The URL can be used to link to this page

Home My WebLink About5D Auditing Services Agreement Extension Report 4646 Dakota Street SE Prior Lake, MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: OCTOBER 2, 2017 AGENDA #: 5D PREPARED BY: JASON ETTER, ACCOUNTING MANAGER CATHY ERICKSON, FINANCE DIRECTOR PRESENTED BY: CATHY ERICKSON, FINANCE DIRECTOR AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION EXTENDING THE AUDITING SERVICES AGREEMENT WITH MALLOY, MONTAGUE, KARNOWSKI & RA- DOSEVICH (MMKR) FOR CALENDAR YEARS ENDING 2017, 2018 AND 2019 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 2017, 2018 and 2019 as provided for in our original agreement. 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 previous three-year contract amounts are shown below: Year Audited Amount 2014 $ 26,950 2015 $ 27,450 2016 $ 27,950 Total $ 82,350 The Standardized Professional Services 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 2017, 2018 and 2019 as follows: Year Audited Amount 2017 $ 29,950 2018 $ 30,500 2019 $ 31,100 Total $ 91,550 With the implementation of GASBs 45/67/68 (Other Post-Employment Benefits/Fi- nancial Reporting for Pension Plans/Accounting and Financial Reporting for Pen- sions) the auditor is required to perform additional testing of the City’s pension in- formation and prepare additional note disclosures. This is the primary reason for the ($2000, 7.15%) cost increase from 2016 to 2017. The proposed increases for 2018 and 2019 are $550 and $600 respectively which is less than 2% each year. A copy of the proposal is attached to this agenda report. 2 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 2017, 2018 and 2019. 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. There has been recent turnover of staff in the Finance department (Finance Direc- tor, Accounting Manager, and Accountant). We feel it would be beneficial to con- tinue the auditing services with MMKR for one more term as the staff has devel- oped the supporting workpapers to meet the auditor’s specific needs. In addition, MMKR is familiar with the City’s financial processes, so continuity with the audit partner and manager would be beneficial. FINANCIAL IMPACT: The preliminary 2018 budget includes $30,700 for auditing services for conducting the 2017 annual audit. The proposal submitted by MMKR includes the following maximum price for con- ducting auditing services: Year Audited Amount 2017 $ 29,950 2018 $ 30,500 2019 $ 31,100 Total $ 91,550 Other services such as TIF reports, single audit of federal expenditures, etc. will be addressed by separate agreement. ALTERNATIVES: 1. Motion and second to approve this item as part of the consent agenda. 2. Motion and second to remove this item from the consent agenda for additional discussion. RECOMMENDED MOTION: Alternative #1. C:\Users\aschroeder\Desktop\17-XXX Auditing Services Agreement Extension.docx 4646 Dakota Street SE Prior Lake, MN 55372 RESOLUTION 17-___ A RESOLUTION EXTENDING THE AUDITING SERVICES AGREEMENT WITH MALLOY, MONTAGUE, KARNOWSKI & RADOSEVICH (MMKR) FOR CALENDAR YEARS ENDING 2017, 2018 AND 2019 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 2014, 2015 and 2016; 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 2017, 2018 and 2019 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. 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 2017, 2018 and 2019 as follows: 2017 $29,950 2018 $30,500 2019 $31,100 Total $91,550 3. Funding for these professional services will be drawn from the General Fund Account #101- 41540.00-53010.00. 2 PASSED AND ADOPTED THIS 2nd DAY OF OCTOBER 2017 VOTE Briggs McGuire Thompson Braid Burkart Aye ☐ ☐ ☐ ☐ ☐ Nay ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ ______________________________ Frank Boyles, City Manager