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HomeMy WebLinkAboutAgenda Report - March 17, 2021 C-10AGENDA ITEM C as0 CITY OF LODI 6 COUNCI L COMMUNICATION AGENDA TITLE: Adopt A Resolution Rescinding Resolution No. 2021-36 and Authorizing City Manager to Execute Professional Service Agreement with Bell Burnett & Associates, of Plymouth, to Perform Capital Assets Accounting Services And Appropriation Funds of ($50,000) MEETING DATE PREPARED BY: March 17, 2021 Accounting Manager RECOMMENDED ACTION: Adopt a resolution rescinding Resolution No. 2021-36 and authorizing City Manager to execute professional service agreement with Bell Burnett & Associates, of Plymouth, to perform capital assets accounting services and appropriate funds of $50,000. BACKGROUND INFORMATION: On February 17, 2021, Council adopted Resolution No. 2021-36 executing a Professional Services Agreement with Bell Burnett & Associates for capital asset accounting services, in the amount of $50,000. After Council executed the agreement, Bell Burnett & Associates, requested changes to contract language in regards to compensation, method of payment, indemnification and responsibility for damage and termination of the contract. Including the changes, the total dollar amount of the contract is the same as the original agreement that is being rescinded by this action. The Deputy City Manager and the City Attorney have reviewed the revisions and have approved the revisions. Staff recommends rescinding Resolution No. 2021-36 and authorizing City Manager to execute the Professional Services Agreement with Bell Burnett & Associates, of Plymouth, for capital asset accounting services, in the amount of $50,000. FISCAL IMPACT: By law and good management practice, the City's financial records are audited by independent auditors according to Generally Accepted Auditing Standards. Well-maintained financial records are the cornerstone by which the City fulfills its fiduciary responsibilities to the public. FUNDING AVAILABLE: General Fund - $30,000 —10095000.72450 Electric Utility - $20,000 — 50060001.72450 Melissa Munoz, Accounting Manager O Andrew Keys, Deputy City Manager APPROVED: Stephen Schwabauer, City Manager AGREEMENT FOR PROFESSIONAL SERVICES ARTICLE 1 PARTIES AND PURPOSE Section 1.1 Parties THIS AGREEMENT is entered into on , 2021, by and between the CITY OF LODI, a municipal corporation (hereinafter "CITY"), and BELL BURNETT & EDWARDS, dba BELL BURNETT & ASSOCIATES, a California corporation (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 CAPITAL ASSET ACCOUNTING (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 COPE 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 remain in contact with reviewing agencies and make all efforts to review and return all comments. Section 2.3 Meetinris 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 April 1, 2021 and terminates upon the completion of the Scope of Services or on August 31, 2021, whichever occurs first. z 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 as described as the Cost Proposal under Exhibit A and incorporated by 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 an invoice for the work outlined under Exhibit A upon completion of such work. CONTRACTOR's compensation for all work under this Agreement shall not exceed the Fee Proposal as outlined in Exhibit A. 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. 3 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 active negligence, sole negligence or sole willful misconduct 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. 4 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 Re uirements 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: Melissa Munoz, Accounting Manager To CONTRACTOR: Bell Burnett & Associates 17695 Overlook Court E Plymouth, CA 95669 Attn: Michael Bell, Principal 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 5 the services and work to be performed hereunder. CITY, however, retains the right to require that work performed by CONTRACTOR meet specific standards without regard to the manner and means of accomplishment thereof. Section 4.11 Termination CITY and CONTRACTOR may terminate this Agreement, with or without cause, by giving 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 pees 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. L Section 4.14 CitV 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. 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. 7 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. Section 4.22 Counterparts_ and Electronic Signatures This Agreement and other documents to be delivered pursuant to this Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy and all of which, when taken together, will be deemed to constitute one and the same agreement or document, and will be effective when counterparts have been signed by each of the parties and delivered to the other parties, Each party agrees that the electronic signatures, whether digital or encrypted, of the parties included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Delivery of a copy of this Agreement or any other document contemplated hereby, bearing an original manual or electronic signature by facsimile transmission (including a facsimile delivered via the Internet), by electronic mail in "portable document format" (".pdf') or similar format intended to preserve the original graphic and pictorial appearance of a document, or through the use of electronic signature software will have the same effect as physical delivery of the paper document bearing an original signature. 8 IN WITNESS WHEREOF, CITY and CONTRACTOR have executed this Agreement as of the date first above written. ATTEST JENNIFER CUSMIR City Clerk APPROVED AS TO FORM: JANICE D. MAGDICH, City Attorney By. jdm CITY OF LODI, a municipal corporation STEPHEN SCHWABAUER City Manager Bell Burnett & Associates, a California corporation Bv: Name: Michael Bell Title: Principal Attachments: Exhibit A - Scope of Services Exhibit B - Fee Proposal Exhibit C - Insurance Requirements Exhibit D - Federal Transit Funding Conditions (if applicable) Funding Source: 10095000.72450 - $30,000, 500160001.72450 - $20,000 (Business Unit & Account No.) Doc ID: CA;Rev.01.2015 9 Ms. Melissa Munoz Accounting Manager City of Lodi 310 W Elm Street Lodi, CA 95240 Re: Capital Asset Accounting Proposal Dear Ms. Munoz, EXHIBIT A/B December 18, 2020 Bell Burnett & Associates (BB&A) is pleased to have the opportunity to submit this Capital Asset Accounting Proposal to the City of Lodi (City). In the City's 2019 audit, prepared by The Pun Group, there were management letter comments related to Internal controls over financial reporting related to capital asset accounting and the valuation of electric utility underground lines. The audit adjustments related to the capital asset accounting were approximately $7.3 million, and the valuation of utility lines were undervalued by $8.9 million, and related accumulated depreciation of $4.9 million, To that end, BB&A will assist the City and its respective Departments to help to address these issues and to develop new policies and procedures, as necessary, to help address the management comments raised by the City's auditors. In order to accomplish this work, BB&A proposes to perform the following activities: Capital Asset Accounting Policies and Procedures — We will review existing City Policies and Procedures related to Capital Asset Accounting and will make recommendations for changes in order to help prevent such occurrences in the future. Our review will specifically focus on Lodi Electric, the Public Works Department, including Water and Wastewater, and the Transit Department given the size and complexity of their respective assets. If necessary, we will draft additional control procedures to be used throughout the year and at year-end. • Reconciliation of Capital Outlay Accounts to Asset Additions Report — We will review the current process and practices and establish procedures to periodically reconcile these Accounts to the Report consistent with the Audit Recommendation. We will work both with applicable Departments and with Accounting to provide the procedures needed to accurately capture costs. • Electric Utility Valuation— BB&A will work with Lodi Electric, the Warehouse, and Accounting to establish the procedures necessary to relieve this problem. Our review will include input to the City regarding work order system enhancements or improvements needed to better track plant additions and retirements. We will BELL BURNETT & ASSOCIATES PROPOSAL TO THE CITY OF LODI review the policies and procedures related to Construction Work In Progress to attempt to make sure that capital projects are closed in a timely fashion. We have seen this same problem in other similarly sized utilities and have been successful In making recommendations to correct the shortcoming. BB&A will work with Lodl Electric and the Warehouse to provide procedures to correct the problem of duplicate entries. Cost Proposal BB&A proposes to perform the proposed scope of work for a fixed fee of $50,000. We expect to be able to accomplish this work within 3-4 months of notice to proceed, depending upon the availability of City staff within the affected Departments. This proposal assumes In no event will the work require more than 6 months to complete. Qualifications BB&A Is a management and strategic consulting firm serving the energy, water, wastewater and transportation industries. We offeran independent development, review, and assessment of strategic plans and Initiatives. We are former Chief Financial Officers, financial advisors and bankers, so we understand the complexities that our clients face, especially for complex financial accounting'and reporting requirements. Thank you for your consideration and should you have any questions, please do not hesitate to contact us. Sincerely, &Z/&lx�� Bell Burnett & Associates Signature: Email: jmagdich@lodi.gov BELL BURNETT & ASSOCIATES PROPOSAL TO THE CITY OF LODI RESOLUTION NO. 2021-69 A RESOLUTION OF THE LODI CITY COUNCIL RESCINDING RESOLUTION NO. 2021-36; AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH BELL BURNETT & ASSOCIATES, OF PLYMOUTH, TO PERFORM CAPITAL ASSETS ACCOUNTING SERVICES; AND FURTHER APPROPRIATING FUNDS ----------------------------------------------------------------------- ----------------------------------------------------------------------- WHEREAS, on February 17, 2021, Council adopted Resolution No. 2021-36 authorizing a Professional Services Agreement with Bell Burnett & Associates for capital asset accounting services, in the amount of $50,000; and WHEREAS, after Council authorized the agreement, Bell Burnett & Associates requested changes to the contract language in regards to compensation, method of payment, indemnification and responsibility of damage and termination of the contract; and WHEREAS, the Deputy City Manager and the City Attorney have reviewed and approved the revisions; and WHEREAS, staff recommends that the City Council appropriate funds in the amount of $30,000, from the fund balance of General Fund (10095000.72450) for Fiscal Year 2020/21 and $20,000, from the fund balance of Electric Utility (50060001.72450) for Fiscal Year 2020/21. NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby rescind Resolution No. 2021-36 and authorize the City Manager to execute a Professional Services Agreement with Bell, Burnett & Associates, of Plymouth, California, for capital asset accounting services, in an amount not to exceed $50,000; and BE IT FURTHER RESOLVED that the Lodi City Council does hereby authorize an appropriation in the amount of $50,000, as set forth above; and BE IT FURTHER RESOLVED, pursuant to Section 6.3q of the City Council Protocol Manual (adopted 11/6/19, Resolution No. 2019-223), the City Attorney is hereby authorized to make minor revisions to the above -referenced document(s) that do not alter the compensation or term, and to make clerical corrections as necessary. Dated: March 17, 2021 I hereby certify that Resolution No. 2021-69 was passed and adopted by the City Council of the City of Lodi in a regular meeting held March 17, 2021 by the following votes: AYES: COUNCIL MEMBERS — Chandler, Hothi, Khan, Kuehne, and Mayor Nakanishi NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — None ABSTAIN: COUNCIL MEMBERS — None JENNIFER USMIR City Clerk 2021-69