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HomeMy WebLinkAbout49-Public Works - - - - ctrv OF. SAN BERNARDQO - REQUO .'FOR' COUNCIL AeON From: ROGER G. HARDGRAVE Subject: Authorization to Execute Agree- ment for Investment Banking Ser- voces -- Verdemont Area Improve- ment District, Assessment District No. 987 -- ~.. . STONE (, YOUNGBERG 'L Dept: One: Public Works/Engineering 4-24-89 . Synopsis of Previous Council action: 02-06-89 Authorization granted to proceed on Assessment Districts No. 987 & 988. 04-03-89 Authorization granted to combine Assessment Districts No. 987 & 988, and add improvements to Palm Avenue. Recommended motion: Adopt resolution. cc: Jim .Robbins Jim Richardson -.1'im Penman Andy Green Craig Graves FUNDING REQUIREMENTS: Verne Nadeau Staff Report Aqreement & Resolution Amount: $73,800 Phone: 5026 Contact person: Supporting data attached: Ward: 5 Source: (Acct. No,) 251-663-53925 Finance: Improvement District '\v~ t)f'--'-- Acct.Oeseri tion Verdemont Area Council Notes: 75c.0262 Agenda Item No,-59-- - -- - - - ..... cCV'OF SAN BERNARDOo - REQUU FOR COUNCIL AC'hbN STAFF REPORT Request for proposals for investment banking services, in connection with the Verdemont Area Improvement District, were sent to the following firms: 1. Crowell, Weedon & Company 2. M. F. Whipple & Company 3. Seidler - Fitzgerald 4. Miller & Schroder 5. Stone & Youngberg 6. Chilton & O'Conner 7. Sutro & Company 8. Dean Witter Reynolds All of these firms submitted a proposal. These proposals were reviewed on 3-30-89 by an interview panel comprised of the following: 1. Councilman Tom Minor 2. Richard Bennecke, Executive Assistant to Mayor 3. Craig Graves, City Treasurer 4. Gene Klatt, Assistant City Engineer 5. Verne Nadeau, Real Property Supervisor After carefully reviewing the qualifications and experi- ence of these firms, Stone & Youngberg 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 Stone & Youngberg will provide normal underwr iter servJ.ces for this assessment district. Their fee will be approximately 2%, as determined by negotiations at the time of the bond sale, based upon market conditions. They will receive no fee in the event that the district is not formed and bonds sold. It was originally proposed that two assessment districts be formed. At the Council meeting of 4-3-89, these districts were combined, and the improvements to Palm Avenue added. The total preliminary construction cost This amount could change when final plans Incidental costs and other expenses increase the project cost to $3,692,000. is $2,840,000. are prepared. total estimated Since the services of an investment banker are needed for this assessment district to proceed, we recommend that the Agreement for Investment Banking Services be approved. 4-24-89 '~-02L4 ~ - - .. r' '~ ...... '-" .......i 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4/25/89 RESOLUTION NO. RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH STONE AND YOUNGBERG FOR INVEST~ MENT BANKING SERVICES FOR THE VERDEMONT AREA IMPROVEMENT DISTRICT, ASSESSMENT DISTRICT NO. 987. BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. The Mayor is hereby authorized and directed to execute on behalf of said City an Agreement for Investment Banking Services with Stone and Youngberg for the Verdemont Area Improvement District, Assessment District No. 987, a copy of which is attached hereto marked Exhibit "A", and incorporated herein by reference as fully as though set forth at length. SECTION 2. This resolution is rescinded if the parties to the Agreement for Investment Banking Services fail to execute it within sixty (60) days of the passage of this resolution. I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a meeting thereof, held on the ____day of , 1989, by the following vote, to-wit: AYES: Council Members NAYS: ABSENT: City Clerk The foregoing resolution is hereby approved this day of , 1989. ...",...., ...... RESO: 9 "" -. AUTHORIZING CUTION OF AG ENT WITH STONE AND , ) YOUNGBERG FO INVESTMENT B~NG SERVICES FOR ASSESSMEN'l' DISTRICT NO. 987. Evlyn Wilcox, Mayor City of San Bernardino - -- - - "- _. v -..; ,,' AGREEMENT FOR INYESlIlENT BAIIlINIi SERYICES THIS AGREEMENT is _de and entered into this day of , 19 ,by and between the CITY OF SAN BERNARDINO, a municipal corporation, - hereinafter called .City", and STONE & YOUNGBERG hereinafter called "Investment Banker" . WITNESSETH WHEREAS, City proposes to initiate proceedings for Assessment District No. 987 (Verdemont Area Improvement District) (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 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 cl ties 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: lY-l\181't "A" 5-15-89 1 - -- - ~ , C /""- , j .- . "-" A. Structuring the Financing: 1. Investment Banker w111 work with City in developing the scope of the financial feas1b111ty and assessing the marketability of the project. 2. Investment Banker will work with the City's bond counsel recommending specific terms and conditions affecting the basic secur1 ty of the Bonds. 3. 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 econollic data. In preparation of the Official Statement. Investment Banker will exercise due diligence in the ascertainment of all material facts and c1 rcumstances regard1 ng the project and their d1 sclosure in the prospectus. 4. Investment Banker will be present at any necessary information meeting or meetings. 5. If the City so requests. Investment Banker will assist in arranging the selection of a paying agent. B. Marketing the Bonds: 1. Investment Banker will use its best efforts to accomplish 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 15 intended tha t. once purchased by the Investlle!lt 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 investment banking firms 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 otherwise speCifically set forth herein. 2. Investment Banker will submit an offer to the. City to purchase the bonds subject to pertinent resol uti ons. the Off1 cia 1 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 Investment Banker. in good faith. the City and Investment Banker fail to agree on terms of sale of the Bonds. the City may terminate this Agreement. then offer the Bonds for sale to others. EXHIBIT -A- 5-15-89 2 - - - - - , ~ , .r."~ ~ ", - '- '-' II. General Provisions Relating to the City and the Investment Banker: A. The CUr agrees to cooperate wi th Investment Banker by maU ng available cop1e. 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 requi red from time to ti me for prompt and effi c1ent performance by Investment Banker of the1 r ob 11 ga t1 ons 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 pub11c Offering of theBonds. C. The City shan 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. D. It is expressly understood and agreed and the City hereby recognizes that in performing its activities pursuant to a negotiated sale that Investment Banker is acting solely on its own behalf and plans to sub.1t to the C1 ty a proposal to purchase the Bonds for resale. Nothing herein shall be construed to make the Underwri ter an employe. or agent of the City, Investment Banker shan 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. This Agreement may be cancelled wi thoutcause 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 address: CITY OF SAN BERNARDINO --- INVESTMENT BANKER STONE & YOUNGBERG 15260 Ventura Boulevard Sherman Oaks, CA 91403 Attn: f4r. John Doyle, Partner Roger G. Hardgrave Director of Public Works/ C1 ty Engi n..r 300 North "0" Street San Bernardino, CA 92418 F. The City may terminate this Agreement 1f, after negotiations in good fai th, the Ci ty and Stone & Youngberg fan to agree on mutually 5-15-89 EXHIBIT "A" 3 - .. - . I'~ ".... /-', -- v acceptable terms of salt of the Bonds. Upon termination of this Agr....nt. the City shall b. und.r no furth.r obl1gaUon to the l.ftderwriter hereund.r. .xcept that the City is obl1gated to pay to the Underwriter any expenses incurred on behalf of the City pursuant to Paragraph II B of this Agre.ment should the City not s.l1 the Bonds to the l.ftclerwri ter pursuant to Secti on B of this Agreement. 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 fntegrate 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 thfs Agreement. and any such document or instrument. the terms and conditions of this Agreement shall prevafl. IN WITNESS WHEREOF. said City. has caused these presents to be prop.rly executed, and said Investment Banker. has caused these presents to be executed by one of Hs officers. as of the date hereinabove set forth. STONE & YOUNGBERG CITY OF SAN BERNARDINO a minicipal corporation BY ~layor ATTEST: APPROVED AS TO FORM and LEGAL CONTENT: Ci ty Clerk James F. Penman Cf ty Attorney '+ .~ . r- By: ,'4\1-, '1' fAAJ'I/JIA- /; '(15_89 4 EXHIBIT -A" ",