Maverick County Commissioners Court approves to terminate County Financial Advisor Southwestern Capital Markets, Inc.
By: Jose G. Landa, Copyright 2015, Eagle Pass Business Journal, Inc.
Maverick County Commissioners Court unanimously approved to terminate the financial advisory contract with County Financial Advisor Roberto G. Rodriguez and his firm, Southwestern Capital Markets, Inc., at a special meeting held on Thursday, January 29, 2015, at Commissioners Courtroom in Eagle Pass, Texas,
Commissioners Court tackled three agenda items concerning Maverick County’s financial advisor Roberto G. Rodriguez and Southwestern Capital Markets, Inc. at the January 29th meeting.
The first agenda item was No. 32 calling for the discussion and possible action to terminate the contract between Maverick County and Southwestern Capital Markets, Inc. and give 30 days notice of termination.
County Judge David R. Saucedo opened up the agenda item for discussion. Newly sworn-in Maverick County Commissioner of Precinct 2 Rosy Cantu asked Judge Saucedo what is agenda item no. 32 all about.
Judge Saucedo replied that it’s an issue between Southwestern Capital Markets, Inc. and Maverick County over payment of financial advisor fees and that at this juncture it is an issue being handled by General Counsel Poncho Nevarez and the attorneys for Southwestern Capital Markets, Inc.
“I think we’re at a juncture here where unfortunately Mr. Rodriguez has said it is going to be difficult for me to work for you guys because there is somewhat of a billing dispute disagreement. We are in a situation where we need to go forward. We need to make sure we have somebody on board, especially for the fact that we are dealing with the Detention Center right now. The way the contract is set up the County and the financial advisor need to give a 30 days notice to tell them we are in a situation, at a crossroads really, where we can’t go forward and unfortunately there’s a severed relation this company has with the county…,” said Judge Saucedo.
General Counsel Mariliza Villalpando Williams of the Nevarez Law Group recommended that termination of the financial advisor contract be terminated be tabled by Commissioners Court until the County has provided 30 days written notice of termination to Southwestern Capital Markets, Inc. pursuant to the contract. “We have to provide 30 days notice to Southwestern Capital Markets, Inc. letting them know that we’re going to terminate the contract before an action can be taken to terminate the contract as the way the contract is written. We have to provide them a 30 days notice of our intention to terminate the contract,” said General Counsel Williams.
Judge Saucedo questioned General Counsel Williams’ recommendation that the financial advisor agreement required giving 30 days written notice of intent to terminate and noted that there are two different financial advisor contracts, one for Maverick County and another for the Maverick County Public Facility Corporation.
Judge Saucedo asked Maverick County Special Legal Counsel for County Auditor issues, Luis R. Vera, Jr.,“I got you here. Have you ever dealt with situations like this before ?”
Vera quickly answered that the 30 days notice clause is standard in all professional services contracts in Texas. “In the State of Texas, when you have a contract governing professional services you hire and terminate them at your will,” said Special Legal Counsel Vera.
Vera further explained that anyone under the term of a professional services agreement is considered basically an employee at will.
“Another thing that the State of Texas allows you to do is, you are giving them a 30 days notice and in 30 days his contract ends so theoretically he continues to be your financial advisor. There is nothing that prohibits you from hiring another financial advisor and you have ‘parallel advisors’ but you choose to use this one as opposed to that one,” said Special Counsel Vera.
“The way I read it, you’ve authorized to terminate by giving this 30 days notice which he’ll get a letter from you that on this day, that’s it our services with you have officially terminated. In the same time you will be hiring another financial advisor and his contract can take affect you can choose to do either parallel or make it effective the day your other financial advisor date runs out.” said Special Counsel Vera.
“I know that the dispute here is financially with the current financial advisor and that is something that your legal counsel will deal with to settle that,” added Vera.
“As far as having parallel financial advisors and issuing of notices, yes you can do that, you are proper in what you’re doing in my opinion,” said Special Legal Counsel Vera to Judge Saucedo.
Judge Saucedo asked Commissioners Court if anyone had questions and there were none.
Commissioners Court approved unanimously to terminate County Financial Advisor Southwestern Capital Markets, Inc.
The second agenda item was No. 33 calling for the waiver of the procurement process for the hiring of a financial advisor due to time constraints on issues with Maverick County and the Detention Center. Judge Saucedo proceeded to open the item for discussion and possible action.
Judge Saucedo asked Special Counsel Vera if the County could waive the procurement process of hiring another financial advisor due to it being professional services.
Special Counsel Vera stated that there is no need for a bidding process required for a financial advisor because it is considered professional services and the law only requires you to hire someone with the qualifications to do the job. “ You don’t have to advertise it unless you have an internal policy that you established yourselves. The law does not require you to bill this out, advertise it out or do anything. The law says that you all will find someone that’s qualified to do the job,” said Special Counsel Vera.
Judge Saucedo then stated that the County does have an internal policy and then proceeded to call the item for a motion to approve the waiver of a procurement period.
Commissioner Roberto Ruiz made a motion to approve the waiver of the procurement period and was seconded by Commissioner Jose Luis Rosales. Commissioners Court unanimously approved the motion to waive the procurement period.
The third agenda item addressed was No. 34 calling for the hiring of a financial advisor for Maverick County.
Judge Saucedo stated that when he received correspondence from Southwestern Capital Markers, Inc. and Roberto G. Rodriguez that they might not be able to work with the County due to non-payment of their fees, he started to look for someone due to urgent issues that need to be addressed with the Bondholders for the Maverick County Detention Center, which is now being operated by the Maverick County Sheriff’s Department under Sheriff Tom Schmerber.
“I found somebody that will agree to the terms that are already in place and the name of the company is First Southwest Capital out of San Antonio and they are willing to follow the same terms of the financial advisor that we have now,” said Judge Saucedo to Commissioners Court.
Judge Saucedo advised Commissioners Court that the proposed financial advisor is also willing to handle the duties required for the Maverick County Public Facility Corporation (MCPFC) at no additional cost to the MCPFC. “He agreed to do both, the County and Public Facility Corporation issues for the same price that was being done separately,” said Judge Saucedo.
Commissioners Court unanimously approved to hire First Southwest Capital, Inc. of San Antonio, Texas as the new financial advisor for Maverick County.
Maverick County, the Maverick County Public Facility Corporation, and Maverick County Sheriff’s Department are currently involved in very important financial negotiations with the Bondholders, Investors, and Trustee of the over $38 Million debt owed on the construction of the Maverick County Detention Center which may determine whether Maverick County will continue operating the Detention Center facility or the Bondholders and their Trustee will default the Maverick County Public Facility Corporation on the outstanding debt. The changing of financial advisors at such a critical moment in the negotiations is difficult and risky for Maverick County concerning the over $38 Million owed on the Detention Center. The new financial advisor will certainly have their work cut out for them in attempting to negotiate an amicable resolution of the outstanding financial indebtedness and monthly installment payments.
Southwestern Capital Markets, Inc. had been financial advisor for Maverick County since October 1, 2008.
