ESBD_File_341192_H_24-07 RFQ-Finacail Advisor-SECTION 2 – PROJECT OVERVIEW & SCOPE OF SERVICES.pdf

SECTION 2 – PROJECT OVERVIEW & SCOPE OF SERVICES

2.1 Project Overview

HCC is requesting qualifications for Financial Advisor Services. The purpose is to retain a firm or firms to act as the College’s Financial Advisor on the issuance of general obligation and revenue bonds, refunding, and full-scope Financial Advisory Services.

The College seeks statements of qualifications for Financial Advisory Services to provide alternate resources for financing the planning and construction of capital projects pursued by the College. The Financial Advisor is required to be licensed as required by The U.S. Securities and Exchange Commission (SEC), and experience as a Higher Education Advisor is advantageous.

The primary role of the Financial Advisor will be to facilitate impact analyses and modeling across available funding mechanisms for the College. Developing innovative solutions to the College's funding requirements in order to achieve the most advantageous financing terms;

Reviewing and making appropriate recommendations on financing and creating or assisting in the creation of financial analysis; Coordinating with and assisting employees and other agents and representatives of the College. In addition to exploring options of public-private partnership alternatives for infrastructure.

2.2 Contract Term

The term for a contract awarded from this solicitation, if any, will be three (3) years beginning the date of contract execution, with renewal options of two (2) additional one-year time periods subject to the termination provisions contained in any resulting contract. Further, HCC reserves the right to extend the contract term on a month-to-month basis, not to exceed three (3) months upon expirations of the initial term and any successive renewal term.

2.3 Scope of Services

The College is seeking a firm to provide Financial Advisor Services as needed or request to facilitate impact analyses and modeling across available funding mechanisms on its behalf.

Additionally, the Financial Advisory services will include but not limited to the following:

2.3.1 Advise and assist in the development of short-term and long-range financing plans and advise the College of current bond market conditions;

2.3.2 Analyze and make recommendation regarding the College's overall present debt structure, refunding, advance refunding, net present value savings compared to the value of call options, etc.;

2.3.3 Analyze and make recommendations regarding future debt issues and analyze the financing alternatives available to the College, taking into account its borrowing capacity, future financing needs, policy considerations, and such other factors as deemed appropriate;

2.3.4 Advise the College on current conditions in the relevant debt market, upcoming bond issues, and other general information and economic data which might reasonably be expected to influence interest rates, bidding conditions or timing of issuance;

2.3.5 Analysis of the total life cycle costs associated with debt issuance. This may include whether the College should issue its own debt or participate with another entity;

2.3.6 Working with underwriters, bond counsel, etc., to properly structure debt issues, minimize insurance costs and maximize the benefits to the College relating to debt issuance. This will include recommendations regarding fixed or variable rate bonds, interest capitalization, coupon rates, redemption provisions, serial or term bonds, additional bond test, etc.;

2.3.7 Review legal and other documents to ensure that the end result is a complete financing plan that is in the best interest of the College;

2.3.8 Review marketing plan, pre-pricing analysis, and all cost associated with the bond financing, ensuring the most favorable bond terms to the College;

2.3.9 Analyze and advise on the merits of retail or institutional sale and monitor market preferences approaching the sale date;

2.3.10 Analyze and advise on the possibility of credit enhancement, where and whether to seek a bond rating on the issue, etc.;

2.3.11 Timely help the College to obtain grants/appropriations, both public and private, both state and federal, to plan and construct capital projects;

2.3.12 Timely help the College to obtain financing to plan and construct projects with the most advantageous terms;

2.3.13 Advise the College on creative sources of funding for projects, both governmental and from the private sector;

2.3.14 Attending meetings or performing other tasks including any other services necessary, customary, or incidental to the capital financing of a project;

2.3.15 Providing financial recommendations on whether the College should proceed with public/private or public/public undertakings;

2.3.16 Coordinate with the Finance Department to create financial analysis of projects, including revenue generation; and

2.3.17 Participate in meetings as requested, including due diligence and presentations to the Board of Trustees.

2.4 Additionally, services to be performed by the Financial Advisor may include:

2.5.1 Recommend method of sale of debt instruments;

2.5.2 Advise publications of forthcoming sales;

2.5.3 Arrange for reports of independent consultants;

2.5.4 Recommend as to the advisability of obtaining credit ratings, identify proper plan to best market the College to rating agencies, and coordinate preparation and submission of information to rating agencies;

2.5.5 Coordinate, prepare and submit required information to recognized bond insurance companies for insurance qualification;

2.5.6 Coordinate efforts for delivery of debt instruments and preparation and verification of closing figures;

2.5.7 Maintain liaison with Bond Counsel in items including, but not limited to, questions pertaining to financial debt and preparation of all legal documents;

2.5.8 Counsel in selection of paying agent/registrar;

2.5.9 Deliver schedule of annual debt requirements on debt instruments;

2.5.10 Attend Board of Trustees meetings and meetings with staff as requested;

2.5.11 Advise of changes in Federal and State laws and regulations;

2.5.12 Review bond proposals for legal and IRS regulations;

2.5.13 Advise on investment of funds as requested;

2.5.14 Advise and assist in exercising any call and/or refunding;

2.5.15 Provide all financing planning services as requested;

2.5.16 Testify in litigation as requested;

2.5.17 Make recommendations on matters of credit enhancement;

2.5.18 Advise and assist in the preparation of appropriate financial and investment policies of the

College; and

2.5.19 Advise and assist with arbitrage and rebate reporting and audits.

2.5 The final scope of work will be coordinated with the College finance staff and the selected

Financial Advisor. The Financial Advisor shall also address the following specific components that should be included in the scope of work.

2.5.1 Recommend a plan for the issuance of obligations, as needed, that will include:

a) the type of obligations (current interest bonds, capital appreciation bonds, direct lease financing or lease conduit obligations, deferred income debt, commercial paper, general obligation bonds, revenue bonds, Public Facility Corporation lease revenue bonds, maintenance tax notes etc.;

b) the date of issue;

c) principal amount and maturity structure;

d) interest structure (fixed or variable);

e) interest payment dates;

f) a schedule of maturities;

g) early redemption/refinancing options;

h) security positions;

i) appropriate management fee and takedown of underwriters;

j) other matters that are appropriate to best serve HCC’s interests.

The plan will address various strategies related to the issuance of obligations.

2.5.2 Organize and coordinate the financing team. The Contractor will coordinate with HCC on the selection of the paying agent, escrow agent and verification agent, as the particular transactions require, each of which will be retained and compensated by the College. In a negotiated offering, the Contractor, in coordination with HCC’s Procurement Operations office, finance and administration, draft the RFQ/RFP for underwriters and assist with soliciting and evaluating underwriter proposals. The Contractor will make a recommendation to HCC for the hiring of the underwriter(s).

2.5.3 Work with counsel on the transaction, including bond, and disclosure counsel, which will be municipal bond attorneys retained by HCC. These attorneys will prepare the proceedings, provide legal advice concerning the steps necessary to be taken to issue the obligation, and issue an unqualified opinion approving the legality of the obligation and (as applicable) the tax exemption of the interest paid thereon.

Generally, working with bond counsel will mean coordinating with the attorneys and assisting in the financial advisory aspects of preparing appropriate legal proceedings and documents, including documents concerning any required bond election.

2.5.4 Assist in the College’s preparation of the Preliminary Official Statement (POS) and the Official Statement (OS) or equivalent document as the particular transaction may require (such as a private placement memorandum).

2.5.5 Make recommendations relative to the credit rating(s) of the proposed obligation, and should HCC seek a rating, coordinate the process of working with the rating agency or agencies and assist in the preparation of presentations, as necessary.

2.5.6 In connection with a competitive sale, the Contractor will:

a) Coordinate the preparation of the Official Notice of Sale, the Uniform Bid Form and other such documents which may be requested;

b) Submit all documents for examination, approval, and certification by appropriate officials, agents of HCC and bond counsel;

c) Coordinate delivery of the documents to a list of prospective bidders;

d) Where appropriate, organize investor meetings;

e) Coordinate receipt of the bids;

f) Advise as to the best bid, including acceptance or rejection of the bid;

g) If a bid is accepted, coordinate the delivery of and payment for the obligations;

h) Assist in the verification of final closing figures; and

i) Provide copies of documents to the purchaser of the obligations in accordance with the

Official Notice of Sale and the Uniform Bid Form.

2.5.7 Make recommendations relative to the credit rating(s) of the proposed obligation, and should HCC seek a rating, coordinate the process of working with the rating agency or agencies and assist in the preparation of presentations, as necessary.

2.5.8 Make recommendations as to obtaining municipal bond insurance, a liquidity facility or other credit enhancement for the obligation.

2.5.9 Prepare closing memorandum which summarizes all details and financing.

2.5.10 After closing, deliver to HCC and the paying agent all definitive debt records, including a schedule of annual debt requirements of the obligation.

2.5.11 Meet with the Board chair, at his/her discretion, to answer any questions related to debt or potential financings.

2.5.12 Attend all Board of Trustees and committee meetings related to Finance items.

2.5.13 Structure all transactions to the maximum benefit to the College.

2.5.14 Evaluate HCC indebtedness on a periodic basis for refinancing/refunding opportunities.

2.5.15 Evaluate capital acquisition strategies.

2.5.16 Evaluate short-term and long-term finance planning.

2.5.17 In coordination with HCC staff, annually review and update HCC’s debt management policy for presentation to the Board.

2.5.18 Prepare and maintain a debt ledger for all HCC debt.

2.5.19 Provide notices of scheduled debt service payments.

2.5.20 Prepare monthly balances of outstanding debt.

2.5.21 Review and evaluate all debt proposals from vendors for all obligations, including leases.

2.5.22 Prepare and file annual continuing disclosures required by the bond documents and Security Exchange Commission.

2.5.23 Prepare and file material event notices, if any, with the Electronic Municipal Market Access system (EMMA).

2.5.24 Provide advice and assistance regarding the analysis of Tax Increment Financing Districts.

2.5.25 Provide advice and assistance regarding bond or annexation election campaigns.

2.5.26 Provide other debt services as requested by HCC officers and Board members.

2.6 Timeline Requirements

2.6.1 The selected firm shall begin financial advisory services for the College upon Board of Trustees approval of the services agreement;

2.6.2 The Advisor will meet on an as-needed basis with college staff and various members of the Board of Trustees to discuss issues, concerns, and recommendations; and

2.6.3 The Advisor will provide regular updates to the College regarding items listed in the scope of services.

2.7 Other Considerations

All working papers, reports, and records relating to the work performed under the Agreement will be property of the Houston Community College System and will be delivered to the college.

- Fees for services rendered.

- Expected term of the agreement is a total of five years, including option years.