16-138 Resolution No. 16-138
RESOLUTION
AUTHORIZING EXECUTION OF AN AGREEMENT
WITH SIKICH, LLP FOR AUDITING SERVICES
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS,
that Richard G. Kozal, City Manager, and Kimberly A. Dewis, City Clerk, be and are hereby
authorized and directed to execute an Agreement on behalf of the City of Elgin with Sikich, LLP
for auditing services, a copy of which is attached hereto and made a part hereof by reference.
s/David J. Kaptain
David J. Kaptain, Mayor
Presented: November 16, 2016
Adopted: November 16, 2016
Vote: Yeas: 7 Nays: 1
Attest:
s/Kimberly Dewis
Kimberly Dewis, City Clerk
AGREEMENT
THIS AGREEMENT is made and entered into this 16thday of November2016, by and
between the CITY OF ELGIN,an Illinois municipal corporation(hereinafter referred to as"CITY")
and SIKICH,LLP,an Illinois limited liability partnership, (hereinafter referred to as"AUDITOR").
WHEREAS, the CITY desires to engage the AUDITOR to furnish certain professional
services in relation to auditing services (hereinafter referred to as the"PROJECT"); and
WHEREAS,the AUDITOR represents that it is in compliance with Illinois Statutes relating
to professional registration of individuals and has the necessary expertise and experience to furnish
such services upon the terms and conditions set forth herein below.
NOW,THEREFORE,it is hereby agreed by and between the CITY and the AUDITOR that
the CITY does hereby retain the AUDITOR for and in consideration of the mutual promises and
covenants contained herein,the sufficiency of which is hereby acknowledged to perform the services
relating to the PROJECT as described herein, subject to the following terms and conditions and
stipulations, to-wit:
1. SCOPE OF SERVICES
A. All work hereunder shall be performed under the direction of the Chief Financial
Officer of the CITY, herein after referred to as the "DIRECTOR".
B. The Scope of Services provided by the AUDITOR to the CITY pursuant to this
Agreement is attached hereto and made a part hereof as Attachment A.
2. PROGRESS REPORTS
A. A project milestone schedule for the PROJECT shall be as determined by the
DIRECTOR.
B. Progress will be recorded on the project schedule and submitted monthly as a
component of the Status Report described in C below.
C. The AUDITOR will submit to the DIRECTOR monthly a status report keyed to the
project schedule.A brief narrative will be provided identifying progress,findings and
outstanding issues.
3. WORK PRODUCT
All work product prepared by the AUDITOR pursuant hereto including,but not limited to,
reports, designs, calculations, work drawings, studies, photographs, models and
recommendations shall be the property of the CITY and shall be delivered to the CITY upon
request of the DIRECTOR; provided,however, that(i)the AUDITOR's work papers shall
remain the sole property of the AUDITOR,and(ii)the AUDITOR may retain copies of such
work product for its records. AUDITOR'S execution of this Agreement shall constitute
AUDITOR'S conveyance and assignment of all right, title and interest, including but not
limited to any copyright interest, by the AUDITOR to the CITY of all such work product
prepared by the AUDITOR pursuant to this Agreement, excluding the AUDITOR's work
papers. The CITY shall have the right either on its own or through such other consultants as
determined by the CITY to utilize and/or amend such work product. Any such amendment to
such work product shall be at the sole risk of the CITY. Such work product is not intended
or represented to be suitable for reuse by the CITY on any extension to the PROJECT or on
any other project, and such reuse shall be at the sole risk of the CITY without liability or
legal exposure to the AUDITOR.
4. PAYMENTS TO THE AUDITOR
A. For services provided the AUDITOR shall be paid at the hourly billing rate of
personnel employed on the PROJECT,with the total fees not to exceed the amounts
as set forth in AUDITOR'S dollar cost proposal attached hereto as Attachment B and
listed below regardless of the actual costs incurred by the AUDITOR unless
substantial modifications in the scope of work are authorized in writing by the CITY
and approved by way of written amendment to this Agreement:
Fiscal Year Ending December 31, 2016: $74,199
Fiscal Year Ending December 31, 2017: $74,941
Fiscal Year Ending December 31, 2018: $76,440
Fiscal Year Ending December 31, 2019: $77,969
Fiscal Year Ending December 31, 2020: $80,308
B. The not-to-exceed fees listed above includes all reimbursable expenses.
C. The CITY shall make periodic payments to the AUDITOR based upon actual
progress within thirty(30) days after receipt and approval of invoice. Said periodic
payments to the AUDITOR shall not exceed the amounts shown in the following
schedule, and full payments for each task shall not be made until the task is
completed and accepted by the DIRECTOR.
5. INVOICES
A. The AUDITOR shall submit invoices in a format approved by the CITY. Progress
reports (2C above) will be included with all payment requests.
B. The AUDITOR shall maintain records showing actual time devoted and cost
incurred. The AUDITOR shall permit the authorized representative of the CITY to
inspect and audit all data and records of the AUDITOR for work done under this
Agreement. The AUDITOR shall make these records available at reasonable times
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during the Agreement period and for one (1) year after termination of this
Agreement.
6. TERMINATION OF AGREEMENT
Notwithstanding any other provision hereof,the CITY may terminate this Agreement at any
time upon fifteen (15) days prior written notice to the AUDITOR. In the event that this
Agreement is so terminated,the AUDITOR shall be paid for services actually performed and
reimbursable expenses actually incurred prior to termination,except that reimbursement shall
not exceed the task amounts set forth under Paragraph 4 above.
7. TERM
This Agreement shall become effective as of the date the AUDITOR is given a notice to
proceed and, unless terminated for cause or pursuant to Paragraph 6, shall be deemed
concluded on the date the CITY determines that all of the AUDITOR'S work under this
Agreement is completed. A determination of completion shall not constitute a waiver of any
rights or claims which the CITY may have or thereafter acquire with respect to any term or
provision of this Agreement.
8. NOTICE OF CLAIM
If the AUDITOR wishes to make a claim for additional compensation as a result of action
taken by the CITY, the AUDITOR shall give written notice of his claim within fifteen(15)
days after occurrence of such action. No claim for additional compensation shall be valid
unless so made. Any changes in the AUDITOR'S fee shall be valid only to the extent that
such changes are included in writing signed by the CITY and the AUDITOR. Regardless of
the decision of the DIRECTOR relative to a claim submitted by the AUDITOR, all work
required under this Agreement as determined by the DIRECTOR shall proceed without
interruption.
9. BREACH OF CONTRACT
If either party violates or breaches any term of this Agreement,such violation or breach shall
be deemed to constitute a default, and the other party has the right to seek such
administrative, contractual or legal remedies as may be suitable to the violation or breach;
and, in addition, if either party, by reason of any default, fails within fifteen(15) days after
notice thereof by the other party to comply with the conditions of the Agreement, the other
party may terminate this Agreement. Notwithstanding the foregoing,or anything else to the
contrary in this Agreement, with the sole exception of an action to recover the monies the
CITY has agreed to pay to the AUDITOR pursuant to Paragraph 4 hereof,no action shall be
commenced by the AUDITOR against the CITY for monetary damages. AUDITOR hereby
further waives any and all claims or rights to interest on money claimed to be due pursuant to
this Agreement, and waives any and all such rights to interest which it claims it may
otherwise be entitled pursuant to law, including, but not limited to, the Local Government
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Prompt Payment Act (50 ILCS 501/1, et seq.), as amended, or the Illinois Interest Act(815
ILCS 205/1, et seq.), as amended. The parties hereto further agree that any action by the
AUDITOR arising out of this Agreement must be filed within one year of the date the alleged
cause of action arose or the same will be time-barred.The provisions of this paragraph shall
survive any expiration, completion and/or termination of this Agreement.
10. INDEMNIFICATION
To the fullest extent permitted by law,AUDITOR agrees to and shall indemnify,defend and
hold harmless the CITY, its officers, employees, agents,boards and commissions from and
against any and all claims, suits,judgments, costs, attorneys fees, damages or other relief,
including,but not limited to,workers' compensation claims,resulting from or arising out of
negligent actions or omissions of the AUDITOR in connection herewith, including
negligence or omissions of employees or agents of the AUDITOR arising out of the
performance of this Agreement; provided, however, that the foregoing duty to indemnify,
defend and hold harmless shall not apply to any and all claims, suits, judgments, costs,
attorneys fees,damages or other relief,including,but not limited to,workers' compensation
claims, resulting from or arising out of negligent actions or omissions of the CITY, its
employees or agents. In the event of any action against the CITY, its officers, employees,
agents,boards or commissions,covered by the foregoing duty to indemnify,defend and hold
harmless such action shall be defended by legal counsel of the CITY's choosing. The
provisions of this paragraph shall survive any expiration, completion and/or termination of
this Agreement.
11. NO PERSONAL LIABILITY
No official, director, officer, agent or employee of the CITY shall be charged personally or
held contractually liable under any term or provision of this Agreement or because of their
execution, approval or attempted execution of this Agreement.
12. INSURANCE
A. Comprehensive Liability. The AUDITOR shall provide, pay for and maintain in
effect,during the term of this Agreement,a policy of comprehensive general liability
insurance with limits of at least $1,000,000 aggregate for bodily injury and
$1,000,000 aggregate for property damage.
The AUDITOR shall deliver to the DIRECTOR a Certificate of Insurance naming the
CITY as additional insured. The policy shall not be modified or terminated without
thirty(30) days prior written notice to the DIRECTOR.
The Certificate of Insurance shall include the contractual obligation assumed by the
AUDITOR under Paragraph 10 entitled"Indemnification".
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This insurance shall be primary and non-contributory to any other insurance or self-
insurance programs afforded to the CITY. There shall be no endorsement or
modification of this insurance to make it excess over other available insurance.
B. Comprehensive Automobile Liability. Comprehensive Automobile Liability
Insurance covering all owned,non-owned and hired motor vehicles with limits of not
less than $500,000 per occurrence for bodily injury and/or property damage.
C. Combined Single Limit Policy. The requirements for insurance coverage for the
general liability and auto exposures may be met with a combined single limit of
$1,000,000 per occurrence subject to a $1,000,000 aggregate.
D. Professional Liability. The AUDITOR shall carry AUDITOR's Professional
Liability Insurance covering claims resulting from error,omissions or negligent acts
with a combined single limit of not less than$1,000,000 per claim. A Certificate of
Insurance shall be submitted to the DIRECTOR as evidence of insurance protection.
The policy shall not be modified or terminated without thirty(30)days prior written
notice to the DIRECTOR.
13. INTENTIONALLY OMITTED
14. NONDISCRIMINATION
In all hiring or employment made possible or resulting from this Agreement,there shall be no
discrimination against any employee or applicant for employment because of sex,age,race,
color,creed,national origin,marital status,of the presence of any sensory,mental or physical
handicap, unless based upon a bona fide occupational qualification, and this requirement
shall apply to, but not be limited to, the following: employment advertising, layoff or
termination,rates of pay or other forms of compensation and selection for training,including
apprenticeship.
No person shall be denied or subjected to discrimination in receipt of the benefit of any
services or activities made possible by or resulting from this Agreement on the grounds of
sex,race, color, creed,national origin, age except minimum age and retirement provisions,
marital status or the presence of any sensory,mental or physical handicap. Any violation of
this provision shall be considered a violation of a material provision of this Agreement and
shall be grounds for cancellation, termination or suspension, in whole or in part, of the
Agreement by the CITY.
15. ASSIGNMENT AND SUCCESSORS
This Agreement and each and every portion thereof shall be binding upon the successors and
the assigns of the parties hereto; provided, however, that no assignment shall be made
without the prior written consent of the CITY.
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16. DELEGATIONS AND SUBCONTRACTORS
Any assignment,delegation or subcontracting shall be subject to all the terms,conditions and
other provisions of this Agreement and the AUDITOR shall remain liable to the CITY with
respect to each and every item, condition and other provision hereof to the same extent that
the AUDITOR would have been obligated if it had done the work itself and no assignment,
delegation or subcontract had been made. Any proposed subcontractor shall require the
CITY's advanced written approval.
17. NO CO-PARTNERSHIP OR AGENCY
This Agreement shall not be construed so as to create a partnership, joint venture,
employment or other agency relationship between the parties hereto.
18. SEVERABILITY
The parties intend and agreed that, if any paragraph, sub-paragraph,phrase, clause or other
provision of this Agreement, or any portion thereof, shall be held to be void or otherwise
unenforceable, all other portions of this Agreement shall remain in full force and effect.
19. HEADINGS
The headings of the several paragraphs of this Agreement are inserted only as a matter of
convenience and for reference and in no way are they intended to define,limit or describe the
scope of intent of any provision of this Agreement, nor shall they be construed to affect in
any manner the terms and provisions hereof or the interpretation or construction thereof.
20. MODIFICATION OR AMENDMENT
This Agreement and its attachments, along with the engagement letters between the parties
executed for each year of the PROJECT, constitutes the entire Agreement of the parties on
the subject matter hereof and may not be changed,modified,discharged or extended except
by written amendment duly executed by the parties. Each party agrees that no
representations or warranties shall be binding upon the other party unless expressed in
writing herein or in a duly executed amendment hereof, or change order as herein provided.
21. APPLICABLE LAW
This Agreement shall be deemed to have been made in,and shall be construed in accordance
with the laws of the State of Illinois. Venue for the resolution of any disputes or the
enforcement of any rights pursuant to this Agreement shall be in the Circuit Court of Kane
County, Illinois.
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22. NEWS RELEASES
The AUDITOR may not issue any news releases without prior approval from the
DIRECTOR,nor will the AUDITOR make public proposals developed under this Agreement
without prior written approval from the DIRECTOR prior to said documentation becoming
matters of public record.
23. COOPERATION WITH OTHER AUDITORS
The AUDITOR shall cooperate with any other consultants in the CITY's employ or any work
associated with the PROJECT.
24. INTERFERENCE WITH PUBLIC CONTRACTING
The AUDITOR certifies hereby that it is not barred from bidding on this contract as a result
of a violation of 720 ILCS 5/33E et seq. or any similar state or federal statute regarding bid
rigging.
25. SEXUAL HARASSMENT
As a condition of this contract,the AUDITOR shall have written sexual harassment policies
that include, at a minimum, the following information:
A. the illegality of sexual harassment;
B. the definition of sexual harassment under state law;
C. a description of sexual harassment, utilizing examples;
D. the vendor's internal complaint process including penalties;
E. the legal recourse,investigative and complaint process available through the Illinois
Department of Human Rights, and the Illinois Human Rights Commission;
F. directions on how to contact the department and commission;
G. protection against retaliation as provided by Section 6-101 of the Human Rights Act.
A copy of the policies shall be provided by AUDITOR to the Department of Human Rights
upon request 775 ILCS 5/2-105.
26. SUBSTANCE ABUSE PROGRAM.
As a condition of this agreement, AUDITOR shall have in place a written substance abuse
prevention program which meets or exceeds the program requirements in the Substance
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Abuse Prevention Public Works Project Act at 820 ILCS 265/1 et seq. A copy of such policy
shall be provided to the City's Assistant City Manager prior to the entry into and execution of
this agreement.
27. WRITTEN COMMUNICATIONS
All recommendations and other communications by the AUDITOR to the DIRECTOR and to
other participants which may affect cost or time of completion,shall be made or confirmed in
writing. The DIRECTOR may also require other recommendations and communications by
the AUDITOR be made or confirmed in writing.
28. NOTICES
All notices, reports and documents required under this Agreement shall be in writing and
shall be mailed by First Class Mail, postage prepaid, addressed as follows:
A. As to the CITY:
Debra Nawrocki
Chief Financial Officer
City of Elgin
150 Dexter Court
Elgin, Illinois 60120-5555
B. As to the AUDITOR:
Sikich, LLP
1415 W. Diehl Road, Suite 400
Naperville, Illinois 60563
Attention: James Savio, Partner
29. COMPLIANCE WITH LAWS
Notwithstanding any other provision of this AGREEMENT it is expressly agreed and
understood that in connection with the performance of this AGREEMENT that the
AUDITOR shall comply with all applicable federal,state,city and other requirements of law,
including, but not limited to, any applicable requirements regarding prevailing wages,
minimum wage, workplace safety and legal status of employees. Without limiting the
foregoing, AUDITOR hereby certifies, represents and warrants to the CITY that all
AUDITOR's employees and/or agents who will be providing products and/or services with
respect to this AGREEMENT shall be legal residents of the United States. AUDITOR shall
also at its expense secure all permits and licenses, pay all charges and fees and give all
notices necessary and incident to the due and lawful prosecution of the work, and/or the
products and/or services to be provided for in this AGREEMENT. The CITY shall have the
right, at its own expense,to audit any records in the possession or control of the AUDITOR
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to determine AUDITOR's compliance with the provisions of this paragraph. In the event the
CITY proceeds with such an audit the AUDITOR shall make available to the CITY the
AUDITOR's relevant records at no cost to the CITY.
IN WITNESS WHEREOF,the parties hereto have entered into and executed this agreement
effective as of the date and year first written above.
CITY OF t�217
By:
Richard G. Kozal, City Manager
Att est:
City Clerk
AUDITOR:
SIKICH, LLP Q �,
By: pt, �.
Name/Print: James R. Savio, CPA
Title: Partner
FALeeal DeptAgreementSikich-Auditor Agr-clean I 1-9-16-Sikich.docx
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Scope of Services for the City of Elgin
We will exceed your expectations by conducting and delivering on a high-quality engagement within your
required timeline all for a reasonable fee.
We are proposing to provide the following services to the City of Elgin as specified in the RFP:
> Audit of basic financial statements of the City of Elgin for the fiscal years ending December 31, 2016,
2017,2018,2019 and 2020.
> Preparation of two (2) final master copies of the comprehensive annual financial report (report covers,
dividers, introductory section, MD&A and certain statistical data to be provided by the City). We will provide
the City with fifty (50) copies of the independent auditor's report to be included in the report that will be
reproduced and assembled by the City and one electronic copy(PDF)of the CAFR;
> Preparation of ten (10) hard copies and an electronic copy (.pdf) of the management letter, communicating
any material weaknesses and significant deficiencies found during the audit and our recommendations for
improvement;
> Preparation of ten (10)hard copies and an electronic copy of the audit report on compliance with Public Act
85-1142(TIF)for the Bluff City Quarry, Central Area and Route 20 TIF Districts;
> Preparation of twenty-five(25)copies and an electronic copy of the Single Audit Report, if applicable;
> Assistance in completing and filing the required application and supporting documents to apply for the
Certificate of Achievement for Excellence in Financial Reporting;
> Retain workpapers for seven(7)years in accordance with firm standards;
> Reporting to the City Council in accordance with auditing standards; and
> Exit conference with City officials to present the completed audit and related materials.
Attachment A
SIKICH LLP
The fee for the financial audit, single audit of federal expenditures and preparation of the reports specified in our
proposal, including all direct and indirect costs,will not exceed$74,199 for the fiscal year ending December 31,2016.
James R. Savio,partner,certify that I am,as a partner of the firm Sikich LLP,entitled to represent the firm,empowered
to submit this proposal and authorized to sign a contract with the City of Elgin.
James R. Savio� 1` • Ud�''�'
Date November 11, 2016
Our goal in providing services is to develop long term relationships with our clients. Therefore, we agree to limit any
increases in audit fees for the financial audit for the four subsequent fiscal years to 1-3%per year, assuming that the
fund structure, accounting system and financial operations of and support by the City remain relatively constant. Our
"not to exceed"fees for the subsequent four fiscal years would be as follows:
December 31, 2017 $ 74,941
December 31,2018 76,440
December 31,2019 77,969
December 31, 2020 80,308
These fees assume that the City of Elgin will provide the auditors with electronic copies of adjusted trial balances by
individual funds, a year-to-date general ledger with details of postings to all accounts, subsidiary ledgers that agree or
are reconciled to the general ledger, and will prepare certain schedules of account analysis and confirmations of
account balances.
We invoice our clients on a monthly basis as services are provided. Payments for all services are due within 60 days
of receipt of an invoice.
Attachement B