HomeMy WebLinkAboutAgenda Report - May 19, 1999 E-12TL
CITY OF LODI COUNCILCOMMUNICATION
9��FOR�
AGENDA TITLE: Authorize the City Manager to utilize the financial management services of Publ
Financial Management, Inc.
MEETING DATE: May 19, 1999
SUBMITTED BY: Deputy City Manager
RECOMMENDED ACTION: That the City Council authorize the City Manager to utilize the
services of Public Financial Management, Inc. as the City's Financial
Advisor for new financings, refinancings long-term financial planning,
and on an "as need be" basis.
BACKGROUND INFORMATION: Over the course of the past 12 months, City staff members have
interviewed seven financial management consultants to serve as the City's potential Financial Advisor.
The City is now in the process of evaluating many projects which will likely entail various forms of financing
and, is therefore, in particular need of financial advice. Such projects include refinancing the electric utility
distribution system, construction of a downtown parking structure, renovation of the public safety building,
and the possibility of an indoor sports facility. In addition, the City periodically needs an unbiased third
party evaluation of financial opportunities for such projects as the TCE/PCE clean-up and ongoing
litigation.
Based upon Public Financial Management, Inc.'s (PFM) experience with cities and counties throughout
California, and in particular their experience with public power agencies, the City Manager recommends
that PFM be utilized as the City's Financial Advisor, for such matters as project financings, refinancing,
and long-range financial planning. Moreover, PFM does not trade, sell, or underwrite any municipal
securities and therefore does not co -mingle banking and financial advisory work (see attached Exhibit A
and Exhibit B).
FUNDING: Compensation to PFM will be based upon the type of engagements as requested by the City
of Lodi.
Respectfully Submitted,
Ja et S. Keeter
Deputy City Manager
APPROVED: �<XG %
H. Dixon Flynn -- City
City of Lodi
Proposal for Financial Advisory
Services
April 2, 1999
Public Financial Management, Inc.
505 Montgomery Street
Suite 800
San Francisco, CA 94111
Phone 415/982-5544
Fax 415/982-4513
PFM
�! Public Financial Management
Financial and Investment Adv sors
505 Montgomery Street 415 982.5544
Suite 800 415 982-4513 fax
San Francisco. CA 94111
April 2, 1999
Mr. H. Dixon Flynn
City Manager
City of Lodi
221 West Pine Street
Lodi,_ CA 95241
Fax: (209) 333-6807
Dear Mr. Flynn:
In accordance with a request from Janet Keeter, Public Financial Management, Inc. ("PFM") is very
pleased to submit this proposal to work with the City of Lodi (the "City) as a Financial Advisor. We have
also attached a copy of our general information book as an introduction to our firm. We would very
much like to work with the City in connection with the various projects that the City is currently
exploring, including the environmental clean-up strategy, the potential issuance of electric utility bonds
and possible refinancing opportunities, as well as any projects that the City might consider in the future.
We were sorry to miss you this week at the City and after your review of this proposal, we hope to have
the opportunity to meet with you to discuss further the City's financing needs and our qualifications to
serve as Financial Advisor. In anticipation of this meeting, we have provided below a summary of our
qualifications, our approach to working with the City and some initial thoughts on our proposed
compensation.
Qualifications
Independence and Integrity - Since its founding in 1975, PFM has dedicated itself to one primary
function: to assure that its governmental clients pursue the most appropriate financing strategy by
making informed decisions in regard to their financial alternatives and to see that they obtain the best
possible terms in their financing should they choose to proceed. PFM is not owned in part or in whole by
any bank and is therefore free of any bigger agenda which can cloud recommendations. PFM does not
trade, sell, or underwrite any municipal securities and intends to remain free of any potential conflicts of
interest that can arise when banking and financial advisory work are commingled. In today's market
where one municipal scandal seems to follow another, we believe that our true independence allows us to
provide advice with the highest level of objectivity and integrity and to avoid even the perception of a
conflict of interest.
Familiaritv with California City Financing - PFM has worked with a number of counties and cities
throughout California on a variety of different types of financings. We have worked on lease revenue
bonds, certificates of participation, electric utility bonds, water and sewer revenue bonds, tax and revenue
anticipation notes, equipment lease financings and tax allocation bonds for California cities. In utilizing
these financial strategies, we have worked on police, fire, concert, convention center, administration,
storage, health and human services, healthcare, parking, courthouse, water, wastewater, arena, stadium,
gaming and jail facilities. This expertise provides us with an important sensitivity. We understand
Mr. Dixon Flynn
Lodi City Manager
April 2, 1999
Page 2
California city finance and the capital and credit market's views in regard to California cities, including
perceptions as to cities located in the Central Valley. Our current California City clients include:
• City and City of San Francisco
• City of Folsom
• City of Modesto
• City of Roseville
• City of Lincoln
• City of Lathrop
• City of Redding
• City of Anaheim
• City of Beverly Hills
• City of Oakland
• City of San Diego
• City of Long Beach
• City of Poway
• City of Eureka
Experience with COPS and Electric Utility Revenue Bonds - The single greatest advantage that we can
bring to the City is experience. PFM's experience in lease and COP financing as well as public power is
second to none -- we are familiar with all of the various participants in the leasing market and electric
industry, including counsel, rating agencies, underwriters, and investors. We also work extensively for
California cities in the development and implementation of strategic plans for deregulation. Our
California public power clients include the City of Redding, City of Anaheim, the Turlock Irrigation
District and SCPPA, among others.
California Resources - From 1985 to 1998, the Securities Data Corporation ranked PFM the nation's
leading independent financial advisory firm. During 1998, PFM completed 442 financings with a par
value of over $19.5 billion. With 20 employees in our two California offices and 175 employees
nationwide, we are the largest financial advisory firm both nationally and within the State.
Approach and Scope of Services
In working with the City, our approach is to serve as an extension of staff and a resource to the City. The
best value-added service that we can provide is simply to help the City make an informed and
independent decision as to the merits and costs of any financial strategy. For example, we can tell you
what strategies other California communities are pursuing to better position themselves for the
deregulated electric industry. Or, we can independently verify the projected savings levels from a
refinancing. Or, we can tell you how California lease financings priced in today's market. In each case,
we can provide information, organization, and feedback as to what is important and what is not.
In working with the City on the environmental clean-up, our approach will be to focus on the proposal
currently being reviewed by the City. Specifically, we will work with the City to evaluate the proposed
pricing parameters and to outline certain factors and risks that the City might wish to consider as part of
the financing strategy. Our objective is to complete a memo to the City in the next two weeks.
In regard to the City's current electric financing, PFM's experience with California public power issuers
and the deregulated electric industry in California under AB 1890 will allow us to make a significant
contribution to the City's team. While it is our understanding that the City has spent a considerable
amount of time in planning and structuring the transaction and is entering the final phases of its
completion, PFM will be able to provide the City with value in the bond rating process, procurement of
municipal bond insurance, and the pricing of the City's bonds. PFM has worked with the Cities of
Anaheim, Roseville, Redding, and Riverside on transmission and distribution system financings over the
Mr. Dixon Flynn
Lodi City Manager
April 2, 1999
Page 3
past two years and is very familiar with the particular rating agency and investor concerns for this type of
financing. We are currently working with all of the rating agencies and bond insurers on two future
distribution system financings for Anaheim and Redding.
PFM also brings an understanding of the Northern California Power Agency ("NCPA") and the City's
electric system. Given our familiarity, PFM will not spend a lot of time and effort"coming up to speed"
on the City's transaction and how it fits into the utility system's debt structure; rather, the process should
be seamless. Further, PFM routinely works with Salomon Smith Barney, Orrick Herrington, and Brown
& Wood on public power financings across the state and enjoys a good working relationship with all of
the City's consultants.
In regard to evaluating any refinancing opportunities, we work with the City to independently quantify
the potential benefit and to develop and implement the most cost-effective strategy possible. The type of
services that we would generally provide for a refinancing — or a new money issue — would include the
following:
1. Work with the City to develop and evaluate refinancing opportunities, including the integration, as
appropriate, of alternative financing strategies, debt structures and current capital market conditions
2. Make recommendation as to the optimal financing strategy consistent with City objectives, including
the use of either a partial or full refinancing
3. Draft the proposed financing schedule
4. Develop and distribute RFPs for any required financing services
5. Review, provide a summary and assist with the evaluation of any proposals
6. Assist with the selection and negotiation of the financing services required
7. Assist with the coordination of financing team members
8. Analyze the costibenefit of using credit enhancement, including bond insurance
9. Assist in the procurement of any such credit enhancement
10. Work with the City to develop and implement credit strategy, including rating presentation
11. Review legal documents
12. Attend Council meetings and make presentations, as requested
13. Review suggested interest rates and prepare analysis of comparable issuers for comparison on sale
date
14. Work with the City to negotiate the preliminary and final interest rates
15. Review final bond documents
16. Assist in the pre-closing and closing of the transaction
In outlining these services, we would also point out that our fundamental approach is to develop long-
term relationships founded on trust and integrity. Our services will always be tailored to the needs of our
clients, Client service is the most important aspect of our firm culture. Our approach centers on being
accessible, bringing the highest level of technical skills available in the market and leveraging our
experience on similar transactions with our California city clients. It is this combination that we believe
sets PFM's approach apart.
Proposed Compensation
Without talking to the City further, it is clearly very difficult to outline specifically how we would
propose to be compensated. PFM will be pleased to work out terms that are most agreeable to the City,
Mr. Dixon Flynn
Lodi City Manager
April 2, 1999
Page 4
whether it is a fixed fee, hourly fees with a cap, or other payment terms. For working on the
environmental clean-up project, PFM proposes billing on an hourly rate with a cap of $7,500. Our
current hourly rates are as follows.
TITLE RATE/HOUR
Managing Director 5225
Senior Managing Consultant $195
Consultant 5165
For bond deals, we usually charge on a fixed fee basis, which is contingent upon the successful sale of the
bonds. Fees for these services can vary greatly depending on the complexity and services required but
generally range from $40,000 to $60,000. For the electric bonds, it is our understanding that the
transaction is fairly far along, and we would propose a fee of S25,000. Again, this fee could be modified
depending on the City's requirements.
In addition to the professional fees outlined above, we would expect to be reimbursed for all out-of-
pocket expenses on an actual cost basis (i.e., we do not charge a multiplier on expenses). Such expenses
include items such as travel, meals, postage, express mail delivery services, telephone, photocopying,
outside graphics fees, etc. We do not charge for normal secretarial support, word processing or
computer charges. Appropriate documentation and third party receipts will be provided with each
invoice.
In connection with your review of these estimated fees, we would also like to convey that we would very
much like the opportunity to work with the City. It is difficult to estimate the work requirements without
more detailed discussions with the City. If any part of this fee proposal proves to be inappropriate or
unacceptable to the City, we will gladly work with the City to negotiate a mutually acceptable set of fees
for our services.
Conclusion
Finally, let me state that in some sense our experience, qualifications and capabilities are meaningless
unto themselves because value added services cannot happen without commitment. We would encourage
you to call our existing clients and to ask them about the level of commitment and accessibility that we
bring to every engagement. We hope that the qualifications and commitment of our firm to serve the City
will convince you of the quality of service and depth of expertise that PFM offers. We look forward to
the opportunity to meet with you to discuss in greater detail our qualifications to serve as Financial
Advisor to the City. Thank you for your courtesy and consideration of Public Financial Management,
Inc. and should you have any questions, please do not hesitate to contact me at (415) 982-5544.
Sincerely,
PUBLIC FINANCI.% MANAGEMENT, INC.
R. Alexander
Managing Di:
Firm Qualifications
505 Montgomery Street
Suite 800
San Francisco, CA 94111
Phone: 415/982-5544
Fax: 415/982-4513
r PFNt
Table of Contents
Firm Profile
Experience
Services
II
III
UPFII
Our goal is to provide
the highest quality
advice to our clients so
they are able to raise,
invest and manage the
resources they need in
the most cost-effective
manner possible.
Firm Profile
M PFTNI
History of the Firm
Public Financial Management, Inc. ("PFM") was founded in 1975 on the
principle of providing sound independent financial advice to state and local
governments. Today PFM is the nation's leading municipal financial and
investment advisory firm with offices throughout the United States.
PFM has three primary business activities: (J) transaction management
related to debt issuance; (h) investment advice and portfolio management for
bond proceeds and working capital; and (iii) strategic consulting related to
operating and capital budgets. With this comprehensive orientation, PFM is
unique among financial advisors in that it is involved in all aspects of a
government's finances.
PFM does not trade or underwrite securities. PFM serves only one interest—
that of its clients. PFM is involved in the capital markets on a daily basis and
offers its clients professional resources which equal or surpass those of any
investment banking firm without the conflict of interest that underwriting firms
bring to the table. PFM's only business is providing financial, investment and
consulting advice to its clients.
Financial Advisor
As a financial advisor, PFM engages in capital planning, revenue forecasting
and evaluation, resource allocation, debt management policy, and debt
transaction management (including structuring, documentation, and
execution). PFM delivers a depth of experience and skill that helps clients
resolve the myriad of technical and financial issues that are routinely
confronted during the capital formation process. PFM's national reputation
and its consistent growth in business activity from $5 billion in debt
management transactions in 1986 to $19.5 billion in 1998 reflects our clients'
recognition of our capabilities and value.
Investment Manager
As an investment manager, PFM brings a comprehensive spectrum of
services to the business of money management. PFM manages both state -
oriented investment pools and individual client portfolios designed to earn
competitive yields while maximizing safety and liquidity. Services include:
timely and market driven portfolio management, portfolio design, state-of-the-
art accounting and arbitrage rebate calculation services. The value of this
service to clients is evident in the growth of assets under management from
$1 billion in 1986 to over $9 billion in 1998.
Strategic Consultant
As a strategic consultant, PFM brings its clients the most effective capital and
operating budget advice available. Techniques for performance
management, bench -marking, revenue enhancement, and privatization are
all areas in which PFM has a proven track record. Since 1993, PFM has
helped clients eliminate billions of dollars of projected budget deficits without
increasing taxes or reducing services.
Finn Profile 11
U
1
Personnel
Experience
PFM professionals have unparalleled experience and expertise in
government and the financial markets. Included among PFM professionals
are former Finance Directors, City Managers, County Administrators, Transit
Agency CFOs and School Business Managers. In addition to government
service, many of our professionals have worked as attorneys, bankers,
portfolio managers, controllers, city planners, systems managers, architects
and engineers.
Financial Expertise
PFM has a record of developing innovative financing techniques designed to
meet our clients' needs at the lowest possible cost of capital. Whether the
innovation is as simple as a call feature or as dramatic as a commodity swap
PFM has pioneered the use of these methods for our clients.
PFM's professionals possess the advanced financial skills needed to
structure complex transactions, analyze credit quality, negotiate aggressive
business terms and bond pricing levels, develop custom computer models
and conduct disclosure reviews. The two most important resources that we
devote to assisting our clients are the core group of professionals in the
project team and our technical resources.
Project Teams
PFM's team organization allows us to build each project team in a manner
that will best serve the individual client. This may mean bringing together
several members of the same advisory practice or it may entail organizing a
team from several different practices and offices. Our specialized project
teams ensure that our clients receive complete and thorough advice directly
from the PFM professionals most appropriate to meeting their particular
needs. This approach fosters creativity and innovation between PFM
professionals and clients. The end result is premium client service.
The Result
PFM's broad perspective on the financial issues of governments enables us
to offer a wide scope of solutions to our clients' problems. PFM's
understanding of public sector responsibilities and pressures provides us with
both a unique insight into and appreciation for the decision making
environment in which our clients operate. This enables us to complete our
engagements with perspective that sets us apart from firms whose efforts are
limited to merely providing investments or completing specific transactions.
Finn Profile12
PFI
Offices Nationwide
Atlanta, GA- 404 876-1919
Peter Kessenich, Managing Director
Austin, TX • 512 472-7194
Bill Newman, Managing Director
Boston, MA - 617 3306914
Stephanie Gibson, Managing Director
Cleveland, OH • 440 239-7070
Ted Ricci, Managing Director
Dallas, TX • 214 712-9208
Bill Newman, Managing Director
Des Moines, IA • 515 243-2600
Jeanne Vanda, Managing Director
Fort Myers, FL • 941939-3009
Lavon Wisher, Managing Director
Harrisburg, PA 717 232-2723
Barbara Fava, Managing Director
Michael Harris, Managing Director
Marty Margolis, Managing Director
David Sallack, Managing Director
Ken Schiebel, Managing Director
Michael Varano, Managing Director
Glen Williard, Managing Director
Houston, TX • 713 524-3128
Charles Taylor, Sr. Managing Consultant
Memphis, TN • 901682-8356
Marlin Mosby, Managing Director
Miami, FL • 305 448-6992
Angela Kukoda, Sr. Managing Consultant
New York, NY • 212 218-8350
Hilary Ring, Sr. Managing Consultant
Newport Beach, CA • 949 721-9422
Keith Curry, Managing Director
Orlando, FL • 407 648-2208
Steven Alexander, Sr. Managing Consultant
David Miller, Sr. Managing Consultant
Philadelphia, PA • 215 567-6100
F. John White, Managing Director
Barbara Bisgaier, Managing Director
Brett Matteo, Managing Director
John Miller, Managing Director
Napoleon Nelson, Managing Director
Nancy Winkler, Managing Director
Pittsburgh, PA • 412 561-2608
Scott Bossung, Sr. Managing Consultant
San Francisco, CA • 415 982-5544
Alex Burnett, Managing Director
Nancy Jones, Managing Director
Peter Miller, Managing Director
Seattle, WA •206325-8126
Miriam A. Roskin, Contract Consultant
Trenton, NJ -609 392-0462
Robbi Acampora, Sr. Managing Consultant
Washington, DC •202 872-8650
JoAnne Carter, Sr. Managing Consultant
Firm Profile 13
Organization
PFM is comprised of advisory groups targeted to both specific government
businesses and geographic regions which operate through the use of project
teams. This approach to problem solving facilitates close working
relationships among our many professionals. We provide service to our
clients by organizing the most efficient and knowledgeable team of PFM
professionals to serve each client's specific needs.
/ Strategic Municipal Consulting
Transportation
Sport Facilities & Convention Centers
Solid Waste
Public Power
Health Care & Higher Education
Water & Wastewater
School Districts
Money Management
Practices
Lease
Negotiation , . -
Financial Planning
Strategic Municipal
Consulting
Debt Issuance
Balance Sheet
Management Products
Investment Policies
Portfolio Management
Benchmarking
Arbitrage Rebate ,
Locations
Firm Profile 14
Miami
New York City
Newport Beaeh
Orlando
Philadelphia
Pittsburgh
Francisco
AtlantaSan
Seattle
A
Austin
Trenton
Boston
Washington DC
Cleveland
Des Moines
Dallas
Ft. Myers
Harrisburg
Houston
Memphis
Firm Profile 14
=PFNI
Record of Achievement
Since the firm was founded in 1975, PFM has been involved in financing
programs totaling in excess of $140 billion. During 1998, the firm was ranked
as the number one financial advisory firm, completing 442 transactions with a
total par value of $19.5 billion.
Although rankings provide a short -hand method of measuring success, true
value can be measured by the length of service and level of satisfaction we
provide our clients. At PFM, we view our decade-long association with many
clients as an affirmation of our ability to service their needs thoughtfully and
efficiently. Our commitment is to the development of long-term relationships
with our clients to ensure that their interests are satisfied and their goals are
achieved.
1998 All Long -Term Municipal New Issues
National Municipal Financial Advisory Ranking
Source: The Bond Buyer/Secumies Data Company
# transactions
PFM
dollars in millions
19,565.2
Public Resources
Advisory Group 17,700.7
First Southwest
Company
7.724.8
Goldman, Sachs & Co. 6,761.6
Evensen Dodge Inc.
6,371.0
Dain Rauscher
6,054.7
Incorporated
P.G. Corbin Inc.5,319.0
Company, c
O'Brien Partners, Inc. ® 4,751.2
Ponder & Company ® 3,777.6
Lamont Financial
Services Corp. ®3,041.2
Finn Profile 15
C PFNt
The growth in our practice has
resulted in our constant participation
in the capital markets. The firm has
been in the market an average of
five times a week for each of the
past three years. In addition, our
active management of client
portfolios valued at over $9 billion
places PFM in the government
securities market on a daily basis.
Over the last 10 years, PFM stands
apart from other independent
financial advisors by combining par
value and number of transactions.
Among the nationally known
financial advisory firms, only PFM
combines the experience gained in
completing large numbers of
transactions with the sophistication
and analytic capability required to
bring transactions of high par value
to market.
Total PFM Assets Under Management
1988-1998
dollars in millions
9,307
1984-98 Financial Advisory Experience
Volume/rransaction Matrix
National Municipal Financial Advisory Ranking
Source: The Bond BuyerlSecunt es Data Company
p transactions
3.600
3.400
3,200
3.000
2.600
2.600
2.400
2,200
2.000
1,600
1,600
1,400
1,200
1,000
600
600
400
200 t
0
10 20 30 40 50 60 70 80 90 100 110 120 130 140 150
volume in billions
Firm Profile 16
1998 PFM Transactions
National Municipal Financial Advisory Ranking
Source: The Bond Buyer/Securities Data Company
Public Water, Healthcare 25
Power.. Sewer,
33 Gas
Education
140
General Purpose
115
1998 PFM Volume in millions of dollars
National Municipal Financial Advisory Ranking
Source., The Bond BuyedSecurities Data Company
Healthcare
$2.118
Water,
Sewer.
Gas
$1,914
Pubic .
_
Power—
$2,318
ower$2,318' a
Education
$2.010
General
Purpose
$5.786
ransportation 22
Higher Education 22
Airport 6
Other 15
'ollution 13
Solid Waste 6
Higher Education $969
Airport $888
'Other $364
Pollution $352
Solid Waste $209
Combined Utility $245
Firm Profile 1 7
'do—
PFNI
Selected Clients
ALASKA
NEW HAMPSHIRE
Alaska Industrial Economic Development
Rockingham County
Authority
NEW JERSEY
ARIZONA
Over 50 School Districts
AZ Department of Transportation
Middlesex County
ARKANSAS
NJ Higher Education Assistance Authority
City of Little Rock
NJ Turnpike Authority
CALIFORNIA
NEW MEXICO
City and County of San Francisco
City of Albuquerque
East Bay Municipal Utility District
State of New Mexico
Santa Clara Public Power Authority
NEW YORK
COLORADO
City of New York
CO Water Res. & Pwr Dev. Auth.
New York Power Authority
E-470 Public Highway Authority
Westchester County
CONNECTICUT
NORTH CAROLINA
State of Connecticutt
Raleigh Durham Airport Authority
City of New Haven
Piedmont Triad Airport Authority
CT Resources Recovery Auth.
OHIO
DELAWARE
Greater Cleveland Regional Transit Authority
Delaware Health Facilities Authority
Cuyahoga County
DISTRICT OF COLUMBIA
Hamilton County
Government of Washington, D.G.
Ohio School Facilities Commission
Wash. Metro Area Transit Authority
OKLAHOMA
FLORIDA
Oklahoma Turnpike Authority
Orlando -Orange Cty Expswy. Auth.
OREGON
State of Florida
State of Oregon
GEORGIA
City of Portland
DeKalb County State of Georgia
PENNSYLVANIA
GA Department of Transportation
Over 200 Separate School Districts
HAWAII
Penn. Higher Educ. Assistance Agency
City and County of Honolulu
City of Philadelphia
ILLINOIS
PUERTO RICO
City of Chicago
Puerto Rico Highway Authority
INDIANA
RHODE ISLAND
City of Evansville
Clean Water Finance Agency
Evansville Park District
Rhode Island Health and Educational Building Corporation
IDAHO
SOUTH CAROLINA
City of Orofino
City of Columbia
Piedmont Municipal Power Agency
IOWA
South Carolina Department of Transportation
City of Cedar Falls
TENNESSEE
IA Association of Schools
City of Memphis
KANSAS
Metropolitan Government of Nashville/Davidson County
Kansas Department of Transportation
City of Knoxville
LOUISIANA
City of Chattanooga, Knox County
Audubon Paris Commission
State of Tennessee
City of New Orleans
TEXAS
New Orleans Aviation Board
City of Austin
New Orleans Sewerage and Water Board
Austin Independent School District
MAINE
Dallas Area Rapid Transit
Portland Water District
U.S. VIRGIN ISLANDS
MARYLAND
Govemment of the Virgin islands
Ma
Maryland Department of Transportation
ryl p spo
USVI Water and Power Authority
Maryland Stadium Authority
VERMONT
Maryland Transportation Authority
Burlington Electric Company
University System of Maryland
University of Vermont
MASSACHUSETTS
VIRGINIA
City of Boston
Chesapeake Bay Bridge & Tunnel District
MA Health and Educ. Facilities Auth.
City of Norfolk
MA Municipal Wholesale Elec. Corp.
City of Portsmouth
MICHIGAN
Virginia Arbitrage Investment Mgt. (AIM)
Michigan Department of Transportation
Virginia College Building Authority
Kent County
Virginia Public Building Authority
MINNESOTA
WASHINGTON
Minnesota Public Facilities Authority
Washington Department of Transportation
MISSISSIPPI
Washington Health Care Financing Authority
State of Mississippi
Washington Public Power Supply System
MISSOURI
WEST VIRGINIA
City of St. Louis
Energy America, Inc.
St. Louis Economic Development Corp.
WISCONSIN
NEVADA
Department of Natural Resources
Clark County
State of Wisconsin
Firm Profile 18
aAM
PFl1
The financial advisory
business is a business
of ideas. PFM's culture
is designed to explore
these ideas and push
them to the limits of
their effectiveness. It is
these ideas, rather
than our resume, that
set us apart from our
competition.
Experience
Ad—
PFM
Type of Issue
1998 PFM Transactions
Type of Sale
1998 PFM Transactions
Negotiated
44%
Private
4%
Overview of Experience
PFM provides our clients with the most thorough technical analysis and
advice possible. We are committed to maintaining an unmatched breadth
and depth of expertise in public finance to fully serve all levels of government.
We are an active practice, serving every type of municipal issuer including
states, territories, authorities, counties, municipalities, townships and school
districts.
In order to best serve our clients, we do not limit our focus to any single area
of public finance, but rather develop and maintain expertise in all phases of
the business. We also do not limit ourselves to advocating any one particular
method of sale but are well versed in each technique available to the market
at any given time. We approach our clients' needs with their interests at the
forefront, not with a single solution in mind.
PFM has developed extensive experience structuring and advising our clients
on new money,, refunding and remarketing debt transactions with equal
success. This has resulted in private placements, competitive and negotiated
bond sales. The breadth of our expertise runs the gamut of types of debt
issuances, whether it be revenue bonds, general obligation bonds, notes or
certificates of participation.
Competitive
52% As a firm, we seek to blend together our national experience with specialized
functional expertise, regional knowledge and local perspective. PFM has
developed individual practices dedicated to certain industries. Our clients are
able to draw upon any combination of these resources as needed. The
following pages contain summaries of PFM's specialized practices.
Type of Security
1998 PFM Transactions
General
Revenue Obligation
48% 4e%
cops
6%
Experience 110
S=
� PFM
General Municipal
PFM serves general municipal clients at all levels of government: state,
regional authority, county and municipal. Some have used PFM's full
complement of services; others have needed to draw upon only one aspect of
our services.
At PFM, we are responsive to the particular needs of our clients. We believe
our results are enhanced if our clients develop long-term plans which include
financial policies and the identification of alternative revenues. We view
capital planning as an essential component of an issuer's overall debt
issuance and financing program—whether they plan to issue once or several
times in the immediate future.
Financial planning involves reviewing the current situation of an issuer,
determining its capital needs and fiscal constraints, and then establishing
financial objectives and a comprehensive strategy to achieve them. We are
able to follow this up with in-depth debt management services which include
analyzing debt structure alternatives, determining the optimum method of
sale, coordinating the marketing of the bonds, developing rating agency
presentations, and assisting with the pricing of the bonds. This approach to
financial advisory work has led to the establishment of ongoing relationships
with our clients, many of whom have been with us for more than a decade.
Health Care and Higher Education
PFM's health care and higher education clients run the gamut from stand
alone issuers to quasi -public agencies and authorities. As financial advisor to
15 health care and higher education authorities coast to coast, PFM is
especially qualified to fulfill the wide range of services these clients demand.
PFM is experienced in every aspect of a transaction from the initial analysis
that marks the genesis of a project through negotiations as to the type,
structure, size and timing of the financing, to the selling of the bonds and
investment of bond proceeds. PFM is a "full service" financial advisor to
health care and higher education clients.
Additionally, PFM keeps informed and updated as to various changes in
health care reimbursement law and all other legislation regulating not-for-
profit institutions. This knowledge ensures that the solutions PFM offers are
responsive to each issuer's unique situation and long-range objectives.
PFM is distinctly qualified to serve the specific financing and regulatory
requirements of health care and higher education issuers. Since 1990, the
firm has advised on 329 health care and education related transactions, with
a total dollar value of over $13.7 billion. Nationally, PFM has been ranked
among the top three financial advisors on health care and higher education
issues in the past five years for number of transactions and dollar value of
transactions. PFM has extensive experience in negotiated and competitive
sales, private placements, equipment and capital leases and pooled
financings for health care and higher education related issuers. PFM has
advised clients at every level of credit quality from unrated to AAA and the
firm is familiar with every type of legal structure prevalent in the industry
today.
Experience 1 11
=PFNI
Public Power
PFM has considerable experience with municipal electric utilities and has
worked with a broad range of public power financings. As deregulation and
the advent of open wheeling change the economics of the industry,
communities' demands for available power facilities continue to grow.
Industry change makes it increasingly difficult for public entities to maintain
the required infrastructure while holding rates competitive and financial
positions healthy. PFM can help power providers to evaluate their current
position and then develop a strategy to protect or improve that position in the
future.
Development of new resources increasingly requires cooperation between
multiple parties, both private and public. PFM can work with an agency
throughout the negotiating process to ensure that the final legal and business
framework for any project is consistent with its own best interests.
As deregulation allows investor owned utilities to compete with municipally
owned utilities for end users, it opens the market for experienced public
agencies to compete with private entities. PFM can develop a strategy for a
municipal power provider that leverages the value of access to low cost tax
free financing to provide competitive development opportunities for new, off
site power generation.
Ultimately PFM is in the rate business. We use the full range of transaction
management services including refinancing, restructuring, rate stabilization,
and derivative products as tools to alter and rearrange the cost from
obligations associated with debt financings. Long term cost control requires
optimal use of both assets and debt resources as a hedge against market
variation. PFM can work with power providers to develop an appropriate
hedging strategy.
School Districts
PFM has a long history of servicing the needs of hundreds of school districts
throughout the United States, having advised on more the $7.0 billion of
permanent financing for school districts during the past decade. During this
period, in Pennsylvania alone, we have averaged more than 50 school district
bond transactions a year. We also have been involved in hundreds of
millions of dollars of tax and revenue anticipation note deals annually to assist
school districts with seasonal borrowing needs. Moreover, we have extensive
experience working on current, and advance refundings for school districts
throughout the nation. Our expertise allows us to work closely with State
Departments of Education, co-authoring refunding regulations.
In addition to advisory services related to financings, PFM provides
assistance to school districts in long-range planning and budgeting and
general business practices.
This broad range of experience is brought to bear on each district we advise
whether it is on a $70 million financing for Dade County School District in -
Florida, a $470,000 bond issue for Pinelands Regional School District in New
Jersey, or a financial recovery plan for Chester -Upland School District in
Pennsylvania.
Experience 112
A
a, PF l�1
Solid Waste
With the founding of our solid waste practice in 1981, PFM began a
commitment to serve the needs of clients facing the complex and expensive
task of managing municipal solid waste disposal. Since that time we have
advised on more than $3.5 billion of transactions. As the problems of
disposal have grown, public awareness and sensitivity to these problems
have also increased. Environmental regulations and the requirement for
formalized solid waste disposal planning have become more complex and
demanding. Communities are seeking integrated solutions to their disposal
problems, often relying on a significant level of recycling and composting as
major elements of an integrated waste disposal strategy.
PFM's solid waste practice and experience have grown and evolved with
recent trends. From an original emphasis on development of waste -to -
energy facilities, our practice now includes many recycling, composting,
landfill and transfer station projects. We have represented public entities'
interests on publicly and privately owned projects as well as negotiated
contracts on behalf of our clients with recycling firms, landfill operators and
resource recovery vendors.
Sports Facilities and Convention Centers
PFM is the nation's pre-eminent financial advisor for public assembly and
sports facilities. In that role, we create innovative financing structures which
revolutionize the financing of public-private sports facilities. As a result of our
wide variety of experience in sports facility and public assembly facility
finance, we can offer our unmatched financing expertise with a solid
understanding of local markets, regulations and political networks.
PFM serves in an essential consensus building role between private parties,
owners, tenants, vendors, developers and public sector leaders. PFM also
understands the way the relationships between parties must be structured to
provide the maximum amount of economic leverage for the project. PFM has
experience mitigating the type of risks involved in transactions of the size and
scale required for public assembly facilities in the most cost effective manner.
Our experience includes:
Arena, stadium and convention center financings;
• Financing of urban redevelopment projects/mixed use developments;
• Project revenue secured debt financings for sports facilities;
• Sports facility and convention center credit structuring; and
• Hotel financing facilities.
Experience 113
�1
Transportation
PFM's transportation practice encompasses four major areas — mass transit,
highways, public/private studies and airports. Our involvement in mass
transit has included both traditional financing and the merging of global
funding techniques such as tax benefit transfers, vendor financing, export
credits, and leveraged leasing, along with joint development and privatization.
With regard to highways and tollroads, PFM experience ranges from start-up
tollroads to DOT credits, from international crossings to State Infrastructure
Banks. For years, PFM has been at the forefront of advancing the use of
private funding and public/private partnerships to provide alternative sources
of capital for transportation projects in the face of limited resources. In
addition, PFM has a long history of assisting airport clients with traditional and
innovative financing structures.
PFM provides its transportation clients with seven basic services:
• The preparation of a financial plan;
• Guidance in fully utilizing available resources;
• Assistance in the process of securing funding
from additional sources;
• Providing financial innovation and expertise;
• Assisting in the implementation of a debt program;
• Seeking the lowest interest cost on your borrowing; and
• Assistance with the investment of bond proceeds and operating
revenues.
Water & Wastewater
PFM has extensive expertise in financial planning for all types of water (both
wholesale and retail) and wastewater (including flood control, irrigation,
stormwater, and reclamation) agencies. PFM serves some of the leading
water and wastewater utilities across the nation and also has a very
significant State Revolving Loan Fund practice.
PFM recognizes that environmental utilities face an increasingly constrained
regulatory and fiscal environment. Constraints on revenue, funding, and
financing sources are now combined with more costly and far-reaching
environmental requirements. PFM works with its environmental clients to
meet the challenges of this new environment with creative financial
management, capital planning and financing solutions.
PFM identifies practical financing alternatives and assists its clients to
structure the alternative that meets its financial and planning requirements.
PFM encourages innovative but appropriate solutions and is always sensitive
to the role of public officials in developing, implementing and documenting
financial plans and financing transactions.
PFM has also been a leader in the creation and implementation of Title VI
State Revolving Funds (SRF) and is now working with several states to
develop the new Drinking Water Revolving Funds (DWRF). Our SRF clients
have been on the leading edge of finding new ways to aggressively manage
their programs.
Experience, 14
�PFNI
fl.
Strategies
Matching of Assets and
Liabilities
Shopping Aggressively for
Securities
Trading the Yield Curve
Investment Advisory Services
PFM is the leading independent financial and investment advisory firm in the
United States serving public sector clients. PFM's Investment Advisory
Group has been directing the management of public -sector funds since 1980
and currently manages over $9.3 billion in assets. Investment management
is part of our comprehensive approach to advising public agencies on asset
and debt management and capital and strategic planning.
PFM manages separate accounts for about 200 public sector clients, and
provides investment management services for over 2,000 additional clients
through commingled state-wide investment programs. Separately managed
accounts range in size from about $1 million to more than $500 million. In
addition, we provide non -discretionary advice where we develop or review
investment policies, recommend investment strategies, perform cash flow
forecasting, and portfolio valuation. All of PFM's accounts are short- and
intermediate-term fixed income portfolios. The accounts under management
consist of, operating funds, capital reserves, insurance reserves, proceeds
from the sale of bonds, and other government funds with an investment
horizon of overnight to five years.
PFM's investment philosophy is one of active portfolio management within
the constraints imposed by our clients' objectives of preserving principal and
providing liquidity. The specific strategy PFM employs for each portfolio
depends on the type of funds being managed (operating fund, reserves, etc.),
current interest rates, permitted investments and liquidity requirements. Our
primary objective is to avoid credit risk and minimize market risk, since this is
the objective that is generally emphasized by our public sector clients. Hence
we make no use of complex derivatives, little use of corporate credits below
the AA rating, and limited use of mortgage-backed and asset-backed
securities.
Trading among U.S. Treasury Active portfolio management permits us to respond to changes in the
Obligations with Similar markets and changes in payment or draw schedules. This dynamic yet
Maturities disciplined approach means that investment return can be enhanced through
prudent trading and portfolio restructuring without subjecting a portfolio to
Trading among Sectors unnecessary risk. Active management calls for assets and liabilities to be
Continuously Monitoring monitored on a regular basis so that we can take full advantage of
Creditworthiness opportunities presented by the market.
Because we work exclusively with public funds, we are quite sensitive to the
risk -minimizing investment objectives of our public sector clients. Safety is
further enhanced because PFM never takes possession of our clients'
securities or cash. These assets remain in the custody of each client's
custodian bank. PFM also carefully monitors relevant legal restrictions that
have been or could be imposed on the funds we manage to insure that all
such requirements are met.
Experience 115
f ,
Local Government Investment Pools 41
PFM has been a pioneer in developing innovative state-wide pool programs
to provide local government officials with a safe and convenient means of
investing operating funds and bond proceeds on a cooperative basis. In
1981, we helped start the Pennsylvania Local Government Investment Trust
(PLGIT), the first "grass-roots" local government investment pool in the
country, and we have been its investment manager ever since. PLGIT is
governed by a board of local government officials who are elected annually by
participants, and has nearly 2,400 members and more than $3 billion in
assets in four separate investment programs. PFM has assisted state and
local government officials to organize similar programs in eight states, and we
currently manage investment pools and for six statewide pool programs.
We manage each of these pools in a manner that emphasizes safety and
liquidity, and also seeks to produce a high yield. We also provide
administration and accounting services that include portfolio and shareholder
accounting and sub -accounting, and an array of cash management services
like automatic sweeps, direct deposit of revenues, check -writing, automated
clearing house payments, and an innovative debit card/credit card program.
Some larger clients have found that by creating an internal pool they can
solve the accounting and investment management problems associated with
having a large number of relatively small funds or accounts. We manage a
number of these internal pools in a manner designed to provide enhanced
liquidity, portfolio diversification/safety, sub -accounting for multiple funds,
reduced custody/transaction costs, and improved portfolio returns.
Short -Term Performance
PFM manages each of the short-term state-wide commingled investment
pools in a manner that is consistent with the Securities and Exchange
Commission's rules for money market mutual funds, so we have significant
experience in investing short-term funds for maximum yield while maintaining
a very high degree of liquidity. For example, for the five-year period from
January 1992 through December 1996, the return on PFM -managed short-
term pools in Virginia was 4.67% compared to 4.34% on three-month
Treasury bills and 3.97% on the IBC/Donoghue Index (an average of the
yields on all major money market mutual funds). These PFM -managed funds
invest only in U.S. Treasuries, Federal agencies, collateralized repurchase
agreements, and top-rated bankers' acceptances and commercial paper, and
they maintain an average maturity of less than 90 days.
Experience ( 16
Arbitrage Compliance Services
The provisions of the Tax Reform Act of 1986 and arbitrage rebate
regulations have made effective bond proceeds investment management and
reporting a challenge for tax-exempt bond issuers. PFM's Investment
Advisory Group has developed programs for investing bond proceeds for tax-
exempt bond issuers which optimize interest earnings while meeting the tax
law's stringent reporting, arbitrage and rebate requirements.
These programs combine the convenience, accounting and cost -advantages
of a short-term pool and the fixed return of a custom-designed portfolio of
individual securities to maximize the earnings that a client may retain while
complying with all aspects of the rebate regulations. For a construction
account, for example, target duration is derived from the draw down
schedule, and funds may be invested in a laddered portfolio of securities and
in a pool. After the initial purchase of the portfolio, we monitor the draw down
schedule through direct contact with client project managers or engineers,
and continually update cash flow projections. This active approach allows us
to make appropriate adjustments to the portfolio so that assets and liabilities
are properly matched, and earnings are maximized to the extent permitted by
the arbitrage regulations.
The arbitrage regulations impose detailed and often confusing restrictions on
investing proceeds of tax-exempt bonds and monitoring results. For bond
proceeds subject to the arbitrage rebate requirements, PFM maintains all
required investment and disbursement records. We also solicit a minimum of
three bids for each security purchased or sold in order to establish that the
transaction occurred at a fair market value and thereby ensure compliance
with the tax law's provisions barring "prohibited payments" or yield burning.
Each of our state-wide investment pool programs has several components
specifically designed to help issuers invest bond proceeds in a manner that
complies with the arbitrage regulations. These include:
Arbitrage and Rebate Compliance
PFM assumes responsibility for all transactions, calculations, monitoring and
documentation necessary for compliance with Federal tax regulations and
laws relating to arbitrage and rebate.
Comfort
Bond Counsel plays an integral role in our programs by reviewing PFM's
methodology and assuring that the methodology employed by PFM conforms
with the requirements of federal tax law.
Liquidity
Investors may withdraw funds from the pool at any time to pay capital costs.
Individual portfolios are invested in highly liquid securities like Treasuries.and
Federal agencies that match expected draw -downs and may be sold if
necessary to meet unexpected draws.
Yield
Each program offers both a pooled and individual portfolios, and PFM
allocates assets between the two to produce the optimal yield without
assuming unnecessary risk.
Experience 117
M PFNI
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Innovations
As an independent financial advisory firm, PFM uses innovative ideas and
structures as tools to assist clients in realizing their objectives and solving
their problems, not as a means of doing deals. Innovation for its own sake
has little value and may be risky, but as part of carefully crafted plans that
reduce cost, increase revenue or maximize future flexibility, innovative
financing techniques can often add significant value and make the infeasible
achievable. We use innovations to create opportunities, as was the case for
a large public utility that had recently emerged from the stigma of default. In
this case, as part of a several billion dollar refinancing program, we
recommended that a portion of its bonds be structured with two-year par
calls, so that as the credit regained market acceptance and the interest rate
premium demanded by the market because of the earlier default dropped, the
issuer would be able to refinance its debt at lower interest rates. Through this
strategy, significant debt service savings were realized. For another client
that could not legally advance refund its bonds, we crafted an open market
tender program to restructure a portion of its outstanding debt, also realizing
significant debt service savings.
When developing financial plans, it is essential that the components of the
plan be reviewed from all relevant perspectives. As full service financial
advisors, we assist our clients with developing financial plans, completing
transactions and managing the investment of bond proceeds and related
arbitrage rebate compliance. We also provide broad-based consulting advice
about all aspects of financial operations. Before making recommendations
about how to structure particular transactions, we explain to clients the
advantages and disadvantages of all plausible approaches and ensure that
our clients understand the ramifications of the recommended structure. As
important as the transactions that we advocate are those ideas that we
recommend against because they entail undue risk, do not achieve the
client's objectives or are inferior to other alternatives.
We have developed and assisted clients to implement many innovative
financing techniques, in each case tailored to the objectives and constraints
of that particular entity. We completed the first competitive advance
refunding and variable rate bond issues. We have assisted clients with asset
sales and securitizations of tax liens, pension fund contributions and other
assets or revenue streams as a means of managing cash flow and increasing
net income. We have extensively analyzed and managed the competitive
and negotiated placement of many derivative securities, but only after
ensuring that all risks were understood and appropriately managed and that
contract terms were written to protect our clients' interests. We have
managed a host of synthetic advance refunding techniques to allow our
clients to guarantee debt service savings from outstanding high coupon
bonds that, under federal tax law, cannot be advance refunded. We have
integrated the management of assets and liabilities to minimize interest rate
risks, cash flow variances and other risks through techniques such as forward
rate agreements, interest rate swaps and commodity price swaps.
Experience 18
A_
PFI
PFM has become the
nation's leading
financial advisory firm
by providing clients
with extensive and
superior service.
Services
UPEN1
Services
PFM offers its clients a complete scope of services to meet all of their
financial needs. PFM develops innovative financing solutions for our clients'
problems and leads the public finance industry in the introduction of financing
techniques designed specifically to enhance a government or agency's
access to the capital markets. As a national firm, we are able to offer an
unrivaled breadth of experience and market expertise. As a result, we define
our services as they relate to the formation and management of capital
assets. Our scope of services is structured into three areas:
Scope of Services
Financial
Consulting
Policy Development
Debt Capacity
Capital Budget
Competitive Contracting
Benchmarking
Performance
Measurement
Targeted Budgeting
Securitization of
Delinquent Assets
Labor Strategies
Revenue Enhancement
Strategic Municipal
Consulting
Lease Negotiation
Financial Consulting
Debt Management
Investment
Management
Debt
Management
Financing Schedule
Debt Stricturing
Negotiated vs.
Competitive
Financing Team
Selection
Financing Alternatives
Financing Terns
Draft Documents
Marketing Plan
Rating Presentation
Bond Pricing
Closing
Refunding Verification
Services
Investment
Management
Fixed -Income Portfolio
Management
Cash Management
Bond Proceeds
Investment Management
Policy Development
Cash Flow Forecasting
Escrow
Structuring/Restructuring
Structured Investment
Products
Arbitrage Rebate
Compliance
Accounting/
Recordkeeping Services
Services 120
�I
Financial
Financial Consulting
Consulting
Develop Policy Regarding Financing and Debt
Policy Development
Provides formal written policy and procedures for measuring and
Debt capacity
making financial decisions
Capital Budget
Demonstrates sophisticated financial management
Competitive Contracting
Analyze Future Debt Capacity
• Determines ability to raise future debt capital
Benchmarking
s Identifies rating concerns and/or opportunities
Performance n
t
Measurement
Review Capital Budget
Targeted Budgeting
• Matches the sources of capital funding to infrastructure needs
Competitive Contracting
Securitization
Delinquent Assets
• Injecting competition into service provision
Labor Strategies
• Exploring privatization as an alternative for selected services
Benchmarking
Revenue Enhancement
• Analyzing best practices to establish performance goals for
Strategic Municipal
Consulting
government services
Performance Measurement
Lease Negotiation
• Determining appropriate methods of measuring service performance
• Defining departmental missions in light of available resources
Targeted Budgeting
• Setting periodic targets within fiscal years for corrective measures to
assure on budget performance
Securitization of Delinquent Assets
• Structure non-performing assets for sale including tax and utility liens,
vacant land and buildings
Labor Strategies
• Analyze existing contracts for cost savings
• Study work rule reforms
• Coordinate overall approach in multi -bargaining unit environment
Revenue Enhancement
• Improve level of revenue generated from existing sources without tax
increases
• Analyzing funds reimbursed from other governments
Identify Financing Alternatives
• Informs issuer of pros and cons of the universe of financing techniques
• Selects optimal financing strategy
Services, 21
FPFP NI
I U_
Debt
Debt Management Services
Management
Develop and Monitor Financing Schedule
Financing schedule
• Serves as a plan for timely completion of the financing
Debt structuring
Analyze Debt Structure Altematives
Negotiated vs.
s Designs a structure which maximizes market interest and future
Competitive
financing flexibility while being consistent with debt policy
Financing Team
Review Existing Debt Structure
Selection
• Documents current debt structure
Financing Alternatives
s Identifies strengths and weaknesses of structure so that future debt
Financing Terms
issues can be structured to maximize ability to finance future capital
Draft Documents
needs
Marketing Plan
• Identifies funding opportunities
Rating Presentation
Recommend a Negotiated or Competitive Sale
Bond Pricing
s Tailors debt issue to the most efficient way to market the debt and
Closing
maximize investor interest or minimize the interest cost
Refunding Verification
Assist the Issuer with the Selection of Working Group Members
Services
6 Selects a team that can most effectively bring an issue to market
Develop Terms of the Financing
• Ensures credit quality and presents terms which are attractive to
investors to create broad-based interest in the debt
• Maximizes issuer's future flexibility
Develop Financing Documents
s Assures issuer that all contractual and business terms are reviewed
from the issuer's perspective
Develop Marketing Plan
• Maximizes underwriter and investor interest in the securities
Develop Rating Presentation
• Obtains highest possible credit rating for debt issue
Formulates and implements long-term credit rating strategy
Assist With Pricing of Bonds
s Assures issuer of lowest interest rate for given market
• Provides written documentation of acceptability of pricing
Services 122
Investment
Management
Fixed -Income Portfolio
Management
Cash Management
Bond Proceeds
Investment Management
Policy Development
Cash Flow Forecasting
Escrow
Structuring/Restructuring
Structured Investment
Products
Arbitrage Rebate
Compliance
Accounting/
Reconikeeping Services
Investment Advisory Services
Fixed-income Portfolio Management
• Market driven investment strategies meeting client objectives
• Maximizes eamings while preserving principal
• Provides necessary liquidity
Cash Management
• Enhances investment performance
• Matches assets and liabilities
• Provides a high degree of liquidity
Bond Proceeds Investment Management
• Complies fully with arbitrage rebate regulations
• Develops strategies to maximize retainable earnings
• Complies with yield restriction requirements
• Provides complete accounting and recordkeeping
Policy Development
• Defines investment strategy
• Identifies allowable and appropriate investments
• Specifies risk parameters
Cash Flow Forecasting
• Forecasts seasonal fluctuations
• Identifies core portfolio balance
• Maximizes earnings within liquidity constraints
Escrow Structuring/Restructuring
• Identifies most efficient portfolio
• Eliminates yield burning risk
+ Complies with any yield restriction requirements
Structured Investment Products
• Identifies optimal investment strategy
• Hedges investment risk
• Optimizes investment cash flows
Arbitrage Rebate Compliance
+ Complies fully with arbitrage rebate regulations
+ Maintains all necessary investment records
+ Minimizes rebate liability to the extent possible
AccountinglRecordkeeping Services
• Provides detailed portfolio accounting reports
+ Tracks performance versus appropriate benchmarks
Services 123