The city of Atlanta has decided to start over on the process of selecting underwriters of about $1.4 billion in bonds to finish an expansion at Hartsfield-Jackson International Airport. The decision comes after controversy erupted last year over the way the city chose the firms for the project.
The new interim chief financial officer under Mayor Kasim Reed, Roosevelt Council Jr., said the city issued a request for proposals for airport bond underwriter services Friday.
The goal "is to ensure transparency and eliminate any hint of controversy," according to an e-mail message sent by the interim CFO to City Council members Friday afternoon. The message also said that it is "critical that we move now to ensure the airport funding continues" for the international terminal.
The city plans to collect proposals by Feb. 5 and select the underwriting team Feb. 12, according to the e-mail. It plans to notify the City Council when it selects the underwriting team.
Reed is "committed to being open, honest and transparent," Council said. "This decision is really pretty much keeping in line with those core values."
City councilman C.T. Martin, who is now head of the council transportation committee that oversees the airport, said, "I think that's all right. I think that's a fair process."
Martin said the decision is in the hands of the city administration. Under the process last year, the councilman had advocated for a greater role for minority bond underwriters, including Grigsby & Associates and Rice Financial Products.
The city's investment and debt officer became concerned about a visit from Mr. Martin pressing the case.
After other developments, the city's then-chief financial officer asked the city Law Department for an investigation and said the council should pass a resolution if it wanted to change the structure of the deal.
The City Council last year postponed its decision on the deal until this month, after the new administration and council took over, saying it needed more information from the airport on the bond deal.
Martin said he plans to continue "taking a stand for minority contractors to build capacity.... Certain bond underwriters have controlled and dominated this business long enough."
But Martin also said he would not take the same steps as he did last year and "go through that again."
"The normal process is that the mayor's office manages and initiates all contracts,” Martin said. Once the city administration goes through the request for proposals process, it will make a recommendation to the council, “and we really can't start discussions until we see what they bring to us.”
Grigsby and Rice Financial could not be reached for comment. Merrill Lynch, which was selected as "bookrunner," or primary underwriter, in the earlier deal, declined to comment.
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