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08-14-2023 Work Session Minutes
ST A TE OF ALABAMA COUNTY OF BALDWIN )( )( The City Council met in a Work Session at 4:00 p.m., Fairhope Municipal Complex Council Chamber, 161 North Section Street, Fairhope, Alabama 36532, on Monday, 14 August 2023. Present were Council President Jay Robinson, Councilmembers: Jack Burrell (arrived at 4:06 p.m.), Corey Martin, Jimmy Conyers, and Kevin Boone, Mayor Sherry Sullivan, Attorney Marion E. Wynne, and City Clerk Lisa A. Hanks. City Attorney Marcus E. McDowell was absent. Council President Jay Robinson called the meeting to order at 4:06 p.m. The following topics were discussed: •The first item on the agenda was the Presentation on the Scope of Work for the HUD/EDA Grant Project -the Building (K-1) Redevelopment to house HATCH by the K-1/HATCH Design Team. Public Works Director Richard Johnson introduced Design Team members Nicholas Gray from Thompson Watermark and Rebecca Bryant from Watershed. Mr. Johnson said Baldwin County Economic Development Alliance received a $750,000.00 HUD grant and the City of Fairhope received $2,500,000.00 Federal grant on behalf of BCEDA for HATCH with a match of $650,000.00 from Congressman Jerry Carl. He said the City has paid for the asbestos abatement; Phase 1 is demo and brand new roof; and Phase II will be HATCH building. Mr. Johnson said we must keep historical streetscape and building. He said we will demo South wing to match North wing; the K-1 building would be 18,500 square feet; and the notice to proceed by July 6, 2024. Nicholas Gray reiterated we must retain the historic view from Church Street; and he explained roof and building. Rebecca Bryant commented the stormwater will be easier to handle; and it ties together the buildings. She said there will be a landscape entry for HATCH and courtyard. Ms. Bryant stated they would use FEEF water conservation and low impact developments. They discussed a Performing Arts Center and multiple sizes and locations; and said we are showing more than HATCH for future improvements and possibilities. Councilmember Burrell commented he likes the HATCH plan and it looks great. He said both symmetry and courtyard are good. He stated we need to debate size of Performing Arts Center. In principal, Councilmember Burrell said he likes the site plan and told the Team they get an A+; and commented they did great work on this. Councilmember Martin questioned the parking deck and size for Performing Arts Center. He said reclamation is good for kids. He said this is very exciting and thanked the Team for their work. Councilmember Conyers stated he was excited for moving forward; and said he too liked the site plan. He said this is great for HATCH. Monday, 14 August 2023 Page -2- Councilmember Boone said he was very pleased with site plan and it is very well done. Council President Robinson stated the Team has done a great job; and the historical fa9ade kept. Mr. Gray stated from 2019 up to now, significant damage has been done. Lee Lawson from Baldwin County Economic Development Alliance addressed the City Council and thanked the Design Team, Mayor, and Councilmember Boone for the work they have done. He said we will keep historical preservation while building HATCH. He also thanked the City Council for their help with HATCH. •The next item on the agenda was the Introduction to PFM Financial Advisors, LLC by City Treasurer Kim Creech. Joshua McCoy and Marcie Lewis introduced themselves to the City Council. Mr. McCoy commented since 1998 their company has been number one in the nation. He said they sat down with Ms. Creech and Mayor Sullivan to go over finances; and see what your goals and objectives are along with your risk tolerance. They explained services with PFM; and commented a retainer would be comprehensive for the City of Fairhope. Councilmember Burrell questioned annual total; and use of local banks and markets. Mr. McCoy explained one-time transaction. Ms. Lewis said we have a broad list of banks for bidding. Councilmember Conyers asked if one-time or retainer best for the City. Ms. Creech replied that a retainer and gave examples why it is better. •Discussion of Gas Tax was next on the agenda and presented by Ms. Creech. She said these would be restricted funds for resurfacing roads. Councilmember Burrell commented just be cause everyone else taxes mean we should tax. Council President Robinson said just taxing does not agree; and we have $900,000 plus on the agenda tonight. Councilmember Burrell said citizens do not want a tax. Councilmember Martin said it is a good idea and gives back to the community three-fold. Mayor Sullivan read the new law regarding what the funds could be used for. •Council President Robinson announced that the Fairhope Junior Varsity play on Monday evenings and said he and Councilmember Martin have sons playing and Councilmember Conyer's daughter is a cheerleader. He asked the City Council to at least consider moving the next meeting from Monday, August 28, 2023 to Tuesday, August 29, 2023. Council President Robinson asked the City Council to look at their schedules for the other dates. Councilmember Burrell suggested moving the meetings earlier in the day. City Clerk Lisa Hanks addressed the City Council and mentioned Public Hearings and date and time published for same. Councilmember Conyers said he did not mind moving earlier in the day. The consensus of the City Council was to possibly move earlier in the day. Planning Director Hunter Simmons asked for the City Council to vote on moving from Monday night to Tuesday night. •Mayor Sullivan and City Treasurer Kim Creech began the General Government Budget Discussion and Capital Improvements. Mayor Sullivan asked for help tweaking the budget; and she mentioned there are projects to tidy up and complete. Councilmember Conyers questioned recreation grant for fitness. Mayor Sullivan said the $80,000.00 in grant funds ($40,000.00 from Point Clear Rotary and $40,000.00 from Fairhope Single Tax Corporation) is correct but total project is around $110,000.00. Councilmember Burrell said that he has a concern with Golf Grounds and funding; and commented he is not seeing a return on investment. Monday, 14 August 2023 Page -3- Mayor Sullivan told the City Council that on the last page will be rollover and FY2024 budget requests. She said some of the projects will be completed this year so those will be removed. •Councilmember Martin gave an update on the Fairhope Environmental Advisory Board. He said they discussed osprey projects, Boy Scouts reef project, bull shark catch and release, educational signs for fish, and reclamation of water. •Council President Robinson mentioned the Historic Preservation Ordinance that will soon be brought before the City Council. Council President Robinson briefly went through the Agenda Items and who would explain if needed. •Public Works Director Richard Johnson addressed the City Council briefly explained Agenda Item No. 23; and answered any questions if needed. He explained in depth Agenda Item No. 14: the road paving bids; and answered any questions if needed. Council President Robinson said all of these need to be done; and we cannot cherry pick. Councilmember Burrell agreed that we cannot cherry pick. There being no further business to come before the City Council, the meeting was duly adjourned at 5:56 p.m. inson, Council President ---- City Clerk r··-··- ··-··-··-.. J UniveJBity of South Alabama Baldwin County Performance Centar St. James Avenue ···-··-··-··-··-··-··-··-··-··-··,:: ··-··-··-··-·•-·· Surface Parking 55spaces .£.•·· ••• � !:\ r-· -·-·· •I � f ,. ___ ...... r I •I ': I .•�I : I ------,� '•l'r·-··-·--·--C:: \ •..ll"'i---�--•..•• ! '--··-;-.-rr•·r. ·.;:-··--·I '... . .· . � .... . . . ---�-r .. --------:-�' ·.. ........ ..... ' ..... . ·. ... ,· .. # .... • . . . ---� ... . 7: Parking Deck 230+ spaces • • ·• ...... . FAIRHOPE CENTER FOR THE PERFORMING ARTS K1 CENTER MASTER PLAN Parking Deck 230+ spaces 1: 900 1N Main Level Demollah Portion of South Wing that Is oftl' • Basement 1,0009' I r< •• • '________ ,, c.mollsh Exlslln9 Gym ··-·· ' ..... .,· .. ., � . ----7'• • • • • • •••• Basement Demollsh a■sllftlllnt 1,000sf Hatch Roof Plan Demollsh a ... ment 3,000sf Existing Crawlspace Off" n:-n:r IIU¥41kW, ...... ,,..,_,._ .. J Existing K-1 Elevation l!Mf""J!'!IOII![ IIUVA'i'IOlf, ....,._,,..,._,•-v1 Demolished Now Hip Roof to Replace Old Flat Roof IAff' fF"°'"[·11U¥4ftOI(, ........ ,.-....... 1 Proposed Hatch Elevation ...' . :.--e:--. �Hf!. ir:lifi]fil Existing K-1 Elevation Demolished Demoll1h Portion of South Wing that Is over a Basement illlUTII. IDPl'-al!ICI -...maw: ��-�!_-� . Proposed Hatch Elevation Now Hip Roof to Replace Old Flat Roof t .-.r- ____ ..,:. __ Now Roof New Roof DRAFT Fairhope, Alabama Introduction to PFM Financial Advisors LLC PFM Financial Advisors Alabama Team @PFM Huntsville, AL mccoyj@pfm.com Memphis, TN callenderr@pfm.com Huntsville, AL lewism@pfm.com Brooke Baldwin Huntsville, AL baldwinb@pfm.com 2 0 PFM Financial Advisors LLC Overview PFM's #1 Rankin s for 2022t � -Overall -Tax-exempt •Taxable -Negotiated -Revenue 1 � General Obligation -Bank Qualified -New Money -Private Placement -Refunding -Variable Rate Sector -Primary/ Secondary Education -Transportation -Public Power -Water, Sewer & Gas -State Appropriation •Industrial Development Re ion Midwest -Southeast -West ©PFM Nation's #1 ranked Independent Financial Advisor+ •Leading financial advisor to state and local governments in the nation and advised on over $59 billion of bond issuance in 2022. * 2022 Full Year Overall Long Term Municipal New Issues Mlniclpal Filancial Mvtsoly Rnklg-FIA Credi m Each Filanclal Pdvlsor Soua:lprm PFM Pti>lic ReSOt.rCeS HllbpSeaJ'lties Frasca & Associates Acacia Fin Groll) Estrada Hlmpsa Piper Sardler Backstrom McCarley Morague DeRose S)'C&more Ad...tsors # issues $ In milons 652 145 614 �--28,350 46 20,803 108 13,170 53 11,m 186 8,672 22 7,402 27 7,038 13 8,259 �: lpf90 as of December 31, 2022 46,856 59,813 PFM •• Arat Place Ranking Overall Long Term 1998-2022 Year "-r AfflM'lt IUTt>erd (n9ans) Traneec110n8 2022 59,813 652 2021 71,889 951 2020 78,180 924 2019 76,313 1,005 2018 63,557 796 2017 84,288 928 2016 94,880 1,193 2015 81,973 1,042 2014 70,048 855 2013 88,045 824 2012 79,032 957 2011 58,072 804 2010 90,501 1,067 2009 87,986 984 2008 69,794 842 2007 65,301 779 2006 53.sn 803 2005 51,123 979 2004 43,893 892 2003 "48,013 981 2002 37,904 902 2001 35,111 905 2000 21,003 585 1999 12,265 410 1818 13,983 424 Source: llpnto 3 0 Dedicated Professionals •Our national presence includes 31 locations across the U.S., with a local office in Huntsville to support Alabama clients. •This proximity gives us a better understanding of the local issues and problems affecting our clients, as well as providing the day-to-day contacts needed to properly meet their needs. Our national reach allows us to access new ideas and best practices. ©PFM 4 PFM's Alabama Practice •Operated an Alabama financial advisory practice since 2001, providing an intimate understanding of the public finance and debt issuance process for Alabama issuers •Have advised on 61 transactions totaling over $6 billion of bonds issued in Alabama, since 2017 •Maintains vigilance over state legislative issues affecting local public finance issuers •Awarded Innovative 2022 Deal of the Year by the Bond Buyer for serving as financial advisor to the Alabama Federal Aid Highway Financing Authority •Services provided to AL clients include: •debt affordability analysis • capital improvement planning • credit rating management • budget consulting • transaction management • pricing advisory CPFM PFM is a major participant in the Alabama public finance industry Select Alabama Issuers that have chosen PFM* State of Alabama Huntsville, City of Hunts ville Utilities Auburn, City of --. Auburn Water Works Board Auburn University Tuscaloosa City Schools US Space and Rocket Center Mobile County Gulf Shores Utillties Huntsville Solid Waste Disposal Authority City of Opelika --. Opelika Power Board Huntsville Madison County Airport Authority University of North Alabama Lee County Board of Education University of South Alabama University of Alabama in Huntsville Tuscaloosa County Road Improvement Commission Mobile, City of Muscle Shoals Electric Board Madison County Communications 1 District * Note: Representative list of PFM's past and current financial advisory clients 5 0 Premier Water and Wastewater Practice •Unmatched water and sewer expertise with a nationa l breadth of experience •Our financial advisory team has served as financial advisor to water, wastewater, and infrastructure revolving funds in over 20 states and territories •PFM employs personnel fo r water and sewer clients that includes prior CFOs of utilities, rating analysts, investment bankers, and federal employees •PFM has been the top-ranked fin ancial advisor for Water, Sewer, & Gas Long-Term Municipal New Issues for 21 of the last 22 years •PFM expertise extends to all as pects of utility finance •Debt structuring and optimization •Credit expertise and rating matters •Innovative funding op tions -SRF, public-private funding, federal initiatives •Regulatory and Environmental Compliance -financing of Consent Decrees •Financial Modeling (Synario) CPFM 2022 Full YHr Wattr & Sewer Long Term llunldpal New ,_,es llri:11111 Finmml Adraory Ranaig • Ful CNdl to &en finmlcel AdrllOr Source:.., PPM Hlllap SecuritiN Public RHaurcn Frasca & M•rxi ... Baird Lamont Flnenctsl Manigue 0eROH Masllrscri AIMscn Hobbs,Ol,g Spec:iellad Pub Fin •••-lnneoia 03 11 118 5 87 .. 51 --- ------ - - - - 901 138 648 59e 1,298 2,315 1,183 3,118 1,711 6 PFM's Approach to Addressing the Requested Scope of Work • • PFM would work with the City and its bond counsel to draft a recommended Plan of Finance based on several factors, including: Criteria - Cons iderations -----1 Financing Goals & Objectives & Existing Bond Covenants Risk Exposure Efficiency Market Conditions �PFM •What are the City's financing goals and objectives?•What are the existing borrowing covenants contained in existing bod documents and potential legal constraints (I.e. Additional Bond Tests requirements)•General Obligation vs. Revenue secured obligations•Days cash and liquidity policy considerations •What are the potential budgetary risks of the financing structure that may impact cash flow, ability to service new debt and customer rates and charges , etc.?•What are the potential liquidity risks of the financing structure?•Fixed vs. variable rate considerations •Based on expectations for future rates, is it better to pre-fund projects or finance them as expenditures are incurred via short-term financing, internal reserves or other sources?•Is it better to fund all at once for synergies on total cost of issuance? Or are multi tranche financings or phased financings more appropriate?•Bank loans vs. public market vs. federal funding (i.e. SRF) considerations •Are we in a high or low interest rate environment and where are we in the interest rate cycle? How does the current inverted yield curve impact financing considerations?•What are relative value ratios for tax-exempt bonds and treasury rates? 7 Why PFM? Proven performance delivered by local team that is committed to our clients and offers state of-the-art approach to partnering wit h clients to transform their world. 0 PFM's Proposed Engagement Options •The City would be a valued client for PFM and the firm would be fully committed to providing a senior level team,including team members from our national utility practice, to the City •PFM's goals is to be considered an extension of staff, serving as a strategic partner in ev aluating and assisting the Cityif your short-and long-term capital planning, management of debt portfolio and other initiatives. We are agnostic as to how we are engaged but offer the following engagement options: I Option 1 - One-Time Enga gement I Phase I: Plan of Finance Recommendation •1x proposed fee of $15,000 Phase 2: Tran saction Execution •Bank Loan -$0.85 per $1,000 •Public Market -$1 per $1,000 •Fee minimu m of $30,000 and maximum of $75,000 •Phase 1 fees would be credited towards transactionfee ®PFM ----- Option 2 -Ongo,ing Relationship -- -------- - Annu al Retainer •Annual retainer of $20,000 billed quarterly• •Includes Plan of Finance Recommendation Transaction Execution •Bank Loan -$.75 per $1,000 •Public Markets -$0.85 per $1,000 •Fee minimum of $20,000 and maximum of $75,000 *See Appendix for additional Scope of Services provided under a retainer 9 Sample Fees •The table below illustrates the fees the City would incur with either engagement option and at various borrowing types and amounts •Option 2 includes a full year of services that include the Plan of Finance assignment and assumes a single transaction in the first year Transaction Sale 1 x Engagement Retainer Engagement Size Type Plan of Transaction Fee Annual Annual Transaction Annual Finance (less Plan of Total Retainer Fee Total Finance fee) $25 Million Bank $15,000 $30,000-$15,000 $30,000 $20,000 $20,000 $40,000 Loan $25 Million Public $15,000 $30,000-$15,000 $30,000 $20,000 $21,250 $41,250 Markets $45 Million Bank $15,000 $38,250-$15,000 $38,250 $20,000 $33,750 $53,750 Loan $45 Million Public $15,000 $45,000-$15,000 $45,000 $20,000 $38,250 $58,250 Markets @PFM 10 Appendix -Additional Services a.nd Materials PFM's Overall Partnership Approach* PFM considers ourselves an extension of our clients' staff, taking a client centric approach. We work alongside the team to advise, assist, and educate •Ongoing Policy Development •Develop and review policies based on current practices along with the best practices within the industry. •Examples: Debt Management, Pay-Go Funding, Cash Management, Credit IRating, etc. •Capital Budgeting & Debt Capacity/Affordability •Multi-year capital planning with functionality to project revenues, expenditures and the impact of capital projects and operational changes. •Debt Capacity analysis that factors in affordability and credit/rating metrics and ratios. •Debt Portfolio and Rating Management •PFM prepares a detailed debt profile for each of its clients and uses it to monitor for refinancing opportunities and track early redemptions. •PFM uses rating scorecards developed in house and modeled in line with rating agency criteria and use them to understand the credit strengths and weaknesses in order to help clients better understand the rating and the impact of proposed changes on the rating •Other Services as Requested* -- Debt Portfolio/Rating Management Policy Development *See proposed contract for full scope of services included under retainer engagement©PFM ~- Capital Budgeting Debt Capacity/ Affordability 13 PFM's Transaction Advisory Services During any financing transaction, PFM serves as the City's fiduciary to ensure best execution •New Issuance Analysis & Execution/Transaction Management •Be an active member for the development of the financing plan and provide recommendations on most efficient type of financing •Review bond/loan documents , including the Preliminary Official Statement, Term Sheets, Loan Agreement, etc. (If necessary) •Coordinate the credit rating agency presentations and discussions •Negotiate appropriate compensation for the Underwriter/conduct competitive sale •Provide a final report to the City detailing all the final Interest rates, associated costs and net savings amount realized from any refunding •Coordinate with Bond Counsel to assist in facilitating a smooth closing •Continue to monitor the City's outstanding debt for any refunding opportunities •Bond Pricing Analysis •Negotiate the Underwriter's proposed interest rates on the bonds at pricing •Use current and historical market rates to ensure fair pricing is received •Dedicated Pricing Group provides market expertise on par with any Wall Street investment bank. On average, PFM's Pricing Group Is in the market 3 times a day. ©PFM Transaction Management --------- Pricing Analysis/ Benchmarking -- New Issuance Analysis/ Execution 14 0 PFM's Dedicated Pricing Group •PFM's Pricing Group: •Provides centralized access to market information and trends •Leverages our knowledge firm-wide for our clients' benefit •Cultivates profess ional peer-to-peer relationships with underwriting desks •PFM utilizes an in-house proprietary pricing database that contains detailed pricing information of every single bond issue that has priced in Alabama year to date. ©PFM •This includes both PFM advised, and non-PFM advised bond transactions 15 Treasury Consulting Services* Choosing a banking provider and treasury services often requires sig nificant staff time and experie nce. How do you know you're using the appropriate services and getting the most value for cost? PFM's treasury consulting services can improve treasury operation s and simplify the process of rebidding banking services. ECONOMIC •Reduced banking fees •Higher earnings credit rates and cash rebates on commercial cards •Reduced deposit float •Improved liquidity management OPERATIONAL •Identification of inefficiencies, costly processes, and possible control problems •Implementation of best practices •Evaluation of new banking technologies Over the last 5 years, our clients have achieved average fee savings of 43% through competitive procurements for general banking services. *Subject to separate fee agreement @PFM We work with our clients to develop a customized scope of work based on needs, objectives, and budget. •Organizational treasury review with report on findings •Banking services RFP creation and assistance •Service transition and implementation support •Ad hoc engagements including bank ne gotiation assistance and fee analysis 16 pfm.com DRAFT 0 For the services described in Exhibit A, PFM's professional fees will bepaid as provided in Exhibit B. All fees shall be due to PFM within thirty (30) daysof the date of invoice. In addition to fees for services, PFM will be reimbW"Sed fornecessary, reasonable out-of-pocket expenses incurred, including, but not limitedto, travel, meals, lodging, telephone, mail, and other ordinary or extraordinarycosts such as for graphics, printing, document production (including as required bya subpoena or other legal document or order), data processing and computer timewhich are incUJTed by PFM. Upon request of City, documentation of suchexpenses will be provided.This Engagement Letter shall be eff�\i� ftom August� 2023 untilOctober 31, 2023.PFM shall not assign or transfer any interest in this Engagement Letter orsubcontract any of the work perfonned under this Engagement Letter without theprior written consent of the Citl-41 provided that PFM retains the right to enter into asale, merger, internal reorganizatiQA or similar transaction involving PFM'sbusiness without any such consent.All informatiO'I\ data, reports, and records in the possessi� of the City orany third party necessary for carrying out any eervices to be performed under thisEngagement Letter ("Datl''} shall be furnished to PFM. PFM may rely on the Datain connectiOJl. with its provili.on of the se,vjces under this Engagement Letter andthe provi4tr �f shall remain · 1 ~ • responsible for the adequacy, accuracy andcompleteness of such Data.All notices and other communication required under this EngagementLetter will be in writing .. may be sent by certified mail, return receipt requested,by nationally recognized courier, with written verification of receipt, or byelectronic mail. Notices shall be addressed to the party for whom it is intended, atthe addresses on the first page of this Engagement Letter.All materials, except l,mctioning or dynamic financial models, prepared byPFM;m_ursuant ex'filR,ively to this Engagement Letter will be the property of theCity. Subject to the preceding exception, upon termination of this EngagementLetter, PFM will deliver to the City copies of any and deliverables pertaining tothis Engagement telter.The following employees of PFM will provide the services set forth in thisEngagement Letter: Joshua McCoy, Marcie Lewis, Brooke Baldwin, RicardoCallender, and Greta Englert. PFM may, from time to time, supplement orotherwise amend team members. The City has the right to request, for any reason,PFM to replace any member of the advisory staff. Should the City make such arequest, PFM will promptly suggest a substitute for approval by the City.PFM will maintain insurance coverage with policy limits not less than asstated in Exhibit C. Except to the extent caused by its willful misconduct, bad faith, gross negligence or reckless disregard of obligations or duties under this Engagement Letter, PFM shall have no liability to any party under this Engagement Letter. PFM, its employees, officers and representatives at all times will be independent contractors and will not be deemed to be employees, agents, partners, servants and/or joint venturers of City by virtue of this Engagement Letter or any actions or services rendered under this Engagement Letter. Nothing in this Engagement Letter is intended or shall be construed to give any person, other than the parties hereto, their successors and permitted aigns, any legal or equitable rights, remedy or claim under or in respect of this Engagement Letter or any provisions contained herein. In no event will PFM be liable for any act or omission of any third party or for any circumstances beyond PFM's reasonable control including, but not limited to, fir�. tood, or other natural disaster, war, riot, strike, act of terrorism, act of civil orttilitary author1f£ 80ftware and/or equipment failurt; computer virus, or fai lriterruption of el�, telecommunications or other utility services. This Engagemee.t Letter shall be construed, enforced, and administered acconling to the laws of the State of Alabama. PFM and the City i� that, should a disagreement arise as the terms or 11>forcement of any provision of this Engagement Letter, each party will in Jood faith •empt to resolve said disagreement nrior to pursuing other action. lJSi,1:ngagement Letter represents tri.lQtire agreement between City and PFM amt19ay not be amended or modified except in writing signed by both parties. For the sake if clari!)i any separate agreement between City and an affiliate of PFM or a third party referred or introduced by PFM and/or designated by the City shall not in any way be deemed an amendment or modification of this Engagement Letter. The, iPvali� whole' or in part of any provision of this Engagement Letter shall not voti • affe"t the validity of any other provision. Please have an aut&a;zed official of the City sign a copy of this Engagement Lette and return it to us to acknowledge the terms of this engagement. This..gagement Letter may be signed in any number or counterparts, eaol\lt which shall be an original and all of which when taken together shall constitute one and the same document. Sincerely, PFM FINANCIAL ADVISORS LLC By: __________ _ Joshua McCoy CITY OF FAIRHOPE, AL 0 EXHIBIT A SCOPE OF SERVICES 1.Services related to the Plan of Finance recommendation for the City's upcomingwater projects: •Review current debt structure, identifying strengths and weakn� of structureso that future debt issues can be designed to maximize ability to finance futurecapital needs. This will include, but not be limited to, reviewing existing debt forthe possibility of refunding that debt to provid9 the City with savings.•Analyu future debt capacity to determine, theQty's ability to raise future debtcapital.•Assist the City with the developmtt(lt of the City's financial planning effortsrelated to the water project by assessing capital needs, idmtifying potentialrevenue sources, analyze financing�ternatives such as pay-as-you-go,lease/purchasing, short-term vs. long-term fin,dleings, assessments, user fees,impact fees, devel�tributions, public/private projects and grants, andprovide analysis of �ive as required as to the budgetary and financialimpact.•Review the reports of accountants, i�dent engineers and other projectfeasibility consultants to ensure that such studies adequately address technical,economic, and financial risk factois effecting thetnarketability of any proposedrevenue debt issues; Jrovide bond market assumptions necessary for financialprojectionf included in these studies; attend all relevant working sessionsregarding the preparations,,aview M4i<>mpletion of such independent studies;and provide written comments-* recommendations regarding assumptions,analytic methods, and conclusions contained therein.•.,\ttend meetingstyith City's sta� consultants and other professionals and theCity.•Assist the City inreferendums.aring financial presentations for public hearings and/ or •Analyze financial and economic factois to determine if the issuance of debt �sappropriate.•Develop a financing plan in concert with City's staff which would includerecommendations as to the timing and type of debt to be issued.•Advise as to the various financing alternatives available to the City. 0 •Develop alternatives related to debt transaction including evaluation of revenuesavailable, maturity schedule and cash flow requirements.2.Services Related to Debt Transactions (Includes short tenn financing� notes,loans, letters of credit, line of credit and bonds); provided that if the transaction is competitive, the services of the financial advisor will be modified to reflect that process. Upon the request of the City: • • • • • • • • • • Assist the City by recommending the best method of sale, either as a negotiated sale, private placement or a public sale. In a pul,ti& sale, make recommendation as to the determination of the best bid. In th� event of a negotiated sale, assist in the solicitation, review and evaluation of any bt\restment banking proposals, and provide advice and infonnation necessary to aid in such selection. Evaluate benefits of bond insuranAO �or security insurance for debt reserve fund. If appropriate, develop credit ratlJio,esentatip,and coordinate with the City the overall presentation to ilting agencilt Review underwriter's proposals and submit a written analysis of same to the City . .. Assist the � in the procurement of other servioea.ielating to debt issuance such as printiJ11t paying agent, registrar, etc. ldentffi,� bond covenant features and advise as to the financial consequences of r, t n to be included in bond indentures, resolutions or other governing documents regarding security, creation of reserve funds, flow of funds, n,decnption prtWitii>ns, additional parity debt tests, etc.; review and comment on succes9\t, drafts of bond governing documents. Review the l"eClVjrement, and submit analysis to bond insurers, rating agencies and other pro�naJs asl.tey pertain to the City's obligation. Review the tennt. 11>nditions and structure of any proposed debt offering undertaken by the ity and provide suggestions, modifications and enhancements where appropriate and necessary to reflect the constraints or current financial policy and fiscal capability. Coordinate with City's staff and other advisors as respects the furnishing of data for offering documents, it being specifically understood that PFM is not responsible for the inclusion or omission of any material in published offering documents. As applicable, advise the City on the condition of the bond market at the time of sale, including volume, timing considerations, competing offerings, and general economic considerations. 0 •Assist and advise the City in negotiations with investment banking groupsregarding fees, pricing of the bonds and final tenns of any security offering, andmake recommendations regarding a proposed offering to obtain the mostfavorable financial tenns based on existing market conditions.•Arrange for the closing of the transaction including, but not limited, to bondprinting, signing and final delivery of the bonds. 0 EXHIBIT 8 COMPENSATION FOR SERVICES 1.Plan of Finance Recommendation ProjectFor development of a plan of finance recommendation, a one-time fee of $15,000 will be billed upon completion and delivery of the final product. 2.Fixed Rate Transaction Fees (Competitive and Negotiated)For services related to implementing the recommended pllUJ of &ance a transaction will be billed at closing be billed at closing at the following rates:Bank Loans/LOC: $0.85 per $1,000 of ilS\Ulnce• Public Markets $1.00 per $1,000 oflssuance• •Based upon Bond Proceeds and is subject to a minimum fee of.$30,000 perpnsaction and anot to exceed amount of $75,000 per U'@IlSaction, less a $15,000 credit for work on the plan offinance. PFM FINANCIAL ADVISORS LLC AGREEMENT FOR FINANCIAL ADVISORY SERVICESThis agreement ("Agreement''), made and entered into this_ day of August, 2023, by and between The City of Fairhope, AL (''Client'') and PFM Financial Advisors LLC (hereinaftercalled "PFM''), sets forth the terms and conditions under which PFM shall provide services.WHEREAS, Client desires to obtain the services of a financial advisor to develop and assist in implementing Client 's strategies to meet its current and long-t"'81 operations, financialobligations, capital financing needs and render assistance in respect to aebhransactions; andWHEREAS, PFM is capable of providing the necessacy.financial advisory services.NOW, THEREFORE, in consideration of the above.mentioned premises and intending tobe legally bound hereby, Client and PFM agree as fol!ftWs:I.SCOPE OF SERVICESPFM shall provide, upon request of the Clien� servicas related to financial planning, budgetand strategic advice and planning, 1>9licy development � services related to debt issuance,as applicable and set forth in Exhibit A to this Agreement. Client acknowledges and agreesthat most tasks requested by Client will not c,quire all servic-.,mvided for in Exhibit Aand as such the specific scope of services for such task shall bdHmited to just those services required to complete the task. Any muerial changes in or additions to the scope ofservices described in Exhibit A shall be promptly reflected in a written supplement oramendment to this Agreement Services provided by PFM which are not specificallyreferenced in the scope of services set forth i�xhibit A of this Agreement shall be completed as agreed in writin& in advance between the Client and PFM. Upon the requestof Client, an affiliate of PFM or a dlird party referred or otherwise introduc.ed by PFM and/or designated bY the Client may a�to additional services to be provided under asepQJ:lte writing, induding separate scope and compensation, between Client and suchaSate or third party.II.WORK SCHEDULEThe servicea of PFM are to commence as soon as practicable after the execution of thisAgreement and a request by the Client for such service.III.REGI.RED MUNICIPAL ADVISOR; REQUIRED DISCLOSURES1. PFM is a registered municipal advisor with the Securities and Exchange Commission (the "SEC'') and the Municipal Securities Rulemaking Board (the "MSRB"}, pursuant to the Securities Exchange Act of 1934 Rule 1 SBa 1-2. If Client has designated PFM asits independent registered municipal advisor ("IRMAj for purposes of SEC Rule 15Ball(d)(3)(vi) (the "IRMA exemption"), then services provided pursuant to such designation shallbe the services described in Exhibit A hereto, subject to any agreed upon limitations. Verification of independence (as is required under the IRMA exemption) shall be theRn. 07.31.2023 responsibility of such third party seeking to rely on such IRMA exemption. PFM shall have theright to review and approve in advance any representation of PFM's role as IRMA to Client 2. MSRB Rules require that municipal advisors make written disclosures to theirclients of all material conflicts of interest, certain legal or disciplinary events and certainregulatory requirements. Such disclosmes are provided in PFM' s Disclosure Statement deliveredto Client prior to or together with this Agreement. IV. FINANCIAL ADVISORY COMPENSATION; REIMBURSEMENT OFEXPENSES For the services provided under this Agreement, PFM's profcewional fees shall be paid asprovided in Exhibit B to this Agreement and Client shall pay expenses and fees for other servicesnot set forth in Exhibit A as provided below. All fees shall be due to PFM within thirty (�ys of the date of invoicf,1.Reimbursable ExpensesIn addition to fees for services, PFM will be reimbursed for necessary, reasonable, and out�f-pocket expenses incurred, including, but not limited to� travel, meals, lodging, telephone,mail, and other ordinary or extraordinary costs such as for graphics, ping, document production (including as required by a subpoena or other legal doclihient or order), dataprocessing and computer time which are incUITed by PFM. Upon tequest of Client, documentation of such expenses will be provided. 2.Other SgyicesAny services whidt are not Included in the scope of services set forth in Exhibit A of thisAgreement will befllbject to separate, mutually acceptable fee structures. V.TEDfl AND TERMINATIONThis Agreement shall be effective from August 15, 2023 until July 31, 2024 (the "Initial Tam") and shall automaticaIJy,enew for additional 1 year periods (each a ''Renewal Tam" andtogether with the Initial Tenn.die ''Term", unless terminated in writing by either party upon thirty (30) days written noticeto the other party. Upon any such11ftnination, PFM will be paid for all services perfonned and costs andexpenses incurred up to the termination date. VI.ASSIGNMENTPFM shall not assign or transfer any interest in this Agreement or subcontract any of thework performed under the Agreement without the prior written consent of the Client; provided that PFM retains the right to enter into a sale, merger, acquisition, internal reorganization, or similar transaction involving PFM's business without any such consent. Rn. 07.31. 202'.3 -2- VII.INFORMATION TO BE FURNISHED TO PFMAll infonnation, data, reports, and records in the possession of the Client or any third partynecessary for carrying out any services to be perfonned under this Agreement ("Data") shall be fwnished to PFM. PFM may rely on the Data in connection with its provision of the services under this Agreement and the provider thereof shall remain solely responsible for the adequacy, accuracy and completeness of such Data. VIII.NOTICESAll notices and other communication required under this Aa.reement shall be in writing and may be sent by certified mail, return receipt requested, by natiooally recogni7.ed courier, with written verification of receipt, or by electronic mail. Notioes shaUbe sent to the parties at the following addresses, or to such other address as a party ma, furnish to the other party: CITY OF FAIRHOPE, AL 161 North Section Street Fairhope, AL 36532 Attention: Kim Creech PFM FINANCIAL ADVISOR.9LLC 116 Jefferson Street South, Suite 301 Huntsville, AL 35801 Attention: Managing Director IX.TITLE TRANSFERAll materials, except functioning or dynam� financial models, prepared by PFM pursuant exclusively to this Agreement $all be the property of the Client. Subject to the exception des�ve, upon tenn1nation of this Agreement, at Client's reasonable request no later than three (3)years after the 'W{lnination M this Agreement, PFM shall deliver to the Client copies of any deliverables pertaining tQ thiJ Agreement. X.PFM'S REPRESENTATIVESThe employ.off.PM set forth below will provide the services set forth in this Agreement; provided tfaatl>FM may, from time to time, supplement or otherwise amend the advisory team members set forth below. A.Professional Staff•Marcie Lewis•Joshua McCoy•Brooke Baldwin•Ricardo CallenderJlff. 07.31.2023 -3- B.Administrative and Support Staff •Greta Englert 2.Changes in Advisory Team Requested by the Client The Client has the right to request, for any reason, that PFM replace any member of the advisory team. Should the Client make such a request, PFM shall promptly suggest a substitute for approval by the Client XI.INSURANCE PFM shall maintain insurance coverage with policy liQlits not less than as stated in Exhibit C. XII.LIMITATION OF LIABILITY Except to the extent caused by its willibl tnipnduct. bad faith, gross, ltEgligence or reckless disregard of its obligations or duties, PFM sha11 have no fiability to any party under this Agreement XIII.INDEPENDENT CONTRAC1'OR; NO THIRD-PARTY BENEFICIARY PFM, its employees, officers and representatives atpl timeishall be independent contractors and shall not be deemed to be employees, agents, partners, servants and/or joint venturers of Client by virtue of this Agreement or any action$ or services rendered under this Agreement. Nothing in diis A�ent is intended or shall be construed to give any person, other than the parties hereto, their $UCCessors and permitted assigns, any legal or equitable rights, remedy or claim under or in respect .oJ this Agreemfbt or any provisions contained herein. In no event will PFM be liable for any act or omission �any third party or for any circumstances beyond PFM's reasonable control 411cluding, but not limited to, fire, flood, or other natural disaster, war, riot, strike, act oftettorism, act of civil or military authority, software and/or equipment failure, comp�, or failure or interruption of electrical, telecommunications or other utHky iCl"Vices. XIV.APPLICABLE 'LAW This A� shalfi,e construed, enforced, and administered according to the laws of the State of Alabama� and the Client agree that, should a disagreement arise as to the tenns or enforcement of any6"ovision of this Agreement, each party will in good faith attempt to resolve said disagreement prior to pursuing other action. XV.ENTIRE AGREEMENT; SEVERABILITY This Agreement represents the entire agreement between Client and PFM and may not be amended or modified except in writing signed by both parties. For the sake of clarity, any separate agreement between Client and an affiliate of PFM or any third party referred or introduced by PFM and/or designated by Client shall not in any way be deemed an amendment Rev. 07.31.2023 .4. or modification of this Agreement. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provision. XVI.EXECUTION; COUNTERPARTSEach party to this Agreement represents and warrants that the person or persons signing this Agreement on behalf of such party is authorized and empowered to sign and deliver this Agreement for such party. This Agreement may be signed in any number of counterparts, each of which shall be an origin aJ and aJl of which when taken together sha1!£.onstitute one and the same document. Rev. 07.31. 2023 -5- 1.of Client:• • • • • • • • • Rn. 07.31.2023 EXHIBIT A SCOPE OF SERVICES Services related to the Financial Planning and Policy Development upon requestAssist the Client in the formulation of Financial and Debt Policies andAdministrative Procedures.Review current debt structure, identifying strengths �esses of structureso that future debt issues can be designed to m�ilit)'-to finance future capital needs. This will include, but not be limited tu r · ng existing debt forthe possibility of refunding that debt to providlthe Clien with savings.Analyze future debt capacity to deterlllitle the �lient's ability to mise future debtcapital.Assist the Client in the development ofdwl;li<iflt's &pital lmprov6nent Programby identifying sources of capital funding.Assist the Client with the d'-'tclopment of the Client's financial planning effortsand process by assessing capjtal needs, ,identifying �tial revenue sources, analyze financing altemative$Fch as, y• o . , iease/purchasing, short-termvs. long-term financings, assesSJllents, user fees, liffi.pact fees, developer contributiggQpubl "c/private pro, ec and grapts and provide analysis of eachaltemati\1e as required as to the blJketary and financial impact.Review the · . , of �countants, iq1lependent engineers and other project feasibility consultants to ensure that such studies adequately address technical, ��c, and financial rislc factors affecting the marketability of any proposedreveml'lf ebt issues� provide bond market assumptions necessary for financialprojectiolffl included in these studies; attend all relevant working sessions regarding the 9FParatipns, review and completion of such independent studies;und provide "YJQ.tten comments and recommendations regarding assumptions,$'Jlllytic meth., and conclusions contained therein.Develop, manage and maintain computer models for long-term capital planningwhich 11 for inputs regarding levels of ad valorem and non-ad valoremtaxatiolf, growth rates by operating revenue and expenditure item, timing, magnitude and cost of debt issuance, and project operating and capital balances,selected operating and debt ratios and other financial performance measures asmay be determined by the Client.Conduct strategic modeling and planning and related consulting .Attend meetings with Client's staff, consultants and other professionals and theClient.-7- •Undertake financial planning and policy development assignments made by theClient regarding financings, and financial policy including budget, tax, cash management issues and related fiscal policy and programs. •Assist the Client in preparing financial presentations for public hearings and/ orreferendums. •Provide special financial services as requested by the Client. 2.Services Related to Debt Transactions (Includes short a,rM Qnancings, notes,loans, letters of credit, line of credit and bonds); provided that if the transaction is competitive, the services of the financial advisor will be modified in advanco in writing to reflect that process. Upon the request of the Client: • • • • • • • • • • K,;v. 07.31.2023 Anal� financial and economic factoj•detennine if the issuance of bonds is appropnate. Develop a financing plan in concert with �ient's staff which wouljinclude recommendations as to the timing and number �f series of bonds to be issued. Assist the Client by recommending the best method ff sale, either as a negotiated sale, private placement or a public ule. In a public sale, make recommendation as to the determination of the best bid. In the event of a negotiated sale, assist in the solicitation, review and evaluation of any mvestment banking proposals, and provide advioo and information necessary to aid in such selection. Advi ... to the various financing alternatives available to the Client. Develop alternatives � to debt..&saction including evaluation of revenues av.aikble, maturity schedule t11l1G'"h flow requirements. Evaluate benefits of bond �ce and/or security insurance for debt reserve fund. I�-riate,llt"elop credit rating presentation and coordinate with the Clientt verall 7tation to rating agencies. Review -.lerwriter's proposals and submit a written analysis of same to the C1ient. Assist the Client in the proOcurement of other services relating to debt issuance such as printing, paying agent, registrar, etc. Identify key bond covenant features and advise as to the financial consequences of provisions to be included in bond indentmes, resolutions or other governing documents regarding security, creation of reserve funds, flow of funds, -8- EXHIBITB COMPENSATION FOR SERVICES 1.RetainerFor services listed in the Scope of Services #1, PFM shall receive an annual fee in the amount of $20,000 (''Retainer''), payable in quarterly installments. The Retainer shall be reviewed and revised upon mutual agreement. 2.Transaction FeesThe compensation schedule for competitive and negotiated sales of (nwicings will be billed at closing at the following rates: Bank Loans/LOC: $0.75 per $1,000 of issuance• Public Markets $0.85 per $1,000 of tt88llilce* *Based upon Bond Proceeds and is subject to a minimlll11 fee of $20,000 per trans acti on and anot to exceed amowit of $75,000 per �ion.3.Hourly FeesIn the event a financing is started, but cancelled or the retainer contract is cancelled prior to the end of the contract period aLJae_Client's requefJt, accrued time will be billed as follows: Rn. 07.31.2023 M�g I>iataor Director-Senior Maaaging Consultant Analyst/Senior �alyst Administrative Support - 10- Hourly Rate $375.00 $350.00 $325.00 $275.00 $225.00 EXHIBITC INSURANCE . II. MUNIOPAUTY Bay Minette Daphne Elberta Foley Gulf Shores Loxley Magnolia Springs Orange Beach Robertsdale SIiverhiii Spanish Fort Summerdale Fairhope Perdido Beach GAS TAX CITY LIMl�_ j ; $0.03 I so.01 I $0.03 $0.03 $0.03 GAS TAX POLICE JURISDICTION $0.015 $0.000 $0.015 $0.015 --$0.015 $0.03 r ---$0.015 ,-. $0.02 $0.010 $0.01 $0.005 $0.01 $0.005 $0.01 $0.005 $0.01 $0.005 $0.02 l $0.010 I $0.00 $0.00 $0.00 $0.00 l.atlllll - CIT'l'IIAa □-□-□-□-□-□-□-□-□-□-c-□-□-...□-0-..,uuo□-- �-----·--.......... ._.,.,......,.. ...... ...,_ _. L' -·, \ ' > cl '-, .\. ,\ ' /, / � Baldwin County Highway Department G••ollne Tu Rat9 In Baklwln County Towwn, : I.( \ \ \ .I '1 I j \" 1 i ' 1 2 ..... 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 HB254 Enrolled Speaker of the House of Representatives President �er of the Senate 47 House of Representatives 48 49 I hereby certify that the within Act originated in and 50 was passed by the House 02-May-23, as amended. 51 52 John Treadwell 53 Clerk 54 55 56 57 58 59 60 61 62 63 64 65 Senate _______ 1_8_-_M_a�y_-_2_3 _____ _Passed House 23-May-23 APPROVED Concurred in Senate Amendment ,/.'-' _::,. '),-� 'l ':> � -•._ J 'D -=,1v�.:J TJMl. _ __.l;._.<D_:�/_O ___ {l� _______ __..__v _____ �_/4_�_,. __ .,,_.QJabama Secretary Of State GO�R Act Num .... : 2023-288 Bill Num ... : H-254 Recv'd 05/30/23 03:07p■SLF Page 3 lOUSC.. tPONSORS I HEREBY CERTIFY THAT THE RESOLUTION AS REQUIRED IN SECTION C OF ACT NO. 81-889 WA S ADOPTED ANO IS ATTACHED TO THE BILL, H.B . ....;::a::..:.5-.'-'"-_..._ __ _ YEAS \04 NAYS __ Q ___ _ JOHN TREADWELL. Clerk I HEREBY CERTIFY THAT THE NOTICE & PROOF IS ATT{'CHED TO THE BILL, H.B. _____ _ AS REQUIRED IN THE GENERAL ACTS OF ALABAMA, 1975 ACT NO. 919. JOHN T$EAOWEtl., Clerk CONFERENCE COMMITTEE Ho use Conferees ________ , IDATE: RD 1 RFD t!+M6 202.� l This Bill was referred to the Standing Committee of the Senate on } . C-f. m&r and was acted upon by such Committee in session and is by order of the Committee returned therefrom with a fayorabfe report I w/amend(s) ff w/sub Rf by a vote ofc:J. abstain (j!J_��..--.:7..::::::��Jl�.:::.20 alo -,.�__.i!5'---l:=-:6--.-::prj .... f---' Chair mn1 RD 2 CAL DATE:20_ RE-REFERRED 0 RE-COMMITTED 0 Committee. __________ _ I hereby certify that the Resolution as required in Section C of Act No. 81-889�:s ado�({d � attached to the Bill, YEAS 3 � NAYS Q PATRICK HARRIS, Secretary FURTHER SENATE ACTION (OVER)