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8.4 SR 05-20-2024City of Elk - River To City Council Meeting Date May 20, 2024 Item Description Financial Advisor Services Request for Action Item Number 8.4 Prepared By Joe Stremcha, Business Services Director/Assistant City Administrator Reviewed by: Lori Stich Joe Stremcha Cal Portner Tina Allard Action Requested Approve by motion, Ehlers, Inc., to provide financial advisory services to the City of Elk River. Background/Discussion The city, Economic Development Authority (EDA), and Elk River Municipal Utilities (ERMU) engaged Springsted in 2013 for financial advisory services. Springsted has since been acquired by Baker Tilly, and over the past few years, two of our appointed advisors have retired and both the city and ERMU have also made some staffing changes. With the personnel changes, staff felt it was a good time to test the market. After inviting proposals for an independent financial advisor, two firms, Baker Tilly and Ehlers, Inc. responded. An interview committee was formed that included the Finance Manager, Economic Development Director, Assistant City Administrator/Business Services Director, City Administrator, ERMU's Finance Manager, and ERMU's General Manager. The committee interviewed both firms on May 13, 2024. The committee unanimously recommends Ehlers for financial advisor services. Baker Tilly will continue with current projects until they are completed. Ehlers will be consulted for new projects as they arise. The committee felt Ehlers would provide a fresh perspective, expertise, and strong customer service. Ehlers provides a full -service approach from fiscal consulting to debt planning and issuance. Ehlers represents cities larger and smaller than Elk River, such as Maple Grove, Lino Lakes, and Duluth. In the last five years, Ehlers has: ■ Advised on nearly 2,500 debt issues totaling over $15 billion. ■ Ranked #1 in Minnesota for number of competitive bond sales advertised (per Bloomberg data for 2023). ■ Conducted nearly 100 long-term financial plans and 225 utility rate studies. ■ Advised on over 350 housing, redevelopment, and economic development projects. ■ Established 200+ TIF districts and completed TIF reporting for over 450 districts. The Elk River Vision A avelcoming community with revolutionary and spirited resourcefulness, exceptional service, and community p p W E H E 0 A T engagement that encourages and inspires prosperityINMUN 430 Financial Impact Financial advisory fees are based on when services are rendered, such as when a bond issue or tax increment financing occurs. The firms interviewed were relatively close, but Ehlers did have an edge in favorable pricing. Mission/Policy/Goal Responsible for every dollar - good stewards. Attachments I. Ehlers interview presentation Page 378 of 430 River r,*iEHLERS Building a Relationship with: The City of Elk River, Minnesota Page 379 of 430 Your Partners in Public Finance Fiercely Independent. Fully Integrated. Fiscal I ` Debt Planning Consulting f & Issuance o�-moo Arbitrage % R� Continuing Consulting �%°��ti1 // Disclosures �C CLIENTS ` Economic Development & 1�� Redevelopment Paying Agent 0 Services CONSTITUENTS COMMUNITIES J /© Investments ram�, & Treasury Management �O 1O1 Interim Staffing Working as one team for your benefit... EHLERS Page 380 of 430 Client Value Defined Understand long- range goals, situational context & potential challenges. rLISTEN OLLABOIRA] REFLECT �w Keep our shared LL mission of working for the common good 8 your interests at the center ofall we do. ��0�NN ��)�� m�0�U�N�� - Work directly with staff, - partners, developers & constituents to create the r�gdtsolution. ~ Provide proactive, accurate & independent advice across all facets of public finance. Page 381 of 430 Unparalleled Client Resources Ehlers' Team Dedicated to Minnesota Clients 10 Municipal 8 Fiscal 5 Disclosure 2 Arbitrage 5 Investment Advisors Consultants Specialists Consultants Advisors No other firm has invested more in these resources. ��EHLERS Page 382 of 430 Building Communities: It's what we do. - Advised on nearly 2,500 debt issues totaling over $15 billion Ranked #1 in Minnesota for number of competitive bond sales advised (per Bloomberg data for 2023) Conducted nearly 100 long-term financial plans & 225 utility rate studies Advised on over 350 housing, redevelopment & economic development projects Established 200+ TIF districts & completed TIF reporting for over 450 districts rg EHLERS ft Page 383 of 430 Budget preparation assistance TNT presentation preparation @ presentation Levy certifications to county (preliminary/final) County Auditor communications Year-end reconciliation for audit preparation Tax impacts Fiscal disparities analysis Annual outstanding indebtedness Tax settlement Financial policy Journal entries Property tax work coding creation/review I I Any government Final budget to accounting Interim staffing Billions in development value AHTFest8b|ishrDODt 8policy development Augment staff tO drive redevelopment projects to COnlp|8tioO Policy fhprogram development Craft, review, prepare 3t@y1& testify for special legislation Go -to ^''"x represent vuux� of MN Cities on issues sector entities f� IFite p j��t that impact cities public benefit non-nagennent Experience with Development fee analysis public power inMN, MI MIVV[8'��| Rate structures Transactions ranging in size from $JM to $67M Key Financial Metrics Long-term capital planning &debt structuring Understanding of Long-term financial balance sheet Understanding of managementrn�na�ennentand risk cnedit/rat/ngnnetrico Seamless Client Transition Process Introduce all team members, review respective rolls Discuss projects to transition • Determine timing of project transitions) Provide transition documents & status updates for various services Request data from City, as needed Minimal time commitment for City. We handle all the details. g'%'EHLERS Page 387 of 430 • Took on bond issues & all related work • Developed special assessment and debt interactive workbook • Collaborated on financial policy development & updates • Advised on LOST planning & implementation "When the City of Maple Grove transitioned to Ehlers, we did so for the main reason of better customer service and knowledge/experience of the team. While we knew there was going to be some additional work related to the transition, the amount of time and. effort it took to make the transition was really very minimal." - Greg Sticha, Finance Director Took on bond issues & all related work • Transitioned housing, economic development and redevelopment projects ✓Pooling analysis for TIF districts ✓4 development projects in the queue "Ehlers speaks to their seamless client transition process, and that's exactly what we experienced. There was no lapse in municipal advisory services and their proactive approach made us feel like a valued long- term client right away. Ehlers is more than a vendor, but a partner to the City of Lino Lakes." - Hannah Lynch, Finance Director Took on bOO{j issues & all related work /ThreOnew bond issues within BOdays Ofengagement .-Complex legal structures ',Analysis of options for future financing `/StrOarn|inedpr0C8sSes for credit rating' official staternen1& paying agent `°" "'`` "" "The transition was S[OOQth' 8D(3 I found that Ehlers provides services throughout the process that we weren't receiving from our previous Municipal Adviso So that was DiC8sUrp[iSe." - Jennifer Carlson, Finance Director Why Ehlers? • Responsive: What you need, when you need it • 1000 local presence for all team members: we're there for you • Committed to deploying client resources in the most effective, efficient way Ca FREERS Deep Bench: Team of collaborative • FDe Be Deep o ' ' abora professionals with local government experience • Meaningful Assistance to Finance & Community r Development: We augment staff and help where you need it, when you need it • One call: Can assist in navigating all facets of finance daily work • Provide immediate value-added service during client transition 13 Page 391 of 430 Building Communities. It's what we do. We're here to make your jobs easier and get the results you want for your community. City of Elkl-am%qw- Pdver In partnership With 9 EHLERS PUBLIC FINANCE ADVISORS We would be privileged to serve the City! g%"'EHLERS ft Page 392 of 430 Important Disclosures The statements contained herein have been provided by current clients and may not be representative of all client experiences. Additional information is available upon request. Ehlers is the joint marketing name of the following affiliated businesses (collectively, the "Affiliates"): Ehlers & Associates, Inc. ("EA"), a municipal advisor registered with the Municipal Securities Rulemaking Board ("MSRB") and the Securities and Exchange Commission ("SEC"); Ehlers Investment Partners, LLC ("EIP"), an SEC registered investment adviser; and Bond Trust Services Corporation ("BTS"), a holder of a limited banking charter issued by the State of Minnesota. Where an activity requires registration as a municipal advisor pursuant to Section 15B of the Exchange Act of 1934 (Financial Management Planning and Debt Issuance & Management), such activity is or will be performed by EA; where an activity requires registration as an investment adviser pursuant to the Investment Advisers Act of 1940 (Investments and Treasury Management), such activity is or will be performed by EIP; and where an activity requires licensing as a bank pursuant to applicable state law (paying agent services shown under Debt Issuance & Management), such activity is or will be performed by BTS. Activities not requiring registration may be performed by any Affiliate. This communication does not constitute an offer or solicitation for the purchase or sale of any investment (including without limitation, any municipal financial product, municipal security, or other security) or agreement with respect to any investment strategy or program. This communication is offered without charge to clients, friends, and prospective clients of the Affiliates as a source of general information about the services Ehlers provides. This communication is neither advice nor a recommendation by any Affiliate to any person with respect to any municipal financial product, municipal security, or other security, as such terms are defined pursuant to Section 15B of the Exchange Act of 1934 and rules of the MSRB. This communication does not constitute investment advice by any Affiliate that purports to meet the objectives or needs of any person pursuant to the Investment Advisers Act of 1940 or applicable state law. C► EHLERs 15 Page 393 of 430