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HomeMy WebLinkAboutItem 2f: Agreements for Issuance of 2011 Series General Obligation Bonds for Santa Anita Grade Separation Gold Line Project . °4poRAT89 STAFF REPORT Administrative Services Department DATE: March 15, 2011 TO: Mayor and City Council FROM: Donald Penman, City Manager Hue Quach, Administrative Services Director SUBJECT: Authorize the City Manager to execute Professional Service Agreements with respective companies within the Financing Team for the issuance of 2011 Series General Obligation Bonds for the Santa Anita Grade Separation Gold Line Project Recommendation: Approve SUMMARY In April 2006, the voters approved a measure to authorize the sale of up to $8,000,000 in General Obligation bonds of the City to finance a grade separation for Santa Anita Avenue at the intersection of Santa Anita Avenue and the Metropolitan Transportation Authority Gold Line extension right -of -way. Recently, a letter of agreement was signed between the Metro Gold Line Foothill Extension Construction Authority (Authority) and the City of Arcadia. Under the terms of the agreement, the City is obligated to deliver bond proceeds to the Authority thirty (30) days after it executes the Design -Build Contract, which staff believes to be or near June 2, 2011. Staff is requesting Council's approval to authorize the City Manager to execute professional service agreements with respective companies that compose of the Financing Team. DISCUSSION At the February 15 Study Session, the City Council provided staff direction to proceed with the course of a General Obligation bond issuance for the Santa Anita Avenue Grade Separation. The first step towards this issuance is developing a financing team. Staff is presenting this report to Council with the recommendation of approval to execute professional service agreements with each respective member listed in Attachment A for the creation of a Financing Team. Staff and the financing team have successfully worked together in past bond issuance and more recently on a Redevelopment Agency Bond refinancing in 2010 that allowed the Agency to pay its housing obligation and have adequate funding available for its priority redevelopment activities. Their fees come from the bond issue itself as part of the cost of issuance, and are factored into the total proceeds that the City will receive. The financing team includes the City's financial advisors, Fieldman Rolapp and Associates, with Jim Fabian and Darryl Street who have been before the City Council many times; Bond Counsel Kurt Yeager of Stradling Yocca Carlson & Rauth who has represented the City and Agency for several years and was before the Agency Board in May 2010. Best, Best & Krieger which is acting as the City Counsel on the bond issue is also acting as the Disclosure Counsel, which makes them responsible for the Preliminary and Final Official Statements that discloses all important facts about the City and bond issue itself. Additionally, though not acting as advisor to the City but providing services relating to the bond issuance are Bank of New York Mellon and Standard and Poor's. Bank of New York Mellon will act as the Trust Agent facilitating debt service payments and other fiduciary duties. Standard and Poor's will act as the rating agency that expresses the agency's opinion about the ability and willingness of the city to meet its financial obligations. The total cost for these and other services for the bond issue is $145,000, (including a contingency amount of $8,500) which is 1.81% of an $8 million bond issue. FISCAL IMPACT A projected cost totaling $145,000 is associated with the bond issuance. These fees come from the bond issue itself as part of the cost of issuance and are factored into the total proceeds that the City will receive. RECOMMENDATION That the City Council authorizes the City Manager to execute Professional Service Agreements with each respective company listed in Attachment A to form the Financing Team for the issuance of 2011 Series General Obligation Bonds for the Santa Anita Grade Separation Gold Line Project Approved �Q'�e.�•�.,s,� Donald Penman City Manager Attachments: A — General Obligation Bonds Financing Team Staff Report GO Bonds Finance Team March 15, 2011 Page 2of2 ATTACHMENT A City of Arcadia General Obligation Bonds (Election of 2006) Series 2011 Projected Cost of Issuance Services Interested Party Payable at Closing Bond Counsel Stradling Yocca Carlson & Rauth $ 37,500.00 Disclosure Counsel Best Best & Krieger LLP 20,000.00 Financial Advisor Field man, Rolapp & Associates 58,500.00 Rating Agency (estimate) Standard & Poor's 12,000.00 Paying Agent Bank of New York Mellon 3,500.00 Printer (estimate) TBD 5,000.00 Contingency - 8,500.00 Total Cost of Issuance $ 145,000.00