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PSA with RSM US LLP & oIoL(3 PROFESSIONAL SERVICES AGREEMENT BETWEEN THE CITY OF MIAMI BEACH AND RSM US LLP FOR AUDITING SERVICES, PURSUANT TO RFP 2019-092-JC This Professional Services Agreement (Agreement) is entered into this CO day of June, Aq%u37 2019, between the CITY OF MIAMI BEACH, FLORIDA, a municipal corporation organized and existing under the laws of the State of Florida, having its principal offices at 1700 Convention Center Drive, Miami Beach, Florida, 33139(the"City"), and RSM US LLP, an Iowa limited liability partnership, registered to do business in Florida, whose local address is 801 Brickell Avenue, Suite 1050, Miami, FL, 33131 ("Contractor"). SECTION 1 DEFINITIONS Agreement: This Agreement between the City and Contractor, including any exhibits and amendments thereto. City Manager: The chief administrative officer of the City. City Manager's Designee: The City staff member who is designated by the City Manager to administer this Agreement on behalf of the City. The City Manager's designee shall be the Deputy Finance Director. Contractor: For the purposes of this Agreement, Contractor shall be deemed to be an independent contractor, and not an agent or employee of the City. Services: All services, work and actions by the Contractor performed or undertaken pursuant to the Agreement. Fee: Amount paid to the Contractor as compensation for Services. Proposal Documents: Proposal Documents shall mean City of Miami Beach RFP No. 2019-092-JC for AUDITING SERVICES, together with all amendments thereto, issued by the City in contemplation of this Agreement, RFP, and the Contractor's proposal in response thereto ("Proposal"), all of which are hereby incorporated and made a part hereof; provided, however, that in the event of an express conflict between the Proposal Documents and this Agreement, the following order of precedent shall prevail: this Agreement; the RFP; and the Proposal. 1 Risk Manager: The Risk Manager of the City, with offices at 1700 Convention Center Drive, Third Floor, Miami Beach, Florida 33139; telephone number (305) 673-7000, Ext. 6435; and fax number(305) 673-7023. SECTION 2 SCOPE OF SERVICES 2.1 In consideration of the Fee to be paid to Contractor by the City, Contractor shall provide the work and services described in Exhibit"A" hereto (the "Services"). Although Contractor may be provided with a schedule of the available hours to provide its Services,the City shall not control nor have the right to control the hours of the Services performed by the Contractor; where the Services are performed (although the City will provide Contractor with the appropriate location to perform the Services);when the Services are performed, including how many days a week the Services are performed; how the Services are performed, or any other aspect of the actual manner and means of accomplishing the Services provided. Notwithstanding the foregoing, all Services provided by the Contractor shall be performed in accordance with the terms and conditions set forth in Exhibit"A"and to the reasonable satisfaction of the City Manager. If there are any questions regarding the Services to be performed, Contractor should contact the following person: Finance Department City of Miami Beach 1700 Convention Center Drive Miami Beach, FL 33139 Attn: Allison Williams, Deputy Finance Director Email: AllisonWilliams@miamibeachfl.gov 2.2 Contractor's Services, and any deliverables incident thereto, shall be completed in accordance with the timeline and/or schedule in Exhibit A hereto. SECTION 3 TERM The term of this Agreement ("Term") shall commence upon execution of this Agreement by all parties hereto, and shall have an initial term of five (5)years, with three(3), one(1)year renewal options, to be exercised at the City Manager's sole option and discretion, by providing Contractor with written notice of same no less than thirty(30) days prior to the expiration of the initial term. Notwithstanding the Term provided herein, Contractor shall adhere to any specific timelines, schedules, dates, and/or performance milestones for completion and delivery of the Services, as same is/are set forth in the timeline and/or schedule referenced in Exhibit A hereto. 2 • SECTION 4 FEE 4.1 In consideration of the Services to be provided, Contractor shall be compensated on a fixed fee basis, in accordance with the auditing fees, as established in Exhibit B and attached hereto. 4.2 INVOICING Upon receipt of an acceptable and approved invoice, payment(s) shall be made within forty-five (45) days for that portion (or those portions) of the Services satisfactorily rendered (and referenced in the particular invoice). Invoices shall include a detailed description of the Services (or portions thereof) provided, and shall be submitted to the City at the following address: Accounts Payable Division Finance Department City of Miami Beach 1700 Convention Center Drive, 3rd Floor Miami Beach, FL 33139 payables@miamibeachfl.gov SECTION 5 TERMINATION 5.1 TERMINATION FOR CAUSE If the Contractor shall fail to fulfill in a timely manner, or otherwise violates, any of the covenants, agreements, or stipulations material to this Agreement, the City, through its City Manager, shall thereupon have the right to terminate this Agreement for cause. Prior to exercising its option to terminate for cause, the City shall notify the.Contractor in writing of its violation of the particular term(s) of this Agreement, and shall grant Contractor ten (10) days to cure such default. If such default remains uncured after ten(10)days, the City may terminate this Agreement without further notice to Contractor. Upon termination, the City shall be fully discharged from any and all liabilities, duties, and terms arising out of, or by virtue of, this Agreement. Contractor may terminate this Agreement upon reasonable written notice to the City where continued performance would be contrary to applicable law, rule, or regulation. Notwithstanding the above, the City reserves its right to seek any remedy available to it at law,or in equity. The City, at its sole option and discretion, shall be entitled to bring any and all legal/equitable actions that it deems to be in its best interest in order to enforce the City's rights and remedies against Contractor. The prevailing party in any such action shall be entitled to recover from the non-prevailing party all reasonable costs of such actions, including reasonable attorneys' fees. 3 5.2 TERMINATION FOR CONVENIENCE OF THE CITY THE CITY MAY ALSO, THROUGH ITS CITY MANAGER, AND FOR ITS CONVENIENCE AND WITHOUT CAUSE, TERMINATE THE AGREEMENT AT ANY TIME DURING THE TERM BY GIVING WRITTEN NOTICE TO CONTRACTOR OF SUCH TERMINATION; WHICH SHALL BECOME EFFECTIVE WITHIN THIRTY (30) DAYS FOLLOWING RECEIPT BY THE CONTRACTOR OF SUCH NOTICE. ADDITIONALLY, IN THE EVENT OF A PUBLIC HEALTH, WELFARE OR SAFETY CONCERN, AS DETERMINED BY THE CITY MANAGER, IN THE CITY MANAGER'S SOLE DISCRETION, THE CITY MANAGER, PURSUANT TO A VERBAL OR WRITTEN NOTIFICATION TO CONTRACTOR, MAY IMMEDIATELY SUSPEND THE SERVICES UNDER THIS AGREEMENT FOR A TIME CERTAIN, OR IN THE ALTERNATIVE, TERMINATE THIS AGREEMENT ON A GIVEN DATE. IF THE AGREEMENT IS TERMINATED FOR CONVENIENCE BY THE CITY, CONTRACTOR SHALL BE PAID FOR ANY SERVICES SATISFACTORILY PERFORMED UP TO THE DATE OF TERMINATION; FOLLOWING WHICH THE CITY SHALL BE DISCHARGED FROM ANY AND ALL LIABILITIES, DUTIES, AND TERMS ARISING OUT OF, OR BY VIRTUE OF, THIS AGREEMENT. 5.3 TERMINATION FOR INSOLVENCY The City also reserves the right to terminate the Agreement in the event the Contractor is placed either in voluntary or involuntary bankruptcy or makes an assignment for the benefit of creditors. In such event, the right and obligations for the parties shall be the same as provided for in Section 5.2. SECTION 6 INDEMNIFICATION AND INSURANCE REQUIREMENTS 6.1 INDEMNIFICATION Contractor agrees to indemnify and hold harmless the City of Miami Beach and its officers, employees, agents, and contractors, from and against any and all third party actions (whether at law or in equity), claims, liabilities, losses, and expenses, including, but not limited to, reasonable attorneys' fees and costs, for personal, economic or bodily injury, wrongful death, loss of or damage to property, which may arise or be alleged to have arisen from the negligent acts, errors, omissions or other wrongful conduct of the Contractor, its officers, employees, agents, contractors, or any other person or entity acting under Contractor's control or supervision, in connection with, related to, or as a result of the Contractor's performance of the Services pursuant to this Agreement. To that extent, the Contractor shall pay all such such sums arising from third party claims and losses and shall pay all such costs and judgments which may issue from any lawsuit arising from such claims and losses, and shall pay all costs and reasonable attorneys' fees expended by the City in the defense of such claims.and losses, including appeals. The Contractor expressly understands and agrees that any insurance protection required by this Agreement or otherwise provided by the Contractor shall in no way limit the Contractor's responsibility to indemnify, keep and save harmless and defend the City or its officers, employees, agents and instrumentalities as herein provided. 4 The parties agree that one percent (1%) of the total compensation to Contractor for performance of the Services under this Agreement is the specific consideration from the City to the Contractor for the Contractor's indemnity agreement. The provisions of this Section 6.1 and of this indemnification shall survive termination or expiration of this Agreement. 6.2 INSURANCE REQUIREMENTS The Contractor shall maintain and carry in full force during the Term, the following insurance: 1. Comprehensive General Liability(occurrence form), limits of liability$1,000,000 per occurrence and $2,000,000 in the aggregate for bodily injury property damage to include Premises/ Operations; Products, Completed Operations and Contractual Liability. Contractual Liability and Contractual Indemnity (Hold harmless endorsement exactly as written in "insurance requirements" of specifications); and 2. Automobile Liability - $1,000,000 each occurrence - owned/non-owned/hired automobiles included; and 3. Workers Compensation & Employers Liability, as required pursuant to Florida Statutes; and 4. The City must be named as and additional insured on the liability policies; and it must be stated on the certificate. The insurance must be furnished by insurance companies authorized to do business in the State of Florida. All insurance policies must be issued by companies rated no less than "B+" as to management and not less than "Class VI" as to strength by the latest edition of Best's Insurance Guide, published by A.M. Best Company, Oldwick, New Jersey, or its equivalent. Contractor agrees that it will provide written notice to the City at least thirty (30) days prior to such termination, cancellation, or non-renewal of the policies required under this Agreement where such termination, cancellation, or non-renewal does not result in equal of greater coverage. . Contractor shall include the City as an additional insured under its Commercial General Liability policy via blanket endorsement and shall contain a waiver of subrogation in favor of the City via blanket endorsement under its Commercial General Liability policy. Standard industry ACORD certificates of insurance must be submitted to the City's Risk Manager for approval (prior to any work and/or services commencing) and will be kept on file in the Office of the Risk Manager. The Contractor is also solely responsible for obtaining and submitting all insurance certificates for any sub-Contractors. Compliance with the foregoing requirements shall not relieve the Contractor of the liabilities and obligations under this Section or under any other portion of this Agreement. The Contractor shall not commence any work and or services pursuant to this Agreement until all insurance required under this Section has been obtained and such insurance has been approved by the City's Risk Manager. 5 SECTION 7 LITIGATION JURISDICTIONNENUE/JURY TRIAL WAIVER This Agreement shall be construed in accordance with the laws of,the State of Florida. This Agreement shall be enforceable in Miami-Dade County, Florida, and if legal action is necessary by either party with respect to the enforcement of any or all of the terms or conditions herein, exclusive venue for the enforcement of same shall lie in Miami-Dade County, Florida. By entering into this Agreement, Contractor and the City expressly waive any rights either party may have to a trial by jury of any civil litigation related to or arising out of this Agreement. SECTION 8 LIMITATION OF CITY'S LIABILITY The City desires to enter into this Agreement only if in so doing the City can place a limit on the City's liability for any cause of action, for money damages due to an alleged breach by the City of this Agreement, so that its liability for any such breach never exceeds the sum of the compensation/fee to be paid to the Contractor pursuant to this Agreement, less any amounts actually paid by the City as of the date of the alleged breach. Contractor hereby expresses its willingness to enter into this Agreement with Contractor's recovery from the City for any damage action for breach of contract to be limited to a maximum amount of the compensation/fee to be paid to the Contractor pursuant to this Agreement, less any amounts actually paid by the City as of the date of the alleged breach. The Contractor_desires to enter into this Agreement only if in doing so the Contractor can place a limit on its liability for any claim or action arising in connection with this Agreement, excluding any insurance proceeds under the policies and insurance coverage pursuant to Section 6.2. The Contractor hereby expresses it willingness to enter this Agreement with the City's recovery from Contractor, for any claim or damages from any action to be limited to a maximum of the compensation/fee to be paid or payable to the Contractor pursuant to the Agreement, excluding any insurance policy limits in the amounts as provided in Section 6.2. Accordingly, and notwithstanding any other term or condition of this Agreement, the City and Contractor each hereby agrees that it shall not be liable to the other for damages except as provided herein. Nothing contained in this section or elsewhere in this Agreement is in any way intended to be a waiver of the limitation placed upon the City's liability, as set forth in Section 768.28, Florida Statutes. SECTION 9 DUTY OF CARE/COMPLIANCE WITH APPLICABLE LAWS/PATENT RIGHTS; COPYRIGHT; AND CONFIDENTIAL FINDINGS 9.1 DUTY OF CARE With respect to the performance of the work and/or service contemplated herein, Contractor shall exercise that degree of skill, care, efficiency and diligence normally exercised by reasonable 6 persons and/or recognized' professionals with respect to the performance of comparable work and/or services. 9.2 COMPLIANCE WITH APPLICABLE LAWS In its performance of the work and/or services, Contractor shall comply with all applicable laws, ordinances, and regulations of the City, Miami-Dade,County, the State of Florida, and the federal government, as applicable. 9.3 PATENT RIGHTS; COPYRIGHT; CONFIDENTIAL FINDINGS Any work product, as defined below, arising out of this Agreement, as well as all information specifications, processes, data and findings, are intended to be the property of the City and shall not otherwise be made public and/or disseminated by Contractor, without the prior written consent of the City Manager, excepting any information, records etc. which are required to be disclosed pursuant to Court Order and/or Florida Public Records Law. All reports, documents, articles, devices, and/or work produced in whole or in part under this Agreement are intended to be the sole and exclusive property of the City, and shall not be subject to any application for copyright or patent by or on behalf of the Contractor or its employees or sub-Contractors, without the prior written consent of the City Manager. The term "work product" shall mean all those custom-developed reports, documents, articles, devices, and/or work produced in whole or in part under this Agreement by Contractor specifically for the City pursuant to Exhibit A. For avoidance of doubt, work product does not include Contractor's administrative communications, records, files, methodologies, processes and working papers relating to the Services which remain the sole and exclusive property of Contractor. Subject to the terms and conditions here, all work product is intended to be the sole and exclusive property of the City, and shall not be subject to any application for copyright or patent by or on behalf of the Contractor or its employees or sub-consultants, without the prior written consent of the City Manager. Notwithstanding any other provisions set forth herein, Contractor reserves all rights in and to all proprietary works of authorship created, developed or purchased by Contractor or any, third party under contract to Contractor that have not been created specifically for the City and/or have general applicability to Contractor's business,whether they were created prior to or during the term of this Agreement, including without limitation, methodologies, templates and documentation, as well as copyrights, trademarks, service marks, ideas, concepts, know-how, techniques, knowledge or data, and any derivatives thereof (collectively, "Contractor Information"). To the extent that Contractor incorporates any Contractor Information into the work product, upon final payment for the Services and work product under this Agreement, Contractor hereby grants to the City a nonexclusive, nontransferable.license to use such Consultant Information solely for internal purposes and solely in connection with the City's use of the work product in the normal course of business. 7 SECTION 10 GENERAL PROVISIONS 10.1 AUDIT AND INSPECTIONS Upon reasonable verbal or written notice to Contractor, and at any time during normal business hours (i.e. 9AM—5PM, Monday through Fridays, excluding nationally recognized holidays), and as often as the City Manager may, in his/her reasonable discretion and judgment, deem necessary, there shall be made available to the City Manager, and/or such representatives as the City Manager may deem to act on the City's behalf, to audit, examine, and/ or inspect, any and all other documents and/or records relating to all matters covered by this Agreement. Contractor shall maintain any and all such records at its place of business at the address set forth in the "Notices" section of this Agreement. 10.2 ASSIGNMENT, TRANSFER OR SUBCONSULTING Contractor shall not subcontract, assign, or transfer all or any portion of any work and/or service under this Agreement without the prior written consent of the City Manager, which consent, if given at all, shall be in the Manager's sole judgment and discretion. Neither this Agreement, nor any term or provision hereof, or right hereunder, shall be assignable unless as approved pursuant to this Section, and any attempt to make such assignment(unless approved) shall be void. 10.3, PUBLIC ENTITY CRIMES Prior to commencement of the Services, the Contractor shall file a State of Florida Form PUR 7068, Sworn Statement under Section 287.133(3)(a) Florida Statute on Public Entity Crimes with the City's Procurement Division. 10.4 NO DISCRIMINATION In connection with the performance of the Services, the Contractor shall not exclude from participation in, deny the benefits of, or subject to discrimination anyone on the grounds of race, color, national origin, sex, age, disability, religion, income or family status. Additionally, Contractor shall comply fully with the City of Miami Beach Human Rights Ordinance, codified in Chapter 62 of the City Code, as may be amended from time to time, prohibiting discrimination in employment, housing, public accommodations, and public services on account of actual or perceived race, color, national origin, religion, sex, intersexuality, gender identity, sexual orientation, marital and familial status, age, disability, ancestry, height, weight, domestic partner status, labor organization membership, familial situation, or political affiliation. 10.5 CONFLICT OF INTEREST Contractor herein agrees to adhere to and be governed by all applicable Miami-Dade County Conflict of Interest Ordinances and Ethics provisions, as set forth in the Miami-Dade County Code, as may be amended from time to time; and by the City of Miami Beach Charter and Code, as may be amended from time to time; both of which are incorporated by reference as if fully set forth herein. 8 Contractor covenants that it presently has no interest and shall not acquire any interest, directly or indirectly, which could conflict in any manner or degree with the performance of the Services. Contractor further covenants that in the performance of this Agreement, Contractor shall not employ any person having any such interest. No member of or delegate to the Congress of the United States shall be admitted to any share or part of this Agreement or to any benefits arising therefrom. 10.6 CONTRACTOR'S COMPLIANCE WITH FLORIDA PUBLIC RECORDS LAW (A) Contractor shall comply with Florida Public Records law under Chapter 119, Florida Statutes, as may be amended from time to time. (B) The term "public records" shall have the meaning set forth in Section 119.011(12), which means all documents, papers, letters, maps, books, tapes, photographs, films, sound recordings, data processing software, .or other material, regardless of the physical form, characteristics, or means of transmission, made or received pursuant to law or ordinance or in connection with the transaction of official business of the City. • (C) Pursuant to Section 119.0701 of the Florida Statutes, if the Contractor meets the definition of"Contractor" as defined in Section 119.0701(1)(a), the Contractor shall: (1) Keep and maintain public records required by the City to perform the service; (2) Upon request from the City's custodian of public records, provide the City with a copy of the requested records or allow the records to be inspected or copied within a reasonable time at a cost that does not exceed the cost provided in Chapter 119, Florida Statutes or as otherwise provided by law; (3) Ensure that public records that are exempt or confidential and exempt from public records disclosure requirements are not disclosed, except as authorized by law, for the duration of the contract term and following completion of the Agreement if the Contractor does not transfer the records to the City; (4) Upon completion of the Agreement, transfer, at no cost to the City, all public records in possession of the Contractor or keep and maintain public records required by the City to perform the service. If the Contractor transfers all public records to the City upon completion of the Agreement, the Contractor shall destroy any duplicate public records that are exempt or confidential and exempt from public records disclosure requirements. If the Contractor keeps and maintains public records upon completion of the Agreement,the Contractor shall meet all applicable requirements for retaining public records. All records stored electronically must be provided to the City, upon request from the City's custodian of public records, in a format that is compatible with the information technology systems of the City. (D) REQUEST FOR RECORDS; NONCOMPLIANCE. (1) A request to inspect or copy public records relating to the City's contract for services must be made directly to the City. If the City does not possess the requested records, the City shall immediately notify the Contractor of the request, and the Contractor must provide the records to the City or allow the records to be inspected or copied within a reasonable time. (2) Contractor's failure to comply with the City's request for records shall constitute a breach of this Agreement, and the City; at its sole discretion, may: (1) unilaterally 9 terminate the Agreement; (2) avail itself of the remedies set forth under the Agreement; and/or(3) avail itself of any available remedies at law or in equity. (3) A Contractor who fails to provide the'public records to the City within a reasonable time may be subject to penalties under s. 119.10. € CIVIL ACTION. (1) If a civil action is filed against a Contractor to compel production of public records relating to the City's contract for services, the court shall assess and award against the Contractor the reasonable costs of enforcement, including reasonable attorneys' fees, if: a. The court determines that the Contractor unlawfully refused to comply with the public records request within a reasonable time; and b. At least 8 business days before filing the action, the plaintiff provided written notice of the public records request, including a statement that the Contractor has not complied with the request, to the City and to the Contractor. (2) A notice complies with subparagraph (1)(b) if it is sent to the City's custodian of public records and to the Contractor at the Contractor's address listed on its contract with the City or to the Contractor's registered agent. Such notices must be sent by common carrier delivery service or by registered, Global Express Guaranteed, or certified mail, with postage or shipping paid by the sender and with evidence of delivery, which may be in an electronic format. (3) A Contractor who complies with a public records request within 8 business days after the notice is sent is not liable for the reasonable costs of enforcement. (F) IF THE CONTRACTOR HAS QUESTIONS REGARDING THE APPLICATION(OF CHAPTER 119, FLORIDA STATUTES, TO THE CONTRACTOR'S DUTY TO PROVIDE PUBLIC RECORDS RELATING TO THIS AGREEMENT, CONTACT THE CUSTODIAN OF PUBLIC RECORDS AT: CITY OF MIAMI BEACH ATTENTION: RAFAEL E. GRANADO, CITY CLERK 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 E-MAIL: RAFAELGRANADO(c�MIAMIBEACHFL.GOV PHONE: 305-673-7411 SECTION 11 NOTICES All notices and communications in writing required or permitted hereunder, shall be delivered personally to the representatives of the Contractor and the City listed below or may be mailed by U.S. Certified Mail, return receipt requested, postage prepaid, or by a nationally recognized overnight delivery service. 10 Until changed by notice, in writing, all such notices and communications shall be addressed as follows: TO CONTRACTOR: RSM US LLP 801 Brickell Avenue, Suite 1050 Miami, FL, 33131 Attn: Brett Friedman With a copy to: Office of the General Counsel RSM US LLP 200 South Wacker Drive, Suite 3900 Chicago, IL 60606 TO CITY: City Manager's Office City of Miami Beach 1700 Convention Center Drive, 4th Floor Miami Beach, FL 33139 Attn: Jimmy L. Morales, City Manager WITH A COPY TO: City of Miami Beach, Finance Department 1700 Convention Center Drive Miami Beach, FL 33139 Attn: Allison Williams, Deputy Finance Director Notice may also be provided to any other address designated by the party to receive notice if such alternate address is provided via U.S. certified mail, return receipt requested, hand delivered, or by overnight delivery. In the event an alternate notice address is properly provided, notice shall be sent to such alternate address in addition to any other address which notice would otherwise be sent, unless other delivery instruction as specifically provided for by the party entitled to notice. Notice shall be deemed given on the date of an acknowledged receipt, or, in all other cases, on the date of receipt or refusal. SECTION 12 MISCELLANEOUS PROVISIONS 12.1 CHANGES AND ADDITIONS This Agreement cannot be modified or amended without the express written consent of the parties. No modification, amendment; or alteration of the terms or conditions contained herein shall be effective unless contained in a written document executed with the same formality and of equal dignity herewith. 12.2 SEVERABILITY - If any term or provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall not be affected and every other term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. 11 12.3 WAIVER OF BREACH A party's failure to enforce any provision of this Agreement shall not be deemed a waiver of such provision or modification of this Agreement. A party's waiver of any breach of a provision of this Agreement shall not be deemed a waiver of any subsequent breach and shall not be construed to be a modification of the terms of this Agreement. 12.4 JOINT PREPARATION The parties hereto acknowledge that they have sought and received whatever competent advice and counsel as was necessary for them to form a full and complete understanding of all rights and obligations herein and that the preparation of this Agreement has been a joint effort of the parties,the language has been agreed to by parties to express their mutual intent and the resulting document shall not, solely as a matter of judicial construction, be construed more severely against one of the parties than the other. 12.5 ENTIRETY OF AGREEMENT The City and Contractor agree that this is the entire Agreement between the parties. This Agreement supersedes all prior negotiations, correspondence, conversations, agreements or understandings applicable to the matters contained herein, and there are no commitments, agreements or understandings concerning the subject matter of this Agreement that are not contained in this document. Title and paragraph headings are for convenient reference and are not intended to confer any rights or obligations upon the parties to this Agreement. [REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK] 12 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their appropriate officials, as of the date first entered above. FOR CITY: CITY OF MIAMI BEACH, FLORIDA ATTEST: By: J- City Jerk C 7 anager Date: A t& � tqg FOR CONTRACTOR: RSM US LLP ATTEST: By: tw-du av - min. f3 -� �► ��,r~.`.. ec've-� ,.�.� Print Name @d Title Print Name and Title Date: g-1-19 .#-01 8 e444,, ••I iNCQRP O I/1 I ELI.' *0• y , �_•�2`k %_,_ APPROVED AS TO FO_twin LANGUAGE & F* EXECUTION 13 ity Attorney Date EXHIBIT A SCOPE OF SERVICES 14 Statement of Work Required. The City of Miami Beach (the City) is required to have an annual audit in accordance with Fla. Statutes 218.39 performed on the City's Comprehensive Annual Financial Report(CAFR). Other audits are required to be performed in accordance with the U.S.Office of Management and Budget(OMB)Circulars,Bonded Debt Covenants,Performance Management and/or Grant Agreements. Each audit herein must be conducted by an independent audit firm. Pursuant to the above requirements, the City is required to procure auditing services to examine the City's Basic Financial Statements included in the City's Comprehensive Annual Financial Report(CAFR), Federal grant programs and State projects (OMB Uniform Guidance/—A-133Single Audit), the Miami Beach Redevelopment Agency's (RDA) financial statements,the Parking Systems Fund's(PSF)financial statement,the Miami Beach Visitor and Convention Authority's(VCA)financial statement,the Miami Beach Convention Center(MBCC),as managed by Global Spectrum (GS),financial statements,the Safe Neighborhood Parks and Bond Program(SNP), Children Trust(CT)and Building Better Communities(BBC). Scope. There are ten(10)services which are required as part of the required auditing services. All ten(10)categories of audit services below must be included in the firm's proposed approach and methodology. At a minimum, the scope of services includes, but is not limited to,the following: 1. CAFR—The auditor will prepare and issue an auditor's opinion and conduct an audit of the City's CAFR in accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Controller General of the United States. The examination must be made in accordance with the guidelines prepared by the Governmental Finance Officers Association (GFOA)in order for the City to apply for the Certificate of Achievement for Excellence in Financial Reporting. On an annual basis,the City will prepare the CAFR for auditing.The auditors will provide guidance with the implementation of Governmental Accounting Standard Board (GASB) statements as necessary. The audit firm shall issue an audit opinion to the City no later than March 25th of the following year. 2. OMB Uniform Guidance- Single Audits -The auditor must perform an audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Uniform Guidance (and/or OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations). The auditor must issue an Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance, Independent Auditors' Report on Compliance and Internal Control over Compliance Applicable to Each Major Federal Program and State Project, and Schedule of Findings and Questioned Costs. The City will prepare the Schedule of Expenditure of Federal Awards and State Financial Assistance. The audit firm shall issue the single audit report and data collections form to the City no later than April 30th of the following year. 3. Management Letter in Accordance with the Rules of the Auditor General of the State of Florida-The auditor firm shall issue a management letter to the City no later than April 30th of the following fiscal year. 15 4. RDA—The City issues stand-alone basic financial statements for the RDA, a blended component unit of the City. The auditor will prepare and issue an auditor's opinion and conduct an audit of the RDA basic financial statements in accordance with Generally Accepted Auditing Standards(GAAS)and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Controller General of the United States. The financial statements,footnotes and schedules are to be prepared by the auditor from trial balances and/or schedules provided by management of RDA.The audit firm shall issue the RDA basic financial statements to the City no later than April 30th of the following fiscal year. 5. PSF—The City issues stand-alone financial statements for the PSF, a major enterprise fund of the City.The auditor will prepare and issue an auditor's opinion and conduct an audit of the PSF financial statements in accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Controller General of the United States. The financial statements,footnotes and schedules are to be prepared by the auditor from trial balances and/or schedules provided by management of PSF. The audit firm shall issue the PSF basic financial statements to the City no later than May 30th of the following fiscal year. . 6. VCA—The City issues stand-alone basic financial statements for the VCA,a discretely presented component unit of the City. The auditor will prepare and issue an auditor's opinion and conduct an audit of the VCA financial statements in accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Controller General of the United States. The financial statements,footnotes and schedules are to be prepared by the auditor from trial balance and/or schedules provided by management of the VCA.The audit firm shall issue the VCA basic financial statements to the City no later than December-30th of the following fiscal year. 7. GS—The City issues special purpose financial statements for assets, liabilities, revenues, and expenses of the Miami Beach Convention Center and Jackie Gleason Theater of the Performing Arts,as managed by GS. The auditor will prepare and issue an auditor's opinion and conduct an audit of the GS assets, liabilities, revenues and expenses in accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Controller General of the United States. The financial statements,footnotes and schedules are to be prepared by the auditor from trial balances and/or schedules provided by management of GS. The audit firm shall issue the SMG special purpose financial statements to the City no later than December 30th of the following fiscal year. 8. SNP—The SNP governing Miami-Dade County ordinance No. 96-115 requires that an annual independent audit of all bond funds be conducted. The auditor will conduct an audit in compliance with the grant agreement, SNP ordinance No. 96-115, applicable resolution and the SNP Administrative Rules. The audit report, notes and schedules are to be prepared by the auditor from trial balances and/or schedules provided by management of the City. The audit firm shall issue the SNB to the City no later than December 30th of the following fiscal year. 9. CT—The City receives funds from the Children's Trust Fund Program and the Children's Trust requires an audit in accordance with the Children's Trust Contractual Agreements,AU-C 935 and Statement on Auditing Standards No. 117. 16 The audit report, notes and schedules are to be prepared by the auditor from trial balance and/or schedules provided by management of the City.The audit firm shall issue the CT to the City no later than December 30th of the following fiscal year. 10. BBC—The City receives funds from Miami-Dade County for the Building Better Communities Bond Project and the Building Better Communities Bond Project requires an audit in accordance with Miami-Dade County Ordinance 05-47, applicable resolutions, and Building Better Communities Administration Rule. The audit report, notes and schedules are to be prepared by the auditor from trial balances and/or schedules provided by management of the City. The audit firm shall issue the SNB to the City no later than December 30th of the following fiscal year. 11. The City desires to maintain and improve the level of training of its personnel assigned to the internal audit function and in accounting positions. The proposal should indicate if the firm conducts any training for its employees and if City personnel could attend such training. 12. The external auditor shall provide no less than two(2)senior members during the entire audit process. Other: In the event that,during the Term of the Agreement,the City, in its sole discretion and judgment, determines that there is a need for additional services not contemplated within the Agreement, such services will be performed at the hourly billing rate(s)set forth in the agreement. • • 17 EXHIBIT B CONTRACTOR'S FEES 18 Based on our understanding of your needs,our estimated fees are as follows. Failure to submit,Cost Proposal Form,in its entiret and full executed b the deadline established for the receipt of proposals will result in proposal being deemed non-responsive and being rejected. Bidder affirms that the prices stated on the cost proposal form below represents the entire cost of the items in full accordance with the requirements of this REP, inclusive of its terms, conditions, specifications and other requirements stated herein,and that no claim will be made on account of any increase in wage scales, material prices, delivery delays, taxes, insurance, cost indexes or any other unless a cost escalation provision is allowed herein and has been exercised by the City Manager in advance.The Cost Proposal Form shall be completed mechanically or, if manually, in ink.Cost Proposal Form completed in pencil shall be deemed non-responsive.All corrections on the Cost Proposal Form shall be initialed. ro cf a ualditr g`�a eac�o� ' 'ate i d or ee'a of-s Este vetet , 99 2(1 tk a tf �� 5f Imo. . . 1 Audit of City's Basic Financial Statement(CAFR) $121,700 $121,700 $125,350 ,125,350 $129,000 2 OMB Uniform Guidance/UGG Single Audits 24,000 24,000 24,700 24,700 25,400 Management Letter in Accordance with the Rules of the 1,300 1,300 1,350 1,350 1,390 Auditor General of the State of Florida 4 Miami Beach Redevelopment Agency(RDA) 21,000 21,000 21,630 21,630 22,300 5 Miami Beach Parking Systems Funds(PSF) 21,000 21,000 21,630 21,630 22,300 6 Miami Beach Visitor and Convention Authority(VGA) 18,500 18,500 19,000 19,000 19,570 Miami Beach Convention Center as Managed by Global 7 Spectrum(GS) 18,500 18,500 19,000 19,000 19,570 8 Safe Neighborhood Parks Single Audit(SNP) 9,500 9,500 9,785 9,785 10,000 9 Children's Trust(CT) 9,500 9,500 9,785 9,785 10,000 10 Building Better Communities(BBC) 8,500 8,500 8,750 8,750 9,000 TOTAL OF(LINES 1-10)FOR EACH RESPECTIVE YEAR $253,590 $254,500 $260 980 4,260?980 $260 980 GRAND TOTAL COST YEARS 2019'12023 11,297,490 Blended hourly rate of$175 or Quoted Hourly rates by level for additional services are as follows: Partner $375 Principal/Senior Manager $290 Manager $205 Supervisor $160 Senior $135 Staff $110 19 J ' ATTACHMENT A RESOLUTION COMMISSION ITEMS AND COMMISSION MEMORANDUM • Resolution No: 2019-30843 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER, PURSUANT TO REQUEST FOR PROPOSALS (RFP) 2019-092-JC, FOR AUDITING SERVICES; AUTHORIZING THE ADMINISTRATION TO ENTER INTO NEGOTIATIONS WITH RSM US LLP, ONE OF TWO FIRMS TIED AS THE TOP-RANKED PROPOSER; FURTHER, IF THE ADMINISTRATION IS NOT • SUCCESSFUL IN NEGOTIATING AN AGREEMENT WITH RSM US LLP, AUTHORIZING THE ADMINISTRATION TO NEGOTIATE AN AGREEMENT WITH CROWE LLP, THE NEXT TOP-RANKED PROPOSER; AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT UPON CONCLUSION OF SUCCESSFUL NEGOTIATIONS BY THE ADMINISTRATION. WHEREAS, the City of Miami Beach (the City) is required to have an annual audit performed on the City's Comprehensive Annual Financial Report(CAFR) in accordance with Florida Statutes 218.39.; and WHEREAS, in 2014, the City of Miami Beach entered into a professional services agreement with Crowe Horwath, LLP, for Auditing Services, pursuant to RFP 2014-276-LR, for three (3)years with two (2) optional one (1) year renewal periods; and WHEREAS, on February 13, 2019, the City Commission approved the issuance of RFP No. 2019-092-JC,for Auditing Services; and WHEREAS, on'February 13, 2019, via Commission Memorandum, the City Manager appointed an Evaluation Committee (the "Committee"), comprised of: Bryan Rosenfeld, Audit Committee Member, City of Miami Beach; Ronald Starkman, Audit Committee Member, City of Miami Beach; Patricia Valderrama, Audit Committee Member, City of Miami Beach; and, Deede Weithorn, Audit Committee Member, City of Miami Beach; and • WHEREAS, on April 8, 2019, the City received a total of nine (9) proposals from the following firms: Carr, Riggs & Ingram, CPAs & Advisors; Cherry Bekaert LLP; Clifton Larson Allen LLP; Crowe LLP; Keefe McCullough; Marcum LLP; Mauldin & Jenkins, LLC; Moore Stephens Lovelace, P.A.; and, RSM US LLP; and WHEREAS, the Committee convened on May 1, 2019, to consider the proposals received; and WHEREAS, the Committee was provided an overview,of the project, information relative to the City's Cone of Silence Ordinance and the Government Sunshine Law, as well as general information on the scope of services and a copy of each proposal, and was instructed to score and rank each proposal pursuant to the evaluation criteria established in the RFP for qualitative factors; and WHEREAS, the Committee's evaluation process resulted in the following order of ranking: 1st ranked proposer(tie): RSM US LLP; 15t ranked proposer(tie): Crowe LLP; 3rd ranked proposer: Marcum LLP; 4th ranked proposer: Carr, Riggs & Ingram, CPAs &Advisors; 5th ranked proposer: Keefe McCullough; 6th ranked proposer: Moore Stephens Lovelace, P.A.; • • • 7th ranked proposer: Clifton Larson Allen LLP; 8th ranked proposer: Mauldin &Jenkins, LLC; 9th ranked proposer: Cherry Bekaert LLP; and • WHEREAS, the results of the Committee process resulted in a tie for first-ranked position between proposers Crowe LLP and RSM US LLP; and WHEREAS, after reviewing the results of the Committee process, including proposer qualifications, the City Manager furtherexercised his due diligence and, consistent with the, requirements set forth in Section 218.391 of the Florida Statutes with regard to auditor selection, has recommended that the City Commission and authorize negotiations with RSM US LLP; finding that: (1) RSM US LLP's proposal is $27,410 less than Crowe LLP's proposal (price being a relevant, but not the sole or predominant factor, in addition to RSM US LLP's strong qualifications), and (2) as Crowe LLP has served as the City's outside auditor for the last five (5) years, the periodic rotation of an organization's outside auditors may be beneficial to ensuring the independence of the audit function, and therefore, this factor weighs in favor of authorizing negotiations with RSM US LLP. • NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby accept the recommendation of the City Manager, pursuant to Request for Proposals (RFP) No. 2019-092-JC for Auditing Services; authorize the Administration to enter into negotiations with RSM US LLP, one of two firms tied as the top-ranked proposer; and, if the Administration is not successful in negotiating an agreement with RSM US LLP, authorize the Administration to negotiate an agreement with Crowe LLP, the next top-ranked proposer; and further authorize the Mayor and City Clerk to execute an agreement., upon conclusion of successful negotiations by the Administration. , PASSED AND ADOPTED this day of 7"e- 2019. • Dan Gelber, Mayor ATTEST: • • �1 iute VII to Rafael E. ranado, City Clerk APPROVED AS TO FORM&LANGUAGE. &FOR EXECUTION 1 's Btn .tic:L4L_cl---- 5 tl ( ( °INC0114 WED!y City Attorney P Date s E %�: '9 ..........tis ''A Resolutions-C7 F MIAMIBEACH COMMISSION MEMORANDUM TO: Honorable Mayor and Members of the City Commission FROM: Jimmy L. Morales, City Manager DATE: June 5, 2019 SUBJECT:A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER, PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO. 2019-092-JC, FOR AUDITING SERVICES. RECOMMENDATION Adopt the Resolution. ANALYSIS The City of Miami Beach (the City) is required to have an annual audit performed on the City's Comprehensive Annual Financial Report (CAFR) in accordance with Florida Statutes 218.39. Other audits are required to be conducted in accordance with the U.S. Office of Management and Budget (OMB) Circulars, Bonded Debt Covenants, Performance Management and/or Grant Agreements. Each audit herein must be conducted by an independent audit firm. In 2014,the City of Miami Beach entered into a professional services agreement with Crowe Horwath, LLP, for Auditing Services, pursuant to RFP 2014-276-LR, for three (3)years with two (2)optional one (1)year renewal periods, with costs ranging from $228,000 to$248,600 on a per year basis. In consideration of the approaching expiration of the current contract with Crowe Horwath, ,the Administration is requesting a replacement contract for the continuation of the annually required auditing services. Pursuant to the above requirements, the City is required to procure auditing services to examine the City's Basic Financial Statements included in the City's Comprehensive Annual Financial Report (CAFR), Federal grant programs and State projects (OMB A-133 Single Audit) and the financial statements of the Miami Beach Redevelopment Agency's (RDA) , the Parking Systems Fund's (PSF) , the Miami Beach Visitor and Convention Authority's (VCA), the Miami Beach Convention Center (MBCC), as managed by Global Spectrum (GS), the Safe Neighborhood Parks and Bond Program (SNP), Children Trust (CT) and Building Better Communities (BBC). Therefore, by way of RFP 2019-092-JC, the City seeks to fulfill this statutory requirement. The solicitation was reviewed and approved by the Audit Committee with the addition of a provision at least two senior auditors for the duration of the engagement.Auditing services shall provide the City with an annual audit on the City's Comprehensive Annual Financial Report (CAFR), in accordance with Florida Statutes 218.39. Additionally, it is important to Page 291 of 868 note that, pursuant to Section 218.39, Florida Statutes, the evaluation committee for this project shall be the City's Audit Committee. On February 13, 2019, the City Commission approved the issuance of the RFP,No. 2019- 092-JC, Auditing Services, which was issued on February 14, 2019. The Procurement Department issued solicitation notices to 513 firms utilizing www publicpurchase.com. 60 prospective proposers accessed the advertised solicitation.A voluntary pre-proposal conference to provide information to the proposers submitting a response was held on February 25, 2019. RFP responses were due and received on April 8, 2019. The City received a total of nine(9)proposals from the following firms: • Carr, Riggs & Ingram, CPAs &Advisors • Cherry Bekaert LLP • Clifton Larson-Allen LLP • Crowe LLP • Keefe McCullough • Marcum LLP • Mauldin&Jenkins, LLC • Moore Stephens Lovelace, P.A. • RSM US LLP The Evaluation Committee was approved via Commission Memorandum on February 13, 2019. The Evaluation Committee, comprised of Audit Committee members as required by Florida Statutes, convened on May 1, 2019, to consider proposals received. The Committee was comprised of the following: Bryan Rosenfeld, Audit Committee Member, City of Miami Beach; Ronald Starkman, Audit Committee Member, City of Miami Beach; Patricia Valderrama, Audit Committee Member, City of Miami Beach; and, Deede Weithom, Audit Committee Member, City of Miami Beach. The Committee was provided an overview of the project, information relative to the City's Cone of Silence Ordinance and the Government Sunshine Law. The Committee was also provided with general information on the scope of services and a copy of each proposal. The Committee was instructed to score each proposal pursuant to the qualitative evaluation criteria established in the RFP. The RFP stipulated that points for cost would be added to the qualitative scores established by the Evaluation Committee to determine an overall ranking for all proposals evaluated. The evaluation process (qualitative and quantitative, as stipulated in the. RFP) resulted in the ranking of proposers as indicated in Attachment A, in the following order: 1st _ Crowe LLP(tied) 1st — RSM US LLP(tied) 3rd— Marcum LLP 4th— Cam Riggs & Ingram, CPAs &Advisors 5!_h— Keefe McCullough , 6th— Moore Stephens Lovelace, P.A. 7th— Clifton Larson Allen LLP 8th— Mauldin&Jenkins, LLC 9th— Cherry Bekaert LLP CONCLUSION Page 292 of 868 In reviewing the proposals received, I find that the City is fortunate to have received nine (9) responses to the RFP from well qualified firms. In reviewing the results of the Evaluation Committee process, I note that the process resulted in a tie for top ranking between Crowe LLP ("Crowe") and RSM US LLP ("RSM"). Both firms appear to be very well qualified; and, in fact, Crowe is the City's current audit firm, since being awarded in October 2014, and RSM has served as the audit firm prior to Crowe. Either firm can perform the required services without any concerns. However, I find the RSM proposal offers the City two primary benefits over the Crowe proposal. First, RSM provided a lower overall cost to the City for the required services which is $27,500 lower than Crowe's proposal. Second, I believe it is good practice to• rotate audit firms periodically to make sure the City's audits are benefiting from a fresh perspective every couple of years. While there are differences of opinion regarding the issue of rotating auditors, the Government Finance Officers Association (GFOA), in its best practices for audit procurements, has opined that"governmental entities should undertake a full-scale competitive process for the selection of independent auditors at the end of the term of each audit contract." In cases where. fullyqualified firms are not available to compete for an agency's audit contracts, GFOA believes that contract rotations may be counterproductive. However,that is not the case here with two fully qualified firms available to serve the City. Therefore, I recommend that the Mayor and City Commission authorize negotiations with RSM US LLP first. If the Administration is unable to successfully negotiate an agreement with RSM US LLP, I recommend negotiations with Crowe LLP. Finally, I recommend that the Mayor and City Clerk be authorized to execute the agreement with the selected firm. KEY INTENDED OUTCOMES SUPPORTED Strengthen Infernal Controls.To Achieve More Accountability • Legislative Tracking • Finance/Procurement • ATTACHMENTS: Description • • � 1 Page 293 of 868 ATTACHMENT B SOLICITATION (RFP) AND ADDENDUMS , NAM I BEACH _ ___ City of Miami Beach, 1755 Meridian Avenue, 3rd Floor, Miami Beach, Florida 33139,www.miamibeachfl.gov PROCUREMENT DEPARTMENT Tel: 305-673-7490. ADDENDUM NO. 2 RFP 2019-092-JC AUDITING SERVICES March 28, 2019 This Addendum to the above-referenced RFP is issued in response to questions from prospective proposers, or other clarifications and revisions issued by the City. The RFP is amended in the following particulars only (deletions are shown by strikethrough and additions are underlined). I. RFP DUE DATE AND TIME. The deadline for receipt of submittals is extended until 3:00 p.m., Monday, April 8, 2019, at the following location: City of Miami Beach Procurement Department 1755 Meridian Avenue, 3`d Floor Miami Beach, Florida 33139 Late submittals will not be accepted. Proposers are cautioned to plan sufficient time to allow for traffic or other delays for which the Proposer is solely responsible. II.NEW ATTACHMENTS. The following attachments have been added to the RFP, and incorporated as requirements to the RFP. Attachment A: PSA for Crowe Horwath, LLP Attachment B: Convention Center Report Attachment C: Parking Report Attachment D:-2017-RDA-Financials...................._..__.___.__.____.__ __ __ _._.___.._...._.. _ _ __ Attachment E:VCA Report — , Attachment F: CT Report Attachment G: BBC Report FY17 Attachment H: Safe Neighborhoods Parks Bond Projects Report • III. ANSWERS TO QUESTIONS RECEIVED. Q1. Could you please forward the previous year fee? Al. Refer to Attachment A: i. 2018-$248,600 • 1 ADDENDUM NO.2 RFP 2019-092-JC ii. 2017—$241,400 Q2. What were the audit fees paid for FY 2017 and FY 2018 for each of the 10 requested services? A2. Refer to response Al. \ Q3.Who will be the members of the Audit Selection Committee? A3. The audit committee serves as the Audit Selection Committee. The members of the Audit Committee are: iii. Bryan Rosenfeld \. iv. Deede Weithorn v. Marc Gidney, CPA vi. Michael,Weil vii. Patricia Valderamma viii. Ronald Starkman, Chair Q4. We were not able to download the FY 2017 CAFR or the 'FY 2017 big book: as we receive error messages once we opened the documents so we couldn't save or print. We were able to get the FY 2016 CAFR but that is somewhat outdated. Please advise how to correct error. A4. Please utilize the following link using Chrome: https://www.miamibeachfl.qov/wp-content/uploads/2018/05/City-of-Miami-Beach- Florida-CAFR-FY-2017-Biq-Book-Secure.pdf. Q5. We could not locate the reports for all of the other entities/services to be provided. Can you please provide or let us know how we can access them? A5. Please refer to response A4. Q6. On the questionnaire included in the RFP, item 3 requests, 3 references; however, page 13, item 2.1.6 requests 10 references. Please.clarify. __._...__.._A6....That...is_correct,_please...submit_as._requested.__._..___.__.__..._.__.._`___.__..________...._____._..__..___..__________._.._.__. ._._...___ Q7.What is the reason for considering a change in auditors? A7. Contract Expiration. Q8. How long did the previous auditors serve the City? A8.The previoud auditor has served the City for approximately four years. Q9. Are the previous auditors allowed to submit a proposal this time around? A9. Yes. J 2 ADDENDUM ___._...._.._.._.._..__......_...__..___. Q10....._Were there any auditors or consultants utilized besides Crowe in the previous year's audits? If so, what was the nature of such services and what'....._.._.- were the fees paid for those services? A10. None besides Crowe. Q11. When going through the auditor selection process, what are the most important attributes you are looking for and what was the primary reason for the selection of the current auditors? All. Please refer to Section 0400, Proposal Evaluation, of the RFP for the scoring/rating attributes. Q12. What qualifications/characteristics did the City appreciate most about their current auditors or are looking for in the future auditors? Al2. Timeliness, continuity of the engagement team,' and interim and continuous status meeting(s) during the engagement. Q13. For what areas does the City see as an opportunity for improvement for future audit engagements? A13. Please refer to response All. Q14. What was the typical audit engagement timeline, duration and staffing levels (e.g., number and level, such as partner, manager, senior, staff, etc.) for the fiscal year 2018 engagement, specifically for; a) Interim fieldwork prior to fiscal year end, if applicable; b) Final or substantive fieldwork subsequent to fiscal year end? c) Approximately how many hours were auditors in the field? A14. a) Usually completed during the 4th quarter of the applicable fiscal year or early the .1st quarter of the new year; b) Usually completed in the first 2-2.5 months of the first quarter of the subsequent fiscal year; c) Unknown. Q15. What are the top three (3) priorities for the City over the next five (5) years? - i A15. Please refer - to the City Commision Meetings - https://www.miamibeachfl.gov/city-hall/city-clerk/aqenda-archive-main-page-2/. Q16. When will the final trial balance and audit support schedules be available for the auditors-for,planning purposes? A16. Early January 2020. Q17. Approximately how many auditor-generated journal entries were made each of the past three years? A17. Less than or equal to 1. Q18. Are there any other major transactions/activities planned that may affect the fiscal year ending 2019 or subsequent years' engagements (e.g., planned major capital projects, IT/system implementations, bond issuances, etc.)? A18. The City plans to begin the first tranche of the GO bonds — please refer to https://www.gomb2018.com/; and GASBs as applicable. 3 ADDENDUM No.2 RFP 2019-092-JC f Q19. May we obtain a copy of the most recent Independent Auditor's Management Letter in accordance with the Rules of the Auditor General? A19. Refer to "Audit Report"/Big Book available at the link noted in question 4. Q20. If there were increases to the originally agreed-upon fees for out of scope work or additional billings for services, then what was the reasoning for the increases or additional services and how much did the City pay for them? A20. No. Q21. What is the amount budgeted for the fiscal year-end 2019 engagement? A21. There is no official budget amount. There is only an estimate of$256,000. , Q22. What management and accounting system(s) does the City use (e.g., cash collections, data management, financial, assets, financial reporting, etc.)? A22. Munis — ERP system: General Ledger, Fixed Assets, Payroll; Energov/Eden: specific revenues — permits, business taxes, special assessments, and utility billing; Misc. Systems: various systems for various receipts, databases, parks and rec, and other nonmajor systems. Q23. Will a download of trial balance financial and budgetary information be 1 available? A23. Yes. Q24. Do you currently (fiscal year ended 2018) use a DBE/SBE firm? If so, what is the name of that firm and what percentage of the audit were they responsible for? A24. No. • Q25.What were the audit fees for each of the last three fiscal years? A25. Refer to response Al. Q26. Were there any additional fees related to the performance of the annual audit during the past three years? A26. No. Q27. Will the current vendor/external audit firm be allowed to respond to the RFP? A27. Yes. Q28. In the last fiscal year audited, were there any additional services provided by the current auditors? If so, what were they and what were the fees? A28. None. 4 ADDENDUM NO.2 RFP 2019-092-JC I Q29. Are there any points awarded in the Evaluation Criteria for any of the following: Local business preference (and if soy in what-areas),--MWBE.--.or_..SBE....__--__................_....-... certification, and if so, what certifications does the City accept? A29. No. Q30. Can you provide 2017 stand-alone financials for the following entities: PSF, VCA, GS, SNP, CT, BBC. A30. Refer to response A5. Q31. What are your key concerns about the audit and what is most important to you in your selection of an auditor? A31. Refer to response All. Q32. Does the City intend to contract a single firm for the annual audit or is the City considering multiple firms being awarded components of the annual audit- example, all ten (10) services to one firm or individual/bundled services to other firms? A32. Please refer to Section 0200, Instructions to Respondents & General Conditions, Sub-section 19, Determination of Award. Q33. What is the make-up and tenure of the Cities financial staff, internal audit staff and IT staff? A33. For Finance, please refer to: https://www.miamibeachfl.gov/citv- hall/finance/general-ledger/. o FINANCE: • Management: • John Woodruff-- CFO • Allison Williams, CPA— Deputy Director • Manny Marquez Assistant Director • Treasury/AP/Payroll: . ---.__�._...Sara Patino= _2+years__ -..___.__.----- • Revenue: • Benjamin Nussbaum, CPA—5 years • General Ledger: • Alex Schmidt, CPA—2 years o For internal i audit, please refer to: https://www.miamibeachfl.gov/city- hal l/internal-audit/. a For IT, please refer to: https://www.miamibeachfl.gov/city-hall/information- technologv/. S ADDENDUM NO.2 . RFP 2019-092-JO Q34. Do you intend that the Miami Beach Employees Retirement Plan and Retirement- System for Firefighters and Police Officers will continue to be audited by other auditors and audited financial statements will be available prior to the issuance of the City's CAFR for each fiscal year? A34. Yes. , Q35. Will the OPEB plan be separately audited or do you intend the auditor of the City to issue a standalone set of audited financial statements for the OPEB • plan? A35: Part of the City's CAFR audit. Q36. Do you expect to receive any financial statement findings or single audit findings in your fiscal year 2018 financial statements? A36. Our auditors have brought an IT observation to our attention. We expect this to be an official finding. Q37. Were there any significant disagreements on accounting treatment with the current auditor of the City? A37. Not aware of any. I Q38. What are your expectations regarding timing of interim and final fieldwork plus delivery of the report? A38. Refer to response A14. Q39. Can any portion of the audit be performed remotely? A39. Yes. Q40. Have you experienced any significant changes in activities, funding or key personnel from the prior year? Or are you anticipating any major changes over the course of the contract? A40. No. Q41. Could we see a copy of all prior years separately issued reports, as noted in Appendix C? This would include the most recently issued single audit reports, RDA reports, PSFreports, VCA reports, GS:reports, SNP reports_(if a ____ _ single -report please-provide if multiple-reports please indicate the number of required similar reports going forward for the bond funds) CT reports, and BBC reports. • A41. Please refer to response A5. Q42. Please indicate the fees paid to the City's current auditors for each of the currently requested reports. A42. Please refer to response Al. 6 ADDENDUM NO.2 RFP 2019-092-JC • Q43. CAFR noted to be issued no later than March 25th of each year. What has the City been used to regarding audit fieldwork timeframes to accomplish this.............................. deadline?Would the City like to see any changes to that schedule? A43. Refer to response A14. Q44. Regarding all of the separately issued reports noted in Appendix C - are these entities and records a part of the City's accounting system or are they separate entities with separate accounting operations and controls? A44. The VCA and Convention Center are not part of the City's ERP. They have separate controls and systems. For the Convention Center, the City brings its balances onto our GL via journal entry. Q45. What accounting system does the City currently use, and does it offer remote read only access to the auditors? A45. Munis— restricted to onsite read only access for our auditors. Q46. How has the City's internal audit department helped with the external audit in prior years? Is this help anticipated to stay the same going forward? A46. No. 1 Q47. When are you accustomed to your auditors coming onsite to do interim/single audit/final fieldwork? ' A47. Refer to response A14. Q48. How long do your auditors typically spend on-site? A48. 2-3 months. Q49. When is the general ledger closed and ready to be audited? A49. Early January. .,p Q50. Any changes in federal and state funding levels? A50. Unknown specifically, but nothing out of the ordinary is reported. Funding is consistent, the SEFA changes depending on when the project managers can spend the monies. Q51. What is the accounting software used by the City? A51. Refer to response A22. Q52. Are your auditors granted read-only access to the accounting software? If so, can such access be obtained remotely? A52. Yes, auditors are granted read only access to the system. No, remote access is not provided to auditors. Q53. What was the audit fee for the last three years (disaggregated by deliverable)? A53. Refer to response Al. 7 ADDENDUM NO.2 RFP 2019-092-JC Q54. How can we obtain a copy of each of the deliverables from the prior year -- ----------(CAFR-and'Single-Audit is-all-we-could find-on-the-website)? — — ---- A54. Refer to response A5. Q55. Any plans to early implement GASB 87? A55. No. Additional questions received will be answered in a forthcoming addendum. Any questions regarding this Addendum should be submitted in writing to the Procurement Department to the attention of the individual named below, with a copy to the City Clerk's Office at RafaelGranado(a�miamibeachfl.gov. Procurement Contact: Telephone: Email: �. Jason Crouch 305-673-7000, ext. 6694 JasonCrouch@miamibeachfl.gov Proposers are reminded to acknowledge receipt of this addendum as part of your RFP submission. Sin,k0,, '�., Ale D s i P :• rement Director 8 ADDENDUM NO.2 RFP 2019-092-JC ATTACHMENT A M I AAA I BEACH PROFESSIONAL SERVICES AGREEMENT ( PSA) - FOR CROWE HORWATH , LLP 2019-092-JC AUDITING SERVICES PROCUREMENT DEPARTMENT 1755 Meridian Avenue, 3rd Floor Miami Beach, Florida 33139 olv/Y—oK$t' g PROFESSIONAL SERVICES AGREEMENT BETWEEN THE CITY OF MIAMI BEACH AND • CROWE HORWATH, LLP FOR AUDITING SERVICES, PURSUANT TO RFP#2014-276-LR This Professional Services Agreement ("Agreement") is entered into this 29th day of October, 2014, between the CITY OF MIAMI BEACH, FLORIDA, a municipal corporation organized and existing under the laws of the State of Florida, having its principal offices at ,1700 Convention Center Drive, Miami Beach, Florida, 33139 ("City"), and CROWE HORWATH, a LLP whose address is 401 East Las Olas Boulevard, Suite 1100, Fort Lauderdale, Florida 33301-4230(Consultant). • SECTION 1 DEFINITIONS Agreement: This Agreement between the City and Consultant, including any exhibits and amendments thereto, City Manager: The chief administrative officer of the City, Consultant: For the purposes of this Agreement, Consultant shall be deemed to be an independent contractor, and not an agent or employee of the City. Services: All services, work and actions by the Consultant performed or undertaken pursuant to the Agreement. Fee: Amount paid to the Consultant as compensation for Services. Risk Manager: The Risk Manager of the City, with offices at 1700 Convention Center Drive, Third Floor, Miami Beach, Florida 33139: telephone number (305) 673-7000, Ext. 6435: and fax number(305)673-7023. Proposal Documents: Proposal Documents shall mean City of Miami Beach RFP No. 2014- 276-LR for Auditing Services, together with all amendments thereto, issued by the City in contemplation of this Agreement RFP and the Consultant's proposal in response thereto (Proposal), all of-which are hereby incorporated and made a part hereof; provided, however, that l! in the event of an express conflict between the Proposal Documents and this Agreement, the following order of precedent shall prevail: this Agreement; the RFP; and the Proposal. CAFR: Comprehensive Annual Financial Report RDA: Miami Beach Redevelopment Agency PSF: Miami Beach Parking System Fund 1 • VCA: Miami Beach Visitors Convention Authority BBC: Building Better Communities CT: Children's Trdst SNP: Safe Neighborhood Parks Bond Program SECTION 2 SCOPE OF SERVICES (SERVICES) 2.1 In consideration of the Fee to be paid to Consultant by the City, Consultant shall provide the work and services described in Exhibit"A"hereto(the Services). 2.2 Consultant's Services, and any deliverables incident thereto, shall be completed in accordance with the timeline and/or schedule in Exhibit"A" hereto. • SECTION 3 TERM The term of this Agreement (Term) shall commence upon execution of this Agreement by all parties hereto, and shall have an initial term of three (3) years commencing with the City Fiscal Year ending on September 30, 2014 with a two year renewal option, to be exercised at the City Manager's sole option and discretion, by providing Consultant with written notice of same no less than thirty(30)days prior to the expiration of the initial term. Notwithstanding the Term provided herein, Consultant shall adhere to any specific timelines, schedules, dates, and/or performance milestones for completion and delivery of the Services, as same is/are set forth In the timeline and/or schedule referenced in Exhibit A hereto. SECTION 4 FEE 4.1 In consideration of the Services to be provided, Consultant shalt be compensated on a fixed fee basis, see Exhibit"B". • Ij 4.2 ADDITIONAL SERVICES TO BE SPECIFICALLY REQUESTED BY THE CiTY In the event that, during the Term of the Agreement, the City, in Its sole discretion and Judgment, determines that there is a need for additional services not contemplated within this Agreement, such services will be performed at the following hourly billing rates, which will be 2 adjusted each year, commensurate to each year's compensation Increase as set forth in Exhibit"B": Hourly Bil€ingg Rates J Partner $400 Director 220 Manager 175 Senior 150 Staff 115 Additional services will only be performed by the Consultant following receipt of written authorization from the City, which authorization must be secured prior to commencement of said service(s). 4.3 Upon review and approval of the invoice by the City, the City will make its best efforts to pay the Auditor within thirty(30) days of the receipt of invoice. 4.4 INVOICING The Auditor shall be entitled to invoice monthly for the portion(s) of Services completed. Upon receipt of an acceptable and approved invoice, payment(s) shall be made within thirty (30) days for that portion (or those portions) of the Services satisfactorily rendered (and referenced in the particular invoice). Invoices shall Include a detailed description of the Services (or portions thereof) provided, and shall be submitted to the City at the following address: City of Miami Beach Finance Department 1700 Convention Center Drive 3rd Floor - Miami Beach, Florida 33139 SECTION 5 TERMINATION 5.1 TERMINATION FOR CAUSE If the Consultant shall fall to fulfill in a timely manner, or otherwise violates, any of the covenants, agreements, or stipulations material to this Agreement, the City, through its City Manager, shall thereupon have the right to terminate this Agreement for cause. Prior to exercising its option to terminate for cause, the City shall notify the Consultant of its violation of the particular term(s) of this Agreement, and shall grant Consultant ten (10) days to cure such default. If such default remains uncured after ten (10) days, the City may terminate this Agreement without further notice to Consultant. Upon termination, the City shall be fully discharged from any and all liabilities, duties,and terms arising out of, or by virtue of, this Agreement. 3 Notwithstanding the above, the Consultant shall not be relieved of liability to the City • for damages sustained by the City by any breach of the Agreement by the Consultant, The City, at its sole option and discretion, shall be entitled to bring any and all legal/equitable actions that it deems to be in its best interest in order to enforce the City's right and remedies against Consultant. The City shall be entitled to recover all costs of such actions, including reasonable attorneys'fees. 5.2 TERMINATION FOR CONVENIENCE OF THE CiTY THE CITY MAY ALSO, THROUGH ITS CiTY MANAGER, AND FOR ITS CONVENIENCE AND WITHOUT CAUSE, TERMINATE THE AGREEMENT AT ANY TiME DURING THE TERM BY GIVING WRITTEN NOTICE TO CONSULTANT OF SUCH TERMINATION; WHICH SHALL BECOME EFFECTIVE WITHIN THIRTY(30) DAYS FOLLOWING.RECEIPT BY THE CONSULTANT OF SUCH NOTICE. IF THE AGREEMENT IS TERMINATED FOR CONVENIENCE BY THE CITY, CONSULTANT SHALL BE PAID FOR ANY SERVICES SATISFACTORILY PERFORMED UP TO THE DATE OF TERMINATION; FOLLOWING WHICH THE CITY SHALL BE DISCHARGED FROM ANY AND ALL LIABILITIES, DUTIES, AND TERMS ARISING OUT OF, OR BY ViRTUE OF, THIS AGREEMENT, 5.3 TERMINATION FOR INSOLVENCY I The City also reserves the right to terminate the Agreement In the event the Consultant is placed either in voluntary or involuntary bankruptcy or makes an • assignment for the benefit of creditors. In such event, the right and obligations for the parties shall be the same as provided for in Section 5,2, SECTION 6 INDEMNIFICATION AND INSURANCE REQUIREMENTS 6.1 INDEMNIFICATION Consultant agrees to indemnify and hold harmless the City of Miami Beach and its officers, employees, agents, and contractors, from and against any and all actions (whether at law or in equity), claims, liabilities, fosses, and expenses, Including, but not limited to, attorneys' fees and costs, for personal, economic or bodily injury, wrongful death, loss of or damage to property, which may arise or be alleged to have arisen from the negligent acts, errors, omissions or other wrongful conduct of the Consultant, its officers, employees, agents, contractors, or any other person or entity acting under Consultant's control or supervision, in. connection with, related to, or as a result of the Consultant's performance of the Services pursuant to this Agreement. To that extent, the Consultant shall pay all such claims and losses and shall pay all such costs and Judgments which may Issue from any lawsuit arising from such claims and losses, and shall pay all costs and attorneys' fees expended by the City in the defense of such claims and losses, including appeals. . The parties agree that one percent (1%) of the total compensation to Consultant for performance of the Services under this Agreement is the specific consideration from the City to the Consultant for the Consultant's indemnity agreement. The provisions of this Section 6.1 and of this indemnification shall survive termination or expiration of this Agreement. 4 6.2 INSURANCE REQUIREMENTS [NOTE: INSURANCE TYPES AND LIMITS BELOW SHOULD ALWAYS BE SAME AS WHAT WAS SPECIFICED IN BID DOCUMENTS] The Consultant shall maintain and carry in full force during the Term, the following insurance: 1. Consultant General Liability, in the amount of$1,000,000; 2. Consultant Professional Liability, in the amount of$3,000,000; and 3.Workers Compensation & Employers Liability, as required pursuant to Florida Statutes, The insurance must be furnished by insurance companies authorized to do business In the State of Florida. All insurance policies must be issued by companies rated no less than "B+" as to management and not less than "Class VI" as to strength by the latest edition of Best's insurance Guide, published by A.M. Best Company, Oldwick, New Jersey, or its equivalent. Consultant shall endeavor to provide not less than thirty (30) days prior written notice of termination, cancellation or reduction in coverage in the policy, unless comparable coverage is promptly secured. Original certificates of insurance must be submitted to the City's Risk Manager for approval (prior to any work and/or services commencing) and will be kept on file In the Office of the Risk Manager. The City shall have the right to obtain from the Consultant specimen copies of the insurance policies in the event that submitted certificates of insurance are inadequate to ascertain compliance with required coverage. • The Consultant is also solely responsible for obtaining and submitting all insurance certificates for any sub-consultants. Compliance with the foregoing requirements shall not relieve the Consultant of the liabilities and obligations under this Section or under any other portion of this Agreement. The Consultant shall not commence any work and or services pursuant to this Agreement until all insurance required under this Section has been obtained and such Insurance has been approved by the City's Risk•Manager. • SECTION 7 LITIGATION JURISDICTIONNENUE/JURY TRIAL WAIVER This Agreement shall be construed in accordance with the laws of the State of Florida. This Agreement shall be enforceable in Miami-Dade County, Florida, and if legal action is , necessary by either party with respect to the enforcement of any or all of the terms or conditions herein, exclusive venue for the enforcement of same shall lie in Miami-Dade County, Florida. By entering into this Agreement, Consultant and the City expressly waive any rights either party may have to a trial by jury of any)civil litigation related to or arising out of this Agreement. • • 5 , SECTION 8 LIMITATION OF CITY'S LIABILITY The City desires to enter into this Agreement only if in so doing the City can place a limit on the City's liability for any cause of action, for money damages due to an alleged breach by the City of this Agreement, so that its liability for any such breach never exceeds the sum of $10,000. Consultant hereby expresses its willingness to enter into this Agreement with Consultant's recovery from the City for any damage action for breach of contract to be limited to a maximum amount of$10,000. Accordingly, and notwithstanding any other term or condition of this Agreement, Consultant hereby agrees that the City shall not be liable to the Consultant for damages in an amount in excess of $10,000 for any action or claim for breach of contract arising out of the performance or non-performance of any obligations imposed upon the City by this Agreement. Nothing contained in this section or elsewhere in this Agreement lain any way intended to be a waiver of the limitation placed upon the City's liability, as set forth in Section 768.28, Florida Statutes. SECTION 9 [INTENTIONALLY DELETED] - SECTION 10 GENERAL PROVISIONS 10.1 AUDIT AND INSPECTIONS Upon reasonable verbal or written notice to Consultant, and at any time during normal business hours (i.e. 9AM -5PM, Monday through Fridays, excluding nationally recognized holidays), and as often as the City Manger may, in his/her reasonable discretion and judgment, deem necessary, there shall be made available to the City Manager, and/or such representatives as the City Manager may deem to act on the City's•behalf, to audit, examine, and/or inspect;any and all other documents and/or records relating to all matters . covered by this Agreement. Consultant shall Maintain any and all such records at its place of business at the address set forth In the'Notices"section of this Agreement. 10.2 [INTENTIONALLY DELETED] 10.3 ASSIGNMENT, TRANSFER OR SUBCONSULTING Consultant shall not subcontract, assign, or transfer all or any portion of any work and/or service under this Agreement without the prior written consent of the City Manager, which consent, if given at all, shall be in the Manager's sole judgment and discretion. Neither this Agreement, nor any term or provision hereof, or right hereunder, shall be assignable unless 6 . a's approved pursuant to this Section, and any attempt to make such assignment (unless approved) shall be void. 10.4 PUBLIC ENTITY CRIMES Prior to commencement of the Services, the Consultant shall file a State of Florida Form PUR 7068, Sworn Statement under Section 287.133(3)(a) Florida Statute on Public Entity Crimes with the City's Procurement Division. 10.5 EQUAL EMPLOYMENT OPPORTUNITY In connection with the performance of the Services, the Consultant shall not discriminate against any employee or applicant for employment because of race, color, national origin, religion, sex, gender identity, sexual orientation, disability, marital and familial status, or age. • 10.6 CONFLICT OF INTEREST The Consultant herein agrees to adhere to and be governed by all applicable Miami-Dade County Conflict of Interest Ordinances and Ethics provisions, as set forth in the Miami-Dade County Code, and as may be amended from time to time; and by the City of Miami Beach Chatter and Code (as some may be amended from time to time); both of which are incorporated by reference herein as if fully set forth herein. The Consultant covenants that it presently has no interest and shall not acquire any interest, direct or indirectly, which could conflict in any manner or degree with the performance of the Services. The Consultant further covenants that in the performance of this Agreement, no person having any such interest shall knowingly be employed by the Consultant. No member of or delegate to the Congress of the United States shall be admitted to any share or part of this Agreement or to any benefits arising there from. 10.7 TRAVEL Any travel in connection with this Agreement must be pre-approved by the City. All travel expenses will be reimbursed in accordance with the requirements of Section 112.061, Florida Statutes. •SECTION 11 NOTICES All notices and communications in writing required or permitted hereunder, shall be delivered personally to the representatives of the Consultant and the City listed below or may be mailed by U.S. Certified Mail, return receipt requested, postage prepaid, or by a nationally recognized overnight delivery service. Until changed by notice in writing, all such notices and communications shall be addressed as follows: TO CONSULTANT: Crowe Horwath, LLP Attn: John C. Weber 401 East Las Olas Boulevard, Suite 1100 Fort Lauderdale, Florida 33301-4230 (8.3)209- 2585 7 TO CITY: City of Miami Beach • Attn: Patricia Walker Chief Financial Officer 1700 Convention Center Drive • Miami Beach, Florida 33139 (305) 673-7574 Notice may also be provided to any other address designated by the party to receive notice if such alternate address is provided via U.S. certified mail, return receipt requested, hand delivered, or by overnight delivery. In the event an alternate notice address is properly provided, notice shall be sent to such alternate address in addition to any other address which notice would otherwise be sent, unless other delivery instruction as specifically provided for by the party entitled to notice. Notice shall be deemed given on the day on which personally served, or the day of receipt by either U.S. certified mail or overnight delivery. , SECTION 12 MISCELLANEOUS PROVISIONS 12.1 CHANGES AND ADDITIONS This Agreement cannot be modified or amended without the express written consent of the parties. No modification, amendment, or alteration of the terms or conditions contained herein shall be effective unless contained in a written document executed with the same formality and of equal dignity herewith. 12.2 SEVERABILITY If any term or provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall not be affected and every other term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. 12.3 ENTIRETY OF AGREEMENT The City and Consultant agree that this is the entire Agreement between the parties. This Agreement supersedes all prior negotiations, correspondence, conversations, agreements or understandings applicable to the matters contained herein, and there are no commitments, agreements or understandings concerning the subject matter of this Agreement that are not contained In this document. Title and paragraph headings are for convenient reference and are not intended to confer any rights or obligations upon the parties to this Agreement. The Auditor's engagement letter, included in Exhibit "C", is hereby incorporated by reference into this Agreement provided, however, that In the event of an express conflict between the Auditor's engagement letter and this Agreement, the Agreement shall prevail. 12.4 CONSULTANT'S COMPLIANCE WITH FLORIDA PUBLIC RECORDS LAW Pursuant to Section 119.0701 of the Florida Statutes, if the Consultant meets the definition of "Contractor"as defined in Section 119.0701(1)(a), the Consultant shall: 8 a) Keep and maintain public records that ordinarily and necessarily would be required by the public agency In order to perform the service; b) Provide the public with access to public records on the same terms and conditions that the public agency would provide the records and at a cost that does not exceed the cost provided in this chapter or as otherwise provided by law; c) Ensure that public records that are exempt or confidential and exempt from public records disclosure requirements are not disclosed except as authorized by law; and d) Meet all requirements for retaining public records and transfer to the City, at no City cost, all public records created, received, maintained and/or directly related to the performance of this Agreement that are in possession of the Consultant upon termination of this Agreement. Upon termination of this Agreement, the Consultant shall destroy any duplicate public records that are exempt or-confidential and exempt from public records disclosure requirements. All records stored electronically must be provided to the City in a format that is compatible with the information technology systems of the City. • For purposes of this Article, the term "public records" shall mean all documents, papers, letters, maps, books, tapes, photographs, films, sound recordings, data processing software, or other material, regardless of the physical form, characteristics, or means of transmission, made or received pursuant to law or ordinance or in connection,with the transaction of official business of the City. Consultant's failure to comply with the public records disclosure requirement set forth in Section 119.0701 of the Florida Statutes shall be a breach of this Agreement. In the event the Consultant does not comply with the public records disclosure requirement set forth in Section 119.0701 of the Florida Statutes, the City may, at the City's sole discretion, avail itself of the remedies set forth under this Agreement and available at law. [REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK] � fI . 9 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their appropriate officials, as of the date first entered above. FOR CITY: CITY OF MIAMI BEACH, FLORIDA ATTEST: By: , \\ „,.. •_ ►gni / / City OJ rk .. -4 �'%o Mayor ./ .' $* INCDRP ORATED? • s • 4h41,rQ......6,v - qi Nc� FOR CONSULTANT: CROWE HORWARTH, LLP ATTEST: 40,17,By: 4 -;ems- ?At-Amy- "artner+ Avw8,-0.1.) �-‘✓` 1iN4(r Print Name Print Name/Title • APPROVED AS TO FORM &LANGUAGE &FOR EXECUTION C-)7,---4T)1(•(52- / e)// City Attorney c i„s J Dote { 10 EXHIBIT A SCOPE OF SERVICES (SERVICES) • GENERAL The Consultant agrees to provide the City with those certain independent auditing services, as set forth in the Proposal Documents (Exhibit "A" hereto), and as further described in this Section 2, MIAMI BEACH 1 1. CAFR — The auditor will prepare and issue an auditor's opinion and conduct an audit of the City's CAFR in accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Controller General of the United States. The examination must be made in accordance with the guidelines prepared by the Governmental Finance Officers Association (GFOA) in order for the City to apply for the Certificate of Achievement for Excellence in Financial Reporting. On an annual basis, the City will prepare the CAFR for auditing. The auditors will provide guidance with the implementation of Governmental Accounting • Standard Board (GASB) statements as necessary. The audit firm shall issue an audit opinion to the City no later than 180 days following the fiscal year end. 2. OMB A-133 Single Audits - The auditor must perform an audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the - United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. The auditor must issue an Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance, Independent Auditors' Report on Compliance and Internal Control over Compliance Applicable to Each Major Federal Program and State Project, and Schedule of Findings and Questioned Costs. The City will prepare the Schedule of Expenditure of Federal Awards and State Financial Assistance, The audit firm shall issue the single audit report and data collectionsform to the City no later than 180 days following the fiscal year end. 3. Management Letter in Accordance with the Rules of the Auditor General of the State of Florida - The auditor firm shall issue a • •e management letter to the City no later than 180 days following the fiscal year end. 4. RDA — The City issues stand-alone basic financial statements for the RDA, a blended component unit of the City. The auditor will prepare and issue an auditor's opinion and conduct an audit of the RDA basic financial statements in accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Controller General of the United States. The financial statements, footnotes and schedules are to be prepared by the auditor. The audit firm shall issue the RDA basic financial statements to the City no later than 180 days following the fiscal year end. 5. PSF- The City issues stand-alone financial statements for the PSF, a major enterprise fund of the City. The auditor will prepare and issue an auditor's opinion and conduct an audit of the PSF financial statements in accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Controller General of the United States. The financial statements, footnotes and schedules are to be prepared by the auditor. The audit firm shall issue the PSF basic financial statements to the City no later than 150.days following the fiscal year end. 6, VCA- The City issues stand-alone basic financial statements for the VCA, a discretely presented component unit of the City. The auditor will prepare and issue an auditor's opinion and conduct an,audit of the VCA financial statements in accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Controller General of the United States, The financial statements, footnotes and schedules are to be prepared by the auditor. The audit firm shall issue the VGA basic financial statements to the City no later than 90 days following the fiscal year end. 7. GS- The City issues special purpose financial statements for assets, • liabilities, revenues, and expenses of the Miami Beach Convention Center, as managed by GS. The auditor will prepare and issue an auditor's opinion and conduct an audit of the GS assets, liabilities, ,revenues and expenses' in accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Controller General of the United States. The financial statements, footnotes and schedules are to be prepared by the auditor. The audit firm shall issue the GS special purpose financial statements to the City no later than 90 days following the fiscal year end. 8. SNP- The SNP governing Miami-Dade County ordinance No. 96-115 requires that an annual independent audit of all bond funds be conducted. The auditor will conduct an audit in compliance with'the grant agreement, SNP ordinance No. 96-115, applicable resolution and the SNP Administrative Rules. The audit report, notes and schedules are to be prepared by the auditor. The audit firm shall issue the SNB to the City no later than 90 days following the fiscal year end. 9, CT -The City receives funds from the Children's Trust Fund Program and the Children's Trust requires an audit in accordance with the Children's Trust Contractual Agreements, AU-C 935 and Statement on Auditing Standards No. 1174 The audit report, notes and schedules are to be prepared by the auditor. The audit firm shall issue the CT to the City no later than 90 days following the fisbal year end. 10.BBC - The City receives funds from Miami-Dade County for the Building Better Communities Bond Project and the Building Better Communities Bond Project requires an audit in accordance with Miami-Dade County Ordinance 05-47, applicable resolutions, and Building Better Communities Administration Rule, The audit report, notes and schedules are to be prepared by the auditor, 'The audit firm shall issue the SNB to the City no later than 90 days following the fiscal year end. Other: In the event that, during the Term of the Agreement, the City, in its sole discretion and judgment, determines that there is a need for additional services not contemplated within the Agreement, such services will be performed at the hourly billing rates set forth in the agreement, • EXHIBIT B PROPOSAL TENDER FORM Failure to submit Section 5,Proposal Tender Form,in its entirety and fully executed by the deadline established for the • • recei t of proposals wilt/milt in proposal being deemed non-responsive and being rejected. Proposer affirms that the prices stated on the proposal price form below represents.the entire cost of the items in full accordance with the requirements of this RFP,inclusive of its terms,conditions,specifications and other requirements stated herein, and that no claim will be made on account of any Increase in wage scales, material prices, delivery delays,taxes,insurance,cost indexes or any other unless a cost escalation provision is allowed herein and has been exercised by the City Manager in advance.The Cost Proposal Form(Section 5)shall be completed mechanically or,if manually, In ink. Proposal Tender Forms (Section 5) completed in pencil shall be deemed non-responsive. All corrections on the Proposal Tender Form(Section 5)shall be Initialed. GROUP I.Auditing Services -Prices submitted in proposal package are to be held for the five(5)year contract period. . Auditing Services Please provide fee on an annual basis for each • services listed below: 2014 2015 2016 2017 2018 1 Audit of City's Basic Financial Statement(CAFR) $107,000 $107,000 $110,200 $113,500 $116,900 2 0MB A-133 Single Audits 22000 22,000 22,600 23,200 23,900 • 3 Management Letter in Accordance with the • Rules of the Auditor General of the State of Florida - 1,000 1,000 1,000 1,000 1,000 4 Miami Beach Redevelopment Agency(RDA) 19,000 19,000 19,500 20,100 20,700 5 Miami Beach Parking Systems Funds'(PSF) 19,000 19,000 19,500 20,100 20,700 6 Miami Beach Visitor and Convention Authority (VCA) 17,000. 17,000 _ 17,500 18,000 18,500 • Miami Beach Convention Center as Managed by 7 Global Spectrum(GS) 17,000 17,000 17,500 18,000 18,500 . 8 Safe Neighborhood Parks Single Audit(SNP) 9,000 9,000 9,200 9,500 - 9,800 9 Children's Trust(CT) 9,000 9,000 9,200 9,500 9,800 i! 10 Building Better Communities(BBC)• 8,000 8,000 8,200 •8,500 8,800 $ $228,000 $ $228,000 $ $234,400 $ $241,400 $ $248,600 EXHIBIT C r,. Crowe Horwath. Crowe Horwath LLP independent Member Crowe Horvath International 401 East Las Olas Boulevard,Suite 1100 Fort Lauderdale,Florida 333014230 Tel 954.202.8800 Fax 954.202.8039 • www.crowehorwath.com October 30, 2014 The Honorable Mayor and The Members of the City Commissioners City of Miami Beach 1.700 Convention Center Drive Miami Beach, FL 33139 This letter confirms the arrangements for Crowe Horwath LLP ("Crowe"or"us"or"we"or"our")to provide the professional services discussed in this letter to the City of Miami Beach (the,"Clty"or"you" or"your") for the years ending September 30, 2014, 2015 and 2016 with an option to extend for two (2) additional one (1) year periods. The External Independent Auditing Services Contract No, RFP 2014-276-LR (the "Contract") between Crowe and the City is an integral part of this letter, and its terms are incorporated herein by reference, AUDIT SERVICES Our Responsibilities We will audit and report on the financial statements,of the governmental activities, the business-type activities, the aggregate.discretely presented component units, each major fund, and the aggregate remaining fund information whish collectively comprise the basic financial statements of the City for the period indicated. We will also audit and report on the individual fund financial statements of the Miami Beach Redevelopment Agency, the Miami Beach Parking System Funds, the Miami Beach Visitor and Convention Authority, and the Miami Beach Convention Center, In addition to our report on the financial statements, we plan to evaluate the presentation of the following supplementary information in relation to the financial statements as a whole, and to report on whether this supplementary information is fairly stated, in all material respects, in relation to the financial statements as a whole. • Schedule of expenditures of federal awards and state financial assistance • Combining and Individual Fund Financial Statements and Schedules In addition to our report on the financial statements, we also plan to perform specified procedures In order to describe in our report whether the following required supplementary information is presented In accordance with applicable guidelines. However, we will not express an opinion or provide any assurance on this information due to our limited procedures. ' I • Management's Discussion and Analysis • Budgetary Comparison Schedules • • Schedule of Funding Progress(Pension and/or OPEB) The document will also Include the following additional information that will not be subjected to the auditing procedures applied in our audit of the financial statements, and for which our auditor's report will disclaim an opinion: The Honorable Mayor and The Members of the City Commissioners City of Miami Beach October 23, 2014 Page 2 1 • Introductory Section of the Comprehensive Annual Financial Report • Statistical and Disclosure Section of the Comprehensive Annual Financial Report The objective of the audit is the expression of an opinion on the financial statements, We will plan and perform the audit in accordance with auditing standards generally accepted in the United States of America; the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the Single Audit Act Amendments of 1996; the provisions of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550, Rules of the Auditor General. Those standards require that we obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement whether caused by error or fraud, and that we report on the schedule of expenditures of federal awards and state financial assistance (as rioted above), and on your compliance with laws and regulations and on its Internal controls as required for a Single Audit. Because of inherent limitations of an audit, together with the inherent limitations of internal control, an unavoidable risk that some material misstatements may not be detected exists, even though the audit is properly planned and performed In accordance with applicable standards. An audit is not designed to detect error or fraud that is immaterial to the financial. statements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment including the assessment of the risks that the financial statements could be misstated by an amount we believe would influence the financial 'statement users, An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. In making our risk assessments, we consider internal control relevant to the preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. However, we will communicate in writing to those charged with governance and management concerning any significant deficiencies or material weaknesses in internal control relevant to the audit of the financial statements that we have identified during the audit. We will communicate to management other deficiencies in internal control identified during the audit that have not been communicated to management by other parties and that, in our professional judgment, are of sufficient importance to merit management's attention, We will also communicate certain matters related to the conduct of the audit to those charged with governance, including (1) fraud involving senior management, and fraud (whether caused by senior management or other employees) that causes a material misstatement of the financial statements,_ (2) Illegal acts that come to our attention (unless they are clearly inconsequential) (3) disagreements with management and other significant difficulties encountered in performing the audit and (4) various matters related to the City's accounting policies and financial statements, Our engagement is not designed to address legal or regulatory matters,which matters should be discussed by you with your legal counsel. We expect to issue a written report upon completion of our audit of the financial statements, Our report will be addressed to the City Commissioners of the City. Circumstances may arise in which It is necessary for us to modify our opinion, add an emphasis of matter or other matter paragraph, or withdraw from the engagement, In addition to our report on the financial statements and supplementary information, we plan to issue the following reports: • Independent Auditor's Report on internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with The Honorable Mayor and The Members of the City Commissioners City of Miami Beach October 23, 2014 Page 3 Government Auditing Standards—The purpose of this report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose, • independent Auditor's Report on Compliance for Each Major Federal Program and Report on internal Control Over Compliance--The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133, Accordingly,this report is not suitable for any other purpose. • • Management letter in accordance'with Chapter 10.550, Rules of the Auditor General We will also perform tests of controls including testing underlying transactions, as required by OMB Circular A-133 and the Florida Single Audit Act, to evaluate the effectiveness of the design and operation of controls that we consider relevant to preventing or detecting material noncompliance with compliance requirements applicable to'each of your major federal programs and state projects, We will determine major programs in accordance with OMB Circular A-133 and the Florida Single Audit Act, Our tests will be less in scope than would be necessary to render an opinion on these controls and, accordingly, no opinion will beexpressed. We will inform you of any deficiencies or other matters involving internal control, If any, as required by OMB Circular A-133 and the Florida Single Audit Act, As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will also perform tests of your compliance with applicable laws, regulations, contracts and'grants. However, because of the concept of reasonable assurance and.because we will not perform a detailed examination of all transactions, there is a risk that material errors, irregularities, or illegal acts, including fraud or defalcations, may exist and not be detected by us. The objective of our audit of compliance relative to the financial statements will not be to provide an opinion on overall compliance with such provisions, and we will not express such an opinion. We will advise you, however, of any matters of that nature that come to our attention, unless they are clearly inconsequential. OMB Circular A-133 and the Florida Single Audit Act require that we plan and perform the audit to obtain reasonable assurance about whether you have complied with certain provisions of laws, regulations, contracts and grants. Our procedures will consist of the applicable procedures described in the OMB Circular A-133 and Florida Single Act Compliance Supplements for the types of compliance requirements that could have a direct and material effect on each of your major federal programs and state projects, The purpose of our audit will be to express an opinion on your compliance with requirements applicable to major federal programs and state projects, Because an audit is designed to provide reasonable assurance, ,but not absolute assurance, the audit is not designed to detect immaterial violations or instances of noncompliance. Our audit and work product are intended for the benefit and use of the City only. The audit will not be planned or conducted in contemplation of reliance by any other party or with respect to any specific transaction and is not intended to benefit or influence any other party, Therefore, Items of possible interest to a third party may not be specifically addressed or matters may exist that could be assessed differently by a third party The working papers for this engagement are the property of Crowe and constitute confidential Information. However, we may be requested to make certain working papers available to your oversight agency or grantors pursuant to authority given to them by law, regulation, or contract. If requested, access to such working papers will be provided under the supervision of our personnel, Furthermore, The Honorable Mayor and The Members of the City Commissioners City of Miami Beach October 23, 2014 Page 4 • upon request, we may provide photocopies of selected working papers to your oversight agency or grantors. The working papers for this engagement will be retained for a minimum of three years after the date our report is issued or for any additional period requested by the oversight agency or pass-through entity, If we are aware that a federal or state awarding agency, pass-through entity, or auditee is contesting an audit finding, we will contact the party contesting the audit finding for guidance prior to destroying the working papers. Government Auditing Standards require that we provide you with a copy of our most recent peer review report, which accompanies this letter along with the related letter of comment and responses thereto. The City's Responsibilities • The City's management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America. Management Is also responsible for the design, implementation and maintenance of internal control . relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to error or fraud. The City's management is also responsible for complying with applicable laws, regulations, contrapts and grants and such responsibility extends to identifying the requirements and designing Internal control policies and procedures to provide reasonable assurance that compliance is achieved. Additionally, as required by OMB Circular A-133 and the Florida Single Audit Act, it Is management's responsibility to follow up and take corrective action on reported audit findings and to prepare a summary schedule of prior audit findings, which should be available for our review, and a corrective action plan. Management has the responsibility to adopt sound accounting policies, maintain an adequate and efficient accounting system, safeguard assets, and design and Implement programs and controls to prevent and detect fraud. Management's judgments are typically based on its knowledge and experience about past and current events and Its expected courses of action. Management's responsibility for financial reporting includes establishing a process to prepare the accounting estimates included in the ' financial statements. Management Is responsible for providing to us, on a timely basis, all information of which management is aware that is relevant to the preparation and fair presentation of the financial statements, such as records, documentation, and other matters. Management is also responsible for providing such other additional information we may request for the purpose of the audit and unrestricted access to persons within the City from whom we determine it necessary to obtain audit evidence. Additionally, those charged with governance are responsible for Informing us of their views about the risks of fraud within the City, and their knowledge of any fraud or suspected fraud affecting the City. Management is responsible for adjusting the firiancial statements to correct material misstatements related to accounts or disclosures. As part of our audit process, we will request from management written confirmation concerning representations made to us In connection with the audit, including that the effects of any uncorrected misstatements aggregated by us during the audit are immaterial, both individually and in the aggregate, to the financial statements and to compliance with the requirements of its federal programs and state projects. Management acknowledges the importance of management's representations and responses to our inquiries, and that they will be utilized as part of the evidential matter we will rely on in forming our opinion. Because of the importance of management's representations to an effective audit, you agree to release Crowe and its personnel from any liability and costs relating to our services under this letter attributable to any misrepresentations by management. Management is responsible for the preparation of the supplementary information identified above In accordance with the applicable criteria. As part of our audit process, we will request from management certain written representations regarding management's responsibilities in relation to the supplementary The Honorable Mayor and The Members of the City Commissioners City of Miami Beach October 23, 2014 Page 5 information presented, including but not limited to its fair presentation in accordance with the applicable criteria, the method of measurement and presentation and any significant assumptions or interpretations underlying the supplementary information. In addition, it is management's responsibility to include the auditor's report on supplementary information in any document that contains the supplementary information and that Indicates that we have reported on such supplernentary information. It is also management's responsibility to present the supplementary information with the audited financial statements or, if the supplementary information will not be presented with the audited financial statements, to, make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance by the City of the supplementary Information and the auditor's report thereon. Management is responsible for the preparation of the required supplementary information identified above in accordance with the applicable guidelines. We will request from management certain written representations regarding management's responsibilities in relation to the required supplementary information presented, including but not limited to whether it has been measured and presented in accordance with prescribed guidelines, the method of measurement and presentation and any significant assumptions or Interpretations underlying the supplementary information. At the conclusion of the engagement, it is management's responsibility to submit the reporting package (including financial statements, schedule of expenditures of federal awards and state financial assistance, summary schedule of prior audit findings, auditor's reports, and corrective action plan) along with the Data Collection Form to the designated federal clearinghouse and, if appropriate,to pass-through entities. The Data Collection Form and the reporting package must be submitted within the earlier of thirty days after receipt of the auditor's reports or nine months after the end of the audit period. • OTHER SERVICES Preparation of the following on behalf of the City. Perform a program specific audit of the Children's Trust Fund Program in accordance with the Children's Trust Contractual Agreements, AU-C 935 and Statement on Auditing Standards No, 117. Perform a program specific audit of the Building Better Communities General Obligation Bond funds in accordance with Miami-Dade County.Ordinance 05-47, applicable resolutions, and building Better Communities Administration Rule, Perform a program specific audit of the Safe Neighborhood Parks grant in accordance with Miami-lade County Ordinance 96-115, applicable resolutions, and Safe Neighborhood Administrative Rules. With respect to the above other services, you agree to: assume all management responsibilities including making all management decisions;oversee the service by designating an individual, preferably within senior management, who possesses suitable skill,knowledge, and/or expertise; evaluate the adequacy and results of the services performed; and accept responsibility for the results of the services. • as . it • The Honorable Mayor and The Members of the City Commissioners City of Miami Beach October 23, 2014 Page 6 FEES Our fees for the services covered by this letter and all related terms and conditions are outlined in the Contract. OTHER We will reconfirm the understanding of our engagement annually with an updated engagement letter throughout the term of our contract. • This engagement letter and the Contract reflect the entire agreement between us relating to the services covered by this letter. The headings included in this letter are to assist in ease of reading only; the letter and attachment are to be construed as a single document,with the provisions of each section applicable throughout. This agreement may not be amended or varied except by a written document signed by both parties, It replaces and supersedes any other proposals, correspondence, agreements and understandings, whether written or oral, relating to the services covered by this letter, The agreements of the City and Crowe contained in this engagement letter shall survive the completion or termination of this engagement. if any term hereof is found unenforceable or invalid, this shall not affect the other terms hereof, all of which shall continue in effect as if the stricken term had not been included. This agreement shall be interpreted and construed under,and governed by the Internal laws of the State of Illinois,without regard for choice of law principles, if the terms of this letter and the Contract are acceptable to you, please"sign and date below and return a copy of this letter at your earliest convenience, If you have any questions, please contact John Weber at 813.209.2586. Very truly yours, Crowe Horwath LLP By: I • v ohn C. Weber, Partner I have reviewed the arrangements outlined above and in the Contract, a-. 1abehalf of the City, the terms and conditions as stated. ` �\ ccp::.,.........•• -�� City of Miami Beach " � I% *tINCORP ORATED!* Authorized Representative of the City's a . ' nt; %�; :'4 d Signature: T '�4R�tinn��r++ao Printed Name: iv,e. Title: M QYQ,- ATTEST: Date: Rafae E. Granada,City Clerk MIAMI BEACH PROFESSIONAL SERVICES INSURANCE REQUIREMENTS The provider shall furnish to the Human Resources Department, Risk Management Division, City of Miami Beach, 1700 Convention Center Drive, 3rd Floor, Miami Beach, Florida 33139, Certificate(s) of Insurance which indicate that insurance coverage has been obtained which meets the requirements as outlined below: A. Worker's Compensation and Employer's Liability Insurance for all employees of the provider as required by Florida Statute 440. B. Commercial General Liability on a comprehensive basis in an amount not less than $1,000,000 combined single limit per occurrence and $2,000,000 in the aggregate, for bodily injury and property damage. City,of Miami Beach must be shown as an additional insured with respect to this coverage. C. Professional Liability Insurance in an amount not less .an $5,000,000 with t,e deductible per claim, if any, not to exceed 10% of the limit of liability. 0.25, � 1 The insurance coverage above must include a waiver of subrogation in favor of the City. The inn rance coverage required shall include those classifications, as listed in standard liability insurance manuals,� � which most nearly reflect the operations of the provider. All insurance policies required above shall be issued by companies authorized to do business under the laws of the State of Florida, with the following qualifications: The company must be rated no less than "B" as to management, and no fess than "Class V" as to financial strength, by the latest edition of Best's Insurance Guide, published by A.M. Best Company, Oldwick, New Jersey, or its equivalent, subject to the approval of the "P City Risk Management Division. or The company must hold a valid Florida Certificate of Authority as shown in the latest "List of All Insurance Companies Authorized or Approved to Do Business in Florida" issued by the State of Florida Department of Insurance and are members of the Florida Guaranty Fund.) . i Certificates will indicate no modification or change in insurance shall be made without thirty (30) days advance notice to the certificate holder. CERTIFICATE HOLDER MUST READ: CITY OF MIAMI BEACH 1700 CONVENTION CENTER DRIVE 3rd FLOOR MIAMI BEACH, FL 33139 Compliance with the foregoing requirements shall not relieve the vendor of his liability and obligation under this section or under any other section of this agreement. RFP 2014-276-LR Auditing Services 36 Exhibits: Attachment"A"—Scope of Services Attachment"B"—Fees Attachment"C"—Insurance Requirements Attachment "D" — Request for Proposal No. 2014-276-LR, Addendum No. 1 thereto, and Contractor's response to the RFP • 10 EXHIBIT 'A' SCOPE OF SERVICES _ 1 11 Proposal to Provide Auditing Services City of Miami Beach, Florida 30 Scope 01 Services Proposed Submit detailed information outlining the scope of services that the proposer is proposing. For any scope requirement identified in Appendix C, Minimum Requirements and Specifications, proposer is to clearly articulate how the proposed solution satisfies the scope requirement. Proposers may offer complementary or related services or solutions beyond the stated scope requirements. Understanding of Work to be Performed Based upon our review of the request for proposal document, it is our understanding that Crowe will provide the following services: Prepare and issue an auditor's opinion and conduct an audit of the City's CAFR in accordance with Generally Accepted Auditing Standards (GAAS)and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The examination will be made in accordance with the guidelines prepared by the Governmental Finance Officers Association (GFOA)in order for the City to apply for the Certificate of Achievement for Excellence in Financial Reporting. We will provide guidance with the implementation of Governmental Accounting Standard Board (GASB)statements as necessary. Crowe will issue an audit opinion to the City no later than 180 days following the fiscal year end. Perform an audit in accordance with auditing standards generally accepted in the United States of America;the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States;and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.We will issue an Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance, Independent Auditors' Report on Compliance and Internal Control over Compliance Applicable to Each Major Federal Program and State Project, and Schedule of Findings and Questioned Costs. Crowe will issue the single audit report and data collection form to the City no later than 180 days following the fiscal year end. issue a Management Letter in Accordance with the Rules of the Auditor General of the State of Florida no later than 180 days following the fiscal year end. Prepare and issue an auditor's opinion and conduct an audit of the RDA basic financial statements in accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Crowe will prepare the financial statements,footnotes and schedules and will issue to the City no later than 180 days following the fiscal year end. Prepare and issue an auditor's opinion and conduct an audit of the PSF financial statements in accordance with Generally Accepted Auditing Standards (GAAS)and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Crowe will prepare the financial statements,footnotes and schedules and will- issue to the City no later than 150 days following the fiscal year end. Prepare and issue an auditor's opinion and conduct an audit of the VCA financial statements in accordance with Generally Accepted Auditing Standards (GAAS)and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Crowe will prepare the financial statements,footnotes and schedules and will issue to the City no later than 90 days following the fiscal year end. Prepare and issue an auditor's opinion of the Miami Beach Convention center and conduct an audit of the GS assets, liabilities, revenues and expenses in accordance with Generally Accepted Auditing Standards (GAAS)and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Crowe will prepare the financial statements,footnotes and schedules and will issue to the City no later than 90 days following the fiscal year end. 4 Crowe Horvath. www.crowehorwath.com CA i./' NA! BEACH ©Copyright 2014 Crowe Horvath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 31 Conduct an audit in compliance with the grant agreement, SNP ordinance No. 96-115, applicable resolution and the SNP Administrative Rules. Crowe will prepare the financial statements,footnotes and schedules and will issue to the City no later than 90 days following the fiscal year end. Perform an audit of the Children's Trust Fund Program in accordance with the Children's Trust Contractual Agreements,AU-C 935 and Statement on Auditing Standards No. 117. Crowe will • prepare the financial statements,footnotes and schedules and will issue to the City no later than 90 days following the fiscal year end. Perform an audit of Miami-Dade County for the Building Better Communities Bond Project and the Building Better Communities Bond Project in accordance with Miami-Dade County Ordinance 05- 47, applicable resolutions, and Building Better Communities Administration Rule. Crowe will prepare the financial statements, footnotes and schedules and will issue to the City no later than 90 days following the fiscal year end. . t /).1\ Crowe Horwath. www.crowehorwath.com L'• ' ;'�'' BEACH ©Copyright 2014 Crowe Horwath LLP - EXHIBIT "B" INSURANCE REQUIREMENTS 12 0 ACC:PRDATE(MMtDDIYYYY) EP CERTIFICATE OF LIABILITY INSURANCE 11/17/2014 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR'NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED,the policy(ies)must be endorsed. If SUBROGATION IS WAIVED,subject to the terms and conditions of the policy,certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder In lieu of such endorsement(s). PRODUCER NAMEACT : Jennifer Trudeau HUB International Midwest Limited PHONE .Ext1:312 279 4708 (A/X,No): 55 East Jackson Boulevard E-MAIL Chicago IL 60604 ADDREss:jennifer.trudeau@hubinternational.com INSURER(S)AFFORDING COVERAGE NAIC P INSURER A;Hartford Insurance Group 9424 INSURED CROWCHIZ INSURER B:Hartford Casualty Insurance Co. 9424 Crowe Horwath LLP INSURER c:Twin City Fire Insurance Co. ' 29459 Attn:Cathy Raven 320 East Jefferson Blvd INSURER D South Bend IN 46601 INSURER E: INSURER F: COVERAGES CERTIFICATE NUMBER:643842688 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT,TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR TYPE OF INSURANCE ADDL SUER POLICY EFF POLICY EXP LIMITS LTR INSR WVD POLICY NUMBER (MM/DD/YYYY) (MMIDD/YYYY) A GENERAL LIABILITY 83UUNAR9509 4/1/2014 4/1/2016 EACH OCCURRENCE $1,000,000 COMMERCIAL GENERAL LIABILITY DAMAGE TO RENTED i PREMISES(Ea occurrence) $1,000,000 CLAIMS-MADE X OCCUR MED EXP(Any one person) , $10,000 _ PERSONAL&ADV INJURY $1,000,000 GENERAL AGGREGATE $2,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: PRODUCTS COMP/OP AGG $2,000,000 POLICY n JECTPRO X LOC $ A. AUTOMOBILE LIABILITY 83UUNAR9509 4/1/2014 4/1/2015 COMBINLD SINGLE LIMI T (Ea accident) $1,000,000 ANY AUTO BODILY INJURY(Per person) $ ALL OWNED SCHEDULED BODILY INJURY(Per accident) $ . AUTOS AUTOS X HIRED AUTOS X NON-OWNED PROPERTY DAMAGE. $ AUTOS (Per accident) $ • B X UMBRELLA LIAB ` OCCUR 83RHUAR9168 4/1/2014 4/1/2015 EACH OCCURRENCE $5,000,000 EXCESS LIAB CLAIMS-MADE AGGREGATE $5,000,000, DED X RETENTION$10,000 $ C WORKERS COMPENSATION 83WBBQ4928 4/1/2014 4/1/2015 X WC STATU- OTH- AND EMPLOYERS'LIABILITY YIN TORY LIMITS ER ANY PROPRIETOR/PARTNER/EXECUTIVEI NIA EL.EACH ACCIDENT $1,000,000 OFFICER/MEMBER EXCLUDED? u (Mandatory In NH) E.L.DISEASE-EA EMPLOYEE $1,000,000 • DESCROeNuOFeOP EAIONSbelow E.L.DISEASE-POLICY LIMIT $1,000,000 DESCRIPTION OF OPERATIONS t LOCATIONS/VEHICLES (Attach ACORD 101,Additional Remarks Schedule,If more space Is required) Miami Beach included as additional Insureds under General Liability,when agreed in a written contract,subject to policy terms,conditions and exclusions. ' 51S t/ CERTIFICATE HOLDER • CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN City of Miami Beach, Florida ACCORDANCE WITH THE POLICY PROVISIONS. Risk Manager of the City • 1700 Convention Center Dr.,3rd Floor AUTHO IZED. EPRESENTATIVE Miami Beach FL 33139 'ft204,014� ©1988-2010 ACORD CORPORATION. All rights reserved. ACORD 25(2010105) The ACORD name and logo are registered marks of ACORD CERTIFICATE OF LIABILITY INSURANCE °A11/02/14Y"' THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: if the certificate-holder is an ADDITIONAL INSURED,the policy(les)must be endorsed. If SUBROGATION IS WAIVED,subject to the terms and conditions of the policy,certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CON fACf NAME: Affinity Insurance Services PHONE Fiernc ANo): 200 East Randolph Street, 4th Floor ADDRESS: • Chicago, IL 60601 INS URER(S}AFFORDING COVERAGE NAICd INSURER A: Swiss Re International SE INSURED INSURER a: Crowe Horw ath LLP INSURER C: 330 East Jefferson Blvd. INSURER D South Bend, IN 46624 INSURER E INSURER F: COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT,TERM OR CONDITION OF-ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN,THE'INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCEjD��HY PAIDACLAIMS. LTR TYPE OF INSURANCE INSR WTD POLICY NUMBER (CM SUER MMIDDlYYYY) PAMl0DIYYYY) LIMITS GENERAL LIABILITY EACH OCCURRENCE $ -DAMAGE to RENTED COIAoASRC:AL GENERALLIABIL.+TY PREMISES(Ea cocurranceI $ CLAIMS-MADE n OCCUR MED EXP(Anyone person) S PERSONAL 8 ADV INJURY _ S GENERAL AGGREGATE S GENT.AGOREGATE LIMIT APPLIES PER: PRODUCTS-COMP/OP AGG S —1 POLICY n.5lE^T n LOG $ I — AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT (Ea accdeni) ANY AUTO BODILY INJURY(Per person) S ALL OWNED SCHEDULED BODILY INJURY(Per accident) AUTOS AUTOS HIRED AUTOS PROPERTY DAMAGE _ AUTOS {Per accident/ •• S UMBRELLA LIAR _ OCCUR EACH OCCURRENCE _ 3 EXCESS LIAR. CLAIMS-MADE AGGREGATE S DEC RETENTION$ $ WORKERS COMPENSATION WCSTATU- eTH- ANDEMPLOYERS'LIABILITYYTORY LIMITS ER ANY PROPRIErORIPARTNERIEXECunvE IN EL,EACH ACCIDENT S DFFICERiMEMBER EXCLUDED? N I A (Mandatory in NH) E.L.DISEASE-EA EMPLOYEE $ If yye�s,describe under • DESCRIPTION OP OPERA':IONS below E.L.DISEASE-POLICY LIMIT S A. Professional Liability Insurance MH89956.3 08/25/14 08/25/15 $3,000,000 per claim and in the annual • aggregate DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (Attach ACORD 181,Additional Remarks Schedule,if more space is required) q � CERTIFICATE HOLDER CANCELLATION City of Miami Beach J SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE Finance Department • THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN p ACCORDANCE WITH THE POLICY PROVISIONS. • 1700 Convention Center Drive, 3rd Floor Miami Beach, FL 33139 AUTHORIZED REPRESENTATIVE d 1988-2010 ACORD CORPORATION. All rights reserved. ACORD 25(2010/05) The ACORD name and logo are registered marks of ACORD EXHIBIT "C" ,• FEES - 1 • 1 13 APPENDIX A PROPOSAL TENDER FORM Failure to submit Section,5,Proposal Tender Form, in.its entirety and fully executed by the deadline established forthe receipt of proposals wilt result in propose!being,deemed non-responsive:and being rejected: ,_.. Proposer affirms that the prices stated on the proposal price form below represents the entire cost of the items in full accordance with the requirements of this RFP, inclusive of its terms, conditions, specifications and other requirements stated herein, and that no claim will be made on account of any increase in wage scales, material prices, delivery delays,taxes, insurance, cost indexes or any other unless a cost escalation provision is allowed herein and has been exercised by the City Manager in advance. The Cost Proposal Form (Section 5) shall be completed mechanically or, if manually, in ink, Proposal Tender Forms (Section 5) completed in pencil shall be deemed non-responsive. All corrections on the Proposal Tender Form (Section 5)shall be initialed, GROUP 1. Auditing Services - Prices submitted in proposal package are to be held for the five (5)year contract period. Auditing Services Please provide fee on an annual basis for each services listed below: 2014 )2015 2016 2017 2018 1 Audit of City's Basic Financial Statement(CAFR) $107,000 $107,000 $110,200 $113,500 $116,900 2 OMB A-133 Single Audits 22,000 22,000 22,600 23,200 23,900 3 Management Letter in Accordance with the Rules of the Auditor General of the State of Florida 1,000 1,000 1,o00 1,000 1,000 4 Miami Beach Redevelopment Agency(RDA) 19,000 19,000 19,500 20,100 20,700 5 Miami Beach Parking Systems Funds (PSF) 19,000 19,000 19,500 20,100 20,700 6 Miami Beach Visitor and Convention Authority (VCA) 17,000 17,000 17,500 18,000 18,500 Miami Beach Convention Center as Managed by 7 Global Spectrum (GS) 17,000 17,000 17,500 18,000 18,500 8 Safe Neighborhood Parks Single Audit(SNP) 9,000 9,000 - 9,200 9,500 9,800 9 Children's Trust (CT) 9,000 9,000 9,200 9,500 9,800 10 Building Better Communities (BBC) 8,000 8,000 8,200 8,500 8,800 $ $228,000 $ $228,000 $ $234,400 $ $241,400 $ $248,600 RFP 2014-2761R Auditing Services 33 GROUP II. Additional Services The City reserves the right to negotiate rates for additional services. E3idder'SAffitinatioli . Company: Crowe Horwath LLP Authorized Representative: John G.Weber, Partner Address: 401 East Las Olas Boulevard,Suite 1100,Fort Lauderdale,Florida 33301-4230 Telephone:813.209.2585 Email: john.weber©crowehorwath. m Authorized Representative's Signature: l • RFP 2014-276-LR Auditing Services 34 EXHIBIT "D" REQUEST FOR PROPOSAL (RFP) NO. 2014- 276-LR, ADDENDUM NO. 1 , AND CONTRACTOR'S RESPONSE TO THE RFP 14 Ism s01•Mr. sr■Itta. , .01111111111111911211M..1111101111111[611116 City of Miami Beach, 1700 Convention Center Drive,Miami Beach, Florida 33139,www.iniamibeachfl.cgov PROCUREMENT DEPARTMENT Tel:305.673.7490.Fax:786.394-4075. ADDENDUM NO. 1 REQUEST FOR PROPOSAL (RFP) NO. 2014-276-LR AUDIT SERVICES OCTOBER 7TH, 2014 This Addendum to the above-referenced RFP is issued in response to questions from prospective proposers, or other clarifications and revisions issued by the City. The RFP is • amended in the following particulars only, I. REVISIONS: I A. Appendix D—Special Conditions: 1. TERM OF CONTRACT. The contract shall commence upon the date of notice of award and shall be effective for a period of three (3)five-(5)years, 2. OPTIONS TO RENEW. The City, through its City Manager, will have the option to extend • for two (2)ane-(-)additional one (1) year five(5)y aro period. B. Effective Wednesday, September 10, 2014, the Mayor and City Commission have approved an ordinance repealing Section 2-372 of Division 3, Article VI, of Chapter 2 of the Miami Beach City Code titled "Procedure to provide preference to Miami Beach based vendors in contracts for goods and contractual services". Due to this change, the Miami Beach-based vendor preference specified in the solicitation has been deleted in its entirety and is no longer applicable. C. Proposals submittal address: I' City of Miami Beach Procurement Department 1700 Convention Center Drive 3rd Floor Miami Beach, FL 33139 II. RESPONSES TO QUESTIONS RECEIVED: Q1. Can you please provide the audit fees paid (not necessarily the contract price) for the 2013 audits for each of the entities/services requested under this RFP? • Al. See Exhibit "A", City of Miami Beach Auditing Fees for Fiscal Years 2011, 2012 and 2013. RFP 2014-276-LR Audit Services Addendum No. 1 • Q2. Why is the City looking to change auditors after two (2) years of the then existing contract when there were option years available under the prior contract? A2. The City Commission made this decision. The City Commission preference is that the auditors be rotated every five (5) years. • Q3. On page 3, the proposed oral presentation date is the same date as when the audit • selection committee will evaluate the proposals. Wouldn't that date have to be after the audit selection committee shortlists the firms and notifies them to prepare for a presentation? A3. No, firms will not be shortlisted, presentations will be held on the same date as the evaluation committee meeting to rank proposals. (-- Q4. Q4. Prospective Proposer did not see any mention in the RFP about the use of SBE firms as a subcontractor but we know in the past that the prime firm did use a SBE firm as a subcontractor. Is it recommended to use an SBE firm? Is it looked upon favorable by the audit evaluation committee or the City? A4. This is not a City requirement and does not have any weight in the evaluation. Q5. Who will be the members of the audit selection committee? , • A5. The members of the Audit Committee, who will serve as the Evaluation Committee for this RFP, are as follows: Marc Gidney, Sandy Horwitz, Dana Kaufman, Ronald Starkman, Arthur Unger, Michael Weil, and Commissioner Deede Weithorn. Q6. For each of the requested entities/services requested under this RFP, are any of these handled by the City's Finance Department? That is under the same system of internal control? Or does each entity have its own finance/accounting staff at locations outside of the finance department? A6. Yes, information is listed in the last column of Exhibit "A", City of Miami Beach Auditing • Fees for Fiscal Year 2013. Q7. Can we be provided with a copy of the contract between the City of Miami Beach and McGladrey as related to the annual financial audit for the past three years? If not please provide the fee paid for the annual audit for the past three years. A7. A copy of the 'contract has been made available along with fees in www.PublicPurchase.com, and attached as Exhibit B. Q8. Were any additional fees paid to McGladrey as change orders or out of scope work for the past three years? 1• A8. No additional fees have been paid to McGladrey for the last three (3)years. 2IE age / I RFP 2014-276-LR Audit Services Addendum No. 1 Q9. Per the RFP: Each Proposer shall arrange for Dun & Bradstreet to submit a • Supplier Qualification Report (SQR) directly to the Procurement Contact named herein. No proposal will be considered without receipt, by the City, of the SQR •• directly from Dun &Bradstreet. The cost of the preparation of the SQR shall be the ! responsibility of the Proposer. Per-our Dun & Bradstreet (D&B) Representative, reports can only be sent directly to subscribers. The report cannot be directly sent to the City of Miami Beach. Is it acceptable to provide our D&B SQR Report under separate cover? A9. No, the report cannot be submitted under a separate cover. Prospective proposers are to contact D&B and request that the report be sent to ! • LourdesRodriquez a(�mlamibeachfl,gov. Q10. When will the city be ready with all of its trial balances? A10. The City will be ready by November 30`h, 2014. Q11. When will the City have the Comprehensive Annual Financial Report (CAFR) • ready? Al1. They City should have the Comprehensive Annual Financial Report(CAFR) ready by the end of December. Q12. Is the City's current auditor conducting the audit on their own or are they using subcontractors? i Al2. The current auditor used the firm of Sharpton & Brunson for the last audit as a subcontractor. Q13. The use of the subcontractor was accepted by the City? A13. It was accepted by the City at the time but it's not the City's preference. Q14. Can the City provide the fees for the last three years? I. A14, See Attachment"A", City of Miami Beach Auditing Fees for Fiscal Years 2011, 2012 and 2013. ' - Q15. Does the City expect to be showing a lot of debt in the next couple of years? A15. Yes,-the City will be undergoing the following projects; Convention Center; extension of the Redevelopment Agency (RDA) with Miami-Dade County; additional percentage of Resort Taxes; Parking Bonds; Storm Water Fees; extending Equipment Line of Credit. Q16. The September 30, 2013 report was issued on March 31, 2013. Based on the timeline provided in the pre-proposal teleconference on October 3`d, it seems that the City will have COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) provided to the auditor at the end of December. Is that timeline accelerated from last year or were there unexpected delays in the process. i 3In � RFP 2014-276-LR Audit Services Addendum No. 1 • A16. The timeline for the FY 2014 audit Is for the City to provide the auditors with the statements for audit by the end of December and have the Comprehensive Annual Financial Report(CAFR) issued no later than March 31, 2015. Q17. If there were unexpected delays, can you please describe what they were and what changes will be made to overcome them during the 2014 audit? Does the City expect to issue the single audit report in conjunction with the Comprehensive Annual Financial Report (CAFR) during fiscal year 2014? A17. Yes, however the single audit may be issued later than the Comprehensive Annual Financial Report (CAFR). Q18. Can you clarify the expected responsibility of the City's auditor, who is the auditor for the following entities: City of Miami Beach Florida Employees Retirement Plan; City of Miami Beach Florida Pension Fund for Firefighters; City of Miami Beach Florida Firemen's Relief and Pension Fund; Miami Beach Visitor and Convention Authority; and the Miami Beach Convention Center. • A18, Please see below: •Miami Beach Employees' Retirement Plan; Auditor hired by the Pension Board. Goldstein Schechter Koch Hollywood, FL Miami Beach Policemen's Relief and Pension Fund; Auditor hired by the Pension Board. • Alan R. Swift, CPA, P,A. Palm Beach Gardens, FL • City of Miami Beach, Florida Firemen's Relief and Pension Fund; Auditor hired by the Pension Board. S I Gordon & Company, PA • Coral Springs, FL • City Pension Fund for Firefighters and Police Officers in the City of Miami Beach; Auditor • hired by the Pension Board, Goldstein Schechter Koch Coral Gables, FL Miami Beach Visitor and Convention Authority; under contract with McGladrey and the City. Subcontracted to Sharpton Brunson, but the City prefers that the contracting firm Issue all opinions. Miami Beach Convention Center as managed by Global Spectrum; under contract with • McGladrey and the City. Subcontracted to Sharpton Brunson, but the City prefers that the contracting firm issue all opinions. Q19. Can you confirm what date (or timeframe) the City anticipates having a final the trial balances for us to begin our final fieldwork, (i.e. when are the books considered to be closed and do not anticipate any more journal entries)? A19. The trial balances will be available on or before December 1. 4IP3 .i , RFP 2014-276-LR Audit Services Addendum No. 1 Q20. When have interim or planning procedures historically been performed by the audit firm? When will they be able to be performed for the 2014 audit? A20. This varied from year to year. Interim work was sometimes completed in October. The interim or planning procedures can begin once contract is executed. Q21. Has the City accessed the impact of Governmental Account Standards Board (GASB) No. 65 and 67 on the September 30, 2014 financial statements? A21. Yes. Q22. Have the auditors re.commended journal entries (entries that were either posted or passed on by the City) in any of the last three years? If so, can you please list out what they were for? • A22. Past audit adjustments were for unrecorded liabilities and lease revenues. • Q23. Regarding finding 2013-01, 2013-02, 2013-03 and 2013.04 in the 2013 single audit report, has the City been able to Implement the planned corrective actions? If not, was a different plan put into place? A23. Yes, the City has Implemented the corrective action plan. Q24. I know that the City plans to issue debt in fiscal year 2015; however, are there any material current events that will affect the City during the September 30, 2014 Fiscal Year (lawsuits, debt issuances, changing software, new programs, loss/gain of major funding source...). A24. No material/out of the ordinary events in Fiscal Year 2014. Q25. Does the City except to have a need for a state single audit under Chapter 10.550, • Rules of the Auditor General of the State of Florida in Fiscal Year (FY) 2014? Or, does the City have significant changes in federal assistance (new programs/loss of programs) in fiscal year 2014 from 2013? • A25. At this time the City does not believe it will need a state single audit for FY 2014. Federal grant expenditures in FY 2014 are about the same as FY 2013. Q26. What financial system application is currently utilized? Are there any plans to change to a different provider for the financial system application? A26. Tyler Technologies—Eden. Yes, to Tyler Technologies—Munis. Q27. We understand that independence is important to you, to insure that we are independent in the proposal process can you please tell us who will be on the audit selection committee; so that we may make sure there are no conflicts? We do understand that the cone of silence is in place. A27. Please see response to Question No. 5. 51 ) .� RFP 2014-276-LR Audit Services • Addendum No. 1 Q28. Is McGladrey(the former auditor) allowed to bid on this RFP? A28. No firm(s) is prohibited from submitting a proposal in response to this Request for Proposal. Q29. What aspects of the previous audits with McGladrey did you enjoy? What aspects would you like to change? A29. This question is not relevant to the proposal scope of work. Q30. Can the City provide the audit hours for the last three (3) years (by financial statement and federal single audit)? • A30. The City does not have this information as the contract was based on a lump sum per financial statement. Attached, is the agreement between the City of Miami Beach and McGladrey, LLP, which includes costs. Any questions regarding this Addendum should be submitted in writing to the Procurement • Management Department to the attention of the individual named below, with a copy to the City • Clerk's Office at RafaelGranado miamibeachfl.gov Contact: Telephone: Email: Lourdes Rodriguez 305-673-7000 ext. 6652 LourdesRodriguez@miamibeachfl.gov Proposers are reminded to acknowledge receipt of this addendum as part of your RFP submission. • A ex Dee' -rocurement Director • • . i 61 P .i City of Miami Beach • Fees Services 2013 2012 2011 Other information 1 Audit of City's Basic Financial Statement(CAFR) $ 115,260 $ 113,700 $ 112,551 CMB finance department 2 OMB A-133 Single Audits 23,000 22,735 22,510 CMB finance department/and CMB office of Housing and Community Services.same IC/same enterprise system 3 Management Letter in Accordance with the Rules of the Auditor General of 2,300 2,275 2,252 CMB finance department the State of Florida 4 Miami Beach Redevelopment Agency(RDA) 21,000 20,500 20,260 CMB finance department 5 Miami Beach Parking Systems Funds(PSF) 21,000 20,500 20,260 CMB finance department 6 Miami Beach Visitor and Convention Authority(VCA) 19,000 18,200 18,010 Miami Beach Visitors and Conventions Authority. Separate entity/different system 7 Miami Beach Convention Center 19,000 18,200 18,010 Global Spectrum-Management Company for the MB Convention Center Operations_Separate entity/different system 8 Safe Neighborhood Parks Single Audit(SNP) 9,500 9,500 9,000 CMB finance department 9 Building Better Communities 8,500 8,500 8,000 CMB finance department 10 Children's Trust 9,500 9,500 9,500 CMB finance department/CMB office of Community Services/CMB Parks&Recs.Dept.-same IC/same enterprise system _ m $ 248,060 $ 243,610 $ 240,353 ).-0C • '--1 EXHIBIT "B" PROFESSIONAL SERVICES AGREEMENT b-16 BETWEEN THE CITY OF MIAMI BEACH, FLORIDA AND MCGLADREY, LLP FOR i INDEPENDENT.AUDITING SERVICES THIS AGREEMENT made and entered into this >14 day of_f,'/ 'r;2012,by and • between the CITY OF MIAMI BEACH, FLORIDA (hereinafter referred to as City), a municipal corporation, having its principal offices at 1700 Convention Center Drive, Miami Beach, Florida, 33139, and MCGLADR.EY, LLP (hereinafter referred to as • Auditor-or Consultant), a limited liability partnership authorized to do business in the State of Florida, whose address is 100 NE 3rd Ave., Ste. 300 Fort Lauderdale, Fl. 33301-1155. SECTION 1 DEFINITIONS Agreement, This Agreement between the City and Auditor/Consultant. City Manager -The Chief Administrative Officer of the City. Auditor: For the purposes of this Agreement, Consultant shall be deemed to be an independent contractor, and not an agent or employee of the City. Services: Ail services, work and actions by the Consultant performed _ pursuant to or undertaken under this Agreement, as described in ?' Section 2 and Exhibit"A"hereto, Fee: Amount paid to the Consultant to cover the costs of the Services. •• Term: The Term of this agreement is for the audits of the fiscal years ending September 30, 2012 and September 30, 2013. The fiscal year begins on October 1 and ends on September 30. Risk Manager: The Risk Manager of the City, with offices at 1700 Convention Center Drive,Third Floor, Miami Beach, Florida 33139,telephone number (305) 673-7000, Ext. 6435, and fax number (305) 673- 7023. Proposal Documents: "Proposal Documents"shall mean City Request for Proposals No. 34-11/12 for Auditing Services to examine the City's Basic Financial 1 Statements included in the City's Comprehensive Annual Financial Report (CAFR), Federal Grant Programs and State Projects (OMB A-133 Single Audit), the Miami Beach Redevelopment Agency's. (RDA) Financial Statements, the Parking System Fund's(PSF)Financial Statement,the Miami Beach Visitor and Convention Authority's (VCA) Financial Statement, the • Miami Beach Convention Center Financial Statements, The Building Better •• Communities Bond Program (BBC), The Children's Trust Program (CT), and the Safe Neighborhood Parks and Bond Program (SNP), together with all amendments thereto, issued by the City in contemplation of this Agreement, and the Consultant's proposal in response thereto(Proposal);all of which are incorporated as Exhibit "A" to this Agreement and made a part hereof; provided, however that in the event of an express conflict between the Proposal documents and this Agreement, this Agreement shall prevail, CAFR: Comprehensive Annual Financial Report RDA: Miami Beach Redevelopment Agency PSF: Miami Beach Parking System Fund VCA: Miami Beach Visitors Convention Authority BBC: Building Better Communities CT: Children's Trust SNP: Safe Neighborhood Parks Bond Program •5 [REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK] 2 'SECTION 2 SCOPE OF SERVICES (SERVICES, 2.1 GENERAL The Consultant agrees to provide the City with those certain independent auditing services, as set forth in the Proposal Documents (Exhibit"A" hereto), and as further described in this Section 2. • 2.2 MIAMI i•3>✓ACH A. CAFR — The Auditor will prepare and issue an auditor's opinion and conduct an audit of the City's CAFR in accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, Issued by the Comptroller General of the United States (GAGAS). The examination must be made In accordance with the guidelines prepared by the Governmental Finance Officers Association (GFOA) in order for the City to apply for the Certificate of Achievement for Excellence in Financial Reporting. The examination will include the governmental activities, the business- type activities,the aggregate discretely presented component units,each major fund, and the:aggregate remaining funds of the City,except for the •• • City of Miami Beach Retirement System for Firefighters and Police Officers, the City of Miami Beach Retirement System for General Employees, the City of Miami Beach Retirement System for Unclassified • Employees and Elected Officials,the Firemen's Relief and Pension Fund, and the Policemen's Relief and Pension Fund,which are audited by other auditors. Throughout the Term of this Agreement, the Auditor shall Issue an audit opinion to the City no later than 180 days following the end of the City's fiscal year ends during the Term herein. For the purpose of this Agreement, a City's fiscal year shall commence on October 1st, and end on September 30th of the following year, Jr In order to comply with the delivery dates outlined above and throughout • this Agreement, prior to the start of each year's audit, the Auditor shall .I ` meet with the City to mutually agree upon and establish dates for which the CIty will close its books and records, Including the recording of all significant journal entries,and making available Its books and records for audit. • The Auditor shall issue an independent Auditors' Report on Internal Control over Financial Reporting and on Compliance, The Auditor will provide guidance with the implementation of 3 Governmental Accounting Standard Board (GASB) statements, as necessary, B, OMB A-133 Single Audit —. The Auditor shall perform an audit in • accordance with OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and Chapter 10.550, Rules • of the Auditor General of the State of Florida, In addition to the Auditor's report described in Section 2.2(A), the Auditor will issue an independent Auditors' Report on Compliance and Internal Control over Compliance Applicable to each major Federal program and • State project, and Schedule of Findings and Questioned Costs, The City will prepare the Schedule of Expenditure of Federal Awards and State Financial Assistance. The Auditor shall issue the single audit report and data collection form to the City no later than 210 days following the end of the City's fiscal year end during the Term of this agreement. - This is condition upon the City closing its books and records, including the I recording of all significant journal entries, arid preparing a complete and accurate schedule of expenditures of Federal awards and State financial assistance, and making available its books and records to Auditor for audit by December 1s1, of each year of the Term of this Agreement, as noted in Section 4.3, Any delays in the City's closing of Its books and records will extend the delivery date, referred to above, proportionately. C. Management Letter in Accordance with the Rules of the Auditor General of the State of Florida— r The Auditor shall issue a management letter to address the following and any subsequent amendments made by the Auditor General: ▪ The City's compliance and internal controls or schedule of findings and questioned costs, whether or not inaccuracies, shortages, defalcations, fraud and/or violations laws, rules, regulations, and contractual provisions reported in the preceding annual financial audit report have been corrected. • The City's compliance and Internal controls or schedule of findings and questioned costs, whether or not recommendations made in the preceding annual financial audit report have been followed. • Provisions of Section 218,415, Florida Statutes, regarding the City's investment of public funds, • The City's compliance and Internal controls or schedule of findings and questioned costs: (1) violations of laws, rules, regulations, and contractual provisions that have occurred, or are likely to have 4 occurred; (2) improper or illegal expenditures; (3) improper or inadequate accounting procedures (for example, the omission of required disclosures from the financial statements); (4) failures to properly record financial transactions; and (5) other inaccuracies, shortages, defalcations, and instances of fraud discovered by,or that come to the attention of, the Auditor. • Section 218.503(1), Florida Statutes, regarding financial emergencies, • The annual financial report for the City filed with the Department of Financial Services pursuant to Section 218.32, Florida Statutes. . The name or official title and legal authority for the primary government and each component unit of the reportingentity be disclosed In the management letter, unless disclosed in the notes to the,financial statements, The Auditor firm shall issue a management letter to the City no later than 210 days following the end of the City's fiscal year ends during the Term of this Agreement. D. RDA -- The City Issues stand-alone basic financial statements for the RDA, a blended component unit of the City. The Auditor will prepare and issue an auditor's opinion and conduct an audit of the RPA basic financial statements in accordance with GAAS and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The financial statements,footnotes and supplementary information are to be prepared by the City. The Auditor shall issue the RDA auditor's report and the RDA basic financial statements to the City no later than 180 days following each fiscal year end for the Term of this agreement. ; E. PSF -- The City issues stand-alone financial statements for the PSF, a major enterprise fund of the City. The Auditor will prepare and issue an auditor's opinion and conduct an audit of the PSF financials statements in accordance with GAAS and the standards applicable to financial.audits • contained In Government Auditing Standards, issued by the Comptroller General of the United States. • The financial statements,footnotes and supplementary information are to be prepared by the City. The Auditor shall issue the Auditor's report and PSF basic financial statements to the City no later than 210 days following the end of the PSF fiscal year ends, during the Term of this Agreement. F. VCA — The City issues stand-alone basic financial statements for the VCA, a discretely presented component unit of the City, The Auditor will prepare and issue an auditor's opinion and conduct an audit of the VCA financial statements In accordance with GAAS and the standards applicable to financial audits contained in Government Auditing 5 Standards, issued by the Comptroller General of the United States. The financial statements,footnotes and supplementary information are to be prepared by the City.The Auditor shall issue the VCA basic financial statements to the City no later than 90 days following the end of each of the City's fiscal years during the Term herein. G. Special Purpose Financial Statements — The City issues special purpose financial statements for the Miami Beach Convention Center.The Auditor will prepare and issue an auditor's opinion and conduct an audit of the special purpose financial statements in accordance with GAAS and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, The financial statements,footnotes and supplementary information are to be prepared by the City, The Auditor shall issue_the special purpose financial statements to the City no later than 90 days following the end of • each of the City's fiscal year during the Term herein. ' H. SNP —The SNP governing.Miami-Dade County Ordinance No, 96-115 • requires that'an annual independent audit of the schedule of expenditures • of the Safe Neighborhood Parks Bond Projects of the City of Miami Beach, Florida, be conducted in accordance with GAAS and GAGAS. The schedule of expenditures and the related notes are to be prepared by •the City. The Auditor shall issue the independent auditor's report to the City no later than 90 days following the end of each City fiscal year during the Term herein, L BBC —The BBC governing Miami-Dade County Ordinance No. 05-047 requires that an annual independent audit of the schedule of expenditures of the Building Better Communities Bond Projects of the City of Miami Beach, Florida, be conducted in accordance with GAAS and GAGAS. The schedule of expenditures'and the related notes are to be prepared by the City, The Auditor shall Issue the independent auditor's report to the City no later than 90 days following the end of each City fiscal year during the Term herein, J. CT — The Children's Trust grant agreements requires that an annual independent audit of the schedule of expenditures of the Children's Trust Grant Program of the City of Miami Beach, Florida, be conducted in accordance with GAAS and GAGAS, The schedule of expenditures and the related notes are to be prepared by the City, The Auditor shall issue the independent auditor's report to the City no later than 90 days following the end of each City fiscal year during the Term herein. 6 SECTION 3 COMPENSATION • 3.1 FEE Consultant shall be compensated for the Services, as set forth in the Proposal Documents, and more specifically Section 2 and Exhibit"A" herein. Auditor shall only be compensated for work performed and completed pursuant to the terms of this Agreement, in accordance with the Fee Compensation Schedule, attached and incorporated as Exhibit"B" hereto. 3.2 EQUAL BENEFITS FOR DOMESTIC PARTNERS Consultant acknowledges that is required to comply with all applicable provisions of the City Ordinance No.20053494,which requires certain City,consultants to provide equal benefits for domestic partners (the Ordinance). This Ordinance applies to all employees of a consultant who work within the City limits of the City of Miami Beach, Florida, and the consultant's employees located in the United States, but outside of the City of Miami Beach limits, who are directly performing work on a contract within the City of Miami Beach. A copy of the City's Ordinance is attached as Exhibit "C" hereto. Notwithstanding the preceding,it shall be Consultant's sole responsibility and obligation to familiarize itself with this Ordinance, as well as any subsequent amendments thereto. 3.3 ADDITIONAL SRV(CES TO BE SPECIFICALLYREQUESTED BY THE CITY -- In the event that, during the Term of the Agreement,the City, In Its sole discretion and judgment,determines that there is a need for additional services not contemplated within this Agreement, such services will be performed at the following hourly billing rates, which will be adjusted each year, commensurate to each year's compensation Increase as set forth in Exhibit"B": Hourly Billing Rates Partner $300 Director 250 Manager 200 Senior 140 Staff 100 Additional services will only be performed by the Consultant following receipt of written authorization from the City, which authorization must be secured prior to commencement of said service(s), 3.4 INVOICING The Auditor shall be entitled to invoice monthly for the portion(s) of Services completed. Upon review and approval of the Invoice by the City, the City will make its i best efforts to pay the Auditor within thirty (30) days of the receipt of invoice. 7 SECTION 4 GENERAL PROVISIONS 4.1 RESPONSIBILITY OF THE CONSULTANT With respect to the performance of the Services, the Consultant shall exercise that degree of skill, care, efficiency and diligence normally exercised by recognized professionals with respect to the performance of comparable Services. In its performance of the Services, the Consultant shall comply with all applicable laws, ordinances, and regulations of the City, Miami-Dade County, State of Florida, and Federal Government. 4.2 PUBLIC ENTITY CRIMES A State of Florida Form FUR 7068, Sworn Statement under Section • 287.133(3)(a) Florida Statute on Public Entity Crimes shall be filed with the City's Procurement Division, prior to commencement of the Services herein, 4.3 TERM OF AGREEMENT(TERM), • The term of this Agreement shall be for a term of two(2)years,commencing with the City Fiscal Year ending on September 30, 2012, and,ending with the Fiscal Year ending on September 30, 2013, 4.4 INDEMNIFICATION The Auditor shall protect, defend, reimburse, indemnify,,and hold harmless the City and the City's officers, agents, and employees free and harmless from and against any and all claims, losses, penalties, damages,settlements, costs, charges,attorneys' j or other professional fees, or other expenses or liabilities of every kind and character arising out of or relating to any and all claims, liens, demands, obligations, actions, or proceedings directly or indirectly arising out of or resulting from the mistakes or negligence, gross negligence, willful, and wanton acts and the performance of this Agreement by the Auditor, or its respective officers, employees, agents, servants, partners, or principals. The Auditor agrees to investigate, respond, adjust, and provide a defense for any such claims, demands,and actions, at the Auditor's sole expense and agrees to bear and remain liable for all such other costs and expenses relating thereto, even if such claim is groundless,false,or fraudulent, Notwithstanding the foregoing,the Auditor's indemnity shall not extend to liability for damages to persons or property to the extent such damage was caused by the sole and/or gross negligence of the City. 4.6 TERMINATION, SUSPENSION AND SANCTIONS 4.5.1 Termination for Cause If the Consultant shall fail to fulfill,in a timely manner, or otherwise violates any of the covenants, agreements, or stipulations material to this'Agreement, the City shall 8 thereupon have the right to terminate this Agreement for cause. Prior to exercising its option to terminate for cause, the City shall notify the Consultant of its violation of the particular terms of this Agreement and shall grant Consultant ten(10)days to cure such default. If such default remains uncured after ten (10) days, the City, upon three (3) days' notice to Consultant, may terminate this Agreement, and the City shall be fully discharged from any and all liabilities, duties and terms arising out of or by virtue of this Agreement. 4.5.2 Termination for Convenience of City The City may also, for its convenience and without cause, terminate this Agreement at any time during the Term hereof, by giving written notice to Consultant of such termination, which shall become effective thirty(30) days following receipt by the Consultant of the written termination notice. Upon being notified of the City's election to terminate, the Auditor shall refrain from performing further Services or incurring additional expenses under the terms of this Agreement. In thatevent, all finished or unfinished documents and any and all other materials, work, etc., prepared and/or maintained by Consultant as a result of its Services pursuant to this Agreement, shall • be properly assembled and delivered to the City, at Consultant's sole cost and expense. If the Agreement is terminated by the City as provided in this subsection, Consultant shall be paid for any Services satisfactorily performed, as determined by the City and at its discretion, up to the date of termination, provided, however, that as a condition precedent to such payment, Consultant shall deliver any and all documents, materials, etc. to the City, as required herein. 4.5.3 'Termination for Insolvency The City also reserves the right to terminate the Agreement in the event the Consultant Is placed either in voluntary or involuntary bankruptcy or makes an assignment for the benefit of creditors. In such event,the right and obligations for the parties shall be the same as provided for in Section 4.5.2. 4.5.4 Sanctions for Noncompliance with City Ordinances and/or Nondiscrimination Provisions of Agreement 1 j in the event of the Consultant's noncompliance with any City ordinance and/or the nondiscrimination provisions of this Agreement, the City shall impose such sanctions as the City, Miami-Dade County, and/or the State of Florida, deem applicable and may determine to be appropriate including, but not limited to, withholding of payments to the Consultant under the Agreement until the Consultant complies, and/or cancellation, termination or suspension of the Agreement. 4.6 CHANGES AND ADDITIONS Changes and additions to the Agreement shall be directed by a written amendment signed by the duly authorized representatives of the City and Consultant, No alteration, change, or modification of the terms of this Agreement shall be valid unless amended in writing,signed by both parties hereto,and,as necessary, as approved by the' City Manager and/or City Commission (as required), 9 4,7 INSURANCE REQUIREMENTS • Consultant shall obtain, provide and maintain during the term of the Agreement the following types and amounts of insurance which shall be maintained with insurers licensed to sell insurance in the State of Florida and have a B+ or higher rating in the latest edition of AM Best's Insurance Guide. (Any exceptions to these requirements must be approved by the City's Risk Management Department prior to implementation • of same): 1, Commercial General Liability: A policy including, but. not limited to, comprehensive general liability including bodily Injury, personal injury, property damage in the amount of a combined single limit of not less than $1,000,000 Coverage shall be provided on an occurrence basis. The City of Miami Beach must be named as certificate holder and additional insured on policy. 2. Worker's Compensation: A policy of Worker's Compensation and Employers Liability Insurance in accordance with State worker's compensation laws as required per Florida Statutes. 3, Professional Liability: A policy including but not limited to error and omissions with a limit of not less than $1,000,000, Said policies of insurance shall be primary to and contributing with any other insurance maintained by the Consultant or City,and shall name the City of Miami Beach and its officers, agents and employees as an additional insured. Policies cannot be cancelled without thirty (30) days prior written notice to the City. • The Consultant shall file and maintain certificates of all insurance policies with the City's Risk Management Department showing said policies to be in full force and effect at all times during the Term of the Agreement. No work shall be done by Consultant during any period when it is not covered by insurance as herein required. Such insurance shall be obtained from brokers or carriers authorized to transact r' insurance business in Florida and satisfactory to City. If any of the required insurance coverages contain aggregate limits, or apply to other operations of the Consultant outside the Agreement, Consultant shall give City prompt written notice of any incident, occurrence, claim settlement or judgment against such Insurance which may diminish the protectionsuch insurance affords the City. The Consultant shall further take immediate steps to restore such aggregate limits or shall provide other insurance protection for such aggregate limits. 4.7.1 Failure to Procure Insurance Consultant's failure to procure or maintain required insurance coverage shall constitute a material breach of Agreement under which City may, at its sole option, immediately terminate the Agreement. 4.8 ASSIGNMENT, TRANSFER OR SUBCONTRACTING The Consultant shall not subcontract, assign, or transfer any work under this 10 Agreement In whole or In part, without the prior written consent of the City. 4.9 SUB•CONSULTANTS The Consultant shall be liable for the Consultant's services, responsibilities and liabilities under this Agreement and the services, responsibilities and liabilities of any and all sub-consultants, and any other person or entity acting under the direction or •• control of the Consultant Including without limitation, any and all temporary personnel •• provided in the City pursuant to the terms and conditions of the Agreement. When the term "Consultant" is used In this Agreement, it shall be deemed to include any sub- • consultants and any other person or entity acting under the direction or control of Consultant. • 4.10 EQUAL EMPLOYMENT OPPORTUNITY In connection with the performance of this Agreement, the Consultant shall not • discriminate against any employee or applicant for employment because of race, • color,'religion, ancestry, sex, age, and national origin, place of birth, marital status, physical handicap, or sexual orientation, The Consultant shall take affirmative action • to ensure that applicants are employed and that employees are treated during their employment without regard to their race, color, religion, ancestry, sex, age, and • national origin, place of birth, marital status, disability, or sexual orientation. 4.11 CONFLICT OF INTEREST The Consultant agrees to adhere to and be governed by the Metropolitan Miami-Dade County Conflict of Interest Ordinance (No. 72-82), as amended; and by the City of Miami Beach Charter and Code,which are incorporated by reference herein as if fully set forth herein, in connection with the Agreement conditions hereunder. • The Consultant covenants that it presently has no interest and shall not acquire any interest, direct or indirectly which should conflict in any manner or degree with the performance of the Services. The Consultant further covenants that in the performance of this Agreement, no person having any such Interest shall knowingly be employed by the Consultant, No member of, or delegate to, the Congress of the United States shall be admitted to any share or part of this Agreement or to any benefits arising therefrom. 4.12 NOTICES All notices and communications in writing required or permitted hereunder may be delivered personally to the representatives of the Consultant and the City listed below or may be mailed by registered mail, postage prepaid(or airmailed if addressed to an address outside of the city of dispatch). Until changed by notice in writing, all such notices and communications.shall be addressed as follows: I 11 TO CONSULTANT: McGladrey& Pullen, LLP Attn: Bob Feldmann 100 N,E. Third Avenue, Suite 300 Fort Lauderdale, FL 33301 (954) 462-6300 TO CITY: City of Miami Beach Attn: Patricia Walker Chief Financial Officer • 1700 Convention Center Drive Miami Beach, Florida 331,39 (305) 673-7574 • • Notices hereunder shall be effective; if delivered personally,on delivery;if mailed to an address In the city of dispatch,on the day following the date mailed; and if mailed to an address outside the city of dispatch on the seventh day following the date mailed. • 4.13 ,LITIGATION JURISDICTIONNENUE This Agreement shall be enforceable in Miami-Dade County, Florida, and If legal action is necessary by either party with respect to the enforcement of any or all of the •• terms or conditions herein, exclusive venue for the enforcement of same shall Ile in Miami-Dade County, Florida. • BY ENTERING INTO THIS AGREEMENT, THE CONSULTANT AND CITY EXPRESSLY WAIVE ANY RIGHTS EITHER PARTY NIAY HAVE TO A TRIAL BY JURY OF ANY CIVIL LITIGATION RELATED TO, OR ARISING OUT OF, THIS AGREEMENT. 3 1 4.14 ENTIRETY OF AGREEMENT This Agreement and all exhibits hereto Including,without limitation,the Proposal Documents, shall embody the entire Agreement and understanding between the parties hereto, and there are no other agreements and understandings, oral or written with reference to the subject matter hereof that are not merged herein and superceded hereby. The Proposal Document and the Auditor's engagement letter, included in Exhibit"A"and "D", are hereby Incorporated by reference Into this Agreement provided, however, that in the event of an express conflict between the Auditor's engagement ,! letter and this Agreement, the Agreement shall prevail. • 4.15 COMPLIANCE WITH APPLICABLE LAWS The Consultant, its subConsultants, agents and employees, including with out limitation, any and all temporary personnel assigned to the City pursuant to this Agreement, shall comply with all applicable Federal, State, Miami-Dade County and City laws,and with all applicable rules and regulations promulgated by local, state and national boards,bureau 12 and agencies as they relate to the Agreement and/or the provision of Services hereto, i [REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK] 1 , j � f 13 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their appropriate officials, commencing on the last date of execution of the agreement by the parties hereto, FOR CITY: CITY OF MIAMI BEACH, FLORIDA ATTEST: • By: Rafael E. Granaclo a i Herrer• Bower City Clerk _�.�........4% Mayor •/0-; 6- -�'' ! ' °�►,,, /0-d6-12., Date ? COMMISSION ITEM SUMMARY 1, Condensed Title: i. A Resolution Accepting The City Manager's Recommendation Pertaining To The Ranking Of Firms For Auditing Services,Authorizing The Administration To Enter Into Negotiations With The Top-Ranked Firm, McGladrey, LLP,And If Unsuccessful,With The Second-Ranked Firm,Cherry, Bekaert&Holland,LLP, And Authoriz.p The Mayor And City Clerk To Execute An ,reement For Auditing seryloes, Key Intended Outcome Supported: Improve the City's Overall Financial Health and Maintain Overall Bond Rating ., issue: Shall the Commission Adopt the Resolution? Item Summary/Recommendation: r The purpose of the audit is to examine the City's Basic Financial Statements included in the City's { Comprehensive Annual Financial Report(OAFS), The engagement shall also Include the Single Audit, PSF,VCA, Convention Center, BBC,CT, and SNP audits,for a term of up to five(5)years. II The engagement will be for five (5) fiscal years ending September 30, 2016. Additional years of the s' engagement or additional auditing services would be subject to the approval of the Audit Committee and confirmation by the City Commission annually, j • On March 21, 2012, the City Commission authorized the issuance of an RFP to solicit proposals for ; auditing services for the City of Miami Beach. RFP No. 34-11/12 was Issued on April 20, 2012, with _ , ; notifications sent to over 35 firms,This outreach resulted in the receipt of five(5)proposals from Cherry, Bekaert.& Holland, LLP; Crowe Horwath, LLP,; Keefe, McCullough & Co., LLP; Marcum, LLP; and I McGladrey, LLP, : + , A resolution was passed at the June 6,2012,Commission meeting selecting Crowe Horwath,LLP to audit • the processes of certain regulatory departments and divisions in the City,and therefore could no longer be considered for this project,as this would create a conflict of interest. An Evaluation Committee appointed by the City Manager reviewed and discussed the proposals, then • scored and ranked the four(4) remaining proposals, Based on the published evaluation criteria,the Committee unanimously ranked McGladrey,LLP.as the top-ranked firm,The Committee further ranked I Cherry, Bekaert&Holland, LLP. as the second-ranked firm. • ADOPT THE RESOLUTiON Advisory Board Recommendation: • Finance and Citywide Protects Committee,January 10,2012:Recommended the issuance of an RFP Financial Information: • Source of '• /Would Account • Approved Funds: . Professional Services Accounts: I , • f.41 .,1 $168,727,39 011,93.10,000312 , . I i �2 18,550,30 • 440.0442,0b0312 3 20,867.80 168.1085.000312 , 20,867.80 480.0461,000312 • k 18,550,30 160,4300,000312 OBPI Total $247,563.50 Financial Impact Summary:Amounts are included In the FY2012/2013 proposed operating budget. , City Clerk's Office Legislative Tracking: RJA1 • Si.n-Offs: A eparkment 15irectairr :sola. ° Gitiy t'mow. Oil la .•er if GE POW �� KGB T.1Ac3ENDA1201217-18,121AudllIng Servloea Summary.doo ; M1AMIBEACH A><aidVVbik 1"f'Lyfu1 MIAMIBEACH City of Miami Booth,1700 Convention Center Drive,Warn'Beach,Florida 33139,www,miamiboochfl,cgov COMMISSION MEMORANDUM TO: Mayor Matti Herrera Bower and Members of the City Commis ion FROM: Kathie C, Brooks, knterlm City ManagerM + DATE: July 18,2012 • SUBJECT A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH,FLORIDA,ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER PERTAINING TO THE RANKING OF FIRMS, PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO, 34.11/12 FOR AUDITING SERVICES TO EXAMINE THE CITY'S BASIC FINANCIAL STATEMENTS INCLUDED IN THE CITY'S COMPREHENSIVE ANNUAL FINANCIAL REPORT(CAFR),FEDERAL GRANT PROGRAMS AND STATE PROJECTS (OMB A-133 SINGLE AUDIT), THE MIAMI BEACH REDEVELOPMENT • AGENCY'S BASIC FINANCIAL STATEMENTS (RDA), THE PARKING SYSTEMS FUND'S (PSF) FINANCIAL STATEMENTS, THE MIAMI BEACH VISITOR AND CONVENTION AUTHORITY'S (VCA) FINANCIAL STATEMENTS, THE MIAMI BEACH CONVENTION CENTER FINANCIAL STATEMENTS,THE BUILDING BETTER COMMUNITIES BOND PROGRAM • (BBC)THE CHILDREN TRUST GRANT PROGRAM (CT), AND THE SAFE NEIGHBORHOOD PARKS AND BOND PROGRAM (SNP);AUTHORIZING THE ADMINISTRATION TO ENTER INTO NEGOTIATIONS WITH THE TOP- RANKED FIRM,MCGLADREY,LLP,,AND SHOULD THE ADMINISTRATION NOT BE ABLE TO NEGOTIATE AN AGREEMENT WITH THE TOP•RANKED FIRM,AUTHORIZING THE ADMINISTRATION TO NEGOTIATE WITH THE SECOND-RANKED FIRM, CHERRY, BEKAERT & HOLLAND, LLP.; AND • FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT UPON THE C OMPLETION OF SUCCESSFUL NEGOTIATIONS • • BY THE ADMINISTRATION,WITH SUCH AGREEMENT HAVING A FIVE(6) YEAR TERM,THROUGH AND INCLUDING THE AUDIT OF FISCAL YEAR ENDING SEPTEMBER 30, 2016, WITH ADDITIONAL YEARS OF THE ENGAGEMENT TO BE SUBJECT TO THE AUDIT COMMITTEE AND CONFIRMATION BY THE CITY COMMISSION ANNUALLY. MINISTRAATION REC_OM.MI NDATION Adopt the Resolution. • K>;Y.INTENPED OUTCOME Improve the City's Overall Financial Health and Maintain Overall Bond Rating FUNDING AND ESTIMATED AMOUNT Fees are not to exceed $250,000 for 2012 audit fees to be paid In 2013, Amounts are included In the FY2012/2013 proposed Operating Budget, Estimated 206 City Commission Memorandum-Auditing Sarvlces July 18,2012 Page 2of6 Service Funding Source Expenditure Audit of City's Basic Financial Statement(CAFR) 011.9310.000312 $115,927,53 CMB A-133 Single Audits 011.9310.000312 23,185.30 Management Letter in Accordance with the Rules of the Auditor General of the State of Florida 011.9310,000312 2,319.56 Safe Neighborhood Parks Single Audit(SNP) 011.9310.000312 9,270.00 ' Building Better Communities 011,9310,000312 8,240.00 • Children's Trust 011.9310,000312 9,785.00 Miami Beach Redevelopment Agency(RDA) 168.1985,000312 20,867,80 Miami Beach Parking Systems Funds (PSF) 480,0461.000312 20,867,80 • Miami Beach Convention Center and Jackie Gleason Theater-of the Performing Arts,as Managed by Global Spectrum 440,0442.000312 18,550,30 Miami Beach Visitor and Convention Authority(VCA) 160,4300.000312 18,550.30 $247,563.59 NLYSiS/BCGROUND The purpose of the audit is to examine the City's Basic Financial Statements Included in the City's Comprehensive Annual Financial Report(CAFR),The engagement shall also include the Single Audit,PSF,VCA,Convention Center, BBC,CT and SNP audits of the year ended September 30,2012,through and including the year ended September 30, 2016.Additional years of the engagement would be subject to the approval of the.Audit Committee and confirmation by the City Commission annually. On. July 12, 2006, the Mayor and City Commission authorized the Administration to execute an Agreement, pursuant to RFP No, 23-05/05, with McGladrey & Pullen for Auditing Services.The Agreement term was for five(5)years, commencing from the City Fiscal Year ending on September 30, 2006, and ending on September 30, 2010, with renewal options for five(5)additional one(1)year terms,at the sole discretion of the City, A resolution was approved by the Mayor and Commission at Its September 14, 2011 meeting, to exercise the first year renewal option for the audit of fiscal ending on September 30,2011. The Mayor and City Commission at its March 21, 2012, meeting authorized the Administration to issue an RFP to examine the City's Basic Financial Statements included in the City's Comprehensive Annual Financial Report(CAFR).The engagement shall also • include the Single Audit, PSF,VCA,Convention Center, BBC,CT,and SNP audits,for a term of five(5)years with additional years subject to the approval of the Audit Committee • and confirmation by the City Commission, RFP PROCESS ' • RFP No.3411/12 was issued on April 20,2012,and the Procurement Division e-malled, as well as uploaded the RFP,to BidNet,sending notifications to over 35 firms. A non • - mandatory pre-proposal meeting to provide information and respond to questions from prospective proposers was held on May 1,2012, This outreach resulted In the receipt of five (5) proposals on the due date of May 18, 2012,from the following firms: • • Cherry, Bekaert&Holland, LLP, • • Crowe Horwath,LLP, • Keefe,McCullough& Co., LLP, • Marcum, LLP. • McGladrey, LLP. 207 City Commission Memorandum Auditing Services July,18,2012 Page 3 of 5 On June 7,2012,the City Manager via Letter to Commission No,154-2012 appointed an Evaluation Committee (the'Committee"), consisting of the following Individuals: Marcella Paz-Cohen Resident and Leadership Academy Graduate Larry Herrup Resident, CPA,and Budget Advisory Committee Member Kathaleen Smarsh Resident and Leadership Academy Graduate James Sutter Internal Auditor, CMB Allison Williams Chief Accountant, CMS Alternates: Georgie Echert Assistant Finance Director,CMS Mark Coolidge Senior Auditor, CMS ' • Melvin Grazer Resident and Leadership Academy Graduate The Committee convened on June 20,2012,and was provided with an overview of the project,information relative to the City's Cone of Silence Ordinance,and recent changes to the Government in the Sunshine Law. Larry Herrup was nominated as the Committee chairperson. The chairperson requested Patricia D. Walker, Chief Financial Officer for the City, to provide an overview to the Committee on the current relationship with McGladrey, LLP, and the perception of the strengths of other proposers, The overall feedback from the Finance Department pursuant to'McGladrey's performance Is positive. The Committee was subsequently informed that a resolution was passed at the June 6, 2012, Commission meeting selecting Crowe Horwath, LLP, to audit the processes of certain regulatory departments and divisions in the City,and therefore could no longer•be i ! considered for this project,as this would create a conflict of Interest. The Committee was instructed to score and rank the remaining four (4) proposals pursuant to the evaluation criteria established in the RFP,which was as follows,for a total potential of 100 points: ▪ Firm's experience in Auditing Services -20 points n Qualifications of Project Team-20 points • Methodology and approach-10 points o Previous Similar Projects-15 points W References Provided by Prior'Clients-15 points • ® Fees-20 points Additional points were allocated, If applicable,pursuant to,the following ordinances: � 1 LOCAL PREFERENCE: The Evaluation Committee will assign en additional five (6) points to Proposers,which are,or include as part of their proposal team,a Miami Beach- based vendor as defined In the City's Local Preference Ordinance, VETERANS PREFERENCE: The Evaluation Committee will assign an additional five(5) points to Proposers,which ere,or include as part of their proposal team,a small business concern owned and controlled by a veteran(s) or a service-disabled veteran business enterprise, as defined in the City's Veterans Preference Ordinance, • 208 City Coinmission Memorandum--Auditing Services July 18,2092 i I Page 4 of 5 The Committee discussed the proposals and proceeded to score and rank as follows; i t ,4414, yk- v (1, Total • , p1, `` 1',(ti't04;I �� az- Herrup Smarah Sutter Williams <ikr• Ranking L' =„r•'00,440•11 Cohen It of Finn McGladrey,LLP. 1 (92) 1 (83) 1 (4) 1 (88) 1 (89.5) por 5 Cherry,Bekaert& 5.n Holland,LLP, 2(91) 2(81) 3(91) 4(78) 2(87) 14 13 Marcum LLP 3 89 3 72 2 92 2 86 3 83.68 kti 13 Keefe,McCullough • &Co.,LLP. 4(88) 4(68) 4(89) 3(83) 4(82.90) f 19 I ; The Committee unanimously ranked McGladrey, LLP as the top-ranked firm. Also, although tied with Marcum, LLP for a total score of thirteen (13), Cherry, Bekaert & Holland, LLP received the majority of second place scores, therefore the Committee passed a motion to rank McGladrey as the top-ranked and Cherry,Bekaert&Holland as the second-ranked firms, As Committee chairperson,Larry Herrup articulated that he would recommend changing the Engagement Partner periodically for ongoing business between the City and McGladrey, so as to maintain objectivity. McGladrey has been the Incumbent auditor for the City for the past six(6)years.There have been no issues with the performance of the firm relative to audits performed for Miami Beach, The references provided on behalf of the firm from their other clients were very positive. Nationally,McGladrey provides services to over 2,700 public sector clients,lnciud(ng 600 government clients, Locally, the public sector is the largest industry group of the Southeast practice, serving over 200 entities In Florida. Cherry, Bekaert& Holland, LLP was established in 1947 and is one of the largest CPA firms headquartered In the Southeast. The firm has offices in six states between Florida and Virginia,with a staff of over 750 people,The references provided on behalf of the firm from their clients were very positive. CONCLUSI01V, The Administration recommends that the Mayor and CityCommission a rove the attached resolution,which accepts the recommendation of te City Manager pertaining to the ranking of firms pursuant to Request for Proposals(RFP)No,34.10/11 for Auditing Services To Examine The City's Basic Financial Statements Included In The City's Comprehensive Annual Financial Report(CAFR), Federal Grant Programs And State Projects(CMB M33 Single Audit), The Miami Beach Redevelopment Agency's Basic Financial Statements(RDA),The Parking Systems Fund's (PSF)Financial Statements, The Miami Beach Visitor And Convention Authority's(VCA) Financial Statements, The' Miami Beach Convention Center Financial Statements,The Building Better Communities Bond Program (BBC) The Children Trust Grant Program (CT), And The Safe Neighborhood Parks And Bond Program (SNP), and authorizes the Administration to enter into negotiations with the top-ranked firm, McGladrey, LLP., and should the Administration not be able to negotiate an agreement with the top-ranked firm,authorizing 209 S City Commission Memorandum—Auditing Services July 18,2012 Page 6 of 6 the Administration to negotiate with the second-ranked firm, Cherry,Bekeert&Holland, L.L.P.;and further authorizes the Mayor and City Clerk to execute an agreement upon the completion of successful negotiations bytheAdministration,with such agreement having ; ; a five(6)year term,through and including the audit of fiscal year ending September 30, • 2016 with additional years of the engagement subject to the approval of the Audit { Committee and confirmation by the City Commission annually, TM NDA1201217.18-12\Aud(ting Services Memo.doc , I • I ' l {1 i � 1 • i • ;I 210 1 ' rr RESOLUTION NO. `2 0i(;'" : � A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH,FLORIDA,ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER PERTAINING TO THE RANKING OF FIRMS, PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO. 34-11112 FOR AUDITING SERVICES TO EXAMINE THE l ' ' CITY'S BASIC FINANCIAL STATEMENTS INCLUDED IN THE CITY'S COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR), FEDERAL GRANT PROGRAMS AND STATE PROJECTS (OMB A-133 SINGLE AUDIT), THE MIAMI BEACH REDEVELOPMENTAGENCY'S BASIC FINANCIAL STATEMENTS(RDA),THE PARKING SYSTEMS FUND'S(PSF)FINANCIAL STATEMENTS,THE MIAMI BEACH VISITOR AND CONVENTION AUTHORITY'S (VCA) FINANCIAL STATEMENTS,THE MIAMI BEACH CONVENTION CENTER FINANCIAL STATEMENTS,THE BUILDING BETTER COMMUNITIES BOND PROGRAM (BBC)1THE CHILDREN TRUST GRANT PROGRAM(CT),AND THE SAFE NEIGHBORHOOD PARKS AND BOND PROGRAM • (SNP);AUTHORIZING THE ADMINISTRATION TO ENTER INTO NEGOTIATIONS WITH THE TOP-RANKED FIRM,MCGLADREY,LLP.,AND SHOULD THE ADMINISTRATION NOT BE ABLE TO NEGOTIATE AN AGREEMENT WITH THE TOP-RANKED FIRM, AUTHORIZING THE ADMINISTRATION TO NEGOTIATE WITH THE SECOND-RANKED • 1J FIRM,CHERRY, BEKAERT&HOLLAND,LLP.;AND FURTHER AUTHORIZING THE • MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT UPON THE COMPLETION OF SUCCESSFUL NEGOTIATIONS 'BY THE ADMINISTRATION, WITH SUCH AGREEMENT HAVING A FIVE (5) YEAR TERM, THROUGH AND INCLUDING THE AUDIT OF FISCAL YEAR ENDING SEPTEMBER 30,,2016,WITH ADDITIONAL YEARS OF THE ENGAGEMENT TO BE SUBJECT TO THE AUDIT COMMITTEE AND CONFIRMATION.BY THE CITY COMMISSION ANNUALLY. WHEREAS, on March 21, 2012,the Mayor and City Commission at its March.21,2012, meeting authorized the Administration to Issue an RFP to examine the City's Basic Financial Statements included in the City's Comprehensive Annual Financial Report(CAFR), whereby the ; 1 engagement shall also Include the Single Audit, PSF,VCA,Convention Center,BBC,CT,and SNP I i audits, for a term of up to five(5)years (to be determined at the option of the City); and WHEREAS, on April 20, 2012, RFP No. 34-11/12 was Issued and notices were sent to over 35 firms;and WHEREAS,on the specified due date of May 18,2012,the Procurement Division received responses from Cherry, Bekaert&Holland,LLP.;Crowe Horwath,LLP.;Keefe,McCullough&Co,, LLP.;Marcum, LLP.;and MoGiadrey, LLP.;and WHEREAS on June 7,2012,the City Manager via Letter to Commission No, 154-2012 appointed an Evaluation Committee(the"Committee"), consisting of the following individuals: Marcella Paz-Cohen, Resident and Leadership Academy Graduate; ,Larry Herrup, Resident, CPA,and Budget Advisory Committee Member; Kathaieen Smarsh, Resident and Leadership Academy Graduate; James Sutter, Internal Auditor,CMB; Allison Williams,Chief Accountant, CMB;and WHEREAS, the Committee convened on June 20, 2012, and was provided with an • overview of the project, Information relative to the City's Cone of Silence Ordinance, and recent • 211 ,i I changes to the Government in the Sunshine Law;and ; WHEREAS,the Committee was subsequently informed that a Resolution was passed at the June 6,2012, Commission meeting,selecting Crowe Horwath, LLP. to audit the processes of ' certain regulatory departments and divisions in the City, and therefore could no longer be • considered for this project, as this would create a conflict of interest; and WHEREAS,the Committee proceeded to score and rank the remaining four(4)proposals pursuant to the evaluation criteria established in the RFP,which was as follows,for a total potential of 100'polnts: • Firm's experience in Auditing Services--20 points; • Qualifications of Project Team M 20 points; • Methodology and approach--10 points; • Previous Similar Projects--16 points; • References Provided by Prior Clients 15 points; • Fees 20 points;and i • WHEREAS,the Committee unanimously ranked McGiadrey,LLP. as the top-ranked firm, and further agreed to the ranking of Cherry,Bekaert&Holland,LLP as the second-ranked firm;and WHEREAS,the City Manager concurs with the recommendation. NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE CITY I ' COMMISSION OF THE CITY OF MIAMI BEACH,FLORIDA,that the Mayor and City Commission hereby-accept the recommendation of the City Manager pertaining to the ranking of proposals pursuant to Request for Proposals(RFP)No,34.11/12 For Auditing Services To Examine The City's Basic Financial Statements included In The City's Comprehensive Annual Financial Report(CAFR), Federal Grant Programs And State Projects (OMB A-133 Single Audit), The Miami Beach i. Redevelopment Agency's Basic Financial Statements(RDA),The Parking Systems Fund's(PSF) • Financial Statements, The Miami Beach Visitor And Convention Authority's (VCA) Financial Statements, The Miami Beach Convention Center Financial Statements, The Building Better Communities Bond Program (BBC) The Children Trust Grant Program (CT), And The Safe Neighborhood Parks And Bond Program (SNP); authorize the administration to enter Into negotiations with the top-ranked•firm,MoGladrey,LLP,;and should the administration not be able to negotiate an agreement with the top-ranked firm,authorize the administration to negotiate with the second-ranked firm,Cherry,Bekaert&Holland,LLP.;and further authorize the Mayor and City Clerk i I to execute an agreement upon the oompleticn of successful negotiations by the Administration,with such agreement having a five (5)year term,through and including the audit of fiscal year ending 2016,with additional years of the engagement to be subject to approval by the Audit Committee and i { confirmation by the City Commission annually. PASSED AND ADOPTED this day of ,2012. ATTEST: Rafael E, Granado,City Clerk Matti Herrera Bawer y e-,,01, v.NED AS TO TI'AGENOA1201217.18-17.WudIting Services Rosa.doo PO 1M&LANGUAGE &P(114 E OUTION 212 fnrnny, K 1 : 1 1 ` t fur 1 { i " y r ti' t f • 1 r ' • • 't • ,K}j,, St,rVk ar ii ._ 1 r^r 3 :'4 5 t xi1 • .. t 4 . \ jt.,..,,;...; ',..`:(4,:.,4, it ' t ° -' l:i4').:;/;'..' . 1 r1 t c r ,. • • rel .4,14 ,k 511)) Kn2 .. - ra i t i .� 7 I a•. Al.. 1 1 ;3 0.40‘.4;'••••=1'. g i t' r• . l t. '1+f1 `r41'. r .✓far •? I b t 5 s t } 4' s " tf,r , r... F rP}}{' r.• • 16:',14:-',:. rpfY a .. , 1 r w FS 5 , ? ` .'", 1 r � • �r,r ,,.ti.„:;,„,(.;J/ � ( t 5 • r f r �• ys:...: . , rf 4) 1 { ry ,rf t } i Jr;.lr 'S yt r i r i ,c +r c ,..:..•'/.....!::K..,;•:,,,,:::,;•-...,',"..::;-.1%.,': ' M• ' r' 11,..,"4:. it is. I r e�0r fr4`r r t 4{ ,.0 0) t r. f ' f jpr' i4a4 r'i J r .?r,r , , • .' 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"s i '...',..;?ii..,,,,;%,1 nr i � �Uatl3:s.ig t ”. yM {!I�M�} , 4 yahl S} 1 eiY } �� , 6 u» w�iwt�£Sk , , • s - +... -4,,,I,..0.:::4:,,,,,,..i Y9ik "x , !G�; �•7l,t rl '311 iii 4 1 1) '} 4 x 'oi"i'1 ,"5,*, .,6ft .n�yt 4,,:,,„,... ... „,, ..4,1 ;1I 7 D ^'f s t r,r(rn i1 ,. s ., , j...ir 1' ,,r n o t . v t,:51,i ct�+�t«a.•iy: ,° t e'” !k.0 t tet-_,, .. - '�,s., r, �f!Ys }:f �u.r.1r L-f-. . Proposal to Provide -Professional 1 , .Auditing Services , . • In response to 1 . #34-11/12 • t . May 180 2012 •• Donnovan Maginley, Partner . don nova n.maginley@mclgadrey.com } McGladrey, LLP 801 Brickell Avenue, Suite 1050 1 Miami, FL 33131 1 305.442,8801 c c • • II 1 °ytvAssur�nce Tex Consulting 1 I . 1 1 I • (� ,t V`4llii � ,5 A f.s1 t <,$1.' /� /� y {y r ! ,pf�l • ` y� • , ( 1+ Y tir �P t 1 1 Table V�Coli'1'�@M1t$ �) �1(�+ , ht r tiY l�}t711 i t- r '� lY r j. �• :..}.!' i j s ,�'hf tz ••run f "�zzjy6 r. 'i' a tajzN�t =-'')\14f` 74 I • r • ^yi_ k 4� c.,}�\N' ) , • .t < r� . ,,, d.�lk•rt•��i! J •t I �1 '. E i I ' Introduction Letter 1.2 Understanding of Services to be Performed 3.4 Qualifications of Proposer 5-12 Qualifications of Project Team 13.20 Methodology and Approach 21-29 Previous Similar Projects 30 ' Training 31 Fee Information 32-$4 l 'I • Evidence of Financial Stability 35 Past Performance Client Survey Information 36 • Appendix Peer Review Reports. Biographies Insurance Check List Proposer Information ' ' Acknowledgment of Addenda Declaration Sworn Statement on Public Entity Crimes Questionnaire ( Acknowledgment Letter Disclosure and Disclaimer Declaration; Nondiscrimination in Contracts and Benefits McGladrey LLP—Benefit Listing Reasonable Measures Application Substantial Compliance Authorization Form MG 1 ad rey Assurance s Tax Consulting ?,,sy lard yyI»rn r.^4'y b I�i (}:£` <, d t � 1t p x Ir i1 4� :to iNr NntraductiOI"� � + : , r, � ,A'` f . ;a;<�t •I'l1: 1r j t �•y '�eN'r7id ,r� . • i+. rte 'i } • k5 : Wkrq' 1'�';• • ,0.S r i e }t), f>. • : „;� lritro"ductioli tatter ou€liirting the PrcpOset's prore sioiial specialization and providing past experience ' to st,ipport the'quaiiitontiona of the Proposer. Dear Members of the Selection Committee: McGladrey LLP("McGladrey")is pleased to have the opportunity to respond to your Request for Proposal("RFP") to continue to provide external auditing services to the City of Miami Beach, Florida(the"City"), While some may contend that rotation of accounting firms is necessary for maintaining audit objectivity,we feel that doing so is not In the best Interest of the City at this point,namely due to the potential costs and risks associated with doing so. These Include: • Increased Risk. Both the AICPA Commission on Auditor's Responsibilities(Cohen Commission and the National Commission on Fraudulent Financial Reporting Treadway Commission)have Inferred that the frequency of substandard audits Increases • •' as auditor tenure decreases. In fact,a substantial body of academic literature has accumulated that testifies of the direct relationship between the length of auditor tenure and the increased discovery of material financial - statement errors. • No"Learning Curve." Simply put, a new auditor must expend time, energy and money to effectively learn ' about the City and its business. • Complex Audit Process. A governmental audit is one of the most difficult Industry-specific audits • undertaken by public accounting firms. To be a successful government auditor, one must be committed to the Industry, . As you look through our proposal,we are confident that you will notice many attributes that distinguish us from • our competitors. Some of these key differentiators are: • Depth of the team.Your audit experience is going to be largely based on the quality of the people you work • with,The senior members of the engagement team average 20 years of public seotor experience and spend 100%of their time serving the industry, More importantly, every member of the team--from staff to partner —selected to serve the City has extensive government experience. These professionals will be led by Donnovan Maginley,Audit Partner,and supported by Chantelle Knowles,Audit Manager, who both served the City and understand the uniqueness and intricacies of the organization. • Commitment to the Industry. McGladrey has designated Public Sector as one of the top five dedicated industries of the Firm. Nationally, we serve more than 2,700 public sector clients Including 600 government clients. Locally,the public sector practice Is the largest industry group of our Southeast(18 practice. We serve more than 200 entities throughout Florida,including cities,counties,enterprise fund operations, colleges and universities, authorities, school boards and other not-for-profit organizations, Government and other public seotor clients In Florida Include first and foremost the City of Miami Beach,the City of Pompano Beach, City of Coral Gables, City of Coral Springs,City of Deerfield Beach, City of Hollywood, City of Jacksonville, and the City of Miami,just to name a few. This experience gives us a tremendous knowledge base and understanding of challenges that can affect the City and best practices that can be effective. • • We Understand Your Business Needs and the Work to be Performed. We understand the specific business issues and risks facing the City. Our relationship with the City has afforded us the opportunity to develop a thorough knowledge of the operations and systems within Its agencies and departments. jt;,;r r o.yx,i s ,• ,f e rt "knit i d • McGladrey has a clear understanding of the scope of services specified In the RFP, Including performing an audit of the City's basic financial statements In accordance with Government Auditing Standards,the audits related to the Miami Beach Redevelopment Agency,the Parking System Enterprise Fund,Visitor and Convention Authority, Convention Center, Safe Neighborhood Parks and Bond Program, Building Better Communities Bond Program, Children's Trust Grant Program,a single audit in accordance with OMB Circular A-133 and the Florida Single Audit Act, and a management letter in accordance with the Rules of the Auditor General of the State of Florida, With our audit team;the City should be assured that the audit will be done right, and we will provide the City and those charged with governance Insightful and relevant recommendations that addresses business and internal control risks. • Deep Understanding.The public sector industry operates in a highly regulated environment and Is subject to legislation at the Federal and State level. Our professionals actively participate on numerous regulatory bodies impacting the public sector industry including the Florida Government Finance Officers Association and the Government Finance Officer Assoolatlon, We are committee members as well as speakers at conferences, Members of our National Public Sector practice participate on the GAO Advisory Council on Government Auditing Standards, the FGFOA,the AICPA PCIE Single Audit Training and CPE Task Force as well as the AiCPA State and Local Government Expert Panel. Our professionals stay active to ensure they are up-to-date ' on trends and issues affecting the industry. We share our insight through timely webcasts, newsletters,and announcements on critical Issues affecting the marketplace. We also conduct a yearly 8 hour A&A yellow book certified CPE session for our government clients, We will continue to offer all the aforementioned training to you, as a valued client, at no additional cost. • Small Business Enterprise Partner. We believe in assisting the development of small business enterprises. We recognize that organizations who fully embrace diversity and unlock Its potential, realize a powerful force that enables business to better anticipate, understand, and respond to a diverse market place. As such,we are pleased to present Sharpton, Brunson and Company P.A. ("SBC")as our small business enterprise partner. McGladrey will serve as primary contractor, be responsible for all work performed, and Issue all reports, unless the City consents to SBC Issuing some of the reports. • Beyond the Numbers. McGladrey provides more than an audit.We look"beyond the numbers"to try and identify insights that add value to your.organization.As your auditors,we will provide the following value-added services at the request of the City, at no charge:1)we would like to help the City find potential opportunities for cost savings. We would perform a high level spend analysis of the City's procurement practices. Such analysis could include the assessment of decentralized purchasing and the advantage of Improper volume ' discounts;2)as your auditors,we will continue to asses information technology vulnerability—this includes . testing the potential of unauthorized users to critical systems beyond those subject to the audit risk factors;and 3)assist In the implementation of new promulgated accounting standards. Qualifications should be the prominent factor In the selection of a professional services firm. When you have read our proposal and reflect on our exceptional service history to the City, you will see that McGladrey is the most dedicated qualified firm and should be afforded the opportunity to continue Its relationship with the City. In closing,we would emphasize that we see this RFP as an opportunity to continue our successful relationship with the City and to take our services to a new level, McGladrey believes that the City will continue to meet its goals in these challenging times. We have confidence in your organization and Its overall leadership. We are also confident that the McGladrey team we have assembled is the right one for the City. Over the past years, • • McGladrey has been energetic, experienced, and responsive to the City. Bob and I will personally see to it that your professional audit needs are met with the highest quality service and that we leverage the vast resources of McGladrey to best help the City achieve its objectives. Thank you for considering McGladrey to continue to be your professional services firm. { ' Respectfully, Robert R.Feldmann Donnovan Maginley ,q , Partner Partner • t" \,, om+ rye �7y - .>ii i �yl`ai'' tins rl,- :5 Hq �y v d'tr Undersfartaing •of •r 1 a. r i��`i�)) tt7 s S.. r 14rd'c•7 ' }�Tl fii •t IN�1 • �" ,+ t'•�, f y• 9'I SvrVk eS to be r h •ill..st, > Performe -VQ P' t441s1 ° 4 � iiF ', �f.' �'�5'•:i;�(�:ir•}s 47' }" �� • '‘'/-11!",q5;',1,1401• s�yk5 L�� ` k ii�fa��,rt •e i t s,rpt t,5 AA, 's t i- 1 I°I • • : \- ;5Iro+i iJ • i ` � .•.. ,.. .. L.••. .....i,�.. •$i, a• i„ilr� I,"}.:... ..._ is l{ .... , . ...• ... ...... • b} . ": Proposers must prbuide documentation Sufficient to'setisfy the Minimum Subn lttal and QualiflcatiOrie F equireme'nt5 a speciiied[lithe RFP. • McGladrey LLP("McGladrey")offers the City of Miami Beach, Florida(the"City")an experlencediocal team backed by extensive national resources. Beyond our local commitment,we can call upon the vast resources of ' • McGladrey's national practice to address emerging Issues and Intricate regulatory topics, Such depth of knowledge and resources can help ensure that your financial reports are accurate and can be relied upon with confidence, McGladrey will perform an audit of the City's basic financial statements included in the City's Comprehensive Annual Financial Report(CAFR), Federal Grant Programs and State Projects(OMB A-133 Single Audit),the ' • Miami Beach Redevelopment Agency's (RDA)basic financial statements,the Parking System Enterprise Fund's • (PSF)financial statements, the Miami Beach Visitor and Convention Authority's(VCA)financial statements, the • Miami Beach Convention Center financial statements,the Building Better Communities Bond Program,(BBC),the Children Trust Grant Program (CT),and the Safe Neighborhood Parks and Bond Program (SNP). Our audits will be to the extent necessary for McGladrey to express an opinion on the fair presentation of on each of the respective basic financial statements,in conformity with the accounting principles generally accepted in the + U• nited States of America. The audit of the financial statements of the City will be performed in compliance with the requirements of; 4 Auditing Standards Generally Accepted in the United States of America(GAAS)as issued by the American • • • Institute of Certified Public Accountants("AICPA"); 'a Government Auditing Standards, issued by the Comptroller General of the United States; • U.S. Office of Management and Budget("OMB")Circular A-1133,Audits of States, Local Governments,and ' Non-Profit Organizations; • 40 Governmental Finance Officers Association to achieve the Certificate of Achievement for Excellence in Financial Reporting; • a Section 218,39, Florida Statutes, and any other applicable Florida Statutes; • • Section 11.45 of the Florida Statutes, Regulations of the State Department of Financial Services; Regulations of the Florida Department of Financial Services; + Chapter 10.550, Rules of the Auditor General,State of Florida; • 4 OMB's Compliance Supplement,Section 215.97, Florida Statutes,Florida Single Audit Act; + The provisions of the Federal Single Audit Act Amendments of 1996 and Single Audit Act of 1984; Any other applicable federal,state,local regulations or professional guidance not specifically listed above, as I i well as any additional requirements which may be adopted by these organizations in the future. • r i • I • 3 <• rli 111 ,��pF im g; ti: MI N 1 imoi,' I'fVY j 3 1pon compRon of the audit, McGladrey will prepare the following: o A report on the fair presentation of the basic financial statements,as a whole In conformity with accounting principles generally accepted in the United States of America; + A management letter in accordance with the Rules of the Auditor General of the State of Florida; "in-relation-to"reports on the combining financial statements and schedules; 4 Report on the Internal control over financial reporting and on compliance and other matters based on an audit of financial statements performed In accordance with government auditing standards; 4 Report on compliance with requirements that could have a direct and material effect on each major federal • program or state project and on Internal control over compliance In accordance with OMB Circular A-133 and • the Florida Single Audit Act; + Report on compliance with applicable laws and regulations that may have a material effect on the financial • statements; - Any other reports as required by law or other governing boards,or requested by the City such as "Consent • and citation of expertise"and any necessary"comfort letters"in connection with the safe of debt securities. We will communicate any significant deficiencies found during the audit, Significant deficiencies that are also --• material weaknesses will be Identified in the report on internal controls. Deficiencies discovered will be reported ti in the management letter, We will make a written report of any irregularities or illegal acts of which we might be made aware and will report such findings Immediately to the Audit Committee and those charged with governance, Any nonreportable conditions which may be discovered will be reported in a separate letter to management and will be referred to In the report on compliance and Internal controls. ' I We will meet periodically and keep the-City's Audit Committee informed of; our responsibility under generally accepted auditing standards;significant accounting policies;management judgments and accounting estimates; significant audit adjustments;other information in documents containing audited financial statements; disagreements with management;(management consultation with other accountants; major issues discussed with management prior to retention;and any difficulties encountered In performing the audit. - , We will also provide the City, as needed,with updates for City bond issues;supplemental reports and defeasance schedules. We will ensure the City meets the timing requirements of the GFOA's Certificate of Achievement for Excellence in Financial Reporting Program. • • • 7 ' { r , {� S,�h�i li h •y 1I 111 ii.�1 fb ,i '14414 / 1 1 • if�;jt•., 111 t:.4., ;tit J �).,•'• t ',i: • 4" 't ( ..1",„;q1,,,; 1 i ft 1 .1 Y_, s�,tlt 1iI1 fl, 1 1 I it } aY F1 S. �, rrr I Y a 1f .y k75 a li"it 3 1 11 .'''''"O'''''':'T �' 4�.'dl( Tl7` ''c a8 'k I l4 r 'N si cto.r•Ple , I •WUahif katkc is + f 1 7 I :).1'.,...° Ill! ; � 5 t� l� F Int n t �1;, t� , 1FItP4 ;.00,4M4':%'•:A .kro 7 •Ini :-. 1....N} 134 l 1 • Proposer ,�+, tr.,„. I „, .A,A �,F s i.,lJ • '1 r • v 1 1 yy .,I � r} ;;��"1'1� �tinYl 4 I psi{ i; 7 • 1,,y } Si y I h,I 1 . .!•°411''');',:!;,•V.11'. � r� I j k• lir IA' . el �O'1II 4,,,,'",,..r.!•`,yy ''1.,Mp2i tl9ul;?-; I aJk} . >>' Q'.UiillffedtiilDhsi.ofiPt4oposO Associated Ptbposai Team'fiilernbi tenth hajetMeniTe� am ,J'arid• eyPersornel: e • t:•::':' ' Proposer must outline in detail the expertunde and qualifications as specified'111,Elio FiFP,es' 1 ' t?.' ';' '1 well as provide 6'40.1110 '0e zquaiiflcatfons on(acrd as to)similar projects its the ane . . . opritam lated in Ns RPP. ' . 7 Profile of McGladrey • McGladrey Is a limited liability partnership which has been in operation for more than 86 years and has been in Florida for more than 36 years, McGladrey is ranked as the 5th largest U.S.provider of • accounting, tax and business consulting services (souroe: Accounting Today),with more than 6,600 • I professionals and associates in 78 offices nationwide. McGladrey is a licensed CPA firm, and is a member of RSM international,the sixth largest global network of independent accounting,tax and ' .• consulting firms. I. 'rw�2o�'I saountlMglYNaaY TOP 900IAMS t as , °moos ]IWhI IIOk l IH • . J4(1a��...w..,.wAptltslkl.FBluIRiN.«I5 ak �r(41‘,...I rw �l nys5g.�hm 1� n -,r) .... .:.. .... s N.174JS. '•••;Sr/".4p�15IDuG' 1Wx52.4149 '�� .fit IV �ni's`. t ,thc- r, �4,, 1 .6,:if vi I 4��1 aie,Ii•r+,1:6,--1„13p.,.ill �a}�,„, ,�'��'', �I-l��l�'lly�Oylll�:'�'�yt]a �t,�r�;-. ,�r ir.��'��'//'�.�((}1n�� .,•�I;.r+? yl Y H.y i4"h .l' 11 Il t4 J+�. 4.'1 1 j I,r'�,•kro'Ya '4is"i'd-ka-lkt('.) 1.,,.,'1t`„rlitt.}�1'hV }l11 11'fVIhIP 6' . IF.9i11., .1..N+,,i,,j.ii,'',, �. I.'"fIC;71IN,1t .F , 1.W"."nn. ^'''l.Jiti b.sl�Sitn\.,.,Y:•fi:S:�-1']:1`'t?'t r'n l�f'4?5i;'A,Gk'P.:i _ (liw,lunjy'a�Y�, v.., x I�f' '.Iha 111;"il! -S' ':�>+'�tijVF. pnett G 11•ayl'i.t"1 hIS gel*.',e1+'1'h� Ifl�.'.k 1 +• syyrt'„.Itrit -<_ O ! 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'1 O, �O�•I,.. 1 f '.ti ft/y i'CSa:»;'ti�`S.I �ra.,o1.1" :tY s� +• ry f,�s v+,N;Sy t,,;J'a: 71'._.'1. a , a','-,.a w4 m r 1.r„ wl t..:xale gr it �, �'ac1 Crd'•r 1 ! /� .-11lU' ,1h'I lte-4,;&04,3a6,".yM�4,114.�iNY�,gu li sa.1�'w1 x.15 �il $J'`,.i ' . k'.'.'i.`a;It',ty}'a b-},,a:„ 7\y_ "r Y/JtV 1'�a a� u'1�,y/• NYlH�4f•.)�+."w.Ii•i rl'n1A1nY1W/,,,41YOh,N,IWrM'M�hINH�'••' �'7)f lY'Ifs �rt ,,•n�/tyr• 11'1,1 r4`Y es++Wvf}o.iN rf)M1�:�eu�75•lk'.r',.aw.........,.,......or+..,.w......+.n.....w+.wu....,.•�,. '"sri;•s1'[Stf.:/'I.s1.1.G;+:47`? 'a:',:M`.L4)"i{.:flrr Sid'..40:,.....l 4 lllf 1 . 1 i Nan i%1' •r}C lig r , 1..a:::, •i ! 111 opg `1' tr '" ' i'? to :at t Lwt'•:!}t}' *LAV +PODolOe 7 Cpv.1'.+, {,yur ii; IIMI!Ii'IiT I4i+7.si `•.(. IfYPtOU id,� rifti��l Id jj�tifi;; IIS ORViCE PFfi&cJ OPHY "•"' Our original concept of service,predicated upon the personal attention of partners to the needs of our clients, has remained unchanged.While most large accounting firms have a ratio of approximately one partner to fourteen or more professional staff, MoGiadrey has generally maintained a'ratio of one to seven,This enables us to provide each client,regardless of size,with services under the personal supervision of a partner.We want to support management in making their organization a success.We do this by working hard to provide the best possible service,at the highest levels of quality, In a cost effective manner.We are large enough to offer breadth and depth of experience in solving accounting problems and providing innovative Ideas, yet small enough to pay • attention to our clients and to their needs. The average annual time spent by our Partners on direct client service exceeds 1,200 hours,This statistic alone • distinguishes us from other national firms,and Is a major factor In our ability to provide the highest quality service. Our Partners are client-servers, not administrators, and their industry experience and expertise Is directed towards our clients. • We are proud of our reputation for hard work;we do whatever Is required to get the job done on time and with ' • great accuracy, It Is our goal to use basic audit-related tasks as a springboard to provide you with solid business and financial advice.As a result,we consider ourselves to be a source of valuable counsel on other operational —• Issues. We provide our clients with value beyond the numbers by finding areas for increased efficiency and • • making recommendations, Finally,we recognize the individuality of the clients with whom we work.We are not providing, nor attempting to provide, identical services to everyone.We listen to each client and adjust our services and the manner of their delivery to the desires of the client, rather than expect the client to adjust to us.We find that our services are received more favorably,and used more effectively,when we are viewed as a positive and supportive force.We, not the client,have the primary obligation to see that our contribution is delivered In an independent manner that encourages Its optimum use, ••;1y ' Oescribe the p.r'uposer's professidnal development program.,including the 4pproximste nu11m1ei•of hours of confihulrtg education eftended by.the proposer Also indicate the . minter of days,of specialized training rr obi/emit-tenter accounting afid auditing received '• : 'during the last two(2)yearefor•personnel to be assigned to this engag-ernenf, Indicate 2ionlpliancewith the State Board ofAocbuntahcy requiremeritsapplicable to audits of Floride Loan Gavernriterite. PROFESSIONAL DEVELOPMENT PROGRAM McGladrey is committed to providing Its professional staff with the highest-quality training relevant to their respective Industry of service, Our public sector practice has a full range of courses for various levels of staff. McGladrey requires that each professional staff person receives at a minimum,40 hours of continuing professional education(OPE)each year. Professional staff members within the public sector practice receive a minimum of 48 hours of governmental CPP training every two years,which translates to the equivalent of six days of specialized training in governmental accounting and auditing Issues. The CPE Is comprised of courses offered from both internal and from approval external sources. See page 19 Under Qualifications of Project Team for • specific CPE hours for each member of the engagement team, • • 6 riiM pp , il i1Y' i4g1``•�� ma TRN fit II •RtWPIA •4.4:•' g. '/IfnMMI riRI., 5°Flit- i I.4 ;`.s"�•. ....V. :;i:.Y'f 4 r�ll : :J "?' A9tl9 �g ;.;t4:-..'.:-.. : : :•,• I osoirib the part1cipatlort.of`tile proposer in ratioilal'orstate,govornment'af ar • ' r •.i".Y;'; prot"essl'ono t aoeottntifig Or auditing boards or eommitteos during the last three(a)years, REGULATORY l3oDY REPRESENTATION • Our local public sector team are volunteer Instructors and actively participate In many state and local Chapters of ' the Florida Government Finance Officers Association and Government Finance Officers Association,the :American institute of Certified Public Accountants("AICPA")and the Florida institute of Certified Public Accountants(11FICPA"). • ' As a national Firm,we have dedicated resources to monitor Industry developments.These resources communicate regularly with local practice offices on important issues affecting your Industry to ensure our client service personnel are well versed inissuesaffecting you. At the national level,we have established both formal and Informal relationships with officials of most key Federal departments. Formally,we participated as an advisor to the President's Council on Integrity and Efficiency • through the Quality of Audit Roundtable, Numerous relationships are maintained with officials In the Office of inspector General of most Federal departments and agencies,and close working relationships exist with key , officials of the Government Accountability Office and the Office of Management and Budget. Our firm additionally serves on the AICPA State and Local Government Expert Panel and the AICPA Executive Committee of the , —• Government Audit Quality Center.The importance of these relationships is magnified by the dramatic increase in ' federal funding and increased demand for transparency and reporting under the American Reinvestment and ' ' Recovery Act(ARRA). I A sampling of current Regulatory Body representation includes: • � •p :4 ^;}Q-' ;:4,lb�;•na:rC,�t:,,4l a;5:y f: ,':l•(,.q?-. R:(� y,,:.,l;y .ftC : ,� hpp1, i,S '3113✓1 3s r :� �'I'Y' k 0,Jir? !,r:eiy '0h , ra;.t. AJ ,. yt :it:k ,1A ', 1e1 :q. .. Iiv ,L:I;.;,A t ,.t r:r.:riF0„,r:A,:,.ffj,U.y oi. ,i.ofi1T ' ? !r ,,, ;'• h');ynG r, ,ar▪i { r,err,r iu4 Vfi( ], ; ,_im �L ';frrA Y. 1x - Il ) Gyl;15* .; /01;4 ,o :;i407, 1 , 11,4141 + Q,!�10 " 11 .:h� . '"4-,t; . �0:,,+F "'yi're � ; l'tir':, i:" .,..i 4 'fir` : rtgy: ....tlgf ; � Wt'Si.7:` " iP� Av.v;0r1':N,�.4;4 i.lw.'.:F):��i�.'" . §. :Prly;:'t .:.y ::.1 :3 itti: 4� fJIasr4.1.,,,o.15,• 4;d, 4�,%5a y',St, 4j, t47va.. x.rh4 ,� .:s;,� NIy.i. . t ,;Gr... :71.. v ; 9�: ,'s2„ rta :;..r;r o-..::, w•. r.^3.�,11}5r: ..:. 4,,,.;., Joe Adams • Center for Audit Quality Governing Board • �• • _ ti;'.:):t3'6':P 'rt.a f�':-,•'O'•?, � i��) % :n)1;F1,'t.:P1?1 ! 'EIff +,tl",Al'�ristI,$•v; : ,rY +ryt e,,3',`:ti•;;� 'i' ;gVi•1f ..'.•r? ::ryr •3y,.a .;•�t•� � !F�}fi;ta;I '1; :i:'t ,�' C ; o,Vat: �. „; � r 49;4b�d �es�Q Ia{ V'�"DP a :;J ` ,S• d 3:Yx . .:C i v!:i14.• : : Va •��ttt �� 1.uaF3j1.01 �' M ( i � / �N .41,r: R 11,)i �: ".( iY.x.:5). 4Yi+?r ,r "` 4i 1e, l0,, ' 4'K '.t:4. " ,;�^4• r11. :1'a : zJ;^if4' , C7a'i^r /1^ SrrG ';t:},diK'AP. ,:zit ::: v" Yrr1;tin: UwM1,I ' + wY-4iii '� { v•',V;' .5. /,. �`?ql . ..I:I Jim Morton • Center for Audit Quality Working Group-Independence, Objectivity and ' Professional Skepticism ' 1 +.Y+6• :4:^$ r; %1 4@vr;'.r' y<!� .�•';. ^. :.ti:,l,,C4'; e-:. .r..r ,,,n-a. .l:. Fr":;`�. j.�:%,��y±,,,,1114�y, 7•q'H�r .i: •:r14'i i'�i.'.'"''Ly�ia,,.l�'�'yr.II��'t�.'t�ppr(( :/u y'�}�:��.}` f{{,!,•,':,�: ��1 r Sti��,,•LF'�:a•';.4F:`.' cif"�t:ti[r:'l 'r:�e .�'}I7`�•' !�,' rr:u y33i{•'x,'•^;7.41 ,;Or•.ri 4i:•tis 1.4:\i''' •v r( Netl`GlL�1rt3. e'. 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',t" ',$ii: • ZF^,i:' ',' 04:: :•:t?::!e' iiY i�1'i:';'vt•tt't'.rrj:4i :'t'I a•l M.:4 :sit;;i.:f•..:ti:= .:ZW'J;)'+%-.V4,,V.;:,',•,'I: ' 17tt'''1 9V,Vt:{o+ ,14. '•\::+may}?:�it �t,'i ,ma i, f, ,4• �n ., a�� o,.0,.a"4:'u?i•••;: : '� ,.,� .,. :% "� r.,,., , :ra♦1� rr �i: 1r�b, i ,f >a , rukaytcl , : Cf ,••, trna.}: 1.3.��0141 ori 17.it V:'{.;i". .'y }•, .11-,!,,:ilm,{ia..!;,,}:.:';k•0c44; 001;;•,+r'4 4•r��:'4i4 ii...4„+„q11 i•:-.„......*;,/..tri,SY',`.ar,::il`4:4-..c4,1 t?• '.":r .Y '• 5:}'',; ,}„'l,t yV), S 51: ;,4' ,:j, yr 4.44, 3 , 1q,CIj•3,Xg.I 1•/•, _:Sa. _ r! ...... . : 'r'4. ,'..., ..::a.Ss...lr:•.ii.�.,d.....h.'•�fSv3i�+•lt•sidf„s.��::. ..�.t. `te.,i::;>�1.ti„t df,. 7r,.<. ..1.'sa:�':••:r,::•'a..6:•r^:::r••!, :, Richard Stuart •• Financial Accounting Standards Board Valuation Resource Group n"`"If''' �. '• .;rs '.1' •�Ray1.",fiff 9+,t,11[+s•nA..rx1{t;•,..:r qr• •'# r, •FP?AY?.+•• :4r:d,..1: 7 it'' d+'' .•i':I.?. ^,+,rt.?' i :;; 117. rrtl" ' lar ' - ;, ., ;' :,1..,rrr ;�' r: v` .{t' ; 1#=. :67446'., a�' , i �<t�;;r,:.,;,.,t -.•,,4k�•,1 •f ! 46y' 1 :,4`7 .`w}•! .?,, 1'.! ..,L J: tS G• ,t r v:, • r.,.,.6.'.N ii- .,r• . r•r1 ' t<'. •?.a•� :i '••t4 �;,'• -:+t ��. a-.�',; ; 1., ;.!Y; ...1,;,.�4'i�.? §: S^,' �. •S 4.�: ,,w^ +:1:'•f •� :'f.;..•.^.:.•.1. C. :t:.'1. '!+.,. •;:;. ..y: � t.l• .ti. � �. i„ 1•','t ..°�.i�r „"t'..i:l�i:4:'..i::� 4 i .',ir'.. ' , John Hague • AICPA Investment Companies Expert Panel I d i 1 • �I FYH �l i!i.y: � tyf <t(; Itiovr.}yh j I eel+,+.,r WOW .,x. 147aee' iry4ee,1 .arnr z. Imo JILIN } a vv ,��pppayq�y�q�, t S w; IIff I'� ji'>ai' oy:;q1 IY9A9F9M '.,Yj iEl �tii t I 1 '��''.`• TIONAL RPF;uRcEs i' Local engagement teams serving all types of clients frequently >�ir ilreV•is'xi `f.fBr request guidance and assistance from Firmwide runctional and t ro' �pk:�`mNsp}y C�defq•.�") ,> o xun.,s: ! industry coordinators,The City has access to two key Firmwide resource groups; nuusinoe pubIIe Seater Loarnlns Sallee Web Semtnere • National Audit and Accounting Is the Firm's technical ""`"°'"", rar0ovomment Entitles eW.epialy°pay+v W an minalevi.no lerosolulk research and quality control function,This resource would be •Q"" • • d4N1tpWW eeafMastIniVleDognnwe a,mpe Ha IWN Martin, 4np°ep i11 We(win Morel • made available to the City on matters relating to governmental ee a.,,a.e raawx NanweJaleepae�4enee(ueingmi.e.s,elay,wlim accounting and financial reporting, as well as Internal audit w u,,,;e, policies,standards and procedures AGtEe Na°eumorelagieararuW°U°anvnn ua°faxenn, • The Technology Resource Management Services Group !•9 Yh aU�N�[�Dewel ho CWde e"t"MMv will assist the audit team In reviews related to the City's Qp1"'""°"" Cmi1at ,4.2M1°Ie� gym°41°y°u f4f<,"nael ,U electronic data processing("EDP")environment and will serve "°"°"°�°of °°"�'°°'""'"°°'°a' 1 k n°Nne+ndul"'ep,(gpP9°m y em�,1lM lektnp as a resource in matters relating to the operations of the City, vaxaea�la er°ue eepanwn011We0°e1nNa TIMELY INFORMATION � uanwu°muu llxvt.e "MN1 1 aZbLa xle,n We have resources dedicated to the timely communication of relevant information affecting business In general ' and our client's Industries in particular.A sampling of our publications which are available to clients and friends of the firm Include: • Muse—a quarterly newsletter for government and not-for-profit entities to keep them abreast of the latest Industry news and Information featuring topics such as risk assessment,benchmarking and audit committee effectiveness, National A&A insights—_an electronic newsletter covering the latest In audit and accounting developments • relevant to all Industries. '• ;.; Describe the prdpossr's quality control br`dgrarrla and procedures that ensure compilanoe with the pet:0(4er1's prefessioonat steridlards revievil ritLAlCPAttander`d'ae Ind io ttewhetlier 'the proposer;is'in the' SlvC Practice: See lien:anict/dr the Private Co'iipanies Pradtfce `, Section oi'the'Cluality Control Progra4- i'f the proposer ensWdted positivcly to the p'r'ededing,attacih a.copy'`of the last Peer RevieW received by the-proposer: • • included In the Appendix is a copy of the external quality control review report dated December 2, 2010 as prepared by BKD, LLP for the accounting and auditing practice of McGladrey for the year ended April 30,2010, This quality control review Included the review of engagements involving audits of government entities, The full report is being provided to you, In the Appendix,to comply with requirements of Government Auditing Standards.We trust that after reading the attached you will recognize that McGladrey's quality control policies and procedures for performance of audits in accordance with the Government Auditing Standards continue to meet the high standards set by the AICPA.BKD,LLP discovered no findings or management comments when conducting their review. , 1 fi.Yi11 }hl q11) 3PclG iVii/•::,! d Y; ;2r 1Y; i.y cy ,"biz: k'l r ex::xx moo t lits 1M1 Mfg fie PA • , b'essbFibo the propvser's(lot;71 officet'br kFaflol��l flrrhs)oxperionce•irr tirnvOng countin • and auditing service#to local governments, EXTENDED SERVICES TO TIE PUBLIC SECTOR Approximately two-thirds of our public sector entitles are audit clients,many of whom rely on our firm for various advisory services.Nationally,our Firm, as noted earlier,has worked with approximately 600 government clients and provided a wide variety of services.Samples of services we have provided include the following: • Financial and Compliance Audits • Operational Reviews • • Information Systems Consulting(Needs Assessment,System Selection,Contract Review and Negotiation Assistance,Disaster Recovery,Network Cabling/Design and Implementation Support, etc.) • Internal Control Reviews • Accounting Policies and Procedures Manuals • • New GASB Pronouncements implementation Assistance • Accounting Assistance _ • Construction Cost Reviews a Expense Reduction Analysis • Fraud Awareness Training GOVERNMENT INDUSTRY EXPERIENCE Government auditing and accounting Is one of the top 5 most dynamic aspects of public accounting,Our firm has made the public sector Industry one of its main Industry focuses.This sector includes municipalities, not-for- profits, and other government entities. We serve over 70 public sector organizations in Florida and over 2,700 such organizations across the country, In Florida,the public sector represents the largest Industry we serve, f I • • • . I • • 9 In1, `'•nY,•rit dt �3i ,q,E (iybykif - - m in i Jt^ 3iJ! Ip f CAN 0.4!! s ..`6`6ttEEI�9y 'ryI y,'��yr,�yryy,pp^I !e�'';'•�s ,.;iif: ?'S' •.Iny.,SS. /� lCLLG F �EtlE z' t 1yT ^t1 N i,1 fJlJf!% .f n`:YG` �7{(:� t•M'' w. . %O'..+• plaint N:•n• KSJa� N,M+OA ,..„Ili, :i UFA 111 R: KM RI 111;:'<><} iiii I1 ',`w: rill l i;i6`CAL COVI~ty (TENT EXPERIENCE ii'IY:f, We have been serving the Florida marketplace for more than 36 years from our Miami, Ft.Lauderdale,West Palm Beach, Naples, Melbourne, Jacksonville and Orlando offices.The Florida public sector team serves or has previously served a diverse client base of governmental entitles,Including: . , • flcilada l ut lic Sector.:Ciicfi'fs. ' ,.Clt'yof A;Bntur , ; • '• . .. ity s$'I`tu vlllb . ',. .;'1*riml 1) dg,,Sghoo(;'oord • :. City of Cape Canaveral City of West Palm Beach Broward County School Board •-CityofQtCbiPbtOreeii. . ; ..;:••••.'••:•'. .':0itya(Mlam1 ep Ptileli .ot:Off.$roe P.atklnd.;,;:::•:''Indlfi'ltilya'r:Q:qunfy;Sahpol:13Qard.. .. City of Coral Gables Brevard County(Internal audit) Osceola County School Board' . :. . ty'Of Ooruj,Springe ' ::'''' ' ladesiCoulhly' • r ,.. ' '..,•''±' Mali-0Odipiiy 8 littl•Boattl; • :,.'1'.; • City of Deerfield Beach Mlaml-Dade County Brevard County School Board • ;tIty.of:Ha fandaletBadQli• ..• ..MisntifiJ40eapoi epartmorit. • '. ....O,kb1.out%ty'P'ubllb.$phagfs; , ' '.' City of Hollywood Mlaml-Dade Solid Waste St,Johns County School Board • _• •'Oity'bf:Joi ksonvtile ' ' '' •;Pulln B.eaoh Ootirrlq. • .. ,Qrrn'1b.0ounty SO Col;board• -.•••• . • ( • City of Miami Palm Beach Airport School District of Palm Beach County •:Oily.OtMB nii•Baaoh..., .:::•:1:.;. .:, • Palin'%XOh'.Ut�lltes :•,'••• •• ••• • ' oifr"i;gitnty- ahop1•Soar •'; _ 1.•..,. .. Miami Beach Parking Enterprise Fund Seminole Tribe of Florida Volusia County School Board ( 'cityof llrghiar .;r -t"' . ` :,8 11f.riorld r! itsr'Mdn�4ement.Alsirlo{;: .-'v', ;Mdnro�:i;duniy'SettColBAArii. ,' • City of Orlando(Internal audit) Jacksonville Port Authority ..i • .Oily bf;i..4rm NY. : . ' 'r.Jackstytivlls0rt ldti. thbdty:•• • • , '• J• 'City of Pompano Beach. : State of Florida Department of Community Affairs Profile cf'St3C ' Ranked among South Florida's top 25 full-service accounting and consulting firms, SBC is a 100%minority owned corporation. SBC has built a 25+year legacy of providing high quality advisory and compliance services . at competitive values to our clients on a timely basis,During the past year,their distinguished professionals logged more than 20,000 hours performing audits that satisfy GAS. SBC is a leading provider of compliance, auditing, and consulting services for many of the State's largest agencies. ' With offices in Fort Lauderdale, Miami and Tallahassee,their firm maintains a staff of over 30 professionals, 14 of • which are certified public accountants,Their innovative,entrepreneurial approach to client service sets us apart , from our competition.We go beyond the basic routine to provide an extra dimension in quality service. , • The firm and its principals have been honored as"Outstanding Entrepreneurs"In South Florida as well as r . 'Company of the Year"on numerous occasions, • SEC's core audit and consulting practice represents servicing public sector clients.SBC Is a member of the AICPA Government Audit Quality Center,the Government Finance Officers Association(GFOA),and FICPA Nonprofit Committees.The SEC team has accumulated extensive experience preparing governmental financial statements i pursuant to GASB pronouncements,statements,and interpretations;performing Federal Single Audits and Florida Single Audits,as well as providing assistance to clients preparing the Comprehensive Annual Financial Report(CAFR) ' for submission to the GFOA, Supported by a strong tradition of continuing education, their In-house programs are designed to implement 4pragmatic approaches to learning and problem-solving, Improvement of technical knowledge,creative thinking, and analytical abilities are critical to continuing their exceptional record of performance.Additionally, seminars are 10s In i :pit i .,;•;�. .tax;':,.miil tillit :qv. S II EE q ., '�'fi Si ,!: I Icy t0 ^'j� ��+ii4 `r,kG� 'a.,,q:: t J Rel.N„, MS= 17,v:l IWO* u.mmn pmaty' ( 3'f r i�' T'1'y �'k f ih?)' �i�!it ta• I,hi,>i ill R. ;i;?Qnsored bg,'rtie Firm annually addressing Issues which Impact the governmental and nonprofit community. ,,:.::: Adequate professional continuing training has been provided for the past two(2)years. • ' SBC's governmental audit staff comprises,sixteen(16)full time members which are Inter-changeable among their South Florida offices.Specifcally, at least 80%of these team members time are spent servicing public sector organizations.This engagement requires assignment of an audit partner, an audit senior,one staff auditor,with • the supervision of the,McGladrey quality control team. • PROFESSIONAL STAFF BY CLASSIFICATION FOLLOWS: i .. .. .• • .• • •., .;. . i ...• , •,, . r: •� 'fari.J l ra•�,tlu.i '•...,; Total Number of • Employee Class National Number Public Sector Audit Staff. • Partners. 643 . 27 4 • Directors/Managers 1,783 85 9 j Supervisors/Senior Associates , 1,689 88� 10 -" Associates . 1,678 108) 108 1 Total w. 6,793 308j 131 I ., :•:.,......._....:...1 ... ........ !�_ ..•.. ... _._r..___.._._ , ' r The engagement team will consist of a client service partner,engagement partner and two concurring partners,, one SBE partner, one manager, twoseniors, multiple staff members and subject matter experts for information . technology and actuarial reviews.The number of staff onsite will be dependent on how quickly the testing • . . materials they need can be provided by City staff,.You will also have access to various technical personnel including resource partners,consultants, government contracting consultants and National Audit and Accounting • Office personnel should the need arise.All of our staff are employed full-time and would work on the Cityon a full- time basis.The City will be served from our Miami office located at 801 Brickell.Avenue,Suite 1050. • McGladrey has the bench strength of our seven Florida offices and 78 nationwide that we can draw upon to ensure that the City Is served to the best of our ability.Our public sector team works diligently to ensure our client engagements are scheduled such that our client's timelines are considered and target dates are met. 'O..: •:.••:` besoribe any litigation In excess:bf$1 tl.4',00o filod against 4ha proposer in the'State.Oft i • i •'' Flor`iida•09er the.last three(37.yyail,, /l'sO�iesciribo:any..terrniriat e.ns,suspensions, is, .•. riStlre5,repri tandd,probatiorts or sl filar aot'ioris against.the,proposer,or any Pneinbee of . the..ppoposer s firm by . toeidle ttate Maai°d of•Accou'litanoy Jrrtiie lest three'(3)years. ` • During the last three years,we have not been a defendant in any litigation, business related claims, or administrative hearings arising out of professional services performed for any state,county,or municipal governmental entity. This representation encompasses our nationwide practice at McGladrey. Additionally, I ' McGladrey has had no terminations, suspensions,censures,reprimands, probations or similar actions neither I • against our Firm nor against any member of our Firm by the Florida State Board of Accountancy In the last three (3)years. i r We have been and are currently Involved in other litigation, claims, arbitrations,and administrative hearings In the ordinary course of our business during the past three years that are not in any way related to McGladroy's ' business of performing government audits.We have professional Indemnity insurance to insure against such risks t and there are no matters whatsoever that would prevent the Firm from providing any of the services we are proposing on for the City. . r . i11 MI " :4,1 IOL I tij? NI s ;>:: I !th B y , ,.i • 9 NI 11ht 1.44:0 111IIç ,•::$ The fr000ger make a statoment to their Independence With,reooki tote City— :0•1 ••:• - . . We are familiar with the Independence standards promulgated by the American Institute of Certified Public Accountants("AICPA")as well as those contained in Government Auditing.Standards, Issued by the Comptroller General of the United States.McGladrey and SEC unequivocally meet the Independence requirements relevant to audits of governmental units, In all matters relating to the audit work required by the City, McGiadrey and SEC are free from personal and external Impediments to independence,are organizationally Independent arid will maintain an independent • attitude and appearance with respect to the audit of the City,McGladrey and SBC are free of all obligations and interests that might or would conflict with the best interest of the City, ; S • •_' ' . • ; • • : 12 • • iiii'i44i llrs0 IN IR 0113 �`. ' ' � \ � ` of . wm�lo""cx=^ ormw •` - ~�� Project Tem ^ � � Vita �� ` ^ •� • ' '' � � • • � ;u0� _� ^� . �_�. • � . ��n��t��a�m� ' ' �� Lidt the Members Of the project Provide �t ' ^ i r� Information senior for .�� should ---- governmental' . _ . _ 'auditing _' Inorder tnfu�U �n theteam that will be responsive skills and experience In deawith the ' ` Issues you face.Because MGlad d SBC have been serving as the auditors for the City for the past six • ' . amfamU�rwith the upenaUonaufthe O8yand vN8not have toexpend Umo,energy and money� ' ' effectively learn about the City and Its business. ' Each memberofth | listed on the following pages has extensive experience in their assigned areas. . They will audit services and business advice and will ensure that anticipated are met, Each member~' the proposed team will b~dedicated ~providing,`~ ~'~' ~,~~' audit and ensuring that 100%of their tImeto their assigned clients for thduration of thent.They work on only one engagement at a time and are fully ' � available to provide the proteam members-- ' ' In a ' ' ' number of professional and civic organizations Including the Government Finance Officers Association, Florida Government Finance Officers Association,School of Government Finance, Florida League of Cities, and FICPA,They will serve as an integral part of the audit and their knowledge and experience will also serve to differentiate us from our competition, ( � The roles of thu | personnel comprising the City's t team are summarizedb low. These . professionals have extensive experience performing audits of cities In Florida, including a large number of cities In . Miami-Dade County,who deal with many of the same isiues facing the City,The team members'complete biographies with education,continuing education In governmental auditing,governmental auditing experience and professional memberships are included in the Appendix of this Proposal. . . . { [ / ( 13 mil nig ki.3�� p �� 111 l�n n�� . �� m k laP%,,,, 11180C4 0.,!, REC04,11 114htiln t t^' 121 ititi 'pp io; ,...,,,, irv,..1z• i Yit I I?SO IN 15 FM•.....:,.. Presented below Is the proposed service team organizational chart: , ; ;41,,-;;;;Ags,S4,1,14.,:k.,‘0,1v46$;1. 'IP ; ; l• , at4,4,,,,',,...',‘„;),)".12--,-:....:7-(4\,-,0;@,,i.411 11.n.f.41/•,i,K4V,,„.,it'1):..-s Jr,,,1 V:4 , 4"-Fi...,1•1,".M.,,,et..1..1 onrier'gi 4...4 1 ti3O",) , 404,-,1 Jim Woloh r 41,,i1 tilt ohtl Aohouillyis1 i J t..tlkk , Mimi Saliebler : ''.As., • .. 1 1 T I . ConOlming Roview PoRnor Ill''''Pi'4'.. • Yectuitual Rdeototee ' •'\;.tt.). I3ob POldirdrIti ,..,,,‘• (II , , lk Client 8etvfoo Norther : ' iq 9:'.",t,.., , . . .• ,•,C,1`,1,1,;,),I. tolrIllov.dn AlitigitAY ,I - -i'''1'.'d Namara Latta > .,4,,.- /• , PNA'•,,, Rng6geinent Penner . • 1,',,;et ., . rrsrfoolarrst • i . _ . _..._,,.,.._...... _ • .1,..,. ,.., 1 , , . ,,.•••;.,;.1/4,''41 , •elj•,;',,, I RP/1.,, . • • • F,4'41 W 'Cluiiitd114 ItrtimMos, 1 Iia Otiaffzil • • 1. , ; • ,•., ,vqs(„). gaga.yorrient altinatfer , / ,. /A., A ;,,,,,,f,..-,;•; An Wavy Specialidt 1 ' . #4,11 ,',._:; • . •'1.) , • , Vaftlile‘Colloitaii . '';',1•M'I.,, ''11 ,', ,* ElitlqfferolentAiLlervi$Or I . . .—: • _. ,, ..., ,, • , , ire''';••••'..,,- • • , - ,‘`....1,1., : 1 ! • -t.,••=?,,' • ' ,:, t , Lowly'Ritz. . S EtigotjOine'nt lit.thootV , 1 , . • . • ' • . . h'600ooriOnt staff 1 ; , • , ‘ i . r • - .- , 14 ;01111 ' I _ . ..,„...: ..., ,, ill NM :sg Eiji 111 :tii km ) ,.,....,.. 1111 IRO l'iR .itli Ilig PM'al` M k'l . 'IN lid liti 4,1,•,:i, . 'oA r—e.:!:-,Try.hfmr.1-r,...-.1,.'"):1'.`17'."':'..r."'.','57"rrl!TV.1`,°"^",r'rp."7,.?..,11-r°, 4,.::...;„•,,,f,•..Prrf`:7".'.'irTnIr'ri'l!V•77:frr, :•••.' i1'ediii..Miiiiiiitiie,:.:'',1'.01W1#6;ilioli41W464301668i,:;P-'''.,-.....".-:•:'n•',;:; ',:!'.';':,.:i....5,' ,/laiiilts litt6;',.'''.:'..*:.:-.:.-::•.;.....I ;0.4„,,w,..-.;,•,„4,-,,,,,,44...ze :•. ,,,A,.,16;gd,i,.-iii,d,;;.•b.,,.,.,4„„;,,,,,liA;„)',:;;ug,..,,,,444,,A..4-,,. .,..1. 4,-.44,•;41,4„.,,iO4.,„„ .,;.,i;7 1,444;=,.....tal.maiATap.a.4146dditi-.6;: Bob heads our Flo)rida Public Sector praottce,Bob has i Belb Will serve as the chant . . . i,-,:..t,Vt.••• 1. . 1 over 22 years of audit end accounting expellent)°, 1 service partner and will ensure ; ..V.0 ;Including as partner for city and county atlas.His . that all serviees provided to the •experience includes performing audits.in-acoordanoe with City are.delivered in a timely and I - ' Government Auditing Standards, 0•MB Circular A-133, efficient manner, He will be a . ,..... ;, • • , {Federal Single Audit Act, Florida Single.Audit Aot,and the valuable.resource to the Bob 1 kulaa of ti-ie Auditor General of the Mate of Florida, Bob is engagenleni team, drawing on his . Peldenann. I p dertIfied.publio aocoutitant licensed to practice irl the i extensive experience serving . . . • I State of Florida, governmental entities, In his role . . . • i Bob's Florida pubflo sector'orients have Included., as the Florida Public Sector Loader.,Bob Is responsible for the 'I city of Aventura . city of Coral Gables Oversight and delivery pf high- . .' City of peertleld Beaoh • City of Hallandale Beach City of Miami . City of North Miami quality services to all of our public, ; . Browerd County • Miami-Dade County sector olients. He will help ( Seminole Tribe of Florida . University of Miami Donhen oVan to sure that the . I , • . • -engagement team and the City receive the best resources and . I ServIot”from our firm, 0.0.73601.1=013311,,ilAWKAUVA.P.WP •:e.••,1.117...011MInin•OlslWAIIIMMIWINIMAIMI/Tall,r,1•AZIIMIAIRP‘r,vvka•umuraan'AMKOSANG.Sfia.V., 74,,,, • 1.1.1ViRiatl.T. 2.1.11.14,nfitilVaM1,1-.0.11.0.1...3.1.1• i ' ' r •:!-: Donnovan has 2b years of auditexperience,focusing on Ponnovan will oversee all aspecte . .,..,,..10.. . • , ''N,W,71 • ...:,AN)....,..., the public sector,He has managed and supervised audits of our relationship with you, His - of very large and complex municipal engagements,most 0"xtensive experience in serving . i . c.":,..,.: .• recently Implementing GASBs 58 and 54, His experlende large government clients, .' ...\::,. •. " Includes performing audits In accordance with Including the City of Miami Beach, Government Auditing Standards, CM 13 Circular A-13S, will enable him to serve as a . , Federal Single Audit Act, Florida single Audit Act and resource to the City staff and • Donnovan Rules of the Auditor General of the State of Florida. other audit team members. Maginley Among his'special projects, Donnovan has helped Donnovan will be available to the 1 , ' develop an operating budget for a municipal entity that City not only during the audit but ' , was declared to be in a financial emergency,the throughout the year to help the . preparation of comfort letters In association with various City address issues as they arise, . , bond offerings,and the formation of an indirect cost . • allocation plan that aided In the allocation of applicable oost to grants. Donnovan is a certified public accountant . licensed to preatIoe in the state of Florida. . . . , . Donnovan's Florida pubilo sector clients have Included: :• . . , . ,• City of Miarni Beach d City of Miami City of Hollywood 6 City of North Miami • City of Pompano Beach • City of Sunrise ' • Broward County • Lee County • Miami-Dade County • Palm Beach County .1 • Miami-Dade County School • Palm Beach County School soard District i •vp,/,....Lwr.ae.,,,turceampla.vW z...v.Voqua......1.Vedvantftwina.R.UVet...atrx.0.....4.0..ragnamsuniarAinumwOmmtv,...k.m. -Al..4.....04MUVImmag.0903F4eleat...06..IX.V.V.WMIN11: , 15 • ,........ , .. .11 1.„11 Ila I 1111 Eiji 4 - ht"f4E ' 10 iii IA El gig !ilt PA , • NIN•. 1v IYM358 VV.,giom1 e.0ohai 1 Ffil 111 trit ``N f }•, g ;r; ' ii �`,'i• OM .{s>; I{ ,>+t ,.. ,„„,,,,70� Su6mN: .„.,,mm „ q?a u,,,„sN ewp' - vmP ,„,„• , q'erMxnwdrm:mi-,„..„....„,...,,,‘„,.,,,,,,,,,,,,,,..7:77..: "Y " ! mm •^ a „ z� • ' � ; . ,: • �'0,� t• i' � ' lGfltb'rI:!. tillfil fi t �airYxp��ri`�$:, � „ • 1afYi�,fo`th�Ci !• :. • • •Jim is an assurance partner with over 33 years of i / ;��•,,; j i Jim will servo as the Audit and • '•' •,'4",1:.- i experience,His clients have primarily been in the public w ;•'44+ ; Accounting Concurring Review ; ICY,: ,,ti ,; sector and consist of cities, counties, school districts, Partner, Jim's extensive Irj j healthcare organizations and various for-profit companies. i experience working in public i :4:, i He Is also very active in the Firm's internal inspection sector will provide valuable ' program. In the past 10 years his responsibilities have - ! advice and consultations ;James Watch j changed and his new role Is that of an audit and I regarding complex accounting accounting specialist.Jim is a certified public accountant = matters, assist the engagement licensed to practice In the State of Florida. team in audit matters and will be ' Some of the clients Jim has served Include: responsible for ensuring that • . City of Miami Beach . City of Cooper City reports issued by the firm comply withrofesslonal standards, In • City of Aventura . City of Coral Springs ! p l ' • City of Coral Gables this colo he will perform a cold City of Jacksonville I , • City of Deerfield Beach • City of Jacksonville read of all of the reports and- . City of Miami . City of West Palm Beach financial statements issued for . __' • City of Palm Bch Gardens • Glades County the engagement. By providing a ; • • City of Pompano Beach . Palm Beach County ; cold read,Jim may see things l ' f that others who are more closely ! ' 1 I + ' Involved may not notice,much like a GFOA special reviewer would. ,-.•is..-0•—•,."•-•. ,s,s-" f t"'.M"'Vj"'.a.."."'w ..”.-.-'"" .....auvur A.UI dOYJZL^mvawvn.•nawav>anmmivu,•mwxe.ravt... .•even IMR.SVM.e0PW,U1SIMIG V1141,76 .414,7„uuew.4a:iar i , Kevin has over Z0 years of public accounting'experience Kevin will serve as the 9B • i t ” :=+ ii and is principally'responsible for the quality control of partner on the engagement. He ; • 'f' `:V s t iii vt I..j, reports Issued pursuant to the Government Auditing will assist in the audit of the City i Standards,Single Audit requirements, Florida Rules of the ; and will help ensure that all 6�;'r;�;. r^: r' Auditor General and other oompiianco requirements aervices are provided in a timely 1 ' t I ''''ft= ••,Y_ ' ' pursuant to laws,regulations, policies and procedures. and efficient manner. He will be i I Kevin ,Adderley KeVin Is a certified public accountant licensed to practice responsible for oversight and i In the State of Florida. j staffing of SSC personnel ' t assigned to the engagement and . ! Some of the clients Kevin serves Include: will also be directly Involved in providing audit dervioes, i l ' . City of Miami Beach 3 Village of El Portal • City of Borth Miami Beach • Miami-Dade County 1 • Broward County •• JMH Pubilo Health Trust • • Broward Clerk of Courts • South Florida Regional • South Florida Water Transportation Authority F i • Management District • Broward County School . Mlaml-Dade County Board ( School, i • Warkforce One 1} .1,. ,,,..val.11,II.1.1..14,RU G 1.n:n..nazn-v sa,uavamk wam.nuo..w.n..ar .,......aa.+uuw•,u......r i3.10to n.uwwn........marum.ni a mIValM.u+;0,1.01.1031,rnu•.n4m1.1,06{.0 1.1.V..:wnrmx J 16 :II�;1 P1 ,r,, I. •r;?c„' E h"'S'' ri f e; d;I x>. rig o. ` II II,��; `.1I:Ii p4;`ii tt.: BB•kj r'',i1 i N00 y.,u.\• IO i C C ,+'.'• tlINY611'71NIYlN e '!'I : Ill .'�t 1111 I la MI U:' ata mmai� ►{ �in7Fp pw(3�],,iy`rro'lta;0.r.nrnrr.,...,,75r."yr104/%`y�gnwns,�T'�,i+vrt.,{•yti4w�fFlan?iu7,,,,{vnmPf!IMa6P.(.?.'Dry7.-..7 py ..1r,?7:�71Q•�!7?{"��uYn�' y!^-'K� _t(`..t- he nvum+.e,l { }i'I 1.0'01; Hroui •1•`. ,4kt isT.�•��. . r2F1 g,:oD,`tg tx•osef.'7iY.7C'r.�, ,n.il.;• '}\Q`' , • :� 34.9'.0:9.0;••-cf.+r•'.j,�.4,Q]I),.r'' ',i•;•• `;„; 1, ,..• ,.I.Fry••: '•`,%. ! •:4 • Sl • ,rcyM1u :-);,. '4 .,l' • '• ,i•j ./•'.'.0.i 1-.1,.,-l ,7 '''-.t''.. ',9.1 l!•�tr• .',r.+'.;t:!' •.. 'els ••7.• •7.•::} •'1'1•',ly.Z•{n •r•4 ,;1!` '•i'\ '•.��!• • mwiuwfu�n{mlz ._. ”�rii�ai�:in"W�'8dmdeenwao7wuwY.wau7�amu0.;anJan7iii4wueMw'biaiufai0>�k.•',nrcekvuA'k�r'eNsnHnra:nmi�'i�4ko%uiv;?ren9+n1#u;.whim'l'pyi�vtaUfaGidtWyn}cu7n'jevnniwli� ;;:.::44,;,,:, Chantelle has over 10 years of experience.serving Chantelle will serve as the i . ill " ' lar e and municipal en a ei'nents, She is a ' E a ement Manager and will ir f 't g complexg g i n5 g ,•;;r,40� r i certified public accountant licensed to practice In the assist In the supervision of the ' 1 , .;. State'of Florida, t day-to-day performance of the :;v ,.;?1:.. Some of the clients Chantelle has served Include; f City's audit.She will assist the Chh ntelier • .City of Miami leach i engagement team in audit • Knowles Citof Aventura E matters, and will be responsible. + City of Coral Gables for performing a review of all • • • City of Garai Springs f workpapers and tegtwprl<for all • l - i • City of Hallandale Beach i audit areas to ensure . • .City of Miramar • ; compliance with firm end • I ' • City of West Palm Seaoh professional standards. • • Miami Dade County ; Chantelie's years of experience. ' _ • ' ' Miami-Dade Transit { will make her a valuable asset c ' Palm Beach County for the City. b , u,„asad. An. . fll�IdriylaWaterMaeentl�istric �„A , M : F�.,> n>�i,� �x • h. , w , Valerie has over 6 years of experience serving large Valerie will assist in the supervision j and complex municipal and other public sector of the day-to-day performance of the I f ;uL.M..:w. engagements,Valerie Is a certified public accountant audit. Her experience in performing ;? •..•;,F., i licensed to practice in the State of Florida. compliance audits for large � ,,, f governments will provide for Some of the clients Val has served Include: effective management and Valerie oversight. ' Colimon • City of Miami Beach i • ( j • • City of Miami Department of Off-Street Parking Miami-Dade County • School Board of Miami-Dade County , . Greater Miami Visitor and Convention Bureau i City of Coral Gables. rt,W,...i•k"..y,,,...,Y4flTi:•gfl't pNf 1,,...,,IY.1 ,,IWN •tiebl*AvrIte Fsr3IChc.aVit+aB'•1'410. WM 1 1Vi ...1 4.0.4.1hM.^6V11.W.•r<C.....1N!!••N:+Gq>Tt 111,,ltrneNSdin.14",....NfW:tat ";i MO,: 1 Leany has worked 1n the public accounting field since Leany will serve as an in-charge i V"? 's xi ' 2009.Since her commencement as an associate with - for the main components of the i l ,;,:, `l r ' McGladrey, she has served as part of our public sector i audit. She will be responsible 1 1.t �'1.•'':•"4 team on numerous government and not-for-profit for supervision of audit staff for is °1 - ', r,i;_ ... engagements. Leany is a certified public accountant ; their respective components and • • licensed to practice In the State of Florida. will perform test work over • i, Leany Perez i Some of the clients Leany has served Include: significant audit areas and I i i complex transactions for each , •I • City of Miami Beach j I i • Greater Miami Visitors and Convention Bureau ; component . i • City of Coral Gables i • • Miami-Dade Transit Enterprise Fund { • University of Miami Poa • ' .41F/!n✓4. •241•4,4,91,140M.:I410,4,. vnM4 40.1..IP•0 ,N1W,.MM MIJ44.1101,114Wi'HtIZTVYM'NnF1m,4••...IMat.IHrtNut•.10.10W1'ntlrAWLIVelh' ..tA:M9MWiC1111.4NISY14rtINNN..1.1.441.01 MC AIWILWflv •. • 17 r>: ��` r . i:a Y: Nil i a ...< ail.... f''<'x:s Ili ;,',i, VI S'',':'1Q :L=i`I :v..';', _ . ( . NM RIM! E IF!511 116 lig simi gtel 17. 4fatinw-impr-I.sn, .0,p7,...05.14.,..1w..04, rgorart,,,wAlwrp....•mom.--9,,,,pm,,,,wr.-.6,pwo .p.f.t4 ,. eiwroym-m,.,50-4...eorntst-mr"... 01.AO 4,1.011)01e!:1:Outidifigattoittop-Oxpoi,toirdi-r.,..-!,'u.:;:i,,.e..;;:;;..'.'...,:.:‘441463011.0.:91*4.A vi.,it .04 ;,;.,.;;....,,,,A,..h....;%•...,4',r: ..4,,,,,V.,, •'O.'1.•1..i V'< :•-•Iii:,;1.;TO•:::''.1,:")•' . r.74:•F ,:-4:,i..,: ,rl'••v•••A••••..,,.j`.1',4 .•!..,,."-.:,,.,•,.I .. ,•••;'. 'k...'"'.'(;.,.;V.'. ''';'.O....A.1...':'."......13`..,.:.,,,,,'".,s,.:...-4....11;.‘i...A...,!');...... 0,,1::I::...T,.::-..:;..7;,....,...1..;.1.'..'1 r: .t. ••-.•-.•L.,,1:•:'•:`10'.7•'.•••,4',.• V4 'V.' • `,./1 '-'...I.Aikiwrgallowaimaktg,44,14A4mel "okuoti.,,,yk4:411....m•Avo,..ththsomz....wo,4e40M.,6,etsfougampilatom.kmattto?4•Walemoo 0•4."44004,4vdia,war,,,emak.nrOwmule.r ,oGeo4 , •,$',. I ,,i1L.,,,,,,,,..-.11., Lisa is a Director of the Actuarial Services practice in I Lisa will assist the team with i •:,4,... .,,V-,' MoGiadrey's Human Capital Services unit, providing ' actuarial reports as a subject- ' actuarial consulting services for self-Insured and fully matter expert She will provide i ','• •-p. ,q‘,,': , 1 4'' insured plan sponsors In the public and private sectors. Independent reviews of the • She provides actuarial support for the firm's audits of City's actuarial reports as part ' i government entitles,insurance companies,captives, of our audit approach. Lisa Chanzit risk pools,and self-insured corporations. . Some of the clients Lisa has served Include: 1 . • City of Miami Beach • City of Miami . • City of Jacksonville . • Palm Beach County . ..........:,e,...........,,,,, . ......-,..,,............---..,........„,„.......,............„„....,— , itenlev....ta.,...41MAIWIDCWrOnAVAnn.seraltezi.).0.1.2.11.a...64, gi: Alexandra is a manager In the McGladrey's Information Alexandra specializes In .kt.'.. Technology(IT)Risk Mc/leery Services and business complex Integrated Information . ,,i .-- f..., .•.,t consulting practioe, with more then 1S years of - system reviews and 18 . '0,.:P,iie '' experience.Before joining McGladrey, Alexandra was a experienced at issuing • . Manager In the IT advisory and Internal audit,risk and confidential reports under . - • '- .- ' compliance practices of a Big Four accounting and Florida Statute exemptions. . . consulting firm for mrethan 8 years.Her areas of She will•serve as the • Alexandra Loris expertise Include intemal/external IT audit,Sarbanes- I information technology ' I , . . Oxley Section 404 coMpliance, IT attestation, project consultant of the controls : 1 • •and engagement management,special IT projects and utilized through the'City's • . - program assessments, business process analysis and Information technology system's • . improveinent, policy and procedure evaluation and which will be relied upon as part - development, and system development and of the audit. • Implementation. • . . . ' , • Some-of the clients Alexandra has served Include: , , . - • . . • City of Coral Gables . • City of Pompano Beach , • • Miami-Dade County • Miami-Dade Public Schools • • Broward County Clerk of Courts . . • lanalMitif?..01.11Win..,fioreV41,1 44Nieth,..lagOsser,H......V.-4..vaVirt14,,,W0....,....P7W-4.11.741.7r4ent.W.I.V.p...,...VelniA0V.IfIAI,. Iit'TI ...0..4,..1,7,..4....,".14V6AVA...K ... ...,,, . rrgiing Brian is the Coordinator of Governmental Services and Brian will provide additional :-:DA National Director of Public Sector Services.He has Firm technical support and guidance . • 4..IR wide responsibility for the Interpretation and application pertaining to compliance and pqj of governmental accounting and auditing standards, financial aspects of the audit, . • ,. -,, •' . . • Brian is responsible for the development of McGladrey's when requested by the audit , , government and compliance auditing approaches, team.Brian has over 30 years• Brian Schebler I preparation of the Firm's Government Services and of government auditing Compliance Manuals, experience and Is a certified I public accountant. :10,, Valmtorirw.61141.)1.1,44,10.:'.0.-..myritolodionsi.Pa..40.:01.7).44.011,7Aa.M15.14,..rr,PIVMVIMMAINIVAI.V.traVge.1,1,id,WW11,10,7.-WMP ',10,,MFIPM.1...0,01.9...dian.g(441....foont40,../.WA1str. ' • . . 18O....1, gi n , • PIid d ' • kit glh IN 21 rig , 'r,Y1 EOM 1110 in •{ COMPLIANCE WITH GOVERNMENT EDUCATIONAL REQUIREMENTS In order to maintain'our high level of technical competence,we have continuing education programs for all • partners and professional staff members,which exceed national and state standards,Among the programs we provide Is an annual government CPE seminar which features both local and national speakers from McGladrey.This seminar is geared towards providing our clients and our staff with training on key audit and accounting issues.As We have done in the prior years,we will Invite your staff to this annual seminar as our guests at no cost for the life of our contract with the City.All of the audit professionals of • McGladrey comply with the education requirements as set forth In Government Audlting Standards, •• published by the Comptroller General of the United States.Ail icey members of the engagement team meet • the educational requirements under Florida Statutes, Chapter 11,45.A schedule of OPE hours completed for the past two years for the staff members proposed to direct this engagement follows: ,..1 ,1 ,41,4.NPIMAl4fn:y.1M.WL"1Mi1%,.i oSr'+ttGNItIV407J•'I:-0PH1W.110f1vv:I i Em•to es CPE Hours ;Sr.t`f�.�{��•:iti� 1bn rr m4(.Mr,l.icY l�trL.Vj•Y,•J•$°.�'U0.t'tif L,.� fik _ Donnovan Maginlex 81 d r4w'9,.,.. NjtiLl.• V•.*.a %".0* !'0+ y " lc'".A".A .o,s,�i+iA3 Ddb I ,r�„Ka :;� k<evin Adderley 114._ ;,y �£ ;+ !j'. y p4r f• ! 'Z 1L' M,q,.,1��_ ! ^ y .wir a.,K�,^ "{y,,.q{. 1 1/ �'{1�,{��+, 1s�� J�,r..}�: � �u:ijl� Y��,.,(t a..3 bi� '�6 1+/nFNtI.P�•➢1: tY� M'7,X�l�,lk�.'�`'ir�ixs'y,8 '.4r:+kt 'IarnC'oti.i�Sr�WV��ti,.'lid: =w•o•.'gL rCIL�1,�,� it Valerie Colimon 64 ' r N JOMyN ^;r Brian Schebler 73 .FL'Jn1P+:r'S421ui°Q5'F1GT1'LWNMKkdU4Cv1:PrY✓lAVL4gN'nYW{YIM41:>2fA`At,1r^cyJipll4.1YY3T'ALyMtl4Cdi¢P.LIh4lil'1iTYPk. As previously stated, our continuing professional education programs ensure that all government audit staff . members meet the requirements to participate in audits of government entities. As a national firm,we offer an extensive array of continuing education courses to our staff through local and national training, We often • send our staff to our national training center outside of Chicago which has facilities similar to that of a college ' campus,where they can learn from our national leaders and share best practices with their peers throughout the country. ' I As a national firm with a large public sector presence,we have an extensive list of highly trained resources, both locally and nationally, who can assist the engagement team and the City whenever It is needed. Our resources can provide a wide range of services,as outlined in the previous section entitled"Extended • I Services to the Public Sector". • G ] • f ' I i • 4 19 Rug• ! ; 1; fI Itil) tit tlilii I{f YID St tt TtNUITApFsrAFF, +Y•I 4•1R1 Continuity of management and staff strengthens our client relationships and helps the City avoid Inoonvenlences and loss of productivity caused by personnel changes. It is our policy to maintain the integrity of the audit team from year to year. MoGladrey has no formal rotation requirements for engagement team members In our public sector Industry. Although we cannot guarantee that all engagement team members will return for subsequent audits,our practice Is to return team members to audit engagements they previously served. If a situation should arise where there Is a key engagement personnel change,we will notify the City on a timely basis.We will submit resumes of individuals who will be assigned to the engagement to the City for review and approval. Resumes submitted to the City will have government auditing experience and have equivalent qualifications of their predecessor. Our focus is to attract and retain the best people and provide them with superior development opportunities, Our People Philosophy guides our activities Internally and externally—driving internal initiatives, Influencing how we serve clients, and encouraging Industry and community Involvement. Since Instituting our People Philosophy,we have seen a decrease in employee turnover and are proud that the audit staff turnover,in the last five years has been 17%,while the industry average Is 27%. In the event that the staff referred to above are not available to work on the audit because of an unforeseen circumstance,all other members of our government audit staff are comparably qualified to participate in this engagement.The City will retain the right to approve or reject any staff replacements.As a national firm we have the depth of resources to ensure the City is always served by experienced and highly qualified • Individuals, The risk of a local firm losing one or two of its key people does not exist with us. • • . i a • t I • { 20 f• IN4:4.11::i. .i [ 1 �tir•,r,S }., a �•'i, �Y$ It'1i4�1 gL'JXk Kfe i "a��$ � fin a .y ';r r'• ,i ,�h o-1 rr C` i, i4 - �fV �ki; .•r ';r: 1I1S !Lf ,i Sur l �F? /1',140•4•,:••.: � cg!'1yt,'�ICe,raj��yyt`••a P .',.,•441, ;kV. Methodology and , • N •y Arf Approach ra fI F k' 'y'a i •1.• •, �,4417r-•.`r �,�� t• , (; ','0'M.:' �'4 .If • Describe;the proposer's approach to this audit engagement. This`should include at least the following; • Development bathe audit program t • • With an unwavering commitment to accuracy, our audit process is based on a thorough Initial planning process, open and honest lines of communication throughout the year, and a specific methodology of analysis and quality review that will ensure a successful audit, as well as a successful relationship with the City and Its professionals year after year,We have developed this successful methodology and are i recognized for the quality and thoroughness of our audit process.Underwriters,financial advisers and rating agencies alike recognize the McGiadrey brand and are keenly aware of the quality of our work. Our audit approach is focused on listening to and understanding you and your organization, not only the ' flow of transactions and internal controls,but also your strategies and business risks.This enables us to identify key audit components and tailor our procedures to the unique aspects of the City's business,We hire the most competent people and invest heavily in systems that ensure consistency,objectivity and accountability—for results In strict compliance with professional standards.We also rely on experience. Our senior people are extensively Involved in the audit process and will seek active dialogue with the City's leadership.The benefit to the City is an effective,cost-efficient, independent audit performed within your time requirements by experienced professionals, Our audit process is continuous,whereby we address and resolve issues, new accounting standards and • d changes in your business,etc.throughout the year,not Just at year end.A"no-surprises"audit Is always • , our goal, As part of our commitment to you,we have developed a business advisory approach to audit services, which looks beyond accounting entries to underlying transactions and business systems.We place substantial emphasis on understanding your operations and fundamental business strategies.We don't view your audit as a commodity. Instead,we see it as a tool that you can use to Improve your business. We contribute recommendations about your internal controls,operating and accounting procedures and other important matters.These are communicated both orally and in a written management letter. In summary, development of the specific audit plan Is accomplished through: • Meeting with those charged with governance as well as meeting with City management to obtain art understanding of your business concerns and challenges, Thoroughly understanding and documenting the accounting and Information systems. • Evaluating economic and industry factors affecting operations, • identifying major areas of audit risk, • Coordinating the audit process with the accounting and finance personnel. • Performing testing on interim balances to minimize the amount of year end testing. t •. • • 21 ( jsill'!'' I n �tfiii 't1 S 7w 4y: i:„ei :71 �ii�l�if3: ��lllt i� , rr+i. r Mil `;i ' �{ '``' I•,:,,,0''' proces.zs, for the City's audit is diagrammed below; airs %'3' i i s�yd I i • • lakto is air ^ 1 115,1aii.nIfitd '0 ,�,h „zwitkF }CcJ tbl, ' '=pnfl6111Woraudit - t, itiyi s'' `� 11 i s k.0 ►{1Y:Irpd.hri�bit . 6i7jtlOtly@'• y, ;4? „k..44ih F'4 , iio4..4§0$ .I>:1 nt ` . bilk • :v i• " " ` ,4 ,,,, Y:Ai,'stasg aon roJ • • cloltihI:ntltTtcatl.dn •. • ^? 'o,, .a ' gt i>'-Air i, bn44r0hm'eot .00t45.I I i l '• �'” 3y F v lU is udttrlsk. ° btivtl01!-)q& f`}al,t.0.'riinllo : ;,fi , ,i 1 o,, , y�y4 vtl3gilxt a�tidltpi p • 'resattraJ.ri ' a,.. •*, 1Arf '' . ,,. 'lI _ ,+S�fildlydtkYr 5e:444 1 'Si ir 0- fi'm r fl e' 5141 ':• „1' 7 ••5.t .,,.I54,x, t3I '� ki4 "� *04,54M10 l h£ • 'i.;,f..^ 5 A(5S6 y�D ��.c• �'a.'� � 41 I . .�; ritgi ,fir •--';'.1111.0...� ,•��. d � I '<a� ,`t��.r;,,�;{..�..= R�+u4�Ck f�iet�vuQr(t ik�i�j `y� •,' �� 1��°•�krc,:t_ ��µ''�J,�4��i��':M1�y� ,:��,c,.,. epOrfiirl ....',,,,y7';`-k.'0,1, ,,��,,,,1;7 f' ,.. . '..�egi S'� y�itei,,e�{;i (ro +e of n6iount ,,I,•`' � �hYiv'�� 'tr.'M°��j' .� ,�iizf�,�,.ir�'� ��5 fy ri. F, ,�,': N ,i d' S'�A.' G� r "ii' 1.��n� kV` y n 0. . t.CO jg ;:i;.1, iI • iaitt . ,•f;.•FAn 1i I. i'y';:.:tt'' • ,r X1"1 q . ki y�7, .�{ • Y. uY� i•p �L"�'.Y�,Ti I y i� '�'3�'i 4 • N•al�i�l�09 CS •f5•;�'w6 u�lm4hs,,& ; r'2?i•''`"v� � ri�ltlhfel.� q"rn''t.�rK�pp ' �.. ftgns,�gtj;0ras ; • • toprtS.: ` n r a ' "�uJ {'Gempfl rtvef�`?ttng +P fb5ft# #Id, tc ' � r' �� ;+;J �u �5 ' r: Irl'I h t° KYR„ -)F y4)�i r JS4:t,]�.�`'�lt$z H� ��.Qli -,,,:,;, , •_ • r _gyp .• . •-.•. . , InatiOn Teel ON' i: i i 4 PLANNING PHASE ' The first step of the audit Is preplanning,which involves meeting with those charged with governance and ' ` City management to clearly Identify the lines of communication,perform a risk analysis, discuss audit : scopes and alternatives, discuss any concerns and set expectations.We will also establish a preliminary • - timetable to ensure a smooth audit process. I : A thorough understanding of your organization and its operating environment Is essential fer the development of an audit plan for an efficient,cost effective audit.During this phase,we will meet with • appropriate personnel to update and document our understanding of your operations including business • concerns and challenges and,at the same time, give you the opportunity to express your expectations with respect to the services that we will provide.Our work effort will be coordinated so that there will be minimal disruption to your staff.During this phase we will perform the following activities: 1 • Review the regulatory and statutory compliance requirements within which the City operates.This will include a review of applicable federal laws,state statutes, ordinances,resolutions, debt i ' instruments, contracts, other agreements,and minutes of meetings of the City Commission and various committees. • Review major sources of information such as the City's budgets, organization charts, procedures manuals,financial systems, and management information systems. • Document and update our understanding of the City's internal control processes, • Document and update our understanding of the accounting and information systems, • Consider the methods that the City uses to process accounting Information which influence the design of the Internal control.This understanding Includes knowledge about the design of relevant policies, procedures,and records, and whether they have been placed In operation by the City, • Identify and resolve accounting, auditing and reporting matters noted during planning. , 22 V.11111151 I '(tilY, 1 y s:'.rz x it ;;I;;;i. p ;&';l: f<'r,`i iij ` lift ��Oil .,'�',y�'Y' CI fr .kV : .t s vi` "';.: iti 152 ni ?. ITROL;p.u.viRONMENT AND RISK ASSESSMENT • A,l.,•lii internal Control Evaluation McGladrey will evaluate the City's system of internal control to assess the extent It can be relied upon to ensure accurate Information, to ensure compliance with laws and regulations,and to provide for efficient and effective operations.Our evaluation will Include; • • Review of the system,which is primarily the process of obtaining information about the organization and the procedures prescribed and is intended to serve as the basis for tests of compliance and for evaluation of the system. • Tests of compliance, which are made to provide reasonable assurance that the accounting control • • procedures are being applied as prescribed. • Data Processing Review.A review is to be made to compare the calculating operations of the .computer with the desired results by tests of transactions.A review of controls used in the computer 1 • center to assure protection of files and prevention of processing errors and a review of the data processing operation shall also be made. Risk Assessment ' The development of our audit plan Is dependent on`our understanding of your operations and our . assessment of current risk factors.This approaoh requires the careful exercise of professional judgment developed through extensive experience with audits and Is based on our assessment of risk of error in the financial statement line Items and for the City as a whole,As a result,we will focus our audit effort In . . the Important, high risk areas and minimize our time in the low risk areas ensuring you of a cost effective i and efficient audit. AUDIT FIELDWORK PHASE Fieldwork Is the largest part of the audit process and Includes both substantive audit tests, such as confirmation work, and analytical review,such as variance examination. Interim fieldwork includes many . planning activities mentioned-earlier including detailed risk assessments, interviews of key employees , and systems documentation. Interim testwork includes testing of controls and preliminary testing on compliance and other areas. Computer Audit Assistance �� • McGladrey provides computer audit assistance through its Information Technology Risk Advisory . Services Group whose members have extensive experience and training as EDP auditors.These . • computer audit specialists, together with the audit team will Identify the EDP controls which need to be evaluated and the opportunities to Implement computer assisted audit techniques, During this phase,we will determine the extent to which we can efficiently utilize computer-assisted audit i techniques ("CAATS")which are McGladrey audit procedures performed with the aid of EDP equipment. CAATS may Involve the use of audit software which McGladrey developed for general use on various ' clients or may be developed for a specific engagement. CAATS can be used to perform a variety of time . consuming detail testing such as:footing files;testing for Incomplete data;and sorting files in any order for certain analytical procedures. CAATS can also be used to perform a variety of tests of controls to evaluate either the design or the operating effectiveness of controls, such as:selecting a sample for re- s performance or Inspection procedures;testing access to critical programs or files and testing programmed application controls. I . i Effect of Preliminary Analytical Procedures on the Selection and Execution of Audit Strategies i Comparison of balances,ratios or relationships that result In significant unexplained variances from our preliminary expectations must be considered In selecting appropriate audit strategies for the account balances and/or classes of major transactions involved.Unexplained variances may also cause us to 23 • I is a Rim 'JFHd Illi !r.i •:7`7'4: '$' t 111 `•'iii: C lg • pggpgR3ggpp :�2;?I011ldlld 7A�2?;•I q - I p7�`dti{ ...�f� 4;n. •y piariR d procedures closer to the balance sheet date, For example,holding other considerations coequal,un6* Iained variances may cause the auditor to: • Use an audit strategy which involves testing the details of the account balance or class of major • transactions with respect to the audit assertions affected by the unexplained variances, • • Reduce the scope used for selecting items for testing, • • Increase the extent of sampling. We will be satisfied that all such variances have been adequately Investigated and evaluated at the conclusion of the audit. • Substantive Audit Procedures • • At this point,we will have performed our risk assessment,developed a preliminary audit plan,gained a thorough understanding of the accounting system,and evaluated, and, If determined to be cost justified, ' compliance tested the system of internal accounting control, Based upon the preceding work,we will perform substantive audit procedures tailored to your specific accounts to the extent determined by the results of our evaluation and testing of internal accounting controls, The objectives of the substantive audit procedures and the specific procedures to achieve those • objectives, by significant audit area, are as follows: • Cash and Cash Equivalents The audit objectives for these Items are to form an opinion that:t)the cash balances as stated in the balance sheet properly represent cash and cash Items on hand,In transit or In banks and overnight Investments;2)cash items will clear In the normal course of business and are collectible; 3)cash Is • properly classified In the financial statements;4)adequate disclosure is made of restricted, pledged or committed funds and of cash not subject to immediate withdrawal;and 5)cash balances reflect a proper cutoff of cash receipts and disbursements,This Is accomplished primarily by confirmation of balances, testing of reconciling items and review of controls and procedures, Accounts Receivable The audit objectives for accounts receivable are to determine that:1)recorded receivables are authentic • obligations owed to the City,contain no significant amounts that should be written off and that the • allowance for losses Is adequate;2)proper disclosure is made of pledged receivables, if any;3)the presentation and disclosure of receivables is in conformity with accounting principles generally accepted In the United States of America and are consistently applied. - This Is accomplished primarily by confirmation of receivable balances, review of past due accounts, analytical procedures, subsequent receipts and review of controls and procedures, Investment Securities The objectives for investment securities are to determine that: 1)the City owns the Investments as of the • balance sheet date and has physical evidence of ownership and they are properly valued;2)related Income Is recorded; 3)restrictions, pledges or liens on any of the Investments and related liabilities are identified and adequately disclosed in the financial statements;4)the financial statement presentation and disclosure of investments and related income, Is In conformity with accounting principles generally accepted in the United States of America; and 5)the City complies with applicable laws regarding Investments of public funds. This is accomplished primarily by confirmation of balances with custodians, market value testing with third party sources,tests of transactions and review of controls and procedures. •24 NS'h$ Nq IliS:liyt. 70.,• I,.i.11.1,i14 gag if MI 011 NM �'li(}}jLpppLpIII'�,7,11IIII� YM1yy,`! • A". 1ppuqnp{p¶Fplp •(+ IIGW4f� Y �.III` P1f1 nil .1111 � ital Assets a The objectives for these Items are to determine that: 1)capital assets exist and are owned by the City;2) • additions to capital assets are authentic,recorded at cost and properly distinguished from maintenance • and repairs expense;3)retirement of capital assets, together with the proceeds from salvage and the related costs to remove, are properly recognized;4)a proper amount of depreciation expense Is allocated • to the period based on the asset cost, estimated life and salvage, and use of acceptable methods of depreciation which are consistently applied and adequately presented in the financial statements;6)the net carrying value, as presented In the financial statements, is expected to be recoverable in the ordinary • course of business;6)any encumbrances and liens are identified and adequately disclosed In the financial statements;7)significant amounts of idle capital assets are properly stated, classified and described;and 8)capital leases,if any, have been properly recorded,accounted for and disclosed in the financial statements, This is accomplished primarily by tests of transactions and review of controls and procedures. Accrued Expenses and Other Liabilities The objectives for these items are to determine that: 1)expense accounts include costs and expenses • — applicable to the period;2)all contingencies and estimated future expenditures that should be accrued In the period have been accrued, classified and disclosed in accordance with accounting principles generally accepted In the United States of America. This is accomplished primarily by tests of transactions including a search for unrecorded liabilities, analytical review and review of controls and procedures, Intergovernmental Receivable I Revenues We will confirm all significant Intergovernmental receivables and revenues. Bonds Payable i Notes Payable I Other Long-Term Liabilities • The objectives in this area are to determine that: (1)all long-term bonds, debt and other obligations are • authorized in accordance with all applicable state statutes and regulations and Issuer ordinances and/or , other requirements;(2)all existing liabilities are recorded at the balance sheet date, at the correct amounts;and (3)related Interest is accounted for in conformity with accounting principles generally accepted in the United States of America,(4)the results of.new debt issuances or refunding are properly regarded In accordance with accounting principles generally accepted in the United States of America and (6)the City has maintained compliance with all debt covenants and provisions, We will confirm all debt service and year end balances and agree amounts to debt agreements and maturity schedules.We will obtain and review evidence supporting monitoring and compliance with debt covenant provisions. Self-Insurance . The objectives In this area are to determine that:(1)coverage provided for risk of loss Is reasonable;(2) the self-insurance programs have been accurately determined and properly valued; and(3)adequate disclosure has been made with respect to risk financing, We will verify that claims and related expenditures/expenses are recognized In accordance with GASB 10,We will have a firm actuary review the estimated liability for amounts incurred but not reported.We will gain an understanding of the claims processing process and test controls as considered necessary. l , • • 25 plit,121 tin 111 A <..< •7,ar • Baiaire/Net Assets ievie The objectives for equity accounts are to determine that: 1)all transactions are properly authorized and t • ° classified;2)all transactions end commitments are recorded at correct amounts in the proper period;and 3)all transactions and balances are presented In the financial statements in conformity with accounting principles generally accepted In the United States of America and accompanied by adequate disclosures, This Is accomplished primarily by tests of transactions, review of minutes of City Commission meetings, review of the City's fund balance policy In accordance with GASB 64 and review of controls and i • procedures, Tax Revenues • The obligations in this area are to determine that(1)deferred property tax revenue accounts,If applicable, are appropriate;(2)tax revenue reported applies to the period In which it has been recognized and is properly classified; and(3) the presentation and disclosure is in accordance with accounting principles generally accepted in the United States of America, This will be accomplished primarily by confirmations,tests of transactions,analytical review and review of controls and procedures. Enterprise Operations • 1 The objectives for these items are to obtain reasonable assurance that: 1)revenue including charges for services, costs and expenses as reported apply to the period under audit;3)there is a proper matching of . Investment Income, Interest expense, and other expenses;4)the methods of recognizing income and : expenses are in accordance with accounting principles generally accepted in the United States of America and 4)the income statement fairly presents the results of operations. This Is accomplished primarily by tests of transactions, analytical review and review of controls and procedures. COMPLETION MD REPORTING PHASE Our approach to the audit would include, at a minimum, the following reviews of the financial statements, audit reports and workpaper files; Review Nature of Review , Engagement Performance and Administration Work of all assistants In detail,including workpapers, Review, done by In-charge financial statements, audit report, compliance reports and management letter Fairness Review, done by engagement partner All workpaper files,financial statements,audit report, and/or manager compliance reports and management letter Partner Review,done by engagement partner Financial statements,audit report,compliance reports, management letter,workpaper flies for significant and critical areas, concurrence with conclusions of engagement team Concurring Review, done by concurring review Workpaper files for significant and critical areas, partner concurrence with conclusions of engagement team. 4 Report Review, done by independent report Financial statements, audit report, compliance reports review partner and management letter 26MaMhn >�ppfl 41 q� I L, r:::•: Y»3 `,:? t4;>, fig 1'i;.t IN IN IN s'AN SI : Air Ehe cgrtclusion of the audit process, we will Issue the required opinions as described in our • `t't °Y a.understariftitg of the audit services requirements. Our management letters will discuss internal control I hj recommendations and weaknesses we Identified as part of the audit, if applicable. The letter will also Include observations about accounting methods and procedures, business and industry practices or Issues, operational ideas and suggestions to further enhance the City's operations.We will advise you of any new accounting pronouncements that have been or may be issued and indicate their potential impact i • on you. drgartizatioh di*the aueilt'team arid titlee.of team members and approttimate.amount of time • I each such class atf nldmiier will spend art the audits eased on the complexity of the City and our assessment of the audit work to be performed, the following ' table represents the approximate percentage of time each level of staff will b`e performing on the various segments of the audit engagement. Supervisors/ Partners Manager Senior Associates • - Associates , Planning Phase 2% 6% 10% 5% Fieldwork Phase 1 8 20 25 Reporting Phase — 2 6 10 5 Totals 5% 20 % 40 % 35% • • ' '• • The n-arftes Of the p trier anti mariagerthat Will be assigned to thie engagorrt'erif and.the ' ` OxtCnt Of their invaiverii•en> with this engagement. Arty substitution of these indiVidUals rhuat a be 'ppnovz d•by the:Audiit:Coniniittee prior to any`change of staffing. Donnovan Maginley and Chantelle Knowles, the partner and the manager assigned to this engagement, currently serve on the audit of the City, The time they will spend on the audit is outlined above. As mentioned previously, McGiadrey strives for continuity of the engagement team members from year-to- year. If for some reason any key member of the team were unable to perform services for the City,the . 1 • Audit Committee will have the right to approve any such replacements to the team. • t • 4 • • • 27 •">3 ) s••,g� I: .th! M?; I � ( kv• El itil kig MN EN ,, ka NI M.1 ill: MI 1 int IN Mii Igi . 1113 ipi .: i:i :.---...-, '. . . . . . . mg ,A, : . ..)... .....: ProptiSed Sdhedule ortlie engageMent. . . „ . Ai gtil•' • ....• '. . , . e3N • • • • • • ' .. '- -' ' • i The following chart depicts our proposed audit timeline for each fiscal year beginning with 2012 which I may be modified based on discussion with City staff during cur audit planning meetings: 1 1:1`.--f.),',N;;IV34,1.0141i,,,itit4:Offilitittitill ' '‘‘'6':.4 fk::?7.x. ',:_:ci-4:.°):filreitt. !WI 10- w • *ii,: :!: ;‘,.:ig...,10,,,,vog!i!ovpp:1,;*vm,::!:ii pNw ..f..1§,i.d..i§....mwv,!ik,::::u,i.,•ei:iii:::?: !i w..$.pilo".:imv,i..i.&,,:i!i....im::.www. ,.,,,,?!:."-.F.:':Nliii.t.mommalg,,R.:4.,,,,,tmi,,-0 mom 0.4,:,,....:?.0..,:vor,,,,,t1,.i,,:,,,i,..i,..,,,,A,,,,:,..:,„r.:.0„„,.1 k.,,...''•g.n. I Pre-a6dif meeting Planning . -. ,.. . . . . . . . .... . ... ............ . isue and dic uai ailidit Plan , TrilrimirMIITINVOYM:MiANK11%ilmOi igiaqiNiii iiggiN Ming Mi0iii6IN:44]OMR g M,'4i•APIOANii ,.,rg ':itemildadg:,..4i. ail ni.E.I. 62.0.g.M.tigi dian't al0A , gi‘..•iMix',i:Oil.a.iA • I'liIfir•iii au• faCtivil es . IP lill a•uclif aCtivitiee " ' - ' '• • . ... .. .., .. .... .N.MISIMPANANION.W.gliiiii•mieliming: 4Pim'r•,..:Imm ,mi.,ti,1 egg 4.p„jog aoi.i Aviim iopmg . . 1 ...ASON.OHISNIN:ik%.iM MAO 4.06:.WMOD ia4M MOM P.i:Mb MEM NAM MOM 1. 1liai6aliitriieri.ts and corrections I I . ) 1 to final State'ments ' • I .. ... ., . . _ I .i1 •. !I 1:5••Faft maanriagem" enelttei • •-• - • i , I .. Issue audfOri'report fseueMagenientlete . ....., _......... :• ' ' .. ... ... ... .. .... tissue single audit reports " •• . . . IlExii conference- I I • . I 1 •. presentation of audit reports i 1 . . . and management letter to City , . ; ; • 1 Commission 1 . .„ .. • . . - - ... .„.•.• ' i • Progress conferences will be held with Finance pepartment personnel and the Audit Committee . , . . . • throughout the engagement. . . . , . . . •: ..r.: ... My.oriMipoted iteof int6ithot piklit'aged/.other'City faft". • ' , . -, .• -. . = . . We do not anticipate the need to use any of the Internal audit staff of the City while performing our audit. , . . , \_ : . 1 ) . t i 4 • . 1 28 4 ,, ..c.:,.; i',1 ton pg • L11 o . l •PiNi1 Nie.a !i:l.. "') ‘14 I ! • , , mi, g% N itig col. N It •I El hlIN MI lb . .1,, BA NM 11 1111 11 UM ITO , 111:ii 03 Atti, inV ". , . .. • - , .. . . ••• ; . •'''': '''' P.riAld•tit least•five(5)'client teferartes within the South Fidida&ea(t,e,within Miami . .. .. . . .. . . •:',..: •,,''.;• Dade) BtoWArdy or'Palm Beach County, • • : . . ., . . All of our engagements are of equal significance and Importance to us.Providing the highest quality audit services,to every client is our primary goal.All of the following engagements were served by McGiadrey as the prime contractor-none of the engagements below were Joint or shared engagements. . We are proud to have assisted our clients who participate in the GFOA Certificate of Achievement for . . Excellence In Financial Reporting Program to qualify for that award.This certificate program is recognized . as the highest award in governmental financial reporting,The GFOA Certificate of Achievement has been . • . awarded on all of the financial statements McGladrey has audited for our governmental clients who . participate In the certificate program.The personnel assigned to the Client Service Team have had a successful track record in assisting clients In obtaining and retaining the GFOA Certificate of • Achievement, • Additionally,two members of your client service team are, or have been,technical reviewers for the ,GFOA Certificate of Achievement Program, , . _ •:.: . ••'• :!... •'.I,;• ;,,...•7::,ii.,..-.'.•:•••:. , i': ..'-1- • . -.....'•Ernikplont.::„.....•:•"•:.. ..._.• ••, ...:.:;••• ':,."'.:'.• ' •••,- ..,."... .'..—.: , 1'1/Willie ,! .h.4itg44J:nt," 19e':- ''' •••••:'••%':••!'‘.grilv'Ohi',/1.....; ::i*I.'.',..::•'DCP.OtA4h •-i)01,it:li,,,,,••Af ..• :-:". ''•-•- • 01140* :01114",'Y910,r4. .-- :.•••.:f-:I:Wdiqi.-...:::,,:* :•.•:5-...-..,....-•'sa....-Toiiir: ..•*.1.1.tp ..Vent"..q.zP••••• ,.:-...,...:. ::.::4,i, • — , . , . Brett Diana Gomez ' Friedman Finance Director . • City of Coral 2004—2015 Finanolal audit&single Chantelle 1,200 305.460,5275 Gables audit - Knowles dgomez@ooralgables.00m • , . i City of Miami, Donnovan Scott Simpson Dept.of Off- 2007—2011 Flnanolal audit&single Maginley 705 Chief Financial Officer . reet Parking Staudit 305.373,6789 Anil Harris ssImpson@miamiparking.com . .. . - Donnovan Maginley Matthew Lalla ' ' City of Hollywood 2009—2011 Financial audit&single Jaoqule 1,611 4. , Finance Director • audits Langiols 95921.2321 . . , ' Syed Ibrahim mialla@hollywoodfLorg ... • _ . , Brett . Friedman Kim Moskowitz City of Coral 2000-2015 Financial audit&single Controller Anil Harris 1nn 2" , 954.344.1092 Springs audits Jerry Gray knin©coralsprings.org . • Donnovan Suzette Sibble . City ofMaginley Flnanoe Director ' Pompano -- 2006•2015 Financier audit&single Adam Nielson 1,000 954.786.4605 audits Beach Syed Ibrahim suzette.sibble@copbfLcom . . II . . • 29 itt VII lifl . 11 4::::4 MI ER it uu 1.ca.1.1) am Erian4. , , • . ' ;,„11i.f ,••+,(( ., .1;\,kt , „ s`':110`F t � + �iPr l 'i �11 .. IS , D lqAm t is '” rii' J ty t �a,l -1+1 • �r; a t 4 Previic us Simla ) c ,t ,, "• I,i ,d ,' , :: G,, § ' 1 I afyy �? rl• s,i �1{+A7lk, tti' e`� r+fir}tY��n •a�'. ! -riN( i , 6. t _Projects �I s ty• •I Y '• 15•r ,, 4f 3i ��C1;fl t�k 1 fi�'.a ,•":'.'"' ,kl ! • '05�ily't,,;'1 ,�L t a nT;fiyn ySh et ;• a ••I '• il y P3 °' i�,Iwl`. a • m 1 +• s 4{ huh it ,t, +i: ,.,,;i,,,,,:-. :ti ' )','I!::: ', A iisl.of'a minlMcil i of ten similar projects must be submitted. Information should.include: ,'• .••..1: • ,.v: + Cllent mime,address,contact phone rtuinber,e-mail•eddress,and fax number I ,rt Descriptipn psimilar scopeof S0rviCe . l Month srcyour the project was �tbd snd completed d• • • Municipal Client Name and Description of scope Fiscal Year . Contact Name,E-mail,Phone,and Fax Address of services Start/Completion Date ' City of Miami Beach Annual audit (GFOA September Patricia Walker,CFO " 1700 Convention Ctr,Dr—3'd Floor Cert.), Federal & state 2007—2011 Ph: 305.673.7000 X 6461 Mlaml Beach, FL 33179 single audits Fax:305,673-7795 patrielawaiker@mlamlbeachfl,gov • City of Miami Annual audit (GFOA September Pete Chircut,Treasurer 444 SW 2 Avenue Cert.), Federal & state 2007-2010 Ph: 305,416,1945 • ' Miami,FL 33130 single audits Fax: 305,400.5254 I ( pchircutna,ci,miami.fl,us City of Miami,Dept.of Off-Street Annual audit September Scott Simpson,CFO Parking 2007—2011 Ph:306.373.6789 190 NE 3 Street Fax:305.371.9451 Miami,FL 33132 i sslmpson@mlamipar!dng,com City of,Hollywood Annual audit (GFOA September Matthew Lelia,Director of Financial Services 2600 Hollywood Blvd. Cert.), Federal & state 2009-2011 Ph: 954,921,2321 Hollywood,FL 33020 single audits Fax: 954.921.3554 ' mialla@ho llywoodfi.o rg City of Coral Gables Annual audit(GFOA - September Diana Gomez,Finance Director 405 Biltmore Way Cert.),Federal&state 2004-2015 Phi 305.460,5275 Coral Gables, FL 33114 single audits Fax: 305.460.5371 domen coralgables,com . City of Coral Springs Annual audit(GFOA September Kim Moskowitz,,Controller ; 9551 W.Sample Road Cert) 2006—2015 Ph:954.344.1092 Coral Springs,FL 33065 Federal&state single Fax; 954,344.1198 audits fnkcm@coraisprings.gg • City of Deerfield Beach Annual audit(GFOA September Hugh Dunkley,Finance Director 150 NE 2 Avenue Cert.)Federal&state 2006.2014 Ph: 964.480.4225 Deerfield Beach,FL 33441 single audits Fax: 964.480.4223 __ hdunkley_©deerfield-beach.com City of Miramar Annual audit(GFOA September Celeste Lucre,Finance Director - 2300 civic Center Place Cert.) 2011-2013 Ph:954,602,3049 Miramar,FL 33025 Federal&state single Fax: 954.602.4469 audits __ cdlucia@cl,miramar,fi,us City of Pompano Beach Annual audit (GFOA September Suzette Sibbie,Finance Director 100 W.Atlantic Blvd. Cert.), Federal & state 2005.2015 Ph: 954,786.4605 Pompano Beach, FL 33060 single audits Fax: 954.786,4604 Suzette.sIbble@copbti.com City of West Palm Beach Annual audit (GFOA September - Lynne Green,Accounting Manager 401 Clematis Street Cert.), Federal & state 2006—2010 Ph;561.822.1329 West Palm Beach,FL 33402 single audits Fax:561.822.1349 , Igreenna wpb,org g..04.41 qR •;. 30 i `li i l i'f . j ry nk• Ii k:, tl�lll i r J • • • • , •, • . • ..-• • • .••• '• , 0,0,6 •• • •-• • . . , , , • • .* • • • • .• • . • • Training • • •• - • •i• • • . •• i • .• „ . . V.0 .;„•,. .; 1140,!,' or'fIrr.' x,:.! • mv... • ct• .• • . " • ' ;•.•••,..,,c.• .•. 1SY" • aff' ;,;.4 . • . • 0,14 - . ' •- • ,I4Vc% 4 . • 'i.-2•••,,ke.•. • • .', .1•3z; We 1 .' • '•••-• .1%• he City degits t iliiflf ufflrb th .lOvel•d•r Paining el lit perserineassinect te • ••• the intertial autilt-ftifietion 4rid irt:aeeelintIng: ricoltiens•, The'eirepeeel shoold Indicate if the • • trn ocindudts erly train rig it employees grid If'City per8onriel totod.W,tend.$uoh1fairlirig, , • . As mentioned previously,we provide an annual government OPE seminar which features both local and national speakers from McGladray.This seminar Is geared towards providing our clients and our staff with training on key audit and accounting Issues.As Indicated before, and similar to our policy in the past, we will Invite your staff to this annual seminar as our guests at no cost for the life of our contract • with the City, • . , • • ° 1 • • t!,',1!• ai NM 11.1 no mA ' ! •;r•:;;,,,i.,1 i ,Yr ,. • x � �it>'1�t •�'a+'�• ,s,: � f L�•J I;ii� ° yam` �fi tn1 ' + i t E I r I• stt S 1,V,t I, y fI S Fee informationMfr .,•. r :, ;Iv�os {v a j:z :,F i , rt; r 1 ,fi5r'': 'I ','4.-e-'''',',0� I q 1.0g y ' ill, i'..t l}y ir.gV ,.pd(J Pdz TLP 4:I.y r ;`;I s c r s -•4 t}t,�t� i l . 1'60, : !40 'I " •11'0,1,4:: r.• fi• r + rt r. 1 :pt hFl l�, , 7 N]F n t ., 0 i• rt y 1. i - i Cost information must be sUbmitted,Notwiths1Whdinj any fed subtnitted,the City reserves ! '.'''•• • ;'. the light to further negotiate Sartre�Mth'the su0dessful Proposer: Our engagement costs reflect and Include the audit objectives and scope of services outlined In the RFP, ! MoGladrey's policy Is to estimate fees at amounts that are highly competitive but that will enable us to : ' respond to your needs and provide the quality of service that an organization the size and complexity of the City requires. in general,our fees are based on the level of experience and training of the individuals assigned. Our fees involve a substantial Investment by McGladrey in our relationship with the City. We trust that our fees demonstrate our sincere Interest in contributing to the City's long-tem success. McGladrey's proposed total all-inclusive fees for the audit of the City's 2012 basic financial statements, i are as follows: i • CAFR I , , `, Level Rate Hours Amount • , r Partner 300 62 $ 15,600 • Manager 200 132 26,400 Senior 140 460 63,000 ' Staff 100 250 26,000 , , TOTAL 884 130,000 ° ' Less Courtesy Discount 16,300 NET FEE $113,700 • ' OMS A-133 Single Audits • c ' Level Rate Hours Amount • Partner 300 20 $ 6,000• • • 1 Manager 200 52 , 10,400 Senior 140 100 14,000 Staff 100 80 8,000 TOTAL 252 38,400 Less Courtesy Discount 16,666 ' NET FEE $ 22,735 Management Letter • Level Rate Hours Amount Partner 300 2 $ 600 ' Manager _ 200 7 1,400 • Senior 140 8 1,200 Staff 100 12 1,120 TOTAL 29 4,320 1 Less Courtesy Discount 2,045 NET FEE $2,275 t , r p e 32 rit ` ;`•Ita 71.Ni II. a191MM19 1➢I,Mk/ •�+N7,'tsEA1 ....+ t RIN !Ellil IN 2 11:1 IN NM .iim es , faii NI ' r Rstv $0. •!:n4 gio R.Gdevei6 mer_.. 10 RDA go . . Level Rate Hours Amount • • ' Partner 300 12 $3,600 ! Manager 200 42 8,400 • Senior 140 40 5,600 • Staff 100 60 6,000 TOTAL 154 23,600 • Less Courtesy Discount 3,100 NET FEE $20,500 : . . Parking Systems Funds(PSF1 , . Level Rate Hpurs Amount ' Partner 300 12 $3,600 Manager 200 42 8,400 .., • Senior 140 40 5,600 1 Staff 100 60 6,000 • i TOTAL 154 - 23,600 '— Less Courtesy Discount 3,100 NET FEE \ $20,500 • : I • . 1 . Visitor and Convention Authority(VGA) : , Level Rate Hours Amount Partner 300 12 $3,600 Manager 200 42 8,400 Senior 140 32 4,480 Staff 100 54 5,400 • • TOTAL 140 21,880 Less Courtesy Discount 3,680 1 ' NET FEE • $18,200 — . Convention Center . ' , . , • Level Rate • Hours Amount • , Partner 300 12 $3,600 . Manager 200 42 8,400 ' Senior 140 32 4,480 Staff 100 54 5,400 TOTAL 140 . 21,880 ____ Less Courtesy Discount 3,680 NET FEE $18,200 . • . / • . 1 1 . . 33 NEI IN , . . • I cm., go No tv'Z& ifli ,. .• In II TAB II 1 ' . . i $C,.:,.M1r 6 OY2 9W,5 AMCPt ICYCYOiO nnnr Ire 1 11� oC'�,t 3, 'u l El ni i %F'!'+{ Iii PSE Ii K' vo SafeNe(`th boyhood Parks (SNPk Level Rate Hours Amount Partner 300 6 $1,800 Manager 200 18 3,600 Senior 140 16 2,240 Staff 100 20 2,000 TOTAL 60 9,640 Less Courtesy Discount 140 { NET FEE $9,500 Building Better Communities Bond Program (BBC) • .• ' Level Hate Hours Amount : Partner 300 6 $1,800 Manager 200 18 3,800 ' Senior 140 16 2,240 • • Staff 100 20 2,000 TOTAL 60 9,640 Less Courtesy Discount 1,140 • NET FEE $8,500 Children's Trust Program (CT) . Level Rate Flours Amount • Partner 300 6 $ 1,800 ` Manager 200 18 3,600 Senior 140 16 2,240 Staff 100 20 2 000 ' TOTAL 60 9,640 • Less Courtesy Discount - 140 NET FEE $9,600 } ; ; GRAND TOTAL - _ $248,610 i • Additional"As Needed,"Auditing Services For additional work at the request of the City,we propose the use of the following rates,as described ' below: Hourly _Level . Billing Rate ' Partner $300 , Manager 200 Senior 140 Staff 100 d The actual fees billed In each year above will not exceed the amounts noted above unless unanticipated +, changes In the scope of our work are required due to(I)a change in the operating size of the City,(ii)a I'I t change In applicable laws,regulations or generally accepted auditing standards as applied In the United States,(ill)new accounting standards are Issued that have a significant effect on your City andfor(iv)the ! incomplete or untimely receipt by us of the Information on the client participation list which significantly , t affects our ability to perform our audit procedures on a timely and efficient basis, 34 ;11 Kg ,Y, ffil FA 1 f • • • 11;:i ••11 I,)'; " • • "s,...);Ar r `J•1 trit017 '1;1 •4•",1"0 ' • ••"' ,4',;; • ,411 I : Evidence of •• . •, ..• , • • •• •4‘,Z.£ • • ' '1• 1 Stabili 0•• -• • ty 11.-f . • , • )' ,AR: •. 1,••, : _L,L• 0143p,..>- r•De, • ':,../,`,.11•At• .11,4 g " I • • • h d t3C,4:::0•1:'•11;A.. 47:`" '•''.1'•;:t111;04141,. • • 1: ' , .71t41';i14,•%).1,4417.Y' .'1%; • . '!' •rs Alt Proposers must attaoh finarViar statement, balance sheet or.difierasstoorice that. •• :":1•!•••••.'4' indicates the financial oapability and viability of the Propooer. l'he 8tibmittOcf information must either be certified by an Independent CPA,or in the case of a banking reference,by ••.;. • 7; an appropriate banking offictal, • • ,. The firm does not produce audited financial statements or en annual report. Financial Information about the firm is provided only to our partners for their personal use. We are not aware of anything In our financial condition that would jeopardize our ability to fulfill our obligations to the City. Financial Information will be made available to the City, at its request,at our Miami office. • , . , . , • • • 1 1 36 4ipj 17.0, fil tIl 10C,6 11;1:1 :gggl ,. • . ,....'''1,1'.,11.:,14.1.1',',0•••')/",‘.'',..400:.. .':i'•••':.'''''''iai. ••• -wt4iti .:.• . • • •,• .f;k1'.:.',..";:•••.-''';': .• . • . ••. ifirl.!.;,...•::::, ' . 91,.v, , . - -• • . 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' ,..,..i..-.- 1,fti..„.1,,,,.•T.r:,....,..ig.:1;,,o,Ke•hsk:4,..5.0;Akx:vi.,,,,,. • • . ,-„,;.:-.,...t;:.,.,.,•-.....„4„4,,,?.2., • .. ...... .,..,-1.,•.,•,.:•.• 1 4.!.....,-....',4•;'e...,:i....,..,.: ,..,....• . 4.1,.},t.. . .,•,,x,,7,..10",0,-,4,..;,,t,,,:„.•!,..k...,-!,,,tirisq#,4-4,t,. :.!. , ..).41,0..,,,...4,,• ... •,..,L.11.,,r;,p,,,... . . tilfOrrnatiOn • * ' ..''''.: "4",(' :•,'','.:.:Z•,.*:• ••','",'AIY,01 '43-`'ilV,'".....-':,.;!.--. ,. • ,T$41:./.,:•7 Al.',F..::''j;'''.':•;. 1)4',.., • .. , •...,• .•.t„.,SiA,,If.f...,:,....::..., „..,,,...„.. , ... ,.. ,,,,-,.. .,,,,,,,.•,,,!,,6,1kk v ,..:!„.'4. ••••••,...„ •..iim „. ••:..,.°...!•-•'••try.. . -..-,..,...filsiiir $.4'42,:..1.....:• ' :: '''';;•.,'. . •-';.- ' •• ••::!;iir.7,Xi),,4:i'tr;?>i'lAY- :s-. ;•.:• •,...,•:,l'k.:°"' 1;',•,,.....,.•;?•.,i!..1,.;',,,,S`.•:- ,....•,.• 2.''''.i'.1.7'. VIJ:.... *i'.* . . :.., 1,1.4.:,,::,.. "";41:0-:''''''''''..44:. `i!....,:;•,14 g.Et."...,i 3:..: k i,IP11•:..i..;f:Of.4'10'1'.,..• . • • 1.4. ,,h,.,r: • .. ..., ....-... •.....k.,.:,.... i......,p?„,y.' .,,t,.,..opp.:-.,,,,•-•--,44,,!,..„. . 4 ,;.;,c,., , • , .• N. - ,,,,," .,:,..F.,,,oxygfi„,,,.dio:(3,...f.„,..,..is......,:.,1,%,.....:'.YA.-. , . Pb8'i perforMahce information Will be collectedti on all PrOpesera, rroriOSOrt 01.'6 requited.to i l'::,.:,:...:,;::',-,:;:„.'".,',•,%,:',...:!.... identify ed submit their best.prOJeets•,, Preposers•Will be required to send 001 Performance , i ...:..':' ---...:.,-.41,•;:, Evaluation 8.orvoys to baoh-of their otiontg.., . . .,. , .•.:..1...: _,:,. . . . , e•;.:,-.: •••• '• ? . . • , . . We have prepared and sent Performance Evaluation Surveys to the following four clients: • . . • i . • City of Coral Gables City of Coral Springs . , . • City of Miami, Dept.of Off.Street Parking , . • City of Pompano Beach • . . . We will follow up with each of our clients to ensure that they return the completed surveys to the City of • . . . Miami Beach's procurement diVislon for your review, 1 1 : . • „ '. 1 • \ i . . . . . , ' I . I . i I , . ! , / r . 4 ' I ' 36 Ill.ci 11 li.::fi. • Ogg o NI 1111 FM rfk: i Ma IIN 1:fiib.g KO,• ir', q .?•ti'i; Mb '`3.i . ;:i'1,•;‘.; .''•'0 • Po•.•Y V Vkflpf •v AA11SP Y:TIY011 TITrrn: �A{�t �'�1'�k£s?S •,,y'�'i Si J Ei!rii I , 1 11 APPENDIX Peer Review Reports Biographies I Insurance Check List • • Proposer information • Acknowledgment of Addenda Declaration Sworn Statement on Public Entity Crimes , Questionnaire Acknowiedgrnent Letter Disclosure and Disclaimer Declaration: Non-Discrimination.in Contracts and Benefits McGladrey LLP—Benefit Listing Reasonable Measures Application Substantial Compliance Authorization Form • • • • I • 9 . 1 I 1 • - i IMO Y) 1 PEER REVIEW y 'IIF:.:1'{ • • 1 1 910 E St.lout,Stmst,moo RO.Rot 1190 u.N pdegaold,Md MEM 190 OPAs&AdUlaors 417,866.6701 Fox 411465.06N errnKbkttcam System Review Deport To the Partners of) MoOladroy ds Pullen,LLP and the National Peer Review Committee of the American Institute of Certified Public Aecuunfants Poor Review Board • We have reviewed the oyster!)of quality control for the accounting and auditing practice of MoOladrey 36 - Pullen,LLP(the firm)applicable to non-Sl3C loners to effect for the year ended Apr1130,2010. Our peer review was condueted in accordance with elle Standards for Performing and Reporting on Peer Reviews established by the Poor Review I3osrd of the American Instituto of Certified Public Accountants. The firm is responsible for designing a system of quality control sad complying with it to provide the firm with reasonable assurance of peitbrtning and reporting in conformity with applicable professional ataudards In all material resppeets, Our responsibility is to express an opinion on the design of`the system • • oi'quality control and the firas's compliance therewith based on our review, The nature,objectives, aeope,lunitstions of and the procedures performed In a System Review aro described in the standards at A , , .�l . �.tu- .r. M required by the standards,engagements selected±br review-included engagements performed under • GovsrrrmsntAuditing Standarris,audits of employee benefit plans end audits performed wider PDICTA. • In our opinion,the system of quality control for the accounting and auditing practice of IvIeGladroy 3c ' ' Pullen,LLP applicable to non-SBC lesures in effect for the year ended April 30,2010,has been suitably •designed and complied with'to provide'the firm with reasonable assurance of performing and reporting in ' conformity with applicable professional standards in all material respects, Mons can receive)a rating of pass,pas with def Ianoy(tss)ur fail. Mogiadrey&:Pullen,SUS'has received a poor review rating of pass. 421\1,1 L4AP December 2,2010 ! A • exile IE'117C 8N8enu111111ii4S"64°aM S 1 - { • • I 11 6~4 'AMY/. WIMP „ BIOGRAPHIES r 5 ;v v'�i'• ISINg gqINgggg�u'yrlI,, u 416 Bob FisiOnnann ``'�'" Client Service Partner t(JI bob.feldmann@mcgladrey,corn Summary of Experience Bob heads up our FI'orlda Public Sector practice,Bob has over twenty-two years of audit and accounting experience. He has been with McGladrey since 1990, Bob's experience Includes serving as partner for various county and city audits, His experience includes performing audits in accordance with Government Auditing Standards,OMB Circular A-133,Federal Single Audit Act, Florida Single Audit Act, and the Rules of the Auditor General of the State of Florida, t Professional Affiliations and Credentials Bob is a Board member of the Beacon Council and Trustee member of the Greater Miami Chamber of • Commerce, He is also a CPA licensed In the State of Florida, a member of the American institute of Certified Public Accountants;the Florida institute of Certified Public Accountants,the Government Finance Officers Association,the Florida Government Finance Officers Association, and a member of the Florida international University President's Council, ' f Education Bob graduated from the University of Florida In 1984 with a Bachelor of Science degree In accounting. • He-received his Master of Science degree in taxation In 1988 from the University of Miami. Bob has 92 hours of continuing professional edudation for the past two years. Representative Clients • • City of Avontura • City of Cooper City • City of Coconut Creek ` ' • , City of Coral Gables • City of Deerfield Beach • City of Hallandale Beach • • City of Miami • City of North Lauderdale • City of North Miami • City of Palm Beach • Boca Raton Airport • Broward County Gardens • Authority • Miami-Dade School • University of Miami • Seminole Tribe of Florida Board • t ' { t4 k `` �� IMMO MOWN `"°"" BIOGRAPHIES 1 k1 41�I9 y££ij'i 3 6 g,'iZ ' f iti`i"e AA,' Donne/till Maginley Engagement Partner donnovan,maginley@mcgladrey,com Summary of Experience Donnovan has 20 years of audit experience and has devoted his entire career serving the public sector. Throughout his career, he has managed and supervised audits of very large and complex municipal • engagements, including City of Miami Beach, Miami-Dade County, Miami-Dade County Clerk of the Courts,13roward County, Lee County, and City of Miami,His recent experience afforded him the • opportunity to Implement GASBs 53 and 64. Donnovan has been involved in special projects that Include • = assisting In the development of an operating budget for a municipal entity that was declared to be In a financial emergency, the preparation of comfort letters In association with various bond offerings, and the formation of an Indirect cost allooatlon plan that aided in the allocation of applicable cost to grants. Donnovan's extensive experience enables him to provide timely feedback and"best practice" recommendations relating to various accounting practices and Internal control Improvements. Professional Affiliations and Credentials • Donnovan Is a CPA licensed In the State of Florida, a member of the American institute of Certified Public Accountants, the Florida Institute of Certified Public Accountants and the Government Finance Officers • Association. Education Donnovan holds a BS degree In Accounting and a Master's of Professional Accounting, both from Barry University. Donnovan has 81 hours of continuing professional education for the past two years. , • • Representative Clients City of Hollywood 4 City of Miami * City of Miami Beach • • * City of North Miami • City of Pompano Beach City of Sunrise Broward County * Lee County • Miami-Dade County * Palm Beach County • Mlami•Dade County * Palm Beach County School • School Board District • i I , d • k>; MAW 4:.:NY 4)40W ...,. WW„ BIOGRAPHIES h re;,• �`�:{ Jim W fah `s`` lk Independent Report Review Partner ;p fames.watch@mcgladrey.comn Summary of Experience Jim Joined McGladrey& Pullen, LLP In 1976 and was named a partner In 1988. He is a member of the + + Professional Practice Office of the firm's Eastern region. Jim has provided financial and compliance audit and consultation services, primarily to clients In the public sector,consisting of cities,counties,school • • districts and various for-profit companies. He Is also very active in the firm's internal inspection program. Jim's current role Is that of an audit and accounting specialist. In this role, he provides advice and consultation regarding complex accounting matters,assists engagement teams in audit matters and is responsible for ensuring that reports Issued by the firm comply with professional standards.These clients are primarily in the public sector and are from all regions of the United States. Professional Affiliations and Credentials He is a CPA licensed in the States of Florida and Minnesota, a member of the American institute of Certified Public Accountants and the Minnesota Society of Certified Public Accountants. • + Education Jim holds a BS In accounting from St,Cloud State University. Jim has 75 hours of continuing professional education for the past two years. Representative Clients ■ City of Coral Gables • City of Coral Springs City of Deerfield Beach d City of Hollywood ■ City of Jacksonville a City of Miami • City of Miami Beach • City of Pompano Beach • City of West Palm Beach • Glades County • Palm Beach County • Jacksonville Port • Jacksonville Transit a Miami-Dade County Authority Authority ' Transit ■ University of Miami ■ South Florida Water Management District • r + • •r•,ro.r ouxow „v AMOY mMv BIOGRAPHIES PIr14 :M • 101111 VA yl;N, �$ Kevin Q 1•deriey SBE Partner kadderley@sbccpa.com Summary of Experience • With over 20 years experience, Kevin Is principally responsible for the quality control of reports issued pursuant to the Government Auditing Standards, Single Audit requirements, Florida Rules of the-Auditor General and other compliance requirements pursuant to laws, regulations, policies and procedures. Kevin has conducted planning and developed audit programs for a variety of governmental Industries including labor, education, transportation,and general government. • Professional Affiliations • • He Is a member of the American Institute of Certified Public Accountants, the Florida institute of Certified Public Accountants, a member of Florida Government Finance Officers Association and Finance ` • Committee Member,Miami-Dade Branch of NAACP. - • Education Kevin holds a BS in Accounting from A&M University In Florida. He has 114 hours of continuing professional education for the past two years. • • I ; Representative Clients ■ City of North Miami Beach ■ South Florida Water Management.District ! ' ▪ Village of El Portal ■ South Florida Regional Transportation Broward County Authority ■ Miami-Dade County ■ Workforce One ■ Broward Clerk of Courts ■ Broward County School Board ■ JMH Public Health Trust ■ , Miami-Dade County School Board • • I i . • • • 1 ,..�..,, �,ue,i a. „,.1.„ BIOGRAPHIES 411 I AI='l �� K't}•,::j s^ij,F.`} { i Fii "`''"' Chantelle Knowles Engagement Manager chanfelle,knowles@amcgladrey,com • • • Summary of Experience • Chantelle has over ten years of government auditing experience. Her experience Includes performing audits in accordance with Government Auditing Standards, OMB Circular A-133,Federal Single Audit Act • • and the Rules of the Auditor General of the State of Florida. Professional Affiliations and Credentials She is a member of the American institute of Certified Public Accountants,the Florida Institute of Certified Public Accountants,the Government Finance Officers Association, and the Florida Government Finance Officers Association. In addition to her professional affiliations,she also assists with the Omega Psi Phi, adoption service. • Education Chantelle holds a Bachelor of Business Administration with a Major In Accounting from the University of Georgia and a Masters of Accounting from the University of Georgia. Chantelle has 94 hours of continuing professional education for the past two years, Representative Clients . • City of Aventura ■ City of tape Coral ■ City of Coral Gables City of Coral Springs ■ City of Hallandale Beach I City of Miami Beach I ' ■ City of West Palm Beach ■ Miami-Dade County ■ Miami-Dade Transit ■ Palm Beach County ■ Aventura City of Excellence Charter School Seminole Tribe of Florida ■ South Florida Water Management District ■ Greater Miami Convention and Visitor Bureau • f � 1 1 1 i. • • I COUPE hW24. 01,111/1.xim :maw BIOGRAPHIES 1 1 411Er i+�i :ISI,;\? • }S' Valeriegeolimon • Senior In-Charge valerle.colimon@moglaclrey.com Summary of Experience Valerie has worked in the public accounting field since 2006. Since her commencement as an associate with McGladrey and Pullen,she has audited a variety of our South Florida client base. During her first year with McGladrey and Pullen, Valerie began to focus solely on providing audit services to not-for-profit and government entities;specifically those subject to a Circular A-133 audit and/or the State of Florida Single Audit Act. Valerie performs a full spectrum of accounting operations such as'plan, execute and supervise external audit engagements. • Professional Affiliations and Credentials She is a member of the American institute of Certified Public Accountants, the Florida Institute of Certified Public Accountants. She fs also a board member and Co-Vice President of Programs of the Association of Latino Professionals in Finance and Accounting("AL,PFA") Education • • Valerie graduated from Florida International University's•School of Accounting with a Master of Accounting degree and a Bachelor of Science In Accounting, Valerie has 64 hours of continuing professional education for the past two years, Representative Clients • • • City of Miami Beach, Florida ■ The Broward Alliance • University of Miami City of Miami, Florida • • • Miami Parking Authority City of Coral Gables, Florida • Greater Miami Convention and Visitor ■ School Board of Miami-Dade County Bureau • Miami-Dade County • • Glades County • ? • i •I t { f+•.aha 1 SPMA p`{f +i,aA IWtMMp AMY. • atm.,. BIOGRAPHIES • ' 1 114 1:0 1111 Leany Perez Engagement Senior Leany.perez@mcgladrey.com • Summary of Experience Leany has worked in the public accounting field since January 2009. Since her commencement as an associate with McGladrey, she has audited a variety of our South Florida client base,from SEC clients to county governments. During her first year with McGladrey,Leany began to focus solely on not-for-profit and government entities,- Professional Affiliations and Credentials Leany is a member of the American institute of Certified Public Accountants. ' • ; Education Leany has her Master of Accountlhg and Bachelor of Accounting degrees from Florida International University, She has 116 hours of continuing professional education for the past two years. Representative Clients • City of Miami Beach ■ Miami Dade Transportation • City of Coral Gables ■ University of Miami ■ Department of Off-Street Parking • National Beverage Corporation ■' Greater Miami Convention and Visitor • Vitacost.com Bureau • • • I WVIC• i` 1 MOM i1 1 74„Nm BIOGRAPHIES .� ::}43A gYYg99pgpggp n yy�: Iy+ ?i r:`ti pili"1 I�699� ';111+11I.:0: I. 41,� ;l'i4'pC ,V WO Lisa C Wulf N:y:a Actuarial Director lisa.chanzit a@mcgladrey,com Summary of Experience Lisa Is a Director of the Actuarial Services practice In McGladrey's Human Capital Services unit,providing actuarial • consulting services for self-Insured and fully insured plan sponsors in the public and private sectors.She provides actuarial support for the firm's audits of government entitles,Insurance companies,captives,risk pools,and self- . Insured corporations. Professional Affiliations and Credentials She is a member of the Public Risk Management Association working group on Accounting Standards and Reporting Guidelines and GASB10 Omnibus Project Committee, She Is also a member of the CAS Textbook Committee,Syllabus Committee, Hachemeister Prize Committee,Audit Committee,and MA Financial Reporting Principles Committee, Education She holds a Bachelor of Arts In Mathematics and Biology from the University of Rochester and a Master of Science In Statistics from the University of Chicago. Representative Clients j t City of Jacksonville City of Miami ' M City of Miami Beach • 4 Palm Beach County • d • 1 ivnr BIOGRAPHIES i ;EL s:.!��r I Re NM n. 1 VS 1.6m AlexartYe Loris' •• 3+` IT Manager a/exandra.lorle@mcgladrey,com • Summary of Experience Alexandra Is a manager in McGladrey's Information Technology(IT)Risk Advisory Services and business consulting practice,with more than 13 years of experience. Before joining McGladrey,Alexandra was a • manager In the IT advisory and Internal audit, risk and compliance practices of a Big Four accounting/consulting firm for more than 6 years. Her areas of expertise Include internallexternal IT audit, Sarbanes-Oxley Section 404 compliance, IT attestation, project and engagement management,special IT projects and program assessments, business process analysis and improvement,policy and procedure evaluation and development,and system development and Implementation. Professional Affiliations and Credentials a She Is a member of the Information Systems Audit and Control Association. Education 1 Alexandra holds a Bachelor of Business Administration with a major in International Finance and Marketing and a minor In Computer information Systems. She also holds Master of Science In ' Management Information Systems form the Florida International University. Representative Clients • ■ City of Coral Gables Miami-Dade Public Schools w City of Pompano Beach • Broward County Clerk of Courts • ■ Miami-Dade County • YMCA of Broward County - I • II man um BIOGRAPHIES I 1161 = Brian `'w abler National Director of Public Sector Services ' brian.schebler@mcgladrey.com Summary of Experience Brian Is McGiadrey&Pullen's National Director of Public Sector Services. He Is primarily responsible for the firm's government, nonprofit, and compliance auditing approaches, as well as for the maintenance of Its Government Industry Manual, Nonprofit Organizations Manual,Health Care Manual, and Compliance Audit Manual. Brian provides technical support to the Firm's professionals and is involved with the design • and presentation of internal and external professional education courses.With almost 30 years of , experience with McGladrey,Brian represents the firm's Interest in professional developments in the public sector Industry and is Involved on a firmwide level with the design and presentation of Internal and external professional education courses, He also provides technical support to the firm's local and network offices and contributes to McGladrey's'quality control program. Professional Affiliations and Credentials Brian is a Certified Government Financial Manager(CGFM)and a member of the Government Finance Officers Association,National Association of Local Government Auditors,American institute of Certified Public Accountants, and the Iowa and Minnesota Societies of Certified Public Accountants. Education He holds a BA in accounting from St.Ambrose University in Davenport, Iowa. He has 73 hours of continuing professional education for the past two years. I , • • • ) • • • . � a e 4 INSURANCE CHECKLIST XXX 1.Workers'Compensation and Employer's Liability per the statutory limits of the state of Florida, XXX 2. Comprehensive General Liability (occurrenceform), limits of liability $ 1,000,000.00 per occurrence for bodily injury property damage to include Premises/ Operations; Products, Completed Operations and Contractual Liability, and Contractual Indemnity (Hold harmless endorsement), • r ' 3, Automobile Liability-$1,000,000 each occurrence -owned/non-owned/hired automobiles Included. • 4. Excess Liability-$ . 00 per occurrence to follow the primary coverages. 5. The City must be named as and additional Insured on the liability policies; and • it must be stated on the certificate, • XXX 6. Other Insurance as indicated; ' ' Builders Risk completed value $_____. , 00 Liquor Liability $ .00 Fire Legal Liability $ .00 —Protection and Indemnity $ , 00 Professional Liability/Medical • Malpractice $ .00 Employee Dishonesty Bond $ ,00 : ; . Theft Covering Money and/or Property Of Others $ .Q0 XXX Professional Liability $500,000.00 XXX 7. Thirty (30) days written cancellation notice required, XXX 8. Best's guide rating 8+;VI or better, latest edition, XXX 9. The certificate must state the RPP number and title . 1 PROPOSER AND INSURANCE AGENT STATEMENT: I understand the Insurance Requirements of these specifications and that • evidence of this Insurance may be required within live (5) days after Proposal opening. If I am selected as the successful Proposer, I further understand and agree and acknowledge that failure to procure or maintain the ( required insurance policy shall constitute a material breach of the Donnovan Maginley, Partner For Proposer/Print Name/Title Signature orPropoder 4/20/12 RFP No:34.11/12 City at Miami Beach Auditing Services 21 of 43 s � PROPOSER INFORMATION Submitted by: Donnovan Maginley, Partner • Proposer(Entity): MoGladrey LLP • Signature: Name (Printed): Donnovan Maginley Address: 801 Bricked Avenue, Suite 1050 • City/State: • Miami, FL 33131 • Telephone: 305.442.8801 Fax: 305.442,7478 • E-mail: dnnnovan minlAy(c�mnglarl ev_nom • Federal [D# 42-0714325 It is understood and agreed by Proposer that the City reserves the right to reject any and all Proposals, to make awards on all Items or any items•according to the best Interest of the City, and to waive any irregularities in the RFP or in the Proposals received as a result of the RFP, It is also understood and agreed by the Proposer that by submitting a • • proposal, Proposer shall be deemed to understand and agree than no property Interest • or legal right of any kind shall be created at any time until and unless a contract has been agreed to and signed by both parties. `_' May 18, 2012 For Pr poser: (AutWorized Sig ature) (Date) Donnovan Maginley (Printed Name) a 4120/12 RFP No:34.11112 My of Miami Beach Auditing Sarvlcoa 22 of 43 1 i r , REQUEST FOR PROPOSALS NO. 34-11/12 ACKNOWLEDGMENT OF ADDENDA Directions: Complete Part I or Part II,whichever applies. Part I: Listed below are the dates of Issue for each Addendum received in connection with this RFP. Addendum No. 1, Dated May 9, 2012 Addendum No. 2, Dated Addendum No. 3, Dated Addendum No.4, Dated • Addendum No. 5, Dated • Part II: No Addendum was received in connection with this RFP, . I Verified with Procurement staff Ate I Name'of staff Date '(`'4_ ____ __ McGiadrey LLP . s Prop aN1me Date Signature • i ' a r ' 4120/12 ' RFP No;34-11/12 City of Miami Bosch Auditing Sorvlcas 1 23 of 43 • It • I DECLARATION TO: City of Miami Beach City Hall 1700 Convention Center Drive Procurement Division Miami Beach, Florida 33139 Submitted this 18 day of May ,2012. The undersigned, as Proposer, declares that the only persons interested in this Proposal are named herein; that no other person has any Interest in this responses or in the contract to which • this response pertains; that this response Is made without connection or arrangement with any other person; and that this response Is In every respect fair and made In good faith, without collusion or fraud, . The Proposer agrees if this response is accepted, to execute an appropriate City of Miami Beach document(s) for the purpose of establishing a formal contractual relationship between the Proposer and the City,for the performance of all requirements to which the response pertains. The Proposer states that the response Is based upon the documents identified by the following number: RFP No. 34-11/12. WITNESS PROPOSER SIGNATURE Donnovan Maginley PRINTED NAME PRINTED NAME Partner • WITNESS TITLE Van, At a OV -t"INTED NA .E 1 , 4/20/12 RFP Noi 34.11/12 1 • City of Miami Beach Auditing Servloaa 24a 43 1 ` I SWORN STATEMENT UNDER SECTION 287.133(3)(a),FLORIDA STATUTES ON PUBLIC ENTITY CRIMES THiS FORM MUST BE SiGNED AND SWORN TO IN THE PRESENCE OF A NOTARY PUBLIC OR OTHER OFFICER AUTHORIZED TO ADMINISTER OATHS, 1. This sworn statement is submitted to the City of Miami Beach, Florida [print name of public entity] By Donnovan Maginiey,Partner • [print individual's name and title] • • For McGladrey LLP [print name of entity submitting sworn statement] Whose business address is 801 Brickell Avenue, Suite 1050 Miami, FL 33131 And (if applicable)Its Federal Employer Identification Number(FEIN)is 42-0714326 (If the entity has no FEiN, include the Social Security Number of the individual signing this sworn statement) • I understand that a "public entity crime" as defined in Paragraph 287.133(1)(g), Florida Statutes, means a violation of any state or federal law by a person with respect to and directly related to the transaction of business with any business with any public entity or with an agency or political subdivision of any other state or of the United States, including, but not limited to, any bid or contract for goods or services to be provided to any public entity or an agency or political subdivision of any other state or of the United States and involving antitrust, fraud, theft, bribery, collusion, racketeering, conspiracy, or material misrepresentation: • I understand that "convicted" or "conviction" as defined'in Paragraph 287.133(1)(b), Florida Statutes, means a finding of guilt or a conviction of a public entity crime, with or without an ; adjudication of guilt, in any federal or state trial court of record relating to charges brought by indictment or Information after July 1, 198g, as a result of a Jury verdict, nonjury trial, or entry • of a plea of guilty or nolo contendere. , • ' 1 understand that an "affiliate"as defined In Paragraph 287.133 (1)(a), Florida Statutes,, means: 1) A predecessor or successor of a person convicted of a public entity crime; or An entity under the control of any natural person who is active in the management of the entity and who has been convicted of a public entity crime. The term "affiliate" includes those officers, directors, executives, partners, shareholders, employees, members, and agents who are active in the management of an affiliate. The ownership by one person of shares constituting a controlling interest in another person, or a pooling of equipment or income among persons when not for fair market value under an arm's length agreement, shall be a prima facie case that one person controls another person, A person who knowingly enters into a joint venture with a person who has been convicted • 412D112 RFP No:34.11112 • City of Mlaml mooch Audltlnd 6orvlces 26 of 43 1 r l of a public entity crime in Florida during the preceding 36 months shall be considered an affiliate. I understand that a "person" as defined in Paragraph 287,133(1)(e), Florida Statutes means any natural person or entity organized under the laws of any state or of the United States with the legal power to enter into a binding contract and which bids or applies to bid on contracts for the provision of goods or services let by a public entity, or which otherwise transacts or applies to transact business with a public entity. The term "person" includes those officers, directors, executives, partners, shareholders, employees, members, and agents who are active in management of an entity. Based on Information and belief, the statement which I have marked below is true in relation to the entity submitting this sworn statement. [indicate which statement applies.] X Neither the entity submitting this sworn statement,nor any officers, directors,executives, partners, shareholders, employees, members, or agents who are active in the management of the entity, nor any affiliate of the entity has been charged with and convicted of a public entity • crime subsequent to July 1, 1989. The entity submitting this sworn statement, or one or more of its officers, directors, executives, partners, shareholders, employees, members or agents who are active in management of the entity, or an affiliate of the entity has been charged with and convicted of a public entity crime subsequent to July 1, 1989. The entity submitting this sworn statement, or one or more of Its officers, directors, executives, partners, shareholders, employees, members, or agents who are active in the management of the entity, or an affiliate of the entity has been charged with and convicted of a public entity crime subsequent to July 1, 1989. However, there has been a subsequent proceeding before a Hearing Officer of the State of Florida, Division of Administrative Hearings and the Final Order entered by the hearing Officer determined that it was not in the public interest to place the entity submitting this sworn statement on the convicted vendor list. [attach a copy of the final order] i UNDERSTAND THAT THE SUBMISSION OF THIS FORM TO THE CONTRACTING ' OFFICER FOR THE PUBLIC ENTITY IDENTIFIED IN PARAGRAPH 1 (ONE) ABOVE,IS FOR THAT PUBLIC ENTITY ONLY AND, THAT THIS FORM IS VALiD THROUGH DECEMBER 31 OF THE CALENDAR YEAR IN WHICH IT IS FiLED, I ALSO UNDERSTAND THAT I AM REQUIRED TO INFORM THE PUBLIC ENTITY PRIOR TO ENTERING INTO A CONTRACT IN EXCESS OF THE THRESHOLD AMOUNT PROVIDED IN SECTION 287,017, FLORIDA STATUTES FOR CATEGORY TWO OF ANY CHANGE IN THE INFORMATION CONTAINED iN THIS FORM. L,_012.Ce [signature] Sworn to and subscribed before me this day of May 18 ,2012 Personally known X 4 , OR Produced identification N/A Notary Public-State of Florida My commission expires July 24, 2015 (Type of Identification) (Printed typed or stamped Commissioned name of Notary Public)Carol Morgan Kuzav , . Mir p� OA»�1.MORGAN KU7.VA 4120112 •ayT� j* MY UtlMMIGE1IcN I Q�o?t444 412 of Mlaml Boaoh sl ,,� RPM:Jul 24,"��15 RFP No;34.11112 CitYdil BomodrintNov PbHpUndnrilkl Audlting3ervloas z :,,.r, aa•:,•:..•._.... , 28 of 43 QUESTIONNAIRE Proposer's Name: .McGladrey, ILP Principal Office Address: 801 Bricked Avenue, Suite 1050 Miami FL 33131 Official Representative: r____, Donnovan Maginley Individual Partnership (Circle One) Corporation Joint Venture L If a Corporation,answer this: When Incorporated: N/A • In what State: N/A If a r°oreicin Corporation: Date of Registration with N/A Florida Secretary of State: Name of Resident Agent: N/A Address of Resident Agent: N/A President's Name: N/A Vice-President's Name: N/A Treasurer's Name: N/A • 4120112 RFP Na;34-11/12 • { City of Miami Beeoh Auditing Services 27 of 43 • I I Questionnaire (continued) Members of Board of Director: NIA if a Partnership: McGladrey LLP Date of organization: June.1, 1926 General or Limited Partnership*: Limited Liability Partnership Name and Address of Each Partner: NAME ADDRESS • There are approximately 650 partners in the Firm In 26 states. See the attached partner list. *Designate general partners in a Limited Partnership • McGladrey has no general partners. 1. Number of years of relevant experience in operating same or similar business: 87 years , 2. Have any agreements held by Proposer for a project ever been canceled? Yes () No( X ) If yes, give details on a separate sheet. 3. Has the Proposer or any principals of the applicant organization failed to - qualify as a responsible Bidder/Proposer; or refused to enter into a contract • after an award has been made; or failed to complete a contract during the past five (5) years; or been declared to be in default in any contract in the past 5 years? No iif yes, please explain: 4120/12 RFP No:34-11112 City of Miami Beach Auditing SaMoea 28 of 43 1 A A 01/06/2012 Partners of MoGladrey LLP t Name t Abernathy,Linda Bober,Lawrence Cummings,Richard Forthrnan,Laura Hillman,John Kopew,Steve - Adams,Joo Bobrowakl,Jim Davenport,Sam Fortsoh,Zaoharay Hirsh Lawwrence Kordisotry,Sudhir ` Alfonson,Dale Boehelm,Mike Davis,Keith Foster,Rodney Hirsh,Mltohell KestMr,Tasha I Allen,Robert Netter,Angola Davis,SUsan Fox,Juice Hoff,Melanie Koziol,Henry Altschul,Daniel Bourassa,Jerome Dawson,Richard Foex,Michael • Holland Troy Kral,Mark Alzian,Alan Bowman,Karen Dawson,Harold Fox,Shawn Holmes,Brian Kramer,Gary Artderson,Chad Bozetarnik,Pete Dary,Filohard Franekl,David Holt,Stephen ' Kraunor,William , Anderson,Chris Braoltett,John Deoliveo,Joseph Frartaslo,Robert Horaney,MI°helle Krelner,Howard Anderson,Kelly .Bradford,Chris de la Fe,Sergio Friedman,Brett Horn,William Kretowloz,Kathleen ! Androwe,David Bradvioa,Matt DoGrandis,Ron Friedman,Martin Horns,Tom Kozak,James • Antman,Marvin Brad,Peter Dehner,Linda Frier,Shawn Hotz,Dale Kropeid,John • Antonopoulos,Nick Brawner,Joy Deis°,Phyllis Friable,Hugh Howe,Vlotor Krowozyk•Mendoza,Sherrie Aquino,Joseph Brlbols,Girard Dempsey,Mike Furst,Kenneth Hoyle,Julie Kublcok,Christie ' Arakeilen,Lloyd Brook,Lisa Denney,James Gaines,Mark Hren,Brian Kultgen,Mark Arata,James Brunk,Martin Dennis,Leroy Gallagher,Paul Hubbard,Lloyd Kurek,Karen • ' Arohor,Michael Budnik,Greg Devine,Martin Gallagher,Tim Hudson,Melvin LaFranoe,Steve Arndt,Chris Burdlne,Terri Devine,Greg Gallegra,Vincent Iyer,1<esavan Lamb,James Astren,Steven Bjurger,Jon Dlgiusto,David George,John Jackson,Todd Lambrix,Gary Atwell,Alan Burgmeler,Charles Dimino,Thomas Gerard!,Robert Jacobons,Robert Latnothe,Marc Aubley,Nancy Burke,David Dogrer,Robert Gldlow,Eric Jenkins,Gary Landau,Gerald • • Azbell,Kerry Burquest,Patti Dotson,Carl Gillespie,Patriok Jensen,Robert Landon,Laura Saltine,Rick Burtner,Tom Dombrowski,Robert Ginsburg,Noah Jetel,James Langley,Robert Baker,Jeff Butler,Karam Dow,Stacy Glaser,Robert Jirsa,Robert Lanza,John - Bakker,Christie Byman,Jim Draper,Ronald Glazlk,Bob Joaquin,Dean Lapidus,Carol • • Baldowskl,Patir•Ica Cadden,John Drexler,Steve •Goleblowski,Rich Johannesen,Jeff Lauritsen,Kayo Baiter,Mike Caforlo,John Mellinger,Lenore Goionka,Jason Johnson,Randolph Lavin,Dennis • Bank,Jim Caloedo,Angellka Dubin,Michael Gorman,William Johnson,Steven, Lax Martin Barnes,Steve Cain,Paul Dubooie,Dominic, Graaf°,Alan Johnson,Thomas Le Blhan,Franck ' Barrett,David Calahan,Tim Dunlap,Rnadafi Gradi,Steven Jonas,Brandon Leblanc,Larry • • Barrett,Kathryn Gallons,Robert Dykes,Arthur Gray,Arnold Jong,Karen Leffler,Wlliiiam Barsky,Scott Campania,'Mike Eash Robert • Green,Tam - Jorth,Bruce Lemke,Srio Bartak,Ed Cannon,Lou Edelhelt,Richard Greenhut,Ken Jugan,Steve Lemons,Dean Bartman,Jean . Capistrant,Andrew Edwards,mark Greer,Michael Kadavy,James Lenz,Jeff (" . Barturck,Michael • Cappelioni,Albert Edwardson,John Greif,Martin Kaplan,Nell Lenz,Torn Barwick,Tracy . Carboni,Lawrence Eggert,alllson Greiteoh,James Karst,Laurance Lesser,Simon • Barts,Ron Carey,James Eldetman,Aaron Gross,Guy Kathe,Shari Levenson,Daniel Bassett,Scott Carney,Shawn Ems,Steve Grossman,Michael I<asterisohmidt,Rob • Levine,Lawrence Battaglia,Paul Carr,Robart Epstein,Howard Gruld),Nicholas Kaufman,Gabrielle Llen,Dale Beacom,Mike Caehin,Jamey Ervin,James Guarlgllia,Joseph Keninitz,Donald Lipari,Don Beal,James Castillo,Flavio Estos,James Guirovlch,Paul Kennedy,Kristl Lockwood,Debra , Beasley,Tyrone Castle,Dara Eto,Dwayne Hagan,Pat Kenney,Matt Lorusso,Mark backer,Brian Calurano,Richard Evans,Edward Hague,John Kent,Ronald Lundberg,Mike -Becker,Marla Cawiezell,Tony Evans,Joseph Halkilus,Mike Kappa!,Grant Lutes,Chrls Besiendorf,Doug Ceol,Tony Even,Loras Hailick,Micahel Kemal,Morton Luz),David Bender,Mike Chaberskl,Mark Farrell,Thomas Halligan,Ian Koyter,Lawrence Maohara,Joseph Beneventl,Thomas Chlavetta,Tom Penney,James Hanover,Chrsltlne Keyser,John Mask,Christine Benjamin,Ian Chrlstnor,Charles Feldman,David Harvey,Mark Keihl,Gregg Mackenzie,Chris • • Barloal,Tom Ciarahan,James Feldmann,Robert Harvey,Matthew Kimball,Scott Mackey,Scott Berkowitz,Saul (Mentz,Charles Ferraro,Eugene Hasan,Hussain Klm,Steven, Maddux,Gregory r Bernstein,Bruce Coakley,Terrenoo Ferraro,Mlohael Hassett,William Kinsiow,Joe Maglnloy,Donnovan Beet,Curtis Colfiand,Matthew Ferrolra,Tom Hawkins,Bert Klrley,Mike Mahoney,Joe Best,Robert Cohen,Alien Fischer,Charles Hedden,Dale Kirsh,Mike Major,John • • Bevllaoqua,Mike Cohn,Samuel Fisoher,Fredorlok Hegarty,Kay Kisseli,Gerald Major,William Blllln,Bob Cole,Monique Fleming,Robert Hetdt,Robert Kitchen,Patrick Malone,Mike Bird,Joohn Coleman,Gary Flemmer,Jef Hemet,Matt I<ilntworth,David Mancuso,David Blackiawy,Brian Complani,Frank Foraste,Michael Henderson,Kyle Knudson,James Manek,James Blakey,Paul Condon,Richard Fords,Mark Hendren,Roger Kooh,Tim Mantas,John Blomgren,Charles Costantlno,Richard Forgue,Janice Hossney,Larry Koiodkln,Ronald Marcotte,Milton Bloom,Mark Couch,Michael Koltun,Steve J t ! , 1 • r r I . 01108!2012 • Partners of McGladrey LLP Name Marinacoi,Toni Newman,Doug Rifling,John Sibley,Jason Trager,Mike Yager,Jeff Markey Wayne Newman,Phil Rineberg,Mike Slebraase,Paul Tremblay,Patrick Yonowltz,Art Marquardt,Dennis Nichols,Mike Ritsohe,Mark Simon,Steven Trigg,Daniel Young,Richard Marshall,Brian Nlchols,Rlohard Roeder,Susan Slmonson,Beryl Tuok,Eric Zailck,John Marshburn,MoirIs Nloolopoulos,John Romano,John Singer,Cristin Turning,Marty Zall,Bryan • Martin,Garrick Nletzel,Terri Rominger,Jack Sink,James Turner,Terry Zanderson,Jason Martin,Jerome Nockela,Paul Roozeboom,Doug Smaroff,Duke Underwood,Doug Zasada,John Marvel,Paul Nudelman,Mendel Rosenfeld,Diego Smith,David Urban,Tony Zawada,Jeff Masoareno,Sam O'Brien,Wllllam Rosenthal,Barry Smith,Gary Valderrama,James Zompa,Nicole 1 Marrano,Brian O'Connor,Doug Ross,Jeff Smith,Mike Valentine,Gretchen Zwert,Jeremy Maesmann,Lance Oath,David Rouriolc,Tom Smith,Roger Vance,Pat Matheny,James Ohiger,Teri Routh,Dan Sneeringer,Tom Vandenbergha,Dan Matz,Randy Oldham,Marrls Rucker,Brandon Snyder,Mark Venlandinghma,Scott " Mayes,Brandon O'Leary,Tom Russo,Mike Sobhy,Mohamed Vannucol,Kevin Maxlok,Arnold O'Malley,Sill Sanders,John Sookot)o,Joan Verdlck,Martin Mayhew,Keith Ophelm,Doug Sanderson,Colin Solcolowsid,Chris Vargo,Mike Mazzo,Joe Opland,Gordon Sandler,Eric Solurl,Ron Vital,Paul McCann,Steven Parioo,Stephan Senneila,Louis Sorenson,Cathy Viola,Lea MoCcllum,Julie, Parish,Steven Senior!,Mary Beth Soukup,Befh Volgt,Lee McCoy Sherry Paul,Alan Sasse,Denise Splcher,Keith Volpe,Ralph • MoDonal,Robert Pavano,Carrie Saunders,Rod Spigelman,Alan Valtin,Darwin McMahan,Ben Peikes,Rebecca Savva,Elise Splzman,William Wadklns,Jay MoMennamin,Lynne Peitz,Scott Schaedel,Larry Spreltzer,James Wagner,Robert • McNeal,Tim Perez,Erie Scharenbroch,Carl St.Germain,Jim Watch,Jim McFarland,John Perez,Patirolo Sohena,Rob Stanley,John Wallace,Keith McPoland Tim. Perkins,Julia Schmidt,John Stebbins,Mark Wallgren,Donald • Menaker,Steve Petersen,Dustin Schmidt,Steve Stoll,Thomas Warrant,Donnety 1 . • iMendoza,Norman Peterson,David Sahneidman,Byron Steinberg,Joel Wasserman,Phillip Meritt,Brian Petrus,William Schnell,Tom Stephens,Jean Wax,Laurie Metz,Michael Pierce,Chris Sahosnauer,Steven Sterling,David Webb,Bruce Meyer,Joel Pierce,Mike Sohriner,Matt Stoehr,KoryStoethner,Robert Weber,Eugene • Mayer,Sharon Pierson,Ron Schroeder,Kathleen Stokks,Mike Weber,Mike Milewski,Tom Pinkus,Paul Sohue,Greg Stoneburnor,Keith Weber,Al I ' Miller,Ken Plutzer,Robert Schulte,Jon Stortz,Lori Wehrhelm,Richard Mlllmann,Daniel Pohlman,Scott Schultes,Ben Strauss,Mandy Well,Lynne Miskell,Mark Polalcow,Joel Schultz,Charles Strype,Mike Waisbrich,Paul • • Moag;TIM Poore,Price Schwartz,Mice •Stuart,Richard Walls,William Monaghan,Mike Pottratz,Mike Schwartz,Terry Sturisky,Gary Wella,Randy Moore,Robert Pozen,Jeff Sclarappa,Donna Sullivan,Michelle Whetstone,Tracy • Morgan,Bryoe Price,Dean Score,Doug Susasweln,Dan Wilkone,Tom , . i Moriarty,James Priers,Kevin Searing,Tim Sweeney,James Williams,Colleen • Moritz,Tim Quinn,Mark Seidel,Jeff Szozepaniak,Tony Williams,Dana i Mork,San Radford,Mike Seller,David Talcaff,Matt Wlllllams,Jeff Morton,James Radice,Craig Ssmondinger,David Tapscott,James_- Williams,Mike Mosso!,Mike Ragan,Randy Songstook,Dean Tasel,Murat Wilson,Lisa Moyna,James Randies,Gary Sevier,Jason Tassitano,Tammy Wilson,Peter • Mulvey,Peter Rate,Richard Shah,)(Islay Taub,Stuart Wilson,Scott • Muratovlc,Hank Rattner,Sidney Sharron,Joel Ten Pas,Harlan Wilson Jones,Daroslla ' Murphy,Craig Rebello,Derrick Shane,David Thiel,Chad Windlinger,John Nacmiss,Joe Refiner,Karen Shaw,Patrick Thomas-Beck Kathy Windram,Tom ' Mafzlgsr,Mike Reshberger,Paul Shaw,Tom Thompson,Paul Wlsohmeyer,Thomas • Nahom,Robert Rein,Howard Shealey,Stacey Tlefonthalor,Tim WoeII,James Natenatedt,Donald Rennie,Marcia Sher,Michael Tomaelewloz,Beverly Woodworth„Wllllam • Nedder,Ernest Reto,Joyce Sheridan,Rebecca Tomaw,Mark Worden,Clay • Nelson,Doan Rlcchezza,Joe Shiinger,Harry Topp,Corey Wright,Richard • Nelson,Mike Rlddle,Steven Shomovich,Daniel Tracy,Mitchell Wright,Rod Neumann,Roger Ridenour,Craig Wyss,Jennifer • I f 1 1 i I I Questionnaire (continued) 4. Has the Proposer or any of its principals ever been declared bankrupt or reorganized under Chapter 11 or put into receivership? Yes() No( X ) if yes, give date, court Jurisdiction, action taken, and any other explanation deemed necessary on a separate sheet, 5. Person or persons interested In this RI=P have ( ) have not (X) been convicted by a Federal, State, County, or Municipal Court of any violation of law, other than traffic ' violations. To Include stockholders over ten percent (10%). (Strike oUt inappropriate words) Explain any convictions: N/A 6. Lawsuits (any) pending or completed involving the corporation, partnership or Individuals with more than ten percent(10%) interest: A. List all pending lawsuits: McGladrey LLP annually provides professional services to thousands of clients across the United States. We,do not comment or provide information on litigation asserted against us, • However,we do hot believe that any litigation or investigations would impact our ability to provide audit services to the City of Miami Beach B. hist all judgments from lawsuits in the last five (5)years:See response above, • . 1 C. List any criminal violations and/or convictions of the Proposer and/or any of its principals: • None 7. Conflicts of Interest. The following relationships are the only potential, actual, or perceived conflicts of interest in connection with this Proposal: (if none, state same.) None 1 � 1 I ! a 4/20/12 RFP No;34.11/12 City of Mlaml Beach Auditing Services 29 of 43 1 t I Questionnaire (continued) • 8. Public Disclosure. in order to determine whether the members of the Evaluation Committee for this Request for Proposals have any association or relationships which would constitute a conflict of Interest, either actual or perceived, with any Proposer, and/or Individuals and entities comprising or representing such Proposer, • and in an attempt to ensure full and complete disclosure regarding this REP, all • Proposers are required to disclose all persons and entities who may be involved with • this Proposal. This list shall include, without limitation, public relation firms, lawyers, and lobbyists, The Procurement Director shall be notified, in writing, if any person or entity Is added`to this list after receipt of Proposals. Robert Feldmann, Donnovan Maglnley, Chantelle Knowles, Valerie Colimon, Leany Perez, Jim Walch Kevin Adderley, Lisa Chanzit, Brian Schebier, Alexandra Lode 9. Are there any pending discussions relative to mergers,acquisitions,partnerships, or assignment of contract? No 10. Is the business entity a Miami Beach based Vendor? ' Yes"() No(X) 1 1 , If Yes,please submit a copy of a Business Tax Receipt issued by the City of Miami Beach, or documentation to demonstrate that the headquarters is in the City of Miami Beach, or documentation which proves that goods and/or contractual services are being produced or performed,as appropriate,in the City of Miami Beach. 11. Is the business entity owned by a certified service-disabled veteran, and or a small business owned and controlled by veterans, as' defined on Section 502 of the Veteran Benefit Health, and Information Technology Act of 2006, and cited in the Database of Veteran-owned Business? Yes () ' No(X) II 4/20112 RFP No:34-11112 { City of Miami 6eaolt Auditing services 30 of 43 Questionnaire (continued) The Proposer understands that Information contained in this Questionnaire will be relied upon by the City in evaluating and making an award pursuant to the RPP, and such information is warranted by the Proposer to be true and accurate. In the event that the City, in its sole discretion, deems necessary, the Proposer agrees to furnish such additional Information, relating to the qualifications of the Proposer, as may be required by the City, The Proposer further understands that the information contained in this Questionnaire may be confirmed through a background investigation conducted by the City, conducted either through the Miami Beach Police Department or by a third party retained by the City for such purposes, By submitting this Questionnaire the Proposer hereby agrees to cooperate with this investigation including, but not limited to, fingerprinting and providing information for a credit check. PROPOSER WITNESS: IF INDIVIDUAL: • Signature Signature • Print Name Print Name WITNESS: IF PARTNERSHIP: McGladrey LLP • Signature Print Name of Successful Proposer • 801 Brickell Avenue,Suite 1050, Miami 33131 ) • Print Name Address Yd ,(19%By; (Limited Liability Part ner)-Cneral-Partnerr • • Donnovan Maginley Print Name ATTEST: (12 CORPORATION: ' • Secretary Print Name of Corporation Print Name Address By: President { (CORPORATE SEAL) • Print Name • 4/20/12 RPP No;34-11/12 Clty of Miami Beach Auditing Servici 31 of 4es 3 r � u t � Nkdltuiray 801 Brlokell Avenue,Suite 1050 Miami,FL 33131 ' = GI array Ph; 3cgladray.co Fax;305.h�G2.747b f (,;� wwav,mc Cadre coGn • i • i • ' r ACKNOWLEDGMENT LETTER May 18, 2012 City of Miami Beach City Hail-Procurement Division 3rd Floor 1700 Convention Center Drive ' Miami Beach, FL 33139 • RE: RFP No.34-11/12 for Auditing Services Dear Sir or Madame: I have read the City of Miami Beach's RFP No. 34-11/12 for Auditing Services. On behalf of our proposal team,we agree to and accept the terms, specific limitations, and conditions expressed therein. In addition, we have read,rely upon acknowledge,and accept the City's Disclosure and Disclaimer which is attached hereto and Is fully incorporated into this letter. • i Sincerely, ; McGladrey LLP Donnovan Maginloy Partner • ' Wawa anticamuGlUngflnm t ' DISCLOSURE AND DISCLAIMER This Request for Proposals ("RFP") is being furnished to the recipient by the City of Miami Beach (the "City") for the recipient's convenience. Any action taken by the City In response to Proposals made pursuant to this RFP, or In making any award, or in failing or refusing to make any award pursuant to such Proposals, or in cancelling awards, or in withdrawing or cancelling this RFP, either before or after Issuance of an award, shall be without any liability or obligation on the part of the City, In Its sole discretion, the City may withdraw the RFP either before or after receiving proposals, may accept or reject proposals, and may accept proposals which deviate from the RFP, as it deems • appropriate and in its best interest. In its sole discretion, the City may determine the qualifications and acceptability of any party or parties submitting Proposals in response to this RFP. • • Following submission of a Proposal, the applicant agrees to deliver such further details, information and assurances, including financial and disclosure data, relating to the Proposal and the applicant including, without limitation, the applicant's affiliates, officers, directors, shareholders, partners and employees, as requested by the City in its discretion. The information contained herein is provided solely for the convenience of prospective Proposers, it is the responsibility of the recipient to assure itself that information contained herein is accurate and complete. The City does not provide any assurances as to the accuracy of any information in this RFP. Any reliance on these contents, or on any permitted communications with City officials, shall be at the recipient's own. risk. Proposers should rely exclusively on their own investigations, Interpretations, and analyses. The RFP is being provided by the City without any warranty or representation, express or implied, as to Its content, its accuracy, or its completeness. No warranty ' or representation is made by the City or its agents that any Proposal conforming to these •• requirements will be selected for consideration, negotiation, or approval. The City shall have no obligation or liability with respect to this RFP, the selection and the award • process, or whether any award will be made. Any recipient of this RFPwho responds hereto fully • • , acknowledges all the provisions of this Disclosure and Disclaimer, is totally relying on this Disclosure and Disclaimer, and agrees to be bound by the terms hereof. Any Proposals submitted to the City pursuant to this RFP are submitted at the sole risk and responsibility of the party submitting such Proposal. This REP is made subject to correction of errors, omissions, or withdrawal from the market without ' notice. information Is for guidance only, and does not constitute all or any part of an agreement, • r • The City and all Proposers will be bound only as, If and when a Proposal (or Proposals), as same may be modified, and the applicable definitive agreements pertaining thereto, are approved and • executed by the parties, and then only pursuant to the terms of the definitive agreements executed among the parties, Any response to this RFP may be accepted or rejected by the City for any reason, or for no reason,without any resultant liability to the City. The City is governed by the Government-in-the-Sunshine Law, and all Proposals and supporting documents shall be subject to disclosure as required by such law. Ali Proposals shall be submitted in sealed bid form and shall remain confidential to the extent permitted by Florida Statutes, until the 4(20/12 RFP Not 3411/12 City of Mlaml Beach Audlllhg Services 33 of 43 date and time selected for opening the responses. At that time, all documents received by the City shall become public records. Proposers are expected to make all disclosures and declarations as requested in this RFP. By submission of a Proposal, the Proposer acknowledges and agrees that the City has the right to • make any inquiry or investigation it deems appropriate to substantiate or supplement information contained in the Proposal, and authorizes the release to the City of any and all information sought in such inquiry or Investigation. Each Proposer certifies that the information contained In the Proposal Is true, accurate and complete, to the best of its knowledge, information, and belief, Notwithstanding the foregoing or anything contained in the RFP, all Proposers agree that in the event of a final unappealable judgment by a court of competent jurisdiction which Imposes on the City any liability arising out of this RFP, or any response thereto, or any action or Inaction by the City with respect thereto, such liability shall be limited to $10,000.00 as agreed-upon and liquidated damages. The previous sentence, however, shall not be construed to circumvent any of the other provisions of this Disclosure and Disclaimer which imposes no liability on the City. In the event of any differences in language between this Disclosure and Disclaimer and the balance of the RFP, It Is understood that the provisions of this Disclosure and Disclaimer shall always govern. The RFP and any disputes arising from the RFP shall be governed by and • construed in accordance with the laws of the State of Florida. • ACCEPTED: �w ; LO k, '• - •Fortner (NAME AND Ti LE] • Ma.Glad ay I I P • [ORGANIZATION] • . . Donnovan Maginley • [PROPOSER'S NAME] • � I 4/2.0112 RFP Not 34-11112 City of Mlaml Beach Auditing Services 1 34 of 43 •4 1AM • CII t CITY OP MIAMI BEACH DECLARATION: NONDISCRIMINATION IN CONTRACTS AND BENEFITS Section 1.Vendor information Name of Company: MoGladrey LLP Name of Company Contact Person: Donnovan Maglniey Phone Number: 305,442.8801 Fax Number; 305.442.7478 E-mail: donnovan.nlaginiey at7mcoladrev.com Vendor Number(If known); ' Federal ID or Social Security Number: 42-0714326 - Approximate Number of Employees In the U,S.:more than 6,600 (If 60 or less,skip to Section 4,date and sign) . • Are any of your employees covered by a collective bargaining agreement or union trust fund? Yes X No Union name(s): N/A Section 2,Compliance Questions Question 1.Nondiscrimination-Protected Classes A. Does your company agree to not discriminate against your employees, applicants for employment,employees of the City,or members of the public on the basis of the fact or perception of a person's membership in the categories listed below?Please note:a"YES"answer means your company agrees it will not ' , discriminate;a'NO"answer means your company refuses to agree that It will not discriminate.Please answer yes or no to each category. Race 4Yes _No _Sox 'Yes No Color d Yes No r Sexual orientation d Yes _No Creed 'I Yes -No _Gender transgender status 4 Yes No • ' _Religion 4 Yes No _Domestic partner status 4 Yes _No _National origin d Yes __No Marital status 4 Yes ' No ,ancestry Yes, No -Dlsablllty 4 Yes _No ' , Age 4 Yes _No AIDSIHIV status 4 Yes _No _Height I Yes _No ,Weight 4 Yes _No • I B. Does your company agree to Insert a similar nondiscrimination provision In any subcontract you enter Into for the performance of a substantial portion of the contract you have with the City?Please note:you must answer this question, even if you do not Intend to enter Into any subcontracts. 4 Yes No 1 4120/12 RFP No:34-11/12 City of Miami Beech AudIting Servlces 36 of 43 •1 ' / Question 2,Nondiscrimination-Equal Benefits for Employees with Spouses and Employees with Domestic Partners r 4 Questions 2A and 2B should be answered YES even if your employees must pay some or all of the coat of spousal or domestic partner benefits, A. Will your company provide or offer access to any benefits to employees with • spouses and/or to spouses of employee's that may be assigned to work on the City of Miami Beach contract? 4Yes_No B. Will your company provide or offer access to any benefits to employees with (same or opposite sex) domestic partners*or to domestic partners of employees • that may be assigned to work on the City of Miami Beach contract? d Yes No ' •°The term Domestic Partner shall mean any two (2) adults of the same or different sex, who have registered as domestic partners with a government body pursuant to state or local law authorizing such registration, or with an Internal registry maintained by the employer of at least one of the domestic partners, A Contractor may Institute an Internal registry to allow for the provision of equal benefits to employees with domestic partner who do not register their partnerships pursuant to a governmental body authorizing such registration, or who are located In a Jurisdiction where no such governmental domestic partnership exists. A Contractor that institutes such registry shall not Impose criteria for registration that are more • stringent than those required for domestic partnership registration by the City of • . Miami Beach If you answered"NO"to both Questions 2A and 2B,go to Section 4(at the bottom of this page),complete and sign the form,filling in all items requested. fou answered"YES"to either or both Questions 2A and 2B,please continue to • . Question 2C below, - C. Please chock all benefits that apply to your answers above and ilst in the"other" section any additional benefits not already specified. Note: some benefits are provided to employees because they have a spouse or domestic partner, such as bereavement leave; other benefits are provided directly to the spouse or domestic partner,such as medical Insurance, • BENEFIT Yes for Yes for Employees No,this Benefit Documentation of this ' l;mpioyees with with Domestic is Not Offered Benefit is Submitted , Spouses Partners with this Form Health d 4 ❑ A Dental _ +1 4 a 4 • VisionJ J ❑ -----7Retirement(Pension, . +1 ❑ d 401(k),etc) Bereavement J a a +1 • Family Leave r J T ❑ 4 • Parental Leave - J d ❑ J Employee Assistance q 4 0 3 Program _ Relocation&Travel d 4 n Al t Company Discount, 4 d a , Facilities&Events Credit Union a a •, a ,t Child Care a a a { Other a ❑ 4 ❑ 9 4/20/12 RP No:34-11112 City of Miami Beach Auditing Services t 38 of 43 t 4 i Note; If you can not offer a benefit In a nondiscriminatory manner because of reasons outside your control, (e.g., there are no insurance)providers in your area willing to offer domestic partner coverage) you may be eligible for Reasonable Measures compliance, To comply on this basis, you must agree to pay a oash equivalent, submit a completed Reasonable Measures Application with all necessary attachments, and have your application approved by the City Manager,or his designee. Section 3.Required Documentation YOU MUST SUBMIT SUPPORTING DOCUMENTATION to verify each benefit marked In Question 2C. Without proper documentation, your company cannot be certified as complying with the City's Equal Benefits Requirement for Domestic partner Ordinance. For example,to,document medical Insurance submit a statement from your Insurance provider or a copy of the eligibility section of your plan document; to document leave programs, submit a copy of your company's employee handbook. If documentation for a particular benefit does • not exist,attach an explanation, Have you submitted supporting documentation for each benefit offered? Yes_No Section 4.Executing the Document I declare under penalty of perjury under the laws of the State of Florida that the foregoing Is true and correct,and that I am authorized to bind this entity contractually, • Executed this 18th day of May In the year 2012 ,at Broward County,Florida, 8Q1 Brlokeli Avenue,Suite 1050 Signature Mailing Address Donnovan Mac inlet' Miami,FL 33131 • Name of Signatory(please print) City,State,Zlp • Partner • Title • • 1 4/20/12 RFP No:34.11/12 City of Miami Beach Auditing Bon/10s 37 of 43 � t I � • 1 • ELIGIBILITY Members who do not enroll within 30 days of being eligible are considered Late Enrollees and may not be eligible to enroll until the next open enrollment period. Please refer to the • "Late Enrollees"provision in this section, . Coverage for the Participant This Summary Plan Description describes the benefits a Participant may receive under this health care Plan, The Participant is also called a Member. Coverage for the Participant's Dependents If the Participant is covered by this Plan, the Participant may enroll his or her eligible • Dependents, Covered Dependents are also called Members, Eligible Dependents Include: • The Participant's Spouse or Domestic Partner. • The Participant's children until the end of the month In which they attain age 26. "Children" for this purpose include the Participant's natural children, legally adopted children, children placed with the Participant for legal adoption (from the date the Participant assumes legal responsibility), stepchildren, and children for whom the Participant has assumed legal guardianship. Also included are the Participant's children (or children of the Participant's Spouse or Domestic Partner)for whom the Participant has legal responsibility. • Children age 26 or over who are mentally or physically disabled and totally dependent on the Participant for support. Certification of the disability is required. To ensure the eligibility of all dependents enrolled as disabled dependents, the Claims Administrator will send a handicap certification letter,to the Participant,when the dependent is initially enrolled for coverage, A certification form is available by contacting the Claims Administrator. The Participant will be responsible for completing their portion of the form, providing all required information and if necessary, having the dependent's attending physician complete their portion of the form. The form will then bo returned to the Claims°'e Administrator for a determination. Once a determination is made,the Participant will receive a.letter,advising if their dependent was approved or denied for continued coverage. To ensure continued eligibility of all disabled dependents enrolled for coverage, the Claims Administrator will recertify these dependents at least every three to five years, The procedure is similar to the initial certification and the Participant will again receive letters once the determination is made. You must give the Claims Administrator evidence of Your child's incapacity within 31 clays • ofattalnment of age 26, McClladrey 17 Max C'onsumcr Choice Plan Packages 025,026.027.028 - FrlLcliveJamul.), I,2012 1 , 1 t - . I - COVERAGE ELIGIBILITY You are eligible to be a participant in the Dental Plan if you are an employee or partner who has met your employer's eligibility requirements or ifyou are either the • eligible spouse/domestic partner or an eligible child o fan employee or partner who has met the employer's eligibility requirements.To be eligible you are required to be • a qualified regular full-ohne or qualified part-time regular employee or partner sched- tiled at least 20 hours per'week(.5 PTC), , , Spouse means your husband or wife as the result of a marriage or domestic partner- ship.McGladrey defines domestic partners as two people, of the same gender or opposite gender who have met all of the following requirements for at least the last . _ 12 months: • Have established a domestic partnership(live together in a committed exclu- sive relationship); - tic Intend for the domestic partnership to be permanent; . . le Are financially interdependent such that they are jointly responsible for the t ccommon welfare and financial obligations ofthe household,or the non-em- ; ployee domestic partner is chiefly dependent upon the employee or partner for care and financial assistance; Are not legally Married to any other individual,and ifpreviously married,a ' legal divorce or annulment has been obtained or the former spouse is de-. ceased; Are not the domestic partner of anyone else for purposes of participation in any benefit plan or program provided by any other entity; • to • Are both at least 18 years of age and mentally competent to enter into a legal contract; rmr Are not related by blood closer than would bar marriage under applicable • law; a� Are not in a relationship solely for the purpose of obtaining benefits pro- ' vided by the employee's or partner's Participating Employer;and �t Complete and sign anAffidavit ofDomestic Partner Relationship for Ben . q efts Eligibility, 38 d i • 4 1 An eligible child can be your natural child,a child placed with you for adoption or a legally adopted child,a child for whom you have legal guardianship,a stepchild, a child of your domestic partner,or a foster child.To be an eligible beneficiary, a child must meet at least one of the following standard requirements: The child is under age 26. The child is a dependent of the child's parent or domestic partner and is totally or permanently disabled,either physically or mentally.If the depen- dent child is permanently disabled,the disability must have existed before the child was age 26 years of age, A child who has been placed in your home for the purpose of adoption or who you have adopted shall be eligible for coverage as ofthe date of placement for adoption or as of the date of actual adoption,whichever occurs first, TYPES OF COVERAGE There are different categories of coverage you may hold under this Dental Plan: With single coverage,you are the only one covered. With individual and spouse coverage,you and your eligible spouse/domes- tic partner Are covered, • With individual and child(ren) coverage, you and your eligible child(ren) are covered. sei Withfamily coverage,you,your eligible spouse/domestic partner,and each . ofyour eligible children are covered and are considered beneficiaries,Bach eligible Covered Person must be listed on your dental application for cover- age or added later as a new eligible Covered Person, Your Identification Card Dentists do not typically require an Identification Card and your dentist can always contact Dental Dental of Iowa to verify your coverage, If you,your employer or dentist prefers that you have an identification card,Delta Dental will provide you one,Identification cards are available at www,deltadentalia,corn, QUALIFIED MEDICAL CHILD SUPPORT ORDER (QMCSO) If you have a child and we receive a Medical Child Support Order recognizing the child's right to enroll in this Dental Plan and(or any other benefit plan,we will promptly notify both you and the child that the order has been received. We also will inform you and the child of our procedures for determining whether the order is a Qualified Medical Child Support Order, You may obtain,without charge, a copy of QMCSO procedures from your employer, • 39 � I ARTICLE iii • ELIGIBILITY ; • 3.1 CONDITIONS OF ELIGIBILITY t • (a) Eligibility,Any Eligible Employee shall bo eligible to partiolpato hereunder on the slate nt'such Employee's employment with the Employer,However,any Employee who was a Participant in the Plan prior to the effective date of this amendment and restatement shall ecntinee to participate In the Plan, 3.2 EFFECTIVE DATE Or PARTICIPATION . i (a) Effective do to of participation.An Eligible Employee shall become a Participant effective as of the date ort which such t . Employee satisfies the eligibility requirements of Section 3,I, (b) Recognition or other employer service,Ilan Eligible Employee satisfies the eligibility requirement conditions of a specific component of the Plan by mason of recognition of service with'an entity that is not an Affiliated Employer,then such Employee shall 'become a Participant In such component of the Plan as of the day that the Plan credits such service with the entity or,if later,the date the Employee would have otherwise entered such component of the Plain had the sorvlee with the entity been recognized for purposes • of this Plan. (c) Ineligible to eligible classification.if an Employee,who has satisfied the Plan's eligibility requirements and would otherwise have become a Participant In a spealfle component(tithe Plan,shall go fern a elasslfiettlon of an ineligible Employee to an Eligible Employee,such Employee shall become a Participant In such component of the Plan on the date such Employee becomes an Eligible Employee or,If later,the date that the Employee would have otherwise entered such component of the Plan had the Employee always been an Eligible Employee. • (d) Eligible to Ineligible classification.!fan Employee,who has satisfied the Plan's eligibility requirements and would otherwise become a Participant in a specific component of the Plan,shall go from a classificttilon of an Eligible Employee to an Ineligible class of Employees,such Employee shall become a Participant In such component of the Plan on the date such Employee again becomes as Eligible Employee,or.If later,the dale that the Employee would have otherwise entered such component of'the Plan had the Employee always been an Eligible Employee,However,if.such Employee incurs five(5)consecutive I-Year Breaks In Service, eligibility will be determined under the Break iii Service rules set forth in Section 3.5, 3,3 DETERMINATiON OF ELIGIBILITY • • The Administrator shall determine Hie eligibility of each Employee for participation in the Plan based upon Information furnished by the Employer.Such determination shall be conclusive and binding upon all parsons,as long as the seme,ls made pursuant to the Plan and the Act Such determination shalt be subject to review pursuant to Section 2,11, I + 3,4 TERMINATION OF ELIGIBILITY In the event a Participant shall go from a classification of an Eligible Employee to an ineligible Employee with respect a specific component of the Plan,then such Participant shall continue to Vest in such component of the Plan for each Year ol'Service completed w idle en Ineligible Employee,until such time as the Participants Account Is forfeited of dititrlbutcd pursuant to the terms of the Plan.AddiNnnally,the • Participants interest in lite Plan shall continue to share In the earnings of the'frust Round 3.5 REHIRED EMPLOYEES AND BREAKS IN SERVICE (a) Reemployed before five(5)consecutive 1-Year Breaks hi Service.Warty Employee becomes a Former Employee due to severance from employment with the Employer and Is reemployed by the Employer before five(5)consecutive 1-Year Breaks In Service occur,then the Former Employee's prior service shall count in the same manner as if severance from employment with the Employer had not occurred,I f any Participant ceases to be a Participant due to severance from employment with the Employer and is reemployed by the Employer before five(5)consecutive 1-Year Breaks In Service occur,then the Participant shall resume participation(in the same manner as If severance From employment with the Employer had not occurred)as of the reemployment slate, (b) Reemployed after five(5)consecutive 1-Year Breaks In Service("rule of parity"prdvisions).If tiny Einployee becomes a Former Employee due to severance from employment with the Employer and is reemployed after a 5-Yea'Break in Service has ocouiced,Years of Service shall include Years of Service prior to the 5-year break In service subject to the following rules; I • (I) Rule of parity.Iii the case of a Participant who under the Plan does not have a nonforFeltable right to any interest In the Plan resulting from Employer contributions,Years of Service before a period of consecutive I•Year Breaks In Service will not be taken into aoanmt if the number of consecutive I-Year Breaks in Service equal or exceed the greater oC(A)live(5)or(B)the ( ' aggregate number of pro-break Years of Service,Such aggregate number of'Years oi'Servlee will not Include tiny Years of Scivieo disregarded under the preceding sentence by reason ofprlor period of five(5)consecutive 1-Year Breaks in Service, 16 1 . __ , ' - -- - -'' '-- • _ _ _ _ _ _ - _ - _ _ _ - ' - _ ' ' - ' - .. . .. 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Y.citiftEis. .= The Sateicil4s4_wzmekale ratt4aysz 1 1 1 .i?cgts.25:1Pasitte ;- I g--. 5.Dit..bk -3,-r3ewiand;rops.selosqe. . ;.5. ] kr...1teal ,'`'' ik-ea/31-aelesirsintit-Ata•erfraw--atArroity:ctortrictg 11 1. • i-_ 1 r•-aw.p?•-• -ocatess - , 1:1 ..A 1 -iImui !-t- 1 v.R.3• WI • / - •- - - •_ . - _ . . .._ . ___ . .. . .___.. _______. ________________ - - — • { IVCcGladrey &Pullen, LLP DOMESTIC PARTNER BENEFITS POLICY Effective December 1, 2011 Revised February 2012 ELIGIBILITY All regular full-time and part-time employees employed by subsidiaries of McGladrey & Pullen, LLP, that adopt this policy (each subsidiary, a"Participating Employer") who have a "domestic partner" (as defined below) and who work .5 full-time equivalent are eligible to enroll for domestic partner benefits, DEFINITION OF DOMMESTIO PARTNER McGladrey defines domestic partners as two people, of the same gender or opposite gender, who have met all of the following requirements for at least the last 12 months: • Have established a domestic partnership (live together in a committed exclusive relationship); • • Intend for the domestic partnership to be permanent; • Are financially interdependent awl that they are jointly responsible for the common welfare and financial obligations of the household, or the non-Employee domestic partner is chiefly dependent upon the Employee for care and financial assistance; • Are not legally married to any other individual, and if previously married, a legal • divorce or annulment has been obtained or the former spouse is deceased; • Are not the domestic partner of anyone else for purposes of participation in any benefit plan or program provided by any other entity; i + Are both at least 18 years of age and mentally competent to enter into a legal contract; • * Are not related by blood closer than would bar marriage under applicable law; • • Are not in a relationship solely for the purpose of obtaining benefits provided by the Employee's Participating Employer; and • Complete and sign an Affidavit of Domestic Partner. Relationship for Benefits Eligibility. ELIGIBLE DEPENDENTS OF YOUR DOMESTIC PARTNER You may also cover the children of your domestic partner if they meet the following definition of an "Eligible Dependent." "Eligible Dependent" means the unmarried child (natural or adopted) of you or your domestic partner who lives in your household as his or her principal place of residence (unless he or she lives at school) and who is (a) less than 19 years old; (b) at least 19 years old but less than 25 years old, primarily supported by you or your domestic partner, and enrolled in school as a full-time student; or(c) regardless of age, primarily supported by you or your domestic partner and incapable of self-sustaining ° employment by reason of mental or physical handicap, • McGladrey Domestic Partner Benefits Policy 1 Revised February 2012 1 • • INCLUDED BENEFITS Upon approval for coverage, your domestic partner will be eligible to participate in all benefit plans which are extended to lawful spouses,with a few distinctions, as shown in the following chart: • Coverage Domestic Partner Eligibility Medical Medical coverage offerings will allow you to cover your domestic partner and his or her Eligible Dependents. • • Blue Cross/Blue Shield Consumer Choice Plan, • Blue Cross/Blue Shield Maximum Consumer Choice Plan, • Blue Cross/Blue Shield.ShareCare Plan • Blue Cross/Blue Shield Hawaii Plan, • Kaiser Permanente (if available), • • ' • Humana(Puerto Rico), and • • United Healthcare Services Company of the River Valley,Inc. (if available), I\ Dental, Dental coverage offered through Delta Dental will allow you to cover your domestic partner and his or her Eligible Dependents, Vision Vision coverage offered. through Vision Service Plan • (YSP) will allow you to cover your domestic partner and his or her Eligible Dependents. Flexible Spending Accounts and Under current law, reimbursements from your • Health Savings Accounts under the Medical Reimbursement Account, Dependent -Care • . McGladrey& Pullen, LLP Cafeteria Account and/or Health Savings Account cannot be Plan made for your domestic partner's expenses, or those of his or her. Eligible Dependents (unless the dependent-would otherwise qualify as a dependent within the meaning of Internal Revenue Code §152), • • Dependent Life Insurance You can insure the life of your domestic partner using the spouse option available to all employees, If you elect coverage for your domestic partner equal to • or greater than $50,000, evidence of insurability is • required. — • Dependent Accidental Death & You can insure the life of your domestic partner in Dismemberment Insurance case of accidental death or dismemberment. Evidence of insurability is not required, • Prepaid Legal Services The prepaid legal services plan offered through Hyatt Legal Plans will allow you to cover your. domestic partner and his or her Eligible Dependents, ' Adoption Assistance Up to $3,000 is provided to cover specific expenses • incurred in adopting a child under the age of 18. • 1 This amount is not available when adopting the child of a domestic partner or other household member • McGladrey Domestic Partner Benefits Policy 2 1 Revised February 2012 Q j I (just as it is not available when a married employee adopts his or her stepchild), The $3,000 limit per child applies even if both you and your domestic partner are employees of a Participating Employer. Employee Assistance Program The EAP is available for use by your domestic __partner and his or her Eligible Dependents, TAX IMPLICATIONS AND PAYING FOR DOMESTIC PARTNER BENEFITS • • , The tax implications to you are the combined impact of: ® The additional pest-tax employee contribution for adding domestic partner coverage, The contribution for your individual coverage will still be made on a pre-tax basis, and • A The additional taxable imputed income, which is subject to federal, FICA, state, local, and any other applicable payroll taxes, Employee Contributions Pre'Titx: The contribution for your coverage-(employee only coverage) is paid on a pre-tax basis, After'Tax:Your contribution for domestic partner coverage and their eligible dependents is paid on an after-tax basis. (Tax treatment may vary from state to state depending upon state domestic partnership laws). • Imputed Income The Internal Revenue Service requires that your Participating Employer add to your compensation reported to the IRS any amount representing the fair market value of providing the medical, dental, and/or vision coverage for your domestic partner and his or her Eligible Dependents less your after-tax contribution. The fair market value for covering only a domestic partner is the difference between the cost of continuing medical, dental, and/or vision coverage, as applicable, for the employee only (less the 2% administrative fee) and the cost of continuing medical, dental, and/or vision-coverage, as applicable, for the employee plus one (loss the 2% administrative fee). The fair market value for covering a domestic partner and his or her Eligible Dependents is the difference between the cost of continuing medical, dental, and/or vision coverage, as applicable, for the employee only (less the 2% administrative fee) and the cost of continuing medical, dental, and/or vision coverage, as applicable, for the employee plus two or more (less the 2% administrative fee). This amount is subject to federal, FICA, state, local, and any other applicable payroll taxes, Imputed income is shown as income on your paycheck stub and will be included in Box 1 on your Form W-2, Because of the tax implications, it is important, when evaluating the cost of covering your domestic partner, to consider both the additional contributions and additional taxes you r. will pay. Please contact your Participating Employer's Benefits Department for additional details on the amount of additional contributions and additional taxes you will, pay for domestic partner coverage. ENROLLMENT PROCESS To initiate the process of adding/removing a Domestic Partner and Domestic Partner dependents, review the instructions on your Participating Employer's intranet website or contact your Benefits Department. McGladrey Domestid Partner Benefits Policy • 3 ( Revised February 2012 1 i y Your signature, as well as your Domestic Partner's signature must both be notarized on the Affidavit of Domestic Partner Relationship for Benefits Eligibility at the end of this Policy. When completed, submit the documents to your Benefits Department. You will receive notification when your enrollment has been opened and is available for changes. If your request does not meet plan requirements you will be notified with the reason for the denial. Notification and enrollment(add/remove your Domestic Partner) must be completed within ' 45 days of the date of approval for you to have the option to change your benefit elections, • If this process is not completed timely, your next opportunity to add/remove your Domestic Partner will be during the annual Open Enrollment period. • ! CONTINUATION OF BENEFITS--COBRA COVERAGE Under federal law, you and your Eligible Dependents have the right to continued medical, dental, vision and Employee Assistance Program coverage if you and/or Eligible Dependents lose coverage, so long as you pay the full cost of the continuing coverage, Under federal law, such right is not extended to your domestic partner and his or her Eligible Dependents. Your Participating Employer, however, will offer the option to continue benefits after a loss of coverage as though the law did apply. The same options to continue coverage that apply to a spouse and your Eligible Dependents will apply to your • domestic partner and his or her Eligible Dependents, Contributions for continuation • coverage are based on the full monthly rate (employee and employer cost) plus a 2% ;• administrative fee, IF THE DOMESTIC PARTNERSHIP ENDS Should your relationship with your domestic partner end, or you no longer meet all of the requirements of a doinestio partner, you are no longer considered to be domestic partners and your former domestic partner and his or her Eligible Dependents Eire"no longer eligible for domestic partner coverage. To initiate the process of removing a Domestic*Partner / Domestic Partner dependents, review the instructions on your Participating Employer's intranet website or contact your Benefits Department. • You will need to notify your Participating Employer's Benefits Department by completing and returning the Statement of Termination of Domestic Partner Relationship. This will revoke your Affidavit of Domestic Partner Relationship for Benefits Eligibility, Your former domestic partner and his or her Eligible Dependents will then be offered continuation coverage similar to COBRA. Before you can claim another domestic partnership with the same or a different partner, you must once again meet all of the requirements for at least 12 consecutive months after you have filed the Statement of Termination of Domestic Partner Relationship with respect to the most recent former domestic partner. PARTICIPATING EIVIPLOYERS A list of Participating Employers is attached to this Policy as Appendix A. This list may 1 change from time to time to reflect new Participating Employers and withdrawing Participating Employers, McGladrey Domestic Partner Benefits Policy 4 Revised February 2012 4 APPENDIX A PARTICIPATING EMPLOYERS (as of January 1,2012) McGladrey Wealth Management,LLC RisIc&Regulatory Compliance, LLC • ' � I i � • ' I it McGladrey Domestic Partner Benefits Polley 5 ( Revised February 2012 AFFIDAVIT OF DOMESTIC PARTNER RELATIONSHIP FOR BENEFITS ELIGIBILITY I. Declaration We, ,("Employee")and ("Domestic Partner") hereby certify that we are domestic partners who satisfy the criteria listed in Section II of this Affidavit and,therefore, the Domestic Partner and his or her "Eligible Dependents" (as defined in the II&R Block Domestic Partner Benefits Policy), if any, may be covered under certain health and welfare plans sponsored or iinaintained by subsidiaries of H&R Block, Inc. who adopt the H&R Block Domestic Partner Benefits Policy(each such subsidiary, an"Employer"). II, Status We have met all of the following requirements for at least the last 12 months: 1, We have established a domestic partnership and live together in a committed • exclusive relationship; 2. We intend for the domestic partnership to be permanent; 2 S. We are financially interdependent such that we are jointly responsible for the common welfare and financial obligations of the household, or the Domestic Partner is chiefly dependent upon the Employee for care and financial assistance; 4, We are not legally married to any other individual, and if previously married, a legal • divorce or annulment has been obtained or the former spouse is deceased, and are not the domestic partner of anyone else; G. We are both at least 18 years of age and mentally competent to enter into a legal contract; • 6.. We are not related by blood closer than would bar marriage under applicable law; and 7. We are not in. a domestic partner relationship solely for the purpose of obtaining benefits provided by the Employee's Employer. III, Change in.Domestic Partner Relationship We acknowledge that, in the event we no longer meet the criteria set forth in Section II, we will no longer be considered domestic partners and the Domestic Partner and his or her Eligible Dependents, if any, will no longer beeligible for any of the benefits sponsored or maintained by the Employer that offers domestic partner coverage. � I We agree to .notify the Employee's Employer if there is any change in our status as • domestic partners as attested to in this Affidavit which would make the Domestic Partner and his or her Eligible Dependents, if any, no longer eligible for health and welfare benefits (for example, a change in the joint residence status or if we are no • McGladrey Domestic Partner Benefits Policy 6 Revised February 2012 longer each other's sole domestic partner), The Employee will notify his or her Employer in writing within 45 days of such change, The Employee shall affirm that the domestic partnership status terminated as of a certain date and that within 10 clays after such notification a copy of said notification will be mailed to the former Domestic Partner. We understand that failure to notify the Employer will,neither prevent nor delay the ability of the Employer to terminate the Domestic Prtner's eligibility for benefits based on the termination of the domestic partner relationship: • After such termination, the Employee understands that a subsequent Affidavit of • Domestic Partner Relationship for Benefits Eligibility cannot be filed until 12 months after the written notification of the termination has been filed with the Employee's Employer. N.Acknowledgements 1, We affirm, under penalty of perjury, that the assertions in this Affidavit are true to the best of our knowledge. 2. We understand that any companies or persons, including, but not limited to, the Employee's Employer, who suffer any loss due to any false statement contained in • • this Affidavit may bring a civil action against either or both of us to recover their losses, including reasonable attorney fees, 3. We agree to indemnify, jointly and severally, the Employee's Employer for any expenses or liabilities it incurs as a result of any misrepresentations or inaccuracies, whether made knowingly or unknowingly, in this Affidavit or in any of the information concerning our domestic partnership provided with the Affidavit, 4. We understand that any false statement contained in. this Affidavit, including failure to provide updated information as required herein, may be grounds for disciplinary action, including termination of benefits for either or both of us, or termination of employment for the Employee. 6. We understand that premiums, contributions or parts of premiums and/or contributions paid by the Employee's Employer in excess of the amount of the premium, contribution or parts of premiums and/or contributions for individual . coverage may be included in the Employee's reported gross income for tax • •• purposes, We further understand that the Employee will not be eligible to pay the portion of medical, dental, vision and Employee Assistance Program coverage contributions attributable to the domestic partner on a pre-tax basis. 6, We have provided the information in. this Affidavit for use by the Employee's • Employer solely for the purpose of determining eligibility for domestic partner benefits, that the information will be used solely for that purpose and that said information will remain strictly confidential, 7, We understand that some courts have recognized non-marriage relationships as the equivalent of marriage for the purpose of establishing and dividing community property. { McGlaclrey Domestic Partner Benefits Policy 7 Revised February 2012 8. We understand that domestic partners and their Eligible Dependents are Ineligible for COBRA continuation rights for coverage under group health plans, Domestic partners will,however, be given the opportunity to elect continuation coverage similar to COBRA. 9. We understand that the plan sponsor of the health and welfare plans maintained by the Employee's Employer that covers domestic partners may, in its sole discretion,at any time, amend,modify, terminate or otherwise change the terms of such plans, including the elimination of domestic partner coverage. 10. We understand that once this Affidavit is approved by the Employee's Employer, we will need to complete other enrollment materials in order to enroll the Domestic Partner and his or her Eligible Dependents, if any, in any health and welfare plans maintained by the Employer that offer domestic partner coverage. [Signature Page Follows] • MoGladrey Domestic Partner Benefits Policy 8 Revised February 2012 1 i AFFIDAVIT OF DOMESTIC PARTNER RELATIONSHIP FOR BENEFITS ELIGIBILITY SIGNATURE PAGE Employee Name (Signature) . (Printed) Employee ID Number PIS Number Social Security Number • • Employee Address Date • STATE OF COUNTY OF ss. Subscribed and sworn to before me this day of , Notary Public • '! My Commission Expires f • • Domestic Partner Name (Signature) (Printed) • Domestic Partner Birthdate Domestic Partner Social Security# Domestic Partner Address Date • STATE OF ) ) ss. COUNTY OF ) Subscribed and sworn to before me this day of Notary Public My Commission Expires Internal Use Only: I acknowledge receipt of this Affidavit. Signature and Title Date Approved for Domestic Partner Benefits Coverage Yes , No Signature and Title Date McGladrey Domestic Partner Benefits Policy 9 Revised February 2012 t � STATEMENT OI+'TERMINATION DOMESTIC PARTNER RELATIONSHIP This document will cancel the Affidavit of Domestic Pariiner Relationship for Benefits Eligibility previously filed with respect to (Domestic Partner) • and will consequently halt the provision of benefits to the Employee's former Domestic • Partner and his or her Eligible Dependents, This Statement is intended for the sole purpose of determining whether the domestic partner benefits offered by a subsidiary of kI&R Block,Inc. that has adopted the H&R Block • Domestic Partner Benefits Policy will cease. Upon receipt of this Statement by the Employee's employer, benefits will be discontinued as of the last day of the month that the Statement is received, or on a date consistent with policies and procedures as of that date. I, (Employee),certify and attest to the following: • 1, Complete one; (Domestic Partner) and I terminated our domestic partner relatio.aship with one anther effective (date), and therefore are no Ionger in a domestic partner relationship as defined in the Affidavit of Domestic Partner Relationship for Benefits Eligibility previously filed by my employer, • OR • (Domestic Partner)died on (date), . 2. I am filing this Statement of Termination in order to cancel the above'mentioned • • Affidavit of Domestic Partner Relationship for Benefits Eligibility. 3. In the event that termination of this domestic partner relationship is not due to the • • death of my domestic partner, I will mail my former domestic partner a copy of this notice within 10 clays of the date written below.at the following address: • • I declare that the above statements are true and correct. Employee's Name (Signature) (Printed) Employee ID or SS4 . iI Address: Date; **** kk kkfl• :Nk*kkkkA•kk*kisk * * kYtk *k A k**Wk*****A kkkk*** { Internal Use Only: Accepted by H&R Block Date; ' McGladroy Domestic Partner Benefits Policy 10 Revised Pebruary 2012 I ikAl;AWiBEACH ;:,,.:.,.•., aMlvim1991iMnLnHhiialnul i f f CiTY OF MIAMI BEACH REASONABLE MEASURES APPLICATION •• Declaration: Nondiscrimination in Contracts and Benefits • Submit this form and supporting documentation to the City's Procurement Division ONLY IF you: a. Have taken all reasonable measures to end discrimination In benefits; and b. Are unable to do so; and c. Intend to offer a cash equivalent to employees for whom equal benefits are not available, You must submit the following Information with this form: • • 1. The names, contact persons and telephone numbers of benefits providers contacted for the ' . purpose of acquiring nondiscriminatory benefits; • 2. The dates on which such benefits providers were contacted; 3. Copies of any written response(s)you received from such benefits providers, and if written responses are unavailable, summaries of oral responses; and 4. Anyrother Information you feel is relevant to documenting your Inability to end discrimination in benefits, including, but not limited to, reference to federal or state laws which preclude the • ending of discrimination In benefits, • I declare(or certify)under penalty of perjury under the laws of the State of Florida that the foregoing is true and correct, and that i am authorized to bind this entity contractually. Name of Company(please print) Mailing Address of Company • i Signature City, State, Zip • I Name of Signatory(please print) Telephone Number Title Date 4/20112 RFP No:34.11/12 City of Miami Beach Auditing Servioea • ' 38 of 43 { 9 Definition of Terms A. REASONABLE MEASURES The City of Miami Beach will determine whether a City Contractor has taken all reasonable measures provided by the City Contractor that demonstrates that ft Is not possible for the City Contractor to end discrimination In benefits. A determination that it Is not possible for the City Contractor to end - discrimination in benefits shall be based upon a consideration of such factors as: (1)The number of benefits providers identified and contacted, in writing, by the City Contractor, and written documentation from these providers that they will not provide equal benefits; (2)The existence of benefits providers willing to offer equal benefits to the City Contractor;and (3)The existence of federal or state laws which preclude the City Contractor from ending discrimination in benefits, • B, CASH EQUIVALENT "Cash Equivalent" means the amount of money paid to an employee with a Domestic Partner (or spouse, If applicable) in lieu of providing Benefits to the employees' Domestic partner(or spouse, If I ' applicable),The Cash Equivalent is equal to the employer's direct expense of providing Benefits to an I _ I • employee for his or her spouse. Cash Equivalent.The cash equivalent of the following benefits apply: a.For bereavement leave, cash payment for the number of days that would be allowed as paid time off for death of a spouse. Cash payment would be in the form of wages of the domestic partner employee for the number of days allowed, • b.For health benefits,the cost to the Contractor of the Contractor's share of the single monthly premiums that are being paid for the domestic partner employee, to be paid on a regular basis while the domestic partner employee maintains the such Insurance in force for himself or herself. • c, For family'medical leave, cash payments for the number of days that would be allowed as time off for an employee to care for a spouse that has a serious health condition. Cash payment would be in the form of wages of the domestic partner employee for the number of days allowed. ( 4/20/12 RFP No;34-11!12 • City of Mlaml Beach Auditing Services 3B of 43 •1 M1AM;IBE . :CH .:..:....it.......-: CITY OF MIAMI BEACH SUBSTANTIAL COMPLIANCE AUTHORIZATION FORM Declaration: Nondiscrimination in Contracts and Benefits This form, and supporting documentation, must be submitted to the Procurement Division by entities seeking to contract with the City of Miami Beach that wish to delay ending their discrimination in benefits pursuant to the Rules of Procedure, as set out below, Fill out all sections that apply. Attach additional sheets as necessary. A. Open Enrollment Ending discrimination in benefits may be delayed until the first effective date after the first open enrollment process following the date the contract with the City begins, provided that the City Contractor submits to the Procurement Division evidence that reasonable efforts are being undertaken to end discrimination in benefits. This delay may not exceed two years from the date the contract with the City is entered Into, and only applies to benefits for which an open enrollment process is applicable. Date next benefits plan year begins: I , Date nondiscriminatory benefits will be available: Reason for Delay: • Description of efforts being undertaken to end discrimination in benefits: B.Administrative Actions and Request for Extension Ending discrimination in benefits may be delayed to allow administrative steps to be taken to incorporate nondiscriminatory benefits into the City Contractor's infrastructure. The time allotted for these administrative steps shall apply only to those benefits for which administrative steps are necessary and may not exceed 4/20/12 RFP'No;34-11/12 city of Miami Beach • Auditing Services '40 of 43 • three months, An extension of this time may be granted at the discretion of the Procurement Director, upon the written request of the City Contractor, Administrative steps may include, but are not limited to, such actions as computer systems modifications, personnel policy revisions, and the development and distribution of employee communications, Description of administrative steps and dates to be achieved If requesting extension beyond three months,please explain basis: C. Collective Bargaining Agreements(CBA) Ending discrimination in benefits may be delayed until the expiration of a City Contractor's Current collective bargaining agreement(s)where all of the following conditions have been met: 1, The provision of benefits is governed by one or more collective bargaining agreement(s); i 2, The City Contractor takes all reasonable measures to end discrimination In benefits either by requesting that the Unions Involved agree to reopen the agreements in order for the City Contractor to take whatever steps necessary to end discrimination in benefits or by ending discrimination in benefits without reopening the collective bargaining agreements; and 3• in the event that the City Contractor cannot end discrimination in benefits despite taking all reasonable measures to do so, the City Contractor ,provides a cash equivalent to eligible employees for whom benefits are not available. Unless otherwise authorized in writing by the Procurement Director,this-cash equivalent payment must begin at thetime the Unions refuse to allow the : collective bargaining agreements to be reopened, or in any case no longer than three (3) months from the date the contract with the City Is entered into. For a delay to be granted under this provision, written proof must be submitted with this form that: The benefits for which the delay is requested are governed by a collective bargaining agreement; All reasonable measures have been taken to end discrimination In benefits (see Section 0,2, above); and A cash equivalent payment will be provided to eligible employees for whom benefits are not available, • I declare(or certify) under penalty of perjury under the laws of the State of Florida that the foregoing Is true and correct, and that I am authorized to bind this entity contractually. • Name of Company(please print) Mailing Address of Company . Signature City, State,Zip 6 . a 1 Name of Signatory(please print) Telephone Number < Title Date • 4120112 RFP No;34.11!12 city of Miami Beach Auditing Servloee ' 41 of 43 I i , • : • ) . ) I ) ! . • ) ) . , ) ) 1• ) ) , 1 ) ) ( ) 1 ) ( ) ) ) ) ) I )• ) )" REQUEST FOR PROPOSALS ( RFP) FOR • AUDITING SERVICES TO EXAMINE THE CITY'S BASIC FINANCIAL STATEMENTS INCLUDED IN THE CITY'S COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR), FEDERAL GRANT PROGRAMS AND STATE , PROJECTS (OMB A-133 SINGLE AUDIT), AND THE FINANCIAL STATEMENTS OF THE MIAMI BEACH .REDEVELOPMENT AGENCY (RDA), THE PARKING SYSTEMS FUND (PSF), THE MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (VCA), THE MIAMI BEACH CONVENTION CENTER, THE BUILDING BETTER COMMUNITIES BOND PROGRAM (BBC), THE CHILDREN'S TRUST GRANT PROGRAM (CT), AND THE SAFE NEIGHBORHOOD PARKS AND BOND PROGRAM (SNP). RFP 2014-276-LR 1 RFP ISSUANCE DATE: SEPTEMBER 25, 2014 PROPOSALS DUE: OCTOBER 17, 2014 @ 3:00 PM ISSUED BY: Lourdes Rodriguez gam • i Lourdes Rodriguez, Senior Procurement Specialist PROCUREMENT DEPARTMENT 1700 Convention Center Drive, Miami Beach, FL 33139 305.673.7000 x66521 Fax: 786.394.4075 I www.miamibeachfl.gov ISA MIAMI BEACH TABLE OF CONTENTS SOLICITATION SECTIONS: PAGE 0100 NOT UTILIZED N/A 0200 INSTRUCTIONS TO PROPOSERS & GENERAL CONDITIONS 3 0300 PROPOSAL SUBMITTAL INSTRUCTIONS & FORMAT 10 0400 PROPOSAL EVALUATION 13 • APPENDICES: PAGE APPENDIX A PROPOSAL CERTIFICATION, QUESTIONNAIRE AND AFFIDAVITS 17 APPENDIX B "NO PROPOSAL" FORM 24 APPENDIX C MINIMUM REQUIREMENTS & SPECIFICATIONS 26 APPENDIX D SPECIAL CONDITIONS 30 APPENDIX E COST PROPOSAL FORM 32 APPENDIX F INSURANCE REQUIREMENTS ( 35 . 9 J RFP 2014-276-LR Auditing Services 2 • 0 MIAMI BEACH SECTION 0200 INSTRUCTIONS TO RESPONDENTS&GENERAL CONDITIONS 1. GENERAL. This Request for Proposals (RFP) is issued by the City of Miami Beach, Florida (the "City"), as the means for prospective Proposers to submit their qualifications, proposed scopes of work and cost proposals (the "proposal") to the City for the City's consideration as an option in achieving the required scope of services and requirements as noted herein. All documents released in connection with this solicitation, including all appendixes and addenda, whether included herein or released under separate cover, comprise the solicitation,• and are complementary to one another and together establish the complete terms, conditions and obligations of the Proposers and, subsequently, the successful Proposer(s) (the "contractor[s]") if this RFP results in an award. The City utilizes,PublicPurchase (www.publicpurchase.com) for automatic notification of competitive solicitation opportunities and document fulfillment, including the issuance of any addendum to this RFP. Any prospective Proposer who has received this RFP by any means other than through PublicPurchase must register immediately with PublicPurchase to assure it receives any addendum issued to this RFP. Failure to receive an addendum may result in disqualification of proposal submitted. 2. PURPOSE. The City of Miami Beach (the City) is required to have an annual audit performed on the City's Comprehensive Annual Financial Report (CAFR) in accordance with Florida Statutes 218.39. Other audits are required to be conducted in accordance with the U.S. Office of Management and Budget (OMB) Circulars, Bonded Debt Covenants, Performance Management and/or Grant Agreements. Each audit herein must be conducted by an independent audit firm. Pursuant to the above requirements, the City is required to procure auditing services to examine the City's Basic Financial Statements included' in the City's Comprehensive Annual Financial Report (CAFR), Federal grant programs and State projects (OMB A-133 Single Audit) and the financial statements_ of the Miami Beach Redevelopment Agency's (RDA) the Parking Systems Fund's (PSF) , the Miami Beach Visitor and Convention Authority's (VCA), the Miami Beach Convention Center (MBCC), as managed by Global Spectrum (GS), the Safe Neighborhood Parks and Bond Program (SNP), Children Trust(CT) and Building Better Communities (BBC). 3. SOLICITATION TIMETABLE. The tentative schedule for this solicitation is as follows: RFP Issued September 25, 2014 Pre-Proposal Teleconference October 3,2014 at 10 a.m. Deadline for Receipt of Questions October 7, 2014 Responses Due October 17, 2014 at 3 p.m. Evaluation Committee Review October 23, 2014 Proposer Presentations October 23, 2014. Tentative Commission Approval Authorizing October 29, 2014 Negotiations Contract Negotiations Following Commission Approval RFP 2014-2761R Auditing Services 3 MIAMI BEACH 4. PROCUREMENT CONTACT. Any questions or clarifications concerning this solicitation shall be submitted to the Procurement Contact named herein, in writing, with a copy to the City Clerk's Office, Rafael E. Granado via e-mail: RafaelGranadomiamibeachfl.gov ; or facsimile: 786-394-4188. The Bid title/number shall be referenced on all correspondence. All questions or requests for clarification must be received no later than ten (10) calendar days prior to the date proposals are due as scheduled in Section 0200-3. All responses to questions/clarifications will be sent to all prospective Proposers in the form of an addendum. Procurement Contact: Telephone: Email: Lourdes Rodriguez (305)673-7000 x 6652 Iourdesrodriguez@miamibeachfl.gov 5. PRE-PROPOSAL MEETING OR SITE VISIT(S). Only if deemed necessary by the City, a pre-proposal meeting or site visit(s) may be scheduled. A Pre-PROPOSAL Teleconference will be held as scheduled in Solicitation Timeline above. Attendance via telephone is encouraged and recommended as a source of information, but is not mandatory. Proposers interested in participating in the Pre-Proposal Submission Meeting via telephone must follow these steps: (1) Dial the TELEPHONE NUMBER: 1-888-270-9936(Toll-free North America) (2) Enter the MEETING NUMBER: 1142644 Proposers who are interested in participating via telephone should send an e-mail to the contact person listed in this RFP expressing their intent to participate via telephone. 6. PRE-PROPOSAL INTERPRETATIONS. Oral information or responses to questions received by prospective Proposers are not binding on the City and will be without legal effect, including any information received at pre- submittal meeting or site visit(s). Only questions answered by written addenda will be binding and may supersede terms noted in this solicitation. Addendum will be released through PublicPurchase. 7. CONE OF SILENCE. Pursuant to Section 2-486 of the City Code, all procurement solicitations once advertised and until an award recommendation has been forwarded to the City Commission by the City Manager are under the "Cone of Silence." The Cone of Silence ordinance is available at http://library.municode.com/index.aspx?clientlD=13097&statelD=9&statename=Florida. Any communication or inquiry in reference to this solicitation with any City employee or City official is strictly prohibited with the of exception communications with the Procurement Director, or his/her administrative staff responsible for administering the • procurement process for this solicitation providing said communication is limited to matters of process or procedure regarding the solicitation. Communications regarding this solicitation are to be submitted in writing to the Procurement Contact named herein with a copy to the City Clerk at rafaelgranado@miamibeachfl.gov. 8. SPECIAL NOTICES. You are hereby advised that this solicitation is subject to the following ordinances/resolutions, which may be found on the City Of Miami Beach website: • http://web.miamibeachfl.qov/procurementlscroll.aspx?id=23510 • CONE OF SILENCE CITY CODE SECTION 2-486 • PROTEST PROCEDURES_........„....„...... .............. ...... CITY CODE SECTION 2-371 • DEBARMENT PROCEEDINGS...... ..... ............ .............. CITY CODE SECTIONS 2-397 THROUGH 2-485,3 • LOBBYIST REGISTRATION AND DISCLOSURE OF FEES , CITY CODE SECTIONS 2-481 THROUGH 2-406 • CAMPAIGN CONTRIBUTIONS BY VENDORS,„ ............................. CITY CODE SECTION 2-487 • CAMPAIGN CONTRIBUTIONS BY LOBBYISTS ON PROCUREMENT ISSUES CITY CODE SECTION 2-488 4 RFP 2014-276-LR Auditing Services MIAMI BEACH • REQUIREMENT FOR CITY CONTRACTORS TO PROVIDE EQUAL BENEFITS FOR DOMESTIC PARTNERS.............................. CITY CODE SECTION 2-373 • LIVING WAGE REQUIREMENT CITY CODE SECTIONS 2-407 THROUGH 2-410 • PREFERENCE FOR FLORIDA SMALL BUSINESSES OWNED AND CONTROLLED BY VETERANS AND TO STATE-CERTIFIED SERVICE- DISABLED VETERAN BUSINESS ENTERPRISES....-„........ CITY CODE SECTION 2-374 • FALSE CLAIMS ORDINANCE-....... ............................. CITY CODE SECTION 70-300 • ACCEPTANCE OF GIFTS,FAVORS&SERVICES CITY CODE SECTION 2-449 9. POSTPONEMENT OF DUE DATE FOR RECEIPT OF PROPOSALS. The City reserves the right to postpone the deadline for submittal of proposals and will make a reasonable effort to give at least three (3) calendar days written notice of any such postponement to all prospective Proposers through PublicPurchase. 10. PROTESTS. Protests concerning the specifications, requirements, and/or terms; or protests after the proposal due date in accordance with City Code Section 2-371, which establishes procedures for protested proposals and proposed awards. Protests not submitted in a timely manner pursuant to the requirements of City Code Section 2= 371 shall be barred. 11. MIAMI BEACH-BASED VENDORS PREFERENCE. Pursuant to City of Miami Beach Ordinance No. 2011-3747, as amended, a five (5) point preference will be given to a responsive and responsible Miami Beach-based Proposer. 12. VETERAN BUSINESS ENTERPRISES PREFERENCE. Pursuant to City of Miami Beach Ordinance No. 2011- 3748, as amended, the City shall give a five (5) point preference to a responsive and responsible Proposer which is a small business concern owned and controlled by a veteran(s) or which is a service-disabled veteran business enterprise. 13. DETERMINATION OF AWARD. The final ranking results of Step 1 & 2 outlined in Section 0400, Evaluation of Proposals, will beconsidered by the City Manager who may recommend to the City Commission the Proposer(s) s/he deems to be in the best interest of the City or may recommend rejection of all proposals. The City Manager's recommendation need not be consistent with the scoring results identified herein and takes into consideration Miami Beach City Code Section 2-369, including the following considerations: (1)The ability, capacity and skill of the Proposer to perform the contract. (2) Whether the Proposer can perform the contract within the time specified, without delay or interference. (3)The character, integrity, reputation,judgment,experience and efficiency of the Proposer. (4) The quality of performance of previous contracts. (5)The previous and existing compliance by the Proposer with laws and ordinances relating to the contract. The City Commission shall consider the City Manager's recommendation and may approve such recommendation. The City Commission may also, at its option, reject the City Manager's recommendation and select another Proposal or Proposals which it deems to be in the best interest of the City, or it may also reject all Proposals. Upon approval of selection by the City Commission, negotiations between the City and the selected Proposer(s) will take place to arrive at a mutually acceptable Agreement. 14. ACCEPTANCE OR REJECTION OF PROPOSALS. The City reserves the right to reject any or all proposals prior to award. Reasonable efforts will be made to either award the Contract or reject all proposals within one- hundred twenty (120) calendar days after proposals opening date. A Proposer may not withdraw its proposals unilaterally before the expiration of one hundred and twenty(120)calendar days from the date of proposals opening. 5 RFP 2014-276-LR Auditing Services CA MIAMI BEACH 15. PROPOSER'S RESPONSIBILITY. Before submitting a Proposal, each Proposer shall be solely responsible for making any and all investigations, evaluations, and examinations, as it deems necessary, to ascertain all conditions and requirements affecting the full performance of the contract. Ignorance of such conditions and requirements, and/or failure to make such evaluations, investigations, and examinations, will not relieve the Proposer from any obligation to comply with every detail and with all provisions and requirements of the contract, and will not be accepted as a basis for any subsequent claim whatsoever for any monetary consideration on the part of the Proposer. 16. COSTS INCURRED BY PROPOSERS.All expenses involved with the preparation and submission of Proposals, or any work performed in connection therewith, shall be the sole responsibility (and shall be at the sole cost and expense)of the Proposer, and shall not be reimbursed by the City. 17. RELATIONSHIP TO THE CITY. It is the intent of the City, and Proposers hereby acknowledge and agree, that the successful Proposer is considered to be an independent contractor, and that neither the Proposer, nor the Proposer's employees, agents, and/or contractors, shall, under any circumstances, be considered employees or agents of the City. 18.TAXES.The City of Miami Beach is exempt from all Federal Excise and State taxes, 19. MISTAKES. Proposers are expected to examine the terms, conditions, specifications, delivery schedules, proposed pricing, and all instructions pertaining to the goods and services relative to this RFP. Failure to do so will be at the Proposer's risk and may result in the Proposal being non-responsive. 20. PAYMENT. Payment will be made by the City after the goods or services have been received, inspected, and found to comply with contract, specifications, free of damage or defect, and are properly invoiced, Invoices must be consistent with Purchase Order format'. • 21. PATENTS&ROYALTIES. Proposer shall indemnify and save harmless the City of Miami Beach, Florida, and its officers, employees, contractors, and/or agents, from liability of any nature or kind, including cost and expenses for, or on account of, any copyrighted, patented, or unpatented invention, process, or article manufactured or used in the performance of the contract, including its use by the City of Miami Beach, Florida. If the Proposer uses any design, device or materials covered by letters, patent, or copyright, it is mutually understood and agreed, without exception, that the proposal prices shall include all royalties or cost arising from the use of such design, device, or materials in any way involved in the work. 22. MANNER OF PERFORMANCE. Proposer agrees to perform its duties and'obligations in a professional manner and in accordance with all applicable Local, State, County, and Federal laws, rules, regulations and codes. Lack of knowledge or ignorance by the Proposer with/of applicable laws will in no way be a cause for relief from responsibility. Proposer agrees that the services provided shall be provided by employees that are educated,trained, experienced, certified, and licensed in all areas encompassed within their designated duties. Proposer agrees to furnish to the City any and all documentation, certification, authorization, license, permit, or registration currently required by applicable laws, rules, and regulations. Proposer further certifies that it and its employees will keep all licenses, permits, registrations, authorizations, or certifications required by applicable laws or regulations in full force and effect during the term of this contract. Failure of Proposer to comply with this paragraph shall constitute a material breach of this contract. I Where contractor is required to enter or go on to City of Miami Beach property to deliver materials or perform work or services as a result of any contract resulting from this solicitation, the contractor will assume the full duty, obligation 6 RFP 2014-276-LR Auditing Services MIAMI BEACH and expense of obtaining all necessary licenses, permits, and insurance, and assure all work complies with all applicable laws. The contractor shall be liable for any damages or loss to the City occasioned by negligence of the Proposer, or its officers, employees, contractors, and/or agents, for failure to comply with applicable laws. 23. SPECIAL CONDITIONS. Any and all Special Conditions that may vary from these General Terms and Conditions shall have precedence. 24. ANTI-DISCRIMINATION. The Proposer certifies that he/she is in compliance with the non-discrimination clause contained in Section 202, Executive Order 11246, as amended by Executive Order 11375, relative to equal employment opportunity for all persons without regard to race, color, religion, sex or national origin. 25. DEMONSTRATION OF COMPETENCY. A. Pre-award inspection of the Proposer's facility may be made prior to the award of contract. B. Proposals will only be considered from firms which are regularly engaged in the business of providing the goods and/or services as described in this solicitation. C. Proposers must be able to demonstrate a good record of performance for a reasonable period of time, and have sufficient financial capacity, equipment, and organization to ensure that they can satisfactorily perform the services if awarded a contract under the terms and conditions of this solicitation. D. The terms "equipment and organization", as used herein shall, be construed to mean a fully equipped and well established company in line with the best business practices in the industry, and as determined by the,City of Miami Beach. E. The City may consider any evidence available regarding the financial, technical, and other qualifications and abilities of a Proposer, including past performance (experience), in making an award that is in the best interest of the City. F. The City may require Proposer s to show proof that they have been designated as authorized representatives of a manufacturer or supplier, which is the actual source of supply. In these instances, the City may also require material information from the source of supply regarding the quality, packaging, and characteristics of the products to be supply to the City. 26. ASSIGNMENT. The successful Proposer shall not assign, transfer, convey, sublet or otherwise dispose of the contract, including any or all of its right, title or interest therein, or his/her or its power to execute such contract, to any person, company or corporation, without the prior written consent of the City. 27. LAWS, PERMITS AND REGULATIONS. The Proposer shall obtain and pay for all licenses, permits, and inspection fees required to complete the work and shall comply with all applicable laws. 28. OPTIONAL CONTRACT USAGE. When the successful Proposer(s) is in agreement, other units of government • or non-profit agencies may participate in purchases pursuant to the award of this contract at the option of the unit of government or non-profit agency. 29. VOLUME OF WORK TO BE RECEIVED BY CONTRACTOR. It is the intent of the City to purchase the goods and services specifically listed in this solicitation from the contractor. However, the City reserves the right to purchase any goods or services awarded from state or other governmental contract, or on an as-needed basis through the City's spot market purchase provisions. {I 30. DISPUTES. In the event of a conflict between the documents, the order of priority of the documents shall be as follows: A. Any contract or agreement resulting from the award of this solicitation;then B. Addendum issued for this solicitation, with the latest Addendum taking precedence; then 7 RFP 2014-276-LR Auditing Services MIAMIBEACH C. The solicitation; then D. The Proposer's proposal in response to the solicitation, 31. INDEMNIFICATION. The contractor shall indemnify and hold harmless the City and its officers, employees, agents and instrumentalities from any and all liability, losses or damages, including attorney's fees and costs of defense, which the City or its officers, employees, agents or instrumentalities may incur as a result of claims, demands, suits, causes of actions or proceedings of any kind or nature arising out of, relating to or resulting from the performance of the agreement by the contractor or its employees, agents, servants, partners, principals or subcontractors. The contractor shall pay all claims and losses in connection therewith, and 'shall investigate and defend all claims, suits or actions of any kind or nature in the name of the City, where applicable, including appellate proceedings, and shall pay all costs, judgments, and attorney's fees which may be incurred thereon. The contractor • expressly understands and agrees that any insurance protection required by this Agreement or otherwise provided by the contractor shall in no way limit the responsibility to indemnify, keep and save harmless and defend the City or its officers, employees, agents and instrumentalities as herein provided. The above indemnification provisions shall survive the expiration or termination of this Agreement. 32. CONTRACT EXTENSION. The City reserves the right to require the Contractor to extend contract past the stated termination date for a period of up to 120 days in the event that a subsequent contract has not yet been awarded. Additional extensions past the 120 days may occur as needed by the City and as mutually agreed upon by the City and the contractor, 33. FLORIDA PUBLIC RECORDS LAW. Proposers are hereby notified that all Bid including, without limitation, any and all information and documentation submitted therewith, are exempt from public records requirements under Section 119.07(1), Florida Statutes, and s. 24(a), Art. 1 of the State Constitution until such time as the City provides notice of an intended decision or until thirty (30) days after opening of the proposals, whichever is earlier. Additionally, Contractor agrees to be in full compliance with Florida Statute 119.0701 including, but not limited to, agreement to (a) Keep and maintain public records that ordinarily and necessarily would be required by the public agency in order to perform the services; (b) provide the public with access to public records on the same terms and conditions that the public agency would provide the records and at a cost that does not exceed the cost provided in this chapter or as otherwise provided by law; (c) Ensure that public records that are exempt or confidential and • exempt from public records disclosure requirements are not disclosed except as authorized by law; (d) Meet all requirements for retaining public records and transfer, at no cost, to the public agency all public records in possession of the contractor upon termination of the contract and destroy any duplicate public records that are exempt or confidential and exempt from public records disclosure requirements. All records stored electronically must be provided to the public'agency in a format that is compatible with the information technology systems of the public agency, 34. MODIFICATION/WITHDRAWALS OF PROPOSALS. A Proposer may submit a modified Proposal to replace all or any portion of a previously submitted Proposal up until the Proposal due date and time. Modifications received after the Proposal due date and time will not be considered. Proposals shall be irrevocable until contract award unless withdrawn in writing prior to the Proposal due date, or after expiration of 120 calendar days from the opening '. of Proposals without a contract award, Letters of withdrawal received after the Proposal due date and before said expiration date, and letters of withdrawal received after contract award will not be considered. '.i 35. EXCEPTIONS TO RFP. Proposers must clearly indicate any exceptions they wish to take to any of the terms in this RFP, and outline what, if any, alternative is being offered. All exceptions and alternatives shall be included and clearly delineated, in writing, in the Proposal. The City, at its sole and absolute discretion, may accept or reject any or all exceptions and alternatives. In cases in which exceptions and alternatives are rejected, the City shall require the Proposer to comply with the particular term and/or condition of the RFP to which Proposer took•exception to(as 8 RFP 2014-276-LR Auditing Services MIAMIBEACH said term and/or condition was originally set forth on the RFP). 36.ACCEPTANCE OF GIFTS, FAVORS, SERVICES. Proposers shall not offer any gratuities,favors, or anything of monetary value to any official, employee, or agent of the City, for the purpose of influencing consideration of this Proposal. Pursuant to Sec. 2-449 of the City Code, no officer or employee of the City shall accept any gift, favor or service that might reasonably tend improperly to influence him in the discharge of his official duties. Balance of Page Intentionally Left Blank 9 RFP 2014-276-LR Auditing Services MIAMI BEACH SECTION 0300 PROPOSAL SUBMITTAL INSTRUCTIONS AND FORMAT 1. SEALED RESPONSES. One original Proposal (preferably in 3-ring binder) must be submitted in an opaque, sealed envelope or container on or before the due date established for the receipt of proposals. Additionally, ten (10) bound copies and one (1) electronic format (CD or USB format) are to be submitted. The following information should be clearly marked on the face of the envelope or container in which the proposal is submitted: solicitation number, solicitation title, Proposer name, Proposer return address. Proposals received electronically, either through email or facsimile, are not acceptable and will be rejected. 2. LATE BIDS. Bid Proposals are to be received on or before the due date established herein for the receipt of Bids. Any Bid received after the deadline established for receipt of proposals will be considered late and not be accepted or will be returned to Proposer unopened. The City does not accept responsibility for any delays, natural or otherwise. 3. PROPOSAL FORMAT. In order to maintain comparability, facilitate the review process and assist the Evaluation Committee in review of proposals, it is strongly recommended that proposals be organized and tabbed in accordance with the sections and manner specified below. Hard copy submittal should be tabbed as enumerated below and contain a table of contents with page references. Electronic copies should also be tabbed and contain a • table of contents with page references. Proposals that do not include the required information will be deemed non- responsive and will not be considered. TAB 1 Cover Letter&Minimum Qualifications Requirements 1.1 Cover Letter and Table of Contents.The cover letter must indicate Proposer and Proposer Primary Contact for the purposes of this solicitation. 1.2 Proposal Certification, Questionnaire & Requirements Affidavit (Appendix A). Attach Appendix A fully completed and executed. 1.3 Minimum Qualifications Requirements. Submit verifiable information documenting compliance with the minimum qualifications requirements established in Appendix C, Minimum Requirements and Specifications. TAB.2 Experience&Qualifications 2.1 Qualification of Proposing Firm. Submit detailed information regarding the firm's history and relevant experience and proven track record of providing the scope of services similar as identified in this solicitation, including experience in providing similar scope of services to public sector agencies. For each project that the Proposer submits as evidence of similar experience, the following is required: project description,agency name,agency contact,contact telephone&email,and year(s)and term of engagement. 1. Describe the respondent's (firm and proposal team) professional development program, including the approximate number of hours of continuing education attended by the respondent.Also indicate the number of days of specialized training in governmental accounting and auditing received during the last two years of personnel to be assigned to this engagement. Indicate compliance with the State Board of Accountancy requirements applicable to audits of Florida local governments. 2. Describe the participation of the respondent (firm and proposal team) in national or state, governmental or professional, accounting or auditing Boards or Committees during the last three years. 3. Describe the respondent's quality control programs and procedures that ensure compliance with the respondent's professional standards review and AICPA standards, Indicate whether the respondent is in the SEC Practice Section and/or the Private Companies Practice Section of the Quality Control Program. If the respondent answered positively to the preceding, attach a copy of the last Peer Review received by the respondent. 4. Describe the respondent's (local office for national firms) experience in providing accounting and auditing services to local RFP 2014-276-LR Auditing Services 10 MIAMI BEACH governments. 5. Describe any litigation in excess of$100,000 filed against the respondent in the State of Florida over the last three years. Also describe any terminations,suspensions,censures, reprimands,'probations or similar actions against the respondent or any member of the respondent's firm by the Florida State Board of Accountancy in the last three years. • 6. Provide evidence that the firm(s)is a member of the American Institute of Certified Public Accountants and the Florida Institute of Certified Public Accountants with the proposal submission package or within three(3)days upon request from the City. 7. Provide evidence that the assigned professional personnel of the firm(s) have received adequate continuing professional education as stipulated by Government Auditing Standards issued by the Comptroller General of the United States with the proposal submission package or within three(3)days upon request from the City. •• 8. The firm(s) must be independent of the City as defined by generally accepted auditing standards and Government Auditing Standards,and respondents shall include a statement to their independence with regard to the City. 9. The firm(s) must submit a copy of the two(2) most recent external quality control review reports and letters of comment, along with a statement indicating whether the reviews included a review of specific governmental engagements with the proposal submission package. 10. The proposed engagement partner,manager and senior auditor must have experience performing a Single Audit in accordance with generally accepted auditing standards, Government Auditing Standards issued by the Comptroller General of the United States,the Single Audit Act Amendments of 1996,the provisions of OMB Circular A-133,Audits of State and Local Governments; and the Rules of the Auditor General of the State of Florida. 11. The firm(s)must maintain a permanent office within Miami-Dade, Broward or Palm Beach County upon award of contract, • 12. Provide as reference a minimum of three(3)municipalities that the firm is currently providing auditing services. 13. Identify the five(5)largest government audit clients your firm(or office)has lost in the past three(3)years and the reasons. 2.2 Qualifications of Proposer Team. List the members of the project team and specify the role that each team member will play in providing the services detailed herein and eachieam members' qualifications. Provide a list of the personnel to be used on the project and their qualifications. A resume including education, experience, licenses and any other pertinent information shall be included for each team member, including subcontractors to be assigned to each project. These resumes should be, at minimum, for the proposed engagement partner, the manager and the senior auditor for this engagement. The resume should include the continuing education in governmental auditing and other governmental audit engagements that they have undertaken. 2.3 Financial Capacity. Each Proposer shall arrange for Dun & Bradstreet to submit a Supplier Qualification Report(SQR)directly to the Procurement Contact named herein. No proposal will be considered without receipt,by the City,of the SQR directly from Dun & Bradstreet. The cost of the preparation of the SQR shall be the responsibility of the Proposer. The Proposer shall request the SQR report from D&B at: https:/lsuppiierportal.dnb.coralwebapp/wcs/storeslservlet/Suppl ierPortal?storeld=11696 Proposers are responsible for the accuracy of the information contained In its SQR. It is highly recommended that each Proposer review the information contained in the SQR for accuracy prior to submittal to the City and as early as possible in the solicitation process. For assistance with any portion of the SQR submittal process contact Dun&Bradstreet at 800- 424-2495. 11 RFP 2014-276-LR Auditing Services MIAMI BEACH TAB 3 Scope of Services Proposed Submit detailed information outlining the scope of services that the proposer is proposing. For any scope requirement identified in Appendix C, Minimum Requirements and Specifications, proposer is to clearly articulate how the proposed solution satisfies the scope requirement. Proposers may offer complementary or related services or solutions beyond the stated scope requirements. Responses shall be in sufficient detail and include supporting documentation,as applicable,which will allow the Evaluation Committee to complete a fully review and score the proposed scope of services. TAB 4 Approach and Methodology Submit detailed information on how Proposer plans to accomplish the required scope of services, including detailed information, as applicable, which addresses, but need not be limited to: Implementation plan, project timeline, phasing options, testing and risk • " mitigation options for assuring project is implemented on time and within budget. Describe the respondent's approach to this audit engagement.This should include at a minimum the following: 1. Development of the audit program. 2. Organization of the audit team and titles of team members and approximate amount of time each such class of member will spend on the audit. • 3. The names of the partner and manager that will be assigned to this engagement and the extent of their involvement with this engagement. Any substitution of these individuals must be approved by the Audit Committee prior to any change of staffing. 4. The proposed schedule for the audit 5. Any anticipated use and planned reliance, if any,on the internal audit staff of the City. TAB 5 Cost Proposal Submit a completed Cost Proposal Form(Appendix E). Note: After proposal submittal, the City reserves the right to require additional information from Proposers (or Proposer team members or sub-consultants)to determine:qualifications(including, but not limited to,litigation history,regulatory action,or additional references);and financial capability(including,but not limited to, annual reviewed/audited financial statements with the auditors notes for each of their last two complete fiscal years). Remainder of Page Intentionally Left Blank • 12 RFP 2014-276-LR Auditing Services m MIAMI BEACH SECTION 0400 PROPOSAL EVALUATION 1. Audit Committee. Per Florida Statute 218.391 the Auditor selection procedures are to be followed as detailed below: (1) Each local governmental entity, district school board, charter school, or charter technical career center, prior to entering into a written contract pursuant to subsection (7), except as provided In subsection (8), shall use auditor selection procedures when selecting an auditor to conduct the annual financial audit required in s. 218.39, (2) The governing body of a charter county, municipality, special district, district school board, charter school, or charter technical career center shall establish an audit committee, Each non charter county shall establish an audit committee that, at a minimum, shall consist of each of the county officers elected pursuant to s. 1(d), Art. VIII of the State Constitution, or a designee, and one member of the board of county commissioners or its designee, The primary purpose of the audit committee is to assist the governing body in selecting an auditor to conduct the annual financial audit required in s. 218.39; however, the audit committee may serve other audit oversight purposes as • determined by the entity's governing body. The public shall not be excluded from the proceedings under this section. • (3) The audit committee shall: (a) Establish factors to use,for the evaluation of audit services to be provided by a certified public accounting firm duly licensed under chapter 473 and qualified to conduct audits in accordance with government auditing standards as adopted by the Florida Board of Accountancy. Such factors shall include, but are not limited to, ability of personnel; experience, ability to furnish the required services, and such other factors as may be determined by the committee to be applicable to its particular requirements. (b) Publicly announce requests for proposals. Public announcements must include, at a minimum, a brief . • description of the audit and indicate how interested firms can apply for consideration. (c) Provide interested firms with a request for proposal. The request for proposal shall include information on how proposals are to be evaluated and such other information the committee determines is necessary for the firm to prepare a proposal. (d) Evaluate proposals provided by qualified firms. If compensation is one of the factors established pursuant to paragraph (a), it shall not be the sole or predominant factor used to evaluate proposals. (e) Rank and recommend in order of preference no fewer than three firms deemed to be the most highly qualified to perform the required services after considering the factors established pursuant to paragraph (a). If fewer than three firms respond to the request for proposal, the committee shall recommend such firms as it deems to be the most highly qualified. (4) The governing body shall inquire of qualified firms as to the basis of compensation,select one of the firms recommended by the audit committee, and negotiate a contract, using one of the following methods: (a) If compensation is not one of the factors established pursuant to paragraph (3)(a) and not used to evaluate firms pursuant to paragraph (3)(e), the governing body shall negotiate a contract with the firm ranked first. If the governing body is unable to negotiate a satisfactory contract with that firm, negotiations with that firm shall be formally terminated, and the governing body shall then undertake negotiations with the second-ranked firm. Failing accord with the second-ranked firm, negotiations shall then be terminated with that firm and undertaken with the third-ranked firm. Negotiations with the other ranked firms shall be undertaken in the same manner. The governing body, in negotiating with firms, may reopen formal negotiations with any one of the three top ranked firms, but it may not negotiate with more than one firm at a time. ! (b) If compensation is one of the factors established pursuant to paragraph (3)(a) and used in the evaluation 13 RFP 2014-276-LR Auditing Services MIAMI BEACH of proposals pursuant to paragraph (3)(d), the governing body shall select the highest ranked qualified firm or must document in its public records the reason for not selecting the highest-ranked qualified firm. (c) The governing body may select a firm recommended by the audit committee and negotiate a contract with one of the recommended firms using an appropriate alternative negotiation method for which compensation is not the sole or predominant factor used to select the firm. (d) In negotiations with firms under this section, the governing body may allow a designee to conduct negotiations on its behalf, (5) The method used by the governing body to select a firm recommended by the audit committee and negotiate a contract with such firm must ensure that the agreed-upon compensation is reasonable to satisfy the requirements of s. 218.39 and the needs of the governing body. (6) If the governing body is unable to negotiate a satisfactory contract with any of the recommended firms, the committee shall recommend additional firms, and negotiations shall continue in accordance with this section until an agreement is reached. (7) Every procurement of audit services shall be evidenced by a written contract embodying all provisions and conditions of the procurement of such services. For purposes of this section, an engagement letter signed and executed by both parties shall constitute a written contract. The written contract shall, at a minimum, include the following: (a)A provision specifying the services to be provided and fees or other compensation for such services. (b) A provision requiring that invoices for fees or other compensation be submitted in sufficient detail to .demonstrate compliance with the terms of the contract, (c) A provision specifying the contract period, including renewals, and conditions under which the contract may be terminated or renewed. (8) Written contracts entered into pursuant to subsection (7) may be renewed. Such renewals maybe done without the use of the auditor selection procedures provided in this section. Renewal of a contract shall be in writing. 2. Step 1 Evaluation. The first step will consist of the qualitative criteria listed below to be considered by the Audit Committee, The second step will consist of quantitative criteria established below to be added to the Audit Committee results by the Department of Procurement Management. An Audit Committee, per Florida Statute 218.391, shall meet to evaluate each Proposal in accordance with the qualifications criteria established below for Step 1, Qualitative Criteria, In doing so, the Evaluation Committee may: • review and score all proposals received, with or without conducting interview sessions; or • review all proposals received and short-list one or more Proposers to be further considered during subsequent interview session(s) (using the same criteria). Step 1 -Qualitative Criteria Maximum:Points Proposer Experience and Qualifications,(including Financial Capability 30 Scope of Services Proposed 10 Approach and Methodology 30 TOTAL AVAILABLE STEP 1,POINTS 70 RFP 2014-276-LR 14 4 76 LR AuditingServices MIAMI BEACH 3. Step 2 Evaluation.`Following the results of Step 1 Evaluation of qualitative criteria, the Proposers may receive additional quantitative criteria points to be added by the Department of Procurement Management to those points earned in Step 1, as follows, Step 2-Quantitative Criteria Cost Proposal 30 Veterans Preference 5 TOTAL AVAILABLE STEP 2 POINTS 4. Cost Proposal Evaluation. The cost proposal points shall be developed in accordance with the following formula: Sample Objective Formula for Cost Vendor Vendor Example Maximum Formula for Calculating Points Total Cost Allowable Points (lowest cost 1 cost of proposal Points Proposal (Points noted are for being evaluated X maximum Awarded illustrative purposes only. allowable points=awarded Actual points are noted above.) points) Round to A $100.00 30 $100!$100X30=30 X30 30 VendorVendor B $150.00 30 $1001$150 X 30=20 20 Vendor C $200.00 30 $1001$200 X30=15 15 5. Determination of Final Ranking. At the conclusion of the Audit Committee Step 1 scoring, Step 2 Points will be added to each evaluation committee member's scores by the Department of Procurement Management. Step 1 and 2'scores will be converted to rankings in accordance with the example below: ProposerA ProposerB ProposerC Step 1 Points 82 76 80 Step 2 Points 22 15 12 Committee Total 104 91 92 Member 1 Rank 1 3 2 Step 1 Points 79 85 72 Step 2 Points 22 15 12 Committee Total 101 100 84 Member 2 Rank 1 2 3 Step 1 Points 80 74 66 Step 2 Points 22 15 12 Committee Total l 102 89 78 Member 2 Rank 1 2 3 Low Aggregate Score 3 7 8 Final Ranking 1 *Final Ranking is presented to the City Manager for further due diligence and recommendation to the City Commission. Final Ranking does not constitute an award recommendation until such time as the City Manager has made his recommendation to the City Commission,which may be different than final ranking results. 15 RFP 2014-276-LR Auditing Services MIAMI BEACH 7. Award of Contract. It is anticipated that the Audit Committee (in accordance with Florida Statute 218,391) will review these proposals and recommend a qualified accounting firm to the City Manager who will make a recommendation to the City Commission, The City Commission will select the accounting firm to undertake the engagement and authorize the City Manager or his designee, to negotiate with the selected firm or firms for the engagement. Balance of Page Intentionally Left Blank 16 RFP 2014-276-LR Auditing Services APPENDIX A MIAMI BE, Proposal Certification , Questionnaire & Requirements Affidavit RFP 2014-276-LR FOR AUDITING SERVICES TO EXAMINE THE CITY'S BASIC FINANCIAL STATEMENTS INCLUDED IN THE CITY'S COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR), FEDERAL GRANT PROGRAMS AND STATE PROJECTS (OMB A-133 SINGLE AUDIT), AND THE FINANCIAL STATEMENTS OF THE MIAMI BEACH REDEVELOPMENT AGENCY (RDA), THE PARKING SYSTEMS FUND (PSF), THE MIAMI BEACH VISITOR AND • CONVENTION AUTHORITY (VCA), THE MIAMI' BEACH CONVENTION CENTER, THE BUILDING BETTER COMMUNITIES BOND PROGRAM (BBC), THE CHILDREN'S TRUST GRANT PROGRAM (CT), AND THE SAFE NEIGHBORHOOD PARKS AND BOND PROGRAM (SNP). PROCUREMENT DEPARTMENT 1700 Convention Center Drive Miami Beach, Florida 33139 RFP 2014-276-LR Au.Ring Services 17 Solicitation No: Solicitation Title: 2014-176-LR AUDITING SERVICES Procurement Contact: Tel: Email: Lourdes Rodriguez 305-673-7000,x 6652 LourdesRodriguez@miamibeachfl,gov PROPOSAL CERTIFICATION, QUESTIONNAIRE&REQUIREMENTS AFFIDAVIT Purpose: The purpose of this Proposal Certification, Questionnaire and Requirements Affidavit Form is to inform prospective Proposers of certain solicitation and contractual requirements, and to collect necessary information from Proposers in order that certain portions of responsiveness, responsibility and other determining factors'and compliance with requirements may be evaluated, This Proposal Certification, Questionnaire and Requirements Affidavit Form is a REQUIRED FORM that must be submitted fully completed and executed. - 1. General Proposer Information. FIRM NAME: No of Years In Business: No of Years In Business Locally: No.of Employees OTHER NAME(S)PROPOSER HAS OPERATED UNDER IN THE LAST 10 YEARS: FIRM PRIMARY ADDRESS(HEADQUARTERS): CITY: • • STATE: ZIP CODE: TELEPHONE NO.: TOLL FREE NO.: FAX NO.: FIRM LOCAL ADDRESS: CITY: • STATE: ZIP CODE: PRIMARY ACCOUNT REPRESENTATIVE FOR THIS ENGAGEMENT: ACCOUNT REP TELEPHONE NO.: ACCOUNT REP TOLL FREE NO.: ACCOUNT REP EMAIL: FEDERAL TAX IDENTIFICATION NO.: The City reserves the right to seek additional information from Proposer or other source(s), including but not limited to: any firm or principal information, applicable licensure, resumes of relevant individuals,client information, financial information,or any information the City deems necessary to evaluate the capacity of the Proposer to perform in accordance with contract requirements. RFP 2014-276-LR Auditing Services 18 J 1, Veteran Owned Business.Is Proposer claiming a veteran owned business status? YES NO SUBMITTAL REQUIREMENT:Proposers claiming veteran owned business status shall submit a documentation proving that firm is certified as a veteran-owned business or a service-disabled veteran owned business by the State of Florida or United States federal government,as required pursuant to ordinance 2011-3748,as amended, 2. -Conflict Of Interest.All Proposers must disclose,in their Proposal,the name(s)of any officer, director, agent,or immediate family member (spouse, parent, sibling, and child) who is also an employee of the City of Miami Beach. Further, all Proposers must disclose the name of any City employee who owns, either directly or indirectly, an interest of ten (10%) percent or more in the Proposer entity or any of Its affiliates. SUBMITTAL REQUIREMENT: Proposers must disclose the name(s) of any officer, director, agent, or immediate family member (spouse, parent, sibling, and child) who is also an employee of the City of Miami Beach. Proposers must also disclose the name of any City employee who owns,either directly or indirectly,an interest of ten(10%)percent or more in the Proposer entity or any of its affiliates 3. References&Past Performance.Proposer shall submit at least three(3)references for whom the Proposer has completed work similar in size and nature as the work referenced in solicitation. SUBMITTAL REQUIREMENT:For each reference submitted,the following information is required: 1)Firm Name,2)Contact Individual Name&Title,3)Address,4)Telephone,5)Contact's Email and 6)Narrative on Scope of Services Provided. 4. Suspension,Debarment or Contract Cancellation. Has Proposer ever been debarred,suspended or other legal violation, or had a contract cancelled due to non-performance b any public sector agency? YES I NO SUBMITTAL REQUIREMENT: If answer to above is"YES,"Proposer shall submit a statement detailing the reasons that led to action(s). 5. Litigation History. Proposer shall submit a statement of any litigation or regulatory action that has been filed against your firm(s)in the last five years. If an action has been filed,state and describe the litigation or regulatory action filed,and identify the court or agency before which the action was instituted, the applicable case or file number, and the status or disposition • for such reported action. If no litigation or regulatory action has been filed against your firm(s), provide a statement to that effect. If "No" litigation or regulatory action has been filed against your firm(s), please provide a statement to that effect. Truthful and complete answers to this question may not necessarily disqualify a firm from consideration but will be a factor in the selection process.Untruthful,misleading or false answers to this question shall result in the disqualification of the firm for this project. SUBMITTAL REQUIREMENT: Proposer shall submit history of litigation or regulatory action filed against proposer, or any proposer team member firm,in the past 5 years. If Proposer has no litigation history or regulatory action in the past 5 years, submit a statement accordingly. 6. Vendor Campaign Contributions. Proposers are expected to be or become familiar with, the City's Campaign Finance Reform laws, as codified in Sections 2-487 through 2-490 of the City Code. Proposers shall be solely responsible for ensuring that all applicable provisions of the City's Campaign Finance Reform laws are complied with,and shall be subject to any and all sanctions, as prescribed therein, including disqualification of their Proposals, in the event of such non- compliance. SUBMITTAL REQUIREMENT: Submit the names of all individuals or entities (including your sub-consultants) with a controlling financial interest as defined in solicitation. For each individual or entity with a controlling financial interest indicate whether or not each individual or entity has contributed to the campaign either directly or indirectly, of a candidate who has been elected to the office of Mayor or City Commissioner for the City of Miami Beach. 7. Code of Business Ethics.Pursuant to City Resolution No.2000-23879,each person or entity that seeks to do business with RFP 2014-276-LR Auditing Services 19 the City shall adopt a Code of Business Ethics ("Code") and submit that Code to the Department of Procurement Management with its proposal/response or within five (5) days upon receipt of request. The Code shall, at a minimum, require the Proposer,to comply with all applicable governmental rules and regulations including,among others,the conflict of interest,lobbying and ethics provision of the City of Miami Beach and Miami Dade County. SUBMITTAL REQUIREMENT: Proposer shall submit firm's Code of Business Ethics. In lieu of submitting Code of Business Ethics, Proposer may submit a statement indicating that it will adopt, as required In the ordinance,the City of Miami Beach Code of Ethics,available at www.miamibeachfl.gov/procurement/. 8. Living Wage. Pursuant to Section 2-408 of the Miami Beach City Code, as same may be amended from time to time, Proposers shall be required to pay all employees who provide services pursuant to this Agreement, the hourly living wage rates listed below: • Commencing with City fiscal year 2014-15 (October 1, 2014), the hourly living rate will be $11.62/hour_ with health benefits,and$13.31/hour without benefits. The living wage rate and health care benefits rate may, by Resolution of the City Commission be indexed annually for inflation using the Consumer Price Index for all Urban Consumers (CPI-U) Miami/Ft. Lauderdale, issued by the U.S. Department of Labor's Bureau of Labor Statistics. Notwithstanding the preceding, no annual index shall exceed three percent(3%).The City may also,by resolution,elect not to index the living wage rate in any particular year,if it determines it would not be fiscally sound to implement same(in a particular year). Proposers'failure to comply with this provision shall be deemed a material breach under this proposal, under which the City may, at its sole option, immediately deem said Proposer as non-responsive, and may further subject Proposer to additional penalties and fines,as provided in the City's Living Wage Ordinance, as amended. Further information on the Living Wage requirement is available at www•miamibeachfl.gov/procurementl• SUBMITTAL REQUIREMENT: No additional submittal is required. By virtue of executing this affidavit document, Proposer agrees to the living wage requirement. 9. Equal Benefits for Employees with Spouses and Employees with Domestic Partners. When awarding competitively solicited contracts valued at over $100,000 whose contractors maintain 51 or more full time employees on their payrolls during 20 or more calendar work weeks, the Equal Benefits for Domestic Partners Ordinance 2005-3494 requires certain contractors doing business with the City of Miami Beach,who are awarded a contract pursuant to competitive proposals,to provide "Equal Benefits" to their employees with domestic partners, as they provide to employees with spouses. The Ordinance applies to all employees of a Contractor who work within the City limits of the City of Miami Beach, Florida; and the Contractor's employees located in the United States, but outside of the City of Miami Beach limits, who are directly performing work on the contract within the City of Miami Beach. A. Does your company provide or offer access to any benefits to employees with spouses or to spouses of employees? YES NO B. Does your company provide or offer access to any benefits to employees with (same or opposite sex) domestic • partners*or to domestic partners of employees? YES NO C. Please check all benefits that apply to your answers above and list in the "other"section any additional benefits not already specified. Note: some benefits are provided to employees because they have a spouse or domestic partner, such as bereavement leave; other benefits are provided directly to the spouse or domestic partner, such as medical insurance. BENEFIT , Firm Provides for Firm Provides for Firm does not Employees with Employees with Provide Benefit Spouses Domestic Partners Health Sick Leave Family Medical Leave Bereavement Leave If Proposer cannot offer a benefit to domestic partners because of reasons outside your control, (e.g.,there are no insurance RFP 2014-276-LR Auditing Services 20 • providers in your area willing to offer domestic partner coverage)you may be eligible for Reasonable Measures compliance. To comply on this basis, you must agree to pay a cash equivalent and submit a completed Reasonable Measures Application (attached) with all necessary documentation. Your Reasonable Measures Application will be reviewed for consideration by the City Manager, or his designee. Approval is not guaranteed and the City Manager's decision is final. Further information on the Equal Benefits requirement is available at www.miamibeachfl.gov/procurementl. 10. Public Entity Crimes.Section 287.133(2)(a),Florida Statutes,as currently enacted or as amended from time to time,states that a person or affiliate who has been placed on the convicted vendor list following a conviction for a public entity crime may not submit a proposal, proposal,or reply on a contract to provide any goods or services to a public entity;may not submit a proposal,proposal,or reply on a contract with a public entity for the construction or repair of a public building or public work; may not submit proposals,proposals,or replies on leases of real property to a public entity;may not be awarded or perform work as a contractor, supplier, subcontractor, or consultant under a contract with any public entity; and may not transact business with any public entity in excess of the threshold amount provided in s.287.017 for CATEGORY TWO for a period of 36 months following the date of being placed on the convicted vendor list. • SUBMITTAL REQUIREMENT: No additional submittal is required. By virtue of executing this affidavit document, Proposer agrees with the requirements of Section 287,133, Florida Statutes, and certifies it has not been placed on convicted vendor list. 11. Acknowledgement of Addendum. After issuance of solicitation, the City may release one or more addendum to the solicitation which may provide additional information to Proposers or alter solicitation requirements. The City will strive to reach every Proposer having received solicitation through the City's e-procurement system, PublicPurchase.com. However, Proposers are solely responsible for assuring they have received any and all addendum issued pursuant to solicitation.This Acknowledgement of Addendum section certifies that the Proposer has received all addendum released by the City pursuant to this solicitation.Failure to obtain and acknowledge receipt of all addendum may result in proposal disqualification. Initial to Confirm Initial to Confirm Initial to Confirm Receipt Receipt Receipt Addendum 1 Addendum 6 • Addendum 11 Addendum 2 Addendum 7 Addendum 12 Addendum 3 Addendum 8 Addendum 13 Addendum 4 Addendum 9 Addendum 14 Addendum 5 Addendum 10 Addendum 15 If additional confirmation of addendum is required,submit under separate cover. ,• i - •I RFP 2014-276-LR Auditing Services 21 " DISCLOSURE AND DISCLAIMER SECTION , The solicitation referenced herein is being furnished to the recipient by the City of Miami Beach (the "City") for the recipient's convenience.Any action taken by the City in response to Proposals made pursuant to this solicitation,or in making any award, or in failing or refusing to make any award pursuant to such Proposals, or in cancelling awards, or in withdrawing or cancelling this solicitation,either before or after Issuance of an award,shall be without any liability or obligation on the part of the City. In its sole discretion, the City may withdraw the solicitation either before or after receiving proposals, may accept or reject proposals, and may accept proposals which deviate from the solicitation, as it deems appropriate and in its best interest. In its sole discretion,the City may determine the qualifications and acceptability of any party or parties submitting Proposals in response to this solicitation. Following submission of a Bid or Proposal, the applicant agrees to deliver such further details, information and assurances, including financial and disclosure data, relating to the Proposal and the applicant including, without limitation, the applicant's affiliates, officers, directors,shareholders,partners and employees,as requested by the City in ifs discretion. The information contained herein is provided solely for the convenience of prospective Proposers. It is the responsibility of the recipient to assure itself that information contained herein is accurate and complete. The City does not provide any assurances as to the accuracy of any information in this solicitation. My reliance on these contents, or on any permitted communications with City officials, shall be at the recipient's own risk. Proposers should rely exclusively on their own investigations, interpretations,and analyses.The solicitation is being provided by the City without any warranty or representation,express or implied,as to its content,its accuracy,or its completeness.No warranty or representation is made by the City or its agents that any Proposal conforming to these requirements will be selected for consideration, negotiation,or approval. The City shall have no obligation or liability with respect to this solicitation,the selection and the award process, or whether any award will be made. Any recipient of this solicitation who responds hereto fully acknowledges all the provisions of this Disclosure and Disclaimer, is totally relying on this Disclosure and Disclaimer, and agrees to be bound by the terms hereof.Any Proposals submitted to the City pursuant to this solicitation are submitted at the sole risk and responsibility of the party submitting such Proposal. This solicitation is made subject to correction of errors, omissions, or withdrawal from the market without notice. Information is for guidance only,and does not constitute all or any part of an agreement. The City and all Proposers will be bound only as,if and when a Proposal(or Proposals),as same may be modified,and the applicable definitive agreements pertaining thereto, are approved and executed by the parties, and then only pursuant to the terms of the definitive agreements executed among the parties. Any response to this solicitation may be accepted or rejected by the City for any reason,or for no reason,without any resultant liability to the City. The City Is governed by the Government-in-the-Sunshine Law, and all Proposals and supporting documents shall be subject to diolosure as required by such law.All Proposals shall be submitted in sealed proposal form and shall remain confidential to the extent permitted by Florida Statutes, until the date and time selected for opening the responses.At that time, all documents received by the City shall become public records. Proposers are expected to make all disclosures and declarations as requested in this solicitation, By submission of a Proposal, the Proposer acknowledges and agrees that the City has the right to make any inquiry or investigation it deems appropriate to substantiate or supplement information contained in the Proposal, and authorizes the release to the City of any and all information sought in such inquiry or investigation. Each Proposer certifies that the information contained in the Proposal is true, accurate and complete, to the best of its knowledge,information,and belief. Notwithstanding the foregoing or anything contained in the solicitation, all Proposers agree that in the event of a final unappealable judgment by a court of competent jurisdiction which imposes on the City any liability arising out of this solicitation, or any response thereto, or any action or inaction by the City with respect thereto, such liability shall be limited to $10,000.00 as agreed-upon and liquidated damages. The previous sentence, however, shall not be construed to circumvent any of the other provisions of this Disclosure and Disclaimer which imposes no liability on the City. In the event of any differences in language between this Disclosure and Disclaimer and the balance of the solicitation, it is understood that the provisions of this Disclosure and Disclaimer shall always govern.The solicitation and any disputes arising from the solicitation shall be governed by and construed in accordance with the laws of the State of Florida, RFP 2014-276-LR Auditing Services 22 PROPOSER CERTIFICATION I hereby certify that: I, as an authorized agent of the Proposer, am submitting the following information as my firm's , proposal; Proposer agrees to complete and unconditional acceptance of the terms and-conditions of this document, inclusive of this solicitation, all attachments,exhibits and appendices and the contents of any Addenda released hereto, and the Disclosure and Disclaimer Statement; Proposer agrees to be bound to any and all specifications, terms and conditions contained in the solicitation, and any released Addenda and understand that the following are requirements oaf this solicitation and failure to comply will result in disqualification of proposal submitted; Proposer has not divulged, discussed, or compared the proposal with other Proposers and has not colluded with any other Proposer or party to any other proposal; Proposer acknowledges that ail information contained herein is part of the public domain as defined by the State of Florida'Sunshine and Public Records Laws; all responses, data and information contained in this proposal, inclusive of the Pro.osal Certification, Questionnaire and Requirements Affidavit are true and accurate. Name of Proposer's Authorized Representative: Title of Proposer's Authorized Representative: Signature of Proposers Authorized Representative: Date: State of ) On this_day of ,20_,personally appeared before me who' County of ) stated that (s)he is the of , a corporation, and that the instrument was signed in behalf of the said corporation by authority of its board of directors and acknowledged said instrument to be its voluntary act and deed. Before me: Notary Public for the State of Florida My Commission Expires: . • • RFP 2014-276-LR Auditing Services 23 APPENDIXB I B A c H E ' it.irA M I AM • • " No Proposal " Form RfP 2014-276-LR `^ FOR AUDITING SERVICES TO EXAMINE THE CITY'S BASIC FINANCIAL STATEMENTS INCLUDED IN THE CITY'S COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR), FEDERAL GRANT PROGRAMS AND STATE PROJECTS (OMB A-133 SINGLE AUDIT), AND THE FINANCIAL STATEMENTS OF THE MIAMI BEACH REDEVELOPMENT AGENCY (RDA), THE PARKING SYSTEMS FUND (PSF), THE MIAMI BEACH VISITOR AND CONVENTION AUTHORITY .(VCA), THE MIAMI BEACH CONVENTION CENTER, , THE: BUILDING BETTER.. COMMUNITIES BOND PROGRAM (BBC), THE CHILDREN'S TRUST GRANT PROGRAM (CT), AND THE SAFE NEIGHBORHOOD PARKS AND BOND PROGRAM (SNP). PROCUREMENT DEPARTMENT 1700 Convention Center Drive Miami Beach, Florida 33139 � i f -----gr,,- �i �r � rz r ''-�c tia 2 � sF ...' q' 4r� r .tix;�, r 7� r �c Y r e�°ff i�r ip t of r� h s er to h v� c, the fi rt oliftc�at►Q�t ®F} hi i l i`rot but k avel`deci e nof.to e- 141. tO'com e`e"c rid su. mit, .� k ti3ro�., f,i, , v f t q.?I gs r )`5 > zY un a It T'l cF �u a �; ! P':' .�` .9 r�,3 4,h �p fachea r.�Sfct f me , of Nb Bich =rT€ e Stat On �5o1 o° Bic!,°procrides a F �F +.�,:0 ",1- r '1 .Fro+,-i ,th d'' d !, YVg `" ri mxs oto "� -,,,, � xSry ) 1 ¢i- - ::8, 4 the Cif{ , 'vlf ►rtforrngf ion voh how t.to improve tbe' so1!oitafiton process `$ �w. �a Jr 4t NrJrJ s a dr ;rl� s ��1 a , E i1cr`re•,tco,subrtrnt a�"Sl` .fe erf'of N icd' rna res tlf=rr rot be h rfied t,fi,p a �-L AFFi +� i zA'Jx..c'' a a ,'%'.0,:;:.,1', 4,1,41i,;", .;`,,, m -,4 ."s 0114.1 tt5,-„,,y 'r z,1 t^-v n� {a.h`S ‘;',0: P C k r t e F �. e' sc u< Tr'� } , it 1r" ?' 'r' I.-',.- • F �IF rr fr� V_. i 1! X+I F k �:H,p 4a�..�.'�.n �;�f ...�_�k "'.+w"i tw_-�a�._y�._��..�... . I.,.._'t.''. Y_�.i' • RFP 2014 276 LR Auting Services 24 di Btaternent of No Bid WE HAVE ELECTED NOT TO SUBMIT A PROPOSAL AT THIS TIME FOR REASON(S) CHECKED AND/OR INDICATED BELOW: _Workload does not allow us to proposal Insufficient time to respond' Specifications unclear or too restrictive _ Unable to meet specifications __Unable to meet service requirements Unable to meet insurance requirements _Do not offer this product/service _OTHER. (Please specify) • We do_do not want to be retained on your mailing list for future proposals of this type product and/or service. Signature: Title: Legal Company Name: u 1 Note: Failure to respond, either by submitting a proposal or this completed form, may result in your company being removed from our vendors list. PLEASE RETURN TO: CITY OF MIAMI BEACH DEPT. OF PROCUREMENT MANAGEMENT ATTN: Lourdes Rodriguez PROPOSAL#2014-276-LR 1700 Convention Center Drive MIAMI BEACH, FL 33139 _ a I � RFP 2014-276-LR Auditing Services 25 APPENDIX C CI MIME Minimum Requirements Specifications • RFP 2014-276-LR FOR. AUDITING SERVICES TO EXAMINE THE CITY'S BASIC FINANCIAL STATEMENTS INCLUDED IN THE CITY'S_ COMPREHENSIVE ANNUAL *FINANCIAL REPORT (CAFR), FEDERAL GRANT PROGRAMS AND STATE " PROJECTS (OMB A-133 SINGLE AUDIT)," AND THE FINANCIAL STATEMENTS OF THE MIAMI BEACH REDEVELOPMENT AGENCY (RDA), THE PARKING SYSTEMS FUND (PSF), THE MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (VCA), THE MIAMI BEACH CONVENTION CENTER, THE BUILDING BETTER COMMUNITIES BOND PROGRAM (BBC), THE CHILDREN'S TRUST GRANT PROGRAM (CT), AND THE SAFE NEIGHBORHOOD PARKS AND BOND PROGRAM (SNP). - PROCUREMENT DEPARTMENT • 1 70 0 Convention Center Drive Miami Beach, Florida 33139 RFP 2014-276-LR Auditing Services 26 Cl. Minimum Requirements. The Minimum Eligibility Requirements for this solicitation are listed below. Proposer shall submit detailed verifiable information affirmatively documenting compliance with each minimum requirement. Proposers that fail to comply with minimum requirements will be deemed non-responsive and will no"t be considered. a. The proposing firm and the proposed engagement partner has performed continuous certified public accounting (CPA) services for government agencies for a minimum of ten (10) years. Theten (10) years may be a combination of years of service provided to different agencies. For each experience proposer must submit as evidence: agency name, agency contact, contact telephone, email and years(s) of experience for verification purposes. b. The proposed engagement partner must have experience auditing similar government agencies, specifically as to size, services provided and the required reporting. For each experience proposer must submit as evidence: agency name, agency contact, contact telephone, email and years(s)of experience for verification purposes. c. The proposed manager must have experience auditing similar government agencies, specifically as to size, services provided and the required reporting. For each experience proposer must submit as evidence: agency name, agency contact, contact telephone,email and years(s)of experience for verification purposes. d. The proposed senior auditor must have experience auditing similar government agencies, specifically as to size, services provided and the required reporting. For each experience proposer must submit as evidence: agency name, agency contact, contact telephone, email and years(s) of experience for verification purposes. C2. Statement of Work Required. The City of Miami Beach (the City) is required to have an annual audit in accordance with Florida Statutes 218.39 performed on the City's Comprehensive Annual Financial Report (CAFR). Other audits are required to be performed in accordance with the U.S. Office of Management and Budget (OMB) Circulars, Bonded Debt Covenants, Performance Management and/or Grant Agreements. Each audit herein must be conducted by an independent audit firm. Pursuant to the above requirements, the City is required to procure auditing services to examine the City's Basic Financial Statements included in the City's Comprehensive Annual Financial Report (CAFR), Federal grant programs and State projects (OMB A-133 Single Audit), and/or the financial statements of the Miami Beach Redevelopment Agency's (RDA), the Parking-Systems Fund's (PSF), the Miami Beach Visitor and Convention Authority's (VCA), the Miami Beach Convention Center (MBCC), as managed by Global Spectrum (GS), the Safe Neighborhood Parks and Bond Program (SNP), Children's Trust(CT) and Building getter Communities(BBC). C3. Specifications/Scope of Work. There are ten (10) services which are required as part of this request. All services must be included in the proposal in order for it to be considered. The scope of services are as follows: 1. CAFR—The auditor will prepare and issue an auditor's opinion and conduct an audit of the City's CAFR in accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The examination must be made in accordance with the guidelines prepared by the Governmental Finance Officers Association (GFOA) in order for the City to apply for the Certificate of Achievement for Excellence in Financial Reporting. On an annual basis, the City will prepare the CAFR for auditing. The auditors will provide guidance with the implementation of Governmental Accounting Standard Board (GASB) statements as necessary. The audit firm shall issue an audit opinion to the City no later than 180 days following the fiscal year end. RFP 2014-276-LR Auditing Services 27 2. OMB A-133 Single Audits - The auditor must perform an audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. The auditor must issue an Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance, Independent Auditors' Report on Compliance and Internal Control over Compliance Applicable to Each Major Federal Program and State Project, and Schedule of Findings and Questioned Costs. The City will prepare the Schedule of Expenditure of Federal Awards and State Financial Assistance, The audit firm shall issue the single audit report and data collections form to the City no later than 180 days following the fiscal year end. 3. Management Letter in Accordance with the Rules of the Auditor General of the State of Florida -The auditor firm shall issue a management letter to the City no later than 180 days following the fiscal year end, • 4. RDA—The City issues stand-alone basic financial statements for the RDA, a blended component unit of the City. The auditor will prepare and issue an auditor's opinion and conduct an audit of the RDA basic financial statements in accordance with Generally Accepted Auditing Standards(GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The financial statements, footnotes and schedules are to be prepared by the auditor. The audit firm shall issue the RDA basic financial statements to the City no later than 180 days following the fiscal year end. 5. PSF-The City issues stand-alone financial statements for the PSF, a major enterprise fund of the City. The auditor will prepare and issue an auditor's opinion and conduct an audit of the PSF financial statements in • accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, The financial statements, footnotes and schedules are to be pr pared.by the auditor, The audit firm shall issue the PSF basic financial statements to the City no later than 150 days following the fiscal year end. 6. VCA - The City issues stand-alone basic financial statements for the VCA, a discretely presented component unit of the City. The auditor will prepare and issue an auditor's opinion and conduct an audit of the VCA financial statements in accordance with-Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. a The financial statements, footnotes and schedules are to be prepared by the auditor. The audit firm shall issue the VCA basic financial statements to the City no later than 90 days following the fiscal year end. 7. GS - The City issues special purpose financial statements for assets, liabilities, revenues, and expenses of the Miami Beach Convention Center as managed by GS. The auditor will prepare and issue an auditor's opinion and conduct an audit of the GS assets, liabilities, revenues and expenses in accordance with Generally Accepted Auditing Standards (GAAS)and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, RFP 2014-276-LR Auditing Services 28 The financial statements, footnotes and schedules are to be prepared by the auditor, The audit firm shall issue the GS special purpose financial statements to the City no later than 90 days following the fiscal year end. 8. SNP - The SNP governing Miami-Dade County ordinance No. 96-115 requires that an annual independent audit of all bond funds be conducted. The auditor will conduct an audit in compliance with the grant agreement, SNP ordinance No. 96-115, applicable resolution and the SNP Administrative Rules. The audit report, notes and schedules are to be prepared by the auditor. The audit firm shall issue the SNP report to the City no later than 90 days following the fiscal year end. 9. CT - The City receives funds from the Children's Trust Fund Program and the Children's Trust requires an audit in accordance with the Children's Trust Contractual Agreements,AU-C 935 and Statement on Auditing Standards No. 117. The audit report, notes and schedules are to be prepared by the auditor. The audit firm shall issue the CT report to the City no later than 90 days following the fiscal year end. 10, BBC - The City receives funds from Miami-Dade County for the Building Better Communities Bond Project and the Building Better Communities Bond Project requires an audit in accordance with Miami-Dade County Ordinance 05-47, applicable resolutions, and Building Better Communities Administration Rule, The audit report, notes and schedules are to be prepared by the auditor. The audit firm shall issue the BBC report to the City no later than 90 days following the fiscal year end, Other: In the event that, during,the Term of the Agreement,the City, in its sole discretion and judgment, determines that there is a need for additional services not contemplated within the Agreement, such services will be performed at the hourly billing rates set forth in the agreement. RFP 2014-276-LR Auditing Services 29 APPENDIX D t_14_, MIAMI BEACH Special Conditions RFP 2014-276-LR FOR AUDITING SERVICES TO EXAMINE THE CITY'S BASIC FINANCIAL STATEMENTS INCLUDED IN THE CITY'S COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR),•FEDERAL GRANT PROGRAMS AND STATE PROJECTS (OMB A-133 SINGLE AUDIT), AND THE FINANCIAL STATEMENTS OF THE MIAMI BEACH REDEVELOPMENT AGENCY (RDA), THE PARKING SYSTEMS FUND (PSF), THE MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (VCA), THE MIAMI BEACH CONVENTION CENTER, THE BUILDING BETTER COMMUNITIES BOND PROGRAM (BBC), THE CHILDREN'S TRUST GRANT PROGRAM (CT), AND THE SAFE NEIGHBORHOOD PARKS AND BOND PROGRAM (SNP). PROCUREMENT DEPARTMENT 1700 Convention Center Drive Miami Beach, Florida 33139 RFP 2014-276-LR Auditing Services 30 1. TERM OF CONTRACT. The contract shall commence upon the date of notice of award and shall be effective for a period of five (5)years. 2. OPTIONS TO RENEW. The City, through its City Manager, will have the option to extend for one (1) additional five (5) years period. 3. PRICES SHALL BE FIXED AND FIRM: All prices quoted in the awardee's bid submittal shall remain firm and fixed, unless amended in writing by the City. 1.10.1 COST ESCALATION. Prices must be held firm during the initial term of the agreement. During the renewal term, the City may consider prices increases not to increase the applicable Bureau of Labor Statistics (www,bis.gov) CPI-U index or 3%, • whichever is less. The City may also consider increases based on mandated Living Wage • increases. In considering cost escalation due to Living Wage increases, the City will only consider the direct costs related to Living Wage increases, exclusive of overhead, profit or any other related cost, • 4. REQUIRED CERTIFICATIONS. a) The audit firm(s) shall be licensed to practice in the State of Florida upon award of contract. 5. TRAINING. The City desires to maintain and improve the level of training of its personnel assigned to the internal audit function and in accounting positions. The proposal should indicate if the firm conducts any training for its employees and if City personnel could attend such training, RFP 2014-276-LR Auditing Services _ 31 - APPENDIX E MIAMI BEACH Cost Proposal Form RFP 2014-276-LR FOR AUDITING SERVICES TO EXAMINE THE CITY'S BASIC FINANCIAL STATEMENTS INCLUDED 'IN THE CITY'S COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR), FEDERAL GRANT PROGRAMS AND STATE PROJECTS (OMB A-133 SINGLE AUDIT), AND THE FINANCIAL STATEMENTS OF THE MIAMI BEACH REDEVELOPMENT AGENCY (RDA), THE PARKING SYSTEMS FUND (PSF), THE MIAMI BEACH VISITOR AND CONVENTION AUTHORITY, (VCA), THE MIAMI BEACH CONVENTION CENTER, THE BUILDING BETTER COMMUNITIES BOND PROGRAM (BBC), THE CHILDREN'S TRUST GRANT PROGRAM (CT), AND THE SAFE NEIGHBORHOOD PARKS AND BOND PROGRAM (SNP). PROCUREMENT DEPARTMENT 1700 Convention Center Drive Miami Beach, Florida 33139 RFP 2014-276-LR Auditing Services 32 APPENDIX A PROPOSAL TENDER FORM Failure to submit Section 5,Proposal Tender Form,in its entirety and fully executed by the deadline established for the receipt of proposals will result in proposal being deemed non-responsive and being rejected. Proposer affirms that the prices stated on the proposal price form below represents the entire cost of the items in full accordance with the requirements of this RFP, inclusive of its terms,conditions,specifications and other requirements stated herein, and that no claim will be made on account of any increase in wage scales, material prices, delivery delays, taxes, insurance,cost indexes or any other unless a cost escalation provision is allowed herein and has been exercised by the City Manager in advance.The Cost Proposal Form (Section 5)shall be completed mechanically or, if manually, in ink. Proposal Tender Forms (Section 5) completed in pencil shall be deemed non-responsive. All corrections on the Proposal Tender Form (Section 5) shall be initialed. , GROUP I. Auditing'Services • Prices submitted in proposal package are to be held for the five (5)year contract period. Auditing Services Please provide fee on an annual basis for each services listed below: 2014 2015 2016 2017 2018 1 Audit of City's Basic Financial Statement(CAFR) 2 0MB A-133 Single Audits _ 3 Management Letter in Accordance with the Rules of the Auditor General of the State of Florida 4 Miami Beach Redevelopment Agency(RDA) 5 Miami Beach Parking Systems Funds(PSF) 6 Miami Beach Visitor and Convention Authority (VCA) Miami Beach Convention Center as Managed by 7 Global Spectrum (GS) ) 8 Safe Neighborhood Parks Single Audit(SNP) 9 Children's Trust (CT) 10 Building Better Communities(BBC) $ $ $ $ $ 1 RFP 2014-276-LR Auditing Services 33 GROUP II. Additional Services The City reserves the right to negotiate rates for additional services. Bidder's Affirmation Company: Authorized Representative: Address: Telephone: Email: Authorized Representative's Signature: c 1 1 RFP 2014-276-LR Auditing Services 34 APPENDIX F Insurance Requirements RFP 2014-276-LR FOR AUDITING SERVICES TO EXAMINE THE CITY'S BASIC FINANCIAL STATEMENTS INCLUDED IN THE CITY'S COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR), FEDERAL GRANT PROGRAMS AND STATE PROJECTS (OMB A-133 SINGLE AUDIT), AND THE FINANCIAL STATEMENTS OF THE MIAMI BEACH REDEVELOPMENT AGENCY (RDA), THE PARKING SYSTEMS FUND (PSF), THE MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (VCA), THE MIAMI. BEACH CONVENTION CENTER, THE BUILDING BETTER COMMUNITIES BOND PROGRAM (BBC), THE CHILDREN' TRUST GRANT PROGRAM (CT), AND THE SAFE NEIGHBORHOOD PARKS AND BOND PROGRAM (SNP). PROCUREMENT DEPARTMENT 1700 Convention Center Drive Miami Beach, Florida 33139 RFP 2014-276-LR Auditing Services 35 MIAMIBEACH PROFESSIONAL SERVICES INSURANCE REQUIREMENTS The provider shall furnish to the Human Resources Department, Risk Management Division, City of Miami Beach, 1700 Convention Center Drive, 3'd Floor, Miami Beach, Florida 33139, Certificate(s) of Insurance which indicate that insurance coverage has been obtained which meets the requirements as outlined below: A. Worker's Compensation and Employer's Liability Insurance for all employees of the provider as required by Florida Statute 440. • B. Commercial General Liability on a comprehensive basis in an amount not less than $1,000,000 combined single limit per occurrence and $2,000,000 in the aggregate, for bodily injury and property damage. City of Miami Beach must be shown as an additional insured with respect to this coverage. • C. Professional Liability Insurance in an amount not less than $5,000,000 with the deductible per claim, if any, not to exceed 10% of the limit of liability. - I The insurance coverage above must include a waiver of subrogation in favor of the City. The insurance coverage required ,shall include those classifications, as listed in standard liability insurance manuals, which most nearly reflect the operations of the provider. All insurance policies required above shall be issued by companies authorized to do business under the laws of the State of Florida, with the following qualifications: The company must be rated no less than "B" as to management, and no less than "Class V" as to financial strength, by the latest edition of Best's Insurance Guide, published by A.M. Best Company, Oldwick, New Jersey, or its equivalent, subject to the approval of the • City Risk Management Division. or The company must hold a valid Florida Certificate of Authority as shown in the latest "List of All Insurance Companies Authorized or Approved to Do Business in Florida" issued by the State of Florida Department of Insurance and are members of the Florida Guaranty Fund. Certificates will indicate no modification or change in insurance shall be made without thirty (30) days advance notice to the certificate holder. CERTIFICATE HOLDER MUST READ: CITY OF MIAMI BEACH 1700 CONVENTION CENTER DRIVE 3'd FLOOR MIAMI BEACH, FL 33139 Compliance with the foregoing requirements shall not relieve the vendor of his liability and obligation under this section or under any other section of this agreement. RFP 2014-276-LR Auditing Services 36 www.sunbiz.org- Department of State Page 1 of 2 FLORIDA-DEPARTMENT Oi STAVE d i k DIVISION OI CORPORATIONS ,51/400". "- Home Contact Us E-Filing Services Document Searches Forms Help Previous on List Next on List Return to List Partnership Name Search Filing History No Authority Info No Partner Info No Name History [ubmit Partnership Detail Limited Liability Partnership Name CROWE HORWATH LLP Principal Address 320 E JEFFERSON BLVD SOUTH BEND,IN 46601 Change Date: NONE Filing Information Document Number LLP080002619 FEI/EIN Number 350921680 File Date 04/08/2008 State IN Total Pages 7 Pages in Original Filing 1 Florida Partners NONE Total Partners 1 Status ACTIVE Effective Date NONE Expiration Date NONE Name History NONE Mailing Address CROWE HORWATH LLP ATTN:THOMAS NESIS ONE MID AMERICA PLAZA OAK BROOK, IL 60522 US Change Date: 01/15/2014 Registered Agent CT CORPORATION SYSTEM 1200 S PINE ISLAND RD PLANTATION, FL 33324 Document Images 04/08/2008—LLP View image In PDF format ---I, 01/15/2014—LLP Business Report View image in PDF format 03/08/2013--LLP Business Report[ View Image In PDF format 01/11/2012--LLP Business Report View image in PDF format http://www.sunbiz.org/scripts/gendet.exe?action=DETGENINAME&web_dir=%20&we... 10/30/2014 www.sunbiz.org -Department of State Page 2 of 2 01/26/2011 --LLP Business Report I View image in PDF format 01/25/2010--LLP Business Report L View image in PDF format 03/23/2009—LLP Business Report L. 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Proposal to '``rovc e ®► MIAMI BEACH �A u d ti n Services October 17, 2014 - RFP 2014-276-LR d i i Submitted to: 1 Ms. Lourdes Rodriguez, Senior Procurement Specialist City of Miami Beach, Florida • 1700 Convention Drive , Miami Beach, Florida 33139 l Submitted by: Mr. John C.Weber, Partner Crowe Horwath LLP 401 East Las Olas Boulevard,Suite 1100 Fort Lauderdale, Florida 33301-4230 • Direct 813.209.2585 , Tel 954.202.8600 Fax 954.202.8639 john.weber@crowehorwath.com • Audit I Tax I Advisory I Risk I Performance • • Crowe Horvath® Crowe Horwath LLP Independent Member Crowe Horwath International 401 East Las Olas Boulevard,Suite 1100 Fort Lauderdale,Florida 33301-4230 Tel 854.202.8600 Fax 954.202.8639 www.crowehorwath.com Cover Letter & Minimum Qualificatoons Requirements 1.1 Cover Letter and Table of Contents October 17,2014 Ms. Lourdes Rodriguez, Senior Procurement Specialist City of Miami Beach, Florida 1700 Convention Drive Miami Beach, Florida 33139 • Re: RFP 2014-276-LR I , Dear Ms. Rodriguez: Crowe Horwath LLP(Crowe)appreciates the opportunity to present our firm to the City of Miami Beach (the City)to provide auditing services for a period of three (3)years with the option to extend for two (2) additional one(1)year periods. This proposal illustrates why Crowe is uniquely qualified to serve the City. It also demonstrates how we differentiate our services from other firms. Our"Areas of Excellence"provide focus for industry and • discipline-based specialties. This focused approach allows us to be recognized as a leading provider of services and solutions to local governments. The leadership that can only come from direct Partner involvement in every client relationship provides a higher level of expertise and commitment to responsive services that is not always found in other firms. Firm Background and Qualifications Crowe will value the City as a very important client and is committed to providing high quality service, aimed at exceeding your expectations on a long-term basis. Under our core purpose of"Building Value with Values®", Crowe uses its deep industry expertise to provide audit services to public and private entities, while also helping clients reach their goals with tax, advisory, risk and performance services. Crowe employs more than 3,000 professionals across many areas of expertise,including Public Sector Services(PSS). Why Choose Our Team? We offer the following reasons to choose our team: We are dedicated to working with governments. Our Government Group works with municipalities,state and federal governmental entities,special purpose districts,school districts and colleges and universities. Crowe's Public Sector Services Group is comprised of more than 200 individuals and serves more than 400 governmental organizations nationwide. Strong,collaborative project management approach that has been demonstrated with a number of government agencies.We have successfully managed multi-departmental initiatives and have consistently delivered on time and on budget. We work closely with management and the governing body to align your goals with our work plan to meet your objectives and manage the project effectively. Regular communication and status monitoring are critical to project success and our project management approach fosters such interaction. -i- Ms.Lourdes Rodriguez, Senior Procurement Specialist City of Miami Beach, Florida Page li An experienced team of resources with in-depth knowledge of government auditing services including Generally Accepted Accounting Principles(GAAP),the Comprehensive Annual Financial Report(CAFR),federal grant programs, the Single Audit Act and OMB Circular A-133 requirements, the rules of the Florida Auditor General and the project management disciplines required to be successful. Collaborative and creative style in working with clients to consistently identify and deliver high- quality, practical solutions. We understand the City's operations,funding,financial reporting and compliance. The proposed engagement team is familiar with your needs as we have previously completed an operational and performance audit for the City.Our local experience dealing with governments of all • sizes will help create a smooth transition and help the City meet its reporting requirements. IWe are unique among firms in the sense that we have industry team professionals dedicated to • and focused on government auditing services. Concluding Comments This proposal is being submitted by John C.Weber, Partner,who is authorized to represent the Firm,is empowered to submit the proposal and is authorized to negotiate and execute a contract with the City. Crowe understands that both parties reserve their respective rights to negotiate appropriate and mutually acceptable provisions prior to execution of any contract should Crowe be considered for final negotiations. Crowe will wish to discuss any contract terms that may not comply with professional standards and would take exception to any such provisions and ask for appropriate modifications as we have listed in our proposal in Appendix A of our proposal. Crowe is fully qualified to provide superior services to the City. Equally important,we have a strong desire to assist you and believe that we can add value to you by completing the audit In a timely manner and by actively seeking ways.to assist you in improving your operations. Our proposal is•a firm and irrevocable offer and willbe valid for 120 days. Again,we appreciate this opportunity to present our firm for your consideration, and if selected,will give the City our closest attention. Should you have any questions or require additional information, please do not hesitate to contact me at 813.209.2585. Sincerely, ii John C.Weber Partner • • Proposal to Provide Auditing Services City of Miami Beach, Florida t 1 Cover Letter&Minimum Qualifications Requirements 1.1 Cover Letter and Table of Contents 1.2 Proposal Certification, Questionnaire&Requirements Affidavit 1 1.3 Minimum Qualifications Requirements 2 Experience& Qualifications 4 2.1 Qualification of Proposing Firm 4- • 2.2 Qualifications of Proposer Team 27 2.3 Financial Capacity 29 • Scope of Services Proposed 30 Approach and Methodology 32 Cost Proposal 46 Appendix A: Exceptions 48 Li Appendix B: Government Advantage Series Calendar 49 Appendix C: Peer Review Report 50 Appendix D: Resumes 51 . • ,A. Crowe Horvath. www.crowehorwath.com • MIAMI BEACH • ©Copyright 2014 Crowe Horwath LLP Crowe Horwath LLP Is an independent member of Crowe Horwath International,a Swiss verein.Each member firm of Crowe Horwath International is a separate and independent legal entity,Crowe Horwath LLP and Its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath international or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International'or any other member of Crowe Horwath International.Crowe Horwath International does not render any professional services and does not have an ownership or partnership Interest in Crowe Horwath LLP.Crowe Horwath International and Its other member firms are not responsible or liable for any acts or omissions of Crowe Horwath LLP and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath LLP. • • Proposal to Provide Auditing Services City of Miami Beach,Florida 1 9 ' 1.2 Proposal Certification, Questionnaire & Requirements Affidavit As required,we have provided a fully completed and executed Proposal Certification, Questionnaire& Requirements Affidavit on the following pages. i • Due to varying file types, these pages will not display on the Table of Contents. • • M1 ' i • 1 • • • • v . Crowe Horvath. www.crowehorwath.com MIAMI BEACH ©Copyright 2014 Crowe Horvath LLP i • ) • Solicitation No: Solicitation Title: 2014-176-LR AUDITING SERVICES Procurement Contact: Tel: Email: Lourdes Rodriguez 305-673-7000,x 6652 LourdesRodriguez@miamibeachfl.gov PROPOSAL CERTIFICATION, QUESTIONNAIRE&REQUIREMENTS AFFIDAVIT Purpose: The purpose of this Proposal Certification, Questionnaire and Requirements Affidavit Form is to inform prospective Proposers of certain solicitation and contractual requirements, and to collect necessary information from Proposers in order that certain portions of responsiveness, responsibility and other determining factors and compliance with requirements may be evaluated. This Proposal Certification, Questionnaire and Requirements Affidavit Form is a REQUIRED FORM that must be submitted fully completed and executed. • 1. General Proposer Information. FIRM NAME: • Crowe Horwath LLP No of Years in Business: No of Years in Business Locally: No.of Employees 72 8 3,000 OTHER NAME(S)PROPOSER HAS OPERATED UNDER IN THE LAST 10 YEARS: Crowe Chizek LLP FIRM PRIMARY ADDRESS(HEADQUARTERS): J 70 West Madison Street,Suite 700 CITY: • Chicago STATE: ZIP CODE: Illinois 60602-4903 TELEPHONE NO.: 312.899.7000 TOLL FREE NO.: 800.599.2304 FAX NO.: 312.899.5300 FIRM LOCAL ADDRESS: 401 East Las Olas Boulevard,Suite 1100 CITY: Fort Lauderdale STATE: ZIP CODE: Florida 33301-4230 PRIMARY ACCOUNT REPRESENTATIVE FOR THIS ENGAGEMENT: John C.Weber,Partner ACCOUNT REP TELEPHONE NO.: - 813.209.2585 ACCOUNT REP TOLL FREE NO.: 800.599.2304 ACCOUNT REP EMAIL: • john.weber@crowehorwath.com FEDERAL TAX IDENTIFICATION NO.: 35-0921680 The City reserves the right to seek additional information from Proposer or other source(s), including but not limited to: any firm or principal information, applicable licensure, resumes of relevant individuals, client information,financial information, or any information ' the City deems necessary to evaluate the capacity of the Proposer to perform in accordance with contract requirements. RFP 2014-276-IR Auditing Services 18 • 1. Veteran Owned Business.Is Pro oser claiming a veteran owned business status? YES ✓ NO SUBMITTAL REQUIREMENT:Proposers claiming veteran owned business status shall submit a documentation proving that firm is certified as a veteran-owned business or a service-disabled veteran owned business by the State of Florida or United States federal government,as required pursuant to ordinance 2011-3748,as amended. 2. Conflict Of Interest.All Proposers must disclose,in their Proposal,the name(s)of any officer, director,agent,or immediate family member (spouse, parent, sibling, and child) who is also an employee of the City of Miami Beach. Further, all Proposers must disclose the name of any City employee who owns, either directly or indirectly, an interest of ten (10%) percent or more in the Proposer entity or any of its affiliates. SUBMITTAL REQUIREMENT: Proposers must disclose the name(s) of any officer, director, agent, or Immediate family member (spouse, parent, sibling, and child) who is also an employee of the City of Miami Beach. Proposers must also disclose the name of any City employee who owns,either directly or indirectly,an interest of ten(10%)percent or more in the Proposer entity or any of its affiliates 3. References&Past Performance.Proposer shall submit at least three(3)references for whom the Proposer has completed work similar in size and nature as the work referenced in solicitation. 1 SUBMITTAL REQUIREMENT:For each reference submitted,the following information is required:1) Firm Name,2)Contact • Individual Name&Title,3)Address,4)Telephone,5)Contact's Email and 6)Narrative on Scope of Services Provided. 4. Suspension, Debarment or Contract Cancellation.Has Proposer ever been debarred,suspended or other legal violation, or had a contract cancelled due to non-performance b arty public sector agency? YES ✓ NO SUBMITTAL REQUIREMENT: If answer to above is"YES,"Proposer shall submit a statement detailing the reasons that led to action(s). _ 5. Litigation History. Proposer shall submit a statement of any litigation or regulatory action that has been.filed against your firm(s)in the last five years.If an action has been filed,state and describe the litigation or regulatory action filed,and identify the court or agency before which the action was Instituted, the applicable case or file number,and the status or disposition for such reported action. If no litigation or regulatory action has been filed against your firm(s), provide a statement to that effect. If"No" litigation or regulatory action has been filed against your firm(s), please provide a statement to"(hat effect. Truthful and complete answers to this question may not necessarily disqualify a firm from consideration but will be a factor in the selection process.Untruthful,misleading or false answers to this question shall result in the disqualification of the firm for this project. SUBMITTAL REQUIREMENT: Proposer shall submit history of litigation or regulatory action filed against proposer, or any proposer team member firm,in the past 5 years. If Proposer has no litigation history or regulatory action in the past 5 years, submit a statement accordingly. • 6. Vendor Campaign Contributions. Proposers are expected to be or become familiar with, the City's Campaign Finance Reform laws, as codified in Sections 2-487 through 2-490 of the City Code. Proposers shall be solely responsible for ensuring that all applicable provisions of the City's Campaign Finance Reform laws are complied with,and shall be subject to any and all sanctions, as prescribed therein, including disqualification of their Proposals, in the event of such non- compliance. - SUBMITTAL REQUIREMENT: Submit the names of all individuals or entities (including your sub-consultants) with a i • controlling financial interest as defined in solicitation. For each individual or entity with a controlling financial interest indicate whether or not each individual or entity has contributed to the campaign either directly or indirectly, of a candidate who has been elected to the office of Mayor or City Commissioner for the City of Miami Beach. 7. Code of Business Ethics.Pursuant to City Resolution No.2000-23879,each person or entity that seeks to do business with RFP 2014-276-LR Auditing Services 19 the City shall adopt a Code of Business Ethics ("Code") and submit that Code to the Department of Procurement Management with its proposal/response or within five (5) days upon receipt of request. The Code shall, at a minimum, require the Proposer,to comply with all applicable governmental rules and regulations including,among others,the conflict of interest,lobbying and ethics provision of the City of Miami Beach and Miami Dade County. SUBMITTAL REQUIREMENT: Proposer shall submit firm's Code of Business Ethics. In lieu of submitting Code of Business Ethics, Proposer may submit a statement indicating that it will adopt, as required in the ordinance,the City of Miami Beach Code of Ethics,available at www.miamlbeachfl.gov/procurement/. 8. Living Wage. Pursuant to Section 2-408 of the Miami Beach City Code, as same may be amended from time to time, Proposers shall be required to pay all employees who provide services pursuant to this Agreement, the hourly living wage rates listed below: • Commencing with City fiscal year 2014-15 (October 1, 2014), the hourly living rate will be$11.62/hour with health benefits,and$13.31/hour without benefits. The living wage rate and health care benefits rate may, by Resolution of the City Commission be indexed annually for • inflation using the Consumer Price Index for all Urban Consumers (CPI-U) Miami/Ft. Lauderdale, issued by the U.S. Department of Labor's Bureau of Labor Statistics. Notwithstanding the preceding, no annual index shall exceed three percent(3%),The City may also,by resolution,elect not to index the living wage rate in any particular year,if it determines it 1 " would not be fiscally sound to implement same(in a particular year). Proposers'failure to comply with this provision shall be deemed a material-breach under this proposal,under which the City may,at its sole option, immediately deem said Proposer as non-responsive,and may further subject Proposer to additional 1 i penalties and fines,as provided In the City's Living Wage Ordinance, as amended. Further information on the Living Wage requirement is available at www.miamibeachfl.gov/procurement/. SUBMITTAL REQUIREMENT: No additional submittal is required. By virtue of executing this affidavit document, Proposer 1 : agrees to the living wage requirement. 9. Equal Benefits for Employees with Spouses and Employees with Domestic Partners. When awarding competitively solicited contracts valued at over$100,000 whose contractors maintain 51 or more full time employees on their payrolls during 20 or more calendar work weeks, the Equal Benefits for Domestic Partners Ordinance 2005-3494 requires certain contractors doing business with the City of Miami Beach,who are awarded a contract pursuant to competitive proposals,to provide "Equal Benefits" to their employees with•domestic partners, as they provide to employees with spouses. The Ordinance applies to all employees of a Contractor who work within the City limits of the City of Miami Beach, Florida;and the Contractor's employees located in the United States, but outside of the City of Miami Beach limits, who are directly performing work on the contract within the City of Miami Beach. A. Does your company provide or offer access to any benefits to employees with spouses or to spouses of employees? • ✓ YES NO I • B. Does your company provide or offer access to any benefits to employees with (same or opposite sex) domestic partners*or to domestic partners of employees? ` ' ✓ YES NO tp' C. Please check all benefits that apply to your answers above and list in the"other"section any additional benefits not already specified. Note: some benefits are provided to employees because they have a spouse or domestic partner, • such as bereavement leave; other benefits are provided directly to the spouse or domestic partner,such as medical insurance. BENEFIT Firm Provides for Firm Provides for Firm does not Employees with Employees with Provide Benefit Spouses Domestic Partners Health ✓ ✓ J Sick Leave ✓ ✓ Family Medical Leave ✓ ✓ Bereavement Leave ✓ ✓ If Proposer cannot offer a benefit to domestic partners because of reasons outside your control,(e.g.,there are no insurance RFP 2014-276-LR Auditing Services 20 , providers in your area willing to offer domestic partner coverage)you may be eligible for Reasonable Measures compliance. To comply on this basis, you must agree to pay a cash equivalent and submit a completed Reasonable Measures • Application (attached) with all necessary documentation. Your Reasonable Measures Application will be reviewed for consideration by the City Manager, or his designee. Approval is not guaranteed and the City Manager's decision is final: ' Further information on the Equal Benefits requirement is available at www.miamibeachfl.gov/procurement/. 10. Public Entity Crimes.Section 287.133(2)(a),Florida Statutes,as currently enacted or as amended from time to time,states that a person or affiliate who has been placed on the convicted vendor list following a conviction for a public entity crime may not submit a proposal,proposal,or reply on a contract to provide any goods or services to a public entity;may not submit a proposal,proposal,or reply on a contract with a public entity for the construction or repair of a public building or public work; may not submit proposals,proposals,or replies on leases of real property to a public entity; may not be awarded or perform • work as a contractor, supplier, subcontractor, or consultant under a contract with any public entity; and may not transact business with any public entity in excess of the threshold amount provided in s.287.017 for CATEGORY TWO for a period of 36 months following the date of being placed on the convicted vendor list. SUBMITTAL REQUIREMENT: No additional submittal is required. By virtue of executing this affidavit document, Proposer agrees with the requirements of Section 287.133, Florida Statutes,and certifies It has not been placed on convicted vendor list. 11. Acknowledgement of Addendum. After issuance of solicitation, the City may release one or more addendum to the solicitation which may provide additional information to Proposers or alter solicitation requirements. The City will strive to reach every Proposer having received solicitation through the City's e-procurement system, PublicPurchase.com. However, Proposers are solely responsible for assuring they have received any and all addendum issued pursuant to solicitation.This Acknowledgement of Addendum section certifies that the Proposer has received all addendum released by the City pursuant to this solicitation.Failure to obtain and acknowledge receipt of all addendum may result in proposal disqualification. Initial to Confirm Initial to Confirm Initial to Confirm • Receipt Receipt Receipt JCW Addendum 1 Addendum 6 Addendum 11 Addendum 2 Addendum 7 Addendum 12 Addendum 3 Addendum 8 Addendum 13 Addendum 4 Addendum 9 Addendum 14 Addendum 5 Addendum 10 Addendum 15 If additional confirmation of addendum is required,submit under separate cover. II • • RFP 2414-276-LR Auditing Services 21 DISCLOSURE AND DISCLAIMER SECTION The solicitation referenced herein is being furnished to the recipient by the City of Miami Beach (the "City") for the recipient's convenience.Any action taken by the City in response to Proposals made pursuant to this solicitation,or in making any award, or in failing or refusing to make any award pursuant to such Proposals, or in cancelling awards, or in withdrawing or cancelling this solicitation,either before or after issuance of an award,shall be without any liability or obligation on the part of the City. In its sole discretion,the City may withdraw the solicitation either before or after receiving proposals,may accept or reject proposals, and may accept proposals which deviate from the solicitation,as it deems appropriate and in its best interest. In its sole discretion,the City may determine the qualifications and acceptability of any party or parties submitting Proposals in response to this solicitation. Following submission of a Bid or Proposal,the applicant agrees to deliver such further details, information and assurances,including financial and disclosure data, relating to the Proposal and the applicant including, without limitation, the applicant's affiliates, officers, directors,shareholders,partners and employees,as requested by the City in its discretion. The information contained herein is provided solely for the convenience of prospective Proposers.It is the responsibility of the recipient ' to assure itself that information contained herein is accurate and complete. The City does not provide any assurances as to the accuracy of any information In this solicitation. Any reliance on these contents, or on any permitted communications with City officials,shall be at the recipient's own risk. Proposers • should rely exclusively on their own investigations, interpretations, and analyses.The solicitation is being provided by the City without any warranty or representation,express or implied,as to its content,its accuracy,or its completeness.No warranty or representation is made by the City or its agents that any Proposal conforming to these requirements will be selected for consideration, negotiation, or approval. The City shall have no obligation or liability with respect to this solicitation,the selection and the award process,or whether any award will be made. Any recipient of this solicitation who responds hereto fully acknowledges all the provisions of this Disclosure and Disclaimer,is totally relying on this Disclosure and Disclaimer,and agrees to be bound by the terms hereof.Any Proposals submitted to the City pursuant to this solicitation are submitted at the sole risk and responsibility of the party submitting such Proposal. This solicitation is made subject to correction of errors, omissions, or withdrawal from the market without notice. Information is for guidance only,and does not constitute all or any part of an agreement. The City and all Proposers will be bound only as,if and when a Proposal(or Proposals),as same may be modified,and the applicable definitive agreements pertaining thereto, are approved and executed by the parties, and then only pursuant to the terms of the definitive agreements executed among the parties.Any response to this solicitation may be accepted or rejected by the City for any reason,or for no reason,without any resultant liability to the City. • The City Is governed by the Government-in-the-Sunshine Law, and all Proposals and supporting documents shall be subject to disclosure as required by such law.All Proposals shall be submitted in sealed proposal form and shall remain confidential to the extent permitted by Florida Statutes, until the date and time selected for opening the responses.At that time,all documents received by the City shall become public records. Proposers are expected to make all disclosures and declarations as requested in this solicitation. By submission of a Proposal, the Proposer acknowledges and agrees that the City has the right to make any inquiry or investigation it deems appropriate to substantiate or supplement information contained in the Proposal,and authorizes the release to the City of any and all information sought in such inquiry or investigation. Each Proposer certifies that the Information contained in the Proposal is true, accurate and complete, to the best of its knowledge,information,and belief. Notwithstanding the foregoing or anything contained in the solicitation, all Proposers agree that in the event of a final unappealable judgment by a court of competent jurisdiction which imposes on the City any liability arising out of this solicitation, or any response thereto, or any action or inaction by the City with respect thereto, such liability shall be limited to $10,000.00 as agreed-upon and liquidated damages. The previous sentence, however, shall not be construed to circumvent any of the other provisions of this Disclosure and Disclaimer which imposes no liability on the City. In the event of any differences in language between this Disclosure and Disclaimer and the balance of the solicitation,it is understood that the provisions of this Disclosure and Disclaimer shall always govern.The solicitation and any disputes arising from the solicitation shall be governed by and construed in accordance with the laws of the State of Florida. RFP 2014-276-LR Auditing Services 22 PROPOSER CERTIFICATION I hereby certify that: I, as an authorized agent of the Proposer, am submitting the following information as my firm's proposal; Proposer agrees to complete and unconditional acceptance of the terms and conditions of this document, inclusive of this solicitation,all attachments,exhibits and appendices and the contents of any Addenda released hereto, and the Disclosure and Disclaimer Statement; Proposer agrees to be bound to any and all specifications, terms and conditions contained in the solicitation,and any released Addenda and understand that the following are requirements of this solicitation and failure to comply will result in disqualification of proposal submitted; Proposer has not divulged, discussed,or compared the proposal with other Proposers and has not colluded with any other Proposer or party to any other proposal; Proposer acknowledges that all information contained herein is part of the public domain as defined by the State of Florida Sunshine and Public Records Laws; all responses,data and Information contained in this proposal, • inclusive of the Proposal Cerfif(cation, Questionnaire and Re.uirements Affidavit are true and accurate. Name of Proposer's Authorized Representative: Title of Proposer's Authorized Representative: 11 John C.Weber Partner Signature of Proposer's Authorized Representative: Date: .1ef4tA. /4147/1 State of On this L'day of ,20 a,, •ersonally appeared before m:. .. � who CO,my of L L 2d. ) stated that (s)he is the ,-�„ • • oath arc�?tOorporation, and that the instrument was signed in behalf of the said corporation by_authority of its board of directors and acknowledged said instrument to be its voluntary act and deed.Befor e: Notary Public for the State of Florida My Commission Expires: •• • ' 4 aZaETHALVNW MY COMMISSION M FF 154523 j. + EXPIRES;September 4,2018 • 'r',„t, Bonded T ru Notery Pubre Undetwaes RFP 2014-276-LR Auditing Services 23 Proposal to Provide Auditing Services City of Miami Beach,Florida 2 1.3 Minimum Qualifications Requirements Below we have provided verifiable information documenting compliance with the minimum qualifications requirements established in Appendix C of the City's Request for Proposal (RFP), including evidence that Crowe and the proposed engagement partner have performed continuous certified public accounting (CPA)services for government agencies for a minimum of ten(10)years. We have also provided information documenting the proposed engagement partner, manager and senior auditor have experience auditing similar government agencies, specifically as to size, services provided and the required reporting. Broward County,Florida ;e:x.er zea zs-: •'d - .w:x.�a•i:.ay.::-,12:pro•s:.u:Ka.,:a.t:.::rdn:a.=.:xar.:tc..u:a�.:a�..ae:;N<;,: aura•L:,.:�u:Gl'4Fti.0?vZYl3Yt'i9a;•6W:��ti:2':AL'•M.A,},K'i5:u:: ..•• Description of Work Audit of financial statements, including separate audits of enterprise funds and elected constitutional officers Overal•I Value-.of Contract , $4;090,00(3 :'- Term of Contract 2010 to 2014 r ' ' Client.Contact ''. • I EvanLukio;County:Auditor - 964:,57.7$90 • .elukic@orowaI'd:org - • City of Fort Lauderdale, Florida e vs•w+,xrecaa zrx_rnrx��v'::v:.n,r.:,,:s>s:-.r-.:cc:scvuu t.:.s:'s �-a�wxts ssaz,�.:_ ayx.n. Z:r&c..'•r. .••u:.u'C-r..;.•Aet4,n9,.m• 'flStvs'a,�•rra:..e:e�mn::i.tic,::..ra:: Description of Work Audit of financial statements,Federal and State single audit and audit of large Wastewater user schedule Overall Valueof:contract: !$1;239;600, . Term of Contract 2012 to 2016 Client.Contact, `Linda'Logan-Short,CFO/Deputy.Finance%Director ' ,_=.: I• Ilo'gan-,short@fortlauderdale:gov " ' City of Lakeland,Florida "fLYtiaY.'7:X'.�Y.rrc.v'.4.L"�i`:IS' P.fri1L51 ?-' - ...-_.-- ktt 3 t.. 2.SIL•'•[•:un• ..:`cWav:SYi,:ut:uywait3•_.R1,L4I.'..29f. flCh.:Ye.'B.WSA I."•LS7a&1HS:'K LslfN�ea:> tcs-i' ' .-•..21•Stt11:1... . Description of Work Audit of financial statements,Federal and State Single Audit,employee pension fund,Lakeland Electric separate financial statements,assistance with bond issues and Certified Audit for Florida Sales and Use Tax Overall Value oP Contract ' i $4t3A,655 ( i • Term of Contract 2014 to 2016 ! Crowe has been auditing the City of Lakeland for 20+years .Contact :' . . Michael.Brossart,•Finance;Dlreotor: ' • ... : ....�•.969;$34,ti224 • • .Rtichaei:brdeeart@lakelandgov:net-- • • •••• • 9 A Crowe Horwath. www.crowehorwath.com m MIAMI BEACH Copyright 2614 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach,Florida 3 ' •City of Tampa, Florida ' • •Ut.-iti._s::.tihi.:::::�H.t::::t.cvtiY-�i:'.:uku::'1.'CSIY'�sr�F�1:1:9i'J.:tiL'1S..ca1AV1:A�le.•' '..-.:!.:3:.J�'G.:•:��tir.n'Sa:'�£'.t.-�Kv:-'L-vG',TILt.LLri1G�..4K.AL'.2YF_�:��u1w::u.is>:1.::.:�ciL'..:Y:a::it[w-ci1.^'.:n Description of Work Audit of financial statements, Federal and State Single Audit,employee pension fund,component unit and CRA funds Overall Value of Contract :;,$1,035;0,00 _ • Term of Contract 2011 to 2016 • . ' Client Contact •• ' ' -1 Lee Huff tufier,Chief Acoounfant . 813,274:7:171•• - : . •'• • • .s. •. _' - :lee,huffstu1ler@tampagovsiet. Pinellas County, Florida �'».:ni:c,::a:,.r_+:a....-r:.sr�x:..-w:,¢�. va:J,n's(..aw.ram;:s w�:r..wF"a>r a• +u•,..'»- .-._C2!1 :._.•rn_:..m aw:_:'•rvu:a1:e :vss.„xnea..::.:wm-,•s '-.x.+.c,:.c�:vaae.s.:-u-��::.n^.:•..i.� Description of Work Audit of financial statements, Federal and State Single Audit,Board of County Commissioners and Constitutional Officers,includes and separate financial , statements for Sewer department Ovefall•Value:of.Contract:` $1:,684;678 - I Term of Contract 2013 to 2017 Client'Coritact •. `'•": 'Claretha Harrl ,'Deputy:Director of Pinanciai:Services_' • •• ti . 727:46.4,8370''. f II''clharrfs a�cq;pihellas:fj us • Miami Dade County Transit , • +:=,rnnux.x:..ueseuas.'Sm,.x.x�:,:a:xex:�sa.:,c..exs:.,,.+'e::a :w'c^•.. ,.•.w.c: •:oi:asui:.••x,sn:rtrrnx:•...vx�...:::wmer:-rx;.eua.:L r..ti•: :wrss:,"—...••,•.,�rrz,.w._.:nac:anai.tc'wi:.� Description of Work • Audit of financial statements,Federal and State Single Audit and AUP for NTD , report Overall•Value of Contract $535;0.00 .•::. •• • •- • • • , Term of Contract 2011 to 2016 Client'C.oritact..' :.-. :- .1''Duarie:Mathis .Conttojlee . •.. .• 786.46. :. �: �'- .. . • durnathi@miamidade.gov'. • '• Idf, iCA MIAMI BEACH A`fr'' Crowe Horwath. www.crowehorwath.com ©Copyright 2014 Crowe Horvath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 4 J , Experience & Qualifications 2.1 Qualification of Proposing Firm • Submit detailed information regarding the firm's history and relevant experience and proven track record of providing the scope of services similar as identified in this solicitation,including experience in providing similar scope of services to public sector agencies. For each project that the Proposersubmits as evidence of similar experience, the following is required:project description, agency name,agency contact,contact telephone&email, and year(s) and term of engagement. About Crowe Horwath,LLP Crowe Horwath LLP(www.crowehorwath.com)is one of the largest public accounting and consulting firms in the United States. Under its core purpose of"Building Value with Values®,"Crowe uses its deep industry expertise to provide audit services to public and private entities while also helping clients reach their goals with tax, advisory, risk and performance services.With a total of more than 3,000 personnel, Crowe and its subsidiaries have offices coast to coast.The firm is recognized by many organizations as one of the country's best places to work. Crowe serves clients worldwide as an independent member of Crowe Horwath International, one of the largest global accounting networks in the world, consisting of more than 150 independent accounting and advisory services firms in more than 100 countries around the world. Position in the Industry: One of the Nation's Largest Public Accounting and Consulting Firms Crowe ranks as the eighth largest U.S.public accounting and consulting firms (based on U.S. net revenue)according to the 2014 Accounting Today Top 100 Firms List. Office Locations Crowe serves clients coast to coast from the following office locations: California Los Angeles,Orange County,Sacramento, + t _ San Francisco District of Columbia I Washington D.C. Florida Fort Lauderdale,Tampa,Lakeland Georgia I Atlanta • 1Y `I z I,` `r� Illinois I Chicago, Oak Brook,Springfield • • r $ , Indiana(Elkhart,Ft Wayne, Indianapolis(2),South Bend • • -'•� -. . --2 'rT��.�� Kentucky I Lexington,Louisville ^ . �. Michigan I Grand Rapids . New Jersey I Livingston New York I New York , Ohio(Cleveland,Columbus Tennessee I Knoxville,Nashville Texas I Dallas Crowe expects to be opening its Miami office in the next few months. %\ Crowe Horwath. www.crowehorwath.com 0, MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 5 s • 1 - Areas of Specialization • Crowe is unique in that we have dedicated teams focused on key industry issues,including: Construction • Financial Services : Food and Commodities •• I� Government Healthcare Higher Education _ ' , Manufacturing and Distribution Not-for-Profit ° • Private Equity Groups • Retail Dealership Code of Ethics Our Core Ideology The firm's core ideology is a combination of the firm's purpose: Building Value with Values®, its core I values:We Care,We Share,We Invest,We Grow; and its WIN3 management philosophy that balances I Li the needs of the client,the individual and the firm.This core ideology is simple and powerful. It is at the immutable center of the firm. It defines our values code. In the broadest context, building is what we do .• and builders are what we are.We choose to build significant and lasting value for our clients and ourselves by applying integrity and demonstrating the highest levels of professionalism in everything we do. Our results are definedby and valued for their ethical standards. Our Core Purpose • ,, ily _,•v,:, Our purpose is Building Value with Values®..We choose to build as a ' team;and we have high expectations for the significance, creative 1 i , �,, excellence and value of what we build.We build for the benefit of our end- • . -user clients, our communities, our professions and ourselves. The act of building, in and of itself, offers each of us great intrinsic rewards. It also • ° Y ` gives us meaning and purpose.The way we build is with integrity at all levels. r .. `. There are four core values that ground the firm: �\,,z :''V ;.. ,y. . • We Care ';N 'ilt�iitiff : We Share, ; We Invest, • We Grow. Our Management Philosophy WIN3 is the philosophy that Crowe management has chosen as its guide. This philosophy defines the manner in which the firm will function on a daily basis.While there is no universally"right"philosophy, the WIN3 philosophy is seen as the most effective and efficient means to attain our vision of a firm with strong integrity. The WIN3 management philosophy defines success as having a thorough understanding and being responsive to the needs of the client,the individual and the firm. It submits that the best management decisions at all levels will be made when the benefits to all three of these stakeholders are maximized. In the short term, it is expected that one or more stakeholders'needs may 1, take precedence, but over the longer term,success is defined as exceeding the expectations of all three stakeholders In satisfying their needs. Neither the client's,the individual's nor the firm's needs are more important based on their inherent nature. .41\ Crowe Horvath. www.crowehorwath.com G MIAMI BEACH 0 Copyright 2014 Crowe Hmvvalh LLP C Proposal to Provide Auditing Services City of Miami Beach,Florida 6 There is no hierarchy among the needs of these three. Client STAKEHOLDER (NEEDS) Vfi � t CO-CREATORS VALUED x 1r OF VALUE RELATIONSI-IlPS " irrn { . individual t . STAKEHOLDER ,x ; '� ' x,ia' STAKEHOLDER. (NEEDS) ;1 Ykr` (NEEDS) MUTUAL U COMMITMENT National Government Practice Crowe has diverse, In-depth governmental experience that delivers insight and a clear understanding of the challenges and solutions of public sector agencies.Crowe has been serving the needs of • government organizations for nearly 50 years. We work with many different types of government organizations, including counties, municipalities;special service districts, school districts, library districts, State agencies, and,quasi-governmental entities. Crowe's Public Sector Services Team is comprised of over 200 professionals, across many of our disciplines and has worked with hundreds of public sector clients on thousands of engagements throughout the United States to deliver financial statement and compliance audits, streamline systems and processes, optimize revenue, and enable entities to meet reporting and compliance requirements. Our approach is to bring the best experience to the client to best serve the needs of the client. In today's environment, specialized skills are needed and our team spends their time serving clients in the public sector so that the clients receive the best expertise the firm has to offer regardless of where they are located. Our diverse skills sets—business process, technology,finance, accounting,fraud investigation, risk consulting, economic development,and performance-allows us to deliver effective, cost-efficient services and provides your audit team with an in-depth understanding of the unique needs of a local government. • Government Assurance Services Audits performed by a trusted CPA can provide peace of mind and identify opportunities to improve accounting and operational performance. We have an unmatched depth of governmental audit knowledge and the functional expertise to deliver superior audits. We help governmental agencies succeed by combining our deep industry experience, innovation, and knowledge with a comprehensive set of technical business competencies. Our specialists are trained to review an organization's systems and controls to provide recommendations to help the organization meet reporting and disclosure requirements. \ Crowe Horvath. www.crowehorwath.com m MIAMI BEACH Copyright 2014 Crowe Horwalh LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 7 Crowe audit solutions include: Financial Statement Audits Regulatory Compliance Audits Single Audits/A-133 Government Auditing Standards Performance Audits Examinations Our audit professionals are committed to maintaining our reputation for technical excellence,team performance, efficiency, and exceptional client service. By aligning our specialists along industry lines, we add depth and breadth of knowledge to our audit solutions.This industry specialization gives us a better view to understand your business and the unique challenges you face. As a result,you benefit from solutions delivered by people with a thorough understanding of your marketplace. ' The following chart demonstrates Crowe industry sector, objectives and solutions.. i W t ; • Your Path to Comprehensive Government Solutions -3,4,7.. EXPLORECROWEROOVERNMENTPRACTICES " ° % te4,14" rd� AREAS OF EXPERTISE JURISDICTIONS OBJECTIVES SOLUTIONS AliportAuthorriles Federal Govammei t Streamline Operation Audit Health and Human Services Slat°and Looal Governments Optimize Revenue Accounting Connuldng Justine and.Public Safety Authorities,Special Districts Roduc,Costa Economkr Development Labor and Workforce and Quos!governmunf>Wines Batter Serve Cons Mounts Fkwlalal Advisory Economia Development MOW Grant Fu ding Forensic'Services Transportatkm and Transit Comply Performance Consulting Education Manage Financial and Agdnuyy irk Management and Risk plante Administrative End Henna Protect IT Systems-arid Dato Technology'Risk Consulting • Informaiien Sorvioog New GASB Pronouncement Experience Our firm supports our clients in adopting all applicable Governmental Accounting Standards Board (GASB)statements. In recent years,several standards were monumental in that they established new financial reporting requirements for State and local governments throughout the United States and restructured much of the information that had been presented in the past. Our firm responded to those standards and worked with several governments as their GASB implementation consultants.We assisted these clients in assessing their readiness to implement the new standard as well as guiding them through the actual implementation. We take a very proactive approach in helping our clients understand GASB activities from exposure drafts to implementation of new standards. We accomplish this through our collaborations with GASB, GFOA,AICPA Government Audit Quality Center, through our Government Advantage quarterly publication, and more importantly by taking the time to sit down with clients to discuss and plan for the impact of new GASB standards. In addition,we offer webinars for our clients on a continuing basis,and invite client staff to participate at no charge. 1 . • /A Crowe Horwath. www.crowehorwath.com m MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP . i Proposal to Provide Auditing Services City of Miami Beach, Florida 8 • We are currently offering a 6 part series of webinars on planning and implementation of GASB 67 and 68 starting in April 2014: Part 1 -Implementation Guidance for GASB 67 Tuesday, April 22, 2014 Noon-1 p.m. Eastern : Crowe presenters will outline the implementation of GASB 67 for pension plans. It also will include guidance on what additional documentation requests to expect from your auditors and how the implementation of this pronouncement could affect plan employers. • Part 2-Unlocking the Mystery Around Plan Assumptions Tuesday,June 17,2014 Noon-1 p.m. Eastern Crowe presenters will explain the terminology used throughout the new pension statements and address the confusion associated with plan assumptions as they relate to GASB 67 and 68. In • particular, presenters will explain the discount rate and the interest rate and what effect those have on the final liability. • Part 3-The Financials: Entries That Will Be Needed and Changes to the Statements U Tuesday,Aug. 19,2014 Noon-1 p.m. Eastern Crowe presenters will provide a detailed overview of the GASB 67 and 68 standards and identify potential entries that might be needed,provide examples of those entries,and review the changes to the statements,footnotes,and required supplementary information(RSI). Presenters also will provide an example of an updated statement,footnote,and RSI to show the before and after effect. • Part 4-Help!What Do All the Questions and Answers Mean for My Implementation? Tuesday,Oct.21,2014 Noon-1 p.m.Eastern Reviewing the implementation guides and all of the questions might seem like a daunting task. During this webinar,presenters will address some of the significant issues identified in the guides and share manageable ways to address them. : Part 5-Audit Time—A Guide to Preparing for a GASB 67 and 68 Audit Tuesday,Nov. 18,2014 • Noon-1 p.m.Eastern Crowe presenters will provide guidelines about important points that you should know before the auditors walk through the door. 1 . Part 6-How to Present the Results of implementing GASB 67 and 68? Tuesday,Dec.9,2014• - Noon-1 p.m.Eastern The final step of the GASB 67 and 68 implementation process is explaining it to the governing body and other users of the financial statements. In this webinar,Crowe presenters will summarize a suggested presentation with key points—geared toward the governing body and designed to provide the greatest value in a limited period of time—to highlight the new statements. Register Now:www.crowehorwath.com/events • Crowe Horwath. www.crowehorwath.com elA MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach,Florida 9 Thought Leadership You need to stay competitive.You want practical,timely, reliable A f-{t.wptti:oilt information from knowledgeable, respected thought leaders. To keep you informed, Crowe publishes articles, white papers, newsletters, technical updates, and e-communications. 'rf {.A The Accounting Alert offers accounting and auditing news you can use ��. from Crowe Horwath LLP audit and assurance specialists. In each .r* :;. issue of this electronic newsletter,you will find abstracts of recent F 'f"'"' accounting issues,standard-setting activities,and regulatory developments that affect commercial,not- for-profit,and state and local Accounting governmental entities. Alert refer to http://www.crowehorwath.com/insights/accounting-alertfor Alert , additional Crowe accounting news. • We publish Government Advantage quarterly to provide thought leadership and helpful tips on key issues gathered from our years of experience in helping governments achieve their mission. Combining thought leadership and industry specialization, The Public Sector Series connects business officers with recent developments and best practices. Live seminars,web-based tutorials and —I published alerts help our clients stay current with issues that affect their organizations. . We also help our clients stay current by inviting them to participate in our in-house continuing professional education courses, providing thought leadership through our webinars and seminars. Our industry groups within the firm offer audit and accounting updates where clients are invited to participate to gain current knowledge on topical issues. Please refer to our calendar of events in Appendix B of our proposal. Check out: http://www.crowehorwath.com/industries/government/for an interactive map of our services and our current calendar of events. Representative Government Client List We have worked with over 400 state and local governments and other public sector entities. To demonstrate our government audit and advisory experience and the recognition that Crowe has in the state and local government market place (including underwriters, bond rating agencies, regulators, etc.). In addition to the references provided in Section 1.3 Minimum Qualifications Requirements and Section 2.1, Item 12 References,we have provided the following sample listing of our governmental municipal clients in Florida. A=Audit A-133 GFOA C=Consulting Audit Award I=Internal Audit cr.yw..•,n„..=.s...::.-izxea-.imzaZ-atrrf..1.1::o,-•ft, a.•r�sx4:--•r ::.ss�asrmr r,.m Broward County A x X .I .. - BrowardCounty Sheriff. :. ' I: ..: . :A:_. . . . :� • :.. x X City of Coral Springs City of Lakeland • : . - �, i . . .. 1 • A;C x x City of Ft.Lauderdale A x x City.of`Tampa:••_•;::, i. : . ;c.:_ x x - City of Tarpon Springs • I - t ,., City of IVliemil3each`;;...� :- .-. � _ : C: _ I-. : i: Florida State Board of Administration A,C 1A Crowe Horvath. www•crowehorwath.com el MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 10 Clients A=Audit A-133 GFOA C=Consulting Audit Award 1=internal Audit 1 ,::_.:1:!•:S%:.rfK'NM%+i.AViV('•?::W.i:•si4f,:t4 iM1Y•tr�J.`MV.:£:11R.4'iSN:.C,L'r"Y'v;IuY'�'i::5:1:3?:tm:.' S�'#:'Ys?- :'.:s:.-:s:=.�..irj' _ _ a:onS:•'h'-':"sYly.:.l"ystr!k(ln?:ti:1's:✓�k'.'::.r.. :Lake.land Area Mass Transit:Dtstriof' • A c • ::.u' . x. • J •• • . Miami Dade County Transportation A x Pft ,i " Pinellas County-.includi_ng a(i Constitutional:' A, j x" x • , l , . • Port Everglades A x T9Wr7,of Palm)3each :: !: • 1. .. .: . 1. Describe the respondent's(firm and proposal team)professional development program, including the approximate number of hours of continuing education attended by the respondent. Also indicate the number of days of specialized training in governmental accounting and auditing received during the last two years of personnel to be assigned to this engagement. Indicate compliance with the State Board of Accountancy requirements applicable to audits of I I=i Florida local governments. Continuing Professional Education Each of our accountants is educated in their chosen profession and holds a minimum of a four-year college degree in accounting. Several have advanced degrees and/or multiple degrees in related areas. In addition,we provide an average of 60-80 hours of continuing professional education each year for every member of our professional staff,which exceeds the 40 hour standard imposed by the AICPA. This continuing education helps assure that we stay abreast of current technical developments to, continually enhance the professional skills of our staff and support the Firm's overall quality control system. Because of Crowe's industry specializations your engagement team members have extensive experience serving government and other exempt organizations. During the past three years,the audit engagement team members have attended classes and conferences including the following topics: GAAP Updates;Auditing Standard Updates; Governmental and Single Audit Report Review; GASB Updates; Financial Reporting for'Government Organizations; Peer Review and Quality Control; and Compliance and Performance Auditing. In addition, several members of the firm have taught or led seminars sponsored by professional organizations. Our Human Resources staff maintains a full-time employee to administer an HR database of all licensing and related CPE requirements. Careful monitoring and management of this process serves to ensure that all professionals have met the requirements of their licenses. It , r ' Crowe Horwath. www.crowehorwath.com t� MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP A Proposal to Provide Auditing Services City of Miami Beach,Florida 11 Below we have provided the approximate hours of continuing professional education for each of the key { personnel that will be assigned to the City's audit. Team Member Hours of CPE Hours of Compliant Over Past Governmental with State - 2 Years CPE Over Past Board of 2 Years Accountancy v.+rsoa:..cv3c;.s :..- .. .e�.r..a7e_� ea:rax e_:..i;:::•.i�,.,n ::vea s.'sn: r:, +:v 1 LtZire,r.�s,..xs�s3r.:...v.:.::.:.a...•,-.-.:,_. John Weber 160.00 52.50 ✓ KeVih Sni'Ith: .:.: 1. 102.50'-':,f • :60:00` • ! ✓'.: Aazan St. Rose 169.00 42.00 V Michelle Blackstock • ' I .102:01..r.1 60.50: John Shumaker 202.00 51.50 V Miohaei.Rozelle. 1:94:60 .- 71•.00 ;:`: . . ✓, .l Craig Sullivan 136.50 * ✓ • Steve:Kocaj,: :: 66.30 _.: ! • Pubbens Clermont 76.00 * ✓ *Government-specific CPE is not applicable for IT Auditors with a specialized knowledge Z Describe the participation of the respondent(firm and proposal team)in national or state, governmental or professional, accounting or auditing Boards or Committees during the last • three years. • National Professional Standards Associations and Regulatory Organizations Crowe has a long-standing role of participation and leadership in national professional standards associations and regulatory organizations such as: • American Institute of Certified Public Accountants(AICPA) . • American Institute of Certified Public Accountants Governmental Audit Quality Center, United States Comptroller General Advisory Council on Government Auditing Standards Public Company Accounting Oversight Board(PCAOB)Standing Advisory Group Financial Accounting Standards Board (FASB) Center for Audit Quality(CAQ) Tax Executives Institute (TEI) • International Federation of Accountants Internal Revenue Service (IRS) U.S. Securities Exchange Commission (SEC) • Institute of Internal Auditors (IIA) • American Productivity and Quality Center(APQC) Association of Certified Fraud Examiners(ACFE) AICPA's Governmental Audit Quality Center Crowe is a member of the AICPA's Governmental Audit Quality Center(the Center),which is a firm- based, voluntary membership Center designed to help CPAs meet the challenges of performing quality single audits in this unique and complex area. The Center's primary purpose is to promote the importance of quality governmental audits and the value of such audits to purchasers.of governmental audit services. Crowe Horwath. www.crowehorwath.com (9 MIAMI BEACH 0 Copyright 2014 Crowe Horwath LLP - l... Proposal to Provide Auditing Services City of Miami Beach, Florida 12 The Center also offers resources to enhance the quality of a firm's governmental audits. The mission of the Governmental Audit Quality Center is to: • Raise awareness about the importance of governmental audits Serve as a comprehensive resource provider on governmental audits for member firms Create a community of firms that demonstrates a commitment to governmental audit quality Provide Center members with an online forum tool for sharing best practices as well as discussions on audit,accounting, and regulatory issues List member firms to enable purchasers of governmental audit services to identify firms that are members 3. Describe the respondent's quality control programs and procedures that ensure compliance with the respondent's professional standards review and A/CPA standards.Indicate whether the respondent is in the SEC Practice Section and/or the Private Companies Practice Section of the Quality Control Program. If the respondent answered positively to the preceding, attach a copy of the last Peer Review received by the respondent. Quality Control Review Process Crowe places strong emphasis on maintaining a high level of professional audit quality. To achieve this L.i level of quality we have developed an internal quality control system led by our Assurance Professional Practice(APP) Group. We also undergo a triennial external peer review and as one of nine firms • auditing more than 100 public companies, Crowe is subject the full, detailed annual inspection process of the Public Company Accounting Oversight Board (PCAOB). In addition, Crowe has a long-standing role of participation and leadership in national professional • standards associations and regulatory organizations. Members of our firm serve on the Ethics Committees in their relevant states, the AICPA's national ethics committee and the AICPA's State and Local Government Expert Panel and CPE Advisory Committee. Internal Quality Control Review • Crowe has a fully developed set of policy, procedure and review activities supporting our audit practice. Quality control for all assurance efforts is established by the national office of Assurance Professional Practice ("APP")and documented in our Quality Control Manual that includes the following six elements • along with the related objectives: Leadership Responsibilities for Quality Within the Firm Relevant Ethical Requirements • Acceptance and Continuation of Client Relationships and Specific Engagements Human Resources • Engagement Performance ; Monitoring APP is also responsible for managing and communicating independence and ethics directives of the Firm. All audit personnel are responsible for knowing and understanding important Firm protocol, including: • Independence Integrity and Objectivity Technical and General Standards, including AICPA and accounting principles Information about our responsibilities to clients, including listings regarding commissions, confidential information and contingent fees • Information about our other responsibilities and practices, including general information and listings related to'commissions and discreditable acts ,�,•\�, Crowe Horwath. www.crowehorwath.com � eYA MIAMI BEACH i ©Copyright 2014 Crowe Nemeth LLP 1 . Proposal to Provide Auditing Services City of Miami Beach, Florida 13 In addition,APP is responsible for handling inquiries from engagement teams on matters related to those policy areas. APP also performs a function within our firm that we believe is unique among major firms. Most audit engagements, public or private, are subject to a pre-issuance review by APP. This includes a review of the financial statements and certain other deliverables and may include a review of the work papers supporting the judgments made on key accounting and auditing areas. • Another important quality control procedure is subjecting all public-company audit engagements to an engagement quality review by an individual other than the engagement authorized signer. In addition to the PCAOB and peer review inspections,the firm also performs annual internal • inspections of selected audit engagements. These inspections focus on adherence to professional standards and firm policies and procedures.This process is led by a member of APP. External Quality Control Review Crowe is subject to a Peer Review of our audit practice every three years and has been since 1980. Crowe's current external quality control review organization is Cherry Bekaert LLP. Cherry Bekaert LLP has more than 15 offices located primarily in the Southeastern United States. Our most recent peer review was conducted by Cherry Bekaert LLP,for the year ended March 31,2013, and our Firm received the highest rating. The review included reviews of specific public sector engagements as well as quality control aspects of our Firm's operations.We have included a copy of our most recent Peer Review Report in Appendix C of our proposal. 4. Describe the respondent's(local office for national firms)experience in providing accounting and auditing services to local governments. Technical Expertise Crowe is organized by industry specialization versus by office. However our local Florida offices including Ft. Lauderdale,Tampa and Lakeland provide audit services to local government. We have structured the engagement team with local resources who are available to the City on a daily basis. Crowe has a sophisticated Centralized Resource Management function that is responsible for ensuring that the City's needs are met with the experienced and trained staff from our local offices, and if needed,from across our firm. As one of the largest U.S. public accounting and consulting firms, we are able to call upon a large base of talented individuals and resources. Relevant Experience The proposed engagement team has extensive experience providing auditing services to governmental entities. Listed below is a representative sample of our experience in auditing projects for public agencies. Broward County, Florida Crowe conducted an audit of financial statements,federal and state single audits,other attestation engagements, including agreed-upon procedures for the NTD report for Broward County Transit in • accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, including report of independent auditors on internal control and on compliance and other matters, and, as applicable, management letter in accordance with Chapter 10.550, Rules of the Auditor General. These reports include the following: : Board of County Commissioners Separate Reports Constitutional Officers a ,• Sheriff Crowe Horwath. www.crowehorwath.com MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach,Florida 14 Property Appraiser Supervisor of Elections Enterprise Funds { Aviation Department Port Everglades Department • Water and Wastewater Services Department Discretely Presented Component Units Health Facilities Authority Housing Finance Authority • We conducted an audit of compliance with the requirements that could have a direct and material effect on each major federal program and state project in accordance with auditing standards generally accepted in the United States of America;the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States;OMB Circular A-133,Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550, Rules of the Auditor General, including: • Special reports • Statement of County Funded Court-Related Functions Passenger Facility Charge Program • Section 707 of Bond Resolution 82-A-3 Urbanized Area Formula Statistics Form(901) • Schedule of Large User Reserve Capacity and Debt Service Allocation Schedule of Large User Annual Adjustments Raw Water Regional System • Schedule of Activity of the Landfill Management • . Escrow Account City of Fort Lauderdale, Florida Crowe conducts the financial statement audit, Federal and State Single Audit, audit of the Schedule of Large User Wastewater Treatment Rate Computation for the City of Fort Lauderdale, Florida, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, including report of independent auditors on internal control and on compliance and other matters, and management letter in accordance with Chapter 10.550, Rules of the Auditor General We conduct an audit of compliance with the requirements that could have a direct and material effect on each major federal program and state project in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards;OMB Circular A-133,Audits of States, Local Governments, and Non-Profit Organizations;and Chapter 10.550, Rules of the Auditor General, including: Special Reports • Schedule of Large User Wastewater Treatment Role Computation Organization Crowe Horvath. www.crowehorwath.com C' MIAMI BEACH 0 Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 15 City of Lakeland, Florida Crowe conducts an annual financial and single audit, employee pension fund, Lakeland Electric, separate financial statements, and assists with bond issues and Certified Audit for Florida Sales and Use Tax in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, Including report of independent auditors on internal control and on compliance and other matters,and management letter in accordance with Chapter 10.550, Rules of the Auditor General. i - We conduct an audit of compliance with the requirements that could have a direct and material effect on each major federal program and state project in accordance with auditing standards generally accepted in the United States of America;the standards applicable to financial audits contained in Government Auditing Standards; OMB Circular A-133,Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550, Rules of the Auditor General. City of Tampa, Florida Crowe conducts an annual financial and single audit, employee pension fund component unit and CRA audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, including report of independent auditors on internal control and on compliance and other matters, and management letter i in accordance with Chapter 10.550, Rules of the Auditor General. 1 We conduct an audit of compliance with the requirements that could have a direct and material effect on • each major federal program and state project in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards; OMB Circular A-133,Audits of States, Local-Governments, and Non-Profit Organizations; and Chapter 10.550, Rules of the Auditor General. Pinellas County, Florida Crowe conducts the annual financial audit and single audit, Board of County Commissioners and Constitutional Officers, including and separate financial statements for Sewer department In accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, including report of independent auditors on internal control and on compliance and other matters, and management letter in accordance with Chapter 10.550, Rules of the Auditor General. We conduct an audit of compliance with the requirements that could have a direct and material effect on each major federal program and state project in accordance with auditing standards generally accepted • in the United States of America;the standards applicable to financial audits contained in Government t Auditing Standards; OMB Circular A-133,Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550, Rules of the Auditor General. Miami Dade County Transit Crowe conducts the annual financial and single audit in accordance with auditing standards generally • accepted In the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, including report of independent auditors on internal control and on 1I compliance and other matters, and management letter in accordance with Chapter 10.550, Rules of the Auditor General. We conduct an audit of compliance with the requirements that could have a direct and material effect on each major federal program and state project in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards; OMB Circular A-133,Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550, Rules of the Auditor General. ;A Crowe Horwath. www.crowehorwath.com CA MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP . _ : Proposal to Provide Auditing Services City of Miami Beach, Florida 16 5. Describe any litigation in excess of$100,000 filed against the respondent in the State of Florida over the last three years.Also describe any terminations, suspensions, censures, reprimands,probations or similar actions against the respondent or any member of the respondent's firm by the Florida State Board of Accountancy in the last three years. ir. Litigation or threatened litigation,administrative or regulatory proceedings,or similar matters Like all large professional service firms, Crowe Horwath LLP is subject to claims from time to time for a variety of reasons,and we occasionally receive notice of claims. Crowe has pending litigation, but it is Crowe's policy not to discuss any specific matters. However, in the view of management;there are no current claims that will result in significant losses to Crowe. Crowe has no pending or threatened litigation, administrative or regulatory proceedings or similar matters that could affect its ability to perform the required services. Crowe has not been the target of any criminal investigation, indictment, prosecution or other proceeding and there are no known felony convictions of any Owners, officers, or primary partners of Crowe. We understand the need for continued reporting of status changes related to this area. Terminations/Disciplinary Action Crowe, its partners, managers, and/or other key staff members, have not been subject to any disciplinary action in the past three years with the state board of accountancy or other regulatory I __� authorities which has ruled against its professional activities or performance. 6. Provide evidence that the firm(s)is a member of the American Institute of Certified Public Accountants and the Florida Institute of Certified Public Accountants with the proposal submission package or within three(3) days upon request from the City. Below we have provided the membership numbers for each of the key personnel holding a membership with the AICPA and/or the FICPA. Team Member AICPA Membership FICPA Membership •y. :,:.vzaxrx.-ra::v.::rrrnr.a.^n• m:. a'*c_:x:uw.aze•.v..,rs:.xiza+::n:�Arasc>wrcz.ux,�,ui+;.^.c. �u:ttxxcwsxze..X:•wx ar.:a..:: • John Weber,CPA 01567264 83190 Kevin smith,•.CPA i. •:::`,;: : 0.1542969. •_•.... _. ..I:.N/A•.": ..: • Aazan St.Rose, CPA 4954428 77787 - • Miohelle: Proposal to Provide Auditing Services City of Miami Beach, Florida -17 9 Below we have provided selected recent continuing professional education for each of the key personnel that will be assigned to the City's audit. • John Weber,CPA • Date Course Title and Topics Hours w:aL':d.'vfY^.�..t`acs,:l:J�.+3ie1i''.:.•'.tlei4ssL•vi91�:�Y."t.:`;o `. -,s:K'.ies::sJ3G�:. :-B•"m:"v.:f.�R'�i:l:_:L,C..:::f.r_:SSC":rz.�i.f:.5w.:3-._Yfit'ila`...`Y.--:•:ii.".v7Jl'iC:l»:eJ+�n...iK:G��t.1ef:::'r>-<z'.Sir i J 12/06/12 Accounting and Auditing--Web Series:Audit Efficiency Updates 3.00 :.11/14/12 ••'. I •Independence;A Comprehensive ReView of AICPA and SEC Rules(FY2013) '• • 2,00 j ' 12/14/12 Government Accounting Principles 9.00 12/06/12 : Final Exam::Audit Procedures and.:Audit Pfticieney Updatas. • - !; 0;00 01/26/13 Managing Audit Risk 1.00 ..'03/68/13_1:. Microsoft-Dynarhics AX1ERp.Training-:•: I. . : is 27.00:1 05/07/13 IS Security Awareness FY13 0.00 06/1'2/13:. 2013 Partner Director-OfficerAnnual Meeting 47:00 ; . 06/27/13 Introduction to CRM-Prework 0.00 0 /027.18-:_'•:-.' ''Introduction to CRM I -3'00 07/25/13 Government Audit Efficiency Training 12.00 '09/06/13 :�:.Local,.Go•vernment-•Accounting_and:Auditing Update:Seminar: • 8:00. 10/31/13 Independence:A Comprehensive Review of AICPA and SEC Rules(FY2014) 2.00 • 01/08/14:..' ., i Strategic:Selling.Workshop: . - _- I 15.00 05/07/14 Audit Efficiency Practices and Updates for Government Auditors- 22.50 • 10-5/0.9/14:-: . 'i: PDO SharePoint 2013-•Overview:..: ••;; -•• • - . i ; 0:00: 06/04/14 2014 Partner-Director-Officer Annual Meeting 14.50 06/2.6/14 ' Local:Government Accounting_Update Seminar—. .` -.• i •• . -8.00'1 7 { 06/27/14 Local Government Accounting Update Seminar 8.00 09/15/14 • •..••: IT:Controls,in-Fihancial Statement`Audit's -- • - ••- • :8;00 Kevin Smith,CPA • Date Course Title and Topics Hours ' ...�rn.-n.....�ruevoacr�:,,a_^�^..e..:u•mcceauo��nu:..ia-_v�ewrna:_:.�. -�ux.a sa:Aa,.ercr:• -.., .Lam-.. .- +eax=� .ew:ra- ......m.r. •,.-.- �,._c:.x•�7x.r..,�^'.;a�...r:.n::cw,a:t:,. 10/17/12 Independence:A Comprehensive Review of AICPA and SEC Rules(FY2013) 2.00 12/-14/12:: ••.:J`Audit GZuality and.-Inspe6tldn Results•: .. • .... ` : • • i 3:001 02/06/13 An Overview of the New GASB Pension Accounting Standards: Part I 2.00 02/12/13 :� Understanding 2'013`Tax Law changes` .. • - • • •- :- - • 1:00 i 02/16/13 Group Audit Standards(Clarified)for Not-for-Profits and Government Entities 2.00 02/27/13 _ ;'-The;New•:•GASB:Perision:.Standards-An Auditor's:Perspective: Part II • 2.00` 03/12/13 The New GASB Pension:Accounting Standards Part II 1.00 . 03/13113 •:20�f3 AICPA Guides for State and Local Government$, NFP and Yellow .: • 2"00 a474, Crowe HorWafih. www.crowehorwath.com a MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP 9 � • Proposal to Provide Auditing Services City of Miami Beach,Florida 18 Kevin Smith,CPA Date Course Title and Topics Hours 6 wu:,.,;wra:a�C:u,-.:,.i�ixa. ';,x.»:..—.,.:., s,.,;.,: :••e!.-rrfa:,.a+,mr...er:-a�waa,„. - ,Y.=as .aa:s.:a:s:acc:;>,�v rv-:_.i�asxa:.; Book/Circular:A-133Audits - - • 05/06/13 2013 Partner-Director-Officer Spring Webcast 2.00 • 05/30/13• • •AICPA Framework:for'Small and Medium Sized Entities • - : . •1.00i. ; 06/14/13 IS Security Awareness FY13 0.00 •06/18/1.3 • I: Introdubtion..to ORM-Prework • •• • - - 000. -r 06/25/13 Introduction to CRM 3.00 07/08/13 Personall•and Professional Ethics for Texas CPAs •4:00 • 07/08/13 Fraud II:Detection 8.00 : .07/25/13;' J Government Audit Efficiency.Training • - - :12•.00.1 07/30/13 AICPA Audit Guide Update 1.00 08/14/13. `AICPA National Governmental ACcounting and•Audlting-Update Conference(OAAC) .+ 9.00 I 08/19/13 Audit Efficiency Workshop 8.00 • 08/22/13 . • `•Fraud Case:•Study•`. ..- .. • •• : 1.50 08/23/13 Industry Overviews for Texas Offices 12.00 09/06/18' - • LocalGovernnient Accounting•and Auditing Update•Setninar:- • •.8.00'1 10/23/13 AICPA National Governmental and Not-for-Profit Training Program 8.00 • 11/01/13.' . Independence;A Cornpreherislve Review df'AICPA and SEC Rules(FY2014)I - - - 2.66.1 11/20/13 Annual Accounting,Tax, and Business Planning Seminars 4.00. • 12/19/13 • ' Private Company.Audit.Update •• 2.501 04/09/14 Audit Efficiency Practices and Updates for Government Auditors 20.50 . : 05702/14 . • . PDO SharePoint 2013 Over-vieW _ • i ' 0:00 05/07/14 Audit Efficiency Practices and Updates for Government Auditors 0.00 :676/04/14;•:"'. 2014 Partner-DlrectorrOffioer Annual;Meeting' • :•: . 1600 ' 06/12/14 Employer Audits for CA State Teachers Retirement System 5.00 06117/14: ;Uniooking:the-_Mystery'Around Plan Assumptions • - 06/27/14 Local Government Accounting Update Seminar 8.00 00/10/14 ,'Omni Circular_An Overview•of Changes •: 1,00, Aazan St.Rose,CPA • bate Course Title and Topics • Hours _....-.,:•`.Xi:•eWur.Y:..tt"r.....4';:..L'.<-�:i'.L:i:1:::�s2.:._..'.Ya.::,ri+'sa•.�v,�:.'e.::.::L._..•f.-::.'-:t+:w%.�_:..::�:n'::r.',:i•Y,:::C:_:.:5.. 10/17/12 Accounting and Auditing Web Series: Reporting and Completion 2.50 10/29/12 • I Final;Exam°:A&-A Web Series:liePerting.and Completion' • i 0.00 11/14/12 Annual Accounting,Tax,and Business Planning Seminars 4.00 Crowe Horwath. www.crowehorwath.com MIAMI BEACH 0 Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 19 Aazan St.Rose,CPA Date Course Title and Topics Hours 'ti G;`4,Y :.ekf1X:G,.�ax:rf•ti:'r"::.r%.,�...14�ve::�'p?...n?..t:t.'LSxc':k.'hi...I. %.:le:.f{�.:h4".v...,.I -:Ta.w-x'�cta i '12/10/12•• :Audit Quality and Inspection'Results:; • • ti : -3.00 12/11/12 Potential Changes to Circular A-133 1.00 12/20/12 ' "i Journal,Entry Testing Methodology : ••; •• :1.; 2.50 I 01/26/13 -Managing Audit Risk 1.00 ' 02/07/13. Group Audit Standards(Clarified)for•Not-for-Profits end Government Entities • (: 2.00 05/07/13 Crowe Instructor Skills Workshop 8.00 . 05/08/13Fraud Case Study lnstructr Certification.Trraining :_ - - • - 3:50 05/09/13 Manager Power Hour#1:What's Expected of You 1.00 05/10713 • I 'Al CPA f=ramework for Small and Medium:SIzed Entitles•: • -" 1.00 06/16/13 IS Security Awareness FY13 0.00 Q6%19%13: : ::: • I Local..G:overnment:Accounting•and:Auditing Update Seminar: - • �`;.: 8 00_1 06/26/13 Annual Conference 4.00 :01/16/13:.• :•.i•:Fraud Case'StUdy.... ...".' . . .. I. • •1.50 I • 07/22/13 Fraud Case Study 0.00 07/23/13: " Fraud Case Study. . . °. - ": .i 0.00.. • 07/25/13 Government Audit Efficiency Training 12.00 08/1.5/13.• 1 Audit Efficiency:Workshop.' .- : : • " • - ."•.i • 8.:001 10/09/13 Advanced Accounting Topics Webcast 3.00 10/2S/13•' ' I':Florida-Governmeht Auditing Overview. --- _ : i. 8.00:1 10/28/13 Independence:A Comprehensive Review of AICPA and SEC Rules(FY2014) 2.00 11106/13-.• ; •Audit:EffIciencyPart 2Web-cant :' • • ! ::' 2:00: 11/15/13 Annual Accounting,Tax,and Business Planning Seminars 4.00 . 12/04/13 • Firmwide Promotion.Aoadem. -:Sefiior Maria er Track-: : " '- • :j 19":001 12/17/13 Public Company Audit Update 5.00 :•05/07/14' • Audit ffiolenoy Practices and Updates for Government Auditors `i 221.50. 05/28/14 Implementing the 2013 COSO Framework 1.50 06/20/14•:• ' '.•I. Private•to.Public C•ompany-Audifing: • • • •• • "; • 8.50• 06/27/14 CIA 301:Audit Planning and Completion 6.50 -06/23/14 i::Locall•Government:Accounting.Update Seminar • • •• :•i • 8.00 { 07/25/14 CIA 401:Advanced Topics In Accounting and Auditing Part 1 0.00 : 09/03/14 I; Independence:A Comprehensive f eView.'of AICPA and SE.C'Rples_(FY201.5): • " 1 3.00 09/18/14 Audit Efficiency 2014 Webcast 2.00 i . ... . 09(19'/14 IT Controls in Financial-Statement.Audits:. : j . t3:00 .4\ Crowe Horwath. www.crowehorwath.com CI, MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP ` Proposal to Provide Auditing Services City of Miami Beach, Florida 20 I Aazan St. Rose,CPA Date Course Title and Topics Hours ..tae<,m;„,1ic?5.11.7re.....v.wat:3:.:.F,t.s .1:t.ii+4_'i:ivtitAa'Y•v ^.Y.IlfE.:Yia1YAR`e: SL`?t41T3E9'dAl:.›.41....:,.-a.:%,,,,,uw.i.s.G..,..5,4e...i..5:':V.:, vsel -.£dRs:nth_:. ::aSia4•91 09/22/14 IT Controls in,Financial Statement Audits 0.00 09/3.0/14:.'• , - .-Advanced Accounting Topics Weijoast'•• -: - - - l' 3.00 1 . , ' ; Michelle Blackstock,CPA Date Course Title and Topics Hours i "..:_:.:us�>:'�.",:iNree':L... A'EC—.e-S:41:441fr..s:::e:.ila•al,4.`••kL'utii:.il:x•.4`Says:l.`::.C.[we ri...i,:U=Juu".YeA:^.'ti24:1.PSt:6:1:.v.:r..ur:.ASto:aan:.,ave:•tC:Y.iYlti..:S:Y.i...':.fiiA,.....:tai.M:•.Ys'w::t.✓ud:7 10/02/12 - A&A Report October 2011 3.00 • 10111/12:;.; - ... A&A.Report November 2011.. :;'...:..' .- - '. i i•- 3,00 10/19/12 Governmental Accounting Seminar 8.00 : i 11/'11/12: :'. •i-.Intro'to Readkrig:and (Jrtderstariding your Audit -;• - - :4.00 12/13/12 2012 Governmental Audit Planning&Risk Assessment 4.00 9 ' 04/05/13•:. .• A&A'Re p art Ma 2012i.".' :,,,. 11 1 Li 04/24/13 A CPA's Guide to Risk Assessment in I 2 00 Business 2.00 ° • ' 05/07/13-:' :' 1 'A&A Report June2012 : •. ...::- • • • • • 1 .1 • ' 3:001 i 05/08/13 Key Techniques to Prevent and Detect Fraud 1.50 05/16/13 I Ruditor-General's Update- ..:' . : 1;.. _. .2.00 i 05/16/13 A&A Report July 2012 3.00 05/22/13 - _ , A Practitioner's Guide to IT•General:Controls _ i • : :2.00 I 06/05/13 IT Audits&What to Pay Attention To 2.00 06/1.2/13 •:: i The Latest and Greatest':in'Finance:arid Auditing: , :1,00 06/13/13 Social Media 1.00 06/19/13 :Smart Data Management ,- .' . :. .: . 3:00 08/09/13 GASB Update 4.00 . 08/28/13 .:J:A&A Report.for;August•2012:,' • : : :. • .. • . .._:.. • . i • .::300 1 ` • 10/11/13 Governmental Accounting Seminar 4.00 • ' :11/12/13':.•:• Makfng.:Sense ofDeferrtedhInflows:and Outflows` -• - • .1:50 1 11/17/13 Auditing: Fraud Detection&Cash Recovery using Active Data for Excel 8.00 12/05/13 , ; 2013-Governmental Audit planning:and ri•sk assessment ;:: 8.00 04/28/14 Ethics and Professional Conduct for Florida CPA's 4.00 i.. 00/01/14 : .; `GASB Update . :.: : • , I 2:00 06/01/14 GASB Hot Topics 2.00 I 06/02/14..• . 1'Accouhting.&Financial-Reporting-for:Pensions,-GASB:67&68 • - •.:2:.00.1' 06/02/14 Staying on Track Through Twists and Turns 1.00 1 1 06/02/14. '• - - 1-Geiloral•Fund.Five=Year rorecasting.on'the Fly••: 1 2.00 7 ,i;\ Crowe Horwath. www.crowehorwath.com 0 MIAMI BEACH O Copyright 2014 Crowe Horwath LLP , • Proposal to Provide Auditing Services City of Miami Beach, Florida 21 Michelle Blackstock, CPA Date Course Title and Topics Hours ,..,,,,..,.........-..,...,,,,,....x.... vin.; .,...._:rcNtoa.,a:« ,.uac�,x....: .e,.... ...�:esa•.a: ..,..,,;:.-.v...,.4,...::.v.:u....:3:s:^._: :.- ass:.,N...av,,,,,r.:.,..,-..:,::;_sxs.•:i,:.�a 06/02/14 Information Technology Governance. 2.00 06/02/14' -I How to:Deal with the-Pres on,Financial Issues - • • : ' . . • 1.00 •06/03/14 Accounting Complexities Facing Local Governments 2.00 • 06/03/1:4 _•:- - :internal-Audit-Forum' - ' - - -.j: ••-2.00.! 06/03/14 Pension Challenges Ahead-DB verses DC 2.00 '06/04/14 -. :Le-lslatfve•Up date 2;00 06/04/14 Municipal Utility Operations-Internal Controls and Best Practices 2.00 . , 09/0:9/1.4 - • ]:-Proposed:Changes:From/ Measuring Assets:to:Deterniining Fair:Value • ` i' -' 2.00 1 is John Shumaker,CPA . Date ' Course Title and Topics Hours 1 .4,1,cMAerk..ia"aeze..sa T xr zesecis,''''''',',..4,1-1=111.:t,w :.ria...e;xa • :.....a;._tr,�v.w:✓:i".2a .snot..w;n`:.• ,ar<i '74l:xsxa.:se:::u r:+.s.v�xs^ -,a9:.e..a:.:,.rstr� I Li 10/17/12 Keeneland Trackside-Horsing Around 4.00 •`11/28/12 2: :Annual'Accoun ting;Tax,and Business Planning Seminars. - 4,50.1 12/10/12 Audit Quality and Inspection Results 3.00 ..'12./-26/12::•,.- ..•'j .J.Ourrtal-t ntry.Testing Methodology ::•.- :...i ... 2:5.0.1 12/21/12 CaseWare Refresher for Audit 3.50 :12 I _ aa • .,,03/ /13:: - _ . -•T.he•NeWGASB.,.Fensibn:Aaebunting-Standards.Pitl -•,• ��.' : -•_ ,:.,:_�•: _ •..• . :•••: -1'.00 .1 • 04/24/13 Benefit Plan Accounting&Auditing Updates and Other Regulatory Changes 1,50 - . - .. :.. :_.,.•, . •. •: . .......... ..... ..___ .. :, : . . , - 04/24/13_•:x.:: :Employee,:Benefiit:PlanAuditApproach•Changes&Updates' :: j• - ..2.50_ 05/07/13 Governmental Accounting&Auditing Conference 16.00 , 05/15/13: , j,Intermediate..A-133 Training• '•• ..• -. .. • . . : . .• • ,..:•:.:':.•3.00{ 05/20/13 IS Security Awareness FY13 0.00 05/29/13 Intermediate A.133 Training::; 1 : 3'.00 05/30/13 Fraud Case Study 1.50 06/.1.9/13;; -- • Auditing Defthed:Berlefit•Plans--Refre•shersand'U dates 201:2/2013':. . • • • -: j,- , 1:50,. 06/19/13 Defined Contribution Plan Audit Testing(2012/2013) 1.00 06/20/13 •• .. :403(b):Plans:(2012/2:01.3) :. :.i. • • ...::. .- . ' .... .• _.. i 1.50' . . 06/26/13 CIA 401:Advanced Topics in Accounting and Auditing Part 1 29.00 • 08/22/13 dit:EffiiencyWorkshoAup . 8.00 1 10/09/13 Advanced Accounting Topics Webcast 3.00 • 10/10/13 • I Independence:A Comprehensive Review of AICPA and SEC Rifles(FY2014). • • .2.00 i 11/06/13 Audit Efficiency Part 2 Webcast 2.00 11112/13-::. 1•-Audit Effioierrcy Workshop'for NFP and Higher Ed • ••. - • - ' :• 13.O6.1. ,% Crowe Horwath. www.crowehorwath.com (SIMIAMI BEACH 0 Copyright 2014 Crowe Horvath LLP Proposal to Provide Auditing Services City of Miami Beach,Florida 22 John Shumaker,CPA Date - Course Title and Topics Hours . , :.w:11,...mta an ei:+az +.....1 rr_.>a,..ai:t.,4,4srw.ry_x;.w.i:::.:e..:rvs{a...s7rra c,,,, v:s.,,,..mn.a,...,_ .m.,mnC..,,,,-.7.na::x,,,, .r. u,d.n...-i3;:3.n.A.:.=...... +,..-.e.,• 04/15/14 SFA and Single Audit Training/Basic X8.00 05/01/14 •• elaeA Intermdt -• =1'3$-Training - ; . j,. 3:00 i 05/07/14 Audit Efficiency Practices and Updates for Government Auditors 22.50 . :.05/08/:14 ' - ;.� Annual HigherEducatioji Auditor Training• - •' : ' • . .8.50 05/23/14 CIA 501:Advanced Topics in Accounting and Auditing Part II 40.00 08/19/14 • "-T:he-Firlarioials Entries-That:Will B$Needed and'Changes to the Statements for . ' l • ..-::: .•• GASB:,67iarid •63 ,`:::• - . -:' , • : • .. - .. 1 00"1 09/02/14 Independence:A Comprehensive Review of AICPA and SEC Rules(FY2015) 3.00 :09/10/14. . 'I,'.Omni Clrcular—:An Overv)ew of•Changes; !: 100 09/15/14 IT Controls in Financial Statement Audits 8.00 1 1..i Michael Rozelle { , Date Course Title and Topics Hours I :anti.,:ss•:zatstrixrtsea-ah. vs;.cw'...4=t::s...:.:^•at.-:•s.U..IL:11m"u:au:tviia:.:n.ra_G.ta;e;w.r;;:Cleatiw+aa..:...asa.v;a,y.:rv:ite:nr..�:r nv3,aW.:51 1Z,•1:4:manc,k.=,ux:,arxr, a�:a.+7 04/10/13 Introduction to A-133 and SFA Audits 9.50 04/12/13 L A State-Compliac .Trainig" ' - • • l 17:50, . i 05/09/13 Introduction to A-133 2.50 05/:14/1:3 • •IB'"Securit Awareness-I Y{3 .. . "~ • 0:00' 06/19/13 Local Government Accounting and Auditing Update Seminar 8.00 ' ; 0'0/06/13 -•1i LEA.'S42te Gpmp(lanae•and"AuditApproach-Training ..: .- .l ' : 9.0:01 09/19/13 CIA 201:Financial Statement Audit Training 34.00 • 10/25/13- {: Florida:Government`Auditing,Overview: _ 8.00 10/31/13 Independence:A Comprehensive Review of AICPA and SEC Rules(FY2014) 2.00 04/09/14: - 'Audit;Efflctency Practicds:arid"Updates.for,Government:Auditors : .• , 20,50 • 04/11/14 I LEA State Compliance Training 18.00 05/01114-.•. Ihtermediate'A�133;Training:-. :' 300 • 05/15/14 Intermediate A-133 Training 3.00 06127/1.4 ''.:_ :CIA301;Audit Planning.and'Completion•. .` - - • 3:: 40.50 i 09/05/14 LEA State Compliance and Audit Approach Training 8.00 1 09/05/14 •.Workplace;/larassrne'nt.5 -'. :: " • - j' 00 j . 09/19/14 IT Controls in Financial Statement Audits 8.00 , ; 09/30/14 •. . • j Advanced'AccouhtingTopicsWebcast: • - • j: 3:00.1 I � A Pi Crowe Horwath. www.crowehorwath.com MIAMI BEACH • ©Copyright 2014 Crowe Horwath LLP , Proposal to Provide Auditing Services City of Miami Beach, Florida 23 Craig Sullivan,CPA,CISA,QSA Date Course Title and Topics Hours ' .�2+.W..�...'d'C.�..'2'S+c:sh':u[:u.$,::k.::rx::i�L!+i4c`tnc�.•.a_H:i .'.f.r .e.rc. .-.- .._... Jc un._....vAtua..-:r-�srr+.r..w>_....1 1..i. ]..h ..b. �.r�rh.v ..A , 11/13/12 PCI for 2012: Past, Present,and Future 1.00 11/28/12 Crowe Horwath LLP Annual.Financial Institutions-Conference • • •'7:50 ' • 12/10/12 Independence:A Comprehensive Review of AICPA and SEC Rules(FY2013) 2.00 12./ •1.7/12 A .2/ /12 • udit•Q'ualityInspection"Reults • 3 and •s •.. ' I - 001 04/12/13 Risk Training Week 29.50 06/•12/13 I-2013 Partner-�Directorr Officer Annual Meeting- : I •• :1:4:601. 06/17/13 Introduction to CRM 3.00 . 06/18/13.:. . IS Security Awareness FY13 00 06/18/13 Introduction to CRM-Prework 0.00 .0$/30/1,3 :•• •• Au.dit:E• fficiency Workshop", • • . - • ' j' --- 8;96.i 09/18/13 Risk Financial Audit Support Update 2.00 09/197.13 ' •s'•Pubiiti Company Auditor Webcast , • ... . •i 3,50:) 11/01/13 Independence:A Comprehensive Review of AICPA and SEC Rules(FY2014) 2,00 : 1.1/13113 ' is Changing.PCI:Standards:Brings New_Challenges.: ' • - i 1 00 11/19/13 Crowe Horwath LLP Annual Financial Institutions Conference 8.00 12/1:7113' .Public Company Audit:Update - 1 '7:5Q j 01/07/14 .Public Company Audit Update Webcast ` 0.00 04(29114--• •_:. .Risk:Training Week.:. . • ...:50 • 10 04/30/14 Risk Training Week 5.50 • 05/01/14.:: :'I':Risk'Training':We'ek •• i : 7.001 05/02/14 Risk Training Week 2.50 05128/1.4 im lementing the:2013 COSO.: ramework • l 1,60 06/04/14 2014 Partner-Director-Officer Annual Meeting 17.00 I - Steven Kocaj, CISA Date Course Title and Topics :.>,:.-ezxec..- . -_- .----a3a Aa.. v is-vS a'An -_:rw.maa_S.srru N.� „nseuvsvar S4.r.it Ai Sa.:..i:•rorsrvs:.-ssu-ie�:_�nn czir:: asre:u. .•-r..u:.vax.:.caY.l 01/25/13 Database Activity Monitoring: Detection,Prevention and Audit 1.00 03/22/13.-: ;,•.Gonsum'eriaation.of IT and Mobility.Management •• 04/12/13 Risk Training Week 37.50 07/22/.14 -- ::I drlentation:.New. : • Hire::- . • • • • • • • • •I. :001 07/23/14 Independence:A Comprehensive Review of AICPA'and SEC Rules(FY2014) 2.00 ;.:07/24/i4 ; : .j:Workplace•Hrassient"_5 • • I 0.00 ? 08/05/14 New Hire Performance,Management Process Overview 0.00 09/19/14 IT Controlsih Financial Statement'AUdits •• _ • !. . - &op %\ Crowe Horwath. www.crowehorwath.com MIAMI BEACH ®Copyright 2014 Crowe Horwath LLP { • i . Proposal to Provide Auditing Services City of Miami Beach, Florida 24 Pubbens Clermont Date Course Title and Topics Hours ' .+Y:+-i.l...�:C•.-vY�e.:.. ..vat.r••:el2.:v,'.i_:uJ;w:+._:i•i:.xt.Y.-.i.i.�w::��.�s_-u'.• -...: .1::a.ei.�:9�:tuL'SL.•_1.'.v..3t-:v :r.':.s::-...,r..a..��...�u...i cVi"..J.:Mt is P.3.:1.:_e,:v-clam..z.• 1 09/06/13 Orientation: New Hire 0.00 09/10/13 . �. Risk 101`: NewHireStaffTraining i _15:00:; C- 09/13/13 Risk Technology Risk Orientation 23.00 09/18/18. •: ; independence:A:Comprehensive'.RevleW of AICPA and SBC-Rules(FY2013):• • i;•` ;2.00 04/29/14 Risk Training Week 10.50 04/30/14 I'Risk Training Week : : •: j •.• -•6.50 j 05/01/14 Risk Training Week 8.50 05/02/14 ',.-Pisk•Training •Week {: 2,50; • 09/19/14 IT Controls in Financial Statement Audits 8.00 8. The firm(s)must be independent of the City as defined by generally accepted auditing standards and Government Auditing Standards,and respondents shall include a statement to their independence with regard to the City. Independence As a firm of certified public accountants, Crowe has policies and procedures to provide reasonable assurance that professional personnel maintain independence, integrity, and objectivity required under professional standards.A dedicated unit within Crowe,the ethics and independence group within the firm's national office, is responsible for managing and communicating independence and ethics guidance and firm protocol. . . • Independence precludes relationships that might in fact or appearance impair objectivity in performing audit and other attest services. Integrity requires personnel to be honest and candid within the constraints of client confidentiality. Service and the public trust are not to be subordinated to personal gain or advantage. Objectivity is a state of mind and a quality that lends value to a firm's services.The principle of objectivity imposes the obligation to be impartial, intellectually honest, and free of conflicts of interest. Personnel must consciously refuse to subordinate their judgment to that of others and must avoid relationships that may impair objectivity or influence judgments.The Crowe policy is that all personnel must be in fact and appearance independent in attitude, in the conduct of work performed, and in relationships with clients, as required by applicable professional standards. All professional personnel shall follow the applicable independence rules and regulations of the American Institute of Certified Public Accountants(AICPA)Code of Professional Conduct,the state .• Boards of Accountancy, the Securities and Exchange Commission,(for public company audit clients), the U.S. Government Accountability Office (GAO;for audits subject to GAO requirements), and other regulatory agencies.We communicate independence rules to help provide assurance that our personnel will comply with applicable rules. Our success as an independent public accounting firm requires that the firm and its personnel comply with all applicable ethical and independence standards and rules.The firm views independence or ethics violations seriously. After evaluating the circumstances,the firm may sanction an individual who violates applicable ethics or independence requirements or related firm policies and procedures. Sanctions may include, but are not limited to, entries in personnel records, reduction in responsibilities, reduction in compensation, termination, or other actions that the firm's management may determine are appropriate. • Crowe Horwath. www.crowehorwath.com ea MIAMI BEACH ©Copyright 2014 Crowe Horvath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 25 Crowe is independent—as defined by the AICPA Code of Professional Conduct and Government Auditing Standards issued by the Comptroller General of the United States—of the City of Miami Beach and any of its agencies, its elected or appointed officials, and its employees. Crowe is not aware of any conflicts of interest relative to performing the proposed audit for the City. 9. The firm(s)must submit a copy of the two(2)most recent external quality control review reports and letters of comment,along with a statement indicating whether the reviews included a review of specific governmental engagements with the proposal submission package. We have provided a copy of our two most recent Peer Review Reports in Appendix C of our proposal. 10. The proposed engagement partner,manager and senior auditor must have experience performing a Single Audit in accordance with generally accepted auditing standards, Government Auditing Standards issued by the Comptroller General of the United States, the Single Audit Act Amendments of 1996, the provisions'of ONMB Circular A-133,Audits of State and Local Governments;and the Rules of the Auditor General of the State of Florida. Federal Programs Experience, The proposed engagement partner, manager and senior auditor have extensive knowledge of OMB Li Circular A-133 as well as the Rules of the Auditor General of the State of Florida. We monitor changes in a variety of topics related to governments as published by the American Institute of Certified Public Accountants (AICPA), Government Accounting Standards Board (GASB), General Accounting Office (GAO)pronouncements, and other federal regulations. Our participation in internal andexternal continuing professional education courses ensures all members of the engagement team stay abreast of OMB Circular A-133 topics as well as any changes to the Florida single Audit Act. Which will benefit the City during the next three years as the Uniform Grant Circular is implemented. Crowe possesses valuable experience with the Federal and State Single Audit Acts and OMB Circular- A-133 requirements auditing Billions in federal funds on an annual basis. Please see the attached resumes for the government audits for which the federal and state single audit experience is demonstrated. , 11. The firm(s) must maintain a permanent office within Miami-Dade, Broward or Palm Beach County upon award of contract. Crowe maintains a Fort Lauderdale office. This office provides services in Assurance and Financial Advisory, Tax, Public Sector Services, Risk, Enterprise Solutions and Information Solutions. Below is the contact information for this office. Crowe Horwath'LLP 401 East Las Olas Boulevard, Suite 1100 Fort Lauderdale, Florida 33301-4230 Tel 954.202.8600 Fax 954.202.8639 www.crowehorwath.com in addition, Crowe expects to be opening its Miami office in the next few months. A Crowe Horwath. www.crowehorwath.com CA MIAMI BEACH 1 B Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 26 12. Provide as reference a minimum of three(3)municipalities that the firm is currently providing auditing,services. References Quality work, based upon strong competency and directed towards our client's needs, is the core element of creating value for our clients. Quality service involves prompt and efficient service delivery and effective communications with clients. Business relationships involve gaining trust and respect by listening to our client's needs and developing a comprehensive understanding of their business and vision for the future before providing advice. We have delivered high value to our clients for decades • and we feel that we are well-suited to help the City. Our clients are the best judges of our ability to exceed your expectations. Please feel free to contact any of the individuals listed below for an appraisal of our work. References .ab,,.vc,t,aaa%swu.,,nx "arrtrr.:arws,v:�pcn ndm;:cm�,a:�ua+.c.s srv:�:..+:.r. .u p:.0 4._a: •arta...•.e,.ra..rnc:. -: . :-s:-cd.�+..<a:.xav:.:::av:: i Proposal to Provide Auditing Services City of Miami Beach, Florida 27 2.2 Qualifications of Proposer Team List the members of the project team and specify the role that each team member will play in providing the services detailed herein and each team members'qualifications.Provide a list of the personnel to be used on the project and their qualifications.A resume including education, experience,licenses and any other pertinent information shall be included for each team member, including subcontractors to be assigned to each project. These resumes should be, at minimum, for the proposed engagement partner, the manager and the senior auditor for this engagement. The resume should include the continuing education in governmental auditing and other governmental audit engagements that they(have undertaken. Engagement Team Crowe has built its reputation on close senior-level involvement and maintaining a strong client relationship. The ultimate success of our client relationships is largely attributable to one key component—our people. The proposed engagement team is well qualified to provide quality, timely, and personalized services to you. Crowe has dedicated teams focused on key industry issues.We have structured the engagement team • to include senior level Subject Matter Specialists that are leaders in their areas of expertise. Industry knowledge of the engagement team allows for better communication and understanding of issues I ' raised. We have also structured our engagement team with extensive partner involvement. You will find our average partner-to-staff leverage ratio is higher than most other firms. By having partners involved in the daily execution,we reduce the time required to respond to accountingissues and thereby close the expectation gap. We are able to achieve this leverage by making significant investments in technology, uniform platforms and methodology, investments that allow us to work smarterr and more efficiently. Our technology • capabilities are widely recognized and commensurate with that of the Big Four accounting firms. The work that we will perform will be conducted in a timely, planned and orderly manner,without the uncertainty and confusion associated with a delayed, last minute performance. The proposed team takes pride in their client service ethic and in responding promptly to client inquiries. Their policy is to check voice mail throughout the day and return phone calls usually on the day received or within 24 hours at the latest. Likewise, they are typically able to access e-mail even when out of the office and respond promptly. Your Engagement Team is available to address your needs and concerns. • An overview of your engagement team Is as follows: • Key Personnel Role Experience :-:.-:aau.a iff.r to<�2 tCO.:•.s:s a. :-x:•rri K.:..ti.t;:au:.0-ay.a .: s:a:;--w: .-s+:.•.,..arc:fr.-.•xxrc.:s»._:svwx._se-•.x.r_...n-s:1e.:avaatJN..tK gar.. ....,;y.._._�.. John Weber,CPA Engagement Partner: Mr.Weber has over twenty three years of experience Responsible for the focusing his entire career in providing assurance and Engagement and consulting services to public sector clients including issuance of Reports government. Mr.Weber also served as Crowe's national partner in charge of the governmental audit practice for eight . - years and is a member of the United States Comptroller General Advisory Council on Government Auditing Standards. 1 ,'\ Crowe Horvath. www.crowehorwath.com garsFA MIAMI BEACH JI ©Copyright 2014 Crowe Horwath LLP , . i 1 Proposal to Provide Auditing Services City of Miami Beach, Florida 28 7 ' Key Personnel Role Experience rv:Y,..)ar.1H.�M*l.::nh�>v.\aw-. :-t.(^alJf'N:'1 Yq,J:a•Fr>:>F:_sR?.:na4r.>-'-iAl:ii..:t'.: •:e...V.i3[i.•.vr,.p}ti:�[•Si ':aTA`+iri:.-:h'i'I,CRn>_•.'.n\�^ti;.tx::tau`a,eMu.•.:.^A'.4r'"%v.•V, le*..^�.t..unal.e.,. KevinSmith,.CPA p{ Auclit.Partner—Quality Mr.Smith has:approximately twenty-years of experience: - . . . : -. .l -Rev iew providing both advisory and financial statement and: • •• ; - • . {,' • _ i • compliance audits.primarily.to.governmental,'M`r::Stnith:ls`-a . . 1 • • i' • ' - I member'of the AICPA State:and:Local Governmental•1=iipert•.:-I ' l j• Panel, 'Mr::Smith currently serves as Crewe's.national-partner.j :• - '. • '.!: -••' - ' j:n-oharge'of-the:government audit practice.... ' '' - - Aazan St. Rose, Audit Senior Manager Mr.St. Rose has over eight years'experience servicing CPA governmental clients with complex accounting issues, including issues involving complex financial instruments, derivatives and hedging,variable interest entities and leases. Michelle:Blecketook,:l Audit Senior Manager • '• • Ms;.Blackstock.iias twenty-_five�years;of experience in- •:• • CPA,;011 P: ,i : ,:providing'::assurance to puello sector`clients-including - • 1 • -;;_government Prior to•joining Crowe shehas prior.Work 1.; • •I • { experience;in:both internafional.and:loom pubic:accounting 1 : I firms.• LJ John Shumaker, Audit Senior Staff Mr.Shumaker has six years of experience in providing Audit CPA and Consulting to government organizations. • Michael Rozelle:: Audit Senior:Staff: • - 1. Mr:Rozelle..has:oVer two years of experience:working_ on • . • •. . ,.multiple'governmentblient engagements ••••• :--.';- • Craig Sullivan,CPA, IT Risk Partner' Mr.Sullivan has 30 years'experience in accounting and '• CISA, QSA technology consulting related to Risk Management and Information Technology Controls. He is responsible for the thought leadership and technical activities of the Technology • Risk activities of Crowe's Risk Consulting Services business unit on a Firm-wide basis. • Steven Kocaj,GISA.:j;.IT Risk Manager- - - , Mr,'•Kocaj is'a marjager.with•the:IT Risk:group: Proposal to Provide Auditing Services City of Miami Beach, Florida 29 2.3 Financial Capacity Each Proposer shall arrange for Dun &Bradstreet to submit a Supplier Qualification Report . (SQR) directly to the Procurement Contact named herein. No proposal will be considered without receipt,by the City, of the SQR directly from Dun&Bradstreet. The cost of the preparation of the SQR shall be the responsibility of the Proposer. Crowe's D&B SQR Report has been sent directly to Ms. Rodriguez per her e-mail response to our • questions and clarifications dated October 6, 2014. I Li i • 1 • • ,. Crowe Horwath. www.crowehorwath.com MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 30 • Scope of Services Proposed Submit detailed information outlining the scope of services that the proposer is proposing. For any scope requirement identified in Appendix C,Minimum Requirements and Specifications, proposer is to clearly articulate how the proposed solution satisfies the scope requirement. Proposers may offer complementary or related services or solutions beyond the stated scope requirements. Understanding of Work to be Performed Based upon our review of the request for proposal document, it is our understanding that Crowe will provide the following services: Prepare and issue an auditor's opinion and conduct an audit of the City's CAFR in accordance with • • Generally Accepted Auditing Standards(GAAS)and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.The examination will be made in accordance with the guidelines prepared by the Governmental Finance Officers Association (GFOA)in order for the City to apply for the Certificate of Achievement for Excellence in Financial Reporting. We will provide guidance with the implementation of Governmental Accounting Standard Board (GASB)statements as necessary. Crowe will issue an audit opinion to the City no later than 180 days following the fiscal year end. • Perform an audit in accordance with auditing standards generally accepted in the United States of America;the standards applicable to financial audits contained in Government Auditing Standards, : issued by the Comptroller General of the United States; and OMB Circular A-133,Audits of States, • Local Governments, and Non-Profit Organizations.We will issue an Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance, Independent Auditors' Report on Compliance and Internal Control over Compliance Applicable to Each Major Federal Program and State Project, and Schedule of Findings and Questioned Costs. Crowe will issue the single audit report and data collection form to the City no later than 180 days following the fiscal year end. • Issue a Management Letter in Accordance with the Rules of the Auditor General of the State of • Florida no later than 180 days following the fiscal year end. Prepare and issue an auditor's opinion and conduct an audit of the RDA basic financial statements in accordance with Generally Accepted Auditing Standards (GAAS)and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Crowe will prepare the financial statements,footnotes and schedules and will issue to the City no later than 180 days following the fiscal year end. Prepare and issue an auditor's opinion and conduct an audit of the PSF financial statements in accordance with Generally Accepted Auditing Standards (GAAS)and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Crowe will prepare the financial statements,footnotes and schedules and will issue to the City no later than 150 days following the fiscal year end. Prepare and issue an auditor's opinion and conduct an audit of the VCA financial statements in + . accordance with Generally Accepted Auditing Standards (GAAS)and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Crowe will prepare the financial statements,footnotes and schedules and will issue to the City no later than 90 days following the fiscal year end. • , Prepare and issue an auditor's opinion of the Miami Beach Convention center and conduct an audit of the GS assets, liabilities, revenues and expenses in accordance with Generally Accepted Auditing Standards (GAAS)and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Crowe will prepare the financial statements,footnotes and schedules and will issue to the City no later than 90 days following the fiscal year end. A Crowe Horwath. www.crowehorwath.com MIAMI BEACH 0 Copyright 2014 Crowe Horwath LLP d'1'141enuoH°maJO D40Z 146!JAfdop® 1 I f D V J 41 I Y Y Y I Y Y et, wo0'LlieNuOIgGM0.I0•MMM 'Lf MJO$ aMOJJ • I \ I ' r F, s .pue Jew!leosld e.p 6u!Mon step 06 mg Jam ou ata}o}wise! lllM pue salnpagos pue sa}ou}ooj 's}uawa}e}s le!oueu!d au} aaedaJd p!M eMoio 'alna uo!}ei}s!ulwpy se!}lunwwoo as}}e8 6ulplln8 pue'suoRnlosei algeolldde -50 eoueulpap }unoO aped-lweRN Lupv aouepa000e u!109101d puo8 sa!}lunwwoo da}}a8 6u!p!!n8 ata}pue}oefoad puo8 se!}lunwwoo as}}ae 6ulp!n8 941.10j A}unoo aped-lwelw }lpne ue waned • 'pue aeeA leosg.ata}6ul,olloo sAep 06 ueq}Jam ou eta}o}enss! II!M pue se npagos pue se ou}ooa's}uewa}e}s leloueug ata}aaedaad 11!M aMoao 'LH- ON spaepue}S 6u!}!pny uo}uewa}e}S PUB 9£6 0-nv'S}1.18weeJ6y len}oea}uo0 . }sial s,uaipllgo eq}q}!M aouepa000e u! w=Z6oad punj}snag s,uaapl!119 aq}JO}lpne ue waoaawd 'pue mei( 'eon all 6u!Mopoa sAep 06 ueq}Jam ou }!3 91-11 01 ens!l!!M pue Salnpegos pue se;ou}oo}'s}uewele}s leloueuy aq}aaedaad lilts 0MOJ3 •selnzl ani}ea}s!UIWpy dNS eq}pue uo!}nlosaa emeolidde 'S 4 4-9e 'oN eoueu!pao dNS '}ueweeJ6e}uea6 aq}q}!M eoue!ldwoo u!}pne us}onpuo0 • b£ eplaolI'Llne9 PEN JO Alio saa!n.lag Sul)!pny apinoad o;lesodoad l , Proposal to Provide Auditing Services City of Miami Beach,Florida 32 Approach and Methodology Submit detailed information on how Proposer plans to accomplish the required scope of services,including detailed information, as applicable, which addresses, but need not be limited + : to:implementation plan,project timeline,phasing options, testing and risk mitigation options for assuring project is implemented on time and within budget. Describe the respondent's approach to this audit engagement. This should include at a minimum the following: 1. Development of the audit program. Transition Plan • A smooth transition is important to both the City and Crowe. You have been audited by the same firm for several years and may have grown accustomed to certain ways of doing things.This is a chance to re- think how you perceive your internal financial management,audit and business partner relationships and start fresh. However,with a change in auditors, both Crowe and the City must be willing to invest + ; the time necessary to properly facilitate change.We expect to make an investment in our relationship which will be mutually beneficial to our organizations. I Li Upon approval of Crowe as the City's auditors,we will schedule a planning meeting to meet with management to discuss roles and expectations of Crowe and the City. Other audit planning meetings may be scheduled to discuss specific accounting and financial reporting and to analyze the programs and operational activity as well as tax planning and new developments. Key elements of an effective transition plan include: Developing client and auditor expectations and performance measurements Developing time lines for audit services Communicating our audit approach rl We will move quickly to execute the engagement letter.We will perform our formal due diligence and client acceptance procedures after you have communicated with your previous audit firm.As part of that process we will assist you in requesting that Crowe have access to the current firm's workpapers and schedule a,time to review those workpapers. The above services are included in the fee agreement we have provided. Audit Approach The following audit approach sets forth a work plan, including an explanation of the audit methodology to be followed to perform the nature of services requested in the RFP.The risks that are identified,the procedures that are performed or additional testing focus may change on a year-to-year basis based on the risk assessment, but the approach does not change. • Approach to Gain and Document the Understanding of the Internal Control Structure Expectations for improved corporate governance have caused governmental organizations to rethink how they manage and control risk. Governments are reviewing the roles and responsibilities of internal audit and newly created internal controls functions to respond to the increased expectations of stakeholders. Crowe's public sector specialists have the breadth of knowledge and depth of experience necessary to effectively address compliance issues and Implement new reporting and disclosure requirements for government organizations. A, Crowe Horvath. www.crowehorwath.com geil MIAMI BEACH ©Copyright 2014 Crowe Horvath LLP • Proposal to Provide Auditing Services City of Miami Beach, Florida 33 We provide a multidisciplinary approach to assessing financial and structural vulnerability and accountability that brings the type of governance, internal accounting and operational control, and regulatory oversight consulting that is becoming mainstream in corporate America and is at the forefront of thinking in the public sector. Measurement and mitigation of risk in the government context requires more than an auditor's approach. Our teams combine traditional accounting and auditor resources with operational design consultants and program managers to evaluate financial risk in light of program objectives and balance the need for increased accountability with the need to address program objectives. The Statements on Auditing Standards(SAS)Nos. 104 through 111 and 114, issued by the American Institute of Certified Public Accountants (AICPA), considerably affect the way audits for government organizations are to be completed. Government entities need to select an audit firm that can meet the requirements of these regulations as well as the specific needs of the organization. Crowe uses a risk based approach to auditing that heavily emphasizes the understanding, corroborating and testing of internal controls to assess risk within the client organization. The primary areas we cover include entity wide controls, IT controls and specific account or cycle level controls. We use personal interaction, flow charting and web based interactive tools to understand, gather, corroborate and test internal controls in order to assess risk. While Crowe used a risk-based approach for several years prior to the implementation of the newer I standards, our audit process was strengthened with the new standards. Our desire to provide value and a high-quality audit remains unchanged.We differentiate our services from those of our competitors 1 , through close personal involvement from all levels of the engagement team and regular,focused communication with your management team. While the audit process can still be separated into unique phases,the process is not as linear as it was previously. It is likely that decisions reached and information obtained in an earlier phase of the audit may need to be reconsidered based on evidence gathered in a later phase. Crowe's risk-based audit approach includes the following phases: • Engagement Management and Communication • : Phase I • ` • Phase II Phase III Phase IV Audit Strategy Account-level Performance of Completion, Development& Controls Audit Procedures Accumulation of Entity-level Controls /. Assessment& ' Results and Assessment& ,>' Testing �' , Reporting Testing + / is Phase I—Audit Strategy Development and Entity-level Controls Assessment and Testing • This phase of the audit process includes all pre-engagement activities;the preliminary planning process; obtaining an understanding of the City and its environment; evaluating and testing the design of entity-level controls(including policies and procedures that address significant assertions and affect the City as a whole); and identifying significant risks and our planned response to those risks. Prior to each engagement we determine whether to accept or continue the client relationship, evaluate our independence, develop a preliminary overall audit strategy, establish an understanding of the engagement terms, and document that understanding in an engagement letter.Once these activities have been completed,we begin our planning process. Crowe Horwath. www.crowehorwath.com to MIAMI BEACH 0 Copyright 2014 Crowe Horwath LLP I Proposal to Provide Auditing Services City of Miami Beach, Florida 34 • J Planning affords us an opportunity to work closely with you to develop audit objectives and outline a plan for meeting those objectives. The planning process includes: • • Identifying the areas of audit emphasis; Assessing risk and materiality; • Designing audit techniques and procedures; Discussing and assigning responsibilities; and Formalizing the reporting timetable. During planning,we will ask you to identify areas of higher risk,which we will later address by designing • specific controls or substantive tests customized to you. The Crowe approach includes direct input from your management team to ensure our understanding of the scope of perceived risk, your perspectives on the risk, and your expectations of the audit. We will also review your recent audit reports to enhance our efficiency in requesting information and minimize your staffs time during our fieldwork. In addition to meeting with management,we will also make inquiries of those"charged with governance"as required by SAS 114.This standard requires us to communicate the auditor's responsibilities under generally accepted auditing standards and an overview of the planned scope and timing of the audit to the individuals identified as"those charged with I governance." Our key audit planning steps include: Entrance Conference. Designed to give our engagement team an overall understanding of your organization. The conference allows us to coordinate audit time frames and due dates, as well as . • determine the level of assistance we need from your staff and management team.A requested materials letter will be prepared and delivered to you prior to, or shortly after, the close of the c conference. Preliminary Analytical Review.We use expectations based on information obtained from various sources, including conversations with management, review of board minutes and internal financial statements, as well as budgets,to perform a preliminary analytical review of account balances. During the review we will study trends, percentage changes, ratios, and other financial data • relationships.We may also use computer-assisted audit techniques to compare your current financial data to at least the previous year of data for unusual fluctuations.We will also review your • budget to analyze fluctuations and develop an understanding of your planned initiatives. Brainstorming Meeting to Discuss Risk of Material Misstatement.The Crowe engagement team, including the signing executive,will meet to discuss the susceptibility of the financial statements to material misstatement due to error or fraud. This meeting allows team members to share knowledge and gain a better understanding of the potential for material misstatement of the financial statements, including how management could perpetrate and conceal fraudulent financial :r• reporting and how assets of the City could be misappropriated. Assessment of Audit Risk and Materiality Levels.Audit risk(the risk that an auditor may unknowingly fail to modify its opinion on materially misstated financial statements)and materiality must be considered together in designing the nature, timing, and extent of audit procedures.The • Crowe team will determine our overall level of materiality and tolerable misstatement using professional judgment.This-consideration Is influenced by the auditors' perception of the needs of financial statement users and will therefore include both qualitative and quantitative factors.At the end of the audit we will review any known misstatements and their effect on your financial statements,working with you to determine whether passing on known misstatements will materially affect the financial statements. Crowe Horwath. www.crowehorwath.com [b MIAMI LlEACH 0 Copyright 2014 Crowe Horvath LLP • I . Proposal to Provide Auditing Services City of Miami Beach, Florida 35 a . Documentation of Our Understanding of the City and Its Environment. This is the ongoing process of gathering and analyzing information about the City and its environment that continues throughout the audit.We will perform risk assessment procedures to gain an understanding of the • City,such as regulatory and other external factors,the nature of the City and its related operations, 1J objectives and strategies and the related operating risks that may result in a material misstatement of the financial statements; measurement and review of the City's financial performance; laws and regulations;and internal control,which includes the selection and application of accounting policies. Our procedures include inquiries, analytical procedures,observation, and inspection. J . Documentation of Information Technology Systems.This process includes a system overview and testing of the system for adherence to acceptable standards. Our approach to testing is documented in the chart below. 11111111111111111111111111=1111111111111111111111111111111) IT Enlilydevcl Controls and General Controls Evaluation t Pedorn%IT entlylevel controls assessment Determine My ne' Create work and testing. Document financially Ilnanclall Mticipated categorization programs Y Y 9 Summarize IT systems significant significant significant system p[ to tletermina (antic IcostID g 9 Y results. reliance? IT Issues. systems, systems? reliance? IT specialists &general needed. controls) ) Perforgenemaas controls '��• assessment Stopno and tasting. further IT / No *41,l,;< h controls work .; needed,Thls Is t`? extremely No unusual, u f ... , 1 Nonrollanca on IT Controls Plat IT Application Controls Testing,Manual Ilollionvard IT Document the process to Identify what Controls Testing,and Substnntive Testing entltylevel • changes/modifications are needed to testing of report accuracy,manual canto*,and to the The level of testing of IT application controls controls and audit programs when IT controls am not relied and Manual controls IS less when ICC general upon for a financially significant system. aro effective. controls. • During Phase I,we will document any significant risks that are identified, as well as our planned • response. Phase II—Account-level Controls Assessment and Testing Account level controls are the policies and procedures that address risks related to one particular type (or small group)of transactions or accounts. Once we have gained an understanding of your operations and controls at the account level, the engagement team will assess inherent risk and expected control risk by assertion.We will then corroborate the information we have collected and evaluate if controls were implemented as designed and that the design is appropriate. Corroboration must be accomplished • even when testing of controls will not be performed. Corroboration includes observation and obtaining evidence such as documented approvals and any other relevant information that may be retained to show that a control has been implemented as designed. Inquiry alone is not sufficient as a form of corroboration. Crowe Horwath. www.crowehorwath.com a MIAMI BEACH iI ©Copyright 2014 Crowe Hotwalh LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 36 The assertions identified in SAS 106,"Audit Evidence," may be classified in the following three broad categories: Assertions about classes of transactions and events for the period under audit; Assertions about account balances at the period-end; • Assertions about presentation and disclosure. Inherent risk is the susceptibility of a relevant assertion to a material misstatement, assuming there are no related controls. Control risk is the risk that a material misstatement could occur in a relevant • , assertion and will not be prevented or detected on a timely basis by the City's internal controls. When assessing inherent risk,the Crowe team will consider: The City and its environment External factors(for example,regulatory changes that may require major changes in operations); Complexity of underlying calculations; The City's experience with the transactions; Susceptibility to theft or fraud; Volume of transactions; V 3 Degree of judgment required and extent of estimates involved; Competence of client personnel; and • Prior-period misstatements. When assessing control risk, the Crowe team will consider: • Prior findings in the specific account; Results of grant audits performed by state or federal auditors; Record-keeping and accounting; Control procedures and environment; Materiality of financial impact; • Likelihood material amounts of cash or other assets could be misappropriated through fraud or theft; High public or political sensitivity to the subject matter; and Newness of the activity or changes in related conditions. Risk assessment procedures are performed to provide a basis for assessing the risk of material misstatement(combined assessment of inherent and control risk)for each relevant assertion. Then, in the next phase,we design further audit procedures tailored to address each relevant assertion based on the risks identified. Phase III—Performance of Audit Procedures During this phase, the following procedures will be completed: Determining overall responses to assessed risk of material misstatement for the financial statements as a whole and at the opinion unit level; Designing further audit procedures to respond to those risks; I Testing the operating effectiveness of controls; Performing substantive tests. , k, Crowe Horwath. www.crowehorwath.com �► MIAMI BEACH ©Copyright 2014 Crowe Ho,wath LLP 1 Proposal to Provide Auditing Services City of Miami Beach, Florida 37 Based on our understanding and assessment of Entity-level controls, account-level controls, and any fraud risk factors identified,we develop audit procedures and programs clearly linked to and responsive to the assessed risk of material misstatement at the relevant assertion level. Designing Procedures-In designing g procedures,we consider factors such as: The significance of the risk; The likelihood a material misstatement will occur; The characteristics of the class of transaction, account balance, or disclosure involved; The nature of the specific controls used and whether they are manual or automated; Whether we expect to obtain evidence to determine If controls are effective in preventing or detecting material misstatement. Determination of Sampling Techniques- Sample sizes of items to test that are representative of the population will be determined as early as possible to provide your staff with sufficient time to pull the requested documentation. We utilize guidelines established by auditing standards,which specify requirements for statistical and non-statistical sampling,to perform tests of,internal controls and substantive tests as part of the audit of your financial statements. Phase IV—Completion,Accumulation of Results, and Reporting After completing audit procedures,the engagement team will perform certain procedures necessary to conclude the audit. These procedures include final analytical procedures, performing a subsequent events review, evaluating attorney letter responses, assisting in preparing and/or reviewing the completed financial statements, and obtaining representations from management. During this phase,the auditor also accumulates all known and likely uncorrected misstatements, other than those that are trivial, and considers the nature and amount of the misstatements in relation to the affected opinion unit. The objective of the evaluation of uncorrected misstatements is to determine whether the financial statements taken as a whole and those of each opinion unit are free of material. misstatement. Uncorrected misstatements will be communicated to those charged with governance at the conclusion of the audit. Also during this phase, the engagement team will evaluate identified control deficiencies and determine whether these deficiencies, individually or in combination, are significant deficiencies or material weaknesses based upon both quantitative and qualitative factors. The significance of a control deficiency depends on the potential for a misstatement, not on whether a misstatement actually has occurred. Any significant deficiencies or material weaknesses must be communicated in writing to those charged with governance. The audit culminates in our report on your audited financial statements(and all other reports required by the RFP),which will include an opinion on the fair presentation of the basic financial statements as they i . conform to accounting principles generally accepted in the United States of America. As determined by requirements of"Government Auditing Standards"issued by the comptroller general of the United States(the"Yellow Book"), we will also include a report on compliance of your internal control structure with applicable laws and regulations based on the auditors' understanding of the control structure. Once the reports have been reviewed by management and are approved in final form,we will be available to meet with those charged with governance to review the reports and address questions. Auditing standards require the auditor's report not be dated earlier than the date on which the auditor has obtained sufficient appropriate audit evidence to support the opinion. 1 ' , \ Crowe Horwath. www.crowehorwath.com el MIAMI BEACH 1 ©Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 38 Among other things, sufficient appropriate audit evidence includes evidence that the audit documentation has been reviewed and the City's financial statements, including disclosures, have been prepared and the organization has asserted it has taken responsibility for the financial statements.We will discuss your acceptance procedures with you at the start of the engagement to determine who within the City assumes responsibility for the statements. This will ensure the engagement is properly • planned to provide sufficient time for review and acceptance procedures by your organization so final reports are available in advance of any and all reporting deadlines. Single Audit Approach The Crowe audit team has experience with more than 100 single audit clients and with several Federal and state cognizant agencies. During the audits,we have worked closely with a variety of Federal agencies including the departments of Agriculture, Education, Labor,Transportation, Health and Human Services, and Housing and Urban Development, and the Environmental Protection Agency. We will begin our Single Audit procedures and program specific grant procedures by developing a comprehensive understanding of laws and regulations that have a direct, material effect on the determination of amounts in your financial statements.This understanding will be based on: Identification of Federal/state award programs and total federal/state expenditures; Li Determination of major Federal award programs; Discussions with your staff; • Review of Board minutes, prior audits, and grant and contractual agreements; and Review of the relevant Federal program requirements from the"OMB Circular A-133 Compliance Supplement" issued by the Office of Management and Budget and the"Catalog of Federal Domestic Assistance." Crowe's Single Audit approach is based on guidance available in OMB Circular A-133 and Government Auditing Standards issued by the Comptroller General of the United States.When testing your major federal/state programs,we follow the suggested audit procedures included in the Compliance Supplement. For Federal or state programs for which guidance is not available,we will establish programs using applicable grant agreements and federal regulations. Key Elements of the Single Audit Process Crowe's audit team will work closely with your management team through the entire Single Audit process which includes the following elements: Phase I` Phase 1T Phase IL[ Phase IV Planning Fieldwork Review of Testing r Reporting Results /• ` f yA Crowe Horwath. www.crowehorwath.com m MIAMI BEACH ©Copyright 2014 Crowe Honwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 39 Phase I-Planning Gain an understanding of your major internal control systems and environment related to your major Federal/state grants; Review your administrative systems for Federal and other grant programs; • Assess risk related to Federal programs; Conduct a brainstorming session in accordance with SAS 99, including Federal and other grant • program administration; - Obtain the"Schedule of Expenditures of Federal Awards"(SEFA); Review your prior year SEFA and "Schedule of Findings and Questioned Costs"; Prepare an analysis of federal programs according to type (i.e.Type A or Type B Program); Determine major programs by type based on the audit risk analysis in the assessment performed; and • Determine the reliance to be placed on your systems of internal control for Federal and other grant programs through documentation and control testing. Phase I1-Fieldwork Review audit programs from the Compliance Supplement to determine the adequacy of the f programs; i_i • Review,and document the requirements of the programs to be tested; Revise programs as necessary based on program requirements; Interview staff, management, counsel, and officials based on planning; Determine sample selection methodology and the types of procedures that will be performed using selected transactions and documents; - Samples will be selected based on the chapter that was added to the 2009 edition of the GAS A- ' 133 Guide,titled,"Audit Sampling Considerations of Circular A-133 Compliance Audits"(Chapter)to address sampling in a single audit environment. The Chapter provides context•around when sampling may apply in a single audit; planning considerations;suggested minimum sample sizes (including sample size tables);sample selection methods; evaluation considerations for control deviations and compliance exceptions; and documentation elements relatng to sampling. • ,Select the transactions and documents for testing; • Perform the audit procedures as documented in the audit programs; Document testing results; and Evaluate the results of testing and determine areas that require further examination. • Phase Ill-Review of Testing Results Establish the review protocol for evaluation of results; Review potential findings and questioned costs and communicate with your management; Review compliance requirements and compare expected results to the exceptions noted to evaluate materiality; and - Draft a summary of the testing results. Phase IV-Reporting Review Federal, state,and other grant reporting requirements; Determine which internal control findings are significant deficiencies or material weaknesses; ° Prepare findings and draft the auditor's reports; - Review draft reports with your management; and • Evaluate management feedback and proposed corrective action, make revisions as necessary, and finalize the reports. Crowe Horwath. www.crowehorwath.com , CA MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 40 Audit Technology Tools Crowe utilizes several key technology systems to improve audit efficiency and effectiveness. Our use of technology in the audit process benefits you in the following ways: Efficiency. Your audit files are designed with'you in mind including planning forms, audit programs and procedures, and other unique aspects of the City. This promotes efficiency and allows for easy documentation, exchange and review of information. Communication. When you have a question, all client information is at our fingertips to access at any time no matter where we are located, even from prior year audits. Questions on workpapers or other issues can be accumulated and sent via e-mail or CiRT®in order to reduce the number of interruptions to your daily routine during audit fieldwork. I Technical Information. In addition to our extensive industry experience,the Accounting Research manager(ARM) system allows us to provide up-to-date technical information quickly. Accounting standards and support can be provided to management at any time during the audit process. Our auditing philosophy, commitment,attitude and technology effectively distinguish us with our clients and in the marketplace. IJ Accounting Research Manager Accounting Research Manager(ARM)is a comprehensive online database of expert-written analytical accounting, auditing, as well as primary source data. It includes the full suite of publications from the Governmental Accounting Standards Board, the GAO, Financial Accounting Standards Board, Emerging Issues Task Force, Securities and Exchange Commission, American Institute of Certified Public Accountants, and International Accounting Standards Board. In addition, interpretive analyses -are provided in many areas. wi9AeteuAOil0ReIWt Mlnlltrdl•.Itd%1 h•Q•n e•Paye• flMy• TOO•0. AKpounr/reg ,q Reuarah Manaaerd kms•CCH %1.Crowe Horw t)t _ e hn[tuwer 6ullnen Twanaro - we 0 Routee p I 0100041Vlo,ments Iru n1tonm41aka1al num.**0lt.lalOp moo NOM WW1/ m5 m0 0taknn4n0All14#Mewdnm11he00mlhot0.414elp uAlammed Pnu1/flow 1 MArAOI0lewoC0roni4 154..311,and ,E..w.my*frmMea41 L'OOI/M6 P FOoCAn0n10 CAUU1hr1 Sumwkedht,elehMnntl tarean.Wae0ra0 reaga., .,*0*va4W.BOMyt1 NAOCAIr000.OMP entlIFMl Olidmoe1 CAIc1a0M NIKm¢Ie*.*P0 UtteSlleo VtaftrMWeun offroonll'tmNl.mode TO D) ► 0Ceeet,00t 01aaMm4Mye 4LIIl tre:41WW1=u0*i1f 10KL0o10p eeU4l0we BWet11ye1W{MMYeraa01.......... nanminp yArnxoOeMampMwu Moat Outck[hda IIUWOooIttlU, ACc0uma0 1010 I.u010** mum C000OL9 100011EMNF I WA 1 IKVUN LAM ACCIKIIIf010 Aa0afM0AlrwMr4-nnvdaluaahnu.4004.nrxeMnneaObrmmnn4pa0,haJnOY000100.0,00 PUMA 0utntn414nr ton F.rnMI1[ MIP,cA10 ya0 fluiNtsCurdiut0,1 FU V.1110 ALM Comemrt10AlrrOpewit 4.1004Tt i. trp 01000w Nam SMICh AOnnwe 0.004 py,p erwanml4lelle0010lae1 114 .e0Auapre4 _ ._.__...._..__._ 0601 0400I06110+00 010101 aMenfokl oMmeanel Rb.. 500 S00 0agegelpitemints.n.ki..ropVgarianniergetaautb 480404.01 M 7 I NtWm'0*0.YRK I0301114W1 FM00010e t+ tame(04.10.0 xecomo^041 lAla1K FIa1046 0001 onr101ky OK a40ooe *u,e000 ? MOB 610.%1106, 4(0(1010 frty0900fl$tar4anrreunloe wwl ora;Rom rm.tIeu0.emtrwna 10011 ,$L40Qe1y Iplaror0101W*allQj eamo!04 10% \ RnnnW0-Baae1Wlnulkl 0000 K00004040000011Tnat 000 0e090rick4U1040 umrll0MLOln comma% IIM4.alappra4al elm. CIMI*Ifeks VIT6af1ALCW1If10[5 L41nbr1 Wr40441A4 ft4Ilenitm0e110t1 Dti20EN0! r0J4fOM11SM/1nO*40001[6 'TO9 COW Mao A000101041014 *Yarllt4m_ a ®Int.nd i4INalr4ee4An 01f 47103% 4:\ Crowe Horvath. www.crowehorwath.com [�A MIAMI BEACH Copyright 2014 Crowe Horwath LLP I � Proposal to Provide Auditing Services City of Miami Beach, Florida 41 Automated Workpapers Integration of sophisticated, electronic engagement management capability directly into our lotus notes- based Automated Workpapers (AWP)documentation system and organization of audit documentation by business process will result in better engagement management and communications with you. Our audit workpapers are fully electronic using our AWP system: AWP significantly enhances the efficiency of the audit process and facilitates staff coordination and supervision regardless of geography. AWP ' • also allows us the ability to query prior year audit databases for client information. i CiRT® In most engagements, a significant amount of time is spent gathering key documents, reports,and reconciliations; preparing certain schedules and analyses;and responding to various questionnaires.To • meet the challenges of managing this complex information-gathering process, Crowe has developed a secure web-based repository, the CiRT®solution,which improves communication and effectively • organizes this critical information. CiRT®benefits include: Saves time; • Facilitates efficient communication; I • Promotes task delegation and prioritization; Reduces duplicate requests and minimizes disruptions;and • Enables efficient project management. With this innovative tool, clients can manage workflow through a centralized individual who can assign and delegate requests to other company personnel;track project activity by assigned individual, due date, and status with a user friendly, easy-to-use, dashboard interface; quickly view and monitor project progress with an at-a-glance report feature; and access how-to videos and training materials through the enhanced learning center. Through a single portal, CiRT®allows you to gain visibility into multiple projects. Originally designed to • streamline complex audit processes, CiRT®is now adapted for Crowe tax, risk management, and performance projects.That means the City can expect fewer duplicative requests for information and improved consistency and efficiency.We view CiRT®as a competitive advantage and intend to continue innovating, remaining in the forefront of process automation. Crowe Warmxbn Request Tracev(Caie) n•Muwa 01 ®cm swot I Peal abrnanae I I • /16vU60ror•,t,;; V IIJ cecrrr",S a cn.. sp ordaath I • Ipd C0mpadNb-1)JJIG01t 0 �o.,.r.» NntY}I>lyp f77.1 • ij eeu•na.fovnh ,�Wn•Wn rv,n hx.rr•w.,nh�u..tY•..weoPTr x...:'61 ®•'-..r...lu-,rae.,rvselamr.,w lrN• tel i� �.•.,•':;,.,, 6�^l has e1C9'J(aeGa.lo.ncr itoontuK,LENu0ooe6rllln.., O••�••n.•,•....., n a(w....•... �•,,,,,—� eImportant INtosandAlas Rem to anw•Bat WIT Is oall•suspwlsd en Nxnn Exelanr,sulw»Bx end Bx Phan as Nl Iwm •' .d .• ca N • TocBNcsl 9PoutcaHm M4 blewtn rnpsdnah ,. w ,w. MilarA J r Pr a1Llh1 nNewa wWCI Vr•»P n Roq.51 Status I Ii w..1 A — eeeaa.suytp- at I.:•~II• •1 •: ,roma r' 'b.•nw • rmraou eaeeh.oeartw. ...• ...., ,. ..,n»r. f _ ■ C��nw r......,.•, n•e 3".,.rrr...•,........r,............r.«M.'•5".^..^.w.'..«rrw«»..•.,. • vtao WOrkln9 wlUr ,.. i._@.=Y.a..�w..�".y9SY..___ — Documonlollon Rdquo5lB o i aJ' icyY, n d1:'155rnSGJa o4i3cn•nnr:I:iCcn l a r s N ...._........ .. a ...r........ .w .......w•-••..w..,. xJrhMhwirinWlalx.+.N�bP� O I .......e.• Ole. K dB ." , u.w o .•unrwrrwu» ,r•u•-...wn•..Vn,. ,•••w.r.- +]1 j �;�`•, Crowe Horwath. www.crowehorwath.com a MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 42 Monarch Monarch is a report extraction utility which allows the auditor to selectively convert the fields contained within standard business application reports into data files for further analysis. Audit Control Language ACL (Audit Control Language) is a data manipulation utility which allows the auditor to interpret data from virtually any type of data file format for the following purposes: footing,sorting, summarizing, selecting, extracting, re-calculating, sampling, matching, merging, re-aging, and detecting gaps/duplicates. These techniques may include testing the accuracy,completeness and integrity of individual accounts • or transactions. Or,they may be used to address the need to perform ad-hoc and perhaps exhaustive • application of differing criteria to analyze the operational quality of assets represented by such data. Because of the tremendous speed and storage capabilities of such tools, our financial auditors will be able to electronically examine a much higher percentage of original data than if left to purely manual testing methods. In summary, with the use of Monarch and ACL, our audit procedures can be far more effective in providing value-added information regarding your business applications. 2. Organization of the audit team and titles of team members and approximate amount of time each such class of member will spend on the audit. Organization of Engagement Team • An overview of how we plan to structure your engagement team is as follows: • G MIAMIREACH Kevin Smith John Weber National Government Audit Engagement Partner Partner-°Subject.Matter Specialist Aazan St.Rose Michelle Blackstock • Audit Senior Manager Audit Senior Manager John Sht.tmaker Michael Rozelle • Audit Senior Staff Audit Senior Staff Additional Local Office Additional.Local Office Engagement Staff As Needed Engagement Staff AS Needed Resource Team • .i.:,ih.,.•i li It d I •,:it:i.:1;4:(C:I -I if I;U-Ii''-:r t 'i' :(!n-t�t ra � • „ •i-'r• . . \ Crowe Horvath. www,crowehorwath.com G MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP li ,I - Proposal to Provide Auditing Services City of Miami Beach, Florida 43 Hours by Level Below we have provided an estimate of audit hours by staff level. Estimated Hours ` _..cur•.`n.r.:r.�:iti:ss.;natea;.iw:c'1-::.J::.L:t'•u:n•..ls..xJv:':'�.X1.uviCC._h'^^:_. . Partner 172 Senior Manager I' • •.34q' • ..• Manager 100 Senior-Staff I ... ;650..' Staff 638 The above hours do not included estimated first year hours associated with a new client. We anticipate the first year hours to approximate 150. Those hours will not be billed to the City. 3. The names of the partner and manager that will be assigned to thislengagement and the extent of their involvement with this engagement. j Partner John Weber, Kevin Smith and Craig Sullivan will serve as Partners for the City's engagement. 1 : Mr.Weber will serve as the Engagement Partner and is responsible for the engagement as well as issuance of reports. He has over twenty two three years of experience focusing his entire career in providing financial and compliance audits and consulting servicesto public sector clients including government. Mr. Smith will serve as the Quality Control Audit Partner for this project. He has approximately twenty • years of experience providing both advisory-and financial statement and compliance audits primarily to governmental. - Mr. Sullivan will serve as the IT Risk Partner and will be available for IT Consulting as needed. He has 30 years' experience in accounting and technology consulting related to Risk Management and Information Technology Controls. Mr. Sullivan is responsible for the thought leadership and technical activities of the Technology Risk activities of Crowe's Risk Consulting Services business unit on a Firm- wide basis. Senior Manager Aazan St. Rose and Michelle Blackstock will serve as Audit Senior Managers for the City's engagement. They will provide primary support and oversee all day-to-day activities. Mr. St. Rose has over eight years'experience servicing governmental clients with complex accounting issues, including issues involving complex financial instruments, derivatives and hedging, variable interest entities and leases. Ms. Blackstock has twenty five years of experience in providing assurance services to public sector clients including government. She has prior work experience in both international and local public accounting firms Manager Steven Kocaj will serve as the IT Risk Manager for the City's engagement. He has over four years of experience providing consulting services and performing attestation audits for information systems. Mr. Kocaj focuses on conducting Sarbanes-Oxley(SOX)compliance for financial statement audits, internal • audits for,SOX, risk assessments,and conducting FFIEC reviews for financial institutions. Crowe Horwath. www.crowehorwath.com GMIAMI BEACH ©Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach,Florida 44 4. The proposed schedule for the audit Timing 'We believe a well-planned audit approach is,critical to the success of any engagement. Crowe focuses significant efforts In the planning stages of the audit to work closely with management staff in assessing • risk and developing the overall approach. In developing our plan,we will start by examining the City's budget,organizational charts, City documentation of controls and process manuals and financial other • financial information systems. Upon engagement,we will conduct a planning session to fully develop an audit calendar that meets the needs of the City. We will agree upon all due dates and timelines with you during the planning meeting. Our goals for the engagement are timely completion and no surprises for the City. We do not have concerns with meeting this deadline assuming a level of preparedness by the City. We are available to conduct your interim and year-end fieldwork at the times you desire, and commit to completing the draft and final versions of your audited financial statements by your required due dates. The chart below depicts a typical audit timeframe. For the fiscal year 2014 audit Phase 1 and 2 will take place in November. RDA, PSF,VCA, GS, SNP, CT and BBC will be issued by the dates specified in the RFP. � Audit Phase and Tasks Aug Sept Oct Nov Dec ® Feb Phase:1•.. Planning discussions with management, understanding the entity and environment, 1 develop audit plan • ; -- I Request City assistance&documentation needs, develop understanding of Internal ' : controls&system, perform information technology evaluation&follow-up Phase ..- Conduct tests of internal control,conduct risk : • assessments • Conduct preliminary single audit testing, • • review and finalize audit plan by August 31 Phase:3' • Perform analytical procedures I Perform substantive tests of account • • balances • Perform testing of transaction classes Single audit procedures • {{ Review subsequent events,contingencies -and commitments •..• i . - Review preliminary results with financial managements • 1 i '� �► MIAMI BEACH 4\ Crowe Horwath. ' www.crowehorwath.com v� ©Copyright 2014 Crowe Iiorwath LLP tl Proposal to Provide Auditing Services City of Miami Beach, Florida 45 Audit Phase and Tasks Aug Sept Oct Nov Dec 1T Feb ' Reporting Phase: ' • • • • . • .i Perform final analytical procedures • . Review the financial statements • Hold audit exit)conference with financial management • i Issue opinion letter on the CAFR—by 3/31 • • . issue internal.control&compliance letter—by .:. 3/31 Issue single audit report—by 3/31 Issue management letter—by 3/31 Report on results of the audit to the audit committee and/or`board • L' 5.Any anticipated use and planned reliance, if any, on the internal audit staff of the City. Client Assistance • Our audit approach assumes that representatives of the City staff will fully participate in the planning, fieldwork, and completion of the audit process. Full participation means that the City will provide the resources necessary to allow Crowe to complete the audit in a timely and effective manner while meeting your deadlines. We anticipate that the management and staff of the City will participate and assist in the following areas: Participating in audit planning sessions to provide perspective on risk areas in the audit; Assisting in the documentation of internal controls over operating cycles; Encouraging the free exchange of information between the City staff and Crowe staff; • Encouraging the integration of audit procedures into your monthly closing process; • Committing to a year round audit approach and interaction with the auditors; Providing open access to the City management,Audit Committee and City Commission • representatives throughout the year; Reconciliation of material accounts and analysis of higher risk audit cycles to provide underlying source documentation to support your representations; Timely responses to audit resolution issues; - Providing all information for draft financials and footnote disclosures prior to commencing year end fieldwork. Providing GASB 34 conversion to auditors last week of fieldwork and providing CAFR • level account groupings, all data for footnotes, provide all data for statistical section, provide Management's Discussion &Analysis and Transmittal letter for CAFR. Our proposed fees take in to consideration the work completed by the City to prepare for the audit and your involvement throughout the audit process. At this time we do not have any planned use or reliance on the internal audit staff of the City. We will • review the audits completed by internal audit to assist with our risk assessment and development of our audit plan. Crowe is open to utilizing internal audit staff if all independence and professional standards and requirements have been met. al Crowe Horwath. www.crowehorwath.com i'V1IAMI BEACH ®Copyright 2014 Crowe Horwath LLP i Proposal to Provide Auditing Services City of Miami Beach,Florida 46 Cost Proposal Our goal in setting fees is simple: provide long-term, cost-effective pricing for our clients. Before reviewing the fees listed, you should understand several key points about our fee commitment. It is our firm's philosophy that communication throughout the year with management in order to reach a consensus on large or unusual transactions and implementation of new audit standards is integral to the engagement's success.We do not bill for a reasonable amount of such advice and counsel during the year. Our fee structure is designed to ensure that our clients are not reluctant to call us when questions arise. Routine telephone calls are considered part of the basic services and do not involve additional fees. If a question results in significant research or additional work or if we are requested to perform a consulting project, such effort is billed separately. We will, of course, provide you with an estimate of fees for such services and obtain management approval before proceeding. We will not surprise you with additional billings that have not been agreed to by all parties in advance. Fee Assumptions It is our firm's philosophy that communication throughout the year with management on routine questions is integral to the audit's success.We do not bill for a reasonable amount of such advice and counsel during the year. In addition,the significance of our Public Sector Series will continually prompt management to think about emerging issues that we hope result in robust conversations about current or planned activities. CPE earned from Crowe's Public Sector Series is free of charge. We will present an engagement letter annually to reconfirm our engagement terms.This fee takes into account the agreed-upon level of preparation and assistance from your personnel. We will advise management should this not be provided or should any other circumstances arise that may cause our time to exceed this estimate. If there is a significant change in your organizational structure or size due to acquisitions or other events,we reserve the right to revise our fees. Circumstances may arise under which we must perform additional work and,thus,require additional billings for our services and which may delay the issuance of our report on the financial statements. Examples of such circumstances include, but are not limited to: Changing audit or tax requirements New professional standards or regulatory requirements New accounting standards or interpretations Work due to the identification of, and management's correction of,fraud,irregularities,errors or inappropriate application of accounting pronouncements Erroneous or incomplete accounting records Additional Major Programs—With 2013 being the base year Evidence of material weaknesses or significant deficiencies in internal controls New or unusual transactions Significant growth which adds to audit complexities Failure of your staff to prepare information in a timely manner Rescheduling of audit fieldwork without reasonable notice . Significant changes in operations Crowe Horwatl. www.crowehorwath.com a' MIAMI BEACH O Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 47 To the extent that the amount of time required to provide the services described in this proposal increases due to such changes or that additional time is required to complete any new tasks required by such changes,we reserve the right to adjust our fees appropriately. We will present you with our • estimate of any fee revisions before beginning our work in the impacted area(s). The City will not receive"surprise"or unexpected billings from Crowe. Our fee quote does not include any work that is performed outside of the services listed above,or other • special projects that may be requested. Fees related any additional work will be discussed prior to commencement of the project,and will be based on actual hours worked at current billing rates of individuals providing the services. Cost Proposal Form As required,we have provided a completed Cost Proposal Form on the following pages. Due to varying file types, these pages will not display on the Table of Contents. a � J w . z ; r . %X Crowe Horvath. www.crowehorwath.com trA MIAMI BEACH O Copyright 2014 Crowe Horwath LLP APPENDIX A PROPOSAL TENDER FORM Failure to submit Section 5, Proposal Tender Form, in its entirety and fully executed by the deadline established for the receipt of proposals'will result in proposal being deemed non-responsive and being rejected. Proposer affirms that the prices stated on the proposal price form below represents the entire cost of the items in full accordance with the requirements of this RFP, inclusive of its terms, conditions, specifications and other requirements stated herein, and that no claim will be made on account of any increase in wage scales, material prices, delivery delays, taxes, insurance, cost indexes or any other unless a cost escalation provision is allowed herein and has been exercised by the City Manager in advance.-The Cost Proposal Form (Section 5)shall be completed mechanically or, if manually, in ink. Proposal Tender Forms (Section 5) completed in pencil shall be deemed non-responsive. All corrections on the Proposal Tender Form (Section 5)shall be initialed, GROUP I.Auditing Services- Prices submitted in proposal package are to be held for the five(5) year contract period. A ; Auditing Services Please provide fee on an annual basis for.each + j services listed below: 2014 2015 2016 2017 \ 2018 ill 1 Audit of City's Basic Financial Statement(CAFR) $107,000 $107,000 $110,200 $113,500 $116,900 3 2 OMB-A-133 Single Audits 22,000 22,000 22,600 23,200 23,900 is 3 Management Letter in Accordance with the Rules of the Auditor General of the State of Florida 1,000 1,000 1,000 1,000 1,000 4 Miami Beach Redevelopment Agency(RDA) 19,000 19,000 19,500 20,100 20,700 i I 5 Miami Beach Parking Systems Funds (PSF) 19,000 19,000 19,500 20,100 20,700 6 Miami Beach Visitor and Convention Authority (VCA) 17,000 - 17,000 17,500 18,000 18,500 Miami Beach Convention Center as Managed by 7 Global Spectrum(GS) 17,000 17,000 17,500 18,000 18,500 8 Safe Neighborhood Parks Single Audit(SNP) 9,000 V 9,000 9,200 9,500 9,800 9 Children's Trust(CT) 9,000 9,000 9,200 9,500 9,800 10 Building Better Communities (BBC) 8,000 8,000 8,200 8,500 8,800 . $ $228,000 $ $228,000 $ $234,400 $ $241,400 $ $248,600 RFP 2014-2761R Auditing Services 33 B 1 GROUP II. Additional Services The City reserves the right to negotiate rates for additional services. Bidder's AfflrlYiation • Company: Crowe Horwath LLP • Authorized Representative: John C.Weber,Partner Address: 401 East Las Olas Boulevard,Suite 1100,Fort Lauderdale,Florida 33301-4230 Telephone:813.209.2585 • Email:john.weber@crowehorwath. ;'m Authorized Representative's Signature: G:e%Z-fiv'� I ' RFP 2014-276-IR Auditing Services 34 Proposal to Provide Auditing Services City of Miami Beach,Florida 48 Appendix A: Exceptions Crowe has reviewed the RFP and proposes changes to the Indemnification and Insurance provisions. The indemnification changes reflect agreed to terms related to a Professional Services Agreement between Croweand the City dated July 25,2012. Indemnification Consultant agrees to indemnify and hold harmless the City of Miami Beach and its officers, employees, agents, and contractors,from and against any and all actions (whether at law or in equity), claims, --= liabilities, losses, and expenses, including, but not limited to, attorneys'fees and costs,for personal or • bodily injury,wrongful death, loss of or damage of property,which may arise or be alleged to have arisen directly and proximately from the negligent acts or willful misconduct of the Consultant, its officers, employees, agents, contractors, or any other person or entity acting under Consultant's control or supervision during Consultant's performance of the Services pursuant to this Agreement. To that extent,the Consultant shall pay all such claims and losses and shall pay all such costs and judgments which may issue from any lawsuit arising from such claims and losses, and shall pay all costs and attorneys'fees expended by the City in the defense of such claims and losses, including appeals. Insurance The provider shall furnish to the Human Resources Department, Risk Management Division, City of Miami Beach, 1700 Convention Center Drive, 3rd Floor, Miami Beach, Florida 33139,Certificate(s)of Insurance which.indicate that insurance coverage has been obtained which meets the requirements as outlined below: A.Worker's Compensation and Employer's,Liability Insurance for all employees of the provider as• required by Florida Statute 440. B. Commercial General Liability on•a-comprehensive basis in an amount not less than $1,000,000 •combined single limit per occurrence and$2,000,000 in the aggregate,for bodily injury and property damage. City of Miami Beach must be shown as an additional insured with respect to this coverage. C. Professional Liability Insurance in an amount not less than$2,000,000. The Commercial General Liability insurance coverage above must include a waiver of subrogation in favor of the City. The insurance coverage required shall include those classifications, as listed in standard liability insurance manuals,which most nearly reflect the operations of the provider. All insurance policies required above shall be issued by companies authorized to do business under the laws of the State of Florida,with the following qualifications: The company must be rated no less than "B"as to management, and no less than"Class V" as to financial strength, by the latest edition of Best's Insurance Guide, published by A.M. Best Company, Oldwick, New Jersey, or its equivalent, subject to the approval of the City Risk Management Division. • or The company must hold a valid Florida Certificate of Authority as shown in the latest"List of All Insurance Companies Authorized or Approved to Do Business in Florida" issued by the State of Florida Department of Insurance and are members of the Florida Guaranty Fund. Contractor shall endeavor to provide not less than thirty(30) days advance notice to the City in the event of modification or change in insurance unless comparable coverage is promptly secured. j\ Crowe Horwath. www.crowehorwath.com (4194MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP • Proposal to Provide Auditing Services City of Miami Beach, Florida 49 Appendix B: Governs. ent Advantage Series Calendar We have provided our most recent Government Advantage Series Calendar of events on the following pages. Due to varying file types, these pages will not display.on the Table of Contents. F ' . • LI • ( i A • • r J . .t,;,\ Crowe HOI'V1lafiF1. www,crowehorwath.com , MIAMI BEACH 1 ©Copyright 2014 Crowe Horwath LLP 11 • • i - A Crowe Horvath® I 3 �t- -xr .w, Are You Facinc Challences in Managinc Your Agency? Knowledge, Insights, Action — Summer 2014 If you are looking for new ways to manage risks, achieve transparency, meet compliance requirements, and address trends, then.the Crowe Horwath LLP Government Advantage Series can help provide you with the knowledge and insights to take action, August 2014 I Aug. Cybersecurity Risk Management Webinar 13 Presenters:Raj Chaudhary and Jared Hamilton of Crowe Noon-1 p.m. Eastern • Aug. GASB 67 and 68 Webinar Part Three; "The Financials: Entries That Will Be Needed 19 and Changes to the Statements for GASB 67 and 68" Crowe presenters will provide a detailed overview of the GASB 67 and 68 standards and Identify entries that Noon-1 p.m. will be needed,provide examples of those entries,and review the changes to the statements,footnotes,and Eastern required supplementary information(RSI). Presenters also will provide an example of an updated statement, footnote, and RSI to show the"before and after"effect. September 2014 Sept. Christine Torres of Crowe will be attending the Illinois Government Finance Officers Association(IGFOA) .7_9 annual conference. - sept. Association of School Business Officials International (ASBO) Accounting, Auditing, 19-22 and Budget Committee Christine Torres and Bert Nuehring of Crowe will be presenting. October 2014 Oct. Sustainable Risk Management Webinar 15 Presenters:Gregg Anderson and Marc Dominus of Crowe Noon-1 p.m. Eastern Audit I Tax I Advisory I Risk I Performance www.crowehorwath.com • Crowe Horwath® yS y Are You Facing Challenges in Manacinc Your Agency? ,rl i �Sns� Knowledge, Insights, Action - Summer 2014 ; :s x�` .. ;,` Wit _._ _ _ ._ a- November 2014 Nov. GASB 67 and 68 Webinar Part Five; "Audit Time-A Guide to Preparing for a 18 GASB 67 and 68 Audit" • Crowe presenters will provide guidelines about important points you should know before the auditors walk Noon-1 p.m. through the door. Eastern Li Nov. PCI Standards Update Webinar - 1 g Presenters:Angie Hipsher and Craig Sullivan of Crowe Noon-1 p.m. Eastern December 2014 Dec. GASB 67 and 68 Webinar Part Six 9 The final step of the GASB 67 and 68 implementation process is explaining it to the governing body and other users of the financial statements. In this webinar,Crowe presenters will summarize a suggested presentation I I Noon-1 p.m. with important points—geared toward the governing body and designed to provide the greatest value in a Eastern limited period of time—to highlight the new statements. Recent Happenings J u GASB 67 and 68 Webinar Part One; "Implementation Guidance for GASB 67" GASB 67 and 68 Webinar Part Two; "Unlocking the Mystery Around Plan Assumptions" Webinar: Federal Grants and Contracts: Understanding and Mitigating Fraud Risk Research Report: Powering the Engine of Economic Development View an issue brief of the report at www.crowehorwath.com/governingsurvey. To register for Crowe webinars,events, and e-communications, please visit www.crowehorwath.com/member-login.aspx. To view all that's available in the Crowe Government Advantage Series, please visit www.crowehorwath.com/ga. Audit I Tax Advisory I Risk Performance The Unique Alternative to the Big Four® Crowe Horwath LLP Is an Independent member of Crowe Horwath International,a Swiss verein,Each member firm of Crowe Horwath International Is a separate and Independent legal entity. Crowe Horwath LLP and Its affiliates are not responsible or table for any acts or omissions of Crowe Horwath international or any other member of Crowe Horwath international and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath international member.Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP,which is not a member of Crowe Horwath international.0 2014 Crowe Horwath LLP SOV16008A Proposal to Provide Auditing Services City of Miami Beach,Florida 50 Appendix C: Peer Review Report We have provided our two(2)most recent peer review reports on the following pages. Due to varying file types, these pages will not display on the Table of Contents. • J is II : . 3 ' • i •1 , I . ' Crowe Horvvath. www.crowehorwath.com D MIAMI BEACH 0 Copyright 2014 Crowe Horwath LLP `% Cherry Bekaert"P no CPAs&Advisors System Review Report To the Partners of Crowe Horwath LLP and the National Peer Review Committee We have reviewed the system of quality control for the accounting and auditing practice of Crowe Horwath LLP (the firm) applicable to non-SEC issuers in effect for the year ended March 31, 2013. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the ' ' ' Peer Review Board of the American Institute of Certified Public Accountants. As a part of our peer review, we considered reviews by regulatory entities, if applicable, in determining the nature and extent of our procedures. The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in'all • material respects. Our responsibility is to express an opinion on the design of the system of quality control and the firm's compliance therewith based on our review. The nature, objectives, scope, limitations of, and the —.procedures performed in a System Review are described in the standards at www.aicpa.org/prsummary. ' L.i As required by the standards, engagements selected for review included engagements performed under the Government Auditing Standards, audits of employee benefit plans, audits performed under FDICIA, audits of 1 carrying broker-dealers, and examinations of service organizations [Service Organizations Control (SOC) 1 engagements]. In our opinion, the system of quality control for the accounting and auditing practice of Crowe Horwath LLP applicable to non-SEC issuers In effect for the year ended March 31, 2013, has been suitably designed and complied with to provide the firm with reasonable assurance of'performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with deficiency(ies) or fail. Crowe Horwath LLP has received a peer review rating of pass. LLP Cherry Bekaert LLP September 24, 2013 r- \ 1 American Institute of CPAs Peer Review Program 220 Leigh Farm Road Administered byte National Peer Review Committee Durham, NC 27707-8110 December 12,2013 • Charles M Allen, CPA Crowe Horwath LLP One Mid America Plaza, Suite 700 Oakbrook Terrace,IL 60181 Li Dear Mr.Allen: • It is my pleasure to notify you that on December 12,2013 the National Peer Review Committee accepted the report on the most recent system peer review of your firm.The due date for your next review is September 30,2016.This is the date by which all review documents should be completed and submitted to the administering entity. As you know,the report had a peer review rating of pass. The Committee asked me to convey its congratulations to the firm. • Sincerely, Betty Jo Charles Chair,National Peer Review Committee nprc@aicpa.org 919 402-4502 cc: Scot D Ivey, Samuel E Johnson. Firm Number: 10014904 Review Number: 350003 • • • 0 , T: 919,402,4502 I F: 919.402,4876 I aicpaarg \`0 � �� .�• / .��%�/moi/�� WWW.MOSSADAMS.COM MOSS= DAMS Cer(Ificd:WublicAec6wiFanfa I t3USIng3s•;Cbrisitilaiil$ . I ,. System Review Report , • To the Partners of Crowe Horwath LLP and the National Peer Review Committee We have reviewed the system of quality control for the accounting and auditing practice of Crowe Horwath LLP(the firm)applicable to non SEC issuers in effect for the year ended June 30,,2010.Our • • peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public • Accountants.The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects.Our responsibility is to express an opinion on the design of the system of quality control and the firm's compliance therewith based on our review.The nature,objectives,scope,limitations of,and the procedures performed in a System I LI Review are described in the standards at www aicpa.ora/or.wnmary. , • • • As required by the standards,engagements selected for review included engagements performed • under the Government Auditing Standards,audits of employee benefit plans,and audits performed under FDICIA.. In our opinion,the system of quality control for the accounting and auditing practice of Crowe Horwath LLP applicable.to non SEC issuers in effect for the year ended June 30,2010,has been suitably designed and complied with to provide the firm with reasonable assurance of performing •• • and reporting in conformity with applicable professional standards in all material respects.Firms can receive a rating of pass,pass with deficiency(les)or fail.Crowe Horwath LLP has received a peer review rating of pass. p November 5,2010 . . • • N taxi ty. ° MEMBER•° GLOBAL ALLIANCE OF INOEPENOENT FIRMS (AICPA)5 AICPA Peer Review Program Administered by the National Peer Review Committee s • December 17, 2010 • Charles Allen,CPA Crowe Horwath LLP One Mid America P1 Ste 700 Oakbrook Terrace,IL 60181 Dear Mr.Allen: ! : It is my pleasure to notify you that on December 9, 2010, the National Peer Review Committee accepted the report on the most recent system peer review of your firm. The due date for your next review is December 31, 2013. This is the date by which all review documents should be completed and submitted to the administering entity. As you know,the report had a peer review rating of pass.The Committee asked me to convey its • congratulations to the firm. Sincerely, 'is—96 atheL • Betty Jo Charles Chair—National PRC cc:Jeff Brown,CPA Firm Number: 10014904 Review Number:311547 . American Institute of Certified Public Accountants 220 Leigh Farm Road,Durham,NC 27707•(919)402-4500 •fax(919)402-4505•www.alcpa.org ISO Certified America Counts on CPAs" Proposal to Provide Auditing Services City of Miami Beach, Florida 51 1 . Appendix D: Resumes We have provided resumes for the proposed engagement team on the following pages. is Li 1 J • 1 • ' 1 • • JA Crowe Horwath. www.crowehorwath.com �' MIAMI BEACH ©Copyright 2014 Crowe Horweth LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 52 John C. Weber, CPA — Partner Professional Summary Mr. Weber has over twenty three years of experience focusing his entire career in providing assurance and consulting services to public sector clients including government, college and university and non- profit organizations. Mr.Weber has also served as Crowe's national partner in charge of the governmental audit practice. Experience Audit Experience Municipal County t Village of Bridgeview Broward County City of Burbank • Pinellas County City of DesPlaines • Will County Village of Elmwood Park Special Districts City of Fort Lauderdale Chicago Transit Authority Village of Glendale Heights Children's Board of Hillsborough County Village of Hillside • Dallas Area Rapid Transit • Village of Hoffman Estates • Lakeland Area Mass Transit District City of Lakeland • Metra Village of Franklin Park Metropolitan Water Reclamation District of • : Village of Forest Park Greater Chicago Village of Rantoul : Miami Dade Transit Village of River Grove • Northern Indiana Commuter Transportation City of Tampa District • North Texas Tollway Authority State : _Pace (Suburban Bus Division of the Regional : Florida State Board of Administration Transit Authority) Illinois Office of the Auditor General Illinois Department of Corrections Special Special Inspector General for Afghanistan Illinois Department of Revenue Reconstruction Illinois Environmental Protection Agency Illinois State Lottery Illinois State Treasurer's Office Illinois Student Assistance Commission Illinois Tollway Authority • Indiana State Lottery Commission : Kentucky Lottery Corporation Crowe Horwath. www.crowehorwath.com MIAMI BEACH ©Copyright 2014 Crowe Horvath LLP f Proposal to Provide Auditing Services City of Miami Beach, Florida 53 Consulting Engagements . Accounting/Operational Consulting Consulting Clients Audit Preparation Broward County, Florida-Sheriff's Office • Capital Budgeting • Chicago Park District Comprehensive Annual Financial Report • City of Boulder, Colorado Preparation : City of Coral Springs, Florida .- • Departmental Costing Analysis City of Dayton, Ohio • Internal Audit Department Outsourcing City of Fort Worth,Texas Performance Audits • City of Miami Beach, Florida Business Process Reengineering City of Tarpon Springs, Florida Internal Control Assessments and Indiana Bureau of Motor Vehicles Implementation Marion County, Indiana-Sheriff's Office Departmental Re-Structuring Metropolitan Water Reclamation District of Policy and Procedure Manual Development Greater Chicago '• Transition Auditing iv1 Publications and Speaking Engagements Mr.Weberhas a number of publications including: OMB Releases New Compliance and Reporting Information for Recovery Act Spending, Government Advantage Update,Aug. 17, 2009 Preventing Deficiencies for Single Audits, Not-for-Profit Advantage,Winter 2007 Avoiding Pitfalls in Single Audits, Government Advantage, Fall/Winter 2007 Forming an Audit Committee:A Matter of Dollars and(Good) Sense, Government Advantage, Winter 2006 Licenses and Certifications • Certified Public Accountant(CPA) I Florida, Illinois Professional Affiliations American Institute of Certified Public Accountants (AICPA) I Former Firm Representative to the Government Audit Quality Center • Florida Institute of Certified Public Accountants I Member • : Illinois CPA Society I Former Member, Ethics Committee Illinois Government Finance Officers Association I Member • United States Comptroller General Advisory Council on Government Auditing Standards I Member Education : Bachelor of Science in Accounting • Elmhurst College • Elmhurst, Illinois A 64 ��j �.• Crowe Horvath. www.crowehorwath.com MIAMI BEAC H ©Copyright 2014 Crowe Horvath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 54 • Kevin W. Smith, CPA - Partner Professional Summary Mr. Smith is a partner in Crowe's Dallas/Fort Worth office; he joined Crowe in August 2009. He has approximately twenty years of experience providing both advisory and financial statement and • compliance audits primarily to governmental, not-for-profit, and the higher education industry receiving • federal awards. Prior to joining Crowe, Mr. Smith was a partner with KPMG LLP,where he served as one that firm's designated A-133 concurring review partners. In addition, Mr. Smith was recently appointed as a member to the AICPA's State&Local Government Expert Panel. Experience Audit Experience . i Municipal Special Districts City of Arlington Dallas Area Rapid Transit City of Carrollton Dallas Fort Worth International Airport City of Cedar Hill . Employee Retirement Fund of Dallas i , City of Cleburne Houston Housing Finance Corporation City of Dallas Houston Metro Transportation Authority • City of Denton ; North Texas Tollway Authority . City of Frisco ti .• The Navajo Nation City of Midland Work Source for Dallas County City of Plano • : City of San Antonio Dallas County State California State Teachers Retirement System State of Arkansas—State Wide CAFR State of Arkansas—Division of Legislative Audit State of Illinois—State Wide Single Audit— Various Agencies AA Crowe Horvath. www.crowehorwath.com el MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 55 • Consulting Engagements AccountinglOperational Consulting Consulting Clients • Audit Preparation City of Arlington/Dallas Cowboys • Subrecipient Monitoring • City of Corpus Christi • Comprehensive Annual Financial Report City of Dallas Preparation ; City of Fort Worth • GASB 34 Implementation City of Frisco Departmental Costing Analysis a . City of Irving • Operational, Procedural and Performance City of Plano Audits Business Process Reengineering Dallas Convention and Visitors Bureau Internal Control Assessments ISO New England • Departmental Re-Structuring New York Independent System Operator Policy and Procedure Manual Development • North Central Texas Council of Government Transition Auditing : North Texas Tollway Authority l Oklahoma State Department of Information Technology • . System Needs Analysis/System Transportation Implementation State of Arizona Auditor General—Rio Nuevo Fund Structure and Chart of Accounts Multi-Purpose Facilities District State of Arkansas—Arkansas Lottery Commission • State of South Carolina—Office of the Comptroller General • Publications and Speaking Engagements Publications: "Mitigate Compliance risks Through Best Practices in Grants Management." Smith, Kevin W. and - • Eric J. Russell. Journal of the National Grants Management Association. Winter 2011, Volume 19, Number 2. Speaking Engagements: Mr. Smith has developed and/or lead internal and external Continuing Education Training programs related to: Single Audit Controls • A-133 Auditing Yellow Book Standards GASB Standards A sample of selected other speaking engagements include: • Southeastern Intergovernmental Audit Forum—September 2011, Ft. Lauderdale, FL"OMB A-133 Update" American Institute of Certified Public Accountants—August 2011 Washington DC, Government Accounting and Auditing Conference—"Sub-recipient.Monitoring the Auditee and Auditor's Perspective" Crowe Horvath, www.crowehorwath.com �' MIAMI BEACH @ Copyright 2014 Crowe Horvath LLP Proposal to Provide Auditing Services City of Miami Beach,Florida 56 ; American Institute of Certified Public Accountants—August 2011 Washington DC, Government Accounting and Auditing Conference—"Impact of Economic Downturn on Audits of Local Governments" : Oklahoma Society of CPA's—June 2011, Oklahoma City"Sub-recipient Monitoring the Auditee and Auditor's Perspective" . Electric Utilities Consultants, Inc. -October 2010 Baltimore, Maryland"Government Audits of Federal Grant Recipients" Electric Utilities Consultants, inc.- June 2010 Chicago, Illinois"ARRA Reporting, Grant Management&Audit Processes" Government Finance Officers Association of Texas 2009 Fall Conference Fort Worth, Texas"Audit Guidance under a New ARRA" McCall, Parkhurst& Horton LLP Presents"Build America Bonds A-Z"—Spring 2010, Irving, Texas Association of Local Government Auditors—2010 National Conference, San Antonio,Texas "Auditing Franchise Revenues" State of Arkansas Department of Finance and Administration—2010"GAAP Update&ARRA Issues" Little Rock,Arkansas I i ; Southwest School of Government 2007 and 2008"Governmental Accounting— 101"Lubbock, Texas International Bridge, Tunnel, and Turnpike Association 2007—Organization Management Workshop "When Does a Benefit Become a Liability—GASB Statement 45"Austin, Texas • Government Finance Officers Association of South Carolina 2002—"GASB 34 Background and Implementation Issues", Hilton Head, South Carolina Licenses and Certifications . • Certified Public Accountant (CPA)I California, New York,Texas Professional Affiliations . American Institute of Certified Public Accountants I State and Local Government Expert Panel, Government Accounting and Auditing Conference Planning Committee Member Texas CPA Society I Member ; Government Finance Officers Association I Certificate of Excellence Reviewer Government Finance Officers Association of Texas I Financial Reporting and Regulatory Compliance Committee, Program Development Committee • Association of Government Accountants I Member ' • Baptist Foundation of Texas I Institutional Audit Group Education Bachelor of Science In Accounting,with Honors East Central University Ada, Oklahoma A Crowe Horwath. www.crowehorwath.com MIAMI BEACH ©Copyright 2014 Crowe Horweth LLP Proposal to Provide Auditing Services City of Miami Beach,Florida 57 Aazan C. St. Rose, CPA — Senior Manager Professional Summary Mr. St. Rose has more than 8 years of public accounting experience auditing governmental organizations. Experience Mr. St. Rose's experience includes servicing clients with complex accounting issues, including issues involving complex financial instruments, derivatives and hedging,variable interest entities and leases. In • the past year, he was selected to participate in the firm's annual internal file inspection process,which included reviewing selected engagements for compliance with applicable auditing standards, firm quality • control standards and overall audit quality. Mr.St. Rose also regularly speaks at firm-sponsored continuing professional education (CPE)seminars on various accounting and auditing matters. Following is a representative listing of his current and past audit clients: Municipals Counties , City of Boynton Beach : Broward County • City of Delray Beach • Miami-Dade County Transit { ; City of Ft. Lauderdale • Pinellas County City of Lakeland Not-for-Profit . City of Miami Beach (performance Audit) • Boca Raton Museum of Art, Inc., Boca Raton City of Tampa Israel Children's Centers, Inc., Deerfield Town of Palm Beach Beach Town of Lake Park Florida Maltz Jupiter Theatre, Inc. I • Special Districts Palm Healthcare Foundation, Inc.,West Palm • Solid Waste Authority of Palm Beach County Beach • Health Care District of Palm Beach County Planned Parent of South Florida and the Treasure Coast Delray Beach Community Redevelopment The Raymond F. Kravis Center for the Agency Performing Arts, Inc. • West Palm Beach Downtown Development Authority Lakeland Area Mass Transit District •Licenses and Certifications Certified Public Accountant(CPA) I Florida and New York � I Professional Affiliations American institute of Certified Public Accountants (AICPA) I Member • Florida Institute of Certified Public Accountants (FICPA) I Member /A Crowe Horwath. www.crowehorwath.com MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 58 ' Education Bachelor of Science-CPA Accounting and Finance . New York University : New York, New York • • Li is • I ' 1 1 Air, Crowe Horvath. www.crowehorwath.com [A MIAMI BEACH 0 Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 59 C. Michelle Blackstock, CPA/C1TP — Senior Manager Professional Summary Ms.Blackstock has twenty five years of experience in providing assurance services to public sector •• clients. Ms. Blackstock has prior work experience in both international and local public accounting firms Experience Audit Experience Municipal Special Districts Town of Davie South Florida Water Management District • City of North Lauderdale Single Audit • ; City of Cooper City South Indian River Water Control District Town of Hillsboro Beach Pinellas Park Water Management District • : Town of Lauderdale-By-The-Sea South Trail Fire and Rescue District LI 1 Village of Wellington East Naples Fire Rescue District Town of Hypoluxo • Loxahatchee Groves Water Control District 1 . Town of Haverhill Central Broward Water Control District • Town of Hypoluxo • Canaveral Port Authority Town of Glen Ridge Sanford Port Authority • Town of Cloud Lake Various Community Development Districts Parkland Police Pension Fund Jacksonville Police and Fire Pension Fund City of Oviedo • City of Marietta, Georgia County ; Housing Finance Authority of Broward County Floyd County, Georgia Cobb County Health Department Gwinnett County Health Department Publications and Speaking Engagements Internal Controls, Florida Institute of Certified Public Accountants 22nd Annual Accounting Show, June 2007 Panel discussion on Special District Governance, Florida Association of Special Districts annual conference, June 2008,2009 and 2011 • Financial Reporting-Audit Requirements&Transparency, Florida Association of Special Districts annual conference,June 2010 Finance-New Reporting Requirements,Audit Update& How to Read and Understand Your Audit, Florida Association of Special Districts annual conference,June 2012 Fraud, Florida Government Finance Officers Association annual conference,June 2012 • Reading and Understanding Your Audit, Florida Association of Special Districts annual conference, June 2013 j Crowe Harwath. www.crowehorwath.com MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP ( Proposal to Provide Auditing Services City of Miami Beach, Florida 60 • Licenses and Certifications . Certified Public Accountant(CPA) I Florida Certified Information Technology Professional CITP,AICPA Professional Affiliations American Institute of Certified Public Accountants(AICPA) I Member Florida Institute of Certified Public Accountants (FICPA)I Member • Government Finance Officers Association(GFOA) I Special Review Committee Florida Government Finance Officers Association (FGFOA) I Member Community Involvement and Other Professional Activities ; Greater Palm Beaches Alumnae Association of Delta Gamma Fraternity I Treasurer First United Methodist Church of Boca Raton I Assistance Treasurer • Education Bachelor of Science in Business Administration,Accounting University of Central Florida Orlando, Florida • • • I I I i � I I71 z p p y r Crowe Horvath, • www.crowehorwath.com 1JAMIAMI©EAC H it/Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 61 John J. Shumaker, CPA - Senior Staff Professional Summary I Mr.Shumaker has six years of experience in the Audit and Consulting related Accounting field. He has experience in the Government industry. More specifically, Mr. Shumaker participated in Financial Audits, Single Audits and Consulting CAFR preparation work. is Audit Experience Municipal City of Tampa Kentucky Housing Corporation Lextran—Transit Authority of Lexington . Louisville Water Company Louisville Metro Government • U i Village of Bridgeview,Illinois Village of River Grove State • Illinois Gaming Board—Casinos • ISBE-Elementary School District 159 . ISBE-Ridgeland School District 122 : ISBE-Chicago Ridge School District 127-5 ISBE-Cook County School District 130 • ISBE-Posen-Robbins Elementary School District 143-5 Consulting Experience Municipal i City of Fort Worth Texas Mergers&Acquisitions—Due Diligence Issued Due Diligence Reports • : ; Private Equity Related • Copely Capital • HIG Capital Publications and Speaking Engagements Beta Alpha Psi Presentation at the University of Kentucky Licenses and.Certifications , Certified Public Accountant(CPA)1 Kentucky ,/,',)'A Crowe Horvath. www.crowehorwath.com CA MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP is Proposal to Provide Auditing Services City of Miami Beach,Florida 62 • i . Professional Affiliations Kentucky Society of CPAs Governmental Accounting Committee Member . American Institute of Certified Public Accountants(AICPA) I Member Community Involvement and Other Professional Activities Rotaract(Affiliate of Rotary) I International Service Chairman University of Kentucky Phi Kappa Psi Chapter Chairman of the Advisory Committee Lexington Forum Member Education Bachelor of Science in Business,Accounting and Finance University of Kentucky Lexington,Kentucky 9 • I , t, Crowe Horwath. www.crowehorwath.com Cs MIAMI BEACH ©Copyright 2014 Crowe Horvath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 63 k • Michael Rozelle — Senior Staff Professional Summary Michael Rozelle started at Crowe Horwath, LLP in September 2012 and has worked on multiple government engagements. Prior to joining Crowe, Michael gained experience dealing with not-for-profit • entities. Experience '• • Broward County Pinellas County • City of Ft. Lauderdale Miami Dade Transit • Education i Masters of Science in Accountancy Indiana University Bloomington, Indiana • Bachelors of Science in Finance • Ball State University Muncie, Indiana Crowe Horwath. www.crowehorwath.com ea MIAMI BEACH ©Copyright 2014 Crowe Horvath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 64 Craig D. Sullivan, CPA, CISA, QSA — Partner I ' Professional Summary Craig has 30 years' experience in accounting and technology consulting related to Risk Management and Information Technology Controls. He is responsible for the thought leadership and technical activities of the Technology Risk activities of Crowe's Risk Consulting Services business unit on a Firm- . wide basis. Experience Oversight direction andcontinued advancement for supporting the Audit business unit's external financial audit practice Directing, managing, and signing Service Organization Controls(SOC)report(SSAE • 16/SOC1/SOC2)examinations for many different processing environments • Performs Data Security Compliance reviews on behalf of the Payment Card Industry(designated as a Qualified Data Security Professional) I Assistance with management and strategic direction of Crowe's Technology Risk Management& • Information Security Services I ' Direct responsibility of coordination and scheduling of staff members and others as assigned Review of staff activities,workpapers, and reports related to all external audit technology risk controls evaluations and assisting the integrated audit teams in the completion of Public Company • • control evaluations and conclusions. . Development of procedures to assist in the resolution of conversion balancing problems. Creation and presentation of training courses for both internal Crowe Horwath seminars and for • external banking and financial organizations Publications and Speaking Engagements Mr.Sullivan has taught Management Information Systems and Accounting courses at Bowling Green State University. Currently, he is active in the Continuing Professional Education program of Crowe Horwath and teaching a variety of audit, control and technology courses for Crowe staff members, as well as presenting similar courses for Internal Audit Seminars. Licenses and Certifications Certified Public Accountant(CPA) -+ • Certified Information Systems Auditor(CISA) Qualified Security Assessor(QSA) Professional Affiliations Michiana Public Broadcasting Corporation (WNIT Channel 34),a PBS Station I Board Member Institute of Internal Auditors (IIA Organization) Member I , .,p, Crowe Horvath. www.crowehorwath.com .m MIAMI BEACH. ©Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 65 Education Master of Accountancy . Bowling Green State University . Bowling Green Ohio Bachelor of Science in Business Administration, Accounting and Management Information Systems Bowling Green State University Bowling Green, Ohio J--r • • • • • „ ;, Crowe Horwath. www.crowehorwath.com ea, MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 66 Steven Kocaj, CISA — Manager Professional Summary Steve is a manager consultant with Crowe Horwath LLP, providing general controls, application controls, and related special consulting services to clients. Experience Steven Kocaj is a manager with the IT Risk group, out of Fort Lauderdale, FL. Steven has over four(4) years of experience providing consulting services and performing attestation audits for information . systems. The majority of clients Steven serves are in the financial institution, healthcare and manufacturing industries. Steven focuses on conducting Sarbanes-Oxley(SOX)compliance for financial statement audits, internal audits for SOX, risk assessments, and conducting FFIEC reviews for financial institutions. Before returning to Crowe Horwath,Steven worked as an IT Internal Auditor for a publicly traded company that generated$1.5 billion in revenue with IT operations in four countries. His primary responsibility was conducting planning,fieldwork and reporting on the controls relating to SOX. Steven also spent four years in public accounting where he provided external audit IT support,general control reviews, related special consulting services to clients, performed pre-audit work as well fieldwork for SSAE 16 engagements. Steven is a Certified Professional Accountant(CPA)in the state of Indiana (will be certified in the state of Florida in 2016). In addition,Steven has his Certified Information System Auditor(CISA) certification. IT Audit and Attestation Experience Executed audits of various applications and system platforms to assess information system controls for public, private and companies complying with FDICIA reviews. i Developed Sarbanes-Oxley 404 process and documentation of key IT controls. ; Reviewed technology,financial and operational processes to assess business risk, internal control, and the overall effectiveness and efficiency of processes. Managed service organization examinations, including planning,testing, and documenting test results and recommendations. ; Conducted SSAE 16, Type 1 and Type 2 attestations for software and business process outsources (payroll, item processing,third party collection agencies, and other processes). The controls included both IT general controls and business process controls. • • Internal Audit Experience Assisted clients with developing and testing IT general controls and application controls in a co- sourcing and outsourcing arrangements. Developed risk assessments based on different compliance and needs of the client;such as SOX, disaster recovery, HIPAA, and non-public financial audits. Informed clients and Chief Audit Executives (CAEs)on the regulatory and environmental changes that will impact current risk assessments. Reviewed and tested for IT compliance under FFIEC Handbooks for Financial institutions Analyzed data and conducted interviews for investigations within-different functional areas. %;� Crowe Horwath. www.crowehorwath.com �' MIAMI BEACH ©Copyright 2014 Crowe Hoiwath LLP 1 . Proposal to Provide Auditing Services City of Miami Beach, Florida 67 Conducted specialized segregation of duties testing across companywide ERP System, and \ • reported conflicts to director of Internal Audit on a periodic basis. • Reviewed and assisted companies in documenting business continuity policies. Including business impact analysis, disaster recovery plan,risk assessments,testing, and drafted memos to the Board of Directors. Licenses and Certifications Certified Public Accountant(CPA) I Indiana Certified Information Systems Auditor(CISA) Professional Affiliations • Information Systems Audit and Control Association (ISACA)South Florida I Member . American Institute of Certified Public Accountants(AICPA)I Member • Society of Certified Public Accountants I Member Education ! Masters of Science in Information Systems Bachelor of Science in Business • Indiana University Bloomington, Indiana i • is j \ Crowe Horvath, www.crowehorwath.com MIAMIBEACH • ©Copyright 2014 Crowe Horwath LLP Proposal to Provide Auditing Services City of Miami Beach, Florida 68 Pubbens Clermont — Staff Professional Summary As a staff member in the Fort Lauderdale Risk Consulting practice, Pubbens is responsible for performing consulting services related to IT general controls,application controls and Sarbanes-Oxley. In addition, Pubbens performs SSAE16/SOC reviews and conducts Financial Audit Support jobs. Experience ; Reviewing controls in both an internal and external audit environment Performing Information System General Control reviews of data centers that include the following • areas of walkthrough, inspection, Inquiry, and testing: Logical Access(User Provisioning and Segregation of Duties), Physical Security, Disaster Recovery Planning and Testing (Business Continuity Planning), IS Related Insurance(Testing adequacy of coverage),Assessment of Policies • and Procedures regarding IS controls, System Development(Change management processes and execution), and Computer Operations(job scheduling,file handling, retention, etc.). Financial Audit Support control testing: Perform testing on financially significant applications to determine the impact of control operation on the results of financial audit procedures and results. { Testing of Sarbanes-Oxley and Gramm-Leach-Bliley Act Controls through documented walkthroughs and control testing to evaluate control operating effectiveness Review and testing of controls in support of SSAE16 and SOC reports Professional Affiliations Information Systems Audit and Control Association (ISACA) I Member Education , Bachelor of Business Administration (BBA)in Management Information Systems(MIS) • Bachelor of Business Administration (BBA)in Finance Florida International University • • Miami, Florida • 1 ,,r`, Crowe Horwath. www.crowehorwath.com (1,A MIAMI BEACH ©Copyright 2014 Crowe Horwath LLP ATTACHMENT B AA I AM I BEACH CONVENTION CENTER REPORT 2019-092-JC AUDITING SERVICES PROCUREMENT DEPARTMENT 1755 Meridian Avenue, 3rd Floor Miami Beach, Florida 33139 r0�k ', rat fr f 't . 7t . E_L 'CJI, i E 4i L • ,', 0,7 i' s -. 1 f7::•4 .1 1,_. ') , . MIAMI BEACH CONVENTION CENTER . :.,. ' L AS MANAGED BY GLOBAL SPECTRUM ,L.P: - -",'t ''' 1 .",., SPECIAL PURPOSE FINANCIAL REPORT , September 30,2017 "' •'0'/ f J At , a . `.�. ..k , . F ,..- 'le t r q ta} 'I , 1 uT l ... t'{ j • +t µrt fit/, ih r'., I. .. . ,•,'',''', t''''',,,, flo-ti,.:' i''',,f7 ry ::,. , „ ,-. ,,. .. . ,..,-, 0,-,,., , - -, 1,,,,,,..., - . , ,,s _ „,,.: ., . ,. . , _ , ,. . ‘ ,. t .,...,,,‘„, .........,......„.4 l� ,,,, ,,.;...,...,;'.:,,,,,!:;.L: e rp 'nfr q ±,. ,;•""71 .A 1. ,•G, ` V { ;rI , r i, 1 MIAMI BEACH CONVENTION CENTER AS MANAGED BY GLOBAL SPECTRUM, L.P SPECIAL PURPOSE FINANCIAL REPORT September 30, 2017 CONTENTS INDEPENDENT AUDITOR'S REPORT 1 FINANCIAL STATEMENTS SPECIAL PURPOSE STATEMENT OF ASSETS, LIABILITIES AND CONTROL 3 SPECIAL PURPOSE STATEMENT OF REVENUE AND EXPENSES 4 SPECIAL PURPOSE STATEMENT OF CASH FLOWS 5 NOTES TO SPECIAL PURPOSE FINANCIAL STATEMENTS 6 A Crowe. Horwath. Crowe Horwath LLP Independent Member Crowe Horwath International INDEPENDENT AUDITOR'S REPORT Honorable Mayor and City Commissioners of the City of Miami Beach, Florida We have audited the accompanying special-purpose statement of assets,liabilities and control of the Miami Beach Convention Center, as managed by Global Spectrum, L.P. ("GS") as of September 30, 2017, and the related special-purpose statements of revenue and expenses and cash flows for the year then ended, and the related notes to the special-purpose financial statements. Management's Responsibility for the Special Purpose Financial Statements Management is responsible for the preparation and fair presentation of the special-purpose financial , statements in accordance with the financial reporting provisions of the Management Services Agreement with GS dated October 7, 2013, amended as of December 8, 2015. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of special-purpose financial statements that are free from material misstatement,whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these special-purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the special-purpose financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the special-purpose financial statements.The procedures selected depend on the auditor's judgment,including the assessment of the risks of material misstatement of the special-purpose financial statements,whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the special-purpose financial statements in order to design audit procedures that are appropriate in the circumstances,but not for the purpose of expressing ari opinion on the effectiveness of the entity's internal control.Accordingly,we express no such opinion.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness ofsignificant accounting estimates made by management, as well as evaluating the overall presentation of thespecial- purpose financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. (Continued) 1. Opinion In our opinion, the special-purpose financial statements referred to above present fairly, in all material respects, the assets, liabilities and control of Miami Beach Convention Center, as managed by Global Spectrum, L.P., as of September 30, 2017 and the revenues, expenses and cash flows for the year then ended, in accordance with the financial reporting provisions of the Management Services Agreement with GS dated October 7, 2013, amended as of December 8,2015. Basis of Accounting We draw attention to Note 2 of the special-purposefinancial statements, which describes the basis of accounting.The special-purpose financial statements are prepared by the City of Miami Beach on the basis of the financial reporting provisions of the Management Services Agreement with GS dated October 7, 2013, amended as of December 8, 2015, which is a basis of accounting other than accounting principles generally accepted in the United States of America,to comply with the financial reporting provisions of the agreement referred to above. Our opinion is not modified with respect to this matter. Restriction on Use This report is intended solely for the information and use of the,Honorable Mayor, members of the City Commission, management of the City of Miami Beach, Florida and the management of Global Spectrum, L.P., and is not intended to be and should not be used by anyone other than the specified parties. Crowe Horwath LLP Miami, Florida January 2, 2018 • 2. MIAMI BEACH CONVENTION CENTER AS MANAGED BY GLOBAL SPECTRUM, L.P. SPECIAL PURPOSE STATEMENT OF ASSETS, LIABILITIES AND CONTROL September 30,2017 1 ASSETS Cash $ 164,342 Restricted cash 914,198 Accounts receivable 357,194 Due from City of Miami Beach 345,508 Prepaid expenses 43,062 Total assets $ 1,824,304 LIABILITIES AND CONTROL Accounts payable $ 212,491 Accrued expenses 332,015 Deposits 914,158 Total liabilities 1,458,664 Control 365,640 Total liabilities and control $ 1,824,304 The accompanying notes are an integral part of these financial statements. 3. MIAMI BEACH CONVENTION CENTER AS MANAGED BY GLOBAL SPECTRUM, L.P. SPECIAL PURPOSE STATEMENT OF REVENUE AND EXPENSES Year Ended September 30,2017 Revenue Rent $ 977,248 Ancillary 2,502,554 Service 2,887,566 Other 27.298 Total revenue 6,394,666 Expenses Ancillary 1,992,109 Service 2,370,218 Salaries and benefits 3,952,325 Utilities 444;984 Repairs and maintenance 113,253 Insurance - 1,362,824 Capital expenses 198,380 Other 798,974 Total expenses 11,233.067 Excess of expense over revenue, before other income (4,838,401) Other income—interest 323 Excess of expense over revenue and other income $ (4,838,078) The accompanying notes are an integral part of these financial statements. 4. MIAMI BEACH CONVENTION CENTER AS MANAGED BY GLOBAL SPECTRUM L.P. SPECIAL PURPOSE STATEMENT OF CASH FLOWS Year Ended September 30, 2017 Cash flows from operating activities Excess of expenses over revenue, before other income $ (4,838,401) Adjustment to reconcile excess of expenses over revenue before other income to net cash used in operating activities: Changes in assets and liabilities: Increase in accounts receivable 50,178 Decrease in prepaid expenses 12,139 Decrease in account payable and accrued expenses (381,660) Increase in deposits 131.074 Net cash used in operating activities (5,026.670) Cash flows from non-capital financial activities Contribution received from the City 4,888,223 Cash distributions to the City (129.058) Net cash provided by non-capital financing activities 4,759,165 Cash flows from investing activities Interest on investments 323 Net cash provided by investing activities 323 Net decrease in cash (267,182) Cash, beginning balance 1,345,722 Cash, ending balance $ 1,078,540 The accompanying notes are an integral part of these financial statements. 5. MIAMI BEACH CONVENTION CENTER AS MANAGED BY GLOBAL SPECTRUM, L.P. NOTES TO SPECIAL PURPOSE FINANCIAL STATEMENTS Year Ended September 30,2017 NOTE I NATURE OF ORGANIZATION On September 10, 2008, the Mayor and Commission of the City of Miami Beach, Florida (the "City"), approved and authorized entering into a three-year Management Services Agreement(the "Agreement") with Global Spectrum,L.P.("GS")a Pennsylvania limited partnership,commencing on October 1,2008 and expiring on September 30, 2011, to manage the operations of the Miami Beach Convention Center (the "Facility"), which is owned by the City. This Agreement has two optional one-year renewal terms. Under the Agreement,GS acts as the sole managing agent to promote,manage and maintain the Facility pursuant to all applicable laws and ordinances. The original contract expired in September 2011 the City renewed the agreement for two years expiring on September 30,2013. On October 7,2013 Global Spectrum, L.P. and the City executed a new three-year Management Services Agreement commencing on October 1, 2013 and expiring September 30, 2016. The agreement has two optional one year renewal terms. In an amendment signed December 8,2015,the Mayor and the City Commission of the City of Miami Beach authorized the City Manager to exercise two (2) consecutive one (1) year renewal terms, commencing October 1, 2016 and ending on September 30, 2018, and approved an additional two (2) years to the agreement between the City of Miami Beach and Global Spectrum, L.P.,commencing October 1,2018 and ending September 30, 2020. NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The special-purpose financial statements of the Facility as managed by Global Spectrum, L.P. have been prepared in accordance with the Agreement as disclosed below. This summary of significant accounting policies is presented to assist the reader in interpreting the special-purpose financial statements. These policies are considered essential and should be read in conjunction with the special-purpose financial statements. Basis of Accountingand Financial Statement Presentation: The special-purpose financial statements are prepared using the economic resources measurement focus and the accrual basis of accounting, except as disclosed below. Under this method, revenue is recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. The special-purpose financial statements have been prepared pursuant to the provisions of the Agreement. Accordingly,the statement of assets and liabilities do not include all of the assets and liabilities of the Facilities,but only those assets and liabilities recorded by the City,which are managed by Global Spectrum, L.P. Assets and liabilities not reflected herein may include, but are not limited to, property and equipment. In addition,the statement of revenue and expenses does not include charges for depreciation in connection with property and equipment, certain internal charges and management fees which are incurred and reported by the City and transactions with the City are accounted for within the control account. The statement of cash flows are presented using the indirect method. Accounts receivable are recorded at the invoiced amount and do not bear interest.An allowance for doubtful accounts has not been established as management believes that all amounts are collectible. (Continued) 6. MIAMI BEACH CONVENTION CENTER AS MANAGED BY GLOBAL SPECTRUM, L.P. NOTES TO SPECIAL PURPOSE FINANCIAL STATEMENTS Year Ended September 30, 2017 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Revenue Recognition: Rental revenue is recognized when the related event is staged. Rental payments received in advance are deferred until earned. The rental charges for the Miami Beach Convention Center are based on square footage with rates approved by the City. Revenues are reported gross, including but not limited to all third party and commissionable revenues.The Miami Beach Convention Center distinguishes between ancillary and service revenues. Ancillary revenue is recognized when earned and is comprised of income generated from food and beverage and audio visual services provided during an event. Service revenue is recognized when earned and is comprised of stagehand,security, electrical,telephone, internet services and other event related revenue provided during an event. Use of Estimates: The preparation of special-purpose financial statements in accordance with the Management Services Agreement,which are prepared utilizing accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the special-purpose financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from management's estimates. NOTE 3-DEPOSITS Deposits represent amounts paid in advance by promoters of events to be held at the Facilities. Cash received from deposits is included in the special purpose statement of assets, liabilities and control as restricted cash. The deposits are applied to the balance owed by the promoters for the respective event and recognized when the event is staged. The advanced deposits for 2017 amounted to approximately $914,000. NOTE 4-DUE TO CITY There are no amounts due to the City of Miami Beach at September 30, 2017. NOTE 5 CONTROL ACCOUNT Activity in the control account for the year ended September 30,2017 is as follows: Balance, beginning of year $ 304,037 Net loss (4,838,078) Contributions received from the City 4,899,681 Cash distributions to the City - , Balance, end of year $ 365.640 (Continued) 7. MIAMI BEACH CONVENTION CENTER AS MANAGED BY GLOBAL SPECTRUM, L.P. ,NOTES TO SPECIAL PURPOSE FINANCIAL STATEMENTS Year Ended September 30,2017 NOTE 5 CONTROL ACCOUNT(Continued) Included in the contributions received from the City is$345,508 due from the City at September 30,2017. In accordance with the Agreement, at the end of each month the total of the Facility's operating cash accounts is quantified. If the total is greater than$500,000,the amount in excess of$500,000 is paid to the City. If the total is less than $500,000, the City will contribute an amount to bring the accounts up to $500,000. NOTE 6-MANAGEMENT AGREEMENT AND FEES Pursuant to the Agreement,the City will pay GS a fixed fee of$249,393 adjusted upward annually by the percentage change in the consumer price index("CPI"), not to exceed 3% in any one year. In addition, GS will be entitled to an annual incentive fee during the term of this Agreement, in an escalating amount equal to the management fee.The incentive fee is based on the following categories: Customer Service-The City shall award GS up to 30 percentage points for customer service. Financial Performance - The City shall award GS up to 50 percentage points based on financial performance. Maintenance and Improvement of Facility and its Capital Equipment-The City shall award GS up to 15 percentage points for this category. Discretionary-The City shall award GS 5 percentage points at its discretion. The fixed rate and incentive fees to be paid to GS by the City are not included in the special purpose statement of revenue and expenses. NOTE 7-SUBSEQUENT EVENTS Convention Center Renovation: On October 21,2015 the City of Miami Beach Commissioners unanimously approved a$615 million renovation project for the Miami Beach Convention Center. The construction for the renovation began after the Art Basel event in December 2015, and will take approximately 30 months to complete. As a result of the renovation,the Miami Beach Convention Center has budgeted to host 14 events for the fiscal year ended September 30,2018(10 events were held in fiscal year ended September 30,2017). For fiscal year ended September 30,2018 and fiscal year ending September 30,2017,the event schedule was determined through a collaborative effort with City of Miami Beach officials including the City's construction manager of the project. The event schedule was accordingly approved so as not to impede the construction timeline. Total revenue for fiscal year ended September 30, 2018 is budgeted at$7.3 million as compared to $6.4 million in total revenue for fiscal year ended September 30 2017. Total expense for fiscal year ended September 30, 2018 is budgeted at$12.8 million compared to$11.2 million in total expense for fiscal year (Continued) 8. MIAMI BEACH CONVENTION CENTER AS MANAGED BY GLOBAL SPECTRUM, L.P. NOTES TO SPECIAL PURPOSE FINANCIAL STATEMENTS Year Ended September 30,2016 NOTE 7 SUBSEQUENT EVENTS (Continued) ended September 30, 2017. The net loss for fiscal year ended September 30, 2018 is budgeted at$5.5 million compared to the$4.8 million net loss that was realized in fiscal year ended September 30,2017. Subsequent to the budget approval,and to further assist with the construction timeline,5 of the 14 budgeted events for fiscal year ending September 30, 2018 will not occur. The impact of not hosting these 5 cancelled events is projected to be an additional net loss of$339,000. • 9. ATTACHMENT C PARKING REPORT 2019-092-JC AUDITING SERVICES PROCUREMENT DEPARTMENT 1755 Meridian Avenue, 3rd Floor Miami Beach, Florida 33139 Parking System Enterprise Fund of The City of Miami Beach, Florida Financial Report Fiscal Year Ended September 30, 2017 PREPARED BY THE FINANCE DEPARTMENT Table of Contents Independent Auditor's Report ( 1 -2 Management's Discussion and Analysis(Unaudited) 3-7 Financial Statements Statement of Net Position 8-9 Statement of Revenues, Expenses and Changes in Fund Net Position 10 Statement of Cash Flows 11 - 12 Notes to Financial Statements 13-28 Required Supplementary Information (unaudited): Schedule of Contributions by Employer and Other Contributing Entities—Miami Beach Employees' Retirement System (MBERP) 29 Schedule of Fund's Proportionate Share of the Net Pension Liability and Related Ratios— Miami Beach Employees' Retirement System (MBERP) 30 Other Reports: Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 31 —32 Schedule of Findings 33 Summary of Prior Year Audit Findings 34 Independent Accountant's Report on Compliance with Section 218.415, Florida Statutes 35 A Crowe Horvath. Crowe Horwath LLP Independent Member Crowe Horwath International INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of the City Commission City of Miami Beach, Florida Report on the Financial Statements We have audited the accompanying financial statements of the Parking System Enterprise Fund (the "Fund")of the City of Miami Beach, Florida(the"City"), as of and for the year ended September 30, 2017, and the related notes to the financial statements, which collectively comprise the Fund's financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America;this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit.We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.'Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.The procedures selected depend on the auditor's judgment,including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In.making those risk_assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.Accordingly,we express no such opinion.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management,as well as evaluating the overall financial statement presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion,the financial statements referred to above present fairly,in all material respects,the financial position of the Parking System Enterprise Fund of the City of Miami Beach, Florida, as of September 30, 2017, and the changes in its financial position and its cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. -1- Emphasis of Matter As discussed in Note 1, the financial statements present only the Fund and do not purport to, and do not, - present fairly the financial position of the City of Miami Beach, Florida as of September 30,2017, the changes in its financial position, or where applicable its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, schedule of contributions by employer and other contributing entities, and schedule of proportionate share of the net pension liability and related ratios on pages 3 to 7, page 29,and page 30 be presented to supplement the financial statements. Such information, although not a part of the financial statements, is required by Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context.We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries,the financial statements,and other knowledge we obtained during our audit of the financial statements.We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Report on Other Legal and Regulatory Requirements In accordance with Government Auditing Standards, we have also issued our report May 25, 2018 on our consideration of the Fund's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations,contracts, and grant agreements and other matters.The purpose of that report is to'describe the scope of our testing of internal control over financial reporting and(compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance.That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Fund's internal control over financial reporting and compliance. ,Q.rrwak a_to Crowe Horwath LLP Miami, Florida May 25,2018 -2- Parking System Enterprise Fund of The City of Miami Beach, Florida Management's Discussion and Analysis(Unaudited) The Management's Discussion and Analysis of the Parking System Enterprise Fund (the Fund) of the City of Miami Beach, Florida (the City) is designed to (a) assist the reader in focusing on significant financial issues, (b) provide an overview of the Fund's financial activities, and (c) identify changes in the Fund's financial position. Using These Financial Statements These financial statements have been prepared using the requirements stipulated by the Governmental Accounting Standards Board, Statement No. 34 (GASB 34). Under GASB 34, the Fund's operation is accounted for as an enterprise fund of the City. As such, the Fund uses the economic resources measurement focus and accrual basis of accounting. The following financial statements are presented The Statement of Net position presents the financial position of the Fund as of September 30, 2017. It provides information about the nature and amounts of resources(assets and deferred outflows),obligations (liabilities and deferred inflows), and net position. The Statement of Revenue, Expenses, and Changes in Net Position present changes in net position (revenue and expenses)over the course of the year ended September 30,2017. The change in net position may be useful in assessing whether the Fund's financial position improved or deteriorated for the year. This Statement measures the Fund's profitability and success in funding its expenses through user charges. The Statement of Cash Flows presents the cash activities of the Fund segregated by four major cash flow - categories: operating activities, noncapital financing activities, capital and related financing activities, and investing activities. This Statement may be useful in determining changes in the liquidity of the Fund and in understanding how cash and cash equivalents were used during the year ended September 30, 2017. Financial Highlights • The total assets and deferred outflows of resources exceeded its liabilities and deferred inflows of the Fund at September 30, 2017 by$136.5 million. • During the fiscal year, the Fund's net position decreased by$1.7 million. 2017 2016 Variance Net position 136,481,183 138,132,997 (1,651,814) -3- Parking System Enterprise Fund of The City of Miami Beach, Florida Management's Discussion and Analysis(Unaudited) The following is a summary of the Fund's assets and deferred outflows; liabilities and deferred inflows and net position at September 30, 2017 and 2016 with pertinent comments and information: 2017 2016 Assets&Deferred Outflows: Current Assets $ 67,786,481 $ 68,662,708 Noncurrent Assets Capital assets, net 156,480,217 134,623,804 Other noncurrent assets 32,236,785 55,900,315 Total Assets 256,503,483 259,186,827 Total Deferred Outflows 4,756,150 5,572,295 Total Assets&Deferred Outflows 261,259,633 264,759,122 Liabilities&Deferred Inflows: Current liabilities 10,386,565 9,092,688 Noncurrent liabilities 114,258,810 117,533,437 Total Liabilities 124,645,375 126,626,125 Total Deferred Inflows 133,075 - Total Liabilities&Deferred Inflows 124,778,450 126,626,125 Net position: Net investment in capital assets 91,653,572 87,478,751 Restricted-Debt Convenant 37,381,946 57,038,567 Unrestricted / 7,445,665 (6,384,321) Total net position $ 136,481,183 $ 138,132,997 • Total assets and deferred outflows for the Fund decreased by $3.5 million or 1.3% over the prior year. Assets consisted primarily of capital assets of which $156.5 million represented 59.9% of the Fund's total assets and deferred outflows. Capital assets, (net of accumulated depreciation) which are comprised of land, intangible assets, building and structures,parking meters,furniture,equipment and parking-related construction in progress increased by $21.9 million or 16.2%. The Fund uses these capital assets to provide facilities and services to the City's residents and visitors. Assets consisted secondarily of cash and investments of$94.1 million which represented 36%of total assets and deferred outflows. $56.3 million or 59.8% of the cash and investments is unrestricted and available for use in daily operations and future parking projects in the City. $37.8 million or 40.2% of cash and investments is restricted for debt covenants. • The Fund had a net decrease in liabilities and deferred inflows of $1.85 million or 1.46% over the prior year. Noncurrent liabilities,which are comprised mainly of bonds, loans payable and net pension liability, decreased by$3.3 million or 2.79%, primarily as a result of the debt service payments on the Series 2015 Parking Revenue Bonds. $99.7 million or 79.9% of the Fund's total liabilities and deferred inflows consisted of bonded debt and loans,which were issued for improving and expanding the City's Parking System. • $91.7 million or 67:2% of the Fund's net position represents net investment in capital assets (e.g., land, intangible assets, buildings and meters), less any related outstanding debt used to acquire these assets. The Fund uses these assets to provide services to residents and visitors; consequently, these assets are not available for future spending. 7.4 million or 5.5% of the Fund's net position is considered unrestricted. • -4- Parking System Enterprise Fund of The City of Miami Beach, Florida Management's Discussion and Analysis(Unaudited) The following is a summary of the revenues,expenses,and changes in net position for the fiscal year ended September 30, 2017 and 2016, with pertinent comments and information: 2017 2016 Operating revenues $ 47,285,421 $ 51,499,302 Operating expenses, excluding depreciation 36,830,114 35,647,133 Operating income before depreciation 10,455,307 15,852,169 Depreciation (5,833,405) (5,973,576) Nonoperating revenue 3,656,090 4,058,273 Nonoperating expenses (3,454,810) (1,361,533) Transfers out (6,474,996) (9,215,478) Change in net Position $ (1,651,814) $ 3,359,855 The Fund had a decrease in net position of$1.7 million. This change represents a decreased of$5.0 million or 149% from the prior year. Operating revenues decreased by $4.2 million or 8.2%. The change is the result of decreased parking activity or volume due td competition from Uber and Lyft as well as the impact of Hurricane Irma. Nonoperating revenues decreased by $0.4 million or 9.9% from prior year. This is mostly from intergovernmental revenues which are the City's share in parking ticket revenue from Miami-Dade County. Enforcement revenues increased due to the implementation of License Plate Recognition (LPR) hand • devices. Nonoperating expenses,which includes`interest expense and fiscal charges, ihcreased by$2.1 million from prior year. The increase is due to the debt service cost for the Series 2015 Parking Revenue Bond. For more information, please refer to note 5 of the financial statements and the Debt Administration portion of Management's Discussion and Analysis. Net transfers for the Fund were $6.5 million. The transfers are to the general fund for the purpose of transferring parts of parking system operational surplus realized in prior years to the general fund. r -5- Parking System Enterprise Fund of The City of Miami Beach,Florida Management's Discussion and Analysis(Unaudited) Capital Assets and Debt Administration Capital Assets The Fund's invested in capital assets, (net of accumulated depreciation) at September 30, 2017 amounts to $156.5 million. Capital assets include land, intangible assets, building and structures, parking meters, furniture, fixture, equipment, and parking-related construction in progress. The Fund is undergoing numerous capital improvement programs which include the building`-renovation such as the convention center parking garage, structural repair of several other parking garages and Skidata Revenue Control System. Capital assets, net of accumulated depreciation at September 30, 2017 and 2016 are detailed as follows: 2017 2016 Land r $ 18,844,498 $ 18,844,498 Intangible Assets 4,318,059 4,318,059 Building and structures 69,246,097 , 71,539,925 Furniture, equipment and vehicles 2,786,186 1,948,105 Parking meters 6,427,913 8,462,719 Improvements other than buildings 5,415,419 4,733,028 Construction in progress 49,442,045 24,777,470 Total $ 156,480,217 $ 134,623,804 Additional information on the Fund's capital assets can be found in Note 3 to the financial statements. Debt Administration At September 30, 2017, the Fund had $93.6 million in total outstanding bonded debt and approximately $42 thousand in loans. In February 2008 the City entered into a loan agreement that allows the Fund to be reimbursed for equipment and machinery purchased by the Fund. Outstanding debt at September 30, 2017 and 2016 are detailed as follows: 2017 2016 Revenue bonds $ 93,560,000 $ 95,160,000 Net Unamortized bond Premium 6,097,647 6,459,676 Loan 57,875 98,570 Total $ 99,715,522 $101,718,246 Additional information on the Fund's debt can be found in Note 5 to the financial statements. /- -6- Parking System Enterprise Fund of The City of Miami Beach, Florida . Management's Discussion and Analysis(Unaudited) Economic Factors and Future Developments The City has approved a Capital Budget Plan for its parking system, including funding for parking garage expansion, construction of new parking garages, surface lot improvements and technology enhancements. The City engaged Walker Parking Consultants, Inc., a nationally recognized consulting firm, to perform a parking supply and demand analysis for all three major geographic areas of the City(South Beach, Middle Beach, and North Beach) in order to properly plan for the City's growth. Walker Parking performed a citywide analysis in 2003 and it is still being used today as a tool in identifying priority areas and sites for parking development and/or enhancements. The City is progressing with the development and construction of the Collins Avenue Garage, located on 23rd Street and Liberty Avenue. Additionally, parking structures are actively being contemplated. Municipal Parking Lot No. P16, located on Collins Avenue and 13th Street has been preliminarily identified as a suitable location for a multi-level parking structure. The City owns the land and may develop this site in its sole and absolute discretion. As part of the multi-million dollar renovations undergoing at the Miami Beach Convention Center, 900 covered rooftop public parking spaces will be accessible to the general public and residents. • From a mobility perspective, Citibike, formerly known as "Deco Bike" continues to be one of the most successful privately funded bike sharing programs in the country. It increases bicycling, improves air quality and provides quieter more livable streets.The electric vehicle charging station program has seen increased participation and plans are moving forward for expansion to all city garages pending legal review. The City implemented one of the first fully integrated license plate enabled parking payment platforms in the nation. This includes: pay by license plate at multi-space pay stations (853 units citywide); ParkMobile (mobile payment app)services; commercial and residential virtual parking permits, and LPR(License Plate Recognition) enabled mobile and handheld enforcement devices. equest for Information Questions concerning any of the information provided in this report or requests for additional information should be addressed to the City of Miami Beach, Finance Department, 1700 Convention Center Drive, Miami Beach, FL, 33139. -7- Parking System Enterprise Fund of the City of Miami Beach, Florida Statement of Net Position September 30,2017 2017 Assets Current Assets: Pooled Cash and investments $ 56,293,349 Restricted Pooled cash and investments 5,617,483 Receivables 5,523,244 Accrued Interest Receivable 26,754 Prepaid expenses 325,651 Total current assets 67,786,481 Noncurrent Assets: Restricted Pooled Cash and investments 32,236,785 ' Capital assets, not being depreciated 72,604,602 Capital assets, being depreciated, net of depreciation 83,875,615 Total noncurrent assets 188,717,002 Total assets 256,503,483 Deferred outflows of resources Outflows-MBERP 4,334,760 Deferred refunding amount 421,390 Total deferred outflows of resources 4,756,150 Total assets and deferred outflows of resources 261,259,633 (continued) 1 -8- Parking System Enterprise Fund of the City of Miami Beach,Florida Statement of Net Position (Continued) September 30,2017 2017 Liabilities Current Liabilities: Accounts payable $ 4,874,017 Retainage payable 2,185,183 Accrued expenses 561,343 Due to other government 60,589 Current maturities of bonds payable 1,670,000 Loans payable 15,555 ' Deposits 5,890 Compensated absences 571,008 Unearned revenue 442,980 Total current liabilities 10,386,565 Noncurrent liabilities: Deposits 23,211 Compensated absences 364,815 Net Pensionfliability-MBERP 15,840,817 Long-term loans payable 42,320 Long-term maturities of bonds payable - 97,987,647 -Total noncurrent liabilities 114,258,810 Total liabilities 124,645,375 Deferred inflows of resources Inflows-MBERP 133,075 Total deferred inflows of resources 133,075 Net position: Net investment in capital assets 91,653,572 Restricted 37,381,946 Unrestricted 7,445,665 Total net position $ 136,481,183 -9 , Parking System Enterprise Fund of the City of Miami Beach,Florida Statement of Revenues,Expenses and Changes in Fund Net Position Year Ended September 30,2017 2017 Operating revenues: Charges for services $ 44,671,979 Permits,rentals and other 2,613,442 Total operating revenues 47,285,421 Operating expenses: Personal services 12,803,776 Operating supplies 75,945 Contractual services 12,474,745 Utilities 2,824,900 Insurance 163,362 Internal Charges 3,305,338 Depreciation 5,833,405 Administrative fee 2,147,591 Other operating 3,034,457 Total operating expenses 42,663,519 Operating income 4,621,902 Nonoperating revenues(expenses): Intergovernmental revenues 2,915,802 Interest expense and fiscal charges (3,454,810) Gain on disposition of capital assets 1,552 Interest income 738,736 Total nonoperating revenue(expenses) 201,280 Income before transfers 4,823,182 Transfers out (6,474,996) Change in net position (1,651,814) Total net position,beginning 138,132,997 Total net position-ending $136,481,183 The notes to the financial statements are an integral part of this statement. - 10- Parking System Enterprise Fund of the . City of Miami Beach,Florida Statement of Cash Flows Year Ended September 30,2017 2017 Cash Flows From Operating Activities Receipts received from customers $ 47,513,195 Payments to suppliers (18,492,358) Payments to employees (13,235,799) Payments for interfund services used (6,364,828) Net cash provided by operating activities 9,420,210 Cash Flows From Noncapital Financing Activities Contributions from other govemments 2,915,802 Transfers out (6,474,996) Net cash used in noncapital financing activities (3,559,194) Cash Flows From Capital and Related Financing Activities Purchase of capital assets (25,894,100) Proceeds from sale of capital assets 1,552 Interest expense and fiscal charges (3,737,036) Bonds: Principal payment _ (1,600,000) Loans: Principal payment (40,695) Net cash used in capital and related financing activities (31,270,279) Cash Flows From Investing Activities Interest income 739,948 Net cash provided by investing activities 739,948 Net decrease in cash and investments (24,669,315) Cash and investments,beginning of year 118,816,932 Cash and investments,end of year $ 94,147,617 Non-cash capital and related financing activities: Change in construction and related liabilities $ (1,795,718) Change in deferred refunding costs 85,706 Change in bond discount/premium 362,029 Total non cash transactions $ (1,347,983) (Continued) - 11 - Parking System Enterprise Fund of the City of Miami Beach,Florida Statement of Cash Flows(Continued) Year Ended September 30,2017 2017 Reconciliation of operating income to net cash provided by operating activities: Operating income $ 4,621,902 Adjustments to reconcile operating income to net cash provided byoperating activities: Depreciation 5,833,405 Provision for uncollectible accounts (149,520) Pension expense (452,770) Changes in operating assets and liabiltiies and deferred inflows: Increase(Decrease)in receivables 177,606 Increase(Decrease)in prepaid expenses (281,409) Increase(Decrease)in accounts payable 238,974 , Increase(Decrease)in accrued expenses 65,390 Increase(Decrease)in deposits (30,210) Increase(Decrease)in due from other governments 58,631 Increase(Decrease)in due from other funds 122,553 Increase(Decrease)in due to other funds (1,034,452) Increase(Decrease)in unearned revenues 229,898 Increase(Decrease)in compensated absences 20,212 Total adjustments ' 4,798,308 Net cash provided by operating activities $ 9,420,210 The notes to the financial statements are an integral part of this statement. -12- Parking System Enterprise Fund of The City of Miami Beach, Florida Notes to Financial Statements Note 1 -Summary of Significant Accounting Policies - The accompanying financial statements of the Parking System Enterprise Fund of The City of Miami Beach, Florida (the "Fund"), have been prepared in accordance with accounting principles generally accepted in the United States of America as applicable to governmental units. This summary of the significant accounting policies of the Fund is presented to assist the reader in understanding the financial statements. These policies are considered essential and should be read in conjunction with the accompanying financial statements. Reporting: The Fund's operation is accounted for as an enterprise fund of The City of Miami Beach, Florida (the "City") in accordance with Governmental Accounting Standards Board (GASB) codification section 2100. An enterprise fund is used to account for operations: (a)that are financed and operated in a manner similar-to private business'enterprises—where the intent of the governing body is that the costs(expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenue earned and expenses incurred is appropriate for capital maintenance, public policy, management control, accountability or other purposes. This report includes only the financial statements for the Parking System Enterprise Fund of the City of Miami Beach, Florida, and is not intended to be a complete presentation of the financial position of the City as of September 30, 2017, and the results of its operations and where applicable, cash flows for the year ended in conformity with accounting principles generally accepted in the United States of America as applicable to governmental units. Measurement focus and basis of accounting Proprietary Fund: 'The Fund is accounted for using the ' • economic resources measurement focus-and uses the accrual basis of accounting. When both restricted and unrestricted resources are available for use, it is the Fund's policy to use restricted - resources first and then unrestricted resources as they are needed. _ Pooled cash and investments: The Fund's cash and investments represent its allocable share of the City's pooled cash and investments. The equity in the City's pooled cash and investments system is available to the Fund on a demand basis and for statement of cash flow purposes is a cash equivalent. Cash and investments may be held in demand deposit accounts, commercial paper, state or municipal obligations, U.S. Treasury obligations, money market funds and repurchase agreements. Investments are recorded at fair value,except for those investments with remaining maturities of one year or less at the time of purchase, which are recorded at amortized cost. The City's investment policy requires that securities be registered in the name of the City. All safekeeping receipts for investment instruments are held in accounts in the City's name and all securities are registered in the City's name. The City has adopted an ordinance designating the investments which are allowable for its cash management activities. The policy specifies the types and limits by instrument and established a diversified investment objective that takes into consideration the safety, return and liquidity of capital. Receivables: Receivables consist primarily of amounts due from customers for parking permits and operating leases. Operating lease revenue is recognized on a straight-line basis over the initial lease term. The Fund periodically evaluates the receivables and generally does not require collateral. The Fund maintains an allowance for doubtful accounts at a level for all outstanding revenues not paid within 90 days of year end. Deferred Outflows/Inflows of resources: In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a future period(s)and so will not be recognized as - 13- Parking System Enterprise Fund of The City of Miami Beach, Florida Notes to Financial Statements an outflow of resources (expense/expenditure) until then. The Fund has two items that qualify for reporting in this category: a. A deferred charge on refunding debt reported in the fund's statement of net position. Deferred charges on refunding debt results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized as part of interest expense over the shorter of the life of the refunded or refunding debt. b. Deferred outflows of resources related to GASB 68 are recognized when the Fund makes contributions subsequent to the measurement date of the actuarially calculated net pension liability and variances between expected and actual earnings on investment. The Fund has one pension plan that results in the recognition of deferred outflows, MBERP. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period(s)and so will not be recognized as an inflow of resources(revenue) until that time. The Fund has only one type of item, for reporting in this category. a. Deferred inflows of resources related to GASB 68 are recognized when changes in the net pension liability are not included in the pension expense of the actuarially calculated net pension liability, such as the difference between projected and actual earnings.The Fund has one pension plan that results in the recognition of deferred inflows, MBERP. Restricted assets: Certain proceeds from the Fund's Revenue Bonds, as well as certain resources set aside for their repayment, are classified as restricted assets because their use is limited by applicable bond cpvenants. The Fund also restricts customer deposits. . Capital assets: Capital assets are defined by the Fund as assets with an initial, individual cost exceeding the capitalization threshold as noted on page 15, and an estimated useful life in excess of one year. All capital assets are recorded at historical cost or estimated historical cost if actual cost is not available. Gifts or contributions of property received are recorded at their estimated acquisition value on the date received by the Fund. Effective October 1, 2009, the Fund adopted the provision of GASB Statement No. 51 Accounting and Financial Reporting for Intangible Assets. This statement establishes accounting and financial reporting requirements for intangible assets including easements, water rights, timber rights, patents, trademarks and computer software.At September 30, 2017 the Fund reported air rights as intangible assets. Depreciation expense is recorded over the shorter of the estimated useful lives of the assets or lease term using the straight-line method. - 14- Parking System Enterprise Fund of The City of Miami Beach,Florida Notes to Financial Statements The estimated useful lives and the capitalization threshold effective October 1, 2010, are as follows: Assets Threshold Years Land & other nondepreciable assets Capitalize all N/A Construction work in progress $ 100,000 N/A Building and building improvements 100,000 35-50 Furniture and Equipment 5,000 7 Motor Vehicles 5,000 5 Motor Vehicles (Greater than $50,000) 50,000 10 Interest: Interest costs are expensed or capitalized in accordance with the provisions of Statements of Financial Accounting Standards No. 34, Capitalization of Interest Cost and No. 62, Capitalization and Interest Cost in Situations Involving Certain Tax-Exempt Borrowings and Certain Gifts and Grants. Compensated absences: It is the Fund's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. When terminated,an employee is paid for accumulated vacation leave and a percent of unused sick leave hours, subject to certain limitations. All vacation and sick pay is accrued when earned in the proprietary fund financial statement. Bond premiums and discounts: Bond premiums and discounts are deferred and amortized with interest expense over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount using the effective rate-method. Premiums and discounts are included in bonds payable. Issuance costs, whether or not withheld from the actual debt t proceeds received, are reported as debt service expenditures. Revenue and expense classification: The Fund defines operating revenue as those revenues earned from parking fee charges to customers and operating leases. Nonoperating revenue includes intergovernmental revenue and interest earnings. Sales for parking passes that do not meet the criteria for revenue recognition are recorded as unearned revenue until the related services are provided. Operating expenses include the cost of services, administrative expenses and depreciation on capital assets. All other expenses that do not meet this classification are reported as nonoperating expenses. Net position: Net position is categorized as net investment in capital assets net of related debt, restricted or unrestricted. The first category represents capital assets, less accumulated depreciation and net of any outstanding debt associated with the acquisition of capital assets. Restricted net position represents. amounts that are restricted by requirement of debt indenture. Unrestricted net position represents the net position of the Fund which is not restricted for any project or purpose. Employee benefit plans: For purposes of measuring the net pension liability,deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the plan net position of the Miami Beach General Employees' Retirement Plan ("MBERP") and additions to/deductions from the MBERP plan net position has been determined on the same basis as they are reported by the MBERP. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Post-Employment Benefits Other Than Pensions: Government Accounting Standards Board (GASB Statement No. 45), Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions (OPEB), was effective for the Fund beginning with its year ending September 30, 2008. This Statement improves the relevance and usefulness of financial reporting by requiring systematic, accrual basis measurement and recognition of OPEB cost (expense) over a period that approximates - 15- Parking System Enterprise Fund of The City of Miami Beach, Florida Notes to Financial Statements employees' years of service and provides information about actuarial accrued liabilities associated with OPEB and whether, and to what extent, progress is being made in funding the plan. Pursuant to'Section 112.08, Florida Statutes,the City is required to permit eligible retirees and their eligible dependents to participate in the City's health insurance program at a cost to the retirees that is no greater than the cost at which coverage is available for active employees. This coverage extends to Fund employees. _ The City has the authority to establish and amend funding policy. The annual cost(expense) of the City's Plan is calculated based on the Annual Required Contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liability over a period not to exceed 30 years. Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows, liabilities, deferred inflows, and disclosures of • contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from management's estimates. Recent accounting pronouncements adopted/implemented: In June 2015, the GASB issued Statements No. 74, "Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans". The objective of this Statement is to improve the usefulness of information about postemployment benefits other than pensions included in:the general purpose external financial reports of state and local governmental OPEB plans for making decisions and assessing accountability.This Statement is effective and was implemented for the Fund's fiscal year ended September 30, 2017. • In August 2015, the GASB issued Statement No. 77, "Tax Abatement Disclosures". The objective of this Statement is to require disclosure of tax abatement information about(1)a reporting government's own tax abatement agreements and(2)those that are entered into by the government and that reduce the reporting government's tax revenues. This Statement is effective for the Fund's fiscal year ended September 30, 2017. In December 2015, the GASB issued Statement No. 78, "Pensions Provided through Certain Multiple- Employer Defined Benefit Pension Plans". The objective of this Statement amends the scope and applicability of Statement 68 to exclude pensions provided to employees of state or local governmental employers through a cost-sharing multiple-employer defined benefit pension plan that (1) is not a state or local governmental pension plan, (2)is used to provide defined benefit pensions both to employees of state or local governmental employers and to employees of employers that are not state or local governmental employers, and (3) has no predominant state or local governmental employer (either individually or collectively with other state or local governmental employers that provide pensions through the pension plan). This Statement establishes requirements for recognition and measurement of pension expense, expenditures, and liabilities; note disclosures; and required supplementary information for pensions that have the characteristics, described above. This Statement is effective for the Fund's fiscal year ended September 30, 2017. This statement had no effect on the Parking System Fund. In December 2015, the GASB issued Statement No. 79, "Certain External Investment Pools and Pool Participants". The objective of this Statement is to address for certain external investment pools and their participants the accounting and financial reporting implications that result from changes in the regulatory provisions referenced by previous accounting and financial reporting standards. Those provisions were based on the Investment Company Act of 1940, Rule 2A7. Rule 2A7 contains the Securities and Exchange Commission's regulations that apply to money market funds and were significantly amended in 2014. The - 16- Parking System Enterprise Fund of ) The City of Miami Beach, Florida Notes to Financial Statements provisions of this Statement are effective for financial statements for the Fund's financial year ending September 30, 2016, except for certain provisions on portfolio quality, custodial credit risk, and shadow pricing which are effective for financial statements for the Fund's financial year ending September 30,2017. This statement had no effect on the Parking System Fund. In January 2016, the GASB issued Statement No. 80, "Blending Requirements for Certain Component Units". The objective of this Statement is to improve financial reporting by clarifying the financial statement presentation requirements for certain component units. This Statement amends the blending requirements for the financial statement presentation of component units of all state and local governments. The additional criterion requires blending a component unit incorporated as a not for-profit corporation in which the primary government is the sole corporate member.The additional criterion does not apply to component units included in the financial reporting entity pursuant to the provisions of Statement No. 39, "Determining Whether Certain Organizations Are Component Units".This Statement is effective for the Fund's fiscal year ended September 30, 2017. This statement had no effect on the Parking System Fund. In March 2016,the GASB issued Statement No.82,"Pension Issues—an Amendment of GASB Statements No. 67, No, 68 and no. 73". The objective of this Statement is to address certain issues that have been raised with respect to Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for Pensions,and No.73,Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68. Specifically, this Statement addresses issues regarding (1)the presentation , of payroll-related measures in required supplementary information, (2) the selection of assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3) the classification of payments made by employers to satisfy employee (plan member) contribution requirements. The requirements of this Statement are effective for the Fund's financial year ending September 30,2017, except for the requirements of this Statement for the selection of assumptions in a circumstance in which an employer's.pension liability is measured as of a date other than the employer's most recent fiscal year-end. In that circumstance, the requirements for the selection of assumptions are effective for that employer in the first reporting period in which the measurement date of the pension liability is on or after June 15, 2017. The new disclosures were added to Note 12 and in the Required Supplementary Information. NOTE 2-Pooled Cash and Investments The Fund's cash and investments at September 30, 2017 was$94,147,617. The Fund participates in the City's pooled cash and investment system to maximize earnings and facilitate cash management. The equity in the City's pooled cash and investment system is available to the Fund on a demand basis. As of September 30,2017,the Fund's equitable share in the City's pooled cash and investments was 9.3%. The City is responsible for the treasury management function for all Funds. Therefore, risk disclosure information by Fund is not available. See the City's Comprehensive Annual Financial Report for disclosures relating to the interest rate risk, credit risk, custodial credit risk and concentration of credit risk. The purpose of the Fund's restricted cash is to pay the Fund's advanced deposits, advanced permit sales, and debt service. - 17- Parking System Enterprise Fund of The City of Miami Beach, Florida Notes to Financial Statements NOTE 3-Capital'Assets Capital assets activity for the year ended September 30, 2017 was,as follows: Beginning Increases/ • Decreases/ Ending Balance Adjustments Adjustments Balance Capital assets, not being depreciated: Land $ 18,844,498 $ $ $ 18,844,498 Air Rights 4,318,059 4,318,059 Construction in progress 24,777,470 27,061,328 2,396,753 49,442,045 Total capital assets, not being depreciated 47,940,027 27,061,328 2,396,753 72,604,602 Capital assets, being depreciated: Buildings and structures 101,828,217 191,242 102,019,459 Parking meters 19,458,529 60,551 19,519,080 Furniture, equipment and \,ehicles 6,089,809 1,542,747 65,590 7,566,966 Improvements other than buildings 9,314,771 1,230,703 10,545,474 Total capital assets, being depreciated 136,691,326 3,025,243 65,590 139,650,979 Less accumulated depreciation for: Buildings and structures 30,288,292 2,485,070 32,773,362 Parking meters 10,995,810 2,095,357 13,091,167 Furniture, equipment and vehicles 4,141,704 704,667 65,591 4,780,780 Improwments other than buildings 4,581,743 548,312 5,130,055 Total accumulated depreciation 50,007,549 5,833,406 65,591 55,775,364 Total capital assets, being depreciated, net 86,683,777 (2,808,163) (1) 83,875,615 Total capital assets, net $ 134,623,804 $ 24,253,165 $ 2,396,752 $ 156,480,217 Interest charges incurred by the Fund were$5,138,073 of which $1,683,263 was capitalized as part of the cost of capital assets under construction and$3,454,810 charged as part of non-operational expenses. NOTE 4-Outstanding Contracts At September 30, 2017, the Fund had in process various uncompleted construction projects totaling $15,609,827. Of that total, $242,666 or 1.6% is to be funded from parking operations and $15,367,161 or 98.4% is to be funded from the proceeds of prior bond issues. - 18- Parking System Enterprise Fund of The City of Miami Beach, Florida i Notes to Financial Statements NOTE 5-Debt On November 16, 2010, the City issued$17,155,000 in Parking Revenue Refunding Bonds, Series 2010A and $27,405,000 in Parking Revenue Bonds, Series 2010B. The Series 2010A Bonds are being issued by the City for the purpose of providing funds, together with other available moneys, to (i) current refund the City's outstanding Parking Revenue Bonds, Series 1997, previously issued in the aggregate principal amount of $21,000,000, (ii) fund a deposit to the Reserve Account and (iii) pay costs of issuance of the Series 2010A Bonds. The Series 2010A Bonds were issued with interest rates of 3.00% to 5.00% payable semiannually on March 1 and September 1, and will mature serially through September 1, 2022. The Series 2010B Bonds are being issued by the City for the purpose of providing funds, together with other available moneys, to (i) pay the costs of acquiring and constructing a new parking garage and other capital improvements to the Parking System, (ii) fund a deposit to the Reserve Account and (iii) pay costs of issuance of the Series 2010B Bonds. The Series 20106 Bonds were issued with interest rates of 4.00% to 5.00% payable semiannually on March 1 and September 1, and will mature serially through September 1, 2040. On December 15, 2015, the City issued $58,825,000 in Parking Revenue Bonds, Series 2015. The Series 2015 Bonds are being issued for the purpose of providing funds to finance a portion of the costs of constructing a new parking facility and improvements to a surface parking lot to service the City's convention center, which is being renovated, and pay the costs of issuing the Series 2015 Bonds. The Series 2015 Bonds were issued with interest rates of 3.00% to 5.00% payable semiannually on March 1 and September 1,and will mature through September 1, 2045. Parking Revenue Fund bonded indebtedness at September 30, 2017 is comprised of the following issued indebtedness: Original September 30, Issue 2017 $ 17,155,000 Series 2010A Parking Re\enue Refunding Bonds due in annual installments $ 7,405,000 through 2022; interest at 3.00% -5.00% 27,405,000 Series 2010B Parking Revenue Bonds due in annual installments 27,405,000 through 2040; interest at 4.00% -5.00% 58,825,000 Series 2015 Parking Reenue Bonds due in annual installments 58,750,000 through 2045: interest at 3.00% -5.00% $ 93,560,000 - 19- Parking System Enterprise Fund of The City of Miami Beach, Florida Notes to Financial Statements At September 30, 2017, the Fund did not have any defeased debt. The aggregate maturities of long-term debt outstanding at September 30, 2017, are as follows: Fiscal Year Principal Interest Total 2018 $ 1,670,000 $ 4,579,713 $ 6,249,713 2019 1,740,000 4,512,913 6,252,913 2020 1,805,000 4,444,113 6,249,113 2021 1,895,000 4,354,663 6,249,663 2022 1,990,000 4,261,613 6,251,613 2023-2027 11;365,000 19,891,483 31,256,483 2028-2032 14,375,000 16,875,657 31,250,657 2033-2037 18,320,000 12,937,500 31,257,500 2038-2042 23,375,000 7,876,500 31,251,500 2043-2045 17,025,000 1,730,250 18,755,250 93,560,000 81,464,405 175,024,405 Plus: Net unamortized bond premium 6,097,647 6,097,647 $ 99,657,647 $ 81,464,405 $ 181,122,052 All parking.revenue bonds are payable from and secured by'a lien-on and pledge of net revenues derived from the operation of the City's parking system. The total principal and interest remaining to.be paid on all ' Parking bonds is$175,024,405. Principal and interest paid for the current year and total customer net revenues were$6,252,713 and $14,900,983 respectively. In February 20, 2008, the City entered into a new loan agreement that allows the City to be reimbursed for the purchase of machinery and equipment up to a maximum of$37,500,000. The,interest rates on this loan agreement range from 1.9%to 4.5%. At September 30, 2017,the Fund was indebted for$57,875. The aggregate maturity of the loan at September 30, 2017 is as follows: Year Ending Loan September 30, Principal Interest Total 2018 $ 15,555 $ 1,084 $ 16,639 2019 11,850 791 12,641 2020 11,066 548 11,614 2021 10,360 311 10,671 2022 7,054 121 7,175 2023 1,990 15 2,005 $ 57,875 $ 2,870 $ 60,745 -20- Parking System Enterprise Fund of The City of Miami Beach, Florida Notes to Financial Statements Changes in long-term liabilities: September 30, September 30, 2016 2017 Ending 2017 Ending Due Within Balance Additions Payments Balance One Year Revenue bonds $ 95,160,000 $ - $ (1,600,000) $ 93,560,000 $ 1,670,000 Add: Series 2010A premium 263,795 - (78,994)- 184,801 - Less: Series 2010B discount (418,645) - 25,249 (393,396) - Add: Series 2015 premium 6,614,526 - (308,284) 6,306,242 - Total bonds payable 101,619,676 - (1,962,029) 99,657,647 1,670,000 Loan 98,570 - (40,695) 57,875 15,555 Net pension liability 17,157,101 - (1,316,284) 15,840,817 - Compensated absences 915,611 20,212 - 935,823 571,008 Total long-term liabilities $. 119,790,958 '$ 20,212 $ (3,319,008) $ 116,492,162 $ 2,256,563 NOTE 6 -Fees The City charges the Fund in connection with providing various accounting and other related services. During fiscal year 2017,the Fund paid the City$2,147,591 in administrative fees and$3,372,929 in charges for internal services which was reduced by $67,591 received for the management of 7th street Garage. Fees were based upon the approved City budget for the fiscal year ended September 30, 2017. NOTE 7-Transfers and Due To/Due From Other Funds Transfers are used to move revenue from the Fund that statute or budget requires collecting them to the fund that statute or budget requires expending them. During the fiscal year ended September 30 2017,the Fund contributed $6,474,996 from its surplus to the City's general fund. These transfers and capital contributions were approved in the fiscal year 2016-2017 adopted budget. Transfers for the year ended September 30, 2017 consisted of the following: Transfer to/from the City: Transfers out $ (6,474,996) Transfers in - $ (6,474,996) -21 - Parking System Enterprise Fund of The City of Miami Beach, Florida Notes to Financial Statements NOTE 8-Operating Leases The Fund serves as the lessor for tenants leasing various buildings, parking lots and office and retail facilities. The tenant leases are considered operating leases, which expire at various dates through fiscal year 2053. For leases that contain predetermined fixed escalations of the minimum rentals, the Fund recognizes the related rental revenue on the straight-line basis over the initial lease term. Future minimum lease receivables under the operating leases at September 30, 2017, are as follows: Year Ended September 30, Leases 2018 $ 846,143 2019 846,143 2020 846,143 2021 846,143 2022 846,143 ' 2023-2027 3,592,629 2028-2032 3,442,629 2033-2037 3,442,629 2038-2042 3,325,982 2043-2047 3,125,642 2048-2052 2,831,049 $23,991,276 The following schedule provides an analysis of the City's investment in property under operating leases and property held for lease by major classes as of September 30, 2017: Parking Facility - $ 450,218 Retail Space 8,266,061 Less: Accumulated Depreciation (5,337,976) Net Book Value of Leased Assets $ 3,378,303 NOTE 9 -Risk Management The City is exposed to various risks of loss from civil liability to other parties (automobile liability, general liability, police professional liability and public official liability); statutory workers' compensation benefits for injured employees; and the theft or accidental damage to City property (buildings and business contents). The City established an internal service Risk Management Fund to account for its risk financing activities. The Risk Management Fund pays for all claims and judgments made against the City for accidental losses for which the City is self-insured, and the premium costs for insurance policies to protect the City's property. The Risk Management Fund derives revenue from all City departments through an allocation formula and from investment income earned on reserved funds. The required funding levels of reserves and future needs were determined by the actuarial study performed by an external actuarial firm. The City funds and reserves on an"occurrence"basis, reserving for anticipated;and known claims when they occur, regardless of the ultimate date of payment or disposition. The City's Risk Management Fund charges the Fund insurance premiums. The amount of the annual premium charged to the Fund by the City represents the maximum liability of the Fund for any related losses incurred each fiscal year. Consequently,the Fund does -22- Parking System Enterprise Fund of The City of Miami Beach, Florida Notes to Financial Statements not retain its own liability on outstanding cases or claims against it beyond the maximum premium paid. The Fund paid $1,425,000 to the Risk Management Fund for fiscal year 2017. NOTE 10-Contingencies The Fund, in the normal course of operations, is a party to various actions in which plaintiffs have alleged certain damages. In all cases,management does not believe the disposition of these matters will materially affect the financial position of the Fund. NOTE 11 -Postemployment Benefits Other than Pension Benefits(OPEB) The Fund's Annual Required Contribution (ARC) to the OPEB trust for fiscal year ended September 30, 2017 was based on an actuarially determined amount for the City. The Fund paid $97,772 to the OPEB Trust which was allocated based on the Fund's covered payroll as a percentage of the City's total covered payroll. The Fund's share1for fiscal.year 2017 was $97,772. This was fully funded hence the Fund does not have a net OPEB obligation or a net OPEB asset. Readers should refer to Note 16 of the City's 2016 Comprehensive Annual Financial Report for detailed and comprehensive information on OPEB. NOTE 12-Pension Plan Miami Beach Employees' Retirement System (MBERP) Summary of Significant Accounting Principles The Plan financial statements are prepared using the accrual basis of accounting. Member contributions are recognized as revenues in the period in which the contributions are due. Fund contributions are recognized as revenues when clue pursuant to actuarial valuations. _Benefits and refunds are recognized when due and payable in accordance with the terms of the Plan. Interest income is recorded as earned and dividend income is recorded as of the ex-dividend date. Investments are recorded at fair value in the Statement of Plan Net Position. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The diversity of the investment types in which the Trust has entered into requires a range of techniques to determine fair value. Unrealized gains and losses are presented as net appreciation in fair value of investments on the Statement of Changes in Fiduciary Net Position along with gains and losses realized on sales of investments. Purchases and sales of investments are recorded on a trade-date basis. The preparation of financial statements in conformity with accounting principles generally accepted in the United State of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly,'actual results could differ from those estimates. _ Plan Description Pursuant to Modification 29 of the Florida State Social Security Agreement effective January 1, 1955 the City of Miami Beach does not participate in the Federal Old-Age and Survivors Insurance System (OASI) embodied in the Social Security Act. The Miami Beach Employees' Retirement Plan (the"Plan") is a single employer defined benefit pension plan for general employees established by the City of Miami Beach, Florida (the "City") effective March 18, 2006. The Plan is treated as a cost-sharing plan to the Fund. The Miami Beach Employees' Retirement System was created under and by the authority of Chapter 18691, Laws of Florida, Act of 1937, as amended, by merging the"Retirement System for General Employees of the City of Miami Beach" created by Ordinance 1901 with the "Retirement System for Unclassified Employees and Elected Officials of the City of Miami Beach".created by Ordinance 88-2603, as amended. -23- Parking System Enterprise Fund of The City of Miami Beach, Florida Notes to Financial Statements Members are full-time employees, classified and unclassified positions, who work more than 30 hours per week except for policemen and firemen and persons who elect to join the defined contribution retirement Plan sponsored by the City. Membership consisted of the following as of October 1, 2015, the date of the latdst accrual valuation: Substantially all full-time employees of the Authority are provided with pensions through the Miami Beach Employees' Retirement Plan (the Plan)—a single employer defined benefit pension plan administered by the City of Miami Beach, Florida. The Plan issues a publicly available financial report that can be obtained at http://web.miamibeachfl.gov/mberp. The benefit provisions and all other requirements are established and may be amended by City ordinance. The plan provides for retirement benefits as well as death and disability benefits at three different tiers depending on when the members entered the Plan: The First Tier is for members that entered the Plan prior to the Second Tier Dates. The Second Tier is for members that entered the Plan on or after the Second Tier Dates, but before the Third Tier Dates. The Third Tier is for members that entered the Plan on or after the Third Tier Dates. Both the Second Tier and Third Tier Dates were established when each of the unions bargained with the City to establish new guidelines for retirement benefits relating to employees associated with their Unions. The Second Tier Dates are April 30, 1 993 for members of AFSCME;August 1, 1993 for those classified as Other and GSAF, and February 21, 1994 for members of CWA. The Third Tier Dates are September 30, 2010 for members of AFSCME, GSAF and for those classified as other, and October 27, 2010 for members of CWA. Classified members administered under the First Tier are eligible for normal retirement at age 50 and five years of Creditable Service and are entitled to benefits of 3% of Final Average Monthly Earnings (FAME) multiplied by the first 15.years of Creditable Service plus 4% of FAME multiplied by years of service in excess of 15 years, with the total not to exceed 90% of FAME. First Tier unclassified members accrued • 4% for creditable service before October 18, 1992. Unclassified First Tier members accrued 3% per year of service after October 18, 1992, with the total not to exceed.80% of FAME. Classified and unclassified members administered under the Second Tier are eligible for Normal Retirement at age 55 and five years of creditable service and are entitled to benefits of 3% of FAME multiplied by creditable service, subject to a maximum of 80% of FAME. Classified and unclassified members administered under the Third Tier are eligible for Normal Retirement at age 55 with at least 30 years of creditable service, or age 62 with at least five years of creditable service and are entitled to benefits of 2.5%of FAME multiplied by creditable service, subject to a maximum of 80% of FAME. For elected officials, City Manager or City Attorney, the benefit is 4%of FAME for each year of creditable service as an elected official, city manager or city attorney plus the retirement benefit as defined above for any other period of city employment, subject to a maximum of 80% of FAME Final average monthly earnings (FAME) means one-twelfth of the average annual earnings during the highest two paid years of credible service. For Unclassified First Tier members who became a member prior to October 18, 1992 and was continuously a member from that date until March 18, 2006, FAME is defined as the larger of one-twelfth average covered salary during the two highest paid years of creditable service or one-twelfth of the pay of the year immediately preceding March 18, 2006. Effective as of September 30,2010, FAME for members who have obtained normal retirement age or are within 24 months from normal retirement age is defined as average covered salary during the two highest paid years of creditable service. FAME for those members who as of September 30,2010 are between 24 and 36 months from normal retirement age is defined as average covered salary during the three highest paid years of creditable service. FAME for those members who as of September 30,2010 are between 36 and 48 months from normal retirement age is defined as average covered salary during the four highest paid years of creditable service. FAME for those members who as of September 30, 2010 are more than 48 months -24- Parking System Enterprise Fund of The City of Miami Beach, Florida Notes to Financial Statements from normal retirement age is defined as average covered salary during the five highest paid years of creditable service. A Member with five or more years of creditable service may, at any time prior to retirement, elect to purchase a maximum.of two years additional creditable service. Effective September 30, 2013, Members whose classification is included in the.CWA and GSAF bargaining unit and Members who are not included in any collective bargaining unit shall not be eligible to purchase additional creditable service. Effective April 23, 2015, members whose classifications are included in the AFSCME bargaining unit are not eligible to purchase additional creditable service. Any First Tier member who terminates employment may either request a refund of their own contributions plus interest, or receive their accrued benefit beginning at age 50, if at least five years of creditable service are completed. Any Second Tier member who entered on or after the Second Tier Date and who terminates employment after five years of creditable service may either request a refund of their own contributions plus interest or receive their accrued benefit beginning at age 55. Any Third Tier member who entered on or after the Third Tier Date and who terminates employment after five years of creditable service but prior to the normal or early retirement date shall be eligible to receive a normal retirement benefit at age 62. Deferred retirement option plan (DROP) A DROP was enacted on January 28, 2009 by Ordinance 2009-3626. Under this Plan, First and Second Tier members who have attained eligibility for Normal Retirement may continue working with the City for up to three years, while receiving a retirement benefit that is deposited into a DROP account. Third Tier members may participate in a DROP account for up to five years. Effective July 17,2013, Members within .classifications in the CWA bargaining unit who were hired prior to October 27, 2010, and Members not included in any bargaining unit who were hired prior to September 10,,2010, may elect to retire for the purposes of the Plan but continue employment with the City for up to sixty months, and have their monthly retirement benefit paid into a DROP account during the DROP period. Effective October 1; 2013, any member within classifications in the GSAF bargaining may elect to retire for the purposes of the Program but continue employment with the City for up to sixty'months, and have-their monthly retirement paid into a DROP account during the DROP period. Effective April 23, 2014, members within classifications in the AFSCME bargaining unit who were'hired prior to September 30, 2010, may elect to retire for the purposes of the Plan but continue employment with the City for up to sixty months, and have their monthly retirement benefits paid into a DROP account during the DROP period. The amount of the benefit is calculated as if the participant had retired on the date of DROP commencement. Upon termination with the City, the accumulated value of the DROP account is distributed to the participant. A member's creditable service, accrued benefit and compensation calculation shall be frozen. A series of investment vehicles which are established by the board of trustees are made available to DROP participants to choose from. Any losses, charges, or expenses incurred by the participant in their DROP account are not made up by the City or the Trust, but shall be borne by the participant. Upon termination of employment, a member may receive distributions in accordance with the Plan. A DROP participant shall not be entitled to receive an ordinary or service disability retirement and in the event of death of a DROP participant, there shall be no accidental death benefit for pension purposes. DROP participation does not affect any other death or disability benefit provided to a member under federal law, state law, City ordinance, or any rights or benefits under any applicable collective bargaining agreement. First and Second Tier members receive an annual cost-of—living adjustment(COLA) of 2.5%. The COLA is not payable while members are in the DROP. For Third Tier members the COLA is 1.5%. As of September 30, 2017, there were 129 members in the DROP and the value of DROP investment was $16,100,212, which is included in the Plan's net position. The DROP also allows for member loans. $244,000 in loans were outstanding as of September 30, 2017. _ • -25- Parking System Enterprise Fund of The City of Miami Beach, Florida Notes to Financial Statements Funding Policy, Contributions Required and Contributions Made The City is to contribute such amounts as are necessary to maintain the actuarial soundness of the Plan and to provide the Plan with assets sufficient to meet the benefits to be paid to the members. All First Tier members who participate are required,to contribute 12% of their covered salary to the Plan. All Second , and Third Tier members are required to contribute 10%of their covered salary. The City Commission has the authority to increase or decrease contributions. For the fiscal year ended September 30, 2017, the Fund was required to make contributions of$2,278,000 or 28.72%of covered payroll to the Plan in accordance with actuarially determined requirements computed through an actuarial valuation performed as of October 1, 2015. For the year ended September 30, 2017, the employees contributed $793,269. Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to Pensions The Fund's proportionate share of the net pension liability was based on its share of the City's fiscal year 2017 contributions relative to the fiscal year 2017 contributions of all participating members. At September 30, 2017, the Fund's proportionate share was 7.74%. For the year ended September 30, 2017,the Fund recognized pension expense adjustment of($452,770). At September 30,2017,the Fund reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Deferred Inflows of Resources Resources Differences between expected and actual experience $ 101,982 $ 133,075 Changes in assumptions 1,150,240 Net difference between projected and actual earnings on per 809,623 - City contributions subsequent to measurement date 2,272,915 - • $ 4,334,760 $ 133,075 Fund contributions subsequent to the measurement date were$2,272,915. The subsequent contributions are reported as deferred outflows of resources relating to pensions and will be recognized as a reduction of the net pension liability in the year ended September 30, 2018. The other components of deferred outflows of resources and deferred inflows of resource s relating to pensions will be recognized in pension expense in future periods,as follows: Year ended September 30: Parking 2018 $ 732,938 2019 649,498 2020 699,835 2021 (153,501) Total $ 1,928,770 -26- Parking System Enterprise Fund of The City of Miami Beach, Florida Notes to Financial Statements The following methods and assumptions were made used to determine the total pension liability at the actuarial valuation date of October 1, 2015. The actuarial valuation was rolled forward to the September 30, 2017 measurement date. Actuarial Cost Method Entry Age Normal Inflation 3.0% Salary Increases 4.5% to 7.0% depending on service, including inflation Investment Rate of Return 7.70% Retirement Age Experience-based table of rates that are specific to the type of eligibility condition RP-2000 Combined Healthy Participant Mortality Mortality Table for males and females with mortality improvements projected after year 2000 to the year 2010 using Scale AA. Net Pension Liability of the Fund The components of the net pension liability of the Fund at September 30, 2017 were as follows: Total Pension Liability $ 58,795,221 Plan's Fiduciaty net position (42,954,404) Fund net pension liability $ 15,840,817 The actuarial assumptions used in the October 1, 2015 valuation were based on the results of an actuarial experience study for the period October 1, 2003 through September 30, 2009. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target and best estimate of arithmetic real rates of return for each major asset class are summarized in the following table: Target Long-Term Nominal Asset Class Allocation Rate of Return Domestic equities 39% 4.67% Fixed income 28 0.97 International equities 16 5.81 Real Estate 10 3.72 Infrastructure 7 5.28 Total 100% Discount A single discount rate of 7.70%was used to measure the total pension liability.This is a decrease of 0.15% from the discount rate of 7.85% used in the prior measurement.This single discount rate was based on the -27- Parking System Enterprise Fund of The City of Miami Beach, Florida Notes to Financial Statements expected rate of return on Pension Plan investments of 7.70%. The projection of cash flows used to determine this single discount rate assumed that Plan member.contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the total actuarially determined contribution rates and the member rate. Based on these assumptions, the Pension Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current Plan members. Therefore, the long-term expected rate of return on Pension Plan investments(7.70%)was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the net pension liability to changes in the discount rate The following present the Plan's net pension liability,calculated using a single discount rate of 7.70 percent, as well as what the Plan's net pension liability would be if it were calculated using a single discount rate that is 1-percentage-point lower or 1-percentage-point higher: Current Single Discount Rate 1% Decrease Assumption 1% Increase 6.70% 7.70% 8.70% $ 22,526,083 $ 15,840,817 $ 10,236,486 Historical trend information is presented in the required supplementary information schedules following the notes to the financial statements to show the changes in the net pension liability and the contributions to the plan. Financial Statements Detailed information about the pension plan's fiduciary net position is available in the separately issued Employee Retirement System Financial report. Complete financial statements can be obtained at the following office: City of Miami Beach Employee Retirement System 1700 Convention Center Drive Miami Beach, Florida 33139 -28- REQUIRED SUPPLEMENTARY INFORMATION ( RSI) • PARKING SYSTEM ENTERPRISE FUND of the CITY OF MIAMI BEACH,FLORIDA SCHEDULE OF CONTRIBUTIONS BY EMPLOYER AND OTHER CONTRIBUTING ENTITIES MIAMI BEACH EMPLOYEES'RETIREMENT SYSTEM(MBERP) (Unaudited) 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Actuarially determined contribution $ 2,272,915 $ 2,186,000 $ 2,062,849 $ 1,996,219 $ 1,694,714 $ 1,354,343 $ 1,174,715 $ 1,214,993 $ 912,157 $ 980,160 Actual contribution 2,278,000 2,186,000 2,062,849 1,996,219 1,694,714 1,354,343 1,174,715 1,214,993 912,157 980,160 Contribution deficiency(excess) $ (5,085) $ - $ - $ - $ - $ - $ - $ - $ - $ Covered payroll $ 7,932,694 $ 6,435,622 $ 6,421,646 $ 5,954,106 $ 5,194,970 $ 5,110,369 $ 5,587,142 $ 4,969,751 $ 4,822,501 $ 4,201,467 Actual contribution as a%of covered payroll 28.72% 33.97% 32.12% 33.53% 32.62% 26.50% 21.03% 24.45% 18.91% 23.33% Notes to Schedule of Contributions Valuation Date October 1,2015 Notes Actuarially determined contributions are calculated as of October 1,which is two years prior to the end of the fiscal year in which contributions are reported. Methods and Aseemptions Used to Determine Contribution Rates Actuarial Cost Method Entry Age Normal Amortization Method Level Dollar,Closed Remaining Amortization Period 30 years Asset Valuation Method 5-year smoothed market _ Inflation 3.0% Salary Increases 4.5%to 7.0%depending on service,including inflation Investment Rate of Return 7.70% • Retirement Age Experience-based table of rates that am specific to the type of eligibility condition Mortality RP-2000 Combined Healthy Participant Mortality Table for males and females with mortality improvements projected after 2000 to the year 2010 using Scale AA. -29- PARKING SYSTEM ENTERPRISE FUND of the CITY OF MIAMI BEACH,FLORIDA SCHEDULE OF THE FUND'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY AND RELATED RATIOS MIAMI BEACH EMPLOYEES'RETIREMENT SYSTEM(MBERP) (Unaudited) 2011 2016 2015 Fund's proportion of the net pension liability 7.74% 7.93% 7.80% Fund's proportinate share of total pension liability $58,795,221 $ 57,399,621 $ 53,314,510 Fund's proportionate share of fiduciary net position 42,954,404 40,242,520 40,278,247 Fund's proportionate share of the net pension liability $15,840,817 $ 17,157,101 $ 13,036,263 Plan fiduciary net position as a percentage of the total pension liability 73.06% 70.11% 75.55% Fund's covered payroll $ 6,435,622 $ 6,421,646 $ 5,954,105 Fund's proportionate share of the net pension liability as a percentage of its covered-employee payroll 246.14% 267.18% 218.95% *Information provided for only 3 years,the Fund will present additional years, until ten years of data is available. Notes to Schedule: This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is compiled, information is presented for those years for which information is available. The amounts presented for each fiscal year were determined as of the year-end that occurred one year prior. From fiscal year 2016 to 2017,the discountrate used to determine the net pension liability decreased from 7.85%to 7.70%. From fiscal year 2015 to 2616,the discount rate used to determine the net pension liability decreased from 8.00%to 7.85%. Effective as of October 1, 2016 the discount rate assumption was lowered from 7.70% to 7.65% and the mortality assumption was changed to the same mortality rates used for Regular Class members of the Florida Retirement System(FRS)in their Actuarial Valuation as of July 1,2016.These assumption changes were not reflected as of the September 30, 2016 measurement date. See Discussion of Valuation Results in the October 1, 2015 and the October 1, 2016 Actuarial Valuation Reports. -30- A' Crowe Horwath, Crowe Horwath LLP Independent Member Crowe Horwath International INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Honorable Mayor and City Commissioners City of Miami Beach, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the Parking System Enterprise Fund (the"Fund")of the City of Miami Beach, Florida (the"City") as of and for the year ended September 30, 2017, and the related notes to the financial statements, which collectively comprise the Fund's financial statements,and have issued our report thereon dated May 25,2018.As discussed in Note 1, the financial statements present only the Fund and do not purport to, and do not, present fairly the financial positions-of the City,as of September 30,2017,and the changes in its financial position,or where applicable its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Internal Control Over Financial Reporting • In planning and performing our audit of the financial statements,we considered the Fund's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control. Accordingly,,we do not express an opinion on the effectiveness of the Fund's internal,control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees,in the normal course of performing their assigned functions,to prevent,or detect and correct, misstatements on a timely basis.A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Fund's• financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However,, material weaknesses may exist that have not been identified. - -31 - i Compliance and Other Matters As part of obtaining reasonable assurance about whether the Fund's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing,and not to provide an opinion on the effectiveness of the Fund's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Fund's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Crowe Horwath LLP Miami, Florida May 25, 2018 • -32- PARKING SYSTEM ENTERPRISE FUND of the CITY OF MIAMI BEACH SCHEDULE OF FINDINGS YEAR ENDED SEPTEMBER 30, 2017 SECTION I -SUMMARY OF AUDITOR'S RESULTS FINANCIAL STATEMENTS Type of auditor's report issued Unmodified Internal control over financial reporting: Material weakness identified No Significant deficiency identified not considered to be material weakness None reported Noncompliance material to financial statements noted No SECTION II—FINANCIAL STATEMENT FINDINGS No items to report. -33- PARKING SYSTEM ENTERPRISE FUND of the CITY OF MIAMI BEACH SUMMARY OF PRIOR YEAR AUDIT FINDINGS YEAR ENDED SEPTEMBER 30, 2017 SUMMARY OF PRIOR YEAR AUDIT FINDINGS FINANCIAL STATEMENT FINDINGS Material Weakness 2016-001 Bank reconciliations Criteria: Policies and procedures should reasonably assure that bank accounts are reconciled in a timely manner. Condition: We noted that there were several accounts which had not been reconciled within 30 days of the bank statement dates. Current Year Status: Finding has been resolved Significant Deficiencies - 2016-002 IT Controls Criteria: Information Systems controls should reasonably assure that electronic information is not compromised by unauthorized access to systems and that access is granted only as needed for individuals within the entity to perform their assigned responsibilities while maintaining adequate segregation of duties. Condition: We noted the following with respect to the City's information systems: 1. Management does not perform a periodic review of access to validate the appropriateness of each user with access to Munis. 2. Termination process — during our interim procedures, we noted that eight terminated user accounts were still active which could lead to unauthorized activity. During our year end procedures, we noted that the eight employees' accounts had been disabled. Current Year Status: Finding has been resolved. 2016-003 Schedule of Expenditure of Federal Awards and State Financial Assistance Criteria: Policies and procedures should reasonably assure that Federal award and State financial assistance expenditures be accurately reflected on the Schedule of Expenditure of Federal Awards and State Financial Assistance. Condition: We noted that there was one Federal award and two State projects amounts that had to be adjusted on the final Schedule of Expenditure of Federal Awards and State Financial Assistance received from the City. Current Year Status: Finding has been resolved. • -34- 1 Crowe Horwath. Crowe Horwath LLP Independent Member Crowe Horwath International INDEPENDENT ACCOUNTANT'S REPORT ON COMPLIANCE WITH SECTION 218.415,FLORIDA STATUTES To the Honorable Mayor and Members of the City Commission City of Miami Beach, Florida We have examined the Parking System Enterprise Fund's (the"Fund")compliance with Section 218.415, Florida Statutes, concerning the investment of public funds during the year ended•September 30, 2017. Management of the Fund is responsible for the Fund's compliance with those requirements. Our responsibility is to express an opinion on the Fund's compliance with the specified requirements based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and the standards applicable to attestation engagements contained in Government Auditing Standards issued by the Comptroller General of the United States. Those • standards require that we plan and perform the examination to obtain reasonable assurance about whether the City complied, in all material respects with the specified requirements referenced above. An examination involves performing procedures to obtain evidence about whether the City complied with the specified requirements.The nature,timing,and extent of the procedures selected depend on our judgment, including an assessment of the risks of material noncompliance,whether due to fraud or error.We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does not provide a legal determination on the Fund's compliance with specified requirements. In our opinion, the Fund complied, in all material respects, with the requirements contained in Section 218.415, Florida Statutes for the year ended September 30,2017. The purpose of this report is solely to comply with Chapter 10.550, Rules of the Florida Auditor General. Accordingly,this report is not suitable for any other purpose. Crowe Horwath LLP Miami, Florida May 25,2018 -35 • - ATTACHMENT D to I Am B EAc H 2017 RDA FINANCIALS' 2019-092-JC AUDITING SERVICES PROCUREMENT DEPARTMENT 1755 Meridian Avenue, 3rd Floor Miami Beach, Florida 33139 . ',..‘...41----tit-7--11,111' pp f ( t- ' • * -4��'t "+ -T `'` 1Vt I' ' . . � , C3 ti '41I ice^ i .` s t t L /''�11 1=. g , , ,. 4,,,,...;.*.gt.,...t.1,., 17...i.',...,,11:111::1 L...L. L . , I , Miami Beach Redevelopment Agency . "tl ,-..,,‘vt . iti. ., (A component Unit of the City of Miami Beach, Florida) • ;!, �,p;,0'* '4 , , .,, 14 tb' ,I 1 I ' - ' 1 Financial Report r. , p P .•÷ 0 i' For the Fiscal Year Ended September 30, 2017 c. Wit' 4. , , . , G x � , • 1 / 1f • i •4 r!• .tet kti,'1+ *.{"`fit. Ryl ; '1.'1' 2 , ,lam;'•' , 1 t 2 m V 1 . w ti r ♦iK ,4 ,«,,, . 1"�r.I ,-,•ice .!ip,- + n. Prepared by: 7. , ... F,/4,,,,,,44(�' w 0 , . ,,, , , .., ,, .* ;,,, ... -4 '~ r The Finance Department ,i1 '� Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Financial Report Fiscal Year Ended September 30,2017 PREPARED BY THE FINANCE DEPARTMENT s.n,wt Table of Contents Independent Auditor's Report 1 -2 Management's discussion and analysis (Unaudited) 3— 13 Basic financial statements: Government-wide financial statements: Statement of net position 14— 15 Statement of activities 16 Fund financial statements: Governmental funds: Balance sheet 17 Reconciliation of governmental funds balance sheet to the statement of net position 18 Statement of revenues, expenditures and changes in fund balances 19 Reconciliation of the statement of revenues, expenditures and changes in fund balances of governmental funds to the statement of activities 20 Enterprise funds: Statement of net position 21 Statement of revenues, expenses and changes in fund net position 22 Statement of cash flows 23 Notes to financial statements 24—55 Required supplementary information (unaudited): Schedule of Contributions— Retirement Systems 56 Schedule of the Agency's proportionate share of the net pension liability— Retirement Systems 57 Notes to the Retirement Systems Schedules 58-59 Budgetary comparison schedule—general fund 60 Notes to budgetary comparison schedule 61 Supplementary information: Budgetary comparison schedule—debt service fund 62 Other Reports: Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 63—64 Schedule of Findings 65 Summary of Prior Year Audit Findings 66 Management Letter 67-68 Independent Accountant's Report on Compliance with Section 218.415, Florida Statutes 69 Crowe Horwath® Crowe Horwath LLP Independent Member Crowe Hoiwath International INDEPENDENT AUDITORS REPORT To the Honorable Mayor and Members of the City Commission City of Miami Beach, Florida Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities and each major fund,of the Miami Beach Redevelopment Agency(the"Agency"),a component unit of the City of Miami Beach, Florida (the"City"), as of and for the year ended September 30, 2017, and the related notes to the financial statements,which collectively comprise the Agency's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements • Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America;this includes the design, implementation,and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on'our audit.We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements,whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall financial statement presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion,the financial statements referred to above present fairly, in all material respects,the respective financial . position of the governmental activities,the business-type activities,and each major fund of the Agency,as of September 30, 2017, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1, the financial statements present only the Agency and do not purport to, and do not, present fairly the financial position of the City of Miami Beach, Florida as of September 30, 2017, the changes in its financial position, or where applicable its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter. 1 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, schedule of contributions, schedule of proportionate share of the net pension liability, and budgetary comparison schedule on pages 3 to 13,page 56,page 57,and page 60 to 61,respectively,be presented to supplement the basic financial statements. Such information,although not a part of the basic financial statements, is required by Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational,economic,or historical context.We have applied certain limited procedures to the required supplementary information in accordance withauditingstandards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Agency's basic financial statements. The budgetary comparison schedule for thedebt service fund is presented for purposes of additional analysis and is not a required part of the basic financial statements.The budgetary comparison schedule for the debt service fund has not been subjected to the auditing procedures applied in the audit of the basic financial statements,and accordingly,we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 22, 2018 on our consideration of the Agency's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Agency's internal control over financial reporting and compliance. Crowe Horwath LLP Miami,Florida May 22,2018 2 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Management's Discussion and Analysis September 30, 2017 The Management's Discussion and Analysis (the "MD&A") of the Miami Beach Redevelopment Agency (the "Agency") is intended to provide an overview of the Agency's position and results of operations for the fiscal year ended September 30, 2017. The MD&A is an element of the reporting model required by the Governmental Accounting Standards Board (the "GASB") Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis- for State and Local Governments issued in 1999. The MD&A should be read in conjunction with the Agency's financial statements, including the accompanying notes, to enhance the understanding of the Agency's financial performance. Financial Highlights • The assets of the Agency exceeded its liabilities at the close of fiscal year 2017 by$211.1 million (net position). • The Agency's net_position increased by $23.0 million. The governmental net position increased by $21.9 million and the business-type net position increased by$ 1.1 million. • Business Type Activity revenue increased by$0.8 million and expenses increased by$0.4 million. • Governmental activities revenue increased by$8.9 million and expenses decreased by$2.3 million. • At September 30, 2017 fund balance in the Agency's governmental funds was $283.4 million. This includes $69.7 million restricted fund balance in the general fund and $213.7 million of restricted fund balance in the capital projects fund. • The Agency's total long-term liabilities decreased by $8.9 million or 2.5% during the current year. The decrease is due to the Agency's normal principal payments on its debt. See Note 6 and 7 for more information regarding the bonds. • The Agency's assets and deferred outflows increased by approximately $30.2 million or 5.3%. The increase is attributed to an increase of capital assets of$81.9 million, a decrease of deferred outflows of$0.8 million, and a decrease in current assets of$50.9 million Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Agency's basic financial statements, which have the following components: 1) government-wide financial statements, 2)fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the Agency's finances in a manner similar to a private-sector business. The statement of net position presents information on all of the Agency's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Agency is improving or deteriorating. The statement of activities presents information showing how the Agency's net position changed during each fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in the statement for some items that will only result in cash flows in future fiscal periods. 3 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Management's Discussion and Analysis September 30, 2017 - Both of the government-wide financial statements listed above distinguish functions of the Agency that are principally supported by taxes and intergovernmental revenues from other functions that are intended to recover all or a significant portion of their cost through user fees and charges. The governmental activities of the Agency include general government, public safety, physical environment, transportation, economic environment and culture and recreation. The business-type activity of the Agency includes the parking and leasing operations of the Anchor and Pennsylvania Avenue Garages and Anchor and Pennsylvania Avenue Shops, respectively. The government-wide financial statements can be found on pages 14—16 of this report. Fund Financial Statements A fund is a grouping of related accounts that_is used to maintain control over resources that have been segregated for specific activities or objectives. The Agency uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the Agency can be divided into two categories: governmental funds and-proprietary funds. Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. Governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of a fiscal year. Such information may be useful in evaluating a government's near- term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing c decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate the comparison between governmental funds and governmental activities. Key elements'of the reconciliation of these two statements are that the government-wide statements report the issuance of debt as a liability, the purchases of capital assets as assets which are then charged to expense over their useful lives (depreciated) and changes in long-term liabilities as adjustments of • expenses. Conversely, the governmental funds statements report the issuance of debt as another financing source of funds, the repayment of debt as expenditure, the purchase of capital assets as expenditure_and do not reflect changes in long-term liabilities. The Agency maintains three individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, City Center debt service fund, and City Center capital projects fund which are considered to be major funds. For the current fiscal year, the Agency does not have any non-major governmental funds. Proprietary Funds The Agency maintains-two different types of proprietary funds or enterprise funds. The Agency uses enterprise funds to account for the parking and leasing operations of the Anchor and Pennsylvania Avenue Garages and Anchor and Pennsylvania Avenue Shops, respectively. The proprietary fund financial statements provide separate information for parking and leasing of the Anchor and Pennsylvania Avenue Garage/Shops which are considered to be major funds of the Agency. For the current fiscal year, the Agency does not have any non-major proprietary funds. 4 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Management's Discussion and Analysis September 30, 2017 The basic proprietary fund financial statements can be found on pages 21-23 of this report. Notes to the Financial Statements The notes to the financial statements provide additional information that is essential for a full understanding of the information provided in the government-wide and fund financial statements. The noted to the financial statements can be found on page 24-55 of this report. The Agency is considered a component unit of the City of Miami Beach, Florida and as such, the financial information of the Agency is included in the City's Comprehensive Annual Financial Report for the current fiscal year. Government-Wide Financial Analysis The table below summarizes the statement of net position: Summary of Net Position(in thousands) Governmental Activities Business-Type Activities Total 2017 2016 2017 2016• 2017 2016 Current and other assets $ 312,650 $ 364,325 $ 27,497 $ 26,721 $ 340,147 $ 391,046 Capital assets 228,042 145,566 23,960 24,548 252,002 170,114 Total assets 540,692 509,891 51,457 51,269 592,149 561,160 Deferred Outflows 3,149 3,909 - - 3,149 3,909 Total deferred outflows 3,149 3,909 - - 3,149 3,909 Long-term liabilities 343,521 352,448 214 166 343,735 352,614 Other liabilities 40,049 22,949 373 1,368 40,422 24,317 Unearned revenue _ 75 75 75 75 Total liabilities 383,570 375,397 662 1,609 384,232 377,006 Deferred Inflows 11 - - - 11 - Total deferred outflows 11 - - 11 - Net position: Net invesment in capital assets 135,017 65,240 23,960 24,548 158,977 89,788 Restricted for debt service - 16,154 - - - 16,154 Restricted for economic development 69,731 39,238 - - 69,731 39,238 Restricted for capital improvement 36,836 43,414 - - 36,836 43,414 Unrestricted(deficit) (81,324) (25,643) 26,835 25,112 (54,489) (531) Total net position $ 160,260 $ 138,403 $ 50,795 $ 49,660 $ 211,055 $ 188,063 There are six basic transactions that can affect the comparability of the Statement of Net Position. They are as follows: I 1) Net results of activities will impact (increase/decrease) current assets and unrestricted net position. 2) Borrowing for capital will increase assets and long term debt. 3) Spending borrowed proceeds on new capital will reduce current assets and increase capital assets. 4) Spending non-borrowed current assets on new capital will reduce current assets and increase capital assets as well as reduce unrestricted net position and increase invested in capital assets, net of debt. 5) Principal payments on debt will reduce current assets and reduce long-term debt as well as reduce unrestricted net position and invested in capital assets, net of debt, if applicable. 6) Reduction of capital assets through depreciation will reduce capital assets and invested in capital assets, net of debt. 5 • Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) • Management's Discussion and Analysis September 30, 2017 As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the Agency, assets exceeded liabilities by$211.1 million at September 30, 2017, an increase of$23.0 million or 12.2% from September 30, 2016. Governmental activities accounted for an increase of$21.9 million while Business-type accounted for an increase of$1.1 million. The Agency's net position represents resources that are subject to external restrictions on how they may be used. There are also various normal impacts on revenue and expense that can affect the change in net position from year to year. The economic condition, which can reflect a declining, stable or growing economic environment, can have a substantial impact on tax revenue as well as the public's spending habits on fees and charges for services. An increase/or decrease in Commission approved rates can have a substantial impact on parking revenue if there is a current year increase/decrease in an approved rate. Also, current market condition may cause investment income to fluctuate from year to year. Impacts on expense from year to year could result from new programs, an increase or decrease in personnel, salary increases and of course inflation. The table below summarizes the change in net position: Summary of Changes in Net Position (in thousands) Governmental Activities Business-Type Activities Total 2017 2016 2017 2016 2017 2016 Revenues: Program Revenues: Charges for services $ - $ 28 $ 6,099 $ 5,391 $ 6,099 $ 5,419 General Revenues: Taxes: Property taxes 51,843 44,176 - - 51,843 44,176 Investment earnings 2,669 1,452 149 86 2,818 1,538 • Total revenues 54,512 45,656 6,248 5,477 60,760 51,133 • Expenses: General government 6,500 6,236 - - 6,500 6,236 Public safety 4,430 4,852 - - 4,430 4,852 Physical environment 47 45 - - 47 45 Transportation ',1;, 1,675 1,379 - - 1,675 1,379 Economic environment 3,250 2,755 - - 3,250 2,755 Culture and recreation 2,632 2,439 - - 2,632 2,439 Parking-Anchor&Penn.Garage - - - 4,597 4,261 4,597 4,261 Leases-Anchor&Penn.Shops - - 516 502 516 502 Interest on long-term debt 13,640 16,751 - - 13,640 16,751 Total expenses 32,174 34,457 5,113 4,763 37,287 39,220 Increase in net position before transfers and gain(loss)on sale of capital assets 22,338 11,199 1,135 714 23,473 11,913 Gain(loss)on sale of Capital Assets - 4 - 1 - 5 Transfers (481) (7,769) - - (481) (7,769) Increase in net position 21,857 3,434 1,135 715 22,992 4,149 Net position,beginning as restated 138,403 134,969 49,660 48,945 188,063 165,548 Net position,ending $ 160,260 $ 138,403 $ 50,795 $ 49,660 $ 211,055 $ 169,697 The Remainder of this Page was Intentionally Left Blank 6 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Management's Discussion and Analysis - September 30, 2017 Governmental activities increased the Agency's net position by$21.9 million. Key elements of the net increase are as follows: • Total expenses from governmental activities in fiscal 2017 totaled $32.2 million. This is a decrease of $2.3 million or 6.6%from the prior year. • Revenues from governmental activities in fiscal year 2017 totaled $54.5 million, an increase of$ 8.9 million from 2016. The increase is primarily due. to the increase in tax increment revenue which increased by$7.7 million of 17.36%from the prior year. • Business-Type Activities Business-type activities increased the Agency's net position by approximately$1.1 million. Key elements of this increase are as follows: • The Parking Garages' net position increased by $0.2 million or 0.7%. The garage funds have an increase in charges for service of$0.2 million or 4.0%. Permits, rental and other operating revenues increased by$0.1 million or 21.1%. Total operating expenses increased by$0.3 million or 7.9%. • The Leasing Shops' net position increased by $0.9 million or 7.9%. Interest income increased by $22,722 or 68.5% and operating revenues increased by $0.4 million or 49.8% from the prior year. Operating expenses in the shops had a net increase of $13,563 or 2.7% over the prior year. The shops had decrease in administration fees of $47,460 or 65.5%; these fees represent charges to the general fund to pay for direct and indirect staff support for the agency. The Remainder of this Page was Intentionally Left Blank 7 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Management's Discussion and Analysis September 30, 2017 The following chart shows a comparison of expenses to program revenues for business-type activities for fiscal year 2017: Expenses and Program Revenues Business-type Activities September 30, 2017 5,000 4,500 4,000 3,500 3,000 c 2,500 ■Program_Revenue t= 2,000 • ■Program Expenses 1,500 1,000 i, 8 s y'P 500• k_ �� 4 :111.1 Parking-Anchor&Penn Leases-Anchor&Penn Shops Garages Governmental Funds The focus of the Agency's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Agency's financing requirement. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. Total fund balance for the Governmental Funds totaled $283.4 million at September 30, 2017. This is a total decrease of$68.6 million or approximately 19.5%. The general fund is the chief operating fund of the Agency. The fund balance of the Agency's general fund had a net increase in fund balance of$30.5 million during the current fiscal year. The general fund's tax increment revenues increased by $7.7 million or 17.4%. Tax increments revenue is computed by applying the operating tax rate for the City and Miami-Dade County, Florida, (the County) multiplied by the increased value of property in the district over the base property value minus 5%. Fluctuations in tax increment revenue is based on real estate property values City wide. The Agency's General Fund is required to adopt an annual budget prepared on a basis consistent with generally accepted accounting principles. _ The agency's debt service fund had a decrease in net position of $ 16.2 million. Principal and interest payments on the tax increment revenue bonds were$21.7 million. Net transfers from the general fund to pay debt service expenditures were$5.5 million. 8 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Management's Discussion and Analysis September 30,2017 The agency's capital project fund had a net decrease in fund balance of$82.9 million. This fund received $2.2 million from interest income. Capital expenditures increased by $49.9 million or 141.9% compared to FY 2016. The Agency's Capital Projects Fund accounts for the financing of the Agency's capital program. The primary resources are obtained from the receipt of tax increment funds from Miami-Dade County and from the issuance of Agency debt. Financial Analysis of the Governmental Funds As noted earlier, the Agency uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. The table below summarizes the 'changes in the fund balances of the Agency's governmental funds: Capital Total Debt Service Projects Governmental General City Center City Center Funds Fund balance, September 30, 2016 $ 39,238 $ 16,154 $ 296,635 $ 352,027 Revenues 52,274 - 2,238 54,512 Expenditures , 15,787 21,667 85,188 122,642 Other financing sources (uses) 7 (5,994) 5,513 - (481) Fund balance, September 30, 2017 $ 69,731 $ - $ 213,685 $ 283,416 Proprietary Funds The Agency's proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The total growth in net position for both proprietary funds was approximately $1.1 million. Other factors concerning the finances of these funds have already been addressed in the discussion of the Agency's business-type activities. Budgetary Highlights The following information is presented to assist the reader in comparing the original/final budget(Adopted Budget) and the actual results. The major variance between the adopted/final budget and actual is the resort tax revenues collected. Fluctuations in resort tax revenues are completely based on the fluctuation in the sales of the above item and vary from one year to another based on the economy and tourism. Actual expenditures were $15.8 million; $14.2 million less than budgeted. The difference with budgeted amounts was mainly in the General Government functions. These variances of the actual versus budgeted expenditures within these functions were due to the contingencies relating to debt service requirements of the agency. 9 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Management's Discussion and Analysis September 30, 2017 General Fund Revenues The following charts and tables summarize actual revenues by category for fiscal year 2017 and compares actual revenues with the Adopted/Final Budget: General Fund Revenues Fiscal Year 2017 (in thousands) 0 60,000 50,000 - n `' -` 40,000 f 0 Final Budget 30,000 „ ; ',F 0 Actual 0,0 } . 20,000 .' "', n 10,000 0 ,..! Tax increment Interest General Fund Revenues Fiscal Year 2017 (in thousands) Final Adopted Actual Budget Amounts Revenues: Tax increment(property taxes) $ 51.861 $ 51,843 Interest income 60 _ 431 Total revenues $ 51,921 $ 52,274 The Remainder of this Page was Intentionally Left Blank 10 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Management's Discussion and Analysis September 30, 2017 General Fund Expenditures The following chart and table summarize actual expenditures by function/program for fiscal year 2017 and compare the actual expenditures with the Final Budget: General Fund Expenditures Fiscal Year 2017 Millions 25 1 _ O Final Budget 0 20 IL105 .c' / _ V a a+ . N d w i d d do av) oc � m co RI c .. 0 G1 C 0 V ill W c V ~ W General Fund Expenditures Fiscal Year 2017 (in thousands) Final Adopted Actual Budget Amounts Expenditures: General government $ 19,656 $ 6,061 Public safety 4,539 4,401 Economic environment 3,268 3,250 Culture and recreation 1,368 958 Capital outlay 1,117 1,117 Operating transfers out 21,973 5,994 Total expenditures $ 51,921 $ 21,781 11 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Management's Discussion and Analysis September 30, 2017 Capital Assets and Debt Administration Capital Assets The Agency's investment in capital assets for its governmental and business-type activities as of September 30, 2017 amounts to $252.0 million (net of accumulated depreciation). This investment in capital assets includes land, buildings and structures, vehicles, machinery and equipment, streetscape improvements, restorations and renovations and construction work-in-progress, which are detailed as follows (net of accumulated depreciation): Capital Assets (in thousands) Governmental Activities _ Business-Type Activities Total 2017 2016 2017 2016 2017 2016 Land and land improvements $ 10,818 $ 10,818 $ 3,003 $ 3,003 $ 13,821 $ 13,821 Buildings and structures 20,153 20,612 20,576 21,306 40,729 41,918 Machinery and equipment 130 155 381 54 511 209 Furniture and fixtures 473 361 - - 473 361 Streetscape improvements 33,291 31,960 - - 33,291 31,960 Restorations and renovations 24,209 25,231 - - 24,209 25,231 Construction in progress 138,968 56,429 - 185 138,968 56,614 Totals $ 228,042 $ 145,566 $ 23,960 $ 24,548 $ 252,002 $ 170,114 The Agency has developed various capital improvement programs to improve the quality of life for the residents of the City of'Miami Beach. Recent major projects included the restoration of the City Center Historic District, Collins Park parking garage, Bass Museum interior space,enhancement, and a Lincoln Road master plan study. Major on-going projects include streetscape improvements. Additional information on the Agency's capital assets can be found in the notes to the financial statements. Major capital asset events in progress during the current fiscal year include the following: • The City Center Right of Way (ROW) BP9B Infrastructure Improvement Project includes the restoration and enhancement of right-of-ways/streetscapes throughout City Center; including roadway, sidewalk, curb and gutter, landscape, streetscape irrigation, lighting, potable water, and storm drainage infrastructure as needed. • Collins Park Parking Garage is going to be a new parking facility which will accommodate approximately 470 parking spaces and 17,000 sf of ground floor retail space. • Lincoln Road Master Plan Study is to determine needed improvements for Lincoln Road considering the Convention Center District Plan, change uses of Lincoln Road, intensity of uses, Planning/defining connections with other adjacent or nearby urban assets and long-term maintenance of Lincoln Road. • Bass Museum Interior Space Expansion to house additional gallery space and other amenities. • Convention Center Renovation Project includes the complete renovation and facade modifications of the of the Miami Beach Convention Center, an expansion to include a ballroom and auxiliary spaces, rooftop parking, new public parks, as well as underground utilities and streetscape improvements in the immediate vicinity. 12 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Management's Discussion and Analysis September 30,2017 Outstanding Debt At the end of the current fiscal year, the Agency had a total debt outstanding in the governmental activities of $342.7 million. The debt balance decreased by $8.3 million during the year due to,annual principal payments on the 2015A and 2015B Tax Increment Bonds. Miami Beach Redevelopment Agency's Outstanding Debt (in thousands) Governmental Activities 2017 2016 Tax increment revenue bonds $ 342,669 $ 350,985 Economic Factors and Future Developments _ The Redevelopment Agency has continued to focus its efforts on a number of initiatives aimed at upgrading the area's infrastructure, streets and parks, alleviating traffic and parking congestion and encouraging the continued increase in tourism in the. In 2014, the Redevelopment'Agency amended its Redevelopment Plan for City Center to better define the Convention Center redevelopment project and related infrastructure initiatives which are anticipated to increase the number of high-value conventions to the City.. Additionally, this amendment included an extension of the Redevelopment Agency's term of existence through 2044. The Redevelopment Agency's has stayed true to its mission to coordinate, implement and fund the Plan's objectives and to compliment the City's established vision: • Policing Culture • Management and Service Delivery • Infrastructure • International Center for Tourism and Business • Educational Excellence The Redevelopment Agency's objective over the next five years shall focus on the implementation of capital projects associated with, but not limited to the Master Plan for the expansion of the Convention Center, reconstruction of the Lincoln Road pedestrian mall, upgrading streetscapes and related infrastructure in the City Center area and increasing the inventory of parking facilities, including the pending construction of a new parking garage and artist space to be located on 23rd street and Collins Avenue. The RDA shall also continue to fund public service enhancements provided for under the Community Policing Program as well as ensure the on-going maintenance of capital assets funded with TIF. Requests for Information This financial report is designed to provide a general overview of the Miami Beach Redevelopment Agency's finances for all those with an interest in its finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to The Miami Beach Redevelopment Agency, Finance Department, 1700 Convention Center Drive, Miami Beach, Florida 33139. 13 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Statement of Net Position September 30, 2017 Governmental Business-Type Activities Activities Total Assets Current assets: Cash and investments $ 69,402,165 $ 27,044,215 $ 96,446,380 Receivables (net): J Accounts receivables 3,384 59,676 63,060 Interest 378,662 - 378,662 Prepaid expenses - 101,165 101,165 Total current assets 69,784,211 27,205,056 96,989,267 Noncurrent assets: Restricted cash and investments 242,865,980 291,872 243,157,852 Capital assets not being depreciated: Land 10,817,763 3,003,282 13,821,04'Z Construction in progress 138,968,216 - 138,968,216 Capital assets net of accumulated depreciation: Buildings and structures 20,153,554 20,576,383 40,729,937 Streetscape improvements 33,290,769 - 33,290,769 Restorations and renovations 24,208,883- - 24,208,883 Machinery and equipment 129,815 380,662 510,477 Furniture and fixtures 472,734 - 472,734 Total capital assets 228,041,734 23,960,327 252,002,061 Total noncurrent assets 470,907,714 24,252,199 495,159,913'$ Total assets 540,691,925 51,457,255 592,149,180 Deferred outflows of resources Uanmortized refunding costs 754,482 - 754,482 GASB 68-Employees retirement plan 347,099 - 347,099 GASB 68-Police&fire retirement plan 2,047,664 - 2,047,664 Notal deferred outflows of resources 3,149,245 - 3,149,245 Total assets and deferred ' outflows of resources $ 543,841,170 $ 51,457,255 $ 595,298,425 (Continued) ' • 14 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Statement of Net Position September 30, 2017 Governmental Business-Type Activities Activities Total Liabilities Current liabilities: Accounts payable $ 26,579,262 $ 318,504 $ 26,897,766 Retainage payable 2,166,595 - 2,166,595 Accrued expenses 2,803,267 26,741 2,830,008 Due to other governments - 24,603 24,603 Unearned Revenue - 75,190 75,190 Deposits - 2,680 2,680 Portion due or payable within one yer: Environmental remediation 200,000 - 200,000 Accrued compensated absences `109,984 - 109,984 Bonds payable 8,190,090 - 8,190,090 Total current liabilities 40,049,198 447,718 40,496,916 Long-term liabilities: Net pension liability -MBERP 1,268,843 - 1,268,843 Net pension liability -MBF&P 7,607,398 - 7,607,398 Deposits - 214,002 214,002 Portion due or payable after one year: • Accrued compensated absences 166,242 - 166,242 Bonds payable 334,478,884 - 334,478,884 Total long-term liabilities 343,521,367 214,002 343,735,369 Total liabilities 383,570,565 661,720 384,232,285 Deferred inflows of resources GASB 68-Employees retirement plan 10,659 - 10,659 Total deferred inflows of resources 10,659 - 10,659 Net position Net investment in capital assets 135,016,717 23,960,327 158,977,044 Restricted for: Economic development 69,730,637 - 69,730,637 Capital improvement 36,836,204 - 36,836,204 Unrestricted (81,323,612) 26,835,208 (54,488,404) Total net position $ 160,259,946 $ 50,795,535 $ 211,055,481 See Notes to Financial Statements. 15 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Statement of Activities Fiscal Year Ended September 30,2017 - Program Revenues Net(Expense)Revenue and Changes in Net Position Charges Capital Grants Capital Grants for and - and Governmental Business-Type Expenses Services Contributions Contributions Activities Activities Total Activities: Governmental: General govemment $ 6,500,456 $ , - $ - $ - $ (6,500,456) $ - $ (6,500,456) Public safety 4,429,549 - - - (4,429,549) - (4,429,549) Physical environment 46,714 - - - (46,714) - (46,714) Transportation 1,675,146 - - - (1,675,146) - (1,675,146) Economic environment 3,250,066 - - - (3,250,066) - (3,250,066) Culture and recreation 2,632,017 - - - (2,632,017) - (2,632,017) Interest on long-term debt 13,640,464 - - - (13,640,464) - (13,640,464) Total governmental activities 32,174,412 - - - (32,174,412) - (32,174,412) Business-type: - Parking—Anchor&Penn. Garages 4,597,056 4,752,412 - - - 155,356 155,356 Leasing—Anchor&Penn.Shops 515,963 1,346,548 - - - 830,585 830,585 Total business-type activities 5,113,019 6,098,960 - - - 985,941 985,941 Total primary government $ 37,287,431 $ 6,098,960 $ - $ - (32,174,412) 985,941 (31,188,471) General revenues: Taxes: Tax increments for redevelopment districts 51,843,091 - 51,843,091 Investment income 2,669,393 149,880 2,819,273 Transfers to the primary government (481,324) - (481,324) Total general revenues - 54,031,160 149,880 54,181,040 Changes in net position 21,856,748 1,135,821 22,992,569 Net position, beginning 138,403,198 49,659,714 188,062,912 Net position,ending $ 160,259,946 $ 50,795,535 $ 211,055,481 • See Notes to Financial Statements. • 16 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Balance Sheet Governmental Funds September 30, 2017 Total Governmental General Fund Debt Service Capital Projects Funds Assets Cash and investments $ 71,188,220 $ - $ 241,079,925 $ 312,268,145 Receivables: Accounts receivable 3,384 - - 3,384 Interest - - 378,662 378,662 Total assets $ 71,191,604 $ - $ 241,458,587 $ 312,650,191 Liabilities and Fund Balances Liabilities: Accounts payable $ 1,188,218 $ - $ 25,391,044 $ 26,579,262 Retainage payable - - 2,166,595 2,166,595 Accrued expenses 72,749 - 215,649 288,398 Environmental remediation 200,000 - - 200,000 Total liabilities 1,460,967 - 27,773,288 29,234,255 Fund balances: Restricted 69,730,637 - 213,685,299 283,415,936 Total fund balances 69,730,637 - 213,685,299 283,415,936 Total liabilities and fund balances $ 71,191,604 $ - $ 241,458,587 $ 312,650,191 See Notes to Financial Statements. 17 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position September 30, 2017 Total fund balance—governmental funds $ 283,415,936 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore, are not reported in the governmental funds. Those assets consist of: Land $ 10,817,763 Construction in progress 138,968,216 Buildings and structures, net 20,153,554 Street improvements, net 33,290,769 Restoration and renovations, net 24,208,883 Machinery and equipment, net 129,815 Furniture and fixtures, net 472,734 Total capital assets, net 228,041,734 Long-term liabilities applicable to governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. Interest on long-term debt is not accrued in governmental funds, but rather is • recognized as an expenditure when due. All,liabilities, both current and long- term, are reported in the statement of net position. Balances at September 30, 2017 are: Accrued interest on bonds (2,514,869) Bonds payable (315,600,000) Premium on bonds payable (27,068,974) Accrued compensated absences (276,226) Net pension liability-MBERP (1,268,843) Net pension liability-MBF&P (7,607,398) Total long-term liabilities (354,336,310) In governmental funds, deferred outflows and inflows of resources relating to pensions and debt are not reported because they are applicable to future' periods. In the statement of net position, deferred outflows and inflows of resources relating to pensions are reported. Deferred outflows relating to unamortized refunding 754,482 Deferred outflows of resources relating to MBERP 347,099 Deferred outflows of resources relating to MBF&P 2,047,664 Deferred inflows of resources relating to MBERP (10,659) Total deferred resources 3,138,586 Total net position of governmental acitivities $ 160,259,946 See Notes to Financial Statements. 18 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds Fiscal Year Ended September 30,2017 Total Governmental General Fund Debt Service Capital Projects Funds Revenues Tax increment $ 51,843,091 $ - $ - $ 51,843,091 Interest 430,918 - 2,238,475 2,669,393 Total revenues 52,274,009 - 2,238,475 54,512,484 Expenditures Current General govemment 6,061,344 - - 6,061,344 Public safety 4,400,734 - - 4,400,734 Economic environment , 3,250,066 - - 3,250,066 Culture and recreation 958,234 - 32,663 990,897 , Capital outlay 1,117,060 - 85,155,543 86,272,603 Debt service: Principal - 6,495,000 - 6,495,000 Interest - - 15,170,579 - 15,170,579 Other fiscal charges . - 754 - 754 Total expenditures 15,787,438 , 21,666,333 85,188,206 122,641,977 Excess of revenues over(under)expenditures 36,486,571 (21,666,333) (82,949,731) (68,129,493) Other financing sources(uses): Transfers in - 5,512,636 - 5,512,636 Transfers out (5,993,960) - - (5,993,960) Total other financing sources(uses) (5,993,960) 5,512,636 - (481,324) Net change in fund balances 30,492,611 (16,153,697) (82,949,731) (68,610,817) Fund balances, beginning 39,238,026 16,153,697 296,635,030 352,026,753 Fund balances,ending $ 69,730,637 $ - $ 213,685,299 $ 283,415,936 See Notes to Financial Statements. • • 19 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Fiscal Year Ended September 30, 2017 Net change in fund balances-governmental funds $ (68,610,817) The change in net position reported for governmental activities in the statement of activities is different because: Governmental funds report capital outlay as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. In the current period, these amounts are: Capital outlay 86,272,603 Adjustments for capital asset disposals (178,076) Depreciation expense (3,618,368) Excess of deletions and depreciation over capital outlay 82,476,159 The issuance of long-term debt (e.g., bonds)provides current financial resources to govemment funds, while the repayment of the principal of long-term obligations is an expenditure in the governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of issuance costs, premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. The statement of net position has been adjusted for transactions as follows: Net amortization of bond premiums, discounts, refunding, and other debt costs 1,559,006 Principal-debt service 6,495,000 Total long-term debt retirement and related transactions 8,054,006 Some expenses reported in the statement of activities do not require the use of current financial resources and therefore, are not reported as expenditures in the governmental activities section of the statement of net position: Increase in accrued compensated absences (52,199) Increase•in accrued interest on bonds (28,137) (80,336) In government funds, pension costs are recognized when employer contributions are made. In the statement of activities, pension costs are recognized on the accrual basis. This year, the difference between accrual-basis pension costs and actual employer contribution was: MBERP (49,436) MBF&P 67,172 Total pension costs 17,736 Change in net position of governmental activities $ 21,856,748 See Notes to Financial Statements. 20 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Statement of Net Position Enterprise Funds September 30, 2017 Business-Type Activities Enterprise Funds Parking Leasing Assets Fund Fund Total Current Assets: Cash and investments $ 16,721,702 $ 10,322,513 $ 27,044,215 Receivables: Rent, net of allowance - 59,676 59,676 Prepaid expenses 101,165 - 101,165 Total current assets 16,822,867 10,382,189 27,205,056 Noncurrent assets: Restricted cash and investments 82,910 208,962 291,872 Capital assets: Land 2,793,052 210,230 3,003,282 Buildingsand structures 28,426,115 2,397,145 30,823,260 Machinery and equipment 695,693 9,404 705,097 Less accumulated depreciation (9,725,034) (846,278) (10,571,312), Total capital assets(net of accumulated depreciation) 22,189,826 1,770,501 23,960,327 Total noncurrent assets 22,272,736 1,979,463 24,252,199 Total assets 39,095,603 12,361,652 51,457,255 Liabilities and Net Position Current liabilities: Accounts payable 318,504 - 318,504 Accrued expenses 11,696 15,045 26,741 Due to other govemment 19,269 5,334 24,603 Deposits 2,680 - 2,680 Unearned revenue 75,190 - 75,190 Total current liabilities 427,339 20,379 447,718 Noncurrent liabilities: Deposits 5,040 208,962 214,002 Total noncurrent liabilities 5,040 208,962 214,002 Total liabilities 432,379 229,341 661,720 Net position Net investment in capital assets 22,189,826 1,770,501 23,960,327 Unrestricted 16,473,398 10,361,810 26,835,208 Total net position $ 38,663,224 $ 12,132,311 $ 50,795,535 See Notes to Financial Statements. 21 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Statement of Revenues, Expenses and Changes in Fund Net Position— Enterprise Funds Fiscal Year Ended September 30, 2017 Business-Type Activities Enterprise Funds Parking Leasing Fund Fund Total Operating revenues: Charges for services $ 4,195,407 $ - $ 4,195,407 Permits, rentals and other 557,005 1,346,548 1,903,553 Total operating revenues 4,752,412 1,346,548 6,098,960 Operating expenses: Operating supplies 1,300 - 1,300 Contractual services 2,983,984 347,659 3,331,643 Utilities 133,621 17,501 151,122 Internal Charges 185,925 29,000 214,925 Administrative fees 423,000 25,000 448,000 Depreciation 734,467 77,352 811,819 Other 134,759 19,451 154,210 Total operating expenses 4,597,056 515,963 5,113,019 Operating income 155,356 830,585 985,941 ; Interest income 93,988 55,892 149,880 Total nonoperating revenues 93,988 55,892 149,880 Changes in net position 249,344 886,477 1,135,821 Total net position, beginning 38,413,880 11,245,834 49,659,714 Total net position, ending $ 38,663,224 $ 12,132,311 $ 50,795,535 See Notes to Financial Statements. 22 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Statement of Cash Flows Enterprise Funds Fiscal Year Ended September 30, 2017 Business-Type Activities Enterprise Funds Parking Leasing Fund Fund Total Cash Flows From Operating Activities: Receipts received from customers $ 4,758,941 $ 1,516,631 $ 6,275,572 Payments to suppliers (3,537,476) (382,152) (3,919,628) Receipts for other operating revenue (467,837) (276,467) (744,304) Net cash provided by operating activities 753,628 858,012 1,611,640 Cash Flows from Capital and Related Financing Activities: Purchase of capital assets (171,832) (52,445) (224,277) Net cash used in capital and related financing activities (171,832) (52,445) (224,277) Cash Flows From Investing Activities: Interest on investments 93,988 55,892 149,880 Net cash provided by investing activities 93,988 55,892 149,880 Net increase in cash and investments 675,784 861,459 1,537,243 Cash and investments—beginning of year 16,128,828 9,670,016 25,798,844 Cash and investments—end of year $ 16,804,612 $ 10,531,475 $ 27,336,087 Reconciliation of Operating Income to Net Cash Provided By Operating Activities Operating income $ 155,356 $ 830,585 $ 985,941 Adjustments to reconcile operating income to cash provided by operating activities: Depreciation 734,467 77,352 811,819 Provisions for uncollectible accounts (4,815) (66,176) (70,991) Changes in assets and liabilities: (Increase)decrease in receivables 11,121 236,259 247,380 (Increase)decrease in due from primary government 677,209 8,051 685,260 (Increase)decrease in prepaid expenses (101,165) - (101,165) Increase(decrease) in accounts payable (83,235) (11,469) (94,704) Increase(decrease)in accrued expenses (110,297) 15,045 (95,252) Increase(decrease)in due to othergovemments 10,885 (1,117) 9,768 Increase(Decrease)in due to primary government (536,121) (230,518) (766,639) Increase(decrease)in deposits 360 - 360 Increase(decrease)in unavailable other revenue (137) - (137) Total adjustments 598,272 27,427 625,699 Net cash provided by operating activities $ 753,628 $ 858,012 $ 1,611,640 See Notes to Financial Statements. • 23 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30, 2017 Note 1 -Summary of Significant Accounting Policies A. Financial Reporting Entity In February 1976, the Miami Beach Redevelopment Agency (the "Agency") was formed by the City of Miami Beach, Florida (the"City") under the provisions of Chapter 163 of the Florida Statutes. The Agency's stated purpose was to spur development and redevelopment in the South Pointe area of the City, an area which includes approximately 250 acres at the southern tip of the City, and a redevelopment area called the City Center/Historic Convention Village Redevelopment and Revitalization Area. During fiscal year 2006, the South Pointe district, under the Agency's jurisdiction expired, and at that point, the City assumed the responsibilities for the South Pointe area. At that time, the stated purpose became specifically the City Center/Historic Convention Village Redevelopment and Revitalization Area. Subsequent to its inception in March 1977, the City adopted the Agency's redevelopment plan which provided for the construction of residential housing, hotels, a marina and commercial, recreational and entertainment facilities. Because of the(desire of the City Commission to revise the concept for redevelopment of the South Pointe area, on December 17, 1982, the City Commission declared itself to be, and to constitute the Agency. This action resulted in the City Commissioners becoming the new Agency's Board Members and the City manager becoming the executive director of the Agency. The Agency's budget is adopted by its Board of Directors. The City Center/Historic Convention Village Redevelopment and Revitalization Area was formed in the same manner as the South Pointe Area. In March 1993, the City adopted the Agency's redevelopment plan for the City Center/Historic Convention Village Redevelopment and Revitalization Area, which called for the revitalization of the blighted area surrounding the Miami Beach Convention Center and Lincoln Road. The City has expended certain funds prior to and subsequent to the inception of the Agency for various projects, which have benefited the redevelopment area. These expenditures have been recorded in the accounting records of the City, and accordingly, are not reflected in the accompanying financial statements of the Agency. The City provides the Agency facilities for its operations. The Board of Directors of the Agency (the"Board") is comprised of the six members of the City Commission and the Mayor. The Agency meets the criteria for inclusion in the City's reporting entity as a blended component unit, and therefore, has been reported in the basic financial statements of the City. For financial reporting purposes, in accordance with Governmental Accounting Standards Board ("GASB") Codification Section 2100, the Agency includes those organizations and activities that are generally controlled by or dependent on the Agency. Control by or dependence of the Agency is determined on the basis of such factors as budget adoption, outstanding debt secured by revenue of the Agency and obligation of the Agency to finance any deficit that may occur. The Remainder of this Page was Intentionally Left Blank 24 � 1 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30, 2017 B,. Government-Wide and Fund Financial Statements The government-wide financial statements report information on all of the non-fiduciary activities of the Agency. For the most part, the effect of interfund activity has been removed from these statements. The government-wide focus is more on the sustainability of the Agency as an entity and the change in aggregate financial position resulting from the activities of the fiscal period. The fund financial statements focus on short-term results of operations and financing decisions at a specific fund level. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given functional category are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific functional category. The Agency's program revenue consists of charges to customers or applicants, who purchase use or directly benefit from goods, services or privileges provided by a given functional category. Taxes and other items not included among program revenues are reported instead as general revenues. C. Measurement Focus. Basis of Accounting and Financial Statement Presentation The basic financial statements consist of the government-wide financial statements and fund financial statements. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes (tax increments) are recognized as revenue in the year when levied for. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Only current assets and current liabilities are generally included on their balance sheet. Since the governmental fund statements are presented on a different measurement focus and basis of accounting than the government-wide governmental activities column, a reconciliation is necessary to explain the adjustments needed to reconcile the fund based financial statements to the governmental activities column of the government-wide presentation. Their operating statements present sources (revenue and financing sources) and uses (expenditures and other financing uses) of available spendable resources during the period. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Agency considers revenues to be available if they are collected within 45 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service, compensated absence and claims expenditures, are recorded only when the liability has matured and payment is due. Tax increment when levied for and interest associated with the current fiscal period, are all considered to be measurable and so have been recognized as revenues of the current fiscal period, if available. All other revenues are measurable upon receipt of cash and are recognized at that time. Amounts reported as program revenue in the government-wide financial statements include charges to customers or applicants for goods and services or privileges provided and, operating grants and contributions and capital grants and contributions restricted to a particular program. Internally dedicated resources are reported as general revenues rather than as program revenues. All taxes are included in general revenues. When both restricted and unrestricted resources are available for use, it is the Agency's policy to use restricted resources first, and then unrestricted resources as they are needed. 25 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30, 2017 The Agency reports the following major governmental funds: • The general fund is the general operating fund of the Agency. All financial resources, except those required to be accounted for in another fund, are accounted for in the general fund. • The City Center debt service fund is used to account for the accumulation of resources for the payment of general long-term debt, principal, interest and related costs associated with the City Center District. • The City Center capital projects fund accounts for financial resources to be used for the acquisition or construction of major capital facilities within the City Center District. Proprietary funds distinguish operating revenue and expenses from non-operating items. Operating revenue and expenses generally result from providing services in connection with a proprietary fund's principal ongoing operations. All revenue and expenses not meeting this definition are reported as non-operating revenue and expenses. The Agency established the use of proprietary funds to account for its business-type activities; accordingly, the operations of the Agency's parking and leasing activities are accounted for in separate enterprise funds. The Agency,reports the following major proprietary funds: • The Parking Fund accounts for the parking operations of the Anchor Garage and the Pennsylvania Avenue Garage, which are located within the City Center District. • The Leasing Fund accounts for the leasing operations of the Anchor Shops and the Pennsylvania Avenue Shops. The Anchor Shops and Pennsylvania Avenue Shops are both located within the City Center District. • The Remainder of this Page was Intentionally Left Blank • 26 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Notes to Financial Statements September 30,2017 D. Assets, Liabilities, Deferred Outflows/Inflows of Resources and Net Position/Fund Balance or Equity 1. Capital Assets Capital assets, which include property, vehicles, machinery, furniture and fixtures, are reported in the applicable governmental or business-type columns in the government-wide and proprietary fund financial statements. Capital assets are defined by the Agency as assets with an initial, individual cost as described below, and an estimated useful life in excess of one year. Such assets are recorded at historical costs or basedon valuations, which approximate cost. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the life of the asset are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. During the construction phase of capital assets, interest expense of business-type activities is included as part of the capitalized cost of the assets constructed. Property, furniture,and fixtures of the Agency are depreciated over the estimated useful lives using the straight- line method. The estimated useful lives and the capitalization threshold effective October 1, 2010, are as follows: Threshold Assets Capitalized All Years Land and other nondepreciable assets $ 100,000 N/A Construction work in progress 100,000 N/A Building and building improvements 100,000 35-50 Roads, sidewalks, foot bridges, and curbs and streets 100,000 30 Causeways, bridges, canals, and drainage systems 100,000 50 Guard rails, noise abatement, alley and seawalls, boardwork, walkways 100,000 30 Furniture and equipment 5,000 7 Maintenance and heavy moving equipment 5,000 15 Motor vehicles 5,000 5 Motor vehicles (greater than $50,000) 50,000 10 In governmental funds, capital outlay (capital assets) is reported as an expenditure and no depreciation expense is reported. 2. Cash and Investments Cash is comprised of deposits with financial institutions. Investments are comprised of U.S. Treasury obligations, money market funds and external governmental investment pools. For the purpose of the statement of cash flows for the proprietary fund types, cash and investments are short-term, highly liquid investmentswith an original maturity of three months or less. Investments are recorded at fair value using quoted market-price or the best available estimate thereof, except for those investments with remaining maturities of one year or less, when purchased, which are recorded at amortized cost, in accordance with GASB Statement No. 72 "Fair Value Measurement and Application" and/or No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools" where applicable. 27 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30, 2017 Note 1. Summary of Significant Accounting Policies(Continued) 3. Prepaid Items Expenditures made for services that will benefit periods beyond September 30, 2017 are recorded as prepaid expenses in the government-wide statements and proprietary fund statements. Accordingly, a portion of fund balance has been reserved to indicate that these funds are not available for appropriation. 4. Fund Equity/Net Position Fund Equity: GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, establishes criteria for classifying fund balances into specifically defined classification and clarifies definitions for governmental fund types. Fund balances for governmental funds are reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. a. Restricted Fund Balance - amounts that are restricted to specific purposes when constraints placed on the use of resources are either by (a) externally imposed by creditors (such as debt covenants), grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or.enabling legislations. b. Committed Fund Balance - amounts that can only be used for specific purposes pursuant to .constraints imposed by formal action of the government's highest level of decision making authority. The commission adopts -a City resolution, which includes the amount to be committed and the reason for the commitment. Only an adopted resolution by the Commission can establish, modify or rescind the commitment. c. Assigned Fund Balance — amounts that are constrained by the City Commission's or an official delegated by the governing body's (City Manager) intent to be used for specific purposes, but are neither restricted nor committed. Fund balance is primarily assigned based on the City's budgeting policy. Some amounts are approved and assigned by the City commission subsequent to September 30, 2017 i d. Unassigned Fund Balance— Includes residual positive fund balance within the General Fund which has not been classified within the other above mentioned categories. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those specific purposes. Net Position: The government-wide and proprietary funds financial statements utilize a net position presentation. Net Position is categorized as investment in capital assets, restricted or'unrestricted. The first category represents capital assets, less accumulated depreciation and net of any outstanding debt associated with the acquisition of capital assets. Restricted net position represents amounts that are restricted by requirement of debt indenture. Unrestricted net position represents the net position of the Agency which is not restricted for any project or purpose. 28 • Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Notes to Financial Statements September 30,2017 5. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of'America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from management's estimates. 6. Risk Management The City, which includes coverage for the Agency, is self-insured for health insurance, automobile liability, general liability, police professional liability, workers' compensation, theft and property damage. The Agency is charged a premium fee by the City's self-insurance fund. The Agency does not retain any risk beyond premiums paid to the City. For fiscal year ended September 30, 2017, the City charged the Agency $320,000 for health insurance, automobile liability, general liability, police professional liability and workers' compensation coverage. 7. Employee Benefit Plan The following is a brief description of the Agency employees' participation in the Miami Beach Employees' Retirement Plan and the City's Pension Fund for Firefighter's and Police (the"Plans"). Pursuant to Modification 29 of the Florida State Social Security Agreement, effective January 1, 1955, the City of Miami Beach does not participate in the Federal Old-Age and Survivors Insurance System (OASI) embodied in the Social Security Act. Instead, it provides eligible employees a comprehensive defined benefit pension. The City of Miami Beach does participate in the hospital insurance tax, also known as Medicare and withholds taxes accordingly. Readers should refer to Note 16 in the City's 2017 Comprehensive Annual Financial Report and Plan documents for detailed and comprehensive information on the Plans. • AU full-time employees of the City who work more than 30 hours per week and hold classified or unclassified positions, except for Policemen and Firemen, are covered by the Miami Beach Employees' Retirement Plan (the "Plan"). The Plan provides retirement benefits as well as death and disability benefits at two different tiers depending on when the employees entered the plan. All First Tier employees who participate are required to contribute 12% of their salary to the Plan. All Second Tier employees are required to contribute 10% of their salary. The Plan's funding policy provides for periodic employer contributions at actuarially determined rates that, expressed as percentages of annual covered payroll, are sufficient to accumulate sufficient assets to pay benefits when due. The City's Pension Fund for Firefighters and Police (the "Plan) is a defined benefit pension 'plan covering substantially all police officers and firefighters of the City. Members of the plan contribute 10% of their salary. The City is required to contribute an actuarially determined amount that, when combined with members' contributions, will fully provide for all benefits as they become payable. For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the plan net position of the Miami Beach General Employees' Retirement Plan ("MBERP") and the Miami Beach, Fire and Police Retirement Plan ("MBF&P") and additions to/deductions from the MBERP and MBF&P plan net position has been determined on the same basis as they are reported by the MBERP and MBF&P, respectively. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. 29 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Notes to Financial Statements September 30, 2017 8. Post-Employment Benefits Other Than Pensions (OPEB) Government Accounting Standards Board (GASB Statement No. 45), Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions (OPEB), was effective for the Agency beginning with its year ending September 30, 2008. This Statement improves the relevance and usefulness of financial reporting by requiring systematic, accrual basis measurement and recognition of OPEB cost (expense) over a period that approximates employees' years of service and provides information about actuarial accrued liabilities associated with OPEB and whether, and to what extent, progress is being made in funding the plan. Pursuant to Section 112.08, Florida Statutes, the City is required to permit eligible retirees and their eligible dependents to participate in the City's health insurance program at a cost to the retirees that is no greater than the cost at which coverage is available for active employees. This coverage extends to Agency employees. The City has the authority to establish and amend funding policy. The annual cost(expense) of the City's Plan is calculated based on the Annual Required Contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liability over a period not to exceed 30 years. The Agency's Annual Required Contribution (ARC) to the OPEB Trust for the fiscal year ended September 30, 2017 was based on an actuarially determined amount for the City. The Agency was allocated its equitable share of the ARC based on its covered payroll. The Agency contributed $80,207 to the OPEB Trust. At September 30, 2017, the Agency did not have a net OPEB obligation or a net OPEB asset. Readers should refer to Note 17 of the City's 2017 Comprehensive Annual Financial Report for detailed and comprehensive information on OPEB. 9: Long-Term.Obligations • In the government-wide financial statements, and proprietary fund types in the fund financial statements, long- term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are recorded as additions to or deductions from the related debt and amortized in interest expense over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. ,- In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Debt principal payments are reported as debt service expenditures. 10. Deferred Outflows/Inflows of resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a future period (s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period (s)and so will not be recognized as an inflow of resources (revenue) until that time. 30 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30,2017 11. Recent accounting pronouncements adopted/implemented In June 2015, the GASB issued Statements No. 74, "Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans". The objective of' this Statement is to improve the usefulness of information about postemployment benefits other than pensions included in the general purpose external financial reports of state and local governmental OPEB plans for making decisions and assessing accountability. This Statement is effective for the fiscal year ended September 30, 2017. Please refer to note 17 of the City's Comprehensive Annual Financial Report and the Agency's Required Supplementary Information for more information relating to GASB 74. This statement had no effect on the Agency. In August 2015, the GASB issued Statement No. 77, "Tax Abatement Disclosures". The objective of this Statement is to require disclosure of tax abatement information about (1) a reporting government's own tax abatement agreements and (2) those that are entered into by the government and that reduce the reporting government's tax revenues. This Statement is effective for the Agency's fiscal year ended September 30, 2017. Please refer to note 18 in the City of Miami Beach's Comprehensive Annual Financial Report for more information relating to GASB 77. In December 2015, the GASB issued Statement No. 78, "Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans". The objective of this Statement amends the scope and applicability of Statement 68 to exclude pensions provided to employees of state or local governmental employers through a cost-sharing multiple-employer defined benefit pension plan that (1) is not a state or local governmental pension plan, (2) is used to provide defined benefit pensions both to employees of state or local governmental employers and to employees of employers that are not state or local governmental employers, and (3) has no predominant state or local governmental employer (either individually or collectively with other state or local governmental employers that provide pensions through the pension plan). This Statement establishes requirements for recognition and measurement,of pension expense, expenditures, and liabilities; note disclosures; and required supplementary information for pensions that have the characteristics described above. This Statement is effective for the Agency's fiscal year ended September 30, 2017. This statement had no effect on the Agency. In December 2015, the GASB issued Statement No. 79, "Certain External Investment Pools and Pool Participants". The objective of this Statement is to address for certain external investment pools and their participants the accounting and financial reporting implications that result from changes in the regulatory provisions referenced by previous accounting and financial reporting standards. Those provisions were based on the Investment Company Act of 1940, Rule 2A7. Rule 2A7 contains the Securities and Exchange Commission's regulations that apply to money market funds and were significantly amended in 2014. The provisions of this Statement are effective for financial statements for the Agency's financial year ending September 30, 2016, except for certain provisions on portfolio quality, custodial credit risk, and shadow pricing which are effective for financial statements for the Agency's financial year ending September 30, 2017. This statement had no effect on the Agency. In January 2016, the GASB issued Statement No. 80, "Blending Requirements for Certain Component Units". The objective of this Statement is to improve financial reporting by clarifying the financial statement presentation requirements for certain component units. This Statements amends the blending requirements for the financial statement presentation of component units of all state and local governments. The additional criterion requires . blending a component unit incorporated as a not-for-profit corporation in which the primary government is the sole corporate member. The additional criterion does not apply to component units included in the financial reporting - entity pursuant to the provisions of_ Statement No. 39, "Determining Whether Certain Organizations Are Component Units". This Statement is effective for the Agency's fiscal year ended September 30, 2017. This statement had no effect on the Agency. In March 2016, the GASB issued Statement No. 82, "Pension Issues—an Amendment of GASB Statements No. 67, No, 68 and no. 73". The objective of this Statement is to address certain issues that have been raised with respect to Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting.and Financial Reporting for Pensions, and No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not 31 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30, 2017 within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68. Specifically, this Statement addresses issues regarding (1) the presentation of payroll-related measures in required supplementary information, (2) the selection of assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3) the classification of payments made by employers to satisfy employee (plan member) contribution requirements. The requirements of this Statement are effective for the Agency's financial year ending September 30, 2017, except for the requirements of this Statement for the selection of assumptions in a circumstance in which an employer's pension liability is measured as of a date other than the employer's most recent fiscal year-end. In that circumstance, the requirements for the selection of assumptions are effective for that employer in the first reporting period in which the measurement date of the pension liability is on or after June 15, 2017. The new disclosures were added to Note 14 and in the Required Supplementary Information. Note 2-Deposits and Investments Deposits All deposits are held in banking institutions approved by the State Treasurer of the State of Florida, to hold public funds. Under the Florida Statutes Chapter 280, Florida Security for Public Deposits Act, the State Treasurer requires all qualified public depositories to deposit with the Treasurer or another banking institution eligible collateral equal to 50% to 125% of the average daily balance for each month of all public deposits in excess of any applicable deposit insurance held. The percentage of eligible collateral (generally, U.S. governmental and agency securities, "state ormunicipality government debt, or corporate bonds) to public deposits is dependent upon the depository's financial history and its compliance with Chapter 280, Florida Statutes. In the event of a failure of a qualified public depository, the remaining public depositories would be responsible for covering any resulting losses. Investments The Agency adopted the City's ordinance designating the investments which are allowable for its cash management activities. The policy specifies the types and limits by instrument and establishes a diversified investment objective that takes into consideration the safety, return and, liquidity of capital. The authorized investments include direct U.S. treasury obligations, U.S. government agencies, corporate bonds, commercial • paper, state or municipal obligations and cash held at investment institutions. These investments are insured, or registered, or the securities are held by its agent in the Agency's name. Interest Rate Risk: Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market rates. Investments are made based on prevailingmarket conditions at the time of the transaction with the intent to hold the instrument until maturity. If the yield of the portfolio can be improved by the sale of an investment, prior to maturity, with the reinvestment of the proceeds, then this provision is allowed. As a means of limiting its exposure to fair value losses, the Agency's investment policy limits maturity of its investments to seven years or less. At September 30, 2017, all of the Agency's investments had a maturity of 5 years or less. 32 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Notes to Financial Statements September 30, 2017 As of September 30, 2017, the Agency had the following investments and maturities: Investment Maturities (in years) Fair Value Less Than One 1-5 U.S. Treasury securities $ 83,196,236 $ 78,883,155 $ 4,313,081 FLCLASS Pool 256,407,996 256,407,996 - $ 339,604,232 $ 335,291,151 $ 4,313,081 Credit Risk: This is the risk that a security or a portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt. State law limits investments in commercial paper and corporate bonds rated in one of the top two ratings issued by the Nationally Recognized Statistical Rating Organization ("NRSRO"). It is the Agency's policy to limit its investments in these investment types to the top rating issued by the NSRSO. As of September 30, 2017, the Agency had no investments in commercial paper or corporate bonds. Obligations of the U.S. government or obligations explicitly or implicitly guaranteed-by the U.S. government are not considered to have credit risk and do not have purchase limitations. As of September 30, 2017,,the Agency's investments were rated by Moody's Investors Service and Standard & Poor's as follow: Standard & Fair Investment Type Issuer „ Poor's Moody's Value US GoVt Treasuries U.S. Govemment AA+ Aaa $ 83,196,236 FLCLASS Local Govt. Investment Pool AAAm N/A 256,407,996 $ 339,604,232 Concentration of Credit Risk: The Agency's investment plan limits the amount that can be invested in any one issuer as well as maximum portfolio allocation percentages. The maximum portfolio allocation is 100% for both cash held at investment institutions and Treasury Securities as well as money market funds unless they are private money market mutual funds backed by"Full Faith and Credit" U.S. Government Securities in which case they cannot exceed 25%. The Agency's cash and investments at September 30,2017 are shown below: Carrying % of Amount Portfolio FLCLASS Pool $ 256,407,996 75.5% Treasury securities 83,196,236 24.5% $ 339,604,232 100.0% 33 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30, 2017 Custodial Credit Risk: The Agency's investment policy requires that securities be registered in the name of the Agency. All safekeeping receipts for investment instruments are held in accounts in the Agency's name and all securities are registered in the Agency's name. For an investment, custodial credit risk is the risk that in the event of the failure of the counterparty, the Agency will not be able to recover the value of its investments or collateral securities that 'are in the possession of an outside party. All of the Agency's investments in Treasury securities are held by a counterparty in the Agency's name. Fair Value Measurement: In February 2015, GASB issued Statement No. 72, addressing the accounting and financial reporting issues related to fair value measurements. GASB No. 72 defines fair value as the price that would be received to sell an asset. The Agency categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2-inputs are based on other significant observable inputs such as indices for fixed income bonds and quoted prices similar assets in markets that are not active; Level 3 inputs are significant unobservable inputs. The Agency has the following recurring fair value measurements as of September 30, 2017: Fair Value Measurements Using: - 2017 Level Level 2 Investments by fair value level Debt Securities • U.S. Treasuries $ 83,196,236 $ - $ 83,196,236 Total debt securities 83,196,236 - 83,196,236 Total investments by fair value 83,196,236 y $ - $ 83,196,236 Investments measures at the net asset value: FL CLASS 256,407,996 Total investments $ 339,604,232 Florida Cooperative Liquid Assets Securities System (FLCLASS) is an external local government investment pool created by interlocal agreement under F.S. 163.01. The pool is supervised by an appointed Board of Trustees comprised of eligible participants of the program. The Board acts as the liaison between the participants, the custodian, and the program administrator. The fund is an S&P AAAm rated money market product offering a fiscally conservative diversification option for Florida local governments. The objective of the fund is to provide investors with liquidity, stable share price and as high a level of current income as is consistent with preservation of principal and liquidity. The weighted average maturity is 56 days as of September 30, 2017. The Remainder of this Page was Intentionally Left Blank 34 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30, 2017 The City's cash and investments held at September 30, 2017 (including restricted cash and cash with paying agent) are shown below: US Treasury $ 83,196,236 FL Class 256,407,996 Total investments 339,604,232 Total cash and investments $ 339,604,232 Cash and investments by fund: General Fund $ 71,188,220 Debt Service Fund - Capital Projects Fund \241,079,925 Parking Fund 16,804,612 Leasing Fund. 10,531,475 Total cash and investments $ 339,604,232 The Remainder of this Page was Intentionally Left Blank 35 • Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30, 2017 Note 3-Capital Assets Capital asset activities for the year ended September 30, 2017 were as follows: A. Governmental Activities Beginning Decreases/ Balance Increases Adjustments Ending Balance Govemmental activities: Capital assets,not being depreciated: Land $ 10,817,763 $ - $ - $ 10,817,763 Construction in progress 56,429,294 86,147,721 3,608,799 138,968,216 Total capital assets not being depreciated 67,247,057 86,147,721 3,608,799 149,785,979 Capital assets, being depreciated: Buildings and structures 24,399,014 - - 24,399,014 Streetscape improvements 39,507,961 3,321,854 - 42,829,815 Restoration/renovations 30,615,316 - - 30,615,316 Vehicles 6,501 - - 6,501 Machinery and equipment 442,974 14,346 , 872 456,448 Furniture and fixtures 634,981 219,406 - 854,387 Total capital assets being depreciated 95,606,747 3,555,606 872 99,161,481 Less accumulated depreciation for. Buildings and structures 3,787,200 458,260 - 4,245,460 Streetscape improvements 7,548,118 1,990,928 - 9,539,046 Restorations/renovations 5,383,985 1,022,448 - 6,406,433 Vehicles 6,501 - - 6,501 Machinery and equipment 287,948 39,557 872 326,633 Furniture and fixtures 274,478 107,175 - 381,653 Total accumulated depreciation 17,288,230 3,618,368 872 20,905,726 Total capital assets, being depreciated, net 78,318,517 (62,762) - 78,255,755 Governmental activities capital assets,net $ 145,565,574 $ 86,084,959 $ 3,608,799 $ 228,041,734 36 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30,2017 , B. Business-Type Activities Beginning Decreases/ Balance Increases Adjustments Ending Balance Business-type activities: Capital assets,not being depreciated: Land $ 3,003,282 $ - $ - $ 3,003,282 Construction in progress 185,330 167,220 352,550 - • Total capital assets not being depreciated 3,188,612 167,220 352,550 3,003,282 Capital assets, being depreciated: Buildings and structures 30,770,814 52,445 - 30,823,259 Machinery and equipment 347,936 357,162 - 705,098 Total capital assets being depreciated 31,118,750 409,607 - 31,528,357 Less accumulated depreciation for. Buildings and structures 9,465,264 781,612 - 10,246,876 Machinery and equipment 294,229 30,207 - 324,436 Total accumulated depreciation 9,759,493 811,819 - 10,571,312 Total capital assets,being depreciated, net 21,359,257 (402,212) - 20,957,045 Business-type activities capital assets, net $ 24,547,869 $ (234,992) $ 352,550 $ 23,960,327 Depreciation expense was charged to functions/programs of Agency as follows: Governmental activities: General govemment .$ 411,453 Public safety 7,602 Physical environment 44,523 Transportation • 1,596,243 Culture and recreation 1,558,547 Total depreciation expense -governmental activities $ 3,618,368 Business-type activities: Parking $ 734,467 Leasing 77,352 Total depreciation expense -business-type activities $ 811,819 • 37 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Notes to Financial Statements September 30, 2017 Note 4-Construction Commitments The Agency had the following construction commitments as of September 30, 2017: City Center Capital Projects $ 147,343,082 General Fund Activities 2,171,767 Anchor Garage 65,504 $ 149,580,353 Note 5-Tenant Leases The Agency serves as the lessor for the tenants leasing various retail facilities. The tenant leases are considered operating leases, which expire at various dates through fiscal year 2023. For leases that contain predetermined fixed escalations of the minimum rentals, the Agency recognizes the related rental revenue on the straight-line basis over the initial lease term. Future minimum lease payments to be received under the operating leases at September 30, 2017 are as follows: Year ending September 30, 2018 $ 1,140,972 2019 1,035,289 2020 1,063,445 2021 936,651 2022 922,470 2023 845,503 $ 5,944,330 The following schedule provides an analysis of the Agency's investment in property under operating leases and property held for lease by major classes as of September 30, 2017: Parkingfacilities $ 4,889,763 Retail space 2,397,145 Recreational facilities 5,431,489 Less: Accumulated depreciation (2,389,446) $ 10,328,951 The Remainder of this Page was Intentionally Left Blank 38 i Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30, 2017 Note 6 -Tax Increment Revenue Bonds On December 15, 2015 the City issued $286,245,000 in Series 2015A Tax Increment Revenue and Revenue Refunding Bonds to provide for the current refunding of all of the Agency's Tax Increment Revenue Refunding Bonds, Series 2005B; finance certain costs of acquiring and constructing renovations to the convention center and certain other improvements; and pay costs of issuance of the Series 2015A bonds. The Series 2015A bonds were issued with interest rates of 4.00%to 5.00% payable semiannually on February 1 and August 1. On December 15, 2015 the City issued $35,850,000 in taxable Series 20156 Tax Increment Revenue Refunding Bonds to provide for the advance refunding of all of the Agency's Tax Increment Revenue Refunding Bonds, Taxable Series 1998A; provide for the current refunding of all of the Agency's Tax Increment Revenue Refunding Bonds, Taxable Series 2005A; and pay costs of issuance of the Series 2015B bonds. The Series 20156 bonds were issued with interest rates of 1.93%to 3.69% payable semiannually on February 1 and August 1. The principal and interest of the Series 2015A and 2015B Tax Increment Revenue Refunding Bonds are fully secured by the tax increment revenues derived from the Redevelopment area and received solely from the City and the County. Annual pledged revenues received by the Agency are required to be at least equal to 150% of the maximum annual debt service. For fiscal year ending September 30, 2017, the City received $49,332,005 in pledged revenues. The maximum annual debt service is $21,729,597 and will occur in fiscal year 2023. For fiscal year 2017, the Agency's ratio of pledged revenues to maximum annual debt service is 227%. The aggregate maturities of tax increment revenue bonds at September 30, 2017 are as follows: Year Ending September 30, Principal Interest Total 2018 $ 6,670,000 $ 14,993,923 $ 21,663,923 2019 6,880,000 14,790,654 21,670,654 2020 7,120,000 14,562,428 21,682,428 2021 7,395,000 14,310,985 21,705,985 2022 7,675,000 14,037,615 21,712,615 2023-2027 40,380,000 64,980,972 105,360,972 2028-2032 50,775,000 53,776,875 104,551,875 2033-2037 65,195,000 39,352,625 104,547,625 2038-2042 83,705,000 20,832,375 104,537,375 2043-2044 39,805,000 2,015,125 41,820,125 315,600,000 253,653,577 569,253,577 Add net unarmortized bond premium 27,068,974 - 27,068,974 $ 342,668,974 $ 253,653,577 $ 596,322,551 The Remainder of this Page was Intentionally Left Blank 39 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida). Notes to Financial Statements September 30, 2017 Note 7-Changes in Long-Term Liabilities Long-term liability activity for the year ended September 30, 2017 was as follows: Beginning , Ending Due Within Balance , Increases Decreases Balances One Year Governmental activities: Revenue Bonds $ 322,095,000 $ - $ (6,495,000) $ 315,600,000 $ 6,670,000 Add:Series 2015 Premium 28,893,236 - (1,824,262) 27,068,974 1,520,090 Less:Series 1998A Discount (2,762) - 2,762 - - Total bonds payable 350,985,474 - (8,316,500) 342,668,974 8,190,090 • Compensated absences 224,027 162,183 (109,984) 276,226 109,984 Net Pension Liability-MBERP 1,285,164 - (16,321) 1,268,843 Net Pension Liability-MBF&P 8,116,815 - (509,417) 7,607,398 - Governmental activity long-term liabilities $ 360,611,480 $ 162,183 $ (8,952,222) $ 351,821,441 $ 8,300,074 Business-type activities: Tenant deposits $ 216,322 $ 3,040 $ (2,680) $ 216,682 $ 2,680 Business-type activity long-term liabilities $ 216,322 $ 3,040 $ (2,680) $ 216,682 $ 2,680 Note 8-Tax Increment Revenue The Agency is primarily funded through tax-increment revenue. This revenue is computed by applying the operating tax for the City and Miami-Dade County, Florida, (the "County") multiplied by the increased value of property in the district over the base property value minus 5%. Both the City and the County are required to fund this amount annually without regard to tax collections or other obligations. The Remainder of this Page was Intentionally Left Blank • 40 • Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30, 2017 ' Note 9-Related-Party Transactions The Agency obtains certain managerial and administrative services from the Primary Government in accordance with a management agreement. The Agency incurred $1,837,986 of management-fee expense under this agreement for the year ended September 30, 2017. At September 30, 2017, there were no outstanding balances resulting from other transactions with the Primary Government. Note 10 -Interfund Transfers Interfund transfers for the year ended September 30, 2017 consisted of the following: Government funds: Transfers from the general fund to: Debt service $ 5,512,636 Primary government 481,324 Total transfers from the general fund $ 5,993,960 Transfers are used to: (1) move revenues from the fund that budget requires to collect them to the fund that budget requires to expend them, and (2) move receipts restricted for debt services from the funds collecting the receipts to the debt service fund. The Remainder of this Page was Intentionally Left Blank 41 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30, 2017 Note 11 -Receivables Receivable at September 30, 2017 for the Agency's governmental and enterprise funds are as follows: Govemmental Activities General Receivables: Accounts Gross receivable $ 3,541 Less: Allowance for uncollectible (157) Net receivables $ 3,384 Business-Type Activities Leasing Funds Receivables: Rent $ 767,617 Accounts - Gross receivable 767,617 Less allowance for uncollectible (707,941) Net receivables $ 59,676 The Remainder of this Page was Intentionally Left Blank • 42 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30, 2017 Note 12-Governmental Fund—Fund Balance Below is a table of fund balance categories and classifications at September 30, 2017 for the Agency's governmental funds: General Fund Capital Projects Restricted: Economic environment $ 69,730,637 $ 2,666,114 Culture and recreation - 176,849,095 General public facility - 24,931,638 Parks - 3,601 Streets/sidwalks - 8,218,095 Transit - 1,016,756 Total Fund Balance $ 69,730,637 $ . 213,685,299 Note 13 -Contingencies The Agency, in the normal course of operations, is a party to various other actions in which plaintiffs have alleged certain damages. In all cases, management does,not'believe the disposition of these matters will materially affect the financial position of the Agency. Note 14- Pension Plan Miami Beach Employees' Retirement System ("MBERP") Summary of Significant Accountinq..Principles The Plan financial statements are prepared using the accrual basis of accounting. Member contributions' are recognized as revenues in the period in which the contributions are due. Agency contributions are recognized as revenues when due pursuant to actuarial valuations. Benefits and refunds are recognized when due and payable in accordance with the terms of the Plan. Interest income is recorded as earned and dividend income is recorded as of the ex-dividend date. Investments are recorded at fair value in the Statement of Plan Net Position. Fair value is the price that would be received to sell an asset or paid to transfer a liability'in an orderly transaction between market participants at the measurement date. The diversity of the investment types in which the Trust has entered into requires a range of techniques to determine fair value. Unrealized gains and losses are presented as net appreciation in fair value of investments on the Statement of Changes in Fiduciary Net Position along with gains and losses realized on sales of investments. Purchases and sales of investments are recorded on a trade-date basis. The preparation of financial statements in conformity with accounting principles generally accepted in the United State of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Plan Description 43. J Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Notes to Financial Statements September 30,2017 Pursuant to Modification 29 of the Florida State Social Security Agreement effective January 1, 1955, the City of Miami Beach does not participate in the Federal Old-Age and Survivors Insurance System (OASI) embodied in the Social Security Act. The Miami Beach Employees' Retirement Plan (the Plan) is a single employer defined benefit pension plan for general employees established by the City of Miami Beach, Florida (the City) effective March 18, 2006. The plan acts as a_cost-sharing plan to the Agency. The Miami Beach Employees' Retirement System was created under and by the authority of Chapter 18691, Laws of Florida, Act of 1937, as amended, by merging the "Retirement System for General Employees of the City of Miami Beach" created by Ordinance 1901 with the"Retirement System for Unclassified Employees and Elected Officials of the City of Miami Beach" created by Ordinance 88-2603, as amended. Members are full-time employees, classified and unclassified positions, who work more than 30 hours per week except for policemen,and firemen and persons who elect to join the defined contribution retirement Plan sponsored by the City. Substantially all full-time employees of the Agency are provided with pensions through the Miami Beach Employees' Retirement Plan (the Plan)—a single employer defined benefit pension plan administered by the City of Miami Beach, Florida. The Plan issues a publicly available financial report that can be obtained at http://web.miamibeachfl.gov/mberp. The benefit provisions and all other requirements are established and may be amended by City ordinance. The plan provides for retirement benefits as well as death and disability benefits at three,different tiers depending on when the members entered the Plan: . The' First Tier is•for members that entered the Plan prior to the Second Tier Dates. The Second Tier is for members that entered the Plan on or after the Second Tier Dates, but before the Third Tier Dates. The Third Tier is for members thatt entered the Plan on or after the Third Tier Dates. Both the Second Tier and Third Tier Dates were established when each of the unions bargained with the City to establish new guidelines for retirement benefits relating to employees associated with their Unions. The Second Tier Dates are April 30, 1993 for members of AFSCME; August 1, 1993 for those classified as Other and GSAF, and February 21, 1994 for members of CWA. The Third Tier Dates are September 30, 2010 for members of AFSCME, GSAF and for those classified as other, and October 27, 2010 for members of CWA. Classified members administered under the First Tier are eligible for normal retirement at age 50 and five years of Creditable Service and are entitled to benefits of 3% of Final Average Monthly Earnings (FAME) multiplied by the first 15 years of Creditable Service plus 4% of FAME multiplied by years of service in excess of 15 years, with the total not to exceed 90% of FAME. First Tier unclassified members accrued 4% for creditable service before October 18, 1992. Unclassified First Tier members accrued 3% per year of service after October 18, 1992, with the total not to exceed 80% of FAME. Classified and unclassified members administered under the Second Tier are eligible for Normal Retirement at age 55 and five years of creditable service and are entitled to benefits of 3% of FAME multiplied by creditable service, subject to a maximum of 80% of FAME. Classified and unclassified members administered under the Third Tier are eligible for Normal Retirement at age 55 with at least 30 years of creditable service, or age 62 with at least five years of creditable service and are entitled to benefits of 2.5% of FAME multiplied by creditable service, subject to a maximum of 80% of FAME. For elected officials, City Manager or City Attorney, the benefit is 4% of FAME for each year of creditable service as an elected official, city manager or city attorney plus the retirement benefit as defined above for any other period of city employment, subject to a maximum of 80%of FAME Final average monthly earnings (FAME) means one-twelfth of the average annual earnings during the highest two paid years of credible service. For Unclassified First Tier members who became a member prior to October 18, 1992 and was continuously a member from that date until'March 18, 2006, FAME is defined as the larger of one twelfth average covered salary during the two highest paid years of creditable service or one-twelfth of the pay of the year immediately preceding March 18, 2006. Effective as of September 30, 2010, FAME for members who 44 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements � September 30, 2017 have obtained normal retirement age or are within 24 months from normal retirement age is defined as average covered salary during the two highest paid years of creditable service. FAME for those members who as of September 30, 2010 are between 24 and 36 months from normal retirement age is defined as average covered salary during the three highest paid years of creditable service. FAME for those members who as of September 30, 2010 are between 36 and 48 months from normal retirement age is defined as average covered salary during the four highest paid years of creditable service. FAME for those members who as of September 30, 2010 are more than 48 months from normal retirement age is defined as average covered salary during the five highest paid years of creditable service. A Member with five or more years of creditable service may, at any time prior to retirement, elect to purchase a maximum of two years additional creditable service. Effective September 30, 2013, Members whose classification is included in the CWA and GSAF bargaining unit and Members who are not included in any collective bargaining unit shall not be eligible to purchase additional creditable service. Effective, April 23, 2015, members whose classifications are included in the AFSCME bargaining unit are not eligible to purchase additional creditable service. Any First Tier member who terminates employment may either request a refund of their own contributions plus interest, or receive their accrued benefit beginning at age 50, if at least five years of creditable service are completed. Any Second Tier member who entered on or after the Second Tier Date and who terminates employment after five years of creditable service may either request a refund of their own contributions plus interest or receive their accrued benefit beginning at age 55. Any Third Tier member who entered on or after the Third Tier Date and who terminates employment after five years of creditable service but prior to the normal or early retirement date shall be eligible to receive a normal'retirement benefit at age 62. Deferred retirement option plan (DROP) A DROP was enacted on January 28, 2009 by Ordinance 2009-3626. Under this Plan, First and Second Tier members who have attained "eligibility for Normal Retirement may continue working with the City for up to three years, while receiving a-retirement benefit that is deposited into a DROP account. Third Tier members may participate in a DROP account for up to five years. Effective July 17, 2013, Members within classifications in the CWA bargaining unit who were hired prior to October 27, 2010, and Members not included in any bargaining unit who were hired prior to September 10, 2010, may elect to retire for the purposes of the Plan but continue employment with the City for up to sixty months, and have their monthly retirement benefit paid into a DROP account during the DROP period. Effective October 1, 2013, any member within classifications in the GSAF bargaining may elect to retire for the purposes of the Program but continue employment with the City for up to sixty months, and have their monthly retirement paid into a DROP account during the DROP period. Effective April 23, 2014, members within classifications in the AFSCME bargaining unit who were hired prior to September 30, 2010, may elect to retire for the purposes of the Plan but continue employment with the City for up to sixty months, and have their monthly retirement benefits paid into a DROP account during the DROP period. The amount of the benefit is calculated as if the participant had retired on the date of DROP commencement. Upon termination with the City, the accumulated value of the DROP account is distributed to the participant. A member's creditable service, accrued benefit and compensation calculation shall be frozen. A series of investment vehicles which are established by the board of trustees are made available to DROP participants to choose from. Any losses, charges, or expenses incurred by the participant in their DROP account are not made up by the City or the Trust, but shall be borne by the participant: Upon termination of employment, a member may receive distributions in accordance with the Plan. A DROP participant shall not be entitled to receive an ordinary or service disability retirement and in the event of death of a DROP participant, there shall be no accidental death benefit for pension purposes. DROP participation does not affect any other death or disability benefit provided to a member under federal law, state law, City ordinance, or any rights or benefits under any applicable collective bargaining agreement. First and Second Tier members receive an annual cost-of—living adjustment (COLA) of 2.5%. The COLA is not payable while members are in the DROP. For Third Tier members the COLA is 1:5%. As of September 30, 2017, there were 129 members in the DROP and the value of DROP investment was $16,100,212, which is included in the Plan's net 45 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Notes to Financial Statements September 30, 2017 position. The DROP also allows for member loans. At September 30, 2017, there were approximately $244,000 in outstanding loans. Funding Policy, Contributions Required and Contributions Made The City is to contribute such amounts as are necessary to maintain the actuarial soundness of the Plan and to provide the Plan with assets sufficient to meet the benefits to be paid to the members. All First Tier members who participate are required to contribute 12% of their covered salary to the Plan. All Second and Third Tier members are required to contribute 10% of their covered salary. The City Commission has the authority to increase or decrease contributions. For the fiscal year ended September 30, 2017, the Agency was required to make contributions of $182,000 or 26.07% of covered payroll to the Plan in accordance with actuarially determined requirements computed through an actuarial valuation performed as of October 1, 2015. For the year ended September 30, 2017, the employees contributed $48,795. • Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to Pensions. For the year ended September 30, 2017, the Agency recognized a pension expense of $49,436. At September 30, 2017, the Agency reported deferred- outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows Differences between expected and actual experience experience $ 8,166 $ 10,659 Agency contributions subsequent to measurement date 182,000 Net difference between projected and actual earnings on 64,829 - Change in assumptions 92,104 - Total $ 347,099 $ 10,659 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense in future periods as follows: Year ended September 30: 2018 $ 58,687 2019 52,006 2020 56,037 2021 (12,290) Total $ 154,440 46 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Notes to Financial Statements September 30, 2017 The Plan uses the following actuarial valuations at the measurement date of September 30, 2016: Actuarial Cost Method Entry Age Normal Inflation 3.0% Salary Increases 4.5%to 7.0% depending on service, including inflation Investment Rate of Return 7.70% Retirement Age Experience-based table of rates that are specific to the type of eligibility condition Mortality RP-2000 Combined Healthy Participant Mortality Table for males and females with mortality improvements projected after year 2000 to the year 2010 using Scale AA. Net Pension Liability of the Agency The components of the net pension liability of the Agency at September 30, 2017 were as follows: Total pension liability $ 4,709,473 Plan's fiduciary net position (3,440,630) Agency net pension liability $ 1,268,843 The above methods and assumptions were used to determine the total pension liability at the actuarial valuation date of October 1, 2015. The actuarial valuation was rolled forward to the September 30, 2016 measurement date. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target and best estimate of arithmetic real rates of return for each major asset class are summarized in the following table: Assumed Long-Term Expected Target Asset Class Asset Allocation Real_Rate of Return Domestic equities 39% 4.67% Fixed income 28 0.97 International equities 16 5.81 Real estate 10 3.72 Infrastructure 7 5.28 Total 100% Discount A single discount rate of 7.70% was used to measure the total pension liability. This is a decrease of 0.15% from the discount rate of 7.85% used in the prior measurement. This single discount rate was based on the expected rate of return on Pension Plan investments of 7.70%. The projection of cash flows used to determine this single discount rate assumed that Plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the total actuarially determined 47 Miami Beach.Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30, 2017 contribution rates and the member rate. Based on these assumptions, the Pension Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current Plan members. Therefore, the long-term expected rate of return on Pension Plan investments (7.70%)was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the net pension liability to changes in the discount rate The following present the Agency's net pension liability, calculated using a single discount rate of 7.70%, as well as what the Agency's net pension liability would be if it were calculated using a single discount rate that is 1- percentage-point lower or 1-percentage-point higher: Sensitivity of the Net Pension Liability to the Single Discount Rate Assumption 1% Decrease Rate Assumption 1% Increase 6.85% 7.85% 8.85% $ 1,769,431 $ 1,285,164 $ 878,947 Historical trend information is presented in the required supplementary information schedules following the notes to the financial statements to show the changes in the net pension liability and the contributions to the plan. Retirement System for Firefighters and Police Officers(MBF&P) Summary of Significant Accounting Principles The Plan financial statements are prepared using the accrual basis of accounting. Employee contributions are recognized as revenues in the period in which the contributions are due. City contributions are recognized as revenues when due pursuant to actuarial valuations. Share plan contributions are recognized as revenues in the period in which they are approved by the State. Benefits and refunds are recognized when due and payable in accordance with the terms of the Plan. Interest income is recorded as earned and dividend income is recorded as of the ex-dividend rate. Investments are recorded at fair value in the Statement of Fiduciary Net Position. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The diversity of the investment types in which the Trust has entered into requires a range of techniques to determine fair value. Unrealized gains and losses are presented as net appreciation in fair value of investments on the Statement of Changes in Fiduciary Net Position along with gains and losses realized on sales'of investments. Purchases and sales of investments are recorded on a trade-date basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, the actual results could differ from those estimates. Plan Description Pursuant to Modification 29 of the Florida State Social Security Agreement effective January 1, 1955 The City of Miami Beach does not participate in the Federal Old-Age and Survivors Insurance System (OASI) embodied in the Social Security Act. The plan is a single employer defined benefit plan established by the City of Miami Beach, Florida (The "City") and was created under Chapter 23414, Laws of Florida, Special Acts of 1945, as amended through October 14, 2015. The Plan's governing board is the Board of Trustees,which comprises nine members: three of which are elected by the fire department, three of which are elected by the police department, and three 48 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30, 2017 of which are appointed by the mayor. Members are substantially all police officers and firefighters employed by the City of Miami Beach, Florida. Members are further divided in the following three tiers: Tier One members are those hired prior to July 14, 2010. Tier Two members are those hired on or after July 14, 2010, but prior to September 30, 2013. Tier Three members are those hired on or after September 30, 2013, but prior to June 8, 2016 and July 20, 2016 for Fire Department and Police Department members, respectively. Tier Four members are those hired on or after June 8, 2016 and July 20, 2016 for Fire Department and Police Department members, respectively Tier One members Members who met eligibility to retire prior to September 30, 2013 may retire on a service retirement pension upon the attainment of age 50 or, if earlier, the date when age and length of creditable service equals to at least 70 years. Members eligible to retire on or after September 30, 2013 may retire on a service retirement pension upon the attainment of age 50 or, if earlier, the date when the member attains age 47 and length of creditable service equals to at least 70 years. Upon retirement, a member who met eligibility to retire on or before September 30, 2013 will receive a monthly pension, payable for life, equal to 3% of the average monthly salary, as defined in the Plan ordinance, for each of the first 15 years of creditable service and 4% of the average monthly salary for each year of creditable service in excess of 15 years, provided that the pension does not exceed 90% of the average monthly salary. Members who met eligibility to retire on or after to September 30, 2013 will receive a monthly pension, payable for life, equal to 3% of the average monthly salary, as defined in the Plan ordinance, for each of the first 20 years of creditable service and 4% of the average monthly salary for each year of creditable service in excess of 20 years, provided that the pension does not exceed 85% of the average monthly salary. All retirees and beneficiaries receiving a monthly pension as of September 30, 2010 will receive a 2.5% increase in benefits on October 1st of each year. Members that retire on or after September 30, 2010 will receive a 2.5% increase in benefits annually on the )anniversary date of the member's retirement. Tier Two members Any member may retire on a service retirement pension upon the attainment of age 50 and the completion of at least 5 years of credible pension service or, if earlier, the date when the member attains age 48 plus the length of creditable service equals to at least 70 years. Upon retirement, a member will receive a monthly pension, payable for life, equal to 3% of the average monthly salary, as defined in the Plan ordinance, for each of the first 20 years of creditable service and 4% of the average monthly salary for each year of creditable service in excess of 20 years, provided that the pension does not exceed 85% of the average monthly salary. The average monthly salary of the employee is computed based on the salary for the three highest paid years prior to the date of retirement or the average of the last three paid years to the employee prior to the date of retirement, whichever produces the greater benefit after consideration of the overtime limitations. For limitation and detailed information, please see the pension plan statement. All retirees and beneficiaries will receive a 1.5% increase in benefits annually on the anniversary date of the member's retirement. Tier Three members Any member may retire on a service retirement pension upon the attainment of age 50 and the completion of at least 5 years of credible pension service or, if earlier, the date when the member attains age 48 plus the length of creditable service equals to at least 70 years. Upon retirement, a member will receive a monthly pension, payable for life, equal to 3% of the average monthly salary, as defined in the Plan ordinance, for each of the first 20 years of creditable service and 4% of the average monthly salary for each year of creditable service in excess of 20 years, provided that the pension does not exceed 85% of the average monthly salary. The average monthly salary of the employee is computed based on 49 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Notes to Financial Statements September 30, 2017 the salary for the five highest paid years prior to the date of retirement or the average of the last five paid years to the employee prior to the date of retirement, whichever produces the greater benefit after consideration of the overtime limitations. For limitation and detailed information, please see the pension plan statement. All retirees and beneficiaries will receive a 1.5% increase in benefits annually on the anniversary date of the member's retirement. Tier Four members Any member may retire on a service retirement pension upon the attainment of age 52 and the completion of at least 5 years of credible pension service or, if earlier, the date when the member attains age 48 plus the length of creditable service equals to at least 70 years. Upon retirement, a member will receive a monthly pension, payable for life, equal to 3% of the average monthly salary, as defined in the Plan ordinance, for each of the first 20 years of creditable service and 4% of the average monthly salary for each year of creditable service in excess of 20 years, provided that the pension does not exceed 85% of the average monthly salary. The average monthly salary of the employee is computed based on the salary for the five highest paid years prior to the date of retirement or the average of the last five paid years to the employee prior to the date of retirement, whichever produces the greater benefit after consideration of the overtime limitations. For limitation and detailed information, please see the pension plan statement. All retirees and beneficiaries will receive a 1.5% increase in benefits annually on the anniversary date of the member's retirement Any member of the plan who becomes totally and permanently disabled at any time as a result of illness or injury suffered in the line of duty may be retired on an accidental disability pension. For a service connected disability, the minimum pension payable is 85% of monthly salary of the employee at the time of disability retirement, less any offset for worker's'compensation. Any member who becomes totally or permanently disabled after 5 years of . creditable service as a result of illness or injury not suffered in the line of duty may be retired on an ordinary disability retirement pension; Upon disability retirement, a member received a monthly pension equal to their service retirement benefits. For a non-service connected disability, the pension is the accrued benefit after 5 years of creditable service. The plan also provides death benefits for beneficiaries or members for service connected and non-service connected death. If a member resigns or is lawfully discharged before retirement, their contributions with 3% interest per annum are returned to them. The Plan also provides a special provision for vested benefits for members who terminate after 5 years of service. In the alternative and in lieu of the normal form of benefit, the member may, at any time prior to retirement, elect to receive a lifetime retirement benefit with 120 monthly payments guaranteed. If the member should die before 120 monthly payments are made, benefits will continue to be paid to the member's designated beneficiary for the balance of the 120 month period. If the retired member is living after 120 monthly payments are made, the payments shall be continued for the member's remaining lifetime. In case of termination of the Plan, benefits accrued to members to the extent funded will be non-forfeitable. Deferred retirement option plan An active member of Tier One may enter into the DROP on the first day of any month after meeting eligibility to retire. Members who entered the DROP on or before- September 30, 2015, shall be eligible to participate for a period not to exceed 72 months. Members who entered the DROP on or after October 1, 2015, shall be eligible to participate for a period not to exceed 96 months. All members shall receive a 2.5% COLA increase in benefits annually on the anniversary date of the member's entry into the DROP, in conjunction with a few annual exceptions. An active member of Tier Two, Three or Four may enter into the DROP on the first day of any month after meeting eligibility to retire. Members who entered the DROP on or after October 1, 2015, shall be eligible to participate for a period not to exceed 96 months. All members shall receive a 1.5% COLA increase in benefits 50 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30,2017 annually on the anniversary date of the member's entry into the DROP, in conjunction with a few annual exceptions. Once a member enters the DROP, their monthly retirement benefit is fixed, and their monthly benefit is paid into their DROP account. Upon termination of employment, the balance in the member's DROP account, including earnings, is payable to them and they will begin to receive their normal retirement benefit. At September 30, 2017, the total amount of the Deferred Retirement Option Plan payable, $27,732,355, represents the balance of the self-directed participants as all of the participants are now in the self-directed DROP. Funding Policy, Contributions Required and Contributions Made The City (the "Employer") is required to contribute an actuarially/determined amount that, when combined with members' contributions, will fully provide for all benefits as they become payable. All Tier One and Tier Two members are required to contribute 10% of their salary to the Plan, while all Tier Three members are required to contribute 10.5% of their salary to the Plan. The City Commission has the authority to increase or decrease contributions. For the fiscal year ended September 30, 2017, the Agency was required to make contributions of $900,919 or 68.68% of covered payroll to the Plan in accordance with actuarially determined requirements computed through an actuarial valuation performed as of October 1, 2015. For the year ended September 30, 2017, the employees contributed$90,091. Pension Liabilities, Pension Expense, Deferred Outflows of•Resources, and Deferred Inflows of Resources Related to Pensions. - - For the year ended September 30, 2017, the Agency recognized pension expense adjustment of $67,172. At September 30, 2017, the Agency reported deferred outflows of resources and deferred inflows of resources • related to pensions from the following sources: - Deferred Outflows Differences between expected and actual experience $ 524,486 Changes in assumptions 128,242 City contributions subsequent to measurement date 900,919 Net difference between projected and actual eamings on pension plan investements eamings on pension plan 494,017 Total $ 2,047,664 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense in future periods as follows: Year ended September 30: 2018 $ 403,286 2019 371,309 2020 368,726 2021 3,424 Total $ 1,146,745 51 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Notes to Financial Statements September 30,2017 Actuarial Cost Method Entry Age Normal Inflation 3.0% Salary Increases 0.70% - 10.7% Cost-of-Living Increases 1.5%, 2.0%, or 2.5% Investment Rate of Return 7.90%, compounded annually, net of investment expenses Retirement Age Experience-based table of rates that are specific to the type of eligibility condition Mortality For healthy participants, RP-2000 Combined Healthy Participant Mortality Tables, separate rates for males and females, with Blue Collar Adjustment and projected 15 years from valuation date for pre-retirement mortality and 7 years from valuation date for post-retirement mortality with projection Scale AA. For disabled participants, RP-2000 Disabled Mortality Tables, separate rates for males and females, without projection for future mortality improvement. The above methods and assumptions were used to determine the total pension liability at the actuarial valuation date of October 1, 2015. The actuarial valuation was rolled forward to the September 30, 2016 measurement date. Discount A discount rate of 7.90%was used to measure the September 30, 2017 total pension liability; a decrease from the • prior year rate of 7.95%. This discount rate was based on the expected rate of return.on Fund investments of 7.90%. The projection of cash flows used to determine this discount rate assumed member contributions will be made at the current member contribution rate and employer contributions will be made at rates equal to the difference between actuarially determined current contribution rates and the member contribution rate. Based on these assumptions, the Fund's fiduciary net position was projected to be available to make all projected future expected benefit payments to current Fund members. Therefore, the long-term expected rate of return on Fund investments was applied to all periods of projected benefit payments to determine the total pension liability. Net Pension Liability of the Agency The components of the net pension liability of the Agency at September 30, 2017 were as follows: Total pension liability $ 28,219,538 Plan's fiduciary net position (20,612,140) Agency net pension liability $ 7,607,398 The Remainder of this Page was Intentionally Left Blank 52 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Notes to Financial Statements September 30,2017 The target and best estimate of arithmetic real rates of return for each major asset class are summarized in the following table: Assumed Target Asset Class Asset Allocation Domestic equities 50% Fixed income 35 International equities 5 Real estate equity 5 Cash/short-term investments 5 Total 100% Long-Term Expected Asset Class _ Real Rate of Return Domestic equity 7.50% International equity 8.50 Domestic bonds 2.50 International bonds 3.50 Real estate 4.50 Alternative investments 6.24 The following present the Agency's net pension liability, calculated using a single discount rate of 7.90%, as well as what the Agency's net pension liability would be if it were calculated using a single discount rate that is 1- percentage-point lower or 1-percentage-point higher: Sensitivity of the Net Pension Liability to the Single Discount Rate Assumption 1% Decrease Rate Assumption 1% Increase 6.90% 7.90% 8.90% $ 11,102,749 $ 7,607,398 $ 4,727,313 Historical trend information is presented in the required supplementary information schedules following the notes to the financial statements to show the changes in the net pension liability and the contributions to the plan. Financial Statements Detailed information about the pension plan's fiduciary net position is available in the separately issued financial reports. Each of the Retirement Systems are audited separately. Complete financial statements can be obtained at the following offices: City of Miami Beach City of Miami Beach Employee Retirement System Retirement System for Firefighters and Police Officers 1700 Convention Center Drive 1691 Michigan Ave. Suite 555 Miami Beach, Florida 33139 Miami Beach, Florida 33139 53 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Financial Statements September 30, 2017 Florida's Federal-State Social Security Agreement Pursuant to Modification'29 of the Florida State Social Security Agreement effective January 1, 1955 The City of Miami Beach does not participate in the Federal Old-Age and Survivors Insurance System (OASI) embodied in the Social Security Act. Instead, it provides eligible employees a comprehensive defined benefit pension plan. Contributions to Social Security for fiscal year 2017 and 2016 would have been $9,966,058 and $9,640,754, respectively. The City of Miami Beach does participate in the hospital insurance tax, also known as Medicare, and withholds taxes accordingly. Firemen's and Police Relief and Pension Funds • The City's firefighters and police officers are members of two separate non-contributory money purchase benefit plans established under the provisions of Florida Statutes, Chapters 175 and 185, respectively. These plans are funded solely from proceeds of certain excise taxes levied by the City and imposed upon property and casualty insurance coverage within City limits. This tax, which is collected from insurers by the State of Florida, is remitted to the Plans' Boards of Trustees. The City is under no obligation to make any further contributions to the plans. The excise taxes received from the State of Florida and remitted to the plans for the year ended September 30, - 2017 was $1,430,342 for firefighters and $799,641 for police officers. These payments were recorded on the City's books as revenues and expenditures during the fiscal year. Plan benefits are allocated to participants based upon their service during the year and the level of funding received during the year. Participants are fully vested after 10 years of service with no benefits vested prior to 10 years of service, except those prior to June 1983.All benefits are paid in a lump sum format, except for the Police Relief Funds, where participants may also elect not to withdraw or to partially withdraw, his or her retirement funds. - Defined Contribution Retirement Plan-401(A) • Effective October 18, 1992 City's Ordinance No. 92-2813 provided for the creation of a Defined Contribution Retirement Plan (the "Plan") under section 401(A) of the internal revenue code of 1986. The Plan provides retirement and other related benefits for eligible employees as an option over the other retirement systems sponsored by the City. Any person employed on or after October 18, 1992, in the unclassified service of the City, has the right to select the Plan as an optional retirement plan to the Unclassified Employees and Elected Officials Retirement System. At the time of the Ordinance, employees of the City who were members of the Unclassified Employee and Elected Official Retirement System (the "System") had the irrevocable right to elect to transfer membership from the System to the Plan for a limited period of time. Effective March 19, 2006 the Plan is no longer offered to new employees of the City. Employees participating in the Plan prior to March 19, 2006 were given the option to transfer membership to the System. The Plan is administered by a Board of Trustees, which has the general responsibility for the proper operation and management of the Plan. The Plan complies with the provisions of section 401(A) of the Internal Revenue Code of 1986 and may be amended by the City Commission of the City. The City has no fiduciary responsibility for the Plan, consequently, amounts accrued for benefits are not recorded in the fiduciary fund. Employees in the Plan hired prior to February 21, 1994 are required to contribute 10% of their salary while those hired subsequent to February 21, 1994 are required to'contribute 8% of their salary. The City matches the employee's contribution 100%. The Plan of each employee is the immediate property of the employee. Employees have Nationwide Retirement Solutions or IMCA-RC as their plan administrator. In addition, the employee is responsible for the investment of their funds amongst choices of investment vehicles offered by their selected plan administrator. Plan'information as of and for the fiscal year ended September 30, 2017 is as follows: 54 • Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Notes to Financial Statements September 30,2017 Members in the Plan 30 City's contribution $ 142,594 Percentage of covered payroll 8.10% Employees' contribution 142,558 Percentage of covered payroll 8.10% Note 15-Subsequent Events Management is not aware of any significant subsequent events that would require disclosure. Requests for Information This financial report is designed to provide a general overview of the Miami Beach Redevelopment Agency's finances for all those with an interest in its finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to The Miami Beach Redevelopment Agency, Finance Department, 1700 Convention Center Drive, Miami Beach, Florida 33139. The Remainder of this Page was Intentionally Left Blank • 55 REQUIRED SUPPLEMENTARY INFORMATION (OTHER THAN MD&A) UNAUDITED Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) SCHEDULE OF CONTRIBUTIONS RETIREMENT SYSTEMS (Unaudited) - *Miami Beach Employees Retirement Plan 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Actuarially determined contribution $ 182,000 $ 165,000 $ 191,385 $ 185,204 $ 141,360 $ 117,122 $ 96,416 $ 114,152 $ 85,686 • $ 92,665 Actual contribution 182,000 165,000 191,385 185,204 141,360 117,122 96,416 114,152 85,686 92,665 Contribution deficiency(excess) $ $ - $ - $ $ - $ $ - $ - $ - $ Covered payroll $ 698,244 $ 588,000 $ 595,782 $ 552,405 $ 539,894 $ 605,689 $ 434,359 $ 488,855 $ 461,911 $ 91,366 Actual contribution as a%of covered payroll 26.07% 28.06% 32.12% • 33.53% . 26.18% 19.34% 22.20% 23.35% 18.55% 101.42% City Pension for Firefighters and Police Officers 2017 2016 2015 2014 2013 2012 2011 2010 2009 - 2008 Actuarially determined contribution $ 900,919 $ 976,000 $ 846,000 $ 921,087 $ 1,011,549 $ 929,722 $ 840,435 $ 599,465 $ 516,378 $ 451,268 Actual contribution 900,919 976,000 846,000 921,087 1,011,549 929,722 840,435 599,465 516,378 451,268 Contribution deficiency(excess) $ - $ - $ - $ - -$ - $ - $ - $ - $ - $ - **Covered payroll $ 1,311,798 $ 1,344,000 $ 1,652889 $ 1,096,378 $ 992,167 $ 942,634 $ 722,992 $ 658,571 $ 790,308 $ 905,101 Actual contribution as a%of covered payroll - 68.68% 72.62% 51.18% 84.01% 101.95% 98.63% 116.24% 91.03% 65.34% 49.86% '*Includes DROP members • Notes: 1. City Pension for Firefighters and Police Officers actual contributions include certain Chapter 175/185 non-employer contributions amounts. These amounts are from the State of Florida. - 56 • Miami Beach Redvelopment Agency (A Component Unit of the City of Miami Beach,Florida) SCHEDULE OF THE AGENCY'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY RETIREMENT SYSTEMS (Unaudited) MBERP` 2017 2016 2015 • Agency's proportion of the net pension liability 0.62% 0.59% 0.72% Agency's proportionate share of the net pension liability $ 1,268,843 $ 1,285,164 $ 1,209,020 Agency's covered payroll $ 588,000 $ 595,782 $ 552,405 • Agency's proportionate share of the net pension liability as a percentage of its covered payroll 215.79% 215.71% 218.86% Plan fiduciary net position as a percentage of the total pension liability 73.06% 70.11% 75.55% MBF&P* 2017 2016 2015 Agency's proportion of the net pension liability 2.56% 2.79% 2.56% Agency's proportionate share of the net pension liability $ 7,607,398 $ 8,116,815 $ 5,691,617 Agency's covered payroll $ 1,344,000 $ 1,652,889 $ 1,096,378 Agency's proportionate share of the net pension liability as a percentage of its covered payroll 566.03% 491.07% 519.13% Plan fiduciary net position as a percentage of the total pension liability 73.04% 72.07% 77.59% `Only three years of data is readily available. The years will be populated each year until 10 years are presented. ,yV • • 57 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) NOTES TO THE RETIREMENT SYSTEMS SCHEDULES September 30,2017 The above schedules are ten year schedules, however, the information in the schedules are not required to be presented retroactively. Years will be added to these schedules in future periods until ten years of information is available. Notes to the net pension liability-MBERP Valuation Date October 1, 2015 Measurement Date September 30, 2016 Actuarial Cost Method Entry Age Normal Inflation 3.0% Salary Increases 4.5%to 7.0% depending on service, including inflation Investment Rate of Return 7.70% Retirement Age Experience-based table of rates that are specific to the type of eligibility condition Mortality RP-2000 Combined Healthy Participant Mortality Table for malesand females with mortality improvements projected after year 2000 to the year 2010 using Scale AA. Assumption Changes From fiscal year 2015 to 2016, the discount rate used to determine the net pension liability decreased from 8.00%to 7.85%. From fiscal year 2016 to 2017, the discount rate decreased from 7.85%to 7.70. The Remainder of this Page was Intentionally Left Blank 58 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) NOTES TO THE RETIREMENT SYSTEMS SCHEDULES September 30,2016 Notes to the net pension liability—MBF&P Valuation Date October 1, 2015 Measurement Date September 30, 2016 Actuarial Cost Method Entry Age Normal Inflation 3.0% Salary Increases 0.70%to 10.71% Investment Rate of Return 7.90% Retirement Age Experience-based table of rates that are specific to the type of eligibility condition Mortality For healthy participants, RP-2000 Combined Healthy Participant Mortality Tables, separate rates for males and females, with Blue Collar Adjustment and projected 15 years from valuation date for pre-retirement mortality and 7 years from valuation date for post-retirement mortality with projection Scale AA. For disabled participants, RP-2000 Disabled Mortality Tables, separate rates for males and females, without projection for future mortality improvement. Assumption Changes From fiscal year 2015 to fiscal year 2016, the discount rate decreased from 8.00%to 7.95%. From fiscal year 2016 to fiscal year 2017, the discount rate decreased from 7.95%to 7.90%. Each of the Retirement Systems'are audited separately. Complete financial statements can be obtained at the following offices: City of Miami Beach City of Miami Beach Employee Retirement System Retirement System for Firefighters and Police Officers 1700 Convention Center Drive 1691 Michigan Ave. Suite 555 Miami Beach, Florida 33139 Miami Beach, Florida 33139 The Remainder of this Page was Intentionally Left Blank 59 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) \, Budgetary Comparison Schedule General Fund Year Ended September 30, 2017 (Unaudited) Variance with Original Final Final Budget— Budgeted Budgeted Actual Positive Amounts Amounts Amounts (Negative) Revenues: Tax increment $ 51,861,000 $ 51,861,000 $ 51,843,091 $ (17,909) Interest 60,000 60,000 430,918 370,918 Total revenues 51,921,000 c 51,921,000 52,274,009 353,009 Expenditures: General government 20,759,000 19,656,440 6,061,344 13,595,096 Public safety 4,553,000 4,538,500 4,400,734 137,766 Economic environment 3,268,000 3,268,000 3,250,066 17,934 Culture and recreation 1,368,000 1,368,000 958,234 409,766 Capital outlay - 1,117,060 1,117,060 - Total expenditures 29,94.8,000 29,948,000 15,787,438 14,160,562 Excess of revenues over expenditures 21,973,000 21,973,000 36,486,571 14,513,571 Other financing sources (uses): Operating transfers out (21,973,000) (21,973,000) (5,993,960) • 15,979,040 Total other financing sources(uses) (21,973,000) (21,973,000) (5,993,960) 15,979,040 Net change in fund balance - 30,492,611 30,492,611 Fund balance, beginning 39,238,026 39,238,026 39,238,026 - Fund balance,ending $ 39,238,026 $ 39,238,026 $ 69,730,637 $ 30,492,611 • 60 Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach,Florida) Notes to Budgetary Comparison Schedule September 30, 2016 (Unaudited) Note 1. Budgetary Policy Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds. The Agency uses appropriations in the capital budget to authorize the expenditures of funds for various capital projects. Capital appropriations, unless modified or rescinded, remain in effect until the completion of each project. At least 65 days prior to the beginning of the fiscal year, the City Commission, which also serves as the Agency's Board of Directors, is presented with a proposed budget. The proposed budget includes anticipated expenditures and the means of financing them. After Commission review and public hearings, the budget is adopted prior to October 1st. The budget is approved by district and fund. Management may transfer amounts between line items within a fund as long as the transfer does not result in an increase in the fund's budget. Increases to fund budgets require Commission approval. There were one (1) supplemental budgetary appropriations during fiscal year ended September 30, 2017. Budgets are considered a management control and planning tool and as such are incorporated in the accounting system of the Agency. Budgets are adopted on the modified accrual basis of accounting with the inclusion of encumbrances as reductions in the budgetary amount available. All appropriations lapse at year-end. The Remainder of this Page was Intentionally Left Blank • 61 SUPPLEMENTARY INFORMATION Miami Beach Redevelopment Agency (A Component Unit of the City of Miami Beach, Florida) Budgetary Comparison Schedule Debt Service Fund Year Ended September 30,2017 Variance with Final Budget— Original Budgeted Final Budgeted Actual Positive Amounts Amounts Amounts (Negatiee) Expenditures: Debt Service: Principal $ 6,495,000 $ 6,495,000 $ 6,495,000 $ - Interest 15,183,000 15,182,246 15,170,579 11,667 Other - 754 754 - Total expenditures 21,678,000 21,678,000 21,666,333 11,667 Excess of revenues over expenditures (21,678,000) (21,678,000) (21,666,333) 11,667 Other financing sources: Operating transfers in 21,678,000 21,678,000 5,512,636 (16,165,364) Total other financing sources 21,678,000 21,678,000 5,512,636 (16,165,364) Net change in fund balance - - (16,153,697) (16,153,697) Fund balance, beginning 16,153,697 16,153,697 16,153,697 - Fund balance,ending $ 16,153,697 $ 16,153,697 $ - $ (16,153,697) p 62 OTHER REPORTS Crowe Horvath® Crowe Horwath LLP Independent Member Crowe Horwath International INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITHGOVERNMENT AUDITING STANDARDS The Honorable Mayor and City Commissioners City of Miami Beach, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities,the business-type activities and each major fund of the Miami Beach Redevelopment Agency(the "Agency") as of and for the year ended September 30, 2017, and the related notes to the financial statements,which collectively comprise the Agency's basic financial statements,and have issued our report thereon dated May 22, 2018. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements,we considered the Agency's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Agency's internal control.Accordingly, we do not express an opinion on the effectiveness of the Agency's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions,to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Agency's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 63 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Agency's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of,our tests disclosed no instances of noncompliance or other matters that..are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Agency's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Agency's internal control and compliance.Accordingly,this communication is not suitable for any other purpose. Crowe Horwath LLP Miami, Florida May 22,2018 l - 64 MIAMI BEACH REDEVELOPMENT AGENCY (A Component Unit of the City,of Miami Beach, Florida) SCHEDULE OF FINDINGS YEAR ENDED SEPTEMBER 30, 2017 SECTION I -SUMMARY OF AUDITOR'S RESULTS FINANCIAL STATEMENTS Type of auditor's report issued Unmodified Internal control over financial reporting: Material weakness identified No Significant deficiency identified not considered to be material weakness None reported Noncompliance material to financial statements noted No SECTION II—FINANCIAL STATEMENT FINDINGS No items to report. 65 ' S MIAMI BEACH REDEVELOPMENT AGENCY (A Component Unit of the City of Miami Beach, Florida) SUMMARY OF PRIOR YEAR AUDIT FINDINGS YEAR ENDED SEPTEMBER 30, 2017 SUMMARY OF PRIOR YEAR AUDIT FINDINGS • FINANCIAL STATEMENT FINDINGS Material Weakness 2016-001 Bank reconciliations Criteria: Policies and procedures should reasonably assure that bank accounts are reconciled in a timely manner. Condition: We noted that there were several accounts which had not been reconciled within 30 days of the bank statement dates. Current Year Status: Finding has been resolved. Significant Deficiencies 2016-002 IT Controls Criteria: Information Systems controls should reasonably assure that electronic information is not compromised by unauthorized access to systems and that access is granted only as needed for individuals within the entity to perform their assigned responsibilities while maintaining adequate segregation of duties. Condition: We noted the following with respect to the City's information systems: 1. Management does not perform a periodic review of access to validate the appropriateness of each user with access to Munis. 2. Termination process — during our interim procedures, we noted that eight terminated user accounts were still active which could lead to unauthorized activity. During our year end procedures, we noted that the eight employees' accounts had been disabled. Current Year Status: Finding has been resolved. 2016-003 Schedule of Expenditure of Federal Awards and State Financial Assistance Criteria: Policies and procedures should reasonably assure that Federal award and State financial assistance expenditures be accurately reflected on the Schedule of Expenditure of Federal Awards and State Financial Assistance. Condition: We noted that there was one Federal award and two State projects amounts that had to be adjusted on the final Schedule of Expenditure of Federal Awards and State Financial Assistance received from the City. Current Year Status: Finding has been resolved. 66 A Crowe Horwath. Crowe Horwath LLP Independent Member Crowe Horvath International To the Honorable Mayor and Members of the City Commission City of Miami Beach, Florida Report on the Financial Statements We have audited the financial statements of the Miami Beach Redevelopment Agency(the"Agency)as of and for the fiscal year ended September 30, 2017, and have issued our report thereon dated May 22, 2018. Auditor's Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Florida Auditor General. Other Reports and Schedule We have issued our Independent Auditor's Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of The Financial Statements Performed in Accordance with Government Auditing Standards and Independent Accountant's Report on an examination conducted in accordance with AICPA Professional Standards,AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports and schedule,which are dated May 22, 2018, should be considered in conjunction with this management letter. Prior Audit Findings There were no prior year findings. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. This information is disclosed in the financial statements. Additional Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. • 67 Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit,we did not have any such findings. Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies,the Board of Commissioners,and applicable management,and is not intended to be and should not be used by anyone other than these specified parties. �.- -e ,(/nw a,o • Crowe Horwath LLP Miami, Florida May 22,2018 68 Crowe Horwath. Crowe Horwath LLP Independent Member Crowe Horwath International INDEPENDENT ACCOUNTANT'S REPORT ON COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES. To the Honorable Mayor and Members of the City Commission City of Miami Beach, Florida We have examined.the Miami Beach Redevelopment Agency's (the "Agency") compliance with Section 218.415, Florida Statutes, concerning the investment of public Agency's during the year ended September 30,2017.Management of the Agency is responsible for the Agency's compliance with those requirements. Our responsibility is to express an opinion on the Agency's compliance with the specified requirements based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and the standards applicable to attestation engagements contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether the City complied, in all material respects with the specified requirements referenced, above. An examination involves performing procedures to obtain evidence about whether the City complied with the specified requirements.The nature,timing,and extent of the procedures selected depend on our judgment, including an assessment of the risks of material noncompliance,whether due to fraud or error.We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does not provide a legal determination on the Agency's compliance with specified requirements. In our opinion, the Agency complied, in all material respects, with the requirements contained in Section 218.415, Florida Statutes for the year ended September 30, 2017. The purpose of this report is solely to comply with Chapter 10.550, Rules of the Florida Auditor General. Accordingly, this report is not suitable for any other purpose. g., e 1‘41.14)44., a Id U Crowe Horwath LLP Miami, Florida May 22,2018 69 MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) FINANCIAL STATEMENTS Year Ended September 30, 2017 MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) FINANCIAL STATEMENTS Year Ended September 30, 2017 CONTENTS • INDEPENDENT AUDITOR'S REPORT -/ 1 MANAGEMENTS DISCUSSION AND ANALYSIS (UNAUDITED) - % 4 BASIC FINANCIAL STATEMENTS / �* Government-wide Financial Statements: j Statement of Net Position / 8 • Statement of Activities i > 9 Governmental Fund Financial Statements: C t 4 1 Balance Sheet *� 10 Reconciliation of the Balance Sheet``=,GovernmentaFFund to the'\ Statement of Net Position 11 Statement of Revenues..Expendii\tures and Changes in Fund Balance 12 ! / J Reconciliation ofthe Statement of Revenues, Expenditures and Changes in Fund Balance of the Governmental Fund to the Statement of Activities 13 Notes to Financial Stat ments 14 REQUIRED,SUPPLEMENTARY INFORMATION (UNAUDITED) <Schedule of the Authon s Proportionate Share of the Net Pension Liability 27 Scheduleof the Authority Contributions 28 Schedule•of Revenues and Expenditures Budget and Actual`-General Fund 29 Notes to Required*Supplementary Information 30 INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 31 Crowe Horwath. Crowe Horwath LLP Independent Member Crowe Horwath International INDEPENDENT AUDITOR'S REPORT/ / / f To the Board of Directors Miami Beach Visitor and Convention Authority /' "-,� Miami Beach, Florida ." / \ Report on the Financial Statements We have audited the accompanying financial statements of the'governmental activities and the major fund of Miami Beach Visitor and Convention Authority (the "Authority"),/a component unit of the City of Miami Beach, Florida, as of and for the year ended September 30, 2017, and the related notes to the financial statements, which collectively comprise the Authority%'basic financial sta tements as listed in the table of contents. Management's Responsibility for-the Financial Statements r \, Management is responsible'for the,preparation 'and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America;this includes the design, implementation\. nd maintenance of interne!\control relevant to the preparation and fair presentation of financial statements that are-free from material misstatement,whether due to fraud or error. Auditor's Resp ibility Our responsibility is to express opinions on these financial statements based on our audit.We conducted our"audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.'Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the P 9 financial statements.The procedures selected depend on the auditor's judgment,including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the, circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.Accordingly,we express no such opinion.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. (Continued) 1. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and the major fund of the Authority,a component unit of the City of Miami Beach, Florida, as of September 30, 2017 and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and other required supplementary information, as listed in the table of contents,be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental AccountingStaridards Board,who considers it to be an essential part of financial reporting for placing the basic\financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing\the information and comparing the information for consistency with`managements responses to our inquiries, the basic financial statements, and other knowledge we obtained during our,auditof the basic financial statements. We do not express an opinion or provide any assurance on the.information because the limited procedures do not provide us with sufficient evidence to_exxpprreess an opinion or�provide any assurance. Other Reporting Required by Government Auditing Standards \, In accordance with Government Auditing Standards,we.have.also issued>our report dated ®, on our consideration of the.A,ithority's internal control over financial.'reporting and on our tests of its compliance with certain provisions of laws, regulations,`contracts;and grant agreements and other matters. The purposeof that report is to describe,the scope of our testing of internal control over financial reporting and compliance and the•results of that testing,and not to provide an opinion on internal control over financial reporting or on compliance. That report)is'an integral\part of an audit performed in accordance with Government Auditing Standards in considering Miami B�ch Visitor and Convention Authority's internal control over financial reporting and compliance. Crowe Horwath LLP Miami,'Florida 2. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) MANAGEMENT'S DISCUSSION AND ANAYLSIS (UNAUDITED) Year Ended September 30, 2017 The Management's Discussion and Analysis of the Miami Beach Visitor and Convention Authority (the Authority), a component unit of the City of Miami Beach, Florida (the City) is designed to (a) assist the reader in focusing on significant financial issues,(b)provide an overview of the Authority's financial activities and (c) identify changes in the Authority's financial position. This document should be read in conjunction with the financial statements and the accompanying notes to the financial statements. The following financial statements are presented: •The Statement of Net Position presents the financial position of the Authority/at September 30, 2017. It provides information about the nature and amounts of resources (assets), obligations (liabilities), and net position. The Statement of Activities presents changes in net position (revenue and expenses) over the course of the year ended September 30, 2017. The change in net positionmay be useful in assessing whether the Authority's financial position improved or deteriorated.fothe year. , The Statement of Net Position and the Statement of Activities, which comprise the Government-wide statements, are reported using the economic measurerrientffocus and the accrue l basis of accounting. Revenues are recorded when earned, and expenses are recorded when the liability is'incurred, regardless of the timing of related cash flows. The fund financial statements provide information about the Authority's,major fund,the General Fund,which is the Authority's primary operating fund and accounts for all financial resources of the Authority.The fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. \ '�. Because the focus of.the fund financial statement's--is narrower than\that of the government-wide statements,it is useful to compare the information presented for the_general fund with similar information presented in the government-wide statements.\As such, a'reconciliation is provided between the governmental and the government-wide\statements.The statements-and reconciliations can be found on pages 7 through 12 ofthe financial statements. t Ip • • ', • (Continued) 3. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) MANAGEMENT'S DISCUSSION AND ANAYLSIS (UNAUDITED) Year Ended September 30, 2017 Government-Wide and Governmental Activities Financial Analysis The following is a summary of the Authority's assets,liabilities and net position at September 30,2017 and 2016 with pertinent comments and information: 2017 2016 ASSETS Current assets $ 4,487,078 $ 4,064,327 Non-current assets: Capital assets, net 139,493 148,843 Total assets 4,626,571 4,213,170 Deferred outflows of resources—net pension liability /� '16087 122,100 Total assets and deferred outflows of resources' $4.792.658'' $ 4.335.270 LIABILITITES AND NET ASSETS Liabilities: • � Current liabilities - .� ' `$' 508,902 $ /542,605 Non-current liabilities: `,, Net pension liability • / 607,226 ) 674,736 Compensated absences,' ; � '• 23,088 20,185 Total liabilities \ 1,139,216 1,237,526 k Deferred inflows of resources—net pension liability . . 5,102 - ! y Net position: Net investrhent'in capital`assets 139,493 , 148,843 Unrestricted/ ! ••� 3,508,847 2,948,901 Total net position / 3,648,340 3;097,744 Total liabilities,deferred inflowss of 2 • resources.andne,,t position $ 4.792.658 $ 4,335,270 Total assets the Au horit increased by413 401 or 9.8%, from theprior year. Assets consisted Y $ � � . primarily of cash and cash.equivalents,which represents $3,965,702 or 85.7% of total assets. Cash and cash equivalents increased by$230,087 or,6.2%from the prior year. Cash is unrestricted and available for use in daily operations and forpultural-grant awards.This increase is due to the positive operating results. The Authority's netposition increased by$550,596,or 17.7%,from the prior year. Unrestricted net position totaled $3,508,847. (Continued) 4. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) MANAGEMENT'S DISCUSSION AND ANAYLSIS (UNAUDITED) Year Ended September 30, 2017 The following is a summary of the Statement of Activities for the fiscal year ended September 30,2017 and 2016, with pertinent comments and information: 2017 2016 - Revenue - Program revenues: Operating grants and contributions $ - $ 30,500 General revenues: Resort tax allocation 2,651.,436 2,732,076 Interest income /3,926 3,904 Total revenues 2;655,362 2,766,480 N Expenses i \ Cultural-grants program / 1;339;7,65 1,614,023 Other °� 765,001 854,465 Total expenses2,104,766\ 2,468,488 Changes in net position $ 550.596` $\ 297,992 The Authority had an increase in net position of$550,596 for the fiscal year ended Septemberf30,2017 as . compared to an increase of$297,992 in fiscal year 2016;.which resulted from the following: The Authority received$2,651,436 in resort tax allocation from:the City during fiscal year 2017.This amount represents an $80,640 or 3.0% decrease in allocation from theprior year. Additional information on the Authority's Resort Tax allocation can be found in Note-4 to the financial.statements. The Authority expended $1,339,765 for the cultural-grants program in tl a current year as compared to $1,614,023 in 'the prior year,._.a:decrease of $274,258r..1 . o7.0%. Cultural-grants program expenses represented 63.7%of the Authority's total expenses. .7 ,� R �� Budgetary Highlights` ' t The following is the Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual for the Authority's General Fund,with-pertinent'cornm ents and information: Original/ Final Budget Actual Revenues General revenues:•. �\ \ \Resort tax allocation • .j $ 2,676,000 $ 2,651,436 interest - 3,926 "Total revenue 2,676,000 2,655,362 Expenditures •\ Cultural-grants'.program 1,722,000 1,339,765 Administrative.and other 1,374,000 854,995 Capital `.// 5,000 4 14 Total expenditures 3,101,000 2,198,908 Changes in fund balance $ (425,000) $ 456.454 - • (Continued) 5. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) MANAGEMENT'S DISCUSSION AND ANAYLSIS(UNAUDITED) Year Ended September 30, 2017 Cultural-grant program expenditures were$382,235 or 22.2%, less than budgeted. The revenue variance between the Authority's original budget and actual was.resort tax allocation received from the City, which was $24,564, or 0.1%, less than budgeted, due to an overall decrease in resort tax revenue collected by the City. Capital Assets The Authority's net investment in capital assets at September 30, 2017 was $139,493. Capital assets include equipment and building improvements. Capital assets, net.of .accumulated depreciation, at September 30,2017 and 2016 are detailed as follows: > 2017 2016 Equipment and improvements .e/ $ 139,493 $ 148,843 Total capital assets, net $ 139.493\\$ 148.843 Additional information on the Authority's capital assets can'be found in Note 5 to the financial statements. Economic Factors and Future Developments s • r/ °e•. / The Authority will continue to award grants fort urism Advancement Programs(TAP)tourism partnership, special events(recurring),special events' w'(neorone-time)film'incentive,cultural tourism,special projects and special projects recurring. Applications and guidelines can be-assessed in several formats, including Microsoft Word.and PDF on the website at ww .m wiarnibeachvca.com. The Authority's meeting minutes also are available. The TAP has an original adopted budget of approximately$1,700,500 for the fiscal year 2018.This amount represents a decrease of approximately$150,000 from the fiscal year 2017 original budget. The Authority also budgeted $281,400 for strategic initiatives and expects to support new initiatives in the coming year at the request of partners and community resort leaders.Strategic plans,goals,and initiatives will be developed after consulting with partners and as a result of ongoing communications. Some of these initiatives include the implementation of summer-long events on Miami Beach including, but not limited to, supporting a food and wine festival, television origination projects, and a Miami Beach based film festival. The Authority also is taking a leadership role in encouraging events of mass appeal to take place in Miami Beach. A total of$200,000 will be rolled over from fiscal year 2017 into the fiscal year 2018 budget. This rollover of funds is from the Cultural Grants and General Administrative categories in which the total monies allocated were not used during fiscal year 2017. These monies also include grants that were not awarded and/or rescinded. • Request for Information Questions concerning any of the information provided in this report or requests for additional information should be addressed to: Miami Beach Visitor and Convention Authority 1701 Meridian Avenue, Ste.402A, Miami Beach, Florida 33139. 6. f MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) STATEMENT OF NET POSITION September 30, 2017 ASSETS Current assets Cash and cash equivalents $ 3,965,702 Due from primary government 521,376 Total current assets 4,487,078 Non-current assets Capital assets, net of accumulated depreciation 139,493 Total non-current assets 139,493 Total assets 4,626,571 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows-pension 166,087 LIABILITIES Current liabilities Accrued expenses 250 Accrued grants 508,652 Total current liabilities 508,902 Non-current liabilities Net pension liability 607,226 Compensated absences 23,088 Total non-current liabilities 630,314 Total liabilities 1,139,216 DEFERRED INFLOWS OF RESOURCES - Deferred inflows-pension 5,102 NET POSITION Net investment in capital assets 139,493 Unrestricted 3,508,847 Total net position $ 3.648,340 The accompanying notes are an'integral part of these financial statements. 7. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) STATEMENT OF ACTIVITIES Year Ended September 30, 2017 Function/Program Expenses Total Governmental activities: Cultural-grants program $ 1,339,765 $ (1,339,765) General administration 765,001 (765,001) Total governmental activities $ 2,104,766 (2,104,766) General revenues: Resort tax allocation 2,651,436 Interest income 3,926 Total general revenues 2,655,362 Change in net position 550,596 Net position, beginning 3,097,744 Net position, ending $ 3,648,340 The accompanying notes are an integral part of these financial statements. 8. • MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) BALANCE SHEET-GOVERNMENTAL FUND September 30, 2017 General Fund ASSETS Cash and cash equivalents $ 3,965,702 Due from primary government 521,376 Total assets $ 4,487,078 LIABILITIES Accrued expenses $ 250 Accrued grants 508,652 Total liabilities 508,902 Fund balance Assigned 1,700,000 Unassigned 2,278,176' Total fund balance 3,978,176 Total liabilities and fund balance $ 4,487.078 The accompanying notes are an integral part of these financial statements. 9. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) RECONCILIATION OF THE BALANCE SHEET- GOVERNMENTAL FUND TO THE STATEMENT OF NET POSITION September 30, 2017 Total fund balance-governmental fund $ 3,978,176 Amounts reported for governmental activities in the statement of net position are different because: The cost of capital assets required is reported as an expenditure in the governmental fund. The statement of net position includes those capital assets, net of accumulated depreciation among the assets of the government as a whole. The cost of capital assets presented as governmental activities are: Cost of capital assets $ 227,184 Accumulated depreciation (87,691) 139,493 Liabilities not payable from current available resources are not reported as fund liabilities in governmental fund financial statements. All liabilities, both current and long-term, are reported in the government-wide financial statements: Compensated absences (23,088) Net pension liability (607,226) (630,314) In governmental funds, deferred outflows and inflows of resources relating to pensions are not reported because they are applicable to future periods. In the statement of net position, deferred outflows and inflows of resources relating to pensions are reported. Deferred outlfows of resources relating to pensions 166,087 Deferred inflows of resources relating to pensions (5,102) 160,985 Net position of governmental activities $ 3,648,340 J The accompanying notes are an integral part of these financial statements. 10. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended September 30, 2017 General Fund Revenues Resort tax allocation $ 2,651,436 Interest 3,926 Total revenues 2,655,362 Expenditures General government: Cultural-grants program 1,339,765 General administrative 854,995 Capital 4,148 Total expenditures , 2,198,908 Net change in fund balance 456,454 Fund balance, beginning of year 3,521,722 Fund balance, end of year $ 3,978,176 The accompanying notes are an integral part of these financial statements. 11. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE OF THE GOVERNMENTAL FUND TO THE STATEMENT OF ACTIVITIES September 30, 2017 Net change in fund balance- governmental fund $ 456,454 Amounts reported for governmental activities in the statement of net position are different because: Capital outlays are reported in governmental funds as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. In the current year these amounts are: Capital outlay 4,148 Depreciation expense (13,498) Some expenses reported in the statement of activites do not require the use of current financial resources and therefore are not reported as expenditures in the general fund. Compensated absences - (2,903) In government funds, pension costs are recognized when employer contributions are made. In the statement of activities, pension costs are recognized on the accrual basis. This year, the - ''t' difference between accrual-basis pension costs and actual employer contributions was: 106,395 Change in net position of governmental activities $ 550,596 • The accompanying notes are an integral part of these financial statements. 12. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) NOTES TO FINANCIAL STATEMENTS September 30,2017 NOTE 1 -ORGANIZATION AND REPORTING ENTITY The Miami Beach Visitor and Convention Authority(the"Authority")of the City of Miami Beach, Florida(the "City")was established by Ordinance No. 1779, adopted by the City Commission on September 17, 1969, (as amended by City Ordinance No. 1885)pursuant to Chapter 67-930 of the Florida Statutes.The Authority was established for the purpose of encouraging, developing, and promoting tourism for the City. Accounting principles generally.accepted in the United States of America, require that the financial statements of the reporting entity include: (1) the primary government,12) organizations for which the primary government is financially accountable, and (3) other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The provided in Government Accounting Standards Board Statements Nos. 14, 39 and 61 have'been considered and there are no agencies or entities which should be presented with the Authority. Using the sam'criteria,the Authority is a discretely presented component unit of the City;thereby, its financial statements are-included in the City's basic financial statements as a discretely presented component unit. y A legally separate, tax exempt organization should bee reported as a component unit of a reporting entity if all of the following criteria are met: (1)the primary government is financially accountable'fit appoints a voting majority of the organization's governing body, or(2)if the.organization is fiscally dependent on the primary government and there is a potentiaLfor the organization either to provide specific financial benefits to,or to impose specific financial burdens on,the-primary government,the primary government is financially accountable for the organization: .Blended'9omponent units, although legally separate entities, are, in substance, part of the. government's.operations:and'are reported `with similar funds of the primary government. -Each discretely. presented .component-,.unit`is,,reported"la separate column in the government-Wide financial statements to emphasize that itis legally separate from the primary government. This-report does not contain any component.units."` / NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES v f The financial statements of`the Authority are presented'inaccordance with accounting principles generally ' accepted inthe-United States ofAmerica,at-applicabto governmental units.The following is a summary of the more significant-policies., Basis of Presentation: Thee basic financial statements include both the government-wide and fund financial statements: Government-wide Statements The statement of net position and the statement of activities present information about the financial activities of the Authority es a whole...• The statement of activities reports expenses identified by specific functions, offset by program revenues, resulting in a measurement of net revenue (expense) for each of the Authority's functions. Program revenues that are used to offset these expensesare operating grants and.contributions. Fund Financial Statements The fund financial statements provide information about the Authority's major fund,the General Fund,which is the Authority's primary operating fund and accounts for all financial resources of the Authority. (continued) 13. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) NOTES TO FINANCIAL STATEMENTS September 30,2017 NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Measurement Focus and Basis of Accounting: The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues, such as resort taxes, are recorded when earned and expenses are recorded when the liability is incurred, regardless of the timing of related cash flows. Revenues from grants and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied. • F� Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Only current assets and cu rent liabilities are generally included on the balance sheet.The operating statement presents sources and uses of available spendable resources during the year. Under the modified accrual basis of accounting, revenues are recognized when they are both measurable and available. "Measurable" means,the amount of the transaction can be determined;"available"means collectible within the current periodor within 60 days of the end of the current period to be used to pay liabilities of the current period. . / Resort taxes, grants, when all the eligibility requirements pave been met, and interest associated with the current fiscal period, are all considered to be measureable and so hay" been recognized,as revenues of the current fiscal period, if available. °,, 0.R r Expenditures under the modified accrual basis of accounting are{generally recognized when the related fund liability is incurred and expected to.:be liquidated with available resources. However, debt service, compensated absences,and claims expenditure;are-recorded only,when payment is due. Cash: Cash is held in demand deposits and money market bank accounts. . Capital Assets: ..Capital assets, include office/i provements, office furniture and .computer equipment,are reported in theatatement,of net posiition in the government-wide statements.Capital assets are defined by the Authority/as assets:with an initial individual cost of more than$5,000 and an estimated useful life of more than one year.Assets a're recorded Ahistorical cost. However,in the governmental fund financial statements,'capital expenditures�(capital assets):are reported as expenditures. • a' * l\ Capital assets-are_depreciated using�the straight-line method based on the following estimated useful lives: > Useful Life Years i a �. . / ;t, a,, Furnitue,fixtures\,and equipment 3-5 Improvements\,2 15 r When capital assets are sold or disposed of, the related cost and accumulated depreciation are removed from the accounts;‘and the resulting gain or loss is recorded in the government-wide statement of activities. `W`a�, \,q h , /. Net Position/Fund'Equity/ GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions establishes accounting and financial reporting standards for governmental funds. It establishes criteria for classifying fund balances into specifically defined classification and clarifies definitions for governmental fund types. Fund balances for governmental funds are reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent..Fund balance classifications are assigned by the Authority's board, and approved by the City of Miami Beach Commission. (continued) 14. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) NOTES TO FINANCIAL STATEMENTS September 30,2017 NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Net Position/Fund Equity(continued): • When,both restricted and unrestricted amounts are available for use, it is the Authority's practice to use restricted resources first. Additionally, the Authority would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance. In the fund financial statements,fund balance classifications are: ` • Nonspendable Fund Balance — amounts that cannot be spent.because they are either (a) not in spendable form or(b)legally or contractually required to be maintained intact. • Restricted Fund Balance-amounts that are restricted to specific purposes when constraints placed on the use of resources are either by (a) externally imposed,�by/creditors'(such as debt covenants), grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislations. • Committed Fund Balance-amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the Authority Board'through an ordinance or resolution'which,are equally binding as the highest decision making authority. The`Board adopts'a resolution, which/includes the m amount to be committed and the reason for the comitm`erlt.•Only'an adopted resolution by the Board can establish, modify or rescind the commitment. \ • Assigned Fund Balance — amounts,that are constrained'by the government's intent to be used for specific purposes, but are neither restricted.nor committed. \ • Unassigned Fund Balance—may include residual positive fund balance within the General Fund which has not been classified within the othei%above menti no ed,c tegories>Unassigned fund balance of governmental funds is reported in various categories based on�the nature of any limitations requiring the use of resources for"specific purposes. The government itself can establish limitations on the use of resources through either a commitment( nonspendable fund balance) or an assignment (assigned fund balance) \ Net position are categorized.as follows: a. INet Investment in Capital.Assets—is'intentled.to reflect the portion of net position which are associated with capital assets,less outstanding ac pital asset rs elated debt,net of unspent bond and loan proceeds. b. Restricted Net Position=`have third party(statutory, bond covenant or granting agency)limitations on their use, or enabling legislation. c. Unrestricted Net Position have no third party limitations on their use. While Authority management •may,have categorized and segmented portions for various purposes, the Board has the unrestricted authority to revisit or alter these managerial decisions. Net Pension L ability: For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions,and pension expense,information about the plan net position of the Miami"Beach General Employees' Retirement Plan (MBGERP)and additions to/deductions from the MBGERP pian\net position has been determined on the same basis as they are reported by the MBGERP. For this purpose;benefit payments(including refunds of employee contributions)are recognized when due and payable ih'ccordance with the benefit terms. Compensated Absences: The Authority's vacation and sick leave policies grant a specific number of days of annual and sick leave with pay. In addition,these policies provide for paying a regular employee after a six-month probationary period for accumulated unused annual and sick leave upon termination. Compensated absences are accrued when incurred in the government-wide financial statements.A liability for these amounts is reported in the governmental funds only if it has matured, for example, as a result of employee resignation or retirements. (continued) 15. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) NOTES TO FINANCIAL STATEMENTS September 30,2017 NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.Actual results could differ from management's estimates. New Accounting Pronouncements: ,N In March 2016,the GASB issued Statement No.82,"Pension Issues—an Amendment of GASB Statements No. 67, No, 68 and no. 73". The objective of this Statement is to address certain issues that have been raised with respect to Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for Pensions,and No.73,Accounting and Financial Reporting forPensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to`Certain Provisions of GASB Statements 67 and 68. Specifically,this Statement t addresses issues regarding\(1)the presentation of payroll-related measures in required supplementary information, (2) the selection'of assumptions and the treatment of deviations from the guidance in an:'Actuarial Standard of Practice for financial reporting purposes, and (3) the classification of payments made,by'employers tofsatisfy employee(plan member) contribution requirements.The requirements of this Statement are effective for the Authority's financial year ending September 30,2017,except for the requirements of this Statement for the selection of assumptions in a circumstance in which an employer's pension liability is measured as of a date other than the employer's most recent fiscal year-end. In that circumstanc'the requirements for the selection of assumptions are effective for that employer in the first reporting period in which the measurement date of the pension liability is on or after June 15, 2017. NOTE 3 -CASH AND CASH EQUIVALENTS . / The Authority's cash and cash equivalents of$3,965,702 consist of demand deposits and money market deposit accounts.These accounts'are not;subject to`interest rate risks,credit risks or concentrationof credit risks. To mitigate custodial credit risk, all'deposits are held in banking institutions approved by the State Treasurer of the State'of Florida to hold-public,funds:, Under the Florida Statutes Chapter 280, Florida Security for Public Deposits Act,'the-Slate Treasurer-requires all qualified public depositories to deposit with the Treasurer or-another panking institution-eligible collateral equal to 50% to 125% of the average daily balahce"for each month of all public deposits in excess of any applicable deposit insurance held.The percentage of eligible'collateral '(gene\ ally, United States government and agency securities, state of municipality government debtt,\or corporate bonds)to public deposits is dependent upon the depository's financial history and its compliance withChapter 280, Florida Statutes. In the event of a failure of a qualified public depository,the remaining public depositories would be responsible for covering any resulting losses. NOTE 4-RESORT TAX ALLOCATION The City levies and.collects resort taxes that are composed of a 4% tax levied as follows: (1) a 2% tax (initial resort tax) levied on,the rent of every occupancy of a room in any hotel, motel, rooming house or apartment house in the .City and on the total sales price of all items of food, beverages and alcoholic beverages sold at retail of any restaurant in the.City(2)an additional 1%tax(bed tax)on the rent of every occupancy of a room in any hotel,motel,rooming house or apartment house in the City and(3)an additional 1% tax levied on short-term rental activity for debt service. The Authority's principal source of revenue represents an amount equal to 5% of the initial resort tax collected by the City, net of a 4% collection fee withheld by the City. The amount due of $521,376 from the City represents the unremitted resort tax allocation as of September 30,2017. (continued) 16. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) NOTES TO FINANCIAL STATEMENTS September 30,2017 NOTE 5-CAPITAL ASSETS Capital asset balance and activity for the period ended September 30,2017 are as follows: Balance Balance October 1, September 30, 2016 Additions Deletions 2017 Capital assets, being depreciated: . Equipment $ 32,059 $ - $ > - $ 32,059 Building improvements 190.977 4,148 . / - 195,125 Total capital assets 223,036 4.148 227,184 Less: accumulated depreciation // • Equipment 22,274 , •\ '626 \,- 22,900 Building improvements 51,919 • .12 872 64,791 Total accumulated depreciation . 74,193." / 13,498 •- \ 87,691 Net capital assets $ 148.843 C $ 9.350\> $ - . :\i\139.493 All of the current year depreciation expense is allocated to the,Generral Administration function. NOTE 6-FUND BALANCE The governmental fund financial statementspresent fund-balances based on classifications that comprise a hierarchy that is based primarily on the extent\to which-the Authority is bound to honor constraints on the specific purposes for which amounts in the governmental`funds can be spent. The classifications used in the governmental fund financial statements are as follows./ i \ `` l✓ Nonspendable=At/September 30, 2017, the Authority has$0 that is nonspendable. ) Assigned - At, September 30, 2017, the Authority has $1,700,000 that it intends to use for contingencies, either\ resulting fro a downtumn min the economy or other emergencies such as hurricanes. Of the total abo e, $650;000.isa gned for major events. linessigne`d--.At\September 30, 2017, the Authority has $2,278,176 that is available for any purpose. NOTE 7-COMMITMENTS \ 1 The Board of Directors of the,Authority has approved approximately$1.7 million of grant commitments to provide future funding to certain organizations for Tourism Advancement Programs ("TAP") tourism partnership, special-events (5ecurnng), special events (new or one-time), film incentive, cultural tourism, festival season, special,projects and special projects recurring. The grants are revocable at the discretion of the Board. 1 (continued) 17. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) 1, NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 8-PENSION PLAN Plan.Description Substantially all full-time employees of the Authority are provided with pensions through the Miami Beach Employees' Retirement Plan (the Plan)—a single employer defined benefit pension plan administered by the City of Miami Beach, Florida. The Plan issues a publicly available financial report that can be obtained at http://web.miamibeachfl.gov/mberp. The benefit provisions and all other requirements are established and may tie mmended by City ordinance. The plan provides for retirement benefits as well as death and disaityqbenefits at three different tiers depending on when the members entered the Plan: < •, The First Tier is for members that entered the Plan prior to-the Second Tier Dates. The Second Tier is for members that entered the Plan on or after the Second:Tie/Dates, but before the Third Tier Dates. The Third Tier is for members that entered the Plan on orpafter the Third Tier Dates. Both the Second Tier and e,„ Third Tier Dates were established when each of the-,u ions bargained with the City`to`establish new guidelines for retirement benefits relating to employees°associated with their Unions. The Second Tier Dates are April 30, 1.993 for members of AFSCME;August 1;,1993 for those classified as Other and GSAF, and February 21, 1994 for members of CO/A"The Third Tier Dates.are September 30, 2010 for members of AFSCME, GSAF and for those classified ds-other;and October•27'2010 for members of CWA. �,. ti Classified members administered under the First Tier are,eligible for normal retirement at age 50 and five years of Creditable Service and_are entitled to,benefits;.of 3%o.„of Final Average Monthly Earnings (FAME) multiplied by.the first 15 years of.Creditable Service:0144% Of FAME multiplied.by.years of service in excess of 15 years,with the total ot-to exceed 90%,of FAME. First Tier unclassified members accrued 4% for creditable service before'October'18, 1992. Unclassified First Tier members accrued 3% per year of service after October 18;J1992, with the total not to exceed 80% of FAME. Classified and unclassified members administered under the Secon� Tier are eligiblefor Normal Retirement at age 55 and five years of creditable service and are�entitled to benefits-of 3% of FAME multiplied by creditable service, subject to a maximum of-80% of FAME. Classified and unclassified members administered under the Third Tier are eligible for Normal Retirement at"age 55 with at le st 30 years" of creditable service,or age 62 with at least five years ofcr d ble,service and are entitled to benefits of 2.5%of FAME multiplied by creditable service, subject to" maximum of 80%sof FAME\For elected officials, City Manager or City Attorney, the benefit is 4% ar° "of FAME for each yeof creditable service as an elected official,city manager or city attorney plus the retirement benefit as defined above for an/other period of city employment, subject to a maximum of 80% of FAME:.." Final average monthly earnings,(FAME) means one-twelfth of the/average annual earnings during the highest two paid year of credible service. For Unclassified First Tier members who became a member prior to October 18;1,992 and'was continuously a member from that date until March 18, 2006, FAME is defined as the largerof one-twelfth average covered salary during the two highest paid years of creditable service or one-twelfth of°the pay of the year immediately preceding March 18, 2006. Effective as of September 30,2010, FAME for members who have obtained normal retirement age or are within 24 months from normal retirement age is defined as average covered salary during the two highest paid years of creditable service. FAME for those members who as of September 30,2010 are between 24 and 36 months from normal retirement age is defined as average covered salary during the three highest paid years of creditable service.FAME for those members who as of September 30,2010 are between 36 and 48 months from normal retirement age is defined as average covered salary during the four highest paid years of creditable service. FAME for those members who as of September 30,2010 are more than 48 months from (continued) 18. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) NOTES TO FINANCIAL STATEMENTS September 30, 2017 NOTE 8-PENSION PLAN (Continued) normal retirement age is defined as average covered salary during the five highest paid years of creditable service. A Member with five or more years of creditable service may, at any time prior to retirement, elect to purchase a maximum of two years additional creditable service. Effective September 30,2013, Members whose classification is included in the CWA and GSAF bargaining unit and Members who are not included in any collective bargaining unit shall.not be eligible to purchase additional creditable service. Effective April 23, 2015, members whose ciassifcations are included in the AFSCME bargaining unit are not eligible to purchase additional creditable,nice. • Any First Tier member who terminates employment may either requesta refund of their own contributions plus interest,or receive their accrued benefit beginning at age 50;'if t'least five years of creditable service are completed.Any Second Tier member who entered on or efterthe Second Tier Date and who terminates employment after five years of creditable service may either request a refund of their own contributions plus interest or receive their accrued benefit beginning at age 55 'Any Third Tier member entered on or after the Third Tier Date and who terminates employment after five years of creditable service but prior to the normal or early retirement date shall be eligible to_receive a normal'retirement benefit-et age 62. Deferred retirement option plan (DROP) A DROP was enacted on January 28, 2009 by Ordinance 2009-3626. Under this Plan, First and Second Tier members who have attained eligibility'for,Normal.Retirement may-continue working with the City for up to three years, while receiving a retirement benefit that-is deposited"into a DROP account. Third Tier members may participate in a DROP accourit,,for\up to-five years. Effective'July 17, 2013, Members within classifications in the CWA bargainingunit who werehired prior to-October 27, 2010, and Members not included in-any bargaining.unit who were.hired,pnor to September 10; 2010, mayelect to retire for the purposes of thePlan but.contiriue employmentwith theCity for up to sixty months, and have their monthly retirement benefit paid"into" DROP account during 4he DROP period. Effective October 1, 2013, any member within classifications in the GSAF bargaining may elect to retire for the purposes of the Program but continue employment with the City for up to sixty months, and have their monthly retirement paid into a DROP account during the DROP, period. Effective April 23, 2014, members within classifications in the AFSCME bargaining unit who were hiredred priorto September30,2010, may elect to retire for the purposes i of the Plan-but cortin e,�employment with the City-for up to sixty months, and have their monthly retirement benefits'paid`into a"DROP.account during the DROP period. The amount of the benefit is calculated as if the participant had retired on the date of DROP commencement. Upon termination with the City, the accumulated value of the DROP account.is distributed to the participant. A member's creditable service, accrued benefit and compensation calculation shall be frozen. A series of investment vehicles wliich are established by the board of trustees are made available to DROP participants tochoose'from. Any,losses, charges, or expenses incurred by the participant in their DROP account are not made up by the/City or the Trust, but shall be borne by the participant. Upon termination of employment, a membermay receive distributions in accordance with the Plan. A DROP participant shall not be entitled to receive an ordinary or service disability retirement and in the event of death of a DROP participant, there shall be no accidental death benefit for pension purposes. DROP participation does not affect any other death or disability benefit provided to a member under federal law, state law, City ordinance, or any rights or benefits under any applicable collective bargaining agreement. First and Second Tier members receive an annual cost-of-living adjustment(COLA)of 2.5%. (continued) 19. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) NOTES TO FINANCIAL STATEMENTS September 30,2017 - NOTE 8-PENSION PLAN (Continued) Deferred retirement option plan (DROP)(Continued) The COLA is not payable while members are in the DROP. For Third Tier members the COLA is 1.5%.As of September 30, 2016, there were 105 members in the DROP and the value of DROP investment was $16,100,212, which is included in the Plan's net position. The DROP also allows for member loans. Approximately$243,425 loans were outstanding as of September 30,2017. . Contributions • The City is to contribute such amounts as are necessary to maintain the-actuarial soundness of the Plan and to provide the Plan with assets-sufficient to meet the benefits to be paid to the members.All First Tier members who participate are required to contribute 12%of theecovered salary to the Plan.All Second and Third Tier members are required to contribute 10% of their.covered salary. , For the fiscal year ended September 30,2017,the Authority was required to make contributions of$87,099 or 27.7%of covered payroll to the Plan in accordance with actuarially determined requirements computed through an actuarial valuation performed as of October 1,.2015 rolled forward to the September 30, 2016 measurement date. For the year ended September 30,201.7;the employees contributed$25,707. Pension liabilities,pension expense, and deferred outflows of resources and deferred inflows of resources related to pensions - At September 30,, 2017;the Authority''reported a liability of $607,226 for its proportionate share of the City's net. pension liability' The net pension liability was measured as of September 30,2016 and the total pension liability\used to calculate the net pension liability was determined by an actuarial valuation as of October.1, 2015,Thee Authority's proportion-of the net pension liability was the Authority's share of- contributions to the pension"plan relative`to: contributions of all participating employers.At September 30,/20"17;theAuthority's proportion was 0:30%. For the year ended''September 30, )2017, the Authority recognized pension benefit of $106,395. At September 30, 2017,;the Authority reported deferred\outflows of resources and deferred inflows of resources related to pensions from-the following,sources:j (� Deferred Deferred \ \ \\ Outflows of Inflows of Resources . Resources Difference between expected and'actual experience $ 3,908 $ 5,102 Changes in assumptions 44,078 Net difference between projected and actual earnings on pension plan investments 31,002 - Subequent Contributions J 87,099 - \, / $ 166,087 $ 5,102 (continued) 20. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) NOTES TO FINANCIAL STATEMENTS September 30,2017 1 NOTE 8-PENSION PLAN (Continued) At September 30, 2017, the Authority reported $87,099 as deferred outflows of resources related to pensions resulting from Authority contributions subsequent to the measurement date that will be recognized as a reduction of the net pension liability in the year ending September 30, 2018. Deferred outflows of resources at September 30, 2017, related to pensions will be recognized in pension expense in future periods as follows: -\/ 2018 $ 28,086 / 2019 24,889 < 2020 26,8,18• 2021 • (5,9071' \ Total $ N 73.886 N Actuarial assumptions-The following methods and assumptions were used to determine the total pension liability at the actuarial valuation date of October 1,2015.The actuarial valuation was rolled forward to the September 30,2016 measurement date. < (/' N .:Actuarial Cost Method Entry Age Normal, Amortization Method Leyel dollar, Closed.," Inflation 3%--„., ' Salary Increases 4.5%to 7:0%depending.on service, including inflation Investment Rate of Return 7.70%0\ Retirement Age Experience -based able of rates that are specific to the type of eligibility condition ,. '�,,,� y, Mortality RP-2000 Combined Healthy Participant Mortality Table for males and females with mortality improvements projected after year ". 2000 to the year 2010 using Scale AA. t The long-term expected rate of return on /pension plan invoestments was determined using a building-block method in which best-estimate ranges of'expected future real rates of''return (expected returns, net of pension plan inyestment expense a/Ind"inflation) are developed for each major asset class. These ranges are combined to produce the long`erm expected-rate.of return by weighting the expected future real rates of return'by,,the-target asset allocation percentage and by adding expected inflation. The target asset allocation end best estimates of arithmetic nominal rates of return for each major asset class are surrimarii ed in the following table: %., ` Target Long-Term Nominal Asset Class Allocation Rate of Return Domestic equities " / 39% 3.90% Fixed income\ . j 28 2.04 International equities/" 16 4.70 Real estate ' ,,.' 17 3.20 Total ' 100% (continued) 21. I i MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) NOTES TO FINANCIAL STATEMENTS September 30,2017 NOTE 8-PENSION PLAN (Continued) Discount rate - This single discount rate was based on the expected rate of return on Pension Plan investments of 7.70%. The projection of cash flows used to determine this single discount rate assumed that Plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the total actuarially determined contribution rates and the member rate. Based on these assumptions,the Pension Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current Plan.members. Therefore, the long- term expected rate of return on Pension Plan investments (7.70%)was applied: to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Authority's proportionate share of the netpension liability hanges in the discount rate -The Authority's proportionate share of the net pension liability has been caldulack using a discount rate of 7.70%. The following presents the Authority's proportionate share of the net pension liability calculated using a discount rate 1.00% higher and 1.00%lower than`the,c'urrent rate: "\ < 1%,•\ Current •• "\ 1% Decreas, Discount "o Increase (6:(0%) Rate(7.70%) (8.70%) Proportionate of the Collective Net Pension Liability \ - . $ 863,492 $$ 607,226 $ 392,395 � • Summary Pension Plan Information:. . Aut. thority's Pension Plan Information (Net Pension Liability `' $ 607,226 • Deferred outflows-of resources 166,087 Deferred`inflows-of resources,„/ 5,102 Pension Expense "'.— (106,395) Pension.plan fiduciary net position. Detailed information about the pension plan's fiduciary net position is available'in the separately iss&ued Plan financial report. •••,„.• J/ .! 22. f ) 7 MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF THE AUTHORITY'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY September 30, 2017 Miami Beach Employees' Retirement Plan 2017 2016 2015 Authority's proportion of the net pension liability 0.30% 0.33% 0.31% Authority's proportionate share of the net pension liability $ 607,226 $ 674,736 $ 512,291 Authority's covered-employee payroll 305,523 281,739 250,050 Authority's proportionate share of the net pension liability as a percentage of its covered-employee payroll 198.75% 239.49% 204.88% Plan fiduciary net position as a percentage of the total pension liability 73.06% 72.07% 77.59% *The amounts presented for each fiscal year were determined as of the year-end that occurred one year prior. **This is a 10-year schedule. However,the information in this schedule is not required to be presented retroactively. Years will be added to this schedule in future years until 10 years of information is available. / \ • \, • 23. I ? MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) • REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF AUTHORITY'S CONTRIBUTIONS September 30,2017 Miami Beach Employees' Retirement Plan 2017 2016 2015 Contractually required contribution $ 87,099 $ 85,163 $ 85,163 Contributions in relation to the contractually required contribution (87,099) (85,163) (85,163) Contribution deficiency(excess) $ - $ - $ - Authority's covered-employee payroll $ 314,529,.. $ 305,523 $ 281,739 \ ✓% Contributions as a percentage of covered-employee payroll 27:69% N 27.87% 30.23% **This is a 10-year schedule. However,the information in this schedule is not required,to be presented retroactively. , Years will be added to this schedule in future years until 10 years of information is.available_\ f,f.` r., ,; N /.. ' \ • S's,'-,-„, �'1 �y t .\ x._ > d. / .� ''',:. ' r • 24. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A Component Unit of the City of Miami Beach, Florida) SCHEDULE OF REVENUES AND EXPENDITURES BUDGET AND ACTUAL—GENERAL FUND (UNAUDITED) Year Ended September 30,2017 • Variance with Final Budget- Original and Positive Final Budget Actual Negative Revenues >> Resort tax allocation $ 2,676,000 $ 2,651,436 $ (24,564) Interest - 3;926 3,926 Total revenues 2,676,000 2,655,362'\ (20,638) Expenditures \ General government: / `�� Cultural-grants program 1,722,000 1,339,765 382,235 • General administrative and other 1-,374;000 854,995 '519;005 • Capital '5,00Q / 4,148 X852 Total expenditures 3,101,000"' /2,198,908 902,092 Net change in fund balance $ (425,000) \\456,454 $ 881,454 \\ Fund balance, beginning of year \ 3,521„722 �\ \ Fund balance, end of year ' $ '3,978,176 \ \• \ ~ \ • �\\\ `\ \‘;‘, • w . � \.. 25. MIAMI BEACH VISITOR AND CONVENTION AUTHORITY (A,Component Unit of the City of Miami Beach, Florida) NOTES TO REQUIRED SUPPLEMENTARY INFORMATION Year Ended September 30,2017 NOTE 1-BUDGETARY POLICY Section 41-68(e) of the City Code requires the Authority to annually submit to the City Commission the Authority's general fund administrative budget pertaining to expenditures related to resort tax revenue allocated to the Authority. The legal level of control at which expenditures may not exceed the budget is at the entity level. For practical reasons, however, the Authority has elected to control expenditures at the grants program level for each grant within the grant program. The Board of Directors of the Authority can approve line item overruns as long as the budget within the entity is not exceeded. Annual budgets are adopted on a basis consistent with generally accepted accounting principles,for the . general fund.The Authority may enter into commitments to the City for'sums to be included in budgets for capital improvements authorized by the City Commission, in accordance with.,the laws of Florida, Ch. 67- 930.Annually,on or before August 1st,the Authority prepares.and•submits to't 'City Commission a budget itemizing all estimated revenue and expenditures for the succeeding fiscal yearbegin ing October 1st. The Authority cannot expend funds or incur any liability that itis not authorized or provided for in its current budget, or in any amendment hereto.All expenditures made by the Authority within its budget are paid out by voucher and warrant as in the case of other municipal expenses. The.Authority operates within, and is bound by,the budget as approved by the City Commission ,> NOTE 2-MIAMI BEACH EMPLOYEES' RETIREMENT SYSTEM ACTUARY ASSUMPTIONS Assumptions 2017 N, Valuation Date - . '� October.•1, Measurement Date \ September 30,'20.16` Actuarial Cost Method Entry Age Normal ' - Inflation ' 3.00%� Salary Increases ; 4.5%to 7.0%depending on service, including inflation Investment Rate of Retum\ 7.70% Retirement Age - --�--- Experience-based table of rates that are specific to the -- _ type-of eligibility condition Mortality ', /� `RP,:2000 Combined Healthy Participant Mortality Table ti • for males and females with mortality improvements � projected after year 2000 to the year 2010 using Scale AA. 26. Crowe Horvath. Crowe Horwath LLP Independent Member Crowe Horwath International INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS F s� To the Board of Directors Miami Beach Visitor and Convention Authority \ Miami Beach, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits•c ntained�in Government Auditing Standards issued by the Comptroller General of the-United States, the financial statements of the governmental activities and the major fund of Miami Beach VtetfOranO Convention Authority(the"Authority"),a component unit of the City of Miami Beach, Florida,as'of and for the year ended September 30, 2017, and the related notes to the financial statements,which collective! corn n`se-t Authority's Auority's basic financial statements and have issued our report thereon dated Internal Control•Over Finan cial-Reporting `: 7 In planning and performing our audit of the financial statements, we considered the Authority's internal control over financial reporting (internal control)to determine the audit procedures that are appropriate in the circumstances for the purpose Of expressing our opinions on the financial statements, but not for the purpose of expressing an.opihipri on.theeffebtiv ne ess of the Authority'sinternal control. Accordingly, we do not express an opinion on the effectiveness of•the,Auuthority's internal control. ,--- A deficiencyy in internal control exists when the design or operation of a control does not allow management or employees,in the normal course of performing their assigned functions,to prevent,or detect and correct, misstatements on a timely basis,A material weakness is a deficiency, or:a combination of deficiencies, in internal•control, such that there is a reasonable possibility that a material misstatement of the Authority's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is-a deficiency; or a combination of deficiencies, in internal control that is less severe than a material weakness,yet important/enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not `designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However,material weaknesses may exist that have not been identified. (continued) 27. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Authority's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report \• � The purpose of this report is solely to describe the scope of our testing of,,internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering'the entity's internal control and compliance. Accordingly,this communication is not suitable fo'r\anVother purpose\ 1 , Crowe Horwath<LLP Miami, Florida \, • • 1 ✓�`` // C • • ,\ • 28. 1 • , + � I _ �. p , - • , 4 l'it. ill . ,-E—.Z . :.1 .. 1.q. '; . , CITY OF MIAMI BEACH,-FLORIDA "� is Si OE •..%• „ ' ';= ; y,. 11114•,_ CHILDREN,S TRUST CONTRACTS I i� ��' L,„� II , . %' . . iii,-- ' ill i w - 4 w..1 ii "rAR` FINANCIAL AND COMPLIANCE REPORTS . ,a ''',' "..r 4 A,`a 7 . ''''%.:,s ''; Year Ended September 30, 2017 , „saK►6''',84:: pa,;,, .'^=Y ,w 4 ra ; . . ' , ' ' l' ' i t.Al:'') '''''', '' 1 1. , I q L it; 1 x1 , A• .y .�-J. ,� � ` %s , _ fes ;�, fl'1 ' X •.4 I tfA 1.l. Z...i''' S ., a i r J 99 ' ,` `ro' 1�1 CITY OF MIAMI BEACH, FLORIDA CHILDREN'S TRUST CONTRACTS FINANCIAL AND COMPLIANCE REPORTS Year Ended September 30, 2017 CONTENTS INDEPENDENT AUDITOR'S REPORT ON THE SCHEDULE OF EXPENDITURES OF THE CHILDREN'S TRUST CONTRACTS 1 SCHEDULE OF EXPENDITURES AND NOTE TO THE SCHEDULE OFFEXPENDITURES OF THE CHILDREN'S TRUST CONTRACTS 3 INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER CHILDREN'S TRUST CONTRACTS FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF THE SCHEDULE OF EXPENDITURES FOR THE CHILDREN'S TRUST CONTRACTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 4 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR THE CHILDREN'S TRUST CONTRACTS AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE 6 SCHEDULE OF FINDINGS AND QUESTIONED COSTS 8 Crowe Horvath® Crowe Horwath LLP Independent Member Crowe Horwath International INDEPENDENT AUDITOR'S REPORT ON THE SCHEDULE OF EXPENDITURES OF THE CHILDREN'S TRUST CONTRACTS The Honorable Mayor and City Commissioners City of Miami Beach, Florida Report on the Schedule of Expenditures of the Children's Trust Contract We have audited the accompanying schedule of expenditures for the Children's Trust contracts (the "Schedule")of the City of Miami Beach, Florida(the"City")for the year ended September 30, 2017, and the related note. Management's Responsibility Management is responsible for the preparation and fair presentation of the Schedule in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the schedule that is free from material misstatement,whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on the Schedule based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing‘Standards, issued by the Comptroller General of the United States; and the Children's Trust contracts.Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Schedule is =free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Schedule. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the schedule, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the entity's preparation and fair presentation of the Schedule in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management,as well as evaluating the overall presentation of the Schedule. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. (Continued) 1. Opinion - In our opinion, the Schedule of Expenditures of the Children's Trust contracts referred to above presents fairly, in all material respects,the expenditures of the Children's Trust contracts of the City of Miami Beach, Florida for the year ended September 30, 2017, in accordance with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards,we have also issued our report dated January 8,2018 on our consideration of the City's internal control over Children's Trust contracts financial reporting and on our tests of its compliance with certain provisions of laws,regulations,contracts,and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over Children's Trust contracts financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over Children's Trust contracts financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over Children's Trust contracts financial reporting and compliance. ' Crowe Horwath LLP Miami, Florida January 8,2018 2. CITY OF MIAMI BEACH, FLORIDA THE CHILDREN'S TRUST CONTRACTS SCHEDULE OF EXPENDITURES AND NOTE TO THE SCHEDULE OF EXPENDITURES OF THE CHILDREN'S TRUST CONTRACTS Year Ended September 30, 2017 Contract Contract Total Contract Fiscal Year Contract Name Contract Term Number Amount Expenditures Expenditures (1) (2) (3) Success University Program August 2016-July 2017 1721-1090 $ 425,000 $ 247,709 $ 230,801 Success University Program August 2017-July 2018 1821-1090 425,000 28,474 28,474 Out of School Program August 2016-July 2017 1714-1090 333,258 326,543 285,559 Out of School Program August 2017-July 2018 1814-1090 333,258 27,063 27,063 Youth Development Program August 2016-July 2017 1716-1090 312,550 281,755 257,581 Youth Development Program August 2017-July 2018 1816-1090 312,550 37,924 37,924 Early Childhood Development Program August 2016-July 2017 1710-1090 249,957 211,422 195,785 Early Childhood Development Program August 2017-July 2018 1710-1090 249,957 34,990 34,990 Totals • $ 2,641,530 $ 1.195.881 $ 1,098,177 (1) These amounts represent the total contract amount for the period of the contract. (2) These amounts represent the actual expenditures from the start of the contract through September 30,2017. (3) These amounts represent the actual expenditures incurred from October 1,2016 through September 30,2017. NOTE TO SCHEDULE - The Schedule of Expenditures of the Children's Trust contracts (the "Schedule") presents the expenditures/activities of the Children's Trust contracts of the City of Miami Beach, Florida (the"City")for the year ended September 30, 2017. The information in this schedule is presented in accordance with the requirements of the Children's Trust contracts. The schedule presents only a selected portion of the operations of the City of Miami Beach, Florida,and is not intended to and does not present fairly the financial position as of September 30, 2017, the changes in its financial position or where applicable, its cash flows of the City of Miami Beach, Florida (the "City") for the year then ended in conformity with accounting principles generally accepted in the United States of America.The Schedule was prepared on the modified accrual basis of accounting. 3. Crowe Horvath® Crowe Horwath LLP Independent Member Crowe Horwath International INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER CHILDREN'S TRUST CONTRACTS FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF THE SCHEDULE OF EXPENDITURES FOR THE CHILDREN'S TRUST CONTRACTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Honorable Mayor and pity Commissioners City of Miami Beach, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller,General of the United States, the schedule of expenditures for the Children's Trust Contracts (the "Schedule") of the City of Miami Beach, Florida (the "City") for the year ended September 30, 2017, and the related note, and have issued our report thereon dated January 8, 2018. Internal Control Over Children's Trust Contracts Financial Reporting In planning and performing our audit of the Schedule, we considered the City's internal control over the Children's Trust Contracts financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the Schedule, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control.Accordingly, we do not express an opinion on the effectiveness of the City's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City's Schedule will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency or a combination of deficiencies in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. (Continued) 4. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's Schedule is free of material misstatement,we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of Schedule amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly,we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control over Children's Trust Contracts financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance.This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control and compliance.Accordingly,this communication is not suitable for any other purpose. Crowe Horwath LLP Miami, Florida January 8,2018 • 5. A Crowe Horwath, Crowe Horwath LLP Independent Member Crowe Horwath International INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR THE CHILDREN'S TRUST CONTRACTS AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE The Honorable Mayor and City Commissioners City of Miami Beach, Florida Report on Compliance for the Children's Trust Contracts We have audited the City of Miami Beach, Florida's (the "City") compliance with the compliance requirements described in the Children's Trust Contracts applicable to the City's Children's Trust Contracts for the year ended September 30, 2017. Management's Responsibility Compliance with the requirements referred to above is the responsibility of the City's management. Auditor's Responsibility Our responsibility is to express an opinion on the City's compliance based on our audit of the requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the Children's Trust contracts. Those standards and Children's Trust contracts require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the compliance requirements that are applicable to its Children's Trust contracts occurred.An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance. However, our audit does not provide a legal determination of the City's compliance with those requirements. Opinion In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that are applicable to its Children's Trust contracts for the year ended September 30, 2017. (Continued) 6. Report on Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the compliance requirements referred to above. In planning and performing our audit,we considered the City's internal control over compliance to determine the auditing procedures for the purpose of expressing an opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance. A deficiency in internal.control over compliance exists when'the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement will not be prevented, or detected and,corrected, on a timely basis.A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies,in internal control over compliance that is less severe than a material weakness in internal control over compliance,yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies.We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Children's Trust contracts.Accordingly,this report is not suitable for any other purpose. � e ,</nw• Crowe Horwath LLP Miami, Florida January 8, 2018 7. CITY OF MIAMI BEACH, FLORIDA THE CHILDREN'S TRUST CONTRACTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS • Year Ended September 30, 2017 Section I -Summary of Auditor's Results Schedule of Expenditures Type of auditor's report issued: Unmodified Internal control over financial reporting: Material weakness (es) identified? Yes X No Significant deficiency(ies) identified? Yes X None Reported Noncompliance material to the Schedule of Expenditures noted? Yes X No Children's Trust Contracts Internal Control over programs: Material weakness (es) identified? Yes X No Significant deficiency(ies) identified? Yes X None Reported Type of auditor's report issued on compliance for program-specific program: - Unmodified Any audit findings disclosed that are required to be reported in accordance with the contracts? Yes X No Section II -Summary Schedule of Prior Audit Findings and Corrective Action Plan No findings were reported for the year ended September 30, 2016. • 8. ATTACHMENT G • m 1 Ami B EAc H BBC REPORT FY17 2019-092-JC AUDITING SERVICES PROCUREMENT DEPARTMENT 1755 Meridian Avenue, 3rd Floor Miami Beach, Florida 33139 • ' _., . ---' 4. .. ., . , ,.. ,.. ' ,.. II . 1 I/ .‘14111111 1.. ' .° 111111 i II' ' ./. .4111 I 1111 • • 1 I 4. • ; .','''' tit * it' ,/,...;:•: : ,. •F' 41P . , . './....o. . . .fli *, , 1 gii iiMh wlikit . 411_• CITY OF MIAMI BEACH, FLORIDA • ---,--..., • IT, ..x•• *1.: II@ -a • - ..4..... f-t.,,,INIA-v, ti:ITI-. '- , • _ - -,,,.........,„.... .,1,,,fie: ,tip. 7, A mr,rr,..t.i;i. -, . •, '.,45,0 :,'To.• . ' • _ , , Y ......" ' ' 1 .. FINANCIAL AND COMPLIANCE REPORT ""*.kt",,,,,;`,4tfuttp,•.; FOR THE BUILDING BETTER COMMUNITIES snitio BOND PROJECTS IN ACCORDANCE WITH MIAMI-DADE COUNTY, FLORIDA ORDINANCE 05-47 'k, ..1 'j-4-11441011, - 1 •,ko, • :--!` —11* . d . i ...,_ ., 7,- • • : , , '.. Year Ended September 30,2017 i•A ' 4 it , ,•411:41 ••; „. ,r'''' •it ' I '' - ''1 ''t '` IP. IA • i , . I 1. ,i'l t 11 CIrtii 7 r 1611 •'' * '' ..* '0 . ', , . it , .,. ,4444• ' ,4 * . , $ 4. • . . I , .- , I . . euli3 OP i ..x , . 1 1 / t ft 1 ,.• .' -', '' fr -ri.i ; . 'IL::: . r; :: 4: • ., . .. CITY OF MIAMI BEACH, FLORIDA FINANCIAL AND COMPLIANCE REPORT September 30, 2017 CONTENTS INDEPENDENT AUDITOR'S REPORT ON THE SCHEDULE OF EXPENDITURES FOR THE BUILDING BETTER COMMUNITIES BOND PROJECTS IN ACCORDANCE WITH THE MIAMI-DADE COUNTY, FLORIDA ORDINANCE 05-47,APPLICABLE RESOLUTIONS AND BUILDING BETTER COMMUNITIES ADMINISTRATIVE RULES 1 SCHEDULE OF EXPENDITURES AND NOTES TO THE SCHEDULE OF EXPENDITURES OF BUILDING BETTER COMMUNITIES BOND PROJECTS 3 INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER BUILDING BETTER COMMUNITIES BOND PROJECTS FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDITOF THE SCHEDULE OF EXPENDITURES FOR THE BUILDING BETTER COMMUNITIES BOND PROJECTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 4 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR THE BUILDING BETTER COMMUNITIES BOND PROJECTS AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE 6 SCHEDULE OF FINDINGS AND QUESTIONED COSTS 8 A Crowe Horwath, Crowe Horwath LLP Independent Member Crowe Horwath International INDEPENDENT AUDITOR'S REPORT ON THE SCHEDULE OF EXPENDITURES FOR THE BUILDING BETTER COMMUNITIES BOND PROJECTS IN ACCORDANCE WITH THE MIAMI-DADE COUNTY, FLORIDA ORDINANCE 05-47,APPLICABLE RESOLUTIONS AND BUILDING BETTER COMMUNITIES ADMINISTRATIVE RULES The Honorable Mayor and City Commissioners City of Miami Beach, Florida Report on the Schedule of Expenditures of the Building Better Communities Bond Projects We have audited the accompanying schedule of expenditures for the Building Better Communities Bond Projects (the"Schedule")of the City of Miami Beach (the"City"), Florida for the year ended September 30, 201-7, and the related notes. Management's Responsibility Management is responsible for the preparation and fair presentation of the Schedule in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation,and maintenance of internal control relevant to the preparation and fair presentation of the Schedule that is free from material misstatement,whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on the Schedule based on our audit.We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Ordinance 05-47, Applicable Resolutions and Building Better Communities Administrative Rules. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Schedule is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Schedule. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Schedule, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the entity's preparation and fair presentation of the Schedule in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion.An audit also includes evaluating the appropriateness of accounting policies used and the-reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Schedule. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. (Continued) 1. Opinion In our opinion,the Schedule of Expenditures of the Building Better Communities Bond Projects referred to above presents fairly, in all material respects, the expenditures of the Building Better Communities Bond Projects of the City of Miami Beach, Florida for the year ended September 30,2017, under the Miami-Dade County, Florida Ordinance 05-47,Applicable Resolutions and Building Better Communities Administrative Rules, in accordance with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards,we have also issued our report dated January 8,2018 on our consideration of the City's internal control over Building Better Communities Bond Projects Financial reporting and on our tests of its compliance with certain provisions of laws,regulations,contracts,and grant agreements and other matters.The purpose of that report is to describe the scope of our testing of internal control over Building Better Communities Bond Projects Financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over Building Better Communities Bond Projects Financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over Building Better Communities Bond Projects Financial reporting and compliance. -g.. e / /.0w44. C� 1 Crowe Horwath LLP Miami, Florida January 8, 2018 2. CITY OF MIAMI BEACH, FLORIDA SCHEDULE OF EXPENDITURES AND NOTES TO THE SCHEDULE OF EXPENDITURES OF THE BUILDING BETTER COMMUNITIES BOND PROECTS Year Ended September 30, 2017 - Expenditures Band Shell Park Project No. 86-70611 Construction $ - Planning, Design and Administration - Total - Renovation of Flamingo Park Project No. 84-70609 Construction 501,789 Planning, Design and Administration 240,008 Total 741,797 , Expand and Enhance the Miami Beach Convention Center Project No. 233-76974 Construction - Planning, Design and Administration - Total - Total — $ 741.797 • NOTES TO SCHEDULE Note 1: The Building Better Communities Bond Projects was created on November 2,2004 by Miami-Dade County, Florida, Ordinance 05-47 for the purpose of providing municipal governments with funding to develop, improve, rehabilitate and restore or acquire real property. Note 2: The Schedule of Expenditures of the Building Better Communities Bond Projects (the"Schedule") presents the expenditures/activities that were allowed for pursuant to the Building Better Communities Bond Program of the City of Miami Beach, Florida (the "City") for the year ended September 30, 2017. The information in this schedule is presented in accordance with the Miami-Dade County, Florida, Ordinance 05-47, applicable resolutions and Building Better Communities Administrative Rules. The Schedule presents only a selected portion of the operations of the City for the year then ended in conformity with accounting principles generally accepted in the United States of America. The Schedule was prepared on the modified accrual basis of accounting. 3. A Crowe Horwath. Crowe Horwath LLP Independent Member Crowe Horwath International INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER BUILDING BETTER COMMUNITIES BOND PROJECTS FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN,AUDIT OF THE SCHEDULE OF EXPENDITURES FOR THE BUILDING BETTER COMMUNITIES BOND PROJECTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Honorable Mayor and City Commissioners City of Miami Beach,Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States,the schedule of expenditures for the Building Better Communities Bond Projects (the "Schedule") of the City of Miami Beach (the "City"), Florida for the year ended September 30, 2017, and the related notes, and have issued our report thereon dated January 8, 2018 Internal Control Over Building Better Communities Bond Projects Financial Reporting In planning and performing our audit of the Schedule,we considered the City's internal control over Building Better Communities Bond Projects Financial reporting (internal control)to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the Schedule, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control.Accordingly, we do not express an opinion on the effectiveness of the City's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees,in the normal course of performing their assigned functions,to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control-such that there is a reasonable possibility that a material misstatement of the.City's Schedule will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency or a combination of deficiencies in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses.However,material weaknesses may exist that have not been identified. (Continued) 4. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's Schedule is free of material misstatement,we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of Schedule amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control over Building Better Communities Bond Projects Financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance.This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. 10114.141( Crowe Horwath LLP Miami, Florida January 8, 2018 5. Crowe Horwath. Crowe Horwath LLP Independent Member Crowe Horwath International INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR THE BUILDING BETTER COMMUNITIES • BOND PROJECTS AND REPORT ON INTERNAL CONTROL.OVER COMPLIANCE The Honorable Mayor and City Commissioners City of Miami Beach, Florida Report on Compliance for the Building Better Communities Bond Projects We have audited the City of 'Miami Beach, Florida's (the "City") compliance with the compliance requirements described in the Miami-Dade County, Florida Ordinance 05-47, Applicable Resolutions and Building Better Communities Administrative Rules applicable to the City's Building Better Communities Bond Projects for the year ended September 30,2017. Management's Responsibility Compliance with the requirements referred to above is the responsibility of the City's management. Auditor's Responsibility Our responsibility is to express an opinion on the City's compliance based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Miami-Dade County, Florida Ordinance-05-47, Applicable Resolutions and Building Better Communities Administrative Rules. Those standards and Ordinance 05-47 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a material effect on the Building Better Communities Bond Projects occurred.An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance. However,our audit does not provide a legal determination of the City's compliance with those requirements. Opinion 1 In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that are applicable to its Building Better Communities Bond Projects for the year ended September 30,2017. • (Continued) 6. Report on Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the compliance requirements referred to above. In planning and performing our audit, we considered the City's internal control over compliance to determine the auditing procedures for the purpose of expressing an opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal controls over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance. A deficiency in internal control over compliance exists when the design or.operation of a control does not allow management or employees, in the normal course of performing their assigned functions,to prevent, or detect and correct, noncompliance on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement will not be prevented, or detected and corrected, on a_timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance that is less severe than a material weakness in internal control over compliance,yet important enough to merit attention by those charged with governance.. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies.We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of Miami-Dade County, Florida Ordinance 05-47,Applicable Resolutions.and Building Better Communities Administrative Rules. Accordingly, this report isnot suitable for any other purpose. ,</nwat, a.74 Crowe Horwath LLP Miami, Florida January 8, 2018 • 7. CITY OF MIAMI BEACH, FLORIDA BUILDING BETTER COMMUNITIES BOND PROJECTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended September 30, 2017 Section I -Summary of Auditor's Results Schedule of Expenditures Type of auditor's report issued: Unmodified Internal control over financial reporting: Material weakness (es) identified? Yes X' No Significant deficiencies identified not considered to be material weaknesses? Yes X None Reported Noncompliance material to the Schedule of Expenditures noted? Yes X No Building Better Communities Bond Projects Internal control over programs: Material weakness (es) identified? Yes •X No • Significant deficiencies identified not considered to be material weaknesses? Yes X None Reported Type of auditor's report issued on compliance for program-specific program: Unmodified Any audit findings disclosed that are required to be reported in accordance with Ordinance 05-47? Yes X No Section II -Summary Schedule of Prior Audit Findings and Corrective Action Plan No findings reported. Section III—Schedule of Current Year Findings No findings reported. 8. r \ ATTACHMENT H MIAMIBEACH SAFE NEIGHBORHOODS - PARKS BOND PROJECTS REPORT 2019-092-JC AUDITING SERVICES PROCUREMENT DEPARTMENT 1755 Meridian Avenue, 3rd Floor Miami Beach, Florida 33139 • McGladrey& Pullen Certified Public Accountants City of Miami Beach, Florida Financial and Compliance Reports for the Safe Neighborhood Parks Bond Projects in Accordance with Miami-Dade County, Florida Ordinance 96-115 September 30, 2008 • • McGladrey&Pullen,LLP is a member firm of RSM International, an affiliation of separate and independent legal entities. Contents Independent Auditor's Report on the Financial Statement of the Safe Neighborhood Parks Bond Projects in Accordance with the Program-Specific Audit Option under Miami-Dade County, Florida Ordinance 96-115, Applicable Resolutions and Safe Neighborhood Parks Administrative Rules 1 Schedule of Expenditures and Note to the Schedule of Expenditures of Safe Neighborhood Parks Bond Projects 2 Independent Auditor's Report on Compliance With Requirements Applicable to the Safe Neighborhood Parks Bond Projects and on Internal Control over Compliance in Accordance with the Program-Specific Audit Option under the Miami-Dade County, Florida Ordinance 96-115,Applicable Resolutions and Safe Neighborhood Parks Administrative Rules 3—4 Schedule of Findings and Questioned Costs 5 McGladrey&Pullen Certified Public Accountants Independent Auditor's Report on the Financial Statement of the Safe Neighborhood Parks Bond Projects in Accordance with the Program-Specific Audit Option under Miami-Dade County,Florida Ordinance 96-115, Applicable Resolutions and Safe Neighborhood Parks Administrative Rules • The Honorable Mayor and City Commissioners City of Miami Beach, Florida We have audited the accompanying Schedule of Expenditures of the Safe Neighborhood Parks Bond Projects (the "Program") of the City of Miami Beach, Florida for the year ended September 30, 2008. This financial statement is the responsibility of the City of Miami Beach, Florida's management. Our responsibility is to express an opinion on the financial statement of the Program based on our audit. • • We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Miami-Dade County, Florida Ordinance 96-115, Applicable Resolutions and Safe Neighborhood Parks Administrative Rules. Those standards and Miami-Dade County, Florida Ordinance 96-115, Applicable Resolutions and Safe Neighborhood Parks Administrative Rules,-require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Schedule of Expenditures of the Safe Neighborhood Parks Bond Projects referred to above presents fairly, in all material respects,the expenditures of the Safe Neighborhood Parks Bond Projects of the City of Miami Beach, Florida for the year ended September 30, 2008 under the Miami-Dade County, Florida Ordinance 96- 115, Applicable Resolutions and Safe Neighborhood Parks Administrative Rules, in conformity with accounting principles generally accepted in the United States of America. 46,4147 77/4. c/ LGA Miami-Dade County, Florida March 30, 2009 McGladrey&Pullen,LLP is a member firm of RSM International, an affiliation of separate and independent legal entities. 1 City of Miami Beach, Florida Schedule of Expenditures and Note to the Schedule of Expenditures of Safe Neighborhood Parks Bond Projects Year Ended September 30,2008 Project Expenditures Planning, design and administration $ 44,903 Total expenditures $ ' 44,903 Note to Schedule The Schedule of Expenditures of the Safe Neighborhood Parks Bond Projects (the "Schedule") presents the expenditures/activity of the Safe Neighborhood Parks Bond Program of the City of Miami Beach, Florida for the year ended September 30, 2008. The Schedule was prepared on the modified accrual basis of accounting. 2 McGladrey& Pullen Certified Public Accountants Independent Auditor's Report on Compliance with Requirements Applicable to the Safe Neighborhood Parks Bond Projects and on Internal Control over Compliance in Accordance with the Program-Specific Audit Option under the Miami-Dade County, Florida Ordinance 96-115,Applicable Resolutions and Safe Neighborhood Parks Administrative Rules The Honorable Mayor and City Commissioners City of Miami Beach, Florida Compliance We have audited the compliance of the City of Miami Beach, Florida (the "City") with the types of compliance requirements described in the Miami-Dade County, Florida Ordinance 96-115, Applicable Resolutions and Safe Neighborhood Parks Administrative Rules that are applicable to the Safe Neighborhood Parks Bond Projects for the year ended September 30, 2008. Compliance with the requirements of laws, regulations, contracts, and grants applicable to this project is the responsibility of the City's management. Our responsibility is to express an opinion on • the City's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and Miami-Dade County, Florida Ordinance 96-115 Applicable Resolutions and Safe Neighborhood Parks Administration Rules (Ordinance 96-115). Those standards and Ordinance 96-115 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on the Safe Neighborhood Parks Bond Projects occurred. An audit includes examining,on a test basis,evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the City's compliance with those requirements. In our opinion, the City complied, in all material respects, with the requirements referred to above that are applicable to its Safe Neighborhood Parks Bond Projects for the year ended September 30, 2008. McGladrey&Pullen,LLP is a member firm of RSM International, an affiliation of separate and independent legal entities. 3 Internal Control Over Compliance The management of the City is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to the Safe Neighborhood Parks Bond Projects. In planning and performing our audit, we considered the City's internal control over compliance with the requirements that could have a direct and material effect on its Safe Neighborhood Parks Bond Projects in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly,we do not express an opinion on the effectiveness of the City's internal control over compliance. A control deficiency in an entity's internal control over compliance exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a Safe Neighborhood Parks Bond project on a timely basis. A significant deficiency is a control deficiency,or combination of control deficiencies,that adversely affects the entity's ability to administer the Safe Neighborhood Parks Bond Projects such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of the Safe Neighborhood Parks Bond Projects that is more than inconsequential will not be prevented or detected by the entity's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of the Safe Neighborhood Parks Bond Projects will not be prevented or detected by the entity's internal control. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of the Honorable Major, City Commissioners, management of the City and management of Miami-Dade County, Florida, and is not intended to be and should not be used by anyone other than these specified parties. ` /�ke , Miami-Dade County, Florida March 30, 2009 4 City of Miami Beach,Florida ti Schedule of Findings and Questioned Costs Section I-Summary of Auditor's Results Basic Financial Statements Type of auditor's report issued: Unqualified Internal control over financial reporting: Material weakness(es)identified? Yes X No Significant deficiency(ies)identified that are not considered to be material weakness(es)? Yes X None reported Noncompliance material to the basic financial statements noted? Yes X No Safe Neighborhood Parks Bond Projects Internal control over program: Material weakness(es)identified? Yes X No Significant deficiency(ies)identified that are not considered to be material weakness(es)? Yes X No Type of auditor's report issued on compliance for program-specific program: Unqualified Any audit findings disclosed that are required to be reported in accordance with Ordinance 96-115? Yes X No 5 MIAMIBEACH City of Miami Beach, 1755 Meridian Avenue, 3rd Floor, Miami Beach, Florida 33139, www.miamibeachfl.gov PROCUREMENT DEPARTMENT Tel: 305-673-7490. ADDENDUM NO. 1 RFP 2019-092-JC AUDITING SERVICES March 19, 2019 This Addendum to the above-referenced RFP Is issued in response to questions from prospective proposers, or other clarifications and revisions issued by the City. The. RFP is amended in the following particulars only (deletions are shown by strikethrough and additions are underlined). I. MODIFICATIONS. RFP DUE DATE AND TIME. The deadline for the receipt of proposals is extended until 3:00 PM, on Thursday, April 4 2019, at the fallowing location: City of Miami Beach, Procurement Department, 1755 Meridian Ave, 3r Floor, Miami Beach, FL 33139.. Additional questions received will be answered in a forthcoming addendum. Any questions regarding this Addendum should be submitted in writing to the Procurement Department to the attention of the individual named below, with a copy, to the City Clerk's . Office at RafaelGranadoamiamlbeachfl:gov. Procurement Contact: Telephone: Email: Jason.Crouch 305-673-7000, ext. 6694 JasonCrouch@miamibeachfl.gov Proposers are reminded to acknowledge receipt of this addendum as part of your RFP submission. S' 9,7;7, exs rocurement Director I • I ADDENDUM N .1 RFP 2019-092-JC REQUEST FOR PROPOSALS (RFP Auditing Services RFP 2019-092-JC RFP ISSUANCE DATE: FEBRUARY 14, 2019 PROPOSALS DUE: MARCH 28, 2019 AT 3:00 PM ISSUED BY: MIAMIBEACH Jason Crouch, Procurement Contracting Officer • PROCUREMENT DEPARTMENT 1755 Meridian Avenue, 3rd Floor, Miami Beach, FL 33139 305.673.7000 x 6694 I JasonCrouch@miamibeachfl.gov I www.miamibeachfl.gov MIAMI BEACH, TABLE OF CONTENTS _ SOLICITATION SECTIONS: PAGE 0100 NOT UTILIZED N/A 0200 INSTRUCTIONS TO PROPOSERS &GENERAL CONDITIONS 3 0300 PROPOSAL SUBMITTAL INSTRUCTIONS& FORMAT 12 0400 PROPOSAL EVALUATION 15 APPENDICES: PAGE ' APPENDIX A PROPOSAL CERTIFICATION, QUESTIONNAIRE AND AFFIDAVITS 19 • APPENDIX B "NO PROPOSAL" FORM 26 APPENDIX C SPECIFICATIONS 28 APPENDIX D SPECIAL CONDITIONS 32 APPENDIX E COST PROPOSAL FORM 34 APPENDIX F INSURANCE REQUIREMENTS 37 RFP 2019-092-JC 2 MIAMI BEACH SECTION 0200 , INSTRUCTIONS TO RESPONDENTS&GENERAL CONDITIONS 1. GENERAL. This Request for Proposals (RFP) is issued by the City of Miami Beach, Florida (the "City"), as the means for prospective Proposers to submit their qualifications, proposed scopes of work and cost proposals (the "proposal") to the City for the City's consideration as an option in achieving the required scope of services and requirements as noted herein. All documents released in connection with this solicitation, including all appendixes and addenda, whether included herein or released under separate cover, comprise the solicitation, and are complementary to one another and together establish the complete terms, conditions and obligations of the Proposers and, subsequently,the successful Proposer(s) (the"contractor[s]") if this RFP results in an award. The City utilizes PublicPurchase (www.publicpurchase.com) for automatic notification of competitive solicitation opportunities and document fulfillment, including the issuance of any addendum to this RFP. Any prospective Proposer who has received this RFP by any means other than through PublicPurchase must register immediately with PublicPurchase to assure it receives any addendum issued to this RFP. Failure to receive an addendum may result in disqualification of proposal submitted. 2. PURPOSE. The City of Miami Beach (the City) is required to have an annual audit performed on the City's Comprehensive Annual Financial Report (CAFR) in accordance with Florida.Statutes 218.39. Other audits are required to be conducted in accordance with the U.S. Office of Management and Budget (OMB) Circulars, Bonded Debt Covenants, Performance Management and/or Grant Agreements. Each audit must be conducted by an independent audit firm. Pursuant to the above requirements, this RFP is issued to seek proposals from qualified auditing firms with whom the City may contract to examine the City's Basic Financial Statements included in the City's Comprehensive Annual Financial Report(CAFR), Federal grant programs and State projects (OMB Uniform Guidance/ A-133 Single Audit) and the financial statements of the:Miami Beach Redevelopment Agency's (RDA), the Parking,Systems Fund's (PSF), the Miami Beach Visitor and Convention Authority's (VCA),the Miami Beach Convention Center(MBCC), as managed by Global Spectrum (GS), the Safe Neighborhood Parks and Bond Program (SNP), Children Trust (CT) and Building Better Communities(BBC). Further details of the required work are included in Appendix C. 3.ANTICIPATED RFP TIMETABLE.The tentative schedule for this solicitation is as follows: RFP Issued February 14,2019 Pre-Proposal Meeting February 25,2019 at 10 AM Deadline for Receipt of Questions March 18,2019 at 5PM Responses Due March 28,2019 at 3PM Evaluation Committee Review TBD Tentative Commission Approval Authorizing May 2019 Negotiations Contract Negotiations Following Commission Approval 3 RFP 2019-092-JC MIAMI BEACH, 4. PROCUREMENT CONTACT.Any questions or clarifications concerning this solicitation shall be submitted to the Procurement Contact noted below: Procurement Contact Telephone: Email: Jason Crouch 305-673-7000 x6694 'asoncrouch • miamibeachfl..ov 'dditionally, the City Clerk is to be copied on all communications via e-mail at: RafaelGranado(a,miamibeachfl.gov; or via facsimile: 786-394-4188. The Bid title/number shall be referenced on all correspondence. All questions or requests for clarification must be received no later than ten (10) calendar days prior to the date proposals are due as scheduled in Section 0200-3. All responses to questions/clarifications will be sent to all prospective Proposers in the form of an addendum. 5. PRE-PROPOSAL MEETING OR SITE VISIT(S).Only if deemed necessary by the City, a pre-proposal meeting or site visit(s) may be scheduled. A Pre-PROPOSAL conference will be held as scheduled in Anticipated RFP Timetable section above at the following address: - City of Miami Beach Procurement Department Conference Room 1755 Meridian Avenue,3rd Floor Miami Beach, Florida 33139 Attendance (in person or via telephone) is encouraged and recommended as a source of information, but is not mandatory. Proposers interested in participating in the Pre-Proposal Submission Meeting via telephone must follow these steps: (1)Dial the TELEPHONE NUMBER: 1-888-270-9936(Toll-free North America) (2) Enter the MEETING NUMBER: 9415468 Proposers who are interested in participating via telephone should send an e-mail to the contact person listed in this RFP expressing their intent to participate via telephone. 6. PRE-PROPOSAL INTERPRETATIONS.- Oral information or responses to questions received by prospective Proposers are not binding on the City and will be without legal effect, including any information received at pre- submittal meeting or site visit(s). The City by means of Addenda will issue interpretations or written addenda clarifications considered necessary by the City in response to questions. Only questions answered by written addenda will be binding and may supersede terms noted in this solicitation. Addendum will be released through PublicPurchase. Any prospective proposer who has received this RFP by any means other than through PublicPurchace must register immediately with PublicPurchase to assure it receives any addendum issued to this RFP. Failure to receive an addendum may result in disqualification of proposal.Written questions should be received no later than the date outlined in the Anticipated RFP Timetable section. 7. CONE OF SILENCE. This RFP is subject to, and all proposers are expected to be or become familiar with, the City's Cone of Silence Requirements, as codified in Section 2-486 of the City Code. Proposers shall be solely , responsible for ensuring that all applicable provisions of the City's Cone of Silence are complied with, and shall be subject to any and all sanctions, as prescribed therein, including rendering their response voidable, in the event of such non-compliance. Communications regarding this solicitation are to be submitted in writing to the Procurement Contact named herein with a copy to the City Clerk at rafaelgranado(a miamibeachfl.gov 4 RFP 2019-092-JC MIAMIBEACH 8. SPECIAL NOTICES. You are hereby advised that this solicitation is subject to the following ordinances/resolutions, which may be found on the City Of Miami Beach website: http://web.miamibeachfl.qov/procurement/scroll.aspx?id=79113 • CONE OF SILENCE CITY CODE SECTION 2-486 • PROTEST PROCEDURES CITY CODE SECTION 2-371 • DEBARMENT PROCEEDINGS CITY CODE SECTIONS 2-397 THROUGH 2-485.3 • LOBBYIST REGISTRATION AND DISCLOSURE OF FEES CITY CODE SECTIONS 2-481 THROUGH 2-406 • CAMPAIGN CONTRIBUTIONS BY VENDORS CITY CODE SECTION 2-487 • CAMPAIGN CONTRIBUTIONS BY LOBBYISTS ON PROCUREMENT ISSUES CITY CODE SECTION 2-488 • REQUIREMENT FOR CITY CONTRACTORS TO PROVIDE EQUAL BENEFITS FOR CITY CODE SECTION 2-373 DOMESTIC PARTNERS • LIVING WAGE REQUIREMENT - • ell •` ! - `--- • PREFERENCE FOR FLORIDA SMALL BUSINESSES OWNED AND CONTROLLED BY CITY CODE SECTION 2-374 VETERANS AND TO STATE-CERTIFIED SERVICE-DISABLED VETERAN BUSINESS ENTERPRISES - • FALSE CLAIMS ORDINANCE CITY CODE SECTION 70-300 • ACCEPTANCE OF GIFTS,FAVORS&SERVICES CITY CODE SECTION 2-449 9. PUBLIC ENTITY CRIME. A person or affiliate who has been placed on the convicted vendor list following a conviction for public entity crimes may not submit a bid on a contract to provide any goods or services to a public entity, may not submit a bid on a contract with a public entity for the construction or repair of a public building or public work, may not submit bids on leases of real property to public entity, may not be awarded or perform work as a contractor, supplier, sub-contractor, or consultant under a contract with a public entity, and may not transact business with any public entity in excess of the threshold amount provided in Sec. 287.017, for CATEGORY TWO for a period of 36 months from the date of being placed on the convicted vendor list. • 10. COMPLIANCE WITH THE CITY'S LOBBYIST LAWS.This RFP is subject to, and all Proposers are expected to be or become familiar with, all City lobbyist laws. Proposers shall be solely responsible for ensuring that all City lobbyist laws are complied with, and shall be subject to any and all sanctions, as prescribed therein, including, without limitation, disqualification of their responses, in the event of such non-compliance. 11. DEBARMENT ORDINANCE: This RFP is subject to, and all proposers are expected to be or become familiar with,the City's Debarment Ordinance as codified in Sections 2-397 through 2-406 of the City Code. 12. WITH THE CITY'S CAMPAIGN FINANCE REFORM LAWS. This RFP is subject to, and all Proposers are expected to be or become familiar with, 'the City's Campaign Finance Reform laws, as codified in Sections 2-487 through 2-490 of the City Code. Proposers shall be solely responsible for ensuring that all applicable provisions of the City's Campaign Finance Reform laws are complied with, and shall besubject to any and all sanctions, as prescribed therein, including disqualification of their responses, in the event of such non-compliance. 13. CODE OF BUSINESS ETHICS. Pursuant to City Resolution No.2000-23879, the Proposer shall adopt a Code of Business Ethics ("Code")and submit that Code to the Procurement Division with its response or within five (5) days upon receipt of request. The Code shall, at a minimum, require the Proposer, to comply with all applicable governmental rules and regulations including, among others, the conflict of interest, lobbying and ethics provision of the City of Miami Beach and Miami Dade County. 14.AMERICAN WITH DISABILITIES ACT(ADA). Call 305-673-7490 to request material in accessible format; sign language interpreters(five(5)days in advance when possible),or information on access for persons with disabilities. For more information on ADA compliance, please call the Public Works Department, at 305-673- 7000, Extension 2984. 5 RFP 2019-092-JC MIAMI BEACH 15. POSTPONEMENT OF DUE DATE FOR RECEIPT OF PROPOSALS. The City reserves the right to postpone the deadline for submittal of proposals and will make a reasonable effort to give at least three (3) calendar days written notice of any such postponement to all prospective Proposers through PublicPurchase. 16. PROTESTS. Proposers that are not selected may protest any recommendation for selection of award in accordance with eh proceedings established pursuant to the City's bid protest procedures, as codified in Sections 2- 370 and 2-371 of the City Code (the City's Bid Protest Ordinance). Protest not timely made pursuant to the requirements of the City's Bid Protest Ordinance shall be barred. 17. JOINT VENTURES. Joint Ventures are not allowed. Proposals shall be submitted only by the prime contractor. Proposals may, however,identify other sub-contractors or sub-consultants to the prime Proposer who may serve as team members. 18.VETERAN BUSINESS ENTERPRISES PREFERENCE. Pursuant to City Code Section 2-374, the City shall give a preference to a responsive and responsible Proposer which is a small business concern owned and controlled by a veteran(s) or which is a service-disabled veteran business enterprise, and which is within five percent (5%) of the lowest responsive, responsible proposer, by providing such proposer an opportunity of providing said goods or contractual services for the lowest responsive proposal amount (or in this RFP, the highest proposal amount). Whenever, as a result of the foregoing preference, the adjusted prices of two (2) or more proposers which are a small business concern owned and controlled by a veteran(s) or a service-disabled veteran business enterprise constitute the lowest proposal pursuant to an RFP or oral or written request for quotation, and such proposals are responsive, responsible and otherwise equal with respect to quality and service, then the award shall be made to the service-disabled veteran business enterprise. 19. DETERMINATION OF AWARD. The final ranking results of Step 1 & 2 outlined in Section 0400, Evaluation of Proposals, will be considered by the City Manager who may recommend to the City Commission the Proposer(s) s/he deems to be in the best interest of the City or may recommend rejection of all proposals. The City Manager's recommendation need not be consistent with the scoring results identified herein and takes into consideration Miami Beach City Code Section 2-369, including the following considerations: (1)The ability, capacity and skill of the Proposer to perform the contract. (2)Whether the Proposer can perform the contract within the time specified,without delay or interference. (3)The character, integrity, reputation,judgment, experience and efficiency of the Proposer. (4)The quality of performance of previous contracts. , (5)The previous and existing compliance by the Proposer with laws and ordinances relating to the contract. The City Commission shall consider the City Manager's recommendation and may approve such recommendation. The City Commission may also, at its option, reject the City Manager's recommendation and select another Proposal or Proposals which it deems to be in the best interest of the City,or it may also reject all Proposals. 20. NEGOTIATIONS. Following selection, the City reserves the right to enter into further negotiations with the selected Proposer. Notwithstanding the preceding, the City is in no way obligated to enter into a contract with the selected Proposer in the event the parties are unable to negotiate a contract. It is also understood and acknowledged by Proposers that no property, contract or legal rights of any kind shall be created at any time until and unless an Agreement has been agreed to;approved by the City; and executed by the parties. 6 RFP 2019-092-JC MIAMI BEACH 21. POSTPONEMENT/CANCELLATION/ACCEPTANCE/REJECTION. The City may, at its sole and absolute discretion, reject any and all, or parts of any and all, responses; re-advertise this RFP; postpone or cancel, at any time, this RFP process; or waive any irregularities in this RFP, or in any responses received as a result of this RFP. Reasonable efforts will be made to either award the proposer the contract or reject all proposals within one-hundred twenty(120)calendar days after proposal opening date.A proposer may withdraw its proposal after expiration of one hundred twenty (120) calendar days from the date of proposal opening by delivering written notice of withdrawal to the Procurement Department prior to award of the contract by the City Commission. 22. PROPOSER'S RESPONSIBILITY. Before submitting a response, each Proposer shall be solely responsible for making any and all investigations, evaluations, and examinations, as it deems necessary, to ascertain all conditions and requirements affecting the full performance of the contract. Ignorance of such conditions and requirements, and/or failure to make such evaluations, investigations, and examinations, will not relieve the Proposer from any obligation to comply with every detail and with all provisions and requirements of the contract, and will not be accepted as a basis for any subsequent claim whatsoever for any monetary consideration on the part of the Proposer. 23. COSTS INCURRED BY PROPOSERS.All expenses involved with the preparation and submission of Proposals, or any work performed in connection therewith, shall be the sole responsibility (and shall be at the sole cost and expense)of the Proposer, and shall not be reimbursed by the City. 24. RELATIONSHIP TO THE CITY. It is the intent of the City, and Proposers hereby acknowledge and agree, that the successful Proposer is considered to be an independent contractor, and that neither the Proposer, nor the Proposer's employees, agents, and/or contractors, shall, under any circumstances, be considered employees or agents of the City. 24. OCCUPATIONAL HEALTH AND SAFETY. In compliance with Chapter 442, Florida Statutes, any toxic substance listed:in Section 38F-41..03 of the Florida Administrative Code delivered as a result of this proposal must be accompanied by a Material Safety Data Sheet(MSDS)which may be obtained from the manufacturer. 25. ENVIRONMENTAL REGULATIONS. The City reserves the right to consider a proposer's history of citations and/or violations of environmental regulations in investigating a proposer's responsibility, and further reserves the right to declare a proposer not responsible if the history of violations warrant such determination in the opinion of the City. Proposer shall submit with its proposal, a complete history of all citations and/or violations, notices and dispositions thereof. The non-submission of any such documentation shall be deemed to be an affirmation by the Proposer that there are no citations or violations. Proposer shall notify the City immediately of notice of any citation or violation which proposer may receive after the proposal opening date and during the time of performance of any contract awarded to it. 26.TAXES.The City of Miami Beach is exempt from all Federal Excise and State taxes. 27. MISTAKES. Proposers are expected to examine the terms, conditions, specifications, delivery schedules, proposed pricing, and all instructions pertaining to the goods and services relative to this RFP. Failure to do so will be at the Proposer's risk and may result in the Proposal being non-responsive. 28. PAYMENT. Payment will be made by the City after the goods or services have been received, inspected, and found to comply with contract, specifications, free of damage or defect, and are properly invoiced. Invoices must-be consistent with Purchase Order format. 7 RFP 2019-092-JC MIAMI BEACH - 29. COPYRIGHT, PATENTS &ROYALTIES. Proposer shall indemnify and save harmless the City of Miami Beach, Florida, and its officers, employees,contractors,and/or agents,from liability of any nature or kind, including cost and expenses for,or on account of, any copyrighted, patented,or unpatented invention, process,or article manufactured or used in the performance of the contract, including its use by the City.of Miami Beach, Florida. If the Proposer uses any design, device or materials covered by letters, patent, or copyright, it is mutually understood and agreed, without exception, that the proposal prices shall include all royalties or cost arising from the use of such design, device,or materials in any way involved in the work. 30. DEFAULT: Failure or refusal of the selected Proposer to execute a contract following approval of such contract by the City Commission,or untimely withdrawal of a response before such award is made and approved, may result in a claim for damages by the City and may be grounds for removing the Proposer from the City's vendor list. 31. MANNER OF PERFORMANCE. Proposer agrees to perform its duties and obligations in a professional manner - and in accordance with all applicable'Local, State, County, and Federal laws, rules, regulations and codes. Lack of knowledge or ignorance by the Proposer with/of applicable laws will in no way be a cause for relief from responsibility. Proposer agrees that the services provided shall be,provided by employees that are educated,trained, experienced, certified, and licensed in all areas encompassed within their designated duties. Proposer agrees to furnish to the City any and all documentation, certification, authorization, license, permit, or registration currently required by applicable laws, rules, and regulations. Proposer further certifies that it and its employees will keep all licenses, permits, registrations, authorizations, or certifications required by applicable laws or regulations in full force and effect during the term of this contract Failure of Proposer to comply with this paragraph shall constitute a material breach of this contract. Where contractor is required to enter or go on to City of Miami Beach property to deliver materials or perform work or services as a result of any contract resulting from this solicitation, the contractor will assume the full duty, obligation and expense of obtaining all necessary licenses, permits, and insurance, and assure all work complies with all applicable laws. The contractor shall be liable for any damages or loss to the City occasioned by negligence of the Proposer,or its officers,employees,contractors,and/or agents,for failure to comply with applicable laws. 32. SPECIAL CONDITIONS. Any and all Special Conditions that may vary from these General Terms and Conditions shall have precedence. 33. NON-DISCRIMINATION. The Proposer certifies that it is in compliance with the non-discrimination clause contained in Section 202, Executive Order 11246, as amended by Executive Order 11375, relative to equal. employment opportunity for all persons without regard to race, color, religion, sex or national origin. In accordance with the City's Human Rights Ordinance, codified in Chapter 62 of the City Code, Proposer shall prohibit discrimination by reason of race, color, national origin, religion, sex, intersexuality, gender identity, sexual orientation, marital and familial status,and age or disability. 34. DEMONSTRATION OF COMPETENCY. The city may consider any evidence available regarding the financial, technical, and other qualifications and abilities of a Proposer, including past performance (experience) in making an award that is in the best interest of the City,including: A.Pre-award inspection of the Proposer's facility may be made prior to the award of contract. B. Proposals will only beconsidered from firms which are regularly engaged in the business of providing,the goods and/or services as described in this solicitation. C. Proposers must be able to demonstrate a good record of performance for a reasonable period of time, and have sufficient financial capacity, equipment, and organization to ensure that they can satisfactorily perform the services if awarded a contract under the terms and conditions of this solicitation. 8 RFP 2019-092-JC MIAMI BEACH; • D. The terms "equipment and organization", as used`herein shall, be construed to mean a fully equipped and well established company in line with the best business practices in the industry, and as determined by the City of Miami Beach. E. The City may consider any evidence available regarding the financial, technical, and other qualifications and abilities of a Proposer, including past performance(experience), in making an award that is in the best interest of the City. F.The City may require Proposer s to show proof that they have been designated as authorized representatives of a manufacturer or supplier,which is the actual source of supply. In these instances,the City may also require material information from the source of supply regarding the quality, packaging, and characteristics of the products to be supply to the City. 35. ASSIGNMENT. The successful Proposer shall not assign, transfer, convey, sublet or otherwise dispose of the contract, including any or all of its right, title or interest therein, or his/her or its power to execute such contract, to any person,company or corporation,without the prior written consent of the City. 36. LAWS, PERMITS AND REGULATIONS. The Proposer shall obtain and pay for all licenses, permits, and inspection fees required to complete the work and shall comply with all applicable laws. 37. OPTIONAL CONTRACT USAGE. When the successful Proposer(s) is in agreement, other units of government or non-profit agencies may participate in purchases pursuant to the award of this contract at the option of the unit of government or non-profit agency. 38.VOLUME OF WORK TO BE RECEIVED BY CONTRACTOR. It is the intent of the City to purchase the goods and services specifically listed in this solicitation from the contractor. However, the City reserves the right to purchase any goods or services awarded from state or other governmental contract, or on an as-needed basis through the City's spot market purchase provisions. . 39. DISPUTES. In the event of a conflict between the documents, the order of priority of the documents shall be as follows: A.Any contractor agreement resulting from theaward of this solicitation;then B.Addendum issued for this solicitation,with the latest Addendum taking precedence;then C.The solicitation;then D.The Proposer's proposal in response to the solicitation. 40. INDEMNIFICATION. The Proposer shall indemnify and hold harmless the City and its officers, employees, agents and instrumentalities from any and all liability, losses or damages, including attorney's fees and costs of defense, which the City or its officers, employees, agents or instrumentalities may incur as a result of claims, demands, suits,.causes of actions or proceedings of any kind or nature arising out of, relating to or resulting from the performance of the agreement by the contractor or its employees, agents, servants, partners, principals or subcontractors. The contractor shall pay all claims and losses in connection therewith, and shall investigate and defend all claims, suits or actions of any kind or nature in the name of the City,where applicable, including appellate proceedings, and shall pay all costs,judgments, and attorney's fees which may be incurred thereon. The Proposer expressly understands and agrees that any insurance protection required by this Agreement or otherwise provided by the contractor shall in no way limit the responsibility to indemnify, keep and save harmless and defend the City or its officers, employees, agents and instrumentalities as herein provided. The above indemnification provisions shall survive the expiration or termination of this Agreement 9 RFP 2019-092-JC MIAMI BEACH 41. CONTRACT EXTENSION. The City reserves the right to require the Contractor to extend contract past the stated termination date for a period of up to 120 days in the event that a subsequent contract has not yet been awarded.Additional extensions past the 120 days may occur as needed by the City and as mutually agreed upon by the City and the contractor. 42. FLORIDA PUBLIC RECORDS LAW. Proposers are hereby notified that all Bid including, without limitation, any and all information and documentation submitted therewith, are exempt from public records requirements under Section 119.07(1), Florida Statutes, and s. 24(a),Art. 1 of the State Constitution until such time as the City provides notice of an intended decision or until thirty (30) days after opening of the proposals, whichever is earlier. Additionally, Contractor agrees to be in full compliance with Florida Statute 119.0701 including, but not limited to, agreement to (a) Keep and maintain public records that ordinarily and necessarily would be required by the public agency in order to perform the services; (b) provide the public with access to public records on the same terms and conditions that the public agency would provide the records and at a cost that does not exceed the cost provided in this chapter or as otherwise provided by law; (c) Ensure that public records that are exempt or confidential and exempt from public records disclosure requirements are not disclosed except as authorized by law; (d) Meet all requirements for retaining public records and transfer, at no cost, to the public agency all public records in possession of the contractor upon termination of the contract and destroy any duplicate public records that are exempt or confidential and exempt from public records disclosure requirements. All records stored electronically must be provided to the public agency in a format that is compatible with the information technology systems of the public agency. 43.OBSERVANCE OF LAWS. Proposers are expected to be familiar with, and comply with, all Federal, State, County, and City laws, ordinances, codes, rules and regulations, and all orders and decrees of bodies or tribunals having jurisdiction or authority which, in any manner, may affect the scope of services and/or project contemplated by this RFP (including, without limitation, the Americans with Disabilities Act, Title VII of the Civil Rights Act, the EEOC Uniform Guidelines, and all EEO regulations and guidelines). Ignorance of the law(s) on the part of the Proposer will in no way relieve it from responsibility for compliance. 44. CONFLICT OF INTEREST. All Proposers must disclose, in their Proposal, the name(s) of any officer, director, agent, or immediate family member(spouse, parent, sibling, and child)who is also an employee of the City of Miami Beach. Further, all Proposers must disclose the name of any City employee who owns, either directly or indirectly, an interest of ten (10%) percent or more in the Proposer entity or any of its affiliates. 45. MODIFICATION/WITHDRAWALS OF PROPOSALS.A Proposer may submit a modified Proposal to replace all or any portion of a previously submitted Proposal up until the Proposal due date and time. Modifications received after the Proposal due date and time will not be considered. Proposals shall be irrevocable until contract award unless withdrawn in writing prior to the Proposal due date, or after expiration of 120 calendar days from the opening of Proposals without a contract award. Letters of withdrawal received after the Proposal due date and before said expiration date, and letters of withdrawal received after contract award will not be considered. 46. EXCEPTIONS TO RFP. Proposers must clearly indicate any exceptions they wish to take to any of the terms in this RFP, and outline what, if any, alternative is being offered. All exceptions and alternatives shall be included and clearly delineated, in writing, in the Proposal. The City, at its sole and absolute discretion, may accept or reject any or all exceptions and alternatives. In cases in which exceptions and alternatives are rejected, the City shall require the Proposer(to comply with the particular term and/or condition of the RFP to which Proposer took exception to(as said term and/or condition was originally set forth on the RFP). 10 RFP 2019-092 JC MIAMI BEACH 47.ACCEPTANCE OF GIFTS, FAVORS, SERVICES. Proposers shall not offer any gratuities,favors, or anything of monetary value to any official, employee, or agent of the City, for the purpose of influencing consideration of this Proposal. Pursuant to Sec. 2-449 of the City Code, no officer or employee of the City shall accept any gift, favor or service that might reasonably tend improperly to influence him,in the discharge of his official duties. 48. SUPPLEMENTAL INFORMATION. City reserves the right to request supplemental information from Proposers at any time during the RFP solicitation process, unless otherwise noted herein. 49. ADDITIONAL ITEMS I SERVICES. Although this solicitation and resultant contract identifies specific goods, services or facilities ("items"), it is hereby agreed and understood that the City may require additional items to be added to the Contract which are ancillary or supplemental to the items specified herein and required to complete the work. When additional items are required to be added to the Contract, awarded vendor(s), as applicable to the item being requested, under this contract may be invited to submit price quote(s) for the additional items. If these quote(s) are determined to be fair and reasonable, then the additional items will be awarded to the current contract vendor(s) through either a Purchase Order(or Change Order if Purchase Order already exists) or an amendment to the Contract.Additional items with a cumulative value of$50,000 or less may be approved by the City Manager. City Commission approval is required for additional items with a cumulative value greater than $50,000. The City may determine to obtain price quotes for the additional items from other vendors in the event that fair and reasonable pricing is not obtained from the current contract vendors, or for other reasons at the City's discretion. Balance of Page Intentionally Left Blank 11 RFP 2019-092-JC MIAMI BEACH, SECTION 0300 PROPOSAL SUBMITTAL INSTRUCTIONS AND FORMAT 1. SEALED RESPONSES. One original Proposal (preferably in 3-ring binder) must be submitted in an opaque, sealed envelope or container on or before the due date established for the receipt of proposals.Additionally, ten (10) _ bound copies and one (1) electronic format (CD or USB format) are to be submitted. The following information should be clearly marked on the face of the envelope or container in which the proposal is submitted: solicitation. number, solicitation title, Proposer name, Proposer return address. Proposals received electronically, either through email or facsimile,are not acceptable and will be rejected. 2. LATE BIDS: Bid Proposals are to be received on or before the due date established herein for the receipt of Bids. Any Bid received after the deadline established for receipt ofproposals will be considered late and not be accepted or will be returned to Proposer unopened. The City does not accept responsibility for any delays, natural or otherwise. 3. PROPOSAL FORMAT. In order to maintain comparability, facilitate the review process and assist the Evaluation Committee in review of proposals, it is strongly recommended that proposals be organized and tabbed in accordance with the sections and manner specified below. Hard copy submittal should be tabbed as enumerated below and contain a table of contents with page references. Electronic copies should also be tabbed and contain a table of contents with page references. TAB 1 Cover Letter&Proposal Certification and Requirements Affidavit(Appendix A) 1.1 Cover Letter and Table of Contents. The cover letter must indicate Proposer and Proposer Primary Contact for the purposes of this:solicitation. 1.2 Proposal Certification,Questionnaire&Requirements Affidavit(Appendix A).Attach Appendix A fully completed and executed. 1.3 Organizational. Chart. Includean organizational chart that identifies all. individuals that will be assigned to this engagement, including, but not limited to: primary account representative, all senior staff and any principal(s) that will be responsible for the successful deployment of services. -; TAB 2 Experience&Qualifications 2.1 Qualifications of Proposing Firm. Submit detailed information regarding the relevant experience and performance and achievements of the firm and/or its principals in providing the scope of services as identified in this solicitation, including experience in providing similar scope of services to public sector agencies. For each project that the Proposer submits as evidence of similar experience for the firm and/or any principal, the following is required: project description, agency name, agency contact, contact telephone & email, and year(s) and term of engagement. For each project, identify whether the experience is for the firm or for a principal(include name of principal). 2.1.1 Indicate the number of days of specialized training in governmental accounting and auditing received during the last two (2) years for personnel identified on the organizational chart submitted in Tab 1.3 to be assigned to this engagement. 2.1.2 Describe the participation of the firm and/or its principal(s) in national or state, governmental or professional,accounting or auditing Boards or Committees during the last three(3)years. 2.1.3 Describe the firm's quality control programs and procedures that ensure compliance with the respondent's professional standards review and AICPA standards. Indicate whether the firm is in the SEC Practice Section and/or the Private Companies Practice Section of the Quality Control Program. If the respondent answered RFP 2019-092-JC 12 MIAMI BEACH positively to the preceding,attach a copy of the last Peer Review received by the respondent. 2.1.4 Describe the firm's(local office-for national firms)and/or the principal's experience in providing accounting and auditing services to local governments. 2.1.5 Describe any litigation in excess of$100,000 filed against the respondent in the State of Florida over the last three(3)years.Also describe any terminations,suspensions,censures,reprimands, probations or similar actions against the respondent or any member of the respondent's firm by the Florida State Board of Accountancy in the last three(3)years. 2.1.6 Submit a list of ten (10) client references, preferably governmental/public institutions, for which the proposer has performed similar work. Five(5) or more of the client references should be located within Florida. Information should include: 1. Client Name,address,contact phone number. 2. Description of similar scope of services. 3. Month and Year the project was started and completed. 2.1.7 Indicate compliance with the State Board of Accountancy requirements applicable to audits of Florida local governments. 2.2 Qualifications of Proposer Team. In addition to all personnel, indicate on the organizational chart any sub- consultants to be used for this project if awarded,the role that each team member will play in providing the services detailed herein and each team members' qualifications. A resume of each individual, including education, experience,and any other pertinent information,shall be included for each Proposal team member to be assigned to this contract. These resumes should be, at a minimum, for the partner, the manager and the senior for this engagement.The resume should include the continuing education in governmental auditing and other governmental audit engagements that each has undertaken. TAB 3 Approach and Methodology Submit detailed:information on how Proposer plans to approach and accomplish the required scope of services, including detailed information,as applicable,which addresses,but need not be limited to:implementation plan, project timeline, phasing options, testing and risk mitigation options for assuring project is implemented on time and within budget. Describe the respondent's approach to this audit engagement.This should include at least the following: 1. Development of the'audit program. 2. Organization of the audit team and titles of team members and approximate amount of time each such h class of member will spend on the audit. _ 3. The names of the partner and manager that will be assigned to this engagement and the extent of their involvement with this engagement. Any substitution of these individuals must be approved by the Audit Committee prior to any change of staffing. t - 4. The proposed schedule for the audit(s). • . 5. Any anticipated use of internal audit staff or other City staff. 6. The proposal should indicate if the firm conducts any training for its employees and if City personnel could attend such training. TAB 4 Cost Proposal Submit a completed Cost Proposal Form(Appendix E). RFP 2019-092-JC 13 J - MIAMI BEACH 4. FINANCIAL CAPACITY. Within three (3) business days of request by the City, each Proposer shall arrange for Dun&Bradstreet to submit a Supplier Qualification Report(SQR)directly to the Procurement Contact named herein. No proposal will be considered without receipt, by the City, of the SQR directly from Dun & Bradstreet. The cost of the preparation of the SQR shall be the responsibility of the Proposer. The Proposer shall request the SQR report from D&B at: https://supplierportal.dnb.comiwebapp/wcs/storeslservlet/SupplierPortal?storeld=11696 Proposers are responsible for the accuracy of the information contained in its SQR. It is highly recommended that each Proposer review the information contained in its SQR for accuracy prior to submittal to the City and as early as possible in the solicitation process. For assistance with any portion of the SQR submittal process,contact Dun&Bradstreet at 800-424-2495. 5. ADDITIONAL INFORMATION OR CLARIFICATION. After proposal submittal, the City reserves the right to require additional information from Proposers (or Proposer team members or sub-consultants) to determine: qualifications (including, but not limited to, litigation history, regulatory action, or additional references); and financial capability(including, but not limited to, annual reviewed/audited financial statements with the auditors notes for each of their last two complete fiscal years). The City reserves the right to request any documentation omitted,with exception of the Cost(as applicable) Proposal Form (Appendix E), Proposal Certification, Questionnaire & Requirements Affidavit (Appendix A), and Bid Bond (if applicable). Submittals received that do not include the Cost Proposal Form, completed as required and fully executed, or Bid Bond (if applicable) shall be deemed non-responsive. Bidder must submit any omitted documentation within three (3) business days upon request from the City, or the bid may be deemed non- responsive. Non-responsive bid packages will receive no further consideration. Balance of Page Intentionally Left Blank RFP 2019-092-JC 14 SECTION 0400 PROPOSAL EVALUATION 1. Audit Committee. Per Section 218.391, Florida Statute the Auditor selection procedures are to be followed as detailed below: (1) Each local governmental entity, district school board, charter school, or charter technical career center, prior to entering into a written contract pursuanfto subsection (7), except as provided in subsection (8), shall use auditor selection procedures when selecting an auditor to conduct the annual financial audit required in s.218.39. (2) The govemiing body of a charter county, municipality, special district, district school board, charter school, or charter technical career center shall establish an audit committee. Each non charter county shall establish an audit committee that, at a minimum, shall consist of each of the county officers elected pursuant toe-s. 1(d), Art. VIII of the State Constitution, or a designee, and one member of the board of county commissioners or its designee. The primary purpose of the audit committee is to assist the governing body in selecting an auditor to conduct the annual financial audit required in s. 218:39; however, the audit committee may serve other audit oversight purposes as determined by the entity's governing body. The public shall not be excluded from the proceedings under this section. ' (3)The audit committee shall: (a) Establish factors to use for the evaluation of audit services to be provided by a certified public accounting firm duly licensed under chapter 473 and qualified to conduct audits in accordance with government auditing standards as adopted by the Florida Board of Accountancy. Such factors shall include, but are. not limited to, ability of personnel, experience, ability to furnish the required services, and such other factors as may be determined by the committee to be applicable to its particular requirements. (b) Publicly announce requests for proposals. Public announcements must include, at a minimum, a brief description of the audit and indicate how interested firms can apply for consideration. (c) Provide interested firms with a request for proposal. The request for proposal shall include information on how proposals are to be evaluated and such other information the committee determines is necessary for the firm to prepare a proposal. (d) Evaluate proposals provided by qualified firms. If compensation is one of the factors established pursuant to paragraph (a), it shall not be the sole or predominant factor used to evaluate proposals. (e) Rank and recommend in order of preference no fewer than three firms deemed to be the most highly qualified to perform the required services after considering the factors established pursuant to paragraph (a). If fewer than three firms respond to the request for -proposal, the committee shall recommend such firms as it deems to be the most highly qualified. (4) The governing body shall inquire of qualified firms as to the basis of compensation, select one of the firms recommended by the audit committee, and negotiate a contract, using one of the following methods: (a) If compensation is not one of the factors established pursuant to paragraph (3)(a) and - 15 RFP 2019-092-IC not used to evaluate firms pursuant to paragraph (3)(e),the governing body shall negotiate a contract with the firm ranked first. If the governing body is unable to negotiate a satisfactory contract with that firm, negotiations with that firm shall be formally terminated, and the governing body shall then undertake negotiations with the second-ranked firm. Failing accord with the second-ranked firm, negotiations shall then be terminated with that firm and undertaken with the third-ranked firm.'Negotiations with the other ranked firms shall be undertaken in the same manner. The governing body, in negotiating with firms, may reopen formal negotiations with any one of the three top ranked firms, but itmay not negotiate with more than one firm at a time. (b) If compensation is one of the factors established pursuant to paragraph (3)(a)and used in the evaluation of proposals pursuant to paragraph (3)(d),the governing body shall select the highest ranked qualified firm or must document in its public records the reason for not selecting the highest-ranked qualified firm. (c) The governing body may select a firm recommended by the audit committee and negotiate a contract with one of the recommended firms using an appropriate alternative negotiation method for which compensation is not the sole or predominant factor used to select the firm. (d) In negotiations with firms under this section, the governing body may allow a designee to conduct negotiations on its behalf. (5) The method used by the governing body to select a firm recommended by the audit committee and negotiate a contract with such firm must ensure that the agreed-upon compensation is reasonable to satisfy the requirements of s.218.39 and the needs of the governing body. (6) If the governing body is unable to negotiate a satisfactory contract with any of the recommended firms, the committee shall recommend additional firms, and negotiations shall continue in accordance with this section until an agreement is reached. (7) Every procurement of audit services shall be evidenced by a written contract embodying all r provisions and conditions of the procurement of such services. For purposes of this section, an engagement letter signed and executed by both parties shall constitute a written contract. The written contract shall, at a minimum, include the following: (a) A provision specifying the services to be provided and fees or other compensation for such services. (b) A provision requiring that invoices for fees or other compensation be submitted in sufficient detail to demonstrate compliance with the terms of the contract. (c) A provision specifying the contract period, including renewals, and conditions under which the contract may be terminated or renewed. (8) Written contracts entered into pursuant to subsection (7) may be renewed. Such renewals maybe done without the use of the auditor selection procedures provided in this section. Renewal of a contract shall be in writing. 2. Step 1 Evaluation. The first step will consist,of the qualitative criteria listed below to be considered by the Audit Committee. The second step will consist of quantitative criteria established 16 RFP 2019-092-JC below to be added to the Audit Committee results by the Procurement Department. An Audit Committee, per Florida Statute 218.391, shall meet to evaluate each Proposal in accordance with the qualifications criteria established below for Step 1, Qualitative Criteria. In doing so, the Committee may: • review and score all proposals received, with or without conducting interview sessions;or • review all proposals received and short-list one or more Proposers to be further considered during subsequent interview session(s)(using the same criteria). Step 1 -Qualitative Criteria Maximum Points Proposer Experience and Qualifications 45 Approach and Methodology 45 ' TOTAL AVAILABLE STEP 1 POINTS 90 3. Step 2 Evaluation. Following the results of Step 1 Evaluation of qualitative criteria, the Proposers may receive additional quantitative criteria points to be added by the;Procurement Department to those points earned in Step 1, as follows. Step 2-Quantitative Criteria Maximum Points Cost 10 Veterans Preference 5 TOTAL AVAILABLE STEP 2 POINTS 15 Balance of Page Intentionally Left Blank • 1 _ 17 RFP 2019-0921C 4. Cost Proposal Evaluation.The cost proposal points shall be developed in accordance with the following formula: 1 Sample Objective Formula for Cost Example Maximum Formula for Calculating Points , Vendor Allowable Points (lowest cost 1 cost of proposal being Total Points Vendor Cost (Points noted are for illustrative evaluated X maximum allowable Proposal purposes only.Actual points are points=awarded points) Awarded noted above.) Round to Vendor A $100.00 20 $1001$100 X 20=20 20 Vendor B $150.00 20 $1001$150 X20=13 13 Vendor C $200.00 20 $100 I$200 X 20=10 10 • 5. Determination of Final Ranking.At the conclusion of the Audit Committee Step 1 scoring, Step 2 Points will be added to each Committee member's scores by the Procurement Department. Step 1 and 2 scores will be converted to rankings in accordance with the example below: Proposer A Proposer B Proposer C Ste. 1 Points 82 76 80 • Committee; Ste.2 Points 22 15 12 Member 1. Total 104 91 92 Rink 1 3 2 Ste. 1 Points 79 85 72 Committee. . Ste.2 Points 22 15 12 Member 2 ' Total 101 100 84 Rank ' , 1 _ 2 3 Ste. 1 Points 80 74 66 Conimittee Ste.2 Points 22 15 12 Member 2 Total 102 89 78 :Rank 1 2- 3 Low Aggregate Score 3 7 8' Final Ranking* 1 2 3 * Final Ranking is presented to the City Manager for further due diligence and recommendation to the City Commission. Final Ranking does not constitute an award recommendation until-such time as the City Manager has made his recommendation to the City Commission, which may be different than final ranking results. Balance of Page Intentionally Left Blank 18 RFP 2019-0921C . APPENDIX A M1 ,... EAC .} . A/A I ProposalCertification , tinn it Que so ae & Requirements Affidavit RFP 2019-092-JC Auditing Services PROCUREMENT DEPARTMENT 1755 'Meridian Avenue, 3rd Floor -Miami Beach, Florida 33139 19 RFP 2019-092-JC Solicitation No: Solicitation Title: 2019-092-JC Auditing Services • Procurement Contact Tel: Email: Jason Crouch , 305-673-7000 x6694 jasoncrouchna.miamibeachfl.Qov • PROPOSAL CERTIFICATION,QUESTIONNAIRE&REQUIREMENTS AFFIDAVIT Purpose: The purpose of this Proposal.Certification, Questionnaire and Requirements Affidavit Form is to inform prospective Proposers of certain solicitation and contractual requirements, and to collect necessary information from Proposers in order that certain portions of responsiveness, responsibility and other determining factors and compliance with requirements may be evaluated. This Proposal Certification, Questionnaire and Requirements Affidavit Form is a REQUIRED FORM that must be submitted fully completed and executed. 1: General Proposer Information. - FIRM NAME: NO.OF YEARS IN BUSINESS: NO.OF YEARS IN BUSINESS LOCALLY: NO.OF EMPLOYEES: OTHER NAME(S)PROPOSER HAS OPERATED UNDER IN THE LAST 10 YEARS: FIRM PRIMARY ADDRESS(HEADQUARTERS): CITY: STATE: ZIP CODE: TELEPHONE NO.: - TOLL FREE NO.: FAX NO.: FIRM LOCAL ADDRESS: CITY: STATE: ZIP CODE: PRIMARY ACCOUNT REPRESENTATIVE FOR THIS ENGAGEMENT: -ACCOUNT REP TELEPHONE NO.: ACCOUNT REP TOLL FREE NO.:- ACCOUNT REP EMAIL: FEDERAL TAX IDENTIFICATION NO.: The City reserves the right to seek additional information from Proposer or other source(s), including but not limited to:any firm or principal information,applicable licensure,resumes of relevant individuals,client information,financial information,or any information the City deems necessary to evaluate the capacity of the Proposer to perform in accordance with contract requirements. 20 • RFP 2019-092-JC 1 1. Veteran Owned Business.Is Pro oser claiming a veteran owned business status? YES NO SUBMITTAL REQUIREMENT: Proposers claiming veteran owned business status shall submit a documentation proving that firm is certified as a veteran-owned business or a service-disabled veteran owned business by the State of Florida or United States federal government,as required pursuant to ordinance 2011-3748. 2. Conflict Of Interest.All Proposers must disclose,in their Proposal,the name(s)of any officer,director,agent,or immediate family member(spouse, parent, sibling, and child)who is also an employee of the City of Miami Beach. Further, all Proposers must disclose the name of any City employee who owns, either directly or indirectly, an interest of ten (10%) percent or more in the Proposer entity or any of its affiliates. SUBMITTAL REQUIREMENT: Proposers must disclose the name(s)of any officer,director, agent, or immediate family member (spouse,parent,sibling,and child)who is also an employee of the City of Miami Beach. Proposers must also disclose the name of any City employee who owns,either directly or indirectly,an interest of ten(10%)percent or more in the Proposer entity or any of its affiliates 3. References&Past Performance.Proposer shall submit at least three(3)references for whom the Proposer has completed work similar in size and nature as the work referenced in solicitation. SUBMITTAL REQUIREMENT: For each reference submitted, the following information is required: 1) Firm Name, 2) Contact Individual Name&Title,3)Address,4)Telephone,5)Contact's Email and 6)Narrative on Scope of Services Provided. 4. Suspension,Debarment or Contract Cancellation.Has Proposer ever been debarred,suspended or other legal violation,or had a contract cancelled due to non- erformance by riy2Ilic sector agency? YES NO SUBMITTAL REQUIREMENT: If answer to above is "YES," Proposer shall submit a statement detailing the reasons that led to action(s). 5. Vendor Campaign Contributions. Proposers are expected to be or become familiar with,the City's Campaign Finance Reform laws, as codified in Sections 2-487 through 2-490 of the City Code. Proposers shall be solely responsible for ensuring that all applicable provisions of the City's Campaign Finance Reform laws are complied with,and shall be subject to any and all sanctions, as prescribed therein,including disqualification of their Proposals,in the event of such non-compliance. SUBMITTAL REQUIREMENT: Submit the names of all individuals or entities (including your sub-consultants)with a controlling financial interest as defined in solicitation. For each individual or entity with a controlling financial interest indicate whether or not each'individual or entity has contributed to the campaign either directly or indirectly,of a candidate who has been elected to the office of Mayor or City Commissioner for the City of Miami Beach. 6. Code of Business Ethics. Pursuant to City Resolution No.2000-23879,each person or entity that seeks to do business with the City shall adopt a Code of Business Ethics ("Code") and submit that Code to the Procurement Department with its proposal/response or within five(5)days upon receipt of request.The Code shall,at a minimum, require the Proposer,to comply with all applicable governmental rules and regulations including, among others, the conflict of interest, lobbying and ethics provision of the City of Miami Beach and Miami Dade County. SUBMITTAL REQUIREMENT: Proposer shall submit firm's Code of Business Ethics. In lieu of submitting Code of Business Ethics,Proposer may submit a statement indicating that it will adopt,as required in the ordinance,the City of Miami Beach Code of Ethics,available at http://www.miamibeachfl.qov/city-hall/procurement/procurement-related-ordinance-and-procedures/ 7. Living Wage. Pursuant to Section 2-408 of the City of Miami Beach Code,as same may be amended from time to time,covered employees shall be paid the required living wage rates listed below: 1. Effective January 1, 2018, covered employees must be paid a living wage rate of no less than $11.62 per hour with health care benefits of at least$2.26 per hour,or a living wage rate of no less than$13.88 per hour without health care benefits. 2. Effective January 1, 2019, covered employees must be paid a living wage rate of no less than $11.70 per hour with health care benefits of at least$2.74 per hour,or a living wage rate of no less than$14.44 per hour without health care benefits. 21 RFP 2019-092-JC 3. Effective January 1, 2020, covered employees must be paid a living wage rate of no less than $11.78 per hour with health care benefits of at least$3.22 per hour,or a living wage rate of no less than$15.00 per hour without health care benefits. The living wage rate and health care benefits rate may, by Resolution of the City Commission be indexed annually for inflation using the Consumer Price Index for all Urban Consumers(CPI-U)Miami/Ft.Lauderdale,issued by the U.S.Department of Labor's Bureau of Labor Statistics. Notwithstanding the preceding,no annual index shall exceed three percent(3%).The City may also, by resolution,elect not to index the living wage rate in any particular year,if it determines it would not be fiscally sound to implement same(in a particular year). Proposers'failure to comply with this provision shall be deemed a material breach under this proposal,under which the City may, at its sole option, immediately deem said Proposer as non-responsive,and may further subject Proposer to additional penalties and fines,as provided in the City's Living Wage Ordinance,as amended. Further information on the Living Wage requirement is available at http://www.miamibeachfl:gov/city-halllprocurement/procurement-related-ordinance-and-procedures/ SUBMITTAL REQUIREMENT: No additional submittal is required.By virtue of executing this affidavit document,Proposer agrees to the living wage requirement.Any payroll request made by the City during the contract term shall be completed electronically via the City's electronic compliance portal,LCP Tracker(LCPTracker.net). 8. Equal Benefits for Employees with Spouses and Employees with Domestic Partners.When awarding competitively solicited contracts valued at over$100,000 whose contractors maintain 51 or more full time employees on their payrolls during 20 or more calendar work weeks,the Equal Benefits for Domestic Partners Ordinance 2005-3494 requires certain contractors doing business with the City of Miami Beach,who are awarded a contract pursuant to competitive proposals,to provide"Equal Benefits"to their employees with domestic partners, as they provide to employees with spouses. The Ordinance applies to all employees of a Contractor who work within the City limits of the City of Miami Beach,Florida;and the Contractor's employees located in the United States, but outside of the City of Miami Beach limits, who are directly performing work on the contract within the City of Miami Beach. A. Does your company provide or offer access to any benefits to employees with spouses or to spouses of employees? YES NO B. Does your company provide or offer access to any benefits to employees with(same or opposite sex)domestic partners*or to domestic partners of employees? YES NO C. Please check all, benefits that apply to your answers above and list in the"other" section any additional benefits not already specified. Note:some benefits are provided to employees because they have a spouse or domestic partner,such as bereavement leave;other benefits are provided directly to the spouse or domestic partner,such as medical insurance. BENEFIT Firm Provides for Firm Provides for Firm does not Employees with Employees with Provide Benefit Spouses Domestic Partners Health Sick Leave Family Medical Leave Bereavement Leave If Proposer cannot offer a benefit to domestic partners because of reasons outside your control, (e.g., there are no insurance providers in your area willing to offer domestic partner coverage)you may be eligible for Reasonable Measures compliance. To comply on this basis, you must agree to pay a cash equivalent and submit a completed Reasonable Measures Application (attached)with all necessary documentation.Your Reasonable Measures Application will be reviewed for consideration by the City Manager,or his designee. Approval is not guaranteed and the City Manager's decision is final. Further information on the Equal Benefits requirement is available at http:/lwww.miamibeachfl.gov/city-hall/procurement/procurement-related-ordinance-and- procedures/ 22 RFP 2019-092-IC 9. Public Entity Crimes.Section 287.133(2)(a),Florida Statutes,as currently enacted or as amended from time to time,states that a person or affiliate who has been placed on the convicted vendor list following a conviction for a public entity crime may not submit a proposal, proposal, or reply on a contract to provide any goods or services to a public entity; may not submit a proposal, proposal,or reply on a contract with a public entity for the construction or repair of a public building or public work;may not submit proposals,proposals,or replies on leases of real property to a public entity;may not be awarded or perform work as a contractor, supplier,subcontractor,or consultant under a contract with any public entity;and may not transact business with any public entity in excess of the threshold amount provided in s. 287.017 for CATEGORY TWO for a period of 36 months following the date of being placed on the convicted vendor list. SUBMITTAL REQUIREMENT: No additional submittal is required.By virtue of executing this affidavit document, Proposer agrees with the requirements of Section 287.133,Florida Statutes,and certifies it has not been placed on convicted vendor list. 10. Non-Discrimination.Pursuant to City Ordinance No.2016-3990,the City shall not enter into a contract with a business unless the business represents that it does not..and will not engage in a boycott as defined in Section 2-375(a)of the City Code,including the blacklisting,divesting from,or otherwise refusing to deal with a person or entity when such action is based on race,color,national origin,religion,sex,intersexuality,gender identity,sexual orientation,marital or familial status,age or disability. SUBMITTAL REQUIREMENT: No additional submittal is required. By virtue of executing this affidavit document, Proposer agrees it is and shall remain in full compliance with Section 2-375 of the City of Miami Beach City Code. 11. Moratorium on Travel to and the Purchase of Goods or Services from North Carolina and Mississippi. Pursuant to Resolution 2016-29375, the City of Miami Beach, Florida, prohibits official City travel to the states of North Carolina and Mississippi,as well as the purchase of goods or services sourced in North Carolina and Mississippi. Proposer shall agree that no travel shall occur on behalf of the City to North Carolina or Mississippi,nor shall any product or services it provides to the City be sourced from these states. SUBMITTAL REQUIREMENT: No additional submittal is required.By virtue of executing this affidavit document,Proposer agrees it is and shall remain in full compliance with Resolution 2016-29375. 12. Fair Chance Requirement. Pursuant to Section 2-376'of the City Code,the City shall not enter into any contract resulting from a competitive solicitation, unless the proposer certifies in writing that the business has adopted and employs written policies, practices,and standards that are consistent with the City's Fair Chance Ordinance, set forth in Article V of Chapter 62 of the City Code ("Fair Chance Ordinance"), and which, among other things, (i) prohibits City contractors, as an employer, from inquiring about an applicant's criminal history until the applicant is given a conditional offer of employment; (ii) prohibits advertising of employment positions with a statement that an individual with a criminal record may not apply for the position, and (iii)prohibits placing a statement ori'an employment application that a person with a criminal record may not apply for the position. SUBMITTAL REQUIREMENT: No additional submittal is required_at this time. By virtue of executing this affidavit, Proposer certifies that it has adopted policies,practices and standards consistent with the City's Fair Chance Ordinance. Proposer agrees to provide the City with supporting documentation evidencing its compliance upon request. Proposer further agrees that any breach of the representations made herein shall constitute a material breach of contract,.and shall entitle the City to the immediate termination for cause of the agreement,in addition to any damages that may be available at law and in equity. 13. Acknowledgement of Addendum: After issuance of solicitation,the City may release one or more addendum to the solicitation which may provide additional information to Proposers or alter solicitation requirements. The City will strive to reach every Proposer having received solicitation through the City's e-procurement system, PublicPurchase.com. However, Proposers are solely responsible for assuring they have received any and all addendum issued pursuant to solicitation.This Acknowledgement of Addendum section certifies that the Proposer has received all addendum released by the City pursuant to this solicitation. Failure to obtain and acknowledge receipt of all addenda may result in proposal disqualification. I Initial to Confirm. Initial to Confirm Initial to Confirm Receipt ' Receipt Receipt Addendum 1 Addendum 6 Addendum 11 Addendum 2 Addendum 7 Addendum 12 Addendum 3 Addendum 8 Addendum 13 Addendum 4 Addendum 9 Addendum 14 Addendum 5 Addendum 10 Addendum 15 If additional confirmation of addendum is required,submit under separate cover. 23 RFP 2019-092-JC i DISCLOSURE AND DISCLAIMER SECTION The solicitation referenced herein is being furnished to the recipient by the City of Miami Beach(the"City")for the recipient's convenience. Any action taken by the City in response to Proposals made pursuant to this solicitation,or in making any award,or in failing or refusing to make any award pursuant to such Proposals, or in cancelling awards,or in withdrawing or cancelling this solicitation, either before or after issuance of an award,shall be without any liability or obligation on the part of the City. In its sole discretion,the City may withdraw the solicitation either before or after receiving proposals, may accept or reject proposals, and may accept proposals which deviate from the solicitation,as it deems appropriate and in its best interest. In its sole discretion,the City may determine the qualifications and acceptability of any party or parties,submitting Proposals in response to this solicitation. Following submission of a Bid or Proposal, the applicant agrees to deliver such further details, information and assurances, including financial and disclosure data, relating to the Proposal and the applicant including, without limitation, the applicant's affiliates, officers, directors,shareholders,partners and employees,as requested by the,City in its discretion. The information contained herein is provided solely for the convenience of prospective Proposers. It is the responsibility of the recipient to assure itself that information contained herein is accurate and complete.The City does not provide any assurances as to the accuracy of any information in this solicitation. Any reliance on these contents,or on any permitted communications with City officials,shall be at the recipient's own risk. Proposers should rely exclusively on their own investigations,interpretations,and analyses.The solicitation is being provided by the City without any warranty or representation,express or implied,as to its content,its accuracy,or its completeness. No warranty or representation is made by the City or its agents that any Proposal conforming to these requirements will be selected for consideration,negotiation,or approval. The City shall have no obligation or liability with respect to this solicitation,the selection and the award process,or whether any award will be made.Any recipient of this solicitation who responds hereto fully acknowledges all the provisions of this Disclosure and Disclaimer,is totally relying on this Disclosure and Disclaimer,and agrees to be bound by the terms hereof.Any Proposals submitted to the City pursuant to this solicitation are submitted at the sole risk and responsibility of the party submitting such Proposal. This solicitation is made subject to correction of errors,omissions,or withdrawal from the market without notice. Information is for guidance only,and does not constitute all or any part of an agreement. The City and all Proposers will be bound only as,if and when a Proposal (or Proposals), as same may be modified, and the applicable definitive agreements pertaining thereto, are approved and executed by the parties, and then only pursuant to the terms of the definitive agreements executed among the parties.Any response to this solicitation may be accepted or rejected by the City for any reason,or for no " reason,without any.resultant liability to the City. _ The City is governed by the Government-in-the-Sunshine Law,and all Proposals and supporting documents shall be subject to disclosure as required by such law. All Proposals shall be submitted in sealed proposal form and shall remain confidential to.the extent permitted by Florida Statutes, until the date and time selected for opening the responses.At that time, all documents received by the City shall become public records. Proposers are expected to make'all disclosures and declarations as requested in this solicitation.By submission of a Proposal,the Proposer acknowledges and agrees that the City has the right to make any inquiry or investigation it deems appropriate to substantiate or supplement information contained in the Proposal,and authorizes the release to the City of any and all information sought in such inquiry or investigation. Each Proposer certifies that the information.contained in the Proposal is true, accurate and complete, to the best of its knowledge, information,and belief. Notwithstanding the foregoing or anything contained in the solicitation,all Proposers agree that in the event of a final unappealable judgment by a court of competent jurisdiction which imposes on the City any liability arising out of this solicitation, or any response thereto, or any action or inaction by the City with respect thereto,such liability shall be limited to$10,000.00 as agreed-upon and liquidated damages.The previous sentence, however, shall not be construed to circumvent any of the,other provisions of this Disclosure and Disclaimer which imposes no liability on the City. In the event of any differences in language between this Disclosure and Disclaimer and the balance of the solicitation,it is understood that the provisions of this Disclosure and Disclaimer shall always govern.The solicitation and any disputes arising from the solicitation shall be governed by and construed in accordance with the laws of the State of Florida. 24 RFP 2019-092-IC PROPOSER CERTIFICATION I hereby certify that: I, as an authorized agent of the Proposer , am submitting the following information as my firm's proposal; Proposer agrees to complete and unconditional acceptance of the terms and conditions of this document, inclusive of this solicitation,all attachments,exhibits and appendices and the contents of any Addenda released hereto,and the Disclosure and Disclaimer Statement; proposer agrees to be bound to any and all specifications, terms and conditions contained in the solicitation, and any released Addenda and understand that the following are requirements of this solicitation and failure to comply will result in disqualification of proposal submitted; Proposer has not divulged,discussed, or compared the proposal with other Proposals and has not colluded with any other proposer or party to any other proposal; proposer acknowledges that all information contained herein is part of the public domain as defined by the State of Florida Sunshine and Public Records Laws; all responses, data and information contained in this proposal, inclusive of the Statement of Qualifications Certification,Questionnaire and Requirements Affidavit are true and accurate. Name of Proposer's Authorized Representative: Title of Proposer's Authorized Representative: Signature of Proposer's Authorized Representative: Date: • State of FLORIDA ) On this_day of ,20_,personally appeared before me who County of ) stated that (s)he is the of , a corporation, and that the instrument was signed in behalf of the said corporation by authority of its board of directors and acknowledged said instrument to be its voluntary act and deed. Before me: Notary Public for the State of Florida My Commission Expires: . • Balance of Page Intentionally Left Blank 25 RFP 2019-092-JC APPENDIX B M I Ami BEAc H 2 " No Bid " Form RFP 2019.092-JC Auditing Services PROCUREMENT DEPARTMENT 1755 Meridian Avenue, 3rd Floor Miami Beach, Florida 33139 Note: It is important for those vendors who have received notification of this solidtation but have decided not to respond,`to complete and submit the attached "Statement of No Bid." The "Statement of No- Bid" provides the City- with information on how to improve the solicitation process.. Failure to submit a "Statement of No Bid" may result in not being notified of future solicitations by the City.. 26 RFP 2019-092-IC Statement of No Bid WE HAVE ELECTED NOT TO SUBMIT A PROPOSAL AT THIS TIME FOR REASON(S) CHECKED AND/OR INDICATED BELOW: _Workload does not allow us to proposal _Insufficient time to respond Specifications unclear or too restrictive _ Unable to meet specifications _Unable to meet service requirements Unable to meet insurance requirements _Do not offer this product/service _OTHER. (Please specify) We do_do.not_want to be retained on your mailing list for future proposals of this type product and/or service. Signature: Title: Legal Company Name: Note: Failure to respond, either by submitting a proposal or this completed form, may result in your company being removed from our vendors list. PLEASE RETURN TO: CITY OF,MIAMI BEACH PROCUREMENT DEPARTMENT ATTN: Jason Crouch RFP #2019-092-JC, Auditing Services 1755 MERIDIAN AVENUE, 3rd FLOOR MIAMI BEACH, FL 33139 27 RFP 2019-092-JC APPENDIX C t'^ B�k, { ,. ,r'vP ee ;. a ScopéofWork RFP 2019-092-JC Auditing Services PROCUREMENT DEPARTMENT 1755 Meridian Avenue, 3rd Floor Miami Beach, Florida 33139 28 RFP 2019-092-JC Cl.Statement of Work Required. The City of Miami Beach (the City) is required to have an annual audit in accordance with Fla. Statutes 218.39 performed on the City's Comprehensive Annual Financial Report(CAFR). Other audits are required to be performed in accordance with the U.S. Office of Management and Budget (OMB) Circulars, Bonded Debt Covenants, Performance Management and/ or Grant Agreements. Each audit herein must be conducted by an independent audit firm. Pursuant to the above requirements,the City is required to procure auditing services to examine the City's Basic.Financial Statements included in the City's Comprehensive Annual Financial Report(CAFR), Federal grant programs and State projects (OMB Uniform Guidance /—A-133Single Audit), the Miami Beach Redevelopment Agency's (RDA) financial statements, the Parking Systems Fund's (PSF) financial statement,the Miami Beach Visitor and Convention Authority's(VCA)financial statement,the Miami Beach Convention Center (MBCC), as managed by Global Spectrum (GS), financial statements, the Safe Neighborhood Parks and Bond Program (SNP), Children Trust (CT) and Building Better Communities (BBC). Scope. There are ten (10) services which are required as part of the required auditing services. All ten (10) categories of audit services below must be included in the firm's proposed approach and methodology. At a minimum,the scope of services includes,but is not limited to,the following: 1. CAFR—The auditor will prepare and issue an auditor's opinion and conduct an audit of the City's CAFR in accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained.in Government Auditing Standards, issued by the.Controller General of the United States. The.examination must be made in accordance with the guidelines prepared by the Governmental Finance Officers Association (GFOA) in order for the City to apply for the Certificate of Achievement for Excellence in Financial Reporting. On an annual basis, the City will prepare the CAFR for auditing.The auditors will provide guidance with the implementation of Governmental Accounting Standard Board(GASB)statements as necessary. The audit firm shall issue an audit opinion to the City no later than March 25th of the following year. 2. OMB Uniform Guidance- Single Audits-The auditor must perform an audit in accordance with auditing standards generally accepted in the United States of America;the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Uniform Guidance (and/or OMB Circular A-133, Audits of States, Local Governments, and.Non-Profit Organizations). The auditor must issue an Independent Auditors' Report on Internal Control over Financial.Reporting and on Compliance, Independent Auditors' Report on Compliance and Internal Control over Compliance Applicable to Each Major Federal Program and State Project,and Schedule of Findings and Questioned Costs. The City will prepare the Schedule of Expenditure of Federal Awards and State Financial Assistance. The audit firm shall issue the single audit report and data collections form to the City no later than April 30th of the following year. 29 RFP 2019-092-IC • 3. Management Letter in Accordance with the Rules of the Auditor General of the State of Florida-The auditor firm shall issue a management letter to the City no later than April 30th of the following fiscal year. 4. RDA—The City issues stand-alone basic financial statements for the RDA, a blended component unit of the City.The auditor will prepare and issue an auditor's opinion and conduct an audit of the RDA basic financial statements in accordance with Generally Accepted Auditing Standards(GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Controller General of the United States. The financial statements,footnotes and schedules are to be prepared by the auditor.The audit firm shall issue the RDA basic financial statements to the City no later than April 30th of the following fiscal year. 5. PSF—The City issues stand-alone financial statements for the PSF,a major enterprise fund of the City:The auditor will prepare and issue an auditor's opinion and conduct an audit of the PSF financial statements in accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Controller General of the United States. 'The financial statements,footnotes and schedules are to be prepared by the auditor.The audit firm shall issue the PSF basic financial statements to the City no later than May 30th of the following fiscal year. . 6. VCA—The City issues stand-alone basic financial statements for the VCA, a discretely presented component unit of the City.The auditor will prepare and issue an auditor's opinion and conduct an audit.of the VCA financial statements in accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Controller General of the United States. The financial statements,footnotes and schedules are to be prepared by the auditor.The audit firm shall issue the VCA basic-financial statements to the City no later than December 30th of the following fiscal year. 7. GS — The City issues special purpose financial statements for assets, liabilities, revenues, and expenses of the Miami Beach Convention Center and Jackie Gleason Theater of the Performing Arts, as managed by GS. The auditor will prepare and issue an auditor's opinion and conduct an audit of the GS assets, liabilities, revenues and expenses in accordance with Generally Accepted Auditing Standards (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Controller General of the United States. The financial statements,footnotes and schedules are to be prepared by the auditor.The audit firm shall issue the SMG special purpose financial statements to the City no later than December 30th of the following fiscal year. 8. SNP — The SNP governing Miami-Dade County ordinance No. 96-115 requires that an annual independent audit of all bond funds be conducted. The auditor will conduct an audit in compliance with the grant agreement, SNP ordinance No. 96-115, applicable resolution and the SNP Administrative Rules. 30 RFP 2019-0921C The audit report, notes and schedules are to be prepared by the auditor.The audit firm shall issue the SNB to the City no later than December 30th of the following fiscal year. 9. CT—The City receives funds from the Children's Trust Fund Program and the Children's Trust requires an audit in accordance with the Children's Trust Contractual Agreements,AU-C 935 and Statement on Auditing Standards No. 117. The audit report, notes and schedules are to be prepared by the auditor.The audit firm shall issue the CT to the City no later than December 30th of the following fiscal year. 10. BBC—The City receives funds from Miami-Dade County for the Building Better Communities Bond Project and the Building Better Communities Bond Project requires an audit in accordance with Miami-Dade County Ordinance 05-47, applicable resolutions, and Building Better Communities Administration Rule. The audit report, notes and schedules are to be prepared by the auditor. The audit firm shall issue the SNB to the City no later than December 30th of the following fiscal year. 11. The City desires to maintain and improve the level of training of its personnel assigned to the internal audit function and in accounting positions.The proposal should indicate if the firm conducts any training for its employees and if City personnel could attend such training. 12. The external auditor shall provide no less than two (2) senior members during the entire audit process. Other: In the event that, during the Term of the Agreement, the City, inits sole discretion and judgment, determines that there is a need for additional services not contemplated within the Agreement, such services will be performed at the'hourly billing rates set forth in the agreement. Balance of Page Intentionally Left Blank 31 RFP 2019-092-JC APPENDIX D Special Conditions RFP 2019-092-JC Auditing Services PROCUREMENT DEPARTMENT 1755 Meridian Avenue, 3rd Floor Miami Beach, Florida 33139 32 RFP 2019-092-JC 1. TERM OF CONTRACT. The contract term shall commence upon execution of this Agreement by all parties hereto,for a period of five(5)years. 2. OPTIONS TO RENEW. The City, through its City Manager, will have the option to extend the agreement for three (3)additional one(1)years period. 3. REQUIRED LICENSES/CERTIFICATIONS. The selected firm shall be required to maintain, prior to award and throughout the life of the contract,all licenses and certifications to practice in the State of Florida. If required by the City, any license or certification shall be submitted within three (3)days of request. Balance of Page Intentionally Left Blank 33 RFP 2019-092-JC APPENDIX E o ` r Cost PForm ) . RFP 2019-092-JC Auditing Services PROCUREMENT DEPARTMENT 1755 Meridian Avenue, 3rd Floor Miami Beach, Florida 33139 34 RFP 2019-092-IC APPENDIX E COST PROPOSAL FORM Failure to submit, Cost Proposal Form, in its entirety and fully executed by the deadline established for the receipt of proposals will result in proposal being deemed non-responsive and being rejected. Bidder affirms plat the prices stated on the cost proposal form below represents the entire cost of the items in full accordance with the requirements of this RFP, inclusive of its terms, conditions, specifications and other requirements stated herein, and that no claim will be made on account of any increase in wage'scales, material prices,delivery delays,taxes, insurance, cost indexes or any other unless a cost escalation, provision is allowed herein and has been exercised by the City Manager in advance. The Cost Proposal Form shall be completed mechanically or, if manually, in ink. Cost Proposal Form completed in pencil shall be deemed non-responsive.All corrections on the Cost Proposal Form shall be initialed. Auditing Services Please provide annual auditing fee for each of the audit categories and years listed herein: 2019 2020 2021 2022 2023 1 Audit of City's Basic Financial Statement (CAFR) 2 / OMB Uniform Guidance/A-133 Single Audits 3 Management Letter in Accordance with the Rules of the Auditor General of the State of Florida 4 Miami Beach Redevelopment Agency(RDA) J 5 Miami Beach Parking Systems Funds(PSF) 6 Miami Beach Visitor and Convention Authority (VCA) Miami Beach Convention Center as Managed 7 by Global Spectrum (GS) 8 Safe Neighborhood Parks Single Audit(SNP), 9 Children's Trust(CT) 10 Building Better Communities(BBC) TOTAL OF(LINES 1-10)FOR EACH RESPECTIVE YEAR $ $ $ $ $ 35 RFP 2019-092-JC GRAND TOTAL COST:YEARS 2019-2023 $ Please complete Bidder's Affirmation below. Failure to do so will result in proposal being deemed non-responsive and rejected. Bidder's Affirmation Company: Authorized Representative: Address: Telephone: Email: Authorized Representative's Signature: Balance of Page Intentionally Left Blank r 36 RFP 2019-0921C APPENDIX F AA Ik101 EAC Insurance Requirements RFP 2019-092-JC Auditing Services PROCUREMENT DEPARTMENT 1755 Meridian Avenue, 3rd Floor Miami Beach, Florida 33139 37 RFP 2019-092-JC MIAMI BEACH INSURANCE REQUIREMENTS This document sets forth the minimum levels of insurance that the contractor is required to maintain throughout the term of the contract and any renewal periods. XXX 1. Workers'Compensation and Employer's Liability per the Statutory limits of the state of Florida. XXX 2. Comprehensive General Liability (occurrence form),,limits of liability$ 1,000,000.00 per occurrence for bodily injury property damage to include Premises/ Operations; Products, Completed Operations and Contractual Liability. Contractual Liability and Contractual Indemnity (Hold harmless endorsement exactly as written in"insurance requirements"of specifications). XXX 3. Automobile Liability-$1,000,000 each occurrence-owned/non-owned/hired automobiles included. 4. Excess Liability-$ .00 per occurrence to follow the primary coverages. XXX 5. The City must be named as and additional insured on the liability policies; and it must be stated on the certificate. 6. Other Insurance as indicated: Builders Risk completed value $ .00 Liquor Liability $ .00 Fire Legal Liability $ ' .00 Protection and Indemnity $ :00 Employee Dishonesty Bond $ .00 Other '$ .00 XXX 7. Thirty(30)days written cancellation notice required. XXX 8. Best's guide rating B+:VI or better, latest edition. XXX 9. The certificate must state the proposal number and title The City of Miami Beach is self-insured.Any and all claim payments made from self-insurance are subject to the limits and provisions of Florida Statute 768.28, the Florida Constitution, and any other applicable Statutes. 38 RFP 2019-092-JC ATTACHMENT C CONSULTANTS RESPONSE TO THE (RFP) II N. RSM July 30, 2019 RSM US LLP 801 Brickell Avenue, Suite 1050 Miami, FL 33131 Jimmy L. Morales,City Manager 0 305.442.8801 City of Miami Beach,Florida F 305.442.7478 1700 Convention Center Drive,4th Floor www.rsmus.com Miami Beach, Florida 33139 Attention: Mr.Morales The Objective and Scope of the Audit of the Financial Statements You have requested that we audit the City of Miami Beach, Florida's (the City) governmental activities, business-type activities, aggregate discretely presented component units, each major fund, and the aggregate remaining fund information as of and for the year ending September 30, 2019, which collectively comprise the basic financial statements. Our audit will include the general fund and you acknowledge that we are the group auditor of the City's basic financial statements as of-and for the year ending September 30,20.19. We will not audit the financial statements of the City of.Miami Beach Florida Employees' Retirement Plan and the City Pension Fund for Firefighters and Police Officers. Those financial statements will be audited by component auditors. Management is, responsible for the preparation of the required supplementary information (RSI) and supplementary information presented in relation to the financial statements as a whole in accordance with accounting principles generally accepted in the United States of America. We are pleased to confirm our acceptance and our understanding of this audit engagement by means of this letter. Our acceptance of this engagement is subject to our satisfactorily completing our normal engagement acceptance procedures, including inquiry of your previous auditors, adverse data searches and background checks. We will notify you promptly ,if we become aware of anything during our acceptance procedures that results in our not being able to'continue this engagement. Our audit will be conducted with the objective of our expressing an opinion on the financial statements. We will also perform, the audit of the City as of September 30, 2019 so as to satisfy the audit requirements imposed by the Single Audit Act and Subpart F of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards(Uniform Guidance). The Responsibilities of the Auditor We will conduct our audit in accordance with auditing standards generally accepted.in the United States • of America (GAAS); Government Auditing Standards issued by the Comptroller General of the United States (GAS); the provisions of the Single Audit Act; Subpart F of Title 2 U.S. CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; and the U.S. Office of Management and Budget's (OMB) Compliance Supplement and guidance provided in the audit guides titled State and Local Governments and Government Auditing Standards and Single Audits issued by the American Institute of Certified Public Accountants (AICPA). Those standards, regulations, supplements or guides require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.The THE POWER OF BEING UNDERSTOOD AUDIT I TAXI CONSULTING RSM US LLP is the US. rb of RSM tntenuticn;d,J GfOtJilk-i'NUrk at ndcpctdent,krait.Oh.lad,rm.ittog Pt Ills Usit rums ton/mUootu.I,It mote rotor ratio}fw.Frrrdin,RSM US IIP and `/ RSM (y n,t irn..d Q r,.� D Jimmy Morales,City Manager City of Miami Beach, Florida July 30, 2019 Page 2 procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of thefinancial statements,whether due to fraud or error.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. Because of the inherent limitations of an audit,together with the inherent limitations of internal control, an unavoidable risk that some material misstatements may not be detected exists, even though the audit is properly planned and performed in accordance with GAAS.Also, an audit is not designed to detect errors or fraud that are immaterial to the financial statements. The determination of abuse is subjective; therefore, GAS does not expect us to provide reasonable assurance of detecting abuse. In making our risk assessments, we consider internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. However,we will communicate to you in writing concerning any significant deficiencies or material weaknesses in internal control relevant to the audit of the financial statements that we have identified during the audit. We will also communicate to the.Audit Committee (a) any fraud involving senior management and fraud (whether caused by senior management or other employees) that causes a material misstatement of the financial statements that becomes known to us during the audit, and (b) any instances,of noncompliance with laws and regulations that we become aware of during the audit (unless they are clearly inconsequential). The funds that you have told us are maintained by the City and that are to be included as part of our audit. are listed here: Governmental Funds • General • Resort Tax • Miami Beach Redevelopment Agency • Capital Projects • Nonmajor Governmental Funds Proprietary Funds • Storm Water Utility Fund • Water and Sewer Fund • Parking System Fund • Convention Center Complex Fund • Nonmajor Enterprise Funds Fiduciary Funds • Trust Funds • Agency Funds The component units whose financial statements you have told us are to be included as part of the City's basic financial statements are listed here: Blended Component Units • Miami Beach Redevelopment Agency • Normandy Shores Local Government Neighborhood Improvement District Jimmy Morales,City Manager City of Miami Beach,Florida July 30,2019 Page 3 Discretely Presented Component Units—Governmental Type Funds • Miami Beach Health Facilities Authority • Miami Beach Visitor and Convention Authority The federal financial assistance programs and awards that you have told us that the City participates in and that are to be included as part of the single audit are the grants consistent with the grants reported in the City's 2018 single audit report. We are responsible for the compliance audit of major programs under the Uniform Guidance, including the determination of major programs, the consideration of internal control over compliance, and reporting responsibilities. Our reports on internal control will include any significant deficiencies and material weaknesses in controls of which we become aware as a result of obtaining an understanding of internal control and performing tests of internal control consistent with requirements of the standards and regulations identified above. Our reports on compliance matters will address material errors, fraud, abuse, violations of compliance obligations, and other responsibilities imposed by state and federal statutes and regulations or assumed by contracts; and any state or federal grant, entitlement or loan program questioned costs of which we become aware, consistent with requirements of the standards and regulations identified above. The Responsibilities of Management and Identification of the Applicable Financial Reporting Framework Our audit will be conducted on the basis that management,and, when appropriate, those charged with governance acknowledge and understand that they have responsibility: 1. For the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted insthe United States of America; 2. To evaluate subsequent events through the date the financial statements are issued or available to be issued, and to disclose the date through which subsequent events were evaluated in the financial statements. Management also agrees that it will not conclude on subsequent events earlier than the date of the management representation letter referred to below; 3. For the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; 4. For establishing and maintaining effective internal control over financial reporting, and for informing us of all significant deficiencies and material weaknesses in the design or operation of such controls of which it has knowledge; 5. For (a) making us aware of significant vendor relationships where the vendor is responsible for program compliance, (b) following up and taking corrective action on audit findings, including the preparation of a summary schedule of prior audit findings and corrective action plan, and (c) report distribution, including submitting the reporting packages;and 6. To provide us with: a. Access to all information of which management is aware that is relevant to the preparation and fair presentation of the financial statements such as records, documentation and other matters; l 31� Jimmy Morales, City Manager City of Miami Beach, Florida July 30,2019 Page 4 b. Additional information that we may request from management for the purpose of the audit;and c. Unrestricted access to persons within the entity from whom we determine it necessary to obtain audit evidence; d. When applicable, a summary schedule of poor audit findings for inclusion in the single audit reporting package;and e. If applicable, responses to any findings reported on the schedule of findings and questioned costs. As part of our audit process, we will request from management and, when appropriate, those charged with governance written confirmation concerning representations made to us in connection with the audit, including among other items: 1. That management has fulfilled its responsibilities as set out in the terms of this letter;and 2. That it believes the effects of any uncorrected misstatements aggregated by us during the current engagementand pertaining to the latest period presented are immaterial, both individually and in the aggregate,to the financial statements taken as a whole. Management is responsible for identifying and ensuring that the City complies with the laws and regulations applicable to its activities, and for informing us about all known material violations of such laws or regulations. In addition, management is responsible for the design and implementation of programs and controls to prevent and detectfraud or abuse, and for informing,us about all known-or suspected fraud or abuse affecting the City involving management, employees who have significant roles in internal control, and others where the fraud or abuse could have a material effect on the financial statements or compliance. Management is also responsible for informing us of its knowledge of any allegations of fraud or abuse, or suspected fraud or abuse, affecting the entity received in communications from employees,former employees, analysts, regulators or others. Management is responsible for the preparation of the required supplementary information and supplementary information in accordance with accounting principles generally accepted in the United States of America. Management agrees to include the auditor's report on the required supplementary , information and supplementary information inany document that contains the required supplementary information or supplementary information and indicates that the auditor has reported on such required supplementary information or supplementary information: Management also agrees to present the required supplementary information or supplementary information with the audited financial statements or, if the required supplementary information or supplementary information will not be presented with the audited financial statements, to make the audited financial statements readily available to the intended users of the required supplementary information or supplementary information no later than the date of issuance of the required supplementary information or supplementary information and the auditor's report thereon. Because the audit will be performed in accordance with the Single Audit Act and the Uniform Guidance, management is responsible for(a)identifying all federal awards received and expended; (b) preparing the schedule of expenditures of federal awards (including ,notes and noncash assistance received) in accordance with Uniform Guidance requirements; (c) internal control over compliance; (d) compliance with federal statutes, regulations, and the terms and conditions of federal awards; (e) making us aware of significant vendor relationships where the vendor is responsible for program compliance; (f)following up and taking corrective action on audit findings, including the preparation of a summary schedule of prior 44) Jimmy Morales, City Manager City of Miami Beach, Florida July 30,2019 Page 5 audit findings and a corrective action plan; and (g) submitting the reporting package and data collection form. The Audit Committee is responsible for informing us of its views about the risks of fraud or abuse within the City,and its knowledge of any fraud or abuse or suspected fraud or abuse affecting the City. You have informed us that you may issue public debt in the future and that you may include our report on your financial statements in the offering statement. You have further informed us that you do not intend for us to be associated with the proposed offering. We agree that our association with any proposed offering is not necessary, providing the City agrees to clearly indicate that we are not associated with the contents of any such official statement or memorandum. The City agrees that the following disclosure will be prominently displayed in any such official statement or memorandum: RSM US LLP, our independent auditor, has not been engaged to perform, and has not performed, since the date of its report included herein, any procedures on the financial statements addressed in that report. RSM US LLP also has not performed any procedures relating to this(official statement](memorandum].] Records and Assistance If circumstances arise relating to the condition of the City's records, the availability of appropriate audit evidence or indications of a significant risk of material misstatement of the financial statements because of error, fraudulent financial reporting or misappropriation of assets which, in our professional judgment, prevent us from completing the audit or forming an opinion, we retain the unilateral right to take any course of action permitted by professional standards, including declining to express an opinion or issue a report, or withdrawing from the engagement. During the course of our engagement, we may accumulate records containing data that should be reflected in the City's books and records. The City will determine that all such data, if necessary, will be so reflected.Accordingly,the City will not expect us to maintain copies of such records in our possession The assistance to be supplied by City's personnel, including the preparation of schedules and analyses of accounts, has been discussed and coordinated with Allison Williams, Deputy Finance Director.The timely and accurate completion of this work is an essential condition to our completion of the audit and issuance of our audit report. GAS further requires that we establish an understanding with City's management and those charged with governance of the objectives of the non-audit services, the services to be performed, the City's acceptance of its responsibilities, the auditor's responsibilities and any limitations of the non-audit services.We believe this letter documents that understanding. Other Relevant Information RSM US LLP may mention the City's name and provide a general description of the engagement in RSM US LLP's client lists and marketing materials. From time to time and depending upon the circumstances, we may use third-party service providers to assist'us in providing professional services to you. In such circumstances, it may be necessary for us to disclose confidential client information to them. We enter into confidentiality agreements with all third- party service providers and we are satisfied that they have appropriate procedures in place to prevent the unauthorized release of your confidential information to others. In addition, we may utilize financial - information you have provided to us in connection with this engagement for purposes of creating (\itt 61� Jimmy Morales, City Manager City of Miami Beach,Florida July 30, 2019 • Page 6 benchmarking data to be used by RSM US LLP professionals and other clients. This benchmarking data is aggregated with data from a minimum of five other entities so that users of the data are unable to associate the data with any single entity in the database. In accordance with GAS,a copy of our most recent peer review report was provided in our proposal. Our professional standards require that we perform certain additional procedures, on current and previous years' engagements, whenever a partner or professional employee leaves the firm and is subsequently employed by or associated with a client in a key position.Accordingly,the City agrees it will compensate RSM US LLP for any additional costs incurred as a result of the City's employment of a partner or professional employee of RSM US LLP. The audit documentation for this engagement is the property of RSM Us LLP and constitutes confidential information. Review of audit documentation by a successor auditor or as part of due diligence will be agreed to, accounted for and billed separately. In the event we are requested or authorized by the City or are required by government regulation, subpoena or other legal process to produce our documents or our personnel as witnesses with respect to our engagement for the City, the City will, so long as we are not a party to the proceeding in which the information is sought, reimburse us for our professional time and expenses, as well as the fees and expenses of our counsel, incurred in responding to such requests. The documentation for this engagement is the property of RSM US LLP. However, you acknowledge and grant your assent that representatives of the cognizant or oversight agency or their designee, other government audit staffs, and the U.S. Government Accountability Office shall have access to the audit documentation upon their request and that we shall maintain the audit documentation for a period of at least three years after the date of the report, or for a longer period if we: are requested to do so by the cognizant or oversight agency.Access to requested documentation will'be provided under the supervision of RSM US LLP audit personnel and at a location designated by our firm. Information Security Miscellaneous Terms RSM US LLP is committed to the safe and confidential treatment of the City's'proprietary information. RSM US LLP is required to maintain the confidential treatment of client information in accordance with relevant industry professional standards which govern the provision of services described herein. The City agrees that it will not provide RSM US LLP with any unencrypted electronic confidential or proprietary information, and the parties agree to utilize commercially reasonable measures to maintain the confidentiality of the City's information, including the use of collaborate sites to ensure the safe transfer of data between the parties. RSM US LLP may terminate this relationship immediately in its sole discretion if RSM US LLP determines that continued performance would result in a violation of law, regulatory requirements, applicable professional standards or RSM US LLP's client acceptance or retention standards, or if the City is placed on a verified sanctioned entity list or if any director or executive of, or other person closely associated with,the City or its affiliates is placed on a verified sanctioned person list, in each case, including but not limited to lists promulgated by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. State Department, the United Nations Security Council, the European Union or any other relevant sanctioning authority. If any term or provision of this arrangement letter is determined to be invalid or unenforceable, such term or provision will be deemed stricken and all other terms and provisions will remain in full force and effect. U�g cri/ Jimmy Morales, City Manager City of Miami Beach,Florida July 30,2019 Page 7 Reporting We will issue a written report upon completion of our audit of the City's financial statements. Our report will be addressed to the Audit Committee of the City. We cannot provide assurance that an unmodified opinion will be expressed. Circumstances may arise in which it is necessary for us to modify our opinion, add an emphasis-of-matter or other-matter paragraph(s), or withdraw from the engagement. In addition to our report on the City's financial statements,we will also issue the following types of reports: 1. A report on the fairness of the presentation of the City's schedule of expenditures of federal awards for the year ending September 30,2019; 2. Reports on internal control related to the financial statements and major programs.These reports will describe the scope of testing of internal control and the results of our tests of internal control; 3. Reports on compliance with laws, regulations, and the provisions of contracts or grant agreements. We will report on any noncompliance that could have a material effect on the financial statements and any noncompliance that could have a material effect, as defined by Subpart F of Title 2 U.S. CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,on each major program;. 4. An accompanying schedule of findings and questioned costs; 5. A management letter in accordance with the Rules of the Auditor General of the State of Florida; 6. Audit report for Miami Beach Redevelopment Agency(RDA) 7. Audit report for Miami Beach Parking Systems Funds(PSF) 8. Audit report for Miami Beach Visitor and Convention Authority(VCA) 9. Audit report for Miami Beach Convention Center as Managed by Global Spectrum (GS) 10. Program specific audit report for Safe Neighborhood Parks(SNP) 11, Audit report on Children's Trust(CT) 12. Audit report on Building Better Communities(BBC) This letter constitutes the complete and exclusive statement of agreement between RSM US LLP and the City, superseding all proposals, oral or written, and all other communications with respect to the terms of the engagement between the parties. Jimmy Morales, City Manager City of Miami Beach, Florida July 30,2019 Page 8 Electronic Signatures and Counterparts Each party hereto agrees'that any electronic signature of a party to this agreement or any electronic signature to a document contemplated hereby (including any representation letter) is intended to authenticate such writing and shall be as valid, and have the same force and effect, as a manual signature. Any such electronically signed document shall be deemed (i) to'be "written" or"in writing," (ii) to have been signed and (iii)to constitute a record established andmaintained in the ordinary course of business and an original written record when printed from electronic files. Each party hereto also agrees that electronic delivery of a signature to any such document(via email or otherwise) shall be as effective as manual delivery of a manual signature. For purposes hereof, "electronic signature" includes, but is not limited to, (i) a scanned copy (as a'"pdf' (portable document format) or other replicating image) of a manual ink signature, (ii) an electronic copy of a traditional signature affixed to a document, (iii) a signature incorporated into a document utilizing touchscreen capabilities or (iv) a digital signature. This agreement may be executed in one or more counterparts, each of which shall be considered an original instrument, but all of which shall be considered one and the same agreement. Paper copies or"printouts," of such documents if introduced as evidence in anyjudicial, arbitral, mediation or administrative proceeding, will be admissible as between the parties to the same extent and under the same conditions as other original business records created and maintained in documentary form. Neither party shall contest the admissibility of true and accurate copies of electronically signed documents on the basis of the best evidence rule or as not satisfying the business records exception to the hearsay rule. Please sign and return a copy of this letter to indicate your acknowledgment of, and agreement with, the arrangements for our audit of the financial statements, including our respective responsibilities. RSM US LLP Brett Friedman Partner Confir led on behalf of►(/ity of Miami Beach, Florida: \ice law Fl Jimmy' Morale- City Manager Date sunbiz.org-Florida Department of State Page 1 of 2 Florida Deoartment of State DIVISION OF CORPORATIONS Di i.5_fon 1 4-4 'Art rr A jai r'r i rirfr1Cit"r cl on tlifid ai L1 a- of akridf3 Previous on List Next on List Return to List Filing History No Authority Info No Partner Info Name History Partnership Name Search Submit Partnership Detail Limited Liability Partnership Name RSM US LLP Principal Address ONE SOUTH WACKER DRIVE SUITE 800 CHICAGO,IL 60606 Change Date:04/24/2013 Filing Information Document Number LLP950001055 FEI/EIN Number > 420714325 File Date 02/06/1996 State IA Total Pages aiJo 146 Pages in Original Filing 54 Florida Partners 6 Total Partners 371 Status ACTIVE Effective Date NONE Expiration Date NONE Name History, 0002 Mailing Address RSM US LLP 801 NICOLLET MALL SUITE 1100 MINNEAPOLIS, MN 554022526 Change Date:04/24/2013 Registered Agent CORPORATION SERVICE COMPANY 1201 HAYS STREET TALLAHASSEE,FL 32301 Document Images 11/29/1995--LLP View image in PDF format 03/23/2018--LLP Business Report View image in PDF format http://dos.sunbiz.org/scripts/gendet.exe?action=DETGENINAME&web_dir %20&web_... 04/24/2019 sunbiz.org-Florida Department of State Page 2 of 2 04//11/2017--LLP Business Report View image in PDF format 04/15/2016--LLP Business Report ' View image in PDF format 08/04/2015--Partnership Name Chance View image in PDF format 03/23/2015--LLP Business Report View image in PDF format 04/01/2014—LLP Business Report View image in PDF format 04/24/2013--LLP Business Report View image in PDF format 04/27/2012—LLP Business Report View image in PDF format • 03/28/2012--Partnership Name Chance View image in PDF format 05/08/2012-- View image in PDF format 03/08/2011 --LLP Business Report View image in PDF format 03/30/2010--LLP Business Report View image in PDF format 04/09/2009--LLP Business Report View image in PDF format 03/25/2008—UNIFORM BUS REP View image in PDF format 03/30/2007--UNIFORM BUS REP View image in PDF format 03/28/2006--UNIFORM BUS REP View image in PDF format 02/01/2005--UNIFORM BUS REP View image in PDF format 03/03/2004--UNIFORM BUS REP View image in PDF format 03/05/2003--UNIFORM BUS REP View image in PDF format 03/14/2002—UNIFORM BUS REP View image in PDF format 03/09/2001--UNIFORM BUS REP View image in PDF format 04/20/2000--UNIFORM BUS REP View image in PDF format 01/27/1999—LLP Renewal View image in PDF format 02/06/1998--LLP Renewal 'View image in PDF format 01/28/1997--LLP Renewal View image in PDF format Previous on List . Next on List Return to List . Filing History . No Authority Info No Partner Info Name History !Partnership Name Search I Submit Florida Department of State,Division of Corporations • http://dos.sunbiz.org/scripts/gendet.exe?action=DETGEMNAME&web_dh=%20&web_... 04/24/2019 . . _ . . • • - , . , . . . ... . . . . ti" , -%, :.--- - . . . • , . q ?.4 ,,f: :1„,,,, ', .„1,,,,- • . .' • - - ' --' ' 3 'j ..-'4,,,,i4.,,.. AVI, ft.,',',.i.',"2..'.1;%;.,t;"4 . . . • - e e ..`". 1111H111111111 IMMIEHIHRHIMEIHRUHM , -rarriTTT1. 171'1--, • . 1.:. 1,-1--:', ''1'*".44.'''- . * 1 f -.:''' )/ "." •-". 'f..",.-..... ,, •.4„ .—e , 1 - e ' — " '" •'..•t''' ,I1 ' / -.. ,,, ' • .17/7-1-7, ..- .t. , ' .• ., Rto- .. • . ".,. ').1. ., , , „,, „ , ..,. .... . .'. .., ED . ._ ._.... . . • „, , ....-- ' • , , ., . „ri--,.., . 01.0,1Hoo.,• '..' - ” .•: ,.. ei.,,. ,.., ‘• .. .0,i \ , \ - "'•... ..., .- - ,• - ..-,....,„, , ,. , , . , .,,, .,:. . in , • . . . \ . n ,.... • -, .. . . • . ,, , . , ... , , . . ....,, . • . , / Work with1a financial advisor : Who thinks like a governmental entity . i PROPOSAL TO PROVIDE AUDITING SERVICES ., City of Miami Beach, Florida RFP Number: 2019-092-JC , April 8, 20,19 II - •THE POWER OF BEING UNDERSTOOD AUDIT I TAX I CONSULTING • Tab 1 — Cover letter & proposal certification and requirements affidavit (Appendix A) 1.1 COVER LETTER AND TABLE OF CONTENTS Located on the following pages are our cover letter and table of contents. Page 1 I - • • • RSM April 8; 2019 RSM US LLP 801 Brickell Avenue,Suite 1050 • Jason Crouch Miami, FL 33131 Procurement Contracting Officer O 305.442.8801 Cityof Miami Beach F 305.442.7478 www.rsmus.com 1755 Meridian Avenue, 3rd Fl, . • Miami Beach, FL 33139 Dear members of the Audit Committee: RSM US LLP(RSM)appreciates the opportunity to offer to provide professional auditing services to the City of Miami Beach, Florida(the City). We are excited about the opportunity to present our qualifications for your consideration to serve as the auditors for the City once again. We believe we can offer the City a unique.combination of highly experienced personnel, including experience working with the largest governments in South Florida together with a holistic approach that looks to add value beyond the audit. We believe that our approach to the audit and our experience is unmatched by any of our competitors. Unparalleled Experience, Our experience working with governments in Florida is unparalleled by our competitors. We have.the honor of currently serving, or having previously served as the auditors for some of the most prominent government entities in South Florida, including: ❖ City of Miami Beach ❖ Palm.Beach County ❖ City of Miami + Miami-Dade County ❖ City of Coral Gables ❖ Broward County ❖ City of West Palm Beach ❖ Miami-Dade School Board ❖ South Florida Water Management District ❖ Broward County School Board ❖ School.District of Palm Beach County Working with many similar large governments will allow us to bring that experience, expertise and best practices to the City's audit to drive a smooth and efficient audit process. Deep Understanding of the City • Having previously served the City as your auditors for 10 years,we have a thorough knowledge and understanding of your culture,and how you operate. This will let us hit the ground running and provide a smooth transition without a learning curve. • • Based in part on.our past experience with the City and our extensive experience working with governments,we are currently engaged to perform an important city-wide fraud risk assessment.This will provide us with additional knowledge and insights of the City,which will further drive the smooth transition. THE POWER OF BEING UNDERSTOOD AUDIT I TAXI CONSULTING Page 2 RSM US LLP is the U.S.menber firm of RSM International,a gtobal network of independent audit,tax,and consulting firms.Visit rsmus.rpm/aboutus for ware reformation regarding RSM US LLP and RSM International 1 Value-Added Approach We look "beyond the numbers" to try and identify insights that add value to your organization. Our team includes a unique array of specialists who add value including construction cost specialists, cybersecurity specialists, actuaries and tax specialists. As your auditors, we will provide the following value-added services at the request of the City, at no charge: 1) we would like to help the City find potential opportunities for cost savings. We would perform a high level spend analysis of the City's procurement practices. Such analysis could include the assessment of decentralized purchasing and the advantage of improper volume discounts. For one of our municipal clients such an analysis identified over$30 million in potential savings; 2) as your auditors, we will have RSM's security, privacy and risk professionals perform high-level penetration testing to demonstrate how a malicious actor might breach the City, helping you to prevent such an occurrence. Penetration tests offer close to real-life examples of an attacker could target your organization; and 3) given the importance of development within the City including the new convention center hotel,we will provide some construction cost recovery review services. As part of the audit,we will perform a high- level review of the construction costs from your most significant projects to look for potential areas of overbilling. As an example, by focusing on the rates and charges for one of our clients, we identified more than $4 million in costs that should not t have been passed on to our client, which theclient was able to try and recoup from the contractor. Our strongest statement about what differentiates RSM from the other firms comes directly from the clients we serve and the partnerships we forge with them. Our client-centric service philosophy along with our professionalism, reliability and commitment to timeliness has resulted in highly satisfied clients. Once you have hadthe opportunity to review this response, we would be pleased to discuss your needs in greater detail or make""a presentation to your committee. In the meantime, please feel free to contact us with any questions.We look forward to your favorable consideration. Respectfully, -4 11)3111 Brett Friedman Robert R. Feldmann Partner Partner brett.friedman@rsmus.com bob.feldmann@rsmus.com 954 356 5721 305 569 7954 Page 3 TABLE OF CONTENTS TAB 1 –COVER LETTER & PROPOSAL CERTIFICATION AND REQUIREMENTS AFFIDAVIT (APPENDIX A) 1 1.1 Cover letter and table of contents 1 1.2 Proposal certification questionnaire & requirements affidavit 4 1.3 Organizational chart 13 TAB 2– EXPERIENCE & QUALIFICATIONS 14 2.1 Qualifications of proposing firm 14 Benefits of local support with national public sector resources 14 Depth of our public sector practice 14 State and local government experience 15 Representation on standard-setting bodies 15 Advocacy and memberships 16 Attuned to industry developments and changes 17 Recent projects 18 2.1.1 Specialized training 23 2.1.2 Professional affiliations 26 ' 2.1.3 Firm's quality control programs 26 2.1.4 Accounting and auditing experience 29 2.1.5 Litigation 30 2.1.6 Client references 31 2.1.7 State Board of Accountancy 32 2.2 Qualifications of proposer team 33 TAB 3 –APPROACH AND METHODOLOGY 39 Client service relationship 39 Milestones and timing 57 Tab 4 - Cost Proposal 58 Exceptions 60 Appendices 62 Appendix A—Engagement team biographies 62 Appendix B—About RSM 74 4•p M 4r�► ' QQ 1.2 PROPOSAL CERTIFICATION QUESTIONNAIRE & REQUIREMENTS AFFIDAVIT Solicitation No: Solicitation Title: 2019-092-JC Auditing Services Procurement Contact: Tel: Email: Jason Crouch 305-673-7000 x6694 iasoncrouchc miamibeachfl.gov PROPOSAL CERTIFICATION, QUESTIONNAIRE&REQUIREMENTS AFFIDAVIT Purpose: The purpose of this Proposal Certification, Questionnaire and Requirements Affidavit Form is to inform prospective Proposers of certain solicitation and contractual requirements, and to collect necessary information from Proposers in order that certain portions of responsiveness, responsibility and other determining factors and compliance with requirements may be evaluated. This Proposal Certification, Questionnaire and Requirements Affidavit Form is a REQUIRED FORM that must be submitted'fully completed and executed. 1. General Proposer Information. FIRM NAME: RSM US LLP NO. OFYLARS IN BUSINESS: 93 years NO. OF YEARS IN BUSINESS --NO OI--EMPLOYEES: LOCALLY: 35 years 9,670 nationally 01R NAME(S) PROPOSER HAS,OPERA I ED UNDERIN THE LAST 10 YEARS: McGladrey&Pullen; McGladrey LLP; RSM McGladrey FIRM PRIMARY ADDRESS (HEADQUARTERS): One South Wacker Drive, Suite 800 CITY: Chicago STATE: Illinois ZIP CODE: 60606 TELEPHONE NO.: 1 312 634 3400 TOLL FREE NO.: 1 800 274 3978 FAX NO.: 1 312 634 3410 FIRM LOCAL ADDRESS: 801 Brickell Avenue, Suite 1050 CITY: Miami STATE: FL ZIP CODE: 33131 PRIMARY ACCOUNT REPRESENTATIVE FOR THIS ENGAGEMENT: Brett Friedman ACCOUNT REP TELEPHONE NO.: 954 356 5721 ACCOUNT REPTOLL FREE NO:: 800 966 0428 ACCOUNT REP EMAIL: brett.friedman@rsmus.com FEDERAL TAX IDENTIFICATION NO.: 42-0714325 The City reserves the right to seek additional information from Proposer or other source(s), including but not limited to: any firm or principal information, applicable licensure, resumes of relevant individuals, client information, financial information, or any information the City deems necessary to evaluate the capacity of the Proposer to perform in accordance with contract requirements. Page 4 QQ 1.Veteran Owned Business. Is Proposer claiming a veteran owned business status? YES x NO SUBMITTAL REQUIREMENT: Proposers claiming veteran owned.business status shall submit a documentation proving that firm is certified as a veteran-owned business or a service-disabled veteran owned business by the State of Florida or United States federal government, as required pursuant to ordinance 2011-3748. 2.Conflict Of Interest. All Proposers must disclose, in their Proposal, the name(s) of any officer, director, agent, or immediate family member(spouse, parent, sibling, and child) who is also an employee of the City of Miami Beach. Further, all Proposers must disclose the name of any City employee who owns, either directly or indirectly, an interest of ten (10%) percent or more in the Proposer entity or any of its affiliates. One of our managers, Chantelle Knowles is married to Phillip Knowles, Greenspace Division Director, however to ensure no potential conflicts of interest, Chantelle is not in any way part of the engagement team proposed to serve the City. 3.SUBMITTAL REQUIREMENT: Proposers must disclose the name(s) of any officer, director, agent, or immediate family member (spouse, parent, sibling, and child) who is also an employee of the City of Miami Beach. Proposers must also disclose the name of any City employee who owns, either directly or indirectly, an interest of ten (10%) percent or more in the Proposer entity or any of its affiliates. Except as stated previously, no officer, director, agent or immediate family member of RSM are employed by the City of Miami Beach. Additionally, there are no City employees who own an interest of ten (10%) or more in RSM US LLP. 4. References & Past Performance. Proposer shall submit at least three (3) references for whom the Proposer has completed work similar in size and nature as the work referenced in solicitation. SUBMITTAL REQUIREMENT: For each reference submitted,the following information is required: 1) Firm Name, 2) Contact Individual Name&Title, 3)Address, 4)Telephone, 5) Contact's Email and 6) Narrative on Scope of Services Provided. Firm name and address Contact, title, phone&email Scope of services provided City of Miami Erica Paschal-Darling Annual audit (GFOA Cert.) Finance Director Federal and state single audits 305.416.1330 and special reports. epaschal@miami.gov.com Miami-Dade County Berta Rufat Annual audit(GFOA Cert.) Controller Federal and state single audits 305.375.3637 and special reports. Berta.rufat@miamidade.gov City of Coral Springs Kim Moskowitz Annual audit(GFOA Cert.), Finance Director Federal&state single audits, 954.344.1092 Federal Transit Authority, Kmoskowitz@coralsprings.org Pension Plans &CRA). 5.Suspension, Debarment or Contract Cancellation. Has Proposer ever been debarred, suspended or other legal violation, or had a contract cancelled due to non- erformance by any public sector agency? • YES NO SUBMITTAL REQUIREMENT: If answer to above is"YES," Proposer shall submit a statement detailing the reasons that led to action(s). Page 5 fir 046. gyp �► 4100QQ • ©© 6.Vendor Campaign Contributions. Proposers are expected to be or become familiar with, the City's Campaign Finance Reform laws, as codified in Sections 2-487 through 2-490 of the City Code. Proposers shall be solely responsible for ensuring that all applicable provisions of the City's Campaign Finance Reform laws are complied with, and shall be subject to any and all sanctions, as prescribed therein, including disqualification of their Proposals, in the event of such non-compliance. SUBMITTAL REQUIREMENT: Submit the names of all individuals or entities (including your sub-consultants)with a controlling financial interest as defined in solicitation. For each individual or entity with a controlling financial interest indicate whether or not each individual or entity has contributed to the campaign either directly or indirectly, of a candidate who has been elected to the office of Mayor or City Commissioner for the City of Miami Beach. Not applicable. No RSM employees or individuals with a controlling financial interest in the firm have contributed to the campaign either directly or indirectly for any candidate who have been elected to the office of Mayor or City Commissioner for the City of Miami Beach. 7.Code of Business Ethics. Pursuant to City Resolution No.2000-23879, each person or entity that seeks to do business with the City shall adopt a Code of Business Ethics ("Code") and submit that Code to the Procurement Department with its proposal/response or within five(5)days upon receipt of request. The Code shall, at a minimum, require the Proposer, to comply with all applicable governmental rules and regulations including, among others, the conflict of interest, lobbying and ethics provision of the City of Miami Beach and Miami Dade County. SUBMITTAL REQUIREMENT: Proposer shall submit firm's Code of Business Ethics. In lieu of submitting Code of Business Ethics, Proposer may submit a statement indicating that it will adopt, as required in the ordinance, the City of Miami Beach Code of Ethics,available at httb://www.miamibeachfl.gov/citv-hall/procurement/procurement-related- o rd i n a n ce-a n d-procedures/ We have read the City's Code of Ethics and we maintain that we are in compliance with the principles and practices as outlined in that code. RSM is committed to helping our professionals maintain a high quality of performance and work product. Not only does each employee receives the firm's Code of Conduct for review and signature for compliance annually, each line of business has policies and procedures that each professional must follow. Employment at our firm is at all times at will. An employee's performance is evaluated and feedback provided routinely to allow for the high quality service we aim to provide our clients. If disciplinary action is necessary, corrective action is taken which may include coaching, termination, verbal and/or written warnings, performance improvement plans, and/or suspension based on the circumstances and needs identified. RSM has sole discretion to determine what behavior warrants disciplinary action and what actions are appropriate for the particular circumstance. We will submit RSM's Code of Conduct upon request. We also agree to adhere to the City of Miami Beach's Code of Ethics as posted on the City's website. 8. Living Wage. Pursuant to Section 2-408 of the City of Miami Beach Code, as same may be amended from time to time, covered employees shall be paid the required living wage rates listed below: 1. Effective January 1, 2018, covered employees must be paid a living wage rate of no less than $11.62 per hour with health care benefits of at least$2.26 per hour, or a living wage rate of no less than $13.88 per hour without health care benefits. 2. Effective January 1, 2019, covered employees must be paid a living wage rate of no less than $11.70 per hour with health care benefits of at least$2.74 per hour, or a living wage rate of no less than $14.44 per hour without health care benefits. 3. Effective January 1, 2020, covered employees must be paid a living wage rate of no less than $11.78 per hour with health care benefits of at least$3.22 per hour, or a living wage rate of no less than$15.00 per hour without health care benefits. Page 6 4/► *fr- 4a). aw► M QQ •• The living wage rate and health care benefits rate may, by Resolution of the City Commission be indexed annually for inflation using the Consumer Price Index for all Urban Consumers (CPI-U) Miami/Ft. Lauderdale, issued by the U.S. Department of Labor's Bureau of Labor Statistics. Notwithstanding the preceding, no annual index shall exceed three percent(3%). The City may also, by resolution, elect not to index the living wage rate in any particular year, if it determines it would not be fiscally sound to implement same(in a particular year). Proposers' failure to comply with this provision shall be deemed a material breach under this proposal, under which the City may,at its sole option, immediately deem said Proposer as non-responsive,and may further subject Proposer to additional penalties and fines, as provided in the City's Living Wage Ordinance, as amended. Further information on the Living Wage requirement is available at http://www.miamibeachfl.aov/city-hall/procurement/procurement- related-ordinance-and-procedures/ SUBMITTAL REQUIREMENT: No additional submittal is required. By virtue of executing this affidavit document, Proposer agrees to the living wage requirement. Any payroll request made by the City during the contract term shall be completed electronically via the City's electronic compliance portal, LCP Tracker(LCPTracker.net). 9. Equal Benefits for Employees with Spouses and Employees with Domestic Partners. When awarding competitively solicited contracts valued at over$100,000 whose contractors maintain 51 or more full time employees on their payrolls during 20 or more calendar work weeks, the Equal Benefits for Domestic Partners Ordinance 2005- 3494 requires certain contractors doing business with the City of Miami Beach,who are awarded a contract pursuant to competitive proposals, to provide "Equal Benefits" to their employees with domestic partners, as they provide to employees with spouses. The Ordinance applies to all employees of a Contractor who work within the City limits of the City of Miami Beach, Florida; and the Contractor's employees located in the United States, but outside of the City of Miami Beach limits, who are directly performing work on the contract within the City of Miami Beach. A. Does your company provide or offer access to any benefits to employees with spouses or to spouses of employees? X YES NO B. Does your company provide or offer access to any benefits to employees with (same or opposite sex) domestic partners*or to domestic partners of employees? X YES NO C. Please check all benefits that apply to your answers above and list in the"other" section any additional benefits not already specified. Note: some benefits are provided to employees because they have a spouse or domestic partner, such as bereavement leave; other benefits are provided directly to the spouse or domestic partner,such as medical insurance. BENEFIT Firm Provides Firm Provides Firm does not for for Employees Provide Benefit Employees with Domestic • Health X X Sick Leave X X Family Medical X X Bereavement X X If Proposer cannot offer a benefit to domestic partners because of reasons outside your control, (e.g.,there are no insurance providers in your area willing to offer domestic partner coverage) you may be eligible for Reasonable Measures compliance. To comply on this basis, you must agree to pay a cash equivalent and submit a completed Reasonable Measures Application (attached)with all necessary documentation. Your Reasonable Measures Application will be reviewed for consideration by the City Manager, or his designee. Approval is not guaranteed and the City Manager's decision is final. Further information on the Equal Benefits requirement is available at http://www.miamibeachfl.Qov/city-hall/procurement/procurement- related-ordinance-and-procedures/ Page 7 " ION 40 QQ •VP 41iP 10. Public Entity Crimes. Section 287.133(2)(a), Florida Statutes, as currently enacted or as amended from time to time, states that a person or affiliate who has been placed on the convicted vendor list following a conviction for a public entity crime may not submit a proposal, proposal, or reply on a contract to provide any goods or services to a public entity; may not submit a proposal, proposal, or reply on a contract with a public entity for the construction or repair of a public building or public work;may not submit proposals, proposals,or replies on leases of real property to a public entity; may not be awarded or perform work as a contractor, supplier, subcontractor, or consultant under a contract with any public entity; and may not transact business with any public entity in excess of the threshold amount provided in s. 287.017 for CATEGORY TWO for a period of 36 months following the date of being placed on the convicted vendor list. SUBMITTAL REQUIREMENT: No additional submittal is required. By virtue of executing this affidavit document, Proposer agrees with the requirements of Section 287.133, Florida Statutes, and certifies it has not been placed on convicted vendor list. 11. Non-Discrimination. Pursuant to City Ordinance No.2016-3990, the City shall not enter into a contract with a business unless the business represents that it does not and will not engage in a boycott as defined in Section 2- 375(a) of the City Code, including the blacklisting, divesting from, or otherwise refusing to deal with a person or entity when such action is based on race, color, national origin, religion, sex, intersexuality, gender identity, sexual orientation, marital or familial status, age or disability. SUBMITTAL REQUIREMENT: No additional submittal is required. By virtue of executing this affidavit document, Proposer agrees it is and shall remain in full compliance with Section 2-375 of the City of Miami Beach City Code. 12.Moratorium on Travel to and the Purchase of Goods or Services from North Carolina and Mississippi. Pursuant to Resolution 2016-29375, the City of Miami Beach, Florida, prohibits official City travel to the states of North Carolina and Mississippi, as well as the purchase of goods or services sourced in North Carolina and ,Mississippi. Proposer shall agree that no travel shall occur on behalf of the City to North Carolina or Mississippi, nor shall any product or services it provides to the City be sourced from these states. SUBMITTAL REQUIREMENT: No additional submittal is required. By virtue of executing this affidavit document, Proposer agrees it is and shall remain in full compliance with Resolution 2016-29375. 13. Fair Chance Requirement. Pursuant to Section 2-376 of the City Code, the City shall not enter into any contract resulting from a competitive solicitation, unless the proposer certifies in writing that the business has adopted and employs written policies, practices, and standards that are consistent with the City's Fair Chance Ordinance, set forth in Article V of Chapter 62 of the City Code ("Fair Chance Ordinance"), and which, among other things, (i) prohibits City contractors, as an employer, from inquiring about an applicant's criminal history until the applicant is given a conditional offer of employment; (ii) prohibits advertising of employment positions with a statement that an individual with a criminal record may pot apply for the position, and (iii) prohibits placing a statement on an employment application that a person with a criminal record may not apply for the position. SUBMITTAL REQUIREMENT: No additional submittal is required at this time. By virtue of executing this affidavit, Proposer certifies that it has adopted policies, practices and standards consistent with the City's Fair Chance Ordinance. Proposer agrees to provide the City with supporting documentation evidencing its compliance upon request. Proposer further agrees that any breach of the representations made herein shall constitute a material breach of contract, and shall entitle the City to the immediate termination for cause of the agreement, in addition to _ any damages that may be available at law and in equity. Page 8 an(01 40) QQ • Our • 14.Acknowledgement of Addendum. After issuance of solicitation, the City may release one or more addendum to the solicitation, which may provide additional information to Proposers or alter solicitation requirements. The City will strive to reach every Proposer having received solicitation through the City's e-procurement system, PublicPurchase.com. However, Proposers are solely responsible for assuring they have received any and all addendum issued pursuant to solicitation. This Acknowledgement of Addendum section certifies that the Proposer has received all addendum released by the City pursuant to this solicitation. Failure to obtain and acknowledge receipt of all addenda may result in proposal disqualification. Initial to Initial to Initial to Confirm Confirm Confirm BF Addendum 1 Addendum 6 Addendum BF Addendum 2 Addendum 7 Addendum Addendum 3 Addendum 8 Addendum Addendum 4 Addendum 9 Addendum Addendum 5 Addendum 10 Addendum • If additional confirmation of addendum is required, submit under separate cover. • Page 9 • /(01 © (10) 4160 4110) QQ ©© DISCLOSURE AND DISCLAIMER SECTION The solicitation referenced herein is being furnished to the recipient by the City of Miami Beach (the "City") for the recipient's convenience. Any action taken by the City in response to Proposals made pursuant to this solicitation, or in making any award, or in failing or refusing to make any award pursuant to such Proposals, or in cancelling awards, or in withdrawing or cancelling this solicitation, either before or after issuance of an award, shall be without any liability or obligation on the part of the City. In its sole discretion, the City may withdraw the solicitation either before or after receiving proposals, may accept or reject proposals, and may accept proposals which deviate from the solicitation, as it deems appropriate and in its best interest. In its sole discretion, the City may determine the qualifications and acceptability of any party or parties submitting Proposals in response to this solicitation. Following submission of a Bid or Proposal, the applicant agrees to deliver such further details, information and assurances, including financial and disclosure data, relating to the Proposal and the applicant including, without limitation,the applicant's affiliates,officers,directors,shareholders, partners and employees,as requested by the City in its discretion. The information contained herein is provided solely for the convenience of prospective Proposers. It is the responsibility of the recipient to assure itself that information contained herein is accurate and complete. The City does not provide any assurances as to the accuracy of any information in this solicitation. Any reliance on these contents, or on any permitted communications with City officials, shall be at the recipient's own risk. Proposers should rely exclusively on their own investigations, interpretations, and analyses. The solicitation is being provided by the City without any warranty or representation, express or implied, as to its content, its accuracy, or its completeness. No warranty or representation is made by the City or its agents that any Proposal conforming to these requirements will be selected for consideration, negotiation, or approval. The City shall have no obligation or liability with respect to this solicitation, the selection and the award process, or whether any award will be made. Any recipient of this solicitation who responds hereto fully acknowledges all the provisions of this Disclosure and Disclaimer, is totally relying on this Disclosure and Disclaimer, and agrees to be bound by the terms hereof.Any Proposals submitted to the City pursuant to this solicitation are submitted at the sole risk and responsibility of the party submitting such Proposal. This solicitation is made subject to correction of errors, omissions, or withdrawal from the market without notice. Information is for guidance only, and does not constitute all or any part of an agreement. The City and all Proposers will be bound only as, if and when a Proposal (or Proposals), as same may be modified, and the applicable definitive agreements pertaining thereto, are approved and executed by the parties, and then only pursuant to the terms of the definitive agreements executed among the parties.Any response to this solicitation may be accepted or rejected by the City for any reason, or for no reason, without any resultant liability to the City. The City is governed by the Government-in-the-Sunshine Law, and all Proposals and supporting documents shall be subject to disclosure as required by such law. All Proposals shall be submitted in sealed proposal form and shall remain confidential to the extent permitted by Florida Statutes, until the date and time selected for opening the responses.At that time, all documents received by the City shall become public records. Proposers are expected to make all disclosures and declarations as requested in this solicitation. By submission of a Proposal, the Proposer acknowledges and agrees that the City has the right to make any inquiry or investigation it deems appropriate to substantiate or supplement information contained in the.Proposal, and authorizes the release Page 10 4140M ftI . QQ to the City of any and all information sought in such inquiry or investigation. Each Proposer certifies that the information contained in the Proposal is true, accurate and complete, to the best of its knowledge, information, and belief. Notwithstanding the foregoing or anything contained in the solicitation, all Proposers agree that in the event of a final unappealable judgment by a court of competent jurisdiction which imposes on the City any liability arising out of this solicitation, or any response thereto, or any action or inaction by the City with respect thereto, such liability shall be limited to $10,000.00 as agreed-upon and liquidated damages. The previous sentence, however, shall not be construed to circumvent any of the other provisions of this Disclosure and Disclaimer which imposes no liability on the City. In the event of any differences in language between this Disclosure and Disclaimer and the balance of the solicitation, it is understood that the provisions of this Disclosure and Disclaimer shall always govern. The solicitation and any disputes arising from the solicitation shall be governed by and construed in accordance with the laws of the State of Florida. • Page 11 AA MQQ 0 0 PROPOSER I hereby certify that:I,as an authorized agent of the Proposer, am submitting the following information. as my firm's proposal; Proposer agrees to complete and unconditional acceptance of the terms and conditions of this document,inclusive of this solicitation,all attachments,exhibits and appendices and the contents of any Addenda released hereto,and the Disclosure and Disclaimer Statement;proposer agrees to be bound to any and all specifications,terms and conditions contained in the solicitation,and any released Addenda and understand that the following are requirements of this solicitation and failure to comply will result in disqualification of proposal submitted;Proposer'has not divulged,discussed, or compared the proposal with other Proposals and has not colluded with any other proposer or party to. any other proposal; proposer acknowledges that all information contained herein is part of the public Pierre ct Proposer'aAuctrorizee fisp:seme-ow. The of Proposer a Authorized Representative: Brett Friedman Partner Seriatim of Propaaer's Au honzed REaraseriati e: - Dale April 8,2019 ti , State of FLORIDA ) , On this eth day of March,20 2,personally ) appeared before me Brett Friedman who County of Broward - - ) stated that(s)he is the:Partner of RSM US LLP ,a ear-par 'n''d rats iity partners'grip and that the instrument was signed on behalf of the said esrporaticn Srg x by authority of its board of directors and acknowledged said instrument to be its voluntary act and deed.Before me: ___ Notary Public ar the State of Florida My Commission Expires:7124119 , / "" cACLdoRGMKUZAVA„ NN CC. SSiCNi FFzf� s ,ryY, E7CPIREs-July4,20te 1V,-$4 evelnrIlk*P*0-humbm, Balance of Pag - jntentlonally Left Blank • Page 12 ro) (fiA 014 QQ O10- ,,„ 40 41i6) 1.3 ORGANIZATIONAL CHART The supervisory personnel comprising the City's proposed engagement team are summarized in the organizational chart and table below. The team members'complete detailed biographies with education, ,governmental auditing experience and professional memberships follow on the subsequent pages. The following organization chart shows our proposed team and their reporting relationships. City of Miami Beach Bryan Thompson Bob Feldmann _s Cyber security specialist Client service partner Scott Bassett Alexandra Lorie Concurring review partner IT specialist - T Brett Friedman Brian Schebler Tim Ellenwood ; Engagement partner Technical resource Tax specialist Lisa Chanzit David Luker Valerie Colimon —1 Actuary specialist Construction cost Engagement senior manager recovery specialist Kristy Coulter • a Michelle Diaz Engagement in-charge Engagement in-charge Page 13 (431 (8) QQ • -(01) 41irP 41101 (1110 Ivs2 o • Tab 2 — Experience & qualifications 2.1 QUALIFICATIONS OF PROPOSING FIRM Submit detailed information regarding the relevant experience and performance and achievements of the firm and/or its principals in providing the scope of services as identified in this solicitation, including experience in providingsimilarscope of services to public sector agencies. For each project the Proposer submits as evidence of similar experience for the firm and/or any principal, the following is required,. project description, agency name, agency contact, contact telephone &email and year(s) and term of engagement. For each project, identify whether the experience is for the firm or for a principal(include name of principal). Benefits of local support with national public sector resources In selecting a firm to perform your auditing services, the City should expect both staff accessibility, as well as a substantial public sector practice to support your full range of needs, current and emerging. RSM embraces such a service model; we find this combination promotes value through perspective and efficiency that can only come by serving hundreds of entities like yours. For the City, this translates to minimal time commitment on your part to assimilate our staff—who will come to the engagement with the level of experience and education necessary to perform their work efficiently. In addition, your engagement primarily will be staffed with professionals from our Miami and Fort Lauderdale offices,with additional support as needed.We look forward to leveraging this proximity to provide a high level of personal attention throughout the engagement and whenever you need us during the year. . - Depth of our public sector practice RSM has a national practice focused on serving government entities like the City. We serve the audit, compliance and consulting needs of more than 2,500 public sector clients annually, including over 550 state and local,governmental entities, such as cities and towns, utilities, housing authorities, transportation authorities, redevelopment agencies and school districts. This translates into considerable knowledge of the environment in which government entities operate. Within our public sector practice, we have more than 800 professionals who are committed to serving state and local governments. Our practitioners leverage their experience to create meaningful value for clients through a strong knowledge base and efficient processes. In working with RSM, the City will also benefit from our dedicated resources that closely monitor public sector developments and provide regular communications on accounting, auditing and regulatory pronouncements pertinent to state and local governments. Page 14 41-0 fa. A. fol 46.0, Imp gip QQ • State and local government experience State and local governments are being challenged by a broader range of constituencies to deliver more transparency, efficiency and accountability than ever before. Leaders are under considerable pressure to ensure that government entities function like an efficient business—delivering quality services, implementing efficient processes and setting new standards that can withstand examination.At the same time, in the face of ever-changing economic and political conditions, state and local governments must function productively and show results, all while focused on achieving a higher mission: to preserve and protect the public interest. At RSM, we will work together with the City to address a variety of challenges, including: • Reporting, including compliance requirements • Risk and internal controls • Business process re-engineering and operational transformation • Technology consulting The City deserves to work with a service provider that understands your objectives and can help you address challenges and anticipate future changes. Leveraging the experience and perspectives of our over 1,800 public sector professionals—including more than 800 who focus on serving state and local governments, RSM can assist the City in meeting responsibility and accountability expectations. This will help the City achieve the technical, regulatory and cultural changes required to meet your evolving goals. Representation on standard-setting bodies The City wants to be informed and understand the impact of regulatory challenges, and needs an auditing firm with a deep level of involvement with standard-setting bodies. We require all professionals who are CPA's to be members of the American Institute of Certified Public Accountants (AICPA), and we actively participate on various AICPA committees, task forces and expert panels, including the AICPA Auditing Standards Board, Professional Ethics Executive Committee, National Peer Review Committee,AICPA Governmental Audit Quality Center and AICPA State and Local Government Expert Panel. This participation provides immediate, first-hand knowledge of proposed and final standards and other developments affecting our clients and audit quality. RSM also has provided technical review services to the AICPA for a number of industry-related audit and accounting guides, risk alerts and other publications. Brian Schebler, RSM national director ofP ublic sector services, is a past chair of the AICPA Governmental Audit Quality Center Executive Committee,where he was an initial and multi-term member. He continues to serve as the firm's Designated Audit Quality Partner. He is a member of the AICPA Practice Monitoring Task Force-Government and Compliance Audit Subgroup and participant in the AICPA Audit Quality Center Compliance Monitoring Task Force. He is serving his third term as a member of the GAO Advisory Council on Government Auditing Standards and is also our firm's Single Audit Roundtable representative. He frequently presents training on behalf of the AICPA, serves as a member of industry-related task forces, assists with industry related publications, and is a former initial and multi- term member of the AICPA State and Local Government Industry Expert Panel. Page 15 100 AO 0) gri) 4100 QC) The majority of the members of your proposed team are members of the Florida Government Finance Officers Association. Brett Friedman, your proposed engagement partner, is a member of the Government Finance Officers Association Special Review Committee and has presented for several years at the annual FGFOA conferences. Advocacy and memberships RSM participates in the following associations: • Government Finance Officers Association • Florida Government Finance Officers Association • Association of Government Accountants • National Association of State Auditors, Comptrollers and Treasurers • National Association of State Chief Information Officers • Public Pension Financial Forum Client service approach RSM understands the importance of-efficiencies at all levels of government, and we believe you deserve service providers who understand your objectives who are committed to helping the City follow through on its mission. We are committed to assisting our public sector practitioners with access to the latest technical information and training in the areas of functional specialization. Our primary focus, however, is on audit quality and providing our clients with close personal attention and accessibility of all personnel, including • the engagement lead. Partner-level attention • In working with RSM, the City will not compete with the world's largest corporations for partner-level time and attention. You will continue to be front of mind for us, not only during fieldwork, but throughout the year. Our client service model is designed for us to be your trusted business advisor throughout the year, not just during the period of time that we are in your offices performing the audit. We will meet with you on a regular basis during the year, with the sole purpose of keeping each other up to date on what is going on within the City and in the industry. Our experience has been that this approach allows us to resolve issues as they arise, thus not having to deal with these issues during the audit. The result is a more efficient approach and the minimization of surprises during the audit process. When it comes to operational improvement recommendations, or updatesrelated to new accounting pronouncements, you will also learn about a range of different ideas. We will bring to you not only • observations about your operation but also best practices that we are seeing in the industry. In working with us, the City will have access to advisors who understand the unique aspects of your business and are committed to effectively serving your needs. Page 16 r 4 4D 4111) Q Q Attuned to industry developments and changes We leverage a variety of means to keep our public sector personnel well-versed on issues affecting you. Among these, RSM professionals maintain relationships with many federal and state departments and agencies, as well as working relationships with officials within the U.S. Government Accountability Office and Office of Management and Budget. We have participated as an advisor to the President's Council on Integrity and Efficiency through the Quality of Audit Roundtable. Our firm also serves on the AICPA's State and Local Government Expert Panel. In addition, our audit teams are well-versed in GASB, AICPA and GAO pronouncements, including those being proposed by standard-setting bodies and those issued but not yet implemented. Current RSM representation on regulatory bodies includes: Brian Schebler j• GAO Advisory Council on Government Auditing Standards °• Past Chair of AICPA Governmental Audit Quality Center Executive Committee and current firm representative • AICPA Practice Monitoring Task Force—Government and Compliance Audits Subgroup I• . Single Audit Roundtable • AICPA Audit Quality Center Compliance Monitoring Task Force ° i engagement reviewer Ian Benjamin Chair of the Technical Standards Subcommittee of the AICPA Professional Ethics Executive Committee • AICPA Enhanced Discipline Standing Subgroup !Jamie Klenieski • Center for Audit Quality Audit Quality Indicators Task Force i Jason Kellogg 4.• Center for Audit Quality Cybersecurity Steering Committee Joe Adams t• Vice,Chair of the Center for Audit Quality Governing Board § '3• AICPA Major Firms Group ' r9 Joel Sharron • Center for Audit Quality Advisory Council Michelle Horaney ;• AICPA State and Local Government Expert Panel Sara Lord AICPA Auditing Standards Board o•. AICPA Quality Control Standards Task Force • Center for Audit.Quality Professional Practice Executive.Committee s ;• Center for Audit Quality Advisory Council •. Center for Audit Quality Auditors Reporting Model Task Force AICPA International Auditing Standards Task Force Shelly Van Dyne i• AICPA Professional Ethics Executive Committee - _� • AICPA Federal Legislative Task Force Page 17 ,. ©, 0, to mo im ta gvi) VP 411P q111) Q Q ,k.,..,, ig. Recent projects Locally, public sector is the single largest industry we serve in Florida. We have the honor of currently serving, or having previously served, as the auditors for some of the most prominent governmental entities in Florida. The following list pertains to experience of both the firm and the principal: Dates of ' Project j contract , Client contact,phone and Address , Client Name Description 1 term I email Principal 1 Amber Riviere Bal Harbour Annual audit Chief Financial Officer 655 96 Street Village (GFOA Cert.) 2016—2018 305.993.7329 Bal Harbour,FL 33154 Anil Harris ariviere@balharbourfl.gov Annual audit George Tablack 115 S.Andrews (GFOA Cert.), Chief Financial Officer Avenue,Room 513 Broward County Federal&state 2017—2021 954.357.7130 Fort Lauderdale,FL Brett Friedman single audits& Gtablack@broward.org 33301 COs) Annual audit Pat Reilly 600 SE 3rd Avenue Broward County (GFOA Cert.), 2012—2016 Chief Auditor, Ft.Lauderdale, FL School Board Federal&state 754.321.2400 33301 Brett Friedman single audits (retired) 2016—2018 Pat Poston 445 Challenger Rd#301 Canaveral Port Annual audit Sr.Director of Finance Jeff Zeichner Authority (GFOA Cert.) +2(1)yr 321.783.7831 X273 Cape Canaveral,FL opts Pposton@portcanaveral.com 32020 Annual audit 2004—2015 Diana Gomez City 01 Coral Finance Director 405 Biltmore Way Brett Friedman Gables (GFOA Cert.), 2016—2018 305.460.5275 Coral Gables,FL Anil Harris Federal&state +2(1)yr opts dgomez@coralgables.corn 33114 single audits Annual audit (GFOA Cert.), Kim Moskowitz City of Coral Federal&state 2006—2015 9551 W.Sample Road Controller Springs single audits, 2016—2020 954.344.1092 Coral Springs,FL Brett Friedman Federal Transit 33065 Anil Harris Authority,Pension Kmoskowitz@coralsprings.org Plans&CRA) Annual audit Hugh Dunkley City of Deerfield 150 NE 2 Avenue Beach (GFOA Cert.), 2005—2014 Finance Director Deerfield Beach,FL Federal&state 954.480.4225 33441 Brett Friedman single audits hdunkley@deerfield-beach.com Scott Simpson Department of 40 NW 3 Street,Suite Bob Feldmann Off-Street Annual audit 2007—2018 Chief Financial Officer 1103 Parking 305.373.6789 Miami,FL 33128 Ssimpson@miamiparking.com Robert Spencer District School 2012—2018 Executive Director of Financial Board of Collier Audit of Internal Includes 2 Services 5775 Osceola Trail Frank Compiani County Accounts (2)year 239.377.0047 Naples,FL 34109 Anil Harris option years spencero@collier.k12.fl.us Bren Dietrick Turkey Lake Service Florida Turnpike Chief Financial Officer Plaza Enterprise Annual audit 2014—2019 Bren.dietrich@dot.state.f.us Milepost 263,Bldg Jeff Zeichner 407.264.3010 5315 Ocoee,FL 34761 Annual audit Sandra Brown PO Box 10 Glades County federal&state 2005—2009 Chief Deputy Clerk 500 Avenue J single audits 863.946.6010 Moore Haven,FL Brett Friedman sbrown@gladesclerk.com 334371 Alvin West Greater Miami 701 Brickell Avenue, Convention and Annual audit 2007—2018 Sr. VP Finance and Admin, CFO Suite 2700 Bob Feldmann Visitors Bureau 305.539.3085 Miami,FL 33131 Anil Harris al@miamiandbeaches.com Page 18 4,P MIn `z/ ,• City of Annual audit Celeste Lucia 400 S.Federal Hallandale (GFOA Cert.), 2004—2009 Finance Director Highway Beach Federal&state 954.457.1300 Hallandale Beach,FL Brett Friedman single audits clucia@hcohb.org 33009 Hillsborough - Ann Davis County Aviation 2016—2018 PO Box 22287 Authority Annual audit Option Director of Finance Tampa,FL 33622- Jeff Zeichner (Tampa Intl 2019-2020 813.870.8715 2287 Airport) adavis@tampaairport.com Annual audit (GFOA Cert.), Ernie Acosta City of Federal&state 2009—2013 Division Director, General Acct 2600 Hollywood Blvd; Hollywood single audit, 2014—2015 954.921.3228 Hollywood,FL 33020 Bob Feldmann pension plans and easosta@hollywoodfl.org Anil Harris CRA Annual audit Joel Proven 117 W.Duval Street City of (GFOA Cert.), 2010—2014 Financial Administration Manager City Hall,Suite 300 Brett Friedman Jacksonville Federal&state 904.630.2907 Jacksonville,FL 32202 single audits jprovenza@coj.net Jacksonville Ross Jones 14201 Pecan Park Aviation Annual audit 2014—2018 Director of Finance Road Jeff Zeichner Authority 904.741.3670 Jacksonville,FL 32218 Rossjones@flyjackosnville.com com Annual audit Mike McClung 2831 Tallyrand Ave. (GFOA Cert.), Controller Jacksonville,FL Port Jacksonvillely Federal&stater2010—2016 " 904.357.3004 32206 Jeff Zeichner single audits mike mcclung@jaxport.com mike.mcclung@ jaxport.com Jacksonville Henry Li 100 N.Myrtle Avenue Transportation Annual audit 2008—2012 VP Finance&Admin/CFO Jacksonville,FL Jeff Zeichner Authority 2014—2016 904.610.3116 32204 hli@jtafla.com Annual audit Carolynn Timmann 2401 SE Monterey Martin County (GFOA Cert.), 2012—2018 Clerk of Court&Comptroller Road Brett Friedman Federal&state 772.288.5736 Stuart,FL 34996 single audits ctimmann@martin.fl.us Annual audit Erica Paschal-Darling City of Miami (GFOA Cert.), 2007—2010 Finance Director 444 SW 2 Avenue Bob Feldmann Federal&state Anil Harris 2014—2018 305.416.1328 Miami,FL 33130 single audits, epaschal@miamigov.com Special reports , Annual audit (GFOA Cert.), Allison Williams 1700 Convention City of Miami Federal&state Interim Asst.Finance Director Center Drive—3rd Chantelle Beach single audits,audit 2006—2016 305.673.7000 Floor Knowles reports for blended allisonwilliams@miamibeachflgov Miami Beach,FL component units 33179 and major enterprise funds Annual audit Berta Rufat Miami-Dade (GFOA Cert.), 2011—2015 Controller 111 NW 1st Street, Brett Friedman County Federal&state + 305.375.3637 Suite 2550 Chantelle single audits 2016—2020 berta.rufat@miamidade.gov Miami,FL 33128 Knowles Annual audit Maria Gonzalez 1450 NE 2nd Avenue, Miami-Dade (GFOA Cert.), 2011—2018 Chief Auditor Room 415 Brett Friedman School Board Federal&state 305.995.1331 Anil Harris Miami,FL 33132 single audits mtgonzalez@dadeschools.net Annual audit Elaine Connors 2300 Civic Center (GFOA Cert.), Director of Financial Services Brett Friedman City of Miramar 2011—2016 Place Anil Harris Federal&state 954.602.3049 Miramar,FL 33025 single audits econnors@ci.miramarfLus Natalee Wallace Annual audit Miguel Augustin City of North (GFOA Cert.), Finance Director 776 NE 125 Street 2016—2020 305.893.6511 x12125 Bob Feldmann Miami Federal&state maugustin@northmiamifLgov North Mimi,FL 33161 Anil Harris single audits Page 19 eqb40) 411P 4VP QQ Annual audit Richard lavarone 301 N. Olive Avenue, Palm Beach (GFOA Cert.), 2006—2015 Director Financial Management Suite#702, 7t^Floor Bob Feldmann County Federal&state +2(2)y year 561.355.4369 West Palm Beach,FL Brett Friedman o single audits p riavarone@pbcgov.com 33402 Annual audit Suzette Sibble 100 W.Atlantic Blvd. City of Pompano (GFOA Cert.), Assistant City Manager Anil Harris Beach Federal&state 2005—2015 954.786.4680 Pompano Beach,FL single audits suzette.sibble@copbfl.com 33060 Nancy Samuels Annual audit 2014—2016 3366 Forest Hill Blvd. School District (GFOA Cert.), +2(1)yr opts Director of Accounting A-323 Brett Friedman of Palm Beach Federal&state 2017—2019 561.434.8096 West Palm beach,FL Chantelle County single audits +2(1)yr opts nancy.samue/s 33406 Knowles @palmbeachschools.org Why diversity matters at RSM RSM's commitment to culture, diversity and inclusion (CDI) drives our effectiveness in our service to clients and in retaining top talent and expertise across the organization. CDI fosters understanding of our clients, their business cultures and the markets in which they operate. Internally, CDI results in our success in attracting, retaining and continually developing a diverse team of talented professionals.We strive to create an inclusive workplace that celebrates the differences among our employees, while enabling them to embrace full ownership of their professional and personal lives. RSM's approach to a diverse workplace embraces several strategies, including: • Dedicated leadership for culture, diversity and inclusion (CDI) • Recruitment of diverse talent and expertise - • Training and professional development • Investment in 11 employee network groups (ENGs) • Support for diverse professional organizations (DPOs) • Diverse supplier and vendor development Together, these strategies enable RSM to develop global leadership, integrate cultural differences, drive innovation, enhance workforce productivity and exceed the expectations of our clients. RSM's leadership for culture, diversity and inclusion RSM devotes fulltime and dedicated personnel exclusively to our CDI efforts. Our national leader of CDI, Richard J. Caturano, is an RSM partner and a member of the firm's enterprise leadership team. He is a founding member of the National Commission on Diversity and Inclusion at the American Institute of Certified Public Accountants (AICPA), and currently serves as chair of the Commission. Other leaders on the CDI team are Tracey Walker, national CDI senior director who also directs government affairs and diversity compliance advisory for RSM. Valerie Colimon, one of the engagement team leaders for the City, also holds a leadership role in enhancing RSM's nationwide CDI initiatives serving as our National Multi-Cultural Employee Network Group Leader. Brett Friedman also plays an active role nationally, with our Hispanic Organization for Leadership and Advancement(HOLA) Employee Network Group. In addition, hundreds of RSM professionals devote time to internal workforce and workplace initiatives, as well as marketplace and community programs including supplier diversity, diverse subcontracting, corporate citizenship and diverse organization partnership. Page 20 (A QQ ©7;11 Recruitment Our hiring process integrates HR, recruiting, marketing and communications, as well as employee networking groups (ENGs), to connect with diverse communities (e.g., strategic colleges, universities and organizations)that can allow RSM to leverage diversity to better serve clients. Expanding the pool of high-performing, diverse candidates enhances the firm's overall profile and, as we hire professionals from varied backgrounds, genders, ethnicities and experiences, enriches the experience for our talent. These diverse points of view and perspectives contribute to high performance and more effective solutions for RSM clients. Our recruiters identify candidates of diverse backgrounds and skill sets. Candidates identified are strategically positioned for interviews and consideration. RSM ENGs, campus recruiting and experienced- hire talent acquisition professionals work to create collaborative, innovative professional teams across our organization nationwide. Training and professional development RSM's Office of Learning and Professional Development(LPD) executes national training and professional development programs for varied staff levels and leaders in audit, tax and consulting lines of business. RSM has incorporated diversity and inclusiveness training into these compulsory annual training sessions to both raise awareness of potential unconscious bias and to enhance performance by helping everyone understand the importance of cultural dexterity, diversity and adopt inclusive behaviors. In addition to national training, ENGs host diversity education and professional development events at the regional and local level, some of which is built into the performance goals of leadership personnel. Our CEO and,other C-level executives host and support attendance at our learning events. Employee network groups (ENGs) While diversity and inclusion have long been a part of RSM's culture, the firm began formalizing ENGs in 2014. These groups provide opportunities for volunteering, professional development, mentorship and networking with all levels across the firm. RSM leaders look to our ENGs for innovative insights to help enrich experiences for our clients and our people. ENGs are open to all employees, with over 40 percent, or approximately 4,000 individuals, now belonging to,ENGs. The groups are: • African American Community of Excellence(AACE). Provides an environment for success for RSM's African-American and black professionals. • InspirAsian ENG. Provides support and guidance for RSM's Asian professionals. • Family First ENG. Celebrates and supports all variations of working families at RSM. • Generations ENG. Provides enrichment through connections across all experience levels, from the newest post-millennial Generation Z employee to the most seasoned partner. • IHOLA! ENG. Provides support and guidance for RSM's Hispanic professionals. Interfaith ENG. Celebrates and enriches the understanding of faith within the workplace. • Pride ENG. Focuses on making RSM the employer of choice for LGBT professionals and their straight allies. • Abilities ENG. Supports and raises awareness for RSM employees, partners and principals that are differently abled. • STAR ENG (Stewardship, Teamwork, Advancement and Retention). Recognizes and supports women of RSM. Page 21 irArAs QQ • 4D GP �► tr► 14-44- .16 • Stars&Stripes ENG. Encourages the success of our veterans, military service member community and their families. • Multicultural ENG. Connects people from all cultures across RSM and fosters cultural understanding and dexterity. Support for diverse professional organizations (DPOs) RSM works with key DPOs, societies and associations to support inclusion and professional development in key demographics and audiences, as well as to enrich our workforce and provide us access to high- performing candidates in accounting, tax and consulting. Nationally, RSM has made substantial investments in the National Association of Black Accountants(NABA),the Association of Latino Professionals for America(ALPFA) and Ascend (Pan-Asian organization for business professionals), as well as accounting-focused colleges, universities and students. RSM also executes partnership actions focused on women, veterans, professionals of different faiths, and LGBT talent. We further invest in the membership and participation of our workforce in these organizations. Supplier and vendor diversity programs RSM embraces small disadvantaged business (SDB) initiatives and the use of 3DB'partners and diverse vendors.We have processes and tools in placeto execute our commitment to supplier diversity and small business programs. Our small business plan helps us to meet or exceed socioeconomic targets as a percent of total contract value for each engagement. From a vendor perspective, RSM is committed to supporting small and diverse business. This includes women-, veteran-and minority-owned entities, as well as those in certified disadvantaged categories by the U.S. Small Business Administration such as 8(a), HUB-zoned and others. RSM has begun tracking vendor spending among WBE and MBE communities and is building a national supplier diversity program to encourage product and service purchasing from small and diverse businesses. Certification of suppliers We encourage our teaming partners to be certified by federal, state and or local government agencies, as appropriate.A certification bythe U.S. Small Business Administration, such as the 8(a) Business Development Program or.the Small Disadvantaged Business (SDB) certification, provides additional opportunities within the federal government. We validate all certifications provided by federal agencies by verifying companies' Central Contractor Registration (CCR) profiles. For all other agencies,we require copies of certification. Managing RSM's supplier diversity program RSM is continuing to build a supplier diversity program to leverage our strategic sourcing to quantify and increase spend with vendors and businesses in all disadvantaged categories. RSM uses a capacity-to-capability matrix to track the depth and breadth of each potential teaming partner. This matrix also helps us connect the relationship management within our engagement to identify meaningful opportunities for small business partners and their contributions during the performance of contracts. This process allows engagement leaders to initiate contact soon after receiving engagements to request inclusion, assistance and participation of our teaming partners. In those cases where teaming partners have additional past performances with the contracting office, subcontractors are offered their preferred roles. Page 22 fripoNA • 4,4) 4100 410 (VP QQ 2.1.1 Specialized training Indicate the number of days of specialized training in governmental accounting and auditing received during the last two(2)years for personnel identified on the organizational-chart submitted in Tab 1.3 to be assigned to this engagement. Professional development While all of our professionals receive a minimum of 80 hours of CPE every two years, all employees who participate in audits of governmental clients are required to fulfill a minimum of 24 hours of CPE every two years in subjects directly related to: • Current public sector environment, including unique accounting rules and applications • Auditing techniques, including those specifically pertaining:to the satisfaction of governmental audit requirements RSM training programs are provided at the national and local levels to promote consistency in our approach, while encouraging professionals to build their skills in one of the many specialty areas that we offer our clients. Our professional development program includes continuing professional education, self-study, on-the-job development, as described below. • Continuing professional education. RSM's audit and accounting programs train general service professionals to provide basic accounting and auditing services.All proposed RSM staff on the City's audit have met or exceeded the minimum governmental CPE hours required by Government Auditing' Standards and overall CPE requirements instituted by the AICPA. • Self-study.Assigned self-study is essential to our professional development program. Reading on a planned and continuous basis—via a self-study learning library available to all professionals—is encouraged and expected. • On-the-job development. Components of on-the-job development include appropriate,work assignments, effective coaching by supervisors, performance appraisal and feedback, and monitoring effectiveness. In-charge accountants instruct, review and evaluate staff accountants. Directors, managers and supervisors provide similar on-the-job learning opportunities for in-charge accountants. Partners and directors provide all employees with on-the-job development through constructive feedback during reviews of engagement performance and end products. J Page 23 11111101 /�� / ra (44. (8) fit - 0~� 4,40 orip 41.1) 41i1P QQ .z4-.,,T 0 t A schedule of CPE hours completed for the past two years (1/1/17- 12/31/18)for the key personnel assigned to the engagemenfollows: Yellow book hours Employee (specific to government) Regular hours Bob --- --_-__- -- -_____-_____-____-_--- Feldmann 78 | _ • |_ _ _ - -_ _ - - . Brett Friedman _ , 62,51O75 . ._ ' I. Scott Bassett 1 31 ' _- _ 78 _ _ '__ ____ _ _�__ - i_ _ . Brian - ! 78.5 J 135 . _| Vaoh§LCoUmon ___ _�_� _�__1___ . ,_�__ � | _� ��___�_�_-- _-____-_ --__-'---___ __ __'_________'' � Khs�Coubo[ : � � / 34.5. _ 13Oj Michelle Diaz | 44.5 J - 88.5 _- '- -_ ' -_=_________.--_-_:_-:_-_=_:-_---_,- - _ _ - _ - ._ - 1 _ - Lisa Chanz� _ | --` not required** 25 __I __ _- David Luker ===== ' ro= 1.-__. . . . -_-__�----___--_ _____ --_--___-__-- _--__- - .Uryg�1�ggpPoP�___---__-^_.___1 _'__ '[otIel�Ied.�___ ]-__- -._�6��- ___--' -- '� --'-- ' - ----' - ----�--'----' '--' ------'--1 '------ • Tim E|�nyyood . _�_ n��egu�ad = . _�_____�_ _80�__ ____ | **Given the nature of the services being performed by the specialist, yellow book CPE is not required however, each have sufficient training in their areas of specialty to meet their professional standards and requirements for specialists included in the yellow book. Detailed course in formation available upon request. ' ' -, ., ' Page 24 .. | ' . rfilk) ei ©,„„, 4.0 M 4111)► QQ • Enterprise risk management RSM has extensive experience implementing and enhancing enterprise risk management(ERM) programs with our clients, including the ability to either perform a current state assessment through an internal audit, or through a gap assessment using our maturity model that is tailored to your organization. While we have developed and can apply our own ERM model based on COSO ERM and ISO31000, we also have aligned our review tools using both of these major frameworks as well. The starting point of this review would be to gain an understanding of the City's goals with respect to its ERM program, which are often summarized through the risk maturity model and existing charters and processes. Typically, our review would cover the existence and effectiveness of several key elements such as risk governance, risk culture, risk appetite and risk management processes. Thought leadership Thought leadership EaLive seminarsFS) Newsletters and white papers and and webcasts " e-alerts 4 I reports If selected as your auditors, the City will have access to a variety of technical and advisory publications that cover information about current events and changes in laws and regulations. The following are examples of communications available to you: I 4 • • Financial Reporting Insights.A biweekly resource for recent financial. reporting developments and practice issues. • •. • • Tax Insights.A monthly newsletter featuring our perspectives on tax developments and planning opportunities. • Educational webcasts and seminars. We offer frequent virtual and in- person presentations on topics of importance to our clients. Government sector updates and education We also present on a variety of technical and industry-specific topics. Live webcast example Public sector webcast series: 2019 economic outlook ,61 .11 January 29, 2019 (will be recorded.for access at a later date) Recorded webcasts Cvbersecuritv best practices and considerations for the public sector • . • October 30, 2018 Annual governmental accounting update—What's new,what's next? April 17, 2018 Public sector webcast series: 2018 economic outlook March 01, 2018 Page 25 nn M 416, ► • giN Ati (43) 1.3Accounting research RSM offers our clients access to online research through CCH's Accounting Research Manager at our discounted rate. This web-based tool includes the,GASB Accounting Standards Codification and guidance on many other accounting standards and applications. 2.1.2 Professional affiliations Describe the participation of the firm and/or its principal(s)in national or state, governmental or professional, accounting or auditing Boards of Committees during the last three(3)years. RSM and/or our partners are members of the following audit organizations: • American Institute of Certified Public Accountants (AICPA) • Florida Institute of Certified Public Accountants (FICPA) • Government Finance Officers Association (GFOA) • Florida Government Finance Officers Association (FGFOA) • AICPA Governmental Audit Quality Center • AICPA Center for Audit Quality J Further, individual RSM professionals are members of many standard-setting committees and boards. 2.1.3 Firm's quality control programs Describe the firm's quality control programs and procedures that ensure compliance with the respondent's professional standards review and AICPA standards. Indicate whether the firm is in the SEC Practice Section and/or the Private Companies Practice Section of the Quality Control Program. If the respondent answered positively to the preceding, attach a copy of the last Peer Review received by the respondent. Our non-SEC audit practice is subject to the triennial peer review requirements of the AICPA. As specifically required by the standards for such reviews and our membership in the AICPA Governmental Audit Quality Center(GAQC), a representative sample of the approximately 1,000 audits that are performed annually in accordance with Government Auditing Standards, including approximately 600 single audits, were selected for review. The RSM system of quality control for the accounting and auditing practice applicable to non-SEC issuers in effect for the year ended April 30, 2016, was subject to peer review by the firm of BKD LLP,,a GAQC member firm.That review included a representative sample of university, government and nonprofit engagements. Under the peer review standards, firms can receive a rating of pass, pass with deficiency(ies), or fail. RSM received a peer review rating of pass. Page 26 06' QO AIC PASAmeritan Institute of CPAs Peer Review Program 220 Leigh Farm Road AdrnlnIslarot bylto Hanna'Poor RoRum Commrtioa ©tvhern,NC 27107.3113 December 3,2016 Joseph Michael Adams RSM US LLP 1 S Wacker Dr Ste 300 Chicago,IL 60606 • Dear Mr.Adams: It is my pleasure to notify you that on December 3,2016 the National Peer Review Committee accepted the report on the most recent system peer review of your firm.The due date for your nest review is October 31,2019.This is the date by which all review documents would be completed and submitted to • the administering entity_ As you know,the report had a peer review rating of pass_The Committee asked me to convey its congratulations to the firm_ Sincerely,� ` Michael Fawley Chair—National PRC riprc®aicpa.org 919 4024502 cc:Gary W Schafer;John Mark Edwardson Finn Number:10046712 ReviewNumber451033 Letter ID:1131947A 1:1.910.402.4502 I F:1.919.402.4876 I nprc eicpa.org • Page 27 • 470 M ► ► � . gOl) (114 QQIto BKD2 910E.StLows Stunt,?wtc 0//vo.Bax 1Mil StmgiddMoeStr]t-1tiu CPAs&Advisors 1 Q 4122,.&12,1:4 if t 417 allzaz bkn (III System Review Report To the Partner of RSM US LLP and the National Peer Review Committee of the American Institute of Certified Public Accountants Peer ReviewBoard We have reviewed the system of quality control for the accounting and and ng practice of RSMDS LLP (the"firm")applicable to engagements not subject to PCAOB immanent inspection in.effect for the year ended April 30,2016. Our peerreviewtvas conductedin accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board offo sic Institute off Certified Public Accountants.As a part of our pear review,we consideredaeviews by regulatory entities, if applicable,in determining the nature and extent ofour procedure`The than is responsible far designing a system of quality control and complying with it to provide the Ern with.reasonable=nonce of performing and reporting in conformity with applicable professional standards in all menial respects_ Our re poasbility is to express an opinion on the design of the system of quality control and the Em's compliance therewith based on our review_ The nature objectives,scope,lin ions of and the procedures performed in a System Review are described in the standards atnu w.sicya orept-n r ve f As ueguiie&by the standards,engagements selected for review included engagements performed larder- -- GvvcrrmismududitmgStmrdard,arias of employee benefit Plans,-audits performed underPDICIA,and audit,of carryingbroker-d.11Pr;,and examinations of service organizations[Seutice, Organizations Control(SOC)I and2 engagement]. • In our opinion,the system of quality control for the accounting and auditing practice of RSMtlS LLP applicable to non-SEC issuers in effect for the year ended April 30,2016,has been suitably desinedand complied with to provide the Srmtvithreasonable assurance ofper#orming and reporting in conformity with applicable professional standards in all material respect_Firms can receive a rating ofpas,pass with&Ocienayras)orfail_ RSM US LLP has received apeerreview rating ofposs, December 2,2016 Prax,it Y:` iksiAMU Page 28 ria) c)„.„ QQ41d)► (VP • 2.1.4 Accounting and auditing experience Describe the firm's(local office for national firms)and/or the principal's experience in providing accounting and auditing services to local governments. RSM has strong experience across the entire range of the public sector, serving 2,500 public sector clients annually, including more than 550 governments, many of whom have investment funds. Having our professionals dedicated to a particular industry promotes awareness of current trends, legislative changes, technological developments and issues pertinent to your industry. The City needs to entrust its audits to a firm with strong credentials and capabilities in serving the public sector. RSM handles the audit and compliance needs of 550 government entities and organizations. In addition, we believe the City will benefit from the following: • Dedicated government practice. RSM has a national practice focused solely on serving governmental organizations. This enables us to leverage our experience across multiple clients throughout the country and identify trends and industry practices from a diverse national client base, providing our clients the benefit of diverse experience and insight. • Deep bench of specialized resources. Our national government industry practice includes more than 200 partners and principals who are dedicated to handling the needs of public sector entities, plus an additional 600 individuals at varying levels of experience. • Focused government audit experience. RSM has strong experience across the entire range of the public sector, serving 2,500 public sector clients annually, including more than 550 governments, many of whom have investment funds. Having our professionals dedicated to a particular industry promotes awareness of current trends, legislative changes, technological developments and issues pertinent to your industry. • Guidance to excellence. Many of our clients have earned the GFOA Certificate of Achievement for Excellence in Financial Reporting. Our teams include professionals who are designated reviewers of comprehensive annual financial reports for the GFOA Certificate of Achievement Program and provide helpful comments to our clients. • Value of our client service. Through specialization within the public sector, we create meaningful value for clients through a strong knowledge base and efficient audit processes. • Experienced personnel you can count on. The senior members of the engagement team average more than 20 years of public sector experience and spend 100 percent of their time serving the industry. More importantly,every member of the team selected to serve the City—from staff to partner—has government audit experience. They are passionate about serving public sector organizations and will be a valuable resource to the City. Additionally, several members of the proposed engagement team have previously served on the audit of the City. • Page 29 4n 4., Orn (1iPQQ �•. rm pi -11 2.1.5 Litigation Describe any litigation in excess of$100,000 filed against the respondent in the State of Florida over the last three(3)years. Also describe any terminations, suspensions, censures, reprimands, probations or similar actions against the respondent or any member of the respondent's firm by the Florida State Board of Accountancy in the last three(3)years. RSM US LLP is a national provider of accounting, tax and consulting services. Like other professional services firms, we engage in matters with legal and regulatory implications as a part of doing business.At any given time, most public accounting firms will have ongoing legal activity. As is customary within the accounting profession and other professional practices, RSM does not disclose information pertaining to legal proceedings. Settlements and regulatory activity often involve matters that are bound by confidentiality agreements and orders that prohibit comment. There are no pending or actual claims that could reasonably be expected to affect our ability to serve our clients generally, or to provide the services contemplated by this proposal, specifically. There have been no terminations, suspensions, censures, reprimands, probations or similar actions either against our firm or against any member of the firm by the Florida State Board of Accountancy during the last three years. During the last three years, we have not been a defendant in any litigation, or regulatory action arising out of professional services performed for any state, city, county, school district, municipality or special district. This representation encompasses Florida and our nationwide practice at RSM. RSM has a long history of audit quality and a strong reputation for integrity, objectivity and excellence. We believe our system of quality control provides a firm foundation for our professionals to continue to comply with applicable professional standards and applicable regulatory and legal requirements.Any complaints or allegations of noncompliance with our system of quality control are promptly investigated by our national office of risk management and our general counsel's office. Page 30 P _ o- O 40 M (IP git, QQ .• 2.1.6 Client references Submit a list of ten (10) client references,preferable governmental/public institutions for which the proposer has performed similar work. Five (5) or more of the client references should be located within Florida: Information should include: 1. Client name address, contact phone number;2. Description of similar scope of services;3. Month and year the project was started and completed. Below is a list of a sample of ten of our public sector clients that our Florida public sector team has served over the past several years. Scope of services Dates of Client contact, phone and email Client Name and address project Broward County Annual audit(GFOA George Tablack 115 S.Andrews Avenue,Room 513 Cert.),Federal&state 2017—2021 Chief Financi7130 Officer 954.357.7 1 Fort Lauderdale,FL 33301 single audits&COs) Gtablack@broward.org City of Coral Gables Annual audit(GFOA 2004—2015 Diana Gomez 405 Biltmore Way Cert.),Federal&state 2016—2018 Finance Director 05.460.5275 Coral Gables,FL 33114 single audits +2(1)yr opts 3@coralgabl dgomez@coralgables.com City of Coral Springs Annual audit(GFOA 2006—2015 Kim Moskowitz • 9551 W.Sample Road Cert),Federal&state 2016—2020 Finance Director Coral Springs,FL 33065 single audits,pension 954.344.1092 plans&CRA) Kmoskowitz@coralsprings.org Hugh Dunkley City of Deerfield Beach Annual audit(GFOA Finance Director 150 NE 2 Avenue Cert.),Federal&state 2005—2014 954.480.4225 Deerfield Beach,FL 33441 single audits hdunkley@deerfield-beach.com City of Miami Annual audit(GFOA Erica Paschal-Darling 444 SW 2 Avenue Cert.),Federal&state 2007—2010 Finance Director Miami,FL 33130 • single'audits,Special 2014—2018 305.416.1328 • reports epaschal@miamigov.com City of Miami Beach Annual audit(GFOA Allison Williams 1700 Convention Center Drive Cert.),Federal&state Interim Asst.Finance Director 3`d Floor single audits,special 2006—2016 305.673.7000 Miami Beach,•,FL 33179 reports allisonwilliams@miamibeachfLgov Miami-Dade County Annual audit(GFOA 2011—2015 Berta Rufat Cert.),Federal&state Controller 11,1 NW 1st Street,Suite 2550 single audits,special + 305.375.3637 Miami,FL 33128 reports 2016—2020 berta.rufat@miamidade.gov Palm Beach County Annual audit(GFOA Richard lavarone 301 N. Olive Avenue Cert.),Federal&state 2006—2015 Director Financial Management Suite#702, 7th Floor single audits,special +2(2)year opts 561.355.4369 West Palm Beach,FL 33402 reports riavarone@pbcgov.com City of Pompano Beach Annual audit(GFOA Suzette Sibble Assistant City Manager 100 W.Atlantic Blvd. Cert.),Federal&state 2005—2015 Pompano Beach,FL 33060 single audits 954.786.4680 s uzette.sibble@ copbfl.com City of Tampa Annual audit(GFOA Lee Huffstutler 306 E.Jackson,2E Cert.),Federal&state 2016—2018 Chief Accountant Tampa,FL 33602 single audits,pension 813.274.7171 plans lee.huffstutler@tampagov.net Page 31 40 M �► +10 QQ101 2.1.7 State Board of Accountancy Indicate compliance with the State Board of Accountancy requirements applicable to audits of Florida local governments. As a professional accounting firm, RSM is subject to policies and requirements imposed by the American Institute of Certified Public Accountants, the state Boards of Accountancy(or equivalents) in each state in which we operate, the Securities Exchange Commission, the Public Company Accounting Oversight - Board, the Internal Revenue Service, and numerous other organizations and independent bodies providing oversight and credentialing of specific services.We have extensive policies and procedures at the enterprise level and each line of business and service offering addressing such requirements. We are fully in compliance with the State Board of Accountancy requirements applicable to audits of Florida local governments. Page 32 s , foi A 04 6 ©,,, 0 V '4' 40 (VP Q Q 1-.`-.4" 0 01 , , _ . , . , , . 2.2 QUALIFICATIONS OF PROPOSER TEAM . In addition to all personnel, indicate on the organizational chart any subconsultants to be used for this project if awarded, the role that each team member will play in providing the services detailed herein and each team member's qualifications. A resume of each individual, including education, experience, and any other pertinent information, shall be included for each Proposal team member to be assigned to this contract. These resumes should be at a minimum, for the partner, the manager and the senior for this engagement. The resume should include the continuing • i� education in governmental auditing and other governmental audit engagements that each has undertaken. • • The following table briefly describes the qualifications of the proposed team, their roles and the 111110 value they will bring to the City. Our team members are involved in a number of professional and civic organizations including the Government Finance Officers Association, Florida Government Finance Officers Association, School of Government Finance, Florida League of Cities, AICPA and FICPA. Detailed biographies containing each team member's formal education and professional affiliations, are included in the Appendix to this proposal Team Member Experience. Role�and Value to the. . City Bob Feldmann Bob has more than 30 years of experience providing 7. In his role as industry Client service partner audit and consulting services to governmental and . I leader and client service - nonprofit clients. He is a certified public accountant partner he will ensure r y • licensed to•practice in the State of Florida. ; that all services provided • to the City are delivered ! ' In his role as the Florida Public Sector Leader, Bob is:,j in a timely and efficient `, h of hi li and d th f ibl response or e oversightevery g - manner. He will be a bob.feldmann , quality services to all of our public sector clients. His valuable resource to the experience includes performing audits in accordance • team, @rsmus.com engagement with Government Auditing Standards, OMB Circular • drawing on his extensive • ' A-133, Federal Single Audit Act, Florida Single Audit experience serving Act, and the Rules of the Auditor General of the State governmental entities. He of Florida.A sample of Bob's Florida public sector will help to ensure that clients have included: the engagement team • City of Coral Gables • Greater Miami . and the City receive the • City of Aventura Convention and best resources and • • City of Coconut Creek • Visitor Bureau services from our firm. • City of Cooper City • • City of North Miami • City of Coral Springs • Miami-Dade County • • City of Deerfield • Palm Beach County ' Beach . • City of Jacksonville I •- City of Hallandale Martin County Beach • Broward County - • City of Miami Miami-Dade County • • City of Miami, Dept. of School Board Off-Street Parking • Seminole-Tribe of • • City of North Florida Lauderdale Page 33 1 01)1 43 QQ ©,;:la 4D Mat (VP till 0 Role and Value to the Team Member Experience City , Brett Friedman Brett has more than 21 years of experience providing audit 1' Brett will serve as the audit Audit engagement partner 'and consulting services to governmental and nonprofit { partner and will oversee all clients.He is a certified public accountant licensed to aspects of the audit.He 07'/ practice in the State of Florida.His experience includes brings many years of leading large governmental audits and performing audits in experience leading.major ,, accordance with Government Auditing Standards,OMB government audit brett.friedman Circular A-133,the Uniform Guidance,Federal Single Audit ' engagements and will be Act, Florida Single Audit Act and the Rules of the Auditor , involved in all aspects of the @rsmus.com General of the State of Florida. He is also active in the engagement.Brett will be Firm's internal inspection program. He has served as an available to the City not only instructor for both internal and.external CPE programs. 1 during the audit but .. throughout the year to help Brett's experience includes leading large government audits the City address issues as similar in size to the City.A sample of Brett's Florida they arise. He will be a government clients have included: trusted advisor and will • City of Jacksonville '• Broward County provide feedback and input • City of Sunrise • Glades County , as needed throughout the • City of Tamarac • Martin County year. '• City of Tampa • Miami-Dade County • City of West Palm Beach • Palm Beach County ' ' • City of Coconut Creek • School Board of ' • City of Coral Gables Broward County (. • City of Coral Springs • Miami-Dade County , • City of Deerfield Beach . School Board - • •+ • City of Hallandale Beach • School District of Palm • !' • City of Hollywood `Beach County • City of Miramar. •- • South Florida Water ' , L•City_of Pembroke Pines Management District . Scott.Bassett ' Scott has more than27 years of experience specializing inAs the engagement Concurring review partner 1 the audits of governmental and nonprofit organizations �', concurring review partner, throughout the state of Connecticut. He is a certified public ; Scott will provide advice and accountant and has served on a variety of standard-setting ;consultations regarding t bodies and organizations throughout his career.A sample of complex accounting \ Scott's clients include: . matters,assist the City of Coral Gables p , engagement team in audit • Cit Town of Westport ' • City of Coral Springs • City of Norwalk matters,and will be scott.bassett@rsmus.com • City of North Miami • • City of Danbury ; , responsible for reviewing all • City of West Palm Beach ' • City of Providence ' . high-risk areas of the audit. • City of Hartford • City of West Haven ' Scott's years of experience • City of New Haven, • Palm Beach County - • City of Stamford • Town of Greenwich and diverse list of clients ' • City of New Britain served will make him a • -valuable technical resource • - for the City. I� . I _- .` __-__.,_-----.-J -.-_ Page 34 • 1-1 (A) iA QQ , ©04, nn M ern 41. 14..._si, 0 0 Team Member Experience Role and Value to the City Valerie Colimon 1 Valerie has more than 13 years of experience providing Valerie will serve as the Audit senior manager ' audit and consulting services to governmental and nonprofit audit senior manager and clients. She performs a full spectrum of accounting , will serve as the primary . a operations including planning,executing and supervising. • , liaison between the City and I Q1, external audit engagements and serves some of the firm's RSM. Her focus will be on highest risk and profile clients.A partial listing-of ' coordinating the audit efforts valerie.colimon government clients she has served follows: i to maximize the efficiency of @rsmus.com =. our audit approach while . City of Miami Beach • Washington Metropolitan ' • City of Miami, FL Area Transit•Authority minimizing our impact on • City of,Coral Gables, FL • New England Conservatory ,the day-to-day operations of s. City of Hartford, CT of Music . -, the City.Valerie has a wide • City of Miami, Dept.of • Nassau County, NY Off-Street Parking ••Massachusetts breadth of experience in the • Miami-Dade.County, FL Development Finance audits of City governments • Miami Beach Convention • Massachusetts Technology `,and is adept in navigating . Center, FL Collaborative •; the intricacies that exist. Her • .• School Board of Miami- • Boston Private Industry. • • Dade County, FL Council ; depth of experience will • Greater Miami Visitor and • Nantucket Steamship - allow her to be a resource to • Convention Bureau Authority ' the City.throughout the year. • Woods Hole, Martha's • Vineyard ' • ' Michelle Diaz •r__ –), Michelle has over four years of public accounting Michelle will serve as one of Senior in-charge experience. She focuses primarily on cities, counties, ' the in-charges on the • y' school districts andnonprofit organizations.A sample of engagement and will help Michelle's government clients have included: ensure the information flow J :. Ci of Miami Beach from the client to the audit • ty City of Deerfield Beach . City of Miramar • City of Hollywood team is efficient. She will ' michelle.diaz : • City of Pompano Beach • Miami-Dade School Board alsofacilitate the @rsmus.com • • City of West Palm Beach • Palm Beach County engagement fieldwork on a • City of Coral Springs - • day-to-day basis. • . _ _ _ _ __ _ _-..i _J_ Kristy Coulter . - '.Kristy'has over two years of public accounting experience. Kristy will also serve as the Senior in-charge Her experience includes performingaudits in accordance ry 9 P in-charge on the '— , . ,-, • . with Government Auditing Standards and the Federal engagement and will help .' Single Audit Act.A sample of Kristy's government clients ensure the information flow have included:' from the client to the audit r team is efficient. She will I • Broward County Aviation Department 'also facilitate the kristy.coulter@rsmus.com . • Broward County General engagement fieldwork on a Segment ' • •'City of Coral Springs day-to-day basis. • City of Tamarac, 1 – - - Page 35 a rfiA 014 ra -:), +�n �► �n • ;Team.Member , Experience. • Role and:Value`to the . ', City,. • '., Brian Schebler Since joining RSM in 1981,Brian has served clients in Brian Schebler is a technical I Technical resource partner , several industries, but has focused on public sector clients resource who will assist the for the past 25 years. He has provided technical review i proposed engagement team ',- services to the AICPA for a number of industry-related Audit as needed. Brian is a &Accounting Guides, Risk Alerts and other publications. member of RSM's National it j '' ' Additionally,he is the current Chair of the AICPA Single Professional Standards k t, Audit Training and CPE Task Force,a member of the Group and is primarily brian.schebler@rsmus.com Comptroller General's Advisory Council on GAS,and the responsible for the firm's firm's single audit roundtable representative.He has served government, nonprofit and on several industry-related task forces and was a member compliance auditing of the initial Executive Committee of the AICPA approaches as well as the Governmental Audit Quality Center and the initial AICPA I maintenance of our State and Local.Government Industry Expert Panel. i Government Industry Manual, Nonprofit jOrganizations Manual, Health Care Manual,and Compliance Audit Manual.. He is also involved in the development and teaching of professional education courses on a national level, providing technical support to the firm's local and I network offices. ---- -------- -- - - -- --- -- Alexandra Lode Alexandra has more than 15 years of experience providing ` Alexandra specializes in Director, information audit and consulting services to governmental and nonprofit complex integrated technology clients.She is a director in RSM's Information Technology information system reviews (IT)Risk Advisory Services and business consulting and is experienced at practice.A sample of Alexandra's Florida government ' issuing confidential reports clients have included: II under Florida Statute 'rf Cit of Miami Beach i exemptions.She will serve • y Palm Beach County i • City of Coral Springs • Martin County j as the leader of the alexandra.lorie • City of Coral Gables • Miami-Dade County information technology @rsmus.com • City of Hollywood School Board consultants assigned to. • Cityof Miramar • South Florida Water ! review systems and controls • ' City of Pompano Beach Management District .I • City of Deerfield Beach • School Board of Broward utilized through the City's • City of Jacksonville County information technology • City of West Palm Beach • School District of Palm systems that will be relied. • .Miami-Dade County Beach County • Broward County Clerk of upon as part of the audit. Courts She will oversee testing ' • City of Miami,Department done of the City's of Off-Street Parking technology system access including general and application controls. Page 36 t n +linQc-,-) !0 fo (A. a 6 4/. .11) 'Team.Member , Experience Role and Value to the € ,City, i Bryan Thompson Bryan has over 30 years of security experience. He works I Bryan will serve as the Director, cyber-security with a variety of organizations with a focus on planning, cyber-security consultant to ' specialist : design and delivery of high-performing, cost-effective identify any security risks, ' - • - enterprise security programs. Bryan has extensive creating options and experience developing and implementing information implementing solutions for r security management processes, concepts solutions and the City. He will perform technologies. Bryan also has extensive experience in IT cyber-security vulnerability .r,, penetration testing and cyber-security assessments and similar bryan.thompson j services.as needed by the @rsmus.com , City. Bryan brings his expertise to our . engagement team to • evaluate the City's IT systems and related security. He will also oversee our high-level penetration testing i Iperformed on the City's systems,with your permission in advance. Lisa Chanzit Lisa has more than 36 years of experience providing Lisa will assist the team with Actuarial specialist'. ' . j consulting services to governmental and not-for-profit the review of actuarial clients.As a director in the Actuarial Services practice of , I reports as a subject-matter r/ 0.` ;' RSM's Human Capital Services unit, Lisa provides actuarial expert. She will provide ' `t, I consulting services for self-insured and fully insured plan independent reviews of the 'Iv;1" , sponsors in the public and private sectors.A sample of City's actuarial reports as. `..1 ' Lisa's Florida government clients have included: part of our audit approach. lisa.chanzit . . I . . She will focus on the @rsmus.com i • City of Miami Beach • City of Jacksonville ' methodologies used and • City of Coral Gables • City of Pompano Beach , significant assumptions • City of Deerfield Beach • Palm Beach County • City of Hollywood • School Board of Broward applied. In the past for some • City of Miami . County clients, Lisa has noted • • City of Miramar • Miami-Dade County School I unique trends particularly Board around workers • N compensation expense which we have been able to provide to our clients so • they can better assess their self-insurance program and expenses. She will provide additional value as a consulting actuary to . • support the effectiveness of . our audit but also to bring value-added observations Page 37 I 1 . , frAP 04G- • 4D M tom► ti'► QQ Team Member Experience Role and Value to the City { . I and recommendations where appropriate to the _ City. David Luker — i David has over•11 years of public accounting — ~ David will serve as the Construction cost specialist experience that includes planning and managing construction cost • construction closeout audits, facilities and specialist on the City's 'construction internal audits; contract compliance audit. As part of our , engagements, and other consulting services. He is, overall risk ty' responsible for project management, risks and assessment, David will • controls, business process analysis, contract help evaluate if there • david.luker compliance services, risk management, and forensic are any audit risks @rsmus.com , investigations.-A sample of David's Florida public . associated with major-- . sector clients have included: construction The State of Florida endeavors undertaken • City of Orlando by the City. University of Central • • Jacksonville Aviation ''Florida • Authority • ' . : • Arlington County,Virginia • Osceola County School • Brevard County District • Broward College' Prince William County, • School Board of Broward . Virginia • County • School Board of B-revard ' — — __ County Page 38 i 1M I Q AD M141. Tab 3 — Approach and methodology Submit detailed information on how Proposer plans to approach and accomplish the required scope of services, including detailed information, as applicable, which addresses, but need not be limited to: implementation plan, project timeline, phasing options, testing and risk mitigation options for assuring project I implemented on time and within budget. Describe the respondent's approach to this audit engagement. This should include at least the following: 1. Development of the audit program. Client service relationship Our relationship with the City will be based on certain long-standing principles, including: (1101 • An outstanding client service experience,focused on efficient and well-coordinated services • Commitment to completing work within the agreed-upon time frame, . $ assuming your preparation of requested schedules and other supporting documentation before we commence fieldwork and • • assuming no unforeseen technical issues • Staffing of the engagement team based on industry-specific qualifications and technical experience • Hands-on approach to planning, with management meetings and conference calls held routinely to discuss changes to the business, industry issues, new accounting pronouncements, etc. • Fees that are reasonable based on the scope of work • Transparent approach to billing, with clear communication and an emphasis on avoiding surprises Audit services Designed for organizations like the City, the RSM audit methodology allows your engagement team to use professional judgment in planning an overall audit strategy. Proactive resolution of accounting issues We find that year-round communication and a proactive approach to accounting issues help clients avoid surprises at the end of the audit process. For this reason, we encourage clients to call us to discuss new . transactions as they arise throughout the fiscal year. No surprises In serving the City, we will communicate with you frequently throughout the audit process and throughout the year to address and resolve issues, new accounting standards and changes in your organization. We will communicate, at a minimum, on a weekly basis and will do everything possible to ensure there are no surprises. Page 39 @GOO QQ ..1•;‘,1 OA* Smooth transition to working with us The City wants the transition from your prior firm to be smooth and orderly—resulting in as little distraction as possible.Any change of this nature will result in some disruption; however,with our extensive experience in succeeding other accounting firms,the disruption is minimized. Our process for transitioning clients from their prior auditors to our services emphasizes early planning,with a high degree of partner and manager involvement. In this case,we have succeeded your current auditors in Broward County and City of Tampa and encourage you to ask them about the smoothness of the transition process. , Work plan Key steps in the RSM audit process: UNDERSTAND RISK FURTHER AUDIT EVALUATION a=, DELIVERY ',THE CLIENT ASSESSMENT PROCEDURES •Business d ` •Risks of material •Tests of controls y •Audit evidence ; •'Issue reports objectives misstatement ; Substantive •Uncorrected •Financial ! • .(error or fraud) i'•. ,-analytical ' misstatements performance •Significant risks procedures Accountingpolicies •Control , •Substantive deficiencies tests of details •Internal control • Understand the client.We learn as much as possible about your business up front in order to properly understand the account balances,classes of transactions, and disclosures relevant to your activities.This allows us to identify important areas of focus. • Risk assessment.We assess the risk that errors or fraud may cause a material misstatement of financial statements.We next decide whether the identified risks relate to specific relevant assertions related to significant account balances, classes of transactions, disclosures,or whether they relate to the financial statements taken as a whole and potentially affect many relevant assertions.We then determine which of the identified risks of material misstatement are significant risks that require special audit consideration. During our risk assessment we will involve our subject matter specialists, including actuaries, IT professionals and construction cost specialists,to look for risks we as auditors would not identify.This is part of our holistic approach to serving our clients and goes beyond what our competition brings which is usually just traditional IT controls specialists and is part of the added value we bring as a national firm dedicated to serving governments.We also identify internal control deficiencies or efficiency opportunities as part of our risk assessment process. • Further audit procedures.We next determine the nature,timing and extent of tests of controls and substantive procedures necessary to address the risks identified.We select transactions for testing using various approaches,which may include specific identification of transactions or may involve sampling.When audit evidence obtained from the audit procedures results in identification of previously uniden)ified risks of material misstatement or contradicts planned risk assessment procedures,we revise the assessment and plan and perform additional audit procedures to reduce risk of material misstatement related to those assertions to an acceptably low level. Page 40 AMOINA QQ ©,r,ch VP VP' giro WO • Evaluation.At the conclusion of the audit,we evaluate the sufficiency and appropriateness of the audit evidence obtained and whether the assessments of the risks of material misstatement at the relevant assertion level remain appropriate.We may redesign planned audit procedures based on our evaluation.We also evaluate the effects, both individually and in the aggregate,of factual, judgmental, and projected misstatements that are not corrected by the organization.We communicate all misstatements identified during the audit, other than those we believe to be trivial,to management and the audit committee on a timely basis. • Delivery.Our audit culminates with the issuance of a report on the financial statements and compliance, report on internal control over financial reporting, report to the audit committee and, if applicable, communications of material weaknesses and significant deficiencies. Audit innovation We continually invest in audit innovation because audit quality is paramount to what we do, and we want to perform audits in the most productive manner possible.Technology automates certain audit procedures and the flow of audit documentation;this automation, in turn, enables our auditors to more intently focus on what really matters—the design and results of audit procedures related to the areas with the highest risk. ,,:.t >,AUDIT.INNOVATION ;.:< Rl CaseWare IDEAS RSM Collaborate Use of data visualization Sharing and managing For digging deep To connect teams and To see the big picture. ' workpapers via the cloud. Into big data. simplify workflow. Computer-assisted audit tools we use to achieve a more effective and efficient audit are summarized below: CaseWare,for sharing and managing workpapers via the cloud.We use CaseWare software to share and manage workpapers and audit programs through an online cloud database,which results in increased audit productivity. This tool streamlines audit work by enabling more efficient documentation and review of a comprehensive, standardized audit file.As part of building our knowledge of your business,we focus on obtaining an understanding of the internal control over financial reporting that is sufficient to identify and assess the risks of material misstatement.We then develop an audit plan that is responsive to those risks. CaseWare efficiently facilitates our documentation of: • Your financial processes and internal control procedures • Our testing for an understanding of the actual operation of these processes and controls Page 41 A- 4.0 ► . qw) 410) Q(;) IDEA®,for digging deep into big data.We use IDEA as our data mining and extraction tool to analyze big data and gain audit insights from that underlying data. IDEA improves audit efficiency in many functions, such as: (a) sampling, including selection and evaluation for systematic, random, stratified random, monetary unit and attribute sampling; (b)field manipulation that allows fields to be appended for calculations and recomputations, facilitates account reconciliations and analyzes the population for major or unusual transactions; and (c)field statistics that display and print statistics about transactions. IDEA also can: • Search complete data sets, such as when probing for fraudulent journal entry characteristics during journal entry testing • Perform data combinations, such as-when pulling general ledger information into one file or , comparing accounts payable to disbursements RSM Collaborate,to connect teams and simplify workflow. Our proprietary RSM Collaborate tool—a secure, internet-based platform designed to optimize engagement management and accountability— enables RSM and client teams to stay in touch and simplify the work-flow process. The City stakeholders can leverage Collaborate to stay in touch with your engagement team from any location. Collaborate enables us to collect, organize and track your documents. The impact: Collaborate drives efficiencies and enhances productivity in the timing of our audit of those documents. The City and RSM will benefit through an efficient exchange of files and a reduced risk of unauthorized access to data. Other Collaborate features include: • Engagement calendars to track milestones • Functionality to assign tasks and due dates and track related progress • Protocols to manage document iterations, assisting with version control • Safeguards to enable secure transfer of files, centralization of data and protection of confidential and sensitive information • Ability to control information access with respect to distinct tasks • Capability of issuing updates, alerts and notifications of pending deadlines • Color correlation graphs of shipping costs with related sales Detailed information regarding our audit methodology and approach Planning phase The first step of the audit is preplanning, which involves meeting with those charged with governance, including the(City Commissioners and City management to clearly identify the lines of communication, perform a risk analysis,' discuss audit scopes and alternatives, discuss any concerns and set expectations.We will also establish a preliminary timetable to ensure a smooth audit process. A thorough understanding of your organization and its operating environment is essential for the development of an audit plan for an efficient, cost effective audit. During this phase, we will meet with appropriate personnel to develop and document our understanding of your operations including business concerns and challenges and, at the same time, give you the opportunity to express your expectations with respect to the services that we will provide. Our work effort will be coordinated so that there will be minimal disruption to your staff. During this phase we will perform the following activities: • Review the regulatory and statutory compliance requirements within which the City operates. This will include a review of applicable federal laws, state,statutes, the City's code of ordinances, resolutions, Page 42 nn n�► 41i0, tet► 110 QC) • debt instruments, contracts, other agreements and minutes of meetings of the City commission and various committees. • Review major sources of information such as the City's adopted budget, organization charts, procedures manuals, financial systems and management information systems. • Develop and document our understanding of the City's internal control processes. • Develop and document our understanding of the accounting and information systems. • Consider the methods that the City uses to process accounting information which influence the design of the internal control. This understanding includes knowledge about the design of relevant policies, procedures and records and whether they have been placed in operation by the City. • Identify and resolve accounting, auditing and reporting matters noted during planning. • Significant areas will be determined based on the completion of the procedures above. We anticipate focusing on risk management, federal and state major programs, bond and loan agreement compliance, Phase II:internal control evaluation and risk assessment RSM will evaluate the City's system of internal control to assess the extent it can be relied upon to ensure accurate information, to ensure compliance with laws and regulations and to provide for efficient and effective operations. Internal control is a process, affected by management and other personnel designed to provide reasonable assurance of achieving objectives. Our assessment of internal control is concentrated in the following areas: • Inquiries of appropriate entity personnel regarding the design and/or application of a relevant internal control policy or procedure including the classes of transactions to which the policy or procedure applies, how it is applied and by whom, and the disposition of exceptions detected by the policy or procedure. • Inspection of documents and/or reports evidencing the design and/or application of the relevant policy or procedure by entity personnel; noting how the policy or procedure is applied and by whom,the classes of transactions to which it applies and the disposition of exceptions detected by the policy or procedure. • Observation by the auditor of the performance of the relevant policy or procedure by entity personnel; noting how the policy or procedure is applied and by whom; the classes of transactions to which it applies and the disposition of exceptions detected by the policy or procedure. • Re-performance of the application of the policy or procedure by the auditor and comparison between the results obtained by the auditor and the results obtained by the entity personnel. • Our audit approach is based on our understanding of your internal control systems, as well as how your staff members interact,with them. This helps us to evaluate the design of your controls as well as determine the key controls which we test to ensure they have been implemented. Understanding of the controls and testing the significant control areas will allow us to reduce substantive testing procedures, focus the audit approach and gain efficiencies as we audit the organization. Page 43 ' O ©QQ • Information technology(IT) audit integration • The City utilizes the following systems: Munis—ERP system: general ledger, fixed assets, payroll; Energov/Eden: specific revenues—permits, business taxes, special assessments, and utility billing; Misc. Systems: various systems for various receipts databases, parks and rec and other nonmajor systems. We will work with these key systems and processes, monitoring how they contribute to your overall processing environment and affect the reliability of financial information. • Our objective is to assess whether the standards of security, integrity, continuity, and control remain conducive to reliable processing, consistent with the City's technology standards and appropriate to safeguard your information assets. • IT control environment overview • Technology is instrumental in driving productivity, efficiency and operational growth.We understand the complex challenges you face, with a changing landscape and dynamic plans to establish a new organization on a lean budget.We will align people, processes and technology to help meet your departmental strategic goals. • A key component of our audit methodology is an integrated approach with our technology risk consulting (TRC) practice. While the fundamental requirements of a financial statement audit are built on the key business processes and corresponding financial transactions, we recognize that many of this critical activities are enabled by technology. Within.our RSM engagement team, our financial auditors collaborate extensively with our TRC team members,who are best positioned to determine how to obtain the information we need and how best to understand and evaluate your critical financial statement applications, supporting systems and databases efficiently and effectively. This bridge approach allows us to penetrate the"black box," rather than audit around it, and provide solutions that could also potentially streamline automated processes, as well. Our TRC teams comprise subject matter specialists who have extensive experience auditing various tier 1 applications, supporting systems and databases, such as Munis, PeopleSoft, Oracle, SQL and many more. Specifically,Alexandra Lode identified to lead the IT services in this engagement, has led a number of integrated financial audits where she managed the development of a common IT general controls framework, application security controls, role-based security separation of duties analysis (which resulted in efficiencies within the audit strategy) and stronger relationships with the IT and accounting organizations.Additionally, Alexandra has helped define and implement a data analytics strategy that established a continuous risk assessment program and a mature continuous controls monitoring activity. • Page 44 i eille 0an fa C:21(;) 0 *II) 06' - During the early planning stages of our audit approach, our integrated team will identify the key in-scope financial processes and significant accounts, based on the overall planning materiality.As key processes are identified, our team will perform audit procedures to evaluate the business processes and identify the key manual and automated controls that mitigate the risk of financial statement errors, as noted in the graphic below. Business processes Financial transactions i -, Manual controls Application controls i t ': •` v nt' , *, : ", , Apps '" r seg`ept on of duties Computor-generated Agpttcz4toe controls 4 As __,...I .._� mos • .- 1 Authorizations O 1 ., t 0 8 Performancereviews ° - ` ' ' I _ Reconciliations __ APp� t t e . Precision of rnanagernernrevte v. ''' y��t /n - o LL. I i i IT general controls IT general controls (ITGCs) Our IT audit approach has been designed to gain an understanding regarding the design and operating effectiveness of ITGCs,in support of the overall IT control environment.We will perform an evaluation of the critical applications, supporting systems, databases, processes and related procedures. We will work closely with management to frame our exact procedures accordingly, during the risk assessment and planning phases of our project. Our risk-based approach will include the following procedures: Area of focus Business risks Description of key considerations • Risk of undefined • We will review the IT policies and procedures Entity-level policies and procedures including security, access management, controls change management, managed services procedures and backup policies. . Page 45 **1" 4n ma41P QQ ! • ' !Area of focus Business risks Description of key considerations • Risk of unauthorized • We will assess the change management ;; changes to financial controls in place over the internally developed applications and applications, to confirm that changes were supporting systems ; appropriately authorized, tested and approved, and that production monitoring is in place. 'Assessment of change • Segregation of incompatible duties will be management analyzed in the change management controls environment to make sure that individuals are not able to develop and implement changes into.the production environment, and that direct DBA access to databases is limited and controlled. • Risk of inadequate • We will assess the controls in place around information security user provisioning, including granting access to new users, removing access for terminated • Risk of inappropriate users and changing access for transferred access to financial users. Assessment of logical access statement data • Management's periodic review of user access controls will be tested for completeness and timeliness. • • Additionally, we will assess the.key applications, operating systems and databases for password strength, security configuration and privileged access. • Risk regarding the loss • We will assess the key IT operations of data or unavailable processes, including backup and recovery,job IT operations systems ; scheduling and incident management, to assessment determine whether appropriate controls are in li place to facilitate availability of critical information. I I Service Risk related to • We will perform an assessment of the Organization • inappropriate vendor applicable SOC reports including bridge letters Controls (SOC) reliance provided by the service providers. reporting analysis Page 46 4• mk toQQ IT-enabled business processes through automated controls Across each of the identified significant transactions and business processes relevant to our audit strategy are key controls that support the completeness and accuracy of the financial statements. Those controls are broken down between manual (i.e., functional user driven activities) and automated (i.e., computer generated activities)controls. Our audit approach is designed to evaluate both of those fundamental controls areas. Specific to the technology enablement considerations, our procedures are designed to focus on the following automated controls items areas: Area of focus Business risks Description of key considerations — Incomplete data • •_ We will review application controls which are processingconfigurable or embedded controls within the • critical financial•applications that drive - efficiencies within.the IT-enabled business processes. Those controls include but are not limited to: Application • •controls - Calculations Edit checks Data transfers Separation of duties - Configurable thresholds • • Approvals/workflows • Risk of misstated . ] • We will evaluate controls over the completeness financial information and accuracy of computer-produced information Computer- (i.e., source of the information and generated management's controls to verify information is reports complete and accurate), also considering effectiveness of information technology general controls (ITGCs). • Page 47 A,h Vim► Q As compliance demands evolve and regulatory requirements increase, companies like you seek to improve the quality of business operations and strengthen security risk and controls through implementing enterprise resource planning (ERP)system. In addition, businesses that already utilize ERP systems seek ways to continuously optimize controls to gain audit efficiencies or improve operational IT risk governance. Whether it is implementing or upgrading a new ERP system,or to life cycle= = optimizing your current ERP controls compliance needs, our wmplemen r;,,9 • ''�•ti professionals have extensive experience and knowledge of a variety of ERP strategies and platforms(i.e., SAP, Oracle,. �C\ 1 PeopleSoft, etc.). Many of our IT risk professionals started their i F ERP O Risk Advisory careers working intimately with ERP systems.Therefore,we it Services { understand operations at a functional level, allowing for better ° �o advice to our clients to mitigate risk or improve IT governance and reduce costs at any state of the ERP life cycle. pgrading % We have developed an application security, configuration and process control assessment tool suite that includes both proprietary and commercially available tools.These tools allow us to drive efficiencies across the financial audit strategy,through automated means leveraging proprietary rule books. Additionally, we leverage nationallyy developed, specialized ERP content,which enables our teams to review ERP controls effectively and consistently.The breadth of functionality makes a wider range of ERP assessments more feasible,from analyzing application security models,to assessing system configurations,to reviewing data permissions. Implementing data analytics to drive audit efficiency Traditional internal controls most often rely on audit-driven, statistical-sampling methodologies.These controls only focus on the largest transactions, or those with the highest perceived risk based on a single parameter.Thus,vast populations of data are never examined. Our approach is to integrate analytics throughout the entire audit lifecycle. From developing the initial risk assessment, using real-time data to drive a dynamic audit program,to establishing a pilot program of repeatable analytics that may result in a continuous assurance or monitoring program, our data analysis team members are capable of leveraging various tools to drive efficiencies across the financial audit strategy. Data analytic Integration Estahilshanalytic proram Conduct a data-driven risk Define ad hoc and Develop and execute FacIitatedynamic strategy assessrnentand sainping repeatable analytic tests continuous assurance management reporting Program We have developed a proprietary tool, mAnalytics,that takes a powerfully different approach.We do not sample some of the data; we analyze every appropriate piece of information—not just within your company, but also in a variety of public databases—looking for connections or discrepancies that might indicate fraud or provide other valuable business insights.This approach supports you in targeting those elements for further examination. Page 48 ramorArA QQ • 471) Orio 41iP (10) mAnalytics has a highly adaptable methodology customizable to specific needs. Most commonly, mAnalytics is used to analyze data for red flags of fraud, errors and control issues. Using a risk-based approach, we: • Highlight the most concerning records among 100 percent of the population • Assign a risk score to each individual vendor, employee, customer or other entity of interest • Rank the entities by risk to concentrate investigative resources and minimize costs • Deliver a read-only working copy of the review tool, with complete test results, so future self-reviews can be performed if needed Benefits of using mAnalytics • mAnalytics is more efficient. Because the process is highly automated, it not only broadens the reach of your internal control efforts beyond statistical sampling to include all data, it does so while placing minimal demands on your people. • mAnalytics is more effective. Since it targets activities with a higher risk of being fraudulent, your people waste less time on innocuous activities and more time analyzing those with the highest . potential to point to fraud. • mAnalytics helps strengthen your controls. It can draw attention to problematic activities that are not fraudulent, but that are flagged as high risk due to current control weaknesses. This allows you to proactively strengthen controls before those weaknesses are exploited for fraudulent purposes. • mAnalytics sends a clear message to your people.An important part of any fraud prevention program is sending a strong deterrent message to employees who might consider fraud. By making it clear that all data is now being evaluated, employees will no longer think they can avoid protection just by gaming known control parameters. • • mAnalytics spotlights wasteful practices.Vendors with multiple accounts and duplicate payments can sometimes indicate fraud; however, sometimes they just point to careless or wasteful practices. Waste might not be a crime, but it can be equally destructive to your bottom line. Risk assessment The development of our audit plan is dependent on our understanding of your operations and our assessment of current risk factors. This approach requires the careful exercise of professional judgment developed through extensive experience with audits and is based on our assessment of risk of error in the financial statement line items and for the City as a whole. As a result, we will focus our audit effort in the important, high risk areas and minimize our time in the low risk areas ensuring you of a cost effective and efficient audit. Our actuaries and other subject matter specialists will be engaged as needed in the risk assessment process. Fieldwork phase Prepared-by-client schedules We will work with financial management to develop a prepared-by-client(PBC) listing. In addition, to help manage and accelerate the audit process, we will develop an audit closing schedule, with the PBC items, as well as key milestones, assigned responsibilities and due dates. PBCs and related information can be provided to us electronically and transferred to our secure laptop computers for audit. Clients can upload requested schedules onto ou'r secure file transfer protocol server that can be accessed only by designated RSM and client personnel. Page 49 64 0t reA an 00► 4r► �► � . It is important to note that, wherever possible, we try to utilize reports and schedules already used by your staff throughout the year to reduce the amount of audit preparation work your team needs to do. Interim fieldwork Interim fieldwork will be focused on developing a deep understanding of the City's significant transaction cycles. Our efforts will primarily focus on the revenue, expenditure and payroll cycles. During this phase of the audit we will request the City's internal control documentation over the major transaction cycles.We will,also need access to personnel who initiate, authorize, process and record transactions in each of these cycles. Prior to the initiation of year-end fieldwork, we will schedule evaluations of the City's electronic data processes (EDP) systems. This phase of the audit will be conducted by TRC as described above. If it is determined to be effective, we may,also have TRC conduct application level testing to provide substantive audit evidence over the specified transaction cycle. For example, if we successfully • conducted application level testing in the water and sewer system, we could place reliance on the metering and billing system which would reduce our reliance on substantive testing. At this point we will also pull statistical and non-statistical samples of revenue and expenditure transactions for testing of controls and tests of details. We try to perform as much testing as possible to reduce the timing and impact on your staff at final. Final fieldwork Year-end fieldwork will consist of substantive testing of account balances in addition to the completion of control testing that was performed at interim. The following is a summary of our anticipated audit approach by audit area. However, one of the core principals of auditing is unpredictability which is built into every one of our audits.Accordingly, the below list is not intended to be a comprehensive list of the procedures we will perform as the City's auditors. Cash and cash equivalents Confirmation procedureswill be performed to test the existence of cash. City bank reconciliations will be tested for accuracy and cutoff procedures will be performed at the balance sheet date.Additionally, we will use IDEA software to test the sequential integrity of the City's check registers. Investments Investment balances will be confirmed for the City. Valuation testing will be performed through the use of our internal valuation specialists. Receivables Receivable balances will be confirmed on a sample basis. A statistical sampling model will be used to select accounts for confirmation. For certain receivables, confirmations are not effective(water and waste water and sanitation receivables). For these types of receivables, alternative procedures will be performed. Capital assets Capital asset additions will be tested for existence.Valuation will be tested primarily through substantive analytic procedures. Disposals of capital assets will be tested for proper authorization. If impairment of existing capital assets is indicated, we will examine management's calculation of the impairment loss. Page 50 (D,r,„ 4t► (►n ( M UPQQ • Vouchers and accounts payable/due to other government agencies The completeness of vouchers and accounts payable will be tested though the examination of cash ' disbursement registers subsequent to the City's year-end. If risk assessment procedures indicate a risk that recorded balances are incorrect, we will design substantive audit procedures to test the existence_of those balances. This is often accomplished by using our IDEA software to"match"subsequent cash disbursements to the accounts payable detail. Accrued salaries/accrued compensated absences Accrued salaries and accrued compensated absences will be tested through the use of substantive analytic procedure designed for a high level of precision. Control testing will be performed over the entire payroll cycle. Bonds, notes payable and leases Bonds and notes payable will be subject to confirmation procedures.Additionally, RSM will test compliance with debt covenants that are material to the financial statements. For example, RSM will test minimum debt service coverage as well as minimum debt reserve requirements. Pension, self-insurance and OPEB liabilities The recorded values for pension, self-insurance and OPEB liabilities are dependent on actuarial valuations. Our approach to auditing these valuations is threefold. The first step is to provide the valuation reports to our internal subject matter experts. RSM actuaries will evaluate the methods used in calculating the liability as well as the assumptions used in developing the models. Lastly, we will evaluate the professional credentials of the City's actuaries for self-insurance, pension, and OPEB and confirm their independence from the City. Net position/fund balance Equity balances will be rolled forward from the prior year and recalculated by the auditors. Restricted balances will be traced to external restrictions or enabling legislation. Committed and assigned balances will be traced to ordinances and resolutions of the City Commission. rF Revenues Revenues are subject to a mixture of procedures. Depending on the nature of the revenue, we will perform control testing, substantive analytics and substantive tests of details. Typically, revenue cycles that are comprised of large numbers of transactions and follow a predictable pattern (water and waste water, sanitation and building permits) are more efficiently tested through substantive analytics and tests of control. Revenue cycles that are comprised of few transactions with large values per transaction (grant revenue, sales tax and shared revenues)are effectively tested through substantive tests of details. Expenditures/expenses Our approach to testing expenditures/expenses is to segregate transactions by cycle. Our typical cycles include; payroll and related expenses, expenditures/expenses for goods and services, capital outlay and debt service. Due to the volume of these transactions we generally employ dual purpose testing (control testing combined substantive tests of details) utilizing a statistical or non-statistical sampling model. Tests are designed to provide evidence over completeness, occurrence, accuracy and classification. Any identified errors are evaluated by projecting across the population. Expenditure testing,where possible, will also incorporate compliance testing selections needed for the federal and state single audits to • increase efficiency. Page 51 rA 4,0 VP 410 qv QQ • New accounting pronouncements The following is a summary of recently issued professional standards that may be applicable to the City. We will review each of these, and the potential accounting and reporting impacts, with you. GASB Statement No. 83, Certain Asset Retirement Obligations, was issued November 2016. The Statement establishes guidance for determining the timing and pattern of recognition for liabilities and corresponding deferred outflow of resources related to such obligations. This Statement is effective for reporting periods beginning after June 15, 2018. GASB Statement No. 84, Fiduciary Activities, was issued January 2017. The Statement establishes criteria for identifying fiduciary activities of all state and local governments and clarifies whether and how business-type activities should report their fiduciary activities. This Statement is effective for reporting periods beginning after December 15, 2018. GASB Statement No. 87, Leases, was issued June 2017. This Statement increases the usefulness of governments'financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. This Statement is effective for reporting periods beginning after December 15, 2019. GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements, was issued April 2018. This Statement defines debt for purposes of disclosure in notes to financial statements as a liability that arises from a-contractual obligation to pay cash (or other assets that may be used in lieu of cash) in one or more payments to settle an amount that is fixed at the date the contractual obligation is established. This Statement is effective for reporting,periods beginning after June 15, 2018. • GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period, was issued June 2018. This Statement establishes guidance designed to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period. It also simplifies accounting for interest cost incurred before the end of a construction period. This Statement is effective for reporting periods beginning after December 15, 2019. GASB Statement No. 90, Majority Equity Interests, was issued August 2018. This Statement clarifies the accounting and financial reporting requirements for a state or local government's majority equity interest in an organization that remains legally separate after acquisition. This Statement is effective for reporting periods beginning after December 15, 2018. Debt financing experience Debt is a significant area for the City. RSM has extensive experience with larger municipal debt issuers. Most of our government clients are active in the market. )-- We frequently interact with financial advisors (FAs), underwriters and bond counsel firms in due diligence meetings or reviews of official statements. We are often added to the distribution lists and review the trust indentures and related documents. RSM is familiar with various debt related best practices and reports, including the following: • GFOA's best practices and advisory publications • Arbitrage rebate requirements and reports Page 52 r4vpam QQ ®© � • ; (igo • Recording of the issuance, premium or discount and disclosure of refundings and swaps • Rating agency outlook reports and ratings methodology • SEC Rule 15c2-12 filing requirements on the Electronic Municipal Market Access (EMMA) Consent and comfort letters: We work with many clients and their bond counsel to determine whether a separate opinion is required. Our procedures may include review of the POS and official statements and related documents.We may perform post-balance sheet review and update procedures.We often recalculate the entity's debt coverage requirements and test applicable financial covenants. In many cases, our audit report may be included in the offering statement, but the client or bond counsel does not require a consent letter.We therefore are not"associated"with the contents of the official statement. In these cases, our clients typically include the following disclosure: RSM US LLP, our independent auditor, has not been engaged to perform, and has not performed, since the date of its report included herein, any procedures on the financial statements addressed in that report. RSM US LLP also has not performed any procedures relating to this official statement. Debt types: RSM has experience with all types of debt financing. We have been involved with • Bond anticipation notes (BANs) • Tax anticipation notes (TANs) • General obligation bonds (GOs) • Certificates of participation (COPs) • Pension obligation bonds (POBs) • Build America bonds(BABs) (taxable) • Construction bonds. • Revenue bonds • Refundings/defeasances • Forward purchase agreements • Asset sale/leasebacks (PPPs) Uniform Guidance Audit A substantial number of our public sector and higher education clients receive federal and state funds and require a single audit in accordance with OMB Uniform Guidance and the Florida Single Audit Act, as applicable. Our team of professionals possesses comprehensive knowledge of accounting requirements, federal procurement regulations and cost accounting standards and their impact on organizations. As a firm, we have performed hundreds of single audits annually and have received extensive training in governmental accounting, auditing and financial reporting. In addition, our professionals receive specialized training on the compliance requirements of OMB Uniform Guidance, the Florida Single Audit Acrand the use of the related compliance supplements, as applicable. We are familiar with all technical guidance, including the OMB Compliance Supplement and Federal Cost Accounting regulations and we are familiar with the new requirements that have been promulgated in the Uniform Grant Guidance. Nationally, RSM participated as an advisor to the President's Council on Integrity and Efficiency through the Quality of Audit Roundtable. We closely monitor the results of Quality Control Reviews and the National Statistical Sample project. Page 53 rOPIAMA01111411:40 ASD M QQ ©© Ø " Our approach for auditing the City's schedule of expenditures of federal awards (SEFA)and state awards will involve the following steps: • Test that the amounts reported in the SEFA reconcile to the underlying general ledger that is the subject matter of our audit • To the extent that variances exist, perform procedures to audit the reconciliation of balances in the SEFA to the general ledger • Identify and select major federal programs or state projects under the criteria defined in the recently issued Uniform Grant Guidance and Florida Single Audit Act • Review management's assertions of corrective action taken with respect to previously communicated findings and use information about prior findings in connection with our assessment of risk • Consider communications from the cognizant agency or other oversight agencies • Communicate our approach in entrance conferences and our training program Major program determination Our testing will be sufficient and specific enough to allow opinions on each of the City's major programs. We will undertake the following: • Identify and select major federal programs or state projects, under the OMB Uniform Guidance and Florida Single Audit Act criteria • Develop a major program rotation plan coordinated with the group auditor, as appropriate • Review the number of reported findings, to assess risk • Consider whether certain types of findings are recurring over the last several years • Be alert for communications or reports from the cognizant agency and other federal agencies • Communicate our approach in entrance conferences and our training program Each major program requires a separate opinion on compliance with'federal laws, regulations and provisions of applicable agreements.We will develop procedures and: • Hold a pre-audit conference with the respective accounting managers and grant administrators • Review the population of grants, the effectiveness of controls and the availability of records • Obtain copies of the grant agreements under which federal financial assistance is provided • Document program requirements, laws and regulations, and any program-specific compliance requirements contained in the contract agreements • Review reports completed to meet the federal financial reporting requirements • Test the Schedule of Expenditures of Federal Awards and State Financial Assistance • Examine any external audit reports for findings or questioned costs Determining laws and regulations applicable to the City Local governmental entities are subject to various laws and regulations that could impact the nature, timing and extent of audit procedures performed. Our audit approach encompasses an understanding of these laws and regulations, how they impact the financial statements, and devises appropriate audit procedures to(a) assess whether there have been events of noncompliance that may have a direct and materialeffecton the financial statements or(b) provide a basis of reporting on the City's compliance with such laws and regulations. Page 54 44) M MP �► .•(IA QQ Reporting phase The final segment of our audit plan consists of resolving any open testing, review of the audit work papers and financial statements and the issuance of our opinions.A key aspect of our audit approach is the wrap up and review process. Our approach to completing the audit requires our senior team members to be in the field early and often. This means that you will see the engagement partner and manager often during the audit in your offices.We do not perform reviews remotely or"in the office". Rather, we conduct them in real-time in your offices. This helps ensure that you will not have any late surprises that are identified by the partner reviews. This also provides for increased efficiency in the audit and makes our senior professionals available to City staff throughout the audit.We schedule the engagement to complete all reviews in the field, issue our opinions and turn out the lights and leave the City facility. Our approach to the audit will include, at a minimum, the following reviews of the financial statements, audit reports and workpaper files: Review Nature of review Engagement performance and administration Work of all assistants in detail, including workpapers, review, done by in-charge financial statements, audit report, compliance reports ' and management letter- Fairness review, done by engagement All workpaper files,financial statements, audit report, manager compliance reports and management letter Partner review, done by engagement partner Financial statements, audit report, compliance reports, management letter, workpaper files for significant and critical areas, concurrence with conclusions of engagement team Concurring review, done by engagement Financial statements, audit report, compliance reports quality review partner and management letter. Workpaper files for significant and critical areas, concurrence with conclusions of engagement team. Utilizing our wealth of understanding and experience serving Florida government entities,we have developed an audit approach tailored specifically for the City, with particular consideration for your controls, systems and personnel resources. Previously in the section on the audit workplan we laid out the individual areas and type of work that would be performed and provided an overview of our audit approach. Our tailored approach has been extremely successful in helping our clients to more effectively manage risk in these litigious times. Two key reasons for this success are as follows: • Our planning process includes extensive involvement from management to help us identify critical business and accounting issues. Your input will be incorporated into our risk assessment process, fraud risks, business changes and overall audit approach, ensuring that our audit processes are uniquely catered to your challenges,and most importantly, our intensive_planning process will provide Page 55 47P M 4160 Ai O QQ your staff with a specific understanding of what is expected of them, minimizing disruptions to everyone's work schedule throughout the year. • We truly differentiate ourselves through a high level of partner involvement. Our senior level professionals will be involved throughout the entire process, from planning through report issuance. This will result in process efficiencies, better communication among audit staff members and a more thorough explanation of audit result and recommendations for the future. Ultimately, our audit process allows us to issue an opinion on your audited financial statements. The City will receive a management letter as well, that goes beyond the audit and outlines detailed ideas and recommendations for improvement in various areas of your organization. These insightful recommendations are designed to help you not only achieve your objective, but also to improve the true value of the organization. 2. Organization of the audit team and titles of team members and approximate amount of time each such class of member will spend on the audit. The information presented below is based on our experience working with other similar entities and indicates the approximate amount of time, by level, each team member will be spending on the audit. The organizational chart of the audit team and titles of each team member is located previously, on page 13. Number of hours anticipated. Fieldwork Partners/ segment Directors Managers • Senior Associates Associates Planning phase 2% •- - — 6%— { -- '_ 10%0" 5% Fieldwork phase 1 1 8 j__— 20 � 25 1 Reporting phase 26 10 5 -- - 1._ Totals _ 5% 20% 40/° 35/° 3. The names of the partner and manager that will be assigned to this engagement and the extent of their involvement with this engagement. Any substitution of these individuals must be approved by the Audit Committee prior to any change of staffing. Brett Friedman and Valerie Colimon are the partner and senior manager assigned to this engagement. Please refer to section 2.2 Qualifications of Proposer Team for a detailed list of the partner and manager assignments for this engagement. Additionally, if for any reason a key member of the team were to leave our firm, the City's Audit Committee will have the right to approve any such replacements to the team. Page 56 • frrIA ifft - ---- Q/ •• 4. The proposed schedule for the audit(s). Milestones and timing Based on your needs for this project, we have developed the following timeline in connection with the services which may be adjusted based on discussion with City management. Milestones Timing • Audit services Pre-audit meeting_ July r.__,_._– -------------_.--- Issue and discuss audit plan J, July J • Interim audit activities July–August 1 Final audit activities , November–Februarys Issue re orts ,VCA GS SNP CT, BBC) 1 December T Final adjustments and corrections to financial statements February Draft management letter j. March_ Issue re ports CAFR, March • Issue reports (Single Audit, management letter, RDA) April_ _ Issue reports (PSF) –– = – — , May – – Exit conference–presentation of audit reports and management letter May to City Commission 5. Any anticipated use of internal audit staff or other City staff. We do not anticipate the need to utilize any internal audit or City staff while conducting our audit. 6. The proposal should indicate if the firm conducts any training for its employees and if City personnel could attend such training. Yearly, we conduct seminars for our clients and friends which covers emerging issues in the government sector. We will provide this training to all the employees of the City, at no charge, for the life of this contract. We also provide technical newsletters and webinars throughout the year to our clients. • Page 57 pQQ 0 TAB 4 -COST PROPOSAL Based on our understanding of your needs, our estimated fees are as follows. Failure to submit,Cost Proposal Form,in its entirety and fully executed by the deadline established for the receipt of proposals will result in proposal being deemed non-responsive and being rejected. Bidder affirms that the prices stated on the cost proposal form below represents the entire cost of the items in full accordance with the requirements of this RFP, inclusive of its terms, conditions, specifications and other requirements stated herein,and that no claim will be made on account of any increase in wage scales, material prices, delivery delays, taxes, insurance, cost indexes or any other unless a cost escalation provision is allowed herein and has been exercised by the City Manager in advance. The Cost Proposal Form shall be completed mechanically or, if manually, in ink. Cost Proposal Form completed in pencil shall be deemed non-responsive.All corrections on the Cost Proposal Form shall be initialed. Auditing Please provide annual auditing fee for each of the audit categories and years listed herein: 2019 } 2020 2021 2022 2023 1 Audit of City's Basic Financial Statement(CAFR) $121,700 $121,700 $125,350 $125,350 $129,000 2 OMB Uniform Guidance/UGG Single Audits 24,000 24,000 24,700 24,700 25,400 3 Management Letter in Accordance with the Rules of the 1,300 1;300 1,350 1,350 1,390 Auditor General of the State of Florida 4 Miami Beach Redevelopment Agency(RDA) 21,000 21,000 21,630 21,630 22,300 5 Miami Beach Parking Systems Funds(PSF) 21,000 21;000 21,630 21,630 22,300 6 Miami Beach Visitor and Convention Authority(VCA) 18,500 18,500 19,000 19,000 19,570 Miami Beach Convention Center as Managed by Global 7 Spectrum (GS) 18,500 18,500 19,000 19,000 19,570 8 Safe Neighborhood Parks Single Audit(SNP) 9,500 9,500 9,785 9,785 10,000 9 Children's Trust(CT) 9,500 9,500 9,785 9,785 10,000 10 Building Better Communities(BBC) 8,500 8,500 8,750 8,750 9,000 TOTAL OF(LINES 1-10)FOR EACH RESPECTIVE YEAR $253,500 $253;500 $260,980 $260,980 $260,980 GRAND TOTAL COST:YEARS 2019-2023 $1,297,490 Page 58 A ©© (a r► •• . • - . - one - - :•..- Th • „• .•, .- . A . - . .. . , . - •, . . .. .-•,. non-responsive and rejected. Bidder's Affirmation Company: RSM US LLP Authorized Representative: Brett Friedman Address: 100 NE Third Ave, Ste 300, Fort Lauderdale, FL 33301 Telephone: 954 357 5721 Email: brett.friedman@rsmus.com Authorized Representative's Signature: Page 59 01 r1►�D M Ort► Qtv,si • EXCEPTIONS We ("Proposer", "us", or"our") have reviewed the City of Miami Beach, Florida ("City") Request for Proposal No. 2019-092-JC ("RFP")for the provision of auditing services, including the terms and conditions ("Terms and Conditions")expected to be incorporated into a negotiated contract ("Agreement"). Except as indicated below, we are prepared to accept such Terms and Conditions. If the City selects us - based upon our response to the RFP, we would seek to negotiate in good faith modifications, additions, or clarifications of the Terms and Conditions of the Agreement in the areas discussed below, and other potential areas, provided that such revisions are consistent with the exceptions noted herein, are in accordance with standard industry practices, and to the extent allowable under industry professional standards. Given our extensive experience in contracting with agencies similar to the City, we are confident that we can reach an agreement with the City on these issues. Notwithstanding anything to the contrary contained in the RFP or this response thereto, our obligation to perform any services is contingent upon the execution by both parties of a definitive Agreement. Specific Comments to Section 0200—Instructions to Respondents &General Conditions: 29. Copyright, Patents & Royalties: • We request modification to the terms of these sections limiting our obligations to claims brought by third parties that arise from our negligent or willful acts or omissions during the performance of our services. Further, we request the addition of language providing that our total liability, except for our indemnification obligations, be limited to an amount equal to the fees we receive under the Agreement, and exclude indirect, consequential, exemplary or similar such damages. 30. Default: We would request clarification that this provision does not apply to negotiations that do not result in an executed Agreement where the negotiations involve any of the topics identified as exceptions or clarifications within this document. 32. Special Conditions:We would request clarification regarding the Special Conditions referenced in this provision, and an opportunity to review the same. Further, we request our standard audit arrangement letter be specifically incorporated into the terms of a final definitive agreement between the parties, and would request modification to this provision giving the terms and conditions of the arrangement letter the highest level of precedence. 40. Indemnification:We would request clarification regarding what persons or entities are referred to as "instrumentalities", as used in this provision.Additionally, we request modification to the terms of these sections limiting our obligations to claims brought by third parties that arise from the Proposer's gross negligence or the Proposer's willful acts or omissions during the performance of our services. Further, we request the addition of language providing that our total liability, except for our indemnification obligations, be limited to an amount equal to the fees we receive under the Agreement, and exclude indirect, consequential, exemplary or similar such damages. Page 60 4D pa �► M QQ • Specific Comments to the Disclosure and Disclaimer Section: We would request language clarifying that any inquiry or investigation rights are limited solely to our time, billing and reimbursable expense records for services performed under the Agreement. We would request additional language clarifying that Proposer's workpapers shall at all times remain the sole property of Proposer in accordance with professional standards. Finally, for clarity, in order to preserve audit effectiveness, we reserve the right to limit any access to our workpapers to a representative of a regulator of the City. Specific Comments to Appendix F—Insurance Requirements: • 3. Our Automobile Liability insurance provides coverage on a per accident basis, rather than a per occurrence basis. 5.With regard to"Additional Insured Endorsements,"the City will be provided additional insured status on applicable policies via blanket endorsement as is typically done in our industry. 7. Regarding any notices to the City, we would request modification so that this provision provides that Proposer shall provide the City with at least thirty(30) days' prior written notice of any cancellation or non- renewal of any of the policies required under the Agreement where such cancellation or non-renewal does not result in equal or greater coverage. 9. Regarding any certificates provided to the City, we would request modification of this provision so that it provides that, if selected, within ten (10) business days of the execution of the Agreement, and annually thereafter during the term of the Agreement, upon written request of the City, Proposer will furnish the City with industry standard ACORD certificate(s) of insurance forms to evidence proof of required coverage, which will be signed by an authorized representative of the insurer(s). • Page 61 4n 00 nr> ortrAMON frA QQ • APPENDICES Appendix A—Engagement team biographies 11 RSM Vi . I Bob Feldmann Partner, Public Sector National Public Sector Assurance Leader bob.feldmann@rsmus.com Summary of experience Bob is our Southeast Market Public Sector Practice Leader and is the Miami Office Managing Partner. He is the National Public Sector Assurance Leader for the firm. Bob has over 30 years of audit and accounting experience,serving as partner on various not-for-profit and governmental clients. His experience includes performing audits in accordance with Government Auditing Standards, OMB Circular A-133, Federal Single Audit Act, Florida Single Audit Act, and the Rules of the Auditor General of the State of Florida. Representative client list • City of Aventura • . .City of,Jacksonville • Miami-Dade County • City of Cooper City • City of Miami School Board • City of Coconut Creek • City of North Miami • University of Miami • City of Coral Gables • City of North Lauderdale • Palm Beach County • City of Coral.Springs • City of Palm Beach Gardens Department of Airports • City of Deerfield Beach • Broward County, Florida • Boca Raton Airport • City of Hallandale Beach • Palm Beach County Authority Professional affiliations and credentials • American Institute of Certified Public Accountants • Beacon Council, board • Broward County Salvation Army Adult Rehabilitation Center,Advisory Council Chairman • FIU President's Council&School of Accounting Advisory Board • Florida Government Finance Officers Association, associate member • Florida Institute of Certified Public Accountants • Government Finance Officers Association, associate member • Greater Miami Chamber of Commerce,trustee Education • Bachelor of Science, accounting, University of Florida • Master of Science,taxation, University of Miami • CFO Program, University of Minnesota Graduate School of Business Page 62 (114 ANCriA A) A. QQ RSM Brett Friedman F Partner, audit services brett.fnedman@rsmus.com Summary of experience Brett is the Florida public sector leader and has more than 21 years of experience providing audit and consulting services to governmental and nonprofit clients. His experience includes leading large governmental audits and performing audits in accordance with Government Auditing Standards, OMB Circular A-133, the Uniform Guidance, Federal Single Audit Act, Florida Single Audit Act and the Rules of ' the Auditor General of the State of Florida.A partial listing of his government audit experience follows: • City of Jacksonville/Duval County • City of Palm Bay • Glades County • City of Aventura • City of Pembroke Pines • Canaveral Port Authority • City of Boca Raton • City of Sunrise • Hillsborough County Aviation Authority • City of Coconut Creek • City of Tamarac • Jacksonville Aviation Authority • City of Coral Gables • City of Tampa • Jacksonville Port Authority • City of Coral Springs • City of West Palm Beach • Palm Beach County Department of Airports City of Deerfield Beach • Town of Davie • South Florida Water Management District • City of Hallandale Beach • Broward County • Miami-Dade County School Board • City of Hollywood • • Martin County • School Board of Broward County • City of Miramar • Miami-Dade County • School District of Palm Beach County • City of North Miami • Palm Beach County • Washington Metropolitan Area Transit Authority Professional affiliations and credentials • Certified public accountant, state of Florida • University of Miami School of Accounting • American Institute of Certified Public Accountants Corporate Advisory Board,Vice Chair • Florida Institute of Certified Public Accountants • Government Finance Officers Association • FICPA State and Local Government Section Special Review Committee • Florida-International University School of Accounting • Florida Government Finance Officers Association Corporate Advisory Board 2015 conference presenter, Internal Auditing.101 • Miami Downtown Chapter of the FICPA, Past President. • Florida Government Finance Officers Association • Florida Government Finance Officers Association, 2016 and 2018 conference presenter, Integrating associate member Technology in the Audit Education • Bachelor of Science, accounting and economics, State University of New York at Albany • Masters of Business Administration, University of Miami Page 63 PA 1.1-041'46. (r°►n �► grinJ . RSM Scott Bassett Partner, audit services -� scott.bassett@rsmus.com Summary of experience Scott has over 27 years of experience specializing in the audits of governmental and nonprofit organizations throughout the state of Connecticut. Scott's industry strengths include government and nonprofit organizations. Professional affiliations and credentials Scott has served on the Connecticut GFOA Technical Standards Committee, and on the CSCPA's Governmental Accounting and Auditing Committee. He is a past member of the Special Review Committee for the GFOA Certificate of Achievement for Excellence in Financial Reporting Program. Scott is a certified public accountant, a member of the American Institute of Certified Public Accountants and the Connecticut Society of Certified.Public Accountants, and the Connecticut and U.S. Government Finance Officers Association. Scott has been awarded the Certificate of Educational Achievement(CEA)in Governmental Accounting and Auditing from AICPA for successful completion of an integrated program in Governmental Accounting and Auditing. Clients for which Scott has served as audit partner or concurring partner include: • City of Coral Gables, FL • Financial Accounting Foundation • City of Coral Springs, FL • City of Norwalk, CT • City of North Miami, FL •. Town of Darien, CT • City of West Palm Beach, FL • Town of Danbury, CT • Palm Beach County, FL • City of Providence, RI • City of Hartford, CT • City of West Haven, CT • City of New Haven, CT • Town of Greenwich, CT - • City of Stamford, CT • City of Manchester, NH • City of New Britain, CT • Town of Glastonbury, CT • Town of Westport, CT • Town of Waterford • Town of Wilton, CT Education • Bachelor of Science, Central Connecticut State University Page 64 ria OA Q 414) Oirio IP 410) 14;3' Illi- RSM 'ft • Valerie Colimon, CPA j`` '' Senior Manager,Audit services valerie.colimon@rsmus.com .. Summary of Experience Valerie has worked in the public accounting field since 2006. Since her commencement as an associate with RSM, she has audited a variety of public-sector clients. During her first year with RSM, Valerie began to focus solely on providing audit services to nonprofit and government entities, specifically those subject to Uniform Grant Guidance audits.Valerie performs a full spectrum of accounting operations such as plan, execute and supervise external audit engagements.Valerie's extensive experience enables her to provide timely feedback and best practice recommendations relating to various accounting practices and internal control improvements. Valerie is considered among the top-rated senior managers in the firm and was recently recognized at the National Partner Meeting as a"game changer."Valerie serves some of the firm's highest risk and highest-profile clients. She also serves on a number of national public sector industry committees and oversees the updating of the firm's Industry Policy Manuals. A partial listing of clients for which Valerie has served and issued financial and single audit reports include: • City of Miami Beach, FL • Washington Metropolitan Area Transit • City of Miami, FL Authority • City of Coral Gables, FL • New England Conservatory of Music • City of Hartford, CT • Nassau County, NY • City of Miami, Dept. of Off-Street Parking • Massachusetts Development Finance • Miami-Dade County, FL • Massachusetts Technology Collaborative • Miami Beach Convention Center, FL • Boston Private Industry Council • School Board of Miami-Dade County, FL • Nantucket Steamship Authority • Greater Miami Visitor and Convention Bureau • Woods Hole, Martha's Vineyard Professional Affiliations and Credentials • Certified Public Accountant in Massachusetts and Florida(Virginia in process) • American Institute of Certified Public Accountants • Association of Government Accountants-Member • Member of the special review committee for the Government Financial Officers Association (GFOA) Certificate of Achievement for Excellence in.Financial Reporting Education • Master of Accounting, Florida International University Page 65 to pal poi fAl_ 41) M � tom► � . -77 Ng. � RSM Michelle Diaz Senior Associate, audit services ;A" michelle.diaz@rsmus.com = Summary of experience Michelle has over five years of public accounting experience providing financial and compliance audit and consultation services to a variety of governmental entities. She focuses primarily on cities, counties, school districts and nonprofit organizations.A partial listing of her nonprofit and governmental audit experience follows: • City of Coral Gables • City of West Palm Beach • City of Coral Springs • Palm Beach County • City of Deerfield Beach • Broward County School Board • City of Hollywood. • Miami-Dade School Board • City of,Miami Beach • Lynn University , • City of Miramar • The John S. and James L. Knight Foundation • City of Pompano Beach Education • Masters, accounting, Barry University • Bachelor of Science, accounting, Barry University Page 66 traproo) 41.4".0 ( * 40 qv c:13 ,„ SM a3 a$ r • Kristy Coulter ' Senior In-Charge,Assurance services kristy.coulter@rsmus.com ti Summary of experience Kristy has over two years of government and nonprofit auditing experience. Her experience includes performing audits in accordance with Government Auditing Standards and Federal Single Audit Act. In her current role, Kristy provides auditing, accounting and management advisory services to our clients, assists engagement teams conducting and supervising audits and is responsible for ensuring that reports issued by the firm comply with professional standards.A partial listing of her governmental and nonprofit audit experience follows: • Broward County Aviation Department • Broward County General Segment • City of Tamarac • City of Coral Springs Professional Affiliations and Credentials • Certified Public Accountant, state of Florida Education • Bachelor of Accounting, Florida Atlantic University • Master of Accounting, Florida Atlantic University Page 67 ® 1QQrgi RSM ` Al soBrian Schebler " National Director of Public Sector Services National Professional Standards brian.schebler@rsmus.com Summary of experience Brian is a member of RSM's National Professional Standards Group and is primarily responsible for the firm's government, not-for-profit and compliance auditing approaches as well as the maintenance of our Government Industry. Manual, Nonprofit Organizations Manual, Health Care Manual, and Compliance Audit Manual. Brian represents the firm's interest in professional developments in the public sector industry and is involved on a firrnwide level with the design and presentation of internal and external professional education courses. He also provides technical support to the firm's local and network offices and contributes to the RSM's quality control program. Since joining RSM in 1981, Brian has served clients in several industries, but has focused on public sector clients for the past 25 years. He has provided technical review services to the AICPA for a number of industry-related Audit& Accounting Guides, Risk Alerts and other publications.Additionally, he is the current Chair of the AICPA Single Audit Training and CPE Task Force, a member of the Comptroller General's Advisory Council on GAS, and the firm's Single Audit Roundtable representative. He lias served on several industry-related task forces and was a member of the initial Executive Committee of the AICPA Governmental Audit Quality Center and the initial AICPA State and Local Government Industry Expert Panel. Professional affiliations and credentials • American Institute of Certified Public Accountants • Iowa and Minnesota Societies of Certified Public Accountants • Government Finance Officers Association • National Association of Local Government Auditors • Certified Government Financial Manager Education • Bachelor's, accounting, St.Ambrose University Page 68 (lepAra, Qc) 41111) 4111) ..• RSM f , Alexandra M. Lorie ; - l Technology Director, risk advisory services alexandra.lorie@rsmus.com Summary of experience Alexandra Lorie is a Director in RSM's Information Technology(IT)risk advisory and business consulting practice.Alexandra is a consulting professional and project manager with over 15 years of experience working in"Big 4"and global technology consulting firms.Alexandra has experience leading and coordinating business and IT engagements helping companies in a variety of industries.Alexandra possesses a Master's in Management Information Systems. Areas of experience include IT general control and application control reviews, IT risk assessments, IT attestation (SOC 1/2), project and engagement management,special IT projects and program assessments, business process analysis and improvement, policy and procedure evaluation and development, and system development and implementation.A partial listing of Florida government clients she has served follows: • City of Miami Beach • Broward County Clerk of Courts • Miami-Dade County School • City of Coral Gables • Brevard County Board • City of Coral Springs • Miami-Dade County • City of Miami, Department of • City of Hollywood • Palm Beach County Off-Street Parking • City of Homestead • Palm Beach County Department • Greater Miami Convention & • City of Jacksonville/Duval of Airports Visitors Bureau County • Broward County School Board • Hillsborough County Aviation • City of Miami • School District of Palm Beach Authority • City of Miramar County • Coral Gables Clerk of Courts • City of Pompano Beach • School Board of Brevard County • South Florida Water Management District Professional affiliations and certifications • Information Systems Audit and Control Association(ISACA) • Institute of Internal Auditors (IIA) Education • Master of Science, management information systems, Florida International University Bachelor of Business administration, international finance and marketing and computer information systems, University of Miami Page 69 yin Q9 �, -- -- __ _ RSM . Bryan Thompson ' Director, cyber-security specialist bryan.thompson@rsmus.com Summary of experience Bryan focuses on security, privacy, and risk services that include security assessments,vulnerability and risk management, security monitoring, incident response and compliance frameworks. Bryan has over 30 years of security experience, working with a variety of companies with a focus on planning, design and delivery of high-performing, cost-effective enterprise security programs. He has extensive experience developing and implementing information security management processes, concepts, solutions and technologies(Microsoft products, EMC, Salesforce, etc.)with a focus on data protection, security architecture, industry leading practices, and frameworks and regulatory compliance(e.g., Sarbanes-Oxley [SOX], Payment Card Industry[PCI], National Institute of Standards and Technology[NIST], International Organization for Standardization [ISO], North American Electric Reliability Corporation [NERC]). He has extensive experience in the Public Sector(Federal/State/Local levels), Financial Services including Banking and Investment Management and Consumer Products including Retail. Bryan has previously led a number of data protection assessments and policy development engagements,which focused on security governance, data privacy, information classification and handling, and overall data protection processes. He also serves as the Florida security, privacy, and risk leader,where he facilitates clients' development and implementation of effective security program management practices across a variety of industries and RSM's audit/tax client base. Prior to joining RSM, Bryan held executive and senior-level positions, including chief information security officer(CISO), with organizations in industries such as defense and aerospace contracting, pharmaceuticals and finance. In addition, Bryan has been with one of the Big Four and another large consulting firm,where he-served as the PCI leader and the data privacy champion. Professional affiliations and credentials • Certified Information Security Manager(CISM) • Payment Card Industry Professional (PCIP)TM • Qualified Security Assessor(QSA) • Information Systems Audit and Controls Association (ISACA) • Global Information Assurance Certification (GIAC)Systems and Network Auditor(GSNA), The SANS Institute Education • Bachelor of Arts,criminal justice, University of Maryland • Master of Science, network security, Capital Technology University Page 70 VP M /r►f0) QQfpa miF_RSM Lisa Chanzit Director, actuarial services ` lisa.chanzit@rsmus.com \.'0\ fp Summary of experience Lisa is a director in the Actuarial Services practice of RSM's'Human Capital Services unit, providing actuarial consulting services for self-insured and fully insured plan sponsors in the public and private sectors. She has over 32 years of actuarial experience. She provides actuarial support for the firm's audits of government entities, insurance companies, captives, risk pools and self-insured corporations.A sample listing of the governmental clients Lisa has served include the following: • City of Miami Beach • Palm Beach County • City of Miami • Miami-Dade County • City of Coral Gables • Broward County • City of Deerfield Beach • City of Jacksonville/Duval County • City of Hollywood • _ School Board of Broward County • City of Miramar • Miami-Dade County School Board • City of Pompano Beach • Professional affiliations and credentials • Public Risk Management Association working group on Accounting Standards and Reporting Guidelines and GASB10 Omnibus Project Committee. • CAS Textbook Committee, Syllabus Committee, Hachemeister Prize Committee,Audit Committee and AAA Financial Reporting Principles Committee Education • Bachelor of Arts, mathematics and biology, University of Rochester • Master of Science, statistics, University of Chicago Page 71 (4/4 ;45 QQ c), Ili RSM • Tim Ellenwood - Director,tax services _ `I tim.ellenwood@rsmus.com i ,! Summary of experience Tim joined RSM in 2011 and serves as an employment tax leader in the East Region. He is a state and local tax professional with more than 30 years of experience and specializes in federal, state and local employment tax matters.Tim regularly consults with multistate taxpayers in addressing technical issues in the areas of payroll reporting and processing, unemployment taxation and reporting requirements for independent contractors. In addition,Tim has extensive experience with assisting companies with employment tax issues associated with corporate transactions(acquisitions, mergers&reorganizations), golden parachute,worker classification,taxation of executive compensation and benefits,taxation of stock based compensation, refund reviews, state nonresident withholding and other complex employment tax matters. Prior to joining RSM,Tim spent eight years as an employment tax leader with a Big 4 accounting firm. During his career, he has also spent time with several national employment tax and regional accounting firms.Tim has provided employment tax services to employers of all size, small to Fortune 100 companies, including the federal government. Professional affiliations and credentials • Certified payroll professional • American Payroll Association Education • Bachelor of Science, business administration, University of Northern Colorado Page 72 M ti► M QQ ©© * t fON (114 M RSM David Luker j Director, Risk Advisory Services 1 Construction Recovery Specialist r t' david.luker@rsmus.com Summary of experience David has over 11 years of public accounting experience that includes: planning and managing construction closeout audits,facilities and construction internal audits, contract compliance engagements, and other consulting services. He is responsible for project management, risks and controls, business process analysis, contract compliance services, risk management, and forensic investigations. David has led teams on construction audit projects throughout Florida and nationwide. David is 100%dedicated to risk advisory services within the construction industry, predominantly consisting of higher education, public sector, government and school district construction auditing. In 2014, David was named among the Orlando Business Journal's top 40 professionals under 40 years old. A partial listing of his government audit experience follows: • Broward College • Jacksonville Aviation Authority • Broward County School District • Osceola County School District • Brevard County • Prince William County,Virginia • Brevard County School District • Swire Properties • The State of Florida • University of Central Florida • City of Orlando • Arlington County, Virginia Professional affiliations and credentials • Certified Public Accountant, States of Alabama and Florida • Alabama Institute of Certified Public Accountants • American Institute of Certified Public Accountants Education • Bachelor of Arts, accounting, Illinois State University • Master of Business Administration,finance, summa cum laude, Illinois State University • Master of Science, accounting, magna cum laude, Illinois State University Page 73 Appendix B—About RSM RSM's purpose is to deliver the power of being understood to our clients, colleagues and communities through world-class audit,tax and consulting services focused on middle market businesses.The clients we serve are the engine of global commerce and economic growth, and we are focused on developing leading professionals and services to meet their evolving needs in today's ever-changing business environment. RSM US LLP is the U.S. member of RSM International, a global network of independent audit,tax and Consulting firms with more than 41,000 people in 116 countries. J aEEHoo 85 0 0 0 cities Founded In — nationwide 1926 • Overt $2.1 BN 10 0 • �u,i in revenue professionals RSM US LLP is the leading provider of audit,tax and consulting services focused on the middle market. it Page 74 • 1 • r www.rsmus.com RSM US LLP is a limited liability partnership and the U.S.member firm of RSM International,a global network of independent audit,tax and consulting firms. The member firms of RSM International collaborate to provide services to global clients,but are separate and distinct legal entities that cannot obligate each other.Each member firm is responsible only for its own acts and omissions,and not those of any other party. RSM • For more information,visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. ©2019 RSM US LLP.All Rights Reserved. RSM July 24, 2019 RSM US LLP 801 Bric,kell Avenue, Suite 1050 Miami, FL 33131 Marc Gidney, Chairman of the Audit Committee 0 305.442.8801 Allison Williams, Deputy Finance Director F 305.442.7478 City of Miami Beach, Florida W,vW,rsmus.com 1700 Convention Center Drive Miami Beach, Florida 33139 Attention: Mr. Gidney and Ms.Williams The Objective and Scope of the Audit of the Financial Statements You have requested that we audit the City of Miami Beach, Florida's (the City)governmental activities, business-type activities, aggregate discretely presented component units, each major fund, and the aggregate remaining fund information as of and for the year ending September 30, 2019, which collectively comprise the basic financial statements. Our audit will include the general fund and you acknowledge that we are the group auditor of the City's basic financial statements as of and for the year ending September 30, 2019. We will not audit the financial statements of the City of Miami Beach Florida Employees' Retirement Plan and the City Pension Fund for Firefighters and Police Officers. Those financial statements will be audited by component auditors. Management is responsible for the preparation of the required supplementary information (RSI) and supplementary information presented in relation to the financial statements as a whole in accordance with accounting principles generally accepted in the United States of America. We are pleased to confirm our acceptance and our understanding of this audit engagement by means of this letter. Our acceptance of this engagement is subject to our satisfactorily completing our normal engagement acceptance procedures, including inquiry of your previous auditors, adverse date searches and background checks.We will notify you promptly if we become aware of anything during our acceptance procedures that results in our not being able to continue this engagement. • Our audit will be conducted with the objective ofour expressing an opinion on the financial statements. We will also perform,the audit of the City as of September 30, 2019 so as to satisfy the audit requirements imposed by the Single Audit Act and Subpart F of Title 2 U.S. Code of.Federal Regulations (CFR) Part 200,, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards(Uniform Guidance). The Responsibilities of the Auditor We will conduct our audit in accordance with auditing standards generally accepted in the United States of America (GAAS); Government Auditing Standards issued by the Comptroller General of the United States (GAS); the provisions of the Single Audit Act; Subpart F of Title 2 U.S. CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; and the U.S. Office of Management and Budget's (OMB) Compliance Supplement and guidance provided in the audit guides titled State and Local Governments and Government Auditing Standards and Single Audits issued by the American Institute of Certified Public Accountants (AICPA). Those standards, regulations, supplements or guides require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The THE POWER OF BEING UNDERSTOOD AUDIT I TAX I CONSULTING RSM US LLP is the U.S.member firm of RSM International,a global network of independent audit,tax,and consulting firms.Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. Marc Gidney, Chairman of the Audit Committee Allison Williams, Deputy Finance Director City of Miami Beach, Florida July 24, 2019 Page 2 -- procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements,whether due to fraud or error.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. Because of the inherent limitations of an audit, together with the inherent limitations of internal control, an unavoidable risk that some material misstatements may not be detected exists, even though the audit is properly planned and performed in accordance with GAAS. Also, an audit is not designed to detect errors or fraud that are immaterial to the financial statements. The determination of abuse is subjective; therefore, GAS does not expect us to provide reasonable assurance-of detecting abuse. In making our risk assessments, we consider internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. However, we will communicate to you in writing concerning any significant deficiencies or material weaknesses in internal control relevant to the audit of the financial statements that we have identified during the audit. We will also communicate to the Audit Committee(a) any fraud involving senior management and fraud (whether caused by senior management or other employees)that causes a material misstatement of the financial statements that becomes known to us during the audit, and (b)any instances of noncompliance with laws and regulations that we become aware of during the audit(unless they are clearly inconsequential). The funds that you have told us are maintained by the City and that are to be included as part of our,audit are listed here: Governmental Funds • General • Resort Tax • Miami Beach Redevelopment Agency • Capital Projects • Nonmajor Governmental Funds Proprietary Funds • Storm Water Utility Fund • Water and Sewer Fund • Convention Center.Complex Fund • Nonmajor Enterprise Funds Fiduciary Funds • Trust Funds . • Agency Funds The component units whose financial statements you have told us are to be included as part of the City's basic financial statements are listed here: - Blended Component Units • Miami Beach Redevelopment Agency • Normandy Shores Local Government Neighborhood Improvement District Marc Gidney, Chairman of the Audit Committee Allison Williams, Deputy Finance Director City of Miami Beach, Florida July 24, 2019 Page 3 Discretely Presented Component Units—Governmental Type Funds • Miami Beach Health Facilities Authority • Miami Beach Visitor and Convention Authority The federal financial assistance programs and awards that you have told us that the City participates in and that are to be included as part of the single audit are the grants consistent with thegrants reported in the City's 2018 single audit report. We are responsible for the compliance audit of major programs under the Uniform Guidance, including the determination of major programs, the consideration of internal control over compliance, and reporting responsibilities. Our reports on internal control will include any significant deficiencies and material weaknesses in controls of which we become aware as a result of obtaining an understanding of internal control and performing tests of internal control consistent with requirements of the standards and regulations identified above. Our reports on compliance matters will address material errors,fraud, abuse, violations of compliance obligations, and other responsibilities imposed'by state and federal statutes and regulations,or assumed by contracts; and any state or federal grant, entitlement or loan program questioned costs of which we become aware, consistent with requirements of the standards and regulations identified above. The Responsibilities of Management and Identification of the Applicable Financial Reporting Framework Our audit will be conducted on the basis that management and, when appropriate, those charged with governance acknowledge and understand that they have responsibility: 1. For the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; 2. To evaluate subsequent events through the date the financial statements are issued or available to be issued, and to disclose the date through which subsequent events were evaluated in the financial statements. Management also agrees that it will not conclude on subsequent events earlier than the date of the management representation letter referred to below; 3. For the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; 4. For establishing and maintaining effective internal control over financial reporting, and for informing us of all significant deficiencies and material weaknesses in the design or operation of such controls of which it has knowledge; 5. For(a) making us aware of significant vendor relationships where the vendor is responsible for program compliance, (b)following up and taking corrective action on audit findings, including the preparation of a summary schedule of prior audit findings and corrective action plan, and (c)report distribution, including submitting the reporting packages; and 6. To provide us with: a. Access to'all information of which management is aware that is relevant to the preparation and fair presentation of the financial statements such as records, documentation and other matters; Marc Gidney, Chairman of the Audit Committee Allison Williams, Deputy Finance Director City of Miami Beach, Florida July 24, 2019 Page 4 b. Additional information that we may request from management for the purpose of the audit; and c. Unrestricted access to persons within the entity from whom we determine it necessary to obtain , audit evidence; d. When applicable, a summary schedule of prior audit findings for inclusion in the single audit reporting package; and e. If applicable, responses to any findings reported on the schedule of findings and questioned costs. As part of our audit process, we will request from management and, when appropriate, those charged with governance written confirmation concerning representations made to us in connection with the audit, including among other items: 1. That management has fulfilled its responsibilities as set out in the terms of this letter; and 2. That it believes the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. Management is responsible for identifying and ensuring that the City complies with the laws and regulations applicable to its activities, and for informing us about all known material violations of such laws or regulations. In addition, management is responsible for the design and implementation of , programs and controls to prevent and detect fraud or abuse, and for informing us about all known or suspected fraud or abuse affecting the City involving management, employees who have significant roles in internal control, and others where the fraud or abuse could have a material effect on the financial statements or compliance. Management is also responsible for informing us of its knowledge of any allegations of fraud or abuse, or suspected fraud or abuse, affecting the entity received in communications from employees, former employees, analysts, regulators or others. Management is responsible for the preparation of the required supplementary information and supplementary information in accordance with accounting principles generally accepted in the United States of America. Management agrees to include the auditor's report on the required supplementary information and supplementary information in any document that contains the required supplementary information or supplementary information and indicates that the auditor has reported on such required supplementary information or supplementary information. Management also agrees to present the required supplementary information or supplementary information with the audited financial statements or, if the required supplementary information or supplementary information will not be presented with the audited financial statements, to make the audited financial statements readily available to the intended users of the required supplementary information or supplementary information no later than the date of issuance of the required supplementary information or supplementary information and the auditor's report thereon. Because the audit will be performed in accordance with the Single Audit Act and the Uniform Guidance, management is responsible for(a) identifying all federal awards received and expended; (b) preparing the schedule of expenditures of federal awards (including notes and noncash assistance received) in accordance with Uniform Guidance requirements; (c) internal control over compliance; (d) compliance with federal statutes, regulations, and the terms and conditions of federal awards; (e) making us aware of significant vendor relationships where the vendor is responsible for program compliance; (f)following up and taking corrective action on audit findings, including the preparation of a summary schedule of prior audit findings and a corrective action plan; and (g) submitting the reporting package and data collection form. Marc Gidney, Chairman of the Audit Committee Allison Williams, Deputy Finance Director City of Miami Beach, Florida July 24, 2019 Page 5 The Audit Committee is responsible for informing us of its views about the risks of fraud or abuse within the City, and its knowledge of any fraud or abuse or suspected fraud or abuse affecting the City. You have informed us that you may issue public debt in the future and that you may include our report on your financial statements in the offering statement. You have further informed us that you do not intend for us to be associated with the proposed offering. We agree that our association with any proposed offering is not necessary, providing the City agrees to clearly indicate that we are not associated with the contents of any such official statement or memorandum.The City agrees that the following disclosure will be prominently displayed in any such official statement or memorandum: RSM US LLP, our independent auditor, has not been engaged to perform, and has not performed, since the date of its report included herein, any procedures on the financial statements addressed in that report. RSM US LLP also has not performed any procedures relating to this[official statement](memorandum].] Records and Assistance If circumstances arise relating to the condition of the City's records, the availability of appropriate audit evidence or indications of a significant risk of material misstatement of the financial statements because of error,fraudulent financial reporting or misappropriation of assets which, in our professional judgment, prevent us from completing the audit or forming an opinion, we retain the unilateral right to take any course of action permitted by professional standards, including declining to express an opinion or issue a report, or withdrawing from the engagement. During the course of our engagement, we may accumulate records containing data that should be reflected in the City's books and records. The City will determine that all such data, if necessary, will be so reflected. Accordingly, the City will not expect us to maintain copies of such records in our possession. The assistance to be supplied by City's personnel, including the preparation of schedules and analyses of accounts, has been discussed and coordinated with Allison Williams, Deputy Finance Director.The timely and accurate completion of this work is an essential condition to our completion of the audit and issuance of our audit report. GAS further requires that we establish an understanding with City's management and those charged with governance of the objectives of the non-audit services, the services to be performed, the City's acceptance of its responsibilities, the auditor's responsibilities and any limitations of the non-audit services.We believe this letter documents that understanding. Other Relevant Information RSM US LLP may mention the City's name and provide a general description of the engagement in RSM US LLP's client lists and marketing materials. From time to time and depending upon the circumstances, we may use third-party service providers to assist us in providing professional services to you. In such circumstances, it may be necessary for us to disclose confidential client information to them.We enter into confidentiality agreements with all third- party service providers and we are satisfied that they have appropriate procedures in place to prevent the unauthorized release of your confidential information to others. In addition, we may utilize financial information you have provided to us in connection with this engagement for purposes of creating benchmarking data to be used by RSM US LLP professionals and other clients. This benchmarking data Marc Gidney, Chairman of the Audit Committee Allison Williams, Deputy Finance Director City of Miami Beach, Florida July 24, 2019 Page 6 is aggregated with data from a minimum of five other entities so that users of the data are unable to associate the data with any single entity in the database. In accordance with GAS, a copy of our most recent peer review report was provided in our proposal. Our professional standards require that we perform certain additional procedures, on current and previous years' engagements, whenever a partner or professional employee leaves the firm and is subsequently employed by or associated with a client in a key position. Accordingly, the City agrees it will compensate RSM US LLP for any additional costs incurred as a result of the City's employment of a partner or professional employee of RSM US LLP. The audit documentation for this engagement is the property of RSM Us LLP and constitutes confidential information. Review of audit documentation by a successor auditor or as part of due diligence will be agreed to, accounted for and billed separately. In the event we are requested or authorized by the City or are required by government regulation, subpoena or other legal process to produce our documents or our personnel as witnesses with respect to our engagement for the City, the City will, so long as we are not a party to the proceeding in which the information is sought, reimburse us for our professional time and expenses, as well as the fees and expenses of our counsel, incurred in responding to such requests. The documentation for this engagement is the property of RSM US LLP. However, you acknowledge and grant your assent that representatives of the cognizant or oversight agency or their designee, other government audit staffs, and the U.S. Government Accountability Office shall have access to the audit documentation upon their request and that we shall maintain the audit documentation for a period of at least three years after the date of the report, or for a longer period if we are requested to do so by the cognizant or oversight agency. Access to requested documentation will be provided under the supervision of RSM US LLP audit personnel and at a location designated by our firm. Information Security- Miscellaneous Terms RSM US LLP is committed to the safe and confidential treatment of the City's proprietary information. - RSM US LLP is required to maintain the confidential treatment of client information in accordance with relevant industry professional standards which govern the provision of services described herein. The City agrees that it will not provide RSM US LLP with any unencrypted electronic confidential or proprietary ' information, and the,parties agree to utilize commercially reasonable measures to maintain the confidentiality of the City's information, including the use of collaborate sites to ensure the safe transfer of data between the parties. 'RSM US LLP may terminate this relationship immediately in its sole discretion if RSM US LLP determines that continued performance would result in a violation of law, regulatory requirements, applicable professional standards or RSM US LLP's client acceptance or retention standards, or if the City is placed on a verified sanctioned entity list or if any director or executive of, or other person closely associated with, the City or its affiliates is placed on a verified sanctioned person list, in each case, including but not limited to lists promulgated by the Office,of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. State Department, thUnited Nations Security Council, the European Union or any other relevant sanctioning authority. If any term or provision of this arrangement letter is determined to be invalid or unenforceable, such term or provision will be deemed stricken and all other terms and provisions will remain in full force and effect. Marc Gidney, Chairman of the Audit Committee Allison Williams, Deputy Finance Director City of Miami Beach, Florida July 24, 2019 Page 7 Reporting We will issue a written report upon completion of our audit of the City's financial statements. Our report will be addressed to the Audit Committee of the City. We cannot provide assurance that an unmodified opinion will be expressed. Circumstances may arise in which it is necessary for us to modify our opinion, add"an emphasis-of-matter or other-matter paragraph(s), or withdraw from the engagement. In addition to our report on the City's financial statements, we will also issue the following types of reports: 1. A report on the fairness of the presentation of the City's schedule of expenditures of federal awards for the year ending September 30, 2019; 2. Reports on internal control related to the financial statements and major programs.These reports will describe the scope of testing of internal control and the results.of our tests of internal control; 3. Reports on compliance with laws, regulations, and the provisions of contracts or grant agreements. We will report on any noncompliance that could have a material effect on the financial statements and any noncompliance that could have a material effect, as defined by Subpart F of Title 2 U.S. CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, on each major program; 4. An accompanying schedule of findings and questioned costs; 5. A management letter in accordance with the Rules of the Auditor General of the State of Florida; 6. Audit report for Miami Beach Redevelopment Agency(RDA) 7. Audit report for Miami Beach Parking Systems Funds (PSF) • 8. Audit report for Miami Beach Visitor and Convention Authority(VCA) 9. Audit report for Miami Beach Convention Center as Managed by Global Spectrum (GS) 10. Single Audit report for Safe Neighborhood Parks (SNP) 11. Audit report on Children's Trust(CT) 12. Audit report on Building Better Communities(BBC) This letter constitutes the complete and exclusive statement of agreement between RSM US LLP and the City, superseding all proposals, oral or written, and all other communications with respect to the terms of the engagement between the parties. Marc Gidney, Chairman of the Audit Committee Allison Williams, Deputy Finance Director City of Miami Beach,,Florida July 24, 2019 Page 8 Electronic Signatures and Counterparts Each party hereto agrees that any electronic signature of a party to this agreement or any electronic signature to a document contemplated hereby(including any representation letter) is intended to authenticate such,writing and shall be as valid, and have the same force and effect, as a manual signature. Any such electronically signed document shall be deemed (i)to be "written"or"in writing," (ii) to have been signed and (iii)to constitute a record established and maintained in the ordinary course of business and an original written record when printed from electronic files. Each party hereto also agrees that electronic delivery of a signature to any such document(via email or otherwise)shall be as effective as manual delivery of a manual signature. For purposes hereof, "electronic signature" includes, but is not limited to, (i)a scanned copy(as a "pdf"(portable document format) or other replicating image)of a manual ink signature, (ii)an electronic copy of a traditional signature affixed to a document, (iii)a signature incorporated into a document utilizing touchscreen capabilities or(iv)a digital signature. This agreement may be executed in one or more counterparts, each of which shall be considered an original instrument, but all of which shall be considered one and the same agreement. Paper copies or"printouts," of such documents if introduced as evidence in any judicial, arbitral, mediation or administrative proceeding, will be admissible as between the parties to the same extent and under the same conditions as other original business records created and maintained in documentary form. Neither party shall contest the admissibility of true and accurate copies of electronically signed documents on the basis of the best evidence rule or as not satisfying the business records exception to the hearsay rule. Please sign and return a copy of this letter to indicate your acknowledgment of, and agreement with, the arrangements for our audit of the financial statements, including our respective responsibilities. RSM US LLP Brett Friedman Partner Confirmed on behalf of City of Miami Beach, Florida: Marc Gidney, Chairman of the Audit Committee Date Allison Williams, Deputy Finance Director Date ' J ATTACHMENT D INSURANCE REQUIREMENTS APPENDIX F MIAMI BEACH Insurance Requirements RFP 2019-092-JC Auditing Services PROCUREMENT DEPARTMENT 1755 Meridian Avenue, 3rd Floor Miami Beach, Florida 33139 37 RFP 2019-092-JC M lAMPBEACH INSURANCE REQUIREMENTS This document sets forth the minimum levels of insurance that the contractor is required to maintain throughout the term of the contract and any renewal periods. XXX 1. Workers'Compensation and Employer's Liability per the Statutory limits of the state of Florida. XXX 2. Comprehensive General Liability (occurrence form), limits of liability$ 1,000,000.00 per occurrence for bodily injury property damage to include Premises/ Operations; Products, Completed Operations and Contractual Liability. Contractual Liability and Contractual Indemnity (Hold harmless endorsement exactly as written in"insurance requirements"'of specifications). XXX 3. Automobile Liability-$1,000,000 each occurrence-owned/non-owned/hired automobiles included. 4. Excess Liability-$ .00 per occurrence to follow the primary coverages. XXX 5. The City must be named asand additional insured on the liability policies; and it must be stated on the certificate. 6. Other Insurance as indicated: —Builders Risk completed value $ .00 Liquor Liability $ .00 Fire Legal Liability $ .00 _Protection and Indemnity $ .00 Employee Dishonesty Bond $ .00 Other $ .00 XXX 7. Thirty(30)days written cancellation notice required. XXX 8. Best's guide rating B+:VI or better, latest edition. XXX 9. The certificate must state the proposal number and title The City of Miami Beach is self-insured.Any and all claim payments made from self-insurance are subject to the limits and provisions of Florida Statute 768.28, the Florida Constitution, and any other applicable Statutes. 38 •RFP 2019-0921C