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Home My WebLink About5G - Extending Auditing Services Agreement O� PRlq� ti U m 4646 Dakota Street SE Prior Lake. NIN 55372 �jNNESo*1� CITY COUNCIL AGENDA REPORT MEETING DATE: OCTOBER 27, 2014 AGENDA#: 5G PREPARED BY: JERILYN ERICKSON, FINANCE DIRECTOR PRESENTED BY: JERILYN ERICKSON AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION EXTENDING THE AUDITING SERVICES AGREEMENT WITH MALLOY, MONTAGUE, KARNOWSKI & RA- DOSEVICH (MMKR) FOR CALENDAR YEARS ENDING 2014, 2015 AND 2016 DISCUSSION: Introduction The purpose of this agenda item is to consider Staff's recommendation to extend the auditing services agreement with Malloy, Montague, Karnowski & Radosevich (MMKR) for providing professional auditing services for the years 2014, 2015 and 2016. History In 2011, as part of Staff's efforts to review existing consulting services, Staff pre- pared and issued a Request for Proposals (RFP) for professional auditing services for the calendar years ending December 31, 2011, 2012 and 2013. The auditing firm of Malloy, Montague, Karnowski & Radosevich (MMKR) was hired to provide professional auditing services for the City of Prior Lake. The costs associated with the annual audits were as follows: Year Audited Amount 2011 $24,550 2012 $24,700 2013 $24,925 Total $ 74,175 Current Circumstances The City has been satisfied with the high quality auditing services that have been provided by MMKR for the past three years. The Standardized Professional Ser- vices Agreement with MMKR provides for an extension upon the written mutual consent of the parties for such additional period as they deem appropriate. MMKR has provided a proposal for providing auditing services for calendar years ending 2014, 2015 and 2016 as follows: Year Audited Amount 2014 $26,950 2015 $27,450 2016 $27,950 Total $ 82,350 A copy of the proposal is attached to this agenda report. Conclusion Based upon the proposal received, City Staff is recommending that an extension is authorized to the existing Professional Services Agreement with the firm of Malloy, Montague, Karnowski & Radosevich (MMKR) to provide professional auditing ser- vices for calendar years ending 2014, 2015 and 2016. ISSUES: As the City Council is aware, under State Statute, the selection of an auditing firm is considered a professional service. Accordingly, criteria in addition to cost are considered. FINANCIAL The 2014 budget contains $24,925 for 2013 auditing services. The preliminary IMPACT: 2015 budget includes an estimated $29,000 for auditing services for conducting the 2014 annual audit. This amount will be adjusted with the final budget. The proposal submitted by MMKR includes the following maximum price for con- ducting auditing services: Year Audited ' Amount 2014 $26,950 2015 $27,450 2016 $27,950 Total $ 82,350 Other services such as preparation of TIF reports, single audit of federal expendi- tures, etc. will be addressed by separate agreement. ALTERNATIVES: 1. Consider approval of a resolution extending the auditing services agreement with Malloy, Montague, Karnowski & Radosevich (MMKR) for 2014, 2015 and 2015. 2. Table this item for a specific reason. RECOMMENDED Alternative#1. MOTION: 2 Master Copy Dollar Cost Proposal for City of Prior Lake for Professional Auditing Services For Fiscal Years Ended December 31, 2014,2015,and 2016 By Malloy,Montague,Karnowski,Radosevich& Co.,P.A. James H. Eichten,Principal 5353 Wayzata Boulevard, Suite 410 Minneapolis,MN 55416 (952)545-0424 Dated: September 12,2014 DOLLAR COST PROPOSAL FOR THE CITY OF PRIOR LAKE FOR PROFESSIONAL AUDITING SERVICES For Fiscal Year Ended December 31,2014,2015,and 2016 By Malloy,Montague,Karnowski,Radosevich&Co.,P.A. I certify that I am entitled to represent Malloy, Montague, Karnowski, Radosevich & Co., P.A., empowered to submit this proposal, and authorized to sign a contract with the City of Prior Lake (the City). Signed: dA Jaryo H.Eichten,CPA P nc pal Total all-inclusive maximum price: Year Ended December 31, Total 2014 $ 26,950 2015 27,450 2016 27,950 Total $ 82,350 Our proposal does not include an audit in accordance with the Single Audit Act Amendments of 1996 and OMB Circular A-133, which would only be required if the City expended $500,000 or more in federal assistance funds during the year. If the City is required to have a single audit of federal assistance funds, this proposal would need to be modified. SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE DECEMBER 31,2014 FINANCIAL STATEMENTS By Malloy,Montague,Karnowski,Radosevich&Co.,P.A. Standard Quoted Hourly Hourly Hours Rates Total Total Basic audit Principals 35 $ 250 $ 220 $ 7,700 Managers 20 160 140 2,800 Senior Associates 90 100 90 8,100 Staff Associates 85 85 85 7,225 Other—Clerical 25 50 40 1,000 Subtotal 255 26,825 Reimbursable expenses(photocopies,mileage,etc.) 125 Total estimated price for 2014 audit $ 26,950 If it should become necessary for the City of Prior Lake (the City) to request the auditor to render any additional services to either supplement the services requested in this proposal or to perform additional work as a result of the specific recommendations included in any report issued on this engagement, then such additional work shall be performed only if set forth in an addendum to the contract between the City and the firm.Any such additional work agreed to between the City and the firm shall be performed at the same rates set forth in the schedule of professional fees and expenses included above. O� PRlg1 ti U 4646 Dakota Street SE s0'10P Prior Lake,MN 55372 RESOLUTION 14-xxx A RESOLUTION EXTENDING THE AUDITING SERVICES AGREEMENT WITH MALLOY, MONTAGUE, KARNOWSKI &RADOSEVICH (MMKR) FOR CALENDAR YEARS ENDING 2014,2015 AND 2016 Motion By: Second By: WHEREAS, The City of Prior Lake is required to conduct an annual financial audit and to prepare an annual financial statement; and WHEREAS, The City seeks to provide the highest quality service for the best value; and WHEREAS, The City entered into a Standardized Professional Services Agreement with the firm Malloy, Montague, Karnowski and Radosevich (MMKR) to provide auditing services for calendar years ending 2011, 2012 and 2013; and WHEREAS, MMKR has delivered high quality auditing services; and WHEREAS, The Standardized Professional Services Agreement provides for an extension upon the written mutual consent of the parties for such additional period as they deem appropriate; and WHEREAS, MMKR has provided a proposal for providing auditing services for calendar years ending 2014, 2015 and 2016 that is reasonable. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows; 1. The recitals set forth above are incorporated herein. 2. As an extension of the original Standardized Professional Services Agreement with MMKR is hereby authorized to provide professional auditing services for the City of Prior Lake for calendar years ending 2014, 2015 and 2016 as follows: 2014 $26,950 2015 $27,450 2016 $27,950 Total $82,350 3. Funding for these professional services will be drawn from the General Fund Account#101- 41540-301. PASSED AND ADOPTED THIS 27th DAY OF OCTOBER 2014. VOTE Hedberg Keeney McGuire Morton Soukup Aye ❑ ❑ ❑ ❑ ❑ Nay ❑ ❑ ❑ ❑ ❑ Absent ❑ ❑ ❑ ❑ ❑ Abstain ❑ ❑ ❑ ❑ ❑ Frank Boyles, City Manager 2