Report Prepared by: Kuljit Singh, Deputy Finance Officer
Title
SUBJECT: Approval of a Third Amendment to the Professional Services Agreement with Eide Bailly LLP for Financial Auditing and Related Services for an Additional $9,120 for a Total Not-to-Exceed Amount of $242,970
REPORT IN BRIEF
Considers approving a Third Amendment to the Agreement with Eide Bailly LLP for Professional Auditing and Related Services, adding $9,120 for a total not-to-exceed amount of $242,970.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving the Third Amendment with Eide Bailly LLP to provide financial audit services of the Successor Agency for an additional $9,120 for a total not-to-exceed amount of $242,970; and,
B. Authorizing the City Manager to execute all necessary documents.
Body
ALTERNATIVES
1. Adopt the motion as recommended by staff; or
2. Modify the action (specify in motion); or
3. Deny the action.
AUTHORITY
Section 1118 of Article XI of the Charter of the City of Merced.
CITY COUNCIL PRIORITIES
As provided for in the 2024-25 Adopted Budget.
DISCUSSION
The former Merced Redevelopment Agency was dissolved in February 2012 following legislation passed in 2011. The City of Merced opted not to act as the Successor Agency, leading the State to form a Designated Local Authority to handle the oversight and closeout of the former Redevelopment Agency’s operations. After nearly 10 years, the Designated Local Authority members proposed transitioning the closeout responsibilities to the City of Merced as the Successor Agency. On July 3, 2023, the City of Merced elected to act as the Successor Agency to the Redevelopment Agency of the City of Merced.
Per HSC Section 34177(n), the Successor Agency, as a separate legal entity under HSC Section 34173(g), must conduct an annual post-audit of its financial transactions and records. To fulfill this requirement, the City of Merced engaged Eide Bailly, its current auditors, to perform the necessary audit. Following a review of the cost proposal, staff determined that issuing a separate set of audited financial statements for the Successor Agency aligns with best practices and historical precedent. The total cost for this approach is $9,120, which will be covered by the Successor Agency.
On March 21, 2021, the City Council approved a five-year professional service agreement with Eide Bailly for annual citywide audits, as required by the City Charter. The original contract amount was set at $204,850 and included financial statement audits and additional audit-related services for fiscal years 2021 through 2025. The First amendment dated July 3, 2023, added $14,000 for Tyler ERP implementation related additional audit services. The second amendment dated October 7, 2023, added additional $15,000 for Prop 64 audit services. With the proposed Third Amendment for the Successor Agency audit, adding an additional cost of $9,120; this brings the total agreement with Eide Bailly, LLP to $242,970.
IMPACT ON CITY RESOURCES
No appropriation is needed. There is sufficient fund within Fund 8100-Successor Agency to cover the audit service fees. Funding for the audit was included in the Department of Finance approved ROPS which is funded with redevelopment property tax trust funds (RPTTF).
ATTACHMENTS
1. Third Amendment to Agreement for Professional Services
2. Second Amendment to Agreement for Professional Services
3. First Amendment to Agreement for Professional Services
4. Original Agreement for Professional Services