SR-022608-1GCity Council Meeting: February 26, 2008
Agenda Item: (
To: Mayor and City Council
From: Carol Swindell, Director of Finance
Subject: Modification of Professional Services Agreement with Public Resources
Advisory Group for Financial Advisory Services for the City of Santa
Monica, the Redevelopment Agency, and the Parking Authority of the City
of Santa Monica
Recommended Action
Staff recommends that the City Council authorize the City Manager to execute a
modification to Professional Services Agreement 8724 (CCS) with Public Resources
Advisory Group (PRAG) for a total contract amount not to exceed $250,000 for the five-
yearcontract term.
Executive Summary
The City of Santa Monica, the Redevelopment Agency and the Parking Authority utilize
PRAG to assist in financial planning and analysis and debt issuance activities. PRAG
has provided advisory services for a broad range of projects in recent months ranging
from a debt capacity study and presentation to rating agencies to a review of risk
mitigation measures to ongoing work for a Housing line of credit.
Discussion
Staff issued a request for proposal for financial advisory services in March 2007 and
after evaluating nine proposals selected Public Resources Advisory Group ("PRAG"), an
independent financial advisory firm headquartered in New York with a full service office
in West Los Angeles.
In June 2007, Council authorized the execution of a five-year contract with PRAG, an
independent financial advisory firm headquartered in New York with afull-service office
in West Los Angeles, in an amount not to exceed $100,000.
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Since June 2007, PRAG has assisted City staff with analyses of the City and
Redevelopment Agency's debt capacity and debt affordability and with the related
presentations to three credit ratings agencies, Moody's, Standard & Poor's, and Fitch.
PRAG has reviewed proposals for an MTBE mitigation insurance product and other
financial transactions and is currently assisting with a $50 million Housing line of credit
transaction. Given the services to date and expected ongoing services, staff estimates
that the cost of these services will not exceed $250,000 over the five-year term of the
contract Staff recommends that the contract be modified to reflect anot-to-exceed
amount of $250,000.
Financial Impacts & Budget Actions
The cost of these professional advisory services will depend on the type of work
conducted. The cost of financial advisory services specific to some transactions, bond
transactions, as an example, are generally included in the costs of issuance and are
budgeted as a bond project cost. The costs of all other financial advisory services will
be billed at the hourly rates proposed by PRAG in their proposal.
The total cost of financial advisory services is not expected to exceed $250,000 during
the five-year term of the professional services agreement and will be charged to
professional services expenditure accounts as services are rendered.
Prepared by:
Candace Tysdal, Financial Operations Manager
Approved:
Forwarded to Council:
Carol Swindel C~"Y mont Ewel
Director of Finance Manager
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Reference
Amendment to
Contract No.
8724(CCS).