HomeMy WebLinkAbout127-00 RESOLUTION•
RESOLUTION NO. 127-00
MICROFILMED
A RESOLUTION AWARDING RFP#16 TO BANK OF AMERICA
AND BANK OF AMERICA SECURITIES FOR VARIABLE RATE
DEMAND BOND DEALER SERVICES AND AUTHORIZING
THE MAYOR AND CITY CLERK TO EXECUTE THE
AGREEMENTS FOR SERVICES; AND APPROVING ABUDGET
ADJUSTMENT IN THE AMOUNT OF $50,000.
BE IT RESOLVED 13Y THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,
ARKANSAS*
Section 1. That the City Council hereby awards RFP#16 to Bank of America and Banc
of Amenca Securities for variable rate demand bond dealer services and authorizes the Mayor and
City Clerk to execute said agreements for services. A copy of the agreements are attached hereto
marked Exhibit "A" and made a part hereof.
Section 2. The City Council hereby approves a budget adjustment in the amount of
$50,000 increasing Trustee & Paying Agent Fees, Acct. No. 5400 6800 7502 00, Project No. 98047
40 by decreasing Use of Fund Balance, Acct. No. 5400 0940 4999 99. A copy of the budget
adjustment is attached hereto marked Exhibit "B"and made a part hereof.
PASSED AND APPROVED this 19th day of September , 2000.
Warte
ATTEST
By: eAla
( Heather Woodruff, City C rk
APPROVED.
By:
F ed Hanna, Mayor
NAME OF FILE:
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Banc of America Securities
James R. Niederle
Managing Director
September 12, 2000
Mr. John Maguire
Administrative Services Director
City of Fayetteville
113 West Mountain
Fayetteville, AK 72701
Bankofkmerie..XHIBIT A
•
5433 Westheimer
Houston, TX 77056
Tel 713-993-1644
Fax 713-993-1655
Re: $10 Million Variable Rate Demand Notes ("VRDN") for Water & Sewer Improvements
Dear John:
The purpose of this engagement letter is to describe the services to be performed as the underwriter for
the above cited transaction. We understand that tax-exempt revenue bonds as weekly variable rate
demand bonds are to be issued for the purposes of funding the costs of construction for upgrades to the
City's Water & Sewer System.
SCOPE OF ENGAGEMENT
In this engagement, Banc of America Securities LLC ("BAS") will perform the following duties:
1. Assist the financing team in developing a financing structure that delivers the most effective total
interest rate and financing costs to the City.
2. Direct the sale of the securities to the most appropriate buyers to assure the City of the lowest
possible total interest rates consistent with the type of security being offered.
3. Assist in arranging for a liquidity facility with a rating of Al+/P-lor better.
4. Attend all required meetings of the City and the bond closing.
5. Direct the preparation, printing and distribution of the Preliminary and Final Official Statements.
6. Conduct a full due diligence investigation of the City and all bond documentation.
7. Arrange for the closing and funding of the issue.
8. Perform such other duties and tasks as mutually agreed and necessary to complete the financing.
9. Arrange for the closing and funding of the issue.
10. Perforin such other duties and tasks as mutually agreed and necessary to complete the financing.
m
2
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E
co 3
Mr. John Maguire
September 12, 2000
Page 2
BAS' underwriting fee for the above -referenced services will not exceed .20% of the par amount of the
bonds issued. The City will pay all costs of issuance including, but not limited to, bond and underwriter's
counsels, trustee, rating agency fees, printing, and closing costs. BAS' underwriting fee will be payable
at closing upon the funding and delivery of the bonds. Underwriter's counsel fee will not exceed
510,000. The amount of the fee will be stated in the Bond Purchase Agreement, a binding contract
between the City and BAS, which is signed and executed at the actual time of the sale of bonds.
Upon execution of this engagement letter, BAS will participate in retaining the required financing
participants, subject to approval of the City, and proceed with the financing as rapidly as possible. This
agreement will remain in force for a period of one year unless terminated or extended in writing upon 30
days notice by either the City or BAS
At closing BAS will provide a separate Remarketing Agreement to be executed by the City and BAS to
remarket the variable rate demand bonds for a fee of 1/10% of the par amount outstanding paid quarterly
in arrears.
Should you have any questions regarding the above, please feel free to give me a call. If in agreement
with the terms as stated, please sign and return the original to me and keep a copy for your files.
Very truly yours,
( leI�
Nied
Managing Director
ACCEP E-/G44491�
Accepted this _ day of September, 2000.
•
BankofAmerica
PROPOSAL LETTER
September 5, 2000
John Maguire
Administrative Services Director
City of Fayetteville
113 West Mountain
Fayetteville, Arkansas 72701
Dear John,
Bank of America
Commercial Banking
AR3-376-01-06
One East Center
Fayetteville, AR 72701
Tel 501.872.4478
501.872.4016
Fax 501.872.4355
We have previously discussed, Bank of America, N.A. is interested in discussing extending a
liquidity facility to the City of Fayetteville. Enclosed is a term sheet outlining the provisions of
a liquidity facility which Bank of America could possibly make. This letter and the attached term
sheet do not constitute a commitment on the part of Bank of America to make the proposed
liquidity facility and are intended as an outline only and do not purport to summarize all of the
terms, conditions, covenants, representations, warranties and other provisions which would be
contained in definitive legal documentation for the proposed transaction. Any proposal by Bank
of America to actually provide a facility would be subject to the negotiation, to the satisfaction of
Bank of America and its counsel, of all of the open issues outlined in the term sheet as well as
internal credit approval at Bank of America.
If you find the proposed terms and conditions generally acceptable, kindly indicate your interest
in pursuing this transaction by signing the enclosed copy of this letter and returning it to me. At
such time as I receive the signed copy of this letter from you, we will commence negotiations for
the proposed transaction and will discuss with you the due diligence and other investigations
which Bank of America, its counsel and agents, would have to undertake in order for Bank of
America to issue a commitment.
I certainly appreciate the opportunity to discuss potential financing opportunities with you and
look forward to your response to my letter. Hopefully, our continued discussions will result in
the further establishment of our mutually beneficial relationship between the City of Fayetteville
and Bank of America. Please give me a call to discuss this proposal. •I look forward to hearing
from you.
• •
TERMS AND CONDITIONS
BORROWER: City of Fayetteville
PURPOSE: Finance costs of development of the City of Fayetteville Water and Sewer
expansion through the use of a Bank of America Variable Rate Demand Bond
Program
AMOUNT OF LIQUIDITY FACILITY: $10,000,000.00 plus 35 days of interest
FACILITY FEE: 20 Basis points (.20%) paid quarterly in arrears
BANK BOND INTEREST RATE : 30 day LIBOR + 50 basis points on liquidity draws
with a duration of thirty days or less : or
30 day LIBOR + 100 basis points on liquidity draws in
excess of 30 days
Interest would be payable upon successful remarketing of the bonds or quarterly in the
event the duration exceeds 90 days with balance due at maturity.
MATURITY: Two year from date of closing
COLLATERAL: Special obligation of the City secured by a pledge of the net revenues of
the water and sewer system on subordinate basis with existing Water &
Sewer bonds.
FINANCING DOCUMENTS:
The financing shall be made under and governed by definitive financing documents to be
executed and delivered by the Borrower to the Bank and containing the terms set forth in this
commitment and such other terms, conditions, representations, warranties and covenants as are
usual and customary in lending transactions such as the financing, which documents may include
one or more promissory notes, loan agreements, security agreements, guaranties, mortgages,
pledge agreements, letter of credit applications/agreements, liquidity maintenance agreements,
assignments, financing statements and such other documents, instruments, guarantees, ,
certificates and agreements executed and/or delivered by the City, (collectively, the "Financing
Documents").
CONDITIONS TO CLOSING:
At the time of the closing, all official actions of the City of Fayetteville relating to the adoption
of the Ordinance authorizing the issuance of the debt shall be in full force and effect and there
shall have been taken all such actions as, in the opinion of appropriate legal counsel, shall be
necessary or appropriate in connection with the issuance of the debt and with the transactions
contemplated hereby.
The Bank shall have received, duly executed, all financing documents and any other documents
and instruments necessary or advisable in connection with the financing, all of which shall be in
form and substance satisfactory to the Bank and its counsel.
CLOSING COSTS AND EXPENSES:
Expenses: The Borrower shall pay all costs and expenses incurred by the Bank in connection
with the Bank's review, due diligence and closing of the financing, including attorneys' fees (to
include outside counsel fees and all allocated costs of Bank's in-house counsel if permitted by
applicable law) incurred by the Bank in connection with the negotiation and preparation of the
financing Documents, whether or not the financing actually closes not to exceed $10,000.00.
AMENDMENT AND WAIVER:
No alteration, modification, amendment or waiver of any terms and conditions of this proposal,
or of any of the documents required by or delivered to the Bank under this commitment, shall be
effective or enforceable against the Bank unless set forth in a writing signed by the Bank.
GOVERNING LAW:
This commitment and the financing shall be governed by and construed in accordance with the
laws of the State of Arkansas
INTEGRATION:
The terms set forth above represent the entire understanding between the Borrower and the Bank
with respect to the subject matter of this commitment, and this commitment supersedes any prior
and contemporaneous agreements, commitments, discussions and understandings, oral or written,
with respect to the subject matter of this proposal. Included within this understanding between
Borrower and the Bank is the letter of September 12, 2000 to Borrower from Jim Neiderle,
Managing Director of Banc of America Securities.
DISCUSSION PURPOSES ONLY*
This proposal letter with terms and conditions is for discussion purposes only and does not
constitute a commitment on the part of Bank of America to execute a financing and is intended
as an outline and does not purport to summarize all the terms, conditions, and covenants,
representations, warranties and other provisions which would be contained in definitive legal
documents.
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Bank of America
�l
PROPOSAL LETTER
September 5, 2000
John Maguire
Administrative Services Director
City of Fayetteville
113 West Mountain
Fayetteville, Arkansas 72701
Dear John,
Bank of America
Commerciat Banking
AR3-376-0106
One East Center
Fayetteville, AR 72701
Tel 501.872.4478
501.872.4016
Fax 501.872.4355
We have previously discussed, Bank of America, N.A. is interested in discussing extending a
liquidity facility to the City of Fayetteville. Enclosed is a term sheet outlining the provisions of
a liquidity facility which Bank of America could possibly make. This letter and the attached term
sheet do not constitute a commitment on the part of Bank of America to make the proposed
liquidity facility and are intended as an outline only and do not purport to summarize all of the
terms, conditions, covenants, representations, warranties and other provisions which would be
contained in definitive legal documentation for the proposed transaction. Any proposal by Bank
of America to actually provide a facility would be subject to the negotiation, to the satisfaction of
Bank of America and its counsel, of all of the open issues outlined in the term sheet as well as
internal credit approval at Bank of America.
If you find the proposed terms and conditions generally acceptable, kindly indicate your interest
in pursuing this transaction by signing the enclosed copy of this letter and returning it to me. At
such time as I receive the signed copy of this letter from you, we will commence negotiations for
the proposed transaction and will discuss with you the due diligence and other investigations
which Bank of America, its counsel and agents, would have to undertake in order for Bank of
America to issue a commitment.
I certainly appreciate the opportunity to discuss potential financing opportunities with you and
look forward to your response to my letter. Hopefully, our continued discussions will result in
the further establishment of our mutually beneficial relationship between the City of Fayetteville
and Bank of America. Please give me a call to discuss this proposal. I look forward to hearing
from you.
• •
TERMS AND CONDITIONS
BORROWER: City of Fayetteville
PURPOSE: Finance costs of development of the City of Fayetteville Water and Sewer
expansion through the use of a Bank of America Variable Rate Demand Bond
Program
AMOUNT OF LIQUIDITY FACILITY: $10,000,000.00 plus 35 days of interest
FACILITY FEE: 20 Basis points (.20%) paid quarterly in arrears
BANK BOND INTEREST RATE : 30 day LIBOR + 50 basis points on liquidity draws
with a duration of thirty days or less : or
30 day LIBOR + 100 basis points on liquidity draws in
excess of 30 days
Interest would be payable upon successful remarketing of the bonds or quarterly in the
event the duration exceeds 90 days with balance due at maturity.
MATURITY: Two year from date of closing
COLLATERAL: Special obligation of the City secured by a pledge of the net revenues of
the water and sewer system on subordinate basis with existing Water &
Sewer bonds.
FINANCING DOCUMENTS:
The financing shall be made under and governed by definitive financing documents to be
executed and delivered by the Borrower to the Bank and containing the terms set forth in this
commitment and such other terms, conditions, representations, warranties and covenants as are
usual and customary in lending transactions such as the financing, which documents may include
one or more promissory notes, loan agreements, security agreements, guaranties, mortgages,
pledge agreements, letter of credit applications/agreements, liquidity maintenance agreements,
assignments, financing statements and such other documents, instruments, guarantees, ,
certificates and agreements executed and/or delivered by the City, (collectively, the "Financing
Documents").
CONDITIONS TO CLOSING:
At the time of the closing, all official actions of the City of Fayetteville relating to the adoption
of the Ordinance authorizing the issuance of the debt shall be in full force and effect and there
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shall have been taken all such actions as, in the opinion of appropriate legal counsel, shall be
necessary or appropriate in connection with the issuance of the debt and with the transactions
contemplated hereby.
The Bank shall have received, duly executed, all financing documents and any other documents
and instruments necessary or advisable in connection with the financing, all of which shall be in
form and substance satisfactory to the Bank and its counsel.
CLOSING COSTS AND EXPENSES:
Expenses: The Borrower shall pay all costs and expenses incurred by the Bank in connection
with the Bank's review, due diligence and closing of the financing, including attorneys' fees (to
include outside counsel fees and all allocated costs of Bank's in-house counsel if permitted by
applicable law) incurred by the Bank in connection with the negotiation and preparation of the
financing Documents, whether or not the financing actually closes not to exceed $10,000.00.
AMENDMENT AND WAIVER:
No alteration, modification, amendment or waiver of any terms and conditions of this proposal,
or of any of the documents required by or delivered to the Bank under this commitment, shall be
effective or enforceable against the Bank unless set forth in a writing signed by the Bank.
GOVERNING LAW:
This commitment and the financing shall be governed by and construed in accordance with the
laws of the State of Arkansas
INTEGRATION:
The terms set forth above represent the entire understanding between the Borrower and the Bank
with respect to the subject matter of this commitment, and this commitment supersedes any prior
and contemporaneous agreements, commitments, discussions and understandings, oral or written,
with respect to the subject matter of this proposal. Included within this understanding between
Borrower and the Bank is the letter of September 12, 2000 to Borrower from Jim Neiderle,
Managing Director of Banc of America Securities.
DISCUSSION PURPOSES ONLY*
This proposal letter with terms and conditions is for discussion purposes only and does not
constitute a commitment on the part of Bank of America to execute a financing and is intended
as an outline and does not purport to summarize all the terms, conditions, and covenants,
representations, warranties and other provisions which would be contained in definitive legal
documents.
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Banc of America Securities
James R. Niederle
Managing Director
September 12, 2000
Mr. John Maguire
Administrative Services Director
City of Fayetteville
113 West Mountain
Fayetteville, AK 72701
Bank ofAmerit
Wer
5433 Westheimer
Houston, TX 77056
Tel 713-993-1644
Fax 713-993-1655
Re: $10 Million Variable Rate Demand Notes ("VRDN") for Water & Sewer Improvements
Dear John:
The purpose of this engagement letter is to describe the services to be performed as the underwriter for
the above cited transaction. We understand that tax-exempt revenue bonds as weekly variable rate
demand bonds are to be issued for the purposes of funding the costs of construction for upgrades to the
City's Water & Sewer System.
SCOPE OF ENGAGEMENT
In this engagement, Banc of America Securities LLC ("BAS') will perform the following duties:
1. Assist the financing team in developing a financing structure that delivers the most effective total
interest rate and financing costs to the City.
2. Direct the sale of the securities to the most appropriate buyers to assure the City of the lowest
possible total interest rates consistent with the type of security being offered
3. Assist in arranging for a liquidity facility with a rating of Al+/P-lor better.
4. Attend all required meetings of the City and the bond closing.
5. Direct the preparation, printing and distribution of the Preliminary and Final Official Statements.
6. Conduct a full due diligence investigation of the City and all bond documentation.
7. Arrange for the closing and funding of the issue.
8. Perform such other duties and tasks as mutually agreed and necessary to complete the financing.
9. Arrange for the closing and funding of the issue.
10. Perform such other duties and tasks as mutually agreed and necessary to complete the financing.
Mr. John Maguire
September 12, 2000
Page 2
BAS' underwriting fee for the above -referenced services will not exceed .20% of the par amount of the
bonds issued. The City will pay all costs of issuance including, but not limited to, bond and underwriter's
counsels, trustee, rating agency fees, printing, and closing costs. BAS' underwriting fee will be payable
at closing upon the funding and delivery of the bonds. Underwriter's counsel fee will not exceed
$10,000. The amount of the fee will be stated in the Bond Purchase Agreement, a binding contract
between the City and BAS, which is signed and executed at the actual time of the sale of bonds.
Upon execution of this engagement letter, BAS will participate in retaining the required financing
participants, subject to approval of the City, and proceed with the financing as rapidly as possible. This
agreement will remain in force for a period of one year unless terminated or extended in writing upon 30
days notice by either the City or BAS.
At closing BAS will provide a separate Remarketing Agreement to be executed by the City and BAS to
remarket the variable rate demand bonds for a fee of 1/10% of the par amount outstanding paid quarterly
in arrears.
Should you have any questions regarding the above, please feel free to give me a call. If in agreement
with the terms as stated, please sign and return the original to me and keep a copy for your files.
Very truly yours,
a, NNiederle
IA -
Managing Director
ACCEPTED BY:
Accepted this _ day of September, 2000.
09/06/00 WED 12:45 FAX 5017187490 STEPHENS NW AR
111 DRAFT
CITY OF FAYETTEVIT•TT, ARKANSAS
COMMERCIAL PAPER ISSUE
Preliminary Schedule of Events
September 2000
October 2000
Event
1
.:::2iit
2000 Date
1
2
3
4
5
6
7
8
9
10
11.
.;;1'q
13
14
:0145...
16
17
iiS M19
21
20
21
`-2'l'
23
24
25
1;25l
29
27
28
;IQ ;:I
30
Bank of America/
Stephens
October
2
Distribute final draft of financing documents and POS
All Parties
09rosioo:
Z003
October 2000
Event
1
.:::2iit
2000 Date
1:1Sti
4
5
;:i(::,!
7
8
9
10
11
12
13
14
15
16
r110
:IMP
19
20
21
22
23
:29d:i
25
14611
27
28
29
30
31
29
30
Bank of America/
Stephens
October
2
Distribute final draft of financing documents and POS
All Parties
1 October 3
Public Hearing and Approval of Authorizing Ordinance
09rosioo:
Z003
November 21100_)
Event
Responsible
Parties
2000 Date
1
2
3
4
5
11141117.?
.
f!1
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Bank of America/
Stephens
October
2
Distribute final draft of financing documents and POS
All Parties
1 October 3
Public Hearing and Approval of Authorizing Ordinance
09rosioo:
Z003
Event
Responsible
Parties
2000 Date
September 12
Agenda Meeting with City to retain Underwriter
City/ Stephens
Septelriber 15
Distribute first draft of financing documents and
Preliminary Official Statement (POS)
Kutak Rock
September 18
Publish Notice of Public Hearing
Kutak Rock/
City
September 19
City Council Meeting to approve
Bank of America as Underwriter
City/ Stephens
September 22
Comments due on first draft of financing docutnents and POS
All Parties
September 26
Distribute second draft of fmancing documents and POS
Kutak Rock
September 29
Comments due on second draft of financing
documents and POS
All Parties
October 2
Send information to Standard and Poor's
Bank of America/
Stephens
October
2
Distribute final draft of financing documents and POS
All Parties
1 October 3
Public Hearing and Approval of Authorizing Ordinance
City/ Stephens/
Kutak Rock
October
6
Publish Authorizing Ordinance
City/
Kutak Rock
October 17
Obtain Rating from Standard and Poor's
Bank of America/
Stephens
October 18
Finalize fmancing documents and POS
Kutak Rock
October 24
Send POS to printer
Bank of America
October 26
Distribute POS to investors
Bank of America
November 6
Review Market and Pricing with City and Stephens
Bank of America
November 7
Offer issue
Bank of America
November 8
Close issue
All Parties
09rosioo:
Z003
City of Fayetteville, Arkansas
Budget Adjustment Form
EXHIBIT B
Budget Year
2000
Department: Public Works
Division: Water & Sewer
Program: WWTP Capital
Date Requested
09/26/2000
Adjustment #
Project or Item Requested:
$50,000 is requested in the Trustee & Paying
Agent Fees account.
Project or Item Deleted:
None. Use of Fund Balance is proposed.
Justification of this Increase:
The item is requested for the issuance cost
associated with the variable rate demand bond
issue.
Justification of this Decrease:
Sufficient cash and investments exist to
fund this request and comply with City
policy.
Increase Expen e(Decrease Revenue)
Account Name Amount Account Number Project Number
Trustee & Paying Agent Fees
50,000 5400 6800
7502 00 98047 40
c;/4
IM
A bra
Decrease Expense (Increase Revenue)
Account Name Amount Account Number Project Number
Use of Fund Balance 50,000
5400 0940 4999 99
Approval Signatures
Requested By
Budget Manage
Department Director
Admin.
Mayor
Date
Date
Date
Date
Budget Office Use Only
Type. A B C D
Date of Approval
Posted to General Ledger
Posted to Project Accounting
Entered in Category Log
Blue Copy: Budget & Research / Yellow Copy: Requester H:\BUDGE7\PROJECTS\BUD_ADJ\BA_2000\BD_ISSCT.WK4
FAYETTEWILLE
THE CITY OF FAYETTEVILLE, ARKANSAS
DEPARTMENTAL CORRESPONDENCE
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TO:
THRU:
FROM:
DATE:
Mayor Fres Hanna and City Council
l
John M •P' . i min,. a ive Services Director
Stephen Davis, Budget Manag
September 5, 2000
SUBJECT: Wastewater Treatment Plant Expansion Project - Financing
Staff requests City Council approve contracts with Bank of America (BOA) and Banc of America
Securities to provide variable rate demand bond dealer services in conjunction with the City's
Wastewater Treatment Plant Expansion Project. The contracts call for BOA to issue ten million
dollars ($10 million) of variable rate demand bonds on behalf of the City. The funds will be used
to reimburse the Water & Sewer Fund for expenditures paid from the Water & Sewer operating and
capital budgets.
The contracts are for BOA to provide variable rate demand bond services with the bonds coming due
in two years. At the end of the two years, the City may renew the contract with BOA or issue
revenue bonds.
In addition to approving the contracts with BOA, bond counsel is preparing an ordinance. City
Council will be requested to approve the bond ordinance that authorizes the borrowing of funds at
the October 3, 2000 City Council meeting.
Background
In late1995, the City commissioned a comprehensive sewer system study. The study produced an in-
depth facilities plan that recommended additional wastewater treatment plant capacity. The most
economic expansion option was to construct a second plant in the Illinois River watershed and
upgrade the existing Paul Noland Wastewater Treatment Plant. The City has subsequently purchased
land and equipment and entered into preliminary engineering contracts In October 1999, City
Council passed Resolution 126-99 which states, in part, the intent of the City to reimburse certain
expenditures pertaining to the planning, designing, financing, acquiring, constructing, and equipping
of a wastewater treatment project with the proceeds of an issue or issues of tax-exempt bonds.
Earlier this year, a selection committee was established to select a consultant for a development
impact fee study. Last week the selection committee met and voted to initiate contract negotiations
•
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with Duncan and Associates. Contract negotiations are currently underway and the contract should
be available for City Council review and approval at the second meeting in October 2000.
Current Conditions
The land has been purchased for the proposed wastewater treatment plant in the Illinois River
watershed. Preliminary engineering contracts have been entered into between the City and various
engineering firms. The chlorine sterilization equipment at the Paul Noland Wastewater Treatment
Plant has been replaced with an ultra violet sterilization system. Several public meetings have been
conducted with the public, press, consulting engineers, and City staff.
Work on the project financing has included selection and contracting with legal counsel (Kutak
Rock), financial advisory services (Stephens, Inc ), selection of a development impact fee consultant
(Duncan and Associates), and selection of a variable rate demand bond dealer (Bank of America).
The variable rate demand bond dealer services are intended to reimburse the City for expenditures
made from the Water & Sewer capital and operations budgets over the past few years before the time
limit for reimbursement expires. The City continues to work on developing a long term financing
plan for the majority of the project costs. Currently, the most viable long term financing option
available to the City is participation in the State of Arkansas, Department of Environmental Quality
Revolving Loan Fund (ADEQ-RLF). The ADEQ-RLF offers the City approximately $80 million
with a level interest rate of 3.75% for up to twenty years.
Requested Action
Approval of the contracts with Bank of America (BOA) and Banc of America Securities is to provide
variable rate demand bond dealer services in conjunction with the City's Wastewater Treatment
Plant Expansion Project.
Cost of This Request
The cost of this request will be paid from the proceeds of the issue and is estimated to be $50,000.
The annual fees of $30,000 will be paid from the Water & Sewer operating budgets.
attachments:
Resolution 126-99
Request for Proposal #00-16 Variable Rate Demand Bond Dealer Services
H:\BUDGETPROJECTS\OTHER\wwtp_exp\variable.rare.demand.bonds.counciLagenda. WPD
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RESOLUTION NO 126-99
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mrcROF'J` _ry ED
A RESOLUTION EXPRESSING THE INTENT OF THE CITY OF
FAYETTEVILLE, ARKANSAS, TO REIMBURSE CERTAIN
EXPENDITURES OF THE CITY PERTAINING TO THE
PLANNING, DESIGNING, FINANCING, ACQUIRING,
CONSTRUCTING, AND EQUIPPING OF A WASTEWATER
TREATMENT PROJECT WITH THE PROCEEDS OF AN ISSUE
OR ISSUES OF TAX-EXEMPT BONDS TO BE ISSUED BY THE
CITY; AND STATING OTHER MATTERS PERTAINING
THERETO
WHEREAS, the City of Fayetteville, Arkansas, (the "City") intends to (i) construct a new
wastewater treatment plant in the western portion of the City, (ii) renovate its existing wastewater
treatment plant, and (in) make associated modifications to its wastewater collection system (the
"Project") to serve the growing needs of the residents of the City; and
WHEREAS, the City presently intends to finance a portion of the costs of planning,
designing, acquiring, constructing, and equipping the Project through the issuance of one or more
series of tax-exempt bonds of the City (the "Bonds"); and
WHEREAS, the City has determined the need to expend its funds to pay certain costs of the
Project prior to the issuance of the Bonds, and
WHEREAS, in order to utilize the proceeds of tax-exempt bonds to reimburse original
expenditures made by the City with respect to the Project, it is necessary under the Internal Revenue
Code of 1986, as amended (the "Code") and the U.S. Treasury Regulation Section 1.150-2 that the
City make a present declaration of its official intent to make such reimbursement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF FAYETTEVILLE, ARKANSAS•
Section L. That the City intends to issue its Bonds in one or more series in aggregate
principal amount not to exceed $25 million under the constitution and laws of the State of Arkansas
to finance a portion of the costs of planning, designing, acquiring, constructing, and equipping the
Proj ect.
Section ? That the City intends to utilize a portion of the proceeds of the Bonds to
reimburse itself for certain expenditures made by the City prior to the issuance of the Bonds with
respect to the planning, designing, acquiring, constructing, and equipping of the Project.
Section 3 That the City intends this resolution to be its declaration of "official intent"
under the Code and U.S. Treasury Regulation Section 1.150-2 to reimburse certain original
expenditures with respect to the Project.
•
•
•
•
Page 2
Resolution No 126-99
1
PASSED AND APPROVED this day of October , 1999.
ATTEST:
Heather Wgfo uff, City Clerk
By.
•
•
Fred Hanna, Mayor
1 •
CITY OF FAYETTEVILLE, ARKANSAS
RFP # 00-16
REQUEST FOR PROPOSALS
FOR
VARIABLE RATE DEMAND BOND DEALER SERVICES
August 4, 2000
113 WEST MOUNTAIN STREET
FAYETTEVILLE, ARKANSAS 72701
• REQUEST FOR PROPOSALS •
GENERAL REQUIREMENTS FOR PROPOSING
NOTICE TO THOSE SUBMITTING
Information provided in these specifications is to be used only for purposes stated. It is further
expected that each proposer will read these specifications with care.
The City of Fayetteville (hereinafter referred to as the "City") believes that the data contained in
these specifications are sufficient for preparation of proposals. The information is believed to be
accurate and is based on the latest available information, but is not to be considered in any way
as a warranty. Therefore, the proposer, in submitting a proposal, assumes the risk of any
inaccuracies in the information provided herein, which might result from failure to provide any
other information which might have been available.
SUBMISSION OF PROPOSALS AND QUESTIONS
Please submit your proposal to Peggy Vice at the address listed below:
Peggy Vice
Purchasing Manager
City of Fayetteville
113 West Mountain Street
Fayetteville, AR 72701
Nine (9) copies of each proposal must be received in the Purchasing Office at Room 306, 113 West
Mountain Street, Fayetteville, Arkansas, by 3:00 p.m. on August 21, 2000.
All proposals will become the property of the City. All proposals shall remain firm and subject to
acceptance for 90 days after opening.
PROPOSALS NOT CONSIDERED
All proposals received after the time specified shall not be considered.
Where proposals are mailed, the proposer assumes all risk for nondelivery by the U. S. Post Office
to the designated office by the deadline established. Only those proposals considered responsive to
the Request for Proposal will be eligible for consideration in the selection process.
REJECTION OF PROPOSAL
The City reserves the right to reject any and all proposals received in response to this RFP if
determined to be in the best interest of the City.
The City may not award a contract solely on the basis of this Request for Proposals, and does not
intend to pay for information solicited or obtained. The information obtained will be used to
determine suitability of the proposal.
Nonacceptance of any proposal does not convey criticism nor imply deficiency of that proposal.
Nonacceptance of any proposal will mean that another proposal was deemed more advantageous to
the City.
2
AMENDMENTS •
•
The City may require changes in the Scope of Services to be performed hereunder. Such changes
which are mutually agreed upon by and between the City and the firm, shall be incorporated by
amendment to the contract.
INSURANCE
Please provide, as part of your response to the Request for Proposal, evidence of insurance showing
type and amount of coverage for workers compensation, general liability, completed operations,
professional liability, errors and omissions insurance.
INDEPENDENCE
The firm should provide certification that it is independent of the City of Fayetteville, the City's
elected officials and the City's employees as part of the proposal.
APPLICABLE LAWS AND VENUE
The contract shall be made subject to all applicable Federal and Arkansas State Laws, the Charter
and Ordinances of the City of Fayetteville, as amended, and all applicable rules and regulations
promulgated by all local, state and national boards, bureaus and agencies. The contract shall be
enforceable in Fayetteville, Arkansas, and if any legal action is necessary by eitherparty with respect
to the enforcement of any or all terms and conditions herein, exclusive venue for same shall lie in
Fayetteville, Arkansas. The contract shall be governed and construed in accordance with the laws
and Court Decisions of the State of Arkansas.
• CITY OF FAYETTEVILLE •
SPECIFIC REQUIREMENTS FOR PROPOSAL
SUMMARY STATEMENT
The City is seeking proposals from firms qualified to issue and underwrite, as necessary, variable
rate demand bonds on behalf of the City in amounts up to $30 million. The variable rate demand
bond dealer services are to begin as soon as practical after City Council approval. The proposers
shall list their fees for management of the variable rate demand bond issuance in basis points with
a rate for demand bonds issued and outstanding and a separate rate for standby amounts committed
and not issued.
The demand bond issuance commitment shall be for a period of not less than five (5) years.
Any questions and correspondence may be directed in writing to John Maguire, Administrative
Services Director, at 113 West Mountain Street, Fayetteville, Arkansas 72701 or by calling (501)
575-8330.
Nine (9) copies of the proposal should be submitted as directed in the General Requirements section
ofthis RFP. Proposals should be limited to twenty-five (25) pages with a separate appendix that lists
references and/or examples of similar work.
II BACKGROUND
The City is planning an expansion of our waste water treatment plant and sewer collection system.
The project is expected to cost between $67 and $80 million. The majority of the project cost is
expected to be funded through a State of Arkansas loan pool.
III SCOPE OF SERVICES
The City requests proposals for Variable Rate Demand Bond Dealer Services. The City expects to
utilize variable rate demand bonds to provide interim financing for the project in principal amounts
not to exceed $30 million. The City expects an initial draw down of $10 million. The proposer
must be able to issue and underwrite, if necessary, the City's variable rate demand bonds. Any
commitment shall be for a period of not less than five (5) years.
The demand bonds will be supported by the net revenues of the City's Water & Sewer system and
will be subordinated to the City's existing Water & Sewer bonds. The City's present long term debt
for the water & sewer system is rated by S&P at "A" and Moody's "A- I ". It is expected that demand
bonds rating will be, at minimum, from S&P, A-2.
V FIRM REQUIREMENTS AND GUARANTEES
The Firm shall:
Provide management services required to issue and underwrite as necessary up to $30
million of variable rate demand bonds.
List the rate charged, in basis points, for variable rate demand bonds issued and
outstanding.
List the rate charged, in basis points, for variable rate demand bonds committed and not
issued.
4
Submit Appendix A'WOPOSER GUARANTEES" executed by tzlc-dppropriate firm official as the
firms' form of business dictates.
Submit Appendix B "PROPOSER WARRANTIES" executed by the appropriate firm official as the
firmsform of business dictates.
V QUALIFICATIONS
Firms responding to this request for proposal should include the following data in their proposals:
Demonstrated capital strength to commit its capital and underwrite the City's variable rate demand
bond program if necessary.
Proposed plan for issuing and managing the City's variable rate demand bond program to meet the
liquidity requirements of the planned project.
Resumes of the professional and key staff to be utilized in performing the services requested.
Company history and experience:
Provide a general description of the firm and its history and experience in providing similar services
to comparable clients. Include in your proposal a list of at least six major clients that may be
contacted for references.
VI SELECTION METHODOLOGY
Proposals will be reviewed by a committee that may consist of representatives of citizens, City
Council and City staff which will make a recommendation for selection to City Council. Selection
will be made pursuant to the City's professional selection policy with relevant factors as follows:
(1) Qualifications in relation to the specific project to be performed: 20%
(2) Experience, competence and capacity for performance: 20%
(3) Proposed method of doing work: 20%
(4) Past performance: 20%
(5) Price: 20%
VII TECHNICAL REQUIREMENTS
1. Proposals are due no later than August 21, 2000 at 3 p.m.
2. Proposals should be sent to: Peggy Vice, Purchasing Manager, 113 West Mountain, Fayetteville,
Ar. 72701
3. Nine (9) copies of the proposals should be provided. Please mark one copy as original.
4. Proposals should be labeled "Variable Rate Demand Bond Dealer Services" on the outside of the
envelope.
CURRENT STATUS •
•
The waste water treatment plant expansion project is currently in the initial design phase. The City has
invested approximately $8 million in engineering studies, land purchases, equipment purchases and has
entered into preliminary engineering design contracts for collection system improvements and waste water
treatment plant improvements. The expenses paid to date and contracts entered into for this project are as
follows:
Work Phase
Amount
Engineering Studies
863,906
Land Purchases
3,221,959
Equipment Purchases (UV System)
1,045,816
Engineering Contracts
2,403,279
Total
7,534,960
• APPENDIX A •
PROPOSER GUARANTEES
The proposer certifies it can and will provide and make available, at a minimum, all services set forth
in Section III, "Scope of Service."
Signature
Name
• APPENDIX B •
PROPOSER WARRANTIES
A. Proposer warrants that it is willing and able to comply with State of Arkansas laws with respect
to foreign (non -state of Arkansas) corporations.
B. Proposer warrants that it is willing and able to obtain an errors and omissions insurance policy
providing a prudent amount of coverage for the willful or negligent acts, or omissions of any
officers, employees or agents thereof.
C. Proposer warrants that it will not delegate or subcontract its responsibilities under an agreement
without the express prior written permission of the City of Fayetteville.
D. Proposer warrants that all information provided by it in connection with this proposal is true
and accurate.
Signature of Official:
Name (typed):
Title:
Firm:
Date:
0
STAFF REVIEW FORM
Date
XX AGENDA REQUEST
CONTRACT REVIEW
GRANT REVIEW
For the Fayetteville City Council meeting of September 19, 2000
FROM:
Stephen Davis Budget & Research Admin Services
Name Division Department
ACTION REQUIRED: Approval of contracts with Bank of America and Banc of America
Securities for variable rate demand bond dealer services and authorize the Mayor and
City Clerk to execute the contracts. Budget adjustment authorization is also
requested to implement the contracts.
COST TO CITY:
$50,000.00 estimated
Cost of this Request Category/Project Budget Category/Project Name
Account Number Funds Used To Date Program Name
Project Number Remaining Balance Fund
BUDGET REVIEW: Budgeted Item Budget Adjustment Attached
Budget'Managet Administrative Services Director
CONTRACT/GRANTJLRSE REVIEW: GRANTING AGENCY:
Qirn/iv 9'/3 QD LF 0
A counting M nag Date Internal uditor Date
4/1-
Ci Attorney Date ADA Coordinator Date
Purchasing Officer Date Grant Coordinator Date
STAFF RECO NDATION:Staff recommends approval of the contracts.
Divisio Head Date Cross Reference
New Item: Yes No
Prev Ord/Res #:
Orig Contract Date:
Orig Contract Number:
OA R
Ka R
. .
STAFF REVIEW FORM - Page 2
Description \%4a15 Q,ACi_ C4cmcd 65 Meeting Date __
Comments:
Budget Manager
Reference Comments:
Aceounting Mann
fJ Qy��-� ski
ity Atttor ey ey '�1„#�2a�e—,r`a..`o �
Purchasing Officer
ADA Coordinator
Internal Auditor
Grants Coordinator
FAYETTEALLE i
THE CITY OF FAYETTEVIUE, ARKANSAS
DEPARTMENTAL CORRESPONDENCE
To: John Maguire, Administrative Services Director
From: Heather Woodruff, City Clerk
Date: October 5, 2000
Attached is a copy of the resolution and contract with the Bank of America Securities for
variable rate demand bond dealer services. The original will be microfilmed and filed with the
City Clerk.
cc: Nancy Smith, Internal Audit
0
RESOLUTION NO. 127-00
A RESOLUTION AWARDING RFP#16 TO BANK OF AMERICA
AND BANKOF'AIvfERICA SECURITIES FOR VARIABLE RATE
DEMAND, BOND DEALER SERVICES AND AUTHORIZING
A V 4% ..c.. 1.. t P•
THE'�MAYOR4 AND CITYCLERK TO EXECUTE THE
AGREEMENTS FOR SERVICES; AND APPROVING A BUDGET
ADJUSTMENT'IN THE'AMOUNT OF $50,000.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,
ARKANSAS:
Section 1. That the City Council hereby awards RFP#16 to Bank of America and Banc
of America Securities for variable rate demand bond dealer services and authorizes the Mayor and
City Clerk to execute said agreements for services. A copy of the agreements are attached hereto
marked Exhibit "A" and made a part hereof.
Section 2. The City Council hereby approves a budget adjustment in the amount of
$50,000 increasing Trustee & Paying Agent Fees, Acct. No. 5400 6800 7502 00, Project No. 98047
40 by decreasing Use of Fund Balance, Acct. No. 5400 0940 4999 99. A copy of the budget
adjustment is attached hereto marked Exhibit "B"and made a part hereof.
PASSED AND APPROVED this 19th day of September , 2000.
APPROVED
1 By.
F ed Hanna, Mayor
41