sr-102709-1jc7® __
~;tYof City Council Repot
Santa Monies
City Council Meeting: October 27, 2009
Agenda Item: ~ ~~
To: Mayor and City Council
From: Carol Swindell, Director of Finance
Subject: Modification of a Contract for Bond Counsel Services
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a modification to the existing agreement with Stradling, Yocca, Carlson, and
Rauth (SYCR) for legal services related to the issuance of debt financing by the City.
Executive Summary
SYCR has served as the City's Bond Counsel since entering into a contractual
agreement in September, 2007, following a competitive bid. The current contract limits
compensation to an amount not to exceed $70,000. The City is currently reviewing
outstanding debt issues and requires SYCR's expertise in evaluating financing options
and in preparing opinions and documents related to debt financing. Staff recommends
that the amount of the contract be increased by $150,000, making total compensation
under the contract not to exceed $220,000.
Discussion
The City is currently reviewing several debt financing options, including two bond
refunding opportunities that could save the City approximately $1.6 million net present
value. The two debt issues being considered for refunding are the 1999 Lease
Revenue Bonds issued for construction of the Public Safety Facility (PSF) and a portion
of the 1993 Refunding Wastewater Enterprise Revenue Bonds related to capital costs
for the Hyperion wastewater treatment plant. If the refunding prove feasible, staff will
bring the necessary action to Council in November. These debt financing opportunities
require ongoing Bond Counsel services, as currently provided by SYCR.
The current contract with SYCR did not contemplate these refunding opportunities and
therefore did not provide adequate funding to meet our needs. This modification will
allow the City to take advantage of these debt service savings opportunities.
1
This modification to the contract will increase maximum compensation for SYCR to
$220,000. The remaining terms of the contract and scope of services will remain
unchanged. Staff will bring additional contract modifications to Council as the financing
plan is solidified for the pending Redevelopment Agency (RDA) debt issuance.
The City Attorney's Office led in the 2007 Request for Proposal and concurs with this
requested contract modification.
Financial Impacts & Budget Actions
Funds for Bond Counsel services related to the refunding of the 1999 Public Safety
Lease Revenue Bonds will be recorded in account 01274.555970 in the amount of
$75,000 and included in cost of issuance. Funds for like services for refunding of the
1993 Refunding Wastewater Enterprise Revenue Bonds will be recorded in account
31.140006 in the amount of $75,000 and included in cost of issuance:
Prepared by: Chuck McBride, Assistant Director of Finance
Approved:
Forwarded to Council:
Carol Swindell "
Director of Finance
P. I~ar}dnt Ewell
City anager
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Reference Contract No.
9146 (CCS).