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HomeMy Public PortalAboutA 2017-12-19 LSA-SPThis Agenda contains a brief general description of each item to be considered. Copies of the Staff reports or other written documentation relating to each item of business referred to on the Agenda are on file in the Office of the City Clerk and are available for public inspection. Any person who has a question concerning any of the agenda items may call the City Manager at (310) 603-0220, ext. 200. Procedures for Addressing the Members of the Council IN ORDER TO EXPEDITE CITY COUNCIL AS SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY BUSINESS, WE ASK THAT ALL PERSONS WISHING TO ADDRESS THE COUNCIL FILL OUT A FORM PROVIDED AT THE PODIUM, AND TO TURN IT IN TO THE CITY CLERK PRIOR TO THE START OF THE MEETING. FAILURE TO FILL OUR SUCH A FORM WILL PROHIBIT YOU FROM ADDRESSING THE COUNCIL IN THE ABSENCE OF THE UNANIMOUS CONSENT OF THE COUNCIL. AGENDA City of Lynwood as Successor Agency to the Lynwood Redevelopment Agency Special Meeting TO BE HELD ON December 19, 2017 Duly Posted 12/18/17 - MQ COUNCIL CHAMBERS- 11350 BULLIS RD. LYNWOOD, CA 90262 6:30 PM 1.CALL TO ORDER 2.CERTIFICATION OF AGENDA POSTING BY SECRETARY 3.ROLL CALL OF MEMBERS Jose Luis Solache Edwin E. Hernandez Maria T. Santillan-Beas Salvador Alatorre Aide Castro PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) CONSENT CALENDAR ALL MATTERS LISTED UNDER THE CONSENT CALENDAR WILL BE ACTED UPON BY ONE MOTION AFFIRMING THE ACTION RECOMMENDED ON THE AGENDA. THERE WILL BE NO SEPARATE DISCUSSION ON THESE ITEMS PRIOR TO VOTING UNLESS MEMBERS OF THE COUNCIL OR STAFF REQUEST SPECIFIC ITEMS TO BE REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION. 4.APPROVAL OF THE WARRANT REGISTER Comments: Lynwood Successor Agency Special Meeting - Page 1 of 16 N/A Recommendation: Staff recommends that council approve the warrant register dated December 19, 2017. 5.Modification of Affordable Housing Finance Team Comments: Earlier this year, the City/Authority entered into agreements with several firms that made up the City’s/Authority Housing Finance Team for the development of housing in the City of Lynwood and issuance of revenue bonds. (FIN) Recommendation: Staff recommends that the City Council adopt the attached resolution entitled, “A JOINT RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD, LYNWOOD HOUSING AUTHORITY, AND LYNWOOD SUCCESSOR AGENCY MODIFYING THE AFFORDABLE HOUSING FINANCE TEAM TO INCLUDE STERN BROTHERS, QUINT & TIMMING, AND HDL AS UNDERWRITER, BOND COUNSEL AND FISCAL CONSULTANT RESPECTIVELY AND AUTHORIZING THE MAYOR/CHAIR TO ENTER INTO INDIVIDUAL AGREEMENTS WITH THE NEW HOUSING FINANCE TEAM”. ADJOURNMENT CITY OF LYNWOOD AS SUCCESSOR AGENCY TO THE LYNWOOD REDEVELOPMENT AGENCY MEETINGS WILL BE POSTED AS NEEDED. THE NEXT MEETING WILL BE HELD IN THE COUNCIL CHAMBERS OF CITY HALL, 11330 BULLIS ROAD, CITY OF LYNWOOD, CALIFORNIA. Lynwood Successor Agency Special Meeting - Page 2 of 16 Agenda Item # 4. AGENDA STAFF REPORT DATE: December 19, 2017 TO: Honorable Mayor and Members of the City Council APPROVED BY: Alma K. Martinez, City Manager PREPARED BY: Jose Ometeotl, Assistant City Manager-Director of Finance Monica OChoa, Senior Accounting Technician SUBJECT: APPROVAL OF THE WARRANT REGISTER Recommendation: Staff recommends that council approve the warrant register dated December 19, 2017. Background: N/A Discussion and Analysis: N/A Fiscal Impact: N/A Coordinated With: N/A ATTACHMENTS: Description Warrant Register-Successor-12/19/17 Lynwood Successor Agency Special Meeting - Page 3 of 16 11/08/2017 Voucher List Successor Agency of the Lynwood Redevelopment Agency 1 9:57:41AM Page: vchlist Bank code : sa_usb Voucher Date Vendor Invoice PO # Description/Account Amount 5423 11/15/2017 007223 COX, CASTLE & NICHILSON LLP 451789 LEGAL SVCS-5/2017 1021.76.211.62001 11-000984 LEGAL SVCS-7/2017 11-000984 1021.76.211.62001 LEGAL SVCS-7/2017 1021.76.211.62001 LEGAL SVCS-12/2016-8/2017 1021.76.211.62001 LEGAL SVCS-8/2017 1021.76.211.62001 LEGAL SVCS-8/2017 1021.76.211.62001 2 Vouchers for bank code : sa_usb Vouchers in this report 2 1 Page: 454567 454601 455229 455784 455799 11-000984 11-000984 11-000984 11-000984 004179 TIERRA WEST ADVISORS, LLC 11/15/2017 5424 LY-0917 13,957.80 476.10 2,221.80 2,774.95 438.15 476.10 Total : 20,344.90 CONSULTING SVCS-SEPT 2017 1022.51.207.62015 11-000979 9,121.25 Total : Bank total : 29,466.15 Lynwood Successor Agency Special Meeting - Page 4 of 16 11/08/2017 Voucher List City of Lynwood 2 9:57:41AM Page: vchlist Bank code : sa_usb Voucher Date Vendor Invoice PO # Description/Account Amount 2 Page: Lynwood Successor Agency Special Meeting - Page 5 of 16 Agenda Item # 5. AGENDA STAFF REPORT DATE: December 19, 2017 TO: Honorable Mayor and Members of the City Council APPROVED BY: Alma K. Martinez, City Manager PREPARED BY: Jose Ometeotl, Assistant City Manager-Finance Director SUBJECT: Modification of Affordable Housing Finance Team Recommendation: Staff recommends that the City Council adopt the attached resolution entitled, “A JOINT RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD, LYNWOOD HOUSING AUTHORITY, AND LYNWOOD SUCCESSOR AGENCY MODIFYING THE AFFORDABLE HOUSING FINANCE TEAM TO INCLUDE STERN BROTHERS, QUINT & TIMMING, AND HDL AS UNDERWRITER, BOND COUNSEL AND FISCAL CONSULTANT RESPECTIVELY AND AUTHORIZING THE MAYOR/CHAIR TO ENTER INTO INDIVIDUAL AGREEMENTS WITH THE NEW HOUSING FINANCE TEAM”. Background: Earlier this year, the City/Authority entered into agreements with several firms that made up the City’s/Authority Housing Finance Team for the development of housing in the City of Lynwood and issuance of revenue bonds. Discussion and Analysis: The City recently received a request from the Financial Advisor and Special Counsel, to replace the Underwriter, Underwriters Counsel, Bond Counsel and Fiscal Consultant. Staff is seeking Council’s approval to replace the prior firms of Stifel, Nossaman, Nixon Peabody and Tierra West Advisors with Stern Brothers & Co., Quint & Timming, LLP, and HdL respectively. Proposals from the consultants for the newly recommended Housing Finance Team are attached. Below are highlights from the proposals received from the following consultants: Stern Brothers & Co. Serve in the role of Sole Underwriter for the City of Lynwood Housing Authority Multi-Family Housing Development, Series 2017 Revenue Bonds May provide advice concerning the structure, timing, terms, and other similar matters concerning the issuance of the Bonds Lynwood Successor Agency Special Meeting - Page 6 of 16 Primary role is to purchase the Bonds with a view of distribution in an arm’s length commercial transaction with the Issuer Duty to purchase the Bonds from the issuer with at a fair and reasonable price, but must balance that duty with their duty to sell the Bonds to investors at prices that are fair and reasonable. Review the official statement for the Bonds in accordance with, and as part of, their respective responsibilities to investors under the federal securities laws, as applied to the facts and circumstance of the transaction Quint & Timming, LLP Serve in the role of bond counsel and disclosure counsel in connection with the authorization, issuance and sale of the Bonds Prepare any required indentures, ordinances and all resolutions, notices and legal documents necessary for the proper conduct of the financing proceedings Review all financial documents for legal sufficiency Review, without undertaking an independent investigation, any official statement or other disclosure document prepared in connection with the financing proceedings to assure correctness of disclosure relating to the legal documents Prepare and provide a signature and no-litigation certificate, an arbitrage certificate and any and all other closing documents required to accompany delivery of the securities Prepare and provide a complete transcript of the proceedings necessary to accompany delivery of the securities Review the Official Statement (both preliminary and final) prepared by the City’s municipal advisor in connection with the offering of the Bonds; Confer and consult with the officers and administrative staff of the City as to matters relating to the Official Statement Attend all meetings of the City and any administrative meetings at which the Official Statement is to be discussed, deemed necessary by Attorneys for the proper exercise of their due diligence with respect to the Official Statement, or when specifically requested by the City to attend On behalf of the City, prepare the continuing disclosure certificate in a form which is acceptable to the City and the underwriter of the Bonds On behalf of the City, prepare the bond purchase agreement, if required, between the City and the underwriter of the Bonds in a form which are acceptable to the City and the underwriter of the Bonds Fiscal Impact: The New Housing Financing Team of Stern Brothers & Co., Quint & Timming, LLP, and HdL would work on a contingent basis to provide the documentation necessary to proceed with the City of Lynwood Housing Authority Multi-Family Housing Development, Series 2017 Revenues and/or the Housing Authority Low-Mod Income Housing Fund. Other participants that are necessary for bond financings, other than the one described in the following paragraph, will also provide ancillary services on a contingent basis. Therefore, they will also only be compensated from the bond issuance once it closes. Coordinated With: City Manager's Office City Attorney ATTACHMENTS: Description Resolution Stern_Proposal Proposal_Quint Lynwood Successor Agency Special Meeting - Page 7 of 16 1 RESOLUTION NO.___________ A JOINT RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD, LYNWOOD HOUSING AUTHORITY, AND LYNWOOD SUCCESSOR AGENCY MODIFYING THE AFFORDABLE HOUSING FINANCE TEAM TO INCLUDE STERN BROTHERS, QUINT & TIMMING, AND HDL RESPECTIVELY AND AUTHORIZING THE MAYOR/CHAIR TO ENTER INTO INDIVIDUAL AGREEMENTS WITH THE NEW HOUSING FINANCE TEAM WHEREAS, earlier this year, the City/Authority entered into agreements with several firms that made up the City’s/Authority Housing Finance Team for the development of housing in the City of Lynwood and issuance of revenue bonds; and WHEREAS, the City recently received a request from the Financial Advisor and Special Counsel, to replace the Underwriter, Underwriters Counsel, Bond Counsel and Fiscal Consultant; and WHEREAS, staff is seeking Council’s approval to replace the prior firms of Stifel, Nossaman, Nixon Peabody and Tierra West Advisors with Stern Brothers & Co., Quint & Timming, LLP, and HdL respectively. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD AND LYNWOOD HOUSING AUTHORITY DOES HEREBY FIND, ORDER, AND RESOLVE AS FOLLOWS: Section 1. The City Council and Authority hereby appoints the firm of Stern Brothers & Co., Quint & Timming, LLP, and HdL as the new Housing Finance Team. The City Council hereby authorizes the City Manager/Executive Director to execute and deliver an agreement with said firms for their respective services. Payment of fees and expenses with respect to such agreements shall be contingent upon the issuance of the Obligations. Section 2. The officers and staff of the City are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents, which in consultation with City Attorney and bond counsel, they may deem necessary or advisable in order to effectuate the purposes of this Resolution, and any and all such actions previously taken by such Officers or staff members are hereby ratified and confirmed. Section 3. This Resolution shall take effect upon adoption. PASSED, APPROVED AND ADOPTED this 19th day of December, 2017. Lynwood Successor Agency Special Meeting - Page 8 of 16 2 _________________________ Jose Luis Solache Mayor/Chair ATTEST: ________________________ __________________________ Maria Quinonez Alma K. Martinez City Clerk/Authority Secretary City Manager/Executive Director APPROVED AS TO FORM: APPROVED AS TO CONTENT: ________________________ __________________________ Noel Tapia Jose Ometeotl City Attorney/Authority Counsel Assistant City Manager-Finance Director Lynwood Successor Agency Special Meeting - Page 9 of 16 14724 Ventura Blvd, SUITE 809 | Sherman Oaks, CA 91403 (818) 906-4452 | FAX (818) 906-4456 WWW.STERNBROTHERS.COM Member SIPC Via E-Mail to: amartinez@lynwood.ca.us jometeotl@lynwood.ca.us December 12, 2017 Ms. Alma Martinez City Manager Mr. Jose E. Ometoeotl Finance Director City of Lynwood 11330 Bullis Road Lynwood, CA 90262 Re: City of Lynwood Housing Authority Multi-Family Housing Development, Series 2017 Revenue Bonds; Disclosures by Senior Managing Underwriter Pursuant to MSRB Rule G-17 ____________________________________________________________________________ Dear Ms. Martinez and Mr. Ometoeotl, We are writing to provide you as City Manager and Finance Director of the City of Lynwood and the Lynwood Housing Authority, respectively (Issuer), with certain disclosures relating to the above-captioned bond issue (Bonds) as required by Municipal Securities Rulemaking Board (MSRB) Rule G-17, set forth in MSRB Notice 2012-25 (May 7, 2012).1 The Issuer has engaged Stern Brothers & Co. to serve as sole underwriter, and not as a financial advisor or municipal advisor, in connection with the issuance of the Bonds (the “Underwriter”). As part of our services as Underwriter, Stern Brothers & Co. may provide advice concerning the structure, timing, terms, and other similar matters concerning the issuance of the Bonds. I. Disclosures Concerning the Underwriter’s Role: (i) MSRB Rule G-17 requires an underwriter to deal fairly at all times with both municipal issuers and investors. (ii) The underwriter’s primary role is to purchase the Bonds with a view to distribution in an arm’s- length commercial transaction with the Issuer. The underwriter has financial and other interests that differ from those of the Issuer. 1 Interpretive Notice Concerning the Application of MSRB Rule G-17 to Underwriters of Municipal Securities (effective August 2, 2012). Lynwood Successor Agency Special Meeting - Page 10 of 16 14724 Ventura Blvd, SUITE 809 | Sherman Oaks, CA 91403 (818) 906-4452 | FAX (818) 906-4456 WWW.STERNBROTHERS.COM Member SIPC (iii) Unlike a municipal advisor, underwriters do not have a fiduciary duty to the Issuer under the federal securities laws and are, therefore, not required by federal law to act in the best interests of the Issuer without regard to their own financial or other interests. (iv) The Underwriter has a duty to purchase the Bonds from the Issuer at a fair and reasonable price, but must balance that duty with their duty to sell the Bonds to investors at prices that are fair and reasonable. (v) The Underwriter will review the official statement for the Bonds in accordance with, and as part of, their respective responsibilities to investors under the federal securities laws, as applied to the facts and circumstances of this transaction.2 II. Disclosures Concerning the Underwriter’s Compensation: The Underwriter will be compensated by a fee and/or an underwriting discount that will be set forth in the bond purchase agreement to be negotiated and entered into in connection with the issuance of the Bonds. Payment or receipt of the underwriting fee or discount will be contingent on the closing of the transaction and the amount of the fee or discount may be based, in whole or in part, on a percentage of the principal amount of the Bonds. While this form of compensation is customary in the municipal securities market, it presents a conflict of interest since the Underwriter may have an incentive to recommend to the Issuer a transaction that is unnecessary or to recommend that the size of the transaction be larger than is necessary. III. Additional Conflicts Disclosures: Stern Brothers & Co. has not identified any additional potential or actual material conflicts that require disclosure. If you or any other Issuer officials have any questions or concerns about these disclosures, please make those questions or concerns known immediately to the undersigned. In addition, you should consult with the Issuer’s own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent you deem appropriate. It is our understanding that you have the authority to bind the Issuer by contract with us, and that you are not a party to any conflict of interest relating to the subject transaction. If our understanding is incorrect, please notify the undersigned immediately. We are required to seek your acknowledgement that you have received this letter. Accordingly, please send me an email to that effect or sign and return the enclosed copy of this letter to me at the address set forth below. Depending on the structure of the transaction that the Issuer decides 2 Under federal securities law, an issuer of securities has the primary responsibility for disclosure to investors. The review of the official statement by the underwriters is solely for purposes of satisfying the underwriters’ obligations under the federal securities laws and such review should not be construed by an issuer as a guarantee of the accuracy or completeness of the information in the official statement. Lynwood Successor Agency Special Meeting - Page 11 of 16 14724 Ventura Blvd, SUITE 809 | Sherman Oaks, CA 91403 (818) 906-4452 | FAX (818) 906-4456 WWW.STERNBROTHERS.COM Member SIPC to pursue, or if additional potential or actual material conflicts are identified, we may be required to send you additional disclosures regarding the material financial characteristics and risks of such transaction and/or describing those conflicts. At that time, we also will seek your acknowledgement of receipt of any such additional disclosures. We look forward to working with you and the City of Lynwood Housing Authority in connection with the issuance of the Bonds. Thank you. Sincerely, _________________ Richard DeProspo Managing Director Acknowledgement: _________________ Alma Martinez City Manager, City of Lynwood Date: ___________________ CC: Royce Jones, Kane Ballmer and Berkman, royce@kbblaw.com William Reynolds, Urban Futures, williamr@urbanfuturesinc.com Lynwood Successor Agency Special Meeting - Page 12 of 16 Agreement for Legal Services THIS AGREEMENT FOR LEGAL SERVICES is made and entered into this ______ day of _________, 2017, by and between the CITY OF LYNWOOD (the “City”), and QUINT & THIMMIG LLP, Larkspur, California (“Attorneys”). W I T N E S S E T H : WHEREAS, the City has determined that is necessary and desirable to finance the Rogel housing project (the “Bonds”); WHEREAS, the City requires the services of bond counsel and disclosure counsel in connection with the authorization, issuance and sale of the Bonds; WHEREAS, the City has determined that Attorneys are qualified by training and experience to perform the services of bond counsel and disclosure counsel, and Attorneys are willing to provide such services; and WHEREAS, the public interest, economy and general welfare will be served by this Agreement for Legal Services; NOW, THEREFORE, IT IS HEREBY AGREED, as follows: Section 1. Duties of Attorneys. A. Attorneys shall provide legal services, as bond counsel, in connection with the authorization, issuance and consummation of the financing proceedings relating to the Bonds. Such services shall include the following: (a) Consult and cooperate with officials of the City, City legal counsel, financing consultants, underwriters and other consultants, staff and employees of the City, and assisting such consultants, staff and employees in the formulation of coordinated financial and legal proceedings; (b) Attend all meetings of the City at which the financing is to be discussed, as deemed necessary by for the proper planning of the financing proceedings or when specifically requested to attend; (c) Prepare any required indentures, ordinances and all resolutions, notices and legal documents necessary for the proper conduct of the financing proceedings; Lynwood Successor Agency Special Meeting - Page 13 of 16 -2- (d) Review all financial documents for legal sufficiency; (e) Review, without undertaking an independent investigation, any official statement or other disclosure document prepared in connection with the financing proceedings to assure correctness of disclosure relating to the legal documents; (f) Prepare and provide a signature and no-litigation certificate, an arbitrage certificate and any and all other closing documents required to accompany delivery of the securities; (g) Prepare and provide a complete transcript of the proceedings necessary to accompany delivery of the securities; (h) Subject to the completion of proceedings provide a legal opinion that (if tax- exempt) the interest due with respect to the securities is excluded from gross income for purposes of federal income taxation and that such interest is exempt from California personal income taxation; (i) Subject to the completion of proceedings, provide a legal opinion approving in all regards the legality of all proceedings relating to the securities; (j) Confer and consult with the City officials and agents with regard to problems which may arise during the servicing and payment of principal of and interest on the securities; and (k) Such other and further services as are normally performed by bond counsel in connection with the issuance of securities. B. Attorneys shall provide legal services, as disclosure counsel, in connection with the preparation of the official statement to be used in connection with the offering and sale of the Bonds (the “Official Statement”), the continuing disclosure certificate and the bond purchase agreement between the City and the underwriter of the Bonds. Such services shall include the following: (a) Review the Official Statement (both preliminary and final) prepared by the City’s municipal advisor in connection with the offering of the Bonds; (b) Confer and consult with the officers and administrative staff of the City as to matters relating to the Official Statement; (c) Attend all meetings of the City and any administrative meetings at which the Official Statement is to be discussed, deemed necessary by Attorneys for the proper exercise of their due diligence with respect to the Official Statement, or when specifically requested by the City to attend; (d) On behalf of the City, prepare the continuing disclosure certificate in a form which is acceptable to the City and the underwriter of the Bonds; (e) On behalf of the City, prepare the bond purchase agreement, if required, between the City and the underwriter of the Bonds in a form which are acceptable to the City and the underwriter of the Bonds; (f) Subject to the completion of proceedings to the satisfaction of Attorneys, provide letters of Attorneys addressed to the City and the underwriter of the Bonds to the effect that, although Attorneys have not undertaken to determine independently or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement, in the course of Attorneys participation in the Lynwood Successor Agency Special Meeting - Page 14 of 16 -3- preparation of the Official Statement Attorneys have been in contact with representatives of the City and others concerning the contents of the Official Statement and related matters, and, based upon the foregoing, nothing has come to Attorneys attention to lead Attorneys to believe that the Official Statement (except for any financial or statistical data or forecasts, numbers, charts, estimates, projections, assumptions or expressions of opinion included therein, and information relating to The Depository Trust Company and its book-entry system, as to which Attorneys need express no view) as of the date of the Official Statement or the date of the closing for the Bonds contain any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Section 2. Compensation. (a) For the services set forth under Section 1A. above, Attorneys shall be paid a legal fee computed as follows, inclusive of all out-of-pocket expenses: 1.5% of the principal issue amount up to $1,000,000. 0.5% of the principal issue amount between $1,000,001 and $6,000,000. 0.25% of the principal issue amount between $6,000,001 and $21,000,000. 0.125% of the principal issue amount over $21,000,000. (b) For the services set forth under Section 1B, Attorneys shall be paid a fee for each issue of $40,000, inclusive of all out-of-pocket expenses. Payment of said fees shall be entirely contingent, shall be due and payable upon the delivery of the Bonds and shall be payable solely from the proceeds of the Bonds and from no other funds of the City. Section 3. Exceptions. Any services rendered in any litigation (other than validation proceedings deemed necessary by Attorneys) involving the City or the financing proceedings relating to the Bonds are excepted from the services to be rendered for the above compensation. On-going advice and preparation of necessary documentation regarding: (a) compliance with section 148 of the Internal Revenue Code of 1986, relating to arbitrage limitations and rebate provisions, or (b) the continuing disclosure requirements of the Bonds and Exchange Commission, are also excepted from the services to be rendered for the above compensation. For such services which Attorneys are directed to render for and on behalf of the City, compensation shall be on the basis of reasonable fees to be agreed upon by the City and Attorneys. Section 4. Termination of Agreement. This Agreement for Legal Services may be terminated at any time by the City, with or without cause, upon written notice to Attorneys. In the event of such termination, all finished and unfinished documents shall, at the option of the City, become its property and shall be delivered by Attorneys to the City. Lynwood Successor Agency Special Meeting - Page 15 of 16 -4- IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed by their respective officers thereunto duly authorized as of the day and year first above written. CITY OF LYNWOOD By Name Title QUINT & THIMMIG LLP By Brian D. Quint, Partner Lynwood Successor Agency Special Meeting - Page 16 of 16