Loading...
HomeMy WebLinkAboutAgenda Packet - Finance & Human Resources Committee - 07/08/2025FINANCE & HUMAN RESOURCES COMMITTEE JULY 8, 2025 East Valley Water District was formed in 1954 and provides water and wastewater services to 108,000 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 Ronald L. Coats Governing Board Member Finance & Human Resources Committee Meeting July 08, 2025 ­ 1:30 PM 31111 Greenspot Road, Highland, CA 92346 www.eastvalleywater.gov 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 April 8, 2025 Finance & Human Resources Committee Meeting Minutes 2.Approve the May 13, 2025 Finance & Human Resources Committee Meeting Minutes INFORMATIONAL ITEMS 3.Review Letter Regarding Auditor Responsibilities and Planning Document from Rogers, Anderson, Malody & Scott, LLP for Preparation of the District's FY 2024­25 Audit 4.Update on Reclamation Rate Study REPORTS 5.Finance Activities 6.Human Resource Activities ADJOURN FINANCE & HUMAN RESOURCES COMMITTEEJULY 8, 2025East Valley Water District was formed in 1954 and provides water and wastewater services to108,000 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 Ronald L. Coats Governing Board Member Finance & Human Resources Committee Meeting July 08, 2025 ­ 1:30 PM 31111 Greenspot Road, Highland, CA 92346 www.eastvalleywater.gov 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 April 8, 2025 Finance & Human Resources Committee Meeting Minutes 2.Approve the May 13, 2025 Finance & Human Resources Committee Meeting Minutes INFORMATIONAL ITEMS 3.Review Letter Regarding Auditor Responsibilities and Planning Document from Rogers, Anderson, Malody & Scott, LLP for Preparation of the District's FY 2024­25 Audit 4.Update on Reclamation Rate Study REPORTS 5.Finance Activities 6.Human Resource Activities ADJOURN FINANCE & HUMAN RESOURCES COMMITTEEJULY 8, 2025East Valley Water District was formed in 1954 and provides water and wastewater services to108,000 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 Ronald L. CoatsGoverning Board MemberFinance & Human Resources Committee MeetingJuly 08, 2025 ­ 1:30 PM31111 Greenspot Road, Highland, CA 92346www.eastvalleywater.govPLEASE 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 April 8, 2025 Finance & Human Resources Committee Meeting Minutes 2.Approve the May 13, 2025 Finance & Human Resources Committee Meeting Minutes INFORMATIONAL ITEMS 3.Review Letter Regarding Auditor Responsibilities and Planning Document from Rogers, Anderson, Malody & Scott, LLP for Preparation of the District's FY 2024­25 Audit 4.Update on Reclamation Rate Study REPORTS 5.Finance Activities 6.Human Resource Activities ADJOURN Agenda Item #1 July 8, 20251 Meeting Date: July 8, 2025 1 5 8 9 Regular Meeting TO: Committee Members FROM: Chief Financial Officer SUBJECT: Approve the April 8, 2025 Finance & Human Resources Committee Meeting Minutes RECOMMENDATION That the Finance & Human Resources Committee approve the April 8, 2025 meeting minutes. DISTRICT PILLARS AND STRATEGIES V - Community Engagement, Advocacy, and Leadership a. Utilize Effective Communication Methods to Foster Exceptional Community Relations FISCAL IMPACT There is no fiscal impact associated with this agenda item. Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS April 8, 2025 Minutes Page 1 of 2 2 2 8 4 Draft pending approval EAST VALLEY WATER DISTRICT April 8, 2025 FINANCE & HUMAN RESOURCES COMMITTEE MEETING MINUTES PUBLIC COMMENTS APPROVAL OF CONSENT CALENDAR UPDATE ON DISTRICT COMPLIANCE WITH NEW LEGAL OBLIGATIONS UNDER AB 2561 REQUIRING PUBLIC AGENCIES TO PRESENT ANNUAL UPDATE ON VACANCIES AND RECRUITMENT AND RETENTION EFFORTS Page 2 of 2 2 2 8 4 hearing, annually, to give an update on vacancies and recruitment efforts. She also stated that the District’s vacancy rate is extremely low at 2.2% and falls well below the 20% threshold; and additional reporting requirements do not apply to the District. FISCAL YEAR 2025-26 PROPOSED CAPITAL IMPROVEMENT PROGRAM BUDGET SET THE DAY AND TIME FOR HOLDING RECURRING MEETINGS FINANCE ACTIVITIES HUMAN RESOURCE ACTIVITIES ADJOURN Agenda Item #2 July 8, 20251 Meeting Date: July 8, 2025 1 5 9 8 Regular Meeting TO: Committee Members FROM: Chief Financial Officer SUBJECT: Approve the May 13, 2025 Finance & Human Resources Committee Meeting Minutes RECOMMENDATION That the Finance & Human Resources Committee approve the May 13, 2025 meeting minutes. DISTRICT PILLARS AND STRATEGIES V - Community Engagement, Advocacy, and Leadership a. Utilize Effective Communication Methods to Foster Exceptional Community Relations FISCAL IMPACT There is no fiscal impact associated with this agenda item. Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS May 13, 2025 Minutes Page 1 of 2 2 2 8 4 Draft pending approval EAST VALLEY WATER DISTRICT May 13, 2025 FINANCE & HUMAN RESOURCES COMMITTEE MEETING MINUTES PUBLIC COMMENTS COMMERCIAL, INDUSTRIAL AND INSTITUTIONAL (CII) CUSTOMERS AND WATER USE EFFICIENCY (WUE) REGULATIONS FINANCE ACTIVITIES Page 2 of 2 2 2 8 4 HUMAN RESOURCE ACTIVITIES The Director of Administrative Services congratulated Rudy Guerrero on his promotion to Finance Manager. She also gave updates regarding employee evaluations and the new mentoring program for Indian Springs High School students. The meeting adjourned at 2:04 p.m. Ronald L. Coats David E. Smith Governing Board Member Governing Board Member Agenda Item #3 July 8, 20251 Meeting Date: July 8, 2025 1 5 9 1 Regular Meeting TO: Committee Members FROM: Chief Financial Officer SUBJECT: Review Letter Regarding Auditor Responsibilities and Planning Document from Rogers, Anderson, Malody & Scott, LLP for Preparation of the District's FY 2024-25 Audit RECOMMENDATION This agenda item is for informational purposes only, no action is required. BACKGROUND / ANALYSIS Each year the East Valley Water District (District) contracts an independent financial auditor to review the prior year’s financial statements. The audit is both an industry best practice and a requirement of the State Controller Minimum Audit Requirements for California Special Districts. The independent Auditor selected for Fiscal Year 2024-25 review is Rogers, Anderson, Malody & Scott, LLP (RAMS). After completion of their audit, a report will be provided directly to the Board of Directors (Board). As auditing is a review of managements’ activities, this introduction is essential for establishing a line of communication between the auditors and Board without facilitation from staff. RAMS has provided a Communication Letter to the Board regarding auditor responsibilities to help ensure there is no expectation gap regarding the audit services for the fiscal year ended June 30, 2025. Also attached is a schedule/timeline for the work to be performed over the next four months. RAMS will also provide a presentation on their upcoming audit process and will be present to answer any questions. DISTRICT PILLARS AND STRATEGIES II - Sustainability, Transparency, and Accountability a. Uphold Transparent and Accountable Fiscal and Resource Management FISCAL IMPACT This item is included in the FY 2025-26 budget in the amount of $38,455. This item is for information only and authorized by adoption of the FY 2025-26 Budget. Agenda Item #3 July 8, 20252 Meeting Date: July 8, 2025 1 5 9 1 Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS Presentation-RAMS Communication Letter 2024-25 RAMS Auditing Plan East Valley Water District For the year ended June 30, 2025 PRE-AUDIT PLANNING MEETING JULY 8, 2025 VERONICA HERNANDEZ MANAGER Table of Contents Audit Issues General Audit Information Audit Responsibilities Audit Timing Risk Assessment Procedures Audit Issues Upcoming Pronouncements: ◦GASBS No. 101, Compensated Absences, FY 25 ◦GASBS No. 102, Certain Risk Disclosures, FY 25 ◦GASBS No. 103, Financial Reporting Model Improvements, FY 26 ◦GASB No. 104, Disclosures of Certain Capital Assets, FY 26 General Audit Information •Audit of District’s financial statements in accordance with: •US Generally Accepted Auditing Standards, •Government Auditing Standards , and •the State Controllers Minimum Audit Requirements for Special Districts •Single Audit, if required Audit scope •Opinion on audited financial statements •SAS 114 Post audit communication •Report on Internal Control and Compliance •Report of Compliance over Major Federal Programs (if Single Audit required) Audit deliverables Audit Responsibilities •Overseeing strategic direction of District •Oversight of District management •Accountability, including the financial reporting of District (Fiduciary) Governance •Provide auditor access to relevant information, additional information requested, and unrestricted access to personnel •A system of internal controls relevant to the preparation and presentation of the financial statements (including programs to prevent and detect fraud) •Preparation and fair presentation of District financial statements in accordance with GAAP Management •Perform audits in accordance with various standards •Reports to Governance •Report any significant deficiencies or material weaknesses (required) •Express opinion on managements financial statements •Reasonable (defined as a high level of assurance ), not absolute assurance financial statements are free of material misstatements, as a whole, whether due to fraud or error Auditor Audit Timing Audit planning – continuous Interim audit – May Year-end audit - September Reporting - October Risk Assessment Procedures •Interviews with staff •Walkthroughs •Review over Policy manuals Update understanding of internal control processes •Cash disbursements (including bank reconciliations, contracts, and Cal-cards) •Payroll •Billings (recalculate small sample) Test internal controls (as needed) •Recommend improvements over internal control processes •Communicate any significant deficiencies, and/or •Material weaknesses Document and present any possible findings •Assess overall risk of material misstatement •Develop customized audit programs •Obtain sufficient appropriate audit evidence to render an opinion Substantive testing Risk Assessment Procedures (continued) Presumptive/inherent risks in all audits Revenue Recognition Management override of internal controls Rogers, Anderson, Malody & Scott, LLP Questions? Tel. 909-889-0871 | www.ramscpa.net | 735 E. Carnegie Dr. Suite 100, San Bernardino, CA 92408 CERTIFIED PUBLIC ACCOUNTANTS -1- April 15, 2025 To the Board of Director East Valley Water District Highland, California This letter is provided in connection with our engagement to audit the financial statements of the East Valley Water District (the entity) as of and for the year ended June 30, 2025. Professional standards require that we communicate with you certain items including our responsibilities with regard to the financial statement audit and the planned scope and timing of our audit, including significant risks we have identified. Our Responsibilities As stated in our engagement letter dated April 15, 2025, we are responsible for conducting our audit in accordance with auditing standards generally accepted in the United States of America, Government Auditing Standards and the State Controller’s Minimum Audit Requirements for California Special Districts, for the purpose of forming and expressing an opinion about whether the financial statements that have been prepared by management, with your oversight, are prepared, in all material respects, in accordance with accounting principles generally accepted in the United States of America, as well as accounting systems prescribed by the California State Controller’s Office and State regulations governing special districts. Our audit does not relieve you or management of your respective responsibilities. Our responsibility relating to other information, whether financial or nonfinancial information (other than financial statements and the auditor’s report thereon), included in the entity’s annual report includes only the information identified in our report. We have no responsibility for determining whether the introductory or statistical information is properly stated. We require that we receive the final version of the annual report (including all the documents that, together, comprise the annual report) in a timely manner prior to the date of the auditor’s report, or if that is not possible, as soon as practicable and, in any case, prior to the entity’s issuance of such information. Planned Scope of the Audit Our audit will include examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. Our audit is designed to provide reasonable, but not absolute, assurance about whether the financial statements as a whole are free of material misstatement, whether due to error, fraudulent financial reporting, misappropriation of assets, or violations of laws or governmental regulations. Because of this concept of reasonable assurance and because we will not examine all transactions, there is a risk that material misstatements may exist and not be detected by us. Our audit will include obtaining an understanding of the entity and its environment, including its internal control, sufficient to assess the risks of material misstatement of the financial statements and as a basis for designing the nature, timing, and extent of further audit procedures, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. However, we will communicate to you at the conclusion of our audit any material weaknesses or significant deficiencies identified. We will also communicate to you: Board of Directors East Valley Water District -2-  Any violation of laws or regulations that come to our attention;  Our views relating to qualitative aspects of the entity’s significant accounting practices, including accounting policies, accounting estimates, and financial statement disclosures;  Significant difficulties, if any, encountered during the audit;  Disagreements with management, if any, encountered during the audit;  Significant unusual transactions, if any;  The potential effects of uncorrected misstatements on future-period financial statements; and  Other significant matters that are relevant to your responsibilities in overseeing the financial reporting process. Our responsibility as auditors is, of course, limited to the period covered by our audit and does not extend to any other periods. Certain significant risks are presumptive in most audits and merit attention by the auditors due to the direct impact over financial reporting and internal control processes. Although we are currently in the planning stage of our audit, the following presumptive significant risks are applicable to our audit and require special audit considerations:  Management's override of internal controls over financial reporting: Auditors must consider and respond to the risk of management override of internal controls, which is the intervention by management in handling financial information and making decisions contrary to internal control policy.  Revenue recognition: Auditors must consider and respond to the risk of management subversion of generally accepted accounting principles in determining how and when revenue is recognized.  Significant estimates: Auditors must consider and respond to the risk of management bias in significant accounting estimates. Financial statement areas containing significant estimates can include, but are not limited to, net pension liability and related deferred inflows/outflows, net OPEB liability and related deferred inflows/outflows, leases receivable and related deferred inflows of resources, lease and subscription liabilities, right-to-use assets, depreciation and amortization expenses, and fair value measurements. We expect to begin our audit on approximately May 5, 2025. Scott Manno, CPA, CGMA is the engagement partner and is responsible for supervising the engagement and signing the report or authorizing another individual to sign it. This information is intended solely for the information and use of the Board of Directors and management of the entity and is not intended to be and should not be used by anyone other than these specified parties. Respectfully, Tel. 909-889-0871 | www.ramscpa.net | 735 E. Carnegie Dr. Suite 100, San Bernardino, CA 92408 CERTIFIED PUBLIC ACCOUNTANTS -1- April 15, 2025 To the Board of Directors East Valley Water District Highland, California The following represents our understanding of the services we will provide the East Valley Water District. You have requested that we audit the financial statements of the business-type activities and the aggregate remaining fund information of the East Valley Water District (the entity), as of June 30, 2025, and for the year then ended and the related notes, which collectively comprise the entity’s basic financial statements as listed in the table of contents. We are pleased to confirm our acceptance and our understanding of this audit engagement by means of this letter. The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the United States of America (GAAS), Government Auditing Standards and the State Controller’s Minimum Audit Requirements for California Special Districts will always detect a material misstatement when it exists. Misstatements, including omissions, can arise from fraud or error and are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. Accounting principles generally accepted in the United States of America (U.S. GAAP), as promulgated by the Governmental Accounting Standards Board (GASB) require that supplementary information, such as management’s discussion and analysis and budgetary comparison information be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the GASB, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. As part of our engagement, we will apply certain limited procedures to the required supplementary information (RSI) in accordance with GAAS. These limited procedures will consist primarily of inquiries of management regarding their methods of measurement and presentation and comparing the information for consistency with management’s responses to our inquiries. We will not express an opinion or provide any form of assurance on the RSI. The following RSI is required by U.S. GAAP. This RSI will be subjected to certain limited procedures but will not be audited: 1. Management's Discussion and Analysis 2. Pension Related Schedules 3. OPEB Related Schedules Board of Directors East Valley Water District -2- Supplementary information other than RSI will accompany the entity’s basic financial statements. We will subject the following supplementary information to the auditing procedures applied in our audit of the basic financial statements and perform certain additional procedures, including comparing and reconciling the supplementary information to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and additional procedures in accordance with GAAS. We intend to provide an opinion on the following supplementary information in relation to the basic financial statements as a whole: 1. Combining Statements/Schedules Also, the document we submit to you will include the following other additional information that will not be subjected to the auditing procedures applied in our audit of the basic financial statements: 1. Introductory Section 2. Statistical Section Auditor Responsibilities We will conduct our audit in accordance with GAAS, Government Auditing Standards and the State Controller’s Minimum Audit Requirements for California Special Districts. As part of an audit in accordance with these standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of control;  Obtain an understanding of the system of internal control in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. However, we will communicate to you in writing concerning any significant deficiencies or material weaknesses in internal control relevant to the audit of the financial statements that we have identified during the audit;  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation; and  Conclude, based on the audit evidence obtained, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern for a reasonable period of time. Because of the inherent limitations of an audit, together with the inherent limitations of internal control, an unavoidable risk that some material misstatements may not be detected exists, even though the audit is properly planned and performed in accordance with GAAS, Government Auditing Standards and the State Controller’s Minimum Audit Requirements for California Special Districts. Please note that the determination of abuse is subjective and Government Auditing Standards does not require auditors to detect abuse. Board of Directors East Valley Water District -3- Our responsibility as auditors is limited to the period covered by our audit and does not extend to any other periods. Compliance with Laws and Regulations As previously discussed, as part of obtaining reasonable assurance about whether the basic financial statements are free of material misstatement, we will perform tests of the entity’s compliance with the provisions of applicable laws, regulations, contracts, and agreements. However, the objective of our audit will not be to provide an opinion on overall compliance and we will not express such an opinion. Management Responsibilities Our audit will be conducted on the basis that management and, when appropriate, those charged with governance acknowledge and understand that they have responsibility:  For the preparation and fair presentation of the basic financial statements in accordance with U.S. GAAP;  For the design, implementation, and maintenance of the system of internal control relevant to the preparation and fair presentation of basic financial statements that are free from material misstatement, whether due to error, fraudulent financial reporting, misappropriation of assets, or violations of laws, governmental regulations, grant agreements, or contractual agreements; and  To provide us with: i. Access to all information of which management is aware that is relevant to the preparation and fair presentation of the basic financial statements such as records, documentation, and other matters; ii. Additional information that we may request from management for the purpose of the audit; iii. Unrestricted access to persons within the entity and others from whom we determine it necessary to obtain audit evidence; iv. A written acknowledgement of all the documents that management expects to issue that will be included in the annual report and the planned timing and method of issuance of that annual report; and v. A final version of the annual report (including all the documents that, together, comprise the annual report) in a timely manner prior to the date of the auditor’s report.  For including the auditor’s report in any document containing basic financial statements that indicates that such basic financial statements have been audited by us;  For identifying and ensuring that the entity complies with the laws and regulations applicable to its activities;  For adjusting the basic financial statements to correct material misstatements and confirming to us in the management representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the current year under audit are immaterial, both individually and in the aggregate, to the basic financial statements as a whole;  For acceptance of nonattest services, including identifying the proper party to oversee nonattest work;  For maintaining adequate records, selecting and applying accounting principles, and safeguarding assets;  For informing us of any known or suspected fraud affecting the entity involving management, employees with significant role in the system of internal control and others where fraud could have a material effect on the financials; and  For the accuracy and completeness of all information provided. Board of Directors East Valley Water District -4- With regard to the supplementary information referred to above, you acknowledge and understand your responsibility: (a) for the preparation of the supplementary information in accordance with the applicable criteria; (b) to provide us with the appropriate written representations regarding supplementary information; (c) to include our report on the supplementary information in any document that contains the supplementary information and that indicates that we have reported on such supplementary information; and (d) to present the supplementary information with the audited basic financial statements, or if the supplementary information will not be presented with the audited basic financial statements, to make the audited basic financial statements readily available to the intended users of the supplementary information no later than the date of issuance by you of the supplementary information and our report thereon. As part of our audit process, we will request from management and, when appropriate, those charged with governance, written confirmation concerning representations made to us in connection with the audit. Nonattest Services With respect to any nonattest services we perform, we will not assume any management responsibilities on behalf of the entity. However, we will provide advice and recommendations to assist management of the entity in performing its responsibilities. The following are nonattest services that may be requested by the entity, which can include, but are not limited to the following:  Propose adjusting or correcting journal entries to be reviewed and approved by management;  Assist management with drafting the financial statements based on the entity’s trial balances;  Other agreed upon procedures;  Annual Financial Transaction Report preparation; and  Assist management with completing the Data Collection Form and submitting to the Federal Audit Clearinghouse. The entity’s management is responsible for (a) making all management decisions and performing all management functions; (b) assigning a competent individual to oversee the services; (c) evaluating the adequacy of the services performed; (d) evaluating and accepting responsibility for the results of the services performed; and (e) designing, implementing, and maintaining the system of internal control, including the process used to monitoring the system of internal control. Our responsibilities and limitations of the nonattest services are as follows:  We will perform the services in accordance with applicable professional standards, and  The nonattest services are limited to the services requested by the entity, and agreed to by us. Our firm, in its sole professional judgment, reserves the right to refuse to do any procedure or take any action that could be construed as making management decisions or assuming management responsibilities, including determining account coding and approving journal entries. Board of Directors East Valley Water District -5- Reporting We will issue a written report upon completion of our audit of the entity’s basic financial statements. Our report will be addressed to the Board of Directors of the entity. Circumstances may arise in which our report may differ from its expected form and content based on the results of our audit. Depending on the nature of these circumstances, it may be necessary for us to modify our opinion, add an emphasis-of-matter or other-matter paragraph(s) to our auditor’s report, or if necessary, withdraw from the engagement. If our opinion on the basic financial statements are other than unmodified, we will discuss the reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable to form or have not formed an opinion, we may decline to express an opinion or to issue a report as a result of this engagement. In accordance with the requirements of Government Auditing Standards, we will also issue a written report describing the scope of our testing over internal control over financial reporting and over compliance with laws, regulations, and provisions of grants and contracts, including the results of that testing. However, providing an opinion on internal control and compliance will not be an objective of the audit and, therefore, no such opinion will be expressed. Other We understand that your employees will prepare all confirmations we request and will locate any documents or support for any other transactions we select for testing. If you intend to publish or otherwise reproduce the basic financial statements and make reference to our firm, you agree to provide us with printers’ proofs or masters for our review and approval before printing. You also agree to provide us with a copy of the final reproduced material for our approval before it is distributed. If it is determined a Single Audit is needed subsequent to this engagement letter, we will provide the entity with another engagement letter covering the terms and conditions related to a Single Audit and the Uniform Guidance. Provisions of Engagement Administration, Timing and Fees Scott Manno, CPA, CGMA is the engagement partner for the audit services specified in this letter. The engagement partner’s responsibilities include supervising the firm’s services performed as part of this engagement and signing or authorizing another qualified firm representative to sign the audit report. Our fees for the engagement are found at attachment A. We will notify you immediately of any circumstances we encounter that could significantly affect this initial fee estimate. Whenever possible, we will attempt to use the entity’s personnel to assist in the preparation of schedules and analysis of accounts. This effort could substantially reduce our time requirements and facilitate the timely conclusion of the audit. Further, we will be available during the year to consult with you on financial management and accounting matters of a routine nature. Our proposed fee is also dependent on all items requested being completed in the format requested or in a mutually agreed-upon format and uploaded to the Engagement Organizer hosted by our firm in a timely manner in accordance with the agreed-upon audit timeline. Board of Directors East Valley Water District -6- Our fee for this engagement assumes the following: the entity will be adequately prepared for the audit and the entity’s financial operations and working trial balance will be consistent from year to year. If, after we receive the working trial balances, we notice there are excessive new accounts over the prior year, or there are excessive subsequent journal entries, or prepared by client workpapers that do not agree to the working trial balances, or there are new funds/functions within the entity, or other changes that necessitate a significant amount of time to address, we will need to come to an agreed-upon change order to address any possible additional costs incurred by the firm. If the need for additional work does come to our attention, we will immediately notify entity staff. If you choose to have us perform the additional work, then such work will be performed at the same hourly rates applicable to the audit work and set forth in an addendum to the contract between the entity and our firm. During the course of the engagement, we may communicate with you or your personnel via fax or e- mail, and you should be aware that communication in those mediums contains a risk of misdirected or intercepted communications. Regarding the electronic dissemination of audited financial statements, including financial statements published electronically on your internet website, you understand that electronic sites are a means to distribute information and, therefore, we are not required to read the information contained in these sites or to consider the consistency of other information in the electronic site with the original document. The audit documentation for this engagement is the property of our firm and constitutes confidential information. However, we may be requested to make certain audit documentation available to various regulators, federal agencies, and to the U.S. Government Accountability Office pursuant to authority given to it by law or regulation, or to peer reviewers. If requested, access to such audit documentation will be provided under the supervision of our firm’s personnel. Furthermore, upon request, we may provide copies of selected audit documentation to the regulators. The regulators may intend, or decide, to distribute the copies of information contained therein to others, including other governmental agencies. Our firm may transmit confidential information that you provided us to third parties in order to facilitate delivering our services to you. For example, such transmissions might include, but not be limited to exchanging documents via our secure portals. We have obtained confidentiality agreements with all our service providers to maintain the confidentiality of your information and we will take reasonable precautions to determine that they have the appropriate procedures in place to prevent the unauthorized release of confidential information to others. We will remain responsible for the work provided by any third-party service providers used under this agreement. By your signature below, you consent to having confidential information transmitted to entities outside the firm. Please feel free to inquire if you would like additional information regarding the transmission of confidential information to entities outside the firm. Management is also responsible for the implementation of new standards issued by the GASB. We will provide reasonable assistance in the preparation of the items noted herein, but any significant time needed to complete the financial statements will be billed separately. Government Auditing Standards require that we document an assessment of the skills, knowledge, and experience of management, should we participate in any form of preparation of the basic financial statements and related schedules or disclosures as these actions are deemed a non-audit service. During the course of the audit, we may observe opportunities for economy in, or improved controls over, your operations. We will bring such matters to the attention of the appropriate level of management, either orally or in writing. Board of Directors East Valley Water District -7- You agree to inform us of facts that may affect the basic financial statements of which you may become aware during the period from the date of the auditor’s report to the date the financial statements are issued. We agree to retain our audit documentation or work papers for a period of at least seven years from the date of our report. Upon expiration of this period, we will be free to destroy our records related to the engagement. However, we do not keep original client documents, so we will return those as they are used during each engagement. It is management’s responsibility to retain and protect the records for possible future use, including examination by regulators and federal agencies. We require that a copy of the final trial balance (i.e., a trial balance ready to audit) be delivered to us at least 10 business days prior to the start of the audit, otherwise we may reschedule the start of the audit. At the conclusion of our audit engagement, we will communicate to the Board of Directors the following significant findings from the audit:  Our view about the qualitative aspects of the entity’s significant accounting practices;  Significant difficulties, if any, encountered during the audit;  Uncorrected misstatements, other than those we believe are trivial, if any;  Disagreements with management, if any;  Other findings or issues, if any, arising from the audit that are, in our professional judgment, significant and relevant to those charged with governance regarding their oversight of the financial reporting process;  Material, corrected misstatements that were brought to the attention of management as a result of our audit procedures;  Representations we requested from management;  Management’s consultations with other accountants, if any; and  Significant issues, if any, arising from the audit that were discussed, or the subject of correspondence, with management. In accordance with the requirements of Government Auditing Standards, we have attached a copy of our latest external peer review report of our firm for your consideration and files. Non-solicit Clause We value each and every one of our clients as well as each and every one of our employees. We have spent a great deal of time and resources to locate, train and retain our employees. We respectfully request that you do not solicit our employees to work for you. If you do hire one of our employees within 2 years of when they last worked for our firm, we will be due a finder’s fee equal to 50% of the annual salary they were earning as of their last day of employment. Payment will be due within 10 days of your receipt of our invoice. To ensure that our independence is not impaired under the AICPA Code of Professional Conduct, you agree to inform the engagement partner before entering into any substantive employment discussions with any of our personnel. Board of Directors East Valley Water District -8- International Alliance Membership Our firm is an independent member firm of Alliott Global Alliance, which is an international alliance of independent accounting, law, and specialist firms. Alliott Global Alliance and its member firms are legally distinct and separate entities. These entities are not and shall not be construed to be in the relationship of a parent firm, subsidiary, partner, joint venture, agent, or a network. No Alliott Global Alliance member firm has any authority (actual, apparent, implied, or otherwise) to obligate or bind Alliott Global Alliance or any other Alliott Global Alliance member firm in any manner whatsoever. Equally, neither Alliott Global Alliance nor any other member firm has any authority to obligate or bind us or any other member firm. All Alliott Global Alliance members are independent firms, and as such, they each render their services entirely on their own account (including benefit and risk). In connection with the engagement contemplated by this letter or any other services from time to time provided by us, we may seek advice from or may recommend the retention of an Alliott Global Alliance member firm. Alliott Global Alliance and its other member firms shall have no liability for advice rendered by us or such consulted or retained Alliott Global Alliance member firm. Nor shall we have liability for advice rendered by any of the other Alliott Global Alliance member firms, even if consulted or recommended to you by our firm. Information Exchange/Data Hosting (Engagement Organizer) Professional standards prohibit us from being the sole host and/or the sole storage for your financial and non-financial data. As such, it is your responsibility to maintain your original data and records and we cannot be responsible to maintain such original information. The Engagement Organizer is used solely as a method of transferring data and is not intended for the storage of the entity’s information. Upon conclusion of the engagement, we will provide the entity with a copy of the deliverables and relevant data from the Engagement Organizer relating to the engagement in a mutually agreed-upon format. If the engagement occurs over multiple years, this exchange will occur at least annually. The data and other content will either be removed from the Engagement Organizer or become unavailable to the entity within a reasonable period of time. If the engagement is multi-year, the completion of the engagement occurs each year when the deliverables are completed for that year. By signing this engagement letter, you affirm that you have all the data and records required to make your books and records complete. Please electronically sign this letter to indicate your acknowledgement of, and agreement with, the arrangements for our audit of the financial statements, including our respective responsibilities. Please download a copy of the letter for your records once you have completed the signature process. Board of Directors East Valley Water District -9- As a reminder, we will not initiate services until we receive the signed letter. We appreciate the opportunity to be your financial statement auditors and look forward to working with you and your staff. Respectfully, RESPONSE: This letter correctly sets forth our understanding. Acknowledged and agreed on behalf of the East Valley Water District by: Name: ______________________________________________ Title: _______________________________________________ Date: _______________________________________________   Chief Financial Officer 04/15/2025 Grant Bennett Associates A PROFESSIONAL CORPORATION 10850 Gold Center Drive, Suite 260 Rancho Cordova, CA 95670 916/922-5109 FAX 916/641-5200 Princeville, HI 888/763-7323 Together as One. Grant Bennett Associates is a Member of the Alliott Global Alliance of independent professional firms. www.gbacpa.com Report on the Firm’s System of Quality Control August 26, 2024 To Rogers, Anderson, Malody & Scott, LLP and the Peer Review Committee of the California Society of CPAs: We have reviewed the system of quality control for the accounting and auditing practice of Rogers, Anderson, Malody & Scott, LLP (the firm) in effect for the year ended November 30, 2023. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants (Standards). A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as described in the Standards may be found at www.aicpa.org/prsummary. The summary also includes an explanation of how engagements identified as not performed or reported in conformity with applicable professional standards, if any, are evaluated by a peer reviewer to determine a peer review rating. Firm’s Responsibility The firm is responsible for designing and complying with a system of quality control to provide the firm with reasonable assurance of performing and reporting in conformity with the requirements of applicable professional standards in all material respects. The firm is also responsible for evaluating actions to promptly remediate engagements deemed as not performed or reported on in conformity with the requirements of professional standards, when appropriate, and for remediating weaknesses in its system of quality control, if any. Peer Reviewer’s Responsibility Our responsibility is to express an opinion on the design of and compliance with the firm’s system of quality control based on our review. Required Selections and Considerations Engagements selected for review included engagements performed under Government Auditing Standards, including a compliance audit under the Single Audit Act and an audit of an employee benefit plan. As a part of our peer review, we considered reviews by regulatory entities as communicated by the firm, if applicable, in determining the nature and extent of our procedures. Opinion In our opinion, the system of quality control for the accounting and auditing practice of Rogers, Anderson, Malody & Scott, LLP in effect for the year ended November 30, 2023, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with deficiency(ies) or fail. Rogers, Anderson, Malody & Scott, LLP has received a peer review rating of pass. GRANT BENNETT ASSOCIATES A PROFESSIONAL CORPORATION Certified Public Accountants Engagement Letter is ready for e-signature Final Audit Report April 15, 2025 "Engagement Letter is ready for e-signature" History Document emailed to Brian Tompkins(btompkins@eastvalley.org) for signature 4/15/2025 15:38:29 PM Pacific Daylight Time Document viewed by Brian Tompkins(btompkins@eastvalley.org) 4/15/2025 16:07:35 PM Pacific Daylight Time - IP address: 76.53.118.133 Document e-signed by Brian Tompkins(btompkins@eastvalley.org) Signature Date: 4/15/2025 16:10:28 PM Pacific Daylight Time - IP address: 76.53.118.133 Document Signed 4/15/2025 16:10:28 PM Pacific Daylight Time Created:April 15, 2025 By:Rogers, Anderson, Malody & Scott, LLP(esign@ramscpa.net) Status:ESigned Transaction ID:FD1NPAWLVJCMC8K2DRGXGYXR94 Documents:Engagement Letter - East Valley Water District.pdf Agenda Item #4 July 8, 20251 Meeting Date: July 8, 2025 2 3 1 0 Regular Meeting TO: Committee Members FROM: Chief Financial Officer SUBJECT: Update on Reclamation Rate Study RECOMMENDATION This agenda item is for informational purposes only, no action is required. BACKGROUND / ANALYSIS The FY 2024-25 financial results for the Reclamation fund (SNRC) will show that operating and debt service costs exceeded revenue and that Reclamation fund reserves have been used for the revenue deficiency. However, in future years it is imperative that Reclamation fund revenues are sufficient to cover costs, which may require adjustments to wastewater treatment rates. Reclamation revenue fell short of initial projections for FY 2024-25 due to the challenges with the digesters, which limited the amount of food waste, and tipping fees, that could be accepted. Reduced digester efficiency also led to higher than expected power costs and solids removal costs. The ongoing effect of these operational changes needs to be evaluated when considering the sufficiency of treatment rates as the District begins FY 2025-26. IB Consulting will update their rate models for the Reclamation fund to propose updated wastewater treatment rates, if necessary. The plan is to complete a cost-of- service analysis by September and, if necessary, propose scheduling a Prop 218 hearing. DISTRICT PILLARS AND STRATEGIES II - Sustainability, Transparency, and Accountability a. Uphold Transparent and Accountable Fiscal and Resource Management FISCAL IMPACT There is no fiscal impact associated with this agenda item. The contract with IB Consulting was authorized under separate action in the amount of $48,925. Agenda Item #4 July 8, 20252 Meeting Date: July 8, 2025 2 3 1 0 Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS Quote IB Consulting Solutions through Collaboration Submittal Date: May 28, 2025 East Valley Water District Reclamation Cost-of-Service and Rate Study Date: May 28, 2025 Brian Tompkins - Chief Financial Officer East Valley Water District 31111 Greenspot Road Highland, CA 92346 Dear Brian Tompkins, We are excited to submit this scope of work to assist East Valley Water District (District) in updating its financial plan and developing corresponding cost-based rates for the Reclamation utility. The Reclamation utility is a separate enterprise fund that tracks revenues and expenses related to treating influent through primary, secondary, and tertiary processes at the District's Sterling Natural Resources Center (SNRC). Our proposal includes a detailed work plan for preparing a comprehensive cost-of-service study that will recover the District's revenue requirements and establish rates that are in compliance with Proposition 218 and Proposition 26. We have worked with the District as its rate consultant for a number of years and are thoroughly knowledgeable with the budget structure and rates.The District will benefit from the institutional knowledge we have obtained through our involvement with developing its rates over the last 10 years. As managing partners of the firm, we have over 40 years of combined experience that spans the entire State of California, covering water rates, recycled rates, wastewater rates, drought rates, and capacity charges. We have assisted agencies with long-term financial planning, reserve policies, and structuring rates.Our scope also includes meetings with staff and the District Board throughout the study to keep the project team informed and community engaged. If you have any questions regarding the proposal or would like to discuss any section in more detail, please contact me directly. Sincerely, _________________________________ 31938 Temecula Parkway,Suite A #350,Temecula, CA 92592 CA Secretary of State Entity #:201912110516 Habib Isaac - Principal | Managing Partner 951-595-9354 hisaac@IBconsultinginc.com 1 Andrea Boehling - Principal | Managing Partner 615-870-9371 aboehling@IBconsultinginc.com As part of our scope of services, we have included details regarding required tasks, meetings, and deliverables. Through our frequent collaboration, staff will be completely familiar with the models and their functionality. The detailed project approach describes each task and sets forth how we envision working through this engagement. Task 1: Data Collection and Kick-off Meeting As part of project initiation, we will meet with staff to discuss the overall approach to the project, an initial timeline for completion, and identify key milestones. To ensure a productive kick-off meeting, we will first provide a data request of the items required for developing the financial plans, cost-of- service analyses, and corresponding rates. Ideally, the kick-off meeting will be scheduled two to three weeks after providing the data request to allow ample time to compile and review the data. During our meeting, we will discuss the following items: 1.Questions we have regarding the data received. 2.Overview of current financial position. 3.Updates to capital needs. 4.Reserves and funding levels. 5.Policy considerations, state mandates, and any regulatory requirements to address. 6.Any new strategic objectives to achieve through rates. The kick-off meeting will conclude with an initial framework of the study, clear lines of communication between us and staff, and specific dates for scheduled meetings. Meetings:One kick-off meeting with staff. Deliverable:Data request, agenda for kick-off discussion, and meeting minutes. Task 2: Financial Plan Development Financial planning incorporates numerous considerations besides projecting operating expenses. Utilities need to account for changes in wastewater flows. In addition, system reinvestment, reserves, and debt compliance also influence revenue needs in future years. Therefore, a comprehensive financial plan reviews various aspects of a utility. 2Reclamation Rate Study Scope of Work We will review the revenue requirements to capture all costs, including debt coverage and reserve funding. We will include historical financials and projected revenue requirements, including the Capital Improvement Plan (CIP). CAPITAL PLANNING Developing a funding approach to the CIP is critical to any rate study to ensure rates generate adequate revenue for maintaining and reinvesting in the utility system. With the periodic replacement of digesters and the fifth chamber addition, identifying the timing of projects and funding sources can generate various scenarios to consider as part of prioritizing short-term needs and long-term planning. Our model will incorporate the ability to select from different capital plan scenarios and toggle between each scenario to instantly review how the capital spending plan folds into the total revenue requirements and the level of rate increases. Our modeling will include: 1.Projections of the utility's revenue needs for the next 10 years to capture any significant replacement costs and/or expansions, if needed. 2.Ability to develop and select up to five different CIP scenarios that may vary by the inclusion/ exclusion of projects, estimated project costs, and project scheduling. 3.CIP funding sources, including reserves, capacity fees, grants, and debt financing. 4.Rate impacts due to varying levels of capital funding. A sound capital facility funding plan is one of the primary ways to minimize rate spikes by slowly building up reserves for future capital needs, which the District currently does and will continue to do. REVENUE REQUIREMENTS We will develop a multi-year cash flow pro forma to determine revenue adjustments for the planning period. Expenses will be projected and will incorporate separate inflationary categories including, but not limited to, salaries, benefits, PERS/OPEB, energy, and treatment. Historical financial data will provide a reference for expense trends and new line items. Our financial plans include a comprehensive review on rate revenue. We will recalculate rate revenue using the raw billing data and compare it to actual revenues within the latest audited financials. Doing so will provide an initial quality assurance check that the raw billing data and units of service driving the updated model are fundamentally sound for forecasting future revenue needs. This will also allow us to model "what-if" scenarios with changes to growth, wastewater flows, and projected usage between customer classes. We model existing reserve policies and identify any recommended adjustments to reserves based on our direct experience and industry best management practices. Reclamation Rate Study 3 The financial plan model will include the ability to develop different financial plan options based on changes to CIP and reserve funding. The financial plan models will include an infographic interface (Dashboard) created with the end-user in mind. The Dashboard will include, the current financial operating position and projected annual net income, required capital needs with funding sources, reserves, ending reserve balances, and toggles to dynamically change assumptions and compare scenarios. Our Dashboards are a key element to our models and assist with communicating the financial health of the utility. Meetings:Webinars with staff as needed during the development of financial plan and to finalize proposed financial plan options.One (1) in-person workshop with the District Board to review the proposed financial plan. Deliverable:Financial plan model, which will include information on total accounts by customer class, wastewater flows by customer class, and current fixed / variable revenue profile. Task 3: Cost of Service / Rate Analysis Reclamation Rate Study 4 Reclamation Rate Study 5 The cost-of-service analysis is a critical component of any rate study and directly ties to how rates will adjust, which ultimately impacts customer bills and provides a sound nexus between costs incurred and proposed rates. Through our discussions with staff at the kick-off meeting and our collaboration in developing the financial plan, the initial cost-of-service analysis will reflect feedback received from staff. We will walk staff through the cost-of-service, identify recommended adjustments based on best management practices, and ensure compliance with Proposition 218. Discussion points will include: 1.Comparison of revenue recovered from the reclamation base fixed charges versus how much is recovered from the reclamation variable rates to reflect how costs are being incurred now that the SNRC is online. 2.Consumption analysis to capture new non-residential usage trends and provide insight into the amount of revenue recovered between customer classes. 3.Cost components to show how updated rates were derived. 4.Sensitivity analysis and identification of the primary drivers to rate increases. Understanding the cause for rate increases will provide insight for key messaging and Board acceptance. 5.Customer impacts. Meetings:Webinars with staff to review cost-of-service analysis and rate design options and finalize proposed rates for the rate workshops. Deliverable:Rate model. TASK 4: Rate Workshops With the proposed rates completed and thoroughly discussed with staff, a rate workshop will be held to discuss proposed rates, review the financial position of the utility, and receive feedback from the District Board. We will prepare presentation material and attend the workshop. During the first workshop, we will present the initial proposed rate options based on the different financial plan options presented as part of Task 2. The primary drivers for rate increases will be discussed as well as any adjustments to the rate structure. For each option, we will identify how the District's short and long-term financial health is impacted, and how the corresponding proposed rates impact customer bills. A second workshop will be conducted with the District Board, if necessary, based on feedback from the first workshop, reflecting any requested adjustments to the proposed financial plan or rates. Meetings:Webinars with staff to review presentation material for rate workshops. Up to two (2) rate workshops. Deliverable:Presentation materials. Task 5: Rate Study Report Once the analysis is completed and rates finalized, we will draft a report in compliance with Proposition 218 to serve as part of the administrative record. Our report will document assumptions, describe the methodology, and walk the reader through the underlying calculations that derive the updated reclamation rates. We will also include an Executive Summary highlighting the primary drivers of any necessary revenue adjustments and corresponding rates. The final report will include all of the technical analysis as a backup to the proposed rates; however, we also focus on the readability of our reports to make sure it's easily digestible to the layperson. This is achieved by incorporating infographics that complement the narrative discussions within the report, and we limit the amount of technical jargon that may only be understood by industry professionals. With this in mind, our reports are straightforward and easy to read. Meetings:Conference calls as needed to finalize the report. Deliverable:Draft report and final report. Task 6: Noticing and Public Hearing We will assist the District with the Proposition 218 Notice by reviewing it and ensuring the notice ties directly to our analysis and report. We will provide any required tables and incorporate graphics showing customer impacts. We will be in attendance at the Public Hearing to answer any technical questions and will provide a brief presentation, if desired, summarizing the report, our findings, and proposed rates. Meetings:One (1) meeting to attend Public Hearing. Deliverable:Review of Proposition 218 Notice, rate tables, and customer impact chart for Proposition 218 Notice, and presentation, if requested. Reclamation Rate Study 6 We recognize that the Final Report serves two distinct purposes: 1) Backup to our technical analysis. 2) A clear and concise story of the drivers related to proposed rates. Below is our not-to-exceed cost proposal for the scope of services outlined herein. We will bill monthly based on our hourly rates and travel expenses. In addition, the cost for printing and mailing the Proposition 218 Notices are not included as part of the cost estimate provided below. We also provided our hourly rates for any additional services or meetings. Reclamation Rate Study 7 Cost Proposals