City Council Agenda Report
February 6, 2024
TO: Honorable City Council
FROM: Jesus M. Gomez, City Manager
BY: Jana Stuard, Director of Finance/City Treasurer
SUBJECT: RESOLUTION NO. 24-08 – APPROVING THE ENGAGEMENT OF
FINANCING TEAM COMPRISED OF A MUNICIPAL FINANCIAL ADVISOR
AND A BOND COUNSEL FOR THE PROPOSED ISSUANCE OF
FINANCING OF THE ENERGY SUSTAINABILITY PROJECT AND THE
SELECTION OF AN UNDERWRITER/PLACEMENT AGENT FOR THE SALE OF SUCH BONDS; AND TAKING CERTAIN RELATED ACTIONS
Background:
The City’s most recently adopted Strategic Plan outlines the City’s commitment to sustainability and climate resistance. To do so, the City worked with Syserco Energy Solutions (“SES”), a qualified energy services company, to develop an analysis of opportunities for the City to upgrade its facilities to achieve energy efficiency and cost savings measures for the City.
Necessary energy conservation measures identified included:
•Installation of solar panel arrays at several facilities •Installation of energy efficient “cool” roofs at the City’s Transportation Center/Public Services facility buildings
•Installation of building management system thermostats at several facilities •Retrofitting ballfield lighting at two City parks
•Installation of ballfield lighting at several parks
•Replacement of heating, ventilation and air conditioning control (HVAC) units older than 18 years
•Refurbishment of HVAC units to provide protective polyurethane coating •Replacement of transformers at City Hall to a high efficiency unit •Building exterior upgrades to add/replace door sweeps and sealing doors On November 7, 2023, City Council adopted Resolution No. 23-68 authorizing the City Manager to finalize negotiations with SES and acquire the necessary conservation equipment to implement the energy conservation measures through the Sustainability, Energy Efficiency and
City Council February 6, 2024
Resolution No. 24-08 – Engaging Finance Team Page No. 2 7 7
9 Infrastructure Improvement Project (“Project”). The City Council also authorized the City Manager to secure necessary financing for the project.
A total estimated cost of the Project is $18,200,000. The City will fund $6,200,000 from its capital reserves and special revenue funds. The remaining $12,000,000 of estimated costs for the solar photovoltaic systems portion of the project will require financing through either private placement or public offering of bonds.
In order to successfully secure the necessary financing for the Project, the City requires the assembly of a financing team which is comprised of a Municipal Financial Advisor, Legal Counsel, Underwriters and City staff.
To obtain the necessary team, the City released two Request for Proposals (“RFP”): RFP No. 24-755 Municipal Financial Advisory Services, and RFP No. 24-756 Underwriter Services.
Municipal Financial Advisory Services:
The role of the Municipal Financial Advisor is to assist and advise the City with all aspects of Project financing and upfront financial planning.
The City received a total of six proposals for RFP No. 24-755 Municipal Financial Advisory from the following firms:
•Fieldman, Rolapp & Associates, Inc.
•Harrell & Company Advisors, LLC
•KNN Public Finance, LLC
•Kosmont Financial Services
•NHA Advisors, LLC
•Urban Futures, Inc.
An evaluation committee comprised of City staff evaluated the submittals. As part of the typical RFP process, the submitted proposals were evaluated based on criteria set forth in RFP 24-755.
Each firm’s proposal was provided a score based on the review and ranked accordingly as listed in Table 1 below:
Table 1 – Qualification Ranking Summary
Firm Name Qualification Ranking Overall Score
Harrell & Company Advisors, LLC 1 93
Urban Futures, Inc. 2 92
KNN Public Finance, LLC 3 91
NHA Advisors, LLC 4 87
Fieldman Rolapp & Associates 5 85
Kosmont Financial Services 6 81
Based on evaluation of proposals, staff recommends selecting Harrell & Company, who had successfully assisted the City in the past, and had proven to be a valuable partner to the City.
City Council February 6, 2024
Resolution No. 24-08 – Engaging Finance Team Page No. 3 7 7
9 Staff reviewed Harrell & Company’s fee proposal of not to exceed $40,000 or $25,000 for public or private financing respectively; and determined the fee was commensurate with the work being proposed.
Bond Counsel Services:
Provide legal counsel related to Project financing. In case of public placement, the Bond Counsel delivers closing opinions regarding the validity and, if applicable, the tax-exempt status, of the bonds at the time the bonds are issued; prepares resolutions authorizing the issuance of the bonds, and legal documents setting forth the terms of the bonds and other documents required for the closing of the bond transactions; and assists in the development of the financing structure to ensure compliance with applicable bond laws.
Norton Rose Fulbright, LLP, has served the City as Bond Counsel in the past financings and it is recommended to retain the firm for this Project.
Underwriter/Placement Agent Services:
The role of the underwriter if purchases bonds from Norwalk Community Facilities Financing Authority and resell them to investors; work with the rest of the bond team to provide assistance with respect to structuring, timing, terms and other similar matters concerning the issuance of bonds. In case of private placement, firm solicits banks to obtain the best possible rate to finance the City’s Project.
The City received a total of three proposals for RFP No. 24-756 Underwriter Services from the following firms:
•Ramirez & Co., Inc.
•Raymond James & Associates, Inc.
•Stifel
As part of the typical RFP process, the proposals were evaluated by City staff based on criteria set forth in RFP No. 24-756. Each firm’s proposal was provided a score based on the review and ranked accordingly as listed in Table 1 below:
Table 1 – Qualification Ranking Summary
Firm Name Qualification Ranking Overall Score
Raymond James & Associates, Inc. 1 95
Stifel 2 95
Ramirez & Co. Inc. 3 94
Even though all firms demonstrated high qualification to assist the City with financing of the Project and rated very closely with each other, staff recommends engaging Raymond James & Associates, Inc. as the underwriter/placement agent. Raymond James’ proposal demonstrated understanding of the City’s project, knowledge of the Inflation Reduction Act, and utilization of programs, which provide local governments with government subsidies, grants and tax credits, City Council February 6, 2024
Resolution No. 24-08 – Engaging Finance Team Page No. 4 7 7
9 The firm has relevant lease financing experience, broad distribution system in the municipal finance industry, and it maintains a vetted list of banks that have been active in the direct placement market. The proposed fees are competitive and further negotiable.
Fiscal Impact:
The bond team members’ compensation will be a part of issuance cost paid at the closing of each transaction and represents the cost of debt issuance.
Citizens Advised:
N/A
Strategic Plan 2023 Implementation:
Said improvements align with the City of Norwalk’s Strategic Plan Goals 2, 3 and 4; work in partnership with the community, re-invest in aging infrastructure; maintain the City’s financial resiliency, build great public destinations, and support sustainability and climate resilience throughout the community.
Recommended Action:
Staff recommends City Council:
a. adopt Resolution No. 24-08, A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NORWALK APPROVING THE ENGAGEMENT OF MUNICIPAL ADVISORS AND
BOND COUNSEL FOR THE PROPOSED ISSUANCE OF FINANCING OF THE ENERGY SUSTAINABILITY PROJECT; AND THE SELECTION OF AN UNDERWRITER FOR THE SALE OF SUCH BONDS; AND TAKING CERTAIN RELATED ACTIONS; and b. approve an agreement with Harrell & Company Advisors, LLC to provide the City with Municipal Financial advisory services; and
c. approve an agreement with Raymond James & Associates, Inc. to provide the City with Underwriter/Placement Agent services; and
d. approve an agreement with Norton Rose Fulbright, LLP to serve as Bond Counsel and Disclosure Counsel, and
e. authorize the City Manager to execute the agreements and any amendments, provided there is funding in the budget and it is within the City Manager’s signing authority, on behalf of the City, in forms approved by the City Attorney.
Attachments:
1. Resolution No. 24-08
2. SB 1439 Contribution Forms