PROFESSIONAL AUDIT SERVICES

Transcription

1 CITY OF REDWOOD CITY REQUEST FOR PROPOSALS For PROFESSIONAL AUDIT SERVICES February 28, 2017 City of Redwood City FINANCE DIVISION 1017 Middlefield Road Redwood City, CA (605)

2 PROFESSIONAL AUDIT SERVICES I. REQUEST SUMMARY The City of Redwood City is seeking proposals from qualified certified public accounting firms (Auditor) to conduct the annual independent audit of the City s financial statements for three (3) fiscal years beginning with the fiscal year ending June 30, 2017, with an option to extend the contract for two (2) years in one-year increments. These two optional engagement years will be done by separate engagement letter. II. INTRODUCTION A. Community Profile The City of Redwood City (City) is a charter city incorporated in The City is governed by a seven-member City Council whose members are elected at large and operates under a Council/City Manager form of government. Redwood City is a full-service city located in San Mateo County and is the County Seat. The City is approximately 33.7 square miles with a residential population of approximately 86,000. The total adopted budget for FY is approximately $255 million, of which $112 million is General Fund. B. Background The City provides a range of services normally associated with a municipality, including fire and police protection, parks and recreation, library, information services, water and sewer utilities, metered parking facilities, and other general city services. The City only stores, pumps, and distributes water, as potable water is purchased from the City of San Francisco. All water, sewer, and refuse billing is provided on one bill. The Port of Redwood City is included in the financial report as an enterprise fund of the City. The City contributes to the California Public Employees Retirement System (PERS), a multiple-employer public employee retirement system that acts as a common investment and administrative agent for participating public entities within the State of California. The City s fiscal year begins July 1 and ends June 30. As a guide to the scope of services, refer to The City s Comprehensive Annual Financial Report (CAFR) for the fiscal period ended June 30, 2016 on the City s website at: 1

3 The City of Redwood City desires a Comprehensive Annual Financial Report (CAFR) and its component unit financial statements be audited by the independent auditor and be fully compliant with all current Governmental Accounting Standards Board (GASB) pronouncements for the fiscal year ended June 30, 2017 and subsequent fiscal years 2018 and The City reserves the right to extend the term of the contract for two additional one-year terms. The City annually submits its CAFR to the Government Finance Officers Association (GFOA) and has been awarded its Certificate of Achievement for Excellence in Financial Reporting for twenty-nine consecutive years. The auditor should also be familiar with and prepared to advise City staff on how best to implement both current and proposed GASB statements. In addition, the City requires ongoing consulting services for financial and compliance issues that may occur throughout the year. The selected vendor will be expected to be present at Finance/Audit Sub-Committee, Board of Port Commissioners (at least once a year to present the audit report), and City Council meetings when the contract is being awarded or amended and when the annual reports and management letter are being presented (at the City Council or City Manager s request). As necessary, the auditor shall meet with the Financial Services Manager and Assistant City Manager of Administrative Services and his/her management staff to discuss the status of the audit, outstanding items and information requests, proposals for any cost overruns (which must be approved in advance by the Financial Services Manager), total hours incurred, potential management comments or audit findings, potential audit adjustments, and estimated completion date. No additional charges are to be made by the selected audit firm for these financial consulting services: issuance of consent and citation of expertise or comfort letters if requested by fiscal advisor and/or underwriter, new adopted GASB statements, changes in any governmental rules and regulations or increase in the number of funds, projects or grants that affect the preparation of the financial statements. An option for early termination of the contract may be exercised by the City for persistent non-responsiveness by the audit firm to City questions or requests or for failure to meet the deadlines given by the City. The Finance Division consists of the following positions: 1. Financial Services Manager Senior Accountant 2 3. Accountant 1 4. Account Technician 1 5. Account Clerk 3 6. Management Analyst 1 7. Secretary - 1 General ledger, accounts payable, accounts receivable, purchase order and payroll accounting are processed on an HP 9000 utilizing government accounting software purchased in Since acquisition, the system has been maintained and enhanced entirely by City IT staff. The auditor s principal contact with the City of Redwood City will be Derek Rampone, Financial Services Manager ( ), who will coordinate the assistance to be provided by the City of Redwood City to the auditor. 2

4 The Finance/Audit Sub-Committee is made up of two (2) Council Members who oversee the audit on behalf of the City Council. The Sub-Committee shall advise the City Council on matters including, but not limited to, the following duties: 1. Final selection and retention of the City s independent financial auditor. 2. Work with the independent auditor to establish the annual work plan and determine if any special focus may be necessary. 3. The Sub-Committee will meet with the auditor a minimum of three (3) times. One meeting shall be held pre-audit; one shall be during the audit; and one at the completion of the audit. 4. The Committee shall receive progress reports and the final report from the City s independent auditor. C. General RFP Submittal Information The City s designated staff will evaluate proposals received. During the review process, the City reserves the right, where it may serve the City s best interest, to request additional information or clarification from those that submit proposals, or allow corrections of errors or omissions. Any and all changes in the RFP will be made by written addendum, which shall be posted on the City s website and provided (via ) to any firm that submits questions to the City. The City reserves the right to retain all proposals submitted. Submission of a proposal indicates the Proposer s acceptance of the conditions contained in this RFP, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the City and the Proposer selected. The preparation of the proposal will be at the total expense of the Proposer. There is no expressed or implied obligation for the City to reimburse responding Proposers for any expense incurred in the preparation of proposals in response to this request. All proposals submitted to the City shall become properties of the City and will not be returned. The City reserves the right to reject any or all proposals, in whole or part, to waive any informality in any proposal, and to accept the proposal which, in its discretion, is in the best interest of the City. 3

5 To be considered, Proposers must send one original, one electronic (pdf format), and three (3) hard copies of each proposal (technical and dollar-cost) in a sealed envelope with the name of the company submitting the proposal and the title of Professional Audit Services to: City of Redwood City Finance Division Financial Services Manager 1017 Middlefield Road Redwood City, CA All proposals must be received by March 24, 2017 by 5pm. Please send a pdf copy to Derek Rampone, via , at drampone@redwoodcity.org. For a sample of the City s professional services agreement, please refer to Appendix C attached hereto. D. RFP Questions Questions with regard to this RFP should be submitted by to the attention of the Financial Services Manager, at drampone@redwoodcity.org by March 10, All firms sending questions will receive responses to all questions via . All questions and responses shall also be posted to the City s website by March 15, E. Schedule The City reserves the right to make changes to the below schedule, but plans to adhere to the implementation of this RFP process as follows: RFP released: February 28, 2017 Deadline for receiving questions: March 10, 2017 Response to questions: March 15, 2017 Proposals due: March 24, 2017 Finalists selected: March 31, 2017 Presentations/Interviews (if necessary): Week of April 17, 2017 Vendor selected: No later than April 28, 2017 Contract approved by City Council: May 8, 2017 Interim fieldwork is expected to be completed by June 30 th of each fiscal year. Final fieldwork should begin in early October and be completed by October 15 th. 4

6 III. SCOPE OF SERVICES A. Deliverables to be provided to the City by the Auditor 1. City of Redwood City (CAFR). 2. Port of Redwood City financial statement. 3. Measure A Compliance Audit. 4. Single Audit Report for the City of Redwood City. 5. Single Audit Report for the Port of Redwood City, when required. 6. GANN Limit (Proposition 111 Appropriations). 7. Utility Users Tax Fund Audit. 8. TDA Compliance Audit. 9. Management Report, including recommendations for improvements in internal controls or policies and procedures. 10. Annual Financial Transactions Report for the City, due annually by January 31 st. 11. Annual Financial Transactions Report for the Public Financing Authority, due annually by January 31 st. 12. Annual Street Report, due annually by October 1 st. B. Tasks to Be Performed 1. City s Financial Audits The independent auditor shall review all financial records and various funds of the City and prepare all the related financial statements and footnotes in accordance with auditing standards generally accepted in the United States of America, the standards set forth for financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, as well as other applicable laws regulations and rules. The auditor shall use the general ledger information provided by the City to prepare the necessary financial statements and footnotes for the Comprehensive Annual Financial Report. 2. Port of Redwood City Financial Audit The independent auditor shall review all financial records and various funds of the Port and prepare a separate financial statement, in accordance with auditing standards generally accepted in the United States of America, the standards set forth for financial audits contained in Generally Accepted Government Auditing Standards issued by the Comptroller General of the United States, as well as other applicable laws regulations and rules. The auditor shall use the general ledger information provided by the City to 5

7 prepare the necessary financial statement and footnotes for the separate statement. 3. Measure A Compliance Audit The independent auditor shall review all financial records and funds of the Measure A Transportation Fund revenue and expenditures and prepare a financial statement and footnotes in accordance with auditing standards generally accepted in the United States of America, the standards set forth for financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, and the Agreement for Distribution of San Mateo County Measure A Funds for Local Transportation purposes in accordance with the 2004 Measure A, as well as other applicable laws regulations and rules. The auditor shall use the general ledger information provided by the City to prepare the necessary financial statement and footnotes for the Measure A Transportation Fund report. 4. Single Audit - The selected firm will prepare and perform a single audit on the expenditures of federal grants in accordance with U.S. Office of Management and Budget (OMB) Grant Guidance/Super Circular and render the appropriate audit reports on the 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 and on Internal Control over Compliance Required by the Uniform Guidance. The single audit report will include appropriate schedule of expenditures of federal awards, footnotes, findings, and questioned costs, including reportable conditions and materials and weaknesses, and follow up on prior audit findings where required. A single audit report may also be required for the Port of Redwood City. 5. GANN Appropriation Limit The audit firm shall perform agreed- uponprocedures to test and report on the GANN appropriation limit calculation (California Constitution Article XIIB Appropriations Limit) and render a letter annually to the City regarding compliance. 6. Utility Users Tax Compliance Audit The independent auditor shall review all financial records and funds of the Utility Users Tax Fund and prepare a financial statement and footnotes in accordance with auditing standards generally accepted in the United States of America, the standards set forth for financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, as well as other applicable laws regulations and rules. The auditor shall use the general ledger information provided by the City to prepare the necessary financial statement and footnotes for the Utility Users Tax Fund report. 7. TDA Compliance Audit The independent auditor shall review all financial records and funds of the Transportation Development Act Fund and prepare a financial statement and footnotes in accordance with auditing standards generally accepted in the United States of America, the standards set forth for financial audits contained in Government Auditing Standards issued by the Comptroller General 6

8 of the United States, and Section 6666 of the Rules and Regulations of the California Administrative Code in the Transportation Development Act Statutes and Administrative Code for 1987 and the allocation instructions and resolutions of the Metropolitan Transportation Commission, as well as other applicable laws regulations and rules. The auditor shall use the general ledger information provided by the City to prepare the necessary financial statement and footnotes for the TDA Fund report. 8. SCO Report California State Controller s Cities Financial Transactions (SCO) Report- preparation and submission of the California State Controller s Cities Financial Transaction Report for the City and the PFA. 9. Street Report - California State Controller s Annual Street Report - preparation and submission of the SCO Street Report for the City. C. Auditing Standards to Be Followed To meet the requirements of this Request for Proposals, the audit shall be performed in accordance with: 1. Auditing standards generally accepted in the United States of America as set promulgated by the American Institute of Certified Public Accountants (AICPA) or any successor body, including standards related to fraud detection. Such standards must include specific requirements found in the AICPA audit guide, Audits of State and Local Governments. 2. The standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; 3. The provisions of the Single Audit of 1996, as amended. 4. The provisions of the U.S. Office of Management and Budget (OBM) Uniform Guidance. 5. Specific auditing standards relating to any grant agreement determined to be material by the auditor for purposes of the examination of the basic financial statements. 6. All applicable Governmental Accounting Standards Board Statements. 7. Any other applicable standards for conducting examinations of those items outlined in the Scope of Services and /or reports to be issued in conjunction therewith outlined in the section Reports to be issued. D. Reports to Be Issued Following completion of the audit of the financial statements, schedules, supplementary financial information and other information as outlined above, the auditor shall, at a minimum, issue the following reports: 7

9 1. Auditor s Opinion report on the fair presentation of the City s basic financial statements in conformity with accounting principles generally accepted in the United States of America, together with an in relationto opinion on the general fund comparative statements, combining and individual non-major fund financial statements, and budgetary comparison information for non-major funds. An electronic copy of all reports and (15) printed copies of the CAFR shall be delivered to the City. 2. Auditor s Opinion report on the fair presentation of the Port of Redwood City, an enterprise fund s basic financial statements in conformity with accounting principles generally accepted in the United States of America, and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. An electronic copy of all reports and (15) printed copies of the financial statement shall be delivered to the Port. 3. Auditor s Opinion report on the schedule of receipts and disbursements of the Measure A Transportation Fund financial statements in conformity with accounting principles generally accepted in the United States of America, and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The auditor should also test compliance with the San Mateo County Transportation Authority measure A grant requirements. An electronic copy of all reports and (5) printed copies of the report shall be delivered to the City. 4. Separate Single Audit report on the City s and the Port s federal award programs. Such reports shall include reports and opinions required by the Single Audit Act, OMB Uniform Grant Guidance/Super Circular, Government Auditing Standards and any other applicable standards or requirements. At a minimum, such reports shall include: i. An in-relation-to report on the City s Schedule of Expenditures of Federal Awards. ii. Report on compliance and on internal control over financial reporting based on an audit of the basic financial statements performed in accordance with Government Auditing Standards. iii. Report on compliance with requirements applicable to each major program and on internal control over compliance required by the Uniform Guidance. iv. Schedule of Expenditures of Federal Awards together with applicable notes to this schedule (note that the City will prepare the schedule, but the auditor will include the schedule in its Single Audit Reports). v. Schedule of Findings and Questioned Costs. vi. Status of Prior Year Findings (if applicable). vii. Form SF-SAC, Data Collections Form for Reporting of Audits of States, Local Governments and Non-Profit Organizations. 8

10 viii. Any other report or opinion required to be in conformance with the Single Audit Act and the Uniform Guidance. An electronic copy of all reports and (5) printed copies of the Single Audit shall be delivered to the City and Port. 5. A report on agreed-upon procedures related to the City s GANN Appropriations Limit Calculation, as specified by State Law. 6. Auditor s Opinion report on the fair presentation of the Utility Users Tax Fund financial statements in conformity with accounting principles generally accepted in the United States of America, and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. An electronic copy of all reports and (5) printed copies of the UUT report shall be delivered to the City. 7. Auditor s Opinion report on the fair presentation of the Transportation Development Act Fund financial statements in conformity with accounting principles generally accepted in the United States of America, and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The auditor should also test compliance with Section 6666 of the Rules and Regulations of the California Administrative Code in the Transportation Development Act Statutes and Administrative Code for 1987 (the Act) and the allocation instructions and resolutions of the Metropolitan Transportation Commission applicable to the City s Transportation Development Act Fund. An electronic copy of all reports and (5) printed copies of the TDA report shall be delivered to the City. 8. A report to management concerning material weaknesses and/or reportable conditions, if any, as defined by the AICPA. Such report may be included in the annual letter to management described in item 9 below, provided that the report on such items is segregated from the report on other matters. 9. An annual letter to management addressing any observations concerning the city s internal control structure, as well as areas of potential economy and efficiency. The auditor shall include any matters from the prior year(s) letter to management that have not been addressed during the subsequent fiscal year to the auditor s satisfaction. 10. Preparation and filing of Financial Transaction Report to the California State Controller for the City and PFA. 11. Preparation and filing of the City s Street Report to the California State Controller. 12. The auditor shall be required to make an immediate, written report of all irregularities and illegal acts or indications of illegal acts of which they become aware to the Mayor, City Manager, Assistant City Manager of 9

11 Administrative Services, City Attorney, and the Financial Services Manager. In addition, the auditor shall make any other reports necessary regarding irregular or illegal acts in accordance with Government Auditing Standards. 13. Report to the City Council of standard communications required by auditing standards, including: i. The auditor s responsibility under auditing standards generally accepted in the United States; ii. Significant accounting policies; iii. Management judgements and accounting estimates; iv. Significant audit adjustments; v. Other information in documents containing audited financial statements; vi. Disagreements with management; vii. Management consultation with other accountants; viii. Major issues discussed with management prior to retention; ix. Difficulties encountered in performing the audit; and x. Any other communications required by standards outlined in Section III.C., Auditing Standards to be Followed. 14. The Finance Division will complete their review of the draft reports as expeditiously as possible. This process is not expected to exceed two weeks. During that period, the auditor should be available for any meetings that may be necessary to discuss the drafts. Once all issues for discussion are resolved, the final signed reports shall be delivered to the Financial Services Manager within five working days. It is anticipated that this process will be completed and the final reports delivered by the following date: All final reports shall be issued by November 20 th of each year E. Special Considerations 1. On August 22, 2011, the City of Redwood City elected to become the Successor Agency to the Redwood City Redevelopment Agency (RCRA), taking effect on February 1, 2012, to retain the assets and functions of the RCRA. The auditor may need to provide advice and assistance in determining future accounting and reporting items required by the State. 2. The City of Redwood City will send its Comprehensive Annual 10

12 Financial Report (CAFR) to the Government Finance Officers Association (GFOA) of the United States and Canada for review in its Certificate of Achievement for Excellence in Financial Reporting program. The auditor will be required to provide special assistance to the City and have completed their audit work in sufficient time to allow the City to meet the requirements of that program and to present the CAFR to the City Council. 3. The Single Audit Report is to be issued separately from the CAFR. 4. Audit staff will work in their designated area during normal working hours. City Hall s working hours are 8am to 5pm. Arrangements can be made to allow for longer working hours for the auditors. 5. The Finance Division staff and responsible management personnel will be available during the audit to assist the firm by providing information, documentation and explanations. The preparation of confirmations will be the responsibility of City, with the assistance of the auditor. 6. City staff will assist the auditors in identifying and locating supporting documentation. The auditors may be responsible for pulling some files and refiling them depending on the items requested. 7. It is expected that the auditors will visit the Port of Redwood City s administration offices to perform testing and other audit fieldwork. Their office is located at 675 Seaport Blvd., Redwood City, CA, The audit firm will prepare and bind all audit reports, including the CAFR. 9. It is expected that the City will be replacing the entire financial software system over a period of 1-2 years, beginning July 1, It is expected that the audit firm will be involved in this process. Any additional work requested by the City will be a separate engagement. Normal audit work associated with a change in financial software should be included in the audit fee for June 30, F. Working Paper Retention and Access to Working Papers All working papers and reports must be retained, at the auditor s expense, for a minimum of seven (7) years, unless the firm is notified in writing by the City of Redwood City of the need to extend the retention period. The auditor will be required to make working papers available upon request, to the following parties or their designees: City of Redwood City U.S. Department of Housing and Urban Development U.S. General Accounting Office (GAO) State of California, State Controller State of California, Department of Finance County of San Mateo, Auditor/Controller 11

13 Parties designated by the federal government or state governments or by the City of Redwood City as part of an audit quality review process. Auditors of entities of which the City of Redwood City is a subrecipient of grant funds In addition, the firm shall respond to the reasonable inquiries of Successor auditors and allow Successor auditors to review working papers relating to matters of continuing accounting significance. IV. PROPOSAL OUTLINE TO BE SUBMITTED The technical proposal shall be organized and submitted with the following elements: A. Cover page B. Table of contents C. Executive Summary/Transmittal Letter Provide a brief summary describing the proposer s ability to perform the work requested, a history of the proposer s background and experience providing services, the qualifications of the proposer s personnel to be assigned to this project, any subcontractor, sub consultants, and/or suppliers and a brief history of their background and experience, and any other information called for by this request for proposal which the proposer deems relevant, including restating any exceptions to this request for proposal. This summary should be brief and concise to apprise the reader of the basic services offered, experience and qualifications of the proposer. D. Independence The firm should provide an affirmative statement that it is independent of the City of Redwood City as defined by auditing standards generally accepted in the United States of America. Moreover, the firm must have no conflict of interest with regard to any other work performed for the entity being audited. It is understood that the services performed by the auditors are in the capacity of independent contractors and not as an officer, agent, or employee of the City of Redwood City. E. License to Practice in California An affirmative statement should be included indicating that the firm and all assigned key professional staff are properly licensed to practice in California. F. Insurance The auditing firm shall maintain the following insurance coverages during the contract period: 1. Commercial general liability and property damage in the amount of $1,000,000 12

14 2. Workers compensation (statutory amounts and limits) 3. Professional liability in the amount of $2,000,000 per occurrence 4. Automobile liability in the amount of $1,000,000 Terms and conditions of insurance coverage and evidence thereof are subject to review and approval by the City Attorney s office. Please acknowledge that your firm has the required insurance coverages in your proposal. G. Firm Qualifications and Experience 1. The proposal should state the size of the firm, the size of the firm s governmental audit staff, the location of the office from which the work on this engagement is to be performed, and the number and nature of the staff to be so employed on a part-time basis. Please indicate whether any members of the audit team assigned to the City are reviewers in the GFOA Certificate of Achievement for Excellence in Financial Reporting program. 2. The firm is also required to submit a copy of the report on its most recent external quality control review, with a statement whether that quality control review included a review of specific government engagements. 3. The firm shall also provide information on the results of any federal or state desk reviews or field reviews of its audits during the past three (3) years. In addition, the firm shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three (3) years with state regulatory bodies or professional organizations. Also, the firm shall provide information on any settled or pending litigation during the past five (5) years. H. Partner, Supervisory, and Staff Qualifications and Experience The firm should identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement and indicate whether each such person is licensed to practice as a certified public accountant in California. The firm also should provide information on the governmental auditing experience, including the scope of audit services requested by the City, of each person, and information on relevant continuing professional education for the past three (3) years and membership in professional organizations relevant to the performance of this audit. The firm should provide as much information as possible, including resumes, regarding the number, qualifications, experience and training of the specific staff to be assigned to this engagement. The firm also should indicate how the quality of staff over the term of the agreement will be assured. Engagement partners, managers, other supervisory staff and specialists may be changed if those personnel leave the firm, are promoted, or are assigned to another office. These personnel may also be changed for other reasons with the express 13

15 prior written permission of the City of Redwood City. However, in either case, the City of Redwood City retains the right to approve or reject replacements. Consultants and firm specialists mentioned in response to this request for proposals can only be changed with the express prior written permission of the City of Redwood City, which retains the right to approve or reject replacements. Other audit personnel may be changed at the discretion of the proposer provided that replacements have substantially the same or better qualifications or experience. I. Similar Engagements with Other Government Entities For the firm s office that will be assigned responsibility for the audit, list the most significant engagements (maximum of 10) performed in the last five years that are similar to the engagement described in this request for proposals. These engagements should be ranked on the basis of total staff hours. Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact. Also, please provide a list of government audit clients that your firm has audited within the past three years. J. Specific Audit Approach The proposal should set forth a work plan, including an explanation of the audit methodology to be followed, to perform the services required in Part III, Section B of this request for proposals. In developing the work plan, reference should be made to such sources of information as City of Lynwood budget and related materials, organizational charts, manuals, programs, and financial and other management information systems. Proposers will be required to provide the following information on their audit approach: a. Proposed segmentation for the engagement; b. Level of staff and number of hours to be assigned to each proposed segment of the engagement; c. Sample size and the extent to which statistical sampling is to be used in this engagement; d. Extent of use of EDP software in this engagement; e. Type and extent of analytical procedures to be used in this engagement; f. Approach to be taken to gain and document an understanding of the City s internal control structure; g. Approach to be taken in determining laws and regulations that will be subject to audit test work; and h. Approach to be taken in drawing audit samples for purposes of tests of compliance. K. Identification of Anticipated Potential Audit Problems The proposal should identify and describe any anticipated potential audit problems, 14

16 the firm s approach to resolving these problems and any special assistance that will be requested from the City of Redwood City. The Dollar-Cost proposal shall be organized and submitted with the following elements: A. Cover Page B. Total All-Inclusive Maximum Price The bid should contain all pricing information relative to performing the audit engagement as described in this request for proposals. The total all-inclusive maximum price to be bid is to contain all direct and indirect costs including all outof-pocket expenses and the itemized cost of preparing the CAFR. See Appendix A for the format of the pricing. C. Rates by Partner, Specialist, Supervisory, and Staff Level Times Hours Anticipated for Each The bid should include a schedule of professional fees and expenses, presented in Appendix B, that supports the total all-inclusive maximum price. V. Other Information A. Ownership of City-Related Documents All property rights, including publication rights of all reports produced by proposer in connection with services performed under this agreement, shall be vested in the City of Redwood City. The proposer selected shall not publish or release any of the results of its examinations without express written permission. B. Acceptance of Proposal Contents After auditors are selected by the City, the contents of the submitted proposal will become a contractual obligation. Failure of the auditors to agree to include the proposal as part of the contractual agreement may result in cancellation of the award. The City reserves the right to reject those parts that do not meet with the approval of the City. C. Acceptance or Rejection and Negotiation of Proposals The City reserves the right to reject any or all proposals, to waive non-material irregularities or information in the request for proposal, and to accept or reject any item or combination of items. By requesting proposals, the City is in no way obligated to award a contract or to pay expenses of the proposing firms in connection with the preparation or submission of a proposal. Furthermore, the City reserves the right to reject any and all proposals prior to the execution of the contract(s), with no penalty to the City of Redwood City. D. Exceptions to Specifications 15

17 Although the specifications in the requirements section represent the City's anticipated needs, there may be instances in which it is in the City's best interest to permit exceptions to specifications and accept alternatives. It is extremely important that Firms make very clear where an exception is taken to the specifications and how alternatives will be provided. Therefore, exceptions, conditions, or qualifications to the provisions of the City's specifications must be clearly identified as such, together with the reasons, and inserted in this section of the proposal. If the Firm does not make it clear that an exception is taken, the City will assume the proposal is responding to and will meet the specification as written. E. Certificate(s) of Insurance The City will require the successful proposer to provide Certificates of Insurance evidencing required coverage types and the minimum limits. See Appendix C for more information on the City s insurance requirements. VI. EVALUATION OF PROPOSALS Proposals will be judged on the Proposer s ability to provide services that meet the requirements set forth in this document. The City reserves the right to make such investigations as it deems necessary to determine the ability of the Proposer to provide services meeting a satisfactory level of performance in accordance with the City s requirements. Interviews and presentations by one, several, or all of the Proposers may be requested by evaluators if deemed necessary to fully understand and compare the Proposer s capabilities and qualifications. The adequacy, depth, and clarity of the proposal will influence, to a considerable degree, its evaluation. The criteria upon which evaluation of the proposals will be based include, but are not limited to the following: 1. Understanding of the work required by the City. 2. The ability of the Firm to provide excellent professional audit services to the City. 3. References from persons knowledgeable of the Firm s ability to fulfill the terms of the contract. 4. Economic feasibility and justification of all costs. 5. General and financial stability of the company and years in business. 6. Competence and professional qualifications necessary for successfully performing the work required by the City. 7. Proposed approach in completing the work. 8. Recent experience in successfully performing similar services. 16

18 9. Firm willingness and ability to negotiate a contract acceptable to the City. 10. Quality, clarity and responsiveness of the proposal and presentations (if required). The contract award will not be based solely on price, but on a combination of factors as determined to be in the best interest of the City. After evaluating the proposals and discussing them further with the finalists or the tentatively selected contractor, the City reserves the right to further negotiate the proposed work and/or method and amount of compensation. 17

19 Total All-Inclusive Maximum Price APPENDIX A Page 1 of the Dollar-Cost Proposal should contain the following table: City Audit Preparation of CAFR Port of Redwood City Measure A Compliance Audit City Single Audit Report* Port of Redwood City Single Audit Report* GANN Limit Utility Users Tax Fund Audit TDA Compliance Audit Management Report SCO Report - City SCO Report - PFA City Street Report Optional Years June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 Total *Assume one major program. Please provide a price for each additional major program, if required. 18

20 APPENDIX B Rates by Partner, Specialist, Supervisory, and Staff Level Times Hours Anticipated for Each Page 2 of the Dollar-Cost Proposal should contain the following tables for each component of the engagement for the fiscal year ending June 30, There are 13 components, as listed in Appendix A. Partner Standard Quoted Hours Hourly Rates Hourly Rates Total Manager Supervisory Staff Staff Other (Specify): Sub-Total Out-of-Pocket Expenses Total All-Inclusive Maximum Price 19

21 APPENDIX C SAMPLE PROFESSIONAL SERVICES AGREEMENT AGREEMENT FOR PROFESSIONAL SERVICES THIS AGREEMENT is made and entered into as of the day of, 201_, by and between the CITY OF REDWOOD CITY, a charter city and municipal corporation of the State of California ("City"), and ("Consultant"). RECITALS A. City requires the professional services of a. B. Consultant has the necessary experience in providing professional services and advice. C. Selection of Consultant is expected to achieve the desired results in an expedited fashion. D. Consultant 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, the Parties agree as follows: 1. Scope of Work. City retains Consultant to perform, and Consultant agrees to render, those services (the "Services") that are defined in attached Exhibit "A," which is incorporated herein by reference. In the event of a conflict between the provisions of Exhibit A and the terms of this Agreement, the terms of this Agreement shall prevail. City shall have the right to modify the scope of work to delete tasks in whole or in part. 2. Standard of Performance. While performing the Services, Consultant will exercise the reasonable professional care and skill customarily exercised by reputable members of Consultant's profession practicing in the urban Northern California Area, and will use reasonable diligence and best judgment while exercising its professional skill and expertise. 3. Term. Unless earlier terminated, the term of this Agreement will commence upon the date first above written and shall expire upon completion of performance of Services hereunder by Consultant. 4. Schedule. Consultant will adhere to the schedule set forth in Exhibit A, provided, that City in its discretion may grant reasonable extensions of time for the performance of such services occasioned by unusually lengthy governmental reviews of Consultant s work product or other unavoidable delays occasioned by circumstances; provided, further, that such unavoidable delay will not include strikes, lockouts, work stoppages, or other labor disturbances conducted by, or on behalf of, Consultant s officers or employees. Consultant acknowledges the importance to City of City s project schedule and agrees to use its best professional efforts to meet the schedule. City understands that Consultant s performance must be 20

22 APPENDIX C governed by sound practices. 5. Time is of the Essence. Time is of the essence for each and every provision of this Agreement. 6. Compensation. City shall pay to Consultant an amount not to exceed Dollars ($ ) for the completion of all the work and services described herein, which sum shall include all costs or expenses incurred by Consultant, payable as set forth in Exhibit B, attached hereto and made a part hereof by reference. 6.1 An application for payment form must be submitted to City which shall include the following: a clear, detailed invoice reflecting work being billed for, a summary sheet showing hourly rates, hours worked, percentage of work completed to date, amount/percent billed to date and current status of all tasks within a project; any/all backup documentation supporting the above items. Work schedule updates must also be included with the payment requests. 6.2 Consultant shall maintain adequate records and shall permit inspection and audit by City of Consultant's charges under this Contract. Consultant shall make such records available to City during normal business hours upon reasonable notice. Nothing herein shall convert such records into public records, and they will be available only to City and any specified public agencies. Such records shall be maintained by Consultant for one (1) year following completion of the work under this Contract unless a longer period of time is required by state or federal law, in which event Consultant shall retain its records for the time required by such laws Compensation. The total fee payable for the Services to be performed during the initial term of this Agreement will be $. No other compensation for the Services will be allowed except for items covered by subsequent amendments to this Agreement. City has the authority to withhold a 10% percent retention until City has accepted all of the services specified in Exhibit "A." Incremental payments, if applicable, will be made as outlined in attached Exhibit "A." 6.4 An application for payment form must be submitted to City which shall include the following: a clear, detailed invoice reflecting work being billed for, a summary sheet showing hourly rates, hours worked, percentage of work completed to date, amount/percent billed to date and current status of all tasks within a project; any/all backup documentation supporting the above items. Work schedule updates must also be included with the payment requests. 6.5 Consultant shall maintain adequate records and shall permit inspection and audit by City of Consultant's charges under this Contract. Consultant shall make such records available to City during normal business hours upon reasonable notice. Nothing herein shall convert such records into public records, and they will be available only to City and any specified public agencies. Such records shall be maintained by Consultant for one (1) year following completion of the work under this Contract unless a longer period of time is required by state or federal law, in which event Consultant shall retain its records for the time required by such laws. 21

23 APPENDIX C 6.6. The payment made to Consultant pursuant to the Agreement will be the full and complete compensation to which Consultant is entitled. City will not make any federal or state tax withholdings on behalf of Consultant or its agents, employees or subcontractors. City will not be required to pay any workers' compensation insurance or unemployment contributions on behalf of Consultant or its employees or subcontractors. Consultant agrees to reimburse City within thirty (30) days for any tax, retirement contribution, social security, overtime payment, unemployment payment or workers' compensation payment which City makes on behalf of Consultant or any agent, employee, or subcontractor of Consultant for work done under this Agreement. At the City s election, City may deduct the reimbursable amount from any balance owing to Consultant. 7. Status of Consultant. Consultant will perform the Services as an independent contractor and not as an employee of City. The persons used by Consultant to provide services under this Agreement shall not be considered employees of City for any purposes. 8. Subcontracting. Consultant will not subcontract any portion of the Services without prior written approval of City Manager or his/her designee. If Consultant subcontracts any of the Services, Consultant will be fully responsible to City for the acts and omissions of Consultant's subcontractor and of the persons either directly or indirectly employed by the subcontractor, as Consultant is for the acts and omissions of persons directly employed by Consultant. Nothing contained in this Agreement will create any contractual relationship between any subcontractor of Consultant and City. Consultant will be responsible for payment of subcontractors. Consultant will bind every subcontractor and every subcontractor of a subcontractor by the terms of this Agreement applicable to Consultant's work unless specifically noted to the contrary in the subcontract and approved in writing by City. 9. Other Consultants. City reserves the right to employ other consultants in connection with the Services. 10. Indemnification. Consultant will defend, indemnify and hold harmless City and its officers, agents, employees and volunteers from and against all claims, damages, losses and expenses including attorney fees arising out of the performance of the Services, caused in whole or in part by the willful misconduct or any negligent act or omission of the Consultant, any subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, except where caused by the sole negligence or willful misconduct of City. The Parties expressly agree that any reasonable payment, attorney's fee, cost 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. The parties expressly agree that this section shall survive the expiration or early termination of the Agreement. 11. Insurance. Consultant shall 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 Consultant or Consultant s agents, representatives, employees or subcontractors. The insurance carrier is required to maintain an A.M. Best rating of not less than A-:VII. 22

24 APPENDIX C 11.1 Coverages and Limits. Consultant, at its sole expense, shall maintain the types of coverages and minimum limits indicated below, unless otherwise approved by City in writing. These minimum amounts of coverage will not constitute any limitations or cap on Consultant's indemnification obligations under this Agreement Commercial General Liability Insurance. Consultant shall maintain occurrence based coverage with limits not less than $2,000,000 per occurrence. If the submitted policies contain aggregate limits, such limits will apply separately to the Services, project, or location that is the subject of this Agreement or the aggregate will be twice the required per occurrence limit. The Commercial General Liability insurance policy shall be endorsed to name the City, its officers, agents, employees and volunteers as additional insureds, and to state that the insurance will be primary and not contribute with any insurance or self-insurance maintained by the City Business Automobile Liability Insurance. Consultant shall maintain coverage with limits not less than $1,000,000 per each accident for owned, hired and non-owned automobiles Workers' Compensation Insurance. Consultant shall maintain coverage as required by the California Labor Code. The Workers Compensation policy shall contain an endorsement stating that the insurer waives any right to subrogation against the City, its officers, agents, employees and volunteers Employer's Liability Insurance. Consultant shall maintain coverage with limits not less than $1,000,000 per each accident for bodily injury or disease Professional Liability Insurance. Consultant shall maintain coverage with limits not less than $2,000,000 per occurrence. Professional Liability may be written as claimsmade coverage Notice of Cancellation. This insurance will be in force during the life of the Agreement and any extensions of it and will not be canceled without Consultant providing thirty (30) days prior written notice to City sent pursuant to the Notice provisions of this Agreement Providing Certificates of Insurance and Endorsements. Prior to City s execution of this Agreement, Consultant shall provide to City certificates of insurance and above-referenced endorsements sufficient to satisfaction of City s Risk Manager. In no event shall Consultant commence any work or provide any Services under this Agreement until certificates of insurance and endorsements have been accepted by City s Risk Manager Failure to Maintain Coverage. If Consultant fails to comply with these insurance requirements, then City will have the option to declare Consultant in breach, or may purchase replacement insurance or pay the premiums that are due on existing policies in order to maintain the required coverages. Consultant is responsible for any payments made by City to obtain or maintain insurance and City may collect these payments from Consultant or deduct the amount paid from any sums due Consultant under this Agreement Submission of Insurance Policies. City reserves the right to require, at any time, complete 23