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Contract - Diehl, Evans and Co. - 2010-07-30 Attachment 1 PROFESSIONAL SERVICES AGREEMENT FOR COSTA MESA SANITARY DISTRICT THIS AGREEMENT is made and entered into this 30th day of July 2010 by and between the COSTA MESA SANITARY DISTRICT a California Sanitary District, hereinafter referred to as 'DISTRICT' and Diehl, Evans and Company LLC hereinafter referred to as 'CONSULTANT' WITNESSETH WHEREAS, CONSULTANT is an independent contractor and DISTRICT desires to utilize the services of CONSULTANT to conduct annual audits for the DISTRICT NOW THEREFORE, the parties agree as follows: 1 Scope of the Work Audit services for the fiscal years ending June 30, 2010 2011 and 2012, with the option to extend the agreement for two additional one-year periods. Auditor will advise District staff on how to best implement both current and proposed GASB statements. In addition, auditor will provide ongoing, infrequent consulting services for financial issues that may occur throughout the year The audit examination should not include a detailed audit of all the transactions recorded in the accounts of the District, unless otherwise herein specified, but will be based upon tests of accounting records and other supporting evidence for selected periods during the fiscal year under review sufficient to enable the contracting independent auditor to express an informed written opinion on the financial statements of the District. The contracting independent auditor shall review the financial records and all the various funds of the District and prepare all the financial statements in conformance with generally accepted auditing standards as set forth by the American Institute of Certified Public Accountants, the standards for financial audits set forth in the U S Government Accountability Offices Government Auditing Standards (2007 revision). Following the completion of the audit of the fiscal years financial statements, the auditor shall issue: 1 A report on the fair presentation of the financial statements in conformity with generally accepted accounting principles. 2. A report in accordance with Statement on Auditing Standards (SAS) 115 identifying any significant deficiencies or material weaknesses. 1 3. Written communication in accordance SAS 114 addressed to the Board of Directors (Board). The District does not have an audit committee. The Board serves as those charged with governance. The auditor is expected to print and bind 30 copies of the financial statements. The auditor is expected to provide 30 stapled copies each of its SAS 115 and SAS 114 reports. In addition to the hard copies, the auditor is to provided an electronic copy in Adobe format, plus one unbound master of each deliverable. The District does plan to prepare a Comprehensive Annual Financial Report (CAFR) and submit it for award to CSMFO for the year ended June 30 2010 and to GFOA in subsequent years. The auditor will be required to assist the District in the preparation of an award-winning CAFR. All working papers and reports must be retained, at the auditor's expense, for a minimum of five (5) years, unless the firm is notified in writing by the District of the need to extend the retention period. The auditor will be required to make working papers available to the District, upon request. 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. 2. Reporting a. CONSULTANT shall report to Sherry Kallab, Administrative Manager and provide weekly updates on progress of assignments. 3. Compensation CONSULTANT fees for audit services to Diehl, Evans & Company LLP will be as follows: • FY 2009-10 $8 800 • FY 2010-11 $8,975 • FY 2011 12 $9 155 for a total of $26 930 for the three fiscal years. In addition, there will be no charge for infrequent consulting services for financial issues that may occur throughout the year CONSULTANT shall submit an invoice to the District for time worked. Invoices shall be paid with in 15 business days of receipt. 4 Insurance. Time for Compliance CONSULTANT shall not commence Work under this Agreement until it has provided evidence satisfactory to the District that it has secured all insurance required under this section. In addition, CONSULTANT shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to the District that the subcontractor has secured all insurance required under this section. Minimum Requirements CONSULTANT shall, at its expense procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or 2 damages to property which may arise from or in connection with the performance of the Agreement by the CONSULTANT its agents, representatives, employees or subcontractors. CONSULTANT shall also require all of its subcontractors to procure and maintain the same insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage: Minimum Scope of Insurance Coverage shall be at least as broad as the latest version of the following: (1) General Liability Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability. Insurance Services Office Business Auto Coverage form number CA 0001 code 1 (any auto); and (3) Workers Compensation and Employer's Liability. Workers Compensation insurance as required by the State of California and Employer's Liability Insurance Minimum Limits of Insurance CONSULTANT shall maintain limits no less than: (1) General Liability. $1 000 000 per occurrence for bodily injury personal injury and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability' $1 000 000 per accident for bodily injury and property damage, and (3) Workers Compensation and Employer's Liability' Workers Compensation limits as required by the Labor Code of the State of California. Employer's Liability limits of $1 000,000 per accident for bodily injury or disease. Insurance Endorsements The insurance policies shall contain the following provisions, or CONSULTANT shall provide endorsements on forms supplied or approved by the District to add the following provisions to the insurance policies: General Liability The general liability policy shall be endorsed to state that: (1) the District, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insured with respect to the Work or operations performed by or on behalf of the CONSULTANT including materials, parts or equipment furnished in connection with such work; and (2) the insurance coverage shall be primary insurance as respects the District, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the CONSULTANT's scheduled underlying coverage. Any insurance or self-insurance maintained by the District, its directors, officials, officers, employees, agents and volunteers shall be excess of the CONSULTANT's insurance and shall not be called upon to contribute with it in any way Automobile Liability CONSULTANT shall provide DISTRICT with proof of automobile insurance coverage. Workers Compensation and Employers Liability Coverage The insurer shall agree to waive all rights of subrogation against the District, its directors, officials, officers, employees, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the CONSULTANT All Coverage Each insurance policy required by this Agreement shall be endorsed to state that: (A) coverage shall not be suspended, voided, reduced or canceled except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the District; and (B) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the District, its 3 directors, officials, officers, employees, agents and volunteers. Separation of Insured; No Special Limitations All insurance required by this Section shall contain standard separation of insured provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the District, its directors, officials, officers, employees, agents and volunteers. Deductibles and Self-Insurance Retentions Any deductibles or self-insured retentions must be declared to and approved by the District. CONSULTANT shall guarantee that, at the option of the District, either (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the District, its directors, officials, officers, employees, agents and volunteers, or (2) the CONSULTANT shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses. Acceptability of Insurers Insurance is to be placed with insurers with a current A.M. Best's rating no less than A- VIII, licensed to do business in California, and satisfactory to the District. Verification of Coverage CONSULTANT shall furnish District with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the District. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf and shall be on forms provided by the District if requested. All certificates and endorsements must be received and approved by the District before work commences. The District reserves the right to require complete, certified copies of all required insurance policies, at any time. Modifications District agrees to allow CONSULTANT a deductible of$50 000 for the errors and omissions insurance. 5. Independent CONTRACTOR The parties agree that CONSULTANT is an independent contractor who is being paid to produce a result. CONSULTANT is in no way an employee of DISTRICT CONSULTANT controls the means of accomplishing the work. CONSULTANT shall pay all Federal and State payroll taxes for employees of CONSULTANT and said employees shall in no way be deemed or construed to be employees of DISTRICT for any purpose. 6. Term The period of performance begins July 30, 2010 through December 31 2013. 7 Assignment No assignment of this AGREEMENT may be made without the express written consent of DISTRICT 8. Termination Either party shall have the right to terminate this AGREEMENT at a date earlier than 4 specified in paragraph 6 without cause, by giving 10 days written notice. 9 Notice The parties may give notice under this AGREEMENT by sending such notice certified mail addressed as follows: TO DISTRICT COSTA MESA SANITARY DISTRICT 628 W 19`h Street Costa Mesa, CA 92627 ATTN: Joan Revak, Clerk of the District, CMSD TO CONSULTANT Diehl, Evans & Company LLP Certified Public Accountants and Consultants 5 Corporate Park, Suite 100 Irvine, CA 92606-5165 Attn: Nitin P Patel, Engagement Partner Such notice shall be deemed received five (5) days after mailing whether signed for or not. 10 Integration This AGREEMENT constitutes the entire AGREEMENT and understanding between the parties hereto, and it shall not be considered modified, altered, changed or amended in any respect unless in writing and signed by the parties hereto 11 No Waiver The failure of the DISTRICT at the time to require performance by the CONSULTANT of any provisions hereof shall in no way affect the right of the DISTRICT thereafter to enforce same. Nor shall waiver by the DISTRICT of any breach of any provisions hereof be taken or held to be a waiver of any succeeding breach of such provision or as a waiver of any provision itself. 12. Indemnity CONSULTANT agrees to indemnify defend and hold harmless the DISTRICT its officers, agents, employees and volunteers from any claims or liability arising out of the performance of this AGREEMENT save and except that caused by DISTRICT's sole active negligence. 13. Attorney's Fees The parties agree that should any dispute arise concerning the interpretation of this AGREEMENT or regarding the performance or non-performance of this AGREEMENT that the prevailing party shall be entitled to reasonable attorney's fees. 5 WITNESS WHEREOF the parties hereto have set their hands and seals the day and year first above written. COSTA MESA SANITARY DISTRICT By' L General Manager CONSULTANT gy. Rye-tin W, () t i n c1/0.1„1 I- CDn-(2o""� '1.+'P 6