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Home My WebLink AboutStaff Report 04 03/19/2001 CITY OF PETALUMA,,CALIFOR'IA 4 AGENDA BI'LL Agenda Title: Meeting Date: Resolutions Authorizing,the City,Manager to Sign-.Amendments March 19,.2001 • with 'Ceiling, Northcross & Nobriga for Financial Advisory Services; Orrick:Herrington;and Sutcliffe,.LLP and Johns,Hall A. Professional`LawCorporation for Legal:Services Department='. Director:. Contact,Person Phone Number: Finance William J.Thomas William J. Thomas . 778-4352 Cost of Proposa1: $171,000 • Account Number: N/A. Amount.Budgeted: $171,000 Name of Fund: To' be paid for out of Bond proceeds Attachments to Agenda 1. Resolution authorizing them Resolutions: ,Picket-Item: "e?City Managter twsign;amendment to existing agreement with Kelling, Northcross and Nobriga.to provide•.financial advisory;services for the refunding of various bond issues. 2. Resolution authorizing the+City: Manager-to sign amendment:to existing agreement with Orrick Herrington and Sutcliffe,-LLP to provide bond counsel services for the refunding of Petaluma Community District Tax,Allocation Bonds (TABs) 1992A 3. Resolution authorizing the City'Manager-to sign amendment to existing agreement with Jones, Hall to provide bond counsel services for the refunding of Assessment District#23 (Redwood Business Park) Bonds an d City `of Petaluma 1990 Zone IV Water System Improvement Certificate of Improverent (COPs): Summary Statement The City of Petaluma has three,bond issues that have been analyzed and are subject to annual debt-service savingsLif they were to be refinaneed. These issues are as follows: a. Petaluma Community District Tax Allocation Bonds (TABs)I 1992A b. Assessment District#23(Redwood Business Park)Bonds c. City of Petaluma 1990 Zone IV Water System Improvement Certificates of Participation(COPs) The first ;step to refinance these issues is:te amend the existing contracts. that the City has with the Financial Advisor and the law,firms that' as bond counsels. The City currently maintains a contract with Kelling,;Northcross and Nobriga to provide financial.advisory services. Our past experience with this firm has shown to be beneficial and the management would like to retain their services for the proposed refinancing.project The City also has existing contracts with two law-firms to provide bond. counsel,services for,financing,activities. Orrick,`Herrington and Sutcliffe has been involved in the last refinancing of PCD bond issue'and it is recommended that;they be retained for-the PCD 1992A TABS: Jones, Hall has been involved with financing issues (most recently with the Washington-McDowell Assessment District) and it is recommended that they be retained for the.refinancing of the Zone IV COPs and Assessment`District23. • • • Council Priority: THIS AGENDA ITEM'ISCONSIDERED`To BE PART OF, OR NECESSARY To, ONE OR MORE OF THE 1999-2000 PmoRthEs:ESIOLiStiErt BY THE CITY COUNCIL ON JANUARY 30, 1999 AND MARCH 18,2000 Pnotity(s) SRe?enue Generation a •. Recommended:City Couticil Action%Suiges"ted Mohon.l Adopt,the Resolution. • b Reviewed by Fiiiance Director Rev►ewed-tiy.CitfAT torney A i uitt•a b. City<Manager:: Y � 3 i -$�` +w v..� e'";"ySrCf'� i'r°hk � ' u j % ''tar-Q Date 7 ;/ r.'-' ® Date; Today's?Date. " Revision#'an DateRevlsedsf.' File Code., March 3,2001 # - siagenSagend • .. • • • • • • • • CITY OF PETALUMA, CALIFORNIA • MARCH-19,-2001 AGENDA REPORT FOR •' AUTHORIZATION,FOR'THE=,CITY MANAGER TO SIGN AMENDMENTS TO EXISTING CONTRACTS'FAR FINANCIAL,ADVISOR AND BOND CO UNSEL SERVICES' • 1. , EXECUTIVE iSUMMARY'i Based on analysis from the City's financial advisors, a net present value savings would-resultif certain existing bond issues were refinanced at this time Those-issues include: ,City of Petaluma Zone IV Water-:System Ce_rtificates.of Participation (COPs) Petaluma Community.District Tax.Allocation Bonds (TABs) 1992A Assessment District:#23-'Redwood Business•Park To facilitate this, it is necessary to amend our existing agreements with our financial advisor (Kelling, Northcross and Nobriga) and our bond counsels (Orrick, Herrington & Sutcliffe, LLP and,Jones Hall, A Professional Law Corporation). Resolutions`are:proposed to authorize the City Manager to sign amendments to•those existing agreements. 2. ;BACKGROUND:, As-part ofour ongoing relationsship.with,our•financial advisors, Kelling, Norcross and Nobriga provides periodic/analysis of,The City's,ezisting bond issues to determine if opportunities exist fOr refinancing. Based-cm-.current market conditions, they have determined that three issues would,'if refinanced,-result in savings to the City. An analysis of those bond issues follows: . AD23 Zone IV Water PCDC (Redwood System COPs Refunding Business Park) Par Amount $. 4;495,000 $ 4,055,000 $ 3,194,000 Date of Issuance 1990 1992 1995 Final Maturity 1-.1/1/13 5/1/14 9%2/20 -Present Value Savings $ 401,203 $ 297,315 $ 159,072 % of Refunded Bonds. 8:92% 7.33% . 4.84%: Avg::Annuai Savings $ 47,517 $ 27,212 $ 2Z719 ZONEIV WATER SYSTEM IMPROVEMENTS:COPS ' The City should achieve,net,present value savings of$400,000 after,'accounting for all costs of issuance. These savings:are approximately 8.9% of the-par amount of the refunded bonds. • PCD TAX ALLOCATION BONDS 1992A The refunding-of the Series 1992A TABs was considered at the time`of last year's sale of $18 million in.bonds'to provide new money to the PCD Project Area,`but the savings at that time were;mmimal. Since that time, municipal interest rates have declined approximately 90 basis points, making the refunding'economic at this time'. Based on current market conditions, the City will save approximately 7% or$290,000 in net present value. ASSESSMENT DISTRICT#23 Refunding of this`District;yields savings of 5%:or about $160,000,:on.a net,p_resent • value;basis. In order to proceed.with°these:refinancings; the City needs to,amend out existing contracts with the financial,advisors;(Kelling Northcross;and Nobriga) and:bond counsels (OcricklHemngton& Sutcliffe for the PCD issue,and•Jones Hall for the other:two issues). Resolution s are provided that-would°authorize the City Manager to sign these'agreerrtents. Based on current work,schedules, the Water refinancing is expected;toicloseby`June [flirt,* P,CD. issue by May 9`s and theAA"ssessment District:by June20t. 3. ALTERNATIVES: :Do not approve.amen_dments;,and.not'refinance these issues at;the present time., 4. FINANCIAL IMPACTS: There will. savings for each of the issues, as'follows: Zone IV Water COPS $400,000 PCD TABS -$297;000 AD 23 -,$•159;000 • These savings are natof all costsof issuance. 5. CONCLUSION: Refundingthe,three bond issues will_'result in savings•to the City as • each,provides.a present value'savings over theiexisting issues. This is the result of favorable cohditiOnsinAht municipal bond market that will provide Iower interest rates over_the life of the bonds. 6. OUTCOMES'OR'PERFORMANCE.MEASUREMENTS'THAT WILL:IDENTIFY • SUCCESS OR,COMPL"ETION: Successful closing of the'bond issues. • • 7. RECOMMENDATION: Adopt!the•Resolutions.authorizing the City Manger to sign amendments,to existing•eontraets. s:/agenda/agendaap • • • Resolution No. • N.C.S. • of the City°of Petaluma, California AUTHORIZING THE CITY MANAGER TO.SIGN ANA: NDMENT WITH JONES HALL, A PROFESSIONAL LAW CORPORATION TO PROVIDE • BOND COUNSEL SERVICES WHEREAS, the,.City,wishes to engage Jones-Hall,AProfessiona l Law Corporaton to act • as bond counsel for refnndirig`of certain.bonds :and - . • WHEREAS,Tones Hall,-A Professional-Law`Corporation have previously provided this ervice ter the City NOW, THEREFORE BE`IT RESOLVED,that the,City Managenis hereby authorized to sign an amendment toahe existing=agreement with Jones:Hall A Professional Law-Corporation to act as the City's bond,counselifor the,refunding of the'Zone IV Water System;Certificates of Participation and the Assessment=Otstrict-#23`—Redwood Business:Park Bonds. Under the:power and authority conferred upon this Counciliby thelCharter of said City. REFERENCE: I hereby certify;the'foregoingResolution was introduced and adopted by the Council-of the City of Petalumaat a Regular meeting on 2000,. Approved as to by theLfollowing:vote: ' form: • City Attorney AYES: NOES: ABSENT: • ATTEST: City Clerk Mayor • Resolution No'. NCS • • Resolution No. N.C.S. of the 'City of Petaluma; California • AUTHORIZING THE CLTY MANAGER,TO SIGN AN.AMENDMENTWITH ORRICK,HERRTNGTON.& SUTCLIFFE TO PPROVIDE BOND COUNSEL SERVICES • WHEREAS; the City wishes to engage Omck, Herrington and Sutcliffe to'.yactasbond counsel for the refunding of certain bond's, and, WHEREAS; Orrick, Hemngton and Sutcliffe haveipreviously provided•,this service;to the City; NOW, THEREFORE IT RESOLVED, that theiCity.Manager is hereby authorized to signamamendment to the existing agreement'with.Omck, Hemngton and Sutcliffe to act as the `City's bond counsellor the;refunding of the Petaluma Community District Ta5c Allocation Bonds • 1992A. • .Under thepowerand authorityponferre&upon this Cop`ncil;by theCharter of said:City. :1 REFERENCE: I hereby:"certify the foregoing Resolution was introduced and±adopted by the Council:of the City of Petaluma at Regular meeting on ;2000,. Approved as'.to by.the"followingvote: • City.+Attorney. AYES: • ' NOES: • ABSENT: ATTEST: City Clerk ' ,Mayor •ResolutionINo: NCS • • • Resolution of'the City of Petaluma, California, AUTHORIZING THE'-CITY MANAGER TO SIGN AN AMENDMENT WITH KELLING, NORTHCROSS AND NOBRIGA TO•PROVIDE`FINANCIAL ADVISOR SERVICES WHEREAS, the City wishes to'engage Kelling Northcross and Nobriga.as financial advisors:for the.refunding of.certain bonds,;and • WHEREAS,Kelling,'Northcrossand Nobriga have-previously provided this service to the City, NOW, THEREFORE aE IT:RESOIVED,.;that,the:City Managef-isi hereby authorized to sign an amendment to the existing;agreement witkKelling,Northcross and,Nobriga to act as the City's financial advisors for the,refunding,of the Zone IV Water Improvement Certificates of Participation, the Petaluma;Coiiimunity•District Tax Allocation Bonds 1992A, and the Assessment District 23' Redwood,Business Park bonds. Under the power,and;authority conferred upodthis Council by:the Charter of said City. REFERENCE I hereby-certify the foregoing,Resolution.was introduced and adopted by the IP Council of the City of Petaluma at a Regular meeting,on 2000, Approved as to by the'following vote: form: City Attorney AYES: NOES: ABSENT: ATTEST: City Clerk Mayor i - Resolution No. - - NCS • • • 4111 •