HomeMy WebLinkAboutReso 2009-263RESOLUTION NO. 2009-263
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AN AGREEMENT WITH THE
INVESTMENT BANKING FIRM OF E.J. DE LA ROSA & CO.,
INC. TO PROVIDE UNDERWRITING SERVICES FOR
RESTRUCTURING OF CITY BONDED DEBT IF DEEMED
ECONOMICALLY FEASIBLE
WHEREAS, as a result of the significant reduction in development-related fees currently
being collected, the City is anticipating restructuring a portion of the debt related to its Public
Facilities Development Impact Fees (PFDIF) obligations; and
WHEREAS, the City anticipates that this restructuring will enable it to better meet its
long-term financial goals; and
WHEREAS, a Request for Proposal (RFP) was issued on September 2, 2009 for
investment banking and bond underwriting services anticipating the possible restructuring of
City bonded debt; and
WHEREAS, the RFP closed on September 21, 2009 and yielded proposals from thirteen
municipal investment banking and underwriting firms; and
WHEREAS, afive-member Selection Committee consisting of the City's Director of
Finance, Assistant Director of Finance, Treasury Manager, Fiscal and Management Analyst and
the City's Financial Advisor was created for the selection process; and
WHEREAS, the Committee selected four of the thirteen firms to interview and
unanimously agreed to recommend the selection of E.J. De La Rosa & Co., Ina (DLR); and
WHEREAS, DLR has significant experience as an investment banker having
underwritten 60 lease revenue/Certificates of Participation financings since 2006, having an
aggregate par amount of $3.2 billion; and
WHEREAS, the Committee felt that DLR was more focused on the City's needs based
on their business philosophy of dealing only in California public finance; and
WHEREAS, DLR is very familiar with the City of Chula Vista having worked on
previous bond issuances for the City as well as the County and City of San Diego, the San Diego
Association of Governments, the San Diego Unified School District and the San Diego
Community College District; and
WHEREAS, DLR offered the second lowest pricing at $7.36 per $1,000 issued; and
WHEREAS, DLR is a California-based investment banking services firm with full-
service offices in Los Angeles and San Francisco; and
Resolution No. 2009-263
Page 2
WHEREAS, the firm is a top ranking municipal bond underwriter in California; and
WHEREAS, DLR is the only major firm serving California municipal issuers that
focuses exclusively on the California municipal bond market; and
WHEREAS, the firm has over 20 yeazs of investment banking experience in bond
underwriting, transportation financings, and redevelopment and land-secured projects; and
WHEREAS, in July 2008, DLR served the City as Senior Manager on its 2008 Tax
Allocation Bond restructuring; and
WHEREAS, DLR assisted the City in obtaining an underlying credit rating upgrade from
Standazd & Poors (from A- to A) and securing an insurance commitment from FSA, which
allowed the City to generate cash flow and budgetary savings to the General Fund; and
WHEREAS, DLR aggressively priced the City's bonds during a tumultuous time in the
market, underwriting $11 million of unsold bonds (DLR used their capital to purchase the unsold
bonds) on the day of pricing to achieve a 4.93% TIC (true interest cost) for the bonds issued; and
WHEREAS, the City Council has found that DLR was selected in accordance with the
requirements of Chula Vista Municipal Code section 2.56.110.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista approves an agreement with the investment banking firm of E.J. De La Rosa & Co., to
provide underwriting services for restructuring of City bonded debt, if deemed economically
feasible, a copy of which is on file in the Office of the City Clerk.
Presented by
m_
Mazi Kachadoorian
Director of Finance/Treasurer
Approved as to form by
Resolution No. 2009-263
Page 3
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this 5th day of November 2009 by the following vote:
AYES: Councilmembers: Bensoussan, Ramirez, Thompson and Cox
NAYS: Councilmembers: None
ABSENT: Councilmembers: Castaneda
Y L
Cheryl Cox, yor
ATTEST:
r.LcC~ 0
Donna R. Noms, CMC, City Clerk
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
CITY OF CHULA VISTA
I, Donna R. Norris, City Clerk of Chula Vista, California, do hereby certify that the foregoing
Resolution No. 2009-263 was duly passed, approved, and adopted by the City Council at a
regular meeting of the Chula Vista City Council held on the 5th day of November 2009.
Executed this 5th day of November 2009.
~~~ ~
Donna R. Norris, CMC, City Clerk