HomeMy WebLinkAbout09 - Award of Contracts to Eide Bailly LLP and The Pun Group LLP for Internal Audit ServicesP CITY OF
NEWPORT BEACH
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4:09 City Council Staff Report
July 9, 2024
Agenda Item No. 9
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Jason Al -Imam, Finance Director/Treasurer - 949-644-3126,
jalimam@newportbeachca.gov
PREPARED BY: Jason Al -Imam, Finance Director/Treasurer
TITLE: Award of Contracts to Eide Bailly LLP and The Pun Group LLP for
Internal Audit Services
ABSTRACT:
Earlier in the fiscal year, a Request for Proposals (RFP) was issued, which solicited
proposals from qualified firms to provide a review of internal controls and on -call
management consulting services in connection with the City's internal audit program. 16
proposals were received. A three -person selection committee comprised of the finance
director, revenue manager, and revenue auditor reviewed and scored the proposals
narrowing the list down to the two most qualified firms.
RECOMMENDATIONS:
a) Determine this 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
this action will not result in a physical change to the environment, directly or indirectly-,
b) Authorize the Mayor and City Clerk to sign a five-year professional services
agreement for on -call internal audit services for an amount not -to -exceed $750,000
with The Pun Group LLP; and
c) Authorize the Mayor and City Clerk to sign a five-year professional services
agreement for on -call internal audit services for an amount not -to -exceed $750,000
with Eide Bailly LLP, who employs two former employees that have separated from
the City within the past five years. City Council approval is requested pursuant to City
Council Policy F-14 even though the former employees will not serve on the internal
audit engagement.
DISCUSSION:
The Finance Department established an internal audit program in 2020 to help
management maintain a comprehensive framework of internal controls. Internal audits
are performed each year in connection with a recent internal control risk assessment.
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Award of Contracts to Eide Bailly and The Pun Group for Internal Audit Services
July 9, 2024
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The Finance Department issued a formal RFP, which solicited proposals from qualified
firms to provide a review of internal controls and to provide on -call management
consulting services in connection with the City's internal audit program. The RFP was
posted on the City's electronic bidding platform, PlanetBids. 16 proposals were received,
which were evaluated by a panel that consisted of Finance Department staff. Proposals
were submitted in two parts, including a written technical proposal and a separate cost
proposal that outlined billing rates.
The proposals were evaluated by the panel based on the following criteria:
• Qualifications and experience of the proposer.
• Proposer's demonstrated experience and subject matter expertise in providing the
requested services.
• Proposer's ability to deploy and provide services as requested in the scope of
services.
• Proposer's work plan and methodology.
The results of the panel's technical analysis are reflected in the following table:
Proposer
Eide Bailly LLP
The Pun Group LLP
Technical Score
88.67
88.00
Crowe LLP
84.33
Macias Gini & O'Connell LLP
82.33
Vasquez & Company LLP
81.00
Moss Adams LLP
70.33
Baker Tilly US LLP
68.33
Sjoberg Evashenk Consulting, Inc.
64.67
BDO USA LLP
63.67
Weaver
63.00
Matrix Consulting Group
61.00
Plante & Moran PLLC
58.00
Deloitte
57.67
UHY Advisors Mid -Atlantic MID Inc.
57.33
BCA Watson Rice — Western Region LLP 56.33
Sotomayor & Associates LLP 54.67
The panel identified the two highest ranked proposers (Eide Bailly LLP and The Pun
Group LLP) as the best suited for this project.
The Finance Committee annually reviews a list of possible topics for the upcoming year's
internal audit program. The two selected firms will be provided with the annual list of
internal audit topics and will be asked to submit a workplan and cost for each of the audits
for staff to review. Staff will assign each topic to the firm demonstrating the most relevant
experience and a reasonable proposed cost for the work.
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Award of Contracts to Eide Bailly and The Pun Group for Internal Audit Services
July 9, 2024
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Eide Bailly is a national certified public accounting firm that has been authorized to do
business in California since 1997 and has more than 1,300 government clients
nationwide. Internal audit services will be overseen by Bradford Rockabrand, Partner who
has extensive experience in auditing municipalities.
The Pun Group is a certified public accounting firm with licenses in the States of
California, Arizona, and Nevada and is a recognized leader in providing governmental
audit services. Internal audit services will be overseen by Kenneth Pun, Managing Partner
who has extensive experience in auditing municipalities.
Section I of City Council Policy F-14 (Contract Procurement and Authority to Contract)
requires City Council approval for professional services agreements with a business that
employs a former employee that has separated within the past five years. Former Finance
Director Scott Catlett separated two years ago and joined Eide Bailly in 2022. In addition,
former Deputy Finance Director Michael Gomez separated four months ago and joined
Eide Bailly in 2024. However, it should be noted that Mr. Catlett and Mr. Gomez will not
serve on the engagement to provide internal audit services. Nonetheless, City Council
approval is requested pursuant to City Council Policy F-14.
FISCAL IMPACT:
The annual budget includes $150,000 of funding that is allocated each year for the
internal audit program. Depending on the topics selected each fiscal year, actual costs
may be less than this amount. Funds are budgeted in the Financial Administration —
Professional Services account in the Finance Department — 01030005-811008. It is
recommended that the value of each contract for Eide Bailly and The Pun Group be
valued at $750,000 in order to provide flexibility to utilize either firm over the course of the
five-year period. However, it should be noted that the actual amount expended for both
firms over the five-year period is not expected to exceed $750,000 in the aggregate, which
is consistent with the amount of funds that are expected to be budgeted over the five-year
period.
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).
ATTACHMENTS:
Attachment A — Professional Services Agreement with Eide Bailly LLP
Attachment B — Professional Services Agreement with The Pun Group LLP
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Attachment A
Professional Services Agreement with Eide Bailly LLP
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ON -CALL PROFESSIONAL SERVICES AGREEMENT
WITH EIDE BAILLY, LLP FOR
ON -CALL CONSULTING SERVICES RELATED TO THE CITY'S INTERNAL
AUDIT PROGRAM
THIS ON -CALL PROFESSIONAL SERVICES AGREEMENT ("Agreement") is
made and entered into as of this 9th day of July, 2024 ("Effective Date"), by and between
the CITY OF NEWPORT BEACH, a California municipal corporation and charter city
("City"), and EIDE BAILLY, LLP, a North Dakota limited liability partnership registered and
in good standing with the California Secretary of State to transact intrastate business in
the State of California ("Consultant"), whose address is 4310 17th Ave S, Fargo, ND
58103, and is made with reference to the following:
RECITALS
A. City is a municipal corporation duly organized and validly existing under the laws
of the State of California with the power to carry on its business as it is now being
conducted under the statutes of the State of California and the Charter of City.
B. City desires to engage Consultant to provide on -call consulting services related to
the City's Internal Audit Program ("Project").
C. Consultant possesses the skill, experience, ability, background, certification and
knowledge to provide the professional services described in this Agreement.
D. City has solicited and received a proposal from Consultant, has reviewed the
previous experience and evaluated the expertise of Consultant, and desires to
retain Consultant to render professional services under the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties
as follows:
1 . TERM
The term of this Agreement shall commence on the Effective Date, and shall
terminate on June 30, 2029, unless terminated earlier as set forth herein.
2. SERVICES TO BE PERFORMED
2.1 Consultant shall perform the on -call services described in the Scope of
Services attached hereto as Exhibit A and incorporated herein by reference ("Services"
or "Work"). Upon written request from the Project Administrator as defined herein,
Consultant shall provide a letter proposal for Services requested by the City (hereinafter
referred to as the "Letter Proposal"). The Letter Proposal shall include the following:
2.1.1 A detailed description of the Services to be provided;
2.1.2 The position of each person to be assigned to perform the Services,
and the name of the individuals to be assigned, if available;
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and
2.1.3 The estimated number of hours and cost to complete the Services;
2.1.4 The time needed to finish the specific project.
2.2 No Services shall be provided until the Project Administrator has provided
written acceptance of the Letter Proposal. Once authorized to proceed, Consultant shall
diligently perform the duties in the approved Letter Proposal.
3. TIME OF PERFORMANCE
3.1 Time is of the essence in the performance of Services under this Agreement
and Consultant shall perform the Services in accordance with the schedule included in
Exhibit A and the Letter Proposal. In the absence- of a specific schedule, the Services
shall be performed to compl ' Otion in a diligent and timely manner. The failure by
Consultant to strictly adhere to the schedule set forth in Exhibit A and the Letter Proposal,
if any, or perform the Services in a diligent and timely manner may result in termination
of this Agreement by City.
3.2 Notwithstanding the foregoing, Consultant shall not be responsible for
delays due to causes beyond Consultant's reasonable control. However, in the case of
any such delay in the Services to be provided for the Project, each party hereby agrees
to provide notice within ten (10) calendar days of the occurrence causing the delay to the
other party so that all delays can be addressed.
3.3 Consultant shall submit all requests for extensions of time for performance
in writing to the Project Administrator as defined herein not later than ten (10) calendar
days after the start of the condition that purportedly causes a delay. The Project
Administrator shall review all such requests and may grant reasonable time extensions
for unforeseeable delays that are beyond Consultant's control.
3.4 For all time periods not specifically set forth herein, Consultant shall
respond in the most expedient and appropriate manner under the circumstances, by
hand -delivery or mail.
4. COMPENSATION TO CONSULTANT
4.1 City shall pay Consultant for the Services on a time and expense not -to -
exceed basis in accordance with the provisions of this Section and the Letter Proposal
and the Schedule of Billing Rates attached hereto as Exhibit B and. incorporated herein
by reference. Consultant's compensation for all Work performed in accordance with this
Agreement, including all reimbursable items and subconsultant fees, shall not exceed
Seven Hundred Fifty Thousand Dollars and 00/100 ($750,000.00), without prior
written authorization from City. No billing rate changes shall be made during the term of
this Agreement without the prior written approval of City.
4.2 Consultant shall submit monthly invoices to City describing the Work
performed the preceding month. Consultant's bills shall include the name of the person
who performed the Work, a brief description of the Services performed and/or the specific
task in the Scope of Services to which it relates, the date the Services were performed,
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the number of hours spent on all Work billed on an hourly basis, and a description of any
reimbursable expenditures. City shall pay Consultant no later than thirty (30) calendar
days after approval of the monthly invoice by City staff.
4.3 City shall reimburse Consultant only for those costs or expenses specifically
identified in Exhibit B to this Agreement and the Letter Proposal or specifically approved
in writing in advance by City.
4.4 Consultant shall not receive any compensation for Extra Work performed
without the prior written authorization of City. As used herein, "Extra Work" means any
Work that is determined by City to be necessary for the proper completion of the Project,
but which is not included within the Scope of Services and which the parties did not
reasonably anticipate would be necessary at the execution of this Agreement.
Compensation for any authorized Extra Work shall be paid in accordance with the
Schedule of Billing Rates as set forth in Exhibit B and the Letter Proposal.
5. PROJECT MANAGER
5.1 Consultant shall designate a Project Manager, who shall coordinate all
phases of the Project. This Project Manager shall be available to City at all reasonable
times during the Agreement term. Consultant has designated Bradford Rockab,rand to
be its Project Manager. Consultant shall not remove or reassign the Project Manager or
any personnel listed in Exhibit A or assign any new or replacement personnel to the
Project without the prior written consent of City. City's approval shall not be unreasonably
withheld with respect to the removal or assignment of non -key personnel.
5.2 Consultant, at the reasonable discretion of City, shall remove from the
Project any of its personnel assigned to the performance of Services upon written request
of City. Consultant warrants that it will continuously furnish the necessary personnel to
complete the Project on a timely basis as contemplated by this Agreement.
5.3 If Consultant is performing inspection services for City, the Project Manager
and any other assigned staff shall be equipped with a cellular.phone to communicate with
City staff. The Project Manager's cellular phone number shall be provided to City.
6. ADMINISTRATION
This Agreement will be administered by the Finance Department. City's Finance
Director or designee shall be the Project Administrator and shall have the authority to act
for City underthis Agreement. The Project Administrator shall represent City in all matters
pertaining to the Services to be rendered pursuant to this Agreement.
7. CITY'S RESPONSIBILITIES
To assist Consultant in the execution of its responsibilities under this Agreement,
City agrees to provide access to and upon request of Consultant, one copy of all existing
relevant information on file at City. City will provide all such materials in a timely manner
so as not to cause delays in Consultant's Work schedule.
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8. STANDARD OF CARE
8.1 All of the Services shall be performed by Consultant or under Consultant's
supervision. Consultant represents that it possesses the professional and technical
personnel required to perform the Services required by this Agreement, and that it will
perform all Services in a manner commensurate with community professional standards
and with the ordinary degree of skill and care that would be used by other reasonably
competent practitioners of the same discipline under similar circumstances. All Services
shall be performed by qualified and experienced personnel who are not employed by City.
By delivery of completed Work, Consultant certifies that the Work conforms to the
requirements of this Agreement, all applicable federal, state and local laws, and legally
recognized professional standards.
8.2 Consultant represents and warrants to City that it has, shall obtain, and shall
keep in full force and effect during the term hereof, at its sole cost and expense, all
licenses, permits, qualifications, insurance and approvals of whatsoever nature that is
legally required of Consultant to practice its profession. Consultant shall maintain a City
of Newport Beach business license during the term of this Agreement.
8.3 Consultant shall not be responsible for delay, nor shall Consultant be
responsible for damages or be in default or deemed to be in default by reason of strikes,
lockouts, accidents, acts of God, or the failure of City to furnish timely information or to
approve or disapprove Consultant's Work promptly, or delay or faulty performance by
City, contractors, or governmental agencies.
9. HOLD HARMLESS
9.1 To the fullest extent permitted by law, Consultant shall indemnify and hold
harmless City, its City Council, boards and commissions, officers, agents, volunteers,
employees and any person or entity owning or otherwise in legal control of the property
upon which Consultant performs the Project and/or Services contemplated by this
Agreement (c ' ollectively, the "Indemnified Parties") from and against any and all claims
(including, without limitation, claims for bodily injury, death or damage to property),
demands, obligations, damages, actions, causes of action, suits, losses, judgments,
fines, penalties, liabilities, costs and expenses (including, without limitation, attorneys'
fees, disbursements and court costs) of every kind and nature whatsoever (individually,
a Claim; collectivelyi "Claims"), which may arise from or in any manner relate (directly or
indirectly) to any breach of the terms and* conditions of this Agreement, any Work
performed or Services provided under this Agreement including, without limitation,
defects in workmanship or materials or Consultant's presence or activities conducted on
the Project (including the negligent, reckless, and/or willful acts, errors and/or o.missions
of Consultant, its. r principals, officers, agents, employees, vendors, suppliers, consultants,
subcontractors, anyone employed directly or indirectly by any of them or for whose acts
they may be liable, or any or all of them). Notwithstanding the foregoing, to the extent a
Claim is based on actual or alleged errors and omissions in the performance of
professional services, Consultant's duty under this section shall be limited to indemnify
and hold harmless City, but not provide a defense.
9.2 Notwithstanding the foregoing, nothing herein shall be construed to require
Consultant to indemnify the Indemnified Parties from any Claim to the extent it arises from
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the negligence of the Indemnified Parties. Nothing in this indemnity shall be construed
as authorizing any award of attorneys' fees in any action on or to enforce the terms of this
Agreement. This indemnity shall apply to all claims and liability regardless of whether
any insurance policies are applicable. The policy limits do not act as a limitation upon the
amount of indemnification to be provided by Consultant.
10. INDEPENDENT CONTRACTOR
It is understood that City retains Consultant on an independent contractor basis
and Consultant is not an agent or employee of City. The manner and means of
conducting the Work are under the control of Consultant, except to the extent they are
limited by statute, rule or regulation and the expressed terms.of this Agreement. No civil
service status or other right of employment shall accrue to Consultant or its employees.
Nothing in. this Agreement shall be deemed to constitute approval for Consultant or any
of Consultant's employees or agents, to be the agents or employees of City. Consultant
shall have the responsibility for and control over the means of performing the. Work,
provided that Consultant is in compliance with the terms of this Agreement. Anything in
this Agreement that may appear to give City the right to direct Consultant as to the details
of the performance of the Work or to exercise a measure of control over Consultant shall
mean only that Consultant shall follow the desires of City with respect to the results of the
Services.
11. COOPERATION
Consultant agrees to work closely and cooperate with City's designated Project
Administrator and any other agencies that may have jurisdiction or interest in the Work to
be performed. City agrees to cooperate with the Consultant on the Project.
12. CITY POLICY
Consultant shall discuss and review all matters relating to policy and Project
direction with City's Project Administrator in advance of all, critical decision points in order
to ensure the Project proceeds in a manner consistent with C I ity goals and policies.
13. PROGRESS
Consultant is responsible for keeping the Project Administrator informed on a
regular basis regarding the status and progress of the Project, activities performed and
planned, and any meetings that have been scheduled or are desired.
14. INSURANCE
Without limiting Consultant's indemnification of City, and prior to commencement
of Work, Consultant shall obtain, provide and maintain at its own expense during the term
of this Agreement or for other periods as specified in this A, greement, policies of insurance
of the type, amounts, terms and conditions described in the Insurance Requirements
attached hereto as Exhibit C, and incorporated herein by reference.
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15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
Except as specifically authorized under this Agreement, the Services to be
provided under this Agreement shall not be assigned, transferred contracted or
subcontracted out without the prior written approval of City. Any of the following shall be
construed as an assignment: The sale, assignment, transfer or other disposition of any
of the issued and outstanding capital stock of Consultant, or of the interest of any general
partner or joint venturer or syndicate member or cotenant if Consultant is a partnership or
joint -venture or syndicate or co -tenancy, which shall result in changing the control of
Consultant. Control means fifty percent (50%) or more of the voting power or twenty-five
percent (25%) or more of the assets of the corporation, partnership or joint -venture.
16. SUBCONTRACTING
The subcontractors authorized by City, if any, to perform Work on this Project are
identified in Exhibit A and the Letter Proposal. Consultant shall be fully responsible to
.City for all acts and omissions of any subcontractor. Nothing in this Agreement shall
create any contractual relationship between City and any subcontractor nor shall it create
any obligation on the part of City to pay or to see to the payment of any monies due to
any such subcontractor other than as otherwise required by law. City is an intended
beneficiary of any Work performed by the subcontractor for purposes of establishing a
duty of care between the subcontractor and City. Except as specifically authorized herein,
the Services to be provided under this Agreement shall not be otherwise assigned,
transferred, contracted or subcontractedout without the prior written approval of City.
17. OWNERSHIP OF DOCUMENTS
17.1 Each and every report, draft, map, record, plan, document and other writing
produced, including but not limited to, websites, blogs, social media accounts and
applications, specifically prepared or caused to be prepared by Consultant, its officers,
employees, agents and subcontractors, by Consultant for and required to be delivered to
City under this Agreement (hereinafter, "Documents"), shall become the exclusive
property of City, and City shall have the sole right to use such materials in its discretion
without further compensation to Consultant or any other party. Additionally, all material
posted in cyberspace by Consultant, its officers, employees, agents and subcontractors,
in the course of implementing this Agreement, shall become the exclusive property of
City, and City shall have the sole right to use such materials in its discretion without further
compensation to Consultant or any other party. Consultant shall, at Consultant's
expense, provide such Documents, including all logins and password information to City
upon priorwritten request.
17.2 Documents, including drawings and specifications, prepared by Consultant
pursuant to this Agreement are not intended or represented to be suitable for reuse by
City or others on any other project. Any use of completed Documents for other projects
and any use of incomplete Documents without specific written authorization from
Consultant will be at City's sole risk and without liability to Consultant. Further, any and
all liability arising out of changes made to Consultant's deliverables under this Agreement
by City or persons other than Consultant is waived against Consultant, and City assumes
full responsibility for such changes unless City has given Consultant prior notice and has
received from Consultant written consent for such changes.
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17.3 All written documents shall.be transmitted to City in formats compatible with
Microsoft Office and/or viewable with Adobe Acrobat.
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.
21. WITHHOLDINGS
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 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.
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23. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
City reserves the right to employ other Consultants in connection with the Project.
24. CONFLICTS OF INTEREST
24.1 Consultant or its employees may be subject to the provisions of the
California Political Reform Act of 1974 (the "Act") and/or Government Code §§ 1090 et
seq., which (1) require such persons to disclose any financial interest that may
foreseeably be materially affected by the Work performed under this Agreement, and (2)
prohibit such persons from making, or participating in making, decisions that will
foreseeably financially affect such interest.
24.2 If subject to the Act and/or Government Code §§ 1090 et seg., Consultant
shall conform to all requirements therein. Failure to do so constitutes a material breach
and is grounds for immediate termination of this Agreement by City. Consultant shall
indemnify and hold harmless City for any and all claims for damages resulting from
Consultant's violation of this Section.
25. NOTICES
25.1 All notices, demands, requests or approvals, including any change in
mailing address, to be given under the terms of thi's Agreement shall be given in writing,
and conclusively shall be deemed served when delivered personally, or on the third
business day after the deposit thereof in the United States mail, postage prepaid, first-
class mail, addressed as hereinafter provided.
25.2 All notices, demands, requests or approvals from Consultant to City shall
be addressed to City at:
Attn: Finance Director
Finance Department
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
25.3 All notices, demands, requests or approvals from City to Consultant shall
be addressed to Consultant at:
Attn: Bradford Rockabrand
Eide Bailly, LLP
10681 Foothill Blvd., Ste. 300
Rancho Cucamonga, CA 91730
26. CLAIMS
Unless a shorter time is specified elsewhere in this Agreement, before making its
final request for payment under this Agreement, Consultant shall submit to City, in writing,
all claims for compensation under or arising out of this Agreement. Consultant's
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acceptance of the final payment shall constitute a waiver of all claims for compensation
under or arising out of this Agreement except those previously made in writing and
identified by Consultant in writing as unsettled at the time of its final request for payment.
Consultant and City expressly 'agree that in addition to any claims filing requirements set
forth in the Agreement, Consultant shall be required to file any claim Consultant may have
against City in strict conformance with the Government Claims Act (Government Code
sections 900 et seq.).
27. TERMINATION
27.1 1 n the event that either party fails or refuses to perform any of the provisions
of this Agreement at the time and in the manner required, that party shall be deemed in
default in the performance of this Agreement. If such default is not cured within a period
of two (2) calendar days, or if more than two (2) calendar days are reasonably required
to cure the default and the defaulting party fails to give adequate assurance of due
performance within two (2) calendar days after receipt of written notice of default,
specifying the nature of such default and the steps necessary to cure such default, and
thereafter diligently take steps to cure the default, the non -defaulting party may terminate
the Agreement forthwith by giving to the defaulting party written notice thereof.
27.2 Notwithstanding the above provisions, City shall have the right, at its sole
and absolute discretion and without cause, of terminating this Agreement at any time by
giving no less than seven (7) calendar days' prior written -notice to Consultant. In the
event of termination under this Section, City shall pay Consultant for Services
satisfactorily performed and costs incurred up to the effective date of termination for which
Consultant has not been previously paid. On the effective date of termination, Consultant
shall deliver to City all reports, Documents and other information developed or
accumulated in the performance of this Agreement, whether in draft or final form.
28. STANDARD PROVISIONS
28.1 Recitals. City and'Consultant acknowledge that the above Recitals are true
and correct and are hereby incorporated by reference into this Agreement.
28. 2 Compliance with all Laws. Consultant shall, at its own cost and expense,
comply with all statutes, ordinances, regulations and requirements of all governmental
entities, including federal, state, county or municipal, whether now in force or hereinafter
enacted. In addition, all Work prepared by Consultant shall conform to applicable City,
county, state and federal laws, rules, regulations and permit requirements and be subject
to approval of the Project Administrator and City.
28.3 Waiver. A waiver by either party of any breach, of any term, covenant or
condition contained herein shall not be deemed to be a waiver of any subsequent breach
of the same or any other term, covenant or condition contained herein, whether of the
same or a different character.
28.4 Integrated Contract. This Agreement represents the full and complete
understanding of every kind or nature whatsoever between the parties hereto, and all
preliminary negotiations and agreements of whatsoever kind or nature are merged herein.
No verbal agreement or implied covenant shall be held to vary the provisions herein.
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28.5 Conflicts or Inconsistencies. In the event there are any conflicts or
inconsistencies between this Agreement and the Scope of Services or any other
attachments attached hereto, the terms of this Agreement shall, govern.
28.6 Interpretation. The terms of this Agreement shall be construed in
accordance with the meaning of the language used and Shall not be construed for or
against either party by reason of the authorship of the Agreement or any other rule of
construction which might otherwise apply.
28.7 Amendments. This Agreement may be modified or amended only by a
written document executed by both Consultant and City and approved as to form by the
City Attorney.
28.8 Severability. If any term or portion of this Agreement is held to be invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement shall continue in full force and effect.
28.9 Controlling Law and Venue. The laws of the State of California shall govern
this Agreement and all matters relating to it and any action brought relating to this
Agreement shall be adjudicated in a court of competent jurisdiction in the County of
Orange, State of California.
28.10 Equal Opportunity Employment. Consultant represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee
or applicant for employment because race, religious creed, color, national origin,
ancestry, physical handicap, medical condition, marital status, sex, sexual orientation,
age or any other impermissible basis under law.
28.11 No Attorneys' Fees. In the event of any dispute or legal action arising under
this Agreement, the prevailing party shall not be entitled to aftorneys'fees.
28.12 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original and all of which together shall
constitute one (1) and the same instrument.
[SIGNATURES ON NEXT PAGE]
Eide Bailly, LLP Page 10
9-14
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date:—(0z?(,4L4
By: 1-,91 � 0�
Agron C. Harp /17 -T
City Attorney /,:� 4 I-Q
ATTEST:
Date:
-2
Leilani 1. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
Bw
Will O'Neill
Mayor
CONSULTANT: Eide Bailly, LLP, a North
Dakota Limited Liability Partnership
Date:
Bw
Bradford Rockabrand
Partner
[END OF SIGNATURES]
Attachments: Exhibit A — Scope of Services
Exhibit B — Schedule of Billing Rates
Exhibit C — Insurance Requirements
Eide Bailly, LLP Page 11
9-15
EXHIBIT A
SCOPE OF SERVICES
Eide Bailly, LLP Page A-1 9-16
EXHIBIT A
SCOPE OF SERVICES
The Director of Finance, or designee, shall establish a project -specific timeline and scope
of work. It is generally expected that fieldwork will commence in January and the
consultant shall render the final report within 90 days of the commencement of fieldwork,
unless otherwise specified by the Director of Finance, or designee.
A majority of the work may be performed in accordance with the Statement on Standards
for Consulting Services issued by the American Institute of Certified Public Accountants
(AICPA). Examples of required work include:
• Participate in the assessment of the internal control environment and related
internal control risks.
• Provide an outline or work plan for the project. Conduct interviews of key personnel
and supervisors in the Finance Department and other departments to determine if
existing policies and procedures are being followed and identify internal control
deficiencies.
• Review and evaluate the policy and procedures to assess internal control
effectiveness and -weaknesses. Review and evaluate controls performed directly
by Senior Staff or Management or detect Senior Staff or Management override of
controls.
• Identify inconsistences in internal controls and recommend changes to enhance
consistency citywide.
• Perform an analysis of selected electronic data on a limited basis for anomalies or
unusual transactions.
• Test accounting documentation for any identified areas of concern or potential
areas of vulnerability.
• Test organization compliance with Council and or administrative policies and or
operational procedures.
• Examine the practices of a department or program to determine if it is achieving
economy, efficiency and effectiveness in the employment of available resources.
• Create a report identifying internal control weaknesses, potential risks and
recommendations to improve internal controls, management practices, and
efficiency.
• Review payroll change procedures and time and attendance records for potential
timecard fraud or unauthorized absences.
• The Consultant will also provide recommendations on new, or changes to existing,
financial policies and procedures, risk management methods, and ideas to support
organizational efficiency and effectiveness.
9-17
October 6, 2023
Proposal for Professional Services I Request for Proposal No. 24-21
CITY OF NEWPORT BEACH
Submitted By:
Eide Bailly LLP
Bradford Rockabrand, CPA, CIA
Partner
9-18
CITY OF NEWPORT BEACH
TABLE OF CONTENTS
ExecutiveSummary ................................................................................................................... 3
Qualificationsand Experience ............................................................................................... 5
Principal, Supervisory and Staff Qualifications and Experience ..................................... 9
ProjectApproach .................................................................................................................... 13
The Right Choice for City of Newport Beach ..................................................................... 14
EideBailly.
Whof inspires you, inspires us.
eidebodly.com
9-19
CITY OF NEWPORT BEACH
Exe(utive Summary
WE WANT TO WORK WITH YOU
Thank you for the opportunity to reply to the City of Newport Beach's (City)
Request for Proposal (RFP) to review internal controls and provide on -call
management consulting services. We understand your needs and have
provided similar services to the government industry for more than 70 years.
We are confident that the City will benefit from the experience we can
provide. Eide Bailly has the qualifications to be the firm of choice for this
engagement for the following reasons:
Extensive Government Industry Experience: Business is about more
than numbers and we are active in the industries we serve. We stay abreast of
current issues impacting the government industry and grow our knowledge by
attending workshops and trainings. During your engagement, we will work
closely with your management team to define a scope of service for each
project awarded that is highly tailored to be exceptionally responsive to your
objectives for that project versus simply executing canned solutions. Our
extensive experience allows us to develop "the right" solution for the City's
needs and bring seasoned judgement to interpreting the results as we review
them with the City's management team.
The government industry represents one of Eide Bailly's largest niche areas —
with more than 1,300 government clients firmwide. We provide services for a
variety of cities, counties, school districts, colleges and universities, fire relief
agencies, housing authorities, state agencies, and tribal entities. Through
serving these clients, our professionals have gained focused expertise in the
government industry and will provide you with insightful advice that aids in
managing the finances of the City.
The firm has more than 275 full-time professionals who participate in our
Government Industry Group. These professionals share information, learn
from others, and stay up to date on industry developments. To gain the
greatest benefit, the knowledge is shared with professionals across the firm.
With the vast array of services we offer our government clients, our team has
the experience and knowledge to address any of your concerns.
As a valued client, you will also experience:
• Personal Service, National Presence: Although the City will have
resources with extensive local experience that enables us to
understand and address the challenges unique to the City, you will
also have access to national resources, including more than 3,000
professionals with diverse skill sets and experiences across the firm.
• Proactive Communication: You can expect your Eide Bailly service
team to keep you informed as our work progresses. We will build
communication protocols into our service delivery to ensure timely
communication resulting in prompt completion of work and
consistent responsiveness.
3 1 eidebailly.corn
9-20
CITY OF NEWPORT BEACH
Timeliness: We understand and will comply with the timing requirements and scope of services of your
request. Your proposed engagement team's experience allows us to promptly address your needs.
Unmatched Client Service is Our Passion: Our history of high staff continuity — significantly higher than
most firms — means you will work consistently with the same team, all of whom have been chosen because of
their experience serving and advising government entities similar to the City. Working with Eide Bailly means all
of your service needs will be addressed within a single, core team, resulting in greater efficiency and scale.
We Want to Work with You
We have developed the following proposal with City of Newport Beach in mind and we will provide timely,
personalized review of internal controls and on -call management consulting services for you. We will also get to
know you and your staff and take the time to understand your specific challenges and opportunities. We deliver
honest and insightful advice beyond what is normally experienced in the public accounting industry. Our tagline,
what inspires you, inspires us, is more than copy to add to marketing materials. We gain energy from those we
serve, which turns into a passionate interest in our clients' success.
The following pages highlight our firm's strengths and solutions that we can provide for the City. We believe this
demonstrates why Eide Bailly merits serious consideration. You will be a highly valued client and we would be
proud to work with City of Newport Beach, building a trusting relationship with your team.
This proposal is valid for a period of 180 days from the submission deadline. Please contact me if you would like
to discuss any aspect of this proposal.
Sincerely,
Bradford Rockabrand, CPA, CIA
Partner
909.755.2712
brockabrand(@eidebaillv.com
4 1 eidebailly.com
9-21
CITY OF NEWPORT BEACH
WHAT INSPIRES YOU, INSPIRES US AT A GLANCE
Firm History and Overview
Eide Bailly has a long history, beginning in 1917 in Fargo, North Dakota when the
accounting firm Bishop, Brissman & Co. opened an office. Our namesake Oliver
Eide started his career there in 1934, and the firm eventually became Eide
Helmeke. Sixteen years later, accountant Charles E. Bailly moved to Fargo in 1950 TOP 25 CPA FIRM
to open an office for Broeker Hendrickson & Co. of St. Paul, Minnesota. In 1978, a
group of partners at Broelker Hendrickson withdrew and created their own firm,
with Bailly as their leader. The firm was called Charles Bailly & Company.
By the 1990s, Charles Bailly and Eide Helmeke were the major accounting players 0
in the region and much of the upper Midwest. Both ranked in the top 50 40+ OFFICES IN U.S. & INDIA
accounting firms in the U.S. and were often competing for the same clients and
talent. Talks began between the two firms, and it was unanimous: they'd join to
become Eide Bailly.
In 2019, Eide Bailly acquired VavrineK, Trine, and Day, one OT CaliTorn!a s largest 375+ PARTNERS
accounting and advisory firms. With that acquisition, Eide Bailly gained a sizable
advisory group that has been providing advisory services to clients throughout
the country for over 20 years.
By embracing change and focusing on innovative ideas, Eide Bailly has grown with
our clients to become one of the top 25 accounting firms in the nation. Eide 3,000+ STAFF MEMBERS
Bailly's Government Advisory Services Department has a deep bench of resources
located throughout the United States working on a variety of projects for state
and local governments.
Your experience will be different than working with other firms because we offer
knowledge and skills backed by more than 100 years of service. Our professionals FOUNDED IN 1917
deliver industry and subject matter expertise resourcefully, ensuring we are
providing services and guidance that directly reflects your needs. Our clients benefit from local, personal service
and, at the same time, enjoy access to more than 3,000 professionals, including 404 partners and principals,
with diverse skillsets and experiences.
5 1 eidebailly.com
9-22
CITY OF NEWPORT BEACH
Legal Form, Ownership and Senior Officials
Eide Bailly is a limited liability partnership, with 404 partners and principals. Below is our firm's management
and Board of Director members. More information can be found on our website: www.eidebailly.com.
Firm Leadersh
Jeremy Hauk, CPA
Managing Partner/CEO
Andy Spillum, CPA
Partner/COO
Mike Astrup, CPA
Partner/CAO
Ross Manson
Principal/Chief Advisory & Industry Officer
Scott Kost
Principal/Chief Technology Officer
Laura Srsich, CPA
Partner/Chief Talent Officer
Jason Delles
Principal/Chief Growth Officer
Brian Bluhm, CPA
Partner/Chief Quality Officer
Brian Callahan, CPA
Partner/National Market Leader
Stacy Erdmann, CPA
Partner/Nationai Tax Leader
Ben Ellingson, CPA
Partner/National Assurance Leader
Jeremy Hauk, CPA
Paul Skeen, CPA
Derrick Larson, CPA
Andy Kaiser, CPA
Jodi Daugherty, CPA
Chad Flanagan, CPA
Jason Oelrich, CPA
Managing Partner/CEO
Partner/ Board Chair
Partner/Vice Chair
Partner
Partner
Partner
Partner
Main Contact
As a Partner with Eide Bailly, Bradford Rockabrand is authorized to answer questions, present this proposal, and
to contractually bind the firm.
Bradford Rockabrand, CPA, CIA Eide Bailly LLP 909.755.2712
Partner 10681 Foothill Blvd., Ste. 300 brockabrand@eidebailly.com
Rancho Cucamonga, CA 91730
Subcontractor
Eide Bailly has the resources to meet the needs of the City and fulfill these services; we will not be utilizing a
subcontractor or outside resource.
Office Location
Eide Bailly has more than 40 offices across the U.S., including eight offices in California. Our Government
Advisory Services Department team are located throughout the United States. We operate in a largely virtual
environment, with team members serving clients throughout the United States regardless of their physical
location. Yet, we recognize that clients value local resources and we therefore strive to assign several team
members to each engagement who are located nearby and are available for on -site meetings during the
engagement should the need arise.
In this case, Bradford Rockabrand is located within driving distance of the City and can be on -site if needed. In
today's virtual world, we are able to serve clients remotely with a level of service that feels as though we are
located next door. Our firm has invested in the technology resources to be effective with a nationwide footprint
while maintaining the relationships normally only found with a local service provider.
6 1 eidebailly.corn
9-23
(ITY OF NEWPORT BEA(H
WE UNDERSTAND GOVERNMENTS
Government Industry Experience
Our firm has more than 70 years of experience providing services to
government entities and our Government Industry Group is made up of
275+ full-time professionals who share information, learn from others and
stay up to date on industry developments. To gain the greatest benefit, the
knowledge is shared with professionals across the firm.
The government industry represents one of Eide Bailly's largest niche areas
— with more than 1,300 government clients firmwide. Through serving
these clients, our professionals have gained focused expertise in the
government industry and will provide you with insightful advice.
Government Advisory Services
Eide Baily's Government Advisory Services Department brings unique
solutions to the firm's clients in a variety of areas. These range from
providing outsourced accounting services and assistance with implementing
new accounting standards, to complex financial management projects. The
Government Advisory Services Department staff includes former California
city finance directors and accounting managers who have the knowledge
and experience that is required for the projects noted in the Scope of
Services. We believe that this sets our firm apart from other consulting firms
in that we provide perspectives that are informed by experience serving in
these roles. In the City's specific request for assistance with internal audit
projects, that experience translates into results that are customized to your
specific circumstances. Not all "best practice recommendations" fit every
city in the same way. We have the experience with different cities to help
Newport Beach craft its best practices.
G 0
70+
YEA6 EXPIR10o,-
1,300+
INDUSTRY CLIENTS
10
275+
DEDICATED STAFF
0
$28.8 BILLION ANNUAL
AVERAGE IN SINGLE AUDITS
Unlike other firms and other teams at Eide Bailly, the Government Advisory I I
Services Department team does not perform audits or provide other assurance services. Our team specializes in
advisory services for state and local government agencies like yours. Our government advisory team is located
throughout the United States with team members based in California, North Carolina, South Dakota, Tennessee,
Texas, and other states.
7 1 eidebailly.com
WE
(ITY OF NEWPORT BEA(H
Services provided by the Government Advisory Services Department include, but are not limited to:
• Outsourced Finance/ Accounting Services 0 Financial Policy Development
• Annual Audit Preparation 0 Complex Financial Analysis
• Budget Development/ Assistance 0 Long -Term Financial Planning
• Fiscal Condition Assessments 0 Financial System Implementations
• Risk Advisory Services 0 Cybersecurity
• Internal Audit 0 Fraud/Forensics
Our team members have a thorough understanding of state and local government finance throughout the
country, providing them with diverse perspectives and experience that is grounded in best practices and the
latest standards, information, and trends. Our team also brings the unique perspectives of individuals who have
previously served as finance directors, controllers, and in other capacities for local governments. Per your RFP,
we confirm that we can perform all of the services requested in the Scope of Services.
We have provided a description of prior experience with similar entities to the City in section References.
Firm Areas of Specialization
Eide Bailly is a full -service CPA firm performing traditional CPA firm services of attest (audits, reviews,
compilations) and tax. We also focus on management advisory services including forensics, cybersecurity and IT,
internal audit, and many other nontraditional services. Our core services offered include the following:
•
Audits
0
Cost Segregation Studies & Fixed Asset
•
Single Audits
Services
•
Reviews
0
Wealth Transition
•
Compilations
0
International Tax
•
Employee Benefit & Retirement Plan Audits
*
Low Income Housing Credits
•
International Financial Reporting Standards
0
R&D Tax Incentives
•
Agreed -Upon Procedures
0
State & Local Tax
•
SEC Services
0
Tax Authority Audit & Correspondence
•
System and Organization Controls (SOC 1, 2
0
Tax Planning & Preparation
& 3)
*
Tax Research
•
Consulting
New Standard Implementation
0
Fraud & Forensic Advisory
•
Internal Audits
0
HR Consulting
•
Technology Consulting
0
Business Valuation
•
Enterprise Risk Management
0
Transaction Advisory
•
Financial Services
8 1 eidebailly.com
9-25
(ITY OF NEWPORT BEAU
Principal, Supervisory and Staff Qualifications and Experience
KNOWLEDGEABLE AND EXPERIENCED
We are passionate about our work — and your success. We have selected professionals for your service team
who are the right fit for your engagement based on their knowledge and experience in the government industry.
You will work with a team that has extensive knowledge and experience in your industry and bring strong
credentials and a desire to work with the City. Below is an overview of the team, with their full profiles on the
following pages. Additional resources are available to call upon, if needed.
I . Key Leadership Overview
Brad has more than 15 years of experience in various aspects of auditing,
compliance, and financial and regulatory reporting via public accounting and
government enterprises. He helps our clients identify organizational strategies
that align their objectives with the complex and evolutionary regulatory
environment.
Brent brings more than 30 years of experience working within finance
departments of large municipalities with complex operating environments. He is
skilled at diagnosing issues faced by finance leaders and bringing constructive
solutions. His years spent with large municipalities has given him extensive
experience issuing and administering all kinds of municipal debt which he
continues to use now for the benefit of his clients. He has served as the
"interim" CFO or finance staff member in multiple engagements with the firm,
bringing solutions and stability to their respective situations and will be the
primary staff working on the City's engagement.
Sam has 11 years of experience in various aspects of auditing, financial
reporting and municipal financial management. Since joining Eide Bailly in 2023,
he has successfully served in multiple challenging client situations which
required him to get an immediate understanding of the current circumstances
and develop a strategy to very quickly achieve the clients' objectives.
9 1 eidebailly.com
am*
(ITY OF NEWPORT BEA(H
BRADFORD RO(KABRAND, CPA, CIA
Partner
INSPIRATION: I find great joy in creating empowering, cross sector partnerships with our
government clients in order to support them in carrying out their mission of public service. By
understanding the complex, evolutionary environment in which governments operate, I can
offer sound advice and provide turnkey solutions that meet their objectives.
909.755.2712 1 brocka bra nd@eidebuilly.com
Brad has more than 15 years of experience in various aspects of auditing,
compliance, and financial and regulatory reporting via public accounting
and government enterprises. He helps our clients identify organizational
strategies that align their objectives with the complex and evolutionary
regulatory environment.
Brad is a hands-on audit and accounting professional with considerable
experience in financial accounting and reporting, internal control
development, policy composition, budgeting, cash flow modeling and long-
term debt use. His professional experience is primarily in municipal finance
policy issues as they pertain to new GASB pronouncements and legislative
changes. Brad prepares in depth financial analysis on the potential impacts
of the changing political landscape in California and assists his clients with
navigating the associated implementation complexities.
Outside of work, Brad is an adjunct professor of public administration and
enjoys traveling, playing golf, experimenting in the kitchen and spending
time with friends and family.
Client Work
Provides advisory services for government organizations navigating the
evolutionary legislative and political landscape. Services include internal
control review and design, policy implementation and monitoring, risk
analysis and related policy design, general ledger maintenance, strategic
management, financial analysis, debt issuance and use, cash /
investment management, and internal and external reporting.
Secured $17,500,000 in private placement debt for a water district in an
adjudicated water basin where there was no established market for
water rights in order for the district to purchase permanent water rights
to serve the community.
Turned around a community services district with a going concern
opinion and no reserves through meticulous budgeting and strict
adherence to accounting practices which now has nine consecutive
years of unmodified audit opinions, no findings, sufficient reserves and
current administrative and financial policy.
10 1 eidebailly.com
Memberships
American Institute of Certified
Public Accountants
Government Finance Officers
Association
California Society of Municipal
Finance Officers
Design ation/Licen sure s
Certified Public Accountant
Certified Internal Auditor
Education
Doctor of Public Administration -
University of La Verne, California
Master of Business
Administration — Saint Louis
University, Missouri
Bachelor of Arts, Business —
Principia College, Elsah, Illinois
9-27
(ITY OF NEWPORT BEAU
BRENT MASON, CPA
Senior Manager
INSPIRATION: I enjoy helping other people succeed! Drawing on over 30 years of
experience developing specific solutions to complex situations in which cities and other
agencies find themselves, and successfully implementing a solution, gives me great
satisfaction.
909.755.2692 1 bmason@eideboilly.com
Based in San Antonio, Texas, Brent brings more than 30 years of
experience working within finance departments of large
municipalities with complex operating environments. He is skilled at
diagnosing issues faced by finance leaders and bringing constructive
solutions. His years spent working for large cities have given him
extensive experience in a wide range of subjects. As Finance Director
for two large municipalities, Brent managed budgets of more than $1
billion and investment portfolios of almost that same amount. With
the large municipality where he spent more than 22 years of his
career, he led financing teams issuing over a billion dollars in bonds
representing all kinds of municipal debt. He uses this varied
experience now to primarily serve senior -level leadership with tasks
ranging from CFO -type duties to smaller, specific projects requested
by the client.
When you work with Brent, you will discover he spends the necessary
time up front with each client to understand the circumstances
around whatever situation requires attention. He then works
collaboratively with you to design a tailored response that effectively
resolves the outstanding issue.
Away from work, Brent spends much of his free time assisting his wife
caring for their nine adopted special needs children, and he
periodically enjoys the great outdoors golfing with friends.
(lient Work
Experienced with a wide variety of engagements, ranging from full
service financial operations to interim CFO work to other special
projects/analyses requested by clients, including issuing and
managing debt. Currently specializing in performing arbitrage
calculations for various agencies.
Mentors both external (client) staff and internal (Eide Bailly) staff,
helping each grow as they execute their responsibilities.
111 eidebailly.com
Memberships
American Institute of Certified
Public Accountants
Government Finance Officers
Association
Government Finance Officers
Association of Texas
California Society of Municipal
Finance Officers
Designation/Licensures
Certified Public Accountant
Education
Bachelor of Science, Accounting
— Biola University, La Mirada, CA
(ommunity
Biola University School of
Business, Former Adjunct
Instructor
California Society of Municipal
Finance Officers, Past Board
Member
SCAQMD Investment Oversight
Committee, Member
9-28
(ITY OF NEWPORT BEA(H
SAM SINGERY, CPA
Manager
INSPIRATION: I enjoy applying the skills I've developed as an auditor and
government finance officer to help my clients succeed. I have a passion for coming
alongside clients to provide solutions that enable them to efficiently and effectively
meet the needs of their constituents and communities.
325.437.4100 1 ssingery@eidebailly.com
Based in San Antonio, Texas, Sam has 11 years of experience in
various aspects of auditing, financial reporting and municipal financial
management. He began his career in public accounting, where he
conducted and supervised audits of local governments. More
recently, Sam spent the last five years as the Accounting Manager and
Assistant Finance Director for small and medium-sized cities,
overseeing the daily operations of the finance department in addition
to coordinating all required audits, preparing financial and regulatory
reports, developing enhanced policies and procedures and
implementing new Governmental Accounting Standards Board
pronouncements.
When you work with Sam, you can expect a thorough and tailored
approach. His range of experience enables him to assist clients with a
wide variety of challenges and provide recommendations and results
to help his clients successfully achieve their desired outcomes.
Outside of work, Sam enjoys reading, golfing and spending time with
his wife and five children.
Client Work
Expertise includes year-end close and audit assistance, financial
statement preparation, new Government Accounting Standards Board
standard implementations and budget development.
12 1 eidebailly.com
Memberships
Government Finance Officers
Association
Government Finance Officers
Association of Texas
Design ation/Licen su res
Certified Public Accountant
Education
Bachelor of Science, Business
Administration, Accounting —
Biola University, La Mirada, Calif.
9-29
CITY OF NEWPORT BEA(H
QUALIFIED TO MEET THE CITY'S NEEDS AND GOALS
From the City's RFP, we understand that the City is requesting a professional firm to provide internal controls
and to provide on -call management consulting services. Eide Bailly has the qualifications and the resources to
perform all of the services requested. We have thoroughly reviewed the RFP Scope of Services and our approach
to services is outlined below.
The RFP indicates that the City has three specific projects they intend to award in the new calendar year, and
that they may be awarded to one or more firms which have competed successfully in this RFP process. The Eide
Bailly Government Advisory Services Department team has grown substantially in recent years. Collectively, they
have performed a wide variety of projects for cities, primarily in California, but increasingly in cities throughout
the United States, as well. These projects range from more routine accounting support services and year end
audit preparation work to a variety of complex specialty projects leveraging the CFO experiences of the team
members.
Recent projects include budget analysis work and chart of accounts simplification and alignment with state
reporting requirements for Douglas County, Nevada; a financial reporting analysis project for the City of Perris,
California; procurement and grant administration policies for a California city and a city in North Dakota; and a
multi -purpose project for a city in Montana involving [within a matter of weeks] completing their budget process
and developing/filing their ad valorem tax rates. Although these projects are actual examples of projects
completed by Government Advisory Services team members, the nature of the staff we have hired is such that
their depth of experience is appropriate to assist with nearly any type of project that comes up in a city finance
department, as that is what they did themselves for their respective cities during their tenures at various cities.
The staff members assigned to the City's engagement are former finance directors, assistant finance directors,
and accounting managers for small, medium, and large cities in California. Other team members have served as
contract staff in these same roles. Specific experience is with full -service cities that have provided police, fire,
water and wastewater services to their residents. Collectively, the team has a diverse breadth of experience it
would bring to each of the projects that may be awarded.
Engagement Timing
We understand your requested timeline and are committed to meeting your deadlines. We will work closely
with your team through the planning stages to clearly define expectations and the items required from your
team in order to facilitate eff icient services to enable us to meet your deadline. From the RFP, we understand
that the City would like fieldwork to begin in January, with the final report issued within 90 days of
commencement of fieldwork.
13 1 eidebailly.com
9M
"'. � I
t
The Right Choi(e for City of Newport Beadi
WE WANT TO WORK WITH YOU
To us, work is not just work; we see it as a chance to help you solve problems, achieve goals, and pursue
passions. After thoughtfully reviewing your needs and taking the time to understand your business, we think
we're the best fit for this opportunity.
We can connect you with the knowledge, resources, and solutions that help bring confidence to your business
decisions. We want to work with you!
If you have questions or would like additional information, do not hesitate to contact us. We want to make sure
you have everything you need to make your decision.
Bradford Rockabrand, CPA, CIA
Partner
909.755.2712
brockabrand@eidebailly.com
We Want to Work with You
We are driven to help clients take on the now and the next with inspired ideas, solutions and results. We look
forward to working with you.
14 1 eidebailIV.corn
9-31
I
Caring for our external and internal clients with a passion to go the extra mile.
Respecting our peers and their individual contributions.
Conducting ourselves with the highest level of integrity at all times.
Trusting and supporting one another.
Being accountable for the overall success of the Firm,
not just individual or office success.
Stretching ourselves to be innovative and creative, while managing the related risks.
Recognizing the importance of maintaining a balance between work and home life.
Promoting positive working relationships.
And, most of all, enjoying our jobs ... and having fun!
EideBailly.
What inspires you, inspires us.
eidebuilly.com
9-32
EXHIBIT B
SCHEDULE OF BILLING RATES
Eide Bailly, LLP Page B-1 9-33
EXHIBIT B
SCHEDULE OF BILLING RATES
Consulting services will be provided at the hourly rates listed below. These rates are
current as of August 1, 2023. Each August, hourly rates are adjusted consistent with the
consumer price index for the Orange County region.
Position Titles
Partner
Hourly Rate
7371
Director
$350
Senior Manager
$318
Manager
$265
Supervisor
$235
Senior Associate
$201
Associate
$159
Out -of -Pocket Costs: Travel costs are not anticipated to be incurred for this engagement,
but if the City requests a team member to be on -site, travel costs would be passed through
to the City. All travel costs must be pre -approved by the City in writing before the costs
are incurred. Other miscellaneous out-of-pocket costs (e.g., mileage) are included within
the hourly rates noted above.
ME
EXHIBIT C
INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES
Provision of Insurance. Without limiting Consultant's indemnification of City,
and prior to commencement of Work, Consultant shall obtain, provide and
maintain at its own expense during the term of this Contract, policies of
insurance of the type and amounts described below and in a form satisfactory
to City. Consultant agrees to provide insurance in accordance with
requirements set forth here. If Consultant uses existing coverage to comply and
that coverage does not meet these requirements, Consultant agrees to amend,
supplement or endorse the existing coverage.
2. Acceptable Insurers '. All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders'
Rating of A- (or higher) and Financial Size Category Class V11 (or larger) in
accordance with the latest edition of Best's Key Rating Guide, unless otherwise
approved by the City's Risk Manager.
3. Coverage Requirements.
A. Workers' Compensation Insurance. Consultant shall maintain Workers'
Compensation Insurance providing statutory beriefits and Employers
Liability Insurance with limits of at least one million dollars ($1,000,000)
each employee for bodily injury by accident and each employee for
bodily injury by disease in accordance with the laws of the State of
California.
Consultant shall submit to City, along with the certificate of insurance, a
Waiver of Subrogation endorsement in favor of City, its City Council,
boards and commissions, officers, agents, volunteers and employees.
B. General Liability Insurance. Consultant shall maintain commercial
general liability insurance, and if necessary excess/umbrella liability
insurance, with coverage at least as broad as provided by Insurance
Services Office form CG 00 01, in an amount not less than two million
dollars ($2,000,000) per occurrence, four million dollars ($4,000,000)
general aggregate. The policy shall cover liability arising from premises,
operations, personal and advertising injury, and liability assumed, under
an insured contract (including the tort liability of another assumed in a
business contract).
C. Automobile Liability Insurance. Consultant shall maintain automobile
insurance at least as broad as Insurance Services Office form CA 00 08
and 09 covering bodily injury and property damage for all activities of
Consultant arising out of or in connection with Work to be performed
under this Contract, including coverage for any hired, non -owned or
Eide Bailly, LLP I . Page C-1 9-35
rented vehicles, in an amount not less than one million dollars
($1,000,000) combined single limit for each accident.
D. Professional Liability (Errors & Omissions) Insurance. Consultant shall
maintain professional liability insurance that covers the Services to be
performed in connection with this Agreement, in the minimum amount
of two million dollars ($2,000,000) per claim and four million dollars
($4,000,000) in the aggregate. Any policy inception date, continuity
date, or retroactive date must be before the Effective Date of this
Agreement and Consultant agrees to maintain continuous coverage
through a period no less than three years after completion of the
Services required by this Agreement.
E. Cyber Liability Insurance. Consultant shall maintain cyber liability
insurance in an amount not less than one million dollars ($1,000,000)
per claim and annual aggregate, covering (1) network security and
privacy risks, including unauthorized access, failure of security, breach
of privacy perils, wrongful disclosure, collection, or negligence in the
handling of confidential information, privacy perils, including coverage
for related regulatory defense and penalties; (2) data breach expenses
payable whether incurred by City or Consultant, including consumer
notification, whether or not required by law, computer forensic
investigations, public relations and crisis management firm fees, credit
file or identity monitoring or remediation services in the performance of
services for City or on behalf of City hereunder.
F. Excess/Umbrella Liability Insurance. If any Excess or Umbrella Liability
policies are used to meet, the limits of liability required by this contract,
then said policies shall -be "following form" of the underlying policy
coverage, terms, conditions, and provisions and shall meetall of the
insurance requirements stated in this contract, including, but not limited
to, the additional insured and primary & non-contributory insurance
requirements stated herein. No'insurance policies maintained by the
City, whether primary or excess,.and which also apply to a loss covered
hereunder, shall be called upon to contribute to a loss until the
Consultant's primary. and excess/umbre.11a liability policies are
exhausted.
4. Other Insurance Requirements. . The policies are to contain, or be endorsed
to contain, the following provisions:
A. Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this Contract shall be endorsed to waive subrogation against
City, its City Council, boards and commissions, officers, agents,
volunteers and employees, or shall specifically allow Consultant or
others providing insurance evidence in compliance with these
requirements to waive their right of recovery prior to a loss. Consultant
hereby waives its own right of recovery against City, and shall require
Eide Bailly, LLP Page C-2
9-36
similar written express waivers and insurance clauses from each of its
subcontractors.
B. Additional Insured Status. All liability policies including general liability,
products and completed operations, excess/umbrella liability, pollution
liability, and automobile liability, if required, but not including professional
liability or cyber liability, shall provide or be endorsed to provide that City,
its City Council, boards and commissions, officers, agents, volunteers
and employees shall be included as additional insureds under such
policies.
C. Primary and Non-Contributo . Consultant's insurance coverage,
except for Professional Liability and Cyber Liability, shall be primary
insurance and/or the primary source of recovery with respect to the City,
its City Council, boards and commissions, officers, agents, volunteers
and employees. All liability coverage shall apply on a primary basis and
shall not require contribution from any insurance or self-insurance
maintained by City.
D. Notice of Cancellation. All policies, except for Professional Liability and
Cyber Liability, shall provide City with thirty (30) calendar days' notice of
cancellation or nonrenewal of coverage (except for nonpayment for
which ten (10) calendar days' notice is required) for each required
coverage.
5. Additional A-greements Between the Parties. The parties hereby agree to
the following:
A. Evidence of Insurance. Consultant shall provide certificates of insurance
to City as evidence of the insurance coverage required herein, along
with a waiver of subrogation endorsement for workers' compensation
and other endorsements as specified herein for each coverage. All of
the e xecuted documents referenced in this Contract must be returned
to City within ten (10) regular City business days after the date on the
"Notification of Award". Insurance certificates and endorsements must
be approved by City's Risk Manager prior to commencement of
performance. Current certification of insurance shall be kept on file with
City at all times during the term of this Contract. The certificates and
endorsements for each insurance policy shall be signed by a person
authorized by that insurer to bind coverage on its behalf. At least fifteen
(15) days prior to the expiration of any such policy, Consultant shall
endeavor to provide evidence of insurance showing that such insurance
coverage has been renewed or extended shall be filed with the City. If
such coverage is cancelled or reduced, Consultant shall, within ten (10)
days after receipt of written notice of such cancellation or reduction of
coverage, file with the City evidence of insurance showing that the
required insurance has been reinstated or has been provided through
another insurance company or companies.
Eide Bailly, LLP Page C-3 9-37
B. City's Right to Revise Requirements. 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 Consultant ninety (90) calendar days'
advance written notice of such change. If such change results in
substantial additional cost to Consultant, City and Consultant may
renegotiate Consultant's compensation.
C. Right to Review Subcontracts. Consultant agrees that upon request, all
agreements with subcontractors or others with whom Consultant enters
into contracts with on behalf of City will be submitted to City for review.
Failure of City to request copies of such agreements will not impose any
liability on City, or its employees. Consultant shall require and verify that
all subcontractors maintain insurance meeting all the requirements
siated herein, and Consultant shall ensure that City is an additional
insured on insurance required from subcontractors. For CGL coverage,
subcontractors shall provide coverage with a format at least as broad as
CG 20 38 04 13.
D. Enforcement of Agreement Provisions. Consultant acknowledges and
agrees that any actual or alleged failure on the part of City to inform
Consultant of non-compliance with any requirement imposes no
additional obligations on City nor does it waive any rights hereunder.
E. Requirements not Limiting. Requirements -of specific coverage features
or limits contained in this Section are not intended as a limitation on
coverage, limits or other requirements, or a waiver of any coverage
normally provided by any insurance. 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 all inclusive,
or to the exclusion of other coverage, or a waiver of any type. If the
Consultant maintains higher limits than the minimums shown above, the
City requires and shall be entitled to coverage for higher limits
maintained by the Consultant. Any available proceeds in excess of
specified minimum limits of insurance and coverage shall be available
to the City.
F. City Remedies for Non -Compliance. If Consultant or any subconsultant
fails to provide and maintain insurance as required herein, then: City
shall have the right but not the obligation, to purchase such insurance, to
terminate this Agreement, or to suspend Consultant's right to proceed
until proper evidence of insurance is provided. Any amounts paid by
City shall, at City's sole option, be deducted from amounts payable to
Consultant or reimbursed by Consultant upon demand.
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G. Timely Notice of Claims. Consultant shall give City prompt and timely
notice of claims made or suits instituted that arise out of or result from
Consultant's performance underthis Contract that involve or may involve
coverage under any of the required liability policies. City assumes no
obligation or liability by such notice.
H. Consultant's Insurance. Consultant shall also procure and maintain, at
its own cost and expense, any additional kinds of insurance, which in its
own judgment may be necessary for its proper protection and
prosecution of the Work.
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Attachment B
Professional Services Agreement with The Pun Group LLP
N M10
ON -CALL PROFESSIONAL SERVICES AGREEMENT
WITH THE PUN GROUP LLP FOR
ON -CALL CONSULTING SERVICES RELATED TO THE CITY'S INTERNAL
AUDIT PROGRAM
THIS ON -CALL PROFESSIONAL SERVICES AGREEMENT ("Agreement") is
made and entered into as of this 9th day of July, 2024 ("Effective Date"), by and between
the CITY OF NEWPORT BEACH, a California municipal corporation and charter city
("City"), and THE PUN GROUP, LLP, a California Limited Liability Partnership
("Consultant"), whose address is 200 E. Sandpointe Ave., Suite 600, Santa Ana,
California 92707, and is made with reference to the following:
RECITALS
A. City is a municipal corporation duly organized and validly existing under the laws
of the State of California with the power to carry on its business as it is now being
conducted under the statutes of the State of California and the Charter of City.
B. City desires to engage Consultant to On -call Consulting Services Related to the
City's Internal Audit Program ("Project").
C. Consultant possesses the skill, experience, ability, background, certification and
knowledge to provide the professional services described in this Agreement.
D. City has solicited and received a proposal from Consultant, has reviewed the
previous experience and evaluated the expertise of Consultant, and desires to
retain Consultant to render professional services under the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties
as follows:
1 . TERM
The term of this Agreement shall commence on the Effective Date, and shall
terminate on June 30, 2029, unless terminated earlier as set forth herein.
2. SERVICES TO BE PERFORMED
2.1 Consultant shall perform the on -call services described in the Scope of
Services attached hereto as Exhibit A and incorporated herein by reference ("Services"
or "Work"). Upon written request from the Project Administrator as defined herein,
Consultant shall provide a letter proposal for Services requested by the City (hereinafter
referred to as the "Letter Proposal"). The Letter Proposal shall include the following:
2.1.1 A detailed description of the Services to be provided;
MIA
2.1.2 The position of each person to be assigned to perform the Services,
and the name of the individuals to be assigned, if available;
and
2.1.3 The estimated number of hours and cost to complete the Services;
2.1.4 The time needed to finish the specific project.
2.2 No Services shall be provided until the Project Administrator has provided
written acceptance of the Letter Proposal. Once authorized to proceed, Consultant shall
diligently perform the duties in the approved Letter Proposal.
3. TIME OF PERFORMANCE
3.1 Time is of the essence in the performance of Services under this Agreement
and Consultant shall perform the Services in accordance with the schedule included in
Exhibit A and the Letter Proposal. In the absence of a specific schedule, the Services
shall be performed to completion in a diligent and timely manner. The failure by
Consultant to strictly adhere to the schedule set forth in Exhibit A and the Letter Proposal,
if any, or perform the Services in a diligent and timely manner may result in termination
of this Agreement by City.
3.2 Notwithstanding the foregoing, Consultant shall not be responsible for
delays due to causes beyond Consultant's reasonable control. However, in the case of
any such delay in the Services to be provided for the Project, each party hereby agrees
to provide notice within two (2) calendar days of the occurrence causing the delay to the
other party so that all delays can be addressed.
3.3 Consultant shall submit all requests for extensions of time for performance
in writing to the Project Administrator as defined herein not later than ten (10) calendar
days after the start of the condition that purportedly causes a delay. The Project
Administrator shall review all such requests and may grant reasonable time extensions
for unforeseeable delays that are beyond Consultant's control.
3.4 For all time periods not specifically set forth herein, Consultant shall
respond in the most expedient and appropriate manner under the circumstances, by
hand -delivery or mail.
4. COMPENSATION TO CONSULTANT
4.1 City shall pay Consultant for the Services on a time and expense not -to -
exceed basis in accordance with the provisions of this Section and the Letter Proposal
and the Schedule of Billing Rates attached hereto as Exhibit B and incorporated herein
by reference. Consultant's compensation for all Work performed in accordance with this
Agreement, including all reimbursable items and subconsultant fees, shall not exceed
Seven Hundred Fifty Thousand Dollars and 001100 ($750,000.00), without prior written
authorization from City. No billing rate changes shall be made during the term of this
Agreement without the prior written approval of City.
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4.2 Consultant shall submit monthly invoices to City describing the Work
performed the preceding month. Consultant's bills shall include the name of the person
who performed the Work, a brief description of the Services performed and/or the specific
task in the Scope of Services to which it relates, the date the Services were performed,
the number of hours spent on all Work billed on an hourly basis, and a description of any
reimbursable expenditures. City shall pay Consultant no later than thirty (30) calendar
days after approval of the monthly invoice by City staff.
4.3 City shall reimburse Consultant only for those costs or expenses specifically
identified in Exhibit B to this Agreement and the Letter Proposal or specifically approved
in writing in advance by City.
4.4 Consultant shall not receive any compensation for Extra Work performed
without the prior written authorization of City. As used herein, "Extra Work" means any
Work that is determined by City to be necessary for the proper completion of the Project,
but which is not included within the Scope of Services and which the parties did not
reasonably anticipate would be necessary at the execution of this Agreement.
Compensation for any authorized Extra Work shall be paid in accordance with the
Schedule of Billing Rates as set forth in Exhibit B and the Letter Proposal.
5. PROJECT MANAGER
5.1 Consultant shall designate a Project Manager, who shall coordinate all
phases of the Project. This Project Manager shall be available to City at all reasonable
times during the Agreement term. Consultant has designated Kenneth H. Pun to be its
Project Manager. Consultant shall not remove or reassign the Project Manager or any
personnel listed in Exhibit A or assign any new or replacement personnel to the Project
without the prior written consent of City. City's approval shall not be unreasonably
withheld with respect to the removal or assignment of non -key personnel.
5.2 Consultant, at the sole discretion of City, shall remove from the Project any
of its personnel assigned to the performance of Services upon written request of City.
Consultant warrants that it will continuously furnish the necessary personnel to complete
the Project on a timely basis as contemplated by this Agreement.
5.3 If Consultant is performing inspection services for City, the Project Manager
and any other assigned staff shall be equipped with a cellular phone to communicate with
City staff. The Project Manager's cellular phone number shall be provided to City.
6. ADMINISTRATION
This Agreement will be administered by the Finance Department. City's Finance
Director or designee shall be the Project Administrator and shall have the authority to act
for City under this Agreement. The Project Administrator shall represent City in all matters
pertaining to the Services to be rendered pursuant to this Agreement.
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7. CITY'S RESPONSIBILITIES
To assist Consultant in the execution of its responsibilities under this Agreement,
City agrees to provide access to and upon request of Consultant, one copy of all existing
relevant information on file at City. City will provide all such materials in a timely manner
so as not to cause delays in Consultant's Work schedule.
8. STANDARD OF CARE
8.1 All of the Services shall be performed by Consultant or under Consultant's
supervision. Consultant represents that it possesses the professional and technical
personnel required to perform the Services required by this Agreement, and that it will
perform all Services in a manner commensurate with community professional standards
and with the ordinary degree of skill and care that would be used by other reasonably
competent practitioners of the same discipline under similar circumstances. All Services
shall be performed by qualified and experienced personnel who are not employed by City.
By delivery of completed Work, Consultant certifies that the Work conforms to the
requirements of this Agreement, all applicable federal, state and local laws, and legally
recognized professional standards.
8.2 Consultant represents and warrants to City that it has, shall obtain, and shall
keep in full force and effect during the term hereof, at its sole cost and expense, all
licenses, permits, qualifications, insurance and approvals of whatsoever nature that is
legally required of Consultant to practice its profession. Consultant shall maintain a City
of Newport Beach business license during the term of this Agreement.
8.3 Consultant shall not be responsible for delay, nor shall Consultant be
responsible for damages or be in default or deemed to be in default by reason of strikes,
lockouts, accidents, acts of God, or the failure of City to furnish timely information or to
approve or disapprove Consultant's Work promptly, or delay or faulty performance by
City, contractors, or governmental agencies.
9. HOLD HARMLESS
9.1 To the fullest extent permitted by law, Consultant shall indemnify, defend
and hold harmless City, its City Council, boards and commissions, officers, agents,
volunteers, employees and any person or entity owning or otherwise in legal control of
the property upon which Consultant performs the Project and/or Services contemplated
by this Agreement (collectively, the "Indemnified Parties") from and against any and all
claims (including, without limitation, claims for bodily injury, death or damage to property),
demands, obligations, damages, actions, causes of action, suits, losses, judgments,
fines, penalties, liabilities, costs and expenses (including, without limitation, attorneys'
fees, disbursements and court costs) of every kind and nature whatsoever (individually,
a Claim; collectively, "Claims"), which may adse from or in any manner relate (directly or
indirectly) to any breach of the terms and conditions of this Agreement, any Work
performed or Services provided under this Agreement including, without limitation,
defects in workmanship or materials or Consultant's presence or activities conducted on
The Pun Group LLP Page 4 9-44
the Project (including the negligent, reckless, and/or willful acts, errors and/or omissions
of Consultant, its principals, officers, agents, employees, vendors, suppliers, consultants,
subcontractors, anyone employed directly or indirectly by any of them or for whose acts
they may be liable, or any or all of them).
9.2 Notwithstanding the foregoing, nothing herein shall be construed to require
Consultant to indemnify the Indemnified Parties from any Claim arising from the sole
negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall
be construed as authorizing any award of attorneys' fees in any action on or to enforce
the terms of this Agreement. This indemnity shall apply to all claims and liability
regardless of whether any insurance policies are applicable. The policy limits do not act
as a limitation upon the amount of indemnification to be provided by Consultant.
10. INDEPENDENT CONTRACTOR
It is understood that City retains Consultant on an independent contractor basis
and Consultant is not an agent or employee of City. The manner and means of
conducting the Work are under the control of Consultant, except to the extent they are
limited by statute, rule or regulation and the expressed terms of this Agreement. No civil
service status or other right of employment shall accrue to Consultant or its employees.
Nothing in this Agreement shall be deemed to constitute approval for Consultant or any
of Consultant's employees or agents, to be the agents or employees of City. Consultant
shall have the responsibility for and control over the means of performing the Work,
provided that Consultant is in compliance with the terms of this Agreement. Anything in
this Agreement that may appear to give City the right to direct Consultant as to the details
of the performance of the Work or to exercise a measure of control over Consultant shall
mean only that Consultant shall follow the desires of City with respect to the results of the
Services.
11. COOPERATION
Consultant agrees to work closely and cooperate fully with City's designated
Project Administrator and any other agencies that may have jurisdiction or interest in the
Work to be performed. City agrees to cooperate with the Consultant on the Project.
12. CITY POLICY
Consultant shall discuss and review all matters relating to policy and Project
direction with City's Project Administrator in advance of all critical decision points in order
to ensure the Project proceeds in a manner consistent with City goals and policies.
13. PROGRESS
Consultant is responsible for keeping the Project Administrator informed on a
regular basis regarding the status and progress of the Project, activities performed and
planned, and any meetings that have been scheduled or are desired.
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14. INSURANCE
Without limiting Consultant's indemnification of City, and prior to commencement
of Work, Consultant shall obtain, provide, and maintain at its own expense during the
term of this Agreement or for other periods as specified in this Agreement, policies of
insurance of the type, amounts, terms, and conditions described in the Insurance
Requirements attached hereto as Exhibit C, and incorporated herein by reference.
15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
Except as specifically authorized under this Agreement, the Services to be
provided under this Agreement shall not be assigned, transferred contracted or
subcontracted out without the prior written approval of City. Any of the following shall be
construed as an assignment: The sale, assignment, transfer or other disposition of any
of the issued and outstanding capital stock of Consultant, or of the interest of any general
partner or joint venturer or syndicate member or cotenant if Consultant is a partnership or
joint -venture or syndicate or co -tenancy, which shall result in changing the control of
Consultant. Control means fifty percent (50%) or more of the voting power or twenty-five
percent (25%) or more of the assets of the corporation, partnership or joint -venture.
16. SUBCONTRACTING
The subcontractors authorized by City, if any, to perform Work on this Project are
identified in Exhibit A and the Letter Proposal. Consultant shall be fully responsible to
City for all acts and omissions of any subcontractor. Nothing in this Agreement shall
create any contractual relationship between City and any subcontractor nor shall it create
any obligation on the part of City to pay or to see to the payment of any monies due to
any such subcontractor other than as otherwise required by law. City is an intended
beneficiary of any Work performed by the subcontractor for purposes of establishing a
duty of care between the subcontractor and City. Except as specifically authorized herein,
the Services to be provided under this Agreement shall not be otherwise assigned,
transferred, contracted, or subcontracted out without the prior written approval of City.
17. OWNERSHIP OF DOCUMENTS
17.1 Each and every report, draft, map, record, plan, document and other writing
produced, including but not limited to, websites, blogs, social media accounts and
applications (hereinafter "Documents"), prepared or caused to be prepared by Consultant,
its officers, employees, agents and subcontractors, in the course of implementing this
Agreement, shall become the exclusive property of City, and City shall have the sole right
to use such materials in its discretion without further compensation to Consultant or any
other party. Additionally, all material posted in cyberspace by Consultant, its officers,
employees, agents and subcontractors, in the course of implementing this Agreement,
shall become the exclusive property of City, and City shall have the sole �ght to use such
materials in its discretion without further compensation to Consultant or any other party.
Consultant shall, at Consultant's expense, provide such Documents, including all logins
and password information to City upon prior written request.
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17.2 Documents, including drawings and specifications, prepared by Consultant
pursuant to this Agreement are not intended or represented to be suitable for reuse by
City or others on any other project. Any use of completed Documents for other projects
and any use of incomplete Documents without specific written authorization from
Consultant will be at City's sole risk and without liability to Consultant. Further, any and
all liability arising out of changes made to Consultant's deliverables under this Agreement
by City or persons other than Consultant is waived against Consultant, and City assumes
full responsibility for such changes unless City has given Consultant prior notice and has
received from Consultant written consent for such changes.
17.3 All written documents shall be transmitted to City in formats compatible with
Microsoft Office and/or viewable with Adobe Acrobat.
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.
21. WITHHOLDINGS
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
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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.
23. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
City reserves the right to employ other Consultants in connection with the Project.
24. CONFLICTS OF INTEREST
24.1 Consultant or its employees may be subject to the provisions of the
California Political Reform Act of 1974 (the "Act") and/or Government Code §§ 1090 et
seg., which (1) require such persons to disclose any financial interest that may
foreseeably be materially affected by the Work performed under this Agreement, and (2)
prohibit such persons from making, or participating in making, decisions that will
foreseeably financially affect such interest.
24.2 If subject to the Act and/or Government Code §§ 1090 et seg., Consultant
shall conform to all requirements therein. Failure to do so constitutes a material breach
and is grounds for immediate termination of this Agreement by City. Consultant shall
indemnify and hold harmless City for any and all claims for damages resulting from
Consultant's violation of this Section.
25. NOTICES
25.1 All notices, demands, requests or approvals, including any change in
mailing address, to be given under the terms of this Agreement shall be given in writing,
and conclusively shall be deemed served when delivered personally, or on the third
business day after the deposit thereof in the United States mail, postage prepaid, first-
class mail, addressed as hereinafter provided.
25.2 All notices, demands, requests or approvals from Consultant to City shall
be addressed to City at:
Attn: Finance Director
Finance Department
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
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25.3 All notices, demands, requests or approvals from City to Consultant shall
be addressed to Consultant at:
Attn: Kenneth H. Pun
The Pun Group LLP
200 E. Sandpointe Ave., Suite 600
Santa Ana, CA 92707
26. CLAIMS
Unless a shorter time is specified elsewhere in this Agreement, before making its
final request for payment under this Agreement, Consultant shall submit to City, in writing,
all claims for compensation under or arising out of this Agreement. Consultant's
acceptance of the final payment shall constitute a waiver of all claims for compensation
under or arising out of this Agreement except those previously made in writing and
identified by Consultant in writing as unsettled at the time of its final request for payment.
Consultant and City expressly agree that in addition to any claims filing requirements set
forth in the Agreement, Consultant shall be required to file any claim Consultant may have
against City in strict conformance with the Government Claims Act (Government Code
sections 900 et seq.).
27. TERMINATION
27.1 In the event that either party fails or refuses to perform any of the provisions
of this Agreement at the time and in the manner required, that party shall be deemed in
default in the performance of this Agreement. If such default is not cured within a period
of two (2) calendar days, or if more than two (2) calendar days are reasonably required
to cure the default and the defaulting party fails to give adequate assurance of due
performance within two (2) calendar days after receipt of written notice of default,
specifying the nature of such default and the steps necessary to cure such default, and
thereafter diligently take steps to cure the default, the non -defaulting party may terminate
the Agreement forthwith by giving to the defaulting party written notice thereof.
27.2 Notwithstanding the above provisions, City shall have the right, at its sole
and absolute discretion and without cause, of terminating this Agreement at any time by
giving no less than seven (7) calendar days' prior written notice to Consultant. In the
event of termination under this Section, City shall pay Consultant for Services
satisfactorily performed and costs incurred up to the effective date of termination for which
Consultant has not been previously paid. On the effective date of termination, Consultant
shall deliver to City all reports, Documents and other information developed or
accumulated in the performance of this Agreement, whether in draft or final form.
28. STANDARD PROVISIONS
28.1 Recitals. City and Consultant acknowledge that the above Recitals are true
and correct and are hereby incorporated by reference into this Agreement.
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28.2 Compliance with all Laws. Consultant shall, at its own cost and expense,
comply with all statutes, ordinances, regulations, and requirements of all governmental
entities, including federal, state, county or municipal, whether now in force or hereinafter
enacted. In addition, all Work prepared by Consultant shall conform to applicable City,
county, state and federal laws, rules, regulations and permit requirements and be subject
to approval of the Project Administrator and City.
28.3 Waiver. A waiver by either party of any breach, of any term, covenant or
condition contained herein shall not be deemed to be a waiver of any subsequent breach
of the same or any other term, covenant or condition contained herein, whether of the
same or a different character.
28.4 Integrated Contract. This Agreement represents the full and complete
understanding of every kind or nature whatsoever between the parties hereto, and all
preliminary negotiations and agreements of whatsoever kind or nature are merged herein.
No verbal agreement or implied covenant shall be held to vary the provisions herein.
28.5 Conflicts or Inconsistencies. In the event there are any conflicts or
inconsistencies between this Agreement and the Scope of Services or any other
attachments attached hereto, the terms of this Agreement shall govern.
28.6 Interpretation. The terms of this Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or
against either party by reason of the authorship of the Agreement or any other rule of
construction which might otherwise apply.
28.7 Amendments. This Agreement may be modified or amended only by a
written document executed by both Consultant and City and approved as to form by the
City Attorney.
28.8 Severability. If any term or portion of this Agreement is held to be invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement shall continue in full force and effect.
28.9 Controlling Law and Venue. The laws of the State of California shall govern
this Agreement and all matters relating to it and any action brought relating to this
Agreement shall be adjudicated in a court of competent jurisdiction in the County of
Orange, State of California.
28.10 Equal Opportunity Employment. Consultant represents that it is an equal
opportunity employer, and it shall not discriminate against any subcontractor, employee
or applicant for employment because race, religious creed, color, national origin,
ancestry, physical handicap, medical condition, marital status, sex, sexual orientation,
age or any other impermissible basis under law.
28.11 No Attorneys' Fees. In the event of any dispute or legal action arising under
this Agreement, the prevailing party shall not be entitled to afforneys'fees.
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28.12 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original and all of which together shall
constitute one (1) and the same instrument.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
B�Aaron C. Harp
City Attorney ;/q
�1,2 �
ATTEST:
Date -
in
Leilani 1. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
Bv:
Will O'Neill
Mayor
CONSULTANT: The Pun Group LLP, a
California Limited Liability Partnership
Date:
Bw
Kenneth H. Pun
Founder & Managing Partner
[END OF SIGNATURES]
Attachments: Exhibit A — Scope of Services
Exhibit B — Schedule of Billing Rates
Exhibit C — Insurance Requirements
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EXHIBIT A
SCOPE OF SERVICES
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EXHIBIT A
SCOPE OF SERVICES
The Director of Finance, or designee, shall establish a project -specific timeline and scope
of work. It is generally expected that fieldwork will commence in January and the
consultant shall render the final report within 90 days of the commencement of fieldwork,
unless otherwise specified by the Director of Finance, or designee.
A majority of the work may be performed in accordance with the Statement on Standards
for Consulting Services issued by the American Institute of Certified Public Accountants
(AICPA). Examples of required work include:
• Participate in the assessment of the internal control environment and related
internal control risks,
• Provide an outline or work plan for the project. Conduct interviews of key personnel
and supervisors in the Finance Department and other departments to determine if
existing policies and procedures are being followed and identify internal control
deficiencies.
• Review and evaluate the policy and procedures to assess internal control
effectiveness and weaknesses. Review and evaluate controls performed directly
by Senior Staff or Management or detect Senior Staff or Management override of
controls.
• Identify inconsistences in internal controls and recommend changes to enhance
consistency citywide.
• Perform an analysis of selected electronic data on a limited basis for anomalies or
unusual transactions.
• Test accounting documentation for any identified areas of concern or potential
areas of vulnerability.
• Test organization compliance with Council and or administrative policies and or
operational procedures.
• Examine the practices of a department or program to determine if it is achieving
economy, efficiency and effectiveness in the employment of available resources.
• Create a report identifying internal control weaknesses, potential risks and
recommendations to improve internal controls, management practices, and
efficiency.
• Review payroll change procedures and time and attendance records for potential
timecard fraud or unauthorized absences.
• The Consultant will also provide recommendations on new, or changes to existing,
financial policies and procedures, risk management methods, and ideas to support
organizational efficiency and effectiveness.
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EXHIBIT B
SCHEDULE OF BILLING RATES
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EXHIBIT B
SCHEDULE OF BILLING RATES
Position Titles
Partner
Hourly Rate
$350
Director
$300
Manager
$250
Supervisor
$175
9-56
EXHIBIT C
INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES
1 Provision of Insurance. Without limiting Consultant's indemnification of City, and
prior to commencement of Work, Consultant shall obtain, provide and maintain at
its own expense during the term of this Agreement, policies of insurance of the
type and amounts described below and in a form satisfactory to City. Consultant
agrees to provide insurance in accordance with requirements set forth here. If
Consultant uses existing coverage to comply and that coverage does not meet
these requirements, Consultant agrees to amend, supplement or endorse the
existing coverage.
2. Acceptable Insurers. All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders'
Rating of A- (or higher) and Financial Size Category Class V11 (or larger) in
accordance with the latest edition of Best's Key Rating Guide, unless otherwise
approved by the City's Risk Manager.
3. Coverage Requirements.
A. Workers' Compensation Insurance. Consultant shall maintain Workers'
Compensation Insurance, statutory limits, and Employer's Liability
Insurance with limits of at least one million dollars ($1,000,000) each
accident for bodily injury by accident and each employee for bodily injury by
disease in accordance with the laws of the State of California, Section 3700
of the Labor Code.
Consultant shall submit to City, along with the certificate of insurance, a
Waiver of Subrogation endorsement in favor of City, its City Council, boards
and commissions, officers, agents, volunteers, employees and any person
or entity owning or otherwise in legal control of the property upon which
Consultant performs the Project and/or Services contemplated by this
Agreement.
B. General Liability Insurance. Consultant shall maintain commercial general
liability insurance, and if necessary umbrella liability insurance, with
coverage at least as broad as provided by Insurance Services Office form
CG 00 01, in an amount not less than one million dollars ($1,000,000) per
occurrence, two million dollars ($2,000,000) general aggregate. The policy
shall cover liability arising from premises, operations, personal and
advertising injury, and liability assumed under an insured contract (including
the tort liability of another assumed in a business contract).
C. Automobile Liability Insurance. Consultant shall maintain automobile
insurance at least as broad as Insurance Services Office form CA 00 01
covering bodily injury and property damage for all activities of Consultant
arising out of or in connection with Work to be performed under this
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Agreement, including coverage for any owned, hired, non -owned or rented
vehicles, in an amount not less than one million dollars ($1,000,000)
combined single limit each accident.
D. Professional Liability (Errors & Omissions) Insurance. Consultant shall
maintain professional liability insurance that covers the Services to be
performed in connection with this Agreement, in the minimum amount of
one million dollars ($1,000,000) per claim and two million dollars
($2,000,000) in the aggregate. Any policy inception date, continuity date,
or retroactive date must be before the Effective Date of this Agreement and
Consultant agrees to maintain continuous coverage through a period no
less than three years after completion of the Services required by this
Agreement.
4. Other Insurance Requirements. The policies are to contain, or be endorsed to
contain, the following provisions:
A. Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this Agreement shall be endorsed to waive subrogation against
City, its City Council, boards and commissions, officers, agents, volunteers,
employees and any person or entity owning or otherwise in legal control of
the property upon which Consultant performs the Project and/or Services
contemplated by this Agreement or shall specifically allow Consultant or
others providing insurance evidence in compliance with these requirements
to waive their right of recovery prior to a loss. Consultant hereby waives its
own right of recovery against City, and shall require similar written express
waivers from each of its subconsultants.
B. Additional Insured Status. All liability policies including general liability,
excess liability, pollution liability, and automobile liability, if required, but not
including professional liability, shall provide or be endorsed to provide that
City, its City Council, boards and commissions, officers, agents, volunteers,
employees and any person or entity owning or otherwise in legal control of
the property upon which Consultant performs the Project and/or Services
contemplated by this Agreement shall be included as insureds under such
policies.
C. Primary and Non Contributo[y. All liability coverage shall apply on a primary
basis and shall not require contribution from any insurance or self-insurance
maintained by City.
D. Notice of Cancellation. All policies shall provide City with thirty (30)
calendar days' notice of cancellation (except for nonpayment for which ten
(10) calendar days' notice is required) or nonrenewal of coverage for each
required coverage.
5. Additional Agreements Between the Parties. The parties hereby agree to the
following:
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A. Evidence of Insurance. Consultant shall provide certificates of insurance to
City as evidence of the insurance coverage required herein, along with a
waiver of subrogation endorsement for workers' compensation and other
endorsements as specified herein for each coverage. Insurance certificates
and endorsement must be approved by City's Risk Manager prior to
commencement of performance. Current certification of insurance shall be
kept on file with City at all times during the term of this Agreement. The
certificates and endorsements for each insurance policy shall be signed by
a person authorized by that insurer to bind coverage on its behalf. At least
fifteen (15) days prior to the expiration of any such policy, evidence of
insurance showing that such insurance coverage has been renewed or
extended shall be filed with the City. If such coverage is cancelled or
reduced, Consultant shall, within ten (10) days after receipt of written notice
of such cancellation or reduction of coverage, file with the City evidence of
insurance showing that the required insurance has been reinstated or has
been provided through another insurance company or companies. City
reserves the right to require complete, certified copies of all required
insurance policies, at any time.
B. City's Right to Revise Requirements. City reserves the right at any time
during the term of the Agreement to change the amounts and types of
insurance required by giving Consultant sixty (60) calendar days' advance
written notice of such change. If such change results in substantial
additional cost to Consultant, City and Consultant may renegotiate
Consultant's compensation.
C. Right to Review Subcontracts. Consultant agrees that upon request, all
agreements with subcontractors or others with whom Consultant enters into
contracts with on behalf of City will be submitted to City for review. Failure
of City to request copies of such agreements will not impose any liability on
City, or its employees. Consultant shall require and verify that all
subcontractors maintain insurance meeting all the requirements stated
herein, and Consultant shall ensure that City is an additional insured on
insurance required from subcontractors. For CGL coverage,
subcontractors shall provide coverage with a format at least as broad as CG
20380413.
D. Enforcement of Agreement Provisions. Consultant acknowledges and
agrees that any actual or alleged failure on the part of City to inform
Consultant of non-compliance with any requirement imposes no additional
obligations on City nor does it waive any rights hereunder.
E. Requirements not Limiting. Requirements of specific coverage features or
limits contained in this Section are not intended as a limitation on coverage,
limits or other requirements, or a waiver of any coverage normally provided
by any insurance. 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 all inclusive, or to the exclusion of
other coverage, or a waiver of any type. If the Consultant maintains higher
The Pun Group LLP Page C-3 9-59
limits than the minimums shown above, the City requires and shall be
entitled to coverage for higher limits maintained by the Consultant. Any
available insurance proceeds in excess of the specified minimum limits of
insurance and coverage shall be available to the City.
F. Self -insured Retentions. Any self -insured retentions must be declared to
and approved by City. City reserves the right to require that self -insured
retentions be eliminated, lowered, or replaced by a deductible. Self-
insurance will not be considered to comply with these requirements unless
approved by City.
G. City Remedies for Non -Compliance. If Consultant or any subconsultant fails
to provide and maintain insurance as required herein, then City shall have
the right but not the obligation, to purchase such insurance, to terminate this
Agreement, or to suspend Consultant's right to proceed until proper
evidence of insurance is provided. Any amounts paid by City shall, at City's
sole option, be deducted from amounts payable to Consultant or reimbursed
by Consultant upon demand.
H. Timely Notice of Claims. Consultant shall give City prompt and timely notice
of claims made or suits instituted that arise out of or result from Consultant's
performance under this Agreement, and that involve or may involve
coverage under any of the required liability policies. 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.
Consultant's Insurance. Consultant shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own
judgment may be necessary for its proper protection and prosecution of the
Work.
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