Vernon City Council
December 5, 2023

SERVICES AGREEMENT BETWEEN THE CITY OF VERNON AND BLX GROUP LLC

FOR FINANCIAL ADVISORY SERVICES

COVER PAGE
Contractor: BLX Group LLC
Responsible Principal of Contractor: Craig Underwood, President Notice Information - Contractor: BLX Group LLC
355 S. Grand Avenue, Suite 2700
Los Angeles, CA 90071
Attention: Craig Underwood, President
Telephone: (213) 612-2200
Notice Information - City: City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
Attention: Scott Williams,
Director of Finance/City Treasurer
Telephone: (323) 583-8811 ext. 849
Commencement Date: December 5, 2023
Termination Date: December 4, 2024
Consideration: Total not to exceed $200,000 (includes all applicable sales tax); and more particularly
described in Exhibit B
Records Retention Period Three (3) years, pursuant to Section 11.20

SERVICES AGREEMENT BETWEEN THE CITY OF VERNON AND BLX GROUP LLC FOR

FINANCIAL ADVISORY SERVICES
This Agreement is made between the City of Vernon, a California charter City and California municipal corporation (“City”), and BLX Group LLC, a limited liability company (“Contractor”).

The City and Contractor agree as follows:

1.0 EMPLOYMENT OF CONTRACTOR. City agrees to engage Contractor to perform the services as hereinafter set forth as authorized by the City Council on December 5, 2023.

2.0 SCOPE OF SERVICES.

2.1 Contractor shall perform all work necessary to complete the services set forth in the City’s Request for Proposals issued on or about November 2, 2023 and titled RFP for Financial Advisory Services, and Contractor's proposal to the City ("Proposal") dated November 16, 2023, Exhibit “A”, a copy which is attached to and incorporated into this Agreement by reference.

2.2 All services shall be performed to the satisfaction of City.

2.3 All services shall be performed in a competent, professional, and satisfactory manner in accordance with the prevailing industry standards for such services.

3.0 PERSONNEL.

3.1 Contractor represents that it employs, or will employ, at its own expense, all personnel required to perform the services under this Agreement.

3.2 Contractor shall not subcontract any services to be performed by it under this Agreement without prior written approval of City.

3.3 All of the services required hereunder will be performed by Contractor or by City approved subcontractors. Contractor, and all personnel engaged in the work, shall be fully qualified and authorized or permitted under State and local law to perform such services and shall be subject to approval by the City.

4.0 TERM. The term of this Agreement shall commence on December 5, 2023, and it shall continue until December 4, 2024, unless terminated at an earlier date pursuant to the provisions thereof.

5.0 COMPENSATION AND FEES.

5.1 Contractor has established rates for the City of Vernon which are comparable to and do not exceed the best rates offered to other governmental entities in and around Los Angeles County for the same services. For satisfactory and timely performance of

the services, the City will pay Contractor in accordance with the payment schedule set forth in Exhibit “B” attached hereto and incorporated herein by reference.

5.2 Contractor's grand total compensation for the entire term of this Agreement, shall not exceed $200,000 without the prior authorization of the City, as appropriate, and written amendment of this Agreement.

5.3 Contractor shall, at its sole cost and expense, furnish all necessary and incidental labor, material, supplies, facilities, equipment, and transportation which may be required for furnishing services pursuant to this Agreement. Materials shall be of the highest quality. The above Agreement fee shall include all staff time and all clerical, administrative, overhead, insurance, reproduction, telephone, air travel, auto rental, subsistence, and all related costs and expenses.

5.4 City shall reimburse Contractor only for those costs or expenses specifically approved in this Agreement, or specifically approved in writing in advance by City.

Unless otherwise approved, such costs shall be limited and include nothing more than the following costs incurred by Contractor:

5.4.1 The actual costs of subcontractors for performance of any of the services that Contractor agrees to render pursuant to this Agreement, which have been approved in advance by City and awarded in accordance with this Agreement.

5.4.2 Approved reproduction charges.

5.4.3 Actual costs and/or other costs and/or payments specifically authorized in advance in writing and incurred by Contractor in the performance of this Agreement.

5.5 Contractor shall not receive any compensation for extra work performed without the prior written authorization of City. As used herein, “extra work” means any work that is determined by City to be necessary for the proper completion of the Project, but which is not included within the Scope of Services and which the parties did not reasonably anticipate would be necessary at the time of execution of this Agreement. Compensation for any authorized extra work shall be paid in accordance with the payment schedule as set forth in Exhibit “B,” if the extra work has been approved by the City.

5.6 Licenses, Permits, Fees, and Assessments. Contractor shall obtain, at Contractor’s sole cost and expense, such licenses, permits, and approvals as may be required by law for the performance of the services required by this Agreement. Contractor shall have the sole obligation to pay for any fees, assessments, and taxes, plus applicable penalties and

interest, which may be imposed by law and which arise from or are necessary for the performance of the Services by this Agreement.

6.0 PAYMENT.

6.1 As scheduled services are completed, Contractor shall submit to the City an invoice for the services completed, authorized expenses, and authorized extra work actually performed or incurred according to said schedule.

6.2 Each such invoice shall state the basis for the amount invoiced, including a detailed description of the services completed, the number of hours spent, reimbursable expenses incurred and any extra work performed.

6.3 Contractor shall also submit a progress report with each invoice that describes in reasonable detail the services and the extra work, if any, performed in the immediately preceding calendar month.

6.4 Contractor understands and agrees that invoices which lack sufficient detail to measure performance will be returned and not processed for payment.

6.5 City will pay Contractor the amount invoiced within thirty (30) days after the City approves the invoice.

6.6 Payment of such invoices shall be payment in full for all services, authorized costs, and authorized extra work covered by that invoice.

7.0 CITY'S RESPONSIBILITY. City shall cooperate with Contractor as may be reasonably necessary for Contractor to perform its services; and will give any required decisions as promptly as practicable so as to avoid unreasonable delay in the progress of Contractor's services.

8.0 COORDINATION OF SERVICES. Contractor agrees to work closely with City staff in the performance of Services and shall be available to City’s staff, consultants, and other staff at all reasonable times.

9.0 INDEMNITY. Contractor agrees to indemnify City, its officers, elected officials, employees and agents against, and will hold and save each of them harmless from, any and all actions, suits, claims, damages to persons or property, losses, costs, penalties, obligations, errors, omissions or liabilities (herein “claims or liabilities”), including but not limited to professional negligence, that may be asserted or claimed by any person, firm or entity arising out of or in connection with the work, operations or activities of Contractor, its agents, employees, subcontractors, or invitees, provided for herein, or arising from the acts or omissions of Contractor hereunder, or arising from Contractor’s performance of or failure to perform any term, provision, covenant or condition of this Agreement, except to the extent such

claims or liabilities arise from the gross negligence or willful misconduct of City, its officers, elected officials, agents or employees.

10.0 INSURANCE. Contractor shall, at its own expense, procure and maintain policies of insurance of the types and in the amounts set forth below, for the duration of the Agreement, including any extensions thereto. The policies shall state that they afford primary coverage.
i. Automobile Liability with minimum limits of at least $1,000,000 combined single limit, including owned, hired, and non-owned liability coverage. ii. Contractor agrees to subrogate automobile liability resulting from performance under this Agreement by agreeing to defend, indemnify and hold harmless, the City, and its respective employees, agents, and City Council from and against all claims, liabilities, suits, losses, damages, injuries and expenses, including all costs and reasonable attorney’s fees (“Claims”), which are attributable to any act or omission by the City under the performance of the services. The city of Vernon, its directors, commissioners, officers, employees, agents, and volunteers must be endorsed on the policy as additional insureds and under the Contractors’ policy shall be primary and non-contributory and will not seek contribution from the City’s insurance or self-insurance.
iii. General Liability with minimum limits of at least $1,000,000 per occurrence and $2,000,000 aggregate written on an Insurance Services Office (ISO) Comprehensive General Liability "occurrence" form or its equivalent for coverage on an occurrence basis.

Premises/Operations and Personal Injury coverage is required. The City of Vernon, its directors, commissioners, officers, employees, agents, and volunteers must be endorsed on the policy as additional insureds as respects liability arising out of the Contractor's performance of this Agreement. The additional insured coverage under the Contractor’s policy shall be primary and non-contributory and will not seek contribution from the City’s insurance or self-insurance. (1) If Contractor employs other contractors as part of the services rendered, Contractor's Protective Coverage is required. Contractor may include all subcontractors as insureds under its own policy or shall furnish separate insurance for each subcontractor, meeting the requirements set forth herein.
(2) Contractor agrees to subrogate General Liability resulting from performance under this Agreement by agreeing to defend, indemnify and hold harmless, the City, and its respective employees, agents, and City Council from and against all claims, liabilities, suits, losses, damages,

injuries and expenses, including all costs and reasonable attorney’s fees (“Claims”), which are attributable to any act or omission by the City under the performance of the services.
iv. Professional Errors and Omissions coverage in a sum of at least $2,000,000, where such risk is applicable. Applicable aggregates must be identified and claims history provided to determine amounts remaining under the aggregate. Contractor shall maintain such coverage for at least one (1) year after the termination of this Agreement. v. Contractor shall comply with the applicable sections of the California Labor Code concerning workers' compensation for injuries on the job. In addition, Contractor shall require each subcontractor to similarly maintain workers’ compensation insurance in accordance with the laws for California for all of the subcontractor’s employees. Compliance is accomplished in one of the following manners:
(1) Provide copy of permissive self-insurance certificate approved by the State of California; or
(2) Secure and maintain in force a policy of workers' compensation insurance with statutory limits and Employer's Liability Insurance with a minimal limit of $1,000,000 per accident. The policy shall be endorsed to waive all rights of subrogation against City, its directors, commissioners, officers, employees, and volunteers for losses arising from performance of this Agreement; or
(3) Provide a "waiver" form certifying that no employees subject to the Labor Code's Workers' Compensation provision will be used in performance of this Agreement.
vi. Each insurance policy included in this clause shall be endorsed to state that coverage shall not be cancelled except after thirty (30) days' prior written notice to City. vii. Insurance shall be placed with insurers with a Best's rating of no less than A-VIII. viii. Prior to commencement of performance, Contractor shall furnish City with a certificate of insurance for each policy. Each certificate is to be signed by a person authorized by that insurer to bind coverage on its behalf. The certificate(s) must be in a form approved by City. City may require complete, certified copies of any or all policies at any time. ix. Failure to maintain required insurance at all times shall constitute a default and material breach. In such event, Contractor shall immediately notify City and cease all performance under this Agreement until further directed by the City. In the absence of satisfactory insurance coverage, City may, at its option: (a) procure insurance with collection

rights for premiums, attorney's fees and costs against Contractor by way of set-off or recoupment from sums due to Contractor, at City's option; (b) immediately terminate this Agreement and seek damages from the Agreement resulting from said breach; or (c) self-insure the risk, with all damages and costs incurred, by judgment, settlement or otherwise, including attorney's fees and costs, being collectible from Contractor, by way of set-off or recoupment from any sums due to Contractor.

11.0 GENERAL TERMS AND CONDITIONS.

11.1 INDEPENDENT CONTRACTOR.

11.1.1 It is understood that in the performance of the services herein provided for, Contractor shall be, and is, an independent contractor, and is not an agent, officer or employee of City and shall furnish such services in its own manner and method except as required by this Agreement, or any applicable statute, rule, or regulation. Further, Contractor has and shall retain the right to exercise full control over the employment, direction, compensation and discharge of all persons employed by Contractor in the performance of the services hereunder. City assumes no liability for Contractor’s actions and performance, nor assumes responsibility for taxes, bonds, payments, or other commitments, implied or explicit, by or for Contractor. Contractor shall be solely responsible for, and shall indemnify, defend and save City harmless from all matters relating to the payment of its employees, subcontractors and independent contractors, including compliance with social security, withholding and all other wages, salaries, benefits, taxes, exactions, and regulations of any nature whatsoever.

11.1.2 Contractor acknowledges that Contractor and any subcontractors, agents or employees employed by Contractor shall not, under any circumstances, be considered employees of the City, and that they shall not be entitled to any of the benefits or rights afforded employees of City, including, but not limited to, sick leave, vacation leave, holiday pay, Public Employees Retirement System benefits, or health, life, dental, long-term disability or workers' compensation insurance benefits.

11.2 CONTRACTOR NOT AGENT. Except as the City may authorize in writing, Contractor and its subcontractors shall have no authority, express or implied, to act on behalf of or bind the City in any capacity whatsoever as agents or otherwise.

11.3 OWNERSHIP OF WORK. All documents and materials furnished by the City to Contractor shall remain the property of the City and shall be returned to the City upon termination of this Agreement. All reports, drawings, plans, specifications, computer tapes, floppy disks and printouts, studies, memoranda, computation sheets, and other documents prepared by Contractor in furtherance of the work shall be the sole property of City and shall be

delivered to City whenever requested at no additional cost to the City. Contractor shall keep such documents and materials on file and available for audit by the City for at least three (3) years after completion or earlier termination of this Agreement. Contractor may make duplicate copies of such materials and documents for its own files or for such other purposes as may be authorized in writing by the City.

11.4 CORRECTION OF WORK. Contractor shall promptly correct any defective, inaccurate or incomplete tasks, deliverables, goods, services and other work, without additional cost to the City. The performance or acceptance of services furnished by Contractor shall not relieve the Contractor from the obligation to correct subsequently discovered defects, inaccuracy, or incompleteness.

11.5 RESPONSIBILITY FOR ERRORS. Contractor shall be responsible for its work and results under this Agreement. Contractor, when requested, shall furnish clarification and/or explanation as may be required by the City, regarding any services rendered under this Agreement at no additional cost to City. In the event that an error or omission attributable to Contractor occurs, then Contractor shall, at no cost to City, provide all necessary design drawings, estimates and other Contractor professional services necessary to rectify and correct the matter to the sole satisfaction of City and to participate in any meeting required with regard to the correction.

11.6 WAIVER. The City's waiver of any term, condition, breach, or default of this Agreement shall not be considered to be a waiver of any other term, condition, default or breach, nor of a subsequent breach of the one waived. The delay or failure of either party at any time to require performance or compliance by the other of any of its obligations or agreements shall in no way be deemed a waiver of those rights to require such performance or compliance.

No waiver of any provision of this Agreement shall be effective unless in writing and executed by a duly authorized representative of the party against whom enforcement of a waiver is sought.

11.7 SUCCESSORS. This Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective heirs, successors, and/or assigns.

11.8 NO ASSIGNMENT. Contractor shall not assign or transfer this Agreement or any rights hereunder without the prior written consent of the City and approval by the City Attorney, which may be withheld in the City's sole discretion. Any unauthorized assignment or transfer shall be null and void and shall constitute a material breach by the Contractor of its obligations under this Agreement. No assignment shall release the original parties from their obligations or otherwise constitute a novation.

11.9 COMPLIANCE WITH LAWS. Contractor shall comply with all Federal, State, County and City laws, ordinances, rules and regulations, which are, as amended from time to time, incorporated herein and applicable to the performance hereof. Violation of any law material to performance of this Agreement shall entitle the City to terminate the Agreement and otherwise pursue its remedies. Further, if the Contractor performs any work knowing it to be contrary to such laws, rules, and regulations Contractor shall be solely responsible for all costs arising therefrom.

11.10 ATTORNEY'S FEES. If any action at law or in equity is brought to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, costs, and necessary disbursements in addition to any other relief to which such party may be entitled.

11.11 INTERPRETATION.

11.11.1 Applicable Law. This Agreement shall be deemed an agreement and shall be governed by and construed in accordance with the laws of the State of California. Contractor agrees that the State and Federal courts which sit in the State of California shall have exclusive jurisdiction over all controversies and disputes arising hereunder, and submits to the jurisdiction thereof.

11.11.2 Entire Agreement. This Agreement, including any exhibits attached hereto, constitutes the entire agreement and understanding between the parties regarding its subject matter and supersedes all prior or contemporaneous negotiations, representations, understandings, correspondence, documentation, and agreements (written or oral).

11.11.3 Written Amendment. This Agreement may only be changed by written amendment executed by Contractor and the City Administrator or other authorized representative of the City, subject to any requisite authorization by the City Council. Any oral representations or modifications concerning this Agreement shall be of no force or effect.

11.11.4 Severability. If any provision in this Agreement is held by any court of competent jurisdiction to be invalid, illegal, void, or unenforceable, such portion shall be deemed severed from this Agreement, and the remaining provisions shall nevertheless continue in full force and effect as fully as though such invalid, illegal, or unenforceable portion had never been part of this Agreement.

11.11.5 Order of Precedence. In case of conflict between the terms of this Agreement and the terms contained in any document attached as an Exhibit or otherwise

incorporated by reference, the terms of this Agreement shall strictly prevail. The terms of the City’s Request for Proposals shall control over the Contractor’s Proposal.

11.11.6 Construction. In the event an ambiguity or question of intent or interpretation arises with respect to this Agreement, this Agreement shall be construed as if drafted jointly by the parties and in accordance with its fair meaning. There shall be no presumption or burden of proof favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

11.12 TIME OF ESSENCE. Time is strictly of the essence of this agreement and each and every covenant, term, and provision hereof.

11.13 AUTHORITY OF CONTRACTOR. The Contractor hereby represents and warrants to the City that the Contractor has the right, power, legal capacity, and authority to enter into and perform its obligations under this Agreement, and its execution of this Agreement has been duly authorized.

11.14 ARBITRATION OF DISPUTES. Any dispute for under $25,000 arising out of or relating to the negotiation, construction, performance, non-performance, breach, or any other aspect of this Agreement, shall be settled by binding arbitration in accordance with the Commercial Rules of the American Arbitration Association at Los Angeles, California and judgment upon the award rendered by the Arbitrators may be entered in any court having jurisdiction thereof. The City does not waive its right to object to the timeliness or sufficiency of any claim filed or required to be filed against the City and reserves the right to conduct full discovery.

11.15 NOTICES. Any notice or demand to be given by one party to the other must be given in writing and by personal delivery or prepaid first-class, registered or certified mail, addressed as follows. Notice simply to the City of Vernon or any other City department is not adequate notice.

If to the City:

City of Vernon
Attention: Scott Williams, Director of Finance/City Treasurer 4305 Santa Fe Avenue
Vernon, CA 90058
If to the Contractor:

BLX Group LLC
Attention: Craig Underwood, President
355 S. Grand Avenue, Suite 2700
Los Angeles, CA 90071

Any such notice shall be deemed to have been given upon delivery, if personally delivered, or, if mailed, upon receipt, or upon expiration of three (3) business days from the date of posting, whichever is earlier. Either party may change the address at which it desires to receive notice upon giving written notice of such request to the other party.

11.16 NO THIRD PARTY RIGHTS. This Agreement is entered into for the sole benefit of City and Contractor and no other parties are intended to be direct or incidental beneficiaries of this Agreement and no third party shall have any right or remedy in, under, or to this Agreement.

11.17 TERMINATION FOR CONVENIENCE (Without Cause). City may terminate this Agreement in whole or in part at any time, for any cause or without cause, upon fifteen (15) calendar days' written notice to Contractor. If the Agreement is thus terminated by City for reasons other than Contractor's failure to perform its obligations, City shall pay Contractor a prorated amount based on the services satisfactorily completed and accepted prior to the effective date of termination. Such payment shall be Contractor's exclusive remedy for termination without cause.

11.18 DEFAULT. In the event either party materially defaults in its obligations hereunder, the other party may declare a default and terminate this Agreement by written notice to the defaulting party. The notice shall specify the basis for the default. The Agreement shall terminate unless such default is cured before the effective date of termination stated in such notice, which date shall be no sooner than ten (10) days after the date of the notice. In case of default by Contractor, the City reserves the right to procure the goods or services from other sources and to hold the Contractor responsible for any excess costs occasioned to the City thereby. Contractor shall not be held accountable for additional costs incurred due to delay or default as a result of Force Majeure. Contractor must notify the City immediately upon knowing that non-performance or delay will apply to this Agreement as a result of Force Majeure. At that time Contractor is to submit in writing a Recovery Plan for this Agreement. If the Recovery Plan is not acceptable to the City or not received within 10 days of the necessary notification of Force Majeure default, then the City may cancel this order in its entirety at no cost to the City, owing only for goods and services completed to that point.

11.19 TERMINATION FOR CAUSE. Termination for cause shall relieve the terminating party of further liability or responsibility under this Agreement, including the payment of money, except for payment for services satisfactorily and timely performed prior to the service of the notice of termination, and except for reimbursement of (1) any payments made by the City for service not subsequently performed in a timely and satisfactory manner, and (2) costs

incurred by the City in obtaining substitute performance. If this Agreement is terminated as provided herein, City may require, at no additional cost to City, that Contractor provide all finished or unfinished documents, data, and other information of any kind prepared by Contractor in connection with the performance of Services under this Agreement. Contractor shall be required to provide such document and other information within fifteen (15) days of the request.

11.19.1 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated.

11.20 MAINTENANCE AND INSPECTION OF RECORDS.

The City, or its authorized auditors or representatives, shall have access to and the right to audit and reproduce any of the Contractor's records to the extent the City deems necessary to insure it is receiving all money to which it is entitled under the Agreement and/or is paying only the amounts to which Contractor is properly entitled under the Agreement or for other purposes relating to the Agreement.

The Contractor shall maintain and preserve all such records for a period of at least three (3) years after termination of the Agreement.

The Contractor shall maintain all such records in the City of Vernon. If not, the Contractor shall, upon request, promptly deliver the records to the City of Vernon or reimburse the City for all reasonable and extra costs incurred in conducting the audit at a location other than the City of Vernon, including, but not limited to, such additional (out of the City) expenses for personnel, salaries, private auditors, travel, lodging, meals, and overhead.

11.21 CONFLICT. Contractor hereby represents, warrants, and certifies that no member, officer, or employee of the Contractor is a director, officer, or employee of the City of Vernon, or a member of any of its boards, commissions, or committees, except to the extent permitted by law.

11.22 HEADINGS. Paragraphs and subparagraph headings contained in this Agreement are included solely for convenience and are not intended to modify, explain or to be a full or accurate description of the content thereof and shall not in any way affect the meaning or interpretation of this Agreement.

11.23 ENFORCEMENT OF WAGE AND HOUR LAWS. Eight hours labor constitutes a legal day's work. The Contractor, or subcontractor, if any, shall forfeit twenty-five dollars ($25) for each worker employed in the execution of this Agreement by the respective Contractor or subcontractor for each calendar day during which the worker is required or

permitted to work more than 8 hours in any one calendar day and 40 hours in any one calendar week in violation of the provisions of Sections 1810 through 1815 of the California Labor Code as a penalty paid to the City; provided, however, work performed by employees of contractors in excess of 8 hours per day, and 40 hours during any one week, shall be permitted upon compensation for all hours worked in excess of 8 hours per day at not less than 1½ times the basic rate of pay.

11.24 EQUAL EMPLOYMENT OPPORTUNITY PRACTICES. Contractor certifies and represents that, during the performance of this Agreement, it and any other parties with whom it may subcontract shall adhere to equal employment opportunity practices to assure that applicants, employees and recipients of service are treated equally and are not discriminated against because of their race, religion, color, national origin, ancestry, disability, sex, age, medical condition, sexual orientation or marital status. Contractor further certifies that it will not maintain any segregated facilities. Contractor further agrees to comply with The Equal Employment Opportunity Practices provisions as set forth in Exhibit “C”. [Signatures Begin on Next Page].

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Commencement Date stated on the cover page.

City of Vernon, a California charter City
and California municipal corporation
By: ____________________________
Carlos Fandino, City Administrator

BLX Group LLC, a limited liability company
By:

Name:

Title:

ATTEST:
_______________________________
Lisa Pope, City Clerk
By:

Name:

Title:

APPROVED AS TO FORM:
_______________________________
Zaynah N. Moussa,
City Attorney

EXHIBIT A

CONTRACTOR'S PROPOSAL
BLX Group LLC

RESPONSE TO REQUEST FOR PROPOSAL FOR

FINANCIAL ADVISORY SERVICES

CITY OF VERNON
November 16, 2023

PROJECT MANAGERS
Jeff Higgins
Managing Director
213.612. 2209 T
[email protected] E
Glenn Casterline
Managing Director
213.612. 2229 T
[email protected] E
BLX Group LLC
355 S. Grand Ave., Ste. 2700
Los Angeles, CA 90071
213 612 2200 T
blxgroup.com
BLX Group LLC
355 South Grand Avenue, STE. 2700
Los Angeles, CA 90071
Ph 213 612 2200
blxgroup.com
November 16, 2023 Email: [email protected]
Mr. Scott Williams
Director of Finance/City Treasurer
City of Vernon
Finance Department
4305 Santa Fe Avenue
Vernon, CA 90058
Re: Request for Proposal Financial Advisory Services
Dear Mr. Williams,
On behalf of BLX Group LLC ("BLX") I am pleased to submit this response to the City of Vernon’s (“City”) request for proposal (“RFP”) to provide Financial Advisory Services. Having worked with the City since 2002, including serving as Financial Advisor on the City’s most recent debt financings, BLX's technical capabilities, familiarity with the City’s debt profile along with the debt profiles similar to that of the City, and a history of unsurpassed client service, combine to make us distinctly qualified to serve the City's needs.

BLX possesses a unique combination of relevant resources, experience, and expertise to offer the City. The City’s financial advisory needs are an excellent fit with BLX’s corporate philosophy and procedures in that it acknowledges the unique characteristics of local government issued debt and investing public funds and the necessary understanding of related statutory, bond, and tax issues. If selected, BLX is committed to providing personalized financial advisory services in an informed, hands-on, extension-of-staff manner.

Additionally, BLX hereby declares that the undersigned individual is authorized to bind the firm with a Financial Advisory Services contract with the City and that the proposal will be valid for a period of at least ninety (90) days from the date of submission. We propose that the contemplated project be managed from our Los Angeles office and will not be subcontracted.

Partnering with BLX and taking advantage of our strong tax and analytical skill set and competitive pricing is the best choice for a successful, yet cost-effective engagement. Glenn and I will serve as your relationship managers and primary points of contact. In that role, we will be responsible for leading an open dialogue between BLX and the City. We are excited about the prospect of once again working with the City and look forward to addressing any questions you may have. I can be reached at 213-612-2209 or via e-mail at [email protected].

Very truly yours,
BLX Group LLC
Jeff R. Higgins
Managing Director
City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group |

TABLE OF CONTENTS

COVER LETTER

CONTENTS PAGE
A. INTRODUCTION 1
B. GENERAL SCOPE OF WORK 3
C. WORK PLAN 6
D. FEES AND COSTS 8
E. ABILITY OF THE PROPOSER TO PERFORM 10
F. AFFIDAVIT OF NON-COLLUSION 20

APPENDIX

1. CONFLICT DISCLAIMERS AND DISCLOSURES
City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 1
A. INTRODUCTION
Present an introduction of the proposal and your understanding of the assignment and significant steps, methods and procedures to be employed by the proposer to ensure quality deliverables that can be delivered within the required time frames and your identified budget.

BLX is a registered municipal advisor offering financial advisory, interest rate swap advisory, and post debt issuance compliance services associated with requirements imposed by the IRS and SEC. As an independent and unbiased advisor, BLX's primary objectives are to advocate for and educate our clients while assisting in structuring their financings to achieve low cost of capital at the terms best suited to their debt policies and strategic objectives.

Our financial advisory experience includes providing recommendation of different transactional approaches according to the borrower’s best interests, including bond sales, bank lending, and state loans. Furthermore, BLX has participated in numerous transactions, rating presentations, and negotiations with underwriters, LOC banks, and bond purchasers, and have observed how different types of transactions perform under different market conditions.

Because we are independent advisors and are not in the business of underwriting bonds, we are held to a fiduciary standard in all our engagements under the Dodd/Frank Act of 2010 and are not considered by the MSRB to have the potential conflicts of interest which exist between municipal borrowers and securities underwriting firms.

Further, BLX and its professionals have advised on municipal debt offerings, escrow (re)structurings, investment products, and derivative transactions across all sectors of public finance, including local agencies, public utilities, higher education, healthcare, and project finance. Since 2008, BLX has placed over 545 structured investment products, including escrow portfolios, with an aggregate notional amount in excess of $54.4 billion.

CITY OF VERNON
We have been privileged to work with the City for more than 20 years and over that time have provided pre-issuance and post-issuance financial advisory services, derivative advisory and management services and investment advisory services. The City is without question one of our firm’s most valuable clients. Our team assigned to Vernon is headed by Jeff Higgins and Glenn Casterline, Managing Directors, along with Craig Underwood, BLX’s President, all of which are located in our Los Angeles office. These individuals are among BLX’s most senior and experienced professionals and have worked with the City on an absolute priority basis.

We would enthusiastically welcome the opportunity to renew and, whenever possible at the City’s request, expand our relationship with the City. We can unequivocally state that BLX has an unmatched understanding of the City’s debt, derivative and investment transactions, the historical and institutional knowledge of the City’s financings needed to provide optimal advice and is best positioned to provide the services outlined in Section B herein. Therefore, we are confident that BLX will be able to seamlessly and without any delays continue its work with the City and its staff and continue to provide structuring, pricing, and credit advice.

City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 2
Over the past 20 years, the City regularly consults with BLX on City objectives and effects such objectives may have on the City’s bond covenants and credit ratings. For example, the City regularly reaches out to BLX when developing their annual rate design to determine if certain bond covenants are met, such as debt service coverage.

In addition, BLX’s long-standing history with the City has helped the City during times of personnel changes. BLX is able to educate new staff and administration with the background of the historical City financings and the objective of such financings.

City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 3
B. GENERAL SCOPE OF WORK
Briefly summarize the scope of work as the proposer perceives or envisions it for each Service Area proposed.

The scope of work as described in the RFP is generally consistent with the services BLX is currently providing to the City and those which BLX regularly provides to other municipal clients. At BLX, we generally divide financial advisory engagements into four (4) phases – (1) ongoing general consulting, planning and advisory services not directly related to a transaction (i.e., strategic planning); (2) pre-issuance services directly related to debt/derivative/investment transactions (i.e., debt strategy); (3) executing a debt strategy, and (4) post-issuance regulatory, management, and oversight services.

Specifically, the services and tasks we proposed to perform for and on the City’s behalf are as follows:

Phase I: Ongoing General Consulting Services

1. BLX will meet with the City to update and fully develop our understanding of the City’s objectives with regard to financing and investment matters. As has been our practice with the City, we would expect to meet regularly with City staff to discuss new opportunities and changes in financial policy/objectives. The BLX staff assigned to this engagement is available to the City as its highest priority.

2. BLX will review all outstanding debt and derivative positions, identifying opportunities to reduce debt service, provide cash flow relief, and improve the City’s overall balance sheet.

3. As we have for the past 20 years, BLX will continue to be available on a priority basis to meet with City staff, City Council, committees, commissions, and local governmental and quasi-governmental bodies as requested by the City. We will provide support, advice, and presentation materials as requested by the City to support its efforts to be responsive and transparent with all such entities.

STRATEGIC PLANNING
• Review proposed projects
and capital needs
• Review and analyze cash
flow models for proposed
projects including its
effects on overall debt
service
• Identify refinancing
candidates

DEBT STRATEGY
• Review debt management
policies
• Analyze projected cash
flows vs amortization
alternatives
• Consider fixed and/or
variable rate debt
structures
• Create cash flow model of
selected financing
structure
• Summarize costs, savings,
and risks

EXECUTE DEBT STRATEGY
• Help establish financing team
including the selection of
underwriter, bond counsel,
trustee, etc.
• Evaluate and summarize
projected costs of negotiated
sale vs
competitive sale
• Provide daily update on taxexempt market including its effect on
proposed financing
• Review POS and legal
documents
• Communicate with rating
agencies and assist with
presentations to rating
agencies
• Advise as to the
reasonableness of proposed
bond pricing

POST-ISSUANCE SERVICES
• Monitor IRS post-issuance
requirements (Arbitrage
Rebate, Private Use)
• Assist with secondary
market
disclosure requirements
• Interest rate swap
monitoring
services
• Continue to interact with
rating agencies and
investors
• Deliver updates on market
conditions, financial
products,
along with changes in
federal and security laws
• SB1029 services
City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 4
Phase II: Pre-Issuance Transactional Services

1. In the event a financing objective (e.g., reduce debt service, fund capital projects, etc.) has been identified by the City, BLX will review the existing debt obligations and other credit and funding commitments and how a new financing might impact those. It will also include a preliminary forecast of the impact of any contemplated debt transaction on the City’s credit rating, its rate structure (as it applies to enterprise funds), and overall debt service coverage.

2. BLX will work with the City to select the optimal financing strategy, which provides the City with the lowest cost of capital within risk parameters acceptable to and appropriate for the City.

3. As requested by the City, BLX will present or assist with the presentation of the initial financing plan to those public bodies charged with oversight, including City Council.

Phase III: Transactional Services

1. Once an overall financing plan has been agreed upon, BLX will provide a preliminary step-by-step action plan, clearly identifying responsibilities and timeline for project completion.

2. BLX will assist in the selection and formation of a financing team, including preparing a list of services required of underwriter, trustee, verification agent (if needed), and other professionals.

3. BLX will work with the City staff, bond counsel and financing team to determine the appropriate size, structure, specific terms and conditions for the debt transaction, and recommended method of sale.

4. BLX will assist bond counsel and other financing team members with the preparation of all publicly distributed documents in connection with the financing, including the official statement (or similar document) and related disclosures.

5. BLX will assist the City in negotiating and/or making presentations to credit rating agencies and/or credit enhancers (e.g., bond insurers, credit banks, etc.).

6. Prior to the sale of debt securities, BLX will assist with and represent the City at informational meetings as part of the marketing effort.

7. If a negotiated sale process is utilized, BLX will assist the City in negotiating appropriate terms, reviewing spreads, identifying comparable transactions, analyzing market levels, and clarifying any syndicate roles with the selected underwriter. BLX will also work side-by-side with the underwriter to ensure the broadness and appropriateness of the marketing and sales effort.

8. BLX will assist the City in closing the financing, including all necessary administrative and clerical tasks and the investment of the bond proceeds.

City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 5
Phase IV: Post - Issuance Services

1. BLX will provide the City with ongoing compliance, monitoring, and management services in the following areas:

A. Arbitrage Rebate Compliance Services – BLX will provide the City with annual and final arbitrage rebate calculations on each of the City’s outstanding tax-exempt bond issues.

B. Continuing Disclosure Services – BLX will assist the City with its required obligations under the various continuing disclosure agreements.

C. Other Compliance Services – BLX will provide the City with ongoing bond proceeds compliance services such as services related to the requirements established by California Senate Bill 1029 (“SB 1029”).

2. BLX will be available on a full-time basis to interact with ratings agencies and investors on behalf of the City along with addressing any issues that arise relating to the City’s debt issuances.

City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 6
C. WORK PLAN
Present concepts for conducting the work plan and interrelationship of all projects. Define the scope of each task including the depth and scope of analysis or research proposed.

As described in the previous section, BLX views this engagement as having four distinct, but very much interrelated, components or phases. All four are critical to the City’s financial success, stability, and transparency and best provided by a single firm doing so on an integrated basis.

We propose to implement the following work plan items and tasks as a supplement to the Scope of Services described earlier.

Phase I: Our approach to providing Financial Advisory services to the City begins with acting as an extension of the City’s staff. That is, we have and would continue to be available to the City on a full-time basis (and on short notice) to provide support, analysis, and advice for all City-related financial matters. By being fully immersed in the City’s financial activities, we are best positioned to provide the required services and timely and value-added advice.

To add some structure to this, we propose regularly scheduled weekly meeting (or call if preferred by City) with the Finance Director to review ongoing projects, help prepare for upcoming meetings requiring financial analysis, and generally review market conditions and opportunities for the City to improve its financial standing and/or pursue additional capital funding. We also recommend that as Financial Advisor, we review of the City’s financial standing as it relates to debt, derivative, and investments.

Working with the Finance Director, BLX will develop a template for such presentations that can be readily updated and amended on an ongoing basis.

Finally, as circumstances require, BLX’s assigned professionals will be available to the City on a full-time priority basis. That is, should the City need BLX support and advice to address pressing and sudden issues, we will make the necessary resources available to the City. We believe that the availability of our assigned professionals throughout our decade of service to the City readily demonstrates the true depth of this commitment.

Phases II and III: The services described in Phases II and III are fairly standard for financial advisory engagements as described in the previous section. Once the City is in agreement with the work plan, BLX will assist the City with the following:

1. Forming a financing team. Absent financing team members already being in place by virtue of prior RFPs or other process, BLX will assist the City with identifying and securing financing team members – utilizing a competitive process whenever possible.

2. Provide ongoing advice and recommendations to the City on how to best document important transaction decisions regarding debt structure and important legal/financial/credit issues.

3. Upon the close of any transaction, BLX will provide a summary report to the City.

This report will detail the final transaction structure, including the bond pricing effort and outcome; identify the extent to which the final transaction met the original project goals; and summarize the City’s ongoing obligations under the transaction.

BLX will present or assist in presenting these final findings to City Council.

City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 7
Phase IV: BLX has provided the services proposed in this section to the City for several years. We do not foresee any substantial changes in the work plan for how these services are provided. However, in the spirit of creating greater transparency, we propose to provide a formal annual report detailing the City’s post-issuance compliance efforts. This summary will include the results of any arbitrage rebate calculations, a summary of any required disclosure filings, and compliance with SB 1029. This annual report will be useful in demonstrating the City’s ongoing oversight efforts to City Council, regulatory parties, and other groups.

We strongly believe that the City is best served by a single qualified firm providing the services proposed in this and the prior section on an integrated basis.

City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 8
D. FEES AND COSTS
Although an important aspect of consideration, the financial cost estimate will not be the sole justification for consideration. Negotiations may or may not be conducted with the proposer; therefore, the proposal submitted should contain the proposer’s most favorable terms and conditions, since selection and award may be made without discussion with any firm. All prices should reflect “not to exceed” amounts per item. Proposer must offer services at a rate comparable to the rate proposer offers to other governmental entities for similar work. Offering a higher rate to the City than the comparable rate is grounds for disqualification of the Proposer.

BLX does not structure its fees for advisory services based on any set formula or approach. We have provided similar services to those contemplated by the City on (i) a fixed fee basis; (ii) an hourly basis; and (iii) a percentage of transaction-size basis.

The most important factor in determining an appropriate fee structure is the City’s comfort that our fee is appropriate for the work and value provided and consistent with “the market.” Therefore, while we have proposed a fee schedule as shown below, we are amendable to negotiate alternative fee structures that may be deemed more acceptable by the City.

Our proposed fee structure is segmented in a manner consistent with our response to Section B – General Scope of Work.

Phases I & II: Ongoing General & Pre-Issuance Transactional Services As the depth and amount of the services required in this phase are difficult to approximate, we believe these services are fairly compensated by an hourly billing arrangement. Our proposed hourly fees are as follows:

Title Hourly Rate
President $600
Managing Director $550
Phase III: Transactional Services
Once the City has elected to pursue a specific financing, our fee for services in connection with such a financing would then shift to a contingent arrangement. Under such an arrangement, BLX would only be compensated upon a successful closing.

Our proposed fee for these services is as follows:

Debt Transaction: $1.00/$1,000 Bond with a cap of $250,000 and a floor of $65,000 per transaction
Derivative Transaction: The present value of .02% of the notional amount for each year the derivative is outstanding with a cap of
$250,000 and a floor of $65,000
City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 9
Phase IV: Post-Issuance Services
Our fees for the services described in the corresponding section of our response to Section 2 are as follows:

A. Arbitrage Rebate Compliance Services (on a per bond issue basis) Annual Report Fee (per report) $2,000
B. Continuing Disclosure Services
Electric System $12,000
Redevelopment $5,000
Water System $5,000
C. Derivative Monitoring Services
Per Outstanding Derivative (swap) $1,000
D. SB 1029 Services
Report Fee $1,000
City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 10
E. ABILITY OF THE PROPOSER TO PERFORM
Provide a detailed description of the proposer and his/her/its qualifications, including names, titles, detailed professional resumes and past experience in similar work efforts/products of key personnel who will be working on the assignment. Provide a list of specific related work projects that have been completed by the proposer which are directly related to the assignment described in this RFP. Note the specific individuals who completed such project(s).

Identify role and responsibility of each member of the project team. Include the amount of time key personnel will be involved in the respective portions of the assignment. Respondents are encouraged to supply relevant examples of their professional product. Provide a list of references.

The selected firm shall not subcontract any work under the RFP nor assign any work without the prior written consent of the City.

FIRM OVERVIEW
BLX Group LLC, formerly known as Bond Logistix LLC, is a Municipal Securities Rulemaking Board and Securities Exchange Commission registered independent municipal advisory firm, specializing in serving governmental issuers and nonprofit entities. Our consulting services include financial advisory, interest rate swap advisory, along with federal tax and regulatory compliance services. We work with issuers on projects, both large and small, leveraging our experience, resources, and expertise to design the role that best fits each client’s needs.

BLX was established in 1989 to undertake the mathematical, financial, and other technical aspects necessary to assist public and nonprofit agencies in complying with the arbitrage rebate regulations imposed by the Internal Revenue Service (“IRS”).

Since that time, BLX has grown to become the largest provider of such services in the country, with 32 professional consultants and 10 support staff in 4 offices nationwide, strategically located in Dallas, Los Angeles, Phoenix, and New York.

BLX has a tremendous amount of experience in providing services to all types of entities including states, counties, cities, transportation authorities, public utilities, special districts, nonprofit organizations, and more. BLX professionals assigned to its engagement with the City will have an average of more than 31 years of public finance experience. BLX is a wholly-owned subsidiary of Orrick, Herrington & Sutcliffe LLP ("Orrick"), the premier public finance law firm in the nation. Orrick has provided quality legal services to municipal issuers, underwriters, and trustees for more than 100 years and has been ranked first nationally as bond counsel for most of the last two decades (as reported in the Bond Buyer).

BLX has grown to become a full-service advisory firm, offering a range of complementary services to public sector bond issuers and nonprofit entities. The professionals in each practice area are allocated to work primarily in their practice groups. However, our practice areas are designed to complement each other by providing expertise in the sometimes difficult to fill gaps commonly encountered in municipal finance. For example, our swaps group will often assist our financial advisory practice when the proposed debt strategy includes hedging variable rate interest rate risk with a floating-to-fixed rate swap. Similarly, our rebate group might streamline a swap-related engagement by sharing documentation previously supplied by the client, saving all parties time and effort. There are numerous other circumstances where we can leverage these synergies for the benefit of our clients.

In this regard, the evolution of our firm has been driven simply by the needs and priorities of our clients.

City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 11
While smaller firms may have the expertise in their area of focus, their lack in size and overall experience not only limits synergies, but limits their flexibility in deploying resources and, importantly, limits their ability to develop the infrastructure necessary to efficiently and reliably deliver services. By being a full-service firm with a relatively larger client and services base, BLX has been able to make investments, in technology for example, which benefit multiple practice groups firm-wide. We continually invest in technology to enhance our clients’ experience, minimize labor production costs passed on to them, and supplement our multi-tier review process with software-based quality controls: (a) BLX Digital, our team of 4 full-time engineers, partners with our 28 consultants to deliver accurate and efficiently produced reports.

They have designed several proprietary platforms to assist our clients with bond and compliance related activities. Such platforms advocate transparency and include:

BLXBid (secure investment bidding), BLXSwap (swap monitoring and GASB53/72 valuations), and internal platforms related to trust account data processing and extensive private use analyses. (b) We advocate transparency and provide complimentary access to the BLXPortal, a secure service that allows our clients to access detailed information about their rebate engagements, view rebate reports, review scheduled computations, and upload bond documents and investment records.

By demonstrating our ability to manage thousands of active engagements combined with our experiences in providing financial advisory and post-issuance compliance services, and developing web-based platforms, BLX is amply qualified to serve the City.

Since launching its advisory service practice, BLX and its professionals have advised on municipal debt offerings, escrow (re)structurings, structured investment products and derivative transactions with an aggregate par and notional amount in excess of $60 billion across all sectors of public finance, including local agencies, public utilities, higher education, healthcare, and project finance.

As you are aware, BLX served as the City’s financial advisor from 2002 through 2013 and again from 2017 through 2023. During such period, the City embarked on a number of complex financings that required the financial advisor to have a detail understanding of the City, its general fund, utility system, gas system, redevelopment plan and, most importantly an understanding of the City’s primarily industrial constituents. BLX assisted the City with achieving those objectives, even during some of the City’s most challenging periods of time such as the nation’s financial crisis in 2008 and State’s dissolution of the redevelopment agencies. BLX assisted the City with the financing of numerous assets of Light and Power and the former Redevelopment Agency, including the financing of the Malburg Generating Station, the financing and refinancing of the City’s 15 year natural gas prepay transaction, the acquisition and sale of the City’s Tehachapi wind land, the sale of the certain utility assets such as Malburg Generating Station and transmission assets, to name a few.

In 2020 BLX assisted the City with the issuance of its 2020 Light and Power and Water System financings. In 2021, BLX assisted the City with the acquisition of the Malburg Generating Station and a forward refunding of certain outstanding debt for savings.

BLX assisted the City in developing and evaluating financial forecasts for the utility, monitoring the City’s IRS compliance (including arbitrage rebate and private-use) and SEC compliance requirements (such as continuing disclosure requirements). BLX City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 12
also performed investment advisory/portfolio management services for the City during this time period. However effective April 1, 2016, BLX no longer offers such services.

Even during the period BLX did not serve as the City’s financial advisor, BLX has continually monitored the City’s financing activities.

BLX is also the largest and most widely experienced provider of post issuance compliance and regulatory services (i.e., arbitrage compliance services, continuing disclosure services, etc.) in the nation. We prepare about 3,400 arbitrage rebate reports annually and have in place the resources to address your current and future needs with no interruption to our procedures or strain on our consultants.

City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 13

FINANCIAL ADVISORY TEAM
The Project Team that BLX will assign to the City consists of BLX’s most experienced and appropriately skilled professionals, including the firm’s president. All team members will be available on a full-time basis. Having provided the similar services proposed herein to public agencies across the country, including the City, these BLX professionals are widely considered to be among the nation’s leading experts in debt, tax, derivative, and secondary market disclosure matters relating to municipal bond financings.

We believe it is important to note that Mr. Underwood and Mr. Higgins have worked extensively on the City’s financing matters for over a two decades and in this time have become intimately familiar with City’s outstanding debt portfolio, the City’s current standing with the rating agencies and investors, and ongoing tax, regulatory, and compliance efforts.

Personnel Role Time Involvement
Public Finance
Experience
Jeff Higgins
Managing Director
Co-Engagement Manager
Co-Primary Contact
Strategy and Analytics
≈ 35% 31 Years
Glenn Casterline
Managing Director
Co-Engagement Manager
Co-Primary Contact
Strategy and Analytics
≈ 35% 31 Years
Craig Underwood
President
Co-Engagement Manager
Strategy ≈ 20% 34 Years
Eric Chu
Managing Director
Strategy and Analytics
Derivatives ≈ 10% 31 Years

City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 14
Jeff Higgins
Managing Director

LOS ANGELES
T: (213) 612-2209
E: [email protected]

INDUSTRY EXPERIENCE
31 Years

TENURE AT BLX
31 Years

EDUCATION
Arizona State University
BS in Finance, 1992

FINRA LICENSES
Series 50 Municipal Advisor Rep
(2016 to Present)
Series 54 Municipal Advisor Principal
(2019 to Present)
Series 65 Investment Advisor Rep
(2001 to February 2020)

ROLE: Co-Project Manager, Client Service, Technical Strategy SERVICE EXPERTISE: Municipal Advisory, Arbitrage Rebate Compliance, Municipal Continuing Disclosure, Public Finance Compliance
SPECIFIC QUALIFICATIONS:
 31 Years Public Finance Experience
 Manages BLX's Municipal Continuing Disclosure practice  Served as the City’s financial advisor from 2002 to 2013 and from 2017 to 2023  Manages many of BLX's most sophisticated issuers including Energy Northwest, Piedmont Municipal Power Agency, State of South Carolina, Regents of the University of California, State of Hawaii and its agencies, and the City and County of Honolulu BIO / RELEVANT WORK EXPERIENCE: Jeff Higgins serves as Managing Director in the Los Angeles office of BLX. With 31 years of public finance experience, he currently manages many of BLX’s most sophisticated issuers, including Energy Northwest, Piedmont Municipal Power Agency, State of South Carolina, University of California, State of Hawaii and its agencies, and the City and County of Honolulu. In addition to heading up BLX’s Municipal Continuing Disclosure practice, Jeff has significant experience with financial advisory services for unique and complex transactions.

City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 15
Glenn Casterline
Managing Director

LOS ANGELES
T: (213) 612-2229
E: [email protected]

INDUSTRY EXPERIENCE
31 Years

TENURE AT BLX
31 Years

EDUCATION
California State University, Fullerton
BA in Business Administration -
Finance, 1991

FINRA LICENSES
Series 50 Municipal Advisor Rep
(2016 to Present)
Series 54 Municipal Advisor Principal
(2019 to Present)
Series 65 Investment Advisor Rep
(2000 to February 2020)

MEMBERSHIPS

CSMFO, GFOA, CCSA, CGFOA
ROLE: Co-Project Manager, Regulatory Support, Technical Strategy SERVICE EXPERTISE: Municipal Advisory, Arbitrage Rebate Compliance, Public Finance Compliance SPECIFIC QUALIFICATIONS:
 31 years of Arbitrage Regulatory Consulting and Financial Advisory experience.  Leads BLX’s Financial Advisory practice
 Experienced Project Manager for many of BLX’s largest clients, including , the California Science Center, the Colburn School of the Performing Arts, Segerstrom Center for the Arts (i.e., Orange County Performing Arts Center), The Music Center (aka the Performing Arts Center of Los Angeles County), and the Commonwealth of the Northern Mariana Islands
 Volunteered to serve on the City of Placentia’s Citizens Fiscal Sustainability Task Force and Measure U Oversight Committee.

BIO / RELEVANT WORK EXPERIENCE: Glenn Casterline serves as Managing Director for BLX’s Los Angeles office. With 31 years of public finance experience, Glenn applies his expertise to BLX’s municipal advisory, interest rate swap advisory, and arbitrage rebate compliance services. He has served as financial advisor in connection with debt financings for the California Science Center, Performing Arts Center of Los Angeles County, Colburn School of the Performing Arts, Sanford Burnham Prebys Discovery Research Institute, City of Vernon, Segerstrom Center for the Arts, and the Commonwealth of the Northern Mariana Islands. During his 31 years of public finance experience, Glenn has reviewed, and reverse engineered just about every type of public finance structure: fixed rate, variable rate, variable rate swapped to fixed, fixed rate direct purchase, and variable rate direct purchase.

City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 16
Eric Chu
Managing Director

LOS ANGELES
T: (213) 612-2136
E: [email protected]

INDUSTRY EXPERIENCE
31 Years

TENURE AT BLX
29 Years

EDUCATION
University of California, Los Angeles
BS in Applied Mathematics
BA in Economics, 1991

FINRA LICENSES
Series 50 Municipal Advisor Rep
(2016 to Present)
Series 54 Municipal Advisor Principal
(2019 to Present)
Series 65 Investment Advisor Rep
(2000 to Feb. 2020)

ROLE: Co-Municipal Advisor, Finance Structure, Interest Rate Swap Advisor SERVICE EXPERTISE: Municipal Advisory, Derivative Advisory, Public Finance Compliance SPECIFIC QUALIFICATIONS:
 31 Years Public Finance Experience
 Experience includes work on hundreds of interest rate swap and structured investment transactions and providing on-going monitoring and compliance services, including for GASB and FASB accounting rules. Clients have included Ithaca College, San Francisco Airport Commission, Dignity Health, County of San Diego (CA), City of Riverside (CA), The Colburn School, Sanford Burnham Prebys Medical Discovery Institute
 Led the development of BLXSwap, a web-based swap monitoring platform, and BLXBid, a web-based market bidding platform
BIO / RELEVANT WORK EXPERIENCE: Eric Chu is a Managing Director and senior member of the BLX management team. He serves as the Business Group Leader for BLX’s Structured Products Services, which includes Derivative Advisory, Derivative Monitoring, and Municipal Advisory services. He has particular expertise in interest rate derivatives, the investment of tax-exempt bond proceeds, and arbitrage rebate compliance. Eric currently resides in BLX’s Los Angeles office. Prior to that, he was responsible for the day-to-day operations of BLX’s San Francisco and New York offices, respectively. His expertise in financial products and in structuring arbitrage compliant solutions for complex transactions has helped BLX earn a reputation for technical excellence. In addition to his practice area responsibilities, Eric is responsible for BLX’s firm-wide technology initiatives.

Eric has worked on hundreds of interest rate swap transactions in an advisory or on-going monitoring capacity. As an advisor, he has extensive experience in new transaction structuring, existing transaction workouts, ISDA document negotiation, and independent pricing of swap transactions to provide better transparency and execution levels for his clients. On an on-going basis, he assists numerous clients with swap monitoring and compliance with the rules under GASB Statements 53 and 72, and their corresponding FASB accounting rules. He led the development of BLX’s web-based swap monitoring platform, BLX SWAP™, which allows clients to access their swap portfolios to monitor key data, as well as BLX’s web-based GIC bidding platform, BLXBid™, which allows BLX clients to conduct real time sealed bid auctions for investment related products.

Eric has been a featured speaker at several industry conferences, including the Bond Buyer’s Annual Conference and in educational seminars hosted by CDIAC. He was also the lead author for BLX’s booklet, Interest Rates Swaps: Application to Tax-Exempt Financing, which was featured in its entirety in The Handbook of Municipal Finance by Sylvan G. Feldstein, and Frank J. Fabozzi.

City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 17
Craig Underwood
President

LOS ANGELES
T: (213) 612-2463
E: [email protected]

INDUSTRY EXPERIENCE
34 Years

TENURE AT BLX
34 Years

EDUCATION
Princeton University
BA in Politics, 1986

FINRA LICENSES
Series 50 Municipal Advisor Rep
(2017 to Present)
Series 63 Investment Advisor Rep
(1993 to Feb. 2020)
Series 65 Investment Advisor Rep
(2000 to Feb. 2020)

MEMBERSHIPS
CCSA

ROLE: Co-Municipal Advisor, Strategic Planning, Financing Structure SERVICE EXPERTISE: Municipal Advisory, Public Finance Compliance SPECIFIC QUALIFICATIONS:
 34 Years Public Finance and related Experience
 Heads BLX’s advisory service practice, overseeing the firm’s debt, derivative, and capital market practices
 Experience includes financial/derivative/investment advisory services for governmental, nonprofit, and corporate entities; designing and implementing various compliance and administration engagements for tax compliance, municipal disclosure, tobacco securitizations and student housing management  Served on the City’s financial advisor team since 2002 BIO / RELEVANT WORK EXPERIENCE: Craig Underwood serves as the President and Chief Executive Officer of BLX and chairs BLX’s management committee. In these capacities, Craig is responsible for the overall management of and strategic planning at BLX.

Craig joined BLX’s predecessor organization, the Financial Services Group (FSG) of Orrick, Herrington & Sutcliffe in 1989. From 1989 through 1993, he was FSG’s senior quantitative analyst, responsible for managing FSG’s analyst staff and the production of all technical analytics.

Craig assumed chief executive responsibility for FSG in 1998. Since 1998, he has continued to head FSG/BLX’s expansion, highlighted by the acquisitions of Funds Services Advisors, a California based investment advisory firm and Dain Rauscher’s arbitrage practice and the openings of offices in Dallas, and Phoenix. Under Craig’s leadership, BLX expanded its scope of services to include investment, debt and derivative advisory services, continuing disclosure services, and program administrative services for complex securitizations. In addition to his chief executive responsibilities, Craig is the head of BLX’s advisory services practice, overseeing the firm’s debt, derivative and capital market practices.

Craig is a frequent lecturer on debt, investment and arbitrage-related matters, having addressed various industry organizations on such matters on dozens of occasions. Craig is a co-author of the California Debt and Investment Advisory Commission’s Debt Issuance Primer.

City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 18

PHILOSOPHY AND OBJECTIVE
As an independent and unbiased advisor, BLX's primary objective is to advocate for and educate our clients to structure their financings to achieve the lowest cost of capital at the terms best suited to their debt policies and strategic objectives. Our philosophy is to ensure all financing options are identified and reviewed for the borrower. Whenever possible, BLX aims to develop an ongoing relationship with its clients rather than a transaction-based relationship. Our market knowledge and expertise provide us with the ability to negotiate the most attractive fees and terms with financing participants on behalf of our clients.

BLX's hands on expertise in the municipal bond trading and underwriting arena provides an insider knowledge base to advocate for the City and bring transparency to the pricing process. Our objective is to guide the City in balancing financing priorities with the current market and investor demand. BLX monitors the municipal market on a daily basis and can share market data on comparable transactions that will empower the City in selection of bond or note sale dates and bond pricing decisions. BLX has access to all the major market information sources such as Bloomberg, Thomson Reuters, Municipal Market Data (MMD), and EMMA to help the City make real time decisions that may impact the City's negotiated and competitive sales. BLX works closely with the underwriter to make sure decisions are made in best interest of the City and will provide an independent 3rd party fair market certification for negotiated sales.

BLX is an industry leader in tax compliance and related on-going post-issuance maintenance of tax-exempt financings and all of our practice areas complement one another by providing our clients with value added cross discipline expertise that has proven valuable, in particular with respect to the analyzing the impact of swap transactions on arbitrage rebate and related tax analyses. Throughout our 34 year history, our mission has been to exclusively serve, and act on behalf of, our governmental and not-for-profit entity clients in areas where BLX can leverage its combination of extensive infrastructure, depth of resources, and professional expertise to provide best in class services.

ANALYTICAL CAPABILITIES
The senior members of our proposed team, Mr. Higgins, Mr. Casterline, and Mr. Chu, head up our technical modeling and quantitative analysis for BLX’s debt advisory and derivative advisory services. They are assisted by additional consultants who work under their supervision to perform projects for our clients. Many of the projects require customized models to accommodate the specific idiosyncrasies of our clients' debt, investment and derivative strategies. Mr. Chu developed both of BLX's propriety applications for structured investment product bidding (BLXBid.com) and online swap monitoring and valuations (BLXSwap.com).

BLX utilizes MUNEX to size and structure bond issues, perform refunding calculations, analyze the cost effectiveness of credit enhancement, confirm and validate the true interest costs on competitive bids and to provide transaction schedules to our clients.

In addition to MUNEX, BLX routinely develops customized financial models to address the specific information and financing strategy needs of its clients. Given BLX's City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 19
technical expertise in complex transactions, our staff is uniquely oriented toward creating specialized financial models for our clients.

BLX possesses particular expertise and experience in complex transaction modeling and investment product pricing. BLX utilizes a myriad of industry leading quantitative tools and market sources that help provide our clients superior pricing transparency.

Our purpose-built modeling software programs, and in-house developed Excel models allow us the flexibility to price and execute even the most complex transactions.

REFERENCES
Company California Science Center Foundation
Contact Genevieve Dunaway, Chief Financial Officer
Addresses 700 Exposition Park Drive, Los Angeles, CA 90037 Email [email protected]
Telephone (213) 744-7487

Company Performing Arts Center of Los Angeles County
Contact William Taylor, Senior Vice President Chief Financial Officer Addresses 135 North Grand Avenue, Los Angeles, CA 90012 Email [email protected]
Telephone (213) 972-7512

Company The Colburn School of Performing Arts
Contact Maeesha Merchant, Chief Financial Officer
Addresses 200 S. Grand Avenue, Los Angeles, CA 90012
Email [email protected]
Telephone (213) 621-1015

SUBCONTRACTOR
BLX will not be subcontracting any of the proposed Financial Advisory work.

Jeff Higgins
Managing Director
BLX Group LLC
Managing Director
11/8/2023
City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group |
APPENDIX 1
City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 1
APPENDIX 1: CONFLICT DISCLAIMERS AND DISCLOSURES
General
The City is aware that BLX is a subsidiary of Orrick, Herrington & Sutcliffe LLP (“Orrick”).

BLX and/or Orrick may have client relationships with other parties involved in some manner with the City or the proposed financing transaction (for example, underwriters, purchasers, counterparties, trustees, rating agencies, insurers, credit providers, lenders, contractors, developers, advisors, investment advisors/providers/brokers, public entities and others) whether with respect to the City or some unrelated matter(s). Those participants are and will not be clients of BLX with respect to the financing transactions that are the subject of this engagement.

However, to the extent that, because of any other relationship between Orrick or BLX and other participants, there may appear to be or is any conflict of interest, actual or potential, with respect to the City’s engagement of BLX, absent notification by the City to the contrary, the City is hereby deemed to waive any such conflict and consents to any such other relationship. BLX will notify the City of any potential conflicts.

BLX has taken the following steps to identify and address potential conflicts of interest that may impact its ability to fulfill its duties to the City under this engagement.  BLX will not participate in the City’s process in selecting legal counsel in connection with any financings.
 BLX has provided “historical continuing disclosure compliance” services for underwriters in connection with the underwriters’ obligation to review an issuer’s S.E.C. Rule 15c2-12 compliance over the past five (5) years. Such service entails reviewing continuing disclosure filings made by the issuers. Such reports are factual representations of an issuer’s compliance. BLX will inform the City of any underwriters that have retained BLX for these services prior to any selection of an underwriter for the proposed transaction.  Potential financing structures may include Wells Fargo or U.S. Bank Trust serving as underwriter or as purchaser of the obligations via a direct purchase. BLX is currently engaged by Wells Fargo and U.S. Bank Trust to perform arbitrage rebate compliance services in connection with outstanding obligations issued by certain public or not-forprofit agencies that engaged the banks to serve as trustee. BLX’s scope of services relating to its engagement with Wells Fargo and U.S. Bank Trust is independent of the services described herein and will not conflict with BLX’s engagement with the City.

Fee Disclosures: Most forms of compensation for financial advisors have some sort of potential conflict of interest inherent in the payment arrangement. Under a contingent fee form of compensation, payment of an advisor’s fee is dependent upon the successful completion of a financing or other transaction. Although this form of compensation may be customary for the client, it presents a conflict because the advisor may have an incentive to push to complete a financing or potential financing under terms that might be disadvantageous to the client. For example, when facts or circumstances arise that could cause the financing or other transaction to be delayed or fail to close, an advisor may have an incentive to discourage a full consideration of such facts and circumstances, or to discourage consideration of alternatives that may result in the cancellation of the financing or other transaction. Under an hourly fee form of compensation, the advisor is paid an amount equal to the number of hours worked by the advisor times an agreed-upon hourly billing rate. This form of compensation presents a potential conflict of interest if the client City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 2
and the advisor do not agree on a reasonable maximum amount at the outset of the engagement, because the advisor does not have a financial incentive to recommend alternatives that would result in fewer hours worked. In some cases, an hourly fee may be applied against a retainer (e.g., a retainer payable monthly), in which case it is payable whether or not a financing closes. Alternatively, it may be contingent upon the successful completion of a financing, in which case there may be additional conflicts of interest, as described above.

The fee(s) paid to BLX as part of the cost of issuance would increase the borrowing cost of any transaction issued by the City. The increased cost occurs from compensating BLX for the financial advisory services provided.

Other Municipal Advisor Relationships
BLX serves a wide variety of other clients that may from time to time have interests that could have a direct or indirect impact on the interests of another BLX client. For example, BLX serves as municipal advisor to other municipal advisory clients and, in such cases, owes a regulatory duty to such other clients just as it does to City. These other clients may, from time to time and depending on the specific circumstances, have competing interests.

In acting in the interests of its various clients, BLX could potentially face a conflict of interest arising from these competing client interests. BLX fulfills its regulatory duty and mitigates such conflicts through dealing honestly and with the utmost good faith with City.

If BLX becomes aware of any additional potential or actual conflict of interest after this disclosure, BLX will disclose the detailed information in writing to the City in a timely manner.

Legal or Disciplinary Events
BLX does not have any legal events or disciplinary history on BLX’s Form MA and Form MAI, which includes information about any criminal actions, regulatory actions, investigations, terminations, judgments, liens, civil judicial actions, customer complaints, arbitrations and civil litigation. The City may electronically access BLX’s most recent Form MA and each most recent Form MA-I filed with the Commission at the following website using CIK 0001610628 in the fast search field: www.sec.gov/edgar/searchedgar/companysearch.html.

There have been no material changes to a legal or disciplinary event disclosure on any Form MA or Form MA-I filed with the SEC. If any material legal or regulatory action is brought against BLX, BLX will provide complete disclosure to the City in detail allowing the City to evaluate BLX, its management and personnel.

Municipal Securities Rulemaking Board Rule G-10 Disclosure Pursuant to Municipal Securities Rulemaking Board Rule G-10, on Investor and Municipal Advisory Client Education and Protection, Municipal Advisors are required to provide certain written information to their municipal entity and obligated person clients which include the following:
 BLX is currently registered as a Municipal Advisor with the U.S. Securities and Exchange Commission and the Municipal Securities Rulemaking Board.

Within the Municipal Securities Rulemaking Board (“MSRB”) website at www.msrb.org, the City may obtain the Municipal Advisory client brochure that is posted on the MSRB website.

The brochure describes the protections that may be provided by the MSRB Rules along with how to file a complaint with financial regulatory authorities.

EXHIBIT B

SCHEDULE
City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 8
D. FEES AND COSTS
Although an important aspect of consideration, the financial cost estimate will not be the sole justification for consideration. Negotiations may or may not be conducted with the proposer; therefore, the proposal submitted should contain the proposer’s most favorable terms and conditions, since selection and award may be made without discussion with any firm. All prices should reflect “not to exceed” amounts per item. Proposer must offer services at a rate comparable to the rate proposer offers to other governmental entities for similar work. Offering a higher rate to the City than the comparable rate is grounds for disqualification of the Proposer.

BLX does not structure its fees for advisory services based on any set formula or approach. We have provided similar services to those contemplated by the City on (i) a fixed fee basis; (ii) an hourly basis; and (iii) a percentage of transaction-size basis.

The most important factor in determining an appropriate fee structure is the City’s comfort that our fee is appropriate for the work and value provided and consistent with “the market.” Therefore, while we have proposed a fee schedule as shown below, we are amendable to negotiate alternative fee structures that may be deemed more acceptable by the City.

Our proposed fee structure is segmented in a manner consistent with our response to Section B – General Scope of Work.

Phases I & II: Ongoing General & Pre-Issuance Transactional Services As the depth and amount of the services required in this phase are difficult to approximate, we believe these services are fairly compensated by an hourly billing arrangement. Our proposed hourly fees are as follows:

Title Hourly Rate
President $600
Managing Director $550
Phase III: Transactional Services
Once the City has elected to pursue a specific financing, our fee for services in connection with such a financing would then shift to a contingent arrangement. Under such an arrangement, BLX would only be compensated upon a successful closing.

Our proposed fee for these services is as follows:

Debt Transaction: $1.00/$1,000 Bond with a cap of $250,000 and a floor of $65,000 per transaction
Derivative Transaction: The present value of .02% of the notional amount for each year the derivative is outstanding with a cap of
$250,000 and a floor of $65,000
City of Vernon
Proposal to Provide Financial Advisory Services
BLX Group | 9
Phase IV: Post-Issuance Services
Our fees for the services described in the corresponding section of our response to Section 2 are as follows:

A. Arbitrage Rebate Compliance Services (on a per bond issue basis) Annual Report Fee (per report) $2,000
B. Continuing Disclosure Services
Electric System $12,000
Redevelopment $5,000
Water System $5,000
C. Derivative Monitoring Services
Per Outstanding Derivative (swap) $1,000
D. SB 1029 Services
Report Fee $1,000

EXHIBIT C

EQUAL EMPLOYMENT OPPORTUNITY

PRACTICES PROVISIONS
A. Contractor certifies and represents that, during the performance of this Agreement, the contractor and each subcontractor shall adhere to equal opportunity employment practices to assure that applicants and employees are treated equally and are not discriminated against because of their race, religious creed, color, national origin, ancestry, handicap, sex, or age. Contractor further certifies that it will not maintain any segregated facilities.

B. Contractor agrees that it shall, in all solicitations or advertisements for applicants for employment placed by or on behalf of Contractor, state that it is an "Equal Opportunity Employer" or that all qualified applicants will receive consideration for employment without regard to their race, religious creed, color, national origin, ancestry, handicap, sex or age.

C. Contractor agrees that it shall, if requested to do so by the City, certify that it has not, in the performance of this Agreement, discriminated against applicants or employees because of their membership in a protected class.

D. Contractor agrees to provide the City with access to, and, if requested to do so by City, through its awarding authority, provide copies of all of its records pertaining or relating to its employment practices, except to the extent such records or portions of such records are confidential or privileged under state or federal law.

E. Nothing contained in this Agreement shall be construed in any manner as to require or permit any act which is prohibited by law.