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TRANSPORTATION AGENCY FOR MONTEREY COUNTY Memorandum | |
| | | | | | | | | To: | Board of Directors | | From: | Michael Zeller, Director of Programming & Project Delivery | | Meeting Date: | March 25, 2020 | | Subject: | Measure X Financial Advisory Services |
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| | | | | | | | | RECOMMENDED ACTION: | AUTHORIZE the Executive Director to execute contract amendment #1 with KNN Public Finance to continue providing Measure X financial advisory services through the period ending June 30, 2023. |
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| | | | | | | | | SUMMARY: | | With the passage of Measure X, the Agency requires the services of a certified financial advisor to review and provide guidance on issues including, but not limited to, goal setting, bonding strategies, investments, and cash flow projections. The Transportation Agency's existing contract with KNN Public Finance expires on June 30, 2020 and staff is seeking to extend the term of the agreement until December 31, 2023 with no change to the approved budget. |
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| | | | | | | | | FINANCIAL IMPACT: | | The existing three-year contract specifies an annual not-to-exceed amount for this agreement of $30,000, for a total not-to-exceed amount of $90,000, out of Measure X revenues. At present $70,420 remains in the contract. |
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| | | | | | | | | DISCUSSION: | In May 2017, the Transportation Agency Board approved an agreement for services with KNN Public Finance after a competitive solicitation to provide Measure X financial advisory services. In this role as the Agency's financial adviser, KNN Public Finance both helps protect the Transportation Agency’s interests and also assists in identifying ways to potentially reduce costs and save money in an overall financing program.
The scope of work for the agreement provides for on-call services including updating strategic plans, developing cash flow models, evaluating various financing scenarios under differing sales tax revenue assumptions, considering other local, state and federal funding sources, assisting with developing debt policies and practices, debt capacity studies, debt monitoring programs, credit rating strategies, investor outreach programs and managing underwriter relations. If the Agency were to elect to move forward with a bonding strategy, the role of the adviser would be to coordinate the competitive sale of bonds, including advising the agency on market timing, marketing strategy, and issue structure, secure the best possible credit rating for our bond sales, and coordinate a bond sale team of a bond counsel, trustee, verification agent and financial printer.
When the agreement with KNN Public Finance was first approved, Agency staff anticipated that debt financing of Measure X regional projects would occur within the three-year period for the contract. However, due to revised schedules for several projects that pushed out construction start dates, and Measure X revenues coming in higher than estimated, the Agency currently has sufficient reserves of Measure X regional funds to delay the need for a bond issuance. As such, Agency staff is seeking to extend the contract with KNN Public Finance until December 31, 2023 to continue providing financial advisory services without amending the current not-to-exceed amount of $90,000. Since the Agency did not require all the services included in the scope of work during the current agreement period, there still remains sufficient budgeted funds to extend the agreement. |
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