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HomeMy WebLinkAbout1986-422 SBE077-2/1527S/kl 8/5/86 RESOLUTION NO. 86-422 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING CERTAIN PROPOSALS AND AGREEMENTS (BOND COUNSEL AND UNDERWRITER) WHEREAS, the Ci ty of '-San Bernardino, Cal ifornia (the "City"), has been requested to cormnence study of the feasibility of issuing refunding bonds pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds (Streets and Highways Code of the State of California, Section 9500, et seq.) (the "1984 Act") to refund the outstanding principal balance of the $13,400,000 City of San Bernardino, Improvement Bonds, Assessment District No. 961, Series 1985 (Park Centre) (the "Refunded Bonds"); and WHEREAS, Miller & Schroeder Financial, Inc. (the "Underwr iter" ), has submitted a proposal to act as an underwr iter and assist the City and the City Staff in determining the financial feasibility of issuing refunding bonds of the City, and to select appropriate methods of refinancing Assessment District No. 961; and WHEREAS, it is desirable for the Underwriter and the Ci ty to enter into an agreement whereby the respective rights, obligations and duties of the Underwriter and the City may be set forth with respect thereto; and WHEREAS, Sabo & Dei tsch, a Professional Corporation ("Bond Counsel"), has submitted a proposal to serve as Bond Counsel to the - 1 - Ci ty in connection wi th the issuance of refunding bonds to refund the Refunded Bonds; and WHEREAS, it is desirable for Bond Counsel and the City to enter into an agreement whereby the respective rights, obligations and duties of Bond Counsel and the City may be set forth wi th respect thereto. NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. The Ci ty hereby approves the agreements as attached hereto as Exhibi ts "A" and "B" of the Underwri ter and Bond Counsel, respectively, and incorporated herein by reference and made a part hereof. Section 2. The City further authorizes the Mayor and City Clerk to execute and date said agreements with the Underwriter and Bond Counsel wi th the seal of the Ci ty to be affixed thereto subject to approval thereof by the City Attorney. Section 3. The source of payment wi th respect to said agreements as herein approved and the financial obligations of the City relative thereto shall be solely from the sale of the tax-exempt refunding bonds or other obligations of the City as provided in said agreements and not from any other funds or moneys of the City. - 2 - Section 4. This Resolution shall take effect upon adoption. I HEREBY adopted by the San Bernardino at held on the 20th the following vote, CERTIFY that the foregoing Mayor and Common Council a regular day of October to wit: resolution was duly of the Ci ty of meeting thereof, 1986 , by AYES: Council Members Estrada, Reilly, H~rnann~7., Marks, Ouiel, Frazier, Srrir.klAr NAYS: None ABSENT: None ~/?~~~ Ci ty Clerk day of The foregoing resolution is hereby approved this 0</-4t- October , 1986. J)/ Mayor of he City of San Bernardino Approved as to form: J.'I~~~~ r" Ci ty Attorney - 3 - 1 AGREEMENT FOR INVESTMENT BANKING SERVICES THIS AGREEMENT, made this ;4.-day of LJr~) , 1986, by and between the City of San Bernardino, California, (hereinafter called the "City"), party of the first part, and MILLER & SCHROEDER FINANCIAL, INC., 505 Lomas Santa Fe Drive, Solana Beach, California, (hereinafter called the "Investment Banker"), party of the second part: WITNESSETH: WHEREAS, the City may initiate proceedings for a Refunding of Assessment District No. 961 (Tri-Cities) (the "Project"); 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 sources of capital funds and cash flow requirements, annual costs, the allocation of those costs, statutory requirements and restrictions, and alternate methods, if applicable; and WHEREAS, the City requires the services of a public finance investment banker experienced in financial consulting and underwriting to assist in financial planning, to purchase the City's obligations at negotiated sale, and to coordinate the sale and distribution of the City's obligations; and WHEREAS, the City has determined that the Investment Banker IS qualified by training and experience to perform said services; NOW, THEREFORE, it is mutually agreed as follo~'s, to wit: The City hereby employs the Investment Banker and the Investment Banker hereby accepts such employment to perform the services, upon the terms, subject to the conditions, and in consideration of payments as hereinafter set forth: Services to be Performed by the Investment Banker: The Investment Banker shall perform in a diligent manner the following services: 1. Assemble, review, and analyze available financial and economic data and information that may have a general bearing on a program for financing the Project. 2. Based on the foregoing analysis, prepare a general review and description of the Project and outline the possible methods of financing such Project, the advantages and disadvantages of each method as applied to the Project, the general legal and practical requirements or restrictions applicable to each method and their attendant costs. 3. Assist Bond Counsel with the preparation of necessary resolutions and other legal documents and make recommendations as to the exact terms and conditions under which bonds are to be issued and sold, including timing and method of sale, final amortization or repayment schedules, call and redemption features, provisions governing the issuance of additional bonds, covenants, and other provisions in order to secure the best possible rating on the bonds. if. Prepare the text and other material for an Official Statement or bond prospectus describing the improvements, the bonds, their security, and economic and financial information on the City. 5. Take such steps as are necessary to achieve the City's objectives and protect its interests in this refunding including recommendations designed to reduce costs and interest rates to the lowest level consistent with other fina..'1cial and legal requirements. 2 I I 6. The Investment Banker shall be available at reasonable times by telephone or at the offices of the City to discuss on a continuing basis the results of studies and analyses and generate such additional information as described or requested and consult with the City as to the financial aspects of any specific project then being considered. 7. Sale of Bonds; Compensation Unless the private sale of the City's obligations is prohibited by law, the City and the Investment Banker shall enter into a bond purchase agreement for the sale of the obligations to the Investment Banker bearing interest at rates and at such discount as may be mutually agreeable to the City and the Investment Banker. The purchase of such obligations shall be subject to the standard and customary conditions of obligations of a similar nature including an unqualified legal opinion of nationally recognized bond counsel with respect to the validity and tax-exempt status of such obligations. For issues of the City's obligations that are sold to the Investment Banker at private sale, the bond discount shall represent the Investment Banker's compensation and neither the City nor the City shall be liable to the Investment Banker for any additional fees whatsoever. It is understood that the Investment Banker's compensation may be greater than the discount to the extent that market conditions allow the obligations to be resold at the price in excess of their par value. The reasonable expectation of such premium, if any, may be taken into account in determining the interest rate or rates and discount on the obligations. 8. In accordance with the terms and conditions of the Bond Purchase Contract, the Investment Banker shall, from the bond discount bear all sales, management, underwriting, and out-of-pocket costs and expenses, including, without limitation, travel, telephone, telegraph, stenographic work and the like, incurred by the Investment Banker in Performing the Investment Banker's duties and obligations, unless the incurring of such costs and expenses is specifically authorized in writing by the City. The Investment Banker is not responsible for and shall not be held liable for any other expense or expendi ture in connection with the financing program. 3 9. The term of this Agreement shall be two (2) years from the date hereof, but may be cancelled without cause by either party by giving the other party thirty (30) days written notice of such cancellation. IN WITNESS WHEREOF, said City, party of the first part, has caused these presents to be properly executed, and said Investment Banker, party of the second part, has caused these presents to be executed by one of its officers, as of the date hereinabove set forth. ATTEST: THE CITY OF SAN BERNARDINO By 1iJ-,j!~t~~) /1 A/Lo-;/ ~///~~~ /' Secretary MILLER & SCHROEDER FINANCIAL, INC. (SEAL) By if SABO & DEITSCH A PROFESSIONAL CORPORATION ATTORNEYS AT LAW SUITE 400 6320 CANOGA AVENUE WOODLAND HILLS. CALIFORNIA 91367 (818) 704-0195 TELECOPIER (818) 704-4729 October 20, 1986 Honorable Mayor and Councilmembers City Hall 300 North "D" Street San Bernardino, California 92418 Honorable Mayor and Councilmembers: This proposal is being submitted for your consideration in connection with the issuance by the City of San Bernardino, California (the "Ci ty") , of certain refunding bonds pursuant to the laws of the State of California in an aggregate principal amount not to ex, eed $15,000,000 in connection with the refunding of the $13,400,000 City of San Bernardino, Improvement Bonds, Assessment District No. 961 (Park Centre), Series 1985, by the issuance of ref unding bonds (the liRe fund ing Bonds"). The Refunding Bonds may be issued pursuant to the provisions of applicable State laws and in particular the Refunding Act of 1984 for 1915 Improvement Act Bonds (Streets and Highways Code of the State of California, Section 9500, et seq.). The role of this Firm in such financing would be to represent the interests of the City while serving as Bond Counsel to the City and rendering the requisite opinion or opinions to the purchaser of the Refunding Bonds to be issued by the City as to legality for issuance under the laws of the State of California and the exemption of interest on such obligations from applicable federal and State income taxation. As stated above, this Firm shall serve as Bond Counsel to the City for the issuance of the Refunding Bonds, and, in connection therewith, the services of Bond Counsel would be to prepare all legal documents and filings necessary to implement the issuance of the Refunding Bonds, to attend such meeting or meetings of the Mayor and Common Council of the City of San Bernardino, California (the "Mayor and Common Council"), as appropriate, at which action on the issuance of the Refunding Bonds would be taken at your request, to supervise the proceedings step-by-step as taken to be certain that all necessary procedures are conducted in the proper manner and at the proper times, to consult with members of the City Staff and with the City Attorney and the Underwri ter in the preparation of documents and in the schedul ing of actions in connection with the issuance of the Refunding Bonds, preparation of the necessary agreements and resolutions for approval and adoption by the City, including, but not limited to, the Resolution of Intention, the Resolution of Issuance and all closing documents, and to supervise the delivery of the Refunding Bonds, conduct the closing thereof and provide the approving opinion or opinions at the time relating to legality and exemptions from taxation. EXHIBIT "B" Page 2 For these services, the total fees for Bond Counsel services would be (i) one percent (1%) for the first two million five hundred thousand dollars ($2,500,000) of the principal amount of the Refunding Bonds plus (ii) one-quarter percent (1/4%) of amounts in excess of $2,500,000 for the Refunding Bonds so issued by the City plus out-of-pocket expenses to the extent provided below. It is expressly unders tood and agreed that this employment let ter wi th regard to said percentage fee for Bond Counsel services and out-of-pocket expendi tures of Bond Counsel are contingent upon the successful sale and delivery of the Refunding Bonds. This Firm shall be compensated for- out-of-pocket expenses incurred as Bond Counsel solely upon the delivery of the Refunding Bonds from the proceeds thereof. Out-of-pocket expenses include such items as travel, long-distance telephone calls, messenger services, telecopying, photocopying, secretarial overtime and word processing charges and other similar expenses plus administrative charges in connection with such out-of-pocket expenses related to such issuance of the Refunding Bonds if and when Refunding Bonds are actually issued and delivered. Such out-of-pocket expenses shall be in addition to the' Bond Counsel fee if the Refunding Bonds in one or more series are in fact issued. In connection with Special Counsel services for the above-mentioned issue of Refunding Bonds, the compensation shall be based on the following hourly fee schedule: Principal Attorneys Associate Attorneys Paralegals and law clerks $135 per hour $100 per hour $ 65 per hour The foregoing hourly fee schedule will be exclusive of out-of-pocket expenses, including, but not limited to, telephone, messenger services, photocopying, postage and similar charges. If the terms as outlined herein are satisfactory, please indicate acceptance hereof by the City by the execution of the acceptance in the form provided below thereby employing this Firm as Bond Counsel to the City upon the terms stated herein, and return an executed copy of this letter. Respectfully yours, SABO & DEITSCH A PROFESSIONAL CORPORATION ~ TJS:sg Enclosure /1823S Page 3 ACCEPTANCE The law firm of SABO & DEITSCH, A PROFESS IONAL CORPORATION, is hereby employed as Bond Counsel to the City of San Bernardino, in accordance with the terms of the foregoing letter. Dated: b~~/ , 1986 f--uf~~,)A ~~ _ Mayor of t e C1ty of San Berna~ California ' (SEAL) ATTEST: ~#~~ cfty Clerk of the City of San Bernardino Approved as to Form: ~4P ) Jff::to rney