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Redevelopment Agency . City of San Bernardino
300 Nonh "D" Stree~ Fourth Floor . San Bernardino. California 92418
(714) 384-5081 FAX (714) 888-9413
Pride .I
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APRI L 6, 1990
STATUS REPORT ON THE AGREEMENT HITH HOOD-HUSING
AND ASSOCIATES FOR FINANCIAL SERVICES
Synopsis of Previous Commission/Council/Committee Action:
04-02-90 Community Development Commission received and filed the first
Agreement with Hood-Huslng and Associates for financial services.
Recommended Motion:
(COMMUNITY DEVELOPMENT COMMISSION)
Move to receive and file the attached status report from Hood-Husing
and Associates.
Respectfully Submitted,
~~~~~[j
Robert J. emp1e, xecutive Director
Supporting data attached: Yes
Funding requirements: NA
Hard: All
Project: All
Commission Notes:
1261A
Agenda of: April 9. 1990
Item No.:
(p
-- -
S T A F F R E P 0 R T
The firm's first agreement was to assist with the maximization of yields the
Agency can earn on its investment portfolio and maximize the leverage which
that portfolio gives the Agency In obtaining loanable funds from the banking
community. Initially, the firm of Hood-Huslng and Associates assisted in the
negotiation of a loan to the Agency to, in turn, be loaned to H.A.B.
Development for the construction of off-site improvements located south of
Interstate 215 between Cable Creek and the Devil 's Canyon flood control
channel, and Wood-Huslng and Associates assisted In negotiating a maximum line
of credit for use on similar future projects. Also, Hood-Husing undertook a
review of the cost, risk and rate of return from alternate investment
strategies available consistent with the Agency's existing investment
policies. The first agreement was for a sum not to exc~ed $15,000, to be
billed at the rate of $125 per hour, plus reasonable expenses incurred by the
fl rm.
The second agreement with Hood-Husing and Associates is to assist the Agency
and Community Development formulate a package on the Orangewood Estates and to
assist the developer of the Hestside Shopping Center secure an anchor tenant.
This second agreement is not to exceed $15,000.
Attached, for your review, is a report from Hood-Husing and Associates
outlining the status of work accomplished on the first and on the second
agreement.
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HUSING
& ASSOCIATES
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April 3, 1990
Mr. Robert Temple, Acting Director
San Bernardino Redevelopment Agency
300 North "0" Street
San Bernardino, CA 92418
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Dear Bob:
At your request I have commented below on the four projects
which Wood-Husing is currently engaged in, on behalf of
the agency. In each case I have outlined our charge fro~
RDA, as we understand it, the amount of time which has
been expended to date, and a rough estimate of the amount
of time required to finish the item,
In general let me indicate that the amount of time which
Wood-Husing will devote to these and similar efforts on
the agency's behalf cannot be estimated with precision
because of the nature of the work. We believe we have
estimated on the high side below.
Investment Policv
In order to maximize the yield which RDA receives from
its investment portfolio, the agency has asked Wood-Husing
to review the rates of return and risks of varying
investment strategies and recommend an appropriate manner
for the agency to handle its funds in the future.
In this light, we have interviewed a variety of local
bank managers, regional managers, investment portfolio
managers and floor traders at each major bank with whom
the agency does business as well as the city treasurer.
In addition we have reviewed the RDA' s existing portfolio
and investment policy and held talks with the City
Treasurer. We are scheduled to talk with two additional
banks and two brokerage houses.
Our work has focused on the current investment strategy
and how RDA should consider amending it. The al ternati ves
appear to be: maintaining current practice, working out
a relationship where staff works with one institution's
floor trader to place orders for a wider variety of
investment instruments with equal safety levels but higher
IA
wmD'
HUSING
& ASSOCIATES
yields, having the City Treasurer invest RDA' s funds, and
paying a major insti tution to manage the agency I s portfolio
sUbject to RDA policies.
Each of these options has positive and negative aspects
which will be outlined in our final report by the end of
April.
Time invested to date:
Additional Time:
Total
32.5 hours.
.3.2...2 hours.
65.0 hours.
Cost:
Cost:
: Cost:
$4,062.50
14.062.50
$8,125.00
HAB Loan Packaae
In order to maximize the use of its scarce resources, the
RDA apparently wishes to find ways to leverage its assets
to obtain bank loans to finance some of its efforts.
Currently some loans have been written for as much as
prime plus points with compensating balances. RDA has
asked Wood-Husing to find a way to obtain such funds at
more competitive rates.
As part of our conversations with the major banks we have
discussed rates and methods of obtaining this funding for
RDA. In effect the agency would appear to have some
packages which will qualify for below prime as they can
be viewed as tax exempt lending by the loaning agency.
Other packages will be at commercial rates, but close to
prime because of the RDA's strong balance sheet.
The first package to
be the RAB package.
week for review.
go be placed before the banks will
It is complete and going out this
Time invested to date:
Additional Time:
Total
31.0 hours.
1.L.Q hours.
45.0 hours.
Cost:
Cost:
Cost:
$3,875
U.750
$5,625
Dukes-Dukes Low/Mod Develooment
The RDA apparently wishes to insure that the affordable
housing project proposed by Dukes-Dukes and Associates,
Inc., and approved by the Mayor and Common Council,
succeed, but with a minimum risk to the agency, while
achieving maximum compatibility with commercial yields,
risk levels and security. Wood-Husing was requested to
work with RDA, the Community Development Department and
Dukes-Dukes and recommend a package which would achieve
these objectives.
WOOD'
HUSING
& ASSOCIATES
(
Wood-Husing has accomplished all of these objectives and
a report has been placed in the hands of the agency. The
only additional effort on our part might be in assisting
RDA, Community Development or the City Attorney's office
in putting together final documents or implementing the
agreement...hence the 10 hours shown below..
Time invested to date:
Additional Time:
Total
30,0 hours.
1Q...Q hours.
40.0 hours.
Cost:
Cost:
Cost:
$3,750
Sl.250
$5,000
Wests ide ShoDDina Center
The RDA apparently wishes to see a shbpping center built
on the Wests ide of San Bernardino at Baseline and Medical
Center Drive. Wood-Husing has been asked to assist the
developer in find an anchor food store tenant.
Time invested to date:
Additional Time:
Total
1. 0 hours.
~ hours.
16.0 hours.
Cost:
Cost:
Cost:
$ 125
11.875
$2,000
SummarY Contracts I and II
Authorized Contract Time:
Expected Time:
Unused Time:
240 hours.
1.2.6. hours.
74 hours.
Cost:
Cost:
Cost:
$30,000
120.750
$ 9,250
Very tru y yours,
.~)
J n E. Husing, Ph.D.
Senior Partner