UNDERWRITING SERVICES WASTEWATER REVENUE BONDS

CITY OF HAILEY BLAINE COUNTY, IDAHO REQUEST FOR PROPOSAL FOR UNDERWRITING SERVICES WASTEWATER REVENUE BONDS, SERIES 2023 City of Hailey Request for Proposals: Underwriting Wastewater Revenue Bonds, Series 2023 Page 2 PURPOSE: The City of Hailey (the City) seeks to retain the services of a qualified underwriting firm to prepare and market Wastewater Revenue Bonds, Series 2023 (the 2023 Bonds) in an amount of approximately $6 million. The 2023 Bonds are being issued to (i) finance the costs of design, acquisition and construction of improvements to the wastewater treatment system and facilities of the City (the Improvements), and (iii) finance the Costs of Issuance of the 2023 Bonds. The 2023 Bonds were approved at a May 16, 2023 election held in the City, receiving 89.29% approval of the 850 votes that were cast. The underwriter will work closely with the Citys core financing team, which includes the following individuals and firms City of Hailey Lisa Horowitz, City Administrator Becky

Stokes, Treasurer Brian Yeager, Public Works Director Bond Counsel /Disclosure Counsel Hawley Troxell Ennis & Hawley Michael Stoddard, Chelsea Porter & Brandon Helgeson Municipal Advisor Eric Heringer; Piper Sandler & Co. DUE DATE: 4:00 p.m. (Mountain Time) on August 23, 2023 City of Hailey Request for Proposals: Underwriting Wastewater Revenue Bonds, Series 2023 Page 3 SECURITY FOR THE BONDS The 2023 Bonds will be issued on parity with the Citys outstanding wastewater system debt that is evidenced by a 2014 Loan Agreement with the Idaho Bond Bank Authority (the IBBA Loan Agreement or the 2014 Debt). Current debt outstanding under the IBBA Loan Agreement is $5,495,000 with a final maturity in 2034. The 2014 Loan Agreement with the IBBA is included with this RFP package. Provisions of the 2014 Loan Agreement include: Standard System Net Revenue pledge (however hook-on fees are not included in the definition of Revenues) Debt Service Reserve Fund (DSRF) requirement if coverage is less than 1.5x Additional Bonds Test (ABT) see section 4.3 of the IBBA Loan Agreement Rate Stabilization Fund HISTORICAL COVERGE The table below outlines historic debt service coverage from System Net Revenues for the past 5 years. Actual Actual Actual Actual Actual 2018 2019 2020 2021 2022 OPERATING REVENUES Total Operating Revenues 2,007,893 1,973,676 2,179,656 2,192,452 2,439,202 OPERATING EXPENSES Salaries and Benefits 355,591 611,865 652,429 666,398 869,752 Administrative and supplies 703,740 464,390 601,780 626,527 608,178 Depreciation 484,196 675,639 493,443 494,327 518,258 Total Operating Expenses 1,543,527 1,751,894 1,747,652 1,787,252 1,996,188 NET OPERATING INCOME 464,366 221,782 432,004 405,200 443,014 Add: Investment/Interest income 63,189 109,899 79,383 16,117 28,503 Add: Depreciation expense 484,196 675,639 493,443 494,327 518,258 AVAILABLE FOR DEBT SERVICE 1,011,751 1,007,320 1,004,830 915,644 989,775 DEBT SERVICE Series 2014C Wastewater Revenue Bonds 297,175 295,875 298,925 295,425 566,925 Series 2012D Wastewater Revenue Bonds 269,700 270,000 270,400 270,400 - Series 2023 Wastewter Revenue Bonds - - - - - Total Debt Service 566,875 565,875 569,325 565,825 566,925 DEBT SERVICE COVERAGE (Recurring Revenues) 1.78 1.78 1.76 1.62 1.75 Hookups, connections, and fees 101,050 107,534 179,168 352,935 483,066 Grant Revenue - - - - - DEBT SERVICE COVERAGE (Including Non-recurring Revenues) 1.96 1.97 2.08 2.24 2.60 City of Hailey Request for Proposals: Underwriting Wastewater Revenue Bonds, Series 2023 Page 4 OTHER RELEVANT FINANICAL INFORMATION The City plans to adopt a wastewater system user fee rate increase that will be effective October 1, 2023 (beginning of FY 2024 fiscal year). The City has historically included a bond payment component as part of its monthly Base Fee for the Wastewater System. The DSRF is cash funded with a current balance of $632,512. The City has established a Rate Stabilization Fund (RSF) with a current balance of $868,303. The DSRF will be increased from available funds of the City (not financed). PROPOSED DEBT STRUCTURE The City intends to wrap the Series 2023 Bond payment around the existing 2014 Debt with a 20-year final maturity. It is likely that the Series 2023 Bonds will be interest only through the 2034 final maturity of the 2014 Debt. The following is an illustration of the preliminary structure for the Series 2023 Bonds: BASIC DOCUMENTATION Hawley Troxell (Bond & Disclosure Counsel) will draft the Preliminary and Final Official Statement, Bond Ordinance and ancillary financing documents. Debt Service City of Hailey Wastewater Debt Profile m Existing Bonds (2014) Proposed Bonds (2023) $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 so PLP LI LPP LLL LI PELE PLP LL Leh Fiscal Year City of Hailey Request for Proposals: Underwriting Wastewater Revenue Bonds, Series 2023 Page 5 CALENDAR OF EVENTS The following calendar will generally be adhered to for the selection process. The City, however, reserves the right to alter this calendar as it deems necessary. July 24, 2023 Circulate RFP August 23, 2023 RFP responses due August 24-25, 2023 Evaluate RFP responses August 28, 2023 Make selection of underwriting firm (City Council) October 17, 2023 Anticipated Pricing October 31, 2023 Close Financing PROPOSAL SUBMISSION REQUIREMENTS All responses and any questions and/or requests for information should be submitted to both: Lisa Horowitz City Administrator Eric Heringer Municipal Advisor Email: lisa.horowitz@haileycityhall.org Phone: (208) 788-4221 Email: eric.heringer@psc.com Phone: (208) 344-8561 Please deliver an electronic PDF copy by email to Lisa Horowitz and Eric Heringer no later than 4:00 p.m. (Mountain Time) on August 23, 2023. Please provide any questions regarding the RFP by no later than August 16, 2023 to allow adequate time to respond. Late proposals may not be accepted. The City and its Municipal Advisor, Piper Sandler & Co. (PSC), are familiar with the general capabilities of your firm. This Request for Proposals (the RFP) has been designed to solicit specific responses to the questions asked. Brief, to the point, responses are preferred and therefore we request that responses be limited to succinct responses to the questions that are being asked. City of Hailey Request for Proposals: Underwriting Wastewater Revenue Bonds, Series 2023 Page 6 TERM OF AGREEMENT The term of the agreement shall be for the 2023 Bonds specified in this RFP. SCOPE OF WORK The scope of work requested by this RFP includes: Become a member of the Citys financing team for the 2023 Bond issue; Provide input regarding the structure and terms of the 2023 Bond issue; Provide input regarding the Citys disclosure and legal documents (draft disclosure and legal documents will be prepared by Hawley Troxell). Provide input regarding the rating presentation(s) and participate in those presentations by phone or virtual meeting(s) if requested; Develop a marketing plan for the 2023 Bonds based on rating outcome to maximize results for the City; Advise on market conditions and timing of the 2023 Bond sale; Provide a thorough distribution of the issue and be willing to underwrite unsold balances if warranted; Execute a definitive Bond Purchase Agreement; and Assist in closing the Bonds. SELECTION CRITERIA The City intends to select a firm to serve as an underwriter on the 2023 Bonds as described above. The City intends to make a decision on awarding this RFP by August 28, 2023. However, the City reserves the right to modify this date and forgo, without cause, the selection process. General criteria for selection will include the following factors: 1. Qualification and experience of assigned personnel..............................30% 2. Experience and underwriting capabilities of firm...................................30% 3. Marketing and structuring recommendations .......................................10% 4. Estimated pricing, proposed fees, and expenses ...................................30% City of Hailey Request for Proposals: Underwriting Wastewater Revenue Bonds, Series 2023 Page 7 CONTENT OF PROPOSAL Your proposal must include the following: (1) Team Description a) Please provide the name, title, address, telephone, and e-mail of the banker who will serve as your firms lead contact. Include a brief rsum for this individual that includes his or her years of experience in this role. b) Please provide the name, title, address, telephone, and e-mail of the individual who will serve as your firms lead underwriter. Include a brief rsum for this individual that includes his or her years of experience in this role. c) Please provide contact information for any other core team members who would work on the proposed transaction. Please summarize the function of these individuals within your organization as well as their professional background and experience. d) Please provide information concerning any legal or disciplinary events in the last 10 years with a securities regulatory body involving the individuals identified in a), b) or c) above. (2) Experience and Underwriting Capability a) Please provide, in an appendix, a list of comparable water or wastewater revenue bonds for which your firm has acted as the senior managing underwriter since January 1, 2020. Include both the ratings and the par amount of each issue. Please total the columns detailing the number of transactions and the par amounts. b) Please provide a statement of the net underwriting capital of your firm as of March 31, 2023 (do not include capital of any firm without full common ownership with your own). c) Please provide three narrative examples from the last twelve months of your firms willingness to put your capital at risk by underwriting unsold balances. (3) Market and Structure Recommendations a) Please provide your opinion regarding which rating agency or agencies to utilize for this issuance. b) Briefly describe market conditions for Bank-Qualified bonds and the types of investors you anticipate participating in the 2023 Bond sale given recent market conditions. City of Hailey Request for Proposals: Underwriting Wastewater Revenue Bonds, Series 2023 Page 8 c) Please provide your estimate of yields for this issue under a tax-exempt (Federal and State of Idaho) structure as of August 17, 2023. Using the sample amortization provided below, please provide the spread to the August 17th end-of-day MMD scale (no interpolation) on a maturity-by-maturity basis. Include term bonds where you deem appropriate. Please provide estimates based on the following ratings & optional redemption features: 1. S&P A underlying rating without bond insurance, bank qualified, 5% coupon structure, 9/15/2033 first call date. 2. S&P A underlying rating with bond insurance, bank qualified, 5% coupon structure, 9/15/2033 first call date. (4) Fees and Expenses a) Please provide your proposed maturity-by-maturity takedowns for this issue, as well as a detailed breakdown of other fees and expenses. Please include dollar amounts of estimated expenses and include the cost of the Gameday service from IPreo, or another comparable service. Do not include expenses that the underwriter is not traditionally responsible to pay. b) Please indicate whether your firm will require the use of underwriters counsel. If yes, please provide an estimated or not-to-exceed cost for your counsels services. The City has retained Hawley Troxell Ennis & Hawley (Boise, ID) as disclosure counsel, who will draft the Preliminary and Final Official Statements and render a 10b-5 opinion on which the underwriter may rely. Year Coupon Principal 9/15 MMD Yield Spread to MMD 2035 5.00% 545,000$ 2036 5.00% 570,000 2037 5.00% 600,000 2038 5.00% 630,000 2039 5.00% 660,000 2040 5.00% 695,000 2041 5.00% 730,000 2042 5.00% 765,000 2043 5.00% 805,000 City of Hailey Request for Proposals: Underwriting Wastewater Revenue Bonds, Series 2023 Page 9 ADDITIONAL INFORMATION The City creates no obligation, expressed or implied, of any kind or description in issuing this RFP or receiving a response. Neither the RFP nor the response shall be considered as a legal offer. The City anticipates completing the 2023 Bond sale contemplated in this RFP by October 31, 2023 at the latest; however it is possible that the City will choose to postpone the 2023 Bond sale or abandon the 2023 Bond sale plans entirely. The City assumes no responsibility or liability for any expense incurred by a respondent or prospective respondents in connection with the preparation or delivery of a response, or any action related to the process of completing and submitting a response to this RFP. The City reserves the right to reject any and all submissions without cause, waive irregularities in all procedures related to the RFP, make inquiries of responding firms and their references and clients regarding qualifications or information submitted as part of a response, as deemed necessary, and request and receive additional information as the City deems necessary. The City shall be deemed the owner of all information and papers submitted by a respondent. Respondents responses are public records and are subject to disclosure. Additional documents Included in Financing Package: 2014 Idaho Bond Bank Authority Loan Agreement FY 2022 Audited Financial Statements Additional financial statements can be obtained from the Cities website here: https://haileycityhall.org/city-administration/finance-and-records/