DATE: April 6, 2026
TO: Mayor and Members of the City Council President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
VIA: Stefan Chatwin, City/District Manager
FROM: Nate Cruz, Finance Director
Waqas Hassan, Assistant Finance Director
DEPARTMENT: Finance
SUBJECT: TWO-YEAR EXTENSION WITH BADAWI & ASSOCIATES FOR
INDEPENDENT AUDIT SERVICES FOR FISCAL YEAR (FY)
2025-26 AND FY 2026-27 FINANCIAL STATEMENT AUDITS AND
ASSOCIATED SERVICES FOR A TOTAL OF $52,930 PER YEAR
RECOMMENDATION
It is recommended that the City Council/EMID Board of Directors adopt the attached resolutions approving the extension to the agreement for professional services for independent audit services with Badawi & Associates (Auditor) for fiscal year (FY) 2025- 26 and FY 2026-27 financial statement audits and associated services for a total of $52,930 per year, including optional services, if required.
EXECUTIVE SUMMARY
On April 3, 2023 the City Council/EMID Board of Directors awarded a contract for audit services to Badawi & Associates for fiscal years 2022-23, 2023-24, and 2024-25; with an option to extend the services for fiscal years 2025-26 and 2026-27. Since that award, Auditor has provided high quality work, and the City continues to win the Government Finance Officers Association (GFOA) Excellence in Financial Reporting Award.
Therefore, based on the reasonable price paid for said services, staff satisfaction, and for the continuity of professional services, staff recommends that the existing agreement be extended for an additional two years for FY 2025-26 and FY 2026-27 audits.
BACKGROUND/ANALYSIS
The City/District is required to have its Annual Comprehensive Financial Report (ACFR) audited annually. The City/District is also required to have an independent auditor verify the City’s compliance with Measure A and Measure W sales tax funds as well as the accuracy of the GAAN Appropriations limit on an annual basis. In addition, the City has the option to have the independent auditor perform a directed study on financial related matters as approved by the City Council.
In the spring of 2023, subsequent to a competitive bidding process where five proposals were received and ranked, the City Council adopted a resolution approving the appointment of Badawi & Associates to be the independent auditors of the City/District for the three fiscal years ending June 30, 2023, 2024 and 2025, with an option of two additional fiscal years ending June 30, 2026 and 2027.
The annual cost of the Auditors’ audit services under the original contract and the proposed extension are shown in the table below.
Original Contract Proposed Extension
Fiscal Year 2022-23 2023-24 2024-25 2025-26 2026-27
Annual Cost $49,890 $51,425 $52,930 $52,930 $52,930
City staff have been satisfied with the Auditors’ services and recommends that the agreement with Badawi & Associates be extended for an additional two-years term.
CALIFORNIA ENVIRONMENTAL QUALITY ACT
Not Applicable
FISCAL IMPACT
The cost of proposed contract extension is $52,930 per year for FY 2025-26 and FY 2026-27, including optional services (such as reports needed for the State Controller, Single Audit, or as needed studies, if required). These costs were assumed in the current FY 2025-26 budget and will be incorporated in the proposed FY 2026-27 and FY 2027-28 budget.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Staff Empowerment and Operational Excellence
ATTACHMENTS:
Attachment 1 – City Resolution
Attachment 2 – EMID Resolution
Attachment 3 – Agreement for Contract Extension
Attachment 4 – Original Agreement with Badawi & Associates, April 3, 2023