HomeMy WebLinkAbout0423.091,
Septe~Qr 19, 1991
HONORABLE CITY COUNCIL
Palo Alto, california
3
CONTRACT WITH 8ECURITY PACIFIC AS UNDERWRITER TO RBPIBANCE CIV~
CIlffD
Members of the Council:
Report in prief
StafE has determined that over $50,000 annually can be saved by
Tefin~ncin9 the Civic Cen~er Certificates of participation~ After
a formal Request for Proposal ,RFP) process, staff recommends that
th~ City ente~ i~to the attached contract with Security Pacific
National BanK to operate as underw['"iter for this refinancin9~
No~ally, debt financings aTe referred to the Finance committee,
but thi$ would mean that Council would not approve the selection of
a.n underwriter to begin 'Work. until late November or early Deceml>er.
Staff is concerned about acting expeditiously to ensure the ability
to take maximum advant.age of the current interest. rate enviroruoent.
~J:;ground
In september 15.83, the city of Pal-o Alto issued $5 1 920,000 in
Certificates of Participation to improve and repair City Hall. A
third elevator ",as added and certitin structur-al and decorative
elements of the building were strengthened for seisnic purposes.
This financinq was issued ~ith coupon interest rates ranging from
6.5 to 9.S percent.
Staff has determined that over $50,OG~ annually could be saved ov~r
the. life of the financinq by refinancing the debt now, while
interest rates are relatively lo~. staff also recognized that the
Capital Improvement Program (eIP) currently contains $1.2 million
in 1991-92 for Police ~ing strengthening (elP lBS08) and $~Oo,ooo
in 1991-92 for a fire sprinkler system (CIP 19108), whict.l CQuld
also be inCluded vith the refinancing.
CMR;423:91
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_~mte:lt for ...f.ropo9a.J~
On August 2, 1991 staff issued the attached Fequest for proposal
for an underwriter to 25 firms. By the September 3~ 1991 dua date,
only four firms submit-ted proposals: Sutro" Company; Rausche:o:'
Pierce Refsnes, Ir:=:.; Security F'acificj and Stor.e & Youngberg. All
four proposals cor . .:"irmed that the cost sa.vings -were in excess of
$50,000 ann'..la lly, or $500.000 present val ue.
A committee with ~embers from the Finance and Public Works
Oepartments revie\w'ed the proposals and held oral intervie.,.·s on
September 5 and 6, 1991. The committee ranked the firms based on
the criteria of: experience, organization, agreement to points in
RFJ?, qualifications and availability of assigned staff, fee and
quality of work previously performed by the firm. The committee
felt that Sec~rity Pacific and stone , Youngberg gave excellent
presentations and met all requirements of the RFP. Securi ty
Pacific responded w~ll to all the questions in the RFP and made an
especially favorable impression during the oral interview where
they provided detailed supplemental information 'With onlj' a few
dco.ys notice. The co:nmittee was also impressed by the presentation
of Stone , Youngberg, but staff feels that it is important to
spread business and maintain a competi tiv£ environmE:nt. Stone"
Youngberg has worked with the City on sEveral occasions recently,
including the utility Revenue Bonds, 1985 Series A Adjustable
Convertible Extendable Securities (ACES) refinancing, 250
University Avenue's Assessmen-: Distt:'ict financing, and t:'le upcoming
storm drain financing.
Securi ty Pacific has established a -very good record of previous
work with the' City of Palo Alto. Security J?acific acted as co
managing underwriter for the sale of th~ 198) civic Center
Cartificat£s of PartiCipation, and has acted as financial advisor
fer 1985 Utility RE'venue Bonds, and the 1987 California Avenue
Parking Assessment Bonds. During the~e financings, Security
Pacific established an Excellent record of resp.onsiveness and
proved they could easily cover all necessary meetings even though
they are located in Los Angeles.
Security Pacific proposes a $12.50 per $1,000 fee for the services
of underwriting the refunding of the bond5. The outstanding
balance is approximately $5 million, which calculates to a fee of
$62,500. The underwriter ""ill be paid from the financing proceeds,
so no budget alllendment is necessary. No payment is required if
there is no refinancing.
After the undet"'Jriter is hired, staff .... ill work ""ith
team to prepare a preliminary cfficial statement and
legal documents, obtain approval from the Palo
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the financing
the necessary
Al to Public
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Improvement Corporation, make presentations as required to the
rat1nq aqencies, and return to City Council for approval of the
financing document5~ Staff anticip~tes Council will l",eed to
approve the finan~inq in November 1991,
staff ~ecommendation
staff recommends Council approve and authorize the Hayor to execute
the attached contract with Security Pacific National Bar.K, m'lder
which the bank ~ill operate as the underwriter for refinan~ing the
civic Center certificates of Participation. Staff will return to
Council tor approval of the finailcing documents.
Respectfully submitted,
h-4~~
GORDON B. FORD
Treasury Manager
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EMILY HARRISON
D;'1ctor of F' -e
\ . ~~F~LLEM~'-I-N~G~~~~
~lstant City Mana
Attachment
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Ci'1Y OF PALO .u. TO
lNVES'I'MENT B.ANICING SERVlCES
UNDERWRrI'ING CONTRACl'
La4i_ and O-anU-.n.:
Xn a~c. with our undaratan4inq with th. City o~ Palo
Uto (the tIIcity-) conceml:nq the eon~lated tax".XQ:JIpt r.fu.n41nq
(the ."f~n:Unqll i through the iaauanoe 01: c.::-t1t1oat.. ot
Partlclpti.'-ion 1n the ton. of C4:rtiticates (the IICert1f1oat .. ·} by
or on Wlal.f at the City, ve herel>y .~1t-to tb.. City tnt.
~.1"Wr1tin9 contr.a.c:t (the "Dnd.rvr1tl7i9 Contract-) which, upon the
clty t a &ccept..s.ru: • .and eK6cution hereof, .mall be a valid and
I>indl.nq oI>lill,,!;J.on of the city aetinq for ibldf.
tie hereby aqr_ to auiat the City &III f=llc.'W.;
l~ security Pacific Mational a.nk (BSPK!tII} vill conter and
cOf)llult. with the city and the City'. rep-r ... ntativeM and vith
th. Clty 1 1i1o .luJlnMr., conliiulunt. &nd attorney. tor the
PUl.'pQ5. o~ uveloping " detal11ld financIng struc.tut'e that vill
re.U~t in ~. lawe.t ce.t to the Clty. Specitie&lly, to the
extent that it i. leqellY and financially fe •• ible to de so
&bd in order to .. sure that tinancinq for the Refundino yill
b4 ava1lable, v. ~111 alao asa1at in the praparation of the
praU .. ainar'i and fi.Ml c5.oetmentation relatino to t~.
Cortificate. and the a.funding' and in the adoption by the City
of ~ approv~ raaolut1oh(.) relating to the C~lt1cate •.
'!'ha f .. tor .uch ••• 1c.t.&r".ce will be payable at the t.im. or
clo.in; ot tb. Certittcat •• i •• u.Ca) followinq eo~l.~lon o~
the Ratand.lnq. Bzpenll:.~ ,except ~ d,uerUuad ber. ina fUr)
incurred. in. connectS.on with the i •• u&nce ot the C-e.rt.1tieat ••
-will be paid •• dra:8cri-c:..d. belr.lw. Thar. 'Will be no r •• it
.ecuritl .. are Dot 8014. The certltica.taa at the ti .. of
d..&llve.ry .hall he accollpani.c1 :by th"31 1.,mq\Ulllf'ie.d approving'
11191al opinion of nationally recognll:ec! bond. oounael •• to the
validit.y Of the Cert1f1cat .. &I'ld. U.e exllUllption ot 1nt. .. r •• t
tharaon troB Jl'e4e.ral and state incoa. taxu, toq.t.het" -with It.
nonlltllJ&tion -c.rtlf1c&t2 and other UAW!.l cloeinq pa.p.rs in
cuata.ary ton, ineludlnq 8'1,1ch doc:wlieJlU: .. are required by
t.1\a purc.."1a.sa contract ,the -Puz:obaa. contrac'!;.-) vlth reapect
to t.be ca'l"tif-Leates to be: antuw1 into betve..n the. city .rut
SP.NB. At tha city·. requeat Y8 yill prgyid. the City with a
copy ot a ton of Pttr.cha •• Cont:ract. \UilBd by us vit.h re • .,.ct to
• co~arable prior r1nancinq.
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2. SPNl! .. ill &<1vi .. aM c.".,..ol vith tllo City ancl !:be City'.
atto~, !.nol'IJ.41ng tba approving bond. att.orney., u to the
aut:t.!eieney and. partinenay ot th~ varioWli ;"eqlO.ire4 c!oOWle.nte froll
an t1ft4ervr.1tlnq ct.and.po1nt and vill raoommend .~oh ohang .... Wd:
0"""1<1",, advioalllo in ord."" t<> ioprcvo the marketability ot tho
e.rtiticat"" propooed to be iaouocl.
3. SPIll will conf... vi th tond. rat!".. c .. qani •• tlo,.,. if IUId ..
"ppropriat8! vith reqatll to the ••• iqruoent of an i:>veatmant rlltinq
lOA the ce.xtlticatu ~I in oonncaction tb.rewith l n. yill pre.aent
tD ouc:h bone! rat.1nq Qrqanisationo relevant data ancl intoraatioo t<>
permit it to evaluote and r •. te tho Certifjcates prier to thair
offerIng. Thi. evaluation vill also include the conal deration ot
mun.iclP<ll boM insurance.
... SPHB yill c1avalop and pNsent _pacitio reeOlll3lenc1at1ona as to
the prot • .;:tlva and ot..'l\er OOVananta to be inolud.ad 1n tAe reqult"ec1
leqe.l document., inclucllnq maturi'CY' Icb.edUl..s ... call :t.atu.r.a and:
•• curlty p:-ov1s1ona. A11 Qf the provld.on. to be cont411ned 111 t2w
r<>qu!rec! leqal d.OCUJMntO .ball boo ow.j.ct t<> tho mutual
.at1Jii:raetion or the City bond. oouna:al, t.ha city'. attorneys., SAia
and SPHB·. ooUlUlel..
~. BPNB vill present spec! f i.e pr ie lnq auqqe8tlon8 lUI to the
t~ of the •• le of the C.rtitioat .... taking into .ccount. Ul"ket
COllCUtion.; and: ether known o:tferino. ot aiaila.r or ccmpet1tlv.
seout'itl... SPNB'. 501. coatpQl\&ation tor un~lIr-likinq the tinanciJ1g
o~ the btwlcl1ftq llhell .,.""iat or an Ulld.ervrltor'. d.iacount )lay&t>lo
tram t1nancinq proeo-do .~d. ~ond.1tiQnol ~n the cl .. ing ot tn.
1nd.ividual certifioate .. offerinq.. In addition.. SPRB wi11 b.
ABp0n.5U,le tor provIding' tc the City SIl80itio: ooapar&bll.
f.nforaatlon fro=. .imilar financing transact10ns c!amonstrating the
COlIpGtitiva nature of ."Y underwritez.r. ,:!i_count paid as.
companaat1on bY the City to SPNB. Suc:h <U15ocunt 8b.al~ l10t axcaed.
1.25' of the ~~t of •• euriti •• aet~lly .a~d~
&. In cooperation with the City, "ole will prepare & d:r'aft ot a.
pr.ltLL~ary O%ficial &t&taaent or ottering mcmorL~ua to he U..d in
conncact,lon with fj,ftAnair.g the. Ratundin;-••
7.. SPNB 'Will aaJte availabl. fol:' cont.rence and consUl tation &U~
of our peraormel a. lllay b. rea.ona])ly requested by the city, "liven
aut:lo1ent notice in crd.er to AlloY the City to pro<:eed promptly In
an efticient and expeditioUJI manner in the d&vslopmant c~ the
Ratun~in9 and ita f1nancin~.
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Tb4 City a9r ••• to (1) coopera~. vlth bvnd ccunael O~ other
at.torft.-y. Wo will pr.~re leqal dOCUlll*1lt. and. proe... ec1inga, a4v.1 ••
and cO'l.1.nMll with. n .. pec't to &ny I1tlqatlon attect1ng the rinanci..Tj9,
revie" contract. Mel other 1e9"51 :S&011JI.rlnt. and re.ndar an
unqllal1.:tlltC1 approvinq 1eqa1 cpinion o~ the C.rti.t.1c:at. .... (11) u:1:.e
avsilable to BPNB perlonnel, information. report., r.corrts,
stltt.i.tical data, financial .to!:t..iiatanta.. tI1inql v.ith tade.rll or
atate ageftOi •• ancS leqal dOCUJMntl and opiniona that. tha City hay.
or cl:Itain with :t'ecp4lct tel t.~ R.erundinql, cr which Jaay ba
reasonably requa.tad by SPNB in connect1on vith. the perfcrtlance of
cur obli\l"Uona h .... uM.r aM (111l in4..nUy an4 1101" harll.l ••• ~h.
Undervr1t.er and each penon, if any, Wbo hal the power, 4irectlyor
indlreot.ly t t.o direct or oauaa the directIon of the u.n.g~t and
paliei.. of -th~ tTn:!.rvr1.ter through th. OYnaIl"ahip of voting
.ecur1ti •• by contract or otherwi .. , a,&in.t any and all lo ......
claiae, daaaq .. , liabilit.i •• O~ .~~. Whatco.ver ari.inq out of
any untrue .tateaent or aiale&41nq at.tesant of a material tact
contained ill th. pralilll.1.nary 0",101&1 .tateae.nt or ott.ring
Jle-.crandum or .arising out of anY' CNl1~.1on or all~ed C!ai •• ion fro.
the pre1lminary offle:1al .tat_ant or ott'.rincJ ae.orandwa of' any
-.at.erlal tac.t. 1leC .... .s..:y in ori.r to JUllte th.e .btelD8tlu .. de
therein, 1D tJ\e li9ht of the circ:u.aat&JtCei. uncler whioh they wer.
ulla, not .iel"''''1h9.
ftl.e t.ra ot tbe Unc1erw.itill9 COntract. .hall. b. for Cl1'I Init1.al
period at three year.. f~. ita ACC.ptance. d:urinq which tiM W
.hall have the ucl1aiv. Ei~"ht to provide the •• rvioe. 4e8cribed
henlrl.. "':11. initial tara of thi. Underwriting contract aay be
ertend:ec\ ~11'U1 autual conaent ot the under.lqne4.. Th.re 1.a no liait
to the 1::1'11. :1)er ot' erten.aiona allowu1.. Th i. AgrMllent. aay be
tarainated b)' -.I"eher party upon. tucnim.incJ written notice.
All costs 11 cu~ w:t.ich are 1nc14el'\t.al to thi .. financing,
including the tH_ and d1.bunementa of attorney., incluClinq bond
eou.!wel a.hd counael far th. City, tru .. e.e. or •• crow 8ge.n't re .. , the
eotrt. o~ preparation and }2rinttnq ot the pr.li.1.:l.ary off1cial
etatQM!l!'lt or otter1zt.go ae.orudwa, the e0'8t of printinq .or enqra..,inq
t.."). certificate_, the OOII'C. ot rat.ing th. MCUriti_ and other
expen ... it~ towat'd the 1 •• ual\Oe or the Cert.1fiea.t ... luIll b.
po.i" by tu City.
SPIl'S'. obli9atl.0lUI heraun4at tIlIall be .ubjK't (11 b the
pert~ by th. Cit.y to our .at1.raction of u.. C11:y'.
ob119ationa at or 'priOE to the t.auana. aM delivery of tbe
Certlfloate., includ1nq th. Ci~yr. obllqatlar~ hereunder and un~.r
the Pllroh .... con~ac:t and (ii) to the accuracy in all lU.terlal
:r-upac;ta in 8PN8 1 " ju~q:aent of' the rept' •• entatlon. cont.ined in the
PurC!hll. •• Contract or-any 40C'11JMnt nqulre4 th.rein .a or th. SPllBI.
ju4~t, 'WitJ1. any of the conditione referred tQ her-aiD will
conetitute • rS4aOn for net 1 •• uing tbe Certificate. attributable
to the City tor purpc ... of" the procedinv paragraph.
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~~ underwriting Contract oonstitut •• the entir. aqre.-.nt
and .~ a1.1 prior a9~M.nt. and. und.er.t&nc:1inq, both 1A"itten
and. oral. l::teIt.wee.n the p.art:1u v1.'th r .. pect to the .ubject matter
thereot and 1. sad •• 01.1y tor, And shall ~lnd and in~ to, your
~.t'1 t and the underwriter I And their raapaeti va .ucc ... o""~ and
.... 19Jl8, Im4 no M,her ptraon ~11 have or acqg.b:'il! any riljJbt.
tiIIremw1er or by virtue her410f ~
ATTEST:
City Cler~-
APPROVED:
City Manager ------
D{~l!cto~ of Finance
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~.peet~ully aWbRitted,
SBCIlIUT'l nanc: IIATICIIIAL 1IIIn.
By ~s=r:-C
T,xp,y,r 1.0. I 95-277,475_
C:r'1'Y or PALO AL'l'O
By--------------
Ita Maypr
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CITY of PALO ALTO
Purchasing , Contract Administration
PALO ALT?-ca 94303
REQUEST FOR PROPOSALS
COVER LE'1"1'D -PAlIT l: DATE: Auqust 2, 1991
aBOl1"1l!(I!V'I'8.
The CIty of Palo Al to, .FINANCE DEPARTMENT ~ Treasurer, hereby
requests proposals tor:
•• Certificates of Participation ODd.~iter .~
Ptoieet Administrator: Gordon Ford
Phone; (415) -'69-2416
J DBL~Y of DOC11HDTB I
All proposals and accompanying documents shall be submitted in a
sealed envelopa addressed and marked as follows:
·Und~ryriter Project-
Documents viil be accepted until 3:00 p.m. Tuesaay. Sept. l. 1191
in the office of:
or mailed to:
Purchasing , Contract Administration
1st Floor, Civic Center
Purchasing , Cont,'['act Administration
250 Hamilton Avenue, P.O. Box 10250
Palo Alto, CA 9430)
I PROPOSALS HUS'!' II:.!: RECEIVED PRIOR TO: I
3:GO p.m .. r-~es~SEPrEMBER 3rd, 1991
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PART % -COVD LII'1"1'ER
Propo&ala are opened in the Council Cvnterenca Room at the
Civic Center, 250 Hamilton Ave~, Palo Alto. PropoGala received
atter the seneduled closing time shall be deemed rejected, shall
not be accepted and ahall be returned to the proposer unopena~.
Pre-proposal ••• tiDq date,
LocatloD:
None Scheduled
The proposer, in accoraance with the Terms' conditions of the
proposal doc~xoents, shall be required tc:
CaJ aqree with terms and conditions of the contract
documents;
(b) provide labor/service, equipment, and/or materials
in acccr~ance with the contract documents;
(c) be licensed with the State of California if
requirea by this project;
Cd} give experience and. financial qualifications as
required;
(el sign the proposal;
(fJ be knowledgeable of state l~w and local Ordinances;
(9) meet insurance requirements, if required; ~nd
(h) meet other requirements as specified.
I !'ABL:a 0 f CONTEJl'TS I
Part I
Part II
Part HI
Cover Letter and Contract Requirements.
Certification of Non-discrimination
Signature , A~knowledqement
Proposal Requirements
I DEP:naT:IOlda: I
*An aqreement or contract is referenced herein as P.O., Agreement,
or Contract. The A9reeme~t or Con~rAct will include the Terms'
Conditions of this document and all attachments, drawings,
spacifications, ~xhibit& •
• ·Project XAn~qer· or -Administratcr W shall be the person named to
act in such capacity by the CITY and shall be the authorized agent
under the Contract designated to provide inspection and ~nswer& to
technical questions and questions concerning the specifications .
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DIIl'ZlfUZa. ...
C:O"t1I1\l~
.·Seller,· ·Vendor,-·Bidder,~ ·Proposer,·
·Comp~ny,· ·Supplier-are synonymous he~£in .
• Contractor,·
• ·ClTi-means city ct Palo Alto, and any references in the city's
Standard Specificationa or CalTrans Standard Specification to the
·state-, or ·Oepartaent-, ahall be deemed to refer to the City~
.·SPECIFlCATIONS· or "REQOlREMEl'i""TS~ indicate the d.irections.,
provIsions, standards and crit4ria conteined herein.
I CIr~ CONTACT INFORMATION I
PUrch •• 1~q , contract Admini.tration
Xatby Lee
Pbone, 41~/329-2178
:r.:en Haskins
Phone, 415/329-2300
projeot COllteot ••
Gordon Ford, Project Administrator
Phone, 415/329-2416
Issuec! by.
Ken H. Baskins, Manager
Purchasinq/Contract A~!ni.tration
City or P~lo Alto civic center
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PART 1/
PROPOSER REQUIRED INFORMATION
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CITY of PALO ALTO
REQUIRED VENDOR INFORM A TION
CERTIFICATION or Non=d/scrlmlnatloo: As suw~ers or goods or services 10 the City
or Palo Alto, the firm or m"Niduai ~sted below certifies that (they) do not discriminate in
employment with regards 10 race, rengion, creed or national origin; that (they) are in
compilan<:e with a~ Federal, SIa'.8 and local directives and executive orders regarding
non-dlScriminatlon in employmenl; &rod that (they) agree 10 demonstrste positively and
aggressively the principle or equal opportunity in employment.
The Sidder j?roposer agrees specilically:
1.0 To establish or observe employment poncies which affirmatively promote
opportUnities for minority persons at a.~ jOb levels.
20 To communicate this poficy to an persons ccncemed, including all company
employees, outside recruiting services, espetially those ser.,;ng minority
communities, and to !he minority communities at large.
3.0 To take affirmative steps to hire minorily employees within the Ol\janization.
4_0 To be )(oowIadgeable of Ine local, slale, end federal laws end regulations
concerning affirmative action poflCies end provide opportunities tor
employees.
r~;. ____________________________________________ ___
Trt!e or Offieer Si"'"ng: _______________________ _
Signa!Ure ______________________ _
Date
Please lnclucle any ad6l1ional information avanabie reg arding equal opportunity
employment programs now In effect within your company.
(Please attach add~ional pages if necessal)')
CITY 01 PALO ALTO
REQUIRED VENDOR INFORMA TlON
MINORIlY BUSINESS ENTERPRISE, Proposer/Bidder Os_ is noI--J a MinOriIy
(Of Women) Busin~ss Enterprise, MBEjWBE. A Minority Business Enterprise is defined
as 8 "business, privately or pvbr.c!y owned, at least 51% 01 which is owned by minority
group members," lor the purpose 01 this defin~ion, minority group members 8!~ Blacks,
H'ospanlcs, Asian Americans, American IOOan or Alas""" Natives, or Wom~n.
SMALL B USI NESS,. Proposer jBidder Os ~ is noI ---> a small business concern.
(A small business concem lor the purpose of govemmen! procurement is a concern,
inc!ucfll'lg its effmates, which Is independently owned and operated, is noI dominanl in t!1e
f.eId of oparations in which t is bidding or propooing on govemment contracts, and CSII
luflher qualify under the crileria concerning number of employees, average annual
~ipts, or other criteria as prescnbed by tne SmaIl Business Administration)
I'ropo$er jBidder Contect conceming any of tna abov~ information:. ______ _
Phone: ( )
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CITY Of PALO ALTO
PROPOSER'S SIGNATlmE PAGE
The under.;.'gned hereby certifies \hat, directly or indirectly, Ihey or !heIr represen!aWes
and agents have not been coII\Jsive with other partiJ3s interested In !his Request for
Propcsals.
Proposer is a:
__ CafrfOmia Corporation, or 8
__ Corporation organized under It'.e laws of the State of _________ _
with heed offices located eI, ___________ _
and offices In CeI~omia et---.,,=-:-~:___:___=_---7""-
(Attach adderodum iI neoes~ary)
__ Sole Proprietorship, or 8
__ Partnership (1"Ist names of partners; state which partner or pamers are rr.anaging
partner(S), attadI addendum f necessary).
__ Other (Artach addendum specilying CetaJls}.
Date: Proposer:
ACSdnIss: Signature:
Address: Printed:
City, State, Zip: Tille:
Facs;""le: Office COntact: _.
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PROPOSER'S SIGNA TURE PAGE
ACKNOWlEDGEMENT OF ADDENDUM(S)
CUring the requrest lor proposal pr0C9SS there may be changes 10 the doruments or
schedules whiCh would require an addendum. To assure that an proposers recellle the
updaIe or cllang9 addendum. the following acknowfedgement and sign-<>ff Is required.
NOTE: Fa~ure Ie execute the fonowing may be considered as an \<ra""lsrlty in !he
proposal. Receipt 01 the fonowing addendum(s) issued prior to !he close
01 the proposal is acknOwiedged. and the inrormation contained therein has
been considered in the preparation 01 this proposal.
Addendum No. (None--->. (1----'. (2---->. (3---->. (4----'. (5--.J
(CI1eck appropriate space/number above)
Signatura or Proposer
Company
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PART III
REQUIREMENTS
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':ITY OF PALO ALTO
REQUEST FOR PROPOSALS
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CERTIFICATES OF PARTICIPATION ONDERHRITER
Oate of Issue: Auquat 2, 1991
Proposals Due: September 3, 1991
PURCHASING MANAGEMENT
1ST FLOOR, CIVIC CENTER
250 HAMILTON AVEIIl1E
PALO ALTO, CA 94301
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CITY OF PALO ALTO
PROPOSAL REQUIREMENTS
CERTIFICATES OF PARTICIPATION UNDERWRITER
'l'he City of Palo Alto is located approximately 35 miles
south of San Francisco in Santa Clara County, an4 has a
population of 51,000. It is a part of the San Francisco
Bay ft\lIatropolitar. area, which has a population of fivE:
million. The cit:t~ was named fer a tall red".ood tree
under which an early Spanish exploration party camped in
17ti9~ The hiqh technology ind1.:stry,. which has ]I1ade Santa
Clara County famous, has its roots in Palo Alto, partly
because of the presence of Stanford Cniversity adjacent
to the City. The City is a ~ajor e~pluyment center with
about 75,000 jO~St i~ addition to ~ein9 a unique
residential community with about 25,000 housinq unit&G
The City provides a f~ll range of municipal se~vices, in
addition to operating its own municipal electric, vater.
gas, 'Wastewater and refuse utilities.. Its schools, parks
and recreational facilities are outstanaingG The City
owns 34 parks totalling more than .,000 acres, two
community centers, a municipal swlmminq pool, Cultural
Center, Community Theatre, Children's Theatre, and Junior
MusewaG
2. ~.sCRIPTIDN OF PJ!WECT
The city of Palo Alto plans to issue. Certificates o.f
Participation to refund $5,920,000 in Certificates of
Participation issued in September 1983 to iZ!prove the
Pal~ Alto Civic center. The City a~ticipates refundinq
the remaininq $',960,0004
3. .£URRENT CEBTifICATES~--..rART!CIPATIQN
In 1983, the City of Palo Alto leased the Pale Alto Civic
Center to the Palo Alto Public Improvement Corporation.
The Palo Alto PUblic Improvement Corporation was created
tor this financinq. Th ~ corporation made structural
improve1l'ents to tbe civic Center and leased the Civic
Canter and improvaments back to the City.
The certificates of partiCipation represented interests in
rental payments to be made by th~ city. The City has.
covenahted it will take such action nec8ssary to include all
lease payments in its annual budget and to make the necessary
annual appropriations.
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The origina.l certificate. ot participation iz.sued in September
1983 totil.led $5,920,000 'With maturities from 15186 to 2005.
The $635,000 maturing trom 1986 to 1990 have been paid. The
city .atima~ed the project cost at $4,300,000. Due to cost
.evings in 1986, $160,000 of the issue ~turinq in 2005 va.s
called by the Trustee, Bank of .\.mer ica. r A copy o~ the
revised le.alle schedule froll Bank of AlDerica 15 e.nclosed.)
After $165,000 matures in October 1991, $4,960, oeo of the
issue. 'Will be outstandinq at the time of the retufI,dinq.
The certificate:s maturing on or after October 1, 15194 are
subject to redelltption on or after October 1, 1993. Redemption
prices start at 102' and are shovn on page 3 of the official
statement. (A copy of the official statement 15 enclosed.)
As of Kay 31, 1991 the Trustee, Bank o~ America, held the
reserve account which consisted of a $695,000 united States
Treasury Bill due September 26, 1991 and a $l,lJS time deposit
maturinq Sept~?er 26, 1991~ The lease payment account also
held a $55,000 United. States Trea5ury Sill due. SepteJtber 26,
1991 and a $1,196 ti.e deposit matu~lng September 26, 1991.
4~ REFUNDING WbI.YS1S
Preliminary analysis has indicated that a re.tundinq of current
certificates ot participation would be cost effective. Please
prepare a more d.etailed analysis anCS indicate the expected
cost savinqs fr~ a refundinq~
Please also indiceta any additional suggestions you have on
i..:aproving the refunding. These ideas may include: how to
invest proceeds prior to the Octobe~ 1, 1993 call; timinq or
marketing the new issue; cr only Bcceptinq bids provided there
is • certain cost savings.
5. &nITBl\GE
Due to recent tax laws, arbi traqe has become a problem in
retuncHn9~ One concept 'Would be. to issue a tir.aneinq
wjtho~t a reserve to avoid srbitraqe.
Please discuss the concept of issuing without a reserve
and whether this 'Would allow the City to avoid arbitrage.
Also provid.e any ideall you have to minimize the arbitrage
problems.
6. ADDITIONAL WOBX
The City of Palo Alto may 61&0 consider the selected firm for
additional work~ For example in Ap~il 1987, the city o~ Palo
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Alto issued $1,325,000 Assessment Bonds to acquire land
commonly kno-wn as the. IIIKeyatone Lot-~ 'I"he City is consic1erinq
buildinq II. parkinq structure on this land. It your firm i.
interested in ~;e possibility ot acting as an underwriter tor
this or other 'Work, please ir.dlcate fe-as for thi. type of
•• rvice~
7 • fBOpQs/l-L S ERVI CE RECUTS EHENTS
The city expects all firms submitting proposals to otfer
following services:
a. Provide advice on the timing, ~tructure and Ilethod of
refinancinq of the existinq iS5ue.
b. prepare the official statament and other necessary
financinq documents~ Coordinate and direct the printing
of official statements.
c.. Perform financial analysis and otfer marketing advice
regardir.g current and future financing plans.
d. Vnderwrite and market any resulting iinancinq.
e. Assist the City of Pa.lo Alto in developing the trustee or
paying agent/reqist:ar contract.
f. Assist vith directing bone! counsel in proposing
in~.ntures, leases., and contra.cts which best mRat the
needs of the city.
q. Apply for ratings from rating agencies. compute Taquired
submissions and develop supplementary ~atarials, as
needed. Manaqe the City of Palo Alto's financing sale
presentation to the ratinq agencies; if required.
b. Manage financing printing procedures, including oversight
of the printinq, execution, signing, and delivery of the
Certificates of Participation. Maintain close
communication with bond note company, trustee or payin;
agent/registrar, and the securities depository, if
applicable.
i. Assist the City of Palo Alto in arranging for investment
of proceeds in compliance with California lav regardinq
investment of public funds, the City"s investment
policies., 4nd federal arbitrage regulations.
j. Arrange for contract with a ce~tified public accountant
or other professiona.l for a.rbitrage rebate calculation if
it i& determined by the City that an outside arbitrage
~ebate calculator is ~pp~~priate.
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• );. Kake presen'C.&tion to the Cit)' Council, Council
Committees, Bond Counsel, and/or staff as needed.
1. "",slot the City of PAlo Alto in the neqoUaUon of
insurance in-lieu of a reserve fund, if required.
111. Provide other services normally pro",ided to clients lrihich
relate to bond Gales.
n. Provide additional york as described earlier.
o. S6.1ected firm must be 'Willinq to provide insurance. as
shown on Attachment A.
s. fRQEOSAL SUBMITTAL INfORMATION
The City ex¥ect. all firms submitting propos.l.
understand the current luI's ot their field ~
should include the following:
to thoroughly
The proposal
4. Given 't.he information in this RFP, advice on how your
firm could best assist the City.
b.. A d.isc:us.sion of the experienc!! and. depth of your firm as
it. relates to this project along with similar infonaation
rlilgardinq the individua15 who 'Would ~ Assigned on I!I day
tu-day basis to this accoun~, both acco~t .anl!lger and
backup pers~nnel.
c. Sp£citic experience yith sal~s of Certificates of
participation~ refund!nq Certiticates ot Particip&tion
issues, and other refunding experien~e4
d. Re!erenca£l Dn similar'" projects in 'Which your firm has
participated a.; underwriter with an indication of the
success aehieva~ in ~rranging financing program&.
e.. A list of the. service$. which you lrio\,!ld propose to provide
as an underwriter. This sho~ld include the items under
the proposec service requircments4
f. A stand~rd contract torm for services.
q4 It. stat8lll.ent or fees that woula be charqed for the
services listed in this request for propo$al along with
any factors which would modify those fees if qreater or
leS&er service.s ~ere required. Tha City intends to aell
tl1e new certifieates of Participation on a negotiated
basis.
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h. Pleaae indicate it your firm will charge separately tor
any travel, lodginq, or other incidental expenses or if
these will be covered in the overall price.
i. Infor1llation on the location of offices and. persor.nel that
wo~ld be as&ign~~ to this cont~act and the avail~bility
of those resources.
j. Prepare a detailed refunding analysis Which would
indicate the current expected savings from a refunding.
le. provide any innovative ideas on hoW' to improve the
refunding.
If your firm is interested in providing this service, please submit
a proposal not later than September J, 1991 3:00 p.m. Proposals
and four copies must be submitted to the Purchasing Oivision
located on the :firat floor of the civic Center at 250 Hamilton
Avenue, Palo Alto, california 94301. Your proposal should be
sealed in a packaqe or envelope showinq your firm's n6lDe and.
address ·Underwriter" and the proposal due date. Late proposals
will be rejected.
9. SELECTION CRITERIA
The selection of the underwriter will be subject to review and
approval by the City Council lind it will be based on the
following criteria.
a. Indication of firm's innovative financing experiencE'S
with refinancinqs, includinq thQ arbitrag~ issue.
b. Firm's experience with c~rtificate of Participation
financing.
c. Firm's experience in other tinancings.
d. Organizatior" size, structure, and financial stability of
firm.
e. Aqreement to points and compliance with L~e information
request ad 'Wi thin the UP.
f. OUalifications and availability ¢f staff ~o be assigned,
notinq persons .. -:. th primary and secondary responsibility.
q. Quality of work previously performed by the firm for the
City, if epplicable.
h. The proposed fee relative to the services to b.e provided.
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1.0. UNTATtyE SCHEDULE
Request for proposal i,]sue<.1
Pr0POS.18 clue.
Evaluatiun of proposals and
oral interviews, if appropriate.
Selection of firm to recommend
to council.
Council approval of selecticn4
11. ctTY'S RIGHTS
Auqu:=-t . ,
september
september
september
Septe-mber-
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3, 1991
J -11, 1991
11, 1991
23, 1991
The City of Palo Alto r~serves the right to reject any and all
proposalS and to accept the proposal ~hich( in its opinion,
best serves the public interest.
12. ApMJNISTRATlVE CONTACT (PRQJECT HANAGEBi
If you have any questions reqardlng this request or need more
inforaation, please contact Gordon Ford at 415/329-2415.
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