HomeMy WebLinkAboutCORRESPONDENCE - RFP - P936Fees and Expenses:
For advisory services, propose a flat dollar amount fee respective to each
financing. Indicate whether any economies of scale will be obtained if more than
one of the transactions is completed by your firm. Estimate and commit to a not -
to -exceed dollar amount for each respective transaction not included in the flat
fee quote.
For transactions specifically identified in the RFP, James Capital proposes to act as the
City's Financial Advisor on a fee -for -service basis, with fees to be collected only upon
the successful closing of the issue. Proposed fees are as follows:
Fort Collins DDA Tax Increment Revenue Bonds
Financial Advisory Fee for a Private Placement: $6,000
Financial Advisory Fee for a Public Offering: 8,000
Other City Revenue Bonds and COPS
Financial Advisory Fee for a Private Placement: $6,000
Financial Advisory Fees for Public Offerings
will be priced proportionately on a sliding scale
based on the following benchmarks:
Issues of $5,000,000 or less: $ 8,000
A $10,000,000 issue: 12,500
A $15,000,000 issue 15,000
A $40,000,000 issue or greater 24,500
Examples of the resulting fees are $10,700 for an $8 million issue and $16,140
for an $18 million issue.
An escrow structuring fee of $2,500 will be added to any advanced refunding
issue. The maximum fee for a state loan financing will be $9,500.
James Capital would submit any charges incurred for travel and lodging outside
Colorado, as well as any charges incurred for hosting conference calls for more
than three parties, for reimbursement to the City.
16 JAMES Capital Advisors Inc.
Proposed Fees & Expenses
Appendix 7: A) For advisory services, propose a Flat dollar amount fee
respective to each financing. Indicate whether any economies of scale
will be obtained if more than one of the transactions is completed by
your firm. Estimate and commit to a not -to -exceed dollar amount of
each respective transaction not included in the Flat fee quoted. B) For
negotiated sales, indicate how your firm will manage transactions to
minimize costs to the City. Provide specific examples of the fee levels
and arrangements obtained for other clients. C) Fees will be billed after
closing of any transaction(s). If a transaction is not consummated, the
City will not be responsible to pay any fees or expense related to that
transaction. Identify all fees for other services that may be required to
complete the transaction.
George K. Baum & Company is a full service
investment banking firm which utilizes the talent and
expertise of its many experienced team members on
any assignment, financial advisory or underwriting,
that it undertakes for a client. In our opinion, all
of the fees proposed below are reasonable and
competitive except where competing firms are unable
to provide the same level of resources and expertise
as George K. Baum & Company. We are however
open to negotiation with the City on any aspect of the
fees proposed based on the City's final requirements.
Financial Advisory Services Fee
If our firm is selected to serve as financial advisor we
recommend that the fees for the COPs be divided
into two tranches: for the general City supported
COP's for the police services building, transportation
de-icing facility and the Southeast branch library we
propose a flat fee of $25,000 if all are done as a single
issue. If done separately (but services provided by
George K. Baum & Company for all three projects)
we propose a fee of $18,000 for the police facility
and $6,000 each for the transportation and library
facilities.
Because of the very different nature and difficulty of
the open space COP's we have suggested that George
K. Baum & Company act as investment banker for a
negotiated sale; however were the City to choose that
we serve as financial advisor we would do so at a fee
of $25,000 which would include the extensive and
elaborate program described in "Approach".
With regard to redevelopment financings we propose
an advisory fee of $15,000 for each insured issue up
to $10.0 million in par amount. If redevelopment
financings are to be done on a non -rated basis our
PROPOSAL TO City of Fort Collins
base fee would be $20,000. Because of the extensive
time involved from conception of a redevelopment
project to the actual issuance of a financing, we propose
an additional $5,000 be added to our compensation
for each additional year it takes to bring a financing to
market.
These fees would prevail whether we served as advisor
for public or negotiated sales. As financial advisor
for negotiated sales, George K. Baum & Company
have prepared RFPs for underwriters and has been
successful at obtaining competitive fee structures for
bankers. Our emphasis however has always been at
selecting the best proposals which may or may not be
the lowest prices. Our experience is that it is important
to assure that bankers are appropriately compensated
to provide an incentive for aggressive interest rate
pricing which is much more important to interest
cost reductions and to the best marketing of difficult
financings such as TIFs and COP's.
Negotiated Sales
George K. Baum & Company proposes that the
City retain its services as an investment banker to
underwrite the City's proposed COP's, which are
resistant to effective public sale especially its open
space COP's. For the difficult task of structuring,
obtaining ratings and credit enhancement and
underwriting the open space COP's we would seek
compensation of $7.00/$1000 of par amount. For
underwriting the police services building COP's a fee
of $5.00/$1000 is proposed as it is for the transportation
and library COPS.
For redevelopment TIF bonds, we would underwrite
at a fee of $9.00/$1000 for insured bonds and $12.50 for
non-insured and or non -rated bonds.
Additional Fees for Other Services
George K. Baum & Company will pay all its normal
and customary out -of -pocket expenses from the above
fees. Out-of-pocket expenses for out of state travel for
rating and insurance presentations would be charged
at our cost and only with the prior approval of the City.
On any issue we will commit that such direct expenses
would not exceed $1,500 without the City's consent.
We do not anticipate that George K. Baum & Company
I GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928
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PROPOSAL TO City Of Fort Collins
will incur reimbursable expenses for other of our
services that will occur in the course of completing
individual issues for the City. Normal cost of issuance
such as bond and disclosure counsel, insurance, rating
fees, title insurance, POS/OS printing and distribution,
including electronic posting, paying agent, fees of the
City's auditor, CUSIP, DTC, etc., will vary with each
issues size and complexity and are considered the City's
normal expenses to be paid from issue proceeds. Fees
for such services as opinion surveys and special studies
and research provided by George K. Baum & Company
would be determined at the time such services were
requested and at a level mutually agreed.
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