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HomeMy WebLinkAbout8A - Auditing Services ~.. 4L AGENDA #: PREPARED BY: SUBJECT: DATE: INTRODUCTION: 8A RALPH TESCHNER FINANCE DIRECTOR CONSIDER APPROVAL OF RESOLUTION 95-61 AWARDING BID FOR AUDITING SERVICES FOR 1995,1996 AND 1997. JULY 17, 1995 The purpose for this agenda item is for the Council to consider the bid award for auditing services for a period of three years covering 1995-1997 with an option for an additional three years. During the course of the Council's annual appointment review, conducted during the first meeting of the year, discussion revolved around the fact that the City had retained the auditing services of the current firm for a period of 15 years. It was determined that it would be in the best interest of the City to appoint a new firm to gain a fresh perspective. Therefore, Council directed Staff to initiate the selection process by preparing a Request for Proposal (RFP) so that a decision could be made by mid-summer to allow adequate planning on the part of the new company as well as to provide the City with a firm cost for its 1996 proposed budget. The RFP's were mailed May 12, 1995 to the following prospective bidders: BACKGROUND: OlSCUSSION: 1. Abdo, Abdo & Eick 2. Deloitte & Touche 3. Froehling, Anderson, Plowman & Wasmuth, LTD 4. KPMG Peat Marwick 5. Malloy, Montague, Kamowski, Radosevich & Co. (MMKR) 6. McGladrey & pullen 7. Tautges, Redpath & Co., LTD The City received a complete proposal from the following firms: 1. Abdo, Abdo & Eick 2. Malloy, Montague, Karnowski, Radosevich & Co. 3. Tautges, Redpath & Co., LTD Section vn of the RFP stated that proposals would be evaluated by a "Review Committee" consisting of the City Manager, Assistant City Manager and the Finance Director according to the following criteria: 16200 Eagle Creek Ave., prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER Two companies (Freehling! Anderson and Peat Marwick) respectively declined to submit a proposal due to current commitments that would conflict with our time requirements. Neither Deloitte & Touche or McGladrey & pullen responded to the City's invitation to bid. ----.._."'.,....''''~ I RECOMMENDATION: Staff would recommend the City Council to approve Resolution 95-61 Awarding Bid for Auditing Services for 1995, 1996 and 1997 to the Firm of Abdo, Abdo & Eick. Staffs conclusion was that while there was very little difference between the top two firms, there were basically 5 reasons why Staff believes that the furn of Abdo, Abdo & Eick would be best suited for the City of Prior Lake. They are listed in the following fashion: 1. Contact Initiative - Abdo, Abdo & Eick showed greater interest by contacting staff directly for purpose of meeting and discussing the City's needs and expectations. Malloy never did make such an effort. 2. Time Commitment - Both Abdo and Tautges indicated that 280-285 hours were necessary to perform the city's audit while MMKR reserved only 209 hours. 3. Senior Team - The experience level of Abdo, Abdo & Eick team that would be doing the audit was greater than MMKR's. 4. City Audit Specialization - Of all the firms, only Abdo, Abdo & Eick cOl1centrated virtually entirely in the field of governmental auditing which was noted by their list of municipal clients. 5. Price Consideration - While the the total cost differential between the top two fums was less than $750.00 Staff believes is still important to be cost conscious in these tax sensitive times. A complete set of the audit proposal documents from the the three firms are available in the City Manager's office if any Councilmember wishes to review the submittals. ALTERNATIVES: The following alternatives are available to the City Council: 1. Approve Resolution 95-61 Awarding Bid for Auditing Services for 1995,1996 and 1997 to Abdo, Abdo & Eick. 2. Amend Resolution 95-61 to consider the firm desired by the City Council. REVIEWED BY: olution 95-61 Awarding Bid of Auditing Services 7 to Abdo, Abdo & Eick. ACTION REQUIRED: A9S04.WRT 1. Mandatory Requirements: . The audit firm is independent and licensed to practice in Minnesota. . The firm has no conflict of interest with regard to any other work performed by the firm for the City of Prior Lake. . The firm adheres to the instructions in this request for proposals on preparing and submitting the proposal. 2. Technical Qualifications: - (45 PTS.) . The firm's past experience and performance on comparable government financial statements. . The quality of the fum's professional personnel to be assigned to the engagement and quality of the firm's management support personnel. 3 Audit Approach: - (25 PTS.) . Agreement to meet or exceed performance specifications. . Adequacy of sampling techniques and analytical procedures. 4. Price: - (30 PTS.) . Comparative Cost As indicated above each of the elements were weighted therefore cost was not the sole or primary factor in determining the best qualified audit firm. All three firms were judged to be excellent from the standpoint of being well established and recognized. The composite scores of the review committee are indicated below: FIRM NAME SCORE Abdo & Abdo MMKA Tautges & Redpath 3.58 (out of a possible 4) 3.49 (out of a possible 4) 3.18 (out of a possible 4) The dollar cost proposal for each firm is outlined below: FIRM NAME BID AMOUNT Abdo & Abdo 1995 - 1996 - 1997 - Total.. . MMKA 1995 - 1996 - 1997 - Total... Tautges & Redpath 1995 - 1996 - 1997 - Total... $9,700 $9,880 $10.260 $29,840 $9,900 $10,200 $10.500 $30,600 $14,970 $15,465 $15.975 $46,410 MOTION BY: WHEREAS, WHEREAS, WHEREAS, WHEREAS, RESOLUTION 95-61 RESOLUTION AWARDING BID FOR AUDITING SERVICES FOR 1995, 1996 AND 1997 SECONDED BY: the City Council of the City of Prior Lake has determined that auditing services should be rotated on the basis of approximately every six years to obtain the best possible performance review of the City's fiscal condition; and the City of Prior Lake has solicited bids on the basis of Request for Proposals to seven regionally recognized firms; and each of the responding firms were evaluated based upon a specified and established set of criteria; and it has been determined that the firm most qualified based upon the mandatory elements, technical qualifications and price consideration is the company of Abdo, Abdo & Eick. NOW, THEREFORE, BE IT RESOLVED by the Mayor and City Council that the bid for auditing services for the period of the years 1995, 1996 and 1997 be awarded to Abdo, Abdo and Eick with the option of auditing the City of Prior Lake's financial statements for three subsequent years (1998 - 2000). Such bid award is to be subject to the provisions within the Request for Proposals and in the amounts of $9700, 9880 and $10,260 respectively. Passed and adopted this 17th day of .IYh, 1995. {Seal} YES NO Andren Greenfield Kedrowski Schenck Scott Andren Greenfield Kedrowski Schenck Scott Frank Boyles City Manager City of Prior Lake 16200 Eagle Creek Ave., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER