Agenda Report
Fullerton City Council
MEETING DATE: AUGUST 1, 2023
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: Ellis chang, director of administrative services PREPARED BY: STEVEN AVALOS, BUDGET PURCHASING MANAGER SUBJECT: AMENDMENT NUMBER ONE TO professional services agreement WITH URBAN FUTURES, INC. for continuing disclosure and post-issuance compliance services
SUMMARY
Consideration of Amendment Number One to Professional Services Agreement with Urban Futures, Inc. (UFI) to perform Continuing Disclosure and Post-Issuance Compliance Services on behalf of the City for all its debt obligations.
RECOMMENDATION
Approve Amendment Number One to Professional Services Agreement with Urban Futures, Inc. and authorize City Manager, or designee, to execute agreement and related documents including extension options, in a form approved by the City Attorney.
Authorize Director of Administrative Services, or designee to enter into change orders for related debt compliance and reporting services within budget.
CITY MANAGER REMARKS
The City Manager recommends approval to approve amendment number one to Professional Services Agreement with Urban Futures Inc.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statement:
Fiscal and Organizational Stability.
FISCAL IMPACT
No additional fiscal impact to the Fiscal Year 2023-24 Budget, as it included continuing disclosure services. The cost for continuing disclosure services depends on amount of debt issuance, typically ranging from $600 to $3,000 for each City debt obligation. Staff anticipates a $12,300 annual cost for UFI to perform services, based on the City’s current debt portfolio., The annual cost of services could increase or decrease should the City issue additional debt or defease or mature current debt obligations.
DISCUSSION
The City entered into a professional services agreement with UFI to perform municipal advisory services for City debt issuances and pension obligation bonds analysis and services in March 2022. UFI monitors the City’s outstanding debt issues and advises on potential financing and refunding opportunities based on market trends and possible savings as the City’s municipal advisor. UFI helped the City successfully refund the Successor Agency 2005 Tax Allocation Bonds and 2010 Housing Tax Allocation Bonds, resulting in an approximately $243,000 average annual savings to the General Fund and the City’s 2013 Judgment Obligation bonds, which resulted in an approximately $45,000 annual savings.
The City must submit annual continuing disclosure reports for existing debt on the Electronic Municipal Market Access (EMMA) portal and annual debt and Mark-Roos reports with the California Debt and Investment Advisory Commission (CDIAC) to ensure debt compliance as part of the City’s debt management program. The City utilizes its property and sales tax consultant, HdL Coren & Cone, to perform these annual continuing disclosure services.
Staff recommends the City “single-source” these services under one agreement to streamline municipal advisory and debt reporting services and approve Amendment No. One to the Professional Services Agreement with UFI to perform Continuing Disclosure and Post-Issuance Compliance Services on behalf of the City for all its debt obligations. Single-sourcing occurs when multiple sources can provide a service, but given the current needs and/or urgency of a situation, the City can select a known single service provider (or source) to provide such services. The Securities and Exchange Commission, CDIAC and bond investors require timely and accurate disclosure for publicly issued securities. Many agencies contract with a single provider for post-issuance compliance services to ensure they meet all disclosure requirements and deadlines.
UFI is an industry leader in municipal advisory services in California and has provided continuing disclosure services since 1994, when public agency debt reporting requirements became mandated. UFI serves over 200 California cities, enterprise districts, successor agencies, joint powers and financing authorities, school districts and charter schools. UFI has extensive experience providing disclosure reporting for all credit types, legal structures and methods of sale for the City of Fullerton debt obligations. UFI has first-hand and in-depth knowledge and familiarity with the structure and parameters of all City debt issues and obligations as the City’s municipal advisor and can immediately perform these debt management services.
Approving Amendment One with UFI would add continuing disclosure and post-issuance compliance services to UFI’s municipal advisory services with the same agreement term through April 30, 2026 and two optional one-year renewals.
Attachments:
Attachment 1 – Amendment No. One to Professional Services Agreement Attachment 2 – Professional Services Agreement with Urban Futures, Inc. cc: City Manager Eric J. Levitt
Urban Future, Inc. Amendment No. One to PSA
August 1, 2023 - Page 2