HomeMy WebLinkAbout12-Economic Development Agency
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CITY OF SAN BERNSdtDINO - REQUEST .g.. COUNCIL ACTION
From: Kenneth J. Henderson, Director
Subject:
UNDERWRITER SERVICES FOR
CITY/HOUSING AUTHORITY/SAN
BERNARDINO COMMUNITY HOSPITAL
SEBIOR ROUS"'" COIIPLE~
Dept: Community Development
Om: March 2, 1989
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 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 Request 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 senior housing complex
at the corner of 17th and Flores Streets.
(SYNOPSIS CONTINUED TO NEXT PAGE...)
Recommended motion:
Adopt Resolution
Contact person:
Ken Henderson
Phone:
5065
Supporting data atteched:
Staff Report
Ward:
6
FUNDING REQUIREMENTS:
Amount:
N/A
Source: (Acct. No.)
N/A
(Acct. Description)
N/A
Finence:
Council Notes:
~41)
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SYNOPSIS OP PREVIOUS COUBCIL ACTION CONTIRUBD...
On December 19, 1988, the Mayor and Common Council approved
the selection of Ehrlich Bober and Company, Inc., as under-
writer for the joint venture housing project.
On March 13, 1989, the Mayor and Common Council took action
substituting stone and Youngberg for Ehrlich Bober and
Company, Inc., as underwriter for the subject project.
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CITY OF SAN BERNiRDINO -
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REQUEST FOR COUNCIL ACTION
STAFF REPORT
On March 13, 1989, the Mayor and Common Council voided the
original procurement, repealed the appropriate resolution and
authorized staff to substitute stone and YoungDerg as under-
writer for the City/Housing Authority/San Bernardino Com-
munity Hospital senior housing complex. The Mayor and Common
Council approved the substitution of underwriters Decause the
project management team at Ehrlich BODer and Company, Inc.,
had left the firm and were subsequently employed DY Stone and
Youngberg, and the fact that the personal expertise and
experience of the project management team was the single most
important factor in their selection.
The attached resolution and agreement have been prepared by
the City Attorney's office pursuant to previous Council
action. This agreement formalizes the relationship between
the City and Stone and Youngberg relating to underwriting
services for the subject project.
I recommend adoption of the attached resolution.
Development
KJH/lab
03/02/89
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RESOLUTION NO.
2 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
EXECUTION OF THE AGREEMENT FOR UNDERWRITING SERVICES WITH STONE &
3 YOUNGBERG, 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
SECTION 1. The Mayor is hereby authorized to enter into
8 and execute on behalf of the City of San Bernardino the Agreement
9 for Underwriting 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
SECTION 2. Resolution No. 89-17 is hereby repealed.
14 I HEREBY CERTIFY that the foregoing resolution was duly
15 adopted by the Mayor and Common Council of the City of San
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Bernardino, at a
of
meeting held on the
, 19__, by the following vote, to wit:
day
AYES:
Council Members
NAYS:
21
ABSENT:
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City Clerk
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JFW:ss
February 8, 1989
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1 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
EXEUCTION OF THE AGREEMENT FOR UNDERWRITING SERVICES WITH STONE &
2 YOUNGBERG, INITIATING PROCEEDINGS FOR DEVELOPMENT OF A FIFTY (50)
UNIT SENIOR CITIZEN HOUSING PROJECT IN THE CITY OF SAN
3 BERNARDINO.
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5
day of
The foregoing resolution is hereby approved this
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9
Approved as to form and
legal content:
,19_
Evlyn Wilcox, Mayor
City of San Bernardino
JAMES~itY Attor~y
BY:.I.: IJ.~)
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JFW:ss
February 8, 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
STONE & YOUNGBERG, (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" as
Exhibit "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 objections of cities to assist in such
financial planning and to coordinate the sale and distribution of
the City's obligations; and,
WHEREAS, the City has determined that the underwriter
is qualified by training and experience to perform said services;
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JFW:ss
February 9, 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
developing 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. I f the City so requests,
underwriter will assist in
arranging the selection of a paying
agent.
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JFW:ss
February 9, 1989
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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.
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 proceeding s
governing such Bonds having been
determined by bond counsel, the
City, and the underwriter to be
satisfactory in all respects for
financing purposes. I f 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.
3. Other services are as set forth in
Section 6 of Erlich Bober's
"Proposal for Underwriting
Services. . ." dated September 9,
1988, a copy of which is attached
hereto as Exhibit "B" and by this
reference made a part hereof, as
incorporated in letter of February
3, 1989, from underwriter, a copy
of which is attached hereto as
Exhibit "B-1" and by this reference
made a part hereof.
II. General Provisions Relating to he 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.
JFW:ss
March 6, 1989
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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.
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 "c" 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
300 North "0" Street
San Bernardino, CA
92418
STONE & YOUNGBERG
15260 Ventura Blvd.
Sherman Oaks, CA 91403
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February 9, 1989
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F. The Ci ty 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 lIB of this Agreement
should the City not sell the Bonds to the
underwriter pursuant to Section B of this
Agreement.
G. The parties identified in Exhibit "B-1" as
being responsible for the processing of the
transaction shall continue such
responsibility, except upon twenty (20) days
prior written notice to the City of a change
in such personnel; except that William A.
Reynolds shall be available for the
processing of this transaction on an as-
needed basis, as set forth in Exhibit B-1.
THIS AGREEMENT shall not be amended except upon the express
written Agreement of the parties hereto to such amendment.
THIS AGREEMENT and any documents or instruments
attached hereto or referred to herein integrate or terms and
conditions mentioned herein or incidental hereto, and supercedes
all negotiations and prior writing in respect to he 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.
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March 6, 1989
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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
date hereinabove set forth.
CITY OF SAN BERNARDINO
ATTEST:
BY:
Evlyn Wilcox, Mayor
City of San Bernardino
City Clerk
STONE & YOUNGBERG
BY:
Approved as to form and
legal content:
:::"~t~rn.Y
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JFW:ss
February 9, 1989
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C1'l'lf CI lAM __IMDDD
~ II.VEUIMDft' IEfARDtDrl' 0
....,"
" "1M\' JIat JIIU(lSAU
!at J'DIMC'.IAL 1l1!J1llBI ~ tM.:~WIU"I'.uG 8IaYIc:.
..:a'
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... 'v"~
'lbI O:IIIII.I'dty C8IIe1......,..ar4: DeputmInt Of tm City of SIn 8amUdlJlO dIeu.
to ntain a f1.nm:1a1 &lM.eor or unc!8rwriter to ...t.t in tJ>> ant:1c1pat:.s
c-WlCe Of JxnS finlnc1n) not to ~ two aUl1cn ckI11.,. ($2,000,000)
rar. tbI pI1'lXlNOf f1nancInJ the dev81~lt of . fifty (50) at ~
bQ>>1nIJ poject in tbI City of san 1Iemal'd1no. "
'lbI total cat Of tbI poject is estJmatecS at .........vt-te1y t2.- .ulb
6)11... ($3;000,000). 'Jba poject is an aprtment cad- tar ~
c1tize1w en f!Dd inc. ..- (ildinarl1y SSI and sa nc!p1era) and WOlJ14
include a 1111t1pnpcee faci1ty for leisure, ecb:at:1cn1 ~ea' IlYllC8t!cN1
act1v1ti_. 'Jba project will be locatelS en ~-te1y two point fi".
(2.5) itocreS at tbI ~ comer Of Flores and 17th BU._t.. 'Dla Jll"Oj<<lt
v:l11 rec:pira the OCIIWtructicn of both Flores and 17th st..-.. and
. bwta11atien Of certain Offsite ~ relatecl to tJ>> CCIIp1.ucn Of
aid 1IIll...-ta.
::.= will be f1nancecS as a joint wntw:e betlJe.en tbI Clty Of SIn
, tbI Jba1n) Autharity of tbI Qlunt:y of SIn 8ImIl'diJIo -
An'clIoIlead Health Can Syst8I, Inc., the pannt ............,rw Of sari IllImUdlno
o-.-1I\ity Hospital. Arrc:llobead Health ex, Syst8I, IrlC., v1l1 ,.. tbI
lard to the 1bIs1ng AuthorJq for thirty (30) ~ with two (2) _ (10)
J'NIZ' opt1crw ea' thirty fi". (35) )'Un with tm. (3) fl". (5) ~ .i<N
f'a: cne dollar ($1.00) pc ~ fea' tbI lif. of tbI 1_ _ ar-... .
qlticne. 'Dla IbIsq AUthcrity and the Clty will lIhare In f!nlnr::iin; tbI
ccst of the poject ~ aI:ll:PM. 'Dla Hcus!ng Authcdty v1l1 CMl and
cpente the pI'Oj<<lt. 'Dla Authority will pay for aretUteot:tJralIlld
en)ineer1ng iIeririclIs and ~te1.y CN-balf (1/2) of tbllIIVJ<<lt cat
(eStJmat8d at cne point fi". aUlicn dollars ($1,500,000)) with lta CMl
....alJlS.
'lbI Clty .....,< II to pay ita IIhare of tbI poject cc.t (eRDated at
aWt-.:>>dmate1.y one point fi". aUlicn dollars ($1,500,000)) ~~
a.xtar City~. 'Dla City 1nI:eIm to s... a Lblite:l (1)1 lam
~........a.nt ReYenJe Ilonlt in an amount not. to ~ two JIillien dollars
($2,000,000), and City vill xetire the bend by pledgini a portion of ita
tweuty I""lcellot (2Ot) bcus!ng set-aside funds generated fraI OIl - · tul
~.........t poject areas.
:As :M"It City of san Bernardino RedeYe1"t".a1t 1q!n:J tax 1r~......nt
projectiaw hldicate \:bat in fiscal year 1987/1988 three (3) of ita eleven
(ll) project areas pl'Odlloed $245,548 in twenty percent (2~) MBq set
aside.fium since JUne, 1987. '!he total set-aside turds en deposit as of
Maxd1 31, 1988 was reported at $381,476. 1b.IS!ng set-aside 1n:xme fraa the
Nor1;tr.Iest, Tri~ty and South Valle project areas has been 1nc:reaslni
fifteen percent (1st) to twenty percent (2ot) arlI'"AWly.
7/21/88
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. EXHIBIT A
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'.' . .. PAlXs. 01 W. ~~l tM Cl~ hM Nlecte4 ..'Cd ocuw1 the
fiD of ~ .. QiMe AlexanSIr' InrS JUdcn.
aam-- ~'h"'~'
'!hi ~.... . flMnc1a1 ccrwu1tant ClI" \ldetvrit.er . vW. play .
1-... lO1e ~ the ~lfI, ~ OCI'Itbulty of ........lel,
.-d __ tilt Cl~ ~ the .. ~.....1ata ..s cmt...rtect1w wy
to mueture the lien! tJnancinJ ~ to -.t the.. ct tile Ci~,'the
1lcu8Jn; Authcll-lty, ri tbe Am:liNecI Health care ~ Inc. f- p(lmru
1:0 this RPP IIBt ...... a fUll 8el'Yloe office in Scmbem Cllifcada ..s lie
able to dcQ,..~..t:e the1r ~ ri ~tamt to tM IWC fUl.
rJ.n8ncin; of ...41..ly .1zec! .' on. City ~ to .mhd.ze the tJaa
.-d effort ~ of ita 8taff and other ccnsultarJta to avo ...,.U_ .
1I\1OOInfUl financ.tnJ. (Attadw.at "1" provides a det'JIlt1<<! '~1f'%iptlcn of
. tt. eerv1c. recp1ricS.)
Pi.-, - - IiaA 1 c:tlnt.Ant:a
'!hi dty recpst8 the respcrdents to this' RPP ptW1de, lit a 1Iinbua, tbe
ita. inlli:ateS be1Cl1fS
1. I'",.' i(J.....iaw
~ eectlcn of tbe ~.~ shaJ14 indlc:ate breadth of ~ of
JQIZ' fim in varlcua tw- of b:nS financed pmjecb 1hSeltabn by
c1t1ee ri P"'rve1",""",Jt agenc1_. Inc1\de de8c:::dptJaw of JQIZ' tha'.
inYolWlll8lIt 1n .uucturinJ and deY81c:pinJ imcNati.... t1nanch1; p1arw and
~ inuolvinJ the. sale of b:nSe to the JUnf~l b::nS..,. and
~ tbe 88lV1ce8 11sted in Att-J.....1t "1.. .
Pl._ incl_ at least ~ (3) references of c11e1U fCE' 1IIxD JQIZ'
fim has perfCD8! recent advisaty ..m.0llII (within tM 1ut tm. (3)
)'8Ua). A180 -- an. the stlucb1re of JQIZ' fha, ...... of .~,
locat1a'1 of off1c. and ita capital be$e. If possible, incl_ . reoellt.
audlteS f1nancia1 ~.
Pl.-.."". fraa tIn. thai: do nat. ~ the r-rw'~.Clleu mtllNd .~
will net. be CXlnII.~ ,
2. ~ of _>Vf.-
Att-J__1t "I" prav1des a Hst of the sexv1ces tbe City will expect to
be pxovided by the selecteeS financial advisor,l\lrDnwritar. '1he "sccpe
of serv1oes" eect1a'1 of tbe ~.......-l. should 1dent.1ty Ilrf IIlOdiflc:at1cn1,
de1et1aw CE' adMtlCll8 to tbe lIsted sexv1ces, as well as a descr1pt1a'1
of tbe I'IIlture ri extent of services be~ ~. ,<&Id.
Mditiooally, the plq:>c~l should (a) outline tbe prelminaly financ~
structure ~",.osed; (b) state Wether credit eMalXlesDent \lOlld be
neoee~~ry; (c) state anticipateS debt service ooverage recpirements;
and, (d) Id:nit a list of prooedural steps involved together with a
~~~t~~. .
3. Finlmcina thc*. ri n-"""~iq]
7/21/88
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'DIe p;~111lcu1d ~_ In -.~ of tWnc!nl oa.t8 tnc1~
t_ n 1IIIpInI" rmo1at.s vitia t:bI1..... of tfie IlCIId lid !nlUCate
~ thMe ccM:8 v1l1 be ~ ... clc.ir9 of t:bI M1e of t:bI
beI_. .
4. - -,- ""~1. llIIiIlI::lo..4
Pl_..- a1be ttae ~.",:J.I!~_.'" ~ JQIr fila. vU1 ....
d1nct ri IldMzy l'tIIpCII_Jb ity fer' the Ill'CWiakn of ~ and ">>
vU1111ll1dt vltla t:hi City to ...~-. t:bI t"-,,<1I1! f1Mlc:Int. a..
pw1de 19$'- ri .A:2_ 1ntonat1c:ft ~ their ~ in
.f_f'~ f~ ri f1rlancDJ. ~ tIlldt. in 9IMl'd. DIlD
_1~t-. J"""-'...t MY not be ................ witllmt. ~ vrl~
-"""""".w tIw C:l.t;y~
lilA1ec1:im en.-W
a:..4tanta IIha11 be ae1~ ~ review of the 1Id:altte4 ~.",""'1~,
--119 the fo11Clldni c:rlterlaa
1. l:llli...olM.natica of specific Qlh.at ri exterm... experience an! t:nc:k
hOCI:4 in ~ an! ooordJnatlni lxn! financJngl .. pem!tte4
un5er caJ.1tamia 18.
2. --"I'<lflSiw-r I of the ......f....ica to tbe plWislcm anS criteria of tId8
JaIP.
3. n""lldhf1tty in ta11Cll'inJ' tile ~ of financb91 (e.,.,
811C1t'tizatiCn, COWl. and resezw aspects) to the "P"'cl.& - ,. of the
. City.
4. Elcperienoe, cpl1t1cat!CIIW, ccntiradty an! availability of 8tatt
--1gned to the ~1cn of the advi8or~tlni ..mc...
5. .... and ape ISI.
A lDited IIIIIler of fm. Day be invited to cnl 1nt:erv1e. p:icr to tbe
-..reS of a CXI1t:ract fell' ...,i(:.8.
.1ec1:icn Sc::hdJl.
Fl". (5) ccp.1es of .......f-iCIIW in Ie&pOtlf/l8 to thiI RFI' lUSt be reoelwd ~
the City no latar than 4:00 p..., PDI', August 31, 1988, at tbe follOltin:J
~ .:
City of San IlemardJno
CkImunlty Deve1..........t Depertment
300 North "D" Sl.._t, 5th FlOCII:'
San Ile%naxdlno, a. 92418
Attn: Maurice Oliva, HcusinJ Develcp....at ~iaUst
Noth!nq in thiI RFP shall be 1", mecl to OCIIIIIit the City to e11gaQ6 aTIf
tbJancIa1 ocnsultant and/or un3eJ:writar ell' to ptooeed with the sale of aTIf
bad8. No pl.....-I ocsts will be rehb.lrsed.
7/21/88
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0lIW1dent1~ 01 tM .t.c..1Clnl vl11 0CICIUl' .. IClCIl .. po-lMe tGUadncr
tbI .",. dlIId1wll'lll tm. 181ecte4 fw on1 lrt.eMM vlU .. ClClntacf.e4
t -~1ate1y after tM pnlialnaly ~uat!aI ia ~.....
~ ~ ~ tht. RPP .., lie cI1notecS to Mr. OUw at 714/314--
5065.
.
7/21/88
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t>
Attact..c -1-
Cl'1'If ,. .. .fIJlDDID
CXIIIIa'lY 1EVI"''1Ia1' IEIMDBft'
~..., KIt JIDIOSAIa
Jat J'JJWaAL NNJJJmf ~ n.. - lJ4RI'1'DG smYICII
..~~~.... ... i.& of ~
.. MZY1c. 1 C.;...... Ile1Cll1 are tbcIIe Cik...,uy 1dintit1ed to tie ~ by
a.. M1ec:tled tJmncia1 edviec&'/Ullk'".rr1ter. Art' ~ tea'
..s1tbt:J.c:m to t2le8e 88l'Ytc. ~ tie !nc1\ded Iii tile I*'.ly"""
",-CttalJ in UlllPCliI_ to tb1a JaIP.
2ft QIn8nl, tile 8elected finllncia1 ~ter wcu14 tie ~ to
Idri8e d.ty IItaft w otbeMae Cll:lOZdinate tile ~. ,< 1d t!ll8ncinr.
.. JnltJa1 ..me.. ~ v11l tie to CXInIaIlt with d.ty M:att
~ tile smtic t!II8ncinr <lpticrw ..nUle t<< tile aoa....cnLt
aMncinlJ, ri IlftIrida drlce, CllUl8e1. ri ~ .. to t IN.'
alan.tl.... 1IIili:b wcu14 4K~. .,I1Ub the pl. of tile d.ty In . .C-lr lid
cc.t-ettect1w ~I<lft. '!be lIdv18ar/Urdenlrlter wcu1d tJ8l tie as1cIecl to .
tJm11ze tile f!nancJJrJ plan w pvvide tba toUCIldn; 881'Y1<*1
7/21/88
1.
Pnpn anLt 1'<<" ......Id amrxtizat.1cn ~\1_ tar tile ...~ liLt
~.
2.
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Arrar9I anLt hp1eaent ~,;~ .. t<< tile f1nancinlJ.
Ma1ra reo. "'daUaw regard1niJ the finllncia1 CXI1tent of
resolutlaw, nottc. of lIB1., and otbIr........ ""a.
~..
4.
PrIpIze anLt lWise, .. ~ by d.ty 8taff w 0CIlIUltarJt8,
tile OfflcJa1 stat:Anents w otbIr "ooo-uticn far tile
tinancilq.
Clcal1S1nate tile rep:.:daoti<lft, ailinJ and c!i8trJ1lUtICII of tile
nctic.s of 881., Offlc1al stat:AIDentIl, w other ~-a, it
~, to urdel.-ltera and instlt:ut.1cna1 J:luywa located
~ tile ccuntzy to enccurage the best ...........Uti".
bidI:UnJ fea' the fJ.nancinJ.
Assist in d:lt:.ain1ng bcnS ratings frail Moodys and/or standard
and PIxln, if ~......1ate.
Assist in Clbt:aJ.n!n) JlUniclps1 bond insurance or other c:redit
enhancement, If 8Wl~1ate.
With cD regard for the needs an:! ~ of the city,
maka l-..........ndatICIIS regaxdin;J ~ of the finarw::1nJ to taJra
cpt.hua advantage of IIBrlcet ocnditlCll'lS.
5.
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7.
8.
5
" t. =~-=9:.:=r..~......~..
~tl.... bJda, ,.... .
10. It P1~ bid, calculate bJdI to&' the banr.t., ~ the
lcuut bJd lid .. the City oo.~ -..zd of till
tbwdng.
U. Ao:.._~ till e1c.1n; of the t1nlnc1n; ani .. City 8tatt .
oo.-m!ni ~ ~ of ~ pto- J., if q, JlIIldbv
their 8llpeIld1tun by t2le City. Qdl arMce Ihclu1d ini::1_ CIn1J
'Mty II80h d 1nsiincs iJM...t.-a ~ that t2le City - r- ... DO
risk _tee... regarding 8eC:I,Irlty of pinc1i-1 w ~
l'8tuIrn en 1n\lllo.t.-L.
1ab/1081
'AVIS
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1/21/88
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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 finaneing. 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 financing.
4. Arrange and implement procedural steps for the financing.
S. Make recommendations regarding the fmancial 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.
EXHIBIT
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15.
14. Arrange 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 01\ investment
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 ne~ative 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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STONE & YOUNGBERG
MEMBERS: PACIFIC STOCK EXCHANGE
February 3, 1989
Mr. Kenneth J. Henderson
Director
Community Development Department
City of San Bernardino
300 North D Street
San Bernardino, CA 94218-0001
Re: $2,000,000
city of San Bernardino
Limited Obligation Loan Agreement Revenue Bonds
(Senior Housing Project)
Dear Mr. Henderson:
On behalf of Stone , Youngberg and Donaldson, Lufkin ,
Jenrette, and in response to our recent discussions with you
and your Department Staff regarding our relocation to new
firms, we commit to co-underwrite the above-referenced
financing at the prices set forth in our original proposal
submitted to the city on September 9, 1988. In addition to
underwriting the City's bonds at the same price, we will also
provide all of the services highlighted in our proposal.
With regards to personnel, we will continue to be the
individuals responsible for the proposed bond issue. The
third member of our financing team, Mr. Mark Young, is now
also associated with Donaldson, Lufkin and Jenrette, and will
be available to the city on an as-needed basis.
As we indicated in our proposal, we are committed to
providing the City of San Bernardino with the highest service
available. We look forward to working with the City now and
in the future.
sincerely,
Dawn Vincent
"~on, Lufkl~",anrett.
J..~ ~/if'j,
Stone , Youngberg
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DV/lf
EXHIBIT "B-1"
15260 VENTURA BOULEVARD' SHERMAN OAKS, CALIFORNIA 91403' (818) 189-2883
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COSTS OF ISSUANCE
The following is a list of the estimated costs of issuance assuming a S2.000.000 revenue
bond financing. These an: the items that would not typically be payable from the
underwriter's discount We do not include the City's bond counsel fccs as that is subject to
the City's selection and negotiation.
Upfront Letter of Credit Fcc (if applicable)
S5.000(1)
2.000
4.000
7.500
5.000(1)
.60-.90% x total debt scrvicc(1)
.75% x total outstanding principa1(1)
plus 210 days of interest
.1% x total outstanding principa1(I)
plus 210 days ofintcn:st
. TrustcclRegistrarlPaying Agent
Bond Printing
Preliminary & Official Statement Printing
Rating Fcc (if applicable)
Miscellaneous Expenses (2)
Bond Insurance (if applicable)
Annual Letter of Credit Fcc (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
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