A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER, PURSUANT TO REQUEST FOR QUALIFICATIONS NO. 2017-163-WG, FOR UNDERWRITER SERVICES; AUTHORIZING THE ADMINISTRATION TO ENTER INTO NEGOTIATIONS WITH MORGAN STANLEY & CO. LLC; MERRILL LYNCH, PIERCE, FENNER & SMITH INC.; J.P. MORGAN SECURITIES LLC; CITIGROUP GLOBAL MARKETS INC.; WELLS FARGO BANK, N.A.; RAYMOND JAMES & ASSOCIATES, INC.; JEFFERIES LLC; GOLDMAN SACHS & CO. LLC; PNC CAPITAL MARKETS LLC; ESTRADA HINOJOSA & COMPANY, INC.; STIFEL, NICOLAUS & COMPANY, INC.; LOOP CAPITAL MARKETS LLC; HILLTOP SECURITIES INC.; SIEBERT, CISNEROS, SHANK & CO., L.L.C.; AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT WITH EACH OF THE FOREGOING PROPOSERS, UPON CONCLUSION OF SUCCESSFUL NEGOTIATIONS BY THE ADMINISTRATION.

On April 14, 2010, the Mayor and City Commission accepted the City Manager’s recommendation to award RFP 15-09-10 for Underwriter Services and as a result created a pool of fifteen (15) firms to provide underwriting services on an as needed basis. The award is valid through April 13, 2018.

To seek proposals for a replacement pool of underwriters, on June 7, 2017, the Mayor and City Commission authorized the issuance of Request for Qualifications (RFQ) 2017-163-WG for Underwriter Services.  The RFQ sought statements of qualifications from underwriting firms to establish a team of underwriters to provide Underwriter Services to the City for the issuance of various municipal bonds.

The firm(s) selected would participate in future bond issues by assisting the City and its financial advisor with development of financing plans, preparation of preliminary and final official statements, bond resolution, and pricing, marketing, underwriting and selling the bonds to investors.

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 future bond financings. The City Manager will make a recommendation to the City Commission for the selection of one or more underwriters from the pool to provide services on a particular financing based on the characteristics of the financing and such merits as solely determined by the City.

RFQ PROCESS

On June 8, 2017, RFQ No. 2017-163-WG for Underwriter Services was issued.  RFQ responses were received on July 13, 2017.  The Procurement Department issued solicitation notices to 608 firms utilizing www.publicpurchase.com.  Fifty three (53) prospective proposers accessed the advertised solicitation.  The City received proposals from the following nineteen (19) firms: Wells Fargo Bank, N.A., Siebert, Cisneros, Shank & Co., L.L.C., Academy Securities, Inc., Loop Capital Markets LLC, Neighborly Corporation, Estrada Hinojosa & Company, Inc., Jefferies LLC, Suntrust Robinson Humphrey, Inc., Goldman Sachs & Co. LLC, Hilltop Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Inc., Stifel, Nicolaus & Company, Inc., Morgan Stanley & Co. LLC, Raymond James & Associates, Inc., PNC Capital Markets LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Janney Montgomery Scott LLC, Mischler Financial Group, Inc.

The Evaluation Committee appointed by the City Manager, pursuant to LTC# 405-2017, convened on November 8, 2017, to consider the responsive proposals received. The Committee was comprised of Natasha Nicholson, Senior Management and Budget Analyst, Public Works Administration, City of Miami Beach, Vivian Parks, Treasury Manager, Finance Department, City of Miami Beach, Julie Santamaria, Financial Advisor to the City of Miami Beach and John Woodruff, CFO, Finance Department.

The Committee was provided an overview of the project, information relative to the City’s Cone of Silence Ordinance and the Government Sunshine Law. The Committee was also provided with general information on the scope of services and a copy of each proposal.  The Committee was instructed to score and rank each proposal pursuant to the evaluation criteria established in the RFQ.

 The evaluation process resulted in the ranking of proposers indicated in Attachment A. A summary of each top-ranked firm is also attached.

The City received a robust response to the RFQ, with 19 firms responding. While it is in the City's best interest to maintain a relatively large pool of potential underwriters to assure that the City always has access to top firms for its bond issuances, it is unlikely that the City will need 19 firms. I have reviewed the proposals submitted and the results of the Evaluation Committee process. In doing so, I note that many of the firms have extensive experience in public sector bonds. I also note that, when considering the results of the Evaluation Committee, the top 14 firms received an average score ranging from 98 to 72.5 of the available 100 points that could be assigned by the Evaluation Committee. The firms receiving the lowest scores received an average score ranging from 60.75 to 51.25.

As previously stated, this award recommendation is a prequalification of firms for future bond issuances. At the time the City contemplates issuing a bond, a recommendation will be presented to the City Commission, based on the analysis provided by City's CFO and financial advisor, of the most qualified firms for a particular bond issuance. Again, for this reason, it is in the City's best interest to maintain a relatively large pool of qualified potential underwriters. For this reason, I believe it would be in the City's best interest to prequalify the top 14 firms receiving an average score higher than 72 points (out of a possible 100) based on the evaluation criteria set forth in the RFQ.

Accordingly, I recommend that the Mayor and City Commission approve the resolution authorizing the Administration to establish a pool of underwriters to provide underwriting services to the City for the issuance of various municipal bonds that includes Morgan Stanley & Co. LLC, Merrill Lynch, Pierce, Fenner & Smith Inc., J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Wells Fargo Bank, N.A., Raymond James & Associates, Inc., Jefferies LLC, Goldman Sachs & Co. LLC, PNC Capital Markets LLC, Estrada Hinojosa & Company, Inc.,  Stifel, Nicolaus & Company, Inc., Loop Capital Markets LLC, Hilltop Securities Inc., and Siebert, Cisneros, Shank & Co., L.L.C.

The cost of the related services, determined upon successful negotiations, are subject to funds availability approved through the City’s budgeting process.  Grant funding will not be utilized for this project.