SR 10-24-2017 3K
City Council Report
City Council Meeting: October 24, 2017
Agenda Item: 3.K
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To: Mayor and City Council
From: Lane Dilg, City Attorney, City Attorney's Office, Municipal Law
Subject: First Modification to Agreement with Orrick, Herrington & Sutcliffe LLP for
Legal Services
Recommended Action
The City Attorney's Office recommends that the City Council authorize the City Manager
to execute a first modification to Agreement # 9812 (CCS) with Orrick, Herrington &
Sutcliffe LLP ("Orrick"), for legal services relating to three of the City's planned financing
projects. This modification will extend the agreement’s term by two years (and result in
a seven-year amended agreement); all other terms and conditions, including the total
not to exceed amount of $250,000 will remain the same.
Executive Summary
The City of Santa Monica, the Santa Monica Public Financing Authority, the
Redevelopment Successor Agency, and the Parking Authority desire to utilize outside
bond counsel and disclosure counsel services to assist in implementing the City's
financial planning and debt management activities. Under its existing contract, Orrick
provided bond and disclosure counsel services for the Santa Monica Public Financing
Authority Lease Revenue Refunding Bonds, Series 2015 (Civic Center Parking Project)
and in obtaining lease revenue financing for the City Services Building. As part of the
City Services Building financing, Orrick assisted the City in releasing the City's Main
Library as security for the Santa Monica Public Financing Authority Lease Revenue
Refunding Bonds, Series 2011A and B so that it could act as security for the City
Services Building bonds. As part of this substitution of security, Orrick became familiar
with the City's financing for the Public Safety Facility, which will be the security for the
upcoming anticipated financing of the City's Fire Station #1 Project. Because Orrick
provided initial analyses for these projects, the City Attorney’s Office believes that it
would be prudent and efficient to extend Orrick's contract for two years rather than
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initiating a new procurement process. Because costs associated with bond issuance
are paid through bond proceeds, no additional funding is required.
Background
Orrick has served as bond and disclosure counsel to the City, the Santa Monica Public
Financing Authority, the former Redevelopment Agency and the Parking Authority from
1988 to 2006. The current engagement commenced in 2013 after a competitive request
for proposals process. Orrick was selected as the best qualified firm based on its
proven track record of advising the City, the Santa Monica Public Financing Authority,
the former Redevelopment Agency, the Redevelopment Successor Agency, and the
Parking Authority on a range of debt structuring, federal tax, state law and other legal
advisory services.
Discussion
Orrick’s experience, expertise, and assistance has helped the City identify and
implement structuring strategies for the City’s debt issues to achieve cost-effective and
efficient implementation. Orrick has assisted the City in areas such as assessment of
new financing programs with the view of maintaining efficiency and tax-exempt status,
innovative and/or alternative financing strategies, and resolution and implementation of
real property solutions relating to City debt issues. Most recently, Orrick assisted the
City with its City Services Building bond issuance, including strategies to issue bonds as
green bonds.
Through its work with the City, Orrick is familiar with the City’s long term financing
strategies, its specific needs and operating environment. Staff has identified three
potential projects for the next few years that may require bond financing: Fire Station
#1 (lease revenue bonds), park and open space projects (general obligation bonds),
and City Yards modernization (lease revenue bonds). Orrick has already provided initial
analyses for these projects as part of its ongoing work, and the firm is aware of the
operational and strategic issues involved. Staff therefore believes it would be prudent
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and efficient to retain Orrick through a contract term extension for two years rather than
engaging in a new procurement process. All other terms and conditions of the contract
will remain the same and no additional funding is required.
.
Financial Impacts and Budget Actions
The agreement’s total compensation for services not related to specific bond issuance
transactions will remain capped at $250,000. Fees for services related to bond
issuance transactions will continue to be paid by bond proceeds at the rates listed in the
agreement. Funds are available in the FY 2017-18 budget for the Finance Department
in account 01221.555060. Future year funding is contingent on Council budget
approval.
Prepared By: Susan Cola, Deputy City Attorney
Approved
Forwarded to Council
Attachments:
A. SR#2745OrrickOaks10242017
REFERENCE:
FIRST MODIFICATION TO
AGREEMENT NO. 9812
(CCS)