HomeMy WebLinkAboutReso - CC - 083-2019RESOLUTION NO. 83-2019
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME AUTHORIZING
THE CITY MANAGER TO EXECUTE A CONTRACT WITH PFM FINANCIAL ADVISORS,
LLC. (PFMFA) FOR FINANCIAL ADVISORY SERVICES
WHEREAS, the City Council has previously emphasized the desire for cost -control
measures and the recovery of more costs for certain City services; and
WHEREAS, in 2014, City staff issued a Request for Proposals (RFP) for the services of
a Financial Advisor; and
WHEREAS, Public Financial Management (PFM) was selected as the best qualified to
provide the needed services as the City's Financial Advisor; and
WHEREAS, due to revisions in the regulatory framework promulgated by the Municipal
Securities Rulemaking Board, the PFM Group transitioned its financial advisory services to a
new operating company, PFM Financial Advisors, LLC (PFMFA); and
WHEREAS, due to the very fine financial consulting services provided under the current
contract, staff recommends a continuance of a contractual relationship with PFMFA as the City's
Financial Advisor.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BURLINGAME
RESOLVES AND ORDERS AS FOLLOWS:
The City Manager is authorized to execute the agreement with PFMFA substantially in the form
attached as an Exhibit to this Resolution.
Donna Colson, Mayor
I, Meaghan Hassel -Shearer, City Clerk of the City of Burlingame, certify that the
foregoing Resolution was introduced at a regular meeting of the Burlingame City Council held
on the 1st day of July, 2019, and was adopted thereafter by the following vote:
AYES: Councilmembers: BEACH, BROWNRIGG, COLSON, KEIGHRAN, ORTIZ
NOES: Councilmembers: NONE
ABSENT: Councilmembers: NONE
4V
M6ag a"_ assel-Shearer, City Clerk
PFM FINANCIAL ADVISORS LLC
AGREEMENT FOR FINANCIAL ADVISORY SERVICES
This agreement ("Agreement"), made and entered into this 1 st day of July, 2019, by and
between the City of Burlingame ("Client") and PFM Financial Advisors LLC (hereinafter called
"PFM"), sets forth the terms and conditions under which PFM shall provide services.
WHEREAS, Client desires to obtain the services of a financial advisor to develop and
assist in implementing Client's strategies to meet its current and long-term operations, financial
obligations, capital financing needs and render assistance in respect to debt transactions; and
WHEREAS, PFM is capable of providing the necessary financial advisory services.
NOW, THEREFORE, in consideration of the above mentioned premises and intending to
be legally bound hereby, Client and PFM agree as follows:
I. SCOPE OF SERVICES
PFM shall provide, upon request of the Client, services related to financial planning,
budget and strategic advice and planning, policy development and services related to debt
issuance, as applicable and set forth in Exhibit A to this Agreement. Client acknowledges and
agrees that most tasks requested by Client will not require all services provided for in Exhibit A
and as such the specific scope of services for such task shall be limited to just those services
required to complete the task. Any material changes in or additions to the scope of services
described in Exhibit A shall be promptly reflected in a written supplement or amendment to this
Agreement. Services provided by PFM which are not specifically referenced in the scope of
services set forth in Exhibit A of this Agreement shall be completed as agreed in writing in
advance between the Client and PFM. Upon request of Client, PFM or an affiliate of PFM may
agree to additional services to be provided by PFM or an affiliate of PFM, by a separate
agreement between the Client and PFM or its respective affiliate.
II. WORK SCHEDULE
The services of PFM are to commence as soon as practicable after the execution of this
Agreement and a request by the Client for such service.
III. REGISTERED MUNICIPAL ADVISOR; REQUIRED DISCLOSURES
1. PFM is a registered municipal advisor with the Securities and Exchange
Commission (the "SEC") and the Municipal Securities Rulemaking Board (the "MSRB"),
pursuant to the Securities Exchange Act of 1934 Rule 1513al-2. If Client has designated PFM as
its independent registered municipal advisor ("IRMA") for purposes of SEC Rule 1513al -
I(d)(3)(vi) (the "IRMA exemption"), then services provided pursuant to such designation shall
be the services described in Exhibit A hereto, subject to any limitations provided therein. PFM
shall not be responsible for, or have any liability in connection with, verifying that PFM is
independent from any other party seeking to rely on the IRMA exemption (as such independent
status is required pursuant to the IRMA exemption, as interpreted from time to time by the SEC).
Client acknowledges and agrees that any reference to PFM, its personnel and its role as IRMA,
including in the written representation of Client required under SEC Rule 15Bal-I(d)(3)(vi)(B)
shall be subject to prior approval by PFM. Client further agrees not to represent that PFM is
Client's IRMA with respect to any aspect of a municipal securities issuance or municipal
financial product, outside of the scope of services without PFM's prior written consent.
2. MSRB Rules require that municipal advisors make written disclosures to their
clients of all material conflicts of interest, certain legal or disciplinary events and certain
regulatory requirements. Such disclosures are provided in PFM's Disclosure Statement
delivered to Client together with this Agreement.
IV. FINANCIAL ADVISORY COMPENSATION
For the services provided under this Agreement, PFM's professional fees shall be paid as
provided in Exhibit B to this Agreement and Client shall pay expenses and fees for other services
not set forth in Exhibit A as provided below.
Reimbursable Expenses
In addition to fees for services, and subject to prior approval by the City, PFM will be
reimbursed for necessary, reasonable, and documented out-of-pocket expenses incurred,
including travel, meals, lodging, telephone, mail, and other ordinary cost and any actual
extraordinary cost for graphics, printing, data processing and computer time which are incurred
by PFM. Upon request of Client, documentation of such expenses will be provided.
2. Other Services
Any services which are not included in the scope of services set forth in Exhibit A of this
Agreement will be subject to separate, mutually acceptable fee structures.
V. TERMS AND TERMINATION
This Agreement shall be effective from July 1, 2019 until June 30, 2022 (the "Initial
Term") and shall automatically renew for additional 1 year periods (each a "Renewal Term" and
together with the Initial Term, the "Term", unless terminated in writing by either party upon
thirty (30) days written notice to the other party.
Upon any such termination, PFM will be paid for all services performed and costs and
expenses incurred up to the termination date.
VI. ASSIGNMENT
PFM shall not assign any interest in this Agreement or subcontract any of the work
performed under the Agreement without the prior written consent of the Client; provided that
upon notice to Client, PFM may assign this Agreement or any interests hereunder to a municipal
advisor entity registered with the SEC that directly or indirectly controls, is controlled by, or is
under common control with, PFM.
Rev. 28J0.2018 -2-
VII. INFORMATION TO BE FURNISHED TO PFM
All information, data, reports, and records in the possession of the Client or any third
party necessary for carrying out any services to be performed under this Agreement ("Data")
shall be furnished to PFM and the Client shall, and shall cause its agent(s) to, cooperate with
PFM in its conduct of reasonable due diligence in performing the services, including with respect
to the facts that are necessary in its recommendation(s) to the Client in connection with a
municipal securities transaction or municipal financial product and/or relevant to the Client's
determination whether to proceed with a course of action. To the extent Client requests that
PFM provide advice with regard to any recommendation made by a third party, Client will
provide to PFM written direction to do so as well as any Data it has received from such third
party relating to its recommendation. Client acknowledges and agrees that while PFM is relying
on the Data in connection with its provision of the services under this Agreement, PFM makes
no representation with respect to and shall not be responsible for the accuracy, adequacy or
completeness of such Data.
VIII. NOTICES
All notices given under this Agreement shall be in writing, sent by registered United
States mail, with return receipt requested, addressed to the party for whom it is intended, at the
designated below. The parties designate the following as the respective places for giving notice,
to wit:
CITY OF BURLINGAME
501 Primrose Road
Burlingame, CA 94010
Attention: Carol Augustine, Finance Director
PFM FINANCIAL ADVISORS LLC
50 California Street, Suite 2300
San Francisco, CA 94111
Attention: Robert Gamble, Managing Director
IX. TITLE TRANSFER
All materials, except functioning or dynamic financial models, prepared by PFM
pursuant exclusively to this Agreement shall be the property of the Client. Subject to the
exception described above, upon termination of this Agreement, at Client's reasonable request no
later than three (3) years after the termination of this Agreement PFM shall deliver to the Client
copies of any deliverables pertaining to this Agreement.
X. PFM'S REPRESENTATIVES
Assignment of Named Individuals
Rev. 28.10.2018 - 3 -
The professional employees of PFM set forth below will provide the services set forth in
this Agreement; provided that PFM may, from time to time, supplement or otherwise amend the
team members set forth below.
• Robert Gamble, Managing Director
• Sarah Hollenbeck, Managing Director
• Christine Choi, Director
• Nicholas Jones, Senior Managing Consultant
• Kevin Dong, Senior Analyst
• Alexander Laine, Analyst
2. Changes in Staff Requested by the Client
The Client has the right to request, for any reason, PFM to replace any member of the
advisory team. Should the Client make such a request, PFM shall promptly suggest a substitute
for approval by the Client.
XI. INSURANCE
PFM shall maintain insurance coverage with policy limits not less than as stated in
Exhibit C.
XII. LIMITATION OF LIABILITY
Except to the extent caused by willful misconduct, bad faith, gross negligence or reckless
disregard of obligations or duties under this Agreement on the part of PFM or any of its
associated persons, neither PFM nor any of its associated persons shall have liability to any
person for (i) any act or omission in connection with performance of its services hereunder; (ii)
any error of judgment or mistake of law; (iii) any loss arising out of any issuance of municipal
securities, any municipal financial product or any other financial product, or (iv) any financial or
other damages resulting from Client's election to act, or not to act, contrary to or, absent
negligence on the part of PFM or any of its associated persons, upon any advice or
recommendation provided by PFM to Client.
XIII. INDEPENDENT CONTRACTOR; NO THIRD -PARTY BENEFICIARY
PFM, its employees, officers and representatives at all times shall be independent
contractors and shall not be deemed to be employees, agents, partners, servants and/or joint
venturers of Client by virtue of this Agreement or any actions or services rendered under this
Agreement. Nothing in this Agreement is intended or shall be construed to give any person,
other than the Parties hereto, their successors and permitted assigns, any legal or equitable. rights,
remedy or claim under or in respect of this Agreement or any provisions contained herein. In no
event will PFM be liable for any act or omission of any third party or for any circumstances
beyond PFM's reasonable control including, but not limited to, fire, flood, or other natural
disaster, war, riot, strike, act of terrorism, act of civil or military authority, software and/or
equipment failure, computer virus, or failure or interruption of electrical, telecommunications or
other utility services.
Rev. 28.10.2018 - 4 -
XIV. APPLICABLE LAW
This Agreement shall be construed, enforced, and administered according to the laws of
the State of California. PFM and the Client agree that, should a disagreement arise as to the
terms or enforcement of any provision of this Agreement, each party will in good faith attempt to
resolve said disagreement prior to pursuing other action.
XV. ENTIRE AGREEMENT; SEVERABILITY
This Agreement represents the entire agreement between Client and PFM and may not be
amended or modified except in writing signed by both parties. For the sake of clarity, any
separate agreement between Client and an affiliate of PFM shall not in any way be deemed an
amendment or modification of this Agreement. The invalidity in whole or in part of any
provision of this Agreement shall not void or affect the validity of any other provision.
XVI. EXECUTION; COUNTERPARTS
Each party to this Agreement represents and warrants that the person or persons signing
this Agreement on behalf of such party is authorized and empowered to sign and deliver this
Agreement for such party. This Agreement may be signed in any number of counterparts, each
of which shall be an original and all of which when taken together shall constitute one and the
same document.
IN WITNESS THEREOF, the Client and PFM have executed this Agreement as of the
day and year herein above written.
CITY OF BURLINGAME
By:
Name, Title
Date:
PFM FINANCIAL ADVISORS LLC
By:
Name, Title
Date:
Rev. 28.10.2018 - 5 -
EXHIBIT A
SCOPE OF SERVICES
Services related to the Financial Planning and Policy Development upon request
of the Client:
• Assist the Client in the formulation of Financial and Debt Policies and
Administrative Procedures.
• Review current debt structure, identifying strengths and weaknesses of structure
so that future debt issues can be designed to maximize ability to finance future
capital needs. This will include, but not be limited to, reviewing existing debt for
the possibility of refunding that debt to provide the Client with savings.
• Analyze future debt capacity to determine the Client's ability to raise future debt
capital.
• Assist the Client in the development of the Client's Capital Improvement Program
by identifying sources of capital funding.
• Assist the Client with the development of the Client's financial planning efforts
and process by assessing capital needs, identifying potential revenue sources,
analyze financing alternatives such as pay-as-you-go, lease/purchasing, short-term
vs. long-term financings, assessments, user fees, impact fees, developer
contributions, public/private projects, and grants and provide analysis of each
alternative as required as to the budgetary and financial impact.
Review the reports of accountants, independent engineers and other project
feasibility consultants to ensure that such studies adequately address technical,
economic, and financial risk factors affecting the marketability of any proposed
revenue debt issues; provide bond market assumptions necessary for financial
projections included in these studies; attend all relevant working sessions
regarding the preparations, review and completion of such independent studies;
and provide written comments and recommendations regarding assumptions,
analytic methods, and conclusions contained therein.
Develop, manage and maintain computer models for long-term capital planning
which provide for inputs regarding levels of ad valorem and non -ad valorem
taxation, growth rates by operating revenue and expenditure item, timing,
magnitude and cost of debt issuance, and project operating and capital balances,
selected operating and debt ratios and other financial performance measures as
may be determined by the Client.
• Conduct strategic modeling and planning and related consulting.
• Attend meetings with Client's staff, consultants and other professionals and the
Client.
Rev. 28.10.2018 - 6 -
Undertake financial planning and policy development assignments made by the
Client regarding financings, and financial policy including budget, tax, cash
management issues and related fiscal policy and programs.
Assist the Client in preparing financial presentations for public hearings and/ or
referendums.
Provide special financial services as requested by the Client.
2. Services Related to Debt Transactions (Includes short term financings, notes,
loans, letters of credit, line of credit and bonds); provided that if the transaction is competitive,
the services of the financial advisor will be modified in advance in writing to reflect that process.
Upon the request of the Client:
• Assist in assembling the financing team.
• Develop RFPs for services and help evaluate proposals as required.
• Analyze financial and economic factors to determine if the issuance of bonds is
appropriate.
• Develop a financing plan in concert with Client's staff which would include
recommendations as to the timing and number of series of bonds to be issued.
• Assist the Client by recommending the best method of sale, either as a negotiated
sale, private placement or a public sale. In a public sale, make recommendation
as to the determination of the best bid. In the event of a negotiated sale, assist in
the solicitation, review and evaluation of any investment banking proposals, and
provide advice and information necessary to aid in such selection.
• Advise as to the various financing alternatives available to the Client.
• Develop alternatives related to debt transaction including evaluation of revenues
available, maturity schedule and cash flow requirements.
• Evaluate benefits of bond insurance and/or security insurance for debt reserve
fund.
• If appropriate, develop credit rating presentation and coordinate with the Client
the overall presentation to rating agencies.
• Review underwriter's proposals and submit a written analysis of same to the
Client.
• Assist the Client in the procurement of other services relating to debt issuance
such as printing, paying agent, registrar, etc.
Rev. 28.10.2018 - 7 -
• Identify key bond covenant features and advise as to the financial consequences
of provisions to be included in bond indentures, resolutions or other governing
documents regarding security, creation of reserve funds, flow of funds,
redemption provisions, additional parity debt tests, etc.; review and comment on
successive drafts of bond governing documents.
• Review the requirements and submit analysis to bond insurers, rating agencies
and other professionals as they pertain to the Client's obligation.
• Review the terms, conditions and structure of any proposed debt offering
undertaken by the Client and provide suggestions, modifications and
enhancements where appropriate and necessary to reflect the constraints or
current financial policy and fiscal capability.
• Assist in the preparation of documents, including preliminary and final official
statements, and coordinate with Client's staff and other advisors as respects the
furnishing of data for offering documents, it being specifically understood that
PFM is not responsible for the inclusion or omission of any material in published
offering documents.
• As applicable, advise the Client on the condition of the bond market at the time of
sale, including volume, timing considerations, competing offerings, and general
economic considerations.
• Assist and advise the Client in negotiations with investment banking groups
regarding fees, pricing of the bonds and final terms of any security offering, and
make recommendations regarding a proposed offering to obtain the most
favorable financial terms based on existing market conditions.
• Arrange for the closing of the transaction including, but not limited, to bond
printing, signing and final delivery of the bonds.
• PFM will provide as needed non -transaction services related to matters such as
post -issuance disclosure and compliance, and monitoring of potential legislative
issues that may affect the City's financing alternatives.
Rev. 28.10.2018 - 8 -
EXHIBIT B
COMPENSATION FOR SERVICES
1. Fixed Rate Transaction Fees
For services in Exhibit A in connection with a debt issuance, PFM will be compensated a fixed
transaction fee as specified below, which would be contingent upon the successful closing of the
financing. Such transaction fees are to be paid from the proceeds of the financing and are
contingent upon the closing of the issuance. If there are material changes to the complexity of the
financing or other unanticipated circumstances, a different fee may be negotiated by mutual
written agreement between PFM and the District. Such fee will be paid at the time of bond
issuance from bond proceeds unless otherwise determined by mutual agreement of the two
parties.
We would also charge for out-of-pocket expenses and would propose capping these at $1,000 per
transaction.
2. Non -Transaction Fees
For services to be provided on an hourly basis, PFM proposes to charge based on the rates shown
in the table below:
Professional
Managing Director
$350
Director
$325
Senior Managing Consultant
I $300
Senior Analyst
$250
Analyst
$225
In addition to our fees, we would expect to be reimbursed for our out-of-pocket expenses,
including travel, mileage, parking, meals, postage and express mail delivery services, telephone,
photocopying, outside graphics fees, etc. Appropriate expense documentation and third party
receipts would be provided with each invoice.
Rev. 28.10.2018 - 9 -
FXNIRTT f
INSURANCE
PFM Financial Advisors LLC ("PFM") has a complete insurance program, including
property, casualty, comprehensive general liability, automobile liability and workers
compensation. PFM maintains professional liability and fidelity bond coverages which total $35
million and $10 million, respectively. PFM also carries a $10 million cyber liability policy.
Our Professional Liability policy is a "claims made" policy and our General Liability
policy claims would be made by occurrence.
Deductibles/SIR
Automobile $250 comprehensive & $500 collision
Cyber Liability $50,000
General Liability $0
Professional Liability (E&O) $1,000,000
Financial Institution Bond $75,000
Insurance Company & AM Best Rating
Professional Liability(E&O)--------------------------------------- Endurance American Specialty Insurance; (A+; XV)
XL Specialty Insurance Company; (A; XV)
Continental Casualty Company; (A; XV)
Starr Indemnity & Liability Company; (A; XIV)
Financial Institution Bond ------------------------------------------- Federal Insurance Company; (A++; XV)
Cyber Liability ------------------------------------------------
General Liability ---------------------------------------------
Automobile Liability ---------------------------------------
Excess /Umbrella Liability ------------------------------
Workers Compensation& Employers Liability
- Indian Harbor Insurance Company (A; XV)
--Great Northern Insurance Company; (A++; XV)
- Federal Insurance Company; (A++; XV)
__Federal Insurance Company; (A++; XV)
.-Great Northern Insurance Company; (A++; XV)
Rev. 28.10.2018 - 10 -