8E Consent 2011 0919 - Laserfiche WebLink

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Designating POB Financial Team Underwriter September 19, 2011 The underwriter is the firm that purchases the bonds from the bond issuer and resells them to investors. The underwriter assists the City and the Financial Advisor in structuring the bond issue, presenting the transaction to credit analysts, and reviewing the bond and disclosure documents. The underwriter provides expertise and advice related to bond market conditions, develops a marketing strategy to market the bonds to investors, and ultimately sets the interest rates on the bonds. The Finance Department distributed a request for proposals for underwriter services on June 30, 2011. A total of four qualified firms responded to the City's RFP. Questions in the RFP and the criteria used in the selection process included: • Experience issuing pension obligation bonds and other taxable financing • Relevant experience of staff members to be assigned to the project • References from POB issuers • Describe structure and alternatives for the pension obligation bonds your firm would recommend • Discuss the marketing strategy for placing the pension obligation bonds • Estimate total underwriting costs associated with the pension obligation bonds. Following the proposal review and reference checks, staff, with the assistance of the Financial Advisor, selected the firm Wedbush Securities. Their pension obligation bond experience, marketing strategies, and the costs quoted by Wedbush reflected the proposal that met the best interests of the City. Wedbush's proposed fee for their services is estimated at $153,100 (the four firms' quoted fees ranged from $145,900 to $255,700). The fees for underwriter services are included in the cost of issuance and paid from the proceeds of the pension obligation bonds. Bond Counsel Bond and Disclosure Counsel are required for the preparation of necessary legal documents for the issuance of the pension obligation bonds. Bond Counsel provides the legal opinion delivered with the bonds confirming the validity and binding effect of the bonds. Services include preparing documents necessary for the authorization, issuance, sale, and delivery of the bonds (including the pension obligation validation process), identifying and causing the disclosure of all material legal proceedings, issuing a tax opinion, providing an unqualified legal opinion related to the transaction, and providing other specialized legal advice. Staff has selected Jones Hall as Bond Counsel for the refunding of the Ca1PERS side fund obligation. The firm has served the City and Redevelopment Agency as Bond Counsel for the past thirty -five years. No competitive selection or bid process is required for professional legal services in accordance with the Municipal Code and City policy.