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Approval of Renewal of a New Five-Year Agreement with Hilltop Securities Asset Management, LLC for Arbitrage Rebate Compliance Service; and Authorization for the City Manager, or Her Designee, to Execute the Agreement.
request
ADMINISTRATIVE COMMENTS:
Hilltop Securities has been engaged by the City to perform arbitrage rebate services related to municipal bond issuances since 1991. The most recent Arbitrage Rebate Compliance Service Agreement was for a five-year period ending FY2025. Arbitrage liability and rebate computation is a highly specialized and complex procedure and requires a thorough understanding and continued monitoring of changes of the Internal Revenue Service Tax Code as it relates to arbitrage. The proposed agreement includes an increase in the base fee from the previous five-year contract. The base fee for each debt obligation will increase from $1,400 to $1,600. The fee is only applicable when a computation is performed. A 10% discount is available when all required documentation is submitted in electronic format. For services involving the preparation of an IRS refund request, a flat fee of $3,000 will apply when additional work is necessary.
RECOMMENDATION:
That the City Council approve the arbitrage rebate compliance service agreement as set forth in the caption above.