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Home My WebLink AboutSTONE & YOUNGBERG - 1983-01-24 TiCe Notes ' Off ice of the City CCerk Huntington Beach, CaCifornia U i I - - _ REAUF�T FOR REDEVELOPMENT AGENCY aCTIO GJ.J,00 Hcp 41fto Date November 24, 1982 Submitted to: Honorable Chairman and Redevelopment Agenc pgpY�D nY CITY COUNCIL Submitted by: Charles W. Thompson, City.Administrato Prepared 6y: ffice of Business and Industrial Enterprise C1T Subject: APPROVAL OF CONTRACT WITH STONE & YOUNGBERG T AS AGENCY FINANCIAL. ADVISOR -7-1D Statement of issue, Recommendation,Analysis, Funding Source,Alternative Actions,Attachments: STATEMENT OF ISSUE: At its regular adjourned meeting of Monday, November 15, 1982, the City Council selected the firm of Stone and Youngberg to serve in the capacity of financial advisor to the Redevelopment Agency, and authorized staff to negotiate a contract with the firm for these services. Attached for the Agency's consideration is such a contract. RECOMMENDATION: Approve and authorize the Agency Clerk to execute the attached contract to secure the services of Stone & Youngberg to act as financial advisor to the Redevelopment Agency for the preparation and sale of tax allocation bonds. Industrial Development Bonds, Certificates of Participation and/or other Tax .Exempt Financings. ANALYSIS• Pursuant to the City Council 's authorization on Monday, November 15, 1982, staff re- quested Stone & Youngberg to prepare a contract between the City of Huntington Beach Redevelopment Agency and Stone & Youngberg for the provision of services of financial advisor. Subsequently, the attached contract was received and transmitted to the City Attorney's office for review and approval. In the role of financial advisor, Stone & Youngberg will work with the Agency staff in the structuring, preparation and sale of tax allocation bonds issued by the Agency. Stone & Youngberg will help assure that any tax allocation bonds that are issued are economically viable and are adequately secured, and the firm will prepare all necessary documents to bring the bonds to sale. In addition, the terms bf the attached contract state that Stone & Youngberg may purchase all or a share of any tax allocation bonds issued by the Agency. -The rate of compensation to Stone & Youngberg for work completed on behalf of the Re- development Agency is as follows: 1. 1% of the principal amount of the securities up to $3,000,000; plus 2. h of 1% of the principal amount of the securities in excess of $3,000,000 and up to $5,000,000; plus 3. 4 of 1% of the principal amount of the securities in excess of $5,000,000. , J P[O 4181 ' �w i Regardless of the schedule presented above, the minimum contingent fee for any single tax allocation bond issue for which Stone & Youngberg is acting as finan- cial advisor to the Agency would be $25,000. Unlike Stone & Youngberg's participation in other tax exempt financings on behalf of the City, in the preparation and sale of tax allocation bonds the Agency is liable for certain expenses regardless of whether or not bonds are sold. Speci- fically, the Agency must reimburse Stone & Youngberg for any out-of-state travel made in connection with the financing, any printing expenses for the securities and Official Statements, any mailing and shipping incurred on behalf of the Agency, any computer charges incurred, and any charges made by the rating agency, bond insurers and California Municipal Statistics, Inc. It is important to note that, if bonds are sold, these costs may be paid from the proceeds of the issue; but, if bonds are not sold, the Agency is liable for reimbursement to Stone & Youngberg for these expenses, if any have been incurred. These costs may be secured, however, through the Agency's agreement'with developers-for whoa tax-exempt financing is to be provided. ALTERNATIVE ACTIONS: Refer the attached contract back to staff for further review. FUNDING SOURCE: Housing and Community Development Block Grant Program, or Redevelopment Agency funds. ATTACHMENTS: Contract CWT:SVK/1p E r 6RXCw jA L— C14f Geisk s STONE & YOUNGBER,G MEMBERS: PACIFIC STOCK EXCHANGE November 11, 1982 Agency Board Redevelopment Agency of the City of Huntington Beach P. 0. Box 190 Huntington Beach, CA 92648 Attn: Stephen V. Kohler, Housing and Community Development Department Subject: Financial Advisory Contract for Tax Allocation Bonds, Industrial Development Bonds, Certificates of Participation and/or other Tax Exempt Financings Honorable Board Members: Thank you for the opportunity to submit a contract for financial advisory services regarding the Agency's proposed tax allocation financings. Based on information received from your staff, I understand that the Agency intends to issue tax allocations bonds, structured to neet market acceptance, to raise funds for capital improvements for various public improvements. SERVICES The following is a list of financial advisory services Stone & Youngberg would provide upon selection as the Agency's consultant. This list is not all inclusive and only represents typical services required to consummate the financing. As financial advisor to the Agency, Stone & Youngberg coamits its full resources and energies toward a successful financing. 1. . As financial adviser to the Agency, Stone & Youngberg will work with staff and other project participants in reviewing and applying economic information and cash flow projections in structuring the financing. 2. Stone & Youngberg will work with the Agency's Bond Counsel and staff in recommending specific terms and conditions affecting the basic security of the bond issue. 3. Stone & Youngberg will assist the Agency in selecting and in preparing a list of services required of the Bank Trustee. ' 4. Stone & Youngberg will conduct a cash flow analysis that determines the optimum maturity structure based on market conditions and security provisions. 5. Stone & Youngberg will prepare the text of a bond prospectus for sale of the securities. Said prospectus will include a description of the securities, the project, and pertinent financial and economic data. In the preparation of such prospectus, we will assist the Agency in the ascertainment of all material and facts and circumstances regarding the project and in their disclosure in the prospectus. The prospectus will be printed and mailed, together with copies of the official notice of sale and basic legal documents, to a comprehensive list of prospective bidders. ONE CALIFORNIA STREET. SUITE 2800 • SAN FRANCISCO. CALIFORNIA 94111 • 54151981-1314 Redevelopment Agency of the City of Huntington Beach November 11 , 1962 Page 2 6. At the direction of the Agency, Stone '� Youngberg will contact one or more bond insurance companies and/or rating agencies and provide them with sufficient information to obtain the highest possible rating on the securities prior to their sale. 7. Stone & Youngberg will represent the Agency at information meetings in San Francisco and Los Angeles, if such meetings are necessary or desirable. 8. Stone & Youngberg will represent the Agency at the bid opening for a public sale and will analyze the bids, identify the most favorable bid for the . Agency, and make a recommendation as to award of the bid. We will act as the Agency's agent if bid negotiations are required. After the bid is awarded, we will prepare for the Agency an actual debt service table based on accepted coupon rates. COMPENSATION Stone & Youngberg is prepared to begin work at once on behalf of the Agency based on the following compensation schedule which would be due and payable upon the successful closing of the financing: (1) 1% of the principal amount of tt.e securities up to $3,000,000; plus 00 1/2 of 1% of the principal amount of the securities in excess of $3,000,000 and up to $5,000,000; plus, (111) 1/4 of 1% of the principal amount of the securities in excess of $5,000,000. It is understood that the minimum contingent fee for any single tax alloca- tion bond issue for which Stone & Youngberg is acting as financial advisor to the Agency would be $25,000. In addition to the above compensation schedule, Stone & Youngberg will be reimbursed by the Agency for any out-of-state travel made in connection with the financing, any printing expenses for the securities and Official Statements, any mailing and shipping costs incurred on behalf of the Agency, any computer charges incurred, and any charges made by the rating agencies, bond insurers, and California Municipal Statistics Inc. Such charges will be the responsibility of the Agency and independent of the sale and delivery of the bonds. Stone & Youngberg shall not incur any obligations or expenses for which Agency is responsible without prior written consent of Agency. AGENCY APPROVAL FOR STONE & YOUNGBERG TO BID SECURITIES It is expressly understood and agreed between the Agency and Stone & Youngberg, that Stone & Youngberg may submit a bid to purchase all or some portion of the Agency's securities sold through a competitive public sale. Redevelopment Agency c, the City of Huntington Beach November 11 , 1982 Page 3 The City may terminate this agreement at any time effective 30 days following written notice to Managing Underwriter from the City. Stone & Youngberg shall defend, indemnify and hold harmless City, its officers, agents and employees, from and against any and all liability, judgments, damages, costs, losses, claims, including Workers' Compensation claims , and expenses result- ing from or connected with Stone & Youngberg's negligence or other tortious conduct in the performance of this agreement. This contract, when countersigned below, will constitute an agreement between Stone & Youngberg and the Agency regarding financial advisory services . Sincere. STONE YO R of rs :`Partner Redevelopment Agency of the City of Huntington Beach ATTEST: Agency Clerk Mayor APPROVED AS TO FORM: INITIATED AND APPROVED AS TO CONTENT: 41 City Attorney Director, Business and Industrial Enterprise APPROVED: Chief Executive Ofricer City of Huntington Beach November 11, 1982 Page 4 ATTEST: By City Clerk Mayor APPROVED AS TO FORM: INITIATED AND APPROVED AS TO CONTENT: City Attorney Director, Business and ndus rial Enterprise APPROVED: City Administrator