HomeMy Public PortalAbout08) 7E First Amendment to Agreement with Vasquez & CompanyCity Council
June 17, 2014
Page 2 of 2
Pulido) and Accountant (i.e., Lee Ma) conducted an interview meeting with
Vasquez & Company, LLP representatives.
8. On August 2, 2011, the City Council approved the Consultant Agreement with
Vasquez & Company, LLP for auditing and accounting services and authorized the
City Manager to execute the Consultant Agreement with Vasquez & Company,
LLP in an amount not to exceed $45,000.
9. On June 3, 2014, the City Council approved the FY 2014-15 City Budget.
ANALYSIS:
Consistent with the City Council's directive during the FY 2010-11 City Budget
deliberations, staff completed the formal RFP process for the City's auditing and
accounting services. A Consultant Agreement with Vasquez & Company was approved
by the City Council and executed by the City Manager. The Consultant Agreement had
an initial term of three years with two, one year extensions.
Vasquez & Company's auditing services have been satisfactory.
CONClUSION:
As a result of Vasquez & Company's satisfactory auditing services, it is recommended
the City Council approve a one year extension with Vasquez & Company, LLP for
auditing services for the period ending June 30, 2014.
FISCAL IMPACT:
The initial annual cost for the auditing and accounting services was $45,000. The
agreement allows for an increase annually based on the consumer price index (CPI) for
each year thereafter. The cost proposed for auditing services by Vasquez & Company,
LLP for the period ending June 30, 2014 is $52,093. The City Council approved a
$54,000 appropriation in the FY 2014-15 City Budget for auditing and accounting
services.
ATTACHMENTS:
A. First Amendment to Consultant Agreement between the City of Temple City and
Vasquez and Company, LLP
B. Consultant Agreement between the City of Temple City and Vasquez and
Company, LLP
RlV #4840-1328-257! vl
FIRST AMENDMENT TO
Consultant Services Agreement
by and between
the
CITY OF TEMPLE CITY
and
Vasquez & Company, LLP
Dated June 17, 2014
ATTACHMENT A
FIRST AMENDMENT TO CONSULTANT SERVICES AGREEMENT
This First Amendment to Consultant Services Agreement ("First 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 Vasquez & Company, LLP., a
limited liability partnership ("Consultant"), as follows:
RECITALS
A. City and Consultant entered in a consultant services agreement on July 28, 2011
("Agreement"). The Agreement provides that Consultant will provide services defined
and described in Section 2 of this Agreement.
B. Section 2 of the Agreement provides the Scope of Services to be performed by the
Consultant.
C. This First Amendment amends the term of the agreement by one year (i.e., June 30,
2015).
OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the promises made and recited herein, the
parties do hereby enter into this First Amendment which modifies and amends the Agreement as
follows:
1. AMENDMENT. The Agreement is hereby modified and amended as follows:
1. TERM OF AGREEMENT
Exhibit "A" to the Agreemel)t is hereby amended to extend the Consultant
Services Agreement by one Jiyar with the option to renew for another one
year.
4. COMPENSATION.
Section 4 of the Agreement is hereby amended as follows:
The second sentence of Section 4, subparagraph (a) of the agreement is
amended to read as follows: "The total compensation shall not exceed
FIFTY TWO THOUSAND AND NINETY THREE DOLLARS
($52,093 ), unless additional compensation is approved in writing by the
City Council or City Manager."
2. GENERAL PROVISIONS.
2.1 Remainder Unchanged. Except as specifically modified and amended in
this First Amendment, the Agreement remains in full force and effect and binding upon the
parties.
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2.2 Integration. This First Amendment consists of pages 1 through _
inclusive, which constitute the entire understanding and agreement of the parties and supersedes
all negotiations or previous agreements between the parties with respect to all or any part of the
transaction discussed in this First Amendment.
2.3 Effective Date. This First Amendment shall not become effective until
the date it has been formally approved by the City Council and executed by the appropriate
authorities of the City and Consultant.
2.4 Applicable Law. The laws of the State of California shall govern 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 Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to
the Agreement on the date and year first written above.
ATTEST:
Peggy Kuo, City Clerk
APPROVED AS TO FORM
Eric S. Vail, City Attorney
RIV #4840-!328-257! vi
CITY:
THE CITY OF TEMPLE CITY
By:=---.~~---.-,--~~-....-Donald E. Penman, Interim City Manager
CONSULT ANT:
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By: ________________________ _
Name: ____________ _
Title: ___________ _
By: _______________________ __
Name: ----------------------
Title: ___________ ___
R!V #4840~1328-2571 vi -3-
ATTACHMENT B
CONSULT ANT SERVICES AGREEMENT
By and Between
THE CITY OF TEMPLE CITY,
a municipal corporation
and
VASQUEZ & COMPANY LLP
AGREEMENT FOR CONSULTANT SERVICES
BETWEEN
THE CITY OF TEMPLE CITY, CALIFORNIA
AND
VAQUEZ & COMPANY LLP
This Agreement for Consultant Services (''Agreement") is entered into as of this ~ay
of 1.1~ _ . 2011 by and between the City of TEMPLE CITY, a municipal corporation ("City;')~d Vasquez & Company, LLP, a California limited liability partnership ("Consultant").
City and Consultant are sometimes hereinafter individually referred to as "Party" and hereinafter
collectively referred to as the "Parties."
RECITALS
A. City has sought, by issuance of a Request for Proposals or Invitation for Bids, the
performance of the services defined and described particularly in Section 2 of this Agreement.
B. Consultant, following submission of a proposal or bid for the performance of the
services defined and described particularly in Section 2 of this Agreement, was selected by the
City to perform those services.
C. Pursuant to the City of Temple City's Municipal Code, City has authority to enter
into this Consultant Services Agreement and the City Manager has authority to execute this
Agreemenl.
D. The Parties desire to formalize the selection of Consultant for performance of
those services dctined and described particularly in Section 2 of this Agreement and desire that
the terms of that perfom1ance be as particularly defined and described herein.
OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the mutual promises and covenants made by
the Parties and contained here and other consideration, the value and adequacy of which are
hereby acknowledged, the parties agree as follows:
SECTION I. TERM OF AGREEMENT.
Subject to the provisions of Section 20 "Termination of Agreement" of this Agreement,
the scope of services set forth in Exhibit "A" "Scope of Services" shall be completed pursuant to
the schedule specified in Exhibit "A." Should the scope of services not be completed pursuant to
that schedule, the Consultant shall be deemed to be in Default of this Agreement pursuant to
Section 21 of this Agreement. The City, in its sole discretion, may choose not to enforce the
Default provisions of this Agreement and may instead allow Consultant to continue perfonning
the scope of services until such services are complete.
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SECTION2. SCOPE OF SERVICES.
Consultant agrees to perform the services set forth in Exhibit "A" "Scope of Services"
and made a part of this Agreement.
SECTION3. ADDlTIONAL SERVICES.
Consultant shall not be compensated for any services rendered in connection with its
performance of this Agreement which are in addition to or outside of those set forth in this
Agreement or listed in Exhibit "A" "Scope of Services," unless such additional services are
authorized in advance and in writing by the City Council or City Manager of City. Consultant
shall be compensated for any such additional services in the amounts and in the manner agreed to
by the City Council or City Manager.
SECTION 4. COMPENSATION AND METHOD OF PAYMENT.
(a) Subject to any limitations set forth in this Agreement, City agrees to pay
Consultant the amounts specified in Exhibit "B" "Compensation" and made a part of this
Agreement. The total compensation shall not exceed Forty Five Thousand dollars ($45,000) for
the fiscal year 2010-2011 audit, exclusive or reimbursement for actual expenses, unless
additional compensation is approved in v.'riting by the City Council or City Manager.
(b) Each month Consultant shall furnish to City an original invoice for all work
performed and expenses incurred during the preceding month. The invoice shall detail charges
by the following categories: labor (by sub-category), travel, materials, equipment, supplies, and
sub-consult<Jnt contracts. Sub-consultant charges shall be detailed by the following categories:
labor, travel, materials, equipment and supplies. City shall independently review each invoice
submitted by the Consultant to determine whether the work performed and expenses incurred are
in compliance with the provisions of this Agreement In the event that no charges or expenses
are disputed, the invoice shall be approved and paid according to the terms set forth in subsection
(c). In the event any charges or expenses are disputed by City, the original invoice shall be
returned by City to Consultant for correction and resubmission.
(c) Except as to any charges for work performed or expenses incurred by Consultant
which are disputed by City, City will use its best efforts to cause Consultant to be paid within
forty-five (45) days of receipt of Consultant's correct and undisputed invoice,
(d) Payment to Consultant for work performed pursuant to this Agreement shall not
be deemed to waive any defects in work performed by Consultant
SECTIONS, ENGAGEMENT LETTER
The standard engagement letter which contains the audit objectives, management
responsibilities, audit procedures and audit administration is attached as Exhibit D to this
contract. In the event of any inconsistency between Scope of Services and Engagement Letter,
Scope of Services shall have priority.
RIV ;.1BJB-6958-J&80 vI -2-
SECTION 6. INSPECTION AND FINAL ACCEPTANCE.
City may inspect and accept or reject any of Consultant's work under this Agreement,
either during performance or when completed. City shall reject or finally accept Consultant's
work within sixty (60) days after submitted to City. City shall reject work by a timely written
explanation. otherwise Consultant's work shall be deemed to have been accepted, City's
acceptance shall be conclusive as to such work except with respect to latent defects, fraud and
such gross mistakes as amount to fraud. Acceptance of any of Consultant's work by City shall
not constitute a waiver of any of the provisions of this Agreement including, but not limited to,
sections 16 and 17, pertaining to indemnification and insurance, respectively.
SECTlON 7. OWNERSHIP OF DOCUMENTS.
All original maps, models, designs, drawings, photographs, studies, surveys, reports, data,
notes, computer tiles, files and other documents prepared, developed or discovered by Consultant
in the course of providing any services pursuant to this Agreement shall become the sole property
of City and may be used, reused or otherwise disposed of by City without the permission of the
Consultant. Upon completion, expiration or termination of this Agreement. Consuhant shall tum
over to City all such original maps, models, designs, drawings, photographs, studies, surveys,
reports, data, notes, computer files, files and other documents.
If and to the extent that City utilizes for any purpose not related to this Agreement any
maps, models, designs, drawings, photographs, studies, surveys, r~ports, data, notes, computer
files, Illes or other documents prepared, develop~d or discovered by Consultant in the course of
providing any services pursuant to this Agreement, Consultant's guarantees and warrants related
to Standard of Performance and found in Section 9 of this Agreement shall not extend to such
use of the maps, models, designs, drawings, photographs, studies, surveys, reports, data, notes.
computer tiles, files or other documents,
SECTION 8. CONSULTANT'S BOOKS AND RECORDS.
(a) Consultant shall maintain any and all documents and records demonstrating or
relating to Consultant's performance of services pursuant to this Agreement. Consultant shall
maintain any and all ledgers, books of account, invoices, vouchers, canceled checks, or other
documents or records evidencing or relating to work, services, expenditures and disbursements
charged to City pursuant to this Agreement. Any and all snch documents or records shall be
maintained in accordance with generally accepted accounting principles and shall be sufficiently
complete and detailed so as to permit an accurate evaluation of the services provided by
Consultant pursuant to this Agreement. Any and all such documents or records shall be
maintained for three years from the date of execution of this Agreement and to the extent
required by laws relating to audits of public agencies and their expenditures.
(b) Any and all records or documents required to be maintained pursuant to this
section shall be made available for inspection, audit and copying, at any time during regular
business hours, upon request by City or its designated representative. Copies of such documents
or records shall be provided directly to the City for inspection, audit and copying when it is
RIV #4831·6958-3880 vi -3-
practical to do so; otherwise, unless an alternative is mutually agreed upon, such documents and
records shaH be made available at Consultant's address indicated for receipt of notices in this
Agreement,
(c) Where City has reason to believe that any of the documents or records required to
be maintained pursuant to this section may be lost or discarded due to dissolution or termination
of Consultant's business, City may, by written request, require that custody of such documents or
records be given to the City and that such documents and records be maintained by the requesting
party. Access to such documents and records Sholl be granted to City, as well as to its
successors-in-interest and authorized representatives.
SECTION 9. STATUS OF CONSULT ANT.
(a) Consultant is and shall at all times remain a wholly independent contractor and
not an officer. employee or agent of City. Consultant shall have no authority to bind City in any
manner, nor to incur any obligation, debt or liability of any kind on behalf of or against City,
whether by contract or otherwise, unless such authority is expressly conferred under this
AGREEMENT or is otherwise expressly conferred in writing by City.
(b) The personnel performing the services under this Agreement on behalf of
Consultant shall at all times be under Consultant's exclusive direction and control. Neither City,
nor any elected or appointed boards, officers, officials, employees or agents of City, shall have
control over the conduct of Consultant or any of Consultant's officers, employees, or agents
except as set forth in this Agreement. Consultant shall not at any time or in any manner represent
that Consultant or any of Consultant's officers, employees, or agents arc in any manner officials,
oftlcers. employees or agents of City.
(c) Neither Consultant, nor any of Consultant's ofiicers, employees or agents, shall
obtain any rights to retirement, health care or any other benefits which may otherwise accrue to
City's employees. Consultant expressly waives any claim Consultant may have to any such
rights.
SECTION 10. STANDARD OF PERFORMANCE.
Consultant represents and warrants that it has the qualifications, experience and facilities
necessary to properly perfom1 the services required under this Agreement in a thorough,
competent and professional manner. Consultant shall at all times faithfully, competently and to
the best of its ability, experience and talent, perform all services described herein. ln meeting its
obligations under this Agreement, Consultant shall employ, at a minimum, generally accepted
standards and practices utilized by persons engaged in providing services similar to those
required of Consultant under this Agreement.
If and to the extent that City utilizes for any purpose not related to this Agreement any
maps, models, designs, drawings, photographs, studies, surveys, reports. data, notes, computer
files, files or other doctuncnts prepared, developed or discovered by Consultant in the course of
providing any services pursuant to this Agreement, Consultant's guarantees and warranties
related to Standard of Performance shall not extend to such use of the maps, models, designs,
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drawings, photographs, studies, surveys, reports, data, notes, computer files, files or other
documents.
SECTION U. COMPLIANCE WITH APPLICABLE LAWS; PERMITS AND
LICENSES.
Consultant shall keep itself informed of and comply with all applicable federal, state and
local laws. statutes, codes, ordinances, regulations and rules in effect during the term of this
Agreement. Consultant shall obtain any and all licenses, permits and authorizations necessary to
perform the services set forth in this Agreement. Neither City, nor any elected or appointed
boards, ot1icers, officials, employees or agents of City, shall be liable, at Jaw or in equity, as a
result of any failure of Consultant to comply with this section.
SECTION 12. PREY AILING WAGE LAWS
It is the understanding of City and Consultant that California prevailing wage laws do not
apply to this Agreement because the Agreement does not involve any of the following services
subject to prevailing wage rates pursuant to the California Labor Code or regulations
promulgated thereunder: Construction. alteration, demolition, installation, or repair work
performed on public buildings, facilities, streets or sewers done under contract and paid for in
whole or in part out of public funds. In this context, ·•construction" includes work performed
during the design and prcconstruction phases of construction including, but not limited to,
inspection and land surveying work.
SECTION 13. NONDISCRIMINATION.
Consultant shall not discriminate, in any way, against any person on the basis of race,
color, religious creed, national origin, ancestry, sex, age, physical handicap, medical condition or
marital status in connection with or related to the performance of this Agreement.
SECTION 14. UNAUTHORIZED ALIENS.
Consultant hereby promises and agrees to comply with all of the provisions of the Federal
Immigration and Nationality Act, 8 U.S.C.A. §§ 1101, et g:g., as amended, and in connection
therewith, shall not employ unauthorized aliens as detlned therein. Should Consultant so employ
such unauthorized aliens for the performance ol' work and/or services covered by this Agreement,
and should the any liability or sanctions be imposed against City for such use of unauthorized
aliens, Consultant hereby agrees to and shall reimburse City for the cost of all such liabilities or
sanctions imposed, together with any and all costs, including attorneys' fees, incurred by City.
SECTION 15. CONFLICTS OF INTEREST.
(a) Consullant covenants that neither it, nor any officer or principal of its firm, has or
shall acquire any interest, directly or indirectly, which would conflict in any murmer with the
interests of City or which would in any way hinder Cons~ltant's performance of services under
this Agreement. Cons~ltant further covenants that in the performance of this Agreement, no
person having any such interest shall be employed by it as an officer, employee, agent or
subcontractor without the express written consent of the City Manager. Consultant agrees to at all
RIV !·1SJ8-6Y58-.1~80 vi -5 -
times avoid conflicts of interest or the appearance of any conllicts of interest with the interests of
City in the performance of this Agreement.
(b) City understands and acknowledges that Consultant is. as of the date of execution
of this Agreement, independently involved in the perfom1ance of non-related services for other
governmental agencies and private parties. Consultant is unaware of any stated position of City
relative to such projects. Any future position of City on such projects shall not be considered a
conflict of interest for purposes of this section.
(c) City understands and acknowledges that Consultant will, perform non-related
services for other governmental agencies and private parties following the completion of the
scope of work under this Agreement. Any such future service shall not be considered a contlict
of interest for purposes of this section.
SECTION 16. CONFIDENTIAL INFORMATION; RELEASE OF INFORMATION.
(a) All infommtion gained or work product produced by Consultant in performance of
this Agreement shall be considered confidential, unless such information is in the public domain
or already known to Consultant. Consultant shall not release or disclose any such information or
work product to persons or entities other than City without prior written authorization from the
City Manager, except as may be required by law.
(b) Consultant, its officers, employees, agents or subcontractors, shall not, without
prior written authorization !rom the City Manager or unless requested by the City Attomey of
City, vollmtarily provide declarations, letters of support, testimony at depositions, response to
interrogatories or other information concerning the work perfonned under this Agreement.
Response to a subpoena or court order shall not be considered "voluntary" provided Consultant
gives City notice of such court order or subpoena.
(c) If Consultant, or any officer, employee, agent or subcontractor of Consultant,
provides any information or work product in violation of this Agreement, then City shaJl have the
right to reimbursement and indemnity from Consultant for any damages, costs and fees,
including attorneys fees, caused by or incurred as a result of Consultant's conduct.
(d) Consullant shall promptly notify City should Consultant , its officers, employees,
agtonts or subcontractors be served with any summons, complaint. subpoena, notice of deposition,
request for documents, interrogatories, request for admissions or other discovery request, court
order m subpoena from any party regarding this Agreement and the work performed thereunder.
City retains the right, but has no obligation, to represent Consultant or be present at any
deposition, hearing or similar proceeding. Consultant agrees to cooperate fully with City and to
provide City with the opportunity to review any response to discovery requests provided by
Consultant. However, this right to review any such response docs not imply or mean the right by
City to control, direct or rewrite said response.
SECTION 17, INDEMNIFICATION,
(a) Indemnification for Professional Liabilitv. Where the law establishes a
professional standard or care for Consultant's Services, to the fullest extent permitted by law,
ftlV IH838-6'i.'iij-)8l!U vl -6-
Consultant shall indenmicy, protect, defend and hold harmless City and any and all of its
officials, employees and agents ("'ndemnified Parties") from and against any and all losses,
liabilities, damages, costs and expenses, including attorney's fees and costs to the extent same are
caused in whole or in part by any negligent or wrongful act, error or omission of Consultant, its
officers, agents, employees or sub-consultants (or any entity or individual that Consultant shall
bear the legal liability thereof) in the performance of professional services under this Agreement.
(b) ln~emnification for Otbcr than Professional Liability, Other than in the
performance of professional services and to the full extent permitted by law, Consultant shall
indemnify. protect, defend and hold harmless City, and any and all of its employees, officials and
agents from and against any liability (including liability for claims, suits, actions, arbitration
proceedings, administrative proceedings, regulatory proceedings, losses, expenses or costs of any
kind, whether actual, alleged or threatened, including attorneys fees and costs, court costs,
interest, defense costs, and expert witness fees), where the same arise out of, are a consequence
of, or are in any way attributable to, in whole or in part, the performance of this Agreement by
Consultant or by any individual or entity for which Consultant is legally liable, including but not
limited to officers, agents, employees or sub-contractors of Consultant.
(c) General Indemnification Provisions. Consultant agrees to obtain executed
ir>demnity Agreements with provisions identical to those set forth here in this section tram each
and every sub-contractor or any other person or entity involved by, for, with or on behalf of
Consultant in the performllllce of this Agreement. In the event Consultant fails to obtain such
indemnity obligations from others as required here, Consultant agrees to be fully responsible
according to the terms of this section, Failure of City to monitor compliance with these
requirements imposes no additional obligations on City and will in no way act as a waiver of any
rights hereunder. This obligation to indemnify and defend City as set forth here is binding on the
successors, assigns or heirs or Consultant and shall survive the termination of this Agreement or
this section.
(d) Limitation of Indemnification, Notwithstanding any provision of this Section 16
[Indemnification] to the contrary, design professionals are required to defend and indemnify the
City only to the extent permilled by Civil Code Section 2782.8, which limits the liability of a
design professional to claims, suits, actions, arbitration proceedings, administrative proceedings,
regulatory proceedings, losses, expenses or costs that arise out of, pertain to, or relate to the
negligence, recklessness, or willful misconduct of the design professionaL The term "design
professional," as defined in Section 2782.8, is limited to licensed architects, licensed landscape
architects, registered professional engineers, professional lund surveyors, and the business
entities that offer such services in accordance with the applicable provisions of the California
Business and Professions Code,
(e) The provisions of this section do not apply to claims occurring as a result of City's
sole negligence. The provisions of tbis section shall not release City from liability arising from
gross negligence or willful acts or omissions of City or any and all of its officials, employees and
agents.
SE:CTION 18. INSURANCE.
RIV 04838-69l8·)880 vi
Consultant agrees lo obtain and maintain in full force and effect during the term of this
Agreement the insurance policies set forth in Exhibit "C" "Insurance" and made a part of this
Agreement. All insurance policies shall be subject to approval by City as to fonn and content.
These requirements are subject to amendment or waiver if so approved in writing by the City
Manager. Consultant agrees to provide City with copies ofrequired policies upon request.
SECTION 19. ASSIGNMENT.
The expertise and experience of Consultant are material considerations for this
Agreement. City has an interest in the qualifications of and capability of the persons and entities
who will fulfill the duties and obligations imposed upon Consultant under this Agreement. In
recognition of that interest, Consultant shall not assign or transfer this Agreement or any portion
of this Agreement or the performance of any of Consultant's duties or obligations under this
Agreement without the prior written consent of the City Council. Any attempted assignment
shall be inefTective, null and void, and shall constitute a material breach of this Agreement
entitling City to any and all remedies at law or in equity, including summa!)' tennination of this
Agreement. City acknowledges, however, that Consultant, in the performance of its duties
pursuant to this Agreement, may utili4e subcontractors.
SECTION 20, CONTINUITY OF PERSONNEL.
Consultant shall make every reasonable effort to maintain the stability and continuity of
Consultant's staff and subcontractors. if any, assigned to perform the services required under this
Agreement. Consultant shall notifY City of any changes in Consultant's staff and subcontractors,
if any, assigned to perform the services required under this Agreement, prior to and during any
such performance.
SECTION 21. TERMINATION OF AGREEMENT.
(a) City may terminate this Agreement, with or \\1thout cause, at any time by giving
thirty (30) days written notice of termination to Consultant. In the event such notice is given,
Consultant shall cease immediately all work in progress.
(b) Consultant may terminate this Agreement for cause at any lime upon thirty (30)
days INritten notice oftcm1ination to City.
(c) If either Consultant or City fail to perform any material obligation under this
Agreement, then, in addition to any other remedies, either Consultant, or City may tenninatc this
Agreement immediately upon written notice.
(d) Upon termination of this Agreement by either Consultant or City, all property
belonging exclusively to City which is in Consultant's possession shall be returned to City.
Consultant shall furnish to City a final invoice for work performed and expenses incurred by
Consultant, prepared as set forth in Section 4 of this Agreement. This final invoice shall be
reviewed and paid in the same manner as set forth in Section 4 of this Agreement.
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SECTION 22. DEFAULT.
In the event that Consultant is in default under the terms of this Agreement. the City silall
not have any obligation or duty to continue compensating Consultant for any work performed
after the date of default. Instead, the City may give notice to Consultant of the default and the
reasons for the default. The notice shall include the timeframe in which Consultant may cure the
default. This timeframe is presumptively thirty (30) days, but may be extended, though not
reduced, if circumstances warrant. During the period of time that Consultant is in default, the
City shaJI hold all invoices and shall, when the default is cured, proceed with payment on the
invoices. ln the alternative, the City may, in its sole discretion, elect to pay some or all of the
outstanding invoices during the period of default. If Consultant does not cure the default, the
City may take necessary steps to terminate this Agreement under Section 20. Any failure on the
part of the City to give notice of the Consultant's default shall not be deemed to result in a waiver
of the City's legal rights or any rights arising out of any provision of this Agreement.
SECTION 23. EXCUSABLE DELAYS.
Consultant shall not be liable for damages, including liquidated damages, if any, caused
by delay in performance or failure to perform due to causes beyond the control of Consultant.
Such causes include, but are not limited to, acts of God, acts of the public enemy, acts offederal,
state or local governments, acts of City, court orders, fires, floods, epidemics, strikes, embargoes,
and unusually severe weather. The term and price of this Agreement shall be equitably adjusted
for any delays due to such causes.
SECTION24. COOPERATION BY CITY,
All public information, data, reports, records, and maps as are existing and available to
City as public records, and which are necessary for carrying out the work as outlined in the
Exhibit ·'A" "Scope of Services," shall be furnished to Consultant in every reasonable way to
facilitate, without undue delay, the work to be performed under this Agreement.
SECTION25. NOTICES.
All notices required or permitted to be given under this Agreement shall be in miting and
shall be personally dellvered, or sent by telecopier or certi!ied mail, postage prepaid and return
receipt requested, addressed as follows:
To City:
To Consultant:
RIV n48J!-69l6-J8RO vi
City of Temple City
Attn: City Manager
9701 Las Tunas Dr.
Temple City, CA 91780
Gilbert Vasquez
Vasquez & co. LLP
801 S. Grand Avenue Suite 400
Los Angeles, CA 90017
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Notice shall be deemed effective on the date personally delivered or transmitted by
facsimile or, if mailed, three (3) days after deposit of the same in the custody of the United States
Posta! Service.
SECTION 26. AUTHORITY TO EXECUTE.
The person or persons executing this Agreement on behalf of Consultant represents and
warrants that he/she/they has/have the authority to so execute this Agreement and to bind
Consultant to the performance of its obligations hereunder.
SECTION 27. ADMINISTRATION AND IMPLEMENTATION.
This Agreement shall be administered and executed by the City Manager or his or her
designated representative, following approval of this Agreement by the City Council. The City
Manager shall have the authority to issue interpretations and to make minor amendments to this
Agreement on behalf of the City so long as such actions do not materially change the Agreement
or make a commitment of additional funds of the City. All other changes, modifications, and
amendments shall require the prior approval of the City Council.
SECTION 28. BINDING EFFECT,
This Agreement shall be binding upon the heirs, executors, administrators, successors and
assigns of the parties.
SECTION29. MODIFICATION OF AGREEMENT.
No amendment to or moditication or this Agreement shall be valid unless made in writing
and approved by the Consultant and by the City Council. The parties agree that this requirement
for written modifications cannot be waived and that any attempted waiver shall be void.
SECTrON30. WAIVER.
Waiver by any party to this Agreement of any term, condition, or covenant of this
Agreement shall not constitute a waiver of any other term, condition, or covenant. Waiver by
any party or any breach of the provisions of this Agreement shall not constitute a waiver of any
other provision nor a waiver of any subsequent breach or violation of any provision of this
Agreement. Acceptance by City of any work or services by Consultant shall not constitute a
waiver of any of the provisions of this Agreement.
SECTION 31. LAW TO GOVERN; VENUE.
This Agreement shall be interpreted, construed and governed according to the laws of the
State of California. In the event of litigation between the parties, venue in state trial courts shall
lie exclusively in the County of Los Angeles, California. In the event of litigation in a U.S.
District Court, venue shall lie exclusively in the Central District of California, in Los Angeles.
SECTION 32. ATTORNEYS FEES, COSTS AND EXPENSES,
-I 0-
In the event litigation or other proceeding is required to enforce or interpret any provision
ofthis Agreement, the prevailing party in such litigation or other proceeding shall be entitled to
an award of reasonable attorney's fees, costs and expenses, in addition to any other relief to
which it may be entitled.
SECTION 33. ENTIRE AGREEMENT.
This Agreement, including the attached Exhibits "A" through "D", is the entire, complete,
linal and exclusive expression of the parties with respect to the matters addressed therein and
supersedes all other Agreements or understandings, whether oral or written, or entered into
between Consultant and City prior to the execution of this Agreement. No statements,
representations or other Agreements, whether oral or written, made by any party which arc not
embodied herein shall be valid and binding. No amendment to this Agreement shall be valid and
binding unless in writing duly executed by the parties or their authorized representatives.
SECTION 34. SEVERABILITY.
If any term, condition or covenant of this Agreement is declared or determined by any
court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions at·
this Agreement shall not be affected thereby and the Agreement shall be read and construed
without the invalid, void or unenforceable provision(s).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
and year first-above writlen.
ATTEST:
ffiJJ=-~R iad~
Mary Flan 1ck
City Clerk
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CITY OF TEMPLE CITY
By: ___ .
Jose E.
City Manager
-11 -
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EXIDBIT II A"
SCOPE OF SERVICES
l. Consultant shall provide all services necessary to accomplish the tasks listed below for
the Fiscal years 20 I 0-11, 2011-12 and 2012-13 fiscal years with option to renew for
additional two (2) years.
(i) City of Temple Ci,!Y. Consultant will audit of all funds of the City of Temple
City and prepare the City's Comprehensive Annual Financial Report (CAFR). The
CAFR will be in full compliance with GASB 34. The audit fim1 will render the
report on the basic financial statements, which will include both Government-
Wide Financial Statements, and Fund Financial Statements. Consultant will also
apply limited audit procedures to Management's Discussion and Analysis
(MD&A) and required supplementary information pertaining lo the General Fund
and each major fund of the City.
(ii) Temple City Redevelopment Agency. Consultant will conduct a flnancial and
compliance audit of the Temple City Redevelopment Agency. The compliance
audit shall include the provisions of laws and regulations identified in the
Guidelines for Compliance Audits of California Redevelopment Agencies, issued
by the State Controller. The audit shall include a GASB 34 compliant component
unit finru1cial statement.
(iii) Federal Grants, Consultant will perform a single audit of the expenditures of
federal grants in accordance with OMB Circular A-133 and render the appropriate
audit reports on Internal Control over Financial Reporting based upon the audit of
the City's financial statements in accordance with Governmenl Audiling
Standards and the appropriate reports on compliance with Requirements
Applicable to each Major Program, Internal Control over Compliance and on the
Schedule of Expenditures of Federal Awards in Accordance with OMB Circular
A-133. The single audit report will include appropriate schedule of expenditures
of federal awards, footnotes, findings and questioned costs, including reportable
conditions and material weaknesses, and follow up on prior audit findings where
required.
(iv) Gann Limit. Consultant shall perform agreed-upon procedures pertaining to the
City's GANN Limit (Appropriations Limit) and prepare a letter regarding the
City's compliance with the GANN Limit.
( v) Management Letter. Consultant shall issue a separate "management letter" that
includes recommendations for improvements in internal control, accounting
procedures and other signiticanl observations that are considered to be non-
RIV d4!38·695!-J!80 'I
A-l
6876 vl
reportable conditions. Management letters shall be addressed to the City
Manager.
(vi) Controller's Reports. Consultant shall prepare the Annual State Controller's
Reports for the City of Temple City, the Temple City Redevelopment Agency and
the Temple City Financing Authority. Consultant will also prepare the Annual
Street report.
(vii) Irregularities and Illegal Acts. Consultant will make an immediate, written
report of all irregularities and illegal acts or indications of illegal acts of which
they become aware to the following parties: City Manager; City Attorney; and the
Director of Finance.
H. As part of the Services, Consultant will prepare and deliver the following tangible work
products to the City:
1. Report on the CAFR-December 31. 20 II
ii. Report on the RDA financial statements December 31, 2011
iii. Single audit Report-March 31, 2012
iv. Management Letter Comment-March 31, 2012
v. Agreed-upon Procedures Report on GANN Limit Calculation -December 31,
2011
vi. State Controller's Reports --deadline set by the State
vii. Street Gas Tax Report-deadline set by the State
viii. RDA Statement of Indebtedness September 30, 2011
III. During performance of the Services, Consultant will keep the City appraised of the
status of performance by delivering the following status reports:
1. Audit Status Report
IV, The tangible work products and status reports will be delivered to the City pursuant to
the following schedule;
See above.
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A-2
V. Consultant will utilize the following pcrstmncl to accomplish the Services:
Refer to the proposal.
VI. Consultant will utilize the following subcontractors to accomplish tt.c Services:
Not applicable
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A-3
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VII. AMENDMENT
The Scope of Services, including services, work products. and personnel, are subject to
change by mutual Agreement. In lhe absence of mutual Agreement regarding Ire need to change
any aspects of performance, Consultant shall comply with the Scope of Services as indicated
above.
RIV !H&3B"6958-J880 vi
A-4
EXHIBIT "C"
lNSURANCE
A. I nsurancc Requirements. Consultant shall provide and maintain insurance,
acceptable to the City Manager or City Counsel, in full force and effect throughout the tenn of
this Agreement, against claims for injuries to persons or damages to property which may arise
from or in connection with the performance or the work hereunder by Consultant, its agents,
representatives or employees. Insurance is to be placed with insurers with a current A.M. Best's
rating of no less than A: VII. Consultant shall provide the following scope and limits of
msurance:
1. Minimum Scope oflnsurancc. Coverage shall be at least as broad as:
( J) Insurance Services Office form Commercial General Liability
coverage (Occurrence Form CG 0001 ).
(2) Insurance Services Office form number CA 000 I (Ed. 1/87)
covering Automobile Liability, including code 1 "any auto" and endorsement CA 0025, or
equivalent forms subject to the written approval of the City.
(3) Workers' Compensation insurance as required by the Labor Code
of State of California and Employer's Liability insurance and covering all persons providing
services on behalf of the Consultant and all risks to such persons under this Agreement.
(4) Professional liability insurance appropriate to the Consultant's
profession. This coverage may be written on a "claims made" basis, and must include coverage
lor contractual liability. The professional liability insurance required by this Agreement must be
endorsed to be applicable to claims based upon, arising out of or related to services performed
und(!r this Agreement. The insurance must be maintained for at least 3 consecutive years
following the completion of Consultant's services or the termination of this Agreement. During
this additional 3-year period, Consultant shall annually and upon request of the City submit
written evidence of this continuous coverage.
2. Minimum Limits of [nsurance. Consultant shall maintain limits of
insurance no less than:
(1) General Liability: $1,000,000 general aggregate for bodily injury,
personal injury and property damage.
(2) Automobile Liability: $! ,000,000 per accident for bodily injury
und property damage. A combined single limit policy with aggregate limits in an amount of not
less than $2,000,000 shall be considered equivalent Lo the said required minimum limits set forth
above.
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C-1
(3) Workers' Compensation and Employer's Liability: Workers'
Compensation as required by the Labor Code of the State of California and Employers Liability
limits of not less than $!,000,000 per accident.
(4) Professional Liability: $1,000,000 per occurrence.
B. Other Provisions. lnsunmce policies required by this Agreement shall contain the
following provisions:
I. All Policies. Each insurance policy required by this Agreement shall be
endorsed and state the coverage shall not be suspended, voided, cancelled by the insurer or either
party to this Agreement, reduced in coverage or in limits except after 30 days' prior written notice
by Ccrlitled mail, return receipt requested, has been given to City.
2. General Liability and Automobile Liability Coverages.
( 1) City, and its respective elected and appointed officers, officials,
and employees and volunteers are to be covered as additional insureds us respects: liability
arising out of activities Consultant performs; products and completed operations of Consultant:
premises 01-1~1ed, occupied or used by Consultant ; or automobiles owned, leased. hired or
borrowed by Consultant. The coverage shall contain no special limitations on the scope of
protection afforded lO City, and their respective elected and appointed ot1iccrs, officials, or
employees.
(2) Consultant's insurance coverage shall be primary insurance with
respect to City, and its respective elected and appointed, its ofticers, officials, employees and
volunteers. Any insurance or self insurance maintained by City, and its respective elected and
appointed officers, officials, employees or volunteers, shall apply in excess of, and not contribute
with, Consultant's insurance.
(3) Consultant's insurance shall apply separately lo each insured
against whom claim is made or suit is brought, except with respect to the limits of the insurer's
liability.
( 4) Any failure to comply with the reporting or other provisions of the
policies including breaches of warranties shall not affect coverage provided to City, and its
respective elected and appointed officers, officials, employees or volunteers.
3. Workers' Compensation and Employer's Liabilitv Coverage. Unless the
City Manager otherwise agrees in writing, the insurer shall agree to waive all rights of
subrogation against City, and its respective elected and appointed ofticers, oflicials, employees
and agents for losses arising from work performed by Consultant.
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C-2
"EXHIBIT D"
July 21,2011
To the Honorable mem~M!rs of City Council
City of Temple City
9701 Las Tunas Or.
Temple City, CA 91780
We are pleased to confirm our understanding of the services we are to provide City of Temple
City (City) for the year ending June 30, 2011 We will audit the City's basic financial statements
as of and for \he year ending June 30, 2011 Accounting standards generally accepted in the
United States provide for certain required supplementary information (RSI), such as
Management's Discussion and Analysis (MD&A), to accompany the City's basic financial
statements. Such Information, although not a part of the basic financial statements, is required by
the Governmental Accounting Standards Board who considers it to be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. As part of our engagement, we will apply certain limited
procedures to the City's RSI In accordance with auditing standards generally accepted in the
United States of America. These limited procedures will consist of inquiries of management
regarding the methods of preparing the Information and comparing the information for
consistency with manogement's responses to our inquiries, the basic financial statements, and
other knowledge we obtained during our audit of the basic financial statements. We will not
express an opinion or provide any assurance on the information because the limited procedures
do not provide us w1th sufficienl evidence to express an opinion or provide any assurance. The
following RSI is required by generally accepted accounting principles and will be subjected to
certain limited procedures, but will not be audited:
1) Management's Dlscussio n and Analysis (MD&A)
2) Budgetary Comparison Schedules
3) Required Supplementary Information
4) Statistical Seclion
Supplementary information other than RSI also accompanies the City's basic financial
statements. We will subject the following supplementary information to the auditing procedures
applied In our audit of the basic financial statements and certain additional procedures, Including
comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the financial statements or to the financial statements themselves, and
other additional procedures in accordance with auditing standards generally accepted In the
United States of America and will provide an opinion on it in relation to the basic financial
statements:
1) Schedule of Expenditures of Federal Awards
2) Statement of Agency Funds
3) Combining nonmajor fund financial statements
The following additional Information accompanying the basic financial statements will not be
subjected to the auditing procedures applied in our audit of the financial statements, and for
which our auditor's report will not provide an opinion or any assurance.
1) Schedule of Funding Progress for PERS and OPEB
City ol Temple City
July 21, 2011
Page2
Audit Objectives
The objective of our audit is the expression of opinions as to whether your basic financial
statements are fairly presented, in atl material respects, in conformity with U.S. generally
accepted accounting principles and to report on the fairness of the additional information referred
to in the second paragraph when considered in relation to the basic financial statements taken as
a whole. The objective also Includes reporting on:
• Internal control related to the financial statements and compliance with the provisions of
applicable laws, regulations, contracts, agreements, and grants. noncompliance with
which could have a material effect on the financial statements in accordance with
Government Auditing Standards.
• Internal control related to major programs and an opinion {or disclaimer of opinion) on
compliance with laws, regulations, and the provisions of contracts or grant agreements
that could have a direct and material effect on each major program in accordance with
the Single Audit Act Amendments of 1996 and OMS Circular A-133, Audits of States,
Local Governments, and Non-Profit Organizations.
The reports on internal control and compliance will each include a statement that the report is
intended solely for the infomnation and use of the audit committee, management, specific
legislative or regulatory bodies, federal awarding agencies, and if applicable, pass-through
entities and is not intended to be and should not be used by anyone other than these specified
parties.
Our audit will be conducted in accordance with U.S. generally accepted auditing standards; the
standards for Financial audits contained In Government Auditing Standards, issued by the
Comptroller General of the United States; the Single Audit Act Amendments of 1996; and the
provisions of OMB Circular A-133, and will include tests of accounting records, a determination of
major program(s) in accordance with Circular A-133, and other procedures we consider
necessary to enable us to express such opinions and to render the required reports. If our
opinions on the financial statements or the Single Audit compliance opinions are other than
unqualified, we will fully discuss the reasons with you In advance. If, lor any reason, we are
unable to complete the audit or are unable to form or have not formed opinions, we may decline
to express opinions or to issue a report as a result of this engagement.
Management Responsibilities
Management is responsible for the basic financial statements and all accompanying information
as well as all representations contained therein. Management is also responsible for identifying
government award programs and understanding and ccmplying with the compliance
requirements, and for preparation of the schedule of expenditures of federal awards in
accordance with the requirements of OMB Circular A-133. As part of the audit, we wilt assist with
preparation of your financial statements, schedule of expenditures of federal awards, and related
notes. You are_responsible for making all management decisions and performing all management
functions relating to the Hnancial statements, schedule of expenditures of federal awards, and
related notes and for accepting full responsibility for such decisions. You will be required to
acknowledge in the management representation letter our assistance with the preparation of the
financial statements and the schedule of expenditures of federal awards and that you have
reviewed and approved the financial statements, schedule of expenditures of federal awards, and
related notes prior to their issuance and have accepted responsibility for them. Further, you are
required to designate a management-l~y_gjjndividual with suitable skill, knowledge or experience
to oversee the bookkeeping, tax services and anv other nonattest servjces we provide· and for
evaluating the adequacy and results of those services and accepUng responsibility for them.
City of Temple City
July 21, 2011
Page 3
Management is responsible for establishing and maintaining effective internal controls, including
internal controls over compliance, and for evaluating and monitoring ongoing activities, to help
ensure that appropriate goals and objectives are met and that \here is reasonable assurance that
government programs are administered In compliance with compliance requirements. You are
also responsible for the selection and application of accounting principles; for the fair presentation
in the financial statements of the respective financial position of the governmental activities, the
business-type activities, the aggregate discretely presented component units, each major lund,
and the aggregate remaining fund information of the City and the respective changes in financial
position and, where applicable, cash ftows in conformity with U.S. generally accepted accounting
principles; and for compliance with applicable laws and regulations and the provisions of
contracts and grant agreements. Management is also responsible for making all financial records
and related Information available to us and for ensuring that management and financial
information is reliable and properly recorded. Your responsibilities also include identifying
signlncant vendor relationships in which the vendor has responsibility for program compliance
and for the accuracy and completeness of that information. Your responsibilities include adjusting
the financial statements to correct material misstatements and confirming to us in the
representation letter that the effects of any uncorrected misstatements aggregated by us during
the current engagement and pertaining to the latest period presented are immaterial, both
individually and in the aggregate, to the financial statements taken as a whole.
You are responsible for the design and Implementation of programs and controls to prevent and
detect fraud, and tor informing us about all known or suspected fraud or illegal acts affecting the
government involving (1) management, (2) employees who have significant roles in internal
control, and (3) others where the fraud or illegal acts could have a material effect on the financial
statements. Your responsibilities include informing us of your knowledge of any allegations of
fraud or suspected fraud affecting the government received in communications from employees,
former employees, grantors, regulators, or others. In addition, you are responsible for identifying
and ensuring \hat the entity complies with applicable laws, regulations, contracts, agreements,
and grants. Additionally, as required by OM8 Circular A-133, it is management's responsibilily to
follow up and take corrective action on reported audit findings and to prepare a summary
schedule of prior audit findings and a corrective action plan. The summary schedule of prior audit
findings should be available for our review, You are responsible for the preparation of the
supplementary information in conformity with U.S. generally accepted accounting principles. You
agree to include our report on the supplementary information in any document that contains and
Indicates that we have reported on the supplementary information. You also agree to present the
supplementary information with the audited financial statements or ma~e the audited financial
statements readily available to users of the supplementary information no later than lhe date the
supplementary information is issued with our report thereon.
Management is responsible for establishing and maintaining a process for tracking the status of
audit findings and recommendations. Management is also responsible for identifying for us
previous financial audits, attestation engagements, performance audits or other studies related to
the objectives discussed in the Audit Objeclives section of this letler. This responsibility includes
relaying to us corrective actions taken to address significant findings and recommendations
resulting from those audits, attestation engagements, performance audits or other studies. You
are also responsible for providing managemenrs views on our current findings, conclusions, and
recommendations, as well as your planned corrective actions, for the report, and for the timing
and format for providing that information.
With regard to the electronic dissemination of audited financial statements, including financial
statements published electronically on your website, you understand that electronic sites are a
means to distribute information and, therefore, we are not required to read the information
contained in these sites or to consider the consistency of other information in the electronic site
with the original document.
City orTemple City
July 21,2011
Page 4
Audit Procedures-General
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements; therefore, our audit will involve judgment about the number of
transactions to be examined and the areas to be tested. We will plan and perform the audit to
obtain reasonable rather than absolute assurance about whether the financial statements are free
of material misstatement, whether from (1} errors, (2} fraudulent financial reporting, (3}
misappropriation of assets, or (4) violations of laws or governmental regulations that are
attributable to the entity or to acts by management or employees acting on behalf of the entity.
Because lhe determination of abuse is subjective, Government Auditing Standards do not expect
auditors to provide reasonable assurance of detecting abuse.
Because an audit Is designed to provide reasonable, but not absolute assurance and because we
will not perform a detailed examination of all transactions, there Is a risk that material
misstatements or noncompliance may exist and not be detected by us. In addition, an audit is not
designed to detect immaterial misstatements or violations of laws or governmental regulations
that do not have a direct and material effect on the financial statements or major programs.
However, we will infonm you of any material errors and any fraudulent financial reporting or
misappropriation of assets that come to our attention. We will also inform you of any violat"tons of
laws or governmental regulations that come to our attention, unless clearly Inconsequential, and
of any material abuse that comes to our attention. We will include such matters in the reports
required for a Single Audit. Our responsibility as auditors is limited to the period covered by our
audit and does not extend to any later periods for which we are not engaged as auditors.
Our procedures wiil include tests of documentary evidence supporting the transactions recorded
in the accounts, and may include tests of the physical existence of inventories, and direct
confirmation of receivables and certain other assets and liabilities by correspondence with
selected individuals, creditors, funding sources, and financial institutions. We will request written
representations from your attorneys as part of the engagement, and they may bill you for
responding to this Inquiry. At the conclusion of our audit, we will also require certain written
representations from you about the financial statements and related matters.
Audit Procedures-Internal Controls
Our audit will include obtaining an understanding of the entity and its environment, including
internal controls, sufficient to assess the risks of material misstatement of the financial statements
and to design the nature, timing, and extent of further audit procedures. Tests of controls may be
performed to test the effectiveness of certain controls that we consider relevant to preventing and
detecting errors and fraud that are material to the financial statements and to preventing and
deJecting misstatements resulting from illegal acts and other noncompliance matters that have a
direct and material effecl on the financial statements. Our tests, If performed, will be less In scope
than would be necessary to render an opinion on internal controls and, accordingly, no opinion
will be expressed in our report on internal controls issued pursuant to Government Audifing
Standards.
As required by OMB Circular A-133, we will perform tests of controls over compliance to evaluate
the effectiveness of the design and operation of controls that we consider relevant to preventing
or detecting material noncompliance with compliance requirements applicable to each major
federal award program. However, our tests will be Jess In scope than would be necessary to
render an opinion on those controls and, accordingly, no opinion will be expressed in our report
on inlernal controls issued pursuant to OMB Circular A-133.
An audit is not designed to provide assurance on internal controls or to identify significant
deficiencies. However, during the audit, we will communicate to management and those charged
with governance internal control related matters that are required to be communicated under
professional standards, Government Auditing Standards, and OMB Circular A-133.
Cily of Temple City
July 21, 2011
Page 5
Audit Procedures-Compliance
As part of obtaining reasonable assurance about whether the financial statements are free of
material misstatement, we will perform tests of the City's compliance with applicable laws and
regulations and the provisions of contracts and agreements, including grant agreements.
However, the objective of those procedures will not be to provide an opinion on overall
compliance and we will not express such an opinion in our report on compliance Issued pursuant
to Government Auditing Standards.
OMB Circular A-133 requires that we also plan and perform the audit to obtain reasonable
assurance about whether the auditee has complied with applicable laws and regulations and the
provisions of contracts and grant agreements applicable to major programs. Our procedures will
consist of tests of transactions and other applicable procedures described in the OMB Circular A-
133 Compliance Supplement for the types of compliance requirements that could have a direct
and material effect on each of the City's major pmgrams. The purpose of those procedures will be
to express an opinion on the City's compliance with requirements applicable to each of its major
programs in our report on compliance Issued pursuant to OMB Circular A-133.
E-mail Communication
In connection with this engagement, we may communicate with you or others via e-mail
transmission. As a-mails may be intercepted and read, disclosed, or otherwise used or
communicated by an unintended third party, or may not be delivered to each of lhe parties to
whom they are directed and only to such parties, we cannot guarantee or warrant that e-malls
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 e-mail transmissions, or for the unauthorized use or failed
delivery of e-mails transmitted by us in connection with the performance of this engagement. In
thai regard, you agree lhat we shall have no liability for any loss or damage to any person or
entity resulting from the usa of e-mail transmissions, including any consequentiol, incidental,
direct, indirect, or special damages, such as loss of revenues or anticipated profits, or disclosure
or communication of confidential or proprietary Information.
Ownership of Audit Documentation
The audit documentation for this engagement is the property of Vasquez & Company LLP and
constitutes confidential information. However, pursuant to authority given by law or regula~on,
we may be requested to make certain audit documentation available to a Cognizant or Oversight
Agency for Audit or its designee, a federal agency providing direct or indirect funding, or the U.S,
Government Accountability Office for purposes of a quality review of the audit, to resolve audit
findings, or to carry out oversight responsibilities. We will notify you of any such request. If
requested, access to such audit documentation will be provided under the supervision of Vasquez
& Company LLP personnel. Furthermore, upon request, we may provide copies of selected audit
documentation to the aforementioned parties. These parties may intend, or decide, to distribute
the copies or Information contained therein to others, including other governmental agencies. The
audit documentation for this engagement will be retained for a minimum of seven years after lhe
report release date or for any additional period requested by the Cognizant Agency, Oversight
Agency for Audit, or Pass-through Entity. If we are aware that a federal awarding agency, Pass-
through Entity, or audilee is contesting an audit finding, we will contact the party(ies) contesting
the audit finding for guidance prior to destroying the audit documentation,
City ol Temple City
July 21. 2011
Page 6
Independence
Professional and certain r61lulatory stan~ards require us to be independent, in both fact and
appearance, with respect to your organization in the performance of our services. Any
discussions that you have with personnel of our firm regarding employment could pose a threat to
our independence. Therefore, we request that you inform us immediately prior to any such
discussions so that we can implement appropriate safeguards to maintain our independence.
Dispute Resolution Procedure
If any dispute, controversy, or claim arises out of, relates to, or results from the performance or
breach of this engagement, excluding claims for non-monetary or equitable relief (collectively, the
"Dispute"), either party may, upon written notice to the other party, request non-binding
mediation. A recipient party of such notice may waive its option to resolve such Dispute by non-
binding mediation by providing written notice to the party requesting mediation and then such
parties hereto shall resolve such Dispute by binding arbitration as described below. Such
mediation shall be assisted by a neutral mediator acceptable to both parties and shall require the
commercially reasonable efforts of the parties to discuss with each other in good faith their
respective positions and different interests to finally resolve such Dispute. If the parties are
unable to agree on a mediator within twenty (20) days from delivery of the written notice, either
party may invoke the mediation service of the American Arbitration Association (the "AAA").
Each party may disclose any facts to the other party or to the mediator that it, in good faith,
considers reasonably necessary to resolve the Dispute. However, all such disclosures shall be
deemed in furtherance of settlement efforts and shall not be admissible in any subsequent
proceeding against the disclosing party. Except as agreed to in writing by both parties, the
mediator shall keep confidential all information disclosed during mediation. The mediator shall
not act as a witness for eilher party in any subsequent proceeding between the parties.
Unless waived, such mediation shall conclude aRer the parties have engaged in good faith
settlement n61lotiations, but nonetheless are unable to resolve the Dispute through the mediation
process. The attorneys' fees and costs incurred by each party in such mediation shall be borne
solely by such party, except thai the fees and expenses of the mediator, if any, shall be borne
equally by the parties.
Any Dispute not resolved first by mediation between the parties (or if the mediation process Is
waived as provided herein) shall be decided by binding arbitration. The arbitration proceeding
shall take place in the city in which the Vasquez & Company, LLP office providing the majority of
services involved exists, unless the parties agree in writing to a different locale. The arbitration
shall be governed by the provl~ions of the laws of the state in which the arbitration is to take place
(except if there is no applicable state law providing for such arbitration, then the Federal
Arbitration Act shall apply) and the substantive law of such state shall be applied without
reference to conflicts of law rules. 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 AAA, except that the Arbitration Panel (as defined below) shall permit
discovery that is consistent with the scope of discovery typically permitted by the Federal Rules of
Civil Procedure and/or Is otherwise customary in light of the complexity of the Dispute and the
amount in controversy. Any Dispute regarding discovery, or the relevance or scope thereof, shall
be determined by the Arbitration Panel (as defined below).
City of Temple Cily
July 21, 2011
Page 7
The arbitration shall be conducted before a panel of three persons, one selected by each party,
and the third selected by the two party-selected arbitrators (the "Arbitration Panel"). The party-
selected arbitrators shall be treated as neutrals. The Arbitration Panel shall have no authority to
award non-monetary or equitable relief, but nothing herein shall be construed as a prohibition
against a party from pursuing non-monetary or equitable relief in a state or federal court. The
parties also waive the right to punitive damages and the arbitrators shall have no authority to
award such damages or any other damages that are not strictly compensatory in nature. In
rendering their award, the Arbitration Panel shall issue in writing nndings of fact and conclusions
of law. The Arbitration Panel shall not have authority to grant an award that is not supported by
substantial evidence or that is based on an error of law, and such absence of substantial
evidence or such error of law may be reviewed on appeal to vacate an award based on the
standard of review otherwise applicable in the Federal Appellate Court responsible for the
jurisdiction in which the arbitration is venued, and without regard to any heightened standard of
review otherwise applicable to an arbitration decision rendered by the AAA The confidentiality
provisions applicable to mediation shall also apply lo arbitration. The award issued by the
Arbitration Panel may be confirmed In a judgment by any federal or state court of competent
jurisdictiOn. No payment of any award or posting of any bond of any kind whatsoever is required
to be made or posted until such Dispute is finally determined.
In no event shall a demand for arbitration be made after the date on which the initiation of the
legal or equitable proceeding on the same Dispute would be barred by the applicable statute of
limitations or repose. For the purposes of applying the statute of limitations or repose, receipt of
a written demand for arbitration by the AAA shall be deemed the initiation of the legal or equitable
proceeding based on such Dispute.
Audit Administration, Fees, and Other
We may From time to time, and depending on the circumstances, use third-party service providers
in servicing your account. We may share confidential information about you with these service
providers, but remain committed to maintaining the confidentiality and security of your
information. Accordingly, we maintain internal policies, procedures, and safeguards to protect the
confidentiality of your personal information. In addijion, we will secure confidentiality agreements
with all service providers to maintain the confidentiality of your information and we will take
reasonable precautions to determine that they have appropriate procedures in place to prevent
the unauthorized release of your confidential information to others. In the event that we are
unable to secure an appropriate confidentiality agreement, you will be asked to provide your
consent prior to the sharing of your confidenti<ll information with the third-party service provider.
Furthermore, we will remain responsible for the work provided oy any such third-party service
providers.
We understand that your employees will prepare all cash, accounts receivable, and other
confirmations we request and will locate any documents selected by us for testing,
Ms. Maroaret J. McBride is the engagement partner and Is responsible for supervising the
engagement. Gilbert Vasquez is responsible for signing the audit report.
At the conclusion of the engagement, we will complete the appropriate sections of and sign the
Data Collection Form that summarizes our audit findings. We will provide copies of our reports to
the City; however, it is management's responsibility to submit the reporting package (including
financial statements, schedule of expenditures of federal awards, summary schedule of prior
audit findings, auditor's reports, and corrective action plan) along with the Data Collection Form to
the designated federal clearinghouse and, if appropriate, to Pass-through Entities. The Data
Collection Form and the reporting package must be submitted within the earlier of 30 days after
receipt of the auditor's reports or nine months after the end of the audit period, unless a longer
period Is agreed to in advance by the Cognizant or Oversight Agency for Audit. We will provide
information to management as to where the reporting packages should be submitted and the
number to submit.
City of Temple City
July 21, 2011
Page 8
We expect to begin our audit on approximately September 15, 2011, to perform early tests of
controls and to issue our reports no later than December 31, 2011. Our audit engagement ends
on delivery of our audit report. Any follow-up services that might be required will be a separate,
new engagement. The terms and conditions of that new engagement will be governed by a new.
specific engagement letter for that service.
Our fees lor the services outlined In this engagement letter are based on our esUmates of the
lime needed to complete the project at our standard hourly rates. You acknowledge that any fee
estimates we have rurnished are only our good faith estimates based on our understanding of the
engagement assumptions and the facts and circumstances we are aware of at this time. If the
bases of our estimates are inaccurate, the fees and expenses may be different from those we
each anticipate. If significant additional time is necessary, we will discuss it w~h you and arrive at
a new fee estimate before we incur the additional costs.
Our standard hou~y rates vary according to the degree of responsibility involved and the
experience level of the personnel assigned to your audil The fees are based on anticipated
cooperation from your personnel and the assumption that unexpected circumstances will not be
encountered during the audit
Our invoices for these fees will be rendered in accordance with the terms set in our contract and
are payable within 30 days of receipt. In accordance with our firm policies, work may be
suspended if your account becomes thirty days or more overdue and will not be resumed until
your account is paid in run. If we elect to terminate our services for nonpayment, our engagement
will be deemed to have been completed upon written notice of termination, even if we have not
issued a report. You will be obliged to compensate us for all time expended and to reimburse us
for all out-of-pocket expenditures through the date of termination. Invoices aged over thirty days
may be subject to a 10% late charge.
Other Services
We are always available to meet with you and/or other executives at various times throughout the
year to discuss current business, operations, accounting, and auditing matters affecting your
organization. Whenever you feel such meetings are desirable, please let us know. We are also
prepared to provide services to assist you in any of these areas.
You may request that we perform additional services not addressed in this engagement letter. If
this occurs, we will communicate with you the scope of the additional services and esUmated
fees. We also may issue a separate engagement letter covering the additional services. In the
absence of any other written communication from us documenting such additional services, our
services will continue to be governed by the terms of this engagement letter.
Government Auditing Standards require that we provide you with a copy of our most recent
external peer review report and any letter of comment, and any subsequent peer review reports
and letters of comment received during the period of the contract. Our 2009 peer review report
accompanies this letter.
In accordance with SecUon 5079(a)(5) of the California Accountancy Act, we hereby disclose that
William Vasquez is a non licensee owner and he will not be involved in the engagement.
Section 5063(b)(1) of the California Accountancy Act requires us to report to the California Board
of Accountancy, within 30 days of the date that we have knowledge of any restatement of a
financial statement and related disclosures by an audit client.
We appreciate the opportunity to be of service to you and believe this letter accurately
summarizes the significant terms of our engagement. If you have any questions, please let us
know. If you agree with lhe terms of our engagement as described in this letler. please sign the
enclosed copy and return it to us.
City ol Temple City
July 21, 2011
Page 9
Very truly yours,
VASQUEZ & COMPANY LLP
Gilbert R. Vasquez
r~afl2j~inll .. ~art::_n;:.:er _________________________ _
RESPONSE:
This letter correctly sets forth the understanding of the City of Temple City.
Officer Signature:-------------------
Title:
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Date: ---------------------------