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HomeMy Public PortalAbout06_7E_Eide Bailly_Staff Report -Seventh Amendment to Agreement with Eide BaillyADMINISTRATIVE SERVICES DEPARTMENT MEMORANDUM DATE: April 20, 2021 TO: City Council FROM: Bryan Cook, City Manager By: Susan Paragas, Administrative Services Director SUBJECT: APPROVAL OF SEVENTH AMENDMENT TO THE AGREEMENT WITH EIDE BAILLY, LLP FOR PROFESSIONAL AUDIT SERVICES RECOMMENDATION: The City Council is requested to authorize a seventh amendment to the agreement for professional audit services with Eide Bailly, LLP, extending their independent audit services for Fiscal Year (FY) 2020-2021 (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 ended June 30, 2016, with the option to renew the contract for an additional two fiscal years, for a total of 5 years. 2.On April 5, 2016, the City Council authorized the City Manager to enter into an agreement for professional audit services (“Agreement”) with Vavrinek, Trine, Day & Company, LLP (VTD) for FY 2015-2016. 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 FY 2016- 2017. 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 FY 2017- 2018. 5.On January 2, 2019, the City Council authorized the City Manager to enter into a third amendment to the Agreement for professional audit services with VTD for the FY 2017-2018 GASB 75 accounting entries and related note disclosures. 6.On February 5, 2019, the City Council authorized the City Manager to enter into a fourth amendment to the Agreement for professional audit services with VTD for the AGENDA ITEM 7.E. City Council April 20, 2021 Page 2 of 4 preparation and submission of the FY 2017-2018 State Controller’s Office Cities Financial Transactions Report. 7. On May 7, 2019, the City Council authorized the City Manager to enter into a fifth amendment to the Agreement for professional audit services with VTD for FY 2018- 2019. This is the first of two one-year extensions. 8. On May 17, 2019, VTD joined Eide Bailly, thus, was renamed Eide Bailly. 9. On March 4, 2020, the City Council authorized the City Manager to enter into a sixth amendment to the Agreement for professional audit services with Eide Bailly for FY 2019-2020. This is the second of two one-year extensions. 10. On March 13, 2020, the City Council adopted Resolution No. 20-5457, declaring a local state of emergency which gave authority to the City Manager in his role as Director of Emergency Services to implement measures in line with state and county health officials’ recommendations to slow the spread of COVID-19 while not impacting critical services. 11. On March 18, 2020, in an abundance of caution for the health and safety of City staff and patrons, the City indefinitely closed City buildings to the public and modified services. On the same day, the United States Senate passed the Families First Coronavirus Response Act (Act) with President Trump signing the bill into law shortly thereafter. 12. On March 19, 2020, to mitigate the spread of COVID-19, state and county officials ordered residents to stay home or at their place of residence. On the same day, with the authorization granted by the declaration of local emergency, the City Manager ordered some staff to work from home, though essential office workers are to come to the office if needed and if sufficient distancing is maintainable, and essential field staff are to practice all safety and social distancing related to such work in the field. 13. On July 20, 2020, City Hall was opened for appointment only to the public subject to health protocols and measures. Adhering to strict health and safety guidelines, measured occupancy levels, staff report at City Hall on a staggered schedule. Field staff report to City and Park Maintenance yards and adhere to strict health and safety guidelines. 14. Effective on November 25, 2020 to December 20, 2020, the County of Los Angeles Health Officer issued a revised temporary Safer at Home order that includes that all persons who can telework or work from home should continue to do so as much as possible. Thus, the City returned to its March 19, 2020 operating status but included limited hours for essential field employees. 15. On December 19, 2020 to December 27, 2020, the County of Los Angeles Health Officer issued a revised temporary targeted Safer at Home order that includes that all persons who can telework or work from home should continue to do so as much as City Council April 20, 2021 Page 3 of 4 possible. 16. On March 19, 2021, the Audit Standing Committee approved a one-year auditing services agreement extension with Eide Bailly for the FY ending on June 30, 2021. ANALYSIS: FY ending on June 30, 2020 was the last audit year on Eide Bailly’s audit services agreement. A request for proposal (RFP) was planned to be issued with the audit of the FY ending on June 30, 2021. If a new firm was selected as a result of the RFP, it would mean that City employees will need to work closely with the new auditors on site as certain City sensitive files and information will need to be accessed. Currently, the City of Temple City employees continue to telework due to the COVID-19 surge in Los Angeles County deaths and positive cases that began in November 2020. Entry to City facilities are limited and carefully monitored. The City continues its efforts to keep City staff and patrons safe and healthy. Therefore, due to the City’s continued mitigation of the spread of COVID-19 and because Eide Bailly’s auditing services have been satisfactory, it is proposed that a one-year extension be approved to audit City financials for the FY ending on June 30, 2021. The estimated cost is an increase of a 2% CPI which is a total not to exceed $65,400. Because Eide Bailly has all of the necessary City files and information acquired on their first year of auditing City financials, their auditors will not be required to be on site which is what occurred for the audit of FY ending on June 30, 2020. Once the pandemic has been controlled and the City can safely operate normally, a request for proposal for auditing services will be issued, possibly, for the FY ending on June 30, 2022 in the Winter/Spring of 2022. CONCLUSION: As a result of the continued mitigation by the City due to the pandemic and Eide Bailly’s satisfactory auditing services, it is recommended that the City Council authorize the City Manager to enter into a seventh amendment, a one-year auditing services agreement extension, with Eide Bailly, LLP for the FY ending on June 30, 2021. FISCAL IMPACT : There is no fiscal impact with this action for the current FY 2020-2021. The amount of $65,400 will be proposed during the FY 2021-2022 budget process. City Council April 20, 2021 Page 4 of 4 ATTACHMENT: A. Seventh Amendment to Agreement with Eide Bailly, LLP Page 1 of 7 SEVENTH AMENDMENT TO AGREEMENT FOR SERVICES by and between the CITY OF TEMPLE CITY and EIDE BAILLY, LLP (formerly VAVRINEK, TRINE, DAY & COMPANY, LLP) Dated April 16, 2021 ATTACHMENT A Page 2 of 7 SEVENTH AMENDMENT TO AGREEMENT FOR SERVICES This Seventh Amendment to the Agreement for Services (“Seventh 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 Eide Bailly, LLP (formerly 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 April 5, 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 2016- 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. F. On February 5, 2019, the City Council authorized the City Manager to enter into a fourth amendment to the Agreement for professional audit services with VTD for the preparation and submission of the FY 2017-18 State Controller’s Office Cities Financial Transactions Report. G. On May 7, 2019, the City Council authorized the City Manager to enter into a fifth amendment to the Agreement (“Fifth Amendment”) for professional audit services with VTD for the FY 2018-19 City financial statements. H. On March 3, 2020, the City Council authorized the City Manager to enter into a sixth amendment to the Agreement (“Sixth Amendment”) for professional audit services with Service Provider for the FY 2019-20 City financial statements. Page 3 of 7 I. On April 16, 2021, the City Council authorized the City Manager to enter into a seventh amendment to the Agreement (“Seventh Amendment”) for professional audit services with Service Provider for the FY 2020-21 City financial statements. OPERATIVE PROVISIONS NOW, THEREFORE, in consideration of the promises made and recited herein, the parties do hereby enter into this Seventh Amendment, which modifies and amends the Agreement as follows: 1. AMENDMENT. The Agreement is hereby modified and amended as follows: 1.1 Section 1. Section 1 is hereby modified and amended as follows: Subject to the provisions of Section 20 “Termination of Agreement” of this Agreement, the Term of this Agreement is for 12 months commencing on the date when the Seventh Amendment is properly executed by the appropriate authorities of the City and Service Provider. 1.2 Section 2 of the Agreement is hereby amended as follows: The Service Provider will prepare the California State Controller’s Office (SCO) Cities Financial Transactions Report to be submitted to the SCO by the deadline stated in the SCO’s letter for the FY 2020-2021 financial data. 1.3 Section 4 of the Agreement is hereby amended as follows: The third sentence of Section 4, subparagraph (a) of the Agreement is amended to read as follows: The total all-inclusive maximum fee for the FY 2020-21 audit shall be a not-to-exceed of: Sixty-Five Thousand Four Hundred Dollars ($65,400). Amount not to change unless additional compensation is approved in writing by the City Council or City Manager. 2. GENERAL PROVISIONS. 2.1 Remainder Unchanged. Except specifically modified and amended in this Seventh Amendment and previous amendments, First, Second, Third, Fourth, Fifth and Sixth Agreements remain in full force and effect and binding upon the parties. 2.2 Integration. This Seventh Amendment consists of pages 1 to page 7 inclusive, which constitute the entire understanding and agreement of the parties and Page 4 of 7 supersedes all negotiations or previous agreements between the parties with respect to all or any part of the transaction discussed in this Seventh Amendment. 2.3 Effective Date. This Seventh Amendment is effective on the date it was 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 California shall govern the interpretation and enforcement of this Seventh Amendment. 2.5 References. All references to the Agreement include all their respective terms and provisions. All defined terms utilized in this Seventh Amendment have the same meaning as provided in the Agreement, unless expressly stated to the contrary in this Seventh Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Seventh Amendment to the Agreement on the date and year first written above. CITY: THE CITY OF TEMPLE CITY By: __________________________________ Bryan Cook, City Manager ATTEST: ________________________________ Peggy Kuo, City Clerk APPROVED AS TO FORM ________________________________ Gregory M. Murphy, City Attorney Page 5 of 7 SERVICE PROVIDER: Eide Bailly, LLP By: _______________________________ Name: _________________________ Title: __________________________ By: _______________________________ Name: _________________________ Title: __________________________ Page 6 of 7 NOTE: 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. ALL-PURPOSE ACKNOWLEDGMENT NOTARY FOR CALIFORNIA STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) On ____________________, 21__, before me, , Date Name and Title 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) DESCRIPTION OF ATTACHED DOCUMENT Signer's Name: ¨ Individual ¨ Corporate Officer Title(s) Title or Type of Document ¨ Partner(s) ¨ Limited ¨ General ¨ Attorney-In-Fact Number of Pages ¨ Trustee(s) ¨ Guardian/Conservator ¨ Other: Signer is representing: Name of Person(s) or Entity(ies) Date of Document 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. Page 7 of 7 NOTE: 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. ALL-PURPOSE ACKNOWLEDGMENT NOTARY FOR CALIFORNIA STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) On ____________________, 21__, before me, , Date Name and Title 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) DESCRIPTION OF ATTACHED DOCUMENT Signer's Name: ¨ Individual ¨ Corporate Officer Title(s) Title or Type of Document ¨ Partner(s) ¨ Limited ¨ General ¨ Attorney-In-Fact Number of Pages ¨ Trustee(s) ¨ Guardian/Conservator ¨ Other: Signer is representing: Name of Person(s) or Entity(ies) Date of Document 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.