HomeMy WebLinkAboutAgenda Statement 1985/08/06 Item 9 COUNCIL AGENDA STATEMENT
Item -re- 9
Meeting Date 3/2'/85
ITEM TITLE: Resolution ,'4Q//7 Approving an agreement with Jones Hall
Hill & White for bond counsel services
SUBMITTED BY: Community Development Director 40
REVIEWED BY: City Manager � k (4/5ths Vote: Yes No X )
At the direction of the City Council and the Redevelopment Agency, a search
was conducted for bond counsel services for both the Agency and the City. A
question arose as to whether the City/Agency could obtain better, more
efficient service through a local , San Diego region legal firm rather than
utilizing the services of Jones Hall Hill & White in San Francisco as has been
done in the past. Based on this request and with City/Agency concurrence, a
request for proposals was solicited to known bond counsel firms throughout the
State. As a result, four proposals were received from the following:
O'Melveny & Myers, Los Angeles/Newport Beach
Jones Hall Hill & White, San Francisco
Mudge Rose Guthrie Alexander & Ferdon, Los Angeles/New York
Morrison and Foerster, Los Angeles/New York
No area firms responded to the request. All responding firms are well known
and highly qualified; hence, render an opinion acceptable to financial markets
throughout the nation.
RECOMMENDATION: That the City enter into an agreement with the law firm of
Jones Hall Hill & White based upon a comparison of fees and availability of
personnel as revealed in the attached matrix. The contract may be cancelled
by either party with 30 days' notice.
BOARDS/COMMISSIONS RECOMMENDATION: The Redevelopment Agency considered this
item on July 18.
DISCUSSION:
In order to evaluate responding firms on an equity basis, the attached matrix
chart was prepared. Considered were such items as years of experience,
availability of personnel , staff involved in municipal bonds, and fees. Fees
on a typical tax allocation bond offering, a mortgage revenue multi-family
bond issue, and an IDB issue were then reviewed, along with fees for
consultation.
,r by the City Con i:iI of
by Chula Vista, C:aiiornia
Chula \",: Dated
ited �
Page 2, Item 4"0—
Meeting Dated a `'9-C
A committee composed of City Attorney Tom Harron, City Finance Director Lyman
Christopher, and Community Development Director Paul Desrochers concluded that
Jones Hall Hill & White (JHH&W) responded in the most favorable manner and can
provide services to the City/Agency at a favorable cost. It was the
committee's opinion that based on the personnel that would be assigned to
Chula Vista, all firms were relatively equal . The respondents stated they
would assign partners who are most experienced in municipal financing issues.
The deciding factor therefore was availability and cost. In the committee' s
opinion it is just as convenient to travel to San Francisco as it is to the
Los Angeles offices of the other respondents.
Jones Hall Hill & White offered perhaps the most favorable proposal due to
requiring fees for consultation in issues that are not consummated. The other
firms propose to charge an hourly rate for issues that are not brought to
market. In other words, all of JHH&W fees are included in the percentage fee
they assign to each issue. In comparing their percentage fees for bond
issuance, JHH&W was within the range submitted by the others and, in fact,
more often lower than higher. Some firms charge an hourly rate in lieu of a
percentage or give the client the option. In order to evaluate these costs,
the question was posed as to what would be the average cost on an hourly rate
for the same type of issue. That response was also factored into the matrix.
In all accounts, JHH&W responded in a manner favorable to the City/Agency.
Also attached is the scope of services submitted from each of the firms.
As can be seen, over 100 entities within the State of California use or have
used the services of JHH&W. Their service to the City of Chula Vista has been
excellent. Based on these facts it is to the City/Agency' s advantage to enter
into a contract. (A copy of the proposed agreement is attached to the
resolution for your information. ) We have enjoyed an excellent relationship
with this firm and now that evaluation of others has taken place, we feel
confident in recommending that their services for our Redevelopment Agency and
City financial undertakings should be continued. In the past we have not had
an agreement to that effect. However, because of the Agency' s suggestion that
other firms be reviewed, it is appropriate that the contract before you be
approved. The contract does not cover City services. A copy of the responses
is available for inspection in the Community Development Department.
FISCAL IMPACT: Fees for bond counsel services under the proposed contract
with JHH&W would not be due unless an issue is brought to market and sold.
The fees vary with the type of issue; therefore, they cannot be estimated at
this time. Fees for consultation services are at no cost to the Agency/City.
PGD:as
WPC 1649H