HomeMy WebLinkAboutRes2008-072Sponsored by: Oates
CITY OF SEWARD, ALASKA
RESOLUTION 2008-072
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, APPROVING A CONTRACT WITH RBC CAPITAL
MARKETS TO PROVIDE UNDERWRITER SERVICES FOR THE SALE
OF BONDS FOR THE PRISON EXPANSION PROJECT, AND
APPROPRIATING FUNDS FROM BOND PROCEEDS
WHEREAS, the City of Seward and the State of Alaska developed a request for
proposals for underwriting services for the pending sale of approximately $22.7 million in
bonds for the prison expansion project; and
WHEREAS, there were four responsive and qualified proposals received, and
proposals were scored on the basis of four basic criteria, with bid price being assigned 20% of
the overall points available; and
WHEREAS, a review committee scored the proposals and awarded the highest score to
RBC Capital Markets ("RBC"), and RBC also proposed the lowest overall price for
underwriting services; and
WHEREAS, the payment for underwriting services is entirely contingent on the
project moving forward and bonds being issued, such that if bonds are not issued, the
underwriting will not be reimbursed for their costs, but if bonds are issued, the cost for
underwriting services will be reimbursed from the proceeds of the bonds.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD, ALASKA, that:
Section 1. The City Council hereby authorizes the city manager to enter into a contract
with RBC Capital Markets to provide underwriting services to the City of Seward for the
issuance of approximately $22.7 million in lease revenue bonds for the purpose of prison
expansion.
Section 2. Funding in an amount not to exceed $136,300 is hereby appropriated from
the proceeds of lease revenue bonds, with payment to the underwriter contingent on Seward
City Council approval of the issuance of approximately $22.7 million in lease revenue bonds,
and contingent on the actual issuance of said bonds.
Section 3. This resolution shall take effect immediately upon adoption.
PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this
28th day of July, 2008.
CITY OF SEWARD, ALASKA
RESOLUTION 2008-072
THE CITY OF SEWARD, ALASKA
Clark Corbridge, Mayor
AYES: Dunham, Valdatta, Amberg, Smith, Kellar, Corbridge
NOES: None
ABSENT: Bardarson
ABSTAIN: None
ATTEST:
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Johanna Dollerhide, CMC
Acting City Clerk
(City Seal)
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Council Agenda Statement
Meeting Date: July 28, 2008
Through: Phillip Oates, City Manager
From: Kristin Erchinger, Finance Director
Agenda Item: Approval of Contract for Underwriter Services for Prison Bond Issue
BACKGROUND & JUSTIFICATION:
The City of Seward received four proposals from firms desiring to provide underwriter services for the pending
sale of bonds for the prison expansion project. Proposals were received from Stone & Youngberg, Seattle
Northwest Securities, Citigroup Global Markets, and RBC Capital Markets. All respondent proposals were found
to be responsive and qualified. One additional firm declined to submit a proposal based on the small size of the
anticipated bond issue (approx. $22.7 million).
The proposals were reviewed by a committee of three, including: Don Grimes, ftnancial advisor for the City of
Seward; Deven Mitchell, Executive Director of the State of Alaska Municipal Bond Bank Authority; and Kristin
Erchinger, finance director. The review committee reviewed and scored the proposals on four basic criteria: 1)
financing plan and marketing proposal - 30%; 2) firm's understanding of the State credit and authorizing statutes
- 30%; 3) qualification of team members assigned to perform engagement - 20%; and 4) fees for services - 20%.
After scoring the proposals, RBC Capital Markets received the highest score, and they also offered the lowest total
fee for their services. The table below summarizes the scoring of proposals:
Firm Criteria 1 Criteria 2 Criteria 3 Criteria 4 Total
RBC 30 27 19 20 96
Citi rou 25 20 16 15.3 76.3
SNW 20 20 15 14 69
Stone & Youn . 15 15 12 15.4 57.4
The total fee for underwriter services, including attorney fees and out-of-pocket costs, is estimated at $113,545.
This fee will be based on the final size of the bond issue, and will equate to $5.002 per $1,000 bond. Therefore,
we have provided a contingency of 20% to cover increases in the project cost based on CPI adjustments (as
allowed for in the enabling State legislation), bringing the total authorization to $136,300.
CONSISTENCY CHECKLIST: Where applicable, this agenda statement is consistent with the Seward City
Code, Charter, Comprehensive Plans, Land Use Plans, Strategic Plan and City Council Rules of Procedures.
Other:
FISCAL NOTE:
The total cost for underwriter services will be reimbursable from the proceeds of the bonds. The payment for
underwriter services is entirely contingent on the project moving forward, which means that if the prison
expansion project does not proceed, the 'ty will not reimburse the underwriter for their costs incurred in
providing services for this bond issue.
RECOMMENDATION:
Approve Resolution 2008-~ awarding a contract for underwriter services to the firm of RBC Capital Markets,
for an amount not-to-exceed $136,300, and appropriating funds.
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