Loading...
HomeMy WebLinkAbout06-04-2019 Item 13 - Award Auditing Services Contract Department Name: Finance Cost Center: 2006 For Agenda of: June 4, 2019 Placement: Consent Estimated Time: N/A FROM: Brigitte Elke, Finance Director Prepared By: Debbie Malicoat, Senior Administrative Analyst SUBJECT: AWARD AUDITING SERVICES CONTRACT RECOMMENDATION Award a contract for Auditing Services to Badawi & Associates in the amount of $308,415 for a period of five years, with an option to renew for an additional three years. (Attachment A) DISCUSSION Section 810 of the City Charter requires an annual audit of the City’s financial statement by an independent certified public accountant. In 2011, the Council entered into a multi-year contract for auditing services with Glenn Burdette, Certified Public Accountants. While their services have been outstanding, the contract has expired. As such, on February 25, 2019 the City Council authorized staff to issue a formal request for proposals (RFP) for this purpose. The City received six responses to the RFP. A staff review committee evaluated the responses, interviewed finalist firms and recommends awarding the contract for auditing services to Badawi & Associates. The RFP provides for a five-year term with an option to renew for an additional three years. The proposals were rated based on experience and expertise, approach to completing the work, their understanding of the work scope and proposed compensation. In short, the contract award is not based solely on price, but on a combination of factors in determining the best overall proposal. The staff review committee ranked Badawi & Associates highest based on their focus on municipal governmental clients of similar scope, knowledge, approach to completing the audit, and references. Their proposal is included as Attachment B. Policy Context Section 810 of the City Charter requires an annual audit of the City’s financial statement by an independent certified public accountant. The City’s purchasing policy supports periodic review of contractual relationships to ensure the best use of public funds. Public Engagement The results of the audit will be presented annually to the City Council in a public meeting and the public will have the opportunity to comment at that time. Packet Pg. 149 Item 13 CONCURRENCE This request is supported by the City’s Charter that requires the City’s audit be done by an independent certified public accountant. ENVIRONMENTAL REVIEW The California Environmental Quality Act does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15278. FISCAL IMPACT Budgeted: Yes Budget Year: Annually Funding Identified: Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund $71,000 $59,890 $11,110 $62,000 State Federal Fees Other: Whale Rock $5,000 $4,405 $595 $4,500 Transit $5,000 $5,050 ($50) $5,300 Total $81,000 $69,345 $11,655 $62,000 The proposed fee schedule for the five-year term is identified below: Service 2019 2020 2021 2022 2023 City audit and related reports $44,785 $45,725 $46,435 $46,435 $46,435 TDA financial audit and compliance report 5,050 5,240 5,280 5,280 5,280 Single Audit report 4,695 4,945 5,100 5,100 5,100 Whale Rock Commission report 4,415 4,405 4,545 4,545 4,545 Gann Limit Report 945 995 1,045 1,045 1,045 Total $59,890 $61,310 $62,405 $62,405 $62,405 Packet Pg. 150 Item 13 ALTERNATIVES Award Contract to Another Proposer. The City Council could award the auditing services contract to another firm that responded to the RFP. Based on the staff review committee, the most responsive auditing firm was Badawi & Associates. Renegotiate the Existing Contract. Although staff has been satisfied with the services provided by the current auditor, this alternative is not recommended as the staff review committee rating for the firm was not higher than Badawi & Associates. Attachments: a - Award Audit Contract b - Badawi Proposal Packet Pg. 151 Item 13 AGREEMENT THIS AGREEMENT is made and entered into in the City of San Luis Obispo on [day, date, year], by and between the CITY OF SAN LUIS OBISPO, a municipal corporation, hereinafter referred to as City, and BADAWI & ASSOCIATES CERTIFIED PUBLIC ACCOUNTANTS, hereinafter referred to as Consultant. W I T N E S S E T H: WHEREAS, on April 12, 2019, City requested proposals for auditing services, per Project No. 19- 2005-1 (Project); WHEREAS, through the City’s request for proposal process, Consultant submitted a proposal on April 12, 2019 to perform auditing services for the Project; and 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 the date this Agreement is made and entered, as first written above, until June 6, 2024 with an option to extend for additional three years by mutual agreement of both parties. 2. INCORPORATION BY REFERENCE. Consultant agrees to perform the services set forth in the City’s Project and Consultant’s proposal dated April 12, 2019, which is incorporated herein by this reference. Consultant further agrees to comply with the City’s standard terms and conditions and insurance requirements which are attached hereto as Exhibits A and B, respectively, and incorporated herein by this reference. Should there be any conflict between Consultant’s proposal and the City’s standard terms or conditions, the City’s standard terms and conditions shall control. 3. CITY'S OBLIGATIONS. For providing the services as specified in this Agreement, City will pay, and Consultant shall receive therefore compensation in a total sum not to exceed $308,415 as outlined in Consultant’s proposal and incorporated herein. Consultant shall be eligible for compensation installments after completion of milestone tasks as specified in the proposal. Packet Pg. 152 Item 13 4. CONSULTANT'S OBLIGATIONS. For and in consideration of the payments and agreements hereinbefore mentioned to be made and performed by City, Consultant 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’s Council or City Manager. 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 Consultant Ahmed M. Badawi, CPA President 180 Grand Avenue, Suite 1500 Oakland, CA 94612 8. AUTHORITY TO EXECUTE AGREEMENT. Both City and Consultant 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. Packet Pg. 153 Item 13 IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written. CITY OF SAN LUIS OBISPO ____________________________________ By: Derek Johnson City Manager CONSULTANT ____________________________________ By: Ahmed M. Badawi, CPA Its: President APPROVED AS TO FORM: ____________________________________ Christine Dietrick City Attorney Packet Pg. 154 Item 13 Exhibit A GENERAL TERMS AND CONDITIONS REQUIREMENTS AND CONTRACT PERFORMANCE 1. Insurance Requirements. The Contractor shall provide proof of insurance in the form, coverages and amounts specified in Section E of the Request for Proposals, unless changes are otherwise approved by City. 2. Business License & Tax. The Contractor must have a valid City of San Luis Obispo business license & tax certificate before execution of the contract. Additional information regarding the City’s business tax program may be obtained by calling (805) 781-7134. 3. Ability to Perform. The Contractor warrants that it possesses, or has arranged through subcontracts, all capital and other equipment, labor, materials, and licenses necessary to carry out and complete the work hereunder in compliance with all federal, state, county, city, and special district laws, ordinances, and regulations. 4. Laws to be Observed. The Contractor shall keep itself fully informed of and shall observe and comply with all applicable state and federal laws and county and City of San Luis Obispo ordinances, regulations and adopted codes during its performance of the work. 5. Payment of Taxes. The contract prices shall include full compensation for all taxes that the Contractor is required to pay. 6. Permits and Licenses. The Contractor shall procure all permits and licenses, pay all charges and fees, and give all notices necessary. 7. Safety Provisions. The Contractor shall conform to the rules and regulations pertaining to safety established by OSHA and the California Division of Industrial Safety. 8. Public and Employee Safety. Whenever the Contractor’s operations create a condition hazardous to the public or City employees, it shall, at its expense and without cost to the City, furnish, erect and maintain such fences, temporary railings, barricades, lights, signs and other devices and take such other protective measures as are necessary to prevent accidents or damage or injury to the public and employees. 9. Preservation of City Property. The Contractor shall provide and install suitable safeguards, approved by the City, to protect City property from injur y or damage. If City property is injured or damaged resulting from the Contractor’s operations, it shall be replaced or restored at the Contractor’s expense. The facilities shall be replaced or restored to a condition as good as when the Contractor began work. 10. Immigration Act of 1986. The Contractor warrants on behalf of itself and all subcontractors engaged for the performance of this work that only persons authorized to work in the United State pursuant to the Immigration Reform and Control Act of 1986 and other applicable laws shall be employed in the performance of the work hereunder. Packet Pg. 155 Item 13 11. Contractor Non-Discrimination. In the performance of this work, the Contractor agrees that it will not engage in, nor permit such subcontractors as it may employ, to engage in discrimination in employment of persons because of age, race, color, sex, national origin or ancestry, sexual orientation, or religion of such persons. 12. Work Delays. Should the Contractor be obstructed or delayed in the work required to be done hereunder by changes in the work or by any default, act, or omission of the City, or by strikes, fire, earthquake, or any other Act of God, or by the inability to obtain materials, equipment, or labor due to federal government restrictions arising out of defense or war programs, then the time of completion may, at the City’s sole option, be extended for such periods as may be agreed upon by the City and the Contractor. In the event that there is insufficient time to grant such extensions prior to the completion date of the contract, the City may, at the time of acceptance of the work, waive liquidated damages that may have accrued for failure to complete on time, due to any of the above, after hearing evidence as to the reasons for such delay, and making a finding as to the causes of same. 13. Payment Terms. The City’s payment terms are 30 days from the receipt of an original invoice and acceptance by the City of the materials, supplies, equipment, or services provided by the Contractor (Net 30). 14. Inspection. The Contractor shall furnish City with every reasonable opportunity for City to ascertain that the services of the Contractor are being performed in accordance with the requirements and intentions of this contract. All work done, and all materials furnished, if any, shall be subject to the City’s inspection and approval. The inspection of such work shall not relieve Contractor of any of its obligations to fulfill its contract requirements. 15. Audit. The City shall have the option of inspecting and/or auditing all records and other written materials used by Contractor in preparing its invoices to City as a condition precedent to any payment to Contractor. 16. Interests of Contractor. The Contractor covenants that it presently has no interest, and shall not acquire any interest—direct, indirect or otherwise—that would conflict in any manner or degree with the performance of the work hereunder. The Contractor further covenants that, in the performance of this work, no subcontractor or person having such an interest shall be employed. The Contractor certifies that no one who has or will have any financial interest in performing this work is an officer or employee of the City. It is hereby expressly agreed that, in the performance of the work hereunder, the Contractor shall at all times be deemed an independent contractor and not an agent or employee of the City. 17. Hold Harmless and Indemnification. (a) Non-design, non-construction Professional Services: To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8), Consultant shall indemnify, defend, and hold harmless the City, and its elected officials, officers, employees, volunteers, and agents (“City Indemnitees”), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of the Consultant’s performance or Consultant’s failure to perform its obligations under this Agreement or out of the operations Packet Pg. 156 Item 13 conducted by Consultant, including the City’s active or passive negligence, except for such loss or damage arising from the sole negligence or willful misconduct of the City. In the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. (b) Non-design, construction Professional Services: To the extent the Scope of Services involve a “construction contract” as that phrase is used in Civil Code Section 2783, this paragraph shall apply in place of paragraph A. To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8), Consultant shall indemnify, defend, and hold harmless the City, and its elected officials, officers, employees, volunteers, and agents (“City Indemnitees”), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of the Consultant’s performance or Consultant’s failure to perform its obligations under this Agreement or out of the operations conducted by Consultant, except for such loss or damage arising from the active negligence, sole negligence or willful misconduct of the City. In the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. (c) Design Professional Services: In the event Consultant is a “design professional”, and the Scope of Services require Consultant to provide “design professional services” as those phrases are used in Civil Code Section 2782.8, this paragraph shall apply in place of paragraphs A or B. To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8) Consultant shall indemnify, defend and hold harmless the City and its elected officials, officers, employees, volunteers and agents (“City Indemnitees”), from and against all claims, damages, injuries, losses, and expenses including costs, attorney fees, expert consultant and expert witness fees arising out of, pertaining to or relating to, the negligence, recklessness or willful misconduct of Consultant, except to the extent caused by the sole negligence, active negligence or willful misconduct of the City. Negligence, recklessness or willful misconduct of any subcontractor employed by Consultant shall be conclusively deemed to be the negligence, recklessness or willful misconduct of Consultant unless adequately corrected by Consultant. In the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. In no event shall the cost to defend charged to Consultant under this paragraph exceed Consultant’s proportionate percentage of fault. However, notwithstanding the previous sentence, in the event one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, Consultant shall meet and confer with other parties regarding unpaid defense costs. (d) The review, acceptance or approval of the Consultant’s work or work product by any indemnified party shall not affect, relieve or reduce the Consultant’s indemnification or defense obligations. This Section survives completion of the services or the termination of this contract. Packet Pg. 157 Item 13 The provisions of this Section are not limited by and do not affect the provisions of this contract relating to insurance. 18. Contract Assignment. The Contractor shall not assign, transfer, convey or otherwise dispose of the contract, or its right, title or interest, or its power to execute such a contract to any individual or business entity of any kind without the previous written consent of the City. 19. Termination for Convenience. The City may terminate all or part of this Agreement for any or no reason at any time by giving 30 days written notice to Contractor. Should the City terminate this Agreement for convenience, the City shall be liable as follows: (a) for standard or off-the-shelf products, a reasonable restocking charge not to exceed ten (10) percent of the total purchase price; (b) for custom products, the less of a reasonable price for the raw materials, components work in progress and any finished units on hand or the price per unit reflected on this Agreement. For termination of any services pursuant to this Agreement, the City’s liability will be the lesser of a reasonable price for the services rendered prior to termination, or the price for the services reflected on this Agreement. Upon termination notice from the City, Contractor must, unless otherwise directed, cease work and follow the City’s directions as to work in progress and finished goods. 20. Termination. If, during the term of the contract, the City determines that the Contractor is not faithfully abiding by any term or condition contained herein, the City may notify the Contractor in writing of such defect or failure to perform. This notice must give the Contractor a 10 (ten) calendar day notice of time thereafter in which to perform said work or cure the deficiency. If the Contractor has not performed the work or cured the deficiency within the ten days specified in the notice, such shall constitute a breach of the contract and the City may terminate the contract immediately by written notice to the Contractor to said effect. Thereafter, neither party shall have any further duties, obligations, responsibilities, or rights under the contract except, however, any and all obligations of the Contractor’s surety shall remain in full force and effect, and shall not be extinguished, reduced, or in any manner waived by the terminations thereof. In said event, the Contractor shall be entitled to the reasonable value of its services performed from the beginning date in which the breach occurs up to the day it received the City’s Notice of Termination, minus any offset from such payment representing the City’s damages from such breach. “Reasonable value” includes fees or charges for goods or services as of the last milestone or task satisfactorily delivered or completed by the Contractor as may be set forth in the Agreement payment schedule; compensation for any other work, services or goods performed or provided by the Contractor shall be based solely on the City’s assessment of the value of the work-in-progress in completing the overall work scope. The City reserves the right to delay any such payment until completion or confirmed abandonment of the project, as may be determined in the City’s sole discretion, so as to permit a full and complete accounting of costs. In no event, however, shall the Contractor be entitled to receive in excess of the compensation quoted in its proposal. Packet Pg. 158 Item 13 Exhibit B INSURANCE REQUIREMENTS Consultant Services The Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, employees or subconsultants. Minimum Scope of Insurance. Coverage shall be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001). 2. Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1 (any auto). 3. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. 4. Errors and Omissions Liability insurance as appropriate to the consultant's profession. Minimum Limits of Insurance. Consultant shall maintain limits no less than: 1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage. 3. Employer's Liability: $1,000,000 per accident for bodily injury or disease. 4. Errors and Omissions Liability: $1,000,000 per occurrence. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees and volunteers; or the Consultant shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: 1. The City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Consultant; products and completed operations of the Consultant; premises owned, occupied or used by the Consultant; or automobiles owned, leased, hired or borrowed by the Consultant. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, official, employees, agents or volunteers. 2. For any claims related to this project, the Consultant's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Consultant's insurance and shall not contribute with it. 3. The Consultant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. Packet Pg. 159 Item 13 4. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the City. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII. Verification of Coverage. Consultant shall furnish the City with a certificate of insurance showing maintenance of the required insurance coverage. Original endorsements effecting general liability and automobile liability coverage required by this clause must also be provided. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before work commences. Packet Pg. 160 Item 13 Packet Pg. 161Item 13 Packet Pg. 162Item 13 Packet Pg. 163Item 13 Packet Pg. 164Item 13 Packet Pg. 165Item 13 Packet Pg. 166Item 13 Packet Pg. 167Item 13 Packet Pg. 168Item 13 Packet Pg. 169Item 13 Packet Pg. 170Item 13 Packet Pg. 171Item 13 Packet Pg. 172Item 13 Packet Pg. 173Item 13 Packet Pg. 174Item 13 Packet Pg. 175Item 13 Packet Pg. 176Item 13 Packet Pg. 177Item 13 Packet Pg. 178Item 13 Packet Pg. 179Item 13 Packet Pg. 180Item 13 Packet Pg. 181Item 13 Packet Pg. 182Item 13 Packet Pg. 183Item 13 Packet Pg. 184Item 13 Packet Pg. 185Item 13 Packet Pg. 186Item 13 Packet Pg. 187Item 13 Packet Pg. 188Item 13 Packet Pg. 189Item 13 Packet Pg. 190Item 13 Packet Pg. 191Item 13 Packet Pg. 192Item 13 Packet Pg. 193Item 13 Packet Pg. 194Item 13 Packet Pg. 195Item 13 Packet Pg. 196Item 13 Packet Pg. 197Item 13 Packet Pg. 198Item 13 Packet Pg. 199Item 13 Packet Pg. 200Item 13 Packet Pg. 201Item 13 Packet Pg. 202Item 13 Packet Pg. 203Item 13 Packet Pg. 204Item 13 Packet Pg. 205Item 13 Page intentionally left blank. Packet Pg. 206 Item 13