Resolution 2014-16 Resolution No. 2014-1
A RESOLUTION APPROVING
A SUPPLEMENTAL FINANCIAL SERVICES AGREEMENT
BE IT RESOLVED, by the Mayor and City Council of the United City of Yorkville,
Kendall County, Illinois, that the Supplemental .Financial Services Agreement by and between
the United City of Yorkville, an Illinois municipal corporation located at 800 Game Farm Road,
Yorkville, Illinois 60560, and Speer Financial, Inc., Chicago, Illinois, executed on June 17, 2014,
by Kevin W. McCanna is hereby approved and the Mayor is hereby authorized to execute and
deliver said Agreement.
BE IT FURTHER RESOLVED this Resolution shall be in full force and effect from
and after its passage and approval as provided by law.
PASSED by the Mayor and City Council of the United City of Yorkville, Illinois, this
day of j a t C4 2014.
CARLO COLOSIMO KEN KOCH
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JACKIE MILSCHEWSKI LARRY KOT
CHRIS FUNKHOUSER JOEL FRIEDERS
ROSE ANN SPEARS DIANE TEELING
APPR ED:
Mayor
Attest:
City Clerk
Resolution No. 2014- b
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SUPPLEMENTAL FINANCIAL SERVICES AGREEMENT
THIS SUPPLEMENTAL FINANCIAL SERVICES AGREEMENT(the"Agreement") is entered
into between the United City of Yorkville, Illinois ("Client") and Speer Financial, Inc. Chicago, Illinois
("Speer").
WHEREAS, Speer is a consulting firm specializing in municipal finance related matters (the
"Business");
WHEREAS, the parties entered into that certain agreement dated August 23, 1994 pursuant to
the professional services proposal submitted by Speer to Client in connection therewith;
WHEREAS, Client is a Municipal Entity and Speer is a Municipal Advisor as such terms are
defined within the Securities Exchange Act of 1934,as amended;and
NOW THEREFOR,the parties agree as follows:
1. Services.
(a) Municipal Advisor Services. Speer agrees to provide certain services to Client as a
Municipal Advisor ("Municipal Advisor Services") upon receipt of a request from Client for such
services ("Project Request"). Speer may provide any or all of the Municipal Advisor Services set forth
on Exhibit A hereto, or as otherwise may be requested by Client from time to time. Upon the receipt of a
Project Request for Municipal Advisor Services, Speer and Client shall determine a mutually agreed
upon scope of Speer's engagement to provide such services ("Municipal Advisor Engagement"). Any
agreement related to the Municipal Advisor Engagement shall be memorialized by way of an engagement
letter issued by Speer to Client ("Engagement Letter"). Any such Engagement Letter shall contain a
description of the subject matter of the financing to be completed (the "Project") as well as the list of
Municipal Advisor Services to be provided by Speer in connection with such Project to the extent that
the Municipal Advisor Services to be provided by Speer in connection with the Project shall differ from
those contained with Exhibit A hereto. Client agrees and acknowledges that in no event shall this
Agreement be construed as having authorized Speer to commence a Municipal Advisor Engagement
absent the parties' acknowledgement of a corresponding Engagement Letter.
(b) Authorization. Client hereby authorizes its Finance Director and City Administrator to
discuss with Speer the terms of any Engagement Letter, and authorizes its Finance Director and City
Administrator to acknowledge any such Engagement Letter on behalf of Client,as well as any additional
disclosures of Speer that may be contained therein.
2. Term and Termination.
(a) The Agreement. This Agreement shall be effective as of the Effective Date and shall
remain in effect until terminated by either party upon thirty (30) days written notice to the other party.
Notwithstanding anything to the contrary contained herein, termination of this Agreement shall
automatically terminate any Municipal Advisor Engagement then in effect.
(b) The Municipal Advisor Enga ems. Once effective, a Municipal Advisor Engagement
shall remain in effect until the earlier of(i)the Project is completed and Speer has received compensation
for its services,or (ii) the Municipal Advisor Engagement is terminated by either party upon (30) days
prior written notice to the other party. In the event that any Municipal Advisor Engagement is terminated
prior to the completion of the Project, Speer reserves the right to assess fees for any work performed
pursuant to any then outstanding Engagement Letter based upon the product of actual hours spent on the
Project by Speer multiplied by a rate for Municipal Advisor Services of$250.00 per hour.
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3. Compensation. As compensation for Speer's provision of Municipal Advisor Services, Speer
shall receive a fee in accordance with Exhibit B attached hereto and incorporated herein by reference,
unless otherwise agreed to by the parties in writing. Client shall be responsible for all out-of-pocket
expenses incurred by Speer relative to any Municipal Advisor Engagement, including, but not limited to,
internet bidding fees, good faith deposit bank fees,delivery charges(postage,express mail,fax services),
publication/printing fees (printing of official statements, notices of sale, bid forms, report duplication,
and securities) CUSIP fees, registration/paying agent fees, and other transaction costs. Out-of-pocket
expenses may include payments to Speer for verification, internet sale administration, and SLG-
application services. Speer shall not be liable for professional fees or other securities related costs,
including, but not limited to, professional services (attorney, bond counsel, architect, engineer and
auditor services),and credit enhancements(e.g.,rating,insurance and letters of credit).
4. Billine Statement. Client will receive an invoice from Speer for the Municipal Advisor Services
provided in connection with any Municipal Advisor Engagement and upon the terms and conditions
contained within the corresponding Engagement Letter. Any invoice received by Client shall be due and
payable within thirty (30) days of the invoice date. Any balance that remains outstanding in excess of
ninety(90)days shall be subject to a financing charge to be computed at a rate of 12%per annum,or the
maximum rate allowable under Illinois law.
5. Representations of Client. Client represents and warrants that any information provided to
Speer in connection with any Municipal Advisor Engagement shall be factual and not misleading,
including,but not limited to,any information contained within any financial statements,budgets, or other
relevant documents. Client further agrees to not intentionally omit any material information relevant to
Speer's provision of services.
6. Indemnity. The Client hereby agrees to indemnify,defend and hold Speer harmless against any
loss, liability, assessment, or expense (including reasonable attorneys' fees) (collectively, "Damages")
incurred or arising out of, or in connection with, Speer's acceptance, administration, or performance of
its duties hereunder,except with respect to any Damages as may arise from Speer's own bad faith,willful
misconduct, gross negligence, or which may otherwise arise from a breach of Speer's fiduciary duty,
including the cost and expense of defending itself against any claims in connection with the exercise or
performance of any of its powers or duties under the terms of this Agreement.
7. Integration and Amendment. This Agreement constitutes and expresses the entire agreement
of the parties with respect to the subject matter hereof, and all promises, undertakings, representations,
agreements,understandings and arrangements,whether oral or written,with reference thereto are merged
herein. No amendments to or alterations or variations of this Agreement shall be valid unless made in
writing and signed by the parties.
8. Governine Law. This Agreement shall be governed by the laws of the State of Illinois without
regard to its choice of law principles. Any suit or legal proceeding brought pursuant to or otherwise
arising out of this Agreement or the performance thereof will be brought solely in the County of Kendall
Illinois.
9. Dodd-Frank Compliance. Speer is a registered municipal advisor in good standing with both
the SEC(#866-00353-00)and the MSRB^0162).
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10. Disclosure of Conflicts of Interest. Client acknowledges that it has received the disclosures set
forth on Exhibit C attached hereto and incorporated herein by reference. Client further acknowledges
that it has been given the opportunity to raise questions and discuss such disclosures with Speer and
independent counsel and that it fully appreciates the nature of such disclosures and any and all conflicts
noted therein. Client hereby waives all such conflicts and authorizes Speer to provide services pursuant
to any Municipal Advisor Engagement and in accordance with this Agreement. From time to time, Speer
may provide additional disclosures to Client. In this regard,Client hereby authorizes its Finance Director
to acknowledge any such additional disclosures on behalf of Client.
11. Counterparts. This Agreement may be executed in any number of counterparts via facsimile or
other electronic transmission, each of which will be deemed an original, and all of which together will
constitute one and the same instrument.
12. Headings. All headings or captions used herein are for the convenience of reference only and
shall not affect the meaning,construction or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective representatives as of the date first written above.
UNITED CITY OF YORKVILLE SPEER FINANCIAL,INC.
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By: &O�V49- By: ----
Name:-C-189 J. C- 0L41`I-K.1 Name: K Cm d I"` C
Title: Mn F, Title: 11 rQ Szd el't
Date: 7 '�r��y Date: G f-7 — 1 If
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EXIMIT A
MUNICIPAL ADVISOR SERVICES
Speer can provide a wide range of Municipal Advisory Services to the Client, which will depend upon
the scope of Speer's engagement,and the type of securities issuance and/or project to be completed:
PRE-ISSUANCE and ISSUANCE SERVICES
A. Financial Plannine Services
In preparation of an issuance of securities, Speer's services may consist of some or all of the following:
(1) Orientation. Reviewing our Client's current financial position, statutory authority, and
financing capabilities, including whether a refunding or defeasance of any outstanding debt is
appropriate.
(2) Coordination. Coordinating financial planning and issuance details with our Client's staff,bond
counsel,printers,rating agencies and other transaction participants.
(3) Consultation. Consulting with the elected and key appointed officials and staff regarding the
various phases of the development and implementation of a financing plan.
(4) Public Relations. Responding to inquiries from the general public or news media relating to
municipal issuance related matters.
(5) Planning. Developing a debt financing plan that includes all or some of the following:
a. Maturity Schedules. Alternative maturity schedules relating to the financing. These
schedules may "wrap" around existing debt to provide stable tax rates, level debt
services payments, or meet other policy or cash flow requirements as may be requested
by the Client.
b. Market Receptivity. An evaluation of potential market receptivity for each debt issuance
and recommend the most suitable sale option.
c. Tax Law. An evaluation of the ramifications of Federal tax law, or as set forth by bond
counsel, on the financing plan to maximize any cost savings that may be available to the
Client.
d. Security Registrar and Paying Agent. A comparison of security registrar and/or paying
agent fees and make recommendations for the selection of such parties based upon the
Client's selection criteria.
e. Credit Rating and/or_Insurance. A costs and benefits analysis regarding whether to
obtain any available credit enhancements and/or a credit rating(s). Speer shall j
recommend a course of action based upon its evaluation of such analysis.
f. Competitive and Negotiated Sale of Debt Securities. An analysis and corresponding
recommendation regarding the method of sale to be used in connection with the
financing plan.
g. Financing Timeline. A tentative financing timeline to guide officials regarding the
timing of various aspects of the financing plan. 1
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B. Competitive Sale Services
To facilitate the competitive sale of the Client's securities issuance, Speer's services may include any or
all of the following:
(1) Authorizing Resolutions/Ordinances. Assist the Client's attorney and/or bond counsel with
regard to the financial provisions to be included within the Client's authorizing
resolutions/ordinances relative to the securities issuance.
(2) Credit Rating and/or Insurance. When applying for a credit rating and/or bond issuance,
Speer will submit the necessary data and documents to the appropriate entities, and arrange for
the presentation of materials to the selected credit rating agency(ies) and/or insurance
company(ies).
(3) Official Statement,Notice of Sale and Bid Form.
a. Preparation of Documents. Prepare a preliminary Official Statement, Term Sheet,
Statement of Facts or Limited Offering Memorandum(each a, "Disclosure Document"),
Notice of Sale and Bid Form. Following the award of the securities, Speer shall prepare
the final Disclosure Document corresponding to the Project. The Disclosure Document
will describe the securities being issued and will contain detailed information provided
by the Client and bond counsel as is necessary to permit prospective purchasers to make
intelligent judgments.
b. Notice of Sale Publication. Notify prospective purchasers of the sale without cost to the
Client and prepare,as necessary,a Notice of Sale.
c. Encouragement to Bidders. Circulate the preliminary Disclosure Document to our
appropriate list of potential purchasers, including, investment institutions, banks and
underwriters, to solicit bids from such firms for the Client's securities. Make contact
with underwriters to induce formation of bidding groups and, generally, undertake these
activities in order to generate bids. Provide copies of the preliminary Disclosure
Document and Official Bid Forms, as applicable, for each sale to the Client for
distribution to local banks and elected officials.
d. Bid Opening Analysis and Recommendations. Conduct each sale, examine the bids
submitted for completeness and compliance with the applicable bidding requirements,
evaluate the bids for accuracy, and recommend a proposed course of action relative
thereto.
(4) Preparation, Registration and Delivery of Securities. Conduct all necessary undertakings in
order to complete the financing, including, monitoring the preparation, registration and delivery
of the securities being issued.
(5) Debt Service Schedule. Provide the issuer with a final debt service schedule and other materials
pertinent to the securities sale.
(6) Sale Proceeds and Investment Schedule. Upon receipt of an expected drawdown schedule
from the Client, Speer shall estimate a realistic time schedule for the expenditure of issuance
proceeds to enable unexpended amounts to be invested and thereby help offset interest expense.
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C. Negotiated Sale Services j
To facilitate the sale of the Client's securities issuance, Speer's services may include any or all of the
following:
(1) Authorizing Resolutions/Ordinances. Assist the Client's attorney and/or bond counsel with
regard to the financial provisions to be included within the Client's authorizing
resolutions/ordinances relative to the securities issuance.
(2) Credit Rating and/or Insurance. When applying for a credit rating and/or bond insurance,
Speer will submit the necessary data and documents to the appropriate entities, and arrange for
the presentation of materials to the selected credit rating agency(ies) and/or insurance
company(ies).
(3) Official Statement and Proposals.
a. Preparation of Documents. Prepare or assist in the preparation of a preliminary
Disclosure Document,Request for Proposals(RFP)or Request for Qualifications(RFQ),
and,following the award of the securities,the final Disclosure Document.
b. Proposal Analysis and Recommendations. Review and examine the proposals submitted
for completeness and compliance with the applicable RFP/RFQ requirements, evaluate
the proposals for accuracy, and recommend a proposed course of action relative to the
proposals received.
(4) Negotiation of Terms. Negotiate with the selected underwriter(s)/purchaser(s) relative to
interest rates,terms and conditions of the securities issuance.
(5) Preparation,Registration and Delivery of Securities. Conduct all necessary undertakings in
order to complete the financing, including, monitoring the preparation, registration and delivery
of the securities being issued.
(6) Debt Service Schedule. Provide the issuer with a final debt service schedule and other materials
pertinent to the securities sale.
(7) Sale Proceeds and Investment Schedule. Upon receipt of an expected drawdown schedule
from the Client, estimate a realistic time schedule for the expenditure of issuance proceeds to
enable unexpended amounts to be invested and thereby help offset interest expense.
POST-ISSUANCE AND NON-ISSUANCE RELATED SERVICES
A. Continuing Disclosure_Services
Following most securities issuances, municipal entities will have certain continuing disclosure
obligations, which require issuers to prepare and file an "Annual Financial Update". Information
contained in any such Annual Financial Update shall be the type required in subsection (b)(5)(i)(A) of
Securities and Exchange Commission Rule 15c2-12(Rule 15c2-12). In connection with any such Annual
Financial Update, Speer is available to provide any or all of the following services:
(1) Annual Financial Update. Compile necessary information relative to and from the Client and,
thereafter, prepare the Annual Financial Update for filing with the Municipal Securities
Rulemaking Board's Electronic Municipal Market Access(EMMA)data repository.
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(2) Dissemination Agent. File with EMMA the Annual Financial Update on behalf of the Client.
(3) Material Events Notice. Upon receiving notice and direction from Client with respect to any
events that may be considered a material event for purposes of Rule 15c2-12, prepare and file
with EMMA a Material Events Notice.
(4) Disclosure Review. Review prior disclosures to ensure compliance with any then applicable
rules and regulations. Following any such review in which potential disclosure violations are
discovered, Speer will provide the Client with a recommendation relative to remedying any such
violations, and, upon request of the Client, prepare and file any necessary supplementary
disclosures with EMMA in order to remedy any such violation.
B. Non-Issuance Consultine Services
Certain Municipal Advisory Services which may not result in the issuance of indebtedness are
occasionally needed by the Client. Speer is available to provide such services, which may include any
or all of the following:
(1) Rate Studies;
(2) Tables and schedules for Client's audit;
(3) Client internal financial analyses unrelated to municipal securities;and
(4) Referendum consulting services.
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EXHIBIT B
FEE SCHEDULE
A. Pre-Issuance and Issuance Services
Fees in connection with any Pre-Issuance and Issuance Services rendered, regardless of sale method,
shall be based upon the par amount of the securities issued,calculated as follows:
Financial Advisory Services: $5,000 plus 1/4 of 1% of the municipal securities issued
in excess of$1,000,000.
Except as otherwise provided in this Agreement, Pre-Issuance and Issuance Services fees shall be
contingent on the successful sale of the Client's securities.
B. Post-Issuance Services
Fees in connection with any Post-Issuance Municipal Advisor Services rendered shall be provided at the
following hourly rates:
Municipal Advisor Personnel: $95/hour
Administrative Personnel: $50/hour
Speer will also charge $150 for each filing made by it in accordance with SEC Rule 15c2-12, including
any filing made with the Municipal Securities Rulemaking Board's Electronic Municipal Market Access
(EMMA) system. Notwithstanding the foregoing, fees incurred by Client for Post-Issuance Municipal
Advisor Services shall be capped at$2,000 per calendar year.
C. Non-Issuance Services
Fees in connection with any Non-Issuance Services rendered shall be provided at the following not to
exceed hourly rates:
Municipal Advisor Personnel: $100/hour
Administrative Personnel: $ 50/hour
Notwithstanding anything to the contrary contained in this Exhibit B, fees for any services provided
pursuant to this Agreement shall not include out-of-pocket expenditures as described more fully under
Section 3 of this Agreement.
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EXHIBIT C
DISCLOSURE OF CONFLICTS OF INTEREST
VARIOUS FORMS OF COMPENSATION
The Municipal Securities Rulemaking Board(MSRB) requires us, as your municipal advisor, to provide
written disclosure to you about the actual or potential conflicts of interest presented by various forms of
compensation. We must provide this disclosure unless you have required that a particular form of
compensation be used. You should select a form of compensation that best meets your needs and the
agreed upon scope of services.
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Forms of compensation: potential conflicts. The forms of compensation for municipal advisors vary
according to the nature of the engagement and requirements of the client, among other factors. Various
forms of compensation present actual or potential conflicts of interest because they may create an
incentive for an advisor to recommend one course of action over another if it is more beneficial to the
advisor to do so. This document discusses various forms of compensation and the timing of payments to
the advisor.
Fixed fee. Under a fixed fee form of compensation, the municipal advisor is paid a fixed amount
established at the outset of the transaction. The amount is usually based upon an analysis by the client
and the advisor of, among other things, the expected duration and complexity of the transaction and the
agreed-upon scope of work that the advisor will perform. This form of compensation presents a potential
conflict of interest because, if the transaction requires more work than originally contemplated, the
advisor may suffer a loss. Thus, the advisor may recommend less time-consuming alternatives, or fail to
do a thorough analysis of alternatives. There may be additional conflicts of interest if the municipal
advisor's fee is contingent upon the successful completion of a financing,as described below.
Hourly fee. Under an hourly fee form of compensation,the municipal advisor is paid an amount equal to
the number of hours worked by the advisor times an agreed-upon hourly billing rate. This form of
compensation presents a potential conflict of interest if the client and the advisor do not agree on a
reasonable maximum amount at the outset of the engagement, because the advisor does not have a
financial incentive to recommend alternatives that would result in fewer hours worked. In some cases,an
hourly fee may be applied against a retainer(e.g.,a retainer payable monthly), in which case it is payable
whether or not a financing closes. Alternatively, it may be contingent upon the successful completion of
a financing, in which case there may be additional conflicts of interest,as described below.
Fee contingent upon the completion of a financing or other transaction. Under a contingent fee C
form of compensation, payment of an advisor's fee is dependent upon the successful completion of a
financing or other transaction. Although this form of compensation may be customary for the client, it
presents a conflict because the advisor may have an incentive to recommend unnecessary financings or
financings that are disadvantageous to the client. For example, when facts or circumstances arise that
could cause the financing or other transaction to be delayed or fail to close, an advisor may have an
incentive to discourage a full consideration of such facts and circumstances, or to discourage
consideration of alternatives that may result in the cancellation of the financing or other transaction.
Fee paid under a retainer agreement. Under a retainer agreement,fees are paid to a municipal advisor
periodically (e.g., monthly) and are not contingent upon the completion of a financing or other
transaction. Fees paid under a retainer agreement may be calculated on a fixed fee basis(e.g., a fixed fee
per month regardless of the number of hours worked) or an hourly basis (e.g., a minimum monthly
payment, with additional amounts payable if a certain number of hours worked is exceeded). A retainer
agreement does not present the conflicts associated with a contingent fee arrangement(described above).
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Fee based upon Principal or notional amount and term of transaction. Under this form of
compensation,the municipal advisor's fee is based upon a percentage of the principal amount of an issue
of securities(e.g.,bonds)or, in the case of a derivative,the present value of or notional amount and term
of the derivative. This form of compensation presents a conflict of interest because the advisor may have
an incentive to advise the client to increase the size of the securities issue or modify the derivative for the
purpose of increasing the advisor's compensation.
OTHER MATERIAL CONFLICTS OF INTEREST
The MSRB requires us, as your municipal advisor, to provide written disclosure to you about material
conflicts of interest. The following represent Speer material conflicts of interest known to Speer as of
the date of this Agreement.
As of the date of this agreement, Speer is unaware of any material conflicts of interest.
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