The City has been contracting with Urban Futures, Inc. as its municipal advisor since 2015.  Prior to that, Mr. William Reynolds, Director in the Public Finance Group of Urban Futures, Inc. has been serving the City since the late 90’s.  While the City benefited from service continuity, it is also important for us to follow best practices and re-evaluate the scope of service provided with the change in the City’s financing and debt management needs, along with the development of the municipal advisory industry.

A Request for Proposal (RFP) was issued on May 5, 2020 for financial advisory services.  Six proposals were received from highly qualified municipal advisors by May 22, 2020, the submission deadline. A comprehensive evaluation of all proposals was performed by a team of three Finance staff members, based on the proposer’s qualification, project team’s experience and structure, the proposer’s understanding of the City’s financial operations and existing debt obligations, as well as service cost.  Both Assistant City Managers and the Finance Director also conducted a virtual interview with the top two proposers.  FRA was selected as the best qualified firm.

FRA is a California corporation considered a leader in independent municipal advisory services to public agencies since 1966.  Since January 1, 2015, FRA has completed over 600 public agency transactions, totaling over $25 billion in proceeds. Of those, 201 financings, totaling $5 billion, were for cities like Garden Grove.  FRA has uniquely positioned itself as a financial advisor who offers client education, guidance, and recommendations, and acting as an extension of its clients’ staff. They serve over 60 California cities including the City of Irvine. 

FRA will be providing comprehensive municipal advisory services including debt issuance, financial condition review, capital financing structuring, post issuance compliance, and other special projects on as needed basis. The entire scope of services is included in Attachment A of the Consultant Agreement between the City and FRA (Attachment 1).

The contract provides a period of three years of service from full execution of the agreement, with an optional extension of two one-year periods.  The fee structure is listed as Attachment B of the Consultant Agreement.

The fees quoted by FRA in the attached Consultant Agreement are lower than our current service fee, including the fees for transaction services for debt issuance and continuing disclosure annual reporting.  Payments for the fees pursuant to debt issuance are contingent upon, and payable at the closing of the debt issue, from bond proceeds.  Continuing disclosure service fees of $3,000 per year are included in the annual budget.

It is recommended that the City Council:

• Award a contract to Fieldman, Rolapp & Associates, Inc. (FRA) to provide financial advisory services for a three year term and two additional option years; and

• Authorize City Manager to execute the Consultant Agreement on behalf of the City.