Title
Adopt a Resolution to Approve and Authorize the City Manager to Execute Amendment No. 1 to the Consulting Services Agreement with KDC Accounting & Consulting, LLP for Preparation of the Annual Comprehensive Financial Report (ACFR), Other Required Annual Financial Reports, and Payroll Support for an Additional $50,000 for a Not-to-Exceed Amount of $175,000
Staffreport
SUMMARY
Staff recommend City Council approve Amendment No. 1 to a Consulting Services Agreement (CSA) with KDC Accounting & Consulting, LLP for accounting services necessary to prepare the Annual Comprehensive Financial Report (ACFR) and Other Required Annual Financial Reports, implement recommendations to improve internal controls, and provide payroll support. City Council approval of KDC CSA Amendment No. 1 will increase the one-year not-to-exceed amount from $125,000 to $175,000 for the current year’s contract.
RECOMMENDATIONS
Staff recommend City Council adopt a resolution to approve Amendment No. 1 to the CSA with KDC Accounting & Consulting, LLP for a one-year term and increase the do not-to-exceed amount from $125,000 to $175,000.
BACKGROUND
On April 7, 2025, with Resolution No. 2025-031, City Council approved a CSA with KDC Accounting & Consulting, LLP to provide accounting services necessary to prepare the Annual Comprehensive Financial Report (ACFR) and Other Required Annual Financial Reports, and implement recommendations to improve internal controls.
Prior to 2025, KDC provided lead support to the Finance Department in preparing the ACFR and other required annual financial reports due to significant turnover in the Finance Department. This background has provided key experience with the City of San Leandro’s financials to facilitate timely delivery of annual financial reporting and provide other support within the Finance Department due to staff turnover.
Analysis
Staff recommend City Council approve Amendment No. 1 to the CSA with KDC Accounting & Consulting LLP due to the firm’s expertise in governmental accounting and familiarity with the City’s systems, policies, and procedures, which have helped minimize deficiencies in internal controls and produce a timelier ACFR.
Due to the recent vacancy in the Payroll Specialist position, the City requested assistance from KDC to provide payroll services to ensure that there was no lapse in the City’s payroll process. Based on KDC Accounting & Consulting, LLP’s background providing support in the Finance Department, including payroll support, the firm possessed the experience to immediately provide support in this area to ensure timely payroll processing.
Council approval will increase the not-to-exceed amount from $125,000 to $175,000 (an increase of $50,000). In addition to the increase of $50,000 to the original contract, this action includes the amendment of Section 2.4 Reimbursable Expenses. The additional $50,000 reflects a potential reimbursable expense through the end of the contract term of April 2026.
Section 2.4 Compensation - Reimbursable Expenses
Add: Pre-approved reimbursement of expenses with a not-to-exceed amount of $1,500
As key vacant positions are filled, the need for external accounting and payroll services will be significantly reduced.
Legal Analysis
The City Attorney’s Office has approved the amendment to form and the consultant has agreed to the terms of the contract.
Financial Impacts
Sufficient funds are included in the FY 2026 Finance Department operating budget through salary savings associated with the vacant Senior Accountant and Payroll Specialist positions. Therefore, this Council action will not impact the General Fund undesignated fund balance.
ATTACHMENTS
A: Draft Resolution: Amendment No. 1 to CSA with KDC Accounting & Consulting
B: Amendment No. 1: KDC CSA Exhibit A and Exhibit B
C: KDC Original CSA
PREPARED BY: Nicole Gonzales, Finance Director, Finance Department