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HomeMy WebLinkAboutMINUTES - 09291987 - 1.55 csr Das TO: REDEVELOPMENT AGENCY FROM: Harvey E. Bragdon, Assistant Executive Director DATE: September 16, 1987 SUBJECT: . Designation of Financial Advisor & Bond Counsel SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS Designate Dean Witter Reynolds, Inc. & Jones, Hall, Hill & White as Financial Advisor and Bond Counsel respectively for Agency Tax Allocation Bond issues; and authorize the Chair to execute fee letters with the respective designees. FINANCIAL IMPACT The fees of the Financial Advisor and Bond Counsel are fully contingent upon issuance of bonds. BACKGROUND/REASONS FOR RECOMMENDATIONS The Redevelopment Agency is planning its initial issuance of tax allocation bonds secured by tax increment from the Pleasant Hill BART Station Redevelopment Project Area. The bonds should be issued prior to the end of calander year 1987. The primary objective of the bond issue will be to retire a $4 million debt to Southern Pacific Transportation Company. In order to proceed with the structuring and sale of bonds it is necessary that the Agency secure the services of a Financial Advisor and Bond Counsel. In order to obtain the best advisors possible, the Agency sought proposals from over 30 financial advisors, and nine bond counsel firms (Appendix A) . Fourteen proposals were submitted by financial advisors and five by bond counsel. Firms and proposals were reviewed on the basis of overall quality, experience in California tax allocations bonds, and price. Seven financial advisors and three bond counsel firms were interviewed by a panel consisting of the County' s Auditor-Controller, Treasurer-Tax Collector, a representative of the County Administrator ' s office and the Redevelopment Director and Redevelopment Project Manager fro my staff. CONTINUED ON ATTACEII4ENT: YES SIGNA RECOMMENDATION OF EXECUTIVE DIRECTOR RECOMMENDATIONC6P AGAN COMMITTEE APPROVE OTHER SIGNATURE(S) : ACTION OF AGENCY ON September 29 , 1987 APPROVED AS RECOMMENDED OTHER VOTE OF COMMISSIONERS I HEREBY CERTIFY THAT THIS IS A X UNANIMOUS (ABSENT ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE REDEVELOPMENT AGENCY ON THE DATE SHOWN. cc: County Administrator ATTESTED September 29 , 1987 Redevelopment Director PHIL BATCHELOR, Auditor-Controller AGENCY SECRETARY Treasurer-Tax Collector BY , DEPUTY JK:krc APPENDIX A FINANCIAL ADVISORS Allison Williams Company Bancroft, Garcia & Lavell Bateman, Eichler, Hill & Richards BEAR STERNS * 1 CHARLES BELL & CO Chilton & O' Conner Cranston Securities DEAN WITTER REYNOLDS Dinkelspiel Belmont & Co. Drexal Burnham Lambert First California Regional Securities Grigsby, Brandford & Co. E.F. HUTTON * Imperial Securities Katz, Hollis, Coren & Assoc Manufacturers Hanover Trust Co. Merrill Lynch Capital Markets Miller & Schroeder Municipals Pacific Securities Paine Webber Capital Markets Perry Investments, Inc. PRC Engineering Prudential Bache Securities * Public Financial Management * RAUSCHER, PIERCE, REFSNES * Security Pacific Capital Markets Shearson Lehman Brothers * 1 SMITH, BARNEY, HARRIS, UPHAM, INC Solomon Brothers STONE & YOUNGBERG SUTRO & COMPANY Urban Futures BOND COUNSEL JONES, HALL, HILL & WHITE Manatt, Phelps, Rothenberg & Tunney O'MELVENY & MYERS * ORRICK, HERRINGTON & SUTCLIFFE Petit & Martin Richards, Watson, Dreyfuss & Gershon Sabo & Deitsch * Stradling, Yocca, Carlson & Rauth Wilson, Morton, Assaf & McElligott ( *) Firms submitting proposals (ALL CAPS) Firms Interviewed (1) Smith Barney & Charles A. Bell Co. submitted a joint proposal DEAN WITTER REYNOLDS INC. 101 California Street, P. 0. Box 7597, San Francisco, CA 94111 Telephone (415) 955-6331 September 25, 1987 Mr. James Kennedy Senior Planner County of Contra Costa Administration Building 651 Pine Street Martinez, California 94553 RE: Contra Costa County Redevelopment Agency- Tax Allocation Bonds Dear Jim: On behalf of Dean Witter Reynolds, we are delighted to serve as the County's financial advisor in connection with the upcoming tax allocation bond issue. As financial advisor, our scope of services generally will include: analyzing financing alternatives for the bond issue, structuring the issue, preparing the documentation relating to the sale of the bonds or certificates, reviewing all legal documents, facilitating the transaction through the rating agencies, monitoring the public sale of the bonds, and coordinating the closing. These and other services are more specifically outlined in Exhibit A to this letter. For such services, we would charge the fee indicated in our proposal - $17,500 inclusive of all expenses (except out of state travel), contingent upon the closing of the bond issue. As always, Evan and I personally are pleased to have the opportunity to assist the County with its financing needs. We particularly look forward to working with you and Jerry on this transaction. Very truly yours, Peter J. Ross Vice President Public Finance Department PJR:cra Acceptance: Contra Costa County Redevelopment Agency Chair EXHIBIT A DEAN WITTER SERVICES TO BE PERFORMED IN CONNECTION WITH THE SALE OF TAX ALLOCATION BONDS FOR CONTRA COSTA COUNTY REDEVELOPMENT AGENCY A. Dean Witter Reynolds (the "Company") agrees to perform all the duties customarily performed by financial consultants in connection with the public sale of tax allo- cation bonds. B. The Company agrees to proceed immediately with investigations, studies and plan- ning for the purpose of formulating a sound and feasible plan for the issuance of tax allocation bonds; and upon completion of the aforesaid investigations, studies and planning, to provide Contra Costa County Redevelopment Agency (the "Issuer") with a plan for the bond financing. Such plan shall include where appro- priate complete analysis and advice with respect to the following: 1. description of the Bonds to include principal amount, dated date, maturity ' date, denominations and numbering, registration provisions, maturity sched- ule, principal and interest payment dates, sinking fund provisions and prior redemption provisions; 2. reserve account requirements and capitalized interest requirements; 3. provisions for issuing additional parity bonds; 4. security for the Bonds and flow of funds; 5. project costs, source of funds and distribution of Bond proceeds; 6. covenants, terms and other conditions necessary to insure marketability of the Bonds; 7. establishment of funds and accounts and provisions for investment of funds; 8. timing of sale of the Bonds, and the necessary actions, documents and other information required in order to create a favorable market for the Bonds. C. The Company agrees to coordinate the Issuer's relations with any other govern- mental agencies that may be connected with the financing and to supply such agencies with all necessary data and information. D. The Company agrees to advise the Issuer of any assistance that may be available from other governmental agencies whether in the form of grants, loans or profes- sional expertise. E. The Company agrees to attend meetings of the Issuer when requested by the Issuer to do so. F. The Company agrees to assist the Issuer in the preparation and presentation of factual material describing the Bonds and the estimated cost of borrowing for use in connection with any bond election. G. The Company agrees to prepare and distribute to prospective bond buyers and bidders-an official statement, which will form the basis of the Bond offering and which will contain among other things: 1. official note of sale; 2. comprehensive informationwith respect to the Bonds, the Issuer, the legal documents and other pertinent information. H. The Company agrees to confer with either Moody's Investors Service,. Inc., or Standard & Poor's Corporation or both where appropriate, and to provide them with complete information regarding each issue of Bonds so that they may prop- erly consider the rating of the Bonds and provide their clients with up-to-date and accurate information on the Bonds and the Issuer. I. The Company, agrees to coordinate the adoption of all resolutions, the publishing of all legal notices and the happening of any other events required for the suc- cessful sale and delivery of the Bonds. J. The Company agrees, where appropriate, to assist the Issuer in all matters neces- sary for the validation of the Bonds. K. The Company agrees to give its best advice to the Issuer on market conditions and other factors affecting the successful sale of the Bonds. L. The Company agrees to stimulate a wide interest in the Bonds among prospective bond buyers through direct and personal contact. M. The Company agrees to encourage the formation of bidding groups to bid on the Bonds at public sale and agrees to provide such bidders with complete information regarding the Bonds in order that the most competitive atmosphere may be devel- oped. N. The Company agrees to assist the Issuer in conducting the public sale of the Bonds. O. The Company agrees to arrange for the printing, signing and delivery of the Bonds. P. The Company agrees to provide the Issuer with a bond record which shall include all details of the Bonds and their sale and the resulting payments required for principal and interest and other pertinent data. Q. The Company agrees to advise the Issuer in all matters relating to the investment of funds resulting from the sale of the Bonds under the control of the Issuer. -2- �. JHHW:PJT:ct 09/24/87 J3766 AGREEMENT FOR PROFESSIONAL SERVICES -- BOND COUNSEL SERVICES RELATING TO CONTRA COSTA COUNTY REDEVELOPMENT AGENCY TAX ALLOCATION BONDS THIS AGREEMENT is entered into this 29th day of September, 1987, by and between the CONTRA COSTA COUNTY REDEVELOPMENT AGENCY, a redevelopment agency created and existing under the laws of the State of California ("Agency"), and JONES HALL HILL & WHITE, A Professional Law Corporation ("Attorneys" or "Counsel"). WHEREAS, Agency wishes to undertake proceedings for the issuance of tax allocation bonds. of the Agency issued with respect to the Pleasant Hill BART Station Redevelopment Project Area (the "Project"); WHEREAS, in order to issue those bonds, Agency requires the advice and assistance of qualified bond counsel; and WHEREAS, Agency has determined that Attorneys are qualified to perform the services of bond counsel in the issuance of the tax allocation bonds, and Attorneys are willing to provide such services; NOW, THEREFORE, IT IS AGREED as follows: 1. Duties. Attorneys shall provide the following services: (a) Consultation and cooperation with Agency's attorneys, financial consultant and other consultants, underwriters, staff and employees of Agency and assisting such consultants, underwriters, staff and employees in the formulation of a coordinated financial and legal bond program. It is understood and agreed that, at all times while acting as bond counsel under this Agreement, Attorneys are representing the Agency and all provisions and obligations pertaining to the attorney-client relationship shall be observed by Attorneys in that representation. (b) Draft or review all resolutions, notices and other documents required by California law for the authorization of tax allocation bonds and for the issuance, sale and delivery of the bonds. (c) Preparation of and rendering service and instruction to Agency regarding all legal proceedings for the authorization, issuance and delivery of tax allocation bonds of the Agency for the Project; including preparation of the resolution of issuance and the trust indenture authorizing the issuance of such bonds, fixing the date, denominations, numbers, maturity and interest r i ' rates, providing the form of the bonds and authorizing their execution, authentication and registration; certifying the terms and conditions upon which the same are to be issued; providing for the setting-up of special funds for the disposition of proceeds of the sale of the bonds, including creation of a reserve fund, if any, and such other funds as may be advisable, and providing all other details in connection therewith, including special covenants and clauses for the protection of the interests of the bondowners; preparation of the resolution authorizing sale of all or any part of the authorized bond issue; preparation of all documents required for bond delivery, and supervising such delivery; preparation of all other proceedings incidental to or in connection with the issuance, sale and delivery of bonds for the Project. (d) Assist Agency's staff and financial consultant in the preparation and review of the Official Statement or similar disclosure document to be used in connection with the offering and sale of the bonds. (It is understood, however, the Counsel will not independently verify, or assume responsibility for, the accuracy, completeness or fairness of the statements contained therein, other than the description of the bonds and of the legal documents which it has drafted.) (e) Provide tax advice, including the preparation of a non-arbitrage certificate for federal income tax purposes and, if necessary, apply for a ruling from the Internal Revenue Service regarding the federal tax status of interest on the bonds. (f) Determine the need for obtaining a permit to issue bonds under the securities laws (state or federal) or no-action letters from the Securities Exchange Commission and California Corporations Commission. (g) Review a certified transcript of the legal proceedings taken by Agency for the authorization, issuance and sale of the bonds, and review such other reports and documents as Agency deems necessary for the purposes of the opinion described below. (h) Upon completion of proceedings to the satisfaction of Attorneys, provide a legal opinion unqualifiedly approving in all regards the validity of the bonds, the legality of all proceedings for the authorization, issuance and delivery of bonds and all other transactions relating to the Project, and stating that interest on the bonds is excluded from gross income for federal tax purposes and exempt from state personal income taxation (subject to certain qualifications), which opinion shall inure to the benefit of the purchasers of the bonds. (i) Any and all legal consultation requested by Agency through the Agency's attorney concerning the bonds or the financing of the Project at any time after delivery of the bonds. -2- (j) Such other and further services as are normally performed by bond counsel, it being understood, however, that this Agreement is intended to apply to one series of securities issued for the Project only. 2. Duties -- Exceptions. The following services are excepted from the services to be rendered for the fees set forth in Section 3 of this Agreement: (a) Any services to be rendered in any litigation involving the Agency; and (b) Any services required to obtain federal, state or other subventions or loans other than sale and delivery of municipal securities to any federal or state agency. For any such services which Attorneys are directed to render for and on behalf of Agency, compensation shall be on a reasonable fee basis to be agreed upon. 3. Compensation and Payment. (a) Compensation for the services shall be based on the following percentages of securities issued and sold: one-half of one percent (1/2%) of the first $5,000,000 of securities issued, one-quarter of one percent (1/4%) of the next $15,000,000 of securities issued, plus one eighth of one percent (1/8%) of the securities issued in excess of $20,000,000. (b) Counsel shall also be reimbursed for out-of-pocket expenses actually and necessarily incurred by it in the course of providing legal services hereunder for out-of-state travel at the Agency's request, expenses of shipping, delivery and courier services, photocopying expenses, and official transcript duplications costs. (c) Any and all fees and expenses under this Agreement shall be paid only from bond proceeds when and if the bonds are issued. In the event the bonds are not issued, Agency will not be obligated for any compensation or reimbursement of any kind. 4. Responsibilities of Agency. Agency shall reasonably cooperate with Attorneys and shall furnish Attorneys, as requested, with copies of all proceedings taken by Agency, and such other matters as are reasonably deemed necessary by Attorneys to render an opinion upon the validity of such proceedings. 5. Termination of Agreement. Notwithstanding any other provisions of this Agreement, this Agreement may be terminated by Agency at any time by giving written notice to Attorneys with or without cause. In the event of termination, all finished and unfinished documents, exhibits, project data, reports, and evidence shall, at the option of Agency, become its property and shall be delivered to it by Attorneys. -3- A � ` 1 IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed by their respective officers and representatives duly authorized, on the day and year first above written. CONTRA COSTA COUNTY REDEVELOPMENT AGENCY Y JONES HALL HILL & WHITE, A Professional Law Corporation By aul J. .Th' mig, E q. -4-