The Budget Committee of the Blount County Commission picked a financial advisor during their meeting Monday night. The firm must be approved by the full commission on Thursday, March 18, finance director Stephen Jennings said.
“They are the PFM Group. I’m working with the managing director who is in Memphis. They are a national firm, but they have local expertise,” he said. “They have the state of Tennessee as a client, and they work for the cities of Clarksville, Chattanooga, Memphis and Murfreesboro.”
Jennings said they are an independent financial advisor and don’t sell any products. “That’s what the budget committee was looking for first and foremost was independence and expertise around the state of Tennessee, knowing Tennessee and the constitutional guidelines and how the comptroller works,” he said.
The committee saw presentations by four firms last week and chose PFM on Monday.
“This is not an audit at all,” said Jennings. “It has never been intended to be an audit. When you have debt financing, and you have derivatives like Blount County has, the state comptroller’s guidelines -- now in draft form and coming in the near future -- state you must have an independent financial advisor,” he said. “That’s one of the reasons we’re ahead of the curve. There has been some misinformation and alarmist media coverage around the debt problem which led the Blount County mayor to suggest to the budget committee to get a financial advisor to look at the situation.”
Jennings said the firm will work on a $3,000 a quarter retainer. “They will charge us for advice for refinancing. We have a $46 million payment that we will be refinancing in the next fiscal year. They will be our financial advisor and will negotiate for us the best deal possible for that refinance and help us get the best deal possible for unwinding any swaps, if we choose to do that,” he said. “I’m not sure of the timing. It could be all in the second quarter and cost around $90,000 in fees to do all those activities - the refinancing, the unwinding of the derivatives.”