HomeMy WebLinkAboutC-2529SERVICE AGREEMENT
FINANCIAL AUDIT SERVICES
This Service Agreement (hereinafter "Agreement ") is made and entered into on this 10 0day of
June, 2010 by and between the CITY OF ARCADIA, a charter city organized under the
Constitution and laws of the State of California with its principal place of business at 240 West
Huntington Drive, Arcadia, California 91066 -6021 (hereinafter "City "), and CAPORICCI &
LARSON, Inc. with its principal place of business at 5 Park Plaza, Suite 700, Irvine, CA 92614
(hereinafter "Auditor "). City and Auditor may be individually referred to as "Party" and
collectively referred to herein as "Parties."
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A. The City requires professional audit services to be performed at or in connection with the
audit of the City's financial statements.
B. The Auditor has represented to City that the Auditor is qualified to perform said services
and has submitted a proposal to City for same.
C. The City desires to have the Auditor perform said services on the terms and conditions set
forth herein for a period of one (1) year, expiring with the completion of fiscal year 2009 -10 audit service,
with options to extend for four (4) additional years.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND
CONDITIONS IDENTIFIED HEREIN, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. SCOPE OF SERVICES. Auditor shall perform the services described in Exhibit "A," attached
hereto and incorporated herein by reference, in accordance with the terms and conditions
contained in this Agreement.
2. PAYMENT.
3(A). Billing. In order to request payment, Auditor shall submit invoices to City
identifying the services performed and the charges therefor. City shall make
payments to Auditor for services which are performed in accordance with this
Agreement, to the satisfaction of City.
3(B). "Not to Exceed" Compensation. The compensation payable to Auditor for the
services identified in Exhibit "A" shall not exceed $37,600. Auditor shall not perform
any services beyond the services identified in Exhibit "A" without prior written
authorization from City's Authorized Representative.
3(C). Auditor's Failure to Perform. In the event that Auditor performs services which do
not comply with the requirements of this Agreement, Auditor shall, upon receipt of
written notice from City, re- perform the services (without additional compensation
to Auditor). If Auditor's failure to perform in accordance with this Agreement
causes damages to City, Auditor shall reimburse City for the damages incurred
(which may be charged as an offset to Auditor's payment).
CITY OF ARCADIA
SERVICE AGREEMENT
FINANCIAL AUDIT SERVICES
Page 2
3. AUTHORIZED REPRESENTATIVES.
3(A). Auditor's Authorized Representative. Auditor understands that, in entering into
this Agreement, City has relied upon Auditor's ability to perform in accordance with
its representations regarding the qualifications of Auditor (including the
qualifications of its Authorized Representative, its personnel, and its subconsultants,
if any). Therefore, Auditor shall not replace its Authorized Representative without
the prior written consent of City. All services under this Agreement shall be
performed by, or under the direct supervision of, Consultant's Authorized
Representative.
3(B). City's Authorized Representative. For the performance of services under this
Agreement, Auditor shall take direction from City's Authorized Representative,
Emily Lin, Accounting Manager, unless otherwise designated in writing by City's
Authorized Representative or the City Manager.
4. INFORMATION AND DOCUMENTATION.
4(A). Information from City. City has made an effort to provide Auditor with all
information necessary for Auditor's performance of services under this Agreement.
If Auditor believes additional information is required, Auditor shall promptly notify
City, and City will provide to Auditor all relevant non - privileged information in
City's possession.
4(B). Auditor's Accounting Records.
Auditor shall maintain all documents that support auditor's costs and expenses
related to this Agreement, including personnel, subconsultant invoices and
payments, and reimbursable expenses for a period of no less than 4 years. These
documents shall be made available to City within a reasonable time after City's
request, during normal business hours.
4(C). Ownership of Work Product.
All workpapers prepared by Auditor (including its employees and subconsultants)
for this Agreement ( "work product "), whether complete or in progress, are the
properties of the Auditor. Auditor shall not reveal the work product, or make it
available, to any third party without the prior written consent of the City.
CITY OF ARCADIA
SERVICE AGREEMENT
FINANCIAL AUDIT SERVICES
Page 3
5. RELATIONSHIP BETWEEN THE PARTIES. Auditor is, and at all times shall remain, an
independent contractor solely responsible for all acts of its employees, agents, or
subconsultants, including any negligent acts or omissions. Auditor is not City's agent, and
shall have no authority to act on behalf of City, or to bind City to any obligation whatsoever,
unless City provides prior written authorization to Auditor. Auditor is not an officer or
employee of City, and Auditor shall not be entitled to any benefit, right, or compensation other
than that provided in this Agreement.
6. CONFLICTS OF INTEREST PROHIBITED. Auditor (including its employees, agents, and
subconsultants) shall not maintain or acquire any direct or indirect interest that conflicts with
the performance of this Agreement. Auditor shall comply with all requirements of the Political
Reform Act (California Government Code sections 81000, et seq.) and other laws relating to
conflicts of interest, including: (a) Auditor shall not make or participate in a decision made by
City if it is reasonably foreseeable that the decision may have a material effect on Auditor's
economic interest, and (b) if required by law, Auditor shall file financial disclosure forms with
the City Clerk. If Auditor maintains or acquires a conflicting interest, any contract with City
(including this Agreement) involving Auditor's conflicting interest may be terminated by the
City.
7. NONDISCRIMINATION. Auditor shall not discriminate against any person related to the
performance under this Agreement (including any employee or applicant) because of race,
color, religious creed, national origin, physical disability, mental disability, medical condition,
marital status, sexual orientation, or sex.
8. COMPLIANCE WITH LAW AND STANDARD OF CARE. Auditor shall comply with all
applicable legal requirements including all federal, state, and local laws (including ordinances
and resolutions), whether or not said laws are expressly stated in this Agreement. Auditor
shall perform services under this Agreement using a standard of care equal to, or greater than,
the degree of skill and diligence ordinarily used by reputable professionals, with a level of
experience and training similar to Auditor, performing under circumstances similar to those
required by this Agreement.
9. BUSINESS LICENSE. Auditor shall apply for and pay the business tax and registration tax for
a business license, in accordance with Arcadia Municipal Code.
CITY OF ARCADIA
SERVICE AGREEMENT
FINANCIAL AUDIT SERVICES
Page 4
10. INSURANCE. Auditor shall, throughout the duration of this Agreement, maintain insurance
to cover Auditor (including its agents, representatives, subconsultants, and employees) in
connection with the performance of services under this Agreement. This Agreement
identifies the minimum insurance levels with which Auditor shall comply; however, the
minimum insurance levels shall not relieve Auditor of any other performance responsibilities
under this Agreement (including the indemnity requirements), and Auditor may carry, at its
own expense, any additional insurance it deems necessary or prudent. Concurrently with the
execution of this Agreement by Auditor, and prior to the commencement of any services,
Auditor shall furnish written proof of insurance (certificates and endorsements), in a form
acceptable to City. Auditor shall provide substitute written proof of insurance no later than
30 days prior to the expiration date of any insurance policy required by this Agreement.
10(A). Minimum Insurance Levels. Auditor shall maintain insurance at the following
minimum levels:
10(A)(1). Commercial General Liability coverage in an amount not less than
$1,000,000 general aggregate and $1,000,000 per occurrence for general
liability, bodily injury, personal injury, and property damage.
10(A)(2). Automobile Liability coverage in an amount not less than $1,000,000
per accident for bodily injury and property damage.
10(A)(3). Workers' Compensation coverage as required by the State of
California.
10(A)(4). Professional Liability coverage for damages that may be the result of
errors, omissions, or negligent acts of Auditor in an amount not less
than $1,000,000 per claim.
CITY OF ARCADIA
SERVICE AGREEMENT
FINANCIAL AUDIT SERVICES
Page 5
10(B). Endorsements. The insurance policies shall be endorsed as follows:
10(B)(1). For the commercial general liability insurance, City (including its
elected officials, employees, and agents) shall be named as additional
insured.
10(B)(2). Auditor's insurance is primary to any other insurance available to City
with respect to any claim arising out of this Agreement. Any insurance
maintained by City shall be excess of Auditor's insurance and shall not
contribute with it.
10(B)(3). Auditor's insurance will not be canceled, limited, or allowed to expire
without renewal until after 30 days written notice has been given to
City.
10(C). Qualifications of Insurers. All insurance companies providing coverage to
Auditor shall be insurance organizations authorized by the Insurance
Commissioner of the State of California to transact the business of insurance in
the State of California.
11. INDEMNIFICATION. Auditor shall indemnify, hold harmless, and defend City (including
its elected officials, officers, agents and employees) from and against any and all claims
(including all litigation, demands, damages, liabilities, costs, and expenses, and including
court costs and attorney's fees) resulting or arising from performance, or failure to perform,
under this Agreement.
12. TERM OF THE AGREEMENT. The term of this Agreement shall commence as the date the
agreement is executed, and shall continue until completion of all services required for the
fiscal year ending June 30, 2010 and in accordance with the timing requirements set forth in
the City's Request for Proposal for financial auditing services dated April 2, 2010. The term
of this agreement includes an option to renew for four subsequent years. This Agreement
may be terminated by either party without cause upon fifteen (15) days written notice. If City
exercises its right to terminate this Agreement in accordance with this paragraph, City shall
pay Auditor for all services satisfactorily performed in accordance with this Agreement,
through and including the date of termination, but not to exceed the payments according to
the rates specified in Exhibit "A" or the maximum amount authorized under paragraph 2 of
this Agreement.
CITY OF ARCADIA
SERVICE AGREEMENT
FINANCIAL AUDIT SERVICES
Page 6
13. DEFAULT. If either party ( "demanding party ") has a good faith belief that the other party
( "defaulting party ") is not complying with the terms of this Agreement, the demanding party
shall give written notice of the default (with reasonable specificity) to the defaulting party,
and demand the default to be cured within ten days of the notice. If: (a) the defaulting party
fails to cure the default within ten days of the notice, or, (b) if more than ten days are
reasonably required to cure the default and the defaulting party fails to give adequate written
assurance of due performance within ten days of the notice, then (c) the demanding party
may terminate this Agreement upon written notice to the defaulting party.
14. NOTICES. All notices required or contemplated by this Agreement shall be in writing and
shall be delivered to the respective party as set forth in this section. Communications shall be
deemed to be effective upon the first to occur of: (a) actual receipt by a party's Authorized
Representative, or (b) actual receipt at the address designated below, or (c) three working
days following deposit in the United States Mail of registered or certified mail sent to the
address designated below. The Authorized Representative of either party may modify their
respective contact information identified in this section by providing notice to the other party.
To: City
Attn: Hue C. Quach
City of Arcadia
240 West Huntington Drive,
Arcadia, CA 91066 -6021
To: Auditor
Attn: Gary Caporicci
Caporicci & Larson, Inc.
5 Park Plaza #700
Irvine, CA 92614
15. HEADINGS. The heading titles for each paragraph of this Agreement are included only as a
guide to the contents and are not to be considered as controlling, enlarging, or restricting the
interpretation of the Agreement.
16. SEVERABILITY. If any term of this Agreement (including any phrase, provision, covenant,
or condition) is held by a court of competent jurisdiction to be invalid or unenforceable, the
Agreement shall be construed as not containing that term, and the remainder of this
Agreement shall remain in full force and effect; provided, however, this paragraph shall not
be applied to the extent that it would result in a frustration of the parties' intent under this
Agreement.
CITY OF ARCADIA
SERVICE AGREEMENT
FINANCIAL AUDIT SERVICES
Page 7
17. GOVERNING LAW, JURISDICTION, AND VENUE. The interpretation, validity, and
enforcement of this Agreement shall be governed by and interpreted in accordance with the
laws of the State of California. Any suit, claim, or legal proceeding of any kind related to this
Agreement shall be filed and heard in a court of competent jurisdiction in the County of Los
Angeles.
18. ATTORNEY'S FEES. In the event any legal action is commenced to enforce this Agreement,
the prevailing party is entitled to reasonable attorney's fees, costs, and expenses incurred.
19. ASSIGNMENT AND DELEGATION. This Agreement, and any portion thereof, shall not
be assigned or transferred, nor shall any of Auditor's duties be delegated, without the written
consent of City. Any attempt to assign or delegate this Agreement without the written
consent of the City shall be void and of no force or effect. A consent by the City to one
assignment shall not be deemed to be a consent to any subsequent assignment.
20. MODIFICATIONS. This Agreement may not be modified orally or in any manner other
than by an agreement in writing signed by both parties.
21. WAIVERS. Waiver of a breach or default under this Agreement shall not constitute a
continuing waiver or a waiver of a subsequent breach of the same or any other provision of
this Agreement.
22. ENTIRE AGREEMENT. This Agreement, including all documents incorporated herein by
reference, comprises the entire integrated understanding between the parties concerning the
services described herein. This Agreement supersedes all prior negotiations, agreements, and
understandings regarding this matter, whether written or oral. The documents incorporated
by reference into this Agreement are complementary; what is called for in one is binding as if
called for in all.
CITY OF ARCADIA
SERVICE AGREEMENT
FINANCIAL AUDIT SERVICES
Page 8
23. SIGNATURES. The individuals executing this Agreement represent and warrant that they
have the right, power, legal capacity, and authority to enter into and to execute this
Agreement on behalf of the respective legal entities of the Auditor and the City. This
Agreement shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns.
IN WITNESS WHEREOF, City and Auditor do hereby agree to the full performance of the terms
set forth herein.
CITY OF ARCADIA AUDITOR
Caporicci & Larson, Inc.
By: By:
Donald Penman Gary C9&ricci
City Manager Principal
Date: (.1 1 4 1y Date:
ATTEST:
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APPROVED AS TO FORM: CONCUR:
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Stephen P. Deitsch Hue C. ch
City Attorney Administrative Services Director
CITY OF ARCADIA
SERVICE AGREEMENT
FINANCIAL AUDIT SERVICES
Page 9
EXHIBIT A
SCOPE OF SERVICES
a. Auditor will perform an audit of all funds of the City of Arcadia. The audit will be
conducted in accordance with auditing standards generally accepted in the United States
of America and Government Auditing Standards, issued by the Comptroller of the
United States.
b. The City's Comprehensive Annual Financial Report (CAFR) will be prepared and word
processed by the Auditor. Auditor will render their auditors' report on the basic
financial statements which will include both Government -Wide Financial Statements and
Fund Financial Statements. Auditor will also apply limited audit procedures to
Management's Discussion and Analysis (MD &A) and required supplementary
information (RSI) required by the Governmental Accounting Standards Board as
mandated by generally accepted auditing standards.
c. Auditor will conduct a financial and compliance audit of the Arcadia Redevelopment
Agency. The compliance audit shall include the provisions of laws and regulations
identified in the Guidelines for Compliance Audits of California Redevelopment
Agencies, issued by the State Controller.
d. When required, Auditor will perform a single audit on the expenditures of federal grants
in accordance with OMB Circular A -133 and render the appropriate audit reports on
Internal Control over Financial Reporting based upon the audit of the City's financial
statements in accordance with Government Auditing Standards and the appropriate
reports on compliance with Requirements Applicable to each Major Program, Internal
Control over Compliance and on the Schedule of Expenditures of Federal Awards in
Accordance with OMB Circular A -133. The single audit report will include appropriate
schedule of expenditures of federal awards, footnotes, findings and questioned costs,
including reportable conditions and material weaknesses, and follow up on prior audit
findings where required.
e. Auditor will prepare a financial report in accordance with the SCAG Guide to the
Transportation Development Act Program and other pertinent state requirements for
inclusion in a separate annual report on Transportation Development Act Funds.
f. Auditor will prepare the annual report of Financial Transactions to the State Controller's
office, also referred to as the State Controller's Report for the City of Arcadia and the
Arcadia Redevelopment Agency.
g. Auditor shall perform agreed -upon auditing procedures pertaining to the City's GANN
Limit (Appropriations Limit) and render a letter annually to the City regarding
compliance.
h. Submit a report on Auditor's examination of the City's financial statements for the fiscal
year which will express an opinion as to the fairness of their presentation in conformity
with generally accepted accounting principles applicable to the various funds of the City,
or state the reasons for any exceptions to said principles. This opinion is in support of the
Comprehensive Annual Financial Report of the City.
L Auditor will identify and evaluate the City's internal control over financial reporting and
report in writing to the City Council any control deficiencies found during the audit that
are considered significant deficiencies and /or material weaknesses based on the
standards and guideline established by Statement on Auditing Standards (SAS) No. 115,
Communicating Internal Control Related Matters Identified in an Audit.
j. Auditor shall communicate with the City Council matters related to the financial
statement audit, in the auditor's professional judgment, significant and relevant to the
governing body, according to the standards and guideline established by Statement on
Auditing Standard (SAS) No. 114, The Auditor's Communication With Those Charged
With Governance
k. Auditor shall provide full report production responsibility of the City's Comprehensive
Annual Financial Report. Single Audit report, Redevelopment Agency and Transit
District Authority Financial Report.
1. Auditor may be consulted throughout the year as an information resource and may be
asked to provide guidance on implementing Federal and State regulations as they may
affect local government accounting.