HomeMy WebLinkAboutContract No. 2015-26294)1 E-H-L"EIRS
LEADERS INPU11-I FINANCE
January 5, 2015
Joseph Kloiber
Finance Director
City of Columbia Heights
590 - 40th Avenue NE
Columbia Heights, MN 55421
Re: Letter of Engagement to Retain Ehlers as Dissemination Agent for Issuer Continuing Disclosure
Required Under Securities and Exchange Commission (SEC) Rule 15c2 -12 (the "Rule ")
As an issuer of municipal securities, the City ( "Issuer ") is required to comply with all continuing disclosure
obligations enumerated in the Continuing Disclosure Agreement /Certificate/Undertaking (CDU) associated
with each issue of securities subject to the Rule. Many Issuers have CDU's that vary significantly from one
CDU to another. Ehlers & Associates, Inc. ( "Ehlers ") has been helping you comply with all CDU obligations
as Issuer's Dissemination Agent. Fulfilling this obligation requires research, preparation and filing of
disclosure reports within specific time frames.
This Letter of Engagement ( "Letter ") is being presented to memorialize and clarify the terms of the Issuer's
engagement of Ehlers as the Issuer's Dissemination Agent. In this regard, Ehlers agrees to provide Issuer
with those services described in Appendix A ( "Services "). Ehlers shall be entitled to compensation by the
Issuer also as described in Appendix A.
This Letter shall be effective as of the date of its execution by the Issuer and shall remain in effect for a
period of one (1) year (the "Initial Term "). This Letter shall renew automatically on each anniversary of the
effective date of this Letter (each an "Additional Term "). Notwithstanding the foregoing, this Letter may
be terminated by either party upon sixty (60) days prior written notice. The Initial Term and each Additional
Term shall collectively be referred to herein as the "Term ".
In order to perform the engagement, Issuer agrees to provide Ehlers all documents and information as are
deemed necessary to fulfill the Issuer's reporting requirements under each respective CDU, and within the
applicable timeframe(s) ( "Disclosure Information "). With respect to Issuer's obligation to report the
occurrence of any event for which a material event notice ( "Event Notice ") is to be filed, Issuer shall provide
Disclosure Information related to the event to Ehlers within five (5) days of its occurrence. All other
Disclosure Information must be provided to Ehlers within fourteen (14) days of Issuer's receipt of any such
request from Ehlers. If Issuer fails to provide any Disclosure Information to Ehlers in accordance with the
foregoing, Ehlers shall not be held liable for any reason in the event that any necessary disclosure filing is
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not disseminated to the appropriate parry within the applicable timeframe(s). Further, if for any reason Issuer
fails to provide required Disclosure Information to Ehlers in accordance with the foregoing and Issuer's delay
results in any disclosure filing being after a stated deadline, Ehlers shall, without further direction or
instruction from Issuer, file a notice(s) with the applicable recipient submitting information provided by
Issuer, if any, and /or describing the failure and providing any other information as Ehlers deems appropriate.
Ehlers shall deem all Disclosure Information provided to it by the Issuer to be accurate and free of defect,
as well as not containing any material misstatements, falsehoods, or omissions of fact. Issuer acknowledges
that Ehlers shall be entitled to rely on all Disclosure Information provided by the Issuer without further
investigation as to its completeness or accuracy.
Issuer shall indemnify, hold harmless and defend Ehlers from and against any damages, costs or other
liabilities (including reasonable attorneys' fees) arising from or relating to any breach ofthis Letter by Issuer,
including, but not limited to, damages, costs and other liabilities arising out of any Disclosure Information
received and disseminated by Ehlers. Further, in no event shall Ehlers' total aggregate liability under this
Letter be in excess of the amount of fees paid by Issuer to Ehlers during the Term then in effect
notwithstanding anything contained herein. In addition, Issuer acknowledges that Ehlers shall not be
responsible and /or liable for any errors, misstatements or omissions associated with any continuing disclosure
report or filing, or for the correction thereof, that was prepared or disseminated by any parry other than
Ehlers.
This Letter constitutes the entire agreement between the parties and is intended to supersede any and all
agreements, whether oral or written, between the parties that were entered into relative to the subject matter
hereof prior to the effective date of this Letter. No amendment or modification of this Letter shall be deemed
valid unless made in writing and signed by both parties.
Our records show that Issuer is subject to Full CDU's. Ehlers will continue to act as Issuer's Dissemination
Agent for the CDU's we have been handling.
This Letter covers these securities and any subsequent securities for which Ehlers has acted as the Municipal
Advisor. The Issuer may request in writing that Ehlers act as the Dissemination Agent on any future
securities subject to the Rule not involving Ehlers.
If our engagement under the terms of this Letter is acceptable, please sign this Letter in the appropriate
signature block below and return a signed copy to us for our records. If, however, you do not wish to engage
our services, please note that election and return a copy of this Letter to us.
Please contact me if you have any questions or would like to discuss our engagement further.
Sincerely,
Ehlers
Mark Ruff, CIPFA
Senior Financial Advisor /Director
Issuer hereby accepts this Letter and engages Ehlers to provide the services noted herein and executes this
Letter as of the date noted below:
B..
SO DECLINED BY ISSUER
Title: City Managgr
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Date:
Issuer hereby acknowledges that it will be responsible for updating and submitting all necessary continuing
disclosure reports and filings as may be required of Issuer without the assistance of Ehlers. Issuer further
acknowledges and agrees that Ehlers assumes no responsibility for the compilation and /or submission of any
such continuing disclosure reports or filings.
Title:
Name: Date:
EHLERS DISSEMINATION AGENT SERVICES AND FEES
Ehlers' continuing disclosure services are designed to assist the Issuer in meeting its continuing disclosure
obligations. Depending on the size of a transaction and the total amount of debt outstanding at the time of
issuance, different debt issues may be subject to different reporting requirements. Ehlers will provide the
services identified below, which are reflective of the Issuer's requirements under its respective Continuing
Disclosure Undertaking (CDU). In no event will Ehlers assist Issuer with assessing whether information
provided or omitted as part of an annual filing is "material" or whether an event is "material" under the
federal securities laws requiring the filing of an event notice pursuant to a CDU. If the Issuer accepts this
letter and engages Ehlers as the Dissemination Agent, Ehlers shall provide the following services and charge
the following fees:
Full Disclosure Services.
Background
Since 1995, Securities and Exchange Commission (SEC) rule 15c2 -12 (the "Rule ") has required underwriters
of municipal securities to ensure that issuers are obligated to provide periodic reporting of specific
information with respect to certain issues of municipal securities. An issuer is classified as a "full
disclosure" reporting entity when it issues securities subject to the Rule in an amount of $1 million or more,
and further provided that total securities subject to the Rule and currently outstanding exceed $10 million.
Full disclosure reporting entities must:
• File reports consisting of specific information at least annually with the Municipal Securities
Rulemaking Board's (MSRB) Electronic Municipal Market Access (EMMA) system
(htW:Hemma.msrb.org
• File "Event Notices" regarding enumerated events specified in SEC rules and CDUs within 10 business
days of occurrence. Event Notices are filed through the same EMMA system.
Description of Services
Issuer engages Ehlers to provide the following services in connection with the preparation and dissemination
of Issuer's continuing disclosure reports and Event Notice filings in connection with all outstanding debt
issues of Issuer subject to the Rule and for which continuing disclosure reports or filings are required.
During the Term of the engagement, Ehlers shall provide the services hereinafter described with respect to
all existing and future securities of the Issuer subject to the Rule and having continuing disclosure
requirements. Ehlers shall provide these services for any other securities of the Issuer when requested in
writing by the Issuer.
Annual Filings, or More Frequently, if Required
a. Review and catalog of all Continuing Disclosure Agreement/Certificate/Undertaking (CDU)'s of
Issuer relative to current and future issues of securities subject to the Rule.
b. Creation of a timetable for the anticipated schedule of events relating to the preparation of Issuer's
annual (or more frequently, if required) continuing disclosure report.
c. Collection of information from third parties and Issuer, as applicable, to the extent necessary to
prepare the annual (or more frequently, if required) continuing disclosure report.
d. Preparing the annual (or more frequently, if required) continuing disclosure report in a standardized
format acceptable for submission to the EMMA system, or any future industry standard.
e. Submission of the annual (or more frequently, if required) continuing disclosure report and any
Event Notices to the designated recipient based on the applicable CDU's of Issuer and all laws, rules
and regulations relative thereto.
f. Delivering a copy of any report or notice submitted in accordance with (e. above) to Issuer for its
records, as well as confirmations of receipt of filing(s).
g. Respond to Underwriter /Investor inquiries and requests.
h. Providing recommendations to Issuer relating to future continuing disclosure related matters.
Event Notices
a. Informing Issuer of the types of events that may require the filing of an "Event Notice" and the
required reporting period for such notices.
b. Notifying Issuer of any information Ehlers discovers that may require the filing of an Event Notice,
and preparation and filing of the required Event Notice.
c. Upon notification by Issuer of any circumstances that may require the filing of an Event Notice,
preparing, filing, and providing confirmation of filing the required Event Notice.
Description of Fees
Full Disclosure Services fees shall be assessed as follows:
Number of Issuer Continuing Disclosure Undertakings
Annual Fee
One (1) to three (3) CDU's
$2,800
Four (4) to six (6) CDU's
$3,300
Seven (7) or more CDU's
$3,800
Plus any out of pocket expenses.
Special Circumstances
If an Issuer's CDU requires periodic filings (quarterly or semiannually) in addition to the annual filings, a
fee of $500 per required CDU filing shall be assessed.
Limited Disclosure Services.
Background
In 2009, the Securities and Exchange Commission put into place revised rules regarding a limited scope of
continuing disclosure requirements for certain municipal securities issuers. These rules apply to any
securities issued on or after July 1, 2009 in amounts of $1 million or more and where the Issuer's total
amount of principal outstanding and subject to the Rule is less than $10 million upon issuance. Any issuer
meeting the aforementioned parameters must comply with a limited disclosure undertaking and file annual
reports. Issuers subject to limited disclosure requirements must file audited financial statements (or
unaudited financial statements if allowed under a CDU) on an annual basis, rather than both financial
statements and operating and statistical data.
Description of Services
Ehlers shall provide the following services in connection with the preparation and dissemination of Issuer's
continuing disclosure reports and Event Notice filings for all current and future outstanding securities of
Issuer subject to the Rule and for which continuing disclosure reports or filings are required. During the
Term of the engagement, Ehlers shall provide the services hereinafter described with respect to all future
issuances for which Ehlers provides municipal advisory services and that have continuing disclosure
requirements. Ehlers will also provide these services for any other issues when requested in writing by the
Issuer.
Services to be provided are as follows:
Annual Filings
a. Review of all Continuing Disclosure Agreement/Certificate/Undertaking (CDU)'s of Issuer relative
to currently outstanding issuances.
b. Creation of a timetable for the anticipated schedule of events relating to the dissemination of Issuer's
annual updated financial information and operating data.
c. Submitting the Issuer's annual financial statements to the designated recipient thereof based on the
applicable CDU's of Issuer and all laws, rules and regulations relative thereto.
d. Delivering a copy of any report or notice submitted in accordance with (c above) to Issuer for its
records.
e. Respond to Underwriter/Investor inquires and requests.
f. Providing recommendations to Issuer relating to future continuing disclosure related matters.
Event Notices
a. Informing Issuer of the types of events that may require the filing of an "Event Notice ".
b. Notifying Issuer of any information Ehlers discovers that may require the filing of an Event Notice,
and preparation and filing of the required Event Notice.
c. Upon notification by Issuer of any circumstances that may require the filing of an Event Notice,
prepare and file the required Event Notice.
Description of Fees
Limited Disclosure Services shall be provided annually for a fee of $750.
Future Fee Changes
Ehlers reserves the right to adjust fees during the Term ofthe engagement without prior consent of the Issuer,
but not more than annually. Prior to any fee adjustments, the Issuer will be notified in writing of the revised
fees and their effective date.
I' D ► 1
EVENT NOTICES
If any one of the listed events occurs in relation to the Issuer and/or any of the Issuer's securities subject to
this agreement, you must notify Ehlers at the earliest possible time to discuss the applicability and the need
for any filing of an Event Notice. The Issuer may also wish to discuss the matter with its legal counsel to
gauge materiality of any occurrence.
Mandatory Event Notices
• Principal and interest payment delinquencies
• Non - payment related defaults, if material
• Unscheduled draws on debt service reserves reflecting financial difficulties
• Unscheduled draws on credit enhancements reflecting financial difficulties
• Substitution of credit or liquidity providers or their failure to perform
• Adverse tax opinions, IRS notices or material events affecting the tax status of the security
• Modifications to rights of security holders, if material
• Bond calls, if material
• Defeasances
• Release, substitution or sale of property securing repayment of the securities, if material
• Rating changes
• Tender offers
• Bankruptcy, insolvency, receivership or similar event of the obligated person
• Merger, consolidation, or acquisition of the obligated person, if material
• Appointment of a successor or additional trustee, or the change of name of a trustee, if material
Additional / Voluntary Event -Based Disclosures
• Amendment to continuing disclosure undertaking
• Change in obligated person
• Notice to investors pursuant to bond documents
• Certain communications from the Internal Revenue Service
• Secondary market purchases
• Bid for auction rate or other securities
• Capital or other financing plan
• Litigation / enforcement action
• Change of tender agent, remarketing agent, or other on -going party
• Derivative or other similar transaction
• Other event -based disclosures
RESOLUTION NO. 2015-19
AUTHORIZING A BROKERAGE ACCOUNT WITH
TD AMERITRADE INSTITUTIONAL
AND AN INVESTMENT ADVISORY AGREEMENT WITH
EHLERS INVESTMENT PARTNERS
WHEREAS, The City of Columbia Heights intends to establish custodial accounts with 'I'D
Ameritrade Institutional for cash and investment securities, and to contract with Ehlers
Investment Partners for investment advice in regard to said accounts and securities; and
WHEREAS, The City of Columbia Heights, TD Ameritrade Institutional; and Ehlers Investment
Partners, each require certain clarification of the authority within the City of Columbia Heights
in regard to such accounts and securities;
THEREFORE, IT IS HEREBY RESOLVED, that the Finance Director and the City Manager of
the City of Columbia Heights are hereby fully authorized and empowered to open a TD
Ameritrade Institutional brokerage account, transfer, endorse, sell, assign, set over and deliver
any and all shares of stocks, bonds, debentures, notes, evidences of indebtedness, or other
securities now or hereafter standing in the name of or owned by this City, to purchase stocks,
bonds, debentures, notes, evidences of indebtedness, and other securities, and to make, execute,
and deliver, under the City seal of this City, any and all written instruments necessary or proper
to effectuate the authority hereby conferred.
BE IT FURTHER RESOLVED, that the Finance Director and the City Manager of the City of
Columbia Heights are hereby fully authorized to make, execute, and deliver, under the City seal
of this City, an investment advisory agreement with Ehlers Investment Partners.
Passed this 23rd day of February, 2015
Offered by: Schmitt
Seconded by: Williams
Roll Call: All Ayes
Mayor Gary Peterson
Katie Bruno,
City Clerk /Council Secretary