HomeMy WebLinkAboutProfessional Services Agreement - H.J. Umbaugh & Associates - Financial Assurance Test Required by IDEM1316, COUNTY -CH Y BuiLDING
227 W. Jf,17FERSON BOULEVARD
SOUTI j BEND. INDIANA 46601-1830
CITY OF Sou'-rFi BEND PETE BuTTIGIEG, MAY
BD OF PUBLIC WOiRK I
March 27, 2018
Scott Miller
H.J. Umbaugh & Associates
8365 Keystone Crossing, Suite 300
Indianapolis, IN 46240-2687
RE: Professional Services Agreement
Dear Mr, Miller:
P110W. 574/235-9251
FAX 574/235-9171
The Board of Public Works, at its meeting held on March 27, 2018, approved the above
referenced agreement regarding an annual financial assurance test required by IDEM in the
amount of $5,250.
Enclosed please find a copy of the agreement for your records,
If you have any further questions regarding this matter', please call this office at (574) 235-
9251.
Sincerely,
12
Linda M. Martin, Clerk
Enclosure
c: Jen Hockenhull, Administration and Finance
GAILY A. Gii.o,r SUZANNA M, FRn,zBERo ELIZABE'rH A. MARADIK JAMEs A. MUELLUTHERESE J. DORAIJ
UMBAUGH
Pw - -, I 4g � " M,4 In I,I a III amuwumw9
H. J. Umbal.lgh & Associates
Certified Public Accountants, LLP
8365 Keystwie Crossing
Suite 300
IndianapoVs, M 46240-2687
Phone: 317-465-1500
Fax: 317-465-155Q March 13, 2018
www.umbaugh.corn REVISED
Ms. Jennifer Hockenhull, Controller
City of South Bend
227 West Jefferson Boulevard
South Bend, IN 46601
Re: South Bend (Indiana) Municipal Landfill — Proposed Financial Advisory and Accounting Services
Financial Assurance Test
Dear Ms. Hockenhull:
Thank you for requesting that H.J. Umbaugh & Associates, Certified Public Accountants, LLP (the "Firm")
provide to the City of South Bend, Indiana (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
0
expended, a fixed amount or other arrangement as mutually agreed upon as more appropriate for aparticular
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 lie/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. 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.
Ms. Jennifer Hockenhull, Controller
City of South Bend
Re: South Bend (Indiana) Municipal Landfill — Proposed Financial Advisory and Accounting Services
Financial Assurance Test
March 13, 2018 (REVISED)
Page 2
Accountants' Ouinion
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 and Exhibit D. 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 perfoirn 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 out -
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-VerifyProgram
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 Imn-ugration 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. Jennifer HockenhuIl, Controller
City of South Bend
Re: South Bend (Indiana) Municipal Landfill — Proposed Financial Advisory and Accounting Services
Financial Assurance Test
March 13, 2018 (REVISED)
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.
Mediation Provision
The Client and the Firm agree that if any dispute (other than our efforts to collect any outstanding invoice(s))
arises out of or relates to this engagement, or any prior engagement we may have performed for you, and
if the dispute cannot be settled through informal negotiation, the parties agree first to try in good faith to
settle the dispute by mediation administered by the American Arbitration Association under its Commercial
Mediation Procedures (or such other administrator or rules as the parties may mutually agree) before
resorting to litigation. The parties agree to engage in the mediation process in good faith once a written
request to mediate has been given by any party to the engagement. Any mediation initiated as a result of
this engagement shall take place in Indianapolis, Indiana, or such other location as the parties may mutually
agree. If the parties are unable to mutually agree on the selection of a mediator, the mediator shall be
determined in accordance with the American Arbitration Association's Commercial Mediation Procedures.
The results of any such mediation shall be binding only upon a written settlement agreement executed by
each party to be bound. Each party shall bear its own costs and fees, including attorneys' fees and expenses,
in connection with the mediation. The costs of the mediation, including without limitation the mediator's
fees and expenses, shall be shared equally by the participating parties. Any ensuing litigation shall be
initiated and maintained exclusively before any state or federal court having appropriate subject matter
jurisdiction located in St. Joseph County, Indiana.
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.
Ms. Jennifer Hockenhull, Controller
City of South Bend
Re: South Bend (Indiana) Municipal Landfill — Proposed Financial Advisory and Accounting Services
Financial Assurance Test
March 13,2018 (REVISED)
Page 4
If you have any questions, please let us know. We appreciate this opportunity to be of service to you and
the City of South Bend, Indiana.
Very truly yours,
HJ. Urnbaugh & Associates
Certified Pu lic Accountants, LLP
By:
Scott A. Miller, Partner
The undersigned hereby acknowledges and agrees to the foregoing letter of engagement.
V
Date:
City of South Bend, Indiana
m
Exhibit A
Services Provided
Scope of Services
Article 1. Preliminary Financial Planning (Preparation Accounting and Consulting Services
A. Gather historical financial information for the City of South Bend for the prior year,
including landfill operations.
B. Obtain copies of State Board of Accounts audits and available bond rating reports for the
City and landfill.
C. Obtain copies of ordinances and/or resolutions dealing with the landfill operations in
regard to rates and charges for revenue generation, including but not limited to tipping
charges and copies of any contracts with private haulers, as well as other miscellaneous
revenue sources.
D. Obtain budgets for the City landfill for 2018 and beyond for operation expenses and
capital improvements.
E. Discuss with the landfill operator and engineer the useful life of landfill cells currently
utilized and the timing of closure activity.
F. Obtain information from City Representatives, landfill operator, and/or consulting
engineers regarding estimated capital and operating costs for closure and post -closure
activities.
G. Gather other relevant information required to address the Financial Assurance Test
requirements as outlined in the Administrative Code.
Article 11. Financial Plan and Financial Assurance Test Development (Preparation Accountin
and Consulting Services
A. Utilizing the historical and prospective financial and operational data gathered from
representatives of the City of South Bend, develop pro forma cash flow analysis for the
landfill that would include the anticipated closure and post -closure activities.
B. Summarize the financial information from the City of South Bend and other resources to
make the financial calculations and ratios as required by the Administrative Code to meet
the Financial Assurance Test benchmarks.
C. Develop a report for submission to the City of South Bend and its representatives for
review and comment in regard to the pro forma operational data and the Financial
Assurance Test requirements.
D. Meet with City of South Bend representatives to review report and answer any questions.
Exhibit A
Services Provided (cont'd)
Article III. Approval of Financial Assurance Test and Submission to IDEM (Agreed -Upon
Procedures Accounting Services)
Finalize reports in regard to the operations of the landfill and the Financial Assurance Test
requirements for submission to the City of South Bend to be utilized by the City in
execution of the Financial Assurance Test and submission to Indiana Department of
Environmental Management.
Exhibit B
Fees
The Firm's fees for services set forth in Exhibit A will be Five Thousand Two Hundred Fifty Dollars
($5,250).
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 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 ParityO. Coordination of the printing and
distribution of Official Statements or any other Offering Document are to be rei►nbursed 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 Firm'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 in a fixed amount established
at the outset of the Agreement, The amount is usually based upon an analysis by Client and the Finn
of, among other things, the expected duration and complexity of the transaction and the Scope of
Services to be performed by the Firm. This form of compensation presents a potential conflict of interest
because, if the transaction requires more work than originally contemplated, the Firm may suffer a loss.
Thus, the Firm may recommend less time-consuming alternatives, or fail to do a thorough analysis of
alternatives. 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 Firm 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 Firm 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.
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.
Exhibit C
Disclosure Statement of Municipal Advisor_(cont'd)
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 -I filed with the SEC.
11. _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
htt ://www.sec, ov/c i-bin/browse-ed ar?actionW etcom an &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.
PART D — Rule G-10: Investor and Municipal Advisory Client Education and Protection
MSRB Rule G-10 requires that municipal advisors to notify their clients of the availability of a client
brochure on the MSRB's website that provides information on the processes for filing a client complaint.
Accordingly, the Firm sets out below the required information.
1. The Firm is registered as a Municipal Advisor with the Securities and Exchange Commission (867-
00278) and the Municipal Securities Rulemaking Board (K0171).
11. The website address for the Municipal Securities Rulemaking Board is www.msrb.org.
M. The website for the Municipal Securities Rulemaking Board has a link to a brochure that describes (i)
the protections that may be provided by the Municipal Securities Rulemaking Board rules and (ii)
describes how to file a complaint with an appropriate regulatory authority.
Exhibit D
Applyiniz Agreed -Upon Procedures Accounting_ Services
Our engagement to apply agreed -upon procedures will be conducted in accordance with attestation
standards established by the American Institute of Certified Public Accountants. The sufficiency of the
procedures is solely the responsibility of those parties specified in the report and we will require an
acknowledgment in writing of that responsibility. Consequently, we make no representation regarding
the sufficiency of the procedures either for the purpose for which the agreed -upon procedures report has
been requested or for any other purpose.
Because the agreed -upon procedures do not constitute an examination or review, we will not express an
opinion or conclusion in our report. In addition, we have no obligation to perform any procedures beyond
those listed in the procedures letter.
We will issue a written report upon completion of our engagement that lists the procedures performed
and our findings. Our report will be addressed to the Client and other specified parties and should not be
used by anyone other than these specified parties. Our report will contain a paragraph indicating that had
we performed additional procedures, other matters might have come to our attention that would have been
reported to you,
Date
Name
BOARD OF PUBLIC WORKS
AGENDA ITEM REVIEW REQUEST FORM
03/15/20 18
Jeri Hockenhull
Department Admin & Fitzice
-BPW.Date 03/15/2018 Phone Extension 9822
Required Prior �to Submittal
�e �d to �Board������
Legal Attorney Name Clara McDaniels
Controller Controller review is required for all Contracts $5,000.00 or more and
greater than one year in length per the City Purchasing Policy
ZMEMENV®R
H Agreement
N Contract E] Proposal El Addendurn—
M Professional Services
❑ Resolution
F] Bid Opening
0 Bid Award ❑ Req. to Advertise ❑ T'itle Sheet
E] Quote Opening
F] Quote Award
Change, Order No.
E:1 C/O & PCA No. ❑ PCA
❑ Ease/Encroach.
❑ Traffic Control
Other:
Company or Vendor Name Umbaugh & Associates
New Vendor
Yes ®No 0 If Yes, Approved by Purchasing
MBEANBE Contractor
F-1 MBE F-1 WBE
M'BEMBE Contractor Requested M No El Yes Name of Company
Project Name
Financial Assurance Test-IDEM Requirement
Project Number
Funding Source
General Fund-Admin Fin Budget
Account No.
101-0401-415-31-06
Amount
$5,250.00
Terms of Contract
Due upon completion of contract
Purpose/Description
IDEM requires a financial assurance test on an annual basis for the
closed landfill. Umbaugh is able to perform the required assurances
which meet the needs of [DEM.
Z Required Contractor's Certification Form Attached (Non -
Collusion, Non -Discrimination, Non -Debarment, E-Verjfv, Iran, etc.)
Amount of F-1
El
increase $
Decrease $
Previous Amount
Current Percent of Change
New Amount
Total Percent of Change:
Copy
Original
M
F]
E]
El
Ral
Dispersal After Approval
Jennifer Hockenhull