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CC - Item 5D - Professional Services Agreement with Lance, Soll & Lunghard, LLP for Auditing ServicesROSEMEAD CITY COUNCIL STAFF REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: GLORIA MOLLEDA, CITY MANAGER .6. 0 . DATE: MAY 30, 2018 SUBJECT: PROFESSIONAL SERVICES AGREEMENT WITH LANCE, SOLL & LUNGHARD, LLP FOR AUDITING SERVICES SUMMARY A competitive bid process was conducted to find a certified public accounting (CPA) firm for professional auditing services. The City received six (6) qualified companies' that submitted proposals. Through an analysis of the proposals, a firm has been selected for recommendation to the City Council. The City's current auditors, Rogers, Anderson, Malody & Scott, LLP (RAMS), have provided auditing services for the past 7 years. Their contract was renewed two times, not only because of their excellent service, but also a result of the retirement of the Finance Director last year, which made continuity of auditing staff an important consideration in maintaining the City's financial stability and integrity. However, at this point, while best practices dictate that multi -audit year audit service agreements are appropriate in order to minimize disruption, periodic auditor rotation is also important in order to maintain the auditor's independence and objectivity. On April 12, 2018 staff sent RFPs to specialized CPA firms and also posted the RFP on the City's website. Subsequently, staff received seven submitted proposals, of which one was disqualified for late submission. Of the six qualified companies, the City selected four to interview. The interview panel consisted of Pearl Lieu, Finance Director, Ericka Hernandez, City Clerk, and Lily T. Valenzuela, City Planner. The panel considered factors such as the firm's technical support, size and structure, anticipated support requirements of City's staff, overall experience of firm, audit team's experience, planned audit hours and understanding of the engagement, availability of client -education programs, and overall fit of the firm for Rosemead's needs. As a result of this process, staff has selected the firm of Lance, Soll & Lunghard, LLP (LSL) as representing the best combination of qualifications, experience, credentials, City compatibility, and price. ITEM NO. 5.1) City Council Meeting May 30, 2018 Page 2 of 3 Pursuant to the City's purchasing policy, professional services providers should not be selected by bid price alone, and they were not. However, for comparison purposes the following illustrates prices bid by the various firms over the three-year term of the agreement: 1. Vasquez & Company, LLP $151,455 2. Rogers, Anderson, Malody & Scott, LLP 142,650 3. The Pun Group, LLC 139,279 4. White, Nelson, Diehl, Evans, LLP 135,620 5. Lance, Soll & Lunghard, LLP 128,610 6. Moss, Levy & Hartzheim, LLP 119,301 Staff selected LSL based on their qualification; however, staff requested LSL to lower the price for the Successor Agency's cost as staff felt the cost was too high. LSL agreed to reduce the cost by $3,390, for a new total not -to -exceed cost of $125,220. LSL's proposed fees is still 5% more than the lowest bidder, but 12% less than the current firm, which still provides a savings of $17,430 over three years. STAFF RECOMMENDATION Staff recommends that the City Council: 1. Approve the firm of Lance, Soll & Lunghard, LLP as the new City auditor; 2. Approve the attached three-year contract with two additional one-year extensions; and 3. Authorize the City Manager to sign the contract. FISCAL IMPACT The proposed contract is for three years, with a cost of $41,740 for fiscal years 2018 through 2020, for a total not -to -exceed cost of $125,220. The contract includes optional extensions for two more years, with a 2% increase each year. Sufficient funds are budgeted every year for this service. STRATEGIC PLAN IMPACT To achieve Strategy 5 Action A to improve transparency and communication with the public regarding continuous monitoring and internal controls of City finances. PUBLIC NOTICE PROCESS This item has been noticed through the regular agenda notification process. Prepared by: Pearl Lieu, Finance Director City Council Meeting May 30, 2018 Page 3 of 3 Attachment A: Professional Services Agreement with Lance, Soll & Lunghard, LLP for Auditing Services Attachment B: Insurance Certificates Attachment A Professional Services Agreement with Lance, Soll & Lunghard, LLP for Auditing Services Attachment A CITY OF ROSEMEAD PROFESSIONAL SERVICES AGREEMENT 1. PARTIES AND DATE. This Agreement is made and entered into this _ day of June, 2018 by and between the City of Rosemead, a municipal organization organized under the laws of the State of California with its principal place of business at 8838 E. Valley Blvd., Rosemead, California 91770 ("City') and Lance, Sol] & Lunghard, certified public accountants with its principal place of business at 203 N. Brea Blvd., Suite 203 Brea, CA 92821 ("AUDITOR"). City and AUDITOR are sometimes individually referred to herein as 'Party" and collectively as 'Parties." 2. RECITALS. 2.1 AUDITOR. AUDITOR desires to perform and assume responsibility for the provision of certain professional services required by the City on the terms and conditions set forth in this Agreement. AUDITOR represents that it is competent and qualified certified public accountant, duly authorized to practice and licensed as such by the California State Board of Accountancy. 2.2 Project. City desires to engage AUDITOR to render auditing services ('Project') as set forth in this Agreement. 3. TERMS, 3.1 Scope of Services and Term. 3.1.1 General Scope of Services. AUDITOR promises and agrees to furnish to the City all labor; materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional auditing services necessary for the Project ("Services"), The Services are more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations. 3.1.2 Term. The term of this Agreement shall be for a period of three (3) consecutive years, beginning with the fiscal year ending June 30, 2018 with the option to extend for two subsequent years. AUDITOR shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines, A-1 3.2 Responsibilities of AUDITOR. 3.2.1 Control and Payment of Subordinates; Independent Contractor. The Services shall be performed by AUDITOR or under its supervision. AUDITOR will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. City retains AUDITOR on an independent contractor basis and not as an employee. AUDITOR retains the right to perform similar or different services for others during the term of this Agreement. Any additional personnel performing the Services under this Agreement on behalf of AUDITOR shall also not be employees of City and shall at all times be under AUDITOR's exclusive direction and control. AUDITOR shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. AUDITOR shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance. 3.2.2 Schedule of Services. AUDITOR shall perform the Services expeditiously, within the term of this Agreement, and in accordance with the Schedule of Services set forth in Exhibit "B" attached hereto and incorporated herein by reference. AUDITOR represents that it has the professional and technical personnel required to perform the Services in conformance with such conditions. In order to facilitate AUDITOR's conformance with the Schedule, City shall respond to AUDITOR's submittals in a timely manner. Upon request of City, AUDITOR shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services. 3.2.3 Conformance to Applicable Requirements. All work prepared by AUDITOR shall be subject to the approval of City. 3.2.4 Substitution of Key Personnel. AUDITOR has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, AUDITOR may substitute other personnel of at least equal competence upon written approval of City. In the event that City and AUDITOR cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. As discussed below, any personnel who fail or refuse to perform the Services in a manner acceptable to the City, or who are determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property, shall be promptly removed from the Project by the AUDITOR at the request of the City. The key personnel for performance of this Agreement are as follows: Bryan S. Gruber. 3.2.5 City's Representative. The City hereby designates the Finance Director, or his or her designee, to act as its representative for the performance of this Agreement ("City's Representative"). City's Representative shall have the power to act on behalf of the City for all purposes under this Contract. AUDITOR shall not accept direction or orders from any person other than the City's Representative or his or her designee. r_WA 3.2.6 AUDITOR's Representative. AUDITOR hereby designates Bryan S. Gruber, or his designee, to act as its representative for the performance of this Agreement ("AUDITOR's Representative"). AUDITOR's Representative shall have full authority to represent and act on behalf of the AUDITOR for all purposes under this Agreement. The AUDITOR's Representative shall supervise and direct the Services, using his/her best skill and attention, and shall be responsible for all means, methods, techniques, sequences and procedures and for the satisfactory coordination of all portions of the Services under this Agreement. 3.2.7 Coordination of Services. AUDITOR agrees to work closely with City staff in the performance of Services and shall be available to City's staff, AUDITORs and other staff at all reasonable times. 3.2.8 Standard of Care; Performance of Employees. AUDITOR shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. AUDITOR represents and maintains that it is skilled in the professional calling necessary to perform the Services. AUDITOR warrants that all employees and subcontractors shall have sufficient skill and experience to perform the Services assigned to them. Finally, AUDITOR represents that it, its employees and subcontractors have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, including a City Business License, and that such licenses and approvals shall be maintained throughout the term of this Agreement. As provided for in the indemnification provisions of this Agreement, AUDITOR shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the AUDITOR's failure to comply with the standard of care provided for herein. Any employee of the AUDITOR or its sub-AUDITORs who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Project by the AUDITOR and shall not be re-employed to perform any of the Services or to work on the Project. 3.2.9 Laws and Regulations. AUDITOR shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services, including all Cal/OSHA requirements, and shall give all notices required by law. AUDITOR shall be liable for all violations of such laws and regulations in connection with Services. If the AUDITOR performs any work knowing it to be contrary to such laws, rules and regulations and without giving written notice to the City, AUDITOR shall be solely responsible for all costs arising therefrom. AUDITOR shall defend, indemnify and hold City, its officials, directors, officers, employees and agents free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations. 3.2.10 Insurance. A-3 3.2.10.1 Time for Compliance. AUDITOR shall maintain,prior to the beginning of and for the direction of this Agreement insurance coverage as specified in Exhibit D attached to and part of this agreement. 3.2.11 Safety. AUDITOR shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the AUDITOR shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. Safety precautions as applicable shall include, but shall not be limited to: (A) adequate life protection and life saving equipment and procedures; (B) instructions in accident prevention for all employees and subcontractors, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully required to prevent accidents or injuries; and (C) adequate facilities for the proper inspection and maintenance of all safety measures. 3.3 Fees and Payments. 3.3.1 Compensation. AUDITOR shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit C attached hereto and incorporated herein by reference. The total compensation shall not exceed $41,740 per each fiscal year ending June 30, 2018, 2019, and 2020. The total compensation shall not exceed $42,580 and $43,430 for the optional fiscal years ending June 30, 2021 and 2022, respectively. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement. 3.3.2 Payment of Compensation. AUDITOR shall submit to City statement which indicates work completed by AUDITOR. Payment to AUDITOR shall be made thirty (30) days after receipt by CITY of invoices from AUDITOR, which shall be rendered not more often than monthly. Special examinations, surveys, or detailed reports of any nature outside the scope of this Agreement shall be billed separately by AUDIOTR and must be specifically authorized in writing by CITY in advance of such assitional services proposed to be provided. 3.3.3 Reimbursement for Expenses, AUDITOR shall not be reimbursed for any expenses unless authorized in writing by City. 3.3.4 Extra Work. At any time during the term of this Agreement, City may request that AUDITOR perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the parties did not reasonably anticipate would be necessary at the execution of this Agreement. AUDITOR shall not perform, nor be compensated for, Extra Work without written authorization from City's Representative. 3.3.5 Prevailing Wages. AUDITOR is aware of the requirements of California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 1600, et seq., ("Prevailing Wage Laws"), which require the M payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects. If the Services are being performed as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, AUDITOR agrees to fully comply with such Prevailing Wage Laws. City shall provide AUDITOR with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. AUDITOR shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request, and shall post copies at the AUDITOR's principal place of business and at the project site. AUDITOR shall defend, indemnify and hold the City, its elected officials, officers, employees and agents free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. 3.4 Accounting Records. 3.4.1 Maintenance and Inspection. AUDITOR shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. AUDITOR shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. AUDITOR 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 under this Agreement. 3.5 General Provisions. 3.5.1 Termination of Agreement. 3.5.1.1 Grounds for Termination. City may, by written notice to AUDITOR, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to AUDITOR of such termination, and specifying the effective date thereof, at seven (7) calender days before the effective date of such termination. Upon termination, AUDITOR shall be compensated for all direct service hours on work -in -progress for those services which have been adequately rendered to City; however, in no event shall the City be obligated to pay more than the total amount of the Contract. AUDITOR may not terminate this Agreement except for cause. 3.5.1.2 Effect of Termination. If this Agreement is terminated as provided herein, City may require AUDITOR to provide all finished or unfinished Documents and Data and other information of any kind prepared by AUDITOR in connection with the performance of Services under this Agreement. AUDITOR shall be required to provide such document and other information within fifteen (15) days of the request. 3.5.1.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. 3.5.2 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: AUDITOR: Lance, Soll & Lunhard, LLP 203 N. Brea Blvd., Suite 203 Brea, CA 92821 Attn: Bryan S. Gruber MCA City of Rosemead 8838 E. Valley Boulevard Rosemead, CA 91770 Attn: Pearl Lieu Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. 3.5.3 Ownership of Materials and Confidentiality. 3.5.3.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by AUDITOR under this Agreement ("Documents & Data"). AUDITOR shall require all subcontractors to agree in writing that City is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. AUDITOR represents and warrants that AUDITOR has the legal right to license any and all Documents & Data. AUDITOR makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than AUDITOR or provided to AUDITOR by the City. City shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City's sole risk. AUDITOR's audit workpapers are proprietary in nature and not the ownership of the City. 3.5.3.2 Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents and Data either created by or provided to AUDITOR in connection with the performance of this Agreement shall be held confidential by AUDITOR. Such materials shall not, without the prior written consent of City, be used um by AUDITOR for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to AUDITOR which is otherwise known to AUDITOR or is generally known, or has become known, to the related industry shall be deemed confidential. AUDITOR shall not use City's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City. 3.5.4 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. 3.5.5 Attorney's Fees. If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney's fees and all other costs of such action. 3.5.6 Indemnification. AUDITOR shall defend, indemnify and hold the City, its officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions or willful misconduct of AUDITOR, its officials, officers, employees, agents, AUDITORs and contractors arising out of or in connection with the performance of the Services, the Project or this Agreement, including without limitation the payment of all consequential damages and attorneys fees and other related costs and expenses. AUDITOR shall defend, at AUDITOR's own cost, expense and risk, any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against City, its directors, officials, officers, employees, agents or volunteers. AUDITOR shall pay and satisfy any judgment, award or decree that may be rendered against City or its directors, officials, officers, employees, agents or volunteers, in any such suit, action or other legal proceeding. AUDITOR shall reimburse City and its directors, officials, officers, employees, agents and/or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. AUDITOR's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the City, its directors, officials officers, employees, agents or volunteers 3.5.7 Entire Agreement. This Agreement contains the entire Agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both parties. 3.5.8 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in Los Angeles County. 3.5.9 Time of Essence. Time is of the essence for each and every provision of this Agreement. 3.5.10 City's Right to Employ Other AUDITORs. City reserves right to employ other AUDITORs in connection with this Project. 3.5.11 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the parties. 3.5.12 Assignment or Transfer. AUDITOR shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the City. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. 3.5.13 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to AUDITOR include all personnel, employees, agents, and subcontractors of AUDITOR, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. 3.5.14 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. 3.5.15 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise. 3.5.16 No Third Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties. 3.5.17 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. 3.5.18 Prohibited Interests. AUDITOR maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for AUDITOR, to solicit or secure this Agreement. Further, AUDITOR warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for AUDITOR, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. AUDITOR further agrees to file, or shall cause its employees or subAUDITORs to file, a Statement of Economic Interest with the City's Filing Officer as required under state law in the performance of the Services. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. 3.5.19 Equal Opportunity Employment, AUDITOR represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. AUDITOR shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. 3.5.20 Labor Certification. By its signature hereunder, AUDITOR certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. 3.5.21 Authority to Enter Agreement. AUDITOR has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. 3.5.22 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original. 3.6 Subcontracting. 3.6.1 Prior Approval Required. AUDITOR shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. [signatures on next page] CITY OF ROSEMEAD LANCE, SOLL & LUNGHARD, LLP Gloria Molleda, City Manager Attest: Ericka Hernandez City Clerk Approved as to Form: Rachel Richman City Attorney A-10 By: T:X—, Name: Bryan S. Gruber Title: Partner IWA:11-31167 SCOPE OF SERVICES A. AUDITOR shall perform an audit of all funds of the City, in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, issued by the Comptroller of the United States, and express an opinion on the fair presentation of the basic financial statements. LSL will assist in the preparation of the Comprehensive Annual Financial Report (CAFR). B. AUDITOR will prepare a report on the internal control structure based on the understanding of the control structure and assessment of control risk. C. AUDITOR will perform agreed-upon procedures related to the annual review of the City's appropriation limit calculations in accordance with Article XIII -13 of the California Constitution and issue a report thereon. D. AUDITOR will prepare a management letter, including appropriate recommendations regarding the City's systems of internal control, accounting procedures, and other significant observations. E. AUDITOR will perform a Single Audit in accordance with the Federal Uniform Guidance during those years when one is required. F. AUDITOR will prepare the annual State Controller Office Financial Transactions Report for the City. G. AUDITOR will assist in the preparation of the Rosemead Housing Corporation financial statement and Form 990, Return of Organization Exempt from Income Tax. A-11 57.il"Ii"[7i -- SCHEDULE OF SERVICES ® Complete Interim Audit Field work O Year-end Fieldwork First Drafts of all Audit Reports ® MD&A and Transmittal Letters ® Final Drafts of all Audit Reports ® Final Reports issued Completed by July 13 Completed by September 30 Sent by November 2 Sent by November 16 Completed by November 30 Completed by December 14 EXHIBIT C COMPENSATION ^ Price assumes one major program. $1,500 per additional major program tested OUT-OF-POCKET EXPENSES INCLUDED IN THE TOTAL ALL-INCLUSIVE MAXIMUM PRICE The total albinclude maximum price bid contains all direct and indirect costs including all out-of-pocket expenses for firm personnel (e.g., travel, lodging and meals, clerical, etc) SCHEDULE OF HOURLY CHARGES Should the City require additional services above and beyond the scope of this proposal, the hourly rates Lance, Sol[, 8 Lunghard LLP utilize will be based on the foliomrig: Panner S 204 /hour Manager S 146 /hour Senior $ 112 /hour Staff $ 87 /hour C-1 Optional Years Service 2017.18 2018.19 2019.20 2020.21 2021-22 City of Rosemead $ 28,790 S 28,790 S 28,790 $ 29,370 $ 29,960 Successor Agency S 4,010 S 4,010 $ 4,010 $ 4,090 $ 4,170 Housing Corp $ 3,330 $ 3,330 $ 3,330 $ 3,400 $ 3,470 Single Audit Report— $ 3,160 S 3,160 $ 3,160 $ 3,220 S 3,280 State Controller's Report $ 2,450 $ 2,450 S 2,450 $ 2,500 $ 2,550 Total All -Inclusive Maximum Price $ 41,740 $ 41,740 S 41,740 $ 42.580 S 43,430 ^ Price assumes one major program. $1,500 per additional major program tested OUT-OF-POCKET EXPENSES INCLUDED IN THE TOTAL ALL-INCLUSIVE MAXIMUM PRICE The total albinclude maximum price bid contains all direct and indirect costs including all out-of-pocket expenses for firm personnel (e.g., travel, lodging and meals, clerical, etc) SCHEDULE OF HOURLY CHARGES Should the City require additional services above and beyond the scope of this proposal, the hourly rates Lance, Sol[, 8 Lunghard LLP utilize will be based on the foliomrig: Panner S 204 /hour Manager S 146 /hour Senior $ 112 /hour Staff $ 87 /hour C-1 EXHIBIT D INSURANCE REQUIREMENTS Commercial General Liability Insurance using Insurance Services Office "Commercial General Liability" policy form CG 00 01 or the exact equivalent. Defense costs must be paid in addition to limits. There shall be no cross liability exclusion for claims or suits by one insured against another. Limits are subject to review but in no event less than $1,000,000 per occurrence. Business Auto Coverage on ISO Business Auto Coverage form CA 00 01 including symbol 1 (Any Auto) or the exact equivalent. Limits are subject to review, but in no event to be less that $1,000,000 per accident. If AUDITOR owns no vehicles, this requirement may be satisfied by a non -owned auto endorsement to the general liability policy described above. If AUDITOR or AUDITOR's employees will use personal autos in any way on this project, AUDITOR shall provide evidence of personal auto liability coverage for each such person. Workers Compensation on a state -approved policy form providing statutory benefits as required by law with employer's liability limits no less than $1,000,000 per accident or disease. Professional Liability or Errors and Omissions Insurance as appropriate shall be written on a policy form coverage specifically designed to protect against acts, errors or omissions of the AUDITOR and "Covered Professional Services" as designated in the policy must specifically include work performed under this agreement. The policy limit shall be no less than $1,000,000 per claim and in the aggregate. The policy must "pay on behalf of" the insured and must include a provision establishing the insurer's duty to defend. The policy retroactive date shall be on or before the effective date of this agreement. General conditions pertaining to provision of insurance coverage by AUDITOR. AUDITOR and City agree to the following with respect to insurance provided by AUDITOR: 1. AUDITOR agrees to have its insurer endorse the third party general liability coverage required herein to include as additional insureds City, its officials, employees and agents, using standard ISO endorsement No. CG 2010 with an edition prior to 1992. AUDITOR also agrees to require all contractors, and subcontractors to do likewise. 2. No liability insurance coverage provided to comply with this Agreement shall prohibit AUDITOR, or AUDITOR's employees, or agents, from waiving the right of subrogation prior to a loss. AUDITOR agrees to waive subrogation rights against City regardless of the applicability of any insurance proceeds, and to require all contractors and subcontractors to do likewise. D-1 3. All insurance coverage and limits provided by Contractor and available or applicable to this agreement are intended to apply to the full extent of the policies. Nothing contained in this Agreement or any other agreement relating to the City or its operations limits the application of such insurance coverage. 4. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to City and approved of in writing. 5. No liability policy shall contain any provision or definition that would serve to eliminate so-called "third party action over' claims, including any exclusion for bodily injury to an employee of the insured or of any contractor or subcontractor. 6. All coverage types and limits required are subject to approval, modification and additional requirements by the City, as the need arises. AUDITOR shall not make any reductions in scope of coverage (e.g. elimination of contractual liability or reduction of discovery period) that may affect City's protection without City's prior written consent. 7. Proof of compliance with these insurance requirements, consisting of certificates of insurance evidencing all of the coverages required and an additional insured endorsement to AUDITOR's general liability policy, shall be delivered to City at or prior to the execution of this Agreement. In the event such proof of any insurance is not delivered as required, or in the event such insurance is canceled at any time and no replacement coverage is provided, City has the right, but not the duty, to obtain any insurance it deems necessary to protect its interests under this or any other agreement and to pay the premium. Any premium so paid by City shall be charged to and promptly paid by AUDITOR or deducted from sums due AUDITOR, at City option. 8. Certificate(s) - Deleted 9. It is acknowledged by the parties of this agreement that all insurance coverage required to be provided by AUDITOR or any subcontractor, is intended to apply first and on a primary, noncontributing basis in relation to any other insurance or self insurance available to City. 10.AUDITOR agrees to ensure that subcontractors, and any other party involved with the project who is brought onto or involved in the project by AUDITOR, provide the same minimum insurance coverage required of AUDITOR. AUDITOR agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. AUDITOR agrees that upon request, all agreements with subcontractors and others engaged in the project will be submitted to City for review. 111. AUDITOR agrees not to self -insure or to use any self-insured retentions or deductibles on any portion of the insurance required herein and further agrees EVA that it will not allow any contractor, subcontractor, Architect, Engineer or other entity or person in any way involved in the performance of work on the project contemplated by this agreement to self -insure its obligations to City. If AUDITOR's existing coverage includes a deductible or self-insured retention, the deductible or self-insured retention must be declared to the City. At that time the City shall review options with the AUDITOR, which may include reduction or elimination of the deductible or selfinsured retention, substitution of other coverage, or other solutions. 12. The City reserves the right at any time during the term of the contract to change the amounts and types of insurance required by giving the AUDITOR ninety (90) days advance written notice of such change. If such change results in substantial additional cost to the AUDITOR, the City will negotiate additional compensation proportional to the increased benefit to City. 13. For purposes of applying insurance coverage only, this Agreement will be deemed to have been executed immediately upon any party hereto taking any steps that can be deemed to be in furtherance of or towards performance of this Agreement. 14.AUDITOR acknowledges and agrees that any actual or alleged failure on the part of City to inform AUDITOR of non-compliance with any insurance requirement in no way imposes any additional obligations on City nor does it waive any rights hereunder in this or any other regard. 15. AUDITOR will renew the required coverage annually as long as City, or its employees or agents face an exposure from operations of any type pursuant to this agreement. This obligation applies whether or not the agreement is canceled or terminated for any reason. Termination of this obligation is not effective until City executes a written statement to that effect. 16. AUDITOR shall provide proof that policies of insurance required herein expiring during the term of this Agreement have been renewed or replaced with other policies providing at least the same coverage. Proof that such coverage has been ordered shall be submitted prior to expiration. A coverage binder or letter from AUDITOR's insurance agent to this effect is acceptable. A certificate of insurance and/or additional insured endorsement as required in these specifications applicable to the renewing or new coverage must be provided to City within five days of the expiration of the coverages. 17. The provisions of any workers' compensation or similar act will not limit the obligations of AUDITOR under this agreement. AUDITOR expressly agrees not to use any statutory immunity defenses under such laws with respect to City, its employees, officials and agents. D-3 18. Requirements of specific coverage features or limits contained in this section are not intended as limitations on coverage, limits or other requirements nor as a waiver of any coverage normally provided by any given policy. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue, and is not intended by any party or insured to be limiting or all- inclusive. 19.These insurance requirements are intended to be separate and distinct from any other provision in this agreement and are intended by the parties here to be interpreted as such. 20. The requirements in this Section supersede all other sections and provisions of this Agreement to the extent that any other section or provision conflicts with or impairs the provisions of this Section. 21. AUDITOR agrees to be responsible for ensuring that no contract used by any party involved in any way with the project reserves the right to charge City or AUDITOR for the cost of additional insurance coverage required by this agreement. Any such provisions are to be deleted with reference to City. It is not the intent of City to reimburse any third party for the cost of complying with these requirements. There shall be no recourse against City for payment of premiums or other amounts with respect thereto. AUDITOR agrees to provide immediate notice to City of any claim or loss against AUDITOR arising out of the work performed under this agreement. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City. W Attachment B Insurance Certificates Attachment B (1) LANCSO1 OP ID: JT CERTIFICATE OF LIABILITY INSURANCE D 0 612 212 0 1 8'V) 05/22/2018 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(les) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement A statement on this certificate does not confer rights to the certificate holder in lieu of such endomement(s). PRODUCER Mitchell&Mitchell-Lic0620650 250 Bel Marin Keys Blvd, Bid E Novato, CA 94949 CONTACT Jose Tapia NAME: P PHONE 415-683-2525 FAX No: 415-883-7752 ac No , nooalesS: JTapia MitchellAndMitchell.com INSURER(S)AFFORDING COVERAGE NAIC# Gustavo Ruano INSURER A: Sentinel Insurance Company 11000 INSURED Lance, Soil & Lunghard, LLP INSURER a: Continental Casualty Company INSURER C: 203 N Brea Blvd Ste 203 Brea, CA 92821-4056 INSURER D INSURERE: X INSURER F: 57SBABI6404 COVERAGES CERTIFICATE NUMBER: REVISION NuN iEK: THIS IS TO CERTIFY THAT 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 CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR rypE OF INSURANCE ADDLS D B POLICY NUMBER MMI�OYIYYVY MMIOOIYEVYY LIMITS A X COMMERCIAL GENERAL LIABILITY AUTHORIZED REPRESENTATIVE 8838E Valley Blvd Rosemead, CA 91770 EACH OCCURRENCE $ 2,000,000 DAMA ELATED 1,000,000 PREMISES Ea occurrence $ CLAIMS -MADE OCCUR X X 57SBABI6404 10/12/2017 10/12/2018 MED EXP (Any one person) $ 10,00 PERSONAL &ADV INJURY $ 2,000,00 GENL AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ 4,000,00 PRODUCTS-COMP/OP AGG $ 4,000,00 X POLICY ❑ JECT PRO- [:]LOC OTHER: AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT Ea accident $ 2,000,00 BODILY INJURY (Per person) $ AANY AUTO 67SBABI6404 10/12/2017 10/12/2018 BODILY INJURY (Per accident) $ ALL OWNED SCHEDULED AUTOHIRED AUTOS AWNED X XUTOS PROPERTY DAMAGE $ Per accident $ X UMBRELLA LIAB X OCCUR EACH OCCURRENCE. $ 1,000,000 AGGREGATE $ 1,000,000 A EXCESS LIAB CLAIMS -MADE 57SBAB16404 10/12/2017 10/12/2018 DED I X RETENTION$ 10000 $ 1 WORKERS COMPENSATION AND EMPLOYERS' LIABILITY YIN ANY PROPRIETORIPARTNERIEXECUTIVE PERSTATUTE EOR H E.L. EACH ACCIDENT $ E.L. DISEASE -EA EMPLOYEE $ OFFICER/MEMBER EXCLUDED? ❑ (Mandatory in NH) NIA E.L. DISEASE - POLICY LIMIT $ If yes, describe under DESCRIPTION OFOPERATIONS below B PROFESSIONAL PL 275513554 10/12/2017 10112/2018 PER CLAIM 3,000,00 LIABILITY (E&0) AGGREGATE 3,000,000 DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) Re: Operations of the Named Insured as on File with the Insurance Carrier. City of Rosemead, Its Directors, Officials, Officers, Emplo ees, Agents and Volunteers are Additional Insureds regarding General Liability Coverage. Coverage is Primary & Non -Contributory and Waiver of Subrogation Apllies per Form SS00080405 and per Terms of Written Contract with the Named Insured. CERTIFICATE HOLDER CANCELLATION INSURED SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. City Of Rosemead c/o Pearl Lieu AUTHORIZED REPRESENTATIVE 8838E Valley Blvd Rosemead, CA 91770 (S) 1988-2014 AGOKV GUKYUKA I HUN. All rlgnrs ACORD 25 (2014/01) The ACORD name and logo are registered marks of ACORD Attachment B (2) ACORV DATE(W/DD/YYYY) CERTIFICATE OF LIABILITY INSURANCE os/zz/zo1I THIS CERTIFICATE IS ISSUED ASA MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOTAFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the pollcy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions ofthe policy, certain policies may require an endorsement. Astatement on this certificate does not confer rights to the certificate holder in Ileu of such endorsement(s). PRODUCER CONTACT Chuck Hyneman 18371-A Lemon Drive Yorba Linda, CA 92886 NAME: Chuck Hyneman (A/C, NO, NO, EXT): 714-777-9823 (A/C, NO): 714-777-9898 E-MAIL ADDRESS: INSURER(S) AFFORDING COVERAGE NAIL# INSURED Richard Kikuchi (Gen Partner) Soil, Lance (Gen Partner) 203 N Brea Blvd#203 Brea, CA 92821 INSURERA: Truck Insurance Exchange 1 21709 INSURER B: -" INSURERC' INSURER D: INBURER E: INSURER F: COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THATTHE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAME ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OFANY CONTRACT OR OTHER DOCUMENT WITH RESPECTTO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCEAFFORDED BYTHE POLICIES DESCRIBED HEREIN IS SUBJECT TOALLTHETERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES, LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPEOFINSURANCE ADDTL INSD SUBR MD POLICYNUMBER POLICYEFF (MM/DD/YYYY) POLICYEXP (MM/DD/YYYY) LIMITS COM MERCIALGENERALLIABILITY CLAIMS -MADE ❑ OCCUR y EACHOCCURRENCE $ DAMAGETORENTED $ PREMISES (Ea Occurrence) MED EXP(Anyone person) $ PERSONAL&ADV INJURY $ GENT AGGREGATE LIMIT APPLI ES PER: POLICY ❑ PROJECT ❑ LOC OTHER: GENERAL AGGREGATE $ PRODUCTS-COMP/OPAGG $ $ AUTOMOBILE LIABILITY ANY AUTO OWNEDAUTOS SCHEDULED ONLY AUTOS HIREDAUTOS NON -OWNED ONLY AUTOSONLY COMBINED SINGLE LIMIT $ (Ea accident) BODILY INJURY (Per person) $ BODILY INJURY (Per accident)$ PROPERTY DAMAGE $ (Peracaldent) UMBRELLALIA6 EXCESSLIAB OCCUR CLAIMS -MADE EACHOCCURRENCE $ AGGREGATE $ DED RETENTIONS $ A WORKERS COMPENSATION AND EMPLOYERS LIABILITY ANY PROPRIETOR/PARTNER/ Y/N EXECUTIVE OFFICER/MEMBERN/A EXCLUDED?(Mandatoryln NH) Ifyes, describe under DESCRIPTION Of OPERATIONSbelow 820098407 10/01/2017 10/01/2018 X I PER STATUTE OTHER $ E.L. EACH ACCIDENT $ 1,000,000 E.L. DISEASE -EA EMPLOYEE 1,000,000 E. L. DISEASE -POLICY OMIT $ 1,000,000 DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if mare space Is required) CANCELLATION Ja�� City of Rosemead 8838 E Valley Boulevard Rosemead, CA 91770 SHOULDANYOF EAB DATE THEREOF, ICES DESCRIBED PO ICI ILLBEDE VER: N BECANCELLEDBEFORETHE EXPIRATION CORDANCE WITHTHE POLICY PROVISIONS. AUTHORIZED REP ESE V ACORD 25 (2016/03) ©1988-2015 ACORD CORPORATION. All Rights Reserved 31-1769 11-15 The ACORD name and logo are registered marks of ACORD Attachment B (3) "k, INSURANCE WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE POLICY Named KIKUCHI, RICHARD (GEN PRTNR) Insured • SOLL, LANCE (GEN PRTNR) . 203 N BREA BLVD # 203 BREA CA92821 Effective Date 10/10/01/17 WC 99 06 19 Agent 97-50-384 A2009-84-07 2017 Policy Number Policy of the Company Year WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS ENDORSEMENT- BLANKET We have the right to recover our payments from anyone liable for an 1 nju ry covered by this policy. We will not enforce our right against the person or organization for which you perform work under a written contract that requires you to obtai n this agreement from us. The additional premium for this endorsement shall be 3.0 %of the Workers'Compensation premium otherwise due for the state(s) listed below on such remuneration, subject to a minimum charge of All written contracts in the state(s) of. CA This endorsement Is part of your policy. It supersedes and controls anything to the contrary. It is otherwise subject to all the terms of the policy. Countersigned Au prized Representative WC990619A 9-07 Page 1ofI 93.6369;WC990619A J6369111