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HomeMy WebLinkAboutNHA Advisors, LLC 2016-09-02; Amendment 2 2019-02-12COU No. [l,i7—llg' /f. CITY OF UKIAH AMENDMENT 2 — C #1617119 TO PROFESSIONAL SERVICES AGREEMENT BETWEEN NHA ADVISORS and THE CITY OF UKIAH This Amendment No. 2, entered on February 12, 2019, revises the Agreement for Professional services dated September 2, 2016 between the City of Ukiah and NHA Advisors, LLC, for professional consulting services related to Wastewater Municipal Advisory Consulting Services. This Amendment No. 2 adds scope to include municipal advisory services in relation to the 2018 Wastewater Revenue Refunding Bonds, and an additional not -to -exceed amount of $135,000, for a total revised contract amount of $154,500, as per Attachment 1. Except as expressly amended by this Agreement, all other terms and conditions of the agreement remain unchanged and in full force and effect. TN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS AMENDMENT ON THE EFFECTIVE DATE: NHA ADVISOR9�LL > BY: ( PRINT NAME: n C CITY OF UKIAH BY: SAS OMO, CITY MANAGER DATE: L--- 1 Z r l DATE: ' i `fi - / 5 ATTEST rf / BY: ADATE: STINE LAWLER, CITY CLERK ATTACHMENT 1 - Amendment 2 - Contract 1617119 NHA1ADVISORS 4040 Civic Center Drive. Suite 200 Office: 415'85 San Rafael CA 94903 www NHAectviaorc.c:om January 31, 2019 Dan Buffalo Finance Director City of Ukiah 300 Seminary Avenue Ukiah, CA 95482 RE: City of Ukiah 2018 Wastewater Revenue Refunding Bonds — NHA Advisors, LLC Regulatory Disclosure Letter Dear Dan, As I have previously indicated to you, we are required to send this Regulatory Disclosure Letter to you per Municipal Securities Rulemaking Board rules. This letter specifies the terms and details (including scope of services and proposed compensation) of the work that NHA Advisors, LLC, located at 4040 Civic Center Drive, Suite 200, San Rafael, CA 94903 will perform for the City of Ukiah (the "City"), located at 300 Seminary Avenue, Ukiah, CA 95482 relating to the above referenced project (the "Project"). Additionally, this letter provides certain duties and disclosures that we must present to all clients when working on a municipal bond transaction. Scope of Municipal Advisory Activities to be Performed A detailed Scope of Services can be found in Exhibit A. Independent Registered Municipal Advisor ("IRMA") If acting in the capacity of an Independent Registered Municipal Advisor ("IRMA") with regard to the IRMA exemption of the SEC Rule, NHA Advisors, LLC will review all third -party recommendations submitted to NHA Advisors, LLC in writing by the City. Term of Project Assignment The commencement date for this Project assignment for NHA Advisors, LLC is November 1, 2017 and the end date is July 31, 2018 or upon Project completion. Any extensions must be mutually agreed upon by all parties in writing. Termination of NHA Advisors, LLC Role on Project The City may terminate NHA Advisors, LLC role on the Project at any time and without cause upon written notification to NHA Advisors, LLC. In the event of termination, NHA Advisors, LLC shall be entitled to compensation for services performed to the effective date of termination. The City, however, may condition payment of such compensation upon NHA Advisors, LLC delivering to the City any or all documents, photographs, computer software, Strategy. Innovation. Solutions. CITY OF UKIAH 2018 WASTEWATER REVENUE REFUNDING BONDS — NHA ADVISORS, LLC REGULATORY DISCLOSURE LETTER JANUARY 31, 2019 video and audio tapes, and other materials provided to NHA Advisors, LLC or prepared by or for NHA Advisors, LLC or the City in connection with NHA Advisors, LLC work on this Project. NHA Advisors, LLC may terminate upon 45 days' written notice to the City and shall include in such notice the reasons for termination. Compensation and Out -of -Pocket Expenses A detailed proposal for compensation and expenses can be found in Exhibit A. Fiduciary Duty NHA Advisors, LLC is registered as a Municipal Advisor with the SEC and Municipal Securities Rulemaking Board ("MSRB"). As such, NHA Advisors, LLC has a Fiduciary duty to City and must provide both a Duty of Care and a Duty of Loyalty that entails the following. Duty of Care: a) exercise due care in performing its municipal advisory activities; b) possess the degree of knowledge and expertise needed to provide City with informed advice; c) make a reasonable inquiry as to the facts that are relevant to City's determination as to whether to proceed with a course of action or that form the basis for any advice provided to City; and d) undertake a reasonable investigation to determine that NHA Advisors, LLC is not forming any recommendation on materially inaccurate or incomplete information; NHA Advisors, LLC must have a reasonable basis for: i. any advice provided to or on behalf of City; ii. any representations made in a certificate that it signs that will be reasonably foreseeably relied upon by City, any other party involved in the municipal securities transaction or municipal financial product, or investors in City securities; and iii. any information provided to City or other parties involved in the municipal securities transaction in connection with the preparation of an official statement. Duty of Loyalty: NHA Advisors, LLC must deal honestly and with the utmost good faith with City and act in City's best interests without regard to the financial or other interests of NHA Advisors, LLC. NHA Advisors, LLC will eliminate or provide full and fair disclosure (included herein) to Issuer about each material conflict of interest (as applicable). NHA Advisors, LLC will not engage in municipal advisory activities with City as a municipal entity, if it cannot manage or mitigate its conflicts in a manner that will permit it to act in City's best interests. Conflicts of Interest and Other Matters Requiring Disclosures • As of the commencement date of NHA Advisors, LLC role on the Project, there are no actual or potential conflicts of interest that NHA Advisors, LLC is aware of that might impair its ability to render unbiased and competent advice or to fulfill its fiduciary duty. If NHA Advisors, LLC becomes aware of any potential conflict of interest that arise after this disclosure, NHA Advisors, LLC will disclose the detailed information in writing to City in a timely manner. NHA ADVISORS PAGE 2 CITY OF UKIAH 2018 WASTEWATER REVENUE REFUNDING BONDS — NHA ADVISORS, LLC REGULATORY DISCLOSURE LETTER JANUARY 31, 2019 • The fee paid to NHA Advisors, LLC increases the cost of investment to City. The increased cost occurs from compensating NHA Advisors, LLC for municipal advisory services provided. • NHA Advisors, LLC does not act as principal in any of the transaction(s) related to its role / work on this Project. • During the term of the municipal advisory relationship, this disclosure will be promptly amended or supplemented to reflect any material changes in or additions to the terms or information within this disclosure and the revised writing will be promptly delivered to City. • NHA Advisors, LLC does not have any affiliate that provides any advice, service, or product to or on behalf of the client that is directly or indirectly related to the municipal advisory activities to be performed by NHA Advisors, LLC; • NHA Advisors, LLC has not made any payments directly or indirectly to obtain or retain the City's municipal advisory business; • NHA Advisors, LLC has not received any payments from third parties to enlist NHA Advisors, LLC's recommendation to City of its services, any municipal securities transaction or any municipal finance product; • NHA Advisors, LLC has not engaged in any fee -splitting arrangements involving NHA Advisors, LLC and any provider of investments or services to City; • NHA Advisors, LLC has a conflict of interest from compensation for municipal advisory activities to be performed, that is contingent on the size or closing of any transactions as to which NHA Advisors, LLC is providing advice; • NHA Advisors, LLC does not have any other engagements or relationships that might impair NHA Advisors, LLC ability either to render unbiased and competent advice to or on behalf of the City or to fulfill its fiduciary duty to the City, as applicable; and • NHA Advisors, LLC does not have any legal or disciplinary event that is material to City's evaluation of the municipal advisory or the integrity of its management or advisory personnel. Pursuant to Municipal Securities Rulemaking Board Rule G-10, on Investor and Municipal Advisory Client Education and Protection, Municipal Advisors are required to provide certain written information to their municipal entity and obligated person clients which include the following: • NHA Advisors, LLC is currently registered as a Municipal Advisor with the U.S. Securities and Exchange Commission and the Municipal Securities Rulemaking Board. • Within the Municipal Securities Rulemaking Board ("MSRB") website at www.msrb.org, City may obtain the Municipal Advisory client brochure that is posted on the MSRB website. The brochure describes the protections that may be provided by the MSRB Rules along with how to file a complaint with financial regulatory authorities. Legal Events and Disciplinary History NHA Advisors, LLC does not have any legal events and disciplinary history on its Form MA and Form MA - 1, which includes information about any criminal actions, regulatory actions, investigations, terminations, judgments, liens, civil judicial actions, customer complaints, arbitrations and civil litigation. City may electronically access NHA Advisors, LLC's most recent Form MA and each most recent Form MA -1's filed with the Commission at the following website: www.sec.gov/edgar/searchedgar/companysearch.html. NHA ADVISORS PAGE 3 CITY OF UKIAH 2018 WASTEWATER REVENUE REFUNDING BONDS — NHA ADVISORS, LLC REGULATORY DISCLOSURE LETTER JANUARY 31, 2019 There have been no material changes to a legal or disciplinary event disclosure on any Form MA or Form MA -I filed with the SEC. Recommendations If NHA Advisors, LLC makes a recommendation of a municipal securities transaction or municipal financial product or if the review of a recommendation of another party is requested in writing by City and is within the scope of the engagement, NHA Advisors, LLC will determine, based on the information obtained through reasonable diligence of NHA Advisors, LLC whether a municipal securities transaction or municipal financial product is suitable for City. In addition, NHA Advisors, LLC will inform City of: • the evaluation of the material risks, potential benefits, structure, and other characteristics of the recommendation; • the basis upon which NHA Advisors, LLC reasonably believes that the recommended municipal securities transaction or municipal financial product is, or is not, suitable for City; and • whether NHA Advisors, LLC has investigated or considered other reasonably feasible alternatives to the recommendation that might also or alternatively serve the City objectives. If City elects a course of action that is independent of or contrary to the advice provided by NHA Advisors, LLC, NHA Advisors, LLC is not required on that basis to terminate its work on the Project with City. Record Retention Effective July 1, 2014, pursuant to the Securities and Exchange Commission (SEC) record retention regulations, NHA Advisors, LLC is required to maintain in writing, all communication and created documents between NHA Advisors, LLC and City for five (5) years. If there are any questions regarding the information we have provided in this Regulatory Disclosure Letter, please do not hesitate to contact NHA Advisors, LLC. Sincerely, Eric Scriven, Principal NHA Advisors, LLC NHA ADVISORS PAGE 4 CITY OF UKIAH 2018 WASTEWATER REVENUE REFUNDING BONDS — NHA ADVISORS, LLC REGULATORY DISCLOSURE LETTER JANUARY 31, 2019 EXHIBIT A PROPOSED SCOPE OF SERVICES AND COMPENSATION SCHEDULE Objective. City seeks to refinance the Association of Bay Area Governments 2006 Water and Wastewater Revenue Bonds, Series A (the "2006 Bonds" or "Prior Bonds"). If refinancing is feasible, NHA Advisors, LLC ("Consultant") shall facilitate execution of refinancing transaction. Independent Registered Municipal Advisor. If acting in the capacity of an Independent Registered Municipal Advisor ("IRMA") with regard to the IRMA exemption of the SEC Rule, Consultant will review all third -party recommendations submitted to Consultant in writing by the City. Scope of Services. Consultant will serve in the capacity of Municipal Advisor to the City with respect to the potential refinancing of the Prior Bonds. As noted, the objective of the City, for which Consultant is being retained, is to provide advice, options, and analysis with respect to most opportune method of refinancing Prior Bonds. Consultant shall also be retained to coordinate and effectuate the actual implementation of the selected financing plan if Project is deemed advisable, in City's sole discretion. Consultant's work will include, but not be limited to, the following tasks and/or elements: Scope of Service — Task 1— Bond Issuance / Loan Placement Tasks • Provide and manage Project Management related documentation including a} a detailed "master schedule" of tasks encompassing bond structuring, documentation, approval, pricing, closing and post -closing phases, b) Distribution Listing of Finance Team Participants, c) Due Diligence Data Requirements [as required), and d) Plan of Finance / Objective Statement [as required] • If required, work with the City staff to solicit and select financing partner/funding source (e.g. bank, underwriter etc.) • If required, work with the City staff to solicit and select trustee service provider and negotiate of preferred terms and pricing • As required, recommend options with respect to other consultants that may be required as part of financing process • Analyze the rating criteria and its application to the financing's underlying security characteristics to gauge credit quality • Attend all organizational, document review, and special meetings/conference calls related to the financing • Evaluate, advise, and consult with the City, underwriter and bond counsel regarding financial and non-financial bond covenants of the financing • Work with City and bond counsel to develop the necessary financing documents • Prepare and lead efforts in furnishing materials and data to rating agencies, bond insurers, and letter of credit providers If private placement to financial institution or other investor, work with placement agent to prepare appropriate credit package for inclusion within bidding documents • Work with disclosure counsel and other financing team participants to prepare the preliminary official statement (POS or "disclosure document"), as well as review all appropriate financing documents If private placement, work with placement agent to develop bid documentation NHA ADVISORS PAGE 5 CITY OF UKIAH 2018 WASTEWATER REVENUE REFUNDING BONDS - NHA ADVISORS, LLC REGULATORY DISCLOSURE LETTER JANUARY 31, 2019 • Lead team discussions in conjunction with bond and disclosure counsel on form, content, and sufficiency of information in the POS and continuing disclosure agreement • Work with selected financing partner/source to determine optimal bond structure, including serial / term bonds, premium / discount bonds, and redemption provisions • On behalf of City, collect all costs of transaction and, as appropriate and requested by City, provide recommendations as to each respective financing participant's scope of service and fee requests • Pricing of Bond Issue o Work with selected underwriter to recommend timing of bond pricing o Monitor municipal markets, review proposed interest rates, and advise the City during negotiations with underwriter o Provide independent numerical analysis of proposed bond issue pricing proposals o Provide detailed schedule of actions and timing during critical bond marketing and sale (pricing) time -frame If private placement, assist placement agent with investor bidding process and lead final negotiations as required • Recommendations to the City Prepare an oral and/or written recommendation to the City for bond issue as requested • Closing the Financing Work with bond counsel to prepare a closing memorandum to outline the role of each party and to direct each party's actions at closing Prepare Flow of Funds and Closing Memorandum • Special Meetings of the City Attend all City governing board meetings and any special meetings with staff, bond counsel, disclosure counsel, credit enhancement firms, and rating agencies as the City deems necessary • Post Issuance Assistance Provide follow-up to financing team participants on any issues that need attention Conduct post issuance reviews as requested by the City Provide written report to City summarizing salient financial and credit features and financing results (e.g. "Post -Closing Report") This proposed scope of services does not necessarily include all tasks that Consultant will undertake during this Project. As all similar projects are complex and unique, and each City has different processes and needs, Consultant commits to "doing what it takes" to facilitate that all parties collectively achieve a successful result for the City. Proposed Compensation Schedule. For Task 1 Scope of Services, and based upon our understanding of the transaction at this time, we propose a fee of $135,000. The proposed fee is based upon the complexity of the transaction, the method of sale, the credit profile of the deal, actual Consultant time projected to be expended upon this Task 1 services, and other factors. In the event that no financing is completed, and bonds are not issued, Consultant will work with the City to determine reasonable compensation for the time submitted by the Consultant's involved professionals. If the transaction is completed or our involvement differs significantly from our expectations, we would expect to be paid a fee that we mutually agree would reflect reasonable compensation for municipal advisory services rendered considering the risk undertaken and the level of expertise required to undertake such municipal advisory service. NHA ADVISORS PAGE 6 CITY OF UKIAH 2018 WASTEWATER REVENUE REFUNDING BONDS - NHA ADVISORS, LLC REGULATORY DISCLOSURE LETTER JANUARY 31, 2019 Out -of -Pocket - All expenses will be billed directly at cost to the City. Expenses will be limited to typical expenses necessary for completion of the services required. For example, typical charges will include copying, mailing, shipping, and data purchase (if not provided by others). California travel will not be expensed for this Scope of Services. The maximum expense total will not exceed $2,000. No reimbursable expense shall be incurred without prior written approval of City. NHA ADVISORS PAGE 7