HomeMy WebLinkAboutUMBAUGH REDEVELOPMENT I
UMBAUGH
H.J.Umbaugh&Associates
Certiftd Public Accountants,LLP
$365 Keystone Grmsmg
sulte 100
Indiaoa"rs,IN 46240,2687
Phone,317-465 1500 June 5,2017
Fa,t.317-461)115tliO
wwwwnbaufeh coo
Jeffersonville Redevelopment Commission
c/o Ms. Heather Metcalf
500 Quartermaster Court, Suite 300
Jeffersonville,IN 47130
Re: Jeffersonville Redevelopment Commission-Proposed Municipal Advisory Services-
Tax Increment Assistance
Dear Ms.Metcalf-
Thank you for requesting that H.J. Umbaugh & Associates, Certified Public Accountants, LLP (the
"Firm")provide to the Jeffersonville Redevelopment Commission(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.
Disclosure of Conflicts of Interest with Various Forms of Compensation
The Municipal Securities Rulemaking Board (MSRB) requires 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 incur-red 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. 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.
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. Unless otherwise agreed to by the Client and the Firm, the scope of services provided in
Exhibit A will terminate 60 days after completion of the services in each Article.
Jeffersonville Redevelopment Commission
c/o Ms. Heather Metcalf
Re: Jeffersonville Redevelopment Commission-Proposed Municipal Advisory Services-
Tax Increment Assistance
June 5,2017
Page 2
Accountants' Opinion
In performing our engagement,we will be relying on the accuracy and reliability of information provided
by Client personnel. The services provided may include financial advisory services, consulting services,
and accounting report services such as compilation, preparation, and agreed upon procedures reports.
Please see Exhibit A. 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 procedures we perform in our engagement will be heavily influenced by the representations that we
receive from Client personnel. Accordingly, false representations could cause material errors to go
undetected. The Client, therefore, agrees to indemnify and hold us harmless for any liability and all
reasonable costs(including legal fees)that we may incur in connection with claims based upon our failure
to detect material errors resulting from false representations made to us by any Client personnel and our
failure to provide an acceptable level of service due to those false representations.
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 Firm'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).
Jeffersonville Redevelopment Commission
c/o Ms. Heather Metcalf
Re: Jeffersonville Redevelopment Commission- Proposed Municipal Advisory Services-
Tax Increment Assistance
June 5,2017
Page 3
Investments
The Firm certifies that pursuant to Indiana Code 5-22-16.5 et seq. the Firm 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.
Municipal Advisor Registration
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. We appreciate this opportunity to be of service to you and
the Redevelopment Commission.
Very truly yours,
H.J. Umbaugh& Associates
Certified Public Accountants, LLP
BY�
Brian C. on, Partner
The undersigned hereby acknowledges and agrees to the foregoing letter of engagement.
Jeffersonville Redevelopment Commission
Date: ka By:
Exhibit A
Services Provided
Scope of Services
Article I below describes services to be performed on an annual basis. Article II includes periodic
services that would only be performed upon request.
Article I, Annual Tax Increment Finance("TIF")Services(Consulting and Financial Advisory
Services
A. Calculate Base Value Adjustments ("Neutralization' for Trending and General
Reassessment
1. Contact the County Auditor's office and, with its cooperation and based on
information provided by the County Auditor and Assessor, assist in performing
or checking calculations with respect to base value adjustments, including
determining base value adjustment factors, appeal and tax rate assumptions,
and captured assessed values in conjunction with annual Trending or General
Reassessments. In performing this work, we rely on the accuracy of the
information provided by the County Auditor and Assessor. We will not audit
or review their information.
2. Travel to the County Auditor's and/or Assessor's offices to perform fieldwork
that may be required. Obtain new tax abatement information and a list of new
developments and assessed values (if available) for the TIF Area(s) to use in
the calculation. Compare resulting calculations to historical captured value, if
necessary.
B. Monitor TIF Revenue
1. For the TIF Area(s), analyze recorded TIF revenue, comparing it to the Firm's
previous estimates, identifying the sources of material differences.
2. Identify major tax delinquencies materially affecting TIF revenue using
information available from the County Auditor's office.
3. Based on input from Commission representatives:
a. Trace known major developments and tax abatement reductions into the
County's property tax records.
b. Investigate, report and make recommendations regarding any material
variances from anticipated assessed valuations and TIF revenue.
4. Update estimated TIF revenue projections, under current law, including the
impact of known new developments, estimated tax abatement reductions,
depreciation tables, if applicable,and anticipated changes in tax rates.
5. Prepare a schedule demonstrating the extent to which estimated TIF revenue is
expected to be sufficient to pay actual debt service or lease rentals on
outstanding bonds and other planned projects for the TIF Area(s), notifying the
Commission of any anticipated shortfalls or significant surplus.
Exhibit A
Services Provided(cont'd)
6. Illustrate annual cash flow for each Allocation Area for a five-year period (or
another period defined by the Commission)that accounts for debt and non-debt
expenditures of the Commission.
7. Provide an annual written Report and additional written materials as
appropriate, reporting findings to the Commission. If requested, present the
Report at a meeting of the Commission. Such Report is limited to the purposes
set forth herein, and may not be used in conjunction with the issuance of
additional debt obligations. TIF revenue estimates in support of the issuance of
debt will be accomplished pursuant to the parameters of separate agreements.
C. Analyze TIF Databases for Missing Parcels and Parcel Changes
1. Interview County officials, staff members and others to locate declaratory
resolutions, base value dates, original maps of the T1F Area(s), together with
any boundary changes that may have occurred subsequent to the creation of the
TIF Area(s).
2. Compare County Auditor's TIF parcel list and maps to determine the extent to
which they reflect changes that have occurred to the TIF boundaries of the
Area and incorporate parcel splits and combinations.
3. Suggest corrections to the TIF database,as needed.
Article II. Periodic Services (Municipal Advisory and Consulting Services) Performed on an
"As Requested"Basis
A. Economic Development Proiect Evaluation and Preliminary Feasibility
1. In connection with a proposed economic development project or prospect (the
"Project"), discuss with Client (or Client representative) the proposed Project;
potential incentives; the use of TIF, tax abatement and other sources of
funding; preliminary financing options and feasibility analyses; timing and
investment information needed for analysis; and other issues and
considerations.
2. Prepare an estimate of real and depreciable personal property assessed value
for the proposed development based on investment information provided by the
Company or its representatives. Prepare schedules of real and depreciable
personal property tax abatement reductions, if applicable.
3. Prepare a preliminary TIF feasibility analysis to estimate the incremental
property tax revenues that might be created by the Project and provide an
estimate of the amount of bonds such revenues might support and potential
incentive value. This preliminary feasibility analysis may consider the impact
on the tax increment stream and bond size with and without tax abatement.
Discuss bond options and security needed to market bonds, if applicable.
4. Prepare a preliminary analysis utilizing both new and existing TIF revenue
taking into account any outstanding obligations payable from the existing TIF,
and provide additional incentive options, if applicable.
Exhibit A
Services Provided(cont'd)
5. Discuss preliminary financing feasibility with Client and Company
representatives and advisors. Attend meetings and participate in conference
calls, as requested.
6. If requested by the Client, prepare additional TIF revenue estimates and
financing feasibility analyses based on different investment assumptions and/or
based on different financing terms, funding options and assumptions.
7. Assist with the establishment or expansion of a TIF Area, including TIF
information for Declaratory Resolution and Economic Development Plan,
preparation and distribution of a tax impact analysis required for overlapping
taxing units, and attendance at public hearing and other municipal and
redevelopment commission meetings, as necessary.
B. Other TIF Services
1. At the request of the Commission, prepare analyses of TIF revenues and
financing options for project planning purposes.
2. Prepare a tax increment replacement (TIR) worksheet for the Commission's
submission to the Department of Local Government Finance and to the County
Auditor's office, if necessary.
3. Attend meetings and/or hearings of the Commission to discuss specific and
proposed projects or other items outlined in this Agreement.
Exhibit B
Fees
For the services set forth in Exhibit A, the Firm's fees will be billed at the Firm's standard billing rates
based upon the actual time and expenses incurred.
Standard Hourly Rates by Job Classification
1/1/2017
Senior Partners $375.00 to $550.00
Partners/Principals $275.00 to $475.00
Managers $190.00 to $325.00
Consultants $130.00 to $250.00
Municipal Bond Disclosure Specialists $120.00 to $195.00
Support Personnel $105.00 to $150.00
• 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 mileage which will be billed on a separate line item. No such expenses with the exception of mileage
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 Statement of Municipal Advisor
PART A—Disclosures of Conflicts of Interest
MSRB Rule G-42 requires that municipal advisors provide to their clients disclosures relating to any
actual or potential material conflicts of interest, including certain categories of potential conflicts of
interest identified in Rule G-42, if applicable. If no such material conflicts of interest are known to exist
based on the exercise of reasonable diligence by the municipal advisor,municipal advisors are required to
provide a written statement to that effect.
Material Conflicts of Interest—The Firm makes the disclosures set forth below with respect to material
conflicts of interest in connection with the Scope of Services under this Agreement, together with
explanations of how the Firm addresses or intends to manage or mitigate each conflict.
General Mitigations—As general mitigations of the Firm's conflicts, with respect to all of the conflicts
disclosed below, the Firm mitigates such conflicts through its adherence to its fiduciary duty to Client,
which includes a duty of loyalty to Client in performing all municipal advisory activities for Client. This
duty of loyalty obligates the Firm to deal honestly and with the utmost good faith with Client and to act in
Client's best interests without regard to the Finn's financial or other interests. The disclosures below
describe, as applicable, any additional mitigations that may be relevant with respect to any specific
conflict disclosed below.
I. Compensation-Based Conflicts. The fees due under this Agreement are based on hourly fees of the
Finn's personnel, with the aggregate amount equaling the number of hours worked by such personnel
times an agreed-upon hourly billing rate. This form of compensation presents a potential conflict of
interest if Client and the Finn do not agree on a reasonable maximum amount at the outset of the
engagement, because the Firm does not have a financial incentive to recommend alternatives that
would result in fewer hours worked. This conflict of interest is mitigated by the general mitigations
described above.
II. Other Municipal Advisor Relationships. The Firm serves a wide variety of other clients that may
from time to time have interests that could have a direct or indirect impact on the interests of Client.
For example, the Finn serves as municipal advisor to other municipal advisory clients and, in such
cases, owes a regulatory duty to such other clients just as it does to Client under this Agreement.
These other clients may, from time to time and depending on the specific circumstances, have
competing interests, such as accessing the new issue market with the most advantageous timing and
with limited competition at the time of the offering. In acting in the interests of its various clients,the
Finn could potentially face a conflict of interest arising from these competing client interests. This
conflict of interest is mitigated by the general mitigations described above.
Exhibit C
Disclosure Statement of Municipal Advisor(cont'd)
PART B—Disclosures of Information Regarding Legal Events and Disciplinary History
MSRB Rule G-42 requires that municipal advisors provide to their clients certain disclosures of legal or
disciplinary events material to its client's evaluation of the municipal advisor or the integrity of the
municipal advisor's management or advisory personnel.
Accordingly, the Firm sets out below required disclosures and related information in connection with
such disclosures.
I. Material Legal or Disciplinary Event. There are no legal or disciplinary events that are material to
Client's evaluation of the Firm or the integrity of the Firm's management or advisory personnel
disclosed,or that should be disclosed, on any Form MA or Form MA-1 filed with the SEC.
IL How to Access Form MA and Form MA-I Filings. The Firm's most recent Form MA and each
most recent Form MA-I filed with the SEC are available on the SEC's EDGAR system at
http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001610268.
III. Most Recent Change in Legal or Disciplinary Event Disclosure. The Firm has not made any
material legal or disciplinary event disclosures on Form MA or any Form MA-I filed with the SEC.
PART C—Future Supplemental Disclosures
As required by MSRB Rule G-42, this Disclosure Statement may be supplemented or amended, from time
to time as needed,to reflect changed circumstances resulting in new conflicts of interest or changes in the
conflicts of interest described above, or to provide updated information with regard to any legal or
disciplinary events of the Firm. The Firm will provide Client with any such supplement or amendment as
it becomes available throughout the term of the Agreement.