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Home My WebLink About12/7/2005 - STAFF REPORTS (19) O� ?ALMS., h � C U N # c V 9<�FORN� CITY COUNCIL STAFF REPORT DATE: December 7, 2005 CONSENT CALENDAR SUBJECT: AMENDMENT NO. 4 TO AGREEMENT NO. A4922 WITH SIMAT, HELLIESEN & EICHNER, INC. (SH&E) CONDUCT A MARKET STUDY AND FINANCIAL FORECAST OF AIRPORT PASSENGER FACILITY CHARGES FROM: David H. Ready, City Manager BY: Department of Aviation SUMMARY' The Airport was recently notified by its bond underwriter that in order to market its revenue bonds an independent market study and forecast of passenger facility charges would be needed. In order to complete this study in a timely manner, staff solicited proposals from two firms with expertise in market study and financial forecasting. The City received one proposal from Simat, Helliesen & Eichner, Inc. (SH&E) to perform the required work. This action will authorize an amendment to the existing contract with SH&E to prepare a market study and forecast to be included in the issuance by the City of its Airport Passenger Facility Charge (PFC) subordinate refunding revenue bonds, series 2006A. The total cost of this amendment is $75,000. RECOMMENDATION: 1. Approve Minute Order No. authorizing the City Attorney to prepare Amendment No. 4 to Contract Services Agreement No. 4922 with Simat, Helliesen & Eichner, Inc. (SH&E) to conduct a market study and financial forecast of Airport Passenger Facility Charge (PFC) in an amount not to exceed $75,000. 2. Authorize the City Manager to execute all necessary documents. STAFF ANALYSIS: The City is desirous to issue Airport Passenger Facility Charge Subordinate Refunding Revenue Bonds, Series 2006A (Palm Springs International Airport) in the maximum aggregate face amount of $12,500,000. The proceeds from the Item No. 2. H . City Council Staff Report December 7, 2005 -- Page 2 Amendment No. 4 to SH&E Contract sale of the Bonds are intended to (a) refinance the outstanding City of Palm Springs Financing Authority (Palm Springs Regional Airport) Airport Revenue Bonds, Series 1992, the proceeds of which were used to construct improvements (known as the Phase IA Terminal Expansion Improvements) at the Palm Springs International Airport (PSP), (b) fund a reserve fund and (c) pay certain costs of issuance in connection with the Bonds. Now that the FAA approval is in place and the structure has been finalized, the City's bond counsel and financial advisor deem it desirable to have the City Council reauthorize the refunding documents. Staff expects approval of those documents, and a public hearing, to be scheduled for consideration at the December 7, 2005 meeting. Further, now that the issuance of the bonds is imminent, it is necessary for the City to contract with a consultant to provide projections of the Passenger Facility Charges for use in the offering document for the bond issue. The consultant's report will cover the Palm Springs Airport share of the market, air carriers, enplanement history, service routes and forecast of demand, enplanements and revenues. This is vital to provide investors in the bonds with independent confirmation of the Airport's ability to generate sufficient Passenger Facility Charges to repay the bonds. The Airport in concert with the City of Palm Springs Procurement and Contracting Manager, and in accordance with Section 7.04.050, Contracting Procedures for Professional Services of the City of Palm Springs Procurement Ordinance, sought proposals from two firms with experience in the subject field and who could meet the Airport's compressed schedule. Of the two firms that were solicited, only one, Simat, Helliesen & Eichner, Inc. (SH&E), provided a proposal. The other firm, JF Brown Associates, indicated that due to existing client commitments and the relatively compressed time schedule they would be unable to perform the requested work. SH&E has ample experience in this highly specialized field (JFK American Airline SFRB Series 2005 ($800M), Massport GARB Series 2005 ($330M), Burlington Airport PFC Series 2003 ($20M), Massport GARB Series 2003 ($425M), JFK American Airlines SFRB Series 2002 ($500M), BOS Delta Airlines SFRB Series 2001 ($450M)). More specifically, SH&E's understanding of PSP's market and over four years of experience in route development for PSP, makes them ideally suited for this project. Staff is capitalizing upon the SH&E's availability and willingness to perform the stated services in order to meet a retreating window of opportunity. Interest rates seem to be advancing and given the tremendous effort exercised on behalf of the City over the past two years, Staff has targeted January 2006 as most advantageous to the City. In the essence of time and cost savings associated with utilizing SH&E (familiarity with PSP's market), it is recommended that these services be incorporated into an expanded scope under Amendment No. 4. City Council Staff Report December 7, 2005 -- Page 3 Amendment No. 4 to SH&E Contract The Airport Commission recommended the City Council approval of Amendment No. 4 at its regularly scheduled Airport Commission meeting held on December 7, 2005. FISCAL IMPACT: Finance Director Review Amendment No. 4 to Contract Services Agreement No. 49 with Simat, Helliesen & Eichner, Inc. will be funded from Account No. 410-60-60OIK49680 Refinancing Costs. r� Richard S. Walsh, A.A.E. VAssistant ity M nager Director of Aviation David H. Ready, Ci y anag&-- Attachments: Minute Order: SH&E Scope of Services, Budget, and Schedule City Council Staff Report December 7, 2005 -- Page 4 Amendment No. 4 to SH&E Contract MINUTE ORDER NO. AUTHORIZING THE CITY ATTORNEY TO PREPARE AMENDMENT NO. 4 TO CONTRACT SERVICES AGREEMENT NO. 4922 WITH SIMAT, HELLIESEN & EICHNER, INC., (SH&E) TO CONDUCT A MARKET STUDY AND FINANCIAL FORECAST ON AIRPORT PASSENGER FACILITY CHARGES IN AN AMOUNT NOT TO EXCEED $75,000. I HEREBY CERTIFY that this Minute Order, authorizing the City Attorney to prepare Amendment No. 4 to Contract Services Agreement No. 4922 with Simat, Helliesen & Eichner, Inc. (SH&E) to conduct a market study and financial forecast of Airport Passenger Facility Charges (PFC) in an amount not-to-exceed $75,000, was approved by the City Council of the City of Palm Springs, California, in a meeting thereof held on the 7th day of December, 2005. JAMES THOMPSON City Clerk