CITY OF SANGER REQUEST FOR PROPOSALS For UNDERWRITING SERVICES. Deborah Sultan Finance Director City of Sanger th Street Sanger, CA 93657

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1 CITY OF SANGER REQUEST FOR PROPOSALS For UNDERWRITING SERVICES Deborah Sultan Finance Director City of Sanger th Street Sanger, CA 93657

2 INTRODUCTION General Information CITY OF SANGER REQUEST FOR PROPOSALS UNDERWRITING SERVICES The City of Sanger is requesting proposals from firms wishing to serve as underwriters in connection with the proposed refunding of the Sanger Public Financing Authority Lease Revenue Refunding Bond (Wastewater Treatment Facilities) Series 2006A The Lease Revenue Refunding Bond (Wastewater Treatment Facilities) Series 2006A was issued on December 1, 2006 to refund all of the Authority s Variable Rate Revenue Bond 2002 Series A and to fund a debt service reserve fund for the bond. The City s most recent debt issuance was a Sanger Financing Authority Series 2013, Lease Revenue Bond, Water Revenue Bond and a Subordinate Wastewater Revenue Bond at which time the rating on the City s Wastewater Revenue Bond Series 2006 was upgraded to A by Standard and Poors. The proposal must be received no later than 4:00 P.M. on April 9, Only electronic submissions will be accepted. Please submit proposal as a single pdf file to Deborah Sultan, Finance Director at dsultan@ci.sanger.ca.us. The City reserves the right to reject any or all proposals submitted. During the evaluation process, the City of Sanger reserves the right, where it may serve the City s best interest, to request additional information or clarification from proposers, or to allow corrections of errors or omissions. At the discretion of the City of Sanger, firms submitting proposals may be requested to make oral presentations as part of the evaluation process. The City reserves the right to retain all proposals submitted and to use any idea(s) in a proposal regardless of whether that proposal is selected. Submission of a proposal indicates acceptance by the firm of the conditions contained in the request for proposals, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the City of Sanger and the firm selected. Background Information The City of Sanger is located in Fresno County, approximately 15 miles southeast of the City of Fresno and services an area of about 5 square miles with a population of about 25,684. The City s fiscal year begins on July 1 and ends on June 30. The City of Sanger was incorporated in 1911 as a general law city which operates under the council/manager form of government. The city government is divided into eight departments: City Administration, Public Works, Police, Fire and Emergency Medical Services, Development Services, City Clerk and Personnel, and Administrative Services. The City operates and maintains the water, sewer, disposal, and storm drainage systems. The City also provides police, fire and paramedic services.

3 The City of Sanger General Fund operating budget in FY is approximately $11.6 million and the budget for all funds combined is approximately $36 million. General Conditions The City reserves the right to withdraw this RFP at any time without prior notice and to reject any and all proposals submitted without indicating any reasons. Proposals may, at the City s option, be rejected if they contain any alterations, additions, conditional or alternatives, are incomplete, or contain erasures or irregularities of any kind. The City reserves the right to reject any and all proposals. The City expressly reserves the right to postpone submittal opening for its convenience and to reject any and all submittals responding to this RFP. All responses to this RFP shall become the property of the City of Sanger and will be retained or disposed of accordingly. No amendments, additions or alternates shall be accepted after the submission date and time. Acceptance by the City of any proposal submitted pursuant to this RFP shall not constitute any implied intent to enter into a contract for services. The City reserves the right to issue a written notice to all participating firms of any change in the proposal submission schedule should the City determine, in its sole discretion, that such changes are necessary. SCOPE OF REQUIRED SERVICES The scope of services to be provided by the successful proposer or proposers is expected it include, but not limited to, the following: Provide review and comment on all documents related to the financing. Identify, evaluate, and explain the benefits and risks of alternative financing structures. Optimize the overall debt structure while maintaining future flexibility. Work with rating agencies to seek the highest possible credit ratings for the proposed bond. Assist the financing team to assess the benefits of credit enhancement for the bonds. Assist the financing team regarding the timing, sizing and structure of the bond issue. Develop marketing plan which will result in the most favorable terms for the bonds. Market the bonds in a manner designed to achieve the lowest possible borrowing costs. Provide assistance in closing the bond issue. In addition, the City expects the Underwriter, as part of their responsibilities to investors under the Federal securities laws, to conduct such review as necessary to attain a reasonable basis for belief in the accuracy and completeness of the key representations in the Official Statement.

4 REQUIRED PROPOSAL ELEMENTS In developing a response to this request for proposals, proposers should be concise, limiting their response to the specific questions and requirements set forth herein. The proposal shall be limited to 15 one-sided pages using a minimum 11 point font size (excluding a maximum two-page cover letter and requested transaction lists). As an aid to evaluation, the proposal should respond to each question or requirement in consecutive order, as follows: Cover letter: Each response should include a cover letter no longer than two pages (will not count against the 15-page limit). Firm Information: Provide a brief description of your firm and its experience underwriting Refunding bond and lease revenue bonds for California municipalities Provide a list in tabular form with a grand total, of all California lease revenue bond transactions in which the firm has served as senior manager since January 1, 2012, specifically identifying staff members involved and their roles. Provide a list in tabular form with a grand total, of all California lease revenue bond transactions in which the firm has served as co-manager since January 1, 2012, specifically identifying staff members involved and their roles. Qualifications and Experience of Assigned Personnel Identify the members of your firm who will be assigned to this project, and provide the name, address, telephone number and address of each. Include a brief biography of each person that specifically addresses their experience relevant to the City s proposed financing identify the responsibilities that he or she will be assigned for this engagement. Indentify the day-to-day project manager and back-up project manager for this engagement. Indicate how you will ensure the accessibility of key personnel during this engagement. Provide the name, address and telephone number for three references for California cities for whom the proposed project manager and back-up project manager have served as underwriter for lease revenue bonds, carrying out similar responsibilities to those contemplated under this RFP. Proposed 2014 Refunding Wastewater Lease Revenue Bonds. It is the City s current expectation to issued approximately $19.3 million in Lease revenue refunding bonds to refund the Lease Revenue Refunding Bond (Wastewater Treatment Facilities) Series 2006A as described in the Introduction section of this RFP. Describe how your firm would structure the 2014 refunding bond assuming traditional fixed rate bonds and level annual savings (by series) over the life of the outstanding issues. Please provide the coupons and yields as of March 25, 2014 and identify spreads to MMD on a maturity to maturity basis. Please provide comparable pricing information that supports your proposed spreads. Also, please include a Sources and Uses of Funds with a detailed breakout of all cost assumptions.

5 If you would recommend the City structure the transaction in a manner other than described above, discuss your proposed alternative(s) and the associated considerations, risks and benefits. The City s current Lease Revenue Refunding Bond Series 2006A rating was affirmed at A by Standard & Poors on October 30, Please discuss your perspective on the value of bond insurance for the proposed refunding. If you would recommend seeking bond insurance for the City s refunding, please provide a comparison of interest rates for an insured versus uninsured transaction. Please discuss the investors you would target and your firm s marketing strategy for placing the City s refunding bonds. Describe any challenge you anticipate in the marketing of the City s refunding bond in light of the State s budget and the recent bankruptcy filings by California cities. If your firm would purchase the refunding bonds on a private placement basis, please discuss the pros and cons of this approach and provide your proposed structure and interest rates. Cost Proposal Provide an estimate of your total, not to exceed, underwriting costs associated with serving as senior manager to the City on a $19.3 million issue of refunding revenue bonds. Please note that any payment to the underwriter is contingent on the closing of the bonds. In your response, please specifically include: Proposed takedown on a maturity to maturity basis Management fee, if any Expenses. In this section, clearly identify expense estimate. Underwriter s Counsel. Please identify the firm you would propose to serve as underwriter s counsel along with the primary counsel for the firm. Other Provide responses to the following questions. Response to this section will not count against the 15-page limit. Within the past 24 months, has your firm and/or any of its principals been the subject of any investigation relating to the municipal securities industry by the SEC, NASD, NYSE or any other State or Federal organization that oversees, regulates, licenses or otherwise responsible for the municipal securities industry? With the past 24 months, has your firm and/or any of its principals been involved in any litigation, arbitration, disciplinary or other actions arising from the firm s underwriting management or handling of municipal securities?

6 COMMUNICATION All questions related to this RFP should be directed to the City s Finance Director, Deborah Sultan phone: (559) , dsultan@ci.sanger.ca.us. Other communications with the City related to this RFP are prohibited until the selection process is complete. FAILURE TO ADHERE TO THIS REQUIREMENT MAY RESULT IN DISQUALIFICATION EVALUATION CRITERIA The City expects to evaluate the written proposals based on evaluation criteria including the following which is not necessarily listed in order of importance: Ability to structure and market the bonds in a manner that will result in the lowest possible cost of capital Experience on similar financing in California Relevant qualifications of key personnel assigned to the financing Accessibility of key personnel to City staff during the engagement Understanding the City s financing objectives Distribution capabilities Reasonableness of fees. CONTACT INFORMATION Written questions about this RFP may be sent by to dsultan@ci.sanger.ca.us prior to the submission deadline. Reponses will be shared by all interested responders to the RFP.