R-10-06-24-11A1 - 6/24/2010RESOLUTION NO. R -10-06-24-11A1
WHEREAS, the City of Round Rock desires to retain professional consulting services for
financial and compliance audit services, and
WHEREAS, Brockway, Gersbach, Franklin & Niemeier, P.C., ("Brockway") has submitted an
Agreement for Consulting Services to provide said services, and
WHEREAS, the City Council desires to enter into said agreement with Brockway, Now
Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS,
That the Mayor is hereby authorized and directed to execute on behalf of the City an
Agreement for Consulting Services for Financial and Compliance Audit Services With Brockway,
Gersbach, Franklin & Niemeier, P.C., a copy of same being attached hereto as Exhibit "A" and
incorporated herein for all purposes.
The City Council hereby finds and declares that written notice of the date, hour, place and
subject of the meeting at which this Resolution was adopted was posted and that such meeting was
open to the public as required by law at all times during which this Resolution and the subject matter
hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act,
Chapter 551, Texas Government Code, as amended.
RESOLVED this 24th day of June, 2010.
ALAN MCGRAW, Mayor
City of Round Rock, Texas
ATTEST:
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SARA L. WHITE, City Secretary
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CITY OF ROUND ROCK AGREEMENT FOR CONSULTING SERVICES
FOR FINANCIAL AND COMPLIANCE AUDIT SERVICES WITH
BROCKWAY, GERSBACH, FRANKLIN & NIEMEIER, P.C.
THE STATE OF TEXAS
CITY OF ROUND ROCK
COUNTY OF WILLIAMSON
COUNTY OF TRAVIS
KNOW ALL BY THESE PRESENTS:
THIS AGREEMENT for professional consulting services for financial and compliance
audit services (the "Agreement") is made by and between the CITY OF ROUND ROCK,
TEXAS, a home -rule municipality with offices located at 221 East Main Street, Round Rock,
Texas 78664-5299 (the "City") and BROCKWAY, GERSBACH, FRANKLIN & NIEMEIER,
P.C., Certified Public Accountants, with principal offices located at Post Office Box 4083,
Temple, Texas 76505-4083 (the "Consultant" or "Brockway").
RECITALS:
WHEREAS, City has determined that there is a need for the delineated services; and
WHEREAS, City desires to contract for such professional services; and
WHEREAS, the parties desire to enter into this Agreement to set forth in writing their
respective rights, duties, and obligations hereunder;
NOW, THEREFORE, WITNESSETH:
That for and in consideration of the mutual promises contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is
mutually agreed between the parties as follows:
1.01 EFFECTIVE DATE, DURATION, AND TERM
This Agreement shall be effective on the date it has been signed by each party hereto, and
shall remain in full force and effect unless and until it expires by operation of the term stated
herein, or until terminated or extended as provided herein.
The term of this Agreement shall be until full and satisfactory completion of the audit
services for the year ended September 30, 2010, and until full and satisfactory completion of the
work specified herein is achieved, but in no event later than one (1) year from the effective date
of this Agreement.
City reserves the right to review the Agreement at any time, and may elect to terminate
this Agreement with or without cause or ma elect to continue.
EXHIBIT
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2.01 CONTRACT AMOUNT
In consideration for the professional consulting services to be performed by Consultant,
City agrees to pay Consultant a total sum not to exceed One Hundred Two Thousand Five
Hundred and No/100 Dollars ($102,500.00), in payment for services and the scope of services
deliverables as delineated herein and in attached exhibits. This amount includes reimbursable
expenses eligible for payment under this Agreement.
3.01 SCOPE OF SERVICES
For purposes of this Agreement, Consultant has issued its scope of services for the
assignunents delineated herein, and such scope of services is recited in engagement
correspondence from Brockway, Gersbach, Franklin & Niemeier, P.C. dated April 29, 2010, said
engagement correspondence being marked Exhibit "A" and attached hereto and incorporated
herein by reference for all purposes. This Agreement shall evidence the entire understanding and
agreement between the parties and shall supersede any prior proposals, correspondence or
discussions. This Agreement shall take precedence in every instance over any conflicting
provisions contained in Exhibit "A." Consultant shall satisfactorily provide all services and
deliverables described under the referenced scope of services within the contract term specified
herein. Consultant's undertakings shall be limited to performing services for City and/or advising
City concerning those matters on which Consultant has been specifically engaged. Consultant
shall perform its services in accordance with this Agreement and in accordance with the
referenced scope of services. Consultant shall perform its services in a professional and
workmanlike manner.
Consultant shall not undertake work that is beyond the scope of services set forth in
Exhibit "A" and herein. However, either party may make written requests for changes to the
scope of services. To be effective, a change to the scope of services must be negotiated and
agreed to in all relevant details, and Hurst be embodied in a valid Supplemental Agreement as
described herein.
4.01 PAYMENT FOR SERVICES; NO REIMBURSABLE EXPENSES
Payment for Services: In consideration for the consulting services to be performed by
Consultant, City agrees to pay Consultant the following "Payment for Services:"
Fees for the listed deliverables in the total arnount of $102,500.00 shall be paid by City in
the following manner: monthly as properly invoiced, in accordance with the Texas Prompt
Payment Act.
Payment for Reimbursable Expenses: No additional payment for reimbursable
expenses, in excess of the delineated not -to -exceed amount, is authorized under this Agreement.
Not -to -Exceed Total Payment for Services: Unless subsequently changed by
Supplemental Agreement, Consultant's total compensation for consulting services hereunder
shall not exceed $102,500.00. This amount represents the absolute limit of City's liability to
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Consultant hereunder unless same shall be changed by Supplemental Agreement, and City shall
pay, strictly within the not -to -exceed sum recited herein, Consultant's professional fees for work
done on behalf of City.
Deductions: No deductions shall be made for Consultant's compensation on account of
penalty, liquidated damages or other sums withheld from payments to Consultant.
Additions: No additions shall be made to Consultant's compensation based upon project
claims, whether paid by City or denied.
5.01 SUPPLEMENTAL AGREEMENT
The terms of this Agreement may be modified by written Supplemental Agreement
hereto, duly authorized by City Council or by the City Manager, if City determines that there has
been a significant change in (1) the scope, complexity, or character of the services to be
performed; or (2) the duration of the work. Any such Supplemental Agreement must be
executed by both parties within the period specified as the term of this Agreement. Consultant
shall not perform any work or incur any additional costs prior to the execution, by both parties,
of such Supplemental Agreement. Consultant shall make no claim for extra work done or
materials furnished unless and until there is full execution of any Supplemental Agreement, and
City shall not be responsible for actions by Consultant nor for any costs incurred by Consultant
relating to additional work not directly authorized by Supplemental Agreement.
6.01 INVOICE REQUIREMENTS; TERMS OF PAYMENT
Invoices: To receive payment under this Agreement, Consultant shall prepare and
submit detailed progress invoices to City, in accordance with the delineation contained herein,
for services rendered. Such invoices for professional services shall track the referenced scope of
services, and shall detail the services performed, along with documentation for each service
performed. Payment to Consultant shall be made on the basis of the invoices submitted by
Consultant and approved by City. Such invoices shall conform to the schedule of services and
costs in connection therewith.
Should additional backup material be requested by City relative to service deliverables,
Consultant shall comply promptly. In this regard, should City determine it necessary,
Consultant shall make all records and books relating to this Agreement available to City for
inspection and auditing purposes.
Payment of Invoices: City reserves the right to correct any error that may be discovered
in any invoice that may have been paid to Consultant and to adjust same to meet the
requirements of this Agreement. Following approval of an invoice, City shall endeavor to pay
Consultant promptly, but no later than the time period required under the Texas Prompt Payment
Act. Under no circumstances shall Consultant be entitled to receive interest on payments which
are late because of a good faith dispute between Consultant and City or because of amounts
which City has a right to withhold under this Agreement or state law. City shall be responsible
for any sales, gross receipts or similar taxes applicable to the services, but not for taxes based on
Consultant's net income.
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7.01 REQUIRED DRAFT REPORTS AND FINAL REPORT
Consultant agrees to provide City with draft reports and a detailed final written report,
together with all information gathered and materials developed during the course of the project.
Consultant agrees to provide City with additional bound copies of the final written report,
if and as requested, with the right to snake additional copies being at the sole election of City.
All copies of the written final report will be to specifications as delineated by City.
8.01 LIMITATION TO SCOPE OF SERVICES
Consultant and City agree that the scope of services to be performed is enumerated in
Exhibit "A" and herein, and may not be changed without the express written agreement of the
parties. Notwithstanding anything herein to the contrary, the parties agree that City retains
absolute discretion and authority for all funding decisions, such to be based solely on criteria
accepted by City which may be influenced by but not be dependent on Consultant's work.
9.01 NON -APPROPRIATION AND FISCAL FUNDING
This Agreement is a commitment of City's current revenues only. It is understood and
agreed that City shall have the right to terminate this Agreement at the end of any City fiscal year
if the governing body of City does not appropriate funds sufficient to purchase the services as
determined by City's budget for the fiscal year in question. City may effect such termination by
giving Consultant a written notice of termination at the end of its then -current fiscal year.
10.01 PROMPT PAYMENT POLICY
In accordance with Chapter 2251, V.T.C.A., Texas Government Code, any payment to be
made by City to Consultant will be made within thirty (30) days of the date City receives goods
under this Agreement, the date the performance of the services under this Agreement are
completed, or the date City receives a correct invoice for the goods or services, whichever is
Iater. Consultant may charge interest on an overdue payment at the "rate in effect" on September
1 of the fiscal year in which the payment becomes overdue, in accordance with V.T.C.A., Texas
Government Code, Section 2251.025(b). This Prompt Payment Policy does not apply to
payments made by City in the event:
A. There is a bona fide dispute between City and Consultant, a contractor,
subcontractor, or supplier about the goods delivered or the service performed that
causes the payment to be late; or
B. There is a bona fide dispute between Consultant and a subcontractor or between a
subcontractor and its supplier about the goods delivered or the service performed
that causes the payment to be late; or
C. The terms of a federal contract, grant, regulation, or statute prevent City from
making a timely payment with federal funds; or
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D. The invoice is not mailed to City in strict accordance with any instruction on the
purchase order relating to the payment.
11.01 TERMINATION; DEFAULT
Termination: It is agreed and understood by Consultant that City inay terminate this Agreement
for the convenience of City, upon fifteen (15) days' written notice to Consultant, with the
understanding that immediately upon receipt of said notice all work being performed under this
Agreement shall cease. Consultant shall invoice City for work satisfactorily completed and shall
be compensated in accordance with the terms hereof for work accomplished prior to the receipt
of said notice of termination. Consultant shall not be entitled to any lost or anticipated profits for
work terminated under this Agreement. Unless otherwise specified in this Agreement, all data,
information, and work product related to this project shall become the property of City upon
termination of this Agreement, and shall be promptly delivered to City in a reasonably organized
form without restriction on future use, subject to the conditions set forth herein. Should City
subsequently contract with a new consultant for continuation of service on the project,
Consultant shall cooperate in providing information.
Termination of this Agreement shall extinguish all rights, duties, and obligations of City
and the terminated party to fulfill contractual obligations. Termination under this section shall
not relieve the terminated party of any obligations or Iiabilities which occurred prior to
termination.
Nothing contained in this section shall require City to pay for any work which it deems
unsatisfactory or which is not performed in compliance with the terms of this Agreement.
Default: Either party may terminate this Agreement, in whole or in part, for default if
the party provides the other party with written notice of such default and the other fails to
satisfactorily cure such default within ten (10) business days of receipt of such notice (or a
greater time if agreed upon between the parties).
If default results in termination of this Agreement, then City shall give consideration to
the actual costs incurred by Consultant in performing the work to the date of default. The cost of
the work that is useable to City, the cost to City of employing another firm to complete the
useable work, and other factors will affect the value to City of the work performed at the time of
default. Neither party shall be entitled to any lost or anticipated profits for work terminated for
default hereunder.
The termination of this Agreement for default shall extinguish all rights, duties, and
obligations of the terminating party and the terminated party to fulfill contractual obligations.
Termination under this section shall not relieve the terminated party of any obligations or
liabilities which occurred prior to termination.
Nothing contained in this section shall require City to pay for any work which it deems
unsatisfactory, or which is not performed in compliance with the terms of this Agreement.
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12.01 INDEPENDENT CONTRACTOR STATUS
Consultant is an independent contractor, and is not City's employee. Consultant's
employees or subcontractors are not City's employees. This Agreement does not create a
partnership, employer-employee, or joint venture relationship. No party has authority to enter
into contracts as agent for the other party. Consultant and City agree to the following rights
consistent with an independent contractor relationship:
(1) Consultant has the right to perform services for others during the term hereof.
(2) Consultant has the sole right to control and direct the means, manner and method
by which it performs its services required by this Agreement.
Consultant has the right to hire assistants as subcontractors, or to use employees
to provide the services required by this Agreement.
(4) Consultant or its employees or subcontractors shall perform services required
hereunder, and City shall not hire, supervise, or pay assistants to help Consultant.
Neither Consultant nor its employees or subcontractors shall receive training from
City in skills necessary to perform services required by this Agreement.
(6) City shall not require Consultant or its employees or subcontractors to devote full
time to performing the services required by this Agreement.
Neither Consultant nor its employees or subcontractors are eligible to participate
in any employee pension, health, vacation pay, sick pay, or other fringe benefit
plan of City.
(3)
(5)
(7)
13.01 NON -SOLICITATION
Except as may be otherwise agreed in writing, during the term of this Agreement and for
twelve (12) months thereafter, neither City nor Consultant shall offer employment to or shall
employ any person employed then or within the preceding twelve (12) months by the other or
any affiliate of the other if such person was involved, directly or indirectly, in the performance of
this Agreement. This provision shall not prohibit the hiring of any person who was solicited
solely through a newspaper advertisement or other general solicitation.
14.01 CITY'S RESPONSIBILITIES
Full information: City shall provide full information regarding project requirements.
City shall have the responsibility of providing Consultant with such documentation and
information as is reasonably required to enable Consultant to provide the services called for.
City shall require its employees and any third parties who are otherwise assisting, advising or
representing City to cooperate on a timely basis with Consultant in the provision of its services.
Consultant may rely upon written information provided by City and its employees and agents as
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accurate and complete. Consultant may rely upon any written directives provided by City or its
designated representative concerning provision of services as accurate and complete.
Required materials: Consultant's performance requires receipt of all requested
information reasonably necessary to provision of services. Consultant agrees, within ten (10)
days of the effective date of this Agreement, to provide City with a comprehensive and detailed
information request list, if any.
15.01 CONFIDENTIALITY; AND MATERIALS OWNERSHIP
Any and all programs, data, or other materials furnished by City for use by Consultant in
connection with services to be performed under this Agreement, and any and all data and
information gathered by Consultant, shall be held in confidence by Consultant as set forth
hereunder. Each party agrees to take reasonable measures to preserve the confidentiality of any
proprietary or confidential information relative to this Agreement, and to not make any use
thereof other than for the performance of this Agreement, provided that no claim may be made
for any failure to protect information that occurs more than three (3) years after the end of this
Agreement.
The parties recognize and understand that City is subject to the Texas Public Information
Act and its duties run in accordance therewith.
All data relating specifically to City's business and any other information which
reasonably should be understood to be confidential to City is confidential information of City.
Consultant's proprietary software, tools, methodologies, techniques, ideas, discoveries,
inventions, know-how, and any other information which reasonably should be understood to be
confidential to Consultant is confidential information of Consultant. City's confidential
information and Consultant's confidential information is collectively referred to as "Confidential
Information." Each party shall use Confidential Information of the other party only in
furtherance of the purposes of this Agreement and shall not disclose such Confidential
Information to any third party without the other party's prior written consent, which consent
shall not be unreasonably withheld. Each party agrees to take reasonable measures to protect the
confidentiality of the other party's Confidential Information and to advise their employees of the
confidential nature of the Confidential Information and of the prohibitions herein.
Notwithstanding anything to the contrary contained herein, neither party shall be
obligated to treat as confidential any information disclosed by the other party (the "Disclosing
Party") which: (1) is rightfully known to the recipient prior to its disclosure by the Disclosing
Party; (2) is released by the Disclosing Party to any other person or entity (including
governmental agencies) without restriction; (3) is independently developed by the recipient
without any reliance on Confidential Information; or (4) is or later becomes publicly available
without violation of this Agreement or may be lawfully obtained by a party from any non-party.
Notwithstanding the foregoing, either party will be entitled to disclose Confidential
Information of the other to a third party as may be required by law, statute, rule or regulation,
including subpoena or other similar form of process, provided that (without breaching any legal
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or regulatory requirement) the party to whom the request is made provides the other with prompt
written notice and allows the other party to seek a restraining order or other appropriate relief.
Subject to Consultant's confidentiality obligations under this Agreement, nothing herein
shall preclude or limit Consultant from providing similar services for other clients.
Neither the City nor Consultant will be liable to the other for inadvertent or accidental
disclosure of Confidential Information if the disclosure occurs notwithstanding the party's
exercise of the same level of protection and care that such party customarily uses in safeguarding
its own proprietary and confidential information.
Notwithstanding anything to the contrary in this Agreement, City will own as its sole
property all written materials created, developed, gathered, or originally prepared expressly for
City and delivered to City under the terms of this Agreement (the "Deliverables"); and
Consultant shall own any general skills, know-how, expertise, ideas, concepts, methods,
techniques, processes, software, or other similar information which may have been discovered,
created, developed or derived by Consultant either prior to or as a result of its provision of
services under this Agreement (other than the Deliverables). Consultant's working papers and
Consultant's Confidential Information (as described herein) shall belong exclusively to
Consultant. City shall have a non-exclusive, non -transferable license to use Consultant's
Confidential Information for City's own internal use and only for the purposes for which they are
delivered to the extent that they form part of the Deliverables.
16.01 WARRANTIES
Consultant represents that all services performed hereunder shall be performed consistent
with generally prevailing professional or industry standards, and shall be performed in a
professional and workmanlike manner. Consultant shall re -perform any work not in compliance
with this representation. CONSULTANT DISCLAIMS ALL OTHER WARRANTIES
EXPRESS OR IMPLIED INCLUDING BUT NOT LIMITED TO THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
17.01 LIMITATION OF LIABILITY
Should any of Consultant's services not conform to the requirements of City or of this
Agreement, then and in that event City shall give written notification to Consultant; thereafter,
(a) Consultant shall either promptly re -perform such services to City's satisfaction at no
additional charge, or (b) if such deficient services cannot be cured within the cure period set
forth herein, then this Agreement may be terminated for default.
In no event will Consultant be liable for any loss, damage, cost or expense attributable to
negligence, willful misconduct or misrepresentations by City, its directors, employees or agents.
In no event shall Consultant be liable to City, by reason of any act or omission relating to
the services provided under this Agreement (including the negligence of Consultant), whether a
claim be in tort, contract or otherwise, (a) for any consequential, indirect, lost profit, punitive,
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special or similar damages relating to or arising from the services, or (b) in any event, in the
aggregate, for any amount in excess of the total professional fees paid by City to Consultant
under this Agreement, except to the extent determined to have resulted from Consultant's gross
negligence, willful misconduct or fraudulent acts relating to the service provided hereunder.
18.01 ASSIGNMENT AND DELEGATION
The parties each hereby bind themselves, their successors, assigns and legal
representatives to each other with respect to the terms of this Agreement. Neither party may
assign any rights or delegate any duties under this Agreement without the other party's prior
written approval, which approval shall not be unreasonably withheld.
19.01 LOCAL, STATE AND FEDERAL TAXES
Consultant shall pay all income taxes, and FICA (Social Security and Medicare taxes)
incurred while performing services under this Agreement. City will not do the following:
(1) Withhold FICA from Consultant's payments or snake FICA payments on its
behalf;
(2) Make state and/or federal unemployment compensation contributions on
Consultant's behalf; or
(3)
Withhold state or federal income tax from any of Consultant's payments.
If requested, City shall provide Consultant with a certificate from the Texas State
Comptroller indicating that City is a non-profit corporation and not subject to State of Texas
Sales and Use Tax.
20.01 INSURANCE
Insurance. Consultant, at Consultant's sole cost, shall have and maintain during the
term of this Agreement professional liability insurance coverage in the minimum amount of One
Million Dollars from a company authorized to do insurance business in Texas and otherwise
acceptable to City.
Insurance Policy Endorsements. Each insurance policy hereunder shall include the
following conditions by endorsement to the policy:
(1) Each policy shall require that thirty (30) days prior to the expiration, cancellation,
non -renewal or any material change in coverage, a notice thereof shall be given to
City by mail to:
City Manager, City of Round Rock
221 East Main Street
Round Rock, Texas 78664
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Consultant shall also notify City, within ten (10) days of receipt, of any notices of
expiration, cancellation, non -renewal, or material change in coverage it receives
from its insurer.
(2) Companies issuing the insurance policies shall have no recourse against City for
payment of any premiums or assessments for any deductibles which all are at the
sole responsibility and risk of Consultant.
Terms "the City" or "the City of Round Rock" shall include all authorities, boards,
commissions, departments, and officers of City and individual members, employees
and designated agents in their official capacities, or while acting on behalf of the
City of Round Rock,
(4) The policy clause "Other Insurance" shall not apply to any insurance coverage
currently held by City, to any future coverage, or to City's Self -Insured Retentions
of whatever nature.
(3)
(5)
Consultant and City mutually waive subrogation rights each may have against the
other for Loss or damage, to the extent same is covered by the proceeds of insurance.
Cost of Insurance. The cost of all insurance required herein to be secured and
maintained by Consultant shall be borne solely by Consultant, with certificates of insurance
evidencing such minimum coverage in force to be filed with City.
21.01 COMPLIANCE WITH LAWS, CHARTER AND ORDINANCES
Consultant, its consultants, agents, employees and subcontractors shall use best efforts to
comply with all applicable federal and state laws, the Charter and Ordinances of the City of
Round Rock, as amended, and with all applicable rules and regulations promulgated by local,
state and national boards, bureaus and agencies. Consultant shall further obtain all permits,
licenses, trademarks, or copyrights .required. in the performance of the seavices contracted for
herein, and same shall belong solely to City at the expiration of the term of this Agreement.
22.01 FINANCIAL INTEREST PROHIBITED
Consultant covenants and represents that Consultant, its officers, employees, agents,
consultants and subcontractors will have no financial interest, direct or indirect, in the purchase
or sale of any product, materials or equipment that will be recommended or required hereunder.
23.01 DESIGNATION OF REPRESENTATIVES
The City hereby designates the following representative(s) authorized to act in its behalf
with regard to this Agreement:
City Manager James Nuse, P.E.
City of Round Rock
221 East Main Street
Round Rock, Texas 78664-5299
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Consultant hereby designates the following representative authorized to act in its behalf
with regard to this Agreement:
Steve Niemeier, Engagement Partner
Brockway, Gersbach, Franklin & Niemeier, P.C.
Post Office Box 4083
Temple, Texas 76505-4083
Telephone: (254) 773-9907
Website: www.templecpa.com
24.01 NOTICES
All notices and other communications in connection with this Agreement shall be in
writing and shall be considered given as follows:
(1) When delivered personally to recipient's address as stated herein; or
(2) Three (3) days after being deposited in the United States mail, with postage
prepaid to the recipient's address as stated in this Agreement.
Notice to Consultant:
Brockway, Gersbach, Franklin & Niemeier, P.C.
Post Office Box 4083
Temple, Texas 76505-4083
Notice to City:
City Manager, City of Round Rock
221 East Main Street
Round Rock, TX 78664
AND TO:
Stephan L. Sheets, City Attorney
309 East Main Street
Round Rock, TX 78664
Nothing contained in this section shall be construed to restrict the transmission of routine
communications between representatives of City and Consultant.
25.01 APPLICABLE LAW; ENFORCEMENT AND VENUE
This Agreement shall be enforceable in Round Rock, Texas, and if legal action is
necessary by either party with respect to the enforcement of any or all of the terms or conditions
herein, exclusive venue for same shall lie in Williamson County, Texas. This Agreement shall
be governed by and construed in accordance with the laws and court decisions of Texas.
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26.01 EXCLUSIVE AGREEMENT
The terms and conditions of this Agreement, including exhibits, constitute the entire
agreement between the parties and supersede all previous communications, representations, and
agreements, either written or oral, with respect to the subject matter hereof. The parties
expressly agree that, in the event of any conflict between the terms of this Agreement and any
other writing, this Agreement shall prevail. No modifications of this Agreement will be binding
on any of the parties unless acknowledged in writing by the duly authorized governing body or
representative for each party.
27.01 DISPUTE RESOLUTION
If a dispute arises under this Agreement, the parties agree to first try to resolve the
dispute with the help of a mutually selected mediator. If the parties cannot agree on a mediator,
City shall select one mediator and Consultant shall select one mediator and those two mediators
shall agree upon a third mediator. Any costs and fees, other than attorney fees, associated with
the mediation shall be shared equally by the parties.
City and Consultant hereby expressly agree that no claims or disputes between the parties
arising out of or relating to this Agreement or a breach thereof shall be decided by any arbitration
proceeding, including without limitation, any proceeding under the Federal Arbitration Act (9
USC Section 1-14) or any applicable state arbitration statute.
28.01 FORCE MAJEURE
Notwithstanding any other provisions hereof to the contrary, no failure, delay or default
in performance of any obligation hereunder shall constitute an event of default or breach of this
Agreement, only to the extent that such failure to perform, delay or default arises out of causes
beyond control and without the fault or negligence of the party otherwise chargeable with failure,
delay or default; including but not Iimited to acts of God, acts of public enemy, civil war,
insurrection, riots, fires, floods, explosion, theft, earthquakes, natural disasters or other
casualties, strikes or other labor troubles, which in any way restrict the performance under this
Agreement by the parties.
Consultant shall not be deemed to be in default of its obligations to City if its failure to
perform or its substantial delay in performance is due to City's failure to timely provide
requested information, data, documentation, or other material necessary for Consultant to
perform its obligations hereunder.
29.01 SEVERABILITY
The invalidity, illegality, or unenforceability of any provision of this Agreement or the
occurrence of any event rendering any portion of provision of this Agreement void shall in no
way affect the validity or enforceability of any other portion or provision of this Agreement. Any
void provision shall be deemed severed from this Agreement, and the balance of this Agreement
shall be construed and enforced as if this Agreement did not contain the particular portion of
provision held to be void. The parties further agree to amend this Agreement to replace any
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stricken provision with a valid provision that comes as close as possible to the intent of the
stricken provision. The provisions of this section shall not prevent this entire Agreement from
being void should a provision which is of the essence of this Agreement be determined void.
30.01 STANDARD OF CARE
Consultant represents that it is specially trained, experienced and competent to perform
all of the services, responsibilities and duties specified herein and that such services,
responsibilities and duties shall be performed, whether by Consultant or designated
subconsultants, in a manner acceptable to City and according to generally accepted business
practices.
31.01 GRATUITIES AND BRIBES
City may, by written notice to Consultant, cancel this Agreement without incurring any
liability to Consultant if it is determined by City that gratuities or bribes in the form of
entertainment, gifts, or otherwise were offered or given by Consultant or its agents or
representatives to any City officer, employee or elected representative with respect to the
performance of this Agreement. In addition, Consultant may be subject to penalties stated in
Title 8 of the Texas Penal Code.
32.01 RIGHT TO ASSURANCE
Whenever either party to this Agreement, in good faith, has reason to question the other
party's intent to perform hereunder, then demand may be made to the other party for written
assurance of the intent to perform. In the event that no written assurance is given within the
reasonable time specified when demand is made, then and in that event the demanding party may
treat such failure as an anticipatory repudiation of this Agreement.
33.01 COMPLIANCE WITH LAWS, CHARTER AND ORDINANCES
Consultant, its agents, employees and subcontractors shall use best efforts to comply with
all applicable federal and state laws, the Charter and Ordinances of the City of Round Rock, as
amended, and with all applicable rules and regulations promulgated by local, state and national
boards, bureaus and agencies.
34.01 GENERAL AND MISCELLANEOUS
The section numbers and headings contained herein are provided for convenience only
and shall have no substantive effect on construction of this Agreement.
No delay or omission by either party in exercising any right or power shall impair such
right or power or be construed to be a waiver. A waiver by either party of any of the covenants
to be performed by the other or any breach thereof shall not be construed to be a waiver of any
succeeding breach or of any other covenant. No waiver of discharge shall be valid unless in
13
writing and signed by an authorized representative of the party against whom such waiver or
discharge is sought to be enforced.
This Agreement may be executed in multiple counterparts, any one of which shall be
considered an original of this document; and all of which, when taken together, shall constitute
one and the same instrument. City agrees to provide Consultant with one fully executed original.
IN WITNESS WHEREOF, City and Consultant have executed this Agreement on the
dates indicated.
Brockway, Gersbach, Franklin & Niemeier, P.C.
By:
Printed Naml.i 5� 9 l,. &4 ' �n �►t�
Title: ` C (est' zva
Date Signed: 5.14 , (b
City of Round Rock, Texas
By:
Printed Name:
Title:
Date Signed:
For City, Attest:
By:
Sara L. White, City Secretary
For City, Approved as to Form:
By:
Stephan L. Sheets, City Attorney
14
BROCKWAY
GERSBACH
FRANKLIN &
NIEMI:IER,P.C.
CERTIFIED PUBLIC ACCOUNTANTS
" April 29, 2010
City of Round Rock, Texas
221 E. Main Street
Round Rock, Texas 78664-5299
EXHIBIT
uAn
We are pleased to confirm our understanding of the services we are to provide the City of Round Rock,
Texas for the year ended September 30, 2010. We will audit the financial statements of the governmental
activities, the business -type activities, the aggregate discretely presented component units, each major
fund, and the aggregate remaining fund information, which collectively comprise the basic financial
statements of the City of Round Rock, Texas as of and for the year ended September 30, 2010.
Accounting standards generally accepted in the United States provide for certain required supplementary
information (RSI), such as management's discussion and analysis (MD&A), to supplement the City of
Round Rock, Texas' basic financial statements. Such information, although not a part of the basic
• financial statements, is required by the Governmental Accounting Standards Board who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. As part of our engagement, we will apply certain limited
procedures to City of Round Rock, Texas' RSI in accordance with auditing standards generally accepted
in the United States of America. These limited procedures will consist of inquiries of management
regarding the methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic financial statements, andother knowledge we
obtained during our audit of the basic financial statements. We will not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient evidence to
express an opinion or provide any assurance. The following RSI is required by generally accepted
accounting principles and will be subjected to certain limited procedures, but will not be audited:
1. Management's Discussion and Analysis
2. •Budgetary Comparison Schedules
3. GASB — Required Supplementary Pension and OPEB Schedules
Supplementary information other than RSI also accompanies the City of Round Rock, Texas' financial
statements. We will subject the following supplementary information to the auditing procedures applied
in our audit of the financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the
financial statements or to the financial statements themselves, and other additional procedures- in
accordance with auditing standards generally accepted in the United States of America and will provide
an opinion on it in relation to the financial statements as a whole:
1. Combining and Individual Fund Statements and Schedules
2. Schedule of Expenditures of Federal Awards
POST OFFICE BOX 4083 • TEMPLE, TEXAS 76505.4083 • 254.773.9907 • MX 254.773.1570
111M►ram..a•m rraimw. a
City of Round Rock, Texas
Page Two
The following other information accompanying the financial statements .will not be subjected to the
auditing procedures applied in our audit of the financial statements, and for which our auditor's report
will not provide an opinion or any assurance.
1. Introductory Section
2. Statistical Data
Audit Objectives
The objective of our audit is the expression of opinions as to whether your basic financial statements are
fairly presented, in all material respects, in conformity with U. S. generally accepted accounting
principles and to report on the fairness of the supplementary information referred to in the second
paragraph when considered in relation to the basic financial statements as a whole. The objective also
includes reporting on—
• Internal control related to the financial statements and compliance with laws, regulations, and the
provisions of contracts or grant agreements, noncompliance with which could have a material
effect on the financial statements in accordance with Government Auditing Standards.
• Internal control related to major programs and an opinion (or disclaimer of opinion) on
compliance with laws, regulations, and the provisions of contracts or grant agreements that could
have a direct and material effect on each major program in accordance with the Single Audit Act
Amendments of 1996 and OMB Circular A-133, Audits of States, Local Governments, and Non-'
Profit Organizations.
The reports on internal control and compliance will each include a statement that the report is intended
solely for the information and use of management, the body or individuals charged with governance,
others within the entity, specific legislative or regulatory bodies, federal awarding agencies, and if
applicable, pass-through entities and is not intended to be and should not be used by anyone other than
these specified parties..
Our audit will be conducted in accordance with auditing standards generally accepted in the United States
of America; the standards for financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; the Single Audit Act Amendments of 1996; and the provisions
of OMB Circular A-133, and will include tests of accounting records, a determination of major
program(s) in accordance with OMB Circular A-133, and other procedures we consider necessary to
enable us to express such opinions and to render the required reports. If our opinions on the financial
statements or the Single Audit compliance opinions are other than unqualified, we will fully. discuss the
reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable to form
or have not formed opinions, we may decline to express opinions or to issue a report as a result of this
engagement.
City of Round Rock, Texas
Page Three
Management Responsibilities
Management is responsible for the basic financial statements and all accompanying information as well as
all representations contained therein. Management is also responsible for identifying government award
programs and understanding and complying with the compliance requirements, and for preparation of the
schedule of expenditures of federal awards in accordance with the requirements of OMB Circular A-133.
As part of the audit, we will assist with preparation of your financial statements, schedule of expenditures
of federal awards, and related notes. You are responsible for making all management decisions and
performing all management functions relating to the financial statements, schedule of expenditures of
federal awards, and related notes and for accepting full responsibility for such decisions. You will be
required to acknowledge in the management representation letter our assistance with the preparation of
the financial statements and the schedule of expenditures of federal awards and that you have reviewed
and approved the financial statements, schedule of expenditures of federal awards, and related notes prior
to their issuance and have accepted responsibility for them. Further, you are required to designate an
individual with suitable *skill, knowledge, or experience to oversee any nonaudit services we provide and
for evaluating the adequacy and results of those services and accepting responsibility for them.
Management is responsible for establishing and maintaining effective internal controls, including internal
controls over compliance, and for evaluating and monitoring ongoing activities, to help ensure that
appropriate goals and'objectives are met and that there is reasonable assurance that government programs
are administered in compliance with compliance requirements. You are also responsible for the selection
and application of accounting principles; for the fair presentation in the financial statements of the
respective financial position of the governmental activities, the business -type activities, the aggregate.
discretely presented component units, each major fund, and the aggregate remaining fund information of
the City of Round Rock, Texas and the respective changes in financial position and, where applicable,
cash flows in conformity with U.S. generally accepted accounting principles; and for compliance with
applicable laws and regulations and the provisions of contracts and grant agreements.
Management is also responsible for making all financial records and related information available to us
and for ensuring that management and financial information is reliable and properly recorded. Your
responsibilities also include including identifying significant vendor relationships in which the vendor has
responsibility for program compliance and for the accuracy and completeness of that information. Your
responsibilities include adjusting the financial statements to correct material misstatements and
confirming to us in the representation letter that the effects of any uncorrected misstatements aggregated
by us during the current engagement and pertaining to the latest period presented are immaterial, both
individually and in the aggregate, to the financial statements taken as a whole.
City of Round Rock, Texas
Page Four
You are responsible for the design and implementation of programs and controls to prevent and detect
fraud, and for informing us about all known or suspected fraud or illegal acts affecting the government
involving (1) management, (2) employees who have significant roles in internal control, and (3) others
where the fraud or illegal acts could have a material effect on the financial statements. Your
responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud
affecting the government received in communications from employees, former employees, grantors,
regulators, or others. In addition, you are responsible for identifying and ensuring that the entity complies
with applicable laws and regulations, contracts, agreements and grants. Additionally, as required by
OMB Circular A-133, it is management's responsibility to follow up and take corrective action on
reported audit findings and to prepare a summary schedule of prior audit findings and a corrective action
plan. You are responsible for the preparation of the supplementary information in conformity with U.S.
generally accepted accounting principles. You agree to. include our report on the supplementary
information in any document that containsand indicates that we have reported on the supplementary
information. You also agree to present the supplementary information with the audited financial ,
statements.
Management is responsible for establishing and maintaining a process for tracking the status of audit
findings and recommendations. Management is also responsible for identifying for us previous financial
audits, attestation engagements, performance audits, or other studies related to the objectives discussed in
the Audit Objectives section of this letter. This responsibility includes relaying to us corrective actions
taken to address significant findings and recommendations resulting from those audits, attestation
engagements, performance audits, or studies. You are also responsible for providing management's views
on our current findings, conclusions, and recommendations, as well as your planned corrective actions,
for the report, and for the timing and format for providing that information.
Audit Procedures—General
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements;. therefore, our audit will involve judgment about the number of transactions to be
examined and the areas to be tested. We will plan and perform the audit to obtain reasonable rather than
absolute assurance about whether the financial statements are free of material misstatement, whether from
(1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws. or
governmental regulations that are attributable to the entity or to acts by management or employees acting
on behalf of the entity. Because the determination of abuse is subjective, Government Auditing Standards
do not expect auditors to provide reasonable assurance of detecting abuse.
Because an audit is designed to provide reasonable, but not absolute assurance and because we will not
perform a detailed examination" of all transactions, there is a risk that material misstatements or
noncompliance may exist and not be detected by us. In addition, an audit is not designed to detect
immaterial misstatements or violations of laws or governmental regulations that do not have a direct and
material effect on the financial statements or major programs. However, we will inform you of any
material errors and any fraudulent financial reporting or misappropriation of assets that comes to our
attention. We will also inform you of any violations of laws or governmental regulations that come to our
attention, unless clearly inconsequential and of any material abuse that comes to our attention. We will
include such matters in the reports required for a Single Audit. Our responsibility as auditors is limited to
the period covered by our audit and does not extend to any later periods for which we are not engaged as
auditors.
City of Round Rock, Texas
Page Five
Our procedures will include tests of documentary evidenoe supporting the transactions recorded in the
accounts, and may include tests df the physical existence of inventories, and direct confirmation of
receivables and certain other assets and liabilities by correspondence with selected individuals, funding
sources, creditors, and financial institutions. We will request written representations from your attorneys
as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion.of our
audit, we will also require certain written representations from you about the financial statements and
related matters.
Audit Procedures—Internal Controls
Our audit will, include obtaining an understanding of the entity and its environment, including internal
control, sufficient to assess the risks of material misstatement of the financial statements and to design the
nature, timing, and extent of further audit procedures. Tests of controls may be performed to test the
effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud
that are material to the financial statements and to preventing and detecting misstatements resulting from
illegal acts and other noncompliance matters that have a direct and material effect on the financial
statements. Our tests, if performed, will be less in scope than would be necessary to render an opinion on
internal control and, accordingly, no opinion will be expressed in our report on internal control issued
pursuant to Government Auditing Standards.
As required by OMB Circular A-133, we will perform tests of controls over compliance to evaluate the
effectiveness of the design and operation of controls that we consider relevant to preventing or detecting
material noncompliance with compliance requirements applicable to each major federal award program.
However, our tests will be less in scope than would be necessary to render an opinion on those controls
and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to OMB
Circular A-133.
An audit is not designed to provide assurance on internal control or to identify ,significant deficiencies.
However, during the audit, we will communicate to management and those charged, with governance
internal control related matters that are required to be communicated under AICPA professional
standards, Government Auditing Standards, and OMB Circular A-133.
Audit Procedures—Compliance
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we will perform tests of the City of Round Rock, Texas' compliance with applicable laws
and regulations and the provisions of contracts and agreements, including grant agreements. However, the
objective of those procedures Will not be to provide an opinion on overall compliance and we will not
express such an opinion in our report on compliance issued pursuant to Government Auditing Standards.
OMB Circular A-133 requires that we also plan and perform the audit to obtain reasonable assurance
about whether the auditee has complied with applicable laws and regulations and the provisions of
contracts and grant agreements applicable to major programs. Our procedures will consist of tests of
transactions and other applicable procedures described in the OMB Circular A-133 Compliance
Supplement and related addenda for the types of compliance requirements that could have a direct and
material effect on each of City of Round Rock, Texas' major programs. The purpose of those procedures
will be to express an opinion on the City of Round Rock, Texas' compliance with requirements applicable
to each of its major programs in our report on compliance issued pursuant to OMB Circular A-133.
City of Round Rock, Texas
Page Six •
Engagement Administration, Fees, and Other
We may from time to time, and depending on the circumstances, use third -party service providers in
serving your account. We may share confidential information about you with these service providers, but
remain committed to maintaining the confidentiality and security of your information. Accordingly, we
maintain internal policies, procedures, and safeguards to protect the confidentiality of your personal
information. In addition, we will secure confidentiality agreements with all service providers to maintain
the confidentiality of your information and we will take reasonable precautions to determine that they
have appropriate procedures in place to prevent the unauthorized release of your confidential information
to others. In the event that we are unable to secure an appropriate confidentiality, agreement, you will be
asked to provide your consent prior to the sharing of your confidential information with the third -party
service provider. Furthermore, we will remain responsible for the work provided by any such third -party
service providers.
We understand that your employees will prepare all cash, accounts receivable, or other confirmations we
request and will locate any documents selected by us for testing.
At the conclusion of theengagement, we will complete the appropriate sections of the Data Collection
Foim that summarizes our audit findings. It is management's responsibility to submit the reporting
package (including financial statements, schedule of expenditures of federal awards, summary schedule of
prior audit findings, auditors' reports, and corrective action plan) along with the Data Collection Form to
the federal audit clearinghouse. We will coordinate with you the electronic submission and certification.
If applicable, we will provide copies of our report for you to include with the reporting package you will
submit to pass-through entities. The Data Collection Form and the reporting package must be submitted
within the earlier of 30 days after receipt of the auditors' reports or nine months after the end of the audit
period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audits.
The audit documentation for this engagement is the property of Brockway, Gersbach, Franklin &
Niemeier, P. C. and constitutes confidential information. However, pursuant to authority given by law or
regulation, we may be requested to make certain audit documentation available to a federal agency
providing direct or indirect funding or the U.S. Government Accountability Office for purposes of a
quality review of the audit, to resolve audit findings, or to carry out oversight responsibilities. We will
notify you of any such request. If requested, access to such audit documentation will be provided under
the supervision of Brockway, Gersbach, Franklin & Niemeier, P. C. personnel. Furthermore, .upon
request, we may provide copies of selected audit documentation to the aforementioned parties. These
parties may intend, or decide, to distribute the copies or information contained therein to others, including
other governmental agencies.
City of Round Rock, Texas
Page Seven
The audit documentation for this engagement will be retained for a minimum of five years after the report
release or for any additional period requested by the City. If we .are aware that a federal awarding agency,
pass-through entity, or auditee is contesting an audit finding, we will contact the party(ies) contesting the
audit finding for guidance prior to destroying the audit documentation.
We expect to begin our audit on approximately July, 2010 and to issue our reports no later than March,
2011. Steve Niemeier is the engagement partner and is responsible for supervising the engagement and
signing the reports or authorizing another individual to sign them. Our fee for these services will be at
our standard hourly rates; we agree that our gross fee, including expenses, will not exceed $ 102,500. Our
standard hourly rates vary according to the degree of responsibility involved and the experience level of
the personnel assigned to your audit. Our invoices for these fees will be rendered each month as work
progresses and are payable on presentation. In accordance with our firm policies, work may be suspended
if your account becomes 30 days or more overdue and may not be resumed until your account is paid in
full. If we elect to terminate our services for nonpayment, our engagement will be deemed to have been
completed upon written notification of termination, even if we have not completed our report(s). You will
be obligated to compensate us for all time expended and to reimburse us for all out-of-pocket costs
through the date of termination. The above fee is based on anticipated cooperation from your personnel
and the assumption that unexpected circumstances will not be encountered during the audit. If significant
additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur
the additional costs.
We have attached Schedule A that provides the estimated audit fees for the next four years, providing the
City the option to extend this contract for a period of up to five years.
Government Auditing Standards require that we provide you with a copy of our most recent external peer
review report and any letter of comment, and any subsequent peer review reports and letters of comment
received during the period of the contract. Our 2009 peer review report accompanies this letter.
We appreciate the opportunity to be of service to the City of Round Rock, Texas arid believe this letter
accurately summarizes the significant terms of our engagement. If you have any questions, please let us
know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed
copy and return it to us.
Sincerely,
Brockway, Gersbach, Fkanklin & Niemeier, P. C.
RESPONSE:
This letter correctly sets forth the understanding of the City of Round Rock, Texas
By:
Title:
Date:
City of Round Rock, Texas
Page 2
Changes in 2010
Your audit engagement for 2010 will be similar to your 2009 engagement with two exceptions. A new
governmental sampling guide will be released in May and the American Recovery and Reinvestment
Act (ARRA) funds spent in 2010 will, by definition, increase audit risk.
This new sampling guide is anticipated to require all audit samples to reduce audit risk to 5% versus the
industry norm of 10% in past years. This one change can increase an audit sample by 30%. The use of
ARRA funds in 2010 will potentially increase the number of Federal programs that we will be required
to tested. In addition, there is an increase in the compliance supplements related to ARRA funds to
increase testing of these specific programs.
The increase in anticipated audit fees in the attached engagement letter is directly related to these two
additional audit requirements.
Commitment to Service
Our engagement letter is our commitment to perform the audit services for the year ending September
30, 2010. We appreciate this opportunity to propose on your engagement and welcome any comments
or questions you might have.
Respectfully submitted,
/k-n.cw.
Stephen H. Niemeier, C , CFP, President
BROCKWAY, GERSBAC , FRANKLIN & NIEMEIER, P.C.
ROUND ROCK, TEXAS
PURPOSE. PASSION. PROSPERITY:
Agenda Item No. 11A1.
City Council Agenda Summary Sheet
Agenda Caption:
Consider a resolution authorizing the Mayor to execute a Consulting Services Agreement
with Brockway, Gersbach, Franklin, and Neimeier, P.C. for the City's financial and
compliance audit.
Meeting Date: June 24, 2010
Department: Finance
Staff Person making presentation: Cheryl Delaney
Finance Director
Item Summary:
The audit provides an independent examination of financial records, activities and operations to access internal
control practices, compliance with regulations, grant terms, bond covenants, contractual requirements and fairness
of presentation of financial information.
The recommended firm will also provide valuable ideas and observations intended to help achieve the City's
objectives in maintaining adequate financial controls, policies, and procedures.
Strategic Plan Relevance:
8.0 Maintain and enhance public confidence, satisfaction and trust in City Government.
Cost: $102,500.00
Source of Funds: General and Utility Funds
Date of Public Hearing (if required): N/A
Recommended Action: Staff recommends approval
EXECUTED
DOCUMENT
FOLLOWS
CITY OF ROUND ROCK AGREEMENT FOR CONSULTING SERVICES
FOR FINANCIAL AND COMPLIANCE AUDIT SERVICES WITH
BROCKWAY, GERSBACH, FRANKLIN & NIEMEIER, P.C.
THE STATE OF TEXAS
CITY OF ROUND ROCK
COUNTY OF WILLIAMSON
COUNTY OF TRAVIS
§
KNOW ALL BY THESE PRESENTS:
THIS AGREEMENT for professional consulting services for financial and compliance
audit services (the "Agreement") is made by and between the CITY OF ROUND ROCK,
TEXAS, a home -rule municipality with offices located at 221 East Main Street, Round Rock,
Texas 78664-5299 (the "City") and BROCKWAY, GERSBACH, FRANKLIN & NIEMEIER,
P.C., Certified Public Accountants, with principal offices located at Post Office Box 4083,
Temple, Texas 76505-4083 (the "Consultant" or "Brockway").
RECITALS:
WHEREAS, City has determined that there is a need for the delineated services; and
WHEREAS, City desires to contract for such professional services; and
WHEREAS, the parties desire to enter into this Agreement to set forth in writing their
respective rights, duties, and obligations hereunder;
NOW, THEREFORE, WITNESSETH:
That for and in consideration of the mutual promises contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is
mutually agreed between the parties as follows:
1.01 EFFECTIVE DATE, DURATION, AND TERM
This Agreement shall be effective on the date it has been signed by each party hereto, and
shall remain in full force and effect unless and until it expires by operation of the term stated
herein, or until terminated or extended as provided herein.
The term of this Agreement shall be until full and satisfactory completion of the audit
services for the year ended September 30, 2010, and until full and satisfactory completion of the
work specified herein is achieved, but in no event later than one (1) year from the effective date
of this Agreement.
City reserves the right to review the Agreement at any time, and may elect to terminate
this Agreement with or without cause or may elect to continue.
0019353 Ujkg
2.01 CONTRACT AMOUNT
In consideration for the professional consulting services to be performed by Consultant,
City agrees to pay Consultant a total sum not to exceed One Hundred Two Thousand Five
Hundred and No/100 Dollars ($102,500.00), in payment for services and the scope of services
deliverables as delineated herein and in attached exhibits. This amount includes reimbursable
expenses eligible for payment under this Agreement.
3.01 SCOPE OF SERVICES
For purposes of this Agreement, Consultant has issued its scope of services for the
assignments delineated herein, and such scope of services is recited in engagement
correspondence from Brockway, Gersbach, Franklin & Niemeier, P.C. dated April 29, 2010, said
engagement correspondence being marked Exhibit "A" and attached hereto and incorporated
herein by reference for all purposes. This Agreement shall evidence the entire understanding and
agreement between the parties and shall supersede any prior proposals, correspondence or
discussions. This Agreement shall take precedence in every instance over any conflicting
provisions contained in Exhibit "A." Consultant shall satisfactorily provide all services and
deliverables described under the referenced scope of services within the contract term specified
herein. Consultant's undertakings shall be limited to performing services for City and/or advising
City concerning those matters on which Consultant has been specifically engaged. Consultant
shall perform its services in accordance with this Agreement and in accordance with the
referenced scope of services. Consultant shall perform its services in a professional and
workmanlike manner.
Consultant shall not undertake work that is beyond the scope of services set forth in
Exhibit "A" and herein. However, either party may make written requests for changes to the
scope of services. To be effective, a change to the scope of services must be negotiated and
agreed to in all relevant details, and must be embodied in a valid Supplemental Agreement as
described herein.
4.01 PAYMENT FOR SERVICES; NO REIMBURSABLE EXPENSES
Payment for Services: In consideration for the consulting services to be performed by
Consultant, City agrees to pay Consultant the following "Payment for Services:"
Fees for the listed deliverables in the total arnount of $102,500.00 shall be paid by City in
the following manner: monthly as properly invoiced, in accordance with the Texas Prompt
Payment Act.
Payment for Reimbursable Expenses: No additional payment for reimbursable
expenses, in excess of the delineated not -to -exceed amount, is authorized under this Agreement.
Not -to -Exceed Total Payment for Services: Unless subsequently changed by
Supplemental Agreernent, Consultant's total compensation for consulting services hereunder
shall not exceed $102,500.00. This amount represents the absolute limit of City's liability to
2
Consultant hereunder unless same shall be changed by Supplemental Agreement, and City shall
pay, strictly within the not -to -exceed sum recited herein, Consultant's professional fees for work
done on behalf of City.
Deductions: No deductions shall be made for Consultant's compensation on account of
penalty, liquidated damages or other sums withheld from payments to Consultant.
Additions: No additions shall be made to Consultant's compensation based upon project
claims, whether paid by City or denied.
5.01 SUPPLEMENTAL AGREEMENT
The terms of this Agreement may be modified by written Supplemental Agreement
hereto, duly authorized by City Council or by the City Manager, if City determines that there has
been a significant change in (1) the scope, complexity, or character of the services to be
performed; or (2) the duration of the work. Any such Supplemental Agreement must be
executed by both parties within the period specified as the term of this Agreement. Consultant
shall not perform any work or incur any additional costs prior to the execution, by both parties,
of such Supplemental Agreement. Consultant shall make no claim for extra work done or
materials furnished unless and until there is full execution of any Supplemental Agreement, and
City shall not be responsible for actions by Consultant nor for any costs incurred by Consultant
relating to additional work not directly authorized by Supplemental Agreement.
6.01 INVOICE REQUIREMENTS; TERMS OF PAYMENT
Invoices: To receive payment under this Agreement, Consultant shall prepare and
submit detailed progress invoices to City, in accordance with the delineation contained herein,
for services rendered. Such invoices for professional services shall track the referenced scope of
services, and shall detail the services performed, along with documentation for each service
performed. Payment to Consultant shall be made on the basis of the invoices submitted by
Consultant and approved by City. Such invoices shall conform to the schedule of services and
costs in connection therewith.
Should additional backup material be requested by City relative to service deliverables,
Consultant shall comply promptly. In this regard, should City determine it necessary,
Consultant shall make all records and books relating to this Agreement available to City for
inspection and auditing purposes.
Payment of Invoices: City reserves the right to correct any error that may be discovered
in any invoice that may have been paid to Consultant and to adjust same to meet the
requirements of this Agreement. Following approval of an invoice, City shall endeavor to pay
Consultant promptly, but no later than the time period required under the Texas Prompt Payment
Act. Under no circumstances shall Consultant be entitled to receive interest on payments which
are late because of a good faith dispute between Consultant and City or because of amounts
which City has a right to withhold under this Agreement or state law. City shall be responsible
for any sales, gross receipts or similar taxes applicable to the services, but not for taxes based on
Consultant's net income.
3
7.01 REQUIRED DRAFT REPORTS AND FINAL REPORT
Consultant agrees to provide City with draft reports and a detailed final written report,
together with all information gathered and materials developed during the course of the project.
Consultant agrees to provide City with additional bound copies of the final written report,
if and as requested, with the right to make additional copies being at the sole election of City.
All copies of the written final report will be to specifications as delineated by City.
8.01 LIMITATION TO SCOPE OF SERVICES
Consultant and City agree that the scope of services to be performed is enumerated in
Exhibit "A" and herein, and inay not be changed without the express written agreement of the
parties. Notwithstanding anything herein to the contrary, the parties agree that City retains
absolute discretion and authority for all funding decisions, such to be based solely on criteria
accepted by City which may be influenced by but not be dependent on Consultant's work.
9.01 NON -APPROPRIATION AND FISCAL FUNDING
This Agreement is a commitment of City's current revenues only. It is understood and
agreed that City shall have the right to terminate this Agreement at the end of any City fiscal year
if the governing body of City does not appropriate funds sufficient to purchase the services as
determined by City's budget for the fiscal year in question. City may effect such termination by
giving Consultant a written notice of termination at the end of its then -current fiscal year.
10.01 PROMPT PAYMENT POLICY
In accordance with Chapter 2251, V.T.C.A., Texas Government Code, any payment to be
made by City to Consultant will be made within thirty (30) days of the date City receives goods
under this Agreement, the date the performance of the services under this Agreement are
completed, or the date City receives a correct invoice for the goods or services, whichever is
later. Consultant may charge interest on an overdue payment at the "rate in effect" on September
1 of the fiscal year in which the payment becomes overdue, in accordance with V.T.C.A., Texas
Government Code, Section 2251.025(b). This Prompt Payment Policy does not apply to
payments made by City in the event:
A. There is a bona fide dispute between City and Consultant, a contractor,
subcontractor, or supplier about the goods delivered or the service performed that
causes the payment to be late; or
B. There is a bona fide dispute between Consultant and a subcontractor or between a
subcontractor and its supplier about the goods delivered or the service performed
that causes the payment to be late; or
C. The terms of a federal contract, grant, regulation, or statute prevent City from
making a timely payment with federal funds; or
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D. The invoice is not mailed to City in strict accordance with any instruction on the
purchase order relating to the payment.
11.01 TERMINATION; DEFAULT
Termination: It is agreed and understood by Consultant that City inay terminate this Agreement
for the convenience of City, upon fifteen (15) days' written notice to Consultant, with the
understanding that immediately upon receipt of said notice all work being performed under this
Agreement shall cease. Consultant shall invoice City for work satisfactorily completed and shall
be compensated in accordance with the terms hereof for work accomplished prior to the receipt
of said notice of termination. Consultant shall not be entitled to any lost or anticipated profits for
work terminated under this Agreement. Unless otherwise specified in this Agreement, all data,
information, and work product related to this project shall become the property of City upon
termination of this Agreement, and shall be promptly delivered to City in a reasonably organized
form without restriction on future use, subject to the conditions set forth herein. Should City
subsequently contract with a new consultant for continuation of service on the project,
Consultant shall cooperate in providing information.
Termination of this Agreement shall extinguish all rights, duties, and obligations of City
and the terminated party to fulfill contractual obligations. Termination under this section shall
not relieve the terminated party of any obligations or liabilities which occurred prior to
termination.
Nothing contained in this section shall require City to pay for any work which it deems
unsatisfactory or which is not performed in compliance with the terms of this Agreement.
Default: Either party may terminate this Agreement, in whole or in part, for default if
the party provides the other party with written notice of such default and the other fails to
satisfactorily cure such default within ten (10) business days of receipt of such notice (or a
greater time if agreed upon between the parties).
If default results in termination of this Agreement, then City shall give consideration to
the actual costs incurred by Consultant in performing the work to the date of default. The cost of
the work that is useable to City, the cost to City of employing another firm to complete the
useable work, and other factors will affect the value to City of the work performed at the time of
default. Neither party shall be entitled to any lost or anticipated profits for work terminated for
default hereunder.
The termination of this Agreement for default shall extinguish all rights, duties, and
obligations of the terminating party and the terminated party to fulfill contractual obligations.
Termination under this section shall not relieve the terminated party of any obligations or
liabilities which occurred prior to termination.
Nothing contained in this section shall require City to pay for any work which it deems
unsatisfactory, or which is not performed in compliance with the terms of this Agreement.
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12.01 INDEPENDENT CONTRACTOR STATUS
Consultant is an independent contractor, and is not City's employee. Consultant's
employees or subcontractors are not City's employees. This Agreement does not create a
partnership, employer-employee, or joint venture relationship. No party has authority to enter
into contracts as agent for the other party. Consultant and City agree to the following rights
consistent with an independent contractor relationship:
(1)
Consultant has the right to perform services for others during the term hereof.
(2) Consultant has the sole right to control and direct the means, manner and method
by which it perfonns its services required by this Agreement.
(3)
Consultant has the right to hire assistants as subcontractors, or to use employees
to provide the services required by this Agreement.
(4) Consultant or its employees or subcontractors shall perform services required
hereunder, and City shall not hire, supervise, or pay assistants to help Consultant.
(5)
Neither Consultant nor its employees or subcontractors shall receive training from
City in skills necessary to perform services required by this Agreement.
(6) City shall not require Consultant or its employees or subcontractors to devote full
time to performing the services required by this Agreement.
Neither Consultant nor its employees or subcontractors are eligible to participate
in any employee pension, health, vacation pay, sick pay, or other fringe benefit
plan of City.
(7)
13.01 NON -SOLICITATION
Except as may be otherwise agreed in writing, during the term of this Agreement and for
twelve (12) months thereafter, neither City nor Consultant shall offer employment to or shall
employ any person employed then or within the preceding twelve (12) months by the other or
any affiliate of the other if such person was involved, directly or indirectly, in the performance of
this Agreement. This provision shall not prohibit the hiring of any person who was solicited
solely through a newspaper advertisement or other general solicitation.
14.01 CITY'S RESPONSIBILITIES
Full information: City shall provide full information regarding project requirements.
City shall have the responsibility of providing Consultant with such documentation and
information as is reasonably required to enable Consultant to provide the services called for.
City shall require its employees and any third parties who are otherwise assisting, advising or
representing City to cooperate on a timely basis with Consultant in the provision of its services.
Consultant may rely upon written information provided by City and its employees and agents as
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accurate and complete. Consultant may rely upon any written directives provided by City or its
designated representative concerning provision of services as accurate and complete.
Required materials: Consultant's performance requires receipt of all requested
information reasonably necessary to provision of services. Consultant agrees, within ten (10)
days of the effective date of this Agreement, to provide City with a comprehensive and detailed
information request list, if any.
15.01 CONFIDENTIALITY; AND MATERIALS OWNERSHIP
Any and all programs, data, or other materials furnished by City for use by Consultant in
connection with services to be performed under this Agreement, and any and all data and
information gathered by Consultant, shall be held in confidence by Consultant as set forth
hereunder. Each party agrees to take reasonable measures to preserve the confidentiality of any
proprietary or confidential information relative to this Agreement, and to not make any use
thereof other than for the performance of this Agreement, provided that no claire may be made
for any failure to protect information that occurs more than three (3) years after the end of this
Agreement.
The parties recognize and understand that City is subject to the Texas Public Information
Act and its duties run in accordance therewith.
All data relating specifically to City's business and any other information which
reasonably should be understood to be confidential to City is confidential information of City.
Consultant's proprietary software, tools, methodologies, techniques, ideas, discoveries,
inventions, know-how, and any other information which reasonably should be understood to be
confidential to Consultant is confidential information of Consultant. City's confidential
information and Consultant's confidential information is collectively referred to as "Confidential
Information." Each party shall use Confidential Information of the other party only in
furtherance of the purposes of this Agreement and shall not disclose such Confidential
Information to any third party without the other party's prior written consent, which consent
shall not be unreasonably withheld. Each party agrees to take reasonable measures to protect the
confidentiality of the other party's Confidential Information and to advise their employees of the
confidential nature of the Confidential Inforrnation and of the prohibitions herein.
Notwithstanding anything to the contrary contained herein, neither party shall be
obligated to treat as confidential any information disclosed by the other party (the "Disclosing
Party") which: (1) is rightfully known to the recipient prior to its disclosure by the Disclosing
Party; (2) is released by the Disclosing Party to any other person or entity (including
governmental agencies) without restriction; (3) is independently developed by the recipient
without any reliance on Confidential Information; or (4) is or later becomes publicly available
without violation of this Agreement or may be lawfully obtained by a party from any non-party.
Notwithstanding the foregoing, either party will be entitled to disclose Confidential
Information of the other to a third party as may be required by law, statute, rule or regulation,
including subpoena or other similar form of process, provided that (without breaching any legal
7
or regulatory requirement) the party to whom the request is made provides the other with prompt
written notice and allows the other party to seek a restraining order or other appropriate relief.
Subject to Consultant's confidentiality obligations under this Agreement, nothing herein
shall preclude or limit Consultant from providing similar services for other clients.
Neither the City nor Consultant will be liable to the other for inadvertent or accidental
disclosure of Confidential Information if the disclosure occurs notwithstanding the party's
exercise of the same level of protection and care that such party customarily uses in safeguarding
its own proprietary and confidential information.
Notwithstanding anything to the contrary in this Agreement, City will own as its sole
property all written materials created, developed, gathered, or originally prepared expressly for
City and delivered to City under the terms of this Agreement (the "Deliverables"); and
Consultant shall own any general skills, know-how, expertise, ideas, concepts, methods,
techniques, processes, software, or other similar information which may have been discovered,
created, developed or derived by Consultant either prior to or as a result of its provision of
services under this Agreement (other than the Deliverables). Consultant's working papers and
Consultant's Confidential Information (as described herein) shall belong exclusively to
Consultant. City shall have a non-exclusive, non -transferable license to use Consultant's
Confidential Information for City's own internal use and only for the purposes for which they are
delivered to the extent that they form part of the Deliverables.
16.01 WARRANTIES
Consultant represents that all services performed hereunder shall be performed consistent
with generally prevailing professional or industry standards, and shall be performed in a
professional and workmanlike manner. Consultant shall re -perform any work not in compliance
with this representation. CONSULTANT DISCLAIMS ALL OTHER WARRANTIES
EXPRESS OR IMPLIED INCLUDING BUT NOT LIMITED TO THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
17.01 LIMITATION OF LIABILITY
Should any of Consultant's services not conform to the requirements of City or of this
Agreement, then and in that event City shall give written notification to Consultant; thereafter,
(a) Consultant shall either promptly re -perform such services to City's satisfaction at no
additional charge, or (b) if such deficient services cannot be cured within the cure period set
forth herein, then this Agreement may be terminated for default.
In no event will Consultant be liable for any loss, damage, cost or expense attributable to
negligence, willful misconduct or misrepresentations by City, its directors, employees or agents.
In no event shall Consultant be liable to City, by reason of any act or omission relating to
the services provided under this Agreement (including the negligence of Consultant), whether a
claim be in tort, contract or otherwise, (a) for any consequential, indirect, lost profit, punitive,
8
special or similar damages relating to or arising from the services, or (b) in any event, in the
aggregate, for any amount in excess of the total professional fees paid by City to Consultant
under this Agreement, except to the extent determined to have resulted from Consultant's gross
negligence, willful misconduct or fraudulent acts relating to the service provided hereunder.
18.01 ASSIGNMENT AND DELEGATION
The parties each hereby bind themselves, their successors, assigns and legal
representatives to each other with respect to the terms of this Agreement. Neither party may
assign any rights or delegate any duties under this Agreement without the other party's prior
written approval, which approval shall not be unreasonably withheld.
19.01 LOCAL, STATE AND FEDERAL TAXES
Consultant shall pay all income taxes, and FICA (Social Security and Medicare taxes)
incurred while performing services under this Agreement. City will not do the following:
(1) Withhold FICA from Consultant's payments or make FICA payments on its
behalf;
(2) Make state and/or federal unemployment compensation contributions on
Consultant's behalf; or
(3)
Withhold state or federal income tax from any of Consultant's payments.
If requested, City shall provide Consultant with a certificate from the Texas State
Comptroller indicating that City is a non-profit corporation and not subject to State of Texas
Sales and Use Tax.
20.01 INSURANCE
Insurance. Consultant, at Consultant's sole cost, shall have and maintain during the
term of this Agreement professional liability insurance coverage in the minimum amount of One
Million Dollars from a company authorized to do insurance business in Texas and otherwise
acceptable to City.
Insurance Policy Endorsements. Each insurance policy hereunder shall include the
following conditions by endorsement to the policy:
(1) Each policy shall require that thirty (30) days prior to the expiration, cancellation,
non -renewal or any material change in coverage, a notice thereof shall be given to
City by mail to:
City Manager, City of Round Rock
221 East Main Street
Round Rock, Texas 78664
9
Consultant shall also notify City, within ten (10) days of receipt, of any notices of
expiration, cancellation, non -renewal, or material change in coverage it receives
from its insurer.
(2) Companies issuing the insurance policies shall have no recourse against City for
payment of any premiums or assessments for any deductibles which all are at the
sole responsibility and risk of Consultant.
Terms "the City" or "the City of Round Rock" shall include all authorities, boards,
commissions, departments, and officers of City and individual members, employees
and designated agents in their official capacities, or while acting on behalf of the
City of Round Rock.
(4) The policy clause "Other Insurance" shall not apply to any insurance coverage
currently held by City, to any future coverage, or to City's Self -Insured Retentions
of whatever nature.
(3)
(5)
Consultant and City mutually waive subrogation rights each may have against the
other for loss or damage, to the extent same is covered by the proceeds of insurance.
Cost of Insurance. The cost of all insurance required herein to be secured and
maintained by Consultant shall be borne solely by Consultant, with certificates of insurance
evidencing such minimum coverage in force to be filed with City.
21.01 COMPLIANCE WITH LAWS, CHARTER AND ORDINANCES
Consultant, its consultants, agents, employees and subcontractors shall use best efforts to
comply with all applicable federal and state laws, the Charter and Ordinances of the City of
Round Rock, as amended, and with all applicable rules and regulations promulgated by local,
state and national boards, bureaus and agencies. Consultant shall further obtain all permits,
licenses, trademarks, or copy.rights .required. in the performance of the services contracted for
herein, and same shall belong solely to City at the expiration of the term of this Agreement.
22.01 FINANCIAL INTEREST PROHIBITED
Consultant covenants and represents that Consultant, its officers, employees, agents,
consultants and subcontractors will have no financial interest, direct or indirect, in the purchase
or sale of any product, materials or equipment that will be recommended or required hereunder.
23.01 DESIGNATION OF REPRESENTATIVES
The City hereby designates the following representative(s) authorized to act in its behalf
with regard to this Agreement:
City Manager James Nuse, P.E.
City of Round Rock
221 East Main Street
Round Rock, Texas 78664-5299
10
Consultant hereby designates the following representative authorized to act in its behalf
with regard to this Agreement:
Steve Niemeier, Engagement Partner
Brockway, Gersbach, Franklin & Niemeier, P.C.
Post Office Box 4083
Temple, Texas 76505-4083
Telephone: (254) 773-9907
Website: www.templecpa.com
24.01 NOTICES
All notices and other communications in connection with this Agreement shall be in
writing and shall be considered given as follows:
(1) When delivered personally to recipient's address as stated herein; or
(2) Three (3) days after being deposited in the United States mail, with postage
prepaid to the recipient's address as stated in this Agreement.
Notice to Consultant:
Brockway, Gersbach, Franklin & Niemeier, P.C.
Post Office Box 4083
Temple, Texas 76505-4083
Notice to City:
City Manager, City of Round Rock
221 East Main Street
Round Rock, TX 78664
AND TO:
Stephan L. Sheets, City Attorney
309 East Main Street
Round Rock, TX 78664
Nothing contained in this section shall be construed to restrict the transmission of routine
communications between representatives of City and Consultant.
25.01 APPLICABLE LAW; ENFORCEMENT AND VENUE
This Agreement shall be enforceable in Round Rock, Texas, and if legal action is
necessary by either party with respect to the enforcement of any or all of the terms or conditions
herein, exclusive venue for same shall lie in Williamson County, Texas. This Agreement shall
be governed by and construed in accordance with the laws and court decisions of Texas.
11
26.01 EXCLUSIVE AGREEMENT
The terms and conditions of this Agreement, including exhibits, constitute the entire
agreement between the parties and supersede all previous communications, representations, and
agreements, either written or oral, with respect to the subject matter hereof. The parties
expressly agree that, in the event of any conflict between the terms of this Agreement and any
other writing, this Agreement shall prevail. No modifications of this Agreement will be binding
on any of the parties unless acknowledged in writing by the duly authorized governing body or
representative for each party.
27.01 DISPUTE RESOLUTION
If a dispute arises under this Agreement, the parties agree to first try to resolve the
dispute with the help of a mutually selected mediator. If the parties cannot agree on a mediator,
City shall select one mediator and Consultant shall select one mediator and those two mediators
shall agree upon a third mediator. Any costs and fees, other than attorney fees, associated with
the mediation shall be shared equally by the parties.
City and Consultant hereby expressly agree that no claims or disputes between the parties
arising out of or relating to this Agreement or a breach thereof shall be decided by any arbitration
proceeding, including without limitation, any proceeding under the Federal Arbitration Act (9
USC Section 1-14) or any applicable state arbitration statute.
28.01 FORCE MAJEURE
Notwithstanding any other provisions hereof to the contrary, no failure, delay or default
in performance of any obligation hereunder shall constitute an event of default or breach of this
Agreement, only to the extent that such failure to perform, delay or default arises out of causes
beyond control and without the fault or negligence of the party otherwise chargeable with failure,
delay or default; including but not limited to acts of God, acts of public enemy, civil war,
insurrection, riots, fires, floods, explosion, theft, earthquakes, natural disasters or other
casualties, strikes or other labor troubles, which in any way restrict the performance under this
Agreement by the parties.
Consultant shall not be deemed to be in default of its obligations to City if its failure to
perform or its substantial delay in performance is due to City's failure to timely provide
requested information, data, documentation, or other material necessary for Consultant to
perform its obligations hereunder.
29.01 SEVERABILITY
The invalidity, illegality, or unenforceability of any provision of this Agreement or the
occurrence of any event rendering any portion of provision of this Agreement void shall in no
way affect the validity or enforceability of any other portion or provision of this Agreement. Any
void provision shall be deemed severed from this Agreement, and the balance of this Agreement
shall be construed and enforced as if this Agreement did not contain the particular portion of
provision held to be void. The parties further agree to amend this Agreement to replace any
12
stricken provision with a valid provision that comes as close as possible to the intent of the
stricken provision. The provisions of this section shall not prevent this entire Agreement from
being void should a provision which is of the essence of this Agreement be determined void.
30.01 STANDARD OF CARE
Consultant represents that it is specially trained, experienced and competent to perform
all of the services, responsibilities and duties specified herein and that such services,
responsibilities and duties shall be performed, whether by Consultant or designated
subconsultants, in a manner acceptable to City and according to generally accepted business
practices.
31.01 GRATUITIES AND BRIBES
City may, by written notice to Consultant, cancel this Agreement without incurring any
liability to Consultant if it is determined by City that gratuities or bribes in the form of
entertainment, gifts, or otherwise were offered or given by Consultant or its agents or
representatives to any City officer, employee or elected representative with respect to the
performance of this Agreement. In addition, Consultant may be subject to penalties stated in
Title 8 of the Texas Penal Code.
32.01 RIGHT TO ASSURANCE
Whenever either party to this Agreement, in good faith, has reason to question the other
party's intent to perform hereunder, then demand inay be made to the other party for written
assurance of the intent to perform. In the event that no written assurance is given within the
reasonable time specified when demand is made, then and in that event the demanding party may
treat such failure as an anticipatory repudiation of this Agreement.
33.01 COMPLIANCE WITH LAWS, CHARTER AND ORDINANCES
Consultant, its agents, employees and subcontractors shall use best efforts to comply with
all applicable federal and state laws, the Charter and Ordinances of the City of Round Rock, as
amended, and with all applicable rules and regulations promulgated by local, state and national
boards, bureaus and agencies.
34.01 GENERAL AND MISCELLANEOUS
The section numbers and headings contained herein are provided for convenience only
and shall have no substantive effect on construction of this Agreement.
No delay or omission by either party in exercising any right or power shall impair such
right or power or be construed to be a waiver. A waiver by either party of any of the covenants
to be performed by the other or any breach thereof shall not be construed to be a waiver of any
succeeding breach or of any other covenant. No waiver of discharge shall be valid unless in
13
writing and signed by an authorized representative of the party against whom such waiver or
discharge is sought to be enforced.
This Agreement may be executed in multiple counterparts, any one of which shall be
considered an original of this document; and all of which, when taken together, shall constitute
one and the same instrument. City agrees to provide Consultant with one fully executed original.
IN WITNESS WHEREOF, City and Consultant have executed this Agreement on the
dates indicated.
Brockway, Gersbach, Franklin & Niemeier, P.C.
By:
Printed Name
Title:
Date Signed:
City of Round Rock, Texas
By: CJS
Printed Name: AK itA. Gr W
Title:
Date Signed: . Z • ( 0
For City, Attest:
By:
Sara L. White, City Secretary
For City, Approved as to Form:
By:
Stephan
l
. Sheets, City Attorney
14
BROCKWAY
GERSBACH
FRANKLIN &
NIEMI_IER,P.C.
CERTIFIED PUBLIC ACCOUNTANTS
April 29, 2010
City of Round Rock, Texas
221 E. Main Street
Round Rock, Texas 78664-5299
EXHIBIT
nA
We are pleased to confirm our understanding of the services we are to provide the City of Round Rock,
Texas for the year ended September 30, 2010. We will audit the financial statements of the governmental
activities, the business -type activities, the aggregate discretely presented component units, each major
fund, and the aggregate remaining fund information, which collectively comprise the basic financial
statements of the City of Round Rock, Texas as of and for the year ended September 30, 2010.
Accounting standards generally accepted in the United States provide for certain required supplementary
information (RSI), such as management's discussion and analysis (MD&A), to supplement the City of
Round Rock, Texas' basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. As part of our engagement, we will apply certain limited
procedures to City of Round Rock, Texas' RSI in accordance with auditing standards generally accepted
in the United States of America. These limited procedures will consist of inquiries of management
regarding the methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basic financial statements. We will not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient evidence to
express an opinion or provide any assurance. The following RSI is required by generally accepted
accounting principles and will be subjected to certain limited procedures, but will not be audited:
1. Management's Discussion and Analysis
2. •Budgetary Comparison Schedules
3. GASB — Required Supplementary Pension and OPEB Schedules
Supplementary information other than RSI also accompanies the City of Round Rock, Texas' financial
statements. We will subject the following supplementary information to the auditing procedures applied
in our audit of the financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the
financial statements or to the financial statements themselves, and other additional procedures. in
accordance with auditing standards generally accepted in the United States of America and will provide
an opinion on it in relation to the financial statements as a whole:
1. Combining and Individual Fund Statements and Schedules
2. Schedule of Expenditures of Federal Awards
POST OFFICE BOX 4083 ■ TEMPLE, TEXAS 76505.4083 r 254.773.9907 ■ FAX 254.773.1570
W W W.TEMPLECPA.COM
City of Round Rock, Texas
Page Two
The following other information accompanying the financial statements will not be subjected to the
auditing procedures applied in our audit of the financial statements, and for which our auditor's report
will not provide an opinion or any assurance.
1. Introductory Section
2. Statistical Data
Audit Objectives
The objective of our audit is the expression of opinions as to whether your basic financial statements are
fairly presented, in all material respects, in conformity with U. S. generally accepted accounting
principles and to report on the fairness of the supplementary information referred to in the second
paragraph when considered in relation to the basic financial statements as a whole. The objective also
includes reporting on—
• Internal control related to the financial statements and compliance with laws, regulations, and the
provisions of contracts or grant agreements, noncompliance with which could have a material
effect on the financial statements in accordance with Government Auditing Standards.
• Internal control related to major programs and an opinion (or disclaimer of opinion) on
compliance with laws, regulations, and the provisions of contracts or grant agreements that could
have a direct and material effect on each major program in accordance with the Single Audit Act
Amendments of 1996 and OMB Circular A-133, Audits of States, Local Governments, and Non-'
Profit Organizations.
The reports on internal control and compliance will each include a statement that the report is intended
solely for the information and use of management, the body or individuals charged with governance,
others within the entity, specific legislative or regulatory bodies, federal awarding agencies, and if
applicable, pass-through entities and is not intended to be and should not be used by anyone other than
these specified parties.
Our audit will be conducted in accordance with auditing standards generally accepted in the United States
of America; the standards for financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; the Single Audit Act Amendments of 1996; and the provisions
of OMB Circular A-133, and will include tests of accounting records, a determination of major
program(s) in accordance with OMB Circular A-133, and other procedures we consider necessary to
enable us to express such opinions and to render the required reports. If our opinions on the financial
statements or the Single Audit compliance opinions are other than unqualified, we will fully discuss the
reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable to form
or have not formed opinions, we may decline to express opinions or to issue a report as a result of this
engagement.
City of Round Rock, Texas
Page Three
Management Responsibilities
Management is responsible for the basic financial statements and all accompanying information as well as
all representations contained therein. Management is also responsible for identifying government award
programs and understanding and complying with the compliance requirements, and for preparation of the
schedule of expenditures of federal awards in accordance with the requirements of OMB Circular A-133.
As part of the audit, we will assist with preparation of your financial statements, schedule of expenditures
of federal awards, and related notes. You are responsible for making alt management decisions and
performing all management functions relating to the financial statements, schedule of expenditures of
federal awards, and related notes and for accepting full responsibility for such decisions. You will be
required to acknowledge in the management representation letter our assistance with the preparation of
the financial statements and the schedule of expenditures of federal awards and that you have reviewed
and approved the fmancial statements, schedule of expenditures of federal awards, and related notes prior
to their issuance and have accepted responsibility for them. Further, you are required to designate an
individual with suitable skill, knowledge, or experience to oversee any nonaudit services we provide and
for evaluating the adequacy and results of those services and accepting responsibility for them.
Management is responsible for establishing and maintaining effective internal controls, including internal
controls over compliance, and for evaluating and monitoring ongoing activities, to help ensure that
appropriate goals and'objectives are met and that there is reasonable assurance that government programs
are administered in compliance with compliance requirements. You are also responsible for the selection
and application of accounting principles; for the fair presentation in the financial statements of the
respective financial position of the governmental activities, the business -type activities, the aggregate.
discretely presented component units, each major fund, and the aggregate remaining fund information of
the City of Round Rock, Texas and the respective changes in financial position and, where applicable,
cash flows in conformity with U.S. generally accepted accounting principles; and for compliance with
applicable laws and regulations and the provisions of contracts and grant agreements.
Management is also responsible for making all financial records and related information available to us
and for ensuring that management and financial information is reliable and properly recorded. Your
responsibilities also include including identifying significant vendor relationships in which the vendor has
responsibility for program compliance and for the accuracy and completeness of that information. Your
responsibilities include adjusting the financial statements to correct material misstatements and
confirming to us in the representation letter that the effects of any uncorrected misstatements aggregated
by us during the current engagement and pertaining to the latest period presented are immaterial, both
individually and in the aggregate, to the financial statements taken as a whole.
City of Round Rock, Texas
Page Four
You are responsible for the design and implementation of programs and controls to prevent and detect
fraud, and for informing us about all known or suspected fraud or illegal acts affecting the government
involving (1) management, (2) employees who have significant roles in internal control, and (3) others
where the fraud or illegal acts could have a material effect on the financial statements. Your
responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud
affecting the government received in communications from employees, former employees, grantors,
regulators, or others. In addition, you are responsible for identifying and ensuring that the entity complies
with applicable laws and regulations, contracts, agreements and grants. Additionally, as required by
OMB Circular A-133, it is management's responsibility to follow up and take corrective action on
reported audit findings and to prepare a summary schedule of prior audit findings and a corrective action
plan. You are responsible for the preparation of the supplementary information in conformity with U.S.
generally accepted accounting principles. You agree to include our report on the supplementary
information in any document that contains and indicates that we have reported on the supplementary
information. You also agree to present the supplementary information with the audited financial ,
statements.
Management is responsible for establishing and maintaining a process for tracking the status of audit
findings and recommendations. Management is also responsible for identifying for us previous financial
audits, attestation engagements, performance audits, or other studies related to the objectives discussed in
the Audit Objectives section of this letter. This responsibility includes relaying to us corrective actions
taken to address significant findings and recommendations resulting from those audits, attestation
engagements, performance audits, or studies. You are also responsible for providing management's views
on our current findings, conclusions, and recommendations, as well as your planned corrective actions,
for the report, and for the timing and format for providing that information.
Audit Procedures—General
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements; therefore, our audit will involve judgment about the number of transactions to be
examined and the areas to be tested. We will plan and perform the audit to obtain reasonable rather than
absolute assurance about whether the financial statements are free of material misstatement, whether from
(1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of lawsor
governmental regulations that are attributable to the entity or to acts by management or employees acting
on behalf of the entity. Because the determination of abuse is subjective, Government Auditing Standards
do not expect auditors to provide reasonable assurance of detecting abuse.
Because an audit is designed to provide reasonable, but not absolute assurance and because we will not
perform a detailed examination of all transactions, there is a risk that material misstatements or
noncompliance may exist and not be detected by us. In addition, an audit is not designed to detect
immaterial misstatements or violations of laws or governmental regulations that do not have a direct and
material effect on the financial statements or major programs. However, we will inform you of any
material errors and any fraudulent financial reporting or misappropriation of assets that comes to our
attention. We will also inform you of any violations of laws or governmental regulations that come to our
attention, unless clearly inconsequential and of any material abuse that comes to our attention. We will
include such matters in the reports required for a Single Audit. Our responsibility as auditors is limited to
the period covered by our audit and does not extend to any later periods for which we are not engaged as
auditors.
City of Round Rock, Texas
Page Five
Our procedures will include tests of documentary evidence supporting the transactions recorded in the
accounts, and may include tests df the physical existence of inventories, and direct confirmation of
receivables and certain other assets and liabilities by correspondence with selected individuals, funding
sources, creditors, and .financial institutions. We will request written representations from your attorneys
as part of the engagement, and they may bill you for responding to this inquiry. At the conclusionof our
audit, we will also require certain written representations from you about the financial statements and
related matters.
Audit Procedures—Internal Controls
Our audit will include obtaining an understanding of the entity and its environment, including internal
control, sufficient to assess the risks of material misstatement of the financial statements and to design the
nature, timing, and extent of further audit procedures. Tests of controls may be performed to test the
effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud
that are material to the financial statements and to preventing and detecting misstatements resulting from
illegal acts and other noncompliance matters that have a direct and material effect on the financial
statements. Our tests, if performed, will be less in scope than would be necessary to render an opinion on
internal control and, accordingly, no opinion will be expressed in our report on internal control issued
pursuant to Government Auditing Standards.
As required by OMB Circular A-133, we will perform tests of controls over compliance to evaluate the
effectiveness of the design and operation of controls that we consider relevant to preventing or detecting
material noncompliance with compliance requirements applicable to each major federal award program.
However, our tests will be less in scope than would be necessary to render an opinion on those controls
and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to OMB
Circular A-133.
An audit is not designed to provide assurance on internal control or to identify significant deficiencies.
However, during the audit, we will communicate to management and those charged with governance
internal control related matters that are required to be communicated under AICPA professional
standards, Government Auditing Standards, and OMB Circular A-133.
Audit Procedures—Compliance
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we will perform tests of the City of Round Rock, Texas' compliance with applicable laws
and regulations and the provisions of contracts and agreements, including grant agreements. However, the
objective of those procedures Will not be to provide an opinion on overall compliance and we will not
express such an opinion in our report on compliance issued pursuant to Government Auditing Standards.
OMB Circular A-133 requires that we also plan and perform the audit to obtain reasonable assurance
about whether the auditee has complied with applicable laws and regulations and the provisions of
contracts and grant agreements applicable to major programs. Our procedures will consist of tests of
transactions and other applicable procedures described in the OMB Circular A-133 Compliance
Supplement and related addenda for the types of compliance requirements that could have a direct and
material effect on each of City of Round Rock, Texas' major programs. The purpose of those procedures
will be to express an opinion on the City of Round Rock, Texas' compliance with requirements applicable
to each of its major programs in our report on compliance issued pursuant to OMB Circular A-133.
City of Round Rock, Texas
Page Six •
Engagement Administration, Fees, and Other
We may from time to time, and depending on the circumstances, use third -party service providers• in
serving your account. We may share confidential information about you with these service providers, but
remain committed to maintaining the confidentiality and security of your information. Accordingly, we
maintain internal policies, procedures, and safeguards to protect the confidentiality of your personal
information. In addition, we will secure confidentiality agreements with all service providers to maintain
the confidentiality of your information and we will take reasonable precautions to determine that they
have appropriate procedures in place to prevent the unauthorized release of your confidential information
to others. In the event that we are unable to secure an appropriate confidentiality, agreement, you will be
asked to provide your consent prior to the sharing of your confidential information with the third -party
service provider. Furthermore, we will remain responsible for the work provided by any such third -party
service providers.
We understand that your employees will prepare all cash, accounts receivable, or other confirmations we
request and will locate any documents selected by us for testing.
At the conclusion of the engagement, we will complete the appropriate sections of the Data Collection
Form that summarizes our audit findings. It is management's responsibility to submit the reporting
package (including financial statements, schedule of expenditures of federal awards, summary schedule of
prior audit findings, auditors' reports, and corrective action plan) along with the Data Collection Form to
the federal audit clearinghouse. We will coordinate with you the electronic submission and certification.
If applicable, we will provide copies of our report for you to include with the reporting package you will
submit to pass-through entities. The Data Collection Form and the reporting package must be submitted
within the earlier of 30 days after receipt of the auditors' reports or nine months after the end of the audit
period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audits.
The audit documentation for this engagement is the property of Brockway, Gersbach, Franklin &
Niemeier, P. C. and constitutes confidential information. However, pursuant to authority given by law or
regulation, we may be requested to make certain audit documentation available to a federal agency
providing direct or indirect funding or the U.S. Government Accountability Office for purposes of a
quality review of the audit, to resolve audit findings, or to carry out oversight responsibilities. We will
notify you of any such request. If requested, access to such audit documentation will be provided under
the supervision of Brockway, Gersbach, Franklin & Niemeier, P. C. personnel. Furthermore, upon
request, we may provide copies of selected audit documentation to the aforementioned parties. These
parties may intend, or decide, to distribute the copies or information contained therein to others, including
other governmental agencies.
City of Round Rock, Texas
Page Seven
The audit documentation for this engagement will be retained for a minimum of five years after the report
release or for any additional period requested by the City. If we are aware that a federal awarding agency,
pass-through entity, or auditee is contesting an audit finding, we will contact the party(ies) contesting the
audit finding for guidance prior to destroying the audit documentation.
We expect to begin our audit on approximately July, 2010 and to issue our reports no later than March,
2011. Steve Niemeier is the engagement partner and is responsible for supervising the engagement and
signing the reports or authorizing another individual to sign them. Our fee for these services will be at
our standard hourly rates; we agree that our gross fee, including expenses, will not exceed $ 102,500. Our
standard hourly rates vary according to the degree of responsibility involved and the experience level of
the personnel assigned to your audit. Our invoices for these fees will be rendered each month as work
progresses and are payable on presentation. In accordance with our firm policies, work may be suspended
if your account becomes 30 days or more overdue and may not be resumed until your account is paid in
full. If we elect to terminate our services for nonpayment, our engagement will be deemed to have been
completed upon written notification of termination, even if we have not completed our report(s). You will
be obligated to compensate us for all time expended and to reimburse us for all out-of-pocket costs
through the date of termination. The above fee is based on anticipated cooperation from your personnel
and the assumption that unexpected circumstances will not be encountered during the audit. If significant
additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur
the additional costs.
We have attached Schedule A that provides the estimated audit fees for the next four years, providing the
City the option to extend this contract for a period of up to five years.
Government Auditing Standards require that we provide you with a copy of our most recent external peer
review report and any letter of comment, and any subsequent peer review reports and letters of comment
received during the period of the contract. Our 2009 peer review report accompanies this letter.
We appreciate the opportunity to be of service to the City of Round Rock, Texas and believe this letter
accurately summarizes the significant terms of our engagement. If you have any questions, please let us
know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed
copy and return it to us.
Sincerely,
T1,01/414,47 -
Brockway, Gersbach, Fkanklin & Niemeier, P. C.
RESPONSE:
This letter correctly sets forth the understanding of the City of Round Rock, Texas
By:
Title:
Date:
City of Round Rock, Texas
Page 2
Changes in 2010
Your audit engagement for 2010 will be similar to your 2009 engagement with two exceptions. A new
governmental sampling guide will be released in May and the American Recovery and Reinvestment
Act (ARRA) funds spent in 2010 will, by definition, increase audit risk.
This new sampling guide is anticipated to require all audit samples to reduce audit risk to 5% versus the
industry norm of 10% in past years. This one change can increase an audit sample by 30%. The use of
ARRA funds in 2010 will potentially increase the number of Federal programs that we will be required
to tested. In addition, there is an increase in the compliance supplements related to ARRA funds to
increase testing of these specific programs.
The increase in anticipated audit fees in the attached engagement letter is directly related to these two
additional audit requirements.
Commitment to Service
Our engagement letter is our commitment to perform the audit services for the year ending September
30, 2010. We appreciate this opportunity to propose on your engagement and welcome any comments
or questions you might have.
Respectfully submitted,
Stephen H. Niemeier, C , CFP, President
BROCKWAY, GERSBAC , FRANKLIN & NIEMEIER, P.C.