ORDINANCE approving and authorizing Contract between the City of Houston and MASTERSON ADVISORS LLC for Financial Advisory Services for the Finance Department; providing a maximum contract amount  - $747,750.00 - Enterprise and Other Funds

S33-T28812 - Approve an Ordinance awarding a professional services contract to Masterson Advisors, LLC. in the amount not to exceed $747,750.00 for Financial Advisor Services for the Finance Department.

Specific Explanation:

The Director of the Finance Department and the Chief Procurement Officer recommend that City Council approve an ordinance awarding a professional services contract to Masterson Advisors, LLC beginning on the date of countersignature by the City Controller through June 30, 2019, in the amount not to exceed $747,750.00 for Financial Advisor Services for the Finance Department.  The Director of the Finance Department and/or the Chief Procurement Officer may terminate this contract at any time upon thirty (30) days written notice to the contractor.

The services to be provided by the Financial Advisor include, but are not limited to, financial advisory services related to new-money bonds sold on a competitive and negotiated basis, pre-­ pricing and post-pricing analysis of competitive and negotiated sales, refunding analysis and other debt restructuring, managing the process for securing and negotiating new credit facilities, re-investment analysis, development of debt management policies and procedures, monitoring of secondary-market activities, training, assistance in the procurement of debt management-related  services, and analysis of debt management-related  fees. The financial advisory services to the City shall exclude coverage for general advisory services related to swaps and other derivative products, but not excluding consideration of swaps and other derivative products directly relating to other obligations set forth in this agreement.

On July 20, 2016, Council approved a three (3) year contract with Hilltop Securities, Inc for the Finance Department.  Over the last several months the professionals employed by Hilltop servicing the contract to the City and serving as our day-to-day contacts have left Hilltop and joined Masterson Advisors LLC.   Hilltop Securities, Inc. is no longer providing the level of service required by the City, and to continue with the ongoing financial transactions the City requires experts that are familiar with the City of Houston's credit rating.  To replace this level of experiential knowledge and service is time consuming and costly.  For this reason, the Director of the Finance Department is recommending we issue a seven-month contract to Masterson Advisors, LLC.  During the first quarter of 2019, the intent is to solicit and select a newly qualified firm to provide the services. 

M/WBE Subcontracting:

The RFP solicitation was advertised with an 24% goal for M/WBE participation. Masterson Advisors, LLC has designated the below named companies as its certified M/WBE subcontractors:

Pay or Play Program:

The proposed contract requires compliance with the City's 'Pay or Play' ordinance regarding health benefits for employees of City contractors. In this case, the contractor will provide health benefits to eligible employees in compliance with City policy.

Hire Houston First (HHF):

The proposed contract requires compliance with the City's 'Hire Houston First' ordinance that promotes economic opportunity for Houston businesses and supports job creation. In this case, Masterson Advisors, LLC is not a designated HHF company, but they were the successful awardee without application of the HHF preference.

Fiscal Note:

Funding for this item is included in the FY 2019 Adopted Budget.  Therefore, no Fiscal Note is required as stated in the Financial Policies.

$227,925.00 - Combined Utility System Gen Pur Fund - 8305

$227,925.00 - HAS Revenue Fund - 8001

$227,925.00 - General Debt Service Admin. - 3000

$  63,975.00 - C&E-Civic Center Facility Revenue Fund - 8601

$747,750.00