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Home My WebLink AboutBack-Up - RFP MemoAugust 3, 2015 Memorandum To: Prospective Financing Providers From: Public Financial Management, Inc. Re: Police Vehicle Financing — Request for Proposals, Due 8/21/2015 @ 1:00 pin On behalf of the City of Miami (the "City"), PFM is requesting proposals for a financing arrangement that would provide the City with up to $32,000,000 which it will use to acquire through purchase or lease/purchase of approximately 1,000 vehicles of various types over a period of five years, to be used for the City's police services (the City may ultimately lease less vehicles and/or a lesser principal amount, at its discretion). The City is requesting financing arrangements that would provide capacity for a five-year draw period (draw periods can be divided up), followed by a fixed rate, level repayment structure of no less than five years and up to seven years. Alternatively, proposers inay offer a structure whereby the Lessor will fund the total financing amount in escrow, and there would be draws from the escrow as equipment is delivered; in which case the total funding program should be ten to twelve years. The financing shall be secured by a contractual obligation of the City to make semi-annual payments of interest and annual payments of principal. The City will evaluate all financing proposals which may range from loans to capital leases. Other key terms are as follows: • Interest Payment Dates: Serni-annual on January 1 and July 1, commencing January 1, 2016 • Principal Payment Dates: January 1 of each year, with commencement depending on structure proposed • Final Maturity Date to be a date no longer than 7 years from end of draw period (or individual draws) • 30/360 Day Count Basis • Expected 2015 Lease Start Date of October 1, 2015 (subject to change) • Yearly draws for up to 5 Years (this may include multiple draws, as in a draw program), or upfront escrow funding • Level repayment schedule (using a minimum five year repayment term or maximum seven year) • The City Attorney's Office will provide any necessary tax opinions. Please provide a term sheet with the following minimum items: (1) Lease term length; (2) interest rate, and/or index and spread to determine rate, if the rate is established at the outset of the prograin or upon each draw; (3) prepayment alternatives; (4) specific covenants and pertinent terms. The City is requesting that proposals be submitted by August 21, 2015 at 1:00 pm to the following einail addresses: Pedro Varona (varonap(cpfm.com) and Sergio Masvidal (masvidals0),pfin,cotri). Any inquiries requesting clarifications of this solicitation or additional information shall be submitted to PFM no later than August 10`h in order to provide adequate response trine to the proposer requesting the information and to all prospective proposers who have expressed an interest in writing delivered to PFM. Any request received after August 10`h may not be addressed. Included in its written proposal, each Proposer shall agree to the following certifications which will be included, among others, as representations in the financing documents: • You have an undetstanding of the City's Self -Insurance Policy with tespect to the vehicles. Section 768.28, Florida Statute, provides for waiver of sovereign immunity in tort actions or claims against the state and its agencies and subdivisions. The present statutory limit of recovery in the absence of special relief granted by the .Florida legislature is $200,000 per person and $300,000 per incident. Under the protection of this sovereign immunity limit, Florida Statutes 768.28 and Chapter 440, Florida Statutes covering Workers' Compensation, the City has established a self -insured program to provide coverage for almost all areas of liability including Workers' Compensation, General Liability, Automotive Liability, Police Professional Liability, Public Officials' Liability, and Employment Practices Liability. • The City shall not deliver any offering document with respect to the financing arrangement. • You have conducted your own investigation, to the extent you deem satisfactory or sufficient, into matters relating to business affairs or conditions (eithet financial or otherwise) of the City. (For additional financial information please use the following link http://www.tniarnigov.com/finance/pages/ providing access to the Comprehensive Annual Financial Reports and Compliance Reporting. While this financing arrangement will not be rated, the City's cutrent undetlying credit ratings for their Special Obligation debt (secured by eligible Non -Ad Valorem revenues) is A2, A, and A by Moody's, S&P, and Fitch, respectively.) • No inference should be dtawn that you, in the acceptance of any financing documents, are relying on the City Attorney as to any such matters othet than the legal opinions which may be rendered by such counsel. • You have made such independent investigation of the financing risks associated with the financing as you, in the exercise of sound business judgment, consider being appropriate under the circumstances. • You have knowledge and experience in financial and business matters and are capable of evaluating the merits and risks of participating in the financing with the City and you can beat the econoinic risk of such participation. • You are not acting as a broker or other intermediary, and ate entering into the financing as an investment for your own account and not with a present view to resale or other distribution to the public. • You are a bank, trust company, savings institution, insurance company, dealer, investment company, pension or profit-sharing trust, or qualified institutional buyer as contemplated by Section 517.061(7), Florida Statutes. THE CITY WILL ULTIMATELY SELECT THE PROPOSAL THAT IS DEEMED TO BE THE BEST OVERALL VALUE TO THE CITY, INCLUDING THE INTEREST RATE, PREPAYMENT TERMS, AND OTHER TERMS AND CONDITIONS, THE CITY RESERVES THE RIGHT TO REJECT ANY AND ALL BIDS AND RESERVES THE RIGIT TO WAIVE, IF PERNII FI ED BY LAW, ANY IRREGULARITY OR INFORMALITY IN ANY PROPOSAL. The P Group 1I1Q}of&ifryRttu3rcurq Dated Date Delivery Date Sources: SOURCES AND USES OF FUNDS City of Miami Police Equipment Lease Santander Financing 10/01/2015 10/01/2016 10/01/2017 10/01/2018 10/01/2019 10/01/2015 10/01/2016 10/01/2017 10/01/2018 10/01/2019 2015 Draw 2016 Draw 2017 Draw 2018 Draw 10/01/2020 10/01/2020 2019 Draw 2020 Draw Bond Proceeds: Par Amount 2,875,932.00 9,502,277,90 5,980,642.10 7,616,803.50 920,607.00 4,592,980.20 2,875,932.00 9,502,277.90 5,980,642.10 7,616,803.50 920,607.00 4,592,980,20 Uses: 2015 Draw 2016 Draw 2017 Draw 2018 Draw 2019 Draw 2020 Draw Project Fund Deposits: Project Fund Delivery Date Expenses: Cost of Issuance Other Uses of Funds: Additional Proceeds 2,869,082.14 9,479,645.63 5,966,397.53 7,598,662.05 918,414.29 4,582,040.79 6,849.80 22,632.20 14,244.49 18,141.44 2,192.67 10,939.40 0,06 0.07 0.08 0.01 0.04 0.01 2,875,932.00 9,502,277.90 5,980,642.10 7,616,803.50 920,607.00 4,592,980.20 Notes: Rates assume a 25 basis point increase in LIBOR per year. Preliminary numbers for discussion purposes only. Rates are based on assumed market movement and are not indicative of actual future debt service. Aug 27, 2015 1:43 pm Prepared by Public Financial Management, Inc. Page 1 The PFM Group ilnatt#1415 II-wokitt3ot MNlacta5 SOURCES AND USES OF FUNDS City of Miami Police Equipment Lease Santander Financing Dated Date Delivery Date Sources: Total Bond Proceeds: Par Amount 31,489,242,70 31,489, 242.70 Uses: Total Project Fund Deposits: Project Fund Delivery Date Expenses: Cost of Issuance Other Uses of Funds: Additional Proceeds 31,414,242.43 75,000.00 0.27 31,489, 242.70 Notes: Rates assume a 25 basis point increase in LIBOR per year. Preliminary numbers for discussion purposes only. Rates are based on assumed market movement and are not indicative of actual future debt service. Aug 27, 2015 1:43 pm Prepared by Public Financial Management, Inc. Page 2 The PJEi'V Group IIltnuclnI . ''1 +tAtItthmrs Bond Component BOND SUMMARY STATISTICS City of Miami Police Equipment Lease Santander Financing Earliest Dated Date Earliest Delivery Date First Coupon Last Maturity Arbitrage Yield True Interest Cost (TIC) Net Interest Cost (NIC) All -In TIC Average Coupon Average Life (years) Par Amount Bond Proceeds Total Interest Net Interest Total Debt Service Maximum Annual Debt Service Average Annual Debt Service Underwriter's Fees (per $1000) Average Takedown Other Fee Total Underwriter's Discount 10/01/2015 10/01/2015 01/01/2016 01 /01 /2025 1.933299% 1.933299% 0,971133% 2.042325% 0.971133% 4.513 31,489, 242.70 31,489,242.70 1,380,034.35 1, 380, 034.35 32,869,277.05 5,978,281.91 3,553,435.36 Bid Price 100.000000 Par Average Average PV of 1 bp Value Price Coupon Life change Bond Component 31,489, 242.70 100.000 1.940% 2.259 6,897.86 31,489,242.70 2.259 6,897.86 Par Value + Accrued Interest + Premium (Discount) - Underwriter's Discount - Cost of Issuance Expense - Other Amounts TIC 31, 489, 242.70 All -In Arbitrage TIC Yield 31,489,242,70 31,489,242.70 -75, 000.00 Target Value 31,489,242.70 31,414,242.70 31,489,242.70 Target Date Multiple Multiple Multiple Yield 1.933299% 2.042325% 1.933299% Note: Rates assume a 25 basis point increase in LIBOR per year. Aug 27, 2015 1:43 pm Prepared by Public Financial Management, Inc. Page 3 The PFM Group [irrap+;lai & itiva miathtivltorn Bond Component BOND PRICING City of Miami Police Equipment Lease Santander Financing Maturity Date Amount Rate Yield Price 2015 Draw, Bond Component, 10/01/2015: 01/01/2016 584,285.50 1.570% 1.570% 100,000 01/01/2017 559,594.70 1.570% 1.570% 100,000 01/01/2018 568,380.30 1.570% 1.570% 100.000 01/01/2019 577,303.90 1.570% 1,570% 100.000 01/01/2020 586,367.60 1.570% 1,570% 100.000 2,875,932.00 2016 Draw, Bond Component, 10/01/2016: 01/01/2017 1,933,801.30 1,740% 1.740% 100.000 01/01/2018 1,843,444.70 1.740% 1,740% 100.000 01/01/2019 1,875,520.60 1,740% 1.740% 100.000 01/01/2020 1,908,154.70 1.740% 1.740% 100.000 01/01/2021 1,941,356.60 1.740% 1,740% 100,000 9,502,277.90 2017 Draw, Bond Component, 10/01/2017: 01/01/2018 1,219,062.60 1.900% 1.900% 100.000 01/01/2019 1,157,000.70 1.900% 1.900% 100.000 01/01/2020 1,178,983.70 1.900% 1.900% 100.000 01/01/2021 1,201,384,40 1.900% 1,900% 100.000 01/01/2022 1,224,210.70 1,900% 1.900% 100,000 5,980,642.10 2018 Draw, Bond Component, 10/01/2018: 01/01/2019 1,555,052.00 2.060% 2.060% 100,000 01/01/2020 1,469,406.40 2,060% 2.060% 100.000 01/01/2021 1,499,676.20 2.060% 2.060% 100.000 01/01/2022 1,530,569.60 2.060% 2.060% 100,000 01/01/2023 1,562,099.30 2,060% 2.060% 100,000 7,616, 803, 50 2019 Draw, Bond Component, 10/01/2019: 01/01/2020 188,252,30 2,220% 2.220% 100.000 01/01/2021 177,103.40 2.220% 2.220% 100.000 01/01/2022 181,035.10 2.220% 2.220% 100.000 01/01/2023 185,054.00 2.220% 2.220% 100.000 01/01/2024 189,162.20 2,220% 2,220% 100,000 920,607.00 2020 Draw, Bond Component, 10/01/2020: 01/01/2021 940,706,60 2.380% 2.380% 100.000 01/01/2022 881,110.70 2.380% 2,380% 100.000 01/01/2023 902,081,10 2.380% 2,380% 100,000 01/01/2024 923,550.60 2.380% 2.380% 100.000 01/01/2025 945,531.20 2.380% 2.380% 100.000 4,592,980.20 31,489,242,70 Dated Date Delivery Date Par Amount Original Issue Discount Production Underwriter's Discount Purchase Price Accrued Interest Net Proceeds Note: Rates assume a 25 basis point Increase in LIBOR per year. 10/01/2015 10/01/2015 31,489,242.70 31,489,242,70 100.000000% 31, 489, 242.70 100, 000000% 31,489, 242.70 Aug 27, 2015 1:43 pm Prepared by Public Financial Management, Inc. Page 4 The PF Grou BOND DEBT SERVICE BREAKDOWN City of Miami Police Equipment Lease Santander Financing Annual Date 2015 Draw 2016 Draw 2017 Draw 2018 Draw 2019 Draw 2020 Draw Total Total 01/01/2016 595,573.53 595,573.53 595,573.53 07/01/2016 17,989.43 17,989.43 01/01/2017 577,584.13 1,975,136.21 2,552,720.34 2,570,709.77 07/01/2017 13,596.61 65,845.75 79,442.36 01/01/2018 581,976.91 1,909,290.45 1,247,470.65 3,738,738.01 3,818,180.37 07/01/2018 9,134.82 49,807.78 45,235.01 104,177.61 01/01/2019 586,438.72 1,925,328.38 1,202,235.71 1,594,278.54 5,308,281.35 5,412,458.96 07/01/2019 4,602.99 33,490.75 34,243.50 62,436.04 134,773.28 01/01/2020 590,970.59 1,941,645.45 1,213,227.20 1,531,842.44 193,361.67 5,471,047.35 5,605,820.63 07/01/2020 16,889.80 23,043.15 47,301.15 8,129.14 95,363.24 01/01/2021 1,958,246.40 1,224,427.55 1,546,977.35 185,232.54 968,034.83 5,882,918.67 5,978,281.91 07/01/2021 11,630.00 31,854.49 6,163.29 43,462.06 93,109.84 01/01/2022 1,235,840.70 1,562,424.09 187,198.39 924,572.76 3,910,035.94 4,003,145.78 07/01/2022 16,089.62 4,153.80 32,976.84 53,220.26 01/01/2023 1,578,188.92 189,207.80 935,057.94 2,702,454.66 2,755,674.92 07/01/2023 2,099.70 22,242.07 24,341.77 01/01/2024 191,261.90 945,792.67 1,137,054.57 1,161,396.34 07/01/2024 11,251.82 11,251.82 01/01/2025 956,783.02 956,783.02 968,034.84 2,977,867.73 9,875,680.97 6,237,353.47 7,971,392.64 966,808.23 4,840,174.01 32,869,277.05 32,869,277.05 Note: Rates assume a 25 basis point increase in LIBOR per year. Aug 27, 2015 1:43 pm Prepared by Public Financial Management, Inc. Page 5 reezen e PFM Group rITOPPI,'rl CR 4F" k ." x7r4Vi`.Ci• Period Ending 2015 Draw BOND DEBT SERVICE BREAKDOWN City of Miami Police Equipment Lease Santander Financing 2016 Draw 2017 Draw 2018 Draw 2019 Draw 2020 Draw Total 01/01/2016 595,573.53 595,573.53 01/01/2017 595,573.56 1,975,136.21 2,570,709.77 01/01/2018 595,573.52 1,975,136.20 1,247,470.65 3,818,180.37 01/01/2019 595,573.54 1,975,136.16 1,247,470.72 1,594,278.54 5,412,458.96 01/01/2020 595,573.58 1,975,136.20 1,247,470.70 1,594,278.48 193,361.67 5,605,820.63 01/01/2021 1,975,136.20 1,247,470.70 1,594,278.50 193,361.68 968,034.83 5,978,281.91 01/01/2022 1,247,470.70 1,594,278.58 193,361.68 968,034.82 4,003,145.78 01/01/2023 1,594,278.54 193,361.60 968,034.78 2,755,674.92 01/01/2024 193,361.60 968,034.74 1,161,396.34 01/01/2025 968,034.84 968,034.84 2,977,867.73 9,875,680.97 6,237,353.47 7,971,392.64 966,808.23 4,840,174.01 32,869,277.05 Note: Rates assume a 25 basis point increase in LIBOR per year. Aug 27, 2015 1:43 pm Prepared by Public Financial Management, Inc. Page 6 The PFM Group '.�°s.—. Ffl, 1 �7 lAdt41,40ra BOND DEBT SERVICE City of Miami Police Equipment Lease Santander Financing Period Ending Principal Coupon Interest Debt Service 01/01/2016 584,285.50 01/01/2017 2,493,396.00 01/01/2018 3,630,887,60 01 /01 /2019 5,164, 877.20 01/01/2020 5,331,164.70 01 /01 /2021 5, 760, 227.20 01/01/2022 3,816,926.10 01/01/2023 2,649,234.40 01 /01 /2024 1,112, 712.80 01/01/2025 945,531.20 11,288.03 77,313.77 187,292.77 247,581.76 274,655.93 218, 054.71 186, 219.68 106, 440, 52 48, 683, 54 22,503.64 595, 573.53 2,570,709.77 3,818,180.37 5,412,458.96 5,605,820.63 5,978,281.91 4,003,145.78 2,755,674,92 1,161,396.34 968,034.84 31,489,242.70 1,380,034.35 32,869,277.05 Note: Rates assume a 25 basis point increase in LIBOR per year. Aug 27, 2015 1:43 pm Prepared by Public Financial Management, Inc. Page 7