9.A.
City Council Meeting - FINAL
- Meeting Date:
- 12/01/2015
- From:
- Rick Tadder, Acting Management Services Director
Information
TITLE:
Consideration and Approval of Contract: Financial Advisor Contract with Stifel, Nicolaus & Company, Incorporated.
RECOMMENDED ACTION:
-
Approve the contract with Stifel, Nicolaus & Company, with compensation based on the pricing schedule outlined in Exhibit C.
Executive Summary:
The City of Flagstaff Management Services Division requires the services of a Financial Advisor to assist with working with rating agencies, advise on bond structure and market conditions, provide management with regard to issuing debt, and provide technical assistance with financing alternatives.
Financial Impact:
The financial impact of approving this contract will be based on the services requested by the City. Fees will only be charged to the City upon issuing/refinancing bonds or certificates of participation. These fees will then be charged to the capital project that is incurring the debt. Each capital project has the budget authority available.
Connection to Council Goal and/or Regional Plan:
COUNCIL GOALS:
2) Ensure Flagstaff has a long-term water supply for current and future needs
3) Provide sustainable and equitable public facilities, services, and infrastructure systems in an efficient and effective manner to serve all population areas and demographics
7) Address key issues and processes related to the implementation of the Regional Plan
9) Foster relationships and maintain economic development commitment to partners
11) Ensure that we are as prepared as possible for extreme weather events
REGIONAL PLAN:
2) Ensure Flagstaff has a long-term water supply for current and future needs
3) Provide sustainable and equitable public facilities, services, and infrastructure systems in an efficient and effective manner to serve all population areas and demographics
7) Address key issues and processes related to the implementation of the Regional Plan
9) Foster relationships and maintain economic development commitment to partners
11) Ensure that we are as prepared as possible for extreme weather events
REGIONAL PLAN:
Forest Initiative Bonds
Goal E&C.3. Strengthen community and natural environment resiliency through climate adaptation efforts.
Goal E&C.6. Protect, restore and improve ecosystem health and maintain native plant and animal community diversity across all land ownerships in the Flagstaff region.
Open Space/FUTS Bonds
Goal OS.1. The region has a system of open lands, such as undeveloped natural areas, wildlife corridors and habitat areas, trails, access to public lands, and greenways to support the natural environment that sustains our quality of life, cultural heritage, and ecosystem health.
Core Facility Bond
Goal LU.7. Provide for public services and infrastructure.
Road Repair and Street Safety Bonds
Goal T.8. Establish a functional, safe, and aesthetic hierarchy of roads and streets.
Has There Been Previous Council Decision on This:
No.
Options and Alternatives:
1) Approve the contract with Stifel, Nicolaus & Company.
2) Choose one of the other five proposals submitted for the RFP. Cons-potential higher costs associated with the contract and risk of a formal protest from Stifel, Nicolaus & Company if we choose one of the other lower scoring proposals.
3) Do not approve any contract and provide direction to staff. Cons-Delays ability to issue debt related to current projects.
2) Choose one of the other five proposals submitted for the RFP. Cons-potential higher costs associated with the contract and risk of a formal protest from Stifel, Nicolaus & Company if we choose one of the other lower scoring proposals.
3) Do not approve any contract and provide direction to staff. Cons-Delays ability to issue debt related to current projects.
Background/History:
The City has contracted for financial advisor services for many years for professional assistance in working with rating agencies and to obtain advice on bond structure and market conditions. In addition, a financial advisor provides assistance throughout the year as special projects arise that need financing.
The City's Purchasing Section conducted a formal competitive Request for Proposals (RFP), which was advertised on July 14, 2015. There were a total of six (6) proposal responses. Based on the scoring results, a decision was made to "short-list" and advance the three (3) highest scoring Proposers (1. RBC Capital Markets, 2. Piper Jaffray and 3. Stifel, Nicolaus & Company) to phase two (2) of the RFP process, which involved interview questions/presentations. Stifel, Nicolaus & Company's aggregate score, which included Phase One (1)--written proposal response and phase two (2)--interview questions/presentation, was the highest scoring Proposer and the evaluation team determined Stifel, Nicolaus & Company to be the most responsible and responsive Proposer whose offer is the most satisfactory and advantageous to the City based on the evaluation criteria outlined in the RFP document as follows:
Phase 1
1. Method of Approach (50%)
2. Capacity of Offeror/Experience (30%)
3. Pricing (20%)
Phase 2
1. Interview Questions/Presentations (10%)
The City's Purchasing Section conducted a formal competitive Request for Proposals (RFP), which was advertised on July 14, 2015. There were a total of six (6) proposal responses. Based on the scoring results, a decision was made to "short-list" and advance the three (3) highest scoring Proposers (1. RBC Capital Markets, 2. Piper Jaffray and 3. Stifel, Nicolaus & Company) to phase two (2) of the RFP process, which involved interview questions/presentations. Stifel, Nicolaus & Company's aggregate score, which included Phase One (1)--written proposal response and phase two (2)--interview questions/presentation, was the highest scoring Proposer and the evaluation team determined Stifel, Nicolaus & Company to be the most responsible and responsive Proposer whose offer is the most satisfactory and advantageous to the City based on the evaluation criteria outlined in the RFP document as follows:
Phase 1
1. Method of Approach (50%)
2. Capacity of Offeror/Experience (30%)
3. Pricing (20%)
Phase 2
1. Interview Questions/Presentations (10%)
Key Considerations:
Financial advisor services are necessary for the City for special projects that need financing that will also involve working with rating agencies and to obtain advice on bond structure and market conditions.
Expanded Financial Considerations:
The review committee received clarification on the service options and cost from the submitted proposals. Using a retainer option appeared to be more costly to the City as this would be an annual fee and we would not expect to issue debt on an annual basis. Half of the proposals included all the cost of services based on issuance of debt. Meaning the City would not be charged on an hourly basis for necessary services including items such as monthly phone calls and bond election planning assistance. Three proposals included a fee for bond election planning and one proposal had a fee for monthly phone calls. Stifel,Nicolaus & Company does not charge these extra fees. Furthermore, Stifel is including the cost of issuing the official offering statements within the cost of issuance. For all other submittal it would be an additional cost to the City. Therefore, the City will only be billed for services base on the size and type of debt issuance. Those fees billed will be charged to the City project responsible. In years that the City does not issue new debt, there will be no fee for services.
Community Benefits and Considerations:
Having a contacted financial advisor helps the City manage its existing debt and issue new debt at the best rates.
Community Involvement:
Inform