HomeMy WebLinkAboutFin Accounting & Financial Reporting 2015c►rr of Agenda Item No: 3. f
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Meeting Date: April 6, 2015
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: Finance �A
Prepared by: Mark Moses � City Manager Approval • LXX
Finance Director
SUBJECT: A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE
AN AGREEMENT WITH VAVRINEK, TRINE, DAY & CO, LLP FOR
ACCOUNTING AND FINANCIAL REPORTING RELATED SERVICES
RECOMMENDATION: ADOPT RESOLUTION
BACKGROUND: The City's Finance Department has two authorized professional accounting
staff: one Senior Accountant and one Accountant MI. These two positions are responsible for
reviewing and generating entries to the City's accounting system, maintaining the integrity of the
City's 42 funds, generating financial and audit reports, including the City's Comprehensive
Annual Financial Report and State Controller's Reports. These two positions also double as
budget support to departments, assisting them with budget development, as well as with the
monitoring of their resources throughout the year. The Senior Accountant is the central point
person for the City's annual financial audit, single audit (federal grants), and technical accounting
support.
After seven years with the City, the Senior Accountant resigned in early February in order to
accept a management position in another city. The remaining accountant is planning to retire
later in the calendar year. On March 2, 2015, the City closed a recruitment effort for these two
positions. The recruitment for Senior Accountant yielded one qualified candidate who did not
accept the City's employment offer. The selection process for the Accountant I/II is still active
and its final outcome is uncertain.
The purpose of this proposed contract is to establish a resource that will assist the City in
managing through the transition of 100% of its core, professional accounting staff in a period of
less than a year.
Staff discussed the Finance Department's staffing situation with the City Council Finance
Committee at its meeting of March 12, 2015.
FOR CITY CLERK ONLY
File No.: ll -~ 5-�
Council Meeting: 14
Disposition: 12, 8, �
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
ANALYSIS: In order to maintain continuity through the turnover of accounting staff, the
Finance Department management considered a number of potential resources, including retired
finance and accounting professionals, as well as firms that specialize in temporary accounting
and finance staff placements. Due to the strong emphasis of the vacant Senior Accountant
position on technical compliance with accounting rules (GASB and GAAP) and the
implementation of the ProSystems financial reporting software (acquired in July 2014 to assist
the City with internal production of its financial statements) and GASB 68 (the new accounting
pronouncement governing the reporting of pension liabilities and expenses), the City staff
initiated a short-term trial engagement with Vavrinek, Trine, Day & Co., (VTD) in January 2015.
VTD is a well-established, regional government accounting firm with offices throughout
California. The City successfully engaged with VTD in 2006 to backfill several daily, weekly and
monthly accounting tasks that had been performed by an accountant who had been promoted to
another position.
The City's annual audit schedule includes an interim financial audit in early April and several
important preliminary year-end close activities that take place in May and June. The City
continues to use a senior accountant level consultant assigned from VTD two days per week to
ensure that critical tasks are completed on time.
The precise role to that VTD will play after successful hiring of the two accounting positions will
depend upon the background, experience and aptitude of those who eventually assume these roles
and responsibilities. At a minimum, VTD will assist with orienting and training the new staff on
the City's accounting procedures and systems. To the extent that either or both of these positions
are not filled in a timely manner, VTD will fill the staffing gap throughout the development and
production of the City's audited financial statements and other required annual reports.
FISCAL IMPACT: The proposed contract with VTD has a limit of $60,000. This amount is
intended to cover the City's professional accounting and financial reporting needs through
December 31, 2015.
There are sufficient resources appropriated in the General Fund for these services, due to the
accounting staff vacancy for which this contract is designed to backfill critical professional
services.
RECOMMENDATION: Adopt Resolution.
ATTACHMENTS
Resolution
Agreement for Professional Services with Vavrinek, Trine, Day & Co., LLP
RESOLUTION NO. 13899
A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN
AGREEMENT WITH VAVRINEK, TRINE, DAY& CO. FOR ACCOUNTING AND
FINANCIAL REPORTING SERVICES
WHEREAS, the City of San Rafael's finance department has two authorized
professional staff who provide the central accounting and financial reporting function for the
City; and
WHEREAS, the senior accountant position has been vacant since February 9, 2015 and
attempts since that time to fill the position have been unsuccessful; and
WHEREAS, the City of San Rafael's Finance Department has previous, positive
experience with and results from the use of professional, accounting staff from the firm
Vavrinek, Trine, Day & Co. when staffing gaps existed in past years; and
WHEREAS, staff has used the services of Vavrinek, Trine, Day & Co. on a limited basis
since January 2015, in anticipation of the senior accountant vacancy, and recommends continued
use of these services.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN RAFAEL
HEREBY RESOLVES AS FOLLOWS:
The City Council of the City of San Rafael hereby approves and authorizes the City
Manager to execute an Agreement between the City of San Rafael and Vavrinek, Trine, Day &
Co. for accounting and financial reporting services with a not -to -exceed amount of $60,000,
including expenses, in a form approved by the City Attorney's Office and effective upon contract
execution.
I, Esther C. Beirne, Clerk of the City of San Rafael, hereby certify that the foregoing
Resolution was duly and regularly introduced and adopted at a regular meeting of the San Rafael
City Council held on the 6`h day of April, 2015, by the following vote to wit:
AYES: Councilmembers: Bushey, Colin, Gamblin and Mayor Phillips
NOES: Councilmembers: None
ABSENT: Councilmembers: McCullough
%j2 st c l— G . R Z.,
ESTHER C. BEI:RNE, City Clerk
AGREEMENT FOR PROFESSIONAL SERVICES
FOR ACCOUNTING AND FINANCIAL REPORTING SERVICES
This Agreement is made and entered into this b? -11 day of April, 2015, by and between the
CITY OF SAN RAFAEL (hereinafter "CITY"), and VAVRINEK, TRINE, DAY & CO, LLP
(hereinafter "CONTRACTOR").
1. PROJECT COORDINATION.
A. CITY'S Project Manager. The Finance Director is hereby designated the
PROJECT MANAGER for the CITY, and said PROJECT MANAGER shall supervise all aspects
of the progress and execution of this Agreement.
B. CONTRACTOR'S Project Director. CONTRACTOR shall assign a single
PROJECT DIRECTOR to have overall responsibility for the progress and execution of this
Agreement for CONTRACTOR. Joe Aguilar is hereby designated as the PROJECT DIRECTOR
for CONTRACTOR. Should circumstances or conditions subsequent to the execution of this
Agreement require a substitute PROJECT DIRECTOR, for any reason, the CONTRACTOR shall
notify the CITY within ten (10) business days of the substitution.
2. DUTIES OF CONTRACTOR.
CONTRACTOR shall perform the duties and/or provide services as described in the
attached Exhibit A.
3. DUTIES OF CITY.
CITY shall cooperate with the CONTRACTOR in its perfonnance under this agreement,
and pay the compensation as provided in Paragraph 4.
4. COMPENSATION.
For the full performance of the services described herein by CONTRACTOR, CITY shall
pay CONTRACTOR, pursuant to the schedule of CONTRACTOR'S fees which is included in
attached Exhibit A, an arnount not to exceed $60,000, including expenses.
Payment will be made monthly upon receipt by PROJECT MANAGER of itemized
invoices submitted by CONTRACTOR.
5. TERM OF AGREEMENT.
The term of this Agreement shall be from the date of execution through December 31, 2015.
Upon written agreement of the PROJECT MANAGER and PROJECT DIRECTOR, the terns of
this Agreement can be extended for an additional period of up to the earlier of 90 days, or when the
not -to -exceed limit of this contract is reached.
T
Rev. Date: 3/17415 1
6. TERMINATION.
A. Discretionary. Either party may terminate this Agreement without cause upon
thirty (30) days written notice mailed or personally delivered to the other party.
B. Cause. Either party may terminate this Agreement for cause upon fifteen (15) days
written notice mailed or personally delivered to the other party, and the notified party's failure to
cure or correct the cause of the termination, to the reasonable satisfaction of the party giving such
notice, within such fifteen (15) day time period.
C. Effect of Termination. Upon receipt of notice of termination, neither party shall
incur additional obligations under any provision of this Agreement without the prior written consent
of the other.
D. Return of Documents. Upon termination, any and all CITY documents or
materials provided to CONTRACTOR and any and all of CONTRACTOR's documents and
materials prepared for or relating to the performance of its duties under this Agreement, shall be
delivered to CITY as soon as possible, but not later than thirty (30) days after termination.
7. OWNERSHIP OF DOCUMENTS.
The written documents and materials prepared by the CONTRACTOR in connection with
the performance of its duties under this Agreement, shall be the sole property of CITY. CITY may
use said property for any purpose, including projects not contemplated by this Agreement.
8. INSPECTION AND AUDIT.
Upon reasonable notice, CONTRACTOR shall make available to CITY, or its agent, for
inspection and audit, all documents and materials maintained by CONTRACTOR in connection
with its perfonnance of its duties under this Agreement. CONTRACTOR shall fully cooperate
with CITY or its agent in any such audit or inspection.
9. ASSIGNABILITY.
The parties agree that they shall not assign or transfer any interest in this Agreement nor the
perfonnance of any of their respective obligations hereunder, without the prior written consent of
the other party, and any attempt to so assign this Agreement or any rights, duties or obligations
arising hereunder shall be void and of no effect.
10. INSURANCE.
A. Scope of Coverage. During the tern of this Agreement, CONTRACTOR shall
maintain, at no expense to CITY, the following insurance policies:
A commercial general liability insurance policy in the minimum amount of
one million dollars ($1,000,000) per occurrence/two million dollars ($2,000,000) aggregate, for
death, bodily injury, personal injury, or property damage.
2. An automobile liability (owned, non -owned, and hired vehicles) insurance
policy in the minimum amount of one million dollars ($1,000,000) dollars per occurrence.
3. If any licensed professional performs any of the services required to be
performed under this Agreement, a professional liability insurance policy in the minimum amount
of one million dollars ($1,000,000) per occurrence/two million dollars ($2,000,000) aggregate, to
cover any claims arising out of the CONTRACTOR's performance of services tinder this
Agreement. Where CONTRACTOR is a professional not required to have a professional license,
CITY reserves the right to require CONTRACTOR to provide professional liability insurance
pursuant to this section.
4. If it employs any person, CONTRACTOR shall maintain worker's
compensation and employer's liability insurance, as required by the State Labor Code and other
applicable laws and regulations, and as necessary to protect both CONTRACTOR and CITY
against all liability for injuries to CONTRACTOR's officers and employees. CONTRACTOR'S
worker's compensation insurance shall be specifically endorsed to waive any right of subrogation
against CITY.
B. Other Insurance Requirements. The insurance coverage required of the
CONTRACTOR in subparagraph A of this section above shall also meet the following
requirements:
1. Except for professional liability insurance, the insurance policies shall be
specifically endorsed to include the CITY, its officers, agents, employees, and volunteers, as
additionally named insureds under the policies.
2. The additional insured coverage under CONTRACTOR'S insurance
policies shall be primary with respect to any insurance or coverage maintained by CITY and shall
not call upon CITY's insurance or self-insurance coverage for any contribution. The "primary and
noncontributory" coverage in CONTRACTOR'S policies shall be at least as broad as ISO form
CG20 0104 13.
3. Except for professional liability insurance, the insurance policies shall
include, in their text or by endorsement, coverage for contractual liability and personal injury.
4. The insurance policies shall be specifically endorsed to provide that the
insurance carrier shall not cancel, terminate or otherwise modify the terms and conditions of said
insurance policies except upon ten (10) days written notice to the PROJECT MANAGER.
5. If the insurance is written on a Claims Made Form, then, following
termination of this Agreement, said insurance coverage shall survive for a period of not less than
five years.
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6. The insurance policies shall provide for a retroactive date of placement
coinciding with the effective date of this Agreement.
7. The limits of insurance required in this Agreement may be satisfied by a
combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall
contain or be endorsed to contain a provision that such coverage shall also apply on a primary and
noncontributory basis for the benefit of CITY (if agreed to in a written contract or agreement)
before CITY'S own insurance or self-insurance shall be called upon to protect it as a named
insured.
8. It shall be a requirement under this Agreement that any available insurance
proceeds broader than or in excess of the specified minimum insurance coverage requirements
and/or limits shall be available to CITY or any other additional insured party. Furthermore, the
requirements for coverage and limits shall be: (1) the minimum coverage and limits specified in this
Agreement; or (2) the broader coverage and maximum limits of coverage of any insurance policy or
proceeds available to the named insured; whichever is greater.
C. Deductibles and SIR's. Any deductibles or self-insured retentions in
CONTRACTOR's insurance policies must be declared to and approved by the PROJECT
MANAGER and City Attorney, and shall not reduce the limits of liability. Policies containing any
self-insured retention (SIR) provision shall provide or be endorsed to provide that the SIR may be
satisfied by either the named insured or CITY or other additional insured party. At CITY's option,
the deductibles or self-insured retentions with respect to CITY shall be reduced or eliminated to
CITY's satisfaction, or CONTRACTOR shall procure a bond guaranteeing payment of losses and
related investigations, claims administration, attorney's fees and defense expenses.
D. Proof of Insurance. CONTRACTOR shall provide to the PROJECT
MANAGER or CITY'S City Attorney all of the following: (1) Certificates of Insurance evidencing
the insurance coverage required in this Agreement; (2) a copy of the policy declaration page and/or
endorsement page listing all policy endorsements for the commercial general liability policy, and
(3) excerpts of policy language or specific endorsements evidencing the other insurance
requirements set forth in this Agreement. CITY reserves the right to obtain a full certified copy of
any insurance policy and endorsements from CONTRACTOR. Failure to exercise this right shall
not constitute a waiver of the right to exercise it later. The insurance shall be approved as to form
and sufficiency by PROJECT MANAGER and the City Attorney.
11. INDEMNIFICATION.
A. Except as otherwise provided in Paragraph B., CONTRACTOR shall, to the
fullest extent permitted by law, indemnify, release, defend with counsel approved by CITY, and
hold harmless CITY, its officers, agents, employees and volunteers (collectively, the "City
Indemnitees"), from and against any claim, demand, suit, judgment, loss, liability or expense of
any kind, including but not limited to attorney's fees, expert fees and all other costs and fees of
litigation, (collectively "CLAIMS"), arising out of CONTRACTOR'S performance of its
obligations or conduct of its operations under this Agreement. The CONTRACTOR's
2
obligations apply regardless of whether or not a liability is caused or contributed to by the active
or passive negligence of the City Indemnitees. However, to the extent that liability is caused by
the active negligence or willful misconduct of the City Indemnitees, the CONTRACTOR's
indemnification obligation shall be reduced in proportion to the City Indemnitees' share of
liability for the active negligence or willful misconduct. In addition, the acceptance or approval
of the CONTRACTOR's work or work product by the CITY or any of its directors, officers or
employees shall not relieve or reduce the CONTRACTOR's indemnification obligations. In the
event the City Indemnitees are made a party to any action, lawsuit, or other adversarial
proceeding arising from CONTRACTOR'S performance of or operations under this
Agreement, CONTRACTOR shall provide a defense to the City Indemnitees or at CITY'S
option reimburse the City Indemnitees their costs of defense, including reasonable attorneys'
fees, incurred in defense of such claims.
B. Where the services to be provided by CONTRACTOR under this Agreement are
design professional services to be performed by a design professional as that term is defined
under Civil Code Section 2782.8, CONTRACTOR shall, to the fiillest extent permitted by law,
indemnify, release, defend and hold harmless the City Indemnitees from and against any
CLAIMS that arise out of, pertain to, or relate to the negligence, recklessness, or willful
misconduct of CONTRACTOR in the performance of its duties and obligations under this
Agreement or its failure to comply with any of its obligations contained in this Agreement,
except such CLAIM which is caused by the sole negligence or willful misconduct of CITY.
C. The defense and indemnification obligations of this Agreement are undertaken in
addition to, and shall not in any way be limited by the insurance obligations contained in this
Agreement, and shall survive the termination or completion of this Agreement for the full period
of time allowed by law.
12. NONDISCRIMINATION.
CONTRACTOR shall not discriminate, in any way, against any person on the basis of age,
sex, race, color, religion, ancestry, national origin or disability in connection with or related to the
performance of its duties and obligations under this Agreement.
13. COMPLIANCE WITH ALL LA
CONTRACTOR shall observe and comply with all applicable federal, state and local laws,
ordinances, codes and regulations, in the performance of its duties and obligations under this
Agreement. CONTRACTOR shall perform all services under this Agreement in accordance with
these laws, ordinances, codes and regulations. CONTRACTOR shall release, defend, indemnify
and hold harmless CITY, its officers, agents and employees from any and all damages, liabilities,
penalties, fines and all other consequences from any noncompliance or violation of any laws,
ordinances, codes or regulations.
I
14. NO THIRD PARTY BENEFICIARIES.
CITY and CONTRACTOR do not intend, by any provision of this Agreement, to create in
any third party, any benefit or right owed by one party, under the terms and conditions of this
Agreement, to the other party.
15. NOTICES.
All notices and other cornmunications required or pennitted to be given under this
Agreement, including any notice of change of address, shall be in writing and given by personal
delivery, or deposited with the United States Postal Service, postage prepaid, addressed to the
parties intended to be notified. Notice shall be deemed given as of the date of personal delivery, or
if mailed, upon the date of deposit with the United States Postal Service. Notice shall be given as
follows:
TO CITY's Project Manager:
TO CONTRACTOR's Project Director:
16. INDEPENDENT CONTRACTOR.
Mark Moses, Finance Director
City of San Rafael
1400 Fifth Avenue
P.O. Box 151560
San Rafael, CA 94915-1560
Joe Aguilar
Vavrinek, Trine, Day & Co., LLP
2151 River Plaza Drive, Suite 308
Sacramento, CA 95833
For the purposes, and for the duration, of this Agreement, CONTRACTOR, its officers,
agents and employees shall act in the capacity of an Independent Contractor, and not as employees
of the CITY. CONTRACTOR and CITY expressly intend and agree that the status of
CONTRACTOR, its officers, agents and employees be that of an Independent Contractor and not
that of an employee of CITY.
17. ENTIRE AGREEMENT -- AMENDMENTS.
A. The terms and conditions of this Agreement, all exhibits attached, and all documents
expressly incorporated by reference, represent the entire Agreement of the parties with respect to the
subject matter of this Agreement.
B. This written Agreement shall supersede any and all prior agreements, oral or written,
regarding the subject matter between the CONTRACTOR and the CITY.
C. No other agreement, promise or statement, written or oral, relating to the subject
matter of this Agreement, shall be valid or binding, except by way of a written amendment to this
Agreement.
1.1
D. The terms and conditions of this Agreement shall not be altered or modified except
by a written amendment to this Agreement signed by the CONTRACTOR and the CITY.
E. If any conflicts arise between the terms and conditions of this Agreement, and the
terms and conditions of the attached exhibits or the documents expressly incorporated by reference,
the terms and conditions of this Agreement shall control.
18. SET-OFF AGAINST DEBTS.
CONTRACTOR agrees that CITY may deduct from any payment due to
CONTRACTOR under this Agreement, any monies which CONTRACTOR owes CITY under
any ordinance, agreement, contract or resolution for any unpaid taxes, fees, licenses, assessments,
unpaid checks or other amounts.
19. WAIVERS.
The waiver by either party of any breach or violation of any term, covenant or condition of
this Agreement, or of any ordinance, law or regulation, shall not be deemed to be a waiver of any
other term, covenant, condition, ordinance, law or regulation, or of any subsequent breach or
violation of the same or other teen, covenant, condition, ordinance, law or regulation. The
subsequent acceptance by either party of any fee, performance, or other consideration which may
become due or owing under this Agreement, shall not be deemed to be a waiver of any preceding
breach or violation by the other party of any term, condition, covenant of this Agreement or any
applicable law, ordinance or regulation.
20. COSTS AND ATTORNEY'S FEES.
The prevailing party in any action brought to enforce the terms and conditions of this
Agreement, or arising out of the performance of tlis Agreement, may recover its reasonable costs
(including claims administration) and attorney's fees expended in connection with such action.
21. CITY BUSINESS LICENSE / OTHER TAXES.
CONTRACTOR shall obtain and maintain during the duration of tlis Agreement, a CITY
business license as required by the San Rafael Muricipal Code CONTRACTOR shall pay any and
all state and federal taxes and any other applicable taxes. CITY shall not be required to pay for any
work perforned under this Agreement, until CONTRACTOR has provided CITY with a
completed Internal Revenue Service Form W-9 (Request for Taxpayer Identification Number and
Certification).
22. APPLICABLE LAW.
The laws of the State of California shall govern this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day, month
and year first above written.
CITY OF SAN RAFAEL
ATTEST:
ESTHER C. BEIRNE, City Clerk
APPROVED AS TO FORM:
ROBERT F. EPSTEIN, City A . orney
CONTRACTOR
By:
Name: oSep lay-
Title:
rTitle: r a -y- t"hP- r
ur.re I
wo,
March 30, 2015
Attn: Mark Moses
City of San Rafael
1400 Fifth Avenue
San Rafael, CA 94915
Vavrinek, Trine, Day & Co., LLP
Certified Public Accountants
Re: Financial and Accounting Services
Dear Mark:
This engagement letter is to update our agreement for non -audit services with the City of San Rafael (the
"City"). The standards to which Vavrinek Trine Day & Co., LLP ("VTD") will conform are intended to
maintain objectivity and independence for both audit work and for non -audit work with government audit
clients.
The standard for non -audit services for government audit clients is based on two overarching principles:
■ Auditors (VTD) should not perform management functions or make management decisions; and
■ Auditors (VTD) should not audit their own work or provide non -audit services in situations where
the amounts or services involved are significant / material to the subject matter of the audit.
Based upon these principles, VTD will not be considered to be independent for the purposes of
performing attest work (auditing) for the City covering fiscal years 2014-15.
OBJECTIVE OF ENGAGEMENT
The firm of Vavrinek Trine Day & Co., LLP is available to assist you with financial consulting and
accounting services covering your accounting records. Our firm is ready to begin work on this project
whenever your City is ready to commence.
SCOPE OF WORK
Specific services to be provided follow.
• Assist in preparing for interim audit work
• Assist City in preparing quarterly closings and preparing quarterly financials
• Assist City in preparing government -wide updates and adjustments
• Assist City in drafting note disclosures for annual financial statements
• Assist City in populating financial information for fiscal year ending June 2015
• Assist City in developing variance reports for analytical review at year end
• Work with City staff in segregating output reports between its regular accounting software
(EDEN) and its report writer software (ProSystems)
• Assist the City in preparing note disclosures on pensions and other reporting changes mandated
by GASB 68
• Assist with federal, state and local financial reporting.
• Assist in drafting financial statements and preparing reconciling adjustments.
2151 River Plaza Drive Suite 308 Sacramento, CA 95833 Tel 916.570.1880 Fax: 916.570.1875 www.vtdcpa com
FRESNO . LAGUNA HILLS - PALO ALTO . PLEASANTON . RANCHO CUCAMONGA - RIVERSIDE . SACRAMENTO
Exhibit A
• We will provide accounting assistance in closing the City's books each month.
• Assist the City in analyzing various balance sheet accounts, expenses and revenues.
CLIENT RESPONSIBILITIES
The work will be non -audit services as defined by Governmental Auditing Standards issued by the
Comptroller General of the United States. Our work will not constitute an audit or review of transactions
and should not be relied upon as such. The City is responsible for the appropriate recording and reporting
of financial transactions and management decisions. Accordingly, all work will be conducted at your
direction, the direction of the Director of Finance, to insure that the work meets the City's objectives.
The Director of Finance will be responsible for reviewing and accepting any work product directly
prepared by VTD, including any adjustments to the accounting records that may be proposed by VTD, or
reports drafted by VTD during the engagement.
Governmental Auditing Standards require that the City be responsible for the substantive outcomes of
VTD work and be in a position in fact and appearance to make an informed judgment on the results of the
non -audit services and that the City of San Rafael:
• Designate a knowledge management level individual to be responsible and accountable for
overseeing the non -audit services
• Establishes and monitors the performance of the non -audit services to ensure that it meets
management's objectives.
• Makes any decisions that involve management functions related to the non -audit services and
accepts full responsibility for such decisions.
• Evaluates the adequacy of the services performed and any findings that result.
STAFFING
Vavrinek, Trine, Day & Co., LLP has owners that are not licensed as certified public accountants as
permitted under Section 5079 of the California Business and Professions Code. It is not anticipated that
any of the non -licensee owners will be performing audit services for the agency.
FEES
We estimate a price of $60,000 unless otherwise agreed to by the City in writing. Invoices will be
submitted monthly and are due upon receipt. Hourly rates are effective through December 31, 2015.
VTD Staff
Hourly Rate
Partner
$190
Manager
$160
Accounting Supervisor
$130
Senior Accountant (Nick Rosas)
$95
Staff Accountant (Phuong Nguyen)
$80
TERMINATION OF ENGAGEMENT
The engagement may be terminated by either party without cause.
INDEPENDENT CONTRACTOR
We are an independent contractor as defined by Federal and State taxing authorities.
INSURANCE
We maintain current worker compensation and liability insurance policies.
If this letter correctly sets forth your understanding of the terms and objectives of the engagement, please
so indicate by signing in the space provided below.
Agreed to by:
z"
Joseph Aguilar
Signature:
Print Name
Of Vavrinek Trine Day & Co., LLP Of City of San Rafael
Date: Date:
PROFESSIONAL SERVICES AGREEMENT/CONTRACT
COMPLETION CHECKLIST AND ROUTING SLIP
Below is the process for getting your professional services agreements/contracts finalized and
executed. Please attach this "Completion Checklist and Routing Slip" to the front of your
contract as you circulate it for review and signatures. Please use this form for all professional
services aereements/contracts (not just those requiring City Council approval).
This process should occur in the order presented below.
Step
Responsible
Description
Completion
Department
Date
1
City Attorney
Review, revise, and comment on draft
March 17,
agreement.
2015
2
Contracting Department
Forward final agreement to contractor for
October 15,
their signature. Obtain at least two signed
2015
originals from contractor.
3
Contracting Department
Agendize contractor -signed agreement for
April 6, 2015
Council approval, if Council approval
City Council
necessary (as defined by City Attorney/City
Approval
Ordinance*).
4
City Attorney
Review and approve form of agreement;
March 17,
bonds, and insurance certificates and
2015
endorsements.
5
City Manager / Mayor / or
Agreement executed by Council authorized
Department Head
official.
6
City Clerk
City Clerk attests signatures, retains original
agreement and forwards copies to the
contractin department.
n'
To be completed by Contracting Department:
Project Manager:
Project Name:
Agendized for City Council Meeting of (if necessary):
FPPC: ❑ , check if required
If you have questions on this process, please contact the City Attorney's Office at 485-3080.
* Council approval is required if contract is over $20,000 on a cumulative basis.
CITY OF SAN RAFAEL
ROUTING SLIP / APPROVAL FORM
INSTRUCTIONS: USE THIS FORM WITH EACH SUBMITTAL OFA CONTRACT, AGREEMENT,
ORDINANCE OR RESOLUTION BEFORE APPROVAL BY COUNCIL / AGENCY.
SRRA / SRCC AGENDA ITEM NO. 9j •-fr-
DATE OF MEETING:
April 6, 2015
FROM: Mark Moses
DEPARTMENT: Finance
DATE: April 1, 2015
TITLE OF DOCUMENT: A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN
AGREEMENT WITH VAVRINEK, TRINE, DAY& CO. FOR ACCOUNTING AND FINANCIAL REPORTING
SERVICES
Department Head (signature)
(LOWER HALF OF FORM FOR APPROVALS ONLY)
APPROVED AS COUNCIL / AGENCY
AGENDA ITEM:
City Man ger (signature)
NOT APPROVED
REMARKS:
APPROVED AS TO FORM:
er-
City Attorney (signature)
AGREEMENT FOR PROFESSIONAL SERVICES
FOR ACCOUNTING AND FINANCIAL REPORTING SERVICES
This Agreement is made and entered into this day of April, 2015, by and between the
CITY OF SAN RAFAEL (hereinafter "CITY"), and VAVRINEK, TRINE, DAY & CO, LLP
(hereinafter "CONTRACTOR").
1. PROJECT COORDINATION.
A. CITY'S Project Manager. The Finance Director is hereby designated the
PROJECT MANAGER for the CITY, and said PROJECT MANAGER shall supervise all aspects
of the progress and execution of this Agreement.
B. CONTRACTOR'S Project Director. CONTRACTOR shall assign a single
PROJECT DIRECTOR to have overall responsibility for the progress and execution of this
Agreement for CONTRACTOR. Joe Aguilar is hereby designated as the PROJECT DIRECTOR
for CONTRACTOR. Should circumstances or conditions subsequent to the execution of this
Agreement require a substitute PROJECT DIRECTOR, for any reason, the CONTRACTOR shall
notify the CITY within ten (10) business days of the substitution.
2. DUTIES OF CONTRACTOR.
CONTRACTOR shall perform the duties and/or provide services as described in the
attached Exhibit A.
3. DUTIES OF CITY.
CITY shall cooperate with the CONTRACTOR in its performance under this agreement,
and pay the compensation as provided in Paragraph 4.
4. COMPENSATION.
For the full performance of the services described herein by CONTRACTOR, CITY shall
pay CONTRACTOR, pursuant to the schedule of CONTRACTOR'S fees which is included in
attached Exhibit A, an amount not to exceed $60,000, including expenses.
Payment will be made monthly upon receipt by PROJECT MANAGER of itemized
invoices submitted by CONTRACTOR.
5. TERM OF AGREEMENT.
The term of this Agreement shall be from the date of execution through December 31, 2015.
Upon written agreement of the PROJECT MANAGER and PROJECT DIRECTOR, the term of
this Agreement can be extended for an additional period of up to the earlier of 90 days, or when the
not -to -exceed limit of this contract is reached.
Rev. Date: 117/15
6. TERMINATION.
A. Discretionary. Either party may terminate this Agreement without cause upon
thirty (30) days written notice mailed or personally delivered to the other party.
B. Cause. Either party may terminate this Agreement for cause upon fifteen (15) days
written notice mailed or personally delivered to the other party, and the notified party's failure to
cure or correct the cause of the termination, to the reasonable satisfaction of the party giving such
notice, within such fifteen (15) day time period.
C. Effect of Termination. Upon receipt of notice of termination, neither party shall
incur additional obligations under any provision of this Agreement without the prior written consent
of the other.
D. Return of Documents. Upon termination, any and all CITY documents or
materials provided to CONTRACTOR and any and all of CONTRACTOR's documents and
materials prepared for or relating to the performance of its duties under this Agreement, shall be
delivered to CITY as soon as possible, but not later than thirty (30) days after termination.
7. OWNERSHIP OF DOCUMENTS.
The written documents and materials prepared by the CONTRACTOR in connection with
the performance of its duties under this Agreement, shall be the sole property of CITY. CITY may
use said property for any purpose, including projects not contemplated by this Agreement.
8. INSPECTION AND AUDIT.
Upon reasonable notice, CONTRACTOR shall make available to CITY, or its agent, for
inspection and audit, all documents and materials maintained by CONTRACTOR in connection
with its performance of its duties under this Agreement. CONTRACTOR shall fully cooperate
with CITY or its agent in any such audit or inspection.
9. ASSIGNABILITY.
The parties agree that they shall not assign or transfer any interest in this Agreement nor the
performance of any of their respective obligations hereunder, without the prior written consent of
the other party, and any attempt to so assign this Agreement or any rights, duties or obligations
arising hereunder shall be void and of no effect.
10. INSURANCE.
A. Scope of Coverage. During the term of this Agreement, CONTRACTOR shall
maintain, at no expense to CITY, the following insurance policies:
1. A commercial general liability insurance policy in the minimum amount of
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one million dollars ($1,000,000) per occurrence/two million dollars ($2,000,000) aggregate, for
death, bodily injury, personal injury, or property damage.
2. An automobile liability (owned, non -owned, and hired vehicles) insurance
policy in the minimum amount of one million dollars ($1,000,000) dollars per occurrence.
3. If any licensed professional performs any of the services required to be
performed under this Agreement, a professional liability insurance policy in the minimum amount
of one million dollars ($1,000,000) per occurrence/two million dollars ($2,000,000) aggregate, to
cover any claims arising out of the CONTRACTOR's performance of services under this
Agreement. Where CONTRACTOR is a professional not required to have a professional license,
CITY reserves the right to require CONTRACTOR to provide professional liability insurance
pursuant to this section.
4. If it employs any person, CONTRACTOR shall maintain worker's
compensation and employer's liability insurance, as required by the State Labor Code and other
applicable laws and regulations, and as necessary to protect both CONTRACTOR and CITY
against all liability for injuries to CONTRACTOR's officers and employees. CONTRACTOR'S
worker's compensation insurance shall be specifically endorsed to waive any right of subrogation
against CITY.
B. Other Insurance Requirements. The insurance coverage required of the
CONTRACTOR in subparagraph A of this section above shall also meet the following
requirements:
1. Except for professional liability insurance, the insurance policies shall be
specifically endorsed to include the CITY, its officers, agents, employees, and volunteers, as
additionally named insureds under the policies.
2. The additional insured coverage under CONTRACTOR'S insurance
policies shall be primary with respect to any insurance or coverage maintained by CITY and shall
not call upon CITY's insurance or self-insurance coverage for any contribution. The "primary and
noncontributory" coverage in CONTRACTOR'S policies shall be at least as broad as ISO form
CG20 0104 13.
3. Except for professional liability insurance, the insurance policies shall
include, in their text or by endorsement, coverage for contractual liability and personal injury.
4. The insurance policies shall be specifically endorsed to provide that the
insurance carrier shall not cancel, terminate or otherwise modify the terms and conditions of said
insurance policies except upon ten (10) days written notice to the PROJECT MANAGER.
5. If the insurance is written on a Claims Made Form, then, following
termination of this Agreement, said insurance coverage shall survive for a period of not less than
five years.
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6. The insurance policies shall provide for a retroactive date of placement
coinciding with the effective date of this Agreement.
7. The limits of insurance required in this Agreement may be satisfied by a
combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall
contain or be endorsed to contain a provision that such coverage shall also apply on a primary and
noncontributory basis for the benefit of CITY (if agreed to in a written contract or agreement)
before CITY'S own insurance or self-insurance shall be called upon to protect it as a named
insured.
8. It shall be a requirement under this Agreement that any available insurance
proceeds broader than or in excess of the specified minimum insurance coverage requirements
and/or limits shall be available to CITY or any other additional insured party. Furthermore, the
requirements for coverage and limits shall be: (1) the minimum coverage and limits specified in this
Agreement; or (2) the broader coverage and maximum limits of coverage of any insurance policy or
proceeds available to the named insured; whichever is greater.
C. Deductibles and SIR'S. Any deductibles or self-insured retentions in
CONTRACTOR's insurance policies must be declared to and approved by the PROJECT
MANAGER and City Attorney, and shall not reduce the limits of liability. Policies containing any
self-insured retention (SIR) provision shall provide or be endorsed to provide that the SIR may be
satisfied by either the named insured or CITY or other additional insured party. At CITY's option,
the deductibles or self-insured retentions with respect to CITY shall be reduced or eliminated to
CITY's satisfaction, or CONTRACTOR shall procure a bond guaranteeing payment of losses and
related investigations, claims administration, attorney's fees and defense expenses.
D. Proof of Insurance. CONTRACTOR shall provide to the PROJECT
MANAGER or CITY'S City Attorney all of the following: (1) Certificates of Insurance evidencing
the insurance coverage required in this Agreement; (2) a copy of the policy declaration page and/or
endorsement page listing all policy endorsements for the commercial general liability policy, and
(3) excerpts of policy language or specific endorsements evidencing the other insurance
requirements set forth in this Agreement. CITY reserves the right to obtain a full certified copy of
any insurance policy and endorsements from CONTRACTOR. Failure to exercise this right shall
not constitute a waiver of the right to exercise it later. The insurance shall be approved as to form
and sufficiency by PROJECT MANAGER and the City Attorney.
11. INDEMNIFICATION.
A. Except as otherwise provided in Paragraph B., CONTRACTOR shall, to the
fullest extent permitted by law, indemnify, release, defend with counsel approved by CITY, and
hold harmless CITY, its officers, agents, employees and volunteers (collectively, the "City
Indemnitees"), from and against any claim, demand, suit, judgment, loss, liability or expense of
any kind, including but not limited to attorney's fees, expert fees and all other costs and fees of
litigation, (collectively "CLAIMS"), arising out of CONTRACTOR'S performance of its
obligations or conduct of its operations under this Agreement. The CONTRACTOR's
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obligations apply regardless of whether or not a liability is caused or contributed to by the active
or passive negligence of the City Indemnitees. However, to the extent that liability is caused by
the active negligence or willful misconduct of the City Indemnitees, the CONTRACTOR's
indemnification obligation shall be reduced in proportion to the City Indemnitees' share of
liability for the active negligence or willful misconduct. In addition, the acceptance or approval
of the CONTRACTOR's work or work product by the CITY or any of its directors, officers or
employees shall not relieve or reduce the CONTRACTOR's indemnification obligations. In the
event the City Indemnitees are made a party to any action, lawsuit, or other adversarial
proceeding arising from CONTRACTOR'S performance of or operations under this
Agreement, CONTRACTOR shall provide a defense to the City Indemnitees or at CITY'S
option reimburse the City Indemnitees their costs of defense, including reasonable attorneys'
fees, incurred in defense of such claims.
B. Where the services to be provided by CONTRACTOR under this Agreement are
design professional services to be performed by a design professional as that term is defined
under Civil Code Section 2782.8, CONTRACTOR shall, to the fullest extent permitted by law,
indemnify, release, defend and hold harmless the City Indemnitees from and against any
CLAIMS that arise out of, pertain to, or relate to the negligence, recklessness, or willful
misconduct of CONTRACTOR in the performance of its duties and obligations under this
Agreement or its failure to comply with any of its obligations contained in this Agreement,
except such CLAIM which is caused by the sole negligence or willful misconduct of CITY.
C. The defense and indemnification obligations of this Agreement are undertaken in
addition to, and shall not in any way be limited by the insurance obligations contained in this
Agreement, and shall survive the termination or completion of this Agreement for the full period
of time allowed by law.
12. NONDISCRIMINATION.
CONTRACTOR shall not discriminate, in any way, against any person on the basis of age,
sex, race, color, religion, ancestry, national origin or disability in connection with or related to the
performance of its duties and obligations under this Agreement.
13. COMPLIANCE WITH ALL LAWS.
CONTRACTOR shall observe and comply with all applicable federal, state and local laws,
ordinances, codes and regulations, in the performance of its duties and obligations under this
Agreement. CONTRACTOR shall perform all services under this Agreement in accordance with
these laws, ordinances, codes and regulations. CONTRACTOR shall release, defend, indemnify
and hold harmless CITY, its officers, agents and employees from any and all damages, liabilities,
penalties, fines and all other consequences from any noncompliance or violation of any laws,
ordinances, codes or regulations.
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14. NO THIRD PARTY BENEFICIARIES.
CITY and CONTRACTOR do not intend, by any provision of this Agreement, to create in
any third party, any benefit or right owed by one party, under the terms and conditions of this
Agreement, to the other party.
15. NOTICES.
All notices and other communications required or permitted to be given under this
Agreement, including any notice of change of address, shall be in writing and given by personal
delivery, or deposited with the United States Postal Service, postage prepaid, addressed to the
parties intended to be notified. Notice shall be deemed given as of the date of personal delivery, or
if mailed, upon the date of deposit with the United States Postal Service. Notice shall be given as
follows:
TO CITY's Project Manager: Mark Moses, Finance Director
City of San Rafael
1400 Fifth Avenue
P.O. Box 151560
San Rafael, CA 94915-1560
TO CONTRACTOR's Project Director: Joe Aguilar
Vavrinek, Trine, Day & Co., LLP
2151 River Plaza Drive, Suite 308
Sacramento, CA 95833
16. INDEPENDENT CONTRACTOR.
For the purposes, and for the duration, of this Agreement, CONTRACTOR, its officers,
agents and employees shall act in the capacity of an Independent Contractor, and not as employees
of the CITY. CONTRACTOR and CITY expressly intend and agree that the status of
CONTRACTOR, its officers, agents and employees be that of an Independent Contractor and not
that of an employee of CITY.
17. ENTIRE AGREEMENT -- AMENDMENTS.
A. The terms and conditions of this Agreement, all exhibits attached, and all documents
expressly incorporated by reference, represent the entire Agreement of the parties with respect to the
subject matter of this Agreement.
B. This written Agreement shall supersede any and all prior agreements, oral or written,
regarding the subject matter between the CONTRACTOR and the CITY.
C. No other agreement, promise or statement, written or oral, relating to the subject
matter of this Agreement, shall be valid or binding, except by way of a written amendment to this
Agreement.
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D. The terms and conditions of this Agreement shall not be altered or modified except
by a written amendment to this Agreement signed by the CONTRACTOR and the CITY.
E. If any conflicts arise between the terms and conditions of this Agreement, and the
terms and conditions of the attached exhibits or the documents expressly incorporated by reference,
the terms and conditions of this Agreement shall control.
18. SET-OFF AGAINST DEBTS.
CONTRACTOR agrees that CITY may deduct from any payment due to
CONTRACTOR under this Agreement, any monies which CONTRACTOR owes CITY under
any ordinance, agreement, contract or resolution for any unpaid taxes, fees, licenses, assessments,
unpaid checks or other amounts.
19. WAIVERS.
The waiver by either party of any breach or violation of any term, covenant or condition of
this Agreement, or of any ordinance, law or regulation, shall not be deemed to be a waiver of any
other term, covenant, condition, ordinance, law or regulation, or of any subsequent breach or
violation of the same or other term, covenant, condition, ordinance, law or regulation. The
subsequent acceptance by either party of any fee, performance, or other consideration which may
become due or owing under this Agreement, shall not be deemed to be a waiver of any preceding
breach or violation by the other party of any term, condition, covenant of this Agreement or any
applicable law, ordinance or regulation.
20. COSTS AND ATTORNEY'S FEES.
The prevailing party in any action brought to enforce the terms and conditions of this
Agreement, or arising out of the performance of this Agreement, may recover its reasonable costs
(including claims administration) and attorney's fees expended in connection with such action.
21. CITY BUSINESS LICENSE J OTHER TAXES.
CONTRACTOR shall obtain and maintain during the duration of this Agreement, a CITY
business license as required by the San Rafael Municipal Code CONTRACTOR shall pay any and
all state and federal taxes and any other applicable taxes. CITY shall not be required to pay for any
work performed under this Agreement, until CONTRACTOR has provided CITY with a
completed Internal Revenue Service Form W-9 (Request for Taxpayer Identification Number and
Certification).
22. APPLICABLE LAW.
The laws of the State of California shall govern this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day, month
and year first above written.
CITY OF SAN RAFAEL CONTRACTOR
NANCY MACKLE, City Manager
ISM
ATTEST:
ESTHER C. BEIRNE, City Clerk
APPROVED AS TO FORM:
ROBERT F. EPSTEIN, City Attorney
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Ur are I
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March 30, 2015
Attn: Mark Moses
City of San Rafael
1400 Fifth Avenue
San Rafael, CA 94915
Vavrinek, Trine, Day & Co., LLP
Certified Public Accountants
Re: Financial and Accounting Services
Dear Mark:
This engagement letter is to update our agreement for non -audit services with the City of San Rafael (the
"City"). The standards to which Vavrinek Trine Day & Co., LLP ("VTD") will conform are intended to
maintain objectivity and independence for both audit work and for non -audit work with government audit
clients.
The standard for non -audit services for government audit clients is based on two overarching principles:
■ Auditors (VTD) should not perform management functions or make management decisions; and
■ Auditors (VTD) should not audit their own work or provide non -audit services in situations where
the amounts or services involved are significant / material to the subject matter of the audit.
Based upon these principles, VTD will not be considered to be independent for the purposes of
performing attest work (auditing) for the City covering fiscal years 2014-15.
OBJECTIVE OF ENGAGEMENT
The firm of Vavrinek Trine Day & Co., LLP is available to assist you with financial consulting and
accounting services covering your accounting records. Our firm is ready to begin work on this project
whenever your City is ready to commence.
SCOPE OF WORK
Specific services to be provided follow.
• Assist in preparing for interim audit work
• Assist City in preparing quarterly closings and preparing quarterly financials
• Assist City in preparing government -wide updates and adjustments
• Assist City in drafting note disclosures for annual financial statements
• Assist City in populating financial information for fiscal year ending June 2015
• Assist City in developing variance reports for analytical review at year end
• Work with City staff in segregating output reports between its regular accounting software
(EDEN) and its report writer software (ProSystems)
• Assist the City in preparing note disclosures on pensions and other reporting changes mandated
by GASB 68
• Assist with federal, state and local financial reporting.
• Assist in drafting financial statements and preparing reconciling adjustments.
2151 River Plaza drive Suite 308 Sacramento, CA 95833 TO 916.570.1880 Fax: 916.570.1875 www.vtdcpa com
FRESNO « LAGUNA HILLS e PALO ALTO ® PLEASANTON ® RANCH':, CUCAMONGA ® RIVERSIDE ® SACRAMENTO
• We will provide accounting assistance in closing the City's books each month.
• Assist the City in analyzing various balance sheet accounts, expenses and revenues.
CLIENT RESPONSIBILITIES
The work will be non -audit services as defined by Governmental Auditing Standards issued by the
Comptroller General of the United States. Our work will not constitute an audit or review of transactions
and should not be relied upon as such. The City is responsible for the appropriate recording and reporting
of financial transactions and management decisions. Accordingly, all work will be conducted at your
direction, the direction of the Director of Finance, to insure that the work meets the City's objectives.
The Director of Finance will be responsible for reviewing and accepting any work product directly
prepared by VTD, including any adjustments to the accounting records that may be proposed by VTD, or
reports drafted by VTD during the engagement.
Governmental Auditing Standards require that the City be responsible for the substantive outcomes of
VTD work and be in a position in fact and appearance to make an informed judgment on the results of the
non -audit services and that the City of San Rafael:
• Designate a knowledge management level individual to be responsible and accountable for
overseeing the non -audit services
• Establishes and monitors the performance of the non -audit services to ensure that it meets
management's objectives.
• Makes any decisions that involve management functions related to the non -audit services and
accepts full responsibility for such decisions.
• Evaluates the adequacy of the services performed and any findings that result.
STAFFING
Vavrinek, Trine, Day & Co., LLP has owners that are not licensed as certified public accountants as
permitted under Section 5079 of the California Business and Professions Code. It is not anticipated that
any of the non -licensee owners will be performing audit services for the agency.
FEES
We estimate a price of $60,000 unless otherwise agreed to by the City in writing. Invoices will be
submitted monthly and are due upon receipt. Hourly rates are effective through December 31, 2015.
VTD Staff Hourly Rate
Partner $190
Manager $160
Accounting Supervisor $ 130
Senior Accountant (Nick Rosas) $95
Staff Accountant (Phuong Nguyen) $80
TERMINATION OF ENGAGEMENT
The engagement may be terminated by either party without cause.
INDEPENDENT CONTRACTOR
We are an independent contractor as defined by Federal and State taxing authorities.
INSURANCE
We maintain current worker compensation and liability insurance policies.
If this letter correctly sets forth your understanding of the terms and objectives of the engagement, please
so indicate by signing in the space provided below.
Agreed to by:
f.
Signature:
Joseph Aguilar Print Name
Of Vavrinek Trine Day & Co., LLP Of City of San Rafael
Date: Date:
CITY OF SAN RAFAEL
ROUTING SLIP / APPROVAL FORM
INSTRUCTIONS: USE THIS FORM WITH EACH SUBMITTAL OF A CONTRACT, AGREEMENT,
ORDINANCE OR RESOLUTION BEFORE APPROVAL BY COUNCIL / AGENCY.
SRRA / SRCC AGENDA ITEM NO.
DATE OF MEETING:
April 6, 2015
FROM: Mark Moses
DEPARTMENT: Finance
DATE: April 1, 2015
TITLE OF DOCUMENT: A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN
AGREEMENT WITH VAVRINEK, TRINE, DAY& CO. FOR ACCOUNTING AND FINANCIAL REPORTING
SERVICES
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Department Head (signature)
*** *** *** *** *** *** *** *** *** *** *** *** *** *** *** ***
(LOWER HALF OF FORM FOR APPROVALS ONLY)
APPROVED AS COUNCIL / AGENCY
AGENDA ITEM:
City Man ger (signature)
NOT APPROVED
REMARKS:
APPROVED AS TO FORM:
City Attorney (signature)