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Home My WebLink About06-13-11 Regular Meeting of Fiscal Affairs Committee CHUCK ENGELKEN, CHAIR JAY MARTIN Councilmember District 2 O � A Councilmember District 5 DARYL LEONARD J JOHN ZEMANEK Councilmember District 3 ,m Councilmember At -Large A • TOMMY MOSER Councilmember District 4 FISCAL AFFAIRS COMMITTEE MINUTES OF MEETING OF THE JUNE 13, 2011 The Fiscal Affairs Committee met on June 13, 2011, at 5:00 p.m., in the La Porte City Hall Council Chambers, 604 West Fairmont Parkway, La Porte, Texas, to consider the following items of business: 1. Call to Order Chairman Chuck Engelken called the meeting to order at 5:00 p.m. Other Committee Members present were Daryl Leonard, Tommy Moser and Jay Martin. Committee member John Zemanek was absent. 2. Consider approval of minutes of the Meeting held on May 9, 2011, of Fiscal Affairs Committee — P. Fogarty Committee Member Moser moved to approve the minutes of the meeting held on May 9, 2011, of the Fiscal Affairs Committee as presented. Committee Member Martin seconded. MOTION PASSED. Ayes: Chairman Engelken, Committee Members Moser, Leonard and Martin Nays: None Absent: Committee Member Zemanek 3. Discuss and review the process of securing an independent auditor for the City of La Porte, including a proposed timetable — M. Dolby Director of Finance Michael Dolby reviewed the process of securing an independent auditor for the City of La Porte, including a proposed timetable. Mr. Dolby proposed the following timeline: June 16, 2011, notification for RFPs will be mailed, and then opened on July 12 They will be reviewed and graded by staff July 12 through July 14 based on the firm's experience and technical capabilities. August 1 through 5 the Fiscal Affairs Committee will conduct interviews, and a contract will be awarded on August 22 The City of La Porte audit is due on September 30 and a report will be provided to City Council in mid March. Chairman Engelken requested Mr. Dolby to provide the committee with a copy of the RFP for review and to add BKD and Mark Tiller & Associates to the list to send the RFP to. Chairman Engelken also suggested a minimum of three and maximum of five firms be selected for an interview. Committee member Martin requested to review the matrix to be used in the evaluation process. Mr. Dolby advised the matrix is in the RFP, which will be provided to the committee this evening. Page 1 of 2 June 13, 2011, Fiscal Affairs Committee Minutes Committee members decided the next Fiscal Affairs Committee Meeting will be held on June 20, 2011. Committee member Moser informed Mr. Dolby he would like to have the La Porte Development Corporation Board added to the audit if this is allowed and eligible. Finance Director Dolby stated it can be added to the audit. Chairman Engelken requested verification of sales taxes be provided. Committee member Leonard suggested verification of sales taxes be provided by the selected audit firm. Committee member Moser also suggested verification of sales taxes should be provided by the selected audit firm. Committee member Martin did not have a problem with staff conducting and providing verification of sales taxes. Mr. Dolby advised the committee he would check on verification of sales taxes. Staff was directed to include the automated meters payback, loss and unaccounted water, 2011 budget for the La Porte Development Corporation Board, sales tax verification to the audit process in addition to adding BKD and Mark Tiller and Associates in Baytown to the Bidders List. 4. Consider approval or other action of a proposed list of firms to receive the City's RFP (request for proposal) for independent auditor services — M. Dolby Director of Finance Michael Dolby provided a proposed list of firms to receive the City's RFP (request for proposal) for independent auditor services. Chairman Engelken directed staff to bring this item back to the June 20 Meeting. 5. Administrative Reports — R. Bottoms There were no Administrative Reports. 6. Committee Comments Matters appearing on agenda; recognition of community members, city employees, and upcoming events; inquiry of staff regarding specific factual information or existing policy. There were no Committee comments. 7. Adjourn There being no further business, Committee Member Moser moved to adjourn the meeting at 5:34 p.m. Re ectfully submitted, 6. ` I �2ti Patrice Fogarty, Citicretary Passed and approved on the 20 day of June, 2011. E t6j Chairman Chuck Engelken Page 2 of 2 June 13, 2011, Fiscal Affairs Committee Minutes Eldridge, Robin From: Rinehart, Phyllis Sent: Friday, June 17, 2011 8:19 AM To: CSO - Staff Cc: Dolby, Michael Subject: FW: updated distribution list Attachments: Professional Auditing Services RFP #11509.docx Here is the updated distribution list for the audit RFP. We have updated the list to include the vendors requested by the Fiscal Affairs Committee. We are in the process of updating the contact information for all of the vendors. Thanks, Phyllis Rinehart • • 1 BIDDERS LIST Sealed RFP #11509 - Professional Auditing Services Alonzo, Bacarisse, Irvine & Palmer Blackeslee, Monzingo & Company 1800 St. James Place, Suite 100 203 N. Railroad Ave. Houston, TX 77056 Pflugerville, TX 78660 Ph: 713 - 954 -2002 Attn: Duane Blakeslee tkellner(c�abipcpa.com Ph: 512 - 251 -5611 gwen(a�blakesleecpa.com BDO Seidman, LLP 333 Clay Street, Suite 4700 Briggs & Lancaster Houston, TX 77002 3512 Avenue I Attn: Kevin Hubbard Rosenburg, TX 77471 Ph: 713 -659 -6551 Attn: Mr. Briggs Ph: 281 - 342 -3694 BKD ron a@blswealth.com 2800 Post Oak BLVD., Suite 3200 Houston, TX 77056 -6167 Briggs & Veselka Company, CPA Attn: David A. Hayob 6575 W. Loop South, Suite 700 Ph: 713 - 499 -4600 Bellaire, TX 77401 Fax: 713 - 499 -4699 Attn: Johnny Veselka dhayob @bkd.com Ph: 713- 667 -9147 jveselka @bvccpa.com Belt Harris Pechacek, LLLP jsanders@bvccpa.com 3210 Bingle Rd #300 Houston, TX 77055 Cabaniss, Horn & Passmore, PC Attn: Robert Belt 3411 Richmond Ave., Suite 350 Ph: 713 - 263 -1123 Houston, TX 77046 Fax: 713 - 263 -1550 Attn: Nathan Cabaniss rbe lt(a�txa u d ito rs . co m Collier, Johnson & Woods, PC Benken and Associates 555 N. Carancachua, Suite 1000 1214 Heights Blvd Corpus Christie, TX 78478 Houston, TX 77008 Attn: F. John Sheperd Attn: Brian Benken Ph: 361- 884 -9347 Ph: 713- 223 -4051 brigid(c�cjw- cpa.com Fax: 713- 223 -4052 benkenandassoc@aol.com Deloitte and Touche, LLP Flusche, Van Beveren, Kilgore PC 1111 Bagby #4500 North Tower Suite 450 Houston, TX 77002 800 Shoreline Blvd. Attn: Renee Vega Corpus Christie, TX 78401 Ph: 713 - 982 -2000 Attn: Van Beveren Fax: 713- 982 -2001 Ph: 361 - 880 -5600 rvega@deloitte.com khekkums@fvbkcpa.com Dickey, Rush, Duncan, Ansel! & Co., Gregg and Company, CPAs PC P.O. Box 619 2525 Bay Area, Suite 460 Tom Bean, TX 75489 Houston, TX 77058 Ph: 903 - 546 -6975 Attn: W.C. Ansel) rod.abbott(c�lafollettcpa.com Ph: 281 -488 -2022 bill(a�drdacpa.com Hereford, Lynch, Sellers & Kirkham P.O. Box 2548 Durst, Milberger, Nesbitt & Ask, LLP Conroe, TX 77305 304 Post Office Street Attn: Mr. Lynch Bryan, TX 77081 Ph: 936 - 756 -8127 Attn: Mr. Ask slackey @hlsk.com Ph: 979 - 822 -0175 peask(u�dmnacpas.com Hicks, Hoelle, Aylor Smith 3157 Executive Dr. Easley, Endres, Parkhill & San Angelo, TX 76904 Brackendorff, PC Attn: Mr. Hoelle 1330 W. Loop South, Suite 1400 Ph: 325 - 944 -2536 Houston, TX 77027 jerry@orwcpa.com Attn: Parkhill Ph: 713 -622 -0016 KPMG Peat Marwick, LLP steve .parkhill.parkhill@eepb.com 700 Louisiana #3100 Houston, TX 77002 Ernst & Young, LLP Attn: Craig Collins 5 Houston Center Ph: 713 - 319 -2000 1401 McKinney, Suite 1200 Fax: 713 - 319 -2041 Houston, TX 77010 craigcollins(a�kpmg.com Attn: Ruth Kincaid Ph: 713 - 750 -1500 Lemond & Lemond, LLC ruth.kincaid 723 Main St Suite # 316 Houston, TX 77002 First City Tower Attn: Scott Lemond 1001 Fannin St Ph: 713 - 223 -2500 Houston, TX 77002 Fax: 713 - 223 -2505 Attn: Barron Wallace clemondlemond- law.com Ph: 713- 758 -2222 Fax: 713- 615 -5076 bwallace(a�velaw.com James F. Martens & Associates Mosher, Seifert & Company 301 Congress Ave., Suite 1950 4701 Preston Avenue Austin, TX 78701 Pasadena, TX 77505 Attn: James Martens Attn: Mr. Seifert Ph: 281 - 991 -1099 McCaII Gibson and Company, PLLC kenseifert(cr�cpa1099.com 13100 Wortham Center Dr Houston, TX 77065 Null - Lairson, P.C. Attn: Michael McCall 3411 Richmond #500 Ph: 713 -462 -0341 Houston, TX 77046 Fax: 713 -462 -2708 Attn: Tom Pedersen mgsb(a�mgsbpllc.com Ph: 713 - 621 -1515 Fax: 713- 621 -1570 McConnell & Jones tpedersen(c� null- lairson.com 3040 Post Oak Blvd., Suite 1600 Houston, TX 77056 Oliver, Rainey & Wojetek, LLP Attn: Mr. McConnell 2909 Sherwood Way, Suite 300 Ph: 713 - 968 -1600 San Angelo, TX 76901 Ijamail[a�mjlm.com Ph: 325 - 942 -6713 jerrv@orwcpa.com McDonald & Sechrist LLP 2277 Plaza Dr Padgett, Strateman & Company, LLP Suite # 280 515 Congress, Suite 1212 Sugar Land, TX 77479 Austin, TX 78701 Attn: Jeanne H McDonald Attn: Mike O'Brien Ph: 281 - 313 -2213 Ph: 512 -476 -0717 Fax: 281 - 313 -2513 Cell: 281 - 300 - 3449 Pannell Kerr Forster of Texas, PC jhmcdonaldihmlaw.net 5847 San Felipe, Suite 2400 McGrath & Co., PLLC -CPA Houston, TX 77057 PO Box 270148 Attn: Mr. Guidry Houston, TX 77277 Ph: 713- 860 -1400 Attn: Mark McGrath Ph: 713 - 882 - 6572 Pattillo, Brown and Hill, LLP Fax: 401 West Highway 6 mark(a)mcgrath co.com Waco, TX 76710 Attn: Chris Pruitt Mir, Fox & Rodriguez Ph: 254 - 772 -4901 One Riverway Suite 1900 Fax: 254 - 772 -4920 Houston, TX 77056 cpruitt@pbhcpa.com Ph: 713- 622 -1120 eposway @mfrpc.com Phelps, Horne, Sanderson & Assoc., Sanderson Knox and Company, LLP PC 130 Industrial Blvd #130 1525 Lakefront Circle, Suite 3 Sugarland, TX 77478 The Woodlands, TX 77380 Attn: Alan Sandersen Attn: Gina Sanderson Ph: 281 - 242 -3232 Ph: 281 - 367 -6272 Fax: 281 - 2423252 asandersen @sktx.com Pickens, Snodgrass, Koch & Company, PC Seefeld, Lawson & Moeller 3001 Medlin Dr., Suite 100 P.O. Box 131030 Arlington, TX 76016 The Woodlands, TX 77393 Attn: Mr. Pickens Attn: Mr. Seefeld Ph: 817 -664 -3000 Ph: 281 - 362 -9732 steve@pskcpa.com Tsakopilous Brown Schott & Anchors Pricewaterhouse Coopers Colonnade Office Tower 1201 Louisiana, Suite 2900 9901 IH -10 West Suite 900 Houston, TX 77002 San Antonio, TX 78230 Attn: Mr. Paterson Ph: 210 -696 -5177 Ph: 713- 356 -4000 Thompson & Horton LLP Prothro, Wilhelmi & Co., PLLC 711 Louisiana, P.O. Box 7337 Suite #2100 South Tower Tyler, TX 75711 Houston, TX 77002 Attn: Mr. Prothro Attn: Deziree Perez Ph: 903 - 534 -8811 Ph: 713 -554 -6767 Fax: 713- 583 -8884 walter company.com reception Rosenhoover & Associates, CPA Tiller and Company PC 2316 Timber Shadows Dr., Suite 202 1300 Rolling Brook St Kingwood, TX 77339 Suite #603 Attn: Mr. Rosenhoover Baytown, TX 77521 -3863 Ph: 281 - 319 -4701 Attn: Mark Tiller rosen1040 a(� rosenhoover.com Ph: 281 -427 -7517 Fax: 281 -422 -5013 Salmon, Sims, Thomas mtiller 12720 Hillcrest #900 Dallas, TX 75230 Ubernosky, Passmore & Majeres, LLP Attn: Mr. Salmon 820 Gessner, Suite 820 972 - 392 -1143 Houston, TX 77024 rsalmon Attn: Mr. Ubernosky Ph: 713- 935 -0071 bubernosky @umpllc.com UHY Advisors Weaver - Tidwell 12 Greenway Plaza, Suite 200 24 Greenway Plaza #1800 Houston, TX 77046 Houston, TX 77046 Attn: Chuck Hill Attn: Mark Lund Ph: 713- 960 -1706 Ph: 713- 850 -8787 chill(a�uhy- us.com Fax: 713- 850 -1673 mark.lund@weaverllp.com Vink, Teague & Associates, PC 5550 LBJ Freeway, Suite 650 Wilson, Cribbs & Goren, PC Dallas, TX 75240 2500 Fannin Attn: Ms. Teague Houston, TX 77002 972 - 788 -5315 Attn: Reid Wilson rteague@vtamgi.com Ph: 713- 547 -8504 rwi lson net CITY OF LA PORTE REQUEST FOR PROPOSALS FOR SEALED RFP #11509 - PROFESSIONAL AUDITING SERVICES F o , Q to....i. 1 ` a \_ ,‘,.,,,,- ✓' 604 W. Fairmont Parkway La Porte, Texas 77571 1 o f ,A ,' 0 SEALED RFP #11509 - PROFESSIONAL y' ` ,. AUDITING SERVICES `'k' a d CITY OF LA PORTE NOTICE TO OFFERORS All sealed proposals shall be submitted including one (1) marked original and six (6) duplicates on the original forms and clearly marked with RFP number and description. Proposals will be received at the Purchasing Office, 2963 N. 23 Street, La Porte, TX 77571 until 2:00 p.m. Tuesday, July 12, 2011. Proposals will be opened and names publicly read in the Public Works upstairs training room immediately after the closing hour for the proposals on said date. An elevator is not available. Please contact Purchasing at 281 -470 -5126 if accommodations are needed. NO LATE PROPOSALS WILL BE CONSIDERED Forms furnished by the City of La Porte may be obtained without deposit from: City of La Porte Purchasing Division 2963 N 23 Street La Porte, TX 77571 (281) 470 -5126 Proposals will be opened so as to avoid disclosure of contents to competing offerors and kept secret during the process of negotiation. All proposals shall be open for public inspection after contract award. Trade secrets and confidential or proprietary information, so noted in proposal, shall not be open for public inspection. The City of La Porte hereby notifies all offerors that in regard to any agreement entered into pursuant to this advertisement, minority business enterprises will be afforded equal opportunities to submit proposals in response to this invitation and will not be discriminated against on the grounds of race, color, sex, age, religion or national origin in consideration for an award. The City reserves the right to reject any and /or all proposals, to waive any and all technicalities and to accept any proposal or part thereof, which in the opinion of the City Council, is most advantageous to the City. In case of ambiguity or lack of cleamess in stating the prices in the bid, the City reserves the right to consider the most advantageous bid thereof or to reject the bid. Published: June 16, 2011 June 23, 2011 2 CITY OF LA PORTE PURCHASING OFFICE 2963 N. 23RD STREET LA PORTE, TX 77571 To drop off Statements of Qualifications, follow these directions: ➢ At SH146 in La Porte, exit W. Main /Spencer Hwy. and turn west ➢ From Spencer Hwy., turn North on N. 23` Street ➢ The Public Works facility is on the right, past the La Porte Police Station and the Mini - Storage Facility. ➢ Turn right into parking lot and drive through the entrance gate, turn left immediately and park in the last aisle on the right. ➢ The Purchasing Office is located on the southwest side of the parking area. Look for the signage. 3 CITY OF LA PORTE CERTIFICATION BY RESPONDENT City of La Porte Ordinance #98 -2217 prohibits any expenditure for goods or services by the City of La Porte from any person, firm, or corporation owing any delinquent indebtedness to the City. The undersigned respondent further certifies that it is in compliance with the requirements of said ordinance. A copy of the ordinance may be obtained by contacting the City of La Porte Purchasing Division at 281 - 470 -5126. If undersigned respondent is not in compliance with Ordinance 98 -2217, it hereby assigns to the City of La Porte, the amount of its delinquent indebtedness to the City of La Porte, to be deducted by the City of La Porte from the amounts due the undersigned. Failure to remit this certification with the submittal, or non - compliance with said ordinance, shall be just cause for rejection or disqualification of submittal. The undersigned hereby certifies that it is in compliance with Ordinance 98- 2217. or The undersigned assigns to the City of La Porte, the amount of its delinquent indebtedness, to be deducted by the City of La Porte from the amounts due the undersigned. (Initial one of the above) Business Name: Address: Printed Name: Authorized Signature: Date: 4 CITY OF LA PORTE The foregoing prices shall include all labor, materials, equipment, removal, overhead, profit, freight, insurance, etc., to cover the finished work specified in this bid. All items bid and installed under this procurement must be new and unused and in undamaged condition. The City of La Porte is tax exempt and no taxes shall be included in the pricing of this bid. Bidder understands that the Owner reserves the right to reject any or all bids and to waive any informalities in the bidding. The bidder agrees that this bid shall be good and may not be withdrawn for a period of sixty (60) calendar days after the scheduled closing time for receiving bids. The undersigned affirms they are duly authorized to represent this firm, that this bid has not been prepared in collusion with any other firm, and that the contents contained herein have not been communicated to any other firm prior to the official opening. Respectfully submitted: Business Name (please print) Address Signature Date City, State, Zip Code E -mail Office Phone Fax Number 5 CITY OF LA PORTE GENERAL TERMS & CONDITIONS 1. RECEIPT AND OPENING OF PROPOSALS The City of La Porte, (hereinafter called the "Owner "), invites proposals on the form attached hereto. Sealed proposals shall be submitted including one (1) marked original and six (6) duplicates on the original forms and clearly marked with RFP number and description. Owner will receive proposals at the Purchasing Office, 2963 N. 23 Street, La Porte, TX 77571. Proposals will be publicly opened immediately after the closing hour of said date. Vendor name only will be read aloud so as to avoid disclosure of contents. Any proposal received after the time and date specified shall not be considered. The Owner may not consider any proposal not prepared and submitted in accordance with the provisions hereof and may waive any informalities or reject any and all proposals. Any proposal may be withdrawn prior to the scheduled time for the opening of proposals or authorized postponement thereof. 2. PROPOSAL MODIFICATIONS AND ADDENDUMS Any offeror may modify their proposal by written communication at any time prior to the scheduled receipt of proposals, provided such communication is received by the Owner prior to closing time. The communication should not reveal the proposal price, but should provide the addition or subtraction or other modification so that the Owner will not know the final prices or terms until the sealed proposal is opened. Owner shall not provide interpretation of the proposal language to any respondent orally. Such communication must be in writing. Every request for such interpretation should be in writing addressed to the Susan Cream, Purchasing Manager, 2963 North 23 Street, La Porte, TX 77571 or e- mailed to creams(c�laportetx.gov. All requests shall be received at least five (5) days prior to the scheduled time for receipt of offers. Any and all such interpretations and any supplemental instructions, will be in the form of written addenda to the specifications which, if issued, will be posted on City website, www.laportetx.gov no later than three (3) working days prior to the scheduled time for receipt of offers. Potential respondents are responsible for checking City website for additional solicitation documents. Failure of any respondent to receive any such addendum or interpretation shall not relieve them from any obligation of submittal. All addenda issued shall become part of the contract documents and must be acknowledged as received on submitted document. 6 General Terms & Conditions Continued Page 2 of 4 3. METHOD OF AWARD Evaluation will be based on the criteria stated in the RFP. The best proposal submitted by a responsible offeror will be negotiated with the City of La Porte. If proposal amounts exceed the available funds to finance the contract, the Owner may reject all proposals or may award the contract on a negotiated proposal with deductible alternates applied to the schedule of professional fees (see Appendix A). The City of La Porte reserves the right to waive any informalities or technical errors that in its judgment will best serve the interests of the City. 4. FUNDING OUT CLAUSE The City of La Porte warrants that funds are available to pay for this contract until the end of its current fiscal year and warrants funds will be requested to make payment in each appropriation period from now until the end of the last renewable option year. However, if funds are not made available after such request, then the City of La Porte may terminate this agreement with thirty (30) days written notice. 5. QUALIFICATIONS OF OFFEROR At the time of the opening of proposals, each offeror will be presumed to be thoroughly familiar with all requirements, timeline, evaluation procedures and other specifications set forth in this proposal. The failure or omission of any offeror to examine any form, instrument, or document shall in no way relieve any offeror from any obligation in respect of his proposal. The Owner may make such investigations as he deems necessary to determine the ability of the offeror to perform the work, and the offeror shall furnish to the Owner all such information and data for this purpose as the Owner may request. The Owner reserves the right to reject any proposal if the evidence submitted by, or investigation of, such offeror fails to satisfy the Owner that such offeror is properly qualified to carry out the obligations of the contract and to complete the work contemplated therein. Conditional proposals will not be accepted. 6. LAWS AND REGULATIONS The offeror's attention is directed to the fact that all applicable state laws, municipal ordinances, and the rules and regulations of all authorities having jurisdiction over the audit shall apply to the contract throughout, and they will be deemed to be included in the contract the same as though herein written out in full. General Terms & Conditions Continued Page 3 of 4 7. SUBCONTRACTS The offeror is specifically advised that any person, firm, or other party to whom it is proposed to award a subcontract under this contract must be acceptable to the Owner. 8 CITY OF LA PORTE REQUEST FOR PROPOSALS TABLE OF CONTENTS I. INTRODUCTION A. General Information B. Term of Engagement C. Subcontracting II. NATURE OF SERVICES REQUIRED A. General B. Scope of Work to be Performed C. Auditing Standards to be Followed D. Reports to be Issued E. Special Considerations F. Working Paper Retention and Access to Working Papers III. DESCRIPTION OF THE GOVERNMENT A. Name and Telephone Number of Contact Person B. Background Information C. Fund Structure D. Budgetary Basis of Accounting E. Federal and State Financial Assistance F. Pension Plans G. Component Units H. Joint Ventures I. Magnitude of Finance Operations J. Computer Systems K. Internal Audit Functions IV. TIME REQUIREMENTS A. Proposal Calendar B. Date Audit May Commence C. Schedule for the 2011 Fiscal Year Audit 1. Interim Work 2. Detailed Audit Plan 3. Fieldwork 4. Draft Reports D. Entrance Conferences, Progress Reporting and Exit Conferences E. Final Report Due Date 9 V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department Assistance B. Statements and Schedules to be Prepared by City Staff C. Work Area, Telephone, Photocopying and Internet access D. Report Preparation VI. PROPOSAL REQUIREMENTS A. General Requirements 1. Inquiries 2. Submission of Proposals B. Technical Proposal 1. General Requirements 2. Independence 3. License to Practice in Texas 4. Firm Qualifications and Experience 5. Partner, Supervisory and Staff Qualifications and Experience 6. Prior Engagements with the City of La Porte 7. Similar Engagements with Other Government Entities 8. Specific Audit Approach 9. Scope of Required Services 10. Identification of Anticipated Potential Audit Problems 11. Report Format C. Not to Exceed Fee Proposal VII. EVALUATION PROCEDURES A. Review of Proposals B. Evaluation Criteria C. Oral Presentation D. Final Selections E. Right to Reject Proposals APPENDICES A. Schedule of Professional Fees, Expenses, Guarantees and Warranties 10 CITY OF LA PORTE REQUEST FOR PROPOSALS I. INTRODUCTION A. GENERAL INFORMATION The City of La Porte (the "City ") is requesting proposals from qualified firms of certified public accountants to audit financial statements for the fiscal years ending September 30, 2011, 2012 and 2013, with the option of auditing its financial statements for each of the three (3) subsequent fiscal years based on satisfactory performance. These audits are to be performed in accordance with generally accepted auditing standards (GAAS), the standards set forth for financial audits in the U.S. General Accountability Office's (GAO) Government Auditing Standards (1994), the provisions of the federal Single Audit Act of 1984 (as amended in 1996) and the provisions of U.S. Office of Management and Budget (OMB) Circular A -133, Audits of States, Local Governments, and Non - Profit Organizations, as well as the following additional requirements: examination for compliance with procedures established by Charter, Ordinance or, where applicable, State and Federal Laws or regulations, including the Texas Code of Criminal Procedures. There is no expressed or implied obligation for the City to reimburse responding firms for any expenses incurred in preparing proposals in response to this request. Any inquiries concerning the request for proposals should be addressed to Susan Cream, Purchasing Manager at creams @laportetx.gov or (281) 470 -5123. Responses to the proposal should be addressed to Susan Cream, Purchasing Manager, at 2963 N. 23 Street, La Porte, Texas 77571 by 2:00 p.m. on July 12, 2011. Seven copies of bound and sealed proposals are required. The City reserves the right to reject any or all proposals submitted. During the evaluation process, the City reserves the right, where it may serve the City's best interest, to request additional information or clarification from proposers, or to allow corrections of errors or omissions. At the discretion of the City or the Fiscal Affairs Committee, firms submitting proposals may be requested to make oral presentations as part of the evaluation process. The City reserves the right to retain all proposals submitted and to use any ideas in a proposal regardless of whether that proposal is selected. Submission of a proposal indicates acceptance by the firm of the conditions contained in the request for proposals, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the City and the firm selected. 11 It is anticipated the selection of a firm will be completed by July 28, 2011. Following the notification of the selected firm it is expected that a contract will be executed between both parties by August 8, 2011. B. TERM OF ENGAGEMENT A three -year contract with three (3) one -year renewable options is contemplated, subject to satisfactory performance, the satisfactory negotiation of terms (including price acceptable to both the City and the selected firm), and the concurrence of the City Council and the annual availability of an appropriation. However, if funds are not made available after such request, then the City of La Porte may terminate this agreement with thirty (30) days written notice. C. SUBCONTRACTING Subcontracting of any portion of the audit process will not be allowed without the prior written consent of the City. II. NATURE OF SERVICES REQUIRED A. GENERAL The City is soliciting the services of qualified firms of certified public accountants to audit its financial statements for the fiscal years ending September 30, 2011, 2012, and 2013, with option to audit the City's financial statements for each of the three subsequent fiscal years. These audits are to be performed in accordance with the provisions contained in this request for proposals. B. SCOPE OF WORK TO BE PERFORMED The City desires the auditor to express an opinion on the fair presentation of its governmental activities, its business type activities, its aggregate discretely presented component units, each of its major funds and its aggregate remaining fund information in conformity with generally accepted accounting principles. The City also desires the auditor to express an opinion on the fair presentation of its combining and individual fund financial statements and schedules in conformity with generally accepted accounting principles. The auditor is not required to audit the supporting schedules contained in the comprehensive annual financial report. However, the auditor is to provide an "in relation to" opinion on the supporting schedules based on the auditing procedures applied during the audit of the basic financial statements and the combining and individual fund financial statements and schedules. The auditors are not required to audit the introductory section of the report or the statistical section of the report. 12 The auditor shall also be responsible for performing certain limited procedures involving required supplementary information required by the Governmental Accounting Standards Board as mandated by generally accepted auditing standards. The auditor is not required to audit the schedule of expenditures of federal awards. However, the auditor is to provide an "in relation -to" report on that schedule based on the auditing procedures applied during the audit of the financial statements. From time to time, the City may request the auditor to perform other audits and reviews not specifically provided for under this section. If such a request is made, the auditor shall submit, at the City's request, a separate proposal for completing the engagement, along with a proposed fee schedule. The City reserves the right to contract any additional audits or reviews with whomever they choose. C. AUDITING STANDARDS TO BE FOLLOWED To meet the requirements of the request for proposals, the audit shall be performed in accordance with: Generally accepted auditing standards (GAAS) as set forth by the American Institute of Certified Public Accountants, the standards for financial audits set forth in the U.S. General Accounting Office's (GAO) Government Auditing Standards(1994), the provisions of the Single Audit Act of 1984 (as amended in 1996) and the provisions of U.S. Office of Management and Budget (OMB) Circular A -133, Audits of States, Local Governments and Non - Profit Organizations, Audits of State and Local Governments as well as the following additional requirements: examination for compliance with procedures established by City Charter, City Ordinance or, where applicable, State and Federal Laws or regulations, including the Texas Code of Criminal Procedures. D. REPORTS TO BE ISSUED Following the completion of the audit of the fiscal year's financial statements the auditor shall issue: 1. A report on the fair presentation of the financial statements in conformity with generally accepted accounting principles including an opinion of the fair presentation of the supplementary schedule of expenditures of federal awards in relation to the audited financial statements. 2. If necessary, a report on compliance and internal control over compliance applicable to each major federal program. 13 Compliance and internal control. In the required report on compliance and internal controls, the auditor shall communicate any significant deficiency or material weakness found during the audit. A significant deficiency shall be defined as a control deficiency, or a combination of control deficiencies that adversely affects the entity's ability to initiate authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles, such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected. A material weakness shall be defined as a significant deficiency or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected. Significant deficiencies that are also material weaknesses shall be identified as such in the report. In addition, control deficiencies discovered by the auditors that are neither significant deficiencies nor material weaknesses shall be reported in a separate letter to management which shall be referred to in the report on compliance and internal controls. A control deficiency shall be deemed to have occurred whenever the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. The reports on compliance and internal controls shall include all instances of noncompliance. Auditors 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 Director of Finance. Reporting to the Fiscal Affairs Committee. The auditors shall assure themselves that the City's Fiscal Affairs Committee is informed of each of the following: 1. The auditor's responsibility under generally accepted auditing standards 2. Significant accounting policies 3. Management judgments and accounting estimates 4. Significant audit adjustments 5. Auditor's judgments about the quality of the entity's accounting principles 6. Other information in documents containing audited financial statements 7. Disagreements with management 8. Management consultation with other accountants 9. Major issues discussed with management prior to retention 10. Difficulties encountered in performing the audit 14 E. SPECIAL CONSIDERATIONS 1. The City will send its comprehensive annual financial report to the Government Finance Officers Association of the United States and Canada for review in its Certificate of Achievement for Excellence in Financial Reporting program. It is anticipated that the auditor will be required to provide special assistance to the City to meet the requirements of that program. 2. The schedule of federal and state financial assistance and related auditor's report, as well as the reports on the internal control structure and compliance are not to be included in the CAFR, but are to be issued separately. Twenty copies of the grant report are to be typed and printed by the selected auditor and provided to the City. 3. The auditor is required to issue a separate report for our component unit (La Porte Area Water Authority). Twenty copies of the report are to be typed and printed by the selected auditor and provided to the City. This report is to be filed with the Texas Commission on Environmental Control (TCEQ) by February 15. 4. The Tax Increment Reinvestment Zone (La Porte Redevelopment Authority) is a separate entity that is reported as a blended component unit in the city's report. 5. The La Porte Development Authority (Section 4B Sales Tax) is reported as a blended component unit in the city's report. F. WORKING PAPER RETENTION AND ACCESS TO WORKING PAPERS All working papers and reports must be retained, at the auditor's expense, for a minimum of three (3) years from the date of the report, unless the firm is notified in writing by the City of the need to extend the retention period. The auditor will be required to make working papers available, upon request, to the following parties or their designees: City of La Porte Federal Grant Agencies and Other Federal Agencies State of Texas Grant Agencies and Other State of Texas Agencies Auditors of entities of which the City is a sub - recipient of grant funds In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting significance. 15 III. DESCRIPTION OF THE GOVERNMENT A. Name of Contact Person The auditor's principal contact with the City will be Michael G. Dolby, Director of Finance, or a designated representative, who will coordinate the assistance to be provided by the City to the auditor. Proposers who want additional information or clarification should submit written requests to the Purchasing Manager, Susan Cream. Written responses will be prepared and delivered to all parties receiving this request for proposal. B. Background Information The City operates under the Manager /Council form of government as established by its charter. Moreover, we have one Assistant City Manager as well as various department and division heads. The City serves an area of 19 square miles with a population of 33,800 and has a 2010 -2011 operational budget of $64 million dollars. We have received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association for the past twenty nine years. The City's fiscal year begins on October 1 and ends on September 30. The City provides the following services to its citizens: public safety (police and fire), public works, parks and recreation, water and sewer utilities and general administrative services. The City had a total payroll of approximately $29 million covering 456 employees at September 30, 2011. The accounting and financial reporting functions of the City are centralized. More detailed information on the government and its finances can be found in the CAFR and Annual Operating Budget which can be obtained from the city's website at www.laportetx.qov. 16 C. Fund Structure The City used the following fund types and account groups in its financial reporting for the fiscal year ended September 30, 2010: Number of Number with Individual Legally Adopted Fund Type /Account Group Funds Annual Budgets General Fund 1 1 Debt Service Funds 1 1 Capital Project Funds 13 9 Enterprise Funds 5 4 Internal Service Funds 3 3 Special Revenue Funds 5 5 D. Budgetary Basis of Accounting The City prepares its budget on a basis consistent with generally accepted accounting principles with the exception of Capital Project Funds, which adopt project length budgets. The city departs from GAAP in the treatment of depreciation and encumbrances. Depreciation of fixed assets is not recognized in proprietary fund budgets. All annual appropriations lapse at fiscal year end. Under the City's budgetary process, outstanding encumbrances at year end are reported as reservations of fund balances since they do not constitute expenditures and liabilities, and the commitments will be re- appropriated and honored the subsequent fiscal year. E. Federal and State Financial Assistance The City of La Porte periodically receives funding from Federal and State Financial Assistance programs. F. Pension Plans The City of La Porte's employees participate in the Texas Municipal Retirement System. In addition, the City's volunteer firemen participate in the State Firemen's Pension Plan. 17 G. Component Units The financial audit of the City of La Porte will include an audit of the La Porte Area Water Authority, which is a blended component unit of the City. The audit of the LPAWA will be performed in compliance with the laws and regulations of the Texas Commission on Environmental Quality. The financial statements of the Tax Investment Reinvestment Zone (La Porte Redevelopment Authority) will be included as a special revenue fund of the city. This entity is audited under a separate engagement. The La Porte Development Corporation (Section 4B Sales Tax) will also be reported as a blended component unit. H. Joint Ventures The City does not participate in joint ventures with other governments. Magnitude of Finance Operations The Finance Department is directed by Michael G. Dolby, Director of Finance and it is made up of 4 divisions: Accounting, Tax, Utility Billing, and Purchasing. The auditors will work primarily with the Controller; however, all Division Managers are expected to have limited involvement. The Director of Finance has 11 years of municipal governmental experience and is a Certified Public Accountant. The remaining managerial staff has over 40 years of collective experience in governmental finance. J. Computer Systems The City's uses an ASP system for the financial system, and the financial and accounting records are maintained by Sungard's (HTE) application, Government Management and Budgetary Accounting (GMBA). The Finance Department uses IBM compatible personal computers that are networked. Most audit working papers and lead schedules are prepared on Excel and can be accessed electronically. It is anticipated that the auditors will have limited access into the city's financial system. Also staff prepares the CAFR in Prosystems. K. Internal Audit Functions The City does not currently have an internal audit function. 18 IV. TIME REQUIREMENTS A. PROPOSAL CALENDAR The following is a list of key dates up to and including the date proposals are due to be submitted: June 16 and June 23 Advertise Request for Proposals July 12 Open Requests for Proposals August 8 Council Award B. DATE AUDIT MAY COMMENCE The audit may commence after August 8th the first year and July 15th of each subsequent year under contract. C. SCHEDULE FOR THE 2011 FISCAL YEAR AUDIT (A similar schedule will be developed for audits of future fiscal years.) 1. Interim Work The auditor shall complete all interim work by October 15th of 2011 and September 15th of each year thereafter. 2. Detailed Audit Plan The auditor shall provide the City by September 15 of 2011 and July 15 of each year thereafter, both a detailed audit plan and a list of all schedules to be prepared by the City. 3. Fieldwork (Year End) Fieldwork may commence after October 30th of each year; however, working trial balances will not normally be available until after November 30th of each year. The auditor shall complete all fieldwork by January 15th. 4. Draft Reports Standard: The draft report of the CAFR will be prepared by the City of La Porte and given to the auditor's for review by January 30 of each year. 19 D. ENTRANCE CONFERENCES, PROGRESS REPORTING AND EXIT CONFERENCES (A similar time schedule will be developed for audits of future fiscal years if the City exercises its option of additional audits.) At a minimum, the following conferences should be held by the dates indicated. Week of Sept 15 Entrance conference with the Director of Finance and all appropriate finance department personnel The purpose of this meeting will be to discuss prior audit problems and the interim work to be performed. This meeting will also be used to establish overall liaison for the audit and to make arrangements for work space and other needs of the auditor. Oct 15 Progress conference with the Director of Finance and appropriate finance department personnel and appropriate department heads The purpose of this meeting will be to summarize the results of the preliminary review and to identify the key internal controls or other matters to be tested and discuss the year -end audit work to be performed. Dec 1 Entrance conference with the Director of Finance to commence year -end audit work Jan 15 Exit conference with the Director of Finance and appropriate finance department personnel The purpose of this meeting will be to summarize the results of the field work and to review significant findings. Feb 8 Present compliance report to La Porte Area Water Authority Board Mar 12 Present audit report to Fiscal Affairs Committee and City Council. E. FINAL REPORT DUE DATES The final reports are due on or before March 12 of each year. Date for submission of the management letter shall be no later than March 12. 20 V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. FINANCE DEPARTMENT ASSISTANCE The auditors will coordinate their efforts with the Director of Finance to determine possibilities for fee reduction through utilizing available financial and clerical staff and will endeavor to accomplish the audit on a phased basis throughout the year to reduce the year -end workload on the government's financial activities. The finance department staff and responsible management personnel will be available during the audit to assist the firm by providing information, documentation and explanations. The preparation of confirmations will be the responsibility of the City. B. STATEMENTS AND SCHEDULES TO BE PREPARED BY CITY STAFF The accounting staff will prepare the necessary "Prepared by Client (PBC's)" working papers normally required for the annual audit. A list of working papers to be prepared by the City must be submitted, in writing, to the City on or before July 15, of each year together with adequate explanatory detail as to the purpose of the working papers as well as method of preparing the working papers. Most working papers and all lead schedules are prepared on Microsoft Office Excel 2007 by the Finance Department. C. WORK AREA, TELEPHONES, PHOTOCOPYING, AND INTERNET ACCESS The City will provide the auditor with reasonable work space, desks and chairs. The auditor will also be provided with access to one telephone line, photocopying and internet access. D. REPORT PREPARATION The City has traditionally prepared the CAFR and reserves the right to prepare the draft and final versions of the CAFR, and to be responsible for the printing. Audit reports are to be addressed to the Honorable Mayor, City Council and City Manager, City of La Porte, Texas. 21 The proposal should include the preparation of the financial statements, notes and all required supplementary schedules of the CAFR, including the typing of the camera -ready master copy of the entire CAFR, as a separately listed item, to be elected at the City's option (Option A). VI. PROPOSAL REQUIREMENTS A. GENERAL REQUIREMENTS 1. Inquiries Inquiries concerning the request for proposals must be made to: Susan Cream, Purchasing Manager 2963 N. 23 Street La Porte, Texas 77571 creams @laportetx.gov (281) 471 -5123 Contact with personnel of the City or City Council, other than the Purchasing Manager regarding this request for proposals may be grounds for elimination from the selection process. 2. Submission of Proposals To achieve a uniform review process and obtain the maximum degree of comparability, it is required that proposals be organized in the manner specified: a. A master copy (so marked) and six (6) copies of the proposal to include the following: i. Title Page Title page showing the request for proposals' subject; the firm's name; the name, address and telephone number of a contact person; and the date of the proposal. ii. Table of Contents Include a clear identification of the material by section and by page number. 22 iii. Transmittal Letter A signed letter of transmittal briefly stating the proposer's understanding of the work to be done, the commitment to perform the work within the time period, a statement why the firm believes it to be best qualified to perform the engagement and a statement that the proposal is a firm and irrevocable offer for 90 days. Give the names of the persons who will be authorized to make representations for the proposer, their titles, addresses and telephone numbers. iv. Executed copies of Proposers Schedule of Professional Fees, Expenses, Guarantees and Warranties, in the format as attached to this request for proposal (Appendix A). b. Proposers should send the completed proposal, addressed as shown, to: Sealed RFP #11509 - Professional Auditing Services City of La Porte Susan Cream, Purchasing Manager 2963 N. 23 Street La Porte, Texas 77571 B. TECHNICAL PROPOSAL In the transmittal section of the proposal, the proposer should address the following subjects. 1. General Requirements The purpose of the technical proposal is to demonstrate the qualifications, competence and capacity of the firms seeking to undertake an independent audit of the City in conformity with the requirements of this request for proposals. As such, the substance of proposals will carry more weight than their form or manner of presentation. The technical proposal should demonstrate the qualifications of the firms and of the particular staff to be assigned to this engagement. It should also specify an audit approach that will meet the request for proposal requirements. 23 The technical proposal should address all the points outlined in the request for proposals. The proposal should be prepared simply and economically, providing a straightforward, concise description of the proposer's capabilities to satisfy the requirements of the request for proposals. While additional data may be presented, the following subjects, items Nos. 2 through 10, must be included. They represent the criteria against which the proposal will be evaluated. 2. Independence The firm should provide an affirmative statement that it is independent of the City as defined by generally accepted auditing standards (GAAS) and. General Accounting Office's Government Auditing Standards (GAGAS). The firm also should provide an affirmative statement that it is independent of all the component units of the City as defined by those same standards. The firm should also list and describe the firm's (or proposed subcontractors') professional relationships involving the City or any of its component units for the past five (5) years, together with a statement explaining why such relationships do not constitute a conflict of interest relative to performing the proposed audit. In addition, the firm shall give the City written notice of any professional relationships entered into during the period of this agreement. 3. License to Practice in Texas An affirmative statement should be included indicating that the firm and all assigned key professional staff are properly licensed to practice accounting in Texas. 4. Firm Qualifications and Experience The proposal should state the size of the firm, the size of the firm's governmental audit staff, the location of the office from which the work on this engagement is to be performed. Also, the number and nature of the professional staff to be employed in this engagement on a full -time basis and the number and nature of the staff to be so employed on a part -time basis. The firm is also required to submit a copy of the report on its most recent external quality control review, with a statement whether that quality control review included a review of specific government engagements. 24 The firm shall also provide information on the results of any federal or state desk reviews or field reviews of its audits during the past three (3) years. In addition, the firm shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three (3) years with state regulatory bodies or professional organizations. 5. Partner, Supervisory and Staff Qualifications and Experience The firm should identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement and indicate whether each such person is licensed to practice as a certified public accountant in Texas. The firm also should provide information on the government auditing experience of each person, including information on relevant continuing professional education for the past three (3) years and membership in professional organizations relevant to the performance of this audit. The firm should provide as much information as possible regarding the number, qualifications, experience and training, including relevant continuing professional education, of the specific staff to be assigned to this engagement. The firm also should indicate how the quality of staff over the term of the agreement would be assured. The proposer should identify the extent to which staff to be assigned to the audit reflect the City's commitment to diversity. Audit personnel may be changed at the discretion of the proposer provided that replacements have substantially the same or better qualifications or experience. 6. Prior Engagements with the City of La Porte The firm should list separately all engagements within the last five years, ranked on the basis of total staff hours, by type of engagement (i.e., audit, management advisory services, other). For each engagement, the firm should indicate the scope of the work, date, engagement partners, total hours, the location of the firm's office from which the engagement was performed, and the name and telephone number of the principal client contact. 25 7. Similar Engagements with Other Government Entities For the firm's office that will be assigned responsibility for the audit, list the most significant engagements (minimum of 5) performed in the last five (5) years that are similar to the engagement described in this request for proposals. Indicate the scope of work, date, engagement partners and total hours for each engagement. In order to request references, please provide principal client contact name, telephone number and email address. 8. Specific Audit Approach The proposal should set forth a work plan, including an explanation of the audit methodology to be followed, to perform the services required in Section I1 of this request for proposals. Proposers will be required to provide the following information on their audit approach: a. Proposed segmentation of the engagement; b. Level of staff and number of hours to be assigned to each proposed segment of the engagement; c. Sample sizes and the extent to which statistical sampling is to be used in the engagement; d. Extent of use of EDP software in the engagement; e. Type and extent of analytical procedures to be used in the engagement; f. Approach to be taken in determining laws and regulations that will be subject to audit test work; g. Approach to be taken in drawing audit samples for purposes of test of compliance. h. Approach to be taken to gain and document an understanding of the city's internal control structure. 9. Scope of Required Services Clearly describe the scope of the required services to be provided. The auditors shall familiarize themselves with and comply with the provisions of any and all federal and state statutes; bond covenants; administrative code and orders; rules and regulations that may pertain to the work required in the engagement. 26 Additionally, the auditors shall review the CAFR, to assure that appropriate Generally Accepted Accounting Standards have been followed in its preparation to increase its chances of receiving the Government Finance Officers Association's Certificate of Excellence in Financial Reporting Award. Although the award is not guaranteed, the auditor will perform sufficient prudent review of our CAFR. 10. Identification of Anticipated Potential Audit Problems The proposal should identify and describe any anticipated potential audit problems, the firm's approach to resolving these problems and any special assistance that will be requested from the City. 11. Report Format The proposal should include sample formats for required reports. C. NOT TO EXCEED FEE PROPOSAL The format established in Appendix A will be used to capture the costs portion of the proposal. Please submit Appendix A in a separate sealed envelope and clearly marked with RFP number and description. The City will not be responsible for expenses incurred in preparing and submitting the technical proposal or the not to exceed fee proposal. Such costs should not be included in the proposal. The not to exceed fee proposal should include the following information: a. Name of Firm; b. Certification that the person signing the proposal is entitled to represent the firm, empowered to submit the proposal and authorized to sign a contract with the City of La Porte. c. A total all-inclusive Not To Exceed Fee for auditing services for each of the fiscal years ending September 30, 2011, 2012, and 2013. Identify the fee for out -of pocket expenses, if any, separately from the fee for audit services. d. A total all-inclusive Not to Exceed Fee for the preparation of a camera -ready master copy of the CAFR, excluding the Letter of Transmittal (Option A). 27 VII. EVALUATION PROCEDURES A. REVIEW OF PROPOSALS The City reserves the right to retain all proposals submitted, and to use any idea in a proposal regardless of whether that proposal is selected. B. EVALUATION CRITERIA The selection committee will evaluate all proposals that are submitted. Selection ratings will be based on 100 -point scale. Ranking will be reflected as below: Item Criteria Points 1 Demonstrated technical expertise and experience 30 2 Adequacy of staffing, sampling techniques, analytical 25 procedures, etc. 3 References and qualifications 25 4 Completeness and conformity of the reply of the RFP 10 5 Cost 10 Total 100 C. ORAL PRESENTATIONS During the evaluation process, the Fiscal Affairs Committee may, at its discretion, request any one or all firms to make oral presentations. Such presentations will provide firms with an opportunity to answer any questions the Fiscal Affairs Committee may have on a firm's proposal. Not all firms may be asked to make such oral presentations. D. FINAL SELECTION The City will select a firm based upon the recommendation of the Fiscal Affairs Committee and approval of the La Porte City Council. The City reserves the right to conduct pre- contract negotiations with the most successful proposer. It is anticipated that a firm will be selected by August 8, 2011. Following notification of the firm selected it is expected a contract will be executed between both parties by August 9, 2011. 28 E. RIGHT TO REJECT PROPOSALS Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposals unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the City and the firm selected. The City reserves the right to conduct personal interviews of all proposers prior to selection. The City will not be liable for any costs incurred by the proposer in connection with such interview (i.e., travel, accommodations, etc.) The City reserves the right, without prejudice to reject any or all proposals, and in its sole discretion, to accept the proposal it considers most favorable to the City's interest. The City further reserves the right to reject all proposals and seek new proposals when such procedure is reasonable and in the best interest of the City. 29 APPENDIX A SCHEDULE OF PROFESSIONAL FEES, EXPENSES GUARANTEES AND WARRANTIES FOR PROFESSIONAL AUDITING SERVICES PART 1 - Annual Not To Exceed Fee for the completion of the base financial audit, as outlined and described in Section II, B, C and D. For Year Ending September 30, 2011 Hourly Hours Rates Total Partners $ $ Managers $ $ Supervisory staff $ $ Staff $ $ Subtotal Part 1 Out -of- Pocket expenses: Meals and lodging Transportation Arbitrage Reporting Other (specify): Other (specify): Other (specify): Total for Part 1 — (annual all-inclusive Not to Exceed Fee) $ Annual all- inclusive Not to Exceed Fee for 2012 $ Annual all-inclusive Not to Exceed Fee for 2013 $ Annual all-inclusive Not to Exceed Fee for 2014 $ Annual all- inclusive Not to Exceed Fee for 2015 $ Annual all- inclusive Not to Exceed Fee for 2016 $ 30 APPENDIX A, CONTINUED PART 2 — Not to Exceed Fee for completion of any items in Section II E that will be charged separately. For Year Ending September 30, 2011 Nature of Service to be Provided Total Price Total for Part 2 $ Annual Not to Exceed Fee for 2012 $ Annual Not to Exceed Fee for 2013 $ Annual Not to Exceed Fee for 2014 $ Annual Not to Exceed Fee for 2015 $ Annual Not to Exceed Fee for 2016 $ 31 APPENDIX A, CONTINUED PART 4 — Guarantees and Warranties GUARANTEES The proposer certifies it can and will provide and make available, at a minimum, all services set forth in Section II, Nature of Services Required. WARRANTIES A. Proposer warrants that it is willing and able to comply with State of Texas laws with respect to foreign (non -state of Texas) corporations. B. Proposer warrants that it is willing and able to obtain an errors and omissions insurance policy providing a prudent amount of coverage for the willful or negligent acts, or omissions of any officers, employees or agents thereof. C. Proposer warrants that it will not delegate or subcontract its responsibilities under an agreement without the express prior written permission of the City. D. Proposer warrants that it is willing and able to meet required dates and report deadlines. E. Proposer warrants that all information provided by it in connection with this proposal is true and accurate. Signature of Official: Name (typed): Title: Firm: Date: 32