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Intro to Bond Finance CourseCDFA Summer SchoolBaltimore, MDAugust 9-10, 2016

The Partners Involved:Independent Registered Municipal Advisor

Presentation by: Dane Lee

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Agenda

• Who am I • What is an Municipal Advisor• When do you need an Municipal Advisor• Why do we have Municipal Advisors• Where the MA fits into the financing process• How do you select a Municipal Advisor

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Springsted• Established in 1950’s – Osmand “Ossie” Springsted• Headquartered in St. Paul, MN

My Perspective

• Trustee• Elected

Official• Regulator• Municipal

Advisor

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Typical MA Experience

Public Finance– Banker/Underwriter– Bond Attorney– Investment / Bond analytics / Accountants– Engineers

Public Sector– City/County Manager– Finance Director– Superintendent

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Why do you need a Municipal Advisor?

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• To get perspective• Too busy• Lack specific experience• Save time/money (efficient)• To find savings/efficiency in process/financing• To reduce risk• To access the market• To understand current market conditions• To get advice from a fiduciary

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My job is to help clients sleep better….

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Our Mission Statement

To provide high quality, independent financial and management advisory services; work with clients in the long-term process of building their communities on a fiscally sound and well-managed basis.

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Where does the Municipal Advisor fit?

Structure – Rating/Credit Enhancement – Issue Debt – Build/Purchase

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Policy/Plan – Need – Cost/Feasibility – Select Team Structure – Rating/Credit Enhancement – Issue Debt

– Build/Purchase

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Policy/Plan – Need – Cost/Feasibility – Select Team Structure – Rating/Credit Enhancement – Issue Debt

– Build/Purchase

Repay Debt – Covenants – Credit Rating – Refund – Replace

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Who would consider executing a financing without a Municipal Advisor?

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Dodd-Frank Act• Abuses by market participants• Conflicts of interest• Municipal advisors have an explicit fiduciary duty to

their government clients• Underwriters/bankers not allowed to give oral or

written recommendations or “advice”• What is advice?• MA firms are required to be registered with SEC • SEC Series 50 Qualification – 9/12/17

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Practice Groups (Full Service)

1. Public Finance Services2. Housing and Economic Development Services3. Operational Finance and Fiscal Planning Services

4. Investment Services5. Organizational Management and Human Resources

Services

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Trusted Advisor Relationship (Fiduciary)

Planning & Strategy

Funding & Implementation

Managing & Performance

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Organizational Management / Human Resources

Executive Search (Waters)

Planning & Strategy– Community Surveys– Facilitation

Managing & Performance– Compensation and Benefit

Systems– Performance Evaluation

– Personnel Policies– Position Classification

– Organizational Improvement Studies

– Strategic Planning

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Investment ServicesPlanning & Strategy• Cash Flow Forecasting and Modeling• Investment Policy Development

Funding & Implementation• Needs Analysis• Selection of Investment Providers• Investment Design /Selection of Vehicles / Allocation

Managing & Performance• Portfolio Analysis• Swap Advisory Services• Pricing and Fairness Opinions• Market Valuations

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Operational Finance and Fiscal Planning

Planning & Strategy• Capital Improvement Policies• Debt Planning & Policies• Debt Capacity Studies• Referendum Assistance

Funding & Implementation• Issuance Process Management• Capital Infrastructure Financing• Cash Flow & Pooled Financing• Individual & Master Lease Programs

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Operational Finance and Fiscal Planning

Managing & Performance• Credit Rating Strategy & Enhancement• Arbitrage/Rebate Regulatory Compliance Services• Continuing Disclosure Regulatory Compliance Services• Debt Management

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Public Finance Services

Planning & Strategy• Capital Improvement Policies• Debt Planning & Policies• Debt Capacity Studies• Referendum Assistance

Funding & Implementation• Issuance Process Management• Capital Infrastructure Financing• Cash Flow & Pooled Financing• Individual & Master Lease Programs

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Public Finance Services

Managing & Performance• Credit Rating Strategy & Enhancement• Arbitrage/Rebate Regulatory Compliance Services• Continuing Disclosure Regulatory Compliance Services• Debt Management

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Housing and Economic DevelopmentPlanning & Strategy• Development Strategy• Development Studies and Analysis• Housing Initiatives / Policy Development• Public and Private Housing Plans

Funding & Implementation• Cost Benefit Analysis• Development Process Management• Financial and Tax Impact Analysis• Incentive Capacity Analysis• Private Development Review ("But-For" Analysis)• Public/Private Partnerships

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Housing and Economic Development

Managing & Performance• Developer Review and Negotiation• Financial Compliance and Disclosure• Statutory Compliance Services• Tax Increment Financing/

Tax Abatement Services• Training and Workshops

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How would you go about selecting an Municipal Advisor?

What attributes are important to you?

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Selecting a Municipal Advisor

• Expertise• Experience• Capabilities• Capacity• Relationship• Reputation• No conflicts• Registered with SEC as an IRMA (Series 50)• RFQ / RFP (Value) - Lower borrowing cost

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Conclusions• Municipal Advisor: Fiduciary with specialized

expertise and experience who looks out for your best interests

• A Municipal Advisor is valuable throughout the life cycle of a financing

• Independent Registered Municipal Advisor (IRMA) designation is a result of market abuses and conflicts

• Select your Municipal Advisor carefully, because they can be a valuable extension of your staff that gets better as they get to know your needs better

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Questions?

Dane A. LeeVice President

Springsted Incorporated9229 Ward Parkway, Suite 104 NKansas City, Missouri 64114-3311816-333-7093 Direct - 816-820-5433 Celldlee@springsted.com