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HomeMy WebLinkAboutCDC/2006-34 RESOLUTION NO. CDC/2006-34 2 3 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING AND AUTHORIZING THE EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE THE AGREEMENT FOR AUDITING SERVICES BY AND BETWEEN THE AGENCY AND ROGERS, ANDERSON, MALODY AND SCOTT, L.L.P., TO PERFORM FINANCIAL AUDIT SERVICES FOR THE AGENCY 4 5 6 7 8 WHEREAS, the Community Development Commission ("Commission") desires to ente 9 into an Agreement with Rodgers, Anderson, Malody and Scott, L.L.P., to perform financial audi 10 services for the Redevelopment Agency of the City of San Bernardino ("Agency") in accordanc 11 with the Request for Proposals and the Proposal for Professional Auditing Services as attached t 12 the Agreement. 13 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF TH 14 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, A 15 FOLLOWS: 16 Section 1. The Commission hereby approves and authorizes the Executive Directo 17 18 of the Agency to execute an Agreement with Rogers, Anderson, Malody and Scott, L.L.P., t 19 perform financial audit services for the Redevelopment Agency of the City of San Bernardino fo 20 a three (3) year period beginning with the fiscal year ended June 30, 2006 through the fiscal yea 21 ending June 30, 2008 in accordance with the Request for Proposals and the Proposal fo 22 Professional Auditing Services, as attached to the Agreement. 23 Section 2. This Resolution shall take effect upon the date of its adoption. 24 II 25 II P:\Agendas\ResolutionsIResolutionsl2006\08-07-06 RAMS Financial Audit Reso.ooc 2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING AND AUTHORIZING THE EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE THE AGREEMENT FOR AUDITING SERVICES BY AND BETWEEN THE AGENCY AND ROGERS, ANDERSON, MALODY AND SCOTT, L.L.P., TO PERFORM FINANCIAL AUDIT SERVICES FOR THE AGENCY 3 4 5 6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the 7 Community Development Commission of the City of San Bernardino at a jt. regular 8 meeting thereof, held on the 7th day of August , 2006, by the following vote to wit: 9 Commission Members: Navs Abstain Absent Ayes 10 ESTRADA BAXTER VACANT DERRY KELLEY JOHNSON MC CAMMACK ---'L ---'L 11 ----X- 12 ---1L- 13 x 14 x 15 16 ?:1f I?~,- ecretary , The foregoing resolution is hereby approved this q -o:t day of August ,2006. 17 18 19 20 <!f""C"'- .( 21 . Morris, C' son m Ity Development Commission ofthe City of San Bernardino 22 23 24 By: 25 Agency 2 P:\Agendas\Resolutions\Resolutions\2006\08-07-06 RAMS Financial Audit Reso.doc AGREEMENT FOR AUDITING SERVICES This Agreement for Auditing Services is made and entered into on this 7th day of August, 2006 by and between the Redevelopment Agency of the City of San Bernardino, a public agency, corporate and politic, duly organized and existing as a community redevelopment agency, (hereinafter referred to as "Agency") and Rogers, Anderson, Malody and Scott, L.L.P., Certified Public Accountants (hereinafter referred to as "Auditors"). WITNESSETH WHEREAS, Auditors are recognized as competent and qualified certified public accountants who were selected by the Agency through competitive procedures, and are duly authorized to practice and licensed as such by the California State Board of Accountancy; NOW, THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter contained, the parties hereto agree as follows: I. TERM. Unless terminated earlier or cancelled as provided for herein, the term of this Agreement shall be for the each of the three (3) fiscal years ending June 30, 2006 through June 30, 2008. 2. SCOPE OF SERVICES. The Auditors agree to provide services and perform all work necessary in a manner satisfactory to the Agency as set forth in the Proposal for Professional Auditing Services, Appendix A, and the Request for Proposals, Appendix C, attached hereto and by reference incorporated herein and made a part hereof. 3. AGENCY'S OBLIGATIONS. For furnishing services specified in this Agreement, Agency will pay and the Auditors shall receive the full compensation as set forth in Appendix B attached hereto and by reference incorporated herein and made a part hereof. Additionally, Agency agrees to provide Auditors with supporting schedules, trial balances and reconciliations as necessary to complete the services requested in Appendix A. 4. PAYMENT SCHEDULE. The Auditors shall submit invoices based on the percentage of audit work completed. After Agency approval, said invoice shall be paid within 30 days. 5. COMPLETION OF AUDIT AND DELIVERY OF AUDIT OPINIONS. A. Auditors shall complete all work by the dates provided in Appendix A of each fiscal year included in the term of this Agreement, but in no event shall any final written audit report, management letter or affiliated report be delivered to the Agency later than December I for the immediately prior fiscal year being audited. B. Auditors shall deliver their final typed audit opinions and other reports as set forth in Appendix A for each fiscal year included in the term of this Agreement provided Agency furnishes the information to Auditors pursuant to Section 3 herein above in a timely manner. I 6. TERMINATION. A. Termination Without Cause. Agency and Auditors shall have the right to terminate this Agreement, by giving not less than thirty (30) days' prior written notice oftermination to the other party. On the date of termination stated in the written notice, Auditors shall discontinue performance of the services, preserve the product of the services, and turn over to Agency the product of the services in accordance with written instructions of Agency. If Agency terminates this Agreement under this Subsection A of Section 6, Agency shall compensate Auditors within thirty (30) days following the effective date of termination for all services satisfactorily provided prior to the effective date of termination based on the amounts and rates set forth in Appendix B. If Auditors terminate this Agreement under this Subsection A of Section 6, Agency shall compensate Auditors in the same amount Agency would compensate Auditors in the event Agency terminated this Agreement under this Subsection A of Section 6, less any costs Agency pays other auditors to review or re-perform the services provided by Auditors prior to the date of termination. In the event of termination without cause by either party, Agency's payment as provided herein shall constitute full satisfaction of Agency's obligations under this Agreement. B. Termination bv Agencv for Cause. 1. Agency may, by written notice to Auditors, immediately terminate the whole or any part of this Agreement in any of the following circumstances: a. Auditors fail to perform the services required by this Agreement within the time specified herein, or within any extension of that time; b. Auditors fail to perform satisfactorily the services called for by this Agreement, or otherwise breaches any provision of this Agreement, and do not correct such failure within a period of ten (10) days or such longer period as Agency may authorize in writing after notice is given by Agency specifying such failure of breach; c. Auditors make a general assigrunent for the benefit of their creditors, files or have filed against them a petition in bankruptcy, or have a receiver appointed on account of their insolvency; or d. Auditors fail to maintain the insurance required pursuant to Section 10. 2. Inunediately upon receiving written notice of termination, Auditors shall discontinue performing services, preserve the product of the services, and turn over to Agency the product of the services in accordance with written instructions of Agency. In the event Agency terminates this Agreement in whole or in part as provided above in Paragraph 1 of this Subsection B of Section 6, Agency shall pay Auditors for all services satisfactorily provided by Auditors prior to the effective date oftermination based on the amounts and rates set forth in Appendix B, less any fees Agency pays other auditors to review or re-perform the services provided by Auditors prior to the date of termination. Said payment shall constitute full satisfaction of Agency's obligations under this Agreement. 2 C. Termination bv Auditors for Cause. Auditors may immediately terminate this Agreement if Agency is in breach of this Agreement and does not correct such breach within a period often (10) days (or such longer period as Auditors may authorize in writing) after notice is given by Auditors specifying such failure of breach. If Auditors terminate this Agreement pursuant to this Subsection C of Section 6, Agency shall compensate Auditors within thirty (30) days following the effective date of termination a fee for all services satisfactorily provided prior to the effective date of termination based on the amounts and rates set forth in Appendix B, and such payment shall constitute full satisfaction of Agency's obligations under this Agreement. 7. NOT OBLIGATED TO THIRD PARTIES. The Agency shall not be obligated or liable hereunder to any party other than the Auditors. 8. PROHffiITION AGAINST SUBCONTRACTING OR ASSIGNMENT. The experience, knowledge, capability and reputation of Auditors, its principals and employees were a substantial inducement for the Agency to enter into this Agreement. Therefore Auditors shall not contract with any other entity to perform in whole or in part the services required hereunder without the express written approval of the Agency. In addition, neither this Agreement nor any interest herein may be transferred, assigned, conveyed, hypothecated or encumbered voluntarily or by operation of law, whether for the benefit of creditors or otherwise, without the prior written approval of Agency. Transfers restricted hereunder shall include the transfer to any person or group of persons acting in concert of more than twenty- five percent (25%) of the present ownership and/or control of Auditors, taking all transfers into account on a cumulative basis. In the event of any such unapproved transfer, including in any bankruptcy proceeding this Agreement shall be void. No approved transfer shall release any surety of Auditors of any liability hereunder without the express consent of Agency. 9. INDEPENDENT CONSULTANT. Neither the Agency nor any of its employees shall have any control over the manner, mode or means by which the Auditors, its agents or employees perform the services required herein, except as otherwise set forth. The Agency shall have no voice in the selection, discharge, supervision or control of Auditors' employees, servants, representatives or agents, or in fixing their number, compensation or hours of service. Auditors agree to maintain continuity of managerial personnel assigned to the engagement except for reasons beyond Auditors' control. Auditors shall perform all services required herein as an independent contractor of Agency and shall remain at all times to the Agency a wholly independent consultant with only such obligations as are consistent with that role. Auditors shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of Agency. Agency shall not in any way or for any purpose become or be deemed to be a partner of Auditors in its business or otherwise of a joint venture or a member of any joint enterprise with Auditors. 10. INSURANCE. The Auditors shall procure and maintain, at its cost, comprehensive general liability and property damage insurance, including automobile and excess liability insurance, against all claims for injuries against persons or damages to property resulting from Auditors' negligent acts or omissions rising out of or related to Auditors' performance under this Agreement. Auditors shall also carry Workers' Compensation Insurance in accordance with State Workers' Compensation laws. Auditors agree to maintain professional liability insurance to protect Agency from Auditors' negligent acts, errors or omissions of a professional nature. If any claim related to the performance hereunder be asserted against either party hereto, the party claimed against shall receive all reasonable assistance from the other. The requirements ~erein for subrogation may be waived by the Agency with respect to such professional liability msurance. 3 10. INSURANCE. (CONTINUED The insurance required hereunder shall be kept in effect during the term of this Agreement and shall not be subject to reduction in coverage below the limits established herein, nor cancellation or termination without thirty (30) days prior written notice by registered letter to the Agency. The insurer shaH waive the right of subrogation against Agency, its officers, employees and agents, and the coverage shaH be primary for losses arising out of Auditors' performance hereunder and neither the Agency nor its insurers shall be required to contribute to any such loss. A certificate evidencing the foregoing and naming the Agency as an additional insured shaH be delivered to and approved by the Agency prior to commencement of the services hereunder. The procuring of such insurance or the delivery of policies or certificates evidencing the same shall not be construed as a limitation of Auditors' obligation to indemnify the Agency, its officials and employees. The amount of insurance required hereunder shall be as follows: I. Workers Compensation to statutory limits; 2. Commercial General Liability: Each occurrence Personal injury Aggregate limit Hired Auto and Non-Owned Auto Liability: Each occurrence Aggregate limit Professional Liability: Each claim and in the aggregate 3. 4. $1,000,000 $1,000,000 $2,000,000 $1,000,000 $1,000,000 $1,000,000 11. NOTICE. All written notices to the parties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows: Maggie Pacheco, Executive Director Redevelopment Agency of the City of San Bernardino 201 North E Street, Suite301 San Bernardino, California 92401 AGENCY: Terry Shea, Partner Rogers, Anderson, Malody and Scott, L.L.P. 290 North "D" Street, Suite 300 San Bernardino, California 92401 AUDITORS: 4 12. AUTHORITY TO EXECUTE AGREEMENT. Both Agency and Auditors do covenant that each individual executing this Agreement on behalf of each party is a person duly authorized and empowered to execute agreements for such party. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first written above. REDEVELOPM.Efl)AGENCY OF THE CITY OF SAN BERNARDlNO L-;w(/ ~-~- Maggie pachedo, Executive Director Rogers, Anderson, Malody and Scott, L.L.P. %!~ Te~, Partner Approved as to Form: lb~ Agency Co I 5 APP.ENDIX A Proposal CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO CITY OF SAN BERNARDINO MUNIC,PAL WATER DEPARTMENT Proposal for Professional Auditing Services For the fiscal year ending June 30, 2006 (with the option for subsequent years) PREPARED BY: ROGERS, ANDERSON. MALODY AND SCOTI. LLP CERTIFIED PUBLIC ACCOUNTANTS 290 NORTH "D" STREET, SUITE 300 SAN BERNARDINO, CALIFORNIA 92401 (909) 889-0871 CONTACT PERSON: TERRY SHEA, PARTNER. tshea@ramscpa.net May 4, 2006 CI1Y OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Table of Contents Transmittal Letter PaQe i . Technical Proposal Independence. License to Practice in California and FirmlClienlRelationships 1 Firm Qualifications and Experience 2 About our firm Redevelopment Agency and Single Audit experience Time required of staff for familiarization of all entities accounting systems Extemal quality control examinations Implementation of Govemmental Accounting Standards Board Statement (GASBS) No. 34 - Infrastructure Reporting Partner. Supervisory and Staff Qualifications and Experience 5 Partner and supervisory staff involvement Continuing professional education Assigned personnel Client References 8 Specific Audit Approach 10 Specific.audit approach and proposed segmentation Level of staff and assigned hours Sample sizes EDP software Anal~fualprocedures Understanding of intemal control over. financial reporting Approach in determining applicable laws and regulations Approach in drawing samples for compliance testing Resumes of Key Engagement Personnel 17 Attachment A: Quality Control Review Report . Attachment B: Scope of Services Attachment C: License/Insurance Documents Attachment D: Request List ROGERS, ANDERSON, MALaDY & SCOlT, LLP CERTIFIEDPUSLICACCOUNTANTS JAY H. ZERCHER, C.P."'. ROBERT B. MEMORY. C.P.A. PHILUP H. WAllER. C.P .". BRENDA L. DOLE, C.P.A. TERRY P. SHEA. C.P.A. KIRK A. FRANKS. C.P.A. M....TTHEW.S WilSON. C.P.A ---~ MayA,2006 tEENA SHANBHAG. C.P.A. NANCY O'RAFFERTY. C.P.A. LAURiE K. fAARSCHER, C.P.A. THOMAS T. PRILL. C.P.A. JOSEPH P WALSH, C.P.A. SCOTTW. MANNO, C.P.A. JENNY llU. C.P.A. BRAD A. WELEBIR, C.P.A. Sheila A. Futch Purchasing Division City of San Bernardino 300 North "0" Street, 4th Floor . San Bernardino, CA 92418 Rogers, Anderson, Malody and Scott, LLP is pleased to present this proposal for professional . auditing services to the City of San Bernardino, the Economic Developrnent Agency of the City of San Bernardino and the City of San Bernardino Municipal Water Department (collectively the. City/City of San Bernardino unless noted). For over 58 years, Rogers. Anderson, Malody and Scott, LLP has been providing governmental accounting and auditing services to a wide variety of governmental agencies. Our experience has helped us to understand the complex requirements and issues encountered by governmental agencies like yours. We understand the desire for the timely delivery of accurate reports (including the timely submission of the Comprehensive Annual Financial Report (CAFR) and the Cities and Redevelopment Agencies Financial Transaction Reports to the State Controllers Office) and the desire for a quality audit performed in a competent. efficient manner. We pride ourselves on helping you meet all reporting/auditing deadlines. resolving any issues encountered during your audit (e.g., accounting or auditing, new pronouncements, etc.) and by providing you with quality audit services. We understand that the City has requested proposals from many other firms, but we believe we would be the appropriate choice for the City's engagement for the following reasons: 1. As a recognized leader in Ule governmental. accounting and auditing community, we are committe(l to . provt(ling.. exootlerit. limt;ll~f service and quality reports, all. of which will enable the City to meet its varied needs. Oor firm takes pride in providing the most experienced and technically skilled professionals on all of our engagements. We strive to recruit and retain the best and brightest professionals in our field. The professionals in our firm have the technical knowledge to satisfy the requirements of the eng<1gement, but, more than that, our professionals have the interpersonal and "common sense" skills to augment their technical expertise. Also, our staff prides itself on being able to take a proactive approach to serving the City, actively seeking out opportunities to improve the efficiency and effectiveness of your operations. Simply stated, we are a full service firm committed to providing the highest standards of quality and professionalism to all of our clients. MEMBERS AMERICAN INSTITUTE OF CERTIFIED puellC ACCOUNTANTS PCPS THE AICPA ALLIANCE FOR CPA FIRMS CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS VANIR TOWER ~ 290NORTH7J.STRE~1 ~ SUITE300 SANBERNAROINQ C492401 (909)889-DS71 . (909)B24-6736. FAX(909)BB9-5361 E-mail"ramsfJramscpa.nel , City of San Bernardino May 4, 2006 2. We understand that the audit process as a whole can be a taxing experience for you and your staff; we understand that you will have other commitments and your regular workloads during the audit period. For all of our clients, we make every effort to ensure the audit process, from the interim field work to the preparation of the required financial reports, will be as trouble-free as possible for you and your staff. We do this by planning the audit . properly and utilizing our staff in the most efficient and effective manner. Also, we keep an open line of communication with all parties involved in the a.udit process. 3. Since we are a local firm, we take pride in responding to your calls and concerns as . soon as possible (within a maximum of 24. hours), because we realize that at various times through-out the year, a situation may arise that will require immediate consultation. Our staff will be available year round to serve the City. Also, unlike most firms, we will not charge you for minor questions or technical issues that will take a minimal amount of time to solve. 4. As governmental accountants and auditors, we understand the time constraints that our clients face. Therefore, as with all of our clients, we will be committed to performing quality work within the required time frame. After reading through our proposal, we hope that you will have gained an understanding of our firms' commitment to our clients, that is, our commitment to providing exceptional and timely service, quality products, and experienced staff to all of our clients, whether new or continuing. We understand the scope of the engagement as described in the City's Request for Proposal (see attachment B). Mr. Shea, Partner, is authorized to act on behalf of Rogers, Anderson, Malady and Scott, LLP. He can be reached at: 290 N "0" Street, Suite 300, San Bernardino, CA 92401, (909) 889-0871 or tshea@ramscpa.net. Thank you for the opportunity to serve the City of San Bernardino and we look forward to having a long and mutually beneficial association. Respectfully yours, ROGERS, ANDERSON, MALODY & SCOTT, LLP ~~~ . Terry Shea, Certified Public Accountant Partner ii CITY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Independence, License to Practice in Califomia and Firm/Client Relationship Independence Rogers, Anderson, Malody & Scott, LLP is independent of the City of San Bernardino, and any component units, as defined by general standard number two of the generally accepted auditing standards. We are also independent of the City of San Bernardino, and any component units, as defined . by the second general standard for government auditing in the U.S. Government Accountability Office's Govemment Auditing Standards (2003). License to practice in California Rogers, Anderson, Malody & Scott, LLP is licensed to practice in the State of California. The key professional staff, which includes the partners and managers, are all certified public accountants licensed to practice in the State of California. Firm/Client relationship As with all of our clients, we are committed to developing a relationship with each that will foster an understanding of their needs and, above all, to maintaining the highest accounting and ethical standards of our profession. In order to develop this relationship, we do not see ourselves as just "the auditor". We like to consider ourselves as professional advisors for the City, that is, providing assistance with accounting and financial reporting standards. As your advisors, we will assist you in selecting and applying the appropriate standards as they relate to the City. In addition, we will continually up date you on relevant accounting and reporting pronouncements that affect the City. Also, we feel open, frequent communication throughout the entire engagement ami continuing after the engagement with all of our clients is essential. Open communra:;ltion facilitates the audit process by allowing any and all issues to be discussed as needed. This creates a clear understanding of the audit, eliminates any surprises and keeps disruptions to a minimum during the audit process, thus ensuring an efficient, quality audit. -1- CITY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT , PROPOSAL FOR PROFESSIONAL AUDITING SERVICES , Firm Qualifications and Experience About our firm Rogers, Anderson, Malody & Scott,LLP was founded in 1948 and is located at 290 North "on Street, Suite 300, San Bemardino, Califomia. We are one of the oldest CPA firms in Southem Califomia, with over 58 years of public practiCe experience, specializing in governmental agency auditing, accounting and management advisory services. Over fifteen thousand hours per year are devoted to this area of our practice, which include cities, redevelopment agencies, water districts, other special districts, nonprofit corporations and joint power authorities. Our firm has a total staff of twenty-six people, which includes thirteen certified public accountants. Our staff consists of seven partners, ,five managers, 'two seniors, seven staft' accountants and five secretarial staff. Our municipal audit staff consists of eighteen members who devote approximately 75% of their time to municipal engagements. Tentatively, the audit team assigned to the City engagement will consist of the following full-time staff: an engagement partner, a quality control partner and four auditing professionals. There will be no part-time staff assigned to the engagement. .' " As governmental auditors, we understand that the City desires its auditors to have a thorough understanding of the complex accounting and compliance issues confronting governmental entities such as yours. Our Firm is committed to providing our clients the highest quality service at the most reasonable fee. The professionals assigned to the City financial audit have each made providing quality serVices their priority. As stated earlier, we have a long history of governmental accounting and auditing. In that time, we have gained valuable experience and acquired an in-depth knowledge and technical expertise needed for govemmental accounting and auditing. Our Firm's partners and professional staff assigned to the City have performed audits, various accounting services and management advisory services for many governmental agencies, like yours. The following is a partial listing of prior and current clients, similar to the type of audit requested, that our firm or engagement team members have served ('includes water and sewer funds): City of Chino City of Corona City of Indian Wells City of Loma Unda City of Riverside City of Canyon Lake Twentynine Palms Water District Cresfline Village Water District City of Galt City of Ontario" Bsinore Valley Municipal Water District Valley Water District, Riverside County Economic Development Agency City of Grand Termce City of Noreo" City of Calimesa City of Palm Desert City of San Bernardino Town of Yucca Valley East Valley Water District West Valley Water District City of Lake Elsinore City of Isleton Ventura Regional Sanitation District Pine Cove Water District Cityof San Bernardino Economic Development Agency -2- City of Twentynine Palms City of Indio ' City of Fontana City of San Jacinto" City of Blythe" City of Banning" Running Springs Water District Mojave Water Agency City of Perris" City of Escondido" Victor Valley Wastewater Reclamation Authority Goleta Sanitary District City of San Bernardino Municipal Water Department CfIY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Firm Qualifications and Experience (continued) We have also performed audits for Redevelopment Agencies, pension plans, and compliance requirements in accordance with OMB Circular A-133, as well as water and sewer utility districts . and Public Financing Authorities. In addition, we have provided audit and consulting services for various private enterprises. . The Firm alsoprovjdes various other services to govemmental agencies. Services to these govemments, in addition to auditing services, include: . Study and evaluation of financial condition and fiscal pOlicies . Financial projections . Organizational studies . Development of budgeting systems . EDP control reviews and computer feasibility studies . System design, analysis and review . Job classification and compensation studies . Accounting policies and procedures . Utility rate studies . Cost control and cost allocation plans . Capital Improvement program procedures and policies . Cash management studies . Financing and public bond offering assistance . Assistance in development of internal audit programs . Employee benefit consulting . Franchise agreement assistance (ambulance, cable, television, refuse, etc.) Redevelopment Agency and Single Audit experience Over the past several years, all of ourcity clients have been subject to an audit in accordance with OMB A-133. In addition, we have many other government and nonprofit clients that are also $ubjeGt to single audit standards. A CUrrent audit client of ours receives appr-oXimiately 92% of its revenues from Federal, State and local grants. Also, all of our current city audit clients have active redevelopment agencies, which are subject to the compliance requirements set forth by the California State Controllers Office. Time required of staff for familiarization of all entities accounting systems Based on our vast experience in govemmental accounting and auditing and our previous experience with the entities involved, we believe that only a minimal amount of your staff time will be needed in order for us to familiarize ourselves with your accounting system. In addition, our fee is calculated in a manner that does not penalize you for any time spent by us gathering information about your systems. -3- CTIY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Firm Qualifications and Experience (continued) External quality control examinations As a member of the AICPA Private Companies Practice Section, our firm has participated in 'Peer . Review' since 1993 and has been examined every three years since that date. During. participation in this program, the firm has received unqualified opinions from the peer reviewers. A copy of our most recent external quality control review dated August 15,2003 for the year ended November 30, 2002 (Attachment A) is attached. The latest review included reviews of specific governmental agencies. The firm is not aware of any federal or state desk reviews or field reviews orits audits during the last three years. The firm has not had any disciplinary action taken or pending against them during the past three years with state regulatory bodies or professional organizations, nor has it. had any pending or sellled litigation, present civil or criminal investigations within the past three years. Our firm also does not have a record of substandard work. Implementation of Governmental Accounting Standards Board Statement (GASBS) No. 34 - Infrastructure Reporling Over the past several years, we have provided GASBS No. 34 implementation assistance to the following cities: City of Norco, City of Grand Terrace and the City of San J.acinto. We also provided assistance to seventy-eight County of San Bernardino Special Districts in implementing the new statement. Our experience in implementing this pronouncement will make our firm an important resource for the City. Currently, we prepare the GASB 34 financial statement for the following governmental entities: City of Norco, City of Grand Terrace, City of San Jacinto, City of Twentynine Palms, City of Calimesa, City of Canyon lake, the component unit financial statements of the listed c.ities and other special districts, including the seventy-eight County of. San Bemardino districts.. -4- CITY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Partner, Supervisory and Staff Qualifications and Experience Our engagement team will provide significant experience and an extensive, practical understanding of governmental accounting and auditing. These professionals are highly trained and knowledgeable and have a thorough understanding of the environment in which governmental entities operate. Partner and supervisory staff involvement , All partners and supervisory staff are working professionals and are actively and continually involved in all aspects of theirengagemenlS. . We believe that partner and supervisory personal. involvement in all areas of the audit is a key aspect of the overall audit process, including being pn-site for interim and year-end fieldWork. This involvement helps to ensure a proper, efficient. and effective audit, with minimal disruption of City staff. In addition, the time spent On-site by the partners and supervisory staff ensures they gain an understanding of all of the City's accounting processes and procedures, which will enable them to evaluate, develop opportunities for efficiency and offer practical and functional advice for improving your accounting processes.and procedures. We want to emphasize the credentials of the above professionals who will be directly responsible for the quality of service the City will receive, but additionally, our audit team has another attribute that is very important, even though it is intangible -- the professionals assigned to the City's audit have worked together on other engagements. The fact that they are . accustomed to working together as a multi-disciplined team means that the performance of the audit will be smooth, efficient and effective. We are committed to allocating the necessary resources to ensure that we provide continuity of personnel throughout the term of our relationship with the City. Continuing professional education All professionals at our firm participate in continuing professional education programs which are sponsored by various organizations including .the Government Finance Officers Association.\he Ameri~n Institute of Certified Public Accountants, ..(fu}.. C;ijifomia State $Odlll1Y. Of Gertjfillld Public Accountants. the California Society of Municipal FinanCe Officers and tile ASsocialk>n of . Government Accountants. Participation in these classes helps us to ensure that our clients are receiving the best trained and proficient gov~rnment auditors and accountants available. -5- CrIY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUOITING SERVICES Partner, Supervisory and Staff Qualifications and Experience (continued) Assigned personnel The quality of the service you receive is dependent on the capabilities of the individuals assigned to the engagement, and the manner in which those personnel resources are organized to efficiently focus their abilities on providing you with t r uested audit services. It is our goal to provide the City with capable, competent an sonal ndividuals who offer an extensive background, not only in governmental accoun uditing, but also general . business practices. We offer practical. solutions, as. well provide technical support. This enables you to stay at the forefront of government accounting and provides you with the support you need in dealing with the complex issues confronting governments such as yours. . In addition, our engagement team has the managerial and supervisory experience to provide the City with a comprehensive audit of the highest quality, while still focusing on personal service. The following individuals will be assigned to the engagement for the entire contract period: Terry Shea, CPA Engagement Partner Mr. Terry Shea, CPA will be the Engagement Partner. Mr. Shea, who has over 25 years of practical, governmental accounting and . auditing experience, will be directly responsible for the engagement as a whole. He will be responsible for overall engagement quality, as well as ensuring that the engagement is performed in the most effective and efficient manner. Mr. Shea will review all work-papers prepared during the engagement, in addition to all required reports. Mr. Shea provides real world experience to all of our governmental engagements. He has gained this experience by serving as interim/contract finance director for several cities over the years. He served as Interim Finance Director for the City of Perris from July 1998 to October 2001, where he was instrumental in turning a $2.3 million general fund deficit into a $3.1 million surplus. He currC3ntly serves as the Contract Finance Director for a Riverside County city. Mr. Shea is a working partnC3r and will be activelyanq continually involved In all aspects of the engagement. . Robert Memory, CPA Engagement Quality Control Partner As part of our Firm's commitment to customer service and delivering quality reports, . each engagement is overseen by a quality control partner. For the audit, this partner will be Robert Memory. Mr. Memory is the Firm's managing partner and has over 34 years experience providing audit and consulting services to governmental agencies like yours. As the firm's Coordinator of Governmental Services, he is responsible for the firm's governmental practice, including administration, professional development, practice standards and procedures, and quality control. Quality control activities include the pre-release review of all governmental unit audits and management advisory services reports issued by him or by other qualified industry specialists: -6- CITY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT. AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Partner, Supervisory and Staff Qualifications and Experience (continued) Scott Manno, CPA Audit Manager , Mr. Scott Manno, CPA is a municipal audit manager with the firm and will be the engagement manager. Mr. Manno ten years, eight of those as an audit manager, experience in serving local govemments such as yours. As the manager of the engagement, Mr. Manno will be responsible for the planning of the audit, supervision of staff assigned to the engagement as well as. performing reviews of all work.papers prepared during the engag~ment He will.also be responsible for preparation of any required reports. For the past 10 years, Mr. Manno has been providing accounting and auditing services for municipalities, special districts and redevelopment agencies as well. as various non-profit organizations. Mr. Manno also assisted the following cities in their .endeavors to obtain the CSMFO and/or. GFOA awards for outstanding financial reporting: Town of Yucca Valley, Elsinore Valley Municipal Water District, City of Gall, City of Lake Elsinore, City of Ontario, the Ventura Regional Sanitary District, the City of Norco and the City of Twentynine Palms. From 1997-2000, Scott served as a technical reviewer under the CSMFOaward program. eo Brad A. Welebir, CPA Senior Accountant Mr. Brad A Welebir, CPA is a senior accountant with the firm. He is licensed to practice as a certified public accountant in the State of California. Mr. Welebir has over three years of public accounting experience. He has provided accounting, auditing and . consulting services for municipalities, special districts, water agencies, and various non-profit organizations. He will be responsible for examining general ledger accounts, verifying revenues and expenditures, preparing work-papers, and assisting in the preparation of the financial statements and any other required reports. Anastasia Cortes, Senior Accountant Ms. AnaslasiaCortes, is a senior ;ilcCOUl)tant with the firm. Ms. Cortes has over eight . Y89I'$.. exfleriem;e in p(()\iiding accounting and auditing servicas for municipalities; special districts and redeveloprnent agencies. As a senior accountant she will be responsible for examining. general ledger accounts, verifying revenues and expenditures, preparing work-papers, supervise staff accountants and assist in the preparation of the financial statements and any other required reports. Continuity of audit staff is a principal concern with our firm. Therefore, we plan to provide staff continuity from year to year, which is in the best interest of the City and our firm, thus ensuring an orderly, efficient and less disruptive audit experience by competent professionals. Since we cannot guarantee staff Will remain with us, principal supervisory and management staff,. . induding engagement partners, managers, other supervisory staff and specialists may be changed if those personnel leave the firm or are promoted. -7- ~ 'CIIY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Client References ~ . Entity: Scope of Work: Date: EngagementParlner. . Total Hours: Contact Person: 2. Entity: Scope of Work: Date: EngagementParlner. Total Hours: Contact Person: 3. Entity: Scope of Work: Date: EngagementParlner. . Total Hours: Contact Person: 4. Entity: Scope of Work: Date: EngagementParlner. fotalHout$: Contact Person: 5. Entity: Scope of Work: Date: Engagement Parlner. Total Hours: Contact Person: COUNTY OF SAN BERNARDINO AUDITOR/coNTROLlER Special District Audits Financial Audits Year Ending June 30, 2002 through 2005 Mr. Terry P. Shea Approximately 1,750 hours Mr. Howard Ochi, CPA, Chief Deputy Auditor (909) 386"8821 CITY OF NORCO Financial AudiUSingle AudiURDA Compliance AudiUCAFR Years Encling June 30, 2001 through 2005 Mr. Terry P. Shea Approximately 475 hours each year Ms. Olivia Hoyt, Accounting Manager, (951) 735-3900 CITY OF SAN JACINTO Financial AudiUSingle AudiURDA Compliance Audit Years Ending June 30, 2001 through 2005 Mr. Terry P. Shea Approximately 425 hours each year Mr. Bernard Simon, Finance Director. (951) 487-7340 CITY OF CAL/MESA Financial AuditlRDA Compliance Audit Year Ending June 30. 2005 Mr. Terry P. Shea Appro,qmately 250 hours eaoh year Mrs. Debbie Cain,FinanceDirector, (909)795-9801 EAST VALLEY WA TER DISTRtCT Financial Audit Years Ending June 30, 2001 through2005 Mr. Robert Memory Approximately 380 hours each year Mr. Brian Tompkins, Controller, (909) 889-9501 -8- CITY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Client References (evntinued) 8. 9. 10. 6. Entity: Scope of Work: Date: EngagementParlne~ Total Hours: Contact Person: 7. Entity: Scope of Work: Date: Engagement Parlner: Total Hours: Contact Person: Entity: Scope of Work: Date: Engagement Parlner: Total Hours: Contact Person: Entity: Scope of Work: Date: EngagementParlne~ Total Hours: Contact Person: Entity: Scope of Work: Date: Engagement Parlner: Total Hours: Contact Person: CRESTLlNE-LAKE ARROWHEAD WA TER AGENCY Financial Audit Years Ending June 30, 1983 through 2005 Mr. Robert Memory Approximately 350 hOurs each year Ms. Roxanne Holmes, General Manager, (909) 338-1779 RUNNING SPRINGS WATER DISTRICT Financial Audit Years Ending June 30,1998 through 2005 Mr. Jay Zercher Approximately 240 hours each year Mr. Ed Brittain, General Manager, (909) 867-2766 CRESTLlNE VILLAGE WA TER DISTRICT Financial Audit Years Ending June 30, 1956 through 2005 Mr. Jay Zercher Approximately 180 hours each year Mr. Norm Hunt, General Manager, (909) 338-1727 CITY OF TWENTYNlNEPALMS Financial AudiVSingle AudiVRDA Compliance AudiVCAFR Years Ending June 30, 2003 through 2005 Mr. Terry P. Shea Approximately 300 hours each year Mr. RonaldPeck, Finance Director, (760) 367-6799 CITY OF GRAND TERRACE Financial AudiVRDA Compliance Audit Years Ending June 30, 2003 through 2005 Mr. Terry P. Shea Approximately 280 hours each year Mr. Larry Ronnow, Finance Director, (909) 824ctl621 -9- CITY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Specific Audit Approach Specific audit approach and proposed segmentation The following is a summary of the audit team's approach for the City of San Bernardino. engagement. The audit will be divided into the following phases: Planning, administration and interim phase: We anticipate this phase to be performed in the following timeframeforeach entity: City - May/June EDA - August Water Department - June During this phase of the audit, our principal objectives will be as follows: ./' Discuss the dates of the interim and year-end fieldwork. ./' Familiarize ourselves with the City's accounting policies and procedures. ./' Obtain an understanding of the internal control over financial reporting sufficient to plan the audit. ./' Perform single audit testing procedures, if needed. ./' Assess control risk and design tests of controls. ./' Perform tests of controls, if applicable. In order to achieve the desired objectives of this phase of the audit, we will: . Meet with City staff in order to determine convenient dates for the City in which we can begin our audit and to discuss the assistance to be provided by City staff, . Review and evaluate the City's accounting and reporting processes by reviewing the prior year audit work-papers, any City prepared documents such as budgets, in- house financial reports, policies andprQcedl.lres ml!.ooals, minutes. of CQ/JIlcil meetings,etc. and by using various an;;ilyticat prOCOOlif.S;Af1BlYticaLPr-ooedliltes will enhance our understanding of the City and will help us identify areas th;;it may need further assessment and additional testing, . Review and retain copies of any pertinent local, state and federal statutes, regulations, or charters that apply to the City. Review and retain copies of any agreements of contractual obligations (e.g. bond and grant documents, lease agreements, contracts for deposit of monies, revenue agreements, etc), . We will obtain a thorough understanding of the City's internal controls over financial reportlng and compliance by documenting key internal control components utilizing questionnaires, walkthroughs, inquiry of City personnel, observation and review of key supporting documentation (a more thorough explanation of this process is discussed later in the technical proposal), -10- CITY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARlMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Specific Audit Approach (continued) . Review and analyze supporting data and determine what reliance will be placed on internal controls and assess control risk, . If control risk is assessed below the' maximum, test controls by selecting a sample of transactions within the audit area being tested and review supporting documentation, evaluate the completeness of the documentation tested, as well as the adequacy of support and approvals as they appear on the support, and . Document and review with manag.ementany findings noted during the testing of . internal controls and provide a preliminary managernentletter that will include our recommendations for improving any weaknesses in operations noted during our internal control analysis and tests of controls. The letter will also include suggestions for improving the efficiency. of the City's operations. The audit manager, seniors and staff will perform this phase, with direct oversight of the engagement partner. Year-end phase: We anticipate this phase to be performed in the following timeframe for each entity: City - October EDA - September/October Water Department - September/October During this phase of the audit, our principal objectives will be as follows: ,/ Design substantive tests. ,/ Perform substantive tests and complete the audit. In order to achieve the desired objectives of this phase of the audit, we will: . Determine whether our testing supports the assessed level ofcontRIl risk initially assigned to each audit area, . Develop a detailed audit plan, and . Design substantive tests of balances, designed and modified specifically for the City's current situation. . Perform o~ tests as needed to enable us to form opinions on the financial statements. -11- CIlY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Specific Audit Approach (continued) The engagement partner, manager, seniors and staff will perform this phase. Reporting/audit conclusion phase: We anticipate this phase to be performed in the following timeframe for each entity: City - October/November . EDA - September/October . Water Department - October/November v' Form an opinion and issue the audit reports. In order to achieve the desired objectives of this phase of the audit, we will: . Determine whether our substantive testing supports our assessment that the financial statement amounts are reasonably stated. This will provide the basis for our opinion, . Review all audit work-papers by the engagement partner and manager to ensure that the audit was performed in accordance with the required standards (GAAS, GAGAAS, etc.), . Prepare drafts of all required reports, . Independent review of financial statement draft by firm's managing partner and . Issue all reports by agreed upon date. This step will be performed during the month of September by the audit manager and audit senior, with direct oversight of the engagement partner and quality control partner. Leve/of staff and assigned hours The following schedule is a breakdown of the projected man hours, by staff level, by entity: -12- ,. CllY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Specific Audit Approach (continued) B. Cityof San Bernardino Economic Development Agency: Interim Year-end Total Partner ~/~ . 10 30 40 Manager ~I\o 20 45 65 / Senior 35 65 100 Staff 35 115 150 P<!raprofessional 25 25 100 280 380 C. City of San Bernardino Municipal Water Department: Interim Partner . Manager Senior Staff Paraprofessional 15 25 35 40 Year-end Total 30 45 60 85 85 120 125 165 30 30 330 445 115 Our hourly billing rates are as follows: Standard Hourly Rate Quoted Hol,lrly Rate Partner $ 185 $ 170 Manager 135 105 Senior 105 90 Staff 85 75 . Paraprofessional 45 45 -13- CITY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Specific Audit Approach (continued) Sample sizes Our sample sizes will be determined in accordance with the AICPA Audit and Accounting Guide,Audit Sampling, and will be selected using professional judgment as permitted by SAS 39. Our methods are designed to provide the most audit coverage without expending excess time. Our sample sizes will depend upon our preliminary assessment bf control risk, as well as our planned substantive testing and analytical procedures. EDP software It is our intent to audit around the City's computer system. However, if we determine that it would be more efficient and cost effective to audit through the City's system, we will apply the necessary procedures after discussing the matter with the City. Analytical procedures We will utilize analytical review procedures throughout our audit of the City. During the interim phase of our audit, we will compare current and prior year unadjusted balances to determine areas that may need additional analysis; we will also compare current year actual amounts to the City's annual budget. During the final phase of our audit, we will perform procedures similar to those mentioned above as well as comparing certain financial ratios for current and prior years and conducting certain "reasonablimess" tests. Finally, after we have completed our fieldwork, we will compare current and prior year audited balances, keeping in mind expected relationships obtained from our knowledge of the City and various other entities. Understanding of intemalcontrol over financial reporting Our approach to obtaining an understanding of the City's intemal control over financial reporting will be performed in accordance with SAS 55, SAS 78, SAS 94, and SAS 99 - our un$rstafldil'lg will include Ihe Control Environment,. Risk Assessment, Control Activt'ties, Information IiIndCbmmunipation, and Ai(onitoring. Our approach is as follows: Control Environment Through inquiry of the City's personnel prompted by questionnaires and personal knowledge and review of the minutes of the City council meetings; we will obtain an understanding of management's and the City council's attitudes, awareness and actions concerning the control environment, focusing on the substance of the controls rather than their form. Risk Assessment. Again, through inquiry of the City's personnel and the use of questionnaires we will obtain sufficient knowledge of the City's risk assessment process to understand how management considers risks relevant to financial reporting objectives and. decides about actions 10 address those risks. This will include understanding how management . identifies risks, estimates the significance of the risks, assesses the likelihood. of their occurrence, and relates them to financial reporting. -14- . . CfIY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARlMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Specific Audit Approach (continued) Control Activities. Certain control procedures will be documented during our analysis of the control environment and the accounting system. However, many specific control procedures will still need to be documented that will focus primarily on the City's major transaction cycles. As mentioned above, we will test the City's control procedures on which we intend to rely for safeguarding . assets from unauthorized use or disposition and detecting/preventing unauthorized transactions. Any flow charts. organizational charts and any other manuals, programs and financial and management information systems will be analyzed during this process. \ Information and Communication. Again, through inquiry of the City's personnel we will identify the major types of transactions engaged in by the City's. Next, we will become familiar with the treatment of those transactions, including how the transactions are initialed, the related accounting records and the manner of processing the transactions. Finally: we will obtain an understanding of the City's financial reporting process used to prepare financial reports, including the approaches used to make accounting estimates and disclosures. Monitoring. With the use of questionnaires we will obtain sufficient knowledge of the major types of activities the City uses to monitor internal control over financial reporting. We will also determine how those activities are used to initiate corrective actions. Approach in determining laws and regulations As governmental auditors, we realize the importance of laws and regulations in planning an audit of a local government agency. As part of our audit process, our audit team will obtain an understanding of the laws that will have a direct and material effect on the City's financial statements. In determining which laws and regulations are applicable to the City's financial statement audit; we will consult the following sources: . AICPA Audit and Accounting Guide, Audits of State and Local Governments . The Di.v!sionof Local GqvefTll11ent Fi~~1 Affair$ Minimum Audit Requiremellts .U,S.Govemtllent Aceouflial1lilityOffiee's Government Auditin.g $tal1011ms(flIe Yellow Book), 2003Revfsion . . Applicable contractslgrants of the City of San Bernardino . The Single Audit Act Amendments of 1996 . Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Govemments and Non-Profit Organizations . OMS Circular A-8?, Cost principles forState and Local Governments . OMS's Circular A-133, Compliance Supplement . California Health and Safety Code . Guidelines for Compliance Audits of California Redevelopment Agencies After consulting the applicable sources, we will design our audit to provide reasonable assurance of detecting material instances of noncompliance. -15- em OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES . Specific Audit Approach (continued) Approach in drawing samples for compliance testing Our approach to be taken in drawing audit samples for purposes of tests of compliance will depend on the number of transactions, the amounts of financial assistance provided (as applicable) and the City~s internal controls over the respective programs. We will select samples that will provide sufficient evidence of the City compliance with. the laws and regulations that will have a material effect on compliance with laws and regulatiOns. t -16- CITY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Resumes of Key Engagement Personnel terry P. Shea, Audit Partner Certified Public Accountant Education aach~lor of Arts degree from California State University, Fullerton Certified Public Accountant - State of California Related Professional Experience Governmental agencies that Mr. Shea has served include the following ("includes redevelopment agency): City of Chino" City of Grand Terrace" City of Twentynine Palms" City of Corona" City of Norco" Cityof Indio" City of Indian Wells" City of Cali mesa City of Fontana" City ofLoma Linda" City of Palm Desert" City of San Jacinto" City of Riverside City of San Bernardino City of San Bernardino EDA San Bernardino County Special Districts Terry served as the Interim Finance Director for the City of Perris from July 1998 to October 2001 where he was instrumental in turning a $2.3 million general fund deficit into a $3.1 million surplus. He currently serves as the Contract Finance Director for a city in Riverside County. Continuing Professional Education Mr. Shea has comp1el~!lPprbilmately.OO hours of conlinuingprofessj()llal f;l\luca~OIlcoursesin the past three years of which the folloWing . select GO\Jrses are relevant to this engagement: . American Institute of Certified Public Accountants, National Governmental and Not-for-Prom Training Program . Single Audits of State and Local Governments . American Institute of Certified Public Accountants, Yellow Book Governmental Auditing Standards \ Professional Affiliations Mr. Shea is a member of the following professional organizations: . American Institute of Certified Public Accountants (AICPA) . California Society of Certified Public Accountants (CSCPA) . Government Finance OffICers Association (GFOA) . California Society of Municipal Finance Officers (CSMFO) -17- CITY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Resumes of Key Engagement Personnel (continued) Robert Memory, Engagement Quality Control Partner Certified Public Accountant Professional Experience Mr. Memory has over thirty.four years of experience in public accounting having joined the firm of Rogers, ' Anderson, Malady & Scott. LLP in 1972. He is currenUy the partner in charge of the quality control reviews of all finan<;ial statements that are compiled, reviewed and audited by our firm. He is also in charge of planning the firm's continuing education programs and evaluating the educational requirements of the professional accounting staff. ' Education Bachelor of Science degree from Califomia State Polytechnic College Certified Public Accountant - State of California Related Professional Experience Governmental agencies that Mr. Memory has served inciude the following (.includes redevelopment agency): City of Calimesa City of Grand Terrace. City of Norco. West Valley Water District Creslline Lake Arrowhead Water Agency Creslline Village Water District East Valley Water District San Bernardino Public Financing Authority San Bernardino County Special Districts Continuing Professional Education City of San Jacinto. City of Twentynine Palms. City of San Bernardino Mojave Water Agency Running Springs Water District Santa Ana Watershed Project Authority Bighorn-Desert View Water Agency San Gorgonio Pass Water Agency Water Facilities Authority Mr. Memory has completed over 96 hours of conlinuing professional' education courses 'over the past three years of which'the following select courses are relevant to this engagement: . American Institute of Certified Public Accountants, Governmental Auditing Skills . American Institute of Certified Public Accountants, New Financial Accounting Standards . American Institute of Certified Public Accountants, Yellow Book Standards: 2003 revision Professional Affiliations Mr. Memory is a member of the following organizations: . American Institute of Certified Public Accountants (AI CPA) . California Society of Certified Public Accountants (CSCPA) -18- CITY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT . AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES , , Resumes of Key Engagement Personnel (continued) Scott W. Manno, Audit Manager . Certified PUl)/ic Accountant Professional Experience Mr. Manno began his career with Thomas, Bigbie and Smith in 1995. He spent six years with the firm primarily working on audits of municipalities, special districts and redevelopment agencies as well as various. non-profit organiZations.. He joined Rogers, Anderson, Malady & Scott, llP in July 2001. . . . . . Education Bachelor of Science. degree from California State University, San Bernardino in 1996. Certified Public Accountant - State of California Related Professional Experience Govemmental agencies that Mr. Manno has served include the following ('includes redevelopment agency): City of Blythe' City of Grand Terrace' City of Twentynine Palms' City of Canyon lake Town of Yucca Valley' City of Norco' City of Banning" City of Galt Goleta Sanitary District Elsinore Valley Municipal Water District City of San Jacinto' City of lake Elsinore" lake Elsinore Public Financing Authority City of Perris' Perris Public Financing Authority City of Ontario' City of Isleton" City of Calimesa Ventura Regional Sanitation District Riverside County Economic Agency Continuing Professional Education Mr. Manno hascolflpleted over 112 hours of continuing professional education courses over the past threeYe'!lfS of Wbi(Jfi lhe fGnawing select courses are teleVal1t to lhis engag/mient: . Anieric8h Institute of Certified Public Accountants, Governmental Accounting arld Auditing Update .. Association of Government Accountants, Governmental Accounting, Financial Reporting and Budgeting . . Government Finance Officers Association, Advanced Governmental Accounting Professional Affiliations Mr. Manno is a member of the following organizations: . American Institute of Certified Public Accountants (AICPA) . California Society of Certified Public Accountants (CSCPA) . Association of Government Accountants (AGA) . Government Finance Officers Association (GFOA) . California Society of Municipal Finance Officers (CSMFO) -19- CITY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Resumes of Key Engagement Personnel (continued) Brad A. Welebir, Senior Accountant Certified public Accountant Professional Experience Mr. Welebir joined Rogers, Anderson, Malady & Scott, lLP in January 2004. He works primarily on audits of governmental agencies, small to mid-sized businesses, and non-profit organizations. Prior to joining our firm, he began his career with. Sam's Club where he was the operations manager. He then worked .for . La Sierra Academy as anaccountanl. Education Masters of Business Administration - Accounting Emphasis from California State University, Fullerton in June 2003 Bachelor of Arts in Business Administration from La Sierra University in 1996 Certified Public Accountant- State of California Related Professional Experience Governmental agencies that Brad has served include the following: City of San Jacinto San Bernardino County Special Districts Creslline Village Water District Lake Elsinore & San Jacinto Watersheds Authority Rossmoor Community Services District Running Springs Water District Santa Ana Watershed Project Authority West Valley Water District Continuing Professional Education Mr. Wel~ir has completed olter 112. hours of continuing professional education courses over the past lhree years ofwtlich the (ollOWing select courses are relevant tolhis engagemeni: . . CalfforniaSociety of CPAs E<jucation Foundation, Yellow Book: Government Accounting and Auditing Update . California Society of CPAs Education Foundation, GASB 34 . California Society of CPAs Education Foundation, Yellow Book: Governrnent Auditing Standards, Applying A-133 to Governmental Organizations . California Society of CPAs Educalion Foundation, GASB 34: Basic Financial Statements for State and Local Governments and Governmental Auditing Skifls Professional Affiliations Mr. Welebir is a member of the following professional organizations: . American Institute of Certified Public Accountants (AICPA) . California Society of Certified Public Accountants (CSCPA) -20- CITY OF SAN BERNARDINO, ECONOMIC DEVELOPMENT AGENCY AND MUNICIPAL WATER DEPARTMENT PROPOSAL FOR PROFESSIONAL AUDITING SERVICES Resumes of Key Engagement Personnel (continued) Anastasia P. Cortes, Senior Accountant Professional Experience Ms. Cortes began her career with Thomas, Bigbie and Smith in 1997. She spent four years with the firm primarily working on audits, of municipalities, special districts and redevelopment agencies' as well 'as various non-profit organizations. She joined Rogers, Anderson, Malady & Scott, llP in December 2001. . Education . ' Bachelor of Science degree from University of California, Riverside in 1996. Related Professional Experience Governmental agencies that Ms,. ,Cortes has served include the following ("includes redevelopment agency): City of Blythe' City of Grand Terrace' City of Twentynine Palms' City ofSolvang City of Norco' City of Galt' City of Escondida' City of Ontario' City of San Jacinto' City of lake Elsinore' lake Elsinore Public Financing Authority City of Perris' Perris Public Financing Authority Goleta Sanitary District City of Isleton' San Bernardino County Special Districts Continuing Professional Education Ms. Cortes has completed over 119 hours of continuing professional education courses over the past three years of which the following select courses are relevant to this engagement: . American Institute of Certified Public Accountants, Governmental Accounting and Auditing Update . Nevada Society of Certified Public Accountanl$, Fraud in the Governmental and Not-for-Profit enVironments " ,"" " ..', '.. . ',,' .. ,'. . Califoniia Society of Municipal Finance Officers, Developing Internal Control with Linilted Staff . ,California Society of Municipal Finance Officers, LatestfromGASB -21- Attachment A f'LlUNDEt.S TIMPSON GARCIAllP Lawrence S. TImpson. (PA (ISYI-!974) lcVeroc W. Garcia, CPA 11"'tJ4-19!:\')) CPAs AND CONSULTANTS PARTNERS Oennis S. Kanc$hiro. CPA Elaine lee Kaw.:Js..l..J. CPA Wjlli<1~ E. Moy, CPA August 15, 2003 CONSULTAN'[ William I. Doyle. CPA FIRM AOMlN1STIMTOR LiZ Davis To the Owners Rogers, Anderson, Malody & Scott, LLP " We have reviewed the system of quality control for the accounting and auditing practice of Rogers, Anderson, Malody & Scott, LLP (the firm) in effect for the year ended November 30, 2002. Asystem of quaiity control encompasses the firm's organizational structure and the poliCies adopted and procedures established to provide it with reasonable assurance of conforming with professional standards. The elements of quality control are described in the Statements on Quality Control Standards issued by the American Institute of Certified Public Accountants (AICP A). The design of the system and compliance with it are the responsibility of the firm. Our responsibility is to express an opinion on the design of the system, and the firm's compliance with the system based on our review. Our review was conducted in accordance with standards established by the Peer Review Board of the AICPA. In performing our review, we obtained an understanding of the system of quality control for the firm's accounting and auditing practice. In addition, we tested compliance with the firm's quality control policies and procedures to the extent we considered appropriate. These tests covered the application of the firm's policies and procedures on selected engagements. Because our review was based on selective tests, it would not necessarily disclose all weaknesses in the system. of quality control or all instances of lack of compliance with it. Because there are inherent limitations in the effectiveness of any system of quality control, departures from the system may occur and not be detected. Also, projection of any evaluation of a system of quality control tQ future periods is subject to the risk that the system of quality control may become inadequate because of chan!teliincollditions, Qr becal).Se the degree ofcompIiallCe with policies orprocedures11lay deteriorilte. In our opinion, the system of quality control for the accounting and auditing practice of RogerS, Anderson, Malody & Scott, LLP in effect for the year ended November 30, 2002, has been designed to meet the requirements of the quality control standards for an accounting and auditing practice established by the AICP A and was complied with during the year then ended to provide the firm with reasonable assurance of conforming with professional standards. '1~Ulv 8CW;tA., LLY Members of: 70 \,Vashjngtofl Street, SUite 300 Oakland, CA 91607-3705 510.832.2325 or 800.941.2727 Fax 510.465.2979 A . ~ , A v..'L'f!dwl&:No:lwurkoflnd\!'l'Colknt Firms and AICPA SEe Practice Section W\....w. timpsonga reid. Lorn Attachment B . Scope of Services " The following is our understanding of the scope of the audit for each entity, as applicable, for the year ended June 30, 2006: . We will perform a financial audit of each entity for the year ending June 30, 2006. Our audits will be performed in accordance with auditing standards generally .accepted in the . United States of America, Government Auditing Standards (2003), issued by the Comptroller General. of the United States, the provisions of Office of Management and Budget Circular A-133, Audits of State and Local Governments and Non Profit Organizations (if applicable), the Federal Single Audit Act as amended in 1996 (if applicable), the provisions of Office of Management and Budget CircularA-133, Audits of State arid Local Governments. and Non Profit Qrganizations, Article )(1118 of the California . Constitution ~ Appropriations Limit, the provisions of Guidelines for Compliance Audits of California Redevelopment Agencies, issued by California State Controllers Office and any other applicable federal, state, local or programmatic audit requirements. We will express an opinion(s) and issue reports on the fair presentation of the basic financial statements in conformity with accounting principles generally accepted in the United States of. America and any other applicable federal, state, local or programmatic audit requirements. We will also issue a Single Audit Report, if applicable, and a report on the City's internal control over financial reporting, and a report on the City's compliance with Article XI liB of the California State Constitution. We will not provide an opinion on the any combining and individual fund schedules, but will provide an "in-relationship-to. report on the schedules based on the auditing procedures applied during the audit of the basic financial statements. We will not audit the statistical section of the report. If a single audit is required, we will not audit the schedule of federal expenditures, but will provide an .in-relation-to. report on that schedule based on the auditing procedures applied during the audit of the basic financial statements. We will be responsible for performing certain limited procedures involving Management's Oisl;tission and Analysis IMOlA) and lill1y Req9ired $lJpple"mentary k'iforrnation (RSl) required' by the Govemnlel1tal Accounting Standards Board. . We will assist the City in meeting the requirements of the Government Finance Officers Association and/or the California Society of Municipal Finance Officers award programs. We will issue a separate "management letter". that includes recommendations for. improvements in internal control that are considered to be non-reportable conditions. We will also comment separately on insurance coverage, contingent liabilities, condition of records and other matters, if our opinion a report is warranted. We shall make an immediate, written report of all irregularities and illegal acts or indications of illegal acts of which we become aware of to the City council, City manager, Finance manager and the audit committee. ACP CERTIFICATES Fax: 909-886-0053 Mar 29 2006 15: 30 Attachment C ~-l'. 04 ACORD. CERTIFICATE OF LIABILITY INSURANCE - AUs~ Cooper . J?ri"", . rns AgQnay me (Lio-0546677) POBox 3280 San Bernardino CA 92413-3280 Phone:909-8B6~9861 Fax:909-BB6-2013 ~ Roaera AnderBon Maloclv & Sco\;\; 290N "II" Si:reet: St:.. 300 San B<>rnardino CA .92401 COVERAGES OPIO ..."'~ ROGER-2 03/29/06 THia CElqIR;ATE ~ ISSUED AS A MATTER OFINFORMAllON ONLY AND CON.FERS NO R1G1ffSUPONTHE CERllFCATE HOlDER. 11lJSCl;R1lFICATE DOES NOT ANEND. EXTENO OIl. A1.TEI{ THE COVERAGE AFIOROED BY lHE POI.DI!S BeLow I NI\IC , INSURERS AF~D1HG COVERAGE 1NSUlERA: 1NSI,.OlEllll; IH9URfft c: .......... INSlJAER " ~.~ .~ AU.ied IosurallOQ Q0035 ! lJEPOUaEsOF INSIJRANc:l;; usmUDDW NA~ 8EEN ISSUED TO THE tNSlUR:ED~.AeO\I1: fORltEPOUCYPaUoo 1NDtCATED. NOlWrmsT.INPtNG : NfrAEDlIR!M:Nr. Taw CJRCOMJmbN.CW Nf'( OONlJW:TOft ontER ooaaEHrwrrKAESPECTlO ~ ntS CErn'rlCATEMAY ael3Sul:OOR MAYPSfrNN. 1tE NSUWCE AFFORDED BYntEPCJUC::eS lk~ . HEREIN IS IitJBJECfTO All 'n1elBaotS. EXCLUSIOHSANDCONJI11ONS-OF St.JOi ! POUCES.~TELU1'S IiOOWN IM.YHAVE BEEN RSlUCED BY PAlO Q..AlM$. 1DA'i'E~ : ~ TYPE ()F IN$UR.ANCE POUCY-r&JMpEft ~ lJMI"JS. ~UI\IIIlJr( . . ..a< CJq:IJIVOBl<;E 11,~OO,OOO B X X COUMERCW. <lEI<aW.l.lA9UlY .l\CPBP07811a01l47 04/01/06 04/01/07 ~l&""""""1 I SOQA)OO I c1.ws """" ~0CClJR ...,.... (.'for... .....,.q 15,1)00 . .~&NNftIUR'( 11 c!00.000 GfHERALAGGIlEGAre 12 000,000 GEN'L~:n;:l.a.IITA.PPU6s~ PRODUCTS - mMPtOPAGG 12,<100,000 IPOUCYnm nLOC I ~08UIJAJUlJfY COMIHNED SINGlEUMn' I I _ .wro l&.-..o) I - I ALLOWNEDNJT03 IIOOILY ItWRV - lP'<.--.) I j 6CHEIXJlB) N.1rOS - HlRBl1JJlOS ; - BOOllYINJUR.Y I t<<lIH>WNED AUroS lP'<_ i - PROPERTY CWAA.GE , ll'w""'d<nt) I I =rUA8IJN AVTOONLY -EAACCIlaIT 1 I , _AUTO OYHffi nw. EAAlX I i IdJfO ONLY; f>GG S I _1lREUA UAIllUlT EAO<~ . 2000000 B ~~ 0 a..oIMS"""" ACPCAA7811801147 04/01/06 04/01/07 AGGREGATE . 20()0000 . I I ~= . snone I I ; WORKERS~TION ANIJ xr""";'~1 IVEil' I A ~UAiIa;fJY Wl\N1272292 04/01/06 04/01/07 4""",,~ .1 1MOQQO . .~ ~~.~ ,<j,. .(tOlt~"'{j. ~<tjllt; .. . E.L ~'$~'''9!JcfUt.!rr $;ttrll'@QO . - 1 B l'I;"opel;"ty Section ACPBP07811801147 04/01/06 04/01/07 ! ! ~Of"OPmAnoNS'lOCA.no"fS/YB1tCt...eS/EXCl.lJ$IOtISmom DYeNDORsEMEHT1SPECW.~ Contract 'Q2-807. Certho1.del;" and ita officers, ....p1.oyE!l>s , agen l:s " '\"olunteers ax:e add'l insd as r&spgcts qan'l !.i,lab per 1'86003, end't to be ! ieeued di.r9ctJ.y fl;"OJll carrier; Work Comp Wai.veJ;. to be is;lued di.r9ctJ.y fl;"OJll ! carrier . "30 clay N 0 C except 10 clay for non-payment of prellliUlll. ( i' . CANca.LAllON SHOUlDN<< ofnE ABOVE'0ESCRf8EDPC)tJCIES QI; c.....~ I W' I'EFDReime E.XPJRA: . , DATE~.1K,ISS:UINGtHSURQlWU~VORroMAR. *30 DAYSWR,ItttN -, INOTICS. 10 ~ CERTlRCAn HOUJe.f( NAMmTQ nre lEFT. BUT F.ut...UAE 10 00 so QWJ. I IWOSE NO OBUGAllON OR LJABK.11T Of AJ('f KiND UPON THE ~ fTt\ AGENTS OR. _AllYES. . CElUlACATE HOLDER COONSB1 Tha County of Ban ~no c/o Insurance CoapJ.iance Insurance "Data service" POBox 12010-CB Hemet CA 92546-B010 ACORD 2S (2001/08) e ACORl> CORPORAnOH 1988 PI-ACT-l (11-97) . Philadelphia Insurance Companies One BlilaPlaza; Suite 100, Bala Cynwyd. Pennsylvania 19004 ACCOUNTANTS PROFESSIONAL LIABILITY INSURANCE IllI Philadelphia Indemnity Insurance. Company o Philadelphia Insurance COmpany . DECLARATIONS Policy Number: PHSD170610 NOTICE: EXCEPT TO SUCH EXTENT AS MAY OTHERWISE BE PROVIDED HEREIN, THIS POLICY IS WRITTEN ON A CLAIMS MADE BASIS AND COVERS ONLY THOSE CLAIMS FIRST MADE AGAINST THE INSURED DURING THE POLICY PERIOD AND REPORTED IN WRITING TOTHE INSURER PURSUANT TO THE TERMS HEREIN. THE LIMIT OF LIABILITY AVAILABLE TO PAY JUDGMENTS OR SETTLEMENTS SHALL BE REDUCED BY AMOUNTS INCURRED AS DEFENSE COSTS. PLEASE READ CAREFULLY. lIeml. NAMED INSURED and Address: Rogers, Anderson, Malody & Scott, lLP 290 N 0 St Ste 300 San Bernardino, CA 92401-1709 lIem2. limits or liability: (A) $ 2,000,000 each CLAIM, including CLAIMS EXPENSE (B) $ 4,000,000 Annual Aggregate including CLAIMS EXPENSE lIem3. Deductible: $ 35,000 Deductible per CLAIM Item 4. POLICY PERIOD: From: 01{01{2006 To: 01{01{2007 (12:01 A.M. local time at the address shown in Item 1.) lIemS. Premium: $ 27,546 lIem6. Retroactive O<lle: FULl PRIOR ACTS Endorsements: Per SCIleduleAitached In Witness whereor, ll1e Insurer issuing this Policy has caused this Policy to be signed by its authorized officers, but it shall not be valid unless also signed by the duly authorized representative of the Insuree CJ8~. Authorized Representative Countersignature Countersignature Date Page 1 or 1 Preferred Em~ INS 0 R A NC E COM P A NT Workers Compensation and Employers liability Insurance Policy Infonnation Page AStockln_~ Co<porate Offices: San Diego . CA eamerCOOe: 10900 Policy Number: WKN 127229-2 Renewalof: WKN 127229-1 1. The Insured Name & Mailing Address: ROGERS. ANDERSON. MAlODY & SCOTT, LL P 290 NORTH 0 STREET Type of Entity: limited liability Partnershi SUITE 300 SAN BERNARDINO, CA 92401 . . Other Insured NamesIWorkplaces not shown above: See attached schedule" 2. Policy Period: This policy is effective from 04/01/06 to 04/01/07 12:01 A.M. FEIN: 95-2662063 3. Coverage: A. Workers Compensation Insurance: Part One on the policy applies to Workers Compensation Law of the state{s) listed here: California B. Employers liability Insurance: Part Two of the policy applies to work in each state listed in Item 3. The limits of our liability under Part Two are: Bodily Injury by Accident Bodily Injury by Disease Bodily Injury by Disease $1,000,000 $ 1,000,000 $ 1,000,000 each accident policy limit each employee. C. Other States Insurance: Part Three of the policy applies to the states, if any, listed here: NONE D. Endorsements and schedules included with this policy: PEI101,PEll02, PEll07, PEll11, PEI119, PEI126, PEI127, PE1128. PEI129, PEI201, WC000420, PEI116 4. Premium: The pr~i!Jm for thispelicy lNillbe determined by ourmanuals(jf J1.lle~, cl<l~sifil:<lti()flS, rales and . ratingptahs. AllinfOfflla~~nr~!Ji(Cl(\betowissuQj~to veriflcation~nd~Mnll(iby audit See Classification and Rating Schedule Minimum Premium: $ 950 BHliOlJ: Direct Premium Adjustment Period: Annual with 4 mo. check Total Estimated Policy Premium: $ 5,856 Deposit Premium: $ 879 Producer: AUSTIN COOPER & PRICE INSURANCE AGENCY 2131 ELKS DRIVE, SUITE 200 SAN BERNARDINO. CA 92413 (909) 886 - 9861 ~~ X?~ Issue Date: 02123/06 at SAN DIEGO, CA Authorized Representative PEl 100 O<lJOtl98 Attachment D Audit. Request List A) Permanent file requests Please prepare copies. for the Audit permanent files, of the following information . necessary for our testing. 1) Roster of administration and finance employees. 2) Roster of City council. 3) Current chart of accounts. 4) Authorized signature eards for all bank accounts. 5) Front pages of insurance. policieslbonding arrangements entered or renewed and evidence of renewal if an open-end policy. 6) Debt agreements (bond issues, lease agreements, loans or notes payable. ete). including agreements between the City and any component units. 7) Revenue agreements (franchise, ete). 8). Personnel polices and procedures manuals. 9) Accounting policies and procedures (eash receipts. disbursements, ete). 10) Grant agreements with Federal. State and/or loealagencies. 11) Contracts for deposit of monies for institutions with which the City invested in during tile year under audit. B) Interim audit requests 1) Access to computer generated financial reports through the end of the month preceding our interim testing. 2) . Access to payroll related files and reports. 3) Access to invoices, check registers and bank statements, etc. 4) Access to cash receipts and supporting reports. 5) Invoices and purchase orders for the purchase of checks or cash receipts. 6) . Copy of annually adopted investment policy, induding treasurer's reports from July 1 of the year under audit through the month proceeding our interim. testing. 7) Bank reconciliation(s) through the end of the month preceding our interim testing. 8) Interest apportionment schedule(s). 9) Preliminary schedule of federal financial assistance and documentation (FEMA, CDBG, STP, CMAQ, etc.). / 10) Proof of publication relative to notice of the previous year's audit reports availability if subject to the Single Audit Act. 11) State and county remittance advices and all schedules prepared relative to the receipt and apportionment of taxes and intergovemmental revenues. 12) Trust fund activity summaries for bond funds maintained by trustee(s). 13) Schedule of new funds established or dosed during the year with appropriate authorization or explanation. 14) Certified Franchise Statements and related remittances. 15) Additional audIt reports received during. the atMit Year, which 'Nflre prepared by other :auditors based on their audit of any City fund or activity, induding any audits conduded by the State COntroller's Office or the U.S. Government Accountability Office, if any (i.e. Gas Tax). 16) Copy of annual budget, induding supplemental budget requests for the year with the date they were approved by council indicated, if applicable. ~.. C) Year-end audit requests 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) 15) 1) Adjusted trial balances and cumulative detail ledgers (revenue and expense reports, etc). 2) Listing of bank and investment balances at 06-30, including year-end asset statements for bond funds held by trustee, with addresses, account numbers and the name of a .contact person as soon as available (please mail these to us if we are not scheduled to be there within a short time after this becomes available). Copies of bank statements for 6-30 and 7-31. Year-i:md summary reconciliation of cash and investments to the general ledger, including a schedule of cash by fund. Year-end reconcilialion(s) of individual bank accounts. . . Schedule of activity for cash with fiscal agent(s). PERS Circular Letter showing latest PERS actuarial valuation for miscellaneous and safety members. PERS and social security payment listing that indicates the amounts paid. by the City and the amount paid by the employees. Schedule of total wages and wages subject to PERS. Resolution adopting the City's appropriation limit, as required by Government Code Section 7910, for the year subsequent to the audit year and workpapers supporting the computation of both the appropriation limit and appropriations subject to limitation. Also, proof of publication that documentation was available for inspection 15 days before adoption of the resolution. The remaining treasurer's reports for the year. Detailed schedule of compensated absences at 6-30 with totals for each employee (Le. Sic/<, vacation, CQmp. lime). Detailed schedUle 6f reserved for encumbrances, including appropriate fund summary, to support the general ledger balances at year-end. Copies of payroll tax returns filed (i.e. 941s) during the year (3ro and 4"' quarters 20XX; 1st and 2nd quarters 20XX). . Detailed schedules, including appropriate fund summaries, supporting the year- end general ledger balances of all receivable balances. Detailed schedules, including appropriate fund summaries, supporting the year- end general ledger balance for all liability balances. , C) 19) 20) 21) 22) 23) 24) 25) 26) 27) 28) 29) , Year-end audit requests - continued 16) Budget worksheets showing original budget; budget. adjustments and ending budget. 17) Schedule of year-end general ledger balances. prepared in a matrix fonnat, of the following: a) Due to/from other funds, b)lnterfund advances receivable/payable, c) Transfers in/out (budgeted arid actual), 18) Detailed schedules. of additions and deletions of capital assets for governmental and business-type activities for the audit year. Showinglinduding assets sold during the year and any depreciation expense. Also, list any assets still held by.the City but dedared as surplus property. . Schedule of changes in long-term obligations for governmental and business-type activities fOr the audit year. . Detailed schedule of capital leases payable at year-end. Number of retired employees who received post retirement benefits during the year and the amount of such benefits. Interest apportionment schedule(s) for the audit year. Schedule of year,end continuing appropriations and related council approval. Schedule of changes in undesignated fund balances for the year under audit. A brief description of any contingencies at year-end. Schedule of self-insurer's annual report indicating the estimated future liability of the City. Workers' compensation and liability loss reserve reports as of 06-30. Sch~uleofevents s\1bSequent to year'l'lnd. Explanations of the folloWing for each applicable fund: . .. a) Expenditures in excess of appropriations for the audit year. b) Deficit fund balances/retained eamings at year-end. 30) Annual budget for the year subsequent to the audit year. 31) Any other financial-related information which you think may be of importance to the audit process. I PRICI;1 FORM (to be submitted in a sealed envelope separate from proposal documents) , I i t APPENDIX B REQUEST FOR PROPOSAl: RFP F-:07-:02 DESCRIPTION OF WORK: Audit Services OFFER'S NAME/ADDRESS: Rog(lrs,Anderson, Malodyand $cqtt, LLP 290 North"D" Street, Suite 300 San Bernardino, CA 92401 _._-~ NAME OF AUTHORIZED REPRESENTATIVE: Terry P. Shea, partner y~ jJ 4l-- SIGNATURE: TELEPHONE NUMBER: 909:889.0871 FAX NUMBER: 909.889.5361 Please provide detailed Firm Fixed Price cost information in the spaces provided below and any other incidental or additional costs required to complete the Technical Specification requirements. Item Description 1) Audit Services - City of San Bernardino U/M aty Unit Cost ea 1 $ 55,200 ea 1 35,000 ea 1 41,100 3.00% 3,9P,% 3.00% 2) Audit Services - Economic Development Agency 3) Audit Services - Municipal Water Department 4) Percentage Increase for Option Year One (1) 5) PercentagelnCfease for Option Year TWQ (2) 6) . Percentage Increase for Option Year Three (3) APPENDIX C April 13, 2006 (Newspaper Advertisement) SUBJECT: REQUEST FOR PROPOSALS (RFPI F"()6-21 The City of San Bernardino (City) invites proposals from qualified vendors for Audit Services for the City, the Economic Development Agency and the Municipal Water Department for fiscal year ending June 30, 2006 and subsequent years. Parties interested in obtaining a copy of this RFP F.06.21 may do so via Internet at: htto:llwww.sbcitv.orq . Under "Businesses> Request for Bids> City Finance - or by faxing their request to (909) 384-5043, attention Sheila A. Futch. Copies of the RFP may also be obtained in person at City Hall, 300 N. "0" St., 4th floor, San Bernardino, CA 92418 - (909) 384-5085. Closing Date: Proposals must be submitted at or before 3:00 PM, Thursday, May 4, 2006 at the address listed above. Issuance of this RFP and/or receipt of proposals does not commit City to award a contract. Sincerely, Sheila A. Futch Purchasing ~ivision INSTRUCfIONS TO OFFERORS A. Examination of Pro Dosa I Documents I. By submitting a proposal, the Offeror represents that it has thoroughly examined and become familiar with the work required under this RFP and that it is capable of performing quality work to achieve the City's objectives. 2. The City reserves the right to remove from its mailing list for future RFPs, for an undetermined period of time, the name of any Offeror for failure to accept a contract, failure to respond to two (2) consecutive RFPs and/or unsatisfactory performance. Please note that a "No Offer" is considered a response. B. Al!enda Any City changes to the requirements will be made by written addendum to this RFP. Any written addenda issued pertaining to this RFP shall be incorporated into the terms and conditions of any resulting Agreement. The City will not be bound to any modifications to or deviations from the requirements set forth in this RFP as the result of oral instruction. C. Clarifications 1. Examination of Documents Should an Offeror require clarifications of this RFP, the Offeror shall notify the City in writing in accordance with Section D.2 .below. Should it be found that the point in question is not clearly and fully set forth, the City will issue a written addendum clarifying the matter which will be sent to all persons who have requested the RFP. 2. SubmittiineRequests a. All questions, clarifications or comments must be received by the City no later than April 20, 2006, and be addressed as follows: RFP Audit Services City of San Bernardino 300 North "D" Street 4th floor, Attn: Sheila A. Futch San Bernardino, CA 92418 b. The exterior envelope of all .requests for clarifications, questions and comments must be clearly labeled, "Not an Offer." The City is not responsible for failure to respond to a request that has not been labeled as such. The City will also accept questions sent by facsimile machines; however, all faxed questions mnst be received by the City no later than the specified above. Send facsimile transmissions to (909) 384-5043, attention Sheila A. Futch. c. Inquiries received after April 20, 2006 will not be accepted. 3. City Responses Responses from the City will be communicated no later than April 27, 2006. D. Submission of Proposals 1. Date and Time All proposals are to be received by 3:00 p.m., PST, May 4, 2006. Proposals received after 3:00 p.m., PST, May 4, 2006, will be rejected by the City as non- responsive. 2. Address Proposals shall be addressed as follows: RFP Audit Services City of San Bernardino 300 N. "D" Street 4th floor: Attn: Sheila A. Futch San Bernardino, CA 92418. Proposals may be delivered in person to the Finance Department, 4th floor of the above address. 3. Identification of Proposals Offeror shall submit a proposal package consisting of: a) asigned original and four (4) copies ofits proposal, and b) a completed and signed Price form in a sealed envelope, separate from the proposals, marked "Price Form". The proposal package shall be addressed as shown above, bearing the Offeror's name and address and clearly marked as follows: "RFP Audit Services" 4. Acceptance of Proposals a. The City reserves the right to accept or reject any and all proposals, or any item or part thereof, or to waive any informalities or irregularities in proposals. b. The City reserves the right to withdraw this RFP at any time without prior notice and the City makes no representations that any contract will be awarded to any Offeror responding to this RFP. c. The City reserves the right to postpone proposal opening for its own convenience. CITY OF SAN BERNARDINO / ECONOMIC DEVELOPMENT AGENCY REQUEST FOR PROPOSAL FOR AUDIT SERVICES futroduction The City of San Bernardino, the Economic Development Agency, (Redevelopment Agency) and the City Water Department are requesting proposals for audit services for the f"lScal year ending June 30, 2006. Proposals for multi-year agreements extending past FY 2006 are desired and will be considered. The City of San Bernardino is a charter city operating under a Mayor/Council form of Government. The City offers a full range of public services including police and fire protection, street and landscape maintenance, refuse collection, infrastructure maintenance and community and recreational programs as well as water supply and treatment services provided through a special district. For FY 2005/06, the City has adopted an operating budget of $178,800.00 for governmental funds. The City has approximately 1179 full-time employees, and may employ up to 500 additional part-time employees on a seasonal basis. Provided in Attachment I, is a listing of the City's revenues and expenditures by source and function for FY 2004/05, exclusive of special assessment districts. Comparable financial data for San Bernardino Economic Development Agency is provided in Attachment II and the City Water Department in Attachment m. The City currently maintains over 60 funds, including the General Fund, 17 special revenue funds, 6 debt service funds, 16 capital projects funds, 9 Agency funds, I enterprise fund and 9 internal service funds. The Economic Development Agency, for purposes of this audit, is comprised of and administers the financial functions of the Redevelopment Agency, LowIModerate 20% Housing Set-aside, Community Development Block Grant Program, HOME Program, Emergency Shelter Program, Neighborhood fuitiative Program and special revenue programs. The Agency has 18 employees, has a budget of approximately $60,000,000, and maintains, separately from the City of San Bernardino's Finance Department, the financial data for eleven (ll) Redevelopment Project Areas, debt service funds, six (6) special revenue programs, the LowIModerate 20% Housing Set-aside program, and the federal programs as listed above. The Municipal Water Department of the City of San Bernardino operates two enterprise funds: . the Water Utility Enterprise fund and the Sewer Utility Enterprise Fund. Operating revenues for the two funds are estimated to be $24 million and $22 million, respectiveiy. The Municipal Water Department has three blended component units: the West End Water Development, Treatment and Conservation Joint Powers Authority, The San Bernardino Public Safety anthority and the Colton/San Bernardino Regional Tertiary Treatment and Water Reclamation Authority. The financial Statements of the Municipal Water Department are presented in a two-year comparative format with supplementary information including detailed operating schedules. The Municipal Water Department has approximately 200 full-time employees. City. Agency and Water Financial SyStems All of the City's and the Agency's major accounting functions (General Ledger, Budget, Cash Receipting, Accounts Payable, Payroll, Utility Billing, Fixed Assets) are computerized using an on-line system with most applications interactive with the General Ledger. The following is a summary of the City's, Water's and the Agency's significant accounting policies: . Bases of Accounting - The accounting bases used by the City of San Bernardino and the Agency for its funds and account groups conform to generally accepted accounting principles for governmental units. Accordingly, the governmental and fiduciary fund types use the modified accrual basis of accounting, i.e., revenues are recognized in the accounting period in which they become available and measurable and expenditures are recognized in the accounting period in which the fund liability is incurred., if measurable, except for unmatured interest on special assessment bonds which is recognized when due. Revenue sources that have been treated as susceptible to accrual under the modified accrual basis are property taxes, interest on investments, rents, special assessments and grants. All enterprise funds utilize the accrual basis of accounting. . Budgets - Separate budgets are adopted annually by the Mayor and Common Council and the Community Development Commission. All appropriations lapse at year-end. The Mayor and Common Council and the Community Development Commission have the legal authority to amend the budget at any time during the fiscal year. Administrative adjustments to the City's budget are permitted ujJ to $25,000 as long as those changes will not affect budgeted year-end fund balances. Expenditure and budgeting detail is maintained by the Agency for each Redevelopment Project Area, special fund or program and federal programs at the line item level. Expenditure and budgeting detail is maintained by the City for each department by functional area at the line item level; however, the level for which expenditures are not to exceed budget appropriations is at the departmental level within these basic classifications:. personnel expenditures, including benefits; expenditures for materials, supplies and other; and expenditures for capital items. . Enterprise Fund ProperlY - Enterprise Fund property is recorded at cost and is depreciated on the straight-line method over the estimated useful lives of the assets. . General Fixed Assets - General fixed assets purchased are recorded as expenditures in the applicable fund at time of purchase. Such assets are capitalized at cost in the General Fixed Assets Account Group. Certain improvements such as roads, bridges, sidewalks, and other similar assets are not included in the general fixed assets. Gifts or contributions are recorded at fair value at the time received. The City and the Agency have established separate formal fixed asset system for tracking all activity relating to fixed assets. . GASB 34 Infrastructure - The City is in the process of selecting a consultant to develop an inventory and provide valuation for infrastructure assets as required by GASB 34. It is anticipated this work wil1 be complete for inclusion in the June 30, 2006 financial statements. Services associated with the initial review of this valuation and its inclusion in the financial statements should be included as part of the proposed audit fee for the 2006 year. Work Scope The selected audit firm shall make an examination sufficient to express an opinion on the component statement of the City, Economic Development Agency and the Municipal Water. If the opinion on each component unit financial statement is other than unqualified, or if the auditor is unable to form an opinion or declines to express an opinion, the result and reason for the result should be made known as soon as possible. In addition to reports on financial statements, the audit firm(s) should submit separately to the related component unit, its observations resulting from testing of internal controls necessary as required by generally accepted auditing standards. If inadequacies in internal controls are encountered, the audit firm should recommend corrections. In addition, the audit firm(s) shall comment separately on insurance coverage, contingent liabilities, condition of records and other matters, in their opinion, warrant a report to management ofthe component unit. Single Audit As each of the component units is subject to Single Audit requirements, each audit is to be conducted in accordance with general1y accepted auditing standards, general1y accepted government auditing standards and the provisions of OMB A-B3, "Audits of State and local Governments and Non-Profit Organizations". The Single Audit Report wil1 include the fol1owing: 1. Independent auditor's report on compliance and on internal control over financial reporting based on an audit of component unit financial statements performed in accordance with government auditing standards. 2. Independent auditor' s report on compliance .with requirements applicable to each major program, internal control over compliance in accordance government auditing standards. 3. Schedule of expenditures of federal awards. 4. Notes to schedule of expenditure of federal awards. 5. Schedule of findings and questioned costs. 6. Status of prior year fmdings. ColIlDrehensive Annual Financial Report In addition to the separate financial statements of each of the three component units, a comprehensive annual financial report, based on the separate reports, will need to be prepared by the firm auditing the City component unit financial statement. In the Comprehensive Report, the funds of the Economic Development Agency are blended with the city and the enterprise funds of the Municipal Water Department are separately stated as a component unit. The City has received the Certificate of Achievement Award from the GFOA for its Comprehensive Report for fiscal year ended June 30,2004. Proposal Content The audit firm's proposal must contain the following information: . Firm's philosophy regarding the relationship between audit and client. . Experience of the firm in performing audits of local governmental general purpose financial statements, as well as any other related experience. This section should also include a listing of references that may be contacted regarding the firm's experience. . Identification of staff capabilities along with resumes of key personnel who will be assigned to the audit. . Proposed time frames required to complete the various phases of the audit. . Projected man-hours required to complete the audit along with hourly billing rates for the various levels of staff that will be assigned to the audit. . Experience in relation to redevelopment and federal program audit activities. · Projected man.holHS required of the City and of the Agency to familiarize to the firm with the City's and the Agency's financialsystems. . Listing of the services, data, and information to be furnished by the City and the Agency and by the firm. . Maximum fee to be charged for audit services listing separately fees for the City, Agency and Water Department. The City, Agency and the Water Department will enter into separate agreements with the qualified and approved firm. The City, Agency and the Water Department reserve the right to enter into an agreement with the same firm or with separate firms for the respective audits. In addition, it is requested that the firm provide the City with alternative maximum fees based on a one-year, two-year, three-year, or five-year agreement. The fees should be broken down in terms of identifying the City (including CAFR), the Agency and the Water Department costs. Pronosal Evaluation and Selection Proposals must be sealed and submitted before May 4, 2006. Although proposals may be opened and reviewed prior to the closing date, proposals will not be disclosed to competing firms or to the public until after the award of the contract. Proposals will be evaluated by an Audit Review Conunittee based on the following criteria. . Understanding of Work Scope . Demonstrated professional skills and credentials of the staff to be assigned to the audit. . Related experience and references . QualityoftheRFP . Approach to performing the audit . Proposed maximum fee The award of the contract will not be based on the lowest maximum fee proposed, but on a combination of all of the above factors. Based on an evaluation of the proposals using the above criteria, it is anticipated that the top candidates will be scheduled for an interview with the Review Conunittee. The committees' final recommendation will then be submitted to the City Council, Commission, and the Water Board, who will make thefinalapprovalforthe award of the oontract{s). It is anticipated that the Review Committee's recommendation will be provided to the Mayor and City Council, Conununity Development Commission and Water Board at their June 5, 2006 meeting. City, Agency and/or the Water Department reserve the right to reject any and all proposals submitted and to request additional information from all proposers. All proposals submitted become the property of the City of San Bernardino. I PRICE FORM (to be submitted in a sealed envelope separate from proposal documents) REQUEST FOR PROPOSALS: DESCRIPTION OF WORK: RFP Audit SelVices OFFEROR'S NAME/ADDRESS: NAME.OF AUTHORIZED REPRESENTATIVE SIGNATURE TELEPHONE NO. FAX NUMBER NO. . Please provide detailed Firm Fixed Price cost information in the spaces provided below, and any other incidental or additional costs required to complete the Teclmical Specification requirements. Item Description UIM Otv. Unit cost / 1) Audit SelVices - City of San Bernardino ea I $ 2) Audit SelVices - Economic Development Agency ea I $ 3) Audit SelVices - Municipal Water Department ea I $ 4) Other Cost ea 1 $ In signing this proposal, Offeror warrants that all certifications and documents requested herein are attached and properly completed and signed. From time to time, the City may issue one or more addenda to this RFP. Below, please indicate all Addenda to this RFP received by your firm, and the date said Addenda waslwere received. Verification of Addenda Received Received on: Received on: Addenda No: Addenda No: AUTHORIZED SIGNATURE: PRINT SIGNER'S NAME AND TITLE: DATE SIGNED: COMPANY NAME & ADDRESS: PHONE: FAX: IF NOT SUBMITTING AN OFFER. PLEASE STATE REASON(S) BELOW: NON - COLLUSION AFFIDAVIT TO: THE COMMON COUNCIL, CITY OF SAN BERNARDINO In accordance with Title 23, United States Code, Section 112, the undersigned hereby states, under penalty of peIjury: That he/she has not, either directly or indirectly, entered into any agreement, participated in any collusion, or otherwise taken action in restraint of free competitive bidding in connection with RFP Audit Services. Business Name Business Address Signature of offeror X Place of Residence Subscribed and sworn before me this day of ,2006. Notary Public in and for the County of , State of California. My commission expires ,20_ SECTION V. GENERAL SPECIFICATIONS ~EaCh proposal shall be in accordance with Request for Proposals (RFP) Number F-06-19. All specifications are mininmm. Contractors are expected to meet or exceed these specifications as written. Contractor shall attach to proposal a complete detailed itemization and explanation for each and every deviation or variation from the RFP specifications and requirements. Conditional proposals, or those that take exception to the RFP specifications and requirements, may be considered non-responsive and may be rejected. 2. The City reserves the right to accept or reject any and all proposals and to award a contract to the Contractor who best meets our requirements. This may include waiver of minor irregularities or discrepancies. or nonconformity to specifications in appropriate circumstances. Purchase shall be on a best buy basis after due consideration of all relevant factors, including but not limited to, workmanship, accessibility of parts and service, known evidence ofmannfacturer's or Contractor's responsibility and record, durability and known operational record of product and suitability as well as conformity to City needs and requirements. In all cases the best interest of the City shall prevail in all contract awards. 3. The City of San Bernardino reserves the right to purchase more or less than the quantities spe;;ified at unit prices offered. 4. Proposals shall be firm offers, subje;;t to acceptance or rejection within 120 days of the opening thereof. 5. Regnlardealer. No Contractor shall be acceptable who is not a reputable manufacturer, dealer or provider of services of such itemq as submitted for proposal consideration. 6. All materials, workmanship and finish entering into the construction of the equipment must be of the best of these respective kinds and must conform to the character of the equipment and the service for which it is intended to be used and shall be produced by use of the current manufacturing processes. "Seconds", factory rejects, and substandard goods are not acceptable. 7. Each Contractor shall submit with his proposal a copy of the proposed product specifications, complete detailed drawings, and other descriptive matter in sufficient detail to clearly describe the equipment, materials, services and parts offered. 8. Manufacturer and/or Contractor (Contractor) shall defend any and all suits and assume all liability for any and all claitns made against the City of San Bernardino, or any of its officials or agents for the use of any patented process, device or article forming a part of equipment or any item furnished under the contract 9. Each Contraetor must state in his proposal the guaranteed delivery date of product and/or services in nmnber of calendar days from the date of contract execution by the City of San Bernardino, time is of the eSSence relative to this contract. Contractor shall prosecute the work continuously and diligently and shall deliver the offered items at the earliest possible date following the award ofthe coutract. 10. Each Contractor shall list in his proposal all factory, manufacturer's and/or dealer's warranty and/or guarantee coverage and shall submit such written documents evidencing the same attached to the proposal. 11. Contractor shall furnish and deliver to the City complete equipment and/or services as proposed and awarded, ready for installation and fully equipped as detailed in these specifications. 12. Price shall be quotedF.O.B. San Bernardino(a11 transportation charges shall be fully prepaid), and shall include all discounts. Offer shall include Califoruia sales tax, where applicable, computed at the rate of7.50% (this will normally be shown as a separate line item on the price form). 13. City shall make payment within thirty (30) days after the complete delivery and acceptance of the specified items by the City of San Bernardino and receipt of the Contractor's priced invoice. 14. All "standard equipment" is included in any offer. Contractors furnishing proposals nnder these specifications shall supply all items advertised as "standard" equipment and/or services even ifsllch items are not stipulated in the specifications, unless otherwise clearly excepted in the proposal. 17 15. The items which the Contractor proposes to furnish the City must comply in all respects with the appropriate safety regulations of all regnlatory commissions of the Federal Government and the State of California, ",nether such safety features and/or items have been specifically outlined in these specifications or not 16. Contractor delivering equipment and/or s""ices pursuant to this RFP specifications shall guarantee that equipment and/or services nieet specifications as set forth herein. If it is found that equipment and/or services delivered do not meet requirements of these specifications the Contractor shall be required to correct the same at their own expense. 17. By submitting a bid, each Contractor agrees that in the everit complete delivery is not made within the time or times set forth pursuant to this specification, damage will be sustained by the City. and that it is, and will be impractical and extremely difficult to ascertain the actual damage which the City will sustain in the event of and by reason of such delay. 18. In case the delivery of the items under this contract is delayed due to strikes, injunctions, government controls, or by reason of any cause or CircunlStance beyond the control of the contractor, the time for delivery may be extended (in the City's sole discretion) by a number of days to be deternlined in each itlSlance by mutual written agreement between the Coutractor and the Purchasing Manager of the City of San Bernardino. The City shall not unreasonably refuse such extension. ~. Contract. Each proposal shall be snbmitted and received with the nnderstanding that acceptance by the City of San Bernardino of proposal in response to this solicitation shall constitnte a contract between the Contractor and the City. This shall bind the Contractor to furnish and deliver at the prices offered and in complete accordance with all provisions ofRFP No. F-06-19. In most cases the basis of award will be the City's standard purchase order that mayor may not incorporate this solicitation by reference. 20. Prolnoited interest No member, officer, or employee of the City or of any agency of the City during his tenure or for one year thereafter shall have any interest, direct or indirect in this contract or the proceeds thereof. Furthermore, the parties hereto covenant and agree that to their knowledge no board member, officer or employee of the City has any interest, whether contractnal, non-contractual, financial or otherwise, in this transaction, or in the business of the contracting party other than the City, and that if any such interest comes to the knowledge of either party at any time, a full and complete disclosure of all such information will be made in writing to the other party or parties, even if such interest would not be considered a conflict of interest under Article 4( commencing with Section 1090) or Article 4.6 (commencing with Section 1120) of Division 4 of Title I of the Govemment Code of tile State of California. ~. One DoclUUent. These specifications, the notice inviting proposals, RFP F-06-19, the contractor's proposal, the written agreement executed by the parties, the purchase order and all doclUUents referred to in the complete specifications and purchase order, and all modifications of said doclUUents shall be cOllStrued together as one document. Anything called for in anyone of said doclUUents shall be deemed to be reqnired equally as if called for in all. Anything necessary to complete the work properly shall be performed by the contractor, whether specifically set out in the contract or not. All sections of the specifications shall be read as constiMing a whole and not as an aggregation of individual parts, and whatever is specified in one section shall be construed as applying to all sections. 22. The City of San Bernardino reserves the right to accept or reject any and all proposals. 23. Prompt payment. Each Contractor may stipnlate in the proposal a percentage prompt paymentdiscoUllt to be taken by the City in the event the City makes payment to the Contractor within ten(IO) working days of receipt of material and approval of invoice. For the purpose of this provision, payment is deemed to be made on the date of mailing of the City check. NOTE: prompt payment discounts will only be used during bid evaluation in the case of ties. 24. Inquiries. Direct all inquiries to Sheila A. Futch at 909-384-5085 Technical questions may be sent via fax to 909-384-5043. The allSwers to material questions will be provided to all potential Contractors. ~proposal/Price forms. No proposal will be acceptable unless prices are submitted on the pricing forms furnished herein, the oricine forms are submitted in a seoarale sealed envelooe. aud all required forms are completed and included with proposal. Deliver all proposals, signed and sealed to the Purchasing Division, Finance Department at 300 North "D" Street, 4'" Floor, City Hall, San Bernardino, California 92418. CLEARLY MARK THE SPECIF1CATION TITLE Playground Equipment at Harrison Canyoll Park AND NUMBER (F-06-19) ON THE OUTSIDE OF THE ENVELOPE. 26. Time. All proposals must be received in the Purchasing Division no later than May 4, 2006, 3:00 PM, where at such time and said place proposals will be publicly declared and recorded. Any proposal may be withdrawn by Conttaelor prior to the above scheduled time for the opening of proposals. Any proposal received after that time and date specified shall NOT be considered. 27. The City of San Bernardino reserves the right at its own discretion to award separate conttacts for each category, or to aWllfd nmitiple contracts, or to aWllfd one conlract for furnishing and delivering of all equipment andlor services in all categories. 28. Equipment In the purchase of equipmen~ Conttactor shall be required to furnish one (I) OPERATORS MANUAL and one (I) PARTS MANUAL for all equipment offered. 29. In submitting a proposal to a public purchasing body, the Contractor agrees that if the proposal is accepted, it will assign to the purchasing body all rights, tide, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (U.S.C. Sec 15) or under the Cartwright Act (Chapter 2, conunencing with Section 16700 ofPart 2 of Division 7 of the Business and Profe.ssions Code), arising from purchases of goods, materials, or services by the Contractor for sale to the purchasing body pursuant to the proposal Such assignment shall be made and become effective at the time the purchasing body tenders [mal payment to the Contractor. 30. CONTRACTOR shall indemnify, defend and hold City, its officers, employees and agents bannless from any claim, demand, liability, sui~ judgment or expense (including, without limitation, reasonable costs of defense) arising out of or related to Conttactor's performance ofthis agreement, except that such duty to indenmify, defend and hold hamlless shall not apply where injury to person or property is caused by City's willful misconduct or sole negligence. The costs, salary and expenses of die City Attorney and members of his office in enforcing this Agreement on behalf of the City shall be considered as "attorney's fees" for lite pmposes oflhis paragraplL 31. While not restricting or limiting the foregoing, during the term of this Agreemem, Contractor shall maintain in effect policies of colllprehensive public, general, and automobile liability insurance, in the amount of $1,000,000 combined single limi~ and statutory worker's compensation coverage, and shall file copies of said policies with the City's Risk Manager prior to undertaking any work under this Agreement. The policies shall name the City as an additional insured and shall provide for ten (10) day notification to the City ifsaid policies are rerminated or materially altered. 32. FAITHFUL PBRFORM/,NeE BOND or BID BOND: (not required) The Contractor will be required to fumish a cashier's check, certified check or faithful performance bond made payable to the City of San Bemardino in an amount equal to 100% of the proposal price to insure lite contractor's faithful performance of this contract. Said surety shall be subject to the approval of the City of San Bernardino, bonds shall be in accordance with Ordinance No. 821, Section 2400, and the corporation issuing said bond shall have a rating in Best's most recent insurance guide of~;A" or better. 33. Written conttact docUlUents, duly authorized and signed by the appropriate authority, collStitute the complete and entire agreement(s) that may result from the RFP. 34. City may, at its discretion, exercise option year renewals for up to 3 years, in one year increments. 35. By submitting a proposal, Contractor warrants that any and all licenses andlor certifications required by law, statute, code or ordinance in performing under the scope and specifications of this RFP are currently held by Conlractor, and are valid and in full force and effect. Copies or legitimate proof of such licensure andlor certification shall be included in Contractor's proposal. Proposals lacking COllies andlor proof of said licenses andlor certifications mav be deemednoncresponsive and ma" be reiected. J !