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Home My WebLink About11-Finance CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Barbara Pachon Subject: Resolution of the Mayor and Director of Finance Council authorizing the execution of Amendment No. 2 to the Agreement Dept: Finance for services between the City of San Bernardino and the firm of Rogers, Anderson, Malody & Scott, LLP for the provision Date: April 18, 2011 of financial auditing services Synopsis of Previous Council action: July 10, 2006 - Resolution 2006-240 was approved authorizing Rogers, Anderson, Malody& Scott, LLP to provide financial auditing services. August 17, 2009— Resolution 2009-292 was approved awarding a two year extension to Rogers, Anderson, Malody& Scott, LLP to provide financial auditing services. May 4, 2009— CDC 2009-17 was approved awarding a two year extension to Rogers, Anderson, Malody& Scott, LLP to provide financial auditing services Recommended motion: Adopt Resolution Signature Contact person: Barbara Pachon, Director of Finance Phone : ext. 5242 Supporting data attached: Yes Ward: FUNDING REQUIREMENTS: Amount: $53,400 for FY 2011-12 and $53,400 for FY 2012-13 For a total of$106,800 Source: (Acct. No.) 001-090-5502-0000-0053 Finance: Council Notes: eso "2 Agenda Item No. H1101 1 "wott-Pad-s CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION STAFF REPORT SUBJECT Resolution of the Mayor and Common Council of the City of San Bernardino authorizing the execution of Amendment No. 2 to the agreement for auditing services by and between the City of San Bernardino and Rogers, Anderson, Malody & Scott, LLP, (RAMS) for the provision of financial auditing services. BACKGROUND On April 13, 2006, the City of San Bernardino, the Economic Development Agency and the Municipal Water Department issued a joint Request for proposals (RFP) F-06-21 for financial audit services beginning with the fiscal year ending June 30, 2006. The RFP required separate audits and subsequent separate financial reports for each entity plus a Comprehensive Annual Financial Report encompassing all three entities. Staff met and evaluated proposals received and recommended that the Mayor and Council award a three-year contract for financial audit services to RAMS. At that time, the Water Department's final decision was to go with a different firm. The three-year agreement with RAMS ended on June 30, 2009 for the financial audit period of FY 2007-08. During FY 2008-09 the City Manager requested Departments to contact the various vendors and consultants they do business with and request them to reduce their costs to the City by 5% as a way to help the City of San Bernardino reduce their expenditures to balance the budget. When RAMS was contacted they agreed to a 10%reduction in their contract costs with the request to add two additional years to their contract ending June 30, 2011. This was approved by the Mayor and Common Council on August 17, 2009. On January 24, 2011, the Mayor and Common Council approved the purchase of a new Financial Management & Integrated Software System. Based on experiences of other agencies, implementing the new financial system is estimated to be completed in approximately two years. Staff is recommending extending the term of the agreement with RAMS to coincide with this project. As a result, the City will retain the expertise from RAMS in validating the current financial procedures, which are an intricate part of a financial system. At the end of the two year extension staff will issue a Request for Proposal for audit services. The plan is to work closely with the Economic Development Agency and the Water Department at that time to issue an RFP that would enable all three entities to establish a contractual agreement with an audit firm. 1 FINANCIAL IMPACT When the City approved Amendment No. 1 on August 17, 2009, RAMS' fee was $54,300 which included a 10% reduced amount. In the agreement for Amendment No. 2, RAMS' proposed amount is reduced an additional 2% for a total proposed flat fee of$53,400 for two consecutive fiscal years ending June 30, 2011 and June 30, 2012, with no escalating factors included. Funds for these audit services are appropriated in the General Government division, FY 2010- 2011 budget account for Professional Services(no. 001-090-5502-0000-0053). RECOMMENDATION Adopt Resolution. 2 1 RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF 3 SAN BERNARDINO AUTHORIZING THE EXECUTION OF AMENDMENT NO. 2 TO THE AGREEMENT FOR AUDITING SERVICES BY AND BETWEEN THE CITY OF SAN 4 BERNARDINO AND ROGERS, ANDERSON, MALODY & SCOTT, L.L.P. FOR THE PROVISION OF FINANCIAL AUDITING SERVICES. 5 6 WHEREAS, the City of San Bernardino desires to enter into Amendment No. 2 7 ("Amendment No. 2") to the Agreement for auditing services with Rodgers, Anderson, Malody 8 & Scott, L.L.P., to extend the Agreement for a period of two (2) years in order to perform 9 10 financial audit services for the City of San Bernardino ("City") as attached. 11 NOW, THEREFORE, BE IT RESOLVED, DETERMINED, AND ORDERED BY 12 THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS 13 FOLLOWS: .+` 14 SECTION 1. The City Manager is hereby authorized and directed to execute on behalf 15 of said City Amendment No. 2 with Rogers, Anderson, Malody & Scott, L.L.P. approving a 16 17 two (2) year extension to the Agreement to perform financial audit services for the City, for a 18 two (2) year period starting from July 1, 2011 to June 30, 2013. (The audit periods covered 19 will be FY 10-11 and FY 11-12.) A copy of which is attached hereto as Exhibit "A" and 20 incorporated herein by reference. Upon execution of said agreement, the Purchasing Manager 21 of the City of San Bernardino is directed to issue a Purchase Order to Rogers, Anderson, 22 Malody & Scott LLP in the amount not to exceed $53,400 for FY 11-12; and $53,400 for FY 23 12-13. 24 25 SECTION 2. The authorization to execute the above referenced agreement is rescinded 26 if the parties to the agreement fail to execute it within sixty (60) days of the passage of this 27 resolution. 28 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AMENDMENT NO. 2 TO 2 THE AGREEMENT FOR AUDITING SERVICES BY AND BETWEEN THE CITY OF SAN 3 BERNARDINO AND ROGERS, ANDERSON, MALODY & SCOTT L.L.P. FOR THE PROVISION OF FINANCIAL SERVICES. 4 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor 5 6 and Common Council of the City of San Bernardino at an meeting thereof, held 7 on the day of , 2011,by the following vote, to wit:. 8 Council Members: AYES NAYS ABSTAIN ABSENT 9 MARQUEZ 10 VACANT 11 BREWER 12 SHORETT 13 14 KELLEY 15 JOHNSON 16 MCCAMMACK 17 18 Rachel G. Clark, City Clerk 19 The foregoing resolution is hereby approved this day of , 20 2011. 21 22 Patrick J. Morris, Mayor 23 City of San Bernardino Approved as to Form 24 JAMES F. PENMAN, 25 City Attorney 26 B � - 28 EXHIBIT A AMENDMENT NO. 2 TO THE AGREEMENT FOR AUDITING SERVICES (ORIGINAL AGREEMENT APPROVED BYMAYOR AND COMMON COUNCIL ON 7110106 RESOLUTION No. 2006-240) This Amendment No. 2 to the Agreement for Auditing Services ("Amendment No. 2") is made and entered into on this day of April, 2011 by and between the City of San Bernardino, a municipal corporation (hereinafter referred to as "CITY") and Rogers, Anderson, Malody and Scott, L.L.P., Certified Public Accountants (hereinafter referred to as "AUDITORS"). WITNESSETH WHEREAS, the AUDITORS are recognized as competent and qualified certified public accountants who were selected by the CITY through competitive procedures, and are duly authorized to practice and licensed as such by the California State Board of Accountancy; WHEREAS, the CITY approved a three year contract for auditing services with AUDITORS ending 6/30/09 (final audit year of 2007-08). WHEREAS, the CITY approved amendment No. 1, a two year contract extension, for auditing services with AUDITORS ending 6/30/11 (final audit year of 09-10). WHEREAS, in response to the CITY'S request of vendor to reduce contract cost, AUDITORS agree to continue the 10% reduction rate as stated in Amendment No. 1, and included in their flat fee amount during the two year contract extension, has added an additional reduction amount of approximately 2%. NOW, THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter contained, the parties hereto agree to the following changes to the original contract: 1. TERM. Unless terminated earlier or cancelled as provided for herein, the term of this Amendment No. 2 shall be extended for each of the two (2) fiscal years ending June 30, 2012 (audit period of FY 10-11); and ending June 30, 2013 (audit period of FY 11-12). 5. COMPLETION OF AUDIT AND DELIVERY OF AUDIT OPINIONS. AUDITORS shall complete all work by the dates that shall be agreed upon for each fiscal year included in the term of this Amendment No. 2 to the Agreement, but in no event shall any final written audit report, management letter, final typed audit opinions or affiliated report be delivered to the CITY later than December 1 for the immediately prior fiscal year being audited. 1 13. AUTHORITY TOEXECUTE AGREEM of and AUDITORS do covenant that each individual executing this Amendment No. 2 to the Agreement on behalf of each party is a person duly authorized and empowered to execute agreements for such party. 14. All other provisions of the original agreement approved by Resolution 2006-240 of the Mayor and Council on July 10, 2006, as set forth in Exhibit 1, shall remain in effect through the end of revised contract term. IN WITNESS WHEREFORE, the parties hereto have caused this instrument to be executed the day and year first written above. THE CITY OF SAN BERNARDINO Dated: By: Charles McNeeley, City Manager ATTEST: City Clerk APPROVED AS TO FORM: City Attorney Dated: ROGERS,ANDERSON, MALODY & SCOTT Terry P. Shea, Partner 2