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HomeMy WebLinkAboutCC Resolution 10992 (Infrastructure Inventory; Caporicci, Cropper & Larson)RESOLUTION NO. 10 9 9 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN APPROVING, AND AUTHORIZING THE CITY MANAGER TO EXECUTE, AN AGREEMENT WITH CAPORICCI, CROPPER AND LARSON, LLP FOR CONSULTING SERVICES TO COMPLETE INFRASTRUCTURE INVENTORY AND VALUATION, AND TO PREPARE FINANCIAL STATEMENTS IN ACCORDANCE WITH GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB) STATEMENT #34 WHEREAS, the Government Accounting Standards Board (GASB) in June 1999 issued Statement #34 establishing new accounting standards and financial reporting requirements for State and local governments and these new standards apply both to the City of San Rafael and to the San Rafael Redevelopment Agency; and, WHEREAS, GASB #34 requires or will require, among other things, that local governmental agencies 1) convert "Government Wide Financial Statements" to the full accrual basis of accounting and 2) report in their annual financial statements the estimated historical cost of all the agency's capital assets, including infrastructure assets such as roads, government buildings, sidewalks, stoplights, parks and the like; and, WHEREAS, in order to comply with GASB #34, both the City of San Rafael and the San Rafael Redevelopment Agency must complete an infrastructure inventory and valuation in the near future, as well as revise the financial statement reporting format, and neither the City nor the Agency has the in-house expertise to perform such tasks; and, WHEREAS, the accounting firm of Caporicci, Cropper and Larson, LLP has the training, experience and expertise to perform, and is willing and able to perform, all of the services necessary for the City and the Agency to comply with all of the requirements of GASB #34; NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of San Rafael hereby: 1. approves the agreement for consulting services, which includes services for both the City and the Agency, with the firm of Caporicci, Cropper and Larson, LLP, as detailed in the Agreement and scope of work attached hereto, in an amount not to exceed $125,000.00; 2. authorizes the City Manager to execute said agreement in a form to be reviewed and approved by the City Attorney. ARM I, Jeanne M. Leoncini, 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 22nd day of January, 2002, by the following vote to wit: AYES: Councilmembers: Heller, Miller, Phillips & Vice -Mayor Cohen NOES: Councilmembers: None ABSENT: Councilmembers: Mayor Boro 9e&A-Iz n,.�,.„� JEA'f N M. LEONCM, City Clerk AGREEMENT BETWEEN THE CITY OF SAN RAFAEL, THE SAN RAFAEL REDEVELOPMENT AGENCY AND CAPORICCI, CROPPER AND LARSON, LLP, FOR CONSULTING SERVICES TO COMPLETE INFRASTRUCTURE INVENTORY AND VALUATION, AND TO PREPARE FINANCIAL STATEMENTS IN ACCORDANCE WITH GOVERNMENT ACCOUNTING STANDARDS BOARD (GASB) STATEMENT NO. 34. This Agreement is made and entered between the CITY OF SAN RAFAEL REDEVELOPMENT AGENCY (hereinafter Larson, LLP hereinafter "CONTRACTOR"). PROJECT COORDINATION into this 22nd day of January, 2002, by and (hereinafter "CITY"), the SAN RAFAEL "AGENCY") and Caporicci, Cropper and A. CITY/ AGENCY. The City Manager shall be the representative of the CITY and AGENCY for all purposes under this Agreement. The Director of Management Services, Ken Nordhoff is hereby designated the PROJECT MANAGER for the CITY and AGENCY, and said PROJECT MANAGER shall supervise all aspects of the progress and execution of this Agreement. B. CONTRACTOR. CONTRACTOR shall assign a single PROJECT DIRECTOR to have overall responsibility for the progress and execution of this Agreement for CONTRACTOR. Steve Larson 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/AGENCY within ten (10) business days of the substitution. 2. DUTIES OF CONTRACTOR CONTRACTOR shall perform the duties and/or provide services as described in Exhibit " A " attached and incorporated herein. 3. DUTIES OF CITY/AGENCY CITY/AGENCY shall cooperate with CONTRACTOR in his performance under this agreement and shall compensate CONTRACTOR as provided herein. 4. COMPENSATION For the full performance of the services described herein by CONTRACTOR, CITY/AGENCY shall pay CONTRACTOR an amount NOT to exceed $125,000, inclusive of the cost of incidental expenses, presentations and the local `lF �71U� 4 business license taxes as described in Section 20. Payment will be made monthly by PROJECT MANAGER upon receipt of itemized invoices submitted by CONTRACTOR. 5. TERM OF AGREEMENT The term of this Agreement shall commence upon the date of execution of this agreement and shall end on December 31, 2003. The term can be extended at the mutual agreement of both parties to a date certain. 6. TERMINATION A. Discretionary. Either party may terminate this Agreement without cause upon thirty days written notice mailed or personally delivered to the other party. B. Cause. Either party may terminate this Agreement for cause upon ten (10) 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 notice, to the reasonable satisfaction of the party giving such notice, within thirty (30) days of the receipt of said notice. 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/AGENCY documents or materials provided to CONTRACTOR and any and all of CONTRACTOR's documents described in paragraph 7 below, shall be delivered to CITY/AGENCY 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/AGENCY. CITY/AGENCY 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 and AGENCY, or its agent, for inspection and audit, all documents directly related to CONTRACTOR'S performance of its duties under this Agreement. CONTRACTOR shall fully cooperate with CITY, AGENCY or their agent in any such audit or inspection. Page 2 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. During the term of this Agreement, CONTRACTOR shall maintain, at no expense to CITY or AGENCY, the following insurance policies: 1. A comprehensive general liability insurance policy in the minimum amount of one million ($1,000,000) dollars per occurrence 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 ($1,000,000) dollars per occurrence; 3. If any licensed professional performs any of the services required to be performed under this Agreement, a professional liability insurance policy in the minimum amount of one million($ 1,000,000) dollars to cover any claims arising out of the CONTRACTOR's performance of services under this Agreement. B. The insurance coverage required of the CONTRACTOR by section 11. A., shall also meet the following requirements: 1. The insurance shall be primary with respect to any insurance or coverage maintained by CITY/AGENCY and shall not call upon CITY or AGENCY insurance or coverage for any contribution; 2. Except for professional liability insurance, the insurance policies shall be endorsed for contractual liability and personal injury; 3. Except for professional liability insurance, the insurance policies shall be specifically endorsed to include the CITY, AGENCY, their officers, agents, employees and volunteers as additionally named insured under the policies; 4. CONTRACTOR shall provide to PROJECT MANAGER, (a) Certificates of Insurance evidencing the insurance coverage required herein, and (b) specific endorsements naming CITY, AGENCY, their officers, agents, employees and volunteers as additional insured under the policies; 5. The insurance policies shall provide that the insurance carrier shall not cancel, terminate or otherwise modify the terms and conditions of said insurance Page 3 policies except upon thirty (30) days written notice to the PROJECT MANAGER; 6. 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; 7. The insurance policies shall provide for a retroactive date of placement coinciding with the effective date of this Agreement; 8. The insurance shall be approved as to form and sufficiency by PROJECT MANAGER and the City Attorney. C. If it employs any person, CONTRACTOR shall maintain worker's compensation and employer's liability insurance, as required by the State Labor Code, other applicable laws and regulations, and as necessary to protect both CONTRACTOR, CITY and AGENCY against all liability for injuries to CONTRACTOR's officers and employees. D. Any deductibles or self-insured retentions in CONTRACTOR's insurance policies must be declared to and approved by the PROJECT MANAGER and the City Attorney. At CITY/AGENCY option, the deductibles or self-insured retentions with respect to CITY/AGENCY shall be reduced or eliminated to CITY/AGENCY satisfaction, or CONTRACTOR shall procure a bond guaranteeing payment of losses and related investigations, claims administration, attorney's fees and defense expenses. 11. INDEMNIFICATION CONTRACTOR shall indemnify, release, defend and hold harmless CITY, AGENCY and other entities in the Franchisor's' Group, their officers, agents, employees and volunteers, against any claim, demand, suit, judgment, loss, liability or expense of any kind, including attorney's fees, arising out of or resulting in any way, in whole or in part, from any acts or omissions, intentional or negligent, of CONTRACTOR or CONTRACTOR's officers, agents and employees in the performance of their duties and obligations under this Agreement. 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 Page 4 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, AGENCY, their 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. 14. NO THIRD PARTY BENEFICIARIES CITY, AGENCY 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/AGENCY: Mr. Kenneth A. Nordhoff Assistant City Manager City of San Rafael P.O. Box 151560 San Rafael, CA 94915-1560 TO CONTRACTOR: Mr. Steve Larson Partner Caporicci, Cropper and Larson, LLP 3184-D Airway Avenue Costa Mesa, CA Sacramento CA 92626 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 or AGENCY. CONTRACTOR, CITY and AGENCY 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 or AGENCY. 17. ENTIRE AGREEMENT — AMENDMENTS A. The terms and conditions of this Agreement, all exhibits attached, Page 5 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, CITY and AGENCY. 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. 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, CITY and AGENCY. 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. 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. 19. 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. 20. CITY BUSINESS LICENSE/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. CONTRACTOR's taxpayer identification number is 68-0433109, and Page 6 CONTRACTOR certifies under penalty of perjury that said taxpay6r identification number is correct. 21. 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 CONTRACTOR By: =� c'- oti.s City Manager Name: J7�1>�� C • Lb,t�se�1 Title: S� SAN RAFAEL REDEVELOPMENT AGENCY 614 Economic Development Director ATTEST: city Clerk City AttofkZy Page 7 Dear Ken: Based on our conversation on December 4th, I am submitting our proposal to assist the City in complying with GASB 34. This proposal is based on the following assumptions: 1. City staff will assist in the implementation process. 2. The City will retain us to complete an inventory of City owned assets (infrastructure and general fixed assets above the capitalization threshold). To accomplish the asset inventory, CC&L will contract with American Appraisers Association, Inc. (AAA). City staff will develop the appropriate systems to accurately monitor additions and deletions of assets. 3. CC&L will be focused on oversight, directional guidance, supervision of the infrastructure asset inventory, development of the reporting model, and assistance with implementation strategy. 4. In this proposal, the term "City" refers to the City of San Rafael and its component units including the Redevelopment Agency. 5. The San Rafael Sanitation District is not included in this proposal. Proposal to Provide Assistance in Implementing GASB 34 The following is provided in this proposal: ✓ a summary of the requirements - Brief Discussion ✓ identification of various action steps to be taken - Specific Approach ✓ estimate of costs - Cost Estimates We have assisted the City of Corona in implementing GASB 34 and issuing a full CAFR with MD&A, Financial Statements, Auditors' Report, Notes, and Statistics in GASB 34 formats. Corona was the first City in the United States to implement the "Modified Approach" to Infrastructure Assets. Recently we received a letter (attached) from Mr. Tom L. Allen, Chairman of the Government Accounting Standards Board, commending the City of Corona and CC&L for our efforts in preparing Corona's financial statements for the year ending June 30, 1999 in accordance with GASB 34. Additionally, the City of Corona has issued its 2000 and 2001 CAFRs in GASB 34 format. We are also currently assisting 7 other cities in their implementation efforts. This experience gives us valuable information regarding the issues of implementation and the knowledge to effectively and efficiently assist the City in the future. Toll Free Tel: (877) 862-2200 Toll Free Fax: (866) 436-0927 Day Xrea Orange County Sacramento 1111 Broadway, Suite 2300 3184-D Airway Avenue 777 Campus Commons Rd, Suite 200 Oakland, California 94607 Costa Mesa, California 92626 Sacramento, California 95825 EXHIBIT "A" Offices located in: C G L Bay Area Caporicci, Cropper & Larson, LLP Orange County Sacramento Certified Public Accountants Mr. Kenneth A. Nordhoff December 12, 2001 Assistant City Manager/Finance Director City of San Rafael 1400 Fifth Ave San Rafael, California 94915-1560 RE: GASB Statement No. 34 Dear Ken: Based on our conversation on December 4th, I am submitting our proposal to assist the City in complying with GASB 34. This proposal is based on the following assumptions: 1. City staff will assist in the implementation process. 2. The City will retain us to complete an inventory of City owned assets (infrastructure and general fixed assets above the capitalization threshold). To accomplish the asset inventory, CC&L will contract with American Appraisers Association, Inc. (AAA). City staff will develop the appropriate systems to accurately monitor additions and deletions of assets. 3. CC&L will be focused on oversight, directional guidance, supervision of the infrastructure asset inventory, development of the reporting model, and assistance with implementation strategy. 4. In this proposal, the term "City" refers to the City of San Rafael and its component units including the Redevelopment Agency. 5. The San Rafael Sanitation District is not included in this proposal. Proposal to Provide Assistance in Implementing GASB 34 The following is provided in this proposal: ✓ a summary of the requirements - Brief Discussion ✓ identification of various action steps to be taken - Specific Approach ✓ estimate of costs - Cost Estimates We have assisted the City of Corona in implementing GASB 34 and issuing a full CAFR with MD&A, Financial Statements, Auditors' Report, Notes, and Statistics in GASB 34 formats. Corona was the first City in the United States to implement the "Modified Approach" to Infrastructure Assets. Recently we received a letter (attached) from Mr. Tom L. Allen, Chairman of the Government Accounting Standards Board, commending the City of Corona and CC&L for our efforts in preparing Corona's financial statements for the year ending June 30, 1999 in accordance with GASB 34. Additionally, the City of Corona has issued its 2000 and 2001 CAFRs in GASB 34 format. We are also currently assisting 7 other cities in their implementation efforts. This experience gives us valuable information regarding the issues of implementation and the knowledge to effectively and efficiently assist the City in the future. Toll Free Tel: (877) 862-2200 Toll Free Fax: (866) 436-0927 Day Xrea Orange County Sacramento 1111 Broadway, Suite 2300 3184-D Airway Avenue 777 Campus Commons Rd, Suite 200 Oakland, California 94607 Costa Mesa, California 92626 Sacramento, California 95825 EXHIBIT "A" Mr. Kenneth A. Nordhoff: Assistant City Manager/ Finance Director City of San Rafael December 12, 2001 1. Brief Discussion of GASB 34 In June of 1999, the Government Accounting Standards Board issued Statement No. 34, Basic Financial Statements - and Manavement's Discussion and Analysis - for State and Local Governments (GASB 34). This Statement establishes new financial reporting requirements for state and local governments throughout the United States and will require governments to report new and different information as well as currently reported information. The effects of GASB 34 are far reaching and will require significant effort to implement. For example (but definitely not limited to): A. Presentation of financial information in new formats. B. Conversion of "Government Wide Financial Statements" to the full accrual basis of accounting. C. Fund statements will report "major" funds (funds that are 10% or more of total City assets, liabilities, revenues and/or expenses and at least 5 % of the aggregate amount of all governmental and enterprise funds). D. "Non -major" funds will be reported in the aggregate. E. "Required Supplementary Information" (RSI) will include budgetary comparison schedules for the general fund and for each "major" special revenue fund that has a legally adopted annual budget. The budgetary comparison will include both the original budget and the final appropriated budget. F. Actual inflows, outflows, and balances will be stated on the government's budgetary basis. F. The estimated historical cost of all capital assets, including infrastructure assets (roads, general government buildings, sidewalks, stop lights, parks, etc) will be reported in the government -wide financial statements. Requirements, except for infrastructure assets, of GASB 34 become effective for the City for the fiscal year ending June 30, 2003. Reporting of infrastructure assets becomes effective for the fiscal year ending June 30, 2007. However, we recommend that infrastructure assets be recorded in conjunction with the financial statement implementation because of "matching - of -debt -with -asset" issues. And we recommend early implementation. As relates to infrastructure assets, benefits to the City for implementation of GASB 34 requirements include specific identification of all City owned assets rather than only equipment related; enhanced control, accountability, and reporting of City owned assets; improved planning capabilities for CIP projects; enhanced ability to forecast needed operating repairs and maintenance; improved budgeting over infrastructure assets; and increased public awareness of staff efforts to manage all City operations. Caporicci, Cropper & Larson, CPAs, LLP P.— I Mr. Kenneth A. Nordhoff: Assistant City Manager/ Finance Director City of San Rafael December 12, 2001 The effort to implement GASB 34 should not be underestimated. It will take significant actions by City staff in all departments to implement the provisions of GASB 34 within the time frames required. We recommend that the City establish a task force to determine the specific requirements of implementation, develop an approach to implementation, estimate the cost of implementation, and periodically report its progress to City Council. Additionally, we recommend that the City begin reserving funds to meet the cost of implementation. For example: A. Design of the new reporting model (may require outside technical assistance). B. Establishment of infrastructure maintenance systems to track depreciation data (expand existing systems or develop new systems). OVERALL APPROACH The approach to this process is to convert the financial statements of June 30, 2002, separate from the audit process during the early part of 2003. This method allows the conversion to be done on financial statements that have already been audited. In addition, it allows comparative data to be developed for use in the June 30, 2003, financial statements. The process takes approximately three months. Assets will be identified and valued prior to December 31, 2002. The following is a list of general steps for the entire project: • Identify capital assets and assign values. • Establish tracking and monitoring systems for infrastructure assets. • Review the count and valuation of all capital assets including infrastructure assets and related depreciation. • Perform an analysis of the financial statements with the combining financial statements used as the base. • Determine major and non -major funds. • Develop conversion journal entries and conversion trial balances. These trial balances will provide the information necessary to create the Government -Wide financial statements and the reconciliations between the Fund Financial Statements and the Government -Wide Financial Statements. Caporicci, Cropper & Larson, CPAs, LLP Page 3 Mr. Kenneth A. Nordhoff: Assistant City Manager/ Finance Director City of San Rafael December 12, 2001 • Develop notes to the financial statements in accordance with the GASB Statement No. 34. • Identify and prepare required Supplementary Information • Assist the City in preparing the Management's Discussion and Analysis and the Transmittal Letter. The final product will result in the development of templates that can be used by City staff to prepare the GASB Statement No. 34 compliant financial statements. We will work closely with City staff to establish all templates and train staff in each step. CC&L will be the prime contractor on this engagement. However, we will sub -contract the physical inventory and valuation of City owned capital assets to American Appraisers Association, Inc. This proposal assumes that both City and CC&L staff will participate in the project. During the planning meetings, we will identify tasks, develop roles, and make assignments to the team members. Mr. Kenneth A. Nordhoff will be the primary contact for the City. Mr. Gary Caporicci, Ms. Nasi Raissian, and Mr. Steve Larson will be the primary contacts for CC&L. SPECIFIC APPROACH We suggest the following four -phased approach performed jointly by CC&L and City staff in conducting the project. Phase I - Planning - Organize the project. - Develop timetable and identify key dates. - Create policy relating to depreciation - Basic Approach vs. Modified Approach. - Create policy as to capitalization threshold. - Create guidelines as to recognition of accrual basis conversion items for financial statement presentation. - Identify team members. - Assign tasks. - Establish tracking, monitoring, and follow-up mechanisms for both financial reporting and capital assets. - Establish status reporting format. - Establish meeting schedule. Caporicci, Cropper & Larson, CPAs, LLP P.— d Mr. Kenneth A. Nordhoff: Assistant City Manager/ Finance Director City of San Rafael December 12, 2001 Phase II - Infrastructure Assets (Assumes that pavement is reported by the modified approach, all other infrastructure is reported by the basic approach) - Meet with infrastructure managers to review the work and establish communications and scheduling dates. - Complete field inventory of: • Street Pavement Surfaces. • Street Appurtenances. • Park Sites. • Park Improvements. • Buildings. • Other assets as identified. • Storm Water • Equipment - Develop replacement costs for all infrastructure classes. - Compute estimated historical construction costs for all infrastructure assets. - Compute annual depreciation amounts for all infrastructure assets reported by the basic approach. - Format and summarize data for inclusion in the CAFR. Phase III - Develop an ongoing maintenance system to assure continued accuracy of the fixed asset records - Review current City polices relating to acquisition, maintenance, disposal and recording of City property. - Modify existing policies to assure accurate and timely recognition of property related transactions as well as assignment of responsibility for the safeguarding of the City property. - Develop infrastructure maintenance systems or modify existing maintenance systems. - Establish routine verification and follow-up procedures to determine if policies are being followed. - Develop quarterly reconciliations of property records. - Develop periodic inventory counts of physical property and reconcile to financial records. - Establish, at the individual departmental head level, certification requirements for the accuracy of property records on an ongoing basis. Phase IV -Modify current accounting systems to reflect change from modified accrual basis to full accrual basis accounting and develop new financial reporting models - Evaluate current accounting systems and identify areas requiring changes. - Develop list of transactions requiring additional journal entries and timing of recording into the accounting records. - Modify the budget tracking system to allow for tracking of revisions as well as Caporicci, Cropper & Larson, CPAs, LLP n-- Mr. Kenneth A. Nordhoff: Assistant City Manager/ Finance Director City of San Rafael December 12, 2001 maintaining the original budget. - Develop conversion worksheet for the previous year's audit results. - Identify financial transactions creating irregular results and resolve issues. - Create financial reports consistent with GASB 34 disclosure requirements based on previous year's audited results. - Establish beginning account balances for the current year's financial statement presentation. TIMING The development of various City policies relating to capitalization thresholds, methods of depreciation (modified vs. basic), assignment of a depreciation method to a specific asset class, and ongoing management responsibilities should be addressed in the early stages of the project with an anticipated completion date of June 30, 2002. The infrastructure physical inventory, asset valuation, and determination of the tracking system capabilities should be performed during July through December of 2002. The modification to the financial report format should be performed during the first part of 2003, preferably between January and April 2003. The implementation team will be composed of City staff, CC&L staff, and, when appropriate, AAA staff and will meet on a routine basis. Assignments will be made during the team meetings and follow-ups will be conducted during the period until the next team meeting. Status of assignments will be reported during each team meeting and formally communicated to City management through Progress Reports. DELIVERABLES Joint efforts of the implementation team members (City staff, CC&L staff, and AAA staff) will produce the following results: - City policies regarding the capitalization of capital assets (infrastructure assets and general fixed assets). - Detailed listing of infrastructure assets with estimated historical cost values, accumulated depreciation amounts for each infrastructure asset, methods used in valuing infrastructure assets, and a down-loadable data file for transfer to the City's fixed asset tracking system. City to provide software specifications for importing data from AAA programs and databases. - Report on the City's current ability to meet the requirements of utilizing the modified approach in depreciating various classes of infrastructure assets. Caporicci, Cropper & Larson, CPAs, LLP Pape 6 Mr. Kenneth A. Nordhoff: Assistant City Manager/Finance Director City of San Rafael December 12, 2001 - Development of the methodology and forms to accumulate and use the required financial data to comply with GASB 34 requirements. - Revised financial statements for the fiscal year ending June 30, 2002 including MD&A, Auditors' Opinion, Government -wide financial statements, Fund financial statements, Required Supplemental Information, and Other Supplemental Information (as required and available) in GASB 34 required formats showing the current year only. - Worksheets and journal entries (printed and in electronic form) used in converting the City's fund accounting data for the year ending June 30, 2002 into GASB 34 full accrual basis of accounting. - Establishment of the beginning financial account balances necessary for preparation of the June 30, 2003 financial reports in accordance with GASB 34. - Blank worksheets and journal entry formats to be used in converting the City's fund accounting data for the year ending June 30, 2003 into GASB 34 full accrual basis of accounting. - An understanding, on the part of City staff, as to how to meet the GASB 34 requirements in the future. COST ESTIMATES Based on CC&L's role as discussed earlier, the following is a summary of the estimated costs of the project. Details of the cost components and assumptions relating to roles of City staff and CC&L's involvement follow this summary. These costs are estimates only and are dependent on the amount of City staff participation and whether issues are discovered that delay the process. Additionally, an estimate of out of pocket costs to be incurred by our staff is included in the above cost estimates. Out of pocket costs include mileage at $.345 per mile, lodging, copy expenses, supplies, etc. Our staff will take steps to minimize any such costs. Out of pocket Caporicci, Cropper & Larson, CPAs, LLP P— 7 Estimated Summary of Costs Costs Phase I Planning $ 18,100 Phase II Infrastructure Assets 55,125 Phase III Develop an ongoing maintenance system to assure continued accuracy of the fixed asset records 10,250 Phase IV Modify accounting systems and create new financial reporting models. 22,700 Total Estimated Professional Fees 106,175 Estimated Travel Costs 12,000 Total Estimated Costs $ 118,175 These costs are estimates only and are dependent on the amount of City staff participation and whether issues are discovered that delay the process. Additionally, an estimate of out of pocket costs to be incurred by our staff is included in the above cost estimates. Out of pocket costs include mileage at $.345 per mile, lodging, copy expenses, supplies, etc. Our staff will take steps to minimize any such costs. Out of pocket Caporicci, Cropper & Larson, CPAs, LLP P— 7 Mr. Kenneth A. Nordhoff: Assistant City Manager/ Finance Director City of San Rafael December 12, 2001 costs noted above are estimates only and may be impacted by the amount of time our staff spends at City offices. COST COMPONENTS AND ASSUMPTIONS Assume CC&L involvement in the planning phase of the project including development of the plan, establish key measurement dates, oversee the project, develop periodic status reports, meet routinely with City staff. Estimated Hourly Estimated Hours Rate Costs Stephen L. Larson - Senior Partner (CC&L) 30 $ 150 $ 4,500 Nasi Raissian - Partner (CC&L) 40 150 6,000 Eileen Cheng - Manager (CC&L) 40 125 5,000 Don McDougall - Director (AAA) 20 130 2,600 Total 130 $ 18,100 Phase II - Infrastructure Assets Assume City staff will assist in the inventory and valuation of infrastructure assets. American Appraisers Association, Inc. will provide guidance and advisory services, assist in the identification and valuation of infrastructure assets, and assist in the development of maintenance systems for those assets to be using the modified approach. AAA Staff Efforts Stephen L. Larson - Senior Partner (CC&L) Nasi Raissian - Partner (CC&L) Staff (CC&L) Administrative Staff (CC&L) Caporicci, Cropper & Larson, CPAs, LLP Estimated Hourly Estimated Hours Rate Costs $ 43,500 30 150 4,500 30 125 3,750 25 95 2,375 20 50 1,000 Total 105 $ 55,125 Mr. Kenneth A. Nordhoff: Assistant City Manager/ Finance Director City of San Rafael December 12, 2001 Phase III - Develop an ongoing maintenance system to assure continued accuracy of the fixed asset records. Assume City staff will develop City policies relating to acquisition, maintenance, disposal of property, and establish routine verification procedures. AAA and CC&L will provide guidance and advisory services. Estimated Hourly Estimated Hours Rate Costs Don McDougall - Director (AAA) 30 $ 130 $ 3,900 Nasi Raissian -Partner (CC&L) 20 125 2,500 Staff (CC&L/AAA) 30 95 2,850 Administrative Staff 20 50 1,000 Total 100 $ 10,250 Phase IV - Modify current accounting systems to reflect change from modified accrual basis to full accrual basis accounting and develop new financial reporting models. Assume CC&L will oversee review of accounting systems but City staff will develop journal entries and transaction lists. Assume CC&L will create the new reporting models assist with MD&A, major fund determination, and budgetary formats. Stephen L. Larson - Senior Partner (CC&L) Nasi Raissian - Partner (CC&L) Eileen Cheng - Manager (CC&L) Staff (CC&L) Administrative Staff Total Estimated Hourly Estimated Hours Rate Costs 20 $ 150 $ 3,000 40 150 6,000 60 125 7,500 60 95 5,700 10 50 500 190 $ 22,700 We welcome the opportunity to assist the City in its efforts to implement GASB Statement No. 34 and are committed to: • Rendering the highest standard of service. • Maintaining our long-term working relationship dedicated to meeting the needs of the City. Caporicci, Cropper & Larson, CPAs, LLP Pa vP 9 Mr. Kenneth A. Nordhoff: Assistant City Manager/ Finance Director City of San Rafael December 12, 2001 • Assisting the City in operational issues. • Producing a quality end -product. We possess the technical qualifications and experience to provide the level of service desired and expected by the City and stand ready to provide our knowledge and experience for the benefit of your organization. Thank you for allowing us to present our proposal. A.eei� e°i�r�+, L�,,�a,,,,� CCP Costa Mesa, California Caporicci, Cropper & Larson, CPAs, LLP r3,-- "' GOVERNMENTAL ACCOUNTING STANDARDS BOARD 401 Merritt 7. P.O. Box 5116. Norwalk. Connecticut 06056-5116 / 203-947-0700 ext. 200 Fax: 203-949-971.1 TOM L. ALLEN Chairman July 12, 2000 Nfavor Jeffrey P. Bennett and City Council Nfembers City of Corona California 815 West Sixth Street Corona, CA 92882 Dear Nlayor and Council Members: I recently received a copy of the City of Corona comprehensive annual financial report for the fiscal year ended June 30, 1999. Your city is one of the first governments to have issued financial statements in accordance with the recently issued reporting standard, GASB Statement 34, Basic Financial Statements—and Vfanagement's Discussion and Analysis for State and Local Governments. As you know, the Governmental Accounting Standards Board (GASB) sought to improve financial reporting in a number of ways. The GASB believes that the improvements in reporting cost of services information and the overall financial position of the government to taxpayers, governing boards, and other financial statement users result from the implementation of Statement 34. Therefore, we encouraged early implementation so that this information would be available to those users on a more timely basis. We are extremely pleased, and impressed, by your city's ability to prepare the new financial statements in such a timely fashion. I was particularly impressed with the city's reporting of all of its infrastructure, and your decision to include ir_formation on the condition assessment of your city streets as called for under the modified approach for reporting infrastructure. Your early implementation is a tribute to your outstanding finance director, Elray Yonkel, and to Gary Caporicci and his audit firm of Caporicci, Cropper & Larson. I also want to commend you as the city's governing body for supporting the efforts to provide your citizens and other financial statement users, with a more comprehensive reporting of the city's financial operations well in advance of the effective date of the standard. It is my hope that these users of your financial statements will recognize your efforts. Mayor Jeffrey P. Bennett and Council Members July 12, 2000 Page Two If it is agreeable with you, I would appreciate a list of local media representatives that I could send a letter to encouraging them to recognize the efforts of your city in being one of the "pioneers" in improved financial reporting to citizens and other financial statement users. Please provide that list to ivlary ivlilligan at: rrtmilligan@gasb.org. I look forward to hearing from you and congratulations for a job well done. Sin erely, Tom L. Allen cc: William P. Workman, City Manager Elray H. Konkel, Finance Director Gary Caporicci, Audit Firm of Caporicci, Cropper & Larson John C. Whitman, Engineering Firm of Charles Abbott and Associates MaActtervbennu[.doc. -ArE®RD, CERTIFICP— 7 OF LIABILITY INSUF ',NCE o9/oai2 0 PRCIDLJCER (949)263-0606 FAX („9)263-0906 1� CEkTIFICATE IS �dSUED AS A MATTER OF I FORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE Complete Insurance, Inc. HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR Cal i forni a DOI #0437762 ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. 1500 Quail St., Suite 410 Newport Beach, CA 92660 INSURERS AFFORDING COVERAGE INSURED Caporiccl, Cropper & Larson INSURER A: Northern insurance Co of NY 3184-D Airway Avenue INSURER B: Golden Eagle Insurance Corp Costa Mesa, CA 92626 INSURER C: INSURER D: INSURER E COVERAGES THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDMONS OF SUCH POLICIES AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. NSK —rt—j_1LTR TYPE OF INSURANCE POLICY NUMBER DATErMM/DDrYrY�] I DAT78MM/p,O ” I LIMITS GENERAL LIABILITY PAS036784552 09/81/2001 09 172R EACH OCCURRENCE S 1 000 000 X COMMERCIAL GENERAL LIABILITY CLAIMS MADE X❑ OCCUR A GEN'L AGGREGATE LIMIT APPLIES PER: POLICY n JECOT- F LOC AUTOMOBILE LIABILITY PAS036784552 ANY AUTO ALL OWNED AUTOS A SCHEDULEDAUTOS X HIRED AUTOS X NON -OWNED AUTOS .A]Hired Physical Damage - 550, 000 GARAGE LIABILITY ANY AUTO EXCESS LIABILITY 7 OCCUR F1 CLAIMS MADE DEDUCTIBLE RETENTION S WORKERS COMPENSATION AND EMPLOYERS' LIABILITY B OTHER A PROPERTY 4WC63813703 PAS0367845SZ 09/01/2001 09/01/2002 10/01/2000 10/01/2001 09/01/2001 09/01/2002 I FIRE DAMAGE (Any one fire) S MED EXP (Arty one person) S PERSONAL & ADV INJURY S GENERALAGGREGATE S PRODUCTS - COMPIOP AGG S COMBINED SINGLE LIMIT S (Ea accident) BODILY INJURY S (Per person) BODILY INJURY S (Per accident) PROPERTYDAMAGE S (Par accident) I AUTO ONLY - EA ACCIDENT S OTHER THAN EA ACC S AUTO ONLY: AGG S EACH OCCURRENCE S (AGGREGATE $ I` S S I S 1,000,000 10,000 1,000,000 2,000,000 2,000,000 1,000,000 X I TORY LIMITS I I ER I E.L. EACH ACCIDENT S 1 , 000 , OOOI E.L. DISEASE - EA EMPLOYEE S 1,000,000 E.L. DISEASE -POLICY LIMIT S 11000,000 Contents - $75,000 Replacement Cost; $500 Ded. Theft Included DESCRIPTION OF OPERATIONS/LOCATIONSNEHICLESIEXCLUSIONS ADDED BY ENDORSEMENTISPECIAL PROVISICNS ertificate holder is named additional insured as respects general liability but only if required by written contract prior to an occurrence per attached and per policy terms and conditions. Except a 10 -day notice for non-payment of premium. CERTIFICATE HOLDER I I ADDITIONAL INSURED; INSURER LETTER City of San Rafael 1400 Fifth Avenue San Rafael, CA 94915-1560 CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL X30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. AUTHORIZED REPRESENTATIVE John Pitchess/NAN ACORD 25-S (7197) ©ACORD CORPORATION 1988