Everything You Wanted to Know About Municipal Advisors – Part 3 of 3

Everything You Wanted to Know About Municipal Advisors – Part 3 of 3

September 24, 2021

This is the third article in a three-part series about municipal advisory services where we answer frequently asked questions about our profession. To read the previous articles, go to Part 1 and Part 2 of the series.

What can I expect when speaking with a Municipal Advisor?

A municipal advisor will need to understand your agency’s fiscal situation and policy priorities and objectives, as well as the financing needs that you are looking to address. It is best to outline any challenges early on, so that appropriate steps could be identified to correct or mitigate the issues. A good municipal advisor will help you uncover multiple financing strategies and select the ones that are most appropriate for your specific situation and circumstances. You should expect a comprehensive assessment of your financing needs that goes beyond your current project and includes a review of your outstanding debt obligations and pension liabilities to identify possible refinancing opportunities.

How are municipal advisors regulated?

The Municipal Securities Rulemaking Board (MSRB), a self-regulatory organization created under the Securities Acts Amendments of 1975 with the mission to protect and strengthen the municipal bond market, sets the regulatory rules for municipal advisors. The Securities and Exchange Commission (SEC) enforces the rules that municipal advisors are subject to. Each municipal advisor representative must pass a Series 50 examination which ensures a basic level of professional preparedness for professionals rendering financial and securities advice to public agencies. At least one professional within each municipal advisor firm must pass a Series 54 examination to act as the municipal advisor principal. Municipal advisors are subject to strict reporting and compliance rules and oversight.

At what amount of financing request should I consult with a Municipal Advisor?

A municipal advisor can help you with financing of any size, from a $500,000 fire engine acquisition to a water-treatment facility project that costs hundreds of millions of dollars and everything in-between. Issuance of municipal debt is a complicated and heavily regulated process. Engaging a municipal advisor early will help to ensure regulatory compliance, obtain best financing terms and lowest interest rates, save time, and improve the fiscal resiliency of your agency. As a fiduciary acting in your agency's best interest, a municipal advisor helps making the complex process of issuing municipal bonds or obtaining privately placed bank financing less daunting and more simple, because small details often make a big difference.

Ridgeline Municipal Strategies, LLC is a municipal advisory and financial consulting firm helping cities, water and wastewater agencies, and fire districts in California with financial planning and financing for infrastructure, facilities, and equipment.