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R99-030 04-12-99RESOLUTION NO. R99-30 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO ENTER INTO A CONTRACT WITH ARBITRAGE COMPLIANCE SPECIALISTS, INC. FOR ARBITRAGE REBATE SERVICES OF ALL CURRENT OUTSTANDING BOND ISSUES FOR THE CITY OF PEARLAND. 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, Inc., 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 the contract with Arbitrage Compliance Specialists, Inc., for and on behalf of the City of Pearland, for arbitrage rebate services of all current outstanding bond issues for the City. PASSED, APPROVED and ADOPTED this the Z,,2- ~''''// , A.D., 1999. TOM REID MAYOR day of ATTEST: ~U~ E ~' ~.Z'~¢''J'' APPROVED AS TO FORM: DARRIN M. COKER CITY ATTORNEY PEARLAND Page 1 of 1 To: Glen Erwin, City Manager Through: From: Date: David Castillo, Director of Finance ~ Gordon Island, Purchasing Offic~/~ April 5, 1999 Subject: Recommendation for Arbitrage Rebate Services, RFP 99-049 Introduction: A proposal has have been received from Arbitrage Compliance Specialists, Inc, Englewood, Colorado for Arbitrage Rebate Compliance Services. Arbitrage rebate compliance services are required by the Internal Revenue Service ORS) for all current outstanding bonds issued by the City. The service is included in the FY98/99 approved budget (Other Requirement/Debt Services, Special Services). Background: This is an extension of a contract executed April 14, 1998 for 1990, 91 & 93 bond issues. Request for Qualifications were evaluated from three major firms engaged in arbitrage services in Texas. Arbitrage Compliance Specialists, Inc., with a regional office in Houston, was rated the best qualified provider of these services. Further, the proposed service provider is highly recommended by the City's auditing firm. The work performed to date has been very satisfactory. The service falls within the scope of services under the State of Texas Government Code, Chapter 2254. Professional Services and Consulting Act. The Internal Revenue Service Code, section 148 (f), requkes arbitrage rebate reports every five years for amounts over 5 million dollars. A "Small Issuer Exception" report is required for amounts under 5 million. Recommendation: Staff recommends extending this contract to include all current outstanding bond issues for the fee not to exceed $31,825.00. A schedule otissues is included for review and information. 3519 LIBERTY DRIVE · PEARLAND, TEXAS 77581-5416-19 · (281) 485-2411 ° www. ci.pearland.tx.us Bond Issue $2,000,000 Public Improvement Bonds, Series 1988 $2,125,000 Tax and Revenue Certificates of Obligation, Series 1991 $7,364,39 ! .80 Refunding Bonds, Series 1990 Delivery Date: 10/11/90 $2,000,000 Street Improvement Bonds, Series 1992 $6,510,000 Refunding Bonds, Series 1993 Delivery Date: 5/11/93 $5,000,000 Combination Tax and Revenue Certificates of Obligation Series 1995 Delivery Date: 5/24195 $1.115M Water and Sewer System Revenue Refunding Bonds, Series 1996A Delivery Date: 6/I 9/96 $8.870M Water and Sewer System Revenue Bonds, Series 1996B Delivery Date: 6/19~96 $6,250,000 Certificates of Obligation, Series 1997 Delivery Date: 4/3/97 $5,000,000 Sales Tax Revenue Bonds, Series 1997 Delivery Date: 5/7/97 $5,500,000 Certificates of Obligation Series 1997A Delivery Date: 9/25/97 Legal Documents Required 13 ACS signed Engagement Letter for Legal Set-up Review (ACS will not proceed with any work unless authorized). 13 Official Statement 13 Arbitrage Tax Certificate 13 Form 8038-G None None CJ ACS signed Engagement Letter for required 10th Year Report (ACS will not proceed with any work unless authorized) ACS completed Rebate Report for 5th Year 10/11/90 - 10/11/95 13 ACS signed Engagement Letter for Legal Set-up Review (ACS will not proceed with any work unless authorized). 13 Official Statement 13 Arbitrage Tax Certificate 13 Form 8038-G None Rebate Report Done for 5th Year 5/11/93 - 5/11/98 0 ACS signed Engagement Letter for required 5th Year Report (ACS will not proceed with any work unless authorized) 13 Form 8038-G None 13 ACS signed Engagement Letter (ACS will not proceed with any work unless authorized) None 13 ACS signed Engagement Letter (ACS will not proceed with any work unless authorized) None 13 ACS signed Engagement Letter (ACS will not proceed with any work unless authorized) 13 ACS signed Engagement Letter (ACS will not proceed with any work unless authorized) O Arbitrage Tax Certificate 13 Form 8038-G None C21 ACS signed Engagement Letter (ACS will not proceed with any work unless authorized) Investment Information Requirements This issue may have met Small Issuer Exception None ACS completed initial legal review and this issue met Small lssuer Exception. 13 Investment data: Interest & Sinking Fund 9/!/96 through 10/31/00 This issue may have met Small Issuer Exception. None until Final Rebate Report due for IRS after 3/1/03, then need: 13 Investment data: Interest and Sinking Fund (Reserve Portion) 5/31/98 through 3/I/03 13 Investment data: 5/24/95 through 5/24/00 (5th year Report due for IRS) Investment data: 6/19196 through Current 13 Investment data: 6/19196 through Current 13 Investment data: 4/3/97 through Current 13 Investment data 5f7/97 through Current 13 Investment data 9/25/97 through Current DATE: VENDOR: Ap~l13,1999 PEARLAND Arbitrage Compliance Specialists, Inc. 3800 South Albion St, Suite 200 Englewood, CO 801104239 Janet P. Sacks, Director Page I of I DEAR VENDOR: SUBJECT: NOTICE OF CONTRACT ACCEPTANCE AND AWARD The City of Pearland accepts your offer to supply the listed commodities and/or sentices in accordance with the terms and conditions of the invitation to bid and your bid submission. Releases for the commodities and/or services will be in the form of a purchase order or contract. All invoices are to be mailed to the Finance Department, 3519 Liberty, Pearland, TX 77581. ffyou have any questions, contact the Purchasing Office. Please sign and return one copy of this document as acknowledgment. Authorized Agem Date CLASS/ITEM & DESCRIFFION BID NO: 98-017A CONTRACT NO: 99-017A CONTRACT PERIOD: 4-13-99 to 4-12-00 Or until services are completed Commodity/Service: 946-030 Contract agreement for Rebate Services in accordance with IRS regulations Section 148(0. 1. Rebate Services for bonds issues noted on attached schedule and engagement letter for each issue. 2. The City will issue a bl3.1cet order for the services not to exceed $31,825.00. 3. Payment terms net 30 days. Blanket order number is to be noted on all invoices for payment. 4. Delivery of reports will be fob destination within 30 calendar days of receipt of client information. 5. Fee will be in accordance with fee schedule. CC: Null-Lairson CPA's 11 Greenway Plaza, Suite 1515 Houston, TX 77046 Attn: Charles G. Yaple, CPA 3519 LIBERTY DRIVE * PEARLAND, TEXAS 77581-5416-19 o (281) 485-2411 o www. ci.pearland.tx.us Bond Issue $2,000,000 Public Improvement Bonds. Series 1988 $2.125,000 Tax and Revenue Certificates of Obligation, Series 1991 $7.364,391.80 Refunding Bonds, Series 1990 Delivery Date: 10/11/90 S2,000,000 Street Improvement Bonds, Series 1992 $6,510,000 Refunding Bonds, Series 1993 Delivery Date: 5/11/93 $S,000,000 Combination Tsx and Revenue Certificates of Obligation Series 1995 Delivery Date: 5/24/95 $1.115M Water and Sewer System Kevenue Kefunding Bonds, Series 1996A Deliver), Date: 6/19/96 $8.870M Water and Sewer System Revenue Bonds, Series 1996B Delivery Date: 6/19/96 $6,250,000 Certificates of Obligation, Series 1997 Delivery Date: 4/3/97 S5,000,000 Sales Tax Revenue Bonds, Series 1997 Delivery Date: 5/7/97 S5,500.000 Certificates of Obligation Series 1997A Delivery Date: 9/25/97 l.egal Documents Required 13 ACS signed Engagement Letter for Legal Set-up Review (ACS will not proceed with any work unless authorized). El Official Statement 13 Arbitrage Tax Certificate 13 Form 8038-G None None 13 ACS signed Engagement Loner for required IOth Year Report (ACS will not proceed with any work unless authorized) ACS completed Rebate Report for 5th Year I0/! !/90 - 10/I 1/95 13 ACS signed Engagement Letter for Legal Set-up Review (ACS will not proceed with any work unless authorized). 13 Official Statement 13 Arbitrage Tax Certificate 13 Form 8038-G None Rebate Report Done for $th Year 5/11/93 - 5/I !/98 13 ACS signed Engagement Letter for required Sth Year Report (ACS will not proceed with any work unless authorized) El Form 8038-G None C3 ACS signed Engagement Letter (ACS will not proceed with any work unless authorized) None 0 ACS signed Engagement Letter (ACS will not proceed with any work unless authorized) None O ACS signed Engagement Letter (ACS will not proceed with any work unless authorized) 13 ACS signed Engagement Letter (ACS will not proceed with any work unless authorized) C} Arbitrage Tax Certificate O Form 8038-G None ID ACS signed Engagement Lcucr (ACS will not proceed with any work unless authorized) Investment Information Requirements This issue ma~ have met Small issucr Exccptlon None ACS completed initial legal review and this issue met Small Issucr Exception. C] Investment data: Interest & Sinking Fund 9/I/96 through 10/31/00 This issue ~ have met Small Issuer Exception. None until Final Rebate Rcpod due for IlLS after 3/1103, then need: 13 Investment data: Interest and Sinking Fund (Reserve Portion) 5/'3 !/98 through 311103 13 Investment data: S/24/95 through 5/24100 (5th year Report due for IRS) lfivcstmcnt daM: 6/19/96 through Current 13 Investment data: 6/19/96 through Current [nvcst~nent data: 4/3/97 through Current Investment data 5/'//97 through Currcnt O Investment data 9/25/97 through Current ARB ITRAG E COMPLIANCE SPECI.ALISTS INCORPORATED Mr. David Castillo, Director of Finance and Ms. Janet Eastburn, Staff Accountant II City of Pearland 3519 Liberty Drive Pearland, Texas 77581-54 16 and Mr. Charles G. Yaple, CPA Nuli-Lairson Certified Public Accountants 11 Greenway Plaza, Suite 1515 Houston, Texas 77046 March 5, 1999 3800 South Albion Street, Suite 200 Englewood, Colorado 80110-4239 303. 756. 5100 Fax: 303. 756. 0901 Regional and Affiliated Offices: Colurnbia. S4xr~h CaPolina Houston. Texas LaJofa, Calikynia Porfand,,Oregon Sa~ Lake Cily. Utah W'dmingfon, Delaware CITY OF PEARLAND, TEXAS ARBITRAGE REBATE COMPLIANCE SERVICES $7,364,391.80 REFUNDING BONDS, SERIES 1990 This letter is to propose the engagement of Arbitrage Compliance Specialists, Inc. C'ACS") to the City of Pearland (the "Issuer") for the purpose of performing calculations and/or services relating to the arbitrage rebate requirements contained in Section 148(f) of the Internal Revenue Code (the "Code") and those regulations promulgated thereunder for the following issue. Listed below is the issue requiring computations and ACS's fees to complete these calculations. $7,364,391.80 REFUNDING BONDS, SERIES 1990 Computation Period I0/11/95 - 10/11/00 as part of the period 10/11/90 - 10/11/00 (10th Year Report as required by the IRS) Rebate Report Fee for Fixed Rate Bond (1 year @ $1,500 per year) $1,500 Rebate Report Fee for computations in excess of I year ($575 for additional year; 4 years) 2,300 Hourly Fees for Uncommingling/Allocation of Interest & Sinking Fund, Reserve Portion (4 hours ~ $125/hour) 500 TOTAL $4.3000 Data Requirement: Interest and Sinking Fund 9/1/96 - 10/3 !/00 when available. Foomote: OOptional Charges for all issues. if applicable: $125 per hour - Uncornmingling of any funds. accounts or investments. as required; Transferred Proceeds Allocations from the prior refunded bonds. as required; preparation of Form 8038-T. The Issuer undertakes to provide or cause to be provided to ACS all such relevant data as specified by ACS from time to time, with respect to each Calculation Date within 30 days after such date and shall cooperate with all reasonable requests of ACS in connection therewith. This information will be necessary to identify the mount of "gross proceeds" (as that term is used in the Code) of the issue subject to the rebate/penalty requirement, investment income thereon and applicable yields on the issue and on such investments in order to calculate the rebate and/or penalty liability of the Issuer with respect to the issue as of each Calculation Date. ACS is not being engaged hereunder to independently determine whether there were "prohibited payments" or "imputed receipts" within the meaning of the Treasury Regulations or to perform an audit or review of the investments acquired with gross proceeds or the payment of debt service on the issue. ACS will be entitled to rely entirely on information provided by the Issuer without independent verification. With respect to each Calculation Date, ACS will prepare schedules reflecting the relevant calculations and assumptions involved and will deliver a rebate report and instructions to the Issuer as to the mount of rebate liability as of such Calculation Date. Although the Treasury has published certain regulations and other pronouncements relating to the calculation of arbitrage rebate and penalty, the Treasury may publish additional regulations and other pronouncements and supplement, amend or interpret such regulations and pronouncements from time to time, with the result that the amount of rebate and/or penalty liability determined by ACS may be subject to adjustment in the future. If this engagement letter is satisfactory, please have an authorized official execute one copy and return to Mr. Charles Yaple of Null-Lairson or to me at ACS. We welcome any questions you may have, and .invite you to call me at ACS at anytime at (800) 672-9993. Sincerely, Arbitrage Compliance Specialists, Inc. Janet P. Sacks, Director Please acknowledge acceptance of this engagement by signing and returning one copy of this letter to Arbitrage Compliance Specialists, Inc. Accepted Title Date -2- March 5, 1999 A R B I T R A G E COMPLIANCE SPECIALISTS INCORPORATED Mr. David Castillo, Director of Finance and Ms. Janet Eastburn, Staff Accountant II City of Pearland 3519 Liberty DriVe Pearland, Texas 77581-54 16 and Mr. Charles G. Yaple, CPA NulI-Lairson Certified Public Accountants 11 Greenway Plaza, Suite 1515 Houston, Texas 77046 3800 South Albion Street. Suite 200 Englewood. Colorado 801 I0-4239 303. 756. 5100 Fax: 303. 756. 090t Regional and Affiliated Offices: Colurrf~a. South Carolina Houston. Texas La Joila. CaWtom e Po, lland. Oregon Sait Lake City. Ulah Wik~on. Delaware CITY OF PEARLAND, TEXAS ARBITRAGE REBATE COMPLIANCE SERVICES $5;500,000 CERTIFICATES OF OBLIGATION SERIES 1997A This letter is to propose the engagement of Arbitrage Compliance Specialists, Inc. CACS") to the City of Pearland (the "Issuer") for the purpose of performing calculations and/or services relating to the arbitrage rebate requirements contained in Section 148(t) of the Internal Revenue Code (the "Code") and those regulations promulgated thereunder for the following issue. Listed below is the issue requiring computations and ACS's fees to complete these calculations. 55,500,000 Certificates of Obligation, Series 1997A Computation Period 9/25/97 - 9/25/99 (2 Year Report)- One-Time Initial Set-Up Review Fee Rebate Report Fee for Fixed Rate Bond (1 year ~ $1,500 per year) Rebate Report Fee for computations in excess of I year ($575 for additional year; I year) TOTAL $ 4500 1,500 575 $2,5250 Data Requirement: Investment data 9/25/97 - 9/25/99 Footnote: ~`4n initia~ set~up fee is required f~r each b~nd issue that d~es n~t have a pri~r rebate rep~rt. This fee covers our initial research on the bond issue and legal fees from our bond counsel who determines which rituals are subject to arbitrage rebate. {}Optional Charges for all issues. if applicable; $125 per hour - Uncommingling of any funds. accounts or investments. as required: Transferred Proceeds Allocations from the prior refunded bonds. as required: preparation of Form 8038-T. The lssuer undertakes to provide or cause to be provided to ACS all such relevant data as specified by ACS from time to time, with respect to each Calculation Date within 30 days after such date and shall cooperate with all reasonable requests of ACS in connection therewith. This information will be necessary to identify the amount of "gross proceeds" (as that term is used in the Code) of the issue subject to the rebate/penalty requirement, investment income thereon and applicable yields on the issue and on such investments in order to calculate the rebate and/or penalty liability of the lssuer with respect to the issue as of each Calculation Date. ACS is not being engaged hereunder to independently determine whether there were "prohibited payments" or "imputed receipts" within the meaning of the Treasury Regulations or to perform an audit or review of the investments acquired ~vith gross proceeds or the payment of debt service on the issue. ACS will be entitled to rely entirely on information provided by the lssuer without independent verification. With respect to each Calculation Date, ACS will prepare schedules reflecting the relevant calculations and assumptions involved and will deliver a rebate report and instructions to the lssuer as to the amount of rebate liability as of such Calculation Date. Although the Treasury has published certain regulations and other pronouncements relating to the calculation of arbitrage rebate and penalty, the Treasury may publish additional regulations and other pronouncements and supplement, amend or interpret such regulations and pronouncements from time to time, with the result that the amount of rebate and/or penalty liability determined by ACS may be subject to adjustment in the future. If this engagement letter is satisfactory, please have an authorized official execute one copy and return to Mr. Charles Yaple of Null-Lairson or to me at ACS. We welcome any questions you may have, and invite you to call me at ACS at anytime at (800) 672-9993. Sincerely, Arbitrage Compliance Specialists, Inc. Janet P. Sacks, Director Please acknowledge acceptance of this engagement by signing and returning one copy of this letter to Arbitrage Compliance Specialists, Inc. Accepted Title Date -2- March 5, 1999 AR B IT RAG E COMPLIANCE SPECIALISTS INCORPORATED Mr. David Castillo, Director of Finance and Ms. Janet Eastburn, Staff Accountant II City of Pearland 3519 Liberty Drive Pearland, Texas 77581-5416 and Mr. Charles G. Yaple, CPA Nuli-Lairson Certified Public Accountants I 1 Greenway Plaza, Suite 1515 Houston, Texas 77046 3800 South Albion Street, Suite 200 Englewood, Colorado 80 t 10.4239 303. 756. 5100 Fax: 303. 756. 0901 Regional and Affiliated Offices: Columbia, South Carolina HO~ Texas Salt Lake City. Utah Winit~on, De/aware CITY OF PEARLAND, TEXAS ARBITRAGE REBATE COMPLIANCE SERVICES $5,000,000 SALES TAX REVENUE BONDS SERIES 1997 This letter is to propose the engagement of Arbitrage Compliance Specialists, Inc. C'ACS") to the City of Pearland (the "Issuer") for the purpose of performing calculations and/or services relating to the arbitrage rebate requirements contained in Section 148(0 of the Internal Revenue Code (the "Code") and those regulations promulgated thereunder for the following issue. Listed below is the issue requiring computations and ACS's fees to complete these calculations. $5,000,000 Sales Tax Revenue Bonds, Series 1997 Computation Period 5/7/97 - 5/7/99 (2 Year Report) One-Time Initial Set-Up Review Fee Rebate Report Fee for Fixed Rate Bond ( 1 year @ $ 1,500 per year) Rebate Report Fee for computations in excess of I year ($575 for additional year; I year) TOTAL $ 4500 1,500 575 $2.5250 Data Requirement: Non-Arbitrage Certificate, Form 8038-G and investment data 5/7/97 - 5/7/99 Footnote: ~~4n initia~ set~up fee is required f~r each b~nd issue that d~es n~t have a pri~r rebate rep~rt~ This fee covers our initial research on the bond issue and legal fees from our bond counsel who determines which funds are subject to arbitrage rebate. {}Optional Charges for all issues, if applicable: $125 per hour - Uncommingling of any funds, accounts or investments, as required: Transferred Proceeds ,41locations from the prior refunded bonds, as required; preparation of Form 8038-T. The Issuer undertakes to provide or cause to be provided to ACS all such relevant data as specified by ACS from time to time, with respect to each Calculation Date within 30 days after such date and shall cooperate with all reasonable requests of ACS in connection therewith. This information will be necessary to identify the amount of "gross proceeds" (as that term is used in the Code) of the issue subject to the rebate/penalty requirement, investment income thereon and applicable yields on the issue and on such investments in order to calculate the rebate and/or penalty liability of the Issuer with respect to the issue as of each Calculation Date. ACS is not being engaged hereunder to independently determine whether there were "prohibited payments" or "imputed receipts" within the meaning of the Treasury Regulations or to perform an audit or review of the investments acquired with gross proceeds or the payment of debt service on the issue. ACS will be entitled to rely entirely on information provided by the lssuer without independent verification. With respect to each Calculation Date, ACS will prepare schedules reflecting the relevant calculations and assumptions involved and will deliver a rebate report and instructions to the Issuer as to the mount of rebate liability as of such Calculation Date. Although the Treasury has published certain regulations and other pronouncements relating to the calculation of arbitrage rebate and penalty, the Treasury may publish additional regulations and other . pronouncements and supplement, mend or interpret such regulations and pronouncements from time to time, with the result that the mount of rebate and/or penalty liability determined by ACS may be subject to adjustment in the future. If this engagement letter is satisfactory, please have an authorized official execute one copy and return to Mr. Charles Yaple of Null-Lairson or to me at ACS. We welcome any questions you may have, and invite you to call me at ACS at anytime at (800) 672-9993. Sincerely, Arbitrage Compliance Specialists, Inc. Janet P. Sacks, Director Please acknowledge acceptance of this engagement by signing and returning one copy of this letter to Arbitrage Compliance Specialists, Inc. Accepted Title Date -2- Mr. David Castillo, Director of Finance and Ms. Janet Eastburn, Staff Accountant II City of Pearland 3519 Liberty Drive Pearland, Texas 77581-5416 and Mr. Charles G. Yaple, CPA Nu!l-Lairson Certified Public Accountants 11 Greenway Plaza, Suite 1515 Houston, Texas 77046 March 5, 1999 ARB IT RAG E COMPLIANCE SPECIALISTS 3800 South Albion Street. Suite 200 Engle wood. Colorado 80110.4239 303. 756. 5100 Fax: 303. 756. 0901 Regional and Affiliated Offices: Cobml~, South Caro~ina Houston, Texas LaJ~la, Califomia Pod/and, Oregon Salt Lake Cify, Utah ~, Delaware CITY OF PEARLAND, TEXAS ARBITRAGE REBATE COMPLIANCE SERVICES $6,250,000 CERTIFICATES OF OBLIGATION SERIES 1997 This letter is to propose the engagement of Arbitrage Compliance Specialists, Inc. CACS") to the City of Pearland (the "lssuer") for the purpose of performing calculations and/or services relating to the arbitrage rebate requirements contained in Section 148(0 of the Internal Revenue Code (the "Code") and those regulations promulgated thereunder for the following issue. Listed below is the issue requiring computations and ACS's fees to complete these calculations. One-Time Initial Set-Up Review Fee Rebate Report Fee for Fixed Rate Bond (I year @ $1,500 per year) Rebate Report Fee for computations in excess of I year ($575 for additional year; 1 year) TOTAL $ 4500 1,500 575 $2.5250 Data Requirement: Investment data 4/3/97 - 4/3/99 Footnote: OAn initial set-upfee is required for each bond issue that does not have a prior rebate report. This fee covers our initial research on the bond issue and legal fees from our bond counsel who determines which funds are subject to arbitrage rebate. OOptional Charges for all issues. if applicable: $125 per hour - Uncommingling of any funds. accounts or investments. as required; Transferred Proceeds .41locations from the prior refunded bonds. as required; preparation of Form 8038-T. The lssucr undertakes to provide or cause to be provided to ACS all such relevant data as specified by ACS from time to time, with respect to each Calculation Date within 30 days after such date and shall cooperate with all reasonable requests of ACS in connection therewith. This information will be necessary to identify the mount of "gross proceeds" (as that term is used in the Code) of the issue subject to the rebate/penalty requirement, investment income thereon and applicable yields on the issue and on such investments in order to calculate the rebate and/or penalty liability of the Issuer with respect to the issue as of each Calculation Date. ACS is not being engaged hereunder to independently determine whether there were "prohibited payments" or "imputed receipts" within the meaning of the Treasury Regulations or to perform an audit or review of the investments acquired with gross proceeds or the payment of debt service on the issue. ACS will be entided to rely entirely on information provided by the Issuer without independent verification. With respect to each Calculation Date, ACS will prepare schedules reflecting the relevant calculations and assumptions involved and will deliver a rebate report and instructions to the Issuer as to the mount of rebate liability as of such Calculation Date. Although the Treasury has published certain regulations and other pronouncements relating to the calculation of arbitrage rebate and penalty, the Treasury may publish additional regulations and other pronouncements and supplement, amend or interpret such regulations and pronouncements from time to time, with the result that the mount of rebate and/or penalty liability determined by ACS may be subject to adjustment in the future. If this engagement letter is satisfactory, please have an authorized official execute one copy and return to Mr. Charles Yaple of Null-Lairson or to me at ACS. We welcome any questions you may have, and invite you to call me at ACS at anytime at (800) 672-9993. Sincerely, Arbitrage Compliance Specialists, Inc. Janet P. Sacks, Director Please acknowledge acceptance of this engagement by signing and returning one copy of this letter to Arbitrage Compliance Specialists, Inc. Accepted Title Date -2- March 5, 1999 ARB IT RAG E COM.PLIANCE SPECIALISTS INCORPORATED Mr. David Castillo, Director of Finance and Ms. Janet Eastburn, Staff Accountant II City of Pearland 3519 Liberty Drive Pearland, Texas 77581-5416 and Mr. Charles G. Yaple, CPA Nuli-Lairson Certified Public Accountants 11 Greenway Plaza, Suite 15 15 Houston, Texas 77046 3800 South Albion Street, Suite 200 Englewood, Colorado 80110.4239 303. 756. 5100 Fax: 303. 756. 0901 Regional and Affiliated Offices: Column. South Carotina Houston. Texas La Jotia. Califorraa Pofltand. Oregon Salt Lake City. Utah Wdmington, Deiaware CITY OF PEARLAND, TEXAS ARBITRAGE REBATE COMPLIANCE SERVICES $1,115,000 WATER AND SEWER SYSTEM REVENUE REFUNDING BONDS SERIES 1996A This letter is to propose the engagement of Arbitrage Compliance Specialists, Inc. CACS") to the City of Pearland (the "Issuer") for the purpose of performing calculations and/or services relating to the arbitrage rebate requirements contained in Section 148(0 of the Internal Revenue Code (the "Code") and those regulations promulgated thereunder for the following issue. Listed below is the issue requiring computations and ACS's fees to complete these calculations. $1,115,000 Water and Sewer System Revenue Refunding Bonds, Series 1996A Computation Period 6/19/96 - 6/19/99 (3 Year Report) One-Time Initial Set-Up Review Fee Rebate Report Fee for Fixed Rate Bond (I year ~ $1,500 per year) Rebate Report Fee for computations in excess of I year ($575 for additional year; 2 years) TOTAL $ 4500 1,500 1.150 $3,1000 Data Requirement: Investment data 6/19~96 - 6/19~99 Footnote: ~.4n initia~ set~up fee is required f~r each b~nd issue that d~es n~t have a pri~r reba~e rep~rt~ This fee covers our initial research on the bond issue and legal fees frora our bond counsel who determines which funds are subject to arbitrage rebate. OOptional Charges for all issues. if applicable: $125 per hour - Uncornmingling of any funds. accounts or investments, as required: Transferred Proceeds Allocations from the prior refunded bonds. as required.' preparation of Form 8038-7~ The Issuer undertakes to provide or cause to be provided to ACS all such relevant data as specified by ACS from time to time, with respect to each Calculation Date within 30 days after such date and shall cooperate with all reasonable requests of ACS in connection therewith. This information will be necessary to identify the mount of "gross proceeds" (as that term is used in the Code) of the issue subject to the rebate/penalty requirement, investment income thereon and applicable yields on the issue and on such investments in order to calculate the rebate and/or penalty liability of the Issuer with respect to the issue as of each Calculation Date. ACS is not being engaged hereunder to independently determine whether there were "prohibited payments" or "imputed receipts" within the meaning of the Treasury Regulations oi' to perform an audit or review of the investments acquired with gross proceeds or the payment of debt service on the issue. ACS will be entitled to rely entirely on information provided by the Issuer without independent verification. With respect to each Calculation Date, ACS will prepare schedules reflecting the relevant calculations and assumptions involved and will deliver a rebate report and instructions to the lssuer as to the mount of rebate liability as of such Calculation Date. Although the Treasury has published certain regulations and other pronouncements relating to the calculation of arbitrage rebate and penalty, the Treasury may publish additional regulations and other pronouncements and supplement, mend or interpret such regulations and pronouncements from time to time, with the result that the mount of rebate and/or penalty liability determined by ACS may be subject to adjustment in the future. If this engagement letter is satisfactory, please have an authorized official execute one copy and return to Mr. Charles Yaple of Null-Lairson or to me at ACS. We welcome any questions you may have, and invite you to call me at ACS at anytime at (800) 672-9993. Sincerely, Arbitrage Compliance Specialists, Inc. Janet P. Sacks, Director Please acknowledge acceptance of this engagement by signing and returning one copy of this letter to Arbitrage Compliance Specialists, Inc. Accepted Title Date -2- Mr. David Casti!lo, Director of Finance and Ms. Janet Eastbum, Staff Accountant II City of Pearland 3519 Liberty Drive Pearland, Texas 77581-5416 and Mr. Charles G. Yaple, CPA Null-Lairson Certified Public Accountants 11 Greenway Plaza, Suite 1515 Houston, Texas 77046 March 5, 1999 ARB ITRAG E COMPLIANCE SPECIALISTS INCORPORATED 3800 South Albion Street, Suite 200 Englewood, Colorado 80t t0-4239 303. 756. 5100 Fax: 303. 756. 0901 Regional and Affiliated Offices: Cdunfoia. Soo~ Carotina HOUStOn. Texas Poa!an~Oreg, on Salt Lake City, Utah W~. Delaware CITY OF PEARLAND, TEXAS ARBITRAGE REBATE COMPLIANCE SERVICES $8,870,000 WATER AND SEWER SYSTEM REVENUE BONDS SERIES 1996B This letter is to propose the engagement of Arbitrage Compliance Specialists, Inc. C'ACS") to the City of Pearland (the "Issuer") for the purpose of performing calculations and/or services relating to the arbitrage rebate requirements contained in Section 148(0 of the Internal Revenue Code (the "Code") and those regulations promulgated therounder for the following issue. Listed below is the issue requiring computations and ACS's fees to complete these calculations. $8,870,000 Water and Sewer System Revenue Bonds, Series 1996B Computation Period 6/19/96 - 6/19/99 (3 Year Report) One-Time Initial Set-Up Review Fee Rebate Report Fee for Fixed Rate Bond (1 year @ $1,500 per year) Rebate Report Fee for computations in excess of I year ($575 for additional year; 2 years) TOTAL $ 4500 1,500 1.150 $3.1000 Data Requirement: Investment data 6/! 9/96 - 6/19/99 Footnote: ~`4n initial ~et~upfee is required f~r each b~nd issue tha~ d~es n~t have a pri~r rebate rep~rt~ This fee covers our initial research on the bond issue and legal fees frora our bond counsel who determines which funds are subject to arbitrage rebate. O Optional Charges for all issues. if applicable: $125 per hour - Uncommingling of any funds. accounts or investments. as required; Transferred Proceeds Allocations from the prior refunded bonds. as required; preparation of Form 8038-T. The lssuer undertakes to provide or cause to be provided to ACS all such relevant data as specified by ACS from time to time, with respect to each Calculation Date within 30 days after such date and shall cooperate with all reasonable requests of ACS in connection therewith. This information will be necessary to identify the mount of "gross proceeds" (as that term is used in the Code) of the issue subject to the rebate/penalty requirement, investment income thereon and applicable yields on the issue and on such investments in order to calculate the rebate and/or penalty liabilit~ of the Issuer with respect to the issue as of each Calculation Date. ACS is not being engaged hereunder to independently determine whether there were "prohibited payments" or "imputed receipts" within the meaning of the Treasury Regulations or to perform an audit or review of the investments acquired with gross proceeds or the payment of debt service on the issue. ACS will be entitled to rely entirely on information provided by the Issuer without independent verification. With respect to each Calculation Date, ACS will prepare schedules reflecting the relevant calculations and assumptions involved and will deliver a rebate report and instructions to the Issuer as to the amount of rebate liability as of such Calculation Date. Although the Treasury has published certain regulations and other pronouncements relating to the calculation of arbitrage rebate and penalty, the Treasury may publish additional regulations and other pronouncements and supplement, mend or interpret such regulations and pronouncements from time to time, with the result that the mount of rebate and/or penalty liability determined by ACS may be subject to adjustment in the future. If this engagement letter is satisfactory, please have an authorized official execute one copy and return to Mr. Charles Yaple of Null-Lairson or to me at ACS. We welcome any questions you may have, and invite you to call me at ACS at anytime at (800) 672-9993. Sincerely, Arbitrage Compliance Specialists, Inc. Janet P. Sacks, Director Please acknowledge acceptance of this engagement by signing and returning one copy of this letter to Arbitrage Compliance Specialists, Inc. Accepted Title Date -2- March 5, 1999 ARB IT RAGE COMPLIANCE SPECIALISTS INCORPORATED Mr. David Castillo, Director of Finance and Ms. Janet Eastburn, Staff Accountant II City of Pearland 3519 Liberty Drive Pearland, Texas 77581-5416 and Mr. Charles G. Yaple, CPA Nuil-Lairson Certified Public Accountants 11 Greenway Plaza, Suite 1515 Houston, Texas 77046 3800 South Albion Street, Suite 200 Englewood, Colorado 80110.4239 303. 756. 5100 Fax: 303. 756. 0901 Regional and Affiliated Offices: Columbia. South Carolina Houston. Texas La Jo#a. Callfomia Pt~tXand. Oregon Salt Lake C~. Utah P. qtmit~on. Detaware CITY OF PEARLAND, TEXAS ARBITRAGE REBATE COMPLIANCE SERVICES $5,000,000 COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1995 This letter is to propose the engagement of Arbitrage Compliance Specialists, Inc. CACS") to the City of Pearland (the "Issuer") for the purpose of performing calculations and/or services relating to the arbitrage rebate requirements contained in Section 148(f) of the Internal Revenue Code (the "Code") and those regulations promulgated thereunder for the following issue. Listed below is the issue requiring computations and ACS's fees to complete these calculations. $5,000,000 COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1995 Computation Period 5/24/95 - 5/24/00 (5th Year Report as required by the IRS) One-Time Initial Set-Up Review Fee Rebate Report Fee for Fixed Rate Bond (1 year ~ $1,500 per year) Rebate Report Fee for computations in excess of I year ($575 for additional year; 4 years) TOTAL $ 450O 1,500 2.300 $4,2500 Data Requirement: Form 8038-G, investment data 5/24/95 - 5/24/00 Footnote: O Jn initial set-up fee is required for each bond issue that does not have a prior rebate report. This fee covers our initial research on the bond issue and legal fees from our bond counsel who determines which funds are subject to arbitrage rebate. {}Optional Charges for all issues. if applicable: $125 per hour ~ Uncommingling of any funds. accounts or investments. as require& Transferred Proceeds Allocations from the prior refunded bonds. as required.' preparation of Form 8038-E The lssuer undertakes to provide or cause to be provided to ACS all such relevant data as specified by ACS from time to time, with respect to each Calculation Date within 30 days after such date and shall cooperate with all reasonable requests of ACS in connection therewith. This information will be necessary to identify the amount of "gross proceeds" (as that term is used in the Code) of the issue subject to the rebate/penalty requirement, investment income thereon and applicable yields on the issue and on such investments in order to calculate the rebate and/or penalty liability of the Issuer with respect to the issue as of each Calculation Date. ACS is not being engaged hereunder to independently determine whether there were "prohibited payments" or "imputed receipts" within the meaning of the Treasury Regulations or to perform an audit or review of the investments acquired with gross proceeds or the payment of debt service on the issue. ACS will be entitled to rely entirely on information provided by the Issuer without independent verification. With respect to each Calculation Date, ACS will prepare schedules reflecting the relevant calculations and assumptions involved and will deliver a rebate report and instructions to the lssuer as to the amount of rebate liability as of such Calculation Date. Although the Treasury has published certain regulations and other pronouncements relating to the calculation of arbitrage rebate and penalty, the Treasury may publish additional regulations and other pronouncements and supplement, amend or interpret such regulations and pronouncements from time to time, with the result that the amount of rebate and/or penalty liability determined by ACS may be subject to adjustment in the future. If this engagement letter is satisfactory, please have an authorized official execute one copy and return to Mr. Charles Yaple of Null-Lairson or to me at ACS. We welcome any questions you may have, and invite you to call me at ACS at anytime at (800) 672-9993. Sincerely, Arbitrage Compliance Specialists, Inc. Janet P. Sacks, Director Please acknowledge acceptance of this engagement by signing and returning one copy of this letter to Arbitrage Compliance Specialists, Inc. Accepted Title Date -2- ARB ITRAG E COMPLIANCE SPECIALISTS INCORPORATED Mr. David Castillo, Director of Finance and Ms. Janet Eastbum, Staff Accountant II City of Pearland 3519 Liberty Drive Pearland, Texas 77581-54 ! 6 and Mr. Charles G. Yaple, CPA NulI-Lairson Certified Public Accountants 11 Greenway Plaza, Suite 1515 Houston, Texas 77046 March 5, 1999 3800 South Albion Street, Suite 200 Englewoocl, Colorado 80110-4239 303. 756. 5100 Fax: 303. 756. 0901 Regional and Affiliated Offices: ColumbO. S~lh Carolina Houston. Texas La Jolla. Cagomia Pordan~. Oregon Salt Lake City, Utah W'dmingto~ Delaware CITY OF PEARLAND, TEXAS ARBITRAGE REBATE COMPLIANCE SERVICES $2M 1988 PUBLIC IMPROVEMENT BONDS This letter is to propose the engagement of Arbitrage Compliance Specialists, Inc. CACS") to the City of Pearland (the "Issuer") for the purpose of performing calculations and/or services relating to the arbitrage rebate requirements contained in Section 148(1) of the Internal Revenue Code (the "Code") and those regulations promulgated thereunder for the following issue. Listed below is the issue requiring computations and ACS's fees to complete these calculations. 152M 1988 PUBLIC IMPROVEMENT BONDS One-Time Initial Set-Up Legal Review Fee TOTAL $450.000 $450.0O Data Requirement: Official Statement, Non-Arbitrage Tax Certificate, Form 8038-G. Footnote: ~`4n initia~ se~~upfee is required f~r each b~nd issue that d~es n~t have a pri~r rebate rep~rt~ This fee covers our initial research on the bond issue and legal fees from our bond counsel who determines which funds are subject to arbitrage rebate. The lssuer undertakes to provide or cause to be provided to ACS all such relevant data as specified by ACS from time to time, with respect to each Calculation Date within 30 days after such date and shall cooperate with all reasonable requests of ACS in connection therewith. This information will be necessary to identify the amount of "gross proceeds" (as that term is used in the Code) of the issue subject to the rebate/penalty requirement, investment income thereon and applicable yields on the issue and on such investments in order to calculate the rebate and/or penalty liability of the lssuer with respect to the issue as of each Calculation Date. ACS is not being engaged hereunder to independently determine whether there were "prohibited payments" or "imputed receipts" within the meaning of the Treasury Regulations or to perform an audit or review of the investments acquired with gross proceeds or the payment of debt service on the issue. ACS will be entitled to rely entirely on information provided by ~e lssuer without independent verification. With respect to each Calculation Date, ACS will prepare schedules reflecting the relevant calculations and assumptions involved and will deliver a rebate report and instructions to the Issuer as to the amount of rebate liability as of such Calculation Date. Although the Treasury has published certain regulations and other pronouncements relating to the calculation of arbitrage rebate and penalty, the Treasury may publish additional regulations and other pronouncements and supplement, mend or interpret such regulations and pronouncements from time to time, with the result that the mount of rebate and/or penalty liability determined by ACS may be subject to adjustment in the future. If this engagement letter is satisfactory, please have an authorized official execute one copy and remm to Mr. Charles Yaple of Nul!-Lairson or to me at ACS. We welcome any questions you may have, and invite you to call me at ACS at anytime at (800) 672-9993. Sincerely, Arbitrage Compliance Specialists, Inc. Janet P. Sacks, Director Please acknowledge acceptance of this engagement by signing and returning one copy of this letter to Arbitrage Compliance Specialists, Inc. Accepted Title Date -2- ARBITRAGE COMPLIANCE SPECIALISTS INCORPORATED Mr. David Castillo, Director of Finance and Ms. Janet Eastburn, Staff Accountant II City of Pearland 3519 Liberty Drive Pearland, Texas 77581-5416 and Mr. Charles G. Yaple, CPA NulI-Lairson Certified Public Accountants 11 Greenway Plaza, Suite 1515 Houston, Texas 77046 March 5, 1999 3800 South Albion Street. Suite 200 Englewood, Colorado 80 t 10-4239 303. 756. 5100 Fax: 303. 756. 0901 Regional and Affiliated Offices: C~umbia. South Carolina I'~uston. Texas La Joaa. CalifonVa PorrlaM. G, egon Sail Lake Cily, Utah W'drnington. Delaware CITY OF PEARLAND, TEXAS ARBITRAGE REBATE COMPLIANCE SERVICES $2M 1992 STREET IMPROVEMENT BONDS This letter is to propose the engagement of Arbitrage Compliance Specialists, Inc. CACS") to the City of Pearland (the "Issuer") for the purpose of performing calculations and/or services relating to the arbitrage rebate requirements contained in Section 148(0 of the Internal Revenue Code (the "Code") and those regulations promulgated thereunder for the following issue. Listed below is the issue requiring computations and ACS's fees to complete these calculations. [$2M 1992 STREET IMPROVEMENT BONDS One-Time Initial Set-Up Legal Review Fee TOTAL $450.000 $450.00 Data Requirement: Official Statement, Non-Arbitrage Tax Certificate, Form 8038-G. Footnote: ~~4n initia~ se~~upfee is required f~r each b~nd issue ~hat d~es n~t have a pri~r rebate rep~rt~ This fee covers our initial research on the bond issue and legal fees from our bond counsel who determines which funds are subject to arbitrage rebate. The lssuer undertakes to provide or cause to be provided to ACS all such relevant data as specified by ACS from time to time, with respect to each Calculation Date within 30 days after such date and shall cooperate with all reasonable requests of ACS in connection therewith. This information will be necessary to identify the amount of "gross proceeds" (as that term is used in the Code) of the issue subject to the rebate/penalty requirement, investment income thereon and applicable yields on the issue and on such investments in order to calculate the rebate and/or penalty liability of the lssuer with respect to the issue as of each Calculation Date. ACS is not being engaged hereunder to independently determine whether there were "prohibited payments" or "imputed receipts" within the meaning of the Treasury Regulations or to perform an audit or review of the investments acquired with gross proceeds or the payment of debt service on the issue. ACS will be entitled to rely entirely on information provided by the Issuer without independent verification. With re.spect to each Calculation Date, ACS will prepare schedules reflecting the relevant calculations and assumptions involved and will deliver a rebate report and instructions to the Issuer as to the mount of rebate liability as of such Calculation Date. Although the Treasury has published certain regulations and other pronouncements relating to the calculation of arbitrage rebate and penalty, the Treasury may publish additional regulations and other pronouncements and supplement, mend or interpret such regulations and pronouncements from time to time, with the result that the mount of rebate and/or penalty liability determined by ACS may be subject to adjustment in the future. If this engagement letter is satisfactory, please have an authorized official execute one copy and return to Mr. Charles Yaple of Nu!l-Lairson or to me at ACS. We welcome any questions you may have, and invite you to call me at ACS at anytime at (800) 672-9993. Sincerely, Arbitrage Compliance Specialists, Inc. Janet P. Sacks, Director Please acknowledge acceptance of this engagement by signing and returning one copy of this letter to Arbitrage Compliance Specialists, Inc. Accepted Title Date -2- ARB ITRAG E COMPLIANCE SPECIALISTS March 25, 1999 3800 South Albion Street, Suite 200 Englewood, Colorado 80 t 10-4239 303. 756. 5100 Fax.' 303. 756. 0901 Mr. David Castiilo, Director of Finance and Ms. Janet Eastbum, Staff Accountant II City of Pearland 3519 Liberty Drive Pearland, Texas 77581-54 i 6 and Mr. Charles G. Yaple, CPA NulI-Lairson Certified Public Accountants 1 I Greenway Plaza, Suite 1515 Houston, Texas 77046 Regional at~d Affiliated Oftfur: Caum~. S<~h Caro~na Houston. Texas La ~ Califoo~a Pordana. Orego~ Salt Lake Chy. Utah Wdm~jto~. Delaware CITY OF PEARLAND, TEXAS ARBITRAGE REBATE COMPLIANCE SERVICES $17,100,000 CERTIFICATES OF OBLIGATION SERIES 1998 This letter is to propose the engagement of Arbitrage Compliance Specialists, Inc. CACS") to the City of Pearland (the "Issuer") for the purpose of performing calculations and/or services relating to the arbitrage rebate requirements contained in Section 148(f) of the Internal Revenue Code (the "Code") and those regulations promulgated thereunder for the following issue. Listed below is the issue requiring computations and ACS's fees to complete these calculations. One-Time Initial Set-Up Review Fee TOTAL Footnote: 4Y~5_..QO ~`4n initia~ set~up fee is required f~r each b~nd issue that d~es n~t have a pri~r rebate rep~rt. This fee covers our initial research on the bond issue and legal fees from our bond counsel who determines which funds are subject to arbitrage rebate. The issuer undertakes to provide or cause to be provided to AC5; all such relevant data as specified by ACS from time to time, with respect to each Calculation Date within 30 days after such date and shall cooperate with all reasonable requests of ACS in connection therewith. This information will be necessary to identify the amount of "gross proceeds" (as that term is used in the Code) of the issue subject to the rebate/penalty requirement, investment income thereon and applicable yields on the issue and on such investments in order to calculate the rebate and/or penalty liability of the lssuer with respect to the issue as of each Calculation Date. ACS is not being engaged hereunder to independently determine whether there were "prohibited payments" or "imputed receipts" within the meaning of the Treasury Regulations or to perform an audit or review of the investments acquired with gross proceeds or the payment of debt service on the issue. ACS will be entitled to rely entirely on information provided by the Issuer without independent verification. With respect to each Calculation Date, ACS will prepare schedules reflecting the relevant calculations and assumptions involved and will deliver a rebate report and instructions to the Issuer as to the amount of rebate liability as of such Calculation Date. Although the Treasury has published certain regulations and other pronouncements relating to the calculation of arbitrage rebate and penalty, the Treasury may publish additional regulations and other pronouncements and supplement, amend or interpret such regulations and pronouncements from time to time, with the result that the amount of rebate and/or penalty liability determined by ACS may be subject to adjustment in the future. if this engagement letter is satisfactory, please have an authorized official execute one copy and return to Mr. Charles Yaple of Null-Lairson or to me at ACS. We welcome any questions you may have, and invite you to call me at ACS at anytime at (800) 672-9993. Sincerely, Arbitrage Compliance Specialists, Inc. Janet P. Sacks, Director Please acknowledge acceptance of this engagement by signing and returning one copy of this letter to Arbitrage Compliance Specialists, Inc. Accepted Title Date -2-