HomeMy WebLinkAboutPR 21965: CONTRACT WITH PFM FINANCIAL ADVISORS, LLC, TIRZ NO. 1 P.R.21965
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RESOLUTION NO.
A RESOLUTION AUTHORIZING THE EXECUTION OF A CONTRACT
WITH PFM FINANCIAL ADVISORS, LLC, OF HOUSTON, TEXAS,
WITH REGARD TO THE DOWNTOWN TAX INCREMENT
REINVESTMENT ZONE (TIRZ) NO. 1, IN AN AMOUNT NOT TO
EXCEED $15,000.00; FUNDING IS AVAILABLE IN ACCOUNT NO.
001-01-005-5470-00-10-00, PROJECT NO. MA7903
WHEREAS, pursuant to Chapter 311 of the Texas Tax Code, the City of Port
Arthur created a reinvestment zone known as the Downtown Tax Increment
Reinvestment Zone (TIRZ) No. 1 to promote development or redevelopment of the City's
Downtown area on November 9, 2012; and
WHEREAS, the Board of Directors of the Downtown TIRZ No. 1 has formulated
numerous plans and strategies for refurbishing and revitalizing the said downtown area
of Port Arthur; and
WHEREAS, based on its demonstrated competence and qualifications, PFM
Financial Advisors, LLC has been selected to develop and assist the Downtown TIRZ
No. 1 in implementing strategies to meet its financial planning, budget, and policy
development needs. A proposed contract is attached hereto in substantially the same
form as Exhibit "A"; and
WHEREAS, the Board of Directors of the Downtown TIRZ No. 1 has requested
that the City of Port Arthur temporarily fund the costs of the services be rendered by PFM
Financial Advisors, LLC in an amount not to exceed $15,000; and
WHEREAS, said funding for this agreement provided by the City will be
reimbursed by the Downtown TIRZ No. 1 from the incremental property tax increases
that is generated within the boundaries of the TIRZ in the upcoming fiscal year.
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NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF PORT ARTHUR:
Section 1. That the facts and opinions in the preamble are true and correct.
Section 2. That the City Council hereby authorizes the City Manager and the
Chairman of the Downtown TIRZ Board No. 1 to execute an agreement in substantially
the same form as Exhibit "A" with PFM Financial Advisors, LLC of Houston, Texas, in an
amount not to exceed $15,000.00 for professional financial services related to the
development of the Downtown TIRZ No. 1.
Section 3. That said funding for this agreement will be reimbursed by the
Downtown TIRZ No. 1 from the incremental property tax increases that is generated
within its boundaries within the upcoming fiscal year.
Section 4. That a copy of the caption of this Resolution be spread upon the
Minutes of the City Council.
READ, ADOPTED, AND APPROVED this the day of , A.D. 2021 at
a Regular Meeting of the City of Port Arthur, Texas by the following vote:
Ayes: Mayor:
Councilmembers:
Noes:
Mayor
Thurman "Bill" Bartie
P.R.21965
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ATTEST:
City Secretary
Sherri Bellard
APPROVED AS TO FORM: APPROVED FOR ADMINISTRATION:
Valecia Tizen Ronald Burton
City Attorney City Manager
APPROVED AS FOR AVAILABILITY
OF FUNDS:
Kandy Dan el
Interim Director of Finance
Exhibit "A"
PFM FINANCIAL ADVISORS LLC
AGREEMENT FOR FINANCIAL ADVISORY SERVICES
This agreement("Agreement"), made and entered into this 11th day of May, 2021,by
and between the Port Arthur(TX)Downtown Tax Increment Reinvestment Zone No. 1
("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 as it
pertains to the Downtown Tax Increment Zone No. 1; and
WHEREAS, PFM is capable of providing the necessary financial advisory services as it
pertains to the Downtown Tax Increment Zone No. 1.
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 as it pertains to the
Downtown Tax Increment Zone No. 1.. 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 15Ba1-2. If Client has designated PFM as
its independent registered municipal advisor ("IRMA") for purposes of SEC Rule 15Ba1-
1(d)(3)(vi)(the"IRMA exemption"),then services provided pursuant to such designation shall be
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the services described in Exhibit A hereto, subject to any agreed upon limitations. Verification of
independence (as is required under the IRMA exemption) shall be the responsibility of such third
party seeking to rely on such IRMA exemption. PFM shall have the right to review and approve
in advance any representation of PFM's role as IRMA to Client.
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 prior to or 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. All fees shall be due to PFM within thirty(30) days
of the date of invoice.
1. Reimbursable Expenses
In addition to fees for services, 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 May 14, 2021 until May 14,2022 (the"Initial
Term") and shall automatically renew for an additional one(1)year period(each a"Renewal
Term"and together with the Initial Term,the"Term", subject to the approval of the board 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 or transfer 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 PFM retains the right to enter into a sale,merger, acquisition, internal reorganization, or
similar transaction involving PFM's business without any such consent.
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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.PFM may rely on the Data in connection with its provision of the services under
this Agreement and the provider thereof shall remain solely responsible for the adequacy,accuracy
and completeness of such Data.
VIII. NOTICES
All notices and other communication required under this Agreement shall be in writing
and shall be sent by certified mail, return receipt requested, or by nationally recognized courier,
with written verification of receipt.Notices shall be sent to the parties at the following addresses,
or to such other address as a party may furnish to the other party:
Port Arthur(TX) Downtown Tax Increment Reinvestment Zone No. 1
444 4th Street
Port Arthur,TX 77640
Attention: City Manager and City Attorney
PFM FINANCIAL ADVISORS LLC
1735 Market Street
43rd Floor
Philadelphia,PA 19103
Attention: Chief Executive Officer
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
l. Assignment of Named Individuals
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
advisory team members set forth below.
• Dennis Waley
• Karlos Allen
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2. Changes in Advisory Team Requested by the Client
The Client has the right to request, for any reason,that PFM 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 its willful misconduct, bad faith, gross negligence or
reckless disregard of its obligations or duties, PFM shall have no liability to any party under this
Agreement.
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.
XIV. APPLICABLE LAW
This Agreement shall be construed, enforced, and administered according to the laws of
the State of Texas. 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.
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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.
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IN WITNESS WHEREOF, Client and PFM have executed this Agreement as of the day
and year herein above written.
PORT ARTHUR(TX)DOWNTOWN TAX INCREMENT
REINVESTMENT ZONE NO. 1
By:
Name:
Title:
PFM FINANCIAL ADVISORS LLC
By: ,.d'
Name: Dennis Waley
Title: Managing Director
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EXHIBIT A
SCOPE OF SERVICES
1. Services related to the Financial Planning and Policy Development as it pertains
to the Downtown Tax Increment Zone No. 1. 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.
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• 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.
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EXHIBIT B
COMPENSATION FOR SERVICES
1. Fixed Rate Transaction Fees (Competitive and Negotiated)
The compensation schedule for competitive and negotiated sales of long-term financings will be
billed at closing as follows:
Bond Size($000) Issuance Fee per$1,000*
1 —5,000 $15.00
5,001 - 10,000 $7.50
10,001 —30,000 $2.50
>30,001 $1.25
* Based upon Bond Proceeds and is subject to a minimum fee of$50,000 per transaction
and a not to exceed amount of$250,000 per transaction.
2. Other Transaction Fees
Bank Loan(<$30MM Bond Proceeds) $50,000
Bank Loan(> $30MM Bond Proceeds, or
involving a forward delivery agreement) Per Transaction Fee Schedule
above.
3. Hourly Project Fees (Non-Transaction Related)
PFM will not charge for general advice between financings. In the event the Client requests that
PFM perform significant special projects (capital planning, creation of new financing programs
like the installment sale concept, etc.), fees will be negotiated in advance of the project generally
based upon the following hourly rates for the indicated levels of experience or their equivalents
will apply. Additionally, in the event a financing is started,but cancelled at the Client's request,
accrued time will be billed as follows:
Experience Level Hourly Rate
Managing Director $400.00
Director $350.00
Senior Managing Consultant $300.00
Senior Analyst $250.00
Analyst $200.00
Administrative/Associates $150.00
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