| | | | | | | | CITY OF OAKLAND PARK, FLORIDA
CITY COMMISSION AGENDA ITEM REPORT
AGENDA ITEM NO. 5 | | MEETING DATE: 2/1/2023 |
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| | | | | | | | | PREPARED BY: | Andrew Thompson, CGFO
Chief Financial Officer | DEPARTMENT HEAD APPROVAL: | FINANCIAL SERVICES |
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| | | | | | | | | SUBJECT: Financial Advisory Services Contract Renewal, RFP #011618 |
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| | | | | | | | | 1. | BACKGROUND/HISTORY
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Statement of Issue: In March 2018, the City awarded a contract to Dunlap & Associates to provide financial advisory services. Municipal financial advisors are SEC-registered entities that provide advisory services on bond offerings, loans, and related activities. The initial contract term of five years is ending; three additional one-year renewals are available.
Recommended Action: The City Commission adopt a resolution approving the proposed amendment to the contract with Dunlap & Associates to utilize one of the three remaining one-year renewal options for the period March 13, 2023, through March 12, 2024.
Local governments engage municipal financial advisors to assist in the structuring and issuance of bonds and for financial transactions, such as bank loans and investments. A municipal financial advisor represents the issuer in the sale of bonds, and, unlike other professionals involved in a bond sale, has an explicit fiduciary duty to the issuer per the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
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| | | | | | | | | 2. | CURRENT ACTIVITY
| | | In 2018, the City issued a request for proposals (RFP #011618) to provide these services in advance of the potential bond offerings. Dunlap & Associates was selected as the most responsive proposer and a contract was approved in March of 2010. The firm worked closely with the City as part of the issuances of the 2020 and 2022 General Obligation Bond offerings, in addition to securing various loans and refinancing during the five-year initial term of the contract.
The contract allows for three one-year renewal options. The use of such a renewal is part of the attached amendment to the original contract. The amendment also includes additional legal language that was not required at the time of the RFP's award in 2018. Dunlap & Associates voluntarily reduced their annual retainer of $12,000 to $9,600 during COVID-19. This reduced pricing is made permanent by the firm as part of the amendment. |
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| | | | | | | | | 3. | FINANCIAL IMPACT
| | | As specified in the RFP, the cost of services are divided into two main categories: an annual retainer and a debt issue development and sales service fee based on the value of an issuance, with a minimum of $25,000 for bonds and $20,000 for bank loans and lines of credit. Exhibit C shows the specific pricing by issuance amounts.
At the RFP award, the retainer with Dunlap & Associates was $12,000 annually, which provides for various financial analyses requested by the City throughout the year, such as debt capacity studies, financial analyses, and consultation on various regulations. During the COVID-19 pandemic, the firm provided a 20% reduction on the retainer. This reduced pricing is made permanent by the firm as part of the amendment, creating a savings of $2,400 a year.
The debt issue development and sales service fee, which is based on the value of a debt issuance, is incurred only when a debt is issued during a fiscal year. As for the annual retainer portion at the discounted rate of $9,600, adequate funds are included in the FY 23 Operating Budget of the Financial Services Department and the proposed expenditure is as follows:
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| | | | | | | | | 4. | RECOMMENDATION
| | | The City Commission adopt a resolution approving the proposed amendment to the contract with Dunlap & Associates to utilize one of the three remaining one-year renewal options for the period March 13, 2023, through March 12, 2024. |
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