HomeMy WebLinkAboutContract_PFM_Kittitas_County_executedPFM FINANCIAL ADVISORS LLC
AGREEMENT FOR FINANCIAL ADVISORY SERVICES
This agreement ("Agreement"),made and entered into this Ò day of yandbetweenKittitasCounty("Client")and PFM Financial Advisors LLC (hereinaftbrcalled
"PFM")sets forth the terms and conditions under which PFM shall provide services.
WHEREAS,Client is desirous of obtaining the services of a Snancial 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 Snancial advisory services.
NOW,THEREFORE,in consideration of the above mentioned premises and intending to
be legally bound hereby,Client and PFM agree as follows:
L SCOPE OF SERVICES
PFM shall provide,upon request of the Client,services related 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 RulemakingBoard (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 the services described in
Exhibit A hereto,subject to any limitations described thereon.PFM shall not be responsible for,
and shall be held harmless from and against any party in connection with,verifying that PFM is
independent from any other party seeking to rely on the IRMA exemption (as such independent
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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 15Ba1-1(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 Rule G-42 requires that municipal advisors make written disclosures to its
Clients of all material conflicts of interest and certain legal or disciplinary events.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.
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.The Client will be responsible for expenses of third-
parties providing separate services,including bond rating agencies,bond counsel,of6cial statement
distribution,and fiscal agent or refunding agents.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.
IV.TERMS AND TERMINATION
This Agreement shall be effective upon execution until December 31,2017 (the "Initial
Term")and may renew for additional 2 year periods (each a "Renewal Term"and together with the
Initial Term,the "Term").This Agreement shall remain in effect unless canceled in writing by either
party upon thirty (30)days written notice to the other party.
V.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 hereunderto a municipal advisor
entity registered with the SEC that directly or indirectly controls,is controlled by,or is under
common control with,PFM.
VI.INFORMATIONTO BE FURNISHED TO PFM
All information,data,reports,and records ("Data")in the possession of the Client or any
third party necessary for carrying out any services to be performed under this Agreement 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 a Client's determination whether to
proceed with a course of action.To the extent Client requests that PFM provide advice with regard
to any recommendationmade 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 or completeness of such Data.
VII.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:
KITTITAS COUNTY
205 West 5*Avenue,Suite 102
Ellensburg,WA 98926
Attention:Brett Wachsmith,County Treasurer
PFM FINANCIAL ADVISORS LLC
1200 Fifth Avenue,Suite 1220
Seatde,WA 98101
Attention:Susan Musselman,Director
VIII.TITLE TRANSFER
All materials,except functioning or dynamic financial models,preparedby 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 and all material
pertaining to this Agreement.
IX.PFM'S REPRESENTATIVES
1.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 team
members set forth below.
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•Susan Musselman,Director
•Duncan Brown,Senior Managing Consultant
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.
X.INSURANCE
PFM shall maintain insurance coverage with policy limits not less than as stated in Exhibit C.
XI.LIMITATIONOF 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 any act
or omission in connection with performance of its services hereunder,or for any error of judgment
or mistake of law,or for any loss arising out of any issuance of municipal securities,any municipal
financial product or any other financial product or investment,or for any financial or other damages
resulting from Client's election to act or not to act,as the case may be,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.
XII.INDEPENDENTCONTRACTOR;NO THIRD-PARTYBENEFICIARY
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.
XIII.APPLICABLE LAW
This Agreement shall be construed,enforced,and administered according to the laws of the
State of Washington.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.
XIV.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.The invalidity in whole or in part of
any provision of this Agreement shall not void or affect the validity of any other provision.
XV.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.
Kitti nty
Brett Wachsmith,ounty Treasurer
Date:
PFM ANCIAL SORS LLC
Susan Musselman,Director
Date:
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EXHIBITA
SCOPE OF SERVICES
1.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 Snancial advisor will be modified in advance in writing to reflect that process.Upon the
request of the Client:
•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 competitive sale.In a competitive 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.
•For a negotiated sale,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.
•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 securitv,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.
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•Review the terms,conditions and structure of any proposed debt offering
undertaken by the Client and provide suggestions,modincations and enhancements
where appropriate and necessary to reflect the constraints or current Snancial policy
and fiscal capability.
•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.
•For any competitive sale of bonds or notes,prepare official notice of sale,
recommend sale parameters,take steps necessary to ensure broad market exposure
of the issue,through the use of newswire services and official statement distribution,
and perform additional steps necessary and customary for competitive bond sales.
•Review (or upon request,prepare,for an additional fee set forth in Section IV above)
Preliminary Official Statements and final Official Statements prepared on behalf of
the Client for use in marketing any bonds and meeting regulatory requirements.
2.Services related to the Financial Planning and Policy Development which may be
subject to hourly fees as set forth in Exhibit B,Section 2,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 abihty 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.
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•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,developercontributions,
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,independentengineers and other project
feasibility consultants to ensure that such studies adequately address technical,
economic,and financial risk factors affecting the marketability of any proposed
revenuedebt 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 expenditute 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.
•Undertake financial planning and policy developmentassignments 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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EXHIBITB
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:
For financing up to $20 million:$1.50 per $1,000,with a $20,000 minimum
For financing up to $75 million:$30,000 plus $0.75 per $1,000 over $20 million
Interim financing or bank placements may be subject to a reduced fee,based on the specific services
required.
Should a financing be commenced but not completed for any reason,PFM will be compensated for
services provided,based on the hourly rates stated below,which in no case will exceed 75°
o of the
Financing Services fee set forth above.
2.Hourly Project Fees (Non-Transaction Related)
In the event the Client requests that PFM perform signißcant 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/Director $305
Senior Managing Consultant $295
Senior Analyst $225
Analyst $195
Associate $175
For each contract year following the initial contract term (each,individually,a "Subsequent Contract
Year"),hourly rates may be increased by the rate of CPI-U,subject to the approval of the Client.
3.Retainer
For general advice between financings,PFM shall receive an annual fee in the amount of $4,000
("Retainer"),payable in quarterly installments of $1,000.The Retainer shall be reviewed and revised
upon mutual agreement.
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EXHIBITC
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 $25 million and $10 million,
respectively.PFM also carries a $2 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)
Start Indemnity &Liability Company;(A:XIV)
Financial Institution Bond:Federal Insurance Company;(A++/XV)
Cyber Liability:Indian Harbor Insurance Company (A)
General Liability:Great Northern Ins.Company;(A++/XV)
Automobile Liability:Federal Insurance Company;(A++/XV)
Excess /Umbrella Liability:Federal Insurance Company;(A++/XV)
Workers Compensation&Employers Liability Pacific Indemnity Company;(A++/XV)
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