Item 12
VALLEY CLEAN ENERGY ALLIANCE
Staff Report – Item 12
TO: Board of Directors
FROM: Edward Burnham, Director of Finance & Internal Operations Mitch Sears, Executive Officer
SUBJECT: Approval of the Auditing Services Vendor and Contract with James Marta & Company LLP.
DATE: October 13, 2022
RECOMMENDATION
Adopt a resolution:
1. Approving the agreement with James Marta & Company LLP. for independent audit services;
2. Authorizing the Executive Officer in consultation with legal counsel to finalize and execute the agreement for independent auditing services.
BACKGROUND AND ANALYSIS
VCE conducts an annual financial audit as part of its risk management procedures and to meet statutory requirements. Staff recently released a Request for Proposal (RFP) for audit services for VCE’s next auditing cycle; the RFP closed on August 26, 2022.
The previous auditing cycle included the following periods:
a) Inception (January 1, 2017) through June 30, 2018;
b) Fiscal year ending June 30, 2019;
c) Fiscal year ending June 30, 2020; and,
d) Option to extend to Fiscal years ending June 30, 2021 and June 30, 2022.
The RFP was sent to Certified Public Accounting firms known to provide special district audits and additional firms from the region that were known to have experience in either electric utilities or with CCAs. There were 4 responsive firms. The 4 responsive proposers were evaluated and found qualified to move forward in the RFP process. VCE invited all firms for interviews and final consideration. Based on its review of the proposals and interviews with the firms, the review panel ultimately decided to move forward with the proposal from James Marta & Company LLP (JMC) based on its overall balance of experience with CCA’s, experience/capabilities of its team, and value.
Item 12
General Requirements
The proposals met VCE’s general requirements set forth in the RFQ. The scope of services includes the following:
1) Perform an audit and provide a report on the general-purpose financial statements of VCEA under general accepted auditing standards.
2) The following are the expected reporting requirements resulting from the annual audit of the general-purpose financial statements of VCE:
a) Report of Independent Auditors
b) Report in accordance with Government Auditing Standards c) Discussion and presentation of the audit with VCEA Board of Directors d) Management Letter (if necessary)
3) The audit report needs to be issued as per current and/or future bank covenants in the River City Bank credit agreement.
Experience
The RFQ requested specific experience in auditing Community Choice Aggregation (CCA) programs, electric utilities or Joint Power Agencies (JPA), as well as auditing clients that follow generally accepted accounting principles prescribed the Governmental Accounting Standards Board.
• JMC has extensive experience in providing audit and consulting services to JPAs and other government agencies.
• JMC partners with Baker Tilly Virchow Krause, LLP on the audit of SMUD and their JPA’s (Co-generation Power plants).
Staff confirmed that SMUD’s accounting staff have had a good experience working with the partner and senior manager of JMC on the SMUD JPA audits. Staff confirms JMC’s qualifications and experiences related to the audits of JPAs as described in their proposal.
Pricing
The pricing of the audit services was reviewed against another CCA that is similar in size to VCE and it was deemed reasonable and competitive.
RECOMMENDATION
Staff recommends the Board adopt a resolution approving the agreement with James Marta & Company LLP. for Independent Audit services for a term beginning December 31, 2022, expiring December 31, 2026, and authorize the Executive Officer in consultation with legal counsel to finalize and execute the agreement.
ATTACHMENTS
1. Agreement between VCE and James Marta & Company LLP
2. Resolution 2022-XXX
James Marta & Company LLP
Certified Public Accountants
Accounting ▪ Audit ▪ Consulting ▪ Tax
701 Howe Avenue, Suite E3, Sacramento, California 95825 Phone: 916-993-9494 Fax: 916-993-9489 email: [email protected] www.jpmcpa.com
October 4, 2022
Valley Clean Energy Alliance
604 2nd Street
Davis, CA 95616
To the Board of Directors of Valley Clean Energy Alliance We are pleased to confirm our understanding of the services we are to provide for Valley Clean Energy Alliance related to annual audits for the calendar years ending 2022, 2023, 2024 and optional extension for 2025 and 2026.
This letter confirms the services you have asked our firm to perform and the terms under which we have agreed to do that work. Please read this letter carefully because it is important to both our firm and you that you understand what you can and cannot expect from our work. In other words, we want you to know the limitations of the services you have asked us to perform. If you are confused at all by this letter or believe we have misunderstood what you need, please call to discuss this letter before you sign it.
1. OBJECTIVE AND SCOPE OF THE AUDIT
You have requested that we audit the Financial Statement of Valley Clean Energy Alliance, and the related Statements of Revenues, Statement of Net Position, Expenditures, Changes in Net Position, and Cash Flows for the years then ended and the related notes to the financial statements, which collectively comprise Valley Clean Energy Alliance’s basic financial statements and provide assistance with the preparation of the financial statements.
The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatements whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the United States of America (GAAS) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users made on the basis of these financial statements.
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, Schedule of the District’s Proportionate Share of the Net Pension Liability, and the Schedule of Pension Contributions be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by Governmental Engagement Letter Page 2
Accounting Standards Board (GASB) who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. As part of our engagement, we will apply certain limited procedures to the required supplementary information (RSI) in accordance with auditing standards generally accepted in the United States of America. These limited procedures will consist primarily of inquiries of management regarding their methods of measurement and presentation, and comparing the information for consistency with management’s responses to our inquiries. We will not express an opinion or provide any form of assurance on the RSI.
The following RSI is required by accounting principles generally accepted in the United States of America. This RSI will be subjected to certain limited procedures but will not be audited:
• Management’s Discussion and Analysis
We are not aware of any supplementary information other than RSI that will accompany Valley Clean Energy Alliance’s basic financial statements.
2. THE RESPONSIBILITIES OF THE AUDITOR
We will conduct our audit in accordance with applicable auditing standards generally accepted in the United States of America (U.S. GAAS). Applicable standards include:
• The AICPA Audit Guide, Audits of State and Local Government Units, generally accepted auditing standards;
• The California State Controller’s Minimum Audit Requirements and Reporting Guidelines for California Special Districts; and
• The United States General Accounting Office (GAO) Government Auditing Standards, Office of Management and Budget (OMB), Audits of States, Local Governments and Nonprofit Organizations.
As part of an audit in accordance with GAAS, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risk of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. However, we will communicate to you in writing concerning any significant deficiencies or material weaknesses in internal control relevant to the audit of the financial statements that we have identified during the audit.
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• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Conclude, based on the audit evidence obtained, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Valley Clean Energy Alliance’s ability to continue as a going concern for a reasonable period of time.
Because of the inherent limitations of an audit, together with the inherent limitations of internal control, an unavoidable risk exists that some material misstatements (whether caused by errors, fraudulent financial reporting, misappropriation of assets, or violations of laws or governmental regulations) may not be detected by our firm, even though our audit is properly planned and performed in accordance with GAAS, Government Auditing Standards, promulgated by the United States Comptroller General; and the Uniform Guidance (2 CFR Section 200), Audits of States, Local Government, and Nonprofit Organization.
3. CHARACTER AND LIMITATIONS OF AN AUDIT
The purpose of an audit is to express an opinion as to whether your financial statements are fairly presented, in all material respects in conformity with United States generally accepted accounting principles, and is limited to the period covered by our audit. We cannot provide assurance that an unmodified opinion will be expressed. Circumstances may arise in which it is necessary to modify our opinion, add an emphasis-of-matter or other-matter paragraph(s), or withdraw from the engagement. In the event we must withdraw from the engagement, our fees will be limited to the fees incurred up to the point of withdrawal.
We will also issue a written report on internal control, a report to those charged with governance and a management comment letter (if applicable).
At the conclusion of our audit engagement, we will communicate to those charged with governance the following significant findings from the audit:
• Our view about the qualitative aspects of the entity’s significant accounting practices; • Significant difficulties, if any, encountered during the audit; • Uncorrected misstatements, other than those we believe are trivial, if any; • Disagreements with management, if any;
• Other findings or issues, if any, arising from the audit that are, in our professional judgment, significant and relevant to those charged with governance regarding their oversight of the financial reporting process;
• Material, corrected misstatements that were brought to the attention of management as a result of our audit procedures;
• Representations we requested from management;
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• Management’s consultations with other accountants, if any; and • Significant issues, if any, arising from the audit that were discussed, or the subject of correspondence, with management.
Our audit will be conducted in accordance with generally accepted auditing standards. Those standards require that we initially assess the risk that errors, fraud, irregularities, and illegal acts may cause the financial statements to contain a material misstatement. This is necessary because we do not audit all the transactions and balances in the financial statements, only a selected portion of them, in some cases a very small portion. The costs for us to examine a large portion of them, or all of them of a certain category, or all of them in all categories, would be prohibitive. Consequently, there are risks.
In making this initial assessment, we are required to obtain an understanding of the entity and its environment, including its internal control, sufficient to assess the risks of material misstatement of financial statements and to design appropriate audit procedures. Those considerations mandate your complete cooperation and honesty about your knowledge and understanding of the possibility of the existence of errors, fraud, irregularities and illegal acts. By signing this letter, you agree that you will provide this cooperation and that you will be totally honest with us.
Based on that assessment, the standards require us to design the audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement, whether caused by errors, fraud, irregularities and illegal acts. Accordingly, a material misstatement may remain undetected. While we are required to exercise due care and professional skepticism, since our opinion is based on the concept of reasonable assurance, we are not an insurer and our report does not constitute a guarantee. We will inform you of all matters of fraud that come to our attention. We will also inform you of illegal acts that come to our attention, unless they are clearly inconsequential. We will inform you of any need to extend our procedures because of them and our estimate of their additional cost.
The discovery, subsequent to the date of the auditor’s report, that one or more errors, frauds, irregularities, or illegal acts causing the financial statements to contain one or more material misstatements, have occurred does not necessarily mean that our audit was not conducted in accordance with generally accepted auditing standards.
An audit includes obtaining an understanding of internal control sufficient to plan the audit, but is not designed to provide assurance on internal control or to identify significant deficiencies conditions.
However, during the audit, if we become aware of such reportable conditions or ways that we believe management practices can be improved, we will communicate them to you in a separate letter.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include direct confirmation of certain assets, revenues and expenses by correspondence with selected individuals, legal counsel, creditors, and financial institutions.
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In the event that the financial information provided is incomplete or inaccurate, then we will either complete the work at our standard rate, or delay the audit until this information is complete and accurate.
At the conclusion of our audit, we will require you to furnish us a management representation letter confirming, among others, your responsibility for your financial statements and for the design and implementation of program and controls to prevent and detect fraud. This letter is a required audit procedure prior to issuing our report. By signing this engagement letter and furnishing a management representation letter, you agree to indemnify us and hold us harmless for any liability and costs arising from knowing misrepresentations by management.
In accordance with auditing standards generally accepted in the United States of America, we will also issue a written report describing the scope of our testing over internal control over financial reporting, including the results of that testing. However, providing an opinion on internal control and compliance will not be an objective of the audit and, therefore, no such opinion will be expressed.
4. COMPLIANCE WITH LAWS AND REGULATIONS
As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of Valley Clean Energy Alliance’s compliance with the provisions of applicable laws, regulations, contracts, and agreements. However, the objective of our audit will not be to provide an opinion on overall compliance and we will not express such an opinion.
5. MANAGEMENT RESPONSIBILITIES
At the outset, it is imperative that we state the scope of your responsibilities in connection with this engagement:
a. The financial statements are the responsibility of Valley Clean Energy Alliance’s management. As such, management is responsible for adjusting the financial statements to correct material misstatements and for confirming to us in the representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole.
b. Encompassed in that responsibility is the establishment and maintenance of effective internal control over financial reporting, the establishment and maintenance of proper accounting records, and the selection of appropriate accounting principles. c. Management is responsible for the design and implementation of programs and controls to prevent or detect fraud, and for informing us about all known or suspected fraud affecting the organization involving (a) management, (b) individuals who have significant roles in internal control, and (c) others where the fraud could have a material effect on the financial statements. d. Management is also responsible for informing us of its knowledge of any allegations of fraud or suspected fraud affecting the organization received in communications from members, regulators, Engagement Letter Page 6
or others. In addition, management is responsible for identifying and ensuring that the entity complies with applicable laws and regulations.
e. In accordance with the terms and conditions of this agreement, Valley Clean Energy Alliance Management is responsible for:
i. Identification of the applicable reporting framework; ii. Preparation and fair presentation of financial statements in accordance with accounting principles generally accepted in the United States of America; and iii. Design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
iv. Having appropriate programs and controls in place to prevent and detect fraud, and for informing us about all known or suspected fraud affecting the company that involves management, employees who have significant roles in internal control, and others where fraud could have a material impact on the financial statements. You are also responsible for informing us of your knowledge of any allegations of fraud or suspected fraud affecting the company received in communications from employees, former employees, regulators, or others. In addition, you are responsible for identifying and ensuring that the company complies with the applicable laws and regulations. v. Accuracy and completeness of all data, information and representations provided to us for the purposes of this engagement. Because of the importance of oral and written management representations to the effective performance of our services, Valley Clean Energy Alliance releases and indemnifies our firm and its personnel from any and all claims, liabilities, costs and expenses attributable to any misrepresentation by management and its representatives.
f. Management is responsible to provide us with
i. Access to all information of which management is aware that is relevant to the preparation and fair presentation of the financial statements, such as records, documentation, and other matters;
ii. Additional information that we may request from management for the purpose of the audit; and
iii. Unrestricted access to persons within the entity from whom we determine it necessary to obtain audit evidence.
As part of our audit process, we will request from management and, when appropriate, those charged with governance, written confirmation concerning representations made to us in connection with the audit.
We will assist in the preparation of your financial statements, but the responsibility for the financial statements remains with you. You are responsible for adjusting the financial statements to correct material misstatements and for confirming to us in the management representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest Engagement Letter Page 7
period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole.
As part of our engagement, we may propose standard, adjusting, or correcting journal entries to your financial statements. You are responsible for reviewing the entries and understanding the nature of any proposed entries and the impact they have on your financial statements. Further, you are responsible for designating a qualified management-level individual to be responsible and accountable for overseeing these activities.
6. INDEPENDENT CONTRACTOR STATUS
James Marta & Company LLP shall perform the required services as an independent contractor and not as an “officer, employee, or agent” of Valley Clean Energy Alliance. Although Valley Clean Energy Alliance reserves the right to evaluate the quality of the service provided by James Marta & Company LLP, Valley Clean Energy Alliance will not control the means or manner of James Marta & Company LLP’s performance.
7. REPORTING
We will issue a written reports upon completion of our audit of Valley Clean Energy Alliance’s basic financial statements. Our reports will be addressed to the Board of Directors of Valley Clean Energy Alliance. Circumstances may arise in which our report may differ from its expected form and content based on the results of our audit. Depending on the nature of these circumstances is may be necessary for us to modify our opinion, add an emphasis-of-matter paragraph or other-matter paragraph to our auditor’s report, or if necessary, withdraw from the engagement.
8. OTHER STIPULATIONS
We understand that your employees will prepare all confirmations we request and will locate any documents or invoices selected by us for testing or review.
If you intend to publish or otherwise reproduce the financial statements and make reference to our firm, you agree to provide us with printers’ proofs or masters for our review and approval before printing. You also agree to provide us with a copy of the final reproduced material for our approval before it is distributed.
9. PROVISIONS OF ENGAGEMENT ADMINISTRATION, TIMING AND FEES During the course of the engagement, we may communicate with you or your personnel via fax or e-mail, and you should be aware that communication in those mediums contains a risk of misdirected or intercepted communications.
We expect to begin our audit in January and to complete and issue our report no later than April 15 following the year end. In order to ensure the timely completion of the audit, we expect the following Engagement Letter Page 8
deliverables be provided to James Marta & Company by Valley Clean Energy Alliance’ management according to the following schedule:
• Trial balance by February 5 following each year end.
• Items requested from management and staff for audit review by February 20 for each year. • Draft of the financial statements, with Management Discussion and Analysis by March 30 following each year end.
• Issuance of Audit Report by April 30 following each year end.
James Marta, CPA, CGMA, ARPM is the Engagement Partner for the audit services specified in this letter. His responsibilities include supervising James Marta & Company LLP’s services performed as part of this engagement and signing or authorizing another qualified firm representative to sign the audit report.
10. RECORD RETENTION
It is our policy to keep records related to this engagement for seven (7) years. However, James Marta & Company LLP does not keep any original Valley Clean Energy Alliance records, so we will return those to you at the completion of the services rendered under this engagement. When records are returned to you, it is your responsibility to retain and protect your records for possible future use, including potential examination by any government or regulatory agencies.
By your signature below, you acknowledge and agree that upon the expiration of the 7-year period, James Marta & Company LLP shall be free to destroy our records related to this engagement.
11. INSURANCE
During the term of this Contract, James Marta & Company LLP shall maintain in force insurance coverage as follows:
a. Commercial General Liability insurance applicable to the services provided to Valley Clean Energy Alliance, with a combined single limit, or the equivalent, of not less than $2,000,000 per claim ($4,000,000 aggregate) for Bodily Injury, Personal Injury, and Property Damage, including contractual liability coverage applicable to the indemnity provided under this contract. a. Workers’ Compensation insurance: Up to 1,000,000 per claim. b. Business Automobile Coverage insurance applicable to the operation of James Marta & Company LLP’s trucks or automobiles with a combined single limit of not less than $2,000,000 per claim for Bodily Injury and Property Damage, including coverage for owned, non-owned, and hired vehicles, as applicable.
c. Professional Liability insurance: Up to $1,000,000 per claim and $2,000,000 aggregate.
Notice of Cancellation or Change. There shall be no cancellation, material change, reduction of limits without 30 days prior written notice from James Marta & Company LLP or its insurer(s) to Valley Clean Energy Alliance.
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Certificates of Insurance. As evidence of the insurance coverages required by this contract, James Marta & Company LLP shall provide acceptable insurance certificates to Valley Clean Energy Alliance as soon as practicable upon written request by Valley Clean Energy Alliance. If requested, complete copies of insurance policies, shall be provided to Valley Clean Energy Alliance.
12. ASSUMPTIONS
The fees quoted are based upon several assumptions about the adequacy of the accounting records, the degree of assistance to be provided by your personnel, and current audit and accounting standards.
This fee is based upon the assumption that the closing journal entries will be made and accounting will be finalized and closed before the year end audit fieldwork. If compliance requirements change, or if Valley Clean Energy Alliance is involved in issuing an exempt offering, additional fees and an amended engagement letter may be required. Additional time and billing charges will be charged at our standard hourly rates and costs in the event of the following:
• Account reconciliations are not completed for, (example but not limited to):
• Cash Accounts
• Accounts Receivable and Allowance for Doubtful Accounts • Inventory
• Investments
• Prepaid Expenses
• Capital Assets and Depreciation
• Accounts Payable
• Accrued Expenses
• Unearned Revenue
• Deposits
• Long-Term Liabilities
• Compensated Absences
• Prior year equity not in agreement with prior year audit • Accounting system or account group changes from prior year • Allocation of expenses not completed
• Allocation of investments not completed
• Allocation of income not completed
• Changes in accounts after beginning of audit work that necessitates additional or redo of audit work.
• Changes or revision of the initial trial balance
• Addition of new activities:
• New funding sources
• New funds
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• New debt
Whenever possible, we will attempt to use your personnel to assist in the preparation of schedules and analyses of accounts. We understand that your employees will prepare all cash or other confirmations we request and will locate any invoices selected by us for testing. This effort could substantially reduce our time requirements and facilitate the timely conclusion of the audit.
Our initial fee estimate assumes we will receive the aforementioned assistance from your personnel and unexpected circumstances will not be encountered. In the event that the GASB, FASB, AICPA, GAO, OMB, or the State of California issues additional standards or audit procedures that require additional work during the audit period, we will discuss these requirements with you before proceeding further.
Before starting the additional work, we will prepare an estimate of the time necessary, as well as the fee for performing the additional work. Our fee for addressing the additional requirements will be at our standard hourly rates for each person involved in the additional work.
In the event we are required to respond to discovery requests, subpoenas, and outside inquiries, we will first obtain your permission unless otherwise required to comply under the law. Our time and expense to comply with such requests will be charged at our standard hour rates in addition to the stated contract.
At the conclusion of our audit engagement, we will communicate to the governing board the following significant findings from the audit:
• Our view about the qualitative aspects of the entity’s significant accounting practices; • Significant difficulties, if any, encountered during the audit; • Uncorrected misstatements, other than those we believe are trivial, if any; • Disagreements with management, if any;
• Other findings or issues, if any, arising from the audit that are, in our professional judgment, significant and relevant to those charged with governance regarding their oversight of the financial reporting process;
• Material, corrected misstatements that were brought to the attention of management as a result of our audit procedures;
• Representations we requested from management;
• Management’s consultations with other accountants, if any; and • Significant issues, if any, arising from the audit that were discussed, or the subject of correspondence, with management.
The audit documentation for this engagement is the property of James Marta & Company LLP and constitutes confidential information. However, we may be requested to make certain audit documentation available pursuant to authority given to any regulator by law or regulation, or to peer reviewers. If requested, access to such audit documentation will be provided under the supervision of James Marta & Company LLP’s personnel. Furthermore, upon request, we may provide copies of selected audit documentation to any regulator. They may intend, or decide, to distribute the copies of information contained therein to others, including other governmental agencies.
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13. REPORTS
We will provide you with up to 15 copies of the report. If you intend to publish or otherwise reproduce the financial statements and make reference to our firm, you agree to provide us with printers’ proofs or masters for our review and approval before printing. You also agree to provide us with a copy of the final reproduced material for our approval before it is distributed.
The intended users of the report are the board of directors of Valley Clean Energy Alliance. You agree to be responsible to distribute the reports to those charged with governance and to the appropriate officials of the responsible party.
Reports included in this engagement include:
• Independent Auditor’s Report, Financial Statements and associated notes; • Management Letter including notification of reportable conditions (if necessary); • Present Audit results to the Audit Committee or to the Board of Directors; • Report on Internal Control and Compliance and Other Matters.
14. WORKING PAPERS
The audit documentation for this engagement is the property of James Marta & Company LLP and constitutes confidential information. However, we may be requested to make certain audit documentation available pursuant to authority given to any regulator by law or regulation, or to peer reviewers. If requested, access to such audit documentation will be provided under the supervision of James Marta & Company LLP’s personnel. Furthermore, upon request, we may provide copies of selected audit documentation to any regulator. They may intend, or decide, to distribute the copies of information contained therein to others, including other governmental agencies.
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15. FEES
Our fees for the audit will be:
• $38,960 for the audit for the year ended December 31, 2022 • $40,320 for the audit for the year ended December 31, 2023 • $41,730 for the audit for the year ended December 31, 2024 • $43,190 for the audit for the year ended December 31, 2025 * • $44,700 for the audit for the year ended December 31, 2026 * *Optional extension
We will submit monthly progress billings for our services during the project. Invoices are payable upon presentation. Unpaid fee balances 30 days overdue will bear interest at 18 percent per annum. Payment by Credit Card is subject to a 5% processing fee.
16. INDEMNIFICATION
Pursuant to the contract with James Marta & Company LLP, Consultant’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the Consultant’s proportionate percentage of fault.
17. TERMINATION
• Either Party may terminate this contract in whole or in part, with 30 days written notice to the other Party.
• In the event of contract termination, Valley Clean Energy Alliance agrees to pay James Marta & Company LLP the fees and expenses incurred prior to such termination. • Valley Clean Energy Alliance may terminate this contract upon notice to James Marta & Company LLP, or at such later date as Valley Clean Energy Alliance may establish in such notice, if James Marta & Company LLP commits any material breach or default of any covenant, warranty, obligation or agreement under this contract, or fails to perform in a timely manner the services under this contract, and such breach, default, or failure is not cured within 10 business days after delivery of Valley Clean Energy Alliance’s notice, or such longer period as Valley Clean Energy Alliance may specify in such notice.
• James Marta & Company LLP may terminate this contract upon 10 days’ written notice to Valley Clean Energy Alliance if Valley Clean Energy Alliance fails to pay James Marta & Company LLP pursuant to the terms of this contract and Valley Clean Energy Alliance fails to cure within 30 days after receipt of James Marta & Company LLP written notice, or such longer period as James Marta & Company LLP may specify in such notice.
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18. MEDIATION PROVISION
Disputes arising under this agreement (including scope, nature, and quality of services to be performed by us, our fees and other terms of the engagement) shall be submitted to mediation. A competent and impartial third party, acceptable to both parties shall be appointed to mediate, and each disputing party shall pay an equal percentage of the mediator’s fees and expenses. No suit or arbitration proceedings shall be commenced under this agreement until at least 60 days after the mediator’s first meeting with the involved parties. If the dispute requires litigation, the court shall be authorized to impose all defense costs against any non-prevailing party found not to have participated in the mediation process in good faith.
19. ENGAGEMENT EXECUTION
We appreciate the opportunity to be of service to you and believe this letter accurately summarizes the significant terms of our Engagement. Several technical accounting and auditing words and phrases have been used herein. We presume you to understand their meaning or that you will notify us otherwise so that we can furnish appropriate explanations. If you have any questions, please let us know.
Please sign and return the attached copy of this letter to indicate your acknowledgement of, and agreement with, the arrangements for our audit of the financial statements including our respective responsibilities. This letter will continue in effect until canceled by either party.
Respectfully,
James Marta & Company LLP
Certified Public Accountants
Sacramento, California
20. RESPONSE
This letter correctly sets forth our understanding.
Acknowledged and agreed on behalf of Valley Clean Energy Alliance.
Authorized Signature: _______________________________________________ Name: ___________________________________________________________ Title: ____________________________________________________________ Date: ____________________________________________________________ Item 12
VALLEY CLEAN ENERGY ALLIANCE
RESOLUTION NO. 2022- _______
A RESOLUTION OF THE BOARD OF DIRECTORS OF VALLEY CLEAN ENERGY ALLIANCE
APPROVING A FINANCIAL AUDITING SERVICES AGREEMENT WITH JAMES MARTA AND
COMPANY LLP AND AUTHORIZING THE EXECUTIVE OFFICER IN CONSULTATION WITH
LEGAL COUNSEL TO FINALIZE AND EXECUTE THE AGREEMENT
WHEREAS, the Valley Clean Energy Alliance (“VCE”) was formed as a community choice aggregation agency (“CCA”) on November 16, 2016, under the Joint Exercise of Power Act, California Government Code sections 6500 et seq., among the County of Yolo, and the Cities of Davis and Woodland, to reduce greenhouse gas emissions, provide electricity, carry out programs to reduce energy consumption, develop local jobs in renewable energy, and promote energy security and rate stability in all of the member jurisdictions. The City of Winters, located in Yolo County, was added as a member of VCE and a party to the JPA in December of 2019; and, WHEREAS, VCE solicited competitive bids for qualified independent certified public accountants to provide auditing services; and,
WHEREAS, VCE received four proposals that staff reviewed and evaluated the qualifications, experience and pricing of the firm; and,
WHEREAS, VCE has selected James Marta & Company, LLC to audit the general-purpose financial statements, issue the Report of Independent Auditors, prepare other associated reports, and provide other audit services as requested.
NOW, THEREFORE, the Board of Directors of Valley Clean Energy Alliance resolves as follows:
1. James Marta & Company, LLC is hereby approved as the Independent Auditor for VCE as specified in the agreement between James Marta & Company, LLC and VCE.
2. The Board of Directors hereby authorizes the Executive Officer, in consultation with legal counsel, to finalize and execute the agreement between James Marta & Company, LLC and VCE.
PASSED, APPROVED AND ADOPTED, at a regular meeting of the Valley Clean Energy Alliance, held on the ___ day of _________________ 2022, BY the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
_____________________________________
Jesse Loren, VCE Chair
__________________________________
Alisa M. Lembke, VCE Board Secretary