HomeMy WebLinkAboutContract 52415 CITY SECRETARY
weaver Austin � Conroe I Dallas � Fort Worth � Houston
Los Angeles ( Midland I New York City ) San Antonio
Assurance-Tax-Advisory
May 2,2019
Kevin Gunn, Interim Chief Financial Officer
City of Fort Worth,Texas
200 Texas Street
Fort Worth,TX 76102
Dear Mr. Gunn:
This letter sets forth our understanding for applying agreed-upon procedures to calculate the
"Net Revenues" of the City of Fort Worth, Texas (the City) as of or for the period ended
September 30,2018.
This engagement is solely for the purpose of reporting our findings in regards to the results of the
procedures performed to calculate the ratio of"Net Revenues"of the City of Fort Worth,Texas Water and
Sewer System (the System) to the average and maximum annual principal and interest of the System's
debt obligations, including the System Revenue Bonds,Series 2019,as received from the City,for the year
ended September 30, 2018. The financial information utilized in calculating the "Net Revenues" of the
System will be obtained from the Schedule of Revenues, Expenses, and Changes in Net Position of the
System for the year ended September 30,2018 in the City's 2018 Comprehensive Annual Financial Report.
The debt service requirements for average and maximum principal and interest of the System's debt
obligations will be received from information prepared by the City or its financial advisor.The procedures
we will perform have been agreed to by management of the City.These agreed-upon procedures are j
enumerated on the below schedule. Net Revenues, as defined above,shall include the gross operating
revenues of the System less expenses for operation and maintenance, including all salaries, labor,
materials, labor, repairs and extensions necessary to continue the System in its present operating
capacity. Net revenues shall not include non-cash expenses.
Our Responsibilities
We will apply the following procedures:
1) Obtain the System's operating revenues and operating expenses(exclusive of depreciation)from the
Schedule of Revenues, Expenses, and Changes in Net Position of the System for the year ended
September 30,2018 from the City's 2018 Comprehensive Annual Financial Report, and calculate
the difference of these items as"Net Revenues".
2) Obtain the System's debt service requirements, including the Series 2018 requirements, by year from u
the City, or its financial advisor, and determine that this schedule reconciles or agrees to total debt
service requirements per the City's 2018 Comprehensive Annual Financial Report.
3) From the requirements obtained in step 2,determine the average and maximum annual debt service
requirements over the life of the debt.
4) Calculate the debt coverage ratios of the average and maximum annual debt service requirements
from the Net Revenues.
5) Determine, by review of the Schedule of Revenues, Expenses, and Changes in Net Position of the
System for the year ended September 30, 2018, from the City's 2018 Comprehensive Annual
Financial Report, that the City is charging System rates to provide System revenues sufficient to CC >- a
provide for System operating expenses, including depreciation, for the year ended ® Q F
September 30,2018.
CC
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Weaver and Tidwell,L.L.P. }
2821 West 7th Street,Suite 700 1 Fort Worth,Texas 76107
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CPAs AND ADVISORSF I WEAVER.COM O V
City of Fort Worth,Texas
May 2,2019
Page 2
We will conduct our engagement in accordance with the attestation standards for agreed-upon
procedures engagements of the American Institute of Certified Public Accountants. We are responsible
for carrying out the procedures and reporting findings in accordance with these standards. The
sufficiency of these procedures is solely the responsibility of the specified parties.Consequently,we make
no representation as to the sufficiency of these procedures for the purposes of the specified parties or for
any other purpose.
The agreed-upon procedures to be performed do not constitute an examination or review of the subject
matter.Accordingly,we will not express an opinion or conclusion on the subject matter.If we did perform
additional procedures, other matters might come to our attention that would be reported to you.
Your Responsibilities
With respect to any nonattest services we may provide, including preparation of report, the
City's management is responsible for (a) making all management decisions and performing all
management functions; (b) assigning a competent individual, preferably within senior management, to
oversee the services; (c) evaluating the adequacy of the services performed; (d) evaluating and
accepting responsibility for the results of the services performed; and (e) establishing and maintaining
internal controls, including monitoring ongoing activities.
As part of our engagement, we will request from management, written confirmation concerning
representations made to us in connection with the agreed upon procedures.
Engagement Fees
We estimate that the fee for our engagement will be $4,000. The fee estimate is based on anticipated
cooperation from your personnel and the assumption that unexpected circumstances will not be
encountered during the engagement.We understand that your employees will prepare all confirmations
we request and will locate any documents or support for any other transactions we select for testing.
Our engagement fees do 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 engagement fees do not include consulting on the adoption of new accounting standards and any
increased duties because of any future regulatory body or an unknown or unplanned significanf
transaction. We will consult with you in the event any of these fake place that may affect our fees.
Our invoices for these fees will be rendered each month as work progresses and are payable on
presentation.Our fee is based upon the complexity of the work to be performed and the tasks required.
Fees for our services are due upon receipt of our invoice. For bills not paid within 60 days of the billing
date, a late charge will be added to the outstanding balance. The late charge will be assessed at .57
on the unpaid balance per month.
a
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City of Fort Worth, Texas
May 2,2019
Page 3
Our Report and Other Relevant Information
Our report will list the procedures performed and our findings. Our report will be addressed to the
Company and will be intended for use by and restricted to the use of the specified parties as identified
above. Our report will contain such restricted-use language.
Should we have any reservations with respect to the subject matter,we will discuss them with you before
the report is issued.
We have no responsibility to update our report for events and circumstances occurring after the date of
our report.
During the course of our engagement, we will request information and explanations from management
regarding the Company's operations, future plans, specific transactions and accounting systems and
procedures. At the conclusion of our engagement,we will require, as a precondition to the issuance of
our report, that management provide certain representations in a written representation letter. The
Company agrees that as a condition of our engagement that management will, to the best of its
knowledge and belief, be truthful, accurate, and complete in all representations made to us during the
course of the engagement and in the written representation letter. The procedures we perform in our
engagement and the conclusions we reach as a basis for our report will be heavily influenced by the
written and oral representations that we receive from management. False or misleading representations
could cause us to expend unnecessary efforts in our engagement;or,worse,could cause a material error
or a fraud to go undetected by our procedures.
In the unlikely event that circumstances occur which we in our sole discretion believe could create a
conflict with either the ethical standards of our firm or the ethical standards of our profession in continuing
our engagement,we may suspend our services until a satisfactory resolution can be achieved or we may
resign from the engagement. We will notify you of such conflict as soon as practicable, and will discuss
with you any possible means of resolving them prior to suspending our services.
The hiring of or potential employment discussions with any of our personnel could impair our
independence. Accordingly, you agree to inform the engagement partner prior to any such potential
employment discussions taking place.
During the course of the engagement,we may communicate with you or with your personnel via fax or
e-mail, and you should be aware that communication in those mediums contains a risk of misdirected or
intercepted communications.
Mr. Kevin Sanford is the engagement partner for the services specified in this letter. His responsibilities
I
include supervising the engagement and signing the report or authorizing another individual to sign it.
We plan to begin our procedures in early May 2018,and unless unforeseeable problems are encountered,
the engagement should be completed by late May 2018.
We look forward fo a continued relationship with your organization, and we are available to discuss the I
contents of this letter or other professional services you may desire.
i
City of Fort Worth,Texas
May 2,2019
Page 4
Please sign and return the attached copy of this letter to indicate your acknowledgment of, and
agreement with, the arrangements for our engagement including our respective responsibilities. If you
have any questions, please let us know.
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WEAVER AND TIDWELL, L.L.P.
RESPONSE:
This letter correctly sets forth our understanding.
Acknowledged and agree, on behalf of the City of Fort Worth by:
Signature:
Title: /�? ✓i�+. ( Gi,eT` t�-.n9a �a� ��'Cer
Date: s/,/Z)
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ECOffTARY
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Soto, Vania Elizabeth
From: Hinojosa, Crystal
Sent: Monday,April 1, 2019 2:40 PM
To: Soto, Vania Elizabeth
Subject: FW: Engagement Letters
Vania,
See Denis message below for all of the already executed engagements.
I assume this is enough to have signed by City Secretary?
For future engagements we will have routed through whole process.
From: McElroy, Denis C.
Sent: Monday,April 1, 2019 2:32 PM
To: Hinojosa,Crystal<Crystal.Hinojosa@fortworthtexas.gov>
Subject: RE: Engagement Letters
As they've already been long ago executed without Law's signature, I don't see the benefit to running them through my
department at this point.
Denis McElroy
Assistant City Attorney
200 Texas Street
Fort Worth,Texas 76102
(817)392-2758
denis.mcelroy a,fortworthtexas.gov
City of Fort Worth — Working together to build a strong community
FORT WORTH.
From: Hinojosa, Crystal
Sent: Monday,April 01, 2019 2:21 PM
To: McElroy, Denis C.
Subject: FW: Engagement Letters
Denis,
I need to route these to City Secretary office for CSCO number to be assigned for purchasing process.
Do I need to also route these already executed engagements to Law as well?
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