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Home My WebLink About8.1 Civic Center COP Issue Refinancing CITY OF DUBLIN 340-/70 w AGENDA STATEMENT CITY COUNCIL MEETING DATE: April 27, 1987 SUBJECT Civic Center Certificate of Participation Issue Refinancing. EXHIBITS ATTACHED Draft Request for Proposal RECOMMENDATION Approve Request for Proposal for Bond Underwriters and authorize City Manager to solicit responses from Oqualified Bond Underwriters FINANCIAL STATEMENT: See Below DESCRIPTION In December 1985, the City of Dublin issued $11, 968, 000 in Certificates of Participation which would be repaid over a term of 25 years at an average interest rate of 9 .05%. Since that time, interest rates on Certificates of Participation Issues have dropped substantially. The drop in interest rates has made it feasible to refinance the City' s existing Certificate of Participation Issue and realize significant savings over-and-above the cost of issuance associated with the refinancing. A preliminary analysis by one underwriter estimates the savings to be between $645, 000-$942, 000 in 1987 dollars, given the current market conditions, and dependent upon the City ' s debt rating. Staff has explored the legal feasibility of refinancing Dublin ' s 1985 Certificate of Participation Issue with the law firm of Jones, Hall, Hill and White. A representative from this firm has reviewed the legal documents associated with the 1985 Issue and has indicated that refinancing could be accomplished. A Request for Proposal (see attached) has been prepared by Staff for the purpose of soliciting responses from several underwriting firms . At this time, it is felt that the Request for Proposal method of selecting an underwriter will assure that the City receives the best services at a competitive cost. In refinancing the Certificate of Participation Issue, it is important that the City is assured of receiving enough savings to make the refinancing worth the time and effort. The City can structure its agreements with bot:; the underwriter and bond counsel in order that the City receives at least a specific dollar savings before the issue goes to market. Neither the underwriter nor bond counsel could receive their respective fees until the new certificates are issued. Should market conditions change, the only cost which the City would incur would be associated with obtaining a debt rating and possibly some printing costs . In November 1986, the Schematic Design was presented to the City Council . At that time, the Council was informed that due to the increased size of tha building, the preliminary construction costs exceeded the proceeds available as part of the 1985 Certificate of Participation Issue. The Council indicated that rather than cutting back the size of the building, Staff should pursue additional funding options . The savings realized by refinancing the City ' s 1985 Certificate of participation Issue is one means of offsetting some of the increased costs of the Civic Center. The City could also increase the size of the issue to cover the remaining cost of the Civic Center. ---------------------------------------------------------------------------- COPIES TO: ITEM NO. • AGENDA STATEMENT: Civic Center Certificate of Participation Issue Refinancing Page 2 Staff would not recommend sizing the total dollar amount of the issue until more definitive cost information is developed by the Civic Center Design Team. The City will not need to determine the size of the issue until the issue is ready to go to market. RECOMMENDATION: It is Staff' s recommendation that the City Council approve the Request for Proposal and authorize Staff to solicit underwriting firms to respond. Staff anticipates that it will be prepared to recommend an underwriter and bond counsel at the City Council meeting of May 26, 1987 . 4,r.'r^'RQ'i"s1:�5r�F� .. �f, {�"ti, y a• '•_ '• t't' �jv—�S'r ?jwa 1 �t?'�{'.a`�'��Fi�' rY �"',��'".'��'x. ;'� �'^&�°. `'S^T4='LGs^7'�''y.' ..fs .: S... - _ _ J_n ,..., � f.1... �+ :.:�E��,��e�. S�,R.44n�ti�.r_ C,`_.o :._:< ....., v .:•1... ,':.:-. .:'v k srk`s::?'+H..'dr�:x' i"'_.�_+yy�" Y.'[�t'�=;.0"..._r-,. .t..N.. _ REQUEST FOR PROPOSALS FOR REFINANCING CIT`r OF DUBLIN CIVIC CENTER CERTIFICATES OF PARTICIPATION ISSUE The City of Dublin issued $11, 968, 000 in Certificates of Participation in December 1985. These Certificates of Participation were issued for the purpose of acquiring land 'and constructing the City' s Civic Center. The City of Dublin is interested .in refinancing this Certificate of Participation Issue and possibly increasing the size of the Issue. The City is interested in obtaining the services of a qualified Financial Underwriter to assist the City with its refinancing. In order to facilitate the selection process, the City has prepared a Request for Proposal and intends to invite a selected number of underwriting firms to respond to the Proposal . If your firm is interested in responding, please include the following information in your proposal and address each question in the order in which it appears. 1 . Submit a profile of your firm, its professionals and the names and background of the members of your firm who will be responsible for structuring, marketing and support. 2. Identify the services that your firm will provide throughout the refinancing process . Include a financing, rating, marketing and timing plan . Also, identify the levels/steps that coordination with City Staff is planned. 3 . What is your firm' s experience with Certificates of Participation and the refunding or municipal debt issue. 4 . To what "not to exceed discount rate" are you willing to commit if you are selected? Show discount rates for an insured and non-insured financing and break down the rates into takedown, expenses and management components . 5. Indicate whether your firm would . be willing to provide underwriting services to the City if the City required that a minimum set dollar savings to the • City be guaranteed before the Certificates of Participation are issued. 6 . How will you demonstrate that market rates at the time of sale are competitive within the municipal market? 7 . List no more than ten references, but submit a full list of all financing/refinancing transactions your firm has been involved in, in the last 12 months . REQUEST FOR PROPOSALS Page 2 A copy of the City' s Official Statement from the 1985 $11, 968, 000 Certificate of participation Issue has been enclosed to assist you in responding to the City' s Request for Proposal . All proposals should be submitted to the Dublin City Offices, P.. 0. Box 2340, 6500 Dublin Boulevard, Suite 205, Dublin, California 94563, Attention : City Manager. No Proposals will be accepted later than 5: 00 p.m. , Thursday, May 14, 1987 . Any questions related to the Proposal should be addressed to the following individuals : Phillip Molina Administrative Services/Finance Director (415) 829-6226 or Richard C. Ambrose City Manager (415) 829-4600