HATTIESBURG, MS (WDAM) - The Hattiesburg City Council approved an agreement with a consulting firm to help the city locate New Market Tax Credits (NMTCs) to fund construction of its public safety complex.
According to its agreement with the city, Oregon-based firm IPR Consulting, Inc. will "provide financial consulting services as Financial Advisor and Management Consultant" to find an investor willing to buy Hattiesburg's tax credits and pay for the project.
IPR Consulting lists seven specific goals in its contract:
- Secure proposals for an allocation of of NMTCs
- Obtain a proposal for the investor(s) for purchasing the NMTCs allocation
- Manage due diligence for closing the NMTCs transactions
- Assist staff to prepare proforma financials, appropriate sources and uses documentation, draw schedules and other documents for closing the NMTCs transaction
- Provide guidance to accounting staff for the 7-year compliance reporting and audits
- Coordinate day-to-day activities of the specialized professional services for NMTCs from the attorney, transaction accountant, closing officer and others as directed
- Other duties as mutually agreed upon for general oversight of obtaining project development.
Hattiesburg will pay the consultant two forms of cash compensation, according to the agreement.
The city will pay 4 percent of overall transaction amounts, which will be paid in two installments. The first $50,000 retainer fee is payable immediately now that the council has approved the contact the second installment is the balance due "upon closing each NMTC transaction." So, if the consultant finds a target transaction amount $10,000,000, that "would result in compensation of $350,000 at closing and which is net including credit for the initial payment of the retainer." If a second $10,000,000 transaction is approved, then the compensation would be $400,000 at closing.
The second compensation plan is "no less than monthly" payments starting Sept. 30, 2016 to Hattiesburg's representative, who is former Hattiesburg Chief Financial officer Connie Everett. Everett will be paid $140 per hour.
Hattiesburg Council President Carter Carroll said he is excited to begin the process of looking for funding options to build the city's new public safety complex.