HomeMy WebLinkAboutMINUTES - 01181994 - 1.65 TO: BOARD OF SUPERVISORS CONTRA
COSTA
FROM: KENNETH J. CORCORAN,AUDITOR-CONTROLLER COUNTY
DATE: January 18,1994
SUBJECT: Refund County of Contra Costa Open Space and Park Bonds 1974 for Co. Service Area R-8
RESOLUTION NO. 94/69
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
Recommendation:
Approve the following contracts:
1. Bond Counsel Agreement, by and between the County of Contra Costa and Orrick,
Herrington& Sutcliffe, dated as of January 18, 1994.
2. Agreement Employing Sutro&Co. for Underwriting Services, by and between the County
of Contra Costa and Sutro &Co., dated as of January 18, 1994.
Financial Impact:
There will be no financial impact on the County's general fund. Refunding Bonds, like original bonds, are
general obligation bonds which allow for a property tax levy within County Service Area R-8 to meet debt
service requirements. Entire benefit of refunding will inure to property owners.
Back round:
These actions employ bond counsel and an underwriter to begin the process of accomplishing the refunding of
the CSA R-8 general obligation bonds. Sutro&Co. has determined that the refunding can generate property
owner savings at current market rates. Orrick, Herrington& Sutcliffe was the bond counsel on the original
transaction.
CONTINUED ATTACHMENT:_YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD CO ITTEE
_APPROVE OTHER
SIGNATURES(S):
ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER
VOTE OF SUPERVISORS
✓ UNANIMOUS(ABSENT ) I HEREBY CERTIFY THAT THIS IS A TRUE
AYES: NOES: AND CORRECT COPY OF AN ACTION TAKEN
ABSENT: ABSTAIN: AND ENTERED ON THE MINUTES OF THE BOARD
OF SUPERVISORS ON THE DATE SHOWN.
Contact: Stephen Ybarra (646-2225) ATTESTED , 1 8. 19 q
cc: CAO PHIL LTCHELORGLERK OF THE BOARD OF
SUPERVISORS AND COUNTY ADMINISTRATOR
i
BY _ l & A SL�LDEPUTY
RESOLUTION NO.
BOND COUNSEL AGREEMENT
This AGREEMENT, made as of the 18th day of January,
1994, by and between the COUNTY OF CONTRA COSTA, California
(hereinafter called the "County") , and ORRICK, HERRINGTON &
SUTCLIFFE of San Francisco, California (hereinafter called "Bond
Counsel") :
W I T N E S S E T H
WHEREAS, the County intends to refund its County of
Contra Costa County Service Area No. R-8 1974 Park and Open Space
Bonds (hereinafter the "Prior Bonds") through the issuance of its
County of Contra Costa County Service Area No. R-8 1994 Refunding
Bonds (hereinafter the "Bonds") ; and
WHEREAS, Orrick, Herrington & Sutcliffe served as bond
counsel to the County in connection with the issuance of the
Prior Bonds and therefore has been selected by the County to
serve as bond counsel in connection with the issuance of the
Bonds; and
WHEREAS, Bond Counsel has been since January 1, 1994
providing services, and is currently providing services, to the
County in connection with the proposed issuance of the Bonds and
the County and Bond Counsel desire to provide for the
continuation of, and to formally set forth the terms and
conditions of, Bond Counsel's employment to render legal services
consisting of the preparation of proceedings for the issuance of
SF2-25860.1
the Bonds and for consultation and related legal services in
connection therewith.
NOW, THEREFORE, in consideration of the mutual
covenants, terms and conditions herein contained, the County and
Bond Counsel do hereby agree as follows:
1. The County employs Bond Counsel to provide the
following legal services relative to the Bonds:
(a) Consultation with representatives of the County,
its underwriter, the providers of any credit enhancement, their
respective counsel, consultants and others, concerning the
timing, terms and structure of the financing, including analysis
of the advantages and disadvantages of each available financing
technique and considerations of state and federal tax law and
general public finance law.
(b) Preparation and/or review of legal proceedings for
the authorization, sale and delivery of the Bonds, including
preparation and/or review of the necessary resolutions, trust
agreements, assignments, escrow agreements and other necessary
documents for the execution and delivery of the Bonds and of any
credit agreements or similar documents necessary to provide
additional security for the Bonds; preparation of the proceedings
for the sale of the Bonds by negotiated sale pursuant to a
purchase agreement with the underwriter.
(c) Assistance in obtaining ratings on the Bonds,
including attendance at meetings with the rating agencies, if
required.
sF2-25860.1 2
(d) Preparation of the purchase agreement to be
entered into by the County and the underwriter in connection with
a negotiated sale of the Bonds.
(e) Review of the official statement describing the
Bonds to be prepared by the underwriter, and participation in
meetings reviewing the official statement.
(f) Supervision of the printing of the Bonds;
preparation of other proceedings and documents (including closing
papers) incidental to or in connection with the execution and
delivery of the Bonds (including documents and proceedings
related to issuance of the Bonds in book-entry form) ; and
coordination of the closing.
(g) Rendering of the final legal opinion on the
validity of the Bonds and the exclusion from gross income of the
portion of such obligation designated as interest and received by
the owners of the Bonds.
(h) Rendering of a supplemental opinion with respect
to the Bonds and the official Statement to the underwriter
addressing the enforceability of the purchase contract, the
exemption from registration requirements under the Securities Act
of 1933 and the Trust Indenture Act of 1939, and the accuracy of
the descriptions of the Bonds and the tax opinion with respect
thereto in the official statement. In addition, such opinion
shall confirm that nothing has come to the attention of the
attorneys working on the transaction for Bond Counsel which
caused them to believe that the official statement (with the
exception of certain expertised information therein and certain
SF2-25860.1 3
other information not provided by the County) contains any untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made,
not misleading.
2 . The services of Bond Counsel provided for herein
will not include representation of the County in any legal action
challenging the validity of the Bonds or related issues. In the
event any such services shall become necessary, Bond Counsel will
perform such services on such terms as shall be mutually
agreeable at the time.
3 . The County agrees to pay and Bond Counsel agrees
to receive as full compensation for the rendering of the
aforesaid services and for any services heretofore performed by
Bond Counsel in connection therewith a fee for legal services of
$37,500, payable upon the delivery of and receipt of payment for
the Bonds.
4 . In addition to the foregoing, Bond Counsel shall
be reimbursed for their out-of-pocket expenses, which include
traveling expenses, long distance telephone call charges, word
processing and secretarial overtime requested or necessary
because' of the time demands of the transaction, reproduction of
documents, costs incurred on Bond Counsel's word processing
equipment used to prepare documents, filing fees, printing
charges, and like expenditures. Reimbursement as provided
hereunder shall be paid following receipt of proceeds of the
Bonds.
SF2-25860.1 4
5. The County shall pay all costs and expenses
incurred by them and incident to the issuance of the Bonds,
including the cost of preparing the Bonds for execution and
delivery, all printing costs and publication costs and any fees
and expenses of the underwriter required to be paid by the
County.
6. The services to be provided by Bond Counsel
hereunder will be coordinated by the undersigned; provided, that
as warranted by the circumstances (including the need to utilize
others in the firm with expertise in particular areas or in order
to provide for the more efficient delivery of services) , other
attorneys, paralegals or staff persons of the firm may perform
work hereunder but always under the supervision of the
undersigned.
7. In the course of performing the foregoing services,
Bond Counsel will act as bond counsel for the County, and
documents which Bond Counsel prepares will be circulated to the
participants in the transaction and their respective counsel for
review. Nothing herein (including without limitation the
provisions of Section 1(h) above) shall be construed as creating
an attorney-client relationship between Bond Counsel and any
person other than the County.
. Bond Counsel regularly performs legal services for many
private and public entities in connection with a wide variety of
matters. Some of these clients may have some direct or indirect
relationship with the County as, for example, insurers,
suppliers, lenders, investment bankers, consultants, pension plan
SF2-25860.1 5
trustees, landlords, donors, bondholders or competitors. With
varied client representation, there is always the possibility of
other transactions between clients and of disputes among them.
In addition, Bond Counsel has served as bond counsel in
financings by governmental entities that include states,
counties, municipalities, special districts and other political
subdivisions, as well as departments and agencies of the
foregoing.
Bond Counsel is now providing services for these
clients and expects to continue to do so in the future. The
County is aware of Bond Counsel's ongoing relationships with such
entities and the other public and private entities described
above. No conflict is currently perceived to exist from such
representations. To the extent any actual conflict is perceived
to arise from such relationships, Bond Counsel will apprise the
County of such conflict and, after reasonable review and
consideration, the County will inform Bond Counsel whether it
will waive such conflict.
8. The County has determined that the savings
resulting from the refunding of the Prior Bonds and the issuance
of the Bonds will benefit the property owners within County
Service Area No. R-8 and not the County by reducing the property
tax collections attributable to the Bonds.
SF2-25860.1 6
A � .
WITNESS THE EXECUTION HEREOF the day and year first
hereinabove set forth.
COUNTY OF ONT COSTA
By
T'tie:
ORRICK, HERRINGTON & SUTCLIFFE
By
John H. Knox, Partner
r
SF2-25860.1 7
AGREEMENT EMPLOYING
SUTRO & CO.
FOR UNDERWRITING SERVICES
This Agreement is made the day of January, 1994, by and between the County of
Contra Costa a public body corporate and politic, created and existing under and by virtue of
the laws of the State of California, hereinafter referred to as "Issuer" and Sutro & Co.
Incorporated, a wholly owned subsidiary of John Hancock Financial Services, hereinafter
referred to as the "Underwriter".
RECITALS
Whereas, Issuer plans to issue bonds, to refinance the County Service Area #R8, 1974
Park and Open Space Bonds, (the "Bonds"); and
Whereas, Issuer and the Underwriter understand security for the Bonds will consist of
an unlimited tax on property within County Service Area #R-8; and
Whereas, it is in the best interest of the Issuer to employ an Underwriter to advise and
assist in the planning, structuring, purchasing and selling of the Bonds; and
Whereas, the Underwriter has such expertise as to qualify to serve as the Investment
Banker for the Bonds.
Now, therefore, for and in consideration of the matters hereinbefore referred to and the
mutual covenants herein set forth, the parties hereto agree as follows:
Section I Scope of Services
The Underwriter shall develop a financing plan with the purpose of assisting Issuer in
achieving its financial objectives. The services requested may include, but are not limited to
the following:
1. Organize and coordinate the financing team;
2. Financial analysis to determine feasibility of the refunding based upon existing
and projected revenue sources;
3. Review and evaluate of financing structures available to Issuer for refunding of
the Bonds;
4. Prepare and implement a comprehensive financing plan including underwriting
and marketing the Bonds;
SUTRO&LCO
Invnftnent Pmfeswnu s Since 1858 fiNnd.l Service
AGREEMENT EMPLOYING
SUTRO & CO.
FOR UNDERWRITING SERVICES
5. Facilitate, in conjunction with disclosure counsel, preparation of an Official
Statement (OS) including, among other things, a detailed description of the debt
to be offered, the financing plan for the project, and statistical and other matters
desired for informing investors and other concerned parties.
6. Coordinate of printing and distribution of the OS;
7. Prepare of cash flow statements, debt amortization schedules, and other
appropriate financial information requested by Issuer;
8. Coordinate of closing and delivery activities of Bonds;
9. Prepare of post-sale document with comparative analysis of Issuer's new issue
with those of similar type, size, and credit quality, for the purpose of
demonstrating the competitiveness of the net interest cost.
Section 2 Expenses
The Underwriter will pay its own costs incurred in the performance of this Agreement,
including cost of travel within California, communication, preparation (but not printing and
mailing) of Official Statement, the credit analysis and overhead expenses, except as provided in
the following paragraph:
Issuer, from bond proceeds or other lawfully available funds, will pay for legal fees,
including bond counsel and disclosure counsel; rating agency and credit enhancement fees (if
any); statistical, computer and graphics services (if any), accounting and verification reports,
cost of printing and distribution of the Official Statement and expenses of publication, advertising
and informational meetings and the costs of fiscal agent or bond trustee and registrar.
Section 3 Compensation
Compensation will be paid by the Issuer to the Underwriter on a contingent basis subject
to the sale and delivery of the bonds. The amount of compensation will not exceed 1.50% of
total par amount of the Bonds.
2
SUTRO CO
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financial Services
AGREEMENT EMPLOYING
SUTRO & CO.
FOR UNDERWRITING SERVICES
Section 4 Term of Agreement
This Agreement is to continue until the Bonds are refinanced, unless previously
terminated by mutual consent of the parties hereto. The County at its sole discretion will
determine whether or not at an appropriate point these bonds will be refunded (refinanced) and
should that decision not be taken and/or this refunding is not completed by December 31, 1994,
this agreement will otherwise expire and the underwriter will have no recourse for any monetary
compensation or otherwise against the County except as provided in the second paragraph of
Section 2 of this Agreement.
Section S Agreement Amendments
This Agreement may be amended by mutual agreement of Issuer and the Underwriter.
Section 6 Severability of Provisions
If any provision of this Agreement is held invalid, the remainder of the Agreement shall
not be affected thereby if such remainder would then continue to conform to terms and
requirements of applicable law.
Section 7 Governing Law
This Agreement and the rights and obligations of the parties hereto shall be construed,
interpreted and enforced pursuant to the laws of the State of California, and exclusive venue in
any and all actions existing under this Agreement shall be laid in the action or proceeding which
Issuer or The Underwriter may be required to prosecute to enforce its respective rights within
this Agreement.
Section 8 Miscellaneous
Nothing contained herein shall preclude the Underwriter from carrying on its customary
and usual business activities. The Underwriter specifically reserve the right to bid for and
maintain secondary markets on any Issuer's outstanding bonds. Services provided by the
Underwriter in connection with this Agreement shall not limit the Underwriter from providing
services for the Issuer in conjunction with other services requested by the Issuer.
3
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AGREEMENT EMPLOYING
SUTRO & CO.
FOR UNDERWRITING SERVICES
In connection with services agreed to herein, it is understood that the Underwriter will
render professional services within the extent of its training and experience. In rendering such
professional services, the Underwriter is acting as an independent contractor. Neither the
Underwriter, nor any of its agents or employees shall be deemed employees of the Issuer for any
purpose.
The Underwriter will at all times during the course of this Agreement, comply with laws,
regulations and rules concerning investment banking services promulgated by the Municipal
Securities Rulemaking Board, and all applicable federal, state and local laws, statutes, ordinances
and regulations.
The Underwriter shall not assign or otherwise transfer any interest in this Agreement
without the prior written consent of Issuer.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
the day and year first written above.
COUNTY OF CONTRA COSTA APPROVED AS TO FORM
By; Bv./' r, s R-
C Co nselr
SUTRO & CO. INCORPORATED
By:
ROBERT L. WILLIAMS, JR.
VICE PRESIDENT
SUTRO 4
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