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HomeMy WebLinkAboutVavrinek, Trine, Day & Co., LLP by Kevin T. Pulliam - 2013-11-04 Dept. ID FN 16-005 Page 1 of 2 Meeting Date: 7/18/2016 s CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION Y MEETING DATE: 7/18/2016 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Lori Ann Farrell Harrison, Chief Financial Officer SUBJECT: Approve and authorize execution of Amendment No. 1 to the Professional Services Contract with Vavrinek, Trine, Day & Co., LLP in the amount of $3,155 for a total amount not to exceed $131,555 to perform additional financial audit services Statement of Issue: City Council approval is requested to amend the professional services contract with Vavrinek, Trine, Day & Co., LLP in the amount of $3,155 for a total amount not to exceed $131,555 to perform additional financial audit services. Financial Impact: This action will result in a $3,155 increase in the three year contract amount with Vavrinek, Trine Day & Co., LLP (VTD). Sufficient appropriations are available in the FY 201.5/16 General Fund Finance Department business unit 10035205 to support this additional cost. Recommended Action: Approve and authorize the Mayor and City Clerk to execute the "Amendment No. 1 to Agreement Between the City of Huntington Beach and Vavrinek, Trine, Day & Co., LLP for City Audit Services." Alternative Action(s): Do not approve the recommended action and direct staff accordingly. Analysis: The City of Huntington Beach is required by Charter to arrange for an independent audit of its financial statements each year. This contract is for a financial audit of all funds of the City's reporting entity, a Single Audit Report of the City's federal grant programs, an AB 2766 Audit relating to the City's Air Quality Fund, and an audit of the West Orange County Water Board (WOCWB), a fiduciary fund of the City of Huntington Beach. The audit is to be performed with auditing standards generally accepted in the United States and Government Auditing Standards issued by the Comptroller of the United States. The current contract includes the audit of two City federal grant programs. In the current fiscal year, under the Office of Management and Budget (OMB) Circular A-133, three City federal grant programs are required to be audited. A $3,155 increase in the contract with Vavrinek, Trine, Day & Co., LLP is necessary to audit the additional federal grant program. No other changes to the contract period or terms are needed. HB -171- Item 13. - 1 Dept. ID FN 16-005 Page 2 of 2 Meeting Date:7/18/2016 Environmental Status: Not applicable. Strategic Plan Goal: Strengthen economic and financial sustainability. Attachment(s): 1. "Amendment No. 1 to Agreement Between the City of Huntington Beach and Vavrinek, Trine, Day & Co., LLP for City Audit Services" 2. Certificate of Insurance. 3. Original Professional Services Contract Between the City of Huntington Beach and Vavrinek, Trine, Day & Co., LLP for Audit Services. Item 13. - 2 I]B -172- ATTACHMENT # 1 AMENDMENT NO. l TO AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND VAVRINEK, TRINE,DAY& CO.,LLP FOR CITY AUDIT SERVICES THIS AMENDMENT is made and entered into by and between the CITY OF HUNTINGTON BEACH, a California municipal corporation,hereinafter referred to as "City,", and VAVRINEK, TRINE,DAY &CO.,LLP, a Limited Liability Partnership, hereinafter referred to as "Consultant." VATHEREAS, City and Consultant are parties to that certain agreement, dated November 4, 2013, entitled"Professional Services Contract Between the City of Huntington Beach and Vavrinek, Trine, Day & Co., LLP for City Audit Services,"which agreement shall hereinafter be referred to as the"Original Agreement," and City and Consultant wish to amend the Original Agreement to reflect the additional work to be performed by Consultant, and the additional compensation to be paid in consideration thereof by City to Consultant, NOW, THEREFORE, it is agreed by City and Consultant as follows: 1. ADDITIONAL WORK Consultant shall provide to City such additional services as required by City. 2. ADDITIONAL COMPENSATION In consideration of the additional services to be performed hereunder as described in Section 1 above, City agrees to pay Consultant and Consultant agrees to accept from City as full payment for services rendered, an additional sum not to exceed Three Thousand One Hundred Fifty-five Dollars ($3,155.00), in addition to the Original Amount of One Hundred Twenty-Eight Thousand Four Hundred Dollars ($128,400.00) for a new total amount not to exceed of One Hundred Thirty-one Thousand Five Hundred Fifty-five Dollars ($131,555.00). 3. REAFFIRMATION Except as specifically modified herein, all other terms and conditions of the Original Agreement shall remain in full force and effect. RLS 6/3/16/16-5286/137492/DO 1 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers LL[ y ZZ ---20146. CONSULTANT CITY OF HUNTINGTON BEACH, a VAVRINEK, TRINE,DAY & CO.,LLP municipal corporation of the State of California Mayo (print/a type name) C Its: � ,/ ity lerk By: INITIATED D APPROVED: (print or type name) 4oA �G t Its: Chief Financial Officer RVE APPROVED: Ci agerA APPROVED F it Attorney OU Cn to W M-v RLS 6/3/16/16-5286/137492/DO 2 ATTACHMENT #2 ® DnTE(n1MroDlYYYY) , ll. R CERTIFICATE OF LIABILITY INSURANCE 05/13/2016 j THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED. BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE.OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED,subject to the terms and conditions of the policy,certain pollcies may require an endorsement. A statement on this Certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT (847) 385-6800 (847) 385-6801 NAME: IntB ro USA Inc. Integro USA Inc. �AIC1Q,E>L):(847 385-6800 lac Ner(847)385-6801 111 West Campbell Street ADDRESS:david.koenen@integrogroup.com i 4th Floor INSURER S)AFFORDING COVERAGE NAIC d Arlington Heights IL 60005 INSURER A;Federal Insurance ComDanv 20281 INSURED (909)466-4410 (909)466-4431 INSURERS: I Vavrinek, Trine, Day & Co., LLP INSURERC: _ 10681 Foothill Blvd., Suite 300 INSURER D: Rancho Cucamonga, CA 91730 INSURERE: _- INSURER F 1 COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD k, INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS 6 CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR AOOL UBR POLICY EFE POLICY EXP- i LTR��—_—TYPE OF INSURANCE ' POLICY NUh1BER h1INDDIYYYY i h1MlDD LIMITS GENERAL LIABILITY EACH OCCURRENCE S Q90 000 • • DAMAGE TO RENTED A --�- -_�— 7 I COPMMERCIAL GENERAL LIABILITY � PREMISES{Escu„ocrrence 5 i,Doo,000 JCLAIMS-MADE � OCCUR ME EXP(Any one person) $ 10,000 3602-9324 05/13/2016 05/13/2017 PERSONAL&ACV INJURY $1.000.000 GENERAL AGGREGATE 5 2,000 000 I GEN'L AGGREGATE LIMIT APPLIES PER: PRODUCTS-COMPIOP AGG $Included-_ J POLICY f _ PRO- LOC $ l AUTOMOBILE LIABILITY / (Es l acccdenntSINGLE LIMIT S 1.000.000 ANY AUTO V BODILY INJURY(Per person) $ A H-7 AUTOS ALL OW`1E❑ l AUTOS SCHEDULED7359-3893 05/13i2016 05/1312017 BODILY INJURY(Per accident) $ I --NON-OVdiJE❑ i PROPERTY DAMAGE SHIRED AUTOS J AUTOS Per accident S UMBRELLA LIA8 OCCUR EACH OCCURRENCE $10,000,00005113/2016 1 05/1312017 A � EXCESS LIAR CLAIMS-MADE 7988-7380 1 AGGREGATE S 10,000,000 OED i RETENTIONS $ WORKERS COMPENSATION WC STATU- OTH- AND EMPLOYERS'LIABILITY IN TO ANY PROPRIETORIPARTNER/EXECUTIVE Y[--] NIA E.L.EACH ACCIDENT $ ! OFFICER1h1Eh1BER EXCLUDED? (Mandatory in NH) E.L.DISEASE-EA EP.1PLOYErj $ If yes,describe under DESCRIPTION OF OPERATIONS be!o'•v E.L.DISEASE-POLICY LIMITS 1 I I DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (Attach.ACORD 101,Additional Remarks Schedule,If more space is requtred) RE: Auditing Services and Operations of the Named Insured as provided by these specific policies of insurance only, as per written contract with the Named Insured. APPROVED AS TO FORM CERTIFICATE HOLDER V ) 1 _CANCELLATION City of Huntington Beach 2000 Main Street I SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE N' THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN Huntington Beach, CA 92648 ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE i ©1988-2010 ACORD CORPORATION. All rights reserved. ACORD 25(2010105) The ACORD name and logo are registered marks of ACORD DATE _ ✓ CERTIFICATEOF T LIA ILIT INSURANCE 5/131/2016 } THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS I CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. if SUBROGATION IS WAIVED, subject to the terms and conditions of the policy,certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT Mar Strohman NAME: y Kessler Alair Insurance Services, Inc PHONE (909)931-1500 AICFAX ND;1909)932-2133 License # OA 91387 ADDRESS:mstrohmanQkessleralair.com i 12487 N. Mainstreet, Ste. 240 INSURERS AFFORDING COVERAGE NAIC4 Rancho Cucamonga CA 91739 INSURERA:Everest Indemnity Ins Co 108.51 _ i INSURED INSURER B: vavrinek, Trine, Day $ Co. , LLP INSURER C: 10681 Foothill Blvd. , #300 INSURERD: INSURER E: 1 Rancho Cucamonga CA 91730-3271 1 INSURERF: I Ij COVERAGES CERTIFICATENUMBER:16-17 WC NO WOS REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES,LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR ADDL SUBR POLICY EFF POLICY EXP LTR( TYPE OF INSURANCE INSR YND POLICY NUMBER Mt.11DDIYYV'Y G4AIDDIYYYY LIMITS GENERAL LIABILITY EACH OCCURRENCE S DAr11AGE TO RENTED ' I #Coll' MERCIAL GENERAL LIABILITY PREMISES Ea occurrence $. CLAIMS-MADE OCCUR MED EXP(Any one person) $ PERSONAL&ADV INJURY S { 7 APPROVED _ + GENERAL AGGREGATE S i GEN'L AGGREGATE LIMIT APPLIES PER: ° PP OV ry'm"D Ate" T - FORM PRODUCTS-COI.IPLOP AGG $ POLICY PRO- LOC $ I' AUTOMOBILE LIABILITY COt,IBINED SINGLE LIMIT Ea accident ! ANY AUTO '�"F �,,„r- BODILY INJURY(Per person) S i ALL OWNEDL HEDULED / / /A 130DILY INJURY(Per accident) 5 1 AUTOS TOS BY ------ HIRED AUTOSNOSV.NED .--Michael Gates,CItY torney' PROPERTY eOa d niDAh7AGE S 9 UMBRELLA LIAROCCUR EACH OCCURRENCE $ EXCESS UABCLAIMS MADE AGGREGATE S "DED I I RETENTION$ $ I A WORKERS COMPENSATION % WC STATRY T- OTH- � AND EMPLOYERS'LIABILITY ANY PROPRIETOR/PARTNERIEXECUTIVE YIN E.L EACH ACCIDENT S 1,000,000 OFFICE Rl61 ELI BE R EXCLUDED? NIA A10003013161 /13/2016 /13/2017 III (Mandatory in NH) E.L.DISEASE-EA EMPLOYE S 1,000,000 t If yes,descr.be under {{ DESCRIPTION OF OPERATIONS below E.L.DISEASE-POLICY LIMIT S 1,000,000 I DESCRIPTION OF OPERATIONS 1 LOCATIONS I VEHICLES(Attach ACORD 101,Additional Remarks Schedule,i(more space is required) Certificate holder only. I I III CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN City of Huntington Beach ACCORDANCE WITH THE POLICY PROVISIONS. 2000 Main Street Huntington Beach, CA 92648 AUTHORIZED REPRESENTATIVE Mary Strohman/MARY �- ACORD 26(2010/05) ©1988-2010 ACORD CORPORATION. All rights reserved.. 1NSnw;nntnnsl nt Th.ACr1Ril n.mn nrI I-pro rvnic4nrnrr mnr4c of Ar:r)Pr% ADDITIONAL COVERAGES Ref# Description Coverage Code Form No. Edition Date Waiver of Subrogation WVSUB Limit i Limit 2 Limit 3 Deductible Amount Deductible Type Premium $1,305.00 Ref# Description Coverage Code Form No. Edition Date i Expense constant EXCNT Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium $220.00 Ref# Description Coverage Code Form No. Edition Date Schedule Credit Limit i Limit 2 Limit 3 Deductible Amount Deductible Type Premium -$10,620.00 Ref# Description Coverage Code Form No. Edition Date Premium discount PDIS Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium -$6,152.00 Ref# Description Coverage Code Form No. Edition Date Expense Mod Factor 1 EXN01 Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium 133% $21,958.00 Ref# Description Coverage Code Form No. Edition Date Assessment Fund ASMNT Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium $8,241.00 Ref# Description Coverage Code Form No. Edition Date Terrorism Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium $4,170.00 Ref# Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref# Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref Eescriptijonn Coverage Code Form No. Edition Date Limiimit 2 Limit 3 Deductible Amount Deductible Type Premium Ref# Description Coverage Code Form No. n Date:Tt Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium [(DFADTLCV Copyright 2001,AMS Services,Inc. LEMME Entegro "It ,lu•' I loos VERIFICATION OF INSURANCE ISSUED TO: City of Huntington Beach Mr. Slobian it 2000 Main Street Huntington Beach, CA 92648 We, the undersigned Insurance Brokers, hereby verify that Lexington Insurance Company, Aspen Specialty Insurance Company, and ProSIght— Syndicate 1110 at Lloyd's has issued the following described Professional Liability Insurance, which is in force as of the date thereof- PROFESSIONAL LIABILITY INSURANCE NAME OF INSURED: Vavrinek, Trine, Day & Co., LLP and others as more fully described in the Policy. POLICY NUMBER: 03-582-40-40/LXA9ALH16/ PL2016APL90050 PERIOD OF INSURANCE: January 1, 2016 to January 1, 2017 12:01 a.m. both days SUM INSURED: $12,500,000 Each claim / in the aggregate including $15,000,000 costs, charges and expenses SUBJECT TO ALL TERMS, CONDITIONS AND LIMITATIONS OF THE POLICY This document is furnished to you as a matter of information only and is not insurance coverage. Only the formal policy and applicable endorsements offer a comprehensive review of the coverage In place. The issuance of this document does not make the person or organization to whom it is issued an additional insured, nor does It modify in any manner the contract of insurance between the Insured and the Insurer. Any amendment, change or extension of such contract can only be effected by specific endorsement attached thereto, Should the above described Policy be cancelled before the expiration date thereof, notice will be delivered in accordance with the policy provisions. Issued at Chicago, Illinois Lemme, a division of Integro USA Inc. Date-, February 19, 2016 Per: David Koenen Managing Principal CA DOI Llc#OC42466 �4TTAAgiV PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND VAVRINEK, TRINE, DAY & CO., LLP FOR CITY AUDIT SERVICES Table of Contents 1 Scope of Services.....................................................................................................1 2 City Staff Assistance..........................................:.....................................................2 3 Term;Time of Performance.....................................................................................2 4 Compensation...........................................................................................................2 5 Extra Work.........................................................................................---....................2 6 Method of Payment..................................................................................................3 7 Disposition of Plans, Estimates and Other Documents ...........................................3 8 Hold Harmless .........................................................................................................3 9 Professional Liability Insurance.............................................................................4 10 Certificate of Insurance............................................................................................5 11 Independent Contractor............................................................................................6 12 Termination of Agreement.......................................................................................6 13 Assignment and Delegation......................................................................................6 14 Copyrights/Patents...................................................................................................7 15 City Employees and Officials..................................................................................7 16 Notices.........................................................................................7 17 Consent....................................................................................................................8 18 Modification.............................................................................................................8 19 Section Headings .....................................................................................................8 20 Interpretation of this Agreement..............................................................................8 21 Duplicate Original....................................................................................................9 22 Immigration........................................................................... .......... ....9 23 Legal Services Subcontracting Prohibited........................................................ ...9 24 Attorney's Fees..........................................................................................................10 25 Survival.....................................................................................................................10 26 Governing Law.........................................................................................................10 27 Signatories.................................................................................................................10 28 Entirety......................................................................................................................10 29 Effective Date.................................................................................I I HB -179- Item 13. - 9 PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND VAVRINEK,TRINE,DAY&CO.,LLP FOR CITY AUDIT SERVICES THIS AGREEMENT ("Agreement") is made and entered into by and between the City of Huntington Beach, a municipal corporation of the State of California, hereinafter referred to as "CITY, and Vavrinek, Trine, Day & Co., LLP, a Limited Liability Partnership hereinafter referred to as"CONSULTANT." WHEREAS, CITY desires to engage the services of a consultant to provide audit services;and Pursuant to documentation on file in the office of the City Clerk,the provisions of the Huntington Beach Municipal Code, Chapter 3.03, relating to procurement of professional service contracts have been complied with;and CONSULTANT has been selected to perform these services, NOW,THEREFORE,it is agreed by CITY and CONSULTANT as follows: 1. SCOPE OF SERVICES CONSULTANT shall provide all services as described in Exhibit "A," which is attached hereto and incorporated into this Agreement by this reference. These services shall sometimes hereinafter be referred to as the"PROJECT." CONSULTANT hereby designates Kevin T. Pulliam, who shall represent it and be its sole contact and agent in all consultations with CITY during the performance of this Agreement. 13-3959/102085 1 Item 13. - 10 HB -180- 2. CITY STAFF ASSISTANCE CITY shall assign a staff coordinator to work directly with CONSULTANT in the performance of this Agreement. 3. TERM;TIME OF PERFORMANCE Time is of the essence of this Agreement. The services of CONSULTANT are to commence onWO_VkM62� /3 (the "Commencement Date"). This Agreement shall automatically terminate three (3) years from the Commencement Date, unless extended or sooner terminated as provided herein. All tasks specified in Exhibit "A" shall be completed no later than three (3)years from the Commencement Date. The time for performance of the tasks identified in Exhibit "A" ai a generally to be shown in Exhibit"A." This schedule may be amended to benefit the PROJECT if mutually agreed to in writing by CITY and CONSULTANT. In the event the Commencement Date precedes the Effective Date, CONSULTANT shall be bound by all terms and conditions as provided herein. 4. COMPENSATION In consideration of the performance of the services described herein, CITY agrees to pay CONSULTANT on a time and materials basis at the rates specified in Exhibit "B," which is attached hereto and incorporated by reference into this Agreement, it fee,including all costs and expenses,not to exceed One Hundred Twenty-eight Thousand and Four Hundred Dollars($128,400.). 5. EXTRA WORK In the event CITY requires additional services not included in Exhibit"A" or changes in the scope of services described in Exhibit "A," CONSULTANT will 13-3958/102085 2 HB -181- Item 13. - 11 undertake such work only after receiving written authorization from CITY. Additional compensation for such extra work shall be allowed only if the prior written approval of CITY is obtained. 6. METHOD OF PAYMENT CONSULTANT shall be paid pursuant to the terms of Exhibit"E." 7. DISPOSITION OF PLANS ESTIMATES AND OTHER DOCUMENTS CONSULTANT agrees that title to all materials prepared hereunder, including, without limitation, all original drawings, designs, reports, both field and office notices, calculations, computer code, language, date or programs, maps, memoranda, letters and other documents, shall belong to CITY, and CONSULTANT shall turn these materials over to CITY upon expiration or termination of this Agreement or upon PROJECT completion, whichever shall occur first. These materials may be used by CITY as it sees fit. The provisions noted above do not apply to audit documentation and/or audit working papers. Copies of the audit documentation and/or audit working papers shall be available to CITY even subsequent to the termination of this Agreement, provided such disclosure does not undermine the independence or the validity of the audit process. 8. HOLD HARMLESS CONSULTANT hereby agrees to protect, defend, indemnify and hold harmless CITY, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, dainages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with CONSULTANT's (or CONSULTANT's subcontractors, if any) negligent (or alleged 13-3958/102095 3 Item 13. - 12 Hs -182- negligent) performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement by CONSULTANT, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of CITY. CONSULTANT will conduct all defense at its sole cost and expense and CITY shall approve selection of CONSULTANT's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by CONSULTANT. 9. PROFESSIONAL LIABILITY INSURANCE a CONSULTANT shall obtain and furnish to CITY a professional liability insurance policy covering the work performed by it hereunder. This policy shall provide coverage for CONSULTANT's professional liability in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and in the aggregate. The above- mentioned insurance shall not contain a self-insured retention without the express written consent of CITY; however, an insurance policy "deductible" of Ten Thousand Dollars ($10,000.00) or less is permitted. A claims-made policy shall be acceptable if the policy further provides that: A. The policy retroactive date coincides with or precedes the initiation of the scope of work (including subsequent policies purchased as renewals or replacements) B. CONSULTANT shall notify CITY of circumstances or incidents that might give rise to future claims. 13-3958/102085 4 r xB -1833- Item 13. - 13 CONSULTANT will make every effort to maintain similar insurance during the required extended period of coverage following PROJECT completion. If insurance is terminated for any reason, CONSULTANT agrees to purchase an extended reporting provision of at least two (2) years to report claims arising from work performed in connection with this Agreement. If CONSULTANT fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the CITY with required proof that insurance has been procured and is in force and paid for, the CITY shall have the right,at the CITY's election, to forthwith terminate this Agreement. Such termination shall not affect CONSULTANT's right to be paid for its time and materials expended prior to notification of termination. CONSULTANT waives the right to receive compensation and agrees to indemnify the CITY for any work performed prior to approval of insurance by the CITY. 10. CERTIFICATE OF INSURANCE - Prior to commencing performance of the work hereunder, CONSULTANT shall furnish to CITY a certificate of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverage as required by this Agreement; the certificate shall; A. provide the name and policy number of each carrier and policy; B. state that the policy is currently in force;and C. promise that such policy shall not be suspended, voided or canceled a by either party, reduced in coverage or in limits except after thirty r 13-3958/102085 5 Item 13. - 14 HB -184- (30)days' prior written notice; however,ten(10)days' prior written notice in the event of cancellation for nonpayment of premium. CONSULTANT shall maintain the foregoing insurance coverage in force until the work under this Agreement is fully completed and accepted by CITY. The requirement for carrying the foregoing insurance coverage shall not derogate from CONSULTANT's defense,hold harmless and indemnification obligations as set forth in this Agreement. CITY or its representative shall at all times have the right to demand the original or a copy of the policy of insurance. CONSULTANT shall pay, in a prompt and timely manner,the premiums on the insurance hereinabove required. 11. INDEPENDENT CONTRACTOR CONSULTANT is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of CITY. CONSULTANT shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for CONSULTANT and its officers, agents and employees and all business licenses, if any, in connection with the PROJECT and/or the services to be performed hereunder. 12. TERMINATION OF AGREEMENT All work required hereunder shall be performed in a good and vvorkrnanlike manner. CITY may terminate CONSULTANT's services hereunder at any time with or without cause, and whether or not the PROJECT is fully complete. Any termination of this Agreement by CITY shall be made in writing, notice of which shall be delivered to CONSULTANT as provided herein. In the event of termination, all finished and 13-3958/102085 6 HB -1 s5- Item 13. - 15 unfinished documents,exhibits,reports and evidence shall,at the option of CITY, become its property and shall be promptly delivered to it by CONSULTANT. The provisions noted above do not apply to audit documentation and/or audit working papers. Copies of the audit documentation and/or audit working papers shall be available to CITY even subsequent to the termination of this Agreement, provided such disclosure does not undermine the independence or the validity of the audit process. 13. ASSIGNMENT AND DELEGATION This Agreement is a personal service contract and the work hereunder shall not be assigned, delegated or subcontracted by CONSULTANT to any other person or entity without the prior express written consent of CITY. If an assignment, delegation or subcontract is approved, all approved assignees, delegates and subconsultants must satisfy the insurance requirements as set forth in Sections 9 and 10 hereinabove. 14. COPMGHTS/PATENTS CITY shall own all rights to any patent or copyright on any work, item or material produced as a result of this Agreement. 15. CITY EMPLOYEES AND OFFICIALS CONSULTANT shall employ no CITY official nor any regular CITY employee in the work performed pursuant to this Agreement. No officer or employee of CITY shall have any financial interest in this Agreement in violation of the applicable provisions of the California Government Code. r 16. NOTICES Any notices, certificates, or other communications hereunder shall be given either by personal delivery to CONSULTANTS agent (as designated in Section 1 13-3958/102085 7 Item 13. - 16 HB -186- hereinabove)or to CITY as the situation shall warrant,or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Service,to the addresses specified below. CITY and CONSULTANT may designate different addresses to which subsequent notices,certificates or other communications will be sent by notifying the other party via personal delivery, a reputable overnight carrier or U. S. certified mail-return receipt requested: TO CITY: TO CONSULTANT: City of Huntington Beach Vavnnek,Trine,Day&Co.,LLP ATTN: Dahle Bulosan Kevin T.Pulliam,CPA 2000 Main Street 25231 Paseo De Alicia, Ste. 100 Huntington Beach,CA 92648 Laguna Hills,CA 92653 17. CONSENT When CITY's consent/approval is required under this Agreement, its consent/approval for one transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence of the same or any other transaction or event. 18. MODIFICATION No waiver or modification of any language in this Agreement shall be valid unless in writing and duly executed by both parties. 19. SECTION HEADINGS The titles,captions,section,paragraph and subject headings,and descriptive phrases at the beginning of the various sections in this Agreement are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded from such provisions, and do not interpret, define, limit or 13-3959/102085 8 - HB -187- Item 13. - 17 describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Agreement. 20. IlMRPRUrATION OF THIS AGREEh= The language of all parts of this Agreement shall in all cases be construed as a whole,according to its fan meaning, and not strictly for or against any of the parties. If any provision of this Agreement is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Agreement. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Agreement, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as to require the commission of any act contrary to law,and wherever there is any conflict between any provision contained herein and any present or future statute, law,ordinance or regulation contrary to which the parties have no right to contract, then the Iatter shall prevail, and the provision of this Agreement which is hereby affected shall be curtailed and Iimited only to the extent necessary to bring it within the requirements of the Iaw. 21. DUPLICATE ORIGINAL The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals,each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who has signed it. 13-3959/102085 9 Item 13. - 18 xs -188- 22. IMMIGRATION CONSULTANT shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the United States Code regarding employment verification. 23. LEGAL SERVICES SUBCONTRACTING PROHIBITED CONSULTANT and CITY agree that CITY is not liable for payment of any subcontractor work involving legal services, and that such legal services are expressly outside the scope of services contemplated hereunder CONSULTANT understands that pursuant to Huntington Beach City Charter Section 309,the City Attorney is the exclusive legal counsel for CITY; and CITY shall not be liable for payment of any legal services expenses incurred by CONSULTANT. 24. ATTORNEY'S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Agreement or to secure the performance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the non-prevailing party. 25. SURVIVAL Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement,shall so survive. 26. GOVERNING LAW This Agreement shall be governed and construed in accordance with the laws of the State of California. 13-3958/102085 10 HB -189- Item 13. - 19 27. SIGNATORIES Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bmd their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any injuries or damages to CITY in the t event that such authority or power is not,in fact,held by the signatory or is withdrawn. 28. ENTIRETY The parties acknowledge and agree that they are entering into this Agreement freely and voluntarily following extensive arm's length negotiation, and that each has had the opportunity to consult with legal counsel prior to executing this Agreement. The parties also acknowledge and agree that no representations,inducements, promises, agreements or warranties, oral or otherwise, have been made by that party or anyone acting on that parry's behalf, which are not embodied in this Agreement, and that that party has not executed this Agreement in reliance on any representation, inducement, promise, agreement, warranty, fact or circumstance not expressly set forth in this Agreement. This Agreement, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Agreement,and supersede all prior understandings and agreements whether oral or in writing between the parties respecting the subject matter hereof. 29. EFFECTIVE DATE This Agreement shall be effective on the date of its approval by the City Attorney. This Agreement shall expire when terminated as provided herein. 13-39591102085 l l Item 13. - 20 HB -190- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. CONSULTANT, CITY OF HUNTINGTON BEACH, VAVRINEK,TRINE,DAY&CO.,LLP a muni ' al corporation of the State of California By: &X0 � Mayor print name ITS:(circle one)Chairman/PresldentNicePiesident9M n? AND City Clerk V 111111;6 By. INI TBD AND APP VED: print name ITS:(circle one)Secretary/Chief Financial Officer/Asst actor of Finance Secretary-Treasurer RE APPROVED: CiPaXer APPROVED AS TO 4-1 FOR .i 4� tAO Attorney/� V 3 13-3958/102085 12 HB -191- Item 13. - 21 EXHIBIT "A" A STATEMENT OF WORK (Narrative of work to be performed) Stage 1, Planning VTD will meet with key staff to plan the audit services for the year. These meetings will discuss all audit issues and the proposed interim work plan. During this phase, we will accomplish. • Identifying the key personnel and contacts in the Finance Department and other departments • Identify the City's significant classes of transactions and business processes • Obtain an understanding of the risk areas • Develop an understanding of unusual transactions or events that have occurred during fiscal year. •Formalizing logistics. • Finalizing the timeframes for interim fieldwork Stage 2, Risk Assessment Based upon the information obtained in the planning meetings VTD will perform a risk assessment as required by Statements on Auditing Standards (SAS)to be used in the preparation of the overall audit plan As part of this risk assessment we will perform the following: 1 Obtain an understanding of the entity and its environment and its risks. 2 Obtain an understanding of the entity's internal controls. 3 Preliminary analytical review, determination of preliminary materiality levels 4. Analysis of known misstatements, if any. EXHIBIT A Item 13. - 22 HB -192- 5 Consideration of risk of material misstatement at the individual account balance, class of transactions and disclosure level. 6.Assessing the risks of material misstatement at both the financial statement and relevant assertion levels Stage 3, Preparation of the overall audit plan Once the planning and risk assessment process are complete an overall audit plan will be prepared The plan will specify each audit task. staffing assignments,timelines, and due dates.The plan will also break down the work assignments between interim and final audit timelines The audit plan will include the transaction cycles which have been selected for internal control testing and those for which only the detailed walk through will be performed Once the audit plan has been completed the prepared by client(PBC) requirements and the responsibilities of the auditor document will be prepared The document listing will be detailed by specific task and will include the due dates and names of the persons responsible for each task Stage 4, the Interim Audit The specific weeks will be determined during the planning meeting and preparation of the audit plan process Our interim work will include the following We will obtain an understanding of the City's internal control structure starting with I Defining the City's objectives and strategies and related business risks. 2. Obtaining an understanding of the City's internal control environment(tone at the top)- EXHIBIT A HB -193- Item 13. - 23 • Communication and enforcement of integrity and ethical values • Commitment to competence • Participation of those charged with governance • Management's philosophy and operation style • Organizational structure • Assignment of authority and responsibility • Human resource policies and practices 3 The City's risk assessment process. 4 Internal control communication process. 5 Internal control monitoring process 6 Any industry, regulatory or other factors. This understanding will be accomplished through the use of 1 Inquiry of management and others within the City. 2. Observation and inspection 3 Review of external information from rating agencies, and other external sources. We will also obtain an understanding of the design and implementation of the financial reporting system to understand the follow of information for• 1. Each class of transactions that is significant to the financial statements. 2 The procedures within both automated and manual systems, by which those transactions are initiated, authorized,recorded, processed, and reported in the financial statements. 3 The related accounting records, whether in electronic or manual supporting information, and EXHIBIT A Item 13. - 24 HB -194- specific accounts in the financial statements involved in initiating, authorizing, recording, processing and reporting transactions 4 How the information systems captures events and conditions other than classes of transactions that are significant to the financial statements. 5. The financial reporting process used to prepare the City's financial statements, including significant accounting estimates and disclosures Our focus will also involve- • Understanding and documenting the financial reporting process • Documenting information systems and related computerized data processing controls • Identifying the flow of information and internal control involved in various key processes including, investment management, procurement, disbursements, payroll, treasury operations, debt/capital management, cash receipts and utility billing To accomplish these tasks we will use client accounting manuals, inquiry, observation. checklists and internal control questionnaires During the interim timeframe each of the significant internal control systems will be evaluated to obtain sufficient knowledge of the design and implementation of key controls and to determine if a test of controls will result in audit efficiencies • Planning of the Single Audit including the distribution of questionnaires, conducting inquiries, reviewing documentation and determining major programs In addition, in order to assist the City in achieving its Single Audit reporting timeline, we will begin conducting fieldwork for those federal programs identified as major as a result of our preliminary risk assessment • Identifying laws and regulations that are applicable to the City of Huntington Beach and its component units. To accomplish these tasks we will use client documents. inquiry, observation, checklists and internal control questionnaires EXHIBIT A HB -195- Item 13. - 25 •Providing the parameters required to commence analyzing financial fluctuations in the operating results of the City of Huntington Beach • Formulating audit procedures and related audit programs that will be used during the final segment of the audit process Testing the effectiveness of internal controls will be accomplished for the significant internal controls systems for which we plan to place reliance. To gain efficiencies our control testing will be structured so that it can be used for each of the audits we will perform. I/ her areas to be completed at the interim audit include SAS No 99 interviews and documentation Discuss workable solutions for potential findings that have been identified and communicated to the City during the audit process Stage 5,the Final Audit We will commence our final fieldwork as soon as City of Huntington Beach has sufficiently closed their accounting records During this phase, we will perform substantive audit procedures on the year-end statement of net assets and fund balances, revenue and expenditure/expense accounts. We will use a variety of audit procedures which may include outside confirmations, statistical sampling, and detailed testing of schedules, analytical review, inquiry, and observation. Stage 6, the Reporting Phase At the end of the audit process we will meet with key staff to cover the following: • Discuss improvements for subsequent years audit plan, • Meet with the City to present the results of the audit, • Communicate with those charged with Governance. EXHIBIT A Item 13. - 26 HB -196- B CONSULTANT'S DUTIES AND RESPONSIBILITIES. As required by the request for proposal our audit plan covers the engagements for • All funds of the City as included to the Comprehensive Annual Financial Report(CAFR) • Single Audit in accordance with OMB Circular A-133 • Issuance of a management letter, as applicable • Appropriation Limit Calculation • AB 2766 Report • West Orange County Water Board Audit Report Our audit plan for each of the fiscal years involves six (6) stages for each audit. These stages are- Stage 1, Planning Stage 2, Risk Assessment Stage 3, Preparation of the overall audit plan Stage 4, Conducting the Interim Audit Stage 5, Conducting the Final Audit Stage 6, Reporting C CITY'S DUTIES AND RESPONSIBILITIES Communicate with Consultant on an as-needed basis and provide requested documentation to consultant in a timely manner. D WORK PROGRAM/PROJECT SCHEDULE TBD EXHIBIT A HB -197- Item 13. - 27 EXHIBIT "B" Payment Schedule(Hourly Payment) A. Hourly Rate CONSULTANT'S fees for such services shall be based upon the following hourly rate and cost schedule: Hourly Rates I -- -- - -- - - - - - ---- - -- Partner $ 225 S 225 $ 225 Manasei 185 185 185 Supen-isor 165 165 165 Senior 120 120 120 Staff 90 90 90 C larical 65 65 65 B Travel Charges for time during travel are not reimbursable C Billing 1. All billing shall be done monthly in fifteen (15) minute increments and matched to an appropriate breakdown of the time that was taken to perform that work and who performed it 2 Each month's bill should include a total to date. That total should provide, at a glance, the total fees and costs incurred to date for the project. 3. A copy of memoranda, letters, reports, calculations and other documentation prepared by CONSULTANT may be required to be submitted to CITY to demonstrate progress toward completion of tasks In the event CITY rejects or has comments on any such product, CITY shall identify specific requirements for satisfactory completion 4 CONSULTANT shall submit to CITY an invoice for each monthly payment due. Such invoice shall A) Reference this Agreement, B) Describe the services performed; C) Show the total amount of the payment due; D) Include a certification by a principal member of CONSULTANT's firm that the work has been performed in accordance with the provisions of this Agreement, and E) For all payments include an estimate of the percentage of work completed. Upon submission of any such invoice, if CITY is satisfied that CONSULTANT is making satisfactory progress toward completion of tasks in accordance with this 1 Item 13. - 28 HB -198- Agreement, CITY shall approve the invoice, in which event payment shall be made within thirty (30) days of receipt of the invoice by CITY Such approval shall not be unreasonably withheld If CITY does not approve an invoice, CITY shall notify CONSULTANT in writing of the reasons for non-approval and the schedule of performance set forth in Exhibit "A" may at the option of CITY be suspended until the parties agree that past performance by CONSULTANT is in, or has been brought into compliance, or until this Agreement has expired or is terminated as provided herein 5 Any billings for extra work or additional services authorized in advance and in writing by CITY shall be invoiced separately to CITY. Such invoice shall contain all of the information required above, and in addition shall list the hours expended and hourly rate charged for such time Such invoices shall be approved by CITY if the work performed is in accordance with the extra work or additional services requested, and if CITY is satisfied that the statement of hours worked and costs incurred is accurate Such approval shall not be unreasonably withheld Any dispute between the parties concerning payment of such an invoice shall be treated as separate and apart from the ongoing performance of the remainder of this Agreement 2 HB -199- Item 13. - 29 EXHIBIT "B" Payment Schedule(Fixed Fee Payment) Service Estimated 2013/14 2014/15 2015/16 2016/15 Hours* Optional Audit of City 288 $30,000 $30,000 $30,000 $30,000 Single Audit 66 $6,310 $6,310 $6,310 $6,310 WOCWB 48 $4,990 $4,990 $4,990 $4,990 Other 16 $1,500 $1,500 $1,500 $1,500 Total 418 $42,800 $42,800 $42,800 $42,800 *Estimated hours are for the 3 year term only 1 CONSULTANT shall be entitled to monthly progress payments toward the fixed fee set forth herein in accordance with the following progress and payment schedules 2 Delivery of work product A copy of every memorandum, letter, report, calculation and other documentation prepared by CONSULTANT shall be submitted to CITY to demonstrate progress toward completion of tasks In the event CITY rejects or has comments on any such product, CITY shall identify specific requirements for satisfactory completion 3 CONSULTANT shall submit to CITY an invoice for each monthly progress payment due. Such invoice shall A) Reference this Agreement, B) Describe the services performed, C) Show the total amount of the payment due, D) Include a certification by a principal member of CONSULTANT's firm that the work has been performed in accordance with the provisions of this Agreement, and E) For all payments include an estimate of the percentage of work completed Upon submission of any such invoice, if CITY is satisfied that CONSULTANT is making satisfactory progress toward completion of tasks in accordance with this Agreement, CITY shall approve the invoice, in which event payment shall be made within thirty (30) days of receipt of the invoice by CITY Such approval shall not be unreasonably withheld If CITY does not approve an invoice, CITY shall notify CONSULTANT in writing of the reasons for non-approval and the schedule of performance set forth in Exhibit "A" may at the option of CITY be suspended until the parties agree that past performance by CONSULTANT is in, or has been brought into compliance, or until this Agreement has expired or is terminated as provided herein. EXHIBIT B Fixed Fee Payment Item 13. - 30 HB -200- 4 Any billings for extra work or additional services authorized in advance and in writing by CITY shall be invoiced separately to CITY. Such invoice shall contain all of the information required above, and in addition shall list the hours expended and hourly rate charged for such time Such invoices shall be approved by CITY if the work performed is in accordance with the extra work or additional services requested, and if CITY is satisfied that the statement of hours worked and costs incurred is accurate Such approval shall not be unreasonably withheld Any dispute between the parties concerning payment of such an invoice shall be treated as separate and apart from the ongoing performance of the remainder of this Agreement EXHIBIT B Fixed Fee Payment HB -201- Item 13. - 31 ' City of Huntington Beach f 2000 Main Street * Huntington Beach, CA 92648 (714) 536-5227 ® www.huntingtonbeachca.gov FF6 17 1999 PD office of the City Clerk Robin Estanislau, City Geri,- July 19, 2016 Vavrinek, Trine, Day & Co , LLP Attn Roger Alfaro 10681 Foothill Blvd , Suite 300 Rancho Cucamonga CA 91730 Re Professional Services Contract Amendment Mr Alfaro, Enclosed for your records is a copy of the fully executed "Amendment No 1 to Agreement between the City of Huntington Beach and Vavrinek, Trine, Day & Co , LLP for City Audit Services " Sincerely, � F Robin Estanislau, CIVIC City Clerk RE pe Enclosure Sister Cities Anjo, Japan s Waitakere, New Zealand Dept.ID FN 13-016 Page 1 of 2 Meeting Date: 111412013 CITY OF HUNTINGTON BEACH 9 ,. REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 11/4/2013 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Lori Ann Farrell, Director of Finance SUBJECT: Approve and authorize execution of a Professional Services Contract with Vavrinek, Trine, Day & Co., LLP in the amount of $128,400 to perform financial audit services Statement of Issue: City Council approval is requested to approve and authorize a professional services contract with Vavrinek, Trine, Day & Co., LLP (VTD) in the amount of $42,800 per year, for a total of $128,400 over a three year period, to perform financial audit services. Financial Impact: The annual cost of the contract is $42,800. Sufficient appropriation is available in the Finance Department and West Orange County Water Board Fund (business unit 10035205 and 50885101) for year one of the contract (Fiscal Year 2013/14). The remaining two years of the contract will be budgeted in FY 2014/14 and FY 2014/15. The total three year contract equals $128,400. Recommended Action: Approve and authorize the Mayor and City Clerk to execute the "Professional Service Contract Between the City of Huntington Beach and Vavrinek, Trine, Day & Co., LLP, for Audit Services." Alternative Action(s): Do not approve the recommendation and direct staff accordingly. Analysis: The City of Huntington Beach is required by Charter to arrange for an independent audit of its financial statements each year. This contract is for a financial audit of all funds of the City's reporting entity, a Single Audit Report of the City's federal grant programs, an AB 2766 Audit relating to the City's Air Quality Fund, and an audit of the West Orange County Water Board (WOCWB), a fiduciary fund of the City of Huntington Beach. The City Council will also receive a management letter that will detail recommendations to improve the City's control and financial management. The audit is to be performed with auditing standards generally accepted in the United States and Government Auditing Standards issued by the Comptroller of the United States. Staff sent out a Request for Proposals (RFP) for audit services to prospective independent auditors who had requested to be on a bidders' list or were listed on the California Society of Municipal Finance Officers' website. In addition, the RFP was posted on the City's website. Seven proposals were received. The auditing firms were asked to submit cost proposals for fiscal years ending September 30, 2013, 2014, and 2015. Item 9. - I HB -92- Dept. ID FN 13-016 Page 2 of 2 Meeting Date: 11/4/2013 Below is a summary of the total base fee for the three years: Audit Firms Year 1 Year 2 Year 3 Total Lance, Soll & Lunghard, LLP $43,848 $43,848 $43,848 $131,544 Macias Gini & O'Connell LLP $64,333 $64,333 $65,520 $194,186 Patel & Harshwall LLP $34,750 $34,750 $34,750 $104,250 Pun & McGeady LLP $50,000 $50,000 $50,000 $150,000 Vasquez &Company LLP $52,000 $53,560 $55,166 $160,726 Vavrinek,Trine, Day&Co., LLP* $42,800 $42,800 $42,800 $128,400 White Nelson Diehl Evans LLP $53,300 $54,700 $56,100 $164,100 VTD's cost proposal of $128,400 consists of $113,430 to be charged to the Finance Department (Business Unit 10035205) and $14,970 to the West Orange County Water Board (Business Unit 50885101). Staff analyzed and reviewed all seven proposals based on a variety of factors including the firm's references, responsiveness to the RFP, qualifications in performing audits for governmental entities of similar size and scope, other relevant experience, and resumes of key staff to be assigned on the engagement. Staff is recommending Vavrinek, Trine, Day & Company, LLP as the most qualified firm to perform auditing services for the City of Huntington Beach given the size and complexity of the City's finances including its enterprise funds and operations, fiduciary funds including the former redevelopment agency funds and accounts, federal grants and programs, outstanding bond debt, and overall financial structure. Environmental Status: NIA Strategic Plan Goal: Improve long-term financial sustainability Attachment(s): 1. Professional Service Agreement with Vavrinek, Trine, Day & Company, LLP to perform an audit of all funds of the City's reporting entity. 2. Certificate of Insurance. 3. Bid Result Export. HB -93- Item 9. - 2 ATTACHMENT # 1 PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND VAVRINEK, TRINE, DAY& CO., LLP FOR CITY AUDIT SERVICES Table of Contents 1 Scope of Services......................................................................................................1 2 City Staff Assistance..........................................:.....................................................2 3 Term;Time of Performance.....................................................................................2 4 Compensation...........................................................................................................2 5 Extra Work...............................................................................................................2 6 Method of Payment..................................................................................................3 7 Disposition of Plans, Estimates and Other Documents ...........................................3 8 Hold Harmless .........................................................................................................3 9 Professional Liability Insurance.............................................................................4 10 Certificate of Insurance............................................................................................5 11 Independent Contractor............................................................................................6 12 Termination of Agreement.......................................................................................6 13 Assignment and Delegation......................................................................................6 14 Copyrights/Patents...................................................................................................7 15 City Employees and Officials..................................................................................7 16 Notices................................................ ...................................... 17 Consent....................................................................................................................8 18 Modification.............................................................................................................8 19 Section Headings .....................................................................................................8 20 Interpretation of this Agreement..............................................................................8 21 Duplicate Original....................................................................................................9 22 Immigration...............................................................................................................9 23 Legal Services Subcontracting Prohibited................................................................9 24 Attorney's Fees..........................................................................................................10 25 Survival.....................................................................................................................10 26 Governing Law.........................................................................................................10 27 Signatories.................................................................................................................10 28 Entirety......................................................................................................................10 29 Effective Date.................................................................................I I a PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND VAVRINEK,TRINE,DAY&CO.,LLP FOR CITY AUDIT SERVICES THIS AGREEMENT ("Agreement") is made and entered into by and between the City of Huntington Beach, a municipal corporation of the State of California, hereinafter 4 referred to as "CITY, and Vavrinek, Trine, Day & Co., LLP, a Limited Liability Partnership hereinafter referred to as"CONSULTANT." WHEREAS, CITY desires to engage the services of a consultant to provide audit services; and Pursuant to documentation on file in the office of the City Clerk,the provisions of the Huntington Beach Municipal Code, Chapter 3.03, relating to procurement of professional service contracts have been complied with;and CONSULTANT has been selected to perform these services, NOW,THEREFORE,it is agreed by CITY and CONSULTANT as follows: 1. SCOPE OF SERVICES CONSULTANT shall provide all services as described in Exhibit "A," which is attached hereto and incorporated into this Agreement by this reference. These services shall sometimes hereinafter be referred to as the"PROJECT." CONSULTANT hereby designates Kevin T.Pulliam, who shall represent it and be its sole contact and agent in all consultations with CITY during the performance of this Agreement. 13-3959/102085 1 2. CITY STAFF ASSISTANCE CITY shall assign a staff coordinator to work directly with CONSULTANT in the performance of this Agreement. 3. TERM:TIME OF PERFORMANCE Time is of the essence of this Agreement. The services of CONSULTANT are to commence on 0V (the "Commencement Date"). This Agreement shall automatically terminate three (3) years from the Commencement Date, unless extended or sooner terminated as provided herein. All tasks specified in Exhibit "A" shall be completed no later than three (3)years from the Commencement Date. The time for performance of the tasks identified in Exhibit "A" are generally to be shown in Exhibit 66A." This schedule may be amended to benefit the PROJECT if mutually agreed to in writing by CITY and CONSULTANT. In the event the Commencement Date precedes the Effective Date, CONSULTANT shall be bound by all terms and conditions as provided herein. 4. COMPENSATION In consideration of the performance of the services described herein, CITY agrees to pay CONSULTANT on a time and materials basis at the rates specified in Exhibit "B," which is attached hereto and incorporated by reference into this Agreement, a fee,including all costs and expenses,not to exceed One Hundred Twenty-eight Thousand and Four Hundred Dollars($128,400.). 5. EXTRA WORK In the event CITY requires additional services not included in Exhibit "A1t or changes in the scope of services described in Exhibit "A," CONSULTANT will 13-3958/102085 2 undertake such work only after receiving written authorization from CITY. Additional compensation for such extra work shall be allowed only if the prior written approval of CITY is obtained. 6. METHOD OF PAYMENT CONSULTANT shall be paid pursuant to the terms of Exhibit"E." 7. DISPOSITION OF PLANS ESTIMATES AND OTHER DOCUMENTS CONSULTANT agrees that title to all materials prepared hereunder, including, without limitation, all original drawings, designs, reports, both field and office notices, calculations, computer code, language, date or programs, maps, memoranda, letters and other documents, shall belong to CITY, and CONSULTANT shall turn these materials over to CITY upon expiration or termination of this Agreement or upon PROJECT completion, whichever shall occur first. These materials may be used by CITY as it sees fit. The provisions noted above do not apply to audit documentation and/or audit working papers. Copies of the audit documentation and/or audit working papers shall be available to CITY even subsequent to the termination of this Agreement, provided such disclosure does not undermine the independence or the validity of the audit process. 8. HOLD HARMLESS CONSULTANT hereby agrees to protect, defend, indemnify and hold harmless CITY, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without lnnitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with CONSULTANT's (or CONSULTANT's subcontractors, if any) negligent (or alleged 13-3958/102085 3 negligent) performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement by CONSULTANT, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of CITY. CONSULTANT will conduct all defense at its sole cost and expense and CITY shall approve selection of CONSULTANT's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by CONSULTANT. 9. PROFESSIONAL LIABILITY INSURANCE CONSULTANT shall obtain and fiunish to CITY a professional liability insurance policy covering the work performed by it hereunder. This policy shall provide coverage for CONSULTANT's professional liability in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and in the aggregate. The above- mentioned insurance shall not contain a self-insured retention without the express written consent of CITY; however, an insurance policy "deductible" of Ten Thousand Dollars ($10,000.00) or less is permitted. A claims-made policy shall be acceptable if the policy further provides that: A. The policy retroactive date coincides with or precedes the initiation of the scope of work (including subsequent policies purchased as renewals or replacements). B. CONSULTANT shall notify CITY of circumstances or incidents that might give rise to future claims. 13-3958/102085 4 CONSULTANT will make every effort to maintain similar insurance during the required extended period of coverage following PROJECT completion. If insurance is terminated for any reason, CONSULTANT agrees to purchase an extended reporting provision of at least two (2) years to report claims arising from work performed in connection with this Agreement. If CONSULTANT fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the CITY with required proof that insurance has been procured and is in force and paid for,the CITY shall have the right, at the CITY's election, to forthwith terminate this Agreement. Such termination shall not affect CONSULTANT's right to be paid for its time and materials expended prior to notification of termination. CONSULTANT waives the right to receive compensation and agrees to indemnify the CITY for any work performed prior to approval of insurance by the CITY. 10. CERTIFICATE OF INSURANCE Prior to commencing performance of the work hereunder, CONSULTANT shall furnish to CITY a certificate of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverage as required by this Agreement;the certificate shall: A. provide the name and policy number of each carrier and policy; B. state that the policy is currently in force;and C. promise that such policy shall not be suspended,voided or canceled by either party, reduced in coverage or in limits except after thirty 13-3958/102085 5 (30)days' prior written notice; however,ten(10)days' prior written notice in the event of cancellation for nonpayment of premium. CONSULTANT shall maintain the foregoing insurance coverage in force until the work under this Agreement is fully completed and accepted by CITY. The requirement for carrying the foregoing insurance coverage shall not derogate from CONSULTANT's defense,hold harmless and indemnification obligations as set forth in this Agreement. CITY or its representative shall at all times have the right to demand the original or a copy of the policy of insurance. CONSULTANT shall pay, in a prompt and timely manner,the premiums on the insurance hereinabove required. 11. INDEPENDENT CONTRACTOR CONSULTANT is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of CITY. CONSULTANT shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for CONSULTANT and its officers, agents and employees and all business licenses, if any, in connection with the PROJECT and/or the services to be performed hereunder. 12. TERMINATION OF AGREEMENT All work required hereunder shall be performed in a good and workmanlike manner. CITY may terminate CONSULTANT's services hereunder at any time with or without cause, and whether or not the PROJECT is fully complete. Any termination of this Agreement by CITY shall be made in writing, notice of which shall be delivered to CONSULTANT as provided herein. In the event of termination, all finished and 13-3958/102085 6 unfinished documents, exhibits, reports and evidence shall,at the option of CITY, become its property and shall be promptly delivered to it by CONSULTANT. The provisions noted above do not apply to audit documentation and/or audit working papers. Copies of the audit documentation and/or audit working papers shall be available to CITY even subsequent to the termination of this Agreement, provided such disclosure does not undermine the independence or the validity of the audit process. 13. ASSIGNMENT AND DELEGATION This Agreement is a personal service contract and the work hereunder shall not be assigned, delegated or subcontracted by CONSULTANT to any other person or entity without the prior express written consent of CITY. If an assignment, delegation or subcontract is approved, all approved assignees, delegates and subconsultants must satisfy the insurance requirements as set forth in Sections 9 and 10 hereinabove. 14. COPYRIGHTSMATENTS CITY shall own all rights to any patent or copyright on any work, item or material produced as a result of this Agreement. 15. CITY EMPLOYEES AND OFFICIALS CONSULTANT shall employ no CITY official nor any regular CITY employee in the work performed pursuant to this Agreement. No officer or employee of CITY shall have any financial interest in this Agreement in violation of the applicable provisions of the California Government Code. 16. NOTICES Any notices, certificates, or other communications hereunder shall be given either by personal delivery to CONSULTANT`s agent (as designated in Section 1 13-3958/102085 7 hereinabove)or to CITY as the situation shall warrant,or by enclosing the same in a sealed envelope,postage prepaid, and depositing the same in the United States Postal Service, to the addresses specified below. CITY and CONSULTANT may designate different addresses to which subsequent notices,certificates or other communications will be sent*by notifying the other party via personal delivery, a reputable overnight carrier or U. S. certified mail-return receipt requested: TO CITY: TO CONSULTANT: City of Huntington Beach Vavrinek,Trine,Day&Co.,LLP ATTN: Dahle Bulosan Kevin T.Pulliam,CPA 2000 Main Street 25231 Paseo De Alicia, Ste. 100 Huntington Beach,CA 92648 Laguna Hills,CA 92653 17. CONSENT When CITY's consentlapproval is required under this Agreement, its consentlapproval for one transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence of the same or any other transaction or event. 18. MODIFICATION No waiver or modification of any language in this Agreement shall be valid unless in writing and duly executed by both parties. 19. SECTION HEADINGS The titles,captions,section,paragraph acid subject headings,and descriptive phrases at the beginning of the various sections in this Agreement are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded from such provisions, and do not interpret, define, limit or 13-39581102085 8 - describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Agreement. 20. INTERPRETATION OF THIS AGREEMENr The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. If any provision of this Agreement is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Agreement. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Agreement, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as to require the commission of any act contrary to law,and wherever there is any conflict between any provision contained herein and any present or future statute, law,ordinance or regulation contrary to which the parties have no right to contract, then the Iatter shall prevail, and the provision of this Agreement which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. 21. DUPLICATE ORIGINAL The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals,each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who has signed it. 13-3958/102085 9 22. IMMIGRATION CONSULTANT shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the United States Code regarding employment verification. 23. LEGAL SERVICES SUBCONTRACTING PROHIBITED CONSULTANT and CITY agree that CITY is not liable for payment of any subcontractor work involving legal services, and that such legal services are expressly outside the scope of services contemplated hereunder. CONSULTANT understands that pursuant to Huntington Beach City Charter Section 309, the City Attorney is the exclusive legal counsel for CITY; and CITY shall not be liable for payment of any legal services expenses incurred by CONSULTANT. 24. ATTORNEY'S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Agreement or to secure the performance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the non-prevailing party. 25. SURVIVAL Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement,shall so survive. 26. GOVERNING LAW This Agreement shall be governed and construed in accordance with the laws of the State of California. 13-3958/102085 10 27. SIGNATORIES Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any injuries or damages to CITY in the event that such authority or power is not,in fact,held by the signatory or is withdrawn. 28. ENTIRETY The parties acknowledge and agree that they are entering into this Agreement fieely and voluntarily following extensive arm's length negotiation, and that each has had the opportunity to consult with legal counsel prior to executing this Agreement. The parties also acknowledge and agree that no representations,inducements, promises, agreements or warranties, oral or otherwise, have been made by that party or anyone acting on that party's behalf, which are not embodied in this Agreement, and that that party has not executed this Agreement in reliance on any representation, inducement, promise, agreement, warranty, fact or circumstance not expressly set forth in this Agreement. This Agreement, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Agreement,and supersede all prior understandings and agreements whether oral or in writing between the parties respecting the subject matter hereof. 29. EFFECTIVE DATE This Agreement shall be effective on the date of'its approval by the City Attorney. This Agreement shall expire when terminated as provided herein. 13-39581102085 11 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. CONSULTANT, CITY OF HUNTINGTON BEACH, VAVRINEK,TRINE,DAY&CO.,LLP a muni ' al corporation of the State of California By: - f A. r !� Mayor - print name ITS: (circle one)Chairman/PresidentNice President QP 4?(-JA AND City Clerlc V 1lh Ij3 By. INIT TED AND APPR VED: print name 41A� ITS: (circle one)Secretary/Chief Financial Officer/Asst. irector of Finance Secretary-Treasurer REV D APPROVED: Ci a er APPROVED AS TO FORM: (tjCiAttorney 13-3958/102085 12 EXHIBIT "A" A. STATEMENT OF WORK: (Narrative of work to be performed) Stage 1, Planning VTD will meet with key staff to plan the audit services for the year. These meetings will discuss all audit issues and the proposed interim work plan. During this phase, we will accomplish: • Identifying the key personnel and contacts in the Finance Department and other departments. • Identify the City's significant classes of transactions and business processes. • Obtain an understanding of the risk areas. • Develop an understanding of unusual transactions or events that have occurred during fiscal year. • Formalizing logistics. • Finalizing the timeframes for interim fieldwork. Stage 2, Risk Assessment Based upon the information obtained in the planning meetings VTD will perform a risk assessment as required by Statements on Auditing Standards (SAS)to be used in the preparation of the overall audit plan. As part of this risk assessment we will perform the,following: 1. Obtain an understanding of the entity and its environment and its risks. 2. Obtain an understanding of the entity's internal controls. 3. Preliminary analytical review; determination of preliminary materiality levels. 4. Analysis of known misstatements, if any. EXHIBIT A 5. Consideration of risk of material misstatement at the individual account balance, class of transactions and disclosure level. 6. Assessing the risks of material misstatement at both the financial statement and relevant assertion levels. Stage 3, Preparation of the overall audit plan Once the planning and risk assessment process are complete an overall audit plan will be prepared. The plan will specify each audit task, staffing assignments, timelines, and due dates. The plan will also break down the work assignments between interim and final audit timelines. The audit plan will include the transaction cycles which have been selected for internal control testing and those for which only the detailed walk through will be performed. Once the audit plan has been completed the prepared by client(PBC) requirements and the responsibilities of the auditor document will be prepared. The document listing will be detailed by specific task and will include the due dates and names of the persons responsible for each task. Stage 4, the Interim Audit The specific weeks will be determined during the planning meeting and preparation of the audit plan process. Our interim work will include the following: „ We will obtain an understanding of the City's internal control structure starting with: 1. Defining the City's objectives and strategies and related business risks. 2. Obtaining an understanding of the City's internal control environment (tone at the top): EXHIBIT A • Communication and enforcement of integrity and ethical values • Commitment to competence • Participation of those charged with governance • Management's philosophy and operation style • Organizational structure • Assignment of authority and responsibility • Human resource policies and practices 3. The City's risk assessment process. 4. Internal control communication process. 5. Internal control monitoring process. 6. Any industry, regulatory or other factors. This understanding will be accomplished through the use o£ 1. Inquiry of management and others within the City. 2. Observation and inspection. 3. Review of external information from rating agencies, and other external sources. We will also obtain an understanding of the design and implementation of the financial reporting system to understand the follow of information for: 1. Each class of transactions that is significant to the financial statements. 2. The procedures within both automated and manual systems, by which those transactions are initiated, authorized, recorded, processed, and reported in the financial statements. 3. The related accounting records, whether in electronic or manual supporting information, and EXHIBIT A specific accounts in the financial statements involved in initiating, authorizing, recording, processing and reporting transactions. 4. How the information systems captures events and conditions other than classes of transactions that are significant to the financial statements. 5. The financial reporting process used to prepare the City's financial statements, including significant accounting estimates and disclosures. Our focus will also involve: • Understanding and documenting the financial reporting process. • Documenting information systems and related computerized data processing controls. • Identifying the flow of information and internal control involved in various key processes including, investment management, procurement, disbursements, payroll, treasury operations, debt/capital management, cash receipts and utility billing. To accomplish these tasks we will use client accounting manuals, inquiry, observation, checklists and internal control questionnaires. During the interim timeframe each of the significant internal control systems will be evaluated to obtain sufficient knowledge of the design and implementation of key controls and to determine if a test of controls will result in audit efficiencies. • Planning of the Single Audit including the distribution of questionnaires, conducting inquiries, reviewing documentation and determining major programs. In addition, in order to assist the City in achieving its Single Audit reporting timeline, we will begin conducting fieldwork for those federal programs identified as major as a result of our preliminary risk assessment. • Identifying laws and regulations that are applicable to the City of Huntington Beach and its component units. To accomplish these tasks we will use client documents, inquiry, observation, checklists and internal control questionnaires. EXHIBIT A •Providing the parameters required to commence analyzing financial fluctuations in the operating results of the City of Huntington Beach. Formulating audit procedures and related audit programs that will be used during the final segment of the audit process. Testing the effectiveness of internal controls will be accomplished for the significant internal controls systems for which we plan to place reliance. To gain efficiencies our control testing will be structured so that it can be used for each of the audits we will perform. Other areas to be completed at the interim audit include SAS No. 99 interviews and documentation. Discuss workable solutions for potential findings that have been identified and communicated to the City during the audit process Stage 5, the Final Audit We will commence our final fieldwork as soon as City of Huntington Beach has sufficiently closed their accounting records. During this phase, we will perform substantive audit procedures on the year-end statement of net assets and fund balances, revenue and expenditure/expense accounts. We will use a variety of audit procedures which may include outside confirmations, statistical sampling, and detailed testing of schedules, analytical review, inquiry, and observation. Stage 6, the Reporting Phase At the end of the audit process we will meet with key staff to cover the following: • Discuss improvements for subsequent years audit plan, • Meet with the City to present the results of the audit, • Communicate with those charged with Governance. EXHIBIT A B. CONSULTANT'S DUTIES AND RESPONSIBILITIES: As required by the request for proposal our audit plan covers the engagements for: • All funds of the City as included in the Comprehensive Annual Financial Report (CAFR) • Single Audit in accordance with OMB Circular A-133 • Issuance of a management letter, as applicable • Appropriation Limit Calculation • AB 2766 Report • West Orange County Water Board Audit Report Our audit plan for each of the fiscal years involves six (6) stages for each audit. These stages are: Stage 1, Planning Stage 2, Risk Assessment Stage 3, Preparation of the overall audit plan Stage 4, Conducting the Interim Audit Stage 5, Conducting the Final Audit Stage 6, Reporting C. CITY'S DUTIES AND RESPONSIBILITIES: Communicate with Consultant on an as-needed basis and provide requested documentation to consultant in a timely manner. D. WORK PROGRAM/PROJECT SCHEDULE: TBD EXHIBIT A EXHIBIT `B" Payment Schedule (Hourly Payment) A. Hourly Rate CONSULTANT'S fees for such services shall be based upon the following hourly rate and cost schedule: Hourly Rates: Partner $ 225S 225 S 22; Mana_er 185 185 1 ST ,Supervisor 1 6 5 165 165 senior 120 120 120 Staff 90 90 90 Clerical 65 65 65. B. Travel. Charges for time during travel are not reimbursable C. Billing 1. All billing shall be done monthly in fifteen (15) minute increments and matched to an appropriate breakdown of the time that was taken to perform that work and who performed it. 2. Each month's bill should include a total to date. That total should provide, at a glance, the total fees and costs incurred to date for the project. 3. A copy of memoranda, letters, reports, calculations and other documentation prepared by CONSULTANT may be required to be submitted to CITY to demonstrate progress toward completion of tasks. In the event CITY rejects or has comments on any such product, CITY shall identify specific requirements for satisfactory completion. 4. CONSULTANT shall submit to CITY an invoice for each monthly payment due. Such invoice shall: A) Reference this Agreement; B) Describe the services performed; C) Show the total amount of the payment due; D) Include a certification by a principal member of CONSULTANT's firm that the work has been performed in accordance with the provisions of this. Agreement; and E) For all payments include an estimate of the percentage of work completed. Upon submission of any such invoice, if CITY is satisfied that CONSULTANT is making satisfactory progress toward completion of tasks in accordance with this l Agreement, CITY shall approve the invoice, in which event payment shall be made within thirty (30) days of receipt of the invoice by CITY. Such approval shall not be unreasonably withheld. If CITY does not approve an invoice, CITY shall notify CONSULTANT in writing of the reasons for non-approval and the schedule of performance set forth in Exhibit "A" may at the option of CITY be suspended until the parties agree that past performance by CONSULTANT is in, or has been brought into compliance, or until this Agreement has expired or is terminated as provided herein. 5. Any billings for extra work or additional services authorized in advance and in writing by CITY shall be invoiced separately to CITY. Such invoice shall contain all of the information required above, and in addition shall list the hours expended and hourly rate charged for such time. Such invoices shall be approved by CITY if the work performed is in accordance with the extra work or additional services requested, and if CITY is satisfied that the statement of hours worked and costs incurred is accurate. Such approval shall not be unreasonably withheld. Any dispute between the parties concerning payment of such an invoice shall be treated as separate and apart from the ongoing performance of the remainder of this Agreement. 2 EXHIBIT "B" Payment Schedule(Fixed Fee Payment) Service Estimated 2013/14 2014/15 2015/16 2016/15 Hours* Optional Audit of City 288 $30,000 $30,000 $30,000 $30,000 Single Audit 66 $6,310 $6,310 $6,310 $6,310 WOCWB 48 $4,990 $4,990 $4,990 $4,990 Other 16 $1,500 $1,500 $1,500 $1,500 Total 418 $42,800 $42,800 $42,800 $42,800 *Estimated hours are for the 3 year term only. 1. CONSULTANT shall be entitled to monthly progress payments toward the fixed fee set forth herein in accordance with the following progress and payment schedules. 2. Delivery of work product: A copy of every memorandum, letter, report, calculation and other documentation prepared by CONSULTANT shall be submitted to CITY to demonstrate progress toward completion of tasks. In the event CITY rejects or has comments on any such product, CITY shall identify specific requirements for satisfactory completion. 3. CONSULTANT shall submit to CITY an invoice for each monthly progress payment due. Such invoice shall: A) Reference this Agreement; B) Describe the services performed; C) Show the total amount of the payment due; D) Include a certification by a principal member of CONSULTANT's firm that the work has been performed in accordance with the provisions of this Agreement; and E) For all payments include an estimate of the percentage of work completed. Upon submission of any such invoice, if CITY is satisfied that CONSULTANT is making satisfactory progress toward completion of tasks in accordance with this Agreement, CITY shall approve the invoice, in which event payment shall be made within thirty (30) days of receipt of the invoice by CITY. Such approval shall not be unreasonably withheld. If CITY does not approve an invoice, CITY shall.notify CONSULTANT in writing of the reasons for non-approval and the schedule of performance set forth in Exhibit "A" may at the option of CITY be suspended until the parties agree that past performance.by CONSULTANT is in, or has been brought into compliance, or until this Agreement has expired or is terminated as provided herein. EXHIBIT B Fixed Fee Payment 4. Any billings for extra work or additional services authorized in advance and in writing by CITY shall be invoiced separately to CITY. Such invoice shall contain all of the information required above, and in addition shall list the hours expended and hourly rate charged for such time. Such invoices shall be approved by CITY if the work performed is in accordance with the extra work or additional services requested, and if CITY is satisfied that the statement of hours worked and costs incurred is accurate. Such approval shall not be unreasonably withheld. Any dispute between the parties concerning payment of such an invoice shall be treated as separate and apart from the ongoing performance of the remainder of this Agreement. EXHIBIT B Fixed Fee Payment IACH E NT Z'm"' /�C®BD DATE(MMIDD/YYYY) /`j /� CERTIFICATE ®F LIABILITY INSURANCE 10/22/2013 PRODUCER (847)385-6800 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION Lemme Insurance Group, Inc. ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR 111 W. Campbell Street ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. 4th Floor Arlington Heights, IL 60005 INSURERS AFFORDING COVERAGE NAIC# INSURED INSURERA: Lexington Insurance Company 19437 Vavrinek,Trine, Day&Co., LLP INSURERB: Aspen Specialty Insurance Company 10717 8270 Aspen St. INSURERC: Rancho Cucamonga, CA 91730 INSURERD: INSURER E: COVERAGES THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED.NOTWITHSTANDING ANY REQUIREMENT,TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN,THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR DD' POLICYEFFECTIVE POLICY EXPIRATION L POLICY NUMBER LIMITS GENERAL LIABILITY EACH OCCURRENCE $ DAMAGE TO RENTED COMMERCIALGENERALLIABILITY PREMISES Eeoccurence $ CLAIMS MADE OCCUR MED EXP(Any one person) $ PERSONAL&ADV INJURY $ GENERAL AGGREGATE $ GEN'L AGGREGATE LI MIT APPLIES PER: PRODUCTS-COMP/OPAGG $ POLICY F PRO LOC AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT ANYAUTO (Ea accident) $ ALL OWNED AUTOS BODILY INJURY SCHEDULED AUTOS (Per person) $ HIRED AUTOS BODILY INJURY NON-OWNEDAUTOS (Per accident) $ PROPERTYDAMAGE $ (Per accident) GARAGE LIABILITY AUTO ONLY-EA ACCIDENT $ e ANYAUTO OTHERTHAN EAACC $ AUTO ONLY: AGG $ EXCESSIUMBRELLA LIABILITY EACH OCCURRENCE $ OCCUR F_jCLAIMS MADE AGGREGATE $ DEDUCTIBLE $ RETENTION $ $ WC STATU- OTH- WORKERS COMPENSATION AND T RYLIMIT, ER EMPLOYERS'LIABILITY E.L.EACH ACCIDENT $ ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? E.L.DISEASE-EA EMPLOYEE $ Des Wascr be under SPECIAL PROVISIONS below E.L.DISEASE-POLICY LIMIT $ OTHER Professional Liability 026030238/LXA9ALH13 01/01/13 01/01/14 $10,000,000 Each Claim $12,500,000 Annual Aggregate DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/EXCLUSIONS ADDED BY ENDORSEMENT/SPECIAL PROVISIONS APPROV,EED AS O FORM J FER CG TH CityAttorney B ike Vigli a De utyCityAttorney CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION City of Huntington Beach DATE THEREOF,THE ISSUING INSURER WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT,BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER,ITS AGENTS OR REPRESENTATIVES. AUTHORIZED REPRESENTATIVE Mi ACORD 25(2001108) ©ACORD CORPORATION 1988 IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon. ACORD 25(2001/08) ATTAC H M E N T #3 Bid Results for Project Audit Services(2013-0617) Issued on 06/17/2013 Bid Due on July 29,2013 4:00 PM(Pacific) Exported on 09/18/2013 Bidder Info Vendor Name City State Respondee Respondee Title Respondee Phone Respondee Email Bid Submit Date Vavrinek,Trine, Day&Co., LLP Rancho Cucamonga CA Roger Alfaro Partner 909-466-4410 Ext. ralfaro@vtdcpa.com 7/29/2013 10:25 White Nelson Diehl Evans LLP Irvine CA Nitin P. Patel Partner 714-978-1300 Ext. npatel@wndecpa.com 7/26/2013 9:58 Macias Gini&O'Connell LLP Sacramento CA Katherine V. Lai Partner 949-296-4304 Ext. Klai@mgocpa.com 7/29/2013 12:18 Patel &Harshwal LLP Oakland CA Sanwar Harshwal Managing Partner 858-939-0017 Ext. sanwar@harshwal.com 7/16/2013 8:56 Pun &McGeady LLP Irvine CA Kenneth H. Pun,CPA,CGMA Managing Partner 949-777-8801 Ext. kpun@pm-Ilp.com 7/29/2013 15:47 LSL CPAs Brea CA Bryan S.Gruber Partner 714-672-0022 Ext. bryan.gruber@lslcpas.com 7/26/2013 11:00 Vasquez&Company LLP Los Angeles CA Donald Nino Supervisor 213-873-1735 Ext. d_nino@vasquezcpa.com 7/25/2013 15:51 �77 IF CD N 00 ® City ®f Huntington Beach =� 2000 Main Street • Huntington Beach, CA 92648 OFFICE OF THE CITY CLERIC JOAN L. FLYNN ® CITY CLERK November 7, 2013 Vavrinek, Trine, Day & Co., LLP Attn: Kevin T. Pulliam, CPA 25231 Paseo De Alicia, Ste. 100 Laguna Hills, CA 92653 Dear Mr. Pulliam: Enclosed for your records is a copy of"Professional Services Contract Between the City of Huntington Beach and Vavrinek, Trine, Day & Co., LLP for City Audit Services." Sincerely, C- JoV L. Flynn City Clerk JF:pe Enclosure Sister Cities: Anjo, Japan • Waitakere, New Zealand (Telephone:714-536.5227)