HomeMy WebLinkAbout16-Community Development
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CITY OF ~N BBRI6:RDINO - RBQUBST .:n. COUNCIL ACTION
From: Kenneth J. Henderson, Director
Dept: community Development
Dfte: December 29, 1988
Subject:
UNDERWRITER SERVICES FOR
CITY/HOUSING AUTHORITY/SAN
BERNARDINO HOSPITAL SENIOR
HOUSING COMPLEX
Synopsis of Previous Council action:
On November 17, 1986, the Mayor and Common Council approved in concept
the development of a fifty (50) unit senior housing complex by city,
the Housing Authority and San Bernardino Community Hospital.
On June 20, 1988, the Mayor and Common Council received and filed
status report and directed staff to prepare a detailed financing plan.
On August 1, 1988, the Mayor and .Common Council authorized the issuance
of a Requests for Proposals (RFP) for bond underwriter/financial
advisor services for issuance of bonds not to exceed 2.0 million
dollars to assist with the financing of a fifty (50) unit ~enior
housing complex at the corner of 17th and Flores Streets.
Racommended motion:
Adopt Resolution
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Contact person:
Ken Henderson/Maurice Oliva
Phone:
5065
Supporting data attached:
Staff Report
Ward:
6
FUNDING REQUIREMENTS:
Amount:
N/A
Source: (Acct. No.!
N/A
(Acct. DescriDtion)
N/A
Finance:
Council Notes:
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SYNOPSIS OF PREVIOUS COUNCIL ACTION (continued...)
On December 19, 1988, the Mayor and Common Council approved the
selection of Erlich Bober and company, Inc., as the underwriter
for city/Housing Authority/San Bernardino community Hospital
Senior Housing Complex.
12/29/88
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CITY OF SAN _RN~DINO - ReQUEST F~ COUNCIL ACTION
STAFF REPORT
In November, 1986, the Mayor and Common Council approved in
concept the development of a fifty (50) unit senior citizen
apartment complex in conjunction with the Housing Authority of
the county of San Bernardino and the San Bernardino Community
Hospital. Subsequently on June 20, 1988, the Mayor and Common
Council received and filed a status report and directed staff to
prepare a detailed financing plan. On the same date,
representatives of Mudge Rose Guthrie Alexander and Ferndon were
introduced to represent the City of San Bernardino for the
issuance of a bond to pay the city's share of the proposed 3.0
million dollar project.
On August 1, 1988, the Mayor and Common Council authorized the
issuance of a Request for Proposals (RFP) for bond underwriter
services for issuance of a bond not to exceed 2.0 million
dollars. The City will use said bond to finance its share of the
proposed 3.0 million dollar project.
On December 19, 1988, the Mayor and Common Council approved the
selection of Erlich Bober and Company, Inc., as underwriter for
the City/Housing Authority/San Bernardino Hospital Senior Housing
Complex and directed the City Attorney to prepare the appropriate
documents for approval by the Mayor and Common Council on January
3, 1989. Due to the abbreviated work weeks during the holidays,
staff was unable to meet said deadline.
I recommend that the Mayor and Common Council adopt the attached
resolution authorizing the Mayor to execute the attached
agreement between the city and Erlich Bober and Company, Inc.
Development
I<JH/MLO/lab/2085
attachments
12/29/88
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RESOLUTION NO.
2. RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
EXECUTION OF THE AGREEMENT FOR UNDERWRITING SERVICES WIT~ EHRLICH
3 BOBER & CO., INC., INITIATING PROCEEDINGS FOR DEVELOPMENT OF A
FIFTY (50) UNIT SENIOR CITIZEN HOUSING PROJECT IN THE CITY OF SAN
4 BERNARDINO.
5 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE
6 CITY OF SAN BERNARDINO AS FOLLOWS:
7 The Mayor is hereby authorized to enter into and execute on
8 behalf of the City of San Bernardino the Agreement for
9 Underwri ting Services attached hereto marked Exhibit" A" and
10 incorporated herein by this reference, to initiate proceedings
11 for development of a fifty (50) unit senior citizen housing
12 project in the City of San Bernardino.
13 I HEREBY CERTIFY that the foregoing resolution was duly
14 adopted by the Mayor and Common Council of the City of San
15
Bernardino, at a
meeting held on the
day
16
of
,19 ,by the following vote, to wit:
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20
21
22
23
AYES:
Council Members
NAYS:
ABSENT:
City Clerk
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25
26
27
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January 6, 1989
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1 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
EXEUCTION OF THE AGREEMENT FOR UNDERWRITING SERVICES WITH EHRLICH
2 BOBER & CO., INC., INITIATING PROCEEDINGS FOR DEVELOPMENT OF A
FIFTY (50) UNIT SENIOR CITIZEN HOUSING PROJECT IN THE CITY OF SAN
3 BERNARDINO.
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The foregoing resolution is hereby approved this
6
day of
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9
Approved as to form and
legal content:
, 19_
Evlyn Wilcox, Mayor
City of San Bernardino
JAME~NMAN' City .ttorney
By:J--~
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January 6, 1989
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AGREEMENT FOR UNDERWRITING SERVICES
THIS AGREEMENT, made this __________day of
19
, by and between the City of San
Bernardino, . California (hereinafter called the "City"), and
EHRLICH BOBER & CO., INC.
(hereinafter called the "Underwriter"):
WITNESSETH:
WHEREAS, the City proposes to initiate proceedings for
development of a fifty (50) unit senior citizen housing project
in the City of San Bernardino; and,
WHEREAS, the City requires assistance in the
development of a sound, equitable and practical financing plan to
implement the Project by taking into consideration those matters
set forth in the "Suggested Scope of Services" attached and
labeled Attachment "1" to the "Request for Proposals for
Financial Advisory and/or Underwriting Services" bearing date of
7-21-88, a copy of which is attached hereto as Exhibit "A" and by
this reference made a part hereof; and,
WHEREAS, the City requires the services of a
professional underwriter experienced in financial consulting for
and underwriting the obligations of cities to assist in such
financial planning and to coordinate the sale and distribution of
the City's obligations; and,
WHEREAS, the Underwriter asserts that it is qualified
by training and experience to perform said services;
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January 6, 1989
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NOW, THEREFORE, it is mutually agreed as follows, to
wit:
The City hereby employs the Underwriter and the
Underwriter hereby accepts such employment to perform the
services, upon the terms, subject to the conditions, and in
consideration of payments as hereinafter set forth:
I. Scope of Services to be performed by the Underwriter.
A. Structuring the Financing:
1. Underwriter will work with City in
~eveloping the scope of the
financial feasibility and assessing
the marketability of the project.
2. Underwriter will work with the
City's bond counsel recommending
specific terms and conditions
affecting the basic security of the
Bonds.
3. Underwriter will prepare the text
of an Official Statement for sale
of the securities.. Said Official
Statement will include a
description of the Bonds and their
security, and pertinent financial
and economic data. In preparation
of the Official Statements,
underwriter will exercise due
diligence in the ascertainment of
all material facts and
circumstances regarding the project
and their disclosure in the
prospectus.
4. Underwriter will be present at any
necessary information meeting or
meetings.
5. If the City so requests,
Underwriter will assist in
arranging the selection of a paying
agent.
6. Other services are as set forth in
Section 6 of Underwriter's
"Proposal for Underwriting
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January 6, 1989
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Services.." dated September 9,
1988, a copy of which is attached
hereto as Exhibit "B" and by this
reference made a part hereof.
B. Marketing the Bonds.
1. The Underwriters' earnings from
the discounting and sale of the
bonds shall be its sole
compensation under this agreement,
except as otherwise specifically
set forth herein. The
Underwriter's discount is
contingent upon the bond sale.
2. Underwriter will submit an offer to
the City to purchase the bonds
subject to pertinent resolutions,
the Official Statement, and all
other necessary documents,
approvals, and proceedings
governing such Bonds having been
determined by bond counsel, the
City, and the Underwriter to be
satisfactory in all respects for
financing purposes. If after
negotiations with Underwriter, in
good faith, the City and
Underwriter fail to agree on terms
of sale of the Bonds, the City may
terminate this agreement, then
offer the bonds for sale to others.
II. General Provisions Relating to the City and the Investment
Banker:
A. The City agrees to cooperate with Underwriter
by making available copies of economic and
financial reports, agreements, contracts,
resolutions, and other relevant documents
pertaining to the project, the City or the
Bonds as reasonably may be required from time
to time for prompt and efficient performance
by Underwriter of their obligations
hereunder.
B. Underwriter shall pay its own out-Of-pocket
and other expenses, the cost of the
preparation of the Official Statement,
Underwriter's Counsel, Blue Sky and
Investment Memoranda used by the Underwriter.
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January 6, 1989
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C. The City shall pay from the proceeds of the
Bonds or other funds of the City all costs
and expenses customarily paid therefrom,
including the cost of printing the Bonds, the
Official Statement and other documents, the
fees and expenses of its legal counsel, bond
counsel, consultants, accountants, and of any
other experts retained by the City in
connection with the financing. Such expenses
may inClude those costs set forth in the
"Costs of Issuance", a copy of which is
attached hereto as Exhibit "CO and by this
reference made a part hereof as though fully
set out at this point. The parties hereby
acknowledge that the specific fees set forth
therein are estimates only.
D. It is expressly understood and agreed and the
City hereby recognizes that in performing its
activities pursuant to a negotiated sale that
Underwriter is acting solely on its own
behalf and plans to submit to the City a
proposal to purchase the Bonds for resale.
Nothing herein shall be construed to make the
Underwriter an employee or agent of the City,
and Underwriter shall be at all times an
independent contractor.
E. The term of this agreement shall extend to
the date of sale of the Bonds as contemplated
herein, as determined by the date upon which
the formal Bond Purchase Contract is executed
by the City and Underwriter, or the term of
this Agreement shall be two (2) years from
the date hereof, whichever is longer. This
Agreement may be cancelled without cause by
either party by giving the other party thirty
(30) days written notice of such
cancellation. Said notice shall be sent to
the party by certified mail at the following
addresses:
CITY OF SAN BERNARDINO
EHRLICH BOBER & CO.,
INC.
Director of Community
Development
300 North "D" Street
San Bernardino, CA
92418
401 Wilshire Boulevard
Suite 1250
Santa Monica, CA 90401
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January 6, 1989
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F.
The City may terminate this Agreement if,
after negotiations in good faith, the City
and Underwriter fail to agree on mutually
acceptable terms of sale of the Bonds. Upon
termination of this Agreement, the City shall
be under no further obligation to the
Underwriter hereunder, except that the City
is obligated to pay to the Underwriter any
expenses incurred on behalf of the City
pursuant to Paragraph II B of this Agreement
should the City not sell the Bonds to the
underwriter pursuant to Section I (B) of this
Agreement.
THIS AGREEMENT shall not be amended except upon the
III.
express written Agreement of the parties hereto to such
amendment.
IV. THIS AGREEMENT and any documents or instruments
attached hereto or referred to herein integrate or terms and
conditions mentioned herein or incidental hereto, and supersede
all negotiations and prior writing in respect to the subject
matter hereof.
In the event of conflict between the terms, conditions
or provisions of this Agreement, and any such document or
instrument, the terms and conditions of this Agreement shall
prevail.
IN WITNESS WHEREOF, said City has caused these
presents to be properly executed, and said Underwriter has caused
these presents to be executed by one of its officers, as of the
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date hereinabove set forth.
ATTEST:
CITY OF SAN BERNARDINO
BY:
Evlyn Wilcox, Mayor
City of San Bernardino
City Clerk
EHRLICH BOBER & CO., INC.
BY:
Dawn Vincent
Approved as to form and
legal content:
JAMES F. PENMAN, City Attorney
BY'-r~'~
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January 6, 1989
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C" ~ ~ UM _~NDDI):)'
(DII.Ia'ft znr.r r-1Df1' EI!BRDtDI'l' '
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RlGP'l' Jal ~
rat i'INMtcDL ~ MIVGt ~ .L.&'.uG 8I!RYlClS
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'Dw O:ImIJnity Dev81.....-at DeprtIIl8nt of tM city of San Il8rnard1no ~
to retain a f1nanc1a1 adviBar ar un:!er<<itel' to _ia in tM ent:J.cipat:e4
i.-1aI'IOll of Jxn! financJJ'q net to a:-4 two 1Ii111a\ donAIW ($2,000,000)
~ tM ~ of fintlncinlJ tM dlr.Ml., k. of . fifty (lid) at ~
~ ~ in tM city of San Jl8l1lardlno. .
'Dw total COBt of tM project is esthated at ~.Hi-te1y t:hne Jdllia'l
dollars ($3,000,000). 'DIe project is an eprtIlent ~- fell: M\1c&'
citizens en fbBd h,:- ..- <Pd-rilY SSI and SSl ~) and 1IllUld
1nclUlSa a IUltip1rpose facUty far leaur., 8IU:at1cna1 -,/ee lMICat.1a-al
activities. on. ptOject will be located en awradMte1.y two point fi".
(2.5) acres at tM tutuxe con.. of nares and 17th streeta. on. saoject
will nq.Ure tM CXII'I8tzuct.ien of both nares and . 17th SL....... and
hwtallaticn of certain off.ita hptOWlll8l'lta relater! to tM ~'''i~ of
aid ~.
'Dw project will be financed as a joint wntme bableen tM city of Slln
BaJ:nardino, tM Hcus1n;r Authority of the 0Dlty of San Il8rnard1no and
~ Health Can SystaB, Inc., tM puwat C""II"'''W' of SIIri Iunudino
oa-..uty Hospital. Arrc:IioIl8lld Health ~ Syst8I, IIlC., will 1.- tM
lanS to tM Jbls1n;r Authorky far thirty (30) )'eIXW with two (2) twl (10)
~ opticns ar thirty fi". (35) )'WUS with ~ (3) a". (5) }WI' eptiaw
f<< aw dollar ($1.00) PE ~ fee the life of the 1_ and aftecte:l
cp:.iaw. '!hi Hcus1n;r AUthority and the city will share in fiJllrdnJ tM
CXl8t of the project descrlJ:led aIxl'M. '!hi Hcus1n;r Authcrity will CIlII'l and
cpnta the project. 'DIe Authority will pay far arc:h1~Jml and
enJineer1n;r Services and ~admately cnHlalf (1/2) of tM pmject COBt
(estimated at eN point five IIIillien dollars ($1,!500,000)) with lta ClIlft
.a.s",eJ JJe8.
'Dw city .....')'Jfl. to pay ita share of tM project CXl8t (estDated at
i . aKllOOmately cna point five lIill1cn dollars ($1,!500,000)) Ily.. of
i a.rt.er City NotelI.'DIe city inteniI to __ a Lblited Cbligaticn Imn
I ~__,t Rever'IJ8 lIenS in an aJllCU1t not to ~ blo millien dollars
~ ($2,000,000), and City will retin the bon:S Ily pledg1n;r a pcrtien of ita
, biIInty perc8It (2Ot) bcus1n:J set_ide turds generated trc. .Ie.'( fu1
1:~_lt saoject ana.
Recent city of Slln Bernardino Redevel........ent 1qn:J tax iI......""""'lt
projecticns 1rdicate tbat in fiscal year 1987/1988 three (3) of its eleven
(U) project areas proch,.., $245,548 in twenty perCleIlt (2ot) ho.Is~ set
aside turds since JUne, 1987. '!be total set-aside funjsen deposit as of
March 31, 1988 was reported at $381,476. Hcus1n;r set-aside inccne fraa the
Northwest, Tri~ity ard South Valle project areas bas been lnc:reu~
fifteen percent (1st) to twenty percent (2ot) arnmlly.
7/21/88
1
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,: .. paq.crv of ~ Qect, the City hM 8eleet.s..~ 0lUlM1 tbI
fSD of JbtJe sa. ~, Alexarder MIS Fvdc:n.
1IlDJ-- ....'t-r...tlAftt8 '
'DIe City ..... . tbllnc1a1 CCIWUlt8nt ell" ~ter ., will play .
l....k.wp role ~ the t&O:-1 ~I pwida ccnt!nalty of PlhGIIlI1,
n __ tile City ~ the .. ~......1ate MIS cx.t~w wy
to .auct:uN tblllcnI financing 16 ~ to IIII8t the nea of "- City,' the
~inJ Authority, MIS the ArrtMlead Health care~, Inc. r "'~~Il,s.a
to th1e IU'P D.IBt IIIlw . fUll servi~ oft1ae in Scuthml Cal1fcn1a MIS be
8b1e to dsalStnte their ccaptence an:! CXIIIId.t:mmt to tm ... I ntul .
fJMnc1n) of .i.nvly sized i....._.' 'Dw City wishea to mNalM the tu.
n effort recp1nd of its statf an:! other ccnsultanta to ..0(' ,-lUb .
tllIex r fill f1nanc1nJ. (Attac.tlmBnt "1" pzw1des a detaUed de8cr1pt.iCl\ of
the eerviOll8 recp1nd.)
Pt".. ...1 ead:AntJI
'JbI City relpISta the respordents to this' IU'P pzw1de, at . Jdnbm, the
Itsas mHcated be1Cl1i:
1. I'll.., ift"""iaw
'1b1a IMlCtiCl\ of the ~....osal IhW4 indicate breldthof exprience of
JQJE' f1m in van.c.. types of l:lcnI finllnoed pcojecta 1n&tabn Ilr
cit1ell an:! pA J8l.......-lt agenc1_. Incl\de desc:rlp:1aw of)"CUr f1m'.
invol.. .t in st:l'ucturirq and d8ve1opirq 1mcwati". ~ plans and
t.ettln1cpls involv1rq the. sale of bc:irld8 to the aniclpal bc:nl1lUtcet and
~ the scv10es listed in Atta.J......t "1..
Please 1nclude at least three (3) references of clieD fell" .. )"CUr
fiD has pertomed recellt adv!soJ:y services (within the last ~ (3)
years) . Also"'- ~ibe the st:ructure of JQJE' f1m, JUII)&r of tllplayees,
locatJ.CI\ of offiOll8 and its capital ba!le. If possible, Jnc1w. a recellt
auaited f1nanc1al sta~.
P.l.-...-.l. frca tins t.ha~ do not meet t.hA ,....,..,f.ea,4Y1I:s aJt:lbted .~
will not be ccnli......-.
2. "..""... of Rann....
Attachment "1" pzwides a list of the serviOll8 the City will expect to
be provided by the selected financial advisor,lurxleNriter. '!be "seep
of serviOll8" sect.1C1\ of the pt",,,,,,,,,' shcW.d 1cJentify arrJ IIDi1ficatiaw,
delet1aw or diticrw to the listed services, as well as a descript:iCl\
of the nature and extent of services be1n;J prClpO"""'.
Mlltiooally, the pl"q'O'$"l shcW.d (a) outline the prel1minaxy financinJ
st:rucbn'e ~. ~; (b) state ~tber credit enhanoement: ~d be
neoes~~"Y; (c) state anticipated debt service coverage nq.drements;
and, (d) subait a list of prcx::edural. steps involved together with a
proposed timetable.
3. Financin] thc:t.. and n-o..-""""t-iCl\
7/21/88
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'b ~.~ Ihcu14 incl. an -.!ate of fJnmc1n; cmtw Jnc1~
f_ en! e:lIpII'ISlI U8O(l1at.elS with the f...1InOI of tblllc:nS ..s Sn:Uilate
~ tbeIe cmtw vl11 be CICI'ltJ.I9nt qx:n alceq of the .-1e of the
1:lcriltII.
(0
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Pl_ r 7ibe tbI ..... ~-'.l ntS I*-...t trc:. )'QIr fim 1)11>> vl11 ...
d1nct lUllS prJ.zy respcndbillty fer the ~kD of ~ n 1ft)
vl1111att with the City to arrarJlIe the ..... ,< ntS fiJwlcSJl;. Pl-.
pcov1de reso- lUllS ot:bar 1nfonatian regarcUn; tbeJr ~ m
.1.41ft' f1naneJnga lUllS f1nancJ.a1l1lMaxy 1Iatt. in gerwnl. ..
-'~lm. "".........161 INlV not: be .......tt,...... withmt ~ wrl~
AlIlAtCMll bYthI CiQra
Se1ectien Crl....-4.
O:nIultants IIhall be selected thrcu11 review of the 1daitt8lS ......._,.,
u.iDJ the follClllinJ criteria:
1. ne.......aatfen of specific a.u....ot lUllS extensive experiInoe ri tractt
reo.A4 in atJ:uct:urinq am coordina~ bend financJJIgI .. pem1tW
1nSer califomia lav.
2. --,,'CIIlSiWl - of the .",,'-ten to the pxovis1cns an! critcia of thia
Rl'P.
3. Pleadb!1ity in talloriDJ the stm::tum of f1nan::iJ9a (e.9.,
a.xtizatien, CXlIIerIlCJ8 ri reselW aspects) to the IpeC'if!c needlI of the
City.
4. Elcperienoe, lplificatiaw, cont:imity lUllS availability of ataff
--i9ned to the ptOVisiCl'l of the adv1sorj'lnSetwrl~ ...nc-.
5. ..... ri expel s..
A Ibdt.ed JUd:ler of fiDs '1IIA'J be invited to oral 1nterviewa pdcr to the
awud of a ccntract for servic:-..
AA1ectim ~".
Five (5) ccpies of ......'-ions in IespCIlSolI to this Rf'P IILISt be nceiwc2 by
the City no later than 4:00 p.m., PDl', August 31, 1988, at the foll~
acih 1"1:
City of san Bemardino
c:amamJ.ty Devel_1t Department
300 North "D" Sl......ot, 5th near
san Bernardino, 0. 92418
Attn: Maurice oliva, HcusfnJ Devel"t"....,t specialist
Not:hin;I in this RFP shall be de elm to oamdt the City to engage arrJ
financIal consultant and/or urdeJ:Writer or to ~ooeed with the sale of arrJ
bcrds. No ill' V--l coet:s will be reiDtiurser:l.
7/21/88
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Q:N~t1C1\ of the ....f_tcrw will occur. eoc:rl.. ~W. tGUadnIr
.. ~. deed1iJw anS fu. -.1ect.ed f<< on1 SraMM wU1 lie ClCd:IctalS
111" -~fAta1y after the pnlia1nuy ev8luat1cn t. ....",..~,
Ant ~ ~ thta RfP .. be di.r<<:telS to 1Ir. Oliva at 71~'
!5065.
,
7/21/88
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It:ta. '..M& -1-
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c:mr CI 8Alf V" lUDDO
CDIDf1'1'll IEYR'I-al' IIBRDBf1'
_-rg~
Jat PJlQNC:W, NN1JJJaf1 ~ tHBMUTIlG SDNICIS
tb~....IllWlfo" ~ of e.wvf-,-
'JtIII ..zv1c:.s liSted belClll an tbc8e cm....d:1y idintJ.fied to be Jll'C"Iided by
thell8lectled t!nanciallldvi.earf\lrll5e1'Wri.... ItnJ ~ telL'
~fiaat1aw to thIse Ml'Yi~ IIhculd be Jncluded In the ...~
._4ttelS in l.~" to th!a RPP.
In QIn8Rl, the eelectad financial adYilIor~i'" ~ be rqdnd to
adYlse City staff and otbelwiae ooordinate the 1"" ,,<l88d fiMnr::iJl;.
'Iba initial ...nc- NpirecS vill be to CCI'BJlt with City .taff
ngardinIJ the pti1c t1nancin;J q:Jt1clrw aya41abl. felL' the ..~cnd
~, and JIIWide adY1ce, ocurwe1 lUllS ~ .. to f ~'
e1 w. lHdl ~ ~ - ,,11* the pl. of the City in . "4_', lid
ClCI8t-ettect1w faIIdal.. 'lba aISvilIor.f\nSetm'" ~ tIIIn be asbd to
fJmlize the t1mnc1nJ plan and ~ the fo1lc:Jldnr) serYi~1
1. Pnpare and reo- --.-.1 MlClItizat1cn 1ICbellJl_ far the 1""...,)8Id
tiMnr::iJl;. .
.
2. ArraJ9t an! hplment: p:oc*"n:a1 step tar the finllncin1.
3. Maka rec,. ........datiaw regardirlg the financial ccntent of
resolutiaw, noti~ of ea1., lUllS other ~-a.
4. PrepBre an! revise, as xecpasted by City staft an! cxnilU1tanta,
the Ofticial statementa and other ~-m.atial tar the
tinancinJ.
5. Q:lordinat8 the ....... ""~m, JBil1n;r and distribltim of the
notices of w., Official ~, an! other do(,-a, if
arPJ, to \ll'derwrit.era and instit:uticN1 b1yers located
~ the 0t:J:d:ry to enccurage the best ........-ft.1tiw
bi.c:kUnl) fez the tJ.nanc::1Jq.
6. Assist in CIt:Itainirq bcrld ratin;ls trcm M:xldys mVor st.an:!aM
and PoarII, it ........."""iate.
7 . Assist in CIt:Itainirq Il'Unicipal bcrld insurance or other credit
enhanoement, if awrcPI"iate.
8. With due regard for the needs and nqrlrements of the City,
maJca l........,....maticns regarc:l1n;r t:Jmin) of the financinJ to taka
c::pthuII advantage of maJ:Ut ocnHtiaw. '
7/21/88
5
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t. Mn.. d,ty 8taft ~ to tile eelfCt1<<l of tile !lent Jldnten,
~:t.~~ =::=~~ dltaJNiv
10. It P11c1.y bJd, ...]....~.. bJdII tel' t:IIe~, Jdent1fy tile
1a .. bJd lid .. the City o...-ming awrd of tM
fiJwlcJnl.
11. 14.._~ tile c1o.1n; of tile f1nanc1n; end ac!vt. City.taft .
ccncemiJlg Jm..at-.t of fJnanc1n; ptQo"""", if ert'/, J*ll!ing
tbIir _pelll:liture by the City. Qx:b IllMce Ihcu1d 1ni::1D an1y
WI)' 880ft end i..ur.t ir&-..t.-lta 19 that tM City --- lID
rlak ~ re;mUng ~ty of princiPal end ~
nbDrn em 1m._t.-It.
lab/l081
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SECTION 6
SCOPE OF SERVICES
Listed below are the suggested scope of services that were provided by the City in its
request for proposals. Because we are proposing to serve the City as an underwriter, we
have deleted any services in connection with financial advisory services for a competitively
bid financing. However, we have added to this list several other services that Ehrlich
Bober would provide as underwriter for the City's proposed bond issue. These additions
are in boldface type.
1. Identify the advantages and disadvantages of alternative financing
structures including fixed rate and variable rate financing alternatives.
2. Advise the City on the appropriate financial structure of the issue,
including principal amount, maturity dates, coverage requirements,
interest payment dates and early redemption provisions.
3. Prepare and recommend amortization schedules for the proposed fmancing.
4. Arrange and implement procedural steps for the fmancing.
5. Make recommendations regarding the financial content of resolutions, and other
documents.
6. Prepare and revise, as requested by City staff and consultants, the Official Statements
and other documentation for the financing.
7. Assist in obtaining bond ratings from Moody's and/or Standard and Poors, if
appropriate.
8. Assist in obtaining municipal bond insurance or other credit enhancement, if
appropriate.
9. With due regard for the needs and requirements of the City, make recommendations
regarding timing of the financing to take optimum advantage of market conditions.
10. Advise City staff as to the selection of the bond printers, fiscal agents and paying
agents, including obtaining competitive bids, where appropriate.
11. Provide trade publications, including the Bond Buyer, with
information regarding the salient features and proposed sale date of the
transaction.
12. Analyze the market in the period prior to the sale of the issue to
determine the best method for marketing the securities, given
prevailing market conditions.
13. Develop an expected pricing scale, terms of offering and strategy for
the sale.
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14. AlT8llge the closing of the financing and advise City staff concerning investment of
financing proceeds, if any, pending their expenditure by the City. Such advice
should include only very secure and insured investments so that the City assumes no
risk whatsoever regarding security of principal and guaranteed return on investment.
IS. Compile a complete bond record for the City which will include all
details regarding the securities, their sale and the resulting payments
required for principal and interest, along with the respective dates of
such payments.
16. Compile a pricing report which compares the pricing and underwriter's
discount of the City issue to other similar issues on the market at that
time.
17. Supply any other information requested by the City with regard to the
issue, market information, operational consideration or other topics or
18. Continued monitoring of the City's unexpended bond proceeds so the
City can realize capital appreciation on its investment portfolio,
thereby eliminating any negative arbitrage that may have been present _
upon purchase of the initial portfolio. By using computer software
expressly designed for such "reoptimization," Ehrlich Bober will
structure the City investment portfolio subject to expenditure
requirements and market yields.
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COSTS OF ISSUANCE
The following is a list of the estimated costs of issuance assuming a $2,000,000 revenue
bond financing. These are the items that would not typically be payable from the
underwriter's discount We do not include the City's bond counsel fees as that is subject to
the City's selection and negotiation.
Trustee/RegistrarlPaying Agent
Bond Printing
Preliminary & Official Statement Printing
Rating Fee (if applicable)
Miscellaneous Expenses (2)
$5,000(1)
2,000
4,000
7,500
5,000(1)
.60-.90% x total debt service(1)
.75% x total outstanding principal(1)
plus 210 days of interest
.1 % x total outstanding principal(l)
plus 210 days of interest
Bond Insurance (if applicable)
Annual Letter of Credit Fee (if applicable)
Upfront Letter of Credit Fee (if applicable)
(1) These costs would be contingent on the bond sale.
(2) This would include the underwriter's out-of-state travel expenses and various
out-of-pocket expenses incurred by the issuer.
EXHIBIT C