HomeMy WebLinkAbout10 - CC-9 - Agreement Number Three PSA w/ Stradling - 8/1/2017CITY COUNCIL AGENDA REPORT
MEETING DATE: AUGUST 1, 2017
ITEM NUMBER: CC -9
SUBJECT: AGREEMENT NUMBER THREE TO PROFESSIONAL SERVICES AGREEMENT WITH
STRADLING YOCCA CARLSON & RAUTH, PC
DATE: JULY 20, 2017
FROM: FINANCE DEPARTMENT
PRESENTATION BY: STEPHEN DUNIVENT, INTERIM FINANCE DIRECTOR
FOR FURTHER INFORMATION CONTACT: STEPHEN DUNIVENT (714) 754-5243
RECOMMENDATION
1. Approve Amendment Number Three to Professional Services Agreement with
Stradling Yocca Carlson & Rauth, PC in the cumulative amount of $41,750.00 to
provide public finance legal services for "2017 Refunding COPS" (Refunding of the
$29,960,000 City of Costa Mesa, 2007 Certificates of Participation - Police Facility
Expansion Project) in connection to the debt financing of the Lions Park Projects.
2. Authorize the City Manager and the City Clerk to execute Amendment NumberThree.
BACKGROUND
On June 21, 2016 the City Council approved an updated financing plan for the Lions
Park Projects to fund the estimated design and construction costs of the project
($36,000,000 recently updated to $36,492,000). This financing plan contemplates the
accumulation of City funds during FY 16-17 through FY 19-20 from the Capital
Improvement Fund, Park Development Funds and Gas Tax supplemented by an
estimated $18,506,603 from a 25 -year Certificates of Participation (COP) or other type
of debt financing. As a first step in building the financial team for the debt financing of
this project, Council approved on January 17, 2017 a municipal advisory services
agreement with Fieldman Rolapp & Associates (Fieldman). On May 2, 2017 Council
approved Amendment Number Two for professional services with Stradling Yocca
Carlson & Rauth, PC (Stradling) to join the financial team to serve as the financing
counsel.
ANALYSIS
The June 21, 2016 funding plan outlined the strategy of accumulation of funds from various
sources over four fiscal years beginning with FY 16-17. The total of $36,492,000 would be
paid for with funds accumulated over four years. A portion of these funds, estimated at
about $18,506,603, would be from debt financing with the estimated debt payment of
$1,099,000 per year over 25 years being paid by City general funds currently used for the
existing debt service on the 2003 Certificates of Participation (COPs). This was a
refinancing of bonds originally issued to fund the Municipal Center and right-of-way
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property on Victoria Street. Last month, the 2003 COPs were fully paid off one year early
to free up budgeted funds for the new debt payment.
During the financial planning, the team examined the possibility of including the refinancing
the City's 2007 COPs issued for the Civic Center Improvements and expansion of the
Police facility. It has been determined that the 2007 COPs can be refinanced without
extending the term (ending in the year 2027) for an estimated annual savings of about
$500,000. However, this portion of the work was not included in Amendment Two of
Stradling's contract. The recommended Amendment Three will provide for the additional
work connected with the 2007 COPs refinancing.
ALTERNATIVES CONSIDERED
The amendment to the agreement could not be approved and the City would leave the
existing 2007 COPs in place with the higher annual payment for the remaining term of
the debt.
FISCAL REVIEW
Funding for this amendment to the Agreement is included in the 2017-2018 fiscal year
adopted budget.
LEGAL REVIEW
The City Attorney has reviewed and approved Amendment Number Three to the
Professional Services Agreement with Stradling.
CONCLUSION
Approval of the Amendment Number Three with Stradling will enable the City to fully
implement the funding plan to accomplish the Lions Park projects and the refinancing of
the 2007 COPs.
Stephen Dunivent Thomas R. Hatch
Interim Finance Director City Manager
Attachment:
1. Amendment Number Three to Professional Services Agreement with Stradling
Yocca Carlson & Rauth, PC
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Attachment 1
AMENDMENT NUMBER THREE
TO PROFESSIONAL SERVICES AGREEMENT
WITH STRADLING YOCCA CARLSON & RAUTH, PC
This Amendment Number Three to Professional Services Agreement with Stradling
Yocca Carlson & Rauth, PC ("Amendment Three") is made and entered into as of the 1 st day of
August, 2017 ("Effective Date"), by and among the CITY OF COSTA MESA, a municipal
corporation ("City"), the SUCCESSOR AGENCY TO THE COSTA MESA REDEVELOPMENT
AGENCY, a public entity existing under Division 24, Part 1.85 of the California Health and Safety
Code ("Successor Agency"), the COSTA MESA HOUSING AUTHORITY, a public body corporate
and politic ("Housing Authority"), and STRADLING YOCCA CARLSON & RAUTH, PC, a
California professional law corporation ("Consultant"). Together, City, Successor Agency, and
Housing Authority may be referred to as "City."
WHEREAS, City and Consultant entered into a professional services agreement dated as
of February 1, 2012 for Consultant to provide special counsel legal services to the City
("Agreement"); and
WHEREAS, City and Consultant previously amended and extended the Agreement for
one (1) year, through January 31, 2018 by Amendment Number One to Professional Services
Agreement; and
WHEREAS, City and Consultant previously amended the Scope of Services to more fully
describe the legal services that Consultant will render related to the City's potential issuance of
Certificates of Participation for the Lions Park project by Amendment Number Two to Professional
Services Agreement; and
WHEREAS, City and Consultant desire to further amend the Scope of Services to include
public finance legal services for the refunding of the $29,960,000 City of Costa Mesa, 2007
Certificates of Participation (Police Facility Expansion Project) ("2017 Refunding COPS"), as set
forth in Exhibit 'A" attached hereto and fully incorporated herein by this reference; and
WHEREAS, Consultant is performing the scope of services described in Amendment
Number Two and the scope of services described in this Amendment Number Three, which the
parties, along with the City's financial advisor, are undertaking a combined new money and
refunding public financing that is referred to as of this date as the Costa Mesa Financing Authority,
2017 Lease Revenue Bonds ($29,765,000 approximately); and
WHEREAS, Exhibit "A" also sets forth Consultant's compensation for rendering the public
finance legal services as bond counsel and disclosure counsel for the 2017 Refunding COPS,
which the City intends to authorize by this Amendment Three.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. The Scope of Services under the existing Agreement is hereby amended to include
public finance legal services as bond counsel and disclosure counsel for the 2017 Refunding
COPS, as described in Exhibit 'A," which will result, if such public financing is completed and
approved, as the Costa Mesa Financing Authority, 2017 Lease Revenue Bonds.
2. Consultant's compensation for the public finance legal services as bond counsel
and disclosure counsel for the 2017 Refunding COPS is set forth in Exhibit "A", which includes a
flat fee of Twenty -Five Thousand Dollars ($25,000.00) for bond counsel legal services, a flat fee
of Fifteen Thousand Dollars ($15,000.00) for disclosure counsel legal services, and payment of
actual costs and expenses of One Thousand Seven Hundred Fifty Dollars ($1,750.00), for a
cumulative total of Forty -One Thousand Seven Hundred Fifty Dollars ($41,750.00), subject to the
terms and conditions in Exhibit "A."
3. All other terms not defined in this Amendment Three shall have the same meaning
and use as set forth in the Agreement.
4. All other provisions of the Agreement, as amended by Amendment One,
Amendment Two, and this Amendment Three, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment Three to be
executed by and through their respective authorized officers, as of the date first written above.
CONSULTANT
Celeste Stahl Brady, Shareholder
CITY OF COSTA MESA
City Manager
SUCCESSOR AGENCY
Executive Director
HOUSING AUTHORITY
Executive Director
ATTEST:
City Clerk and Secretary
Ptl
Date:
Date:
Date:
Date:
APPROVED AS TO FORM:
Date:
City Attorney/General Counsel
APPROVED AS TO INSURANCE:
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Date:
Risk Management
APPROVED AS TO CONTENT:
Date:
Project Manager
DEPARTMENTALAPPROVAL
Date:
Economic and
Development Services Director
APPROVED AS TO PURCHASING:
Date:
Interim Finance Director
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EXHIBIT A
AMENDED SCOPE OF SERVICES