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HomeMy WebLinkAboutAttachment 1 Moss Adams Cost Proposal Prepared by: Julie Desimone, Business Assurance Partner and National Practice Leader, Energy and Utilities Keith Simovic, Business Assurance Senior Manager Moss Adams LLP 805 SW Broadway, Suite 1200 Portland, Oregon 97205 (503) 242-1447 PROPOSAL FOR Truckee Donner Public Utility District Proposal for Truckee Donner Public Utility District May 18, 2016 Board of Directors Truckee Donner Public Utility District 11570 Donner Pass Road Truckee, CA 96161 Dear Board: We are pleased to present this cost proposal to Truckee Donner Public Utility District (the District) for annual audit services for fiscal years ending December 31, 2016, 2017, and 2018. We understand these audit services are to be done in conformity with generally accepted accounting principles. Below are highlights of what we offer the District. We have expended on these points in our Executive Summary:  Exceptional client service  Commitment to communication and on-time delivery  Deep specialty in serving electric water utilities  A service team comprised of industry and governmental specialists  National recognition and California presence We hope this proposal expresses our enthusiasm and desire to continue working with Truckee Donner Public Utility District. We are confident you will be pleased with our client service expertise, outstanding communication, industry strength, and business insights. We welcome any questions you may have about this proposal and thank you again for your continued consideration of Moss Adams. Sincerely, Julie Desimone, CPA Keith Simovic, CPA Partner Senior Manager For Moss Adams LLP For Moss Adams LLP (503) 478‐2101 (503) 4782284 julie.desimone@mossadams.com keith.simovic@mossadams.com Proposal for Truckee Donner Public Utility District TABLE OF CONTENTS EXECUTIVE SUMMARY 1 WHY CHOOSE MOSS ADAMS? 1 YOUR SERVICE TEAM 3 QUALITY SERVICE AND STAFF 4 ENGAGEMENT TEAM CONTINUITY 5 CLIENT REFERENCES 6 COMPETITIVE FEES 7 ADDITIONAL INFORMATION 8 Proposal for Truckee Donner Public Utility District | 1 EXECUTIVE SUMMARY WHY CHOOSE MOSS ADAMS? You know us and we know you We at Moss Adams have appreciated working with you, your staff, and your board of directors over the years and our team was pleased that you thought highly enough of our services to ask us to propose on those services again. As your current auditor, you know our capabilities, our level of service, and our commitment to serving the District. Our experience with your systems and your personnel ensures you will continue to experience an efficient and effective audit with valuable observations. Exceptional client service We're committed to one thing at Moss Adams: providing noticeably superior value‐added services that make a difference to your entity. That means giving you more than what’s expected and working closely with you to help monitor your financial condition, manage growth effectively, control costs, and achieve your mission. It’s about building a strong, long‐term relationship with you. Other factors in serving you well include things like ensuring your engagement team stays consistent from year to year and staffing your engagement with well‐trained accountants. This equates to a more efficient and effective audit that’s completed in fewer hours. We focus on providing year‐round service to our clients, and we encourage two‐way communication throughout the year to discuss current operations, industry developments, new accounting standards, compliance requirements and other pertinent information. Commitment to communication and on-time delivery We are committed to maintaining a high level of communication throughout the audit period and meeting your deadlines. Part of the value we provide to your business is a commitment to maintaining close and regular contact with you throughout the year. We’re not once‐a‐year auditors who disappear for many months, only to return in time for the next audit. We’re a constant resource for questions and advice, with a quick response time. From routine phone calls or immediate issues of concern, we won’t keep you waiting or wondering. Instead, we’ll take the lead in suggesting meetings with you, setting up training sessions with your internal accounting staff, and delivering presentations to your board of directors. Also, you require proactive communications about our engagement findings. We’ll raise any issues as we find them, and not Proposal for Truckee Donner Public Utility District | 2 when it’s too late for you to act. In addition, we will notify the District immediately of any emerging accounting, tax, and regulatory matters or concerns, further helping to ensure there are no surprises. Deep specialty in serving utilities We have the depth of resources necessary to serve the District with focused industry experts and firm‐wide specialists at your disposal. Moss Adams serves as the independent auditor to many electric, water and other utilities of similar size to the District including, municipal entities, public utility districts, cooperatives, joint powers agencies and independent power producers. Our client’s operations include distribution, generation and transmission. We understand the accounting and operational issues facing the District. A service team comprised of industry and governmental specialists The members of our Energy and Utility practice have a long‐term commitment to the industry which shows in their experiences, training and involvement with industry associations. Most of our industry group members spend 75% to 100% of their time serving utilities. These team members are dedicated to superior service. National recognition and California presence Moss Adams is a nationally recognized firm. We are the 5th largest accounting and consulting firm in the state of California and among the 15th largest in the United States. Our staff of more than 2,400 includes approximately 267 partners. Moss Adams is also a founding member of Praxity, AISBL, a global alliance of independent accounting firms providing clients with local expertise in the major markets of North America, South America, Europe, and Asia. Select Moss Adams In conclusion, Moss Adams is extremely well positioned to help Truckee Donner Public Utility District with its needs. We're big enough to have the necessary resources you require now and when you grow, yet we're small enough to provide the personal, timely service you desire. Proposal for Truckee Donner Public Utility District | 3 YOUR SERVICE TEAM We have selected the following individuals to continue working with the District based on their experience serving electric and water utilities as well as their dedication to providing superior client service. Each member of this proposed team consistently meets and/or exceeds continuing professional education requirements, and has recent and on‐going municipal/utility audit experience. Julie Desimone, Business Assurance Partner and National Practice Leader, Energy and Utility Services – Governmental Group Julie Desimone is a business assurance partner and national practice leader for Energy and Utility Services. Julie has recently been appointed to serve on the Moss Adams Assurance Services Committee, and serves as an AICPA peer reviewer. She is also a regular contributor of articles to the NWPPA Bulletin and a presenter for Northwest Public Power Authority classes on subjects including utility accounting and utility budgeting. Julie is responsible for numerous audit engagements, and has performed many consulting projects and speaking engagements covering technical and operational issues. Some specific areas of her professional experience include: advanced utility accounting and cooperative matters, technical auditing services including A‐133, technical accounting issues, contracting issues, and internal control evaluation. A representative list of the clients Julie continues to serve include: City of Portland, City of Tacoma and Tacoma Public Utilities, Clark Public Utility District, and Southern California Public Power Authority. Julie Desimone, Partner | 805 SW Broadway, Suite 1200, Portland, OR 97205 |  t) 503‐478‐2101 | julie.desimone@mossadams.com Keith Simovic, Business Assurance Senior Manager Role: Engagement Senior Manager and Accountant In Charge Keith Simovic is a business assurance senior manager with more than seven years of experience in public accounting. Keith has assurance experience with a broad client base, including utility, not‐for‐profit/government, forest products, manufacturing, distribution, and healthcare organizations, as well as a variety of experience in other types of industry; however as his career has developed, Keith has chosen to spend an increasing amount of time working on utilities. Keith Proposal for Truckee Donner Public Utility District | 4 has significant experience in advanced utility accounting, derivatives and power hedging, and is a regular presenter for Northwest Public Power Authority classes on subjects including utility accounting and utility budgeting. Keith is a licensed certified public accountant in the state of Oregon and graduated with a Bachelor of Business Administration with a concentration in accounting from Oregon State University. A representative list of the clients Keith continues to serve include: Eugene Water & Electric Board; City of Portland – Water and Hydro Funds; Clark Public Utilities, Tillamook PUD; Tualatin Valley Water District; and Truckee Donner Public Utility District. Keith Simovic. Senior Manager | 805 SW Broadway, Suite 1200, Portland, OR 97205 | t)503‐478‐2284 | f)503‐274‐2789 | keith.simovic@mossadams.com Audit Seniors and Staff We will utilize audit staff from our Oregon region who are knowledgeable about governmental accounting standards and municipal utilities and have met and/or exceeded continuing education requirements. QUALITY SERVICE AND STAFF At Moss Adams, our goal is to hire and keep people who believe in, and demonstrate, a sincere passion for excellence in their work, and a deep commitment to interacting with each and every colleague and client with respect. This goal cannot be achieved without well‐trained, highly‐ motivated people who are continually challenged and growing in their professional abilities. We have improved our capacity and capabilities by becoming more effective at recruiting, performance feedback and coaching programs, retaining our best people, and training a new generation of leaders. In recent years, we have made progress as demonstrated by an ever‐increasing number of newly admitted partners who have spent many years at Moss Adams. Our firm values emphasize a balance between ambitious professional goals and a well‐lived life. We know these values have helped us to retain quality staff, and make us different from other firms. “Several years ago we asked Moss Adams to bid on our audit. We came to them because of their utility group experience pertaining to municipalities. I can say that they have delivered. Our Commission is happy with their work and their presentations to the Board over the last three years. They have not let us down and have added value by way of their utility experience. Our audit experience with them from a staff support standpoint has been very smooth as well.” Mark Carlton, Finance Director McMinnville Power & Light Proposal for Truckee Donner Public Utility District | 5 ENGAGEMENT TEAM CONTINUITY Less turnover means less time wasted retraining a new engagement team and more time spent focusing on your day‐to‐day business during the audit. By keeping your audit team consistent from year to year, we can complete the audit more efficiently and in a timely manner because the team members already know the details of the District through their past experience. Our policy is to not rotate staff from an engagement team unless absolutely necessary. Typically, this would happen because the staff member has left the firm or has elected to change his or her professional focus to a different industry group. Neither situation is very common, especially since we have a high retention rate. Below are retention statistics for our firm for the past three years: Group 2015 Retention 2014 Retention 2013 Retention Client Service Professionals 81.0% 80.0% 81.4% Administrative Staff 87.6% 86.6% 90.6% Audit team continuity is the hallmark of a stable and efficient audit firm and, with an overall retention rate averaging over 80 percent firm‐wide over the past three years, we are in a strong position to maintain your engagement team continuity. Still, if it were to become necessary to change members of your engagement team, we pledge to:  Discuss any changes with you first  Replace departing staff members with people of comparable skill and experience  Take all the steps we can to lessen the change’s impact on you Proposal for Truckee Donner Public Utility District | 6 CLIENT REFERENCES The final measure of an accounting firm’s capability to deliver on its promises lies not in what is said in its proposal but in the testimony of the companies it has served. The clients listed below have received similar services as those proposed to the District. We encourage you to contact these references for feedback about the quality of service we provide and level of satisfaction. Client Name Contact Name Phone Number Eugene Water & Electric Board Susan Eicher (541) 685-7386 Imperial Irrigation District Belen Valenzuela (760) 339-9345 Northern California Power Agency Donna Stevener (916) 781-4244 Public Utility District No. 1 of Clark County Rick Dyer (360) 992-3384 Proposal for Truckee Donner Public Utility District | 7 COMPETITIVE FEES Moss Adams is committed to competitive fees for the District that are commensurate with the experience and necessary level of service described in this proposal. At all times, we want you to feel that the dollars you spend for our professional services bring you exceptional value. Our audit fee is based upon our assessment of the audit scope, our knowledge of the industry issues, the risks inherent in your business, and the effort required to complete a thorough audit. Based on our understanding of your service needs and the nature of your operations, we have prepared the following “Not‐To‐Exceed” fee estimate. Service Description 2016 2017 2018 Audit of the financial statements of Truckee Donner Public Utility District $43,000 $44,500 $46,000 Attendance at audit committee meetings, including:  Presentation of audit results  Communication of internal control issues  Management letter Included Out of pocket costs* $6,000* $6,000* $6,000* Consulting, as needed. Hourly rates *Out of pocket costs for travel will be billed based on actual costs incurred, and will not exceed amount listed. Our proposed fees are also based on a presumption that your books and records will be in good condition, and that your accounting and finance staff will provide reasonable and customary assistance. The estimate is also based on accounting and auditing standards that have been issued as of the date of this proposal submission, which cover a range of issues on an auditor’s assessment of risk and required audit documentation. Accounting and auditing standards can and do change, so if future changes are significant enough to warrant it, we would modify our audit approach, procedures, and scope of work. Before doing so, however, we would negotiate any adjustment to our fees with you. Proposal for Truckee Donner Public Utility District | 8 ADDITIONAL INFORMATION Subject The Details Cost Overruns During the course of the audit, we will measure our progress against our planned budget. If situations arise that are significantly different than our expectations, we will bring them to your attention immediately and discuss various options before we proceed. We meet weekly during the course of fieldwork with the appropriate parties to ensure there are open lines of communication between our organizations. Progress Billing Progress billings are based on hours and expenses completed at the time of billing. Bills are due upon receipt. We reserve the right to charge interest on accounts over 30 days past due. Routine Phone Calls and E-mails Our policy is to not charge for short telephone calls seeking miscellaneous advice, unless those consultations require significant additional work or research. If a matter requires further follow-up, we will discuss a fee estimate with you before incurring significant time. Expenses Expenses include amounts incurred for travel and other expenses, such as report processing and software charges. These amounts will be billed monthly as incurred. Our engagement letter will provide an estimate of the expenses for the services to be provided. Minor Research and Consultation If we are requested to provide minor research or consultation service, we will estimate the number of hours necessary to provide the requested services. We will then provide a fee quote for your approval before commencing any work. Our fees for these services are generally at our standard billing rates.