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Home My WebLink About2024-05-06 I01H_01 Engagement Agr_BCC AdvisersAGENDA ITEM: CITY OF WAUKEE, IOWA CITY COUNCIL MEETING COMMUNICATION MEETING DATE: May 6, 2024 AGENDA ITEM:Consideration of approval of a resolution approving Engagement Agreement [BCC Advisers] FORMAT:Consent Agenda SYNOPSIS INCLUDING PRO & CON: As a part of the long-term discussion related to the City’s municipal gas utility, an appraisal is requested to perform a fair market appraisal of the utility. The appraisal will be based on economic and market conditions as they existed on 12/31/23. FISCAL IMPACT INCLUDING COST/BENEFIT ANALYSIS: $20,000 COMMISSION/BOARD/COMMITTEE COMMENT: STAFF REVIEW AND COMMENT: Staff would recommend approval. This is one of two appraisals that are proposed to be completed. RECOMMENDATION: Approve the resolution ATTACHMENTS: I. Proposed Resolution II. Engagement Agreement PREPARED BY:Brad Deets, City Administrator REVIEWED BY: PUBLIC NOTICE INFORMATION – NAME OF PUBLICATION: DATE OF PUBLICATION: I1H1 THE CITY OF WAUKEE, IOWA RESOLUTION 2024- APPROVING ENGAGEMENT AGREEMENT FOR PROFESSIONAL SERVICES WITH BCC ADVISERS IN THE NAME AND BY THE AUTHORITY OF THE CITY OF WAUKEE, IOWA WHEREAS, the City of Waukee, Dallas County, State of Iowa, is a duly organized Municipal Organization; AND, WHEREAS, the City Council as a part of a long-term strategy is determining the future of the municipal gas utility; AND, WHEREAS, the City in order to understand the value of the utility is requesting two appraisals be performed; AND, WHEREAS, staff is recommending approval of an Engagement Agreement with BCC Advisers to perform one of the two fair market value appraisals. NOW THEREFORE BE IT RESOLVED that the City Council of the City of Waukee formally approves the attached engagement agreement with BCC Advisers for a fair market appraisal. Passed by the City Council of the City of Waukee, Iowa, and approved the 6th day of May, 2024. ____________________________ Courtney Clarke, Mayor Attest: ___________________________________ Rebecca D. Schuett, City Clerk RESULTS OF VOTE: AYE NAY ABSENT ABSTAIN Anna Bergman Pierce R. Charles Bottenberg Chris Crone Robert Grove Ben Sinclair MERGERS & ACQUISITIONS BUSINESS VALUATION LITIGATION SUPPORT 1707 High Street • Des Moines, IA 50309 • 515.282.8019 • www.bccadvisers.com This ENGAGEMENT AGREEMENT is made between BCC Advisers (“BCC”) and City of Waukee (“Client”) for business appraisal services. 1. DESCRIPTION. Client engages BCC as an independent business appraiser to perform a fair market appraisal (“Appraisal”) of Waukee Municipal Gas Utility ("Utility") and present it in an Appraisal Report (“Report”). The Appraisal will be based on economic and market conditions as they existed on December 31, 2023. 2. PURPOSE. Client’s purpose for the Appraisal is for a potential transaction. The intended users are the City of Waukee and their professional advisors. 3. PROFESSIONAL STANDARDS & CONDITIONS. The Appraisal will conform to the standards of the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation, the American Society of Appraisers’ Business Valuation Standards, Principles of Appraisal Practice and Code of Ethics, and the American Institute of Certified Public Accountants’ Statement on Standards for Valuation Services. The Report will be subject to the conditions listed in Exhibit “A” of this Agreement. The Appraisal does not include appraisal of real property or personal property. 4. COMPENSATION. Client will pay BCC a fee of $20,000 plus reimbursable expenses, if any. An advance fee of $10,000 is due and payable when this Agreement is signed. BCC may provide a progress billing with a preliminary draft of the Report, and the final balance of the fee plus reimbursable expenses is due when the final Report is delivered. The fee is in no way contingent on BCC’s opinion of value in the Report. Fees for any required additional services (additional consulting, expert testimony, depositions, etc.), will be billed, additionally, at the hourly rate of the BCC personnel assigned. Fees for substantial revisions (at BCC’s discretion) to the Report after the draft report is issued will be billed, additionally, at the hourly rate of the BCC personnel assigned. 5. SERVICE CHARGE. For any balances past due 30 days from date of invoice, Client will pay a service charge of 1 ½% per month (18% annually), accruing from the date of the invoice. Client will also reimburse BCC for any fees or expenses incurred by BCC in enforcing the provisions of this agreement. 6. INFORMATION. Client will provide BCC with complete and accurate information as requested by BCC. 7. MODIFICATION. Any waiver or modification of this Agreement or any of its terms or conditions must be in writing and signed by each party. 8. LIMITATION OF LIABILITY. Client indemnifies BCC, its shareholders, and employees against any losses and liabilities except in the event of a material breach of accepted professional standards, negligence, or misconduct by BCC. BCC’s liability for all claims, damages, and costs of Client arising from this engagement is limited to the limits of professional liability insurance held by BCC. 2 9. TERMINATION. Client may terminate this Agreement with written notice to BCC. BCC may terminate this Agreement with written notice to Client for any of these reasons: a. Non-payment of invoices. b. Failure to provide accurate and timely information requested by BCC. c. Information that causes BCC to conclude that it is unlawful, unethical, or inappropriate to continue preparing the Report. 10. CONFIDENTIAL INFORMATION. BCC will treat as confidential any information received in the course of the engagement. 11. NOTICE. Any notice must be provided to: BCC Advisers PFM Attn. Matt J. Fett Attn. Benjamin Kapenstein matt@bccadvisers.com kapensteinb@pfm.com 12. GOVERNING LAW. This Agreement is governed by the laws of the State of Iowa. 13. SURVIVAL. Sections 4, 5, 8 and 10 continue after any termination of this Agreement. 14. NO OUTSIDE AGREEMENT. This contract contains the complete agreement and supersedes all other agreements between the parties. EXECUTED April 5, 2024. BCC: Client: BCC Advisers City of Waukee BY: ___________________________________ BY: ___________________________________ Matt J. Fett, CFA, ASA Vice President 3 EXHIBIT A STATEMENT OF CONTINGENT AND LIMITING CONDITIONS The Appraisal will be performed subject to the following general contingent and limiting conditions, a copy of which will be incorporated into the final Appraisal: 1. The analyses, opinions, and conclusions presented in this Appraisal Report apply to this engagement only and may not be used out of the context presented. This Appraisal Report is valid only for the effecƟve date(s) and purpose(s) speciﬁed. 2. BCC Advisers has compiled summary ﬁnancial data and raƟos in the Appraisal and various exhibits. The data in these exhibits represent ﬁnancial data extracted from the UƟlity's historical ﬁnancial statements as well as other sources. BCC Advisers has not audited or reviewed this ﬁnancial data and expresses no opinion or other form of assurance on it. The ﬁnancial summaries presented in the exhibits do not consƟtute a complete presentaƟon of the UƟlity’s ﬁnancial statements under generally accepted accounƟng principles. 3. Public informaƟon, as well as industry and staƟsƟcal informaƟon, has been obtained from sources believed to be reliable. However, BCC Advisers makes no representaƟon as to the accuracy or completeness of the informaƟon and has performed no procedures to corroborate the informaƟon. 4. The projecƟons of earnings or cash ﬂows used in the analysis are solely to assist in the development of the calculated value(s) presented in this Appraisal. These presentaƟons do not include all disclosures required by the guidelines established by the American InsƟtute of CerƟﬁed Public Accountants for the presentaƟon of a ﬁnancial projecƟon. The projecƟons have been based upon idenƟﬁed assumpƟons. Some of the assumpƟons may not materialize and unanƟcipated events may occur resulƟng in variaƟons from the projecƟon in actual results which may be substanƟal. Therefore, BCC Advisers expresses no assurance on these projecƟons. 5. BCC assumes responsible ownership and competent management of the subject assets, properƟes, or business interests. The calculated value(s) assume that the current level of management experƟse and effecƟveness conƟnues to be maintained, and that the character and integrity of the enterprise through any sale, reorganizaƟon, exchange, or diminuƟon of owners’ parƟcipaƟon would not be materially or signiﬁcantly changed. 6. BCC assumes that the UƟlity is fully compliant with all applicable Federal, state, and local regulaƟons and laws unless the lack of compliance is stated, deﬁned, and considered in the Appraisal. Unless otherwise stated, no effort has been made to determine any possible effect on the subject business due to future federal, state, or local legislaƟon, including any environmental or ecological maƩers or interpretaƟons thereof. 7. BCC assumes that all required licenses, cerƟﬁcates of occupancy, consents, or legislaƟve or administraƟve authority from any local, state, or naƟonal government, or private enƟty or organizaƟon have been or can be obtained or reviewed for any use on which the analyses contained in this Appraisal are based. 4 8. Unless otherwise stated in this report, BCC Advisers did not observe and has no knowledge of, the existence of hazardous materials with regard to the subject assets, properƟes, or business interests. However, BCC is not qualiﬁed to detect such materials and assumes no responsibility for these condiƟons or for any experƟse required to discover them. 9. This Appraisal and the conclusion of value are for the exclusive use of our Client for the sole and speciﬁc purposes stated. The Appraisal may not be used for any other purpose or by any other party for any purpose. Furthermore, the Appraisal and calculated value(s) are not intended by BCC Advisers, and should not be construed by the reader, to be investment advice. 10. No change to any item in this Appraisal shall be made by anyone other than BCC Advisers, and BCC shall have no responsibility for any unauthorized change. 11. Neither all nor any part of the contents of this Appraisal (including the calculated value(s), the idenƟty of any valuaƟon specialists, the ﬁrm with which the valuaƟon specialists are associated, or any reference to any of their professional designaƟons) shall be disseminated to the public through adverƟsing, media, public relaƟons, news media, sales media, mail, direct transmiƩal, or any other means of communicaƟon without the prior wriƩen consent and approval of BCC Advisers. 12. Future services regarding the subject maƩer of this Appraisal including, but not limited to, tesƟmony or aƩendance in court, shall not be required of BCC Advisers unless previous arrangements have been made in wriƟng. 13. BCC Advisers has conducted interviews with current management of the subject business concerning past, present, and prospecƟve operaƟng results of the UƟlity. 14. Except as noted, BCC Advisers has relied upon the representaƟons of the owners, management, and other third parƟes concerning the value and useful condiƟons of all equipment, real estate, investments used in the business, and any other assets or liabiliƟes, except as otherwise stated in the Appraisal. BCC has not aƩempted to conﬁrm whether all assets of the business are free and clear of liens and encumbrances or whether the enƟty holds good Ɵtle to all assets. BCC Advisers assumes no hidden or unapparent condiƟons regarding the subject assets, properƟes, or business interests.