Loading...
HomeMy WebLinkAbout20-16 Hilltop Securities Engagement LetterRESOLUTION NO.20-10 A RESOLUTION OF THE BOARD OF TRUSTEES OF THE TOWN OF FIRESTONE, COLORADO, APPROVING AN ENGAGEMENT LETTER WITH HILLTOP SECURITIES, INC., TO SERVE AS MUNICIPAL ADVISOR TO THE TOWN OF FIRESTONE REGARDING THE ACQUISITION OF DEBT INSTRUMENTS WHEREAS, the Town of Firestone ("Town")is in need of professional municipal advisor services for the acquisition of Debt Instruments, which includes financial planning, debt management and financial implementation services; and WHEREAS, Hilltop Securities, Inc., has the expertise, experience and resources to provide the Town the required services. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF FIRESTONE, COLORADO, The Engagement Letter with Hilltop Securities, Inc., including Appendix A, to provide municipal advisor services to the Town for the acquisition of Debt Instruments is approved in substantially the same form as the copy attached hereto and made a part of this resolution and the Mayor is authorized to execute the Engagement Letter on behalf of the Town. ATTEST: J Town OVED AS TO O WN���� TOWN OF r� arT ;A.'1 8 bi Sind( �`° Town Attorney Mayor CK�71C�77_�7�7 r Hilltop5ecurities AHilltop Holdings Company. Jim Manire Director Public Finance January 6, 2020 Ms. Jessica Clanton, Finance Director Town of Firestone 151 Grant Avenue P.O. Box 100 Firestone, CO 80520 Dear Ms. Clanton: On behalf of Hilltop Securities Inc. ("Hilltop Securities"), we appreciate the opportunity to serve as Municipal Advisor to the Town of Firestone (the "Issuer" or the "Town"). This letter will confirm the basic terms of our engagement and is dated, and shall be effective as of, the date executed by the Issuer as set forth on the signature page hereof (the "Effective Date"). Hilltop Securities will serve as Municipal Advisor to the Issuer. In this capacity, based on our professional experience and the information made available to us by the Issuer, Hilltop Securities agrees to perform the following services: Financial Planning. At the direction of Issuer, Hilltop Securities shall: 1. Survey and Analysis. Conduct a survey of the financial resources of the Issuer to determine the extent of its capacity to authorize, issue and service any evidences of indebtedness or debt obligation that may be authorized and issued or otherwise created or assumed by the Issuer ( collectively the "Debt Instruments") contemplated. This survey will include an analysis of any existing Debt Instruments as compared with the existing and projected sources of revenues which may be pledged to secure payment of debt service. 2. Future Financings. Consider and analyze future financing needs as projected by the Issuer's staff and consultants, if any, employed by the Issuer. Recommendations for Debt Instruments. On the basis of the information developed by the survey described above, and other information provided by the Issuer or publicly available, submit to the Issuer recommendations regarding the Debt Instruments under consideration, including such elements as the date of issue, interest payment dates, schedule of principal maturities, options of prior payment, security provisions, and such other provisions as may be appropriate in order to make the issue attractive to investors while achieving the objectives of the Issuer. All recommendations will be consistent with the goal of designing the Debt Instruments to be sold on terms which are advantageous to the Issuer, including the lowest interest cost consistent with all other considerations, including but not limited to the market conditions at the time of sale. Hilltop Securities Inc. direct 303.771.0217 8055 E. Toth Ave. cell 720.347.8953 Suite 500 Jason.simmons@hilltopsecurities.com Denver, CO 80237 HilltopSecurities.com 4. Market Information. Advise the Issuer of our interpretation of current bond market conditions, other related forthcoming bond issues and general information, including economic data, which might normally be expected to influence interest rates or bidding conditions so that the date of sale of the Debt Instruments may be set at a favorable time. Debt Management and Financial Implementation. At the direction of Issuer, HilltopSecurities shall: 1. Method of Sale. Evaluate the particular financing being contemplated, giving consideration to the complexity, market acceptance, rating, size and structure in order to make a recommendation as to an appropriate method of sale, and: a) If the Debt Instruments are to be sold by an advertised competitive sale, HilltopSecurities will: 1) Supervise the sale of the Debt Instruments; 2) Disseminate information to prospective bidders, organize such informational meetings as may be necessary, and facilitate prospective bidders' efforts in making timely submission of proper bids; 3) Assist the staff of the Issuer in coordinating the receipt of bids, the safekeeping of good faith checks and the tabulation and comparison of submitted beds; and 4) Advise the Issuer regarding the best bid and provide advice regarding acceptance or rejection of the bids. 2. If the Debt Instruments are to be sold by negotiated sale, HilltopSecurities will: a) Assist the Issuer in selecting one or more investment banking firms to act as managers of an underwriting syndicate for the purpose of negotiating the purchase of the Debt Instruments. 1) HilltopSecurities will coordinate the sale of the Debt Instruments to the selected managing underwriter, and will assist the Issuer in the review and preparation of a bond purchase contract, an underwriter's agreement, or other comparable documents. 2) Provide a cost comparison for transaction costs and for the interest rates which are suggested by the underwriters, to the then current market. 3) Advise the Issuer as to the fairness of the price offered by the underwriters. 3. Offering Documents. Coordinate with Bond and Disclosure Counsel to prepare any Official Statement or Offering Memorandum, the preparation of the notice of sale and bidding instructions, if necessary, and such other documents as may be required and submit all such documents to the Issuer for examination, approval and certification. After such examination, approval and certification, Hilltop Securities shall provide the Issuer with a supply of all such documents sufficient to its needs and distribute by mail or, where appropriate, by electronic delivery, sets of the same to all parties as needed per the method of sale. 4. Credit Ratings. Make recommendations to the Issuer as to the advisability of obtaining a credit rating, or ratings, for the Debt Instruments and, when directed by the Issuer, coordinate the preparation of such information as may be appropriate for submission to the rating agency, or 2 agencies. In those cases where the advisability of personal presentation of information to the rating agency, or agencies, may be indicated, Hilltop Securities will arrange for such personal presentations, utilizing such composition of representatives fiom the Issuer as may be finally approved or directed by the Issuer. 5. Trustee, Paying Agent, Registrar. Upon request, counsel with the Issuer in the selection of a Trustee and/or Paying Agent/Registrar for the Debt Instruments, and assist in the negotiation of agreements pertinent to these services and the fees incident thereto. 6. Financial Publications. When appropriate, advise financial publications of the forthcoming sale of the Debt Instruments and provide them with all pertinent information. 7. Consultants. After consulting with and receiving directions fiom the Issuer, arrange for such reports and opinions of recognized independent consultants as may be appropriate for the successful marketing of the Debt Instruments. 8. Issuer Meetings. Attend meetings of the governing body of the Issuer, its staff, representatives or committees as requested at all times when Hilltop Securities may be of assistance or service and the subject of financing is to be discussed. 9. Printing. To the extent authorized by the Issuer, coordinate all work incident to printing of the offering documents and the Debt Instruments. 10. Bond Counsel. Maintain liaison with Bond Counsel in the preparation of all legal documents pertaining to the authorization, sale and issuance of the Debt Instruments. 11. Changes in Laws. Provide to the Issuer copies of proposed or enacted changes in federal and state laws, rules and regulations having, or expected to have, a significant effect on the municipal bond market of which Hilltop Securities becomes aware in the ordinary course of its business, it being understood that Hilltop Securities does not and may not act as an attorney for, or provide legal advice or services to, the Issuer. 12. Delivery of Debt Instruments. As soon as a bid for the Debt Instruments is accepted by the Issuer, coordinate the efforts of all concerned to the end that the Debt Instruments may be delivered and paid for as expeditiously as possible and assist the Issuer in the preparation or verification of final closing figures incident to the delivery of the Debt Instruments. 13. Debt Service Schedule, Authorizing Resolution. After the closing of the sale and delivery of the Debt Instruments, deliver to the Issuer a schedule of annual debt service requirements for the Debt Instruments and, in coordination with Bond Counsel, assure that the paying agent/registrar and/or trustee has been provided with a copy of the authorizing ordinance, order or resolution. 14. Elections. In the event it is necessary to hold an election to authorize the contemplated issuance, assisting in coordinating the assembly of such data as may be required for the preparation of necessary petitions, orders, resolutions, ordinances, notices and certificates in connection with the election, including assistance in the transmission of such data to the Issuer's bond counsel. Tern of this Engagement. The term of this Agreement begins on the Effective Date and ends, unless terminated pursuant the language below, on the last day of the month in which the fifth anniversary date of the Effective Date shall occur (the "Termination Date"), Unless Hilltop Securities or the Issuer shall notify the other party in writing at least thirty (30) days in advance of the Termination Date that this Agreement will not be renewed, this Agreement will be automatically renewed on the Termination Date for an additional one (1) year period and thereafter will be automatically renewed on each anniversary date of the Termination Date for successive one (1) year periods unless Hilltop Securities or the Issuer shall notify the other party in writing at least thirty (30) days in advance of such successive anniversary date. This Agreement may be terminated with or without cause by the Issuer or Hilltop Securities upon the giving of at least thirty (30) days' prior written notice to the other party of its intention to terminate, specifying in such notice the effective date of such termination. In the event of such termination, it is understood and agreed that only the amounts due Hilltop Securities for services provided and expenses incurred to the date of termination will be due and payable. No penalty will be assessed for termination of this Agreement. In consideration of providing the requested services, Hilltop Securities shall receive fees as outline in Appendix A. In any event regardless of the cause of action, Hilltop Securities' total liability (including loss and expense) to the Issuer in the aggregate shall not exceed the gross amount of fees received by Hilltop Securities pursuant to this letter agreement. The limitations of liability set forth in this letter agreement are fundamental elements of the basis of the bargain between Hilltop Securities and the Issuer, and the pricing of the services set forth above reflect such limitations. This letter agreement shall be constrained and given effect on accord with the laws of the State of Colorado. Hilltop Securities is providing its Municipal Advisor Disclosure Statement (the "Disclosure Statement"), current as of the date of this Agreement, setting forth disclosures by Hilltop Securities of material conflicts of interest, if any, and of any legal or disciplinary events required to be disclosed pursuant to Municipal Securities Rulemaking Board Rule G-42. The Disclosure Statement also describes how Hilltop Securities addresses or intends to manage or mitigate any disclosed conflicts of interest, as well as the specific type of information regarding, and the date of the last material change, if any, to the legal and disciplinary events required to be disclosed on Forms MA and MA -I filed by Hilltop Securities with the Securities and Exchange Commission. We look forward to working with you during this engagement. Please acknowledge acceptance of these terms by signing in the space provided below and returning two copies to me. Town of Firestone, Colorado Agregd,and Accepted: By: -0 _ ", 1� fi I I 0 i1T11s7 7> M—ATi T aL�lr Title: CLLAOC 4 APPENDIX A COMPENSATION This Appendix A sets out the form and basis of compensation to Hilltop Securities for the Municipal Advisory Services provided under this Agreement; provided that the compensation arrangements set forth in this Appendix A shall also apply to any additional services hereafter added to the scope of the Municipal Advisory Services, unless otherwise provided in the amendment to the Agreement relating to such change in scope of Municipal Advisory Services. Transaction Fee All fees for transactions are payable on a contingent basis — the Issuer will only pay Hilltop Securities upon a successful issuance and closing of such financing and is payable out of proceeds from such issuance. The benchmark fee for a fixed-rate General Obligation or Enterprise Revenue issue is $1.00 per $1,000 of proceeds, with a minimum fee of $29,500 and a maximum fee of $59,500. A final Transaction Fee will be agreed to in writing or by e-mail during the period corresponding to the marketing of each transaction. Transaction Fees may be reduced by the arnount of any Retainer Fees received by the Municipal Advisor, if any, during the six months prior to the closing of any transaction. For certain development -oriented transactions, variable rate transactions, leases (including certificates of participation) or any transaction which involves additional complexity or has required an extended or unexpected time commitment, the requested Transaction Fee may be higher. For certain transactions in which the Municipal Advisor provides less than the full Scope of Services (such as for loans available from an agency of the State of Colorado), the requested Transaction Fee may be less. Other Compensation In the event that we are asked to provide analytical, capital planning, or consulting services which are not directly related to an active transaction, if authorized by the Issuer, we would invoice on an hourly basis according to the schedule provided below. We understand that we are not entitled to any compensation whatsoever which has not been discussed and approved in advance by the Issuer. Hourly Rate: Directors $350 Vice Presidents $250 Assistant Vice Presidents $150 Associate/Analyst $100 Expenses If approved in advance by the Issuer, Hilltop Securities would request reimbursement of out of pocket travel expenses related to work with the Issuer. The payment of reimbursable expenses that Hilltop Securities has assumed on behalf of the Issuer shall NOT be contingent upon the delivery of a new issuance of municipal securities or the completion of any other transactions for which such expenses have been assumed and shall be due at the time that services are rendered and payable upon receipt of an invoice therefor submitted by Hilltop Securities, unless otherwise provided for in any amendment or addendum hereto in connection with the compensation arrangements for any services provided under the Agreement for which such amendment or addendum is required. The Issuer shall be responsible for the following expenses in connection with the Municipal Advisory Services (including any additional services hereafter added to the scope of the Municipal Advisory Services), if and when applicable, whether they are charged to the Issuer directly as expenses or charged to the Issuer by Hilltop Securities as reimbursable expenses: bond counsel fees and expenses, bond printing costs, bond ratings fees and expenses, computer structuring costs, credit enhancement fees and expenses, accountant fees for verifications and related activiti cs in connection with refunding's, official statement preparation and printing, paying agent/registrar/trustee fees and expenses, travel expenses, underwriter and underwriter's counsel fees and expenses, and other miscellaneous expenses incurred by Hilltop Securities in the furtherance of any matter for which it serves as municipal advisor.