CITY OF GLENDALE, CALIFORNIA REPORT TO THE:

Joint D City Council [8:J CITY OF GLENDALE, CALIFORNIA REPORT TO THE: Housing Authority D Successor Agency D Oversight Board D February 23, 2016 AGENDA ITEM Report: Financial Advisory and Legal Services for Proposed Glendale Water and Power (GWP) Electric (Refunding) Revenue Bonds 2016 1. Motion authorizing the City Manager, or his designee, to execute a Professional Services Agreement with Public Financial Management, Inc. (PFM) to act as GWP's Financial Advisor for Proposed 2016 Electric (Refunding) Revenue Bonds in the not-to-exceed amount of $80,000 2. Motion authorizing the City Manager, or his designee, to execute a Legal Services Agreement with Nixon Peabody, LLP to act as GWP's Bond Counsel and Disclosure Counsel for Proposed 2016 Electric (Refunding) Revenue Bonds in the not-to-exceed amount of $100,000 3. Resolution of Appropriation to Transfer Funds From Account 25300-552 to Project 43110-552-911-15063-UE093 COUNCIL ACTION Public Hearing D Ordinance D Consent Calendar [8:J Action Item D Report Only D Approved for calendar ADMINISTRATIVE ACTION XS Submitted by: Stephen M. Zurn, General Manager - GWP ( Robert P. Elliot, Director of Finance MtL Prepared by: David Davis, Utility Finance Manager Approved by: Scott Ochoa, City Manager Reviewed by: Yasmin K. Beers, Assistant City Manager Michael J. Garcia, City Attorney 2 I

RECOMMENDATION Glendale Water and Power (GWP) staff respectfully recommends that the City Council authorize the City Manager, or his designee, to execute a (1) Professional Services Agreement (PSA) with Public Financial Management (PFM) to serve as GWP's financial advisor in the not to exceed amount of $80,000, and (2) an agreement with Nixon Peabody, LLP to serve as GWP's bond counsel and disclosure counsel advisor in the not to exceed amount of $100,000 for the purpose of assisting GWP in connection with the proposed issuance of $87,515,000 in taxexempt bonds secured by revenues of the electric utility to refund (refinance) the electric revenue bonds issued in 2006 and the electric revenue bonds issued in 2008 and (3) a Resolution of Appropriation is required in transferring funds from Account 25500-552 to Project 43110-552-911-15063-UE093 BACKGROUND/ANALYSIS In 2006, the City of Glendale issued electric revenue bonds in the amount of $38,830,000 (current balance remaining of $27,515,000) to refund the outstanding Electric Revenue Bonds, 2000 Series. Ten years after issuance, the outstanding bonds become callable at the option of GWP. The average interest rate remaining on the 2006 bonds is 4.52%. With the current interest rates, it is estimated that the average yield on the new bonds (approximately 2.15%) will be much lower giving the Electric utility a present value savings of approximately $3.3 million over the life of the bonds. In 2008, the City of Glendale issued electric revenue bonds in the amount of $60,000,000 to fund capital improvements to the electric system. The average interest rate remaining on the 2006 bonds is 4.67%. With the current interest rates, it is estimated that the average yield on the new bonds (approximately 2.89%) will be much lower giving the Electric utility a present value savings of approximately $3.2 million over the life of the bonds. Since interest rates are near historic lows for tax-exempt bonds, timing is excellent to refinance the bonds at lower interest rates and use the savings to increase the cash reserves of the electric utility. In October of 2015, GWP staff issued Requests for Proposal (RFP) to various firms for (1) financial advisory services and for (2) bond and disclosure counsel services in conjunction with the potential issuance of electric revenue bonds for the proposed Grayson Power Plant Repowering. Subsequently, GWP issued an addendum to the proposers seeking pricing to provide financial services and bond/ disclosure counsel services in connection with the refinancing of the 2006 and 2008 bonds. Responding firms confirmed that their pricing would remain the same for the 2006 and 2008 refunding project. GWP received one proposal offering financial advisor services and three proposals for bond and disclosure counsel services. The firm that submitted the proposal to provide financial advisory services was Public Financial Management, Inc. (PFM). PFM has served as the City's financial advisor the Electric utility for bonds issued in 2003, 2006, 2008 and 2013. PFM's significant expertise in the electric industry brings GWP added credibility with rating agencies, credit enhancement providers, and investors. They have a fully dedicated municipal utility group with local expertise in Los Angeles. The services of PFM would include financial planning, detailed financial modeling, coordinate the competitive bidding process, and financing considerations that will directly benefit GWP. The three firms that submitted proposals for bond and disclosure counsel were: Nixon Peabody Norton Rose Fulbright Orrick, Herrington & Sutcliffe $100,000 $105,000 $275,000 2

GWP recommends that the City Council authorize a contract with Nixon Peabody for the proposed 2006 and 2008 refunding. In addition to submitting the lowest priced proposal, Nixon Peabody is a nationally recognized bond counsel firm with more than thirty years of experience in all areas of public finance. The services of Nixon Peabody would include preparation of all legal documents needed to issue bonds, preparation of all documents to bid the bonds on a competitive basis, preparation of all necessary closing documents and providing all necessary and customary legal opinions relating to the tax exemption of interest on the bonds. Nixon Peabody will also prepare the Preliminary Official Statement and the final Official Statement and will serve as disclosure counsel and deliver the Disclosure Counsel opinion. FISCAL IMPACT The proposed refinancing of the 2006 bonds is expected to save on average approximately $200,000 per year in interest expense (current interest rate is approximately 2.15%) and a present value savings of approximately $3.3 million over the life of the bonds. The proposed refinancing of the 2008 bonds is expected to save on average approximately $160,000 per year in interest expense (current interest rate is approximately 2.89%) and a present value savings of approximately $3.2 million over the life of the bonds. The PFM Group proposes to act as GWP's financial advisor for an amount not-to-exceed $80,000. Nixon Peabody, LLP proposes to act as GWP's bond counsel and disclosure counsel for an amount not to exceed $100,000. Other expenses of approximately $120,000 include rating agency fees, trustee fees, advertising and printing expenses. These fees would only be paid if the bonds are issued. The total cost of to refund the bonds is $300,000 Therefore, staff respectfully requests a Resolution of Appropriation transferring funds from Account 25-:l00-552 to Project 43110-552- 911-15063-UE093. ALTERNATIVES Alternative 1: City Council may authorize the retention of PFM Group and Nixon Peabody, LLP to assist GWP with the proposed refunding of the 2006 and 2008 Electric bonds. Alternative 2: City Council may consider not refunding the bonds or may consider retaining a financial advisor other than PFM or may consider retaining a law firm other than Nixon Peabody, LLP to serve as bond and disclosure counsel. Alternative 3: City Council may consider any other alternative not proposed by staff. CAMPAIGN DISCLOSURE Campaign Disclosure Form for Public Financial Management, Inc. (PFM) attached as Exhibit 1. Campaign Disclosure Form for Nixon Peabody, LLP attached as Exhibit 2. EXHIBIT(S) Exhibit 1: Campaign Disclosure Form - Public Financial Management, Inc. (PFM) Exhibit 2: Campaign Disclosure Form - Nixon Peabody, LLP 3

MOTION Moved by Council Member, seconded by Council Member, that the City Manager or his designee is authorized to execute a Professional Services Agreement (PSA) with Public Financial Management, Inc. (PFM) to act as GWP's Financial Advisor for the proposed 2016 Electric (Refunding) Revenue Bonds. The PSA shall be in an amount not to exceed $80,000. The PSA shall be in a form approved by the City Attorney. Vote as follows: Ayes: Noes: Absent: Abstain: APPROVED AS TO FORM ;1~4=;.;. ~TTORNEY DA1E ZIL ~//-6 \\Ca2000\data\Shared\FILES\DOCFILES\FACTFIND\profservices GWP PFM financial 2016 Electric Refunding.doc 2 A I

MOTION Moved by Council Member, seconded by Council Member, that the City Manager or his designee is authorized to execute a Professional Services Agreement (PSA) with Nixon Peabody, LLP to act as GWP's Bond Counsel and Disclosure Counsel for the proposed 2016 Electric (Refunding) Revenue Bonds. The PSA shall be in an amount not to exceed $100,000. The PSA shall be in a form approved by the City Attorney. Vote as follows: Ayes: Noes: Absent: Abstain: APPROVED Aj TO FORM ~I~ ;!fxatiorney DATE 211 J I (b \\Ca2000\data\Shared\FILES\DOCFILES\F ACTFIND\prof services GWP Nixon Peabody Bond & Disclosure Counsel Electric Refunding.doc 2 B I

RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF GLENDALE MAKING AN APPROPRIATION BE IT RESOLVED BY THE COUNCIL OF THE CITY OF GLENDALE: SECTION 1: That the sum of $300,000 is hereby appropriated and/or transferred from the following accounts to the following accounts: ACCOUNTS DESCRIPTION FROM TO 25300-552 Undesignated Fund Balance, Electric Works Revenue $300,000 Fund 43110-552-911-15063, Contractual Services, Electric Works Revenue Fund, $300,000 UE093 GWP Administration, ES Bond Sale Exp 2016 Refund To execute a Professional Services Agreement with Public Financial Management, Inc. to act as GWP's Financial Advisor and to execute a Legal Services Agreement with Nixon Peabody, LLP to act as GWP's Bond Counsel and Disclosure Counsel for Proposed 2016 Electric (Refunding) Revenue Bonds. SECTION 2: The Director of Finance is authorized to make such other revisions, individual appropriation line-items, changes in summaries, fund totals, grand totals, and other portions of the budget document as necessary to reflect and implement the changes specified in this resolution. SECTION 3: The City Clerk shall certify to the adoption of this Resolution. Adopted this day of, 2016. ATTEST: City Clerk Mayor CITY OF GLENDALE DATE ----------- " APPROVED AS TO FINANCIAL PRUVISION FOR $ 300 000 STATE OF CALIFORNIA) COUNTY OF LOS ANGELES ) SS CITY OF GLENDALE ) flt~. ~Director of Finance I, Ardashes Kassakhian, City Clerk of the City of Glendale, do hereby certify that the for going Resolution No. was adopted by the Council of the City of Glendale, California, at a regular meeting held on the day of, 2016, and that the same was adopted by the following vote: Ayes: Noes: Absent: Abstain: APPROVED AS TO FORl\i? ~ cfrvatiorn8' DATI: Zit i /H City Clerk 2 C I

City of Glendale DISCLOSURE CAMPAIGN FINANCE ORDINANCE The City Council adopted Ordinance No. 5744, "Campaign Finance Ordinance; which became effective on September 9, 2011, and amended II with Ordinance No. 5768, which became effective on March 15, 2012 ('the Ordinancej. The Ordinance prohibits: (1) A contractor (Including a subconlraclor"')- who has a contract with the City of Glendale rc11y"), Glendale Redevelopment Agency rgra'), or the Housing Authority of the City of Glendale ("HAj and that contract is subject to approval by the City Council, GRA, or HA- from making a conbibution to a City Council member, GRA member, HA member, City Clerk, or City Treasurer; and (2) Council members, GRA membe!s, and HA members from voting on matters concerning a contract with a person who has provided a campaign contribution. The Ordinance applies to a contractor whose conbact requires the City Councirs, GRA's, or HA's approval A contract with the City, GRA, or HA Is known as a "City Conbact" The Ordinance also applies lo a subcontractor who has a subcontract through a City Contract The Ordinance excludes a competitively bid contract awarded to the lowest responsble bidder. To assist members d!he Clly Council, GRA, and HA be la re they vote on a matter regarding a Cly Contract, the Orcinanca requires City staff to prepare this report which discloses certain information about the contractor receiving the City Contract, and the subcontractor(s) working IJllder the City Contract. A contractor must orovlda the information listed below when: The City Contract has a total anticipated or actual value of $50,000 or more; or A comblnatton or series of City Contracts have a value of $50,000 or more. A subcontractor must orovltla the lnfonnation listed below when: The subcontract through a City Contract has a total an/le/pated or actual value of $25,000 or more: or A combination or series of subcontracts, for the same or tflfferent projects, have an """""'Ste value of $25.000 or more. Information that must be disclosed: Name of the person, entity, or organization (i.e., the Contractor or Subcontractor) Name of the Chief Executive Officer/President Chief Operating Officer Chief Financial Officer Chairperson All members of the Board of Directors Alf persons who own more than 10% of the person, entity, or organization Name of any campaign commiltee owned or controlled by the person, entity, or organization Please comp/ala the following dlsclosure fonn: Contractor s : Name Address "Contraclo,. is the person, entity, or organization that Is the party, or prospective party, to the contract wnh the City, GRA, or HA or any member of that person's, entity's, or organization's Board of Directors, its Chairperson, Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, any person with an ownership interest of more than ten percent (10%) In that person, entity, or organization, and any campaign commrtee thal is owned or controlled by that peison, entity, or organization. AfJa.le please disclose these persons' name and business address. m >< ::c - m - -I..a.

Subcontractorlsl.. : Name. Address Full Name Title Business Address CIN.....,,.... Not A Chairperson State ZID Chief Executive Officer I President Chief O""ratina Officer Chief Financial Officer Board of Directors More than 10% interest owner.. "Subcontractol" is the person, entity, or organization that has entered into a contract for the performance of alt or a portion of the work undertaken under an agreement with an architect, design professional, engineer, or general or prime contract, usually by a general or prime contractor. Subcontractor includes any member of that person's, entity's, or organization's Board of Directors, its Chairperson, Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, any person with an ownership Interest of more than ten percent (10%) in that person, entity, or organization, and any campaign commiltee that is owned or controlled by that person, entity, or organization. Above please disclose these persons' name and business address. Campaign Committee owned or controlled by:--------------------- I BL1Siness Address I State I Zip On behalf of the above-named 00 Contractor 0 Subcontractor: CERTIFICATION I acknowledge that I have a continuing obllgahon to update this disclosure form if I substitute- or If I select addltional- archllects, design professionals, contractors, or subcontractors within ten (10) days of the selection or change; and I hereby certify that: I have identified au persons for which the Ordinance requires disclosure; The Information in this disclosure form (and any attachment to this form) is true, accurate, correct, and complete; and I have been legally authorized to submit this disclosure form. In total, this disclosure form (Including attachments) is (3) pages. Executed on: Eebnracy 3rd, 20Ja_, at: I os Angeles California. Signature: &"",,;::;:t... i---- - ~ ----- Print Eull Name: Michael Berwanger Address: 601 South Figueroa Street. Suite 4500, Los Angeles, CA 90017 Phone Number: 1213) 489-4075 Rev. 617/12 E-mail Address: berwangerm@pfm.com J:IFll.ES'LlOCFILES\OROICAMPAIGN CONTRllllJ'lfON\lllSCLOSURE FORM -CONTRACTOR - 8-7-12.doc:

-- miliiil I' F \ 1 _,,-- 'E~ The PFM Group :;:: Financial & hr11.:j.11111;111 A11u1,.111:. Public Financial Management, Inc. ("PFM") Officers & Directors Name John Bonow Martin Margolis Stephen Boyle F. John White Address Two Logan Square, Suite 1600 18'" & Arch Streets Philadelphia, PA 19103 One Keystone Plaza, Ste. 300 North Front & Market Streets Harrisburg, PA 17101 Two Logan Square, Ste. 1600 1 a111 & Arch Streets Philadelphia, PA 19103 Two Logan Square, Ste. 1600 18 111 & Arch Streets Philadelphia, PA 19103 Title President/CEO & Director Treasurer & Director Secretary& Director Chairman & Director

City of Glendale DISCLOSURE - CAMPAIGN FINANCE ORDINANCE The City Council adopted Ordinance No. 5744, "Campaign Finance Ordinance," which became effective on September 9, 2011, and amended it with Ordinance No. 5768, which became effective on March 15, 2012 ("the Ordinance"). The Ordinance prohibits: (1) A contractor* (including a subcontractor**)- who has a contract with the City of Glendale ("City"), Glendale Redevelopment Agency ("GRA"), or the Housing Authority of the City of Glendale {"HA") and that contract is subject to approval by the City Council, GRA, or HA- from making a contribution to a City Council member, GRA member, HA member, City Clerk, or City Treasurer; and (2) Council members, GRA members, and HA members from voting on matters concerning a contract with a person who has provided a campaign contribution. The Ordinance applies to a contractor whose contract requires the City Council's, GRA's, or HA's approval. A contract with the City, GRA, or HA is known as a "City Contract" The Ordinance also applies to a subcontractor who has a subcontract through a City Contract The Ordinance excludes a competitively bid contract awarded to the lowest responsible bidder. To assist members of the City Council, GRA, and HA before they vote on a matter regarding a City Contract, the Ordinance requires City staff to prepare this report which discloses certain information about: the contractor receiving the City Contract, and the subcontractor(s) working under the City Contract. -.. ;.,:,,.. _,,..,,,'.;.. ~ ~"" :;,.: \,_.&._ r~nan~.,.. _. -.- ;"". The City Contract has a total anticipated or actual value of $50,000 or more; or A combination or series of City Contracts have a value of $50,000 or more. The subcontract through a City Contract has a total anticipated or actual value of $25,000 or more; or A combination or series of subcontracts, for the same or different projects, have an annre!'.late value of $25,000 or more. lnfonnation that must be disclosed: Name of the person, entity, or organization (i.e., the Contractor or Subcontractor) Name of the Chief Executive Officer/President Chief Operating Officer Chief Financial Officer Chairperson NI members of the Board of Directors All persons who own more than 10% of the person, entity, or organization Name of any campaign committee owned or controlled by the person, entity, or organization Please complete the,.tol~o"f Contractorls I*: / I / / f ij disclosure fonn: ''.--',;....:: ---~ -.. 'i...,~.,!'p" ~' -..,,,,,:,.- Chairperson Chief Executive Officer I President Chief Operating Officer Chief Financial Officer Board of Directors More than 10% interest owner "Contractor" is the person, entity, or organization that is the party, or prospective party, to the contract with the City, GRA, or HA or any member of that person's, entity's, or organization's Board of Directors, its Chairperson, Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, any person with an ownership interest of more than ten percent (10%) in that person, entity, or organization, and any campaign committee that is owned or controlled by that person, entity, or organization. Above please disclose these persons' name and business address. ~ ::c - m - -I N

Subcontractorlsl**: f\j I 4... ::;~.:.; -.\.. ;:,., ::.-. : >l- ' _; _._.,_ :~ '.,_ii::c 11.. 1 ----- ~---~ -...,_,.,: _>,,' ""-Y. Chairperson Chief Executive Officer I President Chief Ooeratina Officer Chief Financial Officer Board of Directors More than 10% interest owner --;.,:-._-,<..--- ** "Subcontractor" is the person, entity, or organization that has entered into a contract for the performance of all or a portion of the work undertaken under an agreement with an architect, design professional, engineer, or general or prime contract, usually by a general or prime contractor. Subcontract.or includes any member of that person's, entity's, or organization's Board of Directors, its Chairperson, Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, any person with an ownership interest of more than ten percent (10%) in that person, entity, or organization, and any campaign committee that is owned or controlled by that person, entity, or organization. Above please disclose these persons' name and business address. Campaign Committee owned or controlled by: ---'A...,,J_,/--t~'""'------------------- On behalf of the above-named ~ntractor D Subcontractor: CERTIFICATION I acknowledge that I have a continuing obligation to update this disclosure form if I substitute- or if I select additional- architects, design professionals, contractors, or subcontractors within ten (10) days of the selection or change; and I hereby certify that: I have identified all persons for which the Ordinance requires disclosure; The information in this disclosure form (and any attachment to this form) is true, accurate, correct, and complete; and I have been legally authorized to submit this disclosure form. In total, this disclosure form (including attachments) is d,. pages. Executed on: f="'e1?r u~ '?,, 20J!e_, at: --~-o~->~~l\_,_,,,,_c._f_<'_s,..----,---:::---.' California. Signature: ~ld j }.ij:o? Print Full Name:....,,...,.,_"1--c::...;"'-""'----------- Address: 5.s-: r w.s+~_r +,ce tji/gfh Flooi; lo.s 4/ls( fr: > (II- ()O I~ Phone Number:".:?.. l3 j?{{q -{a D G q E-mail Address: f'.~ct {6@, l) i to.11 f C(J b~,(0-1--j Rev. 617/12 J:\FILES\OOCFILES\ORO\CAMPAIGN CONTRIBUTION\DJSCLOSURE FORM -CONTRACTOR -6-7-12.doc