HomeMy WebLinkAbout03-Water Department
C 'Y OF SAN BERNARr "0 - REQIJ~ST FOR COUNCIL Af ~ION
From: Bernard C. Kersey, Ex-Officio
Secretary
Dept: Board of !-later Commissioners
Subject: Sale of Sewer Revenue Refunding
Bonds- 1986
Date: February 7, 1986
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Synopsis of Previous Council action:
Resolution No. 83-98 - Authorize issuance of Sewer Revenue Refunding Bond
Anticipation Notes Issue of 1983.
Resolution No. 84-97 - Authorize issuance of Renewal Sewer Revenue Refundin"
Bond Anticipation Notes.
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Recommended motion:
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SEE ATTACHED
Contact person:
Bernard Kersey
Phone:
383-5393
Supporting data attached:
Yes
War.d:
All
FUNDING REOUIREMENTS:
Amount:
$234,175
Source: Sewer Fund C
F;",,"')-rf,h'~~'.J ,1'.%( (f
Council Notes:
75-0262
Agenda Item NOJ),
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CITY OF SAN BERNARDINO, CALIFORNIA
AGENDA
FEBRUARY 13, 1986
Common Council
1. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, PROVIDING FOR THE SALE OF CITY OF SAN
BERNARDINO, CALIFORNIA, SEWER REVENUE REFUNDING BONDS, ISSUE OF
1986 (REGIONAL WASTEWATER TREATMENT PLANT PROJECT)
2. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO, CALIFORNIA, APPROVING AND ACCEPTING A PROPOSAL
TO PROVIDE BOND COUNSEL, CONSULTING AND UNDERWRITING SERVICES IN
CONNECTION WITH THE ISSUANCE OF THE CITY OF SAN BERNARDINO,
CALIFORNIA, SEWER REVENUE REFUNDING BONDS, ISSUE OF 1986
(REGIONAL WASTEWATER TREATMENT PLANT PROJECT)
3. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, AMENDING RESOLUTION NO. 83-93, AS
AMENDED, AND AUTHORIZING THE ISSUANCE OF CITY OF SAN BERNARDINO,
CALIFORNIA, SEWER REVENUE REFUNDING BONDS, ISSUE OF 1986
(REGIONAL WASTEWATER TREATMENT PLANT PROJECT), OF SAID CITY AND
PROVIDING THE TERMS AND CONDITIONS FOR THE ISSUANCE OF SAID
REFUNDING BONDS
1484S
CIl
OF SAN BERNARDH ) - REQUEr ~ FOR COUNCIL ACT" ''IN
STAFF REPORT
The City Staff has presented to you for your consideration three
resolutions with regard to the sale and issuance of the City of
San Bernardino, California, Sewer Revenue Refunding Bonds, Issue of 1986
(Regional Wastewater Treatment Plant Project) (the "Bonds") by the City
of San Bernardino for the purpose of paying in full the City of
San Bernardino, Renewal Sewer Revenue Refunding Bond Anticipation Notes,
Issue of 1984 (the "1984 Notes"). The three resolutions are the actions
that will be required at this time of the City Council in connection with
the authorization for the issuance of the Bonds in an aggregate principal
amount equal to $2,600,000 for such refunding.
The principal amount of
the Bonds has been determined to take into account the amount necessary
to meet the payment of the 1984 Notes on their maturity date, being
March 15, 1986.
The first resolution entitled "Resolution of the Hayor and
Common Council of the Cl'ty of S B d' C l' f .
an ernar l.no) a 1. ornla t Approving and
Accepting
a
Proposal
to
Provide
Bond
Counsel,
Consul ting and
Underwriting Services in Connection With the Issuance of the City of
San Bernardino, California, Se,;er Revenue Refunding Bonds, Issue of 1986
(Regional Wastewater Treatment Plant Project)" appoints the law firm of
Sabo & Gondek as Bond Counsel in connection with this issuance and also
approves Miller & Schroeder Financial, Inc., as Financial Consultant to
the City in connection with the issuance of the Bonds.
The second resolution entitled "Resolution of the Nayor and
Common Council of the City of San Bernardino Providing for the Sale of
City of San Bernardino, California, Sewer Revenue Refunding Bonds, Issue
75-0264
cr Y OF SAN BERNARD,a~o - REQUf'~T FOR COUNCIL AC....ON
STAFF REPORT
of 1986 (Regional Wastewater Treatment Plant Project)" is the Resolution
of Sale ....hich authorizes the sale of the Bonds and the invitation for
bids for the purchase of the Bonds, consents to the Financial Consultant
acting as underwriter, orders the publication of the Notice Inviting Bids
and the Notice of Intention to Sell Bonds, authorizes and directs the
Financial Consultant to distribute an Official Statement in the form as
submitted to the City and generally authorizes and directs either the
Financial Consultant and/or Bond Counsel to open the bids, to receive and
record receipt of all bids and to present the bids for the sale of the
Bonds and any other necessary documentation required for the refunding to
the Mayor and Common Council.
The Bond sale date has been set for
March 6, 1986, to enable the City to obtain the best interest rates and
the most bids possible.
The terms and coridi tions of the sale of the
Bonds are set forth in the Notice Inviting Bids and are similar to other
publicly sold bonds of the City and the Redevelopment Agency.
The final resolution entitled "Resolution of the ,Iayor and
Common Council of the City of San Bernardino, California, Amending
Resolution No. 83-93, As Amended, and Authorizing the Issuance of City of
San Bernardino, California, Sewer Revenue Refunding Bonds, Issue of 1986,
of said City and Providing the Terms and Conditions for the Issuance of
Said Refunding Bonds" is the Resolution of Issuance which amends
Resolution No. 83-93 of the ~Iayor and Common Council ,adopted on ~Iarch 24,
1983, as amended by Resolution Nos. 83-97 and 84-98 (collectively, the
"1983 Resolution") which, as initially adopted, authorized the issuance
of sewer revenue refunding bonds for the purpose of refunding the
outstanding Se...'er Revenue Bonds, Election 1957, Series I, 2 and 3 (the
75-0264
-2-
CIl
OF SAN BERNARDIf ) - REQUEr.... FOR COUNCIL ACT' lN
STAFF REPORT
"Refunded Bonds") and provides for the proposed terms and conditions of
the issuance of the Bonds. The original proceedings for the sale of
sewer revenue refunding bonds were initiated in 1983 but after receipt of
bids in 1983 and upon consideration of certain circumstances then
occurring in the municipal bond market, the Mayor and Common Council
rejected the bids received for the refunding bonds. Since the refunding
of the Refunded Bonds was required to take place on April 1, 1983, the
Mayor and Common Council determined to proceed to issue revenue bond
anticipation notes (the "1983 Notes") to accomplish the refunding that
could not be accomplished under the 1983 Resolution and to pay certain
necessary maintenance and operation costs of the sewer system, and to
sell the refunding bonds at such later time as the municipal bond market
stabilized.
On March 21, 1984, the Mayor and Common Council issued
certain renewal sewer revenue refunding notes for the payment of the 1983
Notes and further amended the 1983 Resolution pursuant to Resolution
No. 84-98. The Resolution of Issuance as submitted to you at this time,
by amending the 1983 Resolution, maintains the basic terms and conditions
for the issuance of refunding bonds as set forth in the 1983 Resolution
and the effective date of the 1983 Resolution, being March 24, 1983, but
incorporates necessary technical modifications required at this time.
The issuance of the Bonds is structured so that the 1984 Notes
will be paid in full from the proceeds of the sale of the Bonds on
March IS, 1986, which is the maturity date of the 1984 Notes. It is
proposed that the Bonds will be issued in a prIncipal amount equal to
$2,600,000, dated as of March 1, 1986, bearing interest at the rates per
annum to be bid by the successful bidder and maturing on March 1 of each
year of maturity through and including March I, 2001.
75.0264
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CIl 'OF SAN BERNARDI' ') - REQUE T FOR COUNCIL ACT )N
STAFF REPORT
It is proposed that the Bonds will be issued on ~larch 14, 1986,
so that it will then be possible to retire the 1984 Notes on their
maturity date. This requ~res that the Bonds be issued in a relatively
short period of time after the bids have been received and the Bonds have
been awarded.
The Financial Consultant and Bond Counsel have proposed that the
Bonds be rated by either Standard & Poor's Corporation or :Ioody's
Investor Services to assure the City of the lowest possible interest
rate. The Financial Consultant and Bond Counsel will be further pursuing
the obtaining of the necessary rating in connection \vith this financing
so as to produce the lowest financing cost possible to the City and upon
the most advantageous terms to the City.
Additionally, because of the
pending federal tax legislation which would restrict most other types of
municipal bonds, there are virtually no new issues coming to market at
this time. The Bonds as proposed to be issued are not affected by the
pending federal tax legislation.
Staff Recommendation
Staff recommends approval of the attached resolutions which
would permit the City to undertake the sale and issuance of the Bonds and
to retire the 1984 Notes.
75-0264
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SBE071-6/1474S/rg
02106/86
RESOLUTION NO. IJ'(, - . <'I
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING AND
ACCEPTING A PROPOSAL TO PROVIDE BOND COUNSEL,
CONSULTING AND UNDERWRITING SERVICES IN
CONNECTION WITH THE ISSUANCE OF THE CITY OF
SAN BERNARDINO, CALIFORNIA, SEWER REVENUE
REFUNDING BONDS, ISSUE OF 1986 (REGIONAL
WASTEWATER TREATMENT PLANT PROJECT)
WHEREAS, the City of San Bernardino, California (the
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"City"), is
undertaking
procedures
to
issue
the
City of
San Bernardino,
California,
Sewer Revenue Refunding
Bonds,
Issue of
1986 (Regional Wastewater Treatment Plant project), in an aggregate
principal amount equal to $2,600,000 (the "Bonds"); and
WHEREAS, the City has requested the services of Sabo &
Gondek, a Professional Corporation ("Bond Counsel"), to provide
legal services in connection with the proposed financing of the
Bonds; and
WHEREAS, the City has requested the services of Miller &
Schroeder Financial, Inc. (the "Financial Consultant"), to provide
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professional consulting and financial feasibility services in
connection with the proposed financing of the Bonds; and
WHEREAS, Bond Counsel has presented a proposal in the form
of a letter agreement (the "Agreement") to ihe City to provide such
Bond Counsel services and City Staff has recommended that the
Agreement, attached hereto as Exhibit "A" and incorporated herein by
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reference, be approved and accepted by the Mayor and Common Council
of the City of San Bernardino, California (the "Mayor and Common
Council") .
WHEREAS, the Financial Consultant has presented a proposal
(the "Proposal") to the City to provide such consulting and
financial services and City Staff has recommended that the Proposal
attached hereto as Exhibit "B" and incorporated herein by reference
be approved and accepted by the Mayor and Common Council.
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 Mayor and Common Council hereby approves
and accepts the Agreement and the Proposal to provide legal,
consulting and financial services of Bond Counsel and the Financial
Consultant in connection with the proposed financing of the Bonds.
Section 2. The Mayor and Common Council hereby
authorizes and directs the City Staff and any and all appropriate
officers and employees of the City to take any and all reasonable
and appropriate actions and to execute any and all necessary
agreements consistent with and in order to effectuate the terms and
conditions of the Agreement and the proposal.
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Section 3.
adoption.
I HEREBY
adopted by the
San Bernardino at
held on the
the following vote,
AYES:
NAYS:
ABSENT:
This
CERTIFY
Mayor
a
that
and
~' ~
Resolution
sha 11
take
effect
the foregoing
Common Council
resolution
of the
meeting
day of
to wit:
Council Members
City Attorney
upon
was duly
City of
thereof,
1986, by
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V,//I</',(
J ~
diclflL,
City Clerk
day of
The foregoing resolution is hereby approved this
, 1986.
Approved as to form:
Mayor of the City of
San Bernardino
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STATE OF CALIFORNIA
)
) ss.
)
COUNTY OF
On before me, the undersigned, a Notary
Public in and for said State, personally appeared
and personally known to me (or proved to me on
the basis of satisfactory evidence) to be the Mayor and City Clerk,
respectively, of the City of San Bernardino, California, that
executed the within instrument on behalf of said City and
acknowledged to me that said instrument was authOIized to be
executed pursuant to a duly adopted resolution of the Mayor and
Common Council of the City of San Bernardino, California.
WITNESS my hand and official seal.
Signature:
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EXHIBIT A
February 7, 1986
Honorable Mayor and Common Council
City of San Bernardino
300 North "D" Street
San Bernardino, California 92418
Honorable Mayor and Common Councilmembers:
This proposal is being submitted for your consideration in
connection wi th the issuance by the Ci ty of San Bernardino, California
(the "City"), or sewer revenue rerunding bonds (the "Bonds") pursuant to
the City Charter and the laws or the State of California and particularly
the Revenue Bond Law or 1941 (Chapter 6, Part 1, Division 2, Title 5 of
the Government Code of the State or California) ror the retirement of the
City of San Bernardino, Renewal Revenue Bond Anticipation Notes, Issue of
1984 (the "Notes, Issue of 1984"). Such refunding of the Notes, Issue of
1984, may be paid from the proceeds of the sale of the Bonds pursuant to
the provisions of the City Charter and the applicable State laws with
regard to the issuance of Bonds by the City pursuant to the appropriate
authority under State law. The role of this Firm in such financing or
financings would be to represent the interests of the City while serving
as Bond Counsel and rendering the requisite opinion or opinions to the
purchaser of the tax-exempt obligations to be issued by the City as to
legality for issuance under the laws of the State of California and the
exemption or interest on such obligations from applicable federal and
State income taxation.
As stated above, this Firm shall act as Bond Counsel to the City
for the financing project of the City and, in connection therewith, the
services of Bond Counsel would be to prepare all legal documents and
filings necessary to implement the financings for the project, to attend
such meeting or meetings of the Mayor and Common Council at which action
on such project 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 Stafr and City Attorney in the
preparation of documents and in the scheduling of actions in connection
wi th tHe financing project, preparation of the necessary agreements and
resolutions for approval and adoption by the City, including, but not
limited to, the Resolution of Issuance, the Resolution of Sale, the
Resolution Awarding Bonds, the Resolution Approving Fiscal Agent
Fag€: _
.t...greemen:
BondE LH
appro\-ing
tax-exemptio:-..
anc. all closing dGcument.s, anc to super\-ist- delivery of the
the City and conduct the closing thereof anc provide the
opinion or opinions at the ~im~ relating to legality and
for thesE ser\"ices, the total fees for Bond Counsel services
would be one percent (11) of the first $2,000,000 of the principal amount
of Bonds and one-quarte~ percen~ (1/4%) of the principal amount of Bonds
in excess of $~,OOO,OOG, ror each series or issuance 0: tax-exempt
obligations so issuec from time-to-time by the City plus all
out-of -pocket expenses. I t is expressly unders tood and agreed tha t this
employment lette!' with regard to said percentage fee for Bond Counsel
services and out-of -pocket expendi tures of Bond Counsel is contingent
upon the successful salEo and delivery of the tax-exempt obligations in
each series or separate financing as contemplated hereunder.
This Firm shall be compensated for all out-of-pocket expenses
incurred as Bond Counsel solely upon the delivery of the Bonds from the
proceeds thereof for such items as travel, long-distance telephone calls,
messenger service, telecopying, photocopying, word processing charges and
administrative expenses related to the same for such issuance of the
Bonds if and when the Bonds are ac tually issued and delivered, and such
out-of-pocket expenses shall be in addition to the Bond Counsel fee if
the Bonds in one or more series are in fact issued.
If the terms as outlined herein are satisfactory, please
indicate acceptance hereof by the City through the execution of the
acceptancEo 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.
Very truly yours,
SABO & GONDEK
A PROFESSIONAL CORPORATION
Timothy J. Sabo
TJ5:ak
Enclosure
/14735
Fa'g€:: -'
P.CCEPTAJ'KE
The La" Firm of SABO " GOKDEf-:, A PROFESSIONAL CORPORATIO!\, is
hereby employee as Bond Counsel to the Ci ty of San Bernardino,
California, in accordance ~ith the terms of the foregoing letter.
Dated:
, 1986
Mayor of the City of
San Bernardino
Approved as to form:
City Attorney
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CONTRACT EMPLOYING FINANCIAL CONSULTANT
SEWER REFUNDING PROJECT
THIS AGREEMENT, made this 13th day of February, 1986, by and between the
City of San Bernardino, California, an City duly organized under the laws of
the State of California (hereinafter called the "City"), and MILLER &
SCHROEDER FINANCIAL, INC., 505 Lomas Santa Fe Drive, Solana Beach, California
(hereinafter called the "Consultant"):
WITNESSETH:
WHEREAS, the City has heretofore initiated its wastewater treatment plant
expansion; and
WHEREAS, the City requires assistance in the development of a sound,
equitable and practical financing plan to implement the refinancing of
existing indebtedness by taking into consideration sources of capital funds
and cash flow requirements, annual cos ts, the allocation of those cas ts,
statutory requirements and restrictions, and alternate methods, if applicable;
and
WHEREAS, the
determined that
City, after
the Consul tant
due investigation and
is qualified by training
deliberation,
and experience
has
to
perform said services;
NOW, THEREFORE, it is mutually agreed as follows, to wit:
The City hereby employs the Consultant and the Consultant hereby accepts
such employment to perform the services relative to the wastewater treatment
plant expansion and refinancing conditions, and in consideration of payments
as hereinafter set forth:
Services to be Performed by the Consultant:
The Consultant shall perform in a diligent manner the following services:
1. When the City has approved a specific project or projects for
implementation, the estimated costs and method of financing of which have been
sufficiently well established to permit the preparation of a final financing
plan, the Consul tant shall, at the direc t ion of the Ci ty, prepare such plan
containing, in addition to other information, the following:
A. A description of the project or projects, including the purpose,
benefits, estimated costs and other pertinent information.
B. Details relating to the proposed method of financing, including
tentative bond amortization schedules, call features, sources and amounts of
funds to be used in amortizing the costs and other related data.
C. Illustrations and examples of the financial effects of the
financing program on typical property owners, utility users or beneficiaries
of the specific program.
D. Recommendations as to further procedures.
2. If bonds or other evidences of indebtedness to finance all or part of
the costs of the project or projects are authorized to be issued by the City,
or by any building authority, parking authority, other City entity, or any
other authority alone or in conjunction with the City, the Consultant shall:
A. Make recommendations as to 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 and
other details.
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B. Assist bond counsel in drafting the necessary resolution of
issuance and notice of sale.
3. Upon approval by the City of final financing details and upon
direction by the City to do so, prepare the text and other material for an
official statement or bond prospectus describing the improvements, the bonds,
their security, and the economic and financial background of the City.
4. Arrange for printing and distribution of the official statement and
other related material to a comprehensive list of prospective bond bidders.
5. Make such trips, and schedule such conferences, in financial centers
throughout the United States as are necessary or proper to generate maximum
interest in, and acceptance of, the proposed bonds, notes or obligations among
both underwriters and ultimate investors. The Consultant shall distribute
copies of the official statement or other pertinent documentation to bond
underwriters and interested ultimate investors located in the aforesaid
financial centers.
6. Take such other steps as appear advisable to encourage strong
competitive bidding for the bonds.
7. If non-profit corporation financing is to be included in the
financing program, the Consultant shall recommend:
A. The timing and procedures to be used in: (i) forming a
non-profit corporation, (ii) obtaining the necessary Internal Revenue Service
ruling as to tax exemption of the securities to be issued, (iii) complying
with the Securities and Exchange Commission regulations if a public sale of
securities proves to be desirable, (iv) the sale of securities and deposit of
proceeds with the fiscal agent, and (v) disbursement and application of funds.
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B. Specific terms governing the issuance of the bonds of the
non-profit corporation, including the amount of the issue, a debt retirement
schedule, call and redemption features, denominations, application of bond
proceeds and rental agreements. In recommending the amount of bonds to be
issued, the Consultant shall use its best efforts to keep incidental costs,
such as interest during construction, reserve funds and other charges, to a
minimum in order to avoid overcapitalization.
8. The Consultant may, with the City's approval, serve as underwriter
for bonds at private sale in which case the Consultant shall waive any fees
payable under this contract. If a public sale of bonds proves to be legally
and practicably possible, the Consultant shall prepare the text of an official
statement describing the bonds, their security, and the economic and financial
background of the City which may be duplicated and distributed to a
comprehensive list of prospective bidders.
9. The Consultant shall be available at reasonable times by telephone or
at the offices of the City on an ongoing basis throughout the term of this
agreement to discuss on a continuing basis the results of studies and analyses
and generate such additional information as desired or requested and consult
with the City as to the financial aspects of any specific project then being
considered, and provide advice, counsel, counsel and suggestions as to
feasible alternatives by which the goals of the City may be accomplished.
10. Consul tant agrees to comply with any policy adopted by the Ci ty
es tablishing guidelines for bond sale procedures, upon being provided a copy
thereof.
11. The City shall not otherwise be liable to the Consultant for any
other sums except as specifically set forth in this Agreement. Any services
performed by consultant prior to the execution of this agreement shall not be
covered by this agreement.
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Compensation:
12. The Compensation to be paid to the Consultant for services provided
hereunder shall be $25.000.
sold.
This Compensation shall be paid from bond proceeds, when bonds are
If bonds are not sold, no compensation shall be due or payable
hereunder.
Other Considerations:
13. The Consultant is employed hereunder to render a professional service
as a municipal financing consultant and any payments made to it are
compensation solely for such service and advice. Unless otherwise agreed as
to any particular project, the Consultant is not responsible for and shall not
be held liable for any other expense or expenditure in connection with the
financing program. The City or the legal entity or entities issuing bonds,
notes or obligations shall bear the cost of printing, mailing and distributing
any official statement, any notice of sale, any printing of documents and
securities, publication, bond counsel fees and rating fees.
14. The Ci ty hereby agrees that the Consultant may bid on the City's
obligations if such obligations are sold at public sale. In the event that
the Consultant is the successful bidder at such public sale. the Consultant's
fee for services performed hereunder shall not be waived.
15. The City agrees that its officials and employees will be reques ted
and directed to cooperate with and assist representatives of the Consultant to
the end that the Consultant may secure all information and data required to
perform the services herein provided.
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16. This Agreement may be cancelled without cause by either party by
giving the other party thirty (30) days written notice of such cancellation.
Should the City terminate this agreement prior to at least one attempt to sell
the bonds, the City shall reimburse the Consultant for its services and
expenses incurred hereunder in accordance with the overall agreement for
services between the parties.
IN WITNESS WHEREOF, said City, party of the first part, has caused
these presents to be properly executed, and said Consultant, party of the
second part, has caused these presents to be executed by one of its officers,
as of the date hereinabove set forth.
CITY OF SAN BERNARDINO
MILLER & SCHROEDER FINANCIAL, INC.
By
Mayor
Its
City Clerk
Approved as to form:
CITY ATTORNEY
By
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