Item Description:
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Neg Agmt PR00008310 with PFM Financial Advisors LLC to provide municipal advisory services, 05/01/26-04/30/31, NTE $1,300,000
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Resolution:
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BE IT RESOLVED, that the County Administrator be authorized to negotiate Agreement PR00008310 with PFM Financial Advisors LLC for the provision of municipal advisory services to Hennepin County during the period May 1, 2026, through April 30, 2031 with a total not to exceed amount $1,300,000, be approved; that following review and approval by the County Attorney’s Office, the Chair of the Board be authorized to sign the Agreement on behalf of the County; and that the Controller be authorized to disburse funds as directed.
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Background:
The County currently has a contract with PFM Financial Advisors LLC to provide municipal advisory services, which expires on August 31, 2026. The Hennepin County Debt Management Policy states that it is the practice of the County to retain an independent, registered municipal advisor to provide services related to the structuring, rating and issuance of all debt issues of the County.
Accordingly, the Office of Budget and Finance (OBF), in collaboration with the County Attorney’s Office and Purchasing, recently conducted a Request for Proposal (RFP) process for provision of municipal advisory services. The RFP was sent directly to six firms actively engaged in providing municipal advisory services to clients in Minnesota, as well as made publicly available through the County’s procurement portal. Two firms responded to the RFP - Baker Tilly Municipal Advisors, and PFM Financial Advisors LLC.
The firms were evaluated by representatives of OBF and the County Attorney’s Office with assistance from Purchasing (the Evaluation Panel). The minimum qualifications to be considered required the firms to have served as the primary municipal advisor to local, regional or state governmental issuers within the past five years. In addition, proposals were evaluated based upon the plan for providing services; experience and qualifications, including past performance; demonstrated commitment to diversity, equity and inclusion strategies and outcomes; overall quality of the proposal; fees; and potential for conflicts.
It was the consensus of the Evaluation Panel that the firms met the minimum criteria for consideration. In the area of overall experience in providing municipal advisory services, PFM Financial Advisors LLC (PFM) was judged to have the broadest array of relevant experience, particularly with large complex issuers such as the County. PFM also offers a complete complement of services in other areas which may be beneficial to the County to access in the future, including asset management, review of banking arrangements/contracts, and general consulting. In addition, the core of PFM’s project team is all located in downtown Minneapolis.
The RFP required fixed transaction fees for actual bond issues, as well as discounted hourly rates for non-bond issuance work. In this area, PFM’s transaction fees generally were the lowest of the two firms. The discounted hourly rates for both firms were not materially different.
There were no potential conflicts of interest with the County identified by PFM in its proposal. The firm agreed that it would take appropriate action to notify the County if a conflict were to arise.
The Evaluation Panel concluded that PFM’s proposal best met all of criteria set forth in the RFP because: (1) their response demonstrated how their prior experience with the County and institutional knowledge has served and will continue to serve the County well; (2) they offer superior experience with large, complex issuers; (3) they provide a consistent, exceptionally well qualified, and diverse project team; (4) they suggested useful improvements to the County’s current debt management practices; and (5) they demonstrated a firmwide commitment to diversity, equity and inclusion strategies that are consistent with the County’s efforts. Furthermore, the Evaluation Panel recognized the value of continuity of service, as PFM staff have performed extremely well in terms of responsiveness, timeliness and quality of advice during the past five years.
It is the recommendation of the Evaluation Panel that PFM Financial Advisors LLC be awarded the contract to provide municipal advisory services to the County. The proposed agreement has a five-year term, is subject to cancellation with and without cause and incorporates the fixed transaction fees and discounted hourly rates as proposed.
Over the course of the five-year agreement, it is likely that the Hennepin County Housing and Redevelopment Authority (HCHRA), the Hennepin County Regional Railroad Authority (HCRRA), Hennepin Healthcare System, Inc. (HHS) and possibly other County affiliates will require the services of a municipal advisor. For purposes of continuity and efficiency, it is recommended that PFM serve as municipal advisor to those entities as well, and this provision has been included in the proposed agreements.
Current Request: Authorization to negotiate Agreement PR00008310 with PFM Financial Advisors LLC for the provision of municipal advisory services to Hennepin County for the period May 1, 2026, through April 30, 2031 with a total not to exceed amount of $1,300,000.
Impact/Outcomes: Approval of this request will allow for continuous, uninterrupted municipal advisory services with PFM Financial Advisors LLC to Hennepin County for the period May 1, 2026, through April 30, 2031.
recommendation
Recommendation from County Administrator: Recommend Approval