Kosmont Financial Services Submitted on
March 5, 2025
REQUEST FOR QUALIFICATIONS
LAND-SECURED FINANCING SERVICES
Prepared For
CITY OF LA QUINTA
Prepared By
Kosmont Financial Services
1601 N. Sepulveda Blvd. #382
Manhattan Beach, CA 90266
(424) 297-1073
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmontFinancial.com
TABLE OF CONTENTS SECTION 2.
UAL REFINANCING
KOSMONT FINANCIAL SERVICES
Statement of Qualifications TABLE OF CONTENTS
SECTION 1. COVER LETTER ........................................................................................................ 3
SECTION 1A. FIRM BACKGROUND, QUALS, & EXPERIENCE ................................ 5
SECTION 2. REFERENCE............................................................................................................. 10
SECTION 3. PRICING LIST / FEE SCHEDULE......................................................................... 15
SECTION 4. COMPLIMENTARY SERVICES............................................................................. 17
SECTION 5. STAFFING AND PROJECT ORGANIZATION ................................................... 19
SECTION 6. SUBCONTRACTING SERVICES .......................................................................... 25
SECTION 7. DISCLOSURE ........................................................................................................... 27
SECTION 8. EXPLANATION OF METHODOLOGY ................................................................. 29
SECTION 9. NON-COLLUSION AFFIDAVIT ............................................................................. 38
Kosmont Financial Services
Mailing Address: 1601 N Sepulveda Blvd, #382 (424) 297-1073 Physical Address: 2301 Rosecrans Avenue
Manhattan Beach, CA 90266 www.KosmontFinancial.com Suite 4140, El Segundo, CA 90245
Kosmont Financial Services is an Independent Registered Municipal Advisor with the SEC and the MSRB.
March 5, 2025
Rosemary Hallick
Principal Management Analyst
City of La Quinta
78495 Calle Tampico
La Quinta, CA 92253
Re: Request for Qualifications (“RFQ”) for Land-Secured Financing Services
Dear Ms. Hallick:
Thank you for the opportunity to submit the attached Statement of Qualifications to provide Land-Secured
Financing Services to the City of La Quinta (the “City”).
Kosmont (“Kosmont”) was originally founded in 1986 and is now comprised of three independent and
affiliated firms: Kosmont Transactions Services, Inc. doing business as Kosmont Financial Services (“KFS”),
Kosmont Companies (“KC”), and Kosmont Realty (“KR”). As organized, the Kosmont Team enables a full-
service approach to our local government clients which, in addition to public finance, includes economic
development and real estate transactional expertise. Over nearly four decades of service, Kosmont has
established an award-winning track record of working with cities, counties, and other public agencies on
infrastructure funding, economic development, market / financial / fiscal analyses, site development
feasibility, market-rate/affordable housing, business / industry attraction, and real estate project advisory.
Kosmont Financial Services is an Independent Registered Municipal Advisor (“IRMA”) in good standing with
the Securities and Exchange Commission (“SEC”) and the Municipal Securities Rulemaking Board (“MSRB”)
and is a certified Minority Business Enterprise (“MBE”). KFS is not a broker/dealer and does not conduct
securities underwriting business activities, at all.
Kosmont is staffed with 20 professionals, five (5) of whom are registered Municipal Advisor representatives
(Series 50) with two (2) of those also qualified as Municipal Advisor Principals (Series 54). Kosmont is
headquartered in El Segundo, CA and the Project Manager is based out of Tustin, CA. Based on Kosmont’s 38+
years of providing advice to the public sector, we are confident that the experience and practical insights of
our senior personnel are unrivalled by our competitors.
We are unique among our competitors for the following primary reasons:
1. Land-Secured Financing Expertise: Julio Morales, the Project Manager, has extensive experience in land-
secured financing, having worked on ~50 land-secured/assessment district deals totaling $2 billion in
addition to over $10 billion in financings over 30 years of public financing experience. He is also the
financial advisor to the newly formed CEDA BAND program, a conduit financer to Community Financing
Districts (CFDs) and Enhanced Infrastructure Financing Districts (EIFDs) (see Section 8 for additional
information). Kosmont is a leader in EIFD development, having advised on transactions exceeding $2
billion. Unlike other municipal advisors, we specialize in economic development and real estate-based
SECTION 1.
COVER LETTER
City of La Quinta
Municipal Advisory Services
March 5, 2025
Kosmont Financial Services
(424) 297-1073
www.KosmontFinancial.com
solutions. We understand how to leverage CFDs with EIFD mechanisms or additional sources of funding,
utilizing our real estate expertise to structure innovative solutions.
2. Real Estate Expertise: Kosmont personnel are knowledgeable on Surplus Land Act processes and have
transaction expertise in multiple project types including but not limited to industrial, technology projects,
bio-science, transit-oriented, blended and mixed-use development, retail, hotel, residential, as well as
affordable housing project and funding requirements.
3. Economic Development Expertise: KFS understands the intricacies of special financing districts (EIFDs,
CRDs, CFDs, ADs) and has extensive experience in implementing these districts for economic
development strategies / projects.
KFS’ senior personnel who will oversee and manage the advisory and consulting services provided to the City
will consist of Larry Kosmont and Julio Morales. In addition to over 38 years of experience running Kosmont,
Mr. Kosmont is a former city manager of Bell Gardens and Montebello, as well as executive director of the
former Burbank Redevelopment Agency. He has worked on hundreds of real estate and financing transactions
for various cities and public agencies where he has assisted with establishing and implementing economic,
real estate and financing goals, policies, and objectives.
Julio Morales will be the project manager and day-to-day contact for the City. Mr. Morales previously worked
on Community Financing Districts (CFDs) for Eastern Municipal Water District, Rancho California Water
District, the City of Irvine, and the City of Anaheim, including Anaheim Platinum Triangle.
Mr. Morales is also the financial advisor for the CEDA BAND program. In 2006, the California Association for
Local Economic Development (CALED), the premier statewide professional economic development
organization, established the California Enterprise Development Authority (CEDA) to address gaps in
economic development financing. Since its founding, CEDA has worked on roughly 360 transactions and
financed over $6.1 billion. CEDA has developed its Bonds Assisting New Development or “BAND” Financing
Program for local agencies to easily finance public improvements through CEDA.
We trust the attached proposal demonstrates the Kosmont Team’s extensive expertise and experience in
devising tailored, forward-looking solutions that align with the City’s overarching goals and objectives. KFS
hereby acknowledges that we have read, understood, and will fully comply with all terms and conditions
outlined in this RFP. We are confident our unique combination of technical analysis and practical, strategic
guidance positions us to best support the City of La Quinta with land-secured financing services.
Kosmont affirms that all information and pricing provided in this proposal shall remain valid for a minimum of
ninety (90) days. Furthermore, Kosmont confirms that any individual who will perform work for the City is free
of any conflict of interest.
We are enthusiastic, ready, and available to get started as soon as needed!
Sincerely,
Larry J. Kosmont, CRE®, President
Cell: (213) 507-9000
Email: LKosmont@Kosmont.com
SECTION 1A.
FIRM BACKGROUND,
QUALS, EXPERIENCE
SECTION 1A.
FIRM BACKGROUND,
QUALS, EXPERIENCE
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmotFinancial.com
6
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
SECTION 1A.
FIRM BACKGROUND
Kosmont Financial Services (“KFS”) is one of three integrated firms (Kosmont Financial Services, Kosmont Realty,
and Kosmont Companies, collectively referred to as “Kosmont”) that have been advising clients for over 38 years.
Dedicated to the pursuit of local public policy objectives of our clients, each firm provides a unique,
comprehensive, and fully integrated set of services to public agencies and private entities that conduct business
within the nexus of public finance, land use, real estate, and economic development.
Kosmont Financial Services
Kosmont Financial Services is the tradename of Kosmont Transactions Services, Inc., which is incorporated in the
State of California. KFS is a regional firm with a strong local presence in Los Angeles County, headquartered in El
Segundo, California and currently works with numerous public agency clients throughout the State. KFS is wholly
owned by Larry J. Kosmont, is a certified Minority Business Enterprise (“MBE”), and is an Independent Registered
Municipal Advisor (“IRMA”) with the Securities and Exchange Commission (“SEC”) (SEC file number: 867‐02452)
and the Municipal Securities Rulemaking Board (“MSRB”) (MSRB ID: K1256) that is in good standing with all
applicable federal and State regulatory authorities.
KFS specializes in and focuses on providing municipal advisory and consulting services related to the issuance of
municipal securities. KFS obtained its Municipal Advisory credentials so that the entire Kosmont Team of
KOSMONT TRANSACTION SERVICES DBA KOSMONT FINANCIAL SERVICES
Corporation formed in CA on 01/24/2019 - Experience: 38+ years – 10 Staff
Physical/Headquarters: 2301 Rosecrans Avenue, Suite 4140, El Segundo, CA 90245
Mailing: 1601 N. Sepulveda Blvd. #382, Manhattan Beach, CA 90266
KFS provides services to clients across the Western U.S. in-person and from the
El Segundo headquarters.
FIRM OVERVIEW
SECTION 1A.
FIRM BACKGROUND,
QUALS, EXPERIENCE
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmotFinancial.com
7
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
SECTION 1A.
FIRM BACKGROUND
companies can deliver a full breadth of services to assist multiple types of public agencies with reaching their
public infrastructure, economic development, and land use goals.
KFS has five (5) accredited Municipal Advisor Professionals on staff (two of whom are Municipal Advisory
Principals) and is uniquely qualified to provide our clients with a wide variety of Municipal Advisory services in
addition to enhanced and expanded services that serve to integrate a public agency’s broader policy goals on a
holistic level across all departments.
Kosmont Companies
Kosmont Companies has been a leader in economic development for over 38 years, working with each client to
gain an understanding of their policy goals and objectives and to help them define and develop a vision for their
proposed project/property/parcel. Our firm analyzes economic benefits, such as job creation, wage impacts, and
total economic output from both temporary construction activity and on an ongoing basis, including direct,
indirect, and induced (multiplier) impacts of a project.
Kosmont has worked on hundreds of economic development, retail, and real estate projects. As a result, our
industry knowledge, insights, and contacts are unrivaled. Kosmont provides the following analytical services
needed to assist in the decision-making and implementation process, including:
• Economic Development Strategies / Plans
• Fiscal Impact / Economic Benefit Studies
• Market & Feasibility Analysis
• Project Funding / Financing Strategies (TIF, EIFDs, CRIAs)
• Public / Private Transactions (Structuring / Negotiation / Entitlements)
• Developer Selection RFQ/RFP & ENA/DDA
• Kosmont Retail NOW!® (Trends / Analytics / Recruitment)
• Retail Predictive Intelligence (A.I.)
Kosmont pairs its financial and analytical expertise with knowledge of the real estate markets and key players to
facilitate real estate transactions needed to implement desired projects.
Kosmont Realty
Kosmont staff are leading industry experts on the Surplus Land Act (“SLA”) and fully understand its impact on
cities. As a result, our firm is able to help public agencies get through and comply with the SLA process and assist
with the implementation of real estate-based needs:
• Real estate market analysis
• Zoning & implementation strategies
• Developer/buyer selection
• Assistance with negotiation of Ground Leases and identifying tenants
• RDA Dissolution and Asset Management Plans
• Selection assistance for development, planning, architectural and other professional services
Kosmont Realty also provides Public Asset Valuation for municipal bond lease-backed transactions, which have
proven to be quite valuable to our clients and well received by bond lawyers, rating agencies and bond insurers.
SECTION 1A.
FIRM BACKGROUND,
QUALS, EXPERIENCE
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmotFinancial.com
8
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
SECTION 1A.
FIRM BACKGROUND
We know of no other integrated set of companies that can provide such comprehensive and integrated
Municipal Advisory, real estate/land use advisory, and economic development services to the City.
DEBT AND ISSUANCE MANAGEMENT
KFS is an IRMA and is not affiliated in any way with a broker/dealer. As an IRMA, KFS has a duty of care and loyalty
to the City and has a fiduciary obligation to provide advice and conduct Municipal Advisory Activities in a manner
that is in the City’s best interests, not ours or those of any other party.
Our primary activities when assisting clients with a public finance transaction generally include the following:
• Design debt structures, analyze capacity, evaluate refunding/restructuring opportunities, recommend
lien structure alternatives, identify opportunities to develop and leverage new revenue streams
• Execute complex fixed and variable rate capital market transactions
• Manage credit rating process: assist in strategy & negotiations, design & create informational material
and build presentations to bond insurance companies and rating agencies, and coach speakers
• Capitalize on credit enhancement opportunities
• Advise on market positioning, market timing, and assist with investor development
• Drive issuance process and coordinate work of bankers, attorneys, and other advisor
QUANTITATIVE ANALYSIS
• Bond sizing
• Bond structuring
• Cash defeasance analysis
• Cash-flow projections
• Debt service coverage analysis
• Escrow restructuring
• Project fund draw analysis
• Project fund earnings analysis
• Refunding analysis
• Reserve fund analysis
• Synthetic refunding analysis
• Tax/assessment capacity analysis
• Yield reduction calculations / analysis
KFS GENERAL SERVICES
DEBT
MANAGEMENT
POST-SALE
COMPLIANCE
TRANSACTION
MANAGEMENT
QUANTITATIVE
ANALYSIS
P3 &
REAL ESTATE
SECTION 2.
UAL REFINANCING
SECTION 1A.
FIRM BACKGROUND
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmontFinancial.com
9
STRATEGIC FINANCIAL & FISCAL ANALYSIS
KFS’ strategic financial and fiscal analysis services are designed to provide the City with a comprehensive
understanding of its financial position and guide long-term decision-making. We focus on creating sustainable
financial strategies that align with the City's policy objectives, optimize fiscal resources, and ensure
compliance with industry standards. Our expertise helps the City navigate complex financial structures,
identify new funding opportunities, and evaluate the financial implications of major projects. By offering both
detailed analysis and strategic recommendations, we support the City in achieving its fiscal goals while
maintaining transparency and financial stability.
Key activities include:
• Quantitative Analysis & Reporting: Perform financial modeling, sensitivity analysis, & written reports.
• Capital Improvement Program Review: Ensure alignment with the City’s policy goals and objectives.
• Fiscal Impact Assessment: Evaluate fiscal revenues, expenditures, and long-term financial impacts.
• Feasibility and Cash Flow Analysis: Review feasibility studies and develop cash flow forecasts.
• Funding Sources Identification: Pursue alternative funding sources, financing structures, and/or tools
including grants
• Bond Issuance Assistance: Support public/private bonds, lease financing, and tax revenue pledges.
• Public-Private Partnership (P3) Transactions: Structure and negotiate P3 transactions.
• Real Estate Valuation Services: Provide Broker Opinion of Value (BOV) and other real estate services.
TRANSACTION MANAGEMENT & PRICING EVALUATION
In evaluating an underwriter’s performance in pricing municipal bonds, it’s essential to focus on more than
just the lowest fees. The key is determining whether the underwriter understands the credit of the underlying
security and has relevant experience. We also assess the credibility of indicative pricing spreads and review
post-pricing trading performance to ensure no unusual price fluctuations.
Once an underwriter is selected, we work to create an environment that helps attract a broad investor base,
enabling the City’s bonds to be priced at the lowest possible yields. This involves:
• Ensuring the correct yield curve (e.g., early, mid, or late AAA MMD) is used, which is especially critical
during periods of a steep yield curve.
• Requiring “investor read sheets” prior to pricing and providing real-time access to detailed
information on order flow, including specific investor names. This helps assess whether price
adjustments are needed and ensures the order book aligns with the target investor range.
POST-SALE COMPLIANCE
After bond issuance, KFS will ensure the project and bond structure continue to meet all legal and regulatory
requirements. Post-sale compliance primarily centers on monitoring the use of proceeds, adhering to tax-
exempt or taxable bond regulations (as applicable), fulfilling ongoing disclosure obligations, and timely making
all required filings and reports.
SECTION 2.
REFERENCES
SECTION 2.
UAL REFINANCING
SECTION 2.
REFERENCES
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmontFinancial.com
11
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
REFERENCES, RELEVANT EXPERIENCE AND SELECT CASE STUDIES
The following select case studies highlight the specific skills available to the City from KFS. These are not
intended to be an all-inclusive representation of the clients we work with or the assignments/transactions that
we have completed.
Contact Person: Eric Scherer, Community Development Director /
escherer@cityoflaverne.org / (909) 596-8706
Dates of Service: 2015 – 2020
Staff Members: Larry Kosmont, Dan Massiello
Kosmont was retained by the City of La Verne to initiate an EIFD feasibility study for a multi-agency proposed
District that would help finance public infrastructure and encourage private investment for a variety for
commercial and mixed-use projects. The proposed project area is in a transit-oriented development (TOD)
area of the La Verne Old Town Specific Plan and surrounds a proposed Metro Gold Line Extension light rail
station. Anticipated infrastructure improvements include a range of first mile / last mile, pedestrian and
bicycle connectivity, roadway and other infrastructure projects. Kosmont’s work resulted in EIFD formation
by the City in October 2017 as the first EIFD in the County of Los Angeles and the six-county SCAG region.
After lengthy negotiations, the County of Los Angeles formally joined the district as a partner in January 2020,
committing 50% of its share of property tax increment to the district. La Verne represents the second EIFD
statewide involving a city and county partnership (after Placentia / Orange County).
[remainder of page left intentionally blank]
La Verne Crossings – Transit Oriented Development
CITY OF LA VERNE / COUNTY OF LOS ANGELES: EIFD Feasibility Analysis & Formation
SECTION 2.
UAL REFINANCING
SECTION 2.
REFERENCES
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmontFinancial.com
12
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
Contact Person: Jennifer Lampman, Director of Finance / jlampman@placentia.org / (714) 993-8229
Dates of Service: 2009 – Current Advisor
Staff Members: Larry Kosmont, Dan Massiello
Over the past several years, the City of Placentia (“City”) has retained
Kosmont for a variety of real estate advisory and planning services,
including fiscal impact studies, project/developer negotiations, public-
private transaction structuring, project due diligence, pro forma analyses
and highest-and-best-use, tax and other economic analyses.
KC provided PMP and real estate advisory services to the Successor
Agency to the former Redevelopment Agency of the City of Placentia
(Successor Agency) in an effort to help productively advance and
ultimately secure approval of the disposition of the Successor Agency’s
property to provide public parking to support the City’s downtown
businesses and provide necessary supportive infrastructure for a new
Metrolink Station.
The proposed $34 million Metrolink Station project will serve the City and surrounding region and become a
catalyst in job creation, economic development growth and activity, and installation of critical public
infrastructure to meet state and regional transportation goals and needs in the North Orange County area. KC
aided the Successor Agency with advisory assistance to help develop and execute a preferred real estate
disposition strategy/approach, assisted with CA Department of Finance negotiations, and prepared a Broker
Opinion of Value (BOV) to substantiate current market value for the approval and successful disposition of the
subject property.
$52,950,000 Lease Revenue Bonds, Series 2020A (Federally Taxable)
KFS’ combination of real estate and public finance expertise truly came together on the assignment for the
City of Placentia. Placentia had a large unfunded accrued liability (“UAL”) with the California Public Employees’
Retirement System (“CalPERS”) that, per CalPERS policy, was being amortized at 7% interest. Placentia was
also emerging from a period of financial challenges and had been rebuilding its reserves, but it was facing
steep increases to its pension costs over the next 10 years that were being driven by the rapidly increasing
UAL amortization payments, threatening its ability to continue its financial recovery.
Thanks to the integrated operations of KFS and its affiliates, Kosmont Companies and Kosmont Realty, KFS
was able to devise a strategy where Placentia could lease and lease back a number of its park property assets
to support the proposed LRBs. Critical to this approach was the valuation of these assets and the acceptability
of this valuation by bond counsel, the rating agency, and investors. Kosmont Realty performed a
comprehensive real estate market analysis to determine the value of a portion of Placentia’s park assets (but
not all of them, which was also critical to our client) that was adequate to support the size of the LRBs.
CITY OF PLACENTIA: MA Services, Financing District Formation, and Real Estate Advisory
SECTION 2.
UAL REFINANCING
SECTION 2.
REFERENCES
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmontFinancial.com
13
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
Contact Person: Steve Pinkerton, City Manager / spinkerton@sjgov.gov / (209) 639-3313
Dates of Service: 2020 – Present
Staff Members: Larry Kosmont, Dan Massiello
$128,625,000 Utility Systems Revenue Bonds, Series 2020A & B
The City of Mountain House (the “District”) (formerly know. as Mountain House Community Services District,
the “District” herein), is a master-planned community formed to provide streets, water, sewer, storm drain
and other services that is approximately halfway through its planned build out. KFS has been its municipal
advisor, and Kosmont Companies has been its land use/rezoning/impact fee consultant since 2019. The case
study below was supported by impact fee projections provided by Kosmont Companies whereby we were able
to implement the strategies we developed and successfully market the bonds by illustrating how new homes
would come online and how the impact fee collections would translate into alternative funding sources for
the District as a whole, providing a holistic overview for credit rating agencies and bond investors. The case
study is more of a focus on the utility fee pledge and the creative security structure KFS developed, but the
rating process and bond marketing benefitted substantially from our approach of providing integrated
services focusing on a holistic approach to benefit our clients’ overall financial and policy goals and objectives.
District residents pay monthly utility user fees which include a separate charge called the “Pledge Facility
Component” (PFC) that automatically increases by 2% per year. The PFC is a revenue stream dedicated solely
to paying the costs of utility infrastructure and may not be used for current operating expenses.
The master developer constructs water, wastewater and storm drain facilities and is to be reimbursed by the
District with the PFC. Unreimbursed costs for these systems accrue as a debt (the “Developer Note”) which is
charged a variable interest rate equal to the construction cost index. To accommodate planned future growth,
newly installed facilities are generally “oversized” relative to the number of current users, leading to a deficit
of PFC revenues available to pay for the systems as the come online.
Given the low-interest rate environment in 2020, the District was motivated to pay down as much of the
Developer Note as possible to lock in low rates. However, bonds previously issued by the District contained a
restrictive additional bonds test (ABT) that did not allow the District to capture the built in 2% future increases
to the PFC, severely limiting its debt issuance capacity. Additionally, the rating agency had recently
downgraded the District’s bonds because of a perception that operating user fees – which were not pledged
to the bonds – were too low. In order to overcome these two major obstacles, KFS devised a multi-faceted
approach that both enabled the capture of the scheduled 2% PFC rate increases and shored up the perceived
weaknesses in the District’s financial operations.
First, KFS devised a new formula for capturing the 2% PFC rate increases by creating a concept known as
“billable units”. The use of Billable Units to calculate available PFC revenues enabled the capture of the built-
in 2% annual PFC increase. This new ABT dramatically increased the amount of bonding capacity of the District.
Second, we advised the District to request a preliminary credit analysis before applying for the actual bond
rating, which enabled KFS and the finance team to get feedback from the rating agency to understand how
they were analyzing the District’s credit. The major issue the rating agency revealed to us was that because
the utilities did not generate positive operating income from user fees (the District had a policy in place to
CITY OF MOUNTAIN HOUSE Municipal Advisory Services, Financing District Formation, Economic Development
Consulting; Real Estate/Land Use Advisory
SECTION 2.
UAL REFINANCING
SECTION 2.
REFERENCES
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmontFinancial.com
14
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
subsidize the utilizes with the general fund), they believed the utilities could not effectively build up reserves,
thereby threatening their existence. While KFS believes this to be a somewhat myopic view of the strength of
the PFC pledge, nevertheless we were then able to understand the confines we were working with. KFS
designed certain covenants that were added to the new bonds to enable the buildup of operating reserves
over time, directly addressing the rating agency’s credit concerns.
In what was nothing short of a tremendous success, the District’s bonds received a rating upgrade which in
turn qualified the 2020 Bonds for bond insurance, significantly increasing proceeds, enabling the pay down of
a large portion of the variable rate debt.
This structure also set the stage for another rating increase when the District again sold its $42,775,000 Utility
Systems Revenue Bonds, Subordinate Series 2023, locking in low rates for the District’s (now City’s) utility
customers
Other Engagements: KFS and Kosmont Companies provided integrated services in 2021 when the District
issued $49,640,000 Lease Revenue Bonds, 2021 that received a rating of AA. The complicated Transportation
Impact Fee assessment process created a disincentive for developers to start their projects due to the way
the impact fees would be reimbursed for regional infrastructure requirements. Kosmont devised a solution to
have the City prefund certain impact fees by issuing its Lease Revenue Bonds, thereby kickstarting stalled
development and clearing the way for additional infrastructure to come online sooner.
In addition, KFS recently completed assisting the District with the establishment of its first Community
Facilities District, Mountain House CFD No. 2024-1, with a bond authorization of $1.831 billion. The CFD will
facilitate local amenity (parks) and transportation infrastructure, which is also subject to the byzantine impact
fee process established over 40 years ago. Working together, the Kosmont consulting and MA teams have
been able identify and target specific areas impacted by the impact fee process and create an alternative
process whereby a CFD will provide funding for infrastructure and the impact fees will reimburse costs
previously borne by other developers, also relieving a backlog of development. The unique approach will
facilitate the delivery of long delayed infrastructure the residents have been promised for over a decade. The
City plans to issue its first tranche of bonds against the $1.87 billion authorization this fall and KFS will be the
Municipal Advisor.
[remainder of page intentionally left blank]
SECTION 3.
FEE SCHEDULE
SECTION 3.
FEE SCHEDULE
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmotFinancial.com
16
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
SECTION 3.
FEE SCHEDULE
Professional Consulting (Hourly) Services
Should the City wish to engage KFS on an ongoing basis not tied to a specific or planned financing, KFS can be
compensated on a “time and materials” basis for non-contingent, professional consulting services in accordance
with the schedule below. There is no requirement for the payment of an up-front retainer, and invoices for
services will be sent monthly.
President & CEO $525.00/hour
Sr. Managing Director / Sr. Vice President / Senior Advisor $395.00/hour
Vice President $295.00/hour
Senior Project Analyst $205.00/hour
Project Analyst / Project Research $195.00/hour
Assistant Project Analyst / Assistant Project Manager $165.00/hour
Project Promotion/Graphics/GIS Mapping Services $ 95.00/hour
Clerical Support $ 80.00/hour
• Additional Expenses
In addition to professional services (labor fees):
1) An administrative fee for in-house copy, fax, phone, postage costs, digital/technological support and
related administrative expenses will be charged, which will be computed at four percent (4.0 %) of
monthly Kosmont Financial Services professional service fees incurred; plus
2) Out-of-pocket expenditures, such as travel and mileage, professional printing, and delivery charges for
messenger and overnight packages will be charged at cost.
3) Project/Market data sources for support of evaluation and analysis e.g., ESRI, CoStar/STR, IMPLAN,
ParcelQuest, Refinitiv and other based on quoted project cost.
4) If Kosmont retains Third Party Vendor(s) for Client (with Client’s advance approval), fees and cost will be
billed to Client at 1.1X (times) fees and costs.
5) Consultant’s attendance or participation at any public meeting, whether such participation is in
person, digital, video and/or telephonic (e.g., City Council, Planning Commission, Public Agency Board,
other) requested by Client and are beyond those specifically identified in the Scope of Work will be billed
at the professional services (hourly) fees as shown on this Attachment A.
• Charges for Court/Deposition/Expert Witness-Related Appearances
Court-related (non-preparation) activities, such as court appearances, depositions, mediation, arbitration,
dispute resolution and other expert witness activities, will be charged at a court rate of 1.5 times scheduled
rates, with a 4-hour minimum.
Rates shall remain in effect until December 31, 2025.
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmotFinancial.com
17
SECTION 4:
COMPLEMENTARY
SERVICES
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmotFinancial.com
18
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
SECTION 4.
COMPLEMENTARY
SERVICES
SECTION 4. List of Complimentary Services Offered by Submitter along with Corresponding Prices
District Formation Services
KFS fees for district formation will be billed on an hourly basis as outlined in Section 3. Fee Schedule
Professional Transactional Securities Issuance Services
KFS’ base fee is $35,000 for the issuance of any securities (e.g. publicly offered, privately placed, public/private
partnership agreements) where KFS is compensated out of transaction proceeds. Fees for specific securities
issuance transactions will be negotiated on a case-by-case basis and are generally determined based on the size
and complexity of each issue and are payable only after the adoption of the requisite authorizing resolution(s) or
execution of other mutual agreements as may be applicable or appropriate. In circumstances where K FS is
engaged to execute a specific transaction on behalf of the City, there is no retainer or up-front compensation
required. The City will not be charged or expected to pay any fees to KFS before KFS receives the City’s express,
written authorization for services under an appropriate and applicable form of agreement, and such fees will only
be payable upon the successful closing of a transaction.
KFS anticipates the following range of fees for a bond issuance (final structure yet to be determined) and to be
dependent upon various factors such as credit rating, market factors, and complexity:
Par Value Investment Grade Non-Rated (CFD)
$5-10 Million $35,000 $45,000
$10-$20 Million $45,000 $55,000
$20-$30 Million $55,000 $65,000
$30-$50 Million $65,000 $75,000
$50 Million+ $75,000+ $85,000+
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmotFinancial.com
19
SECTION C.
MEET THE TEAM
SECTION 5.
STAFFING & PROJECT
ORGANIZATION
SECTION 2.
UAL REFINANCING
SECTION 5.
STAFFING
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmontFinancial.com
20
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
If selected, Larry Kosmont, CEO and President, will provide executive management and oversight for this
financing and Julio Morales, Senior Managing Director, will serve as the Project Manager, overseeing day-to-
day operational activities. Additionally, Dan Massiello, Senior Managing Director with KFS, will provide
advisory support as needed. Adria Stauber, Project Analyst, will provide quantitative and analytical support.
Below please find brief descriptions of our team’s experience followed by brief resumes of our proposed
Project Team.
• Mr. Larry J. Kosmont, KFS Chairman and CEO, brings 40+ years of experience encompassing public/private
financial structuring, negotiation, development, and management of real estate and public finance
transactions exceeding $10B. He has assisted hundreds of local government agencies in public finance and
real estate matters ranging from large-scale economic development programs to site-specific real estate
strategies and projects. He has guided over 1,000 private sector projects in obtaining public approvals,
structuring deal terms, and securing public/private financing. For this assignment, he will provide
executive oversight and strategic advisory support, including serving as an MSRB Series 50 registered
Municipal Advisor Professional and MSRB Series 54 Municipal Advisor Principal.
• Mr. Julio Morales, Senior Managing Director, specializes in pension/OPEB issues, P3 economic
development financings, and CFD/EIFD special district financing, drawing on over 30 years of experience
in corporate and public finance. During this time, he has worked on ~50 land-secured / assessment district
deals totaling $2 billion in addition to over $10 billion in financings. His background includes roles as City
Manager of Huntington Park, Finance Director of El Monte, and advisory positions at PFM, Urban Futures,
and Bank of America. He will oversee the Project from inception to completion, ensuring seamless day-to-
day management and coordination of the KFS team. Under his leadership, the Project will be delivered on
time and within budget, meeting the City’s objectives with precision and efficiency.
• Mr. Dan Massiello, KFS Sr. Managing Director. With over 30 years of experience as a Municipal Advisor
and an Investment Banker in the public securities industry, Mr. Massiello has successfully structured and
closed over 500 transactions totaling over $5 billion. His expertise spans a wide range of financing types,
including complex and unrated credits, enabling him to design marketable solutions that achieve clients’
financial goals. He will provide project technical support as necessary. including serving as an MSRB Series
50 registered Municipal Advisor Professional and MSRB Series 54 Municipal Advisor Principal.
• Ms. Adria Stauber, Project Analyst, has expertise in economic development and urban planning. She
brings 5+ years of experience serving public and private sector clients through market and economic
research, real estate development services, and economic development support. She also works closely
with senior personnel to acquire new business, conduct research for public agency clients & provide
overall project management support for a variety of project types. She will provide project qualitative,
quantitative and research support.
MEET THE TEAM
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmotFinancial.com
21
SECTION 2.
UAL REFINANCING
SECTION 5.
STAFFING
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
Larry J. Kosmont
Larry J. Kosmont, CRE®, President of Kosmont Financial Services. Mr. Kosmont’s
distinguished career encompasses public/private financial structuring and
implementation of real estate and public finance transactions. He has an extensive
track record as a public finance advisor and public/private real estate consultant.
Mr. Kosmont has assisted hundreds of local government agencies in public finance
and real estate matters ranging from large-scale economic development programs
to site-specific strategies and projects. Mr. Kosmont has successfully guided
numerous projects in the process of obtaining public approvals, structuring deal
terms, and securing capital and infrastructure financing supported by a variety of
pledged resources and underlying assets, ranging from taxes (lease revenues,
special tax, sales tax, tax increment, general obligation) to general fund operations
(certificates of participation) to project revenues (public/private-partnerships,
nonprofit, utilities, parking operations, and other).
He has served as District Manager, Interim District Administrator, Director of
Community Development, and Redevelopment Director in Montebello, Santa
Monica, Seal Beach, Bell Gardens, and Burbank.
LICENSES/AFFILIATIONS:
Mr. Kosmont is a Municipal Advisor Representative and Principal having achieved
the MSRB Series 50 and 54 professional qualifications and is duly registered with
the U.S. Securities and Exchange Commission. He is also a licensed real estate
broker in California (DRE No. 01182660), a designated Counselor of Real Estate, CRE®, and has served on or is
serving on the following boards and commissions:
• Pepperdine University, Graziadio School of Business – Board of Directors
• USC Executive Education – Board of Directors
• Westside Neighborhood School – Board of Directors
• State Commissioner – California Economic Development Commission
• Metropolitan Water District (MWD) - Board of Directors (represented City of Los Angeles)
• Commissioner, City of Los Angeles - Industrial Development Authority
• City of Manhattan Beach Economic Development Advisory Council – Chairman
• California Association of Local Economic Development (CALED) – Board Advisor
• Los Angeles Business Federation (BIZFED) – Board Member
AWARDS:
• Nominated as Commercial Real Estate Visionary: Trends, Updates and 2021
• Recipient of the California Business Properties Association (CBPA) Champion of the Industry Award
• Recipient of John H. Nail Award from League of CA Cities for State’s Outstanding Asst. City Manager
CONTACT INFO: Cell: (213) 507-9000; Email: LKosmont@Kosmont.com
Project Role:
Executive Oversight
Years with Kosmont: 38+
Years of Experience: 45+
Education:
M.A. Public
Administration, USC
B.A. Political Science,
SUNY Binghamton
PROJECT TEAM RESUMES
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmotFinancial.com
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SECTION 2.
UAL REFINANCING
SECTION 5.
STAFFING
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
Julio F. Morales
Mr. Julio F. Morales is a Senior Managing Director with KFS. He has extensive
experience in land-secured financing, having worked on ~50 land-secured /
assessment district deals totaling $2 billion in addition to over $10 billion in
financings. Mr. Morales has more than 30 years of broad-based corporate and
public finance experience, serving as a financial advisor at PFM, Urban Futures,
and Fieldman Rolapp, an investment banker with Bank of America, and
GIC/structured products provider for Transamerica. His public sector experience
includes serving as the City Manager to the City of Huntington Park, Finance
Director for the City of El Monte, as well as working for the City of Oakland and
Housing Authority of the City of LA (HACLA).
Prior to joining KFS, Mr. Morales provided pension/OPEB advisory services for over
45 clients, including 25 POB issues totaling over $2.5 billion. He worked abroad for
four years for the U.S. Treasury Department in the Office of Technical Assistance
(OTA), providing financial advice to the Treasurer of Paraguay.
LICENSES/AFFILIATIONS:
Mr. Morales is a Municipal Advisor Representative having achieved the MSRB
Series 50 professional qualification and is duly registered with the U.S. Securities
and Exchange Commission.
EDUCATION:
Mr. Morales earned his undergraduate degree from the University of Michigan, a Master of Public Policy from the
Harvard Kennedy School of Government, and an MBA from UCLA as a Dean’s Fellowship Recipient.
CONTACT INFO:
Cell: (626) 298-9583; Email: JMorales@KosmontFinancial.com
Project Role:
Project Manager
Years with Firm: 2+
Years of Experience: 30+
Education:
M.A. Public Policy,
Harvard Kennedy School
MBA, University of
California Los Angeles
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmotFinancial.com
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SECTION 2.
UAL REFINANCING
SECTION 5.
STAFFING
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
Dan Massiello
Dan Massiello, Senior Managing Director, has been head of the Public Finance
division of KFS since 2013 and also serves as the Chief Compliance Officer. Mr.
Massiello manages Municipal Advisory projects on a day-to-day basis as the
primary point of contact for various assignments. Mr. Massiello has over 30 years
of professional experience as both a Municipal Advisor and an Investment Banker
in the public securities industry. Throughout his career, Mr. Massiello has
successfully structured and closed over 500 new money and refunding
transactions totaling over $5 billion for multiple levels of local government–the
majority of which were for GO Bond issues–including cities, counties, school and
community college districts, redevelopment successor agencies and special
districts. Successfully completed transactions include obligations supported by a
wide array of pledged resources and underlying assets, ranging from taxes or
assessments (general obligation, tax increment, special tax, sales tax) to general
fund operations (certificates of participation, lease-leaseback/lease revenue) to
project revenues (nonprofit/conduit, public/private-partnerships (P3), utilities,
parking operations). In addition, a significant portion of Mr. Massiello’s successful
financings have provided capital for unrated and challenging credits, producing the
experience necessary to engineer well-structured and marketable financing
vehicles that consistently result in achieving clients’ financing goals and objectives.
Mr. Massiello’s Public Finance industry experience as both an investment banker and Municipal Advisor brings a
unique insight and enhanced perspective to successfully obtaining financing for the economic development and
public infrastructure projects that are the focus of KFS. Understanding the inner workings of an investment bank,
the demands of the investing public for a given financing structure, and the regulatory requirements of issuing
securities to raise capital enables Mr. Massiello to consistently achieve successful results for our public agency
clients while protecting their interests and assuring compliance with constantly evolving regulations.
LICENSES/AFFILIATIONS:
Mr. Massiello is a Municipal Advisor Representative and Principal having achieved the MSRB Series 50 and 54
professional qualifications and is duly registered with the U.S. Securities and Exchange Commission.
EDUCATION:
Mr. Massiello earned his B.S. in Management/Finance from the State University of New York-Binghamton and
previously held Series 24, 7, and 63 securities licenses while an investment banker.
CONTACT INFO:
Cell: (858) 220-3445; Email: dmassiello@Kosmont.com
Project Role:
Project Advisor
Years with Kosmont: 12
Years of Experience: 30+
Education:
B.S. Management/
Finance, SUNY
Binghamton
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmotFinancial.com
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SECTION 2.
UAL REFINANCING
SECTION 5.
STAFFING
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
Adria Stauber
Adria Stauber is a Project Analyst with KFS. Ms. Stauber works closely with senior
personnel to acquire new business, conduct research for public agency clients, and
provide overall project management support for a variety of project types. Ms.
Stauber has a background in affordable housing finance and development, urban
design for community betterment, and transportation program management. She
has facilitated public-private partnership building and worked alongside
stakeholders from the community to county level. Most recently she worked for
CTY Housing, a development and financial advisory services for affordable housing
developers, helping developers and public agencies determine the financial
feasibility of potential new projects, apply for competitive funding opportunities,
and manage project close outs.
LICENSES/AFFILIATIONS:
Ms. Stauber is a LEED Green Associate and member of ULI Los Angeles.
CONTACT INFO:
Cell: (650) 245-0227; Email: astauber@kosmontfinancial.com
[remainder of page intentionally left blank]
.
Project Role:
Research & Support
Years with Kosmont: 1
Years of Experience: 5+
Education:
M.A. Urban and Regional
Planning, UCLA
B.A. Public Health, UC
Berkeley
SECTION 6.
SUBCONTRACTING
SERVICES
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
SECTION 6.
SUBCONTRACTING
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
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SECTION 6. Subcontracting Services
Kosmont affirms that no portion of the Scope of Services will be subcontracted.
SECTION 7.
DISCLOSURES
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
SECTION 7.
DISCLOSURES
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmotFinancial.com
28
SECTION 7. Disclosures
Kosmont affirms that there is no negative history, including no alleged significant prior or ongoing agreement
failures, civil or criminal litigation, or investigations pending, nor any instance where Kosmont has been judged
guilty or liable within the last five (5) years
SECTION 7.
DISCLOSURES
SECTION 8.
EXPLANATION OF
METHODOLOGY
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
SECTION 8.
METHODOLOGY
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmotFinancial.com
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KFS has six (6) accredited Municipal Advisor Professionals on staff (two of whom – Larry Kosmont and Dan
Massiello – are Municipal Advisory Principals) and is uniquely qualified to provide our clients with a wide variety
of Municipal Advisory services. If selected, Julio Morales will serve as the Project Manager and oversee the project
from start to completion. He brings 30+ years of municipal advisory service experience to the team including
serving as a former City Manager and Finance Director. Mr. Morales previously worked on Community Financing
Districts (CFDs) for Eastern Municipal Water District, Rancho California Water District, the City of Irvine, and the
City of Anaheim. In over 30 years of experience, he has worked on ~50 land-secured / assessment district deals
totaling $2 billion in addition to over $10 billion in financings. Collectively, the project team has over 100 years of
experience encompassing public/private financial structuring, negotiation, development, and management of real
estate and public finance transactions exceeding $10B.
Kosmont holds a leadership position in the development and implementation of Enhanced Infrastructure
Financing Districts (EIFDs), having advised on transactions exceeding $2 billion in total project value. We
understand that any future development project should carefully incorporate EIFD mechanisms for
reimbursement or to enhance Community Facilities District (CFD) financing, and we bring the real estate expertise
necessary to structure these innovative solutions effectively. Our role as a true financing advisor extends beyond
traditional approaches; we excel in crafting and executing alternative financing structures that align with complex
deals, including the critical formation process for CFDs (see CFD Formation Process on the following page). In
addition, KFS serves as the municipal advisor for the CEDA BAND financing team.
In 2006, the California Association for Local Economic Development (CALED), the premier statewide professional
economic development organization, established the California Enterprise Development Authority (CEDA) to
address gaps in economic development financing. Since its founding, CEDA has worked on roughly 360
transactions and financed over $6.1 billion. CEDA has developed its Bonds Assisting New Development or “BAND”
Financing Program for local agencies to easily finance public improvements through CEDA. The various financing
districts available include:
• Community Facilities Districts (CFDs)
• Assessment Districts (ADs)
• Enhanced Infrastructure Financing Districts (EIFDs)
• Community Revitalization and Investment Authorities (CRIAs)
• Climate Resilience Districts (CRDs)
The BAND Financing Team is supported by dedicated, seasoned public finance professionals with extensive
experience in land-secured and tax increment bond financing. The BAND Financing Program provides a cost-
effective alternative to financing infrastructure projects by facilitating the formation process for the financing
districts, reducing administrative burdens on local agency staff and managing required post-sale compliance
reporting requirements for local agencies.
LAND SECURED FINANCING EXPERIENCE
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
SECTION 8.
METHODOLOGY
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmotFinancial.com
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KOSMONT FINANCIAL SERVICES
Statement of Qualifications
SECTION 8.
METHODOLOGY
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
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Community Facilities Districts (CFDs) - are an economic development tool that provide up-front financing for
public infrastructure improvements needed for new development areas. CFD Bonds are issued to provide funding
for services and facilities, which are repaid through an annual special tax (“Mello Roos Tax”) that is placed on the
annual property tax bill. To cover City expenses, the Developers can pay a deposit in lieu of Development Impact
Fees (“DIF”) or other City fees, which will be reimbursed upon issuance of the bonds.
Community Facilities Districts (CFDs) are a financing mechanism that allow landowners to impose special taxes on
their property to finance public facilities, infrastructure, and services. The formation of CFDs is governed by the
Mello-Roos Community Facilities Act of 1982 (Government Code §53311-53368.3) (the “Act”), named after the
sponsors of the authorizing legislation1.
CFDs are most often formed on undeveloped land, with a single landowner who is also the developer. If there are
less than 12 registered voters within the boundaries of the proposed CFD, Act requires a landowner election -
based on proportionate share of landownership. If there are more than 12 registered voters, then a registered
voter election is required. Formation of a CFD requires a 2/3 voter approval of the qualified voters.
Although CFDs can be formed via developer petition, the City has control over the formation process and
program guidelines.
Once established, CFDs can levy special taxes to support the issuance of tax-exempt (or taxable) bonds to pay for
or reimburse the developer for public infrastructure costs. The bonds are repaid by special taxes imposed on new
homes (paid by the property owner over 20-30 years), which are collected with property taxes.
The City can issue tax-exempt bonds on behalf of the CFD2. The bonds are repaid solely through special taxes
levied on the underlying properties. The City assumes no financial liability.
The primary advantage of CFDs for public agencies is that they facilitate development by helping to fund public
infrastructure up front, as opposed to waiting for fees to be collected as new homes are built. CFDs can allow for
the financing of a variety of public improvements (e.g., fire station, community center, parks, etc.) that are
required as part of a development agreement.
CFDs have several other advantages that make them a very effective tool:
1 The Act authorizes municipalities to form community facilities districts and levy a special tax to finance the purchase,
construction, expansion, improvement, or rehabilitation of public infrastructure projects, with an estimated useful life of five
years or longer and formation costs.
The Act also authorizes the formation of service or maintenance CFDs to pay for expanded or incremental services required
by the new development (i.e., police and fire; ambulance and paramedic; maintenance and lighting of parks, streets, roads;
flood and storm protection; storm drain services, etc.).
2 Property owned or irrevocably offered to a public agency are exempt from the special taxes. Property that receives a
welfare exemption pursuant to Revenue and Taxation Code Section 214(g) is exempt from the payment of the special tax.
COMMUNITY FACILITIES DISTRICT FORMATION PROCESS
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
SECTION 8.
METHODOLOGY
KOSMONT FINANCIAL SERVICES
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• CFDs can be repaid over a 20–30-year period, lowering the developer’s carrying costs during
construction.
• Landowners only carry the special tax liability during the construction and sales period, effectively
reducing the amount of bank/construction loans.
• Once a unit is sold /escrow closed, the new homeowners assume the special tax liability (on their
property tax bill), minimizing the costs of carry.
• CFDs can finance projects outside of district boundaries, such as school facilities, community centers,
park land, fire stations and/or other public infrastructure with a useful life of 5 years or more.
Public infrastructure constructed by a developer is subject to prevailing wage rates and local agency bidding
requirements.
There are four key sequential steps in the CFD process:
1. Local Goals & Policies - Program Development
2. CFD Formation
3. Bond Issuance
4. Post Issuance Compliance & Administration
We will outline below each step of the process.
The critical decisions for most financings are made during the planning phase. If a City has not issued CFDs
previously, it has the opportunity to thoughtfully establish “program parameters” prior the formation of its first
district.
CFDs require a significant amount of front-loaded work prior to commencing the formation process, which is
performed by four or five key members of the financing team. It is necessary to select the key financing team
members before you start the process, which includes:
• Municipal Advisor (Kosmont Financial Services);
• Bond Counsel (Best, Best & Krieger LLP);
• Special Tax Consultant (Willdan Financial Services);
• Underwriter (Raymond James)*optional.
Local Goals & Policies - Program Development
The City Council must adopt Local Goals and Policies prior to the formation of a City’s first CFD. These policies
govern the parameters by which all CFDs within the City will be established. In accordance with the requirements
set forth under the Act (Government Code Section 53312.7), the Local Goals and Policies must address the
following topics:
1. Eligible facilities and order of priority of financing
2. Bond financing parameters and credit quality (e.g., 3 to 1 value to lien)
3. Special Tax Rate established in the Rate & Method of Apportionment (RMA)3
3 The industry standard is a 2.0% aggregate property rate. This includes 1% base tax, plus any additional voter-approved
taxes such as GO bonds, special assessments, Mello Roos, school districts, water agencies, and all other taxes collected on
the property tax roll.
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Statement of Qualifications
SECTION 8.
METHODOLOGY
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4. Appraisal standards
5. Required Developer/Property Owner and Bond Disclosures
The policies should also address: the selection of consultants and underwriter, developer deposits and
reimbursements, use of an absorption study, credit enhancement/letters of credit, joint facilities agreements, and
exceptions to the policy.
When a City is contemplating establishing a new CFD program, our recommendation would be to form the initial
team, comprised of the Special Tax Consultant, Bond Counsel, and the Municipal Advisor to help the City develop
Local Goals and Policies that will serve in the City’s best interests.
The City will also need to determine whether it wants to build the infrastructure or acquire it from the developer,
in which case a reimbursement agreement will need to be drafted to outline the required steps, as well as whether
it will permit the financing of public infrastructure for other public agencies, such as a water district, in which case
joint communities facilities agreements (JCFAs) will need to be discussed.
Once these key policy decisions are determined, the City can commence the formation of each district and the
subsequent issuance of tax-exempt or taxable bonds to finance public improvements.
Pre-Formation Key Documents
CFDs are governed by several documents that must be developed prior to the formation process, which are
generally described below:
Landowner/Developer Deposit Agreement. The City and the developer and/or landowner typically enter into a
Landowner or Developer Deposit Agreement, which requires a deposit of monies to pay for the CFD formation
costs. These costs can be subsequently reimbursed from bond proceeds or special taxes.
Petition. Prior to the first City Council meeting on the formation of the CFD, the landowner, registered voters or
the City Council must submit a petition requesting that the City Council commence formation of the CFD. This can
be brought by 10% of the landowners or registered voters within the CFD or two City Council members.
Rate & Method of Apportionment - The special tax consultant prepares a report, which outlines the special tax
formula: the special tax rates, categories, and order of payment.
The RMA is developed to best capture the unique elements of the project. Special taxes can be levied on any
reasonable basis. There does not need to be a “benefit nexus” as in an Assessment District. In the majority of
cases, the special tax is based on square footage, acreage or road frontage; however, the tax cannot be based on
property values (ad valorem).
In the case of more complex mixed-use and commercial projects, the CFD might include a master CFD with
subsequent overlay districts or divided into multiple zones and categories of taxpayers.
The Act allows municipal services provided within the District to be funded by landowner-approved taxes.
However, such services must be “additional services” to those provided in the area (within District boundaries)
before the CFD was created, and these additional services must not supplant services already available. The
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
SECTION 8.
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“additional services” requirement can be met by supplementing existing services to meet increased demand, such
as additional police and fire costs.
Boundary Map – a map of the proposed district boundaries must be submitted to the City prior to the first City
Council meeting on the formation of the CFD.
There are six sequential steps in the CFD formation process:
1. Initiation – Petition and preparation of Landowner/Developer Deposit Agreement, RMA and boundary
map
2. Resolutions of Intention to Form CFD and Incur Bonded Indebtedness Meeting
3. Public Hearing – at least 30 less not more than 60 days after ROI
4. Resolution of Formation Meeting
5. Election – at least 90 not more than 180 days after ROF, if not waived
6. Approval of Ordinance
The CFD formation process typically takes 3 to 6 months, and a minimum of 3 City Council meetings. We have
attached a flow chart that summarizes the CFD formation process for your reference.
1st City Council Meeting: 1. CFD Initiation & 2. Resolutions of Intention (ROI) to Form CFD and Incur Bonded
Indebtedness Meeting
The first step in the process is to determine the following key information:
• List of facilities, services and fees to be financed
• Name of the CFD
• CFD Boundaries (map)
• Amount of the Annual Levy & Special Tax Report
• Local Goals & Policies for CFDs
• Rate & Method of Apportionment
This information is presented at the initial City Council meeting and formally adopted in the Resolution of Intention
(ROI). At this meeting, the City Council set the date for the Public Hearing. If the CFD is financing facilities through
the issuance of bonds, then the City will also adopt a Resolution Declaring Necessity to Issue Bonds. The
Resolution Declaring Necessity declares the necessity of the City to form the CFD to incur a bonded indebtedness
in a not-to-exceed amount for the purpose of financing the facilities and sets a meeting date for a special election
on the proposition of the CFD incurring a bonded indebtedness.
Public Hearing – A notice must be published (in a local paper or paper of general publication) at least 7 days prior
to the date of the public hearing. The RMA must be presented and made available for the public to comment.
2nd City Council Meeting: 3. Public Hearing, 4. Resolution of Formation Meeting, & 5. Election
CFD FORMATION PROCESS
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
SECTION 8.
METHODOLOGY
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At this City Council meeting, the City Council will hold a public hearing, approve the Resolution of Formation (ROF)
and Resolution Determining Necessity (if needed), conduct the election, approve the Resolution Declaring Election
Results, and read the Ordinance. The ROF formally adopts the CFD, approves the RMA, the types of services and
facilities to be financed, and the time/date of the election. If the CFD is financing facilities, then the City will also
adopt a Resolution Determining Necessity to Issue Bonds.
Election – The Act requires an election to be held at least 90 days but no more than 180 days after the approval
of the ROF. However, the time limit requirement may be waived if 100% of the qualified voters consent. In most
cases, the developer is the only landowner in the CFD so the 90 to 180 day wait time for the election is waived
and the election is held at the same meeting as the ROF approval.
In order to commence the election, the City Council will adopt a Resolution Calling the Election. The City Clerk will
then open the ballots and certify the results.
A 2/3 vote in favor is required to approve the formation of the CFD 4. If the election is successful, the City Council
will approve the Resolution Declaring the Election Results and the first reading of the Ordinance to Levy the Special
Tax.
After the election, the City must record the Notice of Special Tax Lien with the County, within 15 days of the
election.
3rd City Council Meeting: 6. Approval of Ordinance
At the next City Council meeting, the City Council conducts the second reading and approves the Ordinance to
Levy the Special Tax.
Once the CFD is formed, bonds can typically be issued within a 60 to 90-day timeframe. This timeline requires the
members of the financing team to be selected up front and work simultaneously on the RMA and legal and bond
documents.
If the financing team has already been assembled, preliminary work can commence on the drafting of bond legal
documents, acquisition agreement, joint communities facilities agreements (JCFAs), and the appraisal during the
CFD formation process.
4 If there are more than 12 registered voters that reside in the CFD, then a voter election is held (via regular or mailed ball ots).
If there are less than 12 registered voters or no tax on residential property, then a land -owner election is held. Votes are
allocated based on land area held within the CFD.
If the majority of the landowners or voters in the district protest, then the CFD formation process must be delayed by 1
year. If the protest is targeted toward a specific facility or service, then the specific item can be removed and the format ion
process may proceed without the 1 year delay.
BOND ISSUANCE PROCESS
KOSMONT FINANCIAL SERVICES
Statement of Qualifications
SECTION 8.
METHODOLOGY
KOSMONT FINANCIAL SERVICES
1601 N. Sepulveda Blvd., #382 I Manhattan Beach, CA 90266 I 424.297.1073
www.KosmotFinancial.com
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The issuance of CFD bonds requires an inter-related process between the developer, appraiser, and in certain
circumstances, an absorption consultant. The developer needs to provide the price points/square
footage/phasing information for the homes to the appraiser and absorption consultant in order to complete their
reports. The information in the appraisal reports (and absorption consultant report) is critical to the sale of the
bonds.
For most typical bond transactions, the financing team has 2-3 conference calls to review the bond structure, legal
documents, and preliminary official statement (POS) or offering statement. Once all the legal documents and POS
are in substantially final form, the financing team returns to the City Council for final approval of the sale of the
bonds.
4th City Council Meeting:
At the final City Council meeting, the City Council approves the Resolution to Issue Bonds. This resolution
authorizes the sale of bonds and establishes the terms for the issuance of bonds.
The City Council will be asked to approve the required legal and bond documents (i.e., Trust Indenture or Fiscal
Agent Agreement, Preliminary Official Statement (POS), Continuing Disclosure Certificate and the Bond Purchase
Agreement (BPA)).
After City Council approval, the bonds can be priced and sold.
CFD bonds are generally sold prior to build-out and consequently are issued as non-rated bonds. Nonetheless,
the capital markets typically required a minimum 3 to 1 value to lien ratio for the sale of bonds.
After the sale of bonds, the City is required to file annual reports with the California Debt and Investment
Advisory Commission (CDIAC) and the Municipal Securities Rulemaking Board (MSRB), as well as provide
arbitrage rebate compliance reports to the IRS every five years.
POST ISSUANCE COMPLIANCE & ADMIN
Page 7 of 7
ATTACHMENT 1
NON-COLLUSION AFFIDAVIT FORM
Must be executed by submitter and submitted with the presentation
I, ________________________________________ (name) hereby declare as follows:
I am _________________________________ of ______________________________,
(Title) (Company)
the party making the foregoing presentation, that the presentation is not made in the interest of, or on
behalf of, any undisclosed person, partnership, company, association, organization, or corporation; that
the presentation is genuine and not collusive or sham; that the submitter has not directly or indirectly
induced or solicited any other submitter to put in a false or sham presentation, and has not directly or
indirectly colluded, conspired, connived, or agreed with any submitter or anyone else to put in a sham
presentation, or that anyone shall refrain from proposing; that the submitter has not in any manner,
directly or indirectly, sought by agreement, communication, or conference with anyone to fix the
presentation price of the submitter or any other submitter, or to fix any overhead, profit, or cost element
of the presentation price, or of that of any other submitter, or to secure any advantage against the public
body awarding the agreement of anyone interested in the proposed agreement; that all statements
contained in the presentation are true; and, further, that the submitter has not, directly or indirectly,
submitted his or her presentation price or any breakdown thereof, or the contents thereof, or divulged
information or data relative hereto, or paid, and will not pay, any fee to any corporation, partnership,
company, association, organization, presentation depository, or to any member or agent thereof to
effectuate a collusive or sham presentation.
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and
correct.
Submitter Signature: __________________________________________________
Submitter Name: __________________________________________________
Submitter Title: __________________________________________________
Company Name: __________________________________________________
Address: __________________________________________________
Larry J Kosmont
President Kosmont Transactions Services, Inc., dba Kosmont Financial Services
Larry J. Kosmont
President
Kosmont Transactions Services, Inc., dba Kosmont Financial Services
1601 N Sepulveda Blvd., #382, Manhattan Beach, CA 90266