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HomeMy WebLinkAboutAGREEMENT FOR PROFESSIONAL SERVICES BETWEEN AUGUSTA, GEORGIA AND DAVENPORT & COMPANY, LLC AGREEMENT FOR PROFESSIONAL SERVICES AUGUSTA,--GEORGIA PROJECT NO. 16-128 THIS AGREEMENT made as of this 19th day of July,2016, (hereinafter called the"execution date")by and between AUGUSTA, GEORGIA, a political subdivision of the State of Georgia (hereinafter referred to as "Augusta"), and Davenport & Company, LLC, a foreign limited liability company organized and existing under the laws of the State of Virginia, (hereinafter referred to as"Contractor"),shall constitute the terms and conditions under which the Contractor shall provide Financial Advisory Service for Augusta,Georgia. WITNES SETH: That for and in consideration of the mutual covenants and agreements herein set forth,Augusta and the Contractor hereby agree as follows: ARTICLE I. CONTRACT TERM As required by O.C.G.A §36-60-13,this Contract shall(i)terminate without further obligation on the part of Augusta each and every December 31st, as required by O.C.G.A. § 36-60-13, as amended,unless terminated earlier in accordance with the termination provisions of this Contract;(ii)automatically renew on each January 1st, unless terminated in accordance with the termination provisions of this Contract; and (iii) terminate absolutely on July 19,2019,unless extended by Change Order adopted and approved by the Augusta,Georgia Governing Authority and the Contractor in accordance with the terms of this Contract. This Contract may be extended for two(2)one(1)year terms by written agreement. ARTICLE II. PAYMENT As full payment for the faithful performance of this Contract,Augusta shall pay the Contractor as defined in the Contractor's Cost Proposal,attached hereto as Attachment A,unless changed by written Change Order in accordance with the terms of this Contract. The term"Change Order" includes the term"amendment" and shall mean a written order authorizing a change in the Work,and an adjustment in Contract Price to Contractor or the Contract Term, as adopted and approved by the Contractor and the Augusta Governing Authority, or the Administrator, if exempted from Governing Authority adoption and approval in accordance with the express terms of this Contract. The Augusta's Administrator or his/her designee shall have authority to approve all change orders to contracts,provided the total change order amount is less than$20,000.00. If the original contract or purchase order price does not exceed $100,000.00,but the Change Order will make the total price of the contract exceed$100,000.00, then the change order requires approval by official action of the Governing Authority. Change Orders to contracts that did not require official action of the Governing Authority upon the original execution thereof and which amend the scope of work, term, time, and/or total Page 1 of 19 cost not exceeding$100,000 may be approved by the Administrator or his/her designees in the same manner as the original contract. Amounts paid to the Contractor shall comply with and not exceed Attachment A,the Contractor's Cost Proposal, consisting of one(1)page attached hereto and incorporated herein by reference. Payment is to be made no later than thirty(30)days after submittal of undisputed invoice. Original Invoice(s)must be submitted to: AUGUSTA,GEORGIA ATTN:FINANCE DEPARTMENT DIRECTOR 535 TELFAIR STREET, SUITE 800 AUGUSTA, GOERGIA 30901-2386 ARTICLE III. SCOPE OF WORK The Contractor agrees to provide Financial Advisory Service in accordance with Augusta's Request for Proposal(RFP)No. 16-128 for Financial Advisory Services,attached hereto as Appendix I and incorporated herein by reference, and the Contractor's response thereto, attached hereto as Appendix II and incorporated herein by reference. The Contractor's services shall include all things,personnel, and materials necessary to accomplish specific projects authorized by Augusta. ARTICLE IV. GENERAL CONDITIONS A. Accuracy of Work. The Contractor shall be responsible for the accuracy of the Work and any error and/or omission made by the Contractor in any phase of the Work under this Agreement. B. Additional Work. Augusta shall in no way be held liable for any work performed under this section which has not first been approved in writing by Augusta in the manner required by applicable law and/or the terms of this Contract.Augusta may at any time order changes within the scope of the Work without invalidating the Contract upon seven (7) days written notice to the Contractor. The Contractor shall proceed with the performance of any changes in the Work so ordered by Augusta unless such change entitles the Contractor to a change in Contract Price, and/or Contract Term, in which event the Contractor shall give Augusta written notice thereof within fifteen(15)days after the receipt of the ordered change,and the Contractor shall not execute such changes until it receives an executed Change Order from Augusta. No extra cost or extension of time shall be allowed unless approved by the Augusta and authorized by execution of a Change Order. The parties' execution of any Change Order constitutes a final settlement of all matters relating to the change in the Work which is the subject of the Change Order. Augusta shall not be liable for payment for any work performed under this section which has not first been approved in writing by Augusta in the manner required Page 2 of 19 by applicable law and/or the terms of this Contract. C. Ownership of Documents. All documents, including drawings, estimates, specifications, and data are and remain the property of Augusta. The Contractor agrees that Augusta may reuse any and all plans,specifications,drawings,estimates,or any other data or documents described herein in its sole discretion without first obtaining permission of the Contractor and without any payment of any monies to the Contractor therefore. However,any reuse of the documents by Augusta on a different site shall be at its risk and the Contractor shall have no liability where such documents are reused. D. Successors and Assigns. The Contractor agrees it shall not sublet, assign, transfer, pledge, convey, sell, or otherwise dispose of the whole or any part of this Contract or his right, title, or interest therein to any person,firm, or corporation without the previous written consent of Augusta. If the Augusta consents to any such assignment or transfer, then the Contractor binds itself, its partners, successors and assigns to all covenants of this Contract. Nothing contained in this Contract shall create, nor be interpreted to create privity, or any other relationship whatsoever, between Augusta and any person,or entity or than Contractor. E. Reviews and Acceptance. Work performed by the Contractor shall be subject to review and acceptance in stages as required by Augusta. Acceptance shall not relieve the Contractor of its professional obligation to correct,at his own expense,any errors in the Work. F. Termination of Agreement. The Contractor understands and agrees that the date of the beginning of Work,rate of progress,and time for completion of the Work are essential conditions of this Contract. Augusta may, for its own convenience and at its sole option, without cause and without prejudice to any other right or remedy of Augusta, elect to terminate the Contract by delivering to the Contractor, at the address listed in the Notices article of this Contract, a written notice of termination specifying the effective date of termination. Such notice shall be delivered to Contractor at least thirty (30)days prior to the effective date of termination. If Contractor's services are terminated by Augusta, the termination will not affect any rights or remedies of Augusta then existing or which may thereafter accrue against Contractor or its surety. In case of termination of this Contract before completion of the Work, Contractor will be paid only for the portion of the Work satisfactorily performed through the effective date of termination as determined by Augusta. Neither party shall be entitled to recover lost profits, special, consequential or punitive damages, attorney's fees or costs from the other party to this Contract for any reason whatsoever. This Contract shall not be deemed to provide any third-party with any remedy, claim, right of action, or other right. The parties' obligations pursuant to this Section shall survive any acceptance of Work, or termination or expiration of this Contract. G. Indemnification Agreement. The Contractor shall be responsible from the execution date or from Page 3 of 19 the time of the beginning of the Work,whichever shall be the earlier,for all injury or damage of any kind resulting from the Work,to persons or property,including employees and property of Augusta. The Contractor shall exonerate,indemnify,and save harmless Augusta,its elected officials,officers, employees, agents and servants, hereinafter collectively referred to in this Section as the "Augusta Indemnitees," from and against all claims or actions based upon or arising out of any damage or injury (including without limitation any injury or death to persons and any damage to property) caused by or sustained in connection with the performance of this Contract or by conditions created thereby or arising out of or any way connected with Work performed under this Contract,as well as all expenses incidental to the defense of any such claims, litigation, and actions. Furthermore, Contractor shall assume and pay for, without cost to Augusta Indemnitees, the defense of any and all claims, litigation, and actions suffered through any act or omission of the Contractor, or any Subcontractor,or anyone directly or indirectly employed by or under the supervision of any of them. Notwithstanding any language or provision in this Contract, Contractor shall not be required to indemnify any Augusta Indemnitee against claims,actions,or expenses based upon or arising out of Augusta Indemnitee's sole negligence. As between Augusta Indemnitees and the Contractor as the other party,the Contractor shall assume responsibility and liability for any damage, loss, or injury, including death, of any kind or nature whatever to person or property, resulting from any kind of claim made by Contractor's employees, agents, vendors, Suppliers or Subcontractors caused by or resulting from the performance of Work under this Contract, or caused by or resulting from any error, omission, or the negligent or intentional act of the Contractor, vendors, Suppliers, or Subcontractors,or any of their officers,agents,servants,or employees.The Contractor shall defend, indemnify, and hold harmless Augusta Indemnitees from and against any and all claims, loss, damage,charge, or expense to which they or any of them may be put or subjected by reason of any such damage,loss,or injury.The Contractor expressly agrees to provide a full and complete defense against any claims brought or actions filed against Augusta Indemnitees,where such claim or action involves, in whole or in part,the subject of the indemnity contained in this Contract, whether such claims or actions are rightfully or wrongfully brought or filed. Augusta has the sole discretion to choose the counsel who will provide the defense.No provision of this Contract and nothing herein shall be construed as creating any individual or personal liability on the part of any elected official, officer, employee, agent or servant of Augusta, nor shall the Contract be construed as giving any rights or benefits hereunder to anyone other than the parties to this Contract.The parties' obligations pursuant to this Section shall survive any acceptance of Work, or termination or expiration of this Contract. H. Insurance. Prior to commencing work,Contractor shall,at its sole expense,procure and maintain Page 4 of 19 insurance of the types and in the amounts described below from insurer(s) authorized to transact business in the state where the work or operations will be performed by Contractor. Such insurance shall be placed with admitted insurers that maintain an A.M. Best's rating of not less than "A" (Excellent) with a Financial Size Category of VII or better with coverage forms acceptable to Contractor. The insurance described below shall be maintained uninterrupted for the duration of the project,including any warranty periods,and shall protect Contractor, and others as required by contract,for liabilities in connection with work performed by or on behalf of Contractor,its agents, representatives, employees or Contractors. 1) Certificates of Insurance in companies doing business in Georgia and acceptable to the Augusta covering: a) Statutory Workers' Compensation Insurance, or proof that Contractor is not required to provide such coverage under State law; b) Professional Liability Insurance on the Contractor's services in this Agreement with limit of$1,000,000; c) Commercial General Liability Insurance covering all operations with combined single limit of$1,000,000; d) Comprehensive Automobile Liability Insurance with form coverage for all owned, non- owned and hired vehicles with combined single limit of$500,000; e) Umbrella or Excess Insurance is acceptable to meet the minimum limits whenever there is an insurer licensed to do business in Georgia which is providing at least the first$100,000 of primary coverage; and 2) Certificates of Insurance must be executed in accordance with the following provisions: a) Certificates to contain policy number, policy limits, and policy expiration date of all policies issued in accordance with this Agreement; b) Certificates to contain the location and operations to which the insurance applies; c) Certificates to contain Contractor's protective coverage for any subcontractor's operations; d) Certificates to contain Contractor's contractual liability insurance coverage; e) Certificates are to be issued to: AUGUSTA, GEORGIA PROCURMENT DEPARTMENT 535 TELFAIR STREET, SUITE 605 AUGUSTA, GA 30901-2386 Page 5 of 19 3) The Contractor shall be wholly responsible for securing certificates of insurance coverage as set forth above from all subcontractors who are engaged in this work. 4) The Contractor agrees to carry statutory Workers' Compensation Insurance and to have all subcontractors likewise carry statutory Workers' Compensation Insurance. 5) Contractor agrees to waive all rights of subrogation and other rights of recovery against the Augusta and its officers and shall cause each Subcontractor to waive all rights of subrogation for all coverage. 6) Failure of Augusta to demand such certificate or other evidence of full compliance with these insurance requirements or failure of Augusta to identify a deficiency from evidence provided will not be construed as a waiver of the Contractor's obligation to maintain such coverage. Contractor understands and agrees that the purchase of insurance in no way limits the liability of the Contractor. 7) Certificates shall state that the policy or policies shall not expire,be cancelled or altered without at least sixty(60)days prior written notice to Augusta. Policies and Certificates of Insurance listing Augusta and its officers as additional insureds(except for workers' compensation insurance) shall conform to all terms and conditions (including coverage of the indemnification and hold harmless agreement) contained in this Contract. 8) If Augusta shall so request,the Contractor will furnish Augusta for its inspection and approval such policies of insurance with all endorsements, or confirmed specimens thereof certified by the insurance company to be true and correct copies. Contractor shall be responsible and have the financial wherewithal to cover any deductibles or retentions included on the certificate of insurance. I. Georgia Laws Govern. The laws of the State of Georgia shall govern the construction of this Contract without regard for conflicts of laws. Should any provision of this Contract require judicial interpretation, it is agreed that the court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against one party,by reason of the rule of construction,that a document is to be construed more strictly against the party who itself or through its agent prepared same;it being agreed that the agents of all parties have participated in the preparation hereof, and all parties have had an adequate opportunity to consult with legal counsel.In interpreting this Contract in its entirety, the printed provisions of this Contract, and any additions written or typed hereon, shall be given equal weight, and there shall be no inference by operation of law or otherwise;that any provision of this Contract shall be construed against either party hereto. J. Venue. This Agreement shall be deemed to have been made and performed in Augusta, Georgia. For the purposes of venue,all suits or causes of action arising out of this Agreement shall be brought Page 6 of 19 in the courts of Richmond County,Georgia. K. Contractor and Subcontractor Evidence of Compliance; Federal Work Authorization. Pursuant to O.C.G.A. §13-10-91,Augusta cannot enter into a contract for the physical performance of services unless the Contractor,its Subcontractor(s)and sub-subcontractor(s),as that term is defined by state law, register and participate in the Federal Work Authorization Program to verify specific information on all new employees. Contractor certifies that it has complied and will continue to comply throughout the Contract Term with O.C.G.A. §13-10-91 and any related and applicable Georgia Department of Labor Rule. Contractor agrees to sign an affidavit evidencing its compliance with O.C.G.A. §13-10-91. The signed affidavit is attached to this Contract as Attachment B. Contractor agrees that in the event it employs or contracts with any Subcontractor(s) in connection with this Contract, Contractor will secure from each Subcontractor an affidavit that certifies the Subcontractor's current and continuing compliance with O.C.G.A. §13-10-91 throughout the Contract Term. Any signed Subcontractor affidavit(s) obtained in connection with this Contract shall be attached hereto as Attachment C. Each Subcontractor agrees that in the event it employs or contracts with any sub-subcontractor(s), each Subcontractor will secure from each sub-subcontractor an affidavit that certifies the sub- subcontractor's current and continuing compliance with O.C.G.A. §13-10-91 throughout the Contract Term. Any signed sub-subcontractor affidavit(s) obtained in connection with this Contract shall be attached hereto as Attachment D. L. Augusta Representative. Augusta may designate a representative through whom the Contractor will contact Augusta. In the event of such designation, said representative shall be consulted and his written recommendation obtained before any request for extra work is presented to the Augusta. Payments to the Contractor shall be made only upon itemized bill submitted to and approved by said representative. M. Contractor's Status. The Contractor will supervise and direct the Work, including the Work of all Subcontractors. Only persons skilled in the type of work which they are to perform shall be employed. The Contractor shall, at all times, maintain discipline and good order among his employees,and shall not employ any unfit person or persons or anyone unskilled in the work assigned him. The relationship between Augusta and the Contractor shall be that of owner and independent contractor. Other than the consideration set forth herein,the Contractor,its officers,agents,servants, employees,and any Subcontractors shall not be entitled to any Augusta employee benefits including, but not limited to social security, insurance, paid annual leave, sick leave, worker's compensation, free parking or retirement benefits. All services provided by Contractor shall be by employees of Contractor or its Subcontractors and subject to supervision by Contractor.No officer or employee of Page 7 of 19 Contractor or any Subcontractor shall be deemed an officer or employee of Augusta. Personnel policies,tax responsibilities,social security payments,health insurance,employee benefits and other administrative policies,procedures or requirements applicable to the Work or services rendered under this Contract shall be those of the Contractor,not Augusta. N. Georgia Open Records Act. Contractor will be expected to comply with the applicable provisions of the Georgia Open Records Act,O.C.G.A. §50-18-70 et seq. O. Business License. Contractor shall submit a copy of its current, valid business license with this Contract. If the Contractor If the Contractor is a Georgia corporation,Contractor shall submit a valid county or city business license. If Contractor is a joint venture,Contractor shall submit valid business licenses for each member of the joint venture.If the Contractor is not a Georgia corporation,Contractor shall submit alf the Contractor is a Georgia corporation,Contractor shall submit a valid county or city business license. If Contractor is a joint venture, Contractor shall submit valid business licenses for each member of the joint venture. If the Contractor is not a Georgia corporation, Contractor shall submit a certificate of authority to transact business in the state of Georgia and a copy of its current, valid business license issued by its home jurisdiction. If Contractor holds a professional license,then Contractor shall submit a copy of the valid professional license. Failure to provide the business license, certificate of authority,or professional license required by this section,may result in the Contract being terminated. Contractor shall ensure that any insurance, license, permit or certificate submitted in response to Augusta's RFP or as part of the Contract shall be current and valid when submitted, and shall remain valid,current and maintained in good standing for the Contract Term. P. Prohibition Against Contingent Fees. The Consultant warrants that no person or selling agency has been employed or retained to solicit or secure this Agreement upon an agreement or understanding for a commission,percentage,brokerage,or contingent fee,excepting bona fide employees or bona fide established commercial or selling agencies maintained by Consultant for the purpose of securing business and that the Consultant has not received any non-Augusta fee related to this Agreement without the prior written consent of Augusta. For breach or violation of this warranty, Augusta shall have the right to annul this Agreement without liability or at its discretion to deduct from the Agreement Price of consideration the full amount of such commission, percentage, brokerage or contingent fee. Q. Georgia Prompt Payment Act Not Applicable. The terms of this Agreement supersede any and all provisions of the Georgia Prompt Payment Act. R. Acknowledgement of Authority. Contractor acknowledges that this contract and any changes to it by amendment, modification, change order or other similar document may have required or may require the legislative authorization of the Board of Commissioners and approval of the Mayor. Page 8 of 19 Under Georgia law, Contractor is deemed to possess knowledge concerning Augusta, Georgia's ability to assume contractual obligations and the consequences of Contractor's provision of goods or services to Augusta, Georgia under an unauthorized contract, amendment,modification,change order or other similar document, including the possibility that the Contractor may be precluded from recovering payment for such unauthorized goods or services.Accordingly, Contractor agrees that if it provides goods or services to Augusta, Georgia under a contract that has not received proper legislative authorization or if the Contractor provides goods or services to Augusta,Georgia in excess of the any contractually authorized goods or services, as required by Augusta, Georgia's Charter and Code,Augusta,Georgia may withhold payment for any unauthorized goods or services provided by Contractor. Contractor assumes all risk of non-payment for the provision of any unauthorized goods or services to Augusta,Georgia, and it waives all claims to payment or to other remedies for the provision of any unauthorized goods or services to Augusta, Georgia, however characterized, including,without limitation, all remedies at law or equity. S. Sole Agreement. This Contract constitutes the sole contract between Augusta and the Contractor. The terms, conditions,and requirements of this Contract may not be modified, except by Change Order. No verbal agreement or conversation with any officer, agent, or employee of Augusta, either before or after the execution of the Contract, shall affect or modify any of the terms or obligations herein contained. No representations,oral or written,shall be binding on the parties unless expressly incorporated herein. No Change Order shall be enforceable unless approved by official action of Augusta as provided by law or in this Contract. T. Attachments and Appendices. This Contract includes the following Attachments and Appendices all of which are incorporated herein by reference: Attachment A, Contractor's Cost Proposal Form; Attachment B, Contractor's Affidavit; Attachment C, Subcontractor's Affidavit(s); Attachment D, Sub-subcontractor's Affidavit(s); Attachment E, Certificate of Corporate Authority or Joint Venture Certificate. U. Severability. If any provision ofthis Contract or the application thereof to any person or circumstance shall to any extent be held invalid, then the remainder of this Contract or the application of such provision to persons or circumstances, other than those as to which it is held invalid, shall not be affected thereby,and each provision of this Contract shall be valid and enforced to the fullest extent permitted by law. V. Notices. Any notice or consent required to be given by or on behalf of any party hereto to any other party hereto shall be in writing and shall be sent to Augusta's Administrator and the Executive Assistant or to the Contractor or his authorized representative on the work site by (a) registered or certified United States mail,return receipt requested,postage prepaid, (b)personal delivery, or(c) Page 9 of 19 overnight courier service. All notices sent to the addresses listed below shall be binding unless said address is changed in writing no less than fourteen days before such notice is sent. Future changes in address shall be effective upon written notice being given by the Contractor to Augusta's Executive Assistant or by Augusta to the Contractor's authorized representative via certified first class U.S.mail,return receipt requested. Such notices will be addressed as follows: [THIS SPACE INTENTIONALLY LEFT BLANK] Page 10 of 19 W. Counterparts. This Contract may be executed in several counterparts, each of which shall be deemed an original,and all such counterparts together shall constitute one and the same Contract. X. Controlling Provisions. The Contract for this Project shall govern the Work. If any portion of the Contract shall be in conflict with any other portion,the various documents comprising the Contract shall govern in the following order of precedence: Contract, Change Orders or modifications issued after execution of the Contract; the provisions of Augusta's RFP; and the Contractor's Response thereto. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in three counterparts, each to be considered as an original by their authorized representative. DAVENPORT & COMPANY, LLC ":"L<12r Attested to by Its: ASSvc;�lc ✓�(e I9,eSx/e,I AUGUSTA, GEORGIA I° 17 Agit/!Hardie ��t 5/IP/it4 A � e'21;)0.0k A • ' 4.0 # rr I C k of Co mission .,0 .acs # 4-0.. .9% „ft a Page 12 of 19 If to Augusta: ADMINISTRATOR AUGUSTA,GEORGIA 535 TELFAIR STREET,SUITE 900 AUGUSTA GA 30901 With a copy to DIRECTOR OF FINANCE FINANCE DEPARTMENT 535 TELFAIR STREET,SUITE 800 AUGUSTA GA 30901 With a copy to: DIRECTOR OF PROCUREMENT PROCUREMENT DEPARTMENT 535 TELFAIR STREET,SUITE 605 AUGUSTA,GA 30901 If to the Contractor: Courtney E. Rogers, Senior Vice President Davenport & Company LLC 901 East Cary St., 11th Floor Richmond, VA 23219 With Copy to: Public Finance Manager Davenport & Company LLC 901 East Cary St. 11th Floor Richmond, VA 23219 Page 11 of 19 ATTACHMENT A CONTRACTOR'S COST PROPOSAL FORM Page 13 of 19 Best and Final Fee Proposal RFP Item#16-128 Financial Advisory Services for Debt Issuance ORE A and Economic Development Project Evaluation for Augusta,Georgia-Finance Department Annual Retainer $20,000 Issuance Costs Less than$50 Million(per 1,000 of Bonds) Flat Fee$40,000 Incremental over$50 million(per 1,000 of bonds) $0 Surcharge per competitive sale=,if any(per 1,000 of bonds $0,$10,000 For Negotiated Surcharge for refunding,if any(per 1,000 bonds) $10,000 Per Refunded Issue Minimum Fee(per Transaction) $40,000 Maximurn Fee(per Transaction) 100,000 *Surcharge for Rated Transaction Hourly Rates *$10,000 Managing Director (Senior VP) $300 Director (First VP) $275 Senior Managing Consultant (VP) $250 Senior Analyst (Associate VP) $225 Analyst $200 Associate N/A Please complete the following cost for the following hypothetical bond issuance examples: Bond Type General Obligation General Obligation Amount $ 38,000,000 $ 135,000,000 Tax Status Exempt Exempt Refunding No No Competitive sale fee $50,000 $50,000 Negotiate sale fee (*Assumes Rated Transaction) $60,000 $60,000 Revenue Bond- Revenue Bond-Coliseum Bond Type Coliseum Authority Authority Amount $ 38,000,000 $ 135,000,000 Tax Status Exempt Exempt Refunding No No Competitive sale fee $50,000 $50,000 Negotiate sale fee (*Assumes Rated Transaction) $60,000 $60,000 U„BwTHI, P E IN A EPARATE SEALED ENVELOPE LABELED RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation for Augusta,Georgia-Finance Department— Best and Final Fee Proposal COMPANY: Davenport& Company LLC NAME: Courtney E. Rogers ATTACHMENT D SUB-SUBCONTRACTOR'S AFFIDAVIT(S) Page 16 of 19 ATTACHMENT C SUBCONTRACTOR'S AFFIDAVIT(S) Page 15 of 19 ATTACHMENT E CERTIFICATE OF CORPORATE AUTHORITY AND/OR JOINT VENTURE CERTIFICATE Page 17 of 19 ATTACHMENT B CONTRACTOR'S AFFIDAVIT Page 14 of 19 APPENDIX I REQUEST FOR PROPOSAL NO. 16-128 FOR FINANCIAL ADVISORY SERVICES Page 18 of 19 G ` O R GI A Request for Proposals RFP Item #16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation For Augusta, Georgia—Finance Departments RFP Due: Friday, February 12, 2016 @ 11:00 A.M. One Original and seven (7) copies of RFP shall be submitted in response to this Request for Proposal Thanks for doing business with us. . . Geri A. Sams, Procurement Director 535 Telfair Street, Room 605 Augusta, Georgia 30901 Rev.6/12/2015 RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 1 of 30 O B O II O I Table of Contents Request for Proposal Instruction to Submit Purpose Viewing of the Augusta Code Compliance with Laws Proposal for All or Part Local Vendor Preference Minority/Women Business Enterprise(MWBE) Policy Augusta Georgia License Requirement Terms of Contract Notice to All Proposers Required to be returned with your submittal. Both documents must be notarized Attachment B Return the 2 pages Systematic Alien Verification for Entitlements(SAVE) Program Exception Sheet Local Vendor Registration Form Local Small Business Opportunity Program Ordinance Requirements Local Small Business Opportunities Program Participation (Projects$100,000 or more) Forms required to be returned in a separate sealed envelope,when applicable Request for Proposal Specifications RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12.2016©11:00 a.m. Page 2 of 30 Request for Proposal Request for Proposals will be received at this office until Friday, February 12, 2016 @ 11:00 a.m. for furnishing: RFP Item#16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation for the Augusta Finance Department RFPs will be received by: The Augusta Commission hereinafter referred to as the OWNER at the offices of: Geri A. Sams, Director Augusta Procurement Department 535 Telfair Street-Room 605 Augusta, Georgia 30901 RFP documents may be viewed on the Augusta Georgia web site under the Procurement Department ARCbid. RFP documents may be obtained at the office of the Augusta, GA Procurement Department, 535 Telfair Street—Room 605,Augusta, GA 30901. Mandatory Pre Bid/Telephone Conference will be held on Wednesday,January 27, 2016, @ 3:00 p.m. in the Procurement Department, 535 Telfair Street, Room 605. The call-in telephone number is 1-800-853- 5481 (U.S. & Canada) and 713-936-6995 (International). Call one of the dial-in numbers at least five (5) minutes prior to conference. If you choose to teleconference there is a $35.00 fee. Make the $35.00 check payable "Augusta Georgia Commission" and mail to Geri A. Sams, Director Augusta Procurement Department 535 Telfair Street- Room 605 Augusta, Georgia 30901. All questions must be submitted in writing by fax to 706 821-2811 or by email to procbidandcontractfa'7augustaga.uov to the office of the Procurement Department by Friday, January 29, 2016 @ 5:00 P.M. No RFP will be accepted by fax, all must be received by mail or hand delivered. No RFP may be withdrawn for a period of 90 days after time has been called on the date of opening. Request for proposals (RFP) and specifications. An RFP shall be issued by the Procurement Office and shall include specifications prepared in accordance with Article 4 (Product Specifications), and all contractual terms and conditions, applicable to the procurement. All specific requirements contained in the request for proposal including, but not limited to, the number of copies needed, the timing of the submission, the required financial data, and any other requirements designated by the Procurement Department are considered material conditions of the bid which are not waiveable or modifiable by the Procurement Director. All requests to waive or modify any such material condition shall be submitted through the Procurement Director to the appropriate committee of the Augusta, Georgia Commission for approval by the Augusta, Georgia Commission. Please mark RFP number on the outside of the envelope. Proponents are cautioned that acquisition of RFP documents through any source other than the office of the Procurement Department is not advisable. Acquisition of RFP documents from unauthorized sources places the proponent at the risk of receiving incomplete or inaccurate information upon which to base his qualifications. GERI A. SAMS, Procurement Director Publish: Augusta Chronicle December 31, 2015, January 7, 14, 21, 2016 Metro Courier January 6, 2016 cc: Louis C. Brazzell, Deputy Administrator Donna Williams, Finance Department Timothy Schroer, Finance Department Revised: 6/12/2015 RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 3 of 30 INSTRUCTIONS TO SUBMIT source of funding. Augusta does enforce mandatory DBE requirements of federal VSTRUCTiONS TO SUBMIT and state agencies on contracts funded by such agencies and has a DBE 1.1 Purpose:The purpose of this document is to Program to comply with U.S. Department provide general and specific information for of Transportation (DOT), Federal Transit use by vendors in submitting a proposal to Administration (FTA), Federal Aviation supply Augusta. Georgia with equipment, Administration (FAA) and other federal supplies, and or services as listed above. All and state mandated DBE requirements proposals are governed by the Augusta, for certain DOT, FTA, FAA, and other Georgia Code. federal and state assisted contracts as required by 49 C.F.R. Part 26, et. seq. and/or 49 C.F.R. Part 23, et. seq. This 1.2 Viewing the Augusta Code: All proposals DBE program is only for DOT, FTA and are governed and awarded in accordance FAA assisted contracts and other federal with the applicable federal and state or state funded contracts having regulations and the Augusta, Georgia Code. mandatory DBE requirements. (See To view the Code visit Augusta's website at Article 13 of the Augusta, GA. Code.) www.auqustaga.gov or http://www.auQustaga,gov/index.aspx?NI Augusta, Georgia prohibits any language D=685 Guidelines& Procedures. in any solicitation, bid or contract that is inconsistent with the July 21, 2011 Court 1.3 Compliance with laws:The Proponent shall Order in the case, Thompson Wrecking, obtain and maintain all licenses, permits, inc. v. Augusta Georgia, civil action No. liability insurance, workman's compensation 1:07-CV-019. Any such language insurance and comply with any and all other appearing in any Augusta, Georgia standards or regulations required by federal, solicitation, bid or contract is void and state or Augusta, Georgia statute, unenforceable. ordinances and rules during the performance of any contract between the Proponent and A copy of this Order can be reviewed at Augusta, Georgia. Any such requirement www.auqustaga.gov home page. specifically set forth in any contract document between the Proponent and 1.7 Augusta, Georgia License Requirement: Augusta, Georgia shall be supplementary to For further information contact the License this section and not in substitution thereof. and Inspection Department @ 706 312- 5050. 1.4 Proposal's For All Or Part: Unless otherwise specified by Augusta, Georgia or General Contractors License Number: If by the proponent, AUGUSTA, GEORGIA applicable, in accordance with O.C.G.A.§43- RESERVES THE RIGHT TO MAKE 41, or be subjected to penalties as may be AWARD ON ALL ITEMS, OR ON ANY OF required by law. THE ITEMS ACCORDING TO THE BEST INTEREST OF AUGUSTA, GEORGIA. Utility Contractor License Number: If Proponent may restrict his proposal to applicable, in accordance with O.C.G.A. §43- consideration in the aggregate by so stating, 14, or be subjected to penalties as may be but must name a unit price on each item required by law. . submitted upon. 1.8 Terms of Contract: (Check where 1.6 Minority/Women Business Enterprise applicable) (MWBE) Policy: Court Order Enjoining [ ](A)Annual Contract Race-Based Portion of DBE Program [ ](B)One time Purchase. Augusta, Georgia does not have a race or [X](C)Other gender conscious Disadvantaged Business Enterprises (DBE) program for projects having Augusta, Georgia as the RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 4 of 30 GEORGIA NOTICE TO ALL VENDORS (PLEASE READ CAREFULLY) ADHERE TO THE BELOW INSTRUCTIONS AND DO NOT SUBSTITUTE FORMS PLEASE READ CAREFULLY: Attachment B is a consolidated document consisting of: 1. Business License Number Requirement(must be provided) 2. Acknowledgement of Addenda (must be acknowledged, if any) 3. Statement of Non-Discrimination 4. Non-Collusion Affidavit of Prime Bidder/Offeror 5. Conflict of Interest 6. Contractor Affidavit and Agreement(E-Verify User ID Number must be provided) Attachment B Must be Notarized&the 2 Pages Must be returned with your submittal-No Exceptions. Business Licensefeauirement: Contractor must be licensed in the Governmental entity for where they do the majority of their business. Your company's business license number must be provided on Page 1 of Attachment B. If your Governmental entity(State or Local)does not require a business license, your company will be required to obtain a Richmond County business license if awarded a Proposal. For further information contact the License and Inspection Department @ 706 312-5050. Acknowlei ttement of Adjenda: You Must acknowledge all Addenda. See Page 1 of Attachment B. E-Verify*User Identifica#jon Number(Company I.D.) The recommended awarded vendor will be required to provide a copy of Homeland Security's Memorandum Of Understanding (MOU) Affidavit Verifying Status for Augusta Benefit Application (S.A.V.E. Program)(Must tie Returned Witt) Your Submittal) Return Only If Applicable: 1. The Exception Sheet(if applicable) 2. Local Vendor Registration (if applicable) The successful vendor will submit the following forms to the Procurement Department no later than five(5)days after receiving the"Letter of Recommendation" (Vendor's letter will denote the date forms are to be received 1. Georgia Security and Immigration Subcontractor Affidavit 2. Non-Collusion Affidavit of Sub-Contractor WARNING: Please review"Notice to Bidders"regarding Augusta Georgia's Local Small Business Opportunity Program Bidder Requirements. Vendors are cautioned that acquisition of proposal documents through any source other than the office of the Procurement Department is not advisable. Acquisition of proposal documents from unauthorized sources places the proposer at the risk of receiving incomplete or inaccurate information upon which to base his qualifications. Proposals are publicly opened. It is your responsibility to ensure that your company has met the Specifications and Licenses'requirements prior to submitting a proposal. Rev.8/6/2015 RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 5 of 30 G O R I A Attachment B You Must Complete and Return the 2 pages of Attachment B with Your Submittal. Document Must Be Notarized. Augusta, Georgia Augusta Procurement Department ATTN: Procurement Director 535 Telfair Street, Suite 605 Augusta, Georgia 30901 Name of Bidder: Street Address: City, State,Zip Code: Phone: Fax: Email: Do You Have A Business License? Yes: No: Business License#for your Company(Must Provide): Company must be licensed in the Governmental entity for where they do the majority of their business. If your Governmental entity (State or Local)does not require a business license,your company will be required to obtain a Richmond County business license if awarded a Bid. For further information contact the License and Inspection Department @ 706 312-5050. List the State.City&CountY that issued Your Ilcensez Acknowledgement of Addenda: (#1) :(#2) :(#3) :(#4) : (#5) : (#6) :(#7) :(#8) : NOTF: CHFC',,K APPRQPRIATF BOX(ES)-ADD ADDTTIONAT.NTTMRFRS AS APPT.ICART F, Statement of Non-Discrimination The undersigned understands that it is the policy of Augusta, Georgia to promote full and equal business opportunity for all persons doing business with Augusta, Georgia. The undersigned covenants that we have not discriminated, on the basis of race, religion, gender, national origin or ethnicity,with regard to prime contracting,subcontracting or partnering opportunities. The undersigned covenants and agrees to make good faith efforts to ensure maximum practicable participation of local small businesses on the proposal or contract awarded by Augusta,Georgia. The undersigned further covenants that we have completed truthfully and fully the required forms regarding good faith efforts and local small business subcontractor/supplier utilization. The undersigned further covenants and agrees not to engage in discriminatory conduct of any type against local small businesses, in conformity with Augusta, Georgia's Local Small Business Opportunity Program. Set forth below is the signature of an officer of the proposer/contracting entity with the authority to bind the entity. The undersigned acknowledge and warrant that this Company has been made aware of understands and agrees to take affirmative action to provide such companies with the maximum practicable opportunities to do business with this Company; That this promise of non-discrimination as made and set forth herein shall be continuing in nature and shall remain in full force and effect without interruption; That the promises of non-discrimination as made and set forth herein shall be and are hereby deemed to be made as part of and incorporated by reference into any contract or portion thereof which this Company may hereafter obtain and; That the failure of this Company to satisfactorily discharge any of the promises of nondiscrimination as made and set forth herein shall constitute a material breach of contract entitling Augusta,Georgia to declare the contract in default and to exercise any and all applicable rights remedies including but not limited to cancellation of the contract,termination of the contract,suspension and debarment from future contracting opportunities,and withholding and or forfeiture of compensation due and owing on a contract. Non-Collusion of Prime Proposer/Offelyl By submission of a proposal,the vendor certifies,under penalty of perjury,that to the best of its knowledge and belief: (a) The prices in the proposal have been arrived at independently without collusion, consultation, communications, or agreement, for the purpose of restricting competition,as to any matter relating to such prices with any other vendor or with any competitor. (b)Unless otherwise required by law,the prices which have been quoted in the proposal have not been knowingly disclosed by the vendor prior to opening,directly or indirectly,to any other vendor or to any competitor. (c)No attempt has been made,or will be made,by the vendor to induce any other person,partnership or corporation to submit or not to submit a proposal for the purpose of restricting competition. Collusions and fraud in proposal preparation shall be reported to the State of Georgia Attorney General and the United States Justice Department. RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 6 of 30 Conflict of Interest By submission of a proposal,the responding firm certifies,under penalty of perjury,that to the best of its knowledge and belief: 1.No circumstances exist which cause a Conflict of Interest in performing the services required by this ITB,and 2.That no employee of the County,nor any member thereof,not any public agency or official affected by this ITB, has any pecuniary interest in the business of the responding firm or his sub-consultant(s)has any interest that would conflict in any manner or degree with the performance related to this ITB. By submission of a proposal,the vendor certifies under penalty of perjury,that to the best of its knowledge and belief: (a) The prices in the proposal have been arrived at independently without collusion, consultation, communications, or agreement, for the purpose of restricting competition,as to any matter relating to such prices with any other vendor or with any competitor. (b)Unless otherwise required by law,the prices which have been quoted in the proposal have not knowingly been disclosed by the vendor prior to opening,directly or indirectly,to any other vendor or competitor. c)No attempt has been made,or will be made,by the vendor to induce any other person,partnership or cooperation to submit or not to submit a proposal for the purpose of restricting competition. For any breach or violation of this provision,the County shall have the right to terminate any related contract or agreement without liability and at its discretion to deduct from the price, or otherwise recover, the full amount of such fee, commission,percentage,gift,payment or consideration. Contractor Affidavit and Agreement By executing this affidavit, the undersigned contractor verifies its compliance with 0.C.G.A. 13-10-91, stating affirmatively that the individual, firm,or corporation which is contracting with Augusta,Georgia Board of Commissioners has registered with and is participating in a federal work authorization program*[any of the electronic verification of work authorization programs operated by the United States Department of Homeland Security or any equivalent federal work authorization program operated by the United States Department of Homeland Security to verify information of newly hired employees,pursuant to the Immigration Reform and Control Act of 1986(IRCA), P,L.99-603],in accordance with the applicability provisions and deadlines established in 0.C.G.A 13-10-91. The undersigned further agrees that,should it employ or contract with any subcontractor(s) in connection with the physical performance of services pursuant to this contract with Augusta, Georgia Board of Commissioners,contractor will secure from such subcontractor(s)similar verification of compliance with 0.C.G.A 13-10-91 on the Subcontractor Affidavit provided in Rule 300-10-01-.08 or a substantially similar form. Contractor further agrees to maintain records of such compliance and provide a copy of each such verification to the Augusta,Georgia Board of Commissioners at the time the subcontractor(s)is retained to perform such service. Georgia Law requires your company to have an E-Verify*User Identification Number(Company I.D.)on or after July 1,2009. For additional information or to enroll your company,visit the State of Georgia website: httPs;//e-veri`V.uscis.Qov/enroll/ and/or htta://www.do).state.ga.us/Adf/rules/300 10 1_odf **E-Verify* User Identification Number(Company I.D.) NOTE: E-VERIFY USER IDENDIFICATION NUMBER(COMPANY I.D.)MUST BE PROVIDED: IN ADDITION,THE RECOMMENDED AWARDED VENDOR WILL BE REQUIRED TO PROVIDE A COPY OF HOMELAND SECURITY'S MEMORANDUM OF UNDERSTANDING(MOU) The undersigned further agrees to submit a notarized copy of Attachment B and any required documentation noted as part of the Augusta, Georgia Board of Commissions specifications which govern this process. In addition, the undersigned agrees to submit all required forms for any subcontractor(s) as requested and or required. I further understand that my submittal will be deemed non-compliant if any part of this process is violated. Company Name BY: Authorized Officer or Agent (Contractor Signature) Title of Authorized Officer or Agent of Contractor Printed Name of Authorized Officer or Agent SUBSCRIBED AND SWORN BEFORE ME ON THIS THE DAY OF , 20 NOTARY SEAL Notary Public My Commission Expires: You Must Complete and Return the 2 Pages oLAttachment B with Your Submittal. Document Must Be Notarized, REv.8/6/2015 RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday, February 12,2016 @ 11:00 a.m. Page 7 of 30 4GIA You Must Complete and Return with Your Submittal. Document Must Be Notarized ystematic Alien Verification for Entitlements (SAVE) Program Affidavit Verifying Status for Augusta, Georgia Benefit Application By executing this affidavit under oath, as an applicant for an Augusta, Georgia Business License or Occupation Tax Certificate, Alcohol License, Taxi Permit, Contract or other public benefit as reference in O.C.G.A. Section 50-36-1, I am stating the following with respect to my proposal for an Augusta, Georgia contract for [Proposal Project Number and Project Name] [Print/Type:Name of natural person applying on behalf of individual,business,corporation,partnership,or other private entity] [Print/Type: Name of business,corporation,partnership,or other private entity] 1.) I am a citizen of the United States. OR 2.) I am a legal permanent resident 18 years of age or older. OR 3.) I am an otherwise qualified alien (8 § USC 1641) or nonimmigrant under the Federal Immigration and Nationality Act (8 USC 1101 et seq.) 18 years of age or older and lawfully present in the United States.* In making the above representation under oath, I understand that any person who knowingly and willfully makes a false, fictitious, or fraudulent statement or representation in an affidavit shall be guilty of a violation of Code Section 16-10-20 of the Official Code of Georgia. Signature of Applicant Printed Name *Alien Registration Number for Non-Citizens SUBSCRIBED AND SWORN BEFORE ME ON THIS THE DAY OF , 20 Notary Public My Commission Expires: NOTARY SEAL Note: THIS FORM MUST BE RETURNED WITH YOUR SUBMITTAL REV.7/12/2015 RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 8 of 30 • mal Small Bus ess OtDertunitV Protlram Ordinance be in the format specified by the Director of Minority and Small Requirements Notice To All ProDDn*nts PLEASE READ Business Opportunities, and shall be submitted at such times CAREFULLY) Shall apply to ALL BidsIRFPs/RFQs regardless as required by Augusta, Georgia. Required forms can be of the dollar amount found at www.auqustaga.gov. If you need assistance In accordance with Chapter 10B of the AUGUSTA, GA. CODE, completing a form or filing information, please contact the Contractors agree to collect and maintain all records necessary LSBO Program office at (706) 821-2406. Failure to provide to for Augusta, Georgia to evaluate the effectiveness of its such reports within the time period specified by Augusta, Local Small Business Opportunity Program and to make such Georgia shall entitle Augusta, Georgia to exercise any of the records available to Augusta, Georgia upon request. The remedies set forth, including but not limited to, withholding requirements of the Local Small Business Opportunity Program payment from the Contractor and/or collecting liquidated can be found at www auqustaga.00v. In accordance with damages. AUGUSTA, GA. CODE, Contractors shall report to Augusta, To print a copy of the Prime Contractor Data Georgia the total dollars paid to each subcontractor,vendor,or Collection Form visit: other business on each contract, and shall provide such httDJlwww a.g stags goy/ind x asPx?NIP-1672 payment affidavits,regarding payment to subcontractors,if any as required by Augusta,Georgia. Such utilization reports shall Website: httP.//www awiglict- .. •..-. . .2. _; SHALL APPLY TO PROJECTS 6100.000&UP contractor compliance with the LSBOP after a contract Sec.1-10-129.Local small business opportunities program has been awarded.This is incorporated into all Augusta, participation. Georgia Contracts for which a local small business goal (a) Sealed Bids, Sealed Proposals, Professional has been established or negotiated. Services And Other Major Purchasing. The following (1) Contractors shall have an affirmative, procedures and contract requirements will be used to ongoing obligation to meet or exceed the committed insure that local small businesses are encouraged to local small business goal for the duration of the contract. participate in Augusta, Georgia contracts, including but The Augusta, Georgia may deem a contractor to be in not limited to construction contracts, requests for violation of the LSBOP and in breach of its contract if at professional services and the performance of public any time Augusta,Georgia determines that works contracts.The Augusta,Georgia user department (a)The contractor will not meet the committed shall indicate goals for local small business in all local small business goals;and solicitations for contracts over$100,000 in value: (b)the reasons for the contractor's failure are (1)Bid conditions,requests for proposals,and within the contractor's control. For example, if a all other specifications for contracts awarded by contractor does not meet the local small business goal Augusta, Georgia will require that,where subcontracting because the contractor terminated a local small business goal is utilized in performing the contract, the bidder or without cause or if the contractor caused and local small proponent, will make Good Faith Efforts to subcontract business to withdraw from the project without with or purchase supplies from local small businesses. justification, then Augusta, Georgia is justified in finding Bid specifications will require the bidder or proponent to the contractor to be in violation of the LSBOP. keep records of such efforts that are adequate to permit (h)Compliance. a determination of compliance with this requirement. (4)The Director of minority and small business (2) Each Proponent shall be required to opportunities shall be responsible for evaluating good provide documentation of achieving goal or provide faith efforts documentation and subcontractor documentation of Good Faith Efforts to engage local information submitted by bidders in conformance with, small businesses as subcontractors or suppliers, the the AUGUSTA, GA CODE and any State and Federal names of local small businesses and other Laws applicable to any bid specifications for competitive subcontractors to whom it intends to award sealed bid or competitive sealed proposal projects prior subcontracts, the dollar value of the subcontracts, and to award of the contract. the scope of the work to be performed, recorded on the (i)Competitive Bids. form(s) provided or made available as part of the bid Nothing in this Policy is to be construed to require package. If there are no sub-contracting opportunities, Augusta, Georgia to award a bid contract to other than bidder shall so indicate on the appropriate form. the lowest responsible bidder, or to require contractors (6) All solicitation documents shall require to award to subcontractors, or to make significant bidders or proponents to submit with their bid/Dr000sal material purchases from local small businesses who do the following written documents, statements or forms, not submit the best overall pricing to Augusta.Georgia. which shall be made available by the Procurement Sec.1-10-130.Exceptions—federally funded projects. Department. In accordance with § 1-10-8 and Chapter 10B, the (i) Non-Discrimination Statement which shall LSBOP shall only be utilized with federally funded affirm the bidder's: (a) adherence to the policies of projects, solicitations or contracts as authorized by Augusta, Georgia relating to equal opportunity in federal (and Georgia) laws, regulations and conditions contracting: (b) agreement to undertake certain applicable to such projects. To the extent that there are measures as provided in this policy to ensure maximum any conflicts between any such laws, regulations or practicable participation of local small businesses; and conditions and the LSBOP, the federal (and Georgia) (c)agreement not to engage in discriminatory conduct of laws,regulations and conditions shall control. any type. For Questions and or additional information Please contact: (ii) Proposed Local Small Business Mrs. Yvonne Gentry, Local Small Business Opportunity Program, Subcontractor/Supplier Utilization Plan. 535 Telfair Street, Room 610,Augusta, Georgia 30901 (706)821- (iii) Documentation of Good Faith Efforts to 2406. NOTE: All forms should be submitted in a separate.sealed use local small businesses. envelope labeled Local Small Business Required Forms, Failure to submit the above documentation shall Company's Name&Bid Number. result in the bid or proposal being declared non- responsive. Rev.6/27/2013 (d)Post Contract Award Requirements. The purpose of this sub-section is to establish requirements for RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016©11:00 a.m. Page 9 of 30 RFP 16-128 financial Advisory Services for Debt Issuance and ,Ecpnomic Developent Proiect Evaluation The Augusta Finance Department is currently requesting professional services to provide Financial Advisory Services to the Augusta Board of Commissioners. Your submittal should respond to, and be based on, the information included in this Request for Proposal This Request for Proposal is being offered to the general public for qualified vendors. Augusta, Georgia will make a selection based on the proposals and interviews if deemed necessary then negotiate a final agreement with the selected firm(s). You are welcome to establish a team of firms in connection with this RFP, and it should be noted that the final selection will not be awarded via a low-bid procurement process. Responses will be received by Augusta, Georgia, (hereinafter called the "Owner"), at the office of the Procurement Director, 535 Telfair Street, Room 605, Augusta, GA until Friday, February 12, 2016 @ 11:00a.m. and then, at said office, publicly opened and read aloud. Specific services to be provided are shown in the proposed scope of services. You are required to submit one (1) marked unbound original and seven (7) copies of your Request for Proposal. Any interested qualified firm(s) and/or party is requested to make a response to accomplish the Scope of Services described herein. The response is to be signed by a duly authorized official of the firm and must be submitted in the time, manner and form prescribed. Each RFP must be submitted in a sealed envelope, and must be plainly marked on the outside as a RFP for " RFP 16-128 Financial Advisory Services fpr Debt Issuance and Economic DeveloPn+.ent Project Evaluation" and the envelope should bear, on the outside, the name of the vendor, his address and his license number, if applicable. If the RFP is forwarded by mail, or other second party delivery service, the sealed envelope containing the REP must be enclosed in another envelope addressed to: Geri A. Sams Procurement Department 535 Telfair Street-Room 605 Augusta, Georgia 30901 RFP Packages may be obtained at the Augusta, Georgia Procurement Department, at the address listed above. Mandatory Pre BidfTelephone Conference will be held on Wednesday, January 27, 2016, @ 3:00 p.m. in the Procurement Department, 535 Telfair Street, Room 605. The call-in telephone number is 1-800-853-5481 (U.S. & Canada) and 713-936-6995 (International). Call one of the dial-in numbers at least five (5) minutes prior to conference. If you choose to teleconference there is a $35.00 fee. Make the $35.00 check payable "Augusta Georgia Commission" and mail to Geri A. Sams, Director Augusta Procurement Department 535 Telfair Street- Room 605 Augusta, Georgia 30901. The RFP Package contains provisions required for the project. All firms responding are cautioned to read this information carefully for understanding and request clarification from Augusta on any questions pertaining to this request. Questions should be directed to Geri Sams, Director of Procurement, and must be in writing. All questions must be submitted in writing by fax to 706 821-2811 or by email to procbidandcontract1 auqustaga.gov to the office of the Procurement Department by Friday, January 29, 2016 @ 5:00 P.M. No RFP will be accepted by fax, all must be received by mail or hand delivered- Questions discussed with any other officer, agent or employee of Augusta, Georgia will not be considered binding in consideration of this proposal and shall not affect the risks or obligations assumed by the vendor or relieve him from fulfilling any of the conditions of the Contract. Failure to provide all of the requested information may cause the RFP to be rejected as non-responsive. An official authorized to bind the firm to the terms and provisions of the RFP must sign. RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday, February 12,2016©11:00 a.m. Page 10 Of 30 After RFPs have been submitted, the vendor shall not assert that there was a misunderstanding concerning the quantities of work or of the nature of the work to be done. If an award of contract is made as a result of this solicitation, contract will be made on the basis of the response which best satisfies the intent of this Request for Proposals and other factors considered in the best interest of the Owner. Negotiations may be undertaken with those firms who Statements of Qualifications shows them to be qualified, responsible, and capable of performing the work. The Owner will consider professional qualifications and related experience to determine which proposal would be in Owner's best interest if a contract were made. The Owner reserves the right to consider proposals or modification thereof received at any time before the award is made, if such action is in the interest of the Owner. The contract will be awarded approximately 30—45 days after the RFP opening. The Owner reserves the right to reject any or all statements received as the result of this request. The Owner also maintains the right to negotiate with any firm, as necessary, to serve the best interests of Owner. The Owner will not be liable for any costs incurred by the firm prior to the signing of a contract. An official authorized to bind the firm to the terms and provisions of the proposal must sign the proposal. For a proposal to be considered it must remain valid for at least 90 days from the time that the Owner receives it. !. INTRODUCTION Augusta, Georgia requests proposals from qualified firms to provide Financial Advisory Services to Augusta Richmond County Board of Commissioners (hereinafter called "Augusta"). Augusta government is administered by a full time Administrator. Additionally, legislative policy is set by a Mayor and a ten member Board of Commissioners. The Mayor is elected county-wide and the commissioners are each elected by district. The Mayor and the commissioners serve four-year staggered terms The Board of Commissioners' primary responsibilities are to adopt an annual budget and to levy a tax rate and service charge structure sufficient to balance the budget; to rule on requests to rezone property; and to adopt and amend the Augusta Code. The Board of Commissioners serves as the legislative branch of the Augusta government. The Board is comprised of ten part-time commissioners, all elected to a four year term. Augusta is divided into eight districts with one commissioner serving each district. There are also two"super districts,"each making up about half of Augusta's population. Each super district is serviced one commissioner. Therefore, every citizen of Augusta is served in an administrative and advisory capacity on related matter. II. OVERVIEW Augusta intends to enter into a three (3)year multiyear contract with a qualified entity to provide financial advisory services in connection with various financing transactions and programs and to act as Augusta's "municipal advisor"as contemplated by the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") and the Securities and Exchange Commission's Rule 15bA-a (the "Municipal Advisor Rule"). The Financial Advisor will be retained to assist Augusta in developing and implementing strategies to meet its long-term financial needs. Assignments will be made on a task order basis; that is to serve as financial advisor to complete a particular transaction or to work on discreet projects related to debt management or other financial matters. A. Debt Administration: Long-Term Debt: During 2014, Augusta refunded water and sewerage bonds that resulted insignificant financial savings for Augusta. Bond ratings are used as a measure of Augusta's financial condition. Augusta is currently refunding Airport bonds, Series 2005. Augusta had an established relationship with Standard & Poor's and Moody's for previous bond issues. B. Current rating of its bonds as of December 31, 2014: Moody's Investors Service Standard and Poor's General Obligation Aa2/Stable AA Water and Sewer Al/Stable not rated RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 11 of 30 A greater understanding of Augusta's overall operations and financial condition may be obtained from its most recent annual audited financial statements for the year ending December 31, 2013 as well as the month unaudited financial reports. Financial reporting information can be found at http://www.auQusta_gov/149/Financial-Statement$ Augusta's most recent budget can be found at http://www.auaustaga Qov/164/Budgets. C. In previous years, Augusta and its associated Authorities have issued general obligation bonds, Water and Sewerage Authority revenue bonds, and Urban Redevelopment Authority revenue bonds. Augusta's focus from a debt perspective will be to support Augusta's refunding or defeasance of other bond issues and monitoring events which would require action by Augusta in relation to its debt. Augusta may also seek ad hoc requests for the assistance of the Financial Advisor for guidance with financial planning. The principal function of the Financial Advisor will be to provide independent advice that serves solely the interests of Augusta in accordance with the fiduciary duties of a municipal advisor under Dodd-Frank and the Municipal Advisor Rule. III. SCOPE OF SERVICES The scope of services to be provided by the financial advisor team may include one or more of the following service for Augusta. The firm selected will be expected to provide financial advisory services related to all existing short and long term borrowings currently in existence, as well as any proposed short and long term borrowings, including bonded debt issues which may be proposed and issued from time to time during the period covered by this contract. The advisor will also be expected to provide actionable suggestions related to Augusta's long term financial plan as needed. The following is a general list of possible transactions and types of services to be provided: 1. Services a. Policy or Procedural Advice(such as state or federal legislative interpretation) b. Market Condition or Other Research on Rates or Structures c. Investor Relations, Publications, and Reports d. Review/Analysis, as a requested (such as a review of information used in negotiations, fiscal/economic impact, feasibility study, economic development) e. Topical presentations (policy analysis or white paper reports), as requested, to appointed or elected officials f. Other services of a similar nature and scope 2. Transactions a. General Obligation bond issues b. Revenue Bond Issues c. Refunding Bond Issues d. Special Tax/Development District Bond Issues e. Lease Revenue Bond Issues f. Lease Transactions g. Other Financing Transactions (such as economic development related financing, short-term borrowing, private placements,etc.) A. General Services 1. The successful responder will provide policy guidance and procedural advice — to assist and provide Augusta guidance in its overall approach to the subject of financing. Responder will also make recommendations on policy and procedures to follow in order to minimize risk, maximize services to citizens, and ensure prudent fiscal management; RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday, February 12,2016 r@D 11:00 a.m. Page 12 of 30 2. The Contractor shall develop a financing plan delineating the purpose of the financing and its structure. The plan shall include recommendations on the method of sale, ratings, bond sizing, insurance, etc. 3. Implement competitive financings, including production of preliminary and final official statements, and publication and distribution of sale documents; 4. Advise Augusta in negotiated financings including production and distribution of Requests for Qualifications (RFQs) and Request for Proposals (RFPs), production of preliminary and final offering memorandum, advising on issue pricing, discussions with underwriters, and publication and distribution of sale documents; 5. Develop or assist in the development of presentations and communications to bond rating agencies; 6. Develop and implement investor relations program and marketing plan for any financing Augusta should pursue; 7. Provide advice and input on the timing of Augusta debt issues, especially regarding other major state and local debt issues that may coincide or compete with Augusta sales as well as the timing of significant market activity which may impact the success of Augusta sates; 8. Monitor interest rate levels and assist and advise Augusta on refunding opportunities; 9. Assist and advise Augusta in the review of Federal and State legislation impacting the Augusta's financing programs; 10. Assist Augusta on special projects relating to debt issuance and financing matters; 11. Assist Augusta on special projects related to fiscal and economic impact analysis, feasibility studies, and/or special tax structures; 12. Assist Augusta on special project related to economic/business development. B. General Financial Planning 1. Consultation, as needed, with Augusta and its financial staff regarding various financing options or problems. 2. As requested by Augusta, provide directly or through third parties as agreed upon with Augusta: review of their investment portfolios with at the objective of establishing overall strategies, performance goals and risk factors; consulting with Augusta staff or external fund managers relative to the foregoing; providing general financial consulting services for banking, cash management, debt management, long term investments, evaluation of retirement or pension systems, etc. 3. Quarterly review of existing debt structure and financial resources of Augusta to determine the desirability of refinancing existing debt 4. Annual data on rating agency medians and annual list of AAA counties. 5. Advice on proposed and actual changes in tax laws, IRS and U.S. Treasury requirements related to tax exempt and tax credit bonds (including direct pay bonds such as Build America Bonds), as well as changes in the financial markets that would require action by Augusta. RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday, February 12,2016 @ 11:00 a.m. Page 13 of 30 6. Alert Augusta to any events related to bond covenants, continuing disclosure, or market disruption that would warrant action by Augusta. 7. Should Augusta have variable rate debt in its portfolio, quarterly valuations of was outstanding and an annual report of the risks associated with the swaps- At this time, Augusta has no variable rate debt, 8. If required, work with Augusta staff and bond counsel to coordinate all actions required for defeasance of any bond issue, including advice about filing material event notices. 9. Assist in the pricing and securing of tax anticipation notes as necessary based upon Augusta's cash flow needs. Augusta has needed and relied upon this mechanism for short term borrowing in the recent past and the need arise again in the future. 10. As requested by Augusta, provide research and analysis assistance in connection with economic development opportunities, special taxing districts, potential operational cost saving opportunities, public private partnerships, special state/federal grant, loan or financing opportunities, special projects, etc. C. Debt Issuance Related 1. Periodically evaluate financing options and advise staff as to the most beneficial method available among alternatives. Examples might include lease vs. purchase analysis or analysis related to economic development projects. 2. Assist Augusta in creation of a calendar of events supportive of an issue and assist with the preparation of Official Statements for bond issues in conjunction with bond counsel and Augusta staff. 3. Arrangement fir the widest possible distribution of Official Statements to bond underwriters and investors. 4. Assist and advise on the timely marketing of bond issues, derivative products, notes, certificate of participation, etc. 5. Assistance in determining the best bid received on a competitive sale. 6. Assistance in preparations for bond closing. 7. Advice on terms and features of bonds and on thing and marketing of bond issues. 8. Assistance with the preparation of cash flow forecasts for proposed bond issues addressing debt service requirements and sources of funding. D. Investment Related 1. Assistance in the selection of investment banking firms,when required. 2. Serve on Investment Committee in an advisory capacity, as needed, lend expertise related to financial markets and economic outlook, and provide recommendations to meet Augusta's investment needs. 3. Advice on the investment of bond proceeds in accordance with applicable laws, when needed. RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 14 of 30 4. Assistance in compliance with arbitrage rebate requirements. Arranging for arbitrage calculations, along with the preparation of federal reports and forms; or reviewing arbitrage calculations completed by Augusta staff or others E. Bonds Bonds issued by Augusta will be sold on a competitive basis and are marketed via Notice of Sale (NOS), Preliminary Official Statement (POS), and official Statement (OS). While the fee proposals will be evaluated under this proposal, Augusta may adjust the method of sale based upon market trends and the complexities of the offering. From time to time, Augusta has used negotiated sales for refunding's. Augusta's preference is for a competitive sale; however, if the market conditions or the nature of the issue suggest better results with a negotiated sale, Augusta will work with the selected financial advisor to structure such an issue. Augusta staff and Augusta's Bond and Disclosure Counsel actively participate in the preparation of the POS, NOS, and OS. Disclosure Counsel distributes document for review, comment, and approval. Augusta Finance Department will distribute documents for review, comment, and approval within Augusta and consolidate comments. Generally, Disclosure Counsel will handle all work processing functions related to the bond documents. 1. The Financial Advisor will be responsible for providing guidance to Augusta and legal counsel in preparation of these documents particularly recommendation about the structure. 2. The Financial Advisor will be responsible for providing language for selections of the documents which a Financial Advisor would normally be expected to generate including, but not limited to, document summaries, summaries of sections describing the Bonds/Notes and redemption and registration matters. 3. The Financial Advisor will be responsible for electronic posting of the POS/NOS/OS using nationally recognized firms such as http://www.onlinemunis.com or www.i-dealprosPectus.com and for the e-mailing of the document to local firms who specially request to be included in the bidding process. 4. The Financial Advisor will be responsible for marketing Augusta's transactions to prospective investors. 5. The Financial Advisor will be responsible for overseeing the bidding processing that may include hand delivery, faxed delivery, and/or electronic delivery of the bids via the PARITY system or equivalent. Evaluation of the bids will take palace immediately after the RFP deadline and advice will be given Augusta's Finance Director rewarding the acceptance of the winning REP. 6. The Financial Advisor will be responsible for evaluating existing bonds for possible refunding opportunities and determining the size of the issue. 7. Augusta staff and the Bond and Disclosure Counsel actively participate in the preparation of the POS, NOS, and OS. Disclosure Counsel distributes documents for review, comment, and approval. Augusta Finance Department will distribute documents for review, comment, and approval within Augusta and consolidate comments. Generally, Disclosure Counsel will handle all word processing functions related to the bond documents. The Financial Advisor will be responsible for providing guidance to Augusta and legal counsel in preparation of these documents particularly recommendation about the structure. RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 15 of 30 F. Other 1. Assistance in selecting trustee, escrow agents, paying agents, and other financial intermediaries, as necessary. 2. Coordination of applications for future credit ratings in order to maintain the highest possible credit rating. Preparation of applications for bond insurance as applicable, liquidity provider, line of credit, or other credit enhancement devices as needed. Analysis of savings which will result from the use of recommended credit enhancement devices. 3. Attendance at Augusta Commission meetings or Authority meetings with Augusta staff, as required. 4. Assistance in and representation of Augusta in audit preparations, IRS examinations, SEC investigations, court proceedings, or other legal or regulatory matters. 5. Develop and deliver informational presentations for the Board of Commissioners as requested including detailed analysis of the given subject and recommended actions as appropriate. 6. The Financial Advisor will be responsible for providing guidance to Augusta and legal counsel in preparation of these document particularly recommendation about the structure. 7. The Financial Advisor will be responsible for providing language for selections of the documents which a Financial Advisor would normally be expected to generate including, but not limited to, document summaries, summaries of sections describing the Bonds/Notes and redemption and registration matters. 8. Provide a written and oral report on the financial results of Augusta (budget vs actual) by major fun (tax funds, water and sewer, sanitation) and changes in fund balance on an as requested basis. 9. Provide a written and oral annual report to review the year-end audit and in particular how the results relate to Augusta's credit ratings upon request. 10. The firm selected will provide all services listed in the Scope of Services to any member of Augusta, and will provide all members of Augusta the same advice and information, notwithstanding the decisions or pronouncements of any member of Augusta. 11. Provide memorandums to Augusta annually with concrete recommendations about the finances of Augusta (reserve levels, continuing disclosure, refinancing opportunities, total debt outstanding, coverage ratios on the water and sewer debt, GAAP vs Cash fund balances,etc.) 12. The firm selected will be expected to provide financial advisory services related to all existing short and long term borrowings currently in existence, as well as any proposed short and long term borrowings, including bonded debt issues which may be proposed and issued from time to time during the period covered by this contract. The advisor will also be expected, as needed, to provide actionable suggestions related to Augusta's long term financial plan. IV. FIRM QUALIFICATIONS Augusta expects to work closely with its advisor to ensure that the tasks outlined in the scope of services section are completed in a time. efficient and accurate manner. Accordingly, Augusta expects that its advisor will be constantly up-to-date with applicable financial analysis and reporting standards, and will maintain appropriate expertise at the proposer's own expense. The following qualifications must be met in order to submit a proposal to Augusta for this assignment. RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a-m. Page 16 of 30 1. Proposers must be currently registered with both the Security and Exchange Commission (SEC) and Municipal Securities Rulemaking Board (MSRB) as a Municipal Advisor, and provide in their proposal a Certificate of Current Municipal Advisor Registration from the MSRB rules G-37 and G-38. Proposers must disclose their current ownership structure, including beneficial owner, and other affiliated regulated business, as well as any individual who may have securities licenses or Municipal Advisor registrations held with other entities. For purposes of this RFP, officials of the issuer include the elected officials who serve on the Board of Commissioners of Augusta or on the boards of any of Augusta's Authorities. 2. Proposed contractors should have served as a Financial Advisor to jurisdictions comparable to Augusta, Georgia, in size and complexity of their debt program (issues and related financings). Respondent need to be experienced in the types of municipal financing transactions contemplated in this RFP. Respondents should also have staff available to perform work in a timely manner, according to Augusta's frequently moving schedules and targets. 3. Proposed contractors and their subcontractors must know and state to the best of their knowledge there are no circumstances that shall cause a conflict of interest in performing services for Augusta. The successful firm will be required to sign as a part of the terms and conditions of their being engaged by Augusta statements regarding conflict of interest and contingency fees. V. PROPOSER REQUIREMENT AND INFORMATION 1. Individuals, firms and businesses seeking an award of an Augusta contract may not initiate or continue any verbal or written communications regarding a solicitation with any Augusta officer, elected official, employee or other Augusta representative without permission of the Procurement Director named in the solicitation between the date of the issuance of the solicitation and the date of the final contract award by the Board of Commissioners. Violations will be reviewed by the Procurement Director- If determined that such communication has compromised the competitive process. the offer submitted by the individual, firm or business may be disqualified from consideration for award. 2. Any prospective Advisor must make an affirmative statement to the effect that their retention, if selected, shall not result in a conflict of interest with any party, which may be affected by this program. This statement is included as part of the proposed contract. The Advisor will be precluded by the terms of the agreement from participating in as investment banker, swap counterparts, underwriter or in any manner other than as the Financial Advisor for bonds of Augusta. Alternatively, should any potential or existing conflict be known by a prospective advisor, said prospective Financial Advisor must specify the party with which the conflict exists or might arise, the nature of the conflict and whether the prospective Financial Advisor would or would not step aside or resign from that engagement or representation creating the conflict in favor of Augusta. 3. Exceptions to the requirements of the RFP must be clearly stated in the proposal/response. Note: Augusta will take into account any exceptions in its scoring and evaluation process and respondents are strongly encouraged to address and comply with the requirements included herein. 4. Joint proposals are not accepted, however, the contract for Financial Advisory services allows for the selected vendor to utilize subcontractors, as needed. Proposals need to be submitted by the firm who would hold the contract with Augusta for services. If plans to subcontract portions of the required services are included, please provide detail on such plans. 5. The firm selected will provide any service listed in Augusta to any member of the Governing Authority of Augusta, and will provide all members of the Governing Authority the same advice RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016©11:00 a.m. Page 17 of 30 and information, notwithstanding the decisions or pronouncements of Management or any member of the Governing Authority. VI. PROPOSAL FORMAT Responders are required to submit their proposal in the following format: A.TECHNICAL PROPOSAL(NOTE: DO NOT INCLUDE ANY COSTS OF ANY KIND IN THIS SECTION) Technical Proposals must be submitted in a sealed envelope(s)or box(es)with the responder's name and "Request for Proposal 16-128 for :Financial Advisory Services for Debt Issuance" on the outside of each envelope or box. 1. Financial Advisor Methodology(40 Points) Not to exceed 18 pages a State if your firm meets the criteria for Firm's Qualification listed section IV. Provide a copy of your company's MSRB Certificate. b. Responder is required to discuss and provide specific information concerning the in-house technical support, computer modeling, and financing analysis capabilities,which the proposer will provide to Augusta. Detail the background and experience of technical staff. If technical support and analysis is to be provided by a firm other than the Proposers through a subcontracting arrangement; identify that firm, its relationship to the Proposer and its experience and resources to provide such services. c. Responder shall provide at least one and not more than three (3) examples of financing or financing management advice given to a client who, in the opinion of the Proposer, represents innovative problem solving initiated by the Proposer, or is otherwise of particular note. d. Address the organization of your firm, the location of offices, and how resources can be put to work for Augusta. e. Describe the logistics of your firm's accessibility to Augusta in terms of geographic location of the individuals with primary responsibility for the client relationship with Augusta and the travel time and restrictions, if any, to be on site, at Augusta. In addition, indicate how travel cost and time will be billed, i.e.,from the point of origin or as if the Proposer were situated in Augusta. f. Responders shall describe your firm's ability to structure and price financings. Explain the processes used to determine market timing, maturity, structure, ratings, and credit enhancements. Also describe your firm's recommended refunding methodology and criteria. g. Develop a case study based on Augusta's outstanding (or projected debt) or general fiscal condition and provide a detailed analysis of a specific situation where recommended action would improve or enhance Augusta's debt management, fiscal management, or credit. Describe the situation and the basis for recommending the improvement, explain the strategy for implementing the solution, and discuss the benefits and/or attendant risks. h. Describe what type and how your firm would implement availability of ongoing training and educational services that could be provided to Augusta. Please note, cost should be stated in the cost proposal only. i. Responsive firms will provide a sample "Plan of Advisement" that will briefly describe your firm's recommendation for keeping Augusta abreast of developments in the public financial sector, RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday, February 12,2016 @ 11:00 a.m. Page 18 of 30 options available to Augusta for managing borrowing costs, and analysis of the impact on Augusta credit worthiness. 2. Expertise of Assigned Personnel: (30 Points) Not to Exceed 10 pages a. Responder is required to identify the qualified individual that will serve as the Lead for the Financial Advisory Team, the qualified individual(s)who will be part of the team, and any outside qualified personnel (such as subcontractors), stating the role each will perform for Augusta. b. Responder must provide resumes with complete job descriptions and staff qualifications of the proposed key team members that will be assigned to Augusta. c. Responder must provide a description of Responder's experience, capabilities and other qualifications for this project that evidences Responder's ability to successfully complete the project. Clearly identify experience within the State of Georgia. In addition, identify those individuals who would be responsible for subject specific work listed below in (d). d. Briefly discuss relevant experience of the Proposer and the experience of the specific persons who would be assigned to work with Augusta based on their financial advisory experience in Georgia. Also provide evidence of specific experience related to public finance projects including but not limited to local government borrowing, economic development or redevelopment projects, and strategic financial advising. In tabular form, provide a listing aggregated by type of security, e.g. bonds (new money and refunding), COPs, bank loans, community and special assessment districts, etc., enumerating the aggregate dollar amount and number of each type of tax exempt and taxable security issued by Georgia state and local governmental issues for which the proposer has acted as a financial advisor since January 1, 2010. Clearly distinguish for each security types the dollar amount and number of transactions which were competitive and negotiated. In particular, discuss relevant experience with economic development financing and public private partnerships. Finally, identify defaulted issues for which the Proposer has acted as financial advisor, and provide an explanation of such default. e. Provide the same information as requested in (d) above, in the same format, for advisory work performed outside of the State of Georgia. f. Demonstrate the advisor's knowledge of local political, economic, legal, or other issues that may affect August's financial plan. h. Describe the analytic capability of the Advisor and assigned individuals to Augusta's program. 3. Firm References and Capacity to Serve(20 Points) Not to exceed 10 pages a. Responder must provide a financial statement for the last three (3) years that evidences that the responder has the financial capacity to perform the scope of work. b. Prepare tabulation presentations for the following as of the date when such information is most recently available: Total Capital and Equity Capital (if available) Longevity as a municipal financial advisor Number of employees and number of whom is professional staff Description of ownership structure and business dealings of parent companies, if any c. Provide three (3) references from three prior or existing financial advisory engagements with governmental bodies, which are comparable with Augusta (i.e., population base, operating and capital budget, debt outstanding, credit rating, and a similar political and geographic environment) RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 19 of 30 specified herein using the Reference and Release Form (Responder) attached hereto as Attachment C. d. Responder shall identify all proposed subcontractors that will be performing work under the proposed contract, using the subcontractor information form which will be supplied in the form of an addendum. e. Responder must list any recent (in the last three (3) years) or pending business related litigation, including the outcome of such litigation. Identify fully the extent to which the Proposer or any of its individual partners or employees are the subject of any ongoing securities investigation (including investigations undertaken by the SEC, state blue-sky commissions, the U.S. Department of Justice and the Internal Revenue Service pursuant to IRC Section 6700), are a pity to any securities litigation or arbitration, or are the subject of a subpoena in connection with a municipal securities investigation, including any investigations involving auction rate secretes and bud-rigging. Include any such investigations which concluded in an enforcement or disciplinary action ordered or imposed in the last three years and a description of those actions. Also, indicate whether the Proposer has ever filed for bankruptcy and describe the circumstances. f. Disclosure of any affiliation or relationship with any broker dealer. g. Disclosure of any finder's fees, fee splitting, payments to consultants, or other contractual arrangements of the firm that could present a real or perceived conflict of interest, 4. Business and Professional License Responders shall submit with their proposal, a copy of their valid company license. If the Responder is a Georgia corporation, Responder shall submit a valid county or city business license. If the Responder is not a Georgia corporation, Responder shall submit a certificate of authority to transact business in the state of Georgia and a copy of their valid business license issued by their home jurisdiction. If Responder holds a professional certification which is licensed by the state of Georgia, then Responder shall submit a copy of their valid professional license. Any license submitted in response to this requirement shall be painted by the Responder for the duration of the contract. 5.Cost Proposal(10 Points) a. The cost proposal must be submitted in a separate, sealed envelope with the responder's name and "Cost Proposal for RFP 16-128 for "Financial Advisory Services for Debt Issuance" on the outside of the envelope. b. DO NOT INCLUDE FEES OR COSTS IN ANY AREA OUTSIDE OF THIS COST PROPOSAL. Including fees in any area outside of the Cost Proposal in its separate, sealed envelope will result in Responder's proposal being deemed non responsive. c. Responders are required to submit their cost proposal in the same format as Attachment J- 6. Standard County Contract Revisions All responders should thoroughly review Augusta's Standard Contract prior to submitting a proposal. Any proposed revisions to the terms or language of this document must be submitted in writing with the responder's response to the RFP. Since proposed revisions may result in a proposal being rejected if the revisions re unacceptable to Augusta. responders should review any proposed revisions with an officer of the firm having authority to execute the contract. A sample contract will be supplied in the form of an addendum. RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 20 of 30 7-Criteria for Evaluation The following evaluation criterial weights will be used as the basis for the evaluation of proposals. The evaluation criteria are not listed in order of importance: a, Financial Advisor Methodology 40 points b. Expertise of Assigned Personnel 30 points c. Firm Reference and Capacity to Serve 20 points d.Cost Proposal 10 points e. Interviews, if granted 15 points(optional) CRITERIA POINTS 1 Financial Advisor Methodology 40 2 Expertise of Assigned Personnel 30 3 Firm Reference and Capacity to Serve 20 Proposed Fee(must provide and enclose in separate sealed envelope) • Lowest 10 points 4 • Second 8 points • Third 6 points 10 • Fourth 4 points • Highest 2 Points Total 100 Submit all required information for any subconsultants/subcontractor(s) that will be used to perform any part of the requested services. Consultants/Contractors will also be evaluated using the above listed criteria in that order of importance. VII. CONTRACT ADMINISTRATION A. Standard Contract Augusta's standard contract document specifically outlines the contractual responsibilities. No alterations can be made in the contract after award by the Board of Commissioners. B. Ethics Rules To the extent that the, the Code of Augusta, allow a gift, meal, travel expense, ticket, or anything else of value to be purchased for a CEO employee by a contractor doing business with Augusta, the contractor must provide written disclosure, quarterly, of the exact nature and value of the purchase to the Finance Director or his/her designee. Additionally, every contractor who conducts business with Augusta will receive a copy of these ethical rules at the time of execution of the contract. C. Submittal Instructions 1. One(1)original and seven (7) identical copies or the proposal and one(1)sealed, separate copy of the Cost Proposal. Provide one (1) CD of the entire proposal. Save the proposal fee schedule as a separate file on the CD. Please label the CD with your firm's name and the proposal number. 2. Augusta will accept proposals from different offices of individual firms. The proposal needs to state clearly from which office the proposal is submitted. 3. Required forms are to be submitted on the proper unaltered forms. RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 21 of 30 4. It is the responsibility of each responder to ensure that their submission is received by 11:00 a.m. Be aware that visitors to our office will go through a security screening process upon entering the building. Responders should plan enough time to ensure that they will be able to deliver their submission prior to our deadline. Late submissions, for whatever reason, will not be accepted. Responders should plan their deliveries accordingly. 5. Augusta reserves the right to request clarification of information submitted and to request additional information of one or more applicants. D. Pre-Proposal Conference A Mandatory Pre Bid/Telephone Conference will be held on Wednesday, January 27, 2016, @ 3:00 p.m. in the Procurement Department, 535 Telfair Street, Room 605. The call-in telephone number is 1-800-853-5481 (U.S. & Canada) and 713-936-6995 (International). Call one of the dial-in numbers at least five (5) minutes prior to conference. If you choose to teleconference there is a $35.00 fee. Make the $35.00 check payable "Augusta Georgia Commission" and mail to Geri A. Sams, Director Augusta Procurement Department 535 Telfair Street- Room 605 Augusta, Georgia 30901. E. Questions All questions must be submitted in writing by fax to 706-821-2811 or by email to procbidandcontract@augustaga.gov to the office of the procurement Department by Friday, January 29, 2016 @ 5:00 p.m. F. Acknowledgment of Addenda Addenda may be issued in response to changes/additions in the RFP. It is the responsibility of the responders to ensure awareness of all addenda issued for this solicitation. You are required to acknowledge the addenda by initialing in the appropriate place on Attachment B as requested. All addenda issued for this project will be posted on Augusta's website, http:/www.augustaga.gov G. Proposal Duration Proposals must be valid for a period of ninety(90)days from proposal submission deadline RFP SCHEDULE RFP Released: December 31, 2015 RFP Closing Date: Friday, February 12, 2016 @ 11:00 a.m. RFP Evaluation Date: February 2016 Interviews/Oral Presentations: February 2016 Recommendation to Board March 2016 The schedule may be changed as necessary based upon the sole discretion of Augusta. H. Expenses of Preparing Responses to this RFP Augusta accepts no responsibility for any expenses incurred by the responders to this RFP. Such expenses are to be borne exclusively by the responders. I. Georgia Open Records Act Without regard to any designation made by the person or entity making a submission, Augusta considers all information submitted response to this invitation or requests to be a public record that will be disclosed upon request pursuant to the Georgia Open Records Act, O.C.G.A. 50-18-70 et seq., without consulting or contacting the person or entity making the submission, unless court order is presented with the submission. You may wish to consult an attorney or obtain legal advice prior to making a submission. RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 22 of 30 VIII.AWARD OF CONTRACT A. An evaluation committee will review and score all responsive and responsible proposals based on the information and criteria provided in Section III, Scope of Services, Firm Qualifications, Proposer Requirement and Information, Proposal Format, Evaluation Criteria. B. Interviews are optional. In the event that the evaluation committee elects to conduct interviews, these will consist of an oral presentation to the evaluation committee that will not exceed the duration of one hour. Responders listed for interviews will respond to questions from the evaluation committees that are relevant to the responders' proposal. C. After all scoring has been completed; the committee will submit its recommendation for award to the Augusta Board of Commissioners,who will make the final decision, as to award of contract. D. After the award of the contract, the Department of Finance and the BOC will appoint a contract manager to handle all issues pertaining to the awarded contract, including but not limited to, payment and invoice issues. SELECTION PROCESS: A Selection Committee will review all proposals submitted in response to this RFP. Submit all required information for any subconsultants/subcontractor(s) that will be used to perform any part of the requested services. Consultants/Contractors will also be evaluated using the above listed criteria. Your team will be evaluated on the basis of how well your firm and its individual professionals meet the criteria outlined below including general and specific selection criteria- Based on the Evaluation Criteria, Augusta reserves the right to select more than one firm to provide the requested services. Please submit your proposal in a concise written tabulated format indexed and organized in order by the following sections: Phase One Criteria(Identify short listed offerors only) The Procurement Director, in consultation and upon the recommendation of the head of the using agency, shall select from among the offerors no less than three (3)offerors (the"short-listed offerors") deemed to be the most responsible and responsive; provided, however, that if three (3) or less offerors respond to the solicitation, this requirement will not apply. The selection of the short-listed offerors shall be made in order of preference. From the date proposals are received by Procurement Director through the date the contract is awarded, no offeror may make substitutions, deletions, additions or other changes in the configuration or structure of the offeror's teams or members of offeror's teams prior to award. It is the intent of the Owner to conduct a fair and comprehensive evaluation of all proposals received. The contract will be awarded to the proposer who submitted a proposal that is most advantageous to the Owner. Your team will be evaluated on the basis of how well your firm and its individual professionals meet the criteria outlined including general and specific selection criteria. Based on the Evaluation Criteria, Augusta reserves the right to select more than one firm to provide the requested services. Please submit your proposal in a concise written tabulated format indexed and organized. The recommended firm and contract will be presented to the Augusta Commission for final approval. Each submittal must respond to the requested information for each section. RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday, February 12.2016©11:00 a.m. Page 23 of 30 Phase Two Criteria (Rank the company that best address scope of service/ technical proposal as outlined in the specifications to be in the best interest of Augusta, Georgia). Note: All offerors selected to participate in Phase Two shall be equally evaluated without respect to the score received in Phase One. After an initial screening process, a technical question and answer conference or interview will be conducted, if deemed necessary, to clarify or verify the offeror's proposal and to develop a comprehensive assessment of the proposal. Final negotiations and letting the contract. The Committee shall rank the technical proposals, open and consider the pricing proposal. Award shall be made or recommended for award through the Augusta, Georgia Administrator, to the most responsible and responsive offeror whose proposal is determined to be the most advantageous to Augusta, Georgia. No other factors or criteria shall be used in the evaluation. The contract file shall contain a written report of the basis on which the award is made/recommended. The contract shall be awarded or let in accordance with the procedures set forth in this Section and the other applicable sections of this chapter. PRICE PROPOSALS The Committee will evaluate the responses to the RFP, verify the information presented, and conduct oral interviews, as deemed appropriate. This process will result in the selection of the successful vendor who, through contractual agreements will undertake the scope of work. Price is not the driving factor of this award and shall be considered as follows: In making this decision, the Using Agency and the Procurement Director shall take into account the estimated value, the scope, the complexity and the professional nature of the services to be rendered. Should the Using Agency and the Procurement Director be unable to negotiate a satisfactory contract with the offeror considered to be the most responsible and responsive at a price for the Using Agency and the Procurement Director determines to be fair and reasonable to Augusta, Georgia; negotiations with that offeror shall be terminated. The Using Agency and the Procurement Director shall then undertake negotiations with the second most responsible and responsive short-listed offeror. If negotiations with the second most responsible and responsive short-listed offeror are unsuccessful, negotiations shall be terminated and the Using Agency and the Procurement Director shall then undertake negotiations with the third most responsible and responsive short-listed offeror. Should Using Agency and the Procurement Director be unable to negotiate a contract with any of the short-listed offerors, the Using Agency and the Procurement Director and the using agency may select from the additional offerors that were not short-listed in order of their responsibility and responsiveness and the Using Agency and the Procurement Director may continue negotiations in accordance with this section until an agreement is reached. Price information shall be separated from the proposal in a sealed envelope and opened only after the proposals have been reviewed and ranked. The names of the respondents will be identified at the proposal opening; however, no proposal will be handled so as to permit disclosure of the detailed contents of the responses until after award of contract. A record of all responses shall be prepared and maintained for the files and audit purposes. Price shall be submitted in a separate sealed envelope with the following information on the outside of it: RFP 16-128 Financial Advisory Services for Debt Issuance — Finance Department. When in the best interest of the Augusta, Georgia, Augusta reserves the right to request additional fee information and to request a"Best and Final" offer. RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 24 of 30 Local Small Business Goal The Local Small Business Opportunity Program (LSBOP) provides for Local Small Business goals to be set on all applicable Augusta, Georgia procurements over $100,000 in value. The Local Small Business goal for this procurement is: As a result of the Local Small Business Goal on this procurement being ZERO, no LSBOP documents are required as part of the procurement process. However, even when a solicitation does not contain a Local Small Business goal (or the goal is set at zero), each Bidder must negotiate in good faith with each local small business that responds to the Bidder's solicitation and each local small business that contacts the Bidder on its own accord. All successful bidders are required to collect and maintain all records necessary for Augusta to evaluate the effectiveness of its LSBOP. RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 25 of 30 ATTACHMENT A AUGUSTA BOARD OF COMMISSIONERS SUMMARY OF NOTES/BONDS OUTSTANDING AS OF August 28,2015 $30,550,000 General Obligation Bonds, Series 2009 due in one remaining annual installment of $11,800,000 on 10/1/2015;interest at 4.00%;amount outstanding—$11,800,000. $21,950,000 General Obligation Bonds, Series 2010, due in one remaining annual installment of $5,700,000 on 10/1/2015: interest at 2.00%;amount outstanding—$5,700,000 $22,120.000 Augusta Richmond County Coliseum Authority Revenue Bonds, Series 2010, due in annual installments of $1,724,500 to $1,728,750 through 10/1/2030; interest at 2.00% to 5.00%; amount outstanding—$18,945000 $8,000,000 Urban Redevelopment Agency of Augusta Revenue Bonds , Series 2010, due in one remaining annual installment of $6,710,000 on 10/1/2015; interest at 3.1%; amount outstanding— $6,710,000. $28,500,000 Urban Redevelopment Agency of Augusta Revenue Bonds, Series 2014, due in remaining annual installments of $927,570 to $2,198, 150 through 10/1/2034; interest at 2.00 % to 5.00%;amount outstanding—$28,500,000. $177,010,000 Augusta Richmond County Water and Sewerage Revenue Bonds, Series 2007, due in remaining annual installments of$8,735,000 to $10,830,000 through 10/1/2030; interest at 4.00% to 5.00%;amount outstanding—$151,285,000. $138,830,000 Augusta Richmond County Water and Sewerage Revenue Bonds, Series 2012, due in remaining annual installments of$4,155,000 to $20,095,000 through 10/1/2032 interest at 3.00% to 5.00%;amount outstanding—$138.830,000. $22,070,000 Augusta Richmond County Water and Sewerage Revenue Bonds, Series 2013, due in remaining annual installments of $ 875,000 to $1,800,000 through 10/1/2033; interest at .70% to 4.85%;amount outstanding—$21,200,000. $169,180,000 Augusta Richmond County Water and Sewerage Revenue Bonds, Series 2014, due in remaining annual installments of$ 820,000 to $24,635,000 through 10/1/2039: interest at 3.00% to 4.50%;amount outstanding—$169,180,000. $19,605,000 Augusta Richmond County Augusta Regional Airport Revenue Bonds, Series 2005, due in remaining annual installments of$ 1,355,000 to$2,275,000 through 10/1/2035; interest at 5.15%to 5.45%;amount outstanding—$19,605,000. $11,475,000 Augusta Richmond County Waste Management Authority Revenue Bonds, Series 2004 due in remaining annual installments of$ 185,000 to$215,000 through 10/1/2019; interest at 3.00%to 4.00%;amount outstanding—$1,005,000. $9,165,000 Augusta Richmond County Waste Management Authority Revenue Bonds, Series 2010 due in remaining annual installments of$365,000 to$660,000 through 10/1/2030;interest at 3.00%to 4.50%;amount outstanding—$7,895,000. RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 26 of 30 ATTACHMENT C REFERENCE AND RELEASE FORM (RESPONDER) 15-500334 FINANCIAL ADVISORY SERVICE List below at least three (3) references, including company name, contact name, address, email address, telephone numbers and contract period who can verify your experience and ability to perform the type of service listed in the solicitation. Company Name Contract Period Contact Person Name and Title Telephone Number(include area code) Complete Primary Address(City) State Zip Code Email Address Fax Number(include area code) Project Name Company Name Contract Period Contact Person Name and Title Telephone Number(include area code) Complete Primary Address(City) State Zip Code Email Address Fax Number(include area code) Project Name RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m• Page 27 of 30 ATTACHMENT C (Cont.) Company Name Contract Period Contact Person Name and Title Telephone Number(include area code) Complete Primary Address(City) State Zip Code Email Address Fax Number(include area code) Project Name REFERENCE CHECK RELEASE STATEMENT You are authorized to contact the references provided above for purposes of this RFP. Signed Title (Authorized Signature of Responder) Company Name DATE RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday, February 12,2016©11:00 a.m. Page 28 of 30 ATTACHMENT J COST PROPOSAL FORM (consisting of 2 pages) RFP 16-128 Financial Advisory Services for Debt Issuance Responder: Please complete the attached pages of the Cost Proposal Form, and return them with this cover page. The cost proposal must be submitted in a separate, sealed envelope with the Responder's name and Request for Proposal No. 16-128 — Financial Advisory Services for Debt Issuance clearly identified on the outside of the envelope. By signing this page, Responder acknowledges that he has carefully examined and fully understands the Contract, Scope of Work, and other attached documents, and hereby agrees that if his proposal is accepted, he will contract with Augusta Georgia according to the RFP documents. Please provide the following information: Name of Firm: Address: Contact Person Submitting Proposal: Title of Contact Person: Telephone Number: Fax Number: E-Mail Address: Signature of Contact Person: RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday, February 12,2016 @ 11:00 a.m. Page 29 of 30 ATTACHMENT J (cont.) COST PROPOSAL FORM 1. Please explain your firm's annual retainer and payment terms. Include contracted number of hours included in the annual retainer fee. 2. Please describe your firm's hourly fees. Fee structure should include a brief explanation of the nature and use of the fees (research, non-transactional, etc.) as well as staffing associated with each hourly rate. 3. Transactional Fees (General Obligation and Revenue Bonds) Issuance Amount Less than $50 million (Per 1,000 of bonds Incremental over$50 million(Per 1,000 of bonds) Minimum Fee(Per Transaction) Surcharge for competitive Sale, if any(Per 1,000 bonds) Surcharge for refunding, if any(Per 1,000 bonds) Maximum Fee Other Transaction Fees(please describe) 4. Please describe (in detail) any other fees not detailed above, including travel reimbursement of pre-approved expenses, debt related fees, and all other proposed fees. RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016©11:00 a.m. Page 30 of 30 APPENDIX II CONTRACTOR'S RESPONSE TO REQUEST FOR PROPOSAL NO. 16-128 FOR FINANCIAL ADVISORY SERVICES Page 19 of 19 DAVENPORT & COMPANY Augusta, Georgia Proposal to Provide Financial Advisory Services RFP Item #16-128 February 19, 2016, 11:00 A.M. Member NYSE I FINRA SIPC Friday, February 19, 2016 DAVENPORT&COMPANY Senior E.Rogers SeniorrVice President Davenport&Company LLC One James Center 901 East Cary Street,Suite 1100 Richmond,Virginia 23219 (804)697-2902 crogers @ investdavenp ort.com February 17, 2016 Geri A. Sams, Director Augusta Procurement Department 535 Telfair Street, Room 605 Augusta, Georgia 30901 Dear Mr. Sams On behalf of my colleagues at Davenport & Company LLC ("Davenport"), I am pleased to provide this Proposal for Financial Advisory Services in response to Request for Proposal 16-128. We trust you will find that our proposal demonstrates that both Davenport as an institution, and more importantly, the professionals assigned to the City of Augusta, Georgia (the "City"), are eminently qualified to provide you all of the services identified in a timely manner. Personal Commitment - The primary team members who would serve the City on a day-to-day basis would be led by Courtney Rogers, a Senior Vice President in our Richmond office, and Ricardo Cornejo, a First Vice President in our Atlanta office. The support team would include other professionals located in Atlanta, Richmond and Hilton Head. In addition, our firm's underwriting desk would be available on an as needed basis to provide interest rate and market advice for the City. Approach to the Assignment - We have built our Financial Advisory practice on providing independent, unbiased advice with unequalled service and responsiveness. As discussed in our response, this philosophy applies to all aspects of transaction related services and all non-transaction related services such as strategic financial planning, comprehensive funding options analysis, enhancement of Financial Policy guidelines and pro-active rating agency communications, to name just a few. The Davenport team will utilize all of its technical and analytical resources and expertise in providing these value-added services and developing innovative ideas. Seasoned Team of Professionals - The professionals at Davenport offer nearly 200 years of experience in Public Finance and national credentials demonstrating an intimate understanding of the tax-exempt financial markets. Since 1998, our colleagues have had personal responsibility for nearly $47.1 billion in Financial Advisory assignments. Full Service Oriented Financial Advisory Approach - Our Financial Advisory practice is founded on the premise of providing exceptional service and building long-term relationships with our clients. The fact that Davenport is one of the last remaining independent investment banking firms in the region attests to the fact that providing clients with unparalleled service is our number one priority. The City can look to Davenport to fulfill its Financial Advisory needs with the same level of expertise and service. Davenport places an emphasis on going beyond the traditional role of advising on debt issuance. We also provide comprehensive financial planning and policy review assistance as well as revenue enhancing strategies through investment management and public-private financings. DAVENPORT&COMPANY Courtney E.Roden Senior Vice President Davenport&Company LLC Underwriting and Trading Desk - Davenport's underwriting desk sets us apart from other financial advisory firms. Having an underwriting desk provides us with in-house market updates and shadow pricing indications for the taxable and tax exempt markets. This enables us to provide a unique, real-time understanding of movements in interest rates that will allow the City to position itself to ensure the most effective and efficient pricing of the bonds. If selected to serve as Financial Advisor, the knowledge and expertise of Davenport's trading desk will be used solely for the City's benefit and not in an underwriting or broker-dealer capacity. Our team would be honored to serve the City in a Financial Advisory capacity. We would welcome any opportunity to make further presentations outlining our qualifications to serve the City in writing or in person if so desired. We look forward to hearing from you soon. Sincerely, Courtney E. Rogers Senior Vice President I Public Finance Davenport& Company LLC Ricardo Cornejo First Vice President I Public Finance Davenport& Company LLC RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Contents 1. Financial Advisor Methodology 1 la. Statement of Firms Qualifications 1 lb. Technical Support and Analysis 2 1c. Innovative Solutions 5 ld. Firm Overview 7 le. Accessibility 9 lf. Financing Strategy 9 1g. Case Study 15 lh. Ongoing Training 16 1i. Plan of Advisement 17 2. Expertise of Assigned Personnel 19 2a. Financial Advisory Team 19 2b. Resumes 20 2c. Experience 26 2d. Georgia Financial Advisory Experience 28 2e. Non-Georgia Financial Advisory Experience 29 2f. Understanding Augusta's Financial Plan 30 2g. Analytical Capability 30 3. Firm References and Capacity to Serve 31 3a. Financial Statements 31 3b. Firm Capital 31 3c. References 31 3d. Subcontractors 35 3e. Litigation 35 3f. Broker Dealer Relationships 35 3g. Finder's Fees 35 Appendices 36 A. Georgia Financial Advisory Experience 36 B. Non-Georgia Financial Advisory Experience 37 C. Case Study 43 D. Davenport Financial Statements 44 E. Required Attachments 45 DAVENPORT&COMPANY Friday,February 19,2016 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. 1. Financial Advisor Methodology la. Statement of Firms Qualifications State if your firm meets the criteria for Firm's Qualifications listed section IV. Provide a copy of your company's MSRB Certificate. Based upon our understanding of the work that will be requested by the City, we believe the following key points highlight why Davenport is most qualified to serve Augusta, Georgia as its Financial Advisor. Proof of Davenport's MSRB registration is provided in Appendix D. Stability and Ownership Structure of the Firm Davenport & Company LLC was established in Richmond, Virginia in 1863. Davenport is 100% employee owned and is governed by a Board of Directors, all of whom are required to be current Davenport employees. We believe that this structure allows the Company to focus on long-term relationships with our clients instead of short-term, quarterly financial targets. Davenport is a broker-dealer and registered as a municipal advisor with the Municipal Securities Rulemaking Board and the Securities and Exchange Commission. Our SEC registration number is 86-00106-00 and our MSRB Registration number is A0364. Commitment to the Region Davenport's 400+ employees all work primarily in the Southeastern/Mid-Atlantic Region, with 22 offices covering North Carolina, South Carolina, Virginia, Maryland, and Georgia. Davenport's Public Finance Department is comprised of 26 professionals located in 7 offices: Atlanta, GA; Charlotte, NC; Hilton Head, SC; Leesburg, VA; Raleigh, NC; Richmond, VA; and Towson, MD. Experienced Personnel/ Deep Bench Davenport Public Finance professionals hold prior experiences such as Certified Public Accountant, Chief Budget Officer, Senior Credit Rating Analyst, Bond Attorney, Auditor, School of Government Faculty, and Verification Agent. Davenport approaches all of our engagements as a team effort. The City would benefit from access to our entire Public Finance Department, as appropriate, based on the needs of specific projects. In addition to Davenport's Public Finance professionals,the City would have access to and benefit from Davenport's Fixed Income Sales and Trading Department. Davenport's Fixed Income professionals participate in the Municipal Market on a daily basis. This direct market expertise allows Davenport to provide our Financial Advisory clients with in house, real- time unbiased market updates and shadow pricing indications for both planning and transaction related deliverables in the taxable and tax-exempt markets, something that advisory-only firms cannot provide. Unique Full Service Approach Davenport is committed to providing our clients with the full spectrum of advisory services from the pre-transaction planning phase through post-issuance work. Our typical local government engagement will include the following deliverables/ services: Credit Assessment/ Rating Agency Strategy; Comprehensive Debt Capacity/ Debt Affordability and Pro-Forma Models; Peer Group Comparative Analysis; Financial Policy Guidelines; Development of Plan of Finance; Implementation of Plan of Finance; and Ongoing Analysis of Potential Refunding Opportunities. DAVENPORT&COMPANY Friday, February 19,2016 1 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. lb. Technical Support and Analysis Responder is required to discuss and provide specific information concerning the in-house technical support, computer modeling, and financing analysis capabilities,which the Proposer will provide to Augusta. Detail the background and experience of technical staff. If technical support and analysis is to be provided by a firm other than the Proposers through a subcontracting arrangement;identify that firm,its relationship to the Proposer and its experience and resources to provide such services. Financial Analysis and Computer Modeling Davenport will offer access to a diverse range of skills and financial tools to design the most effective financial solutions to the challenges the City faces. We place a heavy emphasis on supporting each aspect of financial program design, strategic financial planning and financial management efforts with thorough analytical work. Over the years we have developed numerous proprietary software applications and analytical tools which allow us to provide our clients with a superior level of customized analysis and information. Below is a summary of some of the proprietary models and databases we utilize on a regular basis: • Debt Structuring Software - In addition to utilizing DBC Finance, the industry's leading bond sizing software, Davenport also utilize proprietary debt structuring software. While commercial software is excellent for many applications, proprietary software(i) incorporates up-to-the-minute technology and flexibility, (ii)can be customized on demand to meet the specific criteria for each assignment, and (iii)can be fully integrated with supplemental analysis and financial pro-formas to improve efficiency and minimize the possibility of human error. • Cash Management Software - Davenport's Cash Management Software is a proprietary model used to enhance public sector investment of short term operating funds. The model tracks large investment portfolios and integrates their resulting cash flows with operating inflows and outflows. As a result, clients are able to accurately project net cash positions on a forward basis and precisely match new investments with known liabilities. • SWAP/Derivative Analysis - Davenport utilizes market based yield curve data in concert with computer modeling to analyze existing SWAP contract valuations as well as provide estimated SWAP rates for various structures or proposals. • Comparative Credit Models - Davenport maintains an extensive proprietary database of financial reports covering hundreds of jurisdictions, thousands of outstanding bond issues, and a wide range of demographic data. Davenport is experienced in utilizing this information to develop comparative peer group analyses of borrowers from a credit perspective and to establish actual performance benchmarks across groups of related borrowers. • Financial Pro-Formas - As mentioned previously, Davenport has an extensive collection of customizable financial pro- formas designed for a wide range of facilities including utility systems, toll roads, prisons, airports, parking facilities and other enterprise systems. • Debt Capacity Models - These models identify key resources and summarize the sources and uses of funds in the capital program together with all of the historical and projected financial ratios that are a product of expected borrowing. These models analyze the financial plan in the context of growth of the revenue base, user base and budget growth, and other related variables. This is the F,co,,,,,,,;,,S p,e»„tt»,so„a essential financial planning tool for many cities, counties, and governmental agencies. Issue Date Call Date Maturity Dat e. • • Premium Bond / Discount Bond Structure Analysis - Davenport has created a model to test the impacts of the use of premium and discount bonds and to determine their 1111=EME111 11 ` t=a ""° viability with respect to New Money and Refunding Issues. Pres.Value•Rem=Paid M Invertor Relent Value=v alae of Can Aeno. Premium and discount bonds will impact an issue's average life, true interest cost and arbitrage yield in different ways Price paid In Investor=Par.Premium and will influence the viability of that issue's future refunding Borrower does not receive same of option if bond is callable. opportunities. To the right is a summary output we have developed on the economics of a premium bond. It is ne..nimmgtlu,P�...waspi.b.. DAVENPORT&COMPANY Friday, February 19,2016 2 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. important to analyze these scenarios on a case by case basis, as different markets help determine preferences and necessities for premium and discount bonds. • Competitive Sale NOS Terms & Conditions: Market Test Analysis - Davenport has developed a model to test the sizing parameters of a Competitive Sale for both New Money and Refunding Bonds. Upon receiving a current market estimate from our Municipal Underwriting and Trading Desk, we establish where the estimate falls within the NOS parameters and run cases that examine coupon and yield movements. Our goal is to establish what the transaction structure would look like if it was priced to the minimum bid parameter (i.e. 100% or "par") or the maximum bid parameter (i.e. 120%). Depending upon where our test bid lies with respect to the NOS parameters, we may then suggest specific revisions to the NOS and bidding parameters to help ensure that the winning bid meets the requirements of the issuer and provides the desired results, such as level debt service, level savings, targeted proceeds, etc. ■ Refunding Databases - Davenport maintains individual refunding databases for our clients that in aggregate track over 25,000 individual maturities from outstanding bond issues. Our databases are constantly being updated as we identify new issues and refunded bonds. Each maturity is analyzed weekly to determine its viability as a refunding candidate and to provide an early warning system to benefit issuers. Opportunities that would otherwise be difficult to identify, such as forward refunding transactions, multi-series refunding transactions, split coupons and irregular call provisions, are quantified and carefully examined by our Public Finance professionals. Municipal Underwriting and Trading Desk As previously mentioned Davenport operates a sales and trading desk dealing in Davenport's underwriting municipal bonds and other fixed income securities for the benefit of our clients and desk sets us apart from other customers. Due to our daily activity in the primary and secondary markets, Financial Advisory Firms and Davenport is a leading market-maker in the region in municipal bonds and is an provides us with in house active intermediary between institutional and retail investors. Our Public Finance market updates and shadow professionals work directly with our sales and trading professionals to obtain accurate pricing information for our clients with borrowing needs, gather pricing indications for the information on market trends, ensure that we take advantage of shifting investor taxable and tax-exempt preferences, and to gain insights on current investment opportunities for our markets. client's assets. This information is essential in fulfilling our fiduciary obligations to our clients when we act in the role of Financial Advisor. Legal Expertise The City will also have the benefit of Mr. James E. Sanderson, Jr. as part of the Financial Advisory Team. Mr. Sanderson practiced for six years with a national bond counsel firm prior to joining Davenport in 2004. He brings a unique background to the role of financial advisor that is not typically found in other firms. Mr. Sanderson continues to monitor the federal tax law changes and interpretations and their potential impact on our clients. The cumulative experience of Davenport's personnel, including particularly that of a former bond lawyer, will allow Davenport to work with the City's legal counsels to creatively solve tax-exempt issues to the benefit of the City. Rating Expertise Davenport benefits from the past experience of Joe Mason, Senior Vice President. Prior to joining Davenport, Mr. Mason was a Senior Director and head of Fitch Ratings' Public Finance- Eastern Region, where he was responsible for all local government tax-supported, lease, and revenue bond ratings from Maine to Florida. He was a member of the Public Finance Criteria Committee, which set criteria standards for all types of credits rated by the department. As a senior analyst, Mr. Mason chaired rating committees for state credits, including Maryland's general obligations and transportation agencies. This unparalleled knowledge and access to the ins and outs of the rating process will prove to be an invaluable asset to the City. DAVENPORT&COMPANY Friday, February 19,2016 3 RFP item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Refunding Analytical Capabilities Since 2008 Davenport has served as financial advisor on over 600 refunding transactions, totaling over $10.9 billion. Through the use of our proprietary Refunding Database software, Davenport is able to monitor in real time each of our client's debt portfolios for refunding opportunities. Refunding Databases As previously discussed, Davenport maintains individual refunding databases for our clients that in aggregate track over 25,000 individual maturities from outstanding bond issues. Through the use of the Refunding Database, we are able to determine the following: • Advance Refunding Eligibility; • Break-Even Yield -Yield Producing Target Savings; • Current Market Savings at Refunding Yield; • Market Movement that Generates Target Savings; • Current Market Savings at Escrow Yield; • Cumulative Savings and Savings Percentage; and, • Savings Percentage; • SWAP and Forward Refunding Opportunities • Positive/Negative Arbitrage in Escrow; Additional Resources The Public Finance industry today relies on automated information resources for much of the information critical to serving our financial advisory clients. Davenport frequently utilizes the resources below, which enable our professionals to better serve our client's everyday needs. • Bloomberg - Davenport utilizes Bloomberg's comprehensive fixed income database for current and historical market information on government securities, municipal bonds, continuing disclosure and marketplace calendars. The municipal finance resources that are available on Bloomberg are extensive and effectively serve as an online library for municipal issuers. Instant access to the numerous databases allows our professionals to find the most up-to-date market information on interest rates, yield trends, 30-day visible supply, and leading/lagging economic indicators, amongst other capabilities. In turn, because of the high concentration of pertinent market information readily available to our professionals, our Public Finance practice is better positioned to obtain, analyze and utilize current and historic market data in a timely manner to better meet our Financial Advisory clients' needs. • EMMA - The Electronic Municipal Market Access run by the MSRB is "the comprehensive source of official statements, continuing disclosure documents, refunding documents and real time trade price information on municipal securities." This on line data provides invaluable access to market documentation and continuing disclosure for the entire industry. Just as importantly, it also provides access to real time trade data on all municipal securities which Davenport utilizes to track the trading of client securities and credits in the marketplace before, during and subsequent to the completion of financings. • Moody's Municipal Financial Ratio Analysis - Davenport subscribes to this service which gives us access to demographic and financial information for all issuers rated by Moody's Investors Service. This information allows us to compile meaningful peer group comparatives and industry wide trends. When the data from this resource is combined with the proprietary data we maintain on issuers within our region we have access to the most comprehensive data available in the industry. • Credit and Rating Agency Research - Our professionals have access to a wide range of credit research data to provide detailed information and analysis when required related to specific credits, industry sectors, special situations, industry developments, municipal products, derivatives, investment criteria, rating criteria and peer group data. • The Bond Buyer - Considered the industry standard for news in the municipal bond markets, our finance team has access to important articles published in the daily Bond Buyer or made available on its website, which helps keep our professionals up-to-speed on the current municipal market environment. This leading publication carries information DAVENPORT&COMPANY Friday, February 19,2016 4 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. ranging from upcoming sales and market trend analysis to discussions on pending and/or newly enacted legislation, which is especially important and relevant for public issuers to be aware of and understand prior to any new debt issuance. ■ Parity Electronic Bidding - Today, almost all competitive bond offerings are carried out via commercially provided i- Deal's Parity Software system on the internet. The software effectively facilitates and streamlines the bidding process and, in doing so, helps the client to effortlessly view and award the winning bid for the sale of bonds on the date of sale. It also facilitates pre-sale verification of bidding terms and conditions and time of sale verification of the bids and their respective yields. ■ Bond Desk Electronic Order Entry- Bond Desk is a commercially provided internet based sales and order system that is used during the negotiated underwriting of publicly offered bonds. This system provides the client and the Financial Advisor real time access to the order entry system used by the senior manager in a negotiated sale. Should a negotiated bond sale be utilized, Davenport would help facilitate the use of this service. ■ DBC Finance- DBC Finance is the industry leading bond-sizing software that is available to all professionals in our Public Finance department. Given the complexity of many different financings,the software is crucial for the structure of such transactions. Our professionals have access to the software and are trained to use it on all bond-sizing projects. 1c. Innovative Solutions Responder shall provide at least one and not more than three examples of financing or financing management advice given to a client who, in the opinion of the Proposer,represents innovative problem solving initiated by the Proposer,or is otherwise of particular note. As the City's financial advisor, it is important for us to monitor the ever evolving municipal finance markets and financing practices as they change over time which includes the development of new financings mechanisms. Davenport stays knowledgeable through multiple resources which include the Municipal Securities Rulemaking Board (MSRB), the Financial Industry Regulatory Authority (FINRA), The Bond Buyer, local and national GFOA conferences, national mailing lists for local governments, bond law emailing lists and local bond counsels. Part of Davenport's job as financial advisor is to ensure the City issues debt at the lowest cost of funds. As a rule of thumb, Davenport considers all viable financing options when initial projects arise because no one method of obtaining financing is necessarily right for each locality and every project every time. Consequently, Davenport presents new financing mechanisms to local governments when applicable and provides an unbiased recommendation based upon a locality's individual needs. The following are three examples where Davenport's innovative problem solving abilities has been utilized to effectively assist our clients: Storm Water Credit Development Montgomery County. Maryland Facing ever increasing pressure to address runoff and pollution of the Chesapeake Bay, the Maryland General Assembly passed legislation in 2012 requiring the larger local governments in the state to impose a storm water fee and to use such revenue to address storm water runoff. In response to this state mandate and in order to comply with its NPDES permit, Montgomery County, a triple-MA rated jurisdiction adjacent to Washington, D.C., and the largest county by population in state, developed a $300 million program to remediate over 4,300 acres of property to the maximum extent practicable. The County was under considerable pressure to accelerate funding for storm water projects as the terms of its NPDES permit required compliance by spring 2015. As a result, the County could not wait to fund projects on a pay-as-you-go basis from current revenue, but instead, required a mechanism to advance funding and get projects started. Davenport worked with Montgomery County staff to create the very first revenue bond in the State of Maryland secured by storm water revenues. Our work on this inaugural credit involved collaborating with the County's rate consultant, DAVENPORT&COMPANY Friday, February 19,2016 5 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. CH2MHill, to develop a cash flow model to test rate sensitivities and to analyze multiple scenarios in setting up financial policy guidelines for the program and establishing legal covenants for the bonds. Davenport also worked with County bond counsel to draft and refine the master trust indenture for the program, advising on various covenants, the flow of funds, and the establishment of appropriate reserves. We researched storm water credits nationally and prepared a detailed memorandum on the pros and cons of various covenant and reserve targets in order to optimally structure this start up program to achieve the highest possible initial ratings. Once the foundational documents and parameters were in place, Davenport prepared a detailed credit presentation for the national rating agencies. The end result of this approximate six month effort was a credit structure that achieved AA credit ratings "out of the box". The 2012 Water Quality Protection Charge Revenue Bonds also included a debt service reserve fund that, as our research showed, would help to maximize the reception the bonds received in the market for this inaugural credit. Pension Obligation Bonds City of Portsmouth.Virginia The City of Portsmouth operates two closed single employer pension plans: the Portsmouth Supplemental Retirement ("PSRS")and the Portsmouth Fire and Police Retirement System ("PFPRS"). Despite the City's concerted effort to pay the full annually required contribution over the past two decades,the City's pension plans were extremely underfunded. As of July 2012, the City's PSRS and PFPRS were 28% and 32% funded respectively, well below the industry best practice of 80%to 100%. The City recognized the need to take action to improve the funding status of the plans. In the summer of 2012, Davenport was tasked by the City with developing an in-depth study of funding options for the City's PSRS and PFPRS. Davenport performed an in-depth review of the historical financial status of the plans and the historical funding practices to help serve as the basis for recommendations going forward. In consultation with an actuarial consultant, Davenport developed a series of pension funding options for the City's review and consideration. Three potential options were developed: Option 1 would change the benefit plan design; Option 2 would shorten amortization period of the unfunded liability; and Option 3 would issue approximately $170 million of Pension Obligation Bonds. Davenport presented analytically prepared actuarial/financial analysis providing the City with a clear picture of the pros/cons for each of the potential funding options. After stress testing each of the options to determine the impact on the City of a variety of critical variables including investment return outcomes, ultimately, City Staff and Davenport, determined the issuance of Pension Obligation Bonds would be the City's best option to meet their objectives. Without impacting the City's "AA" credit ratings with each of the three rating agencies, the City became the first local government in the Commonwealth of Virginia to successfully issue Pension Obligation Bonds. Through the issuance of the Pension Obligation Bonds, the City raised the funded ratio in the City's two employer sponsored public pension plans to 80%, including funding for 80% of the estimated Social Security Offset liability in the PSRS plan, securing retirement benefits for the foreseeable future for members of the two pension plans. Transportation Infrastructure Finance Innovation Act Loudoun County.Virginia Davenport, as Financial Advisor to Loudoun County (County), has been actively involved with the County as it works toward financing its 4.8%share ($273 million) of the Dulles Corridor Metrorail project currently estimated at $5.6 billion. After nearly a year of working with the United States Department of Transportation (USDOT) on February 21, 2014 Loudoun County, Fairfax County and the Metropolitan Washington Airports Authority were invited to apply for Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA) credit assistance. Loudoun's share of the loan was$195,072,507 plus deferred interest. The loan closed in December 9, 2014. The significance of the TIFIA loan to a AAA rated County is that the interest repayment will be deferred during construction. Construction for the County's share of the project is expected to be five years. The Loudoun County Board of Supervisors set up a Special Tax District around the future rail stations to collect a real estate tax of$0.20 per $100. It began collecting the tax in January of 2013. This tax is not expected to fully cover Loudoun's entire capital and operational share of the rail project. However,during the five year construction period taxes collected will be used to fund DAVENPORT&COMPANY Friday, February 19,2016 6 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. a rate stabilization fund (reserve) and amounts in excess of this fund will be used to reduce future borrowings for the County's remaining share of the project. As the Code of Virginia does not allow a locality to pledge a tax, the security for the project is an annual appropriation of the Board of Supervisors. The loan carries ratings of M or two notches off the County's MA General Obligation rating. This was the first appropriation based TIFIA loan ever closed. Davenport built the model that was presented to the Board of Supervisors in order to get their approval to submit the application. It was also used in the TIFIA application. Davenport consulted with Bond Counsel to outline the security of the TIFIA loan and future parity bonds. In addition Davenport coordinated with the rating agencies to secure the ratings needed to satisfy the TIFIA requirements. 1d. Firm Overview Address the organization of your firm,the location of offices,and how resources can be put to work for Augusta. Davenport & Company LLC Overview Davenport & Company LLC is an independent investment andLe financial advisory firm delivering services of the highest standard ederinksbast, to the communities, companies, and investors whom we serve. Chesb Charlottesville • The firm offers a highly selective blend of investment, ynchburg Rlchmo, Hires one rm ille p Williamsbu,gp asset management, investment banking and financial advisor Roanoke • orfolk services to help each client design effective solutions to its DanvilleFrank"gyp fijvirginia p suffo Beach financial challenges. Greensborop Davenport's 400+ employees provide financial services to more �leigh than 100,000 clients nationally but primarily throughout Virginia, Sanford p Maryland, The District of Columbia, North Carolina, South Carolina, °hey°'te and Georgia. Our employee ownership structure, increasingly rare o BrokerageOffice in the financial services industry, provides strong incentives to our •PubllcFinenceoffce finance professionals to place long-term performance ahead of Atlanta short-term quarter-to-quarter results. Hilton Hen. Davenport operates Public Finance offices throughout the region. Our headquarters is in Richmond, Virginia, with additional Public Finance offices in the following locations: Atlanta, Georgia, Towson, Maryland; Leesburg, Virginia; Charlotte, North Carolina; and Hilton Head, South Carolina. In addition to these offices, Davenport's Asset Management, Corporate Finance, Institutional Sales, Research, and Fixed Income departments are all located in the Richmond,VA headquarters. DAVENPORT&COMPANY Friday, February 19,2016 7 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Corporate Profile Company Name: Davenport&Company LLC Davenport Revenue Growth 140 Organized in: Commonwealth of Virginia Federal Tax ID: 54-183-5842 120 Established: 1863 100 Ownership: Employee Owned = Headquarters: Richmond,Virginia 80 Employees: 400+ 60 1111111111 Firm Assets: $85.7 Million Customer Accounts: 80,710 40 Firm Equity: $36.6 Million 20 Customer Assets: $16.9 Billion 2006 2007 2008 2009 2010 2011 2012 20132014 2015 10 years Overview of Municipal Banking, Sales and Trading Departments DAVENPORT&COMPANY SINCE 1863 Fixed Income Asset Ma nagement Equities Public Research& Research& Corporate Finance Analytics Analytics Finance Institutional Retail Institutional Sales&Trading Investments Sales&Trading Davenport has three primary business lines, each of which represents an integral part of our continued commitment to provide our clients with sound financial advice. Public Finance, which falls under the Fixed Income department, is responsible for coordinating the firm's Financial Advisory, Investment Advisory, Investment Banking, and Underwriting efforts to better serve the needs of our clients. Our streamlined organizational structure also gives us the ability to provide value-added services without the unnecessary cost of additional management. Although Public Finance activities fall under the Fixed Income department, both the head of Public Finance and the head of Fixed Income, report directly to Davenport's Chief Executive Officer. Areas of Concentration ---------------------------- -------- --- — — - - ---- --- Public Finance: 26 Professionals Fixed Income: 20 Sales,Trading and Underwriting Professionals Investments: 172 Licensed Securities Professionals Research: 11 Analysts covering 94 Companies Asset Management: 25 Professionals Managing 7,984 Accounts&$4.0 Billion Assets Corporate Finance: 7 Professionals DAVENPORT&COMPANY Friday, February 19,2016 8 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Public Finance Professionals Public Finance Department Davenport provides our clients with one of the largest groups of public Location Staff finance professionals in the area. We have 26 professionals serving clients from our public finance offices throughout the region. This group provides Richmond,VA* 18 the benefits of: Atlanta,GA 2 Charlotte,NC 2 • Depth - 24 professionals and 2 research assistants provide in-depth - — — — — account coverage, diverse expertise, and analytic support. Towson,MD* 2 • Expertise - Staff includes professionals with prior experience as Chief Leesburg,VA 1 Budget Officer, Chief Financial Officer, Credit Rating Analyst, Bond Hilton Head,SC 1 Attorney,Auditor, and Verification Agent. Total 26 • Proven Experience - Median professional finance tenure of 11 years per professional; Nearly 250 years combined experience; 20+ years *Each Location has 1 research assistant Wall St. experience. le. Accessibility Describe the logistics of your firm's accessibility to Augusta in terms of geographic location of the individuals with primary responsibility for the client relationship with Augusta and the travel time and restrictions,if any,to be on site,at Augusta. In addition,indicate how travel cost and time will be billed,i.e.,from the point of origin or as if the Proposer were situated in Augusta. Davenport would be reimbursed for out-of-pocket expenses, including meals, lodging, airfare, and mileage. For any mileage expenses, Davenport would be reimbursed at the maximum rate allowable by the Federal Government. For any airfare expenses, Davenport would prorate costs among Augusta and other clients served during any particular trip. Davenport's Atlanta office is located in the Cumberland-Galleria which is roughly a two and a half hour drive to Augusta, and there are multiple daily flights between our headquarters office in Richmond,Virginia and Atlanta. All other expenses (e.g. meals, lodging)would be billed at cost. if. Financing Strategy Responders shall describe your firm's ability to structure and price financings. Explain the processes used to determine market timing, maturity, structure,ratings,and credit enhancements. Also describe your firm's recommended refunding methodology and criteria. Ensuring that the City obtains the lowest cost financing available begins long before the day of the sale. It begins at the onset of planning for a project. Davenport's significant experience as Financial Advisor makes us particularly well suited to provide unbiased analyses of all of the available financing options, determine market timing, and structure of the issuance. Our preference is to ensure that all of the available funding options are taken into account when planning for a new financing. The most strategic Plan of Finance may take into account multiple funding sources. In today's environment, funding options available to the City include, among others: Direct Bank Loan and/or Private Placements; Competitively sold Public Sales; Negotiated Public Sales; Low interest loans through State Agencies or the Federal Government; and Grants through State Agencies and/or the Federal Government. A combination of several factors needs to be considered in evaluating the most appropriate method of bond sale. Whether the City elects to issue debt on a competitive or negotiated is often determined by credit structure, complexity of the transaction, market conditions and degree of flexibility in timing desired by the issuer. The competitive sale of DAVENPORT&COMPANY Friday, February 19,2016 9 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. securities, where underwriters compete directly against each other through a sealed bid process, is normally the preferred method of sale. This process typically ensures that competitive market forces will produce the lowest cost of funds. We generally prefer the competitive sale of securities where market forces should be adequate to ensure the receipt of at least three bids. However, in certain circumstances, a negotiated financing or a direct bank loan may be the more effective financing approach, including financings with the following characteristics: • Unconventional or Complex Financial Structures; • New Revenue Based-Credits or First Time Issuers; • Controversial or Problem Credits; and • Non-Rated or Baa/BBB Credits. Competitive Sales We will provide the City with a comprehensive range of services on a competitive sale of securities. One of the most critical and frequently overlooked tasks of the financial advisor in structuring a competitive sale of securities is to market test the terms and conditions incorporated into the notice of sale. The bid parameters of the sale should allow underwriters the flexibility to structure a bid tailored to investor demands without compromising the needs of the issuer. We run market simulation tests in advance of every competitive sale. This is to ensure that the specific terms and conditions of the offering, as incorporated in the Notice of Sale and Bid Form, will produce optimal results based on prevailing market preferences and client objectives. Our market simulation test also ensures that unusual or unexpected bid structures will not adversely affect the sale of securities. Once the sale is complete, we prepare a post-sale analysis to evaluate the results. In this analysis,we summarize the key market conditions that existed surrounding the sale. We also determine the spread between the final pricing vs.the 'AAA' MMD (the municipal market's standard yield curve) on the day of pricing. This spread is then compared to our client's historical transactions and recent comparable transactions to judge the results of our sale. The table on the following page details the advisory services for a competitive sale: [Remainder of Page Intentionally Left Blank] DAVENPORT&COMPANY Friday, February 19,2016 10 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Competitive Sale Advisory Services Service Purpose Specific Tasks As Appropriate • Review Project Cash Flow Requirements •Time Schedule Assist Staff in Management of • Determine Audit Availability Financing Process Evaluate Market Conditions • Assign Team Responsibilities • Schedule Meetings,Sale, Other Key Events • Business and Financial Covenants • Investment Covenants Bond Covenants Provide Positive Investor • Rate Covenant Reception and Operating • Additional Bonds Test (Revenue Bonds) Flexibility • Required Funds and Cash Flow Timing • Evaluate Senior Lien/Junior Lien Structure • Official Statement Disclosure Market Communications • Notice of Sale • Bid Form Enhance Market Reception and • New Issue Supply/Competing Issues Market Conditions Investor Penetration • Interest Rate Volatility • Investor Activity and Preferences • Time and Place of Bids Competitive Sale • Good Faith Check/Guaranty Mechanics • Bidding Parameters and Advertisement • Serial/Term Structure ■ MaturityDenominations Structure • Call Provisions Issue Structure ■ — — — I Select Best Proposal Mailing List • Potential Bidders • Institutional Investors • Contact/Encourage Potential Bidders Pre-Sale Marketing • Determine Need/Location For Investor Meetings • Establish Potential Agenda/Answer Questions Analyze Bids/Pricing • Evaluate Competitive Bids • Verify Pricing Calculations • Prepare Debt Service Schedule For New Issue and Post Sale Analysis Other Outstanding Issues • Summarize Market Conditions/Comparable Sales Document Results of Sale • Summarize Performance of Bidders • Prepare Analysis of Settlement Costs& Funds Flow Closing • Facilitate Documentation To Close Transaction Complete Transaction • Prepare Required Analysis For Bond Counsel Investment of Bond • Analyze myriad of investment options Proceed Efficiently Invest Proceeds • Contact bidders and distribute RFP • Verify bids and assist with closing documentation DAVENPORT&COMPANY Friday, February 19,2016 11 RFP Item #16-128 Augusta,Georgia February 19, 2016. 11:00 A.M. Negotiated Sales Although we generally prefer the competitive sale of securities, in certain circumstances a negotiated financing or private placement may be the more effective financing approach. The key services and methodology related to achieving the optimal pricing in negotiated sales are driven by three key components: Syndicate Formation and Management; Pre- Pricing Analysis and Market Research;and Pricing Negotiations and Post Sale Analysis. Syndicate Formation and Management The first step in assuring effective pricing of a negotiated sale of securities is hiring the right group of underwriters and establishing syndicate rules which will promote the maximum participation by firms in the syndicate. We assist our clients in drafting a Request for Proposals which will elicit the information required to make an informed judgment as to the qualifications of the firms seeking to underwrite the securities and help structure interviews with candidate firms to further help identify the most qualified firms. We advise our clients on the composition of the underwriting group, the syndicate, and the selling group that will maximize our ability to reach all relevant investor segments, including establishing syndicate rules that will govern the relationship among the firms underwriting the bonds. These rules, which are frequently overlooked by issuers of securities in negotiated offerings, can play a significant part in determining whether the issuer receives the benefit of aggressive pricing of its bonds. Pre-Pricing Analysis and Market Research Prior to the sale of the securities, Davenport will access all of our market research sources to determine the key factors affecting the sale of securities similar in character to our client's bonds. We will summarize all of the relevant details of the upcoming issue, as well as the results of our client's previous bond issues and the results of recent comparable transactions. This information will be compiled in a "Pre-Pricing Analysis" which will be presented to staff a few days prior to the actual sale of the bonds. Pricing Negotiations and Post-Sale Analysis The "Pre-Pricing Analysis" described above will serve as the foundation for our negotiations with the underwriters concerning the pricing and structure of the bond issue. That information will be invaluable in establishing the appropriate benchmark for the underwriters in the pricing of the bonds. At the time of the pricing negotiations, the head of our syndicate desk, Joe Paucke, will be an active member of our finance team. Joe is actively involved in buying and selling securities and new issue distribution on a daily basis. Using his knowledge and the information we have prepared, the finance team will have all of the resources necessary to ensure both a fair and aggressive pricing of the bonds. As described previously in our discussion of the competitive sale process, we also prepare a post-sale analysis in order to judge the results of our sale. The table on the following page details the advisory services for a negotiated sale. [Remainder of Page Intentionally Left Blank] DAVENPORT&COMPANY Friday,February 19,2016 12 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Negotiated Sale Advisory Services Service Purpose Specific Tasks As Appropriate • Review Project Cash Flow Requirements Assist Staff in Management of • Determine Audit Availability Time Schedule Financing Process • Evaluate Market Conditions • Assign Team Responsibilities • Schedule Meetings,Sale, Other Key Events • Business and Financial Covenants Provide Positive Investor ▪ Investment Covenants • Bond Covenants Reception and Operating Rate Covenant • Additional Bonds Test Flexibility • Required Funds and Cash Flow Timing • Evaluate Senior Lien/Junior Lien Structure • Official Statement Disclosure Market Communications • Notice of Sale • Bid Form • New Issue Supply/Competing Issues Market Conditions • Interest Rate Volatility • Investor Activity and Preferences Method of Sale • Negotiated Sale • Prepare Underwriter/ RFP Questions • Assist in Interview/Selection Process Underwriter Selection For Enhance Market Reception and Evaluate Proposals Negotiated Sales Investor Penetration • Review Proposed Syndicate Rules, Participation and Allocations/Establish Size of Management/Selling Group Issue Structure • Maturity Structure • Call Provisions Pre Sale Marketing • Determine Need/Location For Investor Meetings • Establish Potential Agenda/Answer Questions • Pre-Pricing Analysis Analyze Pricing Evaluate Proposal • Evaluate Proposed Preliminary and Final Pricing Proposal For Negotiated Sale DAVENPORT&COMPANY Friday, February 19,2016 13 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Direct Bank Loan Another viable and frequently used option for financing City projects is a Direct Bank Loan, which can be competitively bid. Direct Bank Loans typically carry terms and conditions that are more flexible than an issuance in the public marketplace. In addition, they usually offer significantly lower costs of issuance, more stream-lined legal documentation, and are less time consuming from a City staff stand-point. Finally, with a Direct Bank Loan,the City can know the interest rate,terms, conditions, and costs of issuance before making a formal decision to move forward. Refunding Methodology In our role as Financial Advisor, Davenport works with our clients to minimize the total cost associated with capital funding. An important component to this effort is identifying refinancing opportunities and analyzing the optimal timing for implementing the refinancing. Davenport's approach to evaluating refinancing opportunities is outlined through the following steps: Step 1: Modeling Existing Obligations The initial step in evaluating refunding opportunities is to understand the City's existing debt profile and future capital needs. Davenport works with our clients to document all pertinent debt information, including debt service schedules, call dates,call premiums and advanced refunding eligibility. Step 2: Identify Refinancing Opportunities Davenport uses industry standard models (e.g. DBC) to identify refunding opportunities. More importantly, however, Davenport has developed a proprietary Refunding Database to serve as an "early warning system" for identifying refunding opportunities. Through the use of the Refunding Database,we are able to determine the following: • Advance Refunding Eligibility; • Current Market Savings at Refunding Yield; Refunding Database • Current Market Savings at Escrow Yield; City staff can see at a • Savings Percentage; glance which maturities • Positive/Negative Arbitrage in Escrow; are producing savings. • Break-Even Yield - Yield Producing Target Savings; • Market Movement that Generates Target Savings; 4uKu.,ta<onn„.<:tWm/1ft kat. r)„..��QrR ,.N. ooa1111111MGMm©MECO= • Cumulative Savings and Savings Percentage; and 11/0 ,» •1°MI6 Y. �„_ ,u 6014 66nad la. 0.4 111416.1 4100., • Swap and Forward Refunding Opportunities. �",�..';^-'". = tr." •^"P'^v..,`p x+ -_iF Y n t..:p «n yy n�N n swy ^�"c. c..,`p na.y.,n s..!.nF �«n rw�. Step 3: Evaluate Refinancing Opportunities .= ,4�!:_ riW.�Y.... W.T.„._. W.�w.LL ifni•gi.. W.:r, .x mn . lIIlt vn n N After the refinancing opportunities are identified, Davenport professionals perform a detailed refinancing analysis to refine the savings analysis and analyze timing / market sensitivity 0.6.106 1.055100 4.119 cases. These analyses may include: (i) market sensitivity _ 1.6361, "n` cases that measure the impact on debt service savings fromA0614 municipal market interest rate movements (i.e. +/- 10 and 20 _ basis point movements across the yield curve); (ii)evaluating a the Efficiency Ratio, or current estimated savings compared to negative arbitrage in the refunding escrow; and (ii)for wu advance refunding with negative arbitrage, calculatingM166«15”Sari, „�;n6s, 6.6106•1 , „_«iv..� 16.161nSwig, 1'66•.6•6 11•06.61 s.... 66.61.01 6S in YR breakeven interest rates for 3-6 month increments from the (1166. 66AA 6•010. -- - DAVENPORT&COMPANY Friday, February 19,2016 14 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. earliest potential pricing through the first call date when negative arbitrage is eliminated. Our analyses give clients an in-depth perspective into the potential risks and rewards of the refunding process. As there is no hard and fast rule as to when to pursue an advance refunding, it is ultimately the City Staff and Board's decision based on rate movement tolerance levels. However, our general approach is to move forward with refundings when they meet the industry standard Net Present Value Savings at least 3% of the refunded amount. This assumes that the level of negative arbitrage, if any, is within acceptable limits. Included in our analysis is a discussion of the merits of pursuing a Competitive, Negotiated, or Bank Placement vehicle to effect the refinancing. By presenting multiple scenarios/analyses, our clients can make an informed decision on whether to move forward with a refinancing or wait until a later date. Once a decision is made to purse a refinancing, Davenport assists our clients to navigate the financing process in a way that maximizes overall flexibility for the financing. 1g. Case Study Develop a case study based on Augusta's outstanding(or projected debt) or general fiscal condition and provide a detailed analysis of a specific situation where recommended action would improve or enhance Augusta's debt management,fiscal management,or credit. Describe the situation and the basis for recommending the improvement, explain the strategy for implementing the solution and the basis for recommending the improvement,explain the strategy for implementing the solution,and discuss the benefits and/or attendant risks. Davenport has identified the outstanding Water and Sewerage Revenue Refunding Bonds,Series 2007 (the "Series 2007 Bonds") as refunding candidates for the City. The Series 2007 Bonds were originally issued for the purpose of refunding all of the City's Water and Sewerage Revenue Refunding Bonds, Series 1996A, all of the City's Water and Sewerage Revenue Refunding Bonds, Series 1997, a portion of the City's Water and Sewerage Revenue Bonds, Series 2000, and a portion of the City's Water and Sewerage Revenue Bonds, Series 2002. Due to the tax-exempt nature of the Series 2007 Bonds advanced refunding,they are not eligible for another tax-exempt advanced refunding, but are eligible for a taxable advanced refunding. Callable on October 1, 2017, the Series 2007 Bonds will be subject to a taxable refunding until 90-days before the call date when a refunding would be considered current. Taking in to account current market conditions, Davenport has run a taxable advanced refunding of the Series 2007 Bonds assuming closing on April 4, 2016 ("Scenario 1"), a taxable advanced refunding of the Series 2007 Bonds assuming closing April 4, 2017 ("Scenario 2), and a tax-exempt current refunding of the Series 2007 Bonds assuming closing on July 1, 2017 ("Scenario 3"). Due to the current volatility and unforeseen nature of market interest rates, Davenport also ran a breakeven analysis to determine how much interest rates will need to rise in order for the greater savings of Scenario 2 and Scenario 3 to equal the savings under Scenario 1. A summary of the Case Study is below and detailed cash flows for each scenario can be found in Appendix C. Summary of Bonds Refunded Summary of Refunding Results Series 2007 Scenario 1 Scenario 2 Scenario 3 Coupons 5.00% Gross Savings $10,451,699 $15,602,803 $22,388,163 Maturities 2018-2030 Net Present Value $8,328,787 $12,780,864 $19,549,090 Refunded Savings Par Refunded $123,755,000 Percent Savings 6.73% 10.33% 15.80% Call Date 10/01/2017 All-In TIC 3.06% 2.94% 2.30% Negative Arbitrage $4,444,413 $1,500,415 $554,440 Efficiency Ratio 70.16% 91.23% 97.58% Breakeven N/A 51(0.51%) 133 (1.33%) DAVENPORT&COMPANY Friday, February 19,2016 15 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. lh. Ongoing Training Describe what type and how your firm would implement availability of ongoing training and educational services that could be provided to Augusta. Please note,cost should be stated in the cost proposal only. Davenport provides annual training to its clients as requested, in the form of what we call Bond School. Sometimes the audience of the Bond School may be one client, and in some case we've had multiple clients joined together. An example of a Bond School session to selected Augusta staff might include using Augusta's financials as well as selected peer financial data for comparison purposes. To meet the educational and training needs of Augusta, Davenport would coordinate with Augusta staff to select areas of importance so that Augusta staff can get the most out of any training session. Davenport will also cover relevant market factors and trends, including changes to state and federal law and regulation. Bond School is directed towards educating the client on how the world of Municipal Bonds functions, which allows Davenport to be utilized by the client in its full capacity. j.. Overview of the Financing Process 3 Months* 2-3 Months 1 Month --<1 Monthcremouhrwved — Financing Process Overview aa.ng m. Augusta,Georgia-Bond School 117.1=111.—, su are wrvs P�rea>v�P�P.,�i M aarrmrta rAssFl� S"'d DOCRIPPVIs Rod Review RPM.. CrS.Pacbera DAVENPORT&Cannan, Dave„roar&COMPANY Role of the Financial Advisor in the Financing Process Key Decisions in the Financing Process :.. 1. Facilitate Fnancing Team Coordination and 4. Communicate Risks and Benefits 1. Construction Fnandng Should you utilize 6. Seurity:What collateral including real Scheduling - Board Meetings interim financingthrougr a bank line or a estate,guarantees,revenue streams,and - Management - Menketupdates sale of notes? reserves should you pledge to secure the - 5orrewers Counsel - Rsk Analyse debt? - Bond counsel 5. Assistin Retainingthe Most Qualified 2. Permanent Financing How much of the - outside Consultants Investments:Institutionsin Execute the Plan project should be financed with long term 7. Invesbrts:How can project funds most - underwriters&Bankers - laentify candidate Firms fixed rate debt? effectively be invested prior to use? 2. Develop the Plan of Finance - Co mpentve Selecfion Process - Credit Analysis 6. Provide Expert/thrice in fAarketAtxeasand 3. Existing Debt What is the best alternative to 8.Afirdabilitr Haw much can you afford to - Market Research Negbtiations deal with existing debt? finance? - Financial MOdeling - Financing Documents - Presentation of Alternatives - Disclosure Documents 4.Amortization:Cver what period should the 9. Capacity:How much can you finance and 3. Develop the Plan of France - underwriter Negotiations debt be amortized and how much flexibility remain within polides? — understand Business Model — Sole of Bonds do you need to accelerate retirement? — Rating Methodology — Closing Of Bonds - Develop Credit Presentation 5. EquiN:Should you invest your reserves or contribute a portion to reduce borrowing? DAVENPORT&Comruar DAvsanoxr&COMPANY DAVENPORT&COMPANY Friday, February 19,2016 16 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. 1i. Plan of Advisement Responsive firms will provide a sample"Plan of Advertisement"that will briefly describe your firm's recommendation for keeping Augusta abreast of developments in the public finance sector,options available to Augusta for managing borrowing costs,and analysis of the impact on Augusta credit worthiness. Davenport believes in constant contact with its clients. Whether it be in person, by phone or by email, we see ourselves as an extension of Augusta's finance staff and constantly want to be available. If selected we would continue our tradition of always being available and prompt with replies. Davenport works with its clients early on in the capital improvement planning process to establish a reasonable and realistic plan of advisement. The following key components each play an important role in what will ultimately become an overall Plan of Advisement for the City: Credit Assessment/ Rating Agency Strategy Davenport will work with the City to analyze the City's current Governmental and Utility credit strengths and weaknesses to identify opportunities to enhance the City's credit rating. The plan of advisement in this area will include, among other things, (i)objective assessment of the highest, realistic rating target that can be achieved, considering available rating criteria, the characteristics and profile of similar credits, and quantitative analysis of the City; (ii) identification of specific strengths and weaknesses of the City that must be addressed and resolved in the rating process; and (iii)documentation of the City's credit profile in a formal presentation that describes the credit, its financial, management and economic considerations, the contracts involved, and that provides all the quantitative analysis required to adequately support the desired rating outcome. Credit ratings are the key drivers in implementing a successful Plan of Finance. They define the universe of buyers for the obligations, the price that will be paid to obtain credit, and they heavily influence the cash flow required to support the capital program. They also determine whether the results and conclusions imbedded in the Plan of Finance will be realized. Davenport places a special emphasis on a disciplined approach to advising and assisting clients through this important process. Over the last two years, Moody's Investors Service and Standard & Poor's have revised their rating methodologies. In fact, both Moody's and Standard & Poor's Credit ratings are the key have revised both their Governmental and Utility methodologies. Under these new drivers in implementing a methodologies, the rating agencies have placed greater emphasis on quantitative successful Plan of Finance. metrics when compared to qualitative factors. This refocusing provides greater transparency to their rating process and allows us to more accurately project rating outcomes. The enhanced transparency also allows us to develop sensitivity cases based on the evolving credit of the City and any identified plans of finance. Taken as a whole, the relationships we have built over the years with the rating analysts, and the process that we follow will insure that Davenport will assist the City in achieving optimal rating agency results in each facet of the City's financing programs. Davenport would expect to work with the City to coordinate a regular surveillance process that meets the requirements of the rating agencies,the regulators, and investors. In our experience, more regular and consistent contact with the rating agencies tends to build confidence, leading to stronger ratings over time. Comprehensive Debt Capacity/ Debt Affordability and Pro-Forma Models We pride ourselves on backing up all of our work with detailed modeling and technical analysis. In order to provide this level of analysis, Davenport develops a customized proprietary financial model for each of our clients. Accordingly, Davenport will work with the City to provide a tool that will measure the City's Debt Capacity including: (i) modeling existing debt structure of the City; (ii)analyzing the impact of proposed financings on the City's Debt Affordability based on current revenue sources; (iii) minimizing rate impacts; and (iv) maintaining a healthy Debt Profile so as to help the City maintain strong credit ratings and comply with Financial Policy Guidelines. DAVENPORT&COMPANY Friday,February 19,2016 17 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Peer Group Comparative Analysis Davenport subscribes to Moody's Municipal Financial Ratio Analysis ("MFRA"), which gives us access to demographic and financial information for all issuers rated by Moody's Investors Service. This information allows us to compile meaningful peer group comparatives and industry wide trends. As part of any advisement, Davenport works with the City to provide a framework for the City to measure its Current and Projected Financial, Economic, and Demographic standing against the following, among others: Peer Georgia City Medians and Peer National City Medians; Medians for specific Rating Levels; and Other Comparative Groups, as Necessary. The result will be a written report and presentation to the City's Commission and Staff, as desired,that compares Key Financial and Demographic Metrics for the City to other Cities and Combined Enterprise Systems. Davenport will also incorporate the results of these comparative analyses into the City's Credit Rating Strategy, Development/Revision of the City's Financial Policy Guidelines, and the overall Plan of Finance. Financial Policy Guidelines Davenport will work with the City to establish/enhance the City's Financial Policy Guidelines, as appropriate. The plan of advisement in this area will include, among other things: (i) understanding the City's existing General Fund and Utility Fund Financial Policies; (ii)analyzing the Historical Trends of Key Financial Ratios related to Debt, Capital Funding, and System Reserves, among others; (iii) projecting these Key Financial Ratios into the future to provide a basis for analyzing policy limits; (iv)comparing the City's Financial Ratios to other Georgia and National Counties and Combined Enterprise Systems; (v) preparing a Presentation summarizing the findings from the above; and (vi) preparing/amending a series of Financial Policy Guidelines for the City Board to consider, as appropriate. Development of a Plan of Finance Davenport will assist the City in developing a Plan of Finance to meet the City's Capital Funding needs while enhancing Credit Ratings and minimizing any Tax Rate and/or User Fee Impact. Among other things, Davenport will utilize the Debt Capacity Model and Utility Pro-Forma to evaluate the projected impact on Key Financial Ratios, determine Debt Affordability to estimate any Tax Rate and/or User Fee Impact, and analyze the impact of different Debt Structuring and Growth Scenarios in order to provide the City a full menu of possible options. Implementation of a Plan of Finance Once a Plan of Finance is developed, Davenport will assist the City in selecting a Once of Plan of Finance is method of financing and executing the transaction in a way that results in the developed, Davenport will lowest all-in cost to the City. Davenport will work with the City to select a method of assist the City in selecting a financing and/or the financial institution(s) (i.e. lenders or underwriters) that will method of financing and best serve the needs of the City and determine a preferred amortization structure executing the transaction in a that meets the City's goals and policies while minimizing rate payer impact. Davenport will then coordinate all parties involved with transaction, create a way that results in the lowest schedule that allows the City to enter the market in a timely fashion with maximum all-in cost to the City. flexibility, provide pricing oversight and coordination, and ultimately, execute the transaction efficiently while working closely with the City and other members of the financing team to produce an optimal result. Ongoing Analysis of Potential Refunding Opportunities Davenport will routinely monitor the City's debt portfolio so as to identify potential refunding opportunities as they arise and gain a better understanding of the City's current debt position, including: Fixed Rate Debt; Interest Rate Resets; Variable Rate Bonds; and any Interest Rate Swaps. As previously discussed, we will also model the City's existing debt profile and analyze Davenport's "Refunding Database" on a regular basis to monitor certain issuances that are refunding candidates. DAVENPORT&COMPANY Friday,February 19,2016 18 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. 2. Expertise of Assigned Personnel 2a. Financial Advisory Team Responder is required to identify the qualified individual that will serve as the Lead for the Financial Advisory Team,the qualified individual(s)who will be part of the team,and any outside qualified personnel(such as subcontractors),stating the role each will perform for Augusta. Davenport proposes to provide Financial Advisor services to Augusta by using a team of proven professionals with extensive experience in all aspects of the engagement. The team we have assembled to serve this engagement has worked on a wide range of challenging and demanding assignments and will carefully allocate responsibilities within the team to provide continuity, responsiveness, and high caliber service on all assignments. We are confident the team will continue to provide the City with this caliber of service going forward. Mr. Courtney E. Rogers, Senior Vice President, will have overall responsibility for the engagement and will be the City's primary point of contact. He will be responsible for managing the engagement and will personally take the lead in policy issues, developing financial and credit strategies for the City and work with the rating agencies. Mr. Rogers will also have principal responsibility for the logistics and execution of bond issues sold on behalf of Augusta. Mr. Ricardo Cornejo., First Vice President, will be also be a day-to-day point of contact. Mr. Douglas J. Gebhardt and Mr. Gary D. LeClair, Jr.,will provide day to day technical and logistical assistance to Mr. Rogers and Mr. Cornejo, including document distribution, debt structuring analysis, bond sale calculations, and portfolio monitoring for refunding opportunities. Mr. Jamie Traudt, Senior Vice President, Mr. James Sanderson, Senior Vice President, and Mr. Robert Morrison, First Vice President, will be resources for the City and provide their insight when applicable. Resumes and Qualification Overviews for each of these individuals are provided on the following pages. Davenport believes in a team approach in order to assure proper coverage of all major engagements. By assuring that more than one individual is familiar with each aspect of the City's work, we are able to allocate project responsibility and support each other when circumstances dictate. This redundancy also enables us to meet even the most stringent demands of the City in periods of increased activity. As such, this team will be available to meet the needs of the City 24 hours a day, 7 days a week as required. Financial Advisory Team Courtney E. Rogers Ricardo Cornejo Robert L. Morrison Senior Vice President First Vice President Senior Day-to-Day Contact First Vice President Day-to-Day Contact Special Assignments James M. Traudt / Joseph W. Paucke Senior Vice President G ' O R G I A Senior Vice President Quantitative Expertise Markets&Pricing Douglas 1 Gebhardt James E. Sanderson Gary D. LeClair, Jr_ Associate Vice President Senior Vice President Analytical Support Analyst Legal Expertise Analytical Support DAVENPORT&COMPANY Friday, February 19,2016 19 RFP Item #16-1.28 Augusta,Georgia February 19, 2016, 11:00 A.M. Other Davenport Professionals • David Rose • Roland M. Kooch • A.Samuel Ketterman Co-Manager of Public Finance Senior Vice President Senior Vice President • Ted Cole • Joe Mason • B. Mitchell Brigulio,Jr. Co-Manager of Public Finance Senior Vice President First Vice President • Tina K. Neal • Kyle A. Laux • Mason M. McLean Senior Vice President First Vice President Associate Vice President • Ty Wellford • Caroline K. Heggie • Leah Schubel Vice President Associate Vice President Associate Vice President • R.T.Taylor • Chazzo Habliston • Jake Bates Associate Vice President Associate Vice President Analyst • Griffin Moore • Peter Lind Analyst Analyst 2b. Resumes Responder must provide resumes with complete job descriptions and staff qualifications of the proposed key team members that will be assigned to Augusta. [Remainder of Page Intentionally Left Blank] DAVENPORT&COMPANY Friday, February 19,2016 20 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Courtney E. Rogers DAVENPORT&COMPANY Senior Day-to-Day Contact Mr. Rogers has 26 years of municipal finance experience. Mr. Rogers specializes in local Senior Vice President government finances including the quantitative aspects of financings, cash flow analysis, multi-year financial forecasting, multi-year capital planning, debt capacity studies, rating Public Finance agency interaction, debt issuance strategies, advance refunding debt restructuring, One James Center financing alternative sensitivity analysis, tax district analysis and execution for general 901 East Cary Street,Suite 1100 government projects, economic development projects, water/sewer enterprise projects, Richmond,Virginia 23219 and, school projects. In 2008, Mr. Rogers was the author of a $35 million General Fund (804)697-2902 budget for a Virginia County who, at the time, did not have a Budget or Finance Director. crogers@investdavenport.com Other work includes executing complex new money and refunding transactions, creating Davenport 4Company LLC custom financial forecasts, creating utility rate models, structuring refunding escrows Member NYSE iFiNRaisiPC using both open market securities and SLGS, creating debt capacity models, creating cash flow models and analyzing refunding and restructuring options for multi- jurisdictional authorities. Mr. Rogers began his investment banking career with Wheat First Butcher Singer in 1992, and joined Davenport & Company in 1998. Mr. Rogers has worked with numerous localities throughout the Commonwealth. Prior to joining Wheat, he served as a Senior Consultant for Ernst &Young in Birmingham, Alabama where he performed Verification of Advance Refundings for municipal bonds and Arbitrage Rebate calculations. He recently served as co-editor for the fourth edition of the AWWA M29 Fundamentals of Water Utility Capital Financing Manual. He is a member of the Georgia GFOA, the Virginia GFOA, the Georgia Association of Water Professionals, Georgia City County Managers Association and Virginia Water and Waste Authorities Association. He is a member of the Board of Directors for Davenport&Company LLC. Education 1985-1989 University of Alabama, B.S. in Corporate Finance & Investment Management Experience 1998-Present Senior Vice President, Davenport&Company LLC, Richmond,VA 1992-1998 Vice President, Wheat First Securities, Richmond,VA 1989-1992 Senior Consultant, Ernst&Young, Birmingham,AL Licenses Held Series 7 General Securities Representative Series 52 Municipal Securities Representative Series 63 Uniformed Securities Agent State Law Examination Series 65 Uniform Investment Advisor Law Examination Series 24 General Securities Principal Selected Clients Served • Columbia County, GA • City of Lawrenceville, GA • City of Milton, GA • Columbus, GA • Cherokee County Schools, GA • City of Villa Rica, GA • City of Canton, GA • Albemarle County,VA • Loudoun County,VA • Macon-Bibb County, GA • City of Richmond Utilities,VA • City of Portsmouth,VA • Cobb-Marietta Water Auth. • James City County,VA • Spotsylvania County,VA • Loudoun Water,VA • Westmoreland County,VA • Montgomery County,VA DAVENPORT&COMPANY Friday, February 19,2016 21 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Ricardo Cornejo DAVENPORT&COMPANY Day-to-Day Contact Mr. Cornejo has 25 years of government financing experience, serving cities, counties, First Vice President school districts, and 501(c)(3)'s in the Southeast United States. He has been involved in hundreds of financings for water and sewer utilities, schools, infrastructure financing, Public Finance economic development, detention centers and solid waste. Mr. Cornejo has worked on Cumberland Riverwood debt issuance strategies, advance refunding, debt restructuring, financing alternatives, 3350 Riverwood Parkway,Suite 1900 economic development projects, and schools projects. He is a First Vice President and a Atlanta,Georgia 30339 member of the Georgia GFOA. b (678)637-8114 rcornejo@investdavenport.com Davenport&Company LLC Member NYSE!FINRAISIPC Education 1978-1982 University of Maryland, B.A. in Economics 1984-1989 Clemson University, M.A. in Economics Experience - - -- — — --- 2015-Present First Vice President, Davenport&Company LLC, Richmond,VA 2009-2015 Vice President, Regions Bank, GA 2004-2009 Vice President, Royal Bank of Canada, GA Licenses Held Series 52 Municipal Securities Representative Selected Clients Served* • City of East Point, GA • Paulding County, GA • Paulding County SD, GA • Henry County Water Authority, GA • Banks County, GA • Chatham County, GA • City of Gainesville Schools, GA • Jefferson City Schools, GA • Atlanta College Football HOF • Columbia County School District, GA • City of Carrolton, GA • City of Duluth, GA *Note: Prior to joining Davenport. DAVENPORT&COMPANY Friday,February 19,2016 22 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Robert L. Morrison DAVENPORT&COMPANY Special Assignments Mr. Morrison has spent his entire business career as a specialist in tax-exempt capital First Vice President funding transactions for governmental and 501(c)(3) not-for-profit borrowers. Mr. Morrison has been active in devising and implementing cost effective financing strategies Public Finance for clients, utilizing the latest financing techniques and innovations. Mr. Morrison has nearly 50 years of experience in advising Municipalities on the issuance of debt and has 128 Myrtle Road Woodstock,Georgia 30189 completed approximately$10 billion of financings in his career. o (678)445-9495 Education rmorrison@investdavenport.com — University of North Carolina at Chapel Hill Davenport&company LLC (B.S. in Business Administration) Member NYSE IFINRAISIPC Emory University - Atlanta, Georgia (M.B.A.) Licenses Held Series 52 Municipal Securities Representative James M. Traudt DAVENPORT&COMPANY Quantitative Expertise James M. Traudt has served as Financial Advisor to public sector clients throughout the Senior Vice President United States for more than 30 years. He is highly experienced in financing complex enterprises including state revolving funds, pool financings, toll roads, transportation Davenport Public Finance systems, water, sewer, electric and solid waste systems, convention centers, 19 Parkwood Drive universities, and museums, in the development of rating strategies for first time Hilton Head Island,South Carolina borrowers, restructuring strategies, and the design of workout plans for troubled credits. 29926 He is a Senior Vice President and a member of the Board of Directors of Davenport & a^ (804)697-2904 Company LLC. jtraudt@investdavenport.com Education Davenport&Company LLC Member NYSE]FlvRAislPc 1968-1971 University of Nebraska Experience 1998-2014 Manager of Public Finance, Davenport&Company LLC 1995-1998 President,Summation Management Group, Richmond,VA 1989-1995 Managing Director, Wheat First Securities, Richmond,VA 1984-1989 Senior Vice President, Dillon, Read &Co., New York, NY 1979-1980 Manager of Finance, Northern California Power Agency DAVENPORT&COMPANY Friday, February 19,2016 23 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. James E. Sanderson DAVENPORT&COMPANY Legal Expertise James E. Sanderson Jr. has worked in public finance for 15 years on financings in the Senior Vice President public and private capital markets. He practiced as bond lawyer for Hunton & Williams in Richmond, Virginia from 1998 to 2004 where he provided advice on state legal Public Finance issues and federal tax and securities laws throughout the eastern United States. He One James Center was trained in public finance transactions, primarily as bond counsel, tax counsel, 901 East Cary Street,Suitelloo arbitrage, securities law and general corporate matters with particular experience in Richmond,Virginia 23219 swaps and derivatives, indenture covenants, and permissible amendments and ^a (804)697-2912 restructurings. His practice focused on complex revenue structures including public- jsanderson@investdavenport.com private infrastructure development and capital finance with substantial experience in structuring and issuing debt of all types for a broad range of public and private Davenport&Company LLC infrastructure projects, including airports, roads and highways, convention and Member NYSE IFINRAISIPC conference centers, educational facilities, government administrative facilities and water and wastewater facilities. Mr. Sanderson joined the public finance practice of Davenport in 2004 where his in depth knowledge of federal tax law and other legal aspects has provided a distinct advantage to our clients in structuring transactions, negotiating terms and covenants and bringing transactions to a successful closing. He has provided services to a broad range of clients at Davenport, in particular transactions that present complex structures or issues. Mr.Sanderson holds a B.S. in Architecture from the University of Virginia and a J.D.from the T.0 Williams School of Law at the University of Richmond. Licenses Held Series 7 General Securities Representative Series 66 Uniform Securities Agent Series 53 Municipal Securities Principal Education 1989-1993 University of Virginia 1995-1998 University of Richmond Experience 2004-Present Senior Vice President, Davenport&Company LLC 1998-2004 Attorney, Hunton &Williams Selected Clients Served • State of North Carolina • Isle of Wight • Upper Occoquan Sewage Auth. • City of Alexandria • Richmond Metropolitan Authority • Prince William Co.Service Auth. • National Public Radio • Virginia Museum of Fine Arts • City of Suffolk • Appomattox County • City of Williamsburg • Spotsylvania County DAVENPORT&COMPANY Friday,February 19,2016 24 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Douglas J. Gebhardt DAVENPORT&COMPANY Analytical Support Mr. Douglas J. Gebhardt joined Davenport Public Finance in June 2012 and has since worked with Mr. Rogers on numerous client engagements. Mr. Gebhardt performs a Associate Vice President variety of tasks including custom financial pro forma modeling, conducting capital Public Finance funding and debt capacity analysis, performing investment portfolio analysis, creating One James Center comparative ratio analysis, and experienced in analyzing complex new money, 901 East Cary Street,Suite 1100 refunding, and restructuring bond sizing using DBC. Mr. Gebhardt is a registered Richmond,Virginia 23219 representative with Series 7, 52 and 66 licenses. 6 (804)698-2651 dgebhardt@investdavenport.com Davenport&Company LLC Member NYSE FINRA]SIPC Licenses Held Series 7 General Securities Representative Series 52 Municipal Securities Representative Series 66 Uniform Securities Agent Education 2008-2012 Amherst College Experience 2012-Present Associate Vice President, Davenport&Company LLC Selected Clients Served • Columbia County, GA • City of Lawrenceville, GA • City of Milton, GA • Catoosa County Schools, GA • Cherokee County Schools, GA • City of Villa Rica, GA • City of Canton, GA • Macon-Bibb County,GA • Columbus, GA • Montgomery County,VA • Albemarle County,VA • City of Richmond, VA DAVENPORT&COMPANY Friday, February 19,2016 25 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. 2c. Experience Responder must provide a description of Responder's experience, capabilities and other qualifications for this project that evidences Responder's ability to successfully complete the project. Clearly identify experience within the State of Georgia. In addition, identify those individuals who would be responsible for subject specific work listed below in(d). Davenport provides financial advisory services to a diverse group of more than 400 public sector clients including cities, counties, utility systems,state governments, public authorities,transportation facilities, universities, museums, and other agencies responsible for public or not-for-profit activities. Since 1998, the Public Finance department has provided financial advisory services on over 2,100 municipal transactions aggregating over$47.1 billion in total volume. We assist our clients with strategic financial planning, debt management analysis, economic development strategies, project development for both revenue and tax supported ventures, credit ratings, peer group comparisons, credit enhancement, evaluation of new financing techniques, and arranging public offerings and bank placements of securities. We provide clients with portfolio surveillance, derivative evaluation, cash flow forecasting, investment advice, assisting with investment strategy development, and other financial products. In addition, we assist clients with management of operating funds, reserve funds and the proceeds of bond issues. Top Financial Advisor in the Region Davenport has consistently ranked as the top financial advisor in the region, based on the number of publically-issued transactions, according to the leading national database for the financial services industry maintained by Thomson Financial. The following table identifies the top ten financial advisors in North Carolina,Virginia, Maryland, South Carolina and Georgia since 2010. Financial Advisor Transactions Maryland, Virginia, North Carolina, South Carolina, Georgia Rank Company 2010 2011 2012 2013 2014 2015 Total 2 Public Financial Management Inc 56 53 81 54 55 72 371 3 Public Resources Advisory Group 21 29 35 18 25 22 150 4 FirstSouthwest 15 14 12 18 15 21 95 5 DEC Associates Inc 16 13 16 15 13 19 92 6 Southwest Securities 34 25 29 - 88 7 Strategic Solutions Center 10 10 13 11 14 14 72 8 Compass Municipal Advisors LLC - - - 57 57 9 Public Advisory Consultants 7 7 9 12 9 11 55 10 First Tryon Securities LLC - 3 6 2 13 27 51 Source:Thomson Reuters Note:Does not include direct bank loan transactions. DAVENPORT&COMPANY Friday,February 19,2016 26 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Davenport has also placed third over the last five years when ranking the dollar volume of publically-issued transactions in the region. Financial Advisor Volume (in $ Millions) Maryland, Virginia, North Carolina, South Carolina, Georgia Rank Company 2010 2011 2012 2013 2014 2015 Total 1 Public Financial Management Inc 3,202 6,105 7,522 5,501 7,048 7,383 36,762 2 Public Resources Advisory Group 1,089 4,330 4,013 2,238 2,977 2,711 17,357 I 1111111 4 FirstSouthwest 1,508 2,074 1,138 2,053 1,057 2,065 9,895 5 Ponder&Co 1,408 175 1,551 337 761 654 4,886 6 DEC Associates Inc 569 547 647 961 665 1,230 4,619 7 Public Advisory Consultants 315 656 443 1,115 820 851 4,200 8 Kaufman Hall&Associates Inc 1,076 259 1,216 351 355 342 3,599 9 Strategic Solutions Center 205 198 801 598 472 1,074 3,347 10 Southwest Securities - - 668 588 819 - 2,075 Source:Thomson Reuters Note:Does not include direct bank loan transactions. Top Financial Advisor Nationally Davenport has also consistently ranked in the top ten financial advisors nationally for competitive issues over the last five years. Davenport is the only regional firm based on the East Coast to achieve this accomplishment. Top Financial Advisors: Full Year 2015 Nationwide: All Competitive Issues - - --- Davenport's Historical National Rankings =Rank company MIMMEIFinancial Advisors: All Competitive Deals 1 Public Financial Management Inc 14,965.8 _ 2 Public Resources Advisory Group 12,449.5 Volume 3 First Southwest Co. 5,865.2 Year Rank (in $ Millions) 4 Piper Jaffray&Co 4,632.9 2010 10 1,428 5 Ehlers&Associates 2,577.8 .....2011 11 1,013 6 Springsted Incorporated 2,514.9 - 7 Davenport& Company LLC 2,514.0 2012 10 1,267___ 8 Zions First National Bank 2,088.9 2013 5 1,986 9 Montague DeRose&Associates LLC 1,687.9 2014 5 3,213 10 Acacia Financial Group Inc. 1,643.9 2015 7 2,514 Source:Thomson Financial Source: Thomson Reuter's "AT7c"League Table DAVENPORT&COMPANY Friday, February 19,2016 27 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. 2d. Georgia Financial Advisory Experience Briefly discuss relevant experience of the Proposer and the experience of the specific persons who would be assigned to work with Augusta based on their financial advisory experience in Georgia. Also provide evidence of specific experience related to public finance projects including but not limited to local government borrowing,economic development or redevelopment projects,and strategic financial advising. In tabular form,provide a listing aggregated by type of security,e.g.bonds(new money and refunding),COPs,bank loans,community and special assessment districts,etc., enumerating the aggregate dollar amount and number of each type of tax exempt and taxable security issued by Georgia state and local governmental issues for which the proposer has acted as a financial advisor since January 1,2010. Clearly distinguish for each security types the dollar amount and number of transactions which were competitive and negotiated.In Particular,discuss relevant experience with economic development financing and public private partnerships. Finally,identify defaulted issues for which the Proposer has acted as financial advisor,and provide an explanation of such default. Over the next two pages Davenport has outlined Courtney Rogers' Financial Advisory Experience in Georgia and outside of Georgia. He has not been involved in any defaulted issues. Economic Development financings include the aforementioned TAD bonds with Macon Bibb as well as numerous issues where infrastructure was financed either in anticipation of or because of economic development projects. A detailed list of Courtney Rogers' Financial Advisory Experience in Georgia since January 1, 2010 can be found at the end of this response in Appendix A. Georgia Experience by Security since January 1, 2010 Tax-Exempt Tax-Exempt Taxable Taxable Par Amount Number of Par Amount Number of ($ in millions) Transactions ($ in millions) Transactions New Money $250.767 14 $0 0 Refunding $374.681 10 $34.625 5 Total $625,448 24 $34,625 5 Tax-Exempt Tax-Exempt Taxable Taxable Par Amount Number of Par Amount Number of ($ in millions) Transactions ($ in millions) Transactions General Obligation $159.890 3 $0 0 Bonds Revenue* 338.701 12 34.625 5 Other(i.e.TANs, 126.857 9 0 0 RANs, TADs, etc.) Total $625,448 24 $34,625 5 *Note: Includes Revenue Bonds secured by an intergovernmental contract. Georgia Experience by Sale Type since January 1, 2010 Tax-Exempt Tax-Exempt Taxable Taxable Par Amount Number of Par Amount Number of ($ in millions) Transactions ($ in millions) Transactions Competitive Sale $64.525 3 $0 0 Negotiated Sale 342.120 9 26.195 2 Direct Bank Loan 218.803 12 8.430 3 Total $625,448 24 $34,625 5 DAVENPORT&COMPANY Friday, February 19,2016 28 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. In September 2011 Davenport acquired the business of Government Funding Advisory Associates ("GFAA"), an SEC and MSRB registered municipal financial advisory firm owned by Mr. Robert Morrison. GFAA operated primarily in the Georgia and South Carolina marketplace for a 25-year period as an independent municipal financial advisor to state and local governments and 501(c) 3 not-for-profit organizations. During this period, Mr. Morrison was advisor for over $3.5 billion in long-term capital project financings, the majority of which were in Georgia. Prior to forming GFAA, Mr. Morrison was an investment banker based in Atlanta specializing in tax-exempt transactions primarily in Georgia, but also including issuers in Alabama, Florida, North and South Carolina,Tennessee and Virginia. 2e. Non-Georgia Financial Advisory Experience Provide the same information as requested in(d)above,in the same format,for advisory work performed outside the State of Georgia. Since 2010, Davenport has been involved in 1,183 transactions totaling more than $25.1 billion in par value. Specifically, Courtney Rogers has been involved in 133 transactions totaling more than 3.1 billion in par value. A detailed list of Courtney Rogers' Financial Advisory Experience outside of Georgia since January 1, 2010 can be found at the end of this response in Appendix B. Non-Georgia Experience by Security since January 1, 2010 Tax-Exempt Tax-Exempt Taxable Taxable Par Amount Number of Par Amount Number of ($ in millions) Transactions ($ in millions) Transactions New Money $1,291.606 55 $238.292 15 Refunding 1,496.337 58 92.144 5 Total $2,787.943 113 $330,436 20 Tax-Exempt Tax-Exempt Taxable Taxable Par Amount Number of Par Amount Number of ($ in millions) Transactions ($ in millions) Transactions General Obligation --- $1,382.581 48 Bonds $223.155 12 Revenue* 1,365.677 56 82.551 7 Other(i.e.TANs, 39.685 8 24.730 1 RANs,TADs, etc.) Total $2,787.943 113 $330,436 20 *Note: Includes Revenue Bonds secured by an intergovernmental contract. Non-Georgia Experience by Sale Type since January 1, 2010 Tax-Exempt Tax-Exempt Taxable Taxable Par Amount Number of Par Amount Number of ($ in millions) Transactions ($ in millions) Transactions Competitive Sale $1,728.200 46 $81.535 7 Negotiated Sale 779.415 20 227.555 10 Direct Bank Loan 280,328 47 21.346 3 Total $2,787.943 113 $330,436 20 DAVENPORT&COMPANY Friday, February 19,2016 29 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. 2f. Understanding Augusta's Financial Plan Demonstrate the advisor's knowledge of local political,economic,legal,or other issues that may affect Augusta's financial plan. Davenport is very pleased to have acted as Financial Advisor for Augusta's neighbour, Columbia County last summer. During our work pulling together the presentation to be made in New York to the rating agencies in person,we learned a lot about not only the County but the Augusta area as well. We all know that golf is important to the area but what really drives the economy is the areas of health care, education,governmental and manufacturing. The new cyber-command jobs at Fort Gordon will bring an influx of new high paying jobs to the area. Driving through Augusta one can see how important the Georgia Regents University and the hospital is to the health of the downtown area. Also,the 2015 Transportation Funding Act,though not a popular decision, has a projection for Richmond and Columbia counties to receive$450 million for transportation and infrastructure projects.The Augusta region was just one of three regions in the state that prepared for future transportation needs through special taxes. Also the 2016 legislative session may affect the City via a sweeping change for the school funding formula and the fight by the hotel lobby to eliminate the$5 hotel tax that was part of HB170 (Transportation Funding Act). With the help of the expiring SPLOST 6 and the recently approved SPLOST 7 Augusta has been able to keep its debt burden low. Continuing to keep the Water&Sewer and other Enterprise Funds self-supporting will be key to Augusta's financial health. Most importantly following through with the plan to bolster reserves such as the risk management reserve will be key to continuing in good financial standing. Davenport looks forward to learning more about the interworking of Augusta's financings. 2g. Analytical Capability Describe the analytic capability of the Advisor and assigned individuals to Augusta's program. Davenport places a heavy emphasis on supporting each aspect of financial program design, strategic financial planning and financial management efforts with thorough analytical work. As discussed above in response to 1b, over the years we have developed numerous proprietary software applications and analytical tools which allow us to provide our clients with a superior level of customized analysis and information. Since we approach service to our clients as a team approach, the City can count on always having capable and effective analytical support for its efforts. In addition, Mr. Jamie Traudt, available to assist the City in this engagement, is a highly accomplished financial analyst and programmer, having written sophisticated financial software, database and spreadsheet applications to solve many of the most challenging financial problems faced in the industry including the sizing and refunding of complex bond issues, call option analysis, transferred proceeds, and portfolio analysis for a wide range of clients including states, state revolving funds and other large cities, counties and enterprises. (Remainder of Page Intentionally Left Blank] DAVENPORT&COMPANY Friday,February 19,2016 30 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. 3. Firm References and Capacity to Serve 3a. Financial Statements Responder must provide a financial statement for the last three(3)years that evidences that the responder has the financial capacity to perform the scope of work. Davenport's financial statements for the last three years are included at the end of this response in Appendix D. 3b. Firm Capital Prepare tabulation presentations for the following as of the date when such information is most recently available. Total Capital and Equity Capital(if available) Longevity as a municipal financial advisor Number of employees and number of whom is professional staff Description of ownership structure and business dealings of parent companies,if any. As of December 31, 2015 Davenport's Equity (Net) Capital was $25,586,556. Of this amount $23,729,258 represents Excess Net Capital. Davenport does not allocate its Excess Net Capital between primary market underwriting and secondary trading of municipal securities. Based on the amount of Excess Net Capital, Davenport could underwrite approximately$300,000,000 of investment grade municipal bonds. Amount Total Capital $39,748,848 Equity Capital $39,748,848 Net Capital $25,586,556 Uncommitted (Excess Net)Capital $23,729,258 As of Date 12/31/2015 Davenport has been advising local governments since the Public Finance Department joined in 1998. Davenport currently employs over 400 persons with approximately 260 whom are professional staff. As previously stated, Davenport is 100% employee owned and does not have any business dealing with parent companies. 3c. References Provide three (3) references from three prior or existing financial advisory engagements with governmental bodies, which are comparable with Augusta (i.e., population base, operating and capital budget, debt outstanding, credit rating, and a similar political and geographic environment) specified herein using the Reference and Release Form(Responder)attached hereto as Attachment C. The following are select financial advisory relationships with a brief description of the work performed including the dollar amount of bond issues and other financings. Davenport is willing to provide additional client references to the County upon further request. DAVENPORT&COMPANY Friday,February 19,2016 31 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Columbia County, Georgia Advisers Assigned: Courtney Rogers/ Doug Gebhardt COLUMBIA COUNTY Columbia County, Georgia is located northeast of Atlanta and borders -"`"RGf Augusta to the west with approximately 135,416 residents and a budget Credit Rating of$63 million of General Fund Revenues. Aa1/AA+/AAA Reference Contact Nature of Services Scott Johnson Davenport& Company served as Financial Advisor to Columbus County in County Administrator connection with its General Obligation Sales Tax Bonds, Series 2015. These bonds were issued via a negotiated sale on July 7, 2015, the Leanne Reece Bonds were sold for the purpose of providing funds to pay for the Finance Director construction of various capital projects. Davenport constructed the County's credit presentation and led the meetings with the rating Contact Information agencies in New York. Jeffries served as Senior Manager, selling the sjohnson@columbiacountyga.gov bonds at an all-in-cost of 2.16%with an average life of 5.3 years. (706) 868-3423 Ireece@columbiacountvga.gov (706) 868-3347 Key Transactions Issue Size(USD) Method of Sale Date of Sale General Obligation Sales Tax Bonds,Series 2015 $15,000,000 Negotiated July 2015 Total $15,000,000 DAVENPORT&COMPANY Friday, February 19,2016 32 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. s 0.a=a'isscto Macon-Bibb County, Georgia _ A T iiAdvisers Assigned: Courtney Rogers, David Rose, & Doug r� � Gebhardt 4,-------- -•no,. Macon-Bibb County, Georgia is strategically located in Central Georgia along Interstate 75 with approximately 156,000 residents and a budget Credit Rating of $72 million of General Fund Revenues. In 2014 Davenport assisted Aa2/AA/AA Macon-Bibb County with its initial consolidated 'AA' ratings from two credit rating agencies. In late 2014 Davenport assisted in closing on Tax Reference Contact Allocation District Bonds. Dale M. Walker County Manager Nature of Services Christy luliucci Davenport & Company served as Financial Advisor to the Macon-Bibb Finance Director Consolidation Task Force in their preparation for consolidation, which took place on January 1, 2014. Working closely with both the City and Contact Information County, Davenport's work included a detailed Y p "peer comparison" DWalker@maconbibb.us analysis of both entities, as well as the projected Consolidated Entity. Davenport worked closely with the Middle Georgia Regional Commission (478) 751-7244 and the Carl Vinson Institute of Government to prepare the consolidated Cluliuci@maconbibb.us entity's financial policies as well as the long term credit rating strategy. Davenport now serves as Financial Advisor to the consolidated (478) 803-0489 government and completed the issuance of the government's first tax allocation district revenue bonds to finance redevelopment within the County as well as the issuance of Industrial Authority and Urban Development Authority Revenue Bonds. Recent Transaction(s) Issue Size(USD) Method of Sale Date of Sale Urban Development Authority Taxable Revenue Bonds Series $4,430,431 Private Placement January 2016 2016A Urban Development Authority Taxable Revenue Bonds Series 2,000,000 Private Placement January 2016 2016B Urban Development Authority Taxable Revenue Bonds Series 2,000,000 Private Placement January 2016 2016c Industrial Authority Revenue Refunding Bonds, 8,250,000 Negotiated May 2015 Series 2015 Urban Development Authority Revenue and Refunding Bonds, 18,430,000 Negotiated May 2015 Series 2015 A& B Tax Allocation Bond (Second Street TAD-2 Projects),Series 3,000,000 Direct Bank Loan December 2014 2014 Tax Allocation Bond (Bibb Mill Center TAD-4 Projects),Series 250,000 Direct Bank Loan December 2014 2014 Tax Allocation Bond (Renaissance TAD-3 Projects),Series 50,000 Direct Bank Loan December 2014 2014 Total $38,410,431 DAVENPORT&COMPANY Friday, February 19,2016 33 RFP Item #16-128 Augusta,Georgia February 19. 2016, 11:00 A.M. City of Lawrenceville, Georgia Advisers Assigned: Courtney Rogers/ Doug Gebhardt ' The City of Lawrenceville, Georgia is the county seat of Gwinnett County ' `""` and is located northeast of Atlanta with approximately 30,816 residents Credit Rating and a budget of $11 million of General Fund Revenues. The City owns and operates electric, gas, and water systems and utilizes interfund Aa3/AA- transfers from its Gas Fund and Electric Fund to it General Fund for the Reference Contact purpose of financing the operations of the City and to reimburse the General Fund for Expenses accounted for in the General Fund that are Bob Baroni allocable to such funds. City Manager Steve North Nature of Services Assistant City Manager Davenport & Company served as Financial Advisor to the City of Contact Information Lawrenceville in connection with special limited obligation Revenue bob.baroni@lawrencevillegaweb.org Bonds, Series 2015. These bonds were issued via a negotiated sale on August 27, 2015, the Bonds were sold for the purpose of providing funds (678) 407-6577 to pay for construction and improvements to the City's Gas System and constructing and installing a new public works facility and a new parkway. steve.north@lawrencevillegaweb.org Davenport constructed the City's credit presentation and led the meetings (678) 407-6393 with the rating agencies in New York, assisting the City in attaining its first ever credit rating. Raymond James served as Senior Manager, selling the bonds at an all-in-cost of 3.47%with an average life of 11.24 years. Key Transactions Issue Size(USD) Method of Sale Date of Sale Revenue Bonds,Series 2015 $56,740,000 Negotiated August 2015 Total $56,740,000 DAVENPORT&COMPANY Friday, February 19,2016 34 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. 3d. Subcontractors - - -------- --- -------------------- Responder shall identify all proposed subcontractors that will be performing work under the proposed contract,using the subcontractor information form which will be supplied in the addendum. Davenport does not anticipate utilizing any subcontractors, vendors, partners, or consultants for this engagement. 3e. Litigation Responder must list any recent(in the last three(3)years)or pending business related litigation, including the outcome of such litigation. Identify fully the extent to which the Proposer or any of its individual partners or employees are the subject of any ongoing securities investigation(including investigations undertake by the SEC,state blue-sky commissions,the U.S. Department of Justice and the Internal Revenue Service pursuant to IRC Section 6700) , are a pity to any securities litigation or arbitration, or are the subject of a subpoena in connection with a municipal securities investigation, including any investigations which concluded in a enforcement or disciplinary action order or imposed in the last three years and a description of those actions. Also,indicate where the Proposer has ever filed for bankruptcy and describe the circumstances. To the best of our knowledge, Davenport has been, and continues to be, in compliance with all applicable provisions of the Securities and Exchange Commission ("SEC"), Financial Industry Regulatory Authority ("FINRA"), and Municipal Securities Rulemaking ("MSRB") rules, as well as all other applicable regulatory agency rules. As with any financial services company in the highly-regulated securities industry, at any given time Davenport may be subject to litigation, regulatory inquires or investigations, or other proceedings that are an ordinary part of the securities business. Davenport makes all required disclosures of regulatory and legal matters as required by federal law and applicable regulation in its Form BD and ADV Filings with FINRA and the SEC. Those filings are publicly available on FINRA's website and the SEC's website. The FINRA website can be accessed at www.finra.org/Investors/ToolsCalculators/BrokerCheck. The SEC website can be accessed at www.adviserinfo.sec.gov. Davenport was a party to a lawsuit filed by Fluvanna County,Virginia in 2011. The lawsuit was subsequently withdrawn in 2014 with the Board of Supervisors of Fluvanna County issuing a public apology to Davenport. 3f. Broker Dealer Relationships Disclosure of any affiliation or relationship with any broker dealer. Davenport is a broker-dealer and registered as a municipal advisor with the Municipal Securities Rulemaking Board and the Securities and Exchange Commission. Our SEC registration number is 86-00106-00 and our MSRB Registration number is A0364. 3g. Finder's Fees Disclosure of any finder's fees,fee splitting, payments to consultants, or other contractual arrangements of the firm that could present a real or perceived conflict of interest. Davenport does not anticipate working with outside consultants or engaging in other contractual engagements. DAVENPORT&COMPANY Friday,February 19,2016 35 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Appendices A. Georgia Financial Advisory Experience Date Amount Name Security Sale Type 1/26/2016 4,430,431 Macon-Bibb County UDA Rev Private Placement 1/26/2016 2,000,000 Macon-Bibb County UDA Rev Private Placement 1/26/2016 2,000,000 Macon-Bibb County UDA Rev Private Placement 10/9/2015 44,215,000 Douglasville-Douglas W&S Authority Rev Private Placement 10/9/2015 29,205,000 Douglasville-Douglas W&S Authority Rev Private Placement 8/20/2015 56,740,000 Lawrenceville, City of GO Negotiated 8/20/2015 20,002,500 Cherokee County School System Rev Direct Bank Loan 7/7/2015 15,000,000 Columbia County GO Negotiated 6/12/2015 47,315,000 Cobb County-Marietta Water Authority Rev Negotiated 5/5/2015 8,250,000 Macon-Bibb County IA GO Negotiated 4/30/2015 6,240,000 Macon-Bibb County UDA GO Negotiated 4/30/2015 12,190,000 Macon-Bibb County UDA GO Negotiated 2/5/2015 108,960,000 Cherokee County School System GO Negotiated 1/15/2015 33,860,000 Villa Rica, City of GO Negotiated 12/23/2014 3,000,000 Macon-Bibb County Rev Direct Bank Loan 12/23/2014 250,000 Macon-Bibb County Rev Direct Bank Loan 12/23/2014 50,000 Macon-Bibb County Rev Direct Bank Loan 11/20/2014 10,000,000 Milton, City of Rev Direct Bank Loan 10/23/2014 14,651,000 Canton, City of Rev Direct Bank Loan 9/4/2014 5,220,000 Canton, City of GO Direct Bank Loan 8/22/2014 21,000,000 Cherokee County School System GO Direct Bank Loan 12/18/2013 53,180,000 Douglasville-Douglas W&S Authority Rev Direct Bank Loan 8/23/2013 18,030,000 Cherokee County School System GO Direct Bank Loan 2/13/2013 31,445,000 Columbus Hospital Authority Rev Competitive 11/1/2012 35,930,000 Cherokee County School System GO Negotiated DAVENPORT&COMPANY Friday, February 19,2016 36 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Date Amount Name Security Sale Type 10/5/2012 29,825,000 Columbus Building Authority Rev Negotiated 10/5/2012 14,005,000 Columbus Building Authority Rev Negotiated 8/23/2012 16,080,000 Cherokee County School System GO Competitive 11/9/2011 17,000.000 Cherokee County School System GO Competitive B. Non-Georgia Financial Advisory Experience Date Amount Name State Security Sale Type 1/13/2016 32,835,000 Montgomery County, VA VA Rev Competitive 12/22/2015 5,328,275 Caroline County,VA VA Rev Direct Bank Loan 850,000 Virginia Tech Montgomery Regional Airport VA Rev Direct Bank Loan 10/30/2015 Authority 1,500,000 Virginia Tech Montgomery Regional Airport VA Rev Direct Bank Loan 10/30/2015 Authority 10/27/2015 75,390,000 Loudoun County VA Rev Competitive 10/21/2015 4,350,000 Accomack County VA Rev Direct Bank Loan 10/14/2015 9,489,053 Montgomery County VA Rev Direct Bank Loan 10/1/2015 3,443,000 Pulaski County VA Rev Direct Bank Loan 9/15/2015 38,880,000 Albemarle County,Virginia VA Rev Competitive 8/5/2015 117,235,000 Loudoun Water VA Rev Competitive 7/29/2015 55,325,000 Spotsylvania County VA Rev Competitive 7/28/2015 45,535,000 Spotsylvania County VA GO Competitive 7/22/2015 49,815,000 James City County EDA VA Rev Competitive 7/21/2015 11,280,000 James City County VA GO Competitive 7/21/2015 3,820,000 James City County VA GO Competitive 6/9/2015 69,895,000 Loudoun County VA GO Competitive 4/28/2015 9,630,000 Albemarle County EDA VA Rev Direct Bank Loan DAVENPORT&COMPANY 37 Friday, February 19,2016 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Date Amount Name State Security Sale Type VA GO Direct Bank Loan 18,813,000 Salem, City of 4/22/2015 VA GO Competitive 46,975,000 Leesburg,Town of 3/25/2015 VA GO Direct Bank Loan 13,425,000 Lynchburg, City of 3/12/2015 VA Rev Direct Bank Loan 11,572,000 Montgomery County EDA 2/26/2015 2/18/2015 15,170,000 Blacksburg,Town of VA GO Competitive 2/5/2015 30,985,000 Loudoun County EDA VA Rev Negotiated VA GO Competitive 47,375,000 Loudoun County,VA 11/13/2014 8/14/2014 32,750,000 Spotsylvania County EDA VA Rev Competitive 8/13/2014 59,065,000 Spotsylvania County VA GO Competitive VA Rev Competitive 49,745,000 Culpeper Couny EDA 8/5/2014 8/5/2014 683,733 Pulaski,Town of va GO Direct Bank Loan 7/24/2014 12,575,000 James City County EDA,VA VA Rev Competitive 7/23/2014 21,610,000 James City County,VA VA GO Competitive 7/17/2014 24,800,000 Leesburg,Town of,VA VA GO Competitive 6/10/2014 115,190,000 Lynchburg, City of va GO Competitive VA GO Competitive 69,960,000 Loudoun County 5/13/2014 VA GO Direct Bank Loan 2,588,840 Pulaski,Town of,VA 4/24/2014 VA Rev Direct Bank Loan 8,487,000 Caroline County,VA 4/11/2014 VA Rev Direct Bank Loan 2,490,038 Pulaski County PSA 3/5/2014 VA Rev Direct Bank Loan 1,515,489 Pulaski County PSA 3/5/2014 1/24/2014 1,365,452 Pepper's Ferry Regional Wastewater VA Rev Direct Bank Loan Trckat mpni AI ithn raw VA GO Direct Bank Loan 25,130,000 Caroline County,VA 12/20/2013 VA Rev Direct Bank Loan 2,833,000 Accomack County,Virginia 12/19/2013 VA Rev Direct Bank Loan 4,031,900 Accomack County, Virginia 12/19/2013 DAVENPORT&COMPANY 38 Friday, February 19,2016 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Date Amount Name State Security Sale Type 12/19/2013 1,454,000 Culpeper County,Virginia VA Rev Direct Bank Loan 12/5/2013 2,680,534 Pulaski County,Virginia VA Rev Direct Bank Loan 12/5/2013 6,046,213 Pulaski County,Virginia VA Rev Direct Bank Loan 11/13/2013 45,200,000 Loudoun County,Virginia VA GO Competitive 10/26/2013 34,270,000 Albemarle County,VA EDA VA Rev Competitive 10/23/2013 10,000,000 Lynchburg, City of VA GO Direct Bank Loan 8/8/2013 13,383,000 Spotsylvania County VA Rev Direct Bank Loan 8/6/2013 21,330,000 Spotsylvania County VA Rev Direct Bank Loan 7/31/2013 3,765,000 Accomack County,VA VA Rev Negotiated 7/31/2013 17,915,000 Spotsylvania County VA GO Direct Bank Loan 7/24/2013 449,504 Southampton County VA Rev Direct Bank Loan 7/12/2013 3,500,000 Caroline County VA GO Direct Bank Loan 7/10/2013 6,574,068 Caroline County VA Rev Direct Bank Loan 6/27/2013 1,993,152 Vinton,Town Of VA GO Direct Bank Loan 6/27/2013 2,228,409 Vinton,Town Of VA GO Direct Bank Loan 6/12/2013 75,310,000 Loudoun Water VA Rev Competitive 6/5/2013 6,810,000 Virginia's First Regional Industrial Facility VA Rev Negotiated Ant Korth/ 6/3/2013 625,000 Virginia Tech/Montgomery Regional Airport VA Rev Direct Bank Loan Ant hn rib/ 5/30/2013 99,725,000 Loudoun County,VA VA GO Negotiated 5/30/2013 67,985,000 Loudoun County,VA VA GO Negotiated 4/17/2013 214,220,000 Richmond, City of,VA VA Rev Negotiated 4/17/2013 22,160,000 Richmond, City of, VA VA Rev Negotiated 3/28/2013 6,275,000 Montgomery County PSA VA Rev Direct Bank Loan 12/19/2012 4,129,625 Lynchburg, City of,VA VA GO Direct Bank Loan DAVENPORT&COMPANY Friday, February 19,2016 39 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Date Amount Name State Security Sale Type VA Rev Negotiated 4,495,000 Shenandoah County,VA 11/15/2012 VA GO Competitive 1,450,000 Caroline County,VA 10/25/2012 10/25/2012 1,290,000 Northampton County IDA,VA VA GO Competitive 10/17/2012 14,935,000 Loudoun County IDA VA Rev Competitive 10/16/2012 3,855,000 Blacksburg,Town of,Virginia VA GO Competitive VA GO Competitive 1,085,447 Caroline County,VA 10/12/2012 9/18/2012 23,520,000 Culpeper, County of,VA VA GO Competitive 8/21/2012 26,380,000 James City County EDA,VA VA Rev Competitive 8/8/2012 60,610,000 Suffolk, City of,VA VA GO Negotiated VA GO Direct Bank Loan 4,000,000 Caroline County 7/25/2012 7/19/2012 1,240,000 Spotsylvania County VA GO Competitive 7/19/2012 16,205,000 Spotsylvania County,VA VA GO Competitive 7/17/2012 64,500,000 Loudoun County,VA VA GO Competitive 6/27/2012 33,785,000 Spotsylvania County EDA VA Rev Competitive 5/9/2012 86,275,000 Fairfax County EDA VA Rev Competitive 3/14/2012 40,710,000 Loudoun County Sanitation Authority VA Rev Competitive 3/14/2012 6,970,000 Portsmouth, City of, VA VA GO Negotiated 3/14/2012 75,785,000 Portsmouth, City of,VA VA GO Negotiated VA rev Direct Bank Loan 4,386,000 Accomack County,VA EDA 12/21/2011 VA GO Direct Bank Loan 2,203,000 Accomack County,VA 12/8/2011 11/30/2011 2,000,000 Albermarle County,VA VA GO Competitive VA GO Competitive 5,000,000 Loudoun County,VA 11/30/2011 11/30/2011 15,000,000 Montgomery County,VA VA GO Competitive 11/30/2011 7,500,000 Suffolk, City of,VA VA GO Competitive DAVENPORT&COMPANY 40 Friday, February 19,2016 RFP item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Date Amount Name State Security Sale Type VA GO Direct Bank Loan 2,654,800 Culpeper County,VA 11/17/2011 11/16/2011 86,115,000 Montgomery County,VA VA GO Competitive 11/9/2011 9,545,000 Blacksburg,Town of,VA VA GO Competitive VA Rev Competitive 34,315,000 Albemarle County, VA EDA 11/8/2011 VA GO Direct Bank Loan 10,000,000 Lynchburg, City of,VA 11/8/2011 11/2/2011 3,255,000 Shenandoah County,VA VA Rev Negotiated VA Rev Direct Bank Loan 2,457,000 Culpeper County,VA, EDA 10/26/2011 VA Rev Direct Bank Loan 6,433,000 Culpeper County, VA, EDA 10/26/2011 9/30/2011 6,672,000 James City County,VA EDA VA Rev Direct Bank Loan 9/27/2011 11,275,000 Spotsylvania County,VA EDA VA Rev Competitive 9/13/2011 8,400,000 Caroline County, VA EDA VA Rev Negotiated 7/28/2011 3,880,000 Leesburg,Town of,VA VA GO Negotiated 7/28/2011 26,990,000 Leesburg,Town of,VA VA GO Negotiated VA GO Direct Bank Loan 4,500,000 Caroline County, VA 7/15/2011 7/13/2011 5,650,000 Spotsylvania County,VA VA GO Competitive VA GO Competitive 10,915,000 Spotsylvania County,VA 7/13/2011 6/22/2011 53,510,000 Loudoun County,VA VA GO Competitive 6/7/2011 2,785,000 Loudoun County,VA IDA VA Rev Negotiated 6/7/2011 33,455,000 Loudoun County,VA IDA VA Rev Negotiated VA GO Direct Bank Loan 1,270,000 Blacksburg,Town of,VA 4/28/2011 4/28/2011 3,670,000 Blacksburg,Town of,VA VA GO Direct Bank Loan VA rev Direct Bank Loan 8,063,319 Loudoun County,VA IDA 2/17/2011 11/12/2010 10,357,000 Albemarle County Service Authority VA Rev Direct Bank Loan 11/9/2010 12,705,000 Montgomery County, VA, EDA VA Rev Competitive DAVENPORT&COMPANY 41 Friday, February 19,2016 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. Date Amount Name State Security Sale Type 11/4/2010 795,000 Caroline County,VA VA Rev Negotiated 11/4/2010 3,310,000 Caroline County,VA VA Rev Negotiated 11/4/2010 20,655,000 Caroline County,VA VA Rev Negotiated 10/6/2010 4,820,000 James City County,VA VA GO Competitive 9/29/2010 15,520,000 Loudoun County Sanitation Authority VA Rev Competitive 9/28/2010 29,655,000 Lynchburg, City of,VA VA GO Negotiated 8/11/2010 28,405,000 Spotsylvania County,VA VA Rev Negotiated 8/11/2010 29,450,000 Spotsylvania County,VA VA Rev Negotiated 7/23/2010 5,500,000 Caroline County,VA VA GO Direct Bank Loan 3,000,000 Pepper's Ferry Regional Wastewater 7/14/2010 Treatment Authority VA Rev Direct Bank Loan 7/14/2010 8,435,000 Spotsylvania County,VA VA GO Negotiated 7/14/2010 8,680,000 Spotsylvania County,VA VA GO Negotiated 6/22/2010 23,655,000 Loudoun County,VA VA GO Competitive 6/22/2010 46,975,000 Loudoun County,VA VA GO Competitive 4/13/2010 30,075,000 Loudoun County Sanitation Authority VA Rev Negotiated 4/7/2010 89,120,000 Loudoun County, VA VA GO Negotiated 3/25/2010 7,035,000 Portsmouth, City of,VA VA GO Negotiated 3/25/2010 24,730,000 Portsmouth, City of,VA VA GO Negotiated 3/25/2010 54,350,000 Portsmouth, City of,VA VA GO Negotiated 2/4/2010 400,000 Northampton County and Towns Joint IDA VA GO Direct Bank Loan DAVENPORT&COMPANY Friday, February 19,2016 42 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. C. Case Study DAVENPORT&COMPANY Friday, February 19,2016 43 Scenario 1-Taxable Advanced Refunding Refunding of Augusta,Georgia's W&S Revenue Refunding Bond Series 2007 _ �/ Market Rates as of February 4,2016 ,L1--- t'`1 %� Assumes Closing on April 4,2016 Summary of Refunding Results Net Budgetary Present Negative All-In True Savings1 Value Savings 1 Arbitrage Interest Cost $10,451,699 $8,328,787 $4,444,413 3.06% 6.73%of Refunded Debt Service Comparison Fiscal Prior Refunding Net Budgetary Year Debt Service Debt Service Savings 2017 6,187,750 5,489,898 697,852 2018 6,187,750 5,492,348 695,402 2019 11,964,625 11,266,918 697,707 2020 16,221,625 15,523,769 697,857 2021 16,208,625 15,514,938 693,687 2022 16,193,500 15,497,515 695,985 2023 16,175,000 15,479,431 695,569 2024 10,921,000 10,223,111 697,890 2025 10,911,625 10,213,702 697,923 2026 10,903,000 10,206,752 696,248 2027 10,894,125 10,197,828 696,297 2028 10,879,125 10,182,698 696,427 2029 10,871,875 10,175,260 696,615 2030 11,119,500 10,421,564 697,937 2031 11,100,750 10,402,445 698,305 Total $176,739,875 $166,288,176 $10,451,699 Summary of Bonds Refunded Par Maturity Coupon Refunded Call Provision 10/1/2018 5.000% $5,925,000 10/1/2017 at 101% 10/1/2019 5.000% $10,595,000 10/1/2017 at 101% 10/1/2020 5.000% $11,125,000 10/1/2017 at 101% 10/1/2021 5.000% $11,680,000 10/1/2017 at 101% 10/1/2022 5.000% $12,260,000 10/1/2017 at 101% 10/1/2023 5.000% $7,500,000 10/1/2017 at 101% 10/1/2024 5.000% $7,875,000 10/1/2017 at 101% 10/1/2025 5.000% $8,270,000 10/1/2017 at 101% 10/1/2026 5.000% $8,685,000 10/1/2017 at 101% 10/1/2027 5.000% $9,115,000 10/1/2017 at 101% 10/1/2028 5.000% $9,575,000 10/1/2017 at 101% 10/1/2029 5.000% $10,320,000 10/1/2017 at 101% 10/1/2030 5.000% $10,830,000 10/1/2017 at 101% Total $123,755,000 Notes: 1)Net of estimated local cost of issuance of$200,000 and Underwriters Discount of$5 per bond. 2)All numbers are preliminary,subject to change.Actual results may vary significantly. 3)Assumes Escrow is funded with SLGS earning 0.61%,or$1,176,475. Scenario 2 -Taxable Advanced Refunding 1 Year Out Refunding of Augusta,Georgia's W&S Revenue Refunding Bond Series 2007 _ Market Rates as of February 4,2016z`�'"` ,_`- f: E (1 R (: I A Assumes Closing on April 4,2017 Summary of Refunding Results Net Budgetary Present Negative All-In True Savings1 Value Savings 1 Arbitrage Interest Cost $15,602,803 $12,780,864 $1,500,415 2.94% 10.33%of Refunded Debt Service Comparison Fiscal Prior Refunding Net Budgetary Year Debt Service Debt Service Savings 2018 6,187,750 5,072,500 1,115,250 2019 11,964,625 10,848,873 1,115,752 2020 16,221,625 15,108,582 1,113,043 2021 16,208,625 15,095,479 1,113,146 2022 16,193,500 15,080,369 1,113,131 2023 16,175,000 15,061,515 1,113,486 2024 10,921,000 9,806,997 1,114,004 2025 10,911,625 9,795,673 1,115,953 2026 10,903,000 9,787,649 1,115,351 2027 10,894,125 9,777,258 1,116,867 2028 10,879,125 9,765,139 1,113,986 2029 10,871,875 9,756,893 1,114,982 2030 11,119,500 10,006,799 1,112,702 2031 11,100,750 9,985,599 1,115,151 Total $170,552,125 $154,949,322 $15,602,803 Summary of Bonds Refunded Par Maturity Coupon Refunded Call Provision 10/1/2018 5.000% $5,925,000 10/1/2017 at 101% 10/1/2019 5.000% $10,595,000 10/1/2017 at 101% 10/1/2020 5.000% $11,125,000 10/1/2017 at 101% 10/1/2021 5.000% $11,680,000 10/1/2017 at 101% 10/1/2022 5.000% $12,260,000 10/1/2017 at 101% 10/1/2023 5.000% $7,500,000 10/1/2017 at 101% 10/1/2024 5.000% $7,875,000 10/1/2017 at 101% 10/1/2025 5.000% $8,270,000 10/1/2017 at 101% 10/1/2026 5.000% $8,685,000 10/1/2017 at 101% 10/1/2027 5.000% $9,115,000 10/1/2017 at 101% 10/1/2028 5.000% $9,575,000 10/1/2017 at 101% 10/1/2029 5.000% $10,320,000 10/1/2017 at 101% 10/1/2030 5.000% $10,830,000 10/1/2017 at 101% Total $123,755,000 Notes: 1)Net of estimated local cost of issuance of$200,000 and Underwriters Discount of$5 per bond. 2)All numbers are preliminary,subject to change.Actual results may vary significantly. 3)Assumes Escrow is funded with SLGS earning 0.39%,or$243,147. Scenario 3-Tax Exempt Current Refunding Refunding of Augusta,Georgia's W&S Revenue Refunding Bond Series 2007 _ 71-4- - �' Rates as of February 4,2016 '--- u 7`� IOC- Market Assumes Closing on July 1,2017 Summary of Refunding Results Net Budgetary Present Negative All-In True Savingsl Value Savings 1 Arbitrage Interest Cost $22,388,163 $19,549,090 $554,440 2.30% 15.80%of Refunded Debt Service Comparison Fiscal Prior Refunding Net Budgetary Year Debt Service Debt Service Savings 2018 6,187,750 4,591,338 1,596,413 2019 11,964,625 10,366,500 1,598,125 2020 16,221,625 14,622,375 1,599,250 2021 16,208,625 14,610,500 1,598,125 2022 16,193,500 14,593,875 1,599,625 2023 16,175,000 14,576,375 1,598,625 2024 10,921,000 9,321,000 1,600,000 2025 10,911,625 9,313,000 1,598,625 2026 10,903,000 9,303,625 1,599,375 2027 10,894,125 9,292,125 1,602,000 2028 10,879,125 9,277,750 1,601,375 2029 10,871,875 9,274,375 1,597,500 2030 11,119,500 9,519,375 1,600,125 2031 11,100,750 9,501,750 1,599,000 Total $170,552,125 $148,163,963 $22,388,163 Summary of Bonds Refunded Par Maturity Coupon Refunded Call Provision 10/1/2018 5.000% $5,925,000 10/1/2017 at 101% 10/1/2019 5.000% $10,595,000 10/1/2017 at 101% 10/1/2020 5.000% $11,125,000 10/1/2017 at 101% 10/1/2021 5.000% $11,680,000 10/1/2017 at 101% 10/1/2022 5.000% $12,260,000 10/1/2017 at 101% 10/1/2023 5.000% $7,500,000 10/1/2017 at 101% 10/1/2024 5.000% $7,875,000 10/1/2017 at 101% 10/1/2025 5.000% $8,270,000 10/1/2017 at 101% 10/1/2026 5.000% $8,685,000 10/1/2017 at 101% 10/1/2027 5.000% $9,115,000 10/1/2017 at 101% 10/1/2028 5.000% $9,575,000 10/1/2017 at 101% 10/1/2029 5.000% $10,320,000 10/1/2017 at 101% 10/1/2030 5.000% $10,830,000 10/1/2017 at 101% Total $123,755,000 Notes: 1)Net of estimated local cost of issuance of$200,000 and Underwriters Discount of$5 per bond. 2)All numbers are preliminary,subject to change.Actual results may vary significantly. 3)Assumes Escrow is funded with SLGS earning 0.32%,or$96,781. RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. D. Davenport Financial Statements DAVENPORT&COMPANY Friday, February 19,2016 44 DAVENPORT & COMPANY LLC AND SUBSIDIARIES Consolidated Financial Statements and Schedules (Together with Report of Independent Registered Public Accounting Firm on Internal Control Required by SEC Rule 17a-5(g)(1)) December 31, 2014 and 2013 (With Report of Independent Registered Public Accounting Firm Thereon) These financial statements and schedules should be deemed confidential pursuant to subparagraph(e)(3)of SEC Rule 17a-5 DAVENPORT& COMPANY LLC AND SUBSIDIARIES Table of Contents Page Report of Independent Registered Public Accounting Firm 1 Consolidated Statements of Financial Condition 2 Consolidated Statements of Income 3 Consolidated Statements of Changes in Members' Interest 4 Consolidated Statements of Cash Flows 5 Notes to Consolidated Financial Statements 6 Schedules 1 Computation of Net Capital under SEC Rule 15c3-1 18 2 Computation for Determination of the Reserve Requirements under SEC Rule 15c3-3 19 3 Information Relating to the Possession or Control Requirements under SEC Rule 15c3-3 20 KPMG KPMG LLP Suite 2000 1021 East Cary Street Richmond,VA 23219-4023 Report of Independent Registered Public Accounting Firm The Board of Directors Davenport& Company LLC: We have audited the accompanying consolidated statements of financial condition of Davenport&Company LLC and subsidiaries (the "Company") as of December 31, 2014 and 2013, and the related consolidated statements of income, changes in members' interest, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our 2014 audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). We conducted our 2013 audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion. In our opinion,the financial statements referred to above present fairly,in all material respects,the financial position of Davenport&Company LLC and subsidiaries as of December 31,2014 and 2013,and the results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles. The supplemental information contained in Schedules 1, 2 and 3 has been subjected to audit procedures performed in conjunction with the audit of the Company's 2014 consolidated financial statements. The supplemental information is the responsibility of the Company's management.Our audit procedures included determining whether the supplemental information reconciles to the consolidated financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content,is presented in conformity with 17 C.F.R. §240.17a-5. In our opinion,the supplemental information contained in Schedules 1, 2, and 3 is fairly stated, in all material respects, in relation to the consolidated financial statements as a whole. ''Pty LEP Richmond, Virginia February 27, 2015 15 KPMG LLP is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative ("KPMG International"),a Swiss entity. DAVENPORT& COMPANY LLC AND SUBSIDIARIES Consolidated Statements of Financial Condition December 31,2014 and 2013 Assets 2014 2013 Cash and cash equivalents(note 2) $ 4,195,968 5,738,077 Cash segregated under federal and other regulations(note 3) 2 2 Deposits with clearing organizations and others 1,827,073 1,126,322 Receivable from broker-dealers and clearing organizations (note 4) 631,603 73,156 Receivable under securities borrowed agreements (note 11) 7,600 108,600 Receivable from customers(note 5) 70,468,797 59,250,541 Receivable from noncustomers(note 5) 2,594,525 5,118,307 Marketable securities owned, at fair value(notes 6 and 12) 14,445,335 10,697,734 Furniture, equipment, software, and leasehold improvements, at cost(less accumulated depreciation and amortization of $9,713,388 in 2014 and$8,684,029 in 2013)(note 7) 3,952,258 4,428,912 Notes receivable from employees(note 2) 888,697 1,094,004 Prepaid expenses and other assets 8,506,506 13,122,338 $ 107,518,364 100,757,993 Liabilities and Members' Interest Short-term bank loans(note 8) $ 3,580,000 6,081,650 Drafts payable 12,613,023 9,224,953 Members' interest payable 5,597,572 5,888,744 Payable to broker-dealers and clearing organizations (note 4) 1,071,585 393,098 Payable to customers(note 5) 32,657,648 25,646,489 Payable to noncustomers (note 5) 103,653 29,818 Securities sold,not yet purchased, at fair value(notes 6 and 12) 20,484 47,815 Accounts payable, accrued expenses, and other liabilities 13,493,853 15,940,203 69,137,818 63,252,770 Commitments and contingent liabilities(notes 11, 12, and 13) Members' interest 38,380,546 37,505,223 $ 107,518,364 100,757,993 See accompanying notes to consolidated financial statements. 2 DAVENPORT& COMPANY LLC AND SUBSIDIARIES Consolidated Statements of Income Years ended December 31, 2014 and 2013 2014 2013 Revenues: Investment advisory fees $ 77,254,531 66,087,797 Commissions 28,564,593 34,232,036 Principal transactions 4,704,010 4,824,408 Investment banking 12,413,686 15,016,496 Interest and dividends 2,578,823 2,410,763 Other 1,484,160 1,936,987 126,999,803 124,508,487 Expenses: Employee compensation and benefits(note 10) 92,607,284 90,953,890 Floor brokerage, exchange, and clearance fees 1,684,524 1,897,322 Communications and data processing 2,593,745 2,694,614 Interest 223,247 239,520 Occupancy and equipment 5,853,754 5,769,980 Other operating expenses 12,607,678 12,266,287 115,570,232 113,821,613 Net income $ 11,429,571 10,686,874 See accompanying notes to consolidated financial statements. 3 DAVENPORT& COMPANY LLC AND SUBSIDIARIES Consolidated Statements of Changes in Members' Interest Years ended December 31,2014 and 2013 Total members' interest Balance at December 31,2012 $ 37,145,278 Net income 10,686,874 Capital distributions (10,686,466) Capital contributions 1,675,485 Repurchase of members' interest (1,315,948) Balance at December 31, 2013 37,505,223 Net income 11,429,571 Capital distributions (11,410,398) Capital contributions 2,041,287 Repurchase of members' interest (1,185,137) Balance at December 31,2014 $ 38,380,546 See accompanying notes to consolidated financial statements. 4 DAVENPORT& COMPANY LLC AND SUBSIDIARIES Consolidated Statements of Cash Flows Years ended December 31,2014 and 2013 2014 2013 Cash flows from operating activities: Net income $ 11,429,571 10,686,874 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,030,762 913,460 Forgiveness of notes receivable from employees 913,297 1,631,516 Loss on disposal of furniture and equipment — 102,232 (Increase) decrease in operating assets: ' Deposits with clearing organizations and others (700,751) 673,643 Receivable under securities borrowed agreements 101,000 (108,600) Net receivable from customers (4,207,097) (8,020,728) Net receivable from noncustomers 2,597,617 3,666,604 Marketable securities owned and securities sold,not yet purchased,net (3,774,932) 5,024,218 Prepaid expenses and other assets 4,615,832 (5,686,103) Notes receivable from employees (707,990) (815,725) Increase(decrease)in operating liabilities: Net payable to broker-dealers and clearing organizations 120,040 (1,099,672) Accounts payable, accrued expenses, and other liabilities (2,446,350) 5,476,945 Net cash provided by operating activities 8,970,999 12,444,664 Cash flows from investing activity: Purchase of furniture, equipment, software,and leasehold improvements (554,108) (2,744,851) Proceeds from the sale of furniture and equipment — 5,155 Net cash used in investing activity (554,108) (2,739,696) Cash flows from financing activities: Increase(decrease)in drafts payable 3,388,070 (1,787,424) Members' capital contributions 2,041,287 1,675,485 Distributions to members (11,701,570) (9,171,408) Repurchase of member's interest (1,185,137) (1,315,948) Increase(decrease)in short-term bank loans (2,501,650) 2,261,650 Net cash used in financing activities (9,959,000) (8,337,645) Net increase(decrease)in cash (1,542,109) 1,367,323 Cash and cash equivalents at beginning of year 5,738,077 4,370,754 Cash and cash equivalents at end of year $ 4,195,968 5,738,077 Supplemental cash flow information—interest paid $ 223,247 239,520 See accompanying notes to consolidated financial statements. 5 DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31,2014 and 2013 (1) Organization and Nature of Business Davenport & Company LLC and Subsidiaries (the Company) is a broker-dealer registered under the Securities Exchange Act of 1934 and an investment adviser registered under the Investment Advisers Act of 1940. The Company is a member of the New York Stock Exchange, Inc. and the Financial Industry Regulatory Authority (FINRA). The Company is a limited liability company organized under the laws of the Commonwealth of Virginia. The Company is owned by Davenport & Company of Virginia, Inc., Davenport Corp., and DAVA Corp. (collectively, the Members) who have membership interests of 59%, 21%, and 20%, respectively. The liability of each Member is limited to the balances in each Member's capital account. The Company will continue indefinitely, unless dissolved earlier pursuant to the terms of the operating agreement of the Company. Davenport Financial Advisors LLC (DFA) and Davenport Trust Company (DavTrust) are wholly owned subsidiaries of Davenport & Company LLC. DFA is engaged in the appraisal of businesses and their securities in connection with estate and gift tax, equitable distribution, acquisition advisory, the purchase and sale of listed and unlisted securities, litigation support, and other purposes. The services and responsibilities of DFA are separate from those of Davenport & Company LLC, notwithstanding the fact that DFA and Davenport & Company LLC may share employees and facilities. DavTrust is a wholly owned North Carolina corporation formed in 2009 to be the trustee of Davenport's individual retirement accounts. It was capitalized in December 2009 with $1.5 million and began operations on October 1, 2011. (2) Summary of Significant Accounting Policies (a) Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company is engaged in a single line of business as a securities broker-dealer, which comprises several classes of services, including principal transactions, agency transactions, investment banking, and investment advisory services. All material intercompany balances and transactions are eliminated in consolidation. (b) Cash and Cash Equivalents All highly liquid investments with original maturities of three months or less are considered to be cash equivalents. (c) Fair Value of Financial Instruments The Company carries cash and cash equivalents, cash segregated under federal and other regulations, securities owned, and securities sold, not yet purchased at fair value. Deposits with clearing organizations and other receivables from broker-dealers and clearing organizations, receivable under securities borrowed agreements, receivable from customers, noncustomers, and employees, short-term bank loans, drafts payable, members interest payable, payable to broker-dealers and clearing organizations, payable to customers, and payable to noncustomers are recorded at their carrying amounts, which approximate fair value. The fair value of these items is not materially sensitive to shifts in market interest rates because of the limited term to maturity and/or variable interest rates of many of these instruments. 6 (Continued) DAVENPORT & COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31,2014 and 2013 (d) Securities Transactions Proprietary securities transactions in regular way trades are recorded on the settlement date, which is not materially different from the trade date. Profit and loss arising from all securities transactions entered into for the account and risk of the Company are also recorded on the settlement date, which is not materially different from the trade date. Customers' securities transactions and related commission income and expense are reported on a trade-date basis. Marketable securities owned are recorded at fair value, which is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between willing market participants on the remeasurement date. In the event of an inactive market, the fair value for certain financial instruments is derived using pricing models and other valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company's financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available will generally have a higher degree of price transparency than financial instruments that are thinly traded or not quoted. In accordance with U.S. generally accepted accounting principles (GAAP), the criteria used to determine whether the market for a financial instrument is active or inactive is based on the particular asset or liability. For equity securities, the Company's definition of actively traded is based on average daily volume and other market trading statistics. The Company has determined the market for certain other types of financial instruments, including certain auction rate preferred securities to be inactive as of both December 31, 2014 and 2013. As a result, the valuation of these financial instruments included management judgment in determining the relevance and reliability of market information available. The Company considered the inactivity of the market to be evidenced by several factors, including a continued decreased price transparency caused by decreased volume of trades relative to historical levels, stale transaction prices, and transaction prices that varied significantly either over time or among market makers. When instruments are traded in secondary markets and quoted market prices do not exist for such securities, the Company utilizes valuation techniques including trader knowledge of the market to estimate fair value. Valuation techniques may also rely on other observable inputs such as yield curves, interest rates and expected principal repayments and default probabilities. Instruments valued using these inputs are typically classified within Level 2 of the fair value hierarchy. Examples include certain municipal debt securities, and corporate debt securities. The Company utilizes prices from independent services to corroborate its estimate of fair value. Depending upon the type of security, the pricing service may provide a listed price or use other methods including broker—dealer price quotations. Positions in illiquid securities that do not have readily determinable fair values require significant judgment or estimation. For these securities, which include certain auction rate securities and non-publically traded equity securities, the Company uses quotes from secondary market makers to determine fair value. Securities valued using these techniques are classified within Level 3 of the fair value hierarchy. 7 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31,2014 and 2013 (e) Investment Banking Investment banking revenues include gains, losses, and fees, net of syndicate expenses, arising from securities offerings in which the Company acts as an underwriter or agent. Investment banking revenues also include fees earned from providing merger and acquisition and financial restructuring advisory services and financial advisor fees related to services provided to tax-exempt issues. Investment banking management fees are recorded on the settlement date. Also, sales concessions are recorded on settlement date and underwriting fees are recognized at the time the underwriting is completed and the income is reasonably determinable. (f) Investment Advisory Services Fee income for investment advisory services is recorded on the accrual basis based on the fair value of managed assets. Fees are computed and collected quarterly based upon fee schedules and average month-end portfolio values. (g) Income Taxes Income taxes are not reflected in the accompanying consolidated financial statements as the responsibility for income taxes is that of the Members and not of the Company. One subsidiary, DavTrust, is a C corporation and is responsible for its own income taxes. DavTrust had income tax expense of$6,300 and $7,000 for 2014 and 2013, respectively, and an income tax asset of$1,400 and$3,400 as of December 31,2014 and 2013,respectively. Uncertain tax positions are required to be recognized or derecognized based on a more likely than not threshold. This applies to positions taken or expected to be taken on a tax return. The Company analyzed filing positions in all of the federal and state jurisdictions where they are required to file income tax returns, including its status as a pass-through entity. The only periods subject to examination for federal and state tax returns are 2011 through 2014. The Company believes its income tax filing positions, including its status as a pass-through entity, would be sustained on audit and does not anticipate any adjustments that would result in a material change to its consolidated financial position. Therefore, no reserves for uncertain tax positions, nor interest and penalties, have been recorded as of December 31, 2014 and 2013. (h) Furniture,Equipment,Software, and Leasehold Improvements The Company records depreciation and amortization on the straight-line method based on estimated useful lives of two years for software and the related software licenses, four years for quotation equipment, six years for data processing and communications equipment, and ten years for furniture and fixtures. Leasehold improvements are amortized over the lesser of the estimated useful lives of the improvements or the terms of the related leases. (i) Drafts Payable Drafts payable represent amounts drawn by the Company against a bank. 8 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2014 and 2013 (j) Notes Receivable from Employees From time to time, the Company issues loans to employees. Some of these loans are nonnegotiable and forgiven over a predetermined period of time on a schedule determined by the Company, as long as the employee remains employed by the Company. Periodic forgiveness of the principal and interest amounts appear as noncash compensation to the employee in each monthly paycheck. (k) Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to estimates and assumptions include the fair value of investments and other contingencies. (3) Cash Segregated under Federal and Other Regulations Cash of$2 at December 31, 2014 and 2013 has been segregated in a special reserve bank account for the benefit of customers under Rule 15c3-3 of the Securities and Exchange Commission(SEC). (4) Receivable from and Payable to Broker-Dealers and Clearing Organizations Amounts receivable from and payable to broker-dealers and clearing organizations at December 31, 2014 and 2013, consisted of the following: 2014 Receivable Payable Securities failed to deliver/receive $ 50,274 22,064 Amounts receivable from/payable to clearing broker — 20,593 Amounts receivable from/payable to clearing organizations — 840,057 Amounts receivable from/payable to other broker 581,329 188,871 $ 631,603 1,071,585 2013 Receivable Payable Securities failed to deliver/receive $ 11,598 6,310 Amounts receivable from/payable to clearing broker 7,200 Amounts receivable from/payable to clearing organizations — 340,623 Amounts receivable from/payable to other broker 61,558 38,965 $ 73,156 393,098 9 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31,2014 and 2013 The Company clears certain of its transactions through another broker-dealer on an omnibus basis. The amount payable to the clearing broker relates to the aforementioned transactions and is collateralized by securities owned by the Company. (5) Receivable from and Payable to Customers and Noncustomers Amounts receivable from and payable to customers and noncustomers (principally, directors of the Company) include amounts due on cash and margin transactions. Securities owned by customers and noncustomers are held as collateral for receivables. Such collateral is not reflected in the consolidated financial statements and may be repledged by the Company. See further discussion of collateral at notes 8 and 12. (6) Securities Owned and Securities Sold,Not Yet Purchased (a) Securities owned and securities sold, not yet purchased, consisted of trading securities at December 31, 2014 and 2013 as follows: 2014 2013 Owned: Marketable securities, at fair value: State and municipal obligations (primarily located in the Commonwealth of Virginia) $ 12,567,903 9,937,454 Auction rate preferred securities 90,000 90,000 Certificates of deposit 1,255,925 Corporate bonds 351,248 500,593 Corporate stocks 180,259 169,687 $ 14,445,335 10,697,734 Sold,not yet purchased at fair value: Corporate stocks $ 20,484 47,815 $ 20,484 47,815 (b) Fair value disclosures are based on a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs(Level 3 measurements). The three levels of the fair value hierarchy are as follows: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets that the Company has the ability to access at the measurement date. • Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly. • Level 3 inputs are unobservable inputs. 10 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31,2014 and 2013 The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The following table presents assets and liabilities that are measured at fair value on a recurring basis at December 31, 2014: Fair value measurements at reporting date using Quoted prices in active Significant markets for other Significant identical observable unobservable December 31, assets inputs inputs 2014 (Level 1) (Level 2) (Level 3) Assets: Trading securities: State and municipal obligations $ 12,567,903 — 12,567,903 — Auction rate preferred securities 90,000 — — 90,000 Certificates of deposit 1,255,925 1,255,925 — — Corporate bonds 351,248 — 351,248 — Corporate stocks 180,259 17,605 162,654 Total $ 14,445,335 1,273,530 12,919,151 252,654 Liabilities: Securities sold not yet purchased: Corporate stocks $ 20,484 20,484 — — $ 20,484 20,484 — — 11 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2014 and 2013 The following table presents assets and liabilities that are measured at fair value on a recurring basis at December 31, 2013: Fair value measurements at reporting date using Quoted prices in active Significant markets for other Significant identical observable unobservable December 31, assets inputs inputs 2013 (Level 1) (Level 2) (Level 3) Assets: Trading securities: State and municipal obligations $ 9,937,454 — 9,937,454 — Auction rate preferred securities 90,000 — — 90,000 Corporate bonds 500,593 — 500,593 — Corporate stocks 169,687 8,019 — 161,668 Total $ 10,697,734 8,019 10,438,047 251,668 Liabilities: Securities sold not yet purchased: Corporate stocks $ 47,815 47,815 $ 47,815 47,815 — — The following table summarizes Level 3 assets measured at fair value on a recurring basis for the year ended December 31,2014: Assets: Beginning balances as of January 1,2014 $ 251,668 Total realized and unrealized gains included in net income Transfer into Level 3 986 Ending balance as of December 31, 2014 $ 252,654 Net unrealized gains included in net income for the period relating to assets held at December 31, 2014 S _ There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy during the year ended December 31,2014. 12 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31,2014 and 2013 The following table summarizes Level 3 assets measured at fair value on a recurring basis for the year ended December 31, 2013: Assets: Beginning balances as of January 1, 2013 $ 249,886 Total realized and unrealized gains included in net income — Transfer into Level 3 1,782 Ending balance as of December 31, 2013 $ 251,668 Net unrealized gains included in net income for the period relating to assets held at December 31, 2013 $ — There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy during the year ended December 31,2013. The Company had no assets or liabilities that were measured at fair value on a nonrecurring basis as of December 31,2014 or 2013. (7) Furniture,Equipment, Software,and Leasehold Improvements Furniture, equipment, software, and leasehold improvements are summarized as follows: 2014 2013 Furniture $ 3,964,825 3,794,152 Equipment 4,689,305 4,575,362 Software 1,079,227 971,417 Leasehold improvements 3,932,289 3,772,010 13,665,646 13,112,941 Less accumulated depreciation and amortization 9,713,388 8,684,029 Total furniture, equipment, software, and leasehold improvements,net $ 3,952,258 4,428,912 (8) Short-Term Bank Loans Short-term bank loans are used to finance loans to customers and noncustomers who have purchased securities under margin agreements and to finance trading and investment securities. These loans are generally made at the short-term collateralized borrowing rate (1.09% and 1.10% at December 31, 2014 and December 31, 2013, respectively) and are payable on demand. In addition, the Company has a $1 million unsecured line of credit with a commercial bank. The interest rate on this line of credit is prime (3.25%at December 31,2014 and 2013) and any borrowings are payable upon demand. 13 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31,2014 and 2013 Short-term bank loans and related collateral outstanding at December 31,2014 and 2013 were as follows: Loans Collateral 2014 2013 2014 2013 Collateralized by company securities $ 3,480,000 5,981,650 11,641,412 8,466,702 Collateralized by customer securities — 1,350,434 4,931,211 Collateralized by noncustomer securities — — 704,077 2,116,700 Unsecured line of credit 100,000 100,000 — — $ 3,580,000 6,081,650 13,695,923 15,514,613 (9) Subordinated Borrowings The Company has approval from the NYSE for a Revolving Note and Cash Subordination Agreement (the Agreement)with a bank for up to $7,500,000 at prime (3.25% at December 31, 2014 and 2013)+ 1%. The Company must pay a commitment fee of 1/8% for any unused portion of the Agreement. There were no amounts outstanding under the Agreement as of or during the years ended December 31, 2014 or 2013, respectively. The subordinated borrowings are available in computing net capital under the SEC's Uniform Net Capital Rule (Rule 15c3-1). To the extent that such borrowings are required for the Company's continued compliance with minimum net capital requirements,they may not be repaid. (10) Employee Benefit Plans The Company has a defined-contribution profit sharing plan and a 401(k) plan covering substantially all employees. Contributions to the profit sharing plan are made solely at the discretion of the board of managers. Profit sharing contributions approximated $3,739,000 and $3,754,000 for the years ended December 31, 2014 and 2013, respectively. Participants in the 401(k) plan are allowed to make tax-deferred contributions under Section 401(k) of the Internal Revenue Code and require the Company to make a"Safe Harbor" contribution to the plan equal to 3% of compensation. The 401(k)plan expense was approximately$1,616,000 and$1,891,000 for the years ended December 31,2014 and 2013,respectively. (11) Securities Borrowing Activities Securities borrowed are generally reported as collateralized financing transactions and are recorded in the accompanying consolidated Statements of Financial Condition at the amount of cash collateral advanced. Securities borrowed transactions require the Company to deposit cash with the lender. The Company monitors the fair value of securities borrowed on a daily basis, with additional collateral obtained or refunded as necessary. Cash deposited with lenders under securities borrowing agreements totaled $7,600 and $108,600 at December 31, 2014 and 2013, respectively. The fair value of the underlying securities used by the 14 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2014 and 2013 Company primarily to effectuate short sales by customers approximated$7,184 and$106,556 at December 31,2014 and 2013,respectively. (12) Financial Instruments In the normal course of its business, the Company enters into various transactions involving off-balance-sheet financial instruments. These financial instruments include the purchase and sale of securities pursuant to new issuances. These transactions are used to meet the needs of customers, conduct trading activities, and manage market risks and are, therefore, subject to varying degrees of market and credit risk. In addition,the Company has sold securities that it does not currently own and will, therefore,be obligated to purchase such securities at a future date. The Company has recorded these obligations in the consolidated financial statements at the fair values of the related securities and will incur a loss if the fair value of the securities increases subsequent to year-end. In the normal course of business, the Company's customer activities involve the execution, settlement, and financing of various customer securities transactions. These activities may expose the Company to off-balance-sheet risk in the event the customer or other broker is unable to fulfill its contracted obligations and the Company has to purchase or sell the financial instrument underlying the contract at a loss. The Company's customer securities activities are transacted on either a cash or margin basis. In margin transactions,the Company extends credit to its customers, subject to various regulatory and internal margin requirements, collateralized by cash and securities in the customers' accounts. In connection with these activities, the Company executes and clears customer transactions involving the sale of securities not yet purchased, substantially all of which are transacted on a margin basis subject to individual exchange regulations. Such transaction may expose the Company to significant off-balance-sheet risk in the event margin requirements are not sufficient to fully cover losses that customers may incur. In the event the customer fails to satisfy its obligations, the Company may be required to purchase or sell financial instruments at prevailing market prices to fulfill the customer's obligations. The Company seeks to control the risks associated with its customer activities by requiring customers to maintain margin collateral in compliance with various regulatory and internal guidelines. The Company monitors required margin levels daily and, pursuant to such guidelines, requires the customer to deposit additional collateral or to reduce positions when necessary. The Company's customer financing and securities settlement activities require the Company to pledge customer securities as collateral in support of various secured financing sources such as bank loans and securities loaned. In the event the counterparty is unable to meet its contractual obligation to return customer securities pledged as collateral, the Company may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy its customer obligations. The Company controls this risk by monitoring the fair value of securities pledged on a daily basis and by requiring adjustments of collateral levels in the event of excess market exposure. In addition, the Company establishes credit limits for such activities and monitors compliance on a daily basis. The Company has a concentration of credit risk in the Commonwealth of Virginia since a significant portion of its customer base resides in that state. This is mitigated through the Company's policy of 15 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31,2014 and 2013 maintaining custody of collateral for all of its margin account customers in accordance with various regulatory and internal guidelines. (13) Commitments and Contingencies The Company leases its office space and certain office equipment and software under operating leases expiring at various dates through 2022. Minimum future rental payments required under such leases that have initial or remaining noncancelable lease terms in excess of one year at December 31, 2014 are as follows: 2015 $ 3,360,110 2016 3,338,994 2017 3,208,634 2018 3,069,317 2019 2,625,278 2020 and thereafter 4,710,305 Total minimum lease payments $ 20,312,638 Rental expense was approximately $3,585,000 and$3,631,000 for the years ended December 31, 2014 and 2013,respectively. The Company is a party to certain legal and regulatory actions arising in the normal course of business. Management of the Company, after consultation with outside legal counsel, believes that the resolution of these various actions will not result in any material adverse effects on the consolidated financial position, results of operations, or liquidity of the Company. (14) Variable Interest Entities (VIEs) The Company has determined that several entities in which it is the managing member meets the definition of a VIE. However, Davenport is not the primary beneficiary and accordingly does not consolidate the funds. These entities have assets of approximately $453,385,000 and $382,480,000 at December 31, 2014 and 2013, respectively. Management fees and incentive allocations received by the Company from these entities were approximately $8,810,000 and $8,594,000 for the years ended December 31, 2014 and 2013, respectively. 16 (Continued) (15) Net Capital Requirements and Capital Redemption Agreement The Company is subject to the SEC Rule 15c3-1 and the New York Stock Exchange, Inc., which requires the maintenance of minimum net capital. The Company has elected to use the alternative method, permitted by the rule, which requires that the Company and its subsidiaries maintain minimum net capital, as defined, equal to the greater of $250,000 or 2% of aggregate debit balances arising from customer transactions. The net capital rules also provide that equity capital may not be withdrawn or cash distributions paid if resulting net capital would be less than 5% of aggregate debits.At December 31,2014, the Company's net capital, as defined, of $23,435,824 was 23% of aggregate debit balances and was $21,367,333 in excess of the minimum net capital required. At December 31, 2013, the Company's net capital, as defined, of$22,601,085 was 32% of aggregate debit balances and was $21,156,114 in excess of the minimum net capital required. The Members have agreements with holders of all their outstanding common stock, whereby the Members are required to repurchase the stock in the event of a stockholder's death or retirement. The Company has agreements with the Members, whereby it will distribute to the Members capital sufficient for the Members to complete the redemption, subject to compliance with the rules of the New York Stock Exchange, Inc. The purchase price for such shares and the related units of the Company are determined by the Members' boards of directors and the Company's board of managers,respectively. During the years ended December 31, 2014 and 2013, cash distributions of Members' interests were as follows: 2014 2013 Income accumulated in prior year distributed to members during the current year $ 5,869,571 4,373,278 Income accumulated in the current year distributed to members during the current year 5,831,999 4,798,130 Repurchase of members' units for redemption of members' common stock 1,185,137 1,315,948 Total cash distributions of members' interest $ 12,886,707 10,487,356 (16) Subsequent Events The Company has evaluated subsequent events for potential recognition and/or disclosure in the December 31, 2014 financial statements through February 27, 2015, the date the financial statements were issued,noting no matters requiring disclosure. 17 Schedule 1 DAVENPORT& COMPANY LLC AND SUBSIDIARIES Computation of Net Capital under SEC Rule 15c3-1 December 31,2014 Net capital—total members' interest $ 38,380,546 Deductions and other charges: Nonallowable assets: Unsecured and partly secured accounts of customers 890,081 Investment in affiliates 1,677,590 Securities owned,not readily marketable 162,654 Office equipment, leasehold improvements,and software licenses, less accumulated depreciation and amortization 3,952,258 Other assets 6,454,167 13,136,750 Additional charges relating to security accounts: Aged fails to deliver _ Other 553,206 Net capital before haircuts on securities positions 24,690,590 Haircuts on securities: Contractual securities commitments 508,320 Bankers' acceptances,certificates of deposit,and commercial paper State and municipal government obligations 699,538 Corporate obligations 34,289 Stocks and warrants 12,619 1,254,766 Net capital $ 23,435,824 Ratio of net capital to aggregate reserve formula debits 23% Note: There are no material differences between this computation and that filed by the Company on Securities and Exchange Commission Form X-17a-5 as of December 31,2014. See accompanying report of independent registered public accounting firm. 18 Schedule 2 DAVENPORT& COMPANY LLC AND SUBSIDIARIES Computation for Determination of the Reserve Requirements under SEC Rule 15c3-3 December 31,2014 Credit balances: Customers,net of amounts related to short positions in customers' accounts offset by securities owned by the Company $ 41,428,864 Money borrowed collateralized by customer securities 39,030,304 Customers' securities failed to receive 882,714 Credit balances in Company accounts which are attributable to principal sales to customers 20,484 Market value of stock dividends, stock splits, and similar distributions receivable outstanding over 30 calendar days 25 Market value of short securities and credits in all suspense accounts over 30 calendar days 250,050 Market value of securities which are in transfer in excess of 40 calendar days and have not been confirmed to be in transfer by the transfer agent during the 40 days 250,000 Total credits 81,862,441 Debit balances: Debit balances in customers' cash and margin accounts, excluding unsecured and partly secured accounts and accounts doubtful of collection 64,394,262 Securities borrowed to effectuate short sales by customers and securities borrowed to make delivery on customers' securities failed to deliver Margin required and on deposit with the options clearing corporation for all option contracts written or purchased in customer accounts 39,030,304 103,424,566 Less 3% (3,102,737) Total SEC Rule 15c3-3 debits 100,321,829 Excess of total SEC Rule 15c3-3 debits over total credits (no funds are required to be on deposit in Special Reserve Bank Account) $ 18,459,388 Note: There are no material differences between this computation and that filed by the Company on Securities and Exchange Commission Form X-17a-5 as of and for the year ended December 31,2014. See accompanying report of independent registered public accounting firm. 19 Schedule 3 DAVENPORT& COMPANY LLC AND SUBSIDIARIES Information Relating to the Possession or Control Requirements under SEC Rule 15c3-3 December 31, 2014 1. Customers' fully paid and excess margin securities not in the Company's possession or control as of the report date(for which instructions to reduce possession or control had been issued as of the report date,but for which the required action was not taken by the Company within the time frames specified under SEC Rule 15c3-3) $ — Number of items — 2. Customers' fully paid and excess margin securities for which instructions to reduce possession or control had not been issued as of the report date,excluding items arising from"temporary lags that result from normal business operations"as permitted under SEC Rule 15c3-3 $ — Number of items See accompanying report of independent registered public accounting firm. 20 KPMG DAVENPORT & COMPANY LLC AND SUBSIDIARIES Consolidated Financial Statements and Schedules (Together with Report of Independent Registered Public Accounting Firm on Internal Control Required by SEC Rule 17a-5(g)(1)) December 31, 2013 and 2012 (With Report of Independent Registered Public Accounting Firm Thereon) These financial statements and schedules should be deemed confidential pursuant to subparagraph(e)(3) of SEC Rule 17a-5 UNITED STATES OMB APPROVAL SECURITIES AND EXCHANGE COMMISSION OMB Number:3235-0123 Washington,D.C. 20549 Expires: March 31,2016 Estimated average burden hours per response 12.00 ANNUAL AUDITED REPORT FORM X-17A-5 PART III SEC FILE NUMBER 8-17103 FACING PAGE Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder REPORT FOR THE PERIOD BEGINNING 01/01/13 AND ENDING 12/31/13 MM/DD/YY MM/DD/YY A.REGISTRANT IDEM 1HCATION NAME OF BROKER-DEALER: OFFICIAL USE ONLY Da%enport&Company LLC FIRM ID.NO. ADDRESS OF PRINCIPAL PLACE OF BUSINESS:(Do not use P.O.Box No.) 901 East Cary Street, 11th Floor Richmond (No.and Street) Virginia 23219 (City) (State) (Zip Code) NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT Robert F.Mizell (804) 780-2089 (Area Code—Telephone Number) B.ACCOUNTANT IDENTIFICATION INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* KPMG LLP (Name—if individual,state last,first,middle name) 1021 East Cary Street, Suite 2000 Richmond Virginia 23219 (Address) (City) (State) (Zip Code) CHECK ONE: aCertified Public Accountant ❑ Public Accountant ❑ Accountant not resident in United States or any of its possessions. FOR OFFICIAL USE ONLY Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement offacts and circumstances relied on as the basis for the exemption. See section 240.17a-5(e)(2). Potential persons who are to respond to the collection of information contained in this form are not required to respond SEC 1410(06-02) unless the form displays currently valid OMB control number. OATH OR AFFIRMATION I, Robert F. Mizell, swear(or affirm) that, to the best of my knowledge and belief the accompanying financial statements and supporting schedules pertaining to the firm of Davenport & Company LLC as of December 31. 2013, are true and correct. I further swear(or affirm)that neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account classified solely as that of a customer,except as follows. ,tost"_eleeeee,, #4�gtJRN•jy©roe, oftzkY 1/)-Fej— MY 0,-y CONMISS ON N'UM 3ER ;Q ti 7268235 : Signature .,� •�•i... �, •�.► Chief Financial Officer, Executive Vice L ` President Title Vara./ /3 (1 � Notary Public C.y VPc � 1v� on do� �-�t;Y►m � Mtn cAm iSSIA) tOVCCS Maly Ski ao\ - This report** contains(check all applicable boxes): Q (a) Facing Page. ❑ (b) Statement of Financial Condition. J❑ (c) Statement of Income(Loss). Q (d) Statement of Changes in Financial Condition. Q (e) Statement of Changes in Stockholders'Equity or Partners'or Sole Proprietor's Capital. ❑ (f) Statement of Changes in Liabilities Subordinated to CIaims of Creditors. O (g) Computation of Net Capital. Q (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3. Q (i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3. ❑ (j) A Reconciliation,including appropriate explanation of the Computation of Net Capital Under Rule 15c3-3 and the Computation for Determination of the Reserve Requirements Under Exhibit A Rule 15c3-3. ❑ (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of consolidation. Q (1) An Oath or Affirmation. ❑ (m) A Copy of the SIPC Supplemental Report. Q (n) A Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit. **For conditions of confidential treatment of certain portions of this filing, see section 240.17a-5(e)(3). DAVENPORT& COMPANY LLC AND SUBSIDIARIES Table of Contents Page Report of Independent Registered Public Accounting Firm 1 Consolidated Statements of Financial Condition 3 Consolidated Statements of Income 4 Consolidated Statements of Changes in Members' Interest 5 Consolidated Statements of Cash Flows 6 Notes to Consolidated Financial Statements 7 Schedules 1 Computation of Net Capital under SEC Rule 15c3-1 19 2 Computation for Determination of the Reserve Requirements under SEC Rule 15c3-3 20 3 Information Relating to the Possession or Control Requirements under SEC Rule 15c3-3 21 Independent Registered Public Accounting Firm's Report on Internal Control Required by SEC Rule 17a-5(g)(1) 22 KPMG KPMG LLP Suite 2000 1021 East Cary Street Richmond,VA 23219-4023 Report of Independent Registered Public Accounting Firm The Board of Directors Davenport& Company LLC: We have audited the accompanying consolidated financial statements of Davenport & Company LLC and its subsidiaries (the Company), which comprise the consolidated statements of financial condition as of December 31, 2013 and 2012, and the related consolidated statements of income, changes in members' interest, and cash flows for the years then ended, that are filed pursuant to Rule 17a-5 under the Securities Exchange Act of 1934, and the related notes to the consolidated financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement,whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors'judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly in all material respects, the financial position of Davenport & Company LLC and its subsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash flows for the years then ended, in accordance with U.S. generally accepted accounting principles. KPMG LLP is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative ("KPMG International"),a Swiss entity. KPMG Other Matter Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The information contained in Schedules 1, 2, and 3 is presented for purposes of additional analysis and is not a required part of the consolidated financial statements, but is supplementary information required by Rule 17a-5 under the Securities Exchange Act of 1934. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information in schedules 1, 2, and 3 has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information in Schedules 1, 2, and 3 is fairly stated in all material respects in relation to the consolidated financial statements as a whole. PrP Richmond, Virginia February 27,2014 2 DAVENPORT& COMPANY LLC AND SUBSIDIARIES Consolidated Statements of Financial Condition December 31,2013 and 2012 Assets 2013 2012 Cash and cash equivalents (note 2) $ 5,738,077 4,370,754 Cash segregated under federal and other regulations(note 3) 2 2 Deposits with clearing organizations and others 1,126,322 1,799,965 Receivable from broker-dealers and clearing organizations(note 4) 73,156 127,860 Receivable under securities borrowed agreements(note 11) 108,600 — Receivable from customers(note 5) 59,250,541 54,101,717 Receivable from noncustomers(note 5) 5,118,307 8,781,286 Marketable securities owned, at fair value(notes 6 and 12) 10,697,734 15,785,032 Furniture, equipment, software, and leasehold improvements, at cost(less accumulated depreciation and amortization of $8,684,029 in 2013 and$9,770,254 in 2012) (note 7) 4,428,912 2,704,908 Notes receivable from employees(note 2) 1,094,004 1,909,795 Prepaid expenses and other assets 13,122,338 7,436,235 $ 100,757,993 97,017,554 Liabilities and Members' Interest Short-term bank loans (note 8) $ 6,081,650 3,820,000 Drafts payable 9,224,953 11,012,377 Members' interest payable 5,888,744 4,373,686 Payable to broker-dealers and clearing organizations (note 4) 393,098 1,547,474 Payable to customers(note 5) 25,646,489 28,518,393 Payable to noncustomers(note 5) 29,818 26,193 Securities sold,not yet purchased,at market value(notes 6 and 12) 47,815 110,895 Accounts payable, accrued expenses, and other liabilities 15,940,203 10,463,258 63,252,770 59,872,276 Members' interest 37,505,223 37,145,278 Commitments and contingent liabilities(notes 11, 12, and 13) $ 100,757,993 97,017,554 See accompanying notes to consolidated financial statements. 3 DAVENPORT& COMPANY LLC AND SUBSIDIARIES Consolidated Statements of Income Years ended December 31,2013 and 2012 2013 2012 Revenues: Commissions $ 34,232,036 32,287,992 Principal transactions 4,824,408 6,630,068 Investment banking 15,016,496 17,218,639 Interest and dividends 2,410,763 2,453,698 Investment advisory fees 66,087,797 53,905,281 Other 1,936,987 2,324,043 124,508,487 114,819,721 Expenses: Employee compensation and benefits (note 10) 90,953,890 84,108,369 Floor brokerage, exchange, and clearance fees 1,897,322 2,149,272 Communications and data processing 2,694,614 2,693,451 Interest 239,520 247,564 Occupancy and equipment 5,769,980 5,644,240 Other operating expenses 12,266,287 12,015,941 113,821,613 106,858,837 Net income $ 10,686,874 7,960,884 See accompanying notes to consolidated financial statements. 4 DAVENPORT& COMPANY LLC AND SUBSIDIARIES Consolidated Statements of Changes in Members' Interest Years ended December 31,2013 and 2012 Total members' interest Balance at December 31, 2011 $ 40,968,435 Net income 7,960,884 Capital distributions (12,661,278) Capital contributions 1,672,865 Repurchase of members' interest (795,628) Balance at December 31,2012 37,145,278 Net income 10,686,874 Capital distributions (10,686,466) Capital contributions 1,675,485 Repurchase of members' interest (1,315,948) Balance at December 31,2013 $ 37,505,223 See accompanying notes to consolidated financial statements. 5 DAVENPORT& COMPANY LLC AND SUBSIDIARIES Consolidated Statements of Cash Flows Years ended December 31, 2013 and 2012 2013 2012 Cash flows from operating activities: Net income $ 10,686,874 7,960,884 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 913,460 837,039 Loss on disposal of furniture and equipment 102,232 3,169 (Increase) decrease in operating assets: Deposits with clearing organizations and others 673,643 (848,531) Receivable under securities borrowed agreements (108,600) — Net receivable from customers (8,020,728) 7,093,171 Net receivable from noncustomers 3,666,604 (3,437,346) Marketable securities owned and securities sold,not yet purchased,net 5,024,218 (5,560,769) Prepaid expenses and other assets (5,686,103) (1,064,096) Notes receivable from employees 815,791 911,764 Increase(decrease)in operating liabilities: Net payable to broker-dealers and clearing organizations (1,099,672) 1,397,240 Accounts payable, accrued expenses, and other liabilities 5,476,945 1,797,757 Net cash provided by operating activities 12,444,664 9,090,282 Cash flows from investing activity: Purchase of furniture, equipment, software, and leasehold improvements (2,744,851) (879,859) Proceeds from the sale of furniture and equipment 5,155 — Net cash used in investing activity (2,739,696) (879,859) Cash flows from financing activities: Increase(decrease)in drafts payable (1,787,424) 4,869,768 Members' capital contributions 1,675,485 1,672,865 Distributions to members (9,171,408) (10,080,633) Repurchase of member's interest (1,315,948) (795,628) Increase(decrease) in short-term bank loans 2,261,650 (2,700,000) Net cash used in financing activities (8,337,645) (7,033,628) Net increase in cash 1,367,323 1,176,795 Cash and cash equivalents at beginning of year 4,370,754 3,193,959 Cash and cash equivalents at end of year $ 5,738,077 4,370,754 Supplemental cash flow information–interest paid $ 239,520 247,564 See accompanying notes to consolidated financial statements. 6 DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2013 and 2012 (1) Organization and Nature of Business Davenport & Company LLC and Subsidiaries (the Company) is a broker-dealer registered under the Securities Exchange Act of 1934 and an investment adviser registered under the Investment Advisers Act of 1940. The Company is a member of the New York Stock Exchange, Inc. and the Financial Industry Regulatory Authority (FINRA). The Company is a limited liability company organized under the laws of the Commonwealth of Virginia. The Company is owned by Davenport & Company of Virginia, Inc., Davenport Corp., and DAVA Corp. (collectively, the Members) who have membership interests of 60%, 21%, and 19%, respectively. The liability of each Member is limited to the balances in each Member's capital account. The Company will continue indefinitely, unless dissolved earlier pursuant to the terms of the operating agreement of the Company. Davenport Financial Advisors LLC (DFA) and Davenport Trust Company (DavTrust) are wholly owned subsidiaries of Davenport & Company LLC. DFA is engaged in the appraisal of businesses and their securities in connection with estate and gift tax, equitable distribution, acquisition advisory, the purchase and sale of listed and unlisted securities, litigation support, and other purposes. The services and responsibilities of DFA are separate from those of Davenport & Company LLC, notwithstanding the fact that DFA and Davenport & Company LLC may share employees and facilities. DavTrust is a wholly owned North Carolina corporation formed in 2009 to be the trustee of Davenport's individual retirement accounts. It was capitalized in December 2009 with $1.5 million and began operations on October 1, 2011. (2) Summary of Significant Accounting Policies (a) Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company is engaged in a single line of business as a securities broker-dealer, which comprises several classes of services, including principal transactions, agency transactions, investment banking, and investment advisory services. All material intercompany balances and transactions are eliminated in consolidation. (b) Cash and Cash Equivalents All highly liquid investments with original maturities of three months or less are considered to be cash equivalents. (c) Fair Value of Financial Instruments The Company carries cash and cash equivalents, cash segregated under federal and other regulations, securities owned, and securities sold, not yet purchased at fair value. Deposits with clearing organizations and other receivables from broker-dealers and clearing organizations, receivable under securities borrowed agreements, receivable from customers, noncustomers, and employees, short-term bank loans, drafts payable, members interest payable, payable to broker-dealers and clearing organizations, payable to customers, and payable to noncustomers are recorded at their carrying amounts, which approximate fair value. The fair value of these items is not materially sensitive to shifts in market interest rates because of the limited term to maturity and/or variable interest rates of many of these instruments. 7 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31,2013 and 2012 (d) Securities Transactions Proprietary securities transactions in regular way trades are recorded on the settlement date, which is not materially different from the trade date. Profit and loss arising from all securities transactions entered into for the account and risk of the Company are also recorded on the settlement date, which is not materially different from the trade date. Customers' securities transactions are reported on a settlement date basis with related commission income and expenses reported on a trade-date basis. Marketable securities owned are recorded at fair value, which is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between willing market participants on the remeasurement date. The fair value for certain financial instruments is derived using pricing models and other valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company's financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available will generally have a higher degree of price transparency than financial instruments that are thinly traded or not quoted. In accordance with generally accepted accounting principles GAAP, the criteria used to determine whether the market for a financial instrument is active or inactive is based on the particular asset or liability. For equity securities, the Company's definition of actively traded is based on average daily volume and other market trading statistics. The Company has determined the market for certain other types of financial instruments, including certain auction rate preferred securities to be inactive as of both December 31, 2013 and 2012. As a result, the valuation of these financial instruments included management judgment in determining the relevance and reliability of market information available. The Company considered the inactivity of the market to be evidenced by several factors, including a continued decreased price transparency caused by decreased volume of trades relative to historical levels, stale transaction prices, and transaction prices that varied significantly either over time or among market makers. When instruments are traded in secondary markets and quoted market prices do not exist for such securities, the Company utilizes valuation techniques including trader knowledge of the market to estimate fair value. Valuation techniques may also rely on other observable inputs such as yield curves, interest rates and expected principal repayments and default probabilities.Instruments valued using these inputs are typically classified within Level 2 of the fair value hierarchy. Examples include certain municipal debt securities, and corporate debt securities. The Company utilizes prices from independent services to corroborate its estimate of fair value. Depending upon the type of security, the pricing service may provide a listed price or use other methods including broker—dealer price quotations. Positions in illiquid securities that do not have readily determinable fair values require significant judgment or estimation. For these securities, which include certain auction rate securities and non-publicly traded equity securities,the Company uses quotes from secondary market makers to determine fair value. Securities valued using these techniques are classified within Level 3 of the fair value hierarchy. 8 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31,2013 and 2012 (e) Investment Banking Investment banking revenues include gains, losses, and fees, net of syndicate expenses, arising from securities offerings in which the Company acts as an underwriter or agent. Investment banking revenues also include fees earned from providing merger and acquisition and financial restructuring advisory services and financial advisor fees related to services provided to tax-exempt issues. Investment banking management fees are recorded on the settlement date. Also, sales concessions are recorded on settlement date and underwriting fees are recognized at the time the underwriting is completed and the income is reasonably determinable. (fl Investment Advisory Services Fee income for investment advisory services is recorded on the accrual basis based on the market value of managed assets. Fees are computed and collected quarterly based upon fee schedules and average month-end portfolio values. (g) Income Taxes Income taxes are not reflected in the accompanying consolidated financial statements as the responsibility for income taxes is that of the Members and not of the Company. One subsidiary, DavTrust, is a C corporation and is responsible for its own income taxes. DavTrust had income tax expense of$7,000 and $10,300 for 2013 and 2012, respectively, and an income tax asset of$3,400 and accrued income tax liability of$5,900 as of December 31, 2013 and 2012,respectively. Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC)740-10 related to Accounting for Uncertain Tax Positions requires that a tax position be recognized or derecognized based on a more likely than not threshold. This applies to positions taken or expected to be taken on a tax return. The Company analyzed filing positions in all of the federal and state jurisdictions where they are required to file income tax returns, including its status as a pass-through entity. The only periods subject to examination for federal and state tax returns are 2010 through 2013. The Company believes its income tax filing positions, including its status as a pass-through entity, would be sustained on audit and does not anticipate any adjustments that would result in a material change to its consolidated financial position. Therefore, no reserves for uncertain tax positions,nor interest and penalties,have been recorded as of December 31, 2013 and 2012. (h) Furniture,Equipment,Software, and Leasehold Improvements The Company records depreciation and amortization on the straight-line method based on estimated useful lives of two years for software and the related software licenses, four years for quotation equipment, six years for data processing and communications equipment, and ten years for furniture and fixtures. Leasehold improvements are amortized over the lesser of the estimated useful lives of the improvements or the terms of the related leases. (i) Drafts Payable Drafts payable represent amounts drawn by the Company against a bank. 9 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2013 and 2012 (j) Notes Receivable from Employees From time to time, the Company issues loans to employees. Some of these loans are nonnegotiable and forgiven over a predetermined period of time on a schedule determined by the Company, as long as the employee remains employed by the Company. Forgiveness of the principal and interest amounts will appear as noncash compensation to the employee in each monthly paycheck. (k) Use of Estimates The preparation of consolidated financial statements in conformity with U.S.generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to estimates and assumptions include the fair value of investments and other contingencies. (3) Cash Segregated under Federal and Other Regulations Cash of$2 at December 31, 2013 and 2012 has been segregated in a special reserve bank account for the benefit of customers under Rule 15c3-3 of the Securities and Exchange Commission(SEC). (4) Receivable from and Payable to Broker-Dealers and Clearing Organizations Amounts receivable from and payable to broker-dealers and clearing organizations at December 31, 2013 and 2012,consisted of the following: 2013 Receivable Payable Securities failed to deliver/receive $ 11,598 6,310 Amounts receivable from/payable to clearing broker — 7,200 Amounts receivable from/payable to clearing organizations — 340,623 Amounts receivable from/payable to other broker 61,558 38,965 $ 73,156 393,098 2012 Receivable Payable Securities failed to deliver/receive $ 107,809 842,373 Amounts receivable from/payable to clearing broker — 7,269 Amounts receivable from/payable to clearing organizations — 695,190 Amounts receivable from/payable to other broker 20,051 2,642 $ 127,860 1,547,474 10 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2013 and 2012 The Company clears certain of its transactions through another broker-dealer on an omnibus basis. The amount payable to the clearing broker relates to the aforementioned transactions and is collateralized by securities owned by the Company. (5) Receivable from and Payable to Customers and Noncustomers Amounts receivable from and payable to customers and noncustomers (principally, directors of the Company) include amounts due on cash and margin transactions. Securities owned by customers and noncustomers are held as collateral for receivables. Such collateral is not reflected in the consolidated financial statements and may be repledged by the Company. See further discussion of collateral at notes 8 and 12. (6) Securities Owned and Securities Sold,Not Yet Purchased (a) Securities owned and securities sold, not yet purchased, consisted of trading securities at December 31, 2013 and 2012 as follows: 2013 2012 Owned: Marketable securities, at market value: State and municipal obligations (primarily located in the Commonwealth of Virginia) $ 9,937,454 14,023,264 Auction rate preferred securities 90,000 90,000 Certificates of deposit 100,000 Corporate bonds 500,593 270,238 Corporate stocks 169,687 1,301,530 $ 10,697,734 15,785,032 Sold,not yet purchased at market value: Corporate stocks $ 47,815 110,895 $ 47,815 110,895 (b) FASB ASC 820-10 Fair Value Measurement establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets that the Company has the ability to access at the measurement date. • Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly. • Level 3 inputs are unobservable inputs. 11 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2013 and 2012 The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The following table presents assets and liabilities that are measured at fair value on a recurring basis at December 31,2013: Fair value measurements at reporting date using Quoted prices in active Significant markets for other Significant identical observable unobservable December 31, assets inputs inputs 2013 (Level 1) (Level 2) (Level 3) Assets: Trading securities: State and municipal obligations $ 9,937,454 — 9,937,454 Auction rate preferred securities 90,000 — — 90,000 Corporate bonds 500,593 — 500,593 Corporate stocks 169,687 8,019 161,668 Total $ 10,697,734 8,019 10,438,047 251,668 Liabilities: Securities sold not yet purchased: Corporate stocks $ 47,815 47,815 — — $ 47,815 47,815 12 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2013 and 2012 The following table presents assets and liabilities that are measured at fair value on a recurring basis at December 31,2012: Fair value measurements at reporting date using Quoted prices in active Significant markets for other Significant identical observable unobservable December 31, assets inputs inputs 2012 (Level 1) (Level 2) (Level 3) Assets: Trading securities: State and municipal obligations $ 14,023,264 — 14,023,264 — Auction rate preferred securities 90,000 — — 90,000 Certificates of deposit 100,000 100,000 —Corporate bonds 270,238 — 270,238 — Corporate stocks 1,301,530 1,141,644 — 159,886 Total $ 15,785,032 1,241,644 14,293,502 249,886 Liabilities: Securities sold not yet purchased: Corporate stocks $ 110,895 110,895 — — $ 110,895 110,895 — — The following table summarizes Level 3 assets measured at fair value on a recurring basis for the year ended December 31,2013: Assets: Beginning balances as of January 1,2013 $ 249,886 Total realized and unrealized gains included in net income Transfer into Level 3 1,782 Ending balance as of December 31,2013 $ 251,668 Net unrealized gains included in net income for the period relating to assets held at December 31,2013 $ — There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy during the year ended December 31,2013. 13 (Continued) DAVENPORT & COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2013 and 2012 The following table summarizes Level 3 assets measured at fair value on a recurring basis for the year ended December 31,2012: Assets: Beginning balances as of January 1, 2012 $ 194,679 Total realized and unrealized gains included in net income 2,500 Transfer into Level 3 52,707 Ending balance as of December 31, 2012 $ 249,886 Net unrealized gains included in net income for the period relating to assets held at December 31, 2012 $ 2,500 There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy during the year ended December 31,2012. The Company had no assets or liabilities that were measured at fair value on a nonrecurring basis as of December 31,2013 or 2012. (7) Furniture,Equipment,Software,and Leasehold Improvements Furniture, equipment, software, and leasehold improvements are summarized as follows: 2013 2012 Furniture $ 3,794,152 3,701,765 Equipment 4,575,362 4,636,548 Software 971,417 866,350 Leasehold improvements 3,772,010 3,270,499 13,112,941 12,475,162 Less accumulated depreciation and amortization 8,684,029 9,770,254 Total furniture, equipment, software, and leasehold improvements,net $ 4,428,912 2,704,908 (8) Short-Term Bank Loans Short-term bank loans are used to finance loans to customers and noncustomers who have purchased securities under margin agreements and to finance trading and investment securities. These loans are generally made at the short-term collateralized borrowing rate (1.10% and 1.15% at December 31, 2013 and December 31, 2012, respectively) and are payable on demand. In addition, the Company has a $1 million unsecured line of credit with a commercial bank. The interest rate on this line of credit is prime (3.25%at December 31, 2013 and 2012)and any borrowings are payable upon demand. 14 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31,2013 and 2012 Short-term bank loans and related collateral outstanding at December 31,2013 and 2012 were as follows: Loans Collateral 2013 2012 2013 2012 Collateralized by company securities $ 5,981,650 3,720,000 8,466,702 12,436,672 Collateralized by customer securities — 4,931,211 Collateralized by noncustomer securities — — 2,116,700 — Unsecured line of credit 100,000 100,000 —$ 6,081,650 3,820,000 15,514,613 12,436,672 (9) Subordinated Borrowings The Company has approval from the NYSE for a Revolving Note and Cash Subordination Agreement (the Agreement)with a bank for up to $7,500,000 at prime (3.25% at December 31, 2013 and 2012) + 1%. The Company must pay a commitment fee of 1/8% for any unused portion of the Agreement. There were no amounts outstanding under the Agreement at December 31,2013 or 2012,respectively. The subordinated borrowings are available in computing net capital under the SEC's Uniform Net Capital Rule (Rule 15c3-1). To the extent that such borrowings are required for the Company's continued compliance with minimum net capital requirements,they may not be repaid. (10) Employee Benefit Plans The Company has a defined-contribution profit sharing plan and a 401(k) plan covering substantially all employees. Contributions to the profit sharing plan are made solely at the discretion of the board of managers. Profit sharing contributions approximated $3,754,000 and $3,708,000 for the years ended December 31, 2013 and 2012, respectively. Participants in the 401(k) plan are allowed to make tax-deferred contributions under Section 401(k) of the Internal Revenue Code and require the Company to make a"Safe Harbor" contribution to the plan equal to 3% of compensation. The 401(k)plan expense was approximately$1,891,000 and$1,690,000 for the years ended December 31,2013 and 2012,respectively. (11) Securities Borrowing Activities Securities borrowed are generally reported as collateralized financing transactions and are recorded in the accompanying consolidated Statements of Financial Condition at the amount of cash collateral advanced. Securities borrowed transactions require the Company to deposit cash with the lender. The Company monitors the market value of securities borrowed on a daily basis, with additional collateral obtained or refunded as necessary. Cash deposited with lenders under securities borrowing agreements totaled $108,600 and $0 at December 31, 2013 and 2012, respectively. The fair value of the underlying securities used by the Company 15 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31,2013 and 2012 primarily to effectuate short sales by customers approximated $106,556 and $0 at December 31, 2013 and 2012,respectively. (12) Financial Instruments In the normal course of its business, the Company enters into various transactions involving off-balance-sheet financial instruments. These financial instruments include the purchase and sale of securities pursuant to new issuances. These transactions are used to meet the needs of customers, conduct trading activities, and manage market risks and are, therefore, subject to varying degrees of market and credit risk. In addition,the Company has sold securities that it does not currently own and will,therefore,be obligated to purchase such securities at a future date. The Company has recorded these obligations in the consolidated financial statements at the market values of the related securities and will incur a loss if the market value of the securities increases subsequent to year-end. In the normal course of business,the Company's customer activities involve the execution, settlement, and financing of various customer securities transactions. These activities may expose the Company to off-balance-sheet risk in the event the customer or other broker is unable to fulfill its contracted obligations and the Company has to purchase or sell the financial instrument underlying the contract at a loss. The Company's customer securities activities are transacted on either a cash or margin basis. In margin transactions,the Company extends credit to its customers, subject to various regulatory and internal margin requirements, collateralized by cash and securities in the customers' accounts. In connection with these activities, the Company executes and clears customer transactions involving the sale of securities not yet purchased, substantially all of which are transacted on a margin basis subject to individual exchange regulations. Such transaction may expose the Company to significant off-balance-sheet risk in the event margin requirements are not sufficient to fully cover losses that customers may incur. In the event the customer fails to satisfy its obligations, the Company may be required to purchase or sell financial instruments at prevailing market prices to fulfill the customer's obligations. The Company seeks to control the risks associated with its customer activities by requiring customers to maintain margin collateral in compliance with various regulatory and internal guidelines. The Company monitors required margin levels daily and, pursuant to such guidelines, requires the customer to deposit additional collateral or to reduce positions when necessary. The Company's customer financing and securities settlement activities require the Company to pledge customer securities as collateral in support of various secured financing sources such as bank loans and securities loaned. In the event the counterparty is unable to meet its contractual obligation to return customer securities pledged as collateral, the Company may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy its customer obligations. The Company controls this risk by monitoring the market value of securities pledged on a daily basis and by requiring adjustments of collateral levels in the event of excess market exposure. In addition, the Company establishes credit limits for such activities and monitors compliance on a daily basis. The Company has a concentration of credit risk in the Commonwealth of Virginia since a significant portion of its customer base resides in that state. This is mitigated through the Company's policy of 16 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31,2013 and 2012 maintaining custody of collateral for all of its margin account customers in accordance with various regulatory and internal guidelines. (13) Commitments and Contingencies The Company leases its office space and certain office equipment and software under operating leases expiring at various dates through 2022. Minimum future rental payments required under such leases that have initial or remaining noncancelable lease terms in excess of one year at December 31, 2013 are as follows: 2014 $ 3,252,653 2015 3,036,712 2016 2,934,153 2017 2,892,684 2018 2,819,640 2019 and thereafter 6,912,108 Total minimum lease payments $ 21,847,950 Rental expense was approximately $3,631,000 and$3,901,000 for the years ended December 31, 2013 and 2012,respectively. The Company is a party to certain legal and regulatory actions arising in the normal course of business. Management of the Company, after consultation with outside legal counsel, believes that the resolution of these various actions will not result in any material adverse effects on the consolidated financial position, results of operations, or liquidity of the Company. (14) Variable Interest Entities(VIEs) The Company has determined that several entities in which it is the managing member meets the definition of a VIE. However, Davenport is not the primary beneficiary and accordingly does not consolidate the funds under FASB ASC 810, Consolidation. These entities have assets of approximately$382,480,000 and $262,820,000 at December 31, 2013 and 2012, respectively. Management fees and incentive allocations received by the Company from these entities were approximately $8,594,000 and $2,949,000 for the years ended December 31,2013 and 2012,respectively. 17 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31,2013 and 2012 (15) Net Capital Requirements and Capital Redemption Agreement The Company is subject to the SEC Rule 15c3-1 and the New York Stock Exchange, Inc., which requires the maintenance of minimum net capital. The Company has elected to use the alternative method, permitted by the rule, which requires that the Company and its subsidiaries maintain minimum net capital, as defined, equal to the greater of $250,000 or 2% of aggregate debit balances arising from customer transactions. The net capital rules also provide that equity capital may not be withdrawn or cash distributions paid if resulting net capital would be less than 5% of aggregate debits.At December 31,2013, the Company's net capital, as defined, of $22,601,085 was 32% of aggregate debit balances and was $21,156,114 in excess of the minimum net capital required. At December 31, 2012, the Company's net capital, as defined, of$23,096,967 was 36% of aggregate debit balances and was $21,790,991 in excess of the minimum net capital required. The Members have agreements with holders of all their outstanding common stock, whereby the Members are required to repurchase the stock in the event of a stockholder's death or retirement. The Company has agreements with the Members, whereby it will distribute to the Members capital sufficient for the Members to complete the redemption, subject to compliance with the rules of the New York Stock Exchange, Inc. The purchase price for such shares and the related units of the Company are determined by the Members' boards of directors and the Company's board of managers,respectively. During the years ended December 31, 2013 and 2012, cash distributions of Members' interests were as follows: 2013 2012 Income accumulated in prior year distributed to members during the current year $ 4,373,278 2,929,847 Income accumulated in the current year distributed to members during the current year 4,798,130 7,150,786 Repurchase of members' units for redemption of members' common stock 1,315,948 795,628 Total cash distributions of members' interest $ 10,487,356 10,876,261 (16) Subsequent Events The Company has evaluated subsequent events for potential recognition and/or disclosure in the December 31, 2013 financial statements through February 27, 2014, the date the financial statements were issued,noting no matters requiring disclosure. 18 Schedule 1 DAVENPORT& COMPANY LLC AND SUBSIDIARIES Computation of Net Capital under SEC Rule 15c3-1 December 31, 2013 Net capital—total members' interest $ 37,505,223 Deductions and other charges: Nonallowable assets: Unsecured and partly secured accounts of customers 801,714 Notes receivable from members 1,714,848 Securities owned,not readily marketable 161,668 Office equipment, leasehold improvements, and software licenses, less accumulated depreciation and amortization 4,428,912 Other assets 6,221,064 13,328,206 Additional charges relating to security accounts: Aged fails to deliver Other 630,795 Net capital before haircuts on securities positions 23,546,222 Haircuts on securities: Contractual securities commitments 295,230 Bankers' acceptances, certificates of deposit, and commercial paper State and municipal government obligations 581,230 Corporate obligations 59,468 Stocks and warrants 9,209 945,137 Net capital $ 22,601,085 Ratio of net capital to aggregate reserve formula debits 32% Note: There are no material differences between this computation and that filed by the Company on Securities and Exchange Commission Form X-17a-5 as of December 31,2013. See accompanying report of independent registered public accounting firm. 19 Schedule 2 DAVENPORT& COMPANY LLC AND SUBSIDIARIES Computation for Determination of the Reserve Requirements under SEC Rule 15c3-3 December 31,2013 Credit balances: Customers,net of amounts related to short positions in customers' accounts offset by securities owned by the Company $ 34,980,042 Money borrowed collateralized by customer securities 18,568,401 Customers' securities failed to receive 354,133 Credit balances in Company accounts which are attributable to principal sales to customers 47,815 Market value of stock dividends, stock splits, and similar distributions receivable outstanding over 30 calendar days 85,087 Market value of short securities and credits in all suspense accounts over 30 calendar days 250,000 Market value of securities which are in transfer in excess of 40 calendar days and have not been confirmed to be in transfer by the transfer agent during the 40 days 250,000 Total credits 54,535,478 Debit balances: Debit balances in customers' cash and margin accounts,excluding unsecured and partly secured accounts and accounts doubtful of collection 53,571,533 Securities borrowed to effectuate short sales by customers and securities borrowed to make delivery on customers' securities failed to deliver 108,600 Margin required and on deposit with the options clearing corporation for all option contracts written or purchased in customer accounts 18,568,401 72,248,534 Less 3% (2,167,456) Total SEC Rule 15c3-3 debits 70,081,078 Excess of total SEC Rule 15c3-3 debits over total credits(no funds are required to be on deposit in Special Reserve Bank Account) $ 15,545,600 Note: There are no material differences between this computation and that filed by the Company on Securities and Exchange Commission Form X-17a-5 as of December 31,2013. See accompanying report of independent registered public accounting firm. 20 Schedule 3 DAVENPORT& COMPANY LLC AND SUBSIDIARIES Information Relating to the Possession or Control Requirements under SEC Rule 15c3-3 December 31, 2013 1. Customers' fully paid and excess margin securities not in the Company's possession or control as of the report date(for which instructions to reduce possession or control had been issued as of the report date,but for which the required action was not taken by the Company within the time frames specified under SEC Rule 15c3-3) $ — Number of items 2. Customers' fully paid and excess margin securities for which instructions to reduce possession or control had not been issued as of the report date, excluding items arising from"temporary lags that result from normal business operations"as permitted under SEC Rule 15c3-3 $ — Number of items — See accompanying report of independent registered public accounting firm. 21 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S REPORT ON INTERNAL CONTROL REQUIRED BY SEC RULE 17A-5(G)(1) KPMG KPMG LLP Suite 2000 1021 East Cary Street Richmond,VA 23219-4023 Independent Registered Public Accounting Firm's Report on Internal Control Required by SEC Rule 17a-5(g)(1) The Board of Directors Davenport&Company LLC: In planning and performing our audit of the consolidated financial statements of Davenport & Company LLC and subsidiaries (the Company) as of and for the year ended December 31, 2013, in accordance with auditing standards generally accepted in the United States of America, we considered the Company's internal control over financial reporting (internal control), as a basis for designing our auditing procedures for the purposes of expressing our opinion on the consolidated financial statements,but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we do not express an opinion on the effectiveness of the Company's internal control. Also, as required by Rule 17a-5(g)(1) of the Securities and Exchange Commission(SEC), we have made a study of the practices and procedures followed by the Company, including consideration of control activities for safeguarding securities. This study included tests of compliance with such practices and procedures that we considered relevant to the objectives stated in Rule 17a-5(g)in the following: 1. Making the periodic computations of aggregate indebtedness (or aggregate debits) and net capital under Rule 17a-3(a)(11) and the reserve required by Rule 15c3-3(e); 2. Making the quarterly securities examinations, counts, verifications, and comparisons, and the recordation of differences required by Rule 17a-13; 3. Complying with the requirements for prompt payment for securities under Section 8 of Federal Reserve Regulation T of the Board of Governors of the Federal Reserve System; and 4. Obtaining and maintaining physical possession or control of all fully paid and excess margin securities of customers as required by Rule 15c3-3. The management of the Company is responsible for establishing and maintaining internal control and the practices and procedures referred to in the preceding paragraph. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls, and of the practices and procedures referred to in the preceding paragraph, and to assess whether those practices and procedures can be expected to achieve the SEC's previously mentioned objectives. Two of the objectives of internal control and the practices and procedures are to provide management with reasonable but not absolute assurance that assets for which the Company has responsibility are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles. Rule 17a-5(g) lists additional objectives of the practices and procedures listed in the preceding paragraph. 22 KPMG LLP is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative ("KPMG International"),a Swiss entity. KPMG Because of inherent limitations in internal control and the practices and procedures referred to above, error or fraud may occur and not be detected. Also, projection of any evaluation of them to future periods is subject to the risk that they may become inadequate because of changes in conditions or that the effectiveness of their design and operation may deteriorate. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Company's financial statements will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control was for the limited purpose described in the first and second paragraphs and would not necessarily identify all deficiencies in internal control that might be material weaknesses. We did not identify any deficiencies in internal control and control activities for safeguarding securities that we consider to be material weaknesses, as defined previously. We understand that practices and procedures that accomplish the objectives referred to in the second paragraph of this report are considered by the SEC to be adequate for its purposes in accordance with the Securities Exchange Act of 1934 and related regulations, and that practices and procedures that do not accomplish such objectives in all material respects indicate a material inadequacy for such purposes. Based on this understanding and on our study, we believe that the Company's practices and procedures, as described in the second paragraph of this report, were adequate at December 31, 2013 to meet the SEC's objectives. This report is intended solely for the information and use of the Board of Directors, management, the SEC, the Financial Industry Regulatory Authority, Inc., and other regulatory agencies that rely on Rule 17a-5(g) under the Securities Exchange Act of 1934 in their regulation of registered broker-dealers, and is not intended to be and should not be used by anyone other than these specified parties. <P11/(Cz- LEP Richmond, Virginia February 27,2014 23 KPMG DAVENPORT & COMPANY LLC AND SUBSIDIARIES Consolidated Statements of Financial Condition (Together with Report of Independent Registered Public Accounting Firm on Internal Control Required by SEC Rule 17a-5(g)(1)) December 31, 2012 and 2011 (With Report of Independent Registered Public Accounting Firm Thereon) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Table of Contents Page Report of Independent Registered Public Accounting Firm 1 Consolidated Statements of Financial Condition 2 Notes to Consolidated Statements of Financial Condition 3 Independent Registered Public Accounting Firm's Report on Internal Control Required by SEC Rule 17a-5(g)(1) 15 KPMG P/ 11 KPIVEG LLP Suite 2000 1021 East Cary Street Richmond,VA 23219-4023 Report of Independent Registered Public Accounting Firm The Board of Directors Davenport&Company LLC: We have audited the accompanying consolidated statements of financial condition of Davenport & Company LLC and its subsidiaries as of December 31,2012 and 2011,that are filed pursuant to Rule 17a-5 under the Securities Exchange Act of 1934 and the related notes to the consolidated statements of financial condition(the financial statements). Management's Responsibility for the Financial Statement Management is responsible for the preparation and fair presentation of these financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that is free from material misstatement,whether due to fraud or error. Auditors'Responsibility Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America.Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly,we express no such opinion.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion,the financial statements referred to above present fairly in all material respects,the financial position of Davenport& Company and its subsidiaries as of December 31, 2012 and 2011, in accordance with U.S.generally accepted accounting Ki-PiV(G. LLP Richmond,Virginia February 26,2013 KPMG LLP is a Delaware limited liability partnership. the U.S.member firm of KPMG international Cooperative ("KPMG International"),a Swiss entity. DAVENPORT&COMPANY LLC AND SUBSIDIARIES Consolidated Statements of Financial Condition December 31,2012 and 2011 Assets 2012 2011 Cash and cash equivalents(note 2) $ 4,370,754 3,193,959 Cash segregated under federal and other regulations (note 3) 2 2 Deposits with clearing organizations and others 1,799,965 951,434 Receivable from broker-dealers and clearing organizations(note 4) 127,860 808,115 Receivable from customers(note 5) 54,101,717 53,704,073 Receivable from noncustomers(note 5) 8,781,286 5,377,608 Marketable securities owned, at fair value(notes 6 and 10) 15,785,032 10,124,472 Furniture,equipment, software,and leasehold improvements,at cost(less accumulated depreciation and amortization of $9,770,254 in 2012 and$12,718,898 in 2011)(note 7) 2,704,908 2,665,257 Notes receivable from employees(note 2) 1,909,795 2,821,559 Prepaid expenses and other assets 7,436,235 6,372,139 $ 97,017,554 86,018,618 Liabilities and Members'Interest Short-term bank loans(note 8) $ 3,820,000 6,520,000 Drafts payable 11,012,377 6,142,609 Members' interest payable 4,373,686 1,793,041 Payable to broker-dealers and clearing organizations (note 4) 1,547,474 830,489 Payable to customers(note 5) 28,518,393 21,027,578 Payable to noncustomers (note 5) 26,193 59,861 Securities sold,not yet purchased,at market value(notes 6 and 10) 110,895 11,104 Accounts payable,accrued expenses,and other liabilities 10,463,258 8,665,501 59,872,276 45,050,183 Members' interest 37,145,278 40,968,435 Commitments and contingent liabilities(notes 10 and 11) $ 97,017,554 86,018,618 See accompanying notes to consolidated statements of financial condition. 2 DAVENPORT&COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Statements of Financial Condition December 31,2012 and 2011 (I) Organization and Nature of Business Davenport & Company LLC and Subsidiaries (the Company) is a broker-dealer registered under the Securities Exchange Act of 1934 and an investment adviser registered under the Investment Advisers Act of 1940. The Company is a member of the New York Stock Exchange, Inc. and the Financial Industry Regulatory Authority (FINRA). The Company is a limited liability company organized under the laws of the Commonwealth of Virginia. The Company is owned by Davenport & Company of Virginia, Inc., Davenport Corp., and DAVA Corp. (collectively, the Members) who have membership interests of 62%, 20%, and 18%, respectively. The liability of each Member is limited to the balances in each Member's capital account. The Company will continue indefinitely, unless dissolved earlier pursuant to the terms of the operating agreement of the Company. Davenport Financial Advisors LLC (DFA) and Davenport Trust Company (DavTrust) are wholly owned subsidiaries of Davenport & Company LLC. DFA is engaged in the appraisal of businesses and their securities in connection with estate and gift tax, equitable distribution, acquisition advisory, the purchase and sale of listed and unlisted securities, litigation support, and other purposes. The services and responsibilities of DFA are separate from those of Davenport & Company LLC, notwithstanding the fact that DFA and Davenport & Company LLC may share employees and facilities. DavTrust is a wholly owned North Carolina corporation formed in 2009 to be the trustee of Davenport's individual retirement accounts. It was capitalized in December 2009 with $1.5 million and began operations on October 1,2011. (2) Summary of Significant Accounting Policies (a) Basis of Presentation The consolidated statements of financial condition include the accounts of the Company and its wholly owned subsidiaries. The Company is engaged in a single line of business as a securities broker-dealer, which comprises several classes of services, including principal transactions, agency transactions, investment banking, and investment advisory services. All material intercompany balances and transactions are eliminated in consolidation. (b) Cash and Cash Equivalents All highly liquid investments with original maturities of three months or less are considered to be cash equivalents. (c) Fair Value of Financial Instruments The Company carries cash and cash equivalents,cash segregated under federal and other regulations, securities owned, and securities sold, not yet purchased at fair value. Deposits with clearing organizations and other receivables from brokers-dealers and clearing organizations, receivable from customers, noncustomers, and employees, short-term bank loans, drafts payable, members interest payable, payable to brokers-dealers and clearing organizations,payable to customers, and payable to noncustomers are recorded at their carrying amounts,which approximate fair value.The fair value of these items is not materially sensitive to shifts in market interest rates because of the limited term to maturity and/or variable interest rates of many of these instruments. 3 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Statements of Financial Condition December 31,2012 and 2011 (d) Securities Transactions Proprietary securities transactions and customers' securities transactions in regular way trades are recorded on the settlement date,which is not materially different from the trade date. Marketable securities owned are recorded at fair value which is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between willing market participants on the remeasurement date. The fair value for certain financial instruments is derived using pricing models and other valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company's financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available will generally have a higher degree of price transparency than financial instruments that are thinly traded or not quoted. In accordance with GAAP,the criteria used to determine whether the market for a financial instrument is active or inactive is based on the particular asset or liability.For equity securities,the Company's definition of actively traded is based on average daily volume and other market trading statistics. The Company has determined the market for certain other types of financial instruments, including certain auction rate preferred securities to be inactive as of both December 31, 2012 and 2011. As a result,the valuation of these financial instruments included management judgment in determining the relevance and reliability of market information available. The Company considered the inactivity of the market to be evidenced by several factors, including a continued decreased price transparency caused by decreased volume of trades relative to historical levels, stale transaction prices, and transaction prices that varied significantly either over time or among market makers. When instruments are traded in secondary markets and quoted market prices do not exist for such securities, the Company utilizes valuation techniques including trader knowledge of the market to estimate fair value. Valuation techniques may also rely on other observable inputs such as yield curves,interest rates and expected principal repayments and default probabilities.Instruments valued using these inputs are typically classified within Level 2 of the fair value hierarchy. Examples include certain municipal debt securities, and corporate debt securities. The Company utilizes prices from independent services to corroborate its estimate of fair value. Depending upon the type of security, the pricing service may provide a listed price or use other methods including broker-dealer price quotations. Positions in illiquid securities that do not have readily determinable fair values require significant judgment or estimation. For these securities, which include certain auction rate securities, the Company uses quotes from secondary market makers to determine fair value. Securities valued using these techniques are classified within Level 3 of the fair value hierarchy. (e) Income Taxes Income taxes are not reflected in the accompanying consolidated statements of financial condition as the responsibility for income taxes is that of the Members and not of the Company. One subsidiary, DavTrust, is a C corporation and is responsible for its own income taxes. DavTrust had income tax liability of$5,900 and$4,246 as of December 31,2012 and 2011,respectively. 4 (Continued) DAVENPORT&COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Statements of Financial Condition December 31,2012 and 2011 Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC)740-10, related to Accounting for Uncertain Tax Positions requires that a tax position be recognized or derecognized based on a more likely than not threshold. This applies to positions taken or expected to be taken on a tax return. The Company analyzed filing positions in all of the federal and state jurisdictions where they are required to file income tax returns,including its status as a pass-through entity. The only periods subject to examination for federal and state tax returns are 2008 through 2012. The Company believes its income tax filing positions, including its status as a pass-through entity, would be sustained on audit and does not anticipate any adjustments that would result in a material change to its consolidated financial position. Therefore, no reserves for uncertain tax positions,nor interest and penalties,have been recorded as of December 31,2012 and 2011. (f) Furniture,Equipment,Software,and Leasehold Improvements The Company records depreciation and amortization on the straight-line method based on estimated useful lives of two years for software and the related software licenses, four years for quotation equipment, six years for data processing and communications equipment, and ten years for furniture and fixtures. Leasehold improvements are amortized over the lesser of the estimated useful lives of the improvements or the terms of the related leases. (g) Drafts Payable Drafts payable represent amounts drawn by the Company against a bank. (h) Notes Receivable from Employees From time to time, the Company issues loans to employees. Some of these loans are nonnegotiable and forgiven over a predetermined period of time on a schedule determined by the Company, as long as the employee remains employed by the Company. Forgiveness of the principal and interest amounts will appear as noncash compensation to the employee in each monthly paycheck. (i) Use of Estimates The preparation of consolidated statements of financial condition in conformity with U.S.generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated statements of financial condition. Actual results could differ from those estimates. Significant items subject to estimates and assumptions include the fair value of investments and other contingencies. (3) Cash Segregated under Federal and Other Regulations Cash of$2 at December 31, 2012 and 2011, has been segregated in a special reserve bank account for the benefit of customers under Rule 15c3-3 of the Securities and Exchange Commission(SEC). 5 (Continued) DAVENPORT&COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Statements of Financial Condition December 31,2012 and 2011 (4) Receivable from and Payable to Broker-Dealers and Clearing Organizations Amounts receivable from and payable to broker-dealers and clearing organizations at December 31, 2012 and 2011, consisted of the following: 2012 Receivable Payable Securities failed to deliver/receive $ 107,809 842,373 Amounts receivable from/payable to clearing broker -- 7,269 Amounts receivable from/payable to clearing organizations — 695,190 Amounts receivable from/payable to other broker 20,051 2,642 $ 127,860 1,547,474 2011 Receivable Payable Securities failed to deliver/receive $ 132,198 444,220 Amounts receivable from/payable to clearing broker — 78,504 Amounts receivable from/payable to clearing organizations — 305,727 Amounts receivable from/payable to other broker 675,917 2,038 $ 808,115 830,489 The Company clears certain of its transactions through another broker-dealer on an omnibus basis. The amount payable to the clearing broker relates to the aforementioned transactions and is collateralized by securities owned by the Company. (5) Receivable from and Payable to Customers and Noncustomers Amounts receivable from and payable to customers and noncustomers (principally, directors of the Company) include amounts due on cash and margin transactions. Securities owned by customers and noncustomers are held as collateral for receivables. Such collateral is not reflected in the consolidated statements of financial condition and may be repledged by the Company. See further discussion of collateral at notes 8 and 10. 6 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Statements of Financial Condition December 31,2012 and 2011 (6) Securities Owned and Securities Sold,Not Yet Purchased (a) Securities owned and securities sold, not yet purchased, consisted of trading securities at December 31,2012 and 2011 as follows: 2012 2011 Owned: Marketable securities, at market value: State and municipal obligations(primarily located in the Commonwealth of Virginia) $ 14,023,264 8,896,571 Auction rate preferred securities 90,000 112,500 Certificates of deposit 100,000 U.S. Treasuries — 749,250 Corporate bonds 270,238 264,034 Corporate stocks 1,301,530 102,117 $ 15,785,032 10,124,472 Sold,not yet purchased at market value: Corporate stocks $ 110,895 11,104 $ 110,895 11,104 (b) FASB ASC 820-10 Fair Value Measurement establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets that the Company has the ability to access at the measurement date. • Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly. • Level 3 inputs are unobservable inputs. The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. 7 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Statements of Financial Condition December 31,2012 and 2011 The following table presents assets and liabilities that are measured at fair value on a recurring basis at December 31,2012: Fair value measurements at reporting date using Quoted prices in active Significant markets for other Significant identical observable unobservable December 31, assets inputs inputs 2012 (Level 1) (Level 2) (Level 3) Assets: Trading securities: State and municipal obligations $ 14,023,264 — 14,023,264 — Auction rate preferred securities 90,000 — — 90,000 Certificates of deposit 100,000 100,000 — Corporate bonds 270,238 — 270,238 — Corporate stocks 1,301,530 1,141,644 — 159,886 Total $ 15,785,032 1,241,644 14,293,502 249,886 Liabilities: Securities sold not yet purchased: Corporate stocks $ 110,895 110,895 — — $ 110,895 110,895 — — 8 (Continued) DAVENPORT &COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Statements of Financial Condition December 31,2012 and 2011 The following table presents assets and liabilities that are measured at fair value on a recurring basis at December 31,2011: Fair value measurements at reporting date using Quoted prices in active Significant markets for other Significant identical observable unobservable December 31, assets inputs inputs 2011 (Level 1) (Level 2) (Level 3) Assets: Trading securities: State and municipal obligations $ 8,896,571 — 8,896,571 Auction rate preferred securities 112,500 — — 112,500 U.S.Treasuries 749,250 749,250 --- --- Corporate bonds 264,034 — 264,034 — Corporate stocks 102,117 19,938 — 82,179 Total $ 10,124,472 769,188 9,160,605 194,679 Liabilities: Securities sold not yet purchased: Corporate stocks $ 11,104 11,104 — — $ 11,104 11,104 — — The following table summarizes Level 3 assets measured at fair value on a recurring basis for the year ended December 31,2012: Assets: Beginning balances as of January 1,2012 $ 194,679 Total realized and unrealized gains included in net income 2,500 Transfer into Level 3 52,707 Ending balance as of December 31, 2012 $ 249,886 There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy during the year ended December 31,2012. 9 (Continued) DAVENPORT&COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Statements of Financial Condition December 31,2012 and 2011 The following table summarizes Level 3 assets measured at fair value on a recurring basis for the year ended December 31,2011: Assets: Beginning balances as of January 1,2011 $ 15,967,894 Total realized and unrealized gains included in net income 1,751,785 Settlement or sale of security (17,525,000) Ending balance as of December 31,2011 $ 194,679 There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy during the year ended December 31, 2011. The Company had no assets or liabilities that were measured at fair value on a nonrecurring basis as of December 31,2012 or 2011. (7) Furniture,Equipment,Software,and Leasehold Improvements Furniture,equipment,software, and leasehold improvements are summarized as follows: 2012 2011 Furniture $ 3,701,765 3,843,372 Equipment 4,636,548 5,316,947 Software 866,350 2,851,382 Leasehold improvements 3,270,499 3,372,454 12,475,162 15,384,155 Less accumulated depreciation and amortization 9,770,254 12,718,898 Total furniture, equipment, software, and leasehold improvements,net $ 2,704,908 2,665,257 (8) Short-Term Bank Loans Short-term bank loans are used to finance loans to customers and noncustomers who have purchased securities under margin agreements and to finance trading and investment securities. These loans are generally made at the short-term collateralized borrowing rate(1.15% at December 31,2012 and 2011)and are payable on demand. In addition, the Company has a $1 million unsecured line of credit with a commercial bank. The interest rate on this line of credit is prime (3.25% at December 31, 2012 and 2011) and any borrowings are payable upon demand. 10 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Statements of Financial Condition December 31, 2012 and 2011 Short-term bank loans and related collateral outstanding at December 31,2012 and 2011 were as follows: Loans Collateral 2012 2011 2012 2011 Collateralized by company securities $ 3,720,000 6,115,000 12,436,672 6,230,716 Collateralized by customer securities — — 4,478,934 Collateralized by noncustomer securities — 305,000 -- 354,087 Unsecured line of credit 100,000 100,000 — — $ 3,820,000 6,520,000 12,436,672 11,063,737 (9) Subordinated Borrowings The Company has approval from the NYSE for a Revolving Note and Cash Subordination Agreement (the Agreement)with a bank for up to$7,500,000 at prime (3.25% at December 31,2012 and 2011)+ 1%. The Company must pay a commitment fee of 1/8% for any unused portion of the Agreement. There were no amounts outstanding under the Agreement at December 31,2012 or 2011,respectively. The subordinated borrowings are available in computing net capital under the SEC's Uniform Net Capital Rule (Rule 15c3-1). To the extent that such borrowings are required for the Company's continued compliance with minimum net capital requirements,they may not be repaid. (10) Financial Instruments In the normal course of its business, the Company enters into various transactions involving off-balance-sheet financial instruments. These financial instruments include the purchase and sale of securities pursuant to new issuances. These transactions are used to meet the needs of customers, conduct trading activities, and manage market risks and are, therefore, subject to varying degrees of market and credit risk. In addition,the Company has sold securities that it does not currently own and will,therefore,be obligated to purchase such securities at a future date. The Company has recorded these obligations in the consolidated statements of financial condition at the market values of the related securities and will incur a loss if the market value of the securities increases subsequent to year-end. In the normal course of business,the Company's customer activities involve the execution,settlement, and financing of various customer securities transactions. These activities may expose the Company to off-balance-sheet risk in the event the customer or other broker is unable to fulfill its contracted obligations and the Company has to purchase or sell the financial instrument underlying the contract at a loss. The Company's customer securities activities are transacted on either a cash or margin basis. In margin transactions,the Company extends credit to its customers,subject to various regulatory and internal margin requirements, collateralized by cash and securities in the customers' accounts. In connection with these activities, the Company executes and clears customer transactions involving the sale of securities not yet 11 (Continued) DAVENPORT& COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Statements of Financial Condition December 31,2012 and 2011 purchased, substantially all of which are transacted on a margin basis subject to individual exchange regulations. Such transaction may expose the Company to significant off-balance-sheet risk in the event margin requirements are not sufficient to fully cover losses that customers may incur. In the event the customer fails to satisfy its obligations, the Company may be required to purchase or sell financial instruments at prevailing market prices to fulfill the customer's obligations. The Company seeks to control the risks associated with its customer activities by requiring customers to maintain margin collateral in compliance with various regulatory and internal guidelines. The Company monitors required margin levels daily and, pursuant to such guidelines, requires the customer to deposit additional collateral or to reduce positions when necessary. The Company's customer financing and securities settlement activities require the Company to pledge customer securities as collateral in support of various secured financing sources such as bank loans and securities loaned. In the event the counterparty is unable to meet its contractual obligation to return customer securities pledged as collateral, the Company may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy its customer obligations. The Company controls this risk by monitoring the market value of securities pledged on a daily basis and by requiring adjustments of collateral levels in the event of excess market exposure. In addition, the Company establishes credit limits for such activities and monitors compliance on a daily basis. The Company has a concentration of credit risk in the Commonwealth of Virginia since a significant portion of its customer base resides in that state. This is mitigated through the Company's policy of maintaining custody of collateral for all of its margin account customers in accordance with various regulatory and internal guidelines. (11) Commitments and Contingencies The Company leases its office space and certain office equipment and software under operating leases expiring at various dates through 2021. Minimum future rental payments required under such leases that have initial or remaining noncancelable lease terms in excess of one year at December 31, 2012 are as follows: 2013 $ 3,019,842 2014 2,929,234 2015 2,631,672 2016 2,554,593 2017 2,533,929 2018 and thereafter 9,267,783 Total minimum lease payments $ 22,937,053 The Company is a party to certain legal and regulatory actions arising in the normal course of business. Management of the Company, after consultation with outside legal counsel, believes that the resolution of these various actions will not result in any material adverse effects on the consolidated financial position, results of operations,or liquidity of the Company. 12 (Continued) DAVENPORT&COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Statements of Financial Condition December 31,2012 and 2011 During fiscal year 2010 and 2009,the Company, on its own behalf, offered to purchase municipal auction rate preferred securities (ARPS) issued and distributed by Nuveen Investments, LLC, and sold by the Company to clients prior to February 12, 2008,the auctions for which were not clearing. To be eligible for the offer,the eligible securities must have been issued by Nuveen Investments LLC and sold to an account of the Company prior to February 12, 2008. The Company offered to purchase from eligible holders all eligible securities, at par value plus accumulated dividends, if any, to the payment date. This offer expired at December 31, 2010 and no customers held Nuveen ARPS as of December 31, 2010. During fiscal year 2011,these securities held by the Company were redeemed at par by Nuveen. (12) Variable Interest Entities(VIEs) The Company has determined that several entities in which it is the managing member meets the definition of a VIE. However, Davenport is not the primary beneficiary and accordingly does not consolidate the funds under FASB ASC 810, Consolidation.These entities have assets of approximately$262,820,000 and $215,603,000 at December 31,2012 and 2011,respectively. (13) Net Capital Requirements and Capital Redemption Agreement The Company is subject to the SEC Rule 15c3-1 and the New York Stock Exchange, Inc., which requires the maintenance of minimum net capital. The Company has elected to use the alternative method, permitted by the rule, which requires that the Company and its subsidiaries maintain minimum net capital, as defined, equal to the greater of $250,000 or 2% of aggregate debit balances arising from customer transactions. The net capital rules also provide that equity capital may not be withdrawn or cash distributions paid if resulting net capital would be less than 5%of aggregate debits.At December 31,2012, the Company's net capital, as defined, of $23,096,967 was 36% of aggregate debit balances and was $21,790,991 in excess of the minimum net capital required. At December 31, 2011, the Company's net capital,as defined, of$27,738,030 was 54%of aggregate debit balances and was$26,683,493 in excess of the minimum net capital required. The Members have agreements with holders of all their outstanding common stock, whereby the Members are required to repurchase the stock in the event of a stockholder's death or retirement. The Company has agreements with the Members, whereby it will distribute to the Members capital sufficient for the Members to complete the redemption, subject to compliance with the rules of the New York Stock Exchange, Inc. The purchase price for such shares and the related units of the Company are determined by the Members' boards of directors and the Company's board of managers,respectively. 13 (Continued) DAVENPORT &COMPANY LLC AND SUBSIDIARIES Notes to Consolidated Statements of Financial Condition December 31, 2012 and 2011 During the years ended December 31, 2012 and 2011, cash distributions of Members' interests were as follows: 2012 2011 Income accumulated in prior year distributed to members during the current year $ 2,929,847 4,603,750 Income accumulated in the current year distributed to members during the current year 7,150,786 5,175,161 Repurchase of members' units for redemption of members' common stock 795,628 1,393,340 Total cash distributions of members' interest $ 10,876,261 11,172,251 (14) Subsequent Events The Company has evaluated subsequent events for potential recognition and/or disclosure in the December 31, 2012 financial statements through February 26, 2013,the date the financial statements were issued,noting no matters requiring disclosure. 14 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S REPORT ON INTERNAL CONTROL REQUIRED BY SEC RULE 17A-5(g)(1) KPMG KPMG LLP Suite 2000 1021 East Cary Street Richmond,VA 23219-4023 Independent Registered Public Accounting Firm's Report on Internal Control Required by SEC Rule 17a-5(g)(1) The Board of Directors Davenport&Company LLC: In planning and performing our audit of the consolidated statement of financial condition of Davenport & Company LLC and subsidiaries (the Company) as of and for the year ended December 31, 2012, in accordance with auditing standards generally accepted in the United States of America, we considered the Company's internal control over financial reporting(internal control), as a basis for designing our auditing procedures for the purposes of expressing our opinion on the consolidated statements of financial condition, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.Accordingly,we do not express an opinion on the effectiveness of the Company's internal control. Also, as required by Rule 17a-5(g)(1) of the Securities and Exchange Commission(SEC), we have made a study of the practices and procedures followed by the Company, including consideration of control activities for safeguarding securities. This study included tests of compliance with such practices and procedures that we considered relevant to the objectives stated in Rule 17a-5(g)in the following: 1. Making the periodic computations of aggregate indebtedness (or aggregate debits) and net capital under Rule 17a-3(a)(11) and the reserve required by Rule 15c3-3(e). 2. Making the quarterly securities examinations, counts, verifications, and comparisons, and the recordation of differences required by Rule 17a-13. 3. Complying with the requirements for prompt payment for securities under Section 8 of Federal Reserve Regulation T of the Board of Governors of the Federal Reserve System;and 4. Obtaining and maintaining physical possession or control of all fully paid and excess margin securities of customers as required by Rule 15c3-3. The management of the Company is responsible for establishing and maintaining internal control and the practices and procedures referred to in the preceding paragraph. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls, and of the practices and procedures referred to in the preceding paragraph, and to assess whether those practices and procedures can be expected to achieve the SEC's previously mentioned objectives. Two of the objectives of internal control and the practices and procedures are to provide management with reasonable but not absolute assurance that assets for which the Company has responsibility are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of consolidated statements of financial condition in conformity with U.S.generally accepted accounting principles. Rule 17a-5(g) lists additional objectives of the practices and procedures listed in the preceding paragraph. 15 KPMG LLP is a Delaware limited liability partnership, the U.S.member firm of KPMG International Cooperative ("KPMG International"),a Swiss entity. ICPMG Because of inherent limitations in internal control and the practices and procedures referred to above, error or fraud may occur and not be detected. Also, projection of any evaluation of them to future periods is subject to the risk that they may become inadequate because of changes in conditions or that the effectiveness of their design and operation may deteriorate. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. A material weakness is a deficiency, or combination of deficiencies,in internal control, such that there is a reasonable possibility that a material misstatement of the Company's financial statements will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control was for the limited purpose described in the first and second paragraphs and would not necessarily identify all deficiencies in internal control that might be material weaknesses. We did not identify any deficiencies in internal control and control activities for safeguarding securities that we consider to be material weaknesses,as defined previously. We understand that practices and procedures that accomplish the objectives referred to in the second paragraph of this report are considered by the SEC to be adequate for its purposes in accordance with the Securities Exchange Act of 1934 and related regulations, and that practices and procedures that do not accomplish such objectives in all material respects indicate a material inadequacy for such purposes.Based on this understanding and on our study, we believe that the Company's practices and procedures, as described in the second paragraph of this report, were adequate at.December 31, 2012 to meet the SEC's objectives. This report is intended solely for the information and use of the Board of Directors,management, the SEC, the Financial Industry Regulatory Authority, Inc., and other regulatory agencies that rely on Rule 17a-5(g) under the Securities Exchange Act of 1934 in their regulation of registered brokers-dealers, and is not intended to be and should not be used by anyone other than these specified parties. K4Pii,(C=. LLQ February 26,2013 16 RFP Item #16-128 Augusta,Georgia February 19, 2016, 11:00 A.M. E. Required Attachments DAVENPORT&COMPANY Friday, February 19,2016 45 G E';O Ri ...G '!t A Attachment B You Must Corn'lete and Return the 2 wages of Attachment B with Your Submittal. Document Must Be Notarized. Augusta, Georgia Augusta Procurement Department ATTN: Procurement Director 535 Telfair Street, Suite 605 Augusta,Georgia 30901 Name of Bidder: Davenport&Company LLC Street Address:3350 Riverwood Parway Sted 900 City, State, Zip Code:Atlanta, Georgia 30339 • Phone:(804)697-2902 Fax:804-549-4900 Email:crogerst investdavenport.com Do You Have A Business License? Yes:X No: Business License#for your Company(Must Provide):22472 Company must be licensed In the Governmental entity for where they do the majority of their business. If your Governmental entity(State or Local)does not require a business license,your company will be required to obtain a Richmond County business license if awarded a Bid. For further information contact the License and Inspection Department @ 706 312-5050. List the State.City&County that issued your license: City of Richmond,Virginia(No County affiliate) Acknowledgement of Addenda:(#1)X: (#2)X: (#3) : (#4) :(#5) : (#6) :(#7) :(#8) NOTE: CHECK APPROPRIATE BOX(ES)-ADD ADDITIONAL NUMBERS AS APPLICABLE Statement of Non-Discrimination The undersigned understands that it is the policy of Augusta, Georgia to promote full and equal business opportunity for all persons doing business with Augusta, Georgia. The undersigned covenants that we have not discriminated, on the basis of race, religion, gender, national origin or ethnicity,with regard to prime contracting,subcontracting or partnering opportunities. The undersigned covenants and agrees to make good faith efforts to ensure maximum practicable participation of local small businesses on the proposal or contract awarded by Augusta,Georgia. The undersigned further covenants that we have completed truthfully and fully the required forms regarding good faith efforts and local small business subcontractor/supplier utilization. The undersigned further covenants and agrees not to engage in discriminatory conduct of any type against local small businesses,in conformity with Augusta, Georgia's Local Small Business Opportunity Program. Set forth below is the signature of an officer of the proposer/contracting entity with the authority to bind the entity. The undersigned acknowledge and warrant that this Company has been made aware of understands and agrees to take affirmative action to provide such companies with the maximum practicable opportunities to do business with this Company; That this promise of non-discrimination as made and set forth herein shall be continuing in nature and shall remain in full force and effect without interruption; That the promises of non-discrimination as made and set forth herein shall be and are hereby deemed to be made as part of and incorporated by reference into any contract or portion thereof which this Company may hereafter obtain and; That the failure of this Company to satisfactorily discharge any of the promises of nondiscrimination as made and set forth herein shall constitute a material breach of contract entitling Augusta,Georgia to declare the contract in default and to exercise any and all applicable rights remedies including but not limited to cancellation of the contract,termination of the contract, suspension and debarment from future contracting opportunities,and withholding and or forfeiture of compensation due and owing on a contract. Non-Collusion of Prime Proposer/Offeror By submission of a proposal,the vendor certifies,under penalty of perjury,that to the best of its knowledge and belief: (a) The prices in the proposal have been arrived at independently without collusion, consultation, communications, or agreement, for the purpose of restricting competition,as to any matter relating to such prices with any other vendor or with any competitor. (b)Unless otherwise required by law,the prices which have been quoted in the proposal have not been knowingly disclosed by the vendor prior to opening,directly or indirectly,to any other vendor or to any competitor. (c)No attempt has been made,or will be made,by the vendor to induce any other person,partnership or corporation to submit or not to submit a proposal for the purpose of restricting competition. Collusions and fraud in proposal preparation shall be reported to the State of Georgia Attorney General and the United States Justice Department. RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 6 of 30 Conflict of Interest By submission of a proposal,the responding firm certifies,under penalty of perjury,that to the best of its knowledge and belief: 1. No circumstances exist which cause a Conflict of Interest in performing the services required by this ITB, and 2.That no employee of the County,nor any member thereof,not any public agency or official affected by this ITB,has any pecuniary interest in the business of the responding firm or his sub-consultant(s)has any interest that would conflict in any manner or degree with the performance related to this ITB. By submission of.a proposal,the vendor certifies under penalty of perjury;that to the best of its knowledge and belief: (a) The prices in the proposal have been arrived at independently without collusion, consultation, communications, or agreement, for the purpose of restricting competition,as to any matter relating to such prices with any other vendor or with any competitor. (b)Unless otherwise required by law,the prices which have been quoted in the proposal have not knowingly been disclosed by the vendor prior to opening,directly or indirectly,to any other vendor or competitor. c)No attempt has been made,or will be made,by the vendor to induce any other person,partnership or cooperation to submit or not to submit a proposal for the purpose of restricting competition. For any breach or violation of this provision,the County shall have the right to terminate any related contract or agreement without liability and at its discretion to deduct from the price, or otherwise recover,the full amount of such fee, commission,percentage,gift,payment or consideration. Contractor Affidavit and Agreement By executing this affidavit, the undersigned contractor verifies its compliance with 0.C.G.A. 13-10-91, stating affirmatively that the individual, firm,or corporation which is contracting with Augusta,Georgia Board of Commissioners has registered with and is participating in a federal work authorization program*[any of the electronic verification of work authorization programs operated by the United States Department of Homeland Security or any equivalent federal work authorization program operated by the United States Department of Homeland Security to verify information of newly hired employees, pursuant to the Immigration Reform and Control Act of 1986(IRCA),P.L. 99-603], in accordance with the applicability provisions and deadlines established in 0.C.G.A 13-10-91. The undersigned further agrees that,should it employ or contract with any subcontractor(s) in connection with the physical performance-'of services pursuant to this contract with Augusta, Georgia Board of Commissioners, contractor will secure from such subcontractor(s)similar verification of compliance with 0.C.G.A 13-10-91 on the Subcontractor Affidavit provided in Rule 300-10-01-.08 or a substantially similar form. Contractor further agrees to maintain records of such compliance and provide a copy of each such verification to the Augusta,Georgia Board of Commissioners at the time the subcontractor(s)is retained to perform such service. Georgia Law requires your company to have an E»Verify*User Identification Number(Company I.D.)on or after July 1,2009. For additional information or to enroll your company,visit the State of Georgia website: https://e-verifv.uscis.gov/enroll/ and/or http://www.doi.state,ga.us/pdf/rules/300 10 1.pdf **E-Verify* User Identification Number(Company LD.) 482690 NOTE: E-VERIFY USER IDENDIFICATION NUMBER(COMPANY I.D.)MUST BE PROVIDED: IN ADDITION;THE RECOMMENDED AWARDED VENDOR WILL BE REQUIRED TO PROVIDE A COPY OF HOMELAND SECURITY'S MEMORANDUM OF UNDERSTANDING(MOU) The undersigned further agrees to submit a notarized copy of Attachment B and any required documentation noted as part of the Augusta, Georgia Board of Commissions specifications which govern this process. In addition, the undersigned agrees to submit all required forms for any subcontractor(s) as requested and or required. I further understand that my submittal will be deemed non-compliant if any part of this process is violated. Davenport & Company LLC Compal " .• e ,,,,,r i I J,,,i` . .;•` •` pt ••!• ,�f Birr Authorized Officer or Agent : 0 .6? (Contractor Signature) _ tatY COMMI SI!DN Senior Vice President �,•. INtUIll t . 1422 :` Title of Authorized Officer or Agent of Contractor ��,;.• Courtney E. Rogers 'i 'Ai.1.1-1 - Printed Name of Authorized Officer or Agent ��/r►I i I I i `�' I .7yU� SUBSCRIBED AND SWORN B�rFORE ME ON THIS THE II DAY OF ))--e6)1/O(\/ , 20 / iro NOTARY SEAL NotaryPublic 1 /_ My Commission pines: 3� f ��Di`� . You Must Complete and Return the 2 pages of Attachment B with Your Submittal. Document Must Be Notarized. REV.8/6/2015 RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 7 of 30 ( _ G E'_ co R G ._'I A You Must Complete and Return with Your Submittal. Document Must Be Notarized Systematic Alien Verification for Entitlements (SAVE) Program Affidavit Verifying Status for Augusta, Georgia Benefit Application By executing this affidavit under oath, as an applicant for an Augusta, Georgia Business License or Occupation Tax Certificate, Alcohol License, Taxi Permit, Contract or other public benefit as reference in O.C.G.A. Section 50-36-1, I am stating the following with respect to my proposal for an Augusta, Georgia contract for RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation (Proposal Project Number and Project Name] Courtney E. Rogers (Print/Type:Name of natural person applying on behalf of individual,business,corporation,partnership,or other private entity] Davenport & Company LLC (Prinf/Type: Name of business,corporation,partnership,or other private entity] 1.) X I am a citizen of the United States. OR 2.) I am a legal permanent resident 18 years of age or older. OR 3.) I am an otherwise qualified alien (8 § USC 1641) or nonimmigrant under the Federal Immigration and Nationality Act (8 USC 1101 et seq.) 18 years of age or older and lawfully present in the United States.* In making the above representation under oath, I understand that any person who knowingly and willfully makes a false, fictitious, or fraudulent statement or representation in an affidavit shall be guilty of a violation of Code Section 16-10-20 of tilr Jfficial Code o _G gia. 7-14(''' --t>K::::: :----92------- Signature of Applicant Courtney E.Rogers Printed Name *Allien Registration Number for Non-Citizens SUBSCRIBED AND SWORN 0:,FORE ME ON THIS THE /1 DAY OF I--ek3Kkik/ , 20_ __ �L r 1 4� ►'Cs� ��i�tirrrlr�� Notary Public , \`,`. .% ,.. Ap,p`•,P�, My Commission Expires: 3/ ?tA,L co NOTARY E40. 4�,. MY 0'. =, �0 0 COMMISSION Note: THIS FORM MUST BE RETURNED WITH YOUR SUBMITTAL 7'-I o NUMBER :t- 7 Rev.7/12/2015 4 RFP 16-128 Financial Advisory SerG.9ebt i hitt.,\ and Economic DevelopmA ti atton RFP Due Friday, February 12,2 11Lffi'114Ai a.m. Page 8 of 30 ATTACHMENT C REFERENCE AND RELEASE FORM (RESPONDER) 15-500334 FINANCIAL ADVISORY SERVICE List below at least three (3) references, including company name, contact name, address, email address, telephone numbers and contract period who can verify your experience and ability to perform the type of service listed in the solicitation. Company Name Columbia County, Georgia Contract Period July 2018 Contact Person Name and Title Scott Johnson, County Administrator Telephone Number(include-area code)(706)868-3423 Complete Primary Address(City)630 Ronald Reagan Drive, Building B, 2nd Floor, Evans State Georgia Zip Code 30809 Email Address siohnson(c�columbiacountyga.gov Fax Number(include area code) Project Name Financial Advisory Services Company Name Macon-Bibb County, Georgia ContractPeriod May 2016 Contact Person Name and Title Dale Walker,County Manager Telephone Number(include area code)(478)751-7244 Complete Primary Address(City)Government Center, 700 Poplar St, Second Floor, Macon State Georgia Zip Code 31202 Email Address dwalkernmaconbibb.us Fax Number(include area code) Project Name Financial Advisory Services RFP 16-128 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation RFP Due Friday,February 12,2016 @ 11:00 a.m. Page 27 of 30 ATTACHMENT C (Cont.) Company Name City of Lawrenceville, Georgia Contract Period November 2016 Contact Person Name and Title Bob Baroni, City Manager Telephone Number(include area code)(678)407-6577 Complete Primary Address(City)70 South Clayton St, Lawrenceville State Georgia Zip Code 30046 - Email Address bob.baroni@lawrencevillegaweb.orq Fax Number(include area code) Project Name Financial Advisory Services REFERENCE CHECK RELEASE STATEMENT You are authorized to contact the er nces proud above for purposes of this RFP. Signed Title Senior Vice President (Authorized Signature of Responder) Company Name Davenport& Company LLC DATE r-/ RFP 16-128 Financial Advisory Services for Debt issuance and Economic Development Project Evaluation RFP Due Friday, February 12,2016 @ 11:00 a.m. Page 28 of 30 is cpsLereu 1v1un1elpill j- uvisors rage 1 01 33 MSRB Municipal Securities Rule 'ng Board Municipal Advisors Registered with the MSRB This is a complete list of all municipal advisors registered with the MSRB as of 2/17/2016 2:14:04 PM Eastern. "Not an SEC Registered Municipal Advisor"denotes that the municipal advisor's MSRB Form A- 12 does not reflect current registration with the Securities and Exchange Commission (SEC)and the municipal advisor was not listed by the SEC on its most recent list of registered municipal advisors, published here. Export to Excel MSRB Number Company Name State Registrant Type K0955 1410 Partners LLC CA Municipal Advisor K0104 A. M. Miller& Co., Inc CA Municipal Advisor K0205 A. M. Peche&Associates LLC CA Municipal Advisor A4892 A.Bridge-Realvest Securities Corp. NJ Municipal Advisor/Broker Dealer K0468 A.C. Advisory, Inc. IL Municipal Advisor K0116 Acacia Financial Group, Inc. NJ Municipal Advisor K0118 Acacia Investment Advisory Group, Inc. NJ Municipal Advisor A3858 Academy Securities, Inc. NY Municipal Advisor/Broker Dealer K0405 AccessAlpha Worldwide LLC-Not an SEC Registered IL Municipal Advisor Municipal Advisor K0803 ADVISORY SERVICES GROUP LLC-Not an SEC TN Municipal Advisor Registered Municipal Advisor K1086 AE2S Nexus, LLC ND Municipal Advisor K0905 AECOM ENTERPRISES, INC. -Not an SEC Registered NY Municipal Advisor Municipal Advisor icegislereu lvluilleipal i- uvlsurs rage 7 ul JJ 1 MSRB j Number 1 Company Name I State 1 Registrant Type K0221 Cumberland Partners LLC TN Municipal Advisor K0811 Cumberland Securities Company, Inc. TN Municipal Advisor K0568 D &G Consulting Group, LLC IL Municipal Advisor A0365 DA Davidson & Company MT Municipal Advisor/Broker Dealer K0944 DA Group, Inc. NC Municipal Advisor K0648 DAK Financial -Not an SEC Registered Municipal Advisor NY Municipal Advisor K0586 Dale Scott&Company Inc. CA Municipal Advisor K0847 Damon Rocque Securities Corporation LA Municipal Advisor A0364 Davenport&Company LLC VA Municipal Advisor/Broker Dealer K0319 David Drown Associates, Inc. MN Municipal Advisor K0961 David Taussig and Associates, Inc CA Municipal Advisor K0658 DB Advisors Northwest, LLC-Not an SEC Registered WA Municipal Advisor Municipal Advisor K0769 De Luna Partners Inc. CA Municipal Advisor K0185 DEC Associates Inc NC Municipal Advisor K0975 DEEPAK WALIA CO Municipal Advisor K0108 Del Rio Advisors, LLC CA Municipal Advisor K0703 Denning and Company, LLC CA Municipal Advisor K1101 Derivative Advisors, LLC MA Municipal Advisor K1105 Derivative Logic Inc. CA Municipal Advisor K1122 Derivatives Consulting LLC NJ Municipal Advisor K0413 Development& Public Finance, LLC CA Municipal Advisor K0958 Development Planning and Financing Group, Inc CA Municipal Advisor i,++„.ii. ----..,,,,,-t, ,,,,,A if AD ;‘,+,.,,.,+,, „ev.,, 1/1-7/11 11 ti -o 0 O cn r 00 > ®pn -4I xO z p ".• < .� = -< Z rn N• N c co 0X "13 0' ® > � 03 cn -< Z ® w0 ® ® rE r m z m r Nin t; 00 m C ' N w -0 to Ri tr.) X Z CO PotttAt C) Con 1 s m I (.),? XI Cli) cJ1 ni® m COmr nri . m 4 Z cnN 03 r C -iP11 g Z co Fn.- z co m n N C) 0 0 ppm C�' N 00 C) a m — cmtTi -'' W ® � r "� -' 13 ZZ � Nrn V "< N C CI o 7p C G7 W IV 73Mw 0 -I S* N " Cn 0 = < M p to r . 01 o rn w ®.. ..--_......-....._..-...........,..-_,...-.... .._ ....41W" 4 Control No. 11095695 STATE OF GEORGIA Secretary of State Corporations Division 313 West Tower 2 Martin Luther King, Jr. Drive Atlanta, Georgia 30334-1530 CERTIFICATE OF AUTHORITY I, Brian P. Kemp, the Secretary of State and the Corporations Commissioner of the State of Georgia, hereby certify under the seal of my office that DAVENPORT & COMPANY LLC a Foreign Limited Liability Company has been duly formed under the laws of Virginia and has filed an application meeting the requirements of Georgia law to transact business as a foreign Limited Liability Company in this state. WHEREFORE, by the authority vested in me as Secretary of State, the above Limited Liability Company is hereby granted, on 12/22/2011, a certificate of authority to transact business in the State of Georgia as provided by Title 14 of the Official Code of Georgia Annotated. Attached hereto is a true and correct copy of said application. WITNESS my hand and official seal in the City of Atlanta and the State of Georgia on December 22, 2011 -4'87170. ‘71e49 3 fie 4„... ;%. crAtita. • ,44.:ilue Brian P. Kemp Rife Secretary of State Control No:11095695 `� Date Filed: Bri1an P2/22/2011 03:35 PM .Kemp Secretary of State �� � '. , OFFICE OF SECRETARY OF STATE 0VC) %.t . f i''`, ' CORPORATIONS DIVISION �I/�f1 �� ;%//�; * 315 West Tower,#2 Martin Luther King,Jr.Drive O4 it/ '.1.1r4-0 '' Atlanta,Georgia 303341530 t� f (404)656-2817 �c Q iii,_.: ��tt Registered agent,officer,entity status information via the Internet 4y� http:l/www.georgiacorporations.org • ,6 Brian P. Kemp Off �} Secretary of State APPLICATION FOR CERTIFICATE OF AUTHORITY FOR FOREIGN LIMITED LIABILITY COMPANY IMPORTANT f Remember to include your e-mail address whe-` --`''`°"•'-""- _. -- -•.._ State of Georgia Providing your e-mail address allows us to notify you via a-maili Creation-Foreign Entity 1 Page(s) action on your filing. Please enter your e-mail address on the I . eeddins investdaven ©rt.c©mil E-Mall. @p 111111111111111111111111111111011111111111111111111111 T1136121501 _ _ v _ NOTICE TO.APPLICANT: PRINT PLAINLY OR TYPE REMAINDER OF THIS FORM _ - 1. Davenport&Company LLC . Limited Liability Company Name Name Reservation Number(Optional) 12/01/2011 Date Business Commenced(Or Proposed)in Georgia (NOTE: lithe date provided here is more than 30 days prior to the date the application is received by the Secreta of State.a$500 penalty must be paid;penalty is statutory and cannot be waived by Secretary of State.) 2. Eddie Eddins 604-780-2119 Name of filing person(certificate will be mailed to this person,at address below) Telephone Number do Davenport&Co LLC, 901 E. Cary St. Suite 1100 Richmond VA 23219 Address . ' 3- City State • Zip Code 3 Virginia .. 4/1/1997 _ Jurisdiction(Home state/country) • Date of Organization in home state , 4. 901 E. Cary St., Suite,1100 Richmond VA 23219 .Address of Principal Piece of Business City State Zip Code 5. The Corporation Process Company, . Name of Registered Agent in Georgia 2180 Satellite Blvd, Suite 400 Registered Office Street Address in Georgia(Post office box or mail drop not acceptable for registered office address) Duluth . Gwinnett GA 30097 City County State Zip Code 6• Eddie Eddins,901 Cary St, Suite 1100 Richmond VA 23219 Manager's Name&Address(Person w/responsibility for maintaining records) - City State Zip Code 7. 901 E. Cary St, Suite 1100 Richmond - •' VA 23219 • Address Where Limited Liability Company Records Are Maintained" City State Zip Code 8. NOTICE: Mall or deliver an original and one copy of this form and the filing fee 01 4225.00 to the Secretary of State at the above address. Filing fees are NON-refundable. This application Is signed by a person duly authorized to sign such instruments by the laws of the jurisdiction under which the foreign limited liability company Is organized. The foreign limited liability company undertakes to keep its records at the address shown In#7 above until its registration In Georgia is canceled or withdrawn. The foreign limited liability company,in accordance with Title 14 of the Official Code of Georgia Annotated,appoints the Secretary of State as agent for service of process if no agent has been appointed in Geor ' ,if appointed,th agent's authority has been revoked or the agent cannot be found or served by the exercise of reasonable dil' * Z..0._ . .... s - -' I X1i.q/il . . .._ . _ . . Authorized Signature Date Request certificates and obtain entity information via the Internet:http://www.georgiacorporations.org FORM 241 ATTACHMENT F SUBCONTRACTOR INFORMATION FORM The Responder shall identify all proposed subcontractors who will be performing work under the proposed Contract. The Responder certifies that the following individuals, fin-ns or businesses will be hired or awarded subcontracts for the indicated portions of the Work in the event that the Responder is awarded the Contract. Please list all proposed Subcontractors below: 1.TYPE OF WORK: Not Applicable Name Street Address City State Zip 2.TYPE OF WORK: Name , , , Street Address City State Zip 3. TYPE OF WORK: Name , a , Street Address City State Zip 4.TYPE OF WORK: Name Street Address City State Zip Addendum 2 Financial Advisory Services for Debt Issuance and Economic Development Project Evaluation DAVENPORT 8L COMPANY The U.S. Securities and Exchange Commission (the "SEC") has clarified that a broker, dealer or municipal securities dealer engaging in municipal advisory activities outside the scope of underwriting a particular issuance of municipal securities should be subject to municipal advisor registration. Davenport & Company LLC ("Davenport") has registered as a municipal advisor with the SEC. As a registered municipal advisor Davenport may provide advice to a municipal entity or obligated person. An obligated person is an entity other than a municipal entity, such as a not for profit corporation, that has commenced an application or negotiation with an entity to issue municipal securities on its behalf and for which it will provide support. If and when an issuer engages Davenport to provide financial advisory or consultant services with respect to the issuance of municipal securities, Davenport is obligated to evidence such a financial advisory relationship with a written agreement. When acting as a registered municipal advisor Davenport is a fiduciary required by federal law to act in the best interest of a municipal entity without regard to its own financial or other interests. Davenport is not a fiduciary when it acts as a registered investment advisor, when advising an obligated person, or when acting as an underwriter, though it is required to deal fairly with such persons, This material was prepared by public finance, or other non-research personnel of Davenport. This material was not produced by a research analyst, although it may refer to a Davenport research analyst or research report. Unless otherwise indicated, these views (if any) are the author's and may differ from those of the Davenport fixed income or research department or others in the firm. Davenport may perform or seek to perform financial advisory services for the issuers of the securities and instruments mentioned herein. This material has been prepared for information purposes only and is not a solicitation of any offer to buy or sell any security/instrument or to participate in any trading strategy. Any such offer would be made only after a prospective participant had completed its own independent investigation of the securities, instruments or transactions and received all information it required to make its own investment decision, including, where applicable, a review of any offering circular or memorandum describing such security or instrument. That information would contain material information not contained herein and to which prospective participants are referred. This material is based on public information as of the specified date, and may be stale thereafter. We have no obligation to tell you when information herein may change. We make no representation or warranty with respect to the completeness of this material. Davenport has no obligation to continue to publish information on the securities/instruments mentioned herein. Recipients are required to comply with any legal or contractual restrictions on their purchase, holding, sale, exercise of rights or performance of obligations under any securities/instruments transaction. The securities/instruments discussed in this material may not be suitable for all investors or issuers. Recipients should seek independent financial advice prior to making any investment decision based on this material. This material does not provide individually tailored investment advice or offer tax, regulatory, accounting or legal advice. Prior to entering into any proposed transaction, recipients should determine, in consultation with their own investment, legal, tax, regulatory and accounting advisors, the economic risks and merits, as well as the legal, tax, regulatory and accounting characteristics and consequences, of the transaction. You should consider this material as only a single factor in making an investment decision. The value of and income from investments and the cost of borrowing may vary because of changes in interest rates, foreign exchange rates, default rates, prepayment rates, securities/instruments prices, market indexes, operational or financial conditions or companies or other factors. There may be time limitations on the exercise of options or other rights in securities/instruments transactions. Past performance is not necessarily a guide to future performance and estimates of future performance are based on assumptions that may not be realized. Actual events may differ from those assumed and changes to any assumptions may have a material impact on any projections or estimates. Other events not taken into account may occur and may significantly affect the projections or estimates. Certain assumptions may have been made for modeling purposes or to simplify the presentation and/or calculation of any projections or estimates, and Davenport does not represent that any such assumptions will reflect actual future events. Accordingly,there can be no assurance that estimated returns or projections will be realized or that actual returns or performance results will not materially differ from those estimated herein. This material may not be sold or redistributed without the prior written consent of Davenport. Version 01/13/2014 GL/DJG/CR