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HomeMy WebLinkAboutFin Accounting & Financial Reporting Svcs 2017____________________________________________________________________________________ FOR CITY CLERK ONLY File No.: 4-3-587 Council Meeting: 10/16/2017 Disposition: Resolution 14402 Agenda Item No: 4.b Meeting Date: October 16, 2017 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Finance Prepared by: Mark Moses, Finance Director City Manager Approval: ______________ TOPIC: PROFESSIONAL ACCOUNTING AND FINANCIAL REPORTING SERVICES SUBJECT: A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN AMENDMENT IN THE AMOUNT OF $60,000 TO THE PROFESSIONAL SERVICES 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 I/II. These two positions are responsible for reviewing and generating entries to the City’s accounting system, maintaining the integrity of the City’s 42 fund accounts, generating financial and audit reports, including the City’s Comprehensive Annual Financial Report (CAFR) and State Controller’s Reports. These two positions provide budget support to departments, assisting them with budget development, as well as with the monitoring of their resources throughout the year. Since early 2015, the two professional accounting positions have not been filled on a consistent basis, and both have been vacant since April 2017. There is an ongoing recruiting effort to fill these vacancies. In order to address the diminished staffing level, the City retained Vavrinek, Trine, Day & Co., (VTD), a regional government audit and accounting firm, in April 2015. The primary role of VTD has been to act as a resource to assist the City with governmental accounting and reporting technical requirements. Since the initial 2015 contract ($60,000), the City has extended the contract two times, once for 2016 ($50,000), and again for 2017 ($60,000). This most recent amendment has reached its limit. The purpose of this amendment is to address the City’s accounting professional resource needs that continue with the deficit of professional accounting staff by extending the terms. Staff reviewed the content of this report with the City Council Finance Committee at its meeting of September 26, 2017, at which time it was recommended to bring this item to the City Council. SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 ANALYSIS: In order to maintain continuity through the turnover of accounting staff, the Finance Department 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 complex focus of the accountants’ work on technical compliance with accounting rules (Governmental Accounting Standards Board and Generally Accepted Accounting Principles) and the implementation of financial reporting software and new financial reporting requirements, the City engaged VTD for technical accounting support. Although some of the other support options have been helpful in keeping up with transaction processing and bank reconciliations, none of the other options has proven effective for technical accounting support and reporting. During the past spring and summer, VTD was key in enabling the City to meet its goal of early implementation of the new reporting requirement for other postemployment benefits (i.e., GASB 75 for retiree healthcare benefits). VTD will assist the City with the following tasks: 1. Development of City-wide fund reporting updates in support of the operating and Capital Improvement Program budget process; 2. Review of monthly and annual journal entries; and 3. Fiscal year-end close activities that provide time for the annual audit to be completed within 90 days of fiscal year-end. Accordingly, Staff recommends extending the term of the City’s professional services agreement with VTD through December 31, 2018. FISCAL IMPACT: The original agreement from 2015 started with a not-to-exceed of $60,000 and has been amended twice, in order to extend the term. The proposed amendment is for $60,000 and will extend the term through December 31, 2018. Contract Term Not-to-Exceed Original April 6, 2015 – December 31, 2015 $60,000 1st amendment extended through December 31, 2016 $110,000 2nd amendment extended through December 31, 2017 $170,000 3rd amendment (proposed) extend through December 31, 2018 $230,000 As a result of the ongoing staff vacancies, there are sufficient funds in the Finance Department’s General Fund budget to support the extension of this contract. Staff will report to the City Council Finance Committee on the progress of the efforts to fill the accountant positions. There are sufficient resources appropriated in the General Fund for these services, due to the accounting staff vacancies for which this contract is designed to backfill critical professional services. RECOMMENDED ACTION: Adopt Resolution. ATTACHMENTS: Resolution with attached contract amendment Agreement for Professional Services with Vavrinek, Trine, Day &Co., LLP dated April 6, 2015 RESOLUTION NO. 14402 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AUTHORIZING THE CITY MANAGER TO EXECUTE AN AMENDMENT IN THE AMOUNT OF $60,000 TO THE PROFESSIONAL SERVICES AGREEMENT WITH VAVRINEK, TRINE, DAY & CO, LLP FOR ACCOUNTING AND FINANCIAL REPORTING RELATED SERVICES WHEREAS, the City of San Rafael’s finance department has two authorized professional accounting positions whose purpose is to provide the central accounting, financial reporting and budget support functions for the City; and WHEREAS, the City has recently experienced turnover in both accounting positions and one position has been vacant since October 2015, notwithstanding ongoing efforts to fill the position; and WHEREAS, on April 6, 2015, the City entered into a professional services agreement with Vavrinek, Trine, Day & Co., and on March 21, 2016 and December 19, 2016, amended that agreement in order to ensure sufficient resources through the City’s professional accountant staffing transition; and WHEREAS, the term of the professional services agreement, as so amended, expires on December 31, 2017; and WHEREAS, the City continues to require the services of Vavrinek, Trine, Day & Co. in order to fulfill City accounting and financial reporting requirements. 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 the “Third Amendment to Agreement for Professional Services for Accounting and Financial Reporting Services” between the City of San Rafael and Vavrinek, Trine, Day & Co., attached hereto as “Attachment A” and incorporated herein, in a final form approved by the City Attorney’s Office. 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 16th day of October, 2017, by the following vote to wit: AYES: Councilmembers: Gamblin, McCullough & Mayor Pro Tem Colin NOES: Councilmembers: None ABSENT: Councilmembers: Bushey and Mayor Phillips ESTHER C. BEIRNE, City Clerk 1 THIRD AMENDMENT TO AGREEMENT FOR PROFESSIONAL SERVICES FOR ACCOUNTING AND FINANCIAL REPORTING SERVICES THIS THIRD AMENDMENT to Agreement for Professional Services for Accounting and Financial Reporting Services is made and entered into the ______ day of __________, 2017, by and between the CITY OF SAN RAFAEL (hereinafter "CITY"), and VAVRINEK, TRINE, DAY & CO, LLP (hereinafter "CONTRACTOR"). RECITALS WHEREAS, on April 6, 2015, CITY and CONTRACTOR entered into an “Agreement for Professional Services for Accounting and Financial Reporting Services” (the “Agreement”), pursuant to which CONTRACTOR agreed to provide designated services to CITY through December 31, 2015; and WHEREAS, previous amendments to the Agreement have extended the term of the Agreement through December 31, 2017; and WHEREAS, CITY and CONTRACTOR wish to further extend the term of the 2015 Agreement as amended; AGREEMENT NOW, THEREFORE, the parties hereby agree as follows: 1. Section 4 of the Agreement, entitled “ COMPENSATION” is hereby amended to increase the compensation amount under the Agreement by an additional $60,000, and as amended shall read in its entirety as follows: 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 dated December 2, 2016, in an amount not to exceed $230,000, including expenses. Payment will be made monthly upon receipt by PROJECT MANAGER of itemized invoices submitted by CONTRACTOR. 2. Section 5 of the Agreement, entitled “TERM OF AGREEMENT” is hereby amended to extend the term of the Agreement, and as amended shall read in its entirety as follows: 2 The term of this Agreement shall be from the date of execution through December 31, 2018. 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 120 days, or when the not-to-exceed limit of this contract is reached. 3. Except as specifically amended herein, all other terms and conditions of the Agreement shall remain unchanged and in full force and effect. IN WITNESS WHEREOF, the parties have executed this Amendment as of the day, month and year first above written. CITY OF SAN RAFAEL CONTRACTOR ______________________________ By:______________________________ JIM SCHUTZ, City Manager Name:____________________________ Title:_____________________________ ATTEST: ______________________________ ESTHER C. BEIRNE, City Clerk APPROVED AS TO FORM: _________________________________ ROBERT F. EPSTEIN, City Attorney STAFF REPORT APPROVAL ROUTING SLIP Staff Report Author: Mark Moses Date of Meeting: 10/16/2017 Department: Finance Topic: PROFESSIONAL ACCOUNTING AND FINANCIAL REPORTING SERVICES Subject: A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH VAVRINEK, TRINE, DAY & CO, LLP FOR ACCOUNTING AND FINANCIAL REPORTING RELATED SERVICES Type: (check all that apply) ☒ Consent Calendar ☐ Public Hearing ☐ Discussion Item ☐ Resolution ☐ Ordinance ☐ Professional Services Agreement ☐ Informational Report *If PSA, City Attorney approval is required prior to start of staff report approval process Was agenda item publicly noticed? ☐ Yes ☐No Date noticed: ☐Mailed ☐Site posted ☐Marin IJ Due Date Responsibility Description Completed Date Initial / Comment DEPARTMENT REVIEW FRIDAY noon 09/29 Director Director approves staff report is ready for ACM, City Attorney & Finance review. 9/29/2017 ☒ MM CONTENT REVIEW TUESDAY morning 10/03 Assistant City Manager City Attorney Finance ACM, City Attorney & Finance will review items, make edits using track changes and ask questions using comments. Items will be returned to the author by end of day Wednesday. 10/5/2017 10/4/2017 10/2/2017 ☒ RW ☒ LG ☒ MM DEPARTMENT REVISIONS FRIDAY noon 10/6 Author Author revises the report based on comments receives and produces a final version (all track changes and comments removed) by Friday at noon. 10/6/2017 ☒ MM ACM, CITY ATTORNEY, FINANCE FINAL APPROVAL MONDAY morning 10/9 Assistant City Manager City Attorney Finance ACM, City Attorney & Finance will check to see their comments were adequately addressed and sign-off for the City Manager to conduct the final review. 10/10/2017 10/11/2017 10/6/2017 ☒ CA ☒ LG ☒ MM TUES noon 10/10 City Manager Final review and approval 10/11/2017 ☒ JS