EXHIBIT 2-A

 
EXECUTIVE SUMMARY                  

 

 

                                                    Finance  Ÿ  Redevelopment  Ÿ  Implementation  Ÿ  Planning

 

 

 

 

 

August 24, 2007


 

Mr. David Berger

General Manager

Monterey Peninsula Water Management

District

5 Harris Court, Building “G”

P. O. Box 85

Monterey, California  93942-0085

 

RE:      FINANCIAL ADVISORY SERVICES FOR THE MONTEREY PENINSULA WATER MANAGEMENT DISTRICT

 

Dear Mr. Berger:

 

Thank you for the opportunity to present this proposal to provide Financial Advisory services to the Monterey Peninsula Water Management District (the "District").  This proposal is intended to serve as a mechanism for Urban Futures to be the Financial Advisor for the District.  An initial contemplated assignment is for the proposed issuance of certificates of participation (the “Bonds”), which will be used to finance the construction of a second water injection well and related infrastructure for the District’s Aquifer Storage and Recovery Project.  In addition to financial advisory services, it is our understanding that the District desires assistance in determining whether the Bonds may be issued on either tax exempt or taxable basis.

 

Since our founding, Urban Futures, Inc. (“UFI”) has served over 150 governmental entities in various capacities, and as financial advisors/fiscal consultants, we have been involved in over $6,000,000,000 worth of transactions.  We have helped many California agencies create a sound financial foundation and look forward to sharing this expertise with the District.

 


Due to our extensive public finance experience in California, Urban Futures, Inc. is uniquely qualified to provide fiscal consultant reporting services to the District in an innovative and comprehensive manner.  UFI “brings to the table”:

 

·         Knowledge of and familiarity with the current municipal bond market and trends relative to financings in California;

·         A team of professionals with a combined 120 years of municipal financing and redevelopment experience;

·         Analytic sophistication that fosters a multi-disciplinary approach to problem solving regardless of project size or type;

·         An integrated full-service approach which provides clients with all necessary finance services; and

·         Continuity of service; UFI is small enough so that there is never a break in the client/professional network, yet large enough to offer a full range of services.

 

The greatest benefit that we present to the District is that our firm can combine these necessary services into


a comprehensive whole.  The list in Section 2 (Scope of Services) details the services that UFI will perform.

 

Firm Description and Experience:

 

Urban Futures, Inc. (UFI) is a full service municipal consulting firm serving local government primarily in the State of California.  The firm was founded in 1972 and has existed in its present form since 1974.  It is the largest singularly owned, municipal financial advisor/redevelopment consulting firm in the State.  UFI is a closely held California corporation and serves as the controlling company for Urban Futures Bond Administration, Inc. (UFBAI), one of the nation's largest bond administrators.  UFBAI shares offices with UFI in the District of Orange, California.

 

UFI currently employs 27 staff members.   Staff members regularly attend seminars to upgrade their skill levels.  For this particular financing, Al Holliman will be UFI’s lead fiscal consultant, as a significant portion of his practice includes the Central California coastal region.  Joining him in this assignment will be Marshall Linn, Doug Anderson and Eva Wolf.  A short biographical sketch for each of them is provided below.

 

Over the last 32 years, UFI has provided financial advice and/or prepared fiscal consultant reports for the following types of financings:

 

a.         Assessment District Bonds

b.         Mello -Roos Special Tax Bonds

c.         Certificates of Participation

d.         Lease Revenue Bonds

e.         RDA Tax Allocation Bonds — Taxable and Tax-Exempt

f.          RDA Tax Allocation Notes — Taxable and Tax-Exempt

g.         Single Family Revenue Bonds

h.         Mobile Home Revenue Bonds

i.          Multifamily Revenue Bonds

j.          Variable Rate Bonds

k.         Water and Sewer Revenue Bonds

l.          General Obligation Bonds

m.        Grant Anticipation Notes

n.         Enterprise Fund Financings

 

UFI's Public Finance Department is dedicated to providing comprehensive and innovative financial consulting services to cities, counties, redevelopment agencies and special districts.  The principal members of the firm have over one hundred and twenty years of combined experience in both public and private financings.  The firm, over the last decade, has served as financial advisor, fiscal consultant and/or bond administrator for more than six billion dollars worth of tax exempt and taxable securities.


 

UFI currently serves as financial advisor and/or bond administrator to over 125 counties, cities and redevelopment agencies.  In addition to redevelopment and Marks-Roos, other kinds of issues for which we have served as financial advisor include water and sewer revenue bonds, special assessment bonds, Mello-Roos Special Tax Bonds, certificates of participation revenue bonds, single and multifamily revenue bonds, taxable bonds, and various forms of refunding bonds.

In addition, major banks have issued Letters of Credit to a significant number of California cities, redevelopment agencies and special districts based on their confidence in our work product.  Both Moody's Investor's Service and Standard & Poor's recognize our name and have issued ratings on issues where we served as financial advisor/fiscal consultant.

 

Understanding of Tasks for Injection Well Bonds:

 

UFI will provide the following services:

 

1.      Evaluate and project the District’s cash flows (property tax and rate payer) required to size and debt service the Bonds.

 

2.      Subsequent to the determination of the tax exempt or taxable nature of the Bonds, render an opinion with respect to the size of the Bond issue.

 

3.      Assist District staff in their conduct of a Proposition 218 validation process.

 

4.      Recommend the financing team members (underwriters, bond counsel, disclosure counsel, trustee, etc.) that are best suited to the Districts current needs and coordinate all meetings with financing team members.

 

5.      Coordination of and assistance in the preparation of the preliminary and final official statements for the bond issue.

 

6.      UFI will actively participate in the rating agency and bond insurance process and be available for all questions by the rating agencies and/or bond insurers.

 

7.      Pricing advisory services – one week before the final pricing date for the bonds, UFI will begin assembling market data relative to tax exempt debt offerings in general and tax exempt tax allocation bonds.  On the day before and morning of pricing, UFI will prepare a detailed analysis of similar bond issues which will be presented to the District.  This analysis will be used as a benchmark in determining the equitability and viability of the net yield offered by the underwriter.

 

8.      UFI will participate in the “pricing call” between the District and the underwriters and will offer “offline” advice to the District in accordance with the aforementioned analysis regarding the price and terms as quoted by the underwriters. 

 

9.      UFI’s  services will include a thorough review of the various components which equate to the net bond yield, including appropriate scrutiny of the underwriters’ spread and any related premiums or discounts on the bonds.

 

10.  Assistance in the investment of bond proceeds.

 

11.  Post bond follow-up.

 

 

 

Compensation:

 

Please refer to Exhibit C for Urban Futures’ fee schedule.  Urban Futures is only compensated if and when bonds are issued.  Our fees are payable from bond proceeds.

 

Qualifications of Key Personnel:

 

MARSHALL F. LINN, President will oversee all aspects of the work performed for The District.  Mr. Linn has more than 38 years of municipal and private consulting experience.  As a financial advisor, Mr. Linn has participated in more than 350 bond issues, totaling well over  five billion dollars in tax exempt securities, including over 250 tax allocation notes and bonds, lease revenue bonds, certificates of participation, sewer and water revenue bonds, community facilities and assessment district financings, and other miscellaneous type of transactions.

Education:  Bachelor of Science Degree, Economics; Master's Degree, Urban Planning, University of Southern California.

 

AL HOLLIMAN, Principal will have significant responsibilities for this engagement.  Al enjoyed a successful 33 year career in state and local government before joining Urban Futures in late 2006. His career consisted primarily of assistant district manager, finance director, and redevelopment administrative positions.  As such, he has extensive experience in municipal finance, public utilities, economic development, redevelopment, and housing, which includes lead issuer responsibilities for over $500 million in tax exempt debt offerings.  Mr. Holliman has a unique background in that he is a certified public accountant but also has demonstrated experience in public utility matters, developer negotiations, development agreements, and capital project administration.  He has  taught government finance and economic development courses in the California State University system since 1998.

Education: Mr. Holliman earned a Bachelor of Arts Degree from California State University Fullerton in Business Administration and a Master of Arts Degree in Management from the Claremont Graduate School.  He is currently enrolled in doctoral studies at the University of Maryland.

 

DOUGLAS P. ANDERSON, Vice President will be available for assistance for any services deemed necessary.  He is responsible for the research and analysis necessary to structure tax exempt bond issues and assists in the investment of proceeds upon the issuance of bonds.  Prior to his work with Urban Futures, Mr. Anderson worked for a commercial bank and obtained experience in commercial finance, housing and credit analysis.  Mr. Anderson has been with Urban Futures since 1985.

Education: Mr. Anderson earned a Bachelor of Science Degree from San Diego State University in Business Administration, with a Finance emphasis.

 

EVA WOLF, Assistant Vice President will research and compile the financial and statistical data necessary for any of the District’s financing needs. She provides research and analysis of information, which makes up components of the financial advisory report and the preliminary and official statements for the bond issue.  Ms. Wolf is responsible for coordinating with the financing team to ensure adherence to the financing schedule.  She has been with Urban Futures for over 12 years.

Education:  Ms. Wolf earned a Bachelor of Science Degree from the University of Redlands in Business Management.

 

We look forward to assisting the District as its Financial Advisor.  If you have any questions or need additional information, please contact me or Mr. Holliman at (714) 283-9334.

 

Sincerely,

MARSHALL F. LINN

President

 

Enclosures [Exhibits A (references), B (client list), and C (fee schedule)]

 

 

 

 



 

EXHIBIT A:   REFERENCES

 

 

 

Joe Hughes, City Manager                                                        Leon Compton, City Manager

CITY OF HIGHLAND                                                          CITY OF RIPON

27215 E. Baseline Street                                                          259 North Wilma Avenue

Highland, CA  92346                                                               Ripon, CA  95306

(909) 864-8732                                                                       (209) 599-2108

 

Financial advisor for 8+ financings                                       Financial advisor for 5+ financings

 

 

Bob Adams, City Manager                                                       Jeff Allred, City Manager

CITY OF MANTECA                                                           CITY OF NORCO

1001 W. Center Drive                                                              2870 Clark Avenue

Manteca, CA  95337                                                               Norco, CA  92860

(209) 239-8400                                                                       (951) 735-3900

 

Financial advisor for 8+ financings                                       Financial advisor for 10+ financings

 

 

Brad Kilger,City Manager                                                         Edward Todd, City Manager

CITY OF CERES                                                                   CITY OF DINUBA

2720 Second Street                                                                  405 E. El Monte Street

Ceres, CA 95307-3292                                                           Dinuba, CA  93618

(209) 538-5700                                                                       (559) 591-5904

 

Financial advisor services                                                      Financial advisor services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit B:    Clients

 

REDEVELOPMENT AGENCIES, CITIES, DISTRICTS AND INSTITUTIONAL CLIENTS THAT URBAN FUTURES, INC. HAS SERVED

 


Adelanto

Alameda County

Anderson

Apple Valley

Arroyo Grande

Azusa

Bakersfield

Baldwin Park

Banning

Barstow

Bell Gardens

Belmont

Big Bear Lake

Blythe

Brawley

Brisbane

Buena Park

Calabasas

Calipatria

Calexico

Carson

Cathedral District

Ceres

Cerritos

Coalinga

Colton

Commerce

Corcoran

Corona

Costa Mesa

Covina

Crescent District

Cudahy

Delano

Desert Hot Springs

Dinuba

Downey

Duarte

Economic Development        Corporation-Southwest        Riverside County

El Centro

Exeter

Farmersville

Fillmore

Firebaugh

Folsom

Fort Bragg

Fountain Valley

Fowler

Fresno

 

Fresno County

Garden Grove

Glendora

Gonzales

Grand Terrace

Greenfield

Gridley

Hanford

Hawaiian Gardens

Hesperia

Highland

Holtville

Huntington Beach

Huntington Park

Hughson

Indio

Industry

Kings County

Lafayette

Lancaster

La Verne

Lawndale

Lemoore

Lemon Grove

Lindsay

Livingston

Loma Linda

Los Angeles, District

Los Angeles, County

Los Banos

Manhattan Beach

Manteca

March Joint Powers

  Authority

  (Military Base Reuse)

Maywood

Mendota

Merced

Montebello

Monterey Park

Moorpark

Morgan Hill

Murrieta

Needles

Norco

Oceanside

Ontario

Ontario Local

  Redevelopment Authority

 

Orange

Orange County

Oxnard

Parlier

Pasadena

Pico Rivera

Pismo Beach

Pittsburg

Pomona

Rancho Cucamonga

Rancho Palos Verdes

Redlands

Redondo Beach

Reedley

Rialto

Rio Vista

Ripon

Rocklin

San Bernardino

San Diego, District

San Diego, County

San Dimas

San Francisco

San Juan Capistrano

San Luis Obispo, District

San Luis Obispo, County

San Leandro

Santa Ana

San Buenaventura

Santa Paula

San Fernando

San Jacinto

Shasta Utility District

Soledad

South El Monte

Stanislaus County

Stanton

Susanville

Victor Valley Economic

  Development Authority

  (Military Base Reuse)

University of La Verne

Upland

Ventura

Walnut

West Covina

Westminster

Winters

Winton

Yorba Linda



REPRESENTATIVE BOND ISSUERS AND/OR ADMINISTRATION CLIENTS

 


Azusa

Big Bear Redevelopment Agency

Barstow

Blythe

Blythe Redevelopment Agency

Brawley

Brawley Redevelopment Agency

Calabasas

Calexico

Calexico Community Redevelopment Agency

California Statewide Community Development Authority

   (CSCDA)

Camarillo

Cathedral District

Cathedral District Redevelopment Agency

Clovis

Colton Redevelopment Agency

Concord

Covina

Covina Redevelopment Agency

Covina‑Rancho Cucamonga‑Calexico‑Downey Housing Finance

      Agency

Delano Redevelopment Agency

Dinuba

Dinuba Redevelopment Agency

Duarte Redevelopment Agency

El Monte‑Downey‑San Jacinto Housing Finance Agency

Encinitas

Escondido‑Chula Vista Housing Finance Agency

Firebaugh Redevelopment Agency

Fresno

Garden Grove

Highland

Highland Redevelopment Agency

Huntington Park Redevelopment Agency

Indio

Lancaster

Lancaster Housing Authority

Lancaster Redevelopment Agency

Lemoore

Lemoore Redevelopment Agency

Lindsay Redevelopment Agency

Livermore

Loma Linda

Los Angeles County

Manteca

Manteca Redevelopment Agency

Montebello Redevelopment Agency

Montebello‑Oxnard Housing Finance Agency

Monterey Park

Moorpark


Moorpark Redevelopment Agency

Moreno Valley

Murrieta

Murrieta Joint Powers Authority

National City

Norco

Norco Redevelopment Agency

Oceanside

Ontario Redevelopment Agency

Orange County

Orange County Redevelopment Agency

Oxnard

Palmdale

Paramount

Pasadena Community Development Commission

Phoenix, Arizona

Pittsburg

Pomona

Pomona Redevelopment Agency

Port Hueneme‑Covina Housing Finance Agency

Rancho Cucamonga

Redlands

Rialto

Riverside County

Sacramento County

San Bernardino County

San Buenaventura‑Covina Housing Finance Agency

San Diego County

San Diego County Housing Authority

San Jacinto

San Juan Capistrano Redevelopment Agency

San Leandro

San Marcos

Simi Valley

Southern California Home Financing Authority (SCHAFA)

Stanton

Stanton Redevelopment Agency

Thousand Oaks

Union City

Upland

Vallejo

Victorville

Vista

Walnut Improvement Agency

Westminster

Westminster Redevelopment Agency

Winton

Yucaipa


 

 

The cost for the services requested by the Client for Financial Advisor shall be based on the following fee schedule and other considerations:

 

                                 Fee                                                 Bond Amt

1)                    $28,500 up to and including.......................... $  1,000,000

2)                    $31,500 up to and including.......................... $  2,000,000

3)                    $34,500 up to and including.......................... $  3,000,000

4)                    $37,500 up to and including.......................... $  4,000,000

5)                    $40,500 up to and including.......................... $  5,000,000

6)                    $41,500 up to and including.......................... $  6,000,000

7)                    $45,500 up to and including.......................... $  7,000,000

8)                    $47,500 up to and including.......................... $  8,000,000

9)                    $49,500 up to and including.......................... $  9,000,000

10)                $51,500 up to and including.......................... $10,000,000

11)                $53,500 up to and including.......................... $11,000,000

12)                $55,500 up to and including.......................... $12,000,000

13)                $57,500 up to and including.......................... $13,000,000

14)                $59,500 up to and including.......................... $14,000,000

15)                $61,500 up to and including.......................... $15,000,000

16)                $63,500 up to and including.......................... $16,000,000

17)                $65,500 up to and including.......................... $17,000,000

18)                $67,500 up to and including.......................... $18,000,000

19)                $69,500 up to and including.......................... $19,000,000

20)                $71,500 up to and including.......................... $20,000,000

21)                $73,500 up to and including.......................... $21,000,000

22)                $75,500 up to and including.......................... $22,000,000

23)                $77,500 up to and including.......................... $23,000,000

24)                $79,500 up to and including.......................... $24,000,000

25)                $81,500 up to and including.......................... $25,000,000

 

For any single issue in excess of $25,000,000, the financial advisor fee will be $2,000 per million over and above $25,000,000.

 

Such fee shall become payable only upon delivery by the District (or the legal entity or entities issuing such bonds, notes or obligations) of such bonds.  In addition, the Financial Advisor shall be reimbursed for direct out-of-pocket expenses and for legal expenses, if a competitive bid situation is called for, out of the proceeds from the financing.

 

In addition to the Financial Advisor's duties listed in the proposal, if the District needs UFI to perform services other than those related to the potential issuance of bonds and the accompanying analysis of the “taxable” versus ‘tax exempt” nature,  UFI’s staff will be available on an hourly fee basis based on the schedule provided below.

 

                        Principals                          $185.00

                        Senior Staff                       $160.00

                        Associate Staff                  $125.00

                        Assistant Level                 $  75.00

 

 

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