Resolution No. 81341 RESOLUTION NO. 8134
2
3 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION OF
4 AN ADDENDUM TO AGREEMENT DATED MAY 2, 200.2 BY AND
5 BETWEEN THE CITY OF VERNON AND BOND LOGISTIX LLC
REGARDING THE MALBURG GENERATING STATION PROJECT
6
7 WHEREAS, on May 8, 2002, the City Council of the City of
8 Vernon adopted Resolution No. 7964 approving and authorizing the
9 execution of a Letter Agreement with Bond Logistix LLC ("BLX"), a
10 wholly -owned subsidiary of Orrick, Herrington & Sutcliffe LLP, for
11 investment advisory services for (1) the proceeds of the Malburg
12 Generating Station Project Electric System Revenue Bonds ("Malburg
13 Project Bonds"); and (2) the surplus funds of the Light and Power Fund;
14 and
15 WHEREAS, the City's Malburg Project Bonds financing has
16 become more complex, and it needs the services of an advisor to
17 provide bonds and interest rate swap pricing services; and
18 WHEREAS, City staff have proposed adding forward bond swap
19 provider services to the scope of services provided by BLX pursuant to
20 the Letter Agreement dated May 2, 2002; and
21 WHEREAS, on January 21, 2003, the Finance Committee
22 recommended that the City Council approve the recommendation of Bruce
23 V. Malkenhorst, Director of Finance, dated January 16, 2003, that the
24 City enter into an Addendum to Agreement dated May 2, 2002, with BLX
25 to expand the existing scope of services to include bonds and interest
26 rate swap pricing services respecting the Malburg Project Bonds.
27 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
28 CITY OF VERNON AS FOLLOWS:
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SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the recitals contained hereinabove are true
and correct.
SECTION 2: The City Council of the City of Vernon hereby
approves the Addendum to Agreement dated May 2, 2002, with BLX, a copy
of which is attached hereto as Exhibit "A" and made a part hereof.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the Mayor and the City Clerk to execute said Addendum for,
and on behalf of, the City of Vernon.
SECTION 4: The City Council of the City of Vernon hereby
authorizes the City Administrator to use the services of BLX, pursuant
to said Addendum, on behalf of the City of Vernon, for whatever City
bond or debt financial structuring and pricing services the City
Administrator deems appropriate.
SECTION 5: The City Council of the City of Vernon hereby
directs the City Clerk, or his designee, to send one fully executed
Addendum to:
Bond Logistix LLC
Attn. A. Craig Underwood, President
777 S. Figueroa St., Suite 3200
Los Angeles, CA 90017
SECTION 6: The City Clerk of the City of Vernon shall
certify to the passage of this resolution, and thereupon and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 22°d day of January, 2003.
ATTEST:
BRUCE V. MALKENHORST, City Clerk
EONIS C. MALB RG, May r
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STATE OF CALIFORNIA )
ss
COUNTY OF LOS ANGELES }
I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being"Resolution No.
8134, was duly adopted by the City Council of the City of Vernon at an
adjourned regular meeting of the City Council duly held on Wednesday,
January 22, 2003, and thereafter was duly signed by the Mayor of the
City of Vernon.
(SEAL)
BRUCE V. MALKENHORST, City Clerk
- 3 -
EXHIBIT
BOND LOG ISTIXL«
INSIGHT. INNOVATION INTEGRATION
777 South Figueroa Street. Suite 3200
Los Angeles. CA 90017
Phone 213 612 2200 Fax 213 612 2499
www.bondlogistix.com
ADDENDUM TO AGREEMENT DATED MAY 2, 2002
Re: City of Vernon
Electric System Revenue Bonds
2002 Variable Rate Demand Series A
Bonds and Interest Rate Swap Pricing Services
This Addendum ("Addendum') is a supplement to the Letter Agreement (the "Agreement') dated May 2,
2002, between the City of Vernon (the "City') and Bond Logistix LLC ("BLX'). To the extent not inconsistent
with the provisions set forth below, all terms and conditions of the Agreement will continue will in full force and
effect and apply to the terms and the conditions of the Addendum.
Pursuant to the terms of this Addendum, the City hereby engages BLX to perform the services set forth
below in connection with the issuance of the above -referenced bonds (the `Bonds') and the execution by the City
of an interest rate swap agreement (the "Swap'):
Scope of Services:
(i) BLX will review the Bonds and the Swap pricing proposals prepared for the City by its selected
Underwriter.
(ii) BLX will participate in conference calls and other meetings relating to the pricing of the Bonds
and the Swap.
(iii) BLX will solicit preliminary pricing indications on the Bonds and the Swap from municipal
broker -dealers and interest rate swap providers.
(iv) BLX will research and document the prices of comparable bond issues and interest rate swaps
using independent data sources available to the public.
(v) Upon the final pricing of the Bonds and the Swap, BLX will provide the City with a report
detailing its findings and research comparing the pricing of the Bonds and the Swap to the information
gathered by BLX.
Compensation:
BLX will be paid a fee of $45,000 for the services provided hereunder. Such fee shall be payable by the
City within twenty-five days of the closing date of the Bonds.
ACCEPTED AND AGREED:
CITY OF VERNON Very Truly Yours,
By:
LEONIS C. MALBURG, Mayor
Dated:
ATTEST:
By:
BRUCE V. MALKENHORST, City Clerk
D A L L A S L O S A N G E L E S
BOND LOGISM LLC
By: )
X. Craig 91derwoof,
I residen
APPROVED AS 0 FORM:
By:
EDUARDO OLIVO, City Attornep.[
N E W Y 0 R K S A N Y R A N C I S C 0
SUPPORTING
DOCUMENTS
CITY COUNCIL
LEONIS C. MALBURG
Mayor
THOMAS A. YBARRA
Mayor Pro—Tem
WM. 'BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL MCCORMICK
Councilman
BRUCE V. MALKENHORST
City Administrator/City Clerk
FAX (323) 826-1438
t
January 15,
IV
CITY HALL
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (323) 583-8811
2003
Mr. Bruce V. Malkenhorst
City Administrator
City Of Vernon
4305 Santa Fe Avenue
Vernon, California 90058
EDUARDO OLIVO
City Attorney
FAX: (562) 869-1883
KEVIN WILSON
Director of Community Services & Water
FAX: (323) 826-1435
KENNETH J. DeDARIO
Director of Utilities
FAX: (323) 826-1425
STEVEN E. PARKER
Fire Chief
FAX: (323) 826-1407
BRUCE W. OLSON
Police Chief
FAX: (323) 826-1481
Re: Malburg Generating Station Project Bond Financing: Addendum
to BLX-Bond Logistix Contract
Dear Bruce:
I recommend the attached Addendum to Agreement with Bond
Logistix LLC ("BLX"), to provide bond and interest rate swap
pricing, which expands their existing scope of services at an
additional cost of $45,000.
Currently, the City has contracted with BLX to provide
investment advisory services to the City for the proceeds of the
bonds and the surplus funds of the Light & Power Fund. The
City's bond financing has grown more complex and uses Bank of
America in three different roles —underwriting, letter of credit
provider and forward bond swap provider. Traditionally, the
City would retain the services of a financial advisor to verify
Bank of America's pricing, at a cost of approximately $100,000
to $150, 000.
However, the City doesn't need that level of services, since the
financing is already structured and the ratings are in place.
Mr. Bruce V. Malkenhorst
January 15, 2003
Page 2
Therefore, I recommend using BLX for this role at a
substantially reduced price.
I look forward to discussing these matters with you at your
earliest convenience.
Sincerely,
Eric Fresch
Finance Administrator
EF:j1
Enclosure
cc: Kenneth J. DeDario, Director of Utilities
Eduardo Olivo, City Attorney
CITY COUNCIL
LEONIS C. MALBURG
Mayor
THOMAS A. YBARRA
Mayor Pro-Tem
WM. 'BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL MCCORMICK
Councilman
BRUCE V. MALKENHORST
City Administrator/City Clerk
FAX (323) 826-1438
CITY HALL
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (323) 583-8811
February 5, 2003
Bond Logistix LLC
Attn: A. Craig Underwood, President
777 S. Figueroa St., Suite 3200
Los Angeles, CA 90017
Re: Addendum to Agreement, dated May 2, 2002
Dear Mr. Underwood:
EDUARDO OLIVO
City Attorney
FAX: (562) 869-1883
KEVIN WILSON
Director of Community Services & Water
FAX: (323) 826-1435
KENNETH J. DeDARIO
Director of Utilities
FAX: (323) 826-1425
STEVEN E. PARKER
Fire Chief
FAX: (323) 826-1407
BRUCE W. OLSON
Police Chief
FAX: (323) 826-1481
Transmitted herewith is a duplicate original copy of the above
referenced addendum approved by the Vernon City Council on January 22,
2003.
If you have any questions regarding this matter, please call Mr. Eric
Fresch at (323) 583-8811 ext. 175.
Very truly yours,
Nelly Giron
Assistant to the
Chief Deputy City Clerk
NG/gm
CC: Eric Fresch
Resolution No. 8134
Agreement No. 03-010
777 South Figueroa Street, Suite 32M
4", B N oy 1 S F € X Los Angeles, CA 90017
�Qt E'f 13 t�;
1M.1$Q53F, aststtexATr.O tx, rHT.1 It Al sasx.- Phone 213 612 2200 Fax 213 612 2499
www.t>ondlogistix.com
ADDENDUM TO AGREEMENT DATED MAY 2, 2002
Re: City of Vernon
Electric System Revenue Bonds
2002 Variable Rate Demand Series A
Bonds and Interest Rate Swap Pricing Services
This Addendum ("Addendum') is a supplement to the Letter Agreement (the "Agreement') dated May 2,
2002, between the City of Vernon (the "City') and Bond Logistix LLC (`BL)C). To the extent not inconsistent
with the provisions set forth below, all terms and conditions of the Agreement will continue will in full force and
effect and apply to the terms and the conditions of the Addendum.
Pursuant to the terms of this Addendum, the City hereby engages BLX to perform the services set forth
below in connection with the issuance of the above -referenced bonds (the "Bonds') and the execution by the City
of an interest rate swap agreement (the "Swap'):
Scope of Services:
(i) BLX will review the Bonds and the Swap pricing proposals prepared for the City by its selected
Underwriter.
(u) BLX will participate in conference calls and other meetings relating to the pricing of the Bonds
and the Swap.
(iii) BLX will solicit preliminary pricing indications on the Bonds and the Swap from municipal
broker -dealers and interest rate swap providers.
(iv) BLX will research and document the prices of comparable bond issues and interest rate swaps
using independent data sources available to the public.
(v) Upon the final pricing of the Bonds and the Swap, BLX will provide the City with a report
detailing its findings and research comparing the pricing of the Bonds and the Swap to the information
gathered by BLX.
Compensation:
BLX will be paid a fee of $45,000 for the services provided hereunder. Such fee shall be payable by the
City within twenty-five days of the closing date of the Bonds.
Very Truly Yours,
BOND LOGISTIX LLC
By:
A. Craig Underwood
President
€tALLAS LESS ANGELES NEW YORK SAN FRANCiSCO
ADDENDUM TO AGREEMENT DATED MAY 2, 2002
Re: City of Vernon
Electric System Revenue Bonds
2002 Variable Rate Demand Series A
Bonds and Interest Rate Swap Pricing Services
This Addendum ("Addendum") is a supplement to the Letter Agreement (the "Agreement") dated
May 2, 2002, between the City of Vernon (the "City") and Bond Logistix LLC ("BLX"). To the extent not
inconsistent with the provisions set forth below; all terms and conditions of the Agreement will continue will
in full force and effect and apply to the terms and the conditions of the Addendum.
Pursuant to the terms of this Addendum, the City hereby engages BLX to perform the services set
forth below in connection with the issuance of the above -referenced bonds (the "Bonds") and the execution
by the City of an interest rate swap agreement (the "Swap"):
Scope of Services:
(i) BLX will review the Bonds and the Swap pricing proposals prepared for the City by its
selected Underwriter.
(ii) BLX will participate in conference calls and other meetings relating to the pricing of the
Bonds and the Swap.
(iii) BLX will solicit preliminary pricing indications on the Bonds and the Swap from municipal
broker -dealers and interest rate swap providers.
(iv) BLX will research and document the prices of comparable bond issues and interest rate
swaps using independent data sources available to the public.
(v) Upon the final pricing of the Bonds and the Swap, BLX will provide the City with a report
detailing its findings and research comparing the pricing of the Bonds and the Swap to the
information gathered by BLX.
Compensation:
BLX will be paid a fee of $45,000 for the services provided hereunder. Such fee shall be payable by
the City within twenty-five days of the closing date of the Bonds.
Very Truly Yours,
BOND LOGISTIX LLC
By:
A. Craig Underwood
President
C:\Documents and Settings\acu\My Documents\DOCSLAI-#437659-vI-Draft_-_Addendum_to_Agreement_dated_May_2_2002-DOC
BOND LOGISTILLC
INSIGHT. INNOVATION. INTEGRATION.
777 South Figueroa Street, Suite 3200
Los Angeles, CA 90017
Phone 213 612 2200 Fax 213 612 2499
www.bondlogistix.com
ADDENDUM TO AGREEMENT DATED MAY 2, 2002
Re: City of Vernon
Electric System Revenue Bonds
2002 Variable Rate Demand Series A
Bonds and Interest Rate Swap Pricing* Services
This Addendum ("Addendum") is a supplement to the Letter Agreement (the "Agreement") dated May 2,
2002, between the City of Vernon (the "City') and Bond Logistix LLC CBLX'). To the extent not inconsistent
with the provisions set forth below, all terms and conditions of the Agreement will continue will in full force and
effect and apply to the terms and the conditions of the Addendum.
Pursuant to the terms of this Addendum, the City hereby engages BLX to perform the services set forth
below in connection with the issuance of the above -referenced bonds (the `Bonds') and the execution by the City
of an interest rate swap agreement (the "Swap'):
Scope of Services:
(i) BLX will review the Bonds and the Swap pricing proposals prepared for the City by its selected
Underwriter.
(ii) BLX will participate in conference calls and other meetings relating to the pricing of the Bonds
and the Swap.
(m) BLX will solicit preliminary pricing indications on the Bonds and the Swap from municipal
broker -dealers and interest rate swap providers.
(iv) BLX will research and document the prices of comparable bond issues and interest rate swaps
using independent data sources available to the public.
(v) Upon the final pricing of the Bonds and the Swap, BLX will provide the City with a report
detailing its findings and research comparing the pricing of the Bonds and the Swap to the information
gathered by BLX.
Compensation:
BLX will be paid a fee of $45,000 for the services provided hereunder. Such fee shall be payable by the
City within twenty-five days of the closing date of the Bonds.
ACCEPTED AND AGREED:
CITY OF VERNON
By: t
L�ONIS C. MALBUR(% Mayor r
Dated.
ATTEST
By.
BRUCE V. MALKENHORST, City Clerk
By;
Very Truly Yours,
BOND LOGISTIX LLC
By:
-EDVARDO OLIVO, City Forney —
D A L L A S L 0 S A N G E L E S NEW YORK SAN FRANCISCO
CITY COUNCIL
LEONIS C. MALBURG
Mayor
THOMAS A. YBARRA
Mayor Pro —Tern
WM. 'BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL MCCORMICK
Councilman
BRUCE V. MALKENHORST
City Administrator/City Clerk
FAX (323) 826-1438
Finance Committee
City of Vernon
EDUARDO OLIVO
City Attorney
FAX: (562) 869-1883
KEVIN WILSON
Director of Community Services & Water
FAX: (323) 826-1435
KENNETH J. DeDARIO
Director of Utilities
FAX: (323) 826-1425
STEVEN E. PARKER
Fire Chief
FAX: (323) 826-1407
CITY HALL BRUCE W. OLSON
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 Police Chief
TELEPHONE (323) 583-8811 FAX: (323) 826-1481
January 16, 2003 \
lz/
CSC \"vim � ��O
Honorable Members: ♦ n/
Staff is recommending that an Addendum to the existing Agreement with
Bond Logistix LLC (BLX) be approved to provide bond and interest rate
swap pricing, which expands their existing scope of services at an
additional cost of $45,000.00. The City has a contract with BLX to
provide investment advisory services to the City for the proceeds of
the bonds and the surplus funds of the Light & Power fund. The City
currently uses Bank of America for underwriting, letter of credit
provider, and forward bond swap provider. If the City were to retain
the services of a financial advisor to verify Bank of America's
pricing it would be at a cost of approximately $100,000.00 to
$150,000.00. Furthermore, the City does not need that level of
services, since the financing is already structured and the ratings
are in place; therefore, it will be cost-effective to utilize BLX to
provide the requested services.
This has been reviewed by the Finance Administrator and it is hereby
recommended that the Addendum to the existing Agreement with Bond
Logistix LLC be approved and executed to provide bond interest rate
swap pricing at an additional cost of $45,000.00.
Very truly yours,
Bruce V. Malkenhorst
Director of Finance
BVM/gm