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HomeMy WebLinkAboutVIII-09 Approve Municipal Advisory Service Agreement with Northland Securities, Inc.MUNICIPAL ADVISORY SERVICE AGREEMENT BY AND BETWEEN THE CITY OF HASTINGS, MINNESOTA AND NORTHLAND SECURITIES, INC. This Agreement is made and entered into by and between the City of Hastings, Minnesota (hereinafter "Client") and Northland Securities, Inc., of Minneapolis, Minnesota (hereinafter "Northland"). WITNESSETH WHEREAS, the Client desires to have Northland provide it with advice on the structure, terms, timing and other matters related to the issuance of the General Obligation Bonds, Series 2025A (the “Debt”) serving in the role of municipal (financial) advisor, and WHEREAS, Northland is a registered municipal advisor with both the Securities and Exchange Commission (“SEC”) and the Municipal Securities Rulemaking Board (“MSRB”) (registration # 866- 00082-00), and WHEREAS, Northland will act as municipal advisor in accordance with the duties and responsibilities of Rule G-42 of the MSRB, and WHEREAS, the MSRB provides a municipal advisory client brochure on its website (www.msrb.org) that describes the protections that may be provided by the MSRB rules, including professional competency, fair dealing, duty of loyalty, remedies for disputes and how to file a complaint with an appropriate regulatory authority, and WHEREAS, the Client and Northland are entering into this Agreement to define the municipal advisory relationship at the earliest opportunity related to the inception of the municipal advisory relationship for the Debt, and WHEREAS, Northland desires to furnish services to the Client as hereinafter described, NOW, THEREFORE, it is agreed by and between the parties as follows: SERVICES TO BE PROVIDED BY NORTHLAND Northland shall provide the Client with services necessary to analyze, structure, offer for sale and close the Debt. The services will be tailored to meet the needs of this engagement and may include: Planning and Development 1.Assist Client officials to define the scope and the objectives for the Debt. 2.Investigate and consider reasonably feasible financing alternatives. 3.Assist the Client in understanding the material risks, potential benefits, structure and other characteristics of the recommended plan for the Debt, including issue structure, estimated debt VIII-09 Municipal Advisory Service Agreement 2 service payments, projected revenues, method of issuance, bond rating, sale timing, and call provisions. 4.Prepare a schedule of events related to the issuance process. 5.Coordinate with bond counsel any actions needed to authorize the issuance of the Debt. 6.Attend meetings of the Client and other project and bond issue related meetings as needed and as requested. Bond Sale 1.Assist the Client with the preparation, review and approval of the preliminary official statement (POS). 2.Assist the Client and bond counsel with preparing and publishing the Official Notice of Sale if required by law. 3.Prepare and submit application for bond rating(s) and assist the Client with furnishing the rating agency(s) with any additional information required to conduct the rating review. Assist the Client with preparing and conducting the rating call or other presentation. 4.Assist the Client in receiving the bids, compute the accuracy of the bids received, and recommend to the Client the most favorable bid for award. 5.Coordinate with bond counsel the preparation of required contracts and resolutions. Post-Sale Support 1.Assist the Client with the preparation of final official statement, distribution to the underwriter and posting on EMMA. 2.Coordinate the bond issue closing, including making all arrangements for bond printing, registration, and delivery. 3.Furnish to the Client a complete transcript of the transaction, if not provided by bond counsel. There are no specific limitations on the scope of this agreement. COMPENSATION For providing these services with respect to the Debt, Northland shall be paid a lump sum of $25,352. The fee due to Northland shall be payable by the Client upon the closing of the Bonds. Northland agrees to pay the following expenses from its fee: •Out-of-pocket expenses such as travel, long distance phone, and copy costs. •Production and distribution of material to rating agencies and/or bond insurance companies. •Preparation of the bond transcript. The Client agrees to pay for all other expenses related to the processing of the bond issue(s) including, but not limited to, the following: •Engineering and/or architectural fees. •Publication of legal notices. •Bond counsel and local attorney fees. •Fees for various debt certificates. •The cost of printing Official Statements, if any. •Client staff expenses. •Airfare and lodging expenses of one Northland official and Client officials when and if traveling for rating agency presentations. •Rating agency fees, if any. VIII-09 Municipal Advisory Service Agreement 3 •Bond insurance fees, if any. •Accounting and other related fees. It is expressly understood that there is no obligation on the part of the Client under the terms of this Agreement to issue the Debt. If the Debt is not issued, Northland agrees to pay its own expenses and receive no fee for any municipal advisory services it has rendered pursuant to this Agreement. CONFLICTS OF INTEREST Northland, as your Municipal Advisor, mitigates conflicts through its adherence to its fiduciary duty to the Client, which includes a duty of loyalty to the Client in performing all municipal advisory activities for the Client. This duty of loyalty obligates Northland to deal honestly and with the utmost good faith with the Client and to act in the Client’s best interests without regard to our own financial or other interests. In addition, because Northland is a broker-dealer with significant capital due to the nature of its overall business, the success and profitability of Northland is not dependent on maximizing short-term revenue generated from individualized recommendations to its clients but instead is dependent on long-term profitably built on a foundation of integrity, quality of service and strict adherence to its fiduciary duty. Furthermore, Northland’s municipal advisory supervisory structure leverages our long-standing and comprehensive broker-dealer supervisory processes and practices, and provides strong safeguards against individual representatives of Northland potentially departing from our regulatory duties due to personal interests. The disclosures below describe, as applicable, any additional mitigations that may be relevant with respect to any specific conflict disclosed below. Northland serves a wide variety of other clients that may from time to time have interests that could have a direct or indirect impact on the interests of the Client. For example, Northland serves as Municipal Advisor to other Municipal Advisory clients and, in such cases, owes a regulatory duty to such other clients just as it does to the Client under this Agreement. These other clients may, from time to time and depending on the specific circumstances, have competing interests, such as accessing the new issue market with the most advantageous timing and with limited competition at the time of the offering. In acting in the interests of its various clients, Northland could potentially face a conflict of interest arising from these competing client interests. In other cases, as a broker-dealer that engages in underwritings of new issuances of municipal securities by other municipal entities, the interests of Northland to achieve a successful and profitable underwriting for its municipal entity underwriting clients could potentially constitute a conflict of interest if, as in the example above, the municipal entities that Northland serves as underwriter or municipal advisor have competing interests in seeking to access the new issue market with the most advantageous timing and with limited competition at the time of the offering. However, none of these other engagements or relationships would impair Northland’s ability to fulfill its regulatory duties to the Client. The compensation for services provided in this Agreement is customary in the municipal securities market, however, it may pose a conflict of interest. The fees due under this Agreement are in a fixed amount established at the outset of the Agreement. The amount is usually based upon an analysis by Client and Northland of, among other things, the expected duration and complexity of the transaction and the Scope of Services to be performed by Northland. This form of compensation presents a VIII-09 Municipal Advisory Service Agreement 4 potential conflict of interest because, if the transaction requires more work than originally contemplated, Northland may suffer a loss. Thus, Northland may recommend less time-consuming alternatives, or fail to do a thorough analysis of alternatives. This conflict of interest is mitigated by supervisory policies and procedures to ensure the scope of services within the transaction align with other comparable engagements. By executing this Agreement, the Client acknowledges and accepts the potential conflicts of interest posed by the compensation to Northland. Northland does not participate in any payments to be retained, nor participate in any fee splitting agreements or arrangements. Northland is a subsidiary of Northland Capital Holdings, Inc. First National of Nebraska, Inc. (“FNNI”), is the parent company of Northland Capital Holdings, Inc. and First National Bank of Omaha. Under FNNI, Northland and its affiliates are comprised of a securities firm and a commercial bank. These entities provide investment banking, asset management, financing, financial advisory services and other commercial and investment banking products and services to a wide range of corporations and individuals. In addition, Northland and its affiliates currently have, and may in the future have, investment and commercial banking, trust, and other relationships with parties that may relate to assets of, or be involved in the issuance of securities and/or instruments by, the Client and its affiliates. In the ordinary course of their respective businesses, Northland and its affiliates have engaged, and may in the future engage, in transactions with, and perform services for, the Client and its affiliates for which they received or will receive customary fees and expenses. Northland is a broker-dealer that engages in a broad range of securities-related activities to service its clients, in addition to serving as a Municipal Advisor or Underwriter. Such securities-related activities, which may include but are not limited to the buying and selling of outstanding securities, including securities of the Client, may be undertaken on behalf of, or as counterparty to, the Client, and current or potential investors in the securities of the Client. These other Northland clients may, from time to time and depending on the specific circumstances, have interests in conflict with those of the Client, such as when their buying or selling of the Client’s securities may have an adverse effect on the market for the Client’s securities. However, any potential conflict arising from Northland effecting or otherwise assisting such other clients in connection with such transactions is mitigated by means of such activities being engaged in on customary terms through other business units of Northland that operate independently from Northland’s Municipal Advisory business, thereby reducing or eliminating the likelihood that the interests of such other clients would have an impact on the services provided by Northland to the Client under this Agreement. Northland has policies and procedures in place to ensure that Northland as a broker-dealer or its affiliates are not participating in bidding or determining market prices for the Client’s transaction that is covered under this Agreement. Northland Bond Services is a division of First National Bank of Omaha. Northland Bond Services provides paying agent services to issuers of municipal bonds. The Client is solely responsible for the decision on the source of paying agent services. Any engagement of Northland Bond Services is outside the scope of this Agreement. No compensation paid to Northland Bond Services is shared with Northland Securities. VIII-09 Municipal Advisory Service Agreement 5 Northland is not aware of any additional material conflicts of interest that could reasonably be anticipated to impair Northland’s ability to provide advice to or on behalf of the Client in accordance with the standards of conduct for municipal advisors. LEGAL AND DISCIPLINARY ACTIONS The Client can find information about legal or disciplinary events reported by the Securities and Exchange Commission contained in Form MA or Form MA-I related to Northland at www.sec.gov/municipal/oms-edgar-links. SUCCESSORS OR ASSIGNS The terms and provisions of this Agreement are binding upon and inure to the benefit of the Client and Northland and their successors or assigns. TERM OF THIS AGREEMENT This Agreement may be terminated by thirty (30) days written notice by either the Client or Northland and it shall terminate sixty (60) days following the closing date related to the issuance of the Debt. Dated this 28th day of April, 2025. Northland Securities, Inc. By: Tammy Omdal, Managing Director By: Jessica Green, Managing Director By: Craig Jones, Senior Managing Director, Head of Public Finance VIII-09 Municipal Advisory Service Agreement 6 City of Hastings, Minnesota By: _________________________________ Its: _________________________________Finance Manager Digitally signed by Chris EitemillerDN: OU=Finance, O=City of Hastings, CN=Chris Eitemiller, E=ceitemiller@hastingsmn.govReason: I am the author of this documentLocation: Date: 2025.04.29 15:50:27-05'00'Foxit PDF Editor Version: 2024.4.1 Chris Eitemiller VIII-09