CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Approve the award of Single Source Procurement 26-266, Government Accounting Services, to Lauterbach & Amen, LLP for an amount not to exceed $331,440 and for a three-year term
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DEPARTMENT: Finance Department
SUBMITTED BY: Traci Marrocco, Interim Finance Director
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
Since 2016, the Finance Department has contracted with Lauterbach & Amen LLP (Lauterbach) for accounting, audit preparation and/or payroll support services. The purpose of the contract is to continue to supplement the City’s resources and knowledge in government accounting and audit preparation.
In December 2023, the City Council awarded sole source Contract 23-301, to Lauterbach for a three-year term from January 1, 2024, through December 31, 2026, to ensure continued support for accounting and auditing functions.
DISCUSSION:
Supplementing the City’s internal accounting staff with outside resources has worked well. It has provided the City with additional staffing and specialized knowledge in key areas of government accounting. The services provided under this arrangement are essential to the daily accounting work that leads to a successful year-end audit. The supplemental work must be performed by someone well-versed in government accounting and auditing.
Staff is aware of only two firms capable of meeting the City’s needs in the government accounting sector, Lauterbach and Amen and Sikich. Sikich currently serves as the City’s independent auditor, thus creating a potential conflict if they were to provide contract accounting services.
Lauterbach is familiar with the City’s financial policies and procedures, account structure and financial software systems. If the Single Source contract is not awarded, the City would either need to expand its search for qualified government accounting firms outside the local region or increase staff to support the internal accounting function. Additionally, Lauterbach currently maintains the City’s fixed asset accounting in their software system. Changing vendors would require implementing fixed asset recordkeeping, which we the City is not prepared to do.
In FY 2022 and FY 2023, respectively, new requirements established by the Governmental Accounting Standards Board (GASB) increased the time and resources necessary to prepare for the City's annual audit. Specifically, GASB Statements 87 (Leases) and 96 (Subscription-Based Information Technology Arrangements) require these items to be recognized as long-term assets and liabilities on the City's financial statements. Implementing and maintaining compliance with these standards has significantly increased the workload and technical demands on the City's accounting staff.
Lauterbach has provided valuable subject matter expertise throughout the implementation of these standards and continues to provide ongoing technical support. With additional GASB standards and capital asset accounting improvements anticipated in the coming years, staff expects the need for specialized accounting support to continue.
Lauterbach has consistently met the City's expectations and provided the expertise necessary to support these increasingly complex accounting requirements. Accordingly, staff recommends maintaining the relationship with Lauterbach through 2029 to ensure continuity of support and assist with upcoming accounting and reporting requirements.
This Single Source is requested for a three-year term from January 1, 2027, to December 31, 2029, to continue utilizing Lauterbach’s contract accounting services. Lauterbach requested a very nominal increase for 2027, and a reasonable 3% annual increase over the last two years of the contract.
FISCAL IMPACT:
CIP #: N/A
Government accounting services are expenses to the Financial Services accounts listed below. Finance included $115,507 in the proposed 2027 budget for government accounting services; the award requested is within the proposed budget amount for this expense in 2027. Staff will ensure sufficient funds are included in future budgets to support the out years associated with this award.
|
Account Number |
Fund Description |
Total Proposed Budget Amount |
|
15101100-531304 |
General Fund |
$241,397 |
|
15101300-531304 |
Electric Utility Fund |
$66,846 |
|
15101500-531304 |
Water Utilities Fund |
$86,739 |