HomeMy WebLinkAbout#19 - Accounting Services AgreementSTAFF REPORT
DATE: November 17, 2020
CONSENT
TO: Mayor and Council
AGENDA ITEM: AEM Contract for Accounting Services
SUBMITTED BY: Kristina Handt, City Administrator
BACKGROUND:
The city has been contracting finance director level services with Neil Soltis since February. Soltis is
ready to return to retirement so staff sought other proposals to help with accounting services while the
search for a new finance director continues.
ISSUE BEFORE COUNCIL:
Does Council approve the proposed contract for accounting services from AEM?
PROPOSAL DETAILS/ANALYSIS:
Included in your packet is a proposal from AEM to provide accounting services. The scope of services are
outlined on page 11 and include monthly bank and investment reconciliation, complete and review journal
entries, prepare audit work papers, and complete some state reporting requirements. The agreement would
run until May 16, 2021 and could be canceled by the city with a 60 day notice.
FISCAL IMPACT:
Hourly fees as outlined in the proposal are:
Partner $385
Senior Manager $280
Senior Associate $190
Accounting Specialist $155
Most of the work will be completed remotely, if work is required onsite ½ the hourly rate will be charged
for travel along with the IRS mileage reimbursement rate.
OPTIONS:
1) Approve the AEM Accounting Services Agreement
2) Amend and then approve the AEM Accounting Services Agreement
3) Do not approve the AEM Accounting Services Agreement
RECOMMENDATION:
“Motion to approve the AEM Accounting Services Agreement.”
ATTACHMENT:
• AEM Accounting Services Proposal
5201 Eden Avenue Suite 250 Edina, MN 55436
P: (952) 835.9090 • F: (952) 835.3261
100 Warren Street Suite 600 Mankato, MN 56001
P: (507) 625.2727 • F: (507) 389.9139
www.aemcpas.com
Accounting
Services
Proposal
City of
Lake Elmo
November 6, 2020
November 6, 2020
Kristina Handt, City Administrator
City of Lake Elmo
3880 Laverne Avenue North
Lake Elmo, Minnesota 55042
Dear Kristina,
Thank you for the opportunity to submit this proposal to the City of Lake Elmo, Minnesota (the City) for accounting
services. Based on our past experience with cities of comparable size and complexity, we believe our structured
contract with defined outcomes offered through AEM Financial Solutions, LLC (AEMFS) would provide the City with
excellent accounting services.
We believe our solution will continue to result in the City receiving high level information and continual improvement of
processes. Our proposal is based on the needs of the City laid out in the request for proposal and the experiences we
have had working with other cities. The proposal outlines the scope of services we believe will address the needs of the
City.
The term of this contract shall be from November 16, 2020 to May 16, 2021.
An AEMFS representative will perform services remotely as noted on the Scope of Services page. If necessary, an
AEMFS representative will be in the City offices.
Investment by the City for services is indicated in the financial page.
AEMFS would like to thank the City for the opportunity. We look forward to exceeding your expectations and developing
a long-term, mutually beneficial relationship.
Sincerely,
AEM Financial Solutions, LLC
an Abdo, Eick & Meyers, LLP Company
Jean D. McGann, CPA
President, AEM Financial Solutions, LLC
Partner, Abdo, Eick & Meyers, LLP
2
Table of
Contents
Government Experience 4
Technology 5
Your Team 6
Team Bios 7
Value & Scope of Service 11
What Our Clients Say 12
Why AEM?13
Appendix A
(Agreement for Financial Services)14
Appendix B
(Agreement for the Provision of
Professional Services)19
3
Government Experience
You can have confidence in our 10 years of
consulting services, over 55 years of quality
accounting services and partnership in the
government space. Since 1963, we’ve served cities
just like yours. With an unwavering commitment to
streamlining processes, training staff, and finding
technology-based solutions, we proudly offer
excellence in city consulting and auditing.
Out of our 160-strong, talented staff, over 40 team
members are 100% focused on government
clients, including services for over 100 cities and
other governmental entities. By serving cities
across Minnesota, we have become experts in the
nuances of how to best support your city.
Our expertise affords you a consulting experience
that is painless. We do this by communicating up
front, coming better prepared, and being available
throughout the year to support you.
Our Process
Our methods are centered around incorporating
technology to deliver unparalleled solutions for
government organizations. In addition to our
consulting experience, our firm expertly performs
outsourcing for governments giving us a wealth of
experience in a consulting role. We don’t believe in
a one-size-fits-all mentality. So together, we’ll focus
on the needs that are relevant to your city and
provide the right services to meet them with a
customized methodology based on your needs.
We’re focused on developing creative, customized
solutions to help your city mitigate costs and boost
efficiency.
Our Focus
Through continuous training and growth
opportunities, we’ve established an environment
with a focus on serving city governments. We
spend more than 100 hours training and
onboarding to ensure success for our clients.
We truly hope that you allow us to be your partner.
Together, we’ll go beyond the numbers to best
support your city.
Our Financial Management and
Consulting Services Include:
•Arbitrage compliance
•Budget process development
•Capital improvement planning
•Cash flow analysis
•Cost containment processes
•Debt management plans
•ERP system consulting
•Finance Director services
•Financial management plans
•Financial reporting and analysis
•Fleet: Operations and replacement rate
analysis
•Interim accounting and financial services
•Internal control evaluation
•Long-term strategic planning
•Payroll processing
•Policy development
•Process flows and efficiencies
•Project management
•Quarterly and monthly reporting to
management
•Reconciliations
•Software implementation
•Utility/fee analysis
•Year-end audit preparation and financial
statement preparation
Our Qualifications
GFOA and MnGFOA Association members
Government operations training
MSRB Municipal Advisor Qualified
Representatives (Series 50)
Consulting services for over 100 cities
We’ve assisted many municipalities in preparing
for the GFOA’s Certificate of Achievement for
Excellence awards in financial reporting
4
Technology
AEM Technology
We believe technology should enhance our service offerings, making our work less intrusive, our time with you more
productive and keep everyone’s data more secure. Our use of technology in providing financial accounting services
enables us to streamline our work.. It also helps us to automate certain functions of accounting services, so we are free
to spend more time analyzing our results and working directly with you.
AEM takes the security of our data and our client's data very seriously. A number of systems are in place to ensure the
safety of your organization’s data with us. We operate in a completely remote hosted environment. This not only allows
us to work from any computer, anywhere, any time, but also provides large scale, cutting edge technology and security
for your data. Your data is housed in a secure data warehouse, not on laptops or local servers.
It also means:
All firm staff use dual authentication for every login to our remote environment
Our data is saved on redundant servers so if one server fails, another server immediately takes over
Our data is backed up continually
All email and embedded links are scanned for viruses prior to landing in our inbox
Our remote host vendor works exclusively with public accounting firms. Their client base includes approximately 300
firms. They maintain a Service Organization Control 2 (SOC 2) report covering their organizational controls over
security, processing integrity, etc. This report is available if you’d like to review it.
5
Your Team
In assembling our team to serve the City of Lake Elmo, we have assigned experienced individuals who know and
understand your unique financial accounting needs. Our proposed delivery team has substantial experience working
with cities similar to Lake Elmo. Our team members and their respective experience are briefly profiled below. Full
biographies for the team are located on the following pages.
Team Member
Jean McGann
Partner, President, CPA
24 Years of Experience
Brenda Davitt
Senior Supervisor
30+ Years of Experience
Ashley Feldewerd
Associate
7 Years of Experience
Jessi Sturtz
Associate
8 Years of Experience
6
Team Bios
Team Member Background & Expertise
Jean McGann, CPA
Partner | Abdo, Eick & Meyers LLP
President | AEM Financial Solutions, LLC
Registered Municipal Advisor
jean.mcgann@aemfs.com
Direct Line (952) 715.3059
Jean joined the Firm in 2013. She is licensed to practice as a CPA in Minnesota.
Jean leads the Financial Solutions team providing financial management
services, budget development and oversight, operational assessments, ERP
system consulting, arbitrage compliance and customized solutions for
government and nonprofit agencies as well as professional service firms.
Education
•Bachelor of Arts, Buena Vista University, Storm Lake, Iowa
•Continuing professional education as required by AICPA and
Government Accountability Office
Professional Memberships
•American Institute of Certified Public Accountants (AICPA)
•Minnesota Society of Certified Public Accountants (MNCPA)
•Minnesota Government Finance Officers Association
•Government Finance Officers Association of the United States
and Canada
•Minnesota Clerks & Finance Officers Association (MCFOA)
Affiliations
•Finance and audit committee member for Project for Pride in Living
Qualifications
•24 years of experience in finance and auditing
•Over 8 years of experience in operations management
•Highly skilled in strategic planning and financial forecasting
•Experience in identifying and implementing cost containment processes,
efficiencies and streamlining processes
•Policy development, internal control evaluation and project management
experience
•MSRB Municipal Advisor Qualified Representative (Series 50)
7
Team Bios
Team Member Background & Expertise
Brenda Davitt
Senior Supervisor
brenda.davitt@aemfs.com
Direct Line (952) 939.3210
Brenda joined the AEM Financial Solutions group in 2020 bringing with her
over 30 years of governmental experience. Her past includes working for
Washington County as an Accountant, Budget Analyst and Finance
Supervisor. She then moved on to become the Assistant Finance Director for
the City of Roseville and later as the Finance Director for the City of New
Brighton.
Education
•Bachelor of Science in Finance, St. Cloud State University
•Advanced Governmental Institute, University of Madison & Government
Finance Officers Association
•Advanced Police Budgeting and Cost Analysis, Northwestern University
Professional Memberships
•Minnesota Government Finance Officers Association (MNGFOA)
•Government Finance Officers Association of the United States and
Canada
Qualifications
•Over 30 years of experience working in governmental accounting
•Project management with ERP system implementation
•Policy development and internal control evaluations
•Experience in long range utility rate studies, Capital Improvement, Debt
Management, and Financial Analysis Plans
•Management of cash flows and compliance to legislative statutes and OSA
regulations for Tax Increment Districts
8
Team Bios
Team Member Background & Expertise
Ashley Feldewerd
Associate
ashley.feldewerd@aemfs.com
Direct Line (952) 715.3060
Ashley joined the firm in 2017 as a Financial Services Accounting Specialist
after completing her degree from the Minnesota School of Business. Her past
experience includes service to Minnesota municipalities, a financial institution
and self-employment in the manufacturing and agriculture industries.
Education
•Associates Degree, Business Administrative Assistant,
Minnesota School of Business
Graduated with Honors
•Continuing professional education
Qualifications
•7 years of experience working with local governments in
administration and finance
•3 years of experience working at a financial institution in administration
and finance
•Worked extensively with CTAS, Black Mountain, BD &A and Banyon
9
Team Bios
Team Member Background & Expertise
Jessi Sturtz
Associate
jessi.sturtz@aemfs.com
Direct Line (507) 625.6861
Jessi joined the Firm in 2020 as an Associate in the Financial Solutions group.
Prior to joining AEMFS, Jessie worked for a local government in southern
Minnesota. She has eight years of experience working with local governments in
accounting and has worked extensively with Banyon.
Education
•Bachelor’s Degree in Accounting –Rasmussen College
•Continuing professional education
Professional Memberships
•Minnesota Certified Municipal Clerk (MCMC)
Qualifications
•8 years of experience working with local government
•10 years experience working at a financial institute in accounting
•Background with budgeting, transactional processes and payroll
•Worked extensively with Word, Excel and Banyon
10
Value & Scope of Services
We at AEM help cities achieve their financial goals.
Our fees are based on the experience and level of the individuals who will be assigned to perform your work. Fees are
also based on the assumption and limitations outlined in the scope of work that follows below. Below are the fees for
our services.
For on-site services, travel will be invoiced at ½ the hourly rate and mileage at the standard IRS rate.
If services are requested outside of the scope of services indicated, AEMFS will discuss with the City and provide an
estimate of cost for the requested services.
Monthly fees will be invoiced throughout the remainder of this contract.
Scope of Services
Scope of Services
AEMFS Contract Task Client Responsibility Frequency
Cash & Investment Reconciliation Receive cash & investments statements &
forward to AEM. Monthly
Complete and review Journal Entries for
accuracy Review and provide input Monthly
Prepare work papers and gather support for
the audit of the financial statements
Cooperation in location of supporting
documentation as needed
November 2020 –May
2021
Prepare MN Dept of Revenue Year-End
Reports:
Property Tax Levy Report
Certification of Truth & Taxation
Provide 2021 Budget Detail December –January
Prepare OSA Summary Budget Form Provide 2021 Budget Detail January
Services Provided Service Period
Interim Accounting Services November 16, 2020 to May 16, 2021
Hourly Rates
Partner $385
Senior Manager $280
Senior Associate $190
Accounting Specialist $155
11
What Our Clients Say
Client References
We have long-term relationships with many cities in Minnesota. Our clients listed below serve as a sample of
references of those we serve as their Finance Director. Additional references are available upon request.
City of New Hope
Kirk McDonald | 763.531.5112
Engagement partner –Jean McGann
City of Crystal
Anne Norris | 763.531.1140
Engagement partner –Jean McGann
City of Hastings
Julie Flaten | 651.480.2355
Engagement partner –Jean McGann
City of New Brighton
Devin Massopust | 651.638.2046
Engagement partner –Jean McGann
12
Why AEM?
We Listen
You will know you’re in the
right hands well before
delivery, but be assured
that we will get you a great
value for the investment of
your time.
We Engage
Active engagement with DFK
International and domestic
industry associations allows
us to provide maximum
value to your organization.
We Deliver
Combining our internal
expertise and technological
resources with what we’ve
learned about you allows
us to deliver a solution that
exceeds your expectations.
Abdo, Eick & Meyers, LLP, established in 1963,
has a professional staff of more than 150 in its
Edina and Mankato offices. The two offices serve
clients of all sizes and industries. Our services
include audits, reviews and compilations, monthly
accounting, tax planning and preparation,
management advisory services and HR
Outsourcing, to name a few. In addition, Abdo, Eick
& Meyers, LLP is recognized as one of the Top 150
firms in the United States and the 13th largest firm
in Minnesota.
We're here because our clients need solutions to
their challenges--not a commodity product.
Through our dedication to teamwork, development
and relationships, we will help our clients thrive.
The investments into our People + Process make a
difference for you, our valued client. We focus on
the challenges and needs that are relevant to your
business or government agency. This allows us to
be thoughtful in our approach in providing you with
the best solutions, and leave you assured in the
value of our deliverable.
The Firm is a member of the American Institute of
Certified Public Accountants Division of Firms and
has received an unmodified opinion on its Peer
Review. Our Peer Review, which included
nonprofit, was completed in 2017 and resulted in a
pass rating.
The Firm has not had any federal or state desk
reviews or field reviews of its audits in the last three
years. We have had no disciplinary action taken or
pending against the Firm during the past three
years with state regulatory bodies or professional
organizations.
We maintain library facilities which include current
professional literature and specific information for
the industries we serve. The Firm library is also
reviewed as part of the external quality review
program. The Firm has in-house training programs
specific to our nonprofit clients. We also perform
auditing and accounting updates for our clients that
are organized by our staff. These practices ensure
the quality of our staff over the term of
engagement.
13
Appendix A
14
Agreement for Financial Services
THIS AGREEMENT, is made and entered into on November 6, 2020 by and between the City of Lake Elmo, Minnesota
(hereinafter referred to as the “City”), and AEM Financial Solutions LLC (hereinafter referred to as the “Contractor”).
Articles of Agreement & Recitals
WHEREAS,the City is authorized and empowered to secure from time to time certain professional services through
contracts with qualified consultants; and
WHEREAS,the Contractor understands and agrees that:
1.The Contractor will act as an Independent Contractor in the performance of all duties under this Agreement.
Accordingly, the Contractor shall be responsible for payment of all taxes, including federal, state and local taxes
and professional/business license fees arising out of the Contractor’s activities;
2.The Contractor shall have no authority to bind the City for the performance of any services or to obligate the City.
The Contractor is not an agent, servant, or employee of the City and shall not make any such representations or
hold himself/herself out as such;
3.The Contractor shall be the exclusive outsourced accounting service provider for the City during the term of this
Agreement;
4.The Contractor shall perform all professional services in a competent and professional manner, acting in the best
interests of the City at all times.
5.The Contractor shall not accrue any continuing contract rights for the services performed under this contract.
NOW THEREFORE, in consideration of the mutual covenants and promises contained herein, it is agreed as follows:
ARTICLE I
INCORPORATION OF RECITALS
The recitals and agreement set forth above are hereby incorporated into this Agreement.
ARTICLE II
LIABILITY INSURANCE
Section 1 Liability Insurance: The Contractor shall obtain professional liability insurance, at their expense with liability
insurance coverage minimums in the amount of $2,000,000, which Contractor must secure and maintain during the
term of this Agreement. Contractor will provide City with proof of liability insurance coverage under this Agreement in
writing upon request by the City.
15
AGREEMENT FOR FINANCIAL SERVICES -CONTINUED
ARTICLE III
DURATION OF THE AGREEMENT
Section 1 Duration: This Agreement shall commence upon date of execution by all parties and will remain in effect until
May 16, 2021 unless earlier terminated as provided in Sections 2 and 3.
Section 2 City’s Termination Rights: City may terminate this Agreement upon sixty (60) days written notice in the event
the City determines in its sole discretion that it is not in the City’s best interest to continue using Contractor’s services.
The City may terminate on ten (10) days written notice if the Contractor fails to perform its obligations under this
Agreement.
Section 3 Contractor’s Termination Rights: Contractor may terminate this Agreement upon thirty (30) days written
notice to City in the event City does not pay Contractor compensation as required under Article 5, Section 9 within
fifteen (15) days after invoice is received by City. In the event of non-payment within thirty (30) days, Contractor shall
give City an opportunity to cure the default by giving a notice of such non-payment and an additional five (5) days after
the City’s receipt of the notice to remit such payment, prior to giving a notice of termination. Contractor can also
terminate the Agreement with one hundred twenty (120) days written notice if the Contractor believes it is in its best
interests to terminate the Agreement.
ARTICLE IV
RENEWAL OF THE AGREEMENT
Section 1 Renewal Period: Not less than thirty (30) days prior to the expiration of this Agreement, the City may provide
written notice of intent to renew this Agreement for an additional term of up to three years upon terms and conditions
agreed upon by both parties to the Agreement. If no such renewal agreement is executed by the parties, the Agreement
terminates without further action of either party on May 16, 2021.
ARTICLE V
GENERAL
Section 1 Authorized City Agent: The City’s authorized agent for the purpose of administration of this Agreement is the
City Administrator. Said agent shall have final authority for approval and acceptance of the Contractor’s services
performed under this Agreement and shall further have responsibility for administration of the terms and conditions of
this Agreement. All notices under this Agreement shall be sent to the person and address indicated below on the
signature lines.
Section 2 Amendments: No amendments or variations of the terms and conditions of this Agreement shall be valid
unless in writing and signed by the parties.
Section 3 Assignability: The Contractor’s rights and obligations under this Agreement are not assignable or
transferable.
16
AGREEMENT FOR FINANCIAL SERVICES -CONTINUED
ARTICLE V -CONTINUED
GENERAL -CONTINUED
Section 4 Data: Any data or materials, including, but not limited to, reports, studies, photographs, negatives, or any and
all other documents prepared by the Contractor or its outside consultants in the performance of the Contractor's
obligations under this Agreement shall be the exclusive property of the City, and any such data and materials shall be
remitted to the City by the Contractor upon completion, expiration, or termination of this Agreement. Further, any such
data and materials shall be treated and maintained by the Contractor and its outside consultants in accordance with
applicable federal, state and local laws. Further, Contractor will have access to data collected or maintained by the City
to the extent necessary to perform Contractor's obligations under this Agreement. Contractor agrees to maintain all
data obtained from the City in the same manner as the City is required under the Minnesota Government Data
Practices Act, Minnesota Statutes Chapter 13 or other applicable law (hereinafter referred to as the "Act"). Contractor
will not release or disclose the contents of data classified as not public to any person except at the written direction of
the City. Upon receipt of a request to obtain and/or review data as defined in the Act, Contractor will immediately notify
the City. The City shall provide written direction to Contractor regarding the request within a reasonable time, not to
exceed fifteen (15) days. The City agrees to indemnify, hold harmless and defend Contractor for any liability, expense,
cost, damages, claim, and action, including attorneys' fees, arising out of or related to Contractor's complying with the
City's direction. Subject to the aforementioned, Contractor agrees to defend and indemnify the City from any claim,
liability, damage or loss asserted against the City as a result of Contractor's failure to comply with the requirements of
the Act. Upon termination and/or completion of this Agreement, Contractor agrees to return all data to the City, as
requested by the City.
Section 5 Entire Agreement: This Agreement is the entire agreement between the City and the Contractor, and it
supersedes all prior written or oral agreements. There are no other covenants, promises, undertakings, or
understandings outside of this Agreement other than those specifically set forth. Any term, condition, prior course of
dealing, course of performance, usage of trade, understanding, or agreement purporting to modify, vary, supplement, or
explain any provision of this Agreement is null and void and of no effect unless in writing and signed by representatives
of both parties authorized to amend this Agreement.
Section 6 Severability: All terms and covenants contained in this Agreement are severable. In the event any provision
of this Agreement shall be held invalid by any court of competent jurisdiction, this Agreement shall be interpreted as if
such invalid terms or covenants were not contained herein and such holding shall not invalidate or render
unenforceable any other provision hereof.
Section 7 Contractor Fiscal Decision Waiver: Contractor is responsible for providing the City with timely and accurate
financial recommendations and information that allows City Council the ability to make final financial decisions.
Contractor will provide final financial recommendations but is not responsible for the final decisions made regarding
financial matters.
Section 8 City Employment of Contractor’s Employees; Should the City desire to employ the Contractor’s employee
that is assigned to the City during the term of this Agreement, it must have the written consent of the Contractor to enter
into a City employee contract with the Contractor’s employee. Should the Contractor agree to such arrangement, the
agreement will include a payment equal to 150% of the annual contracted cost, in addition to the annual contracted cost
already paid to the Contractor. This restriction on employment applies during the term of this agreement and for six
months thereafter.
17
AGREEMENT FOR FINANCIAL SERVICES -CONTINUED
ARTICLE V -CONTINUED
GENERAL -CONTINUED
Section 9 Compensation: The parties agree that the Contractor shall be paid compensation for the services provided
hereunder, payable for work performed in accordance with this Agreement, based on the fees indicated in Table 1 and
under the attached scope of services. Additional fees will not be incurred without prior approval of the City.
Table 1
For on-site services, travel will be invoiced at ½ the hourly rate and mileage at the standard IRS rate.
If services are requested outside of the scope of services indicated, AEMFS will discuss with the City and provide an
estimate of cost for the requested services.
Monthly fees will be invoiced throughout the remainder of this contract.
Section 10 Additional Services: Should the City request additional services in addition to the Contracted Services, the
Contractor will provide the City with proposed fees for the services to be provided. The City shall provide a written or
electronic confirmation prior to the proposed services implementation.
Section 11 Outside Contractors: It shall be the responsibility of Contractor to compensate any other outside consultants
retained or hired by Contractor to fulfill their obligations under this Agreement and shall be responsible for their work
and Contractor, by using outside contractors, shall not be relieved of its obligations under this Agreement.
Services Provided Service Period
Interim Accounting Services November 16, 2020 to May 16, 2021
Hourly Rates
Partner $385
Senior Manager $280
Senior Associate $190
Accounting Specialist $155
18
Appendix B
19
Agreement for the Provision of
Professional Services
WHEREFORE, this Agreement was entered into on the date set forth below and the undersigned, by execution hereof, represent that they are authorized to enter into this Agreement on behalf of the respective parties and state that this Agreement has been read by them and that the undersigned understand and fully agree to each, all and every provision hereof, and hereby, acknowledge receipt of a copy hereof.
City of Lake Elmo
3880 Laverne Avenue North
Lake Elmo, Minnesota 55042
Name
Title
Name
Title
Date
AEM Financial Solutions, LLC
5201 Eden Ave. Suite 250
Edina, Minnesota 55436
Name ______________________________
Title President and Partner
Date November 6, 2020
20