HomeMy WebLinkAboutMayer Hoffman McCann; 2012-04-10;ASSIGNMENT AND ASSUMPTION AGREEMENT
BETWEEN THE CITY OF CARLSBAD AND DAVIS FARR LLP
FOR AUDITING SERVICES
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Assignment Agreement") is
made and entered into this ~ day of =L.. 2015, by and between the CITY OF
CARLSBAD, a municipal corporation ("City"), Ma r Hoffman McCann, a M1ssoun Professional
Corporation ("Assignor") and Davis Farr LLP, a California Limited Liability Partnership,
("Assignee"), and is made with reference to the following facts:
RECITALS
A. On April 10, 2012, the City and Assignor entered into that certain Professional
Services Agreement for auditing services, (the "Agreement").
B. Paragraph 24 of the Agreement allows Assignor to assign rights and obligations
under the Agreement upon written approval of the City.
C. Assignor desires to assign its interest in the Agreement to Assignee. Further,
Assignee desires to accept assignment of Assignor's interest in the Agreement and City consents
to the assignment of the interest in the Agreement from Assignor to Assignee.
NOW THEREFORE, incorporating the above recitals and in consideration of the
covenants and obligations set forth herein, the parties hereto agree as follows:
1. Assignment. Assignor hereby assigns to Assignee all of Assignor's rights and
obligations as set forth in the Agreement.
2. Assumption. Assignee hereby assumes all of Assignor's rights and obligations as
set forth in the Agreement.
3. City Consent. City hereby agrees and consents to the assignment of all of
Assignor's rights and obligations as set forth in the Agreement to Assignee.
4. General Terms and Conditions. The following general terms and conditions shall
apply to this Assignment Agreement.
4.1 Hold Harmless. In addition to the hold harmless provisions contained within the
Agreement, and except as to the sole negligence, or willful misconduct of City, Assignee shall
defend, indemnify and hold the City, its officers and employees, harmless from any and all loss,
damage, claim for damage, liability, expense or cost, including attorney's fees, which arises out
of or is in any way connected with this Assignment Agreement, notwithstanding that City may
have benefitted from this Assignment Agreement. The hold harmless provision shall apply to any
acts or omissions, willful misconduct or negligent conduct, whether active or passive, on the part
of Assignee.
The parties expressly agree that this section shall survive the expiration or early
termination of this Agreement.
CA 4/1113
4.2. Counterparts. This Assignment Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which, together, shall constitute one and the same
instrument.
4.3. Successors and Assigns. It is mutually understood and agreed that this
Assignment Agreement shall be binding upon City, Assignor and Assignee and their respective
successors. Neither this Assignment Agreement nor any part hereof nor any monies due or to
become due hereunder may be assigned by Assignee without the prior consent of City.
4.4. Governing Law. This Assignment Agreement shall be governed by, interpreted
under, and construed and enforced in accordance with, the laws of the State of California.
4.5. Venue. Any action at law or in equity brought by either of the parties hereto for the
purpose of enforcing a right or rights provided for by this Assignment Agreement shalt be tried in
a court of competent jurisdiction in the County of San Diego, State of California, and the parties
hereby waive all provisions of law providing for a change of venue in such proceedings to any
other county.
4.6. Notices. Service of any notices, bills, invoices or other documents required or
permitted under this Assignment Agreement shall be sufficient if sent by one party to the other by
United States mail, postage prepaid and addressed as follows:
City:
Assignor:
Assignee:
City Manager
City of Carlsbad
1635 Faraday Avenue
Carlsbad, CA 92008
Mayer Hoffman McCann P.C.
700 W. 4 71h Street
Suite 1100
Kansas City, MO 64112
Attn: General Counsel
Davis Farr LLP
2301 Dupont Drive
Suite 200
Irvine, CA 92612
4.7. Nondiscrimination. During the term of this Assignment Agreement, the parties
shall comply with the state and federal laws regarding non-discrimination.
4.8 Authority. The parties executing this Assignment Agreement on behalf of City,
Assignor and Assignee each represent and warrant that they have the legal power, right and
actual authority to bind the City, Assignor and Assignee, respectively, to the terms and conditions
hereof.
2 CA 411113
4.9 Severability. Each provision, term, condition, covenant, and/or restriction, in whole
and in part, in this Assignment Agreement shall be considered severable. In the event any
provision, term, condition, covenant, and/or restriction, in whole and in part, in this Assignment
Agreement is declared invalid, unconstitutional, or void for any reason, such provision or part
thereof shall be severed from this Assignment Agreement and shall not affect any other provision,
term, condition, covenant, and/or restriction, of this Assignment Agreement and the remainder of
this Assignment Agreement shall continue in full force and effect.
4.10 Effective Date. This Assignment Agreement shall be effective upon the date and
year first above written.
ASSIGNOR:
Mayer Hoffman McCann P.C.
*By: M:!ta-t ~#U-reiL
(sign here)
/Ai,!lt"t:<lf.t L llaJt(ock fres,Jen.C
(print name/title) '
**By: jrJ-r--.~~
(sign here)
L~ /1; o....--tf/o.A /\' )ec.r~ .. A--l
(print name/title)
ASSIGNEE:
Davis Farr LLP
•sy ~'#--f<Siir1 here)
r _ki\IW Fa.rr, f1r~
(print nam~e) ,-.....
**By: ~\..d..
(sign here)
Au.r ... ...-~-\ .... ~~J f·-/)...,......,.
(print name/titie)
If required by City, proper notarial acknowledgment of execution by contractor must be attached. If a
Corporation, Agreement must be signed by one corporate officer from each of the following two groups:
*Group A.
Chairman, President, or
Vice-President
**Group B.
Secretary, Assistant Secretary, CFO or
Assistant Treasurer
Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under
corporate seal empowering the officer(s) signing to bind the corporation.
(Remainder of Page Intentionally Left Blank)
3 CA 4/1113
APPROVED AS TO FORM:
CELIA A. BREWER, City Attorney
City Attorney Approved Version #04.01.02
4
AGREEMENT FOR AUDITING SERVICES
MAYER HOFFMAN MCCANN P.C.
THIS AGREEMENT is made and entered into as of the /0-fA day of
~v-C..C , 2012, by and between the CITY OF CARLSBAD, a municipal
corporatJO: ("City"), and Mayer Hoffman McCann, a Professional Corporation, ("Contractor").
RECITALS
A. City requires the professional services of a Certified Public Accounting Firm that
is experienced in governmental auditing.
B. Contractor has the necessary experience in providing professional services and
advice related to governmental auditing.
C. Contractor has submitted a proposal to City and has affirmed its willingness and
ability to perform such work.
NOW, THEREFORE, in consideration of these recitals and the mutual covenants
contained herein, City and Contractor agree as follows:
1. SCOPE OF WORK
City retains Contractor to perform, and Contractor agrees to render, those services (the
"Services") that are defined in attached Exhibit "A", which is incorporated by this reference in
accordance with this Agreement's terms and conditions.
2. STANDARD OF PERFORMANCE
While performing the Services, Contractor will exercise the reasonable professional care and
skill customarily exercised by reputable members of Contractor's profession practicing in the
Metropolitan Southern California Area, and will use reasonable diligence and best judgment
while exercising its professional skill and expertise.
3. TERM
The term of this Agreement will be effective for a period of five years from the date first above
written.
4. TIME IS OF THE ESSENCE
Time is of the essence for each and every provision of this Agreement.
5. COMPENSATION
The total fee payable for the Services to be performed during the Agreement term shall not
exceed four hundred twenty-five thousand, seven hundred and forty-five dollars ($425,745.00)
and shall be payable per Agreement year as further described in Exhibit "A" under heading
entitled: Total All-Inclusive Price. No other compensation for the Services will be allowed except
for items covered by subsequent amendments to this Agreement. The City reserves the right to
withhold a ten percent (1 0%) retention until City has accepted the work and/or Services
specified in Exhibit "A".
Incremental payments, if applicable, should be made as outlined in attached Exhibit "A".
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6. STATUS OF CONTRACTOR
Contractor will perform the Services in Contractor's own way as an independent contractor and
in pursuit of Contractor's independent calling, and not as an employee of City. Contractor will be
under control of City only as to the result to be accomplished, but will consult with City as
necessary. The persons used by Contractor to provide services under this Agreement will not
be considered employees of City for any purposes.
The payment made to Contractor pursuant to the Agreement will be the full and complete
compensation to which Contractor is entitled. City will not make any federal or state tax
withholdings on behalf of Contractor or its agents, employees or subcontractors. City will not be
required to pay any workers' compensation insurance or unemployment contributions on behalf
of Contractor or its employees or subcontractors. Contractor agrees to indemnify City within
thirty (30) days for any tax, retirement contribution, social security, overtime payment,
unemployment payment or workers' compensation payment which City may be required to
make on behalf of Contractor or any agent, employee, or subcontractor of Contractor for work
done under this Agreement. At the City's election, City may deduct the indemnification amount
from any balance owing to Contractor.
7. SUBCONTRACTING
Contractor will not subcontract any portion of the Services without prior written approval of City.
If Contractor subcontracts any of the Services, Contractor will be fully responsible to City for the
acts and omissions of Contractor's subcontractor and of the persons either directly or indirectly
employed by the subcontractor, as Contractor is for the acts and omissions of persons directly
employed by Contractor. Nothing contained in this Agreement will create any contractual
relationship between any subcontractor of Contractor and City. Contractor will be responsible for
payment of subcontractors. Contractor will bind every subcontractor and every subcontractor of
a subcontractor by the terms of this Agreement applicable to Contractor's work unless
specifically noted to the contrary in the subcontract and approved in writing by City.
8. OTHER CONTRACTORS
The City reserves the right to employ other Contractors in connection with the Services.
9. INDEMNIFICATION
Contractor agrees to indemnify and hold harmless the City and its officers, officials, employees
and volunteers from and against all claims, damages, losses and expenses including attorneys
fees arising out of the performance of the work described herein caused by any negligence,
recklessness, or willful misconduct of the Contractor, any subcontractor, anyone directly or
indirectly employed by any of them or anyone for whose acts any of them may be liable.
The parties expressly agree that any payment, attorney's fee, costs or expense City incurs or
makes to or on behalf of an injured employee under the City's self-administered workers'
compensation is included as a loss, expense or cost for the purposes of this section, and that
this section will survive the expiration or early termination of this Agreement.
10. INSURANCE
Contractor will obtain and maintain for the duration of the Agreement and any and all
amendments, insurance against claims for injuries to persons or damage to property which may
arise out of or in connection with performance of the services by Contractor or Contractor's
agents, representatives, employees or subcontractors. The insurance will be obtained from an
insurance carrier admitted and authorized to do business in the State of California. The
insurance carrier is required to have a current Best's Key Rating of not less than "A-:VII". OR
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with a surplus line insurer on the State of California's List of Eligible Surplus Line Insurers
(LESLI) with a rating in the latest Best's Key Rating Guide of at least "A:X".
10.1 Coverages and Limits.
Contractor will maintain the types of coverages and minimum limits indicated below, unless Risk
Manager or City Manager approves a lower amount. These minimum amounts of coverage will
not constitute any limitations or cap on Contractor's indemnification obligations under this
Agreement. City, its officers, agents and employees make no representation that the limits of
the insurance specified to be carried by Contractor pursuant to this Agreement are adequate to
protect Contractor. If Contractor believes that any required insurance coverage is inadequate,
Contractor will obtain such additional insurance coverage, as Contractor deems adequate, at
Contractor's sole expense.
1 0.1.1 Commercial General Liability Insurance. $1,000,000 combined single-limit
per occurrence for bodily injury, personal injury and property damage. If the submitted policies
contain aggregate limits, general aggregate limits will apply separately to the work under this
Agreement or the general aggregate will be twice the required per occurrence limit.
1 0.1.2 Automobile Liability (if the use of an automobile is involved for
Contractor's work for City). $1,000,000 combined single-limit per accident for bodily injury and
property damage.
1 0.1.3 Workers' Compensation and Employer's Liability. Workers' Compensation
limits as required by the California Labor Code. Workers' Compensation will not be required if
Contractor has no employees and provides, to City's satisfaction, a declaration stating this.
1 0.1.4 Professional Liability. Errors and omissions liability appropriate to
Contractor's profession with limits of not less than $1,000,000 per claim. Coverage must be
maintained for a period of five years following the date of completion of the work.
City's Initials Contractor's Initials
D If box is checked, Professional Liability
Insurance requirement is waived.
1 0.2. Additional Provisions. Contractor will ensure that the policies of insurance required under
this Agreement contain, or are endorsed to contain, the following provisions:
1 0.2.1 The City will be named as an additional insured on Commercial General
Liability which shall provide primary coverage to the City.
1 0.2.2 Contractor will obtain occurrence coverage, excluding Professional
Liability, which will be written as claims-made coverage.
1 0.2.3 This insurance will be in force during the life of the Agreement and any
extensions of it and win not be canceled without thirty (30) days prior written notice to City sent
by certified mail pursuant to the Notice provisions of this Agreement.
10.3 Providing Certificates of Insurance and Endorsements. Prior to City's execution of this
Agreement, Contractor will furnish certificates of insurance and endorsements to City.
10.4 Failure to Maintain Coverage. If Contractor fails to maintain any of these insurance
coverages, then City will have the option to declare Contractor in breach, or may purchase
replacement insurance or pay the premiums that are due on existing policies in order to
City Attorney Approved Version 2/17/12
3 l
maintain the required coverages. Contractor is responsible for any payments made by City to
obtain or maintain insurance and City may collect these payments from Contractor or deduct the
amount paid from any sums due Contractor under this Agreement.
10.5 Submission of Insurance Policies. City reserves the right to require, at anytime, complete
and certified copies of any or all required insurance policies and endorsements.
11. BUSINESS LICENSE
Contractor will obtain and maintain a City of Carlsbad Business License for the term of the
Agreement, as may be amended from time-to-time.
12. ACCOUNTING RECORDS
Contractor will maintain complete and accurate records with respect to costs incurred under this
Agreement. All records will be clearly identifiable. Contractor will allow a representative of City
during normal business hours to examine, audit, and make transcripts or copies of records and
any other documents created pursuant to this Agreement. Contractor will allow inspection of all
work, data, documents, proceedings, and activities related to the Agreement for a period of
three (3) years from the date of final payment under this Agreement.
13. OWNERSHIP OF DOCUMENTS
All work product produced by Contractor or its agents, employees, and subcontractors pursuant
to this Agreement is the property of City. In the event this Agreement is terminated, all work
product produced by Contractor or its agents, employees and subcontractors pursuant to this
Agreement will be delivered at once to City. Contractor will have the right to make one (1) copy
of the work product for Contractor's records.
14. COPYRIGHTS
Contractor agrees that all copyrights that arise from the services will be vested in City and
Contractor relinquishes all claims to the copyrights in favor of City.
15. NOTICES
The name of the persons who are authorized to give written notices or to receive written notice
on behalf of City and on behalf of Contractor under this Agreement.
For Cit,y
Name: Chuck McBride
Title: Finance Director
Department: Finance ~~~~------------
City of Carlsbad
Address: 1635 Faraday Avenue
Carlsbad, CA 92008-7314
Phone No. 760-602-2430
For Contractor
Name Ken Al-lmam
Title Shareholder
Address 2301 Dupont Dr., Suite 200
Irvine, CA 92612
Phone No. 949-4 7 4-2020 Ext. 273
Email kalimam@cbiz.com
Each party will notify the other immediately of any changes of address that would require any
notice or delivery to be directed to another address.
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16. CONFLICT OF INTEREST
Contractor shall file a Conflict of Interest Statement with the City Clerk in accordance with the
requirements of the City of Carlsbad Conflict of Interest Code. The Contractor shall report
investments or interests in all four categories.
17. GENERAL COMPLIANCE WITH LAWS
Contractor will keep fully informed of federal, state and local laws and ordinances and
regulations which in any manner affect those employed by Contractor, or in any way affect the
performance of the Services by Contractor. Contractor will at all times observe and comply with
these laws, ordinances, and regulations and will be responsible for the compliance of
Contractor's services with all applicable laws, ordinances and regulations.
Contractor will be aware of the requirements of the Immigration Reform and Control Act of 1986
and will comply with those requirements, including, but not limited to, verifying the eligibility for
employment of all agents, employees, subcontractors and consultants whose services are
required by this Agreement.
18. DISCRIMINATION AND HARASSMENT PROHIBITED
Contractor will comply with all applicable local, state and federal laws and regulations prohibiting
discrimination and harassment.
19. DISPUTE RESOLUTION
If a dispute should arise regarding the performance of the Services the following procedure will
be used to resolve any questions of fact or interpretation not otherwise settled by agreement
between the parties. Representatives of Contractor or City will reduce such questions, and their
respective views, to writing. A copy of such documented dispute will be forwarded to both
parties involved along with recommended methods of resolution, which would be of benefit to
both parties. The representative receiving the letter will reply to the letter along with a
recommended method of resolution within ten (1 0) business days. If the resolution thus
obtained is unsatisfactory to the aggrieved party, a letter outlining the disputes will be forwarded
to the City Manager. The City Manager will consider the facts and solutions recommended by
each party and may then opt to direct a solution to the problem. In such cases, the action of the
City Manager will be binding upon the parties involved, although nothing in this procedure will
prohibit the parties from seeking remedies available to them at law.
20. TERMINATION
In the event of the Contractor's failure to prosecute, deliver, or perform the Services, City may
terminate this Agreement for nonperformance by notifying Contractor by certified mail of the
termination. If City decides to abandon or indefinitely postpone the work or services
contemplated by this Agreement, City may terminate this Agreement upon written notice to
Contractor. Upon notification of termination, Contractor has five (5) business days to deliver any
documents owned by City and all work in progress to City address contained in this Agreement.
City will make a determination of fact based upon the work product delivered to City and of the
percentage of work that Contractor has performed which is usable and of worth to City in having
the Agreement completed. Based upon that finding City will determine the final payment of the
Agreement.
Either party upon tendering thirty (30) days written notice to the other party may terminate this
Agreement. In this event and upon request of City, Contractor will assemble the work product
and put it in order for proper filing and closing and deliver it to City. Contractor will be paid for
work performed to the termination date; however, the total will not exceed the lump sum fee
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payable under this Agreement. City will make the final determination as to the portions of tasks
completed and the compensation to be made.
21. COVENANTS AGAINST CONTINGENT FEES
Contractor warrants that Contractor has not employed or retained any company or person, other
than a bona fide employee working for Contractor, to solicit or secure this Agreement, and that
Contractor has not paid or agreed to pay any company or person, other than a bona fide
employee, any fee, commission, percentage, brokerage fee, gift, or any other consideration
contingent upon, or resulting from, the award or making of this Agreement. For breach or
violation of this warranty, City will have the right to annul this Agreement without liability, or, in
its discretion, to deduct from the Agreement price or consideration, or otherwise recover, the full
amount of the fee, commission, percentage, brokerage fees, gift, or contingent fee.
22. CLAIMS AND LAWSUITS
By signing this Agreement, Contractor agrees that any Agreement claim submitted to City must
be asserted as part of the Agreement process as set forth in this Agreement and not in
anticipation of litigation or in conjunction with litigation. Contractor acknowledges that if a false
claim is submitted to City, it may be considered fraud and Contractor may be subject to criminal
prosecution. Contractor acknowledges that California Government Code sections 12650 et seq.,
the False Claims Act applies to this Agreement and, provides for civil penalties where a person
knowingly submits a false claim to a public entity. These provisions include false claims made
with deliberate ignorance of the false information or in reckless disregard of the truth or falsity of
information. If City seeks to recover penalties pursuant to the False Claims Act, it is entitled to
recover its litigation costs, including attorney's fees. Contractor acknowledges that the filing of a
false claim may subject Contractor to an administrative debarment proceeding as the result of
which Contractor may be prevented to act as a Contractor on any public work or improvement
for a period of up to five (5) years. Contractor acknowledges debarment by another jurisdiction
is grounds for City to terminate this Agreement.
23. JURISDICTIONS AND VENUE
Any action at law or in equity brought by either of the parties for the purpose of enforcing a right
or rights provided for by this Agreement will be tried in a court of competent jurisdiction in the
County of San Diego, State of California, and the parties waive all provisions of law providing for
a change of venue in these proceedings to any other county.
24. SUCCESSORS AND ASSIGNS
It is mutually understood and agreed that this Agreement will be binding upon City and
Contractor and their respective successors. Neither this Agreement or any part of it nor any
monies due or to become due under it may be assigned by Contractor without the prior consent
of City, which shall not be unreasonably withheld.
25. ENTIRE AGREEMENT
This Agreement, together with any other written document referred to or contemplated by it,
along with the purchase order for this Agreement and its provisions, embody the entire
Agreement and understanding between the parties relating to the subject matter of it. In case of
conflict, the terms of the Agreement supersede the purchase order. Neither this Agreement nor
any of its provisions may be amended, modified, waived or discharged except in a writing
signed by both parties.
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Cky Attorney Approved Version 2117112 }J
26. AUTHORITY-
The individuals executing this Agreement and the instruments referenced in it on behalf of
Contractor each represent and warrant that they have the legal power, right and actual authority
to bind Contractor to the terms and conditions of this Agreement.
CONTRACTOR
By:
' (sign here)
By:
(sign here)
(print name/title)
CITY OF CARLSBAD, a municipal
corporation of the State of California
By:
L
City Clerk
,,,,II,,,,
If required by City, proper notarial acknowledgment of execution by contractor must be
attached. If a corporation, Agreement must be signed by one corporate officer from each of the
following two groups.
Group A
Chairman,
President, or
Vice-President
Group B
Secretary,
Assistant Secretary,
CFO or Assistant Treasurer
Otherwise, the corporation must attach a resolution certified by the secretary or assistant
secretary under corporate seal empowering the officer(s) signing to bind the corporation.
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EXHIBJT "A"
' SCOPE OF SERVICES
OUR FIRM'S UNDERSTANDR OF THE OBJECTIVES AND
SCQPE OF THE ENGAGEMENT
Our understanding of the objecti~es and scope of the work to be performed is based upon your
request for proposal !
' '
Based upon the foregoing we und¢rstand the objectives and scope of work to be as follows:
!,
l. We will perform an audit ~xamination of the Comprehensive Annual Financial Report
of the City of Carlsbad fot the fiscal years ending June 30, 2012 through June 30, 2016.
Our examination will be: conducted in accordance with auditing standards generally
accepted in the United States of America and Government Auditing Standards. The
financial section of the CAFR will be drafted by City personnel. We will review the
complete CAFR for confqnnity with the requirements of the CAFR award programs of
GFOA. We are committed to completing our review of this report and providing our
opinion on the same in accprdance with the City's time line requirements.
2. We will perform a financjal and compliance audit of the governmental activities, each
major fund and the aggregate remaining fund information of the Carlsbad
Redevelopment Ageney for the years ended June 30, 2012 through 2016. Our audit will
be conducted in acco~ce with auditing standards generally accepted in the United
States, Government Audi(fng Standards and the Guidelines for Compliance Audits of
California Redevelopment! Agencies. The City will draft and word process the financial
statements and notes to th~ financial statements. The auditors will provide bound copies
of the final report. '
3. We will perform a financi~ audit of the Enciua Finaneint; Joint Powers Authority for
the years ended June 30, 2P12 through 2016. Our audit wlll be conducted in accordance
with auditing standards generally accepted in the United States and Government Auditing
Standards. The City will 4raft and word process the financial statements and notes to the
financial statements. The ~ditors will provide bound copies of the final report.
4. When required, we will ~rform a Single Audit of the City of Carlsbad in accordance
with the Single Audit Act 4mendments of 1996 (Public Law 104-156) and OMB Circular
A-133 entitled Audits ofSt,ates, Local Governments, and Non-Profits Organizations. Our
single audit will cover all! federal grants received by the City and its component units
either as a primary or seQOndary recipient The City will provide to the Auditors the
Schedule of Federal Financial Assistance encompassing all direct and pass-through
federal funds received by the City and component units. We will render our reports on tlie
single audit in accordanqe with the single audit requirements as described in this
proposal. We are committed to providing the requested number of copies of the single
audit report in accordanc¢ with the City's timeline requirements. The auditors will
provide bound copies of th~ final report.
'
5. We will perform agreed-u~n procedures to test and report on the City's Gann Limit for
the years ended June 30, 2(H2 through 2016. The auditors will provide bound copies of
the final report. ·
6. We will report instances o£ compliance that are detected by the audit process, as required
by Government Auditing Standards. /I
7. We will report to the City Council the communications required by Statement on
Auditing Standards No.1 14.
8. We will prepare a letter tQ City Council reporting matters dealing with internal control
that meet the threshold of be~ significant control deficiencies (previously reportable
conditions) as defined by Statement on Auditing Standards (SAS) No. 115.
9. We will immediately report in i writing any irregularities or illegal acts or indications of
illegal acts of which we becom~ aware to the City Council, City Manager and the Finance
Director, as required by governblental auditing standards.
' i
10. We will prepare a managem~t letter. This letter will include nonreportable conditions
(those constructive comments Qot required to be included in the single audit report). We
will discuss those comments iwith the Finance Director and other appropriate City
personnel prior to its finalizatiotl.
1 I. Mayer Hoffman McCann P .C. 1 desires to keep its clients abreast of new developments
affect~ local government ~-.we. would plan to advise City staff o~ new
accounting developments dlll1.Jilg the mterim/planmng stage of each year's audit and
through our annual GASB Up&t.te that we provide for our clients.
12. Finally, we perceive the scopej of our work as being advisors to the City of Carlsbad.
Throughout the year, City ~nnel will have access to the Engagement Shareholder,
Ken Al-Imam, Quality Con1:I'cil Review Shareholder, Jennifer Parr, and Engagement
Manager, Dean Votava, to s~ advice in the application of accounting principles,
financial statement preparatio* and content and other matters relating to the City,
including matters of taxation an~ policy relating to City fringe benefits.
With respect to the City of Carlsbad ~d its component units, Mayer Hoffman McCann P.C.
meets the independence requirement$ of generally accepted accounting standards and the
Government Auditing Standards (200& revision) published by the U.S. General Accounting
Office. Our firm has never had a record of substandard audit work. No conflicts of interest exist
relative to our firm performing the au4fit MHM does not intend to use subcontractors for this
engagen1ent ! .
!
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TOTAL ALL-INCLUSivE PRICE
The following is a breakout of the fee associated with conducting the audit of the City of
Carlsbad.
Description of Services 2012 2013 2014 2015 2016
CAFR $59,000 60,475 61,985 63,535 65,125
i
*Carlsbad Redevelopment Agenc)f 7,100 7,275 7,460 7,645 7,835
Encina Financing Joint
Powers Authority 6,500 6,660 6,830 7,000 7,175
Single Audit 7,300 7,480 7,670 7,860 8,055
GANN Limit Verification 1.100 1.125 1.155 1,185 1.215
Total All-Inclusive Price s 11.2Q;Q 83.CHS 8~.10U 8Z.~2~ 82.iQS
*This represents the cost to auditlthe residual activity of the redevelopment agency. There will
be no e>..1ra charge should separate! financial statements be required for the successor agency.
The above fees include an annual ¥justment of 2.5%.
We will progress bill the City fo~ the above services as the engagement hours are expended.
Final billing will be made upon qelivery of the final audit repOrts. Any special projects, extra
work, accounting assistance, or a4fitional assignments will be performed at the standard hourly
rates indicated in the accompanying fee schedule.
Our fees contemplate conditions Jtisfactoxy for the performance of the audit, including the City
providing at the start of the audi~ trial balances reflecting all year end adjustments, necessary
subsidiary schedules supporting ~t and liability balances, all necessary reconciliations in
agreement with general ledger balances, and customary supporting analyses and schedules. If
assistance is needed in preparing year end journal entries or resolving reconciliation issues, we
would perform the same at the hourly rates indicated in this cost proposal.
The City will type confirmation *uests. If there are changes in the scope of the audit (added
enterprise activity, additional component units, new audit or accol!Ilting requirements, etc.), we
would discuss these changes with t)le Director of Finance and the effect of these changes on the
professional audit hours and costs!ofthe engagement. Our :fixed fee pricing contemplates up to
two major programs for the singl~ audit. A price adjustment of $3,500 will be made for each
additional major program. :
[
RATES FOR AJ>DmONAL PROFESSIONAL SERVICES
!
The following is a summary of hdurly rates for services that may be required outside the scope of
the audit for the years 2012-2016~
~
Classification !
Shareholders
Managers ,
Field Managers/Senior Auditors
Staff Auditors
Hourly
Rates
$135
125
115
105
(S
Mayer Hoffman McCann P.C.
Board Resolution
The undersigned, being all members of the Board of Directors of Mayer
Hoffman McCann P.C., a Missouri professional corporation "the Corporation", do
hereby approve and adopt the following resolution:
RESOLVED, that the shareholders of Mayer Hoffman McCann P.C. as
listed below are hereby authorized to sign and execute contracts to provide
professional services on behalf of the Corporation.
1. Ken Al-lmam 12. Jeffrey Baumgarten
2. Michael Harrison 13. James Comito
3. Marcus Davis 14. David Diamond
4. Michael Gutierrez 15. Steve Fanucchi
5. Ron Rolwes 16. Robert Gellman
6. Jennifer Farr 17. Mike Lichtenberger
7. Matthew Lenton 18. Jim Putt
8. Jim Babcock 19. Stuart Starr
9. Benjamin Reyes 20. Timothy Willis
10. Sam Perera 21. Laurie Hopkins
11. Dana Basney
IN WITNESS WHEREOF, the undersigned have hereunto subscribed their names
effective as of March 23, 2011.
·~~£_~
· William L. Hancock Frank Maughan
R8fH~v(
~~ Chuck McLan Mark Garten
PaulE, Nation