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Home My Public Portal About06) 7D Approval of Third Amendment to the Agreement with Vavrinek, Trine, Day, and CompanyAGENDA ITEM 7.0. ADMINISTRATIVE SERVICES DEPARTMENT MEMORANDUM DATE: January 2, 2019 TO: The Honorable City Council FROM: Bryan Cook, City Manager By : Susan Paragas, Administrative Serv ices Director SUBJECT: APPROVAL OF A THIRD AMENDMENT TO THE AGREEMENT WITH VAVRINEK, TRINE, DAY & COMPANY, LLP FOR PROFESSIONAL AUDIT SERVICES RECOMMENDATION: The City Council is requested to authorize the City Manager to enter into a third amendment to the agreement for professional audit services ("Third Agreement") with Vavrinek, Trine, Day & Company, LLP ("VTD") for Fiscal Year ("FY") 2018-2019 (see Attachment "A"). BACKGROUND: 1. On January 6, 2016, the City requested proposals from qualified Certified Public Accounting (CPA) firms for a three-year contract to audit its financial statements beginning with the fiscal year ending June 30, 2016, with the option to renew the contract for an additional two fiscal years, for a total of 5 years (see Attachment "B"). 2. On April 5, 2016, the City Council authorized the City Manager to enter into an agreement for professional audit services ("Agreement") with VTD for FY 2015-16 . 3. On April 4, 2017, the City Council authorized the City Manager to enter into a first amendment to the Agreement for professional audit services with VTD for the FY 2016-17. 4 . On April 17, 2018, the City Council authorized .the City Manager to enter into a second amendment to the Agreement for professional audit services with VTD for the FY 2017-18. ANALYSIS: The Governmental Accounting Standards Board ("GASB") establishes accounting and City Council January 2, 2019 Page 2 of 2 financial reporting standards for U.S . state and local governments that follow Generally Accepted Accounting Principles (GAAP). GASS 75, Accounting and Financial Reporting for Postemployment Benefits other than Pensions, is a pronouncement created by GASB requiring cities to post accounting entries and related note disclosures regarding their postemployment benefits ("OPES") plan. For the FY that ended on June 30 , 2018, the City is in need of assistance in preparing the GASS 75 OPES accounting entries and related note disclosures for the City's financial statement. However, it is anticipated that the City's Administrative Services Department will be preparing the required information commencing w ith the FY ending on June 30 , 2019 . The cost for this additional service from VTD is $2 ,500 (see Attachment "C") and will not require additional appropriation as funding is available in the Financial Services Division. The total revised VTD FY 2018-19 agreement amount, for the audit of the year ended June 30 , 2018, shall not exceed $57,090. It is requested that the City Council authorize the City Manager to enter into the Third Amendment with VTD for FY 2018-2019 for the additional GASS 75 fees and services . CITY STRATEGIC GOALS: Actio ns contained in this report align with the City's strategic goal of good governance. FISCAL IMPACT: There is no fiscal impact for FY 2018-2019 as the additional cost of $2,500 is available in account #01-920-48-4233 . The total FY 2018-19 costs, with the Third Amendment, shall not exceed $57,090. ATTACHMENTS: A. Third Amendment to Agreement with VTD B. Cost Fee Proposal from VTD C. GASS 75 Engagement Letter ATTACHMENT A THIRD AMENDMENT TO AGREEMENT FOR SERVICES by and between the CITY OF TEMPLE CITY and / VAVRINEK, TRINE, DAY & COMPANY, LLP Dated January 2, 2019 ATTACHMENT A THIRD AMENDMENT TO AGREEMENT FOR SERVICES This Third Amendment to the Agreement for Services ("Third Amendment"), which is dated for reference as indicated on the cover page, is hereby entered into by and between the CITY OF TEMPLE CITY, a California charter city ("City"), and Vavrinek, Trine, Day & Company, LLP ("Service Provider"), as follows: RECITALS A. On January 6 , 2016, the City requested proposals from qualified Certified Public Accounting (CPA) firms for a three-year contract to audit its financial statements beginning with the fiscal year ending June 30, 2016, with the option to renew the contract for an additional two fiscal years, for a total of 5 years. B . On AprilS, 2016, the City Council authorized the City Manager to enter into an agreement ("Agreement") for professional audit services with VTD for Fiscal Year ("FY") 2015-16 . C . On April 4 , 2017, the City Council authorized the City Manager to enter into a first amendment to the Agreement for professional audit services with VTD for the FY 20 16- 17. D . On April 17, 2018 , the City Council authorized the City Manager to enter into a second amendment to the Agreement for professional audit services with VTD for the FY 2017- 18 . E . On January 2, 2019, the City Council authorized the City Manager to enter into a third amendment to the Agreement for professional audit services ("Third Amendment") with VTD to include the preparation of the required GASB 75, Accounting and Financial Reporting for Postemployment Benefits other than Pensions, accounting entries and disclosures for the FY ended June 30, 2018. OPERATIVE PROVISIONS NOW, THEREFORE, in consideration of the promises made and recited herein, the pruiies do hereby enter into this Third Amendment, which modifies and amends the Agreement as follows: 1. AMENDMENT. The ·Agreement is hereby modified and amended as follows: SECTION 2. SCOPE OF SERVICES : In addition to the scope of services provided in the Agreement, Service Provider is to perform services in the preparation of GASB 75, Accounting and Financial Reporting for Postemployment Benefits other than Pensions, ATTACHMENT A accounting entries and disclosures required in the City's financial statements for FY ended June 30,2018. SECTION 4. COMPENSATION AND METHOD OF PAYMENT: Subject to any limitations set fmth in this Agreement, City agrees to pay Service Provider an additional fee of $2,500 (see Attachment B) for a total compensation of $57,090 for the professional audit services ofFY ended June 30, 2018. 2. GENERAL PROVISIONS. 2.1 Remainder Unchanged. Except specifically . modified and amended in this Third Amendment and previous amendments, First and Second, the Agreement remains in full force and effect and binding upon the parties . 2.2 Integration. This Third Amendment consists of pages 1 to page 6 inclusive, which constitute the entire understanding and agreement of the patties and supersedes all negotiations or previous agreements between the patties with respect to all or any patt of the transaction discussed in this Third Amendment. 2.3 Effective Date. This Third Amendment is effective on the date it has been formally approved by the City Council and executed by the appropriate authorities of the City and Service Provider. 2.4 Applicable Law. The laws of the State of Califomia shall govem the interpretation and enforcement of this· First Amendment. 2.5 References. All references to the Agreement include all their respective terms and provisions. All defined terms utilized in this First Amendment have the same meaning as provided in the Agreement, unless expressly stated to the contrary in this First Agreement. IN WITNESS WHEREOF, the patties hereto have executed this First Amendment to the Agreement on the date and year first written above. CITY: THE CITY OF TEMPLE CITY By: __________________________ ___ Bryan Cook, City Manager ATTACHMENT A ATTE ST: Peggy Kuo , City Clerk APPROVED AS TO FORM Eric S Vail, City Attorney NOTE: SERVICE PROVIDER: Vavrinek, Trine, Day & Company, LLP By: ______________________ __ Name : ------------------- Title: ------------------- By: ______________________ __ Name: ------------------- Title: ------------------- SERVICE PROVIDER'S SIGNATURES SHALL BE DULY NOTARIZED, AND APPROPRIATE ATTESTATIONS SHALL BE INCLUDED AS MAY BE REQUIRED BY THE BYLAWS, ARTICLES OF INCORPORATION, OR OTHER RULES OR REGULATIONS APPLICABLE TO SERVICE PROVIDER'S BUSINESS ENTITY. ATTACHMENT A A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ALL-PURPOSE ACKNOWLEDGMENT NOTARY FOR CALIFORNIA STATE OF CALIFORNIA COUNTY OF LOS ANGELES ) ) On --------,....-=::o------''--'2::.:0=----, before me, ----,.-r:::-::=:::-~rr.l~'rr'T=-:::-::-r-:::-:::'""lTT.=""T"'''-:::::::---~~=;-;:;-;;==-----Date Name And Iitie Of Officer (e .g. "Jane Doe, Notary Public") personally appeared-------------------------------- Name of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct . WITNESS my hand and official seal. Signature of Notary Public OPTIONAL Though this section is optional, completing this information can deter alternation of the document or fraudulent reattachment of this form to an unintended document. CAPACIT(IES) CLAIMED BY SIGNER(S) Signer's Name: Individual Corporate Officer DESCRIPTION OF ATTACHED DOCUMENT Title(s) Title or Type of Document Partner(s) Limited General Attorney-! n-F act Number Of Pages Trustee(s) Guardian/Conservator Other: Date Of Document Signer is representing: Name Of Person(s) Or Entity(ies) Signer(s) Other Than Named Above ATTACHMENT A INTENTIONALLY LEFT BLANK Submitted by: ATTACHMENT B CITY OF TEMPLE CIT.Y, CALIFORNIA Cost Fee ·Proposal for Auditing Services for the Fiscnl Yenrs Ending June 30, 201.6, 2017 and 2018 VA VRJNEJ(, TRINE, DAY & CO., LLP 10681 Foothill Boulevnrd, Suite 300 Runcho Cucamonga, CA 91730 Contnct: Roger Alfau·o, Pa.·tncl' Tel: (909) 466-4410 Fnx: (909) 46(,.((31 r·nlfnl'o@vtdcpn.com Fcbi'UIH'Y 5, 2016 VAVRINEK, TRINE, DAY & COMPANY, LLP Cc•rtljh•d [>u/Jiit' At'1'tJIIIII1tnfs Cost Proposal (All Inclusive Maximum Price) ····--··-·-··---------·--·-··--·---·--------··---·---------------·- SEALED COST PROPOSAL Numc of Finn: Vavrinck, Trine, Duy & Co., LLI' Address: I 06K I Foothill Boulevard, Suite 300 City, State, Zip: Rancho Cucamonga, CA 91730 Contact Nume : Rogel' Alfuro Contuct Telephone Numbcr(s): ...!.(<;_90;,.;;9~)_4:...;;6...:.6_-4:.....;4..;..1 .;...0 ----------- Contact E-muil Addt·css: J. the undersigned , certify I tun duly nuth(lrized 10 rcprc scnt.thc above named linn and nm empowered to submit this bid. In addition , I ccrtil)' I mn mllhorized to contract with the City of Indian Wells-on behalf ol'thc ub()vc named finn. Parlm:r 02/0 5/2 0 16 Title Uutc Roger Altiu·o Nnmc (print) Totnl nil-inclusive mnxlmum fcc for 2015/2016 Audit $ 53,000 Totnlnll-inclusivc maximum fcc for 2016/2017 Audit $ 53,000 Totnl nil-inclusive mnxlmum fcc l'or 2017/2018 Audit $ 54,590 Total nil -inclusive maximum fcc for 2018/2019 Audit $ 56,228 Tiltnl nil-inclusive maximum fcc for 2019/2020 Audit $ 57,914 ! ! I J ; i I i i Cost Proposal (All Inclusive Maximum Price) We arc firmly commillcd to providing the City of Temple City (City with the superior level of pmfcssional services that the Cit)' hus come to expect fi·om its independent auditors . We strive to provide exceptional stuff. qunlity, and value ut the lowest possible l~cs consistent with the c.xpcctnlions of the City. Our niles nrc compi.!litiw , even with our depth of ~·.xpcrience und commitment to quality. However. we do not want 1\:es alone to be nn obstnclc In the City 's selection of Vnvrinek, Trinl.!, Duy & Co .. Ll.l'. We would be happy to discuss and negotiate such fcc issues ;mJ responsibilities with you . Protlosed Audit F~cs ... ... . .. · .. · .. · .. · . . ·. Dcscrivtlon or Services 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 I. Cit)' ufTcmplc Cit)' CAFR Audit (inc lud!!s GANN Limit AlJP) Si 50,000 $ 50,000 $ S 1,500 s 53,045 $ 5•t,bJ(J 2. Sluglc Audit Report (;1ssumcs one majnr progrum) (I) J.onu 3 ,000 3.0\10 3,110 3,2711 -·-·1 Ota 1 lhr Fiscal Y ~ar ( IIOt·tli·CXCCCd) s 53,000 $ 53 .()()0 $ 54,590 s 56,221! $ .:!1.:2.!.:!... 111 Additional mujor progrnms will be $2,500 per progrum. QUOTED HOUUL\' RATES OF TilE FIRM'S 1•1WFESSIONALS: 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 Partner $ 220 .s 220 $ 227 s 233 s 2110 Mm111gcr 1110 ll!O 185 I 9 1 197 Supc1·vlsur 1511 150 155 15 1) 16<1 Senior )111J 140 14-1 1-1\1 153 Stull' 95 1)5 l)l! 101 )()t) l'nnmmli:ssionnl 65 65 67 (II) 71 ATTACHMENT C VAVRINEK, TRINE, DAY~ CO., LLP Certified Public Accountants VALUETHE ~ Susan Paragas Administrative Services Director City of Temple City 9701 Las Tunas Drive Temple City, California 91780 November 28, 2018 We appreciate the opportunity to serve the City of Temple City, California (City) as the independent auditor. This letter is intended to set-forth the bas ic unders tanding that we will assist the City with preparation of accounting entries and related note disclosures related to the C ity 's other postemployment benefits (OPEB) Plan. Management is responsible for the accounting entries and related disclosures as well as making all management decisions. You will be required to acknowledge in the management representation letter our assistance with preparation of the OPEB journal entries and related notes and that you have reviewed and approved the entries and related notes prior to their issuance and have accepted re sponsibi lity for them. Further, you agree to oversee the nonaudit services by designating an individual, preferably from senior management, with suitable ski ll , knowledge, or experience; to evaluate the adequacy and results of those services; and accept responsibility for them. These additional services will require an amendment to our engagement letter dated June I, 2018. The fee to perform the additional services is estimated at $2,500. Please feel free to call me at (909) 466-4410 if you have any questions. Very truly yours, G#/ RogerAle , Vavrinek, Trine, Day, & Co., LLP RA:gbl 1809 10 RESPONSE: This letter correctly sets forth the understanding of the City of Temple City, California. By: ________________________________ __ Title: Date: -------------------------------------- 10681 Foothill Blvd., Suite 300, Rancho Cucamonga, CA 91730 P 909.466.4410 F 909.466.4431 W vtdcpa.com