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City Council Agenda 06-27-2016Gs MINUTES OF AN ADJOURNED REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS, CALIFORNIA MONDAY, JUNE 27, 2016 CALL TO ORDER An adjourned regular meeting of the City Council of the City of Rolling Hills was called to order by Mayor Dieringer at 7:00 p.m. in the City Council Chamber at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. ROLL CALL Councilmembers Present: Councilmembers Absent: Others Present: Black, Mirsch, Pieper, Wilson and Mayor Dieringer. None Raymond R. Cruz, City Manager. Mike Jenkins, City Attorney. Heidi Luce, City Clerk. Terry Shea, Finance Director. Bryan Gruber, LSL CPA's. Laura Walters, Los Angeles County Fire Dept. OPEN AGENDA - PUBLIC COMMENT WELCOME None CONSENT CALENDAR Matters which may be acted upon by the City Council in a single motion. Any Councilmember may request removal of any item from the Consent Calendar causing it to be considered under Council Actions. A. B. C. D. E. Minutes - Regular Meeting of June 13, 2016. RECOMMENDATION: Approve as presented. Payment of Bills. RECOMMENDATION: Approve as presented. Financial Statement for the Month of May, 2016. RECOMMENDATION: Approve as presented. Allied Recycling Tonnage Report for May, 2016. RECOMMENDATION: Receive and file. RESOLUTION NO. 1186 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS FIXING THE DAY, HOUR AND LOCATION OF REGULAR CITY COUNCIL METTINGS, ESTABLISHING AN ALTERNATE LOCATION FOR CITY COUNCIL MEETINGS AND RESCINDING RESOLUTIONS NO. 22 AND 465. RECOMMENDATION: Adopt as presented. Mayor Pro Tem Black moved that the City Council approve the items on the consent calendar as presented. Councilmember Pieper seconded the motion, which carried without objection. COMMISSION ITEMS None. PUBLIC HEARINGS None. OLD BUSINESS None. NEW BUSINESS CONSIDERATION OF A THREE-YEAR PROFESSIONAL SERVICES AGREEMENT WITH LANCE, SOLL & LUNGHARD, LLC FOR ANNUAL AUDIT SERVICES. Mayor Dieringer introduced the item and asked for staff's comments. Finance Director Shea presented the staff report recommending that the City Council award a three-year professional services agreement for annual audit services to Lance, Soll, Lunghard, LLC (LSL). He reviewed thc RFP process stating that a total of six proposals were received. He stated that staff reviewed the proposals and three firms were selected for interviews with the Finance, Budget, Audit Committee based on their qualifications and price. He stated that all three firms interviewed well and staff selected LSL based on the fact that their proposal was for the lowest cost. He reviewed LSL's qualifications stating that the firm currently audits over 60 cites and several special districts; and they have provided good service over the last six years that they have conducted the City's annual audit. In response to Councilmember Wilson, Finance Director Shea explained the single audit process. Councilmember Wilson also asked about the embezzlement situation that arose in the City of Placentia, which is one of the cities for which LSL provides audit services. Bryan Gruber, Lance, Soll, Lunghard addressed the City Council in response to Councilmember Wilson's question regarding the City of Placentia. He explained that LSL began its contract with the City of Placentia this past year and stated that thc City had an accounting manager that began embezzling funds from the City. He stated that from an audit perspective LSL met its obligations and further explained the financial statement audit process. He stated that the individual in Placentia embezzled funds from City via wire transfers through multiple tiers of hiding and altering information; and there was clear intent to cover those transactions up. Councilmember Wilson expressed concern that a similar situation could happen in Rolling Hills. Discussion ensued concerning thc policies and procedures that are in place to prevent such an occurrence in Rolling Hills. Further discussion ensued concerning the City's process for wire transfers and ACH transfers. City Manager Cruz stated that to help maintain transparency, the Finance, Budget, Audit Committee will be involved in the audit process. Mayor Pro Tem Black commented that during the interviews, he asked these same questions and he feels comfortable that LSL performed the audit correctly and this fraud was not identified because of the way the records were falsified. Following discussion, Councilmember Mirsch moved that the City Council approve and authorize the City Manager to execute a three-year professional services agreement with Lance, Soll, Lunghard, LLC for annual audit services. Councilmember Wilson seconded the motion, which carried without objection. With regard to the concern raised regarding potential fraud against the City, staff was further directed to add wire transfers to the list of checks presented to the City Council at each City Council meeting; and to schedule a meeting with the Finance/Budget/Audit Committee and the audit firm prior to beginning the next audit to discuss areas of concern or areas that should be considered in the next audit. CONSIDERATION OF AMENDMENTS TO THE FY 2016-17 BUDGET CONCERNING CITY COUNCIL TRAVEL AND SUPPLEMENTAL TRAFFIC ENFORCEMENT. Mayor Dieringer introduced the item and asked for staff's comments. City Manager Cruz stated that the FY 16-17 budget was adopted in June and at that time, staff was directed to return with additional information regarding two potential budget adjustments relating to City Council conference/travel and supplemental traffic enforcement. He stated that if the City Council wishes to increase funding for either item, such an adjustment could be accomplished by using funds from the contingency account or through a reduction in another budget line item. Discussion ensued concerning the item related to increasing the budget for City Council conference/travel expenses and whether or not there is value in expending funds in that area. Councilmember Mirsch commented that in some instances there is value in the conferences, specifically for new Councilmembers, but conferences should be evaluated based on the relevancy of the topics being presented. Councilmember Wilson concurred. Mayor Dieringer commented that she finds great value in attending these conferences to learn about potential issues that may impact the City and takes her own personal vacation time to attend. Further discussion ensued concerning historical spending for City Council conference/travel expenses. Councilmember Mirsch suggested that the conference/travel amount be left as budgeted and if a Minutes City Council Meeting 06-27-16 conference arises that would be beneficial, then it could be adjusted later on an individual basis if necessary. Following further discussion, the City Council decided to leave the item as originally budgeted with the understanding that it may be amended if a conference arises that would be beneficial based on the relevance of the agenda topics. Discussion then ensued concerning the item related to increasing the budget for supplemental traffic enforcement. City Manager Cruz stated that this item is before the City Council as a recommendation from the Traffic Commission that the hours for supplemental traffic enforcement be increased back to 350 hours. Councilmember Wilson commented that in addition to the goal of increasing traffic safety, additional patrol cars in the City can also serve as a deterrent to crime as well as address other issues that arise. He further commented that the Traffic Commission regularly hears complaints from residents regarding speeding on Crest Road and Portuguese Bend Road as well as other traffic safety concerns. He stated that he believes that having additional dedicated hours from the Sheriff's Dept. is valuable in addressing public safety. Discussion ensued concerning the hours of patrol that the City receives from the Sheriffs Dept. as part of the regular contract and whether or not there is value in adding additional hours for supplemental traffic enforcement. Further discussion ensued concerning options for ways that supplemental traffic enforcement hours can be deployed and the best ways to increase traffic safety. Mayor Pro Tem Black commented that he is not opposed to increasing the hours, but there should be a way to correlate the increased expense for supplemental traffic enforcement with increased traffic safety. Further discussion ensued concerning other ways for increasing traffic safety including mobile speed boards and decoy cars. Following discussion, no action was taken on either budget adjustment. Staff was directed to schedule further consideration of the budget amendment for supplemental traffic enforcement and to provide additional information to quantify the benefit of additional enforcement, as well ask the Sheriffs Dept. to be present at the meeting. MATTERS FROM THE CITY COUNCIL AND MEETING ATTENDANCE REPORTS DISCUSSION CONCERNING THE PROGRESS OF THE CITY COUNCIL TREES AND VIEWS AD HOC COMMITTEE. (ORAL REPORT) Councilmember Pieper reported that the ad hoc committee met again with Richard Colyear and Lynn Gill on June 23rd and they reached an impasse. The Committee provided a brief overview of the discussion and stated that the ad hoc committee would like to continue to meet to discuss the matter and further rcport back to the City Council. ADDITIONAL MATTERS FROM THE CITY COUNCIL Mayor Dieringer provided an update on the issue regarding water budgets and stated they she and City Manager Cruz are still working to get the issues addressed. At the request of several residents, Mayor Pro Tem Black provided a brief summary of pending legislation that would eliminate anesthesiologists from the VA System and replace them with Nurse Anesthetists and stated that the residents requested that the City submit a letter in opposition to this change. The City Council asked Mayor Pro Tem Black to have the concerned residents provide a sample letter regarding this matter for further consideration. MATTERS FROM STAFF City Clerk Luce reported that the proposed dates in July and August don't work for everyone for the joint meeting between the City Council and Planning Commission so staff will be looking at proposed dates in September and October. PUBLIC COMMENT ON CLOSED SESSION ITEMS None. CLOSED SESSION None. Minutes City Council Meeting 06-27-16 RETURN TO OPEN SESSION None. ADJOURNMENT Hearing no further business before the City Council, Mayor Dicringer adjourned the meeting at 8:58 p.m. to the next regular meeting of the City Council scheduled to be held on Monday, July 1 1, 2016 beginning at 7:00 p.m. in the City Council Chamber at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. Respectfully submitted, 464 Heidi Luce City Clerk Approved, ea Dicringer Mayor Minutes City Council Meeting 06-27-16 CITY OF ROLLING HILLS PROOF OF SERVICE BY MAIL AND POSTING STATE OF CALIFORNIA ss COUNTY OF LOS ANGELES I am a citizen of the United States. I am over the age of eighteen years and not a party to the within proceeding; my business address is 2 Portuguese Bend Road, Rolling Hills, California. On the 246 day of June, 2016, I serve the within City Council Meeting - 06/27/2016 a copy of which is annexed hereto and made a part hereof, on the person, or persons, named below by placing a true copy thereof enclosed in a sealed envelope with postage thereon fully prepaid, in the United States mail at Rolling Hills, California addressed as follows: E -MAILED MAILED DropBox NONE RH Web site listSery Interested parties City Attorney CouncilMembers Dieringer, Pieper, Black, Mirsch and Wilson DELIVERED City Manager City Council Also posted at City Hall, at www.Rolling-Hills.org and PDF's in DropBox. I certify (or declare) under penalty of perjury, that the foregoing is true and correct. Executed on the 24'" day of June, 2016 at Rolling Hills, California. t_, Ewa Nikodem Administrative Assistant 84 al zoilatt gee INCORPORATED JANUARY 24, 1957 AGENDA ADJOURNED REGULAR MEETING Next Resolution No. 1 186 NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 FAX (310) 377-7288 CITY COUNCIL CITY OF ROLLING HILLS MONDAY, JUNE 27, 2016 7:00 P.M. Next Ordnance No. 347 1. CALL TO ORDER 2. ROLL CALL 3. OPEN AGENDA - PUBLIC COMMENT WELCOME This is the appropriate time for members of the public to make comments regarding the items on the consent calendar or items not listed on this agenda. Pursuant to the Brown Act, no action will take place on any items not on the agenda. 4. CONSENT CALENDAR Matters which may be acted upon by the City Council in a single motion. Any Councilmember may request removal of any item from the Consent Calendar causing it to be considered under Council Actions. A. B. C. D. E. Minutes - Regular Meeting of June 13, 2016. RECOMMENDATION: Approve as presented. Payment of Bills. RECOMMENDATION: Approve as presented. Financial Statement for the Month of May, 2016. RECOMMENDATION: Approve as presented. Allied Recycling Tonnage Report for May, 2016. RECOMMENDATION: Receive and file. RESOLUTION NO. 1186 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS FIXING THE DAY, HOUR AND LOCATION OF REGULAR CITY COUNCIL METTINGS, ESTABLISHING AN ALTERNATE LOCATION FOR CITY COUNCIL MEETINGS AND RESCINDING RESOLUTIONS NO. 22 AND 465. RECOMMENDATION: Adopt as presented. 5. COMMISSION ITEMS NONE. 6. PUBLIC HEARINGS NONE. Page 1 of 2 7. OLD BUSINESS NONE. 8. NEW BUSINESS A. CONSIDERATION OF A THREE-YEAR PROFESSIONAL SERVICES AGREEMENT WITH LANCE, SOLL & LUNGHARD, LLC FOR ANNUAL AUDIT SERVICES. B. CONSIDERATION OF AMENDMENTS TO THE FY 2016-17 BUDGET CONCERNING CITY COUNCIL TRAVEL AND SUPPLEMENTAL TRAFFIC ENFORCEMENT. 9. MATTERS FROM THE CITY COUNCIL AND MEETING ATTENDANCE REPORTS A. DISCUSSION CONCERNING THE PROGRESS OF THE CITY COUNCIL TREES AND VIEWS AD HOC COMMITTEE. (ORAL REPORT) 10. MATTERS FROM STAFF NONE. 11. PUBLIC COMMENT ON CLOSED SESSION ITEMS NONE. 12. CLOSED SESSION NONE. 13. RETURN TO OPEN SESSION NONE. 14. ADJOURNMENT Next meeting: Monday, July 11, 2016 at 7:00 p.m. in the Council Chamber, Rolling Hills City Hall, 2 Portuguese Bend Road, Rolling Hills, California. Public Comment is welcome on any item prior to City Council action on the item. Documents pertaining to an agenda item received after the posting of the agenda are available for review in the City Clerk's office or at the meeting at which the item will be considered. In compliance with the Americans with Disabilities Act (ADA), if you need special assistance to participate in this meeting due to your disability, please contact the Deputy City Clerk at (310) 377-1521 at least 48 hours prior to the meeting to enable the City to make reasonable arrangements to ensure accessibility and accommodation for your review of this agenda and attendance at this meeting. City Council Agenda 06/27/16 Page 2 of 2 DRAFT Agenda Item No. 4-A Meeting Date: 06/27/16 MINUTES OF AN ADJOURNED REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS, CALIFORNIA MONDAY, JUNE 13, 2016 CALL TO ORDER An adjourned regular meeting of the City Council of the City of Rolling Hills was called to order by Mayor Dieringer at 7:01 p.m. in the City Council Chamber at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. ROLL CALL Councilmembers Present: Mirsch, Pieper, Wilson and Mayor Dieringer. Councilmembers Absent: Black (excused). Others Present: Raymond R. Cruz, City Manager. Mike Jenkins, City Attorney. Yolanta Schwartz, Planning Director. Heidi Luce, City Clerk. Terry Shea, Finance Director. Jim Walker, Budget Consultant. Diana Nuccion, 18 Portuguese Bend Road. Howard Weinberg, Attorney. William and Judith Hassoldt, 15 Portuguese Bend Road. Hal Light, Attorney. Tina Greenberg, 32 Portuguese Bend Road. Marcia Schoettle, 24 Eastfield Drive. OPEN AGENDA - PUBLIC COMMENT WELCOME Diana Nuccion, 18 Portuguese Bend Road addressed the City Council to express concern regarding coyotes in the community. CONSENT CALENDAR Matters which may be acted upon by the City Council in a single motion. Any Councilmember may request removal of any item from the Consent Calendar causing it to be considered under Council Actions. A. Minutes — (1) Regular Meeting of April 25, 2016; (2) Regular Meeting of May 9, 2016. RECOMMENDATION: Approve as presented. B. Payment of Bills. RECOMMENDATION: Approve as presented. C. Financial Statement for the Month of April, 2016. RECOMMENDATION: Approve as presented. DRAFT D. Allied Recycling Tonnage Report for April, 2016. RECOMMENDATION: Receive and file. E. City Council Finance/Budget/Audit Committee meeting notes of May 18, 2016. RECOMMENDATION: Receive and file. F. Consideration of an Agreement with Executive -Suite Services, Inc. for City Hall Custodial Services. RECOMMENDATION: Approve as presented. G. Consideration of Investment Resolutions authorizing the City Manager and Finance Director to make investment deposits on behalf of the City of Rolling Hills with Preferred Bank and the Money Center Department of U.S. Bank National Association. RECOMMENDATION: Approve as presented. H. County of Los Angeles Department of Animal Care and Control FY 2016/17 Service Level Request. RECOMMENDATION: Approve as presented. I. County of Los Angeles Department of Agricultural Commissioner/Weights and Measures FY 2016/17 Agreement Renewal for Pest Control Services. RECOMMENDATION: Approve as presented. J. Authorization for staff to change the City's credit card provider from Union Bank to Opus Bank. RECOMMENDATION: Approve as presented. CONSENT CALENDAR ITEMS FROM THE TRAFFIC COMMISSION: K. Consideration of a recommendation from the Traffic Commission to approve a request from the Palos Verdes Art Center for an Artist Studio Tour on September 24 and 25, 2016 to feature two Rolling Hills Artist Studios located at 14 Cinchring Road and 15 Eastfield Drive. RECOMMENDATION: Approve as presented. Councilmember Mirsch asked that item 4E be removed from the consent calendar for individual consideration. Hearing no objection, Mayor Dieringer so ordered. Councilmember Wilson mentioned that there were a couple of typographical/clerical errors in the staff reports that he brought them to the City Manager's attention. City Manager Cruz stated that he would see that they are corrected. Councilmember Mirsch moved that the City Council approve the remaining items on the consent calendar as presented. Councilmember Pieper seconded the motion, which carried without objection. E. City Council Finance/Budget/Audit Committee meeting notes of May 18, 2016. RECOMMENDATION: Receive and file. Councilmember Mirsch asked for clarification on the portion of the meeting notes relative to the total amount budgeted for Councilmember travel. City Manager Cruz clarified that the City Council travel costs were capped at $4,000 per Councilmember and since at this time, only one Councilmember has expressed intent to incur travel related expenses, $6,000 was budgeted for that budget item to account for that Councilmember's travel plus any other miscellaneous travellmeeting expenses that may be incurred. Following brief discussion, Councilmember Wilson moved that the City Council receive and file the meeting notes as presented. Councilmember Mirsch seconded the motion, which carried without objection. Minutes City Council Meeting 06-13-16 DRAFT COMMISSION ITEMS RESOLUTION NO. 2016-11 — A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF ROLLING HILLS GRANTING A SITE PLAN REVIEW TO CONSTRUCT A COVERED PORCH ON A PROPERTY WITH A RESTRICTED DEVELOPMENT CONDITION AT 13 OUTRIDER ROAD, (LOT 94-A-EF), ROLLING HILLS, CA, (HANG JA YOO). Mayor Dieringer introduced the item and asked for staff's comments. Planning Director Schwartz reviewed the applicant's request to construct a 244 sq. ft. covered porch in Zoning Case No. 905 at 13 Outrider Road. She stated that this case came before the Planning Commission because this property has a restricted development condition that any development needs to go before the Planning Commission for review and the Planning Commission approved the request. She commented that this project was due to a request by the Rolling Hills Community Association that a previously approved project reflect more of a ranch style architecture. She further stated that the project meets all of the development standards. Following brief discussion, Councilmember Pieper moved that the City Council receive and file Planning Commission Resolution No. 2016-11 granting approval of the applicant's request in Zoning Case No. 905 at 13 Outrider Road. Councilmember Mirsch seconded the motion, which carried without objection. RESOLUTION NO. 2016-12 — A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF ROLLING HILLS GRANTING APPROVAL OF A SITE PLAN REVIEW TO CONSTRUCT A TRELLIS ON A PROPERTY WITH A RESTRICTIVE DEVELOPMENT CONDITION IN ZONING CASE NO. 903 AT 37 CHUCKWAGON ROAD, (LOT I9 -CF) (VAN NORTWICK). Mayor Dieringer introduced the item and asked for staff's comments. Planning Director Schwartz reviewed the applicant's request to construct a 701 sq. ft. detached trellis in the side yard area in Zoning Case No. 903 at 37 Chuckwagon Road. She stated that this case also came before the Planning Commission because this property has a restricted development condition that any development needs to go before the Planning Commission for review and the Planning Commission approved the request. She stated that there are no variances or exceedances proposed and the project meets all of the development standards. Councilmember Pieper moved that the City Council receive and file Planning Commission Resolution No. 2016-12 granting approval of the applicant's request in Zoning Case No. 903 at 37 Chuckwagon Road. Councilmember Mirsch seconded the motion, which carried without objection. RESOLUTION NO. 2016-13 — A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF ROLLING HILLS GRANTING APPROVAL OF A SITE PLAN REVIEW, CONDITIONAL USE PERMIT, AND VARIANCES FOR GRADING, FOR WALLS OVER 3' IN HEIGHT, AND WHICH WILL NOT AVERAGE OUT TO 2.5' IN HEIGHT, A POOL/SPA, TRELLIS, CONSTRUCTION OF A 705 SQUARE FOOT RECREATION ROOM AND TO LOCATE THE STRUCTURES IN THE FRONT YARD OF THE LOT AND TO EXCEED THE MAXIMUM PERMITTED DISTURBANCE OF THE LOT AT 2 HILLSIDE LANE, (LOT 60- RH), (ELKIN). Minutes City Council Meeting 06-13-16 DRAFT Mayor Dieringer introduced the item and asked for staff's comments. Planning Director Schwartz reviewed the applicant's request to construct a 705 sq. ft. recreation room, trellis, pool/spa, various other amenities and walls in the front yard area in Zoning Case No. 897 at 2 Hillside Lane. She reviewed the existing structures on the property stating that a new pad will be created to accommodate the proposed structures. She further reviewed the grading stating that the project requires 4,610 cu. yds. of cut and 4,610 cu. yds. of fill that will be balanced on site. She reviewed the concerns raised regarding the existing stable on the property stating that the approval included a condition that the stable be converted back to stable use and that access be appropriate for a stable. She stated that the applicant also proposes to widen the existing driveway and driveway apron. She further stated that the Traffic Commission reviewed the request to widen the driveway apron and recommended approval. She further reviewed the variances requested and stated that the Planning Commission approved this request. In response to Mayor Dieringer, Planning Director Schwartz stated that the concerns raised by a neighboring property owner have been addressed and resolved to the satisfaction of the neighbor. Following brief discussion, Councilmember Pieper moved that the City Council receive and file Planning Commission Resolution No. 2016-13 granting approval of the applicant's request in Zoning Case No. 897 at 2 Hillside Lane. Councilmember Wilson seconded the motion, which carried without objection. RESOLUTION NO. 2016-14 — A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF ROLLING HILLS GRANTING APPROVAL OF VARIANCES TO CONSTRUCT A SWIMMING POOL AND ATTACHED TRELLIS WHICH WOULD ENCROACH INTO THE REAR YARD SETBACK AND TO EXCEED THE MAXIMUM PERMITTED TOTAL COVERAGE OF THE LOT IN ZONING CASE NO. 900 AT 71 CREST ROAD EAST, (LOT 69 E-1 MS), ROLLING HILLS, CA (BRAZY & LUCHINI). Mayor Dieringer introduced the item and asked for staff's comments. Planning Director Schwartz reviewed the applicant's request to construct a swimming pool and attached trellis to encroach into the rear yard setback in Zoning Case No. 900 at 71 Crest Road East. She reviewed the configuration of the lot stating that this is a very constrained lot. She stated that this project was approved by the Planning Commission with Vice Chairman Gray opposed because he could not justify the variance being requested. She further explained the project and reviewed the conditions of approval. Following brief discussion. Councilmember Pieper moved that the City Council receive and file Planning Commission Resolution No. 2016-14 granting approval of the applicant's request in Zoning Case No. 900 at 71 Crest Road East. Councilmember Wilson seconded the motion, which carried without objection. PUBLIC HEARINGS CITY OF ROLLING HILLS PROPOSED DRAFT BUDGET INCLUDING THE ANNUAL REPORT ON: GENERAL FUND; COMMUNITY FACILITIES FUND; MUNICIPAL SELF INSURANCE FUND; OPEB FUND, REFUSE COLLECTION FUND; SOLID WASTE CHARGES; TRAFFIC SAFETY FUND; TRANSIT FUND -MEASURE R; TRANSIT FUND - PROPOSITION A; TRANSIT FUND -PROPOSITION C; COPS AND CLEEP FUND; UTILITY FUND; AND CAPITAL PROJECT FUND FOR FISCAL YEAR 2016-17 AND CONSIDERATION OF: Minutes City Council Meeting 06-13-16 DRAFT RESOLUTION NO. 1184: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS ADOPTING THE FY 2016-17 CITY OF ROLLING HILLS BUDGET INCLUDING THE ANNUAL REPORT ON: GENERAL FUND; COMMUNITY FACILITIES FUND; MUNICIPAL SELF INSURANCE FUND; OPEB FUND, REFUSE COLLECTION FUND; SOLID WASTE CHARGES; TRAFFIC SAFETY FUND; TRANSIT FUND -MEASURE R; TRANSIT FUND -PROPOSITION A; TRANSIT FUND -PROPOSITION C; COPS AND CLEEP FUND; UTILITY FUND; AND CAPITAL PROJECT FUND FOR FISCAL YEAR 2016- 17. Mayor Dieringer introduced the item and asked for staff's comments. City Manager Cruz stated that presented for consideration is a balanced budget for FY 2016-17 with an $88,000 projected surplus. He briefly reviewed the budget as it relates to City Council travel and supplemental traffic enforcement. He stated that budget currently includes 175 hours of supplemental traffic enforcement, but the Traffic Commission recommends restoring the amount of hours to 350, which would be an additional $15,500. He further stated, with regard to building related permit fees, no change is being proposed at this time, but staff was asked to bring that item to the City Council for discussion in July. He introduced Jim Walker to reviewe the budget highlights. Jim Walker, Budget Consultant reviewed the proposed budget stating that revenue is proposed at $1,931,000 which is up 4.8% from last year, partially due to the proposed exchange of Prop A funds; and expenses are budgeted at $1,842,000 which is up 4.3% from the current year budget and incorporates many of the items identified in the budget work plan. He commented that the budget also includes payment of half of his fee for budget preparation, which was previously paid 100% by RAMS. Discussion ensued concerning the item related to City Council travel. Mayor Dieringer suggested increasing the travel budget to allow for $4,000 per Councilmember as was noted in the Finance Committee meeting notes. Mr. Walker explained that $4,000 was budgeted for Mayor Derringer's requested travel and $2,000 additional was budgeted for other City Council travel related expenses for a total of $6,000 recognizing that no other Councilmember's express the intent to incur any travel related expenses. He stated that the amount will be monitored and if necessary adjustments could be made to increase that amount. Councilmember Wilson stated that rather than seeing an increase in the travel budget, he would rather see the supplemental traffic enforcement restored to 350 hours. Further discussion ensued concerning City Council travel. Councilmember Pieper suggested approving the budget as presented and defer the discussion on City Council travel and supplemental traffic enforcement to a future meeting at which time background on historical expenses in those categories could be discussed and considered. Further discussion ensued concerning City Council travel. Councilmember Mirsch explained the Finance Committee's thought process on how it came to lie $6,000 number slating dial it was conscious decision to budget that amount recognizing that it could be adjusted should a need arise. Councilmember Mirsch moved that the City Council adopt Resolution No. 1184 adopting the City of Rolling Hills FY 2016-17 budget as presented. Councilmember Wilson seconded the motion. Mayor Dieringer called for public comment. Minutes City Council Meeting 06-13-16 0 DRAFT Marcia Schoettle, 24 Eastfield Drive addressed the City Council in support of City Council education and increasing the City Council travel budget. Hearing no further public comment, Mayor Dieringer closed the public hearing and called for a roll call vote. The motion to adopt Resolution No. 1184 adopting the City of Rolling Hills FY 2016-17 budget as presented carried without objection. The City Council further directed staff to agendize a discussion regarding possible budget adjustments for City Council travel expenses and supplemental traffic enforcement and to include in the staff report the appropriate background information with regard to previous expenditures in those areas. RESOLUTION NO. 1185: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS ESTABLISHING THE 2016-17 FISCAL YEAR GANN APPROPRIATION LIMIT FOR THE CITY OF ROLLING HILLS. Mayor Dieringer introduced the item and asked for staff's comments. Mr. Walker presented the proposed resolution adopting the appropriation limit for FY 16-17 and explained the process whereby the GANN limit is established. Following brief discussion, Councilmember Pieper moved that the City Council adopt Resolution No. 1185 establishing the FY 2016-17 appropriation limit. Councilmember Wilson seconded the motion, which carried without objection. OLD BUSINESS CONSIDERATION OF TWO APPEALS OF COMMITTEE ON TREES AND VIEWS RESOLUTION NO. 2015-03-CTV SETTING FORTH FINDINGS RELATING TO TRIMMING OF TREES AT 15 PORTUGUESE BEND ROAD DUE TO VIEW IMPAIRMENT FROM 18 PORTUGUESE BEND ROAD. Mayor Dieringer introduced the item and asked for staff's comments. City Attorney Jenkins stated that as the City Council will recall, the public hearing on this matter was closed on April 25th at which time staff was directed to prepare a Resolution affirming the decision of the Committee on Trees and Views. He stated that the City Council is in the deliberation stage until a resolution is adopted. He stated that at his request, staff gathered all of the evidence that had been collected with regard to the existence of a view at the time the property was acquired by the Nuccions in 2009. He stated that as he reviewed the evidence, including transcription of some of the minutes, e -mails, the application and written materials submitted, there appears to be some confusion with regard to the photographs that were submitted as evidence of the view at the time the property was acquired. He stated that the issue causing concern is that, as is shown in the record, the trees at issue were trimmed by the Nuccions at some point in time and it is not clear when the photographs were taken in relation to when the trees were trimmed. He stated that after this review of the evidence, the staff report was prepared outlining all of the evidence presented on the question of what view existed from the property at the time of acquisition to assist in preparing a resolution by allowing the City Council to identify those matters that it finds persuasive in the evidence. He stated that by looking at the staff report and all the evidence cited in the staff repot, the City Council is in an improved position to identify the specific evidence it finds persuasive and why it is persuasive. He stated that the staff report Minutes City Council Meeting 06-13-16 DRAFT outlines three options before the City Council: (1) reaffirm the direction from April 25`s and direct staff to return with a resolution upholding the decision of the Committee on Trees & Views; (2) re -open the public hearing after public notice and schedue another hearing; or (3) provide different direction to staff. He stated that Mr. Wienberg, the attorney for the Nuccions submitted additional evidence just before the meeting tonight, which according to staff, consists of new evidence that has not been previously submitted. He stated that since the public hearing is closed, it is not permissible to accept new evidence at tonight's meeting — either in document or testimony form. He stated that if it is the City Council's desire to accept new evidence, the public hearing would have to be re -opened and property noticed for a future meeting. Discussions ensued concerning the options before the City Council for proceeding. Councilmember Pieper stated that after further reviewing the requirements of Measure B, he does not believe the evidence submitted establishes the existence of the view when the property was acquired. He suggested re -opening the public hearing solely for the purpose of considering the issue whether a view existed at the time the Nuccions acquired the property. To clarify, City Attorney Jenkins stated that the City Council has received a lot of evidence including oral testimony, and it is the City Council's job to examine all of the evidence and sift thorough it and weigh it against the rest of the evidence. Following further discussion, Councilmember Mirsch moved that the City Council reopen the public hearing oh this matter for the limited purpose of receiving additional evidence and considering further the sole issue whether a view existed at the time the Nuccions acquired the property at 18 Portuguese Bend Road. Councilmember Pieper seconded the motion, which carried without objection. Discussion ensued concerning possible dates for the re -opened public hearing and with concurrence of both parties, the public hearing was scheduled for Monday, August 22, 2016 at 7:00 p.m.. Following brief discussion and concurrence by both parties, the City Council upon a motion by Councilmember Mirsch, seconded by Councilmember Pieper and without any objection, provided the parties with the following direction with regard to additional evidence: • As agreed by the Nuccion's counsel, within 10 days, the Nuccions shall provide the Hassoldts and the City digital copies (including the metadata) of all of the photographs that have been submitted in support of the view impairment complaint on a compact disc. • Any additional evidence to be considered shall be provided to the other party and submitted to the City not less than 10 days prior to the August 22 public hearing — by 5:00 p.m. on August 12, 2016. • Any evidence not submitted by the above deadline will not be considered. NEW BUSINESS DISCUSSION AND CONSIDERATION OF THE FOLOWING ITEMS RELATED TO THE INSTALLATION OF AUTOMATED LICENSE PLATE RECOGNITION (ALPR) CAMERAS IN THE CITY TO COMBAT CRIME. Mayor Dieringer introduced the item and asked for staff's comments. City Manager Cruz presented the staff report stating that these two agreements are before the City Council based on previous approval and M inutes City Council Meeting 06-13-16 DRAFT direction to staff to proceed with the installation of the ALPR cameras in conjunction with the other three Peninsula cities. He stated that the first document for consideration is an MOU with other three cities for installation of the cameras through Vigilant Solution which has been reviewed by the City Attorneys from each of the four cities; and the second is a license agreement between the Cit of Rolling Hills and the Rolling Hills Community Association. Following brief discussion concerning the cost of the cameras and the camera technology, the following actions were taken with regard to the two agreements related to the installation of the ALPR cameras: CONSIDERATION OF A MEMORANDUM OF UNDERSTANDING (MOU) BETWEEN THE CITY OF ROLLING HILLS AND THE OTHER PALOS VERDES PENINSULA CITIES TO COOOPERATIVELY FUND, INSTALL AND ADMINISTER THE CONTRACT WITH THE AUTOMATED LICENSE PLATE RECOGNITION (ALPR) CAMERA SERVICE PROVIDER (VIGILANT SOLUTIONS) TO COMBAT CRIME IN THE REGION. Councilmember Pieper moved that the City Council authorize the City Manager to execute the MOU between the Cities of Palos Verdes Estates, Rancho Palos Verdes, Rolling Hills Estates and Rolling Hills relating to the placement, and maintenance of Automated License Plate Recognition (ALPR) cameras around the Palos Verdes Peninsula. Councilmember Wilson seconded the motion, which carried without objection. CONSIDERATION OF LICENSE AGREEMENT BETWEEN THE CITY OF ROLLING HILLS AND THE ROLLING HILLS COMMUNITY ASSOCIATION (RHCA) TO OUTLINE THE TERMS AND CONDITIONS TO PLACE ALPR CAMERAS NEAR OR ON EACH OF THE THREE RHCA OWNED GATE HOUSES. Councilmember Pieper moved that the City Council authorize the City Manager to execute the license agreement between the City of Rolling Hills and the Rolling Hills Community Association for permission to install three automated License Plate Recognition (ALPR) cameras near or on each of the three RHCA gatehouses. Councilmember Mirsch seconded the motion, which carried without objection. MATTERS FROM THE CITY COUNCIL AND MEETING ATTENDANCE REPORTS UPDATE ON THE PALOS VERDES PENINSULA REGIONAL LAW ENFORCEMENT COMMITTEE MEETING FIELD ON MAY 12, 2016. (ORAL REPORT) Mayor Dieringer provided an overview of the discussion from the Palos Verdes Peninsula Regional Law Enforcement Committee meeting held on May 12`h stating that crime rates seems to be lower than previous quarters and the majority of the discussion has been around the installation of the ALPR cameras. Councilmember Pieper noted that the ambulance response time data is slightly skewed because some addresses outside the City are being calculated in the City's numbers. DISCUSSION CONCERNING THE PROGRESS OF THE CITY COUNCIL TREES AND VIEWS AD HOC COMMITTEE. (ORAL REPORT) Councilmember Mirsch reported that the ad hoc committee had a good meeting with Richard Colyear and Minutes City Council Meeting 06-13-16 DRAFT Lynn Gill in May and plans to meet again on June 23'd. She stated that the Committee will report further on its progress after that meeting. DISSCUSION AND POSSIBLE DIRECTION TO STAFF CONCERNING THE CALIFORNIA WATER SERVICE COMPANY'S PAST AND PRESENT ASSISTANCE FOR ROLLING HILLS RESIDENTS REGARDING WATER BUDGETS. (ORAL REPORT) Mayor Dieringer provided an update regarding her discussions with California Water Service Company regarding water budgets and the appeal process at a recent meeting that included the City Manager and representatives from California Water Service Company. Following discussion, the City Manager was directed to follow-up with California Water Service Company regarding the appeal process. DISCUSSION AND POSSIBLE DIRECTION TO STAFF REGARDING PENDING STATE LEGISLATION THAT COULD RESTRICT THE CITY'S ZONING AND PLANNING AUTHORITY CONCERNING ITS HOUSING UNITS. (ORAL REPORT) Mayor Dieringer provided information regarding pending legislation that may impact the City's planning authority with regard to secondary housing units and suggested that the City Council contact their elected officials and continue to monitor the legislation. Brief discussion ensued concerning the pending legislation. No action was taken. MATTERS FROM STAFF DISCUSSION AND DIRECTION REGARDING LAYING DOWN CONDUIT FOR COX CABLE AND FRONTIER COMMUNICATIONS LINES IN CONJECTION WITH SOUTHERN CALIFORNIA EDISON'S WILLIAMSBURG LANE VOLTAGE IMPROVEMENT PROJECT. (ORAL REPORT) Mayor Dieringer introduced the item and asked for staffs comments. City Manager Cruz provided an update concerning the Southern California Edison voltage improvement on Williamsburg Lane stating that it was the City's intent, when this project was originally introduced, to have the option of putting down the conduit for the other utilities at the same time this project was being done. He stated that it was recently learned that the SCE is moving forward with the project and staff is trying to coordinate with the communications companies to move forward with additional conduit but in order to do so, funds would need to be appropriated for that purpose. Following discussion, Councilmember Pieper moved that the City Council approve an appropriation from the Utility Fund in the amount up to $20,000 (half of a total project cost of up to $40,000) for trenching and conduit to underground the other utilities in conjunction with Southern California Edison's Williamsburg Lane Voltage Improvement Project and authorize the City Manager to work with the utilities to accomplish this objective. PUBLIC COMMENT ON CLOSED SESSION ITEMS None. Minutes City Council Meeting 06-13-16 DRAFT CLOSED SESSION Government Code §54956.8 Conference with Real Property Negotiators Property: APN 7567-017-017 Agency negotiator: Raymond Cruz, City Manager Negotiating parties: County of Los Angeles Under negotiation: Price (tax defaulted parcel) The City Council recessed into closed session at 9:24 p.m. to discuss the matters listed above on the closed session agenda. RETURN TO OPEN SESSION ANNOUNCEMENT OF ACTIONS FROM CLOSED SESSION (ORAL REPORT). The meeting was called back to order in open session at 9:46 p.m. City Attorney Jenkins reported that the City Council met in closed session to discuss the item listed above and no reportable action was taken. ADJOURNMENT Hearing no further business before the City Council, Mayor Dieringer adjourned the meeting at 9:47 p.m. to an adjourned regular meeting of the City Council scheduled to be held on Monday, June 27, 2016 beginning at 7:00 p.m. in the City Council Chamber at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. Respectfully submitted, Heidi Luce City Clerk Approved, Bea Dieringer Mayor Minutes City Council Meeting 06-13-16 -10- CHECK CHECK DATl • 24362 • 24363 24364 24365 24366' 24367 24368 24369 24370 24371 24372 24373 24374 24375 24376 PR LINK PR LINK Cty °pest, fidid Agenda Item No: 4-B Mtg. Date: 06/27/16 INCORPORATED JANUARY 24, 1957 6272016 - CHECK RUN PAYEE 6/14/2016 FIRST BANKCARD 6/14/2016 STANDARD INSURANCE COMPANY 06/27/2016 COUNTY OF LOS ANGELES 06/27/2016 ENTERTAINING FRIENDS 06272016 KONICA MINOLTA BUSINESS 06/27/2016 LA COUNTY SHERIFFS DEPARTMENT 06/27/2016 PALOS VERDES PENINSULA 06/27/2016 PALOS VERDES SECURITY SYS, INC 06/27/2016 REMOTE SATELLITE SYS INTL 06272016 ROGERS, ANDERSON, MALODY 06272016 THE GAS COMPANY • 06/27/2016 • USCM 06/27/2016 VANTAGEPOINT TRANSFER AGENTS - 06/27/2016 WILLDAN INC. 07/01/2016 CALPERS 6/10/2016 PR LINK - PAYROLL PROCESSING 6/102016 PR LINK - PAYROLL 12 & PR TAXES Total DESCRIPTION OFFICE SUPPLIES, PLANNING MEMBERSHIP LIFE INSURANCE NEW POLICY 7/16 COYOTE CONTROL MAY 2016 EMERGENCY PREP EXPO NOV 12015 MAINT COPIER JUNE 2016 LAW ENFORCEMENT SRVS MAY 2016 FLYER FOR EMERGENCY PREP SECURITY SYSTEM 7/16 - 9/16 SATELLITE PHONES JULY 2016 ACCOUNTING SRVS MAY & JW BDGT BILLING PERIOD 5/10 - 6/9 457 - PAY PERIOD 624/16 457 - PAY PERIOD 6/24/2016 BUILDING & SAFETY APRIL 2016 HEALTH INS JULY 2016 Processing Fee Pay Period - May 25, 2016 Through June 7, 2016 I, Raymond R Cruz, City Manager of Rollin] Hills, California certify that the above demands are accurate and there is available in the Ge ml Fund a balance of S75,542.72 for the payment of ye items. A Raymon. R Cruz, City Manager • Prexiously Disbursed NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CALIF. 90274 (310) 3771521 FAX: (310) 3777288 AMOUNT 1,565.57 240.00 2,989.67 1,500.00 120.13 26,683.55 441.45 237.00 97.90 9,255.00 24.16 1,860.00 728.00 4,316.25 7,191.17 49.95 18,242.92 5 75,542.72 51249.45 .J Printed on Recycled Paper CITY OF ROLLING HILLS BALANCE SHEET May 31, 2016 ASSETS GENERAL& DEPOSIT CAPITAL FUND FUND OPEB TRUST MUNICIPAL COPS & COMMUN. SELF- REFUSE TRAFFIC TRANSIT UTILITY CLEEP FACILITIES INSUR. COLLECT. SAFETY PROP A.CM FUND & TDA Cash & Cash Equivalents $ 4.566,130 $ 1,771 $ 36,367 $ 111,743 $ 23,182 $ 260,374 $ 607,050 $ (2,022) $ 130,940 $ 1,236,507 Cosh & Cash Equivalents - Capital Project Fund Poppy Trail Grading Bond 305,000 - Accounts Receivable 5,512 - - 222,332 Prepaid Expense & Deposits 36,622 - LIABILITIES TOTAL ASSETS $ 4,608,264 $ 306,771 $ 36,367 $ 111,743 $ 23,182 $ 482,706 $ 607,050 $ (2,022) $ 130,940 $ 1,236,507 Accounts & Contract Payable $ - Available for OPEB - Deposits 18,803 Deferred Revenues 14,012 Employees Benefits Payable 2,587 TOTAL LIABILITIES 35.402 FUND BALANCE Unassigned Fund Balance 4,572,862 TOTAL UNASSIGNED FUND BALANCE 4,572,862 $ 306,771 $ - $ - $ 36,367 306,771 36,367 - $ - $ 346,537 $ 346,537 - $ - $ 111743 23,182 482,706 260,513 (2,022) $ 130,940 1,236 507 • 111743 23,182 482,706 260,513 (2,022) 130,940 1,236,507 )TAL UNASSIGNED FUND BALANCE& LIABILITI $ 4,608,264 $ 306,771 $ 36,367 $ 111,743 $ 23,182 $ 482,706 $ 607,050 $ (2,022) $ 130,940 $ 1,236,507 COMPOSITION OF CASH Petty Cash OPUS Bank - Checking Account OPUS Bank - Money Market OPUS Bank - Interest Checking Calif. State Local Agency Investment Fund Malaga Bank - CD's $ 1,500 22,957 440,248 1,002,514 5,259,443 245,000 $ 6,971,662 cnCT Terry Finance Director App Rymon. `. Cruz, City Manager Date 6-Ro-/b ale 2{ YTD TOTAL BEGINNING OF YEAR TOTAL $ 6,972,042 $ 6,061,616 10,956 305,000 305,000 227,844 381,398 36,622 27,797 S 7,541,508 $ 6,786,767 $ 346,537 36,367 325,574 14,012 2,587 128,965 331,574 6,340 725,077 466,879 6,816,431 6,319,888 6,816,431 6,319.888 $ 7,541,508 $ 6,786,767 CITY OF ROLLING HILLS SUMMARY STATEMENT OF REVENUES AND EXPENDITURES Actual Compared to Annu 1 Budget July 1, 2015 to April 30, 2016 GENERAL Fund Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue CITIZENS' OPTION FOR PUBLIC SAFETY (COPS) Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue CAPITAL IMPROVEMENT FUND Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue COMMUNITY FACILITIES Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue MUNICIPAL SELF-INSURANCE Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue REFUSE COLLECTION Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue TRAFFIC SAFETY Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue TRANSIT - PROPOSITION A, C, M & TDA Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue UTILITY FUND Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue TOTAL ALL FUNDS Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue This Year Last Year This Year Better (Worse) Annual Budget & Adj. Remaining Budget $ 1,478,508 $ 1,407,717 $ 70,791 1,779,550 $ 301,042 1,160,736 1,127,336 (33,400) 1,756,780 596,044 317,772 280,381 37,391 22,770 (295,002) (13,455) 15,200 (28,655) (332,943) (319,488) 304,317 295,581 8,736 (310,173) (614,490) 114,618 106,230 8,388.00 100,200 (14,418) 85,432 54,900 (30,532) 104,500 19,068 29,186 51,330 (22,144) (4,300) (33,486) 29,186 51,330 (22,144) (4,300) (33,486) - - - 100 100 354.00 - (354.00) 57,700 57,346 (354.00) - (354.00) (57,600) (57,246) - - 62,400 62,400.00 (354.00) - (354.00) 4,800 5,154 235 4,530 4,295 228,332 228,097 00 (235) (4,530) 4,295 (228,332) (228,097.00) (235) (4,530) 4,295 (228,332) (228,097.00) 647,882 674,614 (26,732) 771,800 123,918 629,983 641,663 11,680 755,980 125,997 17,899 32,951 (15,052) 15,820 (2,079) (20,0002 (15,200) (4,800) (24,000) (4,000) (2,101) 17,751 (19,852) (8,180) (6,079) • - - 50 'e" 50 35,652 17,425 (18,227) 55,550 19,898 (35,652) (17,425) (18,227) (55,500) (19,848) 33,455 - 33,455 55,500 22,045 (2,197) (17,425) 15,228 - 2,197 68,718 67,232 a 1,486 84,141 15,423 68,718 67,232 1,486 84,141 15,423 68,718 67,232 1,486 84,141 15,423 33,799 - (33,799) 150,000 116,201.00 (33,799) - (33,799) (150,000) (116,201.00) - - 250,000 250,000.00 (33,799) - (33,799) 100,000 133,799.00 2,309,726 2,255,793 53,933 2,735,841 426,115 1,946,191 1,845,854 (100,337) 3,108,842 1,162,651 363,535 409,939 (46,404) (373,001) (736,536) - - - 10,957 10,957 $ 363,535 $ 409,939 $ (46,404) $ (383,958) $ (747,493) CITY OF ROLLING HILLS RESIDENTIAL ALLIED WASTE RECYCLE NOW REPORT Report Date: 2016 MONTH 2016 Janua February March April May June July August September October November December Year to Date Totals: Average Monthly Totals: 2016 RECYCLED (tons) 74.63 82.00 83.40 86.74 GREEN WASTE (tons) 83.74 66.79 106.96 100.87 102.06 120.19 446.97 89.39 460.42 92.08 C&D Recycled C&D Disposed Disposal Diversion Tonnage % 4.33 1.85 151.42 51.49% 3.20 1.37 145.47 50.86% 11.44 4.10 134.50 59.28% 4.97 1.37 118.77 61.58% 35.79 12.62 163.93 59.38% - - - 0.00% - 0.00% - - 0.00% - - 0.00% - - 0.00% - - - 0.00% - - 0.00% 59.72 21.32 714.08 56.81% 11.94 4.26 142.82 0.57 MONTHLY TOTALS (tons) 315.97 298.83 340.40 312.72 434.59 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,702.51 340.50 RECEIVED aTh >y C7 w w JUN 15 2016 '•° 5 City of Rolling Hills By a`a,, 0 f TO: FROM: THRU: SUBJECT: DATE: eerr ofiraleafgical INCORPORATED JANUARY 24, 1957 NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 FAX (310) 377-7288 Agenda Item No.: 4-E Mtg. Date: 06/27/16 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL HEIDI LUCE, CITY CLERKW) RAYMOND R. CRUZ, CITY MANAGER Oil RESOLUTION NO. 1186 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS FIXING THE DAY, HOUR AND LOCATION OF THE REGULAR CITY COUNCIL METTINGS, ESTABLISHING AN ALTERNATE LOCATION FOR CITY COUNCIL MEETINGS AND REPEALING RESOLUTIONS NO. 22 AND 465. JUNE 27, 2016 ATTACHMENT: Resolution No. 1186 RECOMMENDATION It is recommended that the City Council review and adopt Resolution No. 1186 fixing the day, hour and location of the regular City Council meetings consistent with the City Council's direction. BACKGROUND Historically, since the City was founded, the City Council meetings have been held on the second and fourth Monday of each month, beginning at 7:30 p.m. At its meeting of January 25, 2016, after discussion, the City Council decided test a 7:00 start time for the regular City Council meetings beginning on March 14, 2016. Staff was directed to advise the public of this change and effective March 14, 2016 notice the meetings with a start time of 7:00 p.m. Since March 14th, the meetings have been held beginning at 7:00 p.m. and there have been no objections expressed regarding the earlier star time. DISCUSSION The date, time and location for regular City Council meetings is set by resolution and City's current resolution sets the start time at 7:30 p.m As such, in order to effectuate a permanent change to a 7:00 p.m. start time for all regular City Council meetings, the City Council should adopt resolution stating that intent. During staff's research on this matter, it was noted that the current resolution (Resolution No. 22) did not include the location for the meetings. It was also found that the resolution setting an alternate location for meetings (Resolution No. 465) was not updated when La Cresta School became Rancho Del Mar High School. In order to clarify these points and provide a clear, accurate resolution, staff prepared a new Resolution incorporating all of these provisions and rescinding the two previous resolutions. The new resolution sets the meeting dates as second and fourth Monday of each month, sets the start time as 7:00 p.m., sets the meeting location as City Hall and establishes Rancho Del Mar as the alternate location for City Council meetings when it is anticipated that City Hall won't accommodate the crowd expected. FISCAL IMPACT There is no fiscal impact with adoption of this resolution. CONCLUSION Recognizing that it was the City Council's desire to change the start time of the regular City Council meetings to 7:00 p.m., it is recommended that the City Council adopt Resolution No.1186. HL Meeting Date Time Location Reso-staffreport.docc RESOLUTION NO. 1186 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS FD(ING THE DAY, HOUR AND LOCATION OF REGULAR CITY COUNCIL METTINGS, ESTABLISHING AN ALTERNATE LOCATION FOR CITY COUNCIL MEETINGS AND RESCINDING RESOLUTIONS NO. 22 AND 465. The City Council of the City of Rolling Hills does hereby resolve and order as follows: Section 1. The regular meetings of the City Council of the City of Rolling Hills, California shall be held on the second and fourth Monday of each month at 7:00 p.m.; provided, however, that if any such day shall be a legal holiday then the meeting which would, except for such fact, have been held on such holiday, shall either be held on the next day, adjourned by the City Clerk to another day or cancelled for lack of a quorum. Section 2. The regular meetings of the City Council of the City of Rolling Hills, Califomia shall ordinarily be held at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. Section 3. Recognizing that the seating capacity in the Council chamber in City Hall is limited to less than 75 persons and further, that the Council chamber may on occasion be unavailable for use, the City Council desires to establish an alternative location for the conduct of City Council meetings. When it is anticipated that an item of City business is likely to attract the attendance of a larger number of residents than can be accomodated in the City Hall or if the Council chamber is otherwise unavailable, Rancho Del Mar High School (which is located within the boundaries of the City of Rolling Hills at 38 Crest Road West) shall be designated as the alternate location for the purpose of holding meetings of the City Council. The meeting agenda for any Council meeting to be conducted at Rancho Del Mar High School shall state the location of the meeting prominently and a notice of the meeting location shall be posted on the City Hall door. Section 4. Resolution No. 22 fixing the day and hour of the Regular City Council meetings and Resolution No. 465 establishing an alternative City Hall for the purpose of holding meetings of the City Council are hereby rescinded. Section 5. The City Clerk is directed to certify to the passage and adoption of this resolution and enter it into the book of original resolutions. PASSED, APPROVED AND ADOPTED this 27th day of June, 2016. Bea Dieringer Mayor ATTEST: Heidi Luce City Clerk Resolution No. 1186 STATE OF CALIFORNIA COUNTY OF LOS ANGELES CITY OF ROLLING HILLS ) ) ) The foregoing Resolution No. 1186 entitled: SS A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS FIXING THE DAY, HOUR AND LOCATION OF REGULAR CITY COUNCIL METTINGS, ESTABLISHING AN ALTERNATE LOCATION FOR CITY COUNCIL MEETINGS AND RESCINDING RESOLUTIONS NO. 22 AND 465. was approved and adopted at a regular meeting of the City Council on June 27, 2016, by the following roll call vote: AYES: NOES: ABSENT: ABSTAIN: Heidi Luce City Clerk Resolution No. 1186 -2- TO: FROM: THRU: SUBJECT: ecr9 frark9 flat INCORPORATED JANUARY 24, 1957 NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 FAX (310) 377-7288 Agenda Item No.: 8-A Mtg. Date: 06/27/16 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL TERRY SHEA, FINANCE DIRECTOR RAYMOND R. CRUZ, CITY MANAGER CONSIDERATION OF A THREE-YEAR PROFESSIONAL SERVICES AGREEMENT WITH LANCE, SOLL & LUNGHARD, LLC FOR ANNUAL AUDIT SERVICES DATE: JUNE 27, 2016 ATTACHMENT: Agreement (including RFP and LSL Proposal) RECOMMENDATION It is recommended that the City Council authorize and direct the City Manager to execute a three (3) year agreement with the firm of Lance, Soll & Lunghard LLP for annual audit services commencing with the 2015/16 fiscal year audit. BACKGROUND The City's current contract for audit services has expired, as a result the City issued a Request for Proposals (RFP) for professional independent audit services on May 5, 2016. The RFP was posted on the City's website as well the California Society of Municipal Finance Officers website. The proposed term of the engagement is for three years beginning with Fiscal Year 2015-16, with two one year renewal options. The proposals were due on May 31, 2016 and the City received seven proposals via email by the deadline. After the Finance Director and City Manager reviewed the proposals and checking their references, they recommended the top three firms, Lance, Soll, Lunghard LLP, Teaman, Ramirez & Smith, Inc. and Van Lant & Fankhanel, LLP be interviewed by the Finance/Budget/ Audit Committee. 0 DISCUSSION Interviews were held on June 8th with the Finance/Budget/Audit Committee and included the City Manager and Finance Director. All three firms scored well during the interview process and while any of the firms would make a great choice we are recommending Lance, Soil & Lunghard, LLP (LSL) because of their longevity and reputation, having provided services to governments for over 80 years, including the City of Rolling Hills for the past six years. The specific knowledge LSL has about the City and its operations will enhance the quality of the audit. Their clients include Hidden Hills, who they have served for approximately 29 years, as well as Palos Verdes Estates and Canyon Lake. As such, they are familiar with the unique aspects of both a small and private city. The Firms each submitted a cost proposal, and the proposed costs for the five year engagement by Firm is as follows: Lance, So11 Lunghard, LLP $ 84,580 Teaman, Ramirez & Smith, Inc. $ 88,550 Van Lant & Fankhanel, LLP $105,700 FISCAL IMPACT The total compensation over the three-year agreement for the City's annual audits shall not exceed $50,340 as reflected in the table below: Audit for Fiscal Year Cost 2015-16 $16,780 2016-17 $16,780 2017-18 $16,780 Total 3 Year Cost $50,340 The agreement includes an option to extend the agreement for two additional years at the annual cost reflected in the table below: Audit for Fiscal Year Cost 2018-19 $17,120 2019-20 $17,120 Total 5 Year Cost $85,580 The 2016-17 Budget includes sufficient funding the first year of this contract while funding for the four remaining terms is contingent upon a budget appropriation each fiscal year. 0 CONCLUSION Recognizing that Lance, So11 & Lunghard, LLP has substantial experience, is familiar with the City and has performed well over the past six -years, it is recommended that the City enter into a new three-year agreement with Lance, Soll & Lunghard, LLP. TS/RC:hi LSL audit staff report 2016.docx a THIS PAGE INTENTIONALLY LEFT BLANK CITY OF ROLLING HILLS AGREEMENT FOR SERVICES This Agreement is made on this 27th day of June 2016, at Rolling Hills, California, by and between the City of Rolling Hills, a municipal corporation, 2 Portuguese Bend Road, Rolling Hills, California 90274 (hereinafter referred to as the "CITY") and Lance, Soll & Lunghard, LLP Certified Public Accountants, 203 North Brea Blvd., Suite 203, Brea, CA 92821 (hereinafter referred to as the "CONTRACTOR"). RECITALS A. The CITY proposes to contract for professional services as outlined below; B. The CONTRACTOR is willing to perform such services and has the necessary qualifications by reason of experience, preparation, and organization to provide such services; C. NOW, THEREFORE, the CITY and the CONTRACTOR, mutually agree as follows: 1. SERVICES. The CONTRACTOR shall perform those services set forth in "Exhibit A," which is attached hereto and incorporated herein by reference. 2. TERM OF AGREEMENT. The term of this contract shall commence upon execution by both parties and shall expire in 2019 upon completion of the 2017/18 annual audit unless extended in writing in advance by both parties. The CITY reserves the right to extend the term of this contract for two (2) additional one-year terms subject to the satisfactory negotiation of terms, including a price acceptable to both the CITY and the CONTRACTOR. 3. TIME OF PERFORMANCE. The services of the CONTRACTOR are to commence upon receipt of a.notice to proceed from the CITY and shall continue until all authorized work is completed to the CITY's satisfaction, in accordance with the schedule incorporated in "Exhibit A," unless extended in writing by the CITY. 4. PAYMENT FOR SERVICES. The CONTRACTOR shall be compensated in an amount as described in "Exhibit B" pursuant to this Agreement as described in "Exhibit A." Compensation shall under no circumstances be increased except by written amendment of this Agreement. The CONTRACTOR shall be paid within thirty (30) days of presentation of an invoice to the CITY for services performed to the CITY's satisfaction. The CONTRACTOR shall submit invoices monthly describing the services performed, the date services were performed, a description of reimbursable costs, and any other information requested by the CITY. 5. CONTRACT ADMINISTRATION. 5.1. The CITY's Representative. Unless otherwise designated in writing, Bryan Gruber shall serve as the CITY's representative for the CITY OF ROLLING HILLS AGREEMENT FOR SERVICES administration of the project. All activities performed by the CONTRACTOR shall be coordinated with this person. 5.2. Manager -in -Charge. For the CONTRACTOR, Bryan Gruber shall be in charge of the project on all matters relating to this Agreement and any agreement or approval made by her/him shall be binding on the CONTRACTOR. The Manager -in -Charge shall not be replaced without the written consent of the CITY. 5.3. Responsibilities of the CITY. The CITY shall provide all relevant documentation in its possession to the CONTRACTOR upon request in order to minimize duplication of efforts. The CITY's staff shall work with the CONTRACTOR as necessary to facilitate performance of the services. 5.4. Personnel. The CONTRACTOR represents that it has or will secure at its own expense all personnel required to perform the services under this Agreement. All of the services required under this Agreement will be performed by the CONTRACTOR or under its supervision, and all personnel engaged in the work shall be qualified to perform such services. The CONTRACTOR reserves the right to determine the assignment of its own employees to the performance of the CONTRACTOR's services under this Agreement, but the CITY reserves the right, for good cause, to require the CONTRACTOR to exclude any employee from performing services on the CITY's premises. 6. TERMINATION. 6.1. Termination for Convenience. Either party may terminate this Agreement without cause and in its sole discretion at any time by giving the other party thirty (30) days' written notice of such termination. In the event of such termination, the CONTRACTOR shall cease services as of the date of termination and shall be compensated for services performed to the CITY's satisfaction up to the date of termination. 6.2. Termination for Cause. All terms, provisions, and specifications of this Agreement are material and binding, and failure to perform any material portion of the work described herein shall be considered a breach of this Agreement. Should the Agreement be breached in any manner, the CITY may, at its option, terminate the Agreement not less than five (5) days after written notification is received by the CONTRACTOR to remedy the violation within the stated time or within any other time period agreed to by the parties. In the event of such termination, the CONTRACTOR shall be responsible for any additional costs incurred by the CITY in securing the services from another contractor. 2 CITY OF ROLLING HILLS AGREEMENT FOR SERVICES 7. INDEMNIFICATION. The CONTRACTOR shall indemnify, defend, and hold harmless the CITY, and its officers, employees, and agents ("CITY indemnitees"), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable attorneys' fees and costs of litigation ("claims"), arising from the CONTRACTOR's negligent or wrongful acts, errors, or omissions in the performance of the services under this Agreement. In the event the CITY indemnitees are made a party to any action, lawsuit, or other adversarial proceeding alleging negligent or wrongful conduct on the part of the CONTRACTOR: 7.1. The CONTRACTOR shall provide a defense to the CITY indemnitees or at the CITY's option reimburse the CITY indemnitees their costs of defense, including reasonable attorneys' fees, incurred in defense of such claims; and 7.2. The CONTRACTOR shall promptly pay any final judgment or portion thereof rendered against the CITY indemnitees with respect to claims determined by a trier of fact to have been the result of the CONTRACTOR's negligent or wrongful performance. 8. INSURANCE REQUIREMENTS. 8.1. The CONTRACTOR, at the CONTRACTOR's own cost and expense, shall procure and maintain, for the duration of the contract, the following insurance policies: 8.1.1. Workers' Compensation Coverage. The CONTRACTOR shall maintain Workers' Compensation Insurance and Employer's Liability Insurance for its employees in accordance with the laws of the State of California in the amount of not less than one million dollars ($1,000,000). In addition, the CONTRACTOR shall require any and every subcontractor to similarly maintain Workers' Compensation Insurance and Employer's Liability Insurance in accordance with the laws of the State of California for all of the subcontractor's employees. Any notice of cancellation or non -renewal of all Workers' Compensation policies must be received by the CITY at least thirty (30) days prior to such change. The insurer shall agree to waive all rights of subrogation against the CITY, its officers, agents, employees, and volunteers for losses arising from work performed by the CONTRACTOR for City. This provision shall not apply if the CONTRACTOR has no employees performing work under this Agreement. If the CONTRACTOR has no employees for the purposes of this Agreement, the CONTRACTOR shall sign the "Certificate of Exemption from Workers' Compensation Insurance" which is 3 O CITY OF ROLLING HILLS AGREEMENT FOR SERVICES attached hereto and incorporated herein by reference as "Exhibit C." 8.1.2. General Liability Coverage. The CONTRACTOR shall maintain commercial general liability insurance in an amount of not less than two million dollars ($2,000,000) per occurrence for bodily injury, personal injury, and property damage. If a commercial general liability insurance form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit. 8.1.3. Automobile Liability Coverage. The CONTRACTOR shall maintain automobile liability insurance covering bodily injury and property damage for all activities of the CONTRACTOR arising out of or in connection with the work to be performed under this Agreement, including coverage for owned, hired, and non -owned vehicles, in an amount of not less than one million dollars ($1,000,000) combined single limit for each occurrence. If CONTRACTOR or CONTRACTOR's employees will use personal autos in any way on this project, CONTRACTOR shall obtain evidence of personal auto liability coverage for each such person. 8.1.4. Professional Liability Coverage. The CONTRACTOR shall maintain professional errors and omissions liability insurance for protection against claims alleging negligent acts, errors, or omissions which may arise from the CONTRACTOR's operations under this Agreement, whether such operations be by the CONTRACTOR or by its employees, subcontractors, or subconsultants. The amount of this insurance shall not be less than one million dollars ($1,000,000) on a claims -made annual aggregate basis, or a combined single -limit -per -occurrence basis. 8.1.5. Self Insured Retention/Deductibles. All policies required by this Agreement to name the CITY as additional insured shall allow CITY, to satisfy the self -insured retention ("SIR") and/or deductible of the policy in lieu of the CONTRACTOR (as the named insured) should CONTRACTOR fail to pay the SIR or deductible requirements. The amount of the SIR or deductible shall be subject to the approval of the City Attorney and the City Manager. CONTRACTOR understands and agrees that satisfaction of this requirement is an express condition precedent to the effectiveness of this Agreement. Failure by CONTRACTOR as primary insured to pay its SIR or deductible constitutes a material breach of this Agreement. Should CITY CITY OF ROLLING HILLS AGREEMENT FOR SERVICES pay the SIR or deductible on CONTRACTOR'S behalf upon the CONTRACTOR'S failure or refusal to do so in order to secure defense and indemnification as an additional insured under the policy, CITY may include such amounts as damages in any action against CONTRACTOR for breach of this Agreement in addition to any other damages incurred by CITY due to the breach. 8.2. Endorsements. Each general liability and automobile liability insurance policy shall be issued by insurers possessing a Best's rating of no less than A -:VII. Each general liability insurance policy shall be endorsed with the specific language of Section 8.2.1 below. CONTRACTOR also agrees to require all contractors, and subcontractors to do likewise. 8.2.1. "The CITY, its elected or appointed officers, officials, employees, agents, and volunteers are to be covered as additional insureds with respect to liability arising out of work performed by or on behalf of the CONTRACTOR, including materials, parts, or equipment furnished in connection with such work or operations." 8.2.2. This policy shall be considered primary insurance as respects the CITY, its elected or appointed officers, officials, employees, agents, and volunteers. Any insurance maintained by the CITY, including any self -insured retention the CITY may have, shall be considered excess insurance only and shall not contribute with this policy. 8.2.3. This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring company. 8.2.4. CONTRACTOR acknowledges that the insurance coverage and policy limits set forth in this section constitute the minimum amounts of coverage required. Any insurance proceeds available to the CITY in excess of the limits and coverage required in this agreement and which is applicable to a given loss, will be available to the CITY. 8.2.5. The insurer waives all rights of subrogation against the CITY, its elected or appointed officers, officials, employees, or agents regardless of the applicability of any insurance proceeds, and agrees to require all subcontractors to do likewise. CITY OF ROLLING HILLS AGREEMENT FOR SERVICES 8.2.6. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the City, its elected or appointed officers, officials, employees, agents, or volunteers. 8.2.7. The insurance provided by this policy shall not be suspended, voided or reduced in coverage or in limits except after thirty (30) days' written notice has been submitted to the CITY and approved of in writing, except in the case of cancellation, for which ten (10) days' written notice shall be provided. 8.2.8. Contractor agrees to provide immediate notice to City of any claim or loss against Contractor arising out of the work performed under this agreement. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City. 8.3. Deductibles and Self -Insured Retentions. Any deductibles or self - insured retentions must be declared to and approved by the CITY. At the CITY's option, the CONTRACTOR shall demonstrate financial capability for payment of such deductibles or self -insured retentions. 8.4. Certificates of Insurance. The CONTRACTOR shall provide certificates of insurance with original endorsements to the CITY as evidence of the insurance coverage required herein. Certificates of such insurance shall be filed with the CITY on or before commencement of performance of this Agreement. Current certification of insurance shall be kept on file with the CITY at all times during the term of this Agreement. The CONTRACTOR shall provide written evidence of current automobile coverage to comply with the automobile insurance requirement. 8.5. Failure to Procure Insurance. Failure on the part of the CONTRACTOR to procure or maintain required insurance shall constitute a material breach of contract under which the CITY may terminate this Agreement pursuant to Section 6.2 above. 9. ASSIGNMENT AND SUBCONTRACTING. The parties recognize that a substantial inducement to the CITY for entering into this Agreement is the professional reputation, experience, and competence of the CONTRACTOR. Assignments of any or all rights, duties, or obligations of the CONTRACTOR under this Agreement will be permitted only with the express consent of the CITY. The CONTRACTOR shall not subcontract any portion of the work to be performed under this Agreement without the written authorization of the CITY. If the CITY consents to such subcontract, the CONTRACTOR shall be fully responsible to the CITY for all acts or omissions of the subcontractor. Nothing in this Agreement shall create any contractual relationship between the CITY 6 0 CITY OF ROLLING HILLS AGREEMENT FOR SERVICES and subcontractor nor shall it create any obligation on the part of the CITY to pay or to see to the payment of any monies due to any such subcontractor other than as otherwise is required by law. 10. COMPLIANCE WITH LAWS, CODES, ORDINANCES, AND REGULATIONS. The CONTRACTOR shall use the standard of care in its profession to comply with all applicable federal, state, and local laws, codes, ordinances, and regulations. 10.1. Taxes. The CONTRACTOR agrees to pay all required taxes on amounts paid to the CONTRACTOR under this Agreement, and to indemnify and hold the CITY harmless from any and all taxes, assessments, penalties, and interest asserted against the CITY by reason of the independent contractor relationship created by this Agreement. In the event that the CITY is audited by any Federal or State agency regarding the independent contractor status of the CONTRACTOR and the audit in any way fails to sustain the validity of a wholly independent contractor relationship between the CITY and the CONTRACTOR, then the CONTRACTOR agrees to reimburse the CITY for all costs, including accounting and attorneys' fees, arising out of such audit and any appeals relating thereto. 10.2. Workers' Compensation Law. The CONTRACTOR shall fully comply with the workers' compensation law regarding the CONTRACTOR and the CONTRACTOR's employees. The CONTRACTOR further agrees to indemnify and hold the CITY harmless from any failure of the CONTRACTOR to comply with applicable workers' compensation laws. The CITY shall have the right to offset against the amount of any compensation due to the CONTRACTOR under this Agreement any amount due to the CITY from the CONTRACTOR as a result of the CONTRACTOR's failure to promptly pay to the CITY any reimbursement or indemnification arising under this Section. 10.3 Licenses. The CONTRACTOR represents and warrants to the CITY that it has all licenses, permits, qualifications, insurance, and approvals of whatsoever nature which are legally required of the CONTRACTOR to practice its profession. The CONTRACTOR represents and warrants to the CITY that the CONTRACTOR shall, at its sole cost and expense, keep in effect or obtain at all times during the term of this Agreement any licenses, permits, insurance, and approvals which are legally required of the CONTRACTOR to practice its profession. The CONTRACTOR shall maintain a City of West Hollywood business license, if required under CITY ordinance. 11. CONFLICT OF INTEREST. The CONTRACTOR confirms that it has no financial, contractual, or other interest or obligation that conflicts with or is harmful to performance of its obligations under this Agreement. The 7 II CITY OF ROLLING HILLS AGREEMENT FOR SERVICES CONTRACTOR shall not during the term of this Agreement knowingly obtain such an interest or incur such an obligation, nor shall it employ or subcontract with any person for performance of this Agreement who has such incompatible interest or obligation. 12. NON-DISCRIMINATION AND EQUAL EMPLOYMENT OPPORTUNITY. The CONTRACTOR represents and agrees that it does not and will not discriminate against any employee or applicant for employment because of race, religion, color, medical condition, sex, sexual orientation and/or gender identity, national origin, political affiliation or opinion, or pregnancy or pregnancy -related condition. 13. RECORDS AND AUDITS. The CONTRACTOR shall maintain accounts and records, including personnel, property, and financial records, adequate to identify and account for all costs pertaining to this Agreement and such other records as may be deemed necessary by the CITY or any authorized representative as described in "Exhibit A." All records shall be made available at the request of the CITY, with reasonable notice, during regular business hours. 14. OWNERSHIP OF DOCUMENTS. It is understood and agreed that the CITY shall own all documents and other work product of the CONTRACTOR, except the CONTRACTOR's notes and work papers, which pertain to the work performed under this Agreement. The CITY shall have the sole right to use such materials in its discretion and without further compensation to the CONTRACTOR, but any re -use of such documents by the CITY on any other project without prior written consent of the CONTRACTOR shall be at the sole risk of the CITY. The CONTRACTOR shall at its sole expense provide all such documents to the CITY upon request. 15. INDEPENDENT CONTRACTOR. The CONTRACTOR is and shall at all times remain as to the CITY a wholly independent CONTRACTOR. Neither the CITY nor any of its agents shall have control over the conduct of the CONTRACTOR or any of the CONTRACTOR's employees or agents, except as herein set forth. The CONTRACTOR shall not at any time or in any manner represent that it or any of its agents or employees are in any manner agents or employees of the CITY. The CONTRACTOR shall have no power to incur any debt, obligation, or liability on behalf of the CITY or otherwise act on behalf of the CITY as an agent. 16. NOTICE. All Notices permitted or required under this Agreement shall be in writing, and shall be deemed made when delivered to the applicable party's representative as provided in this Agreement. Additionally, such notices may be given to the respective parties at the following addresses, or at such other addresses as the parties may provide in writing for this purpose. Such notices shall be deemed made when personally delivered or when 8 is CITY OF ROLLING HILLS AGREEMENT FOR SERVICES mailed forty-eight (48) hours after deposit in the U.S. mail, first-class postage prepaid, and addressed to the party at its applicable address. CITY OF ROLLING HILLS 2 Portuguese Bend Road Rolling Hills, CA 90274 Attention: Finance Director CONTRACTOR: Lance, Soil & Lunghard, LLP Certified Public Accountants, 203 N. Brea Blvd., Suite 203 Brea, CA 92821 Attention: Bryan Gruber 17. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California. 18. - ENTIRE AGREEMENT; MODIFICATION. This Agreement supersedes any and all other agreements, either oral or written, between the parties, and contains all of the covenants and agreements between the parties. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, oral or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. Any agreement, statement, or promise not contained in the Agreement, and any modification to the Agreement, will be effective only if signed by both parties. 19. WAIVER. Waiver of a breach or default under this Agreement shall not constitute a continuing waiver of a subsequent breach of the same or any other provision under this agreement. Payment of any invoice by the CITY shall not constitute a waiver of the CITY's right to obtain correction or replacement of any defective or noncompliant work product. 20. EXECUTION. This Agreement may be executed in several counterparts, each of which shall constitute one and the same instrument and shall become binding upon the parties when at least one copy hereof shall have been signed by both parties hereto. In approving this Agreement, it shall not be necessary to produce or account for more than one such counterpart. 21. AUTHORITY TO ENTER AGREEMENT. The CONTRACTOR has all requisite power and authority to conduct its business and to execute, deliver, and perform this Agreement. Each party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and to bind each respective party. 9 i3 CITY OF ROLLING HILLS AGREEMENT FOR SERVICES IN WITNESS WHEREOF, the parties have executed this Agreement the 27th day of June, 2016. CONTRACTOR: Lance, Soil & Lunghard, LLP Bryan Gruber, CPA, Partner CITY OF ROLLING HILLS: Terry Shea, Finance Director Raymond R. Cruz, City Manager ATTEST: Heidi Luce, City Clerk 10 CITY OF ROLLING HILLS AGREEMENT FOR SERVICES Exhibit A REQUEST FOR PROPOSAL & TECHNICAL PROPOSAL A-1 THIS PAGE INTENTIONALLY LEFT BLANK A-2 C) CITY OF ROLLING HILLS, CA REQUEST FOR PROPOSAL FOR PROFESSIONAL INDEPENDENT AUDIT SERVICES Fiscal Years 2015-16 through 2017-18 (With the option for each of the two subsequent fiscal years) MAY 5, 2016 Please Submit Proposals to Terry Shea Director of Finance City of Rolling Hills fin ancencitvofrh.net Deadline for Submittal of Proposals: BEFORE 5 p.m. Tuesday, May 31, 2016 A"3® CITY OF ROLLING HILLS REQUEST FOR PROPOSAL 1. INTRODUCTION A. General Information The City of Rolling Hills is requesting proposals from qualified certified public accountant firms to audit its financial statements for the three fiscal years beginning with the fiscal year ending June 30, 2016, with the option of auditing its financial statements for each of the two (2) subsequent fiscal years. These audits are to be performed in accordance with auditing standards generally accepted in the United States of America, the standards set forth for financial audits contained in Government Auditing Standards (1994) issued by the Comptroller General of the United States, and the U.S. Office of Management and Budget (OMB) Circular A-133, Audits of State and Local Governments, and Non -Profit Organizations. There is no expressed or implied obligation for the City of Rolling Hills to reimburse responding firms for any expenses incurred in preparing proposals in response to this request. Materials submitted by respondents are subject to public inspection under the California Public Records Act (Government Code Sec. 6250 et seq.), unless exempt. To be considered, one (1) electronic copy (PDF) of a proposal must be received by Terry Shea, Director of Finance, City of Rolling Hills, finance@citvofi h.net by 5:OOPM Tuesday May 31, 2016. The City of Rolling Hills reserves the right to reject any or all proposals submitted. During the evaluation process, the City of Rolling Hills reserves the right, where it may serve the City of Rolling Hills's best interest, to request additional information or clarifications from proposers, or to allow corrections of errors or omissions. At the discretion of the City of Rolling Hills, firms submitting proposals will be requested to make oral presentations as part of the evaluation process. The City of Rolling Hills reserves the right to retain all proposals submitted and to use any idea(s) in a proposal regardless of whether that proposal is selected. Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposals, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the City of Rolling Hills and the firm selected. It is anticipated the selection ofa firm will be completed by June 14, 2016. Following notification of the selected firm, a recommendation and proposed contract will be prepared for review and approval by the City Council at its June 20, 2016 meeting. The City reserves the right to reject any or all proposals, to waive any non -material irregularities or information in any proposal, and to accept or reject any items or combination of items. B. Term of Engagement It is the intent of the City to contract for the services presented herein for a term of three (3) years. The City of Rolling Hills reserves the right to extend the term of this contract for two (2) additional one-year terms subject to the satisfactory negotiation of terms, including a price acceptable to both the City and the selected firm. The proposal package shall present all-inclusive audit fees for each year of the contract term. Page 1 1 A-4 I b 2. NATURE OF SERVICES REQUIRED A. Scope of Work to be Performed The City of Rolling Hills desires the Annual Financial Report for the City of Rolling Hills to be prepared by the independent auditor and be fully compliant for GASB 34 for the fiscal year ended June 30, 2016 and each of the subsequent years, June 30, 2017 and 2018 of the audit firm's contract with the City. In prior years the City submitted its CAFR to the Government Finance Officers Association (GFOA) for review in their Certificate of Achievement for Excellence in Financial Reporting program, but will no longer be preparing a CAFR for submission. The selected independent auditor will be required to perform the following tasks. 1. The audit firm will perform an audit of all funds of the City of Rolling Hills. The audit will be conducted in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, issued by the Comptroller of the United States. The City's Annual Financial Report will be prepared and processed by the audit firm. The Annual Financial Report will be in full compliance with GASB 34 and 45. The audit firm will render their auditors' report on the basic financial statements which will include both Govemment-Wide Financial Statements and Fund Financial Statements. The audit firm will also apply limited audit procedures to Management's Discussion and Analysis (MD&A) and required supplementary information pertaining to the General Fund and each major fund of the City. 2. The audit firm will prepare the Annual State Controller's Report. 3. The audit firm shall perform agreed -upon auditing procedures pertaining to the City's GANN Limit (Appropriations Limit) and render a letter annually to the City regarding compliance. 4. The audit firm shall issue a separate "management letter" that includes recommendations for improvements in intemal control, accounting procedures and other significant observations that are considered to be non -reportable conditions. Management letters shall be addressed to the City Manager. 8. Auditing Standards to be Followed To meet the requirements of this Request for Proposal, the audit shall be performed in accordance with: 1. Generally accepted auditing standards as set forth by the American Institute of Certified Public Accounts; 2. The standards applicable to financial audits contained in Government Auditing Standards (201 I Revision), issued by the Comptroller General of the United States; Page 1 2 A-5 C) 2. NATURE OF SERVICES REQUIRED (continued) C. Working Paper Retention All working papers and reports must be retained at the auditor's expense for a minimum of seven (7) years, unless the firm is notified in writing by the City of Rolling Hills of the need to extend the retention period. The auditor will be required to make working papers available to the City of Rolling Hills or any government agencies included in the audit of federal grants. In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting significance. D. Irregularities and Illegal Acts Auditors shall be required to make an immediate, written report of all irregularities and illegal acts or indications of illegal acts of which they become aware to the following parties: City Manager; City Attorney; and the Director of Finance. 3. DESCRIPTION OF THE GOVERNMENT A. Background Information The City of Rolling Hills is located within the Palos Verdes Peninsula portion of Los Angeles County, and services an area of 3 square miles with a population of 1,860. The City's fiscal year begins on July I and ends on June 30. The City of Rolling Hills was incorporated in 1957 as a general law city which operates under a council/manager form of government. The city government provides a full range of municipal services either directly or through contracts. These include sheriff and animal control (which are contracted for with Los Angeles County), planning, building, solid waste, general administrative services. The City is a private gated community with no public roads and property in the City for recreational use is under an exclusive lease to the Rolling Hills Community Association. The City of Rolling Hills's operating budget for FY 2015-16 is approximately $2.7 million for all funds combined. B. Fund Structure The City of Rolling Hills uses the following fund types and account groups in its financial reporting: Number of Fund Type/Account Group Individual City Funds General Fund Special Revenue Funds 6 Capital Projects Funds 2 Enterprise Funds Internal Service Funds Agency Funds Page 13 3. DESCRIPTION OF THE GOVERNMENT (continued) C. Component Units The City is defined, for financial reporting purposes, in conformity with the Governmental Accepting Standards Board's Codification Governmental Accounting and Financial Reporting Standards, Section 2100. Using these criteria, component units are included in the City's financial statements. There are no Component Units. D. Finance Operations The Finance Department is headed by the Director of Finance and is contracted out to Rogers, Anderson, Malody & Scott, LLP a CPA firm. The department is responsible for budgeting, financial reporting, financial audits, payroll, accounts payable, accounts receivable, and treasury functions. The department is also responsible for purchasing, and the data processing functions. E. Computer Systems The City of Rolling Hills contracts out their Information Technology Department. The Finance System is Fund Balance software and the City uses an outside provider for payroll. Microsoft Office Professional 2010 is the standard office suite. Outlook 2010 is the standard e-mail and calendar program. Windows10 is used for the finance staff's computers. F. Availability of Prior Year Reports and Work Papers Lance, Soll & Lunghard, LLP conducted the City's most recent audit. The work papers of the previous audits are the property of the previous auditor and can be reviewed by the successful Proposer. The following financial statements were prepared and audited by Lance, Soll & Lunghard, LLP. 1. City of Rolling Hills Comprehensive Annual Financial Report; In addition, interested proposers who wish to review prior year audit reports can go to the City of Rolling Hills website at www.rolline-hills.org. The City of Rolling Hills will use its best efforts to make prior audit reports available to proposers to aid their response to this request for proposal. 4. TIME REQUIREMENTS A. Proposal Calendar Request for Proposal lssued Due Date for Proposals (due by 5:00 p.m.) Oral Interviews Contract Awarded by City Council 8. Date Audit May Commence May 5, 2016 May 31, 2016 June 8, 2016 at 5:OOPM June 20, 2016 The City of Rolling Hills will have all records ready for audit and all management personnel available to meet with the firm's audit personnel the first week of October of each year of the audit. In prior years the audit firm performed the audit during November and December and did interim and yearend at the same dates. Page 14 A-7® 5. ASSISTANCE TO BE PROVIDED TO THE AUDITORS AND REPORT PREPARATION A. Finance Department and Clerical Assistance The Finance Department staff and responsible management personnel will be available during the audit to assist the firm by providing information, documentation and explanations. Terry Shea, Director of Finance and Michelle Gomez, accountant, will be responsible for acting as liaisons between the audit firm and the accounting personnel. B. Work Area, Telephones, and Office Equipment The City will provide the auditor with reasonable work space, desk and chairs. The auditor will also be provided with access to a telephone line, photocopying facilities and a FAX machine. 6. PROPOSAL REQUIREMENTS A. General Requirements I. Inquiries concerning the Request for Proposal and the subject of the Request for Proposal must be made to: Terry Shea Director of Finance 2 Portuguese Bend Road Rolling Hills, CA 90274 (310)377-1521 finance a,cityofih.net CONTACT WITH PERSONNEL OF THE CITY OTHER THAN THE ABOVE REGARDING THIS REQUEST FOR PROPOSAL MAY BE GROUNDS FOR ELIMINATION FROM THE SELECTION PROCESS. 2. Submission of Proposal: One (1) electronic copy (PDF) of the proposal shall be received in the office of the Finance Department of the City of Rolling Hills by 5:00 p.m. on May 31, 2016 for a proposal to be considered. The Proposal should address the items listed in sections C and D below. The Proposal should be addressed as follows: City of Rolling Hills Terry Shea Director of Finance 2 Portuguese Bend Road Rolling Hills, CA 90274 B. Format for Technical Proposal 1. Title Page showing the request for proposal's subject; the firm's name; the name, address and telephone number of a contact person; and the date of the proposal. 2. Table of Contents identifying the materials submitted by section and page number. Page 1 5 A-8 6. PROPOSAL REQUIREMENTS (continued) 3. Signed Transmittal Letter briefly stating the Proposer's understanding of the work to be done, the commitment to perform the work within the time period, and the name(s) of the person(s) authorized to represent the Proposer, title, address, and telephone number. C. Contents of Technical Proposal The purpose of the Technical Proposal is to demonstrate the qualifications, competence and capacity of the firms seeking to undertake an independent audit of the City in conformity with the requirements of this request for proposals. As such, the substance of proposals will carry more weight than the form or manner of presentation. The Technical Proposal should demonstrate the qualifications of the firm and of the particular staff to be assigned to the engagement. It should also specify an audit approach that will meet the request for proposals requirements. The Technical Proposal should address all the points outlined in the request for proposal (excluding any cost information which should only be included in the Sealed Dollar Cost Bid). The proposal should be prepared simply and economically, providing a straightforward, concise description of the proposer's capabilities to satisfy the requirements of the request for proposals. While additional data may be presented, the following subjects must be included. They represent the criteria against which the proposal will be evaluated. 1. License to Practice in California An affirmative statement should be included verifying the firm and all assigned key professional staff are properly licensed to practice in Califomia. 2. Independence The firm should provide an affirmative statement that it is independent of the City of Rolling Hills as defined by auditing standards generally accepted in the United States of America and the General Accounting Office's Governmental Auditing Standards. 3. Firm's Qualifications and Experience To qualify, the firm must have extensive experience in audits of local governments as well as experience with preparation of Comprehensive Annual Financial Statements in GASB 34 format. The Proposer should state the size of the firm, the size of the firm's governmental audit staff, the location of the office from which the work on this engagement is to be performed, and the number and nature of the professional staff to be employed in this engagement on a full-time basis and the number and nature of the staff to be so employed on a part-time basis. Staff consistency is an important consideration. The Proposer should provide the range of activities performed by the local office (e.g., audit, accounting, tax service and/or management consulting services). The Proposer should provide a list of all current municipal clients. The Proposer is also required to submit a copy of a report on its most recent external quality control review, with a statement whether that quality control review included a review of specific government engagements (required by Government Audit Standards (2011). Page 16 A-9 6. PROPOSAL REQUIREMENTS (continued) The Proposer shall also provide information on the results of any Federal or State desk reviews or field reviews of its audits during the past three (3) years. In addition, the firm shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three (3) years with State regulatory bodies or professional organizations. 4. Partner, Supervisory and Staff Qualifications and Experience Identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement. Include resumes, indicating whether each such person is registered or licensed to practice as a certified public accountant in California. Provide information on the government auditing experience of each person, including information on relevant continuing professional education for the past three (3) years and membership in professional organizations relevant to the performance of this audit. The firm should provide as much information as possible regarding the number, qualifications, experience and training, including relevant continuing professional education, of the specific staff assigned to the engagement. The firm also should indicate how the quality of staff over the term of the agreement will be assured. Provide as much information as possible regarding the number, qualifications, experience and training, including relevant continuing professional education, of the specific staff to be assigned to this engagement. Indicate how the quality of staff to be assigned to this engagement. Indicate how the quality of staff over the term of the agreement will be assured. Engagement partners, managers, other supervisory staff and specialists may be changed if those personnel leave the firm, are promoted or are assigned to another office. These personnel may also be changed for other reasons with the express prior written permission of the City. However, in either case, the City retains the right to approve or reject replacements. Other audit personnel may be changed at the discretion of the Proposer provided that replacements have substantially the same or better qualifications or experience. 5. Similar Engagements with Other Government Entities For the firm's office that will be assigned responsibility for the audit, list the most significant engagements (maximum — 5) performed in the last three (3) years that are similar to the engagement described in this request for proposal. These engagements should be ranked on the basis of total staff hours. Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact. 6. Specific Audit Approach The proposal should set forth a work plan, including an explanation of the audit methodology to be followed, to perform the services required in Section II of this request for proposals. In developing the work plan, reference should be made to such sources of information as the City of Rolling Hills's budget and related materials, organizational charts, manuals and programs, and financial and other management information systems. Page 1 7 A-10 6. PROPOSAL REQUIREMENTS (continued) Proposers will be required to provide the following information on their audit approach: a. Proposed segmentation of the engagement; b. Level of staff and number of hours to be assigned to each proposed segment of the engagement; c. Sample size and the extent to which statistical sampling is to be used in the engagement; d. Extent of use of EDP software in the engagement; Type and extent of analytical procedures to be used in the engagement; f. Approach to be taken to gain and document an understanding of the City's intemal controls structure; Approach to be taken in determining laws and regulations that will be subject to audit test work; and h. Approach to be taken in drawing audit samples for purposes of tests of compliance. 7. Identification of Anticipated Potential Audit Problems The proposal should identify and describe any anticipated potential audit problems, the firm's approach to resolving these problems and any special assistance that will be requested from the City. NO DOLLARS SHOULD BE INCLUDED IN THE TECHNICAL PROPOSAL D. , Contents of Cost Proposal 1. Total All-inclusive Maximum Price g. The cost proposal should contain all pricing information relative to performing the audit; engagement as described in this request for proposals. The total all-inclusive maximum price to be bid is to contain all direct and indirect costs including all out-of-pocket expenses. • The City will not be responsible for expenses incurred in preparing and submitting the technical proposal or the sealed dollar cost bid. Such costs should not be included in the proposal. The cost proposal should be submitted in the format provided in Attachment A, "AUDIT WORK COST PROPOSAL FORM" and Attachment B, "ESTIMATE OF COST." 2. Manner of Payment Progress payment will be made on the basis of hours of work completed during the course of the engagement and out-of-pocket expenses incurred in accordance with the firm's proposal. Interim billings shall cover a period of not less than a calendar month. Page 1 8 A-11 7. EVALUATION PROCEDURES A. Review of Proposals City staff, consisting at a minimum, of the following, will evaluate submitted proposals: Terry Shea, Director of Finance Ray Cruz, City Manager Michelle Gomez, Accountant Evaluation Criteria Proposals will be evaluated using three (3) sets of criteria. Firms meeting the mandatory criteria will have their proposals evaluated and scored for both technical qualifications and price. Although price is a very important consideration for the City, the City will consider all criteria during the evaluation process and may or may not select the lowest priced proposal. The following represent the principal selection criteria, which will be considered during the evaluation process. I. Mandatory Elements a. The audit firm is independent and licensed to practice in California. b. The firm has no conflict of interest with regard to any other work performed by the firm for the City. c. The firm adheres to the instructions in this request for proposals on preparing and submitting the proposal. d. The firth submits a copy of its most recent external quality control review report and the firm has a record of quality audit work. e. The firm's past experience and performance on comparable government engagements. f. The quality of the firm's professional personnel to be assigned to the engagement and the quality of the firm's management support personnel to be available for technical consultation. g. Adequacy of proposed staffing plan for various segments of the engagement. h. Thoroughness of approach to conducting the audit of the City and demonstration of understanding of the objectives and scope of the audit. i. Commitment to timeliness in the conduct of the audit. j. Maximum fees to conduct the audit. Page 19 A-12 C 4 ATTACHMENT A AUDIT WORK COST PROPOSAL FORM Service 2015-16 2016-17 2017-18 2018-19 2019-20 City Audit and Related Reports GANN Limit Review Report State Controller's Report preparation Total (not to exceed) Page I 10 A-13 APPENDIX B ESTIMATE OF COST Name of Firm: Address: Contact Name: Contact Phone #: Contact Email: Fax#: 1. Auditor's Standard Billing Rates POSITION 2015/16 2016/17 2017/18 Partner Manager Senior Accountant Staff Accountant Clerical Page 1 1 1 A-14 f LSL•"•'• CITY OF ROLLING HILLS PROPOSAL TO PROVIDE PROFESSIONAL INDEPENDENT AUDITING SERVICES WWW.LSLCPAS.COM 714-672-0022 A-15 PROPOSAL FOR PROFESSIONAL INDEPENDENT AUDITING SERVICES Prepared by: Lance, Soli & Lunghard, LLP Certified Public Accountants 203 North Brea Blvd, Suite 203 Brea, CA 92821 (714) 672-0022 LSL•':: Contact Person: Bryan S. Gruber, CPA, Partner Bryan.gruber@Islcpas.com May 31, 2016 A-16 1 '1U) CITY OF ROLLING HILLS PROPOSAL FOR PROFESSIONAL AUDITING SERVICES TABLE OF CONTENTS Page No. Letter of Transmittal 1 Technical Proposal 3 License to Practice in California 3 Independence 3 Firm Qualification and Experience Size of the Firm and Size of the Firm Government Audit Staff 4 Locations of Offices 4 Number and Nature of the Professional Staff 5 Complete Listing of Current Governmental Audit Clients 5 External Quality Control Review 5 Desk Reviews of Audits 5 Disciplinary Action 5 Partner, Supervisory and Staff Qualifications and Experience 5 Similar Engagements with Other Government Entities 7 Specific Audit Approach Sample Size and Extent of Statistical Sampling 8 Extent of Use of Electronic Data Processing Software 8 Type and Extent of Analytical Procedures 9 Approach in Understanding and Documenting the Internal Control Structure 9 Approach in Drawing Audit Samples for Purpose of Tests of Compliance 9 Identification Anticipated Potential Audit Problems 10 A-17 ® CITY OF ROLLING HILLS PROPOSAL FOR PROFESSIONAL AUDITING SERVICES TABLE OF CONTENTS Page No. Appendices Appendix A — Listing of Current Government Audit Clients 11 Appendix B — Peer Review Report 13 Appendix C — Personnel Resumes Bryan S. Gruber, CPA, Engagement Partner 14 Debbie A. Harper, CPA, Concurring Partner 16 Maria-Luisa Valdez, CPA, Audit Manager 18 Jbselyn Esparza, Audit Senior 20 A-18 LSL:: May 31, 2016 Mr. Terry Shea Director of Finance City of Rolling Hills 2 Portuguese Bend Road Rolling Hills, CA 90274 Lance, Solt & Lunghard, LLP (LSL) is pleased to respond to your Request for Proposals for Professional Auditing Services. As a leader in the field of governmental accounting and auditing, we appreciate this opportunity given to us to present our professional qualifications. Because of our extensive public sector experience, our dedication to excellence and determination to retain the brightest and most talented professionals, we are certain that LSL is the most qualified accounting firm to provide professional auditing services to the City of Rolling Hills. The annual services that will be provided to the City of Rolling Hills, for the fiscal years ending June 30, 2016 through June 30, 2018 would be as follows: 1. Perform an audit of the City of Rolling Hills. The audit will be conducted in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, issued by the Comptroller of the United States. We will prepare the City's Financial Statements. The financial statements will be in full compliance with GASB 34 and will include both Government -Wide Financial Statements and Fund Financial Statements. We will apply limited audit procedures to Management's Discussion and Analysis (MD&A) and required supplementary information pertaining to the General Fund and each major fund of the City. 2. Prepare the City's annual state controller's report. 3. Perform agreed -upon auditing procedures pertaining to the City's GANN Limit (Appropriations Limit) and render a letter annually to the City regarding compliance. 4. Issue the Communication with Those Charged with Governance letter in accordance with SAS 114. 5. Provide a management recommendation letter addressed to the City Council of the City of Rolling Hills to communicate any material weaknesses or "reportable" conditions, if any such conditions are found. If no material weaknesses or reportable conditions are found, we agree to issue any communications related to other matters directly to the City Manager. Upon identification or indication of irregularities or illegal acts, we will make an immediate written report to the City Manager and the City Council. PrimeGlobal 203 N. Urea Blvd.. Style 203 1 Brea.: A 92821 ..1 Phone: 714.672.0022 LS L° Mr. Terry Shea Director of Finance City of Rolling Hills 6. LSL will be available for consultation throughout the year as a financial resource for the City of Rolling Hills. We will provide assistance including all applicable schedules in the implementation of any new applicable GASB pronouncements. The sections that follow describe the benefits your organization would receive from Lance, Soli & Lunghard, LLP. We are committed to provide the services discussed above in accordance with the timetable specified in your request for proposal. This proposal is a firm and irrevocable offer for the fiscal years ending June 30, 2016 through June 30, 2018 for one hundred twenty (120) days. For purposes of this proposal, Bryan S. Gruber, Partner is authorized to make representations for our firm. I can be reached at the address above or by phone at (714) 672-0022, by Fax at (714) 672-0331 or through email at bryan.gruber(&tslcpas.com Very truly yours, Bryan S. Gruber, Partner LANCE, SOLL & LUNGHARD, LLP 2 A-20 TECHNICAL PROPOSAL Lance, Soll & Lunghard, LLP (LSL) is a regional public accounting firm that has met the auditing needs of governmental entities throughout California for 87 years. This experience has led to the development of efficient procedures that provide numerous client benefits. Our clients have grown to understand that an audit from Lance, Soll & Lunghard; LLP provides them with a wealth of knowledge, confidence and value added services. For this and many other reasons, Lance, Soll & Lunghard, LLP has consistently been named one of the "Top Accounting Firms" in Orange County by the Orange County Business Journal. We adhere to Governmental Auditing Standards issued by the United States Governmental Accountability Office of the Comptroller General of the United States, also known as the "yellow book" 2011 Revision. These standards, known as the generally accepted government auditing standards (GAGAS), provide a framework for conducting high quality audits with competence, integrity, objectivity, and independence. In addition, guidance from the AICPA on financial and compliance reporting, Statement of Auditing Standards 122-125 ("clarifying standards") implemented in 2012, provide and support our approach and methodology of risk -based auditing. LICENSE TO PRACTICE IN CALIFORNIA Lance, Soll & Lunghard, LLP is a public accounting firm licensed by the State of California, Department of Consumer Affairs, as a Public Accounting Partnership. All of our partners and managers are Certified Public Accountants licensed by the State of California. As a firm, we are members of the American Institute of Certified Public Accountants and the California Society of Certified Public Accountants. All key staff to be assigned to this engagement is or will be licensed by the State of California to practice as Certified Public Accountants. INDEPENDENCE We meet the independence requirements as defined by Auditing Standards Generally Accepted in the United States of America and the U.S. General Accounting Office's Government Auditing Standards (December 2011 revision). We are a partnership consisting of ten partners who do not own any other business organization that has in the past, or will in the future, be providing services, supplies, materials or equipment to the City of Rolling Hills. During the past five years, we have had no professional relationships with the City of Rolling Hills. Lance, Soll & Lunghard, LLP will provide written notice of any professional relationship entered into during the period of the proposed agreement. LSL••....:: 3 A-21 TECHNICAL PROPOSAL FIRM QUALIFICATIONS AND EXPERIENCE As discussed earlier, Lance, Soil & Lunghard, LLP is a public accounting firm that has met the auditing needs of governmental entities throughout California for 87 years. This experience has led to the development of efficient procedures that provide numerous client benefits. Our clients have grown to understand that an audit from Lance, Solt & Lunghard, LLP provides them with a wealth of knowledge, confidence and value added services. SIZE OF THE FIRM AND SIZE OF THE FIRM GOVERNMENTAL AUDIT STAFF Our firm has approximately 65 employees including ten partners and professional staff of approximately fifty. Governmental staff consists of four partners, one senior manager, three managers, three supervisors, five seniors and fourteen staff auditors. The personnel assigned to this engagement will be as follows: Bryan S. Gruber, CPA Deborah A. Harper, CPA Maria-Luisa Valdez, CPA Joselyn Esparza Engagement Partner (field partner) Concurring Partner (quality control) Audit Manager (field manager) Audit Senior 1 to 2 additional staff All personnel assigned to the City of Rolling Hills will work on a full-time basis. LOCATIONS OF OFFICES 4 We have three offices in California which provide services to the western region of the United States. Our headquarters are located in Orange County in the City of Brea, California. We also have two other offices in Temecula Valley and Silicon Valley. The audit for the City of Rolling Hills will be staffed from our Orange County office. Ls um A-22 TECHNICAL PROPOSAL FIRM QUALIFICATION AND EXPERIENCE (Continued) NUMBER AND NATURE OF THE PROFESSIONAL STAFF The professional staff employed on this engagement will include a partner, a concurring partner, an audit manager, an audit senior, and one staff auditors. The audit senior will be supervising the audit and will be present at all times during the audit fieldwork. Our focused effort is to obtain and retain quality staff in order to maintain staff consistency and provide quality audit services with minimal disruption to our audit client. COMPLETE LISTING OF CURRENT GOVERNMENTAL AUDIT CLIENTS A complete listing of current governmental audit clients, along with phone numbers of contact personnel and references as to services provided, is contained in Appendix A to this proposal. We welcome you contacting any or all of these to get their opinion on the services we provide. EXTERNAL QUALITY CONTROL REVIEW C PA n Governmental Audit We are members of the American Institute of Certified Public Quality Center Member Accountant's Private Companies Practice Section, which has the requirement for peer review along with Generally Accepted Government Auditing Standards. We have participated in the peer review program since its inception and have undergone several peer reviews. The first review was conducted by Arthur Young & Company (now Ernst & Young) and the most recent by R.H. Johnston Accountancy Inc. Overall, they confirmed what we already knew, that our approach and procedures are in compliance with technical and professional pronouncements. All of these peer reviews covered governmental engagements. Our most recent peer review, conducted by R.H. Johnston Accountancy Inc., is included in Appendix B to this proposal. DESK REVIEWS OF AUDITS All of our Single Audit reports are desk reviewed either by the Federal cognizant agency or the State Controller's Office acting as the oversight agency. We have never had a report rejected by any of these agencies. In fact, we are highly regarded and recognized by the staff of the State controller's Office as a firm that always submits top quality reports. DISCIPLINARY ACTION There have been no disciplinary actions against our organization since its inception. PARTNER, SUPERVISORY AND STAFF QUALIFICATIONS AND EXPERIENCE The most critical component in the successful completion of an audit is the personnel assigned to carry out the responsibilities. We have assembled a LSL Team composed of individuals with the optimum mix of talents. The individuals assigned have experience in performing the tasks for which they are responsible, as well as familiarity with City accounting operations. In addition, each has developed extensive skills in a variety of other complementary subjects through their work with clients in other govemment areas. Thus, the experience gained on previous assignments can be applied and tailored to the unique needs of your organization. LSL is a regional public accounting firm licensed to practice in the State of California. The partners and manager assigned to the audit of the City of Rolling Hills have a current and valid CPA license to practice in the State of California. The partners at LSL are routinely an integral part of the audit process and will be overseeing and supervising staff personnel in the field. LSL":: 5 A-23 TECHNICAL PROPOSAL PARTNER, SUPERVISORY AND STAFF QUALIFICATIONS AND EXPERIENCE (Continued) For the City of Rolling Hills, the personnel assigned to the engagement would be as follows: Bryan S. Gruber, CPA Deborah A. Harper, CPA Maria Luisa Valdez, CPA Jocelyn Esparza Engagement Partner (field partner) Concurring Partner (quality control) Audit Manager Audit Senior Additional Professional Staff of one on the LSL team. Resume of the key personnel assigned are included in Appendix C and list the governmental auditing experience, relevant continuing professional education for the past three years, and memberships in professional organizations relevant to the performance of the audit of the City of Rolling Hills. As the firm's quality control policy, and in compliance with the continuing education requirements promulgated by the AICPA, General Accounting Office and the California Society of CPAs, all our staff auditors (certified and non -certified) meet the requirement of 40 hours of continuing education every year, with at least 24 hours in governmental accounting and auditing in a two year period. For our educational programs, we utilize in-house seminars, California Society of CPAs courses, AICPA Govemment Audit Quality Center courses, and Govemment Finance Officers Association courses. Our formal education program was reviewed by independent firms during our peer review process and no exceptions were noted. 6 LSL°:: A-24 TECHNICAL PROPOSAL PARTNER, SUPERVISORY AND STAFF QUALIFICATIONS AND EXPERIENCE (Continued) As noted previously, the firm's policy of assigning audit in -charge to an engagement requires that the in -charge have at least three years of municipal auditing experience. He or she must have demonstrated a high degree of understanding of municipal accounting and auditing, as well as of the firm's overall client philosophy. Any changes in personnel at the in -charge level or above will be approved by the City of Rolling Hills. LSL's philosophy is to provide quality audit services with minimal disruption to City staff. Our focused efforts to obtain and retain quality staff have further enabled us to provide this to our clients. We prepare the financial statements and footnote disclosures for most of our public sector clients that have received the GFOA award. All of our governmental partners, managers and seniors have been closely involved in the preparation of these reports. SIMILAR ENGAGEMENTS WITH OTHER GOVERNMENT ENTITIES Similar engagements performed would be as follows: City of Hidden Hills — Audit and preparation of a financial statement in accordance with GASB 34. These services have been performed for the last three years. Last audit completed was June 30, 2015. Engagement Partner is Mr. Bryan Gruber. Contact person: Ms. Randee Weinberger. Finance Manager (818) 888-9281. City of Duarte - Audit and preparation of a financial statement in accordance with GASB 34. These services have been performed for the last three years. Last audit completed was June 30, 2015. Engagement Partner is Mr. Bryan Gruber. Contact person: Ms. Kristen Petersen, Assistant City Manager (626)357-7931. City of San Dimas - Audit and preparation of a financial statement in accordance with GASB 34. These services have been performed for the last three years. Last audit completed was June 30, 2015. Engagement Partner is Mr. Bryan Gruber. Contact person: Mr. Michael O'brien , Administrative Services Manager (909) 394-6225. City of Solana Beach — Audit and preparation of a Comprehensive Annual Financial Report (CAFR) in accordance with GASB 34, which received the GFOA Award. These services have been provided to the City for the last three years. Last completed audit performed was for June 30, 2015. Engagement partner is Mr. Bryan Gruber. Contact person: Ms. Marie Berkuti, Finance Manager (858) 720-2463. LSL"":: 7 A-25 TECHNICAL PROPOSAL SIMILAR ENGAGEMENTS WITH OTHER GOVERNMENT ENTITIES (Continued) A complete listing of our current governmental audit clients, along with phone numbers of contact personnel and references as to services provided, is included in Appendix A to this proposal. We welcome you contacting any or all of these to get their opinion on the services we provide. SPECIFIC AUDIT APPROACH We utilize a governmental audit program which we will tailor to the City of Rolling Hills's operations. The tailoring is necessary to accommodate specific client circumstances and to recognize differences in organizational structure. Our audit programs are organized by financial statement category. This approach takes full advantage of our accumulated experience. The primary benefit is that the risk of omitting important procedures is substantially reduced. We believe that this approach tends to be the most effective and efficient for an entity such as the City of Rolling Hills. The audit procedures are listed in the most logical sequence which improves efficiency. The savings in effort and time gained by using our audit program can free an auditor's attention for unusual or difficult situations that may arise. The audit programs are designed to increase audit efficiency by linking financial statement assertions, audit objectives, and procedures that are basic to most governmental audit engagements. SAMPLE SIZE AND EXTENT OF STATISTICAL SAMPLING Our approach may be to utilize statistical sampling in the areas of receipts, disbursements, utility billing and payroll. Here we develop a statistical conclusion based upon an initial computer selected random sample which is based on the population and other risk factors identified. If errors are noted in the sample, the sample size will be expanded. We believe that a random selection can be efficient, while providing each item in the population an equal chance of being selected. Additionally, we may select a stratified sample of all transactions over a specified dollar limit for review. This allows us to cover all high dollar value transactions not otherwise selected in the random sample. Our samples are selected randomly utilizing IDEA data analysis software. EXTENT OF USE OF ELECTRONIC DATA PROCESSING SOFTWARE LSL performs paperless audits utilizing CaseWare Auditing Software and IDEA Software (for Data Extraction). We extensively use notebook computers in the field, with spreadsheet software, for financial statement preparation and analytical procedures. Our traditional approach is to "audit around" the computer, which means that we verify output by agreeing it, through our audit tests, with corresponding source input transactions. We do not use audit software that runs through the City's computer system. Like other aspects of the internal control structure, computer controls and processes are documented in our memoranda and questionnaires. We will consider whether specialized skills are needed to consider the effect of computer processing on the audit, to understand the internal control structure policies and procedures or to design and perform audit procedures. We will consider the complexity of the computer system and assess whether we can identify the types of misstatements that might occur. L:::: :: 8 A-26 TECHNICAL PROPOSAL SPECIFIC AUDIT APPROACH (Continued) TYPE AND EXTENT OF ANALYTICAL PROCEDURES We use analytical procedures as an overall review of the financial information in the preliminary and final stages of the audit. These procedures are designed to assist us in planning our audit and in assessing the propriety of the conclusions reached and in the evaluation of the overall financial statement presentation. The procedures to be utilized consist of determining expectations for percentage increases and decreases between significant revenue, expenditure and balance sheet accounts, reading the financial statements and related notes, and we focus on overall relationships within the financial statements. Once determined, these are reviewed to determine if the changes appear reasonable or require further analysis. For all significant differences, explanations are obtained as to why the situation occurred and additional substantive procedures may be applied and related evidence gathered to resolve concerns and questions. APPROACH IN UNDERSTANDING AND DOCUMENTING THE INTERNAL CONTROL STRUCTURE To gain an understanding of the City's internal control structure, we will perform procedures as required by the new Auditing Standards, primarily SAS 104-111. This will include documenting the major transaction classes, the purpose of funds, the structure of the City and to quantify materiality. We will review and make recommendations on the internal control structure, which consists of Control Environment, Accounting System and Control Procedures. We will review internal controls in the area of cash; investments; revenues and receivables; expenditures and accounts payable; payroll; inventories; property and equipment, debt and debt service; insurance and claims. In addition, during the performance of the Single Audit, we will review areas of internal controls over federal grants, including both general and specific requirements, claims for advances and reimbursements, and amounts claimed or used for matching. Based on the result of our review, we will issue a formal internal control report (SAS 115 Letter) that will identify any significant deficiencies and/or material weaknesses noted. This report is required by the Govemment Auditing Standards issued by the Comptroller General of the United States, as well as the Single Audit Act. In addition, we will also issue a separate communication letter directly to the governing board. This letter will communicate any significant deficiencies or material weaknesses we identify in the internal control system and other matters that we feel should be communicated to the governing board. All internal control issues will initially be discussed with the Finance Department at the exit meeting upon completion of the audit field work. APPROACH IN DRAWING AUDIT SAMPLES FOR PURPOSE OF TESTS OF COMPLIANCE For the purpose of tests of compliances, we use audit sampling that involve inspection of documents and reports indicating performance of the policy or procedures and, in many cases, re -performance of the application of the policy or procedures. These sampling procedures test the operating effectiveness of an internal control structure policy or procedures by determining how the policy or procedure was applied, the consistency with which it was applied during the audit period, and by whom it was applied. To achieve this goal, we draw samples in the area of disbursements, receipts, utility billing and payroll. Each document selected will be tested for various attributes that are designed to verify compliance with different aspects of internal controls. Additionally, each sample item will be tested for coding to the proper accounts and posting to the general ledger. LSu":: A � A-27 TECHNICAL PROPOSAL IDENTIFICATION OF POTENTIAL AUDIT PROBLEMS We do not anticipate any significant potential audit problems. However, our approach to resolving audit problems, once they have been identified, is to draw upon our internal resources to get the job done. Most of our clients have us prepare the financial statements and assist them in handling complicated accounting matters. Therefore, we have the resources to handle most problems encountered. LSL��:: 10 A-28 Appendix A LSL LISTING OF CURRENT GOVERNMENT AUDIT CLIENTS Agoura Hills Ms. M. Bradsly, Finance Manager F 1 818-597-7300 • Azusa Mr. S. Paragas, Finance Director F ,S 18 626-812-5291 Banning Ms. M. Green, Accounting Manager FL 16 951-922-3118 Bell Ms. Shall Lin, Interim Finance Director F 3 323-588-6211 Big Bear Lake Ms. K. Ent, Director of Admin. Services F, S 17 909-866-5831 ' Brea Mr. L. Squire, Financial Services Manager F, S 3 714-990-7683 Burbank Ms. Cindy L Giraldo, Financial Services Dir I 4 818-238-5487 Canyon Lake Mr. T. Shea, Finance Director F 19 909-244-2955 • Cathedral City Mr. K Biersack, Fiscal Officer F,S 5 760-770-0378 ' Chino Hills Ms. J. Lancaster Finance Director F, S 17 909-364-2600 - Chula Vista Mr. P. Davis, Assistance Fiance Director F,S 2 619-691-5250 • Claremont Mr. A. Pirrie, Acting Finance Director F, S 10 909-399-5460 Coachella Valley Association of Governments Mr. G. Leong, Director of Administrtive Services F 1 760-346-1127 ' Coachella Valley Water District Ms. Kay Godbey, Finance Director F, S 2 760-398-2661 ' Corona Ms. Kerry Eden, Finance Director F, S 4 951-736-2315 Coronado Ms. L. Suelter, Finance Director F, S 8 619-522-7300 • Cucamonga Valley Water District Mr. Chad Brantley, Finance Officer F,S 3 909-483-7453 • Diamond Bar Ms. Dianna Honeywell, Finance Director F, S 4 909-839-7051 Dixon Ms. J. Michaels -Aguilar, Finance Director F,S 1 707-678-7000 x108 ' Downey Ms. M. Lee, Finance Manager F,S 2 562-904-7262 Duarte Ms. IC Petersen, Finance Director F 8 626-357-7931 • Emeryville Ms. M. Oberg, Finance Director F, S 11 510-596-4352 ' Escondido Ms. J. Ryan, Asst Finance Director F, S 5 760-839-4338 • Fullerton Ms. J. James, Director of Admin. Services F, S 3 714-738-6522 • Glendora Ms. E. Stoddard, Accounting Manager F, S 11 626-914-8238 Grand Terrace Ms. C. Fortune, Finance Director F 2 909-824-6621 Greater Los Angeles Vector Control Mr. K Bayless, District Manager F 5 562-758-6501 Hidden Hills Ms. C. Paella, Cry Clerk F 29 818-888-9281 Imperial Beach Mr. M. McGrane, Finance Director F 11 619-628-1361 • Indian Wells Mr. K. McCarthy, Finance Director F, S 3 760-346-2489 ' Irvine Ms. D. Mullaly, Manager of Fiscal Services F, S 4 949-724-6037 ' Irwindale Ms. E. Carreon, Finance Director F 19 626-430-2221 ' La Mirada Ms. M. Pasqua!, Finance Manager F, S 11 562-943-0131 • La Quinta Ms. R. Conrad, Finance Director F, S 8 760.777-7150 ' Laguna Niguel Mr. S. Ertandson, Finance Director F, S 4 949-362-4358 Lawndale Mr. K. Louie, Director of Finance/City Treasurer F 1 310-973-3246 ' Los Alamitos Mr. J. AI -Imam, Administrative Director/Treasurer F 1 562-431-3538 x222 • Malibu Ms. R. Feldman, Finance Director F 11 310-456-2489 • Manhattan Beach Mr. B. Moe, Finance Director F 12 310-802-5553 - Monrovia Mr. M. Alvarado, Director of Admin. Services F, S 14 626-932-5510 Monterey Regional Water Pollution Control Agency Ms. T. Hannah, Chief Financial Officer F 1 831-645-4623 ' Oceanside Ms. T. Ferro, Finance Director F, S 2 760-435-3839 • Ontario Ms. D. Nunes, Director of Fiscal Services F, S 18 909-395-2352 ' Orange Mr. W. Kolbow, Finance Director F, S 4 714-744-2235 Orange County Fire Authority Mr. Jim Roane, Finance Manager F,S 4 714-573-6304 Orange County Sanitation District Mr. L. Tyler, Director of Finance I 3 714-593-7550 ' Orange County Water District Mr. R. Fick, Chief Financial Officer F, S 3 714-378-3271 • Palm Springs Mr. G. Kiehl, Finance Director F, S 5 760-323-8229 • Palos Verdes Estates Mr. R. Morrealle, Finance Director F 4 310-378-0383 • Pasadena Mr. R. Ridley Controller F, S 1 626-744-7497 ' Pomona Ms. P. Chamberlain, Finance Director F, S 3 909-620-2355 ' Rancho Cucamonga Ms. T. Layne, Finance Officer F, S 37 909-989-1851 • Redlands Ms. T. Kundiq, Director of Finance F,S 5 909-798-7543 Rolling Hills Mr. T. Shea, Finance Director F 6 310-377-1521 San Carlos Ms. R. Mendenhall, Acfing Admin Svcs Dir F,S 4 650-802-4221 ' San Diego County Water Authority Ms. L. Wade Controller I 9 858-522-6600 San Dimas Ms. 8. Bishop, Finance Director F, S 54 909-384-6200 San Marino Ms. L. Bailey, Finance Director F 22 626-300-0700 ' Santa Barbara Mr. B. Samaria Finance Director F,S 4 805-897-1978 ' Santa Cna Mr. M. Pirnentel, Director of Finance F, S 3 831-420-5050 Santa Fe Springs Mr. J Gomez, Director of Finance and Adninistrative Services F,S 2 562-868-0511 ' Seal Beach Ms. V. Beatley Finance Director F, S 4 562-431-2527 Six Basins Mr. L. Stahlhoefer, Controller F 3 949-420-3030 Solona Beach Ms. M. Berkuti Finance Manager F 5 858-720-2463 11 A-29 Appendix A LSL LISTING OF CURRENT GOVERNMENT AUDIT CLIENTS twr,W�5.9 ,-�„Clionths? �<�* .?T�+•Ea? kV.',./., � -dim-S'4.' T:y i� :.'i Servita � y 5 ,_�� Mi a>E+.ContactPersonveNIl vFC*..� iCoda.. i-� gYoae+ds?Qtrete. hone tt'i • South Gate Ms. J. Acosta, Finance Director FS 6 323-563-9524 • South Pasadena Mr. D. Batt, Acting Finance Director F 12 626-403-7250 ' Thousand Oaks Mr. J. Adams, Finance Director F, S 7 805-449-2235 • Three Valleys Water District Mr. R. Hansen, General Manager F 7 909-626-4631 ' Vista Mr. D. Nielsen, Finance Manager F 6 760-639-6170 x1023: ' Walnut Ms. Marie Santos, Finance Manager F 43 909-595-7543 ' Wildomar Mr. G. Nordquist, Finance Director F 6 951-677-7751 Service Codes: F - Financial Audit S - Single Audit . I - Internal Audit • - Paticipated in the GFOA Award Programs and has received or anticipates receiving outstanding awards 12 A-30 R.H. JOHNSTON ACCOUNTANCY INC. A Professional Corporation 21300 Victory Boulevard, Suite 750 Woodland Hills, California 91367 (818) 346-9800 Fax (818) 346-0609 System Review Report November 13, 2013 To the Partners of Lance, Soll & Lunghard, LLP and the Peer Review Committee of the California Society of CPAs Appendix B We have reviewed the system of quality control for the accounting and auditing practice of Lance, Soll & Lunghard, LLP (the firm) in effect for the year ended May 31, 2013. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants. As part of our peer review, we considered reviews by regulatory entities, if applicable, in determining the nature and extent of our procedures. The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in altmaterial respects. Our responsibility is to express an opinion on the design of the system of quality control and the firm's compliance therewith based on our review. The nature, objectives, scope, limitations of, and the procedures performed in a System Review are described in the standards at www,a icpa. orgiprsum nary. As required by the standards, engagements selected for review included engagements performed under Government Auditing Standards, and an audit of employee benefit plan. In our opinion, the system of quality control for the accounting and auditing practice of Lance, Soll & Lunghard, LLP in effect for the year ended May 31, 2013, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating ofpass, pass with deficiency(ies) or fail. Lance, Soll & Lunghard, LLP has received a peer review rating ofpass. 13 A-31 Appendix C BRYAN S. GRUBER, CPA PARTNER Education: Bachelor of Arts Degree in Business Administration with an emphasis in Accounting — California State University, Fullerton 2004 License: Certified Public Accountant — California 2008 Continuing Education: Total hours were 132 in last three years of which 74 were in governmental accounting and auditing subjects. Mr. Gruber has met the Governmental Auditing Standards requirement for governmental CPE. Memberships: California Society of Certified Public Accountants American Institute of Certified Public Accountants Government Finance Officers Association California Society of Municipal Finance Officers Association of Local Government Auditors Experience: Over twelve years of experience in governmental audits including CAFR audits and Single Audits. He has also made numerous presentations to City Councils, Boards of Directors and Audit Committees. He has been involved in the following governmental engagements: Mr. Gruber has also been involved in the following engagements: Orange County Water District Monterey Water Pollution Control City of Palm Springs Six Basins Watermaster Three Valleys Municipal Water City of Burbank San Diego County Water City of Oceanside City of Solana Beach City of Santa Cruz City of Vista City of San Carlos • This work entailed the preparation of the Comprehensive Annual Financial Report for those entities involved in the award program for the Government Finance Officers Association of the United States and Canada. 14 LSL' A-32 Appendix C Bryan S. Gruber, CPA, Partner (Continued) • Review the audit of these entities and provide technical assistance throughout the year to provide the most up to date information with current GASB pronouncement. • Present the overall audit results to audit committees or other Board Members. Achievements: Mr. Gruber has been involved with teaching current audit and accounting related material at Lance, Soli & Lunghard, LLP's in house training seminars. He has made numerous presentations at local chapter meetings for CSMFO on current accounting and auditing material. He also currently serves as a technical reviewer for the Government Finance Officers Association (GFOA). Serves as firm IT Specialist for his involvement in IT related controls, data mining and analysis, and auditing software. LSL :: 15 0 A-33 Appendix C DEBORAH A. HARPER, CPA CONCURRING PARTNER Education: Bachelor of Arts Degree in Business Administration with an emphasis in Accounting - California State University, Fullerton 2000 License: Certified Public Accountant — California 2005 Continuing Education: Total hours were 264 in last three years of which 206 were in governmental accounting and auditing subjects. Ms. Harper has met the Governmental Auditing Standards requirement for governmental CPE. Memberships: California Society of Certified Public Accountants — Member since 2000 American Institute of Certified Public Accountants - Member Since 2005 California Society of Municipal Finance Officers — Associate Member since 2005 Government Finance Officers Association — Associate Member since 2005 Governmental Accounting and Auditing Committee — Member since 2011 AICPA Government Audit Quality Center — Member since 2011 Experience: Fifteen years of experience in governmental audits. During her time with the firm, Ms. Harper has performed all phases of our government audits and made numerous presentations to Boards of Directors and Audit Committees. She has been involved on the following similar engagements: City of Orange City of Brea City of Chino Hills City of Irvine City of Corona City of Laguna Niguel City of Monrovia City of Aliso Viejo City of Seal Beach Cucamonga Valley Water District City of Claremont City of Placentia City of Pasadena City of Glendora City of Fullerton City of Diamond Bar City of Banning City of Thousand Oaks Coachella Valley Water District San Diego County Water Authority 16 A-34 LSLr __ Appendix C Deborah A Harper, CPA Partner (Continued) • This work entailed the preparation of the Comprehensive Annual Financial Report for those entities involved in the award programs of the California Society of Municipal Finance Officers and the Government Finance Officers Association of the United States and Canada. • Review the audit of these entities and provide technical assistance throughout the year to provide the most up to date information with current GASB pronouncement. • Present the overall audit results to audit committees or other Board Members. • Provide training, resources, and support to financial officers. Achievements: Ms. Harper has developed and conducts various Lance, Soli & Lunghard, LLP governmental training courses for new associates and members of the firm. Ms. Harper was accepted as a 2015 and 2016 executive committee member of the AICPA Government Audit Quality_Center, which is a national division for governments. As an executive board member, Ms. Harper will participate in the development, review, and first hand discussion for updates of new standards and guidance published in the AICPA Audit Guides provided to audit firms all across the country. 17 A-35 Appendix C MARIA-LUISA VALDEZ, CPA AUDIT MANAGER Experience: Education: Bachelor of Science Degree in Accountancy, Minor in Applied Mathematics — Loyola Marymount University, Los Angeles License: Certified Public Accountant — California 2009 Continuing Total hours were 160 in last four years of which Education: 100 were in governmental accounting and Yellow Book auditing subjects. Ms. Valdez has met the Governmental Auditing Standards requirement for governmental CPE. Memberships: California Society of Certified Public Accountants American Institute of Certified Public Accountants Over nine years of experience in governmental audits. Ms. Valdez has established herself as an outstanding asset and resource at LSL. She has demonstrated her talent in the area of municipal accounting and auditing. During her time with the firm, Ms. Valdez has performed all phases of our municipal audits, including CAFR audits, redevelopment agency audits and Single Audits. She has been involved in the following municipal engagements: City of Whittier Ms. Valdez served as the audit lead for the City of Whittier. As the audit lead, it has been Ms. Valdez s responsibility to supervise all areas of the financial audit, which includes both the basic financial statements (CAFR) and Single Audit. City of Malibu Ms. Valdez serves as the Audit Manager for the City of Malibu in the current year. As the Audit Manager, it has been Ms. Valdez s responsibility to oversee the fieldwork for all areas of the Financial Audit and the Single Audit in accordance with A-133. The City of Malibu receives the GFOA Award for Excellence in Financial Reporting each year. LSL:: 18 A-36 @ Appendix C Maria-Luisa Valdez, CPA, Audit Manager (Continued) Ms. Valdez has also served the following engagements: County of San Bernardino County of San Diego County of Los Angeles City of Agoura Hills City of San Buenaventura City of Santa Ana California Prison Authority Ventura County Air Pollution Control District California State University System Henry Mayo Newhall Memorial Hospital California State Auditor — Bureau of State Audits City of La Habra County of Ventura City of Oceanside City of Barstow City of Garden Grove City of Compton First 5 Los Angeles City of Vernon City of Whittier City of Covina City of Rialto L L•~• I. 4 19 A-37 Appendix C JOCELYN ESPARZA AUDITOR IN -CHARGE Experience: Education: Bachelor of Arts Degree in Business Administration, Concentrations in Accounting & Information Systems — California State University, Fullerton, 2013 License: Certified Public Accountant — In Process Continuing Education: Total hours were 125 in last three years of which 74 were in governmental accounting and auditing subjects. Ms. Esparza has met the Governmental Auditing Standards requirement for governmental CPE. Ms. Esparza has progressed in an outstanding manner. During her time with the firm, Ms. Esparza has performed all phases of our government audits, including water districts, other special districts, CAFR audits, successor agency audits and Single Audits. She has been involved in the following municipal engagements: City of Irvine City of Irwindale City of Cathedral City City of Diamond Bar City of Azusa City of Moreno Valley City of Pomona City of Fullerton City of Duarte City of Thousand Oaks City of Chino Hills City of South Pasadena LSL :: 20 A-38 CITY OF ROLLING HILLS AGREEMENT FOR SERVICES Exhibit B PAYMENT FOR SERVICES All fees shall be based on an hourly rate specified below with a not -to -exceed maximum as indicated: (a) The maximum fee for these services shall be as follows: For the fiscal years 2015/2016, 2016/2017 and 2017/2018 (payable in installments upon presentation of interim and final reports): Service 2015/16 2016/17 2017/18 City Audit and Related Reports $15,200 $15,200 $15,200 GANN Limit Review Report $540 $540 $540 Single Audit and Related Reports Included Included Included State Controller Report Preparation $1,040 $1,040 $1,040 Total for Fiscal Year (not -to -exceed) $16,780 $16,780 $16,780 (b) The fees due there under shall be paid in installments during each fiscal year as work is done, with the remaining balance due upon submission of the final reports. (c) Hourly Rates: The hourly rates to be used will as follows: Position 2015/16 2016/17 2017/18 Partner $235 $235 $235 Manager $140 $140 $140 Senior Accountant $115 $115 $115 Staff Accountant $100 $100 $100 Clerical Included Included Included Should extra work be required that are considered beyond the scope of the financial audit, it is agreed that such extended service shall be billed at the above rates. THIS PAGE INTENTIONALLY LEFT BLANK B-2 CITY OF ROLLING HILLS AGREEMENT FOR SERVICES COST PROPOSAL B-3 LSLr:: CITY OF ROLLING HILLS PROPOSAL TO PROVIDE PROFESSIONAL INDEPENDENT AUDITING SERVICES COST PROPOSAL WWW.LSLCPAS.COM 714-6/7--0022 B-4 ATTACHMENT A AUDIT WORK COST PROPOSAL FORM Service 2015-16 2016-17 2017 -IS 2018-19 2019-20 City Audit and Related Reports $15,200 $15,200 $15,200 $15,500 $15,500 GANN Limit Review Report 540 540 540 550 550 State Controller's Report preparation 1,040 1,040 1,040 1,070 1,070 Total(nottoexceed) $16,780 $16,780 $16,780 $17,120 $17,120 Page 110 B-5 APPENDIX B ESTIMATE OF COST LSL CPAs Name of Firm: Address: 203 N. Brea Blvd. Suite 203 Brea, CA 92821 Contact Name: Bryan Gruber Contact Phone #: 714-672-0022 Fax#: 714-672-0331 Contact Email: bryan.gruber@lslcpas.com I. Auditor's Standard Billing Rates POSITION 2015/16 2016/17 2017/18 Partner $235 $235 $235 Manager $140 $140 $140 Senior Accountant $115 $115 $115 Staff Accountant $100 $100 $100 Clerical included included included Page I 1 1 B-6 CITY OF ROLLING HILLS AGREEMENT FOR SERVICES Exhibit C Certificate of Exemption from Workers' Compensation Insurance TO: City of Rolling Hills SUBJECT.: Sole Proprietor/Partnership/Closely Held Corporation with No Employees Please let this memorandum notify the City of Rolling Hills that I am a ❑ sole proprietor ❑ partnership ❑ closely held corporation and do not have any employees whose employment requires me to carry workers' compensation insurance. Therefore, I do not carry worker's compensation insurance coverage. Contractor Signature Printed Name of Contractor Date c-i 8(4 el Redeat9 qeek INCORPORATED JANUARY 24, 1957 NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 FAX (310)377-7288 Agenda Item No: 8-B Mtg. Date: 06/27/16 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: RAYMOND R. CRUZ, CITY MANAGER il- " SUBJECT: CONSIDERATION OF AMENDMENTS TO THE FY 2016-17 BUDGET CONCERNING CITY COUNCIL TRAVEL AND SUPPLEMENTAL TRAFFIC ENFORCEMENT. 1 DATE: June 27, 2016 ATTACHMENTS: Historical Fiscal Year Budgets for Supplemental Traffic Enforcement Historical Fiscal Year Budgets for City Council Travel Expenses RECOMMENDATION Consider possible amendments to the FY 2016-17 budget concerning City Council travel and supplemental traffic enforcement. BACKGROUND During the City Council deliberations concerning the FY 2016-17 budget on June 13, 2016, there were two requests to amend the proposed budget in the areas of City Council travel and supplemental traffic enforcement. Although the City Council approved the proposed FY 16/17 budget entirely, it was agreed to bring the two budgetary items back for further discussion at its June 27, 2016 meeting. The City Council asked staff to bring back the item with the historical budgets of both these budget line items to assist with its analysis and decision. This information is enclosed in two attachments. DISCUSSION The City Council during the fall of 2015 directed the Finance/Budget/Audit Committee to look more closely at the budget policies concerning City Council travel and determine if any changes should be made for FY 16/17. The Commttee did do that and recommended capping the travel related costs at $4,000 per elected official. Recognizing that only one Councilmember expressed the intent to incur any travel related expenses in FY 16/17, the Committee recommended budgeting $6,000 in the City Council travel account line item for FY 16/17 to accommodate the travel request received and allow for other travel related expenses. With regard to the supplemental traffic enforcement budget, the number of hours was reduced from 350 hours to 175 hours in FY 15/16. This decision was made partly due to the Sheriff's Regional Law Contract formula being amended in FY 14/15 and now provided a similar number of hours for general patrol traffic enforcement. Although the Budget Committee again recommended the same 175 hours for supplemental traffic enforcement that was approved in the FY 16/17 budget, the Traffic Commission at their May 2016 meeting recommended it be increased back to 350 hours. The Commission believes that these additional hours are necessary to assist with excessive speed and other traffic law violations that still are problematic on the City's roadways. FISCAL IMPACT If the City Council considers approving any amendments that increases the FY 2016/17 budget, the budget can remain balanced by taking it from the $88,807 budget surplus, by reducing an existing budget line item(s) in the same amount, or a combination of the two. RRC:hl FY 16-17 Budget Amendments-staffrepon.docr r CITY OF ROLLING HILLS COPS FUND - TRAFFIC ENFORCEMENT HISTORICAL ACTUAL - FY 2012/13 TO FY 2014-15 CURRENT TREND FY 2015/16 ADOPTED BUDGET FY 2016/17 ADOPTED HISTORICAL ACTUAL BUDGETED BUDGET FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17 $ 22,907 (A) $ 22,952 (A) $ 11,256 (B) $ 14,100 (C) $ 15,500 (C) (A) - NOTE - SUPPLEMENTAL TRAFFIC ENFORCEMENT BUDGET 350 HOURS (B) - NOTE -TRANSITION YEAR FROM SUPPLEMENTAL TRAFFIC ENFORCEMENT (152 HOURS) TO MORE GENERAL PATROL TRAFFIC ENFORCEMENT HOURS (250 HOURS) DUE TO A CHANGE IN THE REGIONAL LAW CONTRACT FUNDING FORMULA (C) - NOTE - SUPPLEMENTAL TRAFFIC ENFORCEMENT BUDGET 175 HOURS COPS FUND - TRAFFIC ENFORCEMENT.xlsx 6/24/16 9:33 AM CITY OF ROLLING HILLS CITY COUNCIL EXPENSE HISTORICAL ACTUAL - FY 2012/13 TO FY 2014-15 CURRENT TREND FY 2015/16 ADOPTED BUDGET FY 2016/17 ADOPTED HISTORICAL ACTUAL BUDGETED BUDGET FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17 $ 869 $ 35 $ 4,658 $ 8,925 (A) $ 6,000 (A) - NOTE - CURRENT FY 15/16 ACTUAL ACCOUNT EXPENSE IS $5,586. CITY COUNCIL EXPENSE.xlsx 6/21/16 2:13 PM