Transportation Agency staff is seeking to retain the services of an on-call financial advisor to assist the Agency with setting financial goals and policies for the implementation of Measure X, maintaining overall program cash flow, and, if determined necessary, issuing bonds to expedite the delivery of measure projects. A financial advisor would serve as the Transportation Agency’s agent for optimizing the Measure X financing strategy and are bound by a fiduciary duty to provide advice in the best interests of their clients, whereas other market participants are not. In short, a financial advisor will both help protect the Transportation Agency’s interests and also assist in identifying ways to potentially reduce costs and save money in an overall financing program.
Retaining the services of a financial advisor would provide the following benefits to the Transportation Agency:
- Develop a Strategic Plan and Conform to the Plan’s Goals and Objectives
- Assist in Meeting Securities Law and IRS Requirements
- Provide Knowledge and Expertise Regarding the Complexities of the Municipal Bond Market
- Manage the Bond Offering Process
- Secure the Highest Credit Rating and Lowest Cost of Funds
The Transportation Agency Board of Directors approved the release of a request for proposals at the March 22, 2017 meeting for Measure X financial services. After a competitive bidding process, the Agency received three submittals, from:
- Fieldman, Rolapp & Associates
- KNN Public Finance
- Public Financial Management (PFM)
The review team scored and ranked the proposals based on the following criteria:
- Qualifications of the consultant and any team members
- Ability of the firm to provide specified services
- Evaluation of references from past clients
- Understanding of the project and the proposed management approach
- Firm price quote for services
- Committed degree of participation for key personnel
- Familiarity with the local conditions in Monterey County
Based on their significant experience working with new self-help counties to provide the services listed in the proposed scope of work (Attachment 1), their knowledge of bond markets and setting debt financing strategies for public agencies, the fact that their proposed budget that was within the not-to-exceed amount, and they had favorable references from past clients, the review team is recommending the selection of KNN Public Finance for the contract. In particular, KNN Public Finance has worked with other transportation agencies, such as Los Angeles METRO, Madera County Transportation Authority, San Francisco Bay Area Rapid Transit, and the Santa Barbara County Association of Governments.
For this proposed scope of work, the selected financial advisor will provide 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 advisor 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.
Aside from assisting the agency on bond sales, the advisor could also develop for Board consideration a Measure X investment policy. Measure funds are invested in the County Treasury and the Agency receives the interest rate that is paid by the treasury. The financial advisor could explore options for Board consideration for maximizing the Agency’s rate of return within the Treasury or investing funds in some other highly secured fashion, as allowed by state law.