DATE COUNCIL FILE NO.

:OCT .2 3 r'

COUNCIL DISTRICT

0220-02221-9146TRANSMITTAL

TO

City Council

FROM

The Mayor

Authorization for the Issuance of Revenue Bonds for the Los Angeles World Airport

Karatz)MAS:HTT:09130187

REPORT FROM

OFFICE OF THE CITY ADMINISTRATIVE OFFICER

Date: october 18, 2012 CAO File No. 0220-02221-9146Council File No.Council District: 11

From:

The Mayor ~

Miguel A. Santana, City Administrative OfficerV

Transmittal from Los Angeles World Airports dated October 2,2012

To:

Reference:

Subject: AUTHORIZATION FOR THE ISSUANCE OF REVENUE BONDS FOR THE LOSANGELES WORLD AIRPORT

SUMMARY

The Executive Director of the Airports Department (LAWA) requests authority to: 1) issue up to $1billion in airport revenue bonds for various airfield and terminal capital projects at the Los AngelesInternational Airport (LAX), refinance outstanding commercial paper (CP) and to refund outstandingdebt to achieve savings; 2) issue bonds using a private/negotiated sale, including private placementinstead of competitive bidding; and 3) select Cabrera Capital Markets, LLC (Cabrera), CitigroupGlobal Markets Inc. (Clti), E.J. De La Rosa & Co., Inc. (De La Rosa), J.P. Morgan Securities LLC (JPMorgan), Loop Capital Markets, LLC (Loop), Merrill Lynch, Pierce, Fenner & Smith Inc., (dba Bank ofAmerica Merrill Lynch), Morgan Stanley & Co., Inc. (Morgan Stanley), M.R. Beal & Co. (M.R. 8eal),Samuel A. Ramirez & Co., Inc. (Ramirez), Siebert Branford Shank & Co. L.L.C. (Siebert), Stifel,Nicolaus & Co., Inc. (dba Stone & Youngberg (a division of Stifel Nicolaus)), Wells Fargo Securities(Wells Fargo) as the underwriting firms for the sale of the bonds. The remaining firms in LAWA'sinvestment banking pool that were not selected to serve as underwriters on a particular transactionwill serve as members of the selling group on that transaction.

Negotiated/Private Sale Request

The decision to use one method over another is evaluated on a case-by-case basis. LAWA requestsauthority to use a negotiated method of sale rather than competitive bidd ing because it will allow forgreater flexibility to deal with market conditions and investor demand. In a negotiated sale, LAWAstaff pre-select the underwriters and assist the underwriters in choosing the best time to sell bondsas a public offering and pre-market to investors who can offer the lowest cost of borrowing, LAWAproposes using a negotiated sale based on the following factors:

@ The proposed financings consist of selling Alternative Minimum Tax (AMT) private activitydebt. Historically, AMT private activity debt has been difficult to sell and would benefit from anegotiated sale;

CAO File No.

0220-02221-9146PAGE

2

1& LAWA revenue bonds are paid from airport revenues which investors perceive as more riskythan bonds supported by a city's taxing authority because they are perceived to have greaterexposure to event risk such as economic downturns, terrorist attacks and airline bankruptcies.Underwriters will need to educate investors on the financial condition of LAX; and,

@ Opportunity to expand the investor base and generate greater demand will help further reduceborrowing costs over time.

In addition to a negotiated (public) sale as described above, LAWA requests to solicit proposals for adirect loan (also known as a private placement) from banking institutions to refund a portion of its CPoA direct loan is privately placed or directly purchased by an investor or bank. This differs from anegotiated (public) sale in that it is not sold to the public and the bonds are held privately in thepurchaser's account. Due to current market factors such as insurer and credit provider downgradesand banking regulatory changes, banks now are offering attractive direct loans to issuers. LAWAstaff will evaluate the proposals to determine if private placement will provide lower interest ratesthan a negotiated public sale. If private placement is not in the best financial interest of LAWA, therevenue bonds will be sold on a negotiated basis as a public offering.

In contrast, a competitive sale requires LAWA staff and its financial advisor to evaluate the currentmarket conditions and subsequently select a date to sell the bonds. At the time of sale, underwriterssubmit sealed bids and the sale of bonds is awarded to the lowest bidder. This type of sale does notgive LAWA the flexibility to adequately address the unique risk factors associated with LAWArevenue bonds.

Charter Section 609(d)(3) requires the City Council to have the opportunity to disapprove theselection of underwriters for the negotiated sale of bonds. LAWA utilized a competitive process andestablished a list of pre-qualified investment bankers approved by the Board of AirportCommissioners (BOAC) (Resolution No. 24835). From this pool, LAWA is recommending theselection of the following firms based on the specific needs of the transaction and qualificationssuited for this multiple-series financing:

e Transaction 1 - Citi (Senior Manager); Siebert (Co-Manager); Wells Fargo (Co-Manager); andCabrera (Co-Manager)

@l Transaction 2 - De La Rosa (Senior Manager); Ramirez (Co-Senior Manager); Loop (Co-Manager); and JP Morgan (Co-Manager)

41 Transaction 3 - Morgan Stanley (Senior Manager), Stone & Youngberg (Co-Manager), Bankof America Merrill Lynch (Co-Manager) and M.R. Seal (Co-Manager)

Firms within LAWA's investment banking pool which have not been selected as a senior or co-manager in a particular transaction will serve as members of the selling group. LAWA's investmentbanking pool consists of the following 12 firms:

CAD File No. PAGE

0220-02221-9146 3

1. Bank of America Merrill Lynch2. Cabrera Capital Markets, LLC3. Citigroup Global Markets Inc.4. De La Rosa & Co. Inc.5. J.P. Morgan Securities Inc.6. Loop Capital Markets, LLC7. Morgan Stanley & Co. Incorporated8. MR. Beal & Company9. Ramirez & Co., Inc.10. Siebert Branford Shank & Co.11.Stone &Youngberg12. Wells Fargo Securities

Charter Section 609(d)(1) requires that the Board of the department requesting the sale of revenuebonds though a negotiated method of sale must have the written recommendation of the ChiefFinancial Officer of the department, stating the reasons why a negotiated method of sale wouldbenefit the department. LAWA has attached a draft of that recommendation letter and will finalize itin the submittal to the BOAC.

Charter Section 609(d)(2) requires that the Council receive a report of the City Administrative Officerbefore approving a negotiated method of sale.

Charter Section 609(e)(1) requires each underwriter to certify under oath that no gifts totaling $50 ormore in value or political contribution totaling $100 or more were provided, within the prior 12months, to any City official having the authority to make or participate in making decisions concerningthis sale. LAWA reports that each underwriter has filed its certification when the pool of underwriterswas established and they will file updated certification at the time the documentation for the sale isapproved.

In compliance with the City's Responsible Banking Ordinance (CF 09-0234), LAWA requested theabove underwriters to provide their local corporate citizenship information. Based on their responses,the recommended underwriters have demonstrated their corporate citizenship through theircharitable donations and employee volunteer hours. Collectively, the underwriters have donated tolocal non-profit organizations such as the Boys and Girls Club of Los Angeles, TELACU EducationFoundation, Skid Row Housing Trust, Lam.angel Foundation (TRANS4M Boyle Heights), SouthCentral Scholars, Grow Clinic at Harbor-UCLA Medical Center, California Women Lead (Los AngelesChapter), Mid Valley Family YMCA, Homeboy Industries and many more. Furthermore, a number offirms have established supplier diversity programs.

Miscellaneous Issues

LAWA has determined that the proposed sale of bonds is exempt from the California EnvironmentalQuality Act (CEQA), as provided by Article 11,Section 2 (f) of the Los Angeles CEQA Guidelines.

CAO File No.

0220-02221-9146PAGE

4

RECOMMENDATION

That the Mayor:

1. Authorize the Department of Airports to issue revenue bonds in one or more series by theLos Angeles World Airports for Los Angeles International Airport (LAX) in an aggregateprincipal amount not-to-exceed $1 billion to finance various airfield and terminal capitalproject costs at LAX, to refinance outstanding Commercial Paper, and to refundoutstanding debt to achieve savings using a negotiated method of sale (including privateplacement);

2. Authorize the selection of Cabrera Capital Markets, LLC, Citigroup Global Markets lnc.,E.J. De La Rosa & Co., lnc., J.P. Morgan Securities LLC, Loop Capital Markets, LLC,Merrill Lynch, Pierce, Fenner & Smith lnc., (dba Bank of America Merrill Lynch), MorganStanley & Co., lnc., M.R. Beal & Co. (MR. Beal), Samuel A. Ramirez & Co., lnc., SiebertBranford Shank & Co. L.L.C., Stifel, Nicolaus & Co., Inc. (dba Stone &Youngberg(adivision of Stifel Nicolaus)), Wells Fargo Securities as the underwriting firms for the sale ofthe bonds and the remaining firms on the Department of Airports' investment banking poolthat were not selected to serve as senior or co-manager in a particular transaction willserve as members of the selling group for that transaction; and,

3. Return request for further processing, including City Council consideration.

FISCAL IMPACT STATEMENT

There is no Genera! Fund impact. The revenue bonds will be Airport Revenue Fund obligations andwill not constitute an obligation of the City or the General Fund. The issuance of these bonds willenable the Department of Airports to refinance prior private activity bonds and finance major capitalimprovements. This request complies with the City's Financial Policies, Debt Management Section.

MAS:NRB:HTT:09130087

Attachments

Attachment I

Report to the BOARD OF AIRPORT COMMISSIONERSSubject: Airport Revenue Bond Issuance

Dated: September 24,2012

Los AngelesWorld Airports

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October 2,2012

The Honorable Antonio VillaraigosaMayor, City of Los AngelesCity Hall - Room 303Los Angeles, CA 90012

ATTN: Mandy MoralesLegislative Coordinator

RE: Airport Revenue Bond Issuance

In accordance with Executive Directive No.4, we are transmitting three (3) copies ofthe specified Board Report recommending approval and transmittal to the Los AngelesCity Council authorizing issuance of up to $1 billion in airport revenue bonds to pay forcapital expenditures related to various airfield and terminal projects, refinanceoutstanding Commercial Paper and to refund outstanding debt for savings. The bondswill not be obligations of the City of Los Angeles, but are limited obligations of LAWAand would be payable solely from and secured by a pledge of LAX revenues.

It is respectfully requested that your review be completed as soon as possible. It isanticipated that this item will be scheduled for Council's Trade, Commerce, andTourism meeting on October 22, 2012.

If you have any questions, please contact Marla Bleavins at (424) 646-5255. Councilapproval is required pursuant to Section 609 of the City Charter.

Sincerely,

.-~~

ina Marie Lindsey 7xecutive Director

GML:MSA

Attachments

cc: Miguel A Santana, City Administrative OfficerAttention: Natalie Brill

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Lv. A !!geles World Airports

Report to theBOARD OF AIRPORT COMMISSIONERS

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Approved by: ffyan P./a cubik, Director of Capital Development &

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Meeting Date:

September 24, 2012

D CompletedCAO Review: cgj Pending

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Reviewed for Dale AQQroval Status §JI.

Reviewed ~.P;' !'Ye. Mat, Chief Operating Officer

Capital Budget I 08124112

Operating Budget ! 08124112

CEGA j 08123112I

Procurement ! 08123112

IZlYON 0 NA DS

tsl YON 0 NA RW

IZI YON AE

lSIYON 0 Cond JPA

SUBJECT: Airport Revenue Bond Issuance

Authorize the issuance of Department of Airports of the City of Los Angeles, California, Los AngelesInternational Airport revenue bonds, in one or more series in an aggregate principal amount not toexceed $1 billion over an eighteen-month period; authorize the private sale of such bonds; selectunderwriting firms for such private sale; authorize use of a selling group consisting of the firms in LosAngeles World Airports investment banking pool; authorize the solicitation of a private placement ofbonds and/or a direct loan from a banking institution; and authorize preparation of all relateddocumentation and certain other matters and actions.

RECOMMENDA nONS:

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 (CEOA)pursuant to Article II, Section 2.f of the Los Angeles City CEOA Guidelines.

3. AUTHORIZE the issuance of revenue bonds in one or more series by Los Angeles World Airportsfor Los Angeles International Airport in an aggregate principal amount not-to-exceed $1 billion.

4. AUTHORIZE the private sale of revenue bonds in accordance with Charter Section 609(d).

Page ·1Airport Revenue Bond Issuance

5. APPROVE the selection of Siebert Branford Shank & Co., L.L.C.; J.P. Morgan Securities LLC;Citiqroup Global Markets lnc.; Morgan Stanley & Co. LLC; E. J. De La Rosa 8, Co., Inc.; SamuelA Ramirez & Company, Inc.; Cabrera Capital Markets, LLC; Loop Capital Markets, LLC; Stifel,Nicolaus &. Company, Incorporated (dba Stone & Youngberg (a division of Stifel Nicolaus); MerrillLynch, Pierce, Fenner & Smith Incorporated (dba Bank of America Merrill Lynch); Wells FargoBank, National Association and MR. Beal & Company as the underwriting firms for the sale of allor a portion of the bonds and the Department's entire underwriting pool as the selling group forthe various bond transactions (other than for transactions involving the private placement ofbonds and/or a direct loan from a banking institution).

6. AUTHORIZE the preparation of all documents and other matters related to the private sale of theBonds and a direct loan from a banking institution.

7. ADOPT the attached Board Resolution (Attachment A).

DISCUSSION:

1. Executive Summary

Staff requests authority to issue, in one or more series, up to $1 billion in airport revenue bonds(collectively, "Bonds") to finance various airfield and terminal capital projects and refinanceoutstanding Commercial Paper (CP). After careful consideration of a number of factors, mostnotably the critical role it plays in keeping borrowing costs low, staff recommends a private sale ofthe bonds based on the belief that it will provide greater benefit to Los Angeles World Airports(LAWA) than a competitive sale and requests authorization for such private sale. Staff alsorequests appointment of underwriting firms from LAWA's investment banking pool to market andsell the Bonds (other than for transactions that may involve a private placement of Bonds and/or adirect loan from a banking institution). Furthermore, to achieve a lower cost of borrowing, staffrequests authority to solicit proposals for a direct loan to refund a portion of the CP that isexpected to be issued to refund and defease the LAX Revenue Bonds 2002 Series A.

LAX currently has $3.51 billion of outstanding debt. The issuance of the Bonds over an 18month period in three transactions will substantially increase the principal amount of LAX'soutstanding debt by up to $1 billion resulting in higher debt service payments. LAX wouldthen have approximately $4.5 billion in outstanding debt if the full $1 billion were issued.Based on current forecasts, LAX's revenues will be able to support the debt service onthese Bonds and demonstration of its ability to do so is a legal requirement of issuing bondsunder LAX's bond indentures.

2. Prior Related Actions

On June 18, 2012, BOAC adopted Resolution No. 24835, establishing an Investment BankingPool to carry out financings for LAWA.

3. Current Action

Purpose of this. TransactionMajor and unprecedented capital improvements are currently underway at LAX. The financingplans for these improvements contemplate the use of multiple funding sources, including bond

Page 2AirpOl1 Revenue Bond Issuance

proceeds. In order to fund these capital improvements, staff requests authority to issue, in one ormore series, up to $1 billion in airport revenue bonds in three separate transactions. Part of theauthorization will be used to refinance outstanding CP issued to (a) pay for capital improvementinitiatives with an immediate need for funding and (b) refund the LAX Revenue Bonds 2002 SeriesA

Board and City Council authorization of the Airport's Revenue Bond issuance is required by theCity Charter and is the first of two steps required in issuing bonds. Staff must return to the Boardprior to issuing each series of bonds for approval of the necessary financing and disclosuredocuments. Included in these documents will be a detailed plan of finance and furtherdescriptions of the projects to be funded by bond proceeds. Staff currently expects to return tothe Board in October with these documents.

The approximate amounts of each transaction, type of bonds, and the projects to be funded byeach are indicated below. The series designations and amounts may change subject to marketconditions.

Transaction 1

!il One or more series of Bonds and a direct loan from a banking institution'" Issue Amount: approximately $350 million~ Type of Bonds: Alternative Minimum Tax (AMT) private activity, non-AMT private activity,

Tax-exempt governmental useWi Use of bond proceeds: To finance costs of improving or acquiring improvements in

terminals and to refinance non-AMT governmental CP, non-AMT private activity CP andAMT private activity CP.

Transaction 2

ru One or more series of Bonds~ Issue Amount: approximately $350 million" Type of Bonds: AMT private activity, Tax-exempt governmental use~ Use of bond proceeds: To finance costs of improving or acquiring improvements in

terminals, costs of various airfield improvements, and to refinance AMT private activity CPo

Transaction 3

" One or more series of Bonds" Issue Amount: approximately $300 million" Type of Bonds: AMT private activity, Tax-exempt governmental useM Use of bond proceeds: To finance costs of improving or acquiring improvements in

terminals, costs of various airfield and apron improvements, and to refinance AMT privateactivity CPo

Bond proceeds will also fund ancillary expenditures associated with the transaction such ascapitalized interest, reserve funds, the cost of underwriting the bonds, and costs of issuance(consultants' fees, attorney fees, rating agency fees, printing expenses, etc.),

Page 3Airport Revenue Bond Issuance

Authorlzation of Private Sa;eMunicipal bonds can be issued through either a competitive sale or a private sale (which includesa private placement of bonds) also referred to as a negotiated sale. In a competitive sale,underwriters submit sealed bids on a predetermined dale and the sale of the 'bonds is awa rded tothe underwriter providing the lowest true interest cost at that time. The winning underwriting firmthen sells the bonds to investors. In a negotiated public sale (as opposed to a private placementof bonds), the underwriters are selected prior to the sale of the bonds and have the opportunity towork with the issuer and other members of the financing team to determine the optimal structureand timing of the financing. The underwriter will act on the issuer's behalf to market and sell thebonds to investors with the goal of achieving the lowest cost of borrowing. Since a negotiated saleactively engages the services of the underwriters prior to the sale of the bonds, it provides anopportunity to educate investors and generate interest in the sale of the bonds as well as allowsgreater flexibillty in determining the timing of the sale. Both of these factors have the potential toreduce the costs of borrowing.

LAWA intends to solicit proposals from banks for a direct loan (private placement) to refund thenon-AMT governmental CP that is expected to be issued to refund and defease the LAX RevenueBonds 2002 Series A. This process differs from a negotiated public sale in that a bank purchasesthe bonds for its own account and does not reoffer them to the public. In a negotiated privateplacement of bonds, a banking institution will be selected pursuant to a competitive bid processthat will provide the Department with the best proposal taking into account the true interest costand considerations involving any covenant restrictions. Due to unique circumstances in thebanking industry, banks have been willing to purchase municipal debt obligations at extremelyattractive interest rates. The amount and length of time to maturity for these bonds are well-suitedfor a direct loan transaction. LAWA staff will be soliciting proposals from banks to determinewhether a private placement of portions of the Bonds will provide lower interest rates to LAWAthan a negotiated public sale WOUld.If in the event the proposals from the banks result in ratesthat are higher, LAWA will refund the non-AMT governmental CP through a negotiated public saleof bonds.

Section 609 (d) of the City of the Los Angeles Charter allows LAWA to sell revenue bonds througha competitive bidding process or through a private sale. The Chief Operating Officer (COO),acting in the capacity of the Chief Financial Officer, evaluated LAWA's options to issue the Bondsand determined that a private sale will provide the greatest benefit to the airport for the followingreasons:

~ Unique risks associated with airport revenue bonds. LAWA will be issuingrevenue bonds whose debt service will be paid from airport revenues. Investorsassociate these bonds with event risks such a~ terrorist attacks, economic downturnsand airline bankruptcies. For these reasons, airport revenue bonds can benefit fromthe extensive disclosure, rnarketinq and education on the issuer's financial conditionthat a private sa!e provides.

B Opportunity to expand investor base and potential to lower borrowing costs.Due to the extensive pre-marketinq effort, a private sale lends itself to maintainingand broadening the investor base for an issuer. As LAWA continues to issue moredebt, it is important that we generate higher levels of investor interest and maintain asteady stream of potential investors because it plays a critical role in keepingborrowing costs low.

Page 4Airport Revenue Bond Issuance

a Saie of AMl Private Activity Bonds. AMT private activity debt has historicallybeen difficult to sell and LAWA would be best served by selling these bonds in anegotiated sale,

Approval of UnderwritersAs part of the process of executinq a negotiated sale, LAWA must select underwriters topurchase and sell the publicly offered bonds. BOAC Resolution No, 24835 established aninvestment banking pool from which underwriters could be selected. A competitive Requestfor Qualifications (RFQ) process was used to select the firms for the investment bankingpool. Firms within the investment banking pool were distributed amongst the transactionsbased on their responses to a Request for Proposals (RFP),

Staff recommends the selection of the following firms from the established investmentbanking pool for the specified financings involving a negotiated public sale of Bonds, Thefirms recommended for selection were determined to be best suited for the transactions onthe basis of the quality, feasibility and appropriateness of their ideas for each financing:

~ Transaction 1 - Citigroup Global Markets Inc, (Senior Manager); Siebert BranfordShank & Co" LLC. (Co-Manager); Wells Fargo Bank, National Association (Co-Manager); and Cabrera Capital Markets, LLC (Co-Manager)

~ Transaction 2- E. J, De La Rosa & Co., Inc. (Senior Manager); Samuel A Ramirez &Company, Inc. (Co-Manager); Loop Capital Markets, LLC (Co-Manager); and J,P.Morgan Securities LLC (Co-Manager)

8 Transaction 3 - Morgan Stanley & Co, LLC (Senior Manager); Stifel, Nicolaus &Company, Incorporated (elba Stone & Youngberg (a division of Stifel Nicolaus) (Co-Manager); MerrJII Lynch, Pierce, Fenner & Smith Incorporated (dba Bank of AmericaMerrill Lynch) (Co-Manager); and M,R Beal 8l Company (Co-Manager)

Should one or more of the selected investment banking firms be unable to perform itsunderwriting functions for any reason, including, but not limited to, a change in its legalstatus, or staff decides to consolidate or change the purpose for a specified financing, thenstaff requests the authorization to be able to replace an underwriting finn, when appropriate,with one of the other preapproved firms, or to rearrange the firms allocated to a specificfinancing.

Firms within LAWA's investment banking pool which have not been selected as a senior orco-manager in a particular transaction will be used in a selling group during the time inwhich bonds are publicly sold to investors, A selling group participates in the selling ofbonds, but is not responsible for purchasing or underwriting unsold Bonds.

Additional ActionsTo facilitate issuing these bonds, staff will have to prepare certain documents and arrangefor various services including: legal services for preparing supplemental trust indentures,and Preliminary Official Statements, appointing Trustees, selecting printers for the OfficialStatements, acquiring municipal bond insurance (if necessary) and other actions deemednecessary to issue the bonds, These documents and specific actions, including actionsrelated to any private placement of Bonds, will be brought before the Board for approval at alater date prior to the sale of each series of the Bonds.

Page 5Ailporl Revenue Bond Issuance

Funding Altem3Jtiv0s for Capital ProjectsFunding Bradley West and the other capital projects requires the use of multiple fundingsources such as cash, grants, PFC collections and debt because the total amount requiredto fund the capital projects is far greater than the amount that is available from any singlefunding source. If these Bonds are not issued, LAW A will not be able to complete the capitalprojects on a timely cost effective schedule. Therefore, not issuing these Bonds is not aviable alternative.

Alternatives With Respect to Method of SOlieIn selecting the method of sale for the bonds, the COO evaluated the advantages anddisadvantages of competitive and negotiated sales. The COO decided that a negotiated salewould yield better results relative to a competitive sale because of the opportunity it affordsto pre-market the bonds in order to educate investors about LAX's credit, which has becomeespecially important in light of current market conditions. A competitive sale would notprovide the same opportunity to pre-market the bonds. An extensive pre-marketing effort islikely to generate higher levels of investor interest that could potentially lead to a lower costof borrowing for LAX.

FISCAL & ECONOMIC IMPACT STATEMENT:

LAX currently has $3.51 billion of outstanding debt. The issuance of the Bonds over an 18month period in three transactions will substantially increase the principal amount of LAX'soutstanding debt by up to $1 billion resulting in higher debt service payments". LAX wouldthen have approximately $4.5 billion in outstanding debt if the full $1 billion were issued.Principal and interest payments on the bonds will be recovered partially through landing feesand terminal rent charges. Based on current forecasts, LAX's revenues will be able tosupport the debt service on these Bonds and demonstration of its abllity to do so is a legalrequirement of issuing bonds under LAX's bond indentures.

Transactions costs slich as underwriting, consultant and attorney fees associated with theissuance of the bonds will be paid from bond proceeds. Some fees may be Initially fundedfrom the operating budget but will be reimbursed with bond proceeds once the bonds havebeen issued. Funds for these initial costs are available in the Fiscal Year 2012-13 LosAngeles World Airports Operating Budget, LAX Cost Center 1190005 - Finance and BudgetDivision, Commitment Item 520 - Contractual Services.

Although the revenue bonds will be used to fund several LAWA capital projects, theapproval of this action is to authorize issuance of revenue bonds so there is no impact onthe Capital Budget at this time.

Page 6AilpOlr Revenue Bond Issuance

STANDARD PROVdSIONS:

1. This action, as an administrative activity, is exempt from the requirements of the CaliforniaEnvironmental Quality Act (CEQA) pursuant to Article II, Section 2.f of the Los Angeles CityCEQA Guidelines.

2. The City Attorney has reviewed this item.

3. Actions taken on this item by the Board of Airport Commissioners will become final pursuant tothe provisions of Los Angeles City Charter Section 609 and Section ~11.28et Seq. of theAdminstrative Code.

4. This action is statutorily exempt from the provisions of the Living Wage/Service Contractor WorkerRetention Ordinances.

5. Procurement Services reviewed this action (File No. 5814). No specific MinorityNVomen BusinessEnterprise levels of participation were set for this project, as no subcontracting opportunities wereidentified.

6. The Selected Financial Underwriters will comply with the provisions of the Affirmative ActionProgram.

7. This action is not subject to the BTRC requirements of the City of Los Angeles. (FinancialInstitutions are exempt from City of Los Angeles BTRC requirements since "in-lieu" taxes are paidto the State of California- http://finance.lacity.org/contentiOtherExemptions.htm)

8. The Selected Financial Underwriters will comply with the provisions of the Child SupportObligations Ordinance .

. 9. This action is not subject to the insurance requirements of the City of Los Angeles.

~IO. This action is not subject to the provisions of Charter Section 1022 (Use of IndependentContractors).

11. This action is exempt from the provisions of the Contractor Responsibility Program pursuant to(CRP Rules/Regs Section K. 1.b- Contracts for the investment of trust moneys or agreementsrelating to the management of trust assets).

~12.This action is not subject to the provisions of the Equal Benefits Ordinance, pursuant to LosAngeles Administrative Code Section 10.8.2.1 (I)(2)(a).

13. The Selected Financial Underwriters will be required to comply with the provisions of the FirstSource Hiring Program for all non-trade LAX Airport jobs.

14. The Selected Financial Underwriters have each submitted the Underwriter Firms ContributionsForm 56 and will comply with its provisions.

Attachments:Attachment A - Authorizing ResolutionAttachment B - Report of the Chief Financial Officer Pursuant to Administrative Code Section11.28.4 relating to the private sale of the revenue bonds

Page 7Airpol7 Revenue Bond Issuance