PROPOSAL:

Amend Contract with Stradling, Yocca, Carlson & Rauth for Specialized Legal Services

SYNOPSIS:

A need for legal assistance in connection with the sale of the El Monte facility continues to exist. This firm’s real estate department has been providing legal advice to the District as well as representation of the District at negotiations. Expenses are estimated at approximately $30,000 for this task bringing the total amount of this contract to $30,000 for FY 1997-98. This item is being presented to the Board because total expenditure is over $50,000 for two fiscal years.

COMMITTEE:

Administrative, October 24, 1997, Recommended for Approval.

RECOMMENDED ACTION:

Authorize the Chairman of the Board to execute an amendment to the AQMD contract with Stradling, Yocca, Carlson & Rauth to increase funding by $30,000, for a three-year contract total of $115,000.

Barry R. Wallerstein, D.Env.
Acting Executive Officer

Background

The AQMD has an existing contract with the law firm of Stradling, Yocca, Carlson & Rauth to provide specialized legal services. The firm provides, and this contract has involved, a full range of services in the areas of finance and real estate. Most recently the firm has been involved in representing the AQMD in matters relating to the potential sale of the El Monte facility, and there continues to be a need for legal advice on this action. Because the property has just recently gone back on the market, it is difficult to estimate how much work will be required to complete a satisfactory disposition of the El Monte facility. We recommend that an additional $30,000 be placed in the firm’s contract at this time. This should be sufficient funding to cover evaluation of offers, ensuing negotiations, and draft of a contract for sale with a selected offeror, assuming uncomplicated negotiations and a cooperative counsel. Sufficient funds are available in the District Counsel’s approved FY 1997-1998 budget to cover this cost.

While the Executive Officer has the authority to enter into contracts for an amount not to exceed $50,000, it is the Executive Officer’s policy to advise the Board wherever a contract involves more than $50,000 in consecutive fiscal years. The present contract with this firm was initiated on August 9, 1995, and with this addition will result in a total of $115,000 over three fiscal years. The contracted effort, so far, includes:

1. legal advice and representation concerning the District’s issuance of Pension Obligation Bonds to retire its debt to the San Bernardino County Retirement System [ Paid for out of the proceeds of sale of the bond ($10,000).] ;

2. preparing an opinion regarding the potential effects of a possible Los Angeles County bankruptcy on the District’s financial status;

3. ongoing advice concerning the District’s Treasury Management diversification program;

4. providing advice concerning the lease or other use of portions of the Diamond Bar facility for non-governmental use as it pertains to limitations imposed by the documents establishing the bonds which financed construction of the facility;

5. advice and negotiations concerning the Internal Revenue Service’s threat to file a federal eminent domain action to allow the IRS to stay in the El Monte facility beyond the termination of the lease;

6. advice concerning whether the Regional Transportation Agencies Coalition had sufficient legal capacity to accept and manage the $1.5 million annually which the District is required to provide by SB 836 for voluntary ridesharing;

7. advice concerning the efforts by certain Orange County cities to apply a pro-rated share of AB 2766 subvention funds to pursuing recovery of funds lost in the Orange County bankruptcy;

8. advice to the Director of Finance concerning investment reporting;

9. advice to District Counsel regarding possible effects of Proposition 218;

10. advice and negotiations regarding the sale of the El Monte facility, including review of environmental survey, analysis of title insurance requirements, review of various offers for purchase, draft of Board resolution for sale of building, review and revising of purchase agreement, negotiation of amendments to purchase agreement, advice regarding escrow agreement, negotiations with CDI/West, review and advice regarding additional offers for sale and performing related work pertaining to the potential sale of the El Monte facility.

There will be an ongoing need for legal advice and representation relating to the sale of the El Monte facility over the next six months or more.

The AQMD’s Contracting and Purchasing Policy authorizes the use of a sole source contract under the following circumstances: (1) the cost of labor for preparing a bid solicitation package is in excess of the savings that would be derived from competitive proposals; or (2) public health and property may be endangered by the delay; or (3) prior experience has shown that the desired services are available from only one source; or (4) other circumstances exist, which, in the determination of the Executive Officer or Governing Board, require such waiver in the best interests of the District.

This request is made under reason #4. From time to time, the District requires legal advice on a wide variety of financial and real estate areas which require specialized legal services. Stradling, Yocca, Carlson & Rauth provides a combination of highly qualified expert services in all these areas. They also have a special familiarity with the El Monte property resulting in part from their involvement in the original financing of the facility, which has made them specially qualified for handling real estate matters relating to the El Monte facility. Finally, they are thoroughly familiar with the District’s financial structure, needs, and bond obligations resulting from their involvement in financing the construction of the El Monte and Diamond Bar facilities, which makes them uniquely qualified to meet these needs. However, staff intends to issue an RFP for future work in the real estate field if the disposition of the El Monte facility goes significantly beyond the coverage of this contract amendment.

Proposal

It is therefore recommended that the Board authorize an additional $30,000 to be applied to the existing contract with Stradling, Yocca, Carlson & Rauth, to bring the total amount of the contract to a total of $115,000 over three fiscal years.

Resource Impacts

None; sufficient funds are available in the District Counsel’s approved Fiscal Year 1997-98 Budget.

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