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Council approves $76,000 contract for bank-reconciliation services after debate on ERP implementation
Summary
Council approved a not-to-exceed $76,000 contract with Ed Bailey LLP to catch up bank reconciliations and close out ERP conversion backlogs; members raised repeated concerns about post-award contract adjustments and the city's contracting process.
Hemet City Council voted 4-0 on May 12 to approve a professional services agreement with Ed Bailey LLP for bank-reconciliation services, not to exceed $76,000. The contract is intended as a temporary engagement to reconcile prior-year and current-year financials after the city's ERP conversion and a period of staff turnover.
Councilmembers pressed staff about recurring post-award costs tied to the city's enterprise resource planning (ERP) implementation. Council Member Joe (speaking in the record) described a pattern of bids followed by supplemental charges after work begins; he said, "we get a bid, they come back and say, 'Well, this wasn't done or we can't complete this, so it's going to cost you this.'" The council sought assurances the funds were previously budgeted and would not come from the general fund.
Staff response and reasoning: Tiffany said the $76,000 cost is within the original ERP project budget approved in 2024 (an estimated $400,000 for staff help). The city tried hiring temporary accountants and direct recruitment but lacked candidates with the required skills and recommended contracting with a firm experienced in California municipal bank reconciliations. "We tried to do the cheapest and it didn't work," Tiffany said, explaining that the professional firm should complete the catch-up work more quickly and deliver procedural documentation.
Legal/contracting context: The city attorney explained the standard practice of providing template agreements in RFPs and noted vendors sometimes identify exceptions to indemnity or confidentiality clauses; staff negotiates those exceptions during contracting. Council members asked why some contract language is changed after award; the attorney said early identification of exceptions is now required in proposals.
Public comment: Jean Fanza cautioned that bank reconciliations are a critical control and said her "audit head went ding ding ding ding" on hearing the reconciliations were 10 months behind.
Outcome and next steps: Council approved the contract. Staff says the engagement is short-term (to be completed by end of July) and will produce documentation and procedures so city staff can maintain reconciliations going forward.
