Crowe Horwath/Street I\ Crowe Horvath,.
3815 River Crossing Parkway
Crowe Horwath LLP Suite 300
Independent Member Crowe Horvath International Indianapolis, Indiana 46240 -0977
Tel 317.569.8989
Fax 317.706.2660
www.crowehorwath.com
May 14, 2010
Mr. David Huffman
Street Commissioner
City of Carmel
3400 West 131 Street
Westfield, IN 46074
Dear Mr. Huffman:
This letter confirms the arrangements for Crowe Horwath LLP "Crowe" or "us" or "we" or "our to provide
financial consulting services, as listed below, in connection with the receipt and audit of Energy Efficiency
and Conservation Block Grant "EECBG funds awarded by the United States Department of Energy for
the City of Carmel, Indiana "the City" or "you" or "your from information you provide. The attached
Crowe Engagement Terms document is an integral part of this letter, and its terms are incorporated
herein.
This service will be performed in accordance with the Standards for Consulting Services established by
the American Institute of Certified Public Accountants. The extent and sufficiency of the services and
procedures to be performed will be determined with you and are solely the responsibility of the
management of the City.
Because these services will not constitute an audit, review, or examination in accordance with standards
established by the American Institute of Certified Public Accountants, we will not express an opinion on
the City's financial statements or accounts used for financial reporting. We have no obligation to perform
any services beyond those listed below. If we were to perform additional services, other matters might
come to our attention that would be reported to you. It is understood that we will prepare a report
reflecting our findings of the consulting services outlined below for use by you. We make no
representations as to the adequacy of these services for your purposes.
OUR UNDERSTANDING OF THE PROJECT
The City of Carmel has received a $633,000 grant from economic recovery funds to support energy
efficiency and conservation programs. The City of Carmel currently maintains approximately 1300 street
lights and will retrofit approximately 800 of those with the light- emitting diode (LED) street light with this
grant. This switch will create energy savings between 30 -50 percent. The LED lights cost less to
operate, last longer, and will require less maintenance. Approximately $264,000 is spent annually on
electricity costs for our current street lights. Replacing 800 of them with LED lights will save approximately
$70,000 a year, which is roughly an 11 percent return on investment.
Mr. David Huffman
City of Carmel
May 14, 2010
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SCOPE OF WORK
Within this engagement, Crowe will perform the following activities:
1. Review reports prepared by the City pertaining to the EECBG to be submitted for the first quarter
for accuracy and completeness, including the SF -425 and grant reporting metrics;
2. Assist with developing procedures for the City to utilize for grant audit documentation purposes;
3. Create a checklist of financial and compliance requirements, and flow -down provisions from the
grant agreement and referenced applicable federal regulations; and
4. Additional advisory services at the request of the City billed at an agreed upon hourly rate. As
requests are made we can provide an estimate of time and fees and convert the project activity to
a fixed fee once defined.
If you decide that additional procedures are needed, we will discuss those with you. It is customary for us
to document such revisions, either by memo or by an addendum to this letter.
Our services and work product are intended for the benefit and use of the City. This engagement will not
be planned or conducted in contemplation of reliance by any other party or with respect to any specific
transaction and is not intended to benefit or influence any other party. Therefore, items of possible
interest to a third party may not be specifically addressed or matters may exist that could be assessed
differently by a third party. The working papers for this engagement are the property of Crowe and
constitute confidential information.
Our engagement cannot be relied upon to disclose errors, fraud, or illegal acts that may exist, and we will
not address legal or regulatory matters or abuses of management discretion, which are matters that
should be discussed by you with your legal counsel. You agree to be responsible to: make all
management decisions and perform all management functions; designate an individual who possesses
suitable skill, knowledge, and /or experience, preferably within senior management to oversee our
services; evaluate the adequacy and results of the services performed; accept responsibility for the
results of the services; and establish and maintain internal controls, including monitoring ongoing
activities. You are also responsible for the accuracy and completeness of the information provided to
Crowe for purposes of this engagement and for timely updating such information.
PROFESSIONAL FEES
Our estimated professional fees for the first three scope of work activities is $19,800. We will provide
additional advisory services at a rate of $195 per hour as specifically requested and preapproved for the
fourth scope item.
We will invoice you for our services on a periodic basis as services are rendered. Our invoices are due
and payable upon receipt. Bills that are not paid within 30 days of receipt are subject to a monthly
interest charge of one percent per month or the highest interest rate allowed by law, whichever is less,
which we may elect to waive at our sole discretion, plus costs of collection including reasonable attorneys'
fees.
Mr. David Huffman
City of Carmel
May 14, 2010
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This engagement letter and the attached Crowe Engagement Terms reflect the entire agreement between
us relating to the services covered by this letter. The headings included in this letter are to assist in ease
of reading only; the letter and attachment are to be construed as a single document, with the provisions of
each section applicable throughout. This agreement may not be amended or varied except by a written
document signed by both parties. It replaces and supersedes any other proposals, correspondence,
agreements and understandings, whether written or oral, relating to the services covered by this letter.
The agreements of the City and Crowe contained in this engagement letter shall survive the completion or
termination of this engagement. If any term hereof is found unenforceable or invalid, this shall not affect
the other terms hereof, all of which shall continue in effect as if the stricken term had not been included.
This agreement shall be governed, construed, and interpreted under the internal laws of the State of
Illinois without regard for choice of law principles.
We thank you for selecting Crowe for this engagement. If the terms of this letter and the attached Crowe
Engagement Terms are acceptable to you, please sign and date below and return a copy of this letter at
your earliest convenience. If you have any questions, please contact Scott Nickerson at (317) 706 -2693
or Mindy Herman (317) 706 -2614.
Thank you for the opportunity to serve the City of Carmel.
Very yours,
Crowe Horwath LLP
By: .1 R. r1 u. -Ae--.--
I have reviewed the arrangements outlined above and in the attached Crowe Engagement Terms, and I
accept on behalf of the City the terms and conditions as stated.
City of Carmel, Indiana
Signature:
Printed Name:
Title:
Date:
Board of Public Works and Safety
City of Carmel
Wor re1/492777
Mayor James Brainard Date
it 1 ‘—/Z
M. y An urke, Member Date
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Lori Wat Member Date
ATTEST:
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Lana L. Cordray, Treasurer Date
Crowe Horwath LLP Engagement Terms
We want you to understand the basis under which we offer our services to you and determine our fees,
as well as to clarify the relationship and responsibilities between your organization and ours. These
terms are part of our engagement letter and apply to all future services, unless a specific engagement
letter is entered into for those services. We specifically note that no advice we may provide should be
construed to be investment advice.
YOUR ASSISTANCE For us to provide our services effectively and efficiently, you agree to provide us
timely with the information we request and to make your employees available for our questions. You will
also provide our personnel with access to the Internet (if available). The availability of your personnel and
the timetable for their assistance are key elements in the successful completion of our services and in the
determination of our fees. Completion of our work depends on appropriate and timely cooperation from
your personnel; complete, accurate, and timely responses to our inquiries; and timely communication by
you of all significant accounting and financial reporting matters of which you are aware. If for any reason
this does not occur, a revised fee to reflect the additional time or resources required by us will be mutually
agreed upon, and you agree to hold us harmless against all matters that arise in whole or in part from any
resulting delay.
If circumstances arise that, in our professional judgment, prevent us from completing this engagement,
we retain the right to take any course of action permitted by professional standards, including declining to
express an opinion or issue other work product or withdrawing from the engagement.
THIRD PARTY PROVIDER We may use a third -party service provider in providing professional services
to you which may require our sharing your confidential information with the provider. If we use a
third -party service provider, we will enter into a confidentiality agreement with the provider to require them
to maintain the confidentiality of your confidential information. The terms of our engagement letter and
these engagement terms shall apply to any third party provider.
CONFIDENTIALITY We will maintain the confidentiality of your confidential information in accordance
with professional standards. You agree not to disclose any confidential material you obtain from us
without our prior written consent, except to the extent such disclosure is an agreed objective of this
engagement. Your use of our work product shall be limited to its stated purpose and to your business
use only. We retain the right to use the ideas, concepts, techniques, industry data, and know -how we use
or develop in the course of the engagement. You agree to the use of fax, email, and voicemail to
communicate both sensitive and non sensitive matters; provided, however, that nonpublic personal
information regarding your customers or consumers shall not be communicated by unencrypted email.
CONSUMER PRIVACY In order to provide the services called for in this engagement, you may be
disclosing to us certain nonpublic personal information regarding your accounts, customers, and consumers.
To the extent permitted by law, we will not disclose any such nonpublic personal information except to you
and our employees and agents. However, in circumstances that fall under an exception in the regulations
"Privacy of Consumer Financial Information" implementing the Gramm Leach Bliley Act, we may disclose or
use such nonpublic personal information in the ordinary course of business to carry out the services in this
engagement. We have implemented and will maintain physical, electronic and procedural safeguards
"Safeguards reasonably designed to protect the security, confidentiality and integrity of, to prevent
unauthorized access to or use of, and to ensure the proper disposal, of nonpublic personal information
regarding your customers or consumers. We further agree that the Safeguards shall meet the objectives of
the Interagency Guidelines Establishing Information Security Standards, adopted by the Office of the
Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation, and the Office of Thrift Supervision, as they currently exist, or as they may be
amended from time to time.
CHANGES We may periodically communicate changes in laws, rules, or regulations to you. However,
you have not engaged us to and we do not undertake an obligation to advise you of changes in laws,
rules, regulations, industry or market conditions, your own business practices, or other circumstances,
except to the extent required by professional standards.
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PUBLICATION You agree to obtain our specific permission before using our report or our firm's name in
a published document, and you agree to submit to us copies of such documents to obtain our permission
before they are filed or published.
NO PUNITIVE OR CONSEQUENTIAL DAMAGES Any liability of Crowe to you shall not include any
special, consequential, incidental, punitive, or exemplary damages or loss nor any lost profits, savings, or
business opportunity.
LIMIT OF LIABILITY The provisions of this section establishing a limit of liability will not apply if, as
determined in a judicial proceeding, we performed our services with gross negligence or willful
misconduct. Our engagement with you is not intended to shift risks normally borne by you to us. With
respect to any services or work product or this engagement in general, the liability of Crowe and its
personnel shall not exceed the fees we receive for the portion of the work giving rise to liability. A claim
for a return of fees paid shall be the exclusive remedy for any damages. This limitation of liability is
intended to apply to the full extent allowed by law, regardless of the grounds or nature of any claim
asserted. This limitation of liability shall also apply after termination of this agreement.
INDEMNIFICATION FOR THIRD -PARTY CLAIMS The provisions of this section for indemnification will
not apply if, as determined in a judicial proceeding, we performed our services with gross negligence or
with willful misconduct. Our engagement with you is not intended to shift risks normally borne by you to
us. In the event of a legal proceeding or other claim brought against us by a third party, you agree to
indemnify and hold harmless Crowe and its personnel against all costs, fees, expenses, damages, and
liabilities, including defense costs and legal fees, associated with such third -party claim arising from or
relating to any services or work product that you use or disclose to others or this engagement generally.
This indemnification is intended to apply to the full extent allowed by law, regardless of the grounds or
nature of any claim asserted. This indemnification shall also apply after termination of this agreement.
NO TRANSFER OR ASSIGNMENT OF CLAIMS No claim against Crowe, or any recovery from or
against Crowe, may be sold, assigned or otherwise transferred, in whole or in part.
TIME LIMIT ON CLAIMS In no event shall any action against you or Crowe, arising from or relating to
this engagement letter or the services provided by Crowe relating to this engagement, be brought after
the earlier of 1) two (2) years after the date on which occurred the act or omission alleged to have been
the cause of the injury alleged; or 2) the expiration of the applicable statute of limitations or repose.
RESPONSE TO LEGAL PROCESS If we are requested by a third party, subpoena or other legal
process to produce documents or testimony pertaining to you or the Professional Services, and we are
not named as a party in the proceeding, you will reimburse us for our professional time, plus out -of- pocket
expenses, as well as reasonable attorney fees we incur in responding to such request. To the extent
permitted by law, we will promptly notify you of the request.
MEDIATION If a dispute arises, in whole or in part, out of or related to this engagement, or after the date
of this agreement, between you or any of your affiliates or principals, and Crowe, and if the dispute
cannot be settled through negotiation, you and Crowe agree first to try in good faith to settle the dispute
by mediation administered by the American Arbitration Association under its mediation rules for
professional accounting and related services disputes before resorting to litigation or any other dispute
resolution procedure. The results of mediation shall be binding only upon agreement of each party to be
bound. Costs of any mediation shall be shared equally by both parties.
JURY TRIAL WAIVER. IF A DISPUTE IS NOT RESOLVED BY NEGOTIATION, THE PARTIES
VOLUNTARILY AGREE TO WAIVE A JURY TRIAL TO FACILITATE JUDICIAL RESOLUTION AND
SAVE TIME AND EXPENSE. EACH PARTY HAS SOUGHT REVIEW OF THIS WAIVER BY ITS
COUNSEL. THIS WAIVER IS IRREVOCABLE, MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND SHALL APPLY TO ANY AMENDMENTS, RENEWALS, OR MODIFICATIONS. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS WRITTEN CONSENT TO A BENCH
TRIAL.
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LEGAL AND REGULATORY CHANGE The scope of services and the fees for the services covered by
the accompanying letter are based on current laws and regulations. If changes in laws or regulations
change your requirements or the scope of our work, you and we agree that our fees will be modified to a
mutually agreed -upon amount to reflect the changed level of our effort.
NON SOLICITATION You and we acknowledge the importance of retaining key personnel. Accordingly,
both parties agree that during the period of this agreement and for one year after its expiration or
termination, neither party will solicit any personnel of the other party for employment without the written
consent of the other party. If an individual becomes an employee of the other party, the other party
agrees to pay a fee equal to the individual's compensation for the prior full twelve -month period to the
original employer.
AFFILIATES Crowe Horwath LLP is an independent member of Crowe Horwath International, a Swiss
verein. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe
Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath
International or any other member of Crowe Horwath International and specifically disclaim any and all
responsibility or liability for acts or omissions of Crowe Horwath International or any other member of Crowe
Horwath International. Crowe Horwath International does not render any professional services and does not
have an ownership or partnership interest in Crowe Horwath LLP. Crowe Horwath International and its other
member firms are not responsible or liable for any acts or omissions of Crowe Horwath LLP and specifically
disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath LLP.
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