1i Approval of AuditorsCITYOF
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i Chanhassen, Minnesota 55317
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MEMORANDUM
TO:
FROM:
DATE:
Mayor
City Council
Bruce M. DeJong, Finance Directo(~i
January 18,2001
SUBJECT: Approval of Auditors for Fiscal Years 2000-2002
In accordance with City Council direction, we solicited proposals from qualified
CPA firms to provide audit and consulting services for the next three fiscal years.
The five firms that provide the most audits of Minnesota cities responded to our
request for proposal. Those five proposals were reviewed by Scott Botcher, Todd
Gerhardt and me. Based on the proposals, including an analysis of the number of
staff hours and total cost, four firms were interviewed. The result of this process
is that staff is recommending the HLB Tautges, Redpath be engaged to audit the
City of Chanhassen and provide consulting service for the next three years.
The purpose of this memo is to advise the City Council of the process used to
recommend HLB Tautges, Redpath to audit the city for the next three years.
Several factors were given weight in the decision-making process. The first is the
amount of expertise available on each firms' staff relating to auditing and the
amount of focus that it takes of their practice. Another is the expertise related to
Tax Increment Financing (TIF) at each firm. The other factor given significant
weight is the number of hours and costs for performing the work.
Each of the firms has performed many municipal audits and have at least several
CPA's who have focused their career in the governmental accounting area. All of
the firms have sufficient staff to perform a credible audit of the city.
The TIF expertise is the area that the most differences were apparent. HLB
Tautges Redpath has, in the estimation of each of the interviewers, significantly
more experience in this area. They are also intimately familiar with our current
difficulties and have already provided significant consulting services to us in this
area.
ie Cig, of Chanhassen. A erowi, e community with dean lakes, aua/in, schools, a cha,nhw downtown, thrivin~ businesses, and beautiful oarks. ,4 ~reat'n/ace to live. work. and
Approval of Auditors for Fiscal Years 2000-2002
January 18, 2001
Page 2
The number of estimated hours varied greatly between the five firms, but the
hourly rates were more closely grouped. The proposals from HLB Tautges,
Redpath and MMRK most closely matched our experience over the last several
years. The proposals from Kern, DeWenter, Viere and Larson, Allen, Weishair
seemed low based on our understanding of the work and level of testing that the
City of Chanhassen desires. Deloitte & Touche was not interviewed based on
their estimate, which was 25% higher than the next highest estimate. With the
number of hours equalized at what we thought was a reasonable estimate, the total
dollar costs were not significantly different.
Based on the foregoing analysis, the committee did not see sufficient reason to
recommend another firm. While each of them would provide good service for the
audit, we believe it is in the city's best interest to continue the relationship with
HLB Tautges, Redpath.