HomeMy WebLinkAboutContract 47403 . CITY SECRETARY
CONTRACT 140. yf�y�
Deloitte, c 3 R�� Deloitte&Touche LLP
Suite 1501
201 Main Street
Fort Worth,TX 76102-3134
USA
December 17,2015 -— Tel:+1 817 347 3300
Fax:+1 817 336 2013
David Cooke, City Manager www.deloitte.com
City of Fort Worth, Texas
1000 Throckmorton
Fort Worth, Texas 76102
Dear Mr. Cooke:
Deloitte& Touche LLP("D&T"or"we"or"us") is pleased to serve as independent auditors for
Lancaster Corridor Redevelopment, LLC(the"Lancaster Corridor Redevelopment"or"you"or"your").
Ms. Reem Samra will be responsible for the services that we perform for the Lancaster Corridor
Redevelopment hereunder, hereafter referred to as the "engagement".
In addition to the audit services we are engaged to provide under this engagement letter, we would also be
pleased to assist the Lancaster Corridor Redevelopment on issues as they arise throughout the year.
Hence, we hope that you will call Ms. Samra whenever you believe D&T can be of assistance.
The services to be performed by D&T pursuant to this engagement are subject to the terms and conditions
set forth herein and in the accompanying appendices. Such terms and conditions shall be effective as of
the date of the commencement of such services.
Audit of Financial Statements and Other Reporting
Our engagement is to perform an audit in accordance with(1)auditing standards generally accepted in the
United States of America("generally accepted auditing standards"), and(2)the standards applicable to
financial audits contained in Government Auditing Standards,issued by the Comptroller General of the
United States ("generally accepted government auditing standards")(generally accepted auditing
standards and generally accepted government auditing standards are collectively referred to herein as the
"Auditing Standards"). The objectives of an audit conducted in accordance with the Auditing Standards
are to:
• Express an opinion on whether each opinion unit of the Lancaster Corridor Redevelopment's
basic financial statements, for the year ended September 30, 2015 (the "financial statements"), are
presented fairly, in all material respects, in accordance with accounting principles generally
accepted in the United States of America("generally accepted accounting principles").
• Report on the Lancaster Corridor Redevelopment's internal control over financial reporting and
on its compliance with certain provisions of laws,regulations, contracts, and grant agreements
and other matters for the year ended September 30, 2015, based on an audit of financial
statements performed in accordance with generally accepted government auditing standards.
Appendix A contains a description of the auditor's responsibilities and the scope of an audit in accordance
with the Auditing Standards.
D&T Reports
We expect to issue written reports upon the completion of our audit. Our ability to express any opinion or
to issue any report as a result of this engagement and the wording thereof will, of course, be dependent on
the facts and circumstances at the date of our reports. If, for any reason,we are unable to complete our
OFFICIAL RECORD
CITY SECRETARY Member of
Deloitte Touche Tohmatsu
FT.WORTH,TX
audit or are unable to form or have not formed any opinion,we may decline to express any opinion or
decline to issue any report as a result of this engagement.If we are unable to complete our audit,or if any
report to be issued by D&T as a result of this engagement requires modification,the reasons for this will
be discussed with the Board of Directors,and the Lancaster Corridor Redevelopment's management.
Management's Responsibilities
Appendix B describes management's responsibilities.
Responsibility of Board of Directors
As independent auditors of the Lancaster Corridor Redevelopment,we acknowledge that the Board of
Directors is directly responsible for the appointment,compensation,and oversight of our work,and
accordingly,except as otherwise specifically noted,we will report directly to the Board of Directors.You
have advised us that the services to be performed under this engagement letter,including,where
applicable,the use by D&T of affiliates or related entities as subcontractors in connection with this
engagement,have been or will be approved by the Board of Directors in accordance with the Board of
Directors' established preapproval policies and procedures.
Communications with Board of Directors
Appendix C describes various matters that we are required by the Auditing Standards to communicate
with the Board of Directors and management.
Fees
We estimate that our fees for this engagement will be$30,000,plus expenses. .Based on the anticipated
timing of the work as indicated in Appendix F,our fees will be billed in the month of December,2015.
We anticipate sending the invoice according to the above schedule,and the payment is due 30 days from
the date of the invoice.
Our continued service on this engagement is dependent upon payment of our invoices in accordance with
these terms. Our estimated fees are based on certain assumptions,including(1)timely and accurate
completion of the requested Lancaster Corridor Redevelopment participation schedules and additional
supporting information,(2)no inefficiencies during the audit process or changes in scope caused by
events that are beyond our control,(3)the effectiveness of internal control over financial reporting
throughout the period under audit,(4)a minimal level of audit adjustments(recorded or unrecorded),and
(5)no changes to the timing or extent of our work plans.We will notify you promptly of any
circumstances we encounter that could significantly affect our estimate and discuss with you any
additional fees,as necessary.
Access to Working Papers by Regulators
We may be requested or required by a regulator of the Lancaster Corridor Redevelopment,including but
not limited to the Comptroller General of the United States,or representatives of the United States
Government Accountability Office(GAO)(each,a"Regulator")to provide access to working papers
related to this engagement.In the event of any such request or requirement,we will notify you prior to
providing such access unless applicable law or regulation prohibits such notice.The working papers for
this engagement are the property of D&T and constitute D&T's confidential information.We may request
confidential treatment of our working papers.Access to our working papers will be provided under the
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supervision of D&T's personnel and upon request we may provide copies of working papers to a
Regulator. The Lancaster Corridor Redevelopment hereby consents,where consent is required,to D&T
providing access to working papers and copies thereof to a Regulator. Fees for professional services
relating to such access,plus related expenses,will be billed in addition to the estimated fees outlined
herein. The working papers related to this engagement will be retained by us for a minimum of three
years from the dates of the reports issued, or such longer period as required to satisfy legal and
administrative requirements.
Inclusion of D&T Reports or References to D&T in Other Documents or Electronic Sites
If the Lancaster Corridor Redevelopment intends to publish or otherwise reproduce in any document any
report issued as a result of this engagement, or otherwise make reference to D&T in a document that
contains other information in addition to the audited financial statements(e.g.,in a periodic filing with a
regulator, in a debt or equity offering circular,or in a private placement memorandum),thereby
associating D&T with such document,the Lancaster Corridor Redevelopment agrees that its management
will provide D&T with a draft of the document to read and obtain our approval for the inclusion or
incorporation by reference of any of our reports,or the reference to D&T, in such document before the
document is printed and distributed. The inclusion or incorporation by reference of any of our reports in
any such document would constitute the reissuance of such reports. The Lancaster Corridor
Redevelopment also agrees that its management will notify us and obtain our approval prior to including
any of our reports on an electronic site.
Our engagement to perform the services described herein does not constitute our agreement to be
associated with any such documents published or reproduced by or on behalf of the Lancaster Corridor
Redevelopment.Any request by the Lancaster Corridor Redevelopment to reissue any report issued as a
result of this engagement,to consent to any such report's inclusion or incorporation by reference in an
offering or other document, or to agree to any such report's inclusion on an electronic site will be
considered based on the facts and circumstances existing at the time of such request. The estimated fees
outlined herein do not include any procedures that would need to be performed in connection with any
such request. Should D&T agree to perform such procedures,fees for such procedures would be subject
to the mutual agreement of the Lancaster Corridor Redevelopment and D&T.
Nothing in this engagement letter is intended to restrict the ability of the Lancaster Corridor
Redevelopment to distribute to other parties a complete set of the Lancaster Corridor Redevelopment's
financial statements and/or related notes thereto so long as our Independent Auditor's Report is not
included with the Lancaster Corridor Redevelopment's financial statements and as long as there is no
reference to D&T thereby associating D&T with such information.
Notwithstanding the foregoing,D&T understands and acknowledges that the Lancaster Corridor
Redevelopment is a public entity under the laws of the State of Texas, and as such, all documents and
data held by the Lancaster Corridor Redevelopment are subject to disclosure under Chapter 552 of the
Texas Government Code,the Texas Public Information Act(the "Act"). If the Lancaster Corridor
Redevelopment is required to disclose any documents that may reveal any D&T proprietary information
to third parties under the Act, or by any other legal process, law,rule or judicial order by a court of
competent jurisdiction,the Lancaster Corridor Redevelopment will, unless otherwise prohibited by law or
regulation,notify D&T prior to disclosure of such documents. The Lancaster Corridor Redevelopment
shall not be liable or responsible in any way for the disclosure of information not clearly marked as
"Proprietary/Confidential Information" or if disclosure is required by the Act or any other applicable law
or court order. In the event there is a request for such information under the Act, it will be the
responsibility of D&T to submit reasons objecting to disclosure. A determination on whether such
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reasons are sufficient will not be decided by the Lancaster Corridor Redevelopment, but by the Office of
the Attorney General of the State of Texas, or by a court of competent jurisdiction.
The parties acknowledge and agree that D&T is being engaged under this engagement letter to provide
only the services described herein. Should the Lancaster Corridor Redevelopment request, and should
D&T agree to provide, services(including audit services)beyond those described herein, such services
will constitute a separate engagement and will be governed by a separate engagement letter.
This engagement letter, including Appendices A through G attached hereto and made a part hereof,
constitutes the entire agreement between the parties with respect to this engagement and supersedes any
other prior or contemporaneous agreements or understandings between the parties,whether written or
oral,relating to this engagement.
If the above terms are acceptable and the services described are in accordance with your understanding,
please sign the copy of this engagement letter in the space provided and return it to us.
[Signature Page to Follow]
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Accepted and agreed:
By:
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Deloitte and Touche LLP
Date: December 17, 2015
Accepted and agreed to by Lancaster Corridor Redevelopment,LLC:
By:
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Date: JI
cc: Board of Directors of Lancaster Corridor Redevelopment,LLC
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OFFICIAL RECORD
CITY SECRETARY
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APPENDIX A
AUDITORS RESPONSIBILITIES AND SCOPE OF AN AUDIT IN ACCORDANCE WITH THE
AUDITING STANDARDS
This Appendix A is part of the engagement letter dated December 17,2015,between Deloitte &
Touche LLP and the Lancaster Corridor Redevelopment.
Auditor's Responsibilities
Our responsibilities under the Auditing Standards include forming and expressing opinions and reporting
on certain matters as described in the Audit of Financial Statements and Other Reporting section of this
engagement letter. The audit of the financial statements and our reporting on other matters do not relieve
management or the Board of Directors of their responsibilities.
Scope of an Audit and Other Reporting
The Auditing Standards require that we plan and perform the audit to obtain reasonable,rather than
absolute, assurance about whether each opinion unit of the financial statements are free from material
misstatement, whether caused by fraud or error.However, because of the inherent limitations of an audit,
together with the inherent limitations of internal control,an unavoidable risk exists that some material
misstatements may not be detected, even though the audit is properly planned and performed in
accordance with the Auditing Standards. We have no responsibility to plan and perform the audit to
obtain reasonable assurance that misstatements,whether caused by fraud or error,that are not material to
the financial statements as a whole are detected.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on our judgment, including the assessment of
the risks of material misstatement of the financial statements,whether caused by fraud or error. In making
those risk assessments,we consider internal control relevant to the Lancaster Corridor Redevelopment'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 Lancaster Corridor Redevelopment's internal control.An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
An audit also includes tests of the Lancaster Corridor Redevelopment's compliance with certain
provisions of laws,regulations, contracts, and grant agreements. However, our objective is not to provide
an opinion on compliance with those provisions,and accordingly,we will not express such an opinion.
As part of the audit,we will be alert to situations or transactions that could be indicative of abuse as
defined by generally accepted government auditing standards,which involves behavior that is deficient or
improper when compared with behavior that a prudent person would consider reasonable and necessary
business practice given the facts and circumstances.Abuse also includes misuse of authority or position
for personal financial interests or those of an immediate or close family member or business associate.
The determination of abuse is subjective;generally accepted government auditing standards do not
require us to provide reasonable assurance of detecting abuse, and we will not design the audit to detect
abuse. However,if we become aware of abuse that could be quantitatively or qualitatively material to the
financial statements,we will apply procedures specifically directed to ascertain the potential effect on the
financial statements or other financial data significant to the audit objectives. Under generally accepted
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government auditing standards,we may be required to directly report known or likely fraud,
noncompliance with provisions of laws,regulations, contracts or grant agreements, or abuse to outside
parties.
Generally accepted accounting principles provide for certain required supplementary information(RSI),
such as a management's discussion and analysis,to accompany the Lancaster Corridor Redevelopment's
financial statements.As part of the audit,we will apply certain limited procedures to the Lancaster
Corridor Redevelopment's RSI,which will consist principally of inquiries of management about the
methods of preparing the information. We will disclaim an opinion on the RSI,unless(1)some of the RSI
is omitted, (2)the measurement or presentation of the RSI departs materially from the prescribed
guidelines, or(3)we have unresolved doubts about whether the RSI is measured or presented in
accordance with prescribed guidelines.
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APPENDIX B
MANAGEMENT'S RESPONSIBILITIES
This Appendix B is part of the engagement letter dated December 17,2015,between Deloitte&
Touche LLP and the Lancaster Corridor Redevelopment.
Financial Statements, Internal Control, and Compliance
Management is responsible for the preparation, fair presentation, and overall accuracy of the financial
statements in accordance with generally accepted accounting principles and all accompanying
information in accordance with prescribed guidelines or applicable criteria.In this regard,management
has the responsibility for, among other things:
• Selecting and applying the accounting policies
• Designing,implementing, and maintaining effective internal control relevant to(1)the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error and(2)compliance with laws,regulations, and provisions of
contracts or grant agreements
• Identifying and ensuring that the Lancaster Corridor Redevelopment complies with the laws and
regulations applicable to its activities and the provisions of contracts or grant agreements, and
informing us of all instances of identified or suspected fraud,noncompliance with provisions of
laws,regulations, contracts or grant agreements, or abuse
• Providing us with(1)access to all information of which management is aware that is relevant to
the preparation and fair presentation of the financial statements,and all accompanying
supplementary information, such as records,documentation, and other matters, (2)additional
information that we may request from management for the purpose of our audit, and(3)
unrestricted access to personnel within the Lancaster Corridor Redevelopment from whom we
determine it necessary to obtain audit evidence
• Taking timely and appropriate steps to remedy fraud,noncompliance with provisions of laws,
regulations,contracts or grant agreements,or abuse that we report
• Having a process to track the status of audit findings and recommendations
• Identifying for us previous audits, attestation engagements,and other studies related to the
objectives of our audit and whether related recommendations have been implemented.
Management's Representations
We will make specific inquiries of the Lancaster Corridor Redevelopment's management about the
representations(1)embodied in the financial statements and accompanying information, (2)regarding the
effectiveness of internal control, and(3)regarding the Lancaster Corridor Redevelopment's compliance
with laws,regulations, and the provisions of contracts and grant agreements. In addition,we will request
that management provide us with the written representations the Lancaster Corridor Redevelopment is
required to provide to its independent auditors under the Auditing Standards. The responses to those
inquiries and the written representations of management are part of the evidential matter that D&T will
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rely on in forming its opinion on the Lancaster Corridor Redevelopment's financial statements and
reporting on accompanying information.Because of the importance of management's representations,the
Lancaster Corridor Redevelopment agrees to release and,to the extent not prohibited by applicable law,
indemnify D&T, its subcontractors,and their respective personnel from all claims, liabilities, and
expenses relating to our services under this engagement letter attributable to any misrepresentation by
management.
Independence Matters
In connection with our engagement,D&T,management, and the Board of Directors will assume certain
roles and responsibilities in an effort to assist D&T in maintaining independence. D&T will communicate
to its partners,principals, and employees that the Lancaster Corridor Redevelopment is an attest client.
Management of the Lancaster Corridor Redevelopment will ensure that the Lancaster Corridor
Redevelopment,together with its subsidiaries and other entities that comprise the Lancaster Corridor
Redevelopment for purposes of the consolidated financial statements,has policies and procedures in place
for the purpose of ensuring that neither the Lancaster Corridor Redevelopment nor any such subsidiary or
other Lancaster Corridor Redevelopment will act to engage D&T or accept from D&T any service that
under American Institute of Certified Public Accountants(AICPA), generally accepted government
auditing standards, or other applicable rules would impair D&T's independence.All potential services are
to be discussed with Ms. Samra.
In connection with the foregoing paragraph,the Lancaster Corridor Redevelopment agrees to furnish to
D&T and keep D&T updated with respect to a corporate tree that identifies the legal names of the
Lancaster Corridor Redevelopment's affiliates, as defined in AICPA Code of Professional Conduct
Interpretation No. 101-18 (e.g.,parents,subsidiaries, investors, or investees)("Lancaster Corridor
Redevelopment Affiliates"),together with the ownership relationship among such entities. Such
information will be maintained in a database accessible by D&T in connection with their compliance with
AICPA or other applicable independence rules.
Management will coordinate with D&T to ensure that D&T's independence is not impaired by hiring
former or current D&T partners,principals, or professional employees in a key position, as defined in the
AICPA Code of Professional Conduct. Management of the Lancaster Corridor Redevelopment will
ensure that the Lancaster Corridor Redevelopment,together with its subsidiaries and other entities that
comprise the Lancaster Corridor Redevelopment for purposes of the consolidated financial statements,
also has policies and procedures in place for purposes of ensuring that D&T's independence will not be
impaired by hiring a former or current D&T partner,principal,or professional employee in a key position
that would cause a violation of the AICPA Code of Professional Conduct,generally accepted government
auditing standards, or other applicable independence rules.Any employment opportunities with the
Lancaster Corridor Redevelopment for a former or current D&T partner,principal, or professional
employee should be discussed with Ms. Samra before entering into substantive employment
conversations with the former or current D&T partner,principal,or professional employee.
Equity or Debt Security Issuances
The Lancaster Corridor Redevelopment agrees to furnish to D&T and keep D&T updated with respect to
any equity or debt securities of the Lancaster Corridor Redevelopment and Lancaster Corridor
Redevelopment Affiliates(including,without limitation,tax-advantaged debt of such entities that is
issued through governmental authorities)that are registered, issued, listed, or traded outside of the United
States(whether through stock,bond, commodity,futures or similar markets, or equity,debt, or any other
securities offerings),together with related securities identification information(e.g.,ticker symbols or
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CUSIP®,ISIN®, or Sedolo numbers). The Lancaster Corridor Redevelopment acknowledges and consents
that such information may be treated by D&T as being in the public domain.
For purposes of the preceding sections entitled"Independence Matters"and"Equity or Debt Security
Issuances", "D&T"shall mean Deloitte&Touche LLP and its subsidiaries; Deloitte Touche Tohmatsu
Limited, its member firms,the affiliates of Deloitte&Touche LLP,Deloitte Touche Tohmatsu Limited
and its member firms; and, in all cases, any successor or assignee.
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APPENDIX C
COMMUNICATIONS WITH BOARD OF DIRECTORS
This Appendix C is part of the engagement letter dated December 17,2015, between Deloitte&
Touche LLP and the Lancaster Corridor Redevelopment.
We are responsible for communicating with the Board of Directors significant matters related to the audit
that are,in our professional judgment,relevant to the responsibilities of the Board of Directors in
overseeing the financial reporting process.
In connection with the foregoing,we will communicate to the Board of Directors any fraud we identify or
suspect that involves(1)management, (2)employees of the Lancaster Corridor Redevelopment who have
significant roles in internal control,or(3)other employees of the Lancaster Corridor Redevelopment
when the fraud results in a material misstatement of the financial statements. In addition,we will
communicate with the Board of Directors any other matters related to fraud that are,in our professional
judgment,relevant to their responsibilities. We will communicate to management any fraud perpetrated
by lower-level employees of which we become aware that does not result in a material misstatement of
the financial statements;however,we will not communicate such matters to the Board of Directors,
unless otherwise directed by the Board of Directors .
In addition, as required by generally accepted government auditing standards,our report on the Lancaster
Corridor Redevelopment's internal control over financial reporting and on its compliance with certain
provisions of laws,regulations,contracts,and grant agreements and other matters will include any
findings of material noncompliance of such provisions,fraud, and material abuse that we have identified
during our audit.
We will also communicate,in writing,to management and the Board of Directors any significant
deficiencies or material weaknesses in internal control(as defined in generally accepted auditing
standards)that we have identified during the audit, including those that were remediated during the audit.
We are not required to design procedures for the purpose of identifying other matters to communicate
with the Board of Directors. However,we will communicate to Board of Directors matters required by the
Auditing Standards.
We may also communicate to management and the Board of Directors on internal control,compliance, or
other matters we observe and possible ways to improve the Lancaster Corridor Redevelopment's
operational efficiency and effectiveness or otherwise improve its internal control or other policies and
procedures.
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APPENDIX D
GENERAL BUSINESS TERMS
This Appendix D is part of the engagement letter to which these terms are attached(the engagement
letter, including its appendices,the"engagement letter")dated December 17,2015,between Deloitte&
Touche LLP and the Lancaster Corridor Redevelopment.
1. Independent Contractor.D&T is an independent contractor and D&T is not, and will not be
considered to be, an agent,partner,fiduciary, or representative of the Lancaster Corridor
Redevelopment or the Board of Directors.D&T shall have exclusive control of and the exclusive
right to control,the details of the work performed hereunder by its employees, officers,personnel
and subcontractors, and shall be solely responsible for the acts and omissions of its employees,
officers,personnel and subcontractors. Nothing herein shall be construed as creating a partnership
or joint venture between the Lancaster Corridor Redevelopment and D&T, and the doctrine of
respondeat superior shall have no application as between the Lancaster Corridor Redevelopment and
D&T.
2. Survival.The agreements and undertakings of the Lancaster Corridor Redevelopment contained in
the engagement letter will survive the completion or termination of this engagement.
3. Assignment and Subcontracting.Except as provided below,no party may assign any of its rights
or obligations(including,without limitation,interests or claims)relating to this engagement without
the prior written consent of the other parties. The Lancaster Corridor Redevelopment hereby
consents to D&T subcontracting a portion of its services under this engagement to any affiliate or
related entity,whether located within or outside of the United States. Professional services
performed hereunder by any of D&T's affiliates or related entities shall be invoiced as professional
fees, and any related expenses shall be invoiced as expenses,unless otherwise agreed.
4. Severability. If any term of the engagement letter is unenforceable, such term shall not affect the
other terms, but such unenforceable term shall be deemed modified to the extent necessary to render
it enforceable,preserving to the fullest extent permissible the intent of the parties set forth herein.
5. Force Maieure.No party shall be deemed to be in breach of the engagement letter as a result of any
delays or non-performance directly or indirectly resulting from circumstances or causes beyond its
reasonable control, including,without limitation,fire, epidemic or other casualty, act of God, strike
or labor dispute,war or other violence,or any law,order or requirement of any governmental agency
or authority.
7. Dispute Resolution.Any controversy or claim between the parties arising out of or relating to the
engagement letter or this engagement(a"Dispute")shall be resolved as set forth in the Dispute
Resolution Provision attached hereto as Appendix E and made a part hereof.
Amendments.This engagement letter may not be amended, changed or otherwise modified without
the prior written consent of both parties.
8. Insurance.D&T shall carry insurance in the minimum types and amounts for the duration of this
engagement,including any renewal terms, and furnish certificates of insurance as evidence thereof.
Coverage and Limits: Commercial General Liability-$1,000,000 each occurrence;$2,000,000
aggregate.Automobile Coverage: $1,000,000 each accident on a combined single limit basis.
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Automobile coverage shall be on any vehicle used by D&T,its employees, agents,representatives in
the course of the providing services under this engagement. "Any vehicle"shall be any vehicle
owned,hired and non-owned. Worker's Compensation: statutory limits. Professional Liability
(Errors and Omissions): $1,000,000 each claim limit;$1,000,000 aggregate limit.Professional
Liability coverage may be provided through an endorsement to the Commercial General Liability
(CGL)policy, or a separate policy specific to Professional E&O. Either is acceptable if coverage
meets all other requirements. Professional Liability(Errors and Omissions)Coverage may be
claims-made,and maintained for the duration of the engagement and for two(2)years following
completion of services provided, if commercially available. An annual certificate of insurance shall
be submitted to the Lancaster Corridor Redevelopment to evidence coverage.
Certificates. Certificates of Insurance evidencing that D&T has obtained all required insurance shall
be delivered to the Lancaster Corridor Redevelopment prior to D&T proceeding with any work
pursuant to this engagement. The commercial general liability and automobile liability policies shall
be endorsed to include the Lancaster Corridor Redevelopment as an additional insured thereon, as its
interests may appear. The term Lancaster Corridor Redevelopment shall include its employees,
officers, officials,agent and volunteers in respect to the contracted services.Any failures on the part
of the Lancaster Corridor Redevelopment to request required insurance documentation shall not
constitute a waiver of the insurance requirement.D&T will endeavor to provide a minimum of thirty
(30)days' notice of cancellation of coverage to the Lancaster Corridor Redevelopment. Ten(10)
days' notice shall be acceptable in the event of non-payment of premium.Notice shall be sent to
Lancaster Corridor Redevelopment,through the City of Fort Worth, 1000 Throckmorton Street, Fort
Worth, Texas,76102 with copies to the City of Fort Worth Attorney at the same address.
9. Termination. The Lancaster Corridor Redevelopment may terminate this engagement if D&T fails
to cure a material breach within thirty(30)calendar days of receipt of written notice being given of
such material breach. If more than thirty (30)calendar days are required to cure such material
breach, a reasonable time in excess of said days may be established,provided both parties agree in
writing as to the time period. In the event such material breach is not cured within the specified time,
the Lancaster Corridor Redevelopment shall have the right terminate this engagement immediately
upon expiration of the specified time and upon written notice to D&T. The Lancaster Corridor
Redevelopment may terminate this engagement for any reason,with or without cause,upon ninety
(90)days written notice to D&T. In the event that this engagement is terminated prior to the
expiration date, D&T shall immediately discontinue all services or the entering into contracts in
connection with the performance of this engagement and shall return all records of the Lancaster
Corridor Redevelopment that have been submitted to D&T for purposes of completion of the then
current audit. The Lancaster Corridor Redevelopment shall pay D&T for services actually rendered
and expenses incurred up to the effective date of termination and D&T shall continue to provide the
Lancaster Corridor Redevelopment with services requested by the Lancaster Corridor
Redevelopment and in accordance with this engagement up to the effective date of termination.
D&T shall not be entitled to lost or anticipated profits should the Lancaster Corridor Redevelopment
choose to exercise its option to terminate.
D&T may terminate this engagement at any time, immediately upon written notice to the Lancaster
Corridor Redevelopment if D&T determines that the performance of any part of the services under
this engagement letter would be in conflict with law,or applicable independence or professional
rules or standards. In such case,the Lancaster Corridor Redevelopment shall compensate D&T
under the engagement letter for services provided and expenses incurred up to and including the
effective date of termination.
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10. INDEMNIFICATION/LIABILITY.D&T SHALL INDEMNIFY AND HOLD THE
LANCASTER CORRIDOR REDEVELOPMENT AND ITS OFFICERS,AGENTS AND
EMPLOYEES HARMLESS FROM AND AGAINST ALL LIABILITY,EXPENSE,INCLUDING
REASONABLE DEFENSE COSTS AND REASONABLE LEGAL FEES,AND CLAIMS FOR
DAMAGES, IN EACH CASE SOLELY FOR BODILY INJURY,DEATH OR DAMAGE TO
REAL OR TANGIBLE PERSONAL PROPERTY,TO THE EXTENT DIRECTLY AND
PROXIMATELY CAUSED BY THE NEGLIGENCE OR WILLFUL MISCONDUCT OF D&T
WHILE ENGAGED IN THE PERFORMANCE OF SERVICES HEREUNDER;PROVIDED,
HOWEVER, THAT IF THERE ALSO IS FAULT ON THE PART OF THE LANCASTER
CORRIDOR REDEVELOPMENT OR ANY ENTITY OR INDIVIDUAL INDEMNIFIED
HEREUNDER OR ANY ENTITY OR INDIVIDUAL ACTING ON THE LANCASTER
CORRIDOR REDEVELOPMENT'S BEHALF,THE FOREGOING INDEMNIFICATION SHALL
BE ON A PROPORTIONATE RESPONSIBILITY BASIS.ACCORDINGLY,THE LANCASTER
CORRIDOR REDEVELOPMENT SHALL NOTIFY D&T PROMTLY,IN WRITING,OF ANY
CLAIM OR ACTION FOR WHICH INDEMNITY SHALL BE SOUGHT IN CONNECTION
WITH THIS PARAGRAPH 10. ON SUCH NOTIFICATION,D&T SHALL PROMPTLY
ASSUME RESPONBILITY FOR AND DEFEND OR SETTLE ANY AND ALL CLAIMS OR
ACTIONS DESCRIBED ABOVE WITH COUNSEL OF ITS OWN CHOOSING. THE
LANCASTER CORRIDOR REDEVELOPMENT SHALL COOPERATE IN ALL REASONABLE
RESPECTS WITH D&T IN CONNECTIONS WITH ANY SUCH CLAIM.
11. Disclosure of Conflicts and Confidential Information.D&T hereby represents to the Lancaster
Corridor Redevelopment that to the knowledge of the engagement leader providing services
hereunder, it has made full disclosure of any existing conflicts of interest related to D&T's services
under this engagement. In the event that any conflicts of interest arise after the effective date of the
engagement letter,D&T hereby agrees promptly to make full disclosure to the Lancaster Corridor
Redevelopment.D&T further agrees that it shall treat all information provided to it by the Lancaster
Corridor Redevelopment as confidential and shall not disclose any such information to a third party
without the prior written approval of the Lancaster Corridor Redevelopment,using at least the same
degree of care as it employs in maintaining in confidence its own confidential information of a
similar nature, but in no event less than a reasonable degree of care.Notwithstanding the foregoing,
the Lancaster Corridor Redevelopment hereby consents to D&T disclosing such information(1)to
its contractors providing administrative, infrastructure and other support services to D&T and its
subcontractors providing services in connection with this engagement,in each case,whether located
within or outside of the United States,provided that such contractors and subcontractors have
agreed to be bound by confidentiality obligations similar to those in this paragraph; (2)as may be
required by law, or regulation or to respond to governmental inquiries, or in accordance with
applicable professional standards or rules,or in connection with litigation or arbitration pertaining
hereto; or(3) to the extent such information(i)is or becomes publicly available other than as the
result of a disclosure in breach hereof, (ii)becomes available to D&T on a non-confidential basis
from a source that D&T believes is not prohibited from disclosing such information to D&T, (iii)is
already known by D&T without any obligation of confidentiality with respect thereto, or(iv)is
developed by D&T independently of any disclosures made to D&T hereunder. In satisfying its
obligations under this paragraph,D&T shall maintain the Lancaster Corridor Redevelopment's trade
secrets and proprietary or confidential information in confidence using at least the same degree of
care as it employs in maintaining in confidence its own trade secrets and proprietary or confidential
information,but in no event less than a reasonable degree of care.
12. Richt to Review.D&T agrees that the Lancaster Corridor Redevelopment shall,until the expiration
of three(3)years after conclusion of any audit commenced during the said three years,have access
to and the right to examine at reasonable times any directly pertinent books and records of D&T
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involving transactions relating to this engagement at no additional cost to the Lancaster Corridor
Redevelopment. D&T agrees to provide the Lancaster Corridor Redevelopment with copies of all
such documentation at D&T's sole cost and expense. The Lancaster Corridor Redevelopment shall
give D&T reasonable advance notice of intended reviews. The Lancaster Corridor Redevelopment's
right above shall be limited only to those books and records that are necessary to substantiate D&T's
invoices hereunder and D&T shall have the right to redact such books and records to the extent it
deems necessary to protect its proprietary and confidential information and address any privacy
concerns.
13. Compliance with Laws.D&T agrees that in the performance of its obligations hereunder, it will
comply with all applicable federal,state and local laws, ordinances,rules and regulations and that
any work it produces in connection with this engagement will also comply with all applicable
federal, state and local laws, ordinances,rules and regulations.
14. Non-discrimination Covenant.D&T agrees that in the performance of its duties and obligations
hereunder, it shall not discriminate in the treatment or employment of any individual or group of
individuals on any basis prohibited by law.
15. Notices.Notices required pursuant to the provisions of this engagement shall be conclusively
determined to have been delivered when(1)hand-delivered to the other party, its agents,employees,
servants or representatives,(2)delivered by facsimile with electronic confirmation of the
transmission, or(3)received by the other parry by United States Mail,registered,return receipt
requested,addressed as follows:
Lancaster Corridor Redevelopment,LLC Deloitte and Touche LLP
Attn: Henry Day Attn: Reem Samra
1000 Throckmorton 201 Main Street
Fort Worth TX 76102 Fort Worth TX 76102
Facsimile: (817)392-8966 Facsimile: (214) 880-5376
16. Governing Law/Venue. This engagement shall be construed in accordance with the laws of the
State of Texas. In the event that the parties do not agree to resolve a Dispute through binding
arbitration,venue for any action,whether real or asserted, at law or in equity,brought pursuant to
this engagement shall lie in state courts located in Tarrant County,Texas or the United States
District Court for the Northern District of Texas,Fort Worth Division.
17. Review of Counsel. The parties acknowledge that each party and its counsel have reviewed and
revised this engagement letter and that the normal rules of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed in the interpretation
of this engagement letter or exhibits hereto.
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APPENDIX E
DISPUTE RESOLUTION PROVISION
This Appendix E is part of the engagement letter dated December 17,2015, between Deloitte&
Touche LLP and the Lancaster Corridor Redevelopment.
This Dispute Resolution Provision sets forth the dispute resolution process and procedures applicable to
the resolution of Disputes and shall apply to the fullest extent of the law,whether in contract,statute,tort
(such as negligence), or otherwise.
Mediation: All Disputes shall be first submitted to nonbinding confidential mediation by written notice
to the parties, and shall be treated as compromise and settlement negotiations under the standards set forth
in the Federal Rules of Evidence and all applicable state counterparts,together with any applicable
statutes protecting the confidentiality of mediations or settlement discussions. Mediation shall be held in
Tarrant County, Texas,and the parties shall make a good faith effort to agree on a mediator. If the parties
cannot agree on a mediator,the International Institute for Conflict Prevention and Resolution("CPR"), at
the written request of a party,shall designate a mediator.
Arbitration Procedures: If a Dispute has not been resolved within 90 days after the effective date of the
written notice beginning the mediation process(or such longer period, if the parties so agree in writing),
the mediation shall terminate, and upon written consent of an authorized representative of each of the
parties,the Dispute shall be settled by binding arbitration to be held in Tarrant County,Texas. The
arbitration shall be solely between the parties and shall be conducted in accordance with the CPR Rules
for Non-Administered Arbitration that are in effect at the time of the commencement of the arbitration,
except to the extent modified by this Dispute Resolution Provision(the"Rules").
The arbitration shall be conducted before a panel of three arbitrators.Each of the Lancaster Corridor
Redevelopment and Deloitte&Touche LLP shall designate one arbitrator in accordance with the
"screened"appointment procedure provided in the Rules and the two party-designated arbitrators shall
jointly select the third in accordance with the Rules.No arbitrator may serve on the panel unless he or she
has agreed in writing to enforce the terms of the engagement letter(including its appendices)to which
this Dispute Resolution Provision is attached and to abide by the terms of this Dispute Resolution
Provision.Except with respect to the interpretation and enforcement of these arbitration procedures
(which shall be governed by the Federal Arbitration Act),the arbitrators shall apply the laws of the State
of Texas(without giving effect to its choice of law principles)in connection with the Dispute. The
arbitrators shall have no power to award punitive,exemplary or other damages not based on a party's
actual damages(and the parties expressly waive their right to receive such damages). The arbitrators may
render a summary disposition relative to all or some of the issues,provided that the responding party has
had an adequate opportunity to respond to any such application for such disposition.Discovery shall be
conducted in accordance with the Rules.
All aspects of the arbitration shall be treated as confidential, as provided in the Rules. Before making any
disclosure permitted by the Rules, a party shall give written notice to all other parties and afford such
parties a reasonable opportunity to protect their interests.Further,judgment on the arbitrators' award may
be entered in any court having jurisdiction.
Costs: Each party shall bear its own costs in both the mediation and the arbitration;however,the parties
shall share the fees and expenses of both the mediators and the arbitrators equally.
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APPENDIX F
COORDINATION OF THE ENGAGEMENT
This Appendix F is part of the engagement letter dated December 17, 2015,between Deloitte&
Touche LLP and the Lancaster Corridor Redevelopment.
We will plan the performance of our audit in accordance with the following estimated timetable:
Estimated Targeted for
to Begin Completion
Audit Performance Schedule:
November December
Planning 2015 2015
Audit procedures November January 2015
2015
Board of Directors Communications:
Report on the basic financial statements March 2016
Report on the Lancaster Corridor Redevelopment's internal
control over financial reporting and on compliance and other March 2016
matters based on an audit of financial statements performed in
accordance with government auditing standards
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APPENDIX G
CIRCUMSTANCES AFFECTING TIMING AND FEE ESTIMATE
This Appendix G is part of the engagement letter dated December 17,2015,between Deloitte&
Touche LLP and the Lancaster Corridor Redevelopment.
The fees quoted for the engagement are based on certain assumptions. Circumstances may arise during
the engagement that may significantly affect the targeted completion dates or our fee estimate.As a result,
changes to the fees may be necessary. Such circumstances include but are not limited to the following:
Facilitation of the Engagement
1. Changes to the timing of the engagement at the Lancaster Corridor Redevelopment's request.
Changes to the timing of the engagement usually require reassignment of personnel used by D&T in
the performance of services hereunder. However, because it is often difficult to reassign individuals
to other engagements,D&T may incur significant unanticipated costs.
2. All requested information, including documentation of the Company's internal control over financial
reporting, is not(a)provided by the Lancaster Corridor Redevelopment on the date requested,
(b)completed in a format acceptable to D&T, (c)mathematically correct, or(d)in agreement with the
appropriate Company records (e.g.,general ledger accounts, completed trial balance).D&T will
provide the Company with a separate listing of required schedules, information requests, and the
dates such items are needed.
3. Significant delays in responding to our requests for information, such as [reconciling variances,
providing requested supporting documentation(e.g.,invoices, contracts,and other documents),or
responding to our inquiries of Lancaster Corridor Redevelopment management.
4. Deterioration in the quality of the Lancaster Corridor Redevelopment's accounting records during the
current-year engagement in comparison with the prior-year engagement.
5. A completed trial balance,referenced to the supporting analyses and schedules and financial
statements [and interim financial information, is not provided timely by the Lancaster Corridor
Redevelopment's personnel
6. Draft financial statements with appropriate supporting documentation are not prepared accurately and
timely by the Lancaster Corridor Redevelopment's personnel.
7. Electronic files in an appropriate format and containing the information requested are not provided by
the Lancaster Corridor Redevelopment on the date requested for our use in performing file
interrogation.D&T will provide the Lancaster Corridor Redevelopment with a separate listing of the
required files and the dates the files are needed.
8. The engagement team,while performing work on the Lancaster Corridor Redevelopment's premises,
is not provided with high-speed access to the Internet for purposes of conducting the engagement.
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Significant Issues or Changes
9. Significant deficiencies or material weaknesses in the design or operating effectiveness of the
Lancaster Corridor Redevelopment's internal control over financial reporting are identified during our
audit that result in an expansion of our audit procedures on the related financial statement accounts.
10. A significant level of proposed audit adjustments is identified during our engagement.
11. A significant number of drafts of the financial statements are submitted for our review,or we identify
a significant level of deficiencies in the draft financial statements
12. Significant new issues or changes as follows:
a. Significant new accounting issues.
b. Significant changes in accounting policies or practices from those used in prior years.
c. Significant events or transactions not contemplated in our budgets.
d. Significant changes in the Lancaster Corridor Redevelopment's financial reporting process or
Information Technology systems.
e. Significant changes in the Lancaster Corridor Redevelopment's accounting personnel,their
responsibilities,or their availability.
f. Significant changes in auditing standards
g. Significant changes in the Company's use of specialists,or the specialists or their work product
does not meet the qualifications required by generally accepted auditing standards,generally
accepted government auditing standards,the AICPA standards for our reliance upon their work.
13. The procedures necessary to adopt any new Statements of Government Accounting Standards have
not been completed by the Lancaster Corridor Redevelopment's personnel.
14. Changes in audit scope caused by events that are beyond our control.
Payment for Services Rendered
15. Without limiting its rights or remedies,D&T may halt or terminate its services entirely if payment is
not received within 30 days of the date of the invoice.
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