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k't <br />MEQUEST FOR COUNCIL ACTION <br />Date: 10/24/11 <br />Item No.: 7 . i <br />City Manager Approval <br />Item Description: Approve a 3-Year Audit Services Agreement with Kern DeWenter Viere (KDV) <br />11 BACKGROUND <br />2 State Statute requires all municipalities to obtain an independent annual financial audit. The current audit <br />3 services contract expired at the conclusion of the most recent audit. In accordance with the City's <br />4, Professional Services Policy, City Staff prepared and issued a request for proposal (R FP) to qualified firms <br />5 in the metro area. We received five responses. Each of these responses was evaluated by the Finance <br />6 Director and Assistant Finance Director based on the following criteria: <br />"7 <br />8 1) Experience in municipal audits for cities our size <br />9 2) Experience in the Government Finance Officers Association 'Excellence in Financial Reporting' <br />110 award program <br />11 3) Experience and strength of the assigned audit team <br />12 4) Overall price <br />13 <br />14, Overall price quotes for the cumulative 3-year period ranged from $,93,180 to $,114,200. From the list of <br />15 respondents, City Staff selected 2 finalists to interview. The finalists included the firms of-, Kern <br />116 DeWenter, Viere (KDV), and Malloy, Montague, Karnowski, and Radosevich (MMKR). MMKR was the <br />1 7 most recent City Auditor. <br />11 111",',':1'1111 <br />119 At the conclusion of the interviews Staff also sought input from various cities regarding their engagements <br />20 with these two firms. used on that input, along with the information provided during the interview and in <br />2 1 the RFP, City Staff recommends that the City hire KDV as the City Auditor for the Fiscal Year 2011-2013. <br />22 <br />23 Enclosed is an Engagement Letter with KDV. A standard Professional Services Agreement will also be <br />24, entered into consistent with the City's Professional Services Policy. That Agreement is expected to be <br />25 executed in the next week. <br />26 POLICY OBJECTIVE <br />27 A 3-year term for Audit Services is consistent with the City's Professional Services Policy. <br />28 FINANCIAL IMPACTS <br />29 The 3-year audit services agreement with KDV calls for a fee of $,30,400 in 2011, $,31,060 for 2012, and <br />30 $,31,720 for 2013. The 2012 & 2013 Preliminary Budget can accommodate the proposed fee. <br />Page I of 2 <br />