HomeMy WebLinkAboutWilldan Financial Services; 2015-09-25;AGREEMENT FOR ARBITRAGE REBATE SERVICES
WILLDAN FINANCIAL SERVICES
RECITALS
City requires the professional services of a firm that is experienced in Arbitrage Rebate
Services. Contractor has the necessary experience in providing these professional services, has
submitted a proposal to City and has affirmed its willingness and ability to perform such work.
NOW, THEREFORE, in consideration of these recitals and the mutual covenants
contained herein, City and Contractor agree as follows:
1. SCOPE OF WORK
City retains Contractor to perform, and Contractor agrees to render, those services (the
"Services") that are defined in Exhibit "A" (for bond issue Community Facilities District-"CFD"-
No.3 2006 Special Tax Bonds, Improvement Area 1), attached and incorporated by this reference
in accordance with the terms and conditions set forth in this Agreement.
2. TERM
This Agreement will be effective for a period of one year from the date first above written.
3. COMPENSATION
The total fee payable for the Services to be performed will be two thousand dollars ($2,000) as
further stated in Exhibit A. No other compensation for the Services will be allowed except for items
covered by subsequent amendments to this Agreement. City reserves the right to withhold a ten
percent ( 1 0%) retention until City has accepted the work and/or the Services specified in Exhibit
"A." Payment for services will be due upon the completion of arbitrage services for CFD No. 3
2006 Special Tax Bonds, Improvement Area 1.
4. STATUS OF CONTRACTOR
Contractor will perform the Services as an independent contractor and in pursuit of Contractor's
independent calling, and not as an employee of City. Contractor will be under the control of City
only as to the results to be accomplished.
5. INDEMNIFICATION
Contractor agrees to indemnify and hold harmless the City and its officers, officials, employees
and volunteers from and against all claims, damages, losses and expenses including attorneys
fees arising out of the performance of the work described herein caused by any negligence,
recklessness, or willful misconduct of the Contractor, any subcontractor, anyone directly or
indirectly employed by any of them or anyone for whose acts any of them may be liable.
The parties expressly agree that any payment, attorney's fee, costs or expense City incurs or
makes to or on behalf of an injured employee under the City's self-administered workers'
compensation is included as a loss, expense or cost for the purposes of this section, and that this
section will survive the expiration or early termination of this Agreement.
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6. INSURANCE
Contractor will obtain and maintain policies of commercial general liability insurance, automobile
liability insurance, a combined policy of workers' compensation, employers liability insurance, and
professional liability insurance from an insurance company authorized to transact the business of
insurance in the State of California which has a current Best's Key Rating of not less than "A-:VII";
OR with a surplus line insurer on the State of California's List of Approved Surplus Line Insurers
(LASLI) with a rating in the latest Best's Key Rating Guide of at least "A:X"; OR an alien non-
admitted insurer listed by the National Association of Insurance Commissioners (NAIC) latest
quarterly listings report, in an amount of not less than one million dollars ($1 ,000,000) each,
unless otherwise authorized and approved by the Risk Manager or the City Manager. Contractor
will obtain occurrence coverage, excluding Professional Liability, which will be written as claims-
made coverage. The insurance will be in force during the life of this Agreement and will not be
canceled without thirty (30) days prior written notice to the City by certified mail. City will be named
as an additional insured on General Liability which shall provide primary coverage to the City. The
full limits available to the named insured shall also be available and applicable to the City as an
additional insured. Contractor will furnish certificates of insurance to the Contract Department,
with endorsements to City prior to City's execution of this Agreement.
7. CONFLICT OF INTEREST
Contractor shall file a Conflict of Interest Statement with the City Clerk in accordance with the
requirements of the City of Carlsbad Conflict of Interest Code. The Contractor shall report
investments or interests in all four categories.
8. COMPLIANCE WITH LAWS
Contractor will comply with all applicable local, state and federal laws and regulations prohibiting
discrimination and harassment and will obtain and maintain a City of Carlsbad Business License
for the term of this Agreement.
9. TERMINATION
City or Contractor may terminate this Agreement at any time after a discussion, and written notice
to the other party. City will pay Contractor's costs for services delivered up to the time of
termination, if the services have been delivered in accordance with the Agreement.
10. CLAIMS AND LAWSUITS
By signing this Agreement, Contractor agrees it may be subject to civil penalties for the filing of
false claims as set forth in the California False Claims Act, Government Code sections 12650, et
seq., and Carlsbad Municipal Code Sections 3.32.025, et seq. Contractor further acknowledges
that debarment by another jurisdiction is grounds for the City of Carlsbad to terminate this
Agreement.
11. JURISDICTIONS AND VENUE
Contractor agrees and stipulates that the proper venue and jurisdiction for resolution of any disputes
between the parties arising out of this Agreement is the State Superior Court, San Diego County,
California.
12. ASSIGNMENT
Contractor may assign neither this Agreement nor any part of it, nor any monies due or to become
due under it, without the prior written consent of City.
13. AMENDMENTS
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This Agreement may be amended by mutual consent of City and Contractor. Any amendment will
be in writing, signed by both parties, with a statement of estimated changes in charges or time
schedule.
14. AUTHORITY
The individuals executing this Agreement and the instruments referenced in it on behalf of
Contractor each represent and warrant that they have the legal power, right and actual authority
to bind Contractor to the terms and conditions of this Agreement.
CONTRACTOR CITY OF CARLSBAD, a municipal
corporation of the State of California
By:/) ,/J ~~ 01 Director
Charles l'vlcBride, Administrative Services
Director
ATTEST:
By: ~~
~ ~~·~ CityCierk
(print name/ · ) J
If required by City, proper notarial acknowledgment of execution by contractor must be attached.
If a corporation, Agreement must be signed by one corporate officer from each of the following
two groups:
Group A.
Chairman,
President, or
Vice-President
Group B.
Secretary,
Assistant Secretary,
CFO or Assistant Treasurer
Otherwise, the corporation must attach a resolution certified by the secretary or assistant
secretary under corporate seal empowering the officer(s) signing to bind the corporation.
APPROVED AS TO FORM:
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EXHIBIT "A"
SCOPE OF SERVICES
Contractor will perform and the deliverables Contractor will provide as part of Contractor's
Arbitrage Rebate Services:
TEAM:
The Federal Compliance Division of Willdan Financial Services is staffed with experts in tax rules,
municipal credit analysis, securities law and electronic reporting, who understand the importance
of meeting federal compliance requirements on time and in full.
The following Contractor team members will be assigned to the project:
SCOPE OF SERVICES:
Anne Pelej -Group Manager
Steve Bearce -Senior Project Manager
David Davies -Project Manager
Please see Attachment 1, attached hereto and incorporated herein, providing an itemized list of
services that Contractor will perform pursuant to the terms and conditions of this Agreement.
PRICE:
The following is a list of the Bond Issues and prices associated with this contract:
Bond Issue
CFD No. 3 2006 Special Tax Bonds,
Improvement Area 1
TOTAL:
Additional Services
Online Compliance Management System
Preparation of IRS Form 8038T
Yield Restriction Computation
Commingled Funds Analysis
Transferred Proceeds Analysis
Request for Refund of Overpayment
IRS Audit Assistance
*Amendment to Agreement required.
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No Charge
No Charge
$500 per Fund*
$250 per Fund*
$500 per Fund*
Hourly Rates*
Hourly Rates*
Price
$2,000
$2,000
Price
City Attorney Approved Version 4/1/15
ATTACHMENT 1
SCOPE OF SERVICES
Task 1:
Task 2.
Task 3:
Define Compliance Needs and Provide Implementation Schedule
Objective: Obtain bond documents, prior reports, and transactional data necessary
to prepare and document arbitrage rebate liabilities.
Description: WFS will review the bond documents and prior reports, determine if any
special elections were made at issue, and verify the exceptions to rebate
have been properly applied.
Duration: Prior to computation date.
Deliverable: Implementation schedule and access to online Compliance Management
System.
Verify Bond Yield and Prepare Arbitrage Rebate and Yield Restriction Analysis
Objective: Update the cumulative arbitrage rebate liability and/or yield reduction
payment accrual for each bond.
Description: During the computation of arbitrage rebate and yield restriction positions
for the bonds, WFS will:
• Verify the bond yield;
• Identify gross proceeds, transferred proceeds, replacement
proceeds, and all other funds considered part of the financing;
• Compute investment earnings, taking into account the proper
allocation of commingled funds;
• Future value transactions to the computation date, inclusive of the
computation date credit;
• Test for exceptions to rebate, including spending exceptions and
penalty in-lieu requirements;
• Analyze unspent construction funds, overfunded reserves, and other
events that may be in violation of Section 148 of the tax code;
• Analyze opportunities to recapture negative arbitrage or recover
overpayments;
• Determine the yield reduction payment pursuant to Section 148(f) of
the Internal Revenue Code; and
• Determine the cumulative arbitrage liability pursuant to Section 148(f)
of the Internal Revenue Code.
Duration: One (1) to three (3) weeks, depending upon the complexity of the
financing.
Deliverable: None.
Review and Assess Analysis Outcome
Objective: Multi-tiered review of each prepared report and internal discussion of
assumptions and opportunities to reduce the rebate liability.
Description: Proper application of the arbitrage rebate regulations requires a detailed
understanding of the original intent of financing as well as the historical
use of proceeds.
Once the mathematical analysis is complete, two (2) senior-level rebate
consultants will perform a comprehensive review of the report noting
theoretical and technical issues to be evaluated. If appropriate, these issues
will be communicated to you.
Duration: One (1) to two (2) weeks, depending upon the complexity of the financing.
Deliverable: Possible discussion with your staff.
Willdan Financial Services City of Carlsbad
Task 4:
Task 5:
Conclusions. Recommendations. and Action Plan
Objective: Develop conclusions, recommendations, and produce reports, as necessary
to maintain regulatory compliance for each financing.
Description: We will provide analytical reports with recommendations for actions
necessary to close the gap between adequate rebate reporting and
comprehensive bonded debt compliance management
Duration:
Deliverable:
Our reports and recommendations will include, but will not be limited to:
• Actions that can be taken to increase monies available for the project;
• Actions that can be taken to decrease an arbitrage rebate liability or
upcoming yield reduction payment;
• Actions that can be taken to correct situations that may receive an
unfavorable audit determination;
• Areas where allocation and accounting methodology could be
enhanced;
• Identification of technologies not currently in use that may be
applicable and appropriate for future consideration;
• Identification of obstacles or challenges that could prevent timely or
accurate compliance;
• Detailed arbitrage rebate report inclusive of summary analysis; and
• Instructions for filing IRS forms.
One (1) week.
Hardcopy and electronic reports inclusive of:
• Executive Summary detailing the assumptions and methodology used;
•
•
•
•
•
•
•
Summary Analysis of all relevant dates;
Sources and uses of funds;
Arbitrage yield and yield restriction requirements;
Rebate liability summarized and by fund;
Arbitrage/Investment Yield Comparison Graph;
Rebate Calculations by fund; and
Outstanding Investments Summary .
Review Results with Your Staff
Objective:
Description:
Duration:
Deliverable:
Ensure your staff has adequate understanding of the rebate positions,
opportunities, and possible areas of enforcement concern.
The WFS team will brief your staff on situations that offer opportunity for
improved results or that may become a concern for regulatory auditors.
Key strategic, procedural, and investment issues will be discussed, as well
as your strengths and challenges relating to long-term debt compliance.
One (1) week.
Discussion with your staff.
Willdan Financial Services City of Carlsbad
Task 6:
Task 7:
File IRS Payment and Refund Requests
Objective:
Description:
Duration:
Deliverable:
Supply completed IRS forms relating to arbitrage rebate payments and
refund requests. Provide specific filing instructions and consultation
regarding the possible consequences of the refund request.
Prompt arbitrage rebate payment demonstrates a willingness to comply with
the regulatory authority of the IRS. Being prepared for the questions that
may follow filings demonstrates attention to the long-term duties associated
with issuing tax-exempt debt.
As needed.
Completed IRS Payment and Refund Request Forms, with accompanying
instructions.
Monitor Regulatory Enhancement and Enforcement Actions
Objective: WFS will help your staff stay abreast of regulatory interpretation and
enforcement, ensuring the content of the rebate reports does not grow stale.
Description: WFS requires analyst staff to participate in yearly continuing education
events, and encourages discussion of current regulatory interpretation with
clients. Depending upon the circumstances, WFS can recommend
procedural and documentation changes and help train staff.
Duration: Ongoing.
Deliverable: Audit assistance.
Willdan will rely on the validity and accuracy of the City's data and documentation to complete our analysis.
Willdan will rely on the data as being accurate without performing an independent verification of accuracy,
and that we will not be responsible for any errors that result from inaccurate data provided by the client or a
third party.
Willdan Financial Services City of Carlsbad
Kathy Hamilton
From:
Sent:
To:
Cc:
Kathy Hamilton
Tuesday, September 29, 2015 10:38 AM
'lbromley@willdan.com'
Aaron Beanan; Tammy McMinn; Shelley Collins; Donna Heraty
(Donna.Heraty@carlsbadca.gov)
Subject: REQUIRED CONFLICT OF INTEREST
Lisa:
You are receiving this email because your company has a consultant agreement with the City of Carlsbad. The team
members assigned are: Anne Pelej, Steve Bearce and David Davies. The City of Carlsbad's Conflict of Interest Code
requires all consultants to file a statement disclosing certain economic interests, that may foreseeably be affected
materially by any decisions made, or participated in, by a designated official because of their position. To comply with
this requirement a Statement of Economic Interest Form 700 "Assuming Office" is required to be filed with the City of
Carlsbad City Clerk's Office by each of the team members.
To file your Assuming Office statement, please follow the instructions below:
• As reflected in the City Conflict of Interest Code-Resolution No. 2012-114 (below), the employee(s) of your
company that work directly with city staff are required to complete the Statement of Economic Interest Form
(Form 700). Consultants are required to claim-
Category (A) Investment and Real Property Disclosure
Category (B) Personal Income Disclosure
Category (C) Business Entity Income Disclosure
Category (D) Business Position Disclosure
• Your "Assuming Office" date for this filing is September 25, 2015.
• Even if there are no reportable interests, the cover page is still required to be completed with box "None" in
Section 4 checked.
• THE COMPLETED FORM 700 IS DUE IN THE CITY CLERK'S OFFICE BY 5:00PM, OCTOBER 26, 2015.
Mailing Address: City Clerk's Office, 1200 Carlsbad Village Drive, Carlsbad, CA 92008.
• Form 700
• Form 700 Reference Pamphlet
Other documents you may use as reference:
• FAQ: Form 700 Disclosure
• Local Gift Fact Sheet
• Resolution Nos. 2012-114 and 2013-237
In addition, when your contract with the City of Carlsbad is completed, the employee(s) that filed the Assuming Office
statement is/are required to file a "Leaving Office" statement, utilizing the same Form 700 and entering the date the
contract ended in the "Leaving Office" date line, and submitting to the City Clerk's Office no later than 30 days following
completion of the agreement.
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**Failure to file the Assuming and/or leaving Office statement{s) could result in penalties assessed at $10.00 per day,
not to exceed $100.00, in addition to anv other penalties per California Government Section Code 91013.
If vou have any questions or need additional information, please feel free to contact me or the Fair Political Practices
Commission (FPPC) at 1-866-ASK-FPPC (1--866-275-3772).
Sincerely,
Donna Heraty.
Donna Heraty, CMC
Deputy City Clerk
City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
_www.ca rlsbadca .gov
P: 760-434-2808
F: 760-720-6917
_donna.heraty@carlsbadca.gov
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