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REV: 11-22-23 MI <br />Prior to computation date. <br />2. Verify Bond Yield and Prepare Arbitrage Rebate and Yield Restriction Analysis <br />Update the cumulative arbitrage rebate liability and/or yield reduction payment <br />accrual for each bond. <br />During the computation of arbitrage rebate and yield restriction positions for the <br />bonds, Consultant will: <br />o Verify the bond yield; <br />o Identify gross proceeds, transferred proceeds, replacement proceeds, <br />and all other funds considered part of the financing; <br />o Compute investment earnings, taking into account the proper allocation <br />of commingled funds; <br />o Future value transactions to the computation date, inclusive of the <br />computation date credit; <br />o Test for exceptions to rebate, including spending exceptions and penalty <br />in-lieu requirements; <br />o Analyze unspent construction funds, overfunded reserves, and other <br />events that may be in violation of Section 148 of the tax code; <br />o Analyze opportunities to recapture negative arbitrage or recover <br />overpayments; <br />o Determine the yield reduction payment pursuant to Section 148(f) of the <br />Internal Revenue Code; and <br />o Determine the cumulative arbitrage liability pursuant to Section 148(f) of <br />the Internal Revenue Code. <br />3. Review and Assess Analysis Outcome <br />Multi-tiered review of each prepared report and internal discussion of <br />assumptions and opportunities to reduce the rebate liability. <br />Proper application of the arbitrage rebate regulations requires a detailed <br />understanding of the original intent of financing as well as the historical use of <br />proceeds. <br />Once the mathematical analysis is complete, two (2) senior-level rebate <br />consultants will perform a comprehensive review of the report noting theoretical <br />and technical issues to be evaluated. If appropriate, these issues will be <br />communicated to City. <br />One (1) to two (2) weeks, depending upon the complexity of the financing. <br />Possible discussion with City staff. <br />4. Conclusions, Recommendations and Action Plan <br />ATTY/AGR.2023.232/Willdan Financial Services (Willdan Financial Services) (Page 18 of 22)