HomeMy WebLinkAboutAGENDA REPORT 2014 1001 CCSA REG ITEM 10HITEM 10.H.
CITY OF MOORPARK, CALIFORNIA
City Council IVleeting
TO:
FROM:
DATE:
SUBJECT:
SUMMARY
MOORPARK CITY COUNCIL
AGENDA REPORT
Honorable City Council
Ron Ahlers, Finance Director 61./~ -
September 18, 2014 (City Council Meeting October 1, 2014)
Consider Amendment No. 2 to Agreement with Rogers, Anderson,
Malody & Scott, LLP for Independent Financial Audit of Low and
Moderate Income Housing Fund and Authorize the City Manager to
Execute the Amendment; and Consider Resolution Amending the
Fiscal Year 2014/15 Budget to Fund the Audit
Senate Bill 341 (SB 341 ), signed by the Governor on October 13, 2013, requires two
reports to be filed with the State by December 31st each year. One report is the annual
progress report; the other is "an independent financial audit of the Low and Moderate
Income Housing Asset Fund". Staff has received a quote from the City's auditors that
these reports shall cost $5,000 to $8,000 annually (see attached letter from Terry Shea,
Partner in Rogers, Anderson, Malady & Scott, LLP (RAMS).
Staff is requesting the City Council consider Amendment No. 2 to the RAMS contract to
enlist the services of RAMS to complete the Addendum to the Annual Progress Report
and to prepare "an independent financial audit of the Low and Moderate Income
Housing Asset Fund". This action shall increase the contract by $24,000. There are
three years remaining on the contract ($8,000 each year: 2014, 2015 and 2016). Staff
is requesting the City Council consider the attached Resolution to appropriate $8,000
from the Housing-Successor Agency Fund, in FY 2014/15 for the specified services for
fiscal year ending June 30, 2014.
DISCUSSION
Below is the government code section relating to the independent financial audit and the
applicable dates of completion and submission of the reports.
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Honorable City Council
October 1, 2014
Page 2
Government Code section 34176.1 states:
34176 (a)(1)The city, county, or city and county that authorized the
creation of a redevelopment agency may elect to retain the housing assets
and functions previously performed by the redevelopment agency. If a city,
county, or city and county elects to retain the authority to perform housing
functions previously performed by a redevelopment agency, all rights,
powers, duties, obligations, and housing assets, as defined in subdivision
(e), excluding any amounts on deposit in the Low and Moderate Income
Housing Fund and enforceable obligations retained by the successor
agency, shall be transferred to the city, county, or city and county ...
34176.1 Funds in the Low and Moderate Income Housing Asset Fund
described in subdivision (d) of Section 34176 shall be subject to the
provisions of the Community Redevelopment Law (Part 1 (commencing
with Section 33000)) relating to the Low and Moderate Income Housing
Fund, except as follows: ...
(f) Section 33080.1 of this code and Section 12463.3 of the Government
Code shall not apply. Instead, the housing successor shall conduct,
and shall provide to its governing body, an independent financial
audit of the Low and Moderate Income Housing Asset Fund within
six months after the end of each fiscal year, which may be included in
the independent financial audit of the host jurisdiction. If the housing
successor is a city or county, it shall also include in its report pursuant to
Section 65400 of the Government Code and post on its Internet Web site
all of the following information for the previous fiscal year. If the housing
successor is not a city or county, it shall also provide to its governing body
and post on its Internet Web site all of the following information for the
previous fiscal year:
(1) The amount deposited to the Low and Moderate Income Housing
Asset Fund, distinguishing any amounts deposited for items listed on the
Recognized Obligation Payment Schedule from other amounts deposited.
(2) A statement of the balance in the fund as of the close of the fiscal year,
distinguishing any amounts held for items listed on the Recognized
Obligation Payment Schedule from other amounts.
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Honorable City Council
October 1, 2014
Page 3
(3) A description of expenditures from the fund by category, including, but
not limited to, expenditures (A) for monitoring and preserving the long-
term affordability of units subject to affordability restrictions or covenants
entered into by the redevelopment agency or the housing successor and
administering the activities described in paragraphs (2) and (3) of
subdivision (a), (B) for homeless prevention and rapid rehousing services
for the development of housing described in paragraph (2) of subdivision
(a), and (C) for the development of housing pursuant to paragraph (3) of
subdivision (a).
(4) As described in paragraph (1) of subdivision (a), the statutory value of
real property owned by the housing successor, the value of loans and
grants receivable, and the sum of these two amounts.
(5) A description of any transfers made pursuant to paragraph (2) of
subdivision (c) in the previous fiscal year and, if still unencumbered, in
earlier fiscal years and a description of and status update on any project
for which transferred funds have been or will be expended if that project
has not yet been placed in service.
(6) A description of any project for which the housing successor receives
or holds property tax revenue pursuant to the Recognized Obligation
Payment Schedule and the status of that project.
(7) For interests in real property acquired by the former redevelopment
agency prior to February 1, 2012, a status update on compliance with
Section 33334.16. For interests in real property acquired on or after
February 1, 2012, a status update on the project.
(8) A description of any outstanding obligations pursuant to Section 33413
that remained to transfer to the housing successor on February 1, 2012, of
the housing successor's progress in meeting those obligations, and of the
housing successor's plans to meet unmet obligations. In addition, the
housing successor shall include in the report posted on its Internet Web
site the implementation plans of the former redevelopment agency.
(9) The information required by subparagraph (B) of paragraph (3) of
subdivision (a).
(10) The percentage of units of deed-restricted rental housing restricted to
seniors and assisted individually or jointly by the housing successor, its
former redevelopment agency, and its host jurisdiction within the previous
10 years in relation to the aggregate number of units of deed-restricted
rental housing assisted individually or jointly by the housing successor, its
249
Honorable City Council
October 1, 2014
Page 4
former redevelopment agency, and its host jurisdiction within the same
time period.
(11) The amount of any excess surplus, the amount of time that the
successor agency has had excess surplus, and the housing successor's
plan for eliminating the excess surplus.
(Added by Stats. 2013, Ch. 796, Sec. 2. Effective January 1, 2014.)
FISCAL IMPACT
These two reports are estimated to cost a combined $5,000 to $8,000 annually. The
contract with RAMS will be increased by $24,000 ($8,000 for each year: 2014, 2015 and
2016). The attached resolution appropriates $8,000 from the Successor Housing Fund
(2203) for audit work needed for fiscal year ending June 30, 2014.
STAFF RECOMMENDATION (ROLL CALL VOTE)
1. Authorize the City Manager to execute the Amendment, subject to final language
approval by the City Manager
2. Adopt Resolution No. 2014-, amending the FY 2014/15 Budget
Attachments:
1. Letter from Terry Shea, RAMS partner
2. Amendment #2 to the RAMS contract
3. Resolution No. 2014----
250
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ROGERS. ANDERSON, MALODY & SCOTT. LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
Ron Ahlers, Finance Director
City of Moorpark
799 Moorpark Ave.
Moorpark, CA 93021
August 11, 2014
Attachment 1
RE: NEW ANNUAL REPORT REQUIREMENTS FOR HOUSING
SUCCESSORS TO REDEVELOPMENT AGENCIES
Dear Ron.
In order to assist the City of Moorpark (the City) in its effort to comply with the
new requirements of Senate Bill 341 (SB 341) and the California Department of
Housing and Community Development, we are offering the following services to
the City:
A) to prepare the Addendum to the Annual Progress Report (APR), and
B) to prepare an individual set of Audited Financial Statements for the
City of Moorpark's Housing Successor Fund.
Senate Bill 341
"Addendum to the Annual Progress Report"
Senate Bill 341 (Chapter 796, Statutes of 2013, effective January 2014)
amended Health & Safety Code Section 34176 to address particular provisions
and functions relating to former "redevelopment agencies" and new "Housing
Successor" entities allowed to elect to assume particular functions of
redevelopment agencies (RDAs) after being dissolved in 2012. SB 341 changed
the former annual report requirement due to both the State Controller and
Department of Housing and Community Development (HCD). As a result, all
Successor Housing entities now have a new annual report requirement due
within six months after the end of each fiscal year, starting with the fiscal year
ending in 2014, to provide an "Independent Financial Audit" to their governing
body.
In addition, a City's Housing Successor has an additional requirement to report
specified housing financial and activity information by:
(1) Including the specified information with the Annual Progress Report (APR)
submitted to HCD pursuant to State housing law to report progress in
implementing the Housing Element. and
STABILITY ACCURACY ·musT. 251
Ron Ahlers
Finance Director
(2) Posting specified information on the City's Housing Successor website.
Attachment 1
August 11, 2014
Page 2
The additional specified housing financial and activity information required by SB 341 should be reported
as a paper filing identified as an "Addendum to the APR".
Audited Financial Statements for the Housing Successor Fund
Although California Code Section 34176.1, subsection(f) reads: " ... the housing successor shall conduct,
and shall provide to its governing body, an independent financial audit of the Low and Moderate Income
Housing Asset Fund within six months after the end of each fiscal year, which may be included in the
independent financial audit of the host jurisdiction." We are extending our offer to the City of Moorpark to
provide a separate set of Audited Financial Statements, for the Housing Successor Fund. We consider a
separate set of Audited Financial Statements a great tool for current and future planning and compliance
achievements for housing development related granting agencies or organizations, at the federal and
state level. From our knowledge of other Housing entities, certain housing development grants and/or
loan applications require the submission of a separate set of financial statements. It is our responsibility to
communicate to you the benefits of what we consider to be a great financial reporting tool and it is your
responsibility to analyze these benefits and determine if the City of Moorpark could benefit from a
separate set of Audited Financial Statements for the Housing Successor Fund.
Fees Schedule
We estimate our billings for the above mentioned services would be as follows:
A) Addendum to the Annual Progress Report .......................... between $3,000 to $5,000
B) Housing Successor Fund Audited Financial Statements ................ between $3,000 to $5,000
If you decide to engage us to prepare both reports, we estimate our fees would be:
A & B) Addendum to the APR & Housing Successor Audited Financials ... between $5,000 to $8,000
The above estimated fee is based on anticipated cooperation from your personnel and the assumption
that unexpected circumstances will not be encountered during the performance of the engagements. ff
while performing the engagements significant additional time is necessary, we will discuss it with you and
arrive at a new fee estimate before incurring additional costs.
We appreciate the opportunity to be of service to the City of Moorpark and believe this communication
accurately summarizes our proposal for new services. If you would like to engage us to perform either or
both of the services offered herein, please let us know immediately to accommodate the necessary
personnel required for the timely completion of the reports.
252
Ron Ahlers
Finance Director
If you have any questions, comments or concerns please contact us.
Very truly yours,
Attachment 1
August 11, 2014
Page 3
ROGERS, ANDERSON, MALODY & SCOTT, LLP ;££, Ter~;~A
253
Attachment 2
AMENDMENT NO. 2
TO AGREEMENT BETWEEN THE CITY OF MOORPARK AND
ROGERS, ANDERSON, MALODY & SCOTT, LLP
FOR INDEPENDENT AUDIT SERVICES
THIS SECOND AMENDMENT TO THE AGREEMENT FOR INDEPENDENT
AUDIT SERVICES ("Second Amendment"), is made and entered into this
day of , 2014, by and between the City of
Moorpark, a municipal corporation, located in the County of Ventura, state of
California, hereinafter referred to as "CITY" and Rogers, Anderson, Malody &
Scott, a limited liability partnership, hereinafter referred to as "AUDITOR".
WITNESSETH:
WHEREAS, on April 19, 2012, CITY and AUDITOR entered into an
Agreement for professional auditing services for five (5) fiscal years ending June
30, 2012 through fiscal year ending June 30, 2016; and
WHEREAS, on October 13, 2013, the State of California Governor Jerry
Brown approved Senate Bill 341 (SB 341 ), which includes Section 34176.1
requiring each "housing successor shall conduct, and shall provide to its
governing body, an independent financial audit of the Low and Moderate Income
Housing Asset Fund within six months after the end of each fiscal year, which
may be included in the independent financial audit of the host jurisdiction"; and
WHEREAS, SB 341 Section 34176.1 also requires an addendum to the
annual progress report to report progress on implementing the Housing Element;
and
WHEREAS, at the public meeting held on October 1, 2014, the City
Council of the City of Moorpark approved the staff recommendation to enlist the
AUDITOR to perform the independent financial audit and the addendum to the
annual progress report, increased the all-inclusive audit fees by Twenty-Four
Thousand dollars ($24,000) for the additional services; and authorized the City
Manager to execute the Second Amendment; and
WHEREAS, the CITY and the AUDITOR wish to amend the Scope of
Services and Payment provisions of the Agreement.
NOW, THEREFORE, in consideration of mutual covenants, benefits, and
premises herein stated, the parties hereto agree to amend the aforesaid
Agreement as follows:
254
I. Section 2, SCOPE OF SERVICES, is amended by replacing this section in
its entirety as follows:
CITY does hereby retain AUDITOR, as an independent contractor, in a
contractual capacity to perform the following tasks described below for
fiscal years 2011/12, 2012/13, 2013/14, 2014/15, and 2015/16, in
accordance with the prescribed standards in Section 11. B of the RFP,
attached hereto as Exhibit C and incorporated herein by this reference as
though set forth in full:
A. Conduct an annual audit of all funds of the CITY and render an
auditor's report on the basic financial statements, which will include both
Government -wide Financial Statements and Fund Financial Statements;
B. Prepare and word process the CITY's Comprehensive Annual Financial
Report (CAFR) to be in full compliance with all the Governmental
Accounting Standards Board Statements (GASS);
C. Complete a Single Audit Report on federal award programs, if
applicable;
0. Conduct a financial and compliance audit of the Redevelopment
Agency of the City of Moorpark ("Agency ") financial statements for period
ending February 1, 2012;
E. Assist in the preparation and submittal of the CAFR for the GFOA
"Certificate of Achievement for Excellence in Financial Reporting" and for
the CSMFO "Certificate of Award for Outstanding Financial Reporting ";
F. Prepare the State Controller's Cities Financial Transactions Report;
G. Prepare the State Controller's Transit Operators Financial Transactions
Report;
H. Issue the Independent Auditors' Management Letter that identifies
issues not required to be disclosed, but represent the auditors' concerns;
include recommendations for improvements suggestions noted in the audit
as appropriate;
I. The performance of the due diligence review as prescribed by AB 1464
Section 34179.5(c)(1) through 34179.5(c)(3) and Sections 34179.5(c)(5)
through 34179.5(c)(6) to be applied separately to the Low and Moderate
Income Housing Fund of the Successor Agency and to all other funds of
the Successor Agency combined; and to issue the reports by the due
dates established by law; and
Rogers, Anderson, Malady & Scott, LLP Page 2 of 5 255
J. The performance of providing the independent financial audit of the Low
and Moderate Income Housing Asset Fund and the addendum to the
Annual Progress Report as prescribed by SB 341; and to issue the reports
by December 31st each year.
In the event there is a conflict between the provisions of the RFP and this
Agreement, the language contained in this Agreement shall take
precedence.
II. Section 5, PAYMENT, is amended by replacing this section in its entirety
as follows:
Taxpayer ID or Social Security number must be provided, on an IRS 1099
form, before payments may be made to AUDITOR.
The CITY agrees to pay AUDITOR, in accordance with the payment rates
and terms and the schedule of payment as set forth in the Cost Proposal
Form Attachment C of Exhibit B, attached hereto and incorporated herein
by this reference as though set forth in full, based upon actual time spent
on the above tasks. This amount shall not exceed Two Hundred Twelve
Thousand dollars ($212,000.00) for the term of the Agreement. Fiscal
Year (FY) maximum fees to the AUDITOR are as follows:
Rogers, Anderson, Malody & Scott, LLP Page 3 of 5
256
AUDIT YEAR
2011-12 2012-13 2013-14 2014-15 2015-16 Total
Contract
Base Services
1) City Audrt & Related $ 22,000 $ 22,000
Reports
$ 22,000 $ 22,000 $ 23,000 $ 111,000
2) Redevelopment Audrt & $ 4,000 $ 4,000
Related Reports
$ 4,500 $ 4,500 $ 5,000 $ 22,000
3) Single Audrt & Related $ 3,200 $ 3,200 $ 3,400 $ 3,400 $ 3,500 $ 16,700
Reports (if applicable)
Sub-total Base Cost $ 29,200 $ 29,200 $ 29,900 $ 29,900 $ 31,500 $ 149,700
O(!tional Services
4) State Controller's Report-
Crties Financial Transactions $ 2,750 $ 2,750 $ 3,000 $ 3,000 $ 3,200 $ 14,700
Report
5) State Controller's Report-
Transrt Operators Financials $ 700 $ 700 $ 725 $ 725 $ 750 $ 3,600
Transactions Report
6) Successor Agency-Due $ 20,000 $ 20,000
Diligence Reviews
7) Addendum to Annual $ 4,000 $ 4,000 $ 4,000 $ 12,000
Progress Report
8) Housing Successor Fund
Adurted Financial $ 4,000 $ 4,000 $ 4,000 $ 12,000
Statements
Sub-total Optional Costs $ 3,450 $ 23,450 $ 11,725 $ 11,725 $ 11,950 $ 62,300
Annual Maximum Fees $ 32,650 $ 52,650 $ 41,625 $ 41,625 $ 43,450 $ 212,000
AUDITOR shall not be compensated for any services rendered in
connection with the performance of this Agreement, which are in addition
to those set forth herein, unless such additional services are authorized in
advance and in writing by the City Manager. AUDITOR shall be
compensated for any additional services in the amounts and in the
manner as agreed to by City Manager and AUDITOR at the time CITY's
written authorization is given to AUDITOR for the performance of said
services. The City Manager may approve additional work not to exceed
ten percent (10%) of the amount of the Agreement.
AUDITOR shall receive payment within thirty (30) days of receipt of each
invoice as to all non-disputed fees. Any expense or reimbursable cost
appearing on any-invoice shall be accompanied by a receipt. If the CITY
disputes any of AUDITOR's fees or expenses it shall give written notice to
Rogers, Anderson, Malady & Scott, LLP Page 4 of 5
257
AUDITOR within thirty (30) days of receipt of any disputed fees set forth
on the invoice.
Ill. REMAINING PROVISIONS
Except as revised by this Amendment No. 2, all of the provisions of the
Agreement shall remain in full force and effect.
In witness whereof, the parties hereto have executed this Second Amendment on
the date and year first above written.
CITY OF MOORPARK
Steven Kueny
City Manager
Attest
Maureen Benson, City Clerk
Rogers, Anderson, Malody & Scott, LLP
ROGERS, ANDERSON,
MALODY & SCOTT, LLP
Terry Shea
Partner
Page 5 of 5
258
Attachment 3
RESOLUTION NO. 2014---
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
MOORPARK, CALIFORNIA AUTHORIZING USE OF THE
HOUSING-SUCCESSOR AGENCY FUND (2203) TO PAY
FOR AUDITING SERVICES AS STIPULATED IN
GOVERNMENT CODE 34176
WHEREAS, on June 18, 2014 the City Council adopted the Operating and
Capital Improvement Budget for Fiscal Year 2014/15; and
WHEREAS, a staff report has been presented to the City Council summarizing
auditing services as required by Government Code 34176; and
WHEREAS, a budget appropriation increase of $8,000 in the Housing-Successor
Agency Fund (2203) is requested for the payment of the auditing services; and
WHEREAS, Exhibit "A" hereof describes said budget amendment and its
resultant impact to the budget line items.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK
DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. That a Budget Amendment in the aggregate increase of $8,000, as
more particularly described in Exhibit "A", is hereby approved.
SECTION 2. The City Clerk shall certify to the adoption of this resolution and
shall cause a certified resolution to be filed in the book of original resolutions.
PASSED AND ADOPTED this 151 day of October, 2014.
Janice Parvin, Chair
ATTEST:
Maureen Benson, City Clerk
Exhibit A: Budget Appropriation
259
Resolution No. 2014-
Page 2
Budget Amendment for
Housing-Successor Agency Fund
For Additional Auditing Services
FY 2014/15
A. Fund Allocation
Fund Description Account
Housinq-Successor Aqencv Fund 2203-5500
Total
B. Appropriation Allocation
Adopted Budget
Budget Number Budget Change
2203-2201-0000-9102 $0 $ 8,000
Total $0 $ 8,000
Finance Approval: ~ ~,
Exhibit A
Amount
$ 8,000
$ 8,000
Revised
Budget
$ 8,000
$ 8,000
260