GASB 34 Planning firmMEMORANDUM
February 25, 2002
TO:
FROM:
SUBJECT:
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
GASB 34 Planning and Implementation Assistance
A committee was formed to provide a recommendation for hiring a consultant to provide
GASB 34 Planning and Implementation Assistance to the City of Dubuque. The
committee consisted of Administrative Services Manager Pauline Joyce, Finance
Director Ken TeKippe, Assistant Finance Director Dawn Lang, Information Services
Manager Chris Kohlmann, Civil Engineer Mike Feldermann, Street/Sewer Maintenance
Supervisor John Klosterman and Water Distribution Supervisor Mike Brekke. Six
proposals were received, and after interviewing two firms, the committee recommends
that that the firm of Virchow, Krause & Company be retained for GASB 34 planning and
implementation assistance.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
MJchael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Ken TeKippe, Finance Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
TO:
FROM:
SUBJECT:
DATE:
Michael Van Milligen, City Manager
Ken TeKippe, Finance Director
GASB 34 Planning and Implementation Assistance
February 28, 2002
A Request for Proposal (RFP) was recently developed relative to providing GASB 34
Planning and Implementation Assistance to the City of Dubuque. The RFP was
distributed to eight firms. Six firms submitted quality proposals in response to the
invitation. The firms that submitted proposals included: American Appraisal Associates,
Inc., Carter & Burgess, Eide Bailly LLP, MAXIMUS, Inc., RSM McGladrey, Inc., and
Virchow, Krause & Co. The Valuation Advisory Group, inc. and CarteGraph Systems ''
did not respond with a proposal.
A committee was established to review the proposals, interview selected firms and
provide a recommendation. The committee included Administrative Services Manager
Pauline Joyce, Assistant Finance Director Dawn Lang, Information Services Manager
Chris Kohlmann, Civil Engineer Mike Felderman, and myself. After reviewing the
proposals, two firms were invited to Dubuque for interviews. The firms interviewed
included MAXIMUS, Inc. and Virchow, Krause & Company. Both firms would be able to
adequately serve as our GASB 34 advisor based on the interviews. John Klosterman,
Street/Sewer Maintenance Supervisor and Mike Brekke, Water Distribution Supervisor
were added to the interview team.
The interviews were concluded on Tuesday, February 19. It was the consensus of the
committee that Virchow, Krause & Company be retained for GASB 34 planning and
implementation assistance. Phone reference checks were conducted on the firm.
Factors that assisted in our selection included:
* Size of firm with considerable staff experience assigned to team
· Experience working with Government Accounting Standards Board (GASB)
· Proximity to Dubuque (Madison office to provide service)
· Quality of presentation and questions asked during the interview and clarification
letter received subsequent to interview
Perceived ease of working with primary individuals assigned to City
· Number of their clients have already implemented GASB 34
Extensive experience in capital asset management
· Proposal in line with RFP
Copies of the RFP and Virchow, Krause & Company's proposal, their executive
summary distributed at the interview, and their subsequent clarification letter are
enclosed. It would be beneficial to notify the firm selected of the decision soon since
work needs to begin on the project.
If there are any questions on the process or recommendation, the committee and/or I
would be available to review. Your approval to proceed would be appreciated. Thank
you.
KT/gm
Enclosures
CITY Of DUBUQUE, IOWA
REQUEST FOR PROPOSAL
January 11, 2002
GASB 34 PLANNING AND IMPLEMENTATION ASSISTANCE
GENERAL
The City of Dubuque is seeking proposals to provide GASB 34 planning and
implementation assistance. Qualified firms are invited to submit a proposal in the format
outlined in this Request for Proposal (RFP). The City of Dubuque is required to
implement GASB 34 for the year ending June 30, 2003.
THE CITY
The City of Dubuque with a population of approximately 60,000 comprises an area of
approximately 27 square miles in northeastern Iowa. The City's annual operating budget
is approximately $65 million with the City providing a full range of services. Additional
information on the government can be found in the enclosed Comprehensive Annual
Financial Report (CAFR) for the fiscal year ended June 30, 2001 (letter of transmittal,
pages 4-14, organizational chart, page 15 and note 1, page 29).
BASIS OF AWARD
A review committee of City staff will evaluate proposals based upon written responses
to the RFP, the respondent's qualifications in serving governmental clients, past
GASB 34 planning and implementation assistance, number of GASB 34 financial
statements issued (if applicable) and proposed fees. Strategic planning is the immediate
City need. The City may schedule interviews with prospective firms. The City may reject
any or all proposals if, in the opinion of the City, they do not meet the City's
requirements.
SUBMISSION DEADLINE
Five (5) copies of the written proposals must be received no later than 5:00 p.m., Friday,
February 1,2002. The proposals should be addressed to:
Mr. Ken TeKippe, Finance Director
City of Dubuque
50 West 13th Street
Dubuque, Iowa 52001-4864
The City of Dubuque anticipates award of the contract to the successful firm for the
project by February 22, 2002. Questions concerning this RFP may be addressed to
Ken TeKippe at 563-589-4133.
City of Dubuque
RFP for GASB 34 Planning and Implementation Assistance
January 11, 2002
Description of Firm
Please provide a description of your firm including, at a minimum the following:
When the firm was established
Location of the firm's main office and other offices and number of
employees
Name of project manager with qualifications and experience, as well as
names, qualifications and experience of key personnel who would be
associated with the project
Statement of Qualifications
Please provide a statement of your firm's qualifications, at a minimum the following:
Experience in similar projects - minimum three references
Firm's ability to integrate project into present workload
Anticipated Timeline for Project
February 2002 through June 2003 for scope of services detailed in RFP, with continued
limited involvement through September 2003. Provide preliminary timeline based on
services listed below.
Project Team
City of Dubuque employees in Finance, Information Services, and Public
Works/Engineering Departments will work with representatives of firm retained. City
staff will provide sufficient time to assist firm on the project. Key individuals will be: Ken
TeKippe, Finance Director; Dawn Lang, Assistant Finance Director; Chris Kohlmann,
Information Services Manager; Mike Felderman, Civil Engineer; and other Public
Works/Engineering employees as deemed appropriate.
Scope of Services
Assist City with developing a strategic plan for meeting the variety of
policy decisions and timelines necessary to comply with GASB 34
Meet with City project team as required
Outline options and provide a written plan of key action steps
Provide general oversight of the implementation process
Meet with City audit firm to confirm the City's plan meets their needs
Update the processes used to gather data and report on all fixed assets
reportable under GASB 34 in the general fixed asset account group to
include current depreciation expense as well as accumulated depreciation
on those assets as of the beginning of the implementation year, June 30,
2002 and forward
Work with the City to develop processes to be followed to accumulate
necessary information for street infrastructure, which would include both
streets and curb and gutter
Work with the City to develop processes to be followed to accumulate
necessary information for other infrastructure assets, including storm
sewers, sidewalks, bridges, street lights, and other relevant categories.
Meet with City engineers on the data required to develop infrastructure
information and a determination if the current data sources (i.e. GIS) are
adequate.
Assist in developing methodology to assign useful lives, costs, and
depreciation computations on all infrastructure assets reportable under
GASB 34
Assist in determining if additional or alternative fixed asset accounting
software is required by City to implement GASB 34
Assist in reviewing the potential need/desire to utilize an appraisal or
valuation firm for aid in establishing historic cost
Assist in evaluating potential need for utilizing an asset management
company to create an accurate data base (assume 20 hours)
INSURANCE
Firm selected shall adhere to insurance requirements for professional services as
detailed by the insurance schedule
FEES
Proposed fees (range acceptable) should be detailed by major segments of services
OTHER
The firm selected may be retained at a later date to provide additional assistance in
areas such as (do not include in proposed fees at this time):
> Provide advice and/or format for management discussion and analysis
section of the new financial statement format
> Assist in designing a system or process needed to convert government
fund financial statements to the full accrual basis of accounting
> Design and develop procedures and forms necessary for annual updates
to the infrastructure asset information.
> Make recommendations on how the current GIS could be integrated for
long-term asset management.
INSURANCE SCHEDULE C
INSURANCE REQUIREMENTS FOR PROFESSIONAL SERVICES
All policies of insurance required hereunder shall be with an insurer authorized to
do business in Iowa. All insurers shall have a rating orA or better in the current
A.M; Best Rating Guide.
All policies of insurance required hereunder shall be endorsed to provide a thirty
(30) day advanced notice to the City of Dubuque of any cancellation of the policy
prior to its expiration date. This endorsement supersedes the standard
cancellation statement on the Certificate of Insurance.
shall furnish Certificates of Insurance to the
City of Dubuque, Iowa for the coverage required in Paragraph 7. Such
certificates shall include copies of the endorsements set forth in Paragraphs 2
and 5 to evidence inclusion in the policy, shall
also be required to provide Certificates of Insurance of all subcontractors, and all
sub-subcontractors who perform work or services pursuant to the provisions of
this contract. Said certificates shall meet the same insurance requirements as
are required of
Each Certificate of Insurance shall be submitted to the contracting department of
the City of Dubuque, Iowa prior to commencement of work/service, (The
contracting department shall submit the certificates to the Finance Director.)
All policies of insurance required in Paragraph 7 shall include the City of
Dubuque, Iowa under the attached Additional Insured Endorsement (CG2026)
and the attached Governmental immunities Endorsement.
Failure to provide evidence of minimum coverage shall not be deemed a waiver
of these requirements by the City of Dubuque. Failure to obtain or maintain the
insurance required herein shall be considered a material breach of this
agreement.
, subcontractors, and all sub-subcontractors
shall be required to carry the following minimum insurance coverages or greater
if required by law or other legal agreement:
PROFESSIONAL LIABILITY:
$1,000,000
COMMERCIAL GENERAL LIABILITY:
General Aggregate Limit
Products-Completed Operation Aggregate Limit
Personal and Advertising Injury Limit
Each Occurrence Limit
Fire Damage Limit (any one occurrence)
Medical Payments
$ 2,000,000
$1,000,000
$1,000,000
$1,000,000
$ 50,000
$ 5,000
INSURANCE SCHEDULE C
INSURANCE REQUIREMENTS FOR PROFESSIONAL SERVICES
All policies of insurance required hereunder shall be with an insurer authorized to
do business in Iowa. All insurers shall have a rating of A or better in the current
A.M. Best Rating Guide.
All policies of insurance required hereunder shall be endorsed to provide a thirty
(30) day advanced notice to the City of Dubuque of any cancellation of the policy
prior to its expiration date. This endorsement supersedes the standard
cancellation statement on the Certificate of Insurance.
shall furnish Certificates of Insurance to the
City of Dubuque, Iowa for the coverage required in Paragraph 7. Such
certificates shall include copies of the endorsements set forth in Paragraphs 2
and 5 to evidence inclusion in the policy, shall
also be required to provide Certificates of Insurance of all subcontractors, and all
sub-subcontractors who perform work or services pursuant to the provisions of
this contract. Said certificates shall meet the same insurance requirements as
are required of
Each Certificate of Insurance shall be submitted to the contracting department of
the City of Dubuque, Iowa prior to commencement of work/service. (The
contracting department shall submit the certificates to the Finance Director.)
All policies of insurance required in Paragraph 7 shall include the City of
Dubuque, Iowa under the attached Additional Insured Endorsement (CG2026)
and the attached Governmental Immunities Endorsement.
Failure to provide evidence of minimum coverage shall not be deemed a waiver
of these requirements by the City of Dubuque. Failure to obtain or maintain the
insurance required herein shall be considered a material breach of this
agreement.
., subcontractors, and all sub-subcontractors
shall be required to carry the following minimum insurance coverages or greater
if required by law or other legal agreement:
PROFESSIONAL LIABILITY:
$1,000,000
COMMERCIAL GENERAL LIABILITY:
General Aggregate Limit
Products-Completed Operation Aggregate Limit
Personal and Advertising Injury Limit
Each Occurrence Limit
Fire Damage Limit (any one occurrence)
Medical Payments
$ 2,000,000
$1,000,000
$1,000,000
$1,000,000
$ 50,000
$ 5,000
Commercial general liability shall be written on an occurrence form, not a claims
made form. Coverage to include premises-operations-products-completed
operations, independent contractors coverage, contractual liability, broad form
property damage, and personal injury.
UMBRELLA OR EXCESS LIABILITY:
To include professional liability.
$1,000,000
PO~JCY N~M~E~ COMMERCIAL GF-NERAL LiA~I~T~
TM~$ENOOE$£M£NT CHANGES THE ~OMCY. ~£~SE ~EAO IT CAE£~JLLY.
ADD ONAL NSUEED - OE GNATED PERSON OE
OEGANIZA ON
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART.
SCHEDULE
Name of Person er Organiz~'~on:
The Cl~y of Dubuque, includin~ all its electe~ an~ appointed officials,
all. los em~loTees and volunteers, all its boards, co~ssions anti/or
auChorigles an~ Chair board members, e=ploTees, and volunteers.
'.I
(Il' no ent~7 appears above, information required to complete this endorsement will be shown in the
Declarations as applicable to this endorsement.)
WHO IS AN INSURED (Section tl) is amended to include as an insured the person or organization shown
in the Schedute as an insured but only with respect to liability arising out of your operations or premises
owned by or rented to you.
CG 20 21~ 11 8~
CITY OF DUBUQUE, IOWA
GOVERNMENTAL IMMUNITIES ENDORSEMENT
Nonwaiver of Governmental Immunity. The insurance carder expressly agrees and
states that the purchase of this policy and the including of the City of Dubuque, Iowa
as an Additional Insured does not waive any of the defenses of governmental
immunity available to the City of Dubuque, Iowa under Code of Iowa Section 670.4
as it is now exists and as it may be amended form time to time.
~ The insurance carrier further agrees that this policy of insurance
shall cover only those claims not subject to the defense of governmental immunity
under the Code of Iowa Section 670.4 as it now exists and as it may be amended
from time to time. Those claims not subject to Code of Iowa Section 670.4 shall be
covered by the terms and conditions of this insurance policy.
Assertion of Government Immunity.. The City of Dubuque, Iowa shall be responsible
for asserting any defense of governmental immunity, and may do so at any time and
shall do so upon the timely written request of the insurance carrier.
Non-Denial of Coverage. The insurance carrier shall not deny coverage under this
policy and the insurance carrier shall not deny any of the rights and benefits
accruing to the City of Dubuque, Iowa under this policy for reasons of governmental
immunity unless and until a court of competent jurisdiction has ruled in favor of the
defense(s) of governmental immunity asserted by the City of Dubuque, Iowa.
No Other Change in Policy. The above preservation of governmental immunities shall
not otherwise change or alter the coverage available under the policy.
Proposal for GASB 34 Strategic Planning Services
City of Dubuque
Virchow~ Krause
~tcompany
Virchow, Krause & Company, LLP
Ten Terrace Court
P.O. Box 7398
Madison, Wisconsin 53707-7398
800.362.7301
Email: mlake@virchowkrause.com
Internet: virchowkrause.com
Michael D. Lake, CPA, Partner
Proposal for GASB 34 Strategic Planning Services
City of Dubuque
V~rchowKrause
~c"o~panv
Virchow, Krause & Company, LLP
Ten Terrace Court
P.O. Box 7398
Madison, Wisconsin 53707-7398
800.362.7301
Emaih mlake@virchowkrause.com
Internet: virchowkrause.com
Michael D. Lake, CPA, Partner
January 30,2002
Table of Contents
Transmittal Letter
1. Description of Firm
2. Project Team
3. Qualifications
4. References
5. Scope of Services
6. Project Timeline
7. Insurance
8. Project Investment
1
3
4
10
12
18
19
19
Appendix A. Resumes 20
January 29, 2002
V rchowKrause
company
Mr. Ken TeKippe, Finance Director
City of Dubuque
50 West 13th Street
Dubuque, IA 52001-4864
Dear Mr. TeKippe:
We are pleased to have this opportunity to submit a proposal to provide GASB 34
planning and implementation assistance to the City of Dubuque. Our proposal is
based on the Request for Proposal, our meeting with you and our prior experience in
providing these services to other communities.
GASB 34 has been called the largest change ever to take place in governmental
accounting and reporting standards. At Virchow, Krause & Company, LLP, we have
been actively involved with GASB 34 since its inception and have dedicated
tremendous resources to helping our clients understand and implement this
significant reporting change. Our efforts to date include:
· Forming a task force prior to the release of GASB 34 to determine how to
implement the statement in the most efficient manner.
· Designing solutions to facilitate GASB 34 infrastructure reporting.
· Planning and implementing GASB 34 for four clients in conjunction with their
December 31, 2000 financial audits.
· Providing planning and implementation assistance to cities including a large
project with Saint Paul, Minnesota.
Our extensive experience with GASB 34 uniquely positions Virchow, Krause &
Company to help the City navigate the challenges associated with GASB 34, as well
as to realize the strategic management benefits associated with improved financial
information.
As you evaluate our proposal, there are several important factors to consider which
distinguish Virchow, Krause and Company, LLP from other firms:
Commitment. Virchow, Krause & Company, LLP has a long-standing tradition and
solid reputation for providing high quality consulting and accounting services to the
public sector. To illustrate that commitment, our Public Sector Practice Group
consists of over 100 professionals devoted entirely to serving public sector clients.
Virchow, Krause & Company, LLP · Certified Public Accountants & Consultants
Mr. Ken TeKippe, Finance Director
City of Dubuque
January 29, 2002
Page 2
Experience. We understand the needs and issues that local governments face. This
comes from our continuing relationship with over 200 municipalities and 260 public
utilities. We have performed the variety of services included in this proposal for many
of our clients. This experience will allow us to bring insights to this engagement that
will assist the City of Dubuque in achievin9 a GASI3 Statement 34 implementation that
meets your strategic needs.
Effectiveness. Our experience allows us to serve you in a cost effective and timely
fashion. We are committed to completing this project in an efficient manner, so you
will have the information needed to make critical decisions and achieve timely
compliance.
Depth of Resources. Members of the proposed project team have extensive prior
public sector accounting and consulting experience, including implementation
assistance. Our team brings the wealth of financial, technical and management
experience required by this project. As a team, we will provide you with critical
information and recommendations necessary to achieve implementation objectives.
Independence. We are required to maintain independence in our evaJuations,
analysis and reporting. Further, we have no provider relations that could impede our
ability to provide independent analysis. This is a critical component that separates us
from other firms and will assure management that we will identify all pertinent issues
in an unbiased manner.
We appreciate the opportunity to submit this proposal and would welcome the
opportunity to discuss specific aspects of it If you have any questions or need
additional information, please contact me at 800.362.7301, ext. 2351. We look
forward to working with you on this important project.
Sincerely,
VIRCHOW, KRAUSE & COMPANY, LLP
Michael D. Lake, CPA, Partner
MDL/dh
Enclosure
Section 1: Description of Firm
The City of Dubuque is wise to seek
assistance implementing GASB
Statement 34. The qualifications of the
firm you select will be a critical factor
in achieving successful
implementation. At Virchow, Krause &
Company, we have extensive
experience with GASB Statement 34,
having been actively involved with
GASB Statement 34 since its inception
and having dedicated tremendous
resources to helping our clients
understand and implement this
significant reporting change. This
experience, coupled with the depth of
resources we bring to this
engagement, will directly benefit the
City of Dubuque. We will lead an
implementation effort designed not
only to achieve compliance, but also
designed to capitalize on strategic
benefits and address the challenges
associated with GASB Statement 34.
As a licensed certified public
accounting firm, our goal at Virchow,
Krause & Company, LLP is to help our
clients succeed. As one of the
Midwest's oldest and largest regional
certified public accounting and
consulting firms, we have a long
history of commitment to ensuring our
clients' complete satisfaction. Founded
in 1931, the firm now includes 900
total associates, including 105
partners/principals and 640
professionals in offices throughout
Minnesota and Wisconsin. We are
ranked as the 14th largest consulting
and accounting firm in the United
States, and the largest in Wisconsin
according to the 2001 Public
Accounting Report's "Top 100." One
cornerstone of our success has been
our commitment to delivering the
highest quality services to our
extensive list of public sector clients.
To best serve the City of Dubuque, we
will staff this project from our public
sector practice group based in
Madison, Wisconsin. Our commitment
to helping our clients succeed is
reflected in this specialized public
sector practice group. Our public
sector group consists of over 100
professionals dedicated entirely to
serving public sector clients. Created
in 1969, the public sector group
provides various consulting, auditing,
implementation and accounting
services to approximately 600 clients,
including 200 municipalities, 25
counties, 260 municipal utilities, 75
school districts, several state
agencies, and 34 colleges and
universities. As a result of our
specialized focus, our staff
understands the unique issues public
sector agencies face and has the
experience to find effective solutions.
Included in the proposed project team
are: 2 partners, 1 manager and 1
senior accountant. All team members
are certified public accountants.
The range of services we provide to
our public sector clients is as varied
and extensive as our clients' needs. As
you will see detailed with our
experience and knowledge discussed
in Section 3, we provide public sector
financial and accounting services
ranging from financial audits to policy
and procedure development and GASB
Implementation Assistance. Our
consulting and technology services are
equally varied, and include
management reviews, hardware and
software selection implementation and
training. Our public sector focus allows
us to achieve a breadth and depth of
service that meets our clients' varied
accounting, consulting, and systems
service needs. We have the blend of
accounting, consulting, and technology
experience necessary to assist the
City in achieving compliance with
GASB 34 that meets strategic
objectives.
Proposal For City of Dubuque
-1-
As a large regional firm with an
extensive public sector accounting and
consulting practice, we can provide a
project team that meets all the
requirements of the request for
proposals. Virchow, Krause &
Company, LLP has been providing
public sector accounting and financial
services for over thirty years. The
professionals in our public sector
practice group are focused entirely on
the public sector and are extremely
involved in providing GASB 34
assistance to our clients. The people
included on your project team all have
extensive public sector and GASB 34
experience.
In the final analysis, our philosophy
and reputation for providing quality
service should be a major contributing
factor in your evaluation of our
proposal. We think our reputation and
public sector commitment, coupled
with the strategic advantages of our
approach outlined in Section 5,
position us to successfully provide
GASB 34 Implementation Consulting to
the City of Dubuque. As outlined in
more detail in Section 3, there are
several qualities of Virchow, Krause &
Company, LLP that we feel uniquely
qualify us to assist the City in
achieving its strategic objectives in
implementing GASB Statement 34:
· We are leaders in local government
accounting and financial reporting
with a solid reputation for
delivering high quality public sector
consulting and accounting
services.
· We offer a project team whose
members have extensive
experience with GASB Statements,
and specifically, GASB 34.
· We have extensive experience with
financial accounting systems, ad-
hoc report writer software, and
analysis/spreadsheet applications.
We offer a project team with
significant experience delivering
training and implementation
assistance in new accounting
programs.
We are independent and have no
provider relations that could
impede our independence.
The City will directly benefit from the
experience and knowledge that
Virchow, Krause & Company, LLP
brings to the engagement. Our
expertise and our integrated approach
will address the City's needs to
achieve compliance with GASB 34 and
to maximize the value of
implementation.
Proposal For City of Dubuque
-2-
Section 2: Project Team
In developing our project team we
have included teaders within our firm in
the area of GASB 34 services and
governmental financial reporting. The
team leaders identified will have
hands-on project involvement and be
on-site at the City as we provide our
services.
The members of our project Team are
all members of the Public Sector
Services Group of Virchow, Krause
and Company, LLP. These people
have specialized throughout their
careers in providing accounting,
auditing and consulting services to
municipal governments. In addition the
team leaders are members of the VK
GASB 34 Task Force and have been
involved in research, presentations
and implementation projects. We are
confident that this team will provide
high quality GASB 34 implementation
assistance and solutions to the City.
Following are the team leaders who
will provide services to the City. More
detailed resumes are provided in
Appendix A.
Michael D. Lake, CPA, Partner
Mr. Lake has been with VK for 16
years and has specialized in providing
audit and consulting services to
municipal governments throughout his
career. He is a member of the VK
GASB 34 Task Force and has done
numerous presentations on the effects
of GASB 34. He is a team leader that
is providing GASB 34 implementation
services to the City of Saint Paul and
has been involved in the issuance of 2
GASB 34 early implementation
financial statements. Mr. Lake is
licensed as a CPA in the states of
iowa and Wisconsin.
successful completion. Mr. Lake will
also be the team leader for the
strategic planning aspect of this
project.
Carla A. Ballweg, CPA, Manager
Ms. Ballweg has 9 years of experience
in the VK Public Sector Services
Group. She is responsible for the
annual audits of several large cities
and counties. She is a member of the
VK GASB 34 Task Force and is our
firm leader in the area of capital asset
and infrastructure issues. Carla has
provided GASB 34 implementation
strategic planning services to
governments including Dane County,
Baraboo, and Stevens Point,
Wisconsin. She is currently working
with the City of Saint Paul to develop
GASB 34 capital asset and
infrastructure solutions.
Ms. Ballweg will be the team leader
providing capital asset and
infrastructure gap analysis and
implementation recommendations for
this project.
Donald L. Rahn, CPA, Partner
Mr. Rahn has over 25 years of
governmental accounting experience.
He is a long-time Government Finance
Officer's Association CAFR review
committee member and is the leader of
the VK Public Sector Accounting and
Auditing Committee, as well as serving
on the VK GASB 34 Task Force.
Mr. Rahn's technical expertise and
experience will benefit the City and
this project as a colleague partner who
will provide technical advice and
guidance.
Mr. Lake will be the Partner-In-Charge
of this project and will have overall
responsibility for the project's
Proposal For City of Dubuque
-3-
Section 3: Qualifications
GASB 34 has been called the largest
change ever to take place in
governmental accounting and reporting
standards. You can assure yourself
and the City of a smooth transition to
the new standards by relying on our
GASB 34 team for assistance. We are
and will continue to be leaders on
GASB 34 related issues. With our
substantial client base of governments,
we are doing everything we can to
meet their needs.
Our initial response to GASB 34 was to
set up a task force within our Public
Sector Group. The members of this
task force are very active in dealing
with the many issues and challenges
GASB 34 provides.
Early on, we reviewed the exposure
draft of GASB 34 and raised numerous
issues to GASB staff for consideration.
Later, we were involved with reviewing
the eaHy drafts of the implementation
guide and provided questions to GASB
which are included in the final
document.
in the summer of 2000, our task force
went through a prototype conversion of
actual client financial statements from
1999 to the GASB 34 format. In
addition, we developed the templates
to complete several client conversion
projects as of December 31, 2000.
This resulted in several client financial
statements issued in 2001 which are
GASB 34 compliant. Working on this
project with us were Terry and Suesan
Patton, former staff members of GASB.
Terry was responsible for the
infrastructure section of 34, and
Suesan was in charge of the MD&A
section. We worked directly with them
to assist VK in understanding the
GASB's thinking and goals in these
important areas:
By the time the City of Dubuque
converts to GASB 34, we will have
gained further experience. In addition
to the 4 Iocat governments converted
as of December 31, 2000, we also
expect several clients to implement for
December 31, 2001.
In addition, our conversions planned
for December 31, 2002 include four
Phase 1 counties and one Phase 1
city. This kind of hands-on experience
with similar units of government will
make your learning cu[ve that much
shorter, saving you time and money
compared to other firms.
We were selected to assist the City of
Saint Paul, Minnesota with its GASB
34 implementation. This project
includes a customized, detailed
implementation manual and
implementation assistance. We have
provided on-site training sessions for
City staff and developed a matrix
prioritizing critical implementation
issues. We are currently starting a
project with the City to develop
infrastructure records.
One of the results of our efforts has
been ongoing communication. We
have written numerous articles about
GASB 34 in our public sector
newsletter. We have a GASB 34
section on our web site which has links
to those newsletters as well as a
question and answer section. We invite
anyone to submit their questions to our
web site where they will be handled by
our task force. Our goal is to provide
as much helpful information as
possible to those who can use it.
Several of our articles have been
published on a national level.
In addition to newsletters, our task
force has been very active with
speaking on GASB 34. In just the past
18 months, we have been asked to
speak at over 25 engagements. These
include numerous engagements in the
Midwest as well as several national
seminars.
Proposal For City of Dubuque
-4-
How do we stay on the teading edge of
these issues? We seek out every
available source of information which
might benefit you. For example, at the
AICPA National Governmental
Conference in October 2000, we
attended 24 hours of GASB 34
training. This included personal
discussions with Guyman, Oklahoma
which implemented GASB 34 for 1999.
We also benefited from discussions
with their auditor who was present.
Another approach we used was to
have two employees of the Department
of Transportation visit our task force to
educate us on the technical aspects of
infrastructure construction and costing.
Our ongoing work with Terry and
Suesan Patton has added a lot of
insight into GASB'S reasoning when
the rules where developed, which
helps us all to implement the ru~es
properly.
Another source of assistance is the
GASB board itself. We have had a long
on-going relationship with GASB board
member Paul Reil~y ever since we
started auditing the City of Madison in
1988 where Mr. Reilly was the
controller. That relationship continues
today, and gives us the unique ability
to calt Mr. Reilly and gain further
insights into the GASB's logic and
discussion on some of the specific
rules. In fact, Paul ReiHy recently
completed a training seminar for
Virchow Krause public sector
employees.
The new rules not only impact your
financial statements, they also pose
challenges for the audit opinion. The
American Institute of CPA's (AICPA)
has a group designated to design and
enforce proper opinion language to be
used by auditors. That group is headed
by Mary Foelster of the AICPA in
Washington, DC. We have enjoyed
working with Ms. Foelster on these
issues. She was especially helpfu~ in
educating us on the variety of
possibilities for opinion language
during the Y2K phase of disclosures.
Proposal For City of Dubuque
You can be sure of top level advice
should any interesting issues come up
affecting the auditors' opinion in any
way.
In conclusion, we have had a strong
and continuous effort in staying on top
of GASB 34 issues as they emerge.
We believe we are a leading authority
in this regard. Not just one expert, but
several are available to you on a daily
basis, and we're not located far away,
but nearby in Madison to serve you
better. Whether it's a phone call, an
e-mail, or a face-to-face meeting, we
can meet your needs with fast and
accurate guidance on GASB 34 issues.
Project Integration
Due to the large size of our firm and
public sector practice, we are able to
provide a project team that will
complete this engagement in a timely
manner. Currently, our public sector
department annually provides
approximately 150,000 hours of
professional services covering the
range of services noted above. Each
team member has ongoing
responsibility for a number of recurring
services such as annual audits. Each
member also provides significant
services on specialized projects such
as those requested by the City. Based
on the expected scope and staffing, we
anticipate that this project will require
approximately 200 hours of
professional time over a four to six
month period. While each team
member will be affected differently,
their schedules will be adjusted as
required to meet your needs. As a
regional firm, we understand that the
cornerstone of our success has been
our reputation for delivering the
highest quality services. We are
committed to maintaining this
reputation by providing responsive,
timely and quality services that will
assist the City of Dubuque to
successfully implement GASB 34.
-5-
GASB 34 Strategic Planning
Assistance:
We are fortunate to have specific
experience in providing GASB 34
strategic planning assistance that will
be an excellent fit for the needs of the
City. We are currently involved in
several projects that are very similar to
the engagement described in your
RFP. We have worked with four of our
clients to implement GASB 34 for the
12/31/00 year end. We also conducted
a prototype conversion for the
12/31/9g financial statements. In
assisting with implementation, we have
had numerous planning meetings with
our clients to ensure that strategic
considerations attendant to GASB 34
implementation are addressed. As a
result, we have developed GASB 34
implementation work plans to address
each client's unique situation. These
clients include:
· City of Grafton
· City of Beaver Dam
· Village of Pleasant Prairie
· Green Bay Metropolitan Sewerage
District
In addition, we are also currently in the
process of developing GASB 34
implementation strategic plans for the
City of Stevens Point, Rock County,
the City of Baraboo and Dane County.
Additional GASB 34 Implementation
Assistance:
We are providing GASB 34
implementation assistance for several
units of government. These projects
include all conversion entries, system
adaptations, and production of pro
forma financial statements compliant
with GASB 34. Our experience
identifying financial system and
reporting requirements associated with
GASB is coupled with experience
developing, implementing, and
installing adaptations to a windows
based software to meet those
requirements. One of these
adaptations included development of a
fully integrated asset and project
management module with capabilities
of integrating with a Geographic
Information System.
These projects are reflective of our
commitment to becoming a leading
authority on GASB 34 implementation.
Our position on the leading edge of
GASB 34 is reflected in the extensive
array of speaking engagements we
have completed.
Speaking engagements relative to
GASB 34:
· Wisconsin County Finance Officers
Association: December 2001
· Wisconsin Municipal Clerks' and
Treasurers' Institute: July 2001
· Wisconsin Counties Association:
May 2001
· WI County Human Services
Financial Managers Conference:
May 2001
· IL State Treasurers' Association:
April 2001
· University of Wisconsin Extension
ETN: March 2001
· WI Public Works Association:
November 2000
· Caselle: National Software Users
Conference: October 2000 and
October 2001
· WI Towns Conference: October
2000
· Municipal Treasurers' Association:
March 2000
Our commitment to the public sector is
evidenced in our regular delivery of
specialized training seminars in timely
topics. We have provided GASB 34
training at multiple seminars
sponsored or co-sponsored by
Virchow, Krause & Company, LLP.
Proposal For City of Dubuque
Seminars in GASB 34:
Virchow Krause/Robert W. Baird
School Seminar: October 2000
* Virchow Krause Fall Municipal
Seminar: October 2000
· Virchow Krause Utility Seminar:
May 2000
· Virchow Krause Fall Tools
Seminar: November 1999
The wide circulation of articles we
have written on GASB Statement 34
further evidences our expertise.
Articles on GASB 34:
· The Municipality**: January 2002
Choosing the Modified Approach or
Depreciation Method
· The Municipality**: January 2002
Understanding the GASB 34
Modified Approach
· WRWA Journal: Winter 2002 GASB
34 Strategic Planning
· The Municipality**: April 2001
Capital Asset Reporting
· ' The Municipality: September 2000
Requirements of Government Wide
Financial Statements
· The Municipality: May 2000
Management Discussion and
Analysis
· idaho Municipal News: January
2000 Overview and Timetable of
GASB 34
· The Municipality: December 1999
Overview and Timetable of GASB
34
** The Municipality is a publication of
the Wisconsin League of
Municipalities.
These articles were reprinted from
quarterly newsletters, Utility Lines
and Muncipal Lines, we provide our
clients, reflecting our commitment to
training and educating our clients' in
financial reporting requirements.
Articles we have produced for these
newsletters include:
· Utility Lines: Fall/Winter 2001
GASB 34 Modified Approach for
Utilities
· Municipal Lines: Spring/Fall 2001
GASB 34 Strategic Planning
· Utility Lines: Spring/Summer 2001
GASB 33 and 34
· Municipal Lines: Winter/Spring
2001 GASB 34 Capital Asset
Reporting
· MunicipalLines: Summer/Fall 2000
Requirements of Government Wide
Financial Statements
· UtilityLines: Spring/Summer 2000
The Effects of GASB 34 on Utilities
· Municipal Lines: Winter/Spring
2000 Requirements of the MD&A
· MunicipalLines: Summer/Fall 1999
Overview and Timetable for GASB
34.
· We also have an area of our web
site dedicated to informing and
instructing our clients on GASB 34
issues.
The range of services we provide our
public sector clients reflects our
mission of serving as our public sector
clients' most valued advisor, and is as
varied and extensive as our clients.
Our specialized public sector focus
allows us to achieve a breadth and
depth of service that meets our clients'
Proposa~ For City of Dubuque
-7-
varied accounting, consulting, and
technology needs. These services
include the following:
Accounting Services:
· Financial Audits and Accounting
· Compliance Audits
· Long-Range Planning
· Accounting Systems Evaluation
· Policy and Procedure
Development
· GASB' Statement 34
Implementation Assistance
· Budgeting Assistance
· Financing Assistance
· Compilations and Reviews
· Fraud Auditing
· Treasury and Cash Management
Operational Services:
· Management Reviews
· Organizational Studies
· Fiscal Impact Analysis
· Strategic Planning
· Workflow Analysis
· Performance Measurement
· Executive Recruitment
Technology Services:
· Feasibility Studies and Needs
· Assessment
· Hardware and Software Selection,
Implementation, and Training
· Long-Range Systems Planning
· Management Information Systems
Development
At Virchow, Krause & Company, LLP,
we recognize that a highly
knowledgeable and experienced
project team is critical to the success
of an engagement such as that
requested by the City of Dubuque.
Our specialized public sector focus
allows us to propose a project team
with a wealth of experience applying
generally accepted accounting
principles for governmental entities.
Our client list of over 200
municipalities and 260 municipal
utilities includes audit services to
many of the largest municipalities in
Wisconsin. These include the cities of:
Appleton Janesville Sheboygan
Beloit Kenosha Stevens Point
Brookfield Madison Waukesha
Eau Claire Neenah Wauwatosa
Fond du Lac New Berlin West Bend
Franklin Qak Creek
Greenfield Racine
Aisc included in our public sector audit
experiences are services to several
clients in Iowa and Minnesota. Our
experience also includes 25 Wisconsin
counties, including Dane, Waukesha,
Eau Claire; and Fond du Lac counties.
Our vast experience delivering quality
audit services is reflected in the
Government Finance Officers'
Association reliance on us to review
applications for the award for
excellence in financial reporting. Our
firm has been supporting the GFOA
effort for many years, reviewing
CAFRS and assessing the extent to
which financial reporting standards are
met. Don Rahn has reviewed over 200
CAFR's during the last 20 years. Thus,
we are not only actively engaged in
applying GAAP standards for local
governments, but we also assist the
GFOA to evaluate others' achievement
of those standards.
Proposal For City of Dubuque
-8-
In the past year, we have also assisted
our clients with making their CAFR's
available on their web sites. To
demonstrate our ability to assist our
clients in achieving the highest
standards in financial reporting,
following is a list of current clients
who received the GFOA certificate
of achievement during the years that
Virchow, Krause & Company, LLP
conducted the audit:
Clients Who Received the GFOA Certificate of Achievement
Client Name
Waukesha County
Winnebago County
City of Appleton
City of Janesville
City of Neenah
City of Eau Claire
Village of Howard
Village of Germantown
City of Kenosha
Oak Creek Water & Sewer Utilities
Village of Grafton
Green Bay Metropolitan Sewerage District
City of Brookfield
City of Franklin
Village of Little Chute
City of Fond du Lac
Waukesha County Technical College
Years
Receiving
Award
9
6
4
6
5
6
2
12
4
5
7
3
3
7
5
5
1
Our expertise in the standards is
fostered by our public sector focus.
Every public sector staff member
works with 15-30 local governments
annually, developing an in-depth
understanding of the range of issues
important to our clients. For the City of
Dubuque, we can deliver a project
team with competent staff, depth of
experience, and substantial expertise
in all financial areas of the City. We
understand the complexity of financial
accounting and reporting in a
municipal environment; our employees
work year round in this highly technical
area and do not work in other areas
such as commercial audits or tax
return preparation.
Proposal For City of Dubuque
-9-
Section 4: References
This section of our proposal presents a listing of references for whom Virchow,
Krause & Company, LLP has performed GASB 34 services.
Client:
Project Team Leaders:
Project Title:
Project Description:
Contact:
Client:
Project Team Leaders:
Project Title:
Project Description:
Contact:
Client:
Project Team Leaders:
Project Title:
Project Description:
Contact:
Cfient:
Project Team Leaders:
Project Title:
Project Description:
Contact:
Village of Pleasant Prairie, Wisconsin
Mike Lake, Calla Ballweg
GASB 34 Implementation
Implementation assistance to achieve GASB 34
compliance, including system adaptations,
production of financial statements, and
conversion entries. Early implemented 12/31/00
Ms. Kathy M. Goessl, Finance Director
262.694.1400
City of Beaver Dam, Wisconsin
Mike Lake, Carla Ballweg
GASB 34 Implementation
Implementation assistance to achieve GASB 34
compliance, including system adaptations,
production of financial statements, and conversion
entries. Developed infrastructure process and
records. Early implemented 12/31/00.
Mr. John Somers, Finance Director
920.887.4606
City of Saint Paul, Minnesota
Don Rahn, Mike Lake, Carla Ballweg, Vicki
Hellenbrand
GASB 34 Implementation Services
Developed comprehensive implementation
manual. Provided training sessions to City staff.
Developed matrix of strategic issues and action
steps. Will be providing capital asset solutions
and actual implementation assistance.
George Splichal, Financial Services Accountant
651.266.8819
Village of Grafton, Wisconsin
Don Rahn, Klm Tredinnick
GASB 34 Implementation, CAFR
implementation assistance to achieve GASB 34
compliance including conversion adjustments and
financial statement assistance. Early implemented
12/31/00.
Shirley Ritger, Finance Director
262.375.5300
Proposal For City of Dubuque
-10-
Client:
Project Team Leaders:
Project Tit/e:
Project Description:
Contact:
Green Bay Metropolitan Sewerage District
Vicki Hellenbrand
GASB 34 Implementation
Implementation assistance to achieve GASB 34
compliance including conversion adjustments and
financial statement assistance. Early iml:
12/31/00.
Tim Woodworth, Accounting Supervisor
920.438.1054
Client:
Project Team Leaders:
Project Title:
Project Description:
Contact:
Client:
Project Team Leaders:
Project Title:
Project Description:
Contact:
Client:
Project Team Leaders:
Project Tit/e:
Project Description:
Contact:
Client:
Project Team Leaders:
Project Tit/e:
Project Description:
Contact:
Rock County, Wisconsin
Mike Lake
GASB 34 Strategic Planning Services
Developed plan identifying strategic issues and
action steps. Provided informational orientation
session to governing finance committee.
Jeff Smith, Finance Director
608.757.5534
Stevens Point, Wisconsin
Carla Ballweg
GASB 34 infrastructure Strategic Planning
Services
Developed matrix of strategic issues and action
steps related to capital asset issues.
John Schlice, Comptroller
715.346.1574
Dane County, Wisconsin
Carla Ballweg
GASB 34 Strategic Planning Services
Developed GASB 34 strategic plan and action
steps.
Charles Hicklin, Controller
608.266.4109
Baraboo, Wisconsin
Carla Ballweg
GASB 34 Strategic Planning Services
Developed GASB 34 strategic plan and action
steps.
Cheryl Giese
608.355.2700
Proposal For City of Dubuque
-11-
Section 5: Scope of Services
Project Overview
GASB 34 represents the first time
financial statements will be designed
to enable users to determine whether
the government's overall financial
position improved or deteriorated from
year to year, and whether revenues
were sufficient to cover the cost of
providing services each year.
The far-reaching changes associated
with GASB 34 affect not only how
governments account for their activity,
but also the degree of accountability to
their citizens. GASB Statement 34 is
designed to increase accountability by
providing more useful and easily
understandable information to a more
divergent group of users of financial
statements. The City's implementation
of the new standards will not only
significantly change financial reporting,
but could also fundamentally change
the way citizen's perceive the City's
financial status. Our experience has
shown that the nature of the GASB 34
reporting changes necessitate
implementation that achieves more
than compliance with the standard;
successful implementation of GASB 34
requires strategic positioning to
address the challenges and benefits
that come with those changes. Our
significant experience with GASB 34,
coupled with our extensive knowledge
of municipal financial reporting, will
enable us to successfully assist the
City in managing the risks and
achieving the benefits of GASB 34
implementation.
GASB 34 implementation will require a
substantial commitment of the City's
resources. We can help you ensure
that this dedication of resources yields
maximum benefit to the City, not only
by facilitating an efficient
implementation to minimize costs, but
also by identifying strategic uses for
the additional information captured,
and navigating potential challenges
and risks of implementation.
The City can realize many benefits
from implementing GASB 34. We can
help identify strategic uses for the new
information maintained to meet the
requirements of the standard, such as:
· Demonstrating accountability to
your citizens
· Providing justification for resources
dedicated to infrastructure
maintenance and construction
· Identifying management
information to promote enhanced
organizational efficiency and
effectiveness.
While there are many benefits of the
standard, there are also challenges of
which the City will need to be aware.
We can identify those areas that pose
the greatest challenge to the City in
obtaining compliance with the
standard. In addition, our experience
with GASB 34 and its effects will allow
us to identify potential areas for risk,
identify and advise the City of options
to mitigate that risk, and develop an
implementation plan that addresses
those risks where possible. For
example, our extensive knowledge of
GASB 34 will facilitate early
identification of potential risks such as:
Potential effects on the perceived
overall financial position of the City
(such as a reduced equity
position).
Risks and implications of policy
decisions associated with GASB 34
(such as depreciation vs. the
modified approach for reporting
infrastructure).
Proposal For City of Dubuque
-12-
In areas where you have policy options
in implementation, we will identify
those options and provide
recommendations as to how to limit the
associated risks to the City. While
some components of GASB Statement
34 may expose the City to a risk but
offer no latitude in implementation, we
can help you minimize potential
ramifications through early
identification of these items. This early
identification will allow the City to
manage these risks through such steps
as identification of communication
requirements for the investors who
purchase your bonds, as well as
educational needs of other external
users of your statements such as your
policymakers and citizens. We can
provide a range of educational
assistance - from guidance in crafting
narrative portions of your financial
report to actual GASB 34 information
sessions for City Council members.
We therefore broadly define the City's
goal in obtaining assistance with
planning and implementation as
follows:
To plan for the efficient transition to
financial statements consistent with
GASB 34 in a manner that positions
the City to realize the strategic/
management advantages and
minimize the risks attendant to
implementation,
The ability of the City to accomplish
this goal will depend partially on
factors such as the City's current
political environment, financial
position, and infrastructure condition.
However, if selected for this project,
we can leverage our extensive
knowled9e of both GASB Statement 34
and municipal finance to:
· Position the City to realize
benefits of implementation
· Minimize the risks associated
with implementation
· Minimize costs associated with
implementation without
jeopardizing compliance or
capability to capture value
added improvements
Our approach is designed to provide
implementation services that will have
long-lasting benefits, providing value
to the City long beyond the conclusion
of this engagement. Because we work
with so many units of government, we
are very aware of the many concerns
and hurdles that can occur in this
process. Our ability to draw on our
practical experience with other
governments will help you avoid the
significant time and effort of
"reinventing the wheel". Our
specialized public sector focus and
ongoing relationships with GASB staff
provide the broad perspective
necessary to ensure successful
achievement of project objectives.
Overall Approach and
Rationale
From a planning perspective, the
GASB 34 effort may be one of the
single largest projects to impact your
Finance Department. The City is wise
to consider an outside consultant in
implementing GASB 34. Our
aggressive approach to understanding
GASB 34 has rapidly made us an
industry leader in educating local
governments regarding the intent,
implications and requirements of the
Statement, and in assisting to
implement GASB 34. We feel that
Proposal For City of Dubuque
-13-
this understanding, coupled with our
hands-on experience with similar
projects and dedication of senior staff
to this engagement positions Virchow,
Krause & Company to successfully
assist the City with strategic
implementation of GASB 34.
Our understanding of the Statement is
reflected in our project approach,
which will ensure that our efforts are
coordinated and demands on City staff
time are minimized. We balance the
need to analyze the City's strategic
position from a broad perspective with
a need to analyze and develop specific
procedures and processes. This
approach is based on years of
experience providing accounting and
consulting services to a wide range of
municipal governments and utilities.
Our proposed project workplan
includes a preliminary fact-finding or
diagnostic phase that will allow us to
identify the specific needs of the City
of Dubuque. The first component of
this fact-finding phase will focus on the
City's readiness from a central
perspective. This component will focus
on the finance department, and will
provide an overview of the City's
current practices, policies and
procedures, and assess the impact of
any decentralized record-keeping on
GASB 34 implementation. The second
diagnostic component, a global
department readiness assessment, will
allow us to evaluate various
departments' current capital, financial
and technology issues, policies,
procedures, and needs as they relate
to GASB 34 implementation.
Our approach is comprised of various
phases and tasks we believe provide
the foundation for meeting your needs
and implementation objectives.
However, our approach is flexible.
During the initial project planning: we
may determine, in conjunction with the
City, that modifications to this
approach may be necessary. Our
intent is to work with the City to solidify
the most desirable approach, prior to
initiating the engagement, to ensure
the highest quality service.
We have prepared a high-level
workplan to address the scope of
services identified in the City's
Request For Proposals: The approach
detailed below will allow us to achieve
the following components requested in
the scope:
Overall Strategic Planning
Services
Assist City with developing a
strategic plan for meeting the
variety of policy decisions and
timelines necessary to comply
with GASB 34
,/ Meet with City project team as
required
· / Outline options and provide a
written plan of key action steps
,/ Provide general oversight of
the implementation process
v' Meet with City audit firm to
confirm the City's plan meets
their needs
Capital Asset Process
Recommendations
Update the processes used to
gather data and report on all
fixed assets reportable under
GASB 34 in the general fixed
asset account group to include
current depreciation expense
as well as accumulated
depreciation on those assets
as of the beginning of the
implementation year, June 30,
2002 and forward
Proposal For City of Dubuque
-14-
'/ Work with the City to develop
processes to be followed to
accumulate necessary
information for street
infrastructure~ which would
include both streets and curb
and gutter
~' Work with the City to develop
processes to be followed to
accumulate necessary
information for other
infrastructure assets, including
storm sewers, sidewalks,
bridges, street lights, and other
relevant categories
v' Meet with City engineers on the
data required to develop
infrastructure information and a
determination if the current
data sources (i.e. GIS) are
adequate
~ Assist in developing
methodology to assign useful
lives, costs, and depreciation
computations on all
infrastructure assets reportable
under GASB 34
· / Assist in determining if
additional or alternative fixed
asset accounting software is
required by City to implement
GASB 34
,/ Assist in reviewing the potential
need/desire to utilize an
appraisal or valuation firm for
aid in establishing historic cost
'/ Assist in evaluating potential
need for utilizing an asset
management company to
create an accurate data base
(assumes 20 hours)
Project Work Plan
I. Project Planning
Our experience has shown that careful
planning and needs definition is critical
to ensuring that client expectations are
met. Accordingly, we will begin the
Proposal For City of Dubuque
-15-
project with a planning phase, during
which we will:
· Gather relevant background
materials and data for
preliminary review
· Finalize a list of persons to be
interviewed
· Meet with the City's project
liaison to finalize the workplan
We will work with the City's appointed
implementation steering committee.
Our experience with similar
implementations indicates that a
steering committee is a powerful tool
for communication and sharing lessons
learned. We recommend that this
committee, to be comprised of the
project liaison, representatives of
departments and the VK project
manager, meet to discuss the status of
the project and assist in early
identification of implementation
barriers.
II. Fact-Finding and Diagnostic
Review
During this component of the project,
we will gain an understanding of the
City's current processes, policies,
procedures and technology. We will
review background information
including documents such as:
· CAFR
· Budget documents
· Capital improvement plan
· Fixed asset reports
· Sampling of accounting system
reports
· Current auditors' workpapers
· Year-end reconciliations
performed by the City
· Policy and procedural
memoranda
· Position descriptions for
financial services and agency
financial/accounting staff
· Organization chart for financial
services
· Current chart of accounts
A. Central Finance Department
Assessment
In this assessment, we will evaluate
the City's readiness to implement
GASB 34 from a central finance
department perspective. We will
evaluate those areas common to all
agencies by reviewing:
· Current fund structure
· Current budget structure
· Centralized processes and
procedures
· Central financial reporting and
accounting systems
· Fixed asset system
The purpose of this review will be to
analyze, from a central perspective,
the City's current accounting structure
(information that is tracked, individuals
who track the information, etc) to
identify gaps between the current and
desired (i.e., GASB 34 compliant)
states.
B. Global Department Assessment
We will also conduct a global
department assessment. In this
phase we will build on the
central finance department
assessment, identifying specific
department issues related to
the technical, capital, and
financial components of GASB
34 implementation.
III. GAP Analysis
We will conduct a gap analysis to
determine specifically what the City
requires to implement GASB 34. This
analysis will identify implementation
requirements or changes to your
current systems and processes. We
will leverage our extensive knowledge
of the Statement and financial
Proposal For City of Dubuque
-16-
reporting requirements to identify gaps
between GASB 34 requirements and
your current systems, policies,
processes, and information tracking.
During this phase, we will determine
the method in which the City can move
to the new reporting model. We will
identify required projects that the City
will need to complete and will provide
recommendations to guide the City in
navigating policy issues. For all
relevant changes in procedure, we will
maintain communication with the City's
auditor to ensure their acceptance of
the proposed changes.
Deliverable for Task II1: Strategic plan
identifying policy decisions, action
steps and timelines necessary to
comply with GASB 34.
IV. Capital Asset Process
Development
In order to meet the new financial
reporting requirements of GASB 34,
the City will be required to report the
balances and related depreciation on
capital assets including infrastructure.
As part of the Gap Analysis described
in Task III we will identify the current
processes and information available
for capital assets. This will include a
review of current data sources
(including GIS records).
We will work with the City and provide
recommendations to update processes
related to general fixed assets and the
requirement to report current and
accumulated depreciation. We will
work with the City and provide
recommendations for the development
of new processes related to street and
other infrastructure records (such as
storm sewers, sidewalks, bridges,
streetlights and curb and gutter).
Our recommendations will include
assisting in the development of
methodology to assign useful lives,
costs and depreciation for
infrastructure assets. We will also
provide recommendations regarding
additional or alternative fixed asset
accounting software needs.
We will assist the City in reviewing the
need or desire by the City to utilize an
appraisal or valuation firm for
assistance in establishing capital asset
historic cost records.
We will also assist the City in
evaluating the potential need for
utilizing an asset management
company to create a capital asset
database (we have assumed 20 hours
for this task as stated in the RFP).
Deliverables for Task IV: Report of
detailed recommendations for capital
asset processes and solutions to
comply with GASB 34.
V. Optional Add-On Phase
The City's Request for Proposals
identified additional GASB 34
assistance that may be requested in
the future. This assistance included:
· Provide advice and/or format
for management discussion
and analysis section of the new
financial statement format
· Assist in designing a system or
process needed to convert
government fund financial
statements to the full accrual
basis of accounting
· Design and develop procedures
and forms necessary for annual
updates to the infrastructure
asset information
· Make recommendations on how
the current GIS could be
integrated for long-term asset
management
We have performed these services for
other cities and are well prepared to
perform them for the City of Dubuque.
These services are not included in the
proposed fees included in this
proposal. Performance of these
additional services would be covered
by an addendum to the agreement for
the currently proposed project.
VI. Presentation of Work Product
From Phase I
We will make a presentation to City
staff on the Strategic Plan, its impact
on the City, and implementation
requirements.
Proposal For City of Dubuque
-17-
Section 6: Project Timeline
Following is a timeline for completion of the tasks we have identified in our approach
and workplan:
X =roject Planning
=act-Finding and
X X ~)iagnostic Review
X X Sap Analysis
,~apital Asset
X Recommendations
Meeting with City to
X Review Strategic Plan
General implementation
oversight (as needed
Proposal For City of Dubuque
-18-
Section 7: Insurance
Virchow, Krause & Company, LLP shall adhere to insurance requirements for
professional services as detailed by the insurance schedule provided with the RFP by
the City.
Section 8: Project Investment
We will provide assistance to the City in GASB Statement 34 strategic planning and
capital asset process development. The estimated fee for the project will be:
GASB 34 Strategic Plan development
Capital asset process review and recommendations
Assistance reviewing the City's need or desire to use an
appraisal firm for capital asset records
Assistance evaluating the City's need for utilizing an asset
management company to create capital asset records
Clerical time and out of pocket expenses
Estimated Fees
$12,000 - 15,000
10,000 - 12,500
2,000 - 3,000
2,000 - 3,000
3,000 - 4,000
The project fee is a not-to-exceed
amount. We will only bill the City for
actual hours and expenses incurred.
This not-to-exceed fee is based on the
project scope as outlined in this
proposal and in the request for
proposal. Should the project scope
change, we will discuss the effect on
the above quoted price
before proceeding with additional
services.
Out-of-pocket expenses are based on
our anticipated costs for clerical time,
travel, copies and telephone.
Estimated engagement costs are
based on the following hourly rates:
Partner: $215
Manager: $165
Senior Accountant: $115
Proposal For City of Dubuque
-19-
Proposal For City of Dubuque
APPENDIX A
Michael D. Lake, CPA
Mr. Lake is a partner in the Public Sector Practice Group of our Madison office.
Mr. Lake has been associated with Virchow, Krause & Company, LLP since 1985.
SPECIFIC EXPERIENCE:
· Coordinating and conducting annual auditing and accounting services for
more than 20 Wisconsin municipalities.
· Responsible for coordinating and conducting the annual audits of two
counties.
· CPA licensed in Iowa.
· Providing auditing and accounting services for 2 private colleges and 1
city in Iowa.
· Member of the Virchow, Krause & Co. LLP GASB 34 task force which is
studying the impacts and implementation of this new reporting standard.
· Participated in completion of 2 GASB 34 financial statement early
implementation projects.
· Team leader for City of Saint Paul, Minnesota GASB 34 implementation
planning project.
· Providing consulting and auditing services for tax incremental financing
districts including completion of compliance and financial audits,
projections of future financial results and implementation of TID
accounting systems.
· Preparation of annual regulatory reports for Wisconsin municipalities.
· Analyzing governmental budgets and developing strategies to improve
budget information and presentation.
· Assisting in the development of fund accounting systems.
· Providing governmental accounting training to governmental units.
· Developing long-range financial projections for municipalities.
· Completing audits of state and federal aid programs.
· Assisting governmental units with understanding state aid programs and
preparing strategies to maximize aid received.
· Reviewing and preparing Comprehensive Annual Financial Reports
which have been awarded a Certificate of Achievement for Excellence in
Financial Reporting.
INDUSTRY INVOLVEMENT:
· Member of the American Institute of Certified Public Accountants and the
Wisconsin Institute of Certified Public Accountants.
· Speaker on accounting and financial reporting topics including GASB 34.
EDUCATION:
· Bachelor of business administration degree from the University of
Wisconsin-Madison.
Proposal For City of Dubuque
-20-
Carla A. Ballweg, CPA
Ms. Ballweg is a manager in the Public Sector Practice Group of Virchow, Krause &
Company, LLP. Ms. Baltweg has over nine years of experience in governmental
accounting, auditing and consulting.
SPECIFIC EXPERIENCE:
,, Managing annual audit engagements of numerous cities, villages, towns
and municipal electric, water and sewer utilities in Wisconsin.
· Manager-in-charge of the accounting and consulting services to the
Southeast Wisconsin Professional Baseball Park District (Miller Park)
since 1996
· Member of the Virchow, Krause & Company, LLP GASB #34 task force.
· Involved in 2 GASB 34 early implementation projects.
· Providing GASB 34 planning and infrastructure consulting to several
governments.
· Developing accounting policies and procedures manuals for
municipalities and utilities.
· Performing compliance and financial audits of Tax Incremental Financing
Districts.
· Providing long-range financial forecasts and budgeting assistance to
municipalities.
· Reviewing and providing recommendations for municipal court
operations.
· Designing the methodology and rate structure for municipal and utility
impact fees.
· Assisting municipalities with implementing various Governmental
Standards Board Pronouncements.
PROFESSIONAL DEVELOPMENT:
· Member of the American Institute of Certified Public Accountants and a
member of the Wisconsin Institute of Certified Public Accountants.
· GFOA Certificate of Achievement Review Committee
Speaker on accounting and financial reporting topics, including GASB
34, to a variety of organizations including the Municipal Treasurer's
Association of Wisconsin, University of Wisconsin-Extension, and
various Virchow, Krause & Company, LLP sponsored presentations.
· Author of municipal and GASB #34 articles.
INDUSTRY INVOLVEMENT:
· Member of the Wisconsin institute of Certified Public Accountants and
the American Institute of Certified Public Accountants.
EDUCATION:
· Graduated with a bachelor of business administration degree from the
University of Wisconsin-Madison.
Proposal For City of Dubuque
-21-
Donald L. Rahn, CPA
Mr. Rahn is a partner in the Public Sector Practice Group in Madison. He has over
twenty-six years of governmental accounting experience with Virchow, Krause &
Company, LLP.
SPECIFIC EXPERIENCE AND PARTNER IN CHARGE OF:
· Audits of numerous counties, cities, villages, towns, and non-profit
organizations in the State of Wisconsin and Illinois.
· Developing formal budget procedures, preparing annual budgets, and
the designing and implementing of financial systems.
· TIF compliance audits including questions on allowable costs, long-
range planning and bond proceeds consulting.
· GASB 34 task force, including strategic planning for client
implementation.
· Special cash audits for municipalities.
· Assisting municipalities in developing long-range cash and debt
management programs, including multi-year capital planning and fiscal
impact analysis of annexation proposals.
· Audits of federal and state aid programs.
INDUSTRY INVOLVEMENT:
· Member of the American Institute of Certified Public Accountants,
Wisconsin Institute of Certified Public Accountants, Government Finance
Officers Association
· GFOA Certificate of Achievement Review Committee
· WICP^: Government Subcommittee - Chairman, Transportation/Revenue
Committee - Chairman, Ad Hoc Committee Chairman - Security
Registration, Legislative Audit Bureau Committee - Chairman, Public
Interest Committee - Chairman, Competence Review Committee, and
Competence Aid Committee
· G.R.A.T.E. - Review Committee, Technical Standards Committee, Board
of Directors
· Wisconsin Governors TIF task force and Tax 16 task force
· Speaker on accounting and financial reporting to Wisconsin Department
of Revenue - GAAP Reporting Advisory Committee, Wisconsin Clerk,
Treasurers and Finance Officers Institute, Wisconsin Municipal Clerks
Association - various districts, Various WICPA Seminars, UW-Green Bay
Clerk-Treasurers Certification Program, Southwest Wisconsin and
Gateway VTAE Instructor, Wisconsin Counties Association and
numerous Virchow, Krause & Company, LLP sponsored presentations
· Board of Directors/Treasurer - Wisconsin Chamber Orchestra
EDUCATION:
Bachelor of business administration and a masters of business
administration degree in accounting from the University of Wisconsin-
Madison.
Proposal For City of Dubuque
-22-
CitY of Dubuque
GASB 34 Planning and Implementation Assistance
Executive Summary
since GASB 34's initial inception, Virchow, Krause & Company, LLP has been actively involved
in learning, understanding and helping clients implement the new reporting standard. We feel our
public sector and GASB 34 experience will benefit the City of Dubuque as you implement this
important change. The following outlines significant factors about our firm, our GASB 34
experience, and our approach to your project:
OUR FIRM
Large regional firm with prominent, well-respected public sector practice team
· 14th largest* CPA and consulting firm in the United States.
· Public sector practice group includes over 100 professionaIs focused entirely on serving
public sector clients.
· Solid reputation for delivering high quality public sector consulting and accounting services.
· Senior, knowledgeable personnel with hands-on experience selected for this project.
· Experienced firm offering accounting, auditing, and a variety of consulting services.
· Extensive public sector client list-- nearly 600 including:
200 municipalities, 260 utilities, 75 school districts, 34 colleges & universities,
and 26 counties
· Leaders in local government accounting and financial reporting.
· [ndepth knowledge ~f Comprehensive Annual Financial' Report preparation. 17 current clients
receive GFOA Certificate of Achievement. Lor~g-time CAFR review committee participation.
· Independent-- no provider relations to impede.our review of alternatives.
· Our mission is to serve as your most valued advisor.
*According to the 2001 Public Accounting Report's "Top 100".
OUR EXPERIENCE
Committed GASB 34 leadership · Dedicated to helping clients understand and effectively implement the new standard.
· Early, aggressive approach to learning and understanding GASB 34.
· Requested to speak at many association seminars on GASB 34 due to our expertise.
· Hosted our own seminars discussing GASB 34.
· Authored several articles that have been published locally, regionally and nationally.
· Dedicated GASB 34 web site section linked to GASB's own web site.
· Strong relationships with GASB staff.
Project team with actual, hands-on GASB 34 experience
· Four December 31, 2000 financial audit early implementations completed.
· Green Bay Metropolitan Sewerage District
· City of Beaver Dam, WI
· Village of Grafton, WI
· Village of Pleasant Prairie, WI
· Significant GASB 34 implementation project with Saint Paul, MN.
· Established work papers and systems providing efficiency.
· Serve five phase 1 government clients who will implement December 31, 2002.
· Personnel who truly care about the business of government.
OUR APPROACH
· Careful up front planning to ensure your needs are met.
· Input from city personnel who know your systems and processes best.
· Use a ~gap analysis" to identify current status and areas to address.
· Use previous experience as a guideline, but tailor to your needs.
· Analyze risks and implications of policy decisions associated with GASB 34.
· Identify potential effects on the perceived overall financial position of the city.
· Make recommendations for processes and methodologies to comply with GASB 34.
· Experienced CPAs will help you achieve GASB 34 compliance.
THE RESULTS
· Comprehensive, well thought out planning.
· Logical and practical solutions to your unique needs.
· A decision process focused on the strategic benefits of each issue, not just compliance.
· You save internal time and money leveraging our experience.
VirchowKrause
company
February 22, 2002
Mr. Ken TeKippe, CPA, Finance Director
City of Dubuque
City Hall
50 West 13th Street
Dubuque, IA 52001-4864
Dear Mr. TeKippe:
This letter is to clarify our proposal for GASB #34 services, specifically the area of deliverables.
Both the RFP and our proposal had a lot of information on the strategic planning process, and
little emphasis on the final report.
Our proposal describes the deliverables in two major areas: Central Finance/Global Department
assessment with related GAP analysis, and Capital Asset Process Development. Page 16
indicates that the deliverable for the GAP analysis is a "strategic plan". The deliverable for the
Capital Asset Section (page 17) is a "report of detailed recommendations". What these reports
will contain is explained in the following sections.
The strategic plan is the result of the process referenced on pages 15 and 16 of our proposal.
That process includes data gathering, interviews, discussion of solutions and recommendation of
action steps. A typical strategic plan would include a summary of the findings, an outline of
goals, a listing of actions to be taken, and a timeline for completion of these actions. In essence,
this document will be a workplan for the city to be ready for GASB #34. In addition, we will
provide a matrix listing the various decision items. This matdx will also include the city's
decisions as they are made throughout the process. Our services also include general oversight
of the implementation process, so that we will be there for you as questions arise.
The other deliverable relates to the capital asset section. Our work in that area includes building
on our GAP analysis referred to above, and working with city personnel to develop policies and
procedures needed to inventory, cost, depreciate and report on capital assets of the city. Our
report would include analysis of options and recommendations of policy decisions, followed by
the processes and procedures to prepare the city for the recording of the capital asset
information for June 30, 2003 as well as actual decisions made. As requested, our report will
also provide recommendations regarding fixed asset software needs, appraisal firm options, and
assistance with evaluating the need for a capital asset database.
Ten Terrace Court · PO Box 7398 ,, Madison, VVI 53707-7398 - Tel 608.249.6622 o Fax 608.249.8532 e www.virchowkrause.com
Virchow, Krause & Company, LLP
Cer[ified Public Accountants & Co~sultants · Member of Summit International Associates,
Mr. Ken TeKippe, CPA, Finance Director
City of Dubuque
February 22, 2002
Page 2
I hope that this provides a better description of our deliverables. Strategic planning really
focuses a lot of effort on the process. Many times, by the time the report is issued, people have
understood the action steps and have begun implementation efforts. In any case, we expect our
reports to be valuable tools to guide the city through a successful GASB #34 implementation
process.
If you need any further information, please give me a call.
Sincerely,
VIRCHOW, KRAUSE & COMPANY, LLP
Donald L Rahn, CPA, Partner
DLR/jj