CITY OF LAGUNA NIGUEL
CITY COUNCIL AGENDA ITEM
To: Honorable Mayor and Council Members
FROM: Eric Hendrickson, Finance Director
DATE: April 19, 2022
SUBJECT: Approval of Amendment No. 1 to the Professional Services Agreement with Davis Farr, LLP for Auditing Services
RECOMMENDATION
Staff recommends that the City Council approve Amendment No. 1 to the Professional Services Agreement with Davis Farr, LLP, subject to the City Attorney making non- substantive changes, to provide auditing services for Fiscal Year ending June 30, 2022 for a total not to exceed amount of $45,229.
BACKGROUND & ANALYSIS
On August 6, 2019, the City Council approved a Professional Services Agreement (PSA) with Davis Farr, LLP, to provide auditing services to the City. Davis Farr is a licensed Certified Public Accounting (CPA) firm that specializes in auditing local governments. The original agreement term included auditing services for fiscal years ending June 30, 2019, June 30, 2020, and June 30, 2021. The agreement also provides for two additional one- year options, encompassing fiscal years ending June 30, 2022 and June 30, 2023.
Amendment No. 1 (Attachment A) is being recommended for approval to exercise the first optional year. This extension is beneficial to the City, as it provides continuity in service providers and locks in the cost of the optional year from the 2019 proposal. The audit services provided by the firm include auditing financial transactions, preparation of the Annual Comprehensive Financial Report, performing the Single Audit, auditing the appropriations limit (Gann Limit), performing three separate Agreed Upon Procedures (AUP's), and filing the City's Financial Transaction Report with the State Controller's Office.
ALTERNATIVES CONSIDERED
The City Council may decide not to approve Amendment No. 1 to the PSA with Davis Farr, LLP, in which case, the City would seek proposals from other firms for the required auditing services. This alternative is not recommended, as the City is required to have a licensed CPA firm provide audited financial statements, the price for the services is reasonable, and Davis Farr, LLP has provided auditing services compliant with City standards and contract terms in the prior years of the Agreement.
FISCAL REVIEW
The cost of this amendment is $45,229. Sufficient funds will be included in the Fiscal Year 2022/2023 budget to pay for this amendment.
LEGAL REVIEW
The City Attorney has reviewed and approved Amendment No. 1 and this staff report as to form.
CONCLUSION
Staff recommends that the City Council approve Amendment No. 1 to the Professional Services Agreement with Davis Farr, LLP, subject to the City Attorney making non- substantive changes, to provide auditing services for Fiscal Year ending June 30, 2022 for a total not to exceed amount of $45,229.
Jamasa Setonsnau Perri 9 Emmis
Tamara S. Letourneau Kevin G. Ennis
City Manager City Attorney
Eric Pendrubson
Eric Hendrickson
Finance Director
Attachment:
A. Amendment No. 1 to the Professional Services Agreement with Davis Farr, LLP
ATTACHMENT A
Amendment No. 1 to the Professional Services Agreement
with Davis Farr, LLP
AMENDMENT NO. 1 TO PROFESSIONAL SERVICES AGREEMENT
THIS AMENDMENT NO. 1 TO THE PROFESSIONAL SERVICES AGREEMENT (this "Amendment No. 1") is entered into as of _ by and between the City of Laguna Niguel, a municipal corporation, hereinafter the "City", and Davis Farr, LLP, a professional auditing firm hereinafter the "Consultant".
RECITALS
1. Original Contract
A. The City is required to have an annual audit performed on the financial statements of the City.
B. The City solicited proposals from nine (9) independent audit firms.
C. The Consultant submitted a proposal to the City to provide the required audit services and demonstrated that it is qualified to render the required services.
D. The City entered into a Professional Services Agreement with the Consultant on August 6, 2019, ("Agreement") to provide professional audit services for each fiscal year ending June 30, 2019, June 30, 2020, and June 30, 2021.
Further, this Agreement may be extended to cover fiscal years ending June 30, 2022 and June 30, 2023 upon approval by the City Council and a satisfactory negotiation of terms, including price, acceptable to both the City and Consultant.
2. Amendment No. 1
A. The City now desires to enter into this Amendment No. 1 to the Agreement with the Consultant to extend the term of the Agreement to cover the fiscal year ending June 30, 2022, in an amount not to exceed Forty-Five Thousand Two Hundred Twenty-Nine Dollars ($45,229).
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises and covenants herein contained, the parties hereto agree as follows:
1. Services to be Performed by Consultant. Consultant shall perform the professional auditing services for the City and to prepare and deliver the work products to the City as described in the Original Agreement dated August 6, 2019, and in the City of Laguna Niguel Request for Proposal for Professional Auditing Services and the Technical Proposal submitted by the Consultant and dated July 12, 2019, for the fiscal year ending June 30, 2022.
2. Term. This Amendment No. 1 shall become effective on the date stated above and will continue in effect until the work required by this Amendment No. 1 is completed, which include providing audit services for the fiscal year ending June 30, 2022.
3. Payment for Services. City agrees to pay Consultant for providing the professional audit services an amount not to exceed Forty-Five Thousand Two Hundred Twenty-Nine Dollars ($45,229.00). Consultant shall invoice City monthly on a time and materials basis. City shall pay all proper invoices within thirty (30) days of receipt. Should City wish to dispute an invoice, it must do so in writing within twenty (20) days of receipt.
Otherwise, invoices shall be deemed accurate and payable according to the terms thereof.
4. Continuation of Terms and Conditions of the Agreement. Except as otherwise expressly provided in this Amendment No. 1, all terms and conditions of the Agreement shall remain in full force and effect and shall apply to the performance of services pursuant to this Amendment No. 1.
5. Authority to Sign. The persons executing this Amendment No. 1 on behalf of Consultant warrants and represents that they have the authority to execute this Amendment No. 1 on behalf of Consultant and have the authority to bind Consultant to the performance of the obligations hereunder.
2 IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 as of the date first above written.
"CITY"
CITY OF LAGUNA NIGUEL
By: _
Tamara S. Letourneau
City Manager
ATTEST:
Thy Merritt,
Acting City Clerk
APPROVED AS TO FORM BY THE
CITY ATTORNEY FOR THE
CITY OF LAGUNA NIGUEL,
CALIFORNIA
Kevin G. Ennis, Esq.
City Attorney
"CONSULTANT"
DAVIS FARR, LLP
By:
Print Name:
Title:
3