To: Board of Supervisors
From: Monica Nino, County Administrator
Report Title: Independent Registered Municipal Advisor (IRMA) Contract - KNN Public Finance LLC
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE and AUTHORIZE the County Administrator, or designee, to execute a contract extension with KNN Public Finance LLC, for Independent Registered Municipal Financial Advisor services extending the termination date from June 30, 2026, to June 30, 2028, with no change to the payment limit of $350,000.
FISCAL IMPACT:
Up to $350,000. The cost of municipal advisory services for bond issuances is covered as a cost of issuing the bonds. The County essentially borrows the additional funds necessary to compensate all consultants assisting with a specific bond issuance - known as "cost of issuance" fees.
The contract also provides for advisory services outside of the bond issuance process, for services such as the County's Annual Debt Report and other projects that come up from time to time. Fees for general advisory services such as this are charged at a pre-negotiated, hourly rate and are generally paid from the County Administrator's budget within the General Fund.
BACKGROUND:
On May 28, 2021, the County issued a Request for Proposals (RFP) for Independent Registered Municipal Advisor (IRMA) services. After review by the Debt Affordability Advisory Committee (DAAC), KNN Public Finance LLC was recommended to the County Administrator for consideration of a contract award to provide municipal advisory services to the County.
On September 7, 2021, the Board of Supervisors approved an initial three-year contract with KNN Public Finance LLC for the period September 8, 2021, through June 30, 2024. Since that time, KNN Public Finance LLC has provided excellent services to the County. Subsequently, the Board of Supervisors authorized an extension through June 30, 2026, as KNN had been meeting performance expectations.
In addition to assistance with bonds, the services of KNN Public Finance LLC are needed on an occasional basis to prepare presentations to rating agencies and complete other ad hoc projects in support of County business. It is important to continue retaining a firm with these particular skills to ensure that the County is able to take advantage of potential refunding opportunities as they arise and stay updated on both market trends and other public finance related issues.
The firm has extensive experience working with California counties and has worked with several jurisdictions within Contra Costa County in the past. In addition, the firm’s experience with housing related financing was of particular interest to the County Administrator's Office due to the significant amount of federal and state funds available for housing development in the near term. At the time of the original contract award, there was also increased interest by cities statewide in using Enhanced Infrastructure Financing Districts (EIFDs) to fund regional infrastructure projects. Having a firm that has experience in housing and innovative financing mechanisms will be important maintain during this contract cycle.
Today’s action requests that the Board authorize an additional extension of two years through June 30, 2028. Over that period of time, it is not anticipated that the County will be issuing municipal securities and will be working through difficult financial impacts related to declines in federal and state funding. Retaining financial advisory services with a firm that is familiar with the County’s financial position will be critical to providing stability over that period of time.
CONSEQUENCE OF NEGATIVE ACTION:
The County would not have the necessary expertise of an Independent Registered Municipal Advisor for issuance of municipal securities or other special projects.