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Home My WebLink About2/18/2009 - STAFF REPORTS - 2.M. FO 7 A`M S.. ; �y u H CITY COUNCIL STAFF REPORT )FORN`P DATE: February 18, 2009 Consent Calendar SUBJECT: AMEND CONTRACT WITH WILLDAN FINANCIAL SERVICES FOR ARBITRAGE REBATE SERVICES FROM: David H. Ready, City Manager BY: Department of Finance and Treasury SUMMARY Willdan Financial Services has been providing the City of Palm Springs with arbitrage rebate services for several years. Agreement A5507 was approved by the City Manager under his authority for a three-year period from 6/04107 through 6/04/10, for an amount not to exceed $24,000.00. It has been brought to our attention by Willdan that the IRS requires additional audits not covered by the original agreement at an additional cost of$6,000. RECOMMENDATION: 1. Amend the contract with Willdan Financial Services by increasing the not-to- exceed amount to $30,000. 2. Authorize the City Manager to execute all necessary documents STAFF ANALYSIS: Willdan Financial Services performs arbitrage rebate consulting and report preparation services to determine the cumulative liability pursuant to section 148(f) of the Internal Revenue Code on various City bond issues. Willdan recently identified that certain installment and final computations will be required on four bond issues that were not included on "Exhibit B: Fees for Services" of the original contract. These computation reports fall within the Scope of Services as identified in Exhibit A. The IRS requires that these reports be prepared. ITEKA NO. Z City Council Staff Report February 18, 2009 -- Page 2 Willdan contract amendment FISCAL IMPACT: All of the costs of this increase to the contract will be borne by the Assessment Districts or the Redevelopment Agency. There is no General Fund Impact. Geoffrey S. KITTehl Thomas Wils� fl Director of Finance and Treasurer Assistant MManager David H. Ready City Manager Attachments: EG W`' WI LLDAN I your drng T Financial Services reach G�5�6.- it 192.1 �ah.l✓��4✓r. December24,2008 DEC 2 9 2008 Mr. David Ready City Manager City of Palm Springs P.O. Box 2743 Palm Springs, CA 92263-2743 RE: Addendum to Provide Arbitrage Rebate Calculation Services to the City of Palm Springs Dear Mr. Ready: Enclosed please find two copies of an addendum to our existing Agreement dated June 4,2007. Please sign both copies, returning one in the envelope provided for your convenience. We look forward to continuing our relationship with the City of Palm Springs and working with you and your staff. If you have any questions, please do not hesitate to contact me directly at(800)755-6864. Very truly yours, Willdan Financial Services(formerly MuniFinancial) Anne Pelej,Vice President roup Manager Federal Compliance Group Enclosure Engineering I Geotechnical I Environmental I Financial I Homeland Security 951.597.3500 1 $00-755.6864 1 fax 951.587.3510 1 27368 Via Industrla,Suite 110,Temecula,CA 92590 1 www-willdan-wm 9yY c➢ WIending ILLDAN Financial Services reach January 23, 2009 JAN 2 6 2009 Mr. Geoffrey Kiehl Director of Finance City of Palm Springs P.O. Sox 2743 Palm Springs, California 92263-2743 RE. Arbitrage Rebate Services Contract Amendment Dear Mr. Kiehl: An amendment to the Contract dated June 4, 2007, for additional Services, is necessary to comply with IRS arbitrage rebate requirements. The IRS requires an arbitrage computation every 5`h bond year(installment computation) and on the final computation date of the issue. We will need to prepare installment computations for 3 issues and a final computation for 1 issue(see table below). Original Next Next —Principal Issue Name Report Installment Next Fee $9 075,000.00 Merged Pro ect#2,TARS, 2004 Ser 8 5/1/2009 5/1/2009 $7,500.00 $14,240,000.00 Merge Project#1,TARB,2004 Ser A 5/1/2009 5/1/2009 $1,500,00 $3,725 OD0.00 98 Ltd 06. Rev,Ser A AD 155 Refi 9/2/2009 9/2/2009 $1,500.00 $1,300,000.00 AD#162 12/1/2009 12/1/2009 $1,500.00 *Final Computation Upon review of the original amendment, we recognized the additional reports that fell within the contract term of June 4, 2007 tbru June 4, 2010 were not included.A Contract Addendum dated December 24, 2008 was prepared to account for the additional Services. Please let me know if you have questions or concerns. Thanks again for your attention to this matter and have a nice day. Regards, Willdan Financial Services James Ward, Analyst II Federal Compliance Group Engineering I Geotechnical I Envrconmenml I Financial I Homeland Security 951.567.35oo 1 800-755-6864 1 fax:951.587.3510 1 27368 Via Industria,Suite 11o,Temecula,CA 92590 1 www.willdan.cdri �-' ADDENDUM TO AGREEMENT The agreement between Willdan Financial Services and City of Palm Springs, dated June 4,2007 (hereinafter the"Agreement")is amended as follows: The Agreement is amended to include the following additional issue/reports and fees: PRINCIPAL ISSUE N EXT IssUE NAME AMOUNT DATE REPORT � '.t9:aklr;: `3r•- - A•,f.? rr,;-, : ;:;>'} :}i,_ : ri-.�' - 'si:. t, r, xNocar. n ,fu '8aiid., g. - i;:: �.:•, - .=�' - - '$g.075;D01);*'�.' `I�lo'eGt'#2'2004`Se)1e5t$r s%r,•r - ^'I :,r;, r,n...a.f - .at 'w, r,.,,,:� i:': - :.r.'a •'Tax-A11orafioo'Refundirtyy;Bonds .Mery�ed.:.. - ,,w ,;;d,„1:d2'40.AOti:r ::6176/�004 'bw 4i . a„ tF6i . 19981im fioi$" 'e`en a 30119 li`''. i Yn ries ft - ssass erif=District# 62 '' ila's In Old:; 92l 120 9:'FII; r Y50 ( ,.;�,''„ 9 0 ->'$ _ All other terms and conditions contained in the Agreement shall remain in full farce and effect. Executed this December 24,2008. Willdan Financial Services City of Palm Springs (formerly MuniFinancial) By By: Anne Pelej David Ready Vice President&Group Manager City Manager Date: Date: Willdan Financial Services City of Palm Springs ADDENDUM TO AGREEMENT The agreement between Willdan Financial Services and City of Palm Springs, dated June 4, 2007 (hereinafter the"Agreement')is amended as follows: The Agreement is amended to include the following additional issue/reports and fees: AMOUNT DATE IssuE NAME PRINCIPAL ISSUE N EXT FEE - s.,Tax'f411ocatioh,Rfiindm;'6o'ds1e god� . r1 Gil? .!. - � '9'ti 'Ol)0 ` ' '1 2U Pro• '#262004:Seii9 `,B ,.1,'• :`,i.. %, ..1. ,9 b: .:•lr mt Ai�rj :,;7i.: ..,M..!/'� - :'i,_ y. l °.Taic`Nlis`datiori.Refu - q. 9 .lr. . ti� % fin ' 4i3t)0 •.;.�;.. ° .. „ _• iP. 1. Q4` e3'.A ,:rr,i es. •"a:_ _ ` a, . 1 Gi "ited OWi s 99$ m Cron. due; ,•r>ds' -:i`' `' r`, _ - - 2 Sers YC°Ad#a,$5 Boiid.ftefinanGn •,�:.; , �_.. ._�,-,9. °Ass"sment Di -rvll e$ str< ..962 fie'Villa`s'1riDJd'' .� - 1§" O'000::, i'zl3izo tPaUn All other terms and conditions contained in the Agreement shall remain in full force and effect. Executed this December 24,2008. Willdan Financial Services City of Palm Springs (formerly MuniFinancial) By: By: Anne Pelej David Ready Vice President& Group Manager City Manager Date: Date: Willdan Financial Services city of Palm Springs �1 EXHIBIT A: SCOPE OF SERVICES Phase One —Setup • An analyst will be assigned by MuniFinancial to manage the arbitrage rebate consulting activitics. • The analyst will review those tax-exempt financings subject to the federal compliance regulations and discuss the work plan. • The analyst will review pertinent documents relating to the debt to confirm that the financing is subject to the arbitrage rebate requirements and identify relevant exceptions, elections, and yield restrictions. • The subject bond issues will be loaded into MuniFinancial's proprietary tracking system with their respective target calculation dares. • Bond documents and cash flow information required for the reports will be collected. Phase Two-- Report Preparation The analyst shall perform the following activitics to determine the cumulative arbitrage Lability pursuant to Section 148(f) of the Internal Revenue Code: • Calculate the bond yield and identify all gross proceeds and transferred proceeds(advance refunding issues) allocated to the issue. • Compare allowable arbitrage earrings to actual earnings to deters tine cumulative arbitrage liability. • Review and consider application of alternative regulatory provisions that mayimprove the arbitrage liability. • Verify that two senior analysts review the calculation and summary findings. • Upon request, MuruFinancial will engage the services of tax counsel and an independent legal opinion shall be rendered. • A comprehensive rebate report will be produced and inciudc the following: ✓ Computation Summary, ✓ Arbitrage/Investment Yield ✓ Summary Analysis of all relevant dates Comparison Graph, and assumptions, ✓ Rebate Calculations by fund, ✓ Sources and uses of funds, ✓ Outstanding Investments ✓ Arbitrage yield and yield restriction Summary, and requirements, ✓ Preparation of IRS Form 8038-T ✓ Rebate liability by fund and aggregate and filing instructions. liability for the issue, A fgli EMIdneial Page 7 co,of P"W Spmrgr v Phase Three — Ongoing Additional Support MuniFinancial's support does not end with report production.MuniFinancial analysts shall be available throughout the agreement period for the following activities: + Review current policies and procedures for tracking expenditure and investment earnings allocations. If these systems do not provide sufficient detail to adequately calculate and monitor rebate liability,MuniFinancial will make recommendations to assist in complying with all applicable Federal Regulations. • MuniFinancial will keep abreast of enforcement actions and Code/Regulation changes that may affect arbitrage compliance requirements.Retroactive changes requiring recalculation of previously submitted arbitrage report shall be performed at our hourly rates. • Assist staff in the event of a rebate calculation audit- • Upon request,Mur0inancial will consult with respect to structuring of new bond issues and other matters that will affect any eventual arbitrage liability- Client Responsibilities The analyst will need the following documents and financial information: • Official statement, • ;Tax Certificate (Arbitrage Certificate, Non-Arbitrage Certificate), • IRS Form 8038-G (governmental) or Form 8038 (private activity), • Escrow Verification (refunding issues only), • Cash/Asset and Investment Activity Statements (or internal records of expenditure and earnings activity),and • Current balances on funds held by the City. Munif"ivannal Page 8 OP,of Palm Springy EXHIBIT B: FEES FOR SERVICES . . ,: ' Nyi. , yiy v 'F „jYr:�y:ii.t45}n';ei . ci. �r .1 +•ny" ,r 1"- ,� '_.:y ilv r r ,,Tm _"rip F,2 !iR'M,?I Fi +iP . .l^r�l' �?yp,��'•t�:g'1�.��u:}l;`�..'::y„'r,.,:�j' Ci�91:r({� ,wy;�,n,^,,'yal'viy.�;c.{",,y:.i M'T,,,m'v�a �`;'.4�,i _ •Rfl qf+,�•q a, �,. n+y,: A..a, .,.LeaA'indrp;ii;lei:n,„a:.'N "'-'�r'?.r"R1�•v � .".w"i ,.ti,.'wi �F'`n !tT!.��M�rrv,e k${'nh."f� a.',ci,'.:"r'6 n,ed�,�•, -. ,i�.,.: °`!Fi 1.`✓. � A" iuf,e V'1,Sy+f,l,�l `Al 1 tA,•f A 4 rri'y0.C1,Ai: .. A��Fa� ..V¢, ,is(n,.:'..�,��.'+,;.u.= yr'S jgdc.- (.vbM-',.;,_ - ". "d+;.ki'�. ..,i-.. :,y•. ,yr• _ AI*W. =Paps9rt9. ReVHrYue;SeYies98"1?Sie jbh8l�Al �d# - s� "997•Lease"Rev e,nds7Ret ynding`B'o,nd , ] ti � ' $g2r300000.Ol) '."�. ; ,.'IOf2211397,':,`., , '''-1,Q/22f2dOT;,'' ':�' ;$.,DD.,O.^:'; -•, - Ad''161 (Nioutjtain'Gate)', $4;752,50b`b0 2724/2007; 9/2%2008 ''' $1.,250;r''i Me'rged Proiect#2,TARB,,2o04 Series B $9;D75,ODOA9 6/16/2004 fi(1/2007 $2,000; Merged Project#1, TARB, 2004 Series A $14,240,0100-00 e/16/2004 5/1/2007 $2,000 Lease Revenue, 2004 Series A S62,395,000.00 6/3/2004 6/3/2007 $2,000 (Convention Center Expansion) 2006 Airport Passenger Facility Charge $12,000,000-00 5/2/2006 5/2/2009 . $2,500 Refunding Revenue(PS Regional Airport) Assessment District #157 $1,122,889.97 5/14/1992 5/14/2007 S2,000 Assessment District #162 $1,300,000-00 12/1/2004 12/1/2007 $2,500 Additional Fees—Set Up/Commingled Funds/Transferred Proceeds Analysis $1,750 Total $24,000 If additional services are required during the contract period, the City will be contacted prior to the work being performrd- Mrn onarca! Page 9 Ciy of Palnr Spnngs