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. '0 Qe No; 14.40-50 d
OF SAN BERNARDINO - REQUEST FOR COUNCIL"icTION
CITY
From:
ROGER G. HARDGRAVE, Di rect&fC'O. - AD lSl#)jeClil'F.
Dept:
Public Works/Engineering
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Authorization to Execute
Agreement for Investment
32 Banking Services -- (Cajon & June
AreaAcquisition District),
Assessllent District No. 971 -
(BATFMAN FTCHIFR_ HTII RTCHARDS)
Date:
July 10, 1989
Synopsis of Previous Council action:
5-15-89 ---- Authorization granted to proceed on Assessment Districts No. 977.
Recommended motion:
Adopt Resolution.
cc: Marshall Julian, City Administrator
Andrew Green, Finance Director
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Supporting data attached:
Verne Nadeau
Staff Report,
AgrE'l,:tmAn1- R. D,:tcn 1111-; nn
Phone:
J84-5026
6
Contact person:
Ward:
FUNDING REQUIREMENTS:
Amount:
$4J,980
Source: (AccLl'lQ.L-~6S1-S3925
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Council Notes:
Agenda Item No. ..f) 5
75-02b2
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'CITy'OF SAN BER~RDINO - REQUEST QR COUNCIL ACTION
STAFF REPORT
Request for proposals for investment banking services, in connection with
the Cajon & June Acquisition District, were sent to the following firms:
1. Ehrlich Bober
2. Dean Whitter Reynolds Inc.
* 3. Stone & Youngberg
4. Seidler-Fitzgerald
* 5. Chilton & O'Conner, Inc.
6. Crowell, Weedon & Co.
7. Sutro & Co.
* 8. Kelling, Northcross & Nobriga
9. Mr. William S. Mullin
* 10. Bateman Eichler, Hi 11 Richards, Inc.
Only those firms marked with an asterisk submitted a proposal.
These proposals were reviewed on 6-27-89 by an interview panel comprised of
tile fo 11 owi ng:
1. Crai g Graves, City Treasurer
2. Lorraine Velarde, Executive Assistant to Mayor
3. Fred Wilson, Assistant to the City Administrator
4. Gene Klatt, Assistant City Engineer
5. Verne Nadeau, Real Property Supervisor
Councilwoman Valerie Pope Ludlam was invited, however she was unavailable.
After carefully reviewing the qualifications and experience of these firms,
Bateman Eichler, Hill Richards, Inc. was selected as being the best qualified to
provide these services at this time.
The proposed Agreement for Investment Banking Services provides, in general,
that Bateman Eichler, Hill Richar<;ls, Inc. will provide normal underwriter ser-
vices for thlS assessment district. Their fee will be approximately $43.680,
which is 2J, of the total estimated project cost, as determined by negotiations at
tile time of the bond sale, based upon market conditions. They will receive no
fee in tile event that the district is not formed and bonds sold.
The total preliminary acquisition cost is $1,680,000. This amount could
change when final plans are prepared. Incidental costs and otller expenses in-
crease thp total estimated project cost to $2,184,000.
Since the services of an investment banker are needed for this assessment
district to proceed, we recommend that the Agreement for Investment Baking
Services be approved.
7-10-89
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75-0264
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RESOL UTION NO.
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
EXECUTION OF AN AGREEMENT WITH BATEMAN EICHLER, HILL RICHARDS,
INCORPORATED FOR INVESTMENT BANKING SERVICES FOR THE CAJON &
JUNE ACQUISITION DISTRICT, ASSESSMENT DISTRICT NO. 977.
BE IT RESOLVED BY THE MAYOR AND COM~10N COUNC IL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS:
6 SECTION 1. The Mayor is hereby authori zed and directed to
7 e)(ecute on behal f of said Ci ty an Agreement for .Investment
8 Banking Services with Bateman Eichler, Hill Richards,
9 Incorporated for the Cajon & June Area Acquisition District,
10 Assessment District No. 977, a copy of which is attached hereto
11 marked E)(hibit "A," and incorporated herein by reference as
12 fully as though set forth at length.
13 SECTION 2. This resolution is rescinded if the parties to
14 the Agreement for Investment Banking Services fail to e)(ecute
15 it within sixty (60) days of the passage of this resolution.
16 I HEREBY CERTIFY that the foregoing resol ution was duly
17 adopted by the Mayor and Common Council of the City of San
18 Bernardino at a meeting thereof, held
19 on the
_day of
, 1989, by the
20 following vote, to wit:
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AYES:Council Members
NAYS:
ABSENT:
Ci ty Clerk
-10- 89
RESO: AUTHO~ING EXECUTION OF AGREEMENT<:)TH BATEMAN EICHLER,
HILL RICHARDS FOR INVESTMENT BANKING SERVICES FOR ASSESSMEN
DISTRICT NO. 977.
1 The foregoi"g resol uti on is hereby approved thi s
day of
, 1989.
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Approved as to form
9 and legal content:
10 James F. Penman
City Attorney
W. R. "Bob" Holcomb, Mayor
City of San Bernardino
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By: I" I Y,'
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AGREEMENT FOR INVESTMENT BANKING SERVICES
THIS AGREEMENT is made and entered into this
day of
19 , by and between the CITY OF SAN. BERNARDINO, a municipal corporation,
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herei nafter call ell "City", and BATEMAN EICHLER, HILL RICHARDS, INC. herei na fter
called "Investment Sanker".
WITNESSETH
WHEREAS, Ci ty proposes to initi ate proceedi ngs for Assessment Distri ct No.
977 (Cajon & June Acquisition District) (the "Project"); and
WHEREflS, the City requires assistance in the development of a sound,
equitable and practical financing plan to implement the Project by taking into
consi dera ti on sources of capi tal 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 municipal investment banker
experienced in financial consulting for and underwriting the obligations of
cities to assist in such financial planning and 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 follows:
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:
I. Services to be performed by the Investment Banker:
7-10-89 EXHIBIT A
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A. Structuring the Financing:
Inves tment Banker wi 11 work with Ci ty in deve 1 opi ng the scope
of the fi nancial feasi bi 11 ty and assessi ng the marketability
of the project.
Investment Banker will work with the City's bond counsel
recommending specific terms and conditions affecting the
basic securi ty of the Bonds.
Investment Banker 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 date. In preparation of
the Official Statement, Investment Banker will exercise due
diligence in the ascertainment of all material facts and
circumstances regarding the project and their disclosure in
the prospectus.
Investment Banker will be present at any necessary information
meeting or meetings.
If the City so requests, Investment Banker will assi st in
arranging the selection of a paying agent.
B. Marketing the Bonds:
1.
2.
3.
4.
5.
1. Investment Banker will use its best efforts to accompli sh the
formal marketing at the earliest date possible consistent with
sound investment banking and underwriting principles.
Investment Banker agrees to use its best efforts in
establishing the interest rate or rates and discounts on the
bonds. It is intended that, once purchased by the Investment
Banker, the Bonds will be re-offered to the public on the
basis of an immediate "bona fide public offering". Investment
Banker may form a group of i nves tment ban ki ng fl rm s for the
purpose of underwriting and selling the Bonds. Investment
Banker's earnings from such sale shall be its sole
compensation under this Agreement except as otherwi se
specifically set forth herein.
2. Investment Banker will submit an offer to the City to purchase
the bonds SUbject to perti nent resol uti ons, the Offi cia 1
Statement, and all other necessary documents, approvals, and
proceedings governing such Bonds having been determined by
bond counsel, the City, and the Underwri ter to be satisfactory
in all respects for financing purposes. If after negotiations
with Investment Banker, in good faith, the City and Investment
Banker fail to agree on terms of sale of the Bonds, the Ci ty
may termi na te this Agreement, then offer the Bonds for sale to
others.
7-10-89 EXHIBIT A
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II. General Provisions Relating to the City and the Investment Banker:
A. The City agrees to cooperate with Investment Banker 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 Investment Banker of their
obli gations hereunder.
B. Investment Banker 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 Investment Banker
and all advertising expenses in connection with the public offering of
theBonds.
C. The Ci ty 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
wi th the fi nanci ng.
D. It is expressly understood and agreed and the City hereby recognizes
that in performing its activities pursuant to a negotiated sale that
Investment Sanker 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 Underwri ter an employee or agent of the
City, Investment Banker 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 Investment Banker or
the term of this Agreement shall be two (2) years from the date hereof,
whichever is longer. Thi s Agreement may be cancelled wi thout cause by
either party by giYi ng the other party thirty (30) days wri tten noti ce
of such cancellation. Said notice shall be sent to the party by
certified mail at the following address:
CITY OF SAN BERNARDINO
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INVESTMENT BANKER
Roger G. Hardgrave
Director of Public Works/
City Engineer
300 North "On Street
San Bernardino, CA 92418
BATEMAN EICHLER, HILL RICHARDS, INC.
700 South Flower Street
Los Angeles, CA 90017-4259
Attn: Ms. Pamela Newcomb
F. The City may terminate this Agreement if, after negotiations in good
faith, the City and Bateman Eichler, Hill Richards Inc. fail to agree on mutually
7-10-89
EXHIBIT A
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acceptable terms of sale of the Bonds. Upon termination of this
A9reement. the City shall be under. no further obligation to the
Underwri ter hereunder. excep t tha t the Ci ty is ob 11 ga ted 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 B of this Agreement.
THIS AGREEMENT shall not be amended except upon the express wri tten
agreement of the parties hereto to such amendment.
THIS AGREEMENT and any documents or instruments attached hereto or referred
to herein integrate all terms and conditions mentioned herein or incidental
hereto, and supercede 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 Investment Banker, has caused these presents to be executed
by one of its officers, as of the date hereinabove set forth.
BATEMAN EICHLER, HILL RICHARDS, INC.
CITY OF SAN BERNARDINO
a minicipal corporation
BY , \-~~ ~,,-'-~ UJvvJ.o-
Pame 18 Newcomb
First Vice President-Public Finance
BY
t~ayor
ATTEST:
APPROVED AS TO FORM
and LEGAL CONTENT:
James F. Penman
Ci ty Attorney
City Clerk
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7-10-89
EXHIBIT A
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