CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report

July 2, 2018
CONSENT AGENDA

TO: Honorable Mayor and City Council Members

SUBMITTED BY: Robin Scattini, Finance Manager

APPROVED BY: Chip Rerig, City Administrator

Resolution No. 2018-068, Authorizing the City Administrator to Execute a Professional

Services Agreement with Chavan & Associates, LLP, for Auditing Services in an Amount
SUBJECT:
Not-to-Exceed $96,000 for the First Three (3) Year Period and an Amount Not-to-
Exceed $96,000 for the Optional Second Three (3) Year Period

RECOMMENDATION:
Adopt Resolution No. 2018-068, Authorizing the City Administrator to Execute a Professional Services
Agreement with Chavan & Associates, LLP, for Auditing Services in an Amount Not-to-Exceed $96,000 for the
First Three (3) Year Period and an Amount Not-to-Exceed $96,000 for the Optional Second Three (3) Year
Period

BACKGROUND/SUMMARY:
The City is required to have an annual independent of the City's financial statements, the Harrison Memorial
Library, and other auditing services. The three (3) year professional services agreement with the City's most
recent auditor expired on June 30, 2018. In April 2018, the City issued a Request for Proposals for auditing
services. The notice soliciting proposals was posted on the City's website, in the Carmel Pine Cone on April 13, and
was mailed directly to various auditing firms located within the Monterey Peninsula and surrounding areas. Seven (7)
auditing firms submitted proposals. Proposals were evaluated based upon the firm and lead staff's qualifications and
experience, audit philosophy, approach to working with staff, price, and ability to meet timelines. After evaluating all
proposals, the top three firms were interviewed. Chavan & Associates, LLP, was selected based upon the stated
factors, most notably price, timeliness, and experience with similarly sized cities. Staff is recommending that Council
authorize the City Administrator to enter into a professional services agreement for two (2) periods of three (3) years
each. The first period will commence on July 15, 2018 and shall be completed by June 30, 2021 and will cover the
audit of fiscal years ending June 30, 2018 through June 30, 2020. Upon satisfactory service, the second period will
commence on July 1, 2021 and shall be completed by June 30, 2024 and will cover the audit of the fiscal years ending
June 30, 2021 through June 30, 2023. Ninety (90) days before the end of the first period, staff will evaluate the
auditor for determination of satisfactory performance and approval or denial of implementation of the second three (3)
year period of the agreement. If the second three (3) year period of the agreement is denied, a new Request for
Proposals for auditing services will be issued.

FISCAL IMPACT:
Funds are included within the adopted Fiscal Year 2018-19 budget and will be included in the future fiscal years'
budgets at $32,000 per year.

PRIOR CITY COUNCIL ACTION:

City Council approved Resolution No. 2015-067 with Moss, Levy, and Hartzheim on September 1, 2015 for
audit services.
ATTACHMENTS:

Resolution No. 2018-068

 CITY OF CARMEL-BY-THE-SEA Attachment 1
CITY COUNCIL

RESOLUTION NO. 2018-068

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA AUTHORIZING THE

CITY ADMINISTRATOR TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH CHAVAN AND
ASSOCIATES FOR AUDITING SERVICES IN AN AMOUNT NOT TO EXCEED $96,000 FOR THE FIRST
THREE (3) YEAR PERIOD AND A TOTAL AMOUNT NOT TO EXCEED $96,000 FOR THE OPTIONAL
SECOND THREE (3) YEAR PERIOD
________________________________________________________________________________________

WHEREAS, the City is required to have an annual independent audit of the City’s financial statements,
the Harrison Memorial Library, and other auditing services; and

WHEREAS, in accordance with this requirement the City issued a Request for Proposals for Auditing
Services and the notice soliciting proposals was posted on the City’s website, in the Carmel Pine Cone on April
13, 2018, and was mailed to various auditing firms; and

WHEREAS, upon evaluating the proposals submitted and interviewing various firms, the City wishes to
contract with Chavan and Associates for a three (3) year period in an amount not to exceed $96,000, with an
optional second three (3) year period in an amount not to exceed $96,000; and

WHEREAS, per Municipal Code 3.12.160, any professional services agreement exceeding $25,000 or
more shall require approval by resolution of the City Council.

NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-
THE-SEA does hereby:

1. Authorize the City Administrator to execute a Professional Services Agreement with Chavan and
Associates for auditing services in a total amount not to exceed Ninety-Six Thousand Dollars
($96,000.00) for the first three (3) year period and a total amount not to exceed Ninety-Six Thousand
Dollars ($96,000.00) for the optional second (3) year period. The first period is to commence by
July 15, 2018 and shall be completed by June 30, 2021 (audit of fiscal years ending June 30, 2018
through June 30, 2020). Upon satisfactory performance, the second period will commence on July 1,
2021 and shall be completed by June 30, 2024 (audit of fiscal years ending June 30, 2021 through
June 30, 2023).

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA on this
2nd day of July 2018, by the following roll call vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

SIGNED: ATTEST:

_______________________ ___________________________
Steve G. Dallas, Mayor Thomas A. Graves, MMC
City Clerk