Page 124 - Pantego FY22 Operating Budget

2. Method of Sale. The Town will use a competitive bidding process in the sale of
bonds unless the nature of the issue warrants a negotiated bid. In situations where a
competitive bidding process is not elected, the Town will publicly present the reasons
why, and the Town will participate with the financial advisor in the selection of the
underwriter or direct purchaser.

3. Bidding Parameters. The notice of sale will be carefully constructed to ensure the
best possible bid for the Town considering the existing market conditions and other
prevailing factors. Parameters to be examined include:
• Limits between lowest and highest coupons
• Coupon requirements relative to the yield curve
• Method of underwriter compensation, discount, or premium coupons
• Use of True Interest Cost (TIC) vs. Net Interest Cost (NIC)
• Use of bond insurance
• Original Issue discount bonds/Capital Appreciation Bonds
• Variable rate bonds
• Call provisions

4. Bond Issuance Costs. The Town will be involved in the selection of all financial
advisors, underwriters, paying agents, and bond counsel. The Town shall evaluate
the merits of rotating professional advisors and consultants and the kinds of services
and fee structures available from independent financial advisors, investment banking
firms, and commercial banks. The Town will carefully itemize and scrutinize all costs
associated with the issuance of bonds.

5. Bond Counsel Involvement. The Bond Counsel will issue an opinion as to the
legality and tax-exempt status of any obligations. The Town will also seek the advice
of the Bond Counsel on all other types of financing and on any other questions
involving federal tax or arbitrage law. Bond Counsel is also responsible for the
preparation of the ordinance authorizing issuance of obligations and all the closing
documents to complete their sale and will perform other services as defined by
contract approved by Council.

6. Financial Advisor. The Town will seek the advice of the Financial Advisor when
necessary. The financial advisor will be expected to provide planning and analytical
services which extend beyond the issuance of debt. To ensure independence, the
Financial Advisor will not bid on nor underwrite any Town debt issues.

8. Ratings. The rating agencies will be notified either by telephone or through written
correspondence when the Town begins preparation for a debt issuance. After the
initial contact, a formal ratings application will be prepared and sent along with the
draft of the Official Statement related to the bond sale to the rating agencies. This
application and related documentation should be sent several weeks prior to the
bond sale to give the rating agencies sufficient time to perform their review. Meetings
with representatives of the rating agencies should be scheduled every few years or
whenever a major project is initiated.

9. Official Statement. Information for the Official Statement is gathered from
departments throughout the Town. The Finance Director will begin assembling the

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