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Hilltop Securities Inc.
© 2025 Hilltop Securities Inc. All rights reserved. Member FINRA/SIPC/NYSE Proposal to Provide Underwriting Services City of La Quinta, California March 5, 2025 Ci t y o f La Q u i n t a , C a l i f o r n i a Ma r c h 5, 20 25 Pr o p o s a l t o P r o v i d e Un d e r w r i t i n g Se r v i c e s CONTACT: Todd Smith, Managing Director Todd.Smith@hilltopsecurities.com Mike Cavanaugh, Managing Director Mike.Cavanaugh@hilltopsecurities.com 777 South Highway 101, Suite 104 Solana Beach, CA 92075 777 South Highway 101, Suite 104 Solana Beach, CA 92075 Phone: 760.632.1347 Phone: 760.632.6824 © 2025 Hilltop Securities Inc. All rights reserved. Member FINRA/SIPC/NYSE March 5, 2025 Electronic submission via email: rhallick@laquintaca.gov City of La Quinta, California Attn: Rosemary Hallick, Principal Management Analyst 78495 Calle Tampico La Quinta, California 92253 Dear Ms. Hallick: Hilltop Securities Inc. (“HilltopSecurities”) is pleased to submit its proposal to serve as underwriter for the City of La Quinta (the “City”) in connection with the negotiated issuance of land secured financings (the “Bonds”). HilltopSecurities has 75-plus years of experience serving more than 1,450 state and local governments nationwide. We hope this response demonstrates our qualifications to serve the City as an underwriter on your upcoming transaction(s). HilltopSecurities has significant experience in this sector, we have worked with the City on past redevelopment transactions and are currently working on neighboring transactions for similar purposes. HilltopSecurities has a broad perspective and resources that will add value to our financing platform. We believe that no firm offers the same compelling combination of experience, expertise, services available and local presence as HilltopSecurities. As part of your evaluation of our proposal, please consider the following: Distribution. HilltopSecurities has a strong, national market presence with municipal finance as our core business. We have invested and continue to invest significantly in the overall platform to ensure that we meet the diverse, ever- changing and expanding needs of our clients. Our extensive distribution network will provide access to several distinct investor channels, including traditional institutions, middle market institutions, and retail (both SMA and individual). As a firm with both underwriting and advisory practices, HilltopSecurities benefits from exposure to a wider variety of underwritings than do most firms. Our 193 institutional sales, trading, underwriting and retail sales professionals are focused on municipal bond sales, covering high net worth individuals, bank portfolios, and smaller institutions. These professionals maintain relationships with many large Tier I institutional accounts as well as Tier II and Tier III institutional accounts, comprised of small to mid-size institutions. Coverage of mid-market Tier II and III institutions can be a critical component of any pricing because their participation may prevent a few Tier I investors from dictating pricing levels. Our ever-growing institutional distribution network features sales and trading operations throughout the country. These sales and trading professionals have well-established relationships providing fixed income investments to investment advisors, small insurance companies and broker-dealers that are a growing segment of the market for municipal bonds. In addition, the City will also benefit from our 90 retail advisors (HilltopSecurities Private Client Group) and 200 independent registered representatives (Momentum Network) located throughout the country. Lastly, as the nation’s largest clearing firm by number of broker dealer accounts, HTS can reach over 200 broker dealers with approximately 1,750 combined retail brokers. Rest assured that HTS can distribute the bonds to all investors that may have interest in the proposed offering. We have clients in your service area and can provide priority treatment during the order period to residents. Strong In-House California Retail Capability. One attribute that separates us from many of our competitors is our California based retail sales force. Our California retail sales team is made up of almost 50 brokers serving 16,092 retail accounts with approximately $5.946 billion in California municipal assets under custody. HilltopSecurities maintains municipal retail sales offices in Big Bear Lake, Monterey, Roseville, San Diego, San Francisco and Sherman Oaks, and offers arguably the strongest California retail distribution capability of any firm. We have clients in the City and can provide them with priority during the order period. Accounts Assets 16,092 $5.946 billion California Municipals © 2025 Hilltop Securities Inc. All rights reserved. Member FINRA/SIPC/NYSE Unparalleled Experience. No matter the resources that a firm has, the best way to truly know a financial market, both inside and out, is to be active in that market daily. When combining municipal advisory, competitive and negotiated underwriting, HilltopSecurities’ Public Finance has completed 4,581 transactions for over $232 billion between 2020 and 2024. HilltopSecurities was in the market with 18 municipal bond issuances each week during this timeframe. This ranks as the #5 National Municipal Investment Bank. Our local banking experience in general fund financings for California issuers is diverse and deep; and, as discussed herein, our bankers are some of the most experienced in this sector. Local Knowledge. HilltopSecurities traces its California roots back to 1970 with the opening of our Beverly Hills office. HilltopSecurities has been and remains committed to California. During years 2020 through present, the firm has participated in 236 California transactions for total par of $12.6 billion. Further, the firm consistently has trading volume of California bonds more than $28 billion per year. This means we have proprietary knowledge on a vast amount of trade information with buy side clients. Our main office is located in north San Diego County, which allows quick and in person service for the City. Both Mr. Smith and Mr. Cavanaugh worked with Robin Thomas, who was the City’s underwriter on all redevelopment deals dating back to at least 2008. She completed the RDA’s last five transaction (2013-2021) for over $377 million while at HilltopSecurities working along-side both Todd and Mike. In addition, Todd Smith was born and raised in Cathedral City, where his parents still reside. The HilltopSecurities team provides investment banking to local entities such as Palm Springs, Palm Desert, Desert Water Agency, Indio and Rancho Mirage to name a few. CFD Experience. As described herein, our Public Finance banking experience with land-secured financing in California is diverse and deep, especially when you consider the number of transactions completed by our smaller banking staff, Additionally, with the recent addition of Joshua Lentz, Senior Vice President, we are growing our California banking presence in this sector. Since 2020, HilltopSecurities has completed 61 land secured transactions totaling over $1.2 billion in par amount. We will oversee the transaction from start to finish and will be responsible for all work generated by HilltopSecurities. We pledge our availability as well as accessibility and will work in tandem with the City, its municipal advisor and other members of the financing team to ensure the City’s financing goals are reached. Our team is well qualified to provide the highest level of underwriting services. Our goal is to serve as Senior Managing Underwriter but will accept any role you deem beneficiary to your financing goals. Please contact us directly with any questions or comments. We office in Solana Beach, CA at 777 South Coast Highway Suite 104 and our contact info is below. We are authorized to bind the firm, and this presentation is valid for at least 90 days. We are both free of any conflict of interest. Sincerely yours, Todd Smith Mike Cavanaugh Managing Director Managing Director Todd.Smith@hilltopsecurities.com Mike.Cavanaugh@hilltopsecurities.com (760) 632-1347 (760) 632-6824 Transactions Assets 4,581 $232 billion Investment Bank (2020-24) #5 National Municipal Yearly #Yearly Par 27,523 $5.41 billion Annual Trades in CA (2020-24) Table of Contents Page | i © 2025 Hilltop Securities Inc. All rights reserved. Member FINRA/SIPC/NYSE Table of Contents 1. Firm Background, Qualifications, and Experience .............................................................................. 1 2. References of California government agencies (preferably cities) ................................................... 4 3. Complete Pricing List or Fee Schedule ................................................................................................ 4 4. List of Complementary Services Offered by Submitter along with Corresponding Prices ............ 5 5. Staffing and Project Organization ......................................................................................................... 5 6. Subcontracting Services ........................................................................................................................ 7 7. Disclosures .............................................................................................................................................. 8 8. Explanation of Methodology, if applicable ........................................................................................... 8 9. Non-Collusion Affidavit (Attachment 1) .............................................................................................. 10 APPENDICES A Non-Collusion Affidavit (Attachment 1) DISCLOSURE: Hilltop Securities Inc. (“HilltopSecurities”) is providing the information contained in this document for discussion purposes only in anticipation of serving as underwriter to the City of La Quinta, California (the “City”). As an underwriter, HilltopSecurities’ primary role is to purchase securities for resale to investors in an arm’s length transaction between the City and HilltopSecurities. HilltopSecurities’ financial and other interests will differ from those of the City, and therefore, HilltopSecurities will not serve as a municipal advisor, financial advisor, or fiduciary to the City or any other person or entity on such transaction, regardless of whether HilltopSecurities or its representatives or affiliates have advised or are advising any such parties on other matters. The information provided herein is not intended to be and should not be construed as “advice” within the meaning of Section 15B of the Securities and Exchange Act of 1934. The City should consult with its financial, municipal, legal accounting, tax and/or other advisors, as applicable, to the extent it deems appropriate. If the City would like a municipal advisor that has legal fiduciary duties to it, the City should consider engaging a municipal advisor to serve in that capacity. HilltopSecurities will not have any duties or liability to any person or entity in connection with the information being provided herein. The information provided in this document is indicative only and constitutes our judgment as of this date based on current market conditions and other information available to us. Page | 1 © 2025 Hilltop Securities Inc. All rights reserved. Member FINRA/SIPC/NYSE 1. Firm Background, Qualifications, and Experience Firm’s Background, Qualifications, and Experience, including the following: (a) Specific service(s) your firm provides (b) Number of years in business (c) Number of years performing this service (d) Qualifications of Project Manager and key personnel who will be responsible for performance if any agreement results from this RFQ (e) Firm ownership and if incorporated, list the state in which the firm is incorporated and the date of incorporation (f) If the firm is a subsidiary of a parent company, identify the parent company (g) Enumerate the qualifications criteria as relevant here. Hilltop Securities Inc. (“HilltopSecurities” or” Hilltop”) is a full-service, diversified investment banking firm focused on one mission: to provide superior guidance and financial solutions to public entities nationwide. HilltopSecurities is a leading investment banking firm nationally. HilltopSecurities has responded to today’s increasingly complex public finance landscape by raising the bar on the services, resources, and experience our firm offers. In fact, HilltopSecurities is one of the most well-equipped and resourceful investment banking firms in the nation. Our wealth of experience in servicing our clients, along with our expertise and national resources, will provide the full scope of services that the City seeks. HilltopSecurities is proud to offer ancillary services to assist the City and its financial advisor, with departments available to focus on: continuing disclosure, investment of bond proceeds, arbitrage rebate, and swap or variable rate financing structures. Corporate and Ownership Structure. FirstSouthwest, founded in 1946, was originally dedicated to serving the financing needs of local municipalities and grew into a national firm with expertise in every sector of public finance. HilltopSecurities, formerly known as Southwest Securities, Inc., was founded in 1972. In 2015, HilltopSecurities and FirstSouthwest became common control affiliates under Hilltop Holdings Inc., a diversified financial holding company, and on January 22, 2016, HilltopSecurities and FirstSouthwest merged to create a new, stronger firm with complementary business lines and a shared history representing over 112 years of industry experience. As of March 31, 2024, Hilltop employs approximately 3,740 people and operates 325 locations in 48 states. HilltopSecurities is a registered securities dealer under the Securities and Exchange Act of 1934 and functions as a member of the Depository Trust Company and the National Clearing Corporation. HilltopSecurities, a Delaware corporation, is a wholly owned subsidiary of Hilltop Securities Holdings LLC, which is wholly owned by Hilltop Holdings Inc., a Dallas-based holding company listed on the New York Stock Exchange under the symbol “HTH”. There are no pending changes in the composition or ownership of the firm, and none are currently anticipated. PrimeLending, a residential mortgage company, and PlainsCapital Bank, a commercial bank, are also subsidiaries of Hilltop Holdings Inc. Our Firm at a Glance 40 Public Finance Offices in 16 States 7 Offices in California 800 Employees Firm-Wide (approximately) 32 “Deal of the Year” Awards Reliable, Firsthand Market Information As of 12/31/2024 Page | 2 © 2025 Hilltop Securities Inc. All rights reserved. Member FINRA/SIPC/NYSE HilltopSecurities is headquartered in Dallas, Texas, and maintains 40 offices in 16 states. Nationwide, HilltopSecurities currently employs approximately 800 people. Currently, HilltopSecurities has 200 public finance professionals who are involved in providing financial advisory services, which is the mainstay of our firm. HilltopSecurities is not the largest underwriter in California in either volume or number of financings completed but we do believe that on a per-banker basis we compare favorably to our competitors. Historically, HilltopSecurities has employed two public finance bankers in California (Todd and Mike). This is relevant to the evaluation of our deal list. Your HilltopSecurities team is as productive (or more) than any other firm on a banker-to-deal ratio. Through the growth and focus of the firm into the negotiated underwriting space, as opposed to that of municipal advisor, HilltopSecurities is now active on a State level financing. This includes three deals in 2024 in this sector, with Mike Cavanaugh being the California representative for HilltopSecurities. HilltopSecurities is a fully diversified investment banking firm with decades of experience providing underwriting, capital markets, and related services. HilltopSecurities has served more than 1,450 municipal and non-profit entities, including many Cities in California and across the country. Unlike most of our competitors, our Public Finance Department is one of the largest divisions in the firm, consisting of approximately 200 employees across 40 offices, as shown in the table. Public Finance, with the inclusion of the Underwriting, Sales and Trading, and Retail divisions of the firm, encompasses approximately 50% of the firm’s overall staff. While other firms have exited public finance or are currently reducing municipal finance staff, HilltopSecurities is actively hiring municipal professionals, including bankers, sales personnel, and underwriters. HilltopSecurities remains focused on the public finance sector evidenced by having one of the largest municipal finance departments in the country. HilltopSecurities has been and remains committed to California. From January 1, 2020, through present, the Firm has participated in 244 transactions for total par of more than $12.4 billion. Establishing and growing our investment banking presence in California is not our only goal of HilltopSecurities but the Firm has been focused on growing our broader investment banking capabilities, including hiring five bankers from UBS, with offices in Texas, New York and Chicago. Additional top talent from across the country including current Co-Head of Public Finance, Head of Debt Capital Markets, Head of High Yield Underwriting and other bankers and/or members of the underwriting team have joined HilltopSecurities from Citi, Morgan Stanley, Piper Sandler, RBC, Wells Fargo, BBT and Loop. In addition, in the past two years, we have hired Josh Lentz (Senior Vice President) to the California team. This investment in growing our business comes at the same time as many of our peers are streamlining their Public Finance departments. We are experiencing significant growth in our competitive bidding. The firm hired Bill Evans in 2020. Hilltop has overseen 462 winning bids transactions totaling $6.7 billion since 2020. Hilltop is in Page | 3 © 2025 Hilltop Securities Inc. All rights reserved. Member FINRA/SIPC/NYSE the market with 18 municipal bond issuances on average each week and has bid on 1,097 competitive issues totaling over $18.9 billion, winning on 127 issues totaling over $1.9 billion. This ranked #8 nationally in 2023 and we are top #10 in 2024. Land Secured Financings. HilltopSecurities maintains a leading position in underwriting and pioneering of innovative land- secured financing structures. HilltopSecurities personnel serves on or has participated in the Committee on Assessments, Special Taxes and Other Financing Facilities (CASTOFF) and California Debt and Investment Advisory Commission assisting in the development of appraisal guidelines for land-secured bonds. Furthermore, California bankers from HilltopSecurities have worked collaboratively with the State of New Mexico in developing the land secured financing market in that state, where the passage of new legislation created the Public Improvement District (PID) concept – a hybrid of the assessment district and Mello-Roos district. HilltopSecurities was the first to complete a PID in New Mexico. In addition, because of our land-secured experience in California and New Mexico, HilltopSecurities (with Mr. Cavanaugh and Todd Smith) co-managed the first land secured financing in the State of Massachusetts. The $12,550,000 financing for South Shore Tri-Town Development Corporation, Infrastructure Development Revenue Bonds closed in 2010. This district was non-rated and had a single owner, LNR, who made headlines earlier in the year for possible bankruptcy. This unusual and unique financing is an example of our national and respected experience. The following are local California based issues that demonstrate our abilities. We have successfully underwritten community facility district (CFD) bonds for issuers across the credit spectrum, from non- rated raw land CFDs for River Island Public Financing Authority with one landowner, to build-out undergrounding utility assessment districts for the Cities of Solana Beach, Laguna Beach and Newport Beach and everything in between. Our California retail is a well primed investor in land secured bonds and these issuances comprise a significant portion our $5.95 billion municipal assets under management. Our distribution network has relationships with the Tier I, II and III (including SMAs) investors and our strong retail investment can jointly and efficiently sell any type of municipal security. HilltopSecurities has a strong focus on all land secured issuances, specifically where other firms shy away. The table below is a summary of 61 land secured transactions totaling over $1 billion in par amount issued since 2020. To find the lowest cost of borrowing, we have used private placement loans as an alternative to a public offering. In many cases we were hired on a public offering but demonstrated to the issuer and municipal advisor a private placement worked more cost effectively and closed the financing as such. Thus, we include our private placement loan experience as senior managed transactions when providing our qualifications. There are only two firms in California that have more volume, but on a per-banker basis we compare favorably to all. The following transactions were completed by HilltopSecurities team members assigned to your financing team. Undergrounding Utility Districts. Mike Cavanaugh and Todd Smith have completed 8 undergrounding districts in Southern California for over $28 million. These include the Cities of Laguna Beach, Newport Beach and Solana Beach. We have discussed this concept of undergrounding to clients in the State of Florida for the purpose of protecting power lines during hurricanes and other natural disasters. The HilltopSecurities team is also engaged in other CFDs and EIFDs, including for the benefit of a local not for profit developer on property located north of Interstate 10 at Varner Rd. and Cook Street. This project has similarities with the City’s needs in that we are funding electric utility infrastructure and roadway improvements. The CFD will fund the acquisition of a portion of Transactions Par Amount 8 28,235,000 Undergrounding Districts Transactions Par Value Transactions Par Value Transactions Par Value 2020 9 184,128,493 5 20,118,475 14 204,246,968 2021 8 125,995,000 2 1,970,297 10 127,965,297 2022 11 408,440,000 4 14,796,306 15 423,236,306 2023 11 212,205,000 0 - 11 212,205,000 2024 4 118,585,000 5 111,000,000 9 229,585,000 2025 2 9,360,000 0 - 2 9,360,000 Total 45 1,058,713,493 16 147,885,078$ 61 1,206,598,571$ Senior Manager Placement Agent Total Page | 4 © 2025 Hilltop Securities Inc. All rights reserved. Member FINRA/SIPC/NYSE substation improvements set to benefit Berger Property allowing will serve letter for power and development to take place. The remainer of the capacity will be funded by each respective participant. It is anticipated that the substation will also benefit property located in Palm Desert and Rancho Mirage plus unincorporated area of Riverside County. The substation improvements will be dedicated to Imperial Irrigation District. This substation will allow the developer and other Coachella Valley cities to develop land that currently is without a power source In addition to this project, HilltopSecurities is working on what we believe will be the first EIFD bond issuance that will be sold with an investment grade rating for the benefit of City of West Sacramento. This expected to come to market in May 2025 and will provide HilltopSecurities with more experience to add value to your financing team into the future. 2. References of California government agencies (preferably cities) (a) Client name, client project manager, telephone number, and email address (b) Project description (c) Project start date, and end date (d) Staff assigned to each project by the firm (e) Provide a summary of final outcome HilltopSecurities believes that strong recommendations from our clients are the most accurate indications of our firm’s level of service and expertise. We encourage you to reach out to all our references, contact information is below. We have successfully underwritten multiple land secured financings for each of these city references. 3. Complete Pricing List or Fee Schedule You may, for reference, include a detailed fee schedule, hourly rate schedule, or any other pricing information for the services your firm provides. However, the City may still require bids for specific projects as they arise, pursuant to the City’s Purchasing & Contracting Policy, adopted via Resolution No. 2023- 008, which can be viewed/downloaded 24/7 via the link provided below: https://laqlaserweb.laquintaca.gov/WebLink/DocView.aspx?id=577673&dbid=1&repo=CityofLaQuinta. HilltopSecurities proposes the following fee structure, which is subject to negotiation with the City. All fees and charges represent "not-to-exceed" amounts. The following fees would not differ between certain types of transactions (e.g., land-based CFD and AD 425 N El Dorado Street CFD 1 Plaza POBox 667 380 Civic Dr Lease/COP Stockton, CA 95202 Lease/COP Patterson, CA 95363 CFDs Bonds Galt, CA 95632 Wastewater (209) 937-8848 Water (209)895-8015 RDA (209) 879-7900 JPA Refunding carmen.barragan@stocktonca.gov kirwin@ci.patterson.ca.us cerias@cityofgalt.org City of Stockton City of Patterson City of Galt Carmen Barragan, Finance Dept Ken Irwin, City Manager Chris Erias, City Manager Mike Cavanaugh - Lead BankerMike Cavanaugh- Lead banker Todd Smith - Lead Banker Client since 2006 Client since 2015 Client since 2021 Page | 5 © 2025 Hilltop Securities Inc. All rights reserved. Member FINRA/SIPC/NYSE rated, land secured, enterprise revenue, lease revenue, etc.). The firm’s fee is entirely contingent on the successful completion of a financing. If the issue fails to close, we will not be reimbursed for even the smallest of expenses. Out of any fee, HilltopSecurities will pay all of its out-of-pocket costs and expenses including underwriter’s counsel, travel, telephone, computer, word processing, express mail and other costs incurred in performing the services related to this financing. If the securities are structured as a private placement or a hybrid with a public offering, HilltopSecurities would propose the following fees: 1. Public offering. HilltopSecurities proposes to maintain the same “not-to-exceed” amounts as stated above as derived by the par amount and the takedowns, management fee and expenses. 2. Placement. If all or a portion of the issue is completed through a private placement, HilltopSecurities proposes the following fee schedule when serving as Placement Agent. 4. List of Complementary Services Offered by Submitter along with Corresponding Prices The above pricing matrix has been approved by other clients including City of West Sacramento and City of Stockton for their underwriting pools. We can provide exact fees on all 48 of our land secured (or any) transactions upon request. 5. Staffing and Project Organization Proposed Engagement Team. HilltopSecurities uses a team approach which provides a higher level of experience, proficiency, and client service by matching our individual talents to the tasks. As Day-to-Day Project Manager and Back-up Project Manager, Todd Smith and Mike Cavanaugh, respectively, will provide redundant coverage to the City that allows us to provide in-person coverage on relatively short notice and to ensure work is completed timely and efficiently. Bill Evans will act as Lead Underwriter for this effort and will work closely with the banking team to ensure maximum market acceptance for the City. Bill will work closely with Kelly Jocoy, Head of California Retail Operations (in Sherman Oaks, CA), who has over 40 years of California municipal bond experience. Mr. Jocoy joined HilltopSecurities in October 2015, from Citibank, where he was director of municipal trading and oversaw all the firm’s competitive and negotiated underwriting for California and the Northwest. Since 2020, Todd has completed 29 California land secured deals totaling over $827 million. In this same time frame, Mike Cavanaugh has completed 21 transactions totaling $216 million. Please refer to our full team bios below. HilltopSecurities is one of the few underwriting firms active in the State of California that has a full-time credit analyst on staff to assist our clients with credit-related issues. Ted Chapman has over 25 years of experience in public finance. Prior to joining the firm, Ted spent 21 years as a municipal bond credit analyst at S&P Global Ratings, serving as a subject matter expert and credit rating criteria author for municipal water utility revenue bonds and ESG and was a senior credit officer for rating committees. Size in Millions Non-Rated Rated BBB to A AA to AAA Less than $5 15.00 9.00 6.50 $5 to $10 12.00 8.00 5.00 $10 to $25 10.00 7.00 5.00 $25 to $50 9.00 6.00 4.00 $50 to $100 8.00 5.00 4.00 $100 and over 7.50 4.00 3.50 Rated to Insured $/1000 of par amount of Bonds Size in Millions Placement Fee Less than $5 20,000 $5 to $10 27,500 $10 to $25 35,000 $25 to $50 50,000 $50 to $100 80,000 $100 and over 100,000 Page | 6 © 2025 Hilltop Securities Inc. All rights reserved. Member FINRA/SIPC/NYSE Todd Smith, Managing Director, Lead Banker, has been involved in the underwriting of over $3.5 billion in public finance transactions since 1996, including pension obligation bonds, revenue bonds, COPs, lease revenue bonds, land secured transactions, tax allocation bonds, affordable housing projects, enterprise revenue bonds, and general obligation bonds. Todd will serve as primary contact for this engagement and will attend meetings, as necessary. Since 2020, Todd has completed 29 land secured financing for over $827 million. These clients include River Islands, which is a master planned community in Lathrop, CA that at build out will house over 20,000 people. Other clients include the Cities of Hawthorne, Galt, Lakeport, Newport Beach and Laguna Beach. In 2008 and 2009, Mr. Smith was the lead banker on the Far West Region Bond Buyer Deal of the Year for the Yuba County Levee Improvement Authority and Chawanakee Unified School District, respectively. Mr. Smith holds a Bachelor of Arts Degree from California State University Fullerton in Economics. Mr. Smith has the Series 7 and Series 63 licenses. Todd was born and raised in Cathedral City, where is parents, friends and family still reside. Mike Cavanaugh, Managing Director, started his career in Public Finance in 1991 as a financial analyst and has over twenty- five years of senior management banking experience. Mike will serve as backup for this engagement but Todd and Mike work in adjoining offices and are in constant communication. Since 2020, Mike has completed 21 land secured financing for over $216 million. These clients include the Cities of San Bernardino, Upland, Patterson, West Sacramento, Stockton, Calimesa, Encinitas and Altadena. HilltopSecurities, with Mr. Cavanaugh as lead banker, was recently added to the senior managing pool for land-based financing for the Cities of San Diego and San Jose in addition to Los Angeles County and Sacramento County. He holds a Bachelor of Science Degree in Business Administration from the University of Southern California. He is a Registered Representative with the Financial Industry Regulatory Authority (FINRA) (Series 7). Mr. Cavanaugh is an active member of the Committee on Assessments, Special Taxes and Other Financing Facilities (CASTOFF) and California Society of Municipal Finance Officers (Statewide and the San Diego Chapter). Josh Lentz, Senior Vice President, focuses primarily on project development finance for all types of borrowers. Mr. Lentz has considerable experience working with California cities, counties, special districts, and school districts utilizing lease revenue bonds, certificates of participation and direct purchase lease agreements. He has completed lease financing transactions for such Orange County cities as Fountain Valley, Los Alamitos, and Rancho Santa Margarita. Mr. Lentz joined HilltopSecurities in July 2022, and previously he was a commercial municipal and nonprofit banker with Western Alliance Bank (January 2016 through July 2022) and a municipal advisor with Fieldman, Rolapp & Associate (August 2006 through January 2016). Mr. Lentz holds his bachelor’s degree from Arizona State University. Licenses held include Registered Representative of FINRA and holds the following professional registrations: Securities Industry Essentials (SIE), Municipal Advisor Representative (Series 50), Municipal Securities Representative (Series 52) and Uniform Securities Agent (Series 63). Page | 7 © 2025 Hilltop Securities Inc. All rights reserved. Member FINRA/SIPC/NYSE Andy Kuo, Senior Vice President, will serve as analyst on this transaction. Mr. Kuo has worked in the Public Finance industry since 2004. His experience ranges from General Obligation, Revenue, Appropriation, Land Secured, Special District, Notes, and Multi-Family Housing financings. He worked at ML Stern which was acquired by Southwest Securities in 2008. Southwest Securities is now HilltopSecurities. Mr. Kuo is a graduate of the University of California, Berkeley with a BA in Pure Mathematics and a BA in Economics. He is a Registered Representative of FINRA with the Series 7, Series 50 and 63 licenses. Nolan Blair, Associate, started his career in public finance with Oppenheimer in 2021 and joined HilltopSecurities in June 2024. Nolan will provide analytical and quantitative support. Originally from the San Francisco Bay Area, Nolan now calls San Diego County home and has been a California resident since birth. His experience includes over 130 transactions he assisted on while employed at Oppenheimer. He is a graduate of Brigham Young University with a BS in Economics. He is a Registered Representative of FINRA with Series 52 and 63 licenses. William Evans, Senior Managing Director / Head of Underwriting, will serve as lead underwriter for the team. Mr. Evans has worked in the public finance industry since 2002 and joined HilltopSecurities in 2020. Bill earned an Executive MBA from Fordham University and is a graduate of Northeastern University with a BS/BA in Finance and Accounting. He is a Registered Representative of FINRA with the Series 3, 7, 24, 50, 53 and 63 licenses. We want to highlight our credit analyst, Ted Chapman, Managing Director, who was a long-time employee at S&P and who helped design their rating scorecard for water revenue bonds. His experience and knowledge of water credits may be very valuable to the City (especially since they don’t have an existing rating). Theodore “Ted” Chapman joined HilltopSecurities in 2021. Prior to HilltopSecurities, Mr. Chapman spent 21 years as a municipal bond credit analyst at S&P Global Ratings, serving as a subject matter expert and credit rating criteria author for municipal water utility revenue bonds and ESG. He served from 2007 as a senior credit officer for credit rating committees within S&P’s U.S. Public Finance department. Mr. Chapman holds a Master of Public Administration from the University of Texas – El Paso and earned a BA in Political Science from the University of Arizona. Mr. Chapman holds the Series 50, 52 and 63 licenses. 6. Subcontracting Services Subcontracting any portion(s) of the Scope of Services is not preferable; however, if a submitter can demonstrate to the City’s satisfaction that is in the best interest of the project to permit a portion of the service(s) to be subcontracted by the submitter, it may be considered. Provide details on the role of any subcontractor that will be used. Assignment is prohibited. Page | 8 © 2025 Hilltop Securities Inc. All rights reserved. Member FINRA/SIPC/NYSE HilltopSecurities will not subcontract any services. 7. Disclosures Disclosure of any alleged significant prior or ongoing agreement failure, any civil or criminal litigation or investigation pending, which involved the submitter or in which the submitter has been judged guilty or liable within the last five (5) years. If there is no information to disclose, submitter must affirmatively state there is no negative history. From time to time in the ordinary course of its business, HilltopSecurities is called upon to respond to inquiries or is subject to investigations or proceedings by federal, state or industry self-regulatory organizations. The firm is also involved, from time to time, in civil legal proceedings and arbitration proceedings concerning matters arising in connection with the conduct of its business. To the best of our knowledge, information and belief based upon the facts available at this time, there is no threatened or pending inquiry, investigation, litigation, arbitration, or regulatory proceeding that we believe would have a material adverse impact on the ability of HilltopSecurities to perform public finance underwriting services. The Financial Industry Regulatory Authority (FINRA) maintains a public database known as BrokerCheck© that discloses reportable regulatory matters for HilltopSecurities. BrokerCheck© may be found at www.FINRA.org. However, the firm would like to make the following disclosure: On June 9, 2022, WR Investments, LP filed an FINRA arbitration claim against Hilltop Securities, Inc., Martin Bradley Winges, and Stephen Robert Coma (the “Hilltop Parties”). The underlying allegations relate to a 2021 municipal bond offering related to the sale of claimant’s portfolio of 26 senior living and skilled nursing facilities. Hilltop served as the underwriter in connection with the sale. The transaction included the sale of $454,205,000 in senior A bonds, as well as $53,070,000 of subordinated B bonds. On September 2, 2024, the Hilltop Parties, in coordination with their insurance carrier, settled the matter for $5,500,000 without an admission of liability or acknowledgment of any fact, allegation, or claim. 8. Explanation of Methodology, if applicable Marketing and Distribution Capabilities. HilltopSecurities’ goal is to create a broad and deep investor pool for the City’s transaction. This creates competition and increased liquidity that translates into achieving the lowest cost of borrowing the market can provide. HilltopSecurities achieves this through its institutional salesforce being strategically placed throughout the country. The geographical proximity of sales coverage to an investor allows for increased communication and connection thus establishing a level of coverage that is personal, trustworthy, and valued. In addition to the Tier 1 coverage provided, HilltopSecurities has an extensive middle-market network of sales coverage that is centered in the West (Los Angeles, San Francisco, Arizona, Denver, and Dallas). This Tier II coverage augments the depth and breadth of the order-book and finds the regionalized banks, insurance companies, and investment advisors that prevent the largest investors from attempting to dictate price. We find deals of this size will generate Tier I investors, but we use the mid-sized institutions to leverage against the Tier I demands. We are also seeing a trend, as rates rise, that Tier III buyers (including SMAs) and Retail are starting to participate. Between our institutional sales (47 members), retail traders (4), middle market sales (4) and HTS Bancsystems we offer a blanket of sales coverage encompassing the largest institutional municipal investors, individual retail as well as mid-tier Page | 9 © 2025 Hilltop Securities Inc. All rights reserved. Member FINRA/SIPC/NYSE insurance companies, banks and municipalities. As part of our marketing, we will identify peer transactions, such that we can track investor, pricing and structure. Institutional Distribution Capabilities. HilltopSecurities has developed one the largest and most effective regionally based institutional sales efforts in the industry. The firm has 47 regional institutional salespeople assigned to cover the United States and California providing our clients access to the largest and most active regional and California institutional investors, including trading accounts. Retail Distribution Capabilities. Our distribution network includes approximately 50 California based municipal retail brokers serving high-net-worth clients with approximately $5.462 billion in California tax free assets under custody in 15,092 accounts. The firm has California retail sales offices in Big Bear, Monterey, Roseville, San Diego, San Francisco, Solana Beach and Sherman Oaks (the combined firm has 53 offices with 9 in California). Targeted Marketing Approach. HilltopSecurities can target specific institutions for the City through an innovative marketing approach that HilltopSecurities has developed called “Peer Group” Target Marketing which has proven to be a powerful tool in expanding the institutional investor base for issuers where we serve as an underwriter. Over the last 15 years, HilltopSecurities invested more than $2 million in proprietary software systems to support its bankers and the sales and trading desk. These bespoke tools are “data mining” systems that allow us to view holdings and portfolio activity of major investors. We believe the City could benefit from the firm’s approach to target marketing to the national institutional investor segment. The current market (and all of 2024) is seeing very strong demand from SMA accounts. This sector is no longer putting in orders for $1 million or less and we could see up to $5 million on any one order. In today’s market, we would anticipate half of the orders for your bonds will come from SMA accounts, but our marketing plan will reach to all buyers. HilltopSecurities would structure the bonds to sell to the widest investor base possible that allows for the lowest cost of borrowing. HilltopSecurities believes we can structure this deal at a level that is attractive to both institutions and retail and at the lowest cost to the City. Structuring the financing to attract both retail and institutional interest will help lower the cost of borrowing. Overview of Marketing Plan Post POS Sales Force Teach-In Peer Group Analysis Investor Call/ Presentation One-on-One Investor Calls Recommend posting for transaction two weeks prior for transaction Educates our sales professionals on the project, the structure, and the credit so they can more effectively discuss with their investor clients Identifies investors underweight in the bond and those who are likely or recent purchasers based on their holdings with similar characteristics Conduct open calls with investors principals, the underwriter and advisor and allow investors to ask questions Follow up with one-on- one investor calls as needed or requested to answer any final questions they may have prior to the sale HilltopSecurities provides securities clearing services to over 170 securities brokerage firms (“Correspondent Firms”) located in 32 states employing 2,500 brokers with over 200,000 brokerage accounts. Clearing services include maintaining accounts, processing securities and transactions, extending margin loans, and performing a variety of administrative services as agent for our Correspondent Firms and their clients. At present, the firm averages some 70,000 trades daily. Page | 10 © 2025 Hilltop Securities Inc. All rights reserved. Member FINRA/SIPC/NYSE HilltopSecurities maintains a robust sales and trading platform, with 12 office locations across the country, including Tennessee, Texas, Florida, Massachusetts, New York, North Carolina, California, Colorado, Illinois, and Minnesota. Our national platform with a strong regional presence in numerous markets allows for our sales and distribution team to provide extensive regional and local knowledge to maximize the order book and drive RIH’s borrowing cost down. Our sales, trading, and underwriting platform includes almost 200 professionals which is sizable compared to peer financial institutions. Our fixed-income sales professionals are municipal specialists with average industry experience of 21 years, and several have more than 30 years of service to their clients. As one of the largest broker/dealers in the country, these longstanding relationships provide a unique advantage over other underwriting firms. In fact, buy side credit analysts often contact us first when arranging investor meetings, discussing issuer credit trends, and addressing political and financial trends. Sizable Institutional Tier 1 Sales Effort. HilltopSecurities sales professionals cover approximately 1,360 major institutional Tier 1 accounts. These investors typically serve as “anchor orders” during the pricing process and can activate incremental investor participation as Tier 1 participation signals to the market that there will be a robust secondary market for RIH’s bonds. Given the high credit quality and strong name recognition of RIH, we anticipate robust participation from this investor universe in RIH’s upcoming financing. Incremental Middle Market Distribution. HilltopSecurities has 39 middle market sales professionals focused on coverage of mid-market Tier 2 and Tier 3 institutions, which are comprised of small to mid-sized institutions. This significant depth of coverage provides HilltopSecurities with a competitive advantage in which we can provide incremental account coverage to our issuer clients with the goal of maximizing the investor base ahead of upcoming bond financings. Coverage of mid-market Tier 2 and 3 institutions can be a critical component of any pricing because their participation may keep a few Tier 1 investors from dictating pricing levels. Our group also works with small and midsize banks, providing an additional means of distribution. Only a few other firms see as many deals as our underwriting desk. When combining municipal advisory, competitive and negotiated underwriting, HilltopSecurities’ Public Finance has completed 4,581 transactions for over $232 billion between 2020 and 2024. HilltopSecurities’ desk prices as municipal underwriter (both competitive and negotiated) and financial advisor on average 18 issues per week (approximately $862 million in par amount). This ranks as the #5 national municipal investment bank but with a regional and local reputation. The real value HilltopSecurities will bring to your financing is the ability to evaluate multiple alternatives to improve your cost of capital. This could come as a public offering, private placement, proceeds reinvestment, higher rating, or any combination. HilltopSecurities is always on the watch for options and ideas that provide benefit to our clients. We look forward to creating a working relationship with the City in any way you determine beneficial to your financing needs. HilltopSecurities is ready to accept the challenge and demands of being your sole managing underwriter. 9. Non-Collusion Affidavit (Attachment 1) Presentations must include an executed Non-Collusion Affidavit, included as Attachment 1, executed by an official authorized to bind the firm. HilltopSecurities includes its Non-Collusion Affidavit executed by an official authorized to bind the firm in Appendix A. Transactions Assets 4,581 $232 billion Investment Bank (2020-24) #5 National Municipal © 2025 Hilltop Securities Inc. All rights reserved. Member FINRA/SIPC/NYSE City of La Quinta, California Appendix A Non-Collusion Affidavit (Attachment 1) Ap p e n d i x A Page 7 of 7 ATTACHMENT 1 NON-COLLUSION AFFIDAVIT FORM Must be executed by submitter and submitted with the presentation I, ________________________________________ (name) hereby declare as follows: I am _________________________________ of ______________________________, (Title) (Company) the party making the foregoing presentation, that the presentation is not made in the interest of, or on behalf of, any undisclosed person, partnership, company, association, organization, or corporation; that the presentation is genuine and not collusive or sham; that the submitter has not directly or indirectly induced or solicited any other submitter to put in a false or sham presentation, and has not directly or indirectly colluded, conspired, connived, or agreed with any submitter or anyone else to put in a sham presentation, or that anyone shall refrain from proposing; that the submitter has not in any manner, directly or indirectly, sought by agreement, communication, or conference with anyone to fix the presentation price of the submitter or any other submitter, or to fix any overhead, profit, or cost element of the presentation price, or of that of any other submitter, or to secure any advantage against the public body awarding the agreement of anyone interested in the proposed agreement; that all statements contained in the presentation are true; and, further, that the submitter has not, directly or indirectly, submitted his or her presentation price or any breakdown thereof, or the contents thereof, or divulged information or data relative hereto, or paid, and will not pay, any fee to any corporation, partnership, company, association, organization, presentation depository, or to any member or agent thereof to effectuate a collusive or sham presentation. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Submitter Signature: __________________________________________________ Submitter Name: __________________________________________________ Submitter Title: __________________________________________________ Company Name: __________________________________________________ Address: __________________________________________________ Mike Cavanaugh Managing Director Hilltop Securities Inc. Mike Cavanaugh Managing Director Hilltop Securities Inc. 777 South Highway 101, Suite 104, Solana Beach, CA 92075