HomeMy WebLinkAbout02/23/1988, C-2 - AGENDA
DATE, i:EM-
THIS ISTHE SAME REPORT, THAT' WAS S SENT TO YOU ON
FEBRUARY 16;' 1988
FINANCIAL .ADVISOR
CI-W Of Safi LUIS OBISPO M DArE.
COUNCIL AGENDA RE ORT MB :
FROM: William C. Statler, Director of Finance
SUBJECT:
Request for authorization to enter into contract negotiations for
financial services.
CAO RECOMMENDATION:
Select the joint proposal submitted by Evensen Dodge and Vertex Cost
Systems contingent upon successful contract negotiations.
OVERVIEW
As authorized in the 1987-89 Financial Plan, Requests for Proposals (RFP)
for financial services were distributed on November 24, 1987 to twenty-six
firms representing a broad range of financial disciplines. As summarized
in Attachment A, eleven proposals were received by the closing date of
January 11, 1988. Based upon an extensive evaluation and review of the
written proposals as well as oral presentations and subsequent background
and reference checks,'it is recommended that the City Council select the
joint proposal submitted by Evensen Dodge and Vertex Cost Systems, and
authorize the Department of Finance to enter into contract negotiations.
Upon successful completion of these negotiations, the Department of
Finance will return to the City Council for approval of the contract
documents.
BACKGROUND
The need to further develop financial management tools and strategies for
fiscal independence was identified in the 1987-89 Financial Plan as major
objectives to be accomplished during the next two years. Specific program
efforts related to these two major objectives included:
• Evaluating the city's capital needs and financing alternatives.
0 Identification of revenue sources and funding strategies for
capital projects.
• Preparation of a cost allocation plan and cost of service study,
including an analysis of user fees.
• Development and implementation of a comprehensive funding and
financing plan.
The 1987-89 Financial Plan included funding for the use of consultant
services in order to provide the independent evaluation and technical
assistance required to integrate these program efforts.
SELECTION PROCESS
As summarized in Attachment A, eleven proposals were received in response
to the City's RFP ranging in cost from $62,120 to $136,000. In general, /
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COUNCIL AGENDA REPORT
all of the firms responding to the RFP possess national (and in some cases
international) reputations that reflect favorably on their ability to
perform various elements of the overall workscope.
The evaluation and selection process consisted of the following steps:
• Review of all written proposals in conjunction with the
selection criteria provided in the RFP.
• Selection of five firms for oral presentations before a review
committee composed of the Assistant CAO, Director of Finance,
Utilities Manager, City Engineer, Director of Personnel , and
Financial Systems Manager.
• Vendor background and reference checks.
Under this review and selection process, proposals were evaluated and
ranked based on the following criteria:
s Technical ability as reflected by the qualifications of key
personnel , experience with similar projects, and understanding
of the workscope. .
a Ability to perform the total scope of services.
• Quality of the written proposal and oral presentation.
0 Cost effectiveness of the proposal in meeting the city's
workscope goals and objectives.
Based on this evaluation and review process, it is recommended that the
City Council select the joint proposal submitted by Evensen Dodge and
Vertex Cost Systems and authorize the Department of Finance to enter into
contract negotiations.
SCOPE OF SERVICES
The scope of work to be provided through consultant services includes the
following three major elements:
Task 1: City-Wide Cost Allocation Plan and Cost Recovery .Pro_ram
This portion of the work program would primarily be performed by Vertex
Cost Systems, and includes the following elements:
• Development of cost allocation plan to determine total cost of
providing municipal services.
• Determine current and potential user fees and related activity
costs.
• Comparison of city's current and proposed fees with other
agencies. /��
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jMn7aCOUNCILAGENDA REPORT
• Development of indirect cost rates for use in federal and state
grants.
Task 2: Comprehensive Financial Planning
Using the cost of service information developed under Task 1, this portion -
of the workscope would be primarily performed by Evensen Dodge, and
includes the following elements:
• Review of capital financing requirements.
0 Evaluation of existing debt structure.
• Identification and analysis of potential financing options
including equity (cash-on-hand, grants, user fees, development
impact charges) and debt (bonds, notes, lease-purchase
agreements, certificates of participation) .
• Review of priority and timing of capital projects.
• Based on review of financing options and phasing alternatives,
evaluation of available debt financing tools.
• Analysis of, overall financial position and development of debt
management and reserve policies.
• Recommendations regarding financing plan and schedule.
Task 3: Project Financings
Evensen Dodge would also be responsible for this element of the workscope
by acting as Financial Advisor to the City for specific debt issuances.
Evensen Dodge is especially qualified to serve in this capacity; although
relatively new to the California market, Evensen Dodge is the nation's
leading independent financial advisor.
For each project requiring debt financing, services provided by Evensen
Dodge would include:
• Presale analysis addressing items such as issue size, security
and call features, credit enhancements and rating strategies,
sale method (competitive or negotiated) , principal payment
schedule, maturity period, and financing schedule.
• Preparation of financing documents such as the Official
Statement, any required City Council resolutions, notice of
sale, bid forms, and bond purchase agreements.
• Coordination with rating agencies.
• Marketing of issues.
• Closing and post-sale analysis. �—�
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= COUNCIL AGENDA REPORT
FISCAL IMPACT
Adequate funding is available in the 1987-88 Budget for the anticipated
level of expenditure ($89,750) associated with the recommended joint
. proposal for Tasks 1 and 2. Any costs associated with services provided
by Evensen Dodge acting as a financial advisor related to the issuance of
bonds (Task 3) will be funded from the proceeds of any such capital
financings.
SUMMARY
The 1987-89 Financial Plan identified the further development of financial
management tools and strategies for fiscal independence as major
objectives to be accomplished during the next two years. To assist with
specific program efforts associated with these objectives, the use of
consultant services was authorized in the 1987-88 Budget. It is
recommended that the joint proposal submitted by Evensen Dodge and Vertex
Cost Systems be selected in providing financial services to the City in
meeting these program objectives, and that the Department of Finance be
authorized to enter into contract negotiations with these firms. It is
anticipated that one contract will be executed with Evensen Dodge, with
Vertex Cost Systems serving as a sub-contractor to Evensen Dodge.
Copies of the RFP and the proposals (along with supplemental materials
provided by the vendors during oral presentations) are on file and
available for review in the Council Office.
ACTION TAKEN
Approved As recommended As modified
Denied _Continued
VOTE:
EG88004/TXTELLA
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