pages: CityCouncil/2010-06-15.pdf, 12
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CityCouncil | 2010-06-15 | 12 | Respect Thereto, and Making Findings with Respect to and Approving the Issuance of Bonds by the Alameda Public Financing Authority.' Adopted. The Interim City Manager gave a brief presentation and introduced Bill Reynolds, Sequoia Financial Group; Mark Holmstedt, Westhoff, Cone & Holmstedt (WCH); and Paul Thimmig, Quint & Thimmig, LLP, to answer Council questions. Mayor Johnson inquired whether the project would not go forward if primary property owners do not pay property taxes. Mr. Reynolds responded that he would still recommend going forward; stated financing needs to be recognized on the tax rolls by August. Councilmember Tam inquired whether there would be two financial advisors (Sequoia Financial Group and WCH). Mr. Reynolds responded in the affirmative; stated there is no time for an RFP process; the best way is a competitive bid sale; his fee would be approximately 30% of the Sources and Uses of Funds; the rest would be for specialized work, which WCH has already performed on the project with the assumption that WCH would be the underwriter; the City usually uses a negotiated sale method; an underwriter is compensated through an underwriter's discount; in this situation, a normal underwriter's discount would be approximately $12.50 per $1,000 of bonds; one fee component is a management fee in which the underwriter helps the financial advisor structure the deal; the rest is used to sell the bonds; a portion of the fee listed under the Financial Advisor column is what the management fee would be for an underwriter to put the deal together; that he estimates by bidding the project on a competitive basis, the bids would only represent the take down portion which would be less than $5 or $6 per $1,000 of bonds; as proposed, the City would end up saving money on the underwriter's discount overall. Councilmember Tam inquired whether the 70%/30% split between WCH and Sequoia Financial Group would occur only if bids are accepted. Mr. Reynolds responded in the affirmative; stated all fees are contingent. Councilmember Tam inquired whether having two financial advisors is typical, to which Mr. Reynolds responded having two financial advisors happens fairly often. Councilmember Tam inquired how the WCH partnership was chosen. Mr. Reynolds responded Finance Directors generally pick someone who they have worked with in the past; in the past, he has put out an RFP for underwriters; the Interim City Manager has a long history of working with WCH. Councilmember Gilmore inquired whether bids would be rejected if the City does not Regular Meeting Alameda City Council June 15, 2010 | CityCouncil/2010-06-15.pdf |