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HomeMy WebLinkAbout2006-02-01 STAFF REPORTS 2G THIRD AMENDMENT TO AGREEMENT I FOR AUDIT SERVICES WITH CONRAD AND ASSOCIATES I IThis Third Amendment to the Consultant Services Agreement with Conrad and Associates ("Third Amendment" or "Amended Agreement') is made and entered into this I"day of February, 2006, by and between the CITY OF PALM SPRINGS, a municipal corporation ("City") and Conrad and Associates, a California Corporation ("Contractor") and amends that certain "Contract Services Agreement with Conrad and Associates" (the "Agreement') dated May 16, 2001 between the same parties. RECITALS A. On or about May 16, 2001, City and Contractor entered into a "Contract Services Agreement"pursuant to which Contractor agreed to perform annual audits of the City's financial records in accordance with generally accepted goverunental auditing standards ("Project") for a fixed amount per year as set forth in the Schedule of Cornpensation. B. The agreement with Contractor was for a period of three (3) years with two, one year options at the City's sole discretion. C. On or about July 31, 2002, the City entered into that certain Amendment No. 1 to Agreement No. 4361 (herein "First Amendment"), expanding the scope of the audit services to include the compilation and analysis of information required by Govermnent Accounting Standards Board Bulletin 34 ("GASB 34"). D. On or about November 19, 2003, the City entered into that certain Amendment No. 2 to Agreement 4361 (herein "Second Amendment"), extending the tern of the audit for two additional fiscal years expiring on June 30, 2006. E. The City has exercised both options and the agreement is set to expire at the completion of the audit for Fiscal Year 2004/05. F. The City is in the process of preparing a Request for Proposals and plans to solicit new proposals for auditing services. ��I�T'11�I.1AL MA7°11�:)11G.�a G. Until this process is complete and the City has selected a new audit firm, the Finance Director has requested that the current Contractor be retained for an additional year. H. On or about January 1, 2006 Contractor merged with another audit firn resulting in a I name change. i I. Contractor will be practicing public accormting under the naive Mayer Hoffinan McCann P.C. J. Mayer Hoffman McCann is a 51-year old independent CPA firnl serving over 40 California cities. K. City and Contractor desire to amend the Agreement to extend the tern of the agreement for one additional year and to change the corporate name to reflect the new company's identity. AGREEMENT The Agreement is hereby amended as follows: 1. "Conrad &Associates". All references in the Agreement to Conrad & Associates shall be replaced with Mayer Hoffman McCann PC (hereafter"MHM"). 2. Assignment to MHM. The City acknowledges the assigns lent of the Agreement to MHM and MHM's assumption of all obligations under the Agreement. The City agrees that Conrad & Associates shall have no father obligations, responsibilities or liabilities under the Agreement and is hereby released, discharged and acquitted therefrom. 3. Effectiveness of Amendment. This Amendment shall he effective upon the approval by the City of this Amendment, pursuant to a Palm Springs City Council resolution, and the execution hereof by the City and MHM. The City shall deliver to MHM a certified record of the public proceedings of the Palm Springs City Council approving the execution and delivery of this Amendment. 4. "2.1 Contract Sum. For the services rendered pursuant to this Agreement, Contractor shall be compensated in accordance with the "Schedule of Compensation" attached hereto as Exhibit "C" and incorporated herein by this reference, but not exceeding the maximum contract amount of Sixty Seven Thousand Five Hundred and Fifty Dollars ($67,550) ("Contract Sum")." 5. "Section 3.4 Term. Unless earlier terminated in accordance with Section 7.8 of this Agreement, this Agreement shall continue in full force and effect until completion of the services. The tern of this agreement shall be for a one year period connnencing July 1, 2006. In no event shall this agreement remain valid past July 1, 2007 unless otherwise extended by written approval of the City." 6. Except as modified by this Third Amendment, all other terms and conditions of the Agreement shall remain in fill force and effect. IN WITNESS WHEREOF, the parties hereto executed this First Amendment to be effective as of the Date first written above. CITY OF PALM SPRINGS, a municipal corporation By: City Manager ATTEST: City Clerk APPROVED AS TO FORM: Mayer Hoffrnan McCann, P.C. City Attorney Name: Title: I I t I .y ALMS,. I �o c V N c Cq<IFORe�P CITY COUNCIL STAFF REPORT I DATE: February 1, 2006 Consent Calendar SUBJECT: APPROVAL OF EXTENSION FOR AUDIT SERVICES WITH MAYER HOFFMAN MCCANN, PC (FORMERLY CONRAD AND ASSOCIATES) FROM: David H. Ready, City Manager BY: Department of Finance and Treasury SUMMARY The current agreement with Conrad and Associates (now Mayer Hoffman McCann PC) for auditing services will expire with the completion of the audit for Fiscal Year 2004/05. Although staff is in the process of preparing a Request for Proposals and plans to solicited new proposals for auditing services, the Finance Director would prefer an additional year with the current auditor before making any changes. This action would amend the existing agreement to extend the term for one additional year, as well as I change the name of the contractor to reflect the new company name. RECOMMENDATION: 1. Adopt Minute Order No. approving Amendment No. 3 to Agreement A4361 with Conrad and Associates (dba Mayer Hoffman McCann PC) for auditing services for Fiscal Year 2005/06 in the amount of $67,550 in a form acceptable to the City Attorney. 2. Authorize the City Manager to execute the necessary documents. STAFF ANALYSIS: In 2001, the City issued a Request for Proposal for Auditing Services and ultimately entered into an agreement with the firm of Conrad and Associates to provide these services. This agreement was originally for a five year term with two one-year options. The City has exercised its options and the agreement is now set to expire with the completion of the audit for Fiscal Year 2004/05. Staff is recommending that the existing agreement with Conrad and Associates be extended for an additional year to enable the new Director of Finance more time to completely familiarize himself with the City's financial operations and history before changing auditing firms. Item No. 2. V . i MINUTE ORDER NO. APPROVING AMENDMENT NO. 3 TO AGREEMENT NO. 4361 WITH CONRAD AND ASSOCIATES (DBA MAYER HOFFMAN MCCANN P.C.) FOR AUDITING SERVICES IN THE AMOUNT OF $67,550 IN A FORM ACCEPTABLE TO THE CITY ATTORNEY. A4361. I, James Thompson, City Clerk of the City of Palm Springs, California, hereby certify I that this Minute Order, approving Amendment No. 3 to Agreement No. 4361 with Conrad and Associates (dba Mayer Hoffman McCann P. C.) for auditing services in the amount of $67,550 in a form acceptable to the City Attorney, was adopted by the City Council of the City of Palm Springs, California, in a meeting thereof held on the 1s' day of February, 2006. James Thompson, City Clerk i City Council Staff Report February 1, 2006-- Page 2 Extension of Audit Services with Mayer Hoffman McCann PC (formally Conrad & Associates) I Staff is in the process of drafting a Request for Proposals for auditing services and hopes to bring a recommendation to the City Council this summer. The audit firm selected through this process will be responsible for the audit commencing with Fiscal Year 2006/07. As was previously noted, the City's agreement for auditing services is with Conrad and ' Associations. The City received correspondence on or about December 30, 2005 indicating that as of January 1, 2006, Conrad and Associates would merge with Mayer Hoffman McCann, P.C., a nationally recognized public accounting firm. Mayer Hoffman McCann, P.C., is a 51-year old independent CPA firm based in Leawood, Kansas. The firm has a total of 29 offices and 192 shareholders nationwide. Mayer Hoffman McCann specializes in attest services for mid-market businesses, not-for-profit organizations and governmental entities. The new Conrad Government Services Division of Mayer Hoffman McCann will be lead by Ron Conrad former managing partner of Conrad and Associates. The same partner and audit manager who has worked on the City's audit for the past seven years will continue to service the City's auditing needs during the extension. The proposed amendment extends the term of the existing agreement for one year and changes the company's name to reflect the merger with Mayer Hoffman McCann PC FISCAL IMPACT: The agreement for audit services for Fiscal Year 05/06 will be $67,550. This represents a nominal 2 '/2 percent increase over the previous year. This is a budgeted expense. Funds are available in Account #001-1300-43250. 9 Craig A. aves, Director of Finance and Tr y L�. Butzla , ',I istant City Manager- Treasure Ad, �istrative'S ices David H. Ready, City Meer Attachments: Minute Order Amendment to Agreement A4361 Correspondence from Mayer Hoffman McCann dated January 9, 2006 i FIRST AMENDMENT TO AGREEMENT FOR AUDIT SERVICES WITH CONRAD AND ASSOCIATES This First Amendment to the Consultant Services Agreement with Conrad and Associates ("First Amendment" or "Amended Agreement") is made and entered into this 15`day of February, 2006, by and between the CITY OF PALM SPRINGS, a municipal corporation ("City") and Conrad and Associates, a California Corporation ("Contractor") and amends that certain "Contract Services Agreement with Conrad and Associates" (the "Agreement") dated May 16, 2001 between the same parties. RECITALS A. On or about May 16, 2001, City and Contractor entered into a"Contract Services Agreement"pursuant to which Contractor agreed to perform annual audits of the City's financial records in accordance with generally accepted governmental auditing standards ("Project") for a fixed amount per year as set forth in the Schedule of Compensation. I I B. The agreement with Contractor was for a period of three (3) years with two, one year options at the City's sole discretion. C. The City has exercised both options and the agreement is set to expire at the completion of the audit for Fiscal Year 2004/05. D. The City is in the process of preparing a Request for Proposals and plans to solicit new proposals for auditing services. E. Until this process is complete and the City has selected a new audit fine, the Finance Director has requested that the current Contractor be retained for an additional year. F. On or about January 1, 2006 Contractor merged with another audit firm resulting in a narne change. G. Contractor will be practicing public accounting under the name Mayer Hoffinan McCann P.C. I H. Mayer Hoffinan McCann is a 51-year old independent CPA fine serving over 40 California cities. I. City and Contractor desire to amend the Agreement to extend the terns of the agreement for one additional year and to change the corporate naive to reflect the new company's identity. AGREEMENT The Agreement is hereby amended as follows: 1. "This Contract Services Agreement made and entered into on this 16°i day of May, 2001 by and between the CITY OF PALM SPRINGS, a municipal corporation, (herein"City") and Mayer Hoffinan McCarm P.C. (herein "Contractor")." 2. "2.1 Contract Sum. For the services rendered pursuant to this Agreement, Contractor shall be compensated in accordance with the"Schedule of Compensation" attached hereto as Exhibit "C" and incorporated herein by this reference, but not exceeding the maximum contract amount of Sixty Seven Thousand Five Hundred and Fifty Dollars ($67,550) ("Contract Sam")." 3. "Section 3.4 Tenn. Unless earlier terminated in accordance with Section 7.8 of this Agreement, this Agreement shall continue in full force and effect until completion of the services. The term of this agreement shall be for a one year period commencing July 1, 2006. In no event shall this agreement remain valid past July 1, 2007 unless otherwise extended by written approval of the City." 4. Except as expressly provided herein, all other terms and conditions of the Agreement shall remain in full force and effect. [Signature Block on Next Page] I i I j IN WITNESS WHEREOF, the parties hereto executed this First Amendment to be I effective as of the Date first written above. I CITY OF PALM SPRINGS, a municipal corporation I I I By: City Manager ATTEST: City Cleric APPROVED AS TO FORM: Mayer Hoffman McCaml, P.C. City Attorney Name: Title: li 4F/tiayev Hoffman - _ An Independent CPA Firm 2301 Dupont Drive, Suite 200 Irvine,California 92612 949-474-2020 ph 949-263-5520 fx www.mhm-pc.com January 9, 2006 Craig Graves Director of Finance and Treasury City of Palm Springs 3200 Tahquitz Canyon Way Palm Springs, CA 92262 Dear Craig: The purpose of this letter is to set forth the terms concerning the audit of the financial statements of the City of Palm Springs and related audits for the fiscal year ending June 30, 2006. We are one of the largest local firms in Southern California that specializes in local governmental auditing. We currently serve as auditors for 40 California cities and have performed over 200 municipal audits over the rast twenty years. We are proud of our leadership role in serving local governments. Ken X1-Imam is a member of CCMA (California Committee on Municipal Accounting). Mr. Al-Imam has authored a number of CCMA white papers, including recent white papers dealing with GASB No. 34 and GASB No. 40. We trust that you have been happy with our services. We value the City of Palm Springs as an important client of our firm. We will perform our audit of the City in accordance with generally accepted auditing standards. We will report to you in writing any material weaknesses in internal control or other reportable conditions detected by our procedures, as well as recommendations for improvement in City policies and procedures revealed by our procedures. In addition to auditing the financial statements of the City, we will perform a financial and compliance audit of the redevelopment agency in accordance with the guidelines issued by the State Controller's Office. We will perform a single audit on the federal financial assistance received by the City of Palm Springs, in accordance with the directives of OMB Circular A-133. We will perform an audit of the Palm Springs Public Financing Authority and prepare the annual State Controller's Report for the Financing Authority. We will report to you in writing the results of the procedures prescribed to be applied to the City's appropriation limitation for each fiscal year raider audit. We will perform our audits for the fixed fee indicated below, which reflects a small 2 '/2 percent increase for 05/06 from last year's fee (04/05): 2005-06 City Audit $ 24,813 CAFR Preparation 8,829 Redevelopment Agency 8,829 Financing Authority 10,596 Single Audit 12,716 PFA State Controller's Report 1,237 Gann Limit 530 Total 67 550 January 9, 2006 City of Palm Springs ]Page 2 Should the City exercise the option for our firm to perform the audit for 2006-07, we would agree to a 2.5% fee increase from the 2005-06 fee. Our fees contemplate no substantive changes in the scope of the audit work to be performed. The City will provide at the start of the year end audit, trial balances reflecting all necessary year-end adjustments, reconciliations, schedules supporting asset and liability balances, and provide assistance in the pulling of documents and the typing of confirmation requests. We understand that in the event that the City has not posted year end adjustments by the start of the audit or prepared analyses and schedules supporting year end general ledger balances, the City may use our firm to provide accounting assistance at the hourly rates indicated below to keep the audit progressing in a timely manner. The auditing standards require that we disclose to you the following: Auditors are responsible for planning the audit in a manner to provide reasonable, but not absolute, assurance that the financial statements are free of material misstatement. Management is responsible for maintaining the accounting records in accordance with generally accepted accounting principles and for adjusting the accounting records to correct misstatements so that the effects of any uncorrected misstatements are immaterial, both individually and in the aggregate to the financial statements taken as a whole. Also, because an audit is performed on a limited test basis, it cannot be relied upon to disclose instances of noncompliance, fraud or irregularity. $owever, we will report to you any such matters that come to our attention. The hourly rates for additional services or accounting assistance needed by the City are as follows: Classification Partner $190 Manager 115 Senior Accountant 95 Staff Accountant 85 If you concur with the foregoing, please sign and return a copy of this letter to our office. Sincerely, MAYER HOFFMAN MCCANN P.C. Keen Al-Imam, C.P.A. Partner Accepted: CITY OF PALM SPRINGS Signature: Title: Date: