MEETING DATE:
JANUARY 24, 2017
SUBJECT:
Title
CONTRACT AWARD FOR FINANCIAL ADVISORY SERVICES
Body
Recommendation
Recommendation
NOTE AND FILE
Body
Board or Commission Action
Not applicable.
Relevant Council Strategic Theme
Good Governance
Relevant Department Goal
Not applicable.
Introduction
Municipal finance has grown considerably more complex in recent years coupled with regulations requiring more transparency and continuing disclosure. The City will be well served by engaging an independent expert that will assist and advise the City on services consisting of bond and CFD financings, continuing disclosure requirements, and third party alternative and special facility financing, to name a few. To date, the City has not engaged the services of a financial advisory firm for “as-needed/on-call” services.
On October 3, 2016, the City issued a Request for Proposal (“RFP”) for Financial Advisory Services. The RFP was posted on the City’s website and a legal ad appeared in the October 3rd issue of the San Diego Union-Tribune, which is a general circulation newspaper.
Discussion
The City is an active participant in the municipal bond market and oversees direct obligations and conduit financings issued by the City, Redevelopment/Successor Agency, as well as the Public Facilities/Financing Authorities.
In addition, through the issuance of various Mark-Roos Pooled financings the City also oversees local obligations issued by Community Facility Districts:
Community Facilities District No. 88-1
Community Facilities District No. 91-01
Community Facilities District No. 99-01
Community Facilities District No. 2002-01
The City also relies on various Community Facilities Districts (‘CFDs”) as a source of funding for various services and facilities, such as police, fire/paramedic and lighting and landscaping which includes, street lights, traffic signals, medians/parkways, trails, and other facilities that are project specific. These CFDs include:
Community Facilities District No. 98-01, Improvement Area No. 1 (Police Only)
Community Facilities District No. 98-02 (Lighting, Landscaping, Open Space and Preserve Maintenance)
Community Facilities District No. 2001-01 (Fire/Paramedic)
Community Facilities District No. 2011-01 (Congestion Management)
To date, the City has engaged the services of financial advisory firms for specific projects requiring specific types of financing like those mentioned above.
With an ever changing financial environment and the continued demand for transparency, the City will be well served by engaging the services of an experienced, registered Financial Advisory firm (the “Financial Advisor”) to advise the City on various debt financing projects and assist with formation of Community Facilities Districts on an “as-needed basis”. The Financial Advisor will assist in the evaluation, structuring, marketing, sale and closings of long-term debt obligations during the contract period. The Financial Advisor may also be called upon to provide financial advisory services during the course of the contract for other financings the City may undertake. In addition, the Financial Advisor will assist in the preparation and evaluation of responses to a Request for Qualifications (RFQ) to develop a short list of underwriting firms the City may work with on various debt financing projects.
The City issued an RFP for Financial Advisory Services on October 3, 2016. The RFP was posted on the City’s website and a legal ad appeared in the October 3rd issue of the San Diego Union-Tribune, which is a general circulation newspaper. Attached as “Attachment A” is a list of the “Scope of Services” included as part of the City’s RFP.
On October 17, 2016, the proposal due date, the City received four responses to the RFP. Proposals were received from 1) Fieldman Rolapp & Associates, 2) KNN Public Finance, 3) The PFM Group, and 4) Urban Futures Inc. According to a recent article published by The California Debt and Investment Advisory Commission (“CDIAC”), the firms that submitted proposals are listed as the top four financial advisor firms in the State.
The proposals were independently reviewed and rated, using criteria set forth in the RFP, by three different Finance Department staff members. While completeness and quality of the proposal, as well as an understanding of the work to be done, were considered in the evaluation of the proposals, greater emphasis was placed on each firms demonstrated knowledge, experience and resources relating to long-term strategic financial planning, bond transactions for the purpose of refinancing existing debt or generating new money, as well as market and pricing information. Each firm’s cost and fee schedule were also taken into consideration. After careful review and discussion, Fieldman Rolapp & Associates was unanimously selected as the best suited financial advisor firm that meets the City’s needs.
On October 28th, with City Manager approval, the contract was awarded to Fieldman Rolapp & Associates. The term of the contract will be for five (5) years, with three (3) one-year options, which may be exercised at the City’s sole discretion.
Fiscal Impact
Fiscal impact is unknown at this time. Professional services will be requested on an as needed basis and will be budgeted accordingly.
Attachment(s)
Prepared by: Roque Chiriboga, Fiscal Services/Debt Manager
Reviewed by: Laura Rocha, Finance Director
Approved by: Jack Griffin, City Manager