Agenda Information Sheet
DEPARTMENT: Finance
ACM: Bryan Langley
Date: September 27, 2016
SUBJECT
Title
Receive a report, hold a discussion, and give staff direction regarding the City's contract for financial advisory, arbitrage rebate and continuing disclosure services.
Body
BACKGROUND
In December 2010, staff renegotiated three separate contracts with First Southwest ("FSW") into a single contract in an effort to reduce costs and improve efficiencies. The City Council approved the consolidated contract (Ordinance No. 2010-304) on December 7, 2010. Through this effort, the City's fees for arbitrage rebate services were reduced by 15% or $7,000 per year and a one-time savings of $39,165 recognized from reduced financial advisory services fees on the GO Refunding Bonds, Series 2010A. While there was no fee reduction for continuing disclosure services, the increased requirements for regulatory disclosures translated to an increase in services for the same cost to the City. Additionally and in conjunction with this effort in 2010, the City also renegotiated its investment advisory services contract with First Southwest Asset Management ("FSAM"), a division of FSW. Investment advisory services are separate services from those provided by FSC. That effort resulted in a savings of $15,000 and a reduction in fees that continues to today.
On February 21, 2012, the City Council adopted Ordinance No. 2012-029 awarding a five year contract to FSW for financial advisory, arbitrage rebate and continuing disclosure services. This contract maintained the fees approved in 2010, and is due to expire on February 20, 2017.
In anticipation of this approaching expiration date, staff requested a proposed fee schedule from FSW for all three services assuming a five year continuous term contract. FSW submitted the following proposed fees:
Current Fee
Proposed Fee
Financial Advisory Services:
Base Fee
$25,000
$25,000
Plus per 1,000 of Bonds, any si...
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