2020-05-28-Finance-Audit-Committee-Agenda.Pdf
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AGENDA FINANCE/AUDIT COMMITTEE SPECIAL MEETING NOTICE MAY 28, 2020 PUBLIC MEETING 2:00 P.M. Members Terry Tornek, Mayor Margaret McAustin, District 2 John J. Kennedy, District 3 Victor Gordo, District 5 STAFF Matthew Hawkesworth, Director of Finance Theresa Fuentes, Assistant City Attorney Gloria Acevedo, Recording Secretary MISSION STATEMENT The City of Pasadena is dedicated to delivering exemplary municipal services, responsive to our entire community and consistent with our history, culture and unique character. In compliance with the Americans with Disabilities Act of 1990, Assistive Listening Devices are available at all Pasadena City Council meetings. Assistive Listening headphones and neckloops can be checked out 20.20000at the desk of the Sergeant-at-Arms, located inside the City Council Chambers. Language translation services are available for this meeting by calling (626)744-4124 at least 24 hours in advance. Habrá servicio de interpretación disponible para éstas juntas llamando al (626)744-4124 por lo menos con 24 horas de anticipación. Meetings are broadcast live on cable Channel 3 and on the Internet at http://pasadena.granicus.com/mediaplayer.php?camera_id=2&publish_id=9 and https://www.pasadenamedia.org/watch/ (Click on Video Streamlining on the right side of the screen). Items on the agenda may not be called in order listed. Agendas and supporting documents are available on the Internet at https://www.cityofpasadena.net/commissions/city-council-finance-committee/ Materials related to an item on this Agenda submitted to the Finance/Audit Committee after distribution of the agenda packet will be posted online and listed as: “Supplemental Agenda Material Received after the Posting of the agenda” PURSUANT TO EXECUTIVE ORDER N-29-20 ISSUED BY GOVERNOR GAVIN NEWSOM ON MARCH 17, 2020, THE SPECIAL FINANCE/AUDIT COMMITTEE MEETING FOR MAY 28, 2020 AT 2:00 P.M. WILL TAKE PLACE SOLELY BY VIDEOCONFERENCE/TELECONFERENCE. TO ACCESS THE MEETING: http://pasadena.granicus.com/MediaPlayer.php?publish_id=9 AND WWW.PASADENAMEDIA.ORG In order to facilitate public participation at meetings held solely by electronic means, the City will accept public comment in the following manner: 1. Members of the public may submit comments of any length up to two hours prior to the start of the meeting, at the following email address: [email protected] Please be aware that, while these comments will be provided to the members of the body and will become part of the meeting record, they will not be read aloud. Any comment submitted in this fashion will be forwarded to the legislative body prior to the start of the meeting. 2. During the meeting, members of the public may submit up to 200 words regarding items on the agenda, at the following webpage: www.cityofpasadena.net/commissions/public-comment If you wish your comments to be read aloud during the meeting, please indicate so on the form. If you submit more than one form, only the first one received will be read aloud. The City reserves the right to summarize comments if necessary for the orderly and timely flow of the meeting. All comments in their entirety will become part of the meeting record and will be forwarded to the legislative body. 3. If assistance is needed by phone, please call the City Clerk’s Office at: (626) 744-4124. IF YOU NEED A REASONABLE MODIFICATION OR ACCOMMODATION PURSUANT TO THE AMERICANS WITH DISABILITIES ACT BECAUSE YOU ARE UNABLE TO PARTICIPATE ELECTRONICALLY AS SET FORTH ABOVE, CONTACT THE CITY CLERK’S OFFICE AS SOON AS POSSIBLE AT (626) 744-4124 OR [email protected]. SPECIAL MEETING AGENDA FINANCE/AUDIT COMMITTEE MAY 28, 2020 Public Meeting: 2:00 P.M. Council Chamber, Pasadena City Hall 100 North Garfield Avenue, Room S249 PUBLIC MEETING - 2:00 P.M. ROLL CALL, PLEDGE OF ALLEGIANCE, AND CEREMONIAL MATTERS PUBLIC COMMENT – LIMITED TO ITEMS ON THIS SPECIAL MEETING AGENDA AND WILL BE HEARD AT THE TIME THE ITEM IS CONSIDERED NEW BUSINESS 1. AUTHORIZATION TO ENTER INTO A CONTRACT WITH WHITE NELSON DIEHL EVANS LLP FOR AUDIT SERVICES FOR FISCAL YEARS 2020 – 2022, WITH TWO ONE YEAR OPTIONS 2. ROSE BOWL OPERATING COMPANY FINANCIAL DISCUSSION 3. FY 2021 RECOMMENDED OPERATING BUDGET DISCUSSION 4. AMENDMENTS TO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 5. AMENDMENTS TO FISCAL YEAR 2020 CAPITAL IMPROVEMENT PROGRAM BUDGET INFORMATION ONLY 6. Capital Improvement Program FY 2020 Quarter Monitoring Report Activity Through March 31, 2020 7. Work Plan for Upcoming Finance Committee Meeting Recording Secretary 8. APPROVAL OF MINUTES February 10, 2020 Regular Meeting February 24, 2020 Regular Meeting March 9, 2020 Cancellation of Regular Meeting March, 23, 2020 Cancellation of Regular Meeting April 13, 2020 Cancellation of Regular Meeting April 27, 2020 Cancellation of Regular Meeting May 11, 2020 Cancellation of Regular Meeting May 25, 2020 Cancellation of Regular Meeting ADJOURN 2 Attachment 1 Department of Finance AWARD AUDIT CONTRACT FOR FISCAL YEARS 2020 TO 2022 PLUS TWO OPTIONAL YEARS TO WHITE NELSON DIEHL EVANS, LLP Robert Ridley Controller May 28, 2020 Finance/Audit Committee/City Council Item 1 (Finance/Audit Committee); Item XX (City Council) Selection Process Department of Finance • City Charter Requirement to hire auditor • Requested from bidders: > Enhanced audit - samples from all funds required > Description of how sampling from all funds will be accomplished > Cost of sampling from all funds > Increased effort on the part of staff and auditor due to the impact of COVID-19 2 Selection Process Department of Finance • Followed GFOA recommended process • RFP packets were made available on the City’s website > Finance Department directly notified 18 firms • PlanetBids Online System > 23 Vendors downloaded the Request for Proposals • Seven proposals were received 3 Selection Process Department of Finance • Top four firms were interviewed • Selection Panel composed of: > Director of Finance > Controller > Assistant General Manager of Pasadena Water and Power > Director of Finance, Pasadena Center Operating Company > Two Principal Accountants • White Nelson Diehl Evans, LLP (WNDE) was selected as the first choice by the Selection Panel 4 Selection Process Department of Finance SCORING MATRIX FIRM PERSONNEL METHOD- SAMPLING DOLLAR LOCAL SMALL/MICRO TOTAL FIRM QUAL. QUAL. OLOGY METHOD COST BID PREFERENCE PREFERENCE POINTS (25 Points) (25 Points) (10 Points) (15 Points) (15 Points) (5 Points) (5 Points) (100 Points) Eide Bailly 22 21 9 12 9 5 0 77.5 Lance Soll & Lunghard 22 23 9 12 13 0 0 79.3 Macias, Gini & O'Connell 24 23 10 13 10 0 0 79.3 White Nelson Diehl Evens 23 23 9 13 14 0 0 81.2 5 Recommended Firm Department of Finance • White Nelson Diehl Evans, LLP qualifications: > 90 years of auditing California government agencies > Eight city clients using the Tyler Munis Accounting System > Currently auditing over 100 California governmental agencies > Similar engagements with the Cities of: . Burbank . Santa Barbara . Santa Ana . Irvine . Lancaster 6 Recommended Firm Department of Finance • White Nelson Diehl Evans, LLP qualifications: > Experience with auditing water and/or power enterprises: . Burbank . Lancaster . Victorville . Coachella Water District . Orange County Water District 7 Recommended Firm Department of Finance • White Nelson Diehl Evans, LLP qualifications: > Fees: . $223,850 (FY 2020) . $223,850 (FY 2021) . $230,560 (FY 2022) . $237,470 (FY 2023) Optional Year . $244,600 (FY 2024) Optional Year > Cost of enhanced scope: . $30,950 (FY 2020) . $95,960 (FY 2020 to 2022) . $172,350 (FY 2020 to 2024) 8 Recommended Firm Department of Finance • White Nelson Diehl Evans qualifications: > Robert Callanan, CPA, Engagement Partner . Over twenty-nine years experience in governmental audits > Natin Patel, CPA, Technical Review Partner . Over thirty years experience in governmental audits > Kassie Radermacher, CPA, CFE, Enhanced Procedures Partner 9 Expanded Audit Scope Department of Finance • Expanded Audit Scope Methodology > Samples will be selected from all funds > All funds will have an individual materiality level determined > This means larger sample sizes and increased level of assurance, when auditors state “the financial statements are presented fairly, in all material respects” 10 Recommendation Department of Finance • Find that action is not subject to CEQA • Authorize the City Manager to execute a contract with White Nelson Diehl Evans, LLP, selecting the enhanced scope with samples from all funds • Authorize the City Manager to award two one- year extensions for FY 2023 and FY 2024 11 May 28, 2020 TO: City Council Finance Committee FROM: Rose Bowl Operating Company (RBOC) SUBJECT: RBOC Financial Status RECOMMENDATION This is an information item. BACKGROUND When it was decided in 2009 that the Rose Bowl Stadium was going to undergo a major renovation, the decision demonstrated that the City and RBOC believed in the viability and in the future of the fabled stadium. The renovation ultimately enabled the historic venue to continue to be one of the key centerpieces for Pasadena. But as the years have passed, new challenges have arisen, and the Stadium’s financial future is extremely fragile. Before we identify the challenges, let us not forget the incredible successes in recent years: The iconic Stadium underwent a major renovation, substantially completed in 2013. Legacy Connections (d.b.a. Legacy Foundation) was created in 2013 and has raised millions of dollars in much-needed capital funds for the Rose Bowl. The use of the Stadium has expanded well-beyond college football, as music, international soccer and enterprise event strategies have proven to be successful. Brookside Golf Course continues to have an outstanding reputation and serves as a venue for other key revenue sources (e.g. music festival). Relationships with the Rose Bowl neighbors have improved, a very important step if the RBOC is going to be successful in the long-term. Over the past ten years, the RBOC has had success in keeping the Stadium relevant. Some aspects of the RBOC business model exceeded expectations while others have not.