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Contract 43779 (2)
PROFESSIONAL SERVICES AGREEMEN ITY SECRETARY '�'� ONTRACT NCB. ,� , 7j,„„ This PROFES S IONAL SERVICES AGREEMENT ("Agreement") is made and entered into by and between the CITY OF FORT WORTH (the "City"), a home rule municipal corporation of the State of Texas, acting by and through Susan Alanis, its duly authorized Assistant City Manager, and Crowe Horwath LLP ("Consultant"), an Indiana limited liability partnership and acting by and through Kevin W. Smith, its duly authorized representative, individually referred to as a "party," collectively referred to as the "parties." 1. SCOPE OF SERVICES. Consultant hereby agrees to provide the City with professional consulting services for the purpose of completing the City's 2012 Comprehensive Annual Financial Report (CAFR). Attached hereto and incorporated for all purposes incident to this Agreement is Exhibit "A," Statement of Work, more specifically describing the services to be provided hereunder. This service will be provided in accordance with the Standards for Consulting Services established by the American Institute of Certified Public Accountants. The extent and sufficiency of the services and procedures to be performed will be determined with the City and are the sole responsibility of the management of the City. 2. TERM. This Agreement shall commence upon the last date that both parties have executed this Agreement ("Effective Date"), and shall, unless terminated earlier in accordance with Section 4, remain in effect until completion of all services for the 2012 CAFR as contemplated herein, but not later than September 30, 2013. The City shall have the option to renew this Agreement, at the City's discretion, for two additional one year options for completion of the 2013 CAFR and the 2014 CAFR. 3. COMPENSATION. The City shall pay Consultant an amount not to exceed $1,300,000.00 ("Contract Amount") in accordance with the provisions of this Agreement and the Payment Schedule attached as Exhibit "B," which is incorporated for all purposes herein. Consultant shall not perform any additional services for the City not specified by this Agreement unless the City requests and approves in writing the additional costs for such services. The City shall not be liable for any additional expenses of Consultant not specified by this Agreement unless the City first approves such expenses in writing. 4. TERMINATION. 4.1 Default. In the event of a default, the defaulting party must be given written notice specifying the event of default and a minimum of thirty (30) days to cure such default (the "cure period"). If the default is not cured within the cure period to the satisfaction of the non -defaulting party, then the non -defaulting party shall have the right to terminate the Agreement immediately upon written notice. Page 1 OF EI t9P P-, RL ©Ot ©ITV $)la9J1\ li»R11 4.2 Non -appropriation of Funds In the event no funds or insufficient funds are appropriated by the City in any fiscal period for any payments due hereunder, City will notify Consultant of such occurrence and this Agreement shall terminate on the last day of the fiscal period for which appropriations were received without penalty or expense to the City of any kind whatsoever, except as to the portions of the payments herein agreed upon for which funds shall have been appropriated 4.3 Duties and Obligations of the Parties In the event that this Agreement is terminated prior to the completion of all services contemplated herein, the City shall pay Consultant for services actually rendered up to the effective date of termination and Consultant shall continue to provide the City with services requested by the City and in accordance with this Agreement up to the effective date of termination. 5. DISCLOSURE OF CONFLICTS AND CONFIDENTIAL INFORMATION. Consultant hereby warrants to the City that Consultant has made full disclosure in writing of any existing or potential conflicts of interest related to Consultant s services under this Agreement. In the event that any conflicts of interest arise after the Effective Date of this Agreement, Consultant hereby agrees immediately to make full disclosure to the City in writing. Consultant, for itself and its officers, agents and employees, further agrees that it shall treat all information provided to it by the City as confidential and shall not disclose any such information to a third party without the prior written approval of the City. Consultant shall store and maintain City Infoimation m a secure manner and shall not allow unauthorized users to access, modify, delete or otherwise corrupt City Information in any way. Consultant shall notify the City immediately if the security or integrity of any City information has been compromised or is believed to have been compromised. 6. RIGHT TO AUDIT. Consultant agrees that the City shall, during the initial term, during any renewal terms, and until the expiration of three (3) years after final payment under this conti act, have access to and the right to examine at reasonable times any invoices workpapers, including but not limited to documents and information retained by Consultant to support processes, procedures, and conclusions reached by Consultant, timesheets and any relevant records of the Consultant involving transactions i elating to this Contract at no additional cost to the City. Consultant agrees that the City shall have access during normal working hours to all necessary Consultant facilities and shall be provided adequate and appropriate work space in order to conduct audits in compliance with the provisions of this section. The City shall give Consultant reasonable advance notice of intended audits. Consultant further agrees to include in all its subcontractor agreements hereunder a provision to the effect that the subcontractor agrees that the City shall, during the initial term, during any renewal terms, and until expiration of three (3) years after final payment of the subcontract, have access to and the right to examine at reasonable times any invoices, Professional Services Agreement Page 2 workpapers, including but not limited to documents and information retained by subcontractor to support processes, procedures and conclusions leached by subcontractor, timesheets and any relevant records of the subcontractor involving transactions relating to the subcontract, and further that City shall have access during normal working hours to all subcontractor facilities and shall be provided adequate and appropriate work space in order to conduct audits in compliance with the provisions of this paragraph. City shall give subcontractor reasonable notice of intended audits 7. INDEPENDENT CONTRACTOR. It is expressly understood and agreed that Consultant shall operate as an independent contractor as to all rights and privileges granted herein, and not as agent, representative or employee of the City. Subject to and in accordance with the conditions and provisions of this Agreement, Consultant shall have the exclusive right to control the details of its operations and activities and be solely responsible for the acts and omissions of its officers, agents, servants, employees, contractors and subcontractors. Consultant acknowledges that the doctrine of respondent superior shall not apply as between the City its officers, agents, servants and employees, and Consultant, its officers agents, employees, servants, contractors and subcontractors. Consultant further agrees that nothing herein shall be construed as the creation of a partnership or joint enterprise between City and Consultant. 8. LIMIATATION OF LIABILITY AND INDEMNIFICATION. EXCEPT FOR TANGIBLE PROPERTY DAMAGE CLAIMS OR PERSONAL INJURY CLAIMS, INCLUDING DEATH CONSULTANT'S LIABILITY TO CITY HEREUNDER FOR DAMAGES, REGARDLESS OF THE LEGAL THEORY OF THE CLAIM (INCLUDING NEGLIGENCE), SHALL NOT EXCEED THREE (3) TIMES THE TOTAL CONTRACT AMOUNT THIS LIMITATION OF LIABILITY IS INTENDED TO APPLY TO THE FULL EXTENT ALLOWED BY LAW. THIS LIMITATION OF LIABILITY SHALL ALSO APPLY AFTER TERMINATION OF THIS AGREEMENT CONSULTANT SHALL BE LIABLE AND RESPONSIBLE FOR ANY AND ALL TANGIBLE PROPERTY DAMAGE AND/OR PERSONAL INJURY INCLUDING DEATH, TO ANY AND ALL PERSONS, OF ANY KIND OR CHARACTER WHETHER REAL OR ASSERTED, TO THE EXTENT CAUSED BY THE NEGLIGENT ACT(S) OR OMISSION(S) MALFEASANCE OR INTENTIONAL MISCONDUCT OF CONSULTANT, ITS OFFICERS AGENTS, SERVANTS OR EMPLOYEES. CONSULTANT COVENANTS AND AGREES TO AND DOES HEREBY INDEMNIFY HOLD HARMLESS AND DEFEND THE CITY, ITS OFFICERS AGENTS, SERVANTS AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS OR LAWSUITS FOR EITHER TANGIBLE PROPERTY DAMAGE AND/OR PERSONAL INJURY, INCLUDING DEATH, TO ANY AND ALL PERSONS OF ANY KIND OR CHARACTER WHETHER REAL OR ASSERTED, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, TO THE EXTENT CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS OR MALFEASANCE OF CONSULTANT, ITS OFFICERS, AGENTS, SERVANTS OR EMPLOYEES Professional Services Agreement Page 3 9. ASSIGNMENT AND SUBCONTRACTING. Consultant shall not assign or subcontract any of its duties, obligations or rights under this Agreement without the prior written consent of the City If the City grants consent to an assignment the assignee shall execute a written agreement with the City and the Consultant under which the assignee agrees to be bound by the duties and obligations of Consultant under this Agreement. The Consultant and Assignee shall be jointly liable foi all obligations under this Agreement prior to the assignment. If the City grants consent to a subcontract, the subcontractor shall execute a written agreement with the Consultant referencing this Agreement under which the subcontractor shall agree to be bound by the duties and obligations of the Consultant under this Agreement as such duties and obligations may apply. The Consultant shall provide the City with a fully executed copy of any such subcontract. 10. INSURANCE. Consultant shall provide the City with certificate(s) of insurance documenting policies of the following minimum coverage limits that are to be in effect prior to commencement of any work pursuant to this Agreement: 10.1 Coverage and Limits (a) Commercial General Liability $1,000,000 Each Occurrence $1,000,000 Aggregate (b) Automobile Liability $1,000,000 Each accident on a combined single limit basis Coverage shall be on any vehicle used by the Consultant, its employees, agents, representatives in the course of the providing services under this Agreement. "Any vehicle" shall be any vehicle owned, hired and non -owned. (c) Worker's Compensation Statutory Limits $100,000 Each accident/occurrence $100,000 Disease — per each employee $500,000 Disease — policy limit This coverage may be written as follows: Workers' Compensation and Employers' Liability coverage with limits consistent with statutory benefits outlined in the Texas Workers Compensation Act (Art. 8308 - 1.01 et seq Tex. Rev. Civ Stat.) and minimum policy limits for Employers' Liability of $100,000 each accident/occurrence $500,000 bodily injury disease policy limit and $100,000 per disease per employee. Professional Services Agreement Page 4 (d) Professional Liability (Errors & Omissions) including Technology Liability $1,000,000 Each Claim Limit $1,000,000 Aggregate Limit Technology coverage may be provided through an endorsement to the Professional Liability policy, or a separate policy specific to Technology E&O Either is acceptable if coverage meets all other requirements. Coverage shall be claims -made, and maintained for the duration of the contractual agreement and for two (2) years following completion of services provided An annual certificate of insurance shall be submitted to the City to evidence coverage. 10.2 Certificates. (a) Certificates of Insurance evidencing that the Consultant has obtained all required insurance shall be delivered to the City Manager's Office prior to Consultant proceeding with any work pursuant to this Agreement. The Commercial General Liability and Auto Liability policies shall be endorsed to name the City as an additional insured thereon, as its interests may appear. The term "City" shall include its employees, officers, officials, agent, and volunteers in respect to the contracted services. Any failure on the part of the City to request required insurance documentation shall not constitute a waiver of the insurance requirement. (b) Consultant shall endeavor to provide a minimum of thirty (30) days notice of cancellation or reduction in limits of coverage to the City. Ten (10) days notice shall be acceptable in the event of non-payment of premium Such items shall be endorsed onto Consultant's insurance policies Notices shall be sent to the Rick Manage, City of Fort Worth, 1000 Throckmorton Street, Fort Worth, Texas 76102, with copies to the City Attorney at the same address. 11. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND EGULATIONS. Each part agrees to comply with all applicable federal, state, and local laws, ordinances, rules and regulations. If the City notifies Consultant of any violation of such laws, ordinances, rules or regulations, Consultant shall desist from and correct the violation. 12. NON-DISCRIMINATION COVENANT. Consultant for itself, its personal representatives assigns, subcontractors and successors in interest, as part of the consideration herein, agrees that in the performance of Consultant's 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. If any claim arises from an alleged violation of this non-discrimination covenant by Consultant, its personal representatives, assigns, subcontractors or successors in interest, Consultant agrees to assume such liability and to indemnify and defend the City and hold the City harmless from such claim. Professional Services Agreement Page 5 13. NOTICES Notices requiied pursuant to the provisions of this Agreement 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 party by United States Mail, registered, return receipt requested, addressed as follows: To The CITY: To CONSULTANT: City of Fort Worth Crowe Horwath LLP Attn: Susan Alanis Attn: Kevin W Smith Assistant City Manager Partner 1000 Throckmorton Street 400 Las Colinas Boulevard East, Ste 200 Fort Worth, Texas 76102-6311 Irving, TX 75039-6292 Facsimile 817-392-6134 Facsimile: 214-574-1002 14. SOLICITATION OF EMPLOYEES Neither the City nor Consultant shall, during the term of this agreement and additionally for a petiod of one year after its termination solicit for employment or employ, whether as employee or independent contractor, any person who is or has been employed by the other during the term of this agreement, without the prior written consent of the person's employer. 15. GOVERNMENTAL POWERS. It is understood and agreed that by execution of this Agreement, the City does not waive or surrender any of its governmental powers. 16. NO WAIVER. The failure of the City or Consultant to insist upon the performance of any term or provision of this Agreement or to exercise any right granted herein shall not constitute a waiver of the City's or Consultant's respective right to insist upon appropriate performance or to assert any such right on any future occasion. 17. GOVERNING LAW/VENUE This Agreement shall be construed in accordance with the internal laws of the State of Texas. If any action, whether real or asserted, at law or in equity, is brought on the basis of this Agreement, venue for such action 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. 18. SEVERABILITY. If any provision of this Agreement is held to be invalid, illegal or unenforceable, the validity legality and enforceability of the remaining provisions shall not in any way be affected or impaired. Professional Services Agreement Page 6 19. FORCE MAJEURE. The City and Consultant shall exercise their best efforts to meet their respective duties and obligations as set forth in this Agreement but shall not be held liable for any delay or omission in performance due to force majeure or other causes beyond their reasonable control (force majeure), including, but not limited to, compliance with any government law, ordinance or regulation, acts of God, acts of the public enemy, fires, strikes, lockouts, natural disasters, wars, riots material or labor restrictions by any governmental authority, transportation problems and/or any other similar causes. 20. CHANGES IN LAWS, REGULATIONS OR RULES. Consultant may periodically communicate changes in laws, regulations, or rules to the City. However, the City has not engaged the Consultant to and Consultant does not undertake an obligation to advise the City of changes in laws, regulations, rules, industry or market conditions, the City's own business practices, or other circumstances, except to the extent required by professional standards. No advice Consultant may provide should be construed to be investment advice. 21. MEDIATION. If a dispute arises in whole or in part, out of or related to this engagement, or after the date of this agreement, between the City and the Consultant, and if the dispute cannot be settled through negotiation, the City and the Consultant agree first to try in good faith to settle the dispute by non -binding mediation administered by the American Arbitration Association under its mediation rules for professional accounting and related services disputes before resorting to litigation or other dispute -resolution procedure. 22. NO PUNITIVE OR CONSEQUENTIAL DAMAGES. Any liability of either party to the other party shall not include any special, consequential, incidental punitive, or exemplary damages or loss nor any lost profits, savings, or business opportunity. 23. HEADINGS NOT CONTROLLING. Headings and titles used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement 24. REVIEW OF COUNSEL The parties acknowledge that each party and its counsel have reviewed and revised this Agreement 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 Agreement or exhibits thereto. Professional Services Agreement Page 7 25. AMENDMENTS/MODIFICATIONS/EXTENSIONS. No extension, modification or amendment of this Agieement shall be binding upon a party hereto unless such extension. Modification of amendment is set forth in a written instrument which is executed by an authorized representative and delivered on behalf of such party. 26. ENTIRETY OF AGREEMENT. This Agreement, including the schedule of exhibits attached hereto and any documents incorporated herein by reference, contains the entire understanding and agreement between the City and Consultant, their assigns and successors in interest, as to the matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and void to the extent in conflict with any provision of this Agreement 27. SIGNATURE AUTHORITY. The person signing this agreement hereby warrants that he/she has the legal authority to execute this agreement on behalf of the respective party, and that such binding authority has been granted by proper order, resolution, ordinance or other authorization of the entity. The other party is fully entitled to rely on this warranty and representation in entering into this Agreement. 28. AFFILIATES. Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Ciowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International. Crowe Horwath International does not render any professional services and does not have an ownership or partnership interest in Crowe Horwath LLP. Crowe Horwath International and its other member firms ate not responsible or liable for any acts of omissions of Crowe Horwath LLP and specifically disclaim any and all responsibility of liability for acts or omissions of Crowe Horwath LLP Notwithstanding anything to the contrary in this section, in the event that Crowe Horwath LLP assigns or subcontracts any portion of this Agreement to a Crowe Horwath International affiliate, such assignment or subcontract shall be subject to the other terms of this Agreement [Signature page follows] Professional Services Agreement Page 8 In wit ess whe eof, the parties hereto have executed this agreement in multiples this, of ` , 2012. CITY OF FORT WORTH: By: Date: Susan s lanis ant City Manager al 0 I `6) 7(- Approved as to form and legality: By: c Assistant Cit ttorney CONTRACT AUTHORIZATION: M&C: -1iu33 Date Approved: CROWE HORWATH LLP: By: Kevin W. Smith Partner Date: October 2 , 2012 cow&o -aobuAA Aoo�°oaoopa� fit; ett o gab: %4'O� v M (?•%4 0me; o pi 0 00 i 4r 41 statir' Page 9 OPPICIAL RECORD C1YT $ECRETARt cc WORTIVIX i y EXHIBIT A STATEMENT OF WORK 1. Assist City staff and provide additional governmental accountants, as needed, to produce and publish the Fiscal Year (FY) 2012 Comprehensive Annual Financial Report (CAFR) by Maich 19, 2013. The Consultant will not be required to beat the responsibility for the audit opinion The Consultant shall make every effort to provide timely and accurate information that would result in an unqualified opinion. 2. The services provided by the Consultant for the 2012 CAFR shall include: (a) Assist in the development and timing of Auditor Required PBC Schedule, (b) Participate in weekly status meetings with the City and external auditor to discuss open audit requests, audit findings, and the overall status of the audit. (c) Participate in bi-weekly meetings with City management to discuss City issues or risks that may affect the audit process, audit findings, and the City's response to those findings, and the overall status of the audit. (d) Coordinate, under the direction of the City Controller, the various efforts of departments City-wide to receive additional audit requests and provide training to the departments to help ensure departmental audit documentation meets the needs of the auditors. (e) Review year-end Balance Sheet Accounts across Funds for unnatural balances, variances or other potential issues. Review and instruct City staff on the preparation of Revenue and Expenditure Variance Analyses across Funds. Review staff prepared PBC schedules. (f) (g) (h) Review the City's capital asset work plan and provide comments on plan. Identify mutually agreed to review points of progress on work plan and provide comments. Perform certain analytical, mathematical and technical tests of the roll forwards throughout the preparation. Review capital asset additions, deletions and depreciation schedules prepared by the City for accuracy and completeness and report any errors or concerns to the appropriate City representative to resolve and assist with final resolution of errors and concerns. (i) Review City's accounts payable accrual process to help the City determine if all payables reviewed by the City were properly accrued. (j) Assist City staff in the preparation of responses to prior year audit findings and help prepare or contest current year audit findings. (k) Assist City staff in the preparation of all draft and final CAFR's including Government -Wide Statements, Footnotes, Combining Schedules, Supplemental Infornitation and Statistical Section. Exhibit A Page 1 Review CAFR draft for completeness and compliance with the GFOA checklist and responses to prior year comments/observations. (n) Review Single Audit Report draft for completeness and compliance with OMB Circular A-133 and responses to prior year comments/observations. Assist City staff in responding to auditor questions. Assist City staff in completing requests for additional information from auditors. Review final CAFR for completeness and compliance with the GFOA checklist, the GFOA application, and responses to prior year comments, and provide comments. (r) Print and deliver final CAFR and Single Audit Report. 3. Project Phases (a) Phase 1 — Plan the Project (organize the effort) i. Task 1 — Entrance Conference and Audit Kickoff ii. Task 2 — Project Plan Development iii. Deliverables: 1. Project plan with Engagement Timeline 2. Routine status report on completion of Project Plan (b) Phase 2 — CAFR Preparation i. Task 1 — Posting of GASB 34 and Consolidating Entries ii. Task 2 — Review CAFR Document and Related Single Audit Report Schedules iii. Deliverables: (1) Assist City Staff in the preparation of all draft(s) and final Single Audit Report and SEFA. (m) (o) (p) (q) 1. Prepare and train staff on government -wide roll forward and reconciliation, 2. Advise and assist City staff in preparation of the Notes to the Financial Statements Assist City staff with implementation of new GASB Statements, Exhibit A Page 2 4. Review Draft of CAFR and provide City staff with corrections and comments, 5. Review single audit schedules and provide City staff with corrections and comments, 6. Review draft Schedule of Expenditures of Federal Awards (SEFA) and provide City staff with corrections and comments, 7. Review PBC schedules and provide City staff with corrections and comments, and 8. Provide routine status reports. Status Report should include the number of hours worked by different types of Consultant staff for each area that services are provided. (c) Phase 3 — Audit Support and Management i. Task 1 — Audit Readiness Assessment ii. Task 2 — Audit Process Assistance to the City iii. Task 3 — Assist City Staff with Audit Resolution Documents iv. Deliverables: 1. PBC schedules prepared by City staff with corrections and comments, 2. Assist City staff with audit finding responses, 3. Review final CAFR for completeness and compliance with the GFOA checklist, 4. Provide routine status reports, and 5. Print and deliver final CAFR. 4. City Responsibility (a) The City agrees to make all management decisions and perform all management functions; designate an individual who possesses suitable skill knowledge, and for experience, preferably within senior management to oversee the Consultants services: evaluate the adequacy and results of the services performed: accept responsibility for the results of the services; and establish and maintain internal controls. Including monitoring ongoing activities. (b) The City agrees to provide the Consultant timely with information requested and to make City employees available for the Consultants questions The City will provide at least one assigned City employee who will work closely with the Consultant during Exhibit A Page 3 this engagement. The assigned employee for the CAFR is Anthony Rousseau and the expected amount of hours available to the Consultant will be approximately 1 000 hours annually, during the term of the contract. If the assigned City employee is unavailable the City will replace that employee with someone of similar skills and experience, with the acceptance by the Consultant of the replacement employee such acceptance will not be unreasonably withheld by the Consultant. The assigned City employee will report to Paula Welch, City Controller, during this engagement. The assigned City employee for the CAFR will assist the Consultant with various tasks, including but not limited to the following: i. Obtain data from the City's accounting system including data mining activities, ii. Prepare and enter adjusting journal entries into the City's accounting and financial reporting systems, iii. Assist in resolving auditor questions related to audit exceptions and findings., and iv. Obtain auditee responses and corrective action plans for findings and management comments from the auditor. The City also agrees to provide additional staffing to assist the Consultant with certain activities. The additional staffing will be provided by Jerry Murrish who will assist the City and the Consultant by performing the following tasks: v. Prepare CAFR schedules including the budgetary schedules, vi. Prepare the cash flow statements for proprietary funds types, and vii. Prepare the Mayor & Council Communication (M&C) for the final budgetary appropriations. (c) The City will provide the Consultant's personnel with access to the Internet. Consultant agrees to execute the City's Network Access Agreement attached as Exhibit "C" to this contract in ordei to gain access to the Internet while working on this project. (d) The City will have all bank reconciliations prepared on a current basis with appropriate reconciling items and all corrections made to the City's general ledger. The City will also ensure that all cash basis transactions are accounted for and recorded in the City's general ledger. The Consultant is not expected to compile infoti cation for unrecorded cash transactions. The City maintains bank account, investment account, and subsidiary ledgers in a format that can be audited and that can support the transactions in the City's general ledger. (e) The City will assist the consultant by gathering relevant information, including: source documents, financial transactions from MARS, information from contactors, actuarial studies arbitrage calculations, escrow verifications economic gains or Exhibit A Page 4 losses, grant agreements, and grant documentation. All original source documentation is available in order to prepare reconciliations, audit and the CAFR If original source documentation is not available, the City assumes responsibility to resolve the issue. City staff will cooperate with requests for information such as explanation of account activity and changes in account activity from one year to the next. City staff will record all adjusting journal entries in the City's general ledger. The Consultant shall assist in identifying affected fund account centers (in accordance with the City's chart of accounts) and the dollar amounts of entries needed. The Consultant shall provide written explanations for entries needed and supporting documentation. The City is responsible for the completeness of the accounting records and the underlying supporting documentation. The City shall ensure the regular transactions of the City have been posted to the ledgers and that the trial balances are complete and accurate and are piovided to the Consultant with underlying supporting documentation, by December 6th. The City will be responsible for closing the year end records and reviewing the tiial balances for completeness and accuracy through a "Trial Balance Scrub" process. The trial balance scrub process will help ensure completeness, accuracy, and the agreement of the trial balances to underlying records and will include, but is not limited to, the following activities: i. Bank account reconciliations are complete and investment ledger roll forward information is complete and updated, ii. Property taxes gas lease transactions and other receivables, deferrals, and corresponding 1 evenues are properly recorded in the correct fund and schedules of activity are prepared, including property tax allocation schedules, gas lease schedules, and schedules maintained by City departments that were provided during the CAFR preparation process iii. Prepaid accounts have proper supporting documentation, iv. Capital asset work plan is complete. Capital asset transactions are accurate and have proper supporting documentation. ✓ . Inventory analysis is prepared by the City's Internal Audit Department and is properly recorded in the accounting records, ✓ i. Accounts, retainage, escrow, and other payable accounts are complete through search for unrecorded liabilities procedures and detail departmental records are obtained and reconciled to general ledger activity, ✓ ii. Accrued payroll, uncompensated absences, and other related liabilities are supported by detailed schedules and are in agreement with the trial balance, Exhibit A Page 5 viii. All debt related transactions, including cash investment, issuance costs, premium or discount, escrow fees, and other related activity is recorded and the related amortization schedules are prepared, ix. All interfund and intrafund activities are reconciled and in balance by fund, x. All unnatural balances are analyzed and properly adjusted or reconciled with proper supporting justification, and xi. All funds reported in the trial balance are in balance (debits/credits equal zero). (h) Beginning fund equity amounts will be reconciled to prior year audited ending fund equity. (i) Deliverables: i. Trial Balance, ii. PBC schedules for review and comment, iii. Draft reports for review and comment, 1. CAFR 2. SEFA and Single Audit Report iv. Management responses for review and comment, v. Final reports for review and comment, and 1. CAFR 2. SEFA and Single Audit Report vi. Responses to GFOA comments on previous year CAFR for review and comment. Fxhibit A Page 6 EXHIBIT B PAYMENT SCHEDULE Payments shall be made by the City on a net 30 days basis following receipt of a valid detailed invoice from the Consultant according to the following schedule. Payment items noted with an asterisk (*) will be invoiced to the City on a monthly basis until the deliverable is completed. Invoices shall be computer -generated or typewritten and shall include the City's contract number, the release purchase order number, the deliverable item provided, proof of acceptance of the deliverable by the City in the form of Exhibit "D" attached hereto and the proper dollar amount foi that item. 1. City acceptance of Deliverable: Phase 1 Project Plan with Engagement Timeline - $50,000. 2. City acceptance of Deliverables: Phase 2- Draft CAFR, Draft Single Audit Report, including the Draft Schedule of Expenditures of Federal Awards (SEFA) PBC Schedules, Audit - related Lead Schedules and Woiking papers and Status Report(s) — $910,000.00, divided as follows: a. PBC Schedules, Audit -related Lead Schedules, Working papers, and Status Report $650,000* b. Single Audit Report, including SEFA $130,000* c. Draft CAFR $130,000 3. City acceptance of Deliverables: Phase 3 -Audit Support and Management including Final CAFR, Final Single Audit Report, Support Documentation, Responses to Management Letter, and Status Report(s) - $340,000.00, divided as follows: a. Support Documentation and Status Report $200,000* b. Responses to Management Letter $40,000 c. Final CAFR and Single Audit Report including SEFA $100,000 4. Additional Services a. In the event that the City is unable to meet the date prescribed for the delivery of a complete reconciled trial balance or if the City is unable to complete the trial balance scrub activities (pursuant to Exhibit A); if the City is unable to provide staff to complete the Giant Schedules and Workbooks (pursuant to Exhibit A); or if the City is unable to provide assistance as outlined as the City Responsibility (pursuant to Exhibit A) the Consultant and the City shall negotiate additional service needs b. In the event additional services are required, the parties shall execute a written amendment to this Agreement specifically setting forth the additional services and the resulting change in compensation, if any, to be received for the services c. The Consultant will be entitled to bill the City for the additional services at a professional hourly rate of $160.00 per hour for the CAFR and Single Audit Report The City and Exhibit B Page 1 Consultant will arrive at a mutually agreed upon rate prior to the commencement of such additional services.* 5. Renewal Options Should the City decide to exercise its options per Section 2 of this Agreement, the fee for the 2013 CAFR and the 2014 CAFR will be negotiated and aie subject to scope changes, economic factors, and other circumstances that the City and Consultant mutually agree upon at the time services are to be rendered. * Designated payment item is available for monthly billing. Exhibit B Page 2 EXHIBIT C NETWORK ACCESS AGREEMENT This NETWORK ACCESS AGREEMENT ("Agreement") is made and entered into by and between the CITY OF FORT WORTH ("City') a home rule municipal corporation with its principal location at 1000 Throckmorton Street, Fort Worth, Texas 76102, organized under the laws of the State of Texas and situated in portions of Tarrant, Denton and Wise Counties, Texas, and CROWE HORWATH LLP, ("Consultant"). 1. The Network. The City owns and operates a computing environment and network (collectively the "Network"). Contractor wishes to access the City's network in order to perform activities defined in the Professional Services Agreement for the Completion of the City's C omprehensive Annual Financial Report (CAFR). In order to provide the necessary support, Contractor needs access to the City's Internet. 2. Grant of Limited Access. Consultant is hereby granted a limited right of access to the City's Network for the sole purpose of providing services related to CAFR activities as described in the Piofessional Services Agreement. Such access is granted subject to the terms and conditions forth in this Agreement and applicable provisions of the City's Administrative Regulation D-7 (Electronic Communications Resource Use Policy), of which such applicable provisions are hereby incorporated by reference and made a part of this Agreement for all purposes herein and are available upon request. 3. Network Credentials. The City will provide Consultant with Network Credentials consisting of user IDs and passwords unique to each individual requiring Network access on behalf of the Contractor. Access rights will automatically expire one (1) year from the date of this Agreement If this access is being granted for purposes of completing services for the City pursuant to a services agreement, then this Agreement will expire at the completion of the contracted services, or upon termination of the services agreement, whichever occurs first. 4. Renewal. At the end of the fiist year and each year thereafter, this Agreement may be renewed annually if the following conditions are met: 4.1 Contracted services have not been completed. 4.2 Contracted services have not been terminated. 4.3 Within the thirty (30) days prior to the scheduled annual expiration of this Agreement, the Consultant has provided the City with a current list of its officers, agents, servants, employees or representatives requiring Network credentials. Notwithstanding the scheduled contract expiration or the status of completion of services, Consultant shall provide the City with a current list of officers, agents, servants employees or representatives that require Network credentials on an annual basis. Failure to adhere to this requirement may result in denial of access to the Network and/or termination of this Agreement. 5. Network Restrictions. Consultant officer, agents, servants, employees or representatives may not share the City -assigned user IDs and passwords. Consultant Exhibit C Page 1 acknowledges agrees and hereby gives its authorization to the City to monitor Consultant's use of the City's Network in order to ensure Consultant's compliance with this Agreement. A breach by Consultant, its officers, agents, servants, employees or representatives, of this Agreement and any other written instructions or guidelines that the City provides to Consultant pursuant to this Agreement shall be grounds for the City immediately to deny Consultant access to the Network and Consultant's Data terminate the Agreement and pursue any other remedies that the City may have under this Agreements or at law or in equity 6. Termination. In addition to the other rights of termination set forth herein, the City may terminate this Agreement at any time and for any reason with or without notice, and without penalty to the City. Upon termination of this Agreement, Consultant agrees to remove entirely any client or communications software provided by the City from all computing equipment used and owned by the Consultant, its officers, agents, servants, employees and/or representatives to access the City's Network. 7. Information Security. Consultant agrees to make every reasonable effort in accordance with accepted security practices to protect the Network credentials and access methods provided by the City from unauthorized disclosure and use. Consultant agrees to notify the City immediately upon discovery of a breach or threat of breach which could compromise the integrity of the City s Network, including but not limited to, theft of Consultant -owned equipment that contains City -provided access software, termination or resignation of officers, agents, servants, employees or representatives with access to City - provided Network credentials, and unauthorized use or sharing of Network credentials. 8. LIABILITY AND INDEMNIFICATION. EXCEPT FOR TANGIBLE PROPERTY DAMAGE CLAIMS OR PERSONAL INJURY CLAIMS, INCLUDING DEATH CONSULTANT S LIABILITY TO CITY HEREUNDER FOR DAMAGES, REGARDLESS OF THE LEGAL THEORY OF THE CLAIM (INCLUDING NEGLIGENCE), SHALL NOT EXCEED THREE (3) TIMES THE TOTAL CONTRACT AMOUNT THIS LIMITATION OF LIABILITY IS INTENDED TO APPLY TO THE FULL EXTENT ALLOWED BY LAW THIS LIMITATION OF LIABILITY SHALL ALSO APPLY AFTER TERMINATION OF THIS AGREEMENT. CONSULTANT SHALL BE LIABLE AND RESPONSIBLE FOR ANY AND ALL TANGIBLE PROPERTY DAMAGE AND/OR PERSONAL INJURY, INCLUDING DEATH, TO ANY AND ALL PERSONS, OF ANY KIND OR CHARACTER, WHETHER REAL OR ASSERTED TO THE EXTENT CAUSED BY THE NEGLIGENT ACT(S) OR OMISSION(S) MALFEASANCE OR INTENTIONAL MISCONDUCT OF CONSULTANT, ITS OFFICERS, AGENTS, SERVANTS OR EMPLOYEES. CONSULTANT COVENANTS AND AGREES TO AND DOES HEREBY, INDEMNIFY, HOLD HARMLESS AND DEFEND THE CITY, ITS OFFICERS, AGENTS, SERVANTS AND EMPLOYEES, FROM AND AGAINST ANY AND ALL CLAIMS OR LAWSUITS FOR EITHER TANGIBLE PROPERTY DAMAGE AND/OR PERSONAL INJURY, INCLUDING DEATH, TO ANY AND ALL PERSONS, OFANY KIND OR CHARACTER, WHETHER REAL OR ASSERTED ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT TO THE EXTENT CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS OR MALFEASANCE OF CONSULTANT, ITS OFFICERS, AGENTS, SERVANTS OR EMPLOYEES. Exhibit C Page 2 SUBJECT TO THE LIMITATION ABOVE, CONSULTANT SHALL BE LIABLE AND RESPONSIBLE FOR ALL DAMAGES THAT THE CITY MAY INCUR DIRECTLY ON ACCOUNT OF ANY BREACH OF THIS ACCESS AGREEMENT BY CONSULTANT, ITS OFFICERS, AGENTS, SERVANTS OR EMPLOYEES. THE CITY, ITS OFFICERS, AGENTS, SERVANTS AND EMPLOYEES, SHALL NOT BE LIABLE FOR ANY DAMAGES THAT CONSULTANT MAY INCUR AS A RESULT OF THE CITY'S RESTRICTIONS TO OR DENIAL OF ACCESS TO CONSULTANT'S DATA ON ACCOUNT OF ANY BREACH OF THIS ACCESS AGREEMENT BY CONSULTANT, ITS OFFICERS AGENTS SERVANTS OR EMPLOYEES, OR FOR ANY REASONABLE SECURITY MEASURES TAKEN BY THE CITY. 1. Confidential Information. Consultant, for itself and its officers, agents, employees, and representatives, agrees that it shall treat all information provided to it by the City as confidential and shall not disclose any such information to a third party without the prior written approval of the City. Consultant further agrees that it shall store and maintain City information in a secure manner and shall not allow unauthorized users to access, modify, delete, or otherwise corrupt City information in any way. Consultant shall notify the City immediately if the security or integrity of any City information has been compromised or is believed to have been compromised. 2. Right to Audit. Consultant agrees that the City shall, during the initial term, during any renewal terms, and until the expiration of three (3) years after final payment under this contract, have access to and the right to examine at reasonable times any invoices, workpapers, including but not limited to documents and information retained by Consultant to support processes, procedures, and conclusions reached by Consultant; timesheets; and any relevant records of the Consultant involving transactions relating to this Contract at no additional cost to the City. Consultant agrees that the City shall have access during normal working hours to all necessary Consultant facilities and shall be provided adequate and appropriate work space in order to conduct audits in compliance with the provisions of this section The City shall give Consultant reasonable advance notice of intended audits. Consultant further agrees to include in all its subConsultant agreements hereunder a provision to the effect that the subConsultant agrees that the City shall, during the initial term, during any renewal terms, and until expiration of three (3) years after final payment of the subcontract, have access and the right examine at reasonable times any invoices, workpapers, including but not limited to documents and retained by subConsultant to support processes, procedures, and conclusions reached by subConsultant, timesheets and any relevant records of the subConsultant involving transactions relating to the subcontract, and further that City shall have access during noinial working hours to all subConsultant facilities and shall be provided adequate and appropriate work space in order to conduct audits in compliance with the provisions of this paragraph. City shall give subConsultant reasonable notice of intended audits. 3. Agreement Cumulative. This Agreement is cumulative of and in addition to any written contracts, agreements, understandings or acknowledgments with the City signed by Consultant. This Agreement and any other documents incorporated herein by reference constitute the entire understanding and Agreement between the City and Consultant as to the matters contained herein regarding Consultant's access to and use of the City's Network. Exhibit C Page 3 12. Amendments. The terms of this Agreement shall not be waived, altered, modified, supplemented, or amended in any manner except by written instrument signed by an authorized representative of both the City and Consultant. 13. Assignment. Consultant may not assign or in any way transfer any of its interest in this Agreement. Any attempted assignment or transfer of all or any part hereof shall be null and void. 14. Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining piovisions shall not in any way be affected or impaired. 15 Force Maieure. Each party shall exercise its best efforts to meet its respective duties and obligations as set forth in this Agreement, but shall not be held liable for any delay or omission in performance due to force majeure or, other causes beyond their reasonable control (force majeure), including but not limited to, compliance with any government law, ordinance or regulation, acts of God, acts of the public enemy, fires, strikes, lockouts, natural disasters, wars, riots, material or labor restrictions by any governmental authority transportation problems and/or any other similar causes. 16. Governing Law/Venue. This Agreement shall be construed in accordance with the laws of the State of Texas. If any action, whether real or asserted, at law or in equity is brought on the basis of this Agreement, venue for such action 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. Signature Authority The signature below of an authorized representative acknowledges that the Consultant has read this Agreement and agrees to be bound by terms and conditions set forth herein. [Signature page follows] Exhibit C Page 4 ACCEPTED AND AGREED: CITY OF FORT WORTH: By: Date: Attest: By: s Ass CA Alanis ant City Manager (DJJ ezr ary City Secretary Approved as to form and legality: By: 1 ifk Assistant Cityttorney CROWE HORWATH LLP: By: • evin W. Smith Partner Date: October 2, 2012 otic, fOit 1:44zix 47010°°°°"001Pvg* #7froce °P 0 0 10) *SO 0 0 • et argiggro Tit* g isk*°9300�,�'4' �a4n�.1l�Q '��� Exhibit C Page 5 FF8©A IL RE©O rk © ©11111 419,©RKTA 1111, V150127E19 TIN Exhibit D Acceptance Form Services Delivered: Milestone /Deliverable Ref. #: Milestone I Deliverable Name: Unit Testing Completion Date: Milestone I Deliverable Target Completion Date: Milestone I Deliverable Actual Completion Date: Approval Date: Comments (if needed): Approved by Consultant: Approved by Director: Signature: Signature: Printed Name: Printed Name: Title: Title: Date: Date: For Director Use Only Contracted Payment Amount: Adjustments, including penalties: Approved Payment Amount: Exhibit D Page 1 DATE: OUNCIL COUNCIL ACTION: Approved on 9/25/2012 9/25/2012 REFERENCE NO.: P-11433 CODE: P TYPE• NON - CONSENT SUBJECT: LOG NAME PUBLIC HEARING: Official site of the City of Fort Worth, Texas FORT WORT II 13P CROWE 2012CAFR MJ NO Authorize Execution of Professional Services Agreement with Crowe Horwath LLP, in the Amount Up to $1,300,000.00 for the Financial Management Services Department for Completion of the Fiscal Year 2012 Comprehensive Annual Financial Report (ALL COUNCIL DISTRICTS) 21;6 r: a ..a,��,,,_,.., ..,.v.:::At , RECOMMENDATION: It is recommended that the City Council authorize the execution of a professional services Agreement with Crowe Horwath LLP, in the amount up to $1,300,000 00 for the Financial Management Services Department for the purpose of completing the City's Fiscal Year 2012 Comprehensive Annual Financial Report DISCUSSION: Since 2008, Crowe Horwath LLP (Crowe), has provided the City's Financial Management Services Department with professional consulting services for the purpose of completing the City's Comprehensive Annual Financial Report (CAFR) and the Single Audit Report to ensure timely production and completion. Services initially included documentation of the processes, responsibilities and rules to enhance the City's ability to produce future CAFRs in an efficient and timely manner The contract was later amended to add reconciliation and analytical services in conjunction with the completion of the CAFR. Crowe has provided services for the completion of the CAFR for Fiscal Year 2007 through Fiscal Year 2011 The current Agreement (City Secretary Contract No. 39162, as amended by City Secretary Contract No 39162-A1) will expire on September 30, 2012. Under the proposed Agreement, Crowe will offset reduction of hours for Staff and will assume expanded responsibilities for the financial audit and preparation of the CAFR The primary objective is to assist in the development and timing of the ' Prepared by Client" (PBC) Schedule required by the City's external auditor Crowe will participate in weekly status meetings with City management to discuss (i) issues or risks that may affect the audit process, (ii) audit findings (iii) the City's response to those findings and (iv) the overall status of the audit. Crowe will review the City s capital asset work plan and provide comments on the plan. In addition, the company will review capital asset additions, deletions and depreciation schedules prepared by the City for accuracy and completeness, will report any errors or concerns to the appropriate City representative to resolve and will assist with final resolution. AGREEMENT TERM - On City Council's approval, the Agreement will begin October 1, 2012 and shall remain in effect until all services have been provided under the Agreement, but no later than September 30, 2013. RENEWAL OPTIONS - This Agreement may be renewed for up to two additional, one-year periods at the City's sole discretion This action does not require specific City Council approval provided that the http://apps.cfwnet.org/council_packet/mc review. asp?ID=173 5 0&councildate=9/25/20 12 10/3/2012 City Council has appropriated sufficient funds to satisfy the City's obligations during the renewal term. M/WBE - Crowe is in compliance with the City's M/WBE Ordinance by committing to 10 percent M/WBE participation on this project. The City's M/WBE goal on this project is 10 percent. FISCAL INFORMATION/CERTIFICATION: The Financial Management Services Director certifies that funds will be available in the Fiscal Year 2013 operating budget, as appropriated, of the General Fund. BQN\2012CAFR\MJ TO Fund/Account/Centers FROM Fund/Account/Centers Submitted for City Manaaer's Office bv: Oriainatina Department Head: Additional Information Contact: ATTACHMENTS Susan Alanis (8180) Lena Ellis (8517) Marilyn Jackson (2059) Jack Dale (8357) http://apps.cfwnet.org/council_packet/mc review.asp?ID=17350&councildate=9/25/2012 10/3/2012