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1e. Contract for Financial Advisor i i .e. i 4' CITY T -- 1 ,.,:, , CHANHASSEN 1 . 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 I :: (612) 937-1900 • FAX (612) 937-5739 IMEMORANDUM TO: Mayor and City Council IFROM: Don Ashworth, City Manager IDATE: November 6 , 1989 SUBJ: Financial Advisor Services Contract, Springsted IAttached please find the proposed contract between Springsted and the City of Chanhassen for their services as financial advisors. I The proposed contract appears to be consistent with statements made during the interview process. I Approval is recommended contingent upon the attorney approving such as to form. I I I I I I I I I JIM 1 ta SPRINGSTED I '� PUBLIC FINANCE ADVISORS 85 East Seventh Place,Suite 100 I Saint Paul,Minnesota 55101 2143 612 223.3000 FAX 612 223.3002 I September 21, 1989 I /Ws;0.A....., ___. 1-9/ " ---- ' Mr. Don Ashworth, Manager Chanhassen City Hall t,.� __ 690 Coulter Drive `Ifs/ I� � Chanhassen, MN 55317 / r,; IMr. Roger Knutson 4 Grannis, Grannis, et al I161 North Concord Street, 403 South Saint Paul, MN 55075 ' Re: Draft Contract for Financial Advisor Services Gentlemen: I We are enclosing a draft copy of our contract for your review. We have modified our standard contract to include Section 6, Special Services in Appendix A, Compensation. This modification reflects the agreement concluded at the meeting at the City offices on I Wednesday, September 20, 1989. All services listed in the materials distributed by Don at the meeting are part of our basic service package, and therefore we believe no additional modifications are necessary. r If upon completion of your review this modification or others require discussion, please contact us. Respectfully, \s=.1 ' Robert D. Pulscher Chief Executive Officer I mjt Enclosure I SEP 2 1 1989 IIndiana Office: Wisconsin Office CITY_OF CHANHASSEN 251 North Illinois Street,Suite 1510 500 Elm Grove Road,Suite 101 Indianapolis,Indiana 46204.1942 Elm Grove,Wisconsin 53122.0037 I 317 237 3636 414 782.8222 Fax:317 237.3639 Fax:414.782.2904 -" SPRINGSTED PUBLIC FINANCE ADVISORS 85 East Seventh Place,Suite 100 Saint Paul,Minnesota 55101 2143 612 223.3000 FAX.612 223.3002 AGREEMENT FOR FINANCIAL ADVISOR SERVICES WHEREAS, the City of Chanhassen, Minnesota, and Springsted Incorporated, hereinafter referred to as "Client" and "Financial Advisor" respectively, wish to enter into this Agreement for the furnishing of certain services to Client by Financial Advisor, Client and Financial Advisor mutually agree that: For each Client Debt Obligation, except debt incurred in the normal course of' business, assumed during the term of this Agreement, Financial Advisor shall advise Client as to the following: (i) basis and procedure for authorization, (ii) structure, (iii) security devices, (iv) revenue sufficiency based upon Client's data, (v) ratability, (vi) marketability, and (vii) price. If appropriate, Financial Advisor shall also (i) draft and distribute Client's Official Statement, (ii) assist Client to acquire a credit rating, and (iii) arrange for the printing and delivery of the debt instruments. For its services, Financial Advisor shall be compensated at the rates set out in Appendix A of this Agreement. Financial Advisor during the term of the Agreement shall not participate directly or indirectly in the purchase or resale of a Client Debt Obligation. , It shall be presumed that unless Financial Advisor is expressly advised by Client to the contrary that all information, files, records, memos and other data of Client coming into Financial Advisor's possession or knowledge may be disclosed by Financial Advisor in the performance of its duties on behalf of Client. All such material shall remain the property of Client. All internal files, records, memos, and other data, including computer programs, of Financial Advisor shall remain the property of Financial Advisor, unless expressly purchased by Client. Financial Advisor shall perform its services on behalf of Client as an independent 111 contractor. Client and Financial Advisor shall each indemnify and hold harmless the other from and against any and all losses, claims, damages, and expenses, including legal fees for defense, or liabilities, collectively, "Damages,"to which either may be subjected by reason of the other's acts, errors or omissions, except neither will indemnify the other from or against Damages by reason of changed events and conditions beyond the control of either or errors of judgment reasonably made. This Agreement shall continue until completion of the project or until such time as either Client or Financial Advisor terminates it by not less than 60 days written notice to the other party, except that the Agreement shall remain in full force and effect with respect to a Debt Obligation commenced during the time the Agreement is in effect to completion of such Debt Obligation. The Agreement may be amended in whole or in part from time to time by mutual consent of the parties. Indiana Office: Wisconsin Office: 251 North Illinois Street,Suite 1510 500 Elm Grove Road,Suite 101 Indianapolis,Indiana 46204.1942 Elm Grove,Wisconsin 53122.0037 317.237.3636 414.782.8222 Fax:317.237 3639 Fax:414.782.2904 I In the event at Client's request Financial Advisor performs services described in this Agreement reasonably understood by Financial Advisor to be performed pursuant to the Agreement after signing by Financial Advisor, but before signing by Client, such services shall be subject to the provisions of the Agreement as if the Agreement had been signed by both parties. ' This Agreement shall not preclude Client and Financial Advisor from entering into other contracts for specific Debt Obligations. ' Signed as of October 1, 1989, the effective date of the Agreement. FOR CLIENT Title FOR FINANCIAL ADVISOR David N. MacGillivra ' Vice President 1 1 -2 - I APPENDIX A OF AGREEMENT BETWEEN City of Chanhassen, Minnesota AND Springsted Incorporated ' Effective as of October 1, 1989. SCHEDULE OF FINANCIAL ADVISOR'S COMPENSATION FOR SERVICES RELATING TO CLIENT'S DEBT OBLIGATIONS: ' Section 1. General obligation debt, except tax increment, refunding and negotiated debt: Amount of Amount of ' Debt Obligation Debt Obligation (000 Omitted) Fee (000 Omitted) Fee $ 0 - 500 $6,500 $2501 - 3000 $14,500 501 - 1000 8,700 3001 - 3500 15,700 1001 - 1500 10,900 3501 - 4000 16,900 1501 - 2000 12,100 4001 - 4500 17,900 2001 - 2500 13,300 4501 - 5000 and upwards 18,900, plus$800 per$.5 million or any part thereof in excess of$5 million The foregoing schedule shall include Financial Advisor's services through closing of a Debt Obligation. If Financial Advisor performs post-closing services relative to a Debt Obligation, it shall be compensated for such services at the hourly rates set out in Section 5 below. Section 2. Revenue, advance refunding and tax increment debt: 1.5 times the fee set out in Section 1 above. Section 3. Negotiated debt: 1 To be negotiated Section 4. Expenses: ' Client shall be responsible for issuance expenses including, without exclusion of other expenses: (i) printing and distributing the Official Statement, (ii) computer runs, (iii) publication of notices, (iv) legal fees, (v) printing, (vi) delivery and settlement, (vii) travel, (viii) rating fees, (ix)out-of-pocket expenses including duplication, telephonic toll charges, postage and delivery charges, and (x) governmental and governmental agency fees and charges. A-1 1 I ISection 5. Schedule of hourly rates for non-Debt Obligation related services: I Senior Officer $150 Project Manager $125 Other Professional Staff $90 Support Staff $35 Other Officers $115 Section 6 Special Services: The Financial Advisor shall provide the Client a total of 50 hours per year at no I charge of professional staff time for special services for tax increment related projects which will not require bond sales. These services include pay-as- you-go financings, developer negotiations, analyses of proposals for I consistency with Client policies, cash flow analyses and project financial administration. Section 7. In the event it is necessary for Financial Advisor to repeat Debt Obligation I services because of events beyond Financial Advisor's control, Financial Advisor shall be compensated for such repetitive services at the hourly rates set out in foregoing Section 5 of this Appendix. If the repetitive services are I by reason of fault of Financial Advisor, Financial Advisor shall not be entitled to additional compensation. This section shall not be applicable for failed referenda unless otherwise provided as an Additional Agreement between Client and Financial Advisor. ISection 8. Due Dates: 1. Financial Advisor's fees for a Debt Obligation shall be contingent upon closing of the Debt Obligation, except that if the Debt Obligation is awarded but cannot be closed by reason of an error or act of I commission or omission by Client, Financial Advisor shall be paid the amount which would have been due upon closing. If, however, the reason for non-closing is beyond the control of Client and without fault of Client, then Financial Advisor shall be compensated at one-half the Iamount which would have been due upon closing. 2. Amounts due Financial Advisor for expenses and services charged at Ihourly rates shall not be contingent. 3. All amounts due Financial Advisor shall be due upon Client's receipt of Ibilling. Section 9. The fees set out herein shall be effective for 12 months from the effective date of the Agreement and shall extend to any Debt Obligation commenced by the I performance of a Financial Advisor service relative to the Debt Obligation within said 12-month period. Thereafter, Financial Advisor's compensation shall be at the rates charged other similar clients as of the time a Debt I Obligation is commenced, except that in no event shall the rates pursuant to the Agreement be increased over those herein more than five percent per year without authorization of Client. I I I A-2 ABANDONMENT: If a Client Debt Obligation is abandoned for any reason and Financial Advisor is without fault for such abandonment, Financial Advisor shall be paid a fee of the amount that would have been due if Financial Advisor's services to the point of abandonment had been charged at the hourly rate set out in Section 5 herein. Abandonment due to failure to legally qualify an issue shall occur whenever legal counsel has notified Client that such counsel will not be able to render an unqualified approving opinion as to the legality of the Debt Obligation. For situations other than abandonment by reason of lack of legal qualification, a Debt Obligation shall be deemed abandoned whenever Client has taken no action with respect to the Debt Obligation within one year. Delay in the issuance of Debt Obligations resulting from failed authorization referenda shall not constitute abandonment unless otherwise provided as an Additional Agreement between Client and Financial Advisor. This Appendix is acknowledged to be a part of the Agreement, effective as of October 1, ' 1989, between Client and Financial Advisor. FOR CLIENT 1 Title ' FOR FINANCIAL ADVISOR David N. MacGillivray Vice President 1 1 A-3 '