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6 THE CITY OF LRT61 CITY COUNCIL AGENDA REPORT , March 16, 2021 Finance TITLE: APPROVE AN AGREEMENT WITH LANCE, SOLL & LUNGHARD, LLP (LSL) FOR AUDITING SERVICES SUMMARY State and Federal regulations and bond covenants require that an independent auditor conduct an annual audit of the City's financial records. Staff sent out a Request for Proposal for Professional Auditing Services in January 2021 and received seven proposals from qualified firms. Staff interviewed five of the firms and has determined that the most qualified firm is LSL. Staff is recommending that the Council award a three-year contract to them with an option to extend the contract for two years for a total of five years. AUDIT COMMITTEE RECOMMENDATION The Audit Committee (Committee) met on March 4, 2021 to review the proposed contract for auditing services with LSL and recommended City Council approval. RECOMMENDATION Staff recommends that Council approve a three-year contract with an option to extend the contract for two years for a total of five years with LSL and authorize the City Manager to execute the contract. FISCAL IMPACT LSL's proposed fees for the 5-year term total $368,971 and are as follows: 2021 2022 2023 2024 2025 Basic Reports $69,520 $70,911 $72,330 $73,776 $75,251 TDA 1,380 1,408 1,436 1,465 1,494 Total LSL Fees $70,900 $72,319 $73,766 $75,241 $76,745 The City's contract with Maze and Associates most recent comparable fees are $80,800. The Finance Department's FY 2021/22 Budget will include the funding for the annual audit. The proposed contract begins with the FY 2020/21 audit; however, the audit fees associated with that audit will be paid in the FY 2021/22.