REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Action on an Agreement for Professional Services with KPMG, LLC to provide auditing services for the Santa Clara Stadium Authority
Report
BACKGROUND
The Credit Agreement, entered into between the Santa Clara Stadium Authority (SCSA), Stadium Funding Trust (FinanceCo), and Goldman Sachs Bank USA on March 28, 2012, requires that the Stadium Authority file audited annual financial statements within 180 days after the end of each fiscal year. It further requires that the financial statements be audited by a nationally recognized independent certified public accounting firm (also known as the "Big Four") selected by the Stadium Authority.
In 2012, the SCSA issued a request for proposal (RFP) for professional audit services to perform the annual financial statements audit and received six proposals. After a rigorous scoring and interview process, Staff selected KPMG LLP to perform the audit services and the Santa Clara Stadium Authority Board approved a three-year contract with the firm on November 27, 2012. An amendment to the agreement for a one-year extension was approved on March 30; 2016 by the Executive Director of the Stadium Authority. On April 11, 2017, the Santa Clara Stadium Authority Board (Board)approved a one-year contract with KPMG LLP for audit services. Subsequently, the SCSA issued an RFP for audit services in September 2017 and KPMG was the only firm that provided a response. The Executive Director approved a one-year contract on May 31, 2018.
DISCUSSION
The current contract with KPMG for audit services has expired. The SCSA fiscal year ended on March 31, 2019 , and the audit should be scheduled as soon as possible. Staff issued a formal RFP in November 2018 for audit services. Staff also contacted each of the Big Four accounting firms to determine if they would be interested in submitting a proposal for audit services. All of the firms declined except for KPMG LLP. Considering the time constraints associated with the end of the fiscal year and the potential for negatively impacting the audit schedule, staff recommends that the SCSA enter into a two-year contract with KPMG LLP for audit services.
ENVIRONMENTAL REVIEW
This Agreement is for professional services and the action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act ("CEQA") Guidelines section 15378 as the action being considered does not commit the City to undertake the project and future discretionary approvals are required by the City to approve the project for construction.
FISCAL IMPACT
The proposed Agreement is for a two-year term. KPMG will conduct the external financial audit in the fiscal year ending March 31, 2019 for a not to exceed amount of $104,000 with fixed contractual amount for the following fiscal year. The total cost of the contract over the two years will not exceed $208,000. The cost of the fiscal year 2018/19 audit is budgeted in the fiscal year 2019/20 Stadium Authority Operating Budget. Appropriations in future year will be requested and approved through the annual budget process.
COORDINATION
This report has been coordinated with the Stadium Authority Counsel and Executive Director.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Approve and authorize the Executive Director to execute an agreement for professional services between the Santa Clara Stadium Authority and KPMG LLP to perform the annual financial audit for the Santa Clara Stadium Authority for FY 2018/19 and FY 2019/20 in the amount not-to-exceed $208,000.
Staff
Reviewed by: Linh Lam, Auditor
Approved by: Deanna J. Santana, Executive Director
ATTACHMENTS
1. Agreement for Professional Services