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CC:HA:PA - ACTION ITEM: (1) Authorization to the City Manager to Pursue the Formation of a Joint Powers Authority (JPA) to Finance Existing City Obligations and Future Special Projects; (2) Approval of a Professional Services Agreement with Orrick, Herrington & Sutcliffe LLP for the Establishment of the JPA and Bond Counsel Services; (3) Approval a Professional Services Agreement with PFM Financial Advisors LLC for Financial Advisory Services Related to Lease Revenue Bonds; (4) Approval of a Professional Services Agreement with Ernst & Young U.S. LLP for Financial Analysis and (5) Other Direction to the City Manager as Deemed Appropriate.
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Meeting Date: March 16, 2026
Contact Person/Dept: Elizabeth Shavelson/Finance Department
Phone Number: (310) 253-5865
Fiscal Impact: Yes [] No [X] General Fund: Yes [] No []
Attachments: Yes [X] No []
Public Notification: (Email) Meetings and Agendas - City Council (03/12/2026); (Email) Ongoing Topics - Fiscal and Budget Issues (03/12/2026)
Department Approval: Lisa Soghor, Assistant City Manager (03/11/2026)
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RECOMMENDATION
Staff recommends the City Council, Housing Authority and Parking Authority: (1) authorize the City Manager to pursue the formation of a Joint Powers Authority (JPA) to finance existing City obligations and future special projects; (2) approve a professional services agreement with Orrick, Herrington & Sutcliffe LLP (Orrick) for the establishment of the JPA and bond counsel services; (3) approve a professional services agreement with PFM Financial Advisors LLC (PFM) for financial advisory services related to lease revenue bonds; (4) approve a professional services agreement with Ernst & Young U.S. LLP for financial analysis and (5) other direction to the City Manager as deemed appropriate.
BACKGROUND
On February 24, 2025, the City Council received the Fiscal Year 2024-2025 Mid-Year Budget update. During the presentation, the City Council was informed that based on current General Fund revenues and expenditures, the City’s 10-year forecast shows that the structural deficit first identified in the Fiscal Year 2023-2024 budget has widened, and the Fiscal Year 2024-2025 General Fund projected deficit was $35.5 million. It was reported that the structural imbalance in the City’s General Fund is on an unsustainable trajectory, and, without action, the City will exhaust nearly all reserves within the 10-year forecast window.
On March 10, 2025, the City Council directed the City Manager to include in the City’s Fiscal Year 2025-2026 budget funding for a $20 million residual receipts loan to Community Corporation of Santa Monica (CCSM) towards the cost of construction of the affordable housing portion of the Jubilo Village Project located at 4464 Sepulveda Boulevard, Culver City.
On March 17, 2025, the City Council, by unanimous consent, directed the City Manager to bring forward an item calling for a declaration of fiscal emergency, placing a one-quarter (1/4) cent sales (transaction and use) tax measure on a ballot and calling for a special all-mail ballot election on Tuesday, August 26, 2025, and to conduct polling on the viability of a proposed measure.
On April 14, 2025, the City Council unanimously adopted a resolution declaring a fiscal emergency and voted to hold a special all-mailed ballot election for voters to consider imposing a one-quarter (1/4) cent sales (transaction and use) tax measure (Measure CL).
On June 9, 2025, the City Council held a public hearing and adopted the Fiscal Year 2025-2026 Budget. The Adopted Budget included an $8 million contribution for the Jubilo Village Project which consisted of a $6 million loan from the Housing Authority Fund (Fund 476), $1,557,080 from the Affordable Housing Linkage Fee (Fund 439) and $442,920 from the General Fund. In addition, the Council adopted a resolution amending the City Council Policy Statement 5002 (Financial Policies) to establish a committed reserve fund titled “Jubilo Village Reserve” for the remaining $12 million anticipated to be distributed in Fiscal Year 2027-2028. To fund the committed Jubilo Village Reserve, the City Council adopted a resolution authorizing a decrease to the City’s Contingency Reserve below the established target of 30% of the General Fund Operating Budget for Fiscal Year 2025-2026. Council Policy Statement 5002 (Financial Policies) states “should the Contingency Reserve commitment be used, the City Manager shall present a plan to City Council to replenish the reserve within five years.”
On August 26, 2025, a special all-mailed ballot election was held and Culver City voters adopted Measure CL with 67.1% percent of the votes cast. The measure is estimated to generate approximately $5.6 million annually in additional general fund revenue. This new revenue will help offset the City’s deficit, but additional actions are needed to balance the City’s budget and replenish the City’s Contingency Reserve.
On February 14, 2026, the City Council held a day-long Special Strategic Planning Meeting and Financial Summit. As part of the discussion, the City Manager, along with representatives from Orrick, provided a high-level overview of the process to form a JPA and how the City could establish the JPA to issue lease revenue bonds using one or more of the City’s or Parking Authority’s parking structures as the leased asset.
This financial instrument was introduced for Council consideration as a mechanism to repay the General Fund and the Housing Authority for their past and future contributions to the Jubilo Village Project and create a separate fund to pay for other future special projects as identified by the City Council and approved by the JPA. The amount of the annual debt service to be paid from the City’s General Fund would ultimately depend on the amount of lease revenue bonds sold.
A copy of the JPA Lease Revenue Bond slide that was presented during the meeting is provided as Attachment 1.
DISCUSSION
Municipal Bonds are a common tool for local governments to raise revenues for planned projects. Lease revenue bonds are a type of municipal bond used to finance the construction of facilities using lease payments as the financial guarantee for investors who purchased the bonds used to finance the construction of the facility. In this proposal, the Bonds would be issued by the JPA as lease revenue bonds. The leased asset would likely be one or more of the parking structures owned by the Parking Authority or the City. Although the Bonds would be issued by the JPA, the City would be responsible for paying the debt service on the Bonds.
If Council wishes to move forward with the formation of a JPA and the sale of lease revenue bonds, the City needs to secure legal and financial consultants with specialized expertise in this area to help guide the City through the process.
Per Culver City Municipal Code Section 3.07.065.A., the City may award contracts in any amount for professional services based upon competitive quotations, whenever practical, as determined by the City Manager. Due to time limitations, it was determined that it was not practical to solicit formal competitive quotes. The City reached out and met with multiple firms for both bond counsel and financial advisory services. Based on this survey of the marketplace, staff recommends that the City Council authorize professional services agreements with Orrick and PFM.
Orrick is a national law firm with extensive experience forming JPAs and establishing lease revenue bonds in Southern California. Their clients include City of Los Angeles, County of Los Angeles, County of Riverside and County of San Diego. PFM is a national firm that commenced operations in 2016. It advises on debt management and portfolio optimization, transaction structuring and execution, capital and financial planning, credit analysis, policy development, and investor relations strategies. PFM is a registered Municipal Advisor with the Securities and Exchange Commission (SEC) and the Municipal Securities Rulemaking Board (MSRB). Both firms proposed competitive fee structures in alignment with industry standards. The fees for these services can be paid for entirely out of proceeds from the sale of the lease revenue bonds.
Orrick’s fees would be subject to a fixed fee of $25,000 for the work related to the JPA and a fixed fee of $175,000 for work related to the Bonds. Additional work performed by Orrick related to the Jubilo Village or other matters will be billed at an hourly rate of $800 for partners and $700 for associates.
PFM’s fees would be subject to a fixed fee of $75,000 for a transaction amount up to and including $50 million and $60,000 for a direct purchase bank loan or $65,000 for a commercial paper/revolving line of credit. Additional work performed by PFM for pre-transaction tasks, the development of an economic development fund or other tasks will be billed at an hourly rate based on the PFM personnel position assigned for a not-to-exceed amount of $50,000. Additional costs include data services fees and out-of-pocket expenses.
Representatives from Orrick and PFM will be present at the meeting to answer any questions Council may have.
If Council wishes to move forward with the JPA and lease revenue, staff recommends Council approve an agreement with Ernst & Young U.S. LLP (EY) to provide financial analysis including a comprehensive risk assessment for the City’s General Fund related to the proposed JPA and lease revenue bonds. EY estimates that the cost to perform this work will be $250,000. The City engaged EY to perform a financial condition and outlook analysis in advance of the City Council Strategic Planning Retreat and Financial Summit for a not-to-exceed amount of $50,000. Based on EY’s understanding of the City’s finances, their work performed to date and the proposed timeline for the JPA, it is not practical to solicit formal competitive quotes.
FISCAL ANALYSIS
The costs for the proposed agreements are not included in the Adopted Budget for Fiscal Year 2025-2026. The costs for the proposed agreements with Orrick, PFM and EY can be paid out of the bond proceeds as part of the costs of issuance. However, if the City does not move forward with the issuance of the bonds, the City will be responsible for paying the fees incurred prior to issuance which are estimated to be approximately $350,000.
If the JPA is established and lease revenue bonds are sold, the City will be required to make an annual debt service payment for the bonds out of the City’s General Fund (Fund 101). This payment would be included in future fiscal year budgets. The City’s annual debt payment as well as timing of the initial payment will depend on the amount of bonds sold and the terms of the agreement. If Council wishes to engage Orrick, PFM, and EY to initiate the JPA and potential revenue bond issuance, staff will return to Council for further direction prior to any further action.
ATTACHMENTS
1. 2026-03-16_ATT_1 - JPA Lease Revenue Bond slide
recommended action
MOTION
That the City Council, Housing Authority Board and Parking Authority Board:
1. Authorize the City Manager to pursue the formation of a Joint Power Authority (JPA) to finance existing City obligations and future special projects;
2. Approve a professional services agreement with Orrick, Herrington & Sutcliffe LLP for the establishment of the JPA and bond counsel services;
3. Approve a professional services agreement with PFM Financial Advisors LLC for financial advisory services related to revenue lease bonds;
4. Approve a professional services agreement with Ernst & Young U.S. LLP for financial assistance services;
5. Authorize the City Attorney to review/prepare the necessary documents;
6. Authorize the City Manager to execute such documents on behalf of the City; and
7. Provide other direction to the City Manager as deemed appropriate.