HomeMy WebLinkAboutMINUTES - 04081986 - 1.52 !To BOARD OF SUPERVISORS
FROM: Harvey E. Bragdon
Director of Community Development Con�,�,tr
DATE:
March 31, 1986 Costa
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SUBJECT: Retention of Underwriters for Multifamily Mortgage Revenue Bond ssues Cou
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) a BACKGROUND AND JUSTIFICATION
I. RECOMMENDATION
Adopt policy of generally retaining two or more underwriters/investment bankers
for multifamily financings; said firms and their roles must be acceptable to and
designated by the Board of Supervisors or their designate; financing partici-
pants may suggest a firm to the Director of Community Development for inclusion
in the financing.
II. BACKGROUND
Contra Costa County has been an active issuer of revenue bonds to finance
multifamily housing. An essential party to most multifamily transactions is an
underwriter/investment banker. Aside from their normal role of purchasing the
bonds from the County and remarketing them to the ultimate buyer, the underwrit-
er is intimately involved in the creation of the financial structure of the bond
issue, and frequently is responsible for negotiation of critical elements of the
real estate structure.
The County has utilized the underwriting services of many firms in its
multifamily financings. Staff has additionally had the opportunity to be ex-
posed to other firms. Firms may have a number of characteristics that are wor-
thy of consideration - technical capability marketing capabilities, certain ,spe-
cialities or business relationships which may be essential to the financing,
personnel , reputation within the industry and among issuers, and degree of im-
portance imparted to the financing needs of the County, and the County itself.
The County is not only an active issuer in terms of the number of financings, it
is active in the process of structuring the financing. The County enters the
financing with particular policy goals. We have experienced the full range of
difficulty in realizing these goals. From our experience I have concluded that
future investment banking relationships should be based upon the criteria of
technical expertise, marketing capabilities, reputation of the firm, their per-
sonnel and priority provided to the County. The policy recommended above pro-
vides an opportunity for the County to utilize new firms, respond to the reali-
ties of the market place in terms of business relationships and specialities but
in a manner that protects the interests of the County. The above recommendation
does not institute a rotational policy. Such a policy is not in the interest of
the County, and may not be in the interests of the financing. Further, the
intent of the policy is to allow for only one underwri r in those cases where
CONTINUED ON ATTACHMENT: _ YES SIGNATOR
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RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMM ffiT'I'OrX OF BO D COMMITTEE
APPROVE OTHER ,
SIGNATURE(S):
ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER
VOTE OF SUPERVISORS
--�--� 1 HEREBY CERTIFY THAT THIS IS A TRUE
UNANIMOUS (ABSENT AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES. AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: _ ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
cc* County Administrator ATTESTED
COmCriunity Development PHIL 4BATCHELOR, CLERK OF THE BOARD OF
SUPERVISORS AND COUNTY ADMINISTRATOR
BY
M382/7-83 ,DEPUTY
-Board of Supervisors
Page 2
March 20, 1986
Retention of Underwriters for
Multifamily Mortgage Revenue Bond Issues
multiple underwriters either needlessly complicate or significantly effect the
cost of a financing.
III. FINANCIAL IMPACT
None. Compensation for underwriting services is contingent upon a sale of
bonds.