HomeMy WebLinkAbout25E - AMEND AGREEMENT MACIAS GINI & O'CONNELLREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
DECEMBER 19, 2011
TITLE:
AMEND AGREEMENT WITH MACIAS GINI &
O'CONNELL, LLT, FOR SINGLE AUDIT OF FEDERAL
AND CALIFORNIA GRANTS SERVICES
CITY MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
? As Recommended
? As Amended
? Ordinance on 151 Reading
? Ordinance on 2nd Reading
? Implementing Resolution
? Set Public Hearing For_
CONTINUED TO
FILE NUMBER
Authorize the City Manager and Clerk of the Council to execute the attached agreement with
Macias Gini & O'Connell, LLP, subject to non-substantive changes approved by the City Manager
and City Attorney, to provide for the Single Audit of Federal and California Grants audit services,
the preparation of final tax returns for the Santa Ana Empowerment Zone, and a contingency of
$7,250 for additional services which may be approved by the City Manager, for a total amount not
to exceed $42,500.
DISCUSSION
On May 1, 2006 the City Council awarded a contract to Macias Gini & O'Connell, LLP for
comprehensive financial audit services for a four-year period covering fiscal years 2005-06 thru
2008-09. The contract was amended on June 2, 2008 for additional services to implement new
auditing standards. On March 1, 2010 staff exercised the final two year contract extensions.
Over the past few years local government agencies have had to respond to increased audit
standards especially in areas of special grant funding. With the passage of the American
Recovery and Reinvestment Act (ARRA) of 2009, the City has received $8,165,864 and
$14,811,241 in fiscal years 2010 and 2011, respectively. Some of the projects and programs
included $4.4 million to improve residential streets, $1.7 million used for the Homelessness
Prevention and Rapid Re-Housing Program, $4.3 million used for Youth, Adult, Dislocated
Worker and Rapid Response Programs, $6.2 million used for Neighborhood Stabilization
Program, as well as $6.4 million for the Energy Conservation program. Under the new audit
standards that are required under Section 1512, recipients are required to report quarterly
accounting for the receipt of funds. On May 4, 2010 the Office of Management and Budget
highlighted additional steps beyond existing policies and procedures that are necessary to carry
out the President's directive for more aggressive action in addressing recipients who are non-
compliant.
25E-1
Amend Agreement with Macias Gini &
O'Connell LLP For ARRA programs
Financial Audit Services
December 19, 2011
Page 2
Due to the unprecedented scope and importance of addressing these additional audit
requirements for ARRA funds, staff is recommending enhancing the scope of services provided
by Macias Gini & O'Connell. It is estimated that the additional audit services, the preparation of
the final tax returns for the Santa Ana Empowerment Zone and contingency for other unforeseen
audit requirements will total approximately $42,500. This will complete all audit services required
from Macias Gini & O'Connell under their existing agreement. Staff will be seeking new proposals
for audit services in the coming year.
FISCAL IMPACT
Funds for these services are available in the Community Development Block Grant program
(13518780-62300), the Workforce Investment Act programs (12318748-62400), the
Neighborhood Stabilization program (14218761-62400), and Public Works - Administrative
Services (10117601-62300) for their respective costs.
Francisco Gutierrez
Executive Director
Finance and Management Services Agenc4/
25E-2
FOURTH AMENDMENT TO
AUDITING SERVICES AGREEMENT
THIS FOURTH AMENDMENT TO AUDITING SERVICES AGREEMENT is
entered into on December 19, 2011, by and between MACIAS GINI & O'CONNELL,
LLP, a California limited liability partnership ("Consultant") and the CITY OF SANTA
ANA, a charter city and municipal corporation of the State of California ("City").
RECITALS:
A. The City and Moreland and Associates entered into Consultant Agreement A-2006-
108, dated May 5, 2006, (hereinafter "said Agreement") by which Consultant has
provided comprehensive financial audit services.
B. By written Assignment N-2008-052, dated April 11, 2008, Moreland and Associates
assigned its rights and obligations in said Agreement A-2006-108 to Macias Gini &
O'Connell, LLP.
C. In accordance with the terms and conditions of said Agreement, the parties wish to
amend the Scope of Services to provide for additional audit services required by the
American Recovery and Reinvestment Act ("ARRA") and the Community
Development Block Grant ("CDBG") programs, include the preparation of final tax
returns for the Santa Ana Empowerment Zone, and increase the compensation to pay
for the additional services.
WHEREFORE, in consideration of the covenants contained in said Agreement, and
subject to all the terms and conditions of said Agreement, except those amended in this
Fourth Amendment to Auditing Services Agreement, the parties agree as follows:
1. Section 1, SCOPE OF SERVICES, shall be amended to provide that in addition to the
services set forth in said Agreement, as previously amended, Consultant will provide
the following services:
a. Consultant shall for the fiscal year ended June 30 2010, and for the fiscal year
ended June 30, 2011, include in its audit services, an audit of all major programs
which received funding through the American Recovery and Reinvestment Act, and
provide additional audit services necessary to comply with increased requirements of
the Community Development Block Grant Program, as set forth in Consultant's
Proposal dated March 8, 2011, attached hereto as Exhibit A-3 and incorporated by
reference.
b. Consultant shall prepare a Final Tax Return for the Santa Ana Empowerment
Corporation, and provide related consulting services, as set forth in Consultant's
Proposal dated November 21, 2011, attached hereto as Exhibit A-4 and
incorporated by this reference.
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2. Section 2.a. COMPENSATION, shall be amended to provide that in addition to the
fees previously authorized, Consultant will accept as total payment for the required
additional auditing services and tax services, the following fees:
• Fiscal year ending June 30, 2010 - additional audit services $14,000
• Fiscal year ending June 30, 2011- additional audit services $14,400
• Santa Ana Empowerment Corporation (SAEC)
Federal & California Final Tax Returns Approximately $1,500
• SAEC Tax Authority Representation, if necessary
Approximately $2,000
The total fees for additional services set forth in this Fourth Amendment to
Agreement shall not exceed $35,000.00.
3. Except as amended hereinabove, all terms and conditions of said Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment to
Auditing Services Agreement on the date and year first written above.
ATTEST:
CITY OF SANTA ANA
MARIA D. HUIZAR
Clerk of the Council
APPROVED AS TO FORM:
JOSEPH STRAKA
Interim City Attorney
By:
Laura Sheedy
Assistant City Attorney
PAUL M. WALTERS
Interim City Manager
MACIAS GINI & O'CONNELL, LLP
LINDA C. HURLEY
Partner
25E-4
Certned Public Accountants.
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March 8, 2011
Francisco Gutierrez
Director of Finance & Management Services
City of Santa Ana
20 Civic Center Plaza
Santa Ana, CA 92701
Dear Mr. Gutierrez:
mgocpa.com
The fee for the 2010 single audit agreed to in our engagement letter dated January 26, 2010, was $14,000
for up to 5 major programs. During our single audit for the fiscal year ended June 30, 2010, we identified
nine major programs required to be tested under the OMB Circular A-133:
CFDA No.
11.555
14.218, 14.253
14.239
14.257
16.710
17.258, 17.259, 17.260
20.205, 20.219
81.128
97.008, 97.067, 97.071
Program Name
Public Safety Interoperable
Community Development Block Grant Cluster
Home Improvement Partnership Program
Homelessness Prevention and Rapid Re-Housing Program
Public Safety Partnership and Community Policing Grant Program
Workforce Investment Act Cluster
Highway Planning and Construction Cluster
Energy Efficiency and Conservation Block Grant Program
Homeland Security Grant Program Cluster
The increase in the number of major programs required to be audited was primarily attributable to the
funding received under the American Recovery and Reinvestment Act (ARRA), which affected six of the
nine programs selected. In addition, there were significant changes to the Community Development
Block Grant (CDBG) program (CFDA #14.218 and 14.253), which included 3 distinct sub-programs
(CDBG, CDBG-ARRA, and NSPI) with different compliance requirements and control environments.
Due to the additional programs and effort required to complete the single audit for 2010, we are
requesting additional fees in the amount of $14,000.
Should you have any questions of would like to discuss our quote further, please call me at 949.296.4340.
Thank you for the opportunity to be of service to the City of Santa Ana.
Sincerely,
Linda C. Hurley, CPA
Partner
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December 1, 2011
PERSONAL AND CONFIDENTIAL
Mr. Francisco Gutierrez
City of Santa Ana
20 Civic Center Plaza M-25
Santa Ana, CA 92701
Engagement Letter & Agreement to Provide Professional Tax Services
Dear Mr. Gutierrez:
We appreciate the opportunity to provide tax services to Santa Ana Empowerment Corporation -
("the Company"). This engagement letter and attachment(s) (collectively, this "Agreement") are
intended to confirm the general nature and scope of services that Macias Gini & O'Connell, LLP
("MGO" or "we") will provide to the company.
Scope of Tax Services
With respect to the following fiscal year-end corporate tax filings, our services will include the
preparation of the following final tax returns for the Company:
Santa Ana Empowerment Corporation, February 28, 2011
Federal Form 990EZ; Federal Return of Organization Exempt from Income Tax
California Form 199 or other state forms as appropriate
We will also assist in representing you regarding a late filing tax notice concerning the above
matters (or other matters as specifically requested in writing by the Company) should any such
matters be raised by the Internal Revenue Service (the "IRS") or other tax authorities (the "Tax
Authority"); we believe they are likely to contact you regarding the late filing or certain related
tax matters (a "tax matter").
Our work in connection with the representation of the Company does not include any procedures
designed to disclose defalcations or other irregularities, should any exist.
We may perform analysis, research or prepare correspondence, memoranda, protests, etc., as we
find and advise appropriate to properly represent you during any tax matter. In connection with
our representation of the Company we will not agree to tax matter adjustments or make any
decisions for you without your express written authorization to do so.
?,., ,
Mr. Francisco Gutierrez
City of Santa Ana
December 1, 2011
Page 2
We will use our judgment in dealing with tax matter issues where the tax law is unclear, where
there may be conflicts between the Tax Authority's interpretations of the law and other
supportable positions. Any proposed adjustments by Tax Authorities are subject to certain rights
of appeal.
During the course of the engagement, we may make good faith recommendations to you
regarding the settlement of disputed issues, or the payment of or refusal to pay additional tax,
penalties or interest as may be asserted by the Tax Authority. In the event you refuse to accept
and act in accordance with such good faith recommendations, we may (solely at our discretion)
be relieved of the obligation to provide any further representation services on your behalf.
The Tax Authority may assess taxes, interest, penalties, etc., regardless of the actions, arguments
or recommendations made or taken by us in the course of our representation of you. We shall
not, under any circumstances, be liable or responsible for the payment of any assessments of tax,
interest or penalty to the Tax Authority resulting from the tax matter or otherwise.
Terms and Conditions
The terms of this Agreement shall be governed by and in accordance with Attachment A of this
letter, which is an important part hereof and should be read carefully. You should be aware that
services under this Agreement may be provided to you by a non-licensee owner; that is, by an
owner of the firm who, because of his or her specialty, is not individually licensed as a Certified
Public Accountant.
All professional services performed, including any additional services that may be requested
shall be governed and construed in accordance with this Agreement including attachment(s).
Fees
Our tax service fees for the tax return preparation, compliance or representation services,
including responding to a late filing penalty notice that may be assessed by one or more of the
Taxing Authorities as described above are estimated at this time as follows:
• Federal & California Final tax returns. Approximately $1,500.
• Tax Authority Representation, if necessary. Approximately $2,000.
Our fees for the tax services described above will be based on our standard rates (discounted to
65%). The above fee is based on anticipated cooperation from your personnel and the
assumption that unexpected circumstances will not be encountered during the performance of the
tax services. 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.
25E-7
Mr. Francisco Gutierrez
City of Santa Ana
December 1, 2011
Page 3
We may also bill for reasonable out-of-pocket expenses and our internal charges for certain
support activities. Our internal charges include certain flat-rate amounts that reflect an allocation
of estimated costs, including those associated with airline ticketing, travel and general office
services, such as computer usage, telephone charges, facsimile transmissions, postage and
photocopying. We leverage our size to achieve cost savings for our clients in all areas of
expense, including those covered by internal charges, and use this system of allocation to
minimize total costs.
Billing Arrangements
Our billing invoices for these professional services, plus any out-of-pocket expenses, will
generally be billed at least monthly. Amounts are due and payable upon receipt. If you wish to
inquire about your billing or about the services that have been rendered, please call our office
when you receive the invoice. If an account has fees that are not paid in a timely manner, then
all work will be stopped. Interest will also be charged to past due amounts. We know that you
understand this concept and employ good fiscal procedures over your collections and,
accordingly, we look forward to your cooperation and understanding.
Obligations of the Company
You agree that the Company will cooperate fully and completely with us in connection with its
representation hereunder, and that all records, documentation and information we request in
connection with any tax matter of the federal and state tax returns will be made available to us
(including those pertaining to related parties), that all material information will be disclosed to
us, and that we will have full cooperation, and unrestricted access to, your personnel during the
course of the engagement.
Upon receipt of any notices, correspondence or communication of any type or kind from the Tax
Authority, the Company shall immediately notify us by telephone and promptly thereafter
provide us with copies of all written communications received.
25E-8
Mr. Francisco Gutierrez
City of Santa Ana
December 1, 2011
Page 4
Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to
be effective and valid under applicable laws, regulations, or published interpretations, but if any
provisions of this Agreement shall be deemed prohibited, invalid, or otherwise unenforceable for
any reason under such applicable laws, regulations, or published interpretations, such provision
shall be ineffective only to the extent of such prohibition, invalidity, or unenforceability and such
revised provisions shall be made a part of this Agreement as if it was specifically set forth herein.
Furthermore, the provisions of the foregoing sentence shall not invalidate the remainder of such
provisions or other provisions of this Agreement.
We believe the foregoing correctly sets forth our understanding; however, if you have any
questions, please let us know. If you find the foregoing arrangements acceptable, please
acknowledge your agreement by signing and returning to us a copy of this letter.
We value your business and we are looking forward to many years of providing quality
professional services to your Company.
Very truly yours,
MACIAS GINI & O'CONNELL LLP
By:
Thomas J. Forb
Tax Partner
Acknowledged:
By: c .??,-?' r,L , ?? A? Date: ?2 I t3 /'?-c
Mr. Francisco Gutierrez %_
Attachment A - Terms and Conditions
cc: Linda Hurley
25E-9
Mr. Francisco Gutierrez
City of Santa Ana
December 1, 2011
Page 5
ATTACHMENT A
TERMS AND CONDITIONS
Services. It is understood and agreed that our services frequently include advice and
recommendations, but all decisions in connection with the implementation of such advice
and recommendations shall be your responsibility. In connection with our services,
Macias, Gini, & O'Connell, LLP ("MGO") shall be entitled to rely on all representations,
decisions and approvals made by you. You agree to release, hold harmless and indemnify
MGO and its personnel from any liability and costs relating to our services under this
agreement attributable to any misrepresentations by you. This indemnification will not be
applicable if it is prohibited under prevailing law, regulations or published interpretations.
These Terms and Conditions, along with the engagement letter to which these Terms and
Conditions are attached (the "Engagement Letter") and all attachments thereto, are
collectively, this "Agreement."
Term. Unless terminated earlier in accordance with its terms, this Agreement shall
terminate on the completion of MGO's services hereunder. Each party shall have the right
to terminate this Agreement at any time by giving written notice to the other party not less
than 10 business days before the effective date of termination. In the event of termination
pursuant to this paragraph, you agree to compensate MGO for services performed and
expenses incurred through the effective date of termination.
MGO Liability. You agree that MGO and its members, partners, employees and agents
shall not be liable to you for any claims, liabilities or expenses relating to this Agreement
for an aggregate amount in excess of the fees paid by you to MGO pursuant to this
Agreement, except to the extent finally judicially determined to have resulted from the
gross negligence or intentional misconduct of MGO or its members, partners, employees
or agents. In no event shall MGO or its members, etc., be liable for consequential, special,
indirect, incidental, punitive or exemplary losses or damages relating to this engagement.
This limitation on liability provision shall apply to the fullest extent of the law, whether in
contract, statute, tort (such as negligence) or otherwise.
4. Third Parties and Internal Use. Except as otherwise agreed, all services hereunder shall be
solely for your internal purposes and use, and this engagement does not create privity
between MGO and any person or party other than you ("Third Party"). This engagement
is not intended for the express or implied benefit of any Third Party. No Third Party is
entitled to rely, in any manner or for any purpose, on the advice, opinions, reports or other
services of MGO. You are, however, authorized to disclose any and all aspects of our
advice, opinions, reports or other services to any persons without limitation. Since our
advice, opinions, reports or other services are solely for your benefit and are not to be
relied upon by others, you must inform anyone to whom you make disclosures that they
may not rely upon our advice, opinions or reports without our written consent.
25E-10
Mr. Francisco Gutierrez
City of Santa Ana
December 1, 2011
Page 6
5. Information and Data. MGO shall be entitled to assume, without independent verification,
that all representations, assumptions, information and data supplied by you and your
representatives will be complete and accurate to the best of your knowledge. MGO may
use information and data furnished by others; however, MGO shall not be responsible for,
and MGO shall provide no assurance regarding, the accuracy of any such information or
data. Except as specifically provided, MGO shall not assume any responsibility for any
financial reporting with respect to the services provided hereunder. You shall be
responsible for all financial information and statements provided with respect to any
services performed hereunder. MGO shall have no responsibility to address any legal
matters or questions of law.
6. Professional Advice. It is our policy to provide all professional advice in writing. You
should not rely on any advice that has not been issued in final form in writing by MGO.
7. Federally-Authorized Tax Practitioner Privileue. Communications between you and
us/our Firm may be privileged under IRC § 7525 in a manner similar to communications
between a client and an attorney, and disclosure of such information may result in waiver
of such privilege. While MGO will not take actions to cause a waiver of such privilege
unless required to by law, MGO will not take affirmative steps to protect or assert
privilege claims on your behalf unless specifically engaged to do so.
8. Consent for Disclosure. Your privacy is very important to us. In the course of maintaining
your privacy and pursuant to recent regulations, we are required to obtain your consent
before we can disclose the Company's tax return information to any third party or use
your tax return information for the purpose of providing you with materials and
information including newsletters regarding general business topics, news about MGO
USA, invitations to MGO-sponsored events, and other business-related items that may be
of interest to you. By signing this Agreement you are consenting to MGO's disclosure or
use of any information provided in connection with the preparation of your tax returns
pursuant to this Agreement along with the disclosure or use of prior years' tax return
information provided to MGO. Your consent will allow MGO to disclose your tax return
information to MGO alliance members, affiliates, related entities or independent
contractors who are involved in providing tax consulting, preparation or review services or
to use your tax return information for a period of up to five years from the date of this
Agreement. Disclosure may be made to MGO affiliates, related entities or independent
contractors located outside the United States and may include all of the information
included in your tax return. You may request a more limited disclosure of your tax return
information by informing MGO.
9. Disclosure of Certain Transactions. The Internal Revenue Code and Treasury regulations
require that taxpayers disclose to the Internal Revenue Service their participation in certain
types of transactions. The failure to properly disclose such transactions may result in the
25E-11
Mr. Francisco Gutierrez
City of Santa Ana
December 1, 2011
Page 7
imposition of substantial penalties. These transactions include: (1) certain "reportable
transactions" including those identified by the Internal Revenue Service as "Listed
Transactions" (or transactions considered to be substantially similar to a Listed
Transaction); (2) certain "uncertain tax positions," for which a corporate taxpayer or
related party has recorded a reserve in an audited financial statement; and (3) transactions
lacking economic substance. (A transaction is treated as having economic substance where
the transaction changes in a meaningful way [apart from federal income tax effects] the
taxpayer's economic position, and the taxpayer has a substantial purpose [apart from
federal income tax effects] for entering into such transaction.) Disclosure may also be
required of transactions entered into in the course of your business that may be considered
typical. In addition, certain state tax shelter rules require taxpayers to file reportable
transactions disclosure statements with the appropriate state income and franchise tax
returns, if applicable. In connection with the performance of tax services covered by this
Agreement, you agree to assume responsibility for adequate disclosure of all reportable
transactions, reportable uncertain tax positions, and/or transactions lacking economic
substance which the Company has entered into. At your request, we will provide you with
a Reportable Transaction Questionnaire to assist you in identifying reportable transactions
which the Company may have entered into. We will advise you if we identify any
reportable transactions based upon information that comes to our attention. We cannot,
however, take responsibility for the identification of reportable transactions, reportable
uncertain tax positions, or transactions lacking economic substance. Further, MGO will
not be liable for any penalties that may be incurred with respect to any failure to
adequately and timely disclose any reportable transactions or transactions lacking
economic substance.
10. Filing Tax Returns. You agree to file the tax returns as prepared by MGO without any
modifications. If modifications must be made to the tax returns prior to filing, you agree to
obtain our written approval in advance.
11. E-mail Communication. In connection with the performance of our services we may
communicate with you or others via email transmission. As emails can be intercepted and
read, disclosed or otherwise used or communicated by an unintended third party, or may
not be delivered to each of the parties to whom they are directed and only to such parties,
we cannot guarantee or warrant that emails from us will be properly delivered and read
only by the addressee. Therefore, we specifically disclaim and waive any liability or
responsibility whatsoever for interception or unintentional disclosure or communication of
email transmissions, or for the unauthorized use or failed delivery of emails transmitted by
us in connection with the performance of this engagement. In that regard, you agree that
we shall have no liability for any loss or damage to any person or entity resulting from the
use of email transmissions, including any consequential, incidental, direct, indirect or
special damages, such as loss of revenues or anticipated profits, or disclosure or
communication of confidential or proprietary information.
25E-12
Mr. Francisco Gutierrez
City of Santa Ana
December 1, 2011
Page 8
12. Record Retention. We want you to be aware of our record retention policy with respect to
your tax files and related documentation. Based on our present policies, we will maintain
this information either in hard copy or electronic format for a period of eight years, after
which it will be destroyed. We may modify our record retention policies from time to
time in accordance with our professional obligations. It is, therefore, important for you to
keep the copies of tax returns and related supporting data in your files.
13. Governing Law and Severability. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California (without giving effect to the choice of
law principles thereof). If any portion of this Agreement, including without limitation any
portion of this Agreement addressing dispute resolution, indemnification or limitation of
liability, is held to be void, invalid or otherwise unenforceable in whole or in part, for any
reason whatsoever, such portion of the Agreement shall be amended to the minimum
extent required to make the provision enforceable and the remaining portions of this
Agreement shall remain in full force and effect.
14. Dispute Resolution Procedure. If any dispute, controversy or claim arises in connection
with the performance or breach of this Agreement, either party may, upon written notice
to the other party, request facilitated negotiations. Such negotiations shall be assisted by a
neutral facilitator acceptable to both parties and shall require the best efforts of the parties
to discuss with each other in good faith their respective positions and, respecting their
different interests, to finally resolve such dispute.
Each party may disclose any facts to the other party or to the facilitator, which it, in good
faith, considers necessary to resolve the dispute. However, all such disclosures will be
deemed in furtherance of settlement efforts and will not be admissible in any subsequent
litigation against the disclosing party. Except as agreed by both parties, the facilitator
shall keep confidential all information disclosed during negotiations. The facilitator shall
not act as a witness for either party in any subsequent arbitration between the parties.
Such facilitated negotiations shall conclude within sixty days from receipt of the written
notice unless extended by mutual consent. The parties may also agree at any time to
terminate or waive facilitated negotiations. The costs incurred by each party in such
negotiations will be borne by it; the fees and expenses of the facilitator, if any, shall be
borne equally by the parties.
If any dispute, controversy or claim arises in connection with the performance or breach of
this Agreement and cannot be resolved by facilitated negotiations (or the parties agree to
waive that process) then such dispute, controversy or claim shall be settled by arbitration.
The arbitration proceeding shall take place in the city in which the MGO office providing
the relevant services exists, unless the parties agree to a different locale. The proceeding
shall be governed by the provisions of the Federal Arbitration Act ("FAA") or, if a court
of competent jurisdiction determines the FAA inapplicable, by the laws of the state in
25E-13
Mr. Francisco Gutierrez
City of Santa Ana
December 1, 2011
Page 9
which the proceeding is to take place. In any arbitration instituted hereunder, the
proceedings shall proceed in accordance with the then current Arbitration Rules for
Professional Accounting and Related Disputes of the American Arbitration Association,
except that no pre-hearing discovery shall be permitted unless specifically authorized by
the arbitration panel.
Such arbitration shall be conducted before a panel of three persons, one chosen by each
party and the third selected by the two party-selected arbitrators. The arbitration panel
shall have no authority to award non-monetary or equitable relief, and any monetary
award shall not include punitive damages. The confidentiality provisions applicable to
facilitated negotiation shall also apply to arbitration. The award issued by the arbitration
panel may be confirmed in a judgment by any federal or state court of competent
jurisdiction.
15. Independent Contractor. MGO and you acknowledge that the relationship between the
parties to this Agreement is exclusively that of an independent contractor and that MGO's
obligations to you are exclusively contractual in nature. This Agreement does not create
an agency, employment, partnership joint venture, trust or other fiduciary relationship
between the parties. Neither party shall have the right to bind the other to any Third Party
nor otherwise to act in any way as a representative or agent of the other except as
otherwise agreed in writing between the parties.
16. Entire Agreement. This Agreement sets forth the entire agreement between the parties
with respect to the subject matter herein, superseding all prior agreements, negotiations or
understandings, whether oral or written, with respect to such subject matter. To the extent
that any of the terms and conditions of the Engagement Letter conflict with these Terms
and Conditions, these Terms and Conditions will control. This Agreement may not be
changed, modified or waived in whole or part except by an instrument in writing signed
by both parties.
25E-14