Loading...
R2022-152 2022-07-11RESOLUTION NO. R2022-152 A Resolution of the City Council of the City of Pearland, Texas renewing an audit services contract, with FORVIS, LLP (formerly BKD, LLP), in the amount of $129,030.00. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That engagement letter for audit services, a copy of which is attached hereto as Exhibit “A” and made a part hereof for all purposes, is hereby authorized and approved. Section 2. That the City Manager or his designee is hereby authorized to execute and the City Secretary to attest an engagement letter for audit services. PASSED, APPROVED and ADOPTED this the 11th day of July, A.D., 2022. ________________________________ J.KEVIN COLE MAYOR ATTEST: ________________________________ LESLIE CRITTENDEN CITY SECRETARY APPROVED AS TO FORM: ________________________________ DARRIN M. COKER CITY ATTORNEY DocuSign Envelope ID: 487FA7C9-ADBF-4C7F-94A5-3EEC3B24F525 DocuSign Envelope ID:CD1C569E-0A62-4017-B7A5-FC567D390A3A 11,111vo, %� rfiillll 2700 test Oak :ouIev,'rc1, Suite 1500 J Houston, TX 77055 F 7113,499 4600 / F 713.499.4699 June 9, 2022 Honorable Mayor Kevin Cole and Members of the City Council Mr. Clay Pearson, City Manager Mr. Trent Epperson, Deputy City Manager Ms. Amy Johnson, Chief Financial Officer City of Pearland, Texas 3519 Liberty Drive Pearland, Texas 77581 We appreciate your selection of FORVIS, LLP as your service provider and are pleased to confirm the arrangements of our engagement in this contract. Within the requirements of our professional standards and any duties owed to the public, regulatory,or other authorities, our goal is to provide you an Unmatched Client Experience. In addition to the terms set forth in this contract, including the detailed Scope of Services,our engagement is governed by the following, incorporated fully by this reference: • Terms and Conditions Addendum Summary Scope of Services As described in the attached Scope of Services, our services will include the following: City of Pearland, Texas • Audit Services for the year ended September 30, 2022 You agree to assume full responsibility for the substantive outcomes of the contracted services and for any other services we may provide, including any findings that may result. You also acknowledge these services are adequate for your purposes, and you will establish and monitor the performance of these services to ensure they meet management's objectives. All decisions involving management responsibilities related to these services will be made by you,and you accept full responsibility for such decisions. We understand you have designated a management-level individual to be responsible and accountable for overseeing the performance of nonattest services, and you have determined this individual is qualified to conduct such oversight. DocuSign Envelope ID:CD1C569E-0A62-4017-B7A5-FC567D390A3A City of Pearland, Texas June 8, 2022 Page 2 Engagement Fees We have estimated the time, skill and resources, including our proprietary information required to complete the services required by our engagement and expect our fee for our services will not exceed the fees set out in the following schedule: Financial statement audit $107,800 Preparation of annual comprehensive financial report $ 11,000 Federal single audit(including one major program) $ 10,230 Fees for additional major federal programs will depend on the complexity of the program testing requirements and will range from $4,550 to $6,600 per program. Our fee includes travel costs and fees for services from other professionals, if any, as well as an administrative fee of five (5) percent to cover certain technology and administrative costs associated with our services. Our pricing for this engagement and our fee structure are based upon the expectation that our invoices will be paid promptly. Payment of our invoices is due upon receipt. Our timely completion of services and the fees thereon depends on the assistance you provide us in accumulating information and responding to our inquiries. Inaccuracies or delays in providing this information or the responses may result in additional billings, untimely filings or inability to meet other deadlines. Our fees do not contemplate the following transactions or activities during the period of this engagement: • Changes in the reporting entity, including additional component units • Change in accounting principles • Violation of covenants in debt arrangements • Indications of fraudulent financial reporting or misappropriation of assets • Derivatives accounted for under hedge accounting • Quantitative impairment analysis of long-lived assets If there are changes in circumstances where these or other conditions become known and significant additional time is necessary or additional services are requested, we reserve the right to revise our fees. Assistance with New Standard Assistance and additional time as a result of the adoption of the following new standard is not included within our standard engagement fees. These fees will be based on time expended and will vary based on the level of assistance and procedures required. Governmental Accounting Standards Board Statement No. 87, Leases, is effective for fiscal years beginning after June 15, 2021. Early application is encouraged. Statement No. 87 establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. We can assist you with the adoption by providing services which may include, but are not limited to: • Assessing your readiness by assisting with the evaluation of your: o Current controls and policies o Current internal resources and system capabilities • Assisting with changes required to adopt Statement No. 87, including: DocuSign Envelope ID:CD1C569E-0A62-4017-B7A5-FC567D390A3A City of Pearland, Texas June 8, 2022 Page 3 o Assisting with information gathering to develop an inventory of all lease agreements, service contracts, and other arrangements that may contain right-to-use lease assets o Recommending enhancements to existing controls and policies or suggesting new controls and policies to address Statement No. 87 o Documenting any changes from your previous lease recognition and reporting methods o Drafting the required disclosures The time it will take to perform the above assistance and our additional audit procedures relating to the adoption of the Statement, and any time to assist you with the adoption, may be minimized to the extent your personnel will be available to provide timely and accurate documentation and information as requested by us. Additional Costs Related to COVID-19 Our fees do not consider additional efforts driven by the SARS-CoV-2 virus and the related COVID-19 (COVID-19)environment. Complexities and uncertainties related to various provisions of new laws and the continued issuance of interpretative and procedural guidance from federal agencies may affect our services. Fees related to COVID-19 activities will be billed based on time expended. Additional efforts or services may include: • Accounting and auditing issues such as: other-than-temporary impairment of investments, collectability of receivables, compliance with debt agreements, modification of lease terms, additional major programs subject to Single Audit, etc. Contract Agreement Please sign and return this contract to indicate your acknowledgment of, and agreement with, the arrangements for our services including our respective responsibilities. FORVIS, LLP FOP/15, L_ P Acknowledged and agreed to as it relates to the entire contract, including the Scope of Services and Terms and Conditions Addendum, on behalf of City of Pearland, Texas. ,^--DocuuSSiiggned by: BY �-- t4 blA 15y h r1... Honorable Mayor Kevin Cole DATE 7/12/2022 110:47 AM CDT 0 DocuSigned�� by: f"__I BY "" Pt,ArSOIA, kr.t1 9b fg93n, City Manager DATE 7/12/2022 110:56 AM CDT DocuSign Envelope ID:CD1C569E-0A62-4017-B7A5-FC567D390A3A City of Pearland, Texas June 8, 2022 Page 4 Scope of Services—Audit Services We will audit the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information and related disclosures, which collectively comprise the basic financial statements for the following entity: City of Pearland, Texas as of and for the year ended September 30, 2022 The audit has the following broad objectives: • Obtaining reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error • Expressing opinions on the financial statements • Issuing a report on your internal control over financial reporting and compliance and other matters based on the audit of your financial statements in accordance with Government Auditing Standards • Expressing an opinion on your compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect to each of your major federal award programs in accordance with the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) • Issuing a report on your internal control over compliance in accordance with the Uniform Guidance • Issuing a report on your schedule of expenditures of federal awards We will also express an opinion on whether the combining and individual fund statements and schedules, and budgetary comparison schedules ("supplementary information")is fairly stated, in all material respects, in relation to the financial statements as a whole. We will also provide you with the following nonattest services: • Preparing a draft of the financial statements and related notes, preparation of adjustments from modified accrual to full accrual basis for government type activities, and preparation of adjustments as required to convert fund level financial statements to government-wide financial statements. • Preparing a draft of the supplementary information, including the schedule of expenditures of federal awards You agree to assume all management responsibilities and to oversee the non-attest services we will provide by designating an individual possessing suitable skill, knowledge and/or experience.You acknowledge that non-attest services are not covered under Government Auditing Standards. You are responsible for: • Making all management decisions and performing all management functions; • Evaluating the adequacy and results of the services performed; • Accepting responsibility for the results of such services; and • Designing, implementing, and maintaining internal controls, including monitoring ongoing activities. Amanda Eaves, Partner, is responsible for supervising the engagement and authorizing the signing of the report or reports. We will issue a written report(s) upon completion of our audit(s), addressed to the following parties: Entity Name Party Name City of Pearland, Texas City Council DocuSign Envelope ID:CD1C569E-0A62-4017-B7A5-FC567D390A3A City of Pearland, Texas June 8, 2022 Page 5 You are responsible to distribute our reports to other officials who have legal oversight authority or those responsible for acting on audit findings and recommendations, and to others authorized to receive such reports. The following apply for the audit services described above: Our We will conduct our audit in accordance with auditing standards generally Responsibilities accepted in the United States of America (GAAS), the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States and the Uniform Guidance. Those standards require that we plan and perform: • The audit of the financial statements to obtain reasonable rather than absolute assurance about whether the financial statements are free of material misstatement, whether caused by fraud or error • The audit of compliance to obtain reasonable rather than absolute assurance about whether the entity complied with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each major federal award program We will exercise professional judgment and maintain professional skepticism throughout the audit. We will identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. We will obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. We will evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We will also conclude, based on audit evidence obtained, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time. We will identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the entity's compliance with compliance requirements subject to audit and performing such other procedures as the auditor considers necessary in the circumstances. We will obtain an understanding of the entity's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over compliance. Accordingly, no such opinion is expressed. DocuSign Envelope ID:CD1C569E-0A62-4017-B7A5-FC567D390A3A City of Pearland, Texas June 8, 2022 Page 6 We are required to communicate with those charged with governance, regarding, among other matters,the planed scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that the auditor identified during the audit. Limitations and Reasonable assurance is a high level of assurance but is not absolute assurance Fraud and therefore is not a guarantee that an audit that is planned and conducted in accordance with GAAS will always detect a material misstatement or material noncompliance with federal award programs when it exists. Misstatements, including omissions, can arise from fraud or error and are considered material if, there is a substantial likelihood that, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users made on the basis of these financial statements. Our responsibility as auditors is limited to the period covered by our audit and does not extend to any later periods for which we are not engaged as auditors. The risk of not detecting a material misstatement or material noncompliance resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with compliance requirements is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the entity's compliance with the requirements of the federal programs as a whole. Our understanding of internal control is not for the purpose of expressing an opinion on the effectiveness of your internal control. However, we will communicate to you in writing any significant deficiencies or material weaknesses in internal control relevant to the audit of the financial statements that we identify during the audit. We are available to perform additional procedures with regard to fraud detection and prevention at your request, subject to completion of our normal engagement acceptance procedures. The actual terms and fees of such an engagement would be documented in a separate contract to be signed by you and FORVIS, LLP. Opinion Circumstances may arise in which our report may differ from its expected form and content based on the results of our audit. Depending on the nature of these circumstances, it may be necessary for us to modify our opinion, add an emphasis-of-matter paragraph or other-matter paragraph(s) to our auditor's report, or if necessary, decline to express an opinion or withdraw from the engagement. If we discover conditions that may prohibit us from issuing a standard report, we will notify you. In such circumstances, further arrangements may be necessary to continue our engagement. Your Management and, if applicable, those charged with governance acknowledge Responsibilities and understand their responsibility for the accuracy and completeness of all information provided and for the following: • Audit Support-to provide us with: o Unrestricted access to persons within the entity or within components of the entity (including management, those charged with governance and DocuSign Envelope ID:CD1C569E-0A62-4017-B7A5-FC567D390A3A City of Pearland, Texas June 8, 2022 Page 7 component auditors) from whom we determine it necessary to obtain audit evidence o Information of which you are aware that is relevant to the preparation and fair presentation of the financial statements, including access to information relevant to disclosures o Information about events occurring or facts discovered subsequent to the date of the financial statements, of which management may become aware, that may affect the financial statements o Information about any known or suspected fraud affecting the entity involving management, employees with significant role in internal control and others where fraud could have a material effect on the financials o Identification and provision of report copies of previous audits,attestation engagements, or other studies that directly relate to the objectives of the audit, including whether related recommendations have been implemented o Additional information that we may request for the purpose of the audit • Internal Control and Compliance—for the: o Design, implementation, and maintenance of internal control relevant to compliance with laws and regulations and the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, o Alignment of internal control to ensure that appropriate goals and objectives are met,that management and financial information is reliable and properly reported and that compliance with and identification of the laws, regulations, contracts, grants or agreements (including any federal award programs) applicable to the entity's activities is achieved o Remedy, through timely and appropriate steps, of fraud and noncompliance with provisions of laws, regulations, contracts or other agreements reported by the auditor o Establishment and maintenance of processes to track the status and address findings and recommendations of auditors • Accounting and Reporting —for the: o Maintenance of adequate records, selection and application of accounting principles, and the safeguard of assets o Adjustment of the financial statements to correct material misstatements and confirmation to us in the representation letter that the effects of any uncorrected misstatements aggregated by us are immaterial, both individually and in the aggregate, to the financial statements taken as a whole o Preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America (or other basis if indicated in the contract) o Inclusion of the auditors' report in any document containing financial statements that indicates that such financial statements have been audited by us o Distribution of audit reports to any necessary parties The results of our tests of compliance and internal control over financial reporting performed in connection with our audit of the financial statements may not fully meet the reasonable needs of report users. Management is responsible for obtaining audits, examinations, agreed-upon procedures, or other engagements that satisfy relevant legal, regulatory, or contractual requirements or fully meet other reasonable user needs. DocuSign Envelope ID:CD1C569E-0A62-4017-B7A5-FC567D390A3A City of Pearland, Texas June 8, 2022 Page 8 Required Accounting principles generally accepted in the United States of America provide Supplementary for certain required supplementary information ("RSI") to accompany the basic Information financial statements. We understand the following RSI will accompany the basic financial statements: 1. Management's Discussion and Analysis ("MD&A") 2. Budgetary comparison 3. Pension and Other Postemployment Benefit information Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Management is responsible for the fair presentation of the RSI. As part of our engagement,we will apply certain limited procedures to the RSI in GAAS. These limited procedures will consist of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We will not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary With regard to any supplementary information that we are engaged to report on: Information • Management is responsible for its preparation in accordance with applicable criteria • Management will provide certain written representations regarding the supplementary information at the conclusion of our engagement • Management will include our report on this supplementary information in any document that contains this supplementary information and indicates we have reported on the supplementary information • Management will make the supplementary information readily available to intended users if it is not presented with the audited financial statements Such information is: • Presented for the purpose of additional analysis of the financial statements • Not a required part of the financial statements • The responsibility of management • Subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with GAAS Written As part of our audit process,we will request from management and, if applicable, Confirmations those charged with governance written confirmation acknowledging certain Required responsibilities outlined in this contract and confirming: • The availability of this information DocuSign Envelope ID:CD1C569E-0A62-4017-B7A5-FC567D390A3A City of Pearland, Texas June 8, 2022 Page 9 • Certain representations made during the audit for all periods presented • The effects of any uncorrected misstatements, if any, resulting from errors or fraud aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole Peer Review Government Auditing Standards require that we provide you with a copy of our Report most recent external peer review report and any letter of comment, and any subsequent peer review reports and letters of comment received during the period of the contract, upon request. If you would like a copy, please request from your engagement executive. DocuSign Envelope ID:CD1C569E-0A62-4017-B7A5-FC567D390A3A City of Pearland, Texas June 8, 2022 Page 10 FORVIS, LLP Terms and Conditions Addendum GENERAL 4. Termination. Either party may terminate these services in good faith at any time for any reason, including Your failure to 1. Overview. This addendum describes FORVIS LLP's standard comply with the terms of Our contract or as We determine terms and conditions ("Terms and Conditions") applicable to professional standards require. Both parties must agree, in Our provision of services to the Client ("You"). The Terms and writing,to any future modifications or extensions.If services are Conditions area part of the contract between You and FORVIS, terminated, You agree to pay FORVIS for time expended to LLP. For the purposes of the Terms and Conditions, any date. In addition, You will be billed costs and fees for services reference to "Firm," "We," "Us," or "Our" is a reference to from other professionals,if any,as well as an administrative fee FORVIS,LLP("FORVIS"),and any reference to"You"or"Your" of five (5) percent to cover certain technology and is a reference to the party or parties that have engaged Us to administrative costs associated with Our services. Unless provide services and the party or parties ultimately responsible terminated sooner in accordance with its terms, this for payment of Our fees and costs. engagement shall terminate upon the completion of FORVIS' services hereunder. BILLING, PAYMENT, &TERMINATION 2. Billing and Payment Terms. We will bill You for Our DISPUTES & DISCLAIMERS professional fees and costs as outlined in Our contract. Unless 5. Mediation. Any dispute arising out of or related to this otherwise provided in Our contract, payment is due upon engagement will,prior to resorting to litigation, be submitted for receipt of Our billing statement. Interest will be charged on any nonbinding mediation upon written request by either party. Both unpaid balance after 30 days at the rate of 10 percent per parties agree to try in good faith to settle the dispute in annum,or as allowed by law at the earliest date thereafter,and mediation. The mediator will be selected by agreement of the highest applicable rate if less than 10 percent.All fees,charges, parties. The mediation proceeding shall be confidential. Each and other amounts payable to FORVIS hereunder do not party will bear its own costs in the mediation, but the fees and include any sales,use,excise,value-added,or other applicable expenses of the mediator will be shared equally. taxes, tariffs, or duties, payment of which shall be Your sole responsibility, and do not include any applicable taxes based 6. Indemnification. Unless disallowed by law or applicable on FORVIS' net income or taxes arising from the employment professional standards, You agree to hold FORVIS harmless or independent contractor relationship between FORVIS and from any and all claims which arise from knowing FORVIS' personnel. misrepresentations to FORVIS,or the intentional withholding or concealment of information from FORVIS by Your We reserve the right to suspend or terminate Our work for this management or any partner, principal, shareholder, officer, engagement or any other engagement for nonpayment of fees. director, member, employee, agent, or assign of Yours. You If Our work is suspended or terminated,You agree that We will also agree to indemnify FORVIS for any claims made against not be responsible for Your failure to meet governmental and FORVIS by third parties,which arise from any wrongful actions other deadlines, for any penalties or interest that may be of Your management or any partner, principal, shareholder, assessed against You resulting from Your failure to meet such officer,director, member, employee, agent, or assign of Yours. deadlines,and for any other damages(including but not limited The provisions of this paragraph shall apply regardless of the to consequential, indirect, lost profits, or punitive damages) nature of the claim. incurred as a result of the suspension or termination of Our services. 7. Statute of Limitations. You agree that any claim or legal Our fees may increase if Our duties or responsibilities are action arising out of or related to this contract and the services increased by rulemaking of any regulatory body or any provided hereunder shall be commenced no more than one(1) additional new accounting or auditing standards. Our year from the date of delivery of the work product to You or the engagement fees do not include any time for post-engagement termination of the services described herein (whichever is consultation with Your personnel or third parties, consent earlier), regardless of any statute of limitations prescribing a letters and related procedures for the use of Our reports in longer period of time for commencing such a claim under law. offering documents, inquiries from regulators, or testimony or This time limitation shall apply regardless of whether FORVIS deposition regarding any subpoena. Charges for such services performs other or subsequent services for You. A claim is will be billed separately. understood to be a demand for money or services, demand for 3. Billing Records. If these services are determined to be within mediation, or the service of suit based on a breach of this the scope and authority of Section 1861(v)(1)(I) of the Social contract or the acts or omissions of FORVIS in performing the Security Act, We agree to make available to the Secretary of services provided herein. This provision shall not apply if Health and Human Services, or to the U.S. Comptroller enforcement is disallowed by applicable law or professional General, or any of their duly authorized representatives, such standards. of Our books, documents, and records that are necessary to certify the nature and extent of Our services,until the expiration 8. Limitation of Liability.You agree that FORVIS'liability, if any, of four (4) years after the furnishing of these services. This arising out of or related to this contract and the services contract allows access to contracts of a similar nature between provided hereunder, shall be limited to the amount of the fees subcontractors and related organizations of the subcontractor, paid by You for services rendered under this contract. This and to their books, documents, and records. limitation shall not apply to the extent it is finally, judicially determined that the liability resulted from the intentional or DocuSign Envelope ID:CD1C569E-0A62-4017-B7A5-FC567D390A3A City of Pearland, Texas June 8, 2022 Page 11 willful misconduct of FORVIS or if enforcement of this provision requested by regulatory or enforcement bodies (including any is disallowed by applicable law or professional standards. State Board) to make certain workpapers available to them pursuant to authority granted by law or regulation. Unless We 9. Waiver of Certain Damages. In no event shall FORVIS be are prohibited from doing so by law or regulation, FORVIS will liable to You or a third party for any indirect, special, inform You of any such legal process or request.You agree We consequential, punitive, or exemplary damages, including but have no legal responsibility to You in the event We determine not limited to lost profits, loss of revenue, interruption, loss of We are obligated to provide such documents or information. use, damage to goodwill or reputation, regardless of whether You were advised of the possibility of such damages, 17. Subpoenas or Other Legal Process. In the event FORVIS is regardless of whether such damages were reasonably required to respond to any such subpoena, court order, or any foreseeable, and regardless of whether such damages arise government regulatory inquiry or other legal process relating to under a theory of contract,tort, strict liability, or otherwise. You or Your management for the production of documents and/or testimony relative to information We obtained or 10. Choice of Law. You acknowledge and agree that any dispute prepared incident to this or any other engagement in a matter arising out of or related to this contract shall be governed by the in which FORVIS is not a party,You shall compensate FORVIS laws of the State of Texas,without regard to its conflict of laws for all time We expend in connection with such response at principles. normal and customary hourly rates and to reimburse Us for all out-of-pocket expenses incurred in regard to such response. 11. WAIVER OF JURY TRIAL. THE PARTIES HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE 18. Use of Deliverables and Drafts.You agree You will not modify OF RIGHT BY JURY,AND WAIVE ANY RIGHT TO TRIAL BY any deliverables or drafts prepared by Us for internal use or for JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT distribution to third parties. You also understand that We may SHALL NOW OR HEREAFTER EXIST WITH REGARD TO on occasion send You documents marked as draft and THIS AGREEMENT, OR ANY CLAIM, COUNTERCLAIM, OR understand that those are for Your review purpose only,should OTHER ACTION ARISING IN CONNECTION THEREWITH. not be distributed in any way,and should be destroyed as soon THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN as possible. KNOWINGLY AND VOLUNTARILY BY THE PARTIES, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH Our report on any financial statements must be associated only INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT with the financial statements that were the subject of Our TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. engagement. You may make copies of Our report, but only if the entire financial statements (exactly as attached to Our 12. Severability. In the event that any term or provision of this report, including related footnotes) and any supplementary agreement shall be held to be invalid, void, or unenforceable, information, as appropriate, are reproduced and distributed then the remainder of this agreement shall not be affected,and with Our report. You agree not to reproduce or associate Our each such term and provision of this agreement shall be valid report with any other financial statements, or portions thereof, and enforceable to the fullest extent permitted by law. that are not the subject of Our engagement. 19. Proprietary Information. You acknowledge that proprietary 13. Assignment. You acknowledge and agree that the terms and information, documents, materials, management techniques, conditions of this contract shall be binding upon and inure to and other intellectual property are a material source of the the parties'successors and assigns,subject to applicable laws services We perform and were developed prior to Our and regulations. association with You. Any new forms, software, documents, or intellectual property We develop during this engagement for 14. Disclaimer of Legal or Investment Advice. Our services do Your use shall belong to Us,and You shall have the limited right not constitute legal or investment advice. to use them solely within Your business.All reports,templates, manuals, forms, checklists, questionnaires, letters, RECORDS, WORKPAPERS, DELIVERABLES, & agreements,and other documents which We make available to PROPRIETARY INFORMATION You are confidential and proprietary to Us.Neither You,nor any 15. Maintenance of Records. You agree to assume full of Your agents, will copy, electronically store, reproduce, or responsibility for maintaining Your original data and records make any such documents available to anyone other than Your personnel. This provision will apply to all materials whether in and that FORVIS has no responsibility to maintain this information. You agree You will not rely on FORVIS to provide digital, "hard copy"format, or other medium. hosting, electronic security, or backup services, e.g., business REGULATORY continuity or disaster recovery services, to You unless separately engaged to do so.You understand that Your access 20. U.S. Securities and Exchange Commission ("SEC") and to data, records, and information from FORVIS' servers, i.e., other Regulatory Bodies. Where We are providing services FORVIS portals used to exchange information, can be either for (a)an entity that is registered with the SEC, (b) an terminated at any time and You will not rely on using this to host affiliate of such registrant, or (c)an entity or affiliate that is Your data and records. subject to rules, regulations, or standards beyond those of the 16. FORVIS Workpapers. Our workpapers and documentation American Institute of Certified Public Accountants ("AICPA"), any term of this contract that would be prohibited by or impair retained in any form of media for this engagement are the Our independence under applicable law or regulation shall not property of FORVIS. We can be compelled to provide apply to the extent necessary only to avoid such prohibition or information under legal process. In addition, We may be impairment. DocuSign Envelope ID:CD1C569E-0A62-4017-B7A5-FC567D390A3A City of Pearland, Texas June 8, 2022 Page 12 21. Offering Document.You may wish to include Our report(s)on facsimile delivered via the internet), by electronic mail in financial statements in an exempt offering document. You "portable document format" (".pdf") or similar format intended agree that any report, including any auditor's report, or to preserve the original graphic and pictorial appearance of a reference to Our firm, will not be included in any such offering document, or through the use of electronic signature software, document without notifying Us.Any agreement to perform work will have the same effect as physical delivery of the paper in connection with an exempt offering document, including document bearing an original signature. providing agreement for the use of the auditor's report in the exempt offering document,will be a separate engagement. 26. Electronic Data Communication and Storage. In the interest of facilitating Our services to You, We may send data over the Any exempt offering document issued by You with which We internet, temporarily store electronic data via computer are not involved will clearly indicate that We are not involved by software applications hosted remotely on the internet,or utilize including a disclosure such as,"FORVIS,LLP,our independent cloud-based storage. Your confidential electronic data may be auditor, has not been engaged to perform and has not transmitted or stored using these methods. In using these data performed, since the date of its report included herein, any communication and storage methods, We employ measures procedures on the financial statements addressed in that designed to maintain data security. We use reasonable efforts report. FORVIS, LLP also has not performed any procedures to keep such communications and electronic data secure in relating to this offering document." accordance with Our obligations under applicable laws, 22. FORVIS Not a Municipal Advisor. FORVIS is not acting as regulations, and professional standards. Your municipal advisor under Section 15B of the Securities Exchange Act of 1934, as amended. As such, FORVIS is not You recognize and accept that We have no control over the recommending any action to You and does not owe You a unauthorized interception or breach of any communications or fiduciary duty with respect to any information or electronic data once it has been transmitted or if it has been communications regarding municipal financial products or the subject to unauthorized access while stored, notwithstanding issuance of municipal securities. You should discuss such all reasonable security measures employed by Us. You matters with internal or external advisors and experts You consent to Our use of these electronic devices and applications deem appropriate before acting on any such information or during this engagement. material provided by FORVIS. OTHER MATTERS 23. FORVIS Not a Fiduciary. In providing Our attest services, We are required by law and our professional standards to maintain 27. Cooperation. You agree to cooperate with FORVIS in the our independence from You. We take this mandate very performance of FORVIS' services to You, including the seriously and thus guard against impermissible relationships provision to FORVIS of reasonable facilities and timely access which may impair the very independence which You and the to Your data, information, and personnel. You shall be users of Our report require.As such,You should not place upon responsible for the performance of Your employees and Us special confidence that in the performance of Our attest agents. services We will act solely in Your interest. Therefore, You acknowledge and agree We are not in a fiduciary relationship 28. Third-Party Service Providers. FORVIS may from time to with You and We have no fiduciary responsibilities to You in the time utilize third-party service providers, including but not performance of Our services described herein. limited to domestic software processors or legal counsel, or disclose confidential information about You to third-party TECHNOLOGY service providers in serving Your account. FORVIS maintains, however, internal policies, procedures, and safeguards to 24. Electronic Sites.You agree to notify Us if You desire to place protect the confidentiality and security of Your information. In Our report(s), including any reports on Your financial addition, FORVIS will secure confidentiality agreements with all statements, along with other information, such as a report by service providers to maintain the confidentiality of Your management or those charged with governance on operations, information. If We are unable to secure an appropriate financial summaries or highlights, financial ratios, etc., on an confidentiality agreement,You will be asked to consent prior to electronic site.You recognize that We have no responsibility to FORVIS sharing Your confidential information with the review information contained in electronic sites. third-party service provider. 25. Electronic Signatures and Counterparts. This contract and 29. Independent Contractor.When providing services to You,We other documents to be delivered pursuant to this contract may will be functioning as an independent contractor; and in no be executed in one or more counterparts, each of which will be event will We or any of Our employees be an officer of You, nor deemed to be an original copy and all of which, when taken will Our relationship be that of joint venturers, partners, together, will be deemed to constitute one and the same employer and employee, principal and agent, or any similar agreement or document, and will be effective when relationship giving rise to a fiduciary duty to You. Decisions counterparts have been signed by each of the parties and regarding management of Your business remain the delivered to the other parties. Each party agrees that the responsibility of Your personnel at all times. Neither You nor electronic signatures, whether digital or encrypted, of the FORVIS shall act or represent itself, directly or by implication, parties included in this contract are intended to authenticate as an agent of the other or in any manner assume or create any this writing and to have the same force and effect as manual obligation on behalf of, or in the name of, the other. signatures. Delivery of a copy of this contract or any other document contemplated hereby, bearing an original manual or 30. Use of FORVIS Name. Any time You intend to reference electronic signature by facsimile transmission (including a FORVIS'firm name in any manner in any published materials, DocuSign Envelope ID:CD1C569E-0A62-4017-B7A5-FC567D390A3A City of Pearland, Texas June 8, 2022 Page 13 including on an electronic site, You agree to provide Us with draft materials for review and approval before publishing or posting such information. 31. Praxity. FORVIS is an independent accounting firm allowed to use the name"Praxity"in relation to its practice. FORVIS is not connected,however,by ownership with any other firm using the name "Praxity." FORVIS will be solely responsible for all work carried out on Your behalf. In deciding to engage FORVIS,You acknowledge that We have not represented to You that any other firm using the name "Praxity" will in any way be responsible for Our work. 32. Entire Agreement. The contract, including this Terms and Conditions Addendum and any other attachments or addenda, encompasses the entire agreement between You and FORVIS and supersedes all previous understandings and agreements between the parties, whether oral or written. Any modification to the terms of this contract must be made in writing and signed by both You and FORVIS. 33. Force Majeure.We shall not be held responsible for any failure to fulfill Our obligations if such failure was caused by circumstances beyond Our control, including,without limitation, fire or other casualty,act of God,act of terrorism,strike or labor dispute,war or other violence,explosion,flood or other natural catastrophe, epidemic or pandemic, or any law, order, or requirement of any governmental agency or authority affecting either party, including without limitation orders incident to any such epidemic or pandemic, lockdown orders, stay-at-home orders, and curfews.