HomeMy WebLinkAboutC-8092-1 - PSA for Professional Audit ServicesCCC
AMENDMENT NO. ONE TO
PROFESSIONAL SERVICES AGREEMENT
WITH WHITE, NELSON, DIEHL, EVANS LLP FOR
PROFESSIONAL AUDIT SERVICES
THIS AMENDMENT NO. ONE TO PROFESSIONAL SERVICES AGREEMENT
("Amendment No. One") is made and entered into as of this 26th day of July, 2016
("Effective Date"), by and between the CITY OF NEWPORT BEACH, a California
municipal corporation and charter city ("City"), and WHITE, NELSON, DIEHL, EVANS
LLP, a California limited liability partnership ("Consultant"), whose address is 2875
Michelle Drive, Suite 300, Irvine, California 92606, and is made with reference to the
following:
RECITALS
A. On June 14, 2016, City and Consultant entered into a Professional Services
Agreement ("Agreement") to engage Consultant to provide professional audit
services ("Project").
B. The parties desire to enter into this Amendment No. One to allow for the
execution of an annual Audit Engagement Letter ("AEL") that further clarifies the
parties' roles under the Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned
parties as follows:
SERVICES TO BE PERFORMED
Section 2 of the Agreement is amended in its entirety and replaced with the
following: "Consultant shall diligently perform all the services described in the Scope of
Services attached hereto as Exhibit A and incorporated herein by reference ("Services"
or "Work"). City may elect to delete certain Services within the Scope of Services at its
sole discretion. Toward the close of each fiscal year, Consultant shall provide to City an
AEL with regard to the audit to be performed for the currently closing fiscal year end.
The AEL shall be consistent with the terms of the Agreement, and should the terms of
the AEL and the Agreement conflict, the terms of the Agreement shall control."
2. INTEGRATED CONTRACT
Except as expressly modified herein, all other provisions, terms, and covenants
set forth in the Agreement shall remain unchanged and shall be in full force and effect.
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, the parties have caused this Amendment No. One to
be executed on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date:
By: lr
Aaron C.'Hal CAM 0+112 -lira
City Attorney
ATTEST: pq //_
Date: D l �
By: 4
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Date: '7 -aa - i e,
0
Finance Director
CONSULTANT: WHITE, NELSON,
DIEHL, EVANS LLP, a California limited
liability partnership
Date:
Signed in Counterpart
By:
Robert J. Callanan
General Partner
Date:
Signed in Counterpart
By:
Nitin P. Patel
General Partner
[END OF SIGNATURES]
WHITE, NELSON, DIEHL, EVANS LLP Page 2
IN WITNESS WHEREOF, the parties have caused this Amendment No. One to
be executed on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date:
By.
Aaron C, arj�can II4
City Attorney
ATTEST:
Date:
11
Leilani L Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Date: 7 -Ig - / C.
M
Finance Director
CONSULTANT: WHITE, NELSON,
DIEHL, EVANS LLP, a California limited
liability pa n rship
Date: IS%P��
By: X4LJ
Robert J. Callanan
General Partner
Date: i1 15114
By: /lam -�'— V' 6�-
Nitin P. Patel
General Partner
[END OF SIGNATURES]
WHITE, NELSON, DIEHL, EVANS LLP Page 2
PROFESSIONAL SERVICES AGREEMENT
WITH WHITE, NELSON, DIEHL, EVANS LLP FOR
PROFESSIONAL AUDIT SERVICES
THIS PROFESSIONAL SERVICES AGREEMENT ("Agreement') is made and
entered into as of this 14th day of June, 2016 ("Effective Date"), by and between the
CITY OF NEWPORT BEACH, a California municipal corporation and charter city
("City"), and WHITE, NELSON, DIEHL, EVANS LLP, a California limited liability
partnership ("Consultant'), whose address is 2875 Michelle Drive, Suite 300, Irvine,
California 92606, 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 professional audit services
("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 13, 2021, unless terminated earlier as set forth herein.
2. SERVICES TO BE PERFORMED
Consultant shall diligently perform all the services described in the Scope of
Services attached hereto as Exhibit A and incorporated herein by reference ("Services"
or "Work"). City may elect to delete certain Services within the Scope of Services at its
sole discretion.
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. 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, 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 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 Two Hundred
Forty One Thousand Five Hundred Sixty Five Dollars and 00/100 ($241,565.00),
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, 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 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.
White, Nelson, Diehl, Evans LLP Page 2
Compensation for any authorized Extra Work shall be paid in accordance with the
Schedule of Billing Rates as set forth in Exhibit B.
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 Robert J. Callanan 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.
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
White, Nelson, Diehl, Evans LLP Page 3
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 and employees (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 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 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
White, Nelson, Diehl, Evans LLP Page 4
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.
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
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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. 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, except for the audit working papers which are required to
be the property of the Consultant under generally accepted auditing standards, 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 prior written 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.
17.3 All written documents shall be transmitted to City in formats compatible
with Microsoft Office and/or viewable with Adobe Acrobat.
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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 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"), which (1) requires such persons to
disclose any financial interest that may foreseeably be materially affected by the Work
performed under this Agreement, and (2) prohibits such persons from making, or
participating in making, decisions that will foreseeably financially affect such interest.
24.2 If subject to the Act, Consultant shall conform to all requirements of the
Act. 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: Dan Matusiewicz, Finance Director
Finance Department
City of Newport Beach
100 Civic Center Drive
PO Box 1768
Newport Beach, CA 92658
25.3 All notices, demands, requests or approvals from City to Consultant shall
be addressed to Consultant at:
Attn: Robert J. Callanan
White, Nelson, Diehl, Evans LLP
2875 Michelle Drive, Suite 300
Irvine, CA 92606
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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.
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.
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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 attorneys' 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]
White, Nelson, Diehl, Evans LLP Page 10
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the dates written below.
APPROVED AS TO FORM:
CITY A
Date:
Aaron C. Harp
City Attorney
ATTEST:
Date: D i"lam Y
,01
u
(AM rjUIC a(tu
By: 46Ll/ rvY�—
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California munici al corp rtion
Date:
B
Diane 13. Dixon
Mayor
CONSULTANT: White, Nelson, Diehl,
Evans LLP, a California limited liability
partnershi
Date: ��fS��b
By: / )' df x-^
Robert J. Callanan
General Partner
By: N
Nitin P. Patel
General Partner
[END OF SIGNATURES]
Attachments: Exhibit A — Scope of Services
Exhibit B — Schedule of Billing Rates
Exhibit C — Insurance Requirements
White, Nelson, Diehl, Evans LLP Page 11
EXHIBIT A
SCOPE OF SERVICES
1. General Scope of Services
The City of Newport Beach desires the Consultant to express an opinion on the fair
presentation of its basic financial statements, and an "in -relation -to" opinion on the
combining and individual non -major fund financial statements, including budgetary
comparison schedules in conformity with auditing standards generally accepted in the
United States of America and Governmental Auditing Standards issued by the
Comptroller of the United States of America.
Consultant will be required to perform the following tasks:
1.1 Perform an audit examination of the governmental activities, business type
activities, each major fund, budgetary comparison of major governmental funds, the
aggregate remaining fund information, and the related notes which collectively comprise
the basic financial statements of the City of Newport Beach for the City of Newport
Beach for the five years beginning with the fiscal year ending June 30, 2016. Consultant
will also examine the required supplementary information ("RSI") and supplementary
information ("SI"). The examinations will be conducted in accordance with auditing
standards generally accepted in the United States of America, Government Auditing
Standards as set forth by the Government Accountability Office ("GAO"), and the
requirements of the American Institute of Certified Public Accountants' industry audit
guide entitled, "Audits of State and Local Governmental Units." City Staff will draft and
word process the Comprehensive Annual Financial Report ("CAFR") of the City of
Newport Beach. Consultant will prepare the government -wide financial statements and
appropriate reconciliations to these statements in conformity with the reporting
standards set forth by Government Finance Officers Association ("GFOA") for their
CAFR award programs. Consultant will finalize financial statements opinion by the
second week of December each year. The Consultant will provide their auditors' report
thereon.
Consultant will apply to management's discussion and analysis those procedures
required by the auditing standards to be applied to required supplementary information
(understanding the method of preparation, the source and basis for the information
presented, comparing for consistency to the audited data pertaining to the City, and
ascertaining the management's discussion and analysis contains all the information
required by Government Accounting Standards Board ("GASB") Statement No. 34 and
does not contain information prohibited to be presented in the management's discussion
and analysis).
1.2 Consultant will perform a single audit for the years in which the City
expends greater than $750,000 in federal funding in accordance with the Uniform
Guidance. The single audit will cover all federal grants received by the City and its
component units either as a primary or secondary recipient for fiscal years ended June
30, 2016 through June 30, 2020. The City will provide to the Consultant the Schedule
White, Nelson, Diehl, Evans LLP Page A-1
of Federal Financial Assistance encompassing all direct and pass-through federal
funds received by the City and component units. Consultant will render reports on the
single audit in accordance with single audit requirements of the Uniform Guidance.
Consultant will also prepare the electronic submission of the data collection form
required to be filed with the Single Audit Central Clearinghouse.
1.3 Consultant will perform agreed-upon audit procedures to test and report
on the City's Gann Limit for the four (4) years beginning with the fiscal years ending
June 30, 2016 through June 30, 2020.
1.4 Consultant will provide the City's Finance Committee with
communications required by the auditing standards: the Consultant's responsibility
under generally accepted auditing standards, significant accounting policies,
management judgment and accounting estimates, significant audit adjustments, other
information in documents containing audited financial statements, disagreements with
management, management consultation with other accountants, major issues
discussed with management prior to retention, difficulties encountered in performing
the audit, errors, irregularities, and illegal acts detected in the course of the audit.
1.5 Consultant will immediately report in writing any irregularities or illegal acts
that come to their attention to the City Council, City Attorney, and the City Manager as
required by the auditing standards.
1.6 For each year of their engagement, Consultant will prepare a letter to the
City Council reporting matters, dealing with internal control that meet the threshold of
being reportable conditions, as defined by professional auditing standards.
1.7 When applicable, the Consultant will prepare a management letter that will
provide other recommendations to the City ensuing from their review of the City's
internal control procedures. This letter will address non -reportable conditions (those
constructive comments not required to be included in the reportable conditions to City
Council or in the single audit report). Consultant will discuss those comments with the
Finance Director or his designee prior to its finalization.
1.8 Consultant will keep City staff abreast of all new developments affecting
local government finance and relevant accounting issues. Consultant will advise and
assist City staff in understanding of and implementation of new GASB
pronouncements.
1.9 Consultant will be available to assist with other professional assistance
requiring research and answer accounting and reporting issues raised by the City. Such
assistance may include, but is not limited to tax matters, review of bond documents,
cost allocation plans and employee benefit programs.
1.10 The City of Newport Beach CAFR is currently prepared and reproduced by
City staff. As an optional service, the Consultant may be asked to prepare the
government -wide financial statements and reconciliations to these statements in a
manner that is fully compliant with all current GASB pronouncements.
White, Nelson, Diehl, Evans LLP Page A-2
1.11 Consultant offers a wide range of consulting services to governmental
agencies. Under the attestation standards, the City may request a specific procedure or
study it wishes to have performed. Consultant would then perform those procedures
and report on their findings. Such special services are not part of Consultant's standard
fee and would be subject to a separate fee quotation.
2 Auditing Standards to be Followed
To meet the requirements of this request for proposals, the audit shall be
performed in accordance with generally accepting auditing standards including, but not
limited to, the following:
2.9 Generally accepted auditing standards as set forth by the American
Institute of Certified Public Accountants;
2.10 The standards applicable to financial audits contained in the most current
version of the Generally Accepted Government Auditing Standards (Yellow Book),
issued by the Comptroller General of the United States;
2.11 The provisions of the Single Audit Act as amended in 1996;
2.12 The provisions of U.S. Office of Management and Budget (OMB) Uniform
Grant Guidance/Super Circular Audits of State and Local Governments and Non -Profit
Organizations. Note: the City does not contemplate using a cost allocation plan for the
purpose charging indirect costs to federal programs.
3 Reports to be Issued
Following the completion of the audit of the fiscal year's financial statements, the
Consultant shall issue the following reports in accordance with auditing standards
outlined above in a form conforming to current generally accepted standards including
the current equivalent reports or as amended by standard setting authorities:
3.1 An independent auditors' report with an opinion on the fair presentation of
the basic financial statements, and an "in -relation -to" opinion on the combining and
individual non -major fund financial statements, including budgetary comparison
schedules in conformity with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Generally
Accepted Governmental Auditing Standards issued by the Comptroller of the United
States of America. Consultant will provide an electronic copy of the independent
opinion letter in PDF format and one hard copy.
3.2 Consultant will prepare the single audit report and render an opinion on
the schedule of expenditures of federal awards in relation to the basic financial
statements taken as a whole. The single audit report should include an appropriate
schedule of expenditures of federal awards, footnotes, findings and questioned costs,
White, Nelson, Diehl, Evans LLP Page A-3
including any deficiencies identified during the audit and a follow up on prior audit
findings, where required. Consultant will complete the data collection form and required
filing with the Federal Audit Clearing House and provide the City with one electronic
copy in PDF format and five bound copies.
3.3 A report on compliance and internal control over financial reporting and on
compliance and other matters based on an audit of the financial statements. The report
should be addressed to the City Council and provided to the City in an electronic form in
a PDF format.
3.4 A report on compliance for each major program and on internal control
over compliance. The report should be addressed to the City Council and provided to
the City in an electronic form in a PDF format.
3.4.1 In the required reports on compliance and internal controls, the
Consultant shall communicate any deficiencies in internal control found during the audit
to the Finance Committee and the City Council. A deficiency in internal control exists
when the design or operations of a control does not allow management or employees,
in the normal course of performing their assigned functions, to prevent, or detect and
correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility
that a material misstatement of the City's financial statements will not be prevented, or
detected and corrected on a timely basis. A significant deficiency is a deficiency or a
combination of deficiencies, in internal control that is less severe than a material
weakness, yet important to merit attention by those charged with governance. Either of
the above mentioned deficiencies shall be communicated in the report.
3.4.2 Deficiencies of lesser significance discovered by the Consultant
shall be reported in a separate letter to management.
3.5 When applicable, the Consultant shall issue a separate "management
letter" that includes recommendations for improvements in internal control. The
management letter should be addressed to the City Council. The Consultant will provide
one electronic copy in PDF format and one hard copy.
3.6 The Consultant will issue a separate letter, Statement on Auditing
Standards ("SAS") 122, "communication to those charged with governance at the
conclusion of the audit," that include significant findings and other matters. This should
also be addressed to the City Council.
3.7 California Constitution, Article XIIIB Appropriations Limit procedures letter:
The Consultant will provide the City an electronic copy in PDF format and one hard
copy.
White, Nelson, Diehl, Evans LLP Page A-4
4. Other Compliance Reports and Agreed Upon Procedures
Occasionally, it may be necessary for the City to contract with the Consultant for
additional services and compliance reports. The City will solicit fee proposals from
Consultant as needed but reserves the right to utilize other accounting firms if
necessary.
5. Irregularities and Illegal Acts
Consultant shall be required to make an immediate, written report of all irregularities
and illegal acts or indications of illegal acts of which they become aware to the following
parties:
City Manager, David A. Kiff
City Attorney, Aaron C. Harp
Finance Director and City Treasurer, Dan Matusiewicz
6. Working Paper Retention and Access to Working Papers
All working papers and reports must be retained, at the Consultant's expense, for a
minimum of three (3) years, unless Consultant's firm is notified in writing by the City of
the need to extend the retention period. The Consultant will be required to make
working papers available, upon request, to the City or its designees.
White, Nelson, Diehl, Evans LLP Page A-5
EXHIBIT B
SCHEDULE OF BILLING RATES
Service
City of Newport Beach -
Financial Audit
City of Newport Beach -
Single Audit
Subtotals
Optional Service:
Preparation of Govemment-
Wide Financial Statements
and related Reconciliations
Total all-inclusive
ma)dmum price
Fiscal Year
Option Period
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020
$ 37,110 $ 38,225 $ 39,370 $ 40,550 $ 41,765
6,400
6,590
6,790
6,995
7,205
43,510
44,815
46,160
47,545
48,970
1,990 2,050 21110 2,175 2,240
$ 45,500 $ 46,865 $ 48,270 $ 49,720 $ 51,210
No more than 90% of the total fee may be billed prior to presentation of final audit
reports and financial statements. Fees will be payable in full regardless of findings that
result from this engagement.
White, Nelson, Diehl, Evans LLP Page B-1
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 VII (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
White, Nelson, Diehl, Evans LLP Page C-1
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 Contributory. 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:
White, Nelson, Diehl, Evans LLP Page C-2
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. City reserves the right to require complete, certified copies of
all required insurance policies, at any time.
B. Citv'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. 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.
D. 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 insurance proceeds in excess of the
specified minimum limits of insurance and coverage shall be available to
the City.
E. 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.
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. Contractor shall give City prompt and timely
notice of claims made or suits instituted that arise out of or result from
Contractor's performance under this Contract, 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.
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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CERTIFICATE OF INSURANCE
CHECKLIST
City of Newport Beach
This checklist is comprised of requirements as outlined by the City of Newport Beach. *
Date Received: 6/24/16 Dept./Contact Received From: Marlene
Date Completed: 7/5/16 Sent to: Marlene By: Alicia
Company/Person required to have certificate: White Nelson Diehl Evans, LLP
Type of contract: All Others
GENERAL LIABILITY
EFFECTIVE/EXPIRATION DATE: 6/1/16-6/1/17
A. INSURANCE COMPANY: Sentinel Insurance Company Ltd
INSURANCE COMPANY: Sentinel Insurance Company Ltd
B. AM BEST RATING (A-: VII or greater): A+; XV
B.
C. ADMITTED Company (Must be California Admitted):
Is Company admitted in California?
® Yes ❑ No
D. LIMITS (Must be $1M or greater): What is limit provided?
1,000,000/2,000,000
E. ADDITIONAL INSURED ENDORSEMENT— please attach
® Yes ❑ No
F. PRODUCTS AND COMPLETED OPERATIONS (Must
LIMITS - If Employees (Must be $1M min. BI & PD and $500,000
include): Is it included? (completed Operations status does
not apply to Waste Haulers or Recreation)
® Yes ❑ No
G. ADDITIONAL INSURED FOR PRODUCTS AND
LIMITS Waiver of Auto Insurance / Proof of coverage (if individual)
COMPLETED OPERATIONS ENDORSEMENT (completed
(What is limits provided?)
Operations status does not apply to Waste Haulers)
® Yes ❑ No
H. ADDITIONAL INSURED WORDING TO INCLUDE (The City
its officers, officials, employees and volunteers): Is it
Haulers only):
included?
® Yes ❑ No
I. PRIMARY & NON-CONTRIBUTORY WORDING (Must be
❑ N/A ® Yes ❑ No
included): Is it included?
® Yes ❑ No
J. CAUTION! (Confirm that loss or liability of the named insured
is not limited solely by their negligence) Does endorsement
include "solely by negligence' wording?
❑ Yes ® No
K. ELECTED SCMAF COVERAGE (RECREATION ONLY):
® N/A ❑ Yes ❑ No
L. NOTICE OF CANCELLATION:
❑ N/A ® Yes ❑ No
II. AUTOMOBILE LIABILITY
EFFECTIVE/EXPIRATION DATE: 6/1/16-6/1/17
A.
INSURANCE COMPANY: Sentinel Insurance Company Ltd
B.
AM BEST RATING (A-: VII or greater) A+; XV
C.
ADMITTED COMPANY (Must be California Admitted):
Is Company admitted in California?
® Yes ❑ No
D.
LIMITS - If Employees (Must be $1M min. BI & PD and $500,000
UM, $2M min for Waste Haulers): What is limits provided?
1,000,000
E
LIMITS Waiver of Auto Insurance / Proof of coverage (if individual)
(What is limits provided?)
N/A
F.
PRIMARY & NON-CONTRIBUTORY WORDING (For Waste
Haulers only):
® N/A ❑ Yes ❑ No
G.
HIRED AND NON -OWNED AUTO ONLY:
❑ N/A ® Yes ❑ No
H.
NOTICE OF CANCELLATION:
❑ N/A ® Yes ❑ No
III. WORKERS' COMPENSATION
EFFECTIVE/EXPIRATION DATE: 6/1/16-6/1/17
A. INSURANCE COMPANY: Sentinel Insurance Company Ltd
B. AM BEST RATING (A-: VII or greater): A+; XV
C. ADMITTED Company (Must be California Admitted): ® Yes ❑ No
D. WORKERS' COMPENSATION LIMIT: Statutory ® Yes ❑ No
E. EMPLOYERS' LIABILITY LIMIT (Must be $1M or greater) 1,000,000
F. WAIVER OF SUBROGATION (To include): Is it included? ❑ Yes ❑ No
G. SIGNED WORKERS' COMPENSATION EXEMPTION FORM: N/A ❑ Yes ❑ No
H. NOTICE OF CANCELLATION: ❑ N/A ® Yes ❑ No
ADDITIONAL COVERAGE'S THAT MAYBE REQUIRED
IV. PROFESSIONAL LIABILITY EFF: 1/1/16 CARRIER: GREAT DIVIDE INS CO
RATING: A+:XV ADMITTED LIMIT: 5M/10M ❑ N/A ® Yes ❑ No
V POLLUTION LIABILITY
V BUILDERS RISK
HAVE ALL ABOVE REQUIREMENTS BEEN MET?
IF NO, WHICH ITEMS NEED TO BE COMPLETED?
Approved: 3
7/5/16
Agent ofAlliant Insurance Services Date
Broker of record for the City of Newport Beach
® N/A ❑ Yes ❑ No
® NIA ❑ Yes ❑ No
® Yes ❑ No
RISK MANAGEMENT APPROVAL REQUIRED (Non -admitted carrier rated less than _
Self Insured Retention or Deductible greater than $ ) ❑ N/A ❑ Yes ❑ No
Reason for Risk Management approval/exception/waiver:
Approved:
Risk Management Date
* Subject to the terms of the contract.