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W n I E R E N E R L Y I I F F RIVERSIDE PUBLIC UTILITIES W& Board Memorandum P U B L I C U T I L I T I E S BOARD OF PUBLIC UTILITIES DATE: JANUARY 22, 2016 ITEM NO: 6 File ID — 16 -0191 — C SUBJECT: FIRST AMENDMENT TO THE AGREEMENT FOR PROFESSIONAL CONSULTANT SERVICES FOR AN EXAMINATION AND PERFORMANCE AUDIT ISSUE: The item for Board of Public Utilities consideration is approval of a First Amendment to the Professional Services Agreement (Agreement) with Baker Tilly Virchow Krause, LLP 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, extending the term of the Agreement to May 31, 2016. RECOMMENDATION: That the Board of Public Utilities approve the First Amendment to the Professional Service Agreement with Baker Tilly Virchow Krause, LLP for the performance audit to extend the term through May 31, 2016. BACKGROUND: On August 7, 2015, the Board of Public Utilities (Board) approved the Agreement with Baker Tilly Virchow Krause, LLP. (Baker Tilly), for the purpose of conducting an examination and performance audit for Riverside Public Utilities. The scope of the examination focuses on three areas: • Project 1 — Examination of Northside property transactions; • Project 2 — Performance audit regarding RPU's fiscal policies; and • Project 3 — Review of the City's departmental cost allocation model charged to the Electric and Water Funds. The work for the three projects is a coordinated effort between RPU Finance and City Finance divisions. The projects were originally projected to be completed by November 15, 2015. With other competing finance initiatives and deadlines, both with City and RPU Finance division staff, the projects have taken longer than planned. In addition, the new sunshine ordinance was implemented after approval of this contract which has also presented scheduling conflicts. All three projects are underway and are making progress. Current tentative presentation dates to the Board are February 5, 2016 for Project 1 and March 28, 2016 for Projects 2 and 3. The Second Amendment to the Agreement with Baker Tilly will extend the contract through May 31, 2016 which will provide sufficient time to address any issues that may arise subsequent to presentations to the Board. FISCAL IMPACT: There is no fiscal impact associated with extending the term of the Agreement. Prepared by: Laura Chavez - Nomura, Public Utilities Assistant General Manager /Finance Approved by: Girish Balachandran, Public Utilities General Manager Approved by: John A. Russo, City Manager Approved as to form: Gary G. Guess, City Attorney Attachment: First Amendment to Professional Consultant Services Agreement — Baker Tilly Virchow Krause, LLP