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Capital Markets Advisors, LLC
Strategic Consulting Group

Capital Markets Advisors, LLC (“CMA”) is an independent, SEC and MSRB-registered, Municipal Advisor serving the needs of public jurisdictions. In 2016, for the third year in a row, CMA was rank by Thomson Reuters as one of the ten most active municipal advisors in the nation. In addition to providing our clients with advice on capital and cash flow financings, CMA’s Strategic Consulting Group. Lead by Managing Director Margaret Guarino, assists its clients to prepare multi-year financial plans, annual budgets, develop strategies to deal with credit rating agencies and investors, identify and capitalize on additional revenue sources, secure banking and credit card services, securitize tax liens and other revenue streams and provide other services related to our clients’ financial affairs. Included in this experience is our work advising state control boards overseeing two of the largest county governments in New York State. Following are discussions of several of CMA’s Strategic Consulting Group’s ongoing assignments.

Erie County Fiscal Stability Authority, New York
In October 2006, following a rigorous RFP process, CMA was retained by the newly created Erie County Fiscal Stability Authority (“ECFSA”), which took over the debt issuing and oversight responsibilities of fiscally stressed Erie County, another of the largest counties in New York State. Following our appointment, CMA led the effort to secure the initial credit rating for ECFSA and subsequently assisted ECFSA in issuing both short-term notes and long-term bonds to finance the County’s myriad needs. In the ensuing years, ECFSA, with its Aa1/NR/AAA credit ratings, has been able to gain greater capital market access and obtain significantly lower interest rates than the A- rated Erie County, thus allowing the ECFSA to achieve its mandate of saving County residents millions of dollars in debt service costs. In fact, over the past 11 years, our efforts as Municipal Advisor to the ECFSA have saved the County taxpayers over $190 million in debt service savings and helped to identify several operational efficiencies.

US Virgin Islands Public Finance Authority
CMA has worked closely with the Department of Finance and the Budget Department of the United States Virgin Islands (the “USVI”) to develop a multi-year plan to close its structural budget gap and reduce its accumulated deficit. As part of this engagement, CMA outlined the implementation and execution of legislative, administrative and economic revenue enhancements and cost reductions totaling approximately $700 million over a five-year period. Following the presentation of its five-year plan, the USVI expanded CMA’s role to oversee the execution of initiatives detailed in the plan, as well as to update the plan semi-annually and utilize budget vs. actual and cash models to measure budgetary and liquidity performance on a periodic basis. In conjunction with the expanded assignment, CMA will conduct departmental reviews of the USVI’s governmental operations to further identify efficiencies and opportunities to increase revenues and decrease expenditures at the departmental level. In addition, CMA will develop and recommend strategies to assist each department to comply with expenditure reduction initiatives necessary to balance the budget.

CMA’s current responsibilities also include eliminating fragmentation of financial information between various departments, reviewing all contracts and leases between the USVI and third parties and making recommendations as deemed appropriate. CMA will also assist in preparing rating agency presentations, preparing staff for rating agency presentations and planning site visits with the goal of improving the USVI’s credit ratings and its relations with its rating agencies and investors.

Virgin Islands Port Authority
With the absence of a Chief Fiscal Officer for the Virgin Island Port Authority, Kenneth Mapp, Governor of the US Virgin Islands, together with the Authority’s CEO, requested that CMA review and analyze the Authority’s proposed 2018 operating budget prior to its submission to the Authority’s Board of Governors. Margaret Guarino, CMA Managing Director and Head of the firm’s Strategic Consulting Group and an Associate from the firm promptly met with the Authority’s financial staff in St. Thomas to review the proposed budget. Following its analysis, CMA’s determined that cuts to the proposed budget were needed in order to achieve a structurally balanced budget. CMA recommended a number of budget cuts as well as revenue enhancements that could be implemented in the future, to the Authority’s staff. A balanced budget was submitted to the Board of Governors following the implementation of a number of CMA’s recommendations.

Town of Islip, New York
CMA is in the process of developing an extensive five-year plan for the town of Islip, New York (estimated population 336,000), that will include analysis and impact of implemented and proposed initiatives, a review of government operations and structural reform, an analysis of departments and a plan to improve investor relations. During the departmental reviews, CMA discovered a backlog of building permits that had not been processed by the Town and represented over $20 million in uncollected revenue. Among other initiatives, CMA recommended hiring additional employees on a temporary basis to work through the backlog and capture the revenue. In 2016, CMA assisted the Town to achieve a rating of ‘Aaa’ from Moody’s by identifying operational efficiencies and additional revenue opportunities, preparing a credit rating presentation and preparing staff for a site visit with rating agency staff.

City of Poughkeepsie, New York
CMA has served as financial advisor to the City of Poughkeepsie since 2000. For several years the City has and continues to suffer dire financial conditions resulting in an accumulated deficit in the City’s General Fund of approximately $13.1 million, as of December 31, 2015. Despite showing signs of improvement in 2013 and 2014, the City recognized the need for outside assistance. The City Administrator engaged CMA to assist with the development of a strategic fiscal improvement plan aimed at reducing the current deficit position and reestablishing the City’s credit rating.

A comprehensive evaluation of the City commenced in June 2015 and concluded in December 2015. During that time, CMA staff conducted on-site interviews with City officials and gathered information on City operations. In addition, CMA accumulated data on comparable municipalities to compare and contrast with City metrics. Interviews and data were thoroughly analyzed and served as the basis for CMA’s Strategic Improvement Plan, which presented the findings of CMA’s evaluation and included various recommendations. In April 2016, CMA publicly presented the plan at a City Council meeting and discussed its contents in detail. CMA was recognized by the City for its work in the development of the plan and continued to work with the Mayor and his Administration in order to implement plan recommendations. Preliminary results for the City’s 2016 fiscal year show a surplus in the City’s General Fund.

To mitigate the cost associated with the development of the City of Poughkeepsie’s Strategic Improvement Plan, CMA identified two grant programs and wrote applications for each on behalf of the City. CMA’s grant submissions on behalf of the City were successful in obtaining awards to cover the full cost of the Plan. In addition, CMA determined that the City was eligible to apply for New York State assistance through a program intended to assist distressed municipalities. If approved for the program, a State Board will conduct a comprehensive review of the City’s operations and can offer grant funding of up to $5 million to implement any recommendations made. After several meetings with City officials, CMA submitted a formal application to the State, which was approved. The State and the Board completed its comprehensive review and in June 2017 and the City was awarded a $3 million grant as a result of CMA’s efforts. Such funds are not intended to be on-shot forms of revenue, but instead will offset implementation costs associated with specific initiatives which will result in long-term recurring financial benefits to the City.