AgdaPkt 2010-08-09 - Laserfiche WebLink

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O.LI1 Page 4 WEMF has reviewed the proposals submitted from bond counsel, the special tax consultant, the appraiser, disclosure counsel, and the underwriter and finds their proposed fees competitive with the market rates for these services. The Finance Director has reviewed WEMF's proposal and finds its proposed fees in line with fees the City has paid the firm for past bond issues and consistent with the level of complexity of this bond sale. The submitted proposals are on file in the City Clerk's office. I AL TERNA TIVES Mello-Roos District The City is under no obligation to create the District or sell bonds. The Council may reject the developer's petition to establish a CFD and require the developer to obtain its own financing for all required public facilities. Financing T earn The Council may reject staff's recommendation to engage the firms presented in this report to provide the professional services needed to successfully sell bonds for this project. Staff will need to obtain proposals from other firms since staff does not have the expertise to perform these functions. Obtaining proposals from other firms will delay the issuance of bonds by up to two months without any guarantee that staff will be able to identify firms that can provide comparable services at less cost. FISCAL IMPACT If bonds are not sold, the deposit paid by the developer will pay for all non-contingent costs associated with creating the CFD. If bonds are sold, the City will reimburse the developer's deposit from the proceeds of the bonds. The cost for each member of the financing team is as follows: Non-Continoent Fees Seevers, Jordan, & Ziegenmeyer, appraiser David Taussig, & Associates, special tax consultant Continaent Fees Nossaman, Guthner, Knox, & Elliot, bond counsel1 Jones Hall, disclosure counsel Piper Jaffray, underwrite~ William Euphrat Municipal Finance, Inc., financial advisor Total Costs $ 14,500 $ 43,500 $ 65,000 $ 35,000 $ 97,500 $ 45,000 $300,500 The total costs for each of these services will be provided, as is the customary practice in municipal bond sales, from the proceeds of the bond sale. The financial advisor, bond counseP, disclosure counsel, and the underwriter will only be paid if the City successfully sells these bonds. The spe.cial tax consultant and appraiser will be paid from the deposit made by the developer regardless of whether bonds are successfully sold. 1 That portion of bond counsel' fee related to creation of the District will be non-contingent. 2 The underwriter's fee is based on an estimated initial bond size of $6.5 million and a proposed underwriting fee of 1.50,10 of the amount of bonds sold. The sales commission portion of the underwriting fee will be negotiated when the bonds are sold.