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RA1980/10/2980 -91 ANAHEIM REDEVELOPMENT AGENCY October 29, 1980,11:00 A.M. Council Chamber Anaheim City Hall PRESENT: AGENCY MEMBERS: Kaywood, Bay, Roth and Overholt ABSENT: AGENCY MEMBERS: Seymour PRESENT: CITY MANAGER: William 0. Talley CITY ATTORNEY: William P. Hopkins SECRETARY: Linda D. Roberts EXECUTIVE DIRECTOR: Norman J. Priest REDEVELOPMENT MANAGER: Susan Schick Chairman Pro Tem Overholt called the regular meeting of the Anaheim Redevelopment Agency to order at 11:18 A.M. Said meeting was adjourned from the regular meeting held October 28, 1980, 1:30 P.M., for the purpose of considering the award of Redevelopment Project Alpha Tax Allocation Bonds, Series B. 161.137: AWARD OF REDEVELOPMENT PROJECT ALPHA TAX ALLOCATION BONDS SERIES B : Executive Director Norman J. Priest reported that two bids were received for the Redevelopment Project Alpha Tax Allocation Bonds, Series B, and to summarize the bids, he introduced Mr. Terry Comerford of Blyth Eastman Paine Weber, financial consultants to the Agency. Mr. Comerford reported that Blyth Eastman Paine Weber bid a figure of 10.103 %, while Merrill Lynch bid 10.236 %. The statutory limitation for agencies is a 10% coupon rate, with a 5% discount. He explained that the Notice of Sale stated if the successful bidder opts to take advantage of municipal bond insurance (which entitles the issue to a Triple A rating), the cost would be borne by the bidder; therefore the percentages bid reflected a net cost to the Agency. The difference in the two bids over the period of time would be $238,677.55. He noted that the percentage rates bid were high, and he would have recommended a delay until early in the Spring of 1981 in hopes of more favorable bid percentages, however the market was in disarray, many banks had this date raised their prime interest rates to 14.5 %, and it appeared the market was continuing to deteriorate. Therefore, he recommended that the Redevelopment Agency accept the lower of the two bids received, that of Blyth Eastman Paine Weber. In response to questions by Agency Member Bay, Mr. Comerford reported that the 10.103% bid of Blyth Eastman Paine Weber included a 4.9% discount, and final maturity of the 25 -year bonds would occur in the year 2005. Some of the improvements proposed to be paid for by the bond issue were st:1_11 subject to inflation, with no assurance that the rate would improve in the Spring of 1981. Executive Director Norman J. Priest noted that the principal use of the bond issue would be in the areas of the downtown storm drain project, second phase improvements, and some neighborhood preservation and prelim- inary work. He had been unable to find any concrete assurance that the market would improve in the immediate future, therefore,he recommended that those projects not be postponed. 80 -92 ANAHEIM REDEVELOPMENT AGENCY OCTOBER 29 1980 11:00 A.M. Mr. Bay questioned whether Mr. Comerford's opinion would have been different if the Agency had negotiated bids. Mr. Comerford replied that the terms of the two bids received were relatively close in interest and discount, which indicated the current bond market position. Mr. Bill Kramer of O'Melveny and Myers, legal consultants to the Agency, addressed the Redevelopment Agency responding to Mr. Bay's question about negotiated bids and competitive bids. He advised that the Agency had no options in that matter under the present Redevelopment law. He then called attention to several irregularities contained in the low bid. The Notice Inviting Bids provided that the Agency reserved the right to reject any and all bids and to elect to waive any irregularities and informalities in any bid received. The low bid was submitted in a timely manner and was accompanied by the proper good faith deposit check. The bid was unsigned; however,the representative of Paine Weber Jackson Curtiss was present and promptly signed the bid, and there was no question about the authen- ticity thereof. Further, Paine Weber submitted their bid on one of their bond forms, accompanied in the same envelope by a separate sheet of paper showing the interest rates, etc. In his opinion, there was no question about the authenticity of the bid,nor the intent of the bidder, and both of these irregularities could be waived. The third irregularity was that the bid, in response to the Notice Inviting Bids, properly stated a figure ($9,502,074.55) as the purchase price, which was approximately 90% of par. There would be no question if the bid stopped at that point, but another figure was added by way of explanation, which was not required, and the two figures did not add up. Within moments after the bids were opened, the correct figure was confirmed promptly by Mr. Richard Kellogg of the Los Angeles Blyth Eastman Paine Weber office, and there was no opportunity for manipulation of the bid. In response to question by Mr. Overholt, Mr. Kramer advised that if the incorrect discount figure were applied, the Blyth Eastman Paine Weber bid would remain the low bidder. Merrill Lynch, the second bidder, was aware of the irregularities contained in the Blyth Eastman Paine Weber bid. Mr. Roth stated he would support the award to the low bidder, but with reluctance, due to the high interest rate. He asked whether O'Melveny and Myers had consulted with the City Attorney's office on their recommendation. City Attorney William Hopkins indicated his concurrence with the recommen- dation of Agency Counsel O'Melveny and Myers, as expressed by Mr. Kramer. Responding to additional questions by Mr.Bay, Mr. Priest advised th,� the Agency's current cash balance was slightly in excess of four million dollars, and given the current financial flow and anticipated land acquisition, that would be essentially exhausted by March, 1981, without ..,, the money from the bond issue. Plans were prepared for the storm drain project in the downtown Project Alpha area, and it was anticipated to connect with the Carbon Channel after the rainy season is over in March. ANAHEIM REDEVELOPMENT AGENCY OCTOBER 29 1980 11:00 A.M. At the conclusion of the discussion, Mr. Overholt moved that the Anaheim Redevelopment Agency waive irregularities, as articulated by Bond Counsel, in the low bid submitted by Blyth Eastman Paine Weber, since said irregu- larities did not alter the bid. Mr. Bay seconded the motion. Mr. Seymour was absent. MOTION CARRIED. Mr, Bay offered Resolution No. ARA80 -40 for adoption. Refer to Resolution Book. RESOLUTION N0, ARA80 -40 RESOLUTION OF THE ANAHEIM REDEVELOPMENT AGENCY AWARDING $10,000,000 BONDS OF SAID AGENCY TO THE BEST BIDDER AND REJECT- ING ALL OTHER BIDS. ( Blyth Eastman Paine Weber) Roll Call Vote: AYES: AGENCY MEMBERS: Kaywood, Bay, Roth and Overholt NOES: AGENCY MEMBERS: None ABSENT: AGENCY MEMBERS: Seymour Chairman Pro Tem Overholt declared Resolution No. ARA80 -40 duly passed and adopted. Mr. Bay offered Resolution No. ARA80 -41 for adoption. Refer to Resolution Book. RESOLUTION NO. ARA80 -41 RESOLUTION OF THE ANAHEIM REDEVELOPMENT AGENCY APPOINTING PAYING AGENTS FOR BONDS. (Bank of America N.T. & S.A., in the Cities of Los Angeles and San Francisco, California; Continental Illinois National Bank and Trust Company of Chicago, in the City of Chicago, Illinois; and The Chase Manhattan Bank, N,A,, in the City of New York, New York) Roll Call Vote: AYES: AGENCY MEMBERS: NOES: AGENCY MEMBERS: ABSENT: AGENCY MEMBERS: Chairman Pro Tem Overholt and adopted, ADJOURNMENT There being Redevelopment Agency, Mrs motion, MOTION CARRIED, Kaywood, Bay, Roth and Overholt, None Seymour declared Resolution No, ARA80 -41 duly passed no further business to come before the Anaheim Kaywood moved to adjourn. Mr. Bay seconded the ADJOURNED: 11:45 A.M. S4"z� LINDA . ROBERTS, •SECRETA