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HomeMy WebLinkAboutAGENDA REPORT 2023 0301 CCSA REG ITEM 10ECITY OF MOORPARK, CALIFORNIA City Council Meeting of March 1, 2023 ACTION APPROVED STAFF RECOMMENDATION. BY A. Hurtado. E. Consider Amendment No. 4 to Agreement with Lance, Soll & Lunghard, LLP for Independent Financial Audit for the Fiscal Years Ending June 30, 2023 and June 30, 2024. Staff Recommendation: Authorize the City Manager to execute the Amendment, subject to final language approval by the City Manager. (Staff: PJ Gagajena, Assistant City Manager and Interim Finance Director/City Treasurer) Item: 10.E. MOORPARK CITY COUNCIL AGENDA REPORT TO: Honorable City Council FROM: PJ Gagajena, Assistant City Manager and Interim Finance Director/ City Treasurer BY: Liz Smith, Purchasing Analyst DATE: 03/01/2023 Regular Meeting SUBJECT: Consider Amendment No. 4 to Agreement with Lance, Soll & Lunghard, LLP for Independent Financial Audit for the Fiscal Years Ending June 30, 2023 and June 30, 2024 SUMMARY Staff recommends approval of Amendment No. 4 with Lance, Soll & Lunghard, LLP for Independent Financial Audit for the Fiscal Year (FY) ending June 30, 2023, with the option to extend the term for one additional year for FY ending June 30, 2024. If the term extension options are exercised, the total value of the agreement will increase by $139,380.00. BACKGROUND Lance, Soll & Lunghard, LLP (LSL) has performed the annual financial audit for the City of Moorpark for the past five years. During that time, LSL has also conducted the City’s annual Single Audit over federal award programs required by the federal Uniform Guidance, the annual compliance audits of its Transportation Development Act Funds required by Ventura County Transportation Commission, and procedures to verify the accuracy of the City’s annual Appropriations Limit calculation. The term of the LSL contract ends on May 31, 2023. Staff is requesting the City Council consider Amendment No. 4 to the LSL contract extending the term of the contract to May 31, 2025, which includes the fiscal year audits ending June 30, 2023, and June 30, 2024. Staff has a good working relationship with the LSL auditors and the auditors possess a thorough understanding of the City's financial system and operations. Staff believes it to be advantageous to retain the current audit staff for the current fiscal year with the option to extend for one additional year and that the current audit firm is the best qualified to accomplish this task. In addition, although Item: 10.E. 117 Honorable City Council 03/01/2023 Regular Meeting Page 2 their rates are increasing, staff believes this cost is less than what would be expected if the City went out to bid for similar services. DISCUSSION The current LSL contract was for a period of five years for FYs 2017/18, 2018/19, 2019/20, 2020/21 & 2021/22. Amendment No. 4 will extend the term by one year, to include FY 2022/23, with the option to extend one additional fiscal year for FY 2023/24. The price per fiscal year is a maximum of $69,690, totaling $139,380 if the option to extend one additional year is exercised. For comparison, the 2022 price was a maximum of $63,380. The increase is $6,310 per fiscal year. Staff recommends approving Amendment No. 4 of the LSL contract for FYs 2022/23 and 2023/24. FISCAL IMPACT The contract amount of $69,690 is already included in the FY 2022/23 budget. This amount will also be included in the budget for the additional one-year term in FY 2023/24. COUNCIL GOAL COMPLIANCE This action does not support a current strategic directive. STAFF RECOMMENDATION Authorize the City Manager to execute the Amendment, subject to final language approval by the City Manager. Attachment: Amendment No. 4 to the Lance, Soll & Lunghard, LLP Agreement 118 ATTACHMENT AMENDMENT NO. 4 TO AGREEMENT BETWEEN THE CITY OF MOORPARK AND LANCE, SOLL & LUNGHARD, LLP FOR PROFESSIONAL AUDITING SERVICES This Amendment No. 4 to the Agreement between the City of Moorpark, a municipal corporation (“City”), and Lance, Soll & Lunghard, a limited liability partnership (“Contractor”), for professional auditing services (“Agreement”), is made and entered into on this ___ day of ____________________, 2023. RECITALS WHEREAS, on August 3, 2018 the City and Contractor entered into an Agreement to have the Contractor provide professional auditing services; and WHEREAS, at the public meeting held on April 3, 2019, the City Council of the City of Moorpark approved the staff recommendation to enlist the Contractor to perform the National Transit Database (NTD) independent auditor’s Statement for Financial Data beginning Fiscal Year 2017-18 through Fiscal Year 2021-22 and the annual Transportation Development Act (TDA) Financial and Compliance Audit services beginning Fiscal Year 2018-19 through Fiscal Year 2021-22; and increased the all- inclusive audit fees by sixty-four thousand two hundred and fifty dollars ($64,250.00) for the additional services; and authorized the City Manager to execute the First Amendment; and WHEREAS, on April 24, 2019, the City and Contractor amended the Agreement to expand the scope of services to include the NTD and TDA audit reports; and to increase the compensation for services to be performed by Contractor from two hundred thirty thousand four hundred and fifty dollars ($230,450.00) by a value of sixty-four thousand two hundred and fifty dollars ($64,250.00) for a total contract value of two hundred ninety- four thousand seven hundred dollars ($294,700.00); and WHEREAS, on July 28, 2020, the City and Contractor amended the Agreement to modify the scope of services by adding the State Transit Assistance and State of Good Repair Funds to the TDA financial and compliance audit services; and to increase compensation by ten thousand dollars ($10,000.00) from two hundred ninety-four thousand seven hundred dollars ($294,700.00) to three hundred four thousand seven hundred dollars ($304,700.00.); and WHEREAS, on December 16, 2020, the City and Contractor amended the Agreement to modify the scope of services by adding the State Controller’s Office Financial Transactions Report for City Transit Information, and to increase compensation by three thousand dollars ($3,000.00) from three hundred four thousand seven hundred dollars ($304,700.00) to three hundred seven thousand seven hundred dollars ($307,700.00.) WHEREAS, the City and Contractor now desire to amend the Agreement for an additional period and document said agreement to amend by jointly approving Amendment No.4 to the Agreement; and 119 Amendment No. 4 to Agreement between City of Moorpark and Lance, Soll & Lunghard, LLP Page 2 of 3 WHEREAS, the City and Contractor now desire to amend the Agreement to increase the compensation for services to be performed by Contractor from three hundred seven thousand seven hundred dollars ($307,700.00) by a value of sixty-nine thousand six hundred ninety dollars ($69,690) per fiscal year for a total contract value of four hundred forty seven thousand eighty dollars ($447,080.00) and document said agreement to amend by jointly approving Amendment No. 4 to the Agreement. NOW, THEREFORE, it is mutually agreed by and between the parties to the Agreement as follows: I. Section 1, TERM, is amended by replacing this section in its entirety as follows: “The term of this Agreement shall be from the date of execution and will expire on May 31, 2025, unless sooner terminated or suspended pursuant to the provisions of the Agreement. Upon the mutual consent of both parties, the term of this Agreement may be extended by a written amendment executed by both parties for (1) additional one (1) year period.” II. Section 2, SCOPE OF SERVICES, is amended by replacing this section in its entirety as follows: “City does hereby retain Consultant, as an independent contractor, in a contractual capacity to provide professional auditing services, as set forth in Exhibit H. In the event there is a conflict between the provisions of Exhibit H and this Agreement, the language contained in this Agreement shall take precedence. Consultant shall perform the tasks described and set forth in Exhibit H. Consultant shall complete the tasks according to the schedule of performance which is also set forth in Exhibit H. Compensation for the services to be performed by Consultant shall be in accordance with Exhibit H. Compensation shall not exceed the rates as stated in Exhibit H or total contract value four hundred forty-seven thousand eighty dollars ($447,080.00), without a written Amendment to the Agreement executed by both parties. Payment by City to Consultant shall be in accordance with the provisions of this Agreement.” III. Section 5, Payment is amended by replacing the second paragraph in its entirety as follows: “The City agrees to pay Consultant monthly, in accordance with the payment rates and terms and the schedule of payment as set forth in Exhibit H, based upon actual time spent on the above tasks. This amount shall not exceed four hundred forty-seven thousand eighty dollars ($447,080.00) for the total term of the Agreement unless additional payment is approved as 120 Amendment No. 4 to Agreement between City of Moorpark and Lance, Soll & Lunghard, LLP Page 3 of 3 provided in this Agreement.” IV.Remaining Provisions: Except as revised by this Amendment No. 4, all of the provisions of the Agreement shall remain in full force and effect. In Witness Whereof, the parties hereto have caused this Amendment to be executed the day and year first above written. CITY OF MOORPARK LANCE, SOLL & LUNGHARD, LLP _______________________________ _______________________________ Troy Brown City Manager Bryan S. Gruber, CPA Partner Attest: _______________________________ Ky Spangler City Clerk 121 203 N. Brea Blvd., Suite203 Brea,CA92821Lance, Soll & Lunghard, LLP Phone: 714.672.0022 January 19, 2023 City of Moorpark PJ Gagajena, Assistant City Manager 799 Moorpark Ave. Moorpark, CA 93021 Lance, Soll & Lunghard, LLP is pleased to respond to your request to exercise an optional two-year extension to our current contract with the City. As a leader in the field of governmental accounting and auditing, we appreciate this opportunity given to us to continue our auditing services. Ryan Domino will continue as the lead audit partner for the optional audit periods ending June 30, 2023 and 2024. The remaining key personnel will continue from prior year, including Keili Gonzalez as the Supervisor, unless you request a change. We affirm that both years are optional, and each may be exercised at the City’s discretion. For the two-year extension, we evaluated your contract which began in 2018. As we are all aware the CPI over the past 5 years has exceeded 15%. We value the City and the professional relationship we have developed over the past contract, and we understand a 15% increase would be difficult. We will continue to provide our services with a smaller increase of 10% from our last contract. We want to continue to provide our services as well as retain high quality professional staff at the competitive market rates. The rates of our contract year in 2021/22 were $32,760 for the City’s basic financial audit, $4,340 for the Single Audit, $2,950 for the Housing Successor Fund financials, $4,040 for the Housing Addendum to Annual Progress Report, $15,000 for the TDA Audits (6 separate reports), $3,290 for the City State Controller’s Report, and $1,000 for the Transit State Controller’s Report. The new rate of services with the 10% increase for fiscal years ending June 30, 2023 and 2024 would be as follows: Prior Rate 2023 Rate 2024 Rate City Audit & Related Reports 32,760$ 36,030$ 36,030$ Housing Successor Fund Financials 2,950 3,240 3,240 Housing Addendum to Annual Progress Report 4,040 4,440 4,440 TDA Audit & Related Reports *15,000 16,500 16,500 Single Audit & Related Reports **4,340 4,770 4,770 City State Controllers Report 3,290 3,610 3,610 State Controller Report - Transit 1,000 1,100 1,100 Total 63,380$ 69,690$ 69,690$ * Six separate reports at $2,750 each. ** Assumes 1 major program. Each additional major program will be $1,980 in addition to the base fee for the Single Audit. Exhibit H 122 Page 2 If the City requests additional services outside the scope of this quote, the services will be billed at our professional hourly rates for 2023 and 2024: Partner $340 Senior Manager $260 Manager $220 Supervisor $195 Senior $170 Experienced Staff $145 Staff $125 Clerical $90 We hope you understand the increase described above and assure you we are committed to provided quality services for the City. We are committed to provide the services presented in our proposal in accordance with the timetable specified in our proposal dated March 7, 2018. This proposal is a firm and irrevocable offer for a period no less than 90 calendar days from the date of submittal. For purposes of this proposal, Ryan Domino, Partner is authorized to make representations for our firm. I can be reached at the address below, by phone at (714) 672-0022 or by email at Ryan.Domino@lslcpas.com. Ryan Domino, Partner LANCE, SOLL & LUNGHARD, LLP 123