A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER AND APPROVING THE SELECTION OF THE FOLLOWING INVESTMENT BANKING FIRMS TO PROVIDE UNDERWRITING SERVICES FOR THE STORMWATER REVENUE BONDS THE CITY ANTICIPATES WILL BE ISSUED IN 2017, NAMELY CITIGROUP, AS SENIOR MANAGER; WELLS FARGO SECURITIES, INC., AS CO-MANAGER; AND ESTRADA HINOJOSA & CO., AS CO-MANAGER; AND FURTHER APPROVING THE SELECTION OF THE FOLLOWING INVESTMENT BANKING FIRMS TO PROVIDE UNDERWRITING SERVICES FOR THE WATER AND SEWER REVENUE AND REFUNDING BONDS THE CITY ANTICIPATES WILL BE ISSUED IN 2017, NAMELY RAYMOND JAMES & ASSOCIATES, AS SENIOR MANAGER; STIFEL NICOLAUS, AS CO-MANAGER; AND LOOP CAPITAL MARKETS, AS CO-MANAGER.

On December 9, 2009, the Administration recommended that the Mayor and City Commission authorize the issuance of a Request for Proposals (RFP) to select a pool of investment banking firms to provide Underwriter Services for the issuance of various long-term municipal bonds.  RFP No. 15-09/10 for Underwriter Services for a Five Year Period, with five one year renewals was issued on January 27, 2010, with an opening date of February 24, 2010. The Mayor and City Commission accepted the City Manager’s recommendation to create a pool of 15 firms for underwriting services.

The selected firms participate in the bond issues by assisting the City, its Chief Financial Officer and its Financial Advisor, Julie Santamaria RBC Capital Markets, with development of financing structures, preparation of preliminary and final official statements, bond resolutions, and other documentation as may be required.  The underwriters price, market and sell the bonds to investors in municipal securities.

Additionally, firms appointed as the senior managing underwriter are required to provide the services listed below throughout the proposed engagement.  Co-managing underwriters provide assistance as requested and support in the marketing, distribution and underwriting of the assigned transactions. The City, at its sole discretion, may select one or more firms to serve as senior manager or co-manager from the underwriting team for each of its bond financings. The City reserves the right to assign less than all of the members of the underwriting pool for a particular financing, and reserves the right to remove any underwriter from participation in the underwriting syndicate if the underwriter and the City are unable to agree on any provision of the bond purchase contract.  All fees are contingent upon the issuance of the proposed bonds.   The required services include, but are not limited to, the following:

1. Participate in drafting of all bond documents, including the Official Statement.
2. Assist in preparation and discussions with rating agencies and bond insurers, if requested.
3. Make recommendations for the proposed financing, including, but not limited to, the timing of the sale, the overall sales approach, the structure of the bonds, the call provisions, and the use of credit enhancement.
4. Lead the underwriting team in marketing and distributing the bonds to both retail and institutional investors.
5. Underwrite the financing based upon terms and conditions agreed to by both the City, financial advisor, and the underwriters in the Bond Purchase Agreement.
6. Assist with the closing of the financing, including reviewing all closing documents and providing a post-financing report to the City which highlights the key characteristics of the financing.

The process to select firms to serve as a senior or co-manager for a particular issue involves a review of work previously assigned to the various firms during the term of the pool, experience in and commitment to Florida municipal finance, the capability of a firm to senior manage complex credit structures, the size of the bond issue to be sold, and the various markets that the firm has access to for marketing and distribution.  A firm’s response to other business requests, such as the City’s Line of Credit, and resulting commitment to the City is also considered.  The list of firms is recommended by the City Manager following consultation with the City’s Chief Financial Officer and Financial Advisor. Since the time that the 15 firms were originally selected for the underwriting pool, three firms no longer have public finance representatives in Florida and one firm has withdrawn. 

The City anticipates the issuance of at least two bond financings in 2017, which consist of the following:

1)     Stormwater Bonds to provide approximately $100 million in proceeds for stormwater projects

2)     Water and Sewer Revenue and Refunding Bonds to provide approximately $50 million in proceeds for water and sewer projects and refinance approximately $31 million in Series 2000 Water and Sewer Bonds for debt service savings

The firms recommended for the Series 2017 financings are as follows:

Stormwater Revenue Bonds

Senior Manager          -  Citigroup

Co-Manager                -  Wells Fargo Securities, Inc.

Co-Manager                -  Estrada Hinojosa & Co.

Water and Sewer Revenue and Refunding Bonds

Senior Manager          -  Raymond James & Associates

Co-Manager                -  Stifel Nicolaus

Co-Manager                -  Loop Capital Markets

A list of the underwriter’s previous transactions with the City during the term of the pool and the resulting total participation in the City’s bond financings based on this recommendation are provided on attachment A.

The Administration recommends that the Mayor and City Commission of the City of Miami Beach, Florida approve the City Manager’s recommendation of underwriters for the Miami Beach Stormwater Revenue Bonds and Water and Sewer Revenue and Refunding Bonds.