Agenda Item No: N.6
AGENDA REPORT
DATE: April 15, 2025
TO: Mayor and Council
FROM: David Gassaway, City Manager
SUBJECT: Resolution 2025-59 FN Independent Annual Audit Services
Authorizing Execution of a Professional Services Agreement Between the City of Fairfield and The Pun Group, LLP for Independent Annual Audit Services
Funding Source: $684,250; General Fund
Contact: Myles Dixon, (707) 428-7567
RECOMMENDED ACTION
Adopt resolution.
STATEMENT OF ISSUE
The City Council is requested to approve a Professional Services Agreement for the independent annual audit of the City of Fairfield for the fiscal years ending June 30, 2025, 2026, 2027, 2028, and 2029. The cost of the audit will be funded by the General Fund, with a proportional allocation to the City’s major funds and related agencies.
DISCUSSION
Eide Bailly LLP (EB) has served as the City's independent auditor for the past seven years. While there have been no disagreements regarding the City's audits, it is considered best practice to periodically review the market and, when appropriate, rotate audit firms.
To ensure a competitive selection process, the Finance Department issued a Request for Proposal (RFP) for auditing services in December 2024, dist ributing it to nine independent CPA firms in Northern California. The City received six responses, and after a thorough evaluation, three firms were selected for interviews. Each firm met mandatory criteria, including licensure in California and the absence of conflicts of interest.
The evaluation process focused on key factors such as:
Experience in governmental auditing
Qualifications of personnel assigned to the engagement Adequacy of the proposed staffing plan
Approach to auditing and financial statement review
Cost of Engagement
References from other municipal clients
Following an extensive review, including interviews, cost analysis, and reference checks, The Pun Group LLP is recommended as the City's independent auditor for fiscal years 2025 through 2029.
The Pun Group currently serves 51 other cities, including Napa and Pleasanton. Additionally, they will provide free staff training on accounting updates, which will assis t in the implementation of new governmental accounting standards.
The Audit Committee reviewed the evaluation process and findings and has accepted the staff's recommendation to engage The Pun Group LLP for auditing services.
FINANCIAL IMPACT
The following outlines the audit fees in the recommended Professional Service Agreement, with a 10% contingency due to additional Single Audit programs that may need to be selected.
Fiscal year Ending Annual Cost 10% Contingency Not-to-Exceed June 30, 2025 $116,000 $11,600 $127,600 June 30, 2026 $120,060 $12,006 $132,066 June 30, 2027 $124,262 $12,426 $136,688 June 30, 2028 $128,611 $12,861 $141,472 June 30, 2029 $133,113 $13,311 $146,424 Total $622,046 $62,204 $684,250 The total amount for audit services for the fiscal years ended June 30, 2025 , through June 30, 2029, would be $622,046, with the 10% annual contingency of $62,204, for a total not-to-exceed amount of $684,250. The fees would be paid by the General Fund, with a proportional allocation to the city’s major funds and related agencies.
ALTERNATIVE ACTION
The council may choose to s elect an alternative firm to perform independent audit services for the City. This is not recommended, since staff completed a lengthy RFP process to arrive at the selected consultant.
COORDINATED WITH
N/A
STAFF CONTACT
John Furtado, Director of Finance
(707) 428-7629
[email protected]
ATTACHMENTS
Attachment 2: Proposed Resolution
Attachment 3: Proposed Agreement