DEPARTMENT: Finance
DEPARTMENT HEAD: Troy Elliott
COUNCIL DISTRICTS IMPACTED: City-Wide
SUBJECT:
Arbitrage Rebate Compliance Services Contract for the City of San Antonio
SUMMARY:
This Ordinance authorizes the execution of a contract with The Bank of New York Mellon Trust Company, N.A. to provide Arbitrage Rebate Compliance Services for a period to commence April 1, 2021 and terminate March 31, 2024, with an option to extend the contract for one additional two-year period under the same terms and conditions. Funding for this agreement will be derived from tax-exempt proceeds and the interest earned on the investment of such proceeds. The total estimated value of the contract is $297,000.
BACKGROUND INFORMATION:
The City contracts with qualified firms to provide Arbitrage Rebate Compliance Services in connection with the City's financings. Laws codified in Internal Revenue Service Code Section 148 and regulations promulgated by the United States Treasury mandate that interest income derived from the investment of tax-exempt proceeds in excess of the permitted arbitrage rate must be rebated to the United States Government. Arbitrage rebate compliance requires that computations be performed which are consistent with the complex technical requirements contained in the aforementioned laws and regulations to determine the rebate amount, if any. Any rebate amount due must be reported and paid to the United States Government. The scope of Arbitrage Rebate Compliance Services includes a comprehensive review of the City's outstanding tax-exempt obligations, debt service funds, debt service reserve funds, capital projects funds and other funds, into which tax-exempt proceeds have been deposited. Such services also encompass calculation and verification of the arbitrage rate for each tax-exempt obligation for which an arbitrage rebate computation is required, on-going service with respect to questions that may arise from time to time concerning...
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