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HomeMy WebLinkAboutAgr 2016-03-04 (Wulff Hansen)WULFF, HANSEN Sc CO. ESTABLISHED 1931 INVE STMENT BANKERS 351 CALIFORNIA STREET, SUITE 1000 SAN FRANCISCO 94104 (415) 42I-8900 March 3, 2016 Town of Tiburon Greg Chanis, Town Manager 1505 Tiburon Boulevard Tiburon, CA 94920 Re: Disclosures by Underwriter/Senior Managing Underwriter Pursuant to MSRB Rule G-17, Town of Tiburon potential assessment district for Hawthorne Terrace Undergrounding project Dear Mr Chanis: We are writing to provide you, as an appropriate representative of Town of Tiburon (Issuer), with certain disclosures relating to the above -captioned bond issue (Bonds), as required by the Municipal Securities Rulemaking Board (MSRB) Rule G-17 as set forth in MSRB Notice 2012-25 (May 7, 2012). We understand you intend to engage, or have engaged, us to serve as underwriter or placement agent, and not as a financial advisor or municipal advisor, in connection with the issuance of the Bonds. As part of our services as underwriter or placement agent, we may provide advice concerning the structure, timing, terms, and other similar matters concerning the issuance of the Bonds. If the underwriting syndicate for the Bonds should ultimately include one or more Co -Managers, you may also receive additional separate disclosure letters pursuant to Rule G-17 from them. 1. Disclosures Concerning the Underwriters' Role: (1) MSRB Rule G-17 requires an underwriter to deal fairly at all times with both municipal issuers and investors. (ii) The underwriters' primary role is to purchase the Bonds with a view to distribution in an arm's-length commercial transaction with the Issuer. The underwriters have financial and other interests that differ from those of the Issuer. (iii) Unlike a municipal advisor, the underwriters do not have a fiduciary duty to the Issuer under the federal securities laws and are, therefore, not required by federal law to act in the best interests of the Issuer without regard to their own financial or other interests. (iv) The underwriters have a duty to purchase the Bonds from the Issuer at a fair and reasonable price, but must balance that duty with their duty to sell the Bonds to investors at prices that are fair and reasonable. (v) The underwriters will review the official statement for the Bonds in accordance with, and as part of, their respective responsibilities to investors under the federal securities laws, as applied to the facts and circumstances of this transaction.' II. Disclosures Concerning the Underwriters' Compensation: The underwriter(s) will be compensated by a fee and/or an underwriting discount that will be set forth in the bond purchase agreement to be negotiated and entered into in connection with the issuance of the Bonds. Payment or receipt of the underwriting fee or discount will be contingent on the dosing of the transaction and the amount of the fee or discount may be based, in whole or in part, on a percentage of the principal amount of the Bonds. While this form of compensation is customary in the municipal securities market, it presents a conflict of interest since 'Under federal securities law, an issuer of securities has the primary responsibility for disclosure to investors. The review of the official statement by the underwriters is solely for purposes of satisfying the underwriters' obligations under the federal securities laws and such review should not be construed by an issuer as a guarantee of the accuracy or completeness of the information in the official statement. the underwriter(s) may have an incentive to recommend to the Issuer a transaction that is unnecessary or to recommend that the size of the transaction be larger than is necessary. III. Additional Conflicts Disclosures: Wulff, Hansen has not identified any additional potential or actual material conflicts that require disclosure. IV. Disclosures Concerning Complex Municipal Securities Financing: In accordance with the requirements of MSRB Rule G-17, if Wulff, Hansen recommends a "complex municipal securities financing" (such as a VRDO) to the Issuer, this letter is being or will be supplemented to provide disclosure of the material financial characteristics of that financing structure as well as the material financial risks of the financing that are known to us and reasonably foreseeable at that time. If you or any other Issuer officials have any questions or concerns about these disclosures, please make those questions or concerns known immediately to the undersigned. In addition, you should consult with the Issuer's own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent you deem appropriate. It is our understanding that you have the authority to bind the Issuer by contract with us, and that you are not a party to any conflict of interest relating to the subject transaction. If our understanding is incorrect, please notify the undersigned immediately. We are required to seek your acknowledgement that you have received this letter. Accordingly, please send me an email to that effect or sign and return the enclosed copy of this letter to me at the address set forth above. Depending on the structure of the transaction that the Issuer decides to pursue, or if additional potential or actual material conflicts are identified, we may be required to send you additional disclosures regarding the material financial characteristics and risks of such transaction and/or describing those conflicts. At that time, we also will seek your acknowledgement of receipt of any such additional disclosures. We look forward to working with you and the Issuer in connection with the issuance of the Bonds. Thank you. Sincerely, IZ /1 +ol (L) By: Mark Pressman Acknowl - dgement: Greg hanis, Town Manager Date: 5- /‘ WULFF, HANSEN & CO. ESTABLISHED 1931 IlVVE STMENT BaN1 ERS 351 CALIFORNIA STREET, SUITE 1000 SAN FRANCISCO 94104 (415) 421-8900 March 3, 2016 Town of Tiburon Greg Chanis, Town Manager 1505 Tiburon Boulevard Tiburon, CA 94920 Dear Mr Chanis: Recent regulatory changes mean that municipal underwriters will now be required to provide certain disclosures to potential clients as soon as discussions concerning a particular financing commence. This notice is required even if the potential project is in the very preliminary stages of discussion or development, long before your agency might be prepared to formally retain anyone to provide services in connection with it. Therefore, we are writing with regard to any discussions with you about a possible issuance of municipal securities in connection with a potential Hawthorne Terrace undergrounding assessment district project. MSRB Rule G-23, arising from provisions in the Dodd -Frank Wall Street Reform and Consumer Protection Act of 2009, requires that we make clear to you the nature of the relationship we would anticipate having with you regarding this possible transaction. As part of our services, we may provide advice concerning the structure, timing, terms, and other similar matters concerning an issue of municipal securities. However, as an underwriter, placement agent, or in a similar role we will be acting on our own behalf in a commercial, arm's length transaction and not as a municipal advisor or fiduciary to you regardless of whether we have acted or are currently acting as such on a separate transaction. The primary role of Wulff Hansen, as an underwriter or placement agent, is to purchase securities, for resale to investors, in an arm's-length commercial transaction between the Issuer and ourselves, or to place the securities directly with investors. Wulff Hansen has financial and other interests that differ from those of you, the Issuer. If you would like a municipal advisor that has legal fiduciary duties to you, then you are free to engage a municipal advisor to serve in that capacity. If you or your colleagues have any questions or concerns about these disclosures, then you should make those questions or concerns known immediately to us. The information we provide to you is not intended to be and should not be construed as "advice" within the meaning of Section 15B of the Securities Exchange Act of 1934 and we encourage you to consult with you own legal, accounting, tax, financial and other advisors, as applicable, to the extent you deem appropriate. Sincerely, Mark Pressman