08-07-2015 BPU RPT 10 - Laserfiche WebLink

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r i RIVERSIDE PUBLIC UTILITIES P U B L I C U T I L I T I E S Board Memorandum BOARD OF PUBLIC UTILITIES DATE: AUGUST 7, 2015 ITEM NO: 10 File ID — 15 -2594 — C SUBJECT: AGREEMENT FOR PROFESSIONAL CONSULTANT SERVICES FOR AN EXAMINATION AND PERFORMANCE AUDIT FOR $58,335 ISSUE: The issue for Board of Public Utilities consideration is approval of the agreement for an examination of the Northside Property transactions and a performance audit regarding fiscal policies and review of the City's departmental cost allocation model charged to the Electric and Water Funds. RECOMMENDATION: That the Board of Public Utilities approve a Professional Services Agreement with Baker Tilly Virchow Krause, LLP., of Madison, Wisconsin, in an amount of $58,335 for the purpose of conducting an examination and performance audit for Riverside Public Utilities. BACKGROUND: The week of May 11, 2015, staff issued Request for Proposals (RFP) to audit firms with experience in performing special examinations or audits with a specific scope for a municipal public utility. The scope of the examination and audit would focus on three areas: Examination of Northside property transactions; Performance audit regarding RPU's fiscal policies; and Review of the City's departmental cost allocation model charged to the Electric and Water Funds. Three proposals were received from the following audit firms: Baker Tilly Virchow Krause (Baker Tilly), LLP, Madison, WI Macias Gini & O'Connell (MGO), LLP, Los Angeles, CA Moss Adams, LLP, Portland, OR City and RPU staff reviewed all proposals based on the criterion described in the RFP and recommended interviewing all three firms. Following the interview process, the review committee evaluated the responses to the interview questions, quality of the proposal and pricing. Based on the final scores, the review committee recommends Baker Tilly to perform the examination and performance audit. Baker Tilly scored very high in industry experience and industry leadership. In addition, their hourly rates were the lowest of the three firms. The committee also appreciated that Baker Tilly had no prior ties to the City or RPU, which would allow for a fresh view in performing their examination and performance audit. Baker Tilly has extensive experience with public utility and public sector clients. Baker Tilly's clients include Sacramento Municipal Utility District, Burbank Water and Power, Roseville, CA Electric Department, Colorado Springs Utilities and Seattle City Light among many other quality agencies. The Partner in Charge and other staff regularly provide seminars and webinars for public sector and utility organizations such as American Public Power Association.