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HomeMy WebLinkAbout11/07/1995, C-9 - RENEW FINANCIAL ADVISOR AGREEMENT WITH EVENSEN DODGE City Of San LUIS OBI SPO MEETING A MiS COUNCIL AGENDA EPORT ITEM NUMB FROM: Bill Statler, Director of Financeww , Prepared by: Linda Asprion, Revenue Manager SUBJECT: RENEW FINANCIAL ADVISOR AGREEMENT WITH EVENSEN DODGE CAO RECOMN ENDATION Authorize the Mayor to execute an agreement with Evensen Dodge to retain their services as the City's financial advisor. DISCUSSION Background On March 2, 1988 the Council approved the selection of Evensen Dodge as the City's financial advisor and authorized the execution of an agreement with annual renewals for four years. The selection of this firm was based on an evaluation of eleven proposals solicited through a request for proposal (RFP) process which outlined the workscope for the chosen financial advisor. In addition to work related to preparing a comprehensive financial management plan which was presented to the Council in 1989, the workscope also included the following financial advisor services for debt financings: ■ Presale analysis addressing items such as issue size, security and call features, credit enhancements and rating strategies, sale methods (competitive or negotiated), principal payment schedules, maturity periods, and financing schedules. ■ Preparation of financing documents such as the Official Statement. ■ Coordination with rating agencies. ■ Marketing of issues. ■ Closing and post-sale analysis. The agreement with Evensen Dodge was renewed in April, 1993 with annual renewals not to exceed three years. Accordingly, this agreement will expire in April, 1996. Evensen Dodge has served as the City's financial advisor for four financings - the 1988 Water Fund Certificates of Participation, the General Fund 1990 Certificates of Participation, the 1993 Water Revenue Bonds, and the 1994 Refunding of the 1986 Lease Revenue Bonds. In addition to these specific financings, Evensen Dodge has provided on-going financial advice to the City at no cost. Notable examples include advice and presentations on seismic retrofit and water desalination. e 9-1 I��n�►�i�II►IIIIIIIIIII10jIIUIII city of San US OBISPO COUNCIL AGENDA REPORT Why does the City need a financial advisor? Financial advisors provide two key services: ■ Specific assistance on a case-by-case basis for project financings. These require specific marketing and technical skills that cannot reasonably be provided by staff. ■ On-going advice and assistance on the best approach in meeting the City's capital financing needs. As noted above, recent examples include advice and presentations on assisting private property owners in financing seismic retrofits and constructing a turn- key water desalination plant. Because of our on-going relationship with Evensen Dodge, these services were provided at no cost to the City. What are the key provisions of the proposed agreement? The proposed agreement with Evensen Dodge is for a period of one year and may be renewed by the City Administrative Officer annually for a cumulative period not to exceed three years. Their compensation is 'based on the same fee structure as the 1993 agreement, which was reduced from the fee structure in the 1988 agreement. A letter from Evensen Dodge confirming the retention of the current fee structure for the City is provided in Attachment A. It should be noted that payment for financial advisor services is entirely contingent upon the delivery of a financing issuance and all fees are paid solely from the proceeds of the issuance and from no other City funds. Why should the City continue to use Evensen Dodge as financial advisor? Evensen Dodge has provided outstanding service to the City at a very competitive cost. As we go forward with financing key capital projects in the 1995-97 Financial Plan - performing arts center, headquarters fire station, City Hall HVAC, Mission Plaza expansion, and purchase of the Matthew's property - continuity of sound financial advice will be extremely important to us. Additionally, their advice will also be important as we prepare open space, seismic retrofit and sewer lateral rehabilitation financing plans. FISCAL IMPACT As indicated above, the financial advisor's compensation is entirely contingent on the completion of a debt issuance and is payable solely from the proceeds of the issuance and from no other City funds. The proposed compensation schedule is unchanged from that agreed upon three years ago, summarized as follows: $9,000.00 plus $2.00 per thousand of the first $5 million of the issue, plus $1.00 per thousand on the next $5 million of the issue, plus $0.50 per thousand for any amounts in excess of$10 million. This would result in fees as follows: I ����n�►�I►II�IIIII�IIilll����.city Of San pais OBI SPO mm!; COUNCIL AGENDA REPORT Debt Issue Size Fee $5 million $19,000 $10 million $24,000 $15 million $26,500 The compensation indicated above does not cover out-of-pocket issuance costs such as the cost of printing and distributing the Oficial Statement, publication costs, legal fees, rating fees, travel, marketing, printing of bonds and closing costs, and any other expenses necessarily incurred for the issue. SUMMARY Evensen Dodge has proven themselves as a trustworthy financial advisor who can examine the City's financing needs, review alternatives (including pay-as-we-go financing), structure and size the financing to meet our needs, coordinate the financing of the project, design and implement a bond marketing plan and sell the issue in a variety of changing markets. Evensen Dodge is a long-standing firm employing individuals with experience, integrity, and excellent technical abilities, and is nationally one of the largest independent financial advisors. As such, we recommend approval of the agreement. ATTACHMENT A. Letter from Evensen Dodge confirming retention of fee schedule B. Agreement for Financial Advisor Services 9-3 Attachment EVENSEN DODGE INC I , . . ♦ . . A i C !) S .. I i October 4, 1995 Ms. Linda Asprion Revenue Officer City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93403 Dear Ms. Asprion, Thanks for taking some time out to speak with me this morning. As you requested, I've reviewed the compensation section of the Agreement for Financial Advisor Services (No. A-37-93-CC) between Evensen Dodge and the City. The fee section incorporated into the 1993 agreement is representative of the fees we quote today for new arrangements. You may recall that when the agreement was re-negotiated between our two organizations in 1993, there was a downward revision to the maximum fees payable for our services. Accordingly, we are pleased to be able to offer this same fee arrangement for the renewal period of the agreement. Please feel free to call me if you have any further questions. We are pleased to be of continuing service. Very truly yours, EVENSEN DODGE, INC. W�j4NVu Timothy J. Schaefer Senior Vice President 650 Town Carter Drive,Suite 595 Costa Mesa,CA 92626 �! 7141545-1212 8001322-0171 FAX 7141557-9126 �r Attachment"L AGREEMENT FOR FINANCIAL ADVISOR SERVICES THIS AGREEMENT is made and entered into in the City of San Luis Obispo on this day of . by and between the CITY OF SAN LUIS OBISPO, a municipal corporation, hereinafter referred to as City, and EVENSEN DODGE, INC., hereinafter referred to as Financial Advisor. WITNESSETH: WHEREAS, the City desires to retain the services of the Financial Advisor in conjunction with any debt financings that the City may issue over the next three years; and WHEREAS, City desires to engage Financial Advisor to provide these services by reason of its qualifications and experience for performing such services, and Financial Advisor has offered to provide the requested services on the terms and in the manner set forth herein. NOW THEREFORE, in consideration of their mutual promises, obligations, and covenants hereinafter contained, the parties hereto agree as follows: 1. TERM. The term of this Agreement shall be from the date of this Agreement is made and entered, as first written above, for a period of one year and may be renewed annually thereafter by the City Administrative Officer for a cumulative period not to exceed three years from the date of this Agreement. 2. PROGRAM COORDINATION. A. City. The Director of Finance or designated representative shall be the Program Manager representing the City for all purposes under this agreement. The Program Manager shall supervise the progress and execution of this agreement. B. Financial Advisor. Financial Advisor shall assign a single Program Manager to have overall responsibility for the progress and execution of this agreement for Financial Advisor. 3. CITY'S OBLIGATIONS. City agrees to cooperate with Financial Advisor in its performance of work. For furnishing financial advisor services as specified in this agreement, City will pay and Financial Advisor shall receive compensation based on the size of each debt financing as follows: A. $9,000.00 plus $2.00 per thousand of the first $5 million of the issue, plus $1.00 per thousand on the next $5 million of the issue, plus $0.50 per thousand for any amounts in excess of$10 million. C�S� B. The compensation indicated above does not cover out-of-pocket issuance costs such as the cost of printing and distributing the Official Statement, publication costs, legal fees, rating fees, travel, marketing, printing of bonds and closing costs, and any other expenses necessarily incurred for the issue. At the request of the City, the financial Advisor may pay some or all of these out-of-pocket issuance costs and submit a summary billing to the City for reimbursement. C. Payment of compensation shall be entirely contingent, and shall be due and payable, upon the delivery of the financing issuance; and shall be payable solely from the proceedings of the issuance and from no other funds of the City. 4. DUTIES OF FINANCIAL ADVISOR. A. Services to be furnished. The Financial Advisor shall provide the services as described in Exhibit A. B. Laws to be observed. Financial Advisor shall: 1. Procure all permits and licenses, pay all charges and fees, and give all notices which may be necessary and incidental to the due and lawful prosecution of the services to be performed by the Financial Advisor under this agreement; 2. Keep itself informed of all existing and proposed federal, state and local laws, ordinances, regulations, order, and decrees which may affect those engaged or employed under this agreement, and materials used in Financial Advisor's performance under this agreement, or the conduct of the services under this agreement. 3. At all times observe and comply with and cause all of its employees to observe and comply with all said laws, ordinances, decrees and orders mentioned above. C. Release of reports and information. Any reports, information, data or other material given to,or prepared or assembled by, Financial Advisor under this agreement shall be the property of City and shall not be made available to any individual or organization by Financial Advisor, except in fulfillment of Financial Advisor's duties under law or under this agreement. D. Qualifications of Financial Advisor. Financial Advisor represents that it is qualified to furnish the services described under this agreement. 5. AMENDMENTS. Any amendment, modification, or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the Council of the City. 6. COMPLETE AGREEMENT. This written Agreement, including all writings specifically incorporated herein by reference, shall constitute the complete agreement between the parties hereto. No oral agreement, understanding, or representation not reduced to writing and specifically incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding, or representation be binding upon the parties hereto. 7. IMMIGRATION ACT OF 1986. Financial Advisor warrants on behalf of itself and all subcontractors engaged for the performance of this work that only persons authorized to work in the United States pursuant to the Immigration Reform and Control Act of 1986 and other applicable laws shall be employed in the performance of the work hereunder. 8. NON-DISCRIMINATION. In the performance of this work, Financial Advisor agrees that it will not engage in,nor permit such subcontractors as it may employ, to engage in discrimination in employment of persons because of age, race, color, sex, national origin or ancestry, sexual orientation, or religion of such persons. 9. WORK DELAYS. Should Financial Advisor be obstructed or delayed in the work required to be done hereunder by changes in the work or by any default, act, or omission of the City, or by strikes, fire, earthquake, or any other Act of God, or by the inability to obtain materials, equipment, or labor due to federal government restrictions arising out of defense or war programs, then the time of completion may, at the City's sole option, be extended for such periods as may be agreed upon by the City and Financial Advisor. In the event that there is insufficient time to grant such extensions prior to the completion date of the contract, the City may, at the time of acceptance of the work, waive liquidated damages which may have accrued for failure to complete on time, due to any of the above, after hearing evidence as to the reasons for such delay, and making a finding as to the causes of same. 10. INTERESTS OF FINANCIAL ADVISOR. Financial Advisor covenants that it presently has no interest, and shall not acquire any interest direct or indirect or otherwise, which would conflict in any manner or degree with the performance of the work hereunder. Financial Advisor further covenants that, in the performance of this work, no subcontractor or person having such an interest shall be employed. Financial Advisor certifies that no one who has or will have any financial interest in performing this work is an officer or employee of the City. It is hereby expressly agreed that, in the performance of the work hereunder, Financial Advisor shall at all times be deemed an independent contractor and not an agent or employee of the City. 11. HOLD HARMLESS AND INDEMNIFICATION. Financial Advisor agrees to defend, indemnify, protect and hold the City and its agents, officers and employees harmless from and against any and C'-9- 7 all claims asserted or liability established for damages or injuries to any person or property, including injury to ,Financial Advisor employees, agents or officers which arise from or are connected with or are caused or claimed to be caused by the acts or omissions of Financial Advisor, and its agents, officers or employees, in performing the work or services herein, and all expenses of investigating and defending against same; provided, however, that Financial Advisor's duty to indemnify and hold harmless shall not include any claims or liability arising from the established sole negligence or willful misconduct of the City, its agents, officers or employees. 12. CONTRACT ASSIGNMENT. Financial Advisor shall not assign,transfer, convey or otherwise dispose of the contract, or its right, title or interest, or its power to execute such a contract to any individual or business entity of any kind without the previous written consent of the City. 13. TERMINATION. If,during the term of the contract, the City determines that Financial Advisor is not faithfully abiding by any term or condition contained herein, the City may notify Financial Advisor in writing of such defect or failure to perform; which notice must give Financial Advisor a 10 (ten) calendar day notice of time thereafter in which to perform said work or cure the deficiency. If Financial Advisor has not performed the work or cured the deficiency within the ten days specified in the notice, such shall constitute a breach of the contract and the City may terminate the contract immediately by written notice to Financial Advisor to said effect. Thereafter, neither party shall have any further duties, obligations, responsibilities, or rights under the contract except, however, any and all obligations of Financial Advisor's surety shall remain in full force and effect, and shall not be extinguished, reduced, or in any manner waived by the termination thereof. In said event, Financial Advisor shall be entitled to the reasonable value of its services performed from the beginning date in which the breach occurs up to the day it received the City's Notice of Termination, minus any offset from such payment representing the City's damages from such breach. "Reasonable value" includes fees or charges for goods or services as of the last milestone or task satisfactorily delivered or completed by Financial Advisor as may be set forth in the Agreement payment schedule; compensation for any other work, services or goods performed or provided by Financial Advisor shall be based solely on the City's assessment of the value of the work-in-progress in completing the overall workscope. The City reserves the right to delay any such payment until completion or confirmed abandonment of the project, as may be determined in the City's sole discretion, so as to permit a full and complete accounting of costs. In no event, however, shall Financial Advisor be entitled to receive in excess of the compensation quoted in its proposal. 14. INSPECTION. Financial Advisor shall furnish City with every reasonable opportunity for City to ascertain that the services of Financial Advisor are being performed in accordance with the requirements and intentions of this agreement. All work done and all materials furnished, if any, shall be subject to the City Program Manager's inspection and approval. The inspection of such work shall not relieve Financial Advisor of any of its obligations to fulfill its agreements as prescribed. 15. INSURANCE. Financial Advisor shall provide proof of insurance in accordance with Insurance Requirements as described in Exhibit B attached hereto and incorporated herein by reference. 16. WAIVERS. The waiver by either party of any breach or violation of any term, covenant, or condition of this agreement or by any provision, ordinance, or law shall not be deemed to be a waiver of any subsequent breach or violation of the same or of any other term, covenant, condition, ordinance, or law. The subsequent acceptance by either party of any fee or other money which may become due hereunder shall not be deemed to be a waiver of any preceding breach or violation by the other party of any terms, covenant, or condition of this agreement or of any applicable law or ordinance. 17. COSTS AND ATTORNEY'S FEES. The prevailing party in any action between the parties of this agreement brought to enforce the terms of this agreement or arising out of this agreement may recover its reasonable costs and attorney's fees expended in connection with such action from the other party. 18. NOTICE. All written notices to the parties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows: City City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 Financial Advisor Mr. Timothy J. Schaefer, Senior Vice President Evensen Dodge, Inc. 650 Town Center Drive, Suite 595 Costa Mesa, CA 92626 19. AUTHORITY TO EXECUTE AGREEMENT. Both City and Financial Advisor do covenant that each individual executing this agreement on behalf of each party is a person duly authorized and empowered to execute Agreements for such party. VL3. 30 Y7 I�LV) 1777 V11Y DLV 11NANVL VLtl OV7 l01 14V1 lAVLOi:J W WI2NBSS WHEREOF, the Pies hereto have caused this instrument to be executed the day and year first above written. CITY OF SAN LUIS OBISFO, ATTEST: A Municipal Corporation By: Mayor, Allen Settle City Clerk APPROVEDFinattclal Advisor A6 70 FORM: EVensen Dodge, nc. 2d�?r� By. Timot Sch fer y Senior Vice President EXHIBIT A FINANCIAL ADVISOR SERVICES AGREEMENT WORKSCOPE As specified in the Agreement, Evensen Dodge, Inc. is to provide financial advisor services related to debt issuances when authorized by the City. These services are to include but not be limited to the following: A. Planning and development services, including but not limited to the following: 1. Providing research and advice on aspects of tax exemption and arbitrage in coopetition with the City's Legal Counsel and Bond Counsel as well as assistance in obtaining Internal Revenue Service rulings as deemed necessary. 2. Preparing financing plans and assisting in the preparation and review of preliminary feasibility studies in cooperation with City officials and administrative staff, bond attorneys, accountants, architects and engineers as requested by the City. These studies outline the project costs, funding alternatives and sources, existing debt, future financing, and cash flow considerations. 3. Analyzing the financing to determine methods of strengthening its marketability and to recommend the best method of marketing consistent with current economic and market conditions and increasingly stringent rating agency criteria. 4. Reviewing City plans for all financings during the calendar year to determine whether the financing will be bank eligible under the $10 million small issue exemption and whether the City will be exempt from arbitrage rebate requirements under the $5 million annual volume exemption. 5. Performing a comprehensive analysis to determine the best possible plan of finance, including a test to determine its marketability as well as assistance in determining competitive vs. negotiated sale of bonds or notes. 6. Consulting with established rating agencies regarding the proposed financing; assisting the City in obtaining the most favorable rating possible; and providing assistance and recommendations regarding the selection of registrar/paying agent agencies. 7. Acting as liaison with Bond Counsel and coordinating with other individuals providing information in connection with the proposed financing. 8. Preparing a timetable of events for all concerned leading to the sale and delivery of an offering. 9. Providing general assistance and advice to the City on plans and methods of financing its capital improvement plans and cash flow needs. 10. Attending all meetings requested by City staff to discuss the financing of the project or at which official action will be taken by the City Council on the debt financing. B. Marketing services for competitive issues, including but not limited to the following: 1. Advising on the appropriate terms and conditions of the sale, such as maturity scheduling and other requirements (discount, par, premium, net interest cost, true interest costs, etc.). In conjunction with the above, consulting with the City and advising Bond Counsel concerning necessary covenants, and advising on advantageous features such as parity provisions, reserve requirements, sinking fund payments, redemption provisions, etc. 2. Advising on the timing of the bond sale, taking into consideration such factors as changing economic conditions, current and projected market trends, and convenience to the City. 3. Coordinating with Bond Counsel regarding the preparation of amendments and distribution of the necessary contracts, authorizing resolutions, and other documents involved in the sale of bonds or other methods of financing. 4. Assisting in publicizing the issue in advance with an Official Statement, Notice of Sale, Bid Forms and such other means necessary and advisable to develop nationwide public and institutional interest. 5. Assisting the City in meeting full disclosure requirements and conforming to suggested guidelines when preparing the Official Statement. 6. Distributing of the Official Statement to potential purchasers of the City's securities across the nation; directly contacting those lead underwriters most likely to be syndicate managers; and maximizing efforts to market the City's debt issuance most effectively. 7. Explaining the issue to potential investors by developing a comprehensive list of potential purchasers of the bonds, ensuring that each potential purchaser receives copies of all relevant financial documents, and providing information about the issue. 8. Advertising the bond sale in nationally prominent financial publications in addition to coordinating local publication requirements. 9. Attending the bid opening to assist with the evaluation of bids, and recommending the most favorable bid for award. C. Advisory services for negotiated sales, including but not limited to the following: 1. Advising on the appropriate terms and conditions of the sale, such as maturity scheduling and other requirements (discount, par, premium, net interest cost, true interest costs, etc.). In conjunction with the above, consulting with the City and advising Bond Counsel concerning necessary covenants, and advising on advantageous features such as parity provisions, reserve requirements, sinking fund payments, redemption provisions, etc. 2. Advising on the timing of the bond sale, taking into consideration such factors as changing economic conditions, current and projected market trends, and convenience to the City. 3. Coordinating with Bond Counsel regarding the preparation of amendments and distribution of the necessary contracts, authorizing resolutions, and other documents involved in the sale of bonds or other methods of financing. 4. Assisting in publicizing the issue in advance with an Official Statement, Notice of Sale, Bid Fomes and such other means necessary and advisable to develop nationwide public and institutional interest. 5. Assisting the City in meeting full disclosure requirements and conforming to suggested guidelines when preparing the Official Statement. 6. Advising the City as to the appropriateness of the pricing being proposed by the negotiating underwriter, including interest rate(s), underwriting spread, level of discount, distribution of orders, allocation of spread and the like. - lam'-42 7. Assisting in selection of co-managers, and syndicated members and establishments of order priorities according to MSRB Rule G-11. D. Bond closing services including but not limited to: 1. Directing, coordinating, and supervising bond closing details including proofing bond printing, registration, and delivery in the shortest possible time. 2. Furnishing a prompt, complete reinvestment analysis so that top earnings will result from investing bond proceeds in addition to assisting City staff and the architect/engineer in the draw- down of any funds held in escrow accounts. 3. Directing, coordinating and supervising the organization of the transcript and provision of bond and interest records to the City showing required semi-annual payments and other useful information. 4. Soliciting bids on investment of idle funds, if necessary. E. Final work products relating to each financing, including but not limited to proposing the following: 1. Sale analysis. 2. Offering statement. 3. Two bound volumes of bond issue proceedings and closing documents (if not furnished by bond counsel). 4. Other analyses, including but not limited to an analysis of funding alternatives, cash flow projections, and materials necessary for financial planning and bond sale purposes. Financial advisor has no responsibility to advise the City with respect to legal requirements applicable to the construction of any project, including but not limited to compliance with public bidding requirements, payment of prevailing wages and other matters incident to the contract for such construction, which matters shall be exclusively the responsibility of the City Attorney or other counsel to the City. EXHIBIT B INSURANCE REQUIREMENTS The Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, employees, or subcontractors. Minimum Scope of Insurance. Coverage shall be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001). 2. Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1 (any auto). 3. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. 4. 'Errors and Omissions Liability insurance as appropriate to the consultant's profession. Minimum Limits of Insurance. Consultant shall maintain limits no less than: 1. General Liability: $1,000,000 per occurrence for bodily injury,personal injury and property damage. If Commercial General Liability or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage. 3. Employer's Liability: $1,000,000 per accident for bodily injury or disease. 4. Errors and Omissions Liability: $1,000,000 per occurrence. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials,employees and volunteers;or the Consultant shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Other Insurance Provisions. The general liability and automobile liability policies are to contain,or be endorsed to contain, the following provisions: 1. The City,its officers,officials,employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Consultant; products and completed operations of the Consultant;premises owned,occupied or used by the Consultant;or automobiles owned, leased,hired or borrowed by the Consultant. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, official, employees, agents or volunteers. 2. For any claims related to this project, the Consultant's insurance coverage shall be primary insurance as respects the City,its officers,officials,employees,agents and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Consultant's insurance and shall not contribute with it. 3. Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees, agents or volunteers. 4. The Consultant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 5. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided,cancelled by either patty, reduced in coverage or in limits except after thirty(30)days' prior written notice by certified mail, return receipt requested, has been given to the City. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M.Best's rating of no less than A:VII. Verification of Coverage. Consultant shall furnish the City with a certificate of insurance showing maintenance of the required insurance coverage. Original endorsements effecting general liability and automobile liability coverage required by this clause must also be provided. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before work commences.