Harrell & Co. Advisors/Financial Advisory Services 16October 12, 2016
Frank Spevacek
City Manager
City of La Quinta as Successor Agency to the La Quinta Redevelopment Agency
78- 495 Calle Tampico
La Quinta, CA 92253
RE: Amended Proposal for Financial Advisory Services
Dear Frank:
In May 2016, I provided a proposal for financial advisory services in connection with the Successor
Agency to La Quinta Redevelopment Agency's Tax Allocation Refunding Bonds ("Refunding
Bonds"). The Refunding Bonds will refinance the former Redevelopment Agency's $6,000,000 La
Quinta Redevelopment Project Area No. 2, Subordinate Taxable Tax Allocation Bonds, Series 2011
and 2011 Loan Obligation relating to the La Quinta Financing Authority's Local Agency Subordinate
Taxable Revenue Bonds, 2011 Series A. The anticipated bond size is expected to be $35 million.
Due to circumstances which require a change in our compensation method, we are amending our
proposal to provide for payment of our fee not contingent on the bond closing. This change does
not relieve us of our fiduciary duty to the Successor Agency, as described herein. All other terms
remain the same, and are restated below.
Scope of Services
Harrell & Company proposes to perform the services listed below.
1. Projected Tax Revenues/RPTTF. Prepare projections of Tax Revenues/RPTTF moneys
pledged to repay debt service and Project Area statistical information suitable for inclusion in
the Official Statement and meeting rating agency and investor criteria.
2. Bond Sizing. Review the Underwriter's proposed sizing and structure, refunding cashflows
and arrangements for defeasance escrows.
3. Prepare any materials that might be requested by the Department of Finance in connection
with the issuance of the Refunding Bonds.
4. Document Review. Review and comment on all legal documents prepared by the Successor
Agency's bond counsel to ensure conformance with the proposed financing structure.
The City Tower, 333 City Boulevard West, Suite 1430, Orange, California 92868
Tel: 714.9391464 Fax: 714.939.1462
Frank Spevacek
October 12, 2016
Page 2
5. Rating Agency Meetings. Submit documents and attend meetings with rating agencies as may
be required.
6. Official Statement. Review and comment on the preliminary and final Official Statement to
be used in connection with the offering of the Refunding Bonds.
7. Pricing. For the negotiated sale with of the Refunding Bonds:
■ advise the Successor Agency on the propriety of the underwriter's pricing and
compensation relative to the current market conditions;
■ negotiate to provide the lowest available rates and costs to the Successor Agency; and
■ provide the Successor Agency with a pricing analysis and comparison of its transaction
with other recent sales of comparable credit quality, or review such analysis prepared
by the Underwriter.
8. Bond Closing. Review and coordinate arrangements for closing and delivery of the Refunding
Bonds, paying particular attention to needed certificates and representations of other parties
to ensure certification of information relied upon in the financing.
9. Attendance at Meetings. Attend all meetings relating to the financing with Successor Agency
staff, bond counsel and disclose counsel as required.
Fees
The following fees are proposed for the Refunding Bonds:
♦ A fixed fee of $15,000 for preparation of Tax Revenue/RPTTF Projections and Project Area
statistical information suitable for inclusion in the official statement and meeting rating agency
and investor criteria;
♦ A fixed fee of $25,000 for all other financial advisory services in connection with the
Refunding Bonds as described under the scope of services; and
♦ Out -of pocket expenses at cost not to exceed $1,500.
Fees are not contingent on the closing of the Refunding Bonds and delivery of funds.
Frank Spevacek
October 12, 2016
Page 3
Municipal Advisor Disclosures Pursuant to Rule G-42
In connection with recent changes to the federal securities laws that require persons providing advice
to municipal issuers to register with the Securities and Exchange Commission (SEC) and the Municipal
Securities Rulemaking Board (MSRB), I wanted to notify you with respect to this transaction that
Harrell & Company will owe a fiduciary duty to the Successor Agency and will carry out its duties in
accordance with such duty. Simply put, this means that we owe you both a duty of loyalty and a duty
of care and that in performing services described herein, we will put the needs of the Successor Agency
ahead of our own. This standard of care is higher than that required of other financial services
providers such as underwriters.
We have determined, after exercising reasonable diligence, we have no known material conflicts of
interest that would impair our ability to provide advice to the Successor Agency in accordance with
our fiduciary duty to municipal entity clients such as the Successor Agency. To the extent any such
material conflicts of interest arise after the date of our engagement we will inform you of such conflicts
as described below.
The Successor Agency may terminate our services at any time upon written notice. If the Successor
Agency terminates our services we would expect to be reimbursed for actual out-of-pocket expenses
associated with the transaction. We may withdraw from our representation as Municipal Advisor
upon written notice to the Successor Agency subject to the fiduciary duty described above which may
require us to continue to represent the Successor Agency until an appropriate replacement is identified
which will depend on the status of the transaction.
We are registered as a "municipal advisor" pursuant to Section 15B of the Securities Exchange Act
and rules and regulations adopted by the SEC and the MSRB. As part of this registration we are
required to disclose to the SEC information regarding criminal actions, regulatory actions,
investigations, terminations, judgments, liens, civil judicial actions, customer complaints, arbitrations
and civil litigation involving us. Pursuant to MSRB Rule G-42, we are required to disclose any legal
or disciplinary event that is material to the Successor Agency's evaluation of us or the integrity of our
management or advisory personnel.
No such event exists with respect to us.
Copies of our filings with the United States Securities and Exchange Commission can currently be
found by accessing the SEC's EDGAR system Company Search Page which is currently available at
https://www.sec.gov/edgar/searchedgar/companysearch.html and searching for either "Harrell &
Company" or for our CIK number which is 0001610917.
Frank Spevacek
October 12, 2016
Page 4
Very truly yours,
< ��� 4 A 4, C - (", ,
Suzanne Harrell
Accepted by:
ATTEST:
icy Executive Director
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Susan Maysels, Cityrk
La Quinta, California
r' I M r 4 .ice
Of MEMORANDUM
TO: Frank J. Spevacek, City Manager
FROM: Gil Villalpando, Management Specialist
DATE: November 2, 2016
RE: APPROVE AMENDED AGREEMENTS WITH HARRELL AND COMPANY
ADVISORS, LLC, AS MUNICIPAL ADVISOR AND NORTON ROSE FULLBRIGHT
US LLP, AS DISCLOSURE COUNSEL IN CONNECTION WITH 2016 BOND
FINANCING FEES FOR SERVICES
Attached for your signature are the Amended Agreements with Harrell and Company
Advisors, LLC, as Municipal Advisors and Norton Rose Fulbright US LLP, as Disclosure
Council.
Please sign the attached agreement(s) and return to the City Clerk for processing and
distribution.
Requesting department shall ch,@ck and attach the items below as appropriate:
_X_ Contract payments will be charged to account number: TBD by Finance
_X_ Amount of Agreement, Amendment, Change Order, etc.: $41,000 H & C; $45,000 NRF
_N/A_ A Conflict of Interest Form 700 Statement of Economic Interests from Consultant(s) is attached with
no reportable interests in LQ or reportable interests
_N/A_ A Conflict of Interest Form 700 Statement of Economic Interests is not required because this Consultant
does not meet the definition in FPPC regulation 18701(2).
Authority to execute this agreement is based upon:
_X_ Approved by the Successor Agency on November 1. 2016
_N/A_ City Manager's signature authority provided under Resolution No. 2015-045 for budgeted expenditures
of $50,000 or less
_N/A_ Initial to certify that 3 written informal bids or proposals were received and considered in selection
The foilowing required documents are attached to the agreement:
_N/A_ Insurance certificates as required by the agreement (approved by Risk Manager on date)
_N/A_ Performance bonds as required by the agreement (originals)
_N/A_ City of La Quinta Business License number
_N/A_ Purchase Order number