any control over the manner, mode or means by which Contractor, its agents or employees, perform the services required herein, except as otherwise set forth. Contractor shall perform all services required herein as an independent contractor of City and shall remain under only such obligations as are consistent with that role. Contractor shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of City. 4.0 INSURANCE AND INDEMNIFICATION 4.1 Insurance. The Contractor shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to City, during the entire term of this Agreement including any extension thereof, the following policies of insurance: (a) Comprehensive General Liability Insurance. A policy of comprehensive general liability insurance written on a per occurrence basis in an amount not less than either (i) a combined single limit of $1,000,000.00 or (ii) bodily injury limits of $500,000.00 per person, $1,000,000.00 per occurrence and $1,000,000.00 products and completed operations and property damage limits of $500,000.00, per occurrence. If the Contract Sum is greater than $500,000.00, the policy of insurance shall be in an amount not less than $5,000,000.00 combined single limit. (b) Worker's Compensation Insurance. A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure and provide legal defense for both the Contractor and the City against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by the Contractor in the course of carrying out the work or services contemplated in this Agreement. -2- e" - A� (c) Automotive Insurance. A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of $500,000.00 per person and $1,000,000.00 per occurrence and property damage liability limits of $250,000.00 per occurrence and $500,000.00 in the aggregate or (ii) combined single limit liability of $1,000,000.00. Said policy shall include coverage for owned, non owned, leased and hired cars. (d) Additional Insurance: A policy written on a per occurrence basis in an amount not less than a combined single limit of$1,000,000. All of the above policies of insurance shall be primary insurance and shall name the City, its officers, employees and agents as additional insured, except that the insurance shall not be primary nor shall the City be named as an additional insured for the Worker's Compensation Insurance nor the Professional Liability Insurance. The insurer shall waive all rights of subrogation and contribution it may have against the City, its officers, employees and agents and their respective insurers. The Contractor's General Liability and auto policies of insurance shall provide that said insurance may not be amended as it affects the City or canceled without providing thirty (30) days prior written notice by mail to the City. The certificate of insurance shall provide that all insurance will not be cancelled or amended as it affects the City without providing 30 days written notice to the City by regular mail. In the event any of said policies of insurance are canceled, the Contractor shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section 4.1 to the Contract Officer. No work or services under this Agreement shall commence until the Contractor has provided the City with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders are approved by the City. The Contractor agrees that the provisions of this Section 4.1 shall not be construed as limiting in any way the extent to which the Contractor may be held responsible for the payment of damages to any persons or property resulting from the Contractor's activities or the activities of any person or persons for which the Contractor is otherwise responsible. The insurance required by this Agreement shall be satisfactory only if issued by companies qualified to do business in California, rated "A" or better in the most recent edition of Best Rating Guide, The Key Rating Guide or in the Federal Register, and only if they are of a financial category Class VII or better, unless such requirements are waived by the City Manager or designee of the City due to unique circumstances. 4.2 Indemnification. Contractor agrees to indemnify the City, its officers, agents and employees against, and will hold and save them and each of them harmless from, any and all actions, suits, claims, damages to persons or property, losses, costs, penalties, obligations, errors, omissions or liabilities, including paying any legal costs, attorneys fees, or paying any judgment (herein "claims or liabilities") that may be asserted or claimed by any person, firm or entity arising out of the negligent performance of the work or services by Contractor, its agents, employees, subcontractors, or invitees, provided for herein, or arising from the negligent acts or omissions of Contractor hereunder, or arising from Contractor's negligent performance of or failure to perform any term, provision, covenant or condition of this Agreement, but excluding such claims or liabilities to the extent caused by the negligence or willful misconduct of the City. 5.0 TERM 5.1 Term. Unless earlier terminated in accordance with Section 5.2 below, this Agreement shall continue in full force. 5.2 Termination Prior to Expiration of Term. Either party may terminate this Agreement at any time, with or without cause, upon thirty (30) days' written notice to the other party. Upon receipt of the notice of termination, the Contractor shall immediately cease all work or services hereunder except as may be specifically approved by the Contract Officer. In the event of termination by the City, Contractor shall be entitled to compensation for all services rendered and actual expenses incurred prior to the effectiveness of the notice of termination and for such additional services specifically authorized by the Contract Officer and City shall be entitled to reimbursement for any compensation paid in excess of the services rendered. 6.0 MISCELLANEOUS 6.1 Covenant Against Discrimination. Contractor covenants that, by and for itself, its heirs, executors, assigns and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the performance of this Agreement. Contractor shall take affirmative action to ensure that applicants are employed and that employees are treated during employment without regard to their race, color, creed, religion, sex, marital status, national origin or ancestry. 6.2 Nonliability of City Officers and Employees. No officer or employee of the City shall be personally liable to the Contractor, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to the Contractor or to its successor, or for breach of any obligation of the terms of this Agreement. 6.3 Conflict of Interest. No officer or employee of the City shall have any financial interest, direct or indirect, in this Agreement nor shall any such officer or employee participate in any decision relating to the Agreement which effects his financial interest or the financial interest of any corporation, partnership or association in which he is, directly or indirectly, interested, in violation of any State statute or regulation. The Contractor warrants that it has not paid or given and will not pay or give any third party any money or other consideration for obtaining this Agreement. 6.4 Notice. Any notice, demand, request, document, consent, approval, or communication either party desires or is required to give to the other party or any other person shall be in writing and either served personally or sent by prepaid, first class mail, in the case of the City, to the City Manager and to the attention of the Contract Officer, CITY OF PALM SPRINGS, P.O. Box 2743, Palm Springs, California 92263, and in the case of the Contractor, to the person at the address designated on the execution page of this Agreement. In the event of notice by mail, notice shall be deemed received five (5) days after mailing. 6.5 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. 6.6 Integration; Amendment. It is understood that there are no oral agreements between the parties hereto affecting this Agreement and this Agreement supersedes and cancels any and all previous negotiations, arrangements, agreements and understandings, if any, between the parties, and none shall be used to interpret this Agreement. This Agreement may be amended at any time by the mutual consent of the parties by an instrument in writing. 6.7 Severability. In the event that part of this Agreement shall be declared invalid or unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining portions of this Agreement which are hereby declared as severable and shall be interpreted to carry out the intent of the parties hereunder unless the invalid provision is so material that its invalidity deprives either party of the basic benefit of their bargain or renders this Agreement meaningless. 6.8 Waiver. No delay or omission in the exercise of any right or remedy by a nondefaulting party on any default shall impair such right or remedy or be construed as a waiver. A party's consent to or approval of any act by the other party requiring the party's consent or approval shall not be deemed to waive or render unnecessary the other party's consent to or approval of any subsequent act. Any waiver by either party of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of this Agreement. 6.9 Attorneys' Fees. If either party to this Agreement is required to initiate or defend or made a party to any action or proceeding in any way connected with this Agreement, the prevailing party in such action or proceeding, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorney's fees, whether or not the matter proceeds to judgment. 6.10 Corporate Authority. The persons executing this Agreement on behalf of the parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement, such party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other Agreement to which . said party is bound. IN WITNESS WHEREOF, the parties have executed and entered into this Agreement as of the date first written above. -5- filed -A7 NOV-20-2000 MON 08:41 AM FROM:HAAAELL & COMPANY FAX:7149391462 PAGE 1 NOV-17-00 FRI 17i18 CITY OF PS FINANCE FAX K 780 322 8320 P, 11 ATTEST: CITY OF PALM SPMNGSO a municipal corporation. City Clark sy Contract Administrator (Check one:_ Individual_Partnership Corporation (Corporations require two signatures: CONTRACTOR: One from each of the follawing: A. Chairman of Board,President,any gy \Ace president:AND B. Secretary, att re(Notarized} Assistant Secretary,Treasurer, � � " Assistant Treasurer,or Chief Financial _auC�Q ULVtPi rra. Wc-I Officer), Print Name&T Is f� CL Via w�C�2 v" Signature(Notedzed) Print Name&Ttle Malding Address:; 333 �r� U©c�Cev� wesh She I �3° yVo l Ctk Rzz(o8 (End-Df Signatures) e wr s" ATTEST: CITY OF PALM SPRINGS, a municipal corporation By: City Clerk Contract Administrator (Check one:_Individual_Partnership _Corporation (Corporations require two signatures: CONTRACTOR: One from each of the following: A. Chairman of Board, President, any By: Vice President:AND B. Secretary, Signature (Notarized) Assistant Secretary,Treasurer, Assistant Treasurer, or Chief Financial Officer). Print Name &Title By: Signature (Notarized) Print Name &Title Mailing Address: (End of Signatures) -6- � ,q EXHIBIT A SCOPE OF SERVICES • Bond Issuance 1. Financial Assessment. Develop alternative structures for the Financing for review and approval by the City. Size the bond issue, structure those terms and conditions which most advantageously meet demands or current market conditions and the City's objectives. 2. Prepare Revenue Projections (if required) for inclusion in the Official Statement. 3. Financing Schedule. Develop and monitor the schedule of activities during the financing to assist the City in meeting agenda deadlines and public notice requirements. 4. Document Review. Review and comment on all legal documents prepared by the City's bond counsel to ensure conformance with the proposed financing structure. 5. Disclosure Issues. Provide technical support in defining disclosure issues necessary to meet GFOA guidelines. 6. Official Statement. Prepare the Preliminary and Final Official Statement to be used in connection with the offering of the bonds, and in a competitive offering, prepare the official notice of sale and notice of intention to sell bonds. Arrange for printing and mailing of the Preliminary Official Statement. Revise the Preliminary Official Statement for final interest rates and tables related thereto. Arrange for printing and distribution of Final Official Statement within seven business days from the sale date. 7. Rating and Insurance Agencies. Submit documentation, conduct negotiations and attend meetings with rating agencies and bond insurance companies as may be required. 8. Timing of Sale. Advise the City of market movements, trends and developments and make recommendations as to the timing of the sale of the bonds in relation to market conditions. 9. Pricing (Negotiated Offering). Review the Purchase Contract prepared by the Underwriter and advise on the proposed pricing by the Underwriter. C 10. Pricing (Competitive Offering). Coordinate the plans of the bid opening, evaluate the bids submitted, check for mathematical accuracy, advise the City of the bids and make a recommendation as to award. Revise cash flows for final pricing information and order securities for bond defeasance escrow, if required. 11. Bond Closing. Review the proposed arrangements for closing and delivery of the bonds including certificates and representations of other parties to ensure certification of information relied upon in the financing. 12. Bond Administration. Advise the City in administration of the financing after bond closing. 13. Attendance at Meetings. Attend all meetings of the working group and the city council as required. ■ Continuing Disclosure 1. On an annual basis, prepare the Annual Report required by each Continuing Disclosure Agreement/Certificate and submit the Annual Report to the Dissemination Agent, if applicable, or directly to the Repositories. ■ Reports 1. Prepare the Report of Independent Financial Consultant, if any, required by the indenture. 2. Prepare any additional reports as requested. r CIA Who EXHIBIT B SCHEDULE OF COMPENSATION ■ Bond issuance Fixed fee of$20,000 for a principal amount of Bonds issued up to $2,000,000 principal amount; an additional $7,500 for each $1,000,000 principal amount of Bonds issued in excess of$2,000,000 up to $4,000,000; an additional $5,000 for each $1,000,000 principal amount of Bonds issued in excess of$4,000,000 up to $10,000,000; an additional $2,500 for each $1,000,000 principal amount of Bonds in excess of $10,000,000 up to $15,000,000; and an additional $1,250 for each $1,000,000 principal amount of Bonds in excess of$15,000,000, plus all out-of-pocket expenses, payable upon delivery of the Bonds. ■ Continuing Disclosure For each Annual Report: Type of Financing Fees Tax Allocation $1,200 first issue for a project area $200 each subsequent issue for project area General Fund Lease $750 first issue, no charge for each subsequent Revenue(Enterprise Fund) $1,500 each issue Special Tax/Assessment $1,500 each issue Payable upon completion of Annual Report ■ Reports Report of Independent Financial Consultant re Asset $250.00 Coverage Test- 1994 Tax Allocation Bonds Preparation of the Payment Schedules - 1998 AD 155 No Charge Bonds Report of Independent Financial Consultant re PFC Bond $500.00 Redemption - 1998 PFC Airport Revenue Bonds Additional Report of Independent Financial Consultant $500.00- $1,000.00 Payable upon completion of Annual Report CAA - ,A RESOLUTION NO. OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING A CONTRACT WITH HARRELL& COMPANY ADVISORS, LLC TO PROVIDE FINANCIAL ADVISING SERVICES IN AN AMOUNT NOT TO EXCEED $10,000 PER YEAR PLUS COMPENSATION FOR NEW BOND ISSUES ACCORDING TO THE SCHEDULE ON EXHIBIT"B" OF THE CONTRACT -- --- -- - -- -- WHEREAS, the Community Redevelopment Agency has existing bond issues for which specific and on-going reports are required to be prepared and filed; and WHEREAS, the Agency is likely to have future bond issues which will require the services of a Financial Advisor; and WHEREAS, Harrell & Company Advisors, LLC has extensive knowledge of the existing Agency bond issues and of the organization and capabilities of the Agency; NOW, THEREFORE, BE IT RESOLVED by the Community Redevelopment Agency of the City of Palm Springs, California, as follows: Section 1. The Executive Director of the Community Redevelopment Agency is authorized to enter into a contract with Harrell & Company Advisors, LLC to provide financial advising services. Section 2. The contract amount shall not exceed $10,000 per year plus compensation for new bond issues according to the schedule on Exhibit"B" of the contract. Adopted this day of 12000. AYES: NOES: ABSENT: ATTEST: COMMUNITY REDEVELOPMENT AGENCY CITY OF PALM SPRINGS, CALIFORNIA By: Assistant Secretary Chairman Reviewed and Approved by: