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HomeMy WebLinkAbout05509 - MACIAS GINI & O'CONNELL LLP FINANCIAL AUDITING SERVICES Page 1 of 2 Kathie Hart From: Nancy Klukan Sent: April 21, 2010 12:21 PM To: Geoffrey Kiehl �� l Cc: Kathie Hart, Cindy Cairns, Cindy Gosselin O`Ui` Subject: RE: A5509-Macias Gini & O'Connell Kathie, PLEASE close this agreement. d Thanks Jeff. From: Geoffrey Kiehl Sent: Tuesday, April 20, 2010 7:08 PM To: Nancy Klukan Cc: Kathie Hart; Cindy Cairns; Cindy Gosselin Subject: RE: A5509 - Macias Gini &O'Connell Nancy— I will give you the privilege of answering this one- Jeff From: Kathie Hart Sent: Tuesday, April 20, 2010 6:17 PM To: Geoffrey Kiehl Cc: Cindy Cairns; Cindy Gosselin Subject: RE: A5509 - Macias Gini &O'Connell Jeff: Ok to close this agreement? oocumentak RU0911M AnarnyarQdte Exntration A55C9 FiNanciar Audr4ng SeMces-3year r-_rm C512r.QC©7 77rv'3012D1C Company Name: Macias Gini & O'Connell LLP (Moreland) Address: Keum J.O'Connell, A1anagirgl Partner, 12D1 Dove Street.Suite 680.Nev,port Beach, CA 92660 Phone: (949)221.0025 0onUct: Puff.O'Connell GrOLIP: FINANCE Service: In File %Rod. G.KIEHL (760, 323.8229 InSy..��SttatttUS: EXPSOON-Letter PrdnW'04+20,2010 /{,6�IU4 Kathie Hart, CMC Chief Deputy City Clerk City of Palm Springs 3200 E. Tahqurtz Canyon Way Palm Springs,CA 92262 `S' (760) 323-8206 1 o6i (760) 322-8332 �7-< Kathie.Hart@PalmSpringsCA.gov 0A/21/10 AMENDMENT TO AGREEMENT FOR AUDITING SERVICES This Amendment to Agreement for Auditing Services (this "Amendment") is entered into on this 21"day of May, 2008, by and between the City of Palm Springs, a California municipal corporation(the "Gty"), on the one band, and Moreland & Associates Accountancy Corporation, a California corporation ("Contractoz"), and Macias Gini & O'Connell LLP, a California limited liability partnership and the assignee of Contzactar ("Assignee Contractor"), on the other band, with regard to the following: RECITALS: WHEREAS, on or about the I Ith day of July, 2007, the City entered into an Agreement Cor Auditing Services (the "Original Contract") with Contractor for independent auditing services to the City; WHEREAS, Contractor has transferred certain assets to Assignee Contractor pursuant to an Asset Purchase Agreement dated as of March 26, 2008 (the "Purchase Agreement"), and in connection therewith has agreed to assign the Original Contract to Assignee Contractor; WHEREAS, Contractor seeks to assign its rights under the Original Contract to Assignee Contractor effective as of April 2, 2008 (the "Effective Date"), and Assignee Contractor desires to accept assignment of such rights under the Original Contract and assume all of Contractor's rights and obligations under the Original Contract as of the Effective Date, on the terns set forth herein and in the Purchase Agreement; and WHEREAS,the City desires to consent to the assignment of the Original Contract to Assignee Contractor and the assumption by Assignee Contractoz of the obligations thereunder from and after the Effective Date. NOW, THEREFORE, it is mutually agreed upon by and between the undersigned parties as follows: SECTION 1. RECITALS. The foregoing recitals are incorporated herein by reference as terms of this Amendment. SECTION 2. CONSENT TO ASSIGNMENT. The City hereby approves the assignment oCthe Original Contract from Contractor to Assignee Contractor, effective as of the Effective Date. SECTION 3. ASSUMPTION OF OBLIGATIONS. From and after the Effective Date, Assignee Contractor shall have all of Contractor's rights and assume all of Contractor's obligations under the Original Contract. Accordingly, all references to "Moreland & Associates" in the Original Contract, including the exhibits thereto, are hereby replaced with, and superseded by, "Macias Gini & O'Connell LLP". SECTION 4. FULL FORCE AND EFFECT. Except as expressly modified herein, all other terns and conditions of the Original Contract shall be and remain in Cull force and effect. �1� U 0�n- '333 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective duly authorized representatives on the day and year first written above. CONTRACTOR: CITY: MORELAND & ASSOCIATES CITY ON PALM SPRINGS, ACCOUNTANCY CORPORATION a California municipal corporation Michael C. Moreland Name: David H. President Titic: __City Manager ASSIGNEE CONTRACTOR: ATTEST: MACIAS GINI & O•CONNELL i,I,P - Na�James By t _ City Clerk Kevin J. O'Connell Mauagin.- Partaler APPROVED BY CIN COUNCIL 00GPC i PROFESSIONAL SERVICES AGREEMENT FINANCIAL AUDITING SERVICES THIS PROFESSIONAL. SERVIgES AGREEMENT (hereinafter "Agreement") is made and entered into, to be effective this day of 2007, by and between the CITY OF PALM SPRINGS, a California charter city an municipal corporation, (hereinafter referred to as "City') and MORELAND & ASSOCIATES, INC., a California corporation, (hereinafter referred to as "Consultant"). City and Consultant are sometimes hereinafter individually referred to as"Party"and are hereinafter collectively referred to as the"Parties" RECITALS A. City has determined that there is a need for professional Financial Auditing services for Government Accounting Standards Board (GASB) mandated Comprehensive Annual Financial Reports (the"Project"). B. Consultant has submitted to City a proposal to provide Financial Auditing services to City for the Project pursuant to the terms of this Agreement. C. Consultant is qualified by virtue of its experience, training, education, reputation, I and expertise to provide these services and has agreed to provide such services as provided herein. D. City desires to retain.Consultant to provide such professional services. NOW, THEREFORE, in consideration of the promises and mutual obligations, covenants, and conditions contained herein, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged,the Parties agree as follows: AGREEMENT I. SERVICES OF CONSULTANT 1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, Consultant agrees to perform the professional services set forth in the Scope of Services described in Consultant's signed, original proposal dated May 11, 2007, entitled "Proposal for Audit Services, City of Palm Springs," which is attached hereto as Exhibit "A" and is incorporated herein by reference (hereinafter referred to as the"Services" or"Work"). As a material inducement to the City entering into this Agreement, Consultant represents and warrants that Consultant is a provider of first class work and professional services and that Consultant is experienced in performing the Work and Services contemplated herein and,in light of such status and experience, Consultant covenants that it shall follow the highest professional standards in performing the Work and Services required hereunder. For purposes of this Agreement, the phrase "highest professional standards" shall mean those standards of practice recognized as high quality among well-qualified and experienced professionals performing similar work under similar circumstances. 1 ANDI R H:lU5ER51WPPU13LICA7RFP51ItFP 4&-0TMORELANU ACMT m RE��O R L��.�r z��t��� i 1.2 Contract Documents. The Agreement between the Parties shall consist of the following: (1) this Agreement; (2)the City's Request for Proposals; and, (3) the Consultant's signed, original proposal dated May 11, 2007, entitled "Proposal for Audit Services, City of Palm Springs" submitted to the City ("Consultant's Proposal"), which shall all be referred to collectively hereinafter as the "Contract Documents." The Consultant's Proposal and the City's Request for Proposals, which are both attached hereto as Exhibits"A" and"B," respectively, are hereby incorporated by reference and are made a part of this Agreement. The Scope of Services is included as part of the Consultant's Proposal. All provisions of the Scope of Services, the City's Request for Proposals, and the Consultant's Proposal shall be binding on the Parties. Should any conflict or inconsistency exist in the Contract Documents,the conflict or inconsistency shall be resolved by applying the provisions in the highest priority document, which shall be determined in the following order of priority: (1')the terms of this Agreement; (2"d)the provisions of the City's Request for Proposal(Exhibit "B"); (3 d) the provisions of the Consultant's Proposal (Exhibit"A'). 1.3 Compliance with Law. Consultant warrants that all Services rendered hereunder shall be performed in accordance with all applicable federal, state, aid local laws, statutes, and ordinances and all lawful orders,rules, and regulations promulgated thereunder. 1.4 Licenses Permits Fees and Assessments. Consultant represents and warrants to City that it has obtained all licenses,permits, qualifications, and approvals of whatever nature that are legally required to practice its profession and perform the Work and Services required by this Agreement, Consultant represents and warrants to City that Consultant shall, at its sole cost and expense, keep in effect at all times during the term of this Agreement, any license, permit, qualification, or approval that is legally required for Consultant to perform the Work and Services under this Agreement. Consultant shall have the sole obligation to pay for any fees, assessments, and taxes,plus applicable penalties and interest, which may be imposed by law and arise from or are necessary for the Consultant's performance of the Work and Services required by this Agreement, and shall indemnify, defend, and hold harmless City against any such fees, assessments, taxes penalties, or interest levied, assessed,or imposed against City hereunder. 1.5 Familiarity with Work. By executing this Agreement, Consultant warrants that Consultant (a) has thoroughly investigated and considered the Scope of Services to be performed, (b) has carefully considered how the Services should be performed, and (c) fully understands the facilities, difficulties, and restrictions attending performance of the Services under this Agreement. If the Services involve work upon any site, Consultant warrants that Consultant has or will investigate the site and is or will be fully acquainted with the conditions there existing, prior to commencement of any Services hereunder. Should the Consultant discover any latent or unknovm conditions that will materially affect the performance of the Services hereunder, Consultant shall immediately inform the City of such fact and shall not proceed except at Consultant's risk until written instructions are received from the City. 1.6 Care of Work. Consultant shall adopt reasonable methods during the term of the Agreement to famish continuous protection to the Work and the equipment, materials, papers, documents, plans, studies, and/or other components thereof to prevent losses or damages, and N,\U5ERSIWPPOBLI007RTP51RFP 06�07\MOJTL, NU AGMT. 2 shall be responsible for all such damages,to persons or property,until acceptance of the Work by the City, except such losses or damages as may be caused by City's own negligence. 1.7 Further Responsibilities of Parties. Both Parties agree to use reasonable care and diligence to perform their respective obligations under this Agreement. Both Parties agree to act in good faith to execute all instruments,prepare all documents, and take all actions as may be reasonably necessary to carry out the purposes of this Agreement. 1.8 Additional Services. City shall have the right at any time during the performance of the Services,without invalidating this Agreement,to order extra work beyond that specified in the Scope of Services or make changes by altering, adding to, or deducting from such Work. No such extra work may be undertaken unless a written order is first given by the City to the Consultant, incorporating therein any adjustment in (i) the Maximum Contract Amount, as defined below, and/or(U) the time to perform this Agreement, which adjustments are subject to the written approval of the Consultant. Any increase in compensation of up to twenty-five percent (25%) of the Maximum.Contract Amount or$25,000, whichever is less, or in the time to perform of up to thirty(30) days,may be approved by the City Manager, or his designee, as may be needed to perform any extra work. Any greater increases, occurring either separately or cumulatively, must be approved by the Pahn Springs City Council. It is expressly understood by Consultant that the provisions of this section shall not apply to the services specifically set forth in the Scope of Services or reasonably contemplated therein, regardless of whether the time or materials required to complete any work or service identified in the Scope of Services exceeds any time or material arnomrts or estimates provided therein. 2. COMPENSATION 2.1 Maximum Contract Amount. For the Services rendered pursuant to this Agreement, Consultant shall be compensated by City in accordance with the Schedule of Compensation, which is included in the Consultant's Proposal (Exhibit "A") entitled "Sealed Dollar Cost Bid Schedule for City of Palm Springs Professional Auditing Services RFP 08-07 dated May 11, 2007", and is incorporated herein by reference, but not exceeding the maximum contract amount of Two hundred Thirty One Thousand Six hundred Ten Dollars, (S231,610) (hereinafter referred to as the "Maximum Contract Amount") for the initial three year tern for all nine annual and optional tasks, except as may be provided pursuant to Section 1.8 above. The method of compensation shall be as set forth in Exhibit"A— Sealed Dollar Cost Bid Schedule." Compensation for necessary expenditures for reproduction costs, telephone expenses, and transportation expenses must be approved in advance by the Contract Officer designated pursuant to Section 4.2 and will only be approved if such expenses are also specified in the Schedule of Compensation. The Maximum Contract Amount shall include the attendance of Consultant at all Project meetings reasonably deemed necessary by the City. Consultant shall not be entitled to any increase in the Maximum Contract Amount for attending these meetings. Consultant hereby acknowledges that it accepts the risk that the services identified in the Scope of Services may be more costly and/or time-consuming than Consultant anticipates, that Consultant shall not be entitled to additional compensation therefore, and that the provisions of Section 1.8 shall not be applicable to the services identified in the Scope of Services. The maximum amount of city's payment obligation under this section is the amount specified herein. H1USERS\W1r 8UU\07RFPS`,RPP 02-07WORELAND AGMT. 3 If the City's maximum payment obligation is reached before the Consultant's Services under this Agreement are completed, consultant shall nevertheless complete the Work without liability on the City's part for further payment beyond the Maximum Contract Amount. 2.2. Method of Payment Unless some other method of payment is specified in the Schedule of Compensation (Exhibit "A", Sealed Dollar Cost Bid Schedule), in any month in which Consultant wishes to receive payment, no later than the tenth (10) working day of such month, Consultant shall submit to the City, in a form approved by the City's Finance Director, an invoice for services rendered prior to the date of the invoice. Such requests shall be based upon the amount and value of the services performed by Consultant and accompanied by such reporting data including an itemized breakdown of all costs incurred and tasks performed during the period covered by the invoice, as may be required by the City. City shall use reasonable efforts to make payments to Consultant within forty-five(45) days after receipt of the invoice or a soon thereafter as is reasonably practical. There shall be a maximum of one payment per month_ 2.3 Changes in Scone. In the event any change or changes in the Scope of Services is requested by the City, the Parties shall execute a written amendment to this Agreement, setting forth with particularity all terms of such amendment,including,but not limited to,any additional professional fees. An amendment may be entered into: (a) to provide for revisions or modifications to documents or other work product or work when documents or other work product or work is required by the enactment or revision of law subsequent to the preparation of any documents, other work product, or work; and/or (b) to provide for additional services not included in this Agreement or not customarily furnished in accordance with generally accepted practice in Consultant's profession. 2.4 Appropriations. This Agreement is subject to and contingent upon funds being appropriated therefore by the Palm springs City Council for each fiscal year covered by the Agreement. If such appropriations are not made, this Agreement shall automatically terminate without penalty to the City. 3. SCHEDULE OF PERFORMANCE 3.1 Time of Essence. Time is of the essence in the performance of this Agreement. The time for completion of the services to be performed by Consultant is an essential condition of this Agreement. Consultant shall prosecute regularly and diligently the Work of this Agreement according to the agreed upon schedule in the Consultant's Proposal (Exhibit"A"). 3.2 Schedule of Performance. Consultant shall commence the Services pursuant to this Agreement upon receipt of a written notice to proceed and shall perform all Services within the time period(s) established in the agreed upon schedule in the Consultant's Proposal, which is attached hereto as Exhibit "A" and is incorporated herein by reference. When requested by Consultant, extensions to the time period(s) specified in the Schedule of Performance may be approved in writing by the Contract Officer, but such extensions shall not exceed one hundred eighty (180) days cumulatively; however, the City shall not be obligated to grant such an extension. He\USER5\WPPUP1,IC\O7RFFS,RFP 0B•O7 MORELAND ACMT. 4 i 3.3 Force Majeure. The time period(s) specified in the Schedule of Performance for performance of the Services rendered pursuant to this Agreement shall be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of the Consultant (financial inability excepted), including, but not limited to, acts of God or of the public enemy, unusually severe weather, fires, earthquakes, floods, epidemics, quarantine restrictions, riots, strikes, freight embargoes, wars, and/or acts of any governmental agency, including the City, if Consultant, within ten (10) days of the commencement of such delay, notifies the City Manager in writing of the causes of the delay. The City Manager shall ascertain the facts and the extent of delay, and extend the time for performing the Services for the period of the enforced delay when and if in the judgment of the City Manager such delay is justified. The City Manager's determination shall be final and conclusive upon the Parties to this Agreement. In no event shall Consultant be entitled to recover damages against the City for any delay in the performance of this Agreement, however caused, Consultant's sole remedy being extension of the Agreement pursuant to this section. 3.4 Term. Unless earlier, terminated as provided elsewhere in this Agreement, this Agreement shall commence upon the effective date of this Agreement and continue in full force and effect until completion of the Services for an initial term of three (3) years with two (2) additional one (1) year options by mutual written agreement of the Parties, and pursuant to Section 32 above, unless extended by mutual written agreement of the Parties. 4. COORDINATION OF WORD 4.1 Representative of Consultant. The following principal of Consultant is hereby designated as being the principal and representative of Consultant authorized to act in its behalf with respect to the Services to be performed under this Agreement and make all decisions in connection therewith: Michael C. Moreland, Partner. It is expressly understood that the experience,knowledge, education, capability, expertise, and reputation of the foregoing principal is a substantial inducement for City to enter into this Agreement. Therefore, the foregoing principal shall be responsible during the term of this Agreement for directing all activities of Consultant and devoting sufficient time to personally supervise the services performed hereunder. The foregoing principal may not be changed by Consultant without prior written approval of the Contract Officer_ 4.2 Contract Officer. The Contract Officer shall be such person as may be designated by the City Manager of City, and is subject to change by the City Manager. It shall be the Consultant's responsibility to ensure that the Contract Officer is kept fully informed of the progress of the performance of the Services, and the Consultant shall refer any decisions which must be made by City to the Contract Officer. Unless otherwise specified herein, any approval of City required hereunder shall mean the approval of the Contract Officer, The Contract Officer shall have authority to sign all documents on behalf of the City required hereunder to carry out the terms of this Agreement. 4.3 Prohibition AtZainst Subcontracting or Assignments. The experience, knowledge, capability, expertise, and reputation of Consultant, its principals and employees, were a substantial inducement for City to enter into this Agreement. Therefore, Consultant shall HAUSERSMPPUB0007UPSTIT O&MMORELAND AGMT. Jr not assign the performance of this Agreement, nor any part thereof, nor any monies due hereunder, voluntarily or by operation of law, without the prior written consent of City- Consultant shall not contract with any other entity to perform the Services required under this Agreement without the prior written consent of City. If Consultant is permitted to subcontract any part of this Agreement by City, Consultant shall be responsible to City for the acts and omissions of its subcoutractor(s) in the same manner as it is for persons directly employed. Nothing contained in this Agreement shall create any contractual relationships between any subcontractor and City. All persons engaged in the Work will be considered employees of Consultant. City will deal directly with and will make all payments to Consultant. 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 consent of City. 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 Consultant,taking all transfers into account on a cumulative basis. In the event of any such unapproved transfer, including any bankruptcy proceeding, this Agreement shall be void. No approved transfer shall release Consultant or any surety of Consultant from any liability hereunder without the express written consent of City. 4.4 Independent Contractor. A. The legal relationship between the Parties is that of an independent contractor, and nothing herein shall be deemed to make Consultant a City employee. During the performance of this Agreement, Consultant and its officers, employees, and agents shall act in an independent capacity and shall not act as City officers or employees. The personnel performing the Services under this Agreement on behalf of Consultant shall at all times be under Consultant's exclusive direction and control. Neither City nor any of its officers, employees, or agents shall have control over the conduct of Consultant or any of its officers, employees, or agents, except as set forth in this Agreement. Consultant, its officers, employees, or agents shall not maintain an office or any other type of fixed business location at City's offices. City shall have no voice in the selection, discharge, supervision, or control of Consultant's employees, servants, representatives, or agents, or in fixing their number, compensation, or hours of service. Consultant shall pay all wages, salaries, and other amounts due its employees in connection with this Agreement and shall be responsible for all reports and obligations respecting them, including but not limited to social security income tax withholding, unemployment compensation, workers' compensation, and other similar matters. City shall not in any way or for any purpose be deemed to be a partner of Consultant in its business or otherwise a joint venturer or a member of any joint enterprise with Consultant. B. Consultant shall not incur or have the power to incur any debt, obligation, or liability against City,or bind City in any manner. C. No City benefits shall be available to Consultant, its officers, employees, or agents in connection with any performance under this Agreement. Except for professional fees paid to Consultant as provided for in this Agreement, City shall not pay salaries, wages, or other compensation to Consultant for the performance of Services under this Agreement. City Hk(JSRRS\WPPUBUC'0yRFPS\RFP 06-07MORELAND AGMT 6 shall not be liable for compensation or indemnification to Consultant, its officers, employees, or agents, for injury or sickness arising out of performing Services hereunder. If for any reason any court or governmental agency determines that the City has financial obligations, other than pursuant to Section 2 and Subsection 1.8 herein, of any nature relating to salary, taxes, or benefits of Consultant's officers, employees, servants, representatives, subcontractors, or agents, Consultant shall indemnify City for all such financial obligations. 5. INSURANCE 5.1 'Types of Insurance. Consultant shall procure and maintain, at its sole cost and I expense, in a form and content satisfactory to City, the insurance described herein for the duration of this Agreement, including, any extension thereof, or as otherwise specified herein, against claims which may arise from or in connection with the performance of the Work hereunder by Consultant, its agents, representatives, or employees. In the event the City Manager determines that the Work or Services to be performed under this Agreement creates an increased or decreased risk of loss to the City, the Consultant agrees that the minimum limits of the insurance policies may be changed accordingly upon receipt of written notice from the City Manager or his designee. Consultant shall immediately substitute any insurer whose A.M. Best rating drops below the levels specified herein. Except as otherwise authorized below for professional liability (errors and omissions) insurance, all insurance provided pursuant to this Agreement shall be on an occurrence basis. The minimum amount of insurance required hereunder shall be as follows: A- Errors and Omissions Insurance, Consultant shall obtain and maintain in full force and effect throughout the term of this Agreement, standard industry form professional liability (errors and Omissions) insurance coverage in an amount of not less than one million dollars ($1,000,000.00) per occurrence and two-million dollars ($2,000,000.00) annual aggregate, in accordance with the provisions of this section. (1) Consultant shall either: (a) certify in writing to the City that Consultant is unaware of any professional liability claims made against Consultant and is unaware of any facts which may lead to such a claim against Consultant; or (b) if Consultant does not provide the certification pursuant to (a), Consultant shall procure from the professional liability insurer an endorsement providing that the required limits of the policy shall apply separately to claims arising from errors and omissions in the rendition of services pursuant to this Agreement. (2) If the policy of insurance is written on a "claims made" basis, the policy shall be continued in full force and effect at all times during the term of this Agreement, and for a period of three (3) years from the date of the completion of the Services provided hereunder. In the event of termination of the policy during this period, Consultant shall obtain continuing insurance coverage for the prior acts or omissions of Consultant during the course of performing Services under the terms of this Agreement. The coverage shall be evidenced by either a new policy evidencing no gap in coverage, or by obtaining separate extended "tail" coverage with the present or new carrier or other insurance arrangements providing for complete coverage, either of which shall be subject to the written approval by the City Manager. k1,WSFR5VPPUBLJC17RFP8\RFP OS-O'AMOArI.AND AGMT 7 i (3) In the event the policy of insurance is written on an "occurrence" basis, the policy shall be continued in full force and effect during the term of this Agreement, or until completion of the Services provided for in this Agreement, whichever is later. In the event of termination of the policy during this period, new coverage shall immediately be obtained to ensure coverage during the entire cdurse of performing the Services under the terms of this Agreement. B_ Workers' Compensation Insurance. Consultant shall obtain and maintain, in full force and effect throughout the term of this Agreement, workers' compensation insurance in at least the minimum statutory amounts, and in compliance with all other statutory requirements, as required by the State of California. Consultant agrees to waive and obtain endorsements from its workers' compensation insurer waiving subrogation rights under its workers' compensation insurance policy against the City and to require each of its subcontractors, if any, to do likewise under their workers' compensation insurance policies. If Consultant has no employees, Consultant shall complete the City's Request for Waiver of Workers' Compensation Insurance acquirement form. C. Commercial General Liability Insurance_ Consultant shall obtain and maintain, in frill force and effect throughout the term of this Agreement, a policy of commercial general liability insurance written on a per occurrence basis with a combined single limit of at least one million dollars ($1,000,000.00) and two million dollars ($2,000,000.00) general aggregate for bodily injury and property damage including coverages for contractual liability, personal injury, independent contractors, broad form property damage, products and completed operations. D. Business Automobile Insurance. Consultant shall obtain and maintain, in full force and effect throughout the term of this Agreement, a policy of business automobile liability insurance written on a per occurrence basis with a single limit liability in the amount of one million dollars ($1,000,000.00)bodily injury and property damage. The policy shall include coverage for owned,non-owned, leased, and hired cars. E. Employer Liability Insurance. Consultant shall obtain and maintain, in full force and effect throughout the term of this Agreement, a policy of employer liability insurance written on a per occurrence basis with a policy limit of at least one million dollars ($1,000,000.00) for bodily injury or disease. 5.2 Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City Manager prior to commencing any work or services under this Agreement. Consultant guarantees payment of all deductibles and self- insured retentions. City reserves the right to reject deductibles or self-insured retentions in excess of$10,000, and the City Manager may require evidence of pending claims and claims history as well as evidence of Consultant's ability to pay claims for all deductible amounts and self-insured retentions proposed in excess of S I0,000. 5.3 Other Insurance Requirements. The following provisions shall apply to the x:\ussaS',wrru13wa07arrsutrr 08-07MORELANI)AGMT. 8 i insurance policies required of Consultant pursuant to this Agreement: I 5.3.1 For any claims related to this Agreement, Consultant's coverage shall be primary insurance as respects City and its officers, council members, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City and its officers, council members, officials, employees, agents, and volunteers shall be in excess of Consultant's insurance and shall not contribute with it. 5.3.2 Any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to City and its officers, council members, officials, employees, agents, and volunteers. 5.3.3 All insurance coverage and limits provided by Consultant and available or applicable to this Agreement are intended to apply to each insured, including additional insureds, against whom a claim is made or suit is brought to the full extent of the policies. Nothing contained in this Agreement or any other agreement relating to the City or its operations shall limit the application of such insurance coverage. 5.3.4 None of the insurance coverages required herein will be in compliance with these requirements if they include any limiting endorsement which substantially impairs the coverages set forth herein (e.g., elimination of contractual liability or reduction of discovery period), unless the endorsement has first been submitted to the City Manager and approved in writing, 5.3.5 Consultant agrees to require its insurer to modify insurance, endorsements to delete any exculpatory wording stating that failure of the insurer to mail written notice of cancellation imposes no obligation, or that any party will "endeavor" (as opposed to being required)to comply with the requirements of the endorsements. Certificates of insurance will not be accepted in lieu of required endorsements, and submittal of certificates without required endorsements may delay commencement of the Project. It is Consultant's obligation to ensure timely compliance with all insurance submittal requirements as provided herein. 5.3.6 Consultant agrees to ensure that subcontractors, and any other parties involved with the Project who are brought onto or involved in the Project by Consultant, provide the same minimum insurance coverage required of Consultant. Consultant agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. Consultant agrees that upon request, all agreements with subcontractors and others engaged in the Project will be submitted to the City for review. 5.3.7 Consultant acknowledges and agrees that any actual or alleged failure on the part of the City to infonu Consultant of non-compliance with any insurance requirement in no way imposes any additional obligations on the City nor does it n:,USERSIW1P'pC;0007RFPSUdrP OM7=MlI2 I,ANO AGMT. 9 waive any rights hereunder in this or any other regard. 5.3.8 Consultant shall provide proof that policies of insurance required herein expiring during the term of this Agreement have been renewed or replaced with other policies providing at least the same coverage. Proof that such coverage has been ordered shall be submitted prior to expiration. Endorsements as required in this Agreement applicable to the renewing or new coverage shall be provided to City no later than ten(10)days prior to expiration of the lapsing coverage. 5.3.9 Requirements of specific insurance coverage features or limits contained in this section are not intended as limitations on coverage, limits, or other requirements nor as a waiver of any coverage normally provided by any given policy. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue, and is not intended by any party or insured to be limiting or all-inclusive. 5.3.10 The requirements in this section supersede all other sections and provisions of this Agreement to the extent that any other section or provision conflicts with or impairs the provisions of this section. 5.3.11 Consultant agrees to provide immediate notice to City of any claim or loss against Consultant arising out of the Work performed under this Agreement and for any Other claim or loss which may reduce the insurance available to pay claims arising out of this Agreement. City assumes no obligation or liability by such notice,but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City, or to reduce or dilute insurance available for payment of potential claims. 5.3.12 Consultant agrees that the provisions of this section shall not be construed as limiting in any way the extent to which the Consultant may be held responsible for the payment of damages resulting from the Consultant's activities or the activities of any person or person for which the Consultant is otherwise responsible. 5.4 Sufficiency of Insurers. Insurance required herein shall be provided by authorized insurers in good standing with the State of California. Coverage shall be provided by insurers admitted in the State of California with an A.M. Best's Key Rating of I3 , Class VH, or better, unless such requirements are waived in writing by the City Manager or his designee due to unique circumstances. 5.5 Verification of Coverage. Consultant shall furnish City with both certificates of insurance and endorsements, including additional insured endorsements, affecting all of the coverages required by this Agreement. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All proof of insurance is to be received and approved by the City before work commences. City reserves the right to require Consultant's insurers to provide complete, certified copies of all required insurance policies at 11:IUSERS%WPPUBU0Q7kFP5aFP 09-07WfOREIaND AGMT 10 any time. Additional insured endorsements are not required for Errors and Omissions and Workers' Compensation policies_ Verification of Insurance coverage may be provided by: (1) an approved General and/or Auto Liability Endorsement Form for the City of Palm Springs or(2) an acceptable Certificate of Liability Insurance Coverage with an approved Additional Insured Endorsement with the following endorsements stated on the certificate: 1. "The City of Palm Springs, its officials, employees, and agents are named as an i additional insured... " ("as respects City of Palm Springs Contract No._"or for any and all work performed with the City"maybe included in this statement). 2. "This insurance is primary and non-contributory over any insurance or set insurance the City may have..," ("as respects City of Pahn Springs Contract No. or 'for any and all work performed with the City"may be included in this statement). 3. "Should any of the above described policies be canceled before the expiration date thereof, the issuing company will mail 30 days written notice to the Certificate Holder named." Language such as, "endeavor to" mail and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representative" is not acceptable and must be crossed out. 4. Both the Workers' Compensation and Employers' Liability policies shall contain the insurer's waiver of subrogation in favor of City, its elected officials, officers, employees, agents, and volunteers. In addition to the endorsements listed above, the City of Palm Springs shall be named the certificate holder on the policies. All certificates of insurance and endorsements are to be received and approved by the City before work commences. All certificates of insurance must be authorized by a person with authority to bind coverage, whether that is the authorized agent/broker or insurance underwriter. Failure to obtain the required documents prior to the commencement of work shall not waive the Consultant's obligation to provide them. 6. INDEMNIFIC.A.TION To the fullest extent permitted by law, Consultant shall indemnify, defend (at Consultant's sole cost and expense), protect and hold harmless City and its officers, council members, officials, employees, agents and volunteers and all other public agencies whose approval of the Project is required, (individually "Indemnified Party'; collectively "Indemnified Parties") against any and all liabilities, claims,judgments, arbitration awards, settlements, costs, demands, orders, and penalties (collectively "Claims"), including but not limited to Claims arising from injuries or death of persons (Consultant's employees included) and damage to properly, which Claims arise out of, pertain to, or are related to the negligence, recklessness, or willful misconduct of Consultant, its agents, employees, or subcontractors, or arise from Consultant's negligent, reckless, or willful performance of or failure to perform any term, provision, covenant, or condition of this Agreement ("Indemnified Claims"), but Consultant's 11:\USERS\\YPPUBLI(\07RFPSIRFP OM7W ORUAND AGMr. 11 i liability for Indemnified Claims shall be reduced to the extent such Claims arise from the negligence, recklessness, or willful misconduct of the City, its officers, council members, officials, employees, or agents_ Consultant shall reimburse the Indemnified Parties for any reasonable expenditures, including reasonable attorneys' fees, expert fees, litigation costs, and expenses that each Indemnified Party may incur by reason of Indemnified Claims. Upon request by an Indemnified Party, Consultant shall defend with legal counsel reasonably acceptable to the Indemnified Party all Claims against the Indemnified Party that may arise out of, pertain to, or relate to Indemnified Claims, whether or not Consultant is named as a party to the Claire proceeding. The determination whether a Claim "may arise out of, pertain to, or relate to Indemnified Claims" shall be based on the allegations made in the Claim and the facts known or subsequently discovered by the Parties. In the event a final judgment, arbitration award, order, settlement, or other final resolution expressly determines that Claims did not arise out of, pertain to, nor relate to the negligence, recklessness,or willful misconduct of Consultant to any extent,then City shall reimburse Consultant for the reasonable costs of defending the Indemnified Parties against such Claims, except City shall not reimburse Consultant for attorneys' fees, expert fees, litigation costs, and expenses that were incurred defending Consultant or any parties other than Indemnified Parties against such Claims. Consultant's indemnification obligation hereunder shall survive the expiration or earlier termination, of this Agreement until all actions against the Indemnified Parties for such matters indemnified hereunder are fully and finally barred by the applicable statute of limitations or, if an action is timely filed,until such action is final. This provision is intended for the benefit of third party Indemnified Parties not otherwise a party to this Agreement. 7. REPORTS AND RECORDS 7.1 Accounting Records. Consultant shall keep complete, accurate, and detailed accounts of all time, costs, expenses, and expenditures pertaining in any way to this Agreement. Consultant shall keep such books and records as shall be necessary to properly perform the Services required by this Agreement and to enable the Contract Officer to evaluate the performance of such Services. The Contract Officer shall have full and free access to such books and records at all reasonable times, including the right to inspect, copy, audit, and make records and transcripts from such records. 7.2 Reports. Consultant shall periodically prepare and submit to the Contract Officer such reports concerning the performance of the Services required by this Agreement as the Contract Officer shall require. Consultant hereby acknowledges that the City is greatly concerned about the cost of the Work and Services to be performed pursuant to this Agreement. For this reason, Consultant agrees that if Consultant becomes aware of any facts, circumstances, techniques, or events that may or will materially increase or decrease the cost of the Work or Services contemplated herein or, if Consultant is.providing design services, the cost of the project being designed, Consultant shall promptly notify the Contract Officer of such fact, circumstance, technique, or event and the estimated increased or decreased cost related thereto and, if Consultant is providing design services, the estimated increased or decreased cost HAUSEftS W?FUBLIC\07RFP5'Rrr 09-07MORCLAND AGMT- 12 i estimate for the project being designed. 7.3 Ownership of Documents. All drawings, specifications, reports, records, documents, memoranda, correspondence, computations, statements, schedules, and other materials prepared by Consultant, its employees, subcontractors, and agents in the performance of this Agreement shall be subject to immediate review and inspection upon the request of the Contract Officer and either originals or copies of such materials, including all audit documentation and working papers, shall be promptly delivered to City upon request and reasonable notice of the Contract Officer, and Consultant shall have no claim for further employment or additional compensation as a result of the exercise by City of its full right of access to all audit documents, working papers, and other materials hereunder. Any use of such completed documents for other projects and/or use of incomplete documents without specific written authorization by the Consultant will be at the City's sole risk and without liability to Consultant, and the City shall indemnify the Consultant for all damages resulting therefrom. Consultant may retain copies of such documents for its own use. Consultant shall have an unrestricted right to use the concepts embodied therein. Consultant shall ensure that all its subcontractors shall provide for assignment to City of any documents or materials prepared by them, and in time event Consultant fails to secure such assignment, Consultant shall indemnify City for all damages resulting therefrom. Pursuant to Business and Professions Code Section 5097, Consultant shall maintain all written audit documentation that is prepared or compiled in providing services according to this audit engagement for a minimum of seven years. 7.4 Release of Documents_ All drawings, specifications, reports, records, documents, and other materials prepared by Consultant in the performance of services under this Agreement shall not be released publicly without the prior written approval of the Contract Officer. All information gained by Consultant in the performance of this Agreement shall be considered confidential and shall not be released by Consultant without City's prior written authorization. 7.5 Audit and Inspection of Records. After receipt of reasonable notice and during the regular business hours of City, Consultant shall provide City, or other agents of City, such access to Consultant's books, records, payroll documents, and facilities as City deems necessary to examine, copy, audit, and inspect all accounting books, records, work data, documents, and activities directly related to Consultant's performance under this Agreement. Consultant shall maintain such books, records, data, and documents in accordance with generally accepted accounting principles and shall clearly identify and make such items readily accessible to such parties during the term of this Agreement and for a period of three (3) years from the date of final payment by City hereunder. S. ENFORCEMENT OF AGREEMENT 8.1 California Law and 'Venue. This Agreement shall be construed and interpreted both as to validity and as to performance of the Parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim, or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in such County, and Consultant covenants and agrees IIALISFUMPPUBLIC\079MMUP OS-0-AMORHLAND AGMT. 13 to submit to the personal jurisdiction of such court in the event of such action. 8.2 Tnt_ernretation. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the Parties. The terms of this Agreement are contractual and the result of negotiation between the Parties. Accordingly, any rule of construction of contracts (including, without limitation, California Civil Code Section 1654) that ambiguities are to be construed against the drafting party, shall not be employed in the interpretation of this Agreement. The caption headings of the various sections and paragraphs of this Agreement are for convenience and identification purposes only and shall not be deemed to limit,expand,or define the contents of the respective sections or paragraphs. 8.3 Termination. City may terminate this Agreement for its convenience at any time, without cause, in whole or in part, upon giving Consultant thirty (30) days written notice. Upon such notice, City shall pay Consultant for Services performed through the date of termination. Upon receipt of such notice, Consultant shall immediately cease all work under this Agreement, unless the notice provides otherwise. Thereafter, Consultant shall have no further claims against the City under this Agreement. Upon termination of the Agreement pursuant to this section, Consultant shall submit to the City an invoice for work and services performed prior to the date of termination. In addition, the Consultant reserves the right to terminate this Agreement at any time, with or without cause, upon sixty (60) days written notice to the City, except that where termination is due to material default by the City, the period of notice may be such shorter time as the Consultant may determine. 8A Default of Consultant. A. Consultant's failure to comply with any provision of this Agreement shall constitute a default. B. If the City Manager, or his designee, determines that Consultant is in default in the performance of any of the terms or conditions of this Agreement, he/she shall notify Consultant in writing of such default. Consultant shall have ten(10) days, or such longer period as City may designate, to cure the default by rendering satisfactory performance. In the event Consultant fails to cure its default within such period of time, City shall have the right, notwithstanding any other provision of this Agreement, to terminate this Agreement without further notice and without prejudice of any remedy to which City may be entitled at law, in equity, or under this Agreement. Consultant shall be liable for any and all reasonable costs incurred by City as a result of such default. Compliance with the provisions of this section shall not constitute a waiver of any City right to take legal action in the event that the dispute is not cured, provided that nothing herein shall limit City's right to terminate this Agreement without cause pursuant to Section 8.3. C. If termination is due to the failure of the Consultant to fulfill its obligations under this Agreement, City may, after compliance with the provisions of Section SAA take over the work and prosecute the same to completion by contract or otherwise, and the Consultant shall be liable to the extent that the total cost for completion of the Services required hereunder exceeds the Maximum Contract Amount (provided that the City shall use reasonable 1JAT3EF5\WPruBLic\071WTS[vP 0&07WORBLAND AGM L 14 i efforts to mitigate such damages), and City may withhold any payments to the Consultant for the purpose of set-off or partial payment of the amounts owed the City as previously stated. The withholding or failure to withhold payments to Consultant shall not limit Consultant's liability for completion of the Services as provided herein. 8.5 Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the Party against whom enforcement of a waiver is sought. Any waiver by the Parties of any default or breach of any covenant, condition, or term contained in this Agreement, shall not be construed to be a waiver of any subsequent or other default or breach, nor shall failure by the Parties to require exact, full, and complete compliance with any of the covenants, conditions, or terms contained in this Agreement be construed as changing the terms of this Agreement in any manner or preventing the Parties from enforcing the full provisions hereof. 1 8.6 Ri hts and Remedies Cumulative. Except with respect to rights and remedies expressly declared to be "elusive in this Agreement, the rights and remedies of the Parties are cumulative and the exercise by either Party of one or more of such rights or remedies shall not j preclude the exercise by it, at the same or different times,of any other rights or remedies for the same default or any other default by the other Party. 8.7 Legal Action. In addition to any other rights or remedies, either Party may take legal action, in law or in equity, to cure, correct or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain declaratory or injunctive relief,or to obtain any other remedy consistent with the purposes of this Agreement_ 8.8 Attorney Fees. In the event any dispute between the Parties with respect to this Agreement results in litigation or any non judicial proceeding, the prevailing Party shall be entitled, in addition to such other relief as may be granted, to recover from the non-prevailing Party all reasonable costs and expenses, including but not limited to reasonable attorney fees, expert consultant fees, court costs and all fees, costs, and expenses incurred in any appeal or in collection of any judgment entered in such proceeding. To the extent authorized by law, in the event of a dismissal by the plaintiff or petitioner of the litigation or non judicial proceeding within thirty (30) days of the date set for trial or hearing, the other Party shall be deemed to be the prevailing Party in such litigation or proceeding. 9. CITY OFFICERS AND EMPLOYEES.NON-DISCRDHNATION 9.1 Non-liability of City Officers and Employees. No officer or employee of the City shall be personally liable to the Consultant, or any successor-in-interest, in the event of any default or breach by the City or for any amount which may become due to the Consultant or to its successor,or for breach of any obligation of the terms of this Agreement. 9.2 Conflict of Interest. No officer or employee of the City shall have any financial interest, direct or indirect,in this Agreement nor shall any such officer or employee participate in any decision relating to the Agreement which effects his financial interest or the financial interest of any corporation, partnership,or association in which he/she is, directly or indirectly,interested H.�USERS',W1PU5LI007RPPS\RFP 08.073MORELANU AGMT. 15 in violation of any state statute or regulation. Consultant warrants that is has not paid or given and will not pay or give any third party any money or other consideration in exchange for obtaining this Agreement. 9.3 Covenant Against Discrimination. In connection with its performance under this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race,religion, color, sex, age,marital status, ancestry, or national origin. Consultant shall ensure that applicants are employed, and that employees are treated during their employment, without regard to their race, religion, color, sex, age, marital status, ancestry, or national origin. Such actions shall include, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. 10. NUSCELLANEOUS PROVISIONS 10.1 Patent and Copyright Infringement. A. To the fullest extent permissible under law, and in lieu of any other warranty by City or Consultant against patent or copyright infringement, statutory or otherwise, it is agreed that Consultant shall defend at its expense any claim or suit against City on account of any allegation that any item furnished corder this Agreement, or the normal use or sale thereof arising out of the performance of this Agreement, infringes upon any presently existing U.S. letters patent or copyright and Consultant shall pay all costs and damages finally awarded in any such suit or claim, provided that Consultant is promptly notified in writing of the suit or claim and given authority,information and assistance at Consultant's expense for the defense of same, and provided such suit or claim arises out of, pertains to, or is related to the negligence, recklessness or willful misconduct of Consultant However, Consultant will not indemnify City if the suit or claim results from: (1) City's alteration of a deliverable, such that City's alteration of such deliverable created the infringement upon any presently existing U.S. letters patent or copyright; or (2) the use of a deliverable in combination with other material not provided by Consultant when it is such use in combination which infringes upon an existing U.S. letters patent or copyright. B. Consultant shall have sole control of the defense of any such claim or suit and all negotiations for settlement thereof, Consultant shall not be obligated to indemnify City under any settlement made without Consultant's consent or in the event City fails to cooperate in the defense of any suit or claim, provided, however, that such defense shall be at Consultant's expense. If the use or sale of such item is enjoined as a result of the suit or claim, Consultant, at no expense to City, shall obtain for City the right to use and sell the item, or shall substitute an equivalent item acceptable to City and extend this patent and copyright indemnity thereto. 10.2 Notices. All notices or other couununications required or permitted hereunder shall be in writing, and shall be personally delivered, sent by pre-paid First Class U.S. Mail, registered or certified mail, postage prepaid, return receipt requested, or delivered or sent by facsimile with attached evidence of completed transmission, and shall be deemed received upon the earlier of (i) the date of delivery to the address of the person to receive such notice if H:\USERS\WPPIlt3faG07RFPS\RFP 08-07W1OREI,AND ACMT 16 delivered personally or by messenger or overnight courier; (ii) five (5) business days after the date of posting by the United States Post Office if by mail; or (iii) when sent if given by facsimile. Any notice, request, demand, direction, or other communication sent by facsimile must be confirmed within forty-eight (48) hours by letter mailed or delivered. Other forms of electronic transmission such as e-mails, text messages, instant messages are not acceptable manners of notice required hereunder_ Notices or other communications shall be addressed as follows: To City: City of Palm Springs Attention: City Manager&City Clerk 3200 E_ Tahquitz Canyon Way Palm springs, California 92262 Telephone: (760)323-8204 Facsimile: (760) 323-8332 To Consultant: Moreland&Associates, Inc. Attention:Michael C.Moreland,Partner 1201 Dove Street, Suite 680 Newport Beach, CA 92660 Telephone(949)221-0025 Facsimile: (949)221-0035 I 10.3 Entire Agreement. This Agreement constitutes the entire agreement between the Parties and supersedes all prior negotiations, arrangements, agreements, representations, and understandings, if any, made by or among the Parties with respect to the subject matter hereof. No amendments or other modifications of this Agreement shall be binding unless executed in writing by both Parties bereto,or their respective successors, assigns,or grantees. 10.4 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner•as to be effective and valid under applicable law, but if any provision of this Agreement shall be determined to be invalid by a final judgment or decree of a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the reminder of that provision, or the remaining provisions of this Agreement unless the invalid provision is so material that its invalidity deprives either Party of the basic benefit of their bargain or renders this Agreement meaningless. 10.5 Successors in Interest This Agreement shall be binding upon and inure to the benefit of the Parties' successors and assignees. 10.6 Third Party peneficiuv. Except as may be expressly provided for herein, nothing contained in this Agreement is intended to confer, nor shall this Agreement be construed as conferring, any rights, including, without limitation, any rights as a third-party beneficiary or otherwise,upon any entity or person not a party hereto. 10.7 Recitals. The above-referenced Recitals are hereby incorporated into the Agreement as though fully set forth herein and each Parry acknowledges and agrees that such ttMsas%wrrueeie107RFPS\ITT0�-Meo3elANunaMT 17 1 Party is bound, for purposes of this Agreement,by the same. 10.8. Corporate Authority. Each of the undersigned represents and warrants that (i) the Party for which be or she is executing this Agreement is duly authorized and existing, (ii)he or she is duly authorized to execute and deliver this Agreement on behalf of the Party for which he or she is signing, (iii)by so executing this Agreement,the Party for which he or she is signing is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other Agreement to which the Party for which he or she is signing is bound. [SIGNATURE PAGE SEPARATELY ATTACKED] 11AUSERS%W PPUBL1007RFMRFP 08.07MORELAND AGMT. 18 i IN WITNESS WHEREOF, the Parties have executed and entered into this Agreement as of the date first written above. "CITY" CITY OF PALM SPRINGS, a California chatter law city and munici rporation "- ` David H. Ready City Manager ATTEST: APPROVED BY CITY COUNICIL S TIIOMPSON, ;5ity Clerk I APPROV AS TO FORM: DOUGLAS C. HOLLAND, City Attottcy // "CONSULTANT" Moreland&Associates, Inc. Michael C. Moreland,President By: Kathryn 1Beseau,Vice President a-USLRs\wPPUBLIC07RFnWP os-a'AMoRruND ACNIT. 19 E31MIT"A» PROPOSAL FOR AUDIT SERVICES FOR THE CITY OF PALM SPRINGS PREPARED AND SUBMITTED MY MORELAND &ASSOCIATES,INC. DATED MAY 11,2007 f I i 5247ai f a y �kfr y. d tf k q� r C PROPOSAL FOR AUDIT 5 1�5 � fj a. ' CITY OF PALM SPRING MAY 11, 2007 d, (co" .{�"' ��,�'•t.�..;t:�a'i".�� Y�'rR'i-�� E' .r�r .�. � r 'v�F^ti. �'S; ': '."'�"'� �. - b i.V ,}c; :�r L '.�l w4a�� fRN"•`K.^•r-or�i' ' a i. 'j f'• �,� " •r r. . .+w.:t :w }di}w •`�Y `.'G1.sn,�" y,1". ``taati��.� 55` i .} ''ff • 4� by 1 I f1Kll�:vy}{s»'+'ai'A'.�aiSlLl''.11 r� L ti i i ry _1 .1 j TITLE PAGE I RFP SUBJECT:' AUDIT PROPOSAL CITY OF PALM SPRINGS RFP No. 08-07 NAME OF PROPOSING FIRM; MORELAND &ASSOCIATES, INC. LOCAL ADDRESS: 141 DOVE STREET, SUITE 686 NEWPORT BEACH, CA 92660 TELEPHONE NUMBER: (949) 221-0025 NAME OF CONTACT PERSONS MICHAEL C. MORELAND 1 EMAIL OF CONTACT PERSON: mmoreland@moreland-assoe.com 1 DATE: MAY 11, 2067 BMW I I s ------ ---.. .. ...... .. . .. .. . i • l� \ i TABLE OF CONTENTS ' SECTION PAGE Letter of Transmittal 1 I Independence 4 License to Practice in California 4 i Firm Qualifications and Experience 4 Partner, Supervisory and Staff Qualifications and Experience 10 Similar Engagements with Other Govemment Entities 16 Specific Audit Approach 17 i Identification of potential Audit Problems 23 l - Response to City Standard Two-Party Agreement 24 Appendix A--Latest External Quality Control Review Report ( Appendix 8-Certificate of Insurance I j COVE Si GBO ore and & � AW. NEWOr BEACH.CALJFORN A92G0 M CEFITIFIFD PUBLIC ACCOUNTANTS 576 AANCHMS CANE.SUITE 2W gory UARC0.9,CA92b69 1 TELEFHONE(949)2:1-OU25 May l l, 2007 Mr. Craig A..Graves Director of Finance(rreasurer City of Palm Springs 3200 East Tahquiiz Canyon Way Palm Springs, CA 922112 Dear Mr. Graves: We are pleased to present this proposal of audit services to the City of Palm Springs. We have addressed each of the specifications included in your Request for Proposal. We have also provided significant information about our service approach to auditing. I For the year ended June 30, 2006, we audited the financial statements of twenty-eight California . cities, twenty-five redeveiopment agencies, and many other governmental entities. Our success in providing professional services to your specialized industry is in-part due to our dedication to the development and implementation of the accounting and and-Ring issues relating to govemmental accounting. Our knowledge of your industry is best demonstrated by the fact that for the past fifteen years, over ten percent of the "outstanding" awards in financial reporting issued by the California Society of Municipal Flnahce Officers (CSMFO) .were issued to our clients, Additionally, approximately ten percent of the Certificates of Achievement for Excellence in Financiat Reporting issued by the Government Finance Officers Association (GFOA) to California cities during the past fifteen years were issued to our clients. We are very proud of our part in these achievements. We are the best qualified f3rin to perform this engagement because we understand that we provide a service to our clients. We provide an auditapproach that satisfies all of the technical requirements without forgetting that we provide a service. You will have easy access to each of the audit team members. I will personally supervise all phases of audit planning, detailed audit testing,and report preparation. We encourage you to verify our level of service as well as the availability of Ms. Nipa Shah, the engagement manager, and myself with the references provided in our proposal. We think you will be pleased at how highly our-,clients praise,the quality of service we provide. Throughout the year you should feel Comfortable in calling us for advice, as we are never'too busy to meet the needs of our clients. Our clients rely on us to help keep them up-to-date on hew developments affecting their industry, because they recognize our commitment to serving the needs of local government. Briefly stated, the scope of services includes the following for each of the three years ending June 30, 2009 with an option to extend for two additional one year periods: - A financial audit of the basic financial statements in the CWs Comprehensive Annual Financial Report including the typing of the CAPR and providing one photo:ready original to the City. A financial and compliance audit of the Community Redevelopment Agency of the City of Palm Springs. Mr. Craig A. Graves Director of Finance/treasurer City of Palm Springs May 11,2007 Page 2 - An expansion of the Citys financial audit to meet the requirements of the Single Audit Act, I including the requirements of Circular OMB Circular A-199, Audits of State and Local Governments,and Non-Profit Organizations and preparation of the Data Collection Form. - A Report on Internal Control Over financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditina Standard . This letter will include significant deficiencies and material weaknesses, if any, and is either included in the Single Audit Report or issued separately. - The application of agreed-upon procedures in connection with the annual calculation of the . appropriations limit as required by Section 1.5 of Article XIIIB of the California Constitution. On an as-needed basis, perform a compliance review of the agreement between the City and the management company operating.the City's municipal golf course. - Review and summarize the Community Redevelopment Agency's Disposition and Development Agreements to ensure transactions are properly recorded. A' management letter addressed to the City Manager containing our comments and recommendations for improving.the accounting procedures and the systems of internal control (control deficiencies not considered significant/material weaknesses). A fetter to the City Council containing required communications about the audit process. Provide if necessary, a written report of all irregularities and illegal acts or indications of illegal acts during the audit process to the City Manager, City Attorney and the Director of Finance. Keep the City informed of state and national developments affecting accounting, auditing and financial reporting Including providing guidance on implementation of GASB requirements. Optional services which will be provided as requested to the City and its component units are as follows: - Prepare the City's Annual State Controller's Report. - Prepare the Annual State Controfier's Report for the Redevelopment Agency. - Prepare the Annual Street Report. - Prepare the-financial statements for the Financing Authority of the City of Palm Springs. It is noted that the firm will be responsible for preparing and word processing all financial and compliance reports. We have the experience and the resources to complete the above scope of services within your timing requirements. In addition,.it is our practice to provide continuity of staff during the entire term of the agreement,at the partner, manager,and senior accountant level. As you read through our proposal, we hope you will recognize the philosophy we follow regarding our relationship with clients. We believe this is what sets us apart from our competition. Our philosophy can be summarized In the following concepts: We recognize that our product is a service. We are careful to consider the comfort level of our client's staff while maintaining professional skepticism. We recognize that our work is accomplished by working with City staff, yet our client is the City Council. 2 f Mr. Craig A.Graves Director of FlnancWreasurer City of Palm Springs May 11,2007 Page 3 Thank you for providing us the opportunity to presentlhis proposal, as We would very much like to become the auditors for the City of Palm.Springs. We are committed to performing the work within the given time perlud. This is a firm and irrevocable offerfor.the fiscal years 2006-07, 2007-08 and 2008-09. 1 am entitled to represent Moreland & Associates, Ina, empowered to submit this proposal, and authorized to sign a contract with the City of Palm Springs, We sincerely look forward to working with you and other City staff and the City Council. We would be pleased to provide any additional information or answer any questions you may have regarding our proposal. Very truly yours, MORELAND&ASSOCIATES, INC. •r Michael C. Moreland, Partner MCM:sr i 3 r I Ii I INDEPENDENCE jOur firm and.each staff member are independent of the City of Palm Springs and each of its component units and thus meet the independence requirement as defined by generally. accepted auditing standards and the U.S. Government Accountability OfFce's Government Auditing Standards. We have not provided any services to the City of Palm Springs or its component units f which would impair our independence in the past five years. However, the firm shall Provide written notice of any professional relationships entered into during the period of ` this agreement, LICENSE TO.PRACTICE IN CALIFORNIA 1 The firm and all assigned key professional staff 'are properly licensed to practice in California and have compiled with the continuing education requirements concerning iauditing of governmental entities. FIRM QUALIFICATIONS AND EXPERIENCE ABOUT OUR E/RM Moreland & Associates, Inc. is a large regional •firm of certified public accountants providing :auditing, accounting, consulting, and temporary personnel services to numerous governmental clients. Our services are provided from offices in Newport Beach and San Marcos by sixty-five professionals and six support staff. Services to the City of Palm Springs will be provided by our Newport Beach office. Our fine and all of our employees are strongly committed to governmental accounting. All of our professional audit staff have municipal government auditing experience. All are employed on a full-time basis. Over ninety-five percent of our work involves services to local government clients. The engagement partner, Mr. Moreland, is very active in all professional organizations in California which deal with municipal finance. Much of his involvement is detailed in his resume, which is included in the next section of our proposal. All of the staff identified in this proposal are quite active in their commitment to governmental accounting, as indicated in their resumes. QUALITY CONTROL REVIEW Our firm has enrolled in the Quality Control Review Program offered by,the American Institute of Certified Public Accountants. Our most recent quality review was completed_ in June 2006 and included specific government engagements. We received an unqualified opinion. A copy of the report is included in Appendix A. Moreland & Associates, Inc. has not had any federal or state desk reviews or field reviews of its audits during the past five years. There is not now nor has there ever been any regulatory action or disciplinary action taken against Moreland & Associates, Inc. Moreland & CERnFIED PUBLIC ACCOUNTANTS 4 I � I I , CURRENT GOVERNMENTAL CLIENTS AND DIRECTLYRELATED EXAERIi NCE The following is a list of the financial audits of governmental entities that we performed for the year ended June 30, 2006. Nearly all of the audits were perfonned in accordance j with the standards applicable to financial audits contained in -Government Auditinn I Standards. Approximately thirty-five of the audits were expanded to include the requirements of the Single Audit Act, including the requirements of OMB Circular A-133 and the preparation of the Data Collection Form. All of the redevelopment agency audits also included a compliance audit in accordance with the requirements cif the "Guidelines for Compliance Audits of California Redevelopment Agencies", issued by the State Controller's Office. Approximately twenty-five of the clients Will receive awards in financial reporting from the GFOA and/or the CSMFO. CITIES — Cities of Agoura Hills, Cathedral City, Compton, Covina, Chula Vista, Del Mar, East Palo Alto, Fountain Valley, Garden Grove, Half Moon Bay, Hughson, La Canada Flintridge, La Habra, Lawndale, Monterey, Monterey. Park, Rolling Hills Estates, San Buenaventura, San Clemente, San Ramon, Santa Ana, Santa.Fe Springs, Seal Beach, Seaside, Simi Valley, Stanton, Tustin, and Westlake Village. Eleven of these cities have been clients for over five years and the remaining seventeen,cities have selected us as their auditors for a three or more year period. i — Community Redevelopment Agencies of the Cities of Agoura Hills, Cathedral City, f Compton, Covina, Chula Vista, East Palo Alta, Fountain Valley, Garden Grove, Half i Moon Bay, Hughson, La Canada Flintridge, La Habra, Lawndale, Monterey, Monterey Park, San Buenaventura, San Clemente, San Ramon, Santa'Ana, Santa Fe Springs, Seal Beach, Seaside, Simi Valley, Stanton, and Tustin. SPECIAL DISTRICTS - Imperial Irrigation District. Altadena Library District. - Mesa Consolidated Water District. Municipal Water District of.Orange County(MWDOC), - Western Riverside County Regional Wastewater Authority. - Midway City Sanitary District. - Sewer Authority Mid-Coastside. - Palos Verdes Peninsula Transit Authority. - Palos Verdes Library District. Placentia Library District. Orange County Local Agency Formation Commission (LAFCO). - Agoura Hills and Calabasas Community Center Authority. t - Metro Cities Fire Authority. Orange County-City Hazardous Materials Emergency_Response Authority. Emerald Bay Service District. Moreland & 4jo�, that. f CEfiBFED PUMIC ACCOUNTANTS 5 i - Orange County Cemetery District. - Riverside County Local Agency Formation Commission (LAFCO). - San Bernardino County Local Agency Formation Commission (LAFCO). - Three Arch Bay Community Services District. f I OTHER GOVERNMENT AGENCIES f - California Avocado Commission. - West San Gabriel Valley Consortium, . - Southeast Area Social Services Funding Authority. l - Santa Barbara County Association of Governments. - L.A. IMPACT. OTHER SERVICES Our ability to provide consulting services is best demonstrated by our many years of successfully Serving the governmental industry as described in ;out resumes. We provide a wide variety of consulting services to our government clients. The following is a partial list of previously provided services, which demonstrate the range of services f we provide. - City of West Covina - We performed a management audit of all-activities within the Finance Department. f - City of El Segundo - Reviewed records supporting business licenses at selected businesses within the City. I - City of Fullerton - Reviewed golf course revenues in order to determine compliance ! with the City's golf course management agreement. r - City of Oceanside - The annual review of card room revenues. The periodic application of agreed-upon procedures relating to the outside management of a mobile home park. - City of Santa Fe Springs - Reviewed tax increments allocated by the County of Los Angeles to each Redevelopment Agency Project Area since inception of the project areas. - County of Orange Treasurer - We .perform certain agreed-upon, procedures quarterly and annually to determine compliance with the CourAys investment policy. and other matters. - California Avocado Commission - Assisted staff in the documentation of accounting and budgeting policies and procedures. City of Hawaiian Gardens =Monthly and quarterly monitoring of casino operations. - City of Compton — Monthly and quarterly monitoring of casino operations r - .City of Oxnard -Annually we review documentation supporting billings to the City by an outside recycling and transfer station, We perform periodic audits of the financial statements of the golf course management company. West San Gabriel Valley Consortium - We performed a management and operations audit of-all of the major operating functions of the Consortium, We also developed procurement policies and procedures, and a cost allocation [flan. Moreland & ��, C�6ic. CERTIFIED PUBLIC ACCOUNTANTS 6 I f I We performed a study to determine if the internal control procedures were adequate and functioning properly within the Parks and Recreation Department of a large city. The major systems reviewed were cash receipts/revenues, purchasing/accounts , payable/contracting, and payroll for contract employees. ( - We have reviewed franchise payments and/or contract compliance from various. } cable and disposal companies for the Cities of Encinitas: Escondido, Fountain Valley, Huntington Beach, Oceanside, Temecula, Yorba Linda and other cities. - We have reviewed Transient Occupancy Tax payments from some or all hotels/motels for the Cities of Bell Gardens, Encinitas, Escondido, Healdsburg, Laguna Beach, Monterey Park, Pomona, Santa Ana, Santa Fe Springs, Seal Beach, j Solana Beach, Solvang, Tustin and many other cities. 1 - We have provided internal auditing services to the Cities of Burbank and Manhattan Beach and the County of Orange. Recently, the General Accounting Office provided detailed guidance regarding auditor Independence when performing an audit in accordance with Government Auditing Standards. The standard for nonaudit services is based on two principles: Auditors should not perform management functions or make management decisions. I _ Auditors should not audit their own work or provide nonaudit services in situations where amounts or services involved are significant/material to the subject matter of the audit. While these two principles are not new, the application of these principles to specific nonaudit services has changed considerably as a result of the new guidance. Of course there are many nonaudit services such as the evaluation of internal controls or the application of agreed-upon procedures that we can continue to provide.to audit clients. Should the need arise for nonaudit services during our tenure as auditors, we will I discuss the scope of work with you and assist you in determining the most appropriate course of action for the City. I THE ANNUAL cALCULATIoN of THE APPROPRIATIONS LIMIT Michael Moreland was a member of the League of California Cities Gann Appropriation i Limit Task Force. The Task Force developed new guidelines for the computation of the [ annual appropriations limit as a result of the passage of Proposition 111. Mr. Moreland, on behalf of the California Society of Certified Public Accountants, assisted the Task 1 Force by developing the appropriate procedures and reporting in connection with the application of agreed-upon procedures relating to the annual calculation .of, the appropriations limit as part of the annual financial audit process. MANAGEMENT LETTERS } We issue management letters every year in connection with nearly all of our I governmental clients. Unless there arei unusual circumstances, the.management letters are.issued at the conclusion of the audit concurrent with the issuance of the audited financial statements. arelatid & t�&oyW i, Inc. cRnFleo PUBLIC ACCOUNrAMM 7 i it Our management letters contain observations and recommendafions'that are meaningful to our clients. They are intended to be constructive and are in fact viewed in a very positive i manner by our clients„ Management letters are always reviewed in draft form with appropriate client personnel before they are issued. FEDERAL AND STATE GRANTS AND THE SINGLE AUDIT Today, nearly all governmental entities are receiving significant revenues from Federal and State grants. We have audited countless federal and state grants in connection with the governmental clients we have served. We have also audikrad numerous federal and state grants in connection with not-for-profit entity audits. Our working papers will be retained for seven years. They will be available to the City, 1 federal agencies, state agencies and other parties at the direction of the City. In addition, we will respond to the reasonable inquiries of successor auditors and allow them to review wonting papers relating to matters of continuing accounting significance. ASSISTANCE IN GOVERNMENTAL DEBT OFFERINGS Today, because of the changing debt market and the changes in financing vehicles available to local government, governmental entities almost . always utilize debt consultants in developing a financing strategy and the appropriate debt documents. I When requested, we assist our clients in the review of the official statement in connection with municipal debt issues. We also issue consent letters upon request. f Many, in the firm have assisted in local government debt issues. FRANCHISE AUDITS As mentioned above, we have reviewed franchise fees based on gross receipts in connection with cable and refuse companies for many cities iircluding Encinitas, Fountain Valley, Huntington Beach, Laguna Hills, Lake Forest, Mammoth Lakes, Mission Viejo, Newport Beach, Oceanside, Oxnard, Temecula, West Covina, and Yorba' Linda. Additionally, we have performed tests of gross receipts on behalf of numerous cities in connection with various recreational activities or sporting events such as golf, ( tennis, horseback riding, swimming and auto racing. AVAILABILITY Throughout the year you and your staff should feel comfortable calling us for advice. We should be viewed as another resource available to you in carrying out your financial and administrative duties. We will contact City staff throughout the.year.-to discuss how f current accounting pronouncements may aff2ct your accounting or financial reporting. We believe our ability to quickly respond to your needs and to keep you informed should I be a significant consideration in selecting us as your auditors. Please verify our level of service and the availability of Mr. Moreland with the references provided below. Our staff is, of course, available to provide accounting, auditing or consulting services throughout the year. I M oreland & � ,CEPMF D pUBUO ACCOUNrANM ASSISTANCE IN RECE/1fiNG AWARDS f Mr. Moreland and Ms. Beseau developed a class "Train the Reviewers" for the California Society of Municipal Finance Officers for the reviewers of GASB Statement No. 34 Comprehensive Annual Financial Reports; which they taught in both Northern and Southern California; for two years. In 1990, Mr. Moreland developed a program entitled "How to Prepare an Award-Winning CAFR" for the California Society of Municipal Finance Officers. He participated in presenting the program on seven occasions to over two hundred attendees. Each year, four of our staff participate in the review of annual financial reports under the California Award Program. For over fifteen years, Mr. Moreland has been a member of the final committee reviewing reports under the California Award Program. During the past several years, we have assisted approximately fifty cities in receiving "outstanding" awards under the California Award Program, Most.of these cities have also received Certificates of Achievement from the GFQA_ For the year ended June 30, 2005, all of our clients that applied to the CSMFO received "outstanding" awards in financial reporting. All of the staff identified in our proposal have experience in preparing award- winning CAFR's_ 1M'PLiFMENTAT/ON OF GASB PRONOUNCEMENTS Although you have already implemented GASB Statement No. 34, we would like to highlight our expertise in this area. Mr. Moreland was a member of the GASB Task Force on the New Reporting Model. He was the only CPA practitioner in California to be I a member of the Task Force. The Task Force met one or two days each year in New York with the Governmental Accounting Standards Board and their staff to advise the Board on the project and to react to suggestions and positions taken by the Board. Throughout the project, the Task Force reviewed concept papers, drafts of documents prepared by the Board and their staff, and generally served as a sounding board for considered ideas. The project resulted in the issuance of GASB Statement No. 34. i Since the issuance of GASB Statement No. 34, Mr. Moreland has made presentations on the subject to the Alameda County City Managers Association, the Southern California Chapter of the American Public Works Association (three times), the Annual Conference of the California chapter of the American Public Works Association, and 1 the Orange County Municipal Public Works Association. Additionally, he has made presentations on GASB Statement No. 34 to the San Diego Chapter, two Los Angeles ` Chapters and the Orange County Chapter of the California Society of Municipal Finance Officers. Mr. Moreland advised the American Institute of Certified Public Accountants 1 (AICPA) in revisions to their State and Local Government Industry Audit Guide to incorporate issues relating to GASB Statement No. 34. As new GASB statements are issued, the California Committee on Municipal Accounting (CCMA) develops white papers to mssist finance directors and their auditors { implement the new requirements in California. Mr. Moreland, as Go-Chairman of. 1 Moreland & awovf�, �. GUMMED MULIG ACCOUNTANTS 9 CCMA, actively participates in the development of all white papers and other documents providing guidance in governmental accounting and ,auditing issued by CCMA. His expertise is available 'to you regarding the implementation of any new 'GASB Statements. ACCESS TO NATIONAL RESOURCES As a member of the GASB Task Force on the New Reporting Model, Mr. Moreland worked closely for over five years with all the members of the GASB Board and nearly all of the technical staff of the GASB. Another member of the Task Force was Stephen Gauthier, Director of GFOA's Technical Services Center. As Chairman of the California Committee on Municipal Accounting and Chairman of the California Society of Certified Public Accountants Governmental Accounting and Auditing Committee, Mr.'Moreland has made several oral presentations to the GASB on the: governmental accounting issues which are most important in California, Through these organizations, he has responded to all documents released by the GASB seeking public comment. I Because .of these close relationships, we were able recently to arrange three personal meetings between client personnel and a GASB Board member. On several occasions each year, our management group will discuss unusual accounting issues with technical staff at the GASB and/or the GFOA. They provide an additional resource that is available to you should the need arise. These resources are available to assist with the implementation of any future GASB Statements. PARTNER SUPERVISORY AND STAFF QUALIFICATIONS AND EXPERIENCE Our audit team members have extensive, direct experience in auditing California cities. We believe our individual qualifications.will assure you of receiving the type of service i we describe in this proposal. We encourage you to contact the.references provided below. We are confident that all of our clients are positively impressed with the level of service we provide. It is our practice to provide continuity of staff during the entire term of the agreement at the partner, manager, and senior accountant level. Except for unusual circumstances, all three of these positions will be filled by staff who served the City during the prior Year. It is our understanding that the City retains the right to approve or reject any replacements. } As shown in Figure 1, at the.end of this section, our audit team will be organized under the direction of Mr. Michael Moreland. He will assume overall responsibility for services provided to the City. He will be supported by Ms. Nipa Shah who will manage the'staff working to the field. Mr. David Cotellesse will be the senior accountant.iri charge of the fieldwork, and.Ms. Kathryn Beseau will be the quality control reviewer. Their resumes f are presented below. l OrAand & cr ii, Inc. CERTIFIED POOLIC ACCOUNTANT$ 10 i f i RESUME OF MICHAEL MORELAND ENGAGEMENT PARTNER I Mr. Michael Moreland will assume overall responsibility for services provided to the City. He has over twenty-five years of experience in j providing auditing and consulting services to local government clients in California. He has audited approximately twenty percent of the cities of I �r i .:.. California. Some of the clients he has served include: Cities of Bell. Gardens, Burbank, Compton, East Palo Alto, Escondido, Encinitas, Fountain Valley, Fullerton, Garden Grove, Glendale, Half Moon Bay, Huntington Beach, Los Angeles, Monterey, Oceanside, Poway, San J Marcos, Santa Ana, Santa Barbara, Santa Clarifa, Seaside, Solana Beach, Stanton and Ventura - Counties of Los Angeles, Orange, San Bernardino and San Diego I r Irvine Ranch Water District - Orange County Sanitation District - Santa Barbara County Association of Governments For the past fifteen years, Mr. Moreland has been either the Chairman of the California Society of Certified-Public Accountants State Governmental Accounting and Auditing CoMmittee, or Chairman of the California Committee on Municipal Accounting. These two organizations determine how new accounting principles are applied in California. i l Mr. Moreland was the only CPA practitioner in California to be a member of the GASB Task Force on the New Reporting Model. Throughout the project, the Task Force reviewed concept papers, and drafts of documents prepared by the Board and their staff, and generally served as a sounding board for ideas considered by the Board. The f project resulted in the issuance of GASES Statement No. 34. I Mr.. Moreland is Very active in the CSMFO. He regularly attends and is a.frequent speaker at monthly section meetings and the annual conference. He ha's been a f regular instructor of five different programs in governmental accounting offered by the 1 Career Development Committee of the CSMFO. He. is also- a member of the Final Review Committee that insures consistency in the determination, of awards under the lCalifornia Award program. Mr. Moreland received a Bachelor of Business Administration degree in Accounting I from Loyola Maryinount University and holds CPA certificates from the State of L California and -several other states. .He receives far in excess of forty hours, of continuing professional education each year, M orelanci & �.�d6Qla/.Cr.�,ed Inc. gg FIRM PUB41C A=UMAM'S .�A i RESUME OF NIPA SHAH ENGAGEMENT MANAGER Ms. Nipa Shah Will manage the day-to-day services provided to the City. She has managed the financial audits of many of our government f ;1 clients, including the Cities of Agoura Hills, Covina, La Mirada, Monterey Park, Palos Verdes Estates, Simi Valley, and Stanton as well as the Orange County Sanitation District, and the Mesa Consolidated Water District. As a result of these assignments, Ms. Shah is very familiar with 1 the activities of a California City and redevelopment agency. Her duties as an audit manager include: Establish priorities and time and performance standards and prepare budgets. Monitor the-overall progress of financial and oompliance audits and the staff utilized on the audits. Prepare or review written reports of findings and participate in the oral presentations to management of the audited entities. I - Research and resolve technical problems and sensitive reporting issues. - Review completed audits for- - compliance with auditing standards, generally accepted in. the United States of America, - compliance with accounting principles, generally accepted. in the United States of America, - soundness of reasoning and judgment, - reasonableness of recommendations to client management. Promote consistency in procedures and reporting. - Prepare or conduct in-house training programs in governmental accounting and auditing. Actively participate in those professional organizations which have an impact on I governmental accounting and auditing. j Ms. Shah received a Bachelor of Science degree in Accounting from the University of New f Brunswick. She also has a graduate degree in Public Accountancy from McGIN University, Montreal, P.Q. Ms. Shah is a Certfied Public Accountant in the State of California and has . been with our firm over ten years. Each year Ms. Shah receives approximately forty hours of continuing education designed to.meet the AICPA and GAO requirements for continuing i education. 1 l 1 U"I7NF PUBLIC ACWUNTANM 1 2 4. . i ' f i I RESUME OF DAVID COTELLESSE SENIOR ACCOUNTANT i Mr. David Cotellesse Will be the senior accountant in charge of the audit of tite financial statements of the City. Mr. Cotellesse has been the Senior Accountant in charge of the audits of the financial i statements of the Cities of Bell Gardens, Cathedral City, Half Moon ri, w5. Bay, Stanton and the Municipal Water District of Orange County. He f has also been in charge of marry of the audits of the Orange County Health Care Agency Subrecipients. He has applied agreed-upon procedures at numerous hotels/motels relating to Transient Occupancy Takes in j connection with projects at the County of San Diego and the Cities of Escondido, Encinitas and Monterey Park. As a result of his experience, Mr. Cotellesse is very familiar with governmental accounting and the operations of a California city and If redevelopment agency. Mr. Cotellesse has strong oral and written communication skills. He works well with i other staff members and clients at all levels of management. He has excellent analytical skills, initiates projects and acts as a team leader. Mr. Cotellesse also has strong computer skills. Mr. Cotellesse received a Bachelor of Science degree in Business Administration from Eastern Michigan University and is working towards completion of the requirements. to become a Certified Public.Accountant in the State of California. He receives about forty hours of continuing professional education each year, _designed to meet the U.S. Government Accountability Office requirements for continuing education. RESUME OF KATHRYN HESEAU QUALITY CONTROL REVIEWER Ms. Kathryn Beseau will perform the quality control review of all reports issued to the City. She has over twenty years of governmental accounting experience. Ms. Beseau. is currently the Chair of the { Governmental Accounting and Auditing Committee of the Orange County . N .Chapter of the California Society of Certified Public Accountants. Ms. Beseau developed arid is teaching an Intermediate Governmental' Accounting, course in cooperation with .the CSMFO. Ms. Beseau has been a reviewer for the CSMFO award program and, developed and taught a "Train the Reviewer' course for reviewers of GASB Statement No, 34 compliant CAFR's. Prior to joining the firm, Ms. Beseau was the Controller of the,Irvine Ranch Water District for over ten years_ Managing a staff of twenty-five, she was responsible for all accounting, rate setting and financial software of the tistrict. I Ms. Beseau received a Bachelor of Science degree in Accounting from California State f. University, Fullerton. She is a Certified Public Accountant in the State of California and receives over forty hours of continuing education each year designed to meet the U.S. I Government Accountability Office requirements for continuing education. oreland &, ddoow,46, Aar. 6.. 11��11 COMFIEpPUBIICACCOUNYAIM 13 i f OTHER ASSIGNED STAFF We will assign sufficient staff to the engagement to ensure the work is completed in a timely manner. Many of our professional staff have worked in government,so they have a good understanding of the level of service you expect from your,auditors. There will I be on-site supervision by Mr. Cotellesse of all staff assigned to the engagement. ( MAIN AWING A HIGH QUALITY STAFF Our staff at all levels are continually expanding their knowledge of the governmental industry through formal in-house training programs, prdgrams offered by the GSMFO, the California Society of Certified Public Accountants, and other professional organizations, and -through -on-the�ob training, We believe. this mbcture: of training +` techniques will provide you with a quality staff that is up-to-date on the issues affecting governmental accounting and auditing: f Our firm has been providing Classes in introductory governmental accounting, the I preparation of award-winning CAFR's, and the implementation of GASB Statement 34 throughout California. We have a., contract with CSMFO to present classes in Intermediate Governmental Accounting; and a training program for the reviewers of CAFR's prepared in accordance.wilh GASB Statement No, 34. We have also provided group or individual training classes for our clients. i I f. 1 I ( �]C��.�a.Yld � _ M CE'FRIl PI1BLfC AGCDUNTANTS 14 1 ORGAMMAT/ONAL, CHAkT t j I • A I � _ 4 l f D_ { FigUre 1 � l I � j]� GERTIFIEO PUBLIC ACCpl1MAM5 15 f k SIMILAR ENGAGEMENTS WITH OTHER GOVERNMENT ENTITIES I As indicated above, we currently audit the financial statements of twenty-eight California cities and twenty-five redevelopment agencies. We selected the following five clients for 1 you to contact because they closely relate to the proposed engagement and bemuse they I demonstrate our depth of experience. All of these cities participate in the GFOA and CSMFO award programs, and all have redevelopment agencies and multiple enterprise operations. glient Engagement Total Scone . DatePartner + � 1 trntial audit for the C' C a 2', ty !: financial and compliance audits I preoera i i'Ms. Barbara Kilroy for the City's CRA,and ;pity Manager AOMIJ,as wallas for SLTPP r 3110)G05-5577 and OCJP funds, and single S audit, State Controllers report, agreed upon procedures for appropriations limit, and other City of Garden Grove Annual audit for the City, RDA 2004- Michacl Moreland 1,500 financial and compliance audit, present Mir • ' • singleagreed-upon Finance Oli-ector procedures for appropriations agreed-upon procedures for golf course, many other special • • - - t °of.Sairta-1t"its nuaf au he City, i5[l j. financial and compliance audit, present for t Pamela ArejrPiept.4 AQMD financial and compliance P Kingaudit single audit, State ;Assistant Direct Controller's Report, agreed- inance& Manaupon proccedures for s rvice .appropriations limit, and otherCity " f - i o Monterey to acts audit RDA • ,. 004- Michael Moreland ral nd ncial and compliance audit, present hoads financial audits Of tile city's f DirectorFinance and lServices Agency, single audit agreed-upon procedures appropriations limit . ' ° Cbvliia 'Ainnual audit for the Ci RDA ' C. tY. ' Mica '' Si30 financial and compliance audit, present Aft. William Stawarski single audit, agreed-upon finance Director procedures for appropriations r<,526 858-7242 limit- l Moreland & t_RAba, one. CGRTIFI�10 PUBLIC ACCOUNTANTS 16 fj f 'SPECIFIC AUDIT.APPROACH t. I YOUR OBJECTIVES You are selecting auditors to perform an audit of the financial statements of the City of Palm Springs for each of the three years ending June 30, 2009 with an option to extend for two additional one year periods. Each annual audit will include the following: r - A financial audit of the basic financial statements in the City's Comprehensive Annual Financial Report including the typing of the CAFR and providing one photo-ready original to the City. - A financial and compliance audit of the Community Redevelopment Agency of the City. of Palm Springs. i - An expansion of the CiVs financial.audit to meet the requirements of the Single Audit Act, including the requirements of Circular_OMB Circular A-133, Audits of State and Local Governments, and Non-Profit Organizations and preparation of the Data Collection Form. A Report on Internal Control aver Financial Reporting and on Compliance and Other : Matters Based on an Audit of Financial Statements Performed in Accordance with. j Government Auditing Standards. This letter will include significant deficiencies and 1 material weaknesses, if any, and is either included in the Single Audit Report or issued separately. f - The application of agreed-upon procedures in connection With the annual calculation of the appropriations limit as required by Section 1.5 of Article XIIIB of the California Constitution. 1 - On an as-needed basis, perform a-compliance review of the agreement between the City and the management company operating the Crty's municipal golf course. - Review and summarize the Community Redevelopment Agency's Disposition and. Development Agreements to ensure transactions are properly recorded. A management letter addressed to the City Manager containing our comments and recommendations for improving the accounting procedures and the systems of internal r control (control deficiencies not considered significant/material weaknesses): - A letter to the City Council containing required communications about the audit process. - Provide if necessary, a written report of all irregularities and illegal acts or indications of . illegal acts during the audit process to the City Manager, City Attorney and the Director of Finance, - Keep the City informed of state and national developments affecting accounting, auditing and financial reporting including providing guidance on implementation of GASB requirements. 1 OPTIONAL SERVICES - Prepare the City's Annual State Controller's Report. - Prepare the Annual State Controller's Report for the Redevelopment Agency. - Prepare the Annual Street ReporL ( - Prepare the financial statements for the Financing Authority of the City of Palm Springs. - t orelaud & �66acicx��2, Inc. CEAT1FIEb Pl16LIC ACGgUMAN15 17 I I Each annual 'audit will be performed in accordance with auditing standards generally i accepted in the United States of America, as adopted by the AICPA, and will conform with 1 guidelines set forth in the AICPNs Industry Audit Guide, Audits of State and Local Governments (GASB 34 Edition). Also, the annual audit will comply with the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. We will assist you in the preparation of financial statements in accordance with the most recent applicable' pronouncements of the Governmental Accounting Standards Board. Additionally, we will work with you in preparing a CAFR that continues to meet the reporting requirements for a Certificate of Achievement for Excellence in Financial Reporting issued by the Government Finan06 Officers Association and an "outstanding" award in financial reporting issued by the California Society of Municipal Finance Officers, if you qualify for participation in the f CSMFO Award program. J In connection with the annual audit, we will review the systems of internal control and accounting procedures in order to develop our audit tests and to-provide the City with a management letter containing our comments and recommendations for improving the accounting procedures and the systems of internal control. Significant deficiencies and material weaknesses, if any, will be included in our Report on 'Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. This is one of the letters included in the Single Audit Report, or issued separately. We Will initiate an exit conference to discuss drafts of our management letter and the various financial and compliance reports with appropriate City personnel. Following the audit, we will meet to discuss any suggestions that either of us may have for improving the conduct of the annual audit process or any other matters of interest. Annually, we will issue a letter to the City Council regarding the conduct of the annual audit. We are always available for meetings or discussions with City staff, and/or the City Council in order to meet your needs. } We will follow the audit approach described below in order to meet all of your objectives and timing requirements. 1 OUR APPROACH TO YOUR OBJECTNE5 Our audit approach will emphasize service to the City. Service not only in terns of a qualified staff of auditors efficiently and effectively perfortming the necessary audit tests, but also service as an attitude maintained by the entire audit team. All of our planning, r audit tests and dealings with you and your staff will be performed from an independent, l objective viewpoint, yet we will never forget that our product is a service. We understand that the annual audit will result in a certain amount of-additional work and inconvenience on the part of City staff. However, we are confident that our service•oriented audit approach will, eliminate many of the. common problems experienced in governmental { audits, such as. f oreland & 44am�� Inc. CERTIFIED PUBLIC ACCOUNTANTS ,�S - New staff each year, Inexperienced staff who do not understand governmental accounting, Auditors who feel free to interrupt your staff any time, and I - Management letter comments made without a •thorough understanding of the related costs or even the practicality of the recommendation. We know these common complaints and can avoid them because of four very important .facts, namely. - Our audit team. members maintain their up-to-date knowledge of the governmental industry at the same meetings and seminars that.you and your staff attend, - Many of our audit staff have worked in government, so they better understand your audit needs and what you expect in temps of service, - Our audit team members have spent many years successfully serving the local government industry, and - Our service approacch to you will be supervised by-Mr. Michael Moreland, who, because of his years of serving local government clients, thoroughly understands the duties and responsibilities of your staff. AUDIT APPROACH-PLANNING AND INTL°R/M AUDir woRK During.July of this year, and May or June of future years, management of our audit team will have an entrance conference with the Director of Finance/Treasurer and other appropriate City staff. The purpose of this meeting will be to ensure a good working 4 relationship and to discuss the scope and timing of the annual audit, the documents needed for our permanent files, the detailed audit plan, and the list of schedules that City ! staff normally prepares in. connection with the year-end closing. Perhaps the most important objective of the pre-audit conference is to establish a relationship in which we all feel comfortable in asking questions and expressing our views. We devote a considerable amount of time to .planning each year, because we find that well.-planned audits are completed in a timely manner. We will schedule approximately one week of interim audit work each year. We will prepare flow charts and other documentation of the internal control structure and of the major systems, such as revenue and cash receipts, purchasing and cash disbursements, payroll and personnel, capital assets, grant compliance, and investment activities. This information is gained through discussions with ,appropriate City staff, and the review of available documented policies and procedures, Our knowledge of your overall internal. control structure and of your major systems will be used to tailor our standard .audit programs to your specific systems. During the interim work in subsequent years, we will ( note changes in the system, if any. 1 1 _ �/�oreland & -• ltr� CERTIFIED PUBLIC AOWUNTpNTS 19 I At this point we will utilize the prior year financial statements, the current year budget and ( our knowledge of your systems to determine materiality for audit purposes. This level of i materiality and our evaluation of risks will be employed during the final audit work to decide on the extent of testing of year-end account balances. The review of these I documents will also assist us in identifying changes from the prior year in the operations of I the City. Each year we will select a sample of transactions to determine to what extent the systems are functioning as described to us. The extent of our sample size will depend upon our assessment of your internal control structure. The selection of transactions for testing will be made using a combination of random, systematic and haphazard sampling techniques. We will test the strengths of the systems to be sure they are functioning as, intended. We j will identify Weaknesses, if any, so that they can , be included along with our f recommendations in our annual management letter. During the interim audit work we will, l also arrange for typing of confirmations, finalize the schedule for the completion of the final audit work, complete the listing of client prepared schedules, and perform those tasks which can be efficiently accomplished prior to the end of the year. i During August each year we will contact you to determine. that the year-end Closing is well Planned. We will also discuss any matters that may impact our audit procedures or your financial reporting. AUDIT APPROACH-FINAL AUDIT WORK The final audit work will begin each year in early October with an entrance.conference with the Director of Finance/Treasurer and other appropriate City staff. Fieldwork will begin with an analytical review of revenues and expenditures. This review will include a comparison of prior year financial statements and current year budget to the year-end trial balance to identify those accounts which will require further audit work based on materiality levels. The primary objective of the final audit worts Is to audit the final numbers that will appear in the financial statements. Upon completion of fieldwork and posting of any audit adjustments, we will perform a final analytical review of audited balances to determine if our materiality levels have changed as the result of yea-t-end adjustments and to ensure that sufficient test work has been completed. The fieldwork will be completed by late October. Our management review will be completed in the field during the same time period so that at the conclusion of the fieldwork we have agreement on both the-format and the content of the various financial reports. An exit conference will be held at the end of fieldwork to summarize the results of the.fieldwork and to review significant findings. We suggest meeting with appropriate City staff on a regular basis. This will avoid being disrupted by questions, one at a time. We find that our workday is far more productive when we can plan ahead, and we are sure that well planned days are your most �. productive also. I orelaud & acres , Inc. CERTIFIED PUBLIC ACCOUNTANP$ 20 i I i As part of the annual audit, we will evaluate the 'internal control structure in order to- determine the nature and extent of our audit procedures. Frequently, this evaluation process leads to worthwhile suggestions for improving the internal control structure as well as the efficiency and effectiveness of accounting operations and procedures. All of our ( recommendations will be discussed at an exit conference with the Director of I Financef6easurer and other relevant City personnel and, if appropriate, presented in writing at the completion of our audit We are available each year to attend relevant meetings of the City Council. I APPROACH TO THE SINGLE AUDIT i Our approach to the Single Audit will begin with the identification of Major Federal Financial Assistance Programs from the list of Federal Assistance Program ( expenditures that City staff will provide. We will require a preliminary listing in i connection with our interim audit work. At that time we will identify the major accounting .cycles such as cash receipts, purchasing and cash disbursements, payroll procedures, } investment procedures, etc, which affect Federal programs. We will prepare flow charts and/or other documentation of these accounting cycles and identify the internal control procedures that the City has established, We will then perform tests of transactions for each of these accounting cycles in order to satisfy ourselves that the internal controls are functioning as intended. We will then work with City staff to identify the systems you,have established to monitor compliance with.the requirements of the Major Federal Financial Assistance Programs. Next we will select transactions, reports, files, etc, to test that the compliance systems are functioning as intended. j We will complete the additional audit procedures inconnection with the single audit during the financial audit process. Much of this work will be accomplished in connection 1 with the interim audit work. It will be completed during the final audit worts so that we can discuss drafts of the various financial and compliance reports at the same time that we are discussing the other financial reports. ( REPORTS TO BE ISSUED-SINGLE AUDIT During the final audit work, we will complete any additional-testing of Major Federal Financial Assistance Programs that may be necessary as a result of reviewing the final schedule of expenditures. We will then prepare drafts of the required.reports for your review. After reviewing and discussing drafts of the required reports, you should prepare responses to any findings or questioned costs.: The reports will be revised to include your responses and will be delivered along with the other reports. 1 1 Moreland & �, Inc. CERTIFIED PUBLIC ACCOUNTANM 21 i i KNOWLEDGE OFAPPLICABLE LAWS AND REGULATIONS We have a copy of the California Government Code and the Health and Safety Cade in our offices for use as needed during the annual audit. We have included references to the more common laws, rules and regulations in our standard audit program. In addition, we utilize the "Single Audit Informakri Service" to maintain our knowledge of the applicable laws relating to Federal programs. We AM utilize our knowledge of Federal, State, and local laws, rules, and regulations as they.pertain to our financial and compliance audit work. PA,PEPLESS AUDIT APPROACH For all new audit engagements we are using a paperless audit approach. This approach ! allows.us to expand our audit coverage while,streamlining. our audit effort. The system lends itself to analytical review procedures, develops audit lead schedules and produces a financial statement at the end of the fieldwork, This twenty-first century approach to audifing rtreans greater audit coverage with far less delays in completing the audit.process. LJ='V,t;L OF STAFFING I We estimate the combined level of staffing for the year ending,June 30, 2007, including hours for optional services listed, is as follows: Planning and Interim Audit Work Partner 12 Manager 41 Senior Staff 1 gg staff 120 Clerical 2 Total Planning and Interim Audit Work 363 1 Final Audit Work Partner 36 Manager 76 Senior Staff 22Q Staff 152 Clerical 20 Total Final Audit Work 504 Total EngageMent 867 orelaud & ci 11 Aw. " CF k%;PUBU A�WNTANTS 22 KEY DATES FOR COMPLETION OF THE JUNE 30, 2007 AUDIT Presented below are suggested key dates for the completion of the June 30, 2007 audit: r 1JfUfy 9 to July 13, 2007 October I to October 19, , Final audit work and manaryon7ent niview as 2007 described above, Defivet draft copies of all Financial and con7plionce Ireportz, ti ASSISTANCE BY CITYSTAFF We will require assistance in connection with the annual audit by City staff in the following areas: i Clerical assistance such as typing of confirmations, pulling of invoice packages, and reproduction of agreements and other documents for our files. - Technical assistance in familiarizing our staff with the controls you have established to monitor compliance with Federal program requirements. 1 - Technical assistance in familiarizing our staff with the flow of information through the major and minor accounting cycles such as cash receipts, cash disbursements, payrolls, accounting for grants, etc, Also, technical assistance in connection with the overall activities of the Finance Department such as the preparation and approval of journal entries, the reports generated by your computerized accounting system, and the schedules generated in connection with the year-end closing. I l Since we will be assigning staff who are very experienced in.govemmental accounting and ( ,auditing, the time required of City staff will not be excessive. i IDENTIFICATION OF ANTICIPATED POTENTIAL AUDIT PROBLEMS ( . We do not anticipate any potential audit problems. If problems were to arise during the I audit, we will immediately notify the City and, if requested, assist the City in finding a solution. 1 • Moreland & Aw. CEATIFlED PUBLIC ACCOUNTANTS 23 L f RESPONSE TO CITY STANDARD TWO PARTY AGREEMENT We will maintain the Citys insurance requirements during the term of the engagement as described in Exhibit B of the Request for proposal. After being selected as the City s auditors, we will name the City as an additional insured. We are providing a copy of our certificate of insurance for your review. ft is included in Appendix'B. G We request Section 8.3 o„f your Citys Standard TvSo-party Agreement be modified to. reflect that audit working papers will remain the property of the Consultant. i I i I i 1 . l , i f Moreland & jaaoa.+ . J". CEFMFIED PU8UC ACCOQ*AN79 24 i I r i l APPENDIX A Latest External Quality Control Review Report F I i i � z i I Jessie C. Powell, C, ( POWELL& SPAFFOPD,LLD Poirick D.Spofford, C CEPTIFIeD PUBLIC ACCCIUNTANT5 To the Shareholders Moreland&Associates,Inc. Certified Public Accountant We have reviewed the system of quality control for the accounting and auditing.practice of Moreland do Associates, Inc. (the firm) in effect €ot the year ended December 31, 2005. A system pf quality control encompasses the firm's organizational structure,the policies adopted and procedures esthblished 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(AICPA). The firm is responsible for designing a system ofquality control and complying with it to provide the firm reasonable assurance of.conforming with professional standards in all material respects. Our responsibility is to express an opinion ea the.design of the system of quality control and the firm's compliance with its system of quality control based on our review. 1 Our review was conducted in accordance with standards established by the peer Review Board ofthe AICPA. I]uring our review;we read required representations from the firm,interviewed firm personnel,and obtained an understanding of the nature of the firm's accounting and auditing practice, and the Aesign of the firm's system of quality control sufficient to assess the risks implicit in its practice, Based or3 our assessments,we selected engagements and administrative files to test for conformity with professional standards and compliance with the firm's system of quality control. The engagements selected represented a reasonable cross-section of the firm's accounting and auditing practice with emphasis on bigher-risk engagements. The engagements selected included among others, engagements performed under Governs clad Auditing Standards. Prior to concluding the review, we reassessed the adequacy of the scope of the peer.review procedures and met with firm managementto discuss the results of our review. We believe that the procedures f we performed provide a reasonable basis for our opinion. 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 ofthe firm's policies and procedures on selected engagements. Our review was based on selected tests therefore it would not necessarily detect all weaknesses in the.system of quality control or all instances of noncompliance with iL There are inherent limitations in the effectiveness ofany system of quality control and therefore noncompliance with the system of quality control may occur and noi,be detected. Projection of any evaluation of a system of quality control to future periods is subject to the risk that the system of quality control May become inadequate because of changes in conditions,or because ofthe degree of compliance with the policies or procedures may deteriorate. 664 W Bi.7 it Court • son Bepnnpdino,CA 92410 • PO. Box 8947 • Recfionds,CA 92375 Teiep6one 909-885-7721 0 Fox 909-.885-7541 a h j in our opinion, the system.of quality control for the accounting and auditing practice of Moreland & " Associates,Inc., in effect forthe.year ended December 31,2005,has been designed to meetthe requirements of the quality control standards for an.accounting'and auditing praotice estahlished by the AICPA and was complied with during the year then ended to provide the firm with reasonable assurance of complying with professional standards. As is customary in a system review,we have issued a letter under this date that sets forth comments that were not considered to be of sufficient significance to affect the opinion expressed in this report. 1 June 6,2006 l i I i i ; SEALED DOLLAR COST BID �ULES 5? FOR ''F`' = CITY OF PALM SPRNG FOR PROFESSIONAL AUDITING SERVICES -RFP 08-07 MAY 11, 200Vi „. A, (COPY) {. •S. d '. "P1` •'ail .a '�• r Yr FY .L'- r rr4y 0p„S, h•. -vC,.'i u� L a•,m r. ' ribi ,�. prt., '� 9 'y • �!'`- a' ,n . x°Yc �,, LCI'"r hi ^ �� `:i•.V',AaJ s# N, y�4ha(''�:;' L ,yy_ ;' .aHW. y.r19 ." rSx�W�.�, Y=9 YI++.'^^ •'(ry �S.�l =`-!?yJ.i"k,�`t� a" :w 1&T'.Na,,;�;svT'Jn�J M}fv. e Av�`N's` 01 At14 r,¢ 1201 DOVE STREET SUITE 680 NEWPORT BEACH,CALIFORNIA 92660 oreland & ozlxi�- _ (949)221-0025 CERTIFIED PUBLIC ACCOUNTANTS 570 RANCHEROS DRIVE,SUITE 260 SAN MARCO$,CA 920B9 (760)7523090 May 11, 2007 Mr. Craig A. Graves Director of Finance/Treasurer City of Palm Springs 3200 East Tahquitz Canyon Way Palm Springs, CA 92262 Dear Mr, Graves: Attached are the forms supporting our proposal of fees and the hourly rates to be used in computing our fees for the three years ending June 30, 2009, with an option to extend for two additional one year periods. Hourly rates and maximum fees will increase 4% each year to I cover increased salary and other costs. I Fees for our services are billed on a monthly basis as the work progresses. Fees for additional services are billed at the hourly rates in effect at the time the services are provided. A summary of fees for the three years ending June 30, 2009 is provided below. The individual tasks reflect those described in the Request for Proposal. Nature of Services to be Provided 2007 2008 2009 I Task 1, Including Tasks A, B & C $ 37,800 $ 39,300 $ 40,884 Task 2 8,000 8,320 8,653 Task 3 8,000 8,320 8,653 Task 4 3,800 3,952 4,110 Task 5 2,500 2,600 2,704 Task 6 (Optional) 5,000 5,200 6A08 Task 7 (Optional) 3,600 3,744 3,894 Task 8 (Optional) 1,500 1,560 1,622 Task 9(Optional) 4,000 4,160 4,326 I Totals $ 74,200 $ 77,156 $ 80,254 Total Price 2007 Audit in Words: Seven -four thousand two hundred dollars and no cents Total Price 2008 Audit in Words: SeventV-seven thousand one hundred and fifty six dollars and no cents Total Price 2009 Audit in Words: Ei�c hty thousand two hundred and fifty feur dollars and no cents i Mr. Craig A. Graves Director of Finance/Treasurer City of Palm Springs May 11, 2007 Page 2 The hourly rates to be used for each of the three years ending June 30, 2009 as follows: Hourly Rates Classification 2007 2008 2009 Partner $ 150 $ 156 $ 162 Manager 110 114 119 Senior Accountant 80 83 86 Assistant Accountant 70 73 76 Clerical 35 36 37 Thank you for the opportunity to present this proposal. We hope that we were able to convey to you our knowledge of your industry and the quality of service which we provide to all of our clients- Please do not hesitate to contact us should you have any questions. The undersigned is entitled to represent the firm, empowered to submit this bid, and authorized to sign a contract with the City of Palm Springs. Very truly yours, MORELAND &ASSOCIATES, INC. Michael C. Moreland, Partner MCK sr COST SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE FY 2006-2007 THROUGH 2O08-2009 FINANCIAL STATEMENTS (RFP TASK#1 INCLUDING A B& C Hourly Hourly Hourly Total$ Total$ Total$ Rates Rates Rates FY 2006- FY 2007- FY 2008- Hours 2007 2008 2009 2,007 2,008 2,009 Total Partners 30 $150 $156 $162 $ 4,500 $ 4,680 $ 4,860 $ 14,040 Managers 60 110 114 119 6,600 6,840 7,140 20,580 Supervisory Staff 180 80 83 86 14,400 14,940 15,480 44,820 Staff 135 70 73 76 9,450 9,855 10,260 29,565 Clerical 8 35 36 37 280 288 296 864 Total for Services 35,230 36,603 38,036 109,869 Other. Msals, Lading&Transportation 2,570 2,697 2,848 8,115 Estimated Number of Hours Required from City to Develop Permanent File: 24 From City Clerk's Office 24 From Finance Department Total All-inclusive Maximum Price 2007-2009 total): 37.800 $39,300 40,884. 117,994 Total AII-inclusive Nftdmum Price(2007-2009 total) IN WORDS: One hundred seventeen thousand nine hundred eighty four dollars and no cents Responding to Request for Proposals No. 08-07 for Professional Auditing Services for the City of Palm Springs the undersigned Proposer proposes and agrees to perform the auditing services in good order and in accordance with the specifications. IMe will provide the above specified services for the City of Palm Springs, and will accept as full payment the above all-inclusive maximum amount. I (Signature of Authorized Representative) MICHAEL C. MORELAND (Printed Name of the Authorized Representative) MORELAND&ASSOCIATES, INC. MAY 11, 2007 (Name of Firm) & (Date) Addendum#_ 1, 2&3 is/are hereby acknowledged, COST SCHEDULE FOR THE PALM SPRINGS REDEVLOPMENT AGENCY AUDIT REPORT(RFP TASK#2 Hourly Hourly Hourly Total$ Total$ Total$ Rates Rates Rates FY 2006- FY 2007- FY 2008- Hours 2007 2008 2009 2007 2008 2009 Total Partners 5 $ 150 $ 156 $ 162 $ 750 $ 780 $ 810 $ 2,340 Managers 12 110 114 119 1,320 1,368 1,428 4,116 Supervisory Staff 40 80 83 86 3,200 3,320 3,440 %950 Staff 24 70 73 76 1,680 1,752 1,B24 5,256 Clerical 4 35 36 37 140 144 148 432 Total for Services 7,090 7,364 7,650 22,104 Other. Meals, Loding&Transportation 910 956 1,003 2,869 Total Price for the Palm Springs Redevlopment Agency Audit Report: $ 8�000 $ 8,320 $ 8,653 $ 24,973 Total Price IN WORDS: Twenty-four thousand nine hundred seven -three dollars and no cents COST SCHEDULE FOR THE SINGLE AUDIT REPORT(RFP TASK#3 I Hourly .Hourly Hourly Total$ Total$ Total$ Rates Rates Rates FY 2006- FY 2007- FY 2008- Hours 2007 2008 2009 2007 2008 2009 Total I Partners 5 $ 150 S 156 $ 162 $ 750 $ 78a $ 810 $ 2,340 Managers 12 110 114 119 1,320 1,368 1,428 4,116 Supervisory Staff 40 80 83 86 3,200 3,320 3,440 9,960 Staff 24 70 73 76 1,680 1,752 1,824 5,256 Clerical 4 35 36 37 140 144 148 432 Total for Services 7,090 7,364 7,650 22,104 Other: Meals,Loding&Transportation 910 966 1,003 2,869 Total Price for the Palm Springs Single Audit Report: $ 8,000 $ 8,320 $ 8,653 $ 24,973 i Total Price IN WORDS: TwenlyAour thousand nine hundred seventy-three dollars and no cents COST SCHEDULE FOR THE PREPARATION OF THE GOLF COURSE COMPLIANCE REVIEW(RFP TASK#4 Hourly Hourly Hourly Total$ Total$ Total$ Rates Rates Rates FY 2006- FY 2007- FY 2008- Hours 2007 2008 2009 2007 2008 2009 Total i Partners 2 $150 $156 $162 $ 300 $ 312 $ 324 $ 936 Managers 5 110 114 119 550 570 596 1,715 Supervisory Staff 16 80 83 86 1,280 1,328 1,376 3,984 Staff 16 70 73 76 1,120 1,168 1,216 3,504 Clerical 2 35 36 37 70 72 74 216 Total for Services 3.320 3,450 3,585 10,355 Other. Meals, Loding&Transportation 480 502 525 1,507 Total Price for the Golf Course Compliance Review: $ 3,800 $ 3,952 $. 4,119 $ 11,862 Total Price IN WORDS: Eleven thousand eight hundred sixty-two dollars and no cents - COST SCHEDULE FOR THE PREPARATION OF THE i REVIEW OF DISPOSITION AND DEVELOPMENT AGREEMENTS (RFP TASK#5 Hourly Hourly Hourly Total$ Total$ Total$ Rates Rates Rates FY 2006- FY 2007- FY 2008- Hours 2007 2008 2009 2007 2008 2009 Total I Partners 4 $150 $156 $162 $ 600 $ 624 $ 648 $ 1,872 Managers 8 110 114 119 880 912 952 2,744 Supervisory Staff 8 80 83 86 640 664 688 1,992 staff 70 73 76 Clerical 35 36 37 - - - Total for Services 2,120 2,200 2,288 6.608 Other: Meals, Loding &Transportation 380 400 416 1,196 Total Price for the Review of Disposition and Development.,agreement: $ 2,500 $ 2,600 $ 2,704 $ 7,804 Total Price IN WORDS: Seven thousand ei ht hundred and four dollars and no cents � I I COST SCHEDULE FOR THE PREPARATION OF THE ANNUAL STATE CONTROLLER'S REPORT FOR THE CITY OPTIONAL TASK#6 i Hourly Hourly Hourly Total$ Total$ Total S Rates Rates Rates FY 2006- FY 2007- FY 2008- Hours 2007 2008 2009 2007 2008 2009 Total JPartners - S 150 $ 166 $ 162 $ - $ - $ - $ Managers 6 110 114 119 660 684 714 2,058 Supervisory Staff 50 80 83 86 4,000 4,150 4,300 12,450 Staff 70 73 76 Clerical 35 36 37 - i Total for Services 4,660 4,834 5,014 14,508 Other: Meals, Lading&Transportation 340 366 394 1,100 Total Price for the Annual State Controller's Report for the City: S 5,000 $ 5,200 S 5,408 $ 15,608 Total Price IN WORDS: Fifteen thousand six hundred and eight dollars and no cents i COST SCHEDULE FOR THE PREPARATION OF THE ANNUAL STATE CONTROLLER'S REPORT FOR THE COMMUNITY REDEVLOPMENT AGENCY OPTIONAL TASK#7 I f Hourly Hourly Hourly Total$ Total$ Total$ Rates Rates Rates FY 2006- FY 2007- FY 2008- Hours 2007 2008 2009 2007 2008 2009 Total Partners - $ 150 $156 $162 $ - $ - $ - $ Managers 4 110 114 119 440 456 476 1,372 Supervisory Staff 36 80 83 86 2,880 2,988 3,096 8,964 Staff - 70 73 76 - - - Clerical - 35 36 37 - - - - Total for Services 3,320 3,444 3,572 10,336 Other: Meals, Lading &Transportation 280 300 322 902 i Total Price for the Review of Disposition and Development Agreement: S 3,600 $ 3,744 $ 3,894 S 17,238 i Total Price IN WORDS: Eleven thousand two hundred thirty-eight dollars and no cents i COST SCHEDULE FOR THE PREPARATION OF THE ANNUAL STREET REPORT(OPTIONAL TASK#S) Hourly Hourly Hourly Total$ Total$ Total$ Rates Rates Rates FY 2006- FY 2007- FY 2008- Hours 2007 2008 2009 2007 2008 2009 Total Partners - $ 150 $ 156 $ 162 $ - $ - $ - $ Managers 2 110 114 119 220 228 238 686 Supervisory Staff 14 80 83 86 1,120 1,162 1,204 3,486 Staff 70 73 76 - - - - Clerical 35 36 37 - - - - Total for Services 1,340 1,390 1,442 4,172 I Other: Meals, Loding &Transportation 160 170 180 510 Total Price for the Annual Street Report: $ 1.500 $ 1.560 $ 1,622 3 4,682 I Total price IN WORDS: Four thousand six hundred and eighty-two dollars and no cents COST SCHEDULE FOR THE CITY OF PALM SPRINGS FINANCING AUHTORITY AUDIT REPORT(OPTIONAL TASK#9) Hourly Hourly Hourly Total$ Total$ Total$ Rates Rates Rates FY 2006- FY 2007- FY 2008- Hours 2007 200E 2009 2007 2008 2009 Total Partners 2 $150 $156 $162 $ 300 $ 312 $ 324 $ 936 Managers 8 110 114 119 880 912 952 2,744 Supervisory Staff 24 80 83 86 1,920 1,992 2,064 5,976 Staff 8 70 73 76 560 584 608 1,762 Clerical 4 35 36 37 140 144 148 432 Total for Services 3,800 3,944 4,096 11,840 Other: i Meals, Loding &Transportation 200 216 230 646 Total Price for the Review of Disposition and Development Agreement: $ 4,000 $ 4,160 $ 4,326 $ 12,486 Total Price IN WORDS: Twelve thousand four hundred and eighty-six dollars and no cents EXHIBIT"B" CITY OF PALM SPRINGS REQUEST FOR PROPOSALS (#08-07) FOR PROFESSIONAL AUDITING SERVICES (ON FILE IN THE OFFICE OF THE CITY CLERK, CITY OF PALM SPRINGS) 524762.1