AUTHORIZATION TO ENTER INTO A LINKING AGREEMENT WITH RBC CAPITAL MARKETS, LLC FOR FINANCIAL ADVISORY SERVICES
Staff Contact: Vicki Rios, Director, Budget and Finance
Purpose and Recommended Action
This is a request for the City Council to authorize the City Manager to enter into a linking agreement with RBC Capital Markets, LLC (RBC) for financial advisory services, retroactively to September 11, 2015 and through September 10, 2017. This is also a request for the City Council to authorize the City Manager, at their discretion, to extend the agreement for up to two (2) additional years, in one-year increments, through September 10, 2019. This cooperative purchase is available through an agreement between the State of Arizona and RBC (Contract No. ADSPO14-080039).
Background
The City of Glendale has approximately $872 million in outstanding debt. The City has historically relied on issuing debt as an effective means to finance capital projects with long useful lives. Bond/debt refunding is also critical to ensure the City can take advantage of the bond market interest rates to minimize debt services costs. Currently, the City has different types of bonds outstanding as summarized below:
* General Obligation (GO) Bonds
* Water/Sewer Revenue Obligations
* Highway User Revenue Fund (HURF) Revenue Obligations
* Transportation Excise Tax Revenue Obligations
* Municipal Property Corporation Excise Tax Revenue Bonds
* Excise Tax Revenue Obligations
State and local governments engage municipal financial advisors (FA's) to assist in the structuring and issuance of bonds and other debt obligations. An FA represents the issuer (the City) in the sale of bonds, and unlike other professionals involved in a bond sale, has an explicit fiduciary duty to the City.
The Government Finance Officers Association (GFOA) recommends that issuers hire financial advisors prior to the undertaking of a debt financing unless the issuer has sufficient in-house expertise and access to cur...
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