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HomeMy WebLinkAboutResolution No. 09-065 CITY OF THE COLONY, TEXAS RESOLUTION NO. 09-065 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS, ACCEPTING THE PROPOSAL SUBMITTED BY WEAVER & TIDWELL FOR PROFESSIONAL FORENSIC AUDITING SERVICES OF DEVELOPER'S AGREEMENTS FOR THE CITY OF THE COLONY, WHICH IS ATTACHED HERETO AND INCORPORATED HEREIN AS EXHIBIT "A"; AUTHORIZING THE CITY MANAGER TO EXECUTE AN ENGAGEMENT LETTER FOR SAME SERVICES; AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City has determined that it is in the best interest of the City to accept the Proposal submitted by Weaver & Tidwell for Professional Forensic Auditing Services of Developer's Agreements, which is attached hereto and incorporated herein as Exhibit "A", under the terms and conditions provided therein; and WHEREAS, the City and Consultant have entered into an Engagement Letter such that the Consultant is to provide Professional Forensic Auditing Services of Developer's Agreements; and WHEREAS, with the Engagement Letter the City of The Colony is agreeing to pay the sum not to exceed $18,250 for such work. THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS THAT: Section 1. The Proposal, which is attached hereto and incorporated herein as Exhibit "A", having been reviewed by the City Council of the City of The Colony, Texas, and found to be acceptable and in the best interest of the City and its citizens, be, and the same is hereby, in all things approved in the amount not to exceed $18,250. Section 2. The City Manager is hereby authorized to execute an Engagement Letter on behalf of the City of The Colony, Texas. Section 3. This Resolution shall take effect immediately from and after its adoption and it is so resolved. 63918 PASSED, APPROVED and EFFECTIVE this 8th day of September, 2009. ATTEST: *oq4, Mayor C ity of T e Colony, Texas Chnstie Wilson, City Secretary APPROVED AS TO FORM: Robert E. Hage , ity Attorney "63918 weaver} February 3, 2010 Mr. Tony Johnston, City Manager City of The Colony 6800 Main Street The Colony, Texas 75056 Dear Mr. Johnston, We are pleased to confirm our understanding of the nature and limitations of the services we are to provide to the City of The Colony. We will apply the agreed-upon procedures which The City of The Colony has specified, listed in the paragraph below. This engagement is solely to assist the City of The Colony in determining whether it has complied with the terms of the developer agreements specified in the paragraph below and with specific provisions of the Texas Local Government Code as specified in the paragraph below. Our engagement to apply agreed-upon procedures will be conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of those parties specified in the report. Consequently, we make no representation regarding the sufficiency of the procedures described in the paragraph below either for the purpose for which this report has been requested or for any other purpose. If, for any reason, we are unable to complete the procedures, we will describe any restrictions on the performance of the procedures in our report, or will not issue a report as a result of this engagement. Because the agreed-upon procedures listed in the paragraph below do not constitute an examination, we will not express an opinion, on the City's compliance with the terms of the developer agreements specified in the paragraph below or with the provisions of the Texas Local Government Code specified below. In addition, we have no obligation to perform any procedures beyond those listed in the paragraph below. The agreed- upon procedures to be applied consist of the following: We will obtain and read the following development (developer's) agreements (the agreements), entered into by the City: 1. Developer's Agreement Between City of The Colony and Wynnwood Peninsula Partners, L.P. dated March 17, 2008, and the First Amendment to this agreement dated July 6, 2009. 2. Development Agreement By and Between Billingsley Development Corporation and The City of The Colony, Texas made effective as of January 22, 2008, and the Amendment to this agreement dated March 2, 2009. Upon reading the agreements, we will make calculations based upon specific language contained in the agreements to determine specifically whether the City complied with provisions of the State of Texas Local Government Code regarding Developer Participation Contracts and the Duties of the Parties Under Contract (Sections 212.071 and 212.072 of the Texas Local Government Code). AN INDE PENDENT WEAVER AND TIDWELL LLP DALLAS MEMBER OF BAKER TILLY CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS 12221 MERIT DRIVE, SUITE 1400, DALLAS, TX 75251 INTERNATIONAL WWW,WEAVERLLP.COM P:(972) 4901970 F:(972) 702 8321 City of The Colony February 3, 2010 Page 2 We will also determine that all payments made by and between the above mentioned parties are as provided for in the agreements, and that the developers noted above have complied will all financial obligations contained in the above agreements. We will submit a report listing the procedures performed and our findings. This report is intended solely for the use of The City of The Colony, and should not be used by anyone other than the City of The Colony. Our report will contain a paragraph indicating that had we performed additional procedures, other matters might have come to our attention that would have been reported to you. The City of The Colony is responsible for complying with the provisions of the agreements and for selecting the criteria and determining that such criteria is appropriate for its purposes. The City is also responsible for making all management decisions and performing all management functions; for designating an individual with suitable skill, knowledge, and experience to oversee any nonattest services that we provide; and for evaluating the adequacy and results of those services and accepting responsibility for them. Both of us agree that any dispute between you and Weaver and Tidwell, L.L.P. arising from the engagement, this agreement, or the breach of it, may, if negotiations and other discussion fail, be first submitted to mediation in accordance with the provisions of the Commercial Mediation Rules of the American Arbitration Association (AAA) then in effect. Both of us agree to conduct any mediation in good faith and make reasonable efforts to resolve any dispute by mediation. Mediation is not a pre-condition to the arbitration provided for below and the failure or refusal by either party to request or to participate in mediation shall not preclude the right of either party to initiate arbitration. We agree to conduct the mediation in Dallas, Texas, or another mutually agreed upon location. Both of us agree that any dispute arising from the engagement, this agreement or the breach of it shall be subject to binding arbitration under the provisions of the Federal Arbitration Act (9 U.S.C. § 1, et seq.) and of the Dispute Resolution Rules for Professional Accounting and Related Services Disputes of the AAA (the Rules), and judgment on the Award rendered by the arbitrator may be entered in any court of competent jurisdiction. The arbitration shall be heard before one or more arbitrators selected in accordance with the Rules. The parties agree to conduct the arbitration in Dallas, Texas, or another mutually agreed upon location. The arbitrator may only award direct damages and may not award consequential, exemplary, or punitive damages. The prevailing party in any arbitration or litigation shall be entitled to recover from the other party reasonable attorneys' fees and expert witness fees, court costs, and the administrative costs, arbitrator's fees, and expenses of the AAA incurred in the arbitration or litigation in addition to any other relief that may be awarded. City of The Colony February 3, 2010 Page 3 Notwithstanding the provisions of the immediately preceding paragraph, neither of us shall be compelled to arbitrate any dispute between us which arises out of any claim asserted against either of us by a third party, unless the third party (whether one or more) agrees to join the arbitration or can be compelled to join it. In the unlikely event that circumstances occur which we in our sole discretion believe could create a conflict with either the ethical standards of our firm or the ethical standards of our profession in continuing our engagement, we may suspend our services until a satisfactory resolution can be achieved or we may resign from the engagement. We will notify you of such conflict as soon as practicable, and will discuss with you any possible means of resolving them prior to suspending our services. If any term of this agreement is declared illegal, unenforceable, or unconscionable, that term shall be severed and the remaining terms of the agreement shall remain in force. Both of us agree that the arbitrator(s) or Court, as the case may be, should modify any term declared to be illegal, unenforceable, or unconscionable in a manner that will retain the intended meaning of the term as closely as possible. If a dispute arising from the engagement or from this agreement or any term of it or any alleged breach of it is submitted to a Court for interpretation or adjudication, both of us irrevocably waive the right to trial by jury and agree that the jury waiver and provisions of this agreement regarding damages, attorneys' fees, and expenses shall be applied and enforced by the Court. Mr. Shawn M. Parker is the engagement partner and is responsible for supervising the engagement and signing the report. At the conclusion of the engagement, we will require a representation letter from management that, among other things, will confirm management's responsibility for the procedures performed and its compliance with the terms of the agreements and with the Texas Local Government Code. We estimate that our fees for this engagement will range from between $8,000 to $10,000. This fee estimate is based upon anticipated cooperation from City personnel and the assumption that unexpected circumstances will not be encountered during the engagement. If significant additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the additional costs. Invoices for these services will be delivered upon completion of our report and are payable on presentation. City of The Colony February 3, 2010 Page 4 We appreciate the opportunity to serve the City and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. If the need for additional procedures arises, our agreement with you will need to be revised. If is customary for us to enumerate these revisions in an addendum to this letter. If additional specified parties of the report are added, we will require that they acknowledge in writing their responsibility for the sufficiency of procedures. Very truly yours, WEAVER AND TIDWELL, L.L.P. RESPONSE: This letter correctly sets forth the understanding of The City of The Colony. By Title r1 cZ 4 C-,T-rr ("l A10A 69m) Date ~ S 10 City of The Colony Addendum to Price Proposal Budgeted Estimate of Hours and Related Fees Proposal #30-09-10 "Forensic Audit" Partner Manager Senior Administrative Total Reading Developer Agreements and Preparing Engagement Letter 10 10 20 Initial Meeting with City Staff to discuss engagement and expected outcomes 2 2 4 Performance of Procedures 4 20 40 64 Report Preparation and Review 4 10 10 2 26 Total Estimated Hours 20 42 50 2 114 Standard Rates 335 200 125 60 Total Dollars 6,700 8,400 6,250 120 21,470 Discounting Factor -15% 0.85 0.85 0.85 0.85 0.85 5,695 7,140 5,313 102 18,250 Total Estimated Engagement Fee 18,250 Discounting factor of 15% is being applied due to the excellent relationship that Weaver and Tidwell has with the City.