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CITY OF GLENDALE, CALIFORNIA
REPORT TO THE CITY COUNCIL
AGENDA ITEM
Report: Authorize Professional Services Agreement (PSA) with Eide Bailly LLP to be the City’s External Auditor for fiscal years ending 2025-26 to 2030-31
1. Motion to Authorize the City Manager, or his designee, to enter into and execute a Professional Services Agreement (PSA) with Eide Bailly LLP to be the City’s external auditor to perform the annual audit of the financial records of the City for fiscal years ending 2025-26 through 2027-28, with the option to extend the agreement for three additional fiscal years.
COUNCIL ACTION
Item Type: Consent Calendar
Approved for December 9, 2025 calendar
EXECUTIVE SUMMARY
Pursuant to Article VI, Section 16 of the Charter, the City is required to engage a certified public accounting firm to perform an annual audit of the financial records and render a report to the City Council. The California Government Code 12410.6 states that the lead audit partner of a public accounting firm shall not be employed by a local agency for more than six consecutive fiscal years. Anticipating the FY 2024-25 would be the last of the six-year period with the current lead audit partner, a request for proposal (RFP) was issued in May 2025, and after several months’ evaluation among Finance staff, the City’s Principal Internal Auditor and the Chairperson of the City’s Audit Committee, the recommendation of selecting Eide Bailly LLP to be the City’s next external audit firm was presented at the Audit Committee meeting on October 30, 2025.
The Audit Committee approved the staff’s recommendation at the meeting. 4c2
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RECOMMENDATION
It is requested that the City Council to authorize the City Manager, or his designee, to enter into and execute a Professional Services Agreement (PSA) with Eide Bailly LLP to be the City’s external auditor to perform the annual audit of the financial records of the City for fiscal years ending 2025-26 through 2027-28, with the option to extend the agreement for three additional fiscal years. The fees for fiscal year 2025-26 are $128,250, for fiscal year 2026-27 are $113,250, for fiscal year 2027-28 are $119,250, for fiscal year 2028-29 are $132,515, for fiscal year 2029-30 are $117,825, and for fiscal year 2030-31 are $120,182. With the contingency reserve (5%) of $36,564, the total cost is up to $767,836 for the audits of six fiscal years.
ANALYSIS
Pursuant to Article VI, Section 16 of the Charter, the City is required to engage a certified public accounting firm to perform an annual audit of the financial records and render a report to the City Council. White Nelson Diehl Evans LLP was selected in February 2020 as the City’s independent auditor for three fiscal years, with an option for three additional years. In November 2020, White Nelson Diehl Evans LLP merged with CliftonLarsonAllen LLP (CLA), and CliftonLarsonAllen LLP assumed all the duties, responsibilities, rights and benefits of the Professional Services Agreement from White Nelson Diehl Evans LLP. CliftonLarsonAllen LLP is in the process of completing the City’s audit for the fiscal year ended 2024-25, which was the last year of their agreement.
The Government Code 12410.6 states the lead audit partner of a public accounting firm shall not be employed by a local agency for more than six consecutive fiscal years.
Anticipating the FY 2024-25 would be the last of the six-year period with CLA, Finance department issued an RFP in May 2025. The RFP review process involved key staff from the Finance Department, the City’s Principal Internal Auditor, and the Chairperson of the City’s Audit Committee. After careful review of the qualifications and fee structure of the proposals, the recommendation of selecting Eide Bailly LLP as the City’s next external auditors was presented at the Audit Committee meeting on October 30, 2025.
The Audit Committee approved the staff’s recommendation at the meeting.
If approved by the City Council, Eide Bailly LLP will perform the following audits:
Annual Audits:
Audit of Annual Comprehensive Financial Report (ACFR)
Audit of Single Audit Report,
Audit of Water and Power Financial Report
Audit of Housing Successor Annual Report Regarding the Low and Moderate Income Housing Asset Fund (LMIHAF)
Audit of Real Estate Assessment Center (REAC) Financial Assessment Subsystem (FASS-PH) Annual Report
Review and verification of the City’s GANN limitation calculation 4c3
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Once during the agreement period for FY2027-28 (required once every ten years):
Perform agreed-upon procedures on the application of the requirements of the Federal Transit Administration (FTA) – The National Transit Database (NTD) audit
Up to twice during the agreement period for FY 2025-26 and FY 2028-29 (required once every three years):
Audit of Los Angeles County Flood Control District’s Safe Clean Water Program funds – Measure W audit
RFP Selection Process
Finance staff developed an RFP that was sent to fifteen accounting firms with expertise in auditing municipalities in May 2025 and received five responses in June 2025. The five firms that submitted their proposals are listed below in alphabetical order:
CliftonLarsonAllen LLP
Eide Bailly LLP
LSL LLP
Macias Gini & O’Connell LLP
The Pun Group LLP
The External Auditor Selection Committee (Selection Committee), consisting of the Principal Internal Auditor, Assistant Director of Finance, two Accounting Managers, and two Accounting Supervisors screened the proposals, and selected the three most qualified firms for interviews in August 2025. The three finalists, in alphabetical order, were:
CliftonLarsonAllen LLP
Eide Bailly LLP
Macias Gini & O’Connel LLP
The Audit Committee Chair, Mr. Alex Parajon, and Director of Finance, Mr. Jack Liang, along with the Selection Committee, interviewed the three finalist firms. Interviews were conducted on September 18, 2025. Each auditing firm was allotted one-hour of interview time. The interview structure included a presentation by the firm to provide an overview of capabilities and experiences in auditing municipal government entities.
Following the firm’s presentation, questions requesting information on various aspects of the firm’s operations and capabilities were addressed. Topics included: comparable experiences, quality and continuity of firm’s personnel, review process, value added 4c4
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services, knowledge of current accounting issues including newly issued Governmental Accounting Standard Board (GASB) statements, auditing experience in an Enterprise Resource Planning environment, and approach to documenting an understanding of the City’s internal control structure. At the completion of the three interviews, each firm’s qualifications were discussed, and Eide Bailly LLP was ranked as the top choice.
After the interviews, each firm was given an opportunity to provide additional information or alteration to the original price quote, which were factored into the final determination.
All three firms submitted a revised cost proposal, and Eide Bailly LLP’s revised cost proposal was the lowest one.
Subsequently, the City conducted the reference check for Eide Bailly LLP, and received good feedback. Based on all of the available information, Finances staff, along with Principal Internal Auditor and the Audit Committee Chair decided that Eide Bailly LLP was the best qualified firm to recommend to the Audit Committee. The main deciding factors were the firms’ governmental experience (especially electric utility experience) and the proposed cost.
On October 30, 2025, the recommendation of Eide Bailly LLP was presented to at the Audit Committee meeting, and the Audit Committee accepted the staff’s recommendation.
Cost of the Agreement
With the City’s current external auditing firm, the audit fees for fiscal year ended 2024- 25 were $110,775. Eide Bailly LLP’s proposed audit fee for the next six fiscal years is as follows: NTD and Measure W audits are additional scopes of work included in this RFP.
NTD audit is required every ten years, and Measure W audit is required every three years. To anticipate additional audits resulting from new Measure and grant funding requirements, a contract contingency reserve of $36,564 (5% of the total contract price) is also requested.
FYE 2025-26 $ 113,250
FYE 2025-26 $ 15,000 (Measure W audit)
FYE 2026-27 $ 113,250
FYE 2027-28 $ 113,250
FYE 2027-28 $ 6,000 (NTD audit)
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FYE 2028-29 $ 115,515
FYE 2028-29 $ 17,000 (Measure W audit)
FYE 2029-30 $ 117,825
FYE 2030-31 $ 120,182
Contingency (5%) $ 36,564
Total $ 767,836
Additional Background Information of Eide Bailly LLP
Eide Bailly LLP is a national public accounting firm with a strong California presence that specializes in government auditing, and currently works with more than 1,200 government clients. The firm has served local governments in California for over 70 years, which include cities, counties, transportation agencies, sewer, sanitation & flood agencies and water agencies. The firm has more than 3,500 employees, which include over 300 employees in its government industry group. Eide Bailly LLP is one of the top 20 accounting firms in the nation.
Eide Bailly LLP is involved in the following organizations: Association of Government Accountants, American Institute of Certified Public Accountants (AICPA), Governmental Audit Quality Center, Private Companies Practice Section Technical Committee, Governmental Accounting Standards Advisory Council and National Association of State Auditors, Comptrollers and Treasurers. Based upon active involvement with these important organizations, Eide Bailly will be able to provide the City with updates on new national and state issues affecting municipal finance standards and reporting requirements.
The proposed service team for Glendale consists of individuals who are familiar with municipal accounting and have extensive experience auditing governmental agencies, especially with federal grants, and water & power utility experience. They also made a commitment to retain the same personnel for the City from year to year, except when such personnel leave the firm or when the change is approved by the City. If a staff member is replaced, Eide Bailly LLP is committed to replacing that person with staff of at least equal experience.
STAKEHOLDERS/OUTREACH
N/A
FISCAL IMPACT
The annual audit fees will be budgeted during each year’s budget process. 4c6
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Existing Appropriation (FY2025-26)
Amount Funding Source
$65,140 General Fund
$63,110 Non General Funds
ENVIRONMENTAL REVIEW (CEQA/NEPA)
N/A
CAMPAIGN DISCLOSURE
In accordance with the City Campaign Finance Ordinance No. 5744, none of the members of the board of directors, the chairperson, CEO, COO, CFO, Subcontractors and any person or entity have more than 10% interest in the company proposed for contract in this Agenda Item Report.
ALTERNATIVES TO STAFF RECOMMENDATION
Alternative 1: Do not authorize the Professional Services Agreement (PSA) with Eide Bailly LLP to be the City’s external auditor to perform the annual audit of the financial records of the City for fiscal years ending 2025-26 through 2027-28, with the option to extend the agreement for an additional three fiscal years. Instead, select another firm participated in the RFP as the City’s external auditor starting the audits for fiscal year 2025-26 and on.
Alternative 2: Do not authorize the Professional Services Agreement (PSA) with Eide Bailly LLP to be the City’s external auditor to perform the annual audit of the financial records of the City for fiscal years ending 2025-26 through 2027-28, with the option to extend the agreement for an additional three fiscal years. Instead, request staff to conduct another request for proposal (RFP) and evaluation process to select a different firm to be the City’s external auditor.
Alternative 3: Consider any other alternative not presented by staff.
ADMINISTRATIVE ACTION
Submitted by:
Jack Liang, Director of Finance
Prepared by:
Shu-Jun Li, Assistant Director of Finance
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Approved by:
Roubik R. Golanian, P.E., City Manager
EXHIBITS/ATTACHMENTS
N/A