Items 8C&8D!"'
ATTACHMENT 8 C & D
OCTOBER 25, 2004
~"
CITY OF ATLANTIC BEACH
~"' CITY COMMISSION MEETING
STAFF REPORT
AGENDA ITEM: Selection of bond counsel and underwriters for the purpose of
refunding the Utility Revenue Bonds, Series 1996.
DATE: October 18, 2004
SUBMITTED BY: Nelson Van Liere, Finance Director
BACKGROUND: In April of this year, the City selected Dunlap and Associates as
our Financial Advisor to assist us in the refunding of the 1996
Utility Revenue Bonds. At that time, the market declined and we
made the decision to postpone the process until the market
indicated better savings. Once again the market conditions have
made the prospect of refunding the City's Bonds an attractive one.
The Government Finance Officer's Association recommends that a
refinancing is worthwhile when at least a 3% savings can be
achieved. Figures run recently by our Financial Advisors, Dunlap
and Associates, revealed that a net present value savings of greater
than 6% could be attained.
Dunlap and Associates issued requests for proposals for both
underwriting services and for bond counsel as directed. Those
proposals were received and have been evaluated by them.
Attached to this report is the ranking indicating the top choices for
each service. All of the proposers are qualified to perform the
services and therefore, price is the most important element to base
the decision on.
Bond Counsel
,~• The ranking of bond counsel proposals indicates that Livermore,
Freeman & McWillliams, P.A. and Akerman, Senterfitt both have
the same price of $20,000. Based on the extensive references of
Livermore, Freemen & McWilliams in the local area, including
Jacksonville, Jacksonville Beach, and Neptune Beach, we have
selected them to represent the City of Atlantic Beach.
Underwriter Services
For Underwriter Services, the City will need a senior manager and
~"" co-manager firm. Based on the proposals, the top two choices are
A.G. Edwards at $3.87 per 1,000 of bonds and J.P. Morgan at
$3.92. A.G. Edwards is chosen as senior manager and J. P.
~""" Morgan as co-manager in accordance with the proposals
ATTACHMENT 8 C & D
OCTOBER 25, 2004
submitted. J.P. Morgan as co-manager on the issue will use the
+!~ underwriter's discount of $3.87 offered by A.G. Edwards. Both
firms provide excellent references.
~"' The selection of these firms will start the process of preparing all
the necessary documentation needed to refund the bonds. The
quoted prices do not include out-of-pocket expenses and assume
~"' that the process will proceed without any abnormal issues. The
fees are all contingent on the sale of the bonds except for the out-
of-pocket costs.
RECOMMENDATION: To authorize the City Manager to hire Livermore, Freeman
and McWilliams for bond counsel; and,
To authorize the City Manager to hire A.G. Edwards as
"'~ senior manager and J.P. Morgan as Co-manager for
underwriting services for the proposed issuance of the
Refunding Utility Revenue Bonds, Series1996 at an
underwriter's discount consistent with the proposals
received.
ATTACHMENTS: 1.) Summary of UnderwriterBond Counsel Proposals
2.) Agreement with Livermore, Freeman and
McWilliams for bond counsel.
3.) Dunlap and Associate memorandum with schedules
showing net present value savings.
REVIEWED BY CITY MANAGER: ~.'~
~ ~=~~
~~ur4u! ~~if~ifG
October 15, 2004
Mr. Nelson Van Liere
Director of Finance
CITY OF ATLANTIC BEACH
800 Seminole Road
Atlantic Beach, FL 32233-5445
Re: City of Atlantic Beach, Florida
Summary of Underwriter/Bond Counsel Proposals
Dear Mr. Van Liere:
ATTACHMENT 8 C & D
OCTOBER 25, 2004
Attached please find summaries of ten (10) underwriter and five (5) bond counsel proposals which were
submitted to the City on October 12, 2004. We have ranked each firm based on total gross spread and
fees, respectively. Each firm is qualified to undertake the assignment proposed by the City.
Once the City has selected the underwriter and bond counsel firms, we, as financial advisor, will assure
the City that the present value savings are maximized.
If you have any questions or require additional information, please do not hesitate to contact us.
Sincerely,
ylvia S n-
Senior a President
SSD/sjm
Enclosure
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~~• ~,F07'~67~0977' ~ / ~07~67~6,8~0
CITY OF ATLANTIC BEACH, FLORIDA
Summary of Bond Counsel/Disclosure Counsel Proposals
ATTACHMENT 8 C & D
OCTOBER 25, 2004
Disclosure
Bond Counsel Counsel Total
Livermore, Freeman, McWilliams $20,000 Incl. $20,000
Akerman, Senterfitt $20,000 Incl. $20,000
Bryant Miller & Olive $25,000 $10,000 $35,000
Greenberg Traurig $35,000 Incl. $35,000
Squire Sanders $30,000 $20,000 $50,000
+~.
a
ATTACHMENT 8 C & D
OCTOBER 25, 2004
A.G. Edwards
JP Morgan
Raymond James
CITY OF ATLANTIC BEACH, FLORIDA
Summary of Underwriter Proposals
Mgmt Fee ATD Ex~ Total
-0- $3.50 $.37 $3.87
-0- $3.23 $.69 $3.92
-0- $3.49 $.54 $4.03
PV Savings
$1,143,591
(5.81 %)
$831,000
(4.46%)
to
$1.05M
(5.62%)
$766,000
(4.12%)
t0
$1,052,000
(5.56%)
$876,931
(4.92%)
$798,000
(4.3%)
$1,150,958
(5.84%)
$782,000
(3.97%)
$780,000
(4.19%)
$597,000 -
714,000
$1,033,000
(5.55%)
$868,380
(4.66%)
RBC Dain Rauscher -0- $4.34 $.20 $4.54
(Hough)
SunTrust -0- $4.15 $.50 $4.65
First Southwest -0- $4.17 $.49 $4.66
Bank of America -0- $4.38 $.42 $4.80
UBS PaineWebber -0- $4.53 $.66 $5.19
Loop Capital -0- $4.50 $1.77 $6.27
Jackson Securities $.50 $4.54 $1.44 $6.48
~""
ATTACHMENT 8 C & D
OCTOBER 25, 2004
7. Provide a copy of the written contract which you propose to be executed by the
City and your firm.
Response to Item 7.
City of Atlantic Beach, Florida
c/ o Mr. Nelson Van Liere, Director of Finance
800 Seminole Road
Atlantic Beach, Florida 32233-5445 D~~~
Re: Bond Counsel Contract
Dear Mr. Van Liere:
Our firm is very pleased to have been selected to serve the City of Atlantic
!""' Beach, Florida (the "City"), as bond counsel in connection with the proposed refunding
of the City's outstanding Utility System Revenue Bonds, Series 1996. We look forward
to working with you, the City Attorney and other City staff. The following constitutes
our proposed agreement to serve as bond counsel to the City.
We propose that our services as bond counsel include the following:
1. Preparation of all ordinances, resolutions and other basic agreements and
documents which underly the proposed financing, including advice regarding escrow
structuring for the refunding.
2. If the bonds are validated, preparation of validation pleadings, research with
~ respect to the pertinent legal issues, advice and consultation with respect to the
validation hearing and participation in the validation hearing at the trial court level to
the extent requested by the City Attorney.
3. Services in connection with the sale of the bonds, including preparation of
the resolution authorizing the sale of the bonds; preparation of a preliminary official
statement, the notice of sale and bid forms (if the bonds are sold at public sale); review
~" of the bond purchase contract (if the bonds are sold at negotiated sale to an
investment banker); and examination of bond proofs, if printed bonds are utilized.
4. Preparation of the final official statement and all necessary closing
documents used in connection with the delivery of the bonds.
~"" 5. Issuance of our opinion with respect to the validity of the bonds and
exemption of interest thereon from federal income taxation, including review and
analysis of all information necessary in order to deliver such an opinion.
6. Attendance at the bond closing and, as necessary, planning, document
drafting and negotiating sessions.
7. Additional services requested by City staff.
~, 1646-Atlantic-Beach-RFP-Body 9
~,"'
ATTACHMENT 8 C & D
OCTOBER 25, 2004
~ We propose that our fee as bond counsel (excluding out-of-pocket expenses) be
$20,000.00. Payment of the fee is contingent upon the successful closing of the bond
issue. In the event that the bond issue does not close, we would expect reimbursement
of our out-of-pocket expenses only. The quoted fee does not include any appellate
~" work before the Florida Supreme Court, since the need rarely arises. A separate fee
for such service would be negotiated, if necessary.
~'"' This agreement, if accepted by the City, may be terminated by the City or this
firm upon 30 days written notice by the applicable party.
±"' If this agreement is acceptable to the City, please have it executed and a copy
returned to us in the space below.
~+ This agreement may be executed in several counterparts, and each counterpart
shall for all purposes be deemed an original; and all such counterparts shall
constitute one and the same instrument.
Yours very truly,
John L. McWilliams, III
JLMcW,III/vlj
Accepted October _, 2004, by the City.
Mayor
DRAFT
~ 1646-Atlantic-Beach-RFP-Body 1 ~
~//i/DLI~'~ G~' e ~i'1.~~-C1~~~
Memorandum
ATTACHMENT 8 C & D
OCTOBER 25, 2004
Date: October 18, 2004
To: Mr. Nelson Van Liere
Director of Finance
From: Ms. Sylvia Seaton-Dunlap
Dunlap & Associates, Inc.
Subject: Advance Refunding of a Pro Rata Portion of the Utilities System Bonds, Series 1996
Following the submission of underwriter proposals, we have updated the refunding analysis which shows
the following:
Par Amount of Issue $19,395,000
Maximum Annual Debt Service $1,455,177
Average Annual Debt Service $1,399,780
Average Life 12.7 years
True Interest Cost 4.012%
Total Savings $1,739,604
Net Present Value Savings $1,187,636
Net Present Value Savings as a % of refunded bonds 6.67%
Annual Debt Service Savings $71,388 to $85,479
As you will note on page 1 of the enclosed analysis, the bonds will pay for all of the costs of issuance
detailed on page 2 as well as underwriter's discount and the bond insurance cost.
SSD/sjm
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