02-13-2023 BPU RPT 04 - Laserfiche WebLink

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W A T E R E N E R G Y L I F E RIVERSIDE PUBLIC UTILITIES P UB LIC UTILITIES Board Memorandum BOARD OF PUBLIC UTILITIES DATE: FEBRUARY 13, 2023 SUBJECT: APPROVE A LEGAL BUDGET FOR THE LAW FIRM OF STRADLING YOCCA CARLSON & RAUTH IN AN AMOUNT NOT -TO -EXCEED $109,050 FOR SPECIALIZED LEGAL ASSISTANCE ISSUE: Consider approval of a legal budget for the law firm of Stradling Yocca Carlson & Rauth in an amount not -to -exceed $109,050 to defend the City in the case entitled Pongs v. City of Riverside, a reverse validation lawsuit challenging the validity of City -issued municipal bonds. RECOMMENDATION: That the Board of Public Utilities recommend that the City Council approve a legal budget for the law firm of Stradling Yocca Carlson & Rauth in an amount not -to -exceed $109,050 to defend the City in the case entitled Pongs v. City of Riverside, a reverse validation lawsuit challenging the validity of City -issued municipal bonds. BACKGROUND: On October 25, 2022 and November 8, 2022, the City approved resolutions authorizing the issuance of water revenue bonds in an aggregate principal amount not to exceed $70,000,000 for the benefit of the City's water utility. The law firm representing the City as bond counsel was Stradling Yocca Carlson & Rauth. On December 22, 2022, a lawsuit was filed against the City entitled Pongs v. City of Riverside, seeking to invalidate those resolutions. This lawsuit was brought pursuant to Code of Civil Procedure sections 860 et seq, and is known as a reserve validation lawsuit. DISCUSSION: City Charter section 702, "Eligibility, powers and duties of City Attorney," provides, in part, that "the City Council shall have control of all legal business and proceedings and may employ other attorneys to take charge of any litigation or matter or to assist the City Attorney therein." The law firm of Stradling Yocca Carlson & Rauth provides specialized legal services for the issuance of municipal debt and defense of reverse validation actions challenging the issuance of municipal debt. The City Attorney's Office does not currently have that specialized legal knowledge.