Title
Contract No. 2204949 Municipal Advisory Services
O & M
Body
Agenda of: June 28, 2023
Item No.: 2023-181
Amount: $3,150,000.00
TO: The Honorable
Board of Directors
Great Lakes Water Authority
FROM: Suzanne R. Coffey, P.E.
Chief Executive Officer
Great Lakes Water Authority
DATE: June 28, 2023
RE: Contract No. 2204949
Municipal Advisory Services
Vendor: PFM Financial Advisors LLC
MOTION
Upon recommendation of Nicolette Bateson, Chief Financial Officer/Treasurer, Financial Services, the Board of Directors (Board) of the Great Lakes Water Authority (GLWA), authorizes the Chief Executive Officer (CEO) to enter into Contract No. 2204949, “Municipal Advisory Services” with PFM Financial Advisors LLC, at a cost not to exceed $3,150,000.00 for a duration of three (3) years with two (2) one (1) year renewal options; and authorizes the CEO to take such other action as may be necessary to accomplish the intent of this vote.
BACKGROUND
The role of a municipal financial advisor is to act in a fiduciary capacity and provide other non-transactional services including providing advice on compliance matters, various debt management agreements, financial plans, strategies, and policies. More specific responsibilities include assistance with the following:
• The plan of finance and related transaction timetable.
• Financing solutions and alternatives for funding the capital improvement plan.
• Method of sale for bond transactions, considering market conditions and near-term activity in the municipal market.
• Rating agency strategies and presentations.
• Bond-related and State Revolving Fund (SRF) loan-related activities associated with Internal/external accountants, feasibility consultants and escrow agents.
• Selection of underwriters, underwriter compensation issues, syndicate structure and bond allocations.
• Negotiated bond sales, including advice regarding retail order periods and institutional marketing, analysis of comparable bonds and secondary market data.
• Competitive bond sales, including preparation of notice of sale and preliminary official statement, bid verification, true interest cost (TIC) calculations and reconciliations/ verifications of bidding platform calculations, preparation of notice of sale, obtaining CUSIP numbers.
• SRF loan closing processes, including preparation of required schedules, assistance with application filings, and support throughout as needed.
• Preparation of preliminary cash flows/preliminary refunding analysis.
JUSTIFICATION
In accordance with the GLWA procurement policy, a solicitation for competitive proposal process was conducted for professional services. Attached is the Procurement Report. Four proposals were received. Each firm submitting a proposal also provided an oral presentation followed by a question and answer session with the evaluation panel. Following scoring, one firm was selected for negotiations which was PFM Financial Advisors LL (PFM).
PFM has previously served as the GLWA’s financial advisor and performed well.
The current municipal advisory services contract is set to expire June 30, 2023. The new proposed contract is for a duration of three (3) years with two (2) one (1) year renewal options.
FINANCIAL PLAN IMPACT
Fees related to bond transactions will be paid out of the proceeds of the bonds issued. The bond proceeds as shown in the financial plan are net of fees.
Fees related to state revolving fund (SRF) transactions and other services are expensed and paid out of operations & maintenance budget. See attachment 1.
COMMITTEE REVIEW
This item was reviewed by the GLWA Audit Committee at its meeting on May 26, 2023. The Audit Committee unanimously recommends the Board of Directors (Board) of the Great Lakes Water Authority (GLWA), authorizes the Chief Executive Officer (CEO) to enter into Contract No. 2204949, “Municipal Advisory Services” with PFM Financial Advisors LLC, at a cost not to exceed $2,500,000.00 for a duration of three (3) years with two (2) one (1) year renewal options; and authorizes the CEO to take such other action as may be necessary to accomplish the intent of this vote.
SHARED SERVICES IMPACT
This item does not impact the shared services agreement between GLWA and DWSD. It should be noted that fees for bond transactions are deducted from a pro-rata percentage of the bond proceeds when a market-based transaction encompasses funding for DWSD. DWSD also reimburses GLWA for SRF transaction costs incurred. A representative of DWSD was included in the procurement process.