AGENDA TITLE:
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Adopt a Resolution Ratifying Amendment No. 2 to the Professional Services Agreement with Baker Tilly Advisory Group, LP of Mountain View in the amount of $55,000, which was executed as a Change Order by the City Manager and adding $150,000 for additional Professional Financial Services for a Total Contract Not to Exceed $308,900 ($103,900 Approved + $55,000 ratification + 150,000 for additional support) (CM)
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MEETING DATE:
February 5, 2025
PREPARED BY:
Laurie Montes, Assistant City Manager-Part-Time
recommendation
RECOMMENDED ACTION:
Adopt a Resolution Ratifying Amendment No. 2 to the Professional Services Agreement with Baker Tilly Advisory Group, LP of Mountain View, which was executed as a Change Order by the City Manager in the amount of $55,000 and adding $150,000 for additional Professional Financial Services for a Total Contract Not to Exceed $308,900 ($103,900 Approved + $55,000 ratification + 150,000 for additional support).
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BACKGROUND INFORMATION:
On August 28, 2024, the City Manager entered into a Professional Services Agreement with Baker Tilly Advisory Group, LP (Baker Tilly) in the amount of $60,000 to provide Library Assessment Services to analyze the best structure for the sustainability of programming and operations. Baker Tilly’s analysis compared the benefits and challenges of the various library models allowed under state statute, and provided financial analysis and models of the alternatives, and their final report was presented to the City Council at a special meeting on January 28, 2025.
On October 2, 2024, the City Council authorized waiving competitive bidding requirements for the original Professional Services Agreement pursuant to LMC 3.20.070 and approved Amendment No. 1 to the contract ($43,900) adding Long-Range Financial Forecasting Services for the City’s General Fund. Pursuant to Lodi Municipal Code (LMC) Section 3.20.075, professional/technical services contracts, including accounting and financial services, are exempt from the City’s advertising and bidding requirements. Given the City’s financial position, increasing pressure on financial resources and growing service demands, Council approved adding consulting services through Baker Tilly to provide a more robust Long-Range Financial Forecast.
Recent turnover in multiple areas of finance led to the discovery of significant concerns in accounting, budgeting, revenue, customer service, and payroll. Many of the issues found go back months or years, and are due to inadequate staffing levels and a lack of established procedures and training protocols. These included: payroll reporting and errors, failure to report to CalPERS, improper reconciliation of bank accounts, utility billing, and credit card transactions, a lack of accounting procedures and delayed closing periods, statutory reporting requirements and annual audit tasks, excessive customer wait times, and other operational gaps that needed immediate attention.
The discoveries reflected systemic issues and a lack of resources needed to address essential functions. The accuracy and integrity of the City’s financial records are a paramount priority. Staff have reached out to many consultants and temporary support agencies. Baker Tilly was able to provide immediate required assistance.
Therefore, in light of the urgent nature of these findings and the need for additional support to complete these time sensitive tasks, the City Manager executed Amendment No. 2 as a change order to the Professional Services Agreement with Baker Tilly in the additional amount of $55,000 to assist with the backlog of bank reconciliations, payroll activities, revenue collections, and annual financial reports. Staff now brings Amendment No. 2 back to Council and recommends ratification of the City Manager’s action and Baker Tilly providing these additional services.
Further Council action is now also requested in the form of Amendment No. 3 to Baker Tilly’s Professional Services Agreement to continue to provide services while recruitments are underway to fill multiple vacancies. The need for additional permanent resources is under evaluation and will be presented to Council either as a mid-year adjustment or for next fiscal year budget. Additional staff were redirected to the Payroll Division from other Departments to ensure payroll is completed timely and accurately. Permanent redirection is not a recommended option as it creates a backlog of work in other operational areas of the City. Additional contract resources are needed until the backlog is cleared and until required functions are being performed properly and timely. In addition to approving the ratification of Amendment No. 2, staff recommends approval of Amendment No. 3 to provide an additional $150,000 in funding for services. If Council chooses to ratify Amendment No. 2 and approve Amendment No. 3, this will bring the total Baker Tilly agreement to a not-to-exceed amount of $308,900 (Original contract of $60,000, amendment No. 1 of $43,900, ratification of Amendment No. 2 $55,000 and proposed additional financial services Amendment No. 3 of $150,000). Staff anticipates these services will be needed until early next fiscal year (August/September 2025).
STRATEGIC VISION:
3A. Fiscal Health: Promote City's transparency & fiscal fluency.
FISCAL IMPACT:
These are critical resources necessary for the City’s fiduciary responsibilities. Amendment No. 2 ratification is $55,000, and Amendment No. 3 is for $150,000.
FUNDING AVAILABLE:
Funding for the additional services is available in 10020202.72450
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Scott R. Carney
City Manager