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HomeMy WebLinkAbout1995.11.21_OPWA AgendaPUBLIC NOTICE OF THE MEETING OF THE OWASSO PUBLIC WORKS AUTHORITY TYPE OF MEETING: Regular DATE: November 21, 1995 TIME: 7:00 p.m. PLACE: Council Chambers, Owasso Community Center Notice and Agenda filed in the office of the City Clerk and posted on the City Hall bulletin board at 4:00 p.m. on Friday, November 17, 1995. Marcia outwell, City erk AGENDA 1. Call to Order 2. Invocation 3. Flag Salute 4. Roll Call 5. Request Approval of the Minutes of November 7, 1995 Regular Meeting. Attachment #5 6. Request Approval of Claims Attachment #6 Owasso Public Works Authority November 21, 1995 Page 2 7. Consideration and Appropriate Action Relating to a Proposal to Provide Arbitrage Rebate Services Associated with the OPWA 1988 Revenue Bonds. Ms Bishop Attachment #7 The staff will recommend acceptance of a proposal from Larry A Evans, CPA, Inc to provide annual arbitrage rebate computation services for the 1988 Series Revenue Bonds for the period of November 2, 1994 through November 1, 1998 for a fee of $700 per year. 8. Report from OPWA Manager 9. Report from OPWA Attorney 10. Unfinished Business 11. New Business Owasso Public Works Authority November 21, 1995 Page 3 12. Adjournment OWASSO PUBLIC WORKS AUTHORITY MINUTES OF REGULAR MEETING Tuesday, November 7, 1995 The Owasso Public Works Authority met in regular session on Tuesday, November 7, 1995 in the Council Chambers at the Owasso Community Center per the Notice of Public Meeting and Agenda posted on the City Hall bulletin board at 4:00 p.m. on Friday, November 3, 1995. ITEM 1: CALL TO ORDER Chairman Burris called the meeting to order at 8:28 p.m. ITEM 2: INVOCATION The invocation was given during the City Council meeting preceding this meeting. ITEM 3: FLAG SALUTE The flag salute was held during the City Council meeting. ITEM 4: ROLL CALL PRESENT Charles Burris, Chairperson Danny Ewing, Vice Chairperson Mary Lou Barnhouse, Trustee Joe Ramey, Trustee Michael Helm, Trustee STAFF Rodney J Ray, City Manager Ronald D Cates, Authority Attorney Marcia Boutwell, Authority Secretary A quorum was declared present. ABSENT ITEM 5: REQUEST APPROVAL OF THE MINUTES OF OCTOBER 17, 1995 REGULAR MEETING. Mr Ramey moved to approve the minutes as written, by reference hereto; seconded by Mr Helm. AYE: Ramey, Helm, Ewing, Barnhouse, Burris NAY: None Motion carried 5 -0. Owasso Public Works Authority ITEM 6: REQUEST APPROVAL OF CLAIMS November 7, 1995 Mr Helm moved, seconded by Mr Ramey, to approve the following claims as submitted: (1) OPWA Fund $89,935.14; (2) OPWA Capital Improvement Fund $72,399.57; (3) Interfund Transfers $34,233.17; (4) Payroll #1 $26,088.27; Payroll #2 $26,176.59. AYE: Helm, Ramey, Barnhouse, Ewing, Burris NAY: None Motion carried 5 -0. ITEM 7: REPORT FROM OPWA MANAGER No report. ITEM 8: REPORT FROM OPWA ATTORNEY No report. ITEM 9: UNFINISHED BUSINESS None. ITEM 10: NEW BUSINESS None. ITEM 11: ADJOURNMENT Mr Helm moved, seconded by Ms Barnhouse, to adjourn. AYE: Helm, Barnhouse, Ramey, Ewing, Burris NAY: None Motion carried 5 -0 and the meeting was adjourned at 8:30 p.m. Marcia Boutwell, Authority Secretary Charles L Burris, Chairperson CTTY OF OWASSO OWASSn PUBLTC WORYS; AITTT40PTTY 11/171/95 11:03:o4 A/P CLATMS REPORT APAPVP PAGF: PO # DESCRTPTTON 960014 I)FPT OF Fl-l"TROT-41-4ENTAT. OTTA 5-01 TI) IAJAc.:--TF M-A-ti FT77 IN. T) F PARTMFNT TOTAT, A`30 . OR OPWA ADMTNISTRATTON 9AOOn1. ITS TFI-E/PAGF, TNC. PAGER IT S E 4A,27 960004 'RONALD 1) CATES PETATNER 700.00 9AO124 US POSTMASTFP TTTTLTTY BTLL POSTACiF 1,500.00 9610?3 GARY OPP FLOOR R.FPATRS- 60,00 961060 SAM'S CLUR OFFTCE SUPPLTES 12.38 961076 TREASURER PETTY CASH RETMB PETTY CASH 9,A0 961,07A TREASUPFP PETTY CASH PFTMB PETTY CASH 10.00 DEPARTMENT TOTAL ------------- WATER ------------------------------ 960001 US TELE/PAGF, TNC. PAGER USE 51.40 960950 CTTY OF TULSA 1.0/95 WATER PT.TPCHASE 7411169.4? 960935 YALE UNTFORM RENTAL UNTFORM CI-EAN/PFNT 60.60 961,118 WATER PRODUCTS TNC METER 5;1.T,PPLTEI-; 11.7.89 9610556 GO SYSTEMS FUEL/DTESEI. 10/95 ?84.?3 96107A TREASURER PETTY CASH OPEPATTNG SITPPLTES ?7.45 961093 TNCOG ENGTNFFRTNG SEP.VTCES 247-50 961.107 WATER PRODUCTS TNC METER SET MATERTALS 9!3�n,75 ------------- DEPAPTMENT TOTAL 75,892.61 W A S T E WA T F TT ------------------------------ 96 001 US TELE/PAGE, TNC, PAGER USE ?5.90 960421 ADVANCED CHEMTCAL CTiL,nPTNF 14 ?.?'. 9A09f;5 YALE UNTFORM PENTAI. TTNTFORM CLEAN/PENT 47,?O 960996 EVANS ELECTRTC PHASE MONTTOPS 16471. 9610'74 MAXWELL. OTL COPP OTL/CREAqE/rEAP LUBE 1.80,80 961056 GO SYSTEMS FUEL/DTESEJ, 10/95 191.15 961060 SAMIq Cl-TIR OPERATING, qilppT•TES 81.62 DEPARTMENT TOTAL 1.,074,AO CTTY OF Owasso 0WAS-c0 PTIBLT(7 WOPV�; 4ITT140F,.ITTY 11:079:08 A/P CLATHS REPORT t',PAPVP ?Af-IE PO # VENDnp DES-CRTPTTON AMOUNT ---------- ------------------------- ------------------------- ------------- REFUSE COT,LECTIONR ------------------------------ 960880 BFI C:nmM PFFTJSP 96MI5 YALE TINTFORM RENTAL, HINTFORM CLEAN! PENT 961019 WASTE MANAGEMFNT OF OYI-A TTPPTNr, FEES 10/95 961,056 GO SYSTEMS P!TEL./DTESF.L 1 rll95 DEPARTMENT TOTAL RECYCLE CENTER ------------------=----- - - - - -- 960880 BFT 10/9' COMM REFUSE 9609q5 YALE UNTPORM RENTAL ITNTFnRM rLEAN ' /RENT 96101 RESOURCE R7CYCLTN6 SlipSrRTPTTON 9610119 WASTE MANAGEMENT nF OYLA TT ,PPTNC I PFFS 16/95 961.056 GO SYSTEMS FUEL/DTESEL 10/95 DEPARTMENT TOTAL FUND TOTAL 71 5i -Flfj ------------- 17, as 17 2,104.00 13,80 37,00 4 ,1..013 ------------- 99,917.83 OWASSO PUBLIC WORKS AUTHORITY PAYROLL PAYMENT REPORT PAY PERIOD ENDING 11/11/95 OVERTIME TOTAL DEPARTMENT EXPENSES EXPENSES Wate•�ryy{�y�a 464..(3�2� 41713.44 Refuse 0.00 32783.62 OPWA Capital Improvement 31.68 1,089.12 APPROVE 11/21/95 Chairman Trustee Trustee MEMORANDUM TO: CHAIR AND TRUSTEES OWASSO PUBLIC WORKS AUTHORITY FROM: SHERRY BISHOP FINANCE DIRECTOR SUBJECT: ARBITRAGE REBATE CALCULATION DATE: November 17, 1995 BACKGROUND: In connection with the issuance of the 1988 OPWA Revenue Bonds, the Authority certified that requirements of the Internal Revenue Code of 1986 would be met. The tax code requires that excess interest earned must be rebated to the United States Treasury. Excess interest is the amount earned on investments over the amount earned if such investments were invested at a rate equal to the yield on the bond issue. Failure to comply with these provisions could result in penalties and /or the loss of the tax- exempt status of the bond issue. A calculation of the Aggregate Rebate Amount must be made annually (November 1). Any rebate due the federal government must be reported and paid at least once every five years. Arbitrage rebate is a particularly complex section of the federal tax code, therefore, a very specialized field of accounting. The accounting firm of Deloitte & Touche has prepared the arbitrage computation for the past three years. We have been very satisfied with their work; however, due to changes in the firm's personnel, we decided to seek additional proposals this year. Proposals were requested from Deloitte & Touche and two other firms which were highly recommended for their experience and qualifications. Deloitte & Touche did not submit a proposal. The two firms submitting proposals and their fees for professional services are: Nash & Boelte, CPA $1,400 for one year Larry A. Evans, CPA, Inc. $900 for one year, or $700 for each of four years ARBITRAGE NOV. 17, 1995 PAGE TWO These proposals offer the Authority a substantial savings from previous years. The fee paid last year was $2,000. The year before (1993) included the IRS report for a $2,500 fee. Either of these firms is capable of providing the required accounting services. Based on the lower fee, staff recommends the firm of Larry A. Evans, CPA, Inc. The Evans firm has offered the option of a four -year agreement for a reduced annual fee. The four -year agreement provides a two hundred dollar per year savings as well as the assurance that fees do not increase during that time. The four -year term would extend services through the tenth year of the bond issue and include filing the IRS report in 1998. (IRS reporting is required every five years.) Previously, we paid an increased fee for the IRS report filing. RECOMMENDATION: Staff recommends Authority accept the proposal from Larry A. Evans, CPA, Inc. to provide annual arbitrage rebate computation services for the 1988 Series Revenue Bonds for the period of November 2, 1994 through November 1, 1998 for a fee of $700 per year. ATTACBAMNT: Proposal from Larry A. Evans, CPA, Inc. THE OWASSO PUBLIC WORKS AUTHORITY STATEMENT OF QUALIFICATIONS AND PROPOSAL TO PROVIDE ARBITRAGE REBATE SERVICES October 31, 1995 LARRY A. EVANS, CPA, INC. Larry A. Evans President October 31, 1995 Ms. Sherry Bishop Finance Director City of Owasso P.O. Box 180 Owasso, Oklahoma 74055 Dear Sherry: 2300 Oklahoma Tower 210 Park Avenue Oklahoma City, Oklahoma 73102 Office (405) 235 -0006 Fax (405) 235 -0008 We appreciate the opportunity to present our qualifications and proposal to serve The Owasso Public Works Authority (the "Authority") as Arbitrage Rebate Consultant for the $6,100,000 Public Improvement Revenue Bonds, Series 1988 (the "Bonds ") . According to information available, the Bonds were issued on or about November 22, 1988. The first fifth year calculation on the Bonds has been made. You are requesting our proposal on the annual calculation required by the Bond documents. We are pleased to propose for the preparation of the necessary arbitrage rebate calculations. The decision of selecting a consulting firm is not an easy one. However, the more positive reasons for selecting a consultant, the easier the decision becomes. We have identified what we believe are five excellent reasons why the Authority should select Larry A. Evans, CPA, Inc. ( "Evans"). These reasons support our belief that by selecting Evans, the Authority will receive special bond issuance tax ' law and regulation analysis, current and aggregate rebate calculations and required compliance reporting of the highest quality and responsiveness; resulting in meaningful benefits to the Authority. The reasons are: 1. Arbitrage rebate and bond financing industry experience. 2. Dedication and involvement in supporting a client's business dealings. 3. Practical suggestions for improvement of processes and procedures used by a client. 4. Proper planning, organization and administration in the conduct of engagements. 5. Price competitive services. P0 Ms. Sherry Bishop Page Two Our understanding of the scope of services you have requested is detailed in the body of this proposal, but the main items are understood to be: * Preparation of arbitrage rebate calculation for the period November 2, 1994 through November 1, 1995 for the following: 1. $6,100,000 Owasso Public Works Authority Public Improvement Revenue Bonds, Series 1988, dated November 1, 1988. * We have also provided an optional scope of service and pricing structure for consideration by the Authority. ' The balance of this proposal covers in more detail, the reasons for selecting Evans, a detailed understanding of the Scope of Services, our service approach and pricing. An Executive Summary is included as the first part of the detailed proposal. We have performed services identical to those requested for many other tax exempt organizations with great success. We look forward to establishing a similar long -term mutually beneficial relationship with the Authority. We would welcome the opportunity to discuss this proposal with you at your convenience. Please contact Larry A. Evans at (405) 235 -0006 if you have any questions or wish to arrange a meeting to discuss our proposal. Sincerely, L Evans TABLE OF CONTENTS Page ' Executive Summary Understanding of Scope of Service Reasons for Using Evans 2 Directly Related Experience and Reliability 4 Service Approach 5 Project Pricing 7 IEXECUTIVE SUMMARY A. Scope of Services Requested: 1. Arbitrage Rebate Calculations determining the amount of excess earnings for the period November 2, 1994 through November 1, 1995, to be rebated to the U. S. Treasury for the issues listed below: Dated $6,100,000 Owasso Public Works Authority Public Improvement Revenue Bonds, Series 1988 November 1, 1988 B. Experience: The personnel assigned have extensive experience in preparing arbitrage rebate calculations' and bond refundings. References for our work product include: Arbitrage Contact Comanche County Hospital Authority Hope Wade Oklahoma County Home Finance Authority Elaine Patterson Comanche County Home Finance Authority Elaine Patterson Oklahoma Health Systems (South Community Hospital) Jerry Thorne Moore Public Schools Various Issues From 1990 John Fodge Putnam City Schools 1988 Building and Transportation Equipment Bonds Don Heimbach Oklahoma Development Finance Authority, First Mortgage, IRB, Series 1992 (Bake Rite Foods, Inc. Project) Steve Scott • Oklahoma County Industrial Authority Hospital Revenue Refunding Bonds, Series 1988A and 1988B (South Community Hospital Project) Related References • Fagin, Brown, Bush, Finney & Kiser • Don Kiser • Allan Brooks • Gary Bush Additional references can be provided. C. Fees: Professional services - Fees for preparation of the requested arbitrage rebate calculations Option 1: Calculation for period November 2, 1994 through November 1, 1995 Option 2: Calculation for period November 2, 1994 through November 1, 1998 including filing of IRS Form 8038 -T (4 Years) ii Shuller Rea 900.00 $700 \EACH YEAR UNDERSTANDING OF SCOPE OF SERVICES Evans will be responsible for preparation of the arbitrage rebate calculation for the Owasso Public Works Authority: • $6,100,000 Public Improvement Revenue Bonds, Series 1988 for the period from November 2, 1994 through November 1, 1995. • As an additional option to the Authority, Evans has provided a reduced fee opportunity for contracting for additional calculation years. Evans will formulate a customized tracking system for assuring that timely compliance reporting is maintained for the Internal Revenue Service Form 8038 -T. Evans will consult with the Authority on any changes in the tax law and applicable regulations, relative to arbitrage rebate, as they occur, to enhance the ability of the Authority to maximize the benefit potential of the invested proceeds and interest earnings. REASONS FOR USING EVANS BENEFITS There are significant benefits in creating an arbitrage consulting relationship with Evans: Knowledgeable professional personnel - Evans has extensive experience in dealing with arbitrage rebate and related compliance and technical issues, in particular, arbitrage calculations for recipients of Authority loans. People you can work with - Evans has excellent people skills. We believe an attitude of mutual respect will develop that will be beneficial to the Authority and Evans. Commitment to quality service - Evans is committed to deliver quality and timely service. PERSONAL ATTENTION Evans will work hard to establish a record of responding immediately to the Authority. Evans represents: * An understanding of the Authority arbitrage rebate requirements; * A proven record for providing service; ow * Personnel who have demonstrated the ability to effectively I work with the Authority personnel. INDUSTRY KNOWLEDGE I As indicated in the attached resume, Evans has significant experience. In addition to serving as engagement partner for arbitrage and , refunding projects of varying sizes, collective experience includes: * Serving five years as an executive officer with a major ' bank specializing in Trust matters, including Corporate Trust functions. * Over 25 years of accounting experience, specializing in tax consulting. * Attending and writing training materials for and teaching industry training programs. 2 LARRY A. EVANS ENGAGEMENT PARTNER Larry A. Evans will be responsible for planning and coordinating all arbitrage services provided. Larry has over 25 years of experience, including five years as an executive officer in a major bank with special emphasis on retail and trust operations. r Larry has personally completed arbitrage rebate calculations and verification of mathematical computations connected with bond refundings. In Larry's capacity as Executive Vice President and Senior Trust Officer of the former First National Bank and Trust Company of Oklahoma City, Larry gained experience in Corporate Trust functions and was responsible for overall supervision of trust services provided to the issuers of bonds. Larry is a member of the American Institute of Certified Public ' Accountants, the Oklahoma Society of Certified Public Accountants and the Government Finance Officers Association. He holds a B. S. degree in Accounting and Business Administration from Southwestern Oklahoma ' State University. Larry is also an alumnus of Leadership Oklahoma and Leadership Oklahoma City. DIRECTLY RELATED EXPERIENCE AND RELIABILITY Evans is one of the few accounting firms that has committed the resources necessary to perform arbitrage rebate services. Expertise in dealing with the Internal Revenue Service and the Code has been combined with the programming skills of computer specialists and consultants in Washington D.C. and California through the use of a comprehensive software program to perform the arbitrage rebate calculations. The depth of our experience in the arbitrage area means that Evans is able to deal with the unique aspects of your engagement quickly and efficiently. Specific references for work in the arbitrage area are: Arbitrage • Comanche County Hospital Authority • Oklahoma County Home Finance Authority • Comanche County Home Finance Authority • Oklahoma Health Systems (South Community Hospital) • Moore Public Schools Various Issues From 1990 Contact Hope Wade Elaine Patterson Elaine Patterson Jerry Thorne John Fodge • Putnam City Schools 1988 Building and Transportation Equipment Bonds Don Heimbach • Oklahoma Development Finance Authority, First Mortgage, IRB, Series 1992 (Bake Rite Foods, Inc. Project) • Oklahoma County Industrial Authority Hospital Revenue Refunding Bonds, Series 1988A and 1988B (South Community Hospital Project) Steve Scott Shuller Rea SERVICE APPROACH Evans has designed the following procedures and anticipated time lines for approaching the services requested: 1. Within one week after being requested to serve as arbitrage Rebate Consultant, Evans will consult with designated Authority personnel or the Trustee, Liberty Bank & Trust of Tulsa, to start the process of gathering information for the calculation. 2. The following is an example of data that would be required to be assembled and for certain items the anticipated action step to be taken in preparing an arbitrage rebate calculation. A. Obtain a copy of the following documents: * Official Statement or Offering Circular * Trust Indenture * Monthly account and expenditure statements * Any other investment statements * Original Form 8038 (if any) * Credit enhancement agreement (if any) * Remarketing agreement (if any) * Letter of credit agreement (if any) ' * Arbitrage and non - arbitrage certificate B. Calculate and record the bond yield (if applicable) ' * Review Official Statement or Offering Circular * Review Trust Indenture * Review any credit enhancement agreement * Reconcile information on Form 8038 * Calculate bond yield C. Calculate the yield of actual earnings, the yield as if earnings were realized at the bond yield and the resulting rebate amount (if applicable): * Review investment in each fund * Reconcile deposits into various funds to gross proceeds * Reconcile receipts and disbursements * Calculate rebate liability in accord with Section 143 and 148(f) of the Internal Revenue Code of 1986 * Prepare IRS Form 8038 -T (if appropriate) D. Make an analysis of the earnings on investment and purpose expenditures to determine compliance with the , spend -down requirements (if applicable): • Review investment earnings for each fund • Reconcile deposits and receipts and disbursements • Calculate required payments and reconcile to actual * Calculate amount to be rebated if the spend -down requirements have not been met E. Deliver a written report: * Provide written report on amount to be rebated * Provide calculation which supports the rebate amount * Provide letter on compliance with spend -down requirements F. Maintain cumulative records: * Establish "tickler" system for calculating rebate * Establish schedule for making rebate payments to U. S. Treasury * Establish record retention system for required documents #1 PROJECT PRICING Our fee has been structured based upon an estimate of the professional time required for specific job tasks to be performed, plus actual out -of- pocket expenditures anticipated. Based on the scope of service and workplan identified herein, the following was developed: FEES: Professional services - Fees for preparation of the requested arbitrage rebate calculations Option 1: Calculation for period November 2, 1994 through November 1, 1995 ® Option 2: Calculation for period November 2, 1994 through November 1, 1998 including filing of IRS Form 8038 -T (4 Years) 5900.00 $700 \EACH YEAR An invoice for fees will be presented to the Authority upon the completion of the arbitrage calculation and report with payment for such service to be received not later than 10 days from the invoice date. If additional work is requested, we will discuss our fees for the requested work and obtain approval prior to starting any new projects.