HomeMy WebLinkAbout#5111 RESOLUTION NO 5111
A RESOLUTION APPROVING THE ENGAGEMENT OF CLIFTONLARSONALLEN, LLP AS COMPTROLLER FOR
THE CITY OF CANTON, ILLINOIS
WHEREAS,the Finance Committee of the City of Canton has determined that is necessary and in the
best interests of the City of Canton to engage CliftonLarsonAllen, LLP as set forth in exhibit"A"attached
hereto and incorporated herein for services in connection with being the Comptroller for the City of
Canton; and WHEREAS,the City Council of the City of Canton has made a similar determination.
NOW,THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF CANTON,
ILLINOIS,AS FOLLOWS:
1. That the engagement letter attached hereto and incorporated herein as Exhibit"A" is hereby
approved by the Canton City Council.
2. That the Mayor of the City of Canton, Illinois or his designee, is hereby authorized and directed
to execute any documents related to employing CliftonLarsonAllen, LLP as they would relate to
their employment as Comptroller on behalf of the City of Canton.
3. That this Resolution shall be in full force and effect immediately upon its passage by the City
Council of the City of Canton, Illinois and approval by the Mayor thereof.
PASSED by the City council of the City of Canton, Illinois at a regular meeting this 6th day of June, 2017
upon a roll call vote as follows:
AYES: Aldermen Ryan Mayhew,Chris Jump,John Lovell,Craig West, Angie Hale, Tad Putrich,Angie
Lingenfelter
NAYS: None
ABSTAIN: None
ABSENT: Alderman Justin Nelson
APPROVED:
LA
Attest '•ent McDowell, WRIF
Dian. Pavley-RocCity Clerk
CliftonLarsonAllen LLP
,,,,, 301 SW Adams Street,Suite 1000
Peoria,IL 61602
309-671-4500 I fax 309-671-450B
CliftonLarsonAllen CLAronnea.wm
May 17, 2017
City of Canton
Mayor Kent McDowell
2 North Main Street
Canton, IL61520
Dear Mayor:
We are pleased to confirm our understanding of the terms and objectives of our engagement and the nature
and limitations of the services CliftonLarsonAllen LLP("CLA,""we, "us,'and "our")will provide for City of
Canton ("you,"'your,"or"the entity')for the fiscal year end April 30, 2018.The terms of our engagement will
apply to the Initial and all subsequent periods,unless the agreement is changed In a communication that you
and CIA both sign or terminate as permitted herein.
Matt Smutz is responsible for the performance of the services identified in this agreement. Dan Bender is
responsible for the daily activities of the engagement.
Scope of professional services
CLA will perform the following services for the entity:
Ongoing normal accounting services:
• Outsourced accounting functions—comptroller
— Reconcile bank accounts monthly and record journal entries for ledger fund balances
— Prepare departmental allocations and closing entries as outlined per budget
— Prepare various city-wide invoices, license renewals,and intergovernmental billings
— Analyze financial statements and present to management and council/oversight individual
— Attend council meetings upon request and availability
— Develop and track key metrics as requested and review periodically with and council/oversight
individual
— Import mapped payroll file into accounting software for ledger reconciliation
o Internal staff are responsible for processing payroll and related compliance,as well as
employee benefit invoices and payment reconciliations
— Document accounting processes and procedures accordingly
— Update accounting software for various accounts and software dimensions as needed
A member of
exia
International
May 17,2017
City of Canton
Page 3
— Continue process and procedure improvement implementation to maintain an internal control
environment recommended as a result of the annual financial statement auditor
— Report and manage cash flows for funds and related savings accounts
— Gather information necessary to facilitate the entity's annual financial statement audit
— Assist with bank communications and negotiations
— Assist with bond reporting communications and negotiations
— Assist with annual 1099 and vendor compliance upon request
— Assist with DCCA filing for compliance
— Assist with group insurance plan and city-wide insurance communication and negotiations
• Cash access services
— Prepare checks and wire transfers to be drawn upon your bank account(s)and to use the above
noted methods to thereby finally approve such checks for payment by the corresponding bank(s)
upon request or the absence of the Treasurer(time to be billed separately if recurring or based on
volume of transactions).
— Obtain view access to your bank accounts for purposes of performing the duties documented in our
engagement letter identified above.
— Obtain a level of approval to execute bank ACH activity as one of two approvers for electronic
processing.
— Take deposits to the bank that include cash at the discretion of management or council.
Engagement objectives,limitations,and responsibilities
The objective of our engagement is to assist you in the preparation of financial statements by providing the
services identified above.We have not been engaged to prepare financial statements and financial statements
will not be presented to you. Financial statements that may be generated from your accounting system have not
been prepared,compiled,reviewed, or audited by us and,accordingly,will not include an opinion or any other
form of assurance.The financial statements will not be accompanied by a report, and our firm should not be
discussed or associated with them.
May 17,2017
City of Canton
Page 4
Material departures from accounting principles generally accepted in the United States of America(U.S.GAAP)
or a special purpose framework may exist and the effects of those departures, if any,on the financial statements
you generate may not be disclosed. Because of the extent of material departures that may exist in, or required
disclosures that may be omitted from,the financial statements you generate,we make no representations
regarding the appropriateness of such statements for your intended use or for any other purpose. Moreover,
because of the nature of this engagement,we are not responsible for communicating any such departures or
omissions to you.
We will comply with the AICPA's Code of Professional Conduct, including the ethical principles of integrity,
objectivity, professional competence,and due care.
Our engagement cannot be relied upon to identify or disclose any financial statement misstatements, including
those caused by fraud or error,or to identify or disclose any wrongdoing within the entity or noncompliance
with laws and regulations.We have no responsibility to identify and communicate deficiencies in your internal
control as part of this engagement.You agree that we shall not be responsible for any misstatements in the
entity's financial statements that may not be identified as a result of misrepresentations made to us by you.
For all accounting services we may provide to you, including assistance with the preparation of your financial
statements, management agrees to assume all management responsibilities;oversee the services;evaluate the
adequacy and results of the services; and accept responsibility for the results of the services.
Management responsibilities relevant to CtA's access to your cash
Someone with management authority is responsible for the processes below.All approvals listed must be
documented in writing,either electronically or manually:
• Approve all invoices and check payments.
• Approve all new vendors and customers added to the accounting system.
• Approve all wire transfers to external parties.
• Approve all new employees and all employee status changes prior to those employees or changes being
added to the payroll system.
• Approve all credit card statements prior to those expenses being processed in the accounting system
and subsequently paid.
• Approve all customer and vendor credit memos and accounts receivable amounts written off.
• Review and approve all bank statements and affiliated monthly reconciliations.
May 17,2017
City of Canton
Page 5
Fees,time estimates,and terms
Ongoing normal accounting services:
• Services performed by staff Estimated 80 hours per month
• Services performed by Matt Smutz/quality assurance as requested or required
Our fees for these services will be based on the time involved and the degree of responsibility and skills
required, plus expenses including internal and administrative charges.The time estimate is based on anticipated
cooperation from your personnel and their assistance with preparing requested schedules. If the requested
items are not available on the dates required or are not accurate,the estimated fee for services will likely be
higher. If unexpected circumstances require significant additional time,we will advise you before undertaking
work that would require a substantial increase in the fee estimate.
The fees(guaranteed through April 30,2018) and estimated hours for these services are as follows:
Ongoing normal accounting services: $6,150 fixed fee per month
Included in the above fixed fees are meetings and phone calls to discuss operations, business matters,and
accounting matters of the entity.While the fixed fees entitle the entity to unlimited consultations with us, if
organizational conditions change or the scope of the work requires substantial additional effort beyond what
has been defined in this agreement, CIA agrees to perform the additional work at a mutually agreed upon price
based on the level of staff involved.
Our invoices for these fees will be rendered each month as work progresses and are payable on presentation.
Terms of payment for services are net 10 days. In accordance with our firm policies,work may be suspended if
your account becomes 30 days or more overdue and will not be resumed until your account is paid in full. If we
elect to terminate our services for nonpayment,our engagement will be deemed to have been completed upon
notification.You will be obligated to compensate us for all time expended and to reimburse us for all out-of-
pocket expenditures through the date of termination.
Other fees
You also agree to compensate us for any time and expenses, including time and expenses of legal counsel,we
may incur in responding to discovery requests or participating as a witness or otherwise in any legal, regulatory,
or other proceedings that we are asked to respond to on your behalf.
Finance charges and collection expenses
You agree that if any statement is not paid within 30 days from its billing date,the unpaid balance shall accrue
interest at the monthly rate of one and one-quarter percent(1.25%),which is an annual percentage rate of 15%.
In the event that any collection action is required to collect unpaid balances due us, reasonable attorney fees
and expenses shall be recoverable.
May 17,2017
City of Canton
Page 6
Limitation of remedies
Our role is strictly limited to the engagement described in this letter,and we offer no assurance as to the results
or ultimate outcomes of this engagement or of any decisions that you may make based on our communications
with you.You agree that it is appropriate to limit the liability of CIA,its partners, principals,directors,officers,
employees, and agents(each a "CLA party")and that this limitation of remedies provision is governed by the
laws of the state of Minnesota,without giving effect to choice of law principles.
You further agree that you will not hold CLA or any other CLA party liable for any claim,cost,or damage,
whether based on warranty,tort,contract, or other law, arising from or related to this agreement,the services
provided under this agreement,the work product,or for any plans,actions, or results of this engagement,
except to the extent authorized by this agreement. In no event shall any CLA party be liable to you for any
indirect,special, incidental,consequential, punitive,or exemplary damages,or for loss of profits or loss of
goodwill,costs,or attorney fees.
The exclusive remedy available to you shall be the right to pursue claims for actual damages that are directly
caused by acts or omissions that are breaches by a CIA party of our duties owed under this agreement, but any
recovery on any such claims shall not exceed the fees actually paid under this agreement by you to CLA.
Time limitation
The nature of our services makes it difficult,with the passage of time,to gather and present evidence that fully
and fairly establishes the facts underlying any dispute that may arise between you and any CIA party.The
parties(you and CLA)agree that, notwithstanding any statute or law of limitations that might otherwise apply to
a dispute, including one arising out of this agreement or the services performed under this agreement,for
breach of contractor fiduciary duty,tort,fraud, misrepresentation or any other cause of action or remedy, any
action or legal proceeding by you against any CIA party must be commenced separately within twenty-four(24)
months("Limitation Period")after the date when we deliver such services under this agreement to you on
which the dispute is based, regardless of whether any CIA party provides other services for you under this
agreement,or you shall be forever barred from commencing a lawsuit or obtaining any legal or equitable relief
or recovery.
The Limitation Period applies and begins to run even if you have not suffered any damage or loss,or have not
become aware of the existence or possible existence of a dispute.
Service satisfaction
If you are not completely satisfied with the services performed by CLA,we will take reasonable corrective action
to satisfy you, and then if you are not completely satisfied,we will accept a portion of the fees that reflects your
level of satisfaction. Upon full payment of our invoice,we will assume you are satisfied with our work and our
service commitment will have been fulfilled.
To ensure that our services remain responsive to your needs,as well as fair to both parties,we will meet with
you throughout the term of the agreement and, if necessary, revise or adjust the scope of the services to be
provided and the fees to be charged.
May 17,2017
City of Canton
Page 7
Furthermore, it is understood that either party may terminate this agreement at any time,for any reason, by
giving 30 days written notice to the other party. In that event,the provisions of this agreement shall continue to
apply to all services rendered prior to termination. It is understood that any unpaid fees that are owed or
invoices that are outstanding at the date of termination are to be paid in accordance with the terms of this
agreement.
Other provisions
Except as permitted by the"Consent" section of this agreement, CIA will not disclose any confidential,
proprietary,or privileged information of the entity to any persons without the authorization of entity
management or unless required by law.This confidentiality provision does not prohibit us from disclosing your
information to one or more of our affiliated companies in order to provide services that you have requested
from us or from any such affiliated company.Any such affiliated company shall be subject to the same
restrictions on the use and disclosure of your information as apply to us.
Pursuant to authority given by law or regulation, we may be requested to make certain workpapers available to
a regulator for their regulatory oversight purposes.We will notify you of any such request.Access to the
requested workpapers will be provided to the regulators under the supervision of CIA personnel and at a
location designated by our firm. Furthermore, upon request,we may provide copies of selected workpapers to
such regulators.The regulators may intend,or decide,to distribute the copies or information contained therein
to others, including other governmental agencies.
We will be responsible for our own property and casualty,general liability,and workers compensation
insurance,taxes, professional training, and other personnel costs related to the operation of our business.
When performing the services above,we will utilize the resources available at the entity to the extent practical
to continue development of your personnel. During a portion of our work,we may require the use of your
computers.We will try to give you advance notice and coordinate our use so it does not interfere with your
employees.
The relationship of CIA with the entity shall be solely that of an independent contractor and nothing in this
agreement shall be construed to create or imply any relationship of employment, agency, partnership,or any
relationship other than an independent contractor.
Accounting standards and procedures will be suggested that are consistent with those normally utilized in an
entity of your size and nature.We will require management to approve any changes in the application of
accounting standards and procedures at the entity. Internal controls may be recommended relating to the
safeguarding of the entity's assets. If fraud is initiated by your employees or other service providers,your
insurance is responsible for covering any losses.
We are available to perform additional procedures with regard to fraud detection and prevention,at your
request, as a separate engagement,subject to completion of our normal engagement acceptance procedures.
The terms and fees of such an engagement would be documented in a separate engagement letter.
The entity agrees that CIA will not be assuming any fiduciary responsibility on your behalf during the course of
this engagement.
May 17,2017
City of Canton
Page S
Employment provision
In the event that a CIA employee is solicited to work in a position as an employee of the entity, and in the event
that the CIA employee accepts the position of employment with the entity,the following conditions will apply:
1. CIA will require a four-week notice period subsequent to the employee's written notice to CIA,and
2. The entity will be required to pay an employment fee of$60,000 for the controller and$25,000 for the
staff to CIA immediately upon receipt of this notice.
If any former CIA employee shall be hired as an employee within 60 days of leaving CLA,there shall be a
refutable presumption that the CIA employee was solicited to work as an employee of the entity and the above
fee shall be payable to CIA.
Consent
Consent to use financial information
Annually,we assemble a variety of benchmarking analyses using data obtained through our client engagements.
Some of this benchmarking information is published and released publicly. However,the information that we
obtain is confidential, as required by the AICPA Code of Professional Conduct.Your acceptance of this
engagement letter will serve as your consent to use of City of Canton's information in these cost comparison,
performance indicator, and/or benchmarking reports.
Subcontractors
CIA may,at times, use subcontractors to perform services under this agreement, and they may have access to
your information and records.Any such subcontractors will be subject to the same restrictions on the use of
such information and records as apply to CIA under this agreement.
Technology
CLA may,at times, use third-party software applications to perform services under this agreement.You
authorize CIA to sign on your behalf any vendor agreements applicable to such software applications.CIA can
provide a copy of the application agreement at your request.You acknowledge the software vendor may have
access to your data.
May 17,2017
City of Canton
Page 9
Agreement
We appreciate the opportunity to be of service to you and believe this letter accurately summarizes the
significant terms of our engagement.This letter constitutes the entire agreement regarding these services and
supersedes all prior agreements(whether oral or written), understandings, negotiations,and discussions
between you and CLA. If you have any questions,please let us know. If you agree with the terms of our
engagement as described in this letter, please sign, date,and return the signed copy to us.
Sincerely,
CliftonLarsonAllen LLP
Matt A.Smutz,CPA
Principal
309-495-8782
Matt.Smutz@CLAconnect.com
Enclosures
Y CIA Common EL 2017 City of Canton Ba Ops Evergreen 001-059291
Response:
This letter correctly sets forth the understanding of City of Canton.
Authorized governance
/signature: 0# 13-0
Title: aY02
Date: Lp Za-1,7
CliftonLarsonAllen CLAconnect.com
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May 17, 2017
Engagement letter
tailored for:
City of Canton
Prepared by:
Dan Bender,CPA
Dan.bender @ CLAco n nect.ca m
direct 309-495-8841
WEALTH ADVISORY I OUTSOURCING I AUDIT,TAX AND CONSULTING
Investment advisory services are offered through CliftonlarsonAllen Wealth
Ativisors,ILC,an SECregisteredinvestment advisor.
• CliftonLarsonAllen LLP
• 301 SW Adams Street,Suite 1000
Peoria,IL 61602
309-671-4500 I fax 309-671-4508
CliftonLarsonAllen CLAconned corn
May 17,2017
City of Canton
Mayor Kent McDowell
2 North Main Street
Canton,IL61520
Dear Mayor:
We are pleased to confirm our understanding of the terms and objectives of our engagement and the nature
and limitations of the services CliftonLarsonAllen LLP("CLA,"'we,""us,"and"our"(will provide for City of
Canton("you, "your,"or"the entity")for the year ended April 30,2018.The terms of our engagement will
apply to the initial and all subsequent periods,unless the agreement is changed in a communication that you
and CIA both sign or terminated as permitted herein.
Matt Smutz is responsible for the performance of the preparation engagement and other services identified In
this agreement. Dan Bender is responsible for the daily activities of the engagement.
Scope of professional services
CIA will perform the following services for the entity:
Ongoing normal accounting services:
• Outsourced accounting functions-comptroller
- Reconcile bank accounts monthly and record journal entries for ledger fund balances
- Prepare departmental allocations and closing entries as outlined per budget
- Prepare various city-wide invoices, license renewals,and intergovernmental billings
- Prepare financial statement information and present to management and council/oversight
individual
- Attend council meetings upon request and availability
- Develop and track key metrics as requested and review periodically with and council/oversight
individual
- Import mapped payroll file into accounting software for ledger reconciliation
o Internal staff are responsible for processing payroll and related compliance,as well as
employee benefit invoices and payment reconciliations
- Document accounting processes and procedures accordingly
Nexia
May 17,2017
City of Canton
Page 3
— Update accounting software for various accounts and software dimensions as needed
- Continue process and procedure improvement implementation to maintain an Internal control
environment recommended as a result of the annual financial statement auditor
- Report and manage cash flows for funds and related savings accounts
- Gather information necessary to facilitate the entity's annual financial statement audit
- Assist with bank communications and negotiations
- Assist with bond reporting communications and negotiations
- Assist with annual 1099 and vendor compliance upon request
- Assist with DCCA filing for compliance
- Assist with group insurance plan and city-wide insurance communication and negotiations
- Provide budgeting services as approved
Cash access services
- Prepare checks and wire transfers to be drawn upon your bank account(s)and to use the above
noted methods to thereby finally approve such checks for payment by the corresponding bank(s)
upon request or the absence of the Treasurer(time to be billed separately if recurring or based on
volume of transactions).
- Obtain a level of approval to execute bank ACR activity as one of two approvers for electronic
processing.
- Take deposits to the bank that include cash at the discretion of management or council.
Preparation services-financial information
You have requested that we prepare a bi-monthly Comptroller Report of the City of Canton,which comprise the
financial information identified below.
• Fund trending for the fiscal year
• Budget vs.Actual comparisons for various funds
• Various interfund balances and external receivables/liabilities
The financial information will not include the statement of cash flows and the disclosures ordinarily included in
financial information prepared in accordance with the regulatory basis of accounting.
May 17,2017
City of Canton
Page 4
Preparation services—prospective financial information
You have requested that we prepare the financial forecast of City of Canton,which comprises the forecasted
financial information identified below.
• Fund trending for the fiscal year
• Budget vs.Actual comparisons for various funds
• Various interfund balances and external receivables/liabilities
A financial forecast presents,to the best of management's knowledge and belief,the entity's expected assets,
liabilities,fund balance,revenues,expenses,and cash flows—regulatory basis of accounting for the forecast
period.It is based on management's assumptions reflecting conditions it expects to exist and the course of
action it expects to take during the forecast period.
The financial forecast will omit substantially all of the disclosures required by the guidelines for presentation of a
financial forecast established by the American Institute of Certified Public Accountants(AICPA presentation
guidelines)other than those related to the significant assumptions.The financial forecast will identify this
departure.
Management has requested the financial forecast be prepared with the regulatory basis of accounting,which is
a departure from the AICPA presentation guidelines.The financial forecast will identify this departure.
The supplementary information accompanying the financial forecast will be prepared and presented for
purposes of additional analysis and is not a required part of the basic financial forecast.
References to financial statements in the remainder of this engagement letter are to be taken as a reference to
also include the prospective financial information,where applicable.
Engagement objectives and our responsibilities
The objective of our engagement is to prepare financial statements in accordance with the regulatory basis of
accounting based on information provided by you and information generated through our outsourced
accounting services.
The objective of our engagement is also to prepare a financial forecast in accordance with the guidelines for the
presentation of a financial forecast established by the American Institute of Certified Public Accountants(AICPA
presentation guidelines)based on information provided by you.
We will conduct our preparation engagement in accordance with Statements on Standards for Accounting and
Review Services (SSARSs)promulgated by the Accounting and Review Services Committee of the American
Institute of Certified Public Accountants(AICPA)and comply with the AICPA's Code of Professional Conduct,
including the ethical principles of integrity,objectivity,professional competence,and due care.
May 17,2017
City of Canton
Page
Engagement limitations
We are not required to,and will not,verify the accuracy or completeness of the information you will provide to
us for the engagement or otherwise gather evidence for the purpose of expressing an opinion or a conclusion.
Accordingly,we will not express an opinion, a conclusion,nor provide any assurance on the financial
information.
Our engagement cannot be relied upon to identify or disclose any financial statement misstatements,including
those caused by fraud or error,or to identify or disclose any wrongdoing within the entity or noncompliance
with laws and regulations.We have no responsibility to identify and communicate deficiencies in your internal
control as part of this engagement.You agree that we shall not be responsible for any misstatements in the
entity's financial statements that we may not identify as a result of misrepresentations made to us by you.
No assurance statement
The financial statements will not be accompanied by a report. However,management agrees that each page of
the financial statements will include a statement clearly indicating that no assurance is provided on them.
There will usually be differences between the forecasted and actual results, because events and circumstances
frequently do not occur as expected,and those differences may be material. Management agrees that the
introduction to the summary of the significant assumptions will include a caveat to that effect.
Management responsibilities
The engagement to be performed is conducted on the basis that management acknowledges and understands
that our role is to prepare financial statements in accordance with the regulatory basis of accounting.
We are required by professional standards to identify management's responsibilities in this agreement.Those
standards require that you acknowledge and understand that management has the following overall
responsibilities that are fundamental to our undertaking the engagement to prepare your financial statements
in accordance with SSARS:
a. The selection of the financial reporting framework to be applied in the preparation of the financial
statements and the use of the AICPA presentation guidelines in the preparation of the forecast.
b. The design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement,whether due to fraud or
error,and the development of assumptions that reflect your plans and expectations regarding events
and circumstances for the forecast period.
c. The prevention and detection of fraud.
d. To ensure that the entity complies with the laws and regulations applicable to its activities.
e. The accuracy and completeness of the records,documents,explanations, and other Information,
including significant judgments,you provide to us for the engagement to prepare financial statements.
1. To provide us with the following:
May 17,2012
City of Canton
Page 6
i. Access to all information relevant to the preparation and fair presentation of the financial
statements,such as records,documentation,and other matters.
ii. Additional information that may be requested for the purpose of the engagement.
iii. Unrestricted access to persons within the entity with whom we determine It necessary to
communicate.
We understand that you are engaging us to make recommendations and perform services to help you meet your
responsibilities relevant to the preparation and fair presentation of the financial statements (Items a and b).
The AICPA presentation guidelines require a summary of significant assumptions.We will assist management In
the development of the assumptions for the financial forecast;however,management acknowledges that It Is
responsible for the assumptions(Including review and approval of the assumptions)and for the preparation and
fair presentation of a financial forecast that presents,to the best of management's knowledge and belief,the
entity's expected forecasted assets, liabilities,equity, net assets,revenues, expenses,functional expenses,and
cash flows—regulatory basis of accounting for the financial forecast period, based on management's
assumptions and reflecting conditions management expects to exist and the course of action management
expects to take during the forecast period.
For all accounting services we may provide to you,Including the preparation of your financial statements,
management agrees to assume all management responsibilities;oversee the services;evaluate the adequacy
and results of the services;and accept responsibility for the results of the services.
Management responsibilities relevant to CLA's access to your cash
Someone with management authority is responsible for the processes below.All approvals listed must be
documented in writing,either electronically or manually:
• Approve all invoices and check payments.
• Approve all new vendors and customers added to the accounting system.
• Approve all wire transfers to external parties.
• Approve all customer and vendor credit memos and accounts receivable amounts written off.
Fees,time estimates,and terms
Ongoing normal accounting services:
• Services performed by staff/controller Estimated 80 hours per month
• Services performed for appointed Budget Director Estimated 100 hours per year
• Services performed by Matt Smutz/quality assurance as requested or required
May 17,2017
City of Canton
Page 7
Our fees for these services will be based on the time involved and the degree of responsibility and skills
required,plus expenses including internal and administrative charges.The time estimate Is based on anticipated
cooperation from your personnel and their assistance with preparing requested schedules. If the requested
items are not available on the dates required or are not accurate,the estimated fee for services will likely be
higher. If unexpected circumstances require significant additional time,we will advise you before undertaking
work that would require a substantial increase in the fee estimate.
The fees(guaranteed through April 30,2018)and estimated hours for these services are as follows:
Ongoing normal accounting services: $6,150 fixed fee per month
Budget Director appointment: $13,500 estimated fee annually
Included in the above fixed fees are unlimited meetings and phone calls to discuss operations, business matters,
and accounting matters of the entity.While the fixed fees entitle the entity to unlimited consultations with us, If
organizational conditions change or the scope of the work requires substantial additional effort beyond what
has been defined in this agreement,CLA agrees to perform the additional work at a mutually agreed upon price.
Out-of-pocket expenses such as out-of-town travel, meals,and lodging will be billed at cost and are not included
in the fees quoted above.The fee estimate is based on anticipated cooperation from your personnel and their
assistance with preparing requested schedules.If the requested items are not available on the dates required or
are not accurate,the estimated fee for services will likely be higher.If unexpected circumstances require
significant additional time,we will advise you before undertaking work that would require a substantial increase
in the fee estimate.
Our invoices for these fees will be rendered each month as work progresses and are payable on presentation.
Terms of payment for services are net 10 days. In accordance with our firm policies,work may be suspended if
your account becomes 30 days or more overdue and will not be resumed until your account is paid In full.If we
elect to terminate our services for nonpayment,our engagement will be deemed to have been completed even
if we have not provided you with the prepared financial statements.You will be obligated to compensate us for
all time expended and to reimburse us for all out-of-pocket expenditures through the date of termination.
Other fees
You also agree to compensate us for any time and expenses, including time and expenses of legal counsel,we
may incur in responding to discovery requests or participating as a witness or otherwise in any legal, regulatory,
or other proceedings that we are asked to respond to on your behalf.
Finance charges and collection expenses
You agree that if any statement is not paid within 30 days from its billing date,the unpaid balance shall accrue
interest at the monthly rate of one and one-quarter percent (1.25%),which is an annual percentage rate of 15%.
In the event that any collection action is required to collect unpaid balances due us, reasonable attorney fees
and expenses shall be recoverable.
May 17,2017
City of Canton
Page 8
Limitation of remedies
Our role is strictly limited to the engagement described in this letter,and we offer no assurance as to the results
or ultimate outcomes of this engagement or of any decisions that you may make based on our communications
with you.You agree that it is appropriate to limit the liability of CIA,its partners, principals,directors,officers,
employees,and agents(each a "CLA party')and that this limitation of remedies provision is governed by the
laws of the state of Minnesota,without giving effect to choice of law principles.
You further agree that you will not hold CLA or any other CIA party liable for any claim,cost, or damage,
whether based on warranty,tort,contract,or other law,arising from or related to this agreement,the services
provided under this agreement,the work product,or for any plans,actions,or results of this engagement,
except to the extent authorized by this agreement. In no event shall any CLA party be liable to you for any
indirect,special,incidental,consequential,punitive,or exemplary damages,or for loss of profits or loss of
goodwill,costs,or attorney fees.
The exclusive remedy available to you shall be the right to pursue claims for actual damages that are directly
caused by acts or omissions that are breaches by a CLA party of our duties owed under this agreement, but any
recovery on any such claims shall not exceed the fees actually paid under this agreement by you to CLA.
Time limitation
The nature of our services makes it difficult,with the passage of time,to gather and present evidence that fully
and fairly establishes the facts underlying any dispute that may arise between you and any CLA party.The
parties(you and CIA)agree that, notwithstanding any statute or law of limitations that might otherwise apply to
a dispute,including one arising out of this agreement or the services performed under this agreement,for
breach of contract or fiduciary duty,tort,fraud, misrepresentation or any other cause of action or remedy, any
action or legal proceeding by you against any CIA party must be commenced as provided below or you shall be
forever barred from commencing a lawsuit or obtaining any legal or equitable relief or recovery.An action to
recover on a dispute shall be commenced within the shorter of these periods("Limitation Period"):
• For preparation services,separately within twenty-four(24)months after the dates when we deliver the
bi-monthly prepared financial information under this agreement to you, regardless of whether any CLA
party provides other services for you relating to the prepared financial statements.
• For all other accounting services,separately within twenty-four(24)months after the date when we
deliver such services under this agreement to you on which the dispute is based,regardless of whether
any CLA party provides other services for you under this agreement.
The applicable Limitation Period applies and begins to run even if you have not suffered any damage or loss,or
have not become aware of the existence or possible existence of a dispute.
Service satisfaction
If you are not completely satisfied with the services performed by CLA,we will take reasonable corrective action
to satisfy you,and then if you are not completely satisfied,we will accept a portion of the fees that reflects your
level of satisfaction. Upon full payment of our invoice,we will assume you are satisfied with our work and our
service commitment will have been fulfilled.
May 17,2011
City of Canton
Page 9
To ensure that our services remain responsive to your needs,as well as fair to both parties,we will meet with
you throughout the term of the agreement and,if necessary,revise or adjust the scope of the services to be
provided and the fees to be charged.
Furthermore,it is understood that either party may terminate this agreement at anytime,for any reason, by
giving 30 days written notice to the other party. In that event,the provisions of this agreement shall continue to
apply to all services rendered prior to termination. It is understood that any unpaid fees that are owed or
invoices that are outstanding at the date of termination are to be paid In accordance with the terms of this
agreement.
Other provisions
Except as permitted by the "Consent"section of this agreement,CLA will not disclose any confidential,
proprietary,or privileged information of the entity to any persons without the authorization of entity
management or unless required by law.This confidentiality provision does not prohibit us from disclosing your
information to one or more of our affiliated companies in order to provide services that you have requested
from us or from any such affiliated company.Any such affiliated company shall be subject to the same
restrictions on the use and disclosure of your information as apply to us.
Pursuant to authority given by law or regulation,we may be requested to make certain workpapers available to
a regulator for their regulatory oversight purposes.We will notify you of any such request.Access to the
requested workpapers will be provided to the regulators under the supervision of CLA personnel and at a
location designated by our firm. Furthermore, upon request,we may provide copies of selected workpapers to
such regulators.The regulators may intend,or decide,to distribute the copies or information contained therein
to others,including other governmental agencies.
We will be responsible for our own property and casualty,general liability,and workers compensation
insurance,taxes, professional training,and other personnel costs related to the operation of our business.
When performing the services above,we will utilize the resources available at the entity to the extent practical
to continue development of your personnel. During a portion of our work,we may require the use of your
computers. We will try to give you advance notice and coordinate our use so it does not interfere with your
employees.
The relationship of CLA with the entity shall be solely that of an independent contractor and nothing in this
agreement shall be construed to create or imply any relationship of employment,agency, partnership,or any
relationship other than an independent contractor.
Accounting standards and procedures will be suggested and applied that are consistent with those normally
utilized in an entity of your size and nature.Internal controls maybe recommended relating to the safeguarding
of the entity's assets. If fraud is initiated by your employees or other service providers,your insurance is
responsible for covering any losses.
We are available to perform additional procedures with regard to fraud detection and prevention,at your
request, as a separate engagement,subject to completion of our normal engagement acceptance procedures.
The terms and fees of such an engagement would be documented in a separate engagement letter.
May 17,1017
City of Canton
Page 10
The entity agrees that CLA will not be assuming any fiduciary responsibility on your behalf during the course of
this engagement.
Employment provision
In the event that a CLA employee is solicited to work in a position as an employee of the entity,and In the event
that the CLA employee accepts the position of employment with the entity,the following conditions will apply:
1. CLA will require a four-week notice period subsequent to the employee's written notice to CLA,and
2. The entity will be required to pay an employment fee of$60,000 for the controller and$25,000 for the
staff to CLA immediately upon receipt of this notice.
If any former CLA employee shall be hired as an employee within 60 days of leaving CLA,there shall be a
refutable presumption that the CLA employee was solicited to work as an employee of the entity and the above
fee shall be payable to CLA.
Consent
Consent to use financial information
Annually,we assemble a variety of benchmarking analyses using data obtained through our client engagements.
Some of this benchmarking information is published and released publicly. However,the information that we
obtain is confidential,as required by the AICPA Code of Professional Conduct.Your acceptance of this
engagement letter will serve as your consent to use of City of Canton's information in these cost comparison,
performance indicator,and/or benchmarking reports.
Subcontractors
CLA may,at times, use subcontractors to perform services under this agreement, and they may have access to
your information and records.Any such subcontractors will be subject to the same restrictions on the use of
such information and records as apply to CLA under this agreement.
Technology
CIA may,at times, use third-party software applications to perform services under this agreement.You
authorize CLA to sign on your behalf any vendor agreements applicable to such software applications.CLA can
provide a copy of the application agreement at your request.You acknowledge the software vendor may have
access to your data.
May 17,2017
City of Canton
Page 11
Agreement
We appreciate the opportunity to be of service to you and believe this letter accurately summarizes the
significant terms of our engagement.This letter constitutes the entire agreement regarding these services and
supersedes all prior agreements(whether oral or written), understandings,negotiations,and discussions
between you and CLA. If you have any questions,please let us know. If you agree with the terms of our
engagement as described in this letter, please sign,date,and return the signed copy to us to indicate your
acknowledgment and understanding of,and agreement with,the arrangements for our engagement to prepare
your financial statements,and the parties'respective responsibilities.
Sincerely,
CllftonLarsonAllen LLP
AM- gekietC
Dan Bender,CPA
Manager
309-495-8841
Dan.bender@CLAconnect.com
Response:
This letter correctly sets forth the understanding of City of Canton.n. /y�
Authorized(governance signature: 444/ r'f '^'"��l
Title: /u��/'7Ayoll. //
Date: rJ/U i l r7
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