HomeMy WebLinkAbout05.L- Finance RESOLUTION (ID#3024) DOC ID: 3024
CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION
Agreement/Contract Amendment
From: David Cain M/CC Meeting Date: 04/07/2014
Prepared by: Veronica Martinez, (909) 384-
5242
Dept: Finance Ward(s): All
Subject:
Resolution of the Mayor and Common Council of the City of San Bernardino Authorizing the
Execution of Amendment No. 3 to the Agreement for Auditing Services by and Between the City
of San Bernardino and Rogers Anderson Malody and Scott for the Provision of Auditing
Services. (#3024)
Current Business Registration Certificate: Not Applicable
Financial Impact:
The original budgeted amount was $53,400 and during the Mid-year budget update the MCC
approved an additional $174,900 for auditing services.
Approved Budgeted Amount:: $228,300
Motion: Adopt the Resolution.
Synopsis of Previous Council Action:
April 19, 2011 - Mayor and Council approved amendment#2 extending the Audit
Agreement for a period of two (2) years in order to perform financial audit services for FY 2010-
11 and FY 2011-12 not to exceed a total of$53,400 per year. Resolution 2011-88
February 17, 2014 - Mayor and Council approved the FY 2013-14 mid-year budget to include
adjustments to cover increased costs in completing FY 2011-12 audit totaling $174,900.
Background:
The Bankruptcy Court, key creditors and the Federal Mediation Judge have made it clear that the
City must provide accurate financial data and reports. Rogers, Anderson, Malody& Scott, LLP
(RAMS) have been engaged in auditing the City, the Economic Development Agency(EDA)
and the Successor Agency. These audits have been full of complications and challenges that have
led to delays and additional work for both RAMS and City staff.
RAMS' initial audit work was focused on the City's financial information and compiling a
"draft" financial statement for the City in October 2013. Since that time a substantial amount of
time and resources have been spent on the performance of the Single Audit and review of the
EDA's financial information.
California State law eliminated redevelopment agencies effective February 2012. The
accounting required to properly report the dissolution of the EDA is complex. The EDA's
financial administration was handled by a completely separate finance staff in a separate
PCketg'�
Updated:4/3/2014 by Linda Sutherland �
5.L .
3024
location,with a separate financial accounting system. To properly record the dissolution of the
EDA, the seven months activity of the EDA for the period ending January 31, 2012 is reported as
a component of the City. The EDA dissolves on January 31, 2012 and the Successor Agency of
the EDA is established February 1, 2012. The five months of activity in the former EDA for the
period ended June 30,2012 is fiduciary fund of the City as the Successor Agency.
f
RAMS also utilized the services of a subcontract auditing firm,Eadie &Payne, LLP,to perform
much of the Successor Agency audit work. Eadie&Payne, LLP reported the audit outcome to
RAMS for inclusion and collectively reporting the City's financial statements for all
governmental activities. Another challenge facing the audit was the loss of a key managing
partner from Eadie&Payne before the audit was completed.
This amendment to the existing contract reflects the complexity of audit requirements of the
City's financial information for Fiscal Year 2011-2012. The final audit will result in a
Comprehensive Annual Financial Report(CAFR) collectively showing the City's basic financial
statements for the year ending June 30, 2012. It is understood the City will present its financial
statements in the form of a Comprehensive Annual Financial Report.
The original fee for audit services from RAMS was $53,400 for the City. Because of the change
from the Economic Development Agency to the Successor Agency during the 2010 - 2011 FY
the audit requires including both agencies in order to satisfy all legal requirements. Upon
completion of the EDA audits,the two entities are then included in the City's financial
statements. An audit process can be a very taxing experience for staff therefore, it was believed
the use of RAMS brought a continuity factor, one that would benefit the audit process. Due to
the complexity of the audit process and the challenges related to recreating many of the
transactions without the benefit of prior staff it is anticipated to complete this project, a contract
amendment is required in the amount of$174,900 for a total contract amount not to exceed
$228,300. The increase audit expenditure of$174,900 was approved by the Mayor and Common
Council upon adoption of the Mid-year budget adjustments on February 17, 2014.
Bankruptcy does bring a complexity to the audit process not faced by other City audits. The City
did a Request For Proposal for Auditing Services in July 2013 and the bids varied between
$218,000 to $374,000. Many auditing firms declined to bid. The additional amount required to
complete this project is in line with these proposals.
City Attorney Review:
Suoportim Documents:
reso 3024 (PDF)
agrmt 3024 (PDF)
Updated:4/3/2014 by Linda Sutherland Packet Pg. 149
ror
RESOLUTION NO.
1
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING THE EXECUTION OF AMENDMENT NO. 3
3 TO THE AGREEMENT FOR AUDITING SERVICES BY AND BETWEEN THE
CITY OF SAN BERNARDINO AND ROGERS ANDERSON MALODY AND SCOTT 2
4 FOR THE PROVISION OF AUDITING SERVICES. aD
Cn
5 °1
6 NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON a
7 COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
U
8 SECTION 1. The City Manager is hereby authorized and directed to execute an
0
9 amendment to the Audit Service Agreement between the City of San Bernardino and 0
10
Rogers Anderson Malody and Scott, a copy of which is attached hereto marked Exhibit =
11 E
"A" and incorporated herein by reference as fully as though set forth at length.
12
13 SECTION 2. The Purchasing Agent is hereby authorized to issue a Purchase Order
0
0
14 to Rogers Anderson Malody and Scott for audit services for a total amount not to exceed 06
15 $228,300. 0
0
R
16
SECTION 3. The authorization granted hereunder shall expire and be void and of
17
18 no further effect if the Agreement is not executed by both parties and returned to the Office a
L
19 of the City Clerk within sixty (60) days following the effective date of this Resolution, o
20
N
O
21 /U
22 N
o
23
L
24
E
25
26 a
27
28
a Plcket P9. 150
5.L.a
® 1
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
2 SAN BERNARDINO AUTHORIZING THE EXECUTION OF AMENDMENT NO. 3
TO THE AGREEMENT FOR AUDITING SERVICES BY AND BETWEEN THE
3 CITY OF SAN BERNARDINO AND ROGERS ANDERSON MALODY AND SCOTT a
FOR THE PROVISION OF AUDITING SERVICES. 2
4
5
6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
a
7 and Common Council of the City of San Bernardino at a meeting
8 thereof,held on the day of , 2014,by the following vote, to wit:
O
9 c.>
Council Members: AYES NAYS ABSTAIN ABSENT
10
11 MARQUEZ
12 BARRIOS
a
13 VALDIVIA r
O
in
14 SHORETT ar
15 NICKEL
16
_
JOHNSON °
17
18 MULVIHILL a
N
L
19
O
20 Georgeann Hanna, City Clerk
N
O
21 The foregoing Resolution is hereby approved this day of , 2014.
N
22 M CD
O
23
L
24 R. Carey Davis, Mayor
City of San Bernardino E
25
Approved as to form: w
26 Gary D. Saenz, City Attorney a
27
28 By: `� �
Packet Pg. 151
THIRD AMENDMENT TO CONSULTANT SERVICES AGREEMENT
BETWEEN THE CITY OF SAN BERNARDINO AND
ROGERS, ANDERSON, MALODY& SCOTT
THIS THIRD AMENDMENT is made and entered into as of April 7 2014 by and between the N
CITY OF SAN BERNARDINO, a charter city ("City"), and ROGERS, ANDERSON, MALODY &
SCOTT ("CONSULTANT"). In consideration of the mutual covenants and conditions set forth
herein, the parties agree as follows:
1. This Amendment is made with respect to the following facts and purposes:
Q
a. On April 19, 2011, the City entered into a Second Amendment to the agreement for o
auditing services for period ending June 30, 2012 for work to be performed during the
2012-13 fiscal year for$53,400 and authorized a purchase order to the Consultant. E
b. On February 17, 2014, the City approved a mid-year budget adjustment to cover the o
increased costs in completing the 201.1-12 audits due to the complexity of the EDA L)
dissolution, pending transfer of HUD Federal programs to the City, Single Audit,
bankruptcy filing, and auditing many complex financial transactions in the amount of 4t
$174,900. _
c. The parties now desire to extend the agreement to June 30, 2014 for an additional One E
Hundred Seventy-four Thousand and Nine Hundred Dollars ($174,900) to a total amount c
not-to-exceed total amount of Two Hundred Twenty-eight Thousand and Three Hundred E
Dollars ($228,300) and amend the Agreement as set forth in this Amendment. Q
0
2. Section 2. Compensation of the Agreement is hereby amended to increase the amount vn
that the City agrees to pay the Consultant a not-to-exceed total amount of Two Hundred
Twenty-eight Thousand and Three Hundred Dollars ($228,300). City shall pay Consultant -c
for services rendered pursuant to this Agreement at the time and in the manner set forth ,—°�
herein. The third amendment amount shall not exceed One Hundred Seventy-four
Thousand and Nine Hundred Dollars ($174,900) for additional audit Consultant services. o
Q
3. Section 3.1. Term of the Agreement is hereby amended to extend the term of the c
Agreement to June 30, 2014, unless the Agreement is previously terminated as provided for Q
herein. L
a�
rn
0
4. Except for the changes specifically set forth herein, all other terms and conditions of the
Agreement shall remain in full force and effect. N
0
M
N
O
E
L
c
E
1H
r
Q
ur
i
Placket-Pg., 152
THIRD AMENDMENT TO CONSULTANT SERVICES AGREEMENT
BETWEEN THE CITY OF SAN BERNARDINO AND
ROGERS, ANDERSON, MALODY & SCOTT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
and through their respective authorized officers, as of the date first above written,
as
co
a�
CITY OF SAN BERNARDINO ROGERS, ANDERSON, MALODY&
SCOTT Q
L
O
U
R
L
Allen Parker, City Manager RAMS, Partner o
U
O
41
Cl)
ATTEST: APPROVED AS TO FORM:
Georgeann Hanna, City Clerk hnz, City Attorney
a
O
U
N
a
'a
O
c
O
tl!
L
_
Q
N
L
Q�
NO
w
N
O
M
d
N
O
M
r-.
E
L
_
E
Ar
U
Q
Packet Pg. 153