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Home My WebLink AboutURA RES 2019-11 RESOLUTION' NO, WIT1,11FOR 'HE . Z ENDED SEPTEMBER, 30. 2019. E IT HEREBYEISOLV�D 'Ib,y the Urban Renewal. Agency of the City, of Caldwell, Idaho, to approve the audit ficc proposal. wi.t.h 'ide Baiflyeto as set forth in, fell. PASSED BY 'THE ..'RBA RE AL AGENCY this 8",day of July, 2019. APPROVEd"D BYTHE, CHAIRMAN OF THE URBANRENEWALAGENCYOF THE CITY OF CAS� L . 80",day of Juty', 2019 A pro �00 d By I Cha i, �A �w 4 ""i Secretar,Y7 IIIC10*44, �� 4 f x I� r Jy. � 0 � 1 y ri#4F6arl+Gigs ti . � � � o�� a M. EMORA,,NDUM �r Tu. al d e e Urbian, Renewal, Agency Meefing .'"late JuIv 8t' - MINION 11201.7AM 1 41 i, ENDA X to SUBJECT: Department Stibittittals, i Building DeEa-rYfi 20 1,9 Fie Proposal from Eide Baitly C Clerk .ii,an,ce pau n 1"anise Resources Fire tit Police Dqaarttnent PLi �� S bfic Streets e a u'. COS I P CT Parks and,Recreation. mm... ......... .. FUNDING Airport Information Systejili,s FY2019 Go If'Coul'se SAIA R STA TE. VENT CO I E t'4,deBa1*11y,., de Bailly ALP BUSINESS ADVISOR PRICE PROPOSAL Total All-Inclusive Max1lirr~um Price This erica Proposal is submitted fitted as the proposal in responsile to the solicitatlonfrorn the City Caldwell, Idaho 'he City). Our clien an expect quality Service,at reasonable fees. Elide,Bailly has established a reputation ' it idin�g"quality w rl air price.The following is a tonal cost estimateproviding audit services for both the aud�it of the financial statements " h City,,,,audit of federal erall awards in accordance with the Uniform Guidance engagement audit of the financial statements, Urban Renewal Agency, and the auclit of the financial statements f the Health Trust-, Aud't Engagement IM P o Audit he financial statements cents he City(includes 25 hours report review and help) $40,000, Audit of'one ma ujor program in a year when,total federal explenditures exceed$ 5, 1, $7j500 implementation of significant Glovernm nt Accounting Standards.We,anticipate helping with,the GASB 68 journal entry,and disclosure,the GASB,75 journal entry n disclosure,and preliminary r isc ui sin ,50 on implementation of GAS,GAS,B 84 and GAS, excess e 25 inure includediu the fe Hourlyrate ir iti u l � 1i report preparation, urm $,125/hluur above).This rate and h estimated to hours will, e negotiated fore an time i�ircurre w _.m..., .m__..._.... .u.�.. . Audit he financialstatements the Urbane Rene l en Ci staff iprep r the financial See Addendum B sue..............s .. Audit of theroan i l statements of the Health Trust. SeleAddendum C Out-off-Pocket Expenses All stages,of theengagement, travel, irir im lg/bi ding/ eli r the reports, and anyout-of-pocket expenses are also included in the above fee., Billing Policy Regarding Telep,honengiuiir e We have found that chents,appreciate access to all of their Berle team members.mbers. e mbr this need,and W11 ensure,all our team members are avalla,ble to service your questions and issues.This level of service is included in the scope ofthe,engagement. if a particular issue surfaces thiat falls outside the scope 'th engagement,we ill bring it to your attention and obtain approval before proceeding on a pathresolution. Fee Philosophy understand you may require additionalservices from time to time, Including accountingand tax research. Our fees, are based on the complexity ofthe iss,lue and,the experience le e1 of the staff members rs necessary to address it. In the event you request additional services, Elide Biallily will obtain,your agreemient on fees before such work would commence. In other,worlds, There will the no "'su rp,rises" or hidden fees. What inspires yau,ifllspires us. 'I,'eildehiail"fly.com Main Sm.,Ste Boise,ID 83702-58583 T 208.344.71510 � F 2,08.34-4.7435 r EOE Our Commitment } . We commit to working with City staff over the summer to streamline the audit documents prepared by City staff for the audit and to train City staff in the report preparation process and implementation of new standards to help keep costs down for the City. Additional Services While not always included in our audit contract,with Eido Bailly as your auditor,we can provide the City the following services: • Information Technology(IT)Consulting a Fraud prevention,detection,and investigation • Service organization Control Reports services • Investment Services • Insurance Services • Strategic planning 0 Risk Management • 1 n-house training of accounting staff 0 Health Care Reform Consulting 9 Board development workshops,including 0 Human resources consulting fiduciary responsibilities a Personnel search • Additional internal control evaluation and testing One of our strong points is our ability to answer operational and advisory questions. Our clients feel comfortable calling us for input and advice on their ideas. Consulting with Eide Bailly can help the City}'look before they leap" into projects. We Want to Continue Working ing rith You Know that you will continue to be a highly valued client. our people are proud to work with the City and desire to continue our trusting relationship with your team. Please contact me at 208.424.3512 or jdaugherty@eidebailly. orn if you would life to discuss any aspect of this price proposal or would life any additional information on Eide Bailly _ and what we can offer the City of Caldwell. Sincerely, Judi Daugherty,CPA Partner ADDENDUM Over the last decade, accountability and transparency for governments has increased significantly.This holds true of the accounting and auditing profession as well.We have seem a tremendous increase in oversight and regulation over our profession.The auditing standards have changed and increased significantly,a§have the requirements to perform risk assessment over all areas.Standards over audit documentation have also increased significantly as the profession strives to monitor quality at all levels.Along with these changes to the auditing standards and audit documentation comes increased oversight of the peer review process.A clean peer review report if very important to Eide Bailly,thus we strive for an opinion with no significant findings. As we as a firm strive for this higher level of quality to meet the demands and expectations of the oversight agencies and the public while providing a level of assurance over your financial reporting that you require, it becomes more difficult to perform a quality audit for very low fees. Over the years,we have maintained a great relationship with the City and have strived to keep audit costs down as the ity's revenue streams have increased and decreased in an ever-changing economy. The fees for the Urban Renewa I Agency and the Health Trust have not been increased to keep up with increasing costs of doing business and the changes-ire the auditing standards and documentation.we have worked closely with Carol to define the fee structure for the City engagement and have cone to a mutually acceptable structure.At this time,we are requesting the same consideration and negotiations occur for the audits of the URA and the Health Trust. We are aware that the activities of the UI A will be changing as the a cisting UI A sunsets and a new U RA is on the drawing board. Due to the unknown future,the fee structure has been segregated into two sections:Static and Variable.The static estimated hours are the hours required of us to comply with auditing standards regardless of how much activity the entity has.The URA could have a Dank account,a debt balance, and no other activity,and we would still need to perform planning and risk assessment procedures.The variable estimated hours are the ones that can change every year as activity ebbs and flows. Please review Addendum B for the fee proposal for the URA and Addendum C for the fee proposal for the Health Trust. In consideration of the fact that a significant increase in fees in one year is difficult for the City,we are proposing a 5-year plan to get the fees to where they need to be for us,to continue to do the work. Nease let me know if you have any questions on the following fee proposal. ADDENDUM B The following schedule shows the estimated hours required for the Urban Renewal with information known at this time., Future standards that need to implemented may cause differences in,these estimates, especially in the year of implementation., In addition, as,the cost of doing business continues to increase,the blended rate of$140 an hour may need to be revialuatedat some point during the next 5 years. On the,flip side, as Eide,Bailly continues to explore the use of data mining"software and bolts,as part of the tolols we use to assist with the audit the estimated hours could go down. Hours Bllendeld Partner Manager Staff Admiri Total Fee Rate Planning 2 5 15 22 Ad min Support 5 5 TB Importing Reporting 5 8 13 Supervision 3 3 6 ......................... Static IHours, 51 13 24 5, 47 $140 $6,580 ..................... ....--.....T Audit prlocedures 37 37 ........................ Supervision 5, ill, i rl 16 Variable Hours 5 11, 37' 0 53 $140 $170420 10 247 61 5 100 One possibility flor,spreading the fee increase olver the next 5 years is to increase the fee by$1,530 each year. While percentage increase appears high,the actual dollar l amount of the increase is reasonable,. Of course, as is our practice and our guarantee, 'if our actual hours come,in less,that the estimated hours in the schedule above,the proposed fee,will be,reduced. Fees TIncrease Static Fee Vr*labl'e Fee Total Fee from from PY 2018 Fee $6,1580 $,(230 $6350 20l19 Fee $61,580: $1,,300 $7,,8,80, 24% 2020 Fee $6,1580! $2, 3 $914l10, 19% 20121 Fee $6158lO $4p360 $10,94016% 2,012 2 F e,e $61580 $5, 9 12,470 14% 2023 Fee, $615,80 $,7),420 $14),00��-t 12% 0 4 ADDENDUM C The following sche ule shows the estimated hours required for the Health Trust with information known at this, time. Future standards that need to implemented rinay cause differences,in these estimates,,,elsipecially in lu year of implementation. In addition, as the cost of doing business,continues to increase,the blended rate of$140 an hour may need to be revaluated at some point during the next 5 years. in thie flip slide,, as Eide Bailly continues to explore the use of data mining software and bolts as part of the tools,we use to assist with the audit,the estimated hours could go down., Hours, Blended Partner, Manager Staff' Admin Total Fee Rate Planning 1 2 8 min Support 3 3 TB,Importing 1 Reporting 5, 5 10 Supervision 2 2 4 Static HoulYrs 3 9 14 3 29 $140 $4,0060 Audit procedures, 30 30 �Supervisi�on 2 4 6, ............... Variable Hours, 2 4 30 0 '16 $140 $5pO4O 51 13, 44 3 65 $9,�1010 One possibility for spreading thile fee,increase over the next 5 years is to increase,the fee,by$780 each year. While, percentage increase appears high,the acull dollar amount of the increase is reasonable. Of course,as is our priactice and our guarantee, if'our actual hours come in less thief the estimated hiours in the scheclu lei above, the proposed fee will be reduced. Fees Static Fee Variable Fee Total Flee Increase, from PY ...... ....... 2018,Fee, $,4)060 $1,140 $5,200 2019 Fee, $40060 $1,,9201 $5,980 15% 20210 Fee $41,060 $2,7 , $6,7160 13% 2021 Fee, $4,1060 $3t480 $7,540 12% 12022 Fee 1 $14,l060 $4,260 $8,32 10% 12023 Fee $4,, 6 E$5,l040, $9, 1 9% 5