City of Manteca
Municipal F
Request for Proposal for Municipal
Financial Advisory Services
No. 2022-05-05MFA
Proposal Due:
May 5, 2022
At or Before 2:00 P.M. Local Time
URBAN FUTURES, INC.
Public Finance Group
Public Management Group
Southern California Office
17821 E. 17th Street, Suite 245
Tustin, CA 92780
Bus: (714) 283-9334
Fax: (714) 283-5465
Northern California Office
1470 Maria Lane, Suite 315
Walnut Creek, CA 94596
Bus: (650) 503-1500
Fax: (925) 478-7697
ATTACHMENT 4
Proposal Contents
3.21. Signature Page .......................................................................................................................................
3.2.2 Cover Letter ......................................................................................................................................... 1
3.2.3 Company Overview ............................................................................................................................. 1
3.2.4 Subcontractors .................................................................................................................................... 2
3.2.5 Relevant Experience ............................................................................................................................ 2
3.2.6 Support Team ...................................................................................................................................... 7
3.2.7 Timeframe for Completion ................................................................................................................. 8
3.2.8 Assistance from City ............................................................................................................................ 8
3.2.9 Project Cost ......................................................................................................................................... 9
3.2.10 Proposed Scope of Work ................................................................................................................. 10
3.2.11 Acknowledgment of Addenda ........................................................................................................ 14
3.2.12 Evaluation of Proposed Agreement ............................................................................................... 14
3.2.13 Conflict of Interest .......................................................................................................................... 14
3.2.14 Affidavit of Non-Collusion............................................................................................................... 14 Appendix A: Professional Biographies – UFI Team Members ................................................................ A-1 Appendix B – Items Typically Required By S&P for Utility Financings .................................................... B-1 Appendix C – Required Forms ................................................................................................................... C-1 ATTACHMENT 4
3.21. Signature Page
Proposers must include a completed Signature Page, as attached hereto as Exhibit A, at the front of their proposals. Failure to include a completed Signature Page shall be grounds for rejection of the proposal.
ATTACHMENT 4
3.2.2 Cover Letter
Finance Department
Attn: Kevin Williams
1001 W. Central St.
Manteca, CA 95337
Re: Request for Proposal for Municipal Advisory Services – Urban Futures, Inc.
Dear Mr. Williams:
Urban Futures, Inc. (UFI) is pleased to submit this proposal to the City of Manteca (the City) for the purpose of providing objective, independent municipal advisory services to the City. As one of California’s leading municipal advisory firms, we believe that we are well positioned to provide the City with a high level of service from an experienced team of California-based professionals. We are grateful to have had the opportunity to advise the City over the past 31 years on a variety of different engagements, including bond financings as well as serving as dissemination agent, and we look forward to continue working with the City.
Since 1972 our firm has strived to offer the highest level of service, technical skills, and local knowledge, exclusively to California municipalities from our offices in Northern and Southern California. As such, UFI has consistently been ranked as one of the top municipal advisory firms in the State of California in four out of the last five years, and remains the number one firm by total transactions in the state since 2017.
We have a proven track record of advocating on behalf of our clients and keeping our clients informed regarding new public financing innovations, current interest rate trends, and relevant new State and Federal legislation that could affect our California clients’ financing choices.
The following is a summary of our expertise and experience providing municipal advisory services that exhibit our distinguishing ability to perform the City’s Scope of Work:
x Experienced Personnel: Three municipal advisors will work directly on the City’s account – Douglas Anderson, Director (Primary Contact); Julio Morales, Director; and Branden Kfoury, Senior Associate. Our team draws on years of experience in various areas of specialty, including pension modeling, complex financial structuring, credit analysis, and pricing execution. x Comprehensive Approach: UFI’s financial advisors and consultants include former city finance directors, city planners, public administrators, city attorneys, public finance investment bankers, and rating agency analysts, which allows us to offer the City a comprehensive blend of qualifications and resources. Hiring our firm will provide you with a “think tank” of public finance experts to assist the City with debt financings, efficient management of its debt program, informative analysis of financing alternatives for its Capital Improvement Plan, and strategic financial planning including targeting pension and OPEB liabilities to maintain critical service levels.
ATTACHMENT 4
x Leading California Municipal Advisor: UFI has been a leader in providing financial advisory services since 1972 to over 300 public agencies throughout California. UFI has ranked as the top financial advisory firm in California in four of the five most recent years as measured by the number of transactions completed. As one of the leading financial advisors in the State, UFI is in the market virtually every week. Our unmatched experience in California is especially critical to the success of municipal transactions in today’s volatile market. x Credit Expertise: If the City chooses to issue bonds in the public market, the rating process will be critical, especially during these unprecedented times. UFI has extensive experience in presenting municipal credits to rating agencies and achieving upgrades through best-in-class rating presentations that demonstrate thorough understanding of credit nuances. x Technical Competence: Providing our clients with responsive and high-quality analytical services is central to our mission. UFI is staffed with financial advisors who have extensive experience building proprietary financial models that are tailored to our client’s needs. Specific to our pension advisory practice, UFI creates a custom Pension Model for each client, which includes an underlying amortization schedule for each amortization base.
Working with the City is very important to us. UFI is committed to dedicating as much of the firm’s resources to each of the City’s assignments as is necessary to complete them in a comprehensive and timely fashion.
Sincerely,
Douglas P. Anderson
Director, Public Finance Group
Email: [email protected]
Phone: (714) 923-3543
Year Ranking
No. of
Issues Par Size (MM)
Avg. Size
(MM)
2021 2 118 $4,001.30 $34
2020 1 162 $3,753.40 $23
2019 1 170 $3,415.80 $20
2018 1 145 $2,899.60 $20
2017 1 145 $2,628.20 $18
Total 1 740 $16,698.30 $23
*Excludes Private Placement transactions
Source: Thomson Reuters
Top Municipal Advisors for California Municipal Bonds
(2017 - 2021)*
ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
1 3.2.3 Company Overview
A brief description of the company and its structure, including, but not limited to, the name(s), business address(es), and telephone number(s) of the company's officers, directors, and associates, and the name( s) and address( es) of any parent or subsidiary companies.
Since 1972, Urban Futures, Inc. (UFI), has provided municipal advisory services to hundreds of California cities, counties, special districts, schools, community colleges, and non-profits. UFI is one of the most active municipal advisory firms in the State, having led more transactions than any other firm over the past five years.
UFI has been doing business for the past 50 years under the same name and has been wholly owned by Michael Busch, Chief Executive Officer, for the last seven years. The firm is structured as a C-Corporation and is headquartered in Tustin, California. UFI does not have any subsidiaries. Contact information is provided in the table below.
Urban Futures, Inc.
Address: 17821 E. 17th Street, Suite 245 | Tustin, CA 92780 Office: (714) 283-9334
Email: [email protected]
UFI is staffed with 21 professionals in two California office locations: Tustin (12) and Walnut Creek (9) with 100% focus on providing municipal advisory and consulting services to California municipalities.
What differentiates us from our peers is the widespread list of municipal services that we provide to our clients, making us a “one-stop shop” for financial solutions. Rather than seeking different consultants to address discrete financial issues on a piecemeal basis, clients engage our firm to provide them with services ranging from municipal advisory assignments for issuance of bonds, post debt issuance compliance reporting as well as pension and financial forecast modeling.
UFI provides services through its three main divisions:
x Public Finance Group (“PFG”) supports the issuance of debt including pension obligation bonds, lease revenue bonds/certificates of participation, equipment leases, special tax and benefit assessment bonds, utility revenue bonds, general obligation bonds, tax allocation bonds, and privately placed loans. We help staff evaluate and implement various financing options for priority projects (including bonds, revolving lines of credit, and State and Federal loan programs) and refinancing opportunities. All of the professionals in PFG have passed the MSRB Series 50 Municipal Advisor Representative examination.
x Public Management Group (“PMG”) offers financial health evaluation, financial forecasting, fiscal sustainability planning, special studies, and performance improvement services, including pension & OPEB modeling.
x Analytics and Compliance Group provides services related to post-issuance compliance, including continuing disclosure, arbitrage rebate, and CDIAC reporting compliance.
ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
2 What Sets Up Apart
Full-Service Solutions: What differentiates us from our peers is the comprehensive municipal services that we provide to our clients through our three divisions that offer solutions to whatever financial opportunities and challenges our clients encounter. We take pride in being able to serve in multiple capacities and offer comprehensive services to our clients.
California Focus: UFI is the largest California-based Municipal Advisory firm. We are staffed with 21 professionals in two California office locations: Tustin (12) and Walnut Creek (9).
Capital Market Resources: UFI employs the same resources as large national municipal advisory and municipal underwriting firms, such as Bloomberg, TM3, and DBC. However, what sets us apart from our competition is the experience and perspective of our staff.
Executive Government Experience - We are staffed with finance professionals with executive government experience, and corporate/investment banking experience. This experience affords us the ability to provide both detailed, quantitative analysis and practical, viable recommendations.
Extensive Prior Experience with the City
Over the past 31 years, Urban Futures has provided the City of Manteca with Municipal Advisor services on 16 bond issues, most recently for the Successor Agency’s Tax Allocation Refunding Bonds issued in February of 2020. UFI also provided Redevelopment Planning services to the (former) Manteca Redevelopment Agency, including preparation of redevelopment plans, economic development consulting, and financial advisory services for redevelopment bond financings. UFI has also provided Municipal Advisor services to the City for enterprise fund financings, including the Water and Sewer Revenue bond financings issued in 2012.
Working with the City’s redevelopment Successor Agency in 2020, UFI served as Municipal Advisor on a refunding bond issue which refunded (refinanced) and consolidated five prior redevelopment bond issues into one refunding issue at much lower interest rates, which will save the affected taxing entities (including the City’s general fund) over $29 million in interest expenses over the remaining 20 year term.
3.2.4 Subcontractors
If the Proposer will be using subcontractors to perform some or all of the work, the name(s) and address(es) of these subcontractors must be included, along with a description of which portion of the work or service they will perform. Said information shall be provided on the Subcontractor List, attached hereto as Exhibit B. If a contractor's license is required to perform the work, the Proposer must include each subcontractor's state license number, and type. If the Proposer is part of a joint venture, one legal entity must be designated as the Primary Proposer. All other participants shall be listed as subcontractors.
UFI does not intend to use subcontractors for this engagement.
3.2.5 Relevant Experience
Provide a brief description of your company's past relevant experience as it relates to the requested work or services. Include a minimum of five (5) references. Each reference should include the name, address, ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
3 and phone number, along with a contact person and a description of the work performed. References should be listed in the Reference List, attached hereto as Exhibit C.
UFI is a Leading California Municipal Advisor
UFI’s Public Finance Division has the experience, technical competence, and qualifications to provide the Scope of
Services described in the City’s RFP. Since January 1, 2017, UFI has assisted California municipal clients in the
completion of 740 bond transactions. UFI has consistently been ranked as one of the top municipal advisory firms in the State of California in four out of the last five years, and remains the number one firm by total transactions in the state since 2017, as shown in the table to the right. The frequency with which our firm is in the market provides our advisors with unparalleled experience in assessing financing structures and determining the lowest cost of borrowing.
UFI has been fortunate to work with the City in multiple capacities, including as financial advisor and fiscal consultant on the Successor Agency’s 2020 TAB refunding. In addition, UFI advised the City on its 2009 and 2012 Sewer Bonds, as well as the City’s 2012 Water Bonds. Given our history and knowledge of these transactions, and our expertise in the utilities space, we believe we are best qualified to assist the City in exploring refundings of the outstanding water and sewer bonds, all of which become callable this year.
Since 2017, UFI has served as municipal advisor on over $400 million of water and sewer transactions in the State. Our experience has ranged from helping our well-established clients achieve rating upgrades by de-risking their debt portfolios to working with new issuers to build strong credits from the ground up, in order to gain credible market access for the first time. In addition, UFI has worked on various “Leveraged” refundings for water credits, in which refunding savings are applied to pay down pension liabilities.
#1 in Pension Obligation Bonds
UFI is currently the #1 ranked municipal advisory firm for pension obligation bonds. Since 2017, UFI has provided pension advisory services and modeling to more than 35 California agencies, which includes the issuance of 17 POBs totaling more than $1.9 billion in par value. As one of the State’s oldest and largest municipal advisory firms, UFI professionals have had an opportunity to work on some of the earliest California POB transactions, including the first ever POB issued in the early eighties for the City of Oakland. Over the years we have developed unrivaled technical expertise in pension/OPEB modeling and related analytical capabilities.
Year Ranking
No. of
Issues Par Size (MM)
Avg. Size
(MM)
2021 2 118 $4,001.30 $34
2020 1 162 $3,753.40 $23
2019 1 170 $3,415.80 $20
2018 1 145 $2,899.60 $20
2017 1 145 $2,628.20 $18
Total 1 740 $16,698.30 $23
*Excludes Private Placement transactions
Source: Thomson Reuters
Top Municipal Advisors for California Municipal Bonds
(2017 - 2021)*
Top Municipal Advisors for California POBs
(January 1, 2017 to Present)
Rank Firm
No. of
Issues
Par
($MM)
1 Urban Futures Inc 17 $1,900.3
2 NHA Advisors LLC 9 1,059.7
3 Wulff Hansen & Co 8 126.6
4 Fieldman Rolapp & Associates 7 801.7
5 Harrell & Co Advisors LLC 6 540.5
Source: Bloomberg
ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
4 #1 in Tax Allocation Bonds: UFI is ranked #1 by number of completed TABs, having advised on 32 TAB transactions since 2017. The following are some examples of how UFI has assisted its prior Redevelopment Agency and current Successor Agency clients cope with the ever-changing financial landscape, and the way that new redevelopment projects are being financed postdissolution:
x In 2012, UFI was the first firm to successfully close a tax allocation bond refunding post AB X 1 24 and AB 1484 for the City of Dinuba’s Successor Agency.
x In 2016, UFI assisted the City of Lake Elsinore with the feasibility study leading to the formation of one of the first Enhanced Infrastructure Financing Districts (EIFDs), an alternative tax-increment financing vehicle for redevelopment projects post-dissolution. x In 2017, UFI was the first firm to convince a bond insurer (BAM) to insure a post-dissolution enforceable obligation, new money tax allocation bond issue for the Garden Grove Successor Agency’s Great Wolf Hotel/Waterpark project.
Case Studies
Rowland Water District
Relevance: Water Utility Leveraged Refunding
In 2021, UFI served as the Financial Advisor to Rowland Water District (the District) on a taxable advance refunding of its prior bonds. The District had two bond issues outstanding:
$16.46 million in 2012 Water Revenue Bonds and $16.395 million in 2014 Water Revenues Bonds. The outstanding bonds had coupons ranging from 3.0% to 5.0%, which were callable in 2022 and 2024. Due to the changes in the tax-law the bonds could not be tax-exempt advance refunded. The bonds could be advance refunded with “taxable” bonds, however, which presented considerable savings under the historically low interest rate environment.
Rowland Water District had also been working with UFI to address its CalPERS pension liability. The District had a $5.9 million unfunded accrued liability (UAL) as of June 30, 2020, with payments scheduled to increase from $473,000 in FY21-22 and increasing each year until a peak in FY30-31 at $671,000. The scheduled annual increase in UAL payments over the next 14 years totals $1.9 million, which would have a significant impact on their future rate structure.
UFI suggested the implementation of a “Leveraged Refunding” to utilize the savings from the bond refunding to “prepay” a portion of the District’s UAL. A Leveraged Refunding structures a traditional bond refinancing with “up-front” savings (as opposed to savings in each year). The savings are then used to make an Additional Discretionary Payment (ADP) to CalPERS to pay off all or a portion of an agency’s UAL.
UFI was engaged by the District to address both issues, serving as its municipal and pension advisor on the financing.
UFI worked with the financing team expeditiously to lock in the historically low interest rates. Our team quarterbacked the RFP process to select an underwriter and bond/disclosure counsel firms that resulted in competitive fees for each transaction. The refunding bonds were sold in August 2021 and were met with strong investor demand despite volatile market conditions. The bonds were sold with a 2.32% true interest cost (TIC), resulting in $4.0 million in debt service savings over the first three years ($3.9 million in NPV savings, or 11.95% of refunded par).
Top Municipal Advisors for California TABs
(January 1, 2017 to Present)
Rank Firm
No. of
Issues
Par
($MM)
1 Urban Futures Inc 32 $990.0
2 Fieldman Rolapp & Associates 14 621.2
3 PFM Financial Advisors LLC 11 1,112.4
4 CM de Crinis & Co Inc 10 345.7
5 CSG Advisors Inc 9 854.2
Source: Bloomberg
ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
5 UFI developed a customized pension model for the District’s 22 amortization bases to generate a multiyear base selection strategy to maximize the impact of each annual payment. Moreover, the District also committed to making $35,000 in monthly Additional Discretionary Payments (ADPs) to further reduce the UAL over the next 3 years. After applying the $4.0 million in savings from the refunding combined with $1.26 million in ADPs, the District is projected to generate $8.45 million in UAL savings (leveraging its resources by 160%) and reduce its UAL down to $687,000. Moreover, CalPERS’ 21.3% return in FY21 and the lowering of the discount rate to 6.80% will generate a net credit to the UAL, which is expected to fully fund the District’s pension liability.
Diablo Water District 2019 Water Revenue Certificates of Participation Relevance: Water Utility Financing
In 2019 UFI served as municipal advisor on Diablo Water District’s 2019 Water Revenue Certificates of Participation. The COPs represented the District’s first sale of public debt since 2013. Proceeds were used to refinance outstanding COPs, restructure a bullet maturity on a privately placed loan, as well as fund a new corporation yard.
In 2018, S&P downgraded the District’s COPs rating to A from A+, citing a decline in all-in debt service coverage and reliance on one-time growth fees. UFI worked diligently to conduct an analysis of the District’s finances and develop an appropriate structure for the 2019 COPs. We led the rating agency process and prepared a presentation to S&P that emphasized the District’s improved debt service coverage, strong service area economy, strong liquidity and reserves, strong management and financial planning, including the District’s 10-year financial forecast model. Ultimately, we were able to secure an “A” rating from S&P, which affirmed the District’s current rating. S&P indicated that the District could be in line for an upgrade if debt service coverage is maintained at its current levels over the near term.
We advised on the structuring of the 2019 COPs to refinance a bullet maturity on a privately placed loan to amortize it over ten years. UFI worked with bond counsel to review the legal documents to restructure the loan and move it from a subordinate lien to a senior lien. We attended Board meetings to answer questions from Board Members, drafted staff reports, and helped the District draft a Debt Management Policy and Disclosure Policy. As a result of the sale, the District was able to achieve 16% savings on the refunding of its 2010 COP and lock in a true interest cost of 2.82% for a 30-year term. UFI is currently engaged by the District as municipal advisor for its 2022 COPs, scheduled to close in June 2022.
City of San Jose
Relevance: Phase 1 Pension Analysis
In 2021, UFI was selected via a competitive RFP process to serve as municipal advisor to the City of San Jose for Phase 1 of their two-phase plan to evaluate pension obligation funding strategies, including the potential issuance of POBs. UFI engaged in 2-hour weekly meetings with the City’s Director of Finance, Deputy Director for Debt and Treasury Management and his Debt Team, Assistant to the City Manager, Budget Director, Assistant Budget Director, and Senior Deputy City Attorney to work towards a 3-hour Study Session on pension obligation bonds with the City Council in April. The Study Session was well received by the Council, and we continue assisting the City in evaluating the issuance of Pension Obligation Bonds. In addition to meeting with the City Council, we have participated in meetings with each of the Retirement Boards as well as a Joint Meeting among the two Retirement Boards and the City Council.
ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
6 City of Arcadia 2020 Leveraged Refunding
Relevance: Leveraged Refunding/General Obligation Bond Refunding UFI advised the City of Arcadia on a refunding of two tax allocation bonds with outstanding principal amounts of $2.1 million and $10.9 million in 2020. The refunding generated upfront cash flow debt service savings of approximately $4.8 million, with the City expecting to receive approximately $498,000 in savings based on its residual share of RPTTF funds. The City anticipates executing a leveraged refunding structure, whereby it will apply the additional property tax revenues received from the refunding towards the City’s CalPERS Unfunded Accrued Liability (UAL), resulting in the elimination of $1.0 million in total UAL payments to CalPERS.
The concept of a Leveraged Refunding is to recycle the savings generated from a traditional bond financing. As a taxing entity receiving property tax revenues from the Former Redevelopment Agency’s Central Redevelopment Project Area, the City will receive a portion of the savings produced by the proposed refunding of the bonds. The City’s share of the cash flow savings will be transferred to CalPERS as a form of pre-payment of the City’s UAL (i.e., Additional Discretionary Payment or ADP). The monies are applied to the longest outstanding Amortization Base, which results in the greatest savings. The City could also retain such monies in a pension stabilization fund to help offset future cost increases in CalPERS contributions. The effectiveness of this strategy depends on the investment rate.
In addition to this, UFI served as municipal advisor on an $8.8 million Series 2021 refunding of two prior general obligation bond series. The refunding was structured as a private placement “Cinderella” bond, which was initially structured with a taxable interest rate that converts to a tax-exempt rate in 2022. This structure enabled this City to lock in historically low interest rates in advance of the prior bonds optional redemption dates, which resulted in total combined cash flow savings of $1.5 million.
City of Hercules 2020 Lease Revenue Refunding Bonds and Evaluation of Energy Efficiency Financing
Relevance: Private Placement of Lease Revenue Financing; Evaluation of Energy Efficiency Financing
In 2018, UFI was hired through a competitive process to serve as the general municipal advisor to the City of Hercules. Since then, we advised the City on a refunding of Assessment District Limited Obligation Improvement Bonds in 2019 and a refunding of Lease Revenue Bonds in 2020. In both cases, UFI worked with the underwriter/placement agent to evaluate a public offering versus a private placement. Ultimately, the City elected to issue bonds through a private placement since the City does not have current ratings and had not been in the market for a number of years. Additionally, the 2020 Lease Revenue Refunding Bonds were issued July 2020 in the midst of the COVID-19 pandemic. Despite the challenging market, both refundings generated significant savings for the City and its residents.
While we were working on the lease revenue bond refinancing, the City Council voted to move forward with an energy efficiency project with ENGIE Services U.S that would be financed through a privately placed lease transaction. We assisted the City with reviewing the Energy Services Contract, particularly the Guaranteed Savings Provision, reviewed the Term Sheet with the private placement bank, and evaluated multiple structuring scenarios.
ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
7 References
We encourage you to contact any of our recent clients listed in Exhibit C to discuss their experience and satisfaction with UFI. We believe these persons can best speak to the quality and effectiveness of our work for the types of services, analysis and work product identified in the City’s RFP.
3.2.6 Support Team
Identify the individual(s) who will form the support team for performing the work or services for this RFP. Include brief descriptions of each individual's experience and a description of the role he or she will take in performing the work or service.
We believe that the core professionals that UFI has assembled possess the proven capabilities necessary to provide the City with comprehensive financial advisory services for any of its financing assignments. UFI is assigning three Series 50-licensed municipal advisors – Doug Anderson, Director (Primary Contact); Julio Morales, Director (Pension and Quantitative Analysis Lead); and Branden Kfoury, Senior Associate (Transaction and Execution Support). Our team draws on years of experience in various areas of specialty, including credit analysis, pension forecasting, complex financing structures, and pricing execution. We have additional support staff and professionals with areas of expertise in continuing disclosure and financial forecasting who can serve as valuable resources as necessary. All UFI municipal advisors, including support staff, hold a Series 50 municipal advisor registration. We have provided below a summary of the team members assigned and their relevant experience and credentials. Detailed professional biographies are provided in Appendix A.
UFI Team
Doug Anderson, Director
Role: Project Lead and Primary Contact| Office: Tustin, CA Experience: Mr. Anderson joined UFI’s Public Finance Group in 1985. He specializes in enterprise and special district revenue financings and has provided financial advisory services on over $2 billion of tax-exempt and taxable bond issues. He has expertise in revenue analysis and the preparation of revenue reports to support bond financings, and also provides support to clients with regards to the various annual reports and special reports required on a post-bond issuance basis. His recent and current clients include the Cities of Upland, El Cajon, Calimesa, Imperial, Artesia, Monrovia and the Altadena Library District
Julio Morales, Director
Role: Pension and Quantitative Analysis Lead | Office: Tustin, CA Experience: Julio is the Quantitative Analysis Head for UFI’s pension advisory practice, focusing full-time on addressing pension and OPEB liabilities. Mr. Morales has developed a proprietary pension forecasting model, based on individual amortization bases. Mr. Morales has been both the lead FA and an integral member in three recent POB issuances that have recorded the lowest TIC of all POBs issued since 2017. His current and recent pension modeling, POB, and pension/OPEB advisory clients include the Cities of Santa Rosa, Culver City, San Fernando, Alameda, Covina, Santa Ana as well as the Goleta Sanitary District and Santa Cruz Metro. Mr. Morales has spoken at numerous CSMFO, CSDA, and ACWA conferences on pension-related issues.
ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
8 Branden Kfoury, Senior Associate
Role: Analytical, Transaction, and Execution Support | Office: Tustin, CA Experience: Branden Kfoury joined Urban Futures in June 2019. Previously, Mr. Kfoury was a Senior Associate at Fieldman, Rolapp & Associates where he worked from 2017 to 2019 supporting the firm’s City clients. Since joining UFI, Mr. Kfoury has provided analytical support on financings for the Cities of Orange, Hercules, Fullerton, Covina, Pico Rivera, Azusa and Lake Elsinore. He is intimately familiar with all aspects of quantitative analysis for bond financings, as well as the credit rating process and structuring rating presentations.
3.2.7 Timeframe for Completion
Provide a realistic approach to complete the work or services within the timeframe provided within this RFP.
A draft financing schedule is provided below, which displays the major milestones to be completed and responsible party for each. For purposes of laying out the schedule, we have assumed a public sale transaction. UFI is prepared to kick off a transaction in June in accordance with the timeline provided in the RFP. As shown below, a public sale financing can be typically completed in roughly three months.
Should the City wish to explore a private placement financing, the financing schedule can typically be accelerated.
3.2.8 Assistance from City
Provide a written summary of any information, access, or assistance you will expect or need from the City to complete the work or services within the given timeframe.
Meetings Expectations and Staff Involvement
Our expectation is for the City and all required personnel to be available for conference calls and to provide input on the financing schedule to ensure we are meeting the City’s goals. In addition, we believe Date Action Responsibility
Month 1
Council Meeting to approve financing team and proceeding with bond issuance City
Kick-Off Call/Meeting All
Draft Bond Documents and Prospectus Bond/Disclosure
Counsel
Month 2
Send Credit Package to Rating Agency Municipal Advisor
Revised Drafts of Documents and Rating Agency Credit
Meeting All
Submit Document Package for Council Approval City
Month 3
Premarket Prospectus to Investors Underwriter
Sell Bonds/Pricing Call (Lock In Interest Rates) Underwriter Close Bonds and Receive Proceeds All
ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
9 it is critical for the City to review and provide input on financing and legal documents, especially the official statement, to ensure it aligns with the City’s disclosure practices and properly discloses all risks to investors.
UFI has experience working on behalf of municipalities like the City, and we believe we can tailor our approach to fit the City’s needs. As described in our work plan below, UFI can prepare conference call agendas and coordinate conference calls, prepare the distribution list and agendas, review bond documents, and produce and manage the financing schedule, ensuring members of the financing team stay on track. Additionally, UFI will take the lead on drafting staff reports (if desired) and as well as any other tasks assigned by the City. We view our role as an extension of staff, and we can be available to the City as much as is required to complete a financing. It is our goal to limit the City’s involvement to only those critical areas described above and to complete each financing in a manner that achieves the City’s goals, results in the lowest cost of funds, and maximizes efficiency without putting any unnecessary burden on City staff time.
In addition, we have included a preliminary list of topics/questions that S&P would require for a utility financing in Appendix B.
3.2.9 Project Cost
Provide a detailed breakdown of the costs associated with the work or services to be performed as well as an overall, total, cost for the services or work to be performed. In addition, provide the proposed costs for any services or work that may be performed at the City's request, in addition to the work or services requested in this RFP, if applicable. Proposers are responsible for ensuring that all costs are included in this section. Failure to properly calculate costs or include additional costs will not be a basis for renegotiating the compensation of any resulting agreement. Proposals must include a 60-day price guarantee.
The schedule of our municipal advisory fees for bond financings, which are fixed and contingent upon closing, is provided below. Our fees are exclusive of out-of-pocket expenses such as travel, third party data fees, and internal compliance requirements. Out-of-pocket expenses will not exceed $2,500 on any transaction.
UFI is also available on a time and materials or hourly basis to provide services such as long-term financial forecasting, consulting on the management of pension and OPEB liabilities, Capital Improvement Program funding planning, post-issuance compliance, analyzing and interpreting legislation or complex Hourly Fee Schedule
Position Rate
CEO/President
Managing Director/Director
$350
$325
Senior Associate $250
Bond Transaction Type Municipal Advisory Fee
COPs/Lease Revenue Bonds, Utility Revenue,
Tax Allocation Bonds, TRANs, CFDs $42,500
Private Placements/Loans $30,000
Pension Obligation Bonds $50,000 - $70,0001
UFI Municipal Advisory Fee Schedule
(1) Dependent upon scope of bond issue.
ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
10 business plans/proposals for financial opportunities and impacts, etc. To the right are the hourly rates of proposed positions.
The fee proposal above shall remain firm for a period of 60 days. Additionally, given that working with the City is very important to our firm, we are open to negotiating our fees should the City find it necessary.
3.2.10 Proposed Scope of Work
Provide a summary of the work or services to be performed to be attached to the parties' agreement as a scope of work. The scope of work must be concise and address each and every requirement of the proposed work or services, as set forth in Section 2. Proposals submitted without a concise scope of work suitable to be attached to the parties' agreement as an exhibit will not be considered; copies of the proposal will not be accepted as a substitute for a scope of work.
Approach to Performing the Municipal Advisory Scope of Work Every financing undertaken by UFI begins with proper planning and financial due diligence and ends with ongoing monitoring and administration. As such, we believe that our normal project planning and implementation process incorporates the Scope of Service outlined in the City’s RFP. Most of the tasks can be handled via conference calls, but we are happy to hold in-person meetings as requested by the City. Additionally, we attend all required City Council and Committee meetings and are available to give presentations and to answer questions.
Activity 1: Preliminary Analysis/Recommendation
No financing is ever recommended without first conducting a complete assessment of the client’s needs and financial constraints. During this period, UFI staff performs the following tasks:
1. Schedule meetings or calls with staff to request all necessary data and discuss the needs and goals of the City
2. Evaluate alternative financing options and present results to the City
3. Analyze existing outstanding debt to determine parity test requirements, feasibility of refunding certain outstanding series of Bonds, and debt affordability
4. Perform a comprehensive credit analysis to determine the anticipated rating, preferred structure, and interest rate scale for the Bonds
5. Prepare a summary of cost of issuance
6. Independently structure the financing and present results to the City Activity 2: Assemble the Finance Team and Manage the Financing Process After an evaluation of financing options/alternatives, should it be determined that financing targets will be met through a bond issuance, UFI will begin work on the financing schedule and the implementation of the agreed upon financing strategy. The scope of work includes, but is not limited to, the following:
1) Assist in the selection of additional service providers: UFI is knowledgeable of, and has worked with, most major firms in the California public finance sector. Should the City wish to go out for RFP for services such as underwriter, bond counsel, disclosure counsel, or trustee, we are experienced with managing and assisting staff with the selection process for these services. 2) Develop the financing timetable: UFI will coordinate with staff to develop a schedule that is consistent with the City’s goals, staff availability, financing timing, and existing City Council meeting schedules.
3) Monitor the transaction process: A primary role as municipal advisor involves the close monitoring ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
11 of the financing to ensure successful completion. As such, UFI will coordinate all activities of the financing team and will assist in the preparation of information for and review of Official Statements, Legal Documents, Loan Term Sheets, cash flows, staff reports, and all other applicable documents or presentations to the Council or rating agency. 4) Provide support to the City relating to financing documents: We are experienced in the delivery of presentations to City Councils and drafting of applicable staff reports regarding adoption of the financing documents.
5) Compute Sizing and Structure of Debt Issue: Utilizing municipal market data and bond sizing applications, UFI will verify cash flows presented by underwriters. 6) Plan and Coordinate Presentations to Ratings Agencies, Bond Insurers, and Investors: UFI is well prepared to assist in the drafting and delivery of credit presentations to rating agencies. While many factors go into the investment decision-making process, the bond rating is often the single most important factor affecting the interest cost on bonds. These credit presentations are then easily adapted for discussions with bond insurers and investors. 7) Interest Rates and Timing: As a result of the ever-changing municipal market environment, UFI will constantly monitor market rates to ensure that financial alternatives as well as refinancing assumptions and recommendations are maximized through proper timing.
Activity 3: Independently Verify Pricing
Performance matters, and we care about the rates at which the City will ultimately be issuing bonds— they should be in line with the current market and other similar bond sales. To ensure the underwriter is performing in the best interest of the City, we will prepare comparables to discuss with the City, monitor proposed rates throughout the pre-pricing and pricing process, culminating with a post-sale book that is provided to summarize the basis for investors approving or not approving a credit, the allotment sizes, and the orders themselves. We view this as a crucial step toward maintaining a strong understanding of movements in investor preferences which pays dividends for subsequent bond sales.
Activity 4: Post-Issuance Compliance
Urban Futures has two staff members dedicated to managing the continuing disclosure and dissemination agent needs of our clients. We have over 20 years of experience providing continuing disclosure and dissemination agent services, and we currently serve over 200 public agency clients with the preparation of over 400 reports annually. We have extensive experience covering every type of credit, including General Obligation Bonds, Lease Revenue Bonds, Enterprise Fund Bonds, Tax Allocation Bonds, Community Facilities Districts, and Pension Obligation Bonds.
As a function of providing municipal advisory services, UFI reviews the Continuing Disclosure Agreements and Bond Indentures for every bond issuance at the very beginning of the financing process. This ability to work with the financing team to draft the Continuing Disclosure Agreement is key, as we ensure it is formed in a manner that strikes the balance between providing pertinent information to investors versus minimizing the administrative burden on City staff. It is also another way that we can provide nimble and cost-effective service to the City. In addition to our experience in drafting such documents, the firm has adopted a practice of reviewing each Continuing Disclosure Agreement on an annual basis. This practice ensures that each report is being prepared in accordance with the bond’s disclosure obligations.
We are well poised to assist the City with implementation of the provisions of SB 1029 and CDIAC’s related transparency regulations. We have developed a checklist of required reports and their due dates. For example, Annual Debt Transparency Reports are due by January 31 of each year, and CDIAC has developed an online form for issuers to submit the required data (i.e., debt authorized during the reporting period, ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
12 debt outstanding during the reporting period, list of purposes for which debt has been issued, and amounts expended for each purpose in the prior fiscal year). We can assist the City in the preparation and submission of required reports. Finally, we can assist the City with arbitrage rebate reporting required by the IRS.
Our Understanding of the City: Credit and Debt Profile
The City currently has the following long-term debt outstanding:
Market Update and Refunding Opportunities
Interest rates have been volatile in recent
months as a result of inflationary pressures
resulting from the COVID-19 pandemic and as
a result of international events, such as the
war in Ukraine. As shown in the chart to the
right, tax-exempt 10- and 30-year MMD
benchmark rates have increased
approximately 150 basis points since January
2022. The volatility and rate increases have
also been seen in the taxable markets, as
investors look to actions of the Federal
Reserve in response to inflation. Despite the
recent volatility, long-term interest rates
remain relatively favorable compared to historical averages. 30-Year MMD closed at 3.09% as of May 2, 2022, which is well-below the 20-year historical average of 3.75%.
The City has numerous refunding opportunities that produce savings under current market conditions, including the Series 2009 and 2012 Sewer Revenue Bonds, and Series 2012 Water Revenue Bonds, which are currently callable this year. UFI is highly qualified to serve the City on potential refunding issues of water and sewer revenue bonds as well as any contemplated pension-related work. Each time we serve as a municipal advisor on bond financings, we take a lead role in ensuring that the financing team works together to achieve the best possible credit rating and pricing in the most efficient timeframe. Now more than ever, we believe it is important for the City to engage with firms that are flexible, knowledgeable and can offer proper guidance through difficult markets.
Series Dated Date Outstanding
Par Final Coupon Tax Status Final Maturity
Call Date
Water Revenue
2012 12/20/2012 $24,715,000 5.00% Tax-Exempt 2033 7/1/2022 @ 100 Total $24,715,000
Sewer Revenue
2012 12/20/2012 $11,265,000 4.00% Tax-Exempt 2033 12/1/2022 @ 100 2009 6/2/2009 $19,000,000 5.75% Tax-Exempt 2036 Any IPD Total $19,000,000
Tax Allocation Bonds
2020A 2/28/2020 $25,040,000 4.00% Tax-Exempt 2042 4/1/2030 @ 100 2020B 2/28/2020 $66,715,000 3.21% Taxable 8/3/1905 4/1/2030 @ 100 Total $91,755,000
ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
13 2012 Water Revenue Bonds
For the refunding of the 2012 Water Bonds refunding, we assumed a public market tax-exempt refunding with a closing in July 2022. We assumed the refunding bonds would receive the same S&P rating as the existing 2012 Bonds (AA-). Further we assumed no reserve fund requirement and a release of prior funds on hand, which is possible for highly rated credits in today’s market. Based on current market rates, a refunding of the 2012 bonds would yield NPV savings of approximately
9.5% or $2.2 million, as shown in the table to the right. If selected as municipal advisor, we could kick-off this financing immediately to lock in the substantial savings in the current interest rate environment, which would net the City well-above the standard 3% threshold that is recommended for current refundings. 2009 and 2012 Sewer Revenue Bonds
The City’s 2009 Sewer Revenue Bonds are currently callable, and the 2012 Sewer Revenue Refunding Bonds are callable beginning in December 2022. Given that tax-exempt advance refinancings are no longer permitted, the City would need to close a refunding transaction of the 2012 Bonds less than 90 days prior to the 2012 Bonds’ call date (12/1/2022). For purposes of our analysis, we assumed a concurrent refunding of both series on a tax-exempt basis, with a bond closing in September 2022 (90 days in advance of call date). Similar to the Water Bonds analysis, We assumed the refunding bonds would receive the same S&P rating as the existing 2012 Bonds (AA). Further we assumed no reserve fund requirement, and a release of the prior reserve funds on hand. Based on current market rates, a refunding of the 2009 Bonds would yield NPV savings of 17.3%, or $4.8 million, and the 2012 Bonds would produce NPV savings of
1.67% or $188,000. Cumulatively the refundings would net approximately 11.5% or $3.5 million of NPV savings, as shown below.
Leveraged Refunding Opportunity
In order to maximize the potential refunding savings on refundings of the City’s water and sewer bonds, the City could structure a “Leveraged Refunding”, with upfront savings, in which the City’s saving can then be applied to pre-pay a portion of the City’s UAL. For example, a refunding of the 2012 Water Bonds with upfront savings is expected to generate $1.9 million of cash flow savings in the first two years and $1.5 million in Year 3 under current market conditions. A concurrent refunding of the 2009 and 2012 Sewer Bonds, structured for upfront savings, would generate total cash flow savings of over $2 million in the first year with additional savings totaling an additional $3.8 million through 2027. The City could in effect “leverage” these savings by making a payment to CalPERS to prepay a portion of the City’s UAL in Proportional
Savings
Dated Date 7/7/2022
Par $18,700,000
Refunded Par $23,160,000
Average Coupon of Refunded Bonds 5.00%
True Interest Cost 3.13%
Average Life 6.461
NPV Savings ($) $2,204,328
NPV Savings (%) 9.52%
Average Annual Savings $539,076
Total Savings $5,929,833
Refunding of 2012 Water Revenue Bonds
2009 Bonds 2012 Bonds Total
Dated Date 9/7/2022 9/7/2022 9/7/2022
Par $16,890,000 $8,990,000 $25,880,000
Refunded Par $19,000,000 $11,265,000 $30,265,000
Average Coupon of Refunded Bonds 5.66% 3.88% 5.27%
True Interest Cost 3.54% 3.12% 3.46%
Average Life 10.496 4.628 8.457
NPV Savings ($) $3,291,525 $188,022 $3,479,547
NPV Savings (%) 17.32% 1.67% 11.50%
Average Annual Savings $319,966 $208,817 $487,020
Total Savings $4,799,488 $2,505,805 $7,305,293
Refunding of 2009 and 2012 Sewer Revenue Bonds
ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
14 the form of an Additional Discretionary Payment (“ADP”). If selected as municipal advisor, UFI can employ its proprietary pension model to build amortization schedules for each of the City’s UAL bases and then run a variety of scenarios maximize savings to achieve the City’s desired objectives.
Private Placement Alternative
The City could choose to explore a private placement of the water and sewer refundings given the relatively short remaining average life the outstanding bonds. A private placement would offer the City a significant advantage of locking interest rates, which could be useful in today’s volatile rate environment.
As opposed to a public sale, whereby rates will fluctuate until pricing, many private placement banks are willing to lock interest rates, in some cases, up to 45-60 days in advance of funding. Additionally, a private placement can result in less staff time and lower overall costs of issuance. It is often our recommendation to dual track a financing and explore both public market and private placement structures. As municipal advisor, UFI would recommend assessing both public sale and private placement options should market volatility continue.
3.2.11 Acknowledgment of Addenda
Not applicable.
3.2.12 Evaluation of Proposed Agreement
Proposers must review the proposed agreement, which is attached to this RFP as Exhibit E, and acknowledge their willingness to enter into a final, negotiated agreement if awarded the bid. Proposers must list any exceptions to the terms of the proposed agreement in their proposals, acknowledge their ability to satisfy the insurance and any other requirements as set forth therein, and acknowledge their ability to abide by all other terms of the agreement. Failure to take exception to a term in the proposed contract will result in a waiver of the successful Proposer's right to negotiate that term. The City reserves the right to negotiate any term in the proposed agreement.
UFI has reviewed the proposed agreement and has no exceptions.
3.2.13 Conflict of Interest
Proposers shall certify in their proposals that no official or employee of the City, or any business entity in which an official or employee of the City has an interest, has been employed or retained to solicit or aid in the procuring the award of this RFP.
I, Doug Anderson, certify that no official or employee of the City or any business entity in which an official or employee of the City has an interest, has been employed or retained to solicit or aid in the procuring the award of this RFP.
3.2.14 Affidavit of Non-Collusion
Proposers shall include a completed Affidavit of Non-Collusion with their proposals on the form attached hereto as Exhibit D. Failure to include a completed Affidavit of Non-Collusion may result in the rejection of the proposal as non-responsive.
UFI’s signed Affidavit of Non-Collusion is attached in Appendix C.
ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
A-1
Appendix A: Professional Biographies – UFI Team Members Doug Anderson, Director
Mr. Anderson joined UFI’s Public Finance Group in 1985. He specializes in enterprise and special district revenue financings and has provided financial advisory services on over $2 billion of tax-exempt and taxable bond issues. He has expertise in revenue analysis and the preparation of revenue reports to support bond financings, and also provides support to clients with regards to the various annual reports and special reports required on a post-bond issuance basis.
During the past ten years, Mr. Anderson has also provided Municipal Advisor services on over a dozen Community Facilities District Special Tax Revenue Bonds, for various cities including Upland, Highland, Moorpark, Calimesa, and Imperial. Mr. Anderson has also assisted with the formation of new community facilities districts, for the cities of Calimesa, Moorpark, and Upland.
Mr. Anderson also works with many Redevelopment Successor Agencies in the State. He has been involved with redevelopment activities for over 30 years, including redevelopment project area formation, tax increment analysis and redevelopment bond financing, and helping agencies through the redevelopment dissolution process that commenced in 2012. Mr. Anderson prepares the Redevelopment Obligation Payment Schedules for several agencies, to obtain the annual funding necessary to repay outstanding debt obligations.
Mr. Anderson holds a Bachelor of Science degree in Business Administration (Finance emphasis) from San Diego State University.
Julio Morales, Director
Julio Morales heads UFI pension advisory practice, focusing full-time on addressing pension and OPEB liabilities. Mr. Morales has developed a proprietary pension forecasting model, based on individual CalPERS amortization bases. Mr. Morales has spoken at numerous CSMFO, CSDA, and ACWA conferences on pension-related issues.
His current pension modeling, POB, and pension/OPEB advisory clients include the Cities of Glendora, Culver City, San Fernando, Pomona, Simi Valley, Buena Park, Santa Ana, Orange, South San Francisco, Alameda, El Cajon, Coachella, Desert Hot Springs, Azusa, Monterey Park, Santa Rosa, and Arcadia. Mr. Morales provides pension advisory services to special districts, (as an endorsed affiliate of the CSDA), which includes Los Angeles County Sanitation District, South Orange County Wastewater Authority, Santa Fe Irrigation District, and Goleta Sanitary District.
Prior to joining UFI, Mr. Morales worked for the Department of the Treasury’s Office of Technical Assistance (OTA), providing financial advice to the Treasurer of Paraguay. Mr. Morales nearly 25 years of broad-based corporate and public finance experience, serving as a financial advisor at PFM and Fieldman Rolapp, an investment banker with Bank of America, derivative/ investment provider for Transamerica, and also served as the debt manager for the City of Oakland and Economic Development Coordinator for the Housing Authority of the City of Los Angeles (HACLA).
He specializes on the evaluation of complex financial transactions, including public-private partnerships (P3s), structured transactions, and municipal contract negotiations, as well as providing investment ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
A-2
advice. Mr. Morales helped form an electric municipal utility for the City of Moreno Valley and drafted a 90-page P3 report for the City of Los Angeles. Mr. Morales has worked on more than $2 billion in landsecured financings, including the City of Irvine (Central Business District) and City of Anaheim (Platinum Triangle).
Mr. Morales previously served as the City Manager for the City of Huntington Park; having also served at its Finance Director and Treasurer. Mr. Morales also served as the Finance Director and Treasurer for the City of El Monte. Mr. Morales helped both cities to implement a number of changes and improvements to eliminate significant structural deficits.
Mr. Morales earned his undergraduate degree from the University of Michigan, a Master of Public Policy (MPP) from the Harvard Kennedy School of Government, and an MBA from UCLA as a Dean’s Fellowship Recipient.
Branden Kfoury, Senior Associate
Branden Kfoury joined Urban Futures in June 2019. Previously, Mr. Kfoury was a Senior Associate at Fieldman, Rolapp & Associates where he worked from 2017 to 2019 supporting the firm’s City clients. He has provided financing and execution support for general fund, enterprise revenue, general obligation, special tax, and tax allocation bond issuances. Prior to Fieldman, he managed revenue reporting and analysis for the brand advertising group at the website Houzz. From 2010 to 2013, Mr.
Kfoury was an associate in the public finance group at BMO Capital Markets in New York. He began his career in the municipal securities industry as a credit analyst at National Public Finance Guarantee Corporation.
Mr. Kfoury received his Bachelor of Science degree in Finance with a minor in Politics from the New York University Stern School of Business.
ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
B-1
Appendix B – Items Typically Required By S&P for Utility Financings x Service area economy and customer base
o Customer base diversity and stability
o Income levels and employment base characteristics
o Growth projections
x Utility rates
o Updated rate schedule
o Average usage/bill
x Operations
o Asset adequacy (supply capacity, etc.)
o Regulatory issues
o Drought management and planning, community outreach, and succession planning o Rate setting District and practices
x Finances
o Historical debt service coverage
o Financial projections
o Historical liquidity and expectations
o Other system obligations, including minimum payments related to water or wastewater, and/or transfers to other funds
x CIP
o Needs projections
o Funding sources
o Pension and OPEB liabilities
x Management Policies
o Budget assumptions and ongoing monitoring
o Long-term financial and capital planning
o Investment and liquidity policies
o Debt management
o Financial transparency
ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
C-1
Appendix C – Required Forms
ATTACHMENT 4
City of Manteca
Proposal for Municipal Advisory Services May 5, 2022
Regulatory Disclosure
Disclosure of Conflicts of Interest and Legal or Disciplinary Events. Pursuant to Municipal Securities Rulemaking Board (“MSRB”) Rule G-42, on Duties of Non-Solicitor Municipal Advisors, Municipal Advisors are required to make certain written disclosures to clients and potential clients which include, amongst other things, Conflicts of Interest and any Legal or Disciplinary events of Urban Futures, Inc. (“UFI”) and its associated persons.
Conflicts of Interest. Compensation. UFI represents that in connection with the issuance of municipal securities, UFI may receive compensation from an Issuer or Obligated Person for services rendered, which compensation is contingent upon the successful closing of a transaction and/or is based on the size of a transaction. Consistent with the requirements of MSRB Rule G-42, UFI hereby discloses that such contingent and/or transactional compensation may present a potential conflict of interest regarding UFI’s ability to provide unbiased advice to enter into such transaction. This conflict of interest will not impair UFI’s ability to render unbiased and competent advice or to fulfill its fiduciary duty to the Issuer.
It should be noted that other forms of compensation (i.e., hourly or fixed fee based) may also present a potential conflict of interest regarding UFI’s ability to provide advice regarding a municipal security transaction. These other potential conflicts of interest will not impair UFI’s ability to render unbiased and competent advice or to fulfill its fiduciary duty to the Issuer.
Other Municipal Advisor Relationships. UFI serves a wide variety of other clients that may from time to time have interests that could have a direct or indirect impact on the interests of another UFI client. These other clients may, from time to time and depending on the specific circumstances, have competing interests. In acting in the interests of its various clients, UFI could potentially face a conflict of interest arising from these competing client interests. UFI fulfills its regulatory duty and mitigates such conflicts through dealing honestly and with the utmost good faith with its clients.
If UFI becomes aware of any additional potential or actual conflict of interest after this disclosure, UFI will disclose the detailed information in writing to the issuer or obligated person in a timely manner.
Legal or Disciplinary Events. UFI does not have any legal events or disciplinary history on UFI’s Form MA and Form MA-I, which includes information about any criminal actions, regulatory actions, investigations, terminations, judgments, liens, civil judicial actions, customer complaints, arbitrations and civil litigation.
The Issuer may electronically access UFI’s most recent Form MA and each most recent Form MA-I filed with the Commission at the following website: www.sec.gov/edgar/searchedgar/companysearch.html.
There have been no material changes to a legal or disciplinary event disclosure on any Form MA or Form MA-I filed with the SEC. If any material legal or regulatory action is brought against UFI, UFI will provide complete disclosure to the Issuer in detail allowing the Issuer to evaluate UFI, its management and personnel
ATTACHMENT 4
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City of Ceres
2220 Magnolia St., Ceres, CA 95307
Leticia Dias Finance Director
[email protected] (209) 538-5764
$47,500 UFI served
as Municipal Advisor on the Ceres Financing Authority's Water System Revenue Bonds, Series 2020.
UFI also provides annual continuing disclosure reporting services on all City/Agency bond issues. "
City of Sanger
1700 7th Street, Sanger, CA 93657
Tim Chapa City Manager
[email protected] (559) 876-6300
(various) UFI has
served as Municipal Advisor on six (6) different bond issues for the City over the past 2 years, including Pension Obligation Bonds, Water and Wastewater Bonds, and Lease Revenue Bonds.
City of HIghland
27215 Base Line, Highland, CA 92346
Chuck Dantuono Director of Administrative Svcs.
[email protected] (909) 864-6861 x.224
ATTACHMENT 4
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$37,500 UFI served
as Municipal Advisor on the City's 2021 CFD No. 2001-1 Special Tax Refunding Bonds (a private placement transaction). UFI also provides continuing disclosure reporting services to the City.
City of Upland
460 N. Euclid Avenue, Upland, CA 91786
Londa Bock-Helms, CPA Finance Officer
[email protected] (909) 931-4172
$30,000 UFI served
as Municipal Advisor on the City's 2021 Water Revenue Refunding Bonds (a private placement transaction). UFI is also currently working on CFD special tax refunding bonds for the City.
City of Calimesa
908 Park Avenue, Calimesa, CA 92320
Bonnie Johnson City Manager
[email protected] (909) 759-9801
$42,000 UFI served
as Municipal Advisor for the 2020 CFD No. 2018-1 Special Tax Bonds, and has served as Municipal Advisor on several past CFD bond issues for the City. UFI also provides disclosure services to City.
ATTACHMENT 4
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ATTACHMENT 4