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Umbaugh Letter of Engagement/CT/ Continuing DisclosureG H. J. Umbaugh & Associates Certified Public Accountants, LLP 8365 Keystone Crossing Suite 300 Indianapolis, IN 46240 -2687 Phone: 317- 465 -1500 Fax: 317 - 465 -1550 www.umbaugh.com --- - -Ms.- Diana - Cordray, - Clerk- Treasurer City of Carmel One Civic Square City Hall Carmel, IN 46032 February 27, 2015 Re: Continuing Disclosure Engagement Letter Dear Diana: Enclosed is an engagement letter for services relating to continuing disclosure for your review and consideration. This is very similar to past engagement letters, but clarifies the scope of our services and specifically identifies all bond issues that are to be included in the filing. Our hope is that this consolidation into one agreement will limit the possibility of miscommunication. We likely already have a copy of the CDUA and Final Official Statement for each issue listed in the engagement letter, however, we may be requesting additional information, if needed. We would ask that one executed copy be returned to us if it meets with your approval. This engagement letter would replace any prior- engagement letters related to continuing disclosure services. If you have any questions or need any additional information, please do not hesitate to contact me. Very truly yours, UMBAUGH ren M. Matthes Enclosures G H. J. Umbaugh & Associates Certified Public Accountants, LLP 8365 Keystone Crossing Suite 300 Indianapolis, IN 46240 -2687 Phone: 317 - 465 -1500 Fax: 317- 465 -1550 www.umbaugh.com Ms. Diana Cordray, Clerk- Treasurer City of Carmel One Civic Square City Hall Cannel, IN 46032 Re: Continuing Disclosure Services Dear Diana: February 27, 2015 There are a number of annual reporting requirements in connection with the City's outstanding bonds. In connection with these requirements, H.J. Umbaugh & Associates, Certified Public Accountants, LLP (the "Firm ") will provide to the City of Carmel (the "Client ") those services more fully set forth in Exhibit A hereto (the "Services "). Fees and Costs Fees charged for work performed are generally based on hourly rates, as set forth in Exhibit B, for the time expended, a fixed amount or other arrangement as mutually agreed upon as more appropriate for a particular matter. Hourly rates for work performed by our professionals vary by individual and reflect the complexity of the engagement. In addition to fees, we also charge for various ancillary services, for which you will be invoiced. Such charges may include long distance telephone charges, photocopying, facsimile transmission, computer research, mileage, travel expenses and other similar charges specifically applicable to the engagement. Disclosure of Conflicts of Interest with Various Forms of Compensation The Municipal Securities Rulemaking Board (MSRB) is expected to require us, as your municipal advisor, to provide written disclosure to you about the actual or potential conflicts of interest presented by various forms of compensation. Exhibit C sets forth the potential conflicts of interest associated with various forms of compensation. By signing this letter of engagement, the signee acknowledges that he /she has received Exhibit C and that he /she has been given the opportunity to raise questions and discuss the matters contained within the exhibit with the municipal advisor. Billing Procedures Normally, you will receive a monthly statement showing fees and costs incurred in the prior month. Occasionally, we may bill on a less frequent basis if the time involved in the prior month was minimal or if arrangements are made for the payment of fees from bond proceeds. The account balance is due and payable on receipt of the statement and we reserve the right to charge 1% interest per month for outstanding unpaid balances over thirty (30) days from the date of billing. Once our representation has been concluded or terminated, a final billing will be sent to you. If requested to provide an estimate of our fees for a given matter, we will endeavor in good faith to provide our best estimate, but unless there is a mutual agreement to a fixed fee, the actual fees incurred on any project may be less than or exceed the estimate. Any questions or errors in any fee statement should be brought to our attention in writing within sixty (60) days of the billing date. Ms. Diana Cordray City of Carmel Re: Continuing Disclosure Services February 27, 2015 Page 2 Termination Both the Client and the Firm have the right to terminate the engagement at any time after reasonable advance written notice. On termination, all fees and charges incurred prior to termination shall be paid promptly. Accountants' Opinion In performing our engagement, we will be relying on the accuracy and reliability of information provided by Client personnel. We will not audit, review, or examine the information. Please also note that our engagement cannot be relied on to disclose errors, fraud, or other illegal acts that may exist. However, we will inform you of any material errors and any evidence or information that comes to our attention during the performance of our procedures that fraud may have occurred. In addition, we will report to you any evidence or information that comes to our attention during the performance of our procedures regarding illegal acts that may have occurred, unless they are clearly inconsequential. We have no responsibility to identify and communicate significant deficiencies or material weaknesses in your internal control as part of this engagement. The responsibility for auditing the records of the Client rests with the Indiana State Board of Accounts and the work performed by the Firm shall not include an audit or review of the records or the expression of an opinion on financial data. Client Responsibilities It is understood that the Firm will serve in an advisory capacity with the Client. The Client is responsible for management decisions and functions, and for designating an individual with suitable skill, knowledge or experience to oversee the services we provide. The Client is responsible for evaluating adequacy and results of the services performed and accepting responsibility for such services. The Client is responsible for establishing and maintaining internal controls, including monitoring ongoing activities. Additional Services Exhibit A sets forth the scope of the Services to be provided by the Firm. From time to time, additional services may be requested by the Client beyond the scope of Exhibit A. The Firm may provide these additional services and be paid at the Finn's customary fees and costs for such services. In the alternative, the Firm and the Client may complete a revised and supplemented Exhibit A to set forth the additional services (including revised fees and costs, as needed) to be provided. In either event, the terms and conditions of this letter shall remain in effect. E- Verify Program The Firm participates in the E- Verify program. For the purpose of this paragraph, the E- Verify program means the electronic verification of the work authorization program of the Illegal Immigration Reform and Immigration Responsibility Act of 1996 (P.L. 104 -208), Division C, Title IV, s.401(a), as amended, operated by the United States Department of Homeland Security or a successor work authorization program designated by the United States Department of Homeland Security or other federal agency authorized to verify the work authorization status of newly hired employees under the Immigration Reform and Control Act of 1986 (P.L. 99 -603). The Firm does not employ any "unauthorized aliens" as that term is defined in 8 U.S.C. 1324a(h)(3). Ms. Diana Cordray City of Carmel Re: Continuing Disclosure Services February 27, 2015 Page 3 Investments The Firm certifies that pursuant to Indiana Code 5 -22 -16.5 et seq. the Fill i is not now engaged in investment activities in Iran. The Firm understands that providing a false certification could result in the fines, penalties, and civil action listed in I.C. 5 -22- 16.5 -14. Munici • al Advisor Re ' istration The Firm is a Municipal Advisor registered with the Securities and Exchange Commission and the Municipal Securities Rulemaking Board. As such, the Firm is providing certain specific municipal advisory services to the Client. The Firm is neither a placement agent to the Client nor a broker /dealer. The offer and sale of any Bonds shall be made by the Client, in the sole discretion of the Client, and under its control and supervision. The Client agrees that the Firm does not undertake to sell or attempt to sell the Bonds, and will take no part in the sale thereof. Other Financial Industry Activities and Affiliations Umbaugh Cash Advisory Services, LLC ( "UCAS ") is a wholly -owned subsidiary of the Firm. UCAS is registered as an investment adviser with the Securities and Exchange Commission under the federal Investment Advisers Act. UCAS provides non- discretionary investment advice with the purpose of helping clients create and maintain a disciplined approach to investing their funds prudently and effectively. UCAS may provide advisory services to the clients of the Firm. UCAS has no other activities or arrangements that are material to its advisory business or its clients with a related person who is a broker- dealer, an investment company, other investment adviser or financial planner, bank, law firm or other financial entity. If the foregoing accurately represents the basis upon which we may provide Services to the Client, we ask that you execute this letter, in the space provided below setting forth your agreement. Execution of this letter can be performed in counterparts each of which will be deemed an original and all of which together will constitute the same document. If you have any questions, please let us know. Very truly yours, H.J. Umbaugh & Associates Certified Public Accountants, LLP Loren M Ma thes, Principal The undersigned hereby acknowledges and agrees to the foregoing letter of engagement. Date: I!VLL4 /5 City of Carmel By: EXHIBIT A Services Provided Scope of Services The Firm will assist the Client with the fulfillment of their reporting obligations as contained in the Continuing Disclosure Undertaking Agreements ( "CDUA ") for the bonds listed in Exhibit A -1 (the "Bonds "). I. Assistance with Continuing Disclosure A. The Firm will assist in identifying the Client's reporting obligations as contained in each CDUA. i. The Client will provide a copy of the CDUA and a copy of the Final Official Statement for each bond issue listed in Exhibit A -1. ii. The Firm will identify relevant information within each CDUA and Final Official Statement and the operating data contained within the Final Official Statement and identify the reporting requirements contained therein. iii. The Firm will assist the Client with the compilation of unaudited financial infomation including unaudited compiled financial statements, if needed, and operating data as may be required under the CDUA. B. On behalf of the Client, the Finn will provide to the Municipal Securities Rulemaking Board ( "MSRB ") through its Electronic Municipal Market Access System ( "EMMA "), when and if available, the following information, as may be required under the CDUA. Audited financial statements or Examination Reports of the Client as prepared and examined by the State Board of Accounts beginning with the 12 month period ended December 31, 2014, together with the opinion of such accountants and all notes thereto. The Client shall be responsible for providing the Firm with a copy of the Audit or Examination Report immediately upon receipt thereof. (Please note that each CDUA will contain specific filing requirements). ii. Unaudited annual financial information of the Client beginning with the 12 months ended December 31, 2014, consisting of: a. unaudited financial statements of the Client b. unaudited operating data The Firm will assist the Client with providing annual operating data as set forth in the CDUA. The Client shall be responsible for providing the Firm with a copy of its unaudited financial information as soon as it is available. EXHIBIT A Services Provided (cont'd) iii. Notice of the following events, if material, with respect to the Bonds (which determination of materiality shall be made by the Client): a. non - payment related defaults b. modifications to rights of bondholders c. bond calls d. release, substitution or sale of property securing repayment of the bonds e. the consummation of a merger, consolidation, or acquisition, or certain asset sales, involving the obligated person, or entry into or termination of a definitive agreement relating to the foregoing f. appointment of a successor or additional trustee or the change of name of a trustee iv. Notice of the following events, regardless of materiality: a. principal and interest payment delinquencies b. unscheduled draws on debt service reserves reflecting financial difficulties c. unscheduled draws on credit enhancements reflecting financial difficulties d. substitution of credit or liquidity providers, or their failure to perform e. defeasances f. rating changes g. adverse tax opinions or other material events affecting the tax - exempt status of the bonds; the issuance by the IRS of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 - TEB) or other material events, notices or determinations with respect to the tax status of the securities h. tender offers i. bankruptcy, insolvency, receivership or similar event of the obligated person The Firm will assist the Client with the monitoring of any reportable events by conducting a brief serni- annual survey; however, the Client shall be responsible for reporting the occurrence of any of these events to the Firm as soon as possible. Please note that the events listed above must be reported through EMMA within ten business days of the occurrence. II. Assistance with Rating Surveillance The Firm will assist the Client in providing information that may be requested by the bond rating agencies in conjunction with their annual surveillance reviews, if needed. EXHIBIT A -1 The Firm has been provided a detailed list of outstanding bond(s) below which are subject to continuing disclosure requirements for which the Firm will provide the services described in Exhibit A: City of Carmel Redevelopment District $16,300,000 Certificates of Participation, Series 2010C $6,535,000 Redevelopment District Bonds of 2013 (Illinois Street Project) $8,785,000 Taxable County Option Income Tax Revenue Refunding Bonds, Series 2006 City of Carmel Redevelopment Authority $27,798,227.15 Lease Rental Revenue Bonds of 2005 (Non Refunded Portion) $25,675,000 County Option Income Tax Lease Rental Revenue Bonds of 2010 $25,190,000 Lease Rental Revenue Refunding Bonds of 2011 $115,900,000 Lease Rental Revenue Multipurpose Bonds, Series 2012A $69,245,000 Lease Rental Revenue Multipurpose Bonds, Series 2012B (Taxable) $9,380,000 County Option Income Tax Lease Rental Revenue Refunding Bonds, Series 2014A $46,795,000 County Option Income Tax Lease Rental Revenue Refunding Bonds, Series 2014B $55,685,000 Lease Rental Revenue Refunding Bonds, Series 2014 $72,000,000 County Option Income Tax Lease Rental Revenue Bonds, Series 2006 (Non - Refunded Portion) Date: ��`[ j� ACC >1 City of Carmel o Exhibit A -1 and the engagement letter must be signed and returned to the Firm as soon as possible. EXHIBIT B Fees The Film's fees for services set forth in Exhibit A shall be billed at the Firm's standard billing rates based upon the actual time and expenses incurred. Standard Hourly Rates by Job Classification 01/01/2015 Senior Partners / Principals $300.00 to $550.00 Partners / Principals $220.00 to $400.00 Managers $175.00 to $325.00 Accountants /Financial Analysts $95.00 to $250.00 Paraprofessional Staff $85.00 to $175.00 Support Personnel $75.00 to $120.00 o Billing rates are subject to change periodically due to changing requirements and economic conditions. Actual fees will be based upon experience of the staff assigned and the complexity of the engagement. The above fees shall include all expenses incurred by the Firm with the exception of expenses incurred for travel, if any, outside the State of Indiana. No such expenses will be incurred without the prior authorization of the Client. The fees do not include the charges of other entities such as rating agencies, bond and official statement printers, couriers, newspapers, bond insurance companies, bond counsel and local counsel, and electronic bidding services, including Parity®. Coordination of the printing and distribution of Official Statements or any other Offering Document are to be reimbursed by the Client based upon the time and expense for such services. EXHIBIT C Disclosure of Conflicts of Interest with Various Forms of Compensation The forms of compensation for municipal advisors vary according to the nature of the engagement and requirements of the client, among other factors. Various forms of compensation present actual or potential conflicts of interest because they may create an incentive for an advisor to recommend one course of action over another if it is more beneficial to the advisor to do so. This exhibit discusses various forms of compensation and the timing of payments to the advisors. Fixed fee. Under a fixed fee form of compensation, the municipal advisor is paid a fixed amount established at the outset of the transaction. The amount is usually based upon an analysis by the client and the advisor of, among other things, the expected duration and complexity of the transaction and the agreed -upon scope of work that the advisor will perform. This form of compensation presents a potential conflict of interest because, if the transaction requires more work than originally contemplated, the advisor may suffer a loss. Thus, the advisor may recommend less time - consuming alternatives, or fail to do a thorough analysis of alternatives. There may be additional conflicts of interest if the municipal advisor's fee is contingent upon the successful completion of a financing, as described below. Hourly fee. Under an hourly fee form of compensation, the municipal advisor is paid an amount equal to the number of hours worked by the advisor times an agreed -upon hourly billing rate. This form of compensation presents a potential conflict of interest if the client and the advisor do not agree on a reasonable maximum amount at the outset of the engagement, because the advisor does not have a financial incentive to recommend alternatives that would result in fewer hours worked. In some cases, an hourly fee may be applied against a retainer (e.g., a retainer payable monthly), in which case it is payable whether or not a financing closes. Alternatively, it may be contingent upon the successful completion of a financing, in which case there may be additional conflicts of interest, as described below. Fee contingent upon the completion of a financing or other transaction. Under a contingent fee form of compensation, payment of an advisor's fee is dependent upon the successful completion of a financing or other transaction. This form of compensation presents a conflict because the advisor may have an incentive to recommend unnecessary financings or financings that are disadvantageous to the client. For example, when facts or circumstances arise that could cause the financing or other transaction to be delayed or fail to close, an advisor may have an incentive to discourage a full consideration of such facts and circumstances, or to discourage consideration of alternatives that may result in the cancellation of the financing or other transaction. Fee paid under a retainer agreement. Under a retainer agreement, fees are paid to a municipal advisor periodically (e.g., monthly) and are not contingent upon the completion of a financing or other transaction. Fees paid under a retainer agreement may be calculated on a fixed fee basis (e.g., a fixed fee per month regardless of the number of hours worked) or an hourly basis (e.g., a minimum monthly payment, with additional amounts payable if a certain number of hours worked is exceeded). A retainer agreement does not present the conflicts associated with a contingent fee arrangement (described above). Fee based upon principal or notional amount and term of transaction. Under this form of compensation, the municipal advisor's fee is based upon a percentage of the principal amount of an issue of securities (e.g., bonds) or, in the case of a derivative, the present value of or notional amount and term of the derivative. This form of compensation presents a conflict of interest because the advisor may have an incentive to advise the client to increase the size of the securities issue or modify the derivative for the purpose of increasing the advisor's compensation.