Legal Documents of Mountain City

The town recorder may consult with a financial professional regarding the method of sale of debt. Subject to approval by the legislative body, the town recorder will determine the method of issuance of debt on a case-by-case basis consistent with the options provided by prevailing state law.

1. Competitive sale. In a competitive sale, the town's debt will be offered in a public sale to any and all eligible bidders. Unless bids are rejected, the debt shall be awarded to the bidder providing the lowest true interest cost as long as the bid adheres to the requirements set forth in the official notice of sale.

   In a competitive sale, a financial advisor may bid on an issue for which they are providing advisory services only if:

   1. Authorized by the rules and regulations of the Municipal Securities Rule-Making Board (the "MSRB"), including rule G-23, as may be amended and modified;
   2. The legislative body or designated official grants in writing specific authority on a transaction by transaction basis;
   3. Such sale is properly carried out through a widely and publicly advertised sale, during normal bond sale hours, and through an industry standard, electronic bidding platform; and
   4. The financial advisory fee is separately disclosed and billed from the underwriting fee.
2. Negotiated sale. The town recognizes that some securities are best sold through a negotiated sale with an underwriter or group of underwriters. The town shall assess the following circumstances in determining whether a negotiated sale is the best method of sale:
   
   1. State requirements on negotiated sales;
   2. Debt structure which may require a strong pre-marketing effort such as those associated with a complex transaction generally referred to as a "story" bond;
   3. Size or structure of the issue which may limit the number of potential bidders;
   4. Market conditions including volatility wherein the town would be better served by the flexibility afforded by careful timing and marketing such as is the case for debt issued to refinance or refund existing debt;
   5. Whether the debt is to be issued as variable rate obligations or perhaps as zero coupon debt;
   6. Whether an idea or financing structure is a proprietary product of a single firm;
   7. In a publicly offered or privately placed, negotiated sale, a financial advisor, if any, shall not be permitted to resign as the financial advisor in order to underwrite or privately place an issue for which they are or have been providing advisory services; and
   8. The underwriter shall clearly identify itself in writing as an underwriter and not as a financial advisor from the earliest stages of its relationship with the town with respect to the negotiated issue. The underwriter must clarify its primary role as a purchaser of securities in an arm's length commercial transaction and that it has financial and other interests that differ from those of the town. The underwriter in a publicly offered, negotiated sale shall be required to provide pricing information both as to interest rates and to takedown per maturity to the legislative body (or its designated official) in advance of the pricing of the debt.
3. Private placement. From time to time, the town may elect to privately place its debt. Such placement shall only be considered if this method is demonstrated to be advantageous to the town. (Ord. #1269, Jan. 2012)