City council approved an amendment to its agreement with KNN Public Finance, LLC, extending the firm’s contract through October 2027 to allow for continued municipal financial advisory services. The amendment was agreed upon on Tuesday, Dec. 16.
The council passed the item to extend the current agreement by 18 months, beyond its original expiration date of April 2026. KNN has provided financial advisory services to the city since April 2021, supporting capital financing, debt management and other municipal financing activities.
City officials said the extension is intended to ensure continuity of service as Redlands prepares for a major debt issuance to fund construction of two public safety facilities: a new Police Department headquarters, known as Safety Hall, and a permanent facility for Fire Station No. 264. The combined financing for the projects is expected to range from $70 million to $105 million.
Under the amended agreement, KNN will continue to assist with debt structuring, City council workshops and public meetings, transaction documentation and closing, post-issuance reporting and continuing disclosure. The extension also provides time for the city to procure a successor financial advisory agreement, either with KNN or through a competitive selection process.
The amendment updates the firm’s compensation structure by replacing the existing hourly rates and transaction fee schedule with a revised fee schedule that will apply through the end of the extended term. City staff reported the revised rates reflect an approximate 20% increase over those established in the first year of the agreement in 2021.
The city’s original contract allowed for annual rate increases of about 3%, which would have resulted in an estimated 15% cumulative increase through 2025. Officials said the proposed adjustment represents an additional escalation of about 5% beyond that amount, consistent with broader market trends for professional financial advisory services.
The amendment also clarifies that all services related to the upcoming financing transaction will be covered under fixed transaction fees outlined in the agreement’s compensation section. All other terms and conditions of the existing agreement remain unchanged.
During a portion of the meeting where public comment was available, Bruce Laycook questioned the council on why it puts contract extensions on the consent calendar when there’s no public conversation about why the contract is being extended. “I don’t think approving a 20% increase in an existing contract without any conversation among the council members or explaining that to the public is a good practice,” Laycook said. “I would encourage you not to do that with agenda items like this going forward.”