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HomeMy WebLinkAboutResolution - 2005-R0263 - Contract For Franchise Fee Audit - BKD, LLP - 06_23_2005Resolution No. 2005-RO263 June 23, 2005 Item 34 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock, a Contract for franchise fee audit, by and between the City of Lubbock and BKD, LLP of Little Rock, Arkansas, and related documents. Said Contract is attached hereto and incorporated in this resolution as if fully set forth herein and shall be included in the minutes of the City Council. Passed by the City Council this 23rd da} ATTEST: Rebecca Garza, City APPROVED AS TO CONTENT: Jeff Sn bir ctor of Fiscal Operations APPROVED AS TO FORM: ohn M. Knight, sistanCity Attorney gs/ccdocs/res-Contract-BKD, LLP May 31, 2005 CONTRACT NO. 5 88 3 May 31, 2005 Victor Kilman, Purchasing and Contract Manager City of Lubbock, Texas 1625 13th Street, Room 204 P.O. Box 2000 Lubbock, Texas 79457 We are pleased to confirm the arrangements of our engagement and the nature of the services we will provide to the following specified users: the City of Lubbock, Texas and its franchises. OUR SERVICES AND THE RESPONSIBILITIES OF THE PARTIES We will apply the procedures contemplated in the attachment to this letter, which will be drafted, agreed -upon and approved, to certain franchisees and related franchise fee contracts with the City of Lubbock, Texas for the twenty-four month period ended May 31, 2005, in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of the requested procedures is solely the responsibility of the parties to be specified in our report. Consequently, we make no representation regarding the sufficiency of the procedures for the purpose for which the report has been requested or for any other purpose. Because we have not been engaged to conduct an examination, we will not express an opinion on whether the remitted franchise fees are proper. In addition, we have no obligation to perform any procedures beyond those contemplated in the attachment to this letter. Our engagement will not include a detailed examination of all transactions and cannot be relied upon to disclose misstatements that might exist due to error, fraud and illegal acts. However, we will inform you of any such matters, if material, that come to our attention. It should be understood that the management of the City of Lubbock, Texas and its franchisees are responsible for the proper recording of transactions and preparation of their financial statements. Management of the City of Lubbock, Texas and its franchisees are also responsible for establishing and maintaining effective internal control over financial reporting and setting the proper tone; creating and maintaining a culture of honesty and high ethical standards; and establishing appropriate controls to prevent, deter and detect fraud and illegal acts. Management of the City of Lubbock, Texas and its franchisees are also responsible for identifying and ensuring compliance with laws and regulations applicable to their activities and for establishing and maintaining effective internal control over compliance. 5000 Rogers Avenue, Suite 700 Fort Smith, AR 72903-2079 479 452-1040 Fax 479 452-5542 400 W. Capitol Avenue, Suite 2500 P.O. Box 3667 Little Rock, AR 72203-3667 501 372-1040 Fax 501 372.1250 bkd.com Beyond Your Numbers 200 E. 11th Avenue P.O. Box 8306 Pine Bluff, AR 71611-8306 870 534-9172 Fax 870 534-2146 A men of i Moons Fow&idlnte ha al Victor Kilman, Purchasing and Contract Manager City of Lubbock, Texas May 31, 2005 Page 2 We will submit a report summarizing the procedures performed and the results of those procedures. The report is intended solely for the information and use of the City of Lubbock, Texas, and is not intended to be and should not be used by anyone other than these specified parties. If, for any reason, we are unable to complete our procedures, we may decline to issue a report as a result of this engagement. OTHER SERVICES We may perform other services for you not covered by this engagement letter. You agree to assume full responsibility for the substantive outcomes of those services, including any findings that may result. You also acknowledge that those services are adequate for your purposes and that you will establish and monitor the performance of those services to ensure that they meet management's objectives. Any and all decisions involving management functions related to those services will be made by you, and you accept full responsibility for such decisions. We understand that you will designate a management -level individual to be responsible and accountable for overseeing the performance of those services, and that you will have determined this individual is qualified to conduct such oversight. ENGAGEMENT FEES Our fees will be based on time expended plus charges for travel, long-distance telephone, copies, etc. and are not expected to exceed $56,000. If the requested procedures exceed those anticipated our fees may increase. We will discuss any proposed increase with you before performing any increased work. We will issue progress billings during the course of our engagement, and our statements are due when received. Our engagement fee does not include any time for post -engagement consultation with your personnel or third parties, inquiries from regulators or testimony or deposition regarding any subpoena. Charges for such services will be billed separately. Our invoices are due within 30 days. If our invoices for this or any other engagement you may have with BKD are not paid when due, we may suspend or terminate our services for this or any other engagement. In the event our work is suspended or terminated as a result of nonpayment, you agree we will not be responsible for any consequences to you. Victor Kilman, Purchasing and Contract Manager City of Lubbock, Texas May 31, 2005 Page 3 OTHER ENGAGEMENT MATTERS AND LIMITATIONS The working papers for this engagement are the property of BKD. BKD will be required to make working papers available upon request to City and to respond to reasonable inquiries of successor auditors and to allow successor to review working papers relating to matters of continuing audit significance. City also acknowledges and grants assent that representatives of the cognizant or oversight agency or their designee, other government staffs and the U.S. General Accounting Office shall have access to the working papers upon their request; and that BKD shall maintain the working papers for a period of at least three years after the date of the report, or for a longer period if BKD is requested to do so by the cognizant or oversight agency. You agree that we have no legal responsibility to you in the event we provide such documents or information. During the course of BKD's engagement, BKD may accumulate records containing data, which should be reflected in the City's books and records. City will determine that all such data, if necessary, will be so reflected. Accordingly, City will not expect BKD to maintain copies of such records in BKD's possession. You agree to indemnify and hold harmless BKD and its personnel from any claims, liabilities, costs, and expenses relating to our services under this agreement attributable to false or incomplete representations by management, except to the extent determined to have resulted from the intentional or deliberate misconduct of BKD personnel. You agree that any dispute regarding this engagement will, prior to resorting to litigation, be submitted to mediation upon written request by either party. Both parties agree to try in good faith to settle the dispute in mediation. The American Arbitration Association, or another mutually agreeable mediator, will administer any such mediation in accordance with its Commercial Mediation Rules. The results of the mediation proceeding shall be binding only if each of us agrees to be bound. We will share any costs of mediation proceedings equally. No amendment, modification, or alteration of the terms of this agreement shall be binding unless such amendment, modification, or alteration is in writing, dated subsequent to this agreement, and duly executed by BKD and the City. If any provision of this agreement is declared invalid or unenforceable, no other provision of this agreement is affected and all other provisions remain in full force and effect. This engagement letter represents the entire agreement regarding the services described herein and supersedes all prior negotiations, proposals, representations or agreements, written or oral, regarding these services. It shall be binding on heirs, successors and assigns of you and BKD. Victor Kilman, Purchasing and Contract Manager City of Lubbock, Texas May 31, 2005 Page 4 BKD is a registered limited liability partnership under Missouri law. Under applicable professional standards, partners of BKD, LLP have the same responsibilities as do partners in a general accounting and consulting partnership with respect to conformance by themselves and other professionals in BKD with their professional and ethical obligations. However, unlike the partners in a general partnership, the partners in a registered limited liability partnership do not have individual civil liability, directly or indirectly, including by way of indemnification, contribution, assessment or otherwise, for any debts, obligations or liabilities of or chargeable to the registered limited liability partnership or each other, whether arising in tort, contract or otherwise. We will be pleased to discuss this letter with you at any time and look forward to the opportunity of serving you. If the above arrangements are acceptable to you, please sign the enclosed copy of this letter and return it to us. BKD, LLP ��, UP -P BY Xse�� o-4v�-e f Kevin Kemp, Pa ner The services and arrangements described in this letter are in accordance with our understanding and are acceptable to us. CITY OF LURBOCK. TEXAS BY AT EST: Marc McDougal, ayor DATE �t� OU5 ebecca Garza, CAty Secretary APPROVED AS TO CONTENT: Jeff Sny er, Director of Fisc perations APPROVED AS TO FORM: //-z--r) ooK 1! A n rl i v a t n r n n v