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29 MEMORANDUM DATE: August 12, 2014 TO: Mark Casey, City Manager FROM: Shelly Rueckert, Finance Director ITEM: Redpath and Company 2014-2015 Engagement letter Redpath and Company, (formerly HLB Tautges Redpath, Ltd) has prepared the attached engagement letter for the 2014 and 2015 audit and preparation of the Comprehensive Annual Financial Reports (CAFR). Please note the following: • The contracted price for 2011-2013 audit services was $47,225 annually. • The above price included an annual Audit Management Letter. • The current proposal is $47,000 and $49,000 for 2014 and 2015 audit. The 2015 audit anticipates implementation of GASB 68. (Pension liabilities). • Preparation of the audit management letter would add $2,000 to the cost of each Audit. The proposed 2014 audit cost presents a 3.75% increase over the audit only cost from 2011. Therefore the annual increase to arrive at the 2014 cost equals a 1.25% increase. The rate increase required by Tautges has been mitigated by Staff preparing more required workpapers in- house. Upon review of the Audit Management Letter and discussion with the audit partner I recommend preparation of this letter be eliminated. Much of the information contained in the audit letter is a restatement of the CAFR information. Additionally this information is incorporated through -out the year in annual staff reports, setting of utility rates, budget process and the review of annual transfers and fund closures. The finance annual report will be expanded to include key information such as fund balance, cash and investments, and HRA activity. Based on the above I would recommend that we accept the engagement letter as prepared.