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HomeMy WebLinkAboutMINUTES - 03051991 - 2.1 To: BOARD OF SUPERVISORS �'........ E'L ' Contra 1 Phil Batchelor, County Administrator s` FROM: f Costa Count March 5 1991 DATE: spq,coax SUBJECT: 1991 Tax and Revenue Anticipation Note Program SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: 1. Direct the County Administrator to proceed with the 1991 Note Borrowing Program using a Financial Advisor and a competitive bid process. 2. Authorize the County Administrator to proceed with negotiations with Arnold Mazotti for financial advisor services for the 1991 Note Borrowing Program for a fee not to exceed $25, 000. 3 . Authorize release of a request for proposals for Bond Counsel services for the note issue to be sent to firms with the most experience in tax anticipation note borrowing. FINANCIAL IMPACTS: The annual program for Tax and Revenue Anticipation Notes to meet the County cash flow borrowing requirements has been very cost affective. Arnold Mazotti, the consultant who has assisted the County with the program in the past, has proposed a very low fee of $25 ,000 to act as a financial advisor for the 1991 issue. Mr. Mazotti is now working for the firm of Prager, McCarthy & Lewis. He has recommended that the County sell the 1991 notes using a competitive bid process. Recent experience has indicated such a process to be very cost affective if carefully planned and coordinated. All of the costs of the program are offset many times over by the earnings on the borrowed funds. CONTINUED ON ATTACHMENT: X YES SIGNATURE: X.2&2V RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON March 5, 1991 APPROVED AS RECOMMENDED r OTHER VOTE OF SUPERVISORS X I 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: 'Treasurer ATTESTED MAR 5 1931 Auditor-Controller PHIL BATCHELOR,CLERK OF THE BOARD OF County Counsel SUPERVISORS AND COUNTY ADMINISTRATOR Redevelopment Director / BY [(-� DEPUTY M382 (10/88) .. -2- BACKGROUND: The County has issued Notes for cash flow borrowing needs every year since 1979. The 1990 issue was for $65, 000,000. The County has a continuing need for use of the borrowed funds at critical times in the year for cash flow needs. In addition, investment earnings on the funds until needed annually provide a significant addition to County revenues. The County has managed to consistently maintain the highest ratings available from the rating agencies. The State fiscal condition and potential for County impact for the coming year will make the task of maintaining the rating even more difficult than in past years. We are proposing to use Mr. Mazotti as a financial advisor to assist with all of the actions necessary for preparation of a competitive bid for the County notes. The financial advisor/competitive bid approach is proposed for the 1991 issue in order to take advantage of the changing conditions in the investment market. Several other major Counties are also considering use of the competitive bid process as a cost affective method of accessing the market. Our recent experience with the bond issue for the purchase of the Douglas Drive building using the financial advisor/competitive bid process was extremely favorable, resulting in the lowest interest rate in many years. Many factors contributed to that rate but the competitive bid process was certainly an important factor. Knowledge of the County, the investment market and timing of the issue are all very critical to the success of the County program. Mr. Mazotti has extensive experience with our County. He has over 40 years of experience in the investment business. His knowledge of the County and the market conditions allows him to propose a very favorable fee to assist the County in the sale process. The competitive bid process will allow all qualified Underwriters to bid for the County notes. It is recommended that the County Administrator be authorized to proceed with the 1991 program on a competitive bid basis and negotiate an agreement with Prager; McCarthy & Lewis not exceed $25 ,000 for necessary services for the issue up to the receipt of the Underwriter bids on the notes. In addition, it is essential that a qualifed bond counsel be retained as soon as possible to assist with the legal documents. It is proposed that a list of firms with the most experience with note borrowing programs be sent a Request for Proposals, ' including a fee proposal, for providing the necessary legal assistance. A recommended list of the best qualified firms will be provided to your Board for selection as soon as possible.