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Item C26BOARD OF COUNTY COMMISSIONERS AGENDA ITEM SUMMARY Meeting Date: October 171h, 2007 Division: Budget & Finance Bulk Item: Yes X No Department: OMB Dept. Contact: Tina Boan 4472 AGENDA ITEM WORDING: Approval to waive purchasing policy for the previously approved contract with KPMG for professional services to update the Fiscal Year 2005 and the Fiscal Year 2006 Full Cost Allocation Plan and the OMB A-87 Cost Allocation Plan. ITEM BACKGROUND: Previously the B.O.C.C. approved this contract for services with KPMG but did not formally follow the request for proposal process as required by the Monroe County Purchasing Policy. KPMG has prepared the County's cost allocation from 1998-2004 they have been actively preparing the current allocation plan since July 2007. The waiver is necessary in order to remit payment for work that has already been performed. This change does not cost the County any additional money. PREVIOUS REVELANT BOCC ACTION: On June 20, 2007 the B.O.C.0 approved a contract with KPMG to update the Fiscal Year 2005 and the Fiscal Year 2006 Full Cost Allocation Plan and the OMB A-87 Cost Allocation Plan. On August 18, 2004, the B.O.C.C. approved the execution of a Renewal Letter to update the Fiscal Year 2003 and Fiscal Year 2004 Cost Allocation Plans. The BOCC approved implementation of full cost allocation preparation to be completed by KPMG beginning with Fiscal Year 1998. CONTRACT/AGREEMENT CHANGES: N/A STAFF RECOMMENDATIONS: With the complexity in the preparation of these plans and with familiarity of Monroe County's Cost Allocation previous fiscal year's (1998-2004) plans, staff recommendation is for approval, as it is in the best interest of the County. TOTAL COST: $65, 500 BUDGETED: Yes X No COST TO COUNTY: $65,500 SOURCE OF FUNDS: General Funds REVENUE PRODUCING: Yes No WOUNT PER MONTH Year APPROVED BY: County /P chtsing Risk Management _n/a_ DIVISION DIRECTOR APPROVAL: Deputy/ County Administrator DOCUMENTATION: Included X To Follow Not Required DISPOSITION: _ AGENDA ITEM # BOARD OF COUNTY COMMISSIONERS AGENDA ITEM SUMMARY Meeting Date: June 20, 2007 Division: Budget & Finance Bulk Item: Yes X No Department: OMB Dept. Contact: Salvatore Zappulla x4444 AGENDA ITEM WORDING: Approval of a contract with KPMG to update the Fiscal Year 2005 and the Fiscal Year 2006 Full Cost Allocation Plan and the OMB A-87 Cost Allocation Plan. ITEM BACKGROUND: Full Cost allocation reduces ad valorem taxes by recovering indirect costs from non -ad valorem revenue funds and corrects for indirect cost subsidy to special taxing districts. These two cost allocation plans will be based on expenditures incurred for the fiscal year ended September 30, 2005 and 2006, respectively. KPMG is currently contracted with the State of Florida Department of Management Services (Consulting Services for Management Skills, Contract Number 973-001-06-1) that Monroe County may use in lieu of a formal request for proposal. PREVIOUS REVELANT BOCC ACTION: On August 18, 2004, the BOCC approved the execution of a Renewal Letter to update the Fiscal Year 2003 and Fiscal Year 2004 Cost Allocation Plans. The BOCC approved implementation of full cost allocation preparation to be completed by KPMG beginning with Fiscal Year 1998. CONTRACT/AGREEMENT CHANGES: N/A STAFF RECOMMENDATIONS: With the complexity in the preparation of these plans and with familiarity of Monroe County's Cost Allocation previous fiscal year's (1998-2004) plans, staff recommendation is for approval, as it is in the best interest of the County. TOTAL COST: $65, 500 BUDGETED: Yes X No COST TO COUNTY: $65,500 SOURCE OF FUNDS: General Funds REVENUE PRODUCING: Yes _ No X AMOUNT PER MONTH Year APPROVED BY: County Atty ZOMB/Purchasing Risk Management DIVISION DIRECTOR APPROVAL: Salvatore Za DOCUMENTATION: Included X To Follow Not Required DISPOSITION: AGENDA ITEM # MONROE COUNTY BOARD OF COUNTY COMMISSIONERS CONTRACT SUMMARY Contract with: KPMG Contract # Effective Date: 6/20/2007 Expiration Date: When plans are completed Contract Purpose/Description: To prepare the Full Cost and OMB Circular A-87 Cost Allocation Plans based on expenditures for the fiscal year ended September 30, 2005 and 2006, respectively. Contract Manager: Salvatore Zappulla 4444 Bud et & Finance Sto #1 (Name) (Ext.) (Department/Stop #) for BOCC meeting on 6/20/07 Agenda Deadline: 6/5/07 CONTRACT COSTS Total Dollar Value of Contract: $ $65,500 Current Year Portion: $ $65,500 Budgeted? Yes® No ❑ Account Codes: 001-06041-530340- - Grant: $ County Match: $ ADDITIONAL COSTS Estimated Ongoing Costs: $ /yr For: (Not included in dollar value above) e . maintenance, utilities, janitorial, salaries, etc.) won rorm Kevisea Lll l/vl MI:Y 4z Jun-13-2007 10:03 AM KPMG LLP Orlando 4076489552 2/14 G^_ May 2, 2007 KPMQUP Suite 1B00 111 North Orange Avenue PO Box 3031 Orlando, FL 32802 Mr. Sal Zappulla Budget Director Monroe County Government Office of Management and Budget 1100 Simonton St Rm 2-288 Key West, Florida 33040 Dear Mr_ Zapulla: Telephone 407 423 3426 Fax 407 848 8657 Internet www.us.kpmg com KPMG LLP (KPMG) is pleased to submit this engagement letter to Monroe County, Florida ('County") to provide professional advisory services. The County is requesting assistance with the preparation of the Full Cost and OMB Circular A-87 Cost Allocation Plans based on expenditures for the fiscal year ended September 30, 2006 and 2006 respectively. KPMG's Terms and Conditional for Monroe County are attached to this letter, and become part of the agreement between KPMG and the County. The first plan will be a "full -cost" plan for use in allocating indirect costs to enterprise funds, internal service funds, and certain special revenue funds. The second plan will be prepared in accordance with the Federal Office of Management and Budget Circular A-87, Cost Principles for State and Local Govemments and may be used for allocating indirect costs to the County's federal grant programs. The County is responsible for submitting its cost allocation plan for negotiation and approval d requested by its federal cognizant agency, Please note, current OMB Circular A-87 regulations do not require the County to submit its cost allocation plan for negotiation and approval unless specifically requested by its federal cognizant agency. By accepting this engagement letter, County management accepts responsibility for the substantive outcomes of this engagement and, therefore, has a responsibility to be in a position in fact and appearance to make an informed judgment on the results of this engagement and that the County will comply with the following: • Designate a qualified management -level individual to be responsible and accountable for overseeing the engagement, • Establish and monitor the performance of the engagement to ensure that it meets management's objectives. KPMG LLP. a L; S. iW111(-011ONt" pori"Pron1p, !q ma US ~WW rYM Or VNIN IMwI tn,,V. n SWLM :00pMi" Jun-13-2007 10:03 AM KPMG LLP Orlando 4076489552 3/14 Letter to Monroe County, Florida May 2, 2007 Page 2 Make any decisions that involve management functions related to the engagement and accept full responsibility for such decisions. • Evaluate the adequacy of the services performed and any findings that result_ KPMG Project Team Mr. David Dennis, a partner in KPMG's Orlando office, will serve as the engagement partner. Mr. David Jahosky, a manager in KPMG's Orlando office, will serve as the engagement manager and will serve as the KPMG primary point of contact for this engagement. Mr. Aharon Yoki, a senior associate with KPMG's Govemment practice, will serve as the team lead and will supervise other project staff during the course of the engagement. Engagement Objectives The objectives of this engagement are to assist the County in developing the indirect cost allocation plans (CAP) and an analysis of departments charging user fees. To meet this objective, KPMG proposes to assist the County as follows: Deliverable I — Assist with the preparation of the County's Full Cost Allocation Plan based on County -provided data. The Plan will be prepared in accordance with the full costing concepts that recognize and incorporate central service expenditures of County departments and offices, including "general government" costs. The plan will be prepared based on expenditures incurred for the fiscal year ended September 30, 2006 and 2008, respectively. Deliverable If -- Assist with the preparation of the County's OMB Circular A-87 CAP based on County -provided data_ The A-87 plan contains a determination of allowable costs for providing supporting service. The plan will be prepared based on expenditures incurred for the fiscal year ended September 30, 2005 and 2006, respectively. Work Plan Approach KPMG is prepared to start the project within three weeks from the receipt of the signed engagement letter or executed contract. We estimate that an elapsed calendar time of 120 days from the date of commencement would be required to assist you in the development of the draft reports. This time frame is dependent upon the timeliness of requested information furnished by the County. The County will be responsible for the collection of all statistical information used as allocation basis, as well as all decisions regarding allocation statistics, cost pools, and receiving departments used in the cost allocation plan. KPMG's role will be to advise the County and compile the indirect cost plans after the County has made key decisions. Jun-13-dUU'/ 1U:U4 AM KYMU LLY Urlando 40'/6489bb2 4/14 WOMM HTPW Letter to Monroe County, Florida May 2, 2007 Page 3 We have developed a project timeline that identifies our phased sequence of tasks that coincide with the County's time frame. The following chart depicts a view of project timing by phase. PROJECT 11MEUNE EV PNME As po of our rvOW pWmrp movwV, wt wa w%* with fM GQWWs suff to fnWav $w hmehm. It is anticipated that up to one week of on -site fieldwork at the County's offices will be required for this project. Interviews conducted with County personnel during this time are typically 45 to 60 minutes for central service departments identified for allocation in the plan. Estimates! Project Start Daft _ Estirrtat>rd PrOjoct End Datey June 20Q7 September 2W7 The KPMG Team will follow a phased approach to meet the engagement objective for the County. The project schedule estimates a 120-day time span to generate the draft reports. KPMG wil finalize the reports within approximately 30 days of receipt of the County's written comments. Throughout the engagement, the County will be responsible for all decisions made relative to the composition of the plan, Le. cost pools that are allocated, allocation statistics used to allocate costs etc. KPMG staff will prepare the cost plan reports based on data provided and approved by the County. Jun-13-2007 10:04 AM KPMG LLP Orlando 4076489552 5/14 MEMO LTfqNw Letter to Monroe County, Florida May 2, 2007 Page 4 1 i Organize a project team comprised of KPMG Team personnel and at least one County staff. Issue the County an information request letter. We will work with County staff to keep them informed as our work progresses. 06/18/07 06/29/07 Kick-off meeting with the County staff responsible for working with KPMG in the development of the Cost Allocation Plans (CAP) to discuss the engagement objectives. Conduct fled work. Classify cost centers, services performed, products delivered etc., and identify allocation bases. Collect financial data to develop the indirect cost pools. Meet with County central services to Identify departments' functional activities. KPMG will assist central service department managers to determine the reasonable basis for allocating each of their department's functions. 2 Analyze the County's expenditures to determine the costs for the indirect cost pools for the CAP. 06/18/07 08/10/07 Data collection of departments charging user fees, Conduct interviews as necessary. Review the CDM reconciliation to the audited financial statements used in the CAPs. Enter the allocation Information into the CDM system. Complete double step-down analysis using CDM and develop the associated supporting schedules necessary to prepare the CAPS. Generate the Coat Allocation Plans, including financial and statistical schedules, Issue 3 08/13107 08/24/07 Develop indirect cost pool narratives and explanations. Issue draft report deliverables. Follow Up with County_ Revise CAPs as necessary and %sue final reports. Final timeline dependent on County's ability to review draft report and provide feedback timely. 4 08/27/07 09/28J07 Finalize Work papers and submit to Records Center. "Phase 1. Project Initiation and Fieldwork 3. Issue Draft Reports 2, Data Collection and Analysis 4. Issue Final Reports and Project Closeout Jun-13-2007 10:04 AM KPMG LLP Orlando 4076489552 6/14 !" Letter to Monroe County, Florida May 2, 2007 Page 5 Project Costs and Assumptions Our fees for professional services include professional staffing, administrative support, report production, and travel costs. Total fees will not exceed $65,500. Actual work effort may vary by month, but the cost will not exceed the total dollar amount approved without the prior approval of the County. We will invoice for fees monthly. All invoices are due upon receipt. If unforeseen circumstances cause us to believe that our professional fees will exceed the estimate provided above, we will discuss this situation with you and agree upon an appropriate course of action. Our assumptions for the engagement are as follows: • The County will provide data for central service departments at division / department / fund level (or their equivalent) summaries that provide a reasonable basis for allocating each function's activity to the benefiting department/division. • KPMG will issue a draft report to the County by August 24, 2007. Should KPMG not receive the requested information from the County by July 31, 2007, we will issue the draft reports within 30 days of the receipt of financial, statistical and allocation data. • The County is requested to review the draft reports and provide comments to KPMG within 30 days of receiving the draft report. KPMG will issue the final reports within 30 days of receiving the County's comments. Should the County not provide written comments or request an extension for the review of the draft reports, KPMG will consider the draft reports as finalized and issue the reports in final form. • The County will provide relevant operational, technical, and background Information as required by the engagement team. • The County will provide assistance to help KPMG achieve the successful completion of the engagement. Such assistance will include: ■ Assistance in gaining timely access to documentation, systems, and key personnel ■ Timely feedback at key decision points • Active participation to facilitate the timely resolution of project -related issues. The County will provide a common office space adequate for up to 2 KPMG personnel. The office will include access to a telephone, printer/copier and internet connectivity_ • The County will provide meeting space as needed to conduct interviews and work sessions throughout the project. Jun-13-2007 10:05 AM KPMG LLP Orlando 4076489552 7/14 C,P Letter to Monroe County, Florida May 2, 2007 Page 6 Dellverables and Other Matters Our analysis will be prepared under the Consulting Standards issued by the American Institute of Certified Public Accountants (AICPA) and does not constitute an examination, compilation or agreed upon procedures in accordance with the standards established by the AICPA. This analysis will be prepared based on information received from the County. No independent verification of this information will be made by KPMG and we assume no responsibility for the accuracy or reliability of the information provided to us. The analysis will be intended solely for the use of the County and may not be provided to any third party without the written consent of KPMG and should not be relied upon for any other purposes. Additional Considerations It has been our experience that the County's participation is necessary for this type of engagement to be successful. It is imperative that we receive timely cooperation regarding requested data for effective use of KPMG and County resources. KPMG requests that information provided by the County to be summarized and subtotaled by Department/Division (or equivalent) for the General Fund and by Fund for non General Fund activities. Information requested by KPMG should be provided in both electronic and hard copy formats. We look forward to working with you and your staff in the performance of these services, and would be pleased to discuss this letter with you at any time. For your convenience in confirming these arrangements, we enclosed a copy of this letter. Please sign it and return it to me. Very truly yours, David L. Dennis Partner KPMG LLP ACCEPTED BY THE COUNTY: BOARD Or, COUNTY COMMISSIONERS Or MONROE COUNTY, FLORIDA By: Mayor Mario DiGennaro Date: MONROE COUNTY ATTORNEY PROVED AS TO FO NATILEENE W CASSEL ASSISTANT rjOUNTY ATTORNEY Date/i/r, Jun-13-2007 10:US AM KPMU LLP Urlando 40/64d9y)bZ 8/14 Letter to Monroe County, Florida May 2, 2007 Page 7 (SEAL) Attest: DANNY L. KOLHAGE, CLERK By: Deputy Clerk Date: Jun-13-2007 10:05 AM KPMG LLP Orlando 40"/6489552 9/14 KPMG LLP Terms and Conditions for Monroe County, Florida 1. Services; Client Responsibilities. (a) It is understood and agreed that KPIVG's services may include advice and recommendations; but all divisions in connection with the implementation of such advice and recommendations shall be the responsibility of, and made by, Client. KPMG will not perform management fimctiom or make management decisions for Client, References herein to Client shall refer to Monroe County, Florida. (b) In connection with KPMG's provision of Services under the Enpgcmont l.etter, Client agrees that Client, and not KPMG, shall perform the following functions: (i) make all managancnt decisions and perform all management functions; (il) designate an individual who possesses suitable skill, knowledge and experience, preferably within senior management, to oversee such services, and to evaluate the adequacy and results of such services; (iii) accept responsibility for the results of such services; and (iv) establish and maintain internal controls over the processes with which such services are concanW, including monitoring on -going activities. (c) Subsequent to the completion of this engagement, KPMG will not update its advice, recommendations or woic product for changes or modification to the law and regulations, or to the judicial and administrative interpretations thereof, or for subsequent events or transactions, unless Client separately engages KPMG to do so in writing after such changes or modifications, interpretations, events or transactions. 2. Tax on Services. Client is excerpt from payment of Florida State Sales and Use taxes. KPMG shall not be exempted by virtue of the Client's exemption from paying tax under this agreement, nor is KPMG authorized to use the Client's Tax Exemption Number. KPMG shall be responsible for payment of any and all taxes, or payments of withholding arising from the employment or independent contractor relationship between KPMG and its personnel for services related to or services rendered under this agreement. 3. Termination. Either party may terminate the Engagement Letter at any time by giving written notice to the other party not less than 30 calendar days before the effective date of lemuinution. 4. Ownership and Use of Acdiverables. (a) KPMG has created, acquired, owns or otherwise has rights in, and may, in connection with the performance of services under the Engagement Letter, use, provide, modify, create, acquire or otherwise obtain rights in, concepts, ideas, methods, methodologies, procedures, processes, know-how, techniques, models, templates and software (collectively, the "KPMG Property"). KPMG retains all ownership and use rights in the KPMG Property. Client shall acquire no rights or interest in the KPMG Property, except as expressly provided in the next paragraph. KPMG, acknowledges that KPMG Property shall not include uny of Client's confidential information or tangible or intangible property, and KPMG shall have no ownership rights in such property. Page 1 (b) Except for KPMG Property, and upon full and final payment to KPMG under the Engagement Letter, the tangible items specked as deliverables or work product in the Engagement Letter including any intellectual property rights appurtenant thereto (the "Deliverable") will become the property of Client. If any KPMG Property is contained in any of the Deliverahles, KPMG hereby grants Client a royalty-f cc, paid -up, non-oxclusive, perpetual license to use such KPMG Property in connection with Client's use of the Deliverables. (c) Client acknowledges and agrees that any advice, recommendations, information or work product provided to Client by KPMG in connection with this engagement is for the sole use of Client and may not be relied upon by any third party. Client agrom that it will not make such advice, recommendations, information or work product available to any third party other than as expressly permitted by the Engagement Letter unless Client provides the written notice to the third party in substantially the fornn of Appendix A hereto (the "Notice"), which Notice shall be acknowledged in writing by such third patsy and returned to Client. Upon request, Client shall provide KPMG with a copy of the foregoing Notice and acknowledgement and any notice and acknowledgement sent to Client by such third party as contemplated by the Notice. Notwithstanding the foregoing, (i) in the event of a disclosure made by Client that is required by law, that is made to a regulatory authority having jurisdiction over Client or that is made pursuant to Paragraph 17(a) below, no acknowledgement of the Notice shall be required and (ii) no Notice or acknowledgement shall be required with respect to disclosures expressly authorised by the Engagement fetter. S. Warranties. KPIv1G's services under the Engagement Letter arc subject to and will be performed in accordance with American Institute of Certified Public Accountants ("AICPA") and other professional standards applicable to the services provided by KPMG under the Engagement Letter and in accordance with the terms thereof. KPMG diaclaimg all other wamantics, either express or implied. 6. Limitation on Damages. Except for each party's indemnification obligations herein, neither Client nor KPMG shall be liable to the other for any ta:ttons. damages, claims, liabilities, costs, expanses or losses in any way arising out of or relating to the services performed under the Engagement Letter for an aggregate amount in excess of the fees paid or owing to KPMG under the Engagement Letter. In no event shall either party be liable for consequential, special, indirect, incidental, punitive or exemplary damages, ewsts, expenses, or losses (including, without limitation, lost profits and opportunity costs). 7. lnfriogemeat. (a) KPMG hereby agrees to indemnify, hold harmless and defend Client from and against any and all claims, liabilities, losses, expenses (including reasonable allomeys' tees), fines, penalties, taxes or damages (collectively "Liabilities") usserted by a third putty against Client to the extent such Liabilities result from the infringement by the IViverahles (including any KPMG Property contained therein) of such third party's patents issued as of the date of the Engagement Letter, trade secrets, trademarks or Jun-13-2007 10:06 AM KPMG LLP Orlando 4076489552 10/14 KPMG LLP Terms and Conditions for Monroe County, Florida copyrights. The preceding indemnification shall not apply to auy infringement arising out of (x) use of the Deliverables other than in accordance with applicable documentation or instructions supplied by K13MG or other than in accordance with Paragraph 4(c); (y) any alteration, modification or revision of the Deliverables not expressly geed to in writing by KPMG; or (z) the combination of the Deliverables with materials not supplied or approved by KPMG. (b) In case any of the Deliverables (including any KPMG Property contained therein) or any portion thereof is held, or in KPMG's reasonable opinion is likely to be held, to constitute infrfngcment, KPMG may, within a reasonable time, ul its option either. (i) secure for Client the right to continue the use of such infringing item; or (ii) replace, at KPMG'% sole expense, such item with a substantially equivalent non -infringing item or modify such item so that it becomes non -infringing. In the event KPMG is, in itss rrasunablt discretion, unable to perform either of options described in (i) or (ii) above, Client shall return the Deliverable to KPMG, and KPMG's sole liability shall be to refund to Client the amount paid to KPM0 for such item; provided that the foregoing shall not be construed to limit KPMG's indemnification obligation set forth in Paragraph 7(a) above, (c) Thor provisions of this Paragraph 7 state KPMG's entire liability and Client's solo and exclusive remedy with respect to any infringement or claim of infringement. 8. Indemnification. (a) KPMG covenants and agrees to indemnify and hold harmless Client from any and all claims, losses, damages, and expenses (including reasonable attorney's fees) for bodily injury (including death}, and heal or tangible property damage (including property owned by Client) which arise out of, in connection with, or by reason of services provided by KPMG occasioned by the negligence, errors, or other wrongful act of omission of KPMG, its employees, or agents. (b) The extent of liability is in no way limited to, reduced, or lessened by the insurance requirements contained elsewhere within this agreement. Failure of KPMG to comply with the roquiretnents of this section shall be cause for immediate termination of this agreement- (c) The party entitled to indemnification (the "Indemnified Party") shall promptly notify the party obligated to provide such indemnification (the 'Indemnifying Party") of any claim for which the Indemnified Party seeks indemnification. The Indemnifying Party shall have the right to conduct the defense or settlement of any such claim at the Indemnifying Party's sole expense and the Indemnitied fatty shall cooperate with the Indemnifying Party. The party not conducting the defense shall nonetheless have the right to participate in such defense at its own expense. 'fhe Indemnified Party shall have the right to approve or reject the settlement of any claim that imposes any liability or obligation other than the payment of money damages. (d) Nothing in this agreement shall constitute a waiver of the provision of Sec. 768.28, Florida Statutes. Pap 2 (e) Notwithstanding the provisions of Sec. 768.28, Florida Statutes, the participation of Client and KPMG in this Agrccment, and the aA4uisition of any commercial liability insurance coverage, self-insurance coverage, or local government liability insurance pool coverage shall not be deemed a waiver of immunity to the extent of liability coverage, nor shall any Agreement catered into by the Client be required to contain any provision for waiver. 9. Cooperation; Use of Information. (a) Client agrees to cooperate with KPMG in the performance of the services under the Engagement Wter and shall provide or arrange to provide KPMG with timely access to and use of the personnel, facilities, equipment, data and information to the extent accessary for KPMG to perform the services under the Engagement Letter. The Engagement Letter may set forth additional obligations of Client in connection with this engagement. Client acknowledges that Chcat's failure to perform these obligations could adversely affect KIIMG's ability to provide the services under the Engagement Letter. (b) Client acknowledges and agrow that KPMG will, in performing the services under the Engagement Letter, base its conclusions on the facts and assumptions that Client furnishes and that KPMG may use data, material, and other informelon furnished by or at the request or direction of Client without any independent investigation or verification and that KPMG shall be entitled to rely upon the accuracy and completeness of such data, material and other information, Inaccuracy or incompleteness of such data, material and other information furnished to KPMG could have a material effect on KPMWs conclusions. 10. Independent Contractor. It is understood and agreed that each of the parties hereto is an independent wntraetor and that neither party is or shall be considered an agent, distributor Or representative of the other. Neither party shall act or represent itself, directly or by implivattiun, as an agent of the other or in any manner assume or create any obligation on behalf uli or in the namc of, the other. 11. Confidentiality. (a) "Confidential Information" means all documents, software, reports, data, records, forms and other materials obtained by one party (the "Receiving Party') from the other party (the "Disclosing Party") or at the request or direction of the Disclosing Party in the course ofpertixming the services under the Engagement Letter: (i) that have been marked as confidential; (ii) whose confidential nature has been made known by the Disclosing Party to the Receiving Parry; or (iii) that due to their character and nature, a reasonable person under like circumstances would treat as confidential. Notwithstanding the foregoing, Confidential Information does not include information which: (i) is already known to the Receiving Party at the time of disclosure by the Disclosing Party; (ii) is or becomes publicly known through no wrongful act of the Receiving Party. (iii) is independently developed by the Receiving Party without benefit of the Disclosing Parry's Confidential Information; (iv) relates to the tax treatment or tax structure of any transaction, (v) the Receiving Party determines is required to be maintained or disclosed by the Receiving Party wider sections 6011, 6111 or 6112 of the Internal Jun-13-2007 10:06 AM KPMG LLP Orlando 4076489552 KPMG LLP Terms and Conditions for Monroe County, Florida Revenue Code ("IRC') or the regulations thereunder or under any similar or analogous provisions of the laws of a state or other jurisdiction or (vi) is received by the Receiving ('arty from a third party without restriction and without a breach of an ohligation of confidentiality. (b) The Receiving Party will deliver to the Disclosing Party all Confidential Information of the Disclosing Party and all copies thereof when the Disclosing Party request the same, except for one copy thereof that the Receiving Party may retain for its records. The Raxiving Party shall not use or disclose to any person, firm or entity any Confidential Information of the Disclosing Party without the Disclosing Patty's express, prior written permission; provided, however, that notwithstanding the foregoing, the Receiving Party may disclose Confidential Information to the extent that it is required to be disclosed pursuant to a statutory or regulatory provision or court order or to fulfill professional obligations and standards. (c) Each party shall be deemed to have met its nondisclosure obligations under this Paragraph I I as long as it exercises the same level of care to protect the other's information as it exorcises to protect its own confidential information but in no event less than reasonable care, except to the extent that applicallo law or professional standards impose a higher requirement (d) If the Receiving Party receives a Subpoena or other validly issued administrative or judicial demumd requiring it to disclose the Disclosing Patty's Confidential Information, the Receiving Party shall provide prompt written notice to the Disclosing Party of such demand in order to permit it to seek a protective order. So long as the Receiving Party gives notice as provided herein, the Receiving Party shall be entitled to comply with such demand to the extent permitted by law, subjevi to any protective order or the like (fiat may have been entered in the matter, (c) Client and KPMG shall allow and permit reasonable access to, and inspection ol; all documents, paapom letters or other materials related to this contract in its possession or under its control that arc subject to The provisions of Chapter 119, Florida Statutes, and made or rcccived by the Client and KPMG in oonjunetion with this Agreement; and the Client shall have the right to unilaterally cancol this Agreement upon violation of this provision by KPMt3. 12. Assignment; Use of Member Firmt. Neither party may assign, transfer or delegate any of its rights or obligations without the prior written consent of the other party, such consent not to be unreasonably withheld. Notwithstanding the foregoing, to the extent any of the services under the Engagement Letter will be performed in or relate to a jurisdiction outside of the United States, Client acknowledges erred agrees that such services, including any applicable tax advice, may be performed by the member firm of KPMG International practicing in such jurisdiction. Accordingly, Client consents to KPMG's disclosure to a member firm and such me,, lirm's use of data and information, including tax return information, received from or au the request or direction of Client for the purpose of completing the services under the Engagement Letter_ Page 3 13. Severability. Ja the event that any term or provision of the Engagement Letter or these terms shall be held to be invalid, void or unenforceable, then the remainder of the Engagement Latter and these terms shall not be affected, and each such term and provision shall be valid and enforceab)e to the fullest extent permitted by law. 14. Alternative Dispute Resolution. (a) The Client and KPM(J agree that, in the event of conflicting intcrprelatium of the tams or a term of the Fngagement Letter including these Terms and Conditions. or of any other dispute arising out of the Engagement Letter including these Terms and conditions, by or between any of them the issue shalt he guhmitted to mediation prior to the institution of any other administrative or legal proceeding. (b) If one of the parties subsequently institutes any administrative nr legal proceeding the parties agree to mediation if roquirod by any administrative judge or Circuit or County Court Judge. (c) Any mediation initiated and conducted pursuant to this Engugcmcnt Letter either prior to or suhsequent to institution of any administrative or Icgal proceeding shall be conducted in accordance with the Florida Rules of Civil Procedure and usual or customary procedures required by the circuit court of Monroe County. 15. Miscellaneous. (a) Fxcerpt as otherwise set forth in the Engagement Letter, in accepting this criMcmalt, Client acknowledges that completion Of this engagement or acceptance of Deliverables resulting from this engagement will not constitute a basis for Client's assessment or evaluation of internal control over financial reporting and disclosu$c controls and procedures, or its compliance with its principal officer certification requirements under Section 302 of the Sarbanes-Oxley Act of 2002 (the "Act"). The services under the Engagement Letter shall not be constmod to support Clicni's responsibilities under Section 404 of the Act requiring each annual report filed under Section 13(a) or I5(d) of the Securities Exchange Act of 1934 to contain tan inlcmul control report from management (b) KPMG (nay communicate with Client by electronic mail or otherwise transmit documents in electronic form during the course of this engagement. Client accepts the inherent dike of these forms of communication (including the security risks of interception of or unauthorized access to such communications, the risks of corruption of such communications and the rick+ of viruses or other harmful devices) and agrees that it (nay rely only upon a final hudcopy version of a document or other communication that KPMG transmits to Client unless no such hard copy is tra nsmillcd by KPMG to Client. (c) For engagements where services will be provided by KPMG through otlices located in California, Client acknowledges that certain of KPMG's personnel who may he considered "owners" under the California Accountancy Act and implementing regulations (California Business and Professions Code section Jun-13-2007 10:07 AM KPMG LLP Orlando 4076489552 12/14 KPMG LLP Terms and Conditions for Monroe County, Florida 5079(a); 16 Cal. Code Regs, sections 51 and 51.1) and who may provide, services in CorWtion With this engagement, may not be liccawd as certified public accountants under the laws of any of the various states. (d) Where KPMG is reimbursed for expenses, it is KPMO's policy to hill clients the amount incur rod at the time the good or service is purchased. If KPMG subsequently receives a volume rebate or other incentive payment from a vendor relating to such expenses, KPMG does not credit such payment to Client. Instead, KPMG applies such payments to reduce its overhead costs, which costs arc taken into account in determining KPMG's standard billing rates and certain transaction charges that may be chHrged to clients. (c) Except as permitted by law or the terms of the Engagement Letter, neither parry shall acquire hereunder any right to use the name or logo of the outer patty or any part thereof. Any such use shall require the express written consent of the owner party. 16. Entire Agreement, The Engagement I ew and these Terms and Conditions, including the Exhibits and Appendices hereto and thereto, constitute the entire agreement between KPMG and Client with respect to the services under the Engagement Letter and supersede all other oral and written representation, understandings or agreements relating thereto. 17. Additional Terms for Engagements Involving Tax Servieee. (a) Notwithstanding anything to the contrary set forth herein, no provision in the Engagement Letter or these Terms and Conditions is or is intended to be construed as a condition of confidentiality within the meaning of IRC sections 6011, 6111, 6112 or the regulations thereunder, or under any simihir or analogous provisions of the laws of a state or other jurisdiction. In particular, Client (and each employee representative, or other agent of Client) may disclose W any and all persons, without limitation of any kind, the tax treatment and tax structure of any transaction within the scope of this engagement and all materials of any kind (including opinions and other tart analyses) that are provided to Client relating to such tax treatment and tax structure. Client also agrees to use commercially reasonable ef%rts to inform KPMG of any conditions of confidentiality imposed by third party advisors with respect to any transaction on which KPMG advice is requested, Such notification must occur prior to KPMG providing any advice with respect to the transaction. (b) Treasury regulations under IRC section 6011 require taxpayers to disclose W the IRS their participation in reportable transactions and IRC section 6707A imlwscs strict penalties for noncompliance. Client agrees to use commercially reasonable efforts W inform KPMG if Client is required to disclose any transaction covered by the Engagement Letter as a reportable transaction to the IRS or to any state or other jurisdiction adopting similar or analogous provisions. ]PC section 6111 requires a material advisor with respect to a reportable transaction to disclose information on the transaction to the IRS by a prescribed date, and IRC section 6112 requires the material advisor to muinWn, and make available to the IRS upon request, a list of persons and other information with respect to the transaction. KPMG will use commercially reasonable elTorts to inform Client if KPMG) Pape 4 provides Client's identifying information to the IkS under IRC section 6111 or 6112, or to any state or other jurisdiction adopting similar or analogous provisions- (c) Information relating to advice KPMG provides to Client, including communications between KPMG and Client and material KPMG creates in the course of providing advice, may be privileged and prvteoted from disclosure to the IRS or other govemmental authority in certain circumstances. As KPMG is not able W assert the privilege on Client's behalf with respect to any communications for which privilege has been waived, Client agrees to notify KPMG of any such waivers, whether resulting Itom communications with KPMG or third parties in the same or a related malter. Client also understands that privilege may not be available for communications with an audit client and that KPMG personnel providing audit and non -audit services will discuss maltas that may uffect the audit to the extent required by applicable professional standards, Client agues that KPMG will not assert on Client's behalf any claim of privilege unless Client spccifiudly instructs KPMG in writing to do so after discussing the specific request and the grounds on which such privilege claim would be made. Notwithstanding the foregoing. Client acknowledges that in no event will KPMG assert any claim of privilege that KPMG concludes, after exercising reasonable judgment, is not valid, (d) Unless expressly provided for, KPMG's services do not include representing Client in the event of a challenge by the IRS or other tax or revenue authorities. (c) Client acknowledges that in connection with any tax compliance services provided by KPMG under the Engagement Letter, KPMG VARY utilize the services of affiliates and third party service providers within and without the United States to organi2e and input data, operate the software used to generate lux returns for Client or its personnel and perform other related tasks. Client hereby consents to KPMG's use of such affiliates and third panty service providers and the disclosure to such affiliates and third party service providers and their use of tax return information, rocxivcd ftom Client or its personnel for the purpose of preparing, assisting in preparing, or obtaining or providing services in connection with preparing, any tax return required under the Engagement Letter. (f) In rendering tax advice, KPMG may consider, for example, the applicable provisions of the internal Revenue Code of 1996, and the Employee Retirement Inuome Security Act of 1973, each as amended, and the relevant state and foreign statutes, the regulations thereunder, income tax treaties, and judicial and administrative interpretations, thereof. These authorities are subicct to change, retroactively or prospectively, and any such changes could affect the validity of KPMG's advice. I li. Lleminire. KPMG has, and shall maintain throughout the term Of this Engagement Letter, appropriate ficenscs_ Proof of such licenses and approvals shall be submitted to the Client upon request and shall maintain such licenses throughout the term of this Engagement Letter. 19. Financial Records of KPMG. KPMG has, and shall maintain throughout the term of this Engagement Letter, appropriate Jun-13-2007 10:08 AM KPMG LLP Orlando 4076489552 13/14 KPMG LLP Terms and Conditions for Monroe County, Florida licenses. Proof of such licenses and approvals shall be submitted to the Client upon request and shall maintain such licenses throughout the term of this Engagement Letter, 20. Compliance with Law and License Requirements. In providing all services/goods pursuant to this agreement, KPMO shall abide by ail statutes, ordinances, rules and regulations pertaining to, or regulating the provisions of, such services, including those now in clIect and hereinafter adopted. Any violation of said statutes, ordinances, rules and regulations shall constitute a material breach of this agreement and shall entitle the Client to tcm hale (his Engagement Letter, 21, No Pledge of Credit. KPMG shall not pledge the Client's credit or make it a guarantor of payment or surety for any contract, debt, obligation, judgrncnl, lien, or any form of indebtedness, KPM(i further warrants and represents that it has no obligation or indebtedness that would impair its ability to fulfill the terns of this Engagement Letter, 22. Governing Law, Venue, interpretation, Costs, and Feet This Engagement Letts shall be governed by and construed in accordance with the laws of the State of Florida applicable to Agrccmcnls utade and to be performed entirely in the State. In the event that any cause of action or administrative proceeding is instituted for the enforcement or interpretation of this Engagement Letter, the Client and KPMO agree that venue will lie in the appropriate court or before the appropriate administrative body in Monroe County, Florida. BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORWA By: Mayor Mario DiGennaro Date: (SEAL) Attest: DANW L. KOLHAGE, CLERK By: Deputy Clerk Date: Dav' L. Dennis artner KPMG LLP Date: p11-06-7 Page 5 MONR E COUNTY ATTOR Y AP ROVEp AS TO FO NATI EENE W CASSEL SSISTANT COUN 'Y ATTORNEY Date d Jun-13-2007 10:08 AM KPMG LLP Orlando 4076489552 14/14 APPENDIX A [FORM OF NOTICE AND ACKNOWLEDGEMENTI [Name of Third Party] Address The advice, recommendations and information in the document included with this notice were prepared for the sole benefit of [Name of Client], based on the specific facts and circumstances of [Name of Client], and its use is limited to the scope of KPN4G's engagement for [Name of Client]. It has been provided to you for informational purposes only and may not be relied upon by you or any other person or organization. You acknowledge and agree that KPMG accepts no responsibility or liability in respect of the advice, recommendations or other information in such document to any person or organization other than [Name of Client]. You shall have no right to disclose the advice, recommendations or other information in such document to anyone else without including a copy of this notice and obtaining a signed acknowledgement of this notice from the party to whom disclosure is made and you provide a copy thereof to [Name of Client]. You acknowledge and agree that you will be responsible for any damages suffered by KPMG as a result of your failure to comply with the terms of this notice. *Please acknowledge your acceptance of the foregoing by signing and returning to us a copy of this letter. Very truly yours, [Name of Client] By: Name: Title: *Accepted and Agreed to on this _ day of , , 20_ by: [Name of Third Party By: Name: Title: * Remove if a signed acknowledgement is not required by the terms of Paragraph 4(c). Page 6 Jun- 3-2007 10:03 AM KPMG LLP Orlando 4076489552 1/14 a. u KPMG LLP Telephone 407 423 3426 P.O. Box 3031 Fax 407 648 8557 Orlando, FL 32802-3031 RECEIVE© To Natileene W. Cassel, Esq. From David L Dennis rjum 1 : j 2007 Organization 305gonization 292 3516Telephone 1 407 563 2227 County Attorney Department A?t)NAOE Fax COUNTY ATTORNEY Fax 1 407 264 6171 Copy to Ref Date June 13, 2007 Page 1 of 14 Subject Monroe County Engagement Getter; Monroe County Terms and Conditions The information contained in this facsimile message is privileged and confidential and intended solely for the use of the addressee listed above. If you are neither the intended recipient nor the employee or agent responsible for delivering this message to the Intended recipient, you are hereby notified that KPMG LLP, s U.S. limited liability any disclosure, copying, or distribution and the taking of any action in reliance partnership, is the U.S. member on the information contained herein are strictly prohibited. If you have received firm of KPMG International, a this facsimile message in error, please immediately notify the sender by Swiss 000perative, telephone to arrange for the return of the original document to us.