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Home My WebLink About10617pz:\council packets\2010\r6-17-10\emcfd\6-17-10 emcfd agenda.doc Last printed 6/10/2010 3:19 PM NOTICE OF SPECIAL SESSION OF THE EAGLE MOUNTAIN COMMUNITY FACILITIES DISTRICT BOARD (EMCFD) WHEN: THURSDAY, JUNE 17, 2010 TIME: APPROXIMATELY 6:20 P.M. WHERE: TOWN OF FOUNTAIN HILLS - COUNCIL CHAMBERS 16705 EAST AVENUE OF THE FOUNTAINS Pursuant to A.R.S. §38-431.02, notice is hereby given to the Directors of the District Board of the EMCFD and to the general public that the District Board of the EMCFD will hold a special session open to the public, which will begin prior to the June 17, 2010, Cottonwood Maintenance District Board meeting and the Special and Regular Sessions of the Fountain Hills Town Council. AGENDA CALL TO ORDER AND ROLL CALL. – District Board Chairman Jay T. Schlum CALL TO THE PUBLIC. Pursuant to A.R.S. §38-431-01(G), public comment is permitted (not required) on matters not listed on the agenda. Any such comment (i) must be within the jurisdiction of the Directors is subject to reasonable time, place and manner restrictions. The Directors will not discuss or take legal action on matters raised during “Call to the Public” unless the matters are properly noticed for discussion and legal action. At the conclusion of the “Call to the Public”, individual Directors may (i) respond to criticism, (ii) ask staff to review a matter or (iii) ask that the matter be placed on a future agenda. 1. CONSIDERATION of approving the Eagle Mountain Community Facilities District Board meeting MINUTES of June 3, 2010. 2. PUBLIC HEARING regarding RESOLUTION EMCFD 2010-02, approving the final budget of the District for the Fiscal Year beginning July 1, 2010, and ending June 30, 2011. 3. CONSIDERATION of RESOLUTION EMCFD 2010-02, approving the final budget of the District for the Fiscal Year beginning July 1, 2010, and ending June 30, 2011. 4. ADJOURNMENT. DATED this 10th day of June 2010. Bevelyn J. Bender, Town Clerk The Eagle Mountain Community Facilities District, in cooperation with the Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 480-816-5100 voice or 1-800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in this meeting. Supporting documentation and staff reports furnished with this agenda are available for review in the Clerk’s office and on the Town’s website [www.fh.az.gov]. z:\council packets\2010\r6-17-10\cmd\6-17-10 cmd agenda.docx Last printed 6/10/2010 3:20 PM NOTICE OF SPECIAL SESSION OF THE COTTONWOOD MAINTENANCE DISTRICT BOARD [CMD] WHEN: THURSDAY, JUNE 17, 2010 TIME: COMMENCES IMMEDIATELY FOLLOWING THE ADJOURNMENT OF THE EAGLE MOUNTAIN COMMUNITY FACILITIES DISTRICT BOARD MEETING WHERE: TOWN OF FOUNTAIN HILLS - COUNCIL CHAMBERS 16705 EAST AVENUE OF THE FOUNTAINS Pursuant to A.R.S. §38-431.02, notice is hereby given to the Directors of the District Board of the CMD and to the general public that the District Board of the CMD will hold a special session open to the public, which will begin immediately following the Eagle Mountain Facilities District Board Meeting and prior to the June 17, 2010, Special and Regular Sessions of the Fountain Hills Town Council. AGENDA CALLED TO ORDER AND ROLL CALL. – District Board Chairman Jay T. Schlum CALL TO THE PUBLIC. Pursuant to A.R.S. §38-431-01(G), public comment is permitted (not required) on matters not listed on the agenda. Any such comment (i) must be within the jurisdiction of the Directors is subject to reasonable time, place and manner restrictions. The Directors will not discuss or take legal action on matters raised during “Call to the Public” unless the matters are properly noticed for discussion and legal action. At the conclusion of the “Call to the Public”, individual Directors may (i) respond to criticism, (ii) ask staff to review a matter or (iii) ask that the matter be placed on a future agenda. 1. CONSIDERATION of approving the Cottonwood Maintenance District Board MEETING MINUTES of June 3, 2010. 2. PUBLIC HEARING regarding RESOLUTION CMD 2010-02, approving the Final Budget of the District for the Fiscal Year beginning July 1, 2010, and ending June 30, 2011. 3. CONSIDERATION of RESOLUTION CMD 2010-02, approving the Final Budget of the District for the Fiscal Year beginning July 1, 2010, and ending June 30, 2011. 4. ADJOURNMENT. DATED this 10th day of June 2010. Bevelyn J. Bender, District Clerk The Cottonwood Maintenance District, in cooperation with the Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 480-816-5100 voice or 1-800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in this meeting. Supporting documentation and staff reports furnished with this agenda are available for review in the Clerk’s office and on the Town’s website [www.fh.az.gov]. Z:\Council Packets\2010\R6-17-10\100617A.docx Last printed 6/10/2010 6:08 PM Page 1 of 4 NOTICE OF THE SPECIAL AND REGULAR SESSIONS OF THE FOUNTAIN HILLS TOWN COUNCIL TIME: 6:30 P.M. WHEN: THURSDAY, JUNE 17, 2010 WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS 16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ PROCEDURE FOR ADDRESSING THE COUNCIL Anyone wishing to speak before the Council must fill out a speaker’s card and submit it to the Town Clerk prior to Council discussion of that Agenda item. Speaker Cards are located in the Council Chamber Lobby and near the Clerk’s position on the dais. Speakers will be called in the order in which the speaker cards were received either by the Clerk or the Mayor. At that time, speakers should stand and approach the podium. Speakers are asked to state their name prior to commenting and to direct their comments to the Presiding Officer and not to individual Councilmembers. Speakers’ statements should not be repetitive. If a speaker chooses not to speak when called, the speaker will be deemed to have waived his or her opportunity to speak on the matter. Speakers may not (i) reserve a portion of their time for a later time or (ii) transfer any portion of their time to another speaker. If there is a Public Hearing, please submit the speaker card to speak to that issue during the Public Hearing. Individual speakers will be allowed three contiguous minutes to address the Council. Time limits may be waived by (i) discretion of the Town Manager upon request by the speaker not less than 24 hours prior to a Meeting, (ii) consensus of the Council at Meeting or (iii) the Mayor either prior to or during a Meeting. Please be respectful when making your comments. If you do not comply with these rules, you will be asked to leave. Mayor Jay T. Schlum Vice Mayor Dennis Brown Councilmember Tait D. Elkie Councilmember Dennis Contino Councilmember Cassie Hansen Councilmember Ginny Dickey Councilmember Henry Leger Z:\Council Packets\2010\R6-17-10\100617A.docx Last printed 6/10/2010 6:08 PM Page 2 of 4 SPECIAL SESSION  CALL SPECIAL SESSION TO ORDER AND ROLL CALL – Mayor Schlum AGENDA 1. CONSIDERATION of ORDINANCE 10-02, amending the Town Tax Code by increasing the tax rate on transient lodging; providing penalties for the violation thereof; providing for severability, making provision for existing contracts; and designating an effective date. 2. CONSIDERATION of RESOLUTION 2010-16 adopting the amended and restated Town of Fountain Hills Financial Policies, reducing the allocation of construction sales tax to Capital Projects from 85% to 50%. 3. PUBLIC HEARING regarding RESOLUTION 2010-23, adopting the tentative budget as the final budget for the 2010-2011 fiscal year budget for the Town of Fountain Hills. 4. CONSIDERATION of RESOLUTION 2010-23, adopting the tentative budget as the final budget for the 2010-2011 fiscal year budget for the Town of Fountain Hills. 5. ADJOURN the Special Session and CONVENE the Regular Session. REGULAR SESSION AGENDA  CALL THE REGULAR SESSION TO ORDER – Mayor Schlum  ROLL CALL – Mayor Schlum  INVOCATION – Pastor Tom Daly, Trinity Lutheran Church  MAYOR’S REPORT (i) The Mayor will read a proclamation declaring July as Park and Recreation Month.  SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS (i) Presentation by Barry Broome, President & CEO, Greater Phoenix Economic Council (GPEC) (ii) Presentation by Fred Bedell, Chair of the Fountain Park Sub-Committee, regarding the Greening of the Downtown Committee’s activities. CALL TO THE PUBLIC Pursuant to A.R.S. §38-431-01(G), public comment is permitted (not required) on matters not listed on the agenda. Any such comment (i) must be within the jurisdiction of the Council and (ii) is subject to reasonable time, place, and manner restrictions. The Council will not discuss or take legal action on matters raised during “Call to the Public” unless the matters are properly noticed for discussion and legal action. At the conclusion of the call to the public, individual Councilmembers may (i) respond to criticism, (ii) ask staff to review a matter or (iii) ask that the matter be placed on a future Council agenda. Z:\Council Packets\2010\R6-17-10\100617A.docx Last printed 6/16/2010 4:56 PM Page 3 of 4 CONSENT AGENDA 1. CONSIDERATION of approving the TOWN COUNCIL MEETING MINUTES from May 4, 11, 20, 2010; and June 3, 2010. 2. CONSIDERATION of approving the CONTRACT with Fountain View Village for home delivered meals for fiscal years 2010 through 2012. 3. CONSIDERATION of a SPECIAL EVENT LIQUOR LICENSE, submitted by Jerold Lane Miles (for the Fountain Hills and Lower Verde Valley Museum and Historical Society) for the purpose of a fundraising event, to be located at 13001 N. La Montana Drive, Fountain Hills, AZ, scheduled to be held on August 28, 2010, from 6:00 p.m. to 10:00 p.m. 4. CONSIDERATION of a SPECIAL EVENT LIQUOR LICENSE, submitted by Jerold Lane Miles (for the Fountain Hills and Lower Verde Valley Museum and Historical Society) for the purpose of a fundraising event, to be located at 13001 N. La Montana Drive, Fountain Hills, AZ, scheduled to be held on September 15, 2010, from 6:00 p.m. to 10:00 p.m. 5. CONSIDERATION of a SPECIAL EVENT LIQUOR LICENSE, submitted by Jerold Lane Miles (for the Fountain Hills and Lower Verde Valley Museum and Historical Society) for the purpose of a fundraising event, to be located at 13001 N. La Montana Drive, Fountain Hills, AZ, scheduled to be held on November 17, 2010, from 6:00 p.m. to 10:00 p.m. 6. CONSIDERATION of AWARDING the contract to Larson Allen, LLP for financial audit services for fiscal years 2010 through 2012, in an amount not to exceed $84,300 REGULAR AGENDA 7. CONSIDERATION of the SECOND AMENDMENT to the Professional Services Agreement between the Town and the Extended Hands Food Bank, extending the term of the contract by one year in the amount of $37,840. 8. CONSIDERATION of the SECOND AMENDMENT to the Professional Services Agreement between the Town and the Fountain Hills Chamber of Commerce/Tourism extending their term of the contract by one year in the amount of $129,000. 9. CONSIDERATION of the SECOND AMENDMENT to the Professional Services Agreement between the Town and the Fountain Hills Community Theater extending the term of the contract by one year in the amount of $90,300. 10. CONSIDERATION of the SECOND AMENDMENT to the Professional Services Agreement between the Town and the Boys and Girls Club of Greater Scottsdale extending the term of the contract by one year in the amount of $100,000. 11. CONSIDERATION of APPROVING the 4 day/10 hour per day work schedule for Town employees on a permanent basis. 12. CONSIDERATION of awarding the ANNUAL LANDSCAPE AGREEMENT to Artistic Lands Management, Inc. in the amount of $179,127.20, for the period July 1, 2010 through June 30, 2011. 13. CONSIDERATION of RESOLUTION 2010-17, authorizing the submission of an application for grant consideration and by the Arizona Department of Transportation and the Maricopa Association of Governments relating to Saguaro Boulevard Pedestrian and Landscape improvements. Z:\Council Packets\2010\R6-17-10\100617A.docx Last printed 6/10/2010 6:08 PM Page 3 of 4 14. COUNCIL DISCUSSION/DIRECTION to the Town Manager. Items listed below are related only to the propriety of (i) placing such items on a future agenda for action or (ii) directing staff to conduct further research and report back to the Council: None. 15. SUMMARY of COUNCIL REQUESTS and REPORT ON RECENT ACTIVITIES by the Town Manager. 16. ADJOURNMENT. DATED this 10th day of June, 2010 Bevelyn J. Bender, Town Clerk The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 480-816-5100 (voice) or 1-800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in this meeting or to obtain agenda information in large print format. Supporting documentation and staff reports furnished the Council with this agenda are available for review in the Clerk’s office. PRESENTED BY Barry Broome GPEC President and CEO ADVANCING OPPORTUNITIES IN GREATER PHOENIX Presented to Town of Fountain Hills Council Meeting June 17, 2010 •A true regional model where public and private members collaborate to promote Greater Phoenix as a great place to grow business. •Supported by Maricopa County, 18 cities and towns, and more than 140 private-sector businesses. •The catalyst that strengthens the region’s economic base, ensuring it is both diversified and competitive. GREATER PHOENIX ECONOMIC COUNCIL The Region’s Economic Development Authority GPEC PROSPECT ACTIVITY Five-Year Analysis of Prospect Sources 2010*2009 2008 2007 2006 Total % of Total Total % of Total Total % of Total Total % of Total Total % of Total ADOC 30 16%43 22%42 25%49 29%55 35% EDDT 6 3%4 2%7 4%8 5%10 6% GPEC 100 24 13%31 16%30 18%34 20%27 17% GPEC-direct 79 42%64 32%36 22%34 20%31 20% GPEC investor 8 4%3 2%4 2%5 3%4 3% Local broker 29 16%10 5%18 11%24 14%16 10% Out-of-state broker 10 5%11 6%19 11%12 7%12 8% Unknown 0 0%32 16%11 7%2 1%1 1% TOTAL 186 198 167 168 156 * Through May 31, 2010 GPEC PROSPECT ACTIVITY Pursuing Foreign Direct Investment •International, FDI opportunities have been a strong focus for GPEC over the last three years. 2010 2009 2008 Prospects 30 31 27 % of Total Prospect Activity 16%16%16% Canada 27% China 14% Denmark 3%France 3% Germany 17% Japan 10% Korea 7% Mexico 10% Spain 3% Switzerland 3%Unknown 3% 2010 International Prospects GPEC PROSPECT ACTIVITY By High-Wage Industry 2010*2009 2008 2007 2006 Total % of Total Total % of Total Total % of Total Total % of Total Total % of Total Advanced Business Services 30 16.1%42 21.2%48 28.7%46 27.4%39 25% Aerospace 5 2.7%6 3%8 4.8%7 4.2%10 6.4% Bioscience / Healthcare 10 5.4%11 5.6%11 6.6%13 7.7%10 6.4% High-tech 15 8.1%8 4%8 4.8%10 6%4 2.6% Solar 48 25.8%47 23.7%13 7.8%1 0.6%1 0.6% TOTAL 108 58.1%114 57.6%88 52.7%77 45.8%64 41% * Through May 31, 2010 GREATER PHOENIX ECONOMIC COUNCIL 602.256.7700 WWW.GPEC.ORG LOOKING TO CALIFORNIA Business Case for New Opportunities, Partnerships •Approximately 23% of GPEC’s current prospects come from CA. •Corporate headquarters and Fortune 500 companies leaving CA (ie, Northrop Grumman to DC). •CA’s high-tech/manufacturing industry losing ground due to regulatory climate, tax burden and reputation as a difficult and costly place to do business.1 •Wide gap between capacity for ingenuity and entrepreneurship, and the ability to efficiently commercialize innovation in manufacturing. 1 2009 Milken Institute Source: GPEC GPEC SCORECARD Progress Toward Goals * Through May 31, 2010 APPLYING OUR SELLING APPROACH How Fountain Hills Partners with GPEC Business Development GPEC E-Tracks: Fountain Hills’ Response to Opportunities •9.1% response rate to office projects that have been e-tracked. •Project Global •Software industry •10,000 SF existing building •30 jobs •3.6% response rate to industrial projects that have been e-tracked. •Project Wood •Optics industry •20,000 SF existing building •20 jobs •Project Junction •Solar industry •7,500 SF existing building •5 jobs * Through May 31, 2010 APPLYING OUR SELLING APPROACH How Fountain Hills Partners with GPEC Business Development Access to Intelligence Tools for a Competitive Business Case •Four-person research / strategy department available for competitive analysis •Co-Star database of commercial and industrial real estate. •MetroComp operating cost-comparison software for 53 markets. •Greater Phoenix Consensus Impact Model analysis. Regional Representation •Prospecting at trade shows, conferences and sales missions to expand the project pipeline. •Mayor Schlum attended Intersolar Conference in San Francisco in 2009 •Hosting ExecuTours—executive familiarization tours tailored for high-level decision-makers and national site-selection consultants. Strategic Connections •Connecting prospects with communities •EPCOR, Canadian utility company looking at expansion in Arizona that would supply water to Fountain Hills RANK PRIOR TO SB1403 WITH RENEWABLE PROGRAM 1 OR OR 2 NM NM 3 CO AZ 4 NV CO 5 CA NV 6 TX CA 7 AZ TX* *Texas has a closing fund of more than $300 million. Source: Incentive Advisors, Greater Phoenix Economic Council 77 SOLAR PROJECTS $4.6B CAP INV $46,408 AVG WAGE 7,314 QUALITY JOBS INCREASING COMPETITIVENESS Renewable Energy Tax Incentive Program Advances Arizona’s Capabilities INCREASING COMPETITIVENESS Renewable Energy Tax Incentive Program Advances Arizona’s Capabilities Immediate Prospect Opportunities COMPANY PROJECT TYPE LOCATION JOBS INVESTMENT ($ million) Suntech U.S. Manufacturing Goodyear 150 $13 Alpha Energy Headquarters Phoenix 50 $3.5 Tower Automotive Manufacturing TBD 182 $50 GPEC-assisted Solar Locates To-Date PROSPECT PROJECT TYPE JOBS INVESTMENT ($ million) Project Thermal Manufacturing 202 $97 Project Elmwood Manufacturing 167 $10 INCREASING COMPETITIVENESS Improving Arizona’s Business Climate [1]AZ is the only state in the country currently without a job-training program. AZ ENTERPRISE PROGRAM JOB-TRAINING QUALITY JOBS OPPORTUNITY FUND 100% SALES FACTOR CORPORATE INCOME TAX SMALL BUSINESS ECONOMIC DEVELOPMENT PROGRAMS FOR BASE INDUSTRIES Creates a statewide enterprise zone program. Property tax reclassification to Class 6 for up to 10 years depending on amount of new investment. Also offers $9,000 per every qualified new job created. Job-training grant up to 100% of withholdings for every net new job created for 10 years. Offers 50% of withholdings from new jobs to be rebated to qualifying company Gives Governor oversight of discretionary fund that allows Arizona to compete for high-impact projects. Increase current sales factor from current 80% to 100% Reduce corporate income tax rate from 6.96% to 5.00% by 2015. Allow capital gains derived from investments in and by small business to be deductable. Reduce income tax rate for small business. COMPETITIVE RANKING FROM 9 TO 3 (Mountain West) FROM 9 TO 5 (Mountain West) TOP 10 (National) AZ JOINS TOP- THIRD of states with a closing fund FROM 19 TO 1 (National) FROM 5 TO 1 (Mountain West) FROM 24 TO 8 (National) FROM 6 TO 5 (Mountain West) FROM 7 TO 5 (For Small Business) NEW WAY OF MARKETING Creating New Exposure for Region’s Assets A news and information source designed to inform and initiate the conversation about business, employment and the economy in Greater Phoenix. www.opportunitygreaterphoenix.com NEW WAY OF MARKETING Creating New Exposure for Region’s Assets List value-based, unique and shovel-ready properties on a next-generation database. This interactive web program allows users to search for available properties, as well as generate site-specific demographic and business analysis reports. www.opportunitygreaterphoenix. com/insite greaterphoenixINSITE 602.256.7700 www.gpec.org QUESTIONS? Thank You for Your Time @GPEC Greater Phoenix Economic Council (Groups) /gpecgreaterphoenix 1274162.2 PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND LARSONALLEN, LLP THIS PROFESSIONAL SERVICES AGREEMENT (this “Agreement”) is made as of June 17, 2010, between the Town of Fountain Hills, an Arizona municipal corporation (the “Town”) and LarsonAllen, LLP, a Minnesota limited liability partnership (the “Contractor”). RECITALS A. The Town issued a Request for Proposals “Request for Proposals for Financial Audit Services” (the “RFP”), attached hereto as Exhibit A and incorporated herein by reference, seeking proposals from vendors for financial auditing services. B. The Contractor submitted a proposal in response to the RFP (the “Proposal”), attached hereto as Exhibit B and incorporated herein by reference, and the Town desires to enter into an Agreement with the Contractor to provide financial auditing services (the “Services”). AGREEMENT NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by reference, the following mutual covenants and conditions, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Town and the Contractor hereby agree as follows: 1. Term of Agreement. This Agreement shall be effective as of the date first set forth above and shall remain in full force and effect until December 31, 2012 (the “Initial Term”). This Agreement may be renewed for up to two additional three-year terms (each a “Renewal Term”) if deemed in the best interests of the Town and subject to availability and appropriation of funds for renewal in each subsequent year. Such renewal shall occur upon the Town’s written notice to the Contractor given not later than 30 days prior to the end of the then - current term. The Initial Term and any Renewal Terms are collectively referred to as the “Term”. Upon renewal, the terms and conditions of this Agreement shall remain in full force and effect. 2. Scope of Work. Contractor shall provide the Services as set forth in the Scope of Work, attached hereto as Exhibit C and incorporated herein by reference. 3. Compensation. The Town shall pay Contractor an amount not to exceed $84,300.00 for the Services at the rates as set forth in the Fee Proposal, attached hereto as Exhibit D and incorporated herein by reference. 4. Payments. The Town shall pay the Contractor monthly, based upon work performed and completed to date, and upon submission and approval of invoices. All invoices 1274162.2 2 shall document and itemize all work completed to date. The invoice statement shall include a record of time expended and work performed in sufficient detail to justify payment. 5. Documents. All documents prepared and submitted to the Town pursuant to this Agreement shall be the property of the Town. 6. Contractor Personnel. Contractor shall provide adequate, experienced personnel, capable of and devoted to the successful completion of the Services to be performed under this Agreement. Contractor agrees to assign specific individuals to key positions. If deemed qualified, the Contractor is encouraged to hire Town residents to fill vacant positions at all levels. Contractor agrees that, upon commencement of the Services to be performed under this Agreement, key personnel shall not be removed or replaced without prior written notice to the Town. If key personnel are not available to perform the Services for a continuous period exceeding 30 calendar days, or are expected to devote substantially less effort to the Services than initially anticipated, Contractor shall immediately notify the Town of same and shall, subject to the concurrence of the Town, replace such personnel with personnel of substantially equal ability and qualifications. 7. Inspection; Acceptance. All work shall be subject to inspection and acceptance by the Town at reasonable times during Contractor’s performance. The Contractor shall provide and maintain a self-inspection system that is acceptable to the Town. 8. Licenses; Materials. Contractor shall maintain in current status all federal, state and local licenses and permits required for the operation of the business conducted by the Contractor. The Town has no obligation to provide Contractor, its employees or subcontractors any business registrations or licenses required to perform the specific services set forth in this Agreement. The Town has no obligation to provide tools, equipment or material to Contractor. 9. Performance Warranty. Contractor warrants that the Services rendered will conform to the requirements of this Agreement and to the highest professional standards in the field. 10. Indemnification. To the fullest extent permitted by law, the Contractor shall indemnify, defend and hold harmless the Town and each council member, officer, employee or agent thereof (the Town and any such person being herein called an “Indemnified Party”), for, from and against any and all losses, claims, damages, liabilities, costs and expenses (including, but not limited to, reasonable attorneys’ fees, court costs and the costs of appellate proceedings) to which any such Indemnified Party may become subject, under any theory of liability whatsoever (“Claims”), insofar as such Claims (or actions in respect thereof) relate to, arise out of, or are caused by or based upon the negligent acts, intentional misconduct, errors, mistakes or omissions, in connection with the work or services of the Contractor, its officers, employees, agents, or any tier of subcontractor in the performance of this Agreement. The amount and type of insurance coverage requirements set forth below will in no way be construed as limiting the scope of the indemnity in this Section. 1274162.2 3 11. Insurance. 11.1 General. a. Insurer Qualifications. Without limiting any obligations or liabilities of Contractor, Contractor shall purchase and maintain, at its own expense, hereinafter stipulated minimum insurance with insurance companies duly licensed by the State of Arizona with an AM Best, Inc. rating of A- or above with policies and forms satisfactory to the Town. Failure to maintain insurance as specified herein may result in termination of this Agreement at the Town’s option. b. No Representation of Coverage Adequacy. By requiring insurance herein, the Town does not represent that coverage and limits will be adequate to protect Contractor. The Town reserves the right to review any and all of the insurance policies and/or endorsements cited in this Agreement but has no obligation to do so. Failure to demand such evidence of full compliance with the insurance requirements set forth in this Agreement or failure to identify any insurance deficiency shall not relieve Contractor from, nor be construed or deemed a waiver of, its obligation to maintain the required insurance at all times during the performance of this Agreement. c. Additional Insured. All insurance coverage and self-insured retention or deductible portions, except Workers’ Compensation insurance and Professional Liability insurance, if applicable, shall name, to the fullest extent permitted by law for claims arising out of the performance of this Agreement, the Town, its agents, representatives, officers, directors, officials and employees as Additional Insured as specified under the respective coverage sections of this Agreement. d. Coverage Term. All insurance required herein shall be maintained in full force and effect until all work or services required to be performed under the terms of this Agreement are satisfactorily performed, completed and formally accepted by the Town, unless specified otherwise in this Agreement. e. Primary Insurance. Contractor’s insurance shall be primary insurance with respect to performance of this Agreement and in the protection of the Town as an Additional Insured. f. Waiver. All policies, except for Professional Liability, including Workers’ Compensation insurance, shall contain a waiver of rights of recovery (subrogation) against the Town, its agents, representatives, officials, officers and employees for any claims arising out of the work or services of Contractor. Contractor shall arrange to have such subrogation waivers incorporated into each policy via formal written endorsement thereto. g. Policy Deductibles and/or Self-Insured Retentions. The policies set forth in these requirements may provide coverage that contains deductibles or self-insured retention amounts. Such deductibles or self-insured retention shall not be applicable with respect to the policy limits provided to the Town. Contractor shall be solely responsible for any such deductible or self-insured retention amount. 1274162.2 4 h. Use of Subcontractors. If any work under this Agreement is subcontracted in any way, Contractor shall execute written agreements with its subcontractors containing the indemnification provisions set forth in this Section and insurance requirements set forth herein protecting the Town and Contractor. Contractor shall be responsible for executing any agreements with its subcontractors and obtaining certificates of insurance verifying the insurance requirements. i. Evidence of Insurance. Prior to commencing any work or services under this Agreement, Contractor will provide the Town with suitable evidence of insurance in the form of certificates of insurance and a copy of the declaration page(s) of the insurance policies as required by this Agreement, issued by Contractor’s insurance insurer(s) as evidence that policies are placed with acceptable insurers as specified herein and provide the required coverages, conditions and limits of coverage specified in this Agreement and that such coverage and provisions are in full force and effect. Confidential information such as the policy premium may be redacted from the declaration page(s) of each insurance policy, provided that such redactions do not alter any of the information required by this Agreement. The Town shall reasonably rely upon the certificates of insurance and declaration page(s) of the insurance policies as evidence of coverage but such acceptance and reliance shall not waive or alter in any way the insurance requirements or obligations of this Agreement. In the event any insurance policy required by this Agreement is written on a “claims made” basis, coverage shall extend for two years past completion of the Services and the Town’s acceptance of the Contractor’s work or services and as evidenced by annual certificates of insurance. If any of the policies required by this Agreement expire during the life of this Agreement, it shall be Contractor’s responsibility to forward renewal certificates and declaration page(s) to the Town 30 days prior to the expiration date. All certificates of insurance and declarations required by this Agreement shall be identified by referencing the RFP number and title or this Agreement. A $25.00 administrative fee shall be assessed for all certificates or declarations received without the appropriate RFP number and title or a reference to this Agreement, as applicable. Additionally, certificates of insurance and declaration page(s) of the insurance policies submitted without referencing the appropriate RFP number and title or reference to this Agreement, as applicable, will be subject to rejection and may be returned or discarded. Certificates of insurance and declaration page(s) shall specifically include the following provisions: (1) The Town, its agents, representatives, officers, directors, officials and employees are Additional Insureds as follows: (a) Commercial General Liability - Under Insurance Services Office, Inc., (“ISO”) Form CG 20 10 03 97 or equivalent. (b) Auto Liability - Under ISO Form CA 20 48 or equivalent. (c) Excess Liability - Follow Form to underlying insurance. 1274162.2 5 (2) Contractor’s insurance shall be primary insurance as respects performance of the Agreement. (3) All policies, except for Professional Liability, including Workers’ Compensation, waive rights of recovery (subrogation) against Town, its agents, representatives, officers, officials and employees for any claims arising out of work or services performed by Contractor under this Agreement. (4) A 30-day advance notice cancellation provision. If ACORD certificate of insurance form is used, the phrases in the cancellation provision “endeavor to” and “but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representatives” shall be deleted. Certificate forms other than ACORD form shall have similar restrictive language deleted. 11.2 Required Insurance Coverage. a. Commercial General Liability. Contractor shall maintain “occurrence” form Commercial General Liability insurance with an unimpaired limit of not less than $1,000,000 for each occurrence, $2,000,000 Products and Completed Operations Annual Aggregate and a $2,000,000 General Aggregate Limit. The policy shall cover liability arising from premises, operations, independent Contractors, products-completed operations, personal injury and advertising injury. Coverage under the policy will be at least as broad as ISO policy form CG 00 010 93 or equivalent thereof, including but not limited to, separation of insured’s clause. To the fullest extent allowed by law, for claims arising out of the performance of this Agreement, the Town, its agents, representatives, officers, officials and employees shall be cited as an Additional Insured under ISO, Commercial General Liability Additional Insured Endorsement form CG 20 10 03 97, or equivalent, which shall read “Who is an Insured (Section II) is amended to include as an insured the person or organization shown in the Schedule, but only with respect to liability arising out of “your work” for that insured by or for you.” If any Excess insurance is utilized to fulfill the requirements of this subsection, such Excess insurance shall be “follow form” equal or broader in coverage scope than underlying insurance. b. Vehicle Liability. Contractor shall maintain Business Automobile Liability insurance with a limit of $1,000,000 each occurrence on Contractor’s owned, hired and non-owned vehicles assigned to or used in the performance of the Contractor’s work or services under this Agreement. Coverage will be at least as broad as ISO coverage code “1” “any auto” policy form CA 00 01 12 93 or equivalent thereof. To the fullest extent allowed by law, for claims arising out of the performance of this Agreement, the Town, its agents, representatives, officers, directors, officials and employees shall be cited as an Additional Insured under ISO Business Auto policy Designated Insured Endorsement form CA 20 48 or equivalent. If any Excess insurance is utilized to fulfill the requirements of this subsection, such Excess insurance shall be “follow form” equal or broader in coverage scope than underlying insurance. c. Professional Liability. If this Agreement is the subject of any professional services or work, or if the Contractor engages in any professional services or work adjunct or residual to performing the work under this Agreement, the Contractor shall maintain Professional Liability insurance covering negligent errors and omissions arising out of the 1274162.2 6 Services performed by the Contractor, or anyone employed by the Contractor, or anyone for whose negligent acts, mistakes, errors and omissions the Contractor is legally liable, with an unimpaired liability insurance limit of $2,000,000 each claim and $2,000,000 annual aggregate. In the event the Professional Liability insurance policy is written on a “claims made” basis, coverage shall extend for two years past completion and acceptance of the Services, and the Contractor shall be required to submit certificates of insurance and a copy of the declaration page(s) of the insurance policies evidencing proper coverage is in effect as required above. d. Workers’ Compensation Insurance. Contractor shall maintain Workers’ Compensation insurance to cover obligations imposed by federal and state statutes having jurisdiction over Contractor’s employees engaged in the performance of work or services under this Agreement and shall also maintain Employers Liability Insurance of not less than $500,000 for each accident, $500,000 disease for each employee and $1,000,000 disease policy limit. 11.3 Cancellation and Expiration Notice. Insurance required herein shall not expire, be canceled, or materially change without 30 days’ prior written notice to the Town. 12. Applicable Law; Venue. In the performance of this Agreement, Contractor shall abide by and conform to any and all laws of the United States, State of Arizona and Town of Fountain Hills, including but not limited to, federal and state executive orders providing for equal employment and procurement opportunities, the Federal Occupational Safety and Health Act and any other federal or state laws applicable to this Agreement. This Agreement shall be governed by the laws of the State of Arizona and suit pertaining to this Agreement may be brought only in courts in the State of Arizona. 13. Termination; Cancellation. 13.1 For Town’s Convenience. This Agreement is for the convenience of the Town and, as such, may be terminated without cause after receipt by Contractor of written notice by the Town. Upon termination for convenience, Contractor shall be paid for all undisputed services performed to the termination date. 13.2 For Cause. This Agreement may be terminated by either party upon 30 days’ written notice should the other party fail to substantially perform in accordance with this Agreement’s terms, through no fault of the party initiating the termination. In the event of such termination for cause, payment shall be made by the Town to the Contractor for the undisputed portion of its fee due as of the termination date. 13.3 Due to Work Stoppage. This Agreement may be terminated by the Town upon 30 days’ written notice to Contractor in the event that the Services are permanently abandoned. In the event of such termination due to work stoppage, payment shall be made by the Town to the Contractor for the undisputed portion of its fee due as of the termination date. 13.4 Conflict of Interest. This Agreement is subject to the provisions of ARIZ. REV. STAT. § 38-511. The Town may cancel this Agreement without penalty or further obligations by the Town or any of its departments or agencies if any person significantly 1274162.2 7 involved in initiating, negotiating, securing, drafting or creating this Agreement on behalf of the Town or any of its departments or agencies is, at any time while the Agreement or any extension of the Agreement is in effect, an employee of any other party to the Agreement in any capacity or a consultant to any other party of the Agreement with respect to the subject matter of the Agreement. 13.5 Gratuities. The Town may, by written notice to the Contractor, cancel this Agreement if it is found by the Town that gratuities, in the form of economic opportunity, future employment, entertainment, gifts or otherwise, were offered or given by the Contractor or any agent or representative of the Contractor to any officer, agent or employee of the Town for the purpose of securing this Agreement. In the event this Agreement is cancelled by the Town pursuant to this provision, the Town shall be entitled, in addition to any other rights and remedies, to recover or withhold from the Contractor an amount equal to 150% of the gratuity. 13.6 Agreement Subject to Appropriation. The provisions of this Agreement for payment of funds by the Town shall be effective when funds are appropriated for purposes of this Agreement and are actually available for payment. The Town shall be the sole judge and authority in determining the availability of funds under this Agreement and the Town shall keep the Contractor fully informed as to the availability of funds for the Agreement. The obligation of the Town to make any payment pursuant to this Agreement is a current expense of the Town, payable exclusively from such annual appropriations, and is not a general obligation or indebtedness of the Town. If the Town Council fails to appropriate money sufficient to pay the amounts as set forth in this Agreement during any immediately succeeding fiscal year, this Agreement shall terminate at the end of then-current fiscal year and the Town and the Contractor shall relieved of any subsequent obligation under this Agreement. 14. Miscellaneous. 14.1 Independent Contractor. The Contractor acknowledges and agrees that the Services provided under this Agreement are being provided as an independent contractor, not as an employee or agent of the Town. Contractor, its employees and subcontractors are not entitled to workers’ compensation benefits from the Town. The Town does not have the authority to supervise or control the actual work of Contractor, its employees or subcontractors. The Contractor, and not the Town, shall determine the time of its performance of the services provided under this Agreement so long as Contractor meets the requirements of its agreed Scope of Work as set forth in Section 2 above. Contractor is neither prohibited from entering into other contracts nor prohibited from practicing its profession elsewhere. Town and Contractor do not intend to nor will they combine business operations under this Agreement. 14.2 Laws and Regulations. The Contractor shall keep fully informed and shall at all times during the performance of its duties under this Agreement ensure that it and any person for whom the Contractor is responsible remains in compliance with all rules, regulations, ordinances, statutes or laws affecting the Services, including the following: (a) existing and future Town and County ordinances and regulations, (b) existing and future state and federal laws and (c) existing and future Occupational Safety and Health Administration (“OSHA”) standards. 1274162.2 8 14.3 Amendments. This Agreement may be modified only by a written amendment signed by persons duly authorized to enter into contracts on behalf of the Town and the Contractor. 14.4 Provisions Required by Law. Each and every provision of law and any clause required by law to be in the Agreement will be read and enforced as though it were included herein and, if through mistake or otherwise any such provision is not inserted, or is not correctly inserted, then upon the application of either party, the Agreement will promptly be physically amended to make such insertion or correction. 14.5 Severability. The provisions of this Agreement are severable to the extent that any provision or application held to be invalid by a Court of competent jurisdiction shall not affect any other provision or application of the Agreement which may remain in effect without the invalid provision or application. 14.6 Relationship of the Parties. It is clearly understood that each party will act in its individual capacity and not as an agent, employee, partner, joint venturer, or associate of the other. An employee or agent of one party shall not be deemed or construed to be the employee or agent of the other for any purpose whatsoever. The Contractor is advised that taxes or Social Security payments will not be withheld from any Town payments issued hereunder and Contractor agrees to be fully and solely responsible for the payment of such taxes or any other tax applicable to this Agreement. 14.7 Entire Agreement; Interpretation; Parol Evidence. This Agreement represents the entire agreement of the parties with respect to its subject matter, and all previous agreements, whether oral or written, entered into prior to this Agreement are hereby revoked and superseded by this Agreement. No representations, warranties, inducements or oral agreements have been made by any of the parties except as expressly set forth herein, or in any other contemporaneous written agreement executed for the purposes of carrying out the provisions of this Agreement. This Agreement shall be construed and interpreted according to its plain meaning, and no presumption shall be deemed to apply in favor of, or against the party drafting the Agreement. The parties acknowledge and agree that each has had the opportunity to seek and utilize legal counsel in the drafting of, review of, and entry into this Agreement. 14.8 Assignment. No right or interest in this Agreement shall be assigned by Contractor without prior, written permission of the Town signed by the Town Manager and no delegation of any duty of Contractor shall be made without prior, written permission of the Town signed by the Town Manager. Any attempted assignment or delegation by Contractor in violation of this provision shall be a breach of this Agreement by Contractor. 14.9 Subcontracts. No subcontract shall be entered into by the Contractor with any other party to furnish any of the material or services specified herein without the prior written approval of the Town. The Contractor is responsible for performance under this Agreement whether or not subcontractors are used. 14.10 Rights and Remedies. No provision in this Agreement shall be construed, expressly or by implication, as waiver by the Town of any existing or future right and/or remedy 1274162.2 9 available by law in the event of any claim of default or breach of this Agreement. The failure of the Town to insist upon the strict performance of any term or condition of this Agreement or to exercise or delay the exercise of any right or remedy provided in this Agreement, or by law, or the Town’s acceptance of and payment for services, shall not release the Contractor from any responsibilities or obligations imposed by this Agreement or by law, and shall not be deemed a waiver of any right of the Town to insist upon the strict performance of this Agreement. 14.11 Attorneys’ Fees. In the event either party brings any action for any relief, declaratory or otherwise, arising out of this Agreement or on account of any breach or default hereof, the prevailing party shall be entitled to receive from the other party reasonable attorneys’ fees and reasonable costs and expenses, determined by the court sitting without a jury, which shall be deemed to have accrued on the commencement of such action and shall be enforced whether or not such action is prosecuted through judgment. 14.12 Liens. All materials or services shall be free of all liens and, if the Town requests, a formal release of all liens shall be delivered to the Town. 14.13 Offset. a. Offset for Damages. In addition to all other remedies at law or equity, the Town may offset from any money due to the Contractor any amounts Contractor owes to the Town for damages resulting from breach or deficiencies in performance or breach of any obligation under this Agreement. b. Offset for Delinquent Fees or Taxes. The Town may offset from any money due to the Contractor any amounts Contractor owes to the Town for delinquent fees, transaction privilege taxes and property taxes, including any interest or penalties. 14.14 Notices and Requests. Any notice or other communication required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered to the party at the address set forth below, (b) deposited in the U.S. Mail, registered or certified, return receipt requested, to the address set forth below, (c) given to a recognized and reputable overnight delivery service, to the address set forth below or (d) delivered by facsimile transmission to the number set forth below: If to the Town: Town of Fountain Hills 16705 East Avenue of the Fountains Fountain Hills, Arizona 85268 Facsimile: (480) 837-3145 Attn: Richard L. Davis, Town Manager With copy to: GUST ROSENFELD, P.L.C. One East Washington, Suite 1600 Phoenix, Arizona 85004-2553 Facsimile: 602-340-1538 Attn: Andrew J. McGuire, Esq. 1274162.2 10 If to Contractor: LarsonAllen, LLP 1201 South Alma School Road Mesa Arizona 85210 Facsimile: (480) 615-2350 Attn: Dennis J. Osuch, Principal or at such other address, and to the attention of such other person or officer, as any party may designate in writing by notice duly given pursuant to this subsection. Notices shall be deemed received (a) when delivered to the party, (b) three business days after being placed in the U.S. Mail, properly addressed, with sufficient postage, (c) the following business day after being given to a recognized overnight delivery service, with the person giving the notice paying all required charges and instructing the delivery service to deliver on the following business day, or (d) when received by facsimile transmission during the normal business hours of the recipient. If a copy of a notice is also given to a party’s counsel or other recipient, the provisions above governing the date on which a notice is deemed to have been received by a party shall mean and refer to the date on which the party, and not its counsel or other recipient to which a copy of the notice may be sent, is deemed to have received the notice. 14.15 Confidentiality of Records. The Contractor shall establish and maintain procedures and controls that are acceptable to the Town for the purpose of ensuring that information contained in its records or obtained from the Town or from others in carrying out its obligations under this Agreement shall not be used or disclosed by it, its agents, officers, or employees, except as required to perform Contractor’s duties under this Agreement. Persons requesting such information should be referred to the Town. Contractor also agrees that any information pertaining to individual persons shall not be divulged other than to employees or officers of Contractor as needed for the performance of duties under this Agreement. 14.16 Records and Audit Rights. Contractor’s and its subcontractor’s books, records, correspondence, accounting procedures and practices, and any other supporting evidence relating to this Agreement, including the papers of any Contractor and its subcontractors’ employees who perform any work or Services pursuant to this Agreement to ensure that the Contractor and its subcontractors are complying with the warranty under subsection 14.17 below (all the foregoing hereinafter referred to as “Records”), shall be open to inspection and subject to audit and/or reproduction during normal working hours by the Town, to the extent necessary to adequately permit (a) evaluation and verification of any invoices, payments or claims based on Contractor’s and its subcontractors’ actual costs (including direct and indirect costs and overhead allocations) incurred, or units expended directly in the performance of work under this Agreement and (b) evaluation of the Contractor’s and its subcontractors’ compliance with the Arizona employer sanctions laws referenced in subsection 14.17 below. To the extent necessary for the Town to audit Records as set forth in this subsection, Contractor and its subcontractors hereby waive any rights to keep such Records confidential. For the purpose of evaluating or verifying such actual or claimed costs or units expended, the Town shall have access to said Records, even if located at its subcontractors’ facilities, from the effective date of this Agreement for the duration of the work and until three years after the date of final payment by the Town to Contractor pursuant to this Agreement. Contractor and its subcontractors shall provide the Town with adequate and appropriate workspace so that the Town can conduct audits in compliance with the provisions of this 1274162.2 11 subsection. The Town shall give Contractor or its subcontractors reasonable advance notice of intended audits. Contractor shall require its subcontractors to comply with the provisions of this subsection by insertion of the requirements hereof in any subcontract pursuant to this Agreement. 14.17 E-verify Requirements. To the extent applicable under ARIZ. REV. STAT. § 41-4401, the Contractor and its subcontractors warrant compliance with all federal immigration laws and regulations that relate to their employees and compliance with the E-verify requirements under ARIZ. REV. STAT. § 23-214(A). Contractor’s or its subcontractor’s failure to comply with such warranty shall be deemed a material breach of this Agreement and may result in the termination of this Agreement by the Town. 14.18 Scrutinized Business Operations. Pursuant to ARIZ. REV. STAT. §§ 35- 391.06 and 35-393.06, the Contractor certifies that it does not have scrutinized business operations in Sudan or Iran. For the purpose of this subsection the term “scrutinized business operations” shall have the meanings set forth in ARIZ. REV. STAT. § 35-391 or 35-393, as applicable. If the Town determines that the Contractor submitted a false certification, the Town may impose remedies as provided by law including terminating this Agreement pursuant to subsection 13.2 above. 14.19 Conflicting Terms. In the event of any inconsistency, conflict or ambiguity among the terms of the Agreement, the Scope of Work, the Fee Proposal, the RFP and the Contractor’s Proposal, the documents shall govern in the order listed herein. 14.20 Non-Exclusive Contract. This Agreement is entered into with the understanding and agreement that it is for the sole convenience of the Town. The Town reserves the right to obtain like goods and services from another source when necessary. IN WITNESS WHEREOF, the parties hereto have executed this instrument as of the date and year first set forth above. “Town” “Contractor” TOWN OF FOUNTAIN HILLS, an Arizona LARSONALLEN, LLP, municipal corporation a Minnesota limited liability partnership By: Richard L. Davis, Town Manager ATTEST: Name: Its: Bevelyn J. Bender, Town Clerk 1274162.2 12 (ACKNOWLEDGEMENTS) STATE OF ARIZONA ) ) ss. COUNTY OF MARICOPA ) This instrument was acknowledged before me on , 2010, by Richard L. Davis, the Town Manager of the TOWN OF FOUNTAIN HILLS, an Arizona municipal corporation, on behalf of the Town of Fountain Hills. Notary Public in and for the State of Arizona My Commission Expires: STATE OF ) ) ss. COUNTY OF ) This instrument was acknowledged before me on , 2010, by as of LARSONALLEN, LLP, a Minnesota limited liability partnership, on behalf of the partnership. Notary Public in and for the State of My Commission Expires: 1274162.2 EXHIBIT A TO PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND LARSONALLEN, LLP [RFP] See following pages. 1235203.1 TOWN OF FOUNTAIN HILLS FINANCIAL DIVISION REQUEST FOR PROPOSALS FOR FINANCIAL AUDIT SERVICES Town of Fountain Hills 16705 East Avenue of the Fountains Fountain Hills, Arizona 85268 SOLICITATION INFORMATION AND SELECTION SCHEDULE Solicitation Title: Financial Audit Services Release Date: April 26, 2010 Advertisement Dates: April 22, 2010 – Arizona Business Gazette NON-MANDATORY Pre-Submittal Conference: Not Applicable to this Solicitation Final Date for Inquiries May 11, 2010 Proposal Due Date and Time: May 20, 2010 3:00 p.m. (local time, Phoenix, Arizona) Shortlist Announced for Oral Interviews: May 27, 2010 Oral Interviews (if necessary): Week of June 1, 2010 Target Town Council Award Date: June 21, 2010 Anticipated Agreement Start Date: July 1, 2010 Town Representatives: Julie Ghetti jghetti@fh.az.org 480-816-5113 Mary Martin mmartin@fh.az.org 480-816-5179 * In the event that a Vendor cannot be selected based solely on Proposals submitted, Oral Interviews may be conducted at the Town’s sole discretion. ** The Town of Fountain Hills reserves the right to amend the solicitation schedule as necessary. TOWN OF FOUNTAIN HILLS FINANCIAL DIVISION 1235203.1 i Table of Contents Section A Page I. RFP Process; Award of Agreement A-1 II. Proposal Format; Scoring A-6 III. Oral Interviews; Scoring A-8 IV. Vendor Information Form A-9 Section B Sample Professional Services Agreement B-1 TOWN OF FOUNTAIN HILLS SECTION A FINANCIAL DIVISION 1235203.1 A-1 I. RFP PROCESS; AWARD OF AGREEMENT 1. Purpose; Scope of Work. The Town of Fountain Hills (the “Town”) is issuing this Request For Proposals (this “RFP”) from qualified contractors (“Vendors”) interested providing financial auditing services for the Town as more particularly described in the Scope of Work attached to the sample Professional Services Agreement as Exhibit C (the “Services”), and incorporated herein by reference. In accordance with the Town’s Procurement Code, the Town will accept sealed proposals (“Proposals”) for the Services specified in the Scope of Work in the sample Professional Services Agreement. 2. Preparation/Submission of Proposal. Vendors are invited to participate in the competitive selection process for the Services outlined in this RFP. Responding parties shall review their Proposal submissions to ensure the following requirements are met. 2.1 Irregular or Non-responsive Proposals. The Town shall consider as “irregular” or “non-responsive” and reject any Proposal not prepared and submitted in accordance with this RFP, or any Proposal lacking sufficient information to enable the Town to make a reasonable determination of compliance to the minimum qualifications. Unauthorized conditions, limitations, or provisions shall be cause for rejection. Proposals may be deemed non- responsive at any time during the evaluation process if, in the sole opinion of the Town: a. Vendor does not meet the minimum required skill, experience or requirements to perform or provide the Service. b. Vendor has a past record of failing to fully perform or fulfill contractual obligations. c. Vendor cannot demonstrate financial stability. d. Vendor’s Proposal contains false, inaccurate or misleading statements that, in the opinion of the Town Manager or authorized designee, is intended to mislead the Town in its evaluation of the Proposal. 2.2 Submittal Quantities. Interested Vendors must submit one (1) original and five (5) copies (six (6) total submittals) of the Proposal. In addition, interested parties must submit one (1) original copy of the Proposal on a CD-ROM (or electronic media approved by the Town) in printable Adobe or Microsoft Word format (or other format approved by the Town). Failure to adhere to the submittal quantity criteria shall result in the Proposal being considered non-responsive. 2.3 Required Submittal. The Proposal shall be submitted with a cover letter with an original ink signature by a person authorized to bind the Vendor. Proposals submitted without a cover letter with an original ink signature by a person authorized to bind the Vendor shall be considered non-responsive. The Proposal shall be a maximum of fifteen (15) pages to address the Proposal criteria (excluding resumes, the Vendor Information Form, but including the materials necessary to address Project understanding, general information, organizational TOWN OF FOUNTAIN HILLS SECTION A FINANCIAL DIVISION 1235203.1 A-2 chart, photos, tables, graphs, and diagrams). Each page side (maximum 8 1/2” x 11”) with criteria information shall be counted. However, one page may be substituted with an 11” x 17” sheet of paper, folded to 8 1/2” x 11”, showing a proposed Project schedule or organizational chart and only having information on one side. Cover, back, table of contents and tabs may be used and shall not be included in the page count, unless they include additional project-specific information or Proposal criteria responses. The minimum allowable font for the Proposal is 11 pt. Failure to adhere to the page limit and size criteria and font size shall result in the Proposal being considered non-responsive. Telegraphic (facsimile), electronic (e-mail) or mailgram Proposals will not be considered. 2.4. Vendor Responsibilities. All Vendors shall (a) examine the entire RFP, (b) seek clarification of any item or requirement that may not be clear, (c) check all responses for accuracy before submitting a Proposal and (d) submit the entire Proposal by the Proposal Due Date and Time. Late Proposals will not be considered. A Vendor submitting a late Proposal shall be so notified. Negligence in preparing a Proposal confers no right of withdrawal after the Proposal Due Date and Time. 2.5. Sealed Submittals. All Proposals shall be sealed and clearly marked with the RFP title, Financial Audit Services, on the lower left hand corner of the mailing envelope. A return address must also appear on the outside of the sealed Proposal. The Town is not responsible for the pre-opening of, post-opening of, or the failure to open, any Proposals not properly addressed or identified. 2.6. Pricing. The Vendor shall submit the same number of copies of the Fee Proposal as described in Section I, 2.2 in a separate, sealed envelope enclosed with the Vendor’s Proposal. Pricing shall be inclusive of all of the Services in the Scope of Work as described in the Professional Service Agreement in Exhibit C. A sample Fee Proposal is attached to the Professional Service Agreement as Exhibit D. 2.7. Address. All Proposals shall be directed to the following address: Town Clerk, 16705 East Avenue of the Fountains, Fountain Hills, Arizona 85268, or hand-delivered to the Town Clerk’s office by the Proposal Due Date and Time indicated on the cover page of this RFP. 2.8. Pricing Errors. If price is a consideration and in case of error in the extension of prices in the Proposal, the unit price shall govern. Periods of time, stated as number of days, shall be calendar days. 2.9. Proposal Irrevocable. In order to allow for an adequate evaluation, the Town requires the Proposal to be valid and irrevocable for 60 days after the Proposal Due Date and Time indicated on the cover of this RFP. 2.10 Amendment/Withdrawal of Proposal. At any time prior to the specified Proposal Due Date and Time, a Vendor (or designated representative) may amend or withdraw its Proposal. Any erasures, interlineations, or other modifications in the Proposal shall be initialed in original ink by the authorized person signing the Proposal. Facsimile, electronic (e- TOWN OF FOUNTAIN HILLS SECTION A FINANCIAL DIVISION 1235203.1 A-3 mail) or mailgram Proposal amendments or withdrawals will not be considered. No Proposal shall be altered, amended or withdrawn after the specified Proposal Due Date and Time. 3. Cost of Proposal Preparation. The Town does not reimburse the cost of developing, presenting or providing any response to this solicitation. Proposals submitted for consideration should be prepared simply and economically, providing adequate information in a straightforward and concise manner. The Vendor is responsible for all costs incurred in responding to this RFP. All materials and documents submitted in response to this RFP become the property of the Town and will not be returned. 4. Inquiries. 4.1 Written/Verbal Inquiries. Any question related to the RFP shall be directed to one of the Town Representatives whose names appear on the cover page of this RFP. Questions shall be submitted in writing or via e-mail by the close of business on the Final Date for Inquiries indicated on the cover page of this RFP or submitted verbally (A) at the Pre- Submittal Conference on the date indicated on the cover page of this RFP (if such Pre-Submittal Conference is held) or (B) after the Pre- Submittal Conference but before the Final Date for Inquiries indicated on the cover page of this RFP. In the event the Town is closed on the Final Date for Inquiries, the Vendor shall submit the question(s) to one of the Town Representatives via e-mail or voicemail. Any inquiries related to this RFP shall refer to the number and title, page and paragraph. However, the Vendor shall not place the RFP number and title on the outside of any envelope containing questions, because such an envelope may be identified as a sealed Proposal and may not be opened until after the Proposal Due Date and Time. 4.2 Inquiries Answered. Written questions will be read and answered at the Pre-Submittal Conference on the date indicated on the cover page of this RFP. Verbal or telephone inquiries directed to Town staff will not be answered. Within two (2) business days following the Pre-Submittal Conference, answers to all questions received in writing or via e- mail or verbally at the Pre-Submittal Conference will be mailed, sent via facsimile and/or e- mailed to all parties who obtained an RFP package from the Town and who legibly provided their mailing address, facsimile and/or e-mail address to the Town. No questions, submitted in any form, will be answered after the Final Date for Inquiries listed on the cover of this RFP. 5. Pre-Submittal Conference. A Pre-Submittal Conference may be held. If scheduled, the date and time of this conference will be indicated on the cover page of this RFP. This conference may be designated as mandatory or non-mandatory on the cover page of this RFP. Additionally, if the Pre-Submittal Conference is designated as mandatory, failure to attend shall render that Vendor’s Proposal non-responsive. Vendors are strongly encouraged to attend those Pre-Submittal Conferences designated as non-mandatory. The purpose of this conference will be to clarify the contents of this RFP in order to prevent any misunderstanding of the Town’s requirements. Any doubt as to the requirements of this RFP or any apparent omission or discrepancy should be presented to the Town at this conference. The Town will then determine if any action is necessary and may issue a written amendment or addendum to the RFP. Oral statements or instructions will not constitute an amendment or addendum to this RFP. Any addendum issued as a result of any change in this RFP shall become part of the RFP and must be TOWN OF FOUNTAIN HILLS SECTION A FINANCIAL DIVISION 1235203.1 A-4 acknowledged in the Proposal submittal. Failure to indicate receipt of the addendum shall result in the Proposal being rejected as non-responsive. 6. Payment Requirements; Payment Discounts. Any Proposal that requires payment in less than 30 calendar days shall not be considered. Payment discounts of 30 calendar days or more will be deducted from the Proposal price in determining the low Proposal. However, the Town shall be entitled to take advantage of any payment discount offered by the Vendor provided payment is made within the discount period. 7. Federal Excise Tax. The Town is exempt from Federal Excise Tax, including the Federal Transportation Tax. Sales tax, if any, shall be indicated as a separate item. 8. Public Record. All Proposals shall become the property of the Town and shall become a matter of public record available for review, subsequent to the award notification, in accordance with the Town’s Procurement Code. 9. Confidential Information. If a Vendor believes that a Proposal or protest contains information that should be withheld from the public record, a statement advising the Town Representative of this fact shall accompany the submission and the information shall be identified. The information identified by the Vendor as confidential shall not be disclosed until the Town Representative makes a written determination. The Town Representative shall review the statement and information and shall determine in writing whether the information shall be withheld. If the Town Representative determines to disclose the information, the Town Representative shall inform the Vendor in writing of such determination. 10. Vendor Licensing and Registration. Prior to the award of the Agreement, the successful Vendor shall (a) be licensed with the Arizona Corporation Commission to do business in Arizona and (b) have a completed Request for Vendor Number on file with the Town Financial Services Department. The Vendor shall provide licensure information with the Proposal. Corporations and partnerships shall be able to provide a Certificate of Good Standing from the Arizona Corporation Commission. 11. Certification. By submitting a Proposal, the Vendor certifies: 11.1 No Collusion. The submission of the Proposal did not involve collusion or other anti-competitive practices. 11.2 No Discrimination. It shall not discriminate against any employee or applicant for employment in violation of Federal Executive Order 11456. 11.3 No Gratuity. It has not given, offered to give, nor intends to give at any time hereafter, any economic opportunity, future employment, gift, loan, gratuity, special discount, trip favor or service to a Town employee, officer or agent in connection with the submitted Proposal. It (including the Vendor’s employees, representatives, agents, lobbyists, attorneys, and subcontractors) has refrained, under penalty of disqualification, from direct or indirect contact for the purpose of influencing the selection or creating bias in the selection TOWN OF FOUNTAIN HILLS SECTION A FINANCIAL DIVISION 1235203.1 A-5 process with any person who may play a part in the selection process, including the Selection Committee, elected officials, the Town Manager, Assistant Town Managers, Department Heads, and other Town staff. All contact must be addressed to the Town’s Procurement Agent, except for questions submitted as set forth in Section 4, Inquiries, above. Any attempt to influence the selection process by any means shall void the submitted Proposal and any resulting Agreement. 11.4 Financial Stability. It is financially stable, solvent and has adequate cash reserves to meet all financial obligations including any potential costs resulting from an award of the Agreement. 11.5 No Signature; False or Misleading Statement. Failure to sign the Proposal, or signing it with a false or misleading statement, shall void the submitted Proposal and any resulting Agreement. 11.6 Professional Services Agreement. In addition to reviewing and understanding the submittal requirements, it has reviewed the attached sample Professional Service Agreement including the Scope of Work and other Exhibits. 12. Award of Agreement. 12.1 Selection. A Selection Committee composed of representatives from the Town will conduct the selection process according to the schedule listed on the cover page of this RFP. Proposals shall be opened at the time and place designated on the cover page of this RFP. The name of each Vendor and the identity of the RFP for which the Proposal was submitted shall be publicly read and recorded in the presence of witnesses. PRICES SHALL NOT BE READ. The Selection Committee shall award the agreement to the responsible and responsive Vendor whose Proposal is determined, in writing, to be the most advantageous to the Town and best meets the overall needs of the Town taking into consideration the scoring criteria set forth in this RFP. The amount of applicable transaction privilege or use tax of the Town shall not be a factor in determining the most advantageous Proposal. After the Town has entered into an Agreement with the successful Vendor, the successful Proposal and the scoring documentation shall be open for public inspection. 12.2 Line Item Option. Unless the Proposal states otherwise, or unless otherwise provided within this RFP, the Town reserves the right to award by individual line item, by group of line items, or as a total, whichever is deemed most advantageous to the Town. 12.3 Form of Agreement. The selected Vendor will be required to execute the Town’s standard Professional Services Agreement in a form acceptable to the Town Attorney. A sample of the standard agreement is included with this RFP. If the Town is unsuccessful in negotiating an Agreement with the highest-scoring Vendor, the Town may then negotiate with the second, then third, highest-scoring Vendor until an Agreement is executed. Town Council approval may be required. The Town reserves the right to terminate the selection process at any time. TOWN OF FOUNTAIN HILLS SECTION A FINANCIAL DIVISION 1235203.1 A-6 12.4 Waiver; Rejection; Reissuance. Notwithstanding any other provision of this RFP, the Town expressly reserves the right to: (i) waive any immaterial defect or informality, (ii) reject any or all Proposals or portions thereof and (iii) reissue an RFP. 12.5 Protests. Any Vendor may protest this RFP issued by the Town, the proposed award of an Agreement, or the actual award of an Agreement. All protests will be considered in accordance with the Town Procurement Code. 13. Offer. A Proposal is an offer to contract with the Town based upon the terms, conditions and specifications contained in this RFP and the Vendor’s responsive Proposal, unless any of the terms, conditions, or specifications is modified by a written addendum or agreement amendment. Provided, however, that no contractual relationship shall be established until the Vendor has signed, and the Town has approved, a professional services agreement between the Town and the Vendor in the form acceptable to the Town Attorney. A sample Professional Service Agreement is included herein. II. PROPOSAL FORMAT; SCORING Upon receipt of a Proposal, each submittal will be reviewed for compliance with the Proposal requirements by the Selection Committee. Proposals shall be organized and submitted in the format as outlined below. Failure to conform to the designated format, standards and minimum requirements shall result in a determination that the Proposal is non-responsive. Additionally, the Selection Committee will evaluate and award points to each Proposal based upon the scoring criteria as outlined in this document. Points listed below are the maximum number of points possible for each criteria and not the minimum number that the Selection Committee may award. If necessary, the Selection Committee may conduct oral interviews with at least three (3), but not more than five (5), of the highest ranked Vendors based upon the Proposal submittal scoring. Section 1: Audit Organization/Local Office Technical Qualifications 10 pts A. One page cover letter as described in Section I, 2.3. B. State whether the Vendor’s firm is national, regional or local. Explain the legal organization of the Vendor. Provide identification information of the Vendor. Include the legal name, address, identification number and legal form of the Vendor (e.g., partnership, corporation, joint venture, sole proprietorship). If a joint venture, identify the members of the joint venture and provide all of the information required under this section for each member. If the Vendor is a wholly owned subsidiary of another company, identify the parent company. Provide the name, address and telephone number of the person to contact concerning the Proposal. C. State the address of the local office that will provide the Services to the Town. D. Affirm that the Vendor’s firm is properly licensed for public practice as a certified public accountant. Affirm that your organization meets the independence requirements of Standards for Audit of Governmental organizations, Programs, Activities and Functions, published by the U.S. GAO or any subsequent amendments or superseding revisions. TOWN OF FOUNTAIN HILLS SECTION A FINANCIAL DIVISION 1235203.1 A-7 E. Indicate the number of people, by level, within the local office that will provide the Services to the Town. Indicate which other audits this staff will be working on concurrently. State your policy on notification of changes in key personnel. Also, indicate the overall supervision to be exercised over the audit team by the Vendor’s management. F. Provide a list of the local office’s current and prior government audit clients indicating the type(s) of services performed and the number of years served for each. Indicate your experience in auditing entities that are similar in size and complexity to the Town. G. Identify any contract or subcontract held by the Vendor or officers of the Vendor that have been terminated within the last five (5) years. Briefly describe the circumstances and the outcome. H. Identify any claims arising from a contract which resulted in litigation or arbitration within the last five (5) years. Briefly describe the circumstances and the outcome. I. Vendor Information Form (may be attached as separate appendix). Section 2: Individual Audit Staff Technical Qualifications. 30 pts A. Describe the experience in government audits of each senior and higher level person assigned to provide the Services to the Town, including years on each job and their position while on each audit. Indicate the percentage of the time the senior will be on-site and who will make up the audit team. B. Describe the relevant educational background of each individual to be assigned to provide the Services to the Town. Indicate whether each such person is registered or licensed to practice as a certified public accountant in Arizona. C. Describe any specialized skills, training, or background in public finance by assigned individuals. This may include participation in State or National professional organizations and speaker or instructor roles in conferences or seminars. D. Indicate the local office”s experience in providing additional services to government clients by listing the name of each government entity, the type(s) of services performed and the year(s) of engagement. E. Provide an affirmative statement that the firm is independent of the Town as defined by auditing standards generally accepted in the United States and the U.S. General Accounting Office’s Government Auditing Standards (as revised in1994). F. Provide a reference list of three current and/or former municipal clients that the Town may contact regarding the offeror’s performance. The list shall include client name, agency, address, email address and phone number as well as the date(s) of service. Section 3: Audit Approach 40 pts Describe the Vendor’s technical approach to providing the Services to the Town as it relates to the Scope of Work described in the Professional Services Agreement in Exhibit C, including hardware and software that will be utilized on site. Describe your understanding of the work to TOWN OF FOUNTAIN HILLS SECTION A FINANCIAL DIVISION 1235203.1 A-8 be performed and indicate time estimates for completion of the audit after the on-site work is completed. (Samples may be included in a separate appendix and will not be included in the page count.) Section 4: Pricing 10 pts While fees are not a primary evaluation criterion, Vendors should be prepared to present and discuss pricing proposals for this type of engagement during the interview process. The Proposal should contain all pricing information relative to performing the Services described in this RFP. Include the method used for charging for any additional services that may be requested by Town staff or as a result of the specific recommendations included in any report issued on this engagement (GASB 34). Vendor shall submit the same number of copies of the Fee Proposal as described in Section I, 2.6 in a separate, sealed envelope enclosed with the Vendor’s Proposal with the signature of the representative of the Vendor who is authorized to make such an offer. The Fee Proposal must be provided in the format attached as Exhibit D of the Professional Service Agreement. Section 5: Other Relevant Information 10 pts Include any other information that may be helpful in evaluating your firm’s qualifications, including peer reviews within the past three years and any disciplinary action received within the past three years. Vendors responding to this solicitation should include a representative engagement letter that outlines the responsibilities of each party, specifically including responsibility for compliance with GASB 34. Total Possible Points for Proposal: 100 III. ORAL INTERVIEWS; SCORING In the event that a Vendor cannot be selected based solely on the Proposals submitted, up to three Vendors may be selected for oral interviews. The selected Vendors will be invited to participate in discussions with the Selection Committee on the date indicated on the cover page of this RFP and awarded points based upon the criteria as outlined below. Vendors may be given additional information for these oral interviews. These discussions will relate less to the past experience and qualifications already detailed in the Proposals and relate more to identification of the Vendor’s program approach and to an appraisal of the people who would be directly involved in this Services for this RFP. Oral Interview 10 General Information 35 Experience and Qualifications of the Vendor 10 Key Personnel 45 Proposed Services Provided 100 Total Possible Points for Oral Interview TOWN OF FOUNTAIN HILLS SECTION A FINANCIAL DIVISION 1235203.1 A-9 IV. VENDOR INFORMATION FORM By submitting a Proposal, the submitting Vendor certifies that it has reviewed the administrative information and draft of the Professional Services Agreement’s terms and conditions and, if awarded the Agreement, agrees to be bound thereto. VENDOR SUBMITTING PROPOSAL FEDERAL TAX ID NUMBER PRINTED NAME AND TITLE AUTHORIZED SIGNATURE ADDRESS TELEPHONE FAX # CITY STATE ZIP DATE WEB SITE: EMAIL ADDRESS: SMALL, MINORITY, DISADVANTAGED AND WOMEN-OWNED BUSINESS ENTERPRISES (check appropriate item(s): Small Business Enterprise (SBE) Minority Business Enterprise (MBE) Disadvantaged Business Enterprise (DBE) Women-Owned Business Enterprise (WBE) Has the Vendor been certified by any jurisdiction in Arizona as a minority or woman-owned business enterprise? If yes, please provide details and documentation of the certification. 1274162.2 EXHIBIT B TO PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND LARSONALLEN, LLP [Contractor’s Proposal] See following pages. 1274162.2 EXHIBIT C TO PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND LARSONALLEN, LLP [Scope of Work] See following pages. 1274162.2 C-1 SCOPE OF WORK I. THE TOWN GOVERNMENT A. Organizational Chart and Principal Contact. The Town is organized into six departments and has approximately 67 employees. The accounting and financial reporting functions of the Town are centralized utilizing Tyler Technology MUNIS software (implemented July 2009). An organizational chart of the Town is attached hereto. The auditor’s principal contact with the Town will be Julie A. Ghetti, Deputy Town Manager/Finance Director, or a designated representative, who will coordinate the assistance to be provided by the Town to the auditor. B. Background Information. The Town serves an area of roughly 18.3 square miles with a population of approximately 25,000. The Town provides a full range of services to its citizens including police and fire protection, municipal court, streets, recreational activities, building safety and cultural events. The Town has a total payroll of approximately $4.7M and the FY10-11 budget for the Town is proposed at $23.5 million. The Town’s fiscal year begins on July 1 and ends on June 30. More detailed information on the Town and its finances can be found in the Town’s Comprehensive Annual Financial Report for the fiscal year ended June 30, 2009 (available on the Town’s website www.fh.az.gov). C. Fund Structure. The Town uses the following fund types in its financial reporting as of June 30, 2010: Fund Type/Account Group Number of Individual Funds Number of Major Funds Number with Legally Adopted Budgets General Fund 1 1 1 Special Revenue Funds 3 0 6 Debt Service Funds 5 2 3 Capital Projects Funds 2 1 2 The financial records of the Town are maintained on a computerized system using Windows NT and software from MUNIS for general ledger, budget, accounts payable, licensing, permits, accounts receivable and fixed assets. Payroll processing is provided by an outside service, Paychex. D. Town of Fountain Hills Municipal Property Corporation. Town of Fountain Hills Municipal Property Corporation, Inc. (the “MPC”), an Arizona not-for-profit corporation, was organized for the purpose of financing the construction of municipal facilities and purchase of open space within the Town through the issuance of bonds. Concurrent with these bond issues, the Town entered into a contract with MPC whereby the Town will pay to MPC amounts sufficient to retire MPC bonds and related interest. MPC is reported as a blended component unit in the Town’s financial statements. The outstanding MPC bonds are reported as a debt 1274162.2 C-2 service fund in the Town’s financial statements. No separate financial statements are prepared for MPC. E. Community Facilities Districts. The Town currently has one Community Facilities District, one Improvement District and one Maintenance District. The districts are reported as blended component units in the Town’s financial statements. The outstanding bonds are reported as a debt service fund in the Town’s financial statements. No separate financial statements are prepared for the districts. II. SCOPE OF WORK A. Annual Audit. The Town implemented GASB statement No. 34 Basic Financial Statements⎯and Management’s Discussion and Analysis⎯for State and Local Governments, as amended, in the preparation of its Comprehensive Annual Financial Report for the fiscal year ending on June 30, 2003. The Town’s financial records are maintained on the fund basis; the Contractor will be required to prepare government-wide financial statements in addition to fund basis statements. Therefore, the Contractor shall provide the Services to the Town, including making a determination as to whether its financial statements present fairly, in all material respects, the respective financial position of (i) the governmental activities, (ii) each major fund and (iii) the Town’s aggregate remaining fund information which collectively comprise the Town’s basic financial statements. To meet the requirements of this RFP, the Services shall be performed in accordance with: 1. Auditing standards generally accepted in the United States of America as set forth by the American Institute of Certified Public Accountants, the standards for financial audits set forth in the U.S. General Accounting Office’s Government Auditing Standards (1994, Revised), the provisions of the Single Audit Act of 1984 and the Single Audit Act Amendments of 1996, and the provisions of U.S. Office of Management and Budget (OMB) Circular A-133, Audits of State and Local Governments and Non-Profit Organizations. 2. State of Arizona Uniform Expenditure Reporting System requirements (“UERS”) mandated by ARIZ. REV. STAT. § 41-1279.07, with guidelines set forth by the Arizona Auditor General. 3. State of Arizona Local Transportation Assistance Funds (“LTAF”) expenditure requirements pursuant to ARIZ. REV. STAT. § 48-5103. 4. State of Arizona Local Transportation Assistance Funds II (“LTAF II”) revenues and expenditures pursuant to ARIZ. REV. STAT. § 28-8103. 5. State of Arizona Highway User Revenue Fund (“HURF”) expenditure requirements pursuant to ARIZ. REV. STAT. § 9-481(B)(2). The Services shall include examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. The Contractor shall plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 1274162.2 C-3 Additionally, as required by the Single Audit Act Amendments of 1996 and OMB A-133, the audit shall include tests of transactions related to major federal award programs for compliance with applicable laws and regulations and the provisions of contracts and grant agreements. B. Audit-related Duties. Following the completion of the audit of the fiscal year’s financial statements the Contractor shall issue: 1. An independent auditor’s report on the fair presentation of the financial statements in conformity with accounting principles generally accepted in the United States of America. 2. An independent auditor’s report on compliance and on internal control over financial reporting based on an audit of the financial statements performed in accordance with government auditing standards. 3. A report on recommendations to the Town’s internal control environment and recommendations in accordance with the Treadway Commission report “Internal Control – Integrated Framework” released by the Committee of Sponsoring Organizations in 1992 and the federal Sarbanes-Oxley legislation. 4. An independent auditor’s report on compliance with requirements applicable to each major program and internal control over compliance in accordance with OMB Circular A-133. 5. A schedule of findings, recommendations and questioned costs (if applicable) including a management letter detailing areas that could be improved. 6. A schedule of findings and recommendations relative to compliance with Town purchasing policies. 7. A summary schedule of prior audit findings and corrective action plan (if applicable). 8. A Schedule of Local Transportation Assistance monies expended for public transportation, pursuant to ARIZ. REV. STAT. § 48-5103 (the “LTAF Schedule”), and an independent auditor’s report on such schedule. 9. A Schedule of Local Transportation Assistance Funds II revenues and expenditures, pursuant to ARIZ. REV. STAT. § 28-8103 (the “LTAF II Schedule), and an independent auditor’s report on such schedule. 10. Auditor’s letter of recommendations to management. 11. An independent auditor’s report on the Annual Expenditure Limitation Report (“AELR”) prepared in compliance with ARIZ. REV. STAT. § 41-1279.07. 1274162.2 C-4 12. The Comprehensive Annual Financial Report by November 15th of each year. 13. The Annual Expenditure Limitation Report by November 15th of each year. 14. Schedule of Expenditures of Federal Awards. 15. External review of the Fountain Hills Municipal Court every three years performed in accordance with the Minimum Accounting Standards, Compliance Checklist and Guide for External Review by Auditors. Accompanying the financial statements, the auditor shall submit a Management Letter of Comments and Recommendations for improvement of program and financial management per the auditor's opinion, after examining the Town’s systems of internal control. The auditor shall communicate any reportable conditions found during the audit. A reportable condition shall be defined as a significant deficiency in the design or operation of the internal control structure that could adversely affect the entity’s ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements. Relevant control items noted that are not reportable conditions shall be reported in a separate letter to management. The Contractor shall be required to make an immediate, written report of any irregularities or illegal acts of which they may become aware during the course of the audit to the Town Manager and the Town Council. In addition to the audit services described above, the Contractor shall be available for intermittent requests for information relevant to technical accounting issues, implementation of new authoritative pronouncements and other significant issues that may affect the Town’s financial statements. All working papers and reports must be retained by the Contractor for a period of two years beyond the applicable contract period unless the firm is notified otherwise, in writing, by the Town. The Contractor will be required to make the working papers available, upon request, to any governmental agency. The working papers will also be made available to any public accounting firm for the purpose of conducting quality monitoring programs of the Contractor’s work. The Town shall be notified in writing of any requests to review the Contractor’s work papers. Two draft copies of the financial statements, audit reports and management letter shall be delivered to the Town’s finance department on or before October 31 of each year. An exit conference will then be held to review the financial statements, the audit reports and findings. On or before November 15 of each year, the Contractor shall deliver to the Town’s finance department 20 copies of the annual reports and 15 copies of the management letters. All copies of the annual reports and management letters shall be printed on 8 ½” x 11” paper and covered and bound. No later than the last regular meeting of the Town Council in December of each year, the Contractor shall make an oral presentation of the annual reports to the Council. 1274162.2 C-5 The Town sends its comprehensive annual financial report to the Government Finance Officers Association of the United States (“GFOA”) and Canada for review in their Certificate of Achievement for Excellence in Financial Reporting (“CAFR”) program (the “Certificate Program”), and has been awarded a certificate for the last twelve consecutive years. The Contractor will be required to review the financial statements against the Certificate Program checklist to ensure compliance with the requirements of the Certificate Program. The Contractor shall also (i) consolidate the audit, financial statements, Management Discussion and Analysis and all other supplementary information for the CAFR, (ii) bind the final copy of same and (iii) submit same to the GFOA. 1274162.2 EXHIBIT D TO PROFESSIONAL SERVICES AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND LARSONALLEN, LLP [Fee Proposal] See following page. 1266972.2 RESOLUTION NO. 2010-17 A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN HILLS, ARIZONA, AUTHORIZING THE SUBMISSION OF AN APPLICATION FOR GRANT CONSIDERATION BY THE ARIZONA DEPARTMENT OF TRANSPORTATION AND THE MARICOPA ASSOCIATION OF GOVERNMENTS RELATING TO SAGUARO BOULEVARD PEDESTRIAN AND LANDSCAPE IMPROVEMENTS. WHEREAS, the Arizona Transportation Enhancement Program (“ATEP”), sponsored by the Arizona Department of Transportation in connection with the Maricopa Association of Governments, is seeking proposals from state and local agencies for projects relating to all aspects of transportation enhancement; and WHEREAS, the Mayor and Council of the Town of Fountain Hills (the “Town Council”) desires to submit a project to be considered by ATEP for funding in the form of a grant; and WHEREAS, the ATEP procedures require that the Town Council certify, by resolution, (i) its approval of submission of an application for grant funds in support of the Saguaro Boulevard (Panorama-Colony) Frontage Sidewalk Project (the “Project”) from ATEP (the “Application”), (ii) the availability of matching funds, including any overmatch that may be required, (iii) its commitment to fund necessary Project development activities (design, scoping, environmental analysis, right-of-way acquisition and utility clearance) including local project management, if applicable, (iv) its commitment that the Project will be ready for advertisement within three years, (v) its commitment to pay for all cost overruns related to the Project, (vi) its commitment to reimburse the Arizona Department of Transportation/Federal Highway Administration for all federal funds used in the event the Project is canceled by the Town of Fountain Hills, (vii) its commitment to pay the Arizona Department of Transportation for any related formal review, and (viii) its commitment to enter into a Joint Project Agreement (“JPA”) for the purpose of maintaining the completed Project. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN HILLS as follows: SECTION 1. The recitals above are hereby incorporated as if fully set forth herein. SECTION 2. The Town Council hereby (i) approves the submission of the Application to be considered by ATEP for funding in the form of a grant and (ii) confirms that it has identified available matching funds totaling 5.7% of the total grant amount and any overmatch required, (iii) commits to funding necessary Project development activities (design, scoping, environmental analysis, right-of-way acquisition and utility clearance) including local project management, if applicable, (iv) commits to ensuring that the Project will be ready for advertisement within three years, (v) authorizes payment for any cost overruns associated with the Project, (vi) agrees to reimburse the Arizona Department of Transportation/Federal Highway Administration for all federal funds used in the event the Project is canceled by the Town of Fountain Hills, (vii) authorizes payment of related administrative review fees to the Arizona 1266972.2 2 Department of Transportation and (viii) agrees to enter into a JPA for the purpose of maintaining the completed Project. SECTION 3. The Mayor, the Town Manager, the Town Clerk and the Town Attorney are hereby authorized and directed to (i) execute and submit all documents and any other necessary or desirable instruments in connection with the Application, (ii) execute any resulting grant agreements and other documents and (iii) take all steps necessary to carry out the purpose and intent of this Resolution. PASSED AND ADOPTED by the Mayor and Council of the Town of Fountain Hills, June 17, 2010. FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO: Jay T. Schlum, Mayor Bevelyn J. Bender, Town Clerk REVIEWED BY: APPROVED AS TO FORM: Richard L. Davis, Town Manager Andrew J. McGuire, Town Attorney