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HomeMy WebLinkAbout2018-09-27 FA Regular Meeting Agenda POSTED AGENDA PALM DESERT FINANCING AUTHORITY MEETING THURSDAY, SEPTEMBER 27, 2018 CIVIC CENTER COUNCIL CHAMBER 73510 FRED WARING DRIVE, PALM DESERT, CA 92260 I. CALL TO ORDER - 3:00 P.M. II. ROLL CALL Reports and documents relating to each of the following items listed on the agenda, including those received following posting/distribution, are on file in the Office of the City Clerk and are available for public inspection during normal business hours, Monday - Friday, 8:00 a.m. - 5:00 p.m., 73510 Fred Waring Drive, Palm Desert, CA 92260, (760) 346-0611. III. CONSENT CALENDAR ALL MATTERS LISTED ON THE CONSENT CALENDAR ARE CONSIDERED TO BE ROUTINE AND WILL BE ENACTED BY ONE ROLL CALL VOTE. THERE WILL BE NO SEPARATE DISCUSSION OF THESE ITEMS UNLESS MEMBERS OF THE FINANCING AUTHORITY OR AUDIENCE REQUEST SPECIFIC ITEMS BE REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE DISCUSSION AND ACTION UNDER SECTION IV, CONSENT ITEMS HELD OVER, OF THE AGENDA. A. MINUTES of the Financing Authority Meeting of June 8, 2017. Rec: Approve as presented. Action: IV. CONSENT ITEMS HELD OVER V. RESOLUTIONS None POSTED AGENDA PALM DESERT FINANCING AUTHORITY MEETING SEPTEMBER 27, 2018 VI. NEW BUSINESS A. REQUEST FOR APPROVAL OF RECOMMENDED FIRMS TO BE PLACED ON A PRE-APPROVED LIST OF UNDERWRITERS/PLACING AGENTS FOR POTENTIAL FUTURE DEBT ISSUANCE OR REFUNDINGS (JOINT CONSIDERATION WITH THE PALM DESERT CITY COUNCIL, SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY, AND PALM DESERT HOUSING AUTHORITY). Rec: By Minute Motion, approve the recommended firms to be included in a pre-approved list to provide underwriting and placement agent services for future debt issuance or refundings. Action: VII. CONTINUED BUSINESS None VIII. OLD BUSINESS None IX. PUBLIC HEARINGS None X. REPORTS, REMARKS, AND AUTHORITY BOARD ITEMS REQUIRING ACTION A. CHIEF ADMINISTRATIVE OFFICER B. AUTHORITY COUNSEL C. PRESIDENT AND MEMBERS OF THE AUTHORITY XI. ADJOURNMENT I hereby certify under penalty of perjury under the laws of the State of California, that the foregoing agenda for the Palm Desert Financing Authority was posted on the City Hall bulletin board not less than 72 hours prior to the meeting. Dated this 20th day of September, 2018. Note: This agenda is subject to amendment up to 72 hours in advance of the meeting. Rac elle l. Klassen, City 'lerk 2 D raft LIM Y MI TE �� � PRE INAR NU S PALM DESERT FINANCING AUTHORITY MEETING THURSDAY, JUNE 8, 2017 CIViC CENTER COUNCIL CHAMBER 73510 FRED WARING DRIVE, PALM DESERT, CA 92260 I. CALL TO ORDER - 3:00 P.M. President Harnik convened the meeting at 3:01 p.m. II. ROLL CALL Present: Vice President Sabby Jonathan Commissioner Kathleen Kelly Commissioner Gina Nestande Commissioner Susan Marie Weber President Jan C. Harnik Also Present: Lauri Aylaian, City Manager Robert W. Hargreaves, City Attorney Rachelle D. Klassen, City Clerk Lori Carney, Director of Administrative Services Russell Grance, Director of Building & Safety Ryan Stendell, Director of Community Development Martin Alvarez, Director of Economic Development Janet M. Moore, Director of Finance/City Treasurer Mark Greenwood, Director of Public Works Stephen Y. Aryan, Risk Manager Eddy Moore, Division Chief, Palm Desert Fire/Riverside Co. Fire Dept./Cal Fire Lt. Coby Webb, Asst. Chief, Palm Desert Police/Riverside Co. Sheriff's Dept. Grace L. Rocha, Deputy City Clerk I11. CONSENT CALENDAR A. MINUTES of the Financing Authority Meeting of October 13, 2016. Rec: Approve as presented. Upon a motion by Kelly, second by Nestande, and 5-0 vote of the Authority Board (AYES: Jonathan, Kelly, Nestande, Weber, and Harnik; NOES: None), the Consent Calendar was approved as presented. PRELIMINARY MINUTES C� raft PALM DESERT FINANCING AUTHORITY MEETING JUNE 8, 2017 IV. CONSENT ITEMS HELD OVER None V. RESOLUTIONS None VI. NEW BUSINESS A. REQUEST FOR ADOPTION OF RESOLUTIONS, APPROVING THE PALM DESERT "STATEMENT OF INVESTMENT POLICY," AS AMENDED (JOINT CONSIDERATION WITH THE PALM DESERT CITY COUNCIL, SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY, AND PALM DESERT HOUSING AUTHORITY). Deputy City Treasurer Thomas J. Metz stated that pursuant to State law the City Treasurers Office is requesting approval of the City's state of Investment Policy. Recently, staff received two additional recommendations for textual changes to the policy by Councilmember Kelly, which staff concurs with, and are as follows: 1) On page 3, under 4.0.2, the language is being added to the last sentence in the second paragraph to read, "Its purpose shall be to maximize profit within the parameters of Risk Mana4ement'; 2) on page 7, under 8.010, the last sentence of the 5�h paragraph to read, "The City Treasurer shall provide all authorized brokers with a copy of the City's investment policy and anv amendments as thev occur." Lastly, Councilmember Kelly had a question to the language that was added to page 1, under 1.0 Policy, the second blue-lined paragraph, which reads as follows: "At its discretion pursuant to minute order, the Pa/m Desert City Council may direct that funds be made availab/e to facilitate other lawful investment actions that the city council takes. In that case, either the City Manager or the Director of Finance & City Treasurer is authorized to invest the funds accordingly." He said Councilmember Kelly wanted to know the reasoning behind that insertion, which he felt Mayor Pro Tem Jonathan might be in the best position to explain it. Mayor Pro TemNice ChairNice Chairman/Vice President Jonathan explained that the intent was to provide flexibility if opportunities arise to enable the Council to make an exception to the normal investment policy. The normal investment policy boils down to very conservative CDs, conservative bonds, cash in some cases, and there may be occasions, as there have before, where there may be a temporary use of General Fund Reserves that Council feels is appropriate. However, if it conflicts with the Investment Policy, Council would not have the ability to make such investment. By having this language inserted, it provides Council flexibility r^. PREUMINARY MtNUTES D raft PALM DESERT FINANCING AUTHORITY MEETING JUNE 8, 2017 to take action where it deemed appropriate. As a separate issue, he noticed the staff report indicates the City Treasurer shall provide the City Council with a monthly investment report within 30 days after the Audit, Investment & Finance Committee reviews it. However, the Investment Committee last discussed not meeting monthly; therefore, the language would not be consistent with the Investment Committee, because it will no longer meet on a monthly basis. He suggested striking the word monthly. Mayor/Chair/Chairman/President Harnik pointed out that the Policy itself already reflected that change on page 18. Councilmember/Director/Member/Commissioner Kelly said she appreciated the explanation for the paragraph on page 1 of the staff report and on page 1 of the Policy itself, but she is troubled by the language, because it seems to say that despite the fact that great effort has gone into defining an appropriate investment policy, the City Council can do whatever it wants. However, Councilmembers are not investment experts, and while she may trust present company to be very prudent, it didn't strike her as good policy to invite that kind of initiative from Council without following the usual process for amendment of the investment policy. If the thought is that sometimes sensitive opportunities could come up, her response would be that it should probably stay away from it, because the level of risk that the City has adopted doesn't warrant jumping into a time sensitive opportunity. Additionally, she hadn't heard anything that makes her comfortable with it. Mayor Pro TemlVice ChairNice ChairmanNice President Jonathan concurred, stating the intent of this language was to give the Council the ability to take action using General Fund Reserves, which is a departure from the normal investment policy. For example, if the City Council felt it needed to temporarily acquire a strategic piece of real estate using General Funds, the current policy prohibits it, because it's limited to investments of CDs, bonds, etc. The idea is to give the Council flexibility to utilize General Fund Reserves in such a way that it deemed appropriate. If there is other language that would make that point clear, he was open to it. Again, the intent is not to jump into some investment that may offer a 12% return. Another example, if in fact the City moves forward with the Community Choice Aggregation Energy (CCA) Program, there are start-up funds that are required, and many cities have provided those funds because it's a very secured loan to the CCA, adding it might pay 4% instead of 1%. He's not here proposing that the City do that, but he's just providing an example where other cities have used General Fund Reserves in a way that would not be consistent with Palm Desert's investment policy. He explained that taking that type of action is beneficial to the City, but if this language is not clear, he's open to other language that would limit the departure from the investment policy to actions of that nature. 3 PRELIMINARY MINUTES �J ra�� PALM DESERT FINANCING AUTHORITY MEETING JUNE 8, 2017 Ms. Moore replied that with regard to the investment policy, staff may offer a compromise, in that the investment policy doesn't prohibit Council from taking action for the use of reserves. What the investment policy encourages and requires, is that there are policies for investable funds to be followed. Therefore, when the City has investable cash, it is to be invested in accordance with the policy. If Council were to take action to dedicate some of the monies available for a specific purpose that would make that un- investable according to the plan. If the goal was to look at a property, the policy may not prohibit that, and perhaps thaYs where there is confusion or where a compromise may occur. Mayor Pro TemNice Chair/Vice ChairmanNice President Jonathan asked that if the paragraph in question was stricken, would Council still have the ability to use General Fund Reserves in a way other than traditional investing. Ms. Moore answered yes, but would caution that if any of the things Council decided to do with the funds were of an investment nature, then that would then be subject to the investment policy. Mayor Pro TemNice ChairNice ChairmanNice President Jonathan commented he thought a loan to the CCA, which is a promise or notice of security, subject to legal interpretation, was considered an investment. Councilmember/Director/Member/Commissioner Weber disagreed, in that she wouldn't consider a loan to the CCA or purchasing property an investment, stating investments are defined differently in the policy. Therefore, she shared Councilmember Kelly's concern about the language making it sound like Council can haphazardly invest, which is not the function of the Council. The City is extremely conservative, so if this is how the language is being translated, she would agree that the paragraph is not needed, because it can be translated down the road in that manner. Mayor Pro Tem/Vice ChairNice ChairmanNice President Jonathan agreed, but he wants to make sure Council has the ability to act in the City's best interest when opportunities arise. He reiterated that investing in a note might be deemed an investment, stating that if the City lends money to the US Treasury or the State of California, those are loans the City is making with General Fund Reserves. Therefore, a loan to the CCA would not be any different, but perhaps different from a purchase of real estate. He suggested tabling this issue to get legal opinion. However, he completely concurred with his colleagues in that the wording opens the door to an imprudent investment, which is not the intent of the Audit, Investment & Finance Committee who is making the recommendation. Their intent was to enabfe the City Council to have flexibility when opportunities arise. He said if C! PRELIMlNARY MINUTES D C��� PALM DESERT FINANCING AUTHORITY MEETING JUNE 8, 2017 purchasing real estate is not an investment, that's not an issue, but other opportunities may arise. So, if something like the CCA would be prohibited by the existing policy, then wording needs to be found that would satisfy all concerns. Councilmember/Director/MemberlCommissioner Kelly offered that the overall approach to changing the policy is extremely well-thought out, over due, and probably should be adopted as soon as possible, because the thrust of the recommendation is that the City's policy has been overly conservative to its disadvantage. She would like to see this policy adopted this evening without the paragraph it has been discussing, because staff can continue to research whether some addition to the policy is necessary to address the concerns Mayor Pro Tem Jonathan has raised, and if needed, an amendment can be made in the future. However, she didn't see any reason to hold up the very thoughtful and important changes that make up the substance of what's before the City Council this evening. Mr. Hargreaves concurred with the suggestion, because trying to decide the nature of a particular investment will depend on the specifics, more importantly, what's the purpose of it, and is it just to make money, adding that the same would apply for real estate. He encouraged the City Council to adopt the Investment Policy without the subject paragraph and address specific situations as they arise. At that time, figure out if it comes under the policy, and if it does, Council can modify the policy if necessary. Councilmember/Director/Member/Commissioner Kelly said she will move to approve the policy with the two verbal changes made in language this evening and striking the paragraph thaYs been under discussion and appears on page 1 of the policy. Councilmember/Director/Member/Commissioner Kelly moved to, waive further reading and adopt the following, approving the Palm Desert "Statement of Investment Policy," as further amended, including the changes orally provided at the meeting: 1) City Council Resolution No. 2017 - 43; 2) Successor Agency Resolution No. SA-RDA 066; 3) Financing Authority Resolution No. FA - 68; 4) Housing Authority Resolution No. HA - 81. Motion was seconded by Weber and carried by a 5-0 vote (AYES: Jonathan, Kelly, Nestande, Weber, and Harnik; NOES: None). VII. CONTINUED BUSINESS None VIII. OLD BUSINESS None 5 PRELIMINARY MINUTES PALM DESERT FINANCING AUTHORITY MEETING C� raft JUNE 8, 2017 IX. PUBLIC HEARINGS None X. REPORTS, REMARKS, AND AUTHORITY BOARD ITEMS REQUIRING ACTION A. CHIEF ADMINISTRATIVE OFFICER None B. AUTHORITY COUNSEL None C. PRESIDENT AND MEMBERS OF THE AUTHORITY None XI. ADJOURNMENT With Authority Board concurrence, President Harnik adjourned the meeting at 6:00 p.m. JAN C. HARNIK, PRESIDENT ATTEST: RACHELLE D. KLASSEN, SECRETARY PALM DESERT FINANCING AUTHORITY : � CITY OF PALM DESERT/SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY/PALM DESERT HOUSING AUTHORITY/ PALM DESERT FINANCING AUTHORITY STAFF REPORT MEETING DATE: September 27, 2018 SUBMITTED BY: Veronica Tapia, Senior Management Analyst REQUEST: APPROVE THE RECOMMENDED FIRMS TO BE PLACED ON A PRE-APPROVED LIST OF UNDERWRITERS/PLACING AGENTS FOR POTENTIAL FUTURE DEBT ISSUANCE OR REFUNDINGS Recommendation By minute motion that the City Council, Successor Agency to the Palm Desert Redevelopment Agency (SARDA) Board, Housing Authority Board, and Financing Authority Board approve the recommended firms to be included in a pre-approved list to provide underwriting and placement agent services for future debt issuance or refundings. Strateaic Plan Approval of the pre-approved Underwriters/Placing Agents list (List) will make the process of debt issuance more efficient (and thus potentially save time and cost) in the future, if (and when) the Council or Boards decide it appropriate to issue debt to finance projects in furtherance of one or more of the goals listed in the strategic plan or to refund existing debt. This action supports the City's objectives under strategic plan as a whole. Executive Summary Palm Desert last approved a list of eligible investment banking firms to provide underwriter or placement agent services in 2005. The 2005 list is outdated as many of the firms on the 2005 list have either changed their priorities or market focus, merged, or no longer exist. This item will go before the Audit, Investment and Finance Committee on September 25th An oral report on the Committee's action will be provided at the Council Meeting. Staff recommends approval of this item to replace the 2005 list. Backqround The economic downturn which started in the mid-to-late 2000's had ripple effects for communities throughout California, including Palm Desert. The effects were exacerbated by the dissolution of redevelopment agencies in 2011. The issuance of debt for new projects diminished significantly throughout California, as communities tried to find a way to recover. STAFF REPORT APPROVAL OF LIST OF UNDERWRITERS/PLACEMENT AGENTS SEPTEMBER 27, 2018 PAGE 2 As a result of the downturn, property values dropped, delaying many new construction plans and the development of supporting public infrastructure. Through this difficult time, the City of Palm Desert sought to balance, on the one hand, managing its debt portfolio and, on the other hand, capitalizing on opportunities to support economic development and the community with infrastructure projects in the City. By 2017, while the effects of the redevelopment dissolution continued, the economic recovery was making significant progress. Palm Desert took on the challenge of refunding over $250 million of SARDA debt in order to save the taxing entities (including the City) money over the lifetime of most of the SARDA's remaining bonds. Issuing or refunding debt, as the case may be, is never an easy task. The successful completion of a bond issuance transaction requires hours of scrutiny and critical thinking by all parties (including staff and other financing professionals) to ensure the best outcome. Among the challenges of the 2017 SARDA refunding was the selection of an underwriter for the bond refunding. The eligible investment banking firms list approved by the City and the redevelopment agency in 2005 was outdated in light of the changes in the municipal financing world during the interim years. Ultimately, the firm of Stifel, Nicolaus & Company, Incorporated, was chosen and the refunding was completed successfully. Now with the housing market and economy in a more stable position, there may be some opportunities to issue new and/or refund existing debt when the City Council (or Board) decides it appropriate to do so. In anticipation of these opportunities, on May 4, 2018 staff issued a Request for Qualifications (RFQ) to firms interested in being pre-approved for future Underwriter/Placing Agent services. The RFQ was published, as well as shared with firms and/or underwriters that were part of the prior approved list. On June 4, 2018, the City Clerk received six (6) Statements of Qualifications (SOQ). The following firms submitted SOQs: Firm Lead Office Underwriter Services � Piper Jaffray Laquna Beach, CA Yes � Ziegler Altadena, CA Yes � Stifel San Francisco, CA Yes � Hilltop Cardiff, CA Yes ; UBS Los Angeles, CA Yes Placement A�ent Service Yes Yes Yes Yes No Prior PD Bond Issue No Staff'` Yes Staff" No Ramirez Los An�eles, CA Yes Yes Staff* 'While the firm has not iad direct experience with Palm Jesert debt, the lead s aff person has participated with a prior listed finn. Each firm submitted complete responses meeting the minimum qualifications included in the RFQ. A review panel comprised of the Municipal Advisor, Legal Counsel, Director of Finance, and staff reviewed the six SOQ's. The review panel evaluated the SOQ's based upon a number of factors, including: Experience of the firm Experience of its assigned personnel (i vda�Vcromca Tapia\N'ord fJes�Sta(1"Reports�SR UKUERWRITFR_PLAC(\'G AGF.\7 POOL 8-23-IS rev jm R-13-18 doc STAFF REPORT APPROVAL OF LIST OF UNDERWRITERS/PLACEMENT AGENTS SEPTEMBER 27, 2018 PAGE 3 • Professionalism of firm and assigned personnel • Service to the issuer • Approach • Cost • Other factors considered to be important to the financing goals of Palm Desert. U � � � � t�° :/� � � � 1 ;.� r � � O n The review panel considered the strengths and weaknesses of each firm in terms of how they matched up with Palm Desert's needs. Each firm demonstrated individual merits based on the size and/or type of debt to be issued. The review panel concluded that all firms were capable at varying levels, and should be included in the pre-approved list of qualified firms as options to be utilized for any potential future debt issuance. Therefore, staff recommends that the City Council and the Boards approve the recommended firms to be included in the pre-approved list of Underwriters/Placement Agents. Approval will only provide a list of qualified firms to select from in the event the City Council/Boards desire to issue debt in the future. Selection, based on the same criteria of the pre-approval and the needs of the City, will be conducted at the time of financing based on the information provided in the SOQ's as well as any information requested relative to the proposed projects to be financed. Fiscal Analvsis Approval of the list does not incur any immediate cost. If a need for financing is identified, the firm selected to handle the transaction will be paid through the cost of issuance from proceeds. Ultimately those costs will be borne by the source of funds identified for repayment of the debt. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW CITY MANAGER /�Il� . - i n /:l� � ( ` . �/�r i. ..._ ::.., � ,i � Robert W. t MoorE''��� � a t Moore Lauri Aylaian Ha eaves Director of Finance Director of Finance City Manager Cit ttorne�� � . � A o �. �O�TENt�: �Q for Un rwr�ter(,�lacement Agent Services � o `.�.c `_- m d � � n N � � � � � � '� _ � U CITY COUNCIL ON � � U �� V Q� �' APPROVED � DENiED ;� , �' U RECEIVED OTHEIt � � � � � , � � '� � :� u"' `•� � 3 MEET G DA ny�� � % oC (�l ?C .-'— ; - ' rp i t�r�d2. /. �/l �' l�{� m:� `�; � � m�- � m A�s: L��L_. � r�g C3 � � C �(°� � NOES• � f �� � G\rd�eronica T'" ord Fil s\Sty�t�cepor�SR UN ITER 'LA(�i AG�' POOL 8-23-18 rc�r���oT� )�I� i ;1„ � "� - � cu ABSTAIN• �I�Y ' , � w � e VERIFIED BY: � ._. �,; � Pz, �� ��� Qriginal on File with City erk's Of'fice CITY OF PALM DESERT FINANCE DEPARTMENT REQUEST FOR QUALIFICATIONS FOR UNDERWRITING AND PLACEMENT AGENT SERVICES G\RDA\Veronica Tapia\Wortl Files\Bontl Issues\Undenvnter RFO 2018\Underwriter antl Placement Agent RFQ 3-15-�8 tloc NOTICE REQUEST FOR QUALIFICATIONS ("RFQ") FOR UNDERWRITING AND PLACEMENT AGENT SERVICES PUBLIC NOTICE IS HEREBY GIVEN that the City will receive sealed qualification statements for: UNDERWRITING AND PLACEMENT AGENT SERVICES. The City is interested in establishing a pool of firms to provide underwriting and placement agent services to the City and its related public entities over the next five years. It is the City's intent that all firms obtain the full content of the RFQ and any addenda via the City's website located at www.ciryofpalmdesert.org. Statement of Qualifications must be submitted in accordance with the instructions. An email must be sent to Veronica Tapia at vtapia(a�cityofpalmdesert.orq acknowledging receipt of the RFQ in order for the City to add the firm to its notification list. Please include the Contact Person, the name of the firm, address, phone number, and e-mail address. City reserves the right to cancel this RFQ or to reject any and all responses and Qualification Statements if it determines, in its sole discretion, that such cancellation or rejection is in the best interest of City. Firms interested in responding to this RFQ are welcome to submit specific questions seeking clarification of the RFQ requirements. Questions shall be submitted in writing and emailed to: vtapiaCc�citvofqalmdesert.orQ , not later than 5:00 p.m., Pacific, on May 21, 2018. Questions may also be submitted to the Ciry's municipal advisor kdieker@delrioadvisors.com. Respondents may e-mail their Qualification Statements by May 25, 2018 by 5:00 P.M. for consideration. Upon receipt of any e-mailed qualifications, Respondents will have two business days to deliver the required hard copies to Palm Desert. Postmarks will not be accepted. City reserves the right to waive minor irregularities and omissions in the information contained in a Qualification Statement submittal and to make all final determinations. City may refuse to accept any submission where the requested information and materials are not provided. There is no appeal from City's decision not to prequalify a firm due to an incomplete or late application. The RFQ, its completion and submission by the firm, and its use by City, shall not give rise to any liability on the part of City to the firm or any third party or person. This is a request for Statement of Qualification for inclusion in a pool pertaining to possible future City financings. This is not a request for proposal for any definitive pending transaction. No guarantees are made or implied that any services are to be rendered, either in part or whole. The firm accepts all risk and cost associated with the completion of the RFQ without financial guarantee. Sealed qualification statements will be accepted at the City Clerk's office, Palm Desert City Hall, 73510 Fred Waring Drive, Palm Desert, CA, until 2:00 p.m., Monday, June 4, 2018, at which time they will be opened and given to the City's Finance Department to evaluate each of the qualification statements. Dated this 4 th day of May, 2018 RACHELLE D. KLASSEN, CITY CLERK CITY OF PALM DESERT, CALIFORNIA 73-510 Fred Waring Drive Palm Desert, California 92260 (760) 346-0611 CITY OF PALM DESERT REQUEST FOR QUALIFICATIONS FOR UNDERWRITING AND PLACEMENT AGENT SERVICES The City of Palm Desert is interested in establishing a pool of firms to provide underwriting and placement agent services to the City and its related public entities over the next five years. If your firm is interested in responding to this Request for Qualifications (RFQ), please review the RFQ and fully respond to each question and request for information. Please pay particular attention to the qualifications submission and presentation requirements listed below: 1. RFQ REQUIREMENTS AND QUESTIONS A. General Minimum Qualification Reauirements Firms must have a minimum of five years of satisfactory experience in providing underwriting and placement agent services to California entities and have at least one office located in California. If the firm has been in business for less than five years, the experience of its principals may be used to meet this requirement. Please provide detailed information regarding the experience of the firm and the professional staff to be assigned to Palm Desert. B. General Scope of Services From time to time, Palm Desert may require underwriting or placement agent services from firms who are members of the pool established as a result of this RFQ. The members may be selected for a particular transaction on any basis. Members may be asked to submit specific qualifications and a fee proposal for a specific transaction. All fees will be contingent upon the successful closing of the transaction. Firms for individual transactions may be selected on a rotating basis. Any firm selected may be called upon to: Provide customary underwriter or placement agent services in connection with a transaction; including preparation and implementation of rating agency and insurance company presentations or direct placement term sheets. ii. Review and comment upon transaction documents. iii. Review and comment upon the structure, alternative, and feasibility of any proposed transaction. G 1RDA�Veronica Tapia\Wortl Files\Bontl Issues�Underwriter RFp 2018\Untlerwriter antl Placement Agent RFp 3-15-18 doc � iv. Provide analysis regarding the size and timing of transactions and issuance of additional obligations, redemption prior to maturity and call premiums. v. Participate in meetings with and presentations to the City Council or governing board, staff, consultants, rating agencies, and insurance companies. vi. Provide other underwriting or placement agent services upon request. C. Submission Questions In a table, list the last three years of California debt experience (new money and refunding) broken out by Lease Revenue, Enterprise Revenue, Installment Sales Revenue, Mello Roos, Assessment District, Successor Agency, and General Obligation. Include the agency name, par amount, closing date, title of issue, and rating. For each transaction, indicate whether your firm acted as senior manager, co- manager or placement agent. ii. List all Palm Desert transactions in which your firm has participated. iii. Describe your firm's technical capability and what software your firm utilizes in structuring bond issues. iv. Describe your firm's capabilities and strategies to market and sefl Palm Desert bonds and other obligations. Include a discussion of your firm's retail and institutional distribution capabilities in California and a description of the number of personnel in the sales force, both nationally and in California. v. Describe your firm's capability and describe the process to market a direct placement transaction. vi. Name one to three financings that the firm, and preferably your key personnel, has been involved in during the last three years that demonstrate the firm's creativity or those which you believe are noteworthy. What were some of the challenges you encountered and how did you overcome them? vii. Describe how your firm distinguishes itself from other firms. List any issues or challenges you see concerning the G\RDA�Veronica Tap�a\Word F�Ies�Bond Issues�Under.vnter RFp 2018�Underwr�ter antl Placement Agent RFQ 3-15-18 tloc 3 marketing and sales of Palm Desert bonds or other obligations. viii. Describe the experience, qualification and other vital information, including relevant experience on previous similar financings, of all key individuals who may be assigned to a transaction. Key personnel include all professional staff that will perform work and/or services. Include the functions to be performed by the key individuals. ix. What is your maximum underwriting liability pursuant to SEC guidelines? Please explain how you derived this figure. During the last three years, describe any situation where you underwrote unsold bonds for a client, including the amount you underwrote and the client. x. Describe your secondary market activities. xi. Describe any other experience in structures other than fixed rate financings and any other structures you wish to discuss. xii. Please disclose whether the firm, or any of its professional staff within the last five years been convicted of any crime or offense arising directly or indirectly from the conduct of the firm's business, or otherwise involving financial misconduct or fraud. If so, please describe any such convictions and surrounding circumstances in detail. xiii. Please disclose whether the firm, or any of its professional staff have ever been indicted or otherwise charged in connection with any criminal matter arising directly or indirectly from the conduct or the firm's business or otherwise involving financial misconduct or fraud, which is still pending. If so, please describe any such indictments or charges and surrounding circumstances in detail. Please disclose whether the firm has been sued by an issuer and disclose the outcome of such litigation. xiv. Please indicate your firm's gross spread and expenses for the following ranges and credit types (non-rated, rated, and insured): Size Ranqe Less than $5 million $5 million to $10 million $10 million to $25 million $25 million to $50 million Over $50 million G�RDA\Veronica Tapia\Wortl Files\Bond Issues\Untlerwriter RFp 2018\Underwriter and Placement Agent RFQ 3-75-18 tloc � Please indicate the same for your firm's fees and expenses as placement agent. Please also describe any adjustments to fees and expenses as underwriter or placement agent depending on rype (ie. General Obligation, Lease Revenue, Installment Sale, Enterprise Revenue, Mello Roos Community Facilities District, Assessment District, Successor Agency, short term borrowing, etc). Please note that for specific transactions, Palm Desert may solicit a detailed cost proposal from a number of pool members. The range of compensation asked for at this time is to provide general information to assist in selecting firms to participate in the pool. xv. Supplemental Information - Any additional information your firm wishes to include. Please provide the following specifics as an attachment, as they relate to your firm. Firm Description (Please provide the following): a) Brief history; b) Headquarters location; c) Ownership structure of the firm; d) Briefly list all significant lines of business beside public finance and municipal securities, in which the firm is active; and e) Please state your firm's (or parent company's) long term and short-term ratings as of January 1, 2017 and 2018. Business in California (Please provide the following): • How many full-time employees does the firm currently employ nationwide and in California? Please provide a number for the entity applying to the pool and a separate number for any related entities (if applicable). • Provide a table showing the total number and breakdown of professionals dedicated exclusively to public finance (i.e., public finance investment banking, underwriting, placement agent, remarketing, sales, and trading) working in both California and outside of California. G\ROA\Veronica Tapia�Word Files\Bontl Issues�Untlerwnter RFQ 2018\Untlerwriter anC Placement Agent RFp 3-15-18 tloc 5 • How many offices does your firm have in California? Municipal Bond Department (Please provide the following): � Description of the municipal bond departmenYs position and level of importance in the firm. • Has the firm's municipal bond department experienced any significant staffing changes over the past five years? If so, please briefly describe. Capital Commitment (Please provide the following): • Description of the firm's capital commitment to its public finance activities. • Average daily inventory of municipal bonds (tax- exempt fixed rate only) for 2016 and 2017. Retail (Please provide the following): • Please provide the dollar amount of all California (State and local) municipal securities currently held in retail accounts at your firm. xvi. Please submit five references from other California public agencies for which underwriter or placement agent services have been performed within the last three years. 2. QUALIFICATIONS A. General i. Firms are invited to submit a response (a Statement of Qualifications) for consideration. Submission of a response indicates that your firm has read and understands this entire RFQ and all of its attachments and all concerns regarding this RFQ have been satisfied. ii. Qualifications must be submitted in the format described below. Qualifications are to be prepared in such a way as to provide a straightforward, concise description of capabilities to respond to this RFQ. Expensive bindings, colored displays or promotional materials, are neither necessary nor desired. Emphasis should be on conformance to the RFQ questions and instructions, responsiveness, and completeness and clarity of content. iii. Responses may not be considered if they are conditional or incomplete. G�RDA\Veron�ca Tap�a�Wortl F�Ies�Bontl Issues�Untlerwr�ter RFO 2018\Unaenvr�ter antl Placement Agent RFp 3-15-18 doc 6 iv. All materials submitted become the property of Palm Desert. All responses received are subject to the "California Public Records Act". v. Firms selected as members of the pool are required to immediately notify Palm Desert regarding any changes to the firm's ability to meet the minimum qualifications, the disclosure information submitted in the firm's response to this RFQ, and any contact information changes. If a firm fails to notify Palm Desert within 30- days of a change that necessitates notification, the firm may be suspended from the pool, be ineligible for appointments, and be required to request reinstatement. Palm Desert reserves the right to request additional information from time to time. B. Qualification Statement Presentation All responses must be submitted on 8'/2" x 11" paper, typed in 12 pt. font, double-sided, with normal (1-inch) margins, single-spaced, and limited to 15 pages of writing (including the cover letter, any attachments and/or exhibits). Each page, including attachments and exhibits, must be clearly and consecutively numbered at the bottom center of the page. Failure to provide all requested information or deviation from the required format may result in disqualification. A cover letter must be included and signed by a person authorized to commit the firm to the terms and conditions of the response. One (1) marked as RFQ original and four (4) copies (total of 5 hard copies) plus one (1) electronic version of the complete RFQ must be received by the deadline below for receipt of qualification statements. The original and all copies must be in a sealed envelope or container and submitted to Palm Desert: G 1RDA\Veronica Tap�a\Word Files\Bond Issues\UnCerwnter RFp 2018\Underwriter antl Placement Agent RFp 3-15-18 doc Due Date: June 4, 201$ at 2:OOPM Place: City of Palm Desert Attn: Veronica Tapia Title: Senior Management Analyst 73-510 Fred Waring Dr. Palm Desert, CA 92260 (760) 346-0611 x. 344 Phone (760) 341-6372 Fax vtapia�citvofpalmdesert.orq Questions regarding or to the staff or the on May 21, 2018: the RFQ may be addressed via email, phone City's Municipal Advisor no later than S:OOPM Del Rio Advisors, LLC Kenneth L. Dieker, Principal 1325 Country Club Drive Modesto, CA 95356 (209) 543-8704 Phone (209) 554-0427 Fax kdieker(a�delrioadvisors.com Hand-carried qualification statements may be delivered to the City address above ONLY between the hours of 8:00 a.m. to 5:00 p.m., Monday through Friday, excluding holidays observed by the City of Palm Desert. Respondents are responsible for informing any commercial delivery service, if used, of all delivery requirements, and for ensuring that the address information appears on the outer wrapper or envelope used by such service. Respondents are solely responsible for ensuring that the responses are delivered in a timely manner. Palm Desert is not responsible for any incorrect or late deliveries. Respondents may e-mail their qualifications by May 25, 2018 by 5:00 P.M. for consideration. Upon receipt of any e-mailed qualifications, Respondents will have two business days to deliver the required hard copies to Palm Desert. Postmarks will not be accepted. 3. EVALUATION / SELECTION PROCESS A. Introduction Following the opening of the qualification statement packages, the qualification statements will be evaluated. G�ROA\Veronica Tapia\Wortl Files�Bontl Issues\Untlerwnter RFp 2018\Untlerwriter and Placement Agent RFp 3-15-18 tloc B. C. Qualification Statement Evaluation Initial Review � If a qualification statement does not respond adequately to this RFQ, it may be rejected and will not be further evaluated. Technical Review m Responses to this RFQ will be evaluated based upon a number of factors, including: experience of the firm, experience of its assigned personnel, professionalism of firm and assigned personnel, service ethic, approach, cost, and other factors considered to be important to the financing goals of Palm Desert. Upon completion of certain respondents presentation(s). Placement on Pool List the initial and technical evaluation may be requested to provide oral Following the evaluation of the responses, the firms recommended for admittance to the Pool will be submitted to the City Council for its approval. G\RDA�Veronica Tap�a\Wortl Files\Bontl Issues\Untlerwriter RFp 2018\Untlerv✓r�ter antl Placement Agent RFQ 3-15-18 tloc 9