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