RECOMMENDATIONS: SUBJECT: Contract Awards to Kutak Rock LLP and Polsinelli LLP. 1. ADOPT the Staff Report.

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1 na Marie Lindsey - Executive Director Capital Budget Operafing Budget 08/12113 CEQA 08/06113 Procurement El YE] NO NA os 2YEINENA RW Y 1:1 N ES OYEINOCand MT SUBJECT: Contract Awards to Kutak Rock LLP and Polsinelli LLP Award of Contracts with Kutak Rock LLP and Polsinelli LLP for Bond, Disclosure and Financial Counsel Services for the City of Los Angeles, Los Angeles World Airports RECOMMENDATIONS: Management RECOMMENDS that the Board of Airport Commissioners: 1. ADOPT the Staff Report. 2. DETERMINE that this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Article II, Section 2.f of the Los Angeles City CEQA Guidelines. 3. FIND that this work can be performed more economically or feasibly by an independent contractor than by City employees. 4. APPROVE Contracts with Kutak Rock LLP and Polsinelli LLP for Bond, Disclosure and Financial Counsel Services for the City of Los Angeles, Department of Airports, in amounts not to exceed $250,000 per contract and each for a term not to exceed three years. 5. AUTHORIZE the Executive Director to execute the above referenced contracts after the approval as to form by the City Attorney. Page.1

2 DISCUSSION' 1. Executive Summary LAWA and the City Attorney's Office respectively seek approval from the Board of Airport Commissioners (Board) to award contracts with the Kutak Rock LLP and Polsinelli LLP law firms to assist the City Attorney and LAWA with bond, disclosure, and financial counsel services and related matters. Currently, the law firms of Kutak Rock LLP, Nixon Peabody LLP, and Polsinelli LLP are providing the bond, disclosure and financial legal services to the City Attorney and LAWA. The contracts with these law firms will be expiring on October 25, 2013, and there is a continuing need for these specialized services beyond that date. Thus, the City Attorney conducted a competitive Request for Proposals (RFP) process this past March and selected Kutak Rock LLP and Polsinelli LLP to provide these services subject to Board approval. The projected cost for the term of each contract is approximately $250,000, based on the cost of previous similar agreements and anticipated projects. The City Attorney and LAWA will return to the Board for any additional appropriation requests when appropriate and if necessary. 2. Prior Related Actions Under Board Resolution No , the law firms of Kutak Rock LLP, Nixon Peabody LLP, and Polsinelli Shughart LLP (f/k/a Quateman LLP) are providing bond, disclosure, and financial counsel services to LAWA. The contracts with these firms will expire on October 25, Current Action The City Attorney and LAWA require specialized bond, disclosure, tax and financial legal counsel services in connection with the financing or refinancing of current and future capital improvement projects, commercial paper program, conduit financing and other related financial issues affecting airports owned and operated by LAWA. In March 2013, the City Attorney released a RFP soliciting competitive proposals from highly experienced law firms to provide the City Attorney and LAWA with the above-mentioned legal services. The RFPs were sent to scores of law firms that provide such focused services. A number of very qualified firms participated in the proposal process (See Attachment 1, List of Proposers). The eligibility criteria described in the RFP are as set forth below: Service as bond counsel in at least ten municipal financings within the last calendar year; Ability as a nationally recognized bond counsel to provide a written opinion to the legality of any bond, note or certificate issue, including the tax exemption of any such issue, acceptable to the underwriting syndicates and investment firms who may bid on revenue debt offers of the Departments and readily acceptable to the other investors to whom the bonds will marketed; Expertise in and knowledge of Federal, State and local laws and rules applicable to the financing activities of the LAWA, LADWP and the Port of Los Angeles; As related to LAWA, knowledge of airport matters relating to bond issues; Page 2

3 As related to LADWP, knowledge of water and power utilities matters relating to bond issues; As related to the Port of Los Angeles, knowledge of harbor matters relating to bond issues. After much discussion and consideration, LAWA and the City Attorney's Office identified and recommended that bond, disclosure and financial counsel contracts for LAWA be awarded to two law firms - Kutak Rock LLP and Polsinelli LLP. Each of recommended firm has for a number of years practiced in this exacting area of the law and each firm has extensive expertise in this area of the law that make them uniquely qualified to render these services to the City Attorney and LAWA. In particular, among other things, the selection of Kutak Rock is based on the firm's substantial experience in airport financings gained through participation in more than 190 airport bond issues. Significantly, since 1995 Kutak Rock LLP has been LAWA's bond counsel and has participated in bond financing totaling over one billion dollars for LAWA. Similarly, since the late 1990s Quateman LLP, and now as Polsinelli LLP (which acquired Quateman LLP in 2011), has been engaged by LAWA to serve as co-bond counsel and disclosure counsel and has participated in numerous airport bond issues and has prepared LAWNs disclosure reports. Hence, the City Attorney and LAWA respectfully request the Board to authorize the Executive Director to execute contracts with the Kutak Rock LLP and Polsinelli LLP law firms for terms not to exceed three years and for compensation amounts not to exceed two hundred fifty thousand dollars ($250,000) per contract. The cumulative compensation amount to be paid for these contracts shall not exceed five hundred thousand dollars ($500,000), without further authorization by the Board. The law firms hourly rates are set forth in Attachment 1 of this report. 4. Alternatives Considered Currently, there is insufficient in-house City Attorney staff and expertise to provide LAWA with specialized and complex financial legal services, including but not limited to the rendering of bondholder, Securities and Exchange Commission, disclosure, and tax opinions associated with such services. In addition, hiring full time in-house attorneys for this work is not practicable or advantageous as the need for such services is limited, ephemeral, and sporadic. FISCAL & ECONOMIC IMPACT STATEMENT: Each contract will be for a term of three years, and during the term of the contracts the maximum compensation level for each contract will not exceed two hundred fifty thousand ($250,000) without further authorization from the Board. The total cumulative compensation for the two contracts will be set at five hundred thousand dollars ($500,000). Funds for the requested Contracts are available in the Fiscal Year Los Angeles World Airports Operating Budget on Cost Center Legal Services Division, Commitment Item Contractual Services. Page 3

4 STANDARD PROVISIONS: 1. This action, as a continuing administrative activity, is exempt from the requirements of the California Environmental Quality Act (CEQA) as provided by Article ll, Section 2.f of the Los Angeles CEQA Guidelines. 2. These Contracts will be reviewed and approved by the City Attorney as to form. 3. These Contracts shall become final pursuant to the provisions of Los Angeles City Charter Sections 275 and Kutak Rock LLP and Polsinelli LLP are subject to the provisions of the Living Wage/Service Contractor Worker Retention Ordinances. 5. This item is not subject to the provisions of the Small Business Enterprise Program. 6. Kutak Rock LLP and Polsinelli LLP have submitted an Affirmative Action Plan and will comply with the provisions of the Affirmative Action Program. 7. Kutak Rock LLP has been assigned Business Tax Registration Certificate No ; and Polsinelli LLP has been assigned Business Tax Registration Certificate No Kutak Rock LLP and Polsinelli LLP have submitted the Certification of Compliance with Child Support Obligations and will comply with the provisions of the Child Support Obligations Ordinance. 9. Kutak Rock LLP and Polsinelli LLP will have approved insurance documents, in the terms and amounts required, on file with the City of Los Angeles prior to the issuance of a Notice to Proceed. 10. Pursuant to Charter Section 1022 it has been determined that the work specified in these contracts can be performed more feasibly or economically by an Independent Contractor than by City employees. 11. Kutak Rock LLP and Polsinelli LLP are subject to the provisions of the Contractor Responsibility Program. 12. Kutak Rock LLP and Polsinelli LLP must be determined by the Office of Contract Compliance to be in compliance with the provisions of the Equal Benefits Ordinance prior to execution of contract. 13. Kutak Rock LLP and Polsinelli LLP may be required to comply with the provisions of the First Source Hiring Program once the program is formally implemented by LAWA. 14. Kutak Rock LLP and Polsinelli LLP must submit the Bidder Contributions CEC Form 55 and comply with its provisions. Page 4

5 Attachment: Bond Counsel RFP: List of Proposers Law Firms Hourly Rates Bond Counsel RFP: List of Proposers Attachment 1 Name of Firm Goodwin Procter LLP and Hobson Bernardino + Davis LLP Hawkins Delafield & Wood LLP Kutak Rock LLP Nixon Peabody LLP Orrick Herrington & Sutcliffe LLP Polsinelli LLP Squire Sanders LLP The specific hourly rates for each firm shall not exceed the following: Kutak Rock LLP - Hourly Rates Tax Attorneys $265 - $425 Partners $365 - $400 Associates $225 Paralegals $125 - $135 Polsinelli LLP - Hourly Rate Partners $375 - $500 Associates $235 - $260 Paralegals $105 Page 5