City of Lawrence

City Manager’s Office

MEMORANDUM

DATE:	5/4/2006
TO:	David Corliss, Interim City Manager
FROM:	Casey Liebst, Budget Manager
CC:	Debbie Van Saun, Assistant City Manager Ed Mullins, Finance Director
RE:	Financial Advisor Services

Background

On April 1, 2006, the City distributed the attached proposed scope of services for a Financial Advisor.  The City received responses from Springsted, Public Finance Consultants, Inc., and Columbia Capital Management, LLC and recommends the retention of Springsted for financial advisor services.  Springsted was viewed as the superior proposal given their extensive municipal financial experience, their team for the project which includes individuals with Kansas municipal finance experience, their work for area communities (Johnson County, KCK, Lenexa, Wichita) and their ability to assist staff on both short term and long term projects and analysis.

Short Term Priorities

Springsted indicated their ability to address the following short term priorities in time for use in the development of the 2007 budget, including:

w	Streets.  Springsted will review the City’s plan to stabilize and improve the condition of our existing streets as well as provide a review of options for funding that plan.  This will include a review of existing revenue streams and suggestions for additional and/or alternatives revenue streams.
w	Revenue Forecasting.  Springsted will review and document the methodology currently used by the City to forecast revenues and, if appropriate, recommend changes and/or enhancements.
w	Debt Levels.  Springsted will project the debt service fund property tax levy over the next five years, providing for projects in the approved capital improvement budget as well as list of identified potential projects.  In addition, Springsted will provide comments on any possible impacts of the projected debt level on the city’s bond rating.
w	Fund Balance.  Springsted will review the city’s fund balance policy and recommend any changes.

Long Term Priorities

Springsted indicated their ability to continue to work with the City to address longer term issues including:

w	Revenues vs. Expenditures.  Springsted will work to help the City develop a long range plan to better align projected expenditures with projected revenues in the City’s operating budget
w	Capital Improvement Plan.  Springsted will review the City’s Capital Improvement Plan and the process used to develop it and provide recommendations for enhancements. Additionally, Springsted will be available to assist the City with the longer range capital needs, including utility projects, public-private partnerships, and other capital needs.

Recommendation

Staff recommends the City Commission authorize the Interim City Manager to enter into an agreement with Springsted for on-going services as financial advisor to the City.  The scope of work will include the projects outlined above but will also allow for addition projects based on the City’s needs.

The cost of the agreement will be based on the hourly rate as outlined in Springsted’s response to the proposed scope of services.