LOS ANGELES — Los Angeles withdrew two requests for proposals seeking financial advisors last week, saying a technical glitch limited the pool of applicants.
FirstSouthwest sent the city a seven-page letter Nov. 15 protesting the fact that underwriters were restricted from applying.
City officials said the re-released RFPs will be posted on the city’s website today with new deadlines for applying, but the only change is related to technological instructions.
“The only factor in canceling the RFPs was a technical glitch in the contracting process,” said Natalie Brill, the city’s debt manager.
The city does a new RFP for financial advisors every three years. It has 11 financial advisors in its current pool.
It was seeking a general financial advisor and one specifically to work on bond issuance related to the city’s wastewater department.
The only change to the RFPs will be to clarify the use of the business virtual assistant, Brill said.
FirstSouthwest’s letter protested language in two RFPs seeking financial advisors for the city that excluded firms “that underwrite or otherwise trade in municipal bonds.”
That language appears in the qualifications section of an RFP seeking a financial advisor to work on the city’s general obligation bonds and the city’s wastewater system revenue bonds.
Brill wouldn’t comment on the FirstSouthwest letter.
Los Angeles’ debt management policy, adopted in 2005, deems it a conflict of interest for firms to do business with the city as both an underwriter and financial advisor.
But Brian Whitworth, a senior vice president for FirstSouthwest, told The Bond Buyer for a previous article that the debt policy posted on the debt management department’s website is less restrictive than what was in the RFPs.
“We received no response at all to the letter,” said Jack Addams, vice chairman of FirstSouthwest.
The protest letter was sent to Brill; City Administrative Officer Miguel Santana; City Attorney Mike Feuer; and Paul Krekorian, chair of the City Council Budget & Finance Committee.
“I hope they issue new RFPs and all qualified firms are encouraged to bid,” Addams said.
The city was slated to release the names of the firms that made its short list for the RFPs last week.
FirstSouthwest wanted the city to remove the language in the first RFP and in another seeking a financial advisor for eight different bond categories — including general fund lease financing and tax anticipation notes — in which the city explains that while it has “in the past, accepted proposals from investment banking firms to act as financial advisors, the city now only hires independent financial advisor for general financial advisory services and the city’s various bond programs.”