Lake Authority sticking with Raymond James

The Grady County Lake Authority met with representatives of Raymond James Tuesday morning to discuss the potential refinancing of the 2010 revenue bonds issued to construct the Tired Creek Lake dam.

Clifford C. (Bucky) Kimsey and Tom Owens of Raymond James, who were involved in the original bond issuance of the 2010 series as well as the 2015 series bonds, appeared before the authority this week.

Owens reviewed the history of Raymond James’ involvement in public finance for the county as well as the City of Cairo and Grady County Board of Education. The authority and county engaged Raymond James in 2017 as the underwriter and placement agent for the refinancing of the 2010 bonds.

Owens went on to explain that tax law changes approved in late 2017 delayed the opportunity to refinance the 2010 bonds until Oct. 1, 2020. The Raymond James officials said they notified the local officials of the change in the tax law and put the refinance on hold.

In the meantime, last December the Grady County Commission engaged Davenport & Company as financial advisors. The lake authority met with Davenport representative last Monday, and requested a meeting with Raymond James officials this week.

Owens said he and Kimsey would analyze refinancing opportunities and bring forward a recommendation that was in the best interest of the authority and county.

“We don’t get invited back to do work if we don’t do what is best for our customers,” Owens said.

Grady County Commissioner Ray Prince, who is a member of the authority, asked if the fees for attorneys involved in the transaction would be known in advance. “Last time we didn’t know until after the checks were written,” Prince said.

Owens said Raymond James could assist the county in obtaining the total of attorney’s fees to be charged in the refinance, but he noted that the authority is the “boss” in the transaction and would have more influence in negotiating fees than they would.

The Raymond James officials said that their fee on this particular transaction would be half of one percent. For the 2010 and 2015 bond issues, Raymond James charged one percent in fees. However, Owens said that with the initial issuance in 2010 and 2015 there were “complications” and additional work that had to be done for the transactions to close that would not be the case with a refinancing transaction.

“It’s not as heavy a lift this time. If you ever feel our fees are out of line, please let us know,” Owens said.

Authority member Laura Register thanked Owens and Kimsey for being transparent with their fees. During last week’s meeting with representatives of Davenport & Company the authority could not get an answer on what total fees Davenport would charge if the authority were to utilize their services on refinancing the bonds.

Authority member Eric Cohen asked if the Raymond James officials were willing to negotiate the half of one percent fee. “We think half a percent is fair, but we’re not going to a lose a client over it,” Owens said.

Authority member Bob Ponder acknowledged he was unfamiliar with what fees were reasonable or not and Owens offered to provide the authority with fees charged to other clients for other transactions in Georgia. Owens said one of his bosses had told him early on in his career that if you were not comfortable in your fee being published in the newspaper then you may be charging an excessive fee.

“You probably could find someone to do this transaction for you cheaper than us, but we do a whole lot of these type transactions and we like to think we are pretty good at it. We are more familiar with this county and this project than anyone else and we would be better prepared to answer questions regarding this transaction than anyone else you might could hire to do it cheaper,” Owens said.

Authority member Cohen commented, “cheaper isn’t always better” and he said going cheap can ultimately cost more.

Owens also told members of the authority they did not have an issue if the county would like Davenport working with Raymond James on the project, but he did request that Raymond James serve as the placement agent should it be determined a private placement bank loan was most advantageous to the authority and county.

Authority Vice Chairman Chip Wells, who requested additional time to consider the 2017 engagement letter with Raymond James, said that the issue to be determined on Tuesday was whether or not to honor the engagement letter.

Authority member Register said she had worked with Raymond James previously as a member of the Grady County Board of Education and the board had always been satisfied with the firm’s service.

Wells said if the authority or county never used Raymond James again in the future, but did so on this transaction then the engagement letter would have been honored.

After some additional discussion, Wells offered a motion to honor the engagement letter with Raymond James and maintain the agreement for the firm to serve as the placement agent and underwriter on the refinancing of the 2010 bonds. Authority member Register seconded the motion and it passed unanimously 5-0. Authority Chairman Steven Childs and Authority member Stephen Frances were absent Tuesday.

In other business Tuesday, the authority appointed Register to serve as the authority’s representative on the Archway Partnership executive committee.