Wake County RFP # Request for Proposals. Tax-Exempt Drawdown Installment Financing Agreement

Transcription

1 Wake County RFP # Request for Proposals Tax-Exempt Drawdown Installment Financing Agreement Wake County, North Carolina 337 S. Salisbury Street Raleigh, North Carolina Proposals are due June 13, 2018 before 12:00 pm (Local Time).

2 Wake County RFP # Tax-Exempt Drawdown Installment Financing Agreement Wake County, North Carolina, ( the County ) is soliciting proposals from selected financial institutions to enter into one or more tax-exempt drawdown Installment Financing Agreements (the Agreement ) in a not-to-exceed amount of $385,000,000, pursuant to Section 160A-20 of the General Statutes of North Carolina, in order to finance certain projects on behalf of the Wake County Public School System ( WCPSS ) and Wake Tech Community College ( WTCC ). The borrowing will be secured by payments from the County, subject to annual appropriation, and a Deed of Trust on the sites of the Parkside Elementary, East Wake Middle and Fuquay-Varina High Schools and all improvements thereon. The County plans to appropriate debt funding during fiscal year 2019 for WCPSS and WTCC projects as estimated below, subject to a not-to-exceed amount of $385,000,000. FY19 Debt Description Type Funding WCPSS East Wake Middle Renovation $ 57,933,000 Southlakes Elementary New Construction 39,878,000 Fuquay-Varina High Renovation 32,654,000 Technology Devices & Infrastructure Acquisition/Constr. 28,200,000 Northridge Elementary Renovation 25,955,000 Parkside Elementary New Construction 22,088,000 Conn Elementary Renovation 21,533,000 Wiley Elementary Renovation 18,000,000 Stough Elementary Renovation 11,670,000 Program management 10,244,000 Property acquisition Land 10,300,000 Other 1 Various 27,144, ,599,000 WTCC RTP - Classroom Building #2 Construction 37,069,000 Main - Facilities Mgmt. & Warehouse Bldg Construction 16,148,000 Technology acquisitions & facility alterations Acquisition/Constr. 10,033,000 Main - Advanced Industries Building Design/Prelim. Work 3,954,000 Other 2 7,715,000 74,919,000 $ 380,518,000 1 Design for three schools, life cycle improvements, furniture & equipment, environmental/ada and contingency. 2 Campuswide infrastructure, repairs & replacements and minor capital.

3 The County expects to enter into a 4-year Agreement with one or more financial institutions (the Lender ) as further described on Attachment 1 (Draft Term Sheet). The County may enter into multiple Agreements with multiple Lenders for a total commitment of $385,000,000. The County expects to execute annual take-outs under the Agreement to minimize exposure to shortterm debt and manage collateral, as shown on Attachment 2 (Projected Draws and Take-outs). If so, the maximum amount outstanding at any time under the Agreement would not exceed $200,000,000. Notwithstanding the above, the County desires an aggregate commitment for the entire $385,000,000 as a hedge against unforeseen disruptions to capital markets, ensuring the County s ability to appropriate funds and meet contractual commitments. Please note that selection of a financial institution to provide financing under this Request for Proposal does not include any commitment by the County regarding the selection of underwriters for any take-out financings. The County s bond counsel is Womble Bond Dickinson (US) LLP and financial advisor is Waters and Company, LLC. The County s long-term general obligation debt is rated Aaa/AAA/AAA. The County s Comprehensive Annual Financial Report for fiscal year 2017 may be found on the County s website at: The Agreement will be prepared by Womble Bond Dickinson (US) LLP. By submitting a proposal, the proposer waives any conflict of interest that may arise from the representation of the County in this transaction, and the simultaneous representation by Womble Bond Dickinson (US) LLP of the winning proposer in other unrelated matters. If your financial institution is interested, please submit a written proposal in electronic format by noon North Carolina time on June 13, 2018, addressing the Draft Term Sheet and following items, as applicable: (1) Identify the location of the office from which the County would be served and provide contact information for the primary contact person. (2) Provide the financial institution s long-term and short-term ratings and most recent ratings outlook from Moody's, S&P, and Fitch. (3) Identify your counsel and maximum legal fees to be paid by the County. (4) Indicate whether you are interested in a commitment for the entire $385,000,000 or a specified lesser amount. (5) Fixed or variable interest payments may be proposed. Provide all facility fees and other costs and describe the computation of interest, including index and spread, as applicable, timing of interest payments, and the method of counting days. Describe how your interest computation would vary if the County s long-term general obligation rating were downgraded. Provide the maximum interest rate.

4 (6) Describe conditions precedent to closing the Agreement, and whether your proposal is conditioned upon further credit review and approval and, if so, the date by which full approval will be obtained. (7) Describe the term-out provisions (principal amortization and interest rate computation method) that you would permit for the deferred payment of the Agreement beyond August 2022 if for any reason (such as disruption of the capital markets) the County is not able to issue a final takeout financing on or before August 2022 to refinance the Agreement. The County prefers a five-year term-out. (8) Upon the initial closing of the Agreement, bond counsel will render its opinion that, based upon certain assumptions, interest on the Agreement is not includable in the gross income of the owners thereof for purposes of federal income taxation (although interest on the Agreement is includable in the adjusted current earnings of corporations for purposes of computing the federal alternative minimum tax imposed on corporations). In the event that there could be changes in federal tax laws or other circumstances that change the tax treatment of the Agreement, describe any terms related to taxability or changes in tax rates. (9) List funding events resulting in the termination of the Lender s obligation to make advances. The County reserves the right to request additional information from the proposers and reserves the right to reject all proposals and to waive any irregularity or informality. The County reserves the right to select the proposer that best meets the needs of the County. See Attachment 3 (Additional Terms and Conditions). County staff intends to select one or more Lenders by June 18, Closing is expected to be on or around August 16, The Proposal Contact will receive questions regarding this RFP via through June 6, 2018 at 11:00 AM for which answers will be provided via the County s website by 3:00 PM on June 8, The timeline related to the RFP and proposed financing is shown below: ACTIVITY TIMELINE Release Request for Proposal May 30, 2018 Deadline for Questions to Proposal Contact Via June 6, :00 AM County to Respond to Questions and Post Responses as Addendum on County June 8, :00 PM Website Proposals Due June 13, :00 PM Select Lender(s) June 18, 2018 Organizational Call June 20, 2018 Document Preparation Late June/Early July Public Hearing & Board Approval July 23, 2018 LGC Approval August 7, 2018 Closing Expected August 16, 2018

5 Interested parties shall submit a proposal via by June 13, 2018 at 12:00 PM North Carolina time to: Todd Taylor Debt Manager Wake County 337 S. Salisbury Street Raleigh, NC Telephone: (919) todd.taylor@wakegov.com With carbon copy of same to: Steve Waters President Waters and Company, LLC 176 Peachtree Circle Birmingham, AL Telephone (205) gswaters@watersco.com The time date of receipt as indicated per Wake County s system clock will serve as the official record of time received. Wake County cannot accept zip files as attachments. Wake County will confirm receipt of each proposal by reply . In regards to the RFP and subsequent procurement process, proposers shall make NO CONTACTS, either written or verbal, with any Wake County employee, staff member or Board of Commissioner members during the period beginning with the issuance of this document through approval of award unless authorized by proposal contact below. Any attempt by a proposer to contact or influence a member or members of the aforementioned may result in the immediate disqualification of the proposer from award of items or services in this RFP. Proposal Contact/County Representative: Todd Taylor Debt Manager Wake County Finance todd.taylor@wakegov.com

6 RFP Attachment 1 Draft Term Sheet County: Lender: Facility: Maturity Date: Closing Date: Commitment Amount: Wake County, North Carolina Tax-exempt drawdown credit facility ( Facility ) under G.S. 160A-20. Drawn amounts available under the Facility (each an Advance ) may be borrowed from the date the Facility first becomes effective (the Closing Date ) until the Maturity Date (as described below). Total Advances under the Facility may not exceed $385,000,000. The Facility will terminate and all Advances thereunder will be due and payable on August 16, 2022, subject to any extension of the Maturity Date or Term Out option. Closing is expected to occur prior to September 1, Please indicate that all fees and expenses described herein are valid through September 1, $385,000,000 as follows: Option #1: $385,000,000, adjusted downward in an amount equal to any Advance, or Option #2 defined as an initial amount of $200,000,000, adjusted downward in an amount equal to any Advance and upward as described in the following paragraph Increase of Commitment. Increase of Commitment: At any time before the Maturity Date, the County, under Option #2 above, may request that the Commitment Amount be increased; provided that the Commitment Amount after giving effect to the requested increase shall not exceed $200,000,000. Any such request shall be made by written notice to the Lender by an authorized representative of the County not less than 30 days prior to the proposed effective date of such increase and shall be approved by the Lender provided that no Event of Default has occurred. Security: Use of Proceeds: Amortization: Notice of Draw: Advance Limits: Payments from the County, subject to annual appropriation, and a Deed of Trust on the sites of Parkside Elementary School, East Wake Middle School and Fuquay- Varina High School and all improvements thereon. Release of security is permitted provided that the ratio of collateral value to loan amount after the proposed release is not less than 50%. For purposes of release of collateral value during the construction period, the County may use the estimated value of the remaining collateral when it is placed in service. The County intends to execute one or more long-term take-out financings prior to the Maturity Date and expects that at that time it would exercise the option to have a portion of the collateral released to provide security in the take-out financing. To provide financing for the construction, renovation and acquisition of facilities, land and other capital items in support of the capital programs undertaken by the Wake County Public School System and Wake Technical Community College. Principal to be repaid by the Maturity Date, unless Term Out option is chosen by the County. Written irrevocable notice to the Lender by 1:00 p.m. on the day of the draw. Advances are limited to 2 per month under the Facility, and the minimum dollar amount per Advance is $1,000,000 after the initial Advance.

7 Optional Prepayment: Commitment Reduction: Interest Rate: Undrawn Fee (if any): Bank Counsel Fee: Administrative Fees Calculations: Term Out: Additional Covenants: Increased Costs: Disclosure: Each Advance may be prepaid in whole or in part without penalty with 10 days prior written notice to the Lender. The Commitment Amount may be irrevocably reduced or terminated by the County in whole or in part without penalty with same day written notice. % of 1-Month LIBOR + % per annum. Interest shall be due monthly in arrears on the first business day of each month. Please indicate plan for phase-out of LIBOR at the end of 2021 (assuming LIBOR-based interest rate). The County will pay an Undrawn Fee of % per annum for each day multiplied by the Commitment Amount. Undrawn Fees, if any, shall be due quarterly in arrears on the first business day of each calendar quarter. Indicate circumstances, if any, under which undrawn fee ceases to apply. Not to exceed $. Note that County plans for the Agreement and related Deed of Trust to be drafted by County Bond Counsel. Amendments, transfers, standard waivers or consents: $ per event, plus attorney s fees and expenses. All calculations of interest and fees shall be made on the basis of actual days elapsed in a 360-day year. In the event that the County does not pay the full amount of the Advance outstanding on or before the Maturity Date and the Maturity Date has not been extended, the Advance outstanding shall convert to a Term Loan to be amortized over a five-year period payable in equal semiannual installments. The Lender must specify in its proposal any additional covenants it requires from the County in connection with the Agreement beyond the covenants customarily provided in an installment financing arrangement under G.S. 160A-20. Any provision permitting adjustments to interest or fees due to increased costs to the Lender will include a provision that the Lender is imposing such charges on all similarly situated customers of the Lender. The County will post final documents related to this transaction on the Municipal Securities Rulemaking Board Electronic Municipal Market Access repository. The County will redact information such as account numbers and direct phone numbers and other bank contact information, but will not redact transaction information, such as interest rates. Lenders should be aware that all documents provided to the County in response to the RFP are likely to be public documents and will not be protected from release upon request. Assignment: The Lender may assign, sell or transfer its rights to receive payment from the County hereunder only to a Person that is either (i)(a) an affiliate of the Lender or (B) a trust or other custodial arrangement established by the Lender or an Affiliate of the Lender, the owners of any beneficial interest in which are limited to qualified institutional buyers as defined in Rule 144A promulgated under the 1933 Act, or accredited investors as defined in Rule 501 of Regulation D under the 1933 Act or (ii) a qualified institutional buyers as defined in Rule 144A promulgated under the 1933 Act, or accredited investors as defined in Rule 501 of Regulation D under the 1933 Act.

8 RFP Attachment 2 Projected Draws and Takeouts Beginning Ending Date Balance Draws Takeouts Balance Aug-18 $ - $ 50,000 $ - $ 50,000 Sep-18 50, ,000 Oct-18 50, ,000 Nov-18 50, ,000 Dec-18 50, ,000 Jan-19 50,000 8,922,467-8,972,467 Feb-19 8,972,467 8,922,467-17,894,933 Mar-19 17,894,933 8,972,467-26,867,400 Apr-19 26,867,400 8,922,467-35,789,867 May-19 35,789,867 8,922,467-44,712,333 Jun-19 44,712,333 8,922,467-53,634,800 Jul-19 53,634,800 13,952,327-67,587,127 Aug-19 67,587,127 13,952,327-81,539,453 Sep-19 81,539,453 13,952,327-95,491,780 Oct-19 95,491,780 13,952, ,444,107 Nov ,444,107 13,952, ,396,433 Dec ,396,433 13,952, ,348,760 Jan ,348,760 13,952, ,301,087 Feb ,301,087 13,952,327 (120,000,000) 45,253,413 Mar-20 45,253,413 13,952,327-59,205,740 Apr-20 59,205,740 13,952,327-73,158,067 May-20 73,158,067 13,952,327-87,110,393 Jun-20 87,110,393 13,952, ,062,720 Jul ,062,720 13,952, ,015,047 Aug ,015,047 13,952, ,967,373 Sep ,967,373 13,952, ,919,700 Oct ,919,700 13,952, ,872,027 Nov ,872,027 13,952, ,824,353 Dec ,824,353 13,952, ,776,680 Jan ,776,680 14,360, ,137,540 Feb ,137,540 10,941,860 (70,000,000) 140,079,400 Mar ,079,400 8,730, ,809,660 Apr ,809,660 8,730, ,539,920 May ,539,920 8,730, ,270,180 Jun ,270,180 7,836, ,106,640 Jul ,106,640 2,030, ,137,420 Aug ,137,420 2,030, ,168,200 Sep ,168,200 2,030, ,198,980 Oct ,198,980 2,030, ,229,760 Nov ,229,760 2,030, ,260,540 Dec ,260,540 2,030, ,291,320 Jan ,291,320 2,030, ,322,100 Feb ,322,100 2,195,900 (190,518,000) - Total $ 380,518,000 $ (380,518,000)

9 RFP Attachment 3 Additional Terms and Conditions The County reserves the right to reject any or all proposals if it determines that select proposals are not responsive to the RFP. The County reserves the right to reconsider any proposal submitted at any phase of the procurement. It also reserves the right to meet with select Proposers at any time to gather additional information. Furthermore, the County reserves the right to delete or add functionality up until the final contract signing. This RFP and any subsequent action taken as a result thereof, is issued by Wake County. Proposal responses should be directed to Todd Taylor and Steve Waters, as previously stated. In regards to this RFP and subsequent procurement process, vendors shall make NO CONTACTS, either written or verbal, with any Wake County employee, staff member, or Board of Commissioner members during the period beginning with the issuance of this document through approval of award unless authorized by the Proposal Contact. Any attempt by a Proposer to contact or influence a member or members of the aforementioned may result in the immediate disqualification of the proposer from award for items or services on this RFP. In order to facilitate the analysis of responses to this RFP, Proposers are required to prepare their proposals in accordance with the instructions outlined in this RFP. Late proposals will not be accepted. The County will not be held responsible for the failure of any service to deliver a proposal response prior to the stated proposal due date and time. It is solely the Proposer s responsibility to: (1) ascertain that they have all required and necessary information, documents and addenda, prior to submitting a response; (2) ensure that the response is received at the correct location and time. Late responses, regardless of delivery means, will not be accepted. Wake County will only accept an ed version of the response. The County will not be responsible for any expenses incurred by any Proposer in the development of a response to this Request for Proposal or any other activities associated with this procurement including but not limited to any onsite (or otherwise) interviews and/or presentations, and/or supplemental information provided, submitted, or given to Wake County and/or its representatives. Further, the County shall reserve the right to cancel the work described herein prior to issuance and acceptance of any contractual agreement/purchase order by the recommended proposer even if the Board of Commissioners has formally accepted a recommendation. Wake County reserves the right to award a contract, based on initial offers received from Proposers, without discussion and without conducting further negotiations. Under such circumstance, the acceptance of a proposal by the County shall be deemed to be an acceptance of an offer that such acceptance will be binding upon both parties. A proposing offer should therefore be based on the most favorable terms available from a price, business requirements and technical standpoint. The County may also, at its sole discretion, have discussions with those Proposers that it deems in its sole discretion to fall within a competitive range. The County may enter into negotiations separately with such Proposers. Negotiations with a proposer may continue with a proposer that the County has tentatively selected to award a contract to. The County shall not be deemed to have finally selected a proposer until a contract has been successfully negotiated and signed by both parties. All data and information gathered by the proposer and its agents, including this RFP and all reports, recommendations, specifications, and data shall be treated by the proposer and its agents as confidential. The proposer and its agents shall not disclose or communicate the aforesaid matters to a third party or use them in advertising, propaganda, and/or in another job or jobs, unless written consent is obtained from the County. The County reserves the right to retain all proposals regardless of which response is selected. No proposals will be returned to proposer.

10 The selected Proposer shall warrant that the County will be the sole property owner of all data. The Proposer must certify that it has carefully examined this Request for Proposal and documents attached hereto for terms, conditions, specifications, covenants, requirements, services, etc. and the Proposer certifies that it understands the scope of the work to be done, that the Proposer has knowledge and expertise to provide the scope of the work, and that its proposal is based upon the terms, conditions, specifications, services, and requirements of this RFP and attachments. The Proposer further agrees that the performance time specified is a reasonable time. By its signature on the response to the RFP, the Proposer certifies that its proposal is made without prior understanding, agreement, or connection with any corporation, firm or person submitting a proposal for the same underwriting services, and is in all respects fair and without collusion or fraud, so that all proposals for the purchase will result from free, open and competitive proposing among all vendors. Further, the Proposer certifies that it understands collusive bidding/proposing is a violation of Federal law and can result in fines, prison sentences, and civil damage awards. By submission of a response, the Proposer agrees that at the time of submittal, it: (1) has no interest (including financial benefit, commission, finder s fee, or any other remuneration) and shall not acquire any interest, either direct or indirect, that would conflict in any manner or degree with the performance of Proposers services, or (2) will not benefit from an award resulting in a Conflict of Interest. A Conflict of Interest shall include holding or retaining membership, or employment, on a board, elected office, department, division or bureau, or committee sanctioned by and/or governed by Wake County. Proposers shall identify any interests, and the individuals involved, on separate paper with the response and shall understand that the County, in consultation with legal counsel, may reject their proposal. Proposer will indemnify and hold the County harmless from any and all liability, expense, judgment, suit, or cause of action for personal injury, death, or direct damage to tangible property which may accrue against the County to the extent it is caused by the negligence of Proposer, its subcontractors, or their employees or agents, while performing their duties under this Agreement, provided that the County gives the Proposer prompt, written notice of any such claim or suit. The County shall cooperate with Proposer in its defense or settlement of such claim or suit. This section sets forth the full extent of the Proposers general indemnification of the County from liabilities that are in any way related to Proposers performance under this Agreement. It is understood that in the performance of any services herein provided, the Proposer shall be, and is, an independent contractor, and is not an agent or employee of the County and shall furnish such services in its own manner and method, except as required by the contract. The Proposer shall be solely responsible for, and shall indemnify, defend, and save the County harmless, from all matters relating to the payment of its employees, including compliance with Social Security, withholding, and all other wages, salaries, benefits, taxes, exactions, and regulations of any nature whatsoever. The County must review and approve all third party subcontractor arrangements that are utilized to fulfill the requirements of this RFP. Any changes in third party relationships require prior notification and approval by the County. This RFP and any contract resulting therefrom shall be governed by and construed according to the laws of the State of North Carolina. Should any portion of any contract be in conflict with the laws of the State of North Carolina, the State laws shall invalidate only that portion. The remaining portion of the contract(s) shall remain in effect. The County assumes no responsibility for confidentiality of information offered in a proposal. The RFP does not intend to elicit proprietary information. However, if proprietary information is submitted as part of the proposal, the information is to be labeled as such. Proposals are not subject to public inspection until after the contract award. Wake County reserves the right to share any information submitted in response to this

11 RFP or process with any person(s) or firm(s) involved in the review and evaluation process. Proprietary or confidential information must be clearly labeled as such at the time of initial submission and to the extent provided by N.C.G.S. Chapter 132, will not be made available for public inspection. In the event that a request for inspection is made under public records law, the proposer will be notified of the request and may participate in any subsequent civil action to compel disclosure of confidential information. Proposer must comply with all applicable State and Federal Laws. In the event any Governmental restrictions may be imposed which would necessitate alteration of its proposal prior to acceptance, it shall be the responsibility of the successful Proposer to notify Wake County at once, indicating in its letter the specific regulation which required such alterations. The County reserves the right to accept any such alterations, including any price adjustments occasioned thereby, or to cancel the contract. Submission of any proposal indicates a Proposers acceptance of the conditions contained in this RFP unless clearly and specifically noted otherwise in the proposal. Furthermore, the County is not bound to accept a proposal on the basis of lowest price, and further, the County has the sole discretion and reserves the right to cancel this RFP, and to reject any and all proposals, to waive any and all informalities and or irregularities, or to re-advertise with either the identical or revised specifications, if it is deemed to be in the County's best interests to do so. The County reserves the right to accept or reject any or all of the items in the proposal, and to award the contract in whole or in part and/or negotiate any or all items with individual Proposers if it is deemed in the County s best interest. Moreover, the County reserves the right to make no selection if proposals are deemed to be outside the fiscal constraint or not in the best interest of the County. All requested information in this RFP must be supplied. All exceptions shall be clearly identified in this section and a written explanation shall include the scope of the exceptions, the ramifications of the exceptions for the County, and the description of the advantages or disadvantages to the County as a result of exceptions. The County, in its sole discretion, may reject any exceptions or specifications within the proposal. Proposers may also provide supplemental information, if necessary, to assist the County in analyzing responses to this RFP. SPECIAL ATTENTION E-Verify To ensure compliance with the E-Verify requirements of the General Statutes of North Carolina, all contractors, including any subcontractors employed by the contractor(s), by submitting a bid, proposal or any other response, or by providing any material, equipment, supplies, services, etc., attest and affirm that they are aware and in full compliance with Article 2 of Chapter 64 (NCGS64-26(a)) relating to the E-Verify requirements. Iran / Israel Divestment By signing this agreement; accepting this contract/purchase order; or submitting any bid, proposal, etc., vendors and contractors certify that as of the date of execution, receipt, or submission they are not listed on the Final Divestment List created by the NC Office of State Treasurer pursuant to NCGS 147 Article 6E, Iran Divestment Act, Iran Divestment Act Certification. Vendors and contractors shall not utilize any subcontractor that is identified on the Final Divestment List. In addition: Any organization defined under NCGS (2), Divestment from Companies Boycotting Israel, shall not engage in business totaling more than $1,000 with any company/business, etc. that boycotts Israel. A list of companies that boycott Israel is maintained by the NC Office of State Treasurer, pursuant to NCGS (a)(1). Any company listed as boycotting Israel is not eligible to do business with any State agency or political subdivision of the State.