HomeMy WebLinkAbout4.02 1988COP RebateCalcSvs
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CITY OF DUBLIN
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: April 12, 1993
SUBJECT: 1988 certificate of participation (COP) Rebate
Calculation Services - Substitution of Firms
~PrTred by: Paul. S. Rankin, Assistant city Mgr.)
EXHIBITS ATTACHED: 1. Letter dated March 30, 1993 from Jones Hall Hill &
White Regarding Request to Terminate Services
2.~ Proposed Termination Agreement
17 q<;. ~PropoSed Substitution Agreement With Ernst & Young
RECOMMENDATION~~' Authorize the Mayor to execute the agreements on behalf
of the city of Dublin.
FINANCIAL STATEMENT:
The cost of these services will be $ 2,000.
Adequate funds are included in the approved Fiscal
Year 1992/93 Budget.
DESCRIPTION: In 1989, the city council approved securing services
from the law firm of Jones Hall Hill & White (JHHW). The services to be
performed included the calculation of any rebate owed to the Federal
Government, as a resul t of the issuance of the 1988 civic center COP's.
The Federal Government requires these calculations to be completed 5 years
following the date of funding for tax exempt issues. The date of the 1988
COP funding was March 30, 1988.
JHHW previously prepared a report covering the period from March 30, 1988
through August 1, 1990. The report was issued in July of 1991 and found
that no rebate liability existed at that time. In addition to the legal
requirement for this review on a five year cycle, there are other factors
which can impact the frequency. A review can assure auditors and
management that there is not a large future rebate liability. Also, the
Trustee has an interest in assuring that the certificates are not in
jeopardy of losing tax exempt treatment.
Staff anticipated the need for this report in the preparation of the
1992/93 budget. Pursuant to the agreement with JHHW, the cost of these
services were calculated at $2,000 and this amount was budgeted in the
Finance Department Professional Services account.
As stated in Exhibi t 1, JHHW have indicated an interest in terminating
their services. Representatives of the firm have explained to staff that
they are no longer pursuin9 the provision of these services. The law firm.
has identified an account1ng firm (Ernst & Young), which is willing and
capable of assuming the responsibilities under the same terms as the JHHW
agreement. In order to respond to the request by JIDIW, it would be
appropriate for the Ci ty Council to authorize the Mayor to execute the
Termination Agreement, attached to this report as Exhibit 2.
Exhibit 3 is a Substitution Agreement, which will allow Ernst & Young to
undertake the preparation of the Rebate Calculation. Attached as an
Exhibit to the proposed agreement is the original agreement with JHHW. As
noted, Ernst & Young will undertake the report for the same fee as is
stated in the 1989 agreement with JHHW.
staff recommends that the city Council authorize the Mayor to execute both
agreements on behalf of the City of Dublin.
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ITEM NO.
4.2
COPIES TO:
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t'I/\P '~ '1 1993
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CITY 0'- Ol mUN
JONES HALL HILL & WHITE,
A PROFESSIONAL LAW CORPORATION
ATTORNEYS AT LAW
CHARLES l'. ADANS
STEPHEN R. CASALEOOIO
l'I1CHAEL D. CASTELLl
THOl'lAS A. DOWNEY
ANDREW C. HALL, JR.
OREO HARR1NOTON
KENNETU 1. .JONES
W1LL1Al'I H. l'IAUISON
R. WADE NORRIS.
DAV1D J. OSTER
DR1AN D. QUINT
PAUL J. TIUl'Il'IIO
DAVID A. WALTON
SUARON STANTON WHITE
FOUR EMBARCADERO CENTER
NINETEENTH FLOOR
SAN FRANCISCO, CA 94111
(415) 391-5780
F.....CSIMILE
I-UOI301-0704
C4115IOlH-G78G
14151 9156-0308
March 30, 1993
HODERT J. lULL Cl922'J088J
. ",-pNl'l'TI!D TO OEOROIA BAB ONLY
Paul S. Rankin
Assistant City Manager
City of Dublin
100 Civic Plaza
Dublin, CA 94568
RE: $17,230,000 City of Dublin Refunding Certificates of Participation (Civic Center
Project)
Dear Mr. Rankin:
This will confirm my conversation with Stan Stephens on March 29, 1993.
OUf firm has identified Ernst & Young, 1100 Citibank Tower, One South
Church Avenue, Tucson, Arizona 85701 as a firm which provides rebate calculation
services very similar to those that which we have provided in the past. Jenny
Summers (Tel. #412-362-5220) is our contact person at Ernst & Young, and has agreed
to undertake rebate calculations contractual commitments at the same fee that we
have been charging.
As I discussed with Mr. Stephens, it would be appropriate for you to sign the
enclosed termination agreements, to return one original to Dorinda Mercado at our
office, and to enter into a substitute arran2ement with Ernst & Y oun~.
If you have any questions regarding this matter, please feel free to call me at
(415) 391-5780.
Very truly yours,
Robert M. Saman
Financial AnalystXHIBIT 1.
Enclosures
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TERMINATION AGREEMENT
THlS AGREEMENT is made and entered into this 12th day of April
1993, by and between the City of Dublin (the "City") and Jones Hall Hill & White, A
Professional Law Corporation ("Attorneys");
WIT N ESE T H:
WHEREAS, on March 13, 1989 the City and Attorneys entered into an Agreement for
Rebate Calculation Services relating to the $17,230,000 City of Dublin Refunding Certificates
of Participation (Civic Center Project) (the "Rebate Agreement"); and
WHEREAS, the City and Attorneys desire to terminate the Rebate Agreement; .
NOW, THEREFORE, in consideration of the above premises and for other valuable
consideration, the City and Attorneys hereby agree that the Rebate Agreement is terminated
as of the date hereof.
IN WlTNESS WHEREOF, the City and Attorneys have hereunto set their name by
their officers thereunto duly authorized all as of the date set forth above.
City of Dublin
By:
Peter W. Snyder, Mayor
ATTEST:
Kay Keck, City Clerk
Jones Hall Hill & White,
A Professional Law Corporation
~I~
Sharon Stanton White
By:
'Exhibit z
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Su bstitution Agreement
lHIS AGREEMENT is mnde and entered into this 12th day of April, 1993 by and between
the City of Dublin, California (the "City") and Ernst & Young ("E& Y").
Wi tnesseth
WHEREAS, on March 13, 1989, the City and Jones Hall Hill & White, a Profe[O;~ional
Law Corporation ("Attorneys") entered into an Agreement for Rehate Cak:ulation Services
(the "Rebate Agreement"), said Agreement is attached hereto as Exhibit "A" and by
reference made a part hereof; and
WHEREAS, lhe Rebate Agreement has been tennmated;
Now, therefore the City employs E&Y and E&Y accepts such employment upon the same
terms and conditions of the above refercnced Rebate Agreement with the following
exceptions: (a) E& Y will provide in lieu of a legal opinion, n signcd Accountant's Report
stating that the Rebate Amount has been detennined as described in Section 148(0(2) of
the Internal Revenuc Code of 1986 and related Regulations. and (b) the $1,000 fee payable
upon execution of the agreement as described in Article II shall not be applicable to this
Su bstitution Agreement.
IN WITNESS WHEREOF, the City and E&Y have hereunto set their name by Lheir
officers thcreunlo duly authorized all as of the date set form above.
City of Dublin, California
By
Peter W. Snyder, Mayor
Emst& Young
BY~
William F. Baridon, Partner
~~'f.~HI8IT 3
It' ^. . ,
~i"wY
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AFTER EXECUTION PLEASE RETURN TO:
Jones Hall Hill & White,
A Professional Law Corporation
Four Embarcadero Center, Suite 1950
'San Francisco, CA 94111
Attention: Ms. Janice S. Mazyck
AGREEMENT FOR REBATE CALCULATION SERVICES
THIS AGREEMEN'r, is made and entered into this nth day of ~bl"Cl1 ,1989, by
and between the THE CITY OF DUBLIN, a municipal corporation duly organized and
existing under the laws of the State of California (herein called the "City") and JONES
HALL HILL & WHITE, A PROFESSIONAL LAW CORPORATION, San Francisco,
California (herein called" Attorneys");
W ! T N E ~ ~ E I H:
WHEREAS, pursuant to the Amended and Restated Lease Agreement' dated
March 1, 1988 (the "Lease Agreement"), and pursuant to a Trust Agreement, dated
March 1, 1988 (the "Trust Agreement"), the City has caused the delivery of its
$17,230,000 Refunding Certificates of Participation (Civic Center Project) (the
"Certificates") representing direct undivided fractional interests in lease payments to be
paid by the City under the Lease Agreement.
WHEREAS, pursuant to section 7 .07 of the Trust Agreement, the City is required
to undertake certain duties and responsibilities relating to the requirement for rebate of
excess investment earnings to the United States of America, in accordance with Section
148(f) of the Internal Revenue Code of 1986 (the "Code"); and
WHEREAS, Attorneys are qualified by training and experience to perform the
computation services required, and Attorneys are willing to provide such services;
NOW, THEREFORE, the City employs Attorneys, and Attorneys accept such
employment, upon the following terms and conditions:
ARTICLE I
DUTIES OF ATTORNEYS
Attorneys shall perform and render the following services to the extent necessary
to provide for compliance with Section 148(f) of the Code in connection with the
Certificates:
A. Perform rebate calculations required by Section 148(f) of the Code and
applicable regulations.
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B. Provide instructions to the City concerning compliance with Section 148(f) of
the Code and applicable regulations.
C. Consult and cooperate with the City and their officers and employees as
.necessary to provide for compliance of the Certificates with the requirements of Section
148(f) of the Code.
D. Upon the request of City following any rebate calculation, and assuming
compliance with rebate instructions provided by Attorneys, provide a legal opinion
stating that the exclusion from gross income of interest payable with respect to the
Certificates for federal income tax purposes has not been advorsely affected by reason of
failure to comply with Section 148(f) of the Code.
E. Provide periodic memoranda summarizing newly issued regulations, rulings
and court decisions regarding Section 148(f) of the Code and describing their application
to the Certificates and suggest modifications (if any) of legal documents and procedures
relating to the Certificates as may be necessary to conform to such regulations, rulings
and court decisions.
. ARTICLE II
COMPENSATION AND COSTS
For the services of Attorneys set forth in Article I, the City shall pay Attorneys an
acceptance fee of $1,000 payable upon execution of this Agreement by the City and an
annual service fee of $2,000 per year payable at the end of each 'annual rebate calculation
period following performance of duties required of Attorneys for such year.
In addition to the compensation set forth in the preceding paragraph, City shall
reimburse Attorneys for direct out-of-pocket expenses for Federal Express or other
courier, messenger or delivery services, telecopy services, photocopying and (upon request
by the City for the same) expenses for travel outside of the State of California in
connection with the services rendered by Attorneys hereunder.
ARTICLE III
RESPONSIBILITIES OF CITY
City shall cooperate with Attorneys in the performance of their services under
Article I and shall provide Attorneys with information requested by Attorneys regarding
investments made with proceeds of the Certificates and amounts to be used for payment
of the Certificates or shall assist Attorneys in obtaining such information.
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ARTICLE IV
TERM OF AGREEMENT
This Agreement shall terminate on the first day of the third full calendar month
following the end of the fifth year pertaining to the Certificates unless earlier renewed by
supplemental agreement between the parties hereto, or unless the City shall, upon ten
days written notice to Attorneys, terminate this Agreement for failure of Attorneys to
perform the duties set forth in Article I hereof in a manner satisfactory to the City.
IN WITNESS WHEREOF, City and Attorneys have caused this Agreement to be
executed, in duplicate, by one of their respective duly authorized officers, all as of the day
and year first above written.
CITY OF DUBLIN
Bfi?z"<-~t oW 1f>tJ--
Paul C. Moffatt
nayor
JONES HALL I-IILL & WI-II'l'E,
A Professional Law Corporation
By
W6558