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RESOLUTION (ID#3028) DOC ID: 3028 B
CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION
Agreement/Contract Amendment
From: Allen Parker M/CC Meeting Date: 04/07/2014
Prepared by: Veronica Martinez, (909) 384-
5242
Dept: Successor Agency Ward(s): All
Subject:
Resolution of the Mayor and Common Council of the City of San Bernardino, Acting as the
Successor Agency to the Redevelopment Agency of San Bernardino, Authorizing the Execution
of Amendment No. 1 to the Agreement for Auditing Services Between Rogers, Anderson,
Malody & Scott, LLP for Economic Development Agency/Successor Agency Audit Services.
(#3028)
Current Business Registration Certificate: Not Applicable
Financial Impact:
Original approved budgeted amount was $54,000. The funding for the additional costs of
$104,440 will come from allowable Administrative expenses in future Recognized Obligation
Payment Schedule periods as submitted to the State Department of Finance.
Motion: Adopt the Resolution.
Synopsis of Previous Council Action:
June 30, 2013, - Successor Agency entered into an Agreement for Auditing Services for Fiscal
Year 2011-2012. (Resolution 2013-186)
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 FDA's
financial administration was handled by a completely separate finance staff in a separate
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
Updated:4/1/2014 by Georgeann"Gigi"Hanna B Packet Pg. 382
5.AC
3028
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.
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 $54, 000 for the Economic Development
Agency/Successor Agency. Because of the change from the Economic Development Agency to
the Successor Agency during the 2010 -2011 FY the audit included both agencies in order to
satisfy all requirements. 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$104,440 for a total not to exceed of
$156,440. The funding for this additional cost will come from the allowable Administrative
charges line item in future Recognized Obligation Payments Schedule (ROPS)periods.
Bankruptcy does bring a complexity to the audit process not faced by other City audits. The City
did an RFP in July 2013 and bids varied between$218,000 to $374,000. The additional amount
required to complete this project is in line with these proposals.
City Attorney Review:
Supporting Documents:
reso 3028 (PDF)
agrmt 3028 (PDF)
Updated:4/1/2014 by Georgeann"Gigi"Hanna B Packet Pg. 383
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RESOLUTION NO.
1
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO, ACTING AS THE SUCCESSOR AGENCY TO THE
3 REDEVELOPMENT AGENCY OF SAN BERNARDINO, AUTHORIZING THE
EXECUTION OF AMENDMENT NO. 1 TO THE AGREEMENT FOR AUDITING
4 SERVICES BETWEEN ROGERS, ANDERSON, MALODY & SCOTT, LLP FOR
5 ECONOMIC DEVELOPMENT AGENCY / SUCCESSOR AGENCY AUDIT o
SERVICES. N
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7 NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON
8 COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
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9 SECTION 1. The City Manager is hereby authorized and directed to execute
10 Amendment No. I to the Agreement for Auditing Services between the City of San o
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12 Bernardino acting as the Successor Agency to the Redevelopment Agency of San
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13 Bernardino and Rogers, Anderson, Malody & Scott, LLP a copy of which is attached a
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14 hereto marked Exhibit "A" and 'incorporated herein by reference as fully as though set �
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15 forth at length.
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SECTION 2. The Purchasing Agent is hereby authorized to 'issue a purchase order to E
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Rogers Anderson Malody and Scott for audit services for a total amount not to exceed Q
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19 $156,440. U-
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20 SECTION 3. The authorization granted hereunder shall expire and be void and of no M
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further effect if the consultant agreement for Economic Development Agency/ Successor M
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23 Agency Audit Services is not completed within sixty (60) days following the effective date
24 of the Resolution. _
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1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
2 SAN BERNARDINO, ACTING AS THE SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF SAN BERNARDINO, AUTHORIZING THE
3 EXECUTION OF AMENDMENT NO. 1 TO THE AGREEMENT FOR AUDITING
SERVICES BETWEEN ROGERS, ANDERSON, MALODY & SCOTT, LLP FOR
4 ECONOMIC DEVELOPMENT AGENCY / SUCCESSOR AGENCY AUDIT a
5 SERVICES. o
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6 1 HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
7 and Common Council of the City of San Bernardino at a meeting 0
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thereof,held on the day of , 2014, by the following vote,to wit:
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10 Council Members: AYES NAYS ABSTAIN ABSENT a
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11 MARQUEZ
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12 E
BARRIOS
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13 VALDIVIA
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SHORETT Cl)
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16 NICKEL
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17 JOHNSON =
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18 MULVIHILL N
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Georgeann Hanna, City Clerk
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22 The foregoing Resolution is hereby approved this day of , 2014. c
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24 R. Carey Davis, Mayor
25 City of San Bernardino
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26 Approved as to form:
Gary D. Saenz, City Attorney
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Packet-Pg.385'
AMENDMENT NO. 1 TO CONSULTANT SERVICES AGREEMENT
BETWEEN THE CITY OF SAN BERNARDINO ACTING AS THE SUCCESSOR AGENCY TO
THE REDEVELOPMENT AGENCY OF SAN BERNARDINO AND
ROGERS, ANDERSON, MALODY &SCOTT
THIS AMENDMENT NO. 1 is made and entered into as of April 7 2014 by and between the
CITY OF SAN BERNARDINO ACTING AS THE SUCCESSOR AGENCY TO THE a
REDEVELOPMENT AGENCY OF SAN BERNARDINO, (hereinafter referred to as Successor L
Agency), and ROGERS, ANDERSON, MALODY & SCOTT ("Consultant"). In consideration of y
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: Cn
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a. On June 13, 2013, the Successor Agency entered into an Agreement for Auditing
Services for Fiscal Year 2011-2012. co
2. Section 5. Compensation of the Agreement is hereby amended to increase the amount a
that the Successor Agency agrees to pay the Consultants not-to-exceed a total amount of
One Hundred Fifty-six Thousand Four Hundred Forty Dollars ($156,440). Successor °
Agency shall pay Consultant for services rendered pursuant to this Agreement at the time
and in the manner set forth herein. The First amendment amount shall not exceed One E
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Hundred Fifty-six Thousand Four Hundred Forty Dollars ($156,440) for additional audit 0-
Consultant services. Funding shall be from the allowable Administrative Services line item in Q
future Recognized Obligation Payments (ROPS) requests to the State Department of
Finance.
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3. Except for the changes specifically set forth herein, all other terms and conditions of the w
Agreement shall remain in full force and effect.
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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.
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CITY OF SAN BERNARDINO ACTING ROGERS, ANDERSON, MALODY U_
AS SUCCESSOR AGENCY TO THE AND SCOTT N
REDEVELOPMENT AGENCY OF M
SAN BERNARDINO
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Allen Parker, Executive Director RAMS, Partner 0
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ATTEST: APPROVED AS TO FORM: a
Georgeann Hanna, City Clerk G enz, City Attorney
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