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Home My WebLink AboutCAG2001-0046 - Original - Arbitrage Compliance Specialists, Inc. - Arbitrage Rebate Services for LID Issues - 02/05/2001 A R B I T R A G E C O M P L I A N C E February 5,2001 S P E C I A L I SF S I N C O R P O R A T E D Ms.Mayene Miller,Finance Director and 3800 South Albion Street, Suite 200 Mr.Jim Huntington,CPA Englewood, Colorado 80110-4239 303. 756. 5100 Fax:303. 756. 0901 Sr.Auditor/Financial Economist ArbCom®Earthlink.net City of Kent 800. 672. 9993 Finance Department Branch o/Acaa: 220 4th Avenue South colunba,scam carolm Las naps,Nevada Houston,Texas Odando,Florida Kent,Washington 98032-5895 Kn Be,Temausee PalWe,,Dragon La jau,caftbmia Sal(Lake 004 Utah cc: Ms.Naomi Keck ENGAGEMENT LETTER FOR ARBITRAGE REBATE SERVICES FOR LOCAL IMPROVEMENT DISTRICT("LID")ISSUES REQUIRING REBATE CALCULATIONS The purpose of this letter is to propose our engagement to prepare arbitrage rebate computations pertaining to the required rebate to the Department of the Treasury, Internal Revenue Service (the"IRS")for the following Local Improvement District bond issues (the 'Bonds")on behalf of City of Kent, Washington. Listed below are the issues requiring computations, Arbitrage Compliance Specialists, Inc. fees and information required to complete these calculations. $2,017,554.85 Consolidated Local Improvement District No.297 et al.Guaranty Fund Bonds,1987 Delivery Date: 4129187 FINAL REBATE REPORT(as required by the IRS)-4/29/87—10/1/90 One-Time Initial Set-up Review Fee $ 450.000 Report Fee Fixed Rate(I year @$1,195) 1,195.00 Reports covering Computation Period in excess of 1 year($575 for each additional year, @ 3 years) 1,725.00 Allocation of Common Reserve Fund TOTAL Data Requirement: Investment data for the computation period 4/29/87— 10/1/90. $1,359,791.52 Consolidated Local Improvement District No.316 et al.Guaranty Fund Bonds, 1988 Delivery Date: 3124188 5TH YEAR REBATE REPORT(as required by the IRS)-3/24/88-3/24/93 One-Time Initial Set-up Review Fee $ 450.000 Report Fee Fixed Rate(1 year @$1,195) 1,195.00 Reports covering Computation Period in excess of 1 year($575 for each additional year, @ 4 years) 2,300.00 Allocation of Common Reserve Fund 0 TOTAL FINAL REBATE REPORT(as required by the IRS)-3/24/93-3/1/97 as part of the period 3/24/88-3/1/97 Report Fee Fixed Rate(1 year @$1,195) $1,195.00 Reports covering Computation Period in excess of 1 year($575 for each additional year, @ 3 years) 1,725.00 Allocation of Common Reserve Fund 0 TOTAL $2,Q2il,QQ* Data Requirement: Investment data for the computation period 3/24/88-3/l/97. $1,070,605.79 Consolidated Local Improvement District No.322 et al.Guaranty Fund Bonds, 1989 Delivery Date: 3115189 5TH YEAR REBATE REPORT(as required by the IRS)-3/15/89-3/15/94 One-Time Initial Set-up Review Fee $ 450.000 Report Fee Fixed Rate(I year @$1,195) 1,195.00 Reports covering Computation Period in excess of I year($575 for each additional year, @ 4 years) 2,300.00 Allocation of Common Reserve Fund TOTAL 9 * FINAL REBATE REPORT(as required by the IRS)-3/15/94-3/1/98- as part of the period 3/15/89-3/1/98 Report Fee Fixed Rate(I year @$1,195) $1,195.00 Reports covering Computation Period in excess of I year($575 for each additional year, @ 3 years) 1,725.00 Allocation of Common Reserve Fund 0 TOTAL �* Data Requirement: Investment data for the computation period 3/15/89-3/1/98. $2,296,074.47 Local Improvement District No.327 Guaranty Fund Bonds, 1989 Delivery Date: 7127189 5TH YEAR REBATE REPORT(as required by the IRS)-7/27/89-7/27/94 One-Time Initial Set-up Review Fee $ 450.000 Report Fee Fixed Rate(1 year @$1,195) 1,195.00 Reports covering Computation Period in excess of I year($575 for each additional year, @ 4 years) 2,300.00 Allocation of Common Reserve Fund 0 TOTAL SM 4* LOTH YEAR REBATE REPORT(as required by the IRS)-7/27/94-7/27/99 as part of the period 7/27/89-7/27/99 Report Fee Fixed Rate($1,195 1 year period) $1,195.00 Reports covering Computation Period in excess of 1 year($575 for each additional year, @ 4 years) 2,300.00 Allocation of Common Reserve Fund TOTAL 53,445.Q4* Data Requirement: Investment data for the computation period 7/27/89-7/31/99. -2- $1,697,303.49 Consolidated Local Improvement District No.328/334 Guaranty Fund Bonds,1990 Delivery Date: 811190 5TH YEAR REBATE REPORT(as required by the IRS)-8/1/90-8/1/95 One-Time Initial Set-up Review Fee $ 450.000 Report Fee Fixed Rate(1 year @$1,195) 1,195.00 Reports covering Computation Period in excess of I year($575 for each additional year, @ 4 years) 2,300.00 Allocation of Common Reserve Fund 0 TOTAL 945 00* I OTH YEAR REBATE REPORT(as required by the IRS)—8/1/95—8/1/00 as cart of the period 8/1/90—8/l/00 Report Fee Fixed Rate($1,195 1 year period) $1,195.00 Reports covering Computation Period in excess of 1 year($575 for each additional year, @ 4 years) 2,300.00 Allocation of Common Reserve Fund 0 TOTAL $3 49 Data Requirement: Investment data for the computation period 8/1/90—8/31/00. $4,033,732.35 Local Improvement District No.330 Bonds,1990 Delivery Date: 9125190 5TH YEAR REBATE REPORT(as required by the IRS)-9/25/90-9/25/95 One-Time Initial Set-up Review Fee $ 450.000 Report Fee Fixed Rate(1 year @$1,195) 1,195.00 Reports covering Computation Period in excess of 1 year($575 for each additional year, @ 4 years) 2,300.00 TOTAL 4 * LOTH YEAR REBATE REPORT(as required by the IRS)—9/25/95—9/25/00 as part of the period 9/25/90—9/25/00 Report Fee Fixed Rate($1,195 1 year period) $1,195.00 Reports covering Computation Period in excess of 1 year($575 for each additional year, @ 4 years) 2,300.00 TOTAL 49$ S 00* Data Requirement: IRS Form 8038-G and investment data for the computation period 9/25/90—9/30/00. $397,413.07 Consolidated Local Improvement District No.333,et al. Bonds Delivery Date: 5119193 5TH YEAR REBATE REPORT(as required by the IRS)-5/19/93-5/19/98 One-Time Initial Set-up Review Fee $ 450.000 Report Fee Fixed Rate(1 year @$1,195) 1,195.00 Reports covering Computation Period in excess of 1 year($575 for each additional year, @ 4 years) 2,300.00 Allocation of Common Reserve Fund 0 TOTAL 45.00* Data Requirement: Investment data for the computation period 5/19/93 until spent. -3- $518,612.00 Local Improvement District No.346 Bonds Delivery Date: 11121195 5TH YEAR REBATE REPORT-11/21/95- 11/21/00 One-Time Initial Set-up Review Fee $ 450.000 Report Fee Fixed Rate(1 year @$1,195) 1,195.00 Reports covering Computation Period in excess of 1 year($575 for each additional year, @ 4 years) 2,300.00 Allocation of Common Reserve Fund 0 TOTAL 945 00* Data Requirement: Investment data for the computation period 11/21/95— 11/30/00, when available. $781,624.64 Local Improvement District No.345 Bonds Delivery Date: 12130196 CURRENT REBATE REPORT- 12/30/96- 12/30/00 One-Time Initial Set-up Review Fee $ 450.000 Report Fee Fixed Rate(1 year @$1,195) 1,195.00 Reports covering Computation Period in excess of 1 year($575 for each additional year, @ 3 years) 1,725.00 Allocation of Common Reserve Fund 0 TOTAL 3-3 * Data Requirement: Investment data for the computation period 12/30/96-12/31/00,when available. $942,617.00 Consolidated Local Improvement District No.347 and 348 Bonds Delivery Date: 8117198 Query Bond Counsel to determine if this issue qualifies for the$5 Million Exemption to rebate. If Bond Counsel determines that this issue is subject to rebate, ACS will test to see if this issue meets any of the spending exceptions to rebate. If this issue does not meet the requirements for any of the spending exceptions to rebate, ACS will perform rebate calculations for this issue. ACS's fees for rebate calculations are$1,195for a 1 year rebate report and 450 for the one-time initial set-up review fee. If spenddown calculations are required,ACS's fee for each 6 month period would be$1,250 from the date of issuance until all of the bond proceeds have been spent. SUBTOTAL $50,680.00 ACS 10% MULTIPLE ISSUE DISCOUNT (5,068.00) GRAND TOTAL Footnotes for pricing: OAn initial set-up fee is required for each bond issue. This fee covers our initial research on the bond issue and legal fees from our in-house tax counsel who determines which funds are subject to arbitrage rebate. ONo charge for the initial set-up legal review when there is a prior rebate report ACS can rely on. OThe Common Reserve Fund established for the Bonds will be need to be allocated between all Bonds supported by the Reserve Fund @$125/hour. "Optional Charges for all issues, if applicable: $125 per hour- Uncommingling of any funds, accounts or investments, as required; transferred proceeds allocations,as required;preparation ofform 8038-T, ifrebate is owed and applicable. If spending exception reports in lieu of arbitrage rebate reports are applicable and requested, the fee per each 6-month report is$1,250. No ACS discount is given on hourly fees. -4- In conjunction with this engagement we will provide for each Local Improvement District issue as applicable, an initial set-up and legal review and a special report opining to the rebate liability for the computation period. If rebate is owed to the IRS,ACS's in-house tax attorney will complete all the filing instructions and Form 8038-T for the City's signature. We appreciate the opportunity to provide assistance to the City of Kent, Washington. If we may be of further assistance or if you have any questions, please do not hesitate to call me at(800)672-9993 or Naomi Keck at(503) 257-3979. Sincerely, Arbitra Compliance S 'al' ts, Inc. JauSacks,Director Please acknowledge acceptance of this engagement by signing and returning one copy of this letter to Arbitrage Compliance Specialists,Inc. r L Accept Title PP rww c9 /bs Ta C iT`t -5-