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HomeMy WebLinkAboutReso 1986-12854 RESOLUTION NO. 12854 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND MILLER & SCHROEDER TO ACT AS FINANCIAL CONSULTANT FOR ADVANCED REFUNDING OF $4,055,000 1982 CERTIFICATES OF PARTICIPATION (PARKING FACILITY) AND AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT The City Council of the City of Chula Vista does hereby resolve as follows: NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista that that certain agreement between THE CITY OF CHULA VISTA, a municipal corporation, and MILLER & SCHROEDER to act as financial consultant for advanced refunding of $4,055,000 1982 Certificates of Participation (Parking Facility) dated the 16th day of December , 198 6, a copy of which is attached hereto and incorporated herein, the ~ame as though fully set forth herein be, and the same is hereby approved. BE IT FURTHER RESOLVED that the Mayor of the City of Chula Vista be, and he is hereby authorized and directed to execute said agreement for and on behalf of the City of Chula Vista. Presented by Approved as to form by / Ly~n C~ristopher, Director of . ThOmas J. ~a/rron, City Finance Attorney / z 0374a ADOPTED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA, this 16th day of, December 19 .....86 , by the following vote, to--wit: AYES: Councilmembers Malcolm, McCandliss, Cox, Moore NAYES: Councilmembers None ABSTAIN: Councilmembers None ABSENT: Councilmembers . Nader /~Y~//' of the City ~67 Chula Vista ~" - City Cler~ ,~f- STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) ss. CITY OF CHULA VISTA } I, JENNIE M. FULASZ, CMC, CITY CLERK of the City of Chula Vista, California, DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 12854 ,and that the some has not been amended or repealed DATE D ~ City Clerk CI'IY OF CHULA VISTA CC-660 CONTRACT EMPLOYING FINANCIAL CONSULTANT THIS AGREEMENT, made this 16 day of December, 1986, by and between the CITY OF CHULA VISTA, Chula Vista, California, a 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 established its Parking Facility Project (the "Project"); and WHEREAS, the City requires assistance in the development of an approximate $4,000,000 Certificate of Participation issue to refinance outstanding debt by taking into consideration sources of capital 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, after due investigation and deliberation, has determined that the Consultant is qualified by training and experience 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, upon the terms, subject to the 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. At the direction of the City, prepare a financing plan containing, in addition to other information, the following: A. A description of the Project, 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. Recommendations as to further procedures. 2. If bonds or other evidences of indebtedness to finance all or part of the costs of the Project is authorized to be issued by 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. 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. As necessary, arrange presentations to the bond rating agencies and municipal bond insurers in New York City and assist, and take part with, the City in preparation for such presentations. 5. Arrange For printing and distribution of the official statement and other related material to a comprehensive list of prospective bond bidders. 6. Make such trips, and schedule such conferences, 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 pertinent documentation to bond underwriters and interested ultimate investors located in the aforesaid financial centers. 7. Take such other steps as appear advisable to encourage strong competitive bidding for the bonds. 8. The Consultant may, with the City's approval, serve as underwriter for bonds at private sale. If a public sale of bonds proves to be legally and practicably possible, the Consultant shall prepare the text of a prospectus 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 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 the project being financed. Payment for Services: 10. The City shall not be liable to the Consultant for a financial consulting fee in relation to the subject financing. Other Considerations: ll. The City shall bear the cost of printing, mailing and distributing any prospectus or official statement, any notice of sale, any printing of documents and securities, publication, bond counsel fees and rating agency fees. 12. The City agrees that its officials and employees will be requested 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. 13. The term of this Agreement shall be two (2) years from the date hereof, but may be cancelled without cause by either party by giving the other party thirty (30) days written notice of such cancellation. 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 CHULA VISTA ATTEST: By ~ Approved as to form by MILLER & SCHROEDER FINANCIAL, INC. 'ce President COUNCIL AGENDA STATEMENT Item 4 Meeting Date 12/16/86 ITEM TITLE: Resolution/-~25-~/Approving agreement with Miller & Schroeder to act as financial consultant for advanced refunding of $4,055,000, 1982 Certificates of Participation {Parking Facility) SUBMITTED BY: Director of Finance~ REVIEWED BY: City Manage~ (4/Sths Vote: Yes__No X ) On October 14, 1986, the City Council accepted a staff report and recommendation to implement the consultant selection process in order to select a financial consultant to assist in the possible refunding of the 1982 Certificates of Participation (Parking Facility). RECOMMENDATION: That Council adopt Resolution approving the agreement with Miller & Schroeder. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: In December, 1982, the City of Chula Vista issued $4,055,000 Certificates of Participation in order to construct the three level Parking Facility in the Town Centre I Redevelopment Project Area. The Certificates were for a term of 20 years bearing interest rates from 7.5% to 11.4%. Tax exempt interest rates are currently lower than when the Certificates were originally sold, thus it may be financially advantageous for the City to refund the 1982 Certificates of Participation. The City's bond counsel has indicated that the proposed refunding will not be adversely affected by the new federal tax legislation. The City of Chula Vista pays the annual debt service (approximately $523,000) on the 1982 Certificates of Participation and, pursuant to a repayment contract, it is reimbursed by the Redevelopment Agency each year from tax increment revenues in the Town Centre/Bay Front Project. Pursuant to Council direction, requests for proposals were mailed to firms that had previously indicated an interest in assisting the City is doing an advanced refunding of the 1982 Certificates of Participation. Firms submitting proposals were Miller & Schroeder, Stone and Youngberg, E.F. Hutton, Wells Fargo Bank, and Rauscher Pierce Refsnes. The proposals were evaluated in terms of: 1. Fees - Cost to the City for services to be performed hy the firm as ~-i~f~ncial consultant. 2. Content of Proposal - Demonstrated comprehension of the tasks to be ~)ndertaken and approach to structuring a refunding. 3. Qualifications Experience of the firm and its professional staff relevant to the proposed refunding. Page 2, Item 4 Meeting Date~6 All of the firms submitting proposals have outstanding reputations and are well qualified to assist the City in doing an advance refunding. However, Miller & Schroeder in keeping with their letter dated September 4, 1986 (Exhibit "A"), proposes to act as financial consultant at no cost to the City except for third party expenses relating to printing, bond counsel, and rating agency fees. These expenses would be borne by the City no matter which firm is selected as financial consultant. The proposals from the other firms ranged from $12,000 (plus expenses incurred in connection with information meetings, computer fees, verification of escrow) to $40,000. Although the proposal from Miller & Schroeder conforms with their letter of September 4, it is also recognized by both parties that this deal is somewhat smaller in size than that contemplated when they originally issued the letter. In light of this, Miller & Schroeder has further agreed that if, within the next 12 months, the City does another tax exempt issue in the amount of $5 million or less, Miller & Schroeder will provide the financial consulting or investment banking services and contribute its financial consultant fee or management fee. Attached as Exhibit "B" is proposed agreement with Miller & Schroeder. FISCAL IMPACT: Because of lower interest rates in today's tax exempt market, the City/Agency may realize debt service savings over the life of the issue of from $150,000 to $250,000 by a refunding of the 1982 Certificates of Participation. WPC 0388G /,l~y the City CoUncil of Chula Vista, California Dated .-'/.--~? ~/~' ~,1~'