Harrell & Company/Financial Advisory Services 14Harrell & Company Advisors, LLC
May 14, 2014
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: Proposal for Financial Advisory Services
Dear Frank:
I am pleased to provide a proposal for financial advisory services in connection with the Successor
Agency to La Quinta Redevelopment Agency's Tax Allocation Refunding Bonds ("Refunding
Bonds'. It is expected that the Refunding Bonds will refinance the former Redevelopment Agency's
2004 Loan securing the La Quinta Financing Authority's Local Agency Revenue Bonds, 2004 Series
A. The anticipated bond size is expected to be $72 million.
Scope of Services
Harrell & Company proposes to perform the services listed below.
Projected Tax Revenues/RP=. Prepare updated 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. Work with the Underwriter to size the Refunding Bonds and structure bond
repayment terms and conditions which most advantageously meet current market conditions
and the objectives of the Successor Agency. Review the Underwriter's 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.
The City Tower, 333 Cit' Boulevard West, Suite 1430, Orange; California 92868
Tel: 714.939.1464 Fax: 714.939.1462
Frank Spevacek
May 14, 2014
Page 2
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.
5. Rating Agency Meetings. Submit documents, conduct negotiations and attend meetings with
rating agencies as may be required. .
6. Official Statement. Review and comment on the preliminary and final Official Statements to
be used in connection with the offering of the Refunding Bonds.
7. Disclosure Issues. Provide technical support in defining disclosure issues necessary to meet
SEC guidelines, as well as, work with the Successor Agency to fulfill its continuing disclosure
responsibilities under the Securities and Exchange Commission Rule 15c2-12.
8. 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;
■ provide the Successor Agency with a pricing analysis and comparison of its transaction
with other recent sales of comparable credit quality; and
■ provide quantitative scheduled showing the results of the final pricing.
9. 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.
10. 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 $4,500 for preparation of the update. to Tax Revenue/RPT1=F Projections and
Project Area statistical information suitable for inclusion in the official statement and meeting
rating agency and investor criteria;
♦ A fixed fee of $37,500 for all other financial advisory services in connection with the
Refunding Bonds as described under the scope of services
♦ Out -of pocket expenses at cost not to exceed $1,500.
Frank Spevacek
May 14, 2014
Page 3
Fees are contingent on the successful closing of.the Refunding Bonds and delivery of funds.
In connection with the services described above, Harrell & Company advises the Successor Agency
that it owes a fiduciary duty to the Successor Agency, in that Harrell & Company must deal honestly
and -in good faith with the Successor Agency and to act in the Successor Agency's best interests
without regard to financial or other interests of Harrell & Company. Harrell & Company is not aware
that the services to be provided as described above give rise to any conflict of interest that might.
impair their ability to satisfy the duty of loyalty under the MSRB's Rule regarding Fiduciary Duty of
Municipal Advisor.
I look forward to the opportunity to work with the Successor Agency. If you need any additional
information or have any questions, please do not hesitate to contact me.
Very truly yours,
Suzanne Harrell
Accepted by:
Frank Spevacek, Successor Agency Executive Director