Finance Committee

District 1 District 2 District 3 District 4 District 5 District 6 District 7 Joseph Eatmon, Sr. Raevan Howard Norman Crow Lee Busby Kip Tyner John Faile Cassius Lanier Member Vice Chairperson Chairperson Alternate Council Finance Committee Meeting Agenda Tuesday, October 28, 2025 Daugherty Conference Room 3:00 p.m. TOPIC PRESENTER SUPPORTING MATERIAL Approval of Minutes NEW BUSINESS 1. Approval of disbursement from District 2 Improvements Fund for Councilor Howard PARA; total: $2,000.00 2. Approval of disbursement from District 2 Improvements Fund for Councilor Howard Alpha Chapter Youth Clubs of Tuscaloosa County; total: $1,000.00 3. Approval of disbursement from District 2 Improvements Fund for the Councilor Howard Bridge Builder Friendship Foundation, Inc.; total: $1,500.00 4. Approval of disbursement from District 2 Improvements Fund for Councilor Howard Central High Men’s Basketball; total: $1,000.00 5. Approval of disbursement from District 2 Improvements Fund for Councilor Howard Central High School Auxiliary; total: $1,500.00 6. Approval of disbursement from District 2 Improvements Fund for Councilor Howard Jeremiah’s Garden; total: $1,500.00 7. Approval of disbursement from District 3 Improvements Fund for Councilor Crow Verner Elementary; total: $2,500.00 8. Approval of disbursement from District 3 Improvements Fund for Councilor Crow Rock Quarry Elementary School; total: $2,500.00 1  9. Approval of disbursement from District 3 Improvements Fund for Councilor Crow Northridge Middle School; total: $2,500.00 10. Approval of disbursement from District 3 Improvements Fund for Councilor Crow Northridge High School; total: $2,500.00 11. Approval of disbursement from District 7 Improvements Fund for Councilor Lanier Elevate West Alabama; total: $5,000.00 12. General Fund budget revision no. 3 Carly Standridge 3 13. Approval of contract with The Arbitrage Group, Inc. for arbitrage Carly Standridge 4-7 earnings determination 14. Noah’s Ark 2.0 funding discussion Mayor Maddox Carly Standridge ADJOURN 2 Proposed Budget Revisions for FY 2026 Finance Committee - October 28, 2025 General Fund Budget Amendment #3 Current Proposed Amended Action Account # Line Item Budget Revision Budget Increase 10100080-1536 Auction Sales - TPD LESO Funds (12,814) (393,962) (406,776) Increase 10105010-3100 Outside Services 75,000 100,000 175,000 Increase 10105010-3170 Repairs & Supplies 95,000 17,134 112,134 Increase 10105010-4010 Equipment 135,000 276,828 411,828 - To utilize LESO funds to expand TPD gym area, make upgrades to the TPD command truck, and purchase needed equipment for TPD. Equipment will include: Gym Equipment ($70,000) Boat Engine Replacement ($53,530) Headsets for SWAT team ($27,588) Upgrade Garage Vehicle Lift ($14,000) Replace 2 Vehicle Lifts ($40,000) Wrap the Command Truck ($26,589) Replace Awnings on the Command Truck ($6,885) Emergency Equipment for the Command Truck ($5,296) Interior Electronics for the Command Truck ($32,940) 3 99 Detering Street Telephone 713.522.8527 www.thearbitragegroup.com Suite 120 Houston, Texas 77007 October 14, 2025 Mayor Walt Maddox City of Tuscaloosa 2201 University Boulevard Tuscaloosa, Alabama 35401 Dear Mr. Mayor: We are pleased to submit this engagement letter which describes the assistance we will provide to the City of Tuscaloosa (the "City") regarding the calculation of arbitrage earnings for the bond issues indicated in the Exhibit to this letter. This letter provides our understanding of the needs of the City, lists the information that is to be provided to The Arbitrage Group, Inc. (“The Group”) to enable the calculation of the arbitrage earnings amount, and describes the procedures to be performed. The City needs to determine the arbitrage earnings amount for each of the bond issues listed in the Exhibit to this letter for the indicated period (the "Computation Period"). The arbitrage earnings amount is determined by calculating the difference between: 1. The actual earnings on nonpurpose investments purchased with gross proceeds of the indicated bond issue during the Computation Period, and 2. The earnings which would have been earned during the Computation Period on nonpurpose investments if such investments were made at a rate equal to the yield on the indicated bond issue. The City will be responsible for providing The Group with the information required to calculate the arbitrage earnings amount. The information required includes the following for each bond issue, as applicable: 1. Official Statement or Private Placement Memorandum; 2. Certificate as to Arbitrage or similar document; 3. IRS Form 8038; 4 City of Tuscaloosa Mayor Walt Maddox October 14, 2025 Page 2 4. Trust statements (or equivalent) indicating detailed investment activity for the entire Computation Period for each fund/account in which gross proceeds of each issue were held. Investment activity details include such items as: a. Type of investment b. Date of purchase/purchase price c. Interest rate d. Maturity date e. Interest payment dates f. Interest calculation methodology g. Date of sale/sales price; 5. Verification Reports, if any. Utilizing the information provided by the City, the following procedures will be applied by The Group: 1. Review the documents associated with each of the bond issues to identify key characteristics of each issue and the related arbitrage requirements; 2. Review the trust statements and determine that all trust statements related to the indicated Computation Period have been provided; 3. Assemble a schedule of the debt service requirements for each bond issue and calculate the yield for the issue; 4. Assemble schedules of investment activity for each fund/account subject to the arbitrage rebate requirements and calculate the arbitrage earnings for the Computation Period; 5. Prepare a draft report of our findings for each bond issue which will include a summary of the information and computational assumptions affecting the calculations; 6. Submit our draft reports to the City for review and approval; and, 7. Complete quality reviews of the reports and the supporting documentation and issue our reports to the City along with IRS Form 8038-T as applicable. The successful completion of this engagement will require close coordination between the personnel resources of the City and The Group. Accordingly, we will assign a Project Director for this engagement to coordinate engagement activities and we would like the City to do the same. 5 City of Tuscaloosa Mayor Walt Maddox October 14, 2025 Page 3 We will have no obligation to update our reports or to check any revised calculations because of events and transactions occurring subsequent to the date of our reports. Our reports will be issued solely for your information and assistance and are not to be quoted or referred to in other documents without our prior written consent. It is assumed that all of the appropriate documentation is available in a concise, organized, and complete manner, and that we will have access to the individuals responsible for the calculation of interest earnings for the investment portfolio. Based on these assumptions, the fees for each of the Computation Periods for each bond issue are indicated in the Exhibit to this letter. The total of the individual fees includes any out-of-pocket expenses we may incur. ***** We look forward to working with you on this project. If you have any comments or questions regarding this engagement please do not hesitate to call me at (713) 522-8527. To signify your acceptance of the arrangements described in this letter, please return a signed copy of this letter. Very truly yours, The Arbitrage Group, Inc. H. Troy Merrill Partner 6  Exhibit City of Tuscaloosa Bond Issues Requiring Arbitrage Rebate Calculations Issue Computation Period/Fee Range 1. City of Tuscaloosa, Alabama General December 12, 2019 to September 30, 2025 Obligation Warrants Series 2019-A $1,500, 2. City of Tuscaloosa, Alabama General November 18, 2020 to September 30, 2025 Obligation Warrants Series 2020-A $1,500 and to November 18, 2025 $1,000 3. City of Tuscaloosa, Alabama General July 20, 2022 to September 30, 2025 Obligation Warrants Series 2022-A $1,500 4. City of Tuscaloosa, Alabama General July 20, 2022 to September 30, 2025 Obligation Warrants Series 2022-B $1,500 5. City of Tuscaloosa, Alabama General December 21, 2022 to September 30, 2025 Obligation Warrants Series 2022-C $1,500 6. City of Tuscaloosa, Alabama General August 5, 2025 Initial Report Obligation Warrants Series 2025-C $1,500 7. City of Tuscaloosa, Alabama General August 26, 2025 Initial Report Obligation Warrants Series 2025-C $1,500 7