HomeMy WebLinkAboutCC Resolution 11111 (C St. Parking Structure Services; Northcross, Hill & Ach)RESOLUTION NO. 11111
A RESOLUTION AUTHORIZING AN AGREEMENT WITH
NORTHCROSS, HILL & ACH, LLC FOR FINANCIAL ADVISORY
SERVICES REQUIRED FOR THE PARKING STRUCTURE AT 3RD AND
'C' STREETS (Term of Agreement: from June 17, 2002 and ending on
December 31, 2003, for a not to Exceed sum of $40,000).
WHEREAS, the cost of providing financial advisory services is a necessary and
important tool in completing the financing for a new parking structure in downtown San
Rafael at 3`d and C streets; and
WHEREAS, the City Council has studied the options for financing the construction,
design and site acquisitions costs associated with completion of the new parking
garage; and
WHEREAS, the City of San Rafael recognizes that professional financial advisory
services are an integral component of preparing a new parking bond financings.
NOW, THEREFORE, BE IT RESOLVED THAT:
The CITY MANAGER and CITY CLERK are authorized to execute, on behalf of
the City of San Rafael, an agreement with
a copy of which is hereby attached and by this reference made a part hereof.
CRUNAL ����`
I, JEANNE M. LEONCINI, Clerk of the City of San Rafael, hereby certify that the
foregoing resolution was duly and regularly introduced and adopted at a regular meeting
of the City Council of said City held on Monday, the 17th day of June+ 20 -OZ by the
following vote, to wit:
AYES: COUNCILMEMBERS: Heller, Miller, and Phillips, Mayor Pro tem
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: Vice -Mayor Cohen and Mayor Boro
JEANNE M. LEONCINI, City Clerk
W:\Management Services- WorkFile\Finance- WorkFile\Council Material\Resolutions\2002\City\northcross hill ach reso.doc
AGREEMENT WITH NORTHCROSS, HILL & ACH, LLC FOR FINANCIAL
ADVISORY SERVICES REQUIRED FOR THE PARKING STRUCTURE
AT 3RD AND 'C' STREETS
This Agreement is made and entered into this 17th day of June 2002, by and
between the CITY OF SAN RAFAEL (hereinafter "CITY"), and Northcross, Hill & Ach,
LLC hereinafter "CONTRACTOR").
1. PROJECT COORDINATION
A. CITY. The City Manager shall be the representative of the CITY for
all purposes under this Agreement. The Assistant City Manager, Ken Nordhoff, is hereby
designated the PROJECT MANAGER for the CITY, and said PROJECT MANAGER shall
supervise all aspects of the progress and execution of this Agreement.
B. CONTRACTOR. CONTRACTOR shall assign a single PROJECT
DIRECTOR to have overall responsibility for the progress and execution of this
Agreement for CONTRACTOR. G. Craig Hill is hereby designated as the PROJECT
DIRECTOR for CONTRACTOR. Should circumstances or conditions subsequent to the
execution of this Agreement require a substitute PROJECT DIRECTOR for any reason,
the CONTRACTOR shall notify the CITY within ten (10) business days of the substitution.
2. DUTIES OF CONTRACTOR
CONTRACTOR shall perform the duties and/or provide financial advisory
services as described in Attachment " A " attached and incorporated herein.
3. DUTIES OF CITY
CITY shall cooperate with CONTRACTOR in his performance under this
agreement and shall compensate CONTRACTOR as provided herein.
4. COMPENSATION
For the full performance of the services described herein by
CONTRACTOR, CITY shall pay CONTRACTOR a not to exceed sum of $40,000,
inclusive of the cost of incidental expenses and the local business license taxes as
described in Section 20. Said sum shall only be paid when the CITY issues a parking
structure bond (or similar debt instrument). CONTRACTOR shall be paid for the
performance of services from the proceeds on a parking structure bond for the Third and
C Street facility. Payments for services will be made by PROJECT MANAGER upon
receipt of an invoice submitted by CONTRACTOR.
5. TERM OF AGREEMENT
The term of this Agreement shall commence upon the date of execution of
this agreement and shall end on December 31, 2003. The term can be extended at the
mutual agreement of both parties to a date certain.
6. TERMINATION
A. Discretionary. Either party may terminate this Agreement without
cause upon thirty days written notice mailed or personally delivered to the other party.
B. Cause. Either party may terminate this Agreement for cause upon
ten (10) days written notice mailed or personally delivered to the other party, and the
notified party's failure to cure or correct the cause of the termination notice, to the
reasonable satisfaction of the party giving such notice, within thirty (30) days of the
receipt of said notice.
C. Effect of Termination. Upon receipt of notice of termination, neither
party shall incur additional obligations under any provision of this Agreement without the
prior written consent of the other.
D. Return of Documents. Upon termination, any and all CITY
documents or materials provided to CONTRACTOR and any and all of CONTRACTOR's
documents described in paragraph 7 below, shall be delivered to CITY as soon as
possible, but not later than thirty (30) days after termination.
7. OWNERSHIP OF DOCUMENTS
The written documents and electronic data materials prepared by the
CONTRACTOR in connection with the performance of its duties under this Agreement
shall be the sole property of CITY. CITY may use said property for any purpose,
including projects not contemplated by this Agreement.
8. INSPECTION AND AUDIT
Upon reasonable notice, CONTRACTOR shall make available to CITY, or
its agent, for inspection and audit, all documents directly related to CONTRACTOR'S
performance of its duties under this Agreement. CONTRACTOR shall fully cooperate
with CITY or its agent in any such audit or inspection.
9. ASSIGNABILITY
The parties agree that they shall not assign or transfer any interest in this
Agreement nor the performance of any of their respective obligations hereunder, without
the prior written consent of the other party, and any attempt to so assign this Agreement
or any rights, duties or obligations arising hereunder shall be void and of no effect.
Page 2
10. INSURANCE
A. During the term of this Agreement, CONTRACTOR shall maintain, at no
expense to CITY, the following insurance policies:
1. A comprehensive general liability insurance policy in the
minimum amount of one million ($1,000,000) dollars per occurrence for death, bodily
injury, personal injury, or property damage;
2. An automobile liability (owned, non -owned, and hired
vehicles) insurance policy in the minimum amount of one million ($1,000,000) dollars per
occurrence;
B. The insurance coverage required of the CONTRACTOR by section
11. A., shall also meet the following requirements:
1. The insurance shall be primary with respect to any insurance
or coverage maintained by CITY and shall not call upon CITY's insurance or coverage for
any contribution;
2. Except for professional liability insurance, the insurance
policies shall be endorsed for contractual liability and personal injury;
3. Except for professional liability insurance, the insurance
policies shall be specifically endorsed to include the CITY, their officers, agents,
employees and volunteers as additionally named insured under the policies;
4. CONTRACTOR shall provide to PROJECT MANAGER, (a)
Certificates of Insurance evidencing the insurance coverage required herein, and (b)
specific endorsements naming CITY, their officers, agents, employees and volunteers as
additional insured under the policies;
5. The insurance policies shall provide that the insurance carrier
shall not cancel, terminate or otherwise modify the terms and conditions of said insurance
policies except upon thirty (30) days written notice to CITY's PROJECT MANAGER;
6. If the insurance is written on a Claims Made Form, then,
following termination of this Agreement, said insurance coverage shall survive for a period
of not less than five years;
7. The insurance policies shall provide for a retroactive date of
placement coinciding with the effective date of this Agreement;
8. The insurance shall be approved as to form and sufficiency by
PROJECT MANAGER and the City Attorney.
Page 3
C. If it employs any person, CONTRACTOR shall maintain worker's
compensation and employer's liability insurance, as required by the State Labor Code,
other applicable laws and regulations, and as necessary to protect both CONTRACTOR
and CITY against all liability for injuries to CONTRACTOR's officers and employees.
D. Any deductibles or self-insured retentions in CONTRACTOR's
insurance policies must be declared to and approved by the PROJECT MANAGER and
the City Attorney. At CITY's option, the deductibles or self-insured retentions with respect
to CITY shall be reduced or eliminated to CITY's satisfaction, or CONTRACTOR shall
procure a bond guaranteeing payment of losses and related investigations, claims
administration, attorney's fees and defense expenses.
illowil1T:AP►IIVIC•T_� • ►
CONTRACTOR shall indemnify, release, defend and hold harmless CITY,
their officers, agents, employees and volunteers, against any claim, demand, suit,
judgment, loss, liability or expense of any kind, including attorney's fees, arising out of or
resulting in any way, in whole or in part, from any acts or omissions, intentional or
negligent, of CONTRACTOR or CONTRACTOR's officers, agents and employees in the
performance of their duties and obligations under this Agreement.
W111111111191i, -:11 U I 10-A I Is]►
CONTRACTOR shall not discriminate, in any way, against any person on
the basis of age, sex, race, color, religion, ancestry, national origin or disability in
connection with or related to the performance of its duties and obligations under this
Agreement.
• ►ri' I F-11►
CONTRACTOR shall observe and comply with all applicable federal, state
and local laws, ordinances, codes and regulations, in the performance of its duties and
obligations under this Agreement. CONTRACTOR shall perform all services under this
Agreement in accordance with these laws, ordinances, codes and regulations.
CONTRACTOR shall release, defend, indemnify and hold harmless CITY, their officers,
agents and employees from any and all damages, liabilities, penalties, fines and all other
consequences from any noncompliance or violation of any laws, ordinances, codes or
regulations.
CITY and CONTRACTOR do not intend, by any provision of this
Agreement, to create in any third party, any benefit or right owed by one party, under the
terms and conditions of this Agreement, to the other party.
Paqe 4
15. NOTICES
All notices and other communications required or permitted to be given
under this Agreement, including any notice of change of address, shall be in writing and
given by personal delivery, or deposited with the United States Postal Service, postage
prepaid, addressed to the parties intended to be notified. Notice shall be deemed given
as of the date of personal delivery, or if mailed, upon the date of deposit with the United
States Postal Service. Notice shall be given as follows:
TO CITY: Mr. Ken Nordhoff
Assistant City Manager
(Project Manager)
City of San Rafael
P.O. Box 151560
San Rafael, CA 94915-1560
TO CONTRACTOR: Mr. G. Craig Hill
(Project Director)
Northcross, Hill & Ach, LLC
The Presidio
1004B O'Reilly Avenue
San Francisco, CA 94129-0921
16. INDEPENDENT CONTRACTOR
For the purposes, and for the duration, of this Agreement, CONTRACTOR,
its officers, agents and employees shall act in the capacity of an Independent Contractor,
and not as employees of the CITY. CONTRACTOR and CITY expressly intend and
agree that the status of CONTRACTOR, its officers, agents and employees be that of an
Independent Contractor and not that of an employee of CITY.
17. ENTIRE AGREEMENT — AMENDMENTS
A. The terms and conditions of this Agreement, all exhibits attached,
and all documents expressly incorporated by reference, represent the entire Agreement
of the parties with respect to the subject matter of this Agreement.
B. This written Agreement shall supersede any and all prior
agreements, oral or written, regarding the subject matter between the CONTRACTOR
and the CITY.
C. No other agreement, promise or statement, written or oral, relating to
the subject matter of this Agreement, shall be valid or binding, except by way of a written
amendment to this Agreement.
Page 5
D. The terms and conditions of this Agreement shall not be altered or
modified except by a written amendment to this Agreement signed by the CONTRACTOR
and the CITY.
E. If any conflicts arise between the terms and conditions of this
Agreement, and the terms and conditions of the attached exhibits or the documents
expressly incorporated by reference, the terms and conditions of this Agreement shall
control.
18. WAIVERS
The waiver by either party of any breach or violation of any term, covenant
or condition of this Agreement, or of any ordinance,law or regulation, shall not be deemed
to be a waiver of any other term, covenant, condition, ordinance, law or regulation, or of
any subsequent breach or violation of the same or other term, covenant, condition,
ordinance, law or regulation. The subsequent acceptance by either party of any fee,
performance, or other consideration which may become due or owing under this
Agreement, shall not be deemed to be a waiver of any preceding breach or violation by
the other party of any term, condition, covenant of this Agreement or any applicable law,
ordinance or regulation.
19. COSTS AND ATTORNEY'S FEES
The prevailing party in any action brought to enforce the terms and
conditions of this Agreement, or arising out of the performance of this Agreement, may
recover its reasonable costs (including claims administration) and attorney's fees
expended in connection with such action.
20. CITY BUSINESS LICENSE/OTHER TAXES
CONTRACTOR shall obtain and maintain during the duration of this
Agreement, a CITY business license as required by the San Rafael Municipal Code.
CONTRACTOR shall pay any and all state and federal taxes and any other applicable
taxes. CONTRACTOR's taxpayer identification number is 94-3349295„ and
CONTRACTOR certifies under penalty of perjury that said taxpayer identification number
is correct.
21. APPLICABLE LAW
The laws of the State of California shall govern this Agreement.
Page 6
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day,
month and year first above written.
CITY OF SAN RAFAEL
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City an er
ATTEST:
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City Clerk
CONTRACTOR
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Name:
Title: ri��.vc�AL
WAManagement Services- WorkFile\Finance- WorkFile\Agreement and Contracts\Professional
Contracts\2002\nha fa services pk struct 2002.doc
Page 7
NORTH CROSS IHILL IACH
May 14, 2002
Kenneth A. Nordhoff
Assistant City Manager
City of San Rafael
1400 Fifth Avenue, Room 203
San Rafael, CA 94901
North.' s. Hill �1. -kch, LLC
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ATTACHMENT "A"
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RE: Request for Proposal — Financial Advisor
Parking Structure — 3rd @ C Street
Dear Ken:
-noceived
MAY 14 2002
Management 5ervice5
Northcross, Hill & Ach, LLC is pleased to provide the City of San Rafael (the "City") with this
proposal for financial advisor services related to the City's parking structure at 3`d and C Street
(the "Project"). We believe our firm possesses the necessary professional qualifications to
assist the City in developing a comprehensive financing plan that will meet the needs of the
City, its Parking Enterprise Fund and the community.
The principals of Northcross, Hill & Ach, LLC have provided financial advisory services to
California municipalities for over 40 years. Our firm consists of three partners, one associate
and an administrative assistant. Combined, we are able to provide thorough service to all of our
clients. Northcross, Hill & Ach, LLC serves primarily small to medium size local governments
with representation throughout California. Our clients include cities, special districts,
redevelopment agencies and school districts. We have extensive experience in general
obligation bonds, tax allocation bonds, certificates of participation, lease revenue bonds,
enterprise fund financings (sewer, water, solid waste, parking), and assessment and special tax
bonds.
Our firm has been involved in several parking garage -related projects. Several of the projects
were financed through a variety of structures, including certificates of participation, special tax
bonds, tax allocation bonds and lease revenue bonds. All were public projects in Berkeley,
Davis, Santa Cruz, South Lake Tahoe, Torrance or West Covina. In a few cases, the financing
structure incorporated multiple funding mechanisms. We believe that the City has the ability to
use a combination of these financing techniques to meet its objective.
We note that in the City's Request for Proposal, there was no discussion of disclosure counsel.
We understand that the City is selecting a bond counsel as part of this process, but we suggest
that a disclosure counsel be selected within the time period. Disclosure counsel works for the
City and provides an opinion critical to the City giving comfort that the public information
released as part of the official statement is sufficient to prevent potential challenges by bond
holders. Most bond counsel firms have attorneys in house that specialize in disclosure counsel.
We do not believe that the bond counsel selection process addressed this component.
City of San Rafael
Parking Structure Request for Proposals
May 14, 2002
Page 2
As for bond counsel, our firm has worked with all of the leading firms within California. We do
most of our work with Jones Hall, but also have completed parking -related projects with Orrick,
Herrington & Sutcliffe, Stradling Yocca Carlson & Rauth, Quint & Thimmig and Brown & Wood.
We have found from experience that clients receive the most attention from either Jones Hall or
Quint & Thimmig.
Please accept the attached response to the City's Request for Proposals. We appreciate the
opportunity to serve the City in the capacity of financial advisor for the proposed Project. If
there are any questions, or you request additional information, please do not hesitate to call.
Sincerely,
EM -0-1011
G. Craig Hill
Principal
Enclosures
I IN] ORTHCROSS I HILL I AC
CITY OF SAN RAFAEL
REQUEST FOR PROPOSALS — FINANCIAL ADVISOR
FIRM EXPERIENCE —COMPARABLE PROJECTS
• City of Berkeley
$5,950,000 Lease Revenue Bonds
(Sather Gate and Center Street Parking Garages)
Contact: Phil Kamlarz 510.981.7006
2180 Milvia Street, 5th Floor
Berkeley, California 94704
Financial Advisor Fee: $45,000
Description of Project:The City of Berkeley issued lease revenue bonds in 1994 to finance
improvements to two existing parking garages that were built in the 1950s. Historical
revenues did not generate enough cash flow to finance the issue on a revenue -only basis.
The financing was completed through the City's financing authority and secured by parking
revenues and general fund appropriations. After completion of the improvements and
revised parking rate structure, the City of Berkeley has been able to collect sufficient
revenues to pay operations and maintenance costs and debt service. Since 1997 the City of
Berkeley generates enough net revenues off the project to pay all debt service. Although it
continues to have a general fund pledge, the City of Berkeley has been able to treat the
bonds as an enterprise fund obligation. If the economics will provide cash flow savings, the
City of Berkeley will refund the existing obligations and secure the new bonds with only a net
revenue pledge.
• City of South Lake Tahoe
$33,000,000 Subordinate Bond Anticipation Notes (1999)
(Redevelopment Agency Parking and Site Assembly Project)
Contact: Jaye Von Klug 530.542.6044
1052 Tata Lane
South Lake Tahoe, California 96150
Financial Advisor Fee: $45,000
Description of Project: The City of South Lake Tahoe has been very active in redeveloping
the Stateline and surrounding areas over the last 10 years. As part of this goal, the Agency
has participated in the financing of land acquisition and public projects, including the
development of a parking garage (underground) and transit center. This financing was used
to acquire land in anticipation of new development and final design of the parking project.
We are currently working with the Agency and City to complete a subsequent financing for
the completion of the parking project secured by parking revenues, a special tax (Mello -
Roos) and backup letter of credit from the surrounding properties. This financing will occur
in June 2002 and include the issuance of parking revenue bonds form the parking authority.
The special tax collection and letter of credit are designed to provide initial support and be
released as coverage ratios increase from net revenues.
I PI 0 R T H C R O S S I H ILL I ii C H I Request 'r Proposal — Financ! N Advisor
Page 1
• City of Santa Cruz
$10,035,000 Certificates of Participation (1998)
(Parking Garage Financing and Golf Course Refunding)
Contact: Dave Culver 831.420.5055
809 Center Street, Room 107
Santa Cruz, California 95060
Financial Advisor Fee: $45,000
I Description of Project: NHA structured a
? financing for a new parking garage in
downtown Santa Cruz. The parking garage
issue was an obligation of the General Fund.
However, the debt issuance was structured
such that net debt service after capitalized
interest and reserve fund earnings could be
met entirely from parking revenues. NHA
worked with City Staff to develop a cash flow
model that would achieve the goal of 100%
self-sufficiency for the garage. The general
fund pledge through the COP issue qualified
the issue for bond insurance, resulting in an AAA rating, which brought debt costs down to a
level supportable by parking revenues.
$3,755,000 Tax Allocation Refunding Bonds (1996)
(Parking Garage Project)
Contact: Joe Hall 831.420.5150
323 Church Street
Santa Cruz, California 95060
Financial Advisor Fee: $30,000
r
Description of Project: The Santa Cruz
Redevelopment Agency was actively involved
in the redevelopment of the City's downtown
area after the 1989 Loma Prieta earthquake.
The Agency used a tax allocation bond to
purchase property used for the construction of
a parking garage in the early 1990s. The
improvements were paid from a combination
of redevelopment proceeds and city
certificates of participation.
INORTHCROSSI HILL I ACHI Request For Prcnr3 ; financial Advis: r
P ,i.,,,z 2
• City of Davis
$2,000,000 Limited Obligation Assessment Bonds (1989)
(Downtown Parking Garage Project)
Contact: Susan Miller 530.757.5602
23 Russell Blvd.
Davis, California 95616
Financial Advisor Fee: $35,000
Description of Project: The City of Davis assisted local downtown landowners mitigate
parking requirements with the financing of a parking garage as part of a mixed-use
development. The financing is secured by special assessments levied against certain
properties located downtown. No general fund contribution is involved. Parking revenues
from the garage are pledged to off -set the annual assessment collections.
FINANCING OPTIONS
The City has three distinct financing options related to the Project. First, the City could issue a
general obligation bond, which provides the repayment of debt service from the general property
tax collections through an ad valorem tax. Although this would provide the lowest overall cost of
funds, the City would be required to seek a 2/3rds voter approval through an election. This
option would not put the City's general fund at risk.
The second option for the City is to finance the Project as a straight general fund obligation
(certificates of participation). This transaction provides the second most secure source of
repayment given the City's strong financial position and low debt levels. Given the formation of
the parking enterprise fund and the net revenues anticipated to be generated off of it, the City
could seek reimbursement from the fund for debt service on an as -needed basis. As the
parking enterprise fund increases its annual net revenue balances, the City could refund the
existing general fund obligation with a traditional parking revenue bond. This approach subjects
the City to interest rate risk.
The third option for the financing of the Project revolves around the issuance of a special tax or
assessment bond. A district similar to the City's Downtown Parking District could be used to
receive approval from existing property owners (or registered voters depending on total
registered voter count). This would include the issuance of either special tax bonds (also known
as Mello -Roos) or assessment bonds (limited obligation bonds). Either bond would still require
a vote depending on the overall size of the financing district that is formed. This financing
option would not require the City's general fund support.
Combination
The fourth option available to the City is the issuance of a general fund obligation (certificates of
participation or lease revenue bonds) and parking revenue bond. The City has already taken
the first step necessary to provide for parking revenue bonds. With the creation of the Parking
Enterprise Fund, the City now has an accounting structure that will capture all revenues
(whether from the proposed Project, other garages, on street meters or parking violations).
These revenues will now be clearly identifiable and provide the City with a mechanism to
leverage the revenues for purposes of financing and operating the Project. Although we do not
anticipate that the current parking fee structure will generate sufficient coverage, the City will
have in place a plan that can potentially grow into a self-sufficient enterprise fund.
NO R T H C ROSS I H I L L I A C H I Requu.:t For Proposal -- ;nancial Advisor
Past= 3
As with most public parking projects, the City will most likely need to pledge the general fund.
The City can develop a financing structure that has general funds support in the early years and
"phases out" the City's general fund pledge as enterprise revenues increase and historical
coverage can be shown. This is typically done after a couple of years of sufficient coverage
(150% of debt service from net revenues). We believe that through a comprehensive financing
plan, the City should be able to initially finance the Project with the full backing of the general
fund, and over time either reduce the financial support of the general fund or remove it entirely
as coverage is established.
Examples
The City of Berkeley financed a parking project in 1994 through the issuance of lease revenue
bonds. At the time of the financing parking fees were too low to generate sufficient cash flow to
cover the financing debt service. Over time, the parking enterprise fund has been able to grow
and now generates enough revenues to cover all the operations and maintenance and debt
service related to the project. Although the initial financing had a general fund pledge (and still
is on the hook for the shortfall), the City has paid all the debt service from the parking enterprise
fund since 1997. We believe that the City's financing could be structured in such a way that the
City's general fund could drop off entirely with a strong coverage analysis (at some point in the
future).
South Lake Tahoe is preparing to issue parking revenue bonds with parking revenues as the
primary pledge and a special tax and letter of credit as the backup. As parking revenues
increase and meet certain coverage thresholds, the special tax and letter of credit provided by
one of the primary landowners adjacent to the site will be released.
IN O R T H C R O S S I H ILL I A C H I Requezr Vor Proposal — nancial Adviscr
NORTHCROSS, HILL & ACH, LLC — PRINCIPALS AND EMPLOYEES
Northcross, Hill & Ach, LLC was founded for the purpose of providing assistance to California
City Governments and Public School Systems in obtaining and securing the financing
necessary for their projects. Mark Northcross, G. Craig Hill, and Andrew Ach are the three
founding partners of Northcross, Hill & Ach, LLC. Project Finance Associates (formed in 1996
between Mark Northcross and G. Craig Hill) and Andrew Ach & Associates (created in 1995)
merged in January 2000 to form Northcross, Hill, & Ach, LLC.
The principals of Northcross, Hill & Ach, LLC have over 40 years of combined experience in
local government finance. They have dedicated their entire careers to the public sector, either
as consultants or directly in public service. As financial advisors, the principals of Northcross,
Hill & Ach, LLC work directly with their clients, and assume full responsibility for every aspect of
the financial advisory services they offer. It should be stressed, that Northcross, Hill & Ach, LLC
acts strictly as a financial advisor and does not buy or sell bonds or position securities in the
market.
For purposes of the City's Project, we anticipate dedicating G. Craig Hill as the principal in
charge, with full access to Mark Northcross (principal) and Eric Nitzsche (vice president) as
required for analytical or facilitation of meetings. All of the firm's experience with parking
projects has been developed by G. Craig Hill and Mark Northcross.
Northcross, Hill & Ach, LLC is committed to providing the required amount of time for either
principals or employees of the firm to complete the City's Project. G. Craig Hill, Mark
Northcross and Eric Nitzsche will be available to the City when required.
Gerald Craig Hill
Mr. Hill has worked in public finance for 12 years and has served as the financial advisor to
California Cities, Redevelopment Agencies, Special Districts, and School Districts throughout the
state since 1993. He currently serves as the financial advisor to the Cities and Redevelopment
Agencies of Berkeley, Gilroy, Newark, Paso Robles, Pismo Beach, San Rafael, and Torrance, as
well as, the Special Districts of Delano-Earlimart, Santa Nella County Water, and Tulare Irrigation.
Mr. Hill began his public finance career as a financial analyst for SMUD to evaluate the financial
and economic feasibility of the Rancho Seco Nuclear Power Plant Plan. In addition to working for
the Sacramento Municipal Utility District, Mr. Hill worked for the State of California to develop
financing programs for the State's facility upgrades. Prior to co-founding Northcross, Hill & Ach,
LLC, Mr. Hill worked with Mr. Northcross for another financial advisory firm, where he served as
the lead consultant to 10 municipalities. From 1989 through 1992, Mr. Hill also headed the
financial services department for Jones Hall, Hill & White, a leading California bond counsel firm.
Mr. Hill has extensive experience in the issuance of Tax Allocation Bonds, Revenue Bonds, General
Obligation Bonds, Certificates of Participation, Tax and Revenue Anticipation Notes, Bond
Anticipation Notes, Special Tax and Assessment Bonds. His experience includes the formation of
Community Facilities Districts (Mello -Roos) and Assessment Districts. Mr. Hill has also worked with
California Redevelopment Agencies for project area formation and debt issuance.
In addition to working as a financial advisor to a number of California cities, Mr. Hill is a sitting
committee member on the Novato Investment Committee. He functions as the citizen member to the
committee and is involved in many aspects of the local government's finance activities. Mr. Hill is also
a member of the Hamilton Facility Advisory Committee involved in the redevelopment of the City
historical officers club and quarters. Mr. Hill also sits as a board member on the Park & Recreation
1`1 OR T H C R O S S I H I� i- I AC H I Request Fc- Proposal - Financial advisor
Page 5
Commission for the City of Novato. Mr. Hill received his B.S. from the University of California at Davis
in Managerial Economics and a B.S. in Agricultural Economics.
Mark Northcross
Mr. Northcross has been a public finance professional since 1981 and a consultant to local
government since 1974. His clients include several California cities, such as Davis, Hemet,
Hermosa Beach, Glendale, Newark, Palmdale, Rocklin, Santa Cruz, and South Lake Tahoe. He
serves as the financial advisor to the Independent Cities Lease Finance Authority and the Big
Independent Cities Excess Pool (BICEP). Mr. Northcross, a founding partner of Kelling, Northcross
& Nobriga, left that firm in 1996 to establish, as a partner, Project Finance Associates, which in
turn merged with Andrew Ach & Associates in 2000 to become NHA. During his 19- year career in
public finance, Mr. Northcross has served as the financial advisor on over 250 bond financings for
agencies within California. His practice, which has focused primarily on the needs of City
Government, comprises all forms of debt issuance available to municipalities, including Revenue
Bonds, Assessment Bonds, Mello -Roos Bonds, Tax Allocation Bonds, COPs, and TRANs.
During his career, Mr. Northcross has been responsible for the following innovations in public
finance:
• First Multi -Issuer Pooled COP
• First Taxable COP sold at competitive bid
• First Multi -Issuer Pooled COP to fund a JPA for municipal liability
• First Multi -District Cross -Collateralized Mello -Roos Bond Issue
• First COP secured solely by utility user's tax
• First COP guaranteed by motor vehicle in lieu of fees
• First Combined General Fund COP and Assessment District Marks -Roos Bond
• First Investment Grade Rated Mello -Roos for a single owner district without credit
enhancement.
Since 1982, Mr. Northcross has structured and managed over 60 COPs and other lease -based
financings. As outlined above, he has been responsible for several innovations in COP finance,
and he has served as the financial advisor on over 50 land secured financings. Prior to his work in
public finance, Mr. Northcross served as a consultant to California Cities on land planning issues,
to CEQA, and on the economic impact of new development. He received his B. A. degree in
Social Sciences from the University of California at Irvine in 1973.
Eric Nitzsche
Mr. Nitzsche has twelve years experience in public finance as an Investment Banker, a Financial
Analyst, and a Financial Advisor. He has structured financings secured by General Fund Leases,
Voter Approved Property Taxes, Assessments, Loan Portfolios, and 501(c)(3) Obligor Pledges,
and is an expert in the application of computer technology to public finance.
Mr. Nitzsche managed the Technical Services Department of Jones Hall, Hill & White from 1987
through 1990, where he provided technical support to issuers, advisors, attorneys, and
underwriters on refundings, arbitrage rebate and other matters related to tax exempt debt. As an
Associate of Prager, McCarthy & Sealy, he provided underwriting and advisory services to cities,
counties, school districts, public and private universities, and foreign borrowers. As Vice President
of Andrew Ach & Associates, he advised school districts on the issuance of TRANs, COPs,
Assessment Bonds and General Obligation Bonds. Mr. Nitzsche received a B.B.A degree in
Finance from the University of Massachusetts at Amherst.
NORTHCROSSI HILL I ACHI Request For Propo° it - t iancial Advisor
Pag . 6
DESCRIPTION OF WORK
We understand that the City expects to complete design and engineering work over the next
seven to ten months. We anticipate providing our financial advisory services over a period of
9-12 months. We propose breaking the financing procedure into five distinct sections; initial
financing team formation and information gathering, credit research and bond marketing
research, the actual financing structure and approvals.
Section 1 will include the initial meetings and discussions with bond counsel, City staff and
other participating consultants to disclose Project details and the City's Parking Enterprise
Fund. Initial financing structures would be introduced and advantages and disadvantages
would be discussed.
Section 2 will include our firm's research of credit and rating concerns for each of the financing
structures discussed in Section 1. Structure parameters and covenants would be gathered
and incorporated into a comprehensive financing plan that would be delivered to the financing
team for discussion and financing option selection.
Section 3 will include the presentation of financing options to staff and/or City Council. If any
community group or City Council meeting presentations are requested, our firm will prepare all
necessary presentation material and facilitate the meetings (if required).
Section 4 will include the reconvening of the financing team to outline the financing structure
and legal formation of the financing. Initial drafts of legal documents and official statements
would be released shortly after this meeting and the City Council would approve the financing
documents within 30 days of this section's activity.
Section 5 will include the management of the rating and bond insurance process. Any rating
presentations and/or conference calls will be administered by our firm. If the City requests a
selection of an underwriter, our firm will assist the City in the selection process. If the
financing is to be sold in a competitive method, our firm will coordinate all the necessary
marketing and pre -sale procedures. We will also assist bond counsel in the closing
procedures to ensure the City receives its funds in a timely manner.
A tentative schedule of events includes:
➢ Develop City Finance Team (Staff, Bond Counsel, Financial Advisor, Parking Consultant
(if required);
➢ Finance Team develops Project parameters and enterprise fund revenue analysis;
Finance Team meets to discuss financing options based on costs and revenue analysis;
➢ Financing options are "floated" to rating agencies for input;
➢ Financing Team provides City with recommended financing option;
Financing Option is presented to City Council;
Financing Structure (with legal documents) is developed for option approved by City
Council;
r Rating and Bond Insurance Process is begun;
r Selection of underwriter (if determined by City staff);
.� City Council approves legal documents and financing documents (official statement);
Financing is sold and closed after final Project costs are determined at bid
We understand that the City anticipates bidding the Project in the spring of 2003. We would
recommend that no sale of debt occur prior to receiving the winning lowest bid. The financing
NO R T H C R O S S I H I_ I A C H I Request For Pr-_l.osal — Financial A,i -aa
;9a 7
would be structured to provide the City with funds prior to awarding the bid, but sized after
receiving the Project bid numbers.
COMPENSATION FOR WORK
Northcross, Hill & Ach, LLC proposes to provide all necessary financial advisory services for a
fixed fee of $40,000. This includes all out-of-pocket costs. If any travel outside of the State is
required, such costs would be reimbursable.
PROFESSIONAL SERVICES AGREEMENT
Northcross, Hill & Ach, LLC anticipates not having any modifications to the City's form of
Professional Services Agreement. We have provided a copy of the Insurance Certificate for
your review. We carry all the standard business insurance policies necessary to provide
financial advisory services to our clients. We do not carry any errors and omissions insurance
due to it's prohibitably high premium
CONFLICT OF INTEREST
Northcross, Hill & Ach, LLC does not have any conflicts of interest with the City or this proposed
Project.
INO R T H C R o S S I H ILL I A C H I Requay; For Pror )sal — Fina ;.ial Advis
P1. . 8
DATE: 05/13/02 TIME: 02:50 PM TO: Cris @ +1 (415) 506-3401
analog extension PAGE: 001-001
ACC' CERTIFICA. = OF LIABILITY INSUR.-.NCRIRTH21 05/13/02
D J= I DATE(MMIDOIYY)
PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION
Golden Gate Insurance Brokers ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE
57 -5 5 40 0 0 -AP-OC -XSA HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR
P. O. Box 33015 ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
Sun Antonio TX 78265-3015 INSURERS AFFORDING COVERAGE
Phone: 800-457-2379 Fax:210-732-3593
INSURED 1I14SURERA: Hartford Casualty Ins Co
INSURER B.
Northcross Hill & Ach LLC INSURER C.
The Presidio Bldg. 1004B
O'reilly Ave INSURER 0.
San Francisco CA 94129-0921
I I INSURER E:
COVERAGES
THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING
ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR
MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH
POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
ON
INSR TYPE OF INSURANCE POLICY NUMBER DOTE AMM DD YnY1 E DATE (MMIDDIAY�Y) LIMITS
LTR
GENERAL LIABILITY EACH OCCURRENCE $ 1000000
A X COMMERCIAL GENERAL LIABILITY 57SBAAS3654 05/01/02 05/01/03 I FIRE DAMAGE (Any one fire) $ 300000
1 CLAIMS MADE a OCCUR I MED EXP (Any one person) $10000
DESCRIPTION OF OPERATIONSILOCATIONSA/EHICLESIEXCLUSIONS ADDED BY ENDORSEMENTISPECIAL PROVISIONS
*Except for 10 days non-payment. For inquiries call 1-800-457-2379.
CERTIFICATE HOLDER I N I ADDITIONAL INSURED; INSURER LETTER: _
NORTHCS
Northcross Hill & Ach LLC
The Presidio Bldg.
1004B O'reilly Ave
San Francisco CA 94129-0921
I
ACORD 26-S (7/97)
I
CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION
DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL *30 DAYS WRITTEN
NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO 00 SO SHALL
IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR
REPRESENTATIVES.
(�Gt�OR11(_(1RPf1RATIMI �4RR
PERS014AL & ADV INJURY
$ 1000000
GENERAL AGGREGATE
s2000000
G24'L AGGREGATE LIMIT APPLIES PER.
PRODUCTS - COMP/OP AGG
$ 20 000 0 0
7 LICY n P" I X I LOG
PO
AUTOMOBILE LIABILITY
COMBINED SINGLE LIMIT
$ 1000000
(Ea accident)
ANY AUTO
ALL OWNED AUTOS
BODILY INJURY
b
—
(Per person)
SCHEDULED AUTOS
A X HIRED AUTOS 57SBAAS3654
05/01/02 05/01/03 BODILYINJURY$
(Per accident)
X NON-OW14ED AUTOS
PROPERTYDAMAGE
$
(Per accident)
GARAGE LIABILITY
AUTO DULY - EA ACCIDENT
$
ANY AUTO
OTHER THAN EA ACC
$
AUTO ONLY: AGG
$
EXCESS LIABILITY
EACH OCCURRENCE
S 1000000
A X OCCUR Ll CLAIMS MADE 57SBAAS3654
05/01/02 05/01/03 I AGGREGATE
$ 1000000
$
DEDUCTIBLE
$
X RETE14TIO14 $ 10 , 000
$
IO
WORKERS COMPENSATION AND
I TORY LIMITSI ER
EMPLOYERS' LIABILITY
I E.L. EACH ACCIDENT
$
IELDISEASE- EAEMPLOYEE S
EL DISEASE - POLICY LIMIT
$
OTHER
DESCRIPTION OF OPERATIONSILOCATIONSA/EHICLESIEXCLUSIONS ADDED BY ENDORSEMENTISPECIAL PROVISIONS
*Except for 10 days non-payment. For inquiries call 1-800-457-2379.
CERTIFICATE HOLDER I N I ADDITIONAL INSURED; INSURER LETTER: _
NORTHCS
Northcross Hill & Ach LLC
The Presidio Bldg.
1004B O'reilly Ave
San Francisco CA 94129-0921
I
ACORD 26-S (7/97)
I
CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION
DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL *30 DAYS WRITTEN
NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO 00 SO SHALL
IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR
REPRESENTATIVES.
(�Gt�OR11(_(1RPf1RATIMI �4RR