HomeMy WebLinkAbout03-21-2017 Item 11 - Award of Audit Services Contract Meeting Date: 3/21/2017
FROM: Xenia Bradford, Interim Finance Director
Prepared By: Kristin Eriksson, Purchasing Analyst
SUBJECT: AWARD OF AUDIT SERVICES CONTRACT
RECOMMENDATION
Authorize the City Manager to execute a new contract for auditing services to Glenn, Burdette,
Phillips & Bryson, Certified Public Accountants (GBPB), for a term two fiscal years, beginning
with the current fiscal year, to complete the term contemplated in the request for proposals (RFP)
for such services.
REPORT-IN-BRIEF
An RFP for auditing services was previously issued on April 16, 2011 which requested proposals
for a five fiscal-year contract with an option to renew for an additional three additional fiscal
years, for a total of up to eight years which expires in June, 2018. The RFP resulted in five
proposals from firms. GBPB, the vendor providing existing auditing services at the time, was
selected by the review team and the Interim Finance Director recommended that the Council
award a three fiscal-year contract with the option to renew for an additional two years. The
Council voted to award the contract at its regular meeting on June 7, 2011. The contract, as
amended, expired on June 30, 2016. However, GBPB has continued providing auditing services,
beyond the time period originally approved by the Council, pursuant to “Engagement Letters”
provided by GBPB. It is recommended that the City enter into a new contract with GBPB under
the prior RFP to cover services through fiscal year 2017-2018, at which point the City will issue
a new RFP for auditing services.
DISCUSSION
On April 5, 2011, the Council authorized issuing an RFP for auditing services. The RFP was
posted on the City’s website, advertised in the local newspaper and forwarded directly to nine
California firms with experience in local government auditing on April 16, 2011. Six firms
participated in a pre-approval teleconference on April 20, 2011. The City received five
proposals, as summarized in the attached Council Agenda Report dated June 7, 2011, and
selected GBPB as the desired contractor.
The evaluation team determined that changing audit firms at that time would require a significant
amount of staff time from all departments during a time of increased workloads due to multiple
software upgrades and work related to Major Cit y Goals. The team concluded that such a
disruption would not be beneficial to the City at that time. However, the team also determined
that maintaining stability should be balanced against the professional responsibility to act as
stewards of the public trust and secure the best pricing and diligently evaluate auditing services
to ensure the City’s needs are met. Therefore, they recommended that the Council approve a
contract with a three fiscal-year initial term with an option to renew for two additional fiscal
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years, rather than the contract for five fiscal-years with an option to renew for three additional
years originally contemplated in the RFP. The Council approved the contract award as
recommended.
GBPB provided auditing services throughout the initial term of the contract, which expired on
June 30, 2014 without action to extend the term. However, on December 15, 2014, the City
signed an amendment to add additional services to the original statement of work (financial
statement compilation) and to extend the contract for an additional two fiscal years. That
amendment expired on June 30, 2016.
Despite the expiration of the contract, GBPB continued to perform the work in accordance with
the original proposal without a formal agreement in place. A total of $56,450 has been paid to
GBPB this fiscal year for work already performed.
Because the original RFP requested proposals for a possible total of eight fiscal years,
purchasing policy allows for cumulative contracts for that entire term, assuming Council
approval is in place. As the auditing services are crucial services for the City, it is recommended
that a new contract be awarded under the remaining term contemplated by the original RFP.
Prior to expiration of the new contract, Finance will request permission to issue a new RFP for
auditing services.
FISCAL IMPACT
The total estimated fees for the proposed two fiscal-years contract with GBPB are $138,800.
Allowing for some additional fees as necessary, the recommended total not-to-exceed amount for
the two fiscal-years contract will be $158,800. The fees proposed for GBPB’s services are set
forth below:
2016-2017 2017-2018
City’s Basic Financial Statements/GAAN Appropriations
Limit
$40,700 $42,000
Compilation of CAFR $10,300 $10,600
TDA Financial Audit Report $5,250 $5,400
Single Audit Act Report $7,500 $7,725
Whale Rock Commission Audit Report $4,600 $4,725
Total $68,350 $70,450
ALTERNATIVES
The Council could choose to require a new RFP for auditing services at this time. As ther e is no
contract currently in place for such services, this action would either require cessation of auditing
services pending the RFP process or continuation of services without a contract, in violation of
City purchasing policy, and so is not recommended at this time.
The Council could choose to award the contract for only one fiscal year to complete services in
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the current fiscal year (2016-2017) and require a new RFP for auditing services for fiscal year
2017-2018. Although the Government Finance Officers Association (GFOA) best practices
recommends cities issue RFPs every five years, the policy also recognizes the value in continuity
of services and minimization of start-up costs, so it does not require that cities change auditors
every five years. Further, changing audit firms would require significant work for staff in
several City departments, including Finance, and public Works and Utilities who interface with
the auditors in preparing for the TDA and Whale Rock reports. City staff is already impacted by
several other workload factors, including the pending due dates for the five-year budget forecast
and two-year operating budgets, the Motion Project. Therefore, this action is not recommended
at this time.
Attachments:
a - Auditor Agreement Spec 91067
b - Proposal for Auditing Services ("Engagement Letter")
c - 2011 Proposal 91607 GBPB
d - Award of Audit Services Contract 6-7-11
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AGREEMENT
THIS AGREEMENT is made and entered into in the City of San Luis Obispo on ,
by and between the CITY OF SAN LUIS OBISPO, a municipal corporation, hereinafter referred to as
City, and Glenn, Burdette, Phillips & Bryson, Certified Public Accountants, a Professional Corporation,
hereinafter referred to as Contractor.
W I T N E S S E T H:
WHEREAS, on April 5, 2011, City requested proposals for auditing services per Specification
No. 91067.
WHEREAS, pursuant to said request, Contractor submitted a proposal which was accepted by
City for said auditing services through 2018.
WHEREAS, a prior agreement that was entered into between City and Contractor expired on
December 13, 2016.
WHEREAS, the City wishes to continue to contract for Contractor’s services through the
remainder of the period contemplated in Specification No. 91067.
NOW THEREFORE, in consideration of their mutual promises, obligations, and covenants
hereinafter contained, the parties hereto agree as follows:
1. TERM. The term of this Agreement shall be from July 1, 2016 until June 30, 2018.
2. INCORPORATION BY REFERENCE. City Specification No. 91067 and
Contractor's proposal dated April 27, 2011 are hereby incorporated in and made a part of this Agreement.
Additionally, Contractor’s Engagement Letter, dated February 24, 2017 and attached hereto is hereby
incorporated and made part of this Agreement.
3. CITY'S OBLIGATIONS. For providing auditing services as specified in this
Agreement, City will pay and Contractor shall accept therefore compensation as stated in Contractor’s
Engagement Letter, dated February 24, 2017, and in no event shall exceed $158,800.
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4. CONTRACTOR'S OBLIGATIONS. For and in consideration of the payments and
agreements hereinbefore mentioned to be made and performed by City, Contractor agrees with City to do
everything required by this Agreement and the said Specification.
5. AMENDMENTS. Any amendment, modification or variation from the terms of this
Agreement shall be in writing and shall be effective only upon approval by the City Manager of the City.
6. COMPLETE AGREEMENT. This written Agreement, including all writings
specifically incorporated herein by reference, shall constitute the complete agreement between the parties
hereto. No oral agreement, understanding, or representation not reduced to writing and specifically
incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding, or
representation be binding upon the parties hereto.
7. NOTICE. All written notices to the parties hereto shall be sent by United States mail,
postage prepaid by registered or certified mail addressed as follows:
City City Clerk
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
Contractor Al Eschenbach, CPA
Glenn, Burdette, Phillips & Bryson
Certified Public Accountants
A Professional Corporation
1150 Palm Street
San Luis Obispo, CA 93401
Email: al.eschenbach@glennburdette.com
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8. AUTHORITY TO EXECUTE AGREEMENT. Both City and Contractor do covenant
that each individual executing this agreement on behalf of each party is a person duly authorized and
empowered to execute Agreements for such party.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day
and year first above written.
ATTEST: CITY OF SAN LUIS OBISPO
____________________________________ By:____________________________________
City Clerk Mayor
APPROVED AS TO FORM: CONTRACTOR
_____________________________________ By: ___________________________________
City Attorney
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