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HomeMy WebLinkAboutResolution - 2016-R0133 - BKD - 04/14/2016Item No.5.5 April 14,2016 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock is hereby authorized and directed to execute for and on behalf of the City of Lubbock an Agreement for an audit of annual financial statements by and between the City of Lubbock and BKD, LLP,of Dallas. Texas,which Agreement and any associated documents are attached hereto and made a part hereof for all intents and purposes.In addition thereto,the City Manager or a designated representative may execute engagement letters or other associated documents as required during the term of the Agreement. Passed bythe City Council on this 14th day of April ,2016. ATTEST: JlA^r^t.I-*"\<*-*s^r~c c——=^—t—\-— Rebecca Garza,City Se^relaYy APPROVED AS TO CONTENT: ^2 Quincy Wrjile<DeDeputy City Manager APPROVED AS TO FORM: my fcrSims,DerJulyCity Attorney RES.COLandBKD.LLP (3-29-16) glein^Robertson, mayor Resolution No. 2016-RO133 PROFESSIONAL SERVICES CONTRACT STATE OF TEXAS § COUNTY OF LUBBOCK § This Professional Service Agreement ( "Agreement') 2016-RO133 , is entered into this 14th day of April, 2016, is by and between the City of Lubbock (the "City"), a Texas home rule municipal corporation, and BKD, LLP, (the "Auditor"), a limited liability partnership. WITNESSETH WHEREAS, Auditor has a professional staff experienced and is qualified to provide professional Auditor services related to Activities, and will provide the services, as defined below, for the price provided herein, said price stipulated by City and Auditor to be a fair and reasonable price; and WHEREAS, the City desires to contract with Auditor to provide professional services related to the Activities desires to provide the Services related to same. NOW THEREFORE, for and in consideration of the terms, covenants and conditions set forth in this Contract, the City and Auditor hereby agree as follows: ARTICLE L TERM The term of this Contract commences on the Effective Date and continues without interruption for fiscal year ending September 30, 2016. If the Auditor determines that additional time is required to complete the Services, the City Manager, may , but is not obligated to, in his discretion, execute an agreement to grant up to an additional six (6) months of time so long as the amount of the consideration does not increase. An amendment to this Agreement resulting in an increase in the amount of the consideration must be approved by the City acting through its governing body. For the consideration herein expressed, the City is hereby granted an option to extend the term of this Contract, upon identical terms and conditions of this Agreement, for four (4) additional successive option periods of one (1) fiscal year each. Professional Services Agreement 2016 ARTICLE II. SERVICES AND COMPENSATION A. Auditor shall conduct all activities and within such timeframes as set forth on Exhibit "A", attached hereto (the "Services"). B. AUDITOR shall receive as consideration to be paid for the performance of the Services set forth in Exhibit "A", ARTICLE III. TERMINATION A. General. City may terminate this Contract, for any reason or convenience, upon thirty (30) days written notice to AUDITOR. In the event this Agreement is so terminated, the City shall only pay Auditor for services actually performed by Auditor up to the date Auditor is deemed to have received notice of termination, as provided herein. B. Termination and Remedies. In the event AUDITOR breaches any term and/or provision of this Contract, the City shall be entitled to exercise any right or remedy available to it by this Contract, at law, equity, or otherwise, including without limitation, termination of this Contract and assertion of an action for damages and/or injunctive relief. The exercise of any right or remedy shall not preclude the concurrent or subsequent exercise of any right or remedy and all rights and remedies shall be cumulative. ARTICLE IV. NON - ARBITRATION The City reserves the right to exercise any right or remedy available to it by law, contract, equity, or otherwise, including without limitation, the right to seek any and all forms of relief in a court of competent jurisdiction. Further, the City shall not be subject to any arbitration process prior to exercising its unrestricted right to seekjudicial remedy. The remedies set forth herein are cumulative and not exclusive, and may be exercised concurrently. To the extent of any conflict between this provision and another provision in, or related to, this Agreement, this provision shall control. ARTICLE V. REPRESENTATIONS AND WARRANTIES A. Existence. AUDITOR is a limited liability partnership organized, validly existing, and in good standing under the laws of the State of Texas and is qualified to carry on its business in the State of Texas. B. Power. AUDITOR has the power to enter into and perform this Contract and all other activities contemplated hereby. Professional Services Agreement 2016 C. Authorization. Execution, delivery, and performance of this Contract and the activities contemplated hereby have been duly and validly authorized by all the requisite action on the part of AUDITOR. This Contract constitutes legal, valid, and binding obligations of the AUDITOR and is enforceable in accordance with the terms thereof. D. Auditor. AUDITOR maintains a professional staff, and is familiar with all laws, rules, professional auditing and accounting standards and regulations, both state and federal, including, without limitation the applicable laws, regarding the Activities contemplated hereby. E. Performance. AUDITOR will and shall conduct all activities contemplated by this Contract in accordance with the standard of care, skill and diligence normally provided by a professional person in performance of similar professional Auditing services, and comply with all applicable laws, rules, and regulations, both state and federal, relating to professional Auditing services, as contemplated hereby. F. Use of Copyrighted Material. AUDITOR warrants that any materials provided by AUDITOR for use by City pursuant to this Contract shall not contain any proprietary material owned by any other party that is protected under the Copyright Act or any other law, statute, rule, order, regulation, ordinance or contractual obligation relating to the use or reproduction of materials. AUDITOR shall be solely responsible for ensuring that any materials provided by AUDITOR pursuant to this Contract satisfy this requirement and AUDITOR agrees to indemnify and hold City harmless from all liability or loss caused to City or to which City is exposed on account of AUDITOR's failure to perform this duty. ARTICLE VI. SCOPE OF WORK AUDITOR shall accomplish the following: Professional Auditing Services related to the Services, as provided in Exhibit "A", attached hereto and made a part hereof. ARTICLE VII. INDEPENDENT CONTRACTOR STATUS AUDITOR and City agree that AUDITOR shall perform the duties under this Contract as an independent contractor and shall be considered as independent contractor under this Agreement and/or in its activities hereunder for all purposes. AUDITOR has the sole discretion to determine the manner in which the Services are to be performed. During the performance of the Services under this Agreement, Auditor and Auditor's employees, will not be considered, for any purpose, employees or agents of the City within the meaning or the application of any federal, state or local law or regulation, including without limitation, laws, rules or regulations regarding or related to unemployment insurance, old age benefits, workers compensation, labor, personal injury or taxes of any kind. Professional Services Agreement 2016 3 ARTICLE VIII. INSURANCE Auditor shall procure and carry, at its sole cost and expense through the life of this Agreement, except as otherwise provided herein, insurance protection as hereinafter specified, in form and substance satisfactory to City, carried with an insurance company authorized to transact business in the state of Texas, covering all aspects and risks of loss of all operations in connection with this Agreement, including without limitation, the indemnity obligations set forth herein. Auditor shall obtain and maintain in full force and effect during the term of this Agreement, commercial general liability, professional liability and automobile liability coverage for non -owned and hired vehicles with insurance carriers admitted to do business in the state of Texas. The insurance companies must carry a Best's Rating of A-VII or better. Except for Professional Liability, the policies will be written on an occurrence basis, subject to the following minimum limits of liability: Commercial General Liability: Per Occurrence Single Limit: $1,000,000 General Aggregate Limit: $2,000,000 Professional Liability: Combined Single Limit: $1,000,000 Automobile Liability: Combined Single Limit for any auto: $1,000,000 Per Occurrence The City shall be listed as a primary and noncontributory additional insured with respect to the Automobile Liability and Commercial General Liability and shall be granted a waiver of subrogation under those policies. Auditor shall provide a Certificate of Insurance to the City as evidence of coverage. Auditor shall provide 30 days notice of cancellation. A copy of the additional insured endorsement and waiver of subrogation attached to the policy shall be included in the Certificate. Auditor shall elect to obtain worker's compensation coverage pursuant to Section 406.002 of the Texas Labor Code. Further, Auditor shall maintain said coverage throughout the term of this Agreement and shall comply with all provisions of Title 5 of the Texas Labor Code to ensure that the Auditor maintains said coverage. The Auditor may maintain Occupational Accident and Disability Insurance in lieu of Worker's Compensation. In either event, the policy must be endorsed to include a waiver of subrogation in favor of the City. If at any time during the life of the Agreement or any extension hereof, Auditor fails to maintain the required insurance in full force and effect, Auditor shall be in breach hereof and all work under the Agreement shall be discontinued immediately. Professional Services Agreement 2016 Notwithstanding anything contained herein to the contrary, the professional liability policy shall be maintained at Auditor's sole cost and expense. The retroactive date shall be no later than the commencement of the performance of this Contract. The provisions of this Article VIII shall survive the termination or expiration of this Agreement. ARTICLE Di. CONFIDENTIALITY AUDITOR shall retain all information received from or concerning the City and the City's business in strictest confidence and shall not reveal such information to third parties without prior written consent of the City, unless otherwise required by law. ARTICLE X. INDEMNITY AUDITOR SHALL INDEMNIFY AND SAVE HARMLESS THE CITY OF LUBBOCK AND ITS ELECTED OFFICIALS, OFFICERS, AGENTS, AND EMPLOYEES FROM ALL SUITS, ACTIONS, LOSSES, DAMAGES, CLAIMS, OR LIABILITY OF ANY KIND, CHARACTER, TYPE, OR DESCRIPTION, INCLUDING WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ALL EXPENSES OF LITIGATION, COURT COSTS, AND ATTORNEY'S FEES, FOR INJURY OR DEATH TO ANY PERSON, OR INJURY TO ANY PROPERTY, RECEIVED OR SUSTAINED BY ANY PERSON OR PERSONS OR PROPERTY, TO THE EXTENT ARISING OUT OF, RELATED TO OR OCCASIONED BY, THE NEGLIGENT ACTS OF AUDITOR, ITS AGENTS, EMPLOYEES, AND/OR SUBCONSULTANTS, RELATED TO THE PERFORMANCE, OPERATIONS OR OMISSIONS UNDER THIS CONTRACT AND/OR THE USE OR OCCUPATION OF CITY OWNED PROPERTY. THE INDEMNITY OBLIGATION PROVIDED HEREIN SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS AGREEMENT. ARTICLE XI. COMPLIANCE WITH APPLICABLE LAWS AUDITOR shall comply with all applicable federal, state and local laws, statutes, ordinances, rules and regulations relating, in any way, manner or form, to the activities under this Contract, and any amendments thereto. ARTICLE XH. NOTICE A. General. Whenever notice from AUDITOR to City or City to AUDITOR is required or permitted by this Contract and no other method of notice is provided, such notice shall be given by (1) actual delivery of the written notice to the other party by hand (in which case such notice shall be effective upon delivery); Professional Services Agreement 2016 5 (2) facsimile (in which case such notice shall be effective upon delivery); or (3) by depositing the written notice in the United States mail, properly addressed to the other party at the address provided in this article, registered or certified mail, return receipt requested, in which case such notice shall be effective on the third business day after such notice is so deposited. B. AUDITOR's Address. AUDITOR's address and numbers for the purposes of notice are: BKD, LLP David Coleman, Partner 14241 Dallas Parkway, Suite 1100 Dallas, Texas 79401 Telephone: (972) 702-8262 Facsimile: (972) 702-0673 C. City's Address. The City's address and numbers for the purposes of notice are: James Loomis, City Manager City of Lubbock P.O. Box 2000 1625 13th Street Lubbock, Texas79457 Telephone: (806) 712-2001 D. Change of Address. Either parry may change its address or numbers for purposes of notice by giving written notice to the other party as provided herein, referring specifically to this Contract, and setting forth such new address or numbers. The address or numbers shall become effective on the 15th day after such notice is effective. ARTICLE 3UH. CITY -PROVIDED DATA AND A. Provision of Data. City shall furnish AUDITOR non -confidential studies, reports and other available data in the possession of the City pertinent to AUDITOR's Services, so long as City is entitled to rely on such studies, reports and other data for the performance of AUDITOR's Services under this Contract (the "Provided Data"). AUDITOR shall be entitled to use and rely, so long as such reliance is reasonable, upon all such Provided Data Professional Services Agreement 2016 ARTICLE XIV. MISCELLANEOUS A. Captions. The captions for the articles and sections in this Contract are inserted in this Contract strictly for the parties' convenience in identifying the provisions to this Contract and shall not be given any effect in construing this Contract. B. Audit. AUDITOR shall provide access to its time and billing records to the City. The City may audit, at its expense and during normal business hours, AUDITOR's books and records with respect to this Contract between AUDITOR and City. C. Records. AUDITOR shall maintain records that are necessary to substantiate the services provided by AUDITOR. D. Assignability. AUDITOR may not assign this Contract without the prior written approval of the City. E. Successor and Assigns. This Contract binds and inures to the benefit of the City and AUDITOR, and in the case of City, its respective successors, legal representatives, and assigns, and in the case of AUDITOR, its permitted successors and assigns. F. Construction and Venue. THIS CONTRACT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. THIS CONTRACT IS PERFORMABLE IN LUBBOCK COUNTY, TEXAS. THE PARTIES HERETO HEREBY IRREVOCABLY CONSENT TO THE SOLE AND EXCLUSIVE JURISDICTION AND VENUE OF THE COURTS OF COMPETENT JURISDICTION OF THE STATE OF TEXAS, COUNTY OF LUBBOCK, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS CONTRACT OR THE ACTIONS THAT ARE CONTEMPLATED HEREBY. G. Severability. If any provision of this Contract is ever held to be invalid or ineffective by any court of competent jurisdiction with respect to any person or circumstance, the remainder of this Contract and the application of such provision to persons and/or circumstances other than those with respect to which it is held invalid or ineffective shall not be affected thereby. Professional Services Agreement 2016 7 H. Amendment. No amendment, modification, or alteration of the terms of this Contract shall be binding unless such amendment, modification, or alteration is in writing, dated subsequent to this Contract, and duly authorized and executed by AUDITOR and City. I. Entire Agreement. This Contract, including Exhibit "A" attached hereto, contains the entire agreement between the City and AUDITOR, and there are no other written or oral promises, conditions, warranties, or representations relating to or affecting the matters contemplated herein. J. No Joint Enterprise. Nothing contained herein shall be construed to imply a joint venture, joint enterprise, partnership or principal — agent relationship between AUDITOR and the City. K. Documents Owned by City. All deliverables provided by AUDITOR as part of the Services hereunder, shall become the property of the City when AUDITOR has been compensated as set forth in Article II, above. The AUDITOR shall maintain ownership of any and all work papers in accordance with professional auditing standards. L. Notice of Waiver. A waiver by either City or AUDITOR of a breach of this Agreement must be in writing and duly authorized to be effective. In the event either parry shall execute and deliver such waiver, such waiver shall not affect the waiving parry's rights with respect to any other or subsequent breach. M. Third Party Activities. Nothing in this Agreement shall be construed to provide any rights or benefits whatsoever to any party other than City and AUDITOR. N. Non -Appropriation. All funds for payment by the City under this Contract are subject to the availability of an annual appropriation for this purpose by the City. In the event of non -appropriation of funds by the City Council of the City of Lubbock for the services provided under the Contract, the City will terminate the Contract, without termination charge or other liability, on the last day of the then -current fiscal year or when the appropriation made for the then -current year for the services covered by this Contract is spent, whichever event occurs first (the "Non -Appropriation Date"). If at any time funds are not appropriated for the continuance of this Contract, cancellation shall be accepted by the AUDITOR on thirty (30) days prior written notice, but failure to give such notice shall be of no effect and the City shall not be obligated under this Contract beyond the Non -Appropriation Date. Professional Services Agreement 2016 8 EXECUTED as of the Effective Date hereof. CITY OF LUBBOCK , MAYOR Garza, City Secretary PF OVED AS Tta CNT: tZ Ja es W. Loomis, City Manager APPROVED AS TO FORM: Amy ty Ci ttorne Firm BKD, LLP By: Vic^"'% , ?wj--r-f� David Coleman, Partner Professional Services Agreement 2016 BK0. 1 :24 oar °z v:a, Sw !I CC // neoas TA 75454 29,I CPAs & Advisors 0 9%2702 92b2 //fax c; g i O( (613 // W.eom March 11, 2016 Honorable Glen Robertson, Mayor Members of City Council James Loomis, City Manager City of Lubbock 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 City of Lubbock, Texas. ENGAGEMENT OBJECTIVES AND SCOPE We will audit the basic financial statements of City of Lubbock, Texas (City) and Lubbock Power and Light as of and for the year period ended September 30, 2016, and the related notes to the financial statements, in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the State of Texas Uniform Grant Management Standards, issued by the Governor's Office of Budget and Planning, U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations and the Passenger facility Charge Audit Guide for Public Agencies, issued by the Federal Aviation Administration (PFC guide). We will also perform agreed upon procedures related to the City of Lubbock's report to the Texas Commission on Environmental Quality (TCEQ). Our audit will be conducted with the objectives of: ✓ Expressing an opinion on the financial statements ✓ Issuing a report on your compliance based on the audit of your financial statements. ✓ Issuing a report on your internal control over financial reporting based on the audit of your financial statements. ✓ Expressing an opinion on your compliance, in all material respects, with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Compliance Supplement that are applicable to each of your major federal award programs. PraxitY`. City of Lubbock March 11, 2016 Page 3 ✓ The audit of compliance with the types of compliance requirements described in the OMB Compliance Supplement applicable to each major federal award program to obtain reasonable rather than absolute assurance about whether noncompliance having a direct and material effect on a major federal award program occurred. Because of the inherent limitations of an audit, together with the inherent limitations of internal control, an unavoidable risk that some material misstatements or noncompliance having a direct and material effect may not be detected exists, even though the audit is properly planned and performed in accordance with GAAS. In making our risk assessments, we consider internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. However, we win communicate to you in writing concerning any significant deficiencies or material weaknesses in internal control relevant to the audit of the financial statements that we have identified during the audit. Also, in the future, procedures could become inadequate because of changes in conditions or deterioration in design or operation. Two or more people may also circumvent controls, or management may override the system. We are available to perform additional procedures with regard to fraud detection and prevention at your request, subject to completion of our normal engagement acceptance procedures. The actual terms and fees of such an engagement would be documented in a separate letter to be signed by you and BKD. David Coleman, partner, is responsible for supervising the engagement and authorizing the signing of the report or reports. We will issue a written report upon completion of our audit of the City's financial statements. Our report will be addressed to the City Council of the City. We cannot provide assurance that an unmodified opinion will be expressed. Circumstances may arise in which it is necessary for us to modify our opinion, add an emphasis of matter or other matter paragraph(s), or withdraw from the engagement. If we discover conditions that may prohibit us from issuing a standard report, we will notify you as well. In such circumstances, further arrangements may be necessary to continue our engagement. We will also express an opinion on whether the combining fund statements and schedules, schedule of expenditures of federal awards and schedule of state awards "supplementary information" is fairly stated, in all material respects, in relation to the financial statements as a whole. City of Lubbock March 11, 2016 Page 5 With regard to supplementary information: • Management is responsible for its preparation in accordance with applicable criteria • Management will provide certain written representations regarding the supplementary information at the conclusion of our engagement • Management will include our report on this supplementary information in any document that contains this supplementary information and indicates we have reported on the supplementary information • Management will make the supplementary information readily available to intended users if it is not presented with the audited financial statements In addition, we may perform other services for you not covered by this engagement letter. You agree to assume full responsibility for the substantive outcomes of the services described above and for any other services that we may provide, 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 responsibilities 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 $245,000, which includes time expended and charges for travel, copies, postage and other delivery charges, supplies, technology -related costs such as computer processing, software licensing, research and library databases and similar expense items. Our pricing for this engagement and our fee structure are based upon the expectation that our invoices will be paid promptly. We will issue progress billings during the course of our engagement, and payment of our invoices is due upon receipt. Interest Nvill be charged on any unpaid balance after 30 days at the rate of 10% per annum. Our engagement fee does not include any time for post -engagement consultation with your personnel or third parties, consent letters and related procedures for the use of our reports in offering documents, inquiries from regulators or testimony or deposition regarding any subpoena. Charges for such services will be billed separately. Our fees may also increase if our duties or responsibilities are increased by rulemaking of any regulatory body or any additional new accounting or auditing standards. We will consult with you in the event any other regulations or standards are issued that may impact our fees. City of Lubbock March 11, 2016 Page 7 The insurance companies must carry a Best's Rating of A-VII or better. Except for Professional Liability, the policies will be written on an occurrence basis, subject to the following minimum limits of liability: Commercial General Liability: Per occurrence Single Limit: $1,000,000 General Aggregate Limit: $2,000,000 Professional Liability: Per Claim: $1,000,000 Automobile Liability: Combined Single Limit for any auto: $1,000,000 Per occurrence The auditor shall further cause any approved subcontractor or sub -consultant to procure and carry, during the term of this Agreement, Professional Liability coverage, as specified above for the auditor, protecting the City against losses caused by the professional negligence of the approved subcontractor or sub -consultant. The City shall be listed as a primary and noncontributory additional insured with respect to the Automobile Liability and Commercial General Liability and shall be granted a waiver of subrogation under those policies. The auditor shall provide a certificate of Insurance to the City as evidence of coverage. BKD shall provide 30 days notice of cancellation to the City. A copy of the additional insured endorsement and waiver of subrogation attached to the policy will be included in the Certificate. Notwithstanding anything contained herein to the contrary, the professional liability policy shall be maintained at the auditor's sole cost and expense. The retroactive date shall be no later than the commencement of the performance of the Contract and shall continue through the term of this engagement. BKD commits to continue to carry professional liability insurance for not less than 10 years after the termination or expiration of this Agreement unless such coverage is unavailable. Each of these provisions related to insurance coverage shall survive the termination of expiration of this Agreement. Worker's Compensation and Employers Liability Insurance: The auditor shall elect to obtain workers' compensation coverage pursuant to Section 406.002 of the Texas Labor Code. Further, the auditor shall maintain said coverage throughout the term of this contract and shall comply with all provision of Title 5 of the Texas Labor Code to ensure that the auditor maintains said coverage. Any termination of workers' compensation insurance coverage by the Contractor or any cancellation or non -renewal of workers' compensation insurance coverage for the Contractor shall be a material breach of this contract. The auditor may maintain Occupational Accident and Disability Insurance in lieu of Workers' Compensation. In either event, once the Contract is awarded, the policy must be endorsed to include a waiver of subrogation in favor of the City of Lubbock. City of Lubbock March 11, 2016 Page 9 You agree to notify us if you desire to place these financial statements or our report thereon along with other information, such as a report by management or those charged with governance on operations, financial summaries or highlights, financial ratios, etc., on an electronic site. You recognize that we have no responsibility as auditors to review information contained in electronic sites. Any time you intend to reference our firm name in any manner in any published materials, including on an electronic site, you agree to provide us with draft materials for our review and approval before publishing or posting such information. 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. 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 2014 peer review report accompanies this letter. HIPAA BUSINESS ASSOCIATE AGREEMENT We agree not to use or disclose Protected Health Information of your (patients/employees) (hereinafter referred to as "PHI") obtained or produced in any form of media during the course of our work in a manner prohibited by HIPAA, as amended. We may use or disclose PHI for purposes of (a) performing our engagement, (b) management and administration of BKD, or (c) carrying out legal responsibilities of BKD. We will not further disclose information except as permitted or required by this contract or as required by law. When using or disclosing PHI in relation to this engagement, we will limit disclosures as required by HIPAA. We will not use PHI in any marketing activities in a manner that would violate HIPAA. We represent to you that we have implemented what we consider to be appropriate administrative, physical and technical safeguards to protect the confidentiality, integrity and availability of your PHI as required for us as a business associate to comply with HIPAA. City of Lubbock March 11, 2016 Page 11 We will obtain from any agents, including subcontractors, to whom we provide PHI received from you, or created or received by us on behalf of you, an agreement to the same restrictions and conditions that apply to us with respect to such PHI. To the extent that any relevant provision of HIPAA is eliminated or held to be invalid by a court of competent jurisdiction, the corresponding portion of this agreement shall be deemed of no force and effect for any purpose. To the extent that any relevant provision of HIPAA is materially amended in a manner that changes the obligations of business associates or covered entities that are embodied in term(s) of this engagement, the Parties agree to negotiate in good faith appropriate amendment(s) to this engagement to give effect to such revised obligations. In addition, the terms of this engagement should be construed in light of any interpretation and/or guidance on HIPAA issued by HHS from time to time. Please sign and return the attached copy of this letter to indicate your acknowledgement of, and agreement with, the arrangements for our audit of the financial statements including our respective responsibilities. If the signed copy you return to us is in electronic form, you agree that such copy shall be legally treated as a "duplicate original' of this agreement. BKD, LLP Acknowledged and agreed to on behalf of City of J t bock, Texas W. Loomis, City Manager DATE Postlethwaite & Netterville A PmfnocrJ AC[u:M,O C�..a. /uxsier!Gii'ce: m Rn¢ of Co e,dsire lknkd Yoe, w .Pncpo.com Svstetn Review Report To the Partners of BKD, LLP and the National Peer Review Committee We have reviewed the system of quality control for the accounting and auditing practice of BKD, LLP (the firm) applicable to engagements not subject to PCAOB permanent inspection in effect for the year ended May 31, 2014. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants. As a part of our peer review, we considered reviews by regulatory entities, if applicable, in determining the nature and extent of our procedures. The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Our responsibility is to express an opinion on the design of the system of quality control and the firm's compliance therewith based on our review. The nature, objectives, scope, limitations of, and the procedures performed in a System Review are described in the standards at www.aicpa.o&prsummary. As required by the standards, engagements selected for review included engagements performed under Government Auditing Standards, audits of employee benefit plans, audits performed under FDICIA, audits of carrying broker -dealers, and examinations of service organizations (SOC 1). In our opinion, the system of quality control for the accounting and auditing practice of BKD, LLP applicable to engagements not subject to PCAOB permanent inspection in effect for the year ended May 31, 2014, has been suitably designed and complied with to provide the firth with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with defrciency(ies) or fail. BKD. LLP has received a peer review rating of pass. --?z��i�,r.��a- tF /I�. Baton Rouge, Louisiana September 19, 2014 8550 United Plaza Blvd, Suite 1001 a Baton Rouge, LA 70809 e Tel: 225.922.4600 • Fax: 225.922.461 1 City of Lubbock, Texas Price Proposal Information For Next Five Years En a ement Year Hours Anticipated I Expenses Fixed Annual Fee Financial Statement Audit and OMB Circular A-133 Single Audit Year Ending September 30, 2016 1550 $20,000 $245,000 Year Ending September 30, 2017 1550 $20,000 $250,500 Year Ending September 30, 2018 1550 $20,000 $256,000 Year Ending September 30, 2019 1550 $20,000 $261,500 Year Ending Se tember 30, 2020 1550 $20,000 $267,000 CERTIFICATE OF INTERESTED PARTIES FORM 1295 toll Complete Nos. 1- 4 and 6 if there are interested parties. OFFICE USE ONLY Complete Nos.1. 2, 3, S. and 6 it there are no interested parties. CERTIFICATION OF FILING Certificate Number: 1 Name of business entity filing form, and the city, state and country of the business entity's place of business. 2016-40918 BKD, LLP Dallas, TX United States Date Filed: 04/15/2016 2 Name of govertmental entity or state agency that is a party to the contract for which the form is being filed. City of Lubbock Date Acknowledged: 3 Provide the identification number used by the governmental entity or state agency to track or identify the contract, and provide a description of the goods or services to be provided under the contract 12813 Audit Services 4 Nature of interest (check applicable) Name of Interested Party City, State, Country (place of business) Controlling Intermediary Wolfe, Mike Springfield, MO United States X Hansen, Eric Springfield, MO United States X Dickman, Ted Indianapolis, IN United States X 5 Check only if there is NO Interested Party. ❑ 6 AFFIDAVIT I swear, or affirm, under penalty perjury, that the above disclosure is true and correct. Aof .r'Y a MARLA L. EISENBERG 3=°J Ns Notary Public, State of Texas -•�'"' My Commission Expires August 03.20)9 Signature of authorized agent of contracting business entity AFFIX NOTARY STAMP / SEAL ABOVE n,., Swom to and subscribed before me, by the said �A.l V ��-tJ11.f inr a rnn . this the _J day of 20110 , to certify which, witness my hand and seal of office. Signature of officer administering oath Orinted name of officer administering oath Title of officer administering oath Forms provided by Texas Ethics Commission www.ethirs.state.tx.us Version V1.0.645 CERTIFICATE OF INTERESTED PARTIES FORM 1295 l of l Complete Nos. 1- 4 and 6 if there are interested parties. OFFICE USE ONLY Complete Nos. 1, 2, 3, 5, and 6 if there are no interested parties. CERTIFICATION OF FILING Certificate Number: 201640918 1 Name of business entity filing form, and the city, state and country of the business entity's place of business. BKD, LLP Dallas, TX United States Date Filed: 04/15/2016 2 Name of governmental entity or state agency that is a party to the contract for which the form is being filed. City of Lubbock Date Acknowledged: 04/1512016 3 Provide the identification number used by the governmental entity or state agency to track or identify the contract, and provide a description of the goods or services to be provided under the contract. 12813 Audit Services 4 Name of Interested Party City, State, Country (place of business) Nature of interest (check applicable) Controlling Intermediary Wolfe, Mike Springfield, MO United States X Hansen, Eric Springfield, MO United States X Dickman, Ted Indianapolis, IN United States X 5 Check only if there is NO Interested Parry. ❑ 6 AFFIDAVIT I swear, or affirm, under penalty of perjury, that the above disclosure is true and correct. Signature of authorized agent of contracting business entity AFFIX NOTARY STAMP / SEAL ABOVE Sworn to and subscribed before me, by the said , this the day of 20 , to certify which, witness my hand and seal of office. Signature of officer administering oath Printed name of officer administering oath Title of officer administering oath Forms provided by Texas Ethics Commission www.ethics.state.tx.us Version V1.0.645