SUBJECT
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Consideration to ratify the extension of the Estrada Hinojosa & Company Inc., of Dallas, Texas previous contract from September 30, 2023 through June 9, 2024, with no outstanding payments owed, and to award a new five year contract for financial advisory services for the City of Laredo and approval of the regulatory requirement regarding disclosures as attached in Exhibit B of the contract. Financial advisory services are based on the size of the debt issuance sold and are paid from said proceeds. The new contract period is from June 10, 2024 through July 31, 2029. Funding for these services will be available from proceeds of the debt issuance.
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PREVIOUS COUNCIL ACTION
On July 12,2016 a five-year contract was awarded to Estrada Hinojosa & Company for Financial Advisory Services.
On August 2, 2021 a two-year contract was awarded to Estrada Hinojosa & Company for Financial Advisory Services and on July 31, 2023 City Council approved a contract extension from August 1, 2023 through September 30, 2023.
BACKGROUND
The City of Laredo employs Financial Advisors to coordinate the issuance of bonds and advise the City on matters related to debt issuance. The firm of Estrada Hinojosa has been the Financial Advisor for the City of Laredo since 1996. The proposed contract includes increases reflected in Appendix A “Compensation”. The contract also includes Exhibit B “Disclosure Statement Required by Municipal Securities Rulemaking Board” and “Disclosure Statement Required by the State of Texas”.
COMMITTEE RECOMMENDATION
None.
STAFF RECOMMENDATION
recommendation
Staff recommends the approval of a five-year professional service contract with Estrada Hinojosa & Company Inc., for Financial Advisory Services.
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Fiscal Impact
Fiscal Year: 2024
Budgeted Y/N?: N
Source of Funds: Bond Proceeds
Account #: Various
Change Order: Exceeds 25% Y/N: N/A
FINANCIAL IMPACT:
In consideration for the service rendered by Estrada Hinojosa, the fee for financial assistance, either grant proceeds or loan proceeds, will be as follows:
Quarterly draw - A draw of $42,000 will be assessed in arrears on a quarterly basis for services provided to the City. Upon successful completion of a bond financing, the quarterly draw will be credited toward the fee assessed for financial advisor services based on the fee schedule below:
Base fee - Any Issue - $4,750
Plus $ 21.50 per $ 1,000 up to $ 500,000 Or 15,500 for $ 500,000
Plus 12.50 per 1,000 next 500,000 Or 21,750 for 1,000,000
Plus 3.00 per 1,000 next 4,000,000 Or 33,750 for 5,000,000
Plus 2.00 per 1,000 next 5,000,000 Or 43,750 for 10,000,000
Plus 1.25 per 1,000 next 10,000,000 Or 56,250 for 20,000,000
Plus 1.00 per 1,000 anything over 20,000,000
For any financial assistance, either grant proceeds or loan proceeds, obtained from a State or Federal Agency i.e. TxDOT, TWDB, RDA, FTA it is understood and agreed that we will charge the amount shown above plus a 40% additional charge.
For Special Project Bonds, such as Sales Tax or International Bridge Revenue Bonds or Cash Defeasances, it is understood and agreed that we will charge a minimum of $20,000 or $0.625 per $1,000 of Bonds.
The Company will bill the City for each issue of Debt Instruments an amount which will include the fee calculated on the above schedule as well as costs and expenses included in Appendix A-“Control of Fees and Expenses”