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RDAP-2018-09 2018-10-22 RESOLUTION NO. RDAP 2018-09 A RESOLUTION OF THE DEVELOPMENT AUTHORITY OF PEARLAND (DAP), TEXAS APPROVING AN ENGAGEMENT AGREEMENT WITH MCGRATH &CO., PLLC FOR ACCOUNTING SERVICES RELATED TO DEVELOPER REIMBURESEMENTS SERVICES. BE IT RESOLVED BY DAP BOARD OF DIRECTORS: Section 1. That engagement letter for accounting services related to developer reimbursements services, a copy of which is attached hereto and made a part hereof for all purposes, is hereby authorized and approved. Section 2. That the Chairman is hereby authorized to execute and the Secretary to attest an engagement letter for accounting services related to developer reimbursements services. PASSED, APPROVED, AND ADOPTED this 22 day of October. A.D 2018. c J07d1 (Lr/ DAP Chairman ATTEST: DAP Secretary • McGrath & Co., PLLC Certified Public Accountants 2500 Tanglewilde,Suite 340 Houston,Texas 77063 October 22, 2018 Board of Directors Development Authority of Pearland City of Pearland,Texas We are pleased to confirm our understanding of the terms of our engagement and the nature and limitations of the services we are to provide for the Development Authority of Pearland(the"Authority"). We will apply the agreed-upon procedures listed below that were specified and agreed to by the Authority on amounts reimbursable to developers for costs incurred on behalf of TIRZ No. 2 in accordance with financing agreements between TIRZ No. 2 and each developer. 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 performed or to be performed is solely the responsibility of the Authority and we will require an acknowledgement in writing of that responsibility. Consequently,we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. Because the agreed-upon procedures listed below do not constitute an examination or review,we will not express an opinion or conclusion on amounts reimbursable to developers.In addition,we have no obligation to perform any procedures beyond those listed below. We will issue a written report upon completion of our engagement that lists the procedures performed and our findings. Our report will be addressed to the Board of Directors. If for any reason, we are unable to complete any of the procedures, we will describe in our report any restrictions on the performance of the procedures, or not issue a report and withdraw from the engagement You understand that the report is intended solely for the information and use of the Authority and should not be used by anyone other than these specified parties. 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. An agreed-upon procedures engagement is not designed to detect instances of fraud or noncompliance with laws or regulations; however, we will communicate to you any known and suspected fraud and vinptiance with laws or regulations affecting amounts reimbursable to developers that come to our attention.In addition, if in connection with this engagement, matters come to our attention that contradict amounts reported to us as reimbursable to developers,we will disclose those matters in our report. You are responsible for determining amounts reimbursable to developers and for selecting the criteria and procedures used in our engagement and for determining that such criteria and procedures are appropriate for your purposes. You are also responsible for, and agree to provide us with, a written assertion about amounts reimbursable to the developers for costs incurred on behalf of the Authority. In addition,you are responsible for providing us with (1) access to all information of which you are aware that is relevant to the performance of the agreed-upon procedures on the subject matter, (2) additional information that we may Mark W.McGrath,CPA Colette M.Garcia,CPA Tayo Mari,CPA,CFE Crystal V.Horn,CPA mark @mcgrath-co.com colette@mcgrath-co.com tayo @mcgrath-co.com crystal @ mcgrath-co.com Board of Directors Development Authority of Pearland City of Pearland,Texas October 22, 2018 Page 2 of 4 request for the purpose of performing the agreed-upon procedures, and (3) unrestricted access to persons within the entity from whom we determine it necessary to obtain evidence relating to performing those procedures. At the conclusion of our engagement, we will require certain written representations in the form of a representation letter that, among other things, will confirm your responsibility for determining amounts reimbursable to the developer for costs incurred on behalf of the Authority and for determining that those amounts are in accordance with the criteria selected by the Authority. Mark McGrath is the engagement partner for developer reimbursements services and is responsible for supervising engagements and signing reports or authorizing another individual to sign reports. The procedures are as follows: 1. We will obtain,from the Authority,the dates,amounts and payees of remitted to developer in a given calendar year from the proceeds of bonds sold by the Authority or other Authority resources. 2. We will allocate principle and interest to remaining unreimbursed letter financing agreements of TIRZ No.2 based on the relevant letter finance agreements.Projects to be reimbursed will be selected by the Authority. 3. All documentation supporting items, amounts, and proof of payment for which reimbursement is requested shall be inspected. 4. The calculations of interest on amounts reimbursable are to be recalculated and determined to be in accordance with the reimbursement agreements and letter financing agreements. 5. All items and amounts shall be discussed to and discussed with the Authority's staff 6. A determination shall be made that the items and amounts to be reimbursed are appropriate and in accordance with commitments or policies of the Authority and subject to such limitations as may apply. 7. Upon completion, we will prepare the following schedules to be included with the auditor's report and presented to the Board of Directors: a. schedules of amounts reimbursable to each developer for the current period as well as previous reimbursements made; remaining unreimbursed letter finance agreements. Our fees for the agreed-upon procedures services will be computed based on time and materials at our standard hourly rates, set forth in Exhibit A,as may be updated from time to time. Our fees for this service shall not exceed$5,000.Written invoices will be provided to the Authority and will be due and payable within 45 days of receipt. This agreement may be terminated by either party,with or without cause, upon 30 days written notice.This agreement maybe amended at any time upon mutual written agreement by both parties;provided,however, that amendment to Exhibit A shall only require 30 days written notice of the same. Board of Directors Development Authority of Pearland City of Pearland,Texas October 22, 2018 Page 3 of 4 As required by Chapter 2270,Government Code,we hereby verify that we do not boycott Israel and will not boycott Israel through the term of this agreement. For purposes of this verification, "boycott Israel" means refusing to deal with,terminating business activities with,or otherwise taking any action that is intended to penalize, inflict economic harm on,or limit commercial relations specifically with Israel,or with a person or entity doing business in Israel or in an Israeli-controlled territory,but does not include an action made for ordinary business purposes. We appreciate the opportunity to assist you 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,or the procedures need to be modified,our agreement with you will need to be revised. It 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 agreement with the procedures performed or to be performed and their responsibility for the sufficiency of procedures. Sincerely, McGrath &Co.,PLLC RESPONSE: This letter correctly sets forth the understanding of the Development Authority of Pearland. By: 0112 {�v Title: 2,h{s.trman—re n-i 1 v Date: ' /0. _301g Exhibit A McGrath&Co.,PLLC Rate Schedule As of October 22, 2018 Position Hourly Rate Partner/Owner $250 Manager/Supervisor $150 Senior Staff $125 Staff $115