1. Independent Financial Feasibility Review
Program Status RCWs and
Buck Lucas, Program Manager Noreen Hoban, Management Analyst
September, 2017

2. Who’s talking? Buck Lucas Noreen Hoban
Bond Users Clearinghouse – indebtedness of the state and all local governments
Fiscal note analyst – Local government fiscal note program
Noreen Hoban
Contract and procurement management
MRSC Program Manager
25+ Years as High Tech Manager

3. What is a public facility district (PFD) financial feasibility review?
What, Why, Who and When
What is a public facility district (PFD) financial feasibility review?
Why does the review process exist?
What is the PFD feasibility review?
An independent review, not a study, of a given projects’ financial feasibility.
Why does the PFD feasibility review process exist?
In 2008, the Greater Wenatchee Regional Events Center Public Facilities District issued $42 million in three-year bond anticipation notes. The PFD was not able to refinance the notes into long-term bonds as originally intended and defaulted on the notes when they came due in December 2011.
Substitute Senate Bill 5984 (Chapter 4, Laws of 2012), signed into law on March 1, provided the jurisdictions involved in the default with new taxing authority to be able to repay the debt over time. The law also established a new “independent financial feasibility review” requirement related to PFDs.
The purpose of the review is to produce a public report that is timely and substantive to support the successful development of your projects.  Please remember that it is not our role to approve or reject a project, but rather to ensure objective analysis is performed specifically concerning financial feasibility for risk mitigation purposes.  Please contact us early on with any questions you may have on the feasibility review process. 

4. What is a public facility district (PFD) financial feasibility review?
What, Why, Who and When
What is a public facility district (PFD) financial feasibility review?
Why does the review process exist?
Why Commerce?
Who does the review?
Why Commerce?
The Commerce mission is to strengthen communities
The PFD feasibility review process is a community strengthening tool that seeks to enhance and promote sustainable community and economic vitality through sound financial decision making
Commerce is home to countless “muni-fi” [municipal finance] programs and supports local governments, businesses, and community-based organizations to achieve positive growth.
Who does the PFD feasibility review process include?
The review is conducted on: Public Facilities Districts
The review is conducted through: Commerce (we just met!)
The review is conducted by: Independent consultant
The review is conducted for: the PFD, participating partners, namely cities and counties, state officials (Governor, State Auditor, and State Treasurer), and the state Legislature.

5. What is a public facility district (PFD) financial feasibility review?
What, Why, Who and When
What is a public facility district (PFD) financial feasibility review?
Why does the review process exist?
Why Commerce?
Who does the review?
When is a review required?
Who pays for the review?
How long does it take?
When is a PFD feasibility review required?
Formation of a PFD
Issuance of any indebtedness, excluding refunds
The long-term lease, purchase, or development of a facility.
How will the review be paid for?
Cost about 0.1% of the total project or bond amount (range of $7,500 to $12,500 for a $10 million project)
Costs are borne by the PFD or local jurisdictions and rolled up, in aggregate, with the costs for the consultant to conduct the review.
Duration of Review
After the interlocal agreement signed between COM and PFD the procurement process begins for awarding a feasibility review. Normally completed within days.
Duration of review
Small projects – days
Large projects – Dependent on size, phases involved. e.g. WSCC expansion – Started 6/30/2015. Currently scheduled to complete on 6/30/2018.
Varies based on – Size of project, extent of prior preparation by PFD, availability of sufficient and appropriate materials to review, negotiation of interlocal agreement, and procurement of a qualified independent consultant.

6. How does the review process work?
PFD determines the right timing
Once initiated, Commerce requests documentation to scope review
PFD determines the right timing for a review
Too soon: there may not be enough detail to complete a substantive review
Too late: there may not be a good way to address risks identified by the review
Once a PFD initiates a request for review, Commerce will request documentation to scope the review
Consultant reviews PFD’s existing plans, including:
Feasibility studies conducted by or for the PFD
Governing documents (interagency agreements, bylaws, minutes etc.)
Bond covenant and statement
Legal agreements (contracts, ground leases, etc.)
Construction plans
Pro forma or other operating business plans
Other materials as needed
Notes: documentation may include:
PFD’s financials for the last 10 years, including to note tax revenues
Renovation / Construction budget and any relevant studies or plans associated with the project
Stress-Test / Worst Case Scenario: Pledged assets, noting tax revenues, for payment of debt service
If applicable, bond covenants and official statements

7. How does the review process work?
PFD determines the right timing
Once initiated, Commerce requests documentation to scope review
Develop interlocal agreement with PFD
Procure contractor for 3rd party review
Contractor role
Steps for report release
Develop interlocal agreement (ILA) with the PFD – 60 to 90 day timeline
Conduct contractor procurement process – 45 to 90 day timeline
The independent consultant will:
Determine, in consultation with Commerce and the PFD, whether sufficient information is available for review
Review financial feasibility and avenues of risk;
Develops draft report describing expected costs to the PFD and adequacy of revenues and expected revenues to meet those costs
Once the consultant’s first draft is complete, Commerce will evaluate the draft for compliance to the statute and the PFD will review for material errors or omissions
Consultant prepares the final version of the report
Commerce transmits the final report to the PFD, state officials, local stakeholders, and the public.

8. Commerce’s role is not to approve or reject a PFD’s plans
It’s YOUR decision
Commerce’s role is not to approve or reject a PFD’s plans
The review provides local decision makers with objective and timely analysis of the project’s financial feasibility
The review can help reduce project risks, and may help assure the community that the project is on the right track
Commerce’s role is not to approve or reject a PFD’s plans, nor to substitute its judgment for that of the PFD board.
Rather, the review is intended to ensure that local decision makers have access to objective and timely analysis of the financial feasibility of the project
The completed review can help reduce risks associated with a project, and may help assure the community that the project is on the right track

9. Case Studies Previous reviews
Lewis County – Event Center and Sports Complex, September 2012
Richland – Hanford Reach Interpretive Center, January 2013
Asotin – PFD Family Aquatic Center, June 2013
Spokane – Debt Issuance, February 2013
Spokane – Conference Center Expansion, May 2013

10. Case Studies Reviews in process
Seattle – State Convention Center Expansion, June 2018
Spokane – INB Performing Arts Center, October 2017

11. What we’ve learned . . .
Good financial statements create clarity and reduce costs
Communicate, communicate, communicate
We’re part of your team!

12. What PFDs need to know . . .
Contact Commerce early in your process
Assemble materials and staff
Ask questions

13. Public Facilities District Feasibility Review WebSite:
Resources
Public Facilities District Feasibility Review WebSite:

14. Presented by:
Buck Lucas Program Manager (360)
Noreen Hoban Research Management Analyst (360)