The URL can be used to link to this page

Home My WebLink AboutAgenda Packet - Finance & Human Resources Committee - 02/08/2022FINANCE & HUMAN RESOURCES COMMITTEE FEBRUARY 8, 2022 East Valley Water District was formed in 1954 and provides water and wastewater services to 103,000 residents within the cities of San Bernardino and Highland, and portions of San Bernardino County. EVWD operates under the direction of a 5member elected Board. COMMITTEE MEMBERS David E. Smith Governing Board Member James Morales Jr. Governing Board Member Finance & Human Resources Committee Meeting February 08, 2022 3:30 PM 31111 Greenspot Road, Highland, CA 92346 Via Teleconference In an effort to protect public health and pursuant to Resolution 2022.01, an active State of Emergency still exists and continues to directly impact the ability of the members to meet safely in person; therefore, there will be no physical location to attend this meeting in person and it will be held via teleconference. Members of the public are invited to make a public comment telephonically during the public comment section of the meeting and after each agenda item. In addition, a public comment card may be submitted prior to the start of the meeting, or a request may be submitted to the District Clerk via email at administration@eastvalley.org. Anyone wishing to join the meeting may do so using the following information: DIAL: 12094255876 and enter CONFERENCE ID: 308 612 348# You may also join by clicking HERE to join the meeting via Microsoft Teams. PLEASE NOTE: Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection in the District’s office located at 31111 Greenspot Rd., Highland, during normal business hours. Also, such documents are available on the District’s website at eastvalley.org and are subject to staff’s ability to post the documents before the meeting. Pursuant to Government Code Section 54954.2(a), any request for a disabilityrelated modification or accommodation, including auxiliary aids or services, that is sought in order to participate in the above agendized public meeting should be directed to the District Clerk at (909) 8854900 at least 72 hours prior to said meeting. In order to comply with legal requirements for posting of agenda, only those items filed with the District Clerk by 12:00 p.m. on Wednesday prior to the following Wednesday meeting not requiring departmental investigation, will be considered by the Board of Directors. CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL OF BOARD MEMBERS PUBLIC COMMENTS Any person wishing to speak to the Board of Directors is asked to complete a Speaker Card and submit it to the District Clerk prior to the start of the meeting. Each speaker is limited to three (3) minutes, unless waived by the Chairman of the Board. Under the State of California Brown Act, the Board of Directors is prohibited from discussing or taking action on any item not listed on the posted agenda. The matter will automatically be referred to staff for an appropriate response or action and may appear on the agenda at a future meeting. APPROVAL OF CONSENT CALENDAR All matters listed under the Consent Calendar are considered by the Board of Directors to be routine and will be enacted in one motion. There will be no discussion of these items prior to the time the board considers the motion unless members of the board, the administrative staff, or the public request specific items to be discussed and/or removed from the Consent Calendar. 1.Approve the November 30, 2021 Finance and Human Resources Committee Meeting Minutes 2.Approve the December 7, 2021 Finance and Human Resources Committee Meeting Minutes INFORMATIONAL ITEMS 3.Discuss Professional Audit Services 2022 4.Review Community Facilities District (CFD) Administration Services Proposal DISCUSSION AND POSSIBLE ACTION ITEMS 5.Set the day and time for holding recurring meetings REPORTS ADJOURN FINANCE & HUMAN RESOURCES COMMITTEEFEBRUARY 8, 2022East Valley Water District was formed in 1954 and provides water and wastewater services to103,000 residents within the cities of San Bernardino and Highland, and portions of SanBernardino County.EVWD operates under the direction of a 5member elected Board.COMMITTEE MEMBERS David E. Smith Governing Board Member James Morales Jr. Governing Board Member Finance & Human Resources Committee Meeting February 08, 2022 3:30 PM 31111 Greenspot Road, Highland, CA 92346 Via Teleconference In an effort to protect public health and pursuant to Resolution 2022.01, an active State of Emergency still exists and continues to directly impact the ability of the members to meet safely in person; therefore, there will be no physical location to attend this meeting in person and it will be held via teleconference. Members of the public are invited to make a public comment telephonically during the public comment section of the meeting and after each agenda item. In addition, a public comment card may be submitted prior to the start of the meeting, or a request may be submitted to the District Clerk via email at administration@eastvalley.org. Anyone wishing to join the meeting may do so using the following information: DIAL: 12094255876 and enter CONFERENCE ID: 308 612 348# You may also join by clicking HERE to join the meeting via Microsoft Teams. PLEASE NOTE: Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection in the District’s office located at 31111 Greenspot Rd., Highland, during normal business hours. Also, such documents are available on the District’s website at eastvalley.org and are subject to staff’s ability to post the documents before the meeting. Pursuant to Government Code Section 54954.2(a), any request for a disabilityrelated modification or accommodation, including auxiliary aids or services, that is sought in order to participate in the above agendized public meeting should be directed to the District Clerk at (909) 8854900 at least 72 hours prior to said meeting. In order to comply with legal requirements for posting of agenda, only those items filed with the District Clerk by 12:00 p.m. on Wednesday prior to the following Wednesday meeting not requiring departmental investigation, will be considered by the Board of Directors. CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL OF BOARD MEMBERS PUBLIC COMMENTS Any person wishing to speak to the Board of Directors is asked to complete a Speaker Card and submit it to the District Clerk prior to the start of the meeting. Each speaker is limited to three (3) minutes, unless waived by the Chairman of the Board. Under the State of California Brown Act, the Board of Directors is prohibited from discussing or taking action on any item not listed on the posted agenda. The matter will automatically be referred to staff for an appropriate response or action and may appear on the agenda at a future meeting. APPROVAL OF CONSENT CALENDAR All matters listed under the Consent Calendar are considered by the Board of Directors to be routine and will be enacted in one motion. There will be no discussion of these items prior to the time the board considers the motion unless members of the board, the administrative staff, or the public request specific items to be discussed and/or removed from the Consent Calendar. 1.Approve the November 30, 2021 Finance and Human Resources Committee Meeting Minutes 2.Approve the December 7, 2021 Finance and Human Resources Committee Meeting Minutes INFORMATIONAL ITEMS 3.Discuss Professional Audit Services 2022 4.Review Community Facilities District (CFD) Administration Services Proposal DISCUSSION AND POSSIBLE ACTION ITEMS 5.Set the day and time for holding recurring meetings REPORTS ADJOURN FINANCE & HUMAN RESOURCES COMMITTEEFEBRUARY 8, 2022East Valley Water District was formed in 1954 and provides water and wastewater services to103,000 residents within the cities of San Bernardino and Highland, and portions of SanBernardino County.EVWD operates under the direction of a 5member elected Board.COMMITTEE MEMBERSDavid E. SmithGoverning Board Member James Morales Jr.Governing Board MemberFinance & Human Resources Committee MeetingFebruary 08, 2022 3:30 PM31111 Greenspot Road, Highland, CA 92346Via TeleconferenceIn an effort to protect public health and pursuant to Resolution 2022.01, an active State ofEmergency still exists and continues to directly impact the ability of the members to meetsafely in person; therefore, there will be no physical location to attend this meeting inperson and it will be held via teleconference. Members of the public are invited to make apublic comment telephonically during the public comment section of the meeting and aftereach agenda item. In addition, a public comment card may be submitted prior to the start ofthe meeting, or a request may be submitted to the District Clerk via email atadministration@eastvalley.org.Anyone wishing to join the meeting may do so using the following information:DIAL: 12094255876 and enter CONFERENCE ID: 308 612 348#You may also join by clicking HERE to join the meeting via Microsoft Teams.PLEASE NOTE:Materials related to an item on this agenda submitted to the Board after distribution of theagenda packet are available for public inspection in the District’s office located at 31111Greenspot Rd., Highland, during normal business hours. Also, such documents are availableon the District’s website at eastvalley.org and are subject to staff’s ability to post thedocuments before the meeting.Pursuant to Government Code Section 54954.2(a), any request for a disabilityrelatedmodification or accommodation, including auxiliary aids or services, that is sought in orderto participate in the above agendized public meeting should be directed to the District Clerkat (909) 8854900 at least 72 hours prior to said meeting. In order to comply with legal requirements for posting of agenda, only those items filed with the District Clerk by 12:00 p.m. on Wednesday prior to the following Wednesday meeting not requiring departmental investigation, will be considered by the Board of Directors. CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL OF BOARD MEMBERS PUBLIC COMMENTS Any person wishing to speak to the Board of Directors is asked to complete a Speaker Card and submit it to the District Clerk prior to the start of the meeting. Each speaker is limited to three (3) minutes, unless waived by the Chairman of the Board. Under the State of California Brown Act, the Board of Directors is prohibited from discussing or taking action on any item not listed on the posted agenda. The matter will automatically be referred to staff for an appropriate response or action and may appear on the agenda at a future meeting. APPROVAL OF CONSENT CALENDAR All matters listed under the Consent Calendar are considered by the Board of Directors to be routine and will be enacted in one motion. There will be no discussion of these items prior to the time the board considers the motion unless members of the board, the administrative staff, or the public request specific items to be discussed and/or removed from the Consent Calendar. 1.Approve the November 30, 2021 Finance and Human Resources Committee Meeting Minutes 2.Approve the December 7, 2021 Finance and Human Resources Committee Meeting Minutes INFORMATIONAL ITEMS 3.Discuss Professional Audit Services 2022 4.Review Community Facilities District (CFD) Administration Services Proposal DISCUSSION AND POSSIBLE ACTION ITEMS 5.Set the day and time for holding recurring meetings REPORTS ADJOURN Agenda Item #1 February 8, 20221 3 0 5 Meeting Date: February 8, 2022 Agenda Item #1 Consent Item Regular Meeting TO: Committee Members FROM: Chief Financial Officer SUBJECT: Approve the November 30, 2021 Finance and Human Resources Committee Meeting Minutes RECOMMENDATION Staff recommends that the Finance and Human Resources Committee approve the minutes as submitted. BACKGROUND / ANALYSIS N/A AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability B. Utilize Effective Communication Methods REVIEW BY OTHERS This agenda item has been reviewed by the Administration Department. FISCAL IMPACT There is no fiscal impact associated with this agenda item. Recommended by: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS November 30, 2021 Minutes Page 1 of 2 Minutes 10/05/21 cmk 2 7 4 Subject to Approval EAST VALLEY WATER DISTRICT November 30, 2021 FINANCE AND HUMAN RESOURCES COMMITTEE MEETING MINUTES Ms. Koide called the meeting to order at 3:30 p.m. and Director Goodrich led the flag salute. PRESENT: Directors: Goodrich, Morales ABSENT: None STAFF: Brian Tompkins, Chief Financial Officer; Rudy Guerrero, Accountant; Eileen Bateman, Human Resources Coordinator; Christi Koide, Senior Administrative Assistant GUEST(s): Members of the public PUBLIC COMMENTS The Senior Administrative Assistant declared the public participation section of the meeting open at 3:32 p.m. There being no written or verbal comments, the public participation section was closed. APPROVE THE OCTOBER 5, 2021 FINANCE AND HUMAN RESOURCES COMMITTEE MEETING MINUTES M/S/C (Goodrich-Morales) by unanimous roll call vote to approve the October 5, 2021 Finance and Human Resources Committee meeting minutes as submitted. COMMUNITY FACILITIES DISTRICT (CFD) PUBLIC HEARING SCHEDULED FOR DECEMBER 8, 2021 The Chief Financial Officer gave a brief overview of the following documents that will be presented during the CFD Public Hearing scheduled for December 8, 2021: Public Report prepared by Koppel & Gruber; EVWD Resolution 2021.24 to establish CFD No. 2021-1; CFD 2021-1 Resolution 2021.01 to issue bonds; CFD 2021-1 Resolution 2021.02 to certify results of the Special Tax and Bond elections; and CFD 2021-1 Ordinance No. 1 to Authorize a Special Tax. Page 2 of 2 Minutes 10/05/21 cmk 2 7 4 The Chief Financial Officer also made a correction to the Staff Report and stated there are three owners of the property known as the Mediterra Project: Greenspot Corridor, LLC, Forestar USA Real Estate Group, and DR Horton Los Angeles Holding Company. Directors Goodrich and Morales suggested that the Chief Financial Officer highlight that this Project is cost-neutral to the District when he presents it to the Board during the Public Hearing. Information only. REPORTS After deliberation, the Committee decided upon scheduling a Special Finance and Human Resources Committee meeting to be held on December 7, 2021, and to cancel the January 11, 2022 meeting. ADJOURN The meeting adjourned at 3:56 p.m. James Morales, Jr. Phillip R. Goodrich Governing Board Member Governing Board Member Agenda Item #2 February 8, 20221 3 0 6 Meeting Date: February 8, 2022 Agenda Item #2 Consent Item Regular Meeting TO: Committee Members FROM: Chief Financial Officer SUBJECT: Approve the December 7, 2021 Finance and Human Resources Committee Meeting Minutes RECOMMENDATION Staff recommends that the Finance and Human Resources Committee approve the minutes as submitted. BACKGROUND / ANALYSIS N/A AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability B. Utilize Effective Communication Methods REVIEW BY OTHERS This agenda item has been reviewed by the Administration Department. FISCAL IMPACT There is no fiscal impact associated with this agenda item. Recommended by: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS December 7, 2021 Minutes Page 1 of 2 Minutes 12/7/21 cmk 2 7 5 Subject to Approval EAST VALLEY WATER DISTRICT December 7, 2021 FINANCE & HUMAN RESOURCES COMMITTEE MEETING MINUTES Ms. Koide called the meeting to order at 1:30 p.m. and Mr. Tompkins led the flag salute. PRESENT: Directors: Goodrich, Morales ABSENT: None STAFF: Brian Tompkins, Chief Financial Officer; Kerrie Bryan, Director of Administrative Services; Ryan Ritualo, Information Technology Manager; Rudy Guerrero, Finance Supervisor; Eileen Bateman, Human Resources Coordinator; Christi Koide, Senior Administrative Assistant GUEST(s): Members of the public PUBLIC COMMENTS The Senior Administrative Assistant declared the public participation section of the meeting open at 1:32 p.m. There being no written or verbal comments, the public participation section was closed. FLEXIBLE WORKPLACE PILOT PROGRAM The Director of Administrative Services provided information on the Workplace Pilot Program. She discussed benefits of workplace flexibility for employees and employers and challenges. In addition, she explained ineligible staff such as Operations staff who primarily work in the field, will be ineligible to work remotely. Information only. REVIEW AUDITOR’S COMMUNICATION LETTER WITH THOSE CHARGED WITH GOVERNANCE CliftonLarsonAllen (CLA) gave a presentation to discuss the following: Independent Auditor’s Report; Governance Letter; Management Representation Letter; and the audit process. In addition, CLA explained that in order to comply with Government Code Section 12410.6(b), an audit partner cannot be responsible for reviewing the audit for six Page 2 of 2 Minutes 12/7/21 cmk 2 7 5 consecutive fiscal years, and introduced Kassie Radermacher, CPA, CFE who will be the Lead Principal for future audits. Information only. REVIEW THE POPULAR ANNUAL FINANCIAL REPORT FOR YEAR ENDED JUNE 30, 2021 The Finance Supervisor provided a brief overview of the Popular Annual Financial Report (PAFR) document and stated that the PAFR is designed to be a summarized, user-friendly version of the District’s Comprehensive Annual Financial Report (Annual Report). Information only. ADJOURN The meeting adjourned at 2:36 p.m. James Morales, Jr. Phillip R. Goodrich Governing Board Member Governing Board Member Agenda Item #3 February 8, 20221 3 0 2 Meeting Date: February 8, 2022 Agenda Item #3 Discussion Item Regular Meeting TO: Committee Members FROM: Chief Financial Officer SUBJECT: Discuss Professional Audit Services 2022 RECOMMENDATION This agenda item is for informational purposes only, no action required. BACKGROUND / ANALYSIS Fiscal year 2020-21 was the fifth and final year of the District’s engagement with the CPA firm CliftonLarsonAllen LLC, to perform the District’s annual financial audit. In addition, during the presentation of the 2020-21 audit last December, staff informed the Board that the audit team had experienced significant turnover in 2021, including retirement of the Principal on the District’s audit. For these reasons it is prudent for the District to request proposals from various firms for the 2021-22 audit. Staff sent out Requests for Proposals (RFP) to nine CPA firms at the end of January - a list of the firms contacted is attached. A due date of February 23rd has been established for submittal of proposals. Staff will form a proposal review committee consisting of three members who will rate the proposals. The proposals will be ranked based on their overall ratings and the top- rated firm will be recommended to the Board, for authorization to enter into an agreement for audit services. AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability A. Practice Transparent and Accountable Fiscal Management REVIEW BY OTHERS This agenda item has been reviewed by the Finance Department. FISCAL IMPACT This item is funded in the current fiscal year budget. Agenda Item #3 February 8, 20222 3 0 2 Meeting Date: February 8, 2022 Agenda Item #3 Discussion Item Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS 1. Request for Proposal 2. List of Firms NOTICE INVITING PROPOSALS Professional Audit Services The East Valley Water District (“EVWD”) is accepting digital bid submissions for the services listed above. Bidders shall complete and submit their Proposal electronically in searchable portable document file (PDF) format, and emailed to finance@eastvalley.org. All information provided shall be consolidated into one PDF file. Any Proposal found to be illegible or incomplete may be rejected. All Bidders assume full responsibility for having their Proposal submitted by no later than the scheduled closing time. More than (1) Proposal from an individual, firm, partnership, or corporation under the same or different name(s), will not be considered. Proposals are due no later than 5:00 P.M. on Wednesday, February 23, 2022. Proposals by fax will NOT be accepted and must be completed on District forms. East Valley Water District reserves the right to accept in whole or part or reject any and all proposals and to waive any informalities in the bid process, and all Proposals are binding for a period of sixty (60) days after the deadline and may be retained by the District for examination and comparison, as specified in the quotation request documents. Request for Proposal Professional Auditing Services Proposal Date January 31, 2022 Proposal Deadline February 23, 2022 East Valley Water District 31111 Greenspot Road Highland, CA 92346 (909) 381-6463 - 1 - Table of Contents GENERAL INFORMATION ........................................................................................................- 2 - BACKGROUND .........................................................................................................................- 3 - MINIMUM QUALIFICATIONS ...................................................................................................- 4 - ACCOUNTING SYSTEM ............................................................................................................- 4 - SCOPE OF AUDIT ....................................................................................................................- 4 - AGENCY RESPONSIBILITIES ...................................................................................................- 5 - REPORT REQUIREMENTS ........................................................................................................- 5 - SUBMITTAL REQUIREMENTS ..................................................................................................- 6 - AUDIT FEES .............................................................................................................................- 7 - AUDIT TIMELINE (Approximate).............................................................................................- 9 - INSURANCE REQUIREMENTS ..................................................................................................- 9 - DISTRICT SERVICES AGREEMENT ........................................................................................- 10 - INQUIRIES AND REQUEST FOR INFORMATION ...................................................................- 22 - EVALUATION PROCESS .........................................................................................................- 22 - AFFIRMATION AND AUTHORIZATION ..................................................................................- 23 - - 2 - GENERAL INFORMATION The East Valley Water District and the North Fork Water Company, referred to herein as “the District,” is soliciting proposals from qualified certified public accounting firms to provide annual audit services, referred to herein as “Services.” The District proposes to commit to a three-year agreement for audit services commencing with the fiscal year ending June 30, 2022, up to and including fiscal year ending June 30, 2024, with an option to extend the contract through June 30, 2026. This commitment is contingent upon mutual consent of both the District and the audit firm selected, referred to herein as “Auditor.” Proposals will be considered only from parties that are free of all obligation and interests that might conflict with the best interest of the District, and have the capacity to provide services on a timely basis. The audit engagement, including the issuance of the Independent Auditor’s Report, must be completed no later than November 30 of each contract year. The District reserves the right to reject any and all proposals. The District also reserves the right to cancel the contract, due to unsatisfactory performance of audit services or any other reason deemed appropriate by the District, between audit years with a 30-day written notice. All property rights, including publication rights of all reports produced by proposer in connection with services performed under this agreement shall be vested in the District. The proposer shall not publish or release any of the results of its examination without the expressed written permission of the District. During the evaluation process the Proposal Review Team reserves the right - where it serves the District’s best interests - to request additional information or clarifications from the proposers. At the discretion of the District, firms submitting proposals may be requested to make oral presentations as part of the evaluation process. The District reserves the right to retain all proposals submitted and to use any ideas in a proposal regardless of whether the proposal was selected. Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposal, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the District and the firm selected. There is no expressed or implied obligation for the District to reimburse responding firms for any expenses incurred in preparing proposals in response to this request. - 3 - BACKGROUND The East Valley Water District is a special district formed in 1954, as a result of an election by local residents who desired water service by a public water agency. Later, as the population increased, a modern wastewater system was needed to replace the septic tanks used at the time. Citizens voted to give the District responsibility for that service. The District encompasses an area of approximately 25 square miles and provides water and wastewater service to the City of Highland, parts of the City of San Bernardino, and unincorporated parts of the County of San Bernardino, California. The North Fork Water Company (Company) is a blended component unit of the East Valley Water District. It does, however, have a different year end and prepares separate financial statements. Proposing firms are also requested to provide a cost to conduct a separate review of those statements after its January 31st year end. The Authority was created in August 2010 by a joint exercise of powers agreement for the purpose of financing public capital improvements. It is governed by a Board of Directors comprised of the District's Board of Directors. The Authority issued debt in October 2010 which is secured solely from installment payments under an installment purchase agreement entered into by the District and the Authority. The Company was established in February 1885 to deliver water, taken from the Santa Ana River, to its property owner /shareholders. The Company is governed by a Board of Directors comprised of, and elected by, Company shareholders. The District has purchased shares of Company stock as they become available in order to secure rights to the Santa Ana River water and have it delivered to the District's surface water treatment plant. At June 30, 2021, the District owned 7,146.99 of 7,156 outstanding Company shares. Due to the number of Company shares owned, the District is able to appoint a majority of the Company’s governing board and is therefore financially accountable for the Company. In addition, management and staff of the District have complete responsibility for the operations of the Company. As a result, the Company's financial statements have been included in the accompanying financial statements as a blended component unit. Copies of the Company's financial statements may be obtained from the District’s Finance Department located at 31111 Greenspot Road, Highland, California 92346 The District has received awards for its Comprehensive Annual Financial Report (Annual Report) from the Government Finance Officers of America (GFOA) for the last 9 years in a row and is awaiting news for the most recent Annual Report submitted. A copy of the most recent Annual Report is available on the Financial Documents page of our website www.eastvalley.org. The District contracts with CalPERS to provide a defined benefit pension plan for employees in two tiers based on date of hire. Additionally, the District provides an OPEB plan with funds in trust by the CalPERS Employee Retirement Benefits Trust (CERBT) to qualifying employees. - 4 - The District maintains for its employees a deferred compensation plan structured in accordance with provisions of Internal Revenue Code Section 457. Employee deposits are transmitted to third parties who are responsible for plan administration. MINIMUM QUALIFICATIONS Only the proposals of those firms who demonstrate the following minimum qualifications will be evaluated by the District. 1.Independence: The firm must be able to provide an affirmative statement that it is independent of the District, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 2.License to practice in the State of California: An affirmative statement is required that the firm and all assigned key professional staff are properly registered and licensed to practice in the State of California. 3.Experience: Minimum five years’ experience conducting high quality audits of water districts of comparable sizes. 4.Firm Capacity: Demonstrated capacity to devote the necessary personnel and technical resources to complete the work in accordance with the scheduled timeline on page 9. ACCOUNTING SYSTEM The District utilizes Tyler Technologies Incode 10 financial software for all District accounting and utility billing functions. SCOPE OF AUDIT The Auditor shall examine all the District funds and financial statements in accordance with the following: 1. Auditing standards generally accepted in the United States of America. 2. The State Controller’s Minimum Audit Requirements for California Special Districts. The Auditor shall ensure that the Annual Report is prepared in conformity with the most up to date edition of the Governmental Accounting, Auditing, and Financial Reporting (GAAFR), the GAAFR Update Supplement and Governmental Accounting Standards Board (GASB) pronouncements. It is expected that the auditor keep the District informed of any new state and national developments affecting municipal finance and reporting standards and trends. This shall include at least one formal updating session per fiscal year with the District’s Finance and Accounting staff. - 5 - AGENCY RESPONSIBILITIES 1. The District staff will prepare closing entries including work papers supporting asset and liability balances. Staff will prepare the financial statements, notes to the financial statements, management’s discussion and analysis, and statistical section. 2. The District staff will prepare the required financial statements for the North Fork Water Company, including the notes to the financial statements. 3. The District staff will be available to locate, reproduce, and re-file required or requested documentation during the audit fieldwork. 4. The District staff will be available during the audit to assist the Auditor by providing requested information, documentation, and explanations. 5. The preparation of confirmations will be the responsibility of the District. 6. The District shall provide a reasonable work area (table and chairs), telephones, photocopying facilities, facsimile machines, internet access, and electrical power to the Auditor for use during the audit. REPORT REQUIREMENTS REPORT NAME FORMAT QUANTITY Required Items: Annual Report Opinion Letter Electronic 1 State Controller Report / Submission Electronic 1 Optional Items (if completed): North Fork Water Company Review Electronic 1 Single Audit Report Electronic 1 Report on Audit of Internal Controls Over Financial Reporting – per Statement on Auditing Standards 130. Electronic 1 Annual Report Document Electronic 1 Continuing Disclosure Annual Report (CDAR) Electronic 1 - 6 - SUBMITTAL REQUIREMENTS Responses to this Request for Proposal shall include the following: 1. Table of Contents, identify the material by section and page number. 2. Letter of Transmittal. 3. State, briefly, the firm’s understanding of the work to be done, and make a positive commitment to perform the work within the proposed time-period. 4. Specific Audit Approach: The proposal should set forth a work plan, including an explanation of the audit methodology to be followed to perform the services required for this request for proposal. In developing the work plan, reference should be made to such sources of information as District’s budget and related materials, organizational charts, manuals and programs, and financial and other management information systems. Proposers will be required to provide the following information on their audit approach: a. Proposed timeline of the engagement; b. Level of staff and number of hours to be assigned to each segment; c. Sample sizes and extent of the use of statistical sampling techniques; d. Type and extent of analytical procedures to be used in the engagement; e. Approach to be taken in determining laws and regulations that will be subject to audit test work; f. Approach to be taken to gain and document an understanding of the District’s internal control structure; and g. Approach to be taken in drawing audit samples for purposes of tests of compliance. 5. Provide the names of the individuals authorized to make representations for the firm, their titles, California CPA Certificate numbers, addresses, and telephone numbers. 6. Affirm that you meet the independence requirement of the General Accountability Office (GAO). 7. State whether the firm is local, national, or international. 8. Give the location of the office from which the work is to be performed and the number or partners, managers/principals, supervisors, seniors, and other professional staff employed at the office. 9. Describe the range of activities performed by the local office, such as audit, accounting, tax service, or management services. 10. Five references for which similar work has been performed, especially as it pertains to water agency experience; include an overview of the work performed, individual contact person, - 7 - address and phone number. For water agencies, include the number of water service accounts and the amount of the annual operating budget. If five references are not available, list as many as possible. 11. A copy of the firm’s most recent peer review report and copy of the accompanying letter of comment, if any. State whether the firm has been the subject of any disciplinary action within the last three years, or if any such action is pending by state regulatory bodies or professional organizations. If such conditions exist, provide information as to the circumstances and status of the disciplinary action. 12. Clearly describe the scope of required services for the provisions of the Single Audit Act Amendments of 1996 and the U.S. Office of Management and Budget’s Uniform Guidance, Subpart F-Audit Requirements which supersedes Circular A-133, “Audits of State, Local Governments, and Non-Profit Organizations.” AUDIT FEES In recent years, the total payments for audit services and related supplies have been based on a fixed fee. To allow the firms some flexibility in their proposal, we will accept proposals that use either CPI indexing or fixed fees for each of the five years. Therefore, your proposal should specify the fee method. Contract language for the CPI indexing will read similar to the following: The total payment for audit services shall be based on a not to exceed basis for the fiscal year ending June 30, 2022 and for the two subsequent years. Any change in the cost of audit services due to a change in the scope of work or other consideration will be subject to negotiation and agreement of all parties involved. The firm shall breakdown the basic audit fees, including all expenses as illustrated in this example:Fee for Fiscal Year Fee for optional additional Fiscal Year REQUIRED ITEMS:2022 / 2023 / 2024 2025 / 2026 1. Financial Audit of the District $ $ $ .$ $ . 2. State Controller Office Report and Submission $ $ $ .$ $ . 3. Travel Expenses $ $ $ .$ $ . SUB-TOTAL REQUIRED ITEMS $ $ $ .$ $ . - 8 - Consultation between Auditor and District, and any Auditor familiarization with the District, shall be included in the base fee. In addition, include a schedule of hourly charges for principals and various staff levels to be used as a basis for audit costs that are outside the scope of the basic auditing and accounting services. OPTIONAL ITEMS:2022 / 2023 / 2024 2025 / 2026 A.Separate financial review report for North Fork Water Company $ $ $ .$ $ . B.Single audit examination of all federal grants $ $ $ .$ $ . C.Compilation of the Annual Report Document $ $ $ .$ $ . D.Audit of Internal Controls $ $ $ .$ $ . E.Continuing Disclosure Annual Report $ $ $ .$ $ . SUB-TOTAL OPTIONAL ITEMS $ $ $ .$ $ . GRAND TOTAL $ $ $ .$ $ . - 9 - AUDIT TIMELINE (Approximate) Prior to June 30, 2022 Begin interim fieldwork September 5, 2022 Begin final fieldwork September 19, 2022 Exit conference—Draft AJEs and Management Letter discussed September 30, 2022 Documents due to District: - Annual Report changes October 11, 2022 Final reports to District: - Annual Report Opinion Letter - Audit Communication Letter - Report on Internal Controls Letter - Management Letter October 18, 2022 Final reports to District: - Single Audit (if required) October 11, 2022 Attendance of Finance Committee meeting for presentation of Annual Report and audit results October 26, 2022 Attendance of Board meeting for presentation of Annual Report and audit results January 31, 2023 File CA State Controller’s Report, Special Districts Financial Transaction Report March 14, 2022 Perform Review procedures for the Company March 28, 2022 Issue the Company’s Review Report INSURANCE REQUIREMENTS The successful bidder shall maintain for the duration of the agreement minimum insurance as listed: 1. General Liability – Commercial coverage no less than $1,000,000 per occurrence for bodily injury, personal injury, and property damage. 2. Automobile Liability – Coverage no less than $1,000,000 per accident for bodily injury and property damage. 3. Workers’ Compensation and Employers’ Liability – Limits of $1,000,000 per accident for bodily injury or disease. 4. Professional Liability – Coverage no less than $1,000,000 per claim in Errors and Omissions Insurance and Professional Liability coverage. - 10 - DISTRICT SERVICES AGREEMENT A sample of the District’s Services Agreement is provided for review. Submission of a Proposal is the Consultant’s willingness to accept the terms of the agreement. Please specifically identify each and every term of the agreement that your firm is unwilling to accept and the reason therefore. AGREEMENT NO 2022.XX EAST VALLEY WATER DISTRICT FOR FOR PROFESSIONAL SERVICES THIS AGREEMENT is made this day of ___________________ 20___, by and between the EAST VALLEY WATER DISTRICT, a County Water District organized and operating pursuant to California Water Code Section 30000 et seq. (hereinafter referred to as the “DISTRICT”), and _______________________________________, a _______________________________ (hereinafter referred to as “CONSULTANT”). RECITALS WHEREAS, the DISTRICT desires to contract with CONSULTANT to provide design professional services for (hereinafter referred to as “Project”); and WHEREAS, CONSULTANT is willing to contract with the DISTRICT to provide such services; and WHEREAS, CONSULTANT holds itself as duly licensed, qualified, and capable of performing said services; and WHEREAS, this Agreement establishes the terms and conditions for the DISTRICT to retain CONSULTANT to provide the services described herein for the Project. COVENANTS NOW, THEREFORE, in consideration of the faithful performance of the terms and conditions set forth herein, the parties hereto agree as follows: ARTICLE I ENGAGEMENT OF CONSULTANT AND AUTHORIZATION TO PROCEED 1.1 ENGAGEMENT: The DISTRICT hereby engages CONSULTANT, and CONSULTANT hereby accepts the engagement, to perform certain design professional services described in Section 2.1 of this Agreement for the term set forth in Section 6.7 of this Agreement. - 11 - 1.2 AUTHORIZATION TO PROCEED: Authorization for CONSULTANT to proceed with all or a portion of the work described in Section 2.1 of this Agreement will be granted in writing by the DISTRICT as soon as both parties sign the Agreement and all applicable insurance and other security documents required pursuant to Section 6.3 of this Agreement are received and approved by the DISTRICT. CONSULTANT shall not proceed with said work until so authorized by the DISTRICT, and shall commence work immediately upon receipt of the Notice to Proceed. 1.3 NO EMPLOYEE RELATIONSHIP: CONSULTANT shall perform the services provided for herein as an independent contractor, and not as an employee of the DISTRICT. The DISTRICT shall have ultimate control over the work performed for the Project. CONSULTANT is not to be considered an agent or employee of the DISTRICT for any purpose, and shall not be entitled to participate in any pension plans, insurance coverage, bonus, stock, or similar benefits that the DISTRICT provides for its employees. CONSULTANT shall indemnify the DISTRICT for any tax, retirement contribution, social security, overtime payment, or workers’ compensation payment which the DISTRICT may be required to make on behalf of CONSULTANT or any employee of CONSULTANT for work performed under this Agreement. ARTICLE II SERVICES OF CONSULTANT 2.1 SCOPE OF SERVICES: The scope of design professional services to be performed by the CONSULTANT under this Agreement are described in the Scope of Work attached hereto as Exhibit “A” and incorporated herein by this reference (“Scope of Work”), and shall, where not specifically addressed, include all related services ordinarily provided by the CONSULTANT under same or similar circumstances and/or otherwise necessary to satisfy the requirements of Section 3.3 of this Agreement. In case of conflict between the terms of this Agreement and the provisions of the Scope of Work, this Agreement shall govern. 2.2 DEPARTMENT OF INDUSTRIAL RELATIONS COMPLIANCE: This project is subject to compliance monitoring and enforcement by the Department of Industrial Relations. A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the California Public Contract Code, or engage in the performance of any contract for public work, as defined by the California Labor Code, unless currently registered and qualified to perform public work pursuant to Section 1725.5 of the California Labor Code. 2.3 PREVAILING WAGES: In accordance with the provisions of the California Labor Code, CONSULTANT shall secure the payment of compensation to employees. To the extent required by the California Labor Code, CONSULTANT shall pay not less than the prevailing rate of per diem wages as determined by the Director, Department of Industrial Relations, and State of California. Copies of such prevailing rate of per diem wages are on file at the DISTRICT’s office, which copies will be made available to any interested party upon request. CONSULTANT shall post a copy of such determination at each job site. If applicable, CONSULTANT shall forfeit to the DISTRICT the amount of the penalty set forth in Labor Code Section 1777.7(b), or any subsequent amendments thereto, for each calendar day, or portion - 12 - thereof, for each worker paid less than the specified prevailing rates for such work or craft in which such worker is employed, whether paid by CONSULTANT or by any subcontractor. 2.4 HOURS AND WORKING CONDITIONS: The DISTRICT is a public entity in the State of California and is subject to the provisions of the Government Code and the Labor Code of the State. It is stipulated and agreed that all provisions of law applicable to public contracts are a part of this Agreement to the same extent as though set forth herein and will be complied with by CONSULTANT. CONSULTANT shall comply with all applicable provisions of the California Labor Code relating to working hours and the employment of apprentices on public works projects. CONSULTANT shall, as a penalty to the DISTRICT, forfeit $25.00 for each worker employed in the execution of this Agreement by CONSULTANT or by any subcontractor, for each calendar day during which such worker is required or permitted to work more than 8 hours in any one calendar day and 40 hours in any one calendar week, unless such worker received compensation for all hours worked in excess of 8 hours at not less than 1½ times the basic rate of pay. ARTICLE III RESPONSIBILITIES OF THE DISTRICT AND OF CONSULTANT 3.1 DUTIES OF THE DISTRICT: The DISTRICT, without cost to CONSULTANT, will provide all pertinent information necessary for CONSULTANT’s performance of its obligations under this Agreement that is reasonably available to the DISTRICT unless otherwise specified in the Scope of Work, in which case the CONSULTANT is to acquire such information. The DISTRICT does not guarantee or ensure the accuracy of any reports, information, and/or data so provided. To the extent that any reports, information, and/or other data so provided was supplied to the DISTRICT by persons who are not employees of the DISTRICT, any liability resulting from inaccuracies and/or omissions contained in said information shall be limited to liability on behalf of the party who prepared the information for the DISTRICT. 3.2 REPRESENTATIVE OF DISTRICT: The DISTRICT will designate _______________________ as the person to act as the DISTRICT’s representative with respect to the work to be performed under this Agreement. Such person will have complete authority to transmit instructions, receive information, and interpret and define the DISTRICT’s policies and decisions pertinent to the work. In the event the DISTRICT wishes to make a change in the DISTRICT’s representative, the DISTRICT shall notify the CONSULTANT of the change in writing. 3.3 DUTIES OF CONSULTANT: CONSULTANT shall perform the Project work in such a manner as to fully comply with all applicable professional standards of care, including professional quality, technical accuracy, timely completion, and other services furnished and/or work undertaken by CONSULTANT pursuant to this Agreement. The CONSULTANT shall cause all work and deliverables to conform to all applicable federal, state, and local laws and regulations. 3.4 APPROVAL OF WORK: The DISTRICT’s approval of work or materials furnished hereunder shall not in any way relieve CONSULTANT of responsibility for the technical adequacy of its work. Neither the DISTRICT’s review, approval or acceptance of nor payment for any of the services shall be construed - 13 - to operate as a waiver of any rights under this Agreement or of any cause of action arising out of the performance of this Agreement. Where approval by the DISTRICT is indicated in this Agreement, it is understood to be conceptual approval only and does not relieve the CONSULTANT of responsibility for complying with all laws, codes, industry standards, and liability for damages caused by negligent acts, errors, omissions, noncompliance with industry standards, or the willful misconduct of the CONSULTANT or its subcontractors. CONSULTANT’s obligation to defend, indemnify, and hold harmless the DISTRICT, and its directors, officers, employees and agents as set forth in Section 6.9 of this Agreement also applies to the actions or omissions of the CONSULTANT or its subcontractors as set forth above in this paragraph. ARTICLE IV PAYMENTS TO CONSULTANT 4.1 PAYMENT: The DISTRICT will pay CONSULTANT for work performed under this Agreement, which work can be verified by the DISTRICT, on the basis of the following: CONSULTANT shall exercise its good faith best efforts to facilitate a full and clear definition of the scope of all assigned work so that the amount set forth in Section 4.3 of this Agreement will cover all tasks necessary to complete the work. The amount set forth in Section 4.3 of this Agreement is the maximum compensation to which CONSULTANT may be entitled for the performance of services to complete the work for the Project, unless the Scope of Work or time to complete the work is changed by the DISTRICT in writing in advance of the work to be performed thereunder. Adjustments in the total payment amount shall only be allowed pursuant to Section 6.4 of this Agreement. In no event shall CONSULTANT be entitled to compensation greater than the amount set forth in Section 4.3 of this Agreement where changes in the Scope of Work or the time for performance are necessitated by the negligence of CONSULTANT or any subcontractor performing work on the Project. 4.2 PAYMENT TO CONSULTANT: Payment will be made by the DISTRICT within thirty (30) calendar days after receipt of an invoice from CONSULTANT, provided that all invoices are complete and product and services are determined to be of sufficient quality by the DISTRICT. CONSULTANT shall invoice DISTRICT monthly for services performed under this Agreement. In the event that a payment dispute arises between the parties, CONSULTANT shall provide to the DISTRICT full and complete access to CONSULTANT’s labor cost records and other direct cost data, and copies thereof if requested by the DISTRICT. 4.3 ESTIMATED CHARGES: The total estimated charges for all work under this Agreement are $_________________ and such amount is the cost ceiling as described herein. The total estimated charges stated herein constitute the total amount agreed to. 4.4 COST FOR REWORK: CONSULTANT shall, at no cost to the DISTRICT, prepare any necessary rework occasioned by CONSULTANT’s negligent act or omission or otherwise due substantially to CONSULTANT’s fault. ARTICLE V COMPLETION SCHEDULE - 14 - 5.1 TASK SCHEDULE: The work is anticipated to be completed in accordance with the schedule contained in the Scope of Work. 5.2 TIME OF ESSENCE: CONSULTANT shall perform all services required by this Agreement in a prompt, timely, and professional manner in accordance with the above schedule. Time is of the essence in this Agreement. ARTICLE VI GENERAL PROVISIONS 6.1 COMPLIANCE WITH FEDERAL, STATE, AND LOCAL LAWS: CONSULTANT shall at all times observe all applicable provisions of Federal, State, and Local laws and regulations including, but not limited to, those related to Equal Opportunity Employment. 6.2 SUBCONTRACTORS AND OUTSIDE CONSULTANTS: No subcontract shall be awarded by CONSULTANT if not identified as a subcontractor in its Proposal unless prior written approval is obtained from the DISTRICT. CONSULTANT shall be responsible for payment to subcontractors used by them to perform the services under this Agreement. If CONSULTANT subcontracts any of the work to be performed, CONSULTANT shall be as fully responsible to the DISTRICT for the performance of the work, including errors and omissions of CONSULTANT’s subcontractors and of the persons employed by the subcontractor, as CONSULTANT is for the acts and omissions of persons directly employed by the CONSULTANT. Nothing contained in this Agreement shall create any contractual relationship between any subcontractor of CONSULTANT and the DISTRICT. CONSULTANT shall bind every subcontractor and every subcontractor of a subcontractor to the terms of this Agreement that are applicable to CONSULTANT’s work unless specifically noted to the contrary in the subcontract in question and approved in writing by the DISTRICT. 6.3 INSURANCE: CONSULTANT shall secure and maintain in full force and effect, until the satisfactory completion and acceptance of the Project by DISTRICT, such insurance as will protect it and the DISTRICT in such a manner and in such amounts as set forth below. The premiums for said insurance coverage shall be paid by the CONSULTANT. The failure to comply with these insurance requirements may constitute a material breach of this Agreement, at the sole discretion of the DISTRICT. (a) Certificates of Insurance: Prior to commencing services under this Agreement, and in any event no later than ten (10) calendar days after execution of this Agreement, CONSULTANT shall furnish DISTRICT with Certificates of Insurance and endorsements verifying the insurance coverage required by this Agreement is in full force and effect. The DISTRICT reserves the right to require complete and accurate copies of all insurance policies required under this Agreement. (b) Required Provisions: The insurance policies required by this Agreement shall include the following provisions or have them incorporated by endorsement(s): - 15 - (1) Primary Coverage: The insurance policies provided by CONSULTANT shall be primary insurance and any self-insured retention and/or insurance carried by or available to the DISTRICT or its employees shall be excess and non-contributory coverage so that any self-insured retention and/or insurance carried by or available to the DISTRICT shall not contribute to any loss or expense under CONSULTANT’s insurance. (2) Additional Insured: The policies of insurance provided by CONSULTANT, except Workers' Compensation and Professional Liability, shall include as additional insureds: the DISTRICT, its directors, officers, employees, and agents when acting in their capacity as such in conjunction with the performance of this Agreement. Such policies shall contain a "severability of interests" provision, also known as "Cross liability" or "separation of insured". (3) Cancellation: Each certificate of insurance and insurance policy shall provide that the policy may not be non-renewed, canceled (for reasons other than non- payment of premium) or materially changed without first giving thirty (30) days advance written notice to the DISTRICT, or ten (10) days advance written notice in the event of cancellation due to non-payment of premium. (4) Waiver of Subrogation: The insurance policies provided by CONSULTANT shall contain a waiver of subrogation against DISTRICT, its directors, officers, employees and agents for any claims arising out of the services performed under this Agreement by CONSULTANT. (5) Claim Reporting: CONSULTANT shall not fail to comply with the claim reporting provisions or cause any breach of a policy condition or warranty of the insurance policies required by this Agreement that would affect the coverage afforded under the policies to the DISTRICT. (6) Deductible/Retention: If the insurance policies provided by CONSULTANT contain deductibles or self-insured retentions, any such deductible or self-insured retention shall not be applicable with respect to the coverage provided to DISTRICT under such policies. CONSULTANT shall be solely responsible for any such deductible or self-insured retention and the DISTRICT, in its sole discretion, may require CONSULTANT to secure the payment of any such deductible or self-insured retention by a surety bond or an irrevocable and unconditional letter of credit. (7) Consultant’s Subcontractors: CONSULTANT shall include all subcontractors as additional insureds under the insurance policies required by this Agreement to the same extent as the DISTRICT or shall furnish separate certificates of insurance and policy endorsements for each subcontractor verifying that the insurance for each subcontractor complies with the same insurance requirements applicable to CONSULTANT under this Agreement. - 16 - (c) Insurance Company Requirements: CONSULTANT shall provide insurance coverage through insurers that have at least an "A" Financial Strength Rating and a "VII" Financial Size Category in accordance with the current ratings by the A. M. Best Company, Inc. as published in Best’s Key Rating Guide or on said company’s web site. In addition, any and all insurers must be admitted and authorized to conduct business in the State of California and be a participant in the California Insurance Guaranty Association, as evidenced by a listing in the appropriate publication of the California Department of Insurance. (d) Policy Requirements: The insurance required under this Agreement shall meet or exceed the minimum requirements as set forth below: (1) Workers' Compensation: CONSULTANT shall maintain Workers' Compensation insurance as required by law in the State of California to cover CONSULTANT’s obligations as imposed by federal and state law having jurisdiction over CONSULTANT’s employees and Employers' Liability insurance, including disease coverage, of not less than $1,000,000. (2) General Liability: CONSULTANT shall maintain Comprehensive General Liability insurance with a combined single limit of not less than $1,000,000 per occurrence or claim and $1,000,000 aggregate. The policy shall include, but not be limited to, coverage for bodily injury, property damage, personal injury, products, completed operations and blanket contractual to cover, but not be limited to, the liability assumed under the indemnification provisions of this Agreement. In the event the Comprehensive General Liability insurance policy is written on a "claims made" basis, coverage shall extend for two years after the satisfactory completion and acceptance of the Project by DISTRICT. (3) Automobile Liability: CONSULTANT shall maintain Commercial Automobile Liability insurance with a combined single limit for bodily injury and property damage of not less than $1,000,000 each occurrence for any owned, hired, or non-owned vehicles. (4) Professional Liability: CONSULTANT shall maintain Professional Liability insurance covering errors and omissions arising out of the services performed by the CONSULTANT or any person employed by him, with a limit of not less than $1,000,000 per occurrence or claim and $1,000,000 aggregate. In the event the insurance policy is written on a "Claims made" basis, coverage shall extend for two years after the satisfactory completion and acceptance of the Project by DISTRICT. (5) Property Coverage – Valuable Papers: Property coverage on an all-risk, replacement cost form with Valuable Papers insurance sufficient to assure the restoration of any documents, memoranda, reports, plans or other similar data, whether in hard copy or electronic form, relating to the services provided by CONSULTANT under this Agreement. - 17 - 6.4 CHANGES IN SCOPE OR TIME: If the DISTRICT requests a change in the Scope of Work or time of completion by either adding to or deleting from the original scope or time of completion, an equitable adjustment shall be made and this Agreement shall be modified in writing accordingly. CONSULTANT must assert any claim for adjustment under this clause in writing within thirty (30) calendar days from the date of receipt from CONSULTANT of the notification of change unless the DISTRICT grants a further period of time before the date of final payment under this Agreement. 6.5 NOTICES: All notices to either party by the other shall be made in writing and delivered or mailed to such party at their respective addresses as follows, or to other such address as either party may designate, and said notices shall be deemed to have been made when delivered or, if mailed, five (5) days after mailing. To DISTRICT: East Valley Water District 31111 Greenspot Road Highland, CA 92346 Attn: General Manager/CEO To CONSULTANT: Attn: 6.6 CONSULTANT’S ASSIGNED PERSONNEL: CONSULTANT designates ____________________ to have immediate responsibility for the performance of the work and for all matters relating to performance under this Agreement. Substitution of any assigned personnel shall require the prior written approval of the DISTRICT. If the DISTRICT determines that a proposed substitution is not acceptable, then, at the request of the DISTRICT, CONSULTANT shall substitute with a person acceptable to the DISTRICT. 6.7 TERMINATION: (a) If the engagement of CONSULTANT is not extended by the mutual written consent of the DISTRICT and CONSULTANT, then this Agreement shall expire on the latest date set forth in the schedule contained in the Scope of Work for completion of tasks for the Project. (b) Notwithstanding the above, the DISTRICT may terminate this Agreement or abandon any portion of the Project by giving ten (10) days written notice thereof to CONSULTANT. CONSULTANT may terminate its obligation to provide further services under this Agreement upon thirty (30) calendar days written notice only in the event of substantial failure by the DISTRICT to perform in accordance with the terms of this Agreement through no fault of the CONSULTANT. (c) In the event of termination of this Agreement or abandonment of any portion of the - 18 - Project, the DISTRICT shall be immediately given title to all original drawings and other documents developed for the Project, and the sole right and remedy of CONSULTANT shall be to receive payment for all amounts due and not previously paid to CONSULTANT for services completed or in progress in accordance with the Agreement prior to such date of termination. If termination occurs prior to completion of any task for which payment has not been made, the fee for services performed during such task shall be based on an amount mutually agreed to by the DISTRICT and CONSULTANT. Such payments available to the CONSULTANT under this paragraph shall not include costs related to lost profit associated with the expected completion of the work or other such payments relating to the benefit of this Agreement. 6.8 ATTORNEYS’ FEES: In the event that either the DISTRICT or CONSULTANT brings an action or proceeding for damages for an alleged breach of any provision of this Agreement, to interpret this Agreement or determine the rights of and duties of either party in relation thereto, the prevailing party shall be entitled to recover as part of such action or proceeding all litigation, arbitration, mediation and collection expenses, including witness fees, court costs, and reasonable attorneys' fees. Such fees shall be determined by the Court in such litigation or in a separate action brought for that purpose. Mediation will be attempted if both parties mutually agree before, during, or after any such action or proceeding has begun. 6.9 INDEMNITY: (a) CONSULTANT shall defend, indemnify and hold DISTRICT, including its directors, officers, employees and agents, harmless from and against any and all claims, demands, causes of action, suits, debts, obligations, liabilities, losses, damages, costs, expenses, attorney’s fees, awards, fines, settlements, judgments or losses of whatever nature, character, and description, that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT or any of CONSULTANT’s subcontractors, including their respective directors, officers, employees, agents and assigns, excepting only such matters arising from the sole negligence or willful misconduct of the DISTRICT. (b) CONSULTANT shall defend, indemnify and hold DISTRICT, including its directors, officers, employees and agents, harmless from and against any and all claims, demands, causes of action, suits, debts, obligations, liabilities, losses, damages, costs, expenses, attorney’s fees, awards, fines, settlements, judgments or losses of whatever nature, character, and description, with respect to or arising out of any infringement or alleged infringement of any patent, copyright or trademark and arising out of the use of any equipment or materials furnished under this Agreement by the CONSULTANT or CONSULTANT’s subcontractors, including their respective directors, officers, employees, agents and assigns, or out of the processes or actions employed by, or on behalf of, the CONSULTANT or CONSULTANT’s subcontractors, including their respective directors, officers, employees, agents and assigns, in connection with the performance of services under this Agreement. CONSULTANT shall have the right, in order to avoid such claims or actions, to substitute at its expense non-infringing equipment, materials or processes, or to modify - 19 - at its expense such infringing equipment, materials, and processes so they become non-infringing, provided that such substituted and modified equipment, materials, and processes shall meet all the requirements and be subject to all the provisions of this Agreement. (c) CONSULTANT shall defend, indemnify and hold DISTRICT, including its directors, officers, employees and agents, harmless from and against any and all claims, demands, causes of action, suits, debts, obligations, liabilities, losses, damages, costs, expenses, attorney’s fees, awards, fines, settlements, judgments or losses of whatever nature, character, and description, with respect to or arising out of any breach by CONSULTANT or CONSULTANT’s subcontractors, including their respective directors, officers, employees, agents and assigns, of the aforesaid obligations and covenants, and any other provision or covenant of this Agreement. (d) It is the intent of the parties to this Agreement that the defense, indemnity, and hold harmless obligation of CONSULTANT under this Agreement shall be as broad and inclusive as may be allowed under California Civil Code § 2778 through 2784.5, or other similar state or federal law. 6.10 SAFETY: CONSULTANT shall perform the work in full compliance with applicable State and Federal safety requirements including, but not limited to, Occupational Safety and Health Administration requirements. (a) CONSULTANT shall take all precautions necessary for the safety of, and prevention of damage to, property on or adjacent to the Project site, and for the safety of, and prevention of injury to, persons, including DISTRICT’s employees, CONSULTANT’s employees, and third persons. All work shall be performed entirely at CONSULTANT’s risk. CONSULTANT shall comply with the insurance requirements set forth in Section 6.3 of this Agreement. (b) CONSULTANT shall also furnish the DISTRICT with a copy of any injury prevention program established for the CONSULTANT’s employees pursuant to Labor Code Section 6401.7, including any necessary documentation regarding implementation of the program. CONSULTANT hereby certifies that its employees have been trained in the program, and procedures are in place to train employees whenever new substances, processes, procedures, or equipment are introduced. CONSULTANT shall demonstrate compliance with Labor Code Section 6401.7 by maintaining a copy of its Injury and Illness Prevention Plan at the Project site and making it available to the DISTRICT. 6.11 EXAMINATION OF RECORDS: All original drawings, specifications, reports, calculations, and other documents or electronic data developed by CONSULTANT for the Project shall be furnished to and become the property of the DISTRICT. CONSULTANT agrees that the DISTRICT will have access to and the right to examine any directly pertinent books, documents, papers, and records of any and all of the transactions relating to this Agreement. - 20 - 6.12 OWNERSHIP OF SOFTWARE: (a) Subject to payment of all compensation due under this Agreement and all other terms and conditions herein, CONSULTANT hereby grants DISTRICT a nonexclusive, transferable, royalty-free license to use the Software furnished to DISTRICT by CONSULTANT under this Agreement. The license granted herein shall authorize DISTRICT to: (1) Install the Software on computer systems owned, leased or otherwise controlled by DISTRICT; (2) Utilize the Software for its internal data-processing purposes; and (3) Copy the Software and distribute as desired to exercise the rights granted herein. (b) CONSULTANT retains its entire right, title and interest in the Software developed under this Agreement. DISTRICT acknowledges that CONSULTANT owns or holds a license to use and sublicense various pre-existing development tools, routines, subroutines and other programs, data and materials that CONSULTANT may include in the Software developed under this Agreement. This material shall be referred to hereafter as “Background Technology.” (c) DISTRICT agrees that CONSULTANT shall retain any and all rights CONSULTANT may have in the Background Technology. CONSULTANT grants DISTRICT an unrestricted, nonexclusive, perpetual, fully paid-up worldwide license to use the Background Technology in the Software developed and delivered to DISTRICT under this Agreement, and all updates and revisions thereto. However, DISTRICT shall make no other commercial use of the Background Technology without CONSULTANT’s written consent. 6.13 INTEGRATION AND AMENDMENT: This Agreement contains the entire understanding between the DISTRICT and CONSULTANT as to those matters contained herein. No other representations, covenants, undertakings or other prior or contemporaneous agreements, oral or written, respecting those matters, which are not specifically incorporated herein, may be deemed in any way to exist or to bind any of the parties hereto. Each party acknowledges that it has not executed this Agreement in reliance on any promise, representation or warranty not set forth herein. This Agreement may not be amended except by a writing signed by all parties hereto. 6.14 ASSIGNMENT: Neither party shall assign or transfer its interest in this Agreement without written consent of the other party. All terms, conditions, and provisions of this Agreement shall inure to and shall bind each of the parties hereto, and each of their respective heirs, executors, administrators, successors, and assigns. 6.15 GOVERNING LAW: This Agreement shall be construed as if it was jointly prepared by both parties hereto, and any uncertainty or ambiguity contained herein shall not be interpreted against the party drafting same. This Agreement shall be enforced and governed by the laws of the State of - 21 - California. If any action is brought to interpret or enforce any term of this Agreement, the action shall be brought in a state court situated in the County of San Bernardino, State of California, or in a federal court with in rem jurisdiction over the Project. 6.16 HEADINGS: Article and Section headings in this Agreement are for convenience only and are not intended to be used in interpreting or construing the terms, covenants, and conditions of this Agreement. 6.17 PARTIAL INVALIDITY: If any term, covenant, condition, or provision of this Agreement is found by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions hereof shall remain in full force and effect, and shall in no way be affected, impaired, or invalidated thereby. 6.18 EFFECT OF DISTRICT’S WAIVER: Any failure by the DISTRICT to enforce any provision of this Agreement, or any waiver thereof by the DISTRICT, shall not constitute a waiver of its right to enforce subsequent violations of the same or any other terms or conditions herein. 6.19 AUTHORITY: The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to sign this Agreement on behalf of and to so bind their respective legal entities. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. CONSULTANT DISTRICT By: _____________________________ By:_____________________________ (Print Name and Title) _____________________________ East Valley Water District (Print Company Name) . - 22 - PROPOSAL RESPONSES 1. Proposal Due Date: Wednesday, February 23, 2022 2. Digital Submittal Instructions: Please Email Proposals to: finance@eastvalley.org Please type the following in the Subject of the Email: “RFP - Professional Audit Services 2022” INQUIRIES AND REQUEST FOR INFORMATION Contact Information: Contact:Rudy Guerrero Brian Tompkins, CPA Title:Finance Supervisor Chief Financial Officer Phone Number:(909) 381-6463 (909) 381-6463 Fax Number:(909) 784-0285 (909) 784-0285 E-Mail:rguerrero@eastvalley.org btompkins@eastvalley.org EVALUATION PROCESS Proposals will be evaluated by the District staff to ascertain which auditing firm best meets the needs of the District. Factors that will be considered include: 1. The Request for Proposal was returned complete and in accordance with Proposal requirements. 2. Professional qualifications of the firm and proposed audit team. 3. Professional experience of the firm, including similar experience in like-sized water agencies. 4. Professional approach to assignment and willingness to work with the District staff. 5. Quality of references as they pertain to firm’s ability to perform audit services. 6. The audit fees. Based on the evaluation of the proposals, and according to the above criteria, the most qualified firms will be asked to participate in an oral interview. - 23 - AFFIRMATION AND AUTHORIZATION Please sign and include this page with your proposal. NAME OF BIDDER: TITLE: FIRM NAME: STREET ADDRESS: CITY, ZIP FEDERAL TAX I.D. TELEPHONE NUMBER: FAX NUMBER: E-MAIL ADDRESS The undersigned declares that he/she is authorized to enter into an agreement on behalf of the above- named Company. Signature: _______________________________________________________ East Valley Water District Request for Proposal - List of Firms Professional Audit Services 2022 FIRM OFFICE LOCATION CliftonLarsonAllen LLP Glendora DavisFarr Certified Public Accountants Irvine Eadie & Payne LLP, CPAs Riverside Eide Bailly LLP Rancho Cucamonga Fechter & Company, CPAs Sacramento Lance, Soll & Lunghard, CPAs LLP Brea Rogers, Anderson, Malody & Scott, LLP San Bernardino The Pun Group, LLP Santa Ana Van Lant & Fankhanel, LLP Loma Linda Agenda Item #4 February 8, 20221 3 0 8 Meeting Date: February 8, 2022 Agenda Item #4 Informational Item Regular Meeting TO: Committee Members FROM: Chief Financial Officer SUBJECT: Review Community Facilities District (CFD) Administration Services Proposal RECOMMENDATION This agenda item is for informational purposes only, no action required. BACKGROUND / ANALYSIS The formation documents related to the Highland Hills and Mediterra Community Facilities Districts included a commitment by the District to provide ongoing administration for the CFDs. The largest part of administration will be collecting assessments from property owners, both before and after issuing CFD bonds, in order to pay ongoing costs of the CFDs. Koppel & Gruber Public Finance (KGPF) was the special tax consulting firm selected to assist EVWD with formation of the CFDs. Their work included preparing and filing parcel maps with the County Assessor’s Office and calculating the Rates and Methods of Apportionment for assessing CFD property owners. KGPF was selected, following the District’s procurement procedures, and performed their work thoroughly and timely throughout the CFD formation process. They also helped educate staff on CFD administration. For these reasons staff recommends that the Board authorize an Agreement for CFD Administration Services with KGPF. The long list of services KGPF will provide is included in their attached proposal. The annual cost for services will be between $4,650 and $8,000, depending on the number of parcels that have been developed. These costs are reimbursable to the District from property owner assessments. AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability A. Practice Transparent and Accountable Fiscal Management IV - Promote Planning, Maintenance and Preservation of District Resources B. Enhance Planning Efforts that Respond to Future Demands REVIEW BY OTHERS This agenda item has been reviewed by the Finance Department. Agenda Item #4 February 8, 20222 3 0 8 Meeting Date: February 8, 2022 Agenda Item #4 Informational Item FISCAL IMPACT There is no fiscal impact associated with this agenda item. Recommended by: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS KGPF Proposal 334 VIA VERA CRUZ, SUITE 256  SAN MARCOS, CALIFORNIA  92078 760.510.0290 FAX 760.510.0288 PROPOSAL FOR COMMUNITY FACILITIES DISTRICT ANNUAL ADMINISTRATION SERVICES FOR EAST VALLEY WATER DISTRICT JANUARY 18, 2021 334 VIA VERA CRUZ, SUITE 256  SAN MARCOS, CALIFORNIA  92078 760.510.0290 FAX 760.510.0288 January 18, 2022 Via Email Brian Tompkins Chief Financial Officer East Valley Water District 31111 Greenspot Rd Highlands, CA 92346 RE: PROPOSAL TO PROVIDE COMMUNITY FACILITIES DISTRICT ANNUAL ADMINISTRATION FOR THE EAST VALLEY WATER DISTRICT Dear Mr. Tompkins: Koppel & Gruber Public Finance (“K&G Public Finance”) is pleased to present our Proposal to provide Community Facilities District (“CFD”) annual administration services for the East Valley Water District (“Water District”). Our firm prides itself in being flexible, responsive and able to customize our services to meet your specific needs and is excited with the opportunity to provide additional services to the Water District. Scott Koppel will be the Water District’s Principal in charge and will oversee the annual administration and be available for Board meetings and other meetings as necessary. Douglas Floyd will act as project manager and will be responsible for accurate and timely delivery of work product, attendance and participation at meetings, and will be available to make presentations at Board meetings. We look forward to the opportunity of continuing to work with the Water District on CFD annual administration and have the staff in place to meet the Water District’s needs. Please feel free to contact me if you have any questions about our proposal at (760) 510-0290 or you may email me at scott@kgpf.net. Sincerely, Scott Koppel TABLE OF CONTENTS TABLE OF CONTENTS ................................................................ 1 I. Project Understanding .......................................................... 1 II. Qualifications ........................................................................ 2 III. Scopes of Services ................................................................. 3 A. Annual Administration Services ..................................................................................... 3 B. Continuing Disclosure (Annually Upon Issuance CFD Bonds) ................................... 5 C. Bond Issuance Participation (Upon Issuance of CFD Bonds) ..................................... 6 IV. Compensation ....................................................................... 7 A. Formation and Administration Related Fees ................................................................ 7 B. Billing .............................................................................................................................. 7 C. Expenses .......................................................................................................................... 7 D. Additional Work .............................................................................................................. 7 Koppel & Gruber Public Finance 1 CFD Administration Services East Valley Water District I. PROJECT UNDERSTANDING We understand the East Valley Water District (“Water District”) is seeking assistance in the administration of their Community Facilities District (“CFDs”) and in the future assisting with the reporting requirements on the CFD bond issue. The Water District currently has two CFDs, CFD No. 2020-1 (Highland Hills) and CFD No. 2021-1 (Mediterra). Both CFDs include multiple Improvement Areas ( “IAs”) and CFD No. 2021-1 has two zones within each of the IAs. IA No. 1 of CFD No. 2021-1 (Mediterra) consists of 149 single family lots that is being actively developed by DR Horton and will soon begin pulling building permits for their project titled Vista Verde at Mediterra. IA 2 of CFD No. 2021-1 (Mediterra) as well as the three planning areas in CFD No. 2020-1 (Highland Hills) remain largely undeveloped at this time but will be monitored for active development. Koppel & Gruber Public Finance 2 CFD Administration Services East Valley Water District II. QUALIFICATIONS Koppel & Gruber Public Finance (“K&G Public Finance”) is by design an entrepreneurial firm dedicated to sustainable growth, currently with eight employees. We have been providing consulting services for school districts and other public agencies since 2004 specifically related to community facilities district formation, administration, bond continuing disclosure, developer fees studies and reporting. Additionally, the partners of the firm, Scott Koppel and Lyn Gruber, each have over twenty-five years of consulting services experience with various types of special districts (community facilities district, assessment districts, maintenance districts, etc.) and Douglas Floyd, Senior Associate, has over eighteen years of experience providing consulting services with a specific focus on school districts. K&G Public Finance’s expertise includes the following:  CFD Administration  CFD Formation  Bond Issue and Refunding Services  Bond Issuance Data Tables  GIS Mapping  Arbitrage calculations  Bond Continuing Disclosure  Mitigation fee calculation  Feasibility Studies We have extensive experience in working with cities, school districts, water districts and other public agencies across the State. Since 2004 we have been involved with the formation and administration of over 100 CFDs. Our goal is to provide our clients the highest level of service with an experienced, stable team of consultants. You will work directly with the partners and with K&G Public Finance you won’t have to worry about the transition from one staff member to another that often takes place with larger consulting companies. We take pride in being able to respond quickly to our clients and property owner needs and working with our clients to meet their specific service requests. K&G Public Finance has a multiple step review policy for any work product. This includes task completion and review check-off sheets so that the risk of missing an important step is minimized. In addition, each work product is reviewed by another staff member or members prior to distribution or submittal. Furthermore, our Geographical Information System (GIS) capabilities enable us to visualize, analyze and present CFD parcel and levy data through mapping tools. Finally, with any task involving submittal of work product or data to a third- party, such as dissemination of disclosure reports or enrollment of taxes with the County, we obtain and keep on record documented confirmation of receipt by the third-party. Koppel & Gruber Public Finance 3 CFD Administration Services East Valley Water District III. SCOPES OF SERVICES K&G Public Finance proposes to provide the following scope of services relating to the annual administration of the CFDs A. Annual Administration Services 1. Attend meetings, or phone calls, with respect to the ongoing administration of the CFDs. Develop effective channels of communication to facilitate the smooth administration of the CFDs. 2. Annually update the parcel databases used in maintaining and calculating the annual tax requirements with building permit data, certificates of compliance or other taxing triggers, parcel changes, prepaid parcels, County Secured Roll information such as land use, acreage, assessed values and ownership data. 3. Compile and maintain maps necessary to the administration of the CFDs which include APN maps and to the extent necessary, tract maps. 4. Classify parcels by land use classification as defined in the Rate and Method of Apportionments (“RMA”) which typically include Exempt Property, Taxable Property, Developed Property and Undeveloped Property as well as special tax classes/zones as further defined in the RMA. Calculate the special tax rates and back up special tax in accordance with the escalation provisions of the RMA. 5. Monitor CFD tax apportionments from the County of San Bernardino. 6. Work with the Water District to recover all costs associated with the ongoing administration of the CFDs, including, but not limited to, staff time, County costs, trustee fees, consultant fees, and legal fees. Facilitate transfers as necessary. 7. Determine the annual budget for the CFDs, typically called the Special Tax Requirement. This includes but is not limited to, debt service needs (if applicable), administrative costs identified in Step 6, funds to be used for pay as you go construction and replenishment of reserves. Facilitate transfers as necessary. 8. Spread the Special Tax Requirement to the Taxable parcels within the CFDs in accordance with the RMA. 9. Prepare Staff reports and Resolutions needed to approve the Annual Levy and provide reports that may be helpful for presentation to the School Board. 10. Place the appropriate charges on the County Tax Roll in the required format and provide the Water District with a verification of the total amount placed on the tax roll. Research any exceptions and resubmit if possible and/or mail direct billings for parcels not able to be placed on the County Tax Roll. 11. Prepare an Annual Report for the CFDs including the annual budget, a list of valid assessor parcels, the calculated rates for each parcel based upon the RMA, describe development changes, delinquency summary, fund balances, debt service statements (if any) and other pertinent information about the CFDs. This provides the Water District a summary of the calculation of the annual special tax for easy access and reference. Koppel & Gruber Public Finance 4 CFD Administration Services East Valley Water District 12. Answer property owner and other interested parties questions regarding the CFDs or special taxes placed on the tax roll and provide a quarterly report of such communication. This helps to minimize Water District staff time spent on the CFD. We also provide a toll-free phone number that is placed on the tax bill next to the special tax. Our company policy is to respond to all calls and inquiries as soon as possible but no later than 24 hours. 13. Through the monitoring of the County’s apportionment reports, track delinquent payments and provide the Water District with semi-annual reports and fiscal year end reports. Our procedures will follow the foreclosure covenants upon issuance of bonds and typically include the following; a. Prepare and, with the Water District’s approval, mail delinquency letters to delinquent property owners after each installment and at the end of the fiscal year to comply with the foreclosure covenant set forth in the bond documents. b. After the letter campaign is completed and in coordination with the Water District, remove any qualifying parcels from tax roll and turn over to Foreclosure Counsel, if required. c. Coordinate with the Water District on the acceptance of direct payments of special taxes to avoid foreclosure. d. Coordinate with the Water District and Foreclosure Counsel during the foreclosure process. 14. Attend Water District Board Meetings to approve the annual special tax rates or other CFD related items as necessary. 15. Calculate and prepare written prepayment quotes (partial or in full) for individual parcels as requested. A reasonable fee for this service may be charged directly to the party requesting the prepayment and will not be charged to the Water District. Prepare bond calls as stated in Step 6 above. 16. Compile and submit required annual reports, as necessary, including; a. CDIAC (California Debt and Investment Advisory Commission) reports, b. California State Controller’s Special District Financial Transactions Report, c. Continuing disclosure reports for the bond issue(s) (see Section 3B for more detail). Continuing disclosure reports will be disseminated to the Municipal Securities Rulemaking Board through the Electronic Municipal Marketing Access (“EMMA”), and any other party as required pursuant to the continuing disclosure agreement (i.e. Fiscal Agent, participating underwriter), d. Local Agency Special Tax and Bond Accountability Act required under Government Code Sections 50075.3 or 53411, and e. Significant Events shall be monitored and reported on as required based on the continuing disclosure agreements. 17. Prepare “Notice of Special Tax” as provided for in Government Code 53340.2(b) and 53341.5. A fee of $15.00 may be charged to the requestor. Koppel & Gruber Public Finance 5 CFD Administration Services East Valley Water District 18. If requested by a person who resides in or owns property within the CFD, prepare an “Annual Report” as provided for in Government Code 53343.1. A fee for the cost of preparing the report may be charged by the Water District to the requesting party. 19. Respond to Special Tax appeals, confer with Water District and provide summaries to the Water District. 20. Prepare GIS maps related to the CFD as requested. B. Continuing Disclosure (Annually Upon Issuance CFD Bonds) 1. Compile continuing disclosure reports under SEC Rule 15c2-12 and in accordance with the Disclosure Agreement/Certificate. 2. Disseminate continuing disclosure reports as required either annually or semi-annually, to the Electronic Municipal Market Access (“EMMA”). 3. Provide a compliance summary report annually which shows the reports and documents filed on behalf of the Water District as well as the date filed. 4. Publish continuing disclosure reports on the Community Facilities District Website, if requested. 5. Assist with investor inquiries. 6. Monitor all “significant events” as defined in the Disclosure Agreement/Certificate and prepare and publish significant event notices as necessary. The significant events monitored include the following: a. Principal and interest payment delinquencies; b. Non-payment related defaults. c. Unscheduled draws on debt service reserves reflecting financial difficulties; d. Unscheduled draws on credit enhancements reflecting financial difficulties; e. Substitution of credit or liquidity providers, or their failure to perform; f. Adverse tax opinions or issuance by the Internal Revenue Service of proposed or final determination of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB); g. Modifications to rights of security holders; h. Unscheduled bond calls or tender offers; i. Defeasances; j. Release, substitution, or sale of property securing repayment of the securities; k. Rating changes; l. Bankruptcy, insolvency, receivership or similar event of the Water District. m. Merger, acquisition or sale of all issuer assets; n. Appointment of successor trustee; o. Financial obligation incurrence or agreement, if material* Koppel & Gruber Public Finance 6 CFD Administration Services East Valley Water District p. Default, event of acceleration, termination event, modification of terms or other similar events under the terms of a financial obligation of the obligated person, any of which reflect financial difficulties* *Effective for Bonds issued on or after February 27, 2019 C. Bond Issuance Participation (Upon Issuance of CFD Bonds) 1. Create tables for the Preliminary Official Statement (POS) and Official Statement (OS). These tables typically include: a. Maximum special tax coverage. b. Effective tax rate table showing the projected tax rate on an average developed parcel in the CFD. c. Projected special taxes based on development status at bond sale. d. Sample tax bill. e. Direct and overlapping debt. f. Top owners. g. Value to lien range summaries. h. Historical delinquencies and assessed value. Additional tables may be necessary based on team discussion. 2. Review and comment on the Fiscal Agent Agreement/Trust Indenture, Preliminary Official Statements and Official Statements with respect to information included in the CFD Report, additional bond issues, foreclosure covenants, disclosure agreements, flow of funds, arbitrage requirements, and escrowed proceeds (if applicable). 3. Review and sign the Special Tax Consultant Certificate certifying the maximum special tax rates are sufficient to meet debt service and coverage requirements in relation to the issuance of bonds. Koppel & Gruber Public Finance 7 CFD Administration Services East Valley Water District IV. COMPENSATION A. Formation and Administration Related Fees K&G Public Finance will provide the above listed Scope of Services for the fixed fees described below. We will only bill on CFDs and IAs that are actively being developed or built out and will not charge for inactive CFDs. TASK FEES Annual CFD Administration(1) CFD Fee Per Improvement Area – Prior to Bond Issue $4,650 plus $2.50 per parcel CFD Fee Per Improvement Area – After Bond Issue $6,850 plus $2.50 per parcel Continuing Disclosure (After Bond Issuance) CFD Bond Issues Included in administration fee Significant Event Notice (per event) $565 CFD Bond Issuance $20,500 per bond issue Additional Improvement Areas in bond issuance (per IA) $2,500 I. Initially we will only bill for CFD No. 2021-1 (Mediterra) IA No. 1 and will notify the Water District prior to commencing work on additional IAs. B. Billing K&G Public Finance will invoice on a quarterly basis for Annual Administration and upon completion of project for all other services. The quoted fees will be subject to an annual Consumer Price Index increase for Riverside-San Bernardino-Ontario, CA Area All Urban Consumer Price Index (All Items) beginning April 2023. C. Expenses In addition to fees for services, K&G Public Finance shall be reimbursed for direct expenses for: travel, photocopying, data sources, courier services, recording fees, direct and overlapping debt statements and overnight delivery at our cost (no minimum or mark-up). D. Additional Work If authorized by the Water District, K&G Public Finance will provide additional services not included in the above scopes of services at the hourly rates set forth in the table below unless otherwise agreed upon between the Water District and K&G Public Finance. TITLE RATE Principal $240 Senior Associate 185 Associate 135 Production/Administration 85