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RE 2000-10-24.2 RESOLUTION NO. 20001024.2 A RESOLUTION OF THE CITY OF COPPELL, TEXAS, EXTENDING THE ARBITRAGE INVESTMENT REBATE SERVICES AGREEMENT WITH ALAN JOHNSON, CPA FOR AN ADDITIONAL FIVE YEAR PERIOD; AND AUTHORIZING ITS EXECUTION BY THE CITY MANAGER. WHEREAS, the City Council previously designated Alan Johnson, CPA as the municipal bond arbitrage rebate services for the City of Coppell, Texas; and WHEREAS, the City entered into an Arbitrage Investment Rebate Services Agreement with Alan Johnson, CPA which granted the City the option to extend the Arbitrage Investment Rebate Services Agreement for additional five-year period; and WHEREAS, the City Council deems it in the best interest to extend the Arbitrage Investment Rebate Services Agreement with Alan Johnson, CPA for an additional five-year period; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COPPELL, TEXAS, THAT: SECTION 1. The Arbitrage Investment Rebate Services Agreement by and between the City of Coppell, Texas and Alan Johnson, CPA dated October 10, 1995, be and the same is hereby extended under the same terms and conditions as set forth in the attached Exhibit "A", which is incorporated herein as if set forth in full, for an additional five-year period commencing on October 10, 2000, and continuing through October 10, 2005. SECTION 2. The City Manager is authorized to execute any documents necessary to effect the extension of the aforesaid Arbitrage Investment Rebate Services Agreement. SECTION 3. This Resolution shall become effective immediately from and after its passage. 1 36504 DULY RESOLVED AND ADOPTED by the City Council of the City of Coppell, Texas, on this the 24th day of October, 2000. CITY O COPPELL, TEXA S CANDY SHEEHAN, MAYOR ATTEST: LIBBY BALL, CITY SECRETARY (PGS/ttl/cdb 10/12/00) 36504 PROPOSAL AND AGREEMENT FOR ARBITRAGE INVESTMENT REBATE SERVICES BY AND BETWEEN CITY OF COPPELL, TEXAS (Hereinafter Referred to as the "Issuer") ALAN JOHNSON, CPA It is understood and agreed that the Issuer, in connection with the sale and delivery of certain obligations as listed in Appendix A attached hereto (the "Obligations"), will have the need to determine to what extent, if any, it will be required to rebate investment earnings of the proceeds of the Obligations to the United States of America (hereinafter referred to as "Rebatable Arbitrage") pursuant to the provisions of Section 148(f)(2) of the Internal Revenue Code of 1986 (the "Code"). We have been requested to provide professional services to the Issuer as such services may be necessary to effect this determination and we are pleased to submit the following proposal for consideration. This proposal, ff accepted by the Issuer, shall become the agreement (the "Agreement") between the Issuer and Alan Johnson effective at the date of its acceptance as provided for herein below. 1. This Agreement shall apply to the Obligations described in Appendix A attached hereto during the period in which this Agreement shall be effective. Provisions of Alan Johnson, CPA 2. We agree to provide our professional services and our facilities in the creation and maintenance of records useful to or necessary in the determination of Rebatable Arbitrage with regard to the Obligations. The Issuer will assume and pay the fee of Alan Johnson, CPA as such fee is set out in Appendix A attached hereto. Alan Johnson, CPA, shall not be responsible for any extraordinary expenses incurred in connection with providing such professional services, including any costs incident to litigation, mandamus action, test case or other similar legal actions; unless Alan Johnson, CPA is a party to such litigation and a claim is asserted against Alan Johnson, CPA for work performed under this Agreement. 3. We agree to perform the following duties in connection with providing arbitrage investment rebate services: a. To cooperate fully with the Issuer in reviewing the schedule of AGG07315 ElrltlBIT uAlt investments made by the Issuer with (i) proceeds ~rom the Obligations, and (ii) proceeds of other funds of the Issuer which, under Temporary Regulations Section 1.148 or Temporary Regulations Section 1'103- 15AT(b)(6) or any successor regulations thereto, are subject to the rebate requirements of the Code; b. To perform, or cause to be performed, calculations no less freque.nfiy than once a year, consistent with the Code and the regulations promulgated thereunder, regarding the mounts of Rebatable Arbitrage from the investment of funds subject to the requirements of Section 148(0(2) of the Code; c. To assist the lssuer in preparing schedules, records or other information necessary to enable Alan Johnson, CPA to perform the rebate calculations as set forth in this Agreement; d. To provide a report to the Issuer specifying the amount of Rebatable Arbitrage based upon the investment schedule, the calculations of bond yield and investment yield, and other information deemed relevant by Alan Johnson, CPA. e. To provide the Issuer any other services related to the calculation of rebate as it may request Alan John.qon, CPA to perform. Provisions of the Issuer 4. In connection with the performance of the aforesaid duties, the Issuer agrees to the following: a. That Alan Johnson, CPA will be compensated for the performance of services with respect to calculating and advising the Issuer of the amount of Rebatable Arbitrage in accordance with the schedule set forth in Appendix A attached hereto. b. That the Issuer will provide Alan Johnson, CPA and Alan Johnson, CPA shall be entitled to rely upon, all information regarding the issuance of the Obligations and the investment of the proceeds therefrom, and any other information necessary in connection with calculating the amount of Rebatable Arbitrage. In particular, the Issuer shall furnish to Alan Johnson, CPA the information set forth in Appendix B attached-hereto. c. That the Issuer will inform Alan Johnson, CPA of the retirement, prior to the scheduled maturity, of any Obligations included under the scope 2 AGG07315 of this Agreemere within 30 days of such retirement. This notification is required to provide sufficient time to comply with Section 1.1481T(b)(3)(ii) of the arbitrage regulations which requires final payment of any Rebatable Arbitrage within 60 days of the final retirement of the Obligations. 5. In providing the services set forth in this' Agreement, it is agreed that Alan Johnson, CPA shall not incur any liability for any error of judgment made in good faith by a responsible officer or officers thereof, unless it shall be proved that such error ofjudo~nnent was a result of the negligence or willful misconduct of said officer or officers. Alan John.~on, CPA shall only be liable for penalty and interest resulting from such error of judgment. 6. The fee and expenses due to Alan Johnson, CPA in providing arbitrage investment rebate services shall be calculated in accordance with Appendix A attached hereto. The fees for year one of this Agreement will be paid upon delivery of any or all completed reports for issuance years 1991, 1992, 1993 and 1995. In subsequent years, the fees will be payable annually upon delivery of the report prepared by Alan John-qon, CPA for each Obligation during the term of the Agreement unless terminated earlier. Obligations Issued Subsequent to Initial Contract 7. The services contracted for under this Agreement will automatically extend to any additional financing obligations (including financing lease obligations) issued during the stated term of this Agreement, if such obligations are subject to the rebate requirements under Section 148(f)(2) of the Code. In connection with extending the scope of this Agreement to additional financing obligations, the Issuer agrees to the following: a. The lssuer will notify Alan Johnson, CPA of any financing obligations (including financing lease obligations) issued by the Issuer during any calendar year of this Agreement, and will provide Alan Johnson, CPA with such information regarding such other obligations as Alan Johnson, CPA deems necessary in connection with its performance of the arbitrage rebate services contracted for hereunder. b. At the option of the lssuer, any additional financing obligations issued subsequent to the execution of this Agreement may be excluded from the services provided for herein. The Issuer must notify Alan Johnson, CPA in writing of their intent to exclude any specific financing obligations from the scope of this Agreement. Election to Pay Penalty in Lieu of Rebate 8. The services contracted for under this Agreement will automatically extend to any additional financing obligations issued during the stated term of this 3 AGG07315 Agreement, if an election was made (prior to delivery of the Obligations) to pay penalty in lieu of rebate for a qualified construction bond issue under Section 148(f)(2) of the Code. In connection with extending the scope of this Agreement to include computations of penalty, the Issuer agrees to the following: a. The Issuer will notify Alan Johnson, CPA of any financing obligations issued by the Issuer during any calendar year of this Agreement for which a penalty election was made. The Issuer will provide Alan John.~on, CPA with such information regarding the investment and expenditure of such obligations as Alan John,~on, CPA deems necessary in connection with its performance of the penalty calculation services contracted for hereunder. b. At the option of the Issuer, any additional financing obligations issued subsequent to the execution of this Agreement may be excluded from the services provided for herein. The Issuer must notify Alan John-qon, CPA in writing of their intent to exclude any specific financing obligations from the scope of this Agreement. Effective Dates of Agreement 9. This Agreement shall become effective at the date of acceptance by the lssuer as set out herein below and remain in effect thereafter for a period of five (5) years from the date of acceptance, provided, however, that this Agreement may be terminated with or without cause by the Issuer or Alan Johnson, CPA upon thirty (30) days' written notice. In the event of such termination, it is understood and agreed that only the mounts due to Alan John-qon, CPA for services provided and expenses incurred to and including the date of termination will be due and payable. No penalty will be assessed for termination of this Agreement. In the event this Agreement is terminated prior to its stated term, all records provided to Alan John~qon, CPA with respect to the investment of monies by the Issuer shall be returned to the lssuer as soon as practicable. In addition, the parties hereto agree that upon termination of this Agreement, Alan Johnson, CPA shall have no continuing obligation to the Issuer regarding any service contemplated herein. 10. This Agreement is submitted in duplicate ori~nals. When accepted by the Issuer, it, together with Appendices A and B attached hereto, will constitute the entire Agreement between the Issuer and Alan Johnson, CPA for the purposes and the consideration herein specified. 4 AGG0~15 Acceptance will be indicated on both copies and the return of One executed to Alan Johnson. CPA. Respectfully submitted, ALAN JOHNSON, CPA By: Ai~~j,,~o~~CpA Date: 5 AGG07315 PLEASE CHOOSE AND EXECUTE THE APPROPRIATE OPTION Acceptance Not ReQuiring Board Approval: The above and foregoing is hereby in all things accepted and approved by the , on this day of ,19._. By:. Authorized Representative Tifie Acceptance Requiring Board Approval: ~ , on this 19.~;pursuant to the provisio~ of ~,^~c, lutlc, r. No,. , passed and approved by the Members of the ,c2 7~ on ,19--. /- Authorized Representative Title 6 AGG07315 Dated Description Annual Fee 1/1/91 $12,495,000 General Obligation Refunding $1,500 Bonds Series 1991 1/1/91 $7,965,000 Waterworks and Sewer System $1,500 Revenue Refunding Bonds, Series 1991 6/1/91 $2,500,000 Waterworks and Sewer System $1,500 Revenue Bonds, Series 1991A 9/1/91 $800,000 General Obligation Bonds, Series 1991 $1,500 9/1/92 $2,525,000 General Obligation Bonds, Series $1,500 1992 9/1/92 $500,000 Certificates of Obligation, Series 1992$1,500 9/1/92 $2,000,000 Waterworks & Sewer System $1,500 Revenue Bonds, Series 1992 5/1/92 $5,000,000 Special Assessment Bonds $1,500 3/15/93 $8,485,000 General Obligation Refunding Bonds, $1,500 Series 1993 6/1/93 $6,044,374 Unlimited Tax and Revenue $1,500 Refunding Bonds, Series 1993 1/31/95 $4,720,000 Certificates of Obligation, Series 1995$1,500 1/31/95 $6,900,000 Waterworks and Sewer System $1,500 Revenue Bonds, Series 1995 9/1/95 $1,170,000 General Obligation Bonds, Series $1,500 1995 9/1/95 $2,830,000 Certificates of Deposit, Series 1995A$1,500 The fees for the above-captioned Obligations will only be payable if a computation is required under geetion 148(0(2) of the Internal Revenue Code of 1986, as amended. In the event that any of the above-captioned Obligations, or any other Obligations added subsequent to the date of this Agreement, comply with an exclusion to the computation requirement as defined by Section 148 of the Internal Revenue Code or related regulations, the specified fee will be waived by Alan Johnson, CPPh For example, certain obligations are excluded from the rebate computation requirement ff the proceeds are spent within specific time periods. In the event of the above-captioned Obligations fulffil the exclusion requirements of the Internal Revenue Code or related 7 AGG07315 regulations, the specified fee will be waived by Alan Johnson, CPA. The fee for Arbitrage Investment Rebate Services of any additional obligations to be added to this contract shall be: $1,500 for each issue of General Obligation bonds, regardless o1~ issue size; $1,500 for each issue of Revenue bonds~ regardless of issue size; and $2,500 for each issue of Variable/Hoating Rate bonds, regardless of issue size. The above fees are payable annually upon delivery of the report prepared by Alan Johnson, CPA, commencing October 1, 1995 for the Issuer's fiscal year 1996 and on each computation date thereafter during the term of the Agreement, unless terminated earlier. The fees for computations of Rebatable Arbitrage which encompass more, or less, than one full year of investment data performed during the same computation period shall be prorated to reflect the longer, or shorter, period of work performed during that period. The fee for Arbitrage Penalty Calculation Services contracted for under this Agreement shall be: $750 semiannually for each issue of bonds, regardless of the type of issue. 8 AGG07315 The following information must be provided for each bond issue requiring an arbitrage rebate calculation. Most of this information can be accumulated at the time the bonds are issued and sent to Alan Jo. hnson, CPA as part of the delivery of the bon.ds. We recommend that information related to investment activity be forwarded on a periodic basis. This will allow Alan Johnson, CPA to enter and review the investment detail in advance of the computation date required under federal law. In this manner, the time required to complete the computation and issue the related report can be reduced. For each bond issue, please obtain the following information to be sent to Alan Johnson, CPA: Copy of Official Statement for the issue. If no Official Statement is prepared on the issue, a copy of the bond resolution, indenture, ordin_artce or similar official transcript describing the issue will be needed. Copy of Winning Bid Form and Underwriter's Certificate as to Yields. This information is only required when the bond issue was sold on a competitive basis. If the sale was negotiated, the Final Official Statement normally provides the information required to properly compute the arbitrage yield. If the issue was sold competitively, the winning bid form and underwriter's certificate are needed to obtain information regarding the interest rates and initial offering yields to the public. Copy of Form 8038 (Informational Tax Form). This form is normally prepared by bond counsel as part of the closing documents. A copy of this form must accompany any rebate payments filed with the Internal Revenue Service. Description of Funds created for the Bond Issue. To ensure that we have properly addressed the distribution of all funds and the related arbitrage requirements, it is useful for us to obtain a description of the various funds created by the bond issue. In the official documents supporting the issuance of the bonds (e.g., Official Statement), there is normally a narrative section outlining the funds for which bond proceeds and other monies may be deposited. Copy of "No-Arbitrage Certificate.* This certificate, although frequently called by another name, describes the federal tax law requirements, the Issuer must follow to comply with various arbitrage laws. This document permits us to evaluate the specific tax compliance requirements established by Bond Counsel at the time the bonds were issued. Investment Transaction Information. The computation of the rebate amount for excess investment earnings requires very detailed investment records. In order for us to compute the rebate amount, it is necessary that you forward investment information which includes the following data: 9 AGG(r7315 · Source of funds for purchasing the investment (e.g., Construction Fund, Reserve. Fund, Debt Service Fund) · Description of security purchased · Date purchased · Maturity date · Maturity value of security (par value/face value) · Purchase price of security showing both the cost of principal as well as any accrued interest paid · Coupon rate (interest rate) and frequency of interest receipts · Yield to maturity (required for discount securities) · Sale date, ff sold prior to maturity · Sales price of both principal and interest, if sold prior to maturity The best documentation available for the information listed above are copies of the actual trade confirmations provided when the security is purchased or sold. The trade confirmation should contain all of the information we will require and should be the only doc~mentation you would have to provide us. ff trade confirmations are not available, or are too cumbersome to accumulate, your internal investment records would be sufficient for our purposes as long as the information described above can be obtained from your records. Bank Statements for Interest-Bearing Checking Account. In many situations, an interest- bearing checking account is used to hold maturing investments and miscellaneous fund balances until the proceeds are either reinvested or used on a specific project. The rebate computation requires that all funds related to a bond issue be tracked. It will be necessary therefore, for us to obtain the monthly bank statements related to any interest-bearing checking account in which bond proceeds or related funds were deposited. Trustee Statement. (If Trustee is used to invest bond proceeds). 10 AGG{YB15