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Financial Advisory ProposalPublic Financial Management, Inc. Financial Advisory Proposal - To MONROE COUNTY, FLORIDA August 11, 1994 Public Financial Management, Inc. 5900 Enterprise Parkway Fort Myers, FL 33905 PFM 1 1 1 1 j it PUBLIC RNANCIAL MANAGE AENr, INC. Financial and Investment Advisors 5900 Enterprise Parkway Fort Myers, FL 33905 813-693-7117 (Fax) 813-693-6384 August 11, 1994 R. M. Cofer Director of Purchasing 5100 College Road, Public Service Building Cross Wing, Room #002 Stock Island Key West, FL 33040 Dear Mr. Cofer: Public Financial Management, Inc. ("PFM") is pleased to have this opportunity to present our qualifications to continue to serve as Financial Advisor to Monroe County, Florida (the "County"). We hope you will find that our previous service, the breadth of our experience working with Florida Counties on financing strategies and the depth of our financial planning expertise makes us the most qualified firm to continue to serve as the County's financial advisor. It has been a pleasure to serve you in the past. Monroe County has been one of PFM's most unique clients and we have provided service that has allowed the County the opportunity to make informed decisions. In adddition to County issues, we have also advised on the Housing Bonds, the Land Authority, the IDA, and represented the County in a proposed Tax Increment District. Also, we have appeared before the Legislature on the County's behalf, assisted in the passage of the One -Cent Infrastructure Sales Tax (after an initial defeat) and assisted in obtaining approval of your compliance with the Solid Waste Financial Responsibility Act. Most financial advisors define their services as they relate to specific issuances of debt. PFM, on the other hand, takes a different approach by defining its services as they relate to the formation and management of capital assets. PFM is an independent, non -underwriting financial advisory firm which ' has built its practice and reputation by providing capital planning, debt management, and investment management services to states, local governments and their agencies and authorities. ' PFM has established a strong presence in the State and currently serves as financial advisor to 39 Florida clients. PFM is proud of its Florida performance, and in 1993 we were ranked as Florida's leading financial advisor, successfully completing over $2.4 billion in Florida municipal financings. Since 1980, ' PFM has served as financial advisor on financing programs for Florida municipal issuers totaling over $10.2 billion. PFM maintains ten municipal finance professionals in our offices in Fort Myers and Orlando, and is Florida's only full service financial advisory firm. PFM has taken the opportunity to briefly review several documents provided by the County. The information obtained from the Annual Budget and Comprehensive Annual Financial Report was useful in Atlanta Fort Myers Harrisburg Memphis New York Orlando Philadelphia San Francisco state college An Affiliate of Marine Midland Bank, N.A. determiningthe challenges facie Monroe County. We have provided a section in our proposal (behind g g tY Tab VIII) identifying some of the key issues facing the County and the experience our firm has had addressing those issues for similar clients. There are just a few highlights that are explained in more detail in the proposal that, we hope, will convince the County that PFM is the firm that should be selected to assist the County by providing the most economical solutions to the issues they face. Qualifications and Experience: PFM is the only national, full -service independent financial advisory firm with offices in the State of Florida. To date, PFM has assisted our Florida ' clients in the issuance of more than $10.2 billion of tax-exempt securities. Understanding of the Issues Facing Florida Counties: Among the ten professionals that PFM has in Florida are two former County Administrators, and a former County Budget Director. The professionals on the Florida Staff work in this State exclusively. This allows them to provide a depth of understanding of issues facing Counties in Florida. 1 I d PFM's In -House Technical Expertise: PFM maintains sophisticated computer capabilities including a linked network throughout the nation. All of PFM's employees are trained in the Philadelphia office which maintains an extensive library of computer applications for capital planning, solid waste tipping fee analysis, special assessment calculation, debt structuring, cash flow analysis, debt management and many other modeling requirements. Accessibility and Availability to the County: PFM's Fort Myers office will take the lead in providing the County with the highest quality financial advice. Monroe County's engagement would be handled directly, on a daily basis, by PFM's most senior professionals. Effective Communication: At PFM we are proud of our ability to effectively communicate even the most complex financing alternatives. We believe that expertise in the financial advisory field is most often exemplified by the ability to conduct public meetings where every individual leaves with a complete understanding of the plan of finance. We encourage the County to contact PFM's clients to discuss our performance in this area. Innovative Solutions: The most innovative solution to any problem is that which provides the County with the most economic means of delivering a service to its citizens. PFM does not create "innovations" for the sake of innovativeness. We have been a leader the this industry by using our skill, knowledge and expertise to effectively solve our clients financing difficulties. This approach has created some of the most innovative ideas in the industry. We hope that this proposal will convince you of the quality of service and depth of expertise that PFM can continue to offer Monroe County. We feel our ability as well as our knowledge and experience gives us unique qualifications that are unmatched by our competitors. s C 11 I 11 0 H Thank you for your time and your consideration of Public Financial Management, Inc. i Sincerely, PUBLIC FINANCIAL MANAGEMENT, INC. waw & Lavon Wisher Managing Director PUBLIC FINANCIAL MANAGEMENT, INC. MONROE COUNTY, FLORIDA FINANCIAL ADVISORY PROPOSAL TABLE OF CONTENTS Transmittal Letter Tab Personnel Qualifications I Location & Availability II Relevant Experience III References IV Negotiated Contract & Fees V Scope of Services VI Special Services VII Issues Facing Monroe County. APPENDIX A: Bond Financing Record VIII Public Financial Management, Inc. Page 2 n PERSONNEL QUALIFICATIONS 1. Please indicate the staff who will work with the County and their qualifications. PFM understands the importance of the County's financing program and the magnitude of work involved and is prepared to assign a team of senior professionals to work with the County throughout the course of the engagement. Primary responsibility for the engagement will be assumed by the manager of PFM's Florida practice, Ms. Lavon Wisher, Managing Director, who will serve as both Engagement and Project Manager. In her role as Engagement Manager, Ms. Wisher will provide general oversight of the engagement and will be responsible for coordinating the Firm's resources to ensure the county of uninterrupted access to the highest level of service. Ms. Wisher is located in PFM's Fort Myers office. Ms. Wisher will also assume day-to-day responsibility for PFM's service to the County as Project Manager. Ms. Wisher will be directly responsible for the day-to-day management of the engagement and will serve as PFM's primary liaison with County staff and other members of the e County's project team. She will be directly responsible for coordinating PFM's efforts and will take primary responsibility for all services provided to the County. Ms. Wisher will work directly with the County staff and the rest of the project team to provide an unrivaled level of senior involvement with the County. Mr. Jerry Wright in PFM's Fort Myers office, Mr. Phil Brown, Mr. Rick Patterson and Mr. David Miller, from PFM's Orlando office, will all be available to provide senior support for each of their respective areas of expertise. Analytical support for the engagement will be provided by Ms. Patricia Garrett, Analyst in the Fort Myers office, Ms. Lydia Brown and Ms. Pamela Holton, Consultants in PFM's Orlando office. This engagement would be a major priority for PFM and as such, we are prepared to dedicate our most experience and qualified professionals. The success of PFM is primarily attributable to the outstanding qualifications and efforts of its personnel. We have the resources to begin immediately and the ability to complete our scope of services on time and within budget. The resumes of the professionals who would be assigned to this engagement begin on the following I page. 11 1 Public Financial Management, Inc. Page 3 I P 11 Ll 1 F 77 L LAVON P. WISHER Managing Director Ms. Wisher is a Managing Director of Public Financial Management, Inc. and is responsible for all General Municipal financings in Florida, managing both the Fort Myers and Orlando offices. Ms. Wisher joined Public Financial Management, Inc. in 1985 and established the firm's first Florida office in Fort Myers, Florida. Prior to joining PFM, Ms. Wisher spent 30 years with the Lee County Government serving as County Administrator for over 15 years. Her expertise and experience in financial management included financings for a new Regional Airport, a toll facility, a Criminal Justice Complex that included a jail, transportation improvements, water and wastewater facilities and other infrastructure improvements. She was directly responsible for the development and use of innovative financing techniques for Special Taxing Districts including MSTU and MSBU bonds. Since joining PFM, Ms. Wisher has managed financings for water and wastewater facilities, transportation improvements, convention centers and has worked on improving the structure of an existing local government bond pool. She has developed the firm's effort to provide financial planning to Florida clients in capital improvement programs and in the implementation of the Capital Improvement Element required of local governments by the State of Florida's new growth management law. She leads the firm's effort in Florida to develop financings that include assessments and impact fees. Ms. Wisher attended Lee College in Cleveland, Tennessee and has studied at the University of Chattanooga, the University of Florida and the University of South Florida. PHILLIP N. BROWN Senior Managing Consultant Phillip N. Brown is a Senior Managing Consultant in PFM's Orlando office and responsible for the day to day operations of the Orlando office. Prior to joining PFM, Mr. Brown served as the Deputy Executive Director of Administration and Treasurer for the Greater Orlando Aviation Authority. Mr. Brown was responsible for administrative functions such as Finance, Human Resources, Properties and Staff Services. His duties included negotiations and maintaining continuing business relationships with airport concessionaires, developers, commercial airlines, rental car companies, Fixed based operators (FBOs), Investment bankers and other professional consultants. As Treasurer, Mr. Brown oversaw $40 million in investments as well as bond issues and debt service. The Authority has an $187 million budget and more than 550 employees. Mr. Brown began his professional career with Orange County government where he served in a variety of financial and administrative positions during a thirteen year tenure. Mr. Brown had wide ranging responsibilities inchibing public employee labor negotiations, court -ordered jail construction, budget development and presentation, correctional facility management, construction and financing for a major convention facility, correctional facility financing, P Public Financial Management, Inc. Page 4 legislative lobbying and indigent health care. From 1989 to 1991, Mr. Brown served as County Administrator and oversaw the transition of Orange County from at large county commission districts to single member districts with a County Chairman elected at large. As County Administrator, Mr. Brown was responsible for a $1 billion budget and more than 5,000 employees. Mr. Brown received a baccalaureate degree in economics and a Masters of Business Administration with an emphasis in finance from the University of Tennessee. He is a certified public accountant. RICK W. PATTERSON Senior Managing Consultant Rick Patterson, Managing Consultant in PFM's Orlando office, joined Public Financial Management, Inc. in July 1987. Since joining the Firm, Mr. Patterson has served as financial advisor for municipal financings totaling over $750 million in principal amount. From July 1987 through January 1991, Mr. Patterson was a member of PFM's Project Finance Group in Philadelphia. As a member of the Project Finance Group, Mr. Patterson specialized in revenue bond financings for municipal solid waste and water and sewer projects, with a particular expertise in financings for landfills, recycling facilities and waste -to -energy projects. Mr. Patterson's solid waste clients in the State of Florida have included landfill and/or resource recovery projects for Marion County, Orange County, Lake County, Lee County, Polk County and Pinellas County. Additional solid waste clients with which Mr. Patterson has been involved include Prince William County, VA; King County (Seattle), WA; Oakland County, MI; Kent County, MI; York County, PA; Chester County, PA and Knoxville, TN. As a member of the Project Finance Group, Mr. Patterson was also involved with a broad range of municipal financings for PFM's water and wastewater and general municipal clients. These clients included the City of Pittsburgh, PA; the Pittsburgh Water and Sewer Authority, PA; the Atlantic County Improvement Authority, NJ; the Ocean County Utilities Authority, NJ; the Passaic Valley Sewerage Commission, NJ and Orange County, NY. In January 1991, Mr. Patterson joined the Firm's General Municipal East Group in Orlando, Florida. As one of the senior members of PFM's Florida practice, Mr. Patterson has been involved in all areas of Florida municipal finance. In addition to his solid waste financing experience, Mr. Patterson has had extensive experience with providing financial planning services to Florida clients. Mr. Patterson assisted Marion County in preparing the Capital Improvement Element of its Comprehensive Plan, including the development of detailed capital planning models for the County's Traffic and Solid Waste Elements. He also recently assisted Marion County with the development and implementation of a new assessment program to finance road improvements to the County's municipal service benefit units. s Public Financial Management, Inc. Page 5 Prior to joining PFM, Mr. Patterson served internships with the Real Estate Lending Division J g P of Sovran Bank, Memphis, Tennessee and with the Bureau of Business and Economic ' Research/Center for Manpower Studies at Memphis State University. Mr. Patterson received a Bachelor of Arts in Zoology with high honors from the University of Tennessee. He received a Master of Business Administration with a concentration in Business Finance and Investments from Memphis State University. DAVID C. AL7,LER Managing Consultant David Miller, a Managing Consultant at Public Financial Management, Inc., joined the Firm as a Financial Analyst in August 1988. Mr. Miller moved to the Firm's Florida Group and Orlando office in July 1990 and has since specialized in Florida municipal finance and transportation ' finance. Mr. Miller graduated with high honors from the University of Tennessee, Knoxville with a Bachelor of Science Degree in Finance from the College of Business Administration. C F P F U Major Florida clients for whom he serves as financial advisor are Orange County, the Greater Orlando Aviation Authority, and the Orlando -Orange County Expressway Authority. Currently, Mr. Miller is assisting Orange County to implement a multi -tiered plan of finance to cash defease and advance refund outstanding Tourist Development Tax Revenue Bonds as well as to issue new money bonds to fund expansion of the Orange County Convention Center. Mr. Miller recently assisted Orange County with a multi -purpose refunding and new money Sales Tax issue to fund the new County Courthouse Complex. During 1992 he was intricately involved in Orange County's refinancing and restructuring of outstanding Water & Wastewater Revenue Bonds, among other projects. Mr. Miller assisted the Aviation Authority in bringing six series of bond issues to market during 1992-93, encompassing tax-exempt, taxable, senior lien and junior lien debt, with a par value of almost $600,000,000. The issues refunded outstanding high coupon debt, funded continuing construction of airport facilities, and financed construction of a Hyatt Hotel inside the terminal. Mr. Miller assisted the Expressway Authority in bringing two series of bond issues to market during 1993, encompassing tax-exempt, senior lien and junior lien debt, with a par value of over $750,000,000. The issues advance refunded outstanding debt for debt service savings and restructuring which dramatically improved their cash flow and debt service coverage position. In addition, the refinancing allowed the Expressway Authority's bond resolutions to be completely rewritten. Past Florida clients for whom Mr. Miller has served as Financial Advisor include Alachua County, the School District of Volusia County, and Lee County. Mr. Miller assisted Alachua County with the financing of additional jail facilities through the issuance of Sales Tax Revenue Bonds. The plan of finance included an innovative refinancing structure of outstanding Sales Tax Revenue Bonds for debt service savings of 14.0% of the refunded principal. For the School District of Volusia County, Mr. Miller assisted in the issuance of Certificates of Participation to fund the construction of new school facilities, and he helped plan and implement two refundings of General Obligation School District debt which resulted in significant debt service savings. For Lee County Mr. Miller served as project manager for the refunding of outstanding Transportation Facilities Revenue Bonds originally issued to finance two existing toll bridge facilities. In C Public Financial Management, Inc. Page 6 P k n 0 U addition, Mr. Miller served as project manager for the issuance of new money revenue bonds for the design and land acquisition of a third toll bridge facility, the Midpoint Bridge. He also provided Lee County with capital and financial planning services related to the acquisition of a private utility by the County's water and sewer system. Other transportation clients include Osceola County, for whom Mr. Miller assisted with the implementation of a public/private financial plan involving the County and the Disney Development Corporation to construct a toll road linking the Florida Turnpike with Interstate 4 and the Disney resort area. The project, known as the Osceola Parkway, was one of the most innovative transportation financings to date and received considerable national attention. JERRY L. WRIGHT Managing Consultant Jerry Wright joined Public Financial Management, Inc. in April of 1993 in the firm's office in Austin, Texas. Mr. Wright has recently transferred to PFM's Fort Myers, Florida office. Prior to joining PFM, Mr. Wright was an Associate in the public finance division of Rauscher Pierce Refsnes, Inc. in Dallas. Mr. Wright has worked on the financing team for over fifty public entities. He has specialized in the design and implementation of creative technical and legal solutions to problems faced by municipal issuers. Mr. Wright was first in achieving a guarantee from the Permanent School Fund of Texas for non -voted school district debt. He has also completed several financings utilizing multi -purpose bond allocations, the latest of these was a $263 million refinancing for the City of Austin which generated over $18.5 million in present value savings. His experience includes working with junior college districts, university systems, public universities, school districts, cities, counties, state agencies, special districts, and non-profit corporations. Mr. Wright has assisted clients as both financial advisor, placement agent and underwriter during competitive and negotiated sales of tax-exempt and taxable securities, including general obligation bonds, revenue bonds, tax and revenue anticipation notes, tax-exempt lines of credit, and special assessment bonds. He has performed refinancing analyses using long dated interest rate swaps as well as a variety of other derivative products for governmental and non- governmental purpose bonds. Mr. Wright has performed escrow swaps, tax rate impact analysis, current and advance refunding analysis for debt service savings and restructuring, stage financing analysis for long term capital projects and assisted public entities with investment guidelines. He has also worked with clients to assist with the internal accounting and bookkeeping related to their debt and investments. Mr. Wright served on the financial advisory team assisting the City of Austin Aviation Department with the renovation of the Bergstrom Air Force Base into a commercial airport. He was a member of the Airport's Finance Committee whose tasks include the selection of underwriters and the formation of the Airport's Comprehensive Financial Plan. During graduate school, Mr. Wright worked in the Trust Division of the Texas State Treasury Department. He assisted in the design and initial marketing phases of the TexPool Local Public Financial Management, Inc. Page 7 I Government Investment Pool and was responsible for the daily accounting functions of investments and monies held by the Trust Division. Mr. Wright attended the University of Texas at Austin where he received a Bachelor of g ry , ' Business Administration degree in Finance and a Master of Business Administration with concentrations in Finance and Marketing. LYDIA BROWN Consultant Lydia Brown joined PFM's Orlando office in July 1992. Ms. Brown, originally from Orlando, has a strong sense of commitment to PFM's Orlando clients. She has served as financial advisor to Orange County for capital and financial planning services relating to various public service projects. Recently, Ms. Brown assisted in the issuance of $20 million of Orange County Capital and Improvement Refunding Revenue Bonds. Ms. Brown has also researched the possibilities of Orange County's role in supporting Community Development Districts. The Orlando -Orange County Expressway Authority and the Greater Orlando Aviation Authority are other Central Florida clients which Ms. Brown currently serves as financial advisor. Ms. Brown was extensively involved in the recent $100 million refunding by the Greater Orlando Aviation Authority. In addition, Ms. Brown has worked on projects for Orange County Research and Development Authority and Orlando Orange County Health Facilities Authority. Ms. Brown has also worked extensively on The State of Florida/Sallie Mae Loan Program, a tax-exempt funding program for independent colleges and universities. Barry University and Eckerd College have issued bonds via this Program. Ms. Brown's assistance to Eckerd College ' included an analysis as to the feasibility of a cash defeasance rather than a traditional refunding in order to avoid transferred proceeds penalties. L Prior to joining PFM, Ms. Brown served internships at The Peabody Orlando where she participated in a management training program and CQ Computer Communications Inc., where she served as a marketing/sales representative for communication software. Ms. Brown received her Bachelor of Finance from Florida State University. PAMELA HOLTON Consultant Pamela Holton joined PFM's Orlando office in June 1993. Since joining the firm, Ms. Holton has participated in a three month financial analyst training program in Philadelphia, PA. While there, she has conducted a study for the City of Nashville, Water and Sewer Revenue Bonds determining the economic feasibility of the purchase of surety bonds as opposed to a debt service reserve fund. Also, she has performed various marketing tasks for The State of Pennsylvania/Sallie Mae Loan Program (PennCap), a tax-exempt funding program for independent colleges and universities. Since joining PFM's Orlando office in September 1993, Ms. Holton has served as financial advisor for several Central Florida clients including Orange County, the Greater Orlando Aviation Authority and the Orlando Orange County Health Facilities Authority. She has worked on projects for the School District of Volusia County and Bay Colony Special Recreation District. Ms. Holton also worked on the School District of Broward County's U Public Financial Management, Inc. Page 8 11 $4.3 million Revenue Anticipation Notes, Series, 1994. Ms. Holton most recently assisted the School District of Seminole County in the issuance of its proposed Certificates of Participation, Series 1994. ' Prior to joining PFM, Ms. Holton gained experience in both the private and public sectors. Ms Holton's experience has helped her develop extensive verbal and quantitative skills. Her experience with government includes working for the Office of the Governor, the Supreme Court ' of Florida and running for the City Commission of Midway, Florida. Ms. Holton's experience in the private sector includes working for General Motors Corporation, Bull Worldwide, Central Telephone Company of Florida, and as a clerk in a law office. Ms. Holton received both her Bachelor of Science in Business Administration and Masters of Business Administration from Florida A&M University. PATRICIA GARRETT Financial Analyst CI F� I Patricia Garrett joined Public Financial Management in July 1993 as a Financial Analyst. Ms. Garrett has transferred to our Fort Myers office after having worked in our Philadelphia office for nine months. Ms. Garrett provides technical and analytical support to senior professionals on debt transactions including bond sizings, pricing analysis, presentations and proposals. Ms. Garrett has participated in a variety of projects including presentations and proposals for New Hampshire Municipal Bond Bank, The City of Philadelphia, Western Minnesota Power, Michigan Department of Transportation and The City of Greenville, SC. She has extensive solid waste modeling experience and has developed models for York County, Pennsylvania and Central Aroostook, Maine. Since transferring to Florida, Ms. Garrett has assisted on several utility acquisition clients including Englewood Water District, Florida. In addition, Ms. Garrett has assisted St. Johns County issue Sales Tax Revenue and Refunding Bonds, Series 1994. She has also assisted several municipalities in obtaining interim financing for capital improvement projects. Ms. Garrett graduated with honors from the University of Tennessee where she received a Bachelor of Science degree in Finance. s I IPublic Financial Management, Inc. Page 9 LOCATION & AVAILABILITY 2. Please discuss staff location and availability to provide the scope of services requested by the County. Public Financial Management, Inc. ("PFM") is a wholly -owned financial advisory subsidiary of Marine Midland Bank, N.A. (New York) with offices in Atlanta, Austin, Boston, Denver, Fort Myers, Harrisburg, Houston, Los Angeles, Memphis, Minneapolis, New York, Orlando, Philadelphia, Portland and San Francisco providing financial and investment advisory services to state and local governments. PFM has over 160 employees, including nearly 115 full-time public finance professionals operating out of these offices. Since its inception in 1975 as a regional debt management consulting fun, PFM has expanded to include client relationships across the nation and has participated in financings and other capital raising programs totaling more than $60 billion. Public Financial Management, Inc. Page 10 H iProfessionals LlS�L Atlanta, GA Austin, TX 2 3 Boston, MA 5 Denver, CO 3 Ft. Myers, FL 3 Harrisburg, PA 20 Houston, TX 1 Los Angeles, CA 5 Memphis, TN 4 Minneapolis, MN 1 Orlando, FL 7 Portland, OR 9 ' Philadelphia, PA 40 San Francisco, CA 14 The engagement will be assumed by PFM's Fort Myers office with senior professional and technical support from PFM's Orlando office. PFM maintains nine municipal finance professionals in our Florida office's and is the only full service, independent financial advisory firm in the state. Our locations in Florida allow us to better serve our clients and provide the highest quality financial services. PFM has developed a team of professionals enthusiastic about the opportunity to compete for this assignment who can begin working with the County immediately after the approval of the contract. PFM's professionals are committed to serving the needs of the municipalities and citizens in the State of Florida. As one of the nation's leading independent financial advisors, we believe we can offer the County unparalleled expertise and experience as well as immediate availability. n I , I 1 Public Financial Management, Inc. Page I i ' RELEVANT EXPERIENCE U 3. Please discuss your firm's work experience similar to that requested by the County. FLORIDA EXPERIENCE AND CAPABILITIES Given our commitment to Florida, PFM has established a strong presence in the State and is currently serving as financial advisor to 39 Florida clients, including several Florida counties. PFM is proud of its performance in 1993 when we completed 31 financings with a par value of over $2.4 billion in the State. Since 1980, PFM has served as financial advisor on financing programs for Florida municipal issuers totaling over $10.2 billion. This outstanding performance reflects PFM's continuing commitment to excellence in the State of Florida. ' While enjoying the experience and reputation of a national firm, PFM also offers the County the depth of understanding and commitment of a local, Florida firm. PFM maintains two offices in the State of Florida, one in Orlando and one in Fort Myers. All facets of PFM's engagement with the County would be handled out of our Fort Myers office. PFM has a strong commitment to serving the needs of Florida tax-exempt bond issuers and has been a presence in the Florida municipal market for nearly ten years. We at Public Financial Management, Inc. are extremely proud of our position as the number - one ranked financial advisory firm in the State of Florida. Yet, we feel that it is our unique blend ' of national presence and expertise, local understanding and commitment, and ability to offer completely independent, unbiased financial advice that truly sets us apart from our competitors. PFM offers its Florida clients a level of expertise and innovation that is unmatched in the State or the nation. Some of PFM's most innovative financings have been completed here in the State of Florida. ' Only PFM offers this expertise and knowledge without the conflict of interest that underwriting firms bring to the table. Financial advice is our only business; we are not distracted by more profitable underwriting opportunities. We do not think that being number ' one among financial advisors in the nation and in Florida is of any particular importance if it is not combined with a drive to be the best at what we do. Our standing as the top firm in the nation ' demonstrates the expertise, and technical sophistication which sets us apart from smaller local firms. And our primary focus on financial advisory work, free from the distraction and conflict of interest inherent in underwriting firms, distinguishes PFM from all of the investment banking ' firms. Indeed, it is the synergy of all of PFM's unique attributes which make us uniquely qualified to serve the County. I A list of the services PFM has provided some of our clients begins on the following page. s 1 Public Financial Management, Inc. Page 12 ICLIENT & DATE SERVICES PROVIDED I 7 11 L L� r Alachua County Jail BANS 3/90 - Present Fire Assessment BANS & Bonds Lease Revenue Certificates Road Refunding, Series 1983 Sales Tax Revenue Bonds, Series 1992 Sales Tax Refunding, Series 1984 Financing Alternatives for Correctional Facilities Financing Alternatives for Fire Services Master Plan Investigation of Financial Stability of Construction Managers Landfill Expansion Funding Analysis Alachua County Refunding G.O. Bonds, Series 1988 Library District Analysis of Milage Impact Nov. 1991/to date Clay County Assessment Bonds 6/89 - Present Certificates of Participation, Series 1990A Solid Waste Bonds Utility Acquisition (Negotiation of Purchase and Sale) Solid Waste Special Assessment Analysis Investment Management and Rebate Calculation Services for 1990A COP's Delray Beach, City of Water and Sewer Revenue Bonds 5/90 - Present Line of Credit, Series 1989 Decade of Excellence Bonds Water and Sewer Line of Credit Utility Tax Refunding General Obligation Refunding Tennis Center Line of Credit Beach Renourishment Line of Credit Greater Orlando Aviation Terminal Hotel Finance Planning Series 1992 Authority Series A B & C Bonds 1/89 - Present Subordinate Taxable Bonds Investment Series for 1992. Escrow Construction Fund and Capitilized Interest City of Gulf Breeze Pooled Loan (4 Series) Refunding Bonds, Series 1992D&E 5-year Capital Plan y , Underwriter Selection Hillsborough County West Coast Regional Authority 12/89 - Present Tampa Sports Authority Public Financial Management, Inc. Page 13 F r F d Special Assessments District Museum of Science and Industry Utility Debt Restructuring Environmentally Sensitive Land Acquisition Program Cypress Bridge Water Dev. Auth. Solid Waste Taxable Commercial Paper Lake Mary, City of Utility Service Tax Bonds 8/91 - Present Private Placement for Stormwater Assessments Analysis on Letter of Credit Replacement Lake County Private Placement of Equipment 8/90 - Present Variable -to -Fixed Rate Conversion of Resource Recovery Bonds DSRF Replacement Solid Waste System Disposal Fee/Assessment Analysis Utility Acquisition Study Analysis of Economic Impact of Terminating Solid Waste Vendor Contract Solid Waste System Interim Financing Deer Island Community Dev. Dist. Refunding of Sales Tax Bonds Resource Recovery Vendor Contract Negotiations Line of Credit for Interim Financing Marion County Solid Waste System Financings 3/88 - Present Capital Improvement Program Financings Environmentally Sensitive Lands Financing Comprehensive Plan Development 5-Year Capital Improvement Program Development Road Improvement Program Funding Analysis Solid Waste Disposal Fee Analysis General Credit/Debt Structure Analysis MSBU Road Improvement Assessment Financings Capital Improvement Revenue Bonds Refunding Investment Management & Rebate Calculation Mount Dora FMHA Refunding 5/88- Present Stormwater Management Funding Analysis Utility Acquisition Analysis Investment Management & Rebate Calculation Services Monroe County Jail Bonds 3/86 - Present Industrial Development Bonds Impact Analysis Financing Alternatives for Card Sound Bridge Financing Public Imp. Ref. Bond, Series 1983 Analysis of Arbitrage Rebate versus Penalty Public Financial Management, Inc. Page 14 j k New Port Richey 3/91 - Present North Port, City of Orange County 3/88 - Present Orange County Health Facilities Authority 9/87 - Present s Orange County Research & Development Assisted in Passage of 1 cent Infrastructure Financing Alternatives for Sales Tax Report on Impact of Purchasing Restrictions to Local Vendors 7 year Capital Plan Capital Plan for CIE Water and Sewer, Series 1991 Capital Improvement Bonds General Capital Improvement Financing Options Utility Acquisition Cash Flow Analysis of Existing GDU Water and Wastewater Utility Assistance with Voter referendum passage Convention Center Financing Courthouse Complex Financing Correctional Facilities Financing Economic Evaluation of Forensic Hospital Facility Solid Waste Financings Water and Wastewater Restructuring Series 1992 Certificates of Participation Tourist Development Tax Refunding Comprehensive Capital Planning Model Series 1990 TDT Bonds Rebate Series 1985 TDT Bonds Escrow Report on Underwriter Selection Proc. Capital Improvement Bonds Ref. Community Development District Commercial Paper Program Library District Debt Service Reserve Substitution Certificates of Participation, Series 1991 1985 Water & Wastewater Defeasance 1985 Tourist Development Tax Defeasance Baseball Stadium Analysis Convention Center Hotel Analysis Sales Tax Bond Anticipation Note, Series 1989 Sales Tax Bonds, Series 1989 Capital Improvement Bonds, Series 1988 Public Facilities Bonds Refunding, Series 1988 Presbyterian Retirement Communities Loan Refinancing 1992 Adventist/Sunbelt Bonds Tender Offer 1992 Adventist Master Trust Loan Program Underwriters Selection Letter of Credit Negotiations Public Financial Management, Inc. Page 15 4/89 - Present Capital Improvement Bonds, Series 1989 Ten Year Capital Improvement Model ' Negotiation of Option Agreement Report to Department of Transportation regarding Candidate Projects Series 1988 Bonds Investment Management Services Defeasance Analysis Orlando/Orange County Investment Management Services Expressway Defeasance Analysis 5/87 - Present Osceola County Osceola Parkway Toll Road Financing 5/87 - Present Ref. Analysis 1988 Trans. Bonds Assessment Program for Public/Private Road Defeasance of 1989 Assess. Bonds Analysis Acquisition-Orange/Osceola Utilities Dart Blvd. BANS Gas Tax Revenue Refunding Tourist Development Tax Analysis Pinellas County Health Investment Management Services Facilities Remarketing Agent Analysis 11/91 - Present Pinellas County Educational Barry University Loan Facilities Authority 5/92 - Present Polk County Investment Management & Rebate Calculation Services 11/91 - Present ' Sanibel, City of Utility Revenue Bonds, Series 1991 6/91 - Present Sewer Acquisition Sebring, City of Fin. Alternatives for a Consolidated Water and Sewer Utility Acquisition of a Water System from Sebring Utility ' Commission St. Johns County Solid Waste Financing 4/86 - Present Water and Sewer Refunding St. Augustine Shores Acquisition Solid Waste Flow of Funds Analysis s Water & Sewer/Solid Waste Debt Reserve Substitute Transportation Refunding Capital Planning for County Capital Improvement Element Solid Waste Disposal Fee/Assessment Analysis 1 Public Financial Management, Inc. Page 16 Volusia County School District 6/91 - Present 1 Public Financial Management, Inc. Debt Capacity Analysis of Water and Sewer System Investment Management & Rebate Calculation Services G.O. Refunding, Series 1994 Sales Tax Revenue & Refunding, Series 1994 Line of Credit/Commercial Paper Program Analysis Financing Team Selection Series 1985 Escrow Restructuring Certificates of Participation, Series 1991 Series 1986 General Obligation Refunding Bonds Investment Management Services Page 17 REFERENCES 4. Please list at least three references including names and addresses currently under contract. PFM's experience and expertise in servicing local governments in the State of Florida is unmatched. PFM has served every type of governmental entity in the State. Despite the vast bank of knowledge regarding different governmental types, PFM's primary focus in the state is small to medium sized County and City governments. PFM has maintained several outstanding, long-term relationships with County clients. We welcome officials of the County to speak with any of the references listed below. These represent just a small sample of current county contracts held by PFM. nt/Con Orange County Linda Tidwell Director of Human & Fiscal Resources Clay County John Keene Clerk to the Board Marion County Joseph Cone County Administrator Alachua County Robert Fernandez County Manager Lake County Peter Wahl County Manager St. Johns County Nicholas Meiszer County Administrator Osceola County Neil Bowen County Attorney Address Phone Number 201 S. Rosalind Ave. (407) 836-5442 Orlando, FL 32802 825 N. Orange Ave. (904) 284-6317 Green Cove Springs, FL 32043 601 S.E. 25th St. (904) 620-3340 Ocala, FL 32671 P.O. Box 2877 (904) 374-5204 Gainesville, FL 32602-2877 315 W. Main St. (904) 343-9888 Tavares, FL 32778-7800 4020 Lewis Speedway (904) 823-2333 St. Augustine, FL 32084 ' 17 South Vernon Ave (407) 847-1212 Kissimmee, FL 34741 Public Financial Management, Inc. Page 18 I NEGOTIATED CONTRACT I U F U 5. Please state how your firm would handle the account if awarded a negotiated contract with the County. As a leader in the national finance market and a major presence in the public finance arena, PFM offers our clients unrivaled expertise in municipal finance and capital planning. We believe PFM can continue to offer a unique combination of expertise, objectivity, creativity and commitment to the County. Our goal is to continue to work with the County to ensure that you receive your capital financing at the lowest available cost. PLANNING AND POLICY FEE For services related to planning and policy, PFM proposes a fee of $2,500 monthly. TRANSACTION SERVICES FEE For services outlined in this proposal related to bond issuance transactions, PFM proposes to charge a fee of $1.00 per $1,000 of debt issued with a minimum transaction fee of $20,000 per transaction. For a refunding PFM's fee will be an additional $2,500 and for a competitive issue, PFM's fee will be an additional $7,500 per transaction per service. SPECIAL SERVICES FEE For special services outlined in this proposal, PFM proposes the following hourly rates: Experience Level Hourly Rate Managing Director $175 Senior Managing Consultant $160 Managing Consultant $150 Consultant $130 Financial Analyst $110 Clerical/Administrative $0 If a multi -year contract is approved, PFM will continue to offer all of our services inclusive under the retainer portion of our eohtract. Public Financial Management, Inc. Page 19 EXPENSES ' In addition to the above PFM will be compensated for necessary, reasonable and documented out-of-pocket expenses incurred for travel, meals, lodging as in the amounts authorized by Section 112.061, Florida Statutes, telephone, mail and other ordinary cost and any actual extraordinary cost for graphics, printing, data processing and computer time which are ' incurred by PFM. Appropriate documentation will be provided. For escrow sizing services, PFM will be compensated for costs incurred in the structuring of the escrow. These expenses will be negotiated based on the size of the escrow. For services and expenses related to financial planning, PFM will invoice the County monthly. For services related to Debt Transaction the County will be invoiced upon completion of the transaction to be paid from the proceeds of the financing. PFM is eager to serve our clients. If any or all parts of this cost statement prove to be inappropriate or unacceptable to the County, we will gladly work to negotiate a mutually acceptable fee for PFM's services. H n H H s I 1 Public Financial Management, Inc. Page 20 SCOPE OF SERVICES Since our inception, PFM has offered its clients a scope of services that is unmatched by the competition. As a firm we pride ourselves on finding optimal solutions to solving our clients' problems. PFM develops innovative financing solutions and leads the public finance industry with the introduction of financing techniques designed specifically to enhance issuers' access to the capital markets. As a national firm, we are able to offer the broadest breadth of experience and market expertise. Most financial advisors define their services as they relate to specific issuances of debt. PFM, on the other hand, takes a different approach by defining its services as they relate to the formation and management of capital assets. As such, PFM's scope of services is divided into three components: e • Financial Planning • Debt Management H H Ci C� r s Public Financial Management, Inc. Page 21 0 In the Financial Planning stage of the engagement, we will review the County's current financial and market situations, including the existing debt structure, debt rating, revenues, and local legal constraints. After determining your capital needs and fiscal constraints, we will work with you to establish financial objectives and a comprehensive strategy to achieve them. After working to develop a long-term financial plan, we will assist in its implementation. The plan may require the issuance of debt. If so, this is where our Debt Management services become important, for even a well -conceived financial plan will be unsuccessful if it is not carried out at the lowest possible cost. Our Debt Management services ensure that the County will be able to access the capital markets in the most cost-effective manner. While PFM is proud to offer such a wide range of services, we also recognize that not all ' clients need all services. In keeping with out commitment to provide the highest quality of service to our clients, we are prepared to customize our scope of services to include only those services desired by the County. I Ell I J P s L� 1 Public Financial Management, Inc. Page 22 P I J 7 H I FINANCIAL PLANNING Development of Capital Plan and Financial Policies PFM views capital planning as an essential component of the County's overall debt issuance and financing program. Having an idea of future financing needs will enable the County to structure current debt offerings to ensure cost-effective financings in the future. Establishing policies regarding the capital plan provides formal written procedures for measuring and making financial decisions. In addition, rating agencies look favorably on debt issues that are part of a well -conceived, long-term plan as opposed to financings that are carried out in a fragmented, disorganized manner; establishing long-term policies and plans demonstrates sophisticated financial management. Ultimately, implementing financing and debt policies will enable the County to carry out capital expansion or debt restructuring plans more efficiently while preserving market access for future debt. PFM is driven not by financial transactions, but by financial planning. We believe our performance can be successful only if our clients have developed a long-term capital plan which includes financial policies and the identification of alternative revenues such as impact fees, concessions, assessments, grants, service fees, and other revenues. After assisting the County in developing a capital plan which is customized to meet its needs, PFM will ensure that each successive financing is executed in a manner consistent with the policies set forth in the long-term plan. Review Existing Debt Structure As your financial advisor, PFM will analyze the financial resources available to the County by considering the types of revenues available, their stability over time, and their forecasts for growth. The results will be compared to the existing debt structure to determine how much debt can be issued while still maintaining sufficient cash flow coverage to preserve the County's present credit rating. Finally, a review of the legal structure will provide the basis for the consideration of financing alternatives that are currently available. Review Capital Budget In order to determine the optimal method of issuing debt, some estimate of the amount of capital needed to finance planned projects included in the County's capital plan is required. PFM will review the County's capital budget to determine the amount and source of funds the County is willing and able to commit to funding its infrastructure needs. The goal of this review is to determine the optimal match of the sources of capital funding with the infrastructure funding needs. Analyze Future Debt Capacity In order to assess the County's ability to raise debt capital in the future, a computerized financial model is formulated to assess the ability of alternative financing strategies to P Public Financial Management, Inc. Page 23 economically provide the required level of funding over time. The first step is the identification of the key assumptions that will be common to all strategies. The second step is to structure each ' alternative and evaluate its feasibility. Once the model is constructed, existing debt structures of the County will be incorporated to test the impact of each alternative financing strategy on the overall financial statements and financing plan. As a result, the current financing program can be evaluated by itself and in concert with previous or future financings or refundings depending on the financing policies established from the outset (e.g., minimize debt service, maintain level debt service, lengthen or shorten maturities, etc.). Finally, the financial model will have the flexibility to project the capital program using both "constant" and "current" dollar scenarios. This will prevent the County from embarking on a ' financing plan that, while feasible using constant dollars, becomes suspect or infeasible when the impact of inflation is recognized. Identify Financing Alternatives As an independent, non -underwriting financial advisory firm, PFM offers its clients advice ' uninfluenced by the conflicts of interest which may affect other firms, such as municipal bond underwriters. This independence from the underwriting business is important because it allows PFM to develop objective capital financing plans for our clients which incorporate a full range of financing alternatives; as the County's advisor, we are not blindly committed to the notion that a municipal financing must result in the issuance of municipal bonds. We will develop an optimization model to address various financing alternatives, including the following: ' t Pay -As -You -Go Financing g • Notes • Taxable Notes and Bonds • Lease -Appropriation Obligations/Certificates of Participation • Variable Rate Demand Notes/Bonds (VRDBs) • Tax -Exempt Commercial Paper • Capital Appreciation or Zero Coupon Bonds • Bond Banks and Pooled Programs • Synthetic Refunding Products DEBT MANAGEMENT SERVICES Develop and Monitor Financing Schedule To facilitate the timely completion of all tasks, PFM will prepare a bond sale calendar that clearly identifies the responsibilidess of each participant in the transaction. The schedule will be designed to permit sufficient time for review of all disclosure materials by the County officials prior to final printing and distribution. Public Financial Management, Inc. Page 24 L F 7 n � I P P I � d PFM will utilize its extensive experience to prepare a schedule that allows for the orderly completion of each component of the transaction. Moreover, we will work closely with all external participants (e.g., printers, rating analysts, etc.) to ensure that their tasks are coordinated with the activities of the County's staff. Finally, we will keep the County's officials informed about the progress of the financing and, if necessary, remind team members of deadlines. Analyze Debt Structure Alternatives The determination of an efficient issue structure is a function of three elements: (i) is the proposed amortization schedule well coordinated with the issuer's existing debt obligations and revenues? (ii) are the resources pledged to debt redemption sufficient to meet total debt service requirements when existing and proposed debt is combined? (iii) is the proposed maturity schedule designed to attract maximum interest from underwriters and potential investors in the current market'? Working with other members of the financing team and the County's staff, PFM will use the information it has gathered from the policy review and development phase of the engagement to facilitate the formulation of the issue structure and the terms under which the bonds are to be offered in order to answer the aforementioned questions in the best possible manner, given the current market. PFM's experience with the structuring and sale of over $60 billion of debt has given us an appreciation for this task and an awareness of how to design terms and conditions of sale that are compatible with underwriter and investor interests under varying market conditions while consistent with the issuer's fiscal policy objectives. Some of the key issues to be addressed are: • Maturity Schedule and Pattern of Debt Service • Security • Call Features • Credit Enhancement • Book Entry vs. Certificates • Reserves • Premium or Discount Restrictions Recommend a Negotiated or Competitive Sale PFM, as an independent financial advisory firm, places considerable corporate emphasis on the professional and skillful conduct of competitive issues. The public finance departments of investment banks generate the vast majority of their revenues from negotiated bond issues and therefore have a natural bias, both in attitude and experience, to negotiated issues. PFM works on dozens of competitive issues each year and, in fact, the team prides itself on successfully bringing non -general obligation as well as general obligation issuers to the competitive markets. 1 Public Financial Management, Inc. Page 25 I The following describes the general attributes that argue for a competitive versus a negotiated sale. The decision is made depending primarily upon the attributes of the issue and market conditions at the time of sale. ATTRIBUTES THAT ARGUE ATTRIBUTES THAT ARGUE FOR A COMPETITIVE SALE FOR A NEGOTIATED SALE The Issue Well known issuer The Issue New issuer Rating of A or higher Rating lower than A ' Conventional issue structure Standard security provisions Innovative debt structure Unusual security pledge Good credit quality Concern about credit quality Few or no tax law concerns Potential tax law concerns ' Tax-exempt issue Taxable issue Credit enhanced The Market The Market Strong market with high demand Weak market with low demand or high supply ' Stable, predictable market Volatile market with rapid changes At the outset of the engagement, we will evaluate existing and expected credit market ' conditions, features of the credit, and the financing time schedule associated with the proposed bond sale. These and other factors will be used to develop a recommended method of sale. ' Assist the Count in Selecting Working Group Members and Procuring Services Y g g 1. Underwriter Selection ' When it is determined that a negotiated sale is appropriate, PFM will work with The County's officials to develop a detailed request for underwriting proposals. This approach to the selection of its underwriting group gives the County an opportunity to control all components of the ' underwriting spread and identify those firms which are most experienced with marketing securities of the type being offered. In addition, through our experience in bringing over $60 billion in debt to market for our clients, PFM professionals have worked with a wide variety of underwriting ' firms and investment bankers and will use this experience to the County's benefit. Once the underwriting group has been chosen, PFM will negotiate on The County's behalf to ensure that the issue is aggressively priced relative to current market conditions. 2. Procurement of Financial Services PFM will assist the County,, as needed, in identifying and procuring special financial related services that may be needed over the course of its financing program. Some of these services are 1 Public Financial Management, Inc. Page 26 generic to any financing alternative while others may or may not be required depending on the financing vehicle chosen. Services needed for many financings include: • Special Tax Counsel • Underwriter Selection • Trustee Selection • Paying Agent Selection • Feasibility Consultants • Special Credit Facilities (includes such items as letters of credit or bond insurance) • Printing Services Work with Members of Working Group to Develop Financing Terms Once the working group has been selected, PFM assumes the role of coordinator and catalyst. PFM, in conjunction with the County's staff, will analyze each component of the structure and make recommendations to the County. Each member of the financing team will have a different perspective on each point, and it is important that each team member be given an opportunity to express their views and incorporate them into the final structure. The objective of this process is to create a package of terms that creates broad -based interest in the debt among 1 investors while ensuring the lowest possible cost to the County and future flexibility. After assisting the County in developing its financing priorities, it will be PFM's job to represent The County's point of view to the other team members during all discussions about the structure of the financing. ' Develop Financing Documents Once a financial plan has been adopted by the County, the financing team will be responsible for drafting, printing, adopting, and distributing all legal and disclosure documents. PFM's project team members have experience assisting issuers across the nation to prepare the necessary ordinances, legal documents and other disclosure documents for the issuance of taxable and tax- exempt securities. On complex projects, this phase of the project can be extremely time- consuming. PFM will coordinate with local officials, bond counsel, underwriters, banks, and other team members the preparation, review, and finalization of all bond document preparation activities, including the preparation and review of trust indentures, if any, official statements, loan agreements, reimbursement contracts, trust participation agreements, purchase contracts, remarketing agreements, and other contracts that may be necessary for bond issues and other debt instruments considered by the County. Other documents, such as feasibility studies, use agreements, and arbitrage certificates, are the responsibility of other parties, but their preparation ' will be incorporated into the document preparation work coordinated by PFM prior to the sale of securities. 1 Public Financial Management, Inc. Page 27 H 1 Coordinate the Marketing of Bonds ' 1. Timing of Sale In recent years, volatile market conditions have forced issuers to carefully time their tax- exempt borrowings. Factors such as wildly fluctuating interest rates, unprecedented upheaval in the international economic community, and regular federal tax reform proposals have combined to create a very unstable tax-exempt market environment. To assist its clients with the timing of ' proposed issues, PFM closely monitors all such developments and evaluates the potential impact of each on new -issue, tax-exempt securities. 2. Target Buyers ' PFM maintains extensive mailing lists, targeted by region and debt structure, of not only potential underwriters but major investors to whom all disclosure materials should be distributed. Utilizing these lists, PFM can ensure that all interested parties are provided with all the ' information they need to make an informed investment decision concerning the County's proposed offering. Furthermore, PFM encourages interest in the County's new issues through our direct contact with many major underwriting desks. The advantages of this activity are two -fold. First, t PFM is able to inquire about the possible impact of different financing features including early call provisions or the resizing after award of the bonds. Second, by canvassing potential investors and underwriters, PFM is able to give added market exposure to any of the County's new bond issues. 3. Marketing Information ' (a) Disclosure Documents For the County's offerings, PFM will work closely with the administrative staff to ensure that ' the POS is in full compliance with industry standards and the guidelines developed by the GFOA and MSRB. To the extent needed, our advisory team will review the County's existing POS ' format and recommend any changes that may enhance the presentation of relevant information. With minor modification following the sale, the POS becomes the final OS —the public document of record for the financing and the County's only official contact to most of your investors. ' (b) Information Meetings ' PFM will closely monitor the number and composition of all underwriting syndicates that are organized for the County's sales. We will interact directly with these groups and respond promptly to any questions that may arise concerning the issue. When it is deemed appropriate, ' PFM will organize and participate in investor information meetings to describe in greater detail all elements of the transaction. These could be held both nationally (usually in New York) and regionally to include all Florida firms that may have an interest in the County's bonds. L 1 Public Financial Management, Inc. Page 28 J 7 F 1 7 I 7 (c) Marketing Calls In those cases where we are working directly with the County on a competitive sale, PFM will follow up the mailing of the POS the week before the sale with individual calls to all the major national and regional firms that we feel should be interested in the financing to answer any specific questions they might have and to encourage them to submit bids to the County. We have found that this process has been very successful in increasing the number and competitiveness of the bids an issuer would receive. (d) Bid Forms In its preparation of the official bid form, PFM will work with the County's bond counsel to ensure that all statutory requirements are satisfied. In addition to these legal constraints, PFM will evaluate the impact of various bidding provisions on the resulting debt service schedule. Our efforts would be designed to allow bidders maximum flexibility as long as the interests of the County are protected. Rating Agency Presentations PFM has developed considerable experience working with the major national rating agencies. As a result of our experience advising more than one hundred clients each year to issue tax- exempt securities for a wide range of purposes, PFM has developed a clear understanding of the analytical methods utilized by Moody's Investors Service, Standard & Poor's Inc. and Fitch Investor Service, Inc. Our professional staff is trained to conduct in-depth credit analyses comparable to the rating agencies' own analyses so that both credit strengths and weaknesses can be identified by the issuer prior to the presentation of materials to rating analysts. This experience has been utilized effectively recently to improve the credit ratings assigned to several communities across the nation. Over the past two years, PFM has submitted over 200 financings to the rating agencies for ratings. Of this number, approximately 60 of the issues were insured and another 20 were backed by credit enhancements in the form of letters of credit from major international banks. As a result of this experience, we have developed a very effective working relationship with Standard & Poor's Corporation, Moody's Investors Service and Fitch Investor Service. We will work closely with the rating agencies to fully understand their concerns and methodology and to design the County's presentations, as described below, to specifically address each agency's questions in a meaningful way. In addition, we maintain close personal contact with staff members at the rating agencies regarding their views of debt covenants, innovative financing techniques and unusual debt structures. The following are services which PFM can provide to design an effective rating agency presentation: • provide training to the County's staff • provide outline for presentation • assist with the collection of data IPublic Financial Management, Inc. Page 29 I 7 • recommend presentation format • conduct rehearsal of rating presentation Assist with the Pricing of the Bonds PFM has built its entire reputation upon our financial advisory and consulting practice in the area of municipal finance. PFM's record of participation in the field of municipal finance is unrivaled by any other independent financial advisor and compares favorably to the performance of major national investment banking houses. For each of the past three years, PFM has advised governments on more than one hundred financings per year, thereby assuring our clients that PFM is as active in the municipal debt market as any Wall Street firm. This record of involvement on as frequent a basis as investment banks has kept us in touch with the municipal market and gives us the needed prospective to assist our clients to market and price their debt issues in a knowledgeable manner. In addition to our frequent involvement in the market representing our clients, PFM has committed a significant portion of its research effort into studying the municipal markets and the factors that affect the manner in which an individual security is priced in that market. As a result of that effort, PFM has developed a quantitative model that uses a daily tax-exempt pricing matrix developed by the Delphis Hanover Corporation for a group of the nation's largest tax-exempt fund managers to price their portfolios on a daily basis, to quantify the aggressiveness of any individual new issue pricing relative to the rest of the market. This model complements PFM's already extensive anecdotal knowledge of the markets and gives us the unique ability to provide our clients with quantifiable and objective data to support our pricing recommendations. Finally, no other municipal financial advisor has committed itself to the investment advisory business in the way that PFM has. Since our Investment Advisory Group has three "traders" who execute trades for client's accounts averaging $150 million per day, we are in total and daily contact with the government bond market, the market that heavily influences the pricing of municipal securities. ' After the pricing is completed, PFM will provide the County with a financial advisor's memorandum so that the County can evaluate the fairness of the pricing of its bonds. Contained in the memorandum are a list of yields on recently priced comparable issues, a list of underwriter's fees on recently priced comparable issues, municipal market conditions leading up to and on the day of the sale, a description of the call provisions, ratings, credit enhancements and special features of the issue and a general background of the issue. This document serves not only as a ' measure of the fairness of the sales terms but as a comprehensive reference to which the County may refer in the future. ' Assist with Closing PFM will work with all parties involved with the closing to prepare a schedule of tasks to be completed prior to closing and iden�fy the party responsible for completing the task. These tasks include printing and preparing bond certificates (if printed bonds are used), completing the final � I I Public Financial Management, Inc. Page 30 official statement, preparing closing documents, arranging for the transfer of funds and investment of funds. In for closing, PFM will work with the County's bond counsel and other preparation members of the financing team to prepare and review all required documentation. This will include our direct dealings with the official statement printer and bond printer, as well as coordination of bond registration with the underwriter and registrar. Our advisory team will arrange for either registration of the bonds with the Depository Trust Company or delivery of the bonds and the simultaneous transfer of "same day" funds into the accounts identified by the County. If the transaction is a refunding, PFM will assist in the purchase of U.S. Treasury ' securities for the escrow. Other closing arrangements will also be completed so that officials of the County can be confident that each transaction will be completely and professionally brought to a close. J I U r s 1 Public Financial Management, Inc. Page 31 I [1 n 7 I H SPECIAL SERVICES PFM's abilities as a Financial Advisor are not limited to the issuance of debt alone. As a full service financial advisory firm capable of rendering a full rage of services related to debt management, financial planning and investment management, PFM is well equipped to continue to serve the financial needs of Monroe County in an expanded role as General Financial Advisor to the County. Listed below is a sampling of non -transaction related projects completed by PFM for various Florida clients: • Five Year Capital Plan • Transit Financing Program • Analysis for joint ventures on private health facilities • Financial projections adopted in Capital Improvement Elements (CIE) • Financing plans for public golf courses • Utility acquisition plans used for condemnation and negotiation in mediation • Legislative package for repeal of an existing Special District and consolidation of water and sewer systems • Five year operating and capital programs • Financial plans for public -private ventures for civic center (obtained $23 million State grant) • Conversion of variable rate bond pool to fixed rate • Debt ratio studies • Policy development • Plans for sales tax referendums • 15 year sales tax Capital Improvements Program (CIP) • Toll facilities studies • Available revenues studies • Work products for Special Districts • Studies on how and when to use assessments • Report regarding Purchasing Policies and Local Purchasing Initiatives • Reports on various types of lease financings • Capital modeling • Beach redevelopment (public -private) • Public -private parking garages • Financial analysis and studies on the merits/drawbacks of participating in the Florida Association of Counties Commercial paper Program as opposed to initiating an independent one secured by a letter/line of credit • Consolidated financing program for Community Redevelopment Districts (CRDs) • Financial analysis for a proposed nursing home • Investment management policies • Comprehensive surveys of revenues available under Florida State Law • Analysis of financial integrity of construction managers • Research of growth versus no -growth policies for land use planning 1 Public Financial Management, Inc. Page 32 ISSUES FACING MONROE COUNTY As stated in our cover letter, Public Financial Management, Inc. took the opportunity to review several documents obtained from the County. Monroe County is facing crucial issues and problems that the County needs to address. Based on our review, PFM has highlighted our expertise in the following areas: • Capital Planning ' General Economic Development • Transportation ' CAPITAL PLANNING A formalized capital planning and budgeting process is one of the most important management tools available to government officials. The process provides for the systematic identification, evaluation, and funding of all capital projects. Implicit in every capital funding decision is a statement about the community's future. There are a number of steps involved in the formulation of a comprehensive capital plan. ' PFM's reviewed the County's Capital Improvements Program included in the County's Comprehensive Annual Financial Report. The Program seems to address the growing demand for increased levels of service to the citizens and taxpayers in a more efficient and effective manner. ' PFM would like to continue to provide the County the following capital planning services: • Review Existing Debt Structure ' Review Capital Budget • Assist in Policy Formation • Analyze Future Debt Capacity • Match Revenue Sources to Appropriate Capital Project • Identify Financing Alternatives • Provide Analysis for the CIE Some examples of PFM's experience in providing financial advice in formulating capital improvement programs are outlined below: Clay County, Florida - Provide the County with a structured method for departments to submit requests for capital requirements. Maintain an on going up to date seven year ' capital improvements plans. Assisted the County with completion of the Capital Improvement Element of the Comprehensive Land Use Plan. Orange County, Florida- Assisted the County with compiling a substantial capital improvements program. This included providing policies for the amendment process and continuous update of the program based on policy changes. Public Financil Management, Inc. Page 33 1 1 I n I St. Johns County, Florida - Provided the County a model that divided their capital improvements into the mandatory elements required by the Capital Improvement Element of the Comprehensive Land Use Plan. Assisted the County with continuous updates to the model prior to the Capital Improvements Element being accepted by the State. City of Stuart, Florida - Provided the City with policies to assist in the development of the comprehensive capital plan. The process is in the beginning stages and PFM anticipates providing the City with on going service for their capital improvements program. GENERAL ECONOMIC DEVELOPMENT PFM has advised many of its clients on a wide range of economic development programs including sports facilities, convention centers, public transit projects and airports. We have implemented a host of financing techniques for these programs including State loan pools, tax increment financing and equipment leasing. The unique nature of these projects often results in an atypical credit structure more akin to corporate finance. Because of the unique credit structure, the municipal bond market often has difficulty assessing the risks, and as a result, has a difficult time developing the required credit and legal structure. PFM has made a concerted effort to understand the risks involved and assess the feasibility of products available to mitigate risk. PFM's approach to economic development has for years advocated the use of private funds and public/private partnerships to provide alternative sources of capital for projects in the face of limited financial resources. PFM has assisted clients with structuring public/private ventures in the following areas: Sports and Convention Centers - Having advised on more sports and convention center facility financings than any other firms, PM understands the risks involved in these project financings. We take pride in our ability to close the transactions. Of particular interest is PFM's role in financing Joe Robbie Stadium for the Miami Dolphins, the first privately owned and financed facility in twenty-five years. PFM developed the financing strategy which included "stadium revenue bonds", which included prepaid luxury suites and advertising revenues. Hotels - Public Financial Management has maintained a long term financial advisory relationship with the Greater Orlando Aviation Authority. Interim financing for the Hotel project was provided from the proceeds of bond anticipation notes issued by the Authority under a bank line of credit agreement. The proceeds from the Series 1992 Bonds were used to finance a portion of the costs of planning, design, acquisition, construction and equipping the first class, 443-room hotel (the "Hotel") at the Orlando International Airport. The project consisted of the construction of the Hotel around a six -story enclosed atrium through which passengers pass on their way between the landside terminal building and the east airside buildings. The Hotel which was IPublic Financial Management, Inc. Page 34 C substantially complete and opened for business on August 4, 1992, provides a 125-seat full -service dining room, a 250-seat buffet dining room and other food and beverage facilities. The Hotel provides 35,000 square feet of ballrooms, meeting rooms and convention space. Industrial Parks - PFM is currently assisting Lake County with a project to provide the water and wastewater infrastructure to a County owned industrial park. The financing plan includes issuing debt backed by the sale of the lots within the industrial park. Based on PFM's recommendations, the County is in the process of exploring the possibility of obtaining Economic Development Administration (EDA) grant money to assist in this endeavor. Medical Jail - Orange County experienced escalating costs for treating inmates in the County correctional institution. PFM performed an analysis on privatizing the health facilities to provide health care to prison inmates. A report was provided to the Board regarding a number of different privatization options. Additionally, PFM calculated a "break even" analysis regarding the number of inmates treated to make the project cost effective. Three different health care providers expressed the desire to operate the facility. Tax Increment Districts - Lee County adopted and implemented eleven (11) community development districts. PFM developed a cash flow model that provided for a single debt offering with each district paying its proportionate share of debt. Additionally, PFM assisted the County in utilizing the Commercial Paper Program until a debt offering was feasible. SPECIAL ASSESSMENTS PFM's commitment to assisting local governments with innovative solutions to capital funding requirements is demonstrated by our experience with special assessments. PFM has been a leader in the State of Florida with assisting local governments with developing financing plans that include special assessment and the issuance of debt. Each of the above clients, in addition to others who have not completed their assessment financings, have benefited from PFM's expertise and knowledge of assessments. Below we have outlined just of a few of the techniques used to assist our clients with special assessments and their financing techniques: o Alachua County, Florida -- Structured a Plan of Finance to issue Bond Anticipation Notes and Bonds for providing fire protection to the unincorporated area of the County via a special assessment; s IPublic Financial Management, Inc. Page 35 1 o Bay Colony Special Recreation District, Florida 1 -- Assisting District in structuring alternative plans of finance to redeem outstanding debt from pre -paid recreation facility acquisition assessments; to Clay County, Florida -- Structured a Plan of Finance that allowed property owners to pay a level annual assessment for the purpose of road improvements; assisted in implementing the non -ad valorem collection method for the assessments; -- Implemented the first assessment for solid waste disposal and have ' provided a sworn affidavit on the County's behalf when the assessment was legally challenged. PFM will testify in the County's behalf should the case be litigated; ' o Englewood Water District, Florida -- Structured a plan of finance utilizing special assessments for capacity in a wastewater facility (in progress); o Hernando County, Florida -- Structured and calculated the annual assessment and tipping fees to support solid waste disposal; ' o Lake County, Florida -- Structured and calculated the annual assessment and tipping fees to support solid waste disposal; o Lee County, Florida ' -- Structured numerous road assessment districts combining them into a single financing; -- Assisted with the financing of Municipal Service Benefit Unit for the ' purpose of providing wastewater; issued BANS and retired them with two bond issues on pledging the assessment the other pledging State Revolving Loan Funds; ' o Marion County, Florida -- Initiated an assessment program that provided the paving and drainage of roads within the unincorporated areas of the County; Assisted in implementing an MSBU for the purpose of solid waste disposal; o St. Johns County, Florida -- Structured a Plan of Finance that included fire flow assessments with a two tiered rate covenant and additional bonds test that reduced the impact of constructing a commercial water main. 1 Public Financial Management, Inc. Page 36 11 7 -- Assisted in implementing an MSBU for the purpose of solid waste disposal and in the progress of assisting in a special assessment for solid waste collection; -- Structured a road assessment financing plan by creating MSBUs for the purpose of providing residential drainage and paving; -- Assisted in the preparation of methodology for special assessments for fire services. PFM has been successful in assisting a number of our clients including the County, with providing for the ad valorem collection of special assessments. This collection methodology has strengthened the credit for those clients and allowed them to receive better ratings and more aggressive bids for credit enhancement. ' TRANSPORTATION Monroe County is responsible to provide care and maintenance for road and drainage systems ' throughout the County. The County relies on the one cent infrastructure sales tax to provide some of the funding. Additionally, road and transportation improvements are a key tool in providing opportunities for economic development in Monroe County. 1 J I While our ranking within the State and our extensive Florida client list are indicative of a high degree of knowledge with all aspects of financing by Florida public entities - we could not maintain our various client engagements from year to year if our professionals did not have a high degree of knowledge of Florida public finance - rankings and client lists do not by themselves portray our expertise. Florida public entities maintain ongoing relationships with PFM only because we provide service that comes from a highly knowledgeable professional staff. In this regard, we believe the best way to summarize our expertise is to discuss in a case study format several of our past and current client engagements which are particularly relevant to the County. Several such case studies are provided below. A complete three-year listing of our bond financing record within the State of Florida is provided in Appendix A. o Transportation with Developer Participation - As financial advisor to Osceola County, PFM played an active role in the development and implementation of a plan of finance for the Osceola Parkway Project. Participants in the financing include Osceola County, the Reedy Creek Improvement District (Disney's governmental arm), and various landowners along the proposed route. o Tollroads/Expressway Systems - The Orlando -Orange County Expressway Authority has undertaken an ambitious capital improvement program that has resulted in more than 80 miles of toll expressways in the Orlando metropolitan area, establishing the Authority as the most active of the road building authorities in the State. Since 1988 PFM has assisted the Authority with the issuance of nearly $1.3 billion of debt. In the recent $202.7 million refunding, the Authority achieved i) $33.5 million of present value debt service savings, ii) restructured debt service which will add $50 million to the equity 1 Public Financial Management, Inc. Page 37 P r H i capacity for future projects, iii) improved credit ratings, and iv) significant improvements to existing bond covenants. o Long Term County Road Program - PFM has helped Osceola County develop and implement a long term road financing program. As part of our initial work, PFM created a cashflow model which presented alternative means of funding the County's road program, primarily addressing the appropriate balance for the use of the County gas tax revenues between pay-as-you-go funding and revenue bonds. In 1986, PFM assisted the County in the issuance of $8.0 million of revenue bonds secured by the first six of the ten cents of the pledgeable gas tax revenues. 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