4.2. ERMUSR 11-15-2016 Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Theresa Slominski—Finance & Office
John Dietz—Chair Manager
Al Nadeau—Vice Chair
Daryl Thompson—Trustee
MEETING DATE: AGENDA ITEM NUMBER:
November 15, 2016 4.2
SUBJECT:
RFP Auditing Firm
BACKGROUND:
Last month we presented the results of the Auditing Firm RFP and our recommendation for
moving forward with the current firm of Abdo, Eick, and Meyers LLP (AEM). Keeping the
current auditors would be a cost neutral move for 2016, and an approximate $3,500 increase for
each of the remaining four years. Staff was tasked to bring back recommendations for cost
reductions of approximately $3,500 to offset the cost of retaining the current auditors in
accepting the AEM proposal from the RFP.
DISCUSSION:
For reference,the Utility rationale for keeping the current auditors is largely dependent on the
current transactions that we are invested in (the MMPA buy-in, the territory acquisition, and the
sale of the security division), which our current auditors have been very involved in helping us
plan for the implementation of these transactions and the financial reporting of them.
In reviewing forecasted expenses for potential savings there is a notable decrease in expenses for
our MMTG fees. Current and prior years have been approximately $12,000 and that is being
reduced to $5,900, a savings of$6,100 annually. In addition, as alluded to last month, we will be
receiving an increase in the revenue received through the MISO reporting with the recognition of
50% of our transformers as qualifying assets. This is projected to be approximately $154,095
per year starting in 2018. Both of these items would be sufficient to offset the $3,500 RFP
increase.
ACTION REQUESTED:
Approve the staff recommendation of retaining the existing auditors for the next five years.
ATTACHMENTS:
• 2016 Audit Proposals Pricing
• October 11, 2016 RFP Auditing Firm Memo
FN—ATURil
OWERED 0
Page 1 of 1
Reliable P13111C
Power Provider P o.4 E a E o To SERVE
Al
2016 AUDIT PROPOSALS
Hours 2016 2017 2018 2019 2020 Total
Abdo Eick&Meyers
City 230 31,800 33,400 34,100 34,800 35,500 169,600
CAFR Preparation 3,600 3,700 3,800 3,900 4,000 19,000
Total City 35,400 37,100 37,900 38,700 39,500 188,600
Utilities 120 16,016 16,500 17,000 17,500 18,000 85,016
Report Preparation 2,300 2,400 2,500 2,600 2,700 12,500
Total Utilities 18,316 18,900 19,500 20,100 20,700 97,516
Fire Relief w/Report 34 4,404 4,500 4,630 4,775 4,900 23,209
State Reporting Forms 1,000 1,030 1,060 1,090 1,125 5,305
Total Fire Relief 5,404 5,530 5,690 5,865 6,025 28,514
IRS Form 990 1,150 1,185 1,220 1,260 1,290 6,105
CliftonLarsonAllen
City 290 30,550 30,900 31,250 31,600 31,950 156,250
CAFR Preparation 4,000 3,500 3,600 3,700 3,800 18,600
Total City 34,550 34,400 34,850 35,300 35,750 174,850
Utilities 125 13,275 13,525 13,775 14,025 14,275 68,875
Report Preparation 1,900 1,950 2,000 2,050 2,100 10,000
Total Utilities 15,175 15,475 15,775 16,075 16,375 78,875
Fire Relief w/Report 35 4,545 4,700 4,850 4,950 5,100 24,145
State Reporting Forms 350 350 350 350 350 1,750
Total Fire Relief 4,895 5,050 5,200 5,300 5,450 25,895
Redpath&Company
City 295 33,025 33,600 34,300 34,900 35,600 171,425
CAFR Preparation 3,500 3,500 3,500 3,500 3,500 17,500
Total City 36,525 37,100 37,800 38,400 39,100 188,925
Utilities 115 14,000 14,200 14,500 14,800 15,000 72,500
Report Preparation 2,000 2,000 2,000 2,000 2,000 10,000
Total Utilities 16,000 16,200 16,500 16,800 17,000 82,500
Fire Relief w/Report 50 6,000 6,250 6,500 6,750 7,000 32,500
State Reporting Forms 500 500 500 500 500 2,500
Total Fire Relief 6,500 6,750 7,000 7,250 7,500 35,000
q2