HomeMy WebLinkAboutAgenda Report - October 17, 2018 C-08CITY OF LODI
COUNCIL COMMUNICATION
AGENDA ITEM
C-8
AGENDA TITLE: Adopt Resolution Authorizing the City Manager to Execute Amendment No. 1 to
Contract with the Pun Group, LLP of Santa Ana, for additional Professional
Auditing Services Related to City Contracts and Change Orders ($8,000)
MEETING DATE: October 17, 2018
SUBMITTED BY: Deputy City Manager and Accounting Manager
RECOMMENDED ACTION: Adopt resolution authorizing the City Manager to execute
Amendment No. 1 to the contract with the Pun Group, LLP of Santa
Ana, for additional professional services related to City contracts
and change orders ($8,000).
BACKGROUND INFORMATION: On June 6, 2018, the City Council approved a one year contract
with the Pun Group for professional auditing services. The City's
previous audit firm had served in that role for fifteen years. In July
of 2018, the City hired a new Accounting Manager to among other things manage the City's financial
statement preparation.
The Pun Group conducted their initial site visit and review of the City from August 13 to August 17.
During this time the new Accounting Manager was becoming familiar with City processes. Both parties
noticed possible inconsistencies in contracting, specifically in purchase and change order processes and
procedures, with City policy and ordinances requiring substantial review. The level of review required is
beyond the normal scope of an audit and requires an amendment to the current agreement for the work
to be completed.
Staff recommends that it is in the best interest of the City from a time and fiscal resources standpoint to
amend the contract with the Pun Group. The Pun Group's experience includes such deep dive audits
into control activates such as those recommended. Pun Group's familiarity with the City's operations and
finance staff will aide in their review and decrease the impact on City operations while still providing a
thorough review of the City's purchase and change order practices.
FISCAL IMPACT: The additional cost of these services is $8,000.
FUNDING AVAILABLE:
Budget is available in the General Fund Finance division to cover the cost
of the additional services. There is no impact to the Fiscal Year 2018-19
budget from this contract amendment.
ryn
Melissa Munoz, c ounting Manager
Andrew Keys, Deputy-dity Manager
--
APPROVED:
Stephen Schwabaue, City Manager
CONTRACT AMENDMENT AGREEMENT
THE PUN GROUP, LLC
THIS CONTRACT AMENDMENT made and effective this day of October, 2018, by
and between the CITY OF LODI, a municipal corporation, hereinafter called "CITY", and THE
PUN GROUP, LLC, hereinafter called "Contractor."
WITNESSETH:
1. CONTRACT: Contractor and City entered into an Agreement for Professional Services
on July 26, 2018 ("Agreement"). Contractor and City now desire to amend the Scope of
Services set forth in the Agreement.
SCOPE OF SERVISES AND TERM: The Scope of Services under the Agreement shall
be amended to add those services set forth in Exhibit A, attached hereto and
incorporated herein. The cost for these additional services shall not exceed $8,000. All
other terms and conditions set forth in the Agreement, including the term of the
Agreement, remain unchanged.
CITY OF LODI, a municipal corporation THE PUN GROUP, LLC
STEPHEN SCHWABAUER KENNETH H. PUN
City Manager Managing Partner
Attest:
JENNIFER M. FERRAIOLO
City Clerk
Approved as to Form
JANICE D. MAGDICH
City Attorney �� I
THE
PUN GROUP
ACCOUNTANTS & ADVISORS
EXHIBIT A
AMENDMENT NO. 1 to PROFESSIONAL SERVICES AGREEMENT
DATED JULY 26, 2018
This Amendment No. 1 is to confirm our understanding of the terms of our engagement and the nature and limitations
of the services we are to provide for the City of Lodi ("City"). We will apply certain agreed-upon procedures listed in
the attached Schedule A that were specified and agreed to by the City of Lodi for internal controls over the City's
procurement and as further described in Resolution No. 85-173 "Resolution Adopting a Formal Policy and Procedure to
Govern Contract Change Orders. Our review for the period of these agreed upon procedures will be from July 1, 2017
to September 30, 2018.
Our engagement to apply agreed-upon procedures will be conducted in accordance with attestation standards established
by the American Institute of Certified Public Accountants. The sufficiency of the procedures performed or to be
performed is solely the responsibility of the City and we will require an acknowledgment in writing of that responsibility.
Consequently, we make no representation regarding the sufficiency of the procedures described in the attached Schedule
A either for the purpose for which the agreed-upon procedures report has been requested or for any other purpose.
Because the agreed-upon procedures listed in the attached Schedule A do not constitute an examination or review, we
will not express an opinion or conclusion on those agreed-upon procedures. In addition, we have no obligation to perform
any procedures beyond those listed in the attached Schedule A.
We plan to begin our procedures on approximately October 29, 2018 and, unless unforeseeable problems are encountered,
the engagement should be completed by December 31, 2018.
We will issue a written report upon completion of our engagement that lists the procedures performed and our findings.
Our report will be addressed to the Management and City Council of the City of Lodi. If, for any reason, we are unable
to complete any of the procedures, we will describe in our report any restrictions on the performance of the procedures,
or not issue a report and withdraw from this engagement. You understand that the report is intended solely for the
information and use of the City of Lodi, and should not be used by anyone other than these specified parties. Our report
will contain a paragraph indicating that had we performed additional procedures, other matters might have come to our
attention that would have been reported to you.
An agreed-upon procedures engagement is not designed to detect instances of fraud or noncompliance with laws or
regulations; however, we will communicate to you any known and suspected fraud and noncompliance with laws or
regulations affecting the City of Lodi that comes to our attention. In addition, if, in connection with this engagement,
matters come to our attention that contradict the City's purchasing and as further described in Resolution No. 85-173
"Resolution Adopting a Formal Policy and Procedure to Govern Contract Change Orders, we will disclose those matters
in our report.
You are responsible for the internal controls, policies and procedures over procurement and compliance with Resolution
85-173 and that it is in accordance with the City's policies, procedures, Ordinance, State Statutes and Council
Resolutions; and for selecting the criteria and procedures and determining that such criteria and procedures are
appropriate for your purposes. You are also responsible for, and agree to provide us with, a written assertion about
internal controls over the City's purchasing and as further described in Resolution No. 85-173 "Resolution Adopting a
Formal Policy and Procedure to Govern Contract Change Orders. In addition, you are responsible for providing us with
(1) access to all information of which you are aware that is relevant to the performance of the agreed-upon procedures
on the subject matter, (2) additional information that we may request for the purpose of performing the agreed-upon
procedures, and (3) unrestricted access to persons within the entity from whom we determine it necessary to obtain
evidence relating to performing those procedures.
200 East Sandpointe Avenue, Suite 600, Santa Ana, California 92707
Tel: 949-777-8800 • Fax: 949-777-8850
www.pungroup.com
City of Lodi
Amendment No. 1
Professional Services Agreement
Page 2
At the conclusion of our engagement, we will require certain written representations in the form of a representation letter
from management that, among other things, will confirm management's responsibility for internal controls over the
City's procurement and as further described in Resolution No. 85-173 "Resolution Adopting a Formal Policy and
Procedure to Govern Contract Change Orders in accordance with the City's
Vanessa Burke is the engagement partner and is responsible for supervising the engagement and signing the report or
authorizing another individual to sign it.
We estimate that our fees for these services will be $8,000. You will not be billed for travel and other out-of-pocket costs
such as report production, word processing, postage, etc. The fee estimate is based on anticipated cooperation from your
personnel and the assumption that unexpected circumstances will not be encountered during the engagement. If
significant additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the
additional costs. Our invoices for these fees will be rendered each month as work progresses and are payable on
presentation In accordance with our firm policies, work may be suspended if your account becomes 60 days or more
overdue and will not be resumed until your account is paid in full. If we elect to terminate our services for nonpayment,
our engagement will be deemed to have been completed upon written notification of termination even if we have not
completed our report. You will be obligated to compensate us for all time expended through the date of termination.
We appreciate the opportunity to assist you and believe this letter accurately summarizes the significant terms of our
engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described
in this letter, please sign the enclosed copy and return it to us. If the need for additional procedures arises, or the
procedures need to be modified, our agreement with you will need to be revised. It is customary for us to enumerate
these revisions in an addendum to this letter. If additional specified parties of the report are added, we will require that
they acknowledge in writing their agreement with the procedures performed or to be performed and their responsibility
for the sufficiency of procedures.
Very truly yours,
iL::fLl
Kenneth H. Pun, CPA, CGMA
Managing Partner
RESPONSE:
This letter correctly sets forth the understanding of the City of Lodi.
By:
Title:
Date:
EXHIBIT A
AMENDMENT NO. 1 to PROFESSIONAL SERVICES AGREEMENT
DATED JULY 26, 2018
(Attachment A)
Management's Assertions
Management or governing body has established policies and
procedures for purchasing that exceeds established limits according
to entity policy. Approval of purchase orders is required for
purchases
Procedures
Obtain and read a copy of City purchasing policies and
procedures established by City Council and City
Manager.
A current purchasing manual defines restrictions on purchases of
goods or services from governing body members, employees, or
other suppliers that would create a conflict of interest.
Obtain and read a copy of City's purchasing manual and
conflict of interest policy.
There is adequate segregation of duties among those who:
Review the City's process and procedure over
procurement to payment for segregation of duties in the
following areas
• Initiate purchase orders.
• Initiate purchase orders.
• Approve purchase orders.
• Approve purchase orders.
• Maintain the purchase journal.
• Maintain the purchase, journal.
• Initiate payments.
• Initiate payments.
• Input purchase orders.
• Input purchase orders.
Purchase order, receiving report, and invoice are matched and
cancelled prior to payment.
Select a random sample of purchase orders throughout
the period of July 1, 2017 to September 30, 2018 and
compare it against the invoice and payment made, and
contract.
Purchases are reviewed for compliance with requirements of laws
and regulations, the governing body, and of funding sources, if
applicable (for example, competitive bidding requirements).
Select a random sample of purchase orders throughout the
period of July 1, 2017 to September 30, 2018 and review
for compliance with the laws and regulations, and funding
sources. If competitive bidding requirements.
Change orders are processed within the scope of the policy and
reported to Council as per the policy.
Select a random sample of change orders > 10% of the
original contract amount or $5,000 initiated during the
period of July 1, 2017 to September 30, 2018. Trace to
the minutes of the meeting approving the change order if
in excess of $25,000.
All change orders have the proper authorization and are within the
limits of authorization.
For the change orders selected, review for proper
authorization and reporting to the City Council in
accordance with City policy.
Change orders are deemed appropriate, do not change the scope of
the project, and are within limits of the contract.
For the change orders selected, review for scope of work
in the change order and compare to the original scope of
work in the contract and are within contractual limits.
Management reviews the entity's financial statements on a periodic
basis and investigates significant variances from budgets and
expected results.
Review a sample of department monthly budgets at June
30, 2018 for services and supply lines. Identify any line
items that are greater than budget and inquire with
management as to the nature of the expenditure overruns.
AGREEMENT FOR PROFESSIONAL SERVICES
ARTICLE 1
PARTIES AND PURPOSE
Section 1.1 Parties
THIS AGREEMENT is entered into on , _L.,� \ '4 , 2018, by and between
the CITY OF LODI, a municipal corporation (hereinai�er "CITY"), and The Pun Group,
LLP, a California limited liability partnership (hereinafter "CONTRACTOR").
Section 1.2 Purpose
CITY selected the CONTRACTOR to provide the services required in
accordance with attached Scope of Services, Exhibit A, attached and incorporated by
this reference.
CITY wishes to enter into an agreement with CONTRACTOR for Auditing
Services (hereinafter "Project") as set forth in the Scope of Services attached here as
Exhibit A. CONTRACTOR acknowledges that it is qualified to provide such services to
CITY.
ARTICLE 2
SCOPE OF SERVICES
Section 2.1 Scope of Services
CONTRACTOR, for the benefit and at the direction of CITY, shall perform the
Scope of Services as set forth in Exhibit A.
Section 2.2 Time For Commencement and Completion of Work
CONTRACTOR shall commence work pursuant to this Agreement, upon receipt
of a written notice to proceed from CITY or on the date set forth in Section 2.6,
whichever occurs first, and shall perform all services diligently and complete work under
this Agreement based on a mutually agreed upon timeline or as otherwise designated in
the Scope of Services.
CONTRACTOR shall submit to CITY such reports, diagrams, drawings and other
work products as may be designated in the Scope of Services.
CONTRACTOR shall not be responsible for delays caused by the failure of CITY
staff to provide required data or review documents within the appropriate time frames.
The review time by CITY and any other agencies involved in the project shall not be
counted against CONTRACTOR's contract performance period. Also, any delays due to
weather, vandalism, acts of God, etc., shall not be counted. CONTRACTOR shall
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remain in contact with reviewing agencies and make all efforts to review and return all
comments.
Section 2.3 Meetings
CONTRACTOR shall attend meetings as may be set forth in the Scope of
Services.
Section 2.4 Staffing
CONTRACTOR acknowledges that CITY has relied on CONTRACTOR's
capabilities and on the qualifications of CONTRACTOR's principals and staff as
identified in its proposal to CITY. The Scope of Services shall be performed by
CONTRACTOR, unless agreed to otherwise by CITY in writing. CITY shall be notified
by CONTRACTOR of any change of Project Manager and CITY is granted the right of
approval of all original, additional and replacement personnel at CITY's sole discretion
and shall be notified by CONTRACTOR of any changes of CONTRACTOR's project staff
prior to any change.
CONTRACTOR represents it is prepared to and can perform all services within
the Scope of Services (Exhibit A) and is prepared to and can perform all services
specified therein. CONTRACTOR represents that it has, or will have at the time this
Agreement is executed, all licenses, permits, qualifications, insurance and approvals of
whatsoever nature are legally required for CONTRACTOR to practice its profession, and
that CONTRACTOR shall, at its own cost and expense, keep in effect during the life of
this Agreement all such licenses, permits, qualifications, insurance and approvals, and
shall indemnify, defend and hold harmless CITY against any costs associated with such
licenses, permits, qualifications, insurance and approvals which may be imposed against
CITY under this Agreement.
Section 2.5 Subcontracts
Unless prior written approval of CITY is obtained, CONTRACTOR shall not enter
into any subcontract with any other party for purposes of providing any work or services
covered by this Agreement.
Section 2.6 Term
The term of this Agreement commences on July 1, 2018 and terminates upon the
completion of the Scope of Services or on June 30, 2019, whichever occurs first.
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ARTICLE 3
COMPENSATION
Section 3.1 Compensation
CONTRACTOR's compensation for all work under this Agreement shall conform
to the provisions of the Fee Proposal, attached hereto as Exhibit B and incorporated by
this reference.
CONTRACTOR shall not undertake any work beyond the scope of this
Agreement unless such additional work is approved in advance and in writing by CITY.
Section 3.2 Method of Payment
CONTRACTOR shall submit invoices for completed work on a monthly basis, or
as otherwise agreed, providing, without limitation, details as to amount of hours,
individual performing said work, hourly rate, and indicating to what aspect of the Scope
of Services said work is attributable. CONTRACTOR's compensation for all work under
this Agreement shall not exceed the amount of the Fee Proposal,
Section 3.3 Costs
The Fee Proposal shall include all reimbursable costs required for the
performance of the Scope of Services. Payment of additional reimbursable costs
considered to be over and above those inherent in the original Scope of Services shall
be approved in advanced and in writing, by CITY.
Section 3.4 Auditing
CITY reserves the right to periodically audit all charges made by CONTRACTOR
to CITY for services under this Agreement. Upon request, CONTRACTOR agrees to
furnish CITY, or a designated representative, with necessary information and assistance
needed to conduct such an audit.
CONTRACTOR agrees that CITY or its delegate will have the right to review,
obtain and copy all records pertaining to performance of this Agreement.
CONTRACTOR agrees to provide CITY or its delegate with any relevant information
requested and shall permit CITY or its delegate access to its premises, upon reasonable
notice, during normal business hours for the purpose of interviewing employees and
inspecting and copying such books, records, accounts, and other material that may be
relevant to a matter under investigation for the purpose of determining compliance with
this requirement. CONTRACTOR further agrees to maintain such records for a period of
three (3) years after final payment under this Agreement.
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ARTICLE 4
MISCELLANEOUS PROVISIONS
Section 4.1 Nondiscrimination
In performing services under this Agreement, CONTRACTOR shall not
discriminate in the employment of its employees or in the engagement of any sub
CONTRACTOR on the basis of race, color, religion, sex, sexual orientation, marital
status, national origin, ancestry, age, or any other criteria prohibited by law.
Section 4.2 ADA Compliance
In performing services under this Agreement, CONTRACTOR shall comply with
the Americans with Disabilities Act (ADA) of 1990, and all amendments thereto, as well
as all applicable regulations and guidelines issued pursuant to the ADA.
Section 4.3 Indemnification and Responsibility for Damage
CONTRACTOR to the fullest extent permitted by law, shall indemnify and hold
harmless CITY, its elected and appointed officials, directors, officers, employees and
volunteers from and against any claims, damages, losses, and expenses (including
reasonable attorney's fees and costs), arising out of performance of the services to be
performed under this Agreement, provided that any such claim, damage, loss, or
expense is caused by the negligent acts, errors or omissions of CONTRACTOR, any
subcontractor employed directly by CONTRACTOR, anyone directly or indirectly
employed by any of them, or anyone for whose acts they may be liable, except those
injuries or damages arising out of the active negligence, sole negligence, or sole willful
misconduct of the City of Lodi, its elected and appointed officials, directors, officers,
employees and volunteers, CITY may, at its election, conduct the defense or participate
in the defense of any claim related in any way to this indemnification. If CITY chooses at
its own election to conduct its own defense, participate in its own defense, or obtain
independent legal counsel in defense of any claim related to this indemnification,
CONTRACTOR shall pay all of the costs related thereto, including without limitation
reasonable attorney fees and costs. The defense and indemnification obligations
required by this Agreement are undertaken in addition to, and shall not in any way be
limited by the insurance obligations set forth herein.
Section 4.4 No Personal Liability
Neither the City Council, nor any other officer or authorized assistant or agent or
City employee shall be personally responsible for any liability arising under this
Agreement.
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Section 4.5 Responsibility of CITY
CITY shall not be held responsible for the care or protection of any material or
parts of the work described in the Scope of Services prior to final acceptance by CITY,
except as expressly provided herein.
Section 4.6 Insurance Requirements for CONTRACTOR
CONTRACTOR shall take out and maintain during the life of this Agreement,
insurance coverage as set forth in Exhibit C attached hereto and incorporated by this
reference.
Section 4.7 Successors and Assigns
CITY and CONTRACTOR each bind themselves, their partners, successors,
assigns, and legal representatives to this Agreement without the written consent of the
others. CONTRACTOR shall not assign or transfer any interest in this Agreement
without the prior written consent of CITY. Consent to any such transfer shall be at the
sole discretion of CITY.
Section 4.8 Notices
Any notice required to be given by the terms of this Agreement shall be in writing
signed by an authorized representative of the sender and shall be deemed to have been
given when the same is personally served or upon receipt by express or overnight
delivery, postage prepaid, or three (3) days from the time of mailing if sent by first class
or certified mail, postage prepaid, addressed to the respective parties as follows:
To CITY: City of Lodi
221 West Pine Street
P.O. Box 3006
Lodi, CA 95241-1910
Attn: Andrew Keys, Deputy City Manager
To CONTRACTOR: The Pun Group, LLP
200 E Sandpointe Ave., Suite 600
Santa Ana, CA 92707
Attn: Kenneth H. Pun, Managing Partner
Section 4.9 Cooperation of CITY
CITY shall cooperate fully and in a timely manner in providing relevant
information it has at its disposal relevant to the Scope of Services.
Section 4.10 CONTRACTOR is Not an Employee of CITY
CONTRACTOR agrees that in undertaking the duties to be performed under this
Agreement, it shall act as an independent contractor for and on behalf of CITY and not
an employee of CITY. CITY shall not direct the work and means for accomplishment of
the services and work to be performed hereunder. CITY, however, retains the right to
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require that work performed by CONTRACTOR meet specific standards without regard
to the manner and means of accomplishment thereof.
Section 4.11 Termination
CITY may terminate this Agreement, with or without cause, by giving
CONTRACTOR at least ten (10) days written notice. Where phases are anticipated
within the Scope of Services, at which an intermediate decision is required concerning
whether to proceed further, CITY may terminate at the conclusion of any such phase.
Upon termination, CONTRACTOR shall be entitled to payment as set forth in the
attached Exhibit B to the extent that the work has been performed. Upon termination,
CONTRACTOR shall immediately suspend all work on the Project and deliver any
documents or work in progress to CITY. However, CITY shall assume no liability for
costs, expenses or lost profits resulting from services not completed or for contracts
entered into by CONTRACTOR with third parties in reliance upon this Agreement.
Section 4.12 Confidentiality
CONTRACTOR agrees to maintain confidentiality of all work and work products
produced under this Agreement, except to the extent otherwise required by law or
permitted in writing by CITY. CITY agrees to maintain confidentiality of any documents
owned by CONTRACTOR and clearly marked by CONTRACTOR as "Confidential" or
"Proprietary", except to the extent otherwise required by law or permitted in writing by
CONTRACTOR. CONTRACTOR acknowledges that CITY is subject to the California
Public Records Act.
Section 4.13 Applicable Law, Jurisdiction, Severability, and Attorney's Fees
This Agreement shall be governed by the laws of the State of California.
Jurisdiction of litigation arising from this Agreement shall be venued with the San
Joaquin County Superior Court. If any part of this Agreement is found to conflict with
applicable laws, such part shall be inoperative, null, and void insofar as it is in conflict
with said laws, but the remainder of this Agreement shall be in force and effect. In the
event any dispute between the parties arises under or regarding this Agreement, the
prevailing party in any litigation of the dispute shall be entitled to reasonable attorney's
fees from the party who does not prevail as determined by the San Joaquin County
Superior Court.
Section 4.14 City Business License Requirement
CONTRACTOR acknowledges that Lodi Municipal Code Section 3.01.020
requires CONTRACTOR to have a city business license and CONTRACTOR agrees to
secure such license and pay the appropriate fees prior to performing any work
hereunder.
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Section 4.15 Captions
The captions of the sections and subsections of this Agreement are for
convenience only and shall not be deemed to be relevant in resolving any question or
interpretation or intent hereunder.
Section 4.16 Integration and Modification
This Agreement represents the entire understanding of CITY and
CONTRACTOR as to those matters contained herein. No prior oral or written
understanding shall be of any force or effect with respect to those matters covered
hereunder, This Agreement may not be modified or altered except in writing, signed by
both parties.
Section 4.17 Contract Terms Prevail
All exhibits and this Agreement are intended to be construed as a single
document. Should any inconsistency occur between the specific terms of this
Agreement and the attached exhibits, the terms of this Agreement shall prevail.
Section 4.18 Severability
The invalidity in whole or in part of any provision of this Agreement shall not void
or affect the validity of any other provision of this Agreement.
Section 4.19 Ownership of Documents
All documents, photographs, reports, analyses, audits, computer media, or other
material documents or data, and working papers, whether or not in final form, which
have been obtained or prepared under this Agreement, shall be deemed the property of
CITY. Upon CITY's request, CONTRACTOR shall allow CITY to inspect all such
documents during CONTRACTOR's regular business hours. Upon termination or
completion of services under this Agreement, all information collected, work product and
documents shall be delivered by CONTRACTOR to CITY within ten (10) calendar days.
CITY agrees to indemnify, defend and hold CONTRACTOR harmless from any
liability resulting from CITY's use of such documents for any purpose other than the
purpose for which they were intended.
Section 4.20 Authority
The undersigned hereby represent and warrant that they are authorized by the
parties to execute this Agreement.
Section 4.21 Federal Transit Funding Conditions
❑ If the box at left is checked, the Federal Transit Funding conditions attached as
Exhibit D apply to this Agreement. In the event of a conflict between the terms of this
Agreement or any of its other exhibits, and the Federal Transit Funding Conditions, the
Federal Transit Funding Conditions will control.
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IN WITNESS WHEREOF, CITY and CONTRACTOR have executed this
Agreement as of the date first above written.
ATTEST:
NIFER
Clerk
1
Y11 7 .�
FERRAIOLO F}aTEPHENUER
City Manager
CITY OF LODI, a municipal corporation
SC WASH
APPROVED AS TO FORM: THE PUN GROUP, LLC, a California limited
JANICE D. MAGDICH, City Attorney liability partnership
(13\/ By: 1444'
Name: KENNETH H. PUN
Title: Managing Partner
Attachments:
Exhibit A — Scope of Services
Exhibit B — Fee Proposal
Exhibit C — Insurance Requirements
Exhibit D — Federal Transit Funding Conditions (if applicable)
Funding Source:
Doc ID:
CA:Rev.01.2015
(Business Unit & Account No.)
8
Exhibit A
Scope of Work
The Error! Reference source not found. is requesting an opinion as to the fair presentation of Its basic financial
statements in accordance with generally accepted accounting principles (GAAP) and applicable laws and regulations.
These audits are to be performed in accordance with all applicable and generally accepted auditing standards,
including, but not limited to, the following'
• Generally accepted auditing standards as set forth by the American Institute of Certified Public Accountants.
• 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.
• The provisions of the Single Audit Act as amended in 1996.
• The provisions of U.S. Office of Management and Budget (OMB) Uniform Guidance (formerly known as
Circular A-133), Audits of State and Local Governments and Non -Profit Organizations and the Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,
To accomplish this task, the Firm will:
✓ Perform an audit of all funds of the City. The audit will be conducted in accordance with Generally Accepted
Government Auditing Standards. The CAFR will be in full compliance with all current GASB pronouncements.
✓ Provide assistance in meeting the requirements for the Government Finance Officers Association (GFOA)
"Certificate of Achievement for Excellence in Financial Reporting".
✓ Prepare a Single Audit Report which will include the following:
o Report on compliance and on internal control over financial reporting based on audit of financial
statements performed in accordance with Government Auditing Standards,
o Report on compliance with requirements applicable to each major program, internal control over
compliance, and on the schedule of expenditures of federal awards in accordance with Uniform
Guidance, "Audits of State and Local Governments", and the Single Audit Act of 1984 (Public Law
98-502).
o Schedule of Expenditures of Federal Awards.
o Notes to Schedule of Expenditures of Federal Awards.
o Schedule of Findings and Questioned Costs,
o Any other required schedules or reports.
o Prepare the Data Collection Form for Reporting on Audits of States, Local Governments, and Non -
Profit Organizations.
✓ Perform agreed-upon auditing procedures pertaining to the City's GANN Limit (Appropriations Limit) and
render a letter annually to the City regarding compliance.
✓ Issue a separate "management letter" that includes recommendations for improvements on internal control,
accounting procedures and other significant observations that are considered to be no reportable conditions,
Management letters should be addressed to the City Manager.
✓ Provide assistance in the implementation of applicable GASB pronouncements not yet in effect.
The Firm will be available for consultation by phone on accounting and financial issues during the year at no extra
cost. The Firm will also serve as auditor for certain addition projects and studies as may be deemed necessary by
the City.
The Firm will 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: (a) City Manager; (b) Internal Services Director/Deputy City Manager;
and (c) City Attorney.
Supplemental reports, audits, or agreed-upon procedures must be added in a written agreement prior to commencing
audit work. The Firm and the City will discuss and approved the scope and associated costs of these tasks,
Working Paper Retention and Access to Working Papers
The Firm will retain, at its own expense, all working papers and reports fora minimum of (7) seven years, unless the
City notifies the Firm in writing of the need to extend the retention period. Upon request, the Firm will make working
papers available to Error! Reference source not found. or other governmental agencies included in the federal or
state grant audits.
The Firm will comply with reasonable requests from successor auditors and allow them to review working papers that
relate to matters of continuing accounting significance,
Objectives of Our Services
Our primary objective for the proposed audit is to examine the City's financial statements and express our opinion on
their fairness of presentation, in accordance with generally accepted accounting principles. Other objectives that will
benefit the City include the following:
• To offer beneficial observations and recommendations about policies and procedures for accounting and
operating controls
• To identify opportunities to make City operations more efficient and reduce costs
• To perform the audit efficiently and effectively, so disruption to office operations is minimized
• To provide continuing advisory services so the City can implement recommendations
• To meet these objectives at no additional cost to the City
The Engagement Team wilt perform the audit in accordance with the Firm's quality -control procedures, which include
following standard audit programs, careful planning, using industry -standardized software for auditing and internal
control documentation, and welcoming an objective review of audit work.
The Firm will supply portable computers to the onsite staff members.
Our audit approach emphasizes careful planning, open communication, and proper assignment of responsibilities.
This method ensures that audit requirements will be met with minimal disruption of the City's daily operations, and
that the audit will proceed efficiently with full understanding between the Engagement Team and the City.
Proposed Segmentation of the Engagement and Proposed Timeline
The audit will be performed in four phases.
Initial Planning Meeting 1 During a mutually acceptable time frame, normally May/June of each year.
The Engagement Partner and Manager will meet with City's Management to get up to speed with City policies and
procedures, establish any specific requirements Management may have, identification of unique transactions,
implementation of new GASB pronouncements, and develop the audit work plan for the engagement.
Interim I May commence August/September of each year.
The Engagement Team—including the Engagement Partner—will assess accounting policies adopted by the City,
obtain an understanding of the City and Its operating environment, review internal controls on all significant
transaction classes, perform walkthroughs and/or tests of internal control, perform preliminary analytical procedures,
develop Initial risk assessment, evaluate Single Audit compliance (if needed), Identify any audit issues, and prepare
confirmation correspondence, The Engagement Team and City Management will establish expectations including
responsibilities and assignments for the year-end audit, and will hold a progress status meeting at the end of the
Interim phase.
Year -End I May commence by October of each year.
The Engagement Team—including the Engagement Partner—will conduct audit procedures on account balances in
the general ledger, finish confirmation procedures, perform preliminary analytical procedures, search for unrecorded
liabilities, perform substantive analytical review procedures, complete work on compliance with Federal Assistance,
and conclude fieldwork. The Engagement Team and City Management will hold an exit conference at the end of the
Year -End phase. Periodic update meetings will be held to communicate audit progress to management.
Reporting I Draft copies of reports will be provided by early November of each year; Final reports and management
letter will be provided no later than November 151h of each year. Reports will be available for December 151 Council
meeting.
The Firm will review and prepare audit reports and perform quality control procedures in accordance with the Quality
Control Standards issued by the AICPA. We will also review reports for compliance with GFOA reporting guidelines
at no additional cost. Any comments will be issued in a letter to Management. At the City's request, the Engagement
Partner and Manager will present the audit to the City's governing body.
The Firm will complete the audit fieldwork and issue all reports within the established timeframe, assuming no internal
City circumstances causes delays in the audit.
Level of Staff and Number of Hours to be Assigned to Each Proposed
Segment of the Engagement
The Pul) Group, LLP understands that the Clty is not only looking to employ our auditing services, but is also seeking
to receive value within that professional relationship. We believe that our value 4s derived from our In-depth
knowledge, experience, and commitment that our auditing firm employs. We stress and emphasize "employ",
because all of the knowledge and expertise listed on paper will not benefit you unless it is applied. That is why we
have developed a pian that we feel will accomplish the objectives of the City and your particular needs. Our Firni will
utilize the information that you have shared with us and our experience from our previous audits of this nature, from
various government entitles and cities to develop an effective plan for all major areas.
Example of Major Areas (not limited to):
• Audit of the City's financial statements and the related notes to financial statements
• Single Audit procedures and required reporting (if applicable)
• Agreed-upon procedures on Appropriations Limit calculation
• Communication with those charged with governance
• Internal Control and Management Letters (if applicable)
190
Total Hours:
Staff Classification Estimated Hours
Performing Work Annually
Partners
76
Managers
114
Supervisory
929
Senior Accountants
Staff Accountants
281
Clerical
8
Total Annual Hours:
760
Hours by Audit Phase
Phase I- Planning
Phase II - Interim
Phase III- Year End
Phase IV- Reporting
Total Annual Hours:
Hours
76
760
Sample Size and the Extent to Which Statistical Sampling is to be
Used in this Engagement
in aur audit approach, statistical sampling is used in conjunction with our skilled judgment and knowledge of each
situation. When designing an audit sample, our auditors consider the purpose of the audit procedure and the
characteristics of the population from which the sample will be drawn. We determine a sample size sufficient to
reduce sampling risk to an acceptably low level and select items for the sample in such a way that we can reasonably
expect the sample to be representative of the relevant population and likely to provide the auditor with a reasonable
basis for conclusions about the population.
Extent of Use of On -Site Automated Systems in the Engagement
Our Firm uses two powerful software applications in our audit: GaseWare IDEA, which is a data mining software,
and MindBridge, which is an artificial intelligence audit tool. We deploy these tools to allow our audit teams to increase
efficiency in the process, to enhance the existing quality of our work, and to quickly assimilate large amounts of data
your staff would normally be asked to gather. The tools also help us meet our professional requirements regarding
fraud and internal control, The benefit to you is we:
• Conduct more efficient and effective audits, while improving audit quality
• Increase the value of audit findings with complete, 'IOD% data coverage
• Identify risk and control issues before they impact your business
• Improve productivity by automating procedures and eliminating manual tasks
Our engagement team can easily import data from the City's financial software and extract useful data for the purpose
of testing and analytical procedures particular in the following areas:
• Successful Fraud Test • Kickback or Conflict -of -Interest Schemes
• Questionable Invoices • Dormant Account Schemes
• Phantom Vendor Schemes • Money Laundering Schemes
Type and Extent of Analytical Procedures to be Used in the Engagement
Analytical procedures are one of many financial audit processes which help an auditor understand the client's
operation and changes En the environment, and to identify potential risk areas to plan other audit procedures.
Analytical Procedures includes comparison of financial information on prior periods, budget, forecast, and industry
benchmark. We use trend and ratio analysis to identify any uncertain or unusual events. In order to perform these
analysis, our firm performs a survey of cities and counties and develops benchmarks on certain key financial
indicators, such as cost of services to tax revenues ratios, average general fund balance, capita! assets, debt per
capital, general fund unassigned fund balance to total general fund expenditures, etc. Our staff members have
previous experience in successfully implanting analytical procedures to the City's benefit.
Analytical procedures are performed at three stages of audit: at start, in middle and at end of audit These three
stages are risk assessment procedures, substantive analytical procedures, and final analytical procedures:
• Risk assessment procedures are used to assist the auditor to better understand the business and to plan the
nature, timing and extent of audit procedures.
• Substantive analytical procedures are used to obtain evidential matter about particular assertions related to
account balances or classes of transactions. During interim phase, our engagement team will set up
expectations for the year-to-date results and balances and compare them with budgeted and prior -year
amounts. This allows us to forecast year-end amounts, reducing the workload during the year-end phase and
allowing us to focus on areas of concern.
• Final analytical procedures are used as an overall review of the financial information in the final review stage
of the audit. The Engagement Partner and Manager will perform a high-level analytical review of the financial
information comparing the financial data far both quantitatively and qualitatively, to ensure the amount
presented in the financial statements are fairly presented in all materia! respect.
Approach to be Taken to Gain and Document an Understanding of the
City's Internal Control Structure
Audit risk assessment to be established by an internal control review, combined with the Engagement Team's
understanding of the City's operations and accounting software. Using the Committee of Sponsoring Organizations
(COSC) Framework, staff members will evaluate the City's processes and Identify any control deficiencies. These
diagnostic review procedures allow the Engagement Team to evaluate the City's systems and controls and to provide
constructive feedback to City Management,
During our initial planning phase of the audit, our engagement team, including the Engagement Partner and Manager
will obtain an understanding of the entity and Its environment. This is an essential aspect of performing an audit in
accordance with generally accepted auditing standards. In particular, that understanding establishes a frame of
reference within which the auditor plans the audit and exercises professional judgment about assessing risks of
material misstatement of the financial statements and responding to those risks throughout the audit.
During interim phase of the audit, our Engagement Team will perform a walkthrough of all significant accounting
systems, Including processes for financial reporting, revenue recognition and cash receipts, purchasing/contract
management and cash disbursements, and payroll and related liabilities, etc. Our auditors will obtain the written
policies and procedures, inquiring accounting personnel, and document the process in either a flowchart or narrative
summary format. After obtaining an understanding of the accounting and internal control systems, our auditor will
make a preliminary assessment of control risk, at the assertion 'level, for each material account balance or class of
transactions.
The form and extent of this documentation is influenced by the size and complexity of the entity and the nature of the
entity's accounting and internal control systems. Generally, the more complex the entity's accounting and Internal
control systems and the more extensive the auditor's procedures, the more extensive our documentation wi!E need to
be.
Approach to be Taken in Determining Laws and Regulations that Will be
Subject to Audit Test Work
The Firm stays continually up to date with audit requirements—including new regulations, compliance supplements,
state guidelines, and pertinent contracts—to ensure that we conduct audits in accordance with applicable laws and
regulations. We test transactions for compliance with the Single Audit Act, California Government Code, GANN
Appropriations Limit, provisions of applicable grant guidelines, requirements of local measures, etc.
For example, the Single Audit Act requires that we determine which grants to Include in our audit and select
transactions from those grants for detailed testing. While most transactions are tested as part of the Interim phase,
we cannot determine which grants to test for the Single Audit until the Year -End phase of audit.
Our compliance audits of cash, Investments, debt covenants, and other areas are performed in accordance with the
California Government code, which has many provisions and regulations covering investments.
Approach to be Taken in Drawing Audit Samples for Purposes of Tests of Compliance
To test compliance, we follow the AICPA's Audit Sampling Considerations of Uniform Guidance Compliance Audits.
We will select an appropriate sample size based on our professional judgment and knowledge. Any deviations from
control and compliance requirements will be documented.
List of Schedules/Tables to be Prepared By the City to Assist in the Conduct of Fieldwork
A sample of "PBC" list can be found on the Appendices section of this proposal.
GASB Implementation Specialist
Gary M. Caporicci, the Firm's GASB Implementation Specialist, is an appointed member to the State Retirement
Advisory Committee by the State Controller and has tremendous expertise in assisting clients with the Implementation
of GASB pronouncements.
For more than 40 years, Mr. Caporicci has successfully provided professional auditing, accounting, financial reporting
and management advisory/consulting services to a broad spectrum of governmental entities.
Caporicci is a leader in the new GASB standards going Into effect in the coming years. He will actively assist the City
during the process of implementation and compliance related to new accounting standards.
Client Training Seminar
Every year, the Firm hosts a conference to update governmental clients on new technical accounting and financial
issues. The day -long session—held in Danville, Clovis and Orange County —qualifies for eight hours of CPE.
Participants of this year's training seminar will receive a high-level examination of numerous technical issues,
including the following:
• GASB Updates
• Government Auditing Standards and Single Audit Updates
• Survey of Cities and Counties
• Implementation of the New OPEB Standards
• Public Sector Employee Benefits 2018: Big Ticket Items That Finance Directors and Staff Need to Plan for
Importantly, all of our clients are invited to attend the Pun Group, LLP client training seminar FREE OF CHARGE.
Identification of Anticipated Potential Audit Problems
While we do not expect any problems with the audit, we will carefully investigate and monitor the following relevant
accounting issues:
Investments:
• Compliance with GASB 31 and GASB 34
• Authorization and approval process for City investments
• Controls to assure City's compliance with investment limitations and types of specific investments
• Monitoring by the City of its investments
Financial Reporting:
• CAFR compliance with current reporting and disclosure requirements issued by GASB
• CAFR eligibility for financial reporting conformance awards issued by GFOA
• Compliance with the various GASBs in effect
• Perform valuations of OPEB benefits to determine the liability for all benefits promised to active, retired, and
inactive plan members as of each valuation date
• Compliance with Governmental Accounting Standards Board (GASB) Statements 74 and 75
• Compliance with infrastructure obligations and regulatory provisions
Internal Control Structure:
• City's internal control functions and compliance with proper internal control philosophies
• Computer -system processes and controls, and adequacy of the control environment
Over the period of the engagement, several new GASB pronouncements will become effective. The Engagement
Team will pay specific attention to the following new and upcoming pronouncements, and any others that become
effective during the proposal period, in order to determine proper implementation procedures:
• GASB 72 - Fair Value Measurement and Application
• GASB 73 - Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the
Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68
• GASB 74 - Financial Reporting for Posteinployment Benefit Plans Other Than Pension Plans
• GASB 75 - Accounting and Financial Reporting for Posternployment Benefits Qther Than Pensions
• GASB 76 - The Hierarchy of Generally Accepted Account Principles for State and Local Governments
• GASB 77 - Tax Abatement Disclosures
• GASB 78 - Pensions Provided through Certain Multipte-Employer Defined Benefit Pension Plans
• GASB 79 - Certain External Investment Pools and Pool Participants
• GASB 80 - Blending Requirements for Certain Component Units—an amendment of GASB Statement 14
• GASB 81 - Irrevocable Split -Interest Agreernents
• GASB 82 - Pension Issues—an amendment of GASB Statements No. 67, No. 68, and No. 73
• GASB 83 - Certain Asset Retirement Obligations
• GASB 84 - Fiduciary Activities
• GASB 85 - Omnibus 2017
• GASB 86 - Certain Debt Extinguishment Issues
• GASB 87 - Leases
Exhibit B
Cost Proposal
We are committed to the performance of a high quality audit at the most reasonable fee levet possible, both Initially
and throughout the engagement. Also, our partners will provide advice and consultation as needed, at no additional
cost to the Error! Reference source not found..
Name of Firm:
Contact Name:
Contact Telephone Number .
Contact Email Address:
Certification
The Pun Group, LLP
Certified Public Accountants and Business Advisors
Kenneth H. Pun, CPA, CGMA
(949) 777-8801
ken.pun@pungroup.com
1, the undersigned, certify I am duly authorized to represent the above named firm and am empowered to submit this
bid. In addition, I certify I am authorized to contract with the Errorl Reference source not found. on behalf of the
above named firm.
r
April 30, 2018
Kenneth H. Pun, CPA, CGMA 1 Managing Partner Date
The Pun Group, LLP
Total All -Inclusive Maximum Price
Following are our total fixed fees for Errorl Reference source not found..
01 lc, rIJ A,}1dk•o.i r
rise, Ye,s
Bervicas
City Audit and Related Reports
Single Audit and Related Reports (1 Major Program)
2017118 2018/19
GANN Appropriation Limit (AUP)
Special Purpose Audits (Federal Transit Administration and
Community Development Block Grant/Home Funds)
$ 64,500 $ 05,790
$ 4,000
$ 500
$ 10,000
$ 4,080
2019120
17,100 $
2020121
87,100
2021122
$ 87,106
$ 4,162 $
4,162
$ 4,162
510 $ 520
10,200
10,404
520
10,404
520
$ 10,404
*The Single Audit fees are based on (1) one major program. if the Error! Reference source not found, applies for
additional funding subsequent to the preparation of this proposal, the fee to audit additional major programs will be
$4,000each. The number of programs determined to be "major" will be based on OMB Uniform Guidance. The
Engagement Team will discuss this with the City's Management before starting Single Audit work.
Cost Breakdown
Schedule of Professional Fees and Expenses for the
Audit of the 2017/18 Financial Statements
Services:
Partners
Hours
Managers
76
114
Supervisory Team
129
Senior Auditors
Staff Auditors
152
281
Clerical
8
Subtotal
Total for Services Described in Section II of the RFP
Standard
Jlouriy Rate
$ 250.00
$ 200.00
$ 175.00
150.00
$ 125.00
$ 100.00
Quoted Hourly
Rate
$ 250.00
$ 200.00
$ 175.00
$ 150.00
$ 125.00
$ 100.00
Total
$ 19,000.00
$ 22,800.00
$ 22,575.00
$ 22,800.00
$ 35,125.00
$ 800.00
$ 123,100.00
$ 123.100.00
Out -of -Pocket Expenses:
Meals and Lodging
Transporl a tlon
Executive Time for Research and Assistance
Less Professional Discount
Included
Included
Included
$ (44,100.00)
Total all-Incluslve maximum price for the 2017.18 audit
$ 79,008.00
Schedule of Professional Fees and Expenses for the
Audit of the 2018/19 Financial Statements
Supervisory Team
Senior Auditors
Staff Auditors
Standard
Hourly Rate
$ 250.00
$ 200.00
$ 175.00
$ 150.00
$ 125.00
$ 100.00
Total
$ 19,000.00
$ 22,800.00
$ 22,575.00
$ 22,800.00
$ 35,125.00
$ 800.00
$ 123,100.00
Total for Services Described In Section 11 of the RFP
$ 123,100.00
Out -of -Pocket Expenses:
Meals and Lodging
Transportation
Executive Time for Research and Assistance
Less Professional Discount
Included
Included
Included
$ (42, 520.00)
Total all-Incluslve maximum price for the 2018-19 audit $ 80 580.00
Schedule of Professional Fees and Expenses for the
Audit of the 2019/20 Financial Statements
Services:
Partners
Managers
SupenAsory Team
Senior Auditors
Staff Auditors
Clerical
Hours
76
114
129
152
281
8
Standard
Hourly Rate
$ 250,00
$ 200.00
$ 175.00
$ 150.00
Subtotal
Total for Services Described In Section II of the RFP
125.00
$ 100.00
Total
$ 19, 000.00
$ 22,800.00
$ 22,575.00
$ 22,800.00
$ 35,125.00
$ 800.00
$ 123,100.00
$ 123,100,00
Out -of -Pocket Expenses:
Meals and Lodging
Transportation
Executhe Time for Research and Assistance
Less Professional Discount
Included
Included
Included
$ (40, 908.00)
Total aII-Inclusive maximum price for the 2019.20 audit $ 82,192.00
Out of Pocket Expenses in the Total Maximum Price and Reimbursement Rates
The Firm's policy is to maintain flexible billing rates in order to meet the needs of clients and help them
control costs. In the interest of starting our long-term relationship, we will absorb all costs required to
familiarize ourselves with the operations and accounting systems, as well as, travel and printing costs.
Additionally, our Partners will be available to provide advice and consultation as necessary to the Error!
Reference source not found., These costs will also be absorbed by the Firm.
Rates for Additional Professional Services
Below is the Firm's standard hourly billing rates, delineated by staffing levels:
Auditor's Standard Hourly Billing mites
Position FY 2017-18
Partner(s)
$ 250
Senior Manager(s)
$ 225
Manager(s)
$ 200
Supervisor(s)
$ 175
SeniorAccountant(s)
$ 150
StaffAccountant(s)
$ 125
Clerical
$ 100
Any supplemental reports, audits, or agreed-upon procedures not covered by this proposal may be added
in a written agreement prior to commencing audit work, The Firm and the City will discuss and approve the
scope and associated costs of these tasks. Any additional work will be performed at the above quoted
hourly rates.
Manner of Payment
Engagement Team members are required to maintain timesheets detailing the date, number of hours, and
work performed for every audit task. The Firm will collect these timesheets and bill the Error! Reference
source not found., at the rates outlined in the Total All -Inclusive Maximum Price section, in four stages:
(1) at the conclusion of the planning phase, (2) at the conclusion of the interim phase, (3) at the conclusion
of the Year -End phase, (4) and after presentation and acceptance of the final audit reports. Interim billings
will cover a period not less than a calendar month. The billing amounts generally break down as follows:
Work Performed
% o f
Roposal
Amount
For Planning 10%
For Interim w ork 40%
For Year -End work 40%
At Presentation and Acceptance of Final Reports 10%
Total 100%
Exhibit C
)nsumnce Requirements for Contractor The Contra❑tor shall take out and maintaln during the life of this contract,
insurance coverage as listed below. These insurance policies shall protect the Contractor and any subcontractor
performing work covered by this contract from claims for damages for personal injury, Including accidental death, as
well as from claims for property damages, which may arise from Contractor's operations under this contract, whether
such operations be by Contractor or by any subcontractor or by anyone directly or Indirectly employed by either of
them, and the amount of such Insurance shall be as follows:
1. COMPREHENSIVE GENERAL LIABILITY
$1,000,000 Ea. Occurrence
$2,000,000 Aggregate
3, PROFESSIONAL ERRORS AND OMt$SIONe
Not less than $1,000,000 per Make. Certificate of Insurance only required.
2. COMPREHENSIVE AUTOMOBILE LIM:errf
$1,000,000 Bodily Injury - Ea. Person
$1,000,000 Bodily InJury - Ea, Occurrence
$1,000,000 Property Damage - Ea, Occurrence
NOTE: Contractor agrees and stipulates that any Insurance coverage provided to the City of Lodi shall provide for a
claims period following termination of coverage which is at least consistent with the claims period or statutes of
limitations found in the California Tort Claims Aot (California Government Code Section 010 et seq.),
NOTE: (1) The Street address of the CITY OF LODI must be shown along with (a) and (b) above; 221 West Pine
Street, Lodi, California, 96241-1910; (2) The insurance certificate must state, on Its face or as an endorsement, a
description of the proieot that Itis insuring.
A copy of the certificate of Insurance with the following endorsements shall be furnished to the City:
(a) Additional Netmedlnsured Endowment
Such insurance as is afforded by this policy shall arse apply to the City of Lodi, Its elected and appointed
Boards, Commissl❑ns, Officers, Agents, Employees, and Volunteers as additional named insureds.
(This endorsement shall be on a form furnished to the City and shall be included with Contractors policies,)
(b) Primary Insurance endorsement
Such insurance as Is afforded by the endorsement for the Additional Insureds shall apply as primary Insurance,
Any other Insurance maintained by the City of LW or Its officers and employees shall be excess only and not
contributing with the insurance afforded by this endorsement.
(c)
5ever•rbility u.( Interest Clause
The term "Insured" is used severally and not collectively, but the inclusion herein of more than one Insured shall
not operate to Increase the Ilmlt of the company's liability.
(d) Notice of Cancellation gr Ghengte In Covereeizg deraement
This pollcy may not be canceled nor the coverage reduced by the company without 30 days' prior written notice
of such cancellation or reduction in coverage to the Risk Manager, City of Lodi, 221 W. Pine St., Lodl, CA
95240,
ComeensntIon Instrranue The Contractor shall lake out and maintain during the life of this contract, Worker's
C❑mpensatien Insuranoe for all of Contractor's employees employed at the site of the project and, If any work Is
sublet, Contractor shall require the subcontractor similarly to provide Worker's Compensation Insurance for all of the
latter's employees unless such employees are covered by the protection afforded by the Contractor. In ease any
class of employees engaged In hazardous work under this contract at the site of the project is not protected under the
Worker's Compensation Statute, the Contraotor shall provide and shell cause each subcontraotor to provide
insurance for the protection of said employees, A waiver of eubrogatlon Is required for workers compensation
insurance. This policy may not be canceled nor the coverage reduced by the company without 30 days' prior Written
notice of such cancellation or reduction In coverage to the Risk Manager, City of Lodl, 221 W. Pine St., Lodi, CA
95240.
NOTE: No contract agreement will be signed nor will met work begin on a project until the proper Insurance certificate
Is received by the City.
0
Genera) L1ab(lity
Automobile Liability
Excess
Workers Compensation
Professional/liability
Susan Bjork
Supervising Budget Analyst
City of Lodi
(209) 333-6800 x 2888
Project Number Prole* Name
03'Ot'2018 - 03'0-v2419
Polity 6807659212018
InSurer:
03/0112018 03°011'2019
Poii[y, RAES7670318
insurer:
03'O12e18 - 034012019
Pa:lc}r CUP0044 25314818
insurer:
03'0112018 -- 03/012019
Pdicy: U83X65340t1842G
Insurer.
03'0112018 — 030112019
Po:icy: IAC4207440
Insures:
2
The Pun Group
Overall Status.:'ti;
RelElJt..Sted Documents
LcInGm
L Etcr :.Cc cer:
EL Et E—
E LY; -
M_•
CERTIFICATE OF LIABILITY INSURANCE Printed On: June 5, 2018
Agent:
Company: Wood Gutmann & Bogart
Contact: Connie Jones
Phone: (714) 505-7000
Email: connie@wgbib.com
Address: 15901 Red Hill Ave #100
City: Tustin, CA 92780
General Liability
Insured:
Company: The Pun Group
Contact: Kenneth Pun
Phone:
Email: Ken.Pun@pungroup.com
Address:
City:
Carrier Company: travelers casualty insurance of america
Common Gen Liability: checked Policy Number: 6807G592120-18 Each Occurrence: $2,000,000
Claims Made: Effective Date: 03/01/2018 ' Fire Damage (any one fire):
$300,000
Occurrence: checked Expiration Date: 03/01/2019 Med,Exp (any one person):
$5,000
Aggregate Limit Applies Per: Deductible: Personal/adv Injury: $2,000,000
Policy
Retention:
Automobile Liability
Carrier Company: travelers casualty insurance of america
Any Auto Liability: Policy Number: BA8G767031 t3
All Owned Autos: Effective Date: 03/01/2018
Scheduled Autos: Expiration Date: 03/01/2019
Hired Autos: checked
Non -Owned Autos:
Excess
Carrier Company: Travelers Properly Casualty Co of Amer
Occurrence: checked Policy Number:
CUP004H25314818
Claims Made: Effective Date: 03/01/2018
Deductible: Expiration Date: 03/01/2019
Retention:
Workers Compensation
General (Aggregate): $4,000,000
Products-comp/op Agg:
$4,000,000
Combined Single Limit (Ea
Accident): $1,000,000
Bodily Injury (Per Person):
Bodily Injury (Per Accident):
Property:
Each Occurrence: $1,000,000
Aggregate: $1,000,000
Deductible:
Retention:
Carrier Company: Travelers Property Casualty Co of Amer
Policy Number:
UB3K6534011842G
Effective Date: 03/01/2018
Expiration Date: 03/01/2019
Professional Liability
Carrier Company; Argonaut Insurance Company
Policy Number: IAC4207440 Limit: $1,000,000
Effective Date: 03/01/2018
Expiration Date: 03/01/2019
Loan/Job Number: Job Name: The Pun Group - Auditing Services
Description of operations, Locations/Vehicles/Special items:
The City of Lodi, its elected and appointed boards, commissions, officers, agents, employees, and
volunteers are to be covered as additional Insureds on the CGL and auto policy.
Certificate Holder: Authorized Representative:
City of Lodi Connie Jones
Beverly Jensen
bjensen@lodi.gov
E.L. Each Accident: $1,000,000
E.L. Disease - Ea Employee:
$1,000,000
E.L. Disease Policy Limit:
$1,000,000
(209) 333-6708
221 W. Pine Street
Lodi, CA 95240
RESOLUTION NO. 2018-193
A RESOLUTION OF THE LODI CITY COUNCIL
AUTHORIZING THE CITY MANAGER TO EXECUTE
AMENDMENT NO. 1 TO THE PROFESSIONAL
SERVICES AGREEMENT WITH THE PUN GROUP, LLP,
OF SANTA ANA, FOR AUDITING SERVICES
WHEREAS, on June 6, 2018, the City entered into a Professional Services Agreement
with the Pun Group, LLP, for auditing services; and
WHEREAS, the Pun Group and City Finance staff noted certain control activities relating
to contract purchase and change orders requiring further review; and
WHEREAS, the City Council finds it is in the best interest of the City to conduct a
thorough review of the purchase and change order procedures in the most reasonable time
frame to coincide with the City's Fiscal Year 2017/18 Comprehensive Annual Financial
Statement preparation and review.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
authorize the City Manager to execute Amendment No. 1 to the Professional Services
Agreement with the Pun Group, LLP, of Santa Ana, California, for auditing services related to
City contracts and change orders, in the amount of $8,000.
Date: October 17, 2018
I hereby certify that Resolution No. 2018-193 was passed and adopted by the Lodi City
Council in a regular meeting held October 17, 2018, by the following vote:
AYES: COUNCIL MEMBERS — Chandler, Johnson, Kuehne, Mounce, and
Mayor Nakanishi
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
NNIFER? I+111. FERRAIOLO
City Clerk
2018-193