HomeMy WebLinkAboutMunistat Services, Inc. AGREEMENT FOR
MUNICIPAL FINANCE ADVISORY SERVICES
TO THE
TOWN OF SOUTHOLD, NEW YORK
RELATING TO
LANDFILL IMPROVEMENT SERIAL BONDS
(N.Y.S. ENVIRONMENTAL FACILITIES CORP.)
INTRODUCTION
Munistat Services, Inc. was formed in January 1977 and has served as financial advisors to local
governments and school districts throughout New York State, specializing in debt management and
securities offerings. Oar main office is located in Port Jefferson Station, N.Y.; and our Western New
York State office is locat~ in Cheektowaga; NY. Our staff (which includes 9 employees on Long Island)
consists of dedicated and experienced individuals uniquely suited to taking each borrowing from inception
m closing as effieieraly as. possible. Our primary purpose is to perform the technical and administrative
functions required as integral parts of the borrowing pro{ess in coordination and cooperation with our
clients, bond counsel, local counsel and market participants,
Munistat Services, Inc, presently serves approximately 500 clients throughout New York State. We
serve as financial advisor to the cities of Schenectady, Plattsburgh and Dunkirk; in addition, the firm's
clients include 10 counties in the State as well as some of the largest Towns, including Broolchaven,
Smithtown and Riverhead in Suffolk County.
It should also be noted that Munistat Services, Inc. represents more than 50 of the local governments
and school districts on Long Island, including 5 of the I0 towns in Suffolk County (Brookhaven,
Smithtown, Riverhead, Southampton and Southold). We have acted as financial advisor on advance
refunding obligations and private placements as well as on competitive sales of Bonds, BANs, TANs and
RANs. We also have experience assisting our clients in the sale of taxable obligations and revenue and
appropriation-backed obligations, We are members of the New York State GFOA and the New York State
Association of Sebool Bus'mess Officials, and participate in their meetings and seminars, since we feel it
is critical m our clients that we stay abreast of the latest developments and legislation that affect the
issuance of bonds and notes of local governments and school districts in New York State.
The finaneiaI advisox~y services commonly p/'ovided to our clients include:
Prepare financial plans including cost analyses and the evaluation thereof.
Develop marketing plan based on evaluation of market conditions including interest rates and
supply factors.
Prepare and distribute requests for proposals to underwriters, escrow,agents, tender agents,
vet'ific, ation ag~ts and bsnkg for liquidity support (variable rate bonds onIy). Review proposals
and advise client concerning the award of bids.
Prepare the official statement and arrange for the printing and distribution thereof to
underwriters, rating agencies and other appropriate parties.
Submi~ applicaxions and required doenments to Moody's and Standard & Poor's, Advise the
client concerning'presentations to the rating agencies.
Submit applications for bond insurance to various nnmicipal bond insurers. Coordinate the
review process between the client and the respective insurance companies.
Arrange for the issuance of bonds or notes in book-entry-only form through The Depository
Tru~ COmpany. Ptepare and coordinate required documents. Distribute completed documents
to the appropriate parties.
Prepare and coordinate the filing of debt statements, as required.
Coordinate the publication of sale notices in The Bond Buyer and such other publications as
may be appropriate.
Review and verify accuracy of interest rate bids or pricing proposals. Advise the client on the
acceptance and award of bid proposals.
Prepare and distribute closing letter with instruct/om concerning the transfer of funds and
delivery of securities.
Prepare final bond amortization schedules including detailed schedules required for capital
projeet accounting. Distribute consoliOat_M_ schedules to The Depository Trust Company, bond
insurance companies and other appropriate parties.
Provide additional information required by investors, analysts and others after the bonds or
notes are issued,
MUNISTAT SERVICES is committed to providing the highest quality financial advisory service
available to municipalities and school districts in the State. In order to achieve this goal, we work closely
with our client to fully understand its operation -particularIy any special circumstances or limitations.
The firm places special emphasis on its rote as an advisor. We provide a hands on technical service to our
clients. Most of the professionals at MUNISTAT SERVICES have more than 20 years experience: the
knowledge and skills we have gained through the years is brought to each and every assignment and our
client benefits from this experience. MUNISTAT SERVICES believes that a financial advisor must do
more than write official statements and provide bond amortization schedules. The advisor must help the
finance manager develop and implement an effective and efficient debt management program. A financial
advisor must facilitate this process and be a problem solver. And above alt, the financial advisor must be
a communicator who takes the time to be curtain the client clearly understands what the plan is, what it
will accomplish and the basis for the advisor's recommendations. The finance manager bears the ultimate
responsibility for the debt program and must be able to expla'm the decisions to elected officials and the
general public. In order to do our job as an advisor, we must take the time to learn our client's business
including any unique or unusual circumstances that might influence the debt program. Reports must be
reviewed and analyzed, The questions must be asked.
The cornerstone of any debt management program is financial planning and a key element in this
process is financial analysis and cost feasibility. Proper planning requires that the advisor examine
alternate courses of action thereby providing options and flexibility. A thorough understanding of the
client's operations allows the advisor to make reasoned choices among a number of possible and
appropriate options. The following paragraph discusses certain procedures employed to develop the bo.~n_d
smicmre dur'mg the cost feasibility phase of our work. Later sections of this proposal outline methods
used to prepare the official statement and the services which we propose to provide to the Town.
Cost Feasibility - Beret Stzvacture$ ................
Effective cost analysis begins with an in-depth review of the client's operations. MUNISTAT
SERVICES reviews historical performances, current operating and capital budgets, debt history, current
outstanding debt including the cost of servicing such debt, and open debt authorizations. In addition, we
discuss with the client other matters which may affect the way the bond structure is developed. Furore
budgetary constraints or ext~aordinsry expenditures must be considered for their impact on debt repayment
and poss~le implications for credit ratings.
After observing the rules imposed by tho State law, the process of structuring a bond is usually left
to the imagination of the financial advisor. The basic objective of structuring a bond issue is to balance
the financial resources of the issuer with the demands of investors. A rapid payback lowers interest costs
but can also create budgetary strains. Computer programs are used to test various structures and express
the results in terms of the effect on the tax rate. In addition to the new bond costs, a comprehensive
analysis requires that current debt costs, other future borrowings, projected cost savings generated by the
improvement, non-tax revenue sources of repayment and tax assessment trends all be considered.
MUNISTAT SERVICES prepares several amortization schedules using varying assumptions with
respect to term, interest rates and structure. The goal is to develop a bond maturity schedule which has
the lowest average life possible without creating undue pressure on the budget. As a result of this type
of analysis, the borrower generally can repay the debt more quickly while minlmi~g, to the extent
poss~le, the negative effects on the tax rate. Accelerating debt payback based on a well thought out plan
helps to reduce the total interest that will be paid and, all else being equal, generates lower interest rate
bids from underwriters.
With respect to this specific financing, two separate schedules must be pg, e~parad - one that amortizes
any outstanding debt represented by bond anticipation notes previously issued by the Town and a second
schedule which amortizes the new debt to be issued as part of this financing. Both schedules are then
melded into one for purposes of the sale of the bonds to the EFC.
SCOPE OF SERVICES
MUMSTAT SERVICES provides a complete package of finaueial advisory services that begins with
developing a Financial plan and coatinues al~ the seo~rities are sold and delivered. Although the primary
emphasis is on debt management, we routiaely advise our clieuts ou various finaucial matters umcelated
to debt. As your advisor, MUNISTAT SERVICES coordinates all aspects of the financing to ensure that
all deadlines are me~. Because present duties of your staff do uot allow for a lot of time ou this type of
project, we relieve you of this burden. MUNISTAT SERVICES assumes respoas~ility for working w/th
bond counsel, architects and other third party professionals. All of the work done by MUNISTAT
SERVICES is performed by personnel with extensive experience in advisory work. A knowledgeable
advisor will be involved in the entire process from start to finish, You will be kept informed at all times
concerning the stems of your financing.
There follows a summary listing of the services provided by MUNISTAT SERVICES during a
typical engagement.
F~nancial Planning
Assist the Town to develop a financhl plan to size, structure and market its bonds. The plan should
provide alternatives and be flexible in order to accommodate changing circumstances. Services to be
provided to the Town in connection with the financial plan include:.
Confer with Town officials, bond counsel and EFC officials to review the proposed financing.
Determine the amount and nature of the financing, such as new money~ note refunding or
advance refunding. Establish approximate time frame for the financing.
Evaluate tax status of proposed ~nnndng.
Review current operating and capital budgets and discuss budgetary impact of proposed
financing.
Review and evaluate credit related issues, if appropriate. Read current credit reports and
review the Town's current official statement.
Evaluate the use of early redemption or call features.
D~o~/ne op6mal d~ for ~ and interest Fa3cmants, in accordance with~EFC financing
schedule.
Pre-Marketing Activities
Prepare data required for EFC Official Statement from documents and information provided
by the client and other third party sources.. MUNISTAT SERVICES gathers much of the
nec~sary data on site.
Review Official Statement with bond counsel and EFC officials.
Marketing and Sales
In a transaction of this nature, we assist the Town by coordinating the sale of the Town's bonds to
E.F.C., as E.F.C, sells its own bonds to obhain funds for purchasing the bonds of the Town. This requires
maintaining open lines of communication between the Town, E.F.C,, all of~ E.F.CJs alxorneys and
advisors, and the Town's bond counsel. It may also include representing the Town as part of t_he
transaction with E.F.C.'s investment bankers.
After both the Town and E.F.C have sold their respective bond issues, all matters related to the
closing must be coordinated between all parties. Where necessary and appropriate, it is our function to
assist the Town in these mauers.
OFFICIAL STATEMENT - METHOD AND PROCEDURES
THE FOLLOWING DISCUSSION ASSUMES THAT MUNISTAT SERVICES WILL PREPARE
THE TOWN'S PORTION OF THE E.F.C. OFFICIAL STATEMENT, AND COORDINATE THE
REVIEW OF THIS DOCUIv~NT,
MUNISTAT SERVICES will assume respomibility for preparing the Town's portion of the E.F.C.
official statement on behalf of the Town. Th~ representations ~ontalned in the statement, however, are
those of the Town and all disclosure information will be reviewed and approved by the Town before any
materials are released to the public. The ongoing involvement of senior level personnel improves both the
quality and the utility of the official statement. It is an excellent way for us to constantly monitor the
acawacy and consistancy of the documant. This highrdegree of oversight provides timely info~mat/0u on
trends or special developments that effect our client's credit taring from both a positive standpoint as well
as negative one.
An experienced flrmncial advisor will plan and coordinate the e/~tire process of producing the official
statement. The Town will be asked to provide certain inform~on and statistics as well as financial reports
and other selected data. All third party information will be obtained by our firm. MUNISTAT
SERVICES will compile the Town's portion of the E.F.C. official statement including the word processing
thereof. Drafts will be distributed to the Town and its bond counsel for comment and approval.
MUNISTAT SERVICES prepares a very comprehensive official statement for its ch'ents, The
document reflects our commitment tn provide quality disclosure; it includes data which is personal and
unique to the client in addition to standard presentations on legal matters, debt, taxes, etc. A strong
emphasis is placed on providing the kind of information that is not readily available to analysts at the
rating agencies or those employed by the bond underwriters. Providing this information can make a
difference in the bond rating as wetI as improve the competition among Underwriters bidding on the bonds.
An experienced public finance professional writes all of our documents; it is a process that we treat
very seriously. We know what the financial markets expect in terms of disclosure. And, because we
understand municipal operations and the laws affecting those operations, we are able to identify issues that
require disclosure and write about them in clear, understandable language. Since the default of the
Washington Public Power Supply System on certain of its bonds, the adequacy of disclosure for municipal
bonds has received close scrutiny. The Securities and Exchange Commission has issued Rule 15c2-12
which requires underwriters to undertake reviews to satisfy themselves of the nfficial statement's
reasonable accuracy. The SEC has amended Rule 15c2-12 to require underwriters to make certain that
designated issuers are providing ongoing disclosure on an annual basis, A comprehensive official
statement provides the underwriter with all of the information necessary for his review, facilitates the
analysis and improves the issuer's chances of receiving competitive bids. The financial advisor who has
earned a reputation of providing credible official statements will prove w be a valuable asset at a time
when greater emphasis is placed on better disclosure. MUNISTAT SERVICES has a proven track record
of providing such statements.
FEES AND EXPENSF_3~
The charge for our serVices will be $7,500 for this bond issue. These fees do not include out-of-
pocket for duplicating, overnight delivery charges, ere. The fees also do not include other issuing
expens~ such as printing and postage for Official Statements and Notices of Sale; pr'raring of bonds or
notes; fiscal agent fees; bond counsel; rating agency fees, etc.
DATED: December 18, 1997
MUNISTAT SERVICES, INC.
Acknowledged end agreed to this 23rd day of December, 1997
TOWN OF SOUTHOLD, NEW YORK
N~E Jean W. Cochran
Supervisor
TITLE
JEAN W. COCI:IRAN
SUPERVISOR
Town Hall, 53095 tVi~in Road
P.O. ~Box 1179
Southold~ New York 11971
Fax (5t6) 765-1823
Telephone C~16) 7~1889
OFFICE OF ~ SUPERVISOR
TO~ OF SOIz~-IOLD
To: Town Board
From: John Cushman
Date: December 22, 1997
Re: $5,800,000 EFC Loan Application
We are preparing the loan application to New York State Enviromental Facilities Corporation for
financing the $5,800,000 Landfill Closure. Copies of agreements with bond counsel (Hawkins, Delafietd
& Wood) and fiscal advisors (Munistat) need to be submitted with the application. Since we do not have
men agreements with these firms, please consider adopting the fotlOwmg resolutions to put agreements in
place with these firms for this financ'mg:
RESOLVED that the Town Board of the Town of Southotd hereby authorizes Supervisor Jean W. Cochran
to execute an agreement with Hawkins. Detafield ~: Wood for Bond Counsel services at a fee not to exceed
$22,500 (plus expenses) in connection with the $5,800.000 Solid Waste Management District financing, all
subject to the approval of the Town Attorney.
RESOLVED that the Town Board of the Town of Southotd hereby authorizes Supervisor Jean W. Coebran
re execute an agreement with Muinstat Services, Inc. for fiscal services at a f~ of $7,500, plus expenses,
in connection with the $5,800,000 Solid Waste Management District fiuancing, all subject to the approval
of the Town Attorney.
JUDITH T. TEP, axtY
TOWN CLERK
REGISTP~R OF VITAL STATISTICS
MARRIAGE OFFICER
I~CORDS MANAGEMENT OFFICER
-FREEDOM OF INFORMATION OFFICER
Town Hail, $3095 Main Road
P.O. Box 1179
Southold. New York 11971
Fax (516) 765-1823
Telephone (516) 765-1800
OFFICE OF THE TOWN CLERK
TOWN OF SOUTHOLD
;~HIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION WAS ADOPTED BY THE
.SOUTHOLD TOWN BOARD AT A REGULAR MEETING HELD ON DECEMBER 23, 7997:
RESOLVED that the Town Board of the Town of Southold hereby authorizes
Supervisor Jean W. Cochran to execute an agreement with Munistat
Services, Inc. for fiscal services at a fee of $7,500 (plus expenses), in
connection with the $5,800,000 Solid Waste Management District financing,
all subject to the approval of the Town Attorney.
Southold Town Clerk
December 24, 1997
LETTER OF'AGREEmeNT
FOR
CONTI~ I~ING DISCLOSURE UNDERTAKING
BETWEEN
MIYNISTAT SERVICES, INC.
~ TOWN OF SOUTHOLD
SUFFOLK COUNTY, ~EW YORK
Whereas, the Town of Southold, Suffolk County, New York (the "Town") due to the ~ssuanee of certain municqpal
securities (the "Securities") is subjenr To Rule 15c2-12 of the Seenr/tt~s and Exchange Commission. as emended (the "Rule");
and
Whereas, pursuant to such Rule. the Town has delivered to the purchaser of the Securities, in conjunction with the
issuance of such Securities. au Undertaking to Provide Continuing Disclosure (the "Undertaldng"); and
Whereas, the Undarmki~ requires the Toam to prepare an annual statement of certmu emanerared finenciat and
operating data generally consistent with the information contained in the Final Official Statement of the Town prepared in
connection with the issuance of the Securities (the "Annual Information Statement"), as set forth in the Undertaking, and to
submit such Annual Information Statement To each of the Nationally Recogni?ed Municipal Information Repositories the
("NRMSIRs") and to the State Information Depoalt(~ry (the 'SIDW), ff created no later than 180 days after the end of each fiscal
year, commencthg with the fiscal year ending December 3 I, 1995; and
Whereas, the Undertaking also requires thc Town to submit with such Annual Information Statement its audited
financial statements for each such fi,seal year, if such audited financial statements are then available; provided, however, that if
audited financial stamnents are not then available, ~uch audited financial atatemems, if any, shall be delivered to each NP, MSIR
and to the StD~ if cleated, within thirty (30) days after it becomes available but in no event later than the last burliness day of each
succeeding fisenl year; and
Whereas, the Town hereby fte. termines that it is in its own best interests to designate Munistat Services, inc. ~o serve as
its agent for the purpose qf prepay_' ~ the Annual Infonuntion Statement and submitting it to each of the NRMSIRs aud to the
S/D if created; on or before the aforementioned date, together with the audited annual financial statements, if sach audited
finanmal statements are then available; if such authted financial smtementa are not then available. Munistat Sermces, Inc. will file
such audited financial statements in accordance with the undermldng but oiny if such audited financial statements are provided m
Mumstat Services, Inc. not less than I0 days pr/or to the required ill'rog date, as set forth in the Undertaking;
Therefor, the Town hereby agrees m appoint MUnistat Services, Inc. as its designated dissemination agent for the
pnrpos~ of preparing the Annual Information Statement and submitting/t to each of the NRMSIRs and to the SD, if created, on
or .1~ (~'the aforementioned date~ together with the audited financial statmenla, if such audited financial ~m~ents are then
. .available; aud to make available to Mnnistat Services, Inc. all documents and proceedings of the Town requested by M~mi~rt
· Services, Inc. so that it cen prep~.~ ~ such Aimual Infornmtion Statemont end submit k to esch of the NRMS1P, s mxt to theStD~ if
;rmted, on or before the aforemelrdofied date, together with ~he audited financial statements, if such audked ~nnncial stattlments
are then~avallabl¢; and
· It ia eXpm~JY und~erstood bY Munistat Services, Inc. end t~e Town that this. Agreement relates only to the preparation
and ~S~. b~asion o~f thc Anm/aItcformafion~Docmnent. enc~ to the submission of audited finencial statemenia, as sui f0/edi/n ~
Undtxtaking ~md no~Io Ihe timely JUbmission of notices of mater/al events or the monitoring of such sitnations' ffomlime to time
as ra~ be.neg, esm~ to comply vaffi eny netiffcat~on reqmrement regarding such material events, which shall b~ the sole
responsibility of~ae Tovau mid
~t ~. ;c~ s, In~. hereby agrees to commit its physical facilities and personnel to whatever extent noeessary in
order t~ ita o[5~f~ to the To}vn as its designated diesem/nafion agent in order to ensure that the. Town isin compliance
with thaierms m/~ho~ ~ ~ ns'of the Undertaking with respeet to the. Annual Information Statement; and
:in ~cons~Lde~og where0L the .To~wn. hereby agrees to pay Munistat Services, Inc. the sum of $3,500.00, each year,
commenc~ng~)tie ffsl~l ,Year begmmng Jenuary 1, 1996.
Acknowledged end agrced to tiffs llth day of Inne, 1996.
Munistat Services, Inc.
Robert F. Sikora
President
Town of Southotd, N.Y.
Town Supermsor
JUDITH T, TElq~Y
TOWN C! ,~H~
REGISTRAR OF ~'TAL STATISTICS
MARP~IAGE OFFICER
'RECORDS I%fua_AIAGEMENT OFFICER
FREEDOM OF INFORMATION OFFICER
Town Hall. 53095 Main Road
P.O. Box 1179
Southold, New York 11971
Fax (516) 765-1823
Telephone (516) 765-1800
OFFICE OF THE TOWN CLERK
TOWN OF SOUTIqOLD
June 14, 1996
John J. Durcan, Vice President
Munistat Services, Inc.
12 Roosevelt Avenue
Port Jefferson Station, New York 11776
Re: Continuing Disclosure Undertaking
Dear Mr. Durcan:
Enclosed is the executed Letter of Agreement for Continuing Disclosure
Undertaking between Munistat Services, inc. and the Town of Southold.
Very truly yours,
Judith T. Terry
Southold Town Clerk
Enclosure
cc: Sr. Accountant Cushman
JUDI'i'It T. TERRY
TOWN CLERK
REGISTRAR OF VITAL STATISTICS
MARRIAGE OFFICER
RECORDS MANAGEMENT Oi~FICER
FI~EEDOI~[ OF INFORMATION OFFICER
Town Ha]l, 53095 Main Road
P.O. Box 1179
Southold, New York 11971
Fax (516) 765-1823
TeIephone (516) 765-1800
OFFICE OF THE TOWN CLERK
TOWN OF SOUTHOLD
THIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION WAS ADOPTED BY THE
SOUTHOLD TOWN BOARD AT A REGULAR: MEETING HELD ON JUNE I1, 1996:
RESOLVED that the Town Board of the Town of Southold hereby authorizes
and directs Supervisor Jean W. Cochran to execute a Letter of Agreement
for Continuing Disclosure Undertaking between Munistat Services, Inc. and
the Town of Southold, thereby designating Munistat Services, Inc. as the
Town's designated dissemination agent for the purpose of preparing the
Annual Information Statement and submitting to each of the Nationally
Recognized Municipal Information Repositories and to the State Information
Oispository; and the Town agrees to: pay MunisIat Services,' Inc. the sum
of $3,500.00, each year, commencing with fiscal year beginning January
1, 1996; charx~e to be made to A.1310.4.500.100, Accounting & Finance,
Bonding Fees g Bond Counsel.
Judith T. Terry
Southoid Town clerk
June I2. 1996
UNISTAT SERVICES, INCo
12 Roosevelt Avenue
Port Jefferson Station, New York 11776
Telephone: (516) 331-8888
Fax: (516) 331-8834
June 4, I996
lotto Cushman
ToW~ Comptroller
Town 9f Southold
Main Road
$ontholch lqY 11971
Re: Comimfing Disclosure Uudertaking
Dear John:
In accordance with Securities and Exchange Rule 15c2-12, as revised (the "Rule"), as of July 3, 1995, undemaSters cam
not purchase or sell municipal securities unless they have detennined that the issuers of such municipal securities have agreed to
provide annually for the benefit of their bondholders certain financial and operating data ~ well as audited financial statements, ff
any, to each Nationatty Recognized Municipal Information Repoalto~ CNRMSIR"] and to the State Information Depoi~-g
('~;SID"), if created. Pursuant to such requiremem, the Town has executed and submitted to the purchaser of its most recent bond
issue a d, oanment generally referred to in the Rule as an "Undertaking" as part of the legal proceedings whi6h accompanied the
dlosing~'or sudabondissuc. The Undertaking= which coustitutes a contract between the Towa and the holders fromtime totime
of the bonds, obhgates the Town to provide such annual information and audited financial statements by a certain date each year,
for as long as the bonds are outstanding. Failure to comply with the terms of the Undertaking could have significant negative
consequences for the Town, nol the least of which would be reflected in its access to and reception by the investment community
for future capital prdjeot and cash flow financ'mgs.
As we have discussed, in recognition of such obligation and pursuant tc the Rule, we are submitting herewith two eopaes
of our Letter of Agreement to be appointed by the Town as its designated dissemination agent for purposes of complying with its
contractual obligation to the bondholders with respect to continuing disclosure as set forth in the Undertaking. It should be noted
that this Agreement does not relate to the additional requirement in the Undertaking that the Town provide timely notice of
material events go each NRMSIR and the Manicipal Securities Rulemaking Board and to the SID, if created which shall be the
sole responsibility of the Town.
Please have the Supermsor sign one copy of, the Letter of Agreement and return it to us as soon as possible se that we
can begin assisting the To~vn in complying with its obligations pursuant to the Undertaking in an orderly and efficient fashion.
We look forward to our continuing relationship with respect to this matter.
With kindest personal regards