For City Council Meeting July 22, 2025
TO: Honorable Mayor and City Council
FROM: Tanya Williams, City Manager
AUTHOR: Scott Williams, Director of Finance
Title
Request City Council to: (1) Approve a Three-Year Professional Services Agreement for Independent Audit Services to The Pun Group, LLP in the Amount of $269,854 With Two Optional One-Year Extensions, and (2) Authorize the City Manager to Execute all Related Documents.
(ACTION)
Body
RECOMMENDATION
Staff recommends that the City Council:
1) Approve a Professional Services Agreement with The Pun Group, a Limited Partnership in the amount of $269,854 for an initial term of three years, with the option to renew for an additional two years based on satisfactory performance; and,
2) Authorize the City Manager to execute all documents.
BACKGROUND
Each year the City requires an independent audit of its financial records. Recently, the City used the services of Lance, Soll and Lunghard, LLP (LSL) to perform the annual audit of the City’s financial statements for the last three Fiscal Years 2021-22, 2022-23, and 2023-24. The contract with LSL has expired, and the City does not intend to exercise its option for an extension. Staff initiated a Request for Proposals (RFP 25-025) process in April 2025 to select a new auditing firm commencing with the Fiscal Year 2024-2025 annual audit.
ANALYSIS/DISCUSSION
The City released RFP No. 25-025 with a deadline date of April 25, 2025, and published the Notice Inviting Proposals on the City of Rialto’s website as well as on the PlanetBids website. In response to the RFP, the City received two proposals from the following firms, listed in alphabetical order:
• Macias Gini & O’Connell, LLP
• The Pun Group, LLP
Finance staff reviewed and evaluated the submitted proposals based on technical qualifications, relevant experience, customer service focus, pricing, and references from similar engagements. Based on this evaluation, staff determined that both firms met the minimum qualifications and were eligible to advance to the City’s panel interview process for further consideration.
The proposals were assessed based on the following criteria:
• Proposer’s understanding of the RFP and ability to meet the scope of work.
• Proposer’s ability to meet City deadlines for transition from the current Auditors.
• Proposer’s ability to provide pre-audit and post-audit support.
Based on their assessments, the panel recommends that the City Council select The Pun Group as the auditing firm for this engagement. The panel concluded that The Pun Group submitted the most responsive proposal and demonstrated the highest level of knowledge, qualifications, and understanding of recent regulatory and industry developments. Pun Group staff members are involved with the California Society of Certified Public Accountants (CalCPA), American Institute of Certified Public Accountants (AICPA), and California Municipal Finance Officers Association (CSMFO). This expertise will benefit the City in its implementation of changes to reporting requirements.
The Pun Group proposed a total fee of $269,854 for the annual audit over a three-year period, which is consistent with the range of fees proposed by other auditing firms ($260,883 to $269,854). Although The Pun Group's proposal represents the highest fee within that range, the panel determined that The Pun Group is the most qualified firm, and it is the staff’s recommendation that an agreement with said firm be awarded pursuant to RMC 2.48.440.
ENVIRONMENTAL IMPACT
The request is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. According to Section 15378(b), a Project does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
GENERAL PLAN CONSISTENCY
The request is consistent with Guiding Principle 3A of the Rialto General Plan:
Our City government will lead by example, and will operate in an open, transparent, and responsive manner that meets the needs of the citizens and is a good place to do business.
LEGAL REVIEW
The City Attorney has reviewed and approved this staff report and contract.
FINANCIAL IMPACT
Operating Budget Impact
Audit services are compensated in the fiscal year following the year being audited. Accordingly, the first budget year of the contract will be fiscal year 2025-2026, which will cover audit services for the fiscal year ending June 30, 2025. Funds are budgeted and available in General Fund Account No. 10102150-52011.
Capital Improvement Budget Impact
The proposed action will not affect the Capital Improvement Budget.
Licensing
Prior to execution of the Professional Service Agreement, The Pun Group shall submit a business license application and pay a Business License tax at the applicable rate, as well as Administration and State fees.