SUBJECT:
Action regarding arbitrage rebate compliance services agreement
BACKGROUND/DISCUSSION:
Arbitrage is the ability to obtain tax-exempt bond proceeds and invest the funds in higher yielding taxable securities, resulting in a profit. The arbitrage laws require the issuer to pay the federal government the difference if more interest is earned than the interest being paid on the bonds. As with most tax laws, there are many variables affecting how the calculation is made and should be calculated by an expert in the field.
FINANCIAL IMPACT:
The estimated cost for the remaining calculations this year is $3,500 and is budget in the Debt Service Fund.
RECOMMENDATION:
Staff recommends approval of the agreement with Hilltop Securities Asset Management, LLC for arbitrage rebate compliance. |