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SR-800-001 (5) Council Meeting: September 13, 2005 Santa Monica, CA To: Mayor and City Council From: City Staff Subject: Professional Services Agreement with Palmer & Dodge, LLP for Legal Services Related to the Resolution of the Landing Fee Program and to Assist in Future Discussions with the FAA Regarding Airport Operational Issues. Introduction This report requests City Council authorization for the City Manager to negotiate and execute an agreement with Palmer & Dodge, LLP for legal services associated with the resolution of the dispute between the Federal Aviation Administration (FAA) and the City over the landing fee program and to assist in future discussions with the FAA regarding Airport operational issues. Background/Discussion Palmer & Dodge played a pivotal role in gaining FAA approval of the revised landing fee program which was based upon a joint understanding reached by the City and the FAA. The resolution addressed the FAA?s concerns set forth in its Director?s Determination of January 4, 2005 in the Part 16 proceeding brought by National Business Aviation Association, Bombardier Aerospace Corporation and Dassult Falcon Jet Corporation and the City?s concern regarding development of a revenue source for Airport programs and capital improvements. Executing an agreement with Palmer & Dodge will allow the City Attorney?s office to work with and obtain assistance from the firm for legal matters related to the implementation of the Aircraft Conformance Program and in communicating with the 1 FAA on a local level since they are based in Washington DC. Their experience with FAA procedures and the reasoning for their decisions will provide needed expertise regarding issues involving the FAA. Staff recommends that the City Council authorize the City Manager to negotiate and execute an agreement for legal services including, but not limited to, communicating with the FAA; rendering legal advice and consultation; furnishing legal opinions; and drafting necessary legal documents. A city attorney will be assigned to work with Palmer & Dodge on all legal services provided. Budget/Financial Impact The rates currently being charged by Palmer & Dodge range from $200 to $450 per hour depending on the personnel involved. The amount to be spent in FY05-06 is unknown at this time and will depend on the issues that arise involving the FAA. It is anticipated that the amount may exceed $55,000 and will be funded from the Airport Division budget for professional services at account 33631.555060. Recommendation Staff recommends that the City Council authorize the City Manager to negotiate and execute an agreement with Palmer & Dodge, LLP for legal services on behalf of the City. Prepared by: Marsha Jones Moutrie, City Attorney Jeff Mathieu, Director, Resource Management Department Joseph Lawrence, Assistant City Attorney Marty Tachiki, Deputy City Attorney Bob Trimborn, Airport Manager Reference Contract No. 8511 (CCS). 2 F:\atty\muni\strpts\mjm\palmerdodge.doc City Council Meeting 9-27-05 Santa Monica, California SUPPLEMENTAL STAFF REPORT TO: Mayor and City Council FROM: City Staff SUBJECT: Professional Services Agreement with Palmer & Dodge, LLP for Legal Services Related to the Resolution of the Landing Fee Program and to Assist in Future Discussions with the FAA Regarding Airport Operational Issues Staff prepared a report to Council which recommended authorizing a contract with Palmer & Dodge, LLP for specialized legal services relating to Airport operational issues regulated by federal law. Staff selected that firm through a competitive interview process involving several firms which specialize in work before the Federal Aviation Administration. Palm & Dodge, LLP, which is located in Washington, D.C., has demonstrated noteworthy expertise and success in providing legal advice, representation and lobbying services. On September 13, 2005, the Council continued this item so that staff could formulate a recommendation as to a monetary limit on the services contract. Staff has considered the matter, taking into account the difficulty and likely duration of the anticipated work, its possible outcomes and their significance to the community, and Palmer & Dodge?s rates. Based on these considerations, staff recommends a ?not to exceed? limit of $175,000. If that amount is approved and spent, and staff believes that additional work is necessary and advisable, staff will return to 3 Council for additional authority. Funds would be provided from the Airport Division budget for professional services, Account Number 33631.555060. PREPARED BY: Marsha Jones Moutrie, City Attorney Jeff Mathieu, Director of Resource Management Martin Tachiki, Deputy City Attorney 4