Loading...
HomeMy WebLinkAboutresolution.council.060-99 r---. RESOLUTION NO. .1cfl (SERIES OF 1999) A RESOLUTION GRANTING CONTRACT FOR INVESTMENT BANKING SERVICES TO BIGELOW & COMPANY, FOR THE CITY'S $13,890,000 SALES TAX REVENUE BONDS, SERIES 1999, AND AUTHORIZING THE FINANCE DIRECTOR TO EXECUTE SAID CONTRACT ON BEHALF OF THE CITY OF ASPEN WHEREAS, there has been submitted to the City Council a contract between the City of Aspen, Colorado and Bigelow and Company, Denver, Colorado, a copy of which contract is annexed hereto and part thereof. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO. Section One That the City Council of the City of Aspen hereby approves that the contract between the City of Aspen, and Bigelow and Company, regarding the Investment Banking Services for the City's $13,890,000 Sales Tax Revenue Bonds, Series 1999, a copy of which is annexed hereto and incorporated herein, and does hereby authorize the ~ Finance Director to execute said contract on behalf of the City of Aspen. Dated: 'd-z. ~~ eX .1999. \ "'---:- Ra hel E. Richards, Mayor I, Kathryn Koch, duly appointed and acting City Clerk do certify that the foregoing is a true and accurate copy of that resolution adopted by the City Council of the City of Aspen; CeJorado at a meeting held June 29th, 1999. . ~4~~ Kathryn S. h, City Clerk - r---.. June 29,1999 ~ Mayor and City Council C/O Tabatha Miller City of Aspen 130 So. Galena St. Aspen, CO 81611 RE: Contract for Investment Banking Services Ladies and Gentlemen: ~ Bigelow & Company ("Bigelow") is pleased to submit this contract to provide investment banking services to the City of Aspen (the "City") for their proposed issuance of approximately $13,890,000 Sales Tax Revenue Bonds, Series 1999 (the "Bonds"). We would envision our role as your investment banker to include, but not necessarily be limited to: providing the City with assistance and advice with all required elections pertaining to the Bonds; structuring the Bonds to best meet the financial requirements of the City; assistance with the bond rating and bond insurance submission requests and presentations; preparing and reviewing of all necessary financing documents; advising the City on bond market conditions; underwriting and selling the Bonds; coordination of Bond closing details and delivery of the Bonds; conducting a pre- and post-sale marketing analysis relating to the sale of the Bonds; and assisting the City with arbitrage concerns and the reinvestment of Bond proceeds prior to expenditure. During this engagement we have or will provide the following services: 1. Assist in the BondElection We have assisted the City in the preparation and dissemination'of information about the Bond election, counseled the Council and staff on election strategy, attended public meetings, and provided the City with procedures and materials required for the election. We have participated and advised the City Finance Director and City Attorney with the election question, and structured such question to comply with the requirements of Amendment One. 2. Structuring the Bond Issue A. We have reviewed the City's financial structure including the general fund operations, audited financial statements, budgets and capital improvement plans. In cooperation with the Council and staff, we have determined the impact of the project on the City's overall financial condition and advised you of our findings. B. We have analyzed the sales tax revenues pledged to the repayment of the Bonds and all outstanding bonds payable from the same revenue stream, and made ~ r- recommendations as to any required re-structuring constraints necessary to issue parity lien Bonds. C. After the election, we have make recommendations as to the timing and sale of the Bonds. In connection with this, we were responsible for the preparation of an information package for submission to the rating agencies and bond insurance companies to maximize the credit quality of the Bonds. To the extent that presentations were required to these rating agencies and bond insurers, we have coordinated all presentation materials and travel plans, and assisted the City representatives as to their role in the presentation process. 3. Assist in Development of Legal Documentation We will assist the City's staff and Bond and Disclosure Counsel in the development of the basic documents necessary to legally accomplish the proposed financing, including the preliminary and final official statements, Bond Ordinance, paying agent and registrar agreement and escrow or cash defeasance agreement. 4. Advise the City on Bond Market Conditions ~ As your investment banker, we will have the primary responsibility for preparing the City's Bonds for marketing at prevailing interest rates. In order to minimize the interest costs on the City's Bonds, we will monitor and inform the City Council and staff as to bond market conditions, potential impact of any outstanding litigation .against the City which could impact the salability of the Bonds, estimated interest rates that could be anticipated on the Bonds, and new or innovative financing techniques that could impact the sale of the 'Bonds. On an on-going basis, we will advise the Council and staff as appropriate and as requested with regard to the issuance of the Bonds. 5. Sale of the Bonds Bigelow will be compensated for providing investment banking services to the City in the following manner: ~ A. Bigelow will be granted an option to purchase the City Bonds at interest rates and terms mutually agreed upon between the City and Bigelow. Bigelow will be compensated through an underwriter's discount not to exct;ed $8.00 per $1,000 (i.e. 0.8%) of the par amount of Bonds underwritten. Bigelow will disclose to the City both the proposed and final profit it made in the sale of the Bonds. Bigelow will provide the City with a pre- and post-sale marketing analysis, which will include interest rate comparisons of similar issues. It is anticipated that the sale of the Bonds will also include either Registered Coupons or premium Bonds, the proceeds of which will be used to cover the costs of issuance of the Bonds. The preliminary costs of issuance will be based upon a detailed cost analysis provided r". at the time of sale, to be followed by a final analysis prior to closing. Based upon current market conditions, it is anticipated that the Bonds will be structured and priced as shown on the attached Exhibit A. Final interest rates and terms will be negotiated with the City Finance Director and other staff designated by the City Council, prior to and during the offering of the Bonds, which is anticipated to occur on or about July 8, 1999. Upon the successful offering and marketing of Bonds, the City Finance Director shall be empowered to immediately sign a Bond Purchase Agreement with Bigelow, which shall subsequently be ratified by the City Council at its next scheduled meeting. "B. Due to the litigation challenging the constitutionality of the City's sales tax, which is being pledged to the repayment of the Bonds, the marketing of the Bonds is anticipated to be sold to institutional or accredited investors, rather than individual investors. Institutions would include banks, insurance companies, bond funds and qualified investment advisors. 6. Bond Closing and Delivery of Securities Bigelow will arrange for the signing of closing documents and all necessary resolutions and ordinances required for the issuance of the Bonds, and also oversee the closing of the Bonds and assist the City so that Bond moneys are received in a timely manner for reinvestment. ~ 7. Assist the City with Reinvestment of Bond Proceeds and Arbitrage Concerns Bigelow will make recommendations and assist the City as desired with the reinvestment of Bonds proceeds in order to minimize arbitrage concerns and maximize reinvestment potential prior to expenditure on Project expenses. This contract shall be effective upon proper action taken by the City Council, at any regular or special meeting. . The contract may be terminated with or without cause by either party with written notice of termination to be given thirty days prior to such date. We appreciate the opportunity of continuing our relationship with the City. Respectfully submitted, Bigelow & Company ~ By' Steven D. Jeffers Upon proper resolution, this contract is accepted this ~ay of ~ and on behalf of the City of Aspen, Colorado. ~, r Attest: By ~)~ r'o, ~. '" A:~J'a.'Iff9' 1/W,!6/W II..J1AM -"' r---. Interest Rates as of 6/28/99 EXHIBIT A $13,890,000 CITY OF ASPEN, COLORADO SALES TAX REVENUE BONDS 20 YEAR DEBT. S&P A- RATED AS OF AUGUST 1,1999 Uses of Bond Proceeds: Project Cost Create Reserve Fund Costaf Issuance Underwriters Discount Premium Generated From liB" Coupons Total 12.697.833 1.192.168 63.528 126.810 .___(190.338) 13.890.000