HomeMy WebLinkAbout1995-387
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RESOLUTION NO. 95-387
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING
AN AGREEMENT WITH AMERICAN CEMETERY/MORTUARY CONSULTANTS,
INC., TO REPRESENT THE CITY IN NEGOTIATIONS FOR THE SALE OF PIONEER
CEMETERY, A CITY OWNED PROPERTY.
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AS FOLLOWS:
SECTION 1.
The Mayor of the city of San Bernardino is
7 hereby authorized and directed to execute on behalf of said city an
8 agreement with AMERICAN CEMETERY/MORTUARY CONSULTANTS, INC., to
9 represent the city in negotiations for the sale of pioneer
10 Cemetery, a city-owned property.
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SECTION 2.
The authorization to execute the above
referenced agreement is rescinded if the parties to the agreement
fail to execute it within sixty (60) days of the passage of this
resolution.
I HEREBY CERTIFY that the
foregoing
resolution was duly
of the city of
adopted by the Mayor
and Common Council
San
6th
day
Bernardino at a
meeting thereof, held on the
reqular
of
, 1995, by the following vote, to wit:
November
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AGREEMENT WITH AMERICAN CEMETERY/MORTUARY CONSULTANTS, INC.
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2 Councilmembers AYES NAYS ABSTAIN
3 NEGRETE X
4 CURLIN X
5 HERNANDEZ X
6 OBERHELMAN X
7 DEVLIN X
8 POPE-LUDLAM X
ABSENT
9 MILLER
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The foregoing resolution is hereby approved this 9th
day of
November , 1995.
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Tom M1nor, Mayor
City of San Bernardino
Approved as to form
17 and legal content:
18 JAMES F. PENMAN
City Attorney
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By:
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PROPOSED SUCCESSION PlANNING PACKAGE
FOR
PIONEER MEMORIAL CEMETERY
SAN BERNARDINO, CALIFORNIA
SEPTEMBER 20, 1995
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According to a Fall, 1989 article in the Pre-Arrangement Association
magazine,
. . . "if you're selling your funeral home, take control of the process by building a case for
your business - before talking to a single possible buyer. It's ten times more complicated
to sell than to buy. If you want to set the conditions and terms for a sale that will bring
the most benefits to you, then it takes a lot of work and preparation."
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CONTENTS
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Summary of Proposal
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II. Project Description 2
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1 III. Project Team 4
J IV. The ACMC Advantage 5
J V. Succession Planning Package and Fees 6
VI. Exclusive Succession Planning Agreement 7
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I. SUMMARY OF PROPOSAL
-: American Cemetery/Mortuary Consultants (ACMC) is pleased to present this proposal to the
City of San Bernardino for the succession planning of Pioneer Memorial Cemetery in San
Bernardino, California.
Our objective is to sell the cemetery on a timely basis while maximizing the financial return
to the City of San Bernardino. Accordingly, our services encompass the following:
A. "Sellers Package." We will compile an information package to be distributed to
potential buyers. The package will put the cemetery in the best possible light and
emphasize the benefits of ownership. This 'prospectus', and who it will be sent to,
will be approved by the City of San Bernardino before distribution.
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B. National Exposure. We will achieve the maximum potential exposure for the
cemetery through a two phased packaging approach that will not involve any
advertising in cemetery/funeral home trade magazines. This approach will also
ensure confidentiality which will help avoid disruptions in relationships with
employees, customers and suppliers.
Through our international reputation and contacts the initial phase will involve an
offer process which will allow the potential buyers to submit an offer for the
purchase of the assets/stock of Pioneer Memorial Cemetery. We believe that the
offer process will create a competitive atmosphere causing the buyers to make their
best offer.
C. Close The Sale. After the City has identified the best offer, we will work with the
buyer and seller to facilitate a smooth and expeditious close of the sale. Our
professional experience will be helpful in avoiding problems and resolving issues
that might otherwise impede progress and disrupt the transaction.
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II. PROJECT DESCRIPTION
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A. Overview. The succession planning for the cemetery as proposed by ACMC, will
consist of preparing a Seller's Package, conducting an offer procedure, and assisting
in negotiations with the buyer leading to a close of the sale.
B. Seller's Package Elements. The sellers package will feature important information
about the cemetery both historical and financial information, which will help to
widen the field of qualified buyers. The package includes:
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1. A written prospectus. This written document will summarize in an orderly
manner, the detailed financial information on the cemetery. The financial
data will include historical results and pro-forma projections of various
scenarios for the future. The format will be easy to follow and the
projections will enable the buyer to readily understand the earning
potential of the property.
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Identify the Buyer.
1. Qualify the Buyer. ACMC will discuss this opportunity with existing
contacts as well as new contacts to identify those prospects with the
highest levels of interest and the capability to buy the cemetery. The
Seller's Package will only go to those deemed to be "qualified" buyers
(subject to approval by the City).
2. Offer procedure. Only those prospects who have signed a Non-
Disclosure Agreement will be allowed to participate in the offer process.
Prospects will be sent the complete Seller's Package including the written
prospectus. In addition, prospects will receive information that sets forth
the terms for the negotiation process. Among other things, this information
will establish a time limit for acceptance of offers. Buyers will be
instructed to submit their offers in the form of a Letter of Intent with the
understanding that the seller reserves the right not to accept any offer.
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Once the offers have been received, ACMC will meet with the City to
review all offers and determine the best offer considering price and
qualifications of the buyer. Also as part of this process, ACMC will meet
with qualified buyers and give tours of the property.
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1 II. PROJECT DESCRIPTION (CONTINUED)
D. Assist in Negotiating and Closing the Sale.
1. Professional help in structuring the sale.
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. Support with legal documents. The customary representations and
warranties in an acquisition agreement can be subdivided into six
major areas: 1) Financial statements and accounting issues 2) Legal
organization and capital structure 3) Condition and title of assets that
will cover environmental issues including underground storage tanks,
hazardous waste, etc. 4) Contractual relationships 5) Employment and
labor-related issues including union contracts, pension plans, and
health benefits 6) Lawsuits and taxes.
. Stock sale vs. asset sale. When a buyer acquires the stock of the
corporation, it takes over the entity with whatever liability the
corporation is subject to. In an asset transaction the buyer acquires
only the assets subject to the liabilities that it is willing to assume.
. Counsel the City of San Bernardino on issues relating to timing of the
sale.
. Inform potential buyer of pertinent cemetery and funeral laws of
California.
. Help draft any management contracts needed to retain key people.
2. Assist in negotiations between seller and buyer.
. As quoted from American Cemetel)' Magazine. June 1990, on
acquisitions, "The degree of responsibility a seller and buyer willingly
assume depends on the bargaining leverage of the parties. It is hoped,
that with assistance from experienced professionals, both sellers and
buyers will be in better positions to negotiate transactions and avoid
some of the problem areas.'
. Meet with the City when necessary.
. Provide ongoing stimulus to the buyer by providing recommendations
for enhancing the operations of the property.
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III. PROJECT TEAM
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Project Management
· American Cemetery/Mortuary Consultants, Chicago, Illinois. ACMC will
manage the project ACMe's project team consists of:
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· Lawrence C. Anspach, President and Chief Operating Officer of ACMC
and formerly Vice-President and owner of Chicago's Cedar Park Cemetery
and Funeral Home. Mr. Anspach has been active with national, state, and
regional associations in the death care industry since 1973. He has been
featured in the Wall Street lournal. U.S. News and World Report. US
Magazine. USA Today. and many others. He is a past board member of
the Board of Directors of the American Cemetery Association and the Pre-
Arrangement Association.
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. Mr. William C. Henning, who founded ACMC in 1961 and has served
leading cemeteries and funeral homes in the United States and abroad
with appraisal, brokerage, operational analysis' and general business
consultation.
· William N. Anspach, CPA, is past treasurer of the American Cemetery
Association and its auditor for twenty five years, Mr. Anspach currently is
Chairman of the Cemetery Care Advisory Board of the State of Illinois. He
has advised many management groups, as well as federal and state taxing
authorities on cemetery tax and other matters.
. Richard B. Paskin, CPA has seventeen years of experience in management
consulting, much of it with Touche Ross & Company. He has served
companies of various sizes in diversified industries including Sears, United
Airlines, and Bekin Van lines.
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· William N. Anspach, Jr. is an attorney who specializes in pensions and
corporate law. He has drafted stock and asset purchase agreements, for
buyers and sellers in the death care industry.
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IV. THE ACMC ADVANTAGE
Our proposed succession planning package offers the City of San Bernardino the
following important advantages:
1. Extensive experience in the death care industry.
. Our project team has many years of experience in the death care industry.
This proven expertise offers assurance that the "sellers package" will reflect
the highest standards of quality available. The impressive credentials of
our principals include multiple national and state held offices in the death
care industry. ACMC has been in business for 35 years and has performed
over 1,000 cemetery and funeral home appraisals and brokered over
$300,000,000 in sales.
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2. Proven results in acquisition/succession planning.
. Our project team has successfully completed acquisitions for local and
national buyers. This also results in smooth transitions for employees and
business associates as well as avoiding disruption in day to day operations.
Experience of American Cemetery/Mortuary Consultants over the years has
indicated that sellers get better results by using professional assistance. As
a rule this is best accomplished by using the broker in his fullest capacities.
The larger the field of prospects, the stronger the likelihood that
simultaneous interest can be created, which usually leads to a better
offer(s). A professional broker can deal objectively with all buyers, whereas
the seller is usually a "prejudiced party" in any negotiations.
3. Extensive management experience.
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. Our project team possesses a breath and depth of management experience
beyond that required to help selllbuy specific businesses. These
backgrounds en.ompass executive and management level positions with
organizations such as Touche Ross & Company (now Oeloitte & Touche).
This experience in managing the 'bigger picture' ensures that the entire
package will achieve its objectives and be delivered in the established
guidelines.
4. Added value for the dollars invested.
. Our proposed package will significantly increase the price of the stock.
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VI. EXCLUSIVE SUCCESSION PLANNING AGREEMENT
l The American Cemetery/Mortuary Consultants, Inc. hereinafter referred to as Agents, are
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hereby employed to sell the cemetery known as Pioneer Memorial Cemetery located in San
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Bernardino, California, hereinafter referred to as Seller, together with the control of all trust
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funds, all undeveloped land, and all other assets owned or controlled by said cemetery.
The cemetery shall be offered for sale on the following terms and conditions:
Cash
For their services, the BUYER shall pay the Agents a commission according to the attached fee
schedule of the gross sale, said commission to be paid when a sales contract has been
executed by the Buyer and the transaction has been closed.
It is understood and agreed that the Agents have the exclusive right to sell the above named
cemetery for a period of three months from the date of this agreement
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prospective purchaser any time before this agreement has expired that this agreement will be
automatically extended to cover the full period of time necessary to complete negotiations and
consummate a sale.
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VI. EXCLUSIVE SUCCESSION PLANNING AGREEMENT (CONTINUED)
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It is further understood and agreed by the parties hereto that if at any time within three months
after the expiration of this agreement should the Seller make a sale to any prospective Buyer
with whom Agents had previously negotiated for the sale of the cemetery, the Agents shall be
paid their full commission on the gross selling price the same as if the transaction had been
closed during the term of this Agreement.
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It is further agreed that the seller is to furnish the Agents with copies of Articles of
Incorporation, current financial statements, and any other information which, in the judgement
of the agents, is needed to properly interest a prospective purchaser. Such information is to
be regarded as confidential and is to be shown only to interested prospects for the purchase
of the property.
Witnesseth our hands this
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dayof~.191r
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By:
EMETVY/M RTU
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SELLER
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Authorized Officer
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ATTACHMENT
v. SUCCESSION PlANNING PACKAGE AND FEES
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ACMC will sell Pioneer Memorial Cemetery as described in Section II and summarized below.
As part of ACMe's package, all travel expenses, the prospectus, any other expenses, and time
of the project team are included in the following fee schedule, the BUYER will pay our fee:
Sale up to $1,000,000
Fee of 6% of gross Sale Price
Fee of 6% of first
$1,000,000; plus 5% of any
amount between $1,000,000
- $2,000,000 of gross sales
price
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Sale between $1,000,000 - $2,000,000
Sale between $2,000,000 - $3,000,000
Above schedule; plus 4% of
any amount between
$2,000,000 - $3,000,000 of
gross sales price
Sale between $3,000,000 - $4,000,000
Above schedule; plus 3% of
any amount between
$3,000,000 - $4,000,000 of
gross sales price
Sale between $4,000,000 - $5,000,000
Above schedule; plus 2% of
any amount between
$4,000,000 - $5,000,000 of
gross sales price
Sale over $5,000,000
Above schedule; plus 1 % of
any amount over $5,000,000
of gross sales price
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ACMe
American Cemetery/Mortuary Consultants
848 West Eastman Street. Suite 205. Chicago. IL 60622
(800) 888-8602 (312) 440-0031 FAX (312) 951-1285
Lawrence C. Anspach
President
September 20, 1995
Personal and Confidential
(C(Q)[Plf
Mr. Fred Wilson, Assistant City Administrator
City of San Bernardino
300 North D Street
San Bernardino, California 92418
Dear Mr. Wilson:
Pursuant to our telephone conversation of today, this letter confirms our understanding of
the terms and objectives of our engagement and the nature and limitations of the services
provided by ACMe.
Based upon information provided, we will compile a fair market value of Pioneer Memorial
Cemetery in San Bernardino, California. We understand the purpose of this appraisal is for
evaluating a proposed divestiture. The appraisal includes the following: 1.) a site visit, 2.)
review of the books and records and financial statements, 3.) review of the facilities,
administrative and sales operation, and 4.) an appraisal report.
Our engagement cannot be relied upon to disclose errors, irregularities, or illegal acts,
including fraud or defalcations, that may exist However, if we find evidence of the above,
we will so advise you.
Our fee basis is as follows:
L. Anspach
R. Paskin
Staff
$150 per hour against $750 per 5 hour day
$100 per hour against $500 per 5 hour day
$50 to $75 per hour
Most appraisals average $3,500-$4,500 for fees, depending on the condition of records and
availability of maps, etc. The above does not include travel expenses. Normally, we
should be able to fly in and back on the same day.
We have enclosed an appraisal questionnaire which should be completed as thoroughly as
possible before our arrival.
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September 20, 1995
Mr. Fred Wilson
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Of course, all information relating to your operation will remain confidential.
We have also enclosed our brochure and several articles that may be of interest to you.
If the foregoing is in accordance with your understanding, please sign a copy of this letter
in the space provided and return it to us in the enclosed, self-addressed envelope.
If you have any questions, please contact us at our toll free number. We look forward to
hearing fr m you.
YO.lf.,, " i
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C. Anspach
LCA/jar
Enclosure
Acknowledged by
Date: