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HomeMy WebLinkAboutR-2002-073 RESOLUTION NO. 2002-073 A RESOLUTION OF THE CITY OF DANIA BEACH, FLORIDA, ACCEPTING THE ENGAGEMENT LETTER SUBMITTED BY S. DAVIS & ASSOCIATES, P.A. FOR THE IMPLEMENTATION OF GASB 34 FOR THE CITY OF DANIA BEACH IN AN AMOUNT NOT TO EXCEED $25,000.00; FURTHER, PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the Government Accounting Standards Board ("GASB") has issued GASB Statement 34 which will significantly change both the material presented in the CAFR and the presentation format of the material, which will require considerable supplemental work in the preparation of the CAFR during the fiscal year ending September 30, 20031 WHEREAS, the firm of S.DAVIS & ASSOCIATES, because of their recent audit work with the City of Dania Beach, has become knowledgeable of the City's accounting structure and related information, which will substantially aid in effective and accurate completion of the proposed task; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF DANIA BEACH, FLORIDA: Section 1. That the certain engagement letter dated April 22, 2002, submitted by S. Davis & Associates, P.A., providing assessment for the implementation of GASB 34 for the City of Dania Beach for the year ending September 30, 2003, a copy of which is attached hereto as Exhibit "A", is approved and the appropriate city officials are authorized to execute same. Section 2. That the City Manager is authorized to pay from the General Fund an amount not to exceed $25,000.00 fee for the fiscal year ending September 30, 2002. 1 RESOLUTION NO: 2002- 073 Section 3. That this resolution shall be in force and take effect immediately s upon its passage and adoption. PASSED AND ADOPT T" DAY OF MA 2 0 . YA i-- 14 A RO &NT H. CH LNN, JR. MAYO - COMMISSIONER ATTEST: ROLL CALL: COMMISSIONER BERTINO - YES COMMISSIONER MCELYEA - YES HARLENE JO SON COMMISSIONER MIKES - YES CITY CLERK VICE-MAYOR FLURY - YES MAYOR CHUNN - YES APPROVED AS TO F RM AND CORRECTNESS: BY: TH, M S J. ANSBRO CITY ATTORNEY 2 RESOLUTION NO: 2002- 073 S. DAMS ASS®CIA'I'ES, P.A. Certified Public Accountants & Consultants ® Suite 110Y 2521 Hollywood Boulevard 1515 N.W. 167 Street Hollywood,Florida 33020 Miami,Florida 33169 (954) 927-5900 (305)628-1510 (954) 927-5927 Fax (305)628-1595 Fax April 22, 2002 Honorable Mayor, Members of the City Commission and City Manager City of Dania Beach 100 West Dania Beach Boulevard Dania Beach, Florida 33004 This letter confirms our understanding of the terms and conditions between the City of Dania Beach (the "City") and S. Davis & Associates, P.A. under which we will provide assessment for the implementation of GASB 34. GASB 34 basic financial statements replace the general-purpose financial statements previously required for governments. Previously, governmental financial statements presented a government's funds by fund type and account groups. The government-wide financial statements provide information about cost of services, operating results, and financial position of the government as an economic entity. GASB 34 is effective in three phases based on total annual revenues. The City's implementation date is effective for the fiscal year ended September 30, 2003. The following sets forth our understanding of the terms and objectives of our engagement and the nature and limitations for the services we will provide to assess the effect of GASB 34 requirements on the City's ability to prepare the financial statements and to identify areas where modifications will be necessary to attain and remain in compliance with the standard. The assessment will begin in May 2002. Our procedures will include, but not be limited to, the following: 1. We will meet with an implementation committee comprising management, finance personnel and other relevant areas such as public works and information technology departments. 2. We will identify the needed accounting and financial reporting changes. Member Florida Institute of Certified Public Accountants New York State Society of Certified Public Accountants American Institute of Certified Public Accountants ® Honorable Mayor, Members of the City Commission and City Manager City of Dania Beach Page 2 3. Determine implementation dates for retroactive capitalization of general infrastructure assets. 4. Develop an implementation timetable. 5. Develop mechanisms such as policy and procedural changes and software modifications or replacements to institute the required accounting and financial reporting changes. 6. Discuss the proforma financial statements, note disclosures, management's discussion and analysis and other required supplementary information for the period preceding the implementation period. Our fees will be based on our standard hourly rates for the level of staff assigned as set forth below, plus any out-of-pocket expenses. We cannot estimate, with any degree of certainty, the total engagement fee, which is dependent on the level of service(s) we are to provide, the number of documents to be reviewed, the degree of revisions to be made and the amount and length of certain meetings. However, we estimate our fees for these services will not exceed $25,000. Of course, this assumes that the existing Plan is, for the most, part viable and that there will not be a need to make wholesale changes to the Plan. We will submit monthly progress billings at the rates indicated below. Name of Consultant/ Title Hourly Rate Engagement Partner $ 205 Manager 155 Senior 125 Staff 90 Administration 50 Of course, if the time expended is below the estimates above, then the fee will be adjusted accordingly. If we foresee a significant expenditure of time in excess of the estimates, then we will discuss with management and obtain approval prior to incurring these charges. If the foregoing is in accordance with your understanding of the terms and conditions of our engagement, then please acknowledge by signing below and returning a signed copy of this letter to our offices. • ® Honorable Mayor, Members of the City Commission and City Manager City of Dania Beach Page 3 We look forward to assisting your staff with this very important endeavor and thank you in advance for the opportunity to do so. If you have any questions, comments, or concerns, please feel fi-ee to contact me at (954) 927-5900. We look forward to working with you and your staff. Sincerely, aiv�� s S. Davis &Associates, P.A. RESPONSE: This letter correctly sets_fo the understanding of the City of Dania Beach: Si ure IVAN PATO Printed Name CITY MANAGER Title JUNE 11 , 2002 Date ® DISPUTE RESOLUTION PROCEDURES The following procedures shall be used to resolve any controversy or claim ("dispute") as provided in our engagement letter of April 22, 2002. If any of these provisions are determined to be invalid or unenforceable, the remaining provisions shall remain in effect and binding on the parties to the fullest extent permitted by law. Mediation A dispute shall be submitted to mediation by written notice to the other party or parties. In the mediation process, the parties will try to resolve their differences voluntarily with the aid of an impartial mediator, who will attempt to facilitate negotiations. The mediator will be selected by agreement of the parties. If the parties cannot agree on a mediator, a mediator shall be designated by the American Arbitration Association ("AAA") or such other neutral facilitator acceptable to both parties. The mediation will be conducted as specified by the mediator and agreed upon by the parties. The parties agree to discuss their differences in good faith and to attempt, with the assistance of the mediator, to reach an amicable resolution of the dispute. The mediation will be treated as a settlement discussion and therefore will be confidential. The mediator may not testify for either party in any later proceeding relating to the dispute. No recording or transcript shall be made of the mediation proceedings. Each party will bear its own costs in the mediation. The fees and expenses of the mediator will be shared equally by the parties. Arbitration If a dispute has not been resolved within 90 days after the written notice beginning the mediation process (or a longer period, if the parties agree to extend the mediation), the mediation shall terminate and the dispute will be settled by arbitration. The arbitration will be conducted in accordance with the procedures in this document and the Arbitration Rules for Professional Accounting and Related Services Disputes of the AAA as in effect on the date of the engagement letter ("AAA Rules"). In the event of a conflict, the provisions of this document will control. The arbitration will be conducted before a panel of three arbitrators, regardless of the size of the dispute, to be selected as provided in the AAA Rules. Any issue concerning the extent to which any dispute is subject to arbitration, or concerning the applicability, interpretation, or enforcement of these procedures, including any contention that all or part of these procedures are invalid unenforceable, shall be governed by the Federal Arbitration Act and resolved by the arbitrators. No potential arbitrator may serve on the panel unless he or she has agreed in writing to abide and be bound by these procedures. i DISPUTE RESOLUTION PROCEDURES - Continued The arbitrators may not award non-monetary or equitable relief of any sort. They shall have no power to award punitive damages or any other damages not measured by the prevailing party's actual damages, and the parties expressly waive their right to obtain such damages in arbitration or in any other forum. In no event, even if any other portion of these provisions is held to be invalid or unenforceable, shall the arbitrators have power to make an award or impose a remedy that could not be made or imposed by a court deciding the matter in the same jurisdiction. No discovery will be permitted in connection with the arbitration unless it is expressly authorized by the arbitration panel upon a showing of substantial need by the party-seeking discovery. All aspects of the arbitration shall be treated as confidential. Neither the parties nor the arbitrators may disclose the existence, content or results of the arbitration, except as necessary to comply with legal or regulatory requirements. Before making any such disclosure, a party shall give written notice to all other parties and shall afford such parties a reasonable opportunity to protect their interests. The result of the arbitration will be binding on the parties, and judgment on the arbitrators' award may be entered in any court having jurisdiction. • HOLLAND & RrII-I_Y CERTIFIED PUBLIC ACCOUNTANTS • 601 NORTH FERN CREEK SUITE 200 ORLANDO. FLORIDA 32803 (407) 894.6803 DAVID S. HOLLAND,CPA AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS THOMAS F.REILLY,CPA FLORIDA INSTITUTE OF August 17, 2000 CERTIFIED PUBLIC ACCOUNTANTS To the Partners S. Davis &Associates, P.A. We have reviewed the system of quality control for the accounting and auditing practice of S.Davis & Associates, P.A. (the firm) in effect for the year ended November 30, 1999. A system of quality control.encompasses the firm's organizational structure and the policies adopted and procedures established to provide it with reasonable assurance of complying with professional standards. The elements of quality control are described in the Statements of Quality Control Standards issued by the American Institute of Certified Public Accountants (AICPA). The design of the system and compliance with it are the responsibility of the firm. Our responsibility is to express an opinion on the design of the system, and the firm's compliance with the system based on our review. Our review was conducted in conformity with standards established by the Peer Review Board of the AICPA. In performing the review,we obtained an understanding of the system of quality control for the firm's accounting and auditing practice. In addition, we tested compliance with the firm's quality control policies and procedures to the extent we considered appropriate. These tests covered the application of the firm's policies and procedures on selected engagements. Because our review was based on selective tests,it would not necessarily disclose all weaknesses in the system of quality control or all instances of lack of compliance with it. Because there are inherent limitations in the effectiveness of any system of quality control, departures from the system may occur and not be detected. Also,projection of any evaluation of a system of quality control to future periods is subject to the risk that the system of quality control may become inadequate because of changes in conditions,or because the degree of compliance with the policies and procedures may deteriorate. In our opinion,the system of quality control for the accounting and auditing practice of S.Davis& Associates, P.A. in effect for the year ended November 30, 1999, has been designed to meet the requirements of quality control standards for an accounting and auditing practice established by the AICPA,and was being complied with during the year then ended to provide the firm with reasonable assurance of complying with professional standards. Holland & Reilly • RESOLUTION NO. 2001-139 A RESOLUTION OF THE CITY OF DANIA BEACH, FLORIDA, ACCEPTING AN ENGAGEMENT LETTER SUBMITTED BY S. DAVIS & ASSOCIATES, P.A. TO PROVIDE AUDITING SERVICES FOR THE CITY OF DANIA BEACH FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2001; PROVIDING FOR AN ANNUAL FEE NOT TO EXCEED $45,000.00; FURTHER, PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Dania Beach (the "City") prepares and has audited its general purpose financial statements in the form of an annual Comprehensive Annual Financial Report ("CAFR"); and WHEREAS, said financial statements are audited in order to obtain an opinion that they are accurately presented in conformity with accounting principles generally accepted in the United States; and WHEREAS, the audit tests the accounting records of the City in order to provide information upon the reliability of such accounting records to the City Commission, City management, and other users of the CAFR; and WHEREAS, the Government Accounting Standards Board ("GASB") has issued GASB Statement 34 which will significantly change both the material presented in the CAFR and the presentation format of the material, which will require considerable supplemental work in the preparation of the CAFR during the next three year period; and WHEREAS, while the standard in the preparation of CAFR's is that municipal entities prepare the financial statements and then have these statements audited by an independent entity, but in the City of Dania Beach the preparation of the financial statements is also substantially done by the independent auditor; and RESOLUTION NO: 2001-139 • WHEREAS, the Director of Finance recommends that the City reach the level of competency where it is capable of preparing its own financial statements, thereby reducing the costs to the City of having such preparation performed by an outside auditor, and that the City undertakes this task while incorporating those changes relative to the implementation of the requirements of GASB 34; and WHEREAS, in order to facilitate the transitions associated with GASB 34 and to accomplish the objective of having City staff prepare the annual financial statements it is desirable to obtain the services of an independent auditor that is familiar with the City's accounting records and practices. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF DANIA BEACH, FLORIDA- Section 1. That the certain engagement letter dated August 1, 2001, submitted by S. Davis & Associates, P.A., providing auditing services for the City of Dania Beach { for the year ending September 30, 2001, a copy of which is attached hereto as Exhibit I "A", is approved and the appropriate city officials are authorized to execute same. Section 2. That the City Manager is authorized to pay from the General Fund an amount not to exceed $45,000.00 on an annual basis for the fiscal year ending September 30, 2001. Section 3. T AFT cost for the preparation, review and printing of the CAFR should not excee $16,0 .00 per year over the period of the contract; said cost to be significantly reduced or eliminated as the City prepares its own financial statements. Section 4. That this resolution shall be in force and take effect immediately upon its passage and adoption. • RESOLUTION NO: 2001-139 PASSED AND ADOPTED THIS 14" DAY OF AUGUST 2001. PAT FLURY MAYOR-COMMISSIONER ATTEST: ROLL CALL: COMMISSIONER BERTINO - ABSENT 04A"�Xl COMMISSIONER MCELYEA - YES CHA LENE J SON COMMISSIONER MIKES - YES ACTING CITY CL RK VICE-MAYOR CHUNN - YES MAYOR FLURY - YES APPROVED AS TO FORM AND/T CORRECTNESS: I BY: ­ THOMAS J. NSBRO CITY ATTORNEY • RESOLUTION NO: 2001-139