Attachment

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE AGENDA APRIL 27, 2015 - 6:00 P.M. CITY HALL COUNCIL CHAMBERS 15 LOOCKERMAN PLAZA DOVER, DELAWARE PUBLIC COMMENTS ARE WELCOMED ON ANY ITEM AND WILL BE PERMITTED AT APPROPRIATE TIMES. WHEN POSSIBLE, PLEASE NOTIFY THE CITY CLERK (736-7008 OR E-MAIL AT CITYCLERK@DOVER.DE.US) SHOULD YOU WISH TO BE RECOGNIZED. AGENDA ADDITIONS/DELETIONS 1. EVALUATION OF PROPOSAL - INVESTMENT BANKING CUSTODY SERVICES (STAFF RECOMMENDS AWARDING THE INVESTMENT BANKING CUSTODY SERVICES TO UNION BANK FOR A THREE (3) YEAR PERIOD TO START THE DATE OF CONTRACT AND MAY BE RENEWED OR EXTENDED FOR TWO (2) ADDITIONAL TWO (2) YEAR PERIODS BY MUTUAL CONSENT AND APPROVAL OF CITY COUNCIL) 2. DOWNTOWN DOVER BUSINESS IMPROVEMENT DISTRICT (BID) BUDGET AND ASSESSMENT (TAX) RATES FOR FISCAL YEAR 2015-2016 (STAFF RECOMMENDS APPROVAL OF THE PROPOSED BUDGET AND ASSESSMENT (TAX) RATE FOR FISCAL YEAR 2015-16) 3. ADJOURNMENT BY 7:00 P.M. /TM S:\AGENDAS-MINUTES-PACKETS-PRESENTATIONS-ATT&EXH\COMMITTEE-AGENDAS\2015\04-27-2015 LF&A.WPD THE AGENDA ITEMS AS LISTED MAY NOT BE CONSIDERED IN SEQUENCE. THIS AGENDA IS SUBJECT TO CHANGE TO INCLUDE THE ADDITION OR THE DELETION OF ITEMS, INCLUDING EXECUTIVE SESSIONS.

ACTION FORM PROCEEDING: Legislative, Finance & Administrative Committee AGENDA: 04/27/15 DEPARTMENT OF ORIGIN: Finance PREPARED BY: Donna Mitchell, Controller/Treasurer SUBJECT: Investment Banking Custody Services – RFP#15-0019FN APPROVALS: City Council EXHIBITS: Exhibit 1 – Pricing Calculations & Comparisons EXPENDITURE REQUIRED: Est. $5,770 (fees will vary based on the number of security transactions) AMOUNT BUDGETED: N/A FUNDING SOURCE: Interest Earnings are reported net of fees TIMETABLE: Transfer of Assets from Union Bank to Custodian selected upon Council approval RECOMMENDED ACTION: Staff recommends awarding the Investment Custody Services to Union Bank for a three (3) year period to start the date of contract and may be renewed or extended for two (2) additional two (2) year periods by mutual consent and approval of City Council. RFP #15- 0019FN was issued on November 24, 2014 for sealed proposals to be received January 29, 2015. Five proposals were received. The current proposal calls for a three (3) year period to start the date of contract and may be renewed or extended for two (2) additional two (2) year periods by mutual consent and approved by City Council. The City received five proposals from the following financial institutions. Credit Ratings Captalization Estimated Name of Bank Headquarters Local Branch Assets Moody's S&P's Fitch Rating Fees Wells Fargo Chicago 3 offices in Dover, DE $1.687 Trillion Aa3 AA- AA- Well $ 13,979 Union Bank New York City None $110.9 Billion A2 A+ A Well $ 5,770 Key Bank Cleveland, OH None $90 Billion A3 A- A- Well $ 12,500 M&T Bank (Parent Company) Buffalo, NY M & T offices in Dover $97.1 Billion A2 A A- Adequate $ 16,270 Wilmington Trust - Proposal Wilmington DE (Requesting Local Vendor Preference - Reduction of $510 or $16,780) TD Wealth Cherry Hill, N.J 2 offices in Dover, De $20 Billion Aa3 AA- AA- Well $ 15,000 (Ratings Guide attached for further reference) All submissions received were from major financial institutions, of which all are capable of managing the custody of the City’s investment assets. Union Bank was the most competitive bank. Fees were calculated based on a review of the past years trade transaction history to include an estimated 118 trades and 20 wires. The attached Exhibit displays the proposed fees from the four other banks. Union Banks fees are significantly less than the other proposals. The staff’s recommendation is to award the service contract to Union Bank based on the fee analysis and also considering the City’s prior relationship with Union Bank and our satisfaction with services provided in the past several years. All investment activity is transacted through the internet, email correspondence and phone calls. If a local bank is preferred, staff would recommend TD Bank since they are the lowest cost local bank and have better ratings and capitalization ratios. As stated above, the fees were calculated based on this past year’s transaction activity which changes year to year.

Page 2 of 3 Legislative, Finance & Administrative Committee Meeting 4/27/15 Exhibit 1 Summary Trades 118 Coupons 134 Wires 20 Average Assets 50,000,000 Key Bank TD Bank Bps Charge 0.020% 10,000.00 Bps Charge 0.030% 15,000.00 DTC Trades 3.00 354.00 DTC Trades 0.00 0.00 Other Trades 7.00 0.00 Other Trades 0.00 0.00 Wire Transfers 7.00 140.00 Wire Transfers 0.00 0.00 Base Account Fee 0.00 0.00 Base Account Fee 0.00 0.00 Coupons 0.00 0.00 Coupons 0.00 0.00 Hard Copy Statement 0.00 0.00 Hard Copy Statement 0.00 0.00 Annual Minimum 12,500.00 12,500.00 Annual Minimum 3,000.00 3,000.00 Expected Fees 0.025% 12,500.00 Expected Fees 0.030% 15,000.00 Wilmington Trust Wells Fargo Bps Charge 0.030% 15,000.00 Bps Charge 0.025% 12,500.00 DTC Trades 10.00 1,180.00 DTC Trades 8.00 944.00 Other Trades 10.00 0.00 Other Trades 0.00 0.00 Wire Transfers 15.00 300.00 Wire Transfers 10.00 200.00 Base Account Fee 300.00 300.00 Base Account Fee 0.00 0.00 Coupons 0.00 0.00 Coupons 2.50 335.00 Hard Copy Statement 0.00 0.00 Hard Copy Statement 0.00 0.00 Annual Minimum 3,000.00 3,000.00 Annual Minimum 10,000.00 10,000.00 Expected Fees 0.034% 16,780.00 Expected Fees 0.028% 13,979.00 UnionBank Bps Charge 0.000% 0.00 DTC Trades 15.00 1,770.00 Other Trades 15.00 0.00 Wire Transfers 10.00 200.00 Base Account Fee 3,500.00 3,500.00 Coupons 0.00 0.00 Hard Copy Statement 25.00 300.00 Annual Minimum 0.00 0.00 Expected Fees 0.012% 5,770.00

Page 3 of 3 Legislative, Finance & Administrative Committee Meeting 4/27/15 RATINGS GUIDE (from “An Elected Official’s Guide to Rating Agency Presentations”) RATING DESCRIPTION Fitch IBCA AAA............................................. Highest credit quality AA (+ or -)* ................................. Very high credit quality A (+ or -) ..................................... High credit quality BBB (+ or -) ................................. Good credit quality BB (+ or -) ................................... Speculative B (+ or -) ..................................... Highly speculative CCC,CC,C (+ or -) ......................... High default risk D ................................................. In default Moody’s Aaa ............................................. Best quality Aa1, Aa2, Aa3 ............................. High quality by all standards A1, A2, A3 ................................... Upper medium grade Baa1,Baa2, Baa3......................... Medium grade Ba1, Ba2, Ba3 ............................. Has speculative elements B1, B2, B3 ................................... Generally lacks characteristics of a desirable investment Caa.............................................. Poor standing; may be in default Ca ............................................... Speculative in a high degree; often in default C ................................................. Lowest rated class of bonds; extremely poor prospects Standard & Poor’s AAA............................................. Highest quality; extremely strong capacity to pay AA (+ or -) ................................... High quality; very strong capacity to pay A (+ or -) ..................................... Strong capacity to pay principal and interest BBB (+ or -) ................................. Adequate capacity to pay principal and interest BB (+ or -) ................................... Low speculative B (+ or -) ..................................... Speculative CCC & CC (+ or -)......................... High speculation C ................................................. Income bonds on which no interest is being paid D ................................................. In default * “+” or “-“ may be added to Fitch IBCA and Standard & Poor’s ratings to indicate the relative position of a credit within a rating category. The digits 1-3 appended to Moody’s ratings perform the same function.

CITY OF DOVER LEGISLATIVE FINANCE AND ADMINISTRATION COMMITTEE April 27, 2015 BUSINESS IMPROVEMENT DISTRICT - ASSESSMENT (TAX) RATES FOR FISCAL YEAR 2015-2016 Submitted by: Cheryl A. Bundek, AAS INTRODUCTION The Business Improvement District (BID) Ordinance adopted by City Council requires that Council must adopt a BID budget and assessment every year. This report presents the proposed budget and assessment for fiscal year 2015-16. ORDINANCE REQUIREMENT AND BUDGET (A) Appendix D, Article III, Section 9(f) requires that a budget be submitted to City Council for consideration and approval. For your consideration, we have attached the FY 2015-2016 budget showing BID tax revenue and the expenses charged against this revenue (Attachment A). (B) For your consideration, we have also provided the tax calculation worksheet with recommended rates (Attachment B). REQUEST FOR ACTION We request Council to approve the following budget for fiscal year 2015-16 Attachment A, and Assessment (Tax) Rate for 2015-16 - Attachment B. \\doverfp\TaxOffc\BID Assessment Rates\FY16 BID MEMO TO COUNCIL.doc 1

ATTACHMENT A BUSINESS IMPROVEMENT DISTRICT CASH RECEIPTS BUDGET FOR 2015-16 BID TAX REVENUE AND EXPENSES CHARGED AGAINST THIS REVENUE ADMINISTERED THROUGH CITY OF DOVER BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 1. The amount hereinafter named aggregating Fifty thousand dollars, (49,600) or so much thereof as may be necessary is hereby appropriated from current revenues and other funds for economic development purposes for the fiscal year beginning July 1, 2015, and ending June 30, 2016: REVENUE PROPOSED Tax Revenue $49,600 EXPENSES Personnel & Administration Expenses $49,600 \\doverfp\TaxOffc\BID Assessment Rates\FY16 BID MEMO TO COUNCIL.doc 2

ATTACHMENT B CITY OF DOVER LEGISLATIVE FINANCE AND ADMINISTRATION COMMITTEE April 27, 2015 BUSINESS IMPROVEMENT DISTRICT - ASSESSMENT (TAX) RATES FOR FISCAL YEAR 2015-2016 BUSINESS IMPROVEMENT DISTRICT TAX CALCULATION WORKSHEET JULY 1, 2015 TO JUNE 30, 2016 ZONE 1 ZONE 2 ZONE 3 TOTAL Aggregate Assessments $38,489,300 $61,080,200 $38,670,200 $138,239,700 Assessment Tax Rate per $100 0.0624 0.0335 0.0132 --- Revenue Raised $24,000 $20,500 $5,100 $49,600 % Revenue Raised 48% 41% 10% 100% Number of Parcels 113 105 42 260 Average Assessment $212 $195 $121 $529 NOTE: These figures were estimated per the 2015 reassessed values. The revenue percentages by Zone are per the City of Dover Code Appendix D-Article III, Section 9(e). \\doverfp\TaxOffc\BID Assessment Rates\FY16 BID MEMO TO COUNCIL.doc 3