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CITY OF SAN BERNODINO - REQUEST Fat COUNCIL ACTION
From: Kenneth J. Henderson, Director
~: Community Development
DlIte: February 23, 1989
Subject:
UNDERWRITER SERVICES FOR
CITY/HOUSING AUTHORITY/
COMMUNITY HOSPITAL SENIOR
HOUSING COMPLEX
re
Synopsis of Previous Council ection:
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 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:
That the Mayor and Common Council void the procurement and RFP issued
in connection with underwriting services for the City/Housing Autho
rity/community Hospital Senior Housing project, repeal Resolution
Number 89-17, and, further, that Stone and Youngberg be substituted as
underwriter for the subject project.
Council Notes:
75-0262
Agenda Item NO---#
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SYHOPSIS OF PREVIOUS COUNCIL ACTION COHTXNUBD...
On December 19, 1988, the Mayor and Common approved the selec-
tion of Ehrlich Bober and Company, Inc., as underwriter for the
joint venture housing project.
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CITY OF SAN _RNAcaDINO - REQUEST F~ COUNCIL ACTION
STAFF REPORT
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 Ehrlich Bober and Company, Inc., as underwriter
for the City/Housing Authority/San Bernardino Community
Hospital Senior Housing Complex and directed the City Attorney
to prepare the appropriate documents for approval by the Mayor
and Common Council. At the January 17, 1989 Council meeting,
Resolution Number 89-17 was adopted authorizing the Mayor to
execute an agreement with Ehrlich Bober and Company, Inc.
Subsequent to Council's action, staff met with the Ehrlich
Bober and Company, Inc., project management team and was in-
formed that team members had left the firm and had been hired
by Stone and Youngberg. As a result, staff withheld executing
the agreement with Ehrlich Bober and Company, Inc.
In discussing this matter with the City Attorney and Senior
Deputy City Attorney, staff informed legal counsel that the
expertise of the project management team was of paramount
importance and was the most significant factor in Ehrlich
Bober's selection. Because professional services are involved,
the City need not reissue a RFP and could elect to retain Stone
and Youngberg to provide the necessary underwriting services.
The City through its Public Works Department recently retained
Stone and Youngberg to assist in the Industrial Parkway Assess-
ment District financing. In 1988 alone, Stone and Youngberg
structured seventy-eight (78) California debt issues totalling
nearly 1.1 billion dollars. This is impressive in light of
strictures posed by the Tax Reform Act of 1986.
Attached please find a letter from Stone and Youngberg to me
indicating its willingness to work with the City in accomplish-
ing this important project. I recommend that the Mayor and
Common Council void the original procurement and RFP issued in
connection with underwriting services for the City/Housing
Authority/Community Hospital Senior Citizen project, repeal
Resolution Number 89-17 and that Stone and Youngberg be
substituted for Ehrlich Bober and Company, Inc., as underwriter
for this project. If approved, the agreement between City and
Stone and Youngberg, which has already been prepared by the
City Attorney, will be brought before the Mayor and Common
Council at the meeting scheduled for March 20, 1989.
Kenneth J. Henderson
Director of Community
KJH/lab/3077
2/23/89
75-0264
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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. i
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
, .~: ~~~~y.lt
illiam N. ~~
Stone & Youngberg
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1~280 VENTURA BOULEVARD' SHERMAN OAKS, CALIFORNIA 91403 . (818) 799-2883