R2006-070 05-22-06
RESOLUTION NO. R2006-70
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO
ENTER INTO AN ARBITRAGE CONSULTING SERVICES AGREEMENT
WITH ARBITRAGE COMPLIANCE SPECIALISTS INCORPORATED.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That certain contract by and between the City of Pearland and
Arbitrage Compliance Specialists Incorporated, a copy of which is attached hereto as
Exhibit "A" and made a part hereof for all purposes, is hereby authorized and approved.
Section 2. That the City Manager or his designee is hereby authorized to execute
and the City Secretary to attest a contract with Arbitrage Compliance Specialists
Incorporated.
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TOM REID
MAYOR
PASSED, APPROVED and ADOPTED this the
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APPROVED AS TO FORM:
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DARRIN M. COKER
CITY ATTORNEY
Exhibit "A"
Resolution No. R2006-70
ARBITRAGE
COMPLIANCE
SPECIALISTS
May 3, 2006
INCORPORATED
Ms. Claire Manthei, Director of Finance
City of Pearland ("City")
35]9 Liberty Drive
Pearland, Texas 7758]
COMPREHENSIVE CONTRACT LETTER FOR ARBITRAGE COMPLIANCE SERVICES
FOR THE CITY OF PEARLAND TAX-EXEMPT BOND ISSUES
THROUGH THE PERlOD ENDING FYE 9/30/06
Dear Ms. Manthei:
Arbitrage Compliance Specialists, Inc. ("ACS") is proposing a comprehensive contract ("Contract") to complete
and bring to current status all rebate reports to 5/3 ] /06 or applicable filing date through the FYE 9/30/06, pertaining to
the required rebate to the United States Treasury, Internal Revenue Service ("IRS") for all tax-exempt debt issues
("Bonds") of the City listed in Anachment A of this Contract. ACS has offered the City volume discounted fees of
$1,250 for annual Rebate Reports from our standard fee of $1,500.
Based on ACS's prior experience with arbitrage rebate computations for the City's Bonds, ACS's on-site City
visits, ACS's review of various City accounting information and, ACS's experience with similar engagements of this
nature and scope, we have set forth the total contractual cost to complete rebate reports as defined in Anachment A of
this Contract to be $45,400 with a contingency of $4,540, for a Contract total not to exceed $49,940. The fees due for
arbitrage compliance services will be billed by ACS, based on ACS's Fees, at the time of the Report delivery to the City.
All invoices will be paid to ACS by the City as of the payable date of the invoice.
In providing the services set forth in this Contract, it is agreed that ACS shall not incur any liability for any error or
judgment made in good faith by a responsible employee thereof and, except to the limited extent set forth in this
paragraph, shall not incur any liability for any other errors or omissions, unless it shall be proved that such error or
omission was a result of the negligence or willful misconduct of said employee. ]n the event a payment is assessed by
the IRS due to an error by ACS, the City will be responsible for paying the correct Arbitrage Amount and ACS (and its
insurers) responsibility shall not exceed the amount of any penalty or interest imposed on the Arbitrage Amount as a
result of such error. If in the event that the City has made an error or omission, then it is the City's sole responsibility
and cost to rectify the error or omission.
The scope of this Contract would cover the services, as stipulated in Attachment A for arbitrage compliance reports.
ACS has provided for a $4,540 contingency budget in this Contract if the scope of the Contract needs to expand for any
\~ services after discovery and will be based on the Fee Schedule defined in Attachment B. ACS is the prime manager and
__ ) Contractor of this Contract and does not plan to retain and manage any subcontractors to assist with this Contract.
7400 East Orchard Road, Suite 270 . Greenwood Village. Colorado. 80111
Phone: (800) 672-999:3 . (:303) 756-5100 . Fax: (303) 756-0901 . E-Mail: ArbCom@earthlink.net
Branch Offices: Englewood. CO . HOllston. TX . Lo Jolla. CA. Las Vegas. "IV . "Iashville. TN . Portland. OR . Salt Loke. UT
We appreciate the opportunity to present this Contract to the City. If we may be of further assistance, or if you or
any of the involved City personnel have any questions, please do not hesitate to call us at ] .800.672.9993.
Sincerely,
:~ SpeciaHsts, Inc.
Doug Pahnke, Director
Please acknowledge acceptance of this Contract by executing and returning one copy of this letter to Arbitrage
Compliance Specialists, Inc. along with any other purchase orders or required paperwork deemed necessary by the City
to Arbitrage Compliance Specialists, Inc.
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Accepted by - Signature
May 22, 2006
Date
Bill Eisen
Accepted by - Print Name
City Manager
Title
r.ity of Pearl and
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May 3, 2006
ARBITRAGE
COMPLIANCE
SPECIALISTS
Ms. Claire Manthei, Director of Finance
City of Pearland ("City")
35] 9 Liberty Drive
Pearl and, Texas 7758]
INCORPORATED
EXHIBIT B
FEE SCHEDULE
FOR ARBITRAGE COMPLIANCE SERVICES
FOR THE CITY OF PEARLAND
SERVICE FEE SCHEDULE:
REBATE REPORT FEES (PER YEAR):
FIXED RATE BONDS:
FIRST YEAR OF REPORT (COMPUTATION PERIOD OF UP TO ONE YEAR) $1,250
EXTENSION FEE (REPORTS IN EXCESS OF ONE YEAR, P ARTJAL YEARS ARE PRORATED) $600
VARIABLE RATE BONDS:
FIRST YEAR OF REPORT (COMPUTATION PERIOD OF UPTO ONE YEAR) $1,850
EXTENSION FEE (REPORTS IN EXCESS OF ONE YEAR, PARTIAL YEARS ARE PRORATED) $700
REBA TE SUPPLEMENTAL FEES:
BOND YEAR SLICING (PER YEAR) $1,000
PREPARATION OF FORM 8038-T AND IRS FlUNG ]NSTRUCTIONS ON- TlME $295
LA TE $395
REFUNDING BONDS WlTH TRANSFERRED PROCEEDS ALLOCATIONS HOURLY;
RATE $150
ALLOCATION/REVIEW/VERIFICATION OF COMMINGLED FUNDS HOURL Y;
RATE $150
OTHER CONSULTING/IRS AUDIT ASSISTANCE/DATA GATHERING HOURLY;
RATE $175
YIELD RESTRICTION CALCULATIONS:
YIELD RESTRICTION CALCULATIONS (REPORT FEE FOR 1ST YEAR PERIOD) $1,000
REPORTS COVERING COM PUT A TION PERIOD IN EXCESS OF 1 YEAR FOR $875
EACH ADDITIONAL PARTIAL OR FULL YEAR
PENALTY/SPENDING EXCEPTION REPORT FEES:
SPENDING EXCEPTION CALCULATIONS - PER SEMI-ANNUAL SPENDING PERIOD $1,250
7400 East Orchard Road, Suite 270 . Greenwood Village' Co]orado' 80111
Phone: (800) 672"9993 . (303) 756-5100' Fax: (303) 756-0901 . E-Mail: ArbCom@earthlink.net
Branch Offices: Englewood. CO . Houston. TX . La Jolla. CA . Las Vegas. NV . Nashville. TN . Portland. OR . Salt lake. L'l
ACS's fees are based on the following five categories:
Rebate Report Fees - There are different report fees for the various types of bond issues that reflects the necessary time and effort
required for legal and technical analysis, due diligence and transactional reporting.
Rebate Supplemental Fees - Optional fees may apply in more complex rebate areas dealing with Transferred Proceeds arising in
connection with refunding bonds or commingled investment to be evaluated.
Spending Exception Report Fee - Fee for calculating ACP (the amount to be spent semi-annually), determining expenditures and
retainage and any penalties owed. These fees are in lieu of rebate fees.
.. THE IRS ALLOWS A CREDIT OF UP TO $5,000 PER S-YEAR FILING. AeS's FEES ARE LESS THAN THE CREDIT YOU RECEIVE FROM THE IRS.
Note: ACS's fees should be paid from bond proceeds. ACS's fees stated above include all normal business expenses such as
faxes, copies, regular Us. mail postage, and telephone access via ACS's toll free telephone number. Fed Ex, when needed, is
billed to the City at cost. Reimbursement for travel expenses, although not expected, will be limited to pre-approved customary
travel and lodging rates.
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