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HomeMy WebLinkAboutresolution.council.125-17 RESOLUTION #125 (Series of 2017) A RESOLUTION OF THE ASPEN CITY COUNCIL, APPROVING A CONTRACT BETWEEN THE CITY OF ASPEN AND STIFEL, NICOLAUS & COMPANY, AUTHORIZING THE CITY MANAGER TO EXECUTE SAID CONTRACT ON BEHALF OF THE CITY OF ASPEN, COLORADO. WHEREAS, the Finance Department distributed an open bid for services underwriter services associated with the financing of a new public safety building for the Aspen Police Department in 2016; and WHEREAS, the City received six responses for said services and evaluated those responses for the following criteria: firm and individual team member experience, knowledge of the City of Aspen and its financial position, knowledge of COP placement and past performance with COP issues, fees, and references; and WHEREAS, Stifel, Nicolaus & Company, submitted the best combined proposal relative to firm and individual experience, knowledge of Aspen and resort mountain towns in general, and fees; and WHEREAS, the proposed issuance of debt for purchasing land associated with future water storage is similar in nature and can leverage the recent experience of Stifel, Nicolas and Company under the same terms of the City's recent engagement for the Aspen Police Department financing; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, That the City Council of the City of Aspen hereby approves that contract for underwriter services (attached hereto), between the City of Aspen and Stifel,Nicolaus & Company and does hereby authorize the City Manager to execute said agreement on behalf of the City of Aspen. INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on the 25t11 day of September, 2017. Steven Skadro Mayor I, Linda Manning, duly appointed and acting City Clerk do hereby certify that the foregoing is a true and accurate copy of the resolution adopted by the City Council of the City of Aspen, Colorado, at the meeting held September 25. 2017. UIA O , c EXHIBIT A Linda Manning, City Clerk 2 STIFEL UNDERWRITER ENGAGEMENT AGREEMENT THIS AGREEMENT' is made and entered into this 0 day of OA, 2013—by and among the City of Aspen, Colorado (the "Issuer") and Stifel, Nicolaus & Company, Incorporated, (the "Underwriter" or"Stifel"), with reference to the following facts: RECITALS WHEREAS,the Issuer plans to issue General Obligation Bonds, (the"Bonds" or the"Bond Issue")to finance certain improvments to the City's water system (the"Project");and WHEREAS,the Issuer desires and is authorized by law to retain the services of the Underwriter in connection with the issuance of the Bonds;and WHEREAS,the Underwriter agrees to be retained by the Issuer and to provide to the Issuer the services described herein;and WHEREAS,Stifel agrees to act as underwriter,subject to the conditions set forth herein; NOW therefore,for and in consideration of the mutual promises,covenants,and conditions herein contained,the parties hereto agree as follows: Scope of Services The Issuer has engaged the Underwriter to perform various services related to the issuance of the Bonds, which are to be performed within the framework of all relevant rules and regulations. All services are provided on an arm's length, commercial basis and may or may not be provided in conjunction with services provided by advisors to the Issuer,such as, but not limited to,a financial advisor or a municipal advisor. With this understanding, the Underwriter may provide the following services and perform the following functions with respect to the Bonds: A. Structuring the Financing 1. The Underwriter will work with the Issuer, its bond counsel, financial advisor, disclosure counsel, and other members of the Issuer's financing team in evaluating specific terms and conditions affecting the Bonds with the purposes of meeting the Issuer's financing objectives and assuring appropriate credit quality; 2. The Underwriter will work with the Issuer to create a feasible and efficient structure for the Bond Issue in order to enhance the Bonds' marketability; 3. In cooperation with Issuer, the Underwriter will assist in the preparation of and/or review of all documents necessary to implement the issuance of the Bond Issue, including, but not limited to, authorizing resolutions, bond purchase agreements, and preliminary and final official statements distributed to potential investors,as required; B. Marketing the Securities 1. The Underwriter will provide information and material as needed to support presentations for rating agencies and/or bond insurance companies; if requested; 2. The Underwriter will coordinate printing and distribution of the preliminary and final official statements; 3. Together with the Issuer and other appropriate parties,the Underwriter will provide market information on the timing of the sale of the Bonds in relation to the market conditions and financing needs; 4. The Underwriter will arrange for distribution of the final official statements in accordance with Section 240.15c2-12 of Title 17 of the Code of Federal Regulations; and 5. The Underwriter will serve as sole managing underwriter of the Bonds, which obligation is conditioned upon the execution of a mutually satisfactory bond purchase agreements and other customary documentation, and coordinate with all parties so as to consummate the sale and delivery of the 2017/2018 Bond Issues in a timely manner. Regulatory Disclosure Issuer is aware of Section 975 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Securities and Exchange Commission's adopted rule commonly known as the "Municipal Advisor Rule" (SEC Rule 1513a 1-1 to 158a1-8-"the Rule")and the underwriter exclusion from the definition of"municipal advisor"for a firm serving as an underwriter for a particular issuance of municipal securities. Some of the services that the Stifel will be called upon to perform, such as providing advice with respect to the sizing, structure, timing and terms of the Bond issuance,are services that are also commonly provided by financial advisory firms. However, in providing such services for theBond Issue,the parties understand and agree that Stifel is serving as an underwriter for these transactions and is permitted to give advice and recommendations under the "underwriter exclusion" provision of the Rule. Issuer agrees that Stifel will not be serving as the Issuers financial advisor or acting as an agent or fiduciary for the Issuer and that the Issuer will be consulting with its own legal,financial and other advisors. This Agreement and relationship shall be either executed, approved or acknowledged by the governing board of Issuer(the "Governing Board"). Disclosures Required by MSRB Rule G-17 Concerning the Role of the Underwriter 1. Municipal Securities Rulemaking Board ("MSRB") Rule G-17 requires an underwriter to deal fairly at all times with both municipal issuers and investors. 2. The underwriter's primary role is to purchase securities with a view to distribution in an arm's-length commercial transaction with the Issuer.The underwriter has financial and other interests that differ from those of the issuer. 3. The underwriter does not have a fiduciary duty to the issuer under the federal securities laws and is, therefore, not required by federal law to act in the best interests of the issuer without regard to its own financial or other interests. 4. The underwriter has a duty to purchase the securities from the issuer at a fair and reasonable price, but must balance that duty with its duty to sell the securities to investors at prices that are fair and reasonable. 5. The underwriter will review the official statement for the securities in accordance with, and as part of, its respective responsibilities to investors under the federal securities laws, as applied to the facts and circumstances of this transaction. 2 Disclosures Concerning the Underwriter Compensation The underwriter will be compensated by fees and/or an underwriting discount as outlined in the respective bond purchase agreements to be negotiated and entered into in connection with the issuance of the securities. Payment or receipt of the underwriting fee or discount will be contingent on the closing of the transactions and the amount of the fees or discount may be based, in whole or in part, on a percentage of the principal amounts of the securities. While this form of compensation is customary in the municipal securities market, it presents a conflict of interest since the underwriter may have an incentive to recommend to the Issuer a transaction that is unnecessary or to recommend that the size of the transaction be larger than is necessary. Conflicts of Interest Disclosures Stifel has not identified any additional potential or actual material conflicts that require disclosure. Disclosures Relating to Complex Municipal securities Financing Since Stifel has not recommended a "complex municipal securities financing' to the Issuer, additional disclosures regarding the financing structures for the Bond Issue is not required under MSRB Rule G-17. However, if Stifel recommends, or if the Issue is ultimately structured in a manner considered a "complex municipal securities financing" to the Issuer, this letter will be supplemented to provide disclosure of the material financial characteristics of that financing structure as well as the material financial risks of the financing that are known to us and are reasonably foreseeable at that time Limitation of Duties The Issuer acknowledges and agrees that Stifel is not making a commitment to extend credit, make a loan or otherwise fund the Projects beyond the obligations contained in a mutually satisfactory bond purchase agreement. The Issuer acknowledges that the services provided under this Agreement involve professional judgment by Stifel and that the results cannot be,and are not, guaranteed. As addressed above, among the services that Stifel will perform under this Agreement is assistance in preparation of, and/or review of the preliminary and final official statements for the Bonds. We note, however, that under federal securities law,an issuer of securities has the primary responsibility for disclosure to investors. Our assistance with respect to, and/or review of the official statement will be solely for purposes of satisfying our obligations as underwriter under the federal securities laws and such assistance and/or review should not be construed by the Issuer as a guarantee of the accuracy or completeness of the information in the official statement. Expenses The Issuer, from the Bond proceeds or other lawfully available funds, will pay for legal fees, including disclosure counsel; rating agency and credit enhancement fees including all related travel (if any);the cost of appraisal, fiscal consultant, statistical, computer, and graphics services (if any), cost of printing and distribution of the official statements and expense of publication, advertising, and informational meetings; and the costs of fiscal agent or bond trustee and registrar. 3 Compensation The Underwriter agrees to prepare and coordinate all aspects of the sale of the Bonds. Stifel will be paid only when the Bonds are sold. The fee for Stifel's preparation and coordination of the sale of the Bonds shall be$3.845 per $1,000.00 of Bonds sold. The underwriting fee is contingent on a.successful sale of the Bond Issue and is payable from the proceeds of the Bond Issue. Term of Agreement This Agreement is to continue until the Project is financed or until the Governing Board formally abandons the Project, unless previously terminated by mutual written consent of the parties hereto. This Agreement may be terminated at any time by the Issuer, upon five business days' prior notice to such effect to the Underwriter, or by the Underwriter upon five business days' prior notice to such effect to the Issuer. Any such termination,however,shall not affect the obligations of the Issuer under the Expenses section hereof. Severability of Provisions If any provision of this Agreement is held invalid,the remainder of the Agreement shall not be affected thereby if such remainder would then continue to conform to the terms and requirements of applicable law. Governing Law This Agreement, and the rights and obligations of the parties hereto, shall be construed, interpreted and enforced pursuant to the laws of the State of Colorado, and exclusive venue in any and all actions existing under this Agreement shall be laid in the action or proceeding which Issuer or Underwriter may be required to prosecute to enforce its respective rights within this Agreement. The unsuccessful party therein agrees to pay all costs incurred by the prevailing party therein, including reasonable interest and attorney's fees, to be fixed by court, and said costs, interest, and attorneys' fees shall be made a part of the judgment in said action. Prior to the commencement of any litigation concerning this Agreement, the Issuer and the Underwriter agree to first submit any disagreements to mediation. This mediation requirement is intended to reduce the costs of dispute resolution for both parties. Subcontractors The Underwriter shall, with the prior written approval of the Issuer, use such subcontractors as are necessary in the fulfillment of this Agreement. Miscellaneous Nothing contained herein shall preclude the Underwriter from carrying on its customary and usual business activities. The Underwriter specifically reserves the right, but is not obligated, to bid for and maintain secondary markets on any Issuer outstanding bonds subject to appropriate information barriers. Services provided by the Underwriter in connection with this Agreement shall not limit the Underwriter from providing services for the Issuer in conjunction with other services requested by the Issuer except as limited by rule of law or regulation. 4 In connection with services agreed to herein,it is understood that the Underwriterwill render professional services as an independent contractor. Neither the Underwriter nor any of its agents or employees shall be deemed an employee of the Issuer for any purpose. r . The Underwriter shall not assign or otherwise transfer any interest in this Agreement without the prior written consent of the Issuer. The Issuer acknowledges and recognizes Stifel as Underwriter with respect to the municipal securities referenced for purposes of MSRB Rule G-23 and Securities and Exchange Commission Rule 17 CFR (Registration of Municipal Advisors)and acknowledges receipt of the G-17 disclosures included herein. It is our understanding that you have the authority to bind the Issuer by contract with us, and that you are not a party to any conflict of interest relating to the subject transaction. If our understanding is incorrect, please notify the undersigned immediately. This Agreement constitutes the entire agreement between the parties relating to the subject matter thereof and supersedes any prior understandings or representations. The Agreement may be amended or modified only by a writing signed by both parties. It is solely for the benefit of the Issuer and Stifel, and no other person. This Agreement is submitted in duplicate originals. The acceptance of this Agreement by the Issuer will occur upon the return of one original executed by an. authorized Issuer representative, and the Issuer hereby represents that the signatory below is so authorized. IN WITNESS WHEREOF,the parties hereto have executed this Agreement as of the day and year first written above. Stifel, Nicolaus&Com�p'any, Incorporated By. Name: Michael Lund Title: Director Date: October 4, 2017 5 ACCEPTANCE City of Aspen, Colorado By: r�c- y ' Name: NIAC �QCC4 Title: /SSI CIV / Date: 6