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, 2024 to June 30, 2026 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. Fees have been pre-negotiated as part of the original contract and are based on the type of bond transaction being processed.
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 through June 30, 2024 with two, optional one-year extensions based on performance through June 30, 2026.
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 resulting in today’s recommendation to extend the contract for two additional years.
In addition to assistance with bonds, the services of KNN Public Finance LLC is 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.
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.