Report to Mayor and City Council
Tuesday, April 02, 2024
Consent
SUBJECT:
Title
CONSIDER SELECTION AND AWARD OF A PROFESSIONAL SERVICES AGREEMENT FOR UNDERWRITING SERVICES RELATED TO LEASE REVENUE BONDS, SERIES 2024, FOR THE CITY OF CARSON (CITY COUNCIL)
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I. SUMMARY
This item transmits a recommendation for the City Council to approve a selection and award of a professional services agreement for underwriting services related to lease revenue bonds, series 2024, for the City of Carson.
Staff recommends the City Council approve the proposed professional services agreement (Exhibit 1) between the City of Carson and Samuel A. Ramirez & Company, Inc. for a total not to exceed amount of $500,000.00 over two years.
Should the City Council approve this item, staff anticipates a minimum lead time of 90 days for the funds to be received by the City of Carson.
The purpose of this item is only for the selection and award of the firm that will provide the professional underwriting services to the City of Carson for lease revenue bonds, series 2024.
A subsequent item and public hearing will be introduced for City Council consideration at the time of bond issuance, which is anticipated in May or June 2024.
II. RECOMMENDATION
Recommendation
1. AWARD a two-year professional services contract to Samuel A. Ramirez & Company, Inc. at a discount (fee) of $5.00/bond of the total amount of bonds sold (bonds are sold in $1,000 denominations) for an anticipated not-to-exceed amount of $500,000.00.
2. AUTHORIZE the Mayor to execute the contract after approval as to form by the City Attorney.
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III. ALTERNATIVES
TAKE another action deemed appropriate by City Council that is consistent with applicable laws.
IV. BACKGROUND
Selection Process
Staff initiated a formal Request for Qualifications process on March 8, 2024, and received bids from five firms to provide underwriting services for lease revenue bonds, Series 2024. The bids were reviewed by a panel of staff from the Finance Department and the City Manager’s Office. The panel scored the firms and identified Samuel A. Ramirez & Company, Inc. as being a top candidate based on their experience and qualifications.
The firms that provided bids are listed below in alphabetical order:
• Hilltop Securities, Inc.
• Piper Sandler & Co.
• Samuel A. Ramirez & Company, Inc.
• Raymond James & Associates, Inc.
• Stifel
All underwriting fees will be paid at a rate of $5.00/bond based on the total amount of bonds sold for a total not to exceed $500,000.00 over two years (bonds are sold in $1,000 denominations), comprised of underwriting expenses, takedown, and a management fee, and will be paid to the consultant in the form of an underwriting discount set forth in the Bond Purchase Agreement to be later entered into between City and consultant where payment will be taken and made directly from bond proceeds upon closing and not directly by the City. All fees are contingent on the successful closing of the sales transaction and no hourly rates are applied.
Procurement Standard
Carson Municipal Code Section 2611(c) provides that the procurement of professional services shall be based on demonstrated competence, the professional qualifications necessary for satisfactory performance of the required services, and a fair and reasonable price, after notice to a number of potential offerors adequate to permit reasonable competition consistent with the nature and requirements of the procurement. The proposed underwriting services for the lease revenue bonds involves specialized professional services, so any award is required to be made in accordance with Section 2611(c). Award of the contract to Ramirez & Co. is consistent with this procurement standard.
V. FISCAL IMPACT
The fees for all services are paid from bond proceeds.
VI. EXHIBITS
1. Agreement with Samuel A. Ramirez & Company, Inc. for underwriting services (pgs. 4 - 28)
Prepared by: Michael George, Assistant to the City Manager and William Jefferson, Finance Director