HomeMy WebLinkAbout30 - Auditor RecommendationTO:
FROM:
CITY OF
NEWPORT BEACH
City Council Staff Report
June 14, 2016
Agenda Item No. 30
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
Dan Matusiewicz, Finance Director
PREPARED BY: Steve Montano, Deputy Finance Director,
smontano(D_newportgeachca.gov
PHONE: 949-644-3240
TITLE: Auditor Recommendation
ABSTRACT:
Per Council Policy F-15, External Financial Reporting, Disclosure and Annual Audits,
the City issued a Request for Proposal (RFP) for audit services dated March 21, 2016,
to audit its financial statements for the fiscal year ending June 30, 2016, with the option
of auditing its financial statements for four subsequent fiscal years.
By the proposal due date of April 5, 2016, the following nine firms submitted proposals:
Badawi & Associates; Chavan & Associates LLP; Davis Farr LLP; Gruber & Associates;
Lance, Soll & Lunghard (LSL) LLP; The Pun Group; Rogers, Anderson, Malody & Scott
LLP; Vavrinek, Trine & Day Co. LLP; and White, Nelson, Diehl, Evans LLP (WNDE).
After a thorough selection process, staff is recommending, with the concurrence of the
Finance Committee, the services of WNDE for City Auditor.
RECOMMENDATION:
a) Determine that the action is exempt from the California Environmental Quality Act
(CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines
because it will not result in a physical change to the environment, directly or
indirectly; and
b) Authorize the Mayor and City Clerk to sign a contract with White, Nelson, Diehl,
Evans LLP to perform the City's annual financial audit for the Fiscal Year 2015-2016,
with the option to renew the contract for four additional one-year terms.
30-1
Auditor Recommendation
June 14, 2016
Page 2
FUNDING REQUIREMENTS:
The 2016-2017 proposed budget, if approved, includes sufficient funding for the first
one-year term of this contract while funding for the four remaining one-year terms is
contingent upon budget appropriation each fiscal year. If approved, an annual
appropriation of approximately $45,500 would be included in the Finance Department,
Audit Services account (01030302-811007).
The total compensation over the four-year period for the City's annual audits shall not
exceed $241,565 as reflected in the table below.
Audit for Fiscal Year:
Cost:
2015-16
$45,500
2016-17
$46,865
2017-18
$48,270
2018-19
$49,720
2019-20
$51,210
Total 5 Year Cost
$241,565
DISCUSSION:
Proposals were submitted in two parts, including a written technical proposal and a
separate sealed dollar cost bid. Under the coordination of the Accounting Manager,
proposals were reviewed and scored by a three-person Audit Selection Committee
comprised of the Finance Director, the Deputy Finance Director and the Accounting
Manager. The written technical proposals were reviewed and scored by the Committee
before the sealed dollar cost bids were opened and scored.
Staff evaluated each firm's proposals based on the following criteria:
• Providing consulting services related to auditing, with an emphasis on
government accounting and auditing of entities with at least the size and
complexity of Newport Beach.
• Quality, background, reputation, credibility and experience of the firm.
• Quality of the staff with emphasis placed on educational background, time spent
in the field, and valid certifications possessed by the project team members.
• Practices and procedures used to carry out the requested services according to
the City's expectations.
30-2
Auditor Recommendation
June 14, 2016
Page 3
While all firms met the minimum qualifications, based on the technical content of the
proposals, the quality and experience of the proposed engagement staff, comparable
and prestigious clients, and other intangibles; the Audit Selection Committee rated
WNDE as the top technical proposer as indicated below. Sealed dollar cost bids were
then opened, and revealed annual cost as indicated below.
Firm Annual Price Technical Score
White Nelson Diehl Evans
$45,500
97.0
Davis Farr, LLP
$43,000
96.0
Rogers, Anderson, Malody & Scott
$47,650
91.0
LSL
$52,630
90.0
Gruber & Associates
$37,000
89.5
Vavrinek, Trine, Day & Co.
$63,000
85.5
The Pun Group
$43,500
72.0
Badawi & Associates
$45,990
66.5
Chavan &Associates
$35,000
61.0
Average
$45,919
83.2
LSL was not considered due to the recent alleged embezzlement disclosure in the City
of Placentia where LSL is currently engaged as the City Auditor. Allegations of this
nature tend to damage the reputation and credibility of an auditor. Since auditors are
hired to lend credibility to the City's financial statements, staff decided it was best not to
consider LSL further, under the current circumstances. Due to the lower technical
scores assigned to Pun, Badawi and Chavan relative to the other firms, staff did not
advance these three firms for further consideration. After obtaining additional
information by conducting an extensive reference check on the remaining firms, staff
narrowed their selection consideration to Davis Farr and WNDE. Both reputable firms
have municipal audit expertise, staff expertise, and the ability to provide high-quality
consulting and tax expertise.
While either firm would make a great choice, staff selected WNDE because of its
longevity and reputation, having provided services to governments for over 80 years,
including to the City of Newport Beach for the past five. The specific knowledge WNDE
has about the City and its operations will enhance the quality of the audit. WNDE will
be able to identify and focus on specific risk areas and will reduce audit costs as staff
will not spend time training the firm on the operations of the City. To maintain audit
quality and auditor independence, WNDE proposed to rotate the audit partner and audit
supervisor for this second engagement term with the City.
Davis Farr is a newly reconstituted firm of seasoned professionals who for the most part
worked for Mayer Hoffman McCann (MHM). This firm no longer participates in the local
government audit marketplace. MHM was engaged with the City of Bell at the time that
the financial corruption scandal emerged there in 2010. While Davis Farr staff consists
of highly experienced government audit professionals, staff believes that having a few
more years as an established firm would make it more attractive.
The Finance Committee concurred with staff's recommendation on June 2, 2016
30-3
Auditor Recommendation
June 14, 2016
Page 4
The Government Finance Officers' Association (GFOA) best practices recommend
governmental entities should enter into multiyear agreements of at least five years in
duration when obtaining the services of independent auditors. Such agreements allow
for greater continuity and help to minimize the potential for disruption in connection with
the independent audit. Multiyear agreements can also help to reduce audit costs by
allowing auditors to recover certain "startup" costs over several years, rather than over
a single year.
If approved, the WNDE contract would represent a second five year period. This is
permissible under Council Policy F-15 "External Financial Reporting, Disclosure &
Annual Audits" but this policy requires mandatory auditor rotation after ten consecutive
years.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENT:
Attachment A - Professional Services Agreement
30-4
Attachment A
Professional Services Agreement
30-5
RROFEIEISIONAll EIE F % ICE EI AGREEME IS T
W17H WF 118, NEI11.151Oh, DIEHL, 8VANS LUR ROF
PROPHE191ONAll AUDIT SERVICES
1 F 19 RF OFE991O1` /IL EIER\� IOESS AGREEMEP 11 ("Agiieemeni ") is made .and
en-laiied into as oil this '141h darl of JLine, 20'16 ("Eflecclive Date"), by and between the
C MY OF NEVI FICIR-I E BACH, a Calilornia mUnicipal corporation and charier city
("G-111"), and WH17E, N BL9ON , 1118FL, EIVANEI LLP, a Caliilonnia limited liabili-ly
partnership ("Consu1-1ant "), whose addiiess is 2875 N ichelle ❑riive, 9uite 300, Irvine,
C alilonnia 92606, and is made with rie-lerience io the lollowin( :
Mill AUS
A. City is a municipal corporation duly onganized and validl)l exisilinc unden ilf a laws
of the State of California with the power to a aiiry on its b is iness as it is now being
conducted unden -11 a siatuie, oil -II a Silate of Calilonnia and the C1 ar eii of City.
E , City deshes io engage Oonsul-lanil Io provide piiolessional aLidii services
("Flnoject").
CI. Consulilani posses ses the skill, expenience, ability, bah ( pound, cedilication and
knowledge -lo provide the professional services described in chis Agneement.
11. Ciily has soliciiled and neceived a pnaposal from Clonsultan'l, has reviewed the
pneviOLis expenience and evaluated ilhe expo r1 ise of Clonsullanil, and des ines to
retain Con, uliant to iienden p nofessional services under the terms and cor diiions
set 1lorlh in this Agneement.
NOW, 11HEREROF 8, it is muivall)l agreed by and betvleen the undeiisigned
parties as ilollows :
1. TE RN
The ienm oil this Agneement shall commence on the .8flective Date, and shall
terminate on June 13, 202 1, unles,, terminated earlier as sell for t henein.
2. SUR% KISS TO 88 PE RFOF N HEI
Consultant s[all diligently perionm all the services de: cnibed in the Scope o-1
9ertiices attached f ereto as 9xhiL it A ar d incoiiporaied heriein by rie-leiier ce ("Services"
oii "Wonk"). C1ilJ1 may elect -lo delete aerain Services within the Scope oil Services ai i-ls
sole discretion.
3. TIMES OF PERROF MANCH
3.'I -lime is oil the essence in the performance of SeRlices under this
Agiieemeni and Consultant shall perlonm the Elerviaes in acaordance with the schedule
included in 9x1 ibit A. In t1 a abs ence oil a sfi ecillic scl edule, the 9ermices : hall be
.OM
perfonmed to completion in a diligent and timely manneii. The -lailune b)l Consultant to
strictly ad[ ene to the schedule set north in Exhibit A, it any, or perionm the Sler%iices in a
diligent and timely manner may nesult in -lenmination of this Agreement by City.
3.2 Notwithstanding the foregoing, Clonsultant s hall not be nesponsit le -fon
dela)ls due -lo causes beyond Clonsultant's neasonable contnol. F oweveu, in tl a case oil
any such delay in the Services to be provided for the Project, each party hereby agrees
to pnovide notice will in two (2) calendaii clays of the oaa unrence caul ing 1:1 e delay to tl e
other par y s o tl at all dela) lo can be add nessed.
3.3 Clonsultan-1 shall submit all nequests fou extensions oil lime fou performance
in wniting to the FInoject Administrator m defined henein no laden than filen (10) calendan
clays aflen the s-Iari of the condition that punporedly causes a delay. The Project
Administnaton shall neview all such negluests and may grant neasona ble time extensions
ion urrloneseeat le delays tl at a ne beyond Cla nsultan-I's aontrol.
3.4 Ron all lime peuiods not s peci-licall)l set ilodh henein, Consultant stall
nesq and in the most exp edienI and appnopniate mannen under tl e Circumstances, by
l and-deliver�l or mail.
4. COMRBNSA71ON TO CONSUL11ANT
4.1 GI)l shall pay Clonsultant 'Ion the 9enilaes an a time and expense not -to -
exceed basis in accondance wiilh the pnovisions of this Election and the Schedule oil
Eilling Rales atilaahed hereto as Bxl ibis ® and inaornorated herein b)l ueilenenae.
Clansultant's compensa-lion fou all Woo perionmed in accouclance will 'Il is Agneement,
including all neimbursable items and sut consultant fees, shall not exceed Twa H undried
Far y One llhausanc Five H unc ned 1liwly Five Dallars and OOA,100 ($241,565.00),
witl out prion wnitlen aulhoniaalion ilrom City. IN o billing nate changes sl all be made
clurin g tl a tenm oil -Il is AgueemenI wilhout the puion written appnoval oil City.
4.2 Clonsullant shall submit monthly invoices to City descnibing the Wonk
perfourn ed the preceding rn onth. Consultant's bills sl all include the name of the penson
wl o nerfa rimed the Ut ouk, a bnie-1 descniption of the 9eruices periormed anon the
speci-lic task in the clIcopa o1 9ervrices to which it relates, the date the :lerviiaes were
perfonrn ed, the n umt eu of hours spend on all Work billed on an t ounly basis, and a
description of any reirn bunsable expenditunes. City shall pay Consultant no laten than
thir y (30) calendar days after appnoval of the monthly inva ice b)l City slafl.
4.3 Clit)l shall neimbunse Clonsultant only fou those costs on expenses
speci-licall)l idenlilied in Exhibit Bio this Agreement on specilica Ily anproved in writing in
advance t y Ciiy.
4.4 Consullan-1 shall not receive any aomnensation for Elxtra Wonk perionmed
witl out the pnior wui-lten a uthouization oil Clity. PIs used henein, "axtna VI on[ " means any
Wonk that is detenmined by Cit)l to be necessar�l floe the propen corn pletion of the
Rroject, but which is not included within the Scope oil Sermices and which the parties dict
not neasonably anticipate would be necessar�l at the execution oil this Agneement.
"I ite, Nelson, Diehl, Evans L ILR Rage I
30-7
Compensation fon any authorized Extra Wonk shall t e paid in accordance wit[ the
Schedule o-1 Billing Rates as s et for h in Exhibit B.
5. RROJEC7 MANAGER
5.1 Consullant shall designate a Fnoject Manager, who shall coordinate all
p hases of the Pnojeci. l [ is Pnoject N ana gen shall be available to City at all reason able
times during the /Igneemenl term. Cons uliant has da signa ted Roben J. Callanan to be
its Pnoject Managen. Clonsuliant s[ all not Remove on neassig n the Rrojec-1 Manager or
any pensonnel listed in Bx[ ibit 11 on assign any nevi on replacement peri onnel to the
Rnoject wit[ out the prior wnitten consent of Clity. Clity's appnoNial shall not be
unneasonably withheld with nespecil to Iha nemoval on assignment of non -keel pensonnel.
5.2 Consullanl, at the sole discretion oI Clity, s hall ne move room the Rnoject
any oil its pensonnel assignEid to the pedonmance oil Serviices upon Vini0en Request of
City. Consulilanl warnants that ii will continuously furnish the necessaryl pensonnel to
complele the Rrojecl on a timely bas is as contemplated bbl this Agneemeni.
5.3 If Clonsultanl is perfonming inspection serviiaes Ion Clity, the Fnoject
N ana gEin and any othen assigned staff stall be equipped wit[ a cEillulan phone to
communicate with City slafil. The Pnojeci Managen's cellulan p[ one number shall be
p novided to City.
6. ADMIN ISTRA1 ION
1 [ is Agreement will be administered by the Rinance E epari meal. Ciiy's Rina nce
Directon or des iglnee sl all be the Pnojeci pldminislnaton and s[ all [ ave the authonity to
act far Clity undam this AgneemEmi. l I e Rnoject Admin istnaton shall nepnesent City in all
n at -le ns per aining to the Services to be nendened purs uan t to this Agreen ent.
7. C117Y'S REJRON 31BIL1I11113S
to assist Consultant in the execution oil its nEisponsibilities Linden -I[ is Agreement,
City. agrees to pnovide access to and upon negUest oil Consultant, one copy oil all
eA ling relevant infonmailion on file at City. City will pnovide all such matenials in a
timely manners so as nol to cause dEilays in Consultant's Work schedule.
8. STANDARD OF CARE
8.1 All of the 11:Ienflaes shall be performed by Clonsultant on unden ClonSLiltant's
supervision. ClonSLiltanl nepnesents t1al it possesses the pnoilession al and technical
pensonnel requined to perlonm the Seniices nequined bbl ilhis Agreement, and that it will
perfonm all Services in a manner commensurate with commUniiy pnofessional standands
and with tha ondinaN degnee of skill and cane thal woUld be used bbl other reasonably
competent pnaclitionens of the same discipline under similar cincumslanaes. All
Serviices shall be perlonmed [ y qualiilied and experienced pens a nnel who ane no -t
employed by City. Ely delivEiny o1 comp leted Wonk, Cons uliant cer ifies that the Won[
W[ ite, Nelson, I iehl, Evans LL_FI _ Page 3
o :j
cor forms to the iiequiremenis of this Agreement, all applicable - ederal, sia-le and local
laws, and legally recognized professional standards.
8.2 Consultant rep lies enis and warrants to City that it has, shall obtain, and
shall keep in full force and efleat during the term hereol, at its Sole cosi ar d expense, all
licenses, permi-Is, qualillications, insurance and approvals of wl aisoever nature that is
legally iiequired oll Cor suhlant to pracilice its procession. Cons ullar 1 shall maintain a Ci-ly
of E ewporl Beach business license dining the term of this Agneement.
8.3 Cons ullant shall not be nes pons ible fon delay, nor shall Clonsultant be
responsible fon damages on be in defaul-1 on deemed to t e in dellatill by reason of s-lrikes,
Io6 ouils, accidents, acts of God, or the failure of Ci-ly to furnish timely inllonmalion or to
ap piiove or disapprove Consultant's WorN promptly, or delay oii -lauliy pedonmance by
City, aon-lnacilons, on governmental agencies.
9. FOLD HAFN LESS
9A I l o the fullest exten-1 penmitted by law, ClonSLiltani shall indemnify, defend
and hold harmless Ciiy, i-ls Clity Council, boards and commissions, officers, agents,
volLinteens and employees (collectively, the "Indemnified Flar ies") room and agains-1 any
and all claims (including, without limitation, claims fon bodily injur)j, death on damage to
pnoperiy), demands, obligations, damages, actions, causes o-1 ac -lion, suits, losses,
judgments, tines, penallies, liabilities, costs and expenses (including, wilhaui limiilation,
attorneys' fees, disbursements and tour costs) of everyl f ind and nailune whatsoeveii
(individually, a Claim; collectively, "Claims"), which may arise from or in any manner
uelale (directly oii indirectly) ilo any bneaah oil ire lenms and conditions of this
Agreement), any Wonk nerfonmed or Serviaes grbvided under chis Agreement) including,
wilhoutl limitatlion, defects in wonkmans hip on maienials on Consultant's pnesence or
activities condUcled on the Pnojeci (including the negligent, reckless, andilon wilHul acus,
ennons and/or omissions of Cla nsultant, its pnincipals, officens, agents, employees,
vendors, suppliers, consultants, subconinacions, anyone employed directly on indirectly
by any olihem or for wf ose acts Ihey may be fiat le, on any or all of Them).
9.2 No-Wifl slanding the -onegloing, noll ing heneir shall be constnued to
requine Consultant to indemnify the Indemnified Radies from any Claim anising room the
sole negligence or willful misaonduct of the Indemnilied Par ies. Nothing in this
indemnity sl all be conslnued as authonizing any award of attorneys' lees in any action
on on to en-lonce the teams of this Agreemenl. This indemnify shall apply to all claims
and liabilitly regandless of whelhen any insurance policies are applicable. -Ihe policy
limits do noel act as a limitation Ripon the amount ofl indemnillication to be provided by
Consull1anl.
1( . IN UERENDEN I C ON 1 FACTOR
It is underslood -II all City retains Clonsultan-1 on an independent con-Iraclor basis
and Clonsul-lani is not an agent on employee oll Cify. The manner and means of
conduating the Wort are unden the control o- Cons ullant, except to the e)rtenl they ane
While, Nelson, Diehl, Evans LLR Page z
30-9
limiied I: y stailute, rule oil uegulation and the expuessed -lenms ofl this plgneemenil. N o
civil service stailus on othen riglht oil employment shall accrue to Consullanl on its
employees. nothing in Il is Agiieemen-1 shall le deemed to consliiu-le approval -Ion
Clonsultanl or any of Cons ullani's employees or agen-ls, io be the agenils or employees
oil Ciily. Clonsultan'l shall have the responsibility fou and conilrol oven the means of
perlo iming -If• a \A onl , provided ilhal Clonsultant is in corn pliance vilth the -lenms ofl this
plgneemeni. Anything in -11 is Agreement that may apps au 10 give Clity ilhe righl 10 dinect
Clonsultanl as to -l[ a delails oil the perfoiimanae of the Work or io exercise a measune of
conlnol over Consulilanl shall mean only that Consuliani shall follow the desines o-1 Ciiy
with iiespect to the results o-1 the SeRiices .
11. COORERAlION
Consultant agrees 10 wor6 closely and coopenate 'lull)l v+iith City's designa-led
F nojecl Administna'lon and any oihen agencies ihat may have jurisdiction or irrlenest in -11 e
Wonk to be performed. Cily agrees to coopenale with the Clonsul-lani on ilhe Pnojecl.
13. CIT4 ROLICY
Consullanl shall discuss and review all mailers nelaiing to policy and Piiojeci
lineation wil1h Clity's F nojeat pl(lministnalor in advance of all cnilical decision points in
ondeu 10 a nsune the Flnojeat proceeds in a mannen consisileni wiilh City goals and
policies.
13. RROGRES.I
Consultant is nes pon s ible -Ion keeping the F roje& Adminisilraion inilonmed on a
negulan basis regarding the s'laius and pnogness oil the Flnojeat, activities performed and
planned, and any meetings that have been scheduled on ane desired.
14. INSU RAN CH
Without limiting Consullant's indemniflica-1on of City, and pnion to commencement
o1 Won[, Consul-lani shall obtain, provide and maintain al iils own e7ipense duning ilhe
tenm a 1 this Agreemeni on lion oihen periods as speciflied in this Aglreemeni, polio ies ofl
insurance o-1 the I)lpe, amounts, teams and conditions described in -I[ a Insunanae
Aequiremerrls atilao hed heneilo as Exhibit C, and inconponated herein by nefeiience.
15. RROHIBITION ACIAIN US -I'll ASSIGN NUN IS AND IRAN 9FHRS
Except as specilically aulf oiiized unden this plgneemeni, the r-lertrices lo be
poovided Linden ihis Agreement shall not be assigned, lnansilerred contraated or
s ubconliiacied oui viithoul the piiion v+inililen appnoval o-1 My. Anil of -Ihe following) sl all
be constnued as an assignment: Me sale, assignment, than sler on othen dis posi lion ofl
any o-1 the issued and outstanding capital slocl of Cons uliant, on oil the inla nest of any
genesial parnen on joint venlunen or syndicate member on c&enant it Clonsuliant is a
partnership or joint-ventLrne or syndicate or co-ilenanay, wf ich shall result in changing)
the as nilrol oil Clonsullan-l. Clorrlrol means li11y pencenl (90''/x) on mane o1 the voilingl
Whiie, Batson, C ieh1, Evans LLP Fage 5
30-10
power or twenty-five pencent (25%) os mone of the assets of the conporation, par nessl ip
on joini•-ventune.
16. E L SCION-iRpuniNG
1I a SUbcontnactors authorized by City, if anal, to perfonm Work on this Rnoject ane
identified in Bxhibit A. Consultant shall be sully nesponsible to Ciiy 'ion all sats and
omissions of any subcontnaaton. Nolhing in tI is Agneement shall cneate any contractual
nela-lionship between Ciiy and any subcontnactor non shall it create any of ligla-lion on the
par ofl Clit)l to pay or to see to the payment of any monies due to any suc[
subcontractor other t[ an as otherwise sequined by law. City is an inlended beneiliciary
ofl any Wonk perfonmed by the subcontractor lion punpases all esiat Iia hing a duty o-1 caiie
tetween It subconinacton and City. Except as specifically authonized henein, the
Services to t e provided under chis Agreement shall not be otherwise assigned,
tnansflenned, contmated on subconisacted out will out the pi ion wnitten appnoval o-1 Clil)l.
17. OWNS RE F IR OR 1110CUME3NTE
'17.'1 Each and every neport, draft, map, reaard, plan, dacument and cithen
writing produced, including but nat limited lo, websites, blogs, social media accounts
and applicalions (I eneinaflen "Documents"), prepared on caused to be pnepaned l: y
Consul-lant, i -Is officers, employees, agents and sut contnactans, in -Ile coUnse of
implementing 11his Agneemenl, sl all become the exclusive pnoper y oll Ci-ly, and Clily
stall have the sole rig[ 1 to use such matenials in its discretion withoLrt furthen
compensation to Consullan1 on any other parol. Additionally, all material posted in
cyI enspace by Consultani, its officens, employlees, agents and subcontractors, in the
counse oil implementing) this Agmement, sl• all become tI a exclusive properly of City,
and City sl all have -Ile sole nig) t to rise such materials in its discretion withoul further
compensatian to ClonSUltant on any other party. Consultani shall, at Clonsultant's
e)ipense, provide such Eocumenls, including all logins and passwond inlonmailon to Clil)l
upon piiion writlen request.
'17.2 ❑ocuments, including iding dnawingls and specifiica-lions, prepaned by
Consultani punsuant lo this Agreement are not intended on nepnesenled to be suitable
fan neuse E y CH)I on others on any othen project. Any use oil aomplelled ❑ocumenlls for
othen prajeats and any use o'1 incomplete Documents wit[ out specilic written
authorization 'Isom Clonsultanl will be al City's sole nisi' and wit[ out liability 110
Consultant. E'uriheii, any and all lial: ilii)l anising out oil changes made to Clonsultant's
deliver ables under Ihis Agneement by Clit)l on peiisa ns other than Clonsultanl is waived
against Clonsultanl, and Cily assumes fill responsibility ilon such changes unless Cli)l
I as given Clonsultant prior notice and has received ilram Clonsiiltanl wiiitten consent for
Stich changes.
'17.3 All wiit-len documan1ls shall be transmitted to Clity in formats compatible
wi-lh Microsoft Office andilon viewable wit) AIdobe Acnobat.
WI ite, Nelson, Diehl, Evans LLR Ragle 6
30-11
18. CONFIDENTIALITY
All Documents, including drafts, preliminary drawings or plans, notes and
communications that result from the Services in this Agreement, shall be kept
confidential unless City expressly authorizes in writing the release of information.
19. INTELLECTUAL PROPERTY INDEMNITY
Consultant shall defend and indemnify City, its agents, officers, representatives
and employees against any and all liability, including costs, for infringement or alleged
infringement of any United States' letters patent, trademark, or copyright, including
costs, contained in Consultant's Documents provided under this Agreement.
20. RECORDS
Consultant shall keep records and invoices in connection with the Services to be
performed under this Agreement. Consultant shall maintain complete and accurate
records with respect to the costs incurred under this Agreement and any Services,
expenditures and disbursements charged to City, for a minimum period of three (3)
years, or for any longer period required by law, from the date of final payment to
Consultant under this Agreement. All such records and invoices shall be clearly
identifiable. Consultant shall allow a representative of City to examine, audit and make
transcripts or copies of such records and invoices during regular business hours.
Consultant shall allow inspection of all Work, data, Documents, proceedings and
activities related to the Agreement for a period of three (3) years from the date of final
payment to Consultant under this Agreement.
4 TAIITIII:I:IQ4911ZrCV
City may withhold payment to Consultant of any disputed sums until satisfaction
of the dispute with respect to such payment. Such withholding shall not be deemed to
constitute a failure to pay according to the terms of this Agreement. Consultant shall
not discontinue Work as a result of such withholding. Consultant shall have an
immediate right to appeal to the City Manager or designee with respect to such disputed
sums. Consultant shall be entitled to receive interest on any withheld sums at the rate of
return that City earned on its investments during the time period, from the date of
withholding of any amounts found to have been improperly withheld.
22. ERRORS AND OMISSIONS
In the event of errors or omissions that are due to the negligence or professional
inexperience of Consultant which result in expense to City greater than what would
have resulted if there were not errors or omissions in the Work accomplished by
Consultant, the additional design, construction and/or restoration expense shall be
borne by Consultant. Nothing in this Section is intended to limit City's rights under the
law or any other sections of this Agreement.
White, Nelson, Diehl, Evans LLP Page 7
30-12
23. CITY'.1I RIIGH711O SIVIRUOY C IIHER CON 9UL11ANTS
Cily nes er\ies tl a nigl t to a mpla y othen Clonsultants in connection witf the
Flnojeat.
24. CON FUICIIIS OF INT®RIEST
24.] ClonSUItant on its employees rn ay be subjeat to the pnovisions ofl the
Claliilonnia Floliiical Refonm Act of 1972 (the "Ac "), which (1) aequires such pensons to
disclose any finanaial interest that may foreseeably k e matenially affected b)l the Wonk
performed unden tI is Agreement, and (2) prohibits SLch geasons tlnom making, on
participating in mal in g, decisions That will lloneseeabl)I financially affect auch inlerest.
24.2 11 subject to the Act, Consultant shall conilonm io all requinemenis of the
Flat. Railune to do so constitutes a maienial k neach and is gnounds for imn ediate
termination of tI is Agneemeni by Clity. Clonsultant shall indemniily and hold harmless
City ilon anal and all claims flor damages ne9 ulting fnom Cons uliant's violation of this
lection .
25. NOTICES
25.1 VIII notices, demands, requests on appnovaN, including any change in
mailing address, Io be given unden the ienms oil This Agreement shall k e given in waiting,
and conclUsively shall be deemed served wt en delivered pensonally, on on -If a ihind
business day a'Iten the deposit iheneotl in the United 1Itate8 mail, postage prepaid, ilirst-
class mail, addnessed as I ereinafter paovided.
25.2 All notices, de" ands, nequests on approvals room Clonsultan-I to City ahall
be addnessed to City al:
Aitn: Dan Matusiewicz, Flinance Dineatoa
Finance C epartmeni
City oil Newport 9eacl
100 Clivic Clenten Drive
HO Ho)i '179 8
Newport Oeacl , CA 92658
25.3 1111 notices, demands, nequests on approvals room Clity to Consultant a hall
be addnessed -lo Consultant at:
At -in: Rot er J. Callanan
WI ite, Nelson, Cliehl, 8vans LLFI
2875 Michelle Dri�ie, Suite 300
Invine, CSI 929 06
White, Nelson, Diet I, 8vans LLR
30-13
26. CUAW"I
L nless a sl or en time is specified elsewheiie in this Agneement, before making its
-lin al iiequest lion paymeni Linden tf is Aglreemeni, Consultant sf all sut mit to City, in
writing, all alaims lion compensation under or anising out of this Agreement.
Consultant's acceptance oil 1 he lir al p aymeni shall constitute a waiven oil all claims for
compensation unden on anising out oil this Agreement except those previorisly made it
writing and identilied by Clonsciltant in writing as Unsettled at -If a time o1 its linal negluest
-Ion payment. Consultant and CWy expressly agree that in addition -lo any claims -liling
requirements set -lor h in the Agreement, Consul'lanil shall be required to lile any claim
Consultant n ay have agair si Ci-ly in striat conibrmanci e with the Clovennment Cllaims Act
(Clovennment Clode sections 900 ell seq.].
'17. 1 ERM IN Al 11M
27.1 Ir tf e event tf at eiihen party fails on neluses to perform any o-1 the
provisions ofl this Agneemenl a-1 the lime and in the mannen required, That par y shall be
deemed in defaul-1 in the perfoiimanae ofl this Plglneemer t. If such defaul-1 is no'l cuned
wiilhin a peniod of two (2) aalenclar (lays, on it mone Than two (2) calendan days ane
reasonabl)I required Io cure the dellault and the deilaulting parly fails to give adequate
assurance of die perfonmance wilhin two (2) aalendar clays aiten neceipt oil written
notice oil de-lault, speaifying the nature of suaf dellault and the steps necessaryl to acne
suah cleilauli, and theneailten diligently 'lake steps lo cure If a de-lault, the non-dallaulting
pary may tenminate the Plgneament ilodhwilf by giving -lo the defaulting pary written
na tice hereo-l.
27.2 Nolv+iithstandingl 11 e abode provisions, Oii)I shall have the night, al its sole
and absolute discnelion and without cause, of ienmina-1ri91 this Flglneemeni at any time b)I
giving no less than seven (7) calendan clays' prian wntilten notice -lo Consul-lant. In the
Eiven-1 ofl termination Linden this clection, (lil)I shall pay ClonsLillant tbii Slervices
satisflac-lonily perionmed and cos'Is incurred up to the effective dale oil tenminatior flou
whicf Clonsultant has no -1 been pneviously paid. On the efleative date of termination,
Consultant sf all deliver Io City all reports, Documents and othen infonma1ion developed
or accumulated in -If a perlonmance o11tf is Agneement, wf athen in dra11 on -linal dorm.
28. STANDARD PROVISIONS
25.1 REiciials. Chily and Clonsultant as knowledge -If ail ilhe abode Reci-lals are
nue and aonrect and are heneb)I inconponaied by ne-lenena a into ilhis Plgneement.
25.2 Compliar ci e with all Laws. Clonsultant shall, at its own cost and expense,
comply with all sta'lutes, ordinances, regulations and negUinements ofl all governmental
er cities, including -lederal, state, county on municipal, whether now in 1lonce on f eiieinaften
enacted. In addition, all Wonk pnepaned by Clonsultaril shall conform Io applicable Ciiy,
coun,ly, slate ar d fedenal laws, rules, negulations and permit negluinemenis and be
subject to appnoval of the Flnoject Admir is tnaton and Clity.
While, Nelson, Diehl, Evans LLR Page 9
30-14
98.3 Waiven. A wahien by eithen par y of any bneaah, of any team, covens n11 oil
condition contained henein shall not be deemed to be a waiven al any suksequenl
bneaat of the same oil any o -It en term, covenant on condition contained herein, whe'lt er
of the same or a differen-1 aharacien.
98.E Integrated Contnact. 111 is Agreemen-1 nepnesenls the lull � nd aomplele
undensianding of eNier}l kind on na-ltine whalsoeveu between the parties henelo, and all
pneliminarNI negoiia,lions and agreemenls o-1 wha-Iso even kind or nature ane merged
herein. No verbal agneement ori implied aovenan-1 shall be t eld 10 vagI -It a provisions
henein.
98.5 Conllicls on InconsislenciEis. In the event Il ere anEi anal conllicis on
inconsistencies between this Agneemen-1 and IhEi 9aope of 9erviices on any ollhen
attachments ails ched hcneio, 11he tenms of It is Agneemen-1 91 all govern.
98.6 Inteupne-1 lion. The teams of 'Itis FlglnEiemeni shall bEi construed in
acaa rdance with 11' El meaning of thEi language used and sl• all not b(i construed lion or
agains'l eiir en party by neason of 11 he au -It oast ip of thEi Agreemenll on any olhen nulE1 o'l
construction which mighl ollherwlso apply.
98.7 Amendmein-Is.. This AIgreeimein-1 may be modi-lied or amended only by a
written documont execu'led b)l both Consullanll and Clity and approvEid as to fonm by thEi
City Ailonney.
98.8 9evenabilij� . If any ienm or portion o-1 this Agneement is t eld to t e invalid,
il[Eig� I, a ii o -l[ erwise unEiniloraeable by a court oll competen-1 jurisdiction, the remaining
pnovisions o-1 this Agreemen'l shall continue in lull lonce and er ec1.
98.9 Contnolling Law and %enue. The laws of thEi 9IalEl of Cali-lonnia shall
goveuin It is Agneoment and all matters relating to it and anal action brougt 1 nelating io
this AIgneemeni st all be adjudicated in a court of competent jurisdiciion in II e Clounl)l o11
Orange, Stale of Clalilornia.
98.10 E gual Opportunil_y_9mploymenll. Consul-lani nepnesenls that i1 is an Equal
onportunil)l Eimployen and it shall not discriminate against any subconia cior, employlee
on applicant fon employment tecause noel, nEiligious cneed, colon, nalianal origlin,
ancesiryl, physical handicap, medical condition, manital sialus, sEix, sEixual orienlatio n,
age on any oll hen impenmissible bas is undEir law.
98.11 No AlionnEiys' REies. In the evEini o11 any dispute or legal action arising
un den 1 his Agneement, 11 he pnevailingl early shall not be entitled to a ltonn eys' lees.
98.19 Counienpads. It is Agneement may k e axeicuted in t\Ala (2) or monEi
counlonparls, eiact of -which shall be deemed an original and all of whict Iogle-lher shall
conslitule one (1) and It a same instrument.
[SIGN ATL R99 ON NE)11 RAGE]
While, Nelson, Diet 1, Elvans LLF
M gEi '10
30-15
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNtY'S OFFICE
Date: C, r
By:
_,A0 -
Aaron C. Harp [AM WlcxallU
City Attorney
ATTEST:
Date:
an
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
By:
Diane B. Dixon
Mayor
CONSULTANT:
Evans LLP, a
partnership
Date:
White, Nelson, Diehl,
California limited liability
By:
Robert J. Callanan
General Partner
Date:
By:
Nitin P. Patel
General Partner
[END OF SIGNATURES]
Attachments: Exhibit A — Scope of Services
Exhibit B — Schedule of Billing Rates
Exhibit C — Insurance Requirements
White, Nelson, Diehl, Evans LLP Page 11
30-16
EXHIB11 AI
SCOPE CIF SE RMICES
1. General Scople al Services
The City of � ewpor Beach desires the Consultant to express an opinion on the fain
presenia -lion of its basic 11inancial statements, and an "in-nelailon-to" on inion on the
combining and individual non -major fund 11inancial statements, including budgetaryl
companison scl edules in confommity witf auditing standands glenenally accep-led in the
United Stales of An erica and Goverinmenial Auditing E tandards issued by the
Comptroller oil the L n ited E. tates oil Amenica.
Cons ultant will be mequii ed to perlonm I[ a following tasks:
1.1 Perfonm an audit examination o11he govern mental activities, busin ess talpe
activities, each majon Iund, bridgetar�l companison o-1 n ajor governmental ilunds, the
aggi egate i emain ing fund inionmation, and the i elated no les whicl colleclively compnise
the basic finanaial statements of tl e City of Newport eeac[ ibis the Ci-ly ofl IS ewpor
9eac[ for the Hive yeans beginning witf the liscal year ending June 30, 2016. Consul-lani
will also examine the naguined sunplementaryl in-lonmation ("RSI") and sunpiemeniaryl
in-lonmation CE -.1"). -1he examinations will be conducted in acaondance with auditing
standands generally aaaep-led in tle L nited Ctate9 oil Amenica, Clavarrnier�l Auditing
Silarioaros as set -lor h by the Govennment AccoUntability Office ("GAKY), and the
nequiremenis of the Anieeucan lrs.Iitu1lE1 0A Clanliflea Audlic � ccaunilaritls' induslryl audii
guide en'litled, "Audits of State and Loaal Goverinmenial L niis." City E. tall will draft and
word pnocess the Clampinehensive Annual Financial Replar ("CAFR") cif -Ihe Ciily cit
Newplart Beach. Consulianl will pnepame the govemnment-wide linancial statements and
appnopniate reconciliations to these siatements in confonmity wish the lienor ing
standards set -lor h by Govennment Finance Offlicers Association ("G FOA") Ion thein
C/IFR awamcl pnognams. Consul-lant will finalize financial sAtemen,Is opinion by -Ile
second wee[ of Decembem each yean. The Cons uliant will n novide their audilons' report
ihemeon.
Consultant will apply to rnanaclerrentl's discussicin arc analysis those nrocedunes
negluimed by IhEi auditing standards to le applied to nequired supnlemen1laryl inlormalion
(understanding the method oil pnepanation, tl a sounce and basis for the inilormalion
presented, comnaming Ion consistency to the audited data pertaining to -Ile City, and
ascertaining the rrariaclerrentl's ciscussian anc aralylsis conlains all the intlormalion
iegluii ed by C overnmenl Accounting .1: tandards Boand ("GAC B") %'--.,lalemenl No. 3z and
does not contain information pmol ibited io be pnesentEid in the nianaglenienf's oiscussion
aria arialylsis).
1.2 Consultant will perform a single audi-1 for the dears in whiah the City
expends grea-len than $750,000 in federal landing in accondance with 'I[ e L n ilorm
Guidance. -Rhe single audit will aover all ledeiial grants meceived by the City and its
component units eitl er as a n pima ryl ori secondary recipien 1 fon fiscal years ended June
30, 20'16 thnoug[ June 30, 2020. 111 e Clit)l will provide to the Consultant the Schedule
White, IS elson, Die[ I, avans LLP Rage A-1
30-17
of Fec eral Financial Assislance encompassing all direct and pass-through llederal
Finds received by the City and component units. ConS Ultant will render reports on the
single audit in accordance with single audit requinements of tle Unilanm Guidance.
Consuilan'l will also pnepai a the electronic submission oil the data collec-lion foi m
nequined to be 'liled with the Single Audit Central Clleai inghorise.
1.3 (lonsultant will perform agreed-unan audit piiocedunes la test and nepart
on the Qil)l's Gann Limill for tl a bun (4) yeans beginning wish the fiscal dears ending
June 30, 2016 througl June 30, 2020.
'I .z Consultant will pra vide the City's Finance Cllornirnilllee with
communications nequired by the auditing standards: tl e Consultant's resnansit ilil)l
under genenall11 accepted auditing standards, signi-lican-1 accounting policies,
management judglment and aaaounting estimates, sign ilicant audit adjustmen-Is, tither
in-kinmaiicin in documents containingl audi-led finanaial statements, disagreements with
management, management consultation wish other accountants, majan issues
discussed witl management prion io retentian, diflliculties encaun-lened in performing
the audit, ernors, inieglularities, and illegal aats detected in the aourse of the audit.
'1.5 Consullani will irn media-lel)l rienart in writing any irregularities cin illegal acls
Thal crime to their altention to -Ihe City Clouncil, City Atlanney, and the City Manager as
negluired by the auditing standards.
'1.6 Far each dear al thein engagement, Consuliant will prepane a letter 10 the
City Clounail neporling mailers, dealing with internal contnol that meed the threshold of
being reparlat le candiiicros, as defined by pnollessional audiling slandands.
1.7 When applicable, the Clansullani will pnepare a management letterlhat will
pravide athen reccimmendations to the Ciiy ensuing ilram their neNiiew o-1 the Clil)l's
infernal aorrinol pracedunes. It is leiten will address non-nepor able conditions (those
constnuative aomments nal nequiried to be included in the nepcirtable conditions to (lit)l
Council or in the single audit report). Cansultant will discuss those commends wish 1he
Finance Dinea tan an I is designee prion to its linalizaticin.
1.8 Ccinsulta nt will keep Ciiy staff abi east cd all new develcipments affecting
local governmeni linance and nelevant aaaaunting issues, ClonSLiltant will advise and
assist City stafl in undenstandingl cif and irnplemenlaiicin cif new GAME
pnonoL incements.
11.9 Cansul-lant will be available to asp int with all er picifessicinal assistance
negluining reseanch and answen accoun-ling and reporting issues naised by the Cily.
Such assistance may include, bu-1 is not limi-led to tax mattens, review ofl I and
documenis, aosi allacaticin plans and empIglee benefit program:.
1.110 Consultant will penceive tl a scape of it ein woO as being advisons io the
Clity all l`ewpar Beaah negaiiding generally accepted acaaunting principle:, debt
issuances, and ather ma-Ilei s nelaIing tci the Clity.
White, Nelson, Diehl, Bvans LLR
Page A-2
30-18
'I.'I'I -1he Gill oil Newport geact CAM is aunren-lly prepared and nepnoduced by
Clity s-1aill. As an optional seRiice, the Consultant may be asked to pnepane tt e
govennment-wide linan cial staters ents and nea onciliations to tt ese statements in a
manner that is 'Icill�l compliant with all aUnrent CIAI9B pnonounaemenis.
'1.12 Consultant offens a wide nange ofl consulting services to govennmenlal
agencies. Linden the attestation slandands, the City may negUest a speciflic ll noaa dune
on study i1 wishes -lo have perfa nmed. Clonsultan-1 would then per onm chose ll nocedures
and nep or on Thein lindin gs. 9uch special services ane not part of Cons ultanl's standand
fee and would be subject lo a sepanate 11ee quotalian.
2. Auc icing 9tandanc s 110 be Followed
To meet the neq uiremenis al It is nequest flop proposals, the audit st all t e
perlonmed in aaaondance wish genenall)l acaepting audiling slandands including, but not
limited to, the following:
2.'I Genenally accepted auditing standands as set lbrlh by the Ameiiican
Inslitute oil Ceriillied Public Accountanis;
2.2 _1I1 e standaiids all plicable to °linancial audits conilained in the most cunneni
version oil the Generally Accepted Govennment Auditing 9tandands (Yellow Boo[),
issued by the Clompiiiollen Genenal of the L niied 1Itaies;
2.3 -11 a pnovisions of the Single Audit Act as amended in '1996;
2.4 11 e pnovts is ns oil L.3. Office of Management and Budget (OMEI) L n iflorm
Grant GuidanceA9upen Clircular Audits of Stale and Loaal Governments and Non.•Piiolit
Oiiganizations. Note: the City does not contempla-la using a aosi allocation plan for the
punpose changing indineat cos -19 to federal pnognams.
3. Reports to be Issuec
Following the comple-lion al the audit ofl the fliscal yean's 'linancial statements, the
Cons uliant shall issue d e following reports in accondance with audiling sianclarcls
outlined above in a flonm canllonming to aunrent generally accepted standands including
the curnent equivalent neporls on as amended by Standard setting auihoniiies:
3.11 An independa nt auditons' nepa r with an opinion on the 'Iain n mesa ntation ofl
the basic financial stalements, and an "in-relation-io" opinion on -It a combining and
individual non -major Hund financial statements, including t udgeiarYl aomp anison
schedules in con'lommit)l with auditing standards generally accepted in the L1ni-led Slates
oil Arserica and the standards applicable to finanalal audits contained in Generally
Accepled Governmental Auditing Standands issued by the Comptnollen oil tt e U niied
Eltates o-1 AImenica. Consultant will provide an eleatnonic cony of the independent
opin ion letier in RDF ilormat and one hand copy.
White, � elson, Diet I, E vans LLP Hage A•..3
30-19
3.2 Consultant will piepane tl. a single audit a port and nenden an a pinion on
IN sahedule oil expenditun( s of fledenal awands in nelation lo -Il a basic llinancial
statements Taken as a whole. The single aUdii neport should include an appropriate
sch( dule off ( xpenditunes of * denal awards, footnot( s, findings and questioned casts,
including any delicienaies identified during the audit and a lbllow up on Anion audit
findings, whene nequined. Consulta n1 will complete the data collection ibnm and n( quired
filing witf the Fed( nal Audit CITE aring H ouse and pnovide the City will one electronic
copy in RDF lonmat and live bound copies.
3.3 A neport on compliar ce and internal contnol oven financial nen or ing and a n
corn pliance and other ma,ltens based on an audill a 1 -Il a financial statements. It a neport
should L e addressed io the Clity Council and pnovided to the City in an electronic flonrn in
a F DF lonmat.
3.4 A nepor on complianae for each major pnoglnam and on inlennal contnol
oven aompliance. The report should be addressed to the Ci'ly Council and pnovided to
the City in an electronic fa nm in a H❑F lonmat.
3.4.1 In the r(quired nepars on compliance and inlennal aonlnols, it e
Coni ultarI shall communicate any delicienaies in inlennal conlnol found during the audit
to the Finance Clommililee and the City Council. A delliciency in intennal aontnol exists
wher the design on a penaJons a 1 a conlrol does no -1 allow management or employees,
in the nonmal counse of perlonming their assigned funclions, to pnevent, or defect and
cornecl, missialements on a timely basis. A matenial weakness is a defiaiency, on a
combination of delicier cies, in inlennal control s uch that thene is a reasonable possibility
Thal a material misstalement of the City's financial sllatemenls will not be nnevenled, on
detected and connected on a timely basis. A sign iflican-1 deficiency is a deficiency or a
combination oil de-liciencies, in inlennal contnol that is less severe Than a ma-lenial
weal' ness, ye'I impor ani to menit attention by -Those changed will governanae. Bilhen a 1
the above menlioned deficiencies shall be communicated in the nepor. .
3.4.2 ❑efficiencies of lessen signiflicance discovered by the Consultant
sl all be neported in a sepana-le Ieiten to management.
3.5 When applicable, l l e Consultant s l all issrie a sepanale "management
let -len" that includes necommenda-lions lion imp novements in internal control. Me
management letter should L e addressed to the Clity Clouncil. -The Clonsultanl will provide
one eleatnon is copy in PDF format and on( hand copy.
16 Ill a Consulilani will issue a sepanate ►etlen, Slatement on Audi'Jng
Standards ("EIA19") '122, °communicalion to Those changed with goverr ante at tl e
conalusion o-1 the aLidil," that include sign iflicant findings and other mail ens. This should
also be addressed to the Clity Council.
3.7 Clalilonnia Clonstitution, Ar icle XIIIB App mop nialions L imit pnoaedunes letten:
111 e Consultant will pnovide the (Ey an electronic aopy in PDF fonmal ar d one hard
copy.
White, IN elsor, , Diehl, avans LLP W� Hage A-4
30-20
4. O11hen Carriplliance Reparl s and Ague ec L pon Rrcicec ures
Occasionally, ii may be necassar) ion 11he Ci11y to contracil viith 11 a Clonsultan-1 Ion
addiflonal services and compliance nenor s. -Ihe City will solicill fee pnoposals -Isom
Consul -la nil as needed bL11 nes er�ie9 11 a nigl i to u-lilize other accoun-ling iinms if
necess � ry. .
5. Innegulariilies and Illegal Ac11s
Cla nsultan l shall be nequined -lo mE ke a n immecliaie, wni-1-len nepor oil � 11 inregula dillies
and illegal acts on indicalJons of illegal acils aIwhict They become awane io 'lhe following
par ies:
City Manager, David Al. h iff
City Aiilonney, Aanon C. F a np
Rinance Dineaton and Cli ly-Ineasunen, Dan Malusiewicz
6. Warking Rapen Releniliian and Access to Wanking Rapens
All wonkingl papens � nd neports mus11 be nelained, at 11he Consul-lanil's expense, ion a
minimum of three (3) yeans, unless Consullani's finm is noiiilied in wniiling by -11 e G)l of
J a need to e)itend the netention peniod. The Clonsullan-1 will 1 e requined to rn ake
wonking papeiis available, Ripon nequest, io the Clil)l on its designees.
Whila, Nelson, Diehl, Evans LLR Page A-5
30-21
EGF IB IT B
SCF E®UL 8 OF BIU U IIS C RATES
fro moire Than 901M, oil 11he iolal flee may be billed puion to pnesenialian o-1 final aLidil
nenor s ar d finanaial s-lalemen-19. Fees will be payable in (lull negaiidless ofl -lindings ilhal
nes till ilrom this engagemenil.
While, � elson, Diehl, avans L LF F age E -1
30-22
Fuca f Yea r
Opticr PeCuld
S4in111c
2(135-2136
2030-2037
2017-1018
1a19-201.9
3019-,Ia20
City a f Neviport 8racl -
F In ant [at Audit
37,930
$ 38,115
$ 39,370
40,559
41,365
City c f Neveipart Bcacl -
Single: Audit
6}100
6,190
9,790
0,999
],:105
5utiol.als
43,930
z4,E115
=19,1110
47,549
41,970
OMtiona l Se n is e:
Pre11ara1!on of Gv ernmdr t -
wide Fin aaalai ltale:menis
and re4aled Hacaneiiiatiaim.
1,990
2,090
:I,lla
7,179
1,140
Tatal ail-ir c hisirie
rna:ijrnun prise
'I 45,.900
'. 45,8115
$ 01,21(
49,710
5.1,211
fro moire Than 901M, oil 11he iolal flee may be billed puion to pnesenialian o-1 final aLidil
nenor s ar d finanaial s-lalemen-19. Fees will be payable in (lull negaiidless ofl -lindings ilhal
nes till ilrom this engagemenil.
While, � elson, Diehl, avans L LF F age E -1
30-22
H) F IBIT C
INSURAN C9 R9QUIREMENT9 — PROFESSIONAL 99RVIMS
'I. Flnovision ofl Insunance. Without limiting Consultant's indemnification of City, and
pniorr to commencement o-1 VI onk, Clons Ultant shall obtain, pnovide and maintain at
its own expense duning -Il a term o1 this AIglnea ment, policies of ins unance oil the
type and amounts described below and in a Iorm satisfactory) io Ciiy. Consultant
agnees to n rovide insurance in accondanae witl nequinemenls set flor h here. If
Clonsultant rises existing covenage -lo comply and ihat aoverage does not meet
these nequinemen-1s, Clonsultanl agnees to amend, supplement or endonse the
existing coverage.
2. Flaceplable Insuners. All insunance policies stall be issued by an insurance
company curnently authorized b)l the Insurance Clommissione n to tnansacl
business o-1 insunanae in the 9ta le o-1 Calilbrnia, wish an assiglned nolicyholdens'
Ratingl o-1 pl- (or higher) and Financial Size Category) Class 'v11 (on langen) in
accondance with the latesi edition ofl Rest's Key Ra-lingl Guide, unless otherwise
apn rove d k y the Ciiy's Risk N anagen.
3. Cloverage Reguii emen is.
A. Wonkens' Clompensation Insuranae. Consultant shall maintain Wonkens'
Compensation Insunance, s'laiutoq limits, and Emn loyen's Liability
Insurance with linits ofl at lea9t one million dollans ($1,00a,000) each
accident -Ion bodily injury) by accident and each employlee Ion bodily injury
b) I disease in accondan ce v+iith the laws ofl tI a State o1 Cla liflornia, 9a ction
3700 oil the I abon Code.
Consul -la nt shall submit to City, along with iI e cer ificate of insunance, a
Warren o1 Subroglation endonsement in favor o-1 Clity, its City Clouncil,
boards and aommission9, officers, agents, volunteers, employlees and any
penson on enti1)1 owning on othervruise in legal control of the pnoperty upon
whia h Clonsultanl q erfonms the Rraject and)lon 9eruices contemplated by
tI is Agneement.
0. Genenal I iability Insurance. Consultani 9I all maintain commencial general
liak ility insurance, and H nacessaryl urn brella liability insunance, with
coverage at least as k noad as pnovide d t y Insunance 9erviices Office Jorm
CG 00 01, in an amount not less than one million dollars ($1,000,000) ner
occurnenae, two million dollars ($2,000,000) general aggregate. The
policy sl all aavei liability anising Isom pnemises, oneiations, personal and
advertising injuryl, and Irak ility assumed under an insuned contnacl
(including tI e tori liability o-1 anothen assumed in a business coniract).
CI. Au'lomobile Liability Insurance. Consultant 9 hall maintain automobile
ins unance at least as broad as Insunance Services Oflice foi m CA 00 01
covering bodily injury and properly damage llor all activities oil Clonsultanl
anising out o-1 or in con neation with Wank to be performed under ihis
White, Nels a n, C iehl, 9van s LLFI_ Rage CIA
30-23
�Igi eemeni, including coveuage fou any owned, hired, non -owned a u nenled
vehiales, in an amount not less than one million dollars ($1,000,000)
combined single limit each accident.
CI. Flnofessional LiabilVy (anions 81 Omissions) Insurance. Consultant shall
maintain pnoilessional liability insunance Il ail covens the Services io be
periormed in connection with ilhis Agreement, in tI a minimum amount oil
one million dollars ($1,000,000) pen claim and ilwo million dolla ns
($2,000,000) in the ac giiegate. Piny policy inception date, continuiily date,
or neIroac-live dale mus -1 be before the Effective Oale ofl this Plgreemeni
and Consul-Iani agrees to maintain continua us coverage 'II roLigh a period
no less than II nee yeaus afteu comple-lion o1 -II a Services uequired by this
Algneemeni.
4. Othen Insurance Flequijemenis. Me policies are to contain, on I e endorsed to
conilain, I1he11ollov+iing pnovisions:
PI. Waiven oil rlubnogation. All insunance covenage maintained on procuiied
punsuani to this Agneemen-1 shall be endorsed io waive SLibiiogation
againsll City, its City Council, boards and commissions, offliceus, agents,
volunteers, ern ployees and any person on entity owning on o'lherwise in
legal control oil the properly upon which Consulilani performs the Pnojeci
and)lor 9ery ices contempla-led t y this Agneemeni on sI all sneciilically allow
Consultant on o'lhers providing insunance evidence in compliance with
these negluinements to waive (heir right of necover�I pnion -lo a lass.
Consultant henek y waives i-ls own night oil necoveny against (Fi y, and shall
negluiin" simHan wrilten express waivens from each of its subconsuliants.
E. Pkldi-lional Insuned 9taius. Pill liability policies inaludingl genenal liability,
excess liability, pollution liability, and au-lomobile liabililly, H uequined, bui
not including proflessional liability, shall puovide ou be endorsed to R novide
that Ci-ly, its Clity Council, boands and commissions, officers, agents,
volunteens, employees and any gersan on en-li-ly owning or olI erwise in
legal control cifl the properly upon which Consulilani performs the Pnojeci
and kir Services contempla-led t y this Plglneemeni sI all be included as
insuneds unden such q olicies.
CI. Flnimary and Non Cloniributory. PIII liabilily aoverage shall apply on a
primary basis and shall not negluine contribution flnom any insunance cin self-.
insunanae maintained t y City.
CI. N o -lice o-1 Cancellation. Pill policies shall provide City wilh -II irly (30)
calendan days notice ail aancellation (e)icepi flor nonpayment akin which .len
(10) calendars days natice is nequined) an nannenewal all aoverage ficin each
negluiued covenage.
5. Additional Agneements Between the Rarlies. The parties heneby agree to -II e
-lallawing:
Whiffle, N elson, Diel I, E dans LLIP Rage C-2
30-24
A. ®videnae oil Insurance. Consultant shall provide certificates of insunance
to Clity as evidence of the insurance covenage negUined henein, along with
a waiNieii oil subiiogation endonsement for worl, ejis' aomnensation and oihen
endorsements as specilied herein for each covenage. InSLInance
certificates and endonsemenl rnust be appnoved by Clity's Risk Manage n
prion to aomrnenaement of perfoumanae. Clunrent certification of insunance
shall be N epi on file with Clity at all times (luring the lenm of this
AIglneement. Cliiy neserues the night to nequire complete, aer ified copies oil
all required insurance policies, at any lime.
H. Clity's Flight to Revise Requirements. Clit)l reserves the right at anal time
duning -I[ a tenm of the Agreement to changEi the am ounis and types of
insunance requined by giving Clons ultant sixty (60) calendan days advance
wnitten notice oil such change. Ifl such change nesul'ls in substantial
additional cosi to Clonsultant, City and Consultant may reneglotiate
ConSUltant's compensation.
C. ®n_florcement of _Agneement Pnovisions. Consultant acknowledges and
agrees tha'l any actual or alleged -la iluue on the part o-1 (lily to inform
Consultant oil non -corn pliance wit[ any uequiremeint imposes no additional
obligations on Clity non does it waives any nights t ereundeui.
D. Aequiremeni: not Limiting. RequiiemEints oil speaifia coveuage lealures
on lirnits contained in this Section are not intended as a limitation on
covenage, limits an othem nequiuemenis, or a waiven a1 any coverage
normally pnovided t y any insurance. Specifia ne'lenEince to a given
aovenage fleaiune is fou purposes of clarifiaaiion only as it per ains to a
glivEin issue and is not intended by anal party or insured to t ei all inclusive,
or -lo the exclusion o'l othEir covenagle, on a wa ivei o1 any typC. li the
Clonsultant maintains higher limits 'It an the minimums shown above, the
Clity uequires and shall be einti-lled to coveragEi for higt eu limits maintained
by the Consultanl. Any available ins ui a nce pnoa Beds in excess oil the
speci-lied minimum limits of insunance and coverage shall be available to
the (l[I)I.
B. 9E1f-inSLVed REilentions . Anil selil insured nelent ion s must t ei declared to
and an proved by City. City reserves the right to require that selUn,uiEld
nEllentions t e eiliminated, lovieuied, or replaced by a dEiductible. Sel-l-
in surance will no -1 be a onsideued to comply wit[ these nequinements unless
a pproved by (lit)l.
R. Clity Remedies ion hon.-Clompliance. If Consultanl on any subconsuliant
fails 'lo pnovide and maintain insunana a as requined henein, then Clity shall
[ ave the iiight t ui not the obligation, to pLinchase s uch insunance , -lo
lenmina'lei this AgiEiemeni, on to suspend Consultant's right -lo proceEul until
n noper evidence of ins t.inancEi is provided. Anil amounts paid by Clity shall,
at Ci-ly's sole option, be deducled flnom amounts payable to Consultanl on
neimburs ed k y Cons ultant upon demand.
W[ ite, h els on, Diehl, ®vans LLFI Page C-3
30-25
CL Timely hoiice ofl_Claims. Contnaclon stall give Clity puompt and timel)l
notice of alaims made on suits it stituted that arise out ofl oii result -Irom
Contuactor's perlonmance Linden this Contnact, and that involve or mail
inva Ive aovenage unden any ofl J a requitied liabili-ly policies. Cily assLimes
no obligation on liability It y suah notice, but has the right (but not 11 f• e duty)
to mor itoii -Ile handling al any such claim on claims if they ane likely to
involve City.
F . Consultant's Insunanae. Clonsultanl shall also puocure ar d "ainlain, at its
own cost and exper se, any additional kinds oil insurance, which in its own
judgment may be necessa ry ion Hs fl nopen pnoiection and prosecution of
tl e Wonk.
White, Nelson, Cliehl, 8vans LA
Page C -z
30-26