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HomeMy WebLinkAbout2000 O Lgngcrier Accountancy Corporation October 28, 1999 Ogden Entertainment, Inc. Bakersfield Centennial Garden and Convention Center 1001 Truxtun Avenue Bakersfield, CA 93301 We have audited the financial statements of Bakersfield Centennial Garden and Convention Center ("The Facility") for the year ended June 30, 1999 and have issued our report thereon dated October 28, 1999. In planning and performing our audit of the financial statements of the facility we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control structure. We also considered compliance with laws and regulations in accordance with the government audit standards issued by the GAO.. As a result of our audit, we noted no matters involving the internal control over financial reporting and its operations that we considered to be material weaknesses or would require further discussion. This letter is intended solely for the information and use of Ogden Entertainment, Inc. and the City of Bakersfield. Very truly yours, B ARB l (2/L,9~GC RIER H/I~OPER & KING A cco~/m~orporat~n~~~: By: Ge, G:\Clients\g347~Audit. doc 5001 E. Commercenter Drive, Suite 350 · P.O. Box 11171 · Bakersfield, California 93389 ° Fax (661) 631-0244 · (661) 631-1171 1319 Marsh'Street · San Luis Obispo, California 93401 ° Fax (805) 541-4024 · .(805) 541-2500 Barbich r Accotmt~ncy Corporation October 28, 1999 Ogden Entertainment, Inc. Bakersfield Centennial Garden & Convention Center 1001 Truxtun Avenue Bakersfield, CA 93301 We have audited the financial statements of Bakersfield'Centennial Garden & Convention Center, ("the Facility") for the year ended June 30, 1999, and have issued our report thereon dated October 28, 1999. Professional standards require that we provide you with the following information related to our audit. Our responsibility under Generally Accepted' Auditing Standards As stated in our engagement letter dated September 9; 1999, our responsibility, as described by professional standards, is to plan and perform our audit to obtain reasonable, but not absolute, assurance that the financials statements are free of material misstatement and are fairly presented in accordance with generally accepted accounting principles. Because of the concept of reasonable assurance and because we did not perform a detailed examination of all transactions, there is a risk that material errors, irregularities, or illegal acts, including fraud and defalcations, may exist and not be detected by us. As part of our audit, we considered the internal control of Ogden Entertainment, Inc., ("Ogden"). Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. 5001 E. Commercenter Drive, Suite 350 · EO. Box 11171 · Bakersfield, California 93389 · Fax (661) 631-0244 · (661) 631-1171 1319 Marsh Street · San Luis Obispo, Califomia 93401 · Fax (805) 5414024 ° (805) 541-2500 October 28, 1999 Ogden Entertainment, Inc. Page two Significant Accounting Policies Management has the responsibility for selection and use of appropriate accounting policies. In accordance with the terms of our engagement letter, we will advise management about the appropriateness of accounting policies and their application. The significant accounting policies used by the Facility and Ogden are described in Note 1 to the financial statements. We noted no transactions entered into by the Facility during the year that were both significant and unusual, and of which, under professional standards, we are required to inform you, or transactions for which there is a lack of authority guidance or consensus. Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. There are no significant accounting estimates affecting the financial statements. Significant Audit Adjustments For purposes of this letter, professional standards define a significant audit adjustment as a proposed correction of the financial statements that, in our judgement, may not have been detected except through our auditing procedures. These adjustments may include those proposed by us but not recorded by the Facility that could potentially cause future financial statements to be materially misstated, even though we have concluded that such adjustments are not material to the current financial statements. We proposed no audit adjustments that could, in our judgement, either individually or in the aggregate, have a significant effect on the Facility financial reporting process. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting or auditing matter that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. October 28, 1999 Ogden Entertainment, Inc. Page three Consultations with Other Independent Accountants. In some cases, management may decided to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the Facility' financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Issues Discussed Prior to Retention of Independent Auditors We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Facility' auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with Ogden in performing and completing our audit. In performing our audit, we encountered an accounting issue between Ogden and the City of Bakersfield relative to the accounting for prepaid suite contract revenues. We concurred with Ogden's accounting of prepaid suite contract revenues, whereas the City of Bakersfield did not agree with the accounting policy utilized by Ogden. This issue relates to the timing of when revenue is recognized for accounting purposes. The difference is a result of the City using governmental fund type accounting and the Facility using proprietary fund accounting, as required by generally accepted accounting principles. The City's contract with Ogden also required generally accepted accounting principles be used by Ogden to account for the operations of the Facility. The financial statements, as prepared by Ogden, reflect the appropriate accounting treatment. This information is intended solely for the use of the management of Ogden Entertainment, Inc. and the City of Bakersfield and should not be used for any other purpose. However, this report is a matter of public record, and its distribution is not limited. BARBI~ ~ONGCR]ER HOOPER & KING Barbich Lo~nc~r nooper Accountancy Corporation Bakersfield Centennial Garden & Convention Center Financial Statements Year Ended June 30, 1999 I CONTENTS Page(s) Independent Auditors' Report On The Financial Statements 1 Financial Statements sheet 2 Balance Statement of revenue and expenses 3 Statement of changes in retained deficit 4 Statement of cash flows 5 Notes to Financial Statements 6 - 14 Independent Auditors' Report on the Supplementary Information 15 Supplementary Information ~ Schedule of operating expenses 16 Independent Auditors' Report On Compliance And On Internal Control Over Financial Reporting Based On An Audit Of Financial Statements Performed In Accordance With Government Auditing Standards 17 Barbich r Independent Auditors' Report Ogden Entertainment, Inc. Bakersfield Centennial Garden & Convention Center Bakersfield, California We have audited.the balance sheet of Bakersfield. Centennial Garden & Convention Center as of June 30,..19.99.,. and the related statements of revenue and ~expenses, changes in retained deficit and cash flows fqr: [he year then ende. d (i~eriod of inception).. These financial statements are the responsibility of the City's facility management company, Ogden Entertainment, Inc. Our responsibility is to express an opinion on these financial statements based on bur'audit. We conducted our audit in accordance with generally accepted auditing standards and the stand~trd§ applicable to financial audits contained in Government Auditing Standards issued by. the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, financial position of Bakersfield Centennial Garden & Convention Center as of June 30, 1999, and the results of its operations and its cash flows for the year then ended (period of inception) in conformity with generally accepted accounting Principles. I I 5001 E. Commercenter Drive, Suite 350 · P.O. Box 11171 · .Bakersfield, California 93389 ° Fax (661) 631-0244 · (661) 631-1171 1319 Marsh Street · San Luis Obispo, California 93401 · Fax (805) 541-4024 · (805) 541-2500 I I I I I I "' ' ' ' rep'orf In accordance with Government Auditing stand~rd§, We have'also issued a October 28, 1999 on our consideration of ·Ogden Entertaiment', Inc.'s internal I financial 'reporting and our assessment of its compliance with certain provisions regulations,'conti:acts and grants. gl~.m ' . .. I R:~.. PER & KING BAR ONGC R HOO Acc y ~ -,. ~ ~. ~ .,,, . · .. i~-- · . .. Bakersfie~.,~lifo October 28, 1999 - ' ' .... I I I Bakersfield Centennial Garden & Convention Center Balance Sheet June 30, 1999 ASSETS Current Assets Cash $ 1,567,195 Accounts receivable, trade 188,839 Accounts receivable, other 54,776 Inventory 3,197 Prepaid expenses 39,555 1,853,562 Property and Equipment, at cost 3,795 Less accumulated depreciation 1,265 2,530 $ 1,856,092 LIABILITIES AND RETAINED DEFICIT Current Liabilities Accounts payable, trade $ 116,400 Accounts payable, other 54,293 Accrued expenses 101,382 Deferred revenue 1,607,840 Advance from City of Bakersfield 570,284 2,450,199 Commitments Retained Deficit (594, 07) Unappropriated 1 $ 1,856,092 See Notes to Financial Statements. I I 2 Bakersfield Centennial Garden & Convention Center Statement of Revenue and Expenses For the Year Ended June 30, 1999 (Period of Inception) Net revenues: Facilities rent $ 1,205,269 Event expense reimbursements 533 815 Suite and premium seats 491 393 Concession commission 399 048 Signage and advertising 207 374 Parking 101 244 Merchandise 70 110 Ticketing fees 69,006 3,077,259 Direct event expenses: Event labor 918,454 Other direct event expenses 115,169 Event advertising 46,247 1,079,870 Gross profit 1,997,389 Operating expenses 2,608,280 Operating loss (610,891) Nonoperating income: Interest income 16,784 Net loss $ (594,107) See Notes to Financial statements. I I Bakersfield Centennial Garden & Convention Center Statement of Changes in Retained Deficit Year Ended June 30, 1999 (Period of Inception) Retained earnings, beginning of year $ -O- Net loss (594,107) Retained deficit, end of year $ (594,107) See Notes to Financial Statements. -4- I BakersfieM Centennial Garden & Convention Center Statement of Cash Flows For the Year Ended June 30, 1999 Cash flows from operating activities: Operating loss $ (610,891) Adjustments to reconcile operating loss to net cash provided by operating activities: Depreciation 1,265 Increase ~n accounts receivable (243,615) Increase in inventory (3,197) Increase in prepaid expenses (39,555) Increase in accounts payable 170,693 Increase ~n accrued expenses 101,382 Increase in deferred revenue 1,607,840 Net cash provided by operating activities 983,922 flows from investing activities: Cash Payments for purchase of property and equipment (3,795) Interest income 16,784 Net cash provided by investing activities 12,989 Cash flows from financing activities: Net increase in advances from the City of Bakersfield 570,284 Net increase in cash and cash equivalents 1,567,195 Cash and cash equivalents at beginning of year -O- Cash and cash equivalents at end of year $ 1,567,195 See Notes to Financial statements. I .I I I Bakersfield Centennial Garden & Convention Center Notes to Financial Statements Note 1. Nature of Business and Significant Accounting Policies Nature of Business: The City of Bakersfield ("the City") owns the Bakersfield Centennial Garden and Convention Center ("the Facilities"). The Centennial Garden is an arena, built by the City, which was completed and began operations in October 1998. It is the only building of its kind in the Bakersfield area. On August 6, 1997, the City issued a request for proposals for services prior to the opening of the Centennial Garden and the operation and management of the Facilities thereafter. In an agreement dated January 28, 1998, the City contracted with Ogden Entertainment, Inc. ("the Company") for these services for an initial period of five years. The contract term was subsequently extended for an additional five-year term and the agreement is effective through June 30, 2008. The Company worked during the January 14, 1998 through June 30, 1998 pre-opening phase and assumed management responsibilities of the Facilities on July 1, 1998. The Company was hired by the City for its expertise in the management, operation and marketing of public assembly Facilities. The Company currently manages similar Facilities throughout the United States. The activity of the Facilities is recorded in a special revenue fund of the City's accounting records. The City owns all the assets of the Facilities and accordingly, all amounts related to the operation of the Facilities belong to the City. The Company has a fiduciary responsibility under the management agreement to maintain and operate the Facilities in the best interests of the City and the community. Fund accounting: Enterprise Funds are used to account for operations (a) that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs (expenses, including of depreciation) providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges or (b) where the governing body has decided that periodic determination of revenue earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purpose. -6- I I Notes to Financial Statements I I Revenue Recognition: I Suite andpremium seat contracts Revenues from suite and premium seat contracts are recognized over the contract I the Contracts billed twice a with the entire contract period per contract terms. are year amount payable prior to the contract period. The suite and premium seat payments are i recorded as deferred revenue until earned and recognized over the contract period. Signage and advertising contracts I Revenues from signage and advertising contracts are recognized over the contract period per the contract terms. Contracts are billed according to the contract terms. I Payments are recorded as deferred revenue until earned and recognized over the contract period. I Ticket sales The Company, through its contract with Ticketmaster, sells tickets to .Facility events I as an agent of the event holder at the on site box office location and through telephone, intemet and outlet locations. All revenues from the sale of tickets belong to the event holder. The ticket sales are recorded as deferred revenue when sold. After the event I has settlement with the event holder takes The net of total ticket sales occurred, place. less event expenses such as facility rent and reimbursement of direct event expenses is then paid to or received from the event holder. The event ticket revenues are removed I from the deferred revenue account at the time of settlement. I The Facilities earn a ticketing fee on the sale of event tickets that take place through telephone, intemet and outlet locations. Revenues are recorded as deferred revenue at the time of sale and are recognized at the time of event settlement. I Event revenues I Revenues from Facilities events such as facilities rent, direct event expense reimbursements, concession commissions, parking and merchandise are recognized at the time of event settlement. I I I 7 I Notes to Financial Statements I Basis of accounting: I The accompanying financial statements have been prepared on the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned and i expenses are recognized when incurred. Use of estimates: I The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that · affect the reported amounts of assets and liabilities and disclosures of contingent I assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ I from those estimates. I Cash and cash equivalents: I For purposes of reporting cash flows, cash and cash equivalents include cash on hand and amounts deposited with banks. I Categories of investment risk: I accordance the Governmental Accounting Standard Board Statement No. 3, In with the City's deposits are categorized to give an indication of the level of risk assumed I by the City at June 30, 1999. The categories are described as follows: Category 1 - Insured or registered investments held by the entity or by its agent I in the entity's name. Category 2 - Uninsured or unregistered investments for which the securities are I held by the pledging financial institution's trust department or agent in the entity's name. I I I I Notes to Financial Statements I Category 3 - Uninsured and unregistered investments for which the securities are held by the pledging financial institution or by its trust department or agent but not in the entity's name. Catego~_ Carrying I 1 2 3 Value Cash and cash I equivalents $ 216,701 $ -0- $ 1,350,494 $ 1,567,195 ~ · At June 30, 1999, the carrying amount of financial institution deposits was $1,567,195 and the bank balance was $1,870,929 of which only $300,000 is covered by federal depository insurance. I Concentration of credit risk: Credit is extended, in the form of accounts receivable, to customers located primarily in California. I Inventory: i Inventory is stated at lower of cost or market. Property and equipment: I Property and equipment are recorded at cost. Depreciation is computed using the straight line method over estimated useful lives of 3 years. I Maintenance and repairs of property and equipment are charged to operations and major improvements are capitalized. Upon retirement, sale or other disposition of I property and equipment, the cost and accumulated depreciation are eliminated from the accounts and gain or loss is included in the statement of income. I I I I 9 I Notes to Financial Statements ! Note 2. Deferred Revenue Deferred revenue at June 30, 1999 consists of the following: Ticket future events $1 sales, ,005,248 Suite contracts 456,469 Advertising contracts 105,125 Ticket rebates 24,723 Event deposits 8,775 Other 7,500 $1,607,840 Note 3. Advance From City of Bakersfield The City advanced funds to the Facilities to provide the needed working capital to begin operations. In addition, during the normal course of business, the City pays expenses that are allocated to the operation of the Facilities. These include expenses payroll and related expenses for the City employees and rent and utilities for the office space used by the Company. The amount of the advance fluctuates throughout the year depending on monthly expenses flow needs. The allocated and additional cash advance is an inter-company account that is eliminated in the consolidation for the preparation of the City's financial statements. During the year ended June 30, 1999, the initial $250,000 working capital advance was repaid and the amount due at June 30, 1999 was $570,284. Note 4. Administrative Services Agreement The Company provides administrative services for the City under an original five-year agreement, which was subsequently extended for an additional five-year period. Compensation for these services is a base fee of $150,000 for the first year, paid in equal monthly installments. The base fee increases by 3% per year each year thereafter until the agreement has terminated. I Notes to Financial Statements I I In addition to the base fee, the Company receives an incentive relative to the amount of the reduction, if any, in net operating loss for each fiscal year. The Company I receives an incentive of 1) 10% of the first $350,000 in net operating loss reduced; 2) I 20% of the next $500,000 in net operating loss reduced; 3) 30% of any net operating surplus in any one fiscal year. All of the incentive calculations are based upon a I projected annual net operating loss of $850,000. Beginning July 1, 2003, the incentive is $25,000 for every year the net operating loss is below $300,000. If the net operating surplus in any fiscal year reaches $350,000, then the incentive fee will cease. For the I ended June 1999 the received $178,548 in management and 30, Company year incentive fees. I The computation of the incentive fee is based upon the books and records of the Facilities maintained by the Company. The accounting records for the Facilities must I be maintained in accordance with generally accepted accounting principles and industry standards. The Company is required under the agreement with the City to have an annual audit at the end of the fiscal year. I Under the management agreement with the City, the Company has the right to operate or contract with others to operate concession and catering services for the facilities I during the initial five-year term of the contract, effective through June 30, 2003. The City has not extended this portion of the management agreement. The Company has contracted with its food and beverage division to operate these services. The food and I beverage division is a related entity under common management at the Company's corporate level. Operations of this food and beverage division are not included in the facilities financial statements. I The Facility is entitled to receive 35% of the first $1.2 million in gross concession i receipts and 40% of receipts in excess of $1.2 million and 15% of gross concession receipts to the suites. For the year ended June 30, 1999 the Facility received $462,000 in gross concession and catering receipts from the Food and Beverage division. I The Facility is entitled to receive 75% of the net novelty receipts and the Company receives the remaining 25%. For the year ended June 30, 1999 the Facility received I $70,093 and the Company received $23,383 in net novelty receipts from the Food and Beverage division. 1 I I Notes to Financial Statements ! Note 5. Commitments The Company has entered into various long-term contracts and leases. At June 30, 1999 outstanding commitments consist of the following: Ticket sales The Company has entered into a licensed user agreement with Ticketmaster to be the exclusive provider for ticket sales for any event presented by the Company at the Facilities. Under the agreement, Ticketmaster has the authority to act as an agent for the Company for ticket sales to the general public by any and all means including telephone, internet, and outlet locations. Ticketmaster earns fees from the ticket sales such as inside ticket charges, customer convenience charges, credit card charges, handling charges and ticket sales royalties. Some fees are subject to increases throughout the contract term. Ticketmaster collects these fees as tickets are sold and the net amount is remitted to the Company weekly. The initial term of the agreement is for five years and the agreement is effective through August 31, 2003. The contract automatically renews for one two-year period unless terminated in accordance with the provisions of the contract. Concert promoter Company a booking service agreement with Nederlander- The has entered into Bakersfield, Inc. as the exclusive musical concert promoter for the Facilities. Nederlander has contracted to pay a minimum annual guarantee of $175,000 in facilities rent and reimbursement of direct event expenses through the concerts it promotes at the Facilities. Nederlander is entitled to 25-50% of amounts in excess of the minimum annual guarantee based upon various target levels. The facilities rent and annual guarantee amounts are subject to escalation each year over the contract period based upon increases in the Consumer Price Index, but not more than 4% per year. For the year ended June 30, 1999, Nederlander paid $165,400 in facilities rent less reimbursement of direct expenses with an estimated amount of $35,100 due for the excess of the minimum annual guarantee. The contract year is different than the Facilities fiscal year. Therefore, the excess of the minimum annual guarantee is allocated over two of the Facilities' fiscal years. The agreement is effective through December 31, 2003 unless terminated earlier in accordance with the provisions of the agreement. Notes to Financial Statements Personnel services The Company has entered into an independent contractor's agreement with Staff Pro, Inc. to provide personnel services for the Facilities, which include ushers, ticket takers and security. Under the agreement, Staff Pro, Inc. receives the actual wages for at the Facilities overhead of 33.7% of the personnel working plus a payroll mark-up wage rate and a management fee of 10% of the actual wages plus overhead mark-up. The Company guarantees $30,000 for the minimum annual management fee for the initial year. The management fee is subject to negotiation on the anniversary date of the agreement. The agreement is effective through August 1,2001 unless terminated earlier in accordance with the provisions of the agreement. Maintenance staff The Company has entered into an independent contractor's agreement with Maintenance Staff, Inc. for janitorial, set-up, breakdown and related services at the Facilities. Maintenance Staff, Inc: receives a contracted hourly rate of pay for personnel working at the Facilities. The rates are subject to increases based upon increases in the state or federal minimum wage, FICA or Medicare rates. The agreement is effective through July 15, 2001 unless terminated earlier in accordance with the provisions of the agreement. Hockey lease The City has entered into a lease agreement, which has been assigned to Flying Puck, for exclusive use of the Facilities for West Coast Hockey League (WCHL) games. Flying Puck has agreed to pay a minimum of $160,000 per season for use of the Facilities. The $160,000 consists of lease fees of $5,000 per game played plus 7.5% of ticket sales above certain levels per year, which increase over the contract term. The lease fees are subject to increase beginning in the third year of the contract and every two years thereafter based upon the Consumer Price Index adjustments. Flying Puck receives $5,000 for each suite leased for hockey tickets. For the year ended jUne 30, 1999, Flying Puck received $120,000 for the twenty-four suites leased. The agreement is effective through June 30, 2004 or ten days following the date the last WCHL playoff game of 2004 is played, whichever occurs first unless terminated earlier in accordance with the provisions of the agreement. The contract has two options for renewal for terms of seven years each. Prior to the exercise of either option, the parties shall negotiate new lease fees. -13- Notes to Financial Statements Basketball lease The Company has entered into a lease agreement with the Cal State Bakersfield Foundation (Cal State) for exclusive use of the Facilities for Cal State University Bakersfield men's basketball games. A lease fee of $4,000 per game plus 7.5% of ticket sales above certain levels is charged for use of the Facilities. Cal State receives $2,500 for each suite leased that includes basketball tickets. For the year ended June 30, 1999, Cal State received $52,500 for suite ticket options. The agreement is effective through October 31, 2001 unless terminated earlier in accordance with the provisions of the agreement. The contract has two options for renewal for terms of five years each. Prior to the exercise of either option, the parties shall negotiate new lease fees. - 14- ! [ Barbich [ Lpngcrier nooper I Independent Auditors' Report on the Supplementam_ Information I Ogden Entertainment, Inc. Bakersfield Centennial Garden & Convention Center I Bakersfield, California The accompanying information shown on page 16 is presented only for purposes of additional I analysis and is not a required part of the basic financial statements. I Our audit of the basic financial statements was made for the purpose of forming an opinion on those statements taken as a whole. The accompanying information has been subjected to the procedures applied in the audit of the basic financial statements. I In our opi.nion, the accompanying information is fairly stated in all material respects in relation to the basic financial statements taken as a whole. I I BARBI~ hJ;~)NGCRIE~ HOOPER & KING Accom/{ ~ Corporatifffi By: C~~Kin~PA I B akersfield, Califorfl~a I October 28, 1999 I 5001 E. Commercenter Drive, Suite 350 · P.O. Box 11171 · Bakersfield, California 93389 · Fax (661) 631-0244 · (661) 631-1171 I 1319 Marsh Street · San Luis Obispo, Ca!ifomia 93401 · Fax (805) 541--4024 · (805) 541-2500 I Bakersfield Centennial Garden & Convention Center I Schedule of Operating Expenses Year Ended June 30, 1999 I (Period of Inception) Full time staff $ 1,028,807 Utilities 465 396 Management fees 178 548 Security 140 504 Insurance 137 038 Equipment rental 127 271 Hockey premium 120 000 Contract maintenance 87,674 Supplies 69,194 Part time staff 49, 515 Credit card fees 42, 311 Miscellaneous 39,439 Marketing 28 332 Travel 21~ 613 15,434 Telephone Printing 12 522 Office supplies 12,438 Professional fees 11 000 Repairs and maintenance 6,078 Postage 4,365 Employment ad fees 3,654 Training 2,632 Uniform 1,803 Dues and subscriptions 1,447 Depreciation 1,265 $ 2,608,280 I 1 Barbich Independent Auditors' Repot~ on Cotnpliance and on Internal Control Over Financial Repoaing Based on an Audit of Financial Statements Performed itt Accordance with Govemtnent Audithtg Standards I Ogden Entertaimnent, Inc. · Bakersfield Centennial Garden & Convention Center 1 Bakersfield, California I We have audited the financial state~nents of Bakersfield Centennial Garden & Convention Center as of and for the year ended June 30, 1999, and have issued our report thereon dated October 28, I 1999. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards issued by the C .mnptroller; General of tile United' States.' ' ' " I ' omi, lia. n'.c : ' . .... -' ' ' '"~;!np!ia.p~,.Sith l~aws', regulations, cdntracts and grants applicable to Bakersfield 'Centennial' I Garden & Convention .center is thelresponsibility of the City's facility management company~ ., ._, Ogde'n. Entert.a'in~h.ent, inc. As pai't of Obi' audit, we assessed the risk that noncmnpliance with I c~rtfiin provisions of law~, regulatiOns, contracts and grants could cause the finandial statements to be lnaterially nfi.sstated. We concluded that the risk of such lnaterial nfisstatement was sufficiently low and that it was not necessary to perform test of Ogden Entertainment, Inc.'s compliance with such provisions of laws, regulations, contracts and grants. · I .. 5001 E. Commercenter Drive, Suite 350 · EO. Box 11171 · Bakersfield, California 93389 · Fax (661) 631-0244 · (661) 631-1171 1319 Marsh Street ° San Luis Obispo, California 93401 · Fax (805) 541-4024 ,, (805) 541-2500 I~,ternal:Cgntr'ol'.0vei. Financial Reporting :' j. ' . ' "' ' ,., .. h~ 3ianr/ing ~fid per~or,m, ing Our audft,.we ~onsidered Ogden Entertainment, I/{c.'s internal control o~,~r financial'rePbrting in order to determine ou'~' auditing procedures for 'the purpose of expressing our opinion on the financial statements and not to provide assurance on the ihternal'dontrol~ over financial reporting. Our consideration of the internal control over financial reporting woul,d: not necessarily disclose all matters in the internal control over financial reporting that might b~~ material weaknesses. A material weakness is a condition in which the design or. operation of one or ~0re' of'the ihternal'control Components does not'redti~e to a relatively low level the risk that misS'tatem~ts 'in~ ambunts 'that would 'b0' material ih ~elation tO' the financial statementS being" audlt~d ma, y'ioCcur and not be. detected within a timely Period'by emplo)ee~ in the normal course of .pe'ifoh.hihg th'.eir assigned functions.,'We noted 'n9 matters involving'the inte, rnal 6ontrol 6ve;' · financial r~porting andits oper~ti0n'that we c~nsider be weakness~s~ to material ..' This report is intended solely for the in'oblation organization and The City of Bakersfield and is not intended to be and should not be used by anyone other than these specified parties. BARBI~H/I~ONGCR.IF~ HOOPER & KING Acc~/ By: G~)v). K Bakersfield'7~aliforn~a October 28, 1999 I I I i I I I - I I I I I I I I TECHNICAL PROPOSAL TO CITY OF BAKERSFIELD, CALIFORNIA I TO PERFORM FINANCIAL AND COMPLIANCE I AUDITS OF THE CITY OF' BAKERSFIELD, CALIFORNIA I FOR THE YEAR ENDING JUNE 30, 2000 I I I I I I I BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN I ACCOUNTANCY CORPORATION 4200 Truxtun Avenue, Suite 300 Bakersfield, California 93309 I (661) 324-4971 Contacts: Andrew J. Paulden, CPA, Principal .I Date: March 27, 2000 1 CITY OF BAKERSFIELD, CALIFORNIA TABLE OF CONTENTS Page Letter of Transmittal ...................................................... 1 Profile of our Firm ' 3 Our Service Area ................................................. :. ...... 4 Detailed Proposal: '~ :~ ,.~'. · General · Independence .................................................. : · License to Practice in California .................................... ' 5 · " Qualifications Experience ................................ Firm and · Partner, Supervisory and Staff Qualifications and Experience ............. ' 6 · Prior Engagements with the City of Bakersfield ....................... · Schedule of Engagements ...................................... 8 · Similar Engagements with Other Government Entities .................. 9 · Schedule of References ........................................ 10. · Specific Audit Approach · Planning ................................................... 11 · Study and Evaluation of Internal Control .......................... 12 · Compliance Testing .......................................... 13 ' · Final Audit Plan .............................................. 13 · Final Field Work ............................................. 13:' · Final Review ................................................ · 14 · Completion of the Audit ....................................... 14' Incorporated our Approach .. Information into Audit · Proposed Segmentation of the Engagement ...................... 15 · Sample Sizes and Anticipated Statistical Sampling .................. 16 · Extent of EDP Software in the Engagement ....................... 16 · Analytical Procedures · 16 · Understanding the City's Internal Control Structure ............... 16 · Approach to Determine Applicable Laws and Regulations Subject to Audit Test Work ................... 17. · Approach for Drawing Audit Samples for Compliance Testing ...... 17 · Identification of Anticipated Potential Audit Problems .................. 17 '· Report Format .................................................. 18 i CITY OF BAKERSFIELD, CALIFORNIA , Page Special Considerations ............ i ................................. ' ...... '. 42 Proposer Guarantees ....................................................... 43 Proposer Warranties ................................................ . ....... 44 Exhibits: Exhibit I - External Quality Control Review Report ' 46 Exhibit II - SCO Quality Review Report .............................. :.. ....47~ Exhibit III - Resumes ............... · ............................... .'.. ,:.49 Exhibit IV - Summary of Governmental Experience .................... . ...... 56' i Peter C. Brown, CPA Letter of Transmittal Burton H. Armstrong, CPA Jerry E. RandaI1, CPA/ABV Mr. Gregory J. Klimko Benjamin P. Reyes, CPA Finance Director i AndrewJ. Paulden, CPA City of Bakersfield Harvey J. McCown, CPA 1501 Truxtun Avenue Bakersfield, Calitbrnia 93301 I Andrea Rutherford-Hill, CPA Steven R.Starbuck, CPA Dear Mr. Klimko: Aileen Keeter, CPA I LynnR. Krausse, CPA Brown Armstrong Randall Reyes Paulden & McCown is pleased to submit this Stacy L. Walters, CPA proposal to perform financial and compliance audits of the City of Bakersfield for the ChrisM. Thomburgh, CPA year ending June 30, 2000. We believe the experience and qualifications of the I JacquelineL. Anton, CPA engagement team assigned to your audit meet the requirements outlined in your request'for proposal. Joan M. Anderson, CPA IBradley M. Hanks, CPA We fully understand the scope of work to be performed as detailed in Section II of Julianne V.S~wyer, CPA your proposal. We commit to perform and complete this work on or before the dates IEric H. Ydn, CPA specified in Section IV of your proposal. Your request for proposal identified two major sets of technical qualification and evaluation criteria to be met by the selected audit firm: (1) expertise and experience; and (2) audit approach. With respect to these criteria, we are uniquely qualified to perform the engagement. I -. First, Brown Armstrong is known as an expert in governmental accounting and I " auditing. We have performed the audit of the City of Bakersfield for the past ten years, assisting the City in receiving the Certificate of Achievement for Excellence i in Financial Reporting for each year (tenth year pending). Second, we are recognized for our efforts to recruit and retain "the best and brightest" I personnel. All' personnel assigned to your engagement have previously participated in your audit. This will minimize the time your staffwill have to allocate to the audit et'fort. Further. we have the local resources to provide you with prompt technical I consultation and other support services. MEMBER of SEC Practice Section of the American Institute of Certified Public Accountants I Mr. Gregory J.Klimko Finance Director I City of Bakersfield March 27, 2000 I Third, Brown Armstrong emphasizes direct "hands-on" involvement of the engagement partner. We employ' an approach to auditing which is top-down, and risk-oriented based on planning and execution. proper This proposal is a firm and irrevocable offer for one hundred and twenty (120) days. Please contact me if I can clarify or expand on any item contained in this proposal. We are available for an oral presentation, if requested. We welcome the opportunity to continue to provide you with the' Outstanding service you expect. Very truly yours, ! BROWN ARMSTRONG RANDALL REYES. I PAULDEN & McCOWN . ' ACCOUNTANCY CORPORATION 'l I CITY OF BAKERSFIELD, CALIFORNIA PROFILE OF OUR FIRM Brown Armstrong had its roots in the late 1960's when Peter C. Brown and Burton H. Armstrong began their public accounting careers in Denver and San Diego with Big Eight intemational accounting firms. Brown formed a local Bakersfield accounting firm in 1974,. whereas Armstrong .returned to Bakersfield in 1970 to join another international accounting firm. Heeventuallyjoined Brown in 1985 to form one of Bakersfield's largest local public accounting firms. Benjamin P. Reyes and Andrew J. Pauldenjoined the firm in 1985. Andrew, Burton, and Benjamin are the three partners involved in providing governmental auditing and accounting services. The following map of California indicates areas in which Brown Armstrong maintains an audit .presence.'. SlSKIYOU MODOC BROWN SHASTA LASSEN TEI'IAMA PLUMAS EL DORADO = Client I_ocation$ TUOLUMNE SAN SAN LUIS OBISPO ° CITY OF BAKERSFIELD, CALIFORNIA DETAILED PROPOSAL I CITY OF BAKERSFIELD, CALIFORNIA I GENERAL 1 I This technical proposal Will demOnstrate that Brown Armstrong has the qualifications, competence, and capacity to perform the independent audit of the City of Bakersfield, California. ! INDEPENDENCE I Our firm and its shareholders and employees are independent of the City of Bakersfield, California (the City) and its component units, as defined by the United States General Accounting Office's i Government Auditing Standards. Our firm has been the independent auditor of the City and its component'units for .the ten years Iended June 30, 1999. During this time, we remained independent of the City:and its component units in accordance with the Second General Standard for Government Auditing as defined by the U.S. General Accounting Office's Government Auditing Standards. I Brown Armstrong will give the City of Bakersfield immediate written notice of any professional relationships entered into during the period of our agreement. I LICENSE TO PRACTICE IN CALIFORNIA I assigned key PrOfessional staff are properly licensed to practice in the State of Our firm and all California. I FIRM OUALIFICATIONS AND EXPERIENCE Brown Armstrong currently employs 63 people: I Total I Shareholders (Partners) 7 Managers 10 I Seniors, Audit and Tax 8 StaffAccountants, Audit and Tax 22 '1 ! Technicians and other support 1___6 Total 6~.~_3 I I CITY OF BAKERSFIELD, CALIFORNIA All work on the City of Bakersfield audit will be performed by personnel employed at .our office located in Bakersfield, California. All assigned personnel will be employed on a full-time basis. As part of its commitment to quality control, the firm has been a member of the SEC Practice Section of the American Institute of Certified Public Accountants-(AICPA). We have completed three quality peer reviews under the Section's guidance, and we have enclosed our: most recent unqualified report. As a part of the peer review, the AICPA mandates a Single AUdit Act client be reviewed by the review team, which was done during each of our reviews. No substantiveproblems or issues were raised. A copy of this report is included as Exhibit I. :.: ~ We have had no disciplinary action taken against the firm or any of its members nor do we have any actionspending at the date of this proposal. All of our school district reports, our. City reports, and,.. :. the County of Kern report are desk reviewed by the Califomia State Controller's Office (SCO) every ~ year. During the last three years, none of the-referenced reports have been remanded to the clients. for additional work. All were accepted by-the SCO upon the initial submission.: . :, ' In addition, the State Controller's Office performed a quality control review of our audit workpapers for the fiscal year ended June 30, 1990, and this report dated April 30, 1991, stated that the firm "fully complied" with their standards and requirements. A of this rep6rt is included Exhibit· copy as II. .. PARTNER, SUPERVISORY AND STAFF QUALIFICATIONS AND EXPERIENCE The members of the audit team assigned to the engagement are: . Andrew J. Paulden, CPA, Engagement Partner : Burton H. Armstrong, CPA, Concurring Engagement Partner ~ Thomas Young, CPA, Senior Gnell Sparks-Babb, Staff Amanda Wilson, Staff Bobby Thomas, Staff Mr. Paulden has sixteen years of government auditing experience. He has managed the City's audit for the past eight years. He currently sits on the State Society Committee for Governmental Auditing and Accounting. I I 6 CITY OF BAKERSFIELD, CALIFORNIA Mr. Armstrong has over thirty years of governmental auditing experience. He has been the engagement and concurring engagement partner on the City's audit for the Past five years. He has also been the engagement partner on our audit of the County of Kern for the last five years. Mr. Young has four years of governmental auditing experience. He was the senior on our audit of the City's June 30, 1999 financial statements. Ms. Babb, and Ms. Wilson have three years governmental auditing experience. Both have been staff on our audits of the City's financial statements. Mr. Thomas has one year of governmental auditing experience. He served as staff accountant on our audit of the City's June 30, 1999 financial statements. Detailed resumes indicating the experience, training, and relevant continuing professional education of these audit team members are included in Exhibit III of this proposal. PRIOR ENGAGEMENTS WITH THE CITY OF BAKERSFIELD The following schedule of engagements represents, separately, all engagements within the last five years, ranked on the basis of total staff hours, for the City of Bakersfield by type of engagement. " CITY OF BAKERSFIELD SCHEDULE OF ENGAGEMENTS Total Name and .Telephone Hours Office Number of Type of Engagement Scope of Work .'. Date . Engagement Partner (Approx) Location Principal Client Contact Audit and compliance Full scope June 30, 1995 Andrew Paulden 900 Bakersfield Greg Klimko 326-3030 Audit and compliance Ful~l scope June 30, 1996 Andrew Paulden 900 Bakersfield Greg Klimko 326-3030 Audit and compliance Full scope JUne 30, 1997 Andrew Paulden 900 Bakersfield Greg Klimko 326-3030 Audit and compliance Full scope June 30, 1998 Andrew Paulden 900 Bakersfield Greg Klimko 326-3030 Audit and compliance Full scope June 30, 1999 Andrew Paulden 900 Bakersfield Greg Klimko 326-3030 CITY OF BAKERSFIELD, CALIFORNIA SIMILAR ENGAGEMENTS WITH OTHER GOVERNMENT ENTITIES The following schedule of references indicates the four most significant engagements that we have performed in the last five years and are similar to the engagement described in your request for proposal: 9 CITY OF BAKERSFIELD SCHEDULE OF REFERENCES Scope GFOA of Total Engagement Contract Entity_ CAFR Work Hours Partner Client Contact Period CITY OF BAKERSFIELD Yes Audit 900 Paulden Greg Klimko 1995-1999 Finance Director (66 !) 326-3030 CITY OF FRESNO Yes Audit 1320 Reyes Randall Carlton 1997-2001 Finance Officer (559) 498-4749 CITY OF TULARE Yes Audit 600 Paulden Mike Hartman 1999-2001 Finance Director (559) 684-4255 CITY OF COAL1NGA No Audit 700 Paulden Patrick O'Reily 1997-200 l Finance Director (559) 935-1531 I I CITY OF BAKERSFIELD, CALIFORNIA I SPECIFIC 'AUDIT APPROACH I We emphasize "hands-on" partner involvement and consistency of staff assignments in our audits. We believe this emphasis benefits our clients in two ways: " I 1. A superior, quality audit is delivered on time; and I 2. We reduce the cost of the audit - in audit fees, and in that unseen cost, the "training of an auditor" unfamiliar with the City's personnel and procedures. I The methods to formulate auditors' consist of severa1 employed our opinions phases. These phases are: planning, study and evaluation of internal control compliance..testing, final audit plan, final field i work, final review, and completion of the audit. Planning I We will begin the planning of the examination upon notification of award of the contract. Tasks to be accomplished during this phase include: I · Entrance conference with the finance director and all key finance department personnel and department heads of key offices or programs to discuss the scope of the examination, I availability (vacation schedules) of your staff, prior audit problems, the interim work to be performed, the establishment of overall liaison for the audit, and arrangements for work space and other needs of the auditor. This conference will occur on or before May 31, I 2000. i · Develop the program to study' and evaluate internal control. · Conferences with all audit personnel involved in the engagement to discuss the scope and i ,.timing of the engagement, and anticipated areas of audit emphasis. · Analytical review of the City's year-to-date financial information, and the City's budget and I related materials. 1 I I I t1' CITY OF BAKERSFIELD, CALIFORNIA Based on experience auditing California local governmental entities, we have developed standard audit plans which have been tailored to comply with: , · Generally accepted auditing standards as set forth by the American Institute of Certified Public Accountants. , · The standards for financial audits set forth in the U.S. General Accounting Office's · . Government Auditing Standards. · The provisions of the Single Audit Act of 1984. ~"~ · "The provisions of U.S. Office of Management and Budget (OMB) Circular A- 133, . -. · Guidelines for compliance audits of California Redevelopment Agencies prepared by'the.. state controller of the State of California. ~. Study and ~Evaluation of Internal Control This is the cornerstone of the examination. Internal accounting control generally comprises the plan: of organization and the procedures and records that are concerned with the.safeguarding of assets and the reliability of financial records .... We will begin by preparing flow charts and other memoranda to fully describe all financial systems.. These fl0w charts and .other memoranda are prepared based on information obtained through our: inquiry and observation of City personnel, and from our review of the City's organizational charts, procedural manuals and programs, and documented financial and management information systems. Our flow charts and memorandum will then. be reviewed to isolate significant,, strengths and weaknesses that would affect the extent of our substantive audit procedures to be employed. Each strength is then tested and the results subjected to evaluation. These evaluations assist .us in determining the amount of reliance we can place on the significant strengths we have identified. At this pOint in our plan, we will. have a progress conference with the finance director and assistant finance director to summarize the results of our study and evaluation of internal control, and to identify the key internal controls or other matters to be tested. This conference will occur on or before July 14, 2000. I I 12 CITY OF BAKERSFIELD, CALIFORNIA Compliance 'Testing Based on the results of our study and evaluation of the internal control structure~ .we will then perform compliance tests on the following: Area Sample Size ~ · Receipts and revenues; 25-60 ,. · Disbursements and accounts payable; 25-60 · Payroll and'related liabilities; and 25-60 ,. · Controls over requirements of federal .. and state grants; : 60 (per major program) · ,'.,:~, Compliance testing will be performed by staff with direct supervision by senion Any findings will be discussed with management for accuracy and the process of development of recommendations immediately started. _: ,,, Final Audit Plan .~ . ,. Based on the results of our study and evaluation of the internal control structure, the results of our compliance testing, and the results of our planning analytical procedures, we prepare our final, audit plan. This plan is documented in audit in accordance with our programs generally accePted auditing standards. This plan is then reviewed bythe engagement.partner for approval. This plan is,then discussed with the finance director during the entrance conference proceeding the commencement. of final field work. This conference will occur on or before August 21, 2000. Final Field Work .. ~, In this phase of the examination, we obtain sufficient competent evidential matter to afford a reasonable basis for our opinions and. reports. This evidential matter is obtained through the performance of substantive procedures consisting of inspection, observation, inquiry, confirmation, and analytical tests. At the end of our field work, we will have an exit conference with the finance director and department heads of key offices or programs. The purpose of this meeting will be to summarize the results ofour field work and to review significant findings. This conference will before occur on or October 6, 2000. We will also provide the finance director with periodic written reports on the status of our audit. These reports will be provided to the finance director on September 8, 2000 and September 22, 2000. I 13 CITY OF BAKERSFIELD, CALIFORNIA ! Final Review · I The review process is constant throughout the engagement. Each working paper prepared by a staff assistant is reviewed by the engagement senior. All working papers and all financial statements and I reports to be issued are then reviewed by the These financial statements and. engagement partner. reports are then reviewed by a governmental audit partner not directly involved in the engagement. for concurrence of opinion prior to release of these statements and reports to the City. ' I Completion of the Audit I The objective of our audit plan is to express our opinion on the fair presentation of the City's ..:financial statements, to report on the City's compliance with applicable, laws and regulations, to I report on: the City's internal control structure, and to issue a management letter.- . . .,:. ?. : ~ ., ~ ~. ..... The following events will transpire between the conclusion of field work and:delivery of the audited. financial statements: 1. During the period of October 6 to October 24, 2000, we will be available for any I meetings that may be necessary to discuss the audit reports. ..-:'. 2: . The City will provide draft financial statements and supplementary schedules to us by I ~ October 16, 2000. · '.~3. ~Final reviews as discussed.above. 4. We will provide the finance director with the notes to the financial statements and all i recommendations, revisions, and suggestions for improvements by October 24, 2000. 5. The final report will be issued on or before October 31, 2000. I I I I 14 CITY OF BAKERSFIELD, CALIFORNIA Information Incorporated into our Audit Approach: Proposed Segmentation of the Engagement The various phases of our audit plan, and the hours to complete each will be divided phase,. among the audit ,team as follows: Segment Level of Staff Hours Planning Partner 15 ..... . Senior 20 ,.~. 'Study and Evaluation of Internal Control Partner ,15 Senior 5_~5 70 Compliance Testing Partner '10 Senior 85 Staff 140 235 Final Audit Plan Partner 15 Senior 10 25 Final :Field Work Partner 10 Senior 90 Staff 350 450 Final Review Partner 30 Completion of the Audit Partner 15 Senior 30 Staff 10 Total Hours 900 I 15 CITY OF BAKERSFIELD, CALIFORNIA Sample Sizes and Anticipated Statistical Sampling We will utilize Statement on Auditing Standards Number 39 for guidance in selecting sampling techniques and sizes. We anticipate using statistical sampling and evaluation in our tests of receipts, disbursements, payroll and expenditures. Usually to achieve 95% confidence over large populations, we do not sample more than 120 items, Selected with replacement. We emphasize compliance items over substantive when using sampling. Judgmental sampling and evaluation will be used for large dollar items, usually in excess of our selected materiality levels and bearing a strong relationship to our risk evaluation profile. Extent of EDP Software in the Engagement ., ., ..... .. Each staff person has access to a personal computer, and has knowledge of a generic software we have purchased for auditing municipalities and report writing. We use this. software in the .. beginning, inputting all prior year actual numbers, and the client current .year budget, including amendments. We then input year-to-date numbers and mn analytical work at the end of the audit comparing appropriation-expenditure numbers to prior year and budget amounts: All significant differences are investigated. Our software is capable of complete report writing, including combining statements and :footnotes. Analytical Procedures We will us analytical procedures exactly as described in the foregoing paragraphl both in planning and auditing phases of our work. We rely very heavily on analytical procedures in a strong internal control environment such as the City's. Understanding the City's Internal Control Structure .. We use inquiry, both written and oral, to document our understanding of the City's internal control structure. We then test our understanding with compliance auditing, sometimes called tests of transactions. I I i 16 CITY OF 'BAKERSFIELD, CALIFORNIA' Approach to Determine Applicable Laws and Regulations Subject to Audit Test Work Our experience with our twenty municipal audit clients, most with federal, or state monies, has created a reservoir of knowledge of many laws and regulations. However, by inquiry and observation, we will determine all major $300,000 the programs (over annually) participatedin by City. We then. consult the actual law, the Federal Register, Catalogue of Federal programs, or the California State Controllers guide to State and Federal Compliance to obtain understanding of the requirements of the law. For major programs, we specifically test those requirements by inspection of documents. · Approach for Drawing Audit Samples for Compliance Tests Compliance test samples will be drawn usually by statistical sampling techniques. The universe from which, the,sample is drawn begins at. the beginning of the year under audit;, and ends with the end of.that year. If a null is picked,~it is replaced in draw sequence until:isufficient live items comprise the planned sample size. IDENTIFICATION OF ANTICIPATED POTENTIAL AUDIT PROBLEMS " The city will be required to implement GASB 34 during this contract period. This is a complete "overhaul" of governmental financial reporting': 'Our familiarity with the city places us ina'unique position to assist the in this city implementating new complex standard. Any problems noted during the auditwill immediately be discussed with Greg Klimko,.Finance Director, to arrive at a mutually agreeable solution. · I 17 CITY OF BAKERSFIELD, CALIFORNIA REPORT FORMAT As requested, we are enclosing proforma copies of the following reports we anticipate will be issued in connection with our engagement: Page Number 1. Comprehensive Annual Financial Report: a. Independent Auditor's Report (full scope) 20 b. Independent Auditor's Report (in relation to) .~, 2;/ 2. Central District Development Agency Annual Financial Report: a. Independent Auditor's Report. 24 3. Bakersfield Public Financing Authority Annual Financial Report: a. Independent Auditor's Report ,26 5. Audit: Single a. Auditor's Report on Compliance and on.Internal,Control Over . · Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with "Government Auditing Standards" 27 b. Auditor's Report on Compliance with Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance withOMB Circular A- 133 29 6. Redevelopment Agency: . a. Independent Auditor's Report on Compliance 32 7. Wastewater Management Plan: a. Independent Auditor's Report on Compliance 33 I. 18 CITY OF BAKERSFIELD, CALIFORNIA Page Number 8. Appropriation Limit: a. Agreed-Upon Procedures 35 9. Management Letter: . a. Reportable Conditions, no material weaknesses 37' 10. Communication with Audit Committee ~.39. Further, we acknowledge that we will be responsible for drafting the notes to the general purpose financial statements. 19 ! I . "CITY OF BAKERSFIELD, CALIFORNIA I INDEPENDENT AUDITOR'S REPORT (Full Scope) I To the Honorable Mayor and Members of the Council City City of Bakersfield, California I We have audited the accompanying general purpose financial statements, and the combining, individual fund, and account group financial statements of the City of. i Bakersfield, California, as of June 30, 2000, as listed in the table of contents. These ~. :..- financial statements are the responsibility of the City's management.. ~ Our responsibility is to express an opinion on these general purpose financial statements. based on our audit. We conducted our audit in accordance with generally accepted auditing standardsand the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards: require that we plan and perform the audit to obtain reasonable assurance about I whether the financial statements free of material misstatement. An audit includes are examining, on a test basis, evidence supporting the amounts and disclosures, in the general purpose financial statements. An audit also includes assessing the accounting: I principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. We believe that our i audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present I fairly, in all material respects, the financial position of the City of Bakersfield, California, as of June 30, 2000, and the results of its operations and the cash flows of its proprietary fund types for the year then ended in conformity with generally accepted accounting principles. Also, in our opinion, the combining, individual fund, and account group financial statements referred to above present fairly, in all material respects, the financial position of each of the individual funds and account groups of I the City of Bakersfield, California, at June 30, 2000, and the results of operations of such funds and the cash flows of individual proprietary funds for the year then ended in conformity with generally accepted accounting principals. The accompanying I required supplemental information as listed in the table of contents is presented for purposes of additional analysis and is not a required part of the general purpose I financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, I CITY OF BAKERSFIELD, CALIFORNIA is fairly stated in all material respects in relation to the general purpose financial . statements taken as a whole. The scope of our audit did not include the statistical information listed in the table of contents and, accordingly, we do not express an opinion on it. In accordance with Government Auditing Standards, we have also issued our report dated October 6, 2000 on our consideration of the City of Bakersfield's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN ACCOUNTANCY CORPORATION Bakersfield, California October 6, 2000 CITY OF BAKERSFIELD, CALIFORNIA INDEPENDENT AUDITOR'S REPORT (In relation to) To the Honorable Mayor and Members of the City Council. City of Bakersfield, California We have audited the accompanying general purpose financial statements ofthe'City of Bakersfield, California (City), as of June 30, 2000, and for the year then ended, as- listed in the accompanying table of contents. These general purpose financial statements are the responsibility of the City's management. Our responsibility~is to. express an opinion on these general purpose financial statements based on our audit.. We conducted our audit in accordance with generally accepted auditing standards.: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.- An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial An audit also general purpose statements. includes assessing the accounting principles used and significant estimates made by management~ as well as evaluating the overall general purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Bakersfield, California, as of June 30, 2000, and the results of its operations and the cash flows. of its proprietary fund types for the year then ended in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining and individual fund and account group financial statements and schedules listed in the table of contents are presented for of additional analysis and not of the purposes are a required part financial statements of the City. Such information, except for that portion marked "unaudited" on which we express no opinion, has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. CITY OF BAKERSFIELD, CALIFORNIA In accordance with Government Auditing Standards, we have also issued our report dated October 6, 2000 on our consideration of the City of Bakersfield's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN ACCOUNTANCY CORPORATION Bakersfield, California October 6, 2000 CITY OF BAKERSFIELD, CALIFORNIA I INDEPENDENT AUDITOR'S REPORT To the Board of Directors -~ The Central District Development Agency of the City of Bakersfield, California We have audited the accompanying component unit financial statements of the Central District Development Agency of the City of Bakersfield, California (Agency), as of June 30: 2000, and for the year then ended. These component unit financial statements are the responsibility of the Agency's management. Our responsibility is to express an opinion on these component unit financial statements. based on our audit. ': ~ ~ ... We conducted our audit in accordance with generally accepted auditing standards and government auditing standards, issued by the Comptroller General of the United-.. States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material' misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the component unit financial statements. An audit also includes assessing the accounting principles used and significant estimates made.by management, as well as evaluating the overall component unit financial statement We believe that audit reasonable.basis for presentation. our provides a our opinion. In our opinion, the component unit financial statements referred to in the first paragraph present fairly, in all material respects, the financial position of the City of Bakersfield, California, as of June 30, 2000, and the results of its operations and the cash flows of its proprietary fund for the year then ended in conformity with generally accepted accounting principles. I Our audit was conducted for the purpose of forming an opinion on the component unit financial statements taken as a whole. The combining and individual fund financial statements are presented for purposes of additional analysis and are not a I required part of the financial statements of the AgenCy. Such information has been subjected to .the auditing procedures applied in the audit of the component unit financial statements and, in our opinion, is fairly presented in all material respects in I relation to the unit financial statements taken whole. component as a CITY OF BAKERSFIELD, CALIFORNIA In accordance with Government Auditing Standards, we have also issued our report dated October 6, 2000 on our consideration of the agency's internal control over financial reporting and 'our tests of its compliance with certain provisions of laws, regulations, contracts and grants. BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN ACCOUNTANCY CORPORATION Bakersfield, CalifOrnia .October 6,~2000 I 25 CITY OF BAKERSFIELD, CALIFORNIA I i INDEPENDENT AUDITOR'S REPORT The Board of Directors The City of Bakersfield Bakersfield Public Financing Authority We have audited the accounting financial statements of the Bakersfield Public Financing Authority (Authority), a component unit of the City of Bakersfield; as of and for the year ended June 30, 2000, as listed in the accompanying table of contents. These component unit financial statements are the responsibility of the Authority?s management, responsibility to express an opinion on Our is these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the component unit financial statements referred to above present fairly, in all material respects, the financial position of the Bakersfield Public Financing Authority, as of June 30, 2000, and the results of its operations for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated October 6, 2000 on our consideration of the Authority's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN ACCOUNTANCY CORPORATION Bakersfield, Califomia. October 6, 2000 I I CITY OF BAKERSFIELD, CALIFORNIA I I AUDITOR'S REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH I GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and I Members of the City Council City of Bakersfield, California I We have audited the financial statements of the City of Bakersfield, California; as.- of and for the year ended June 30, 2000, and have issued our report thereon dated I 6, conducted our audit in accordance with generally accepted October 2000. We auditing standards and the standards applicable to financial audits contained:in i GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General' ~. of the United States. i Compliance . As part of obtaining reasonable assurance about whether the City of Bakersfield, California's, financial statements are free of material misstatement, we performed I tests of its compliance with certain provisions of laws, regulations, contracts'and '. grants, noncompliance with which could have a direct and material effect on the determination of financial statement' amounts. However, providing an opinion on I compliance with those provisions was not an objective of our audit and, accordingly; we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under GOVERNMENT I AUDITING STANDARDS. Internal Control Over Financial Reporting I In planning and performing our audit, we considered the of City Bakersfield, California's, internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial I provide assurance on the internal control over financial. statements and not to reporting. Our consideration of the internal control over financial reporting would i not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not i reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing I their assigned functions. We noted no matters involving .the internal control over financial reporting and its operation that we consider to be material weaknesses. CITY OF BAKERSFIELD, CALIFORNIA This report is intended for the information of the audit committee, management and federal awarding agencies and pass-through entities. However, this report is a' matter of public record and its distribution is not limited. BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN ACCOUNTANCY CORPORATION Bakersfield, Califomia October 6, 2000 I I I CITY OF BAKERSFIELD, CALIFORNIA AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 To the Honorable Mayor and Members of the City Council City of Bakersfield, California Compliance We have audited the compliance of the City of Bakersfield, California, with the. " types of compliance requirements described in the U. S. Office of Management and Budget (OMB) Circular A- 133 Compliance Supplement that are applicable to each.' · · of its major federal programs for ~ the . year ended June 30, 1999. The.City. of. Bakersfield's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and. grants applicable to each of its major: federal programs is the responsibility of the City of' Bakersfield's management.t Our responsibility is to express an opinion on the City.. of Bakersfield's compliance based on our audit-. We conducted our audit of compliance in accordance with generally accepted.. auditing standards; the standards applicable to financial .. audits 'contained'~in .- GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of the United States; and OMB Circular A-133, "Audits of States, Local Governments, and Non-Profit Organizations." Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred' to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City of Bakersfield, California's compliance with those requirements and performing such other procedures as we considered in the cirCumstances. We believe that necessary our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City of Bakersfield's compliance with those requirements. In our opinion, the City of Bakersfield, California, complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2000. I 29 CITY OF BAKERSFIELD, CALIFORNIA Internal Control Over Compliance The management of the City of Bakersfield, California, is responsible for' establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the City of Bakersfield's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our I auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB. Circular A-133. I Our consideration of the internal control over compliance would not necessarily : disclose all matters in the internal control that might be material weaknesses. A I.... material weakness is a condition in which the design or operation of one or more of · '~ .... the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations;, contracts and. I. '. grants relation to a major federal program being audited that would be material in .-. may occur and not be detected within a timely period by employees in the normal · course of performing their assigned functions: We noted no matters involving,the internal 'control over compliance and its operation that we consider to be material weaknesses:. · Schedule of Expenditures of Federal Awards I We have audited the general purpose financial statements of The City of Bakersfield, ~ Califomia, as of and for the year ended June 30, 2000, and have issued our report: I · thereon dated October 6, 2000. Our audit was performed for the purpose of forming ' ~ an opinion on the general purpose financial statements taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes: of additional analysis as required by OMB Circular A-133 and is not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial I statements and, in our opinion, is fairly stated, in all material respects, in relation to the general purpose financial statements taken as a whole. CITY OF BAKERSFIELD, CALIFORNIA This report is intended for the information of the audit committee, management and federal awarding agencies and pass-through entities. However, this report is a matter I of public record and its distribution is not limited. BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN ACCOUNTANCY CORPORATION Bakersfield, California October 6, 1999 I I CITY OF BAKERSFIELD, CALIFORNIA I INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE To the Board of Directors The Central District Development Agency of the City of Bakersfield, California We have audited the unit financial statements of the Central District component Development Agency of the City of Bakersfield, California (Agency), as of and for the year ended June 30, 2000, and have issued our report thereon dated October 6, 2000. We conducted our audit in accordance with generally accepted: auditing standards and Government Auditing Standards. Those standards require..~ that we plan and perform the audit to obtain reasonable assurance about whether · the financial statements are free of material misstatement. Compliance with laws and regulations applicable to the Agency is the ' responsibility of the Agency's management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the Agency's compliance with provisions of laws and regulations contained in the Guidelines For Compliance Audits of . California Redevelopment Agencies issued by the State Controller's Office, Division of Local Government Fiscal Affairs. The results of our tests indicated that, with respect to the items tested, the Agency complied, in all material, with the referred respects, provisions to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Agency had not complied, in all material respects, with those provisions. This report is intended for the Agency, and the State Controller's Office. However, this report is a matter of public record and its distribution is not limited. BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN ACCOUNTANCY CORPORATION Bakersfield, California October 6, 2000 I I CITY OF BAKERSFIELD, CALIFORNIA I I INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE ! To the Technical Advisory Committee of the Bakersfield Subregional Wastewater Management Plan, the City of Bakersfield, - ': .Calfomia, the Kem Sanitation Authority, and the East Niles Community Services District We have applied the procedures enumerated below to determine the City of Bakersfield's compliance with certain provisions of contractual requirements'as< specified in the City of Bakersfield Agreement 76-153, as amended by Agreements 76-153(4), 77-44, 85-197, and 92-106, regarding the Bakersfield Subregional Wastewater Management Plan. These procedures, which were agreed to by. the~Technical Advisory Committee, were performed solely to assist. you in meeting the'requirements of City of Bakersfield Agreement 76-153, as amended by Agreements 76-153(4), 77-44, 85-197, and 92-106. This report is intended for the information of the Technical Advisory Committee of the Bakersfield Subregional Wastewater Management Plan, management, appropriate: regulatory agencies, and the City Council of the City of Bakersfield, California. This restriction is not intended to limit the distribution of this report, which is a matter of public record. We reviewed and tested the City of Bakersfield's compliance with certain provisions of contractual requirements as specified in City of Bakersfield Agreement 76-153, as amended by Agreements 76-153(4), 77-44, 85-197, and 92- 106. These procedures resulted in no current year finding and recommendation. These agreed-upon procedures are substantially less in scope than an audit, the objective of which is the expression of an opinion on the City of Bakersfield's compliance with certain provisions of contractual requirements as specified in City of Bakersfield Agreement 76-153, as amended by Agreements 76-153(4), 77- 44, 85-197, and 92-106. Accordingly, we do not express such an opinion. Based on the application of the procedures referred to above, nothing came to our attention that caused us to believe that the City of Bakersfield had not complied with certain provisions of contractual requirements in of as specified City CITY OF BAKERSFIELD, CALIFORNIA Bakersfield Agreement 76-153 Agreements 76-153(4), 77-44, 85-197, and 92- 106. Had we performed additional procedures or had we made an audit of the City of Bakersfield's compliance with certain provisions of contractual requirements as specified in City of Bakersfield Agreement 76-153 Agreements 76-153(4), 77-44, 85-197, and 92-106, matters might have come to our attention that would have been reported to you. BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN ACCOUNTANCY CORPORATION Bakersfield, California October 6, 2000 34 CITY OF BAKERSFIELD, CALIFORNIA To the Honorable Mayor and Members of the City Council City of Bakersfield, California I We have applied the procedures enumerated below to the accompanying Appropriations Limit worksheet #6 of the City of Bakersfield for the year ended June 30, 2000. These procedures, which were agreed to by the League of I Califomia Cities and presented in their Article XIIIB Appropriations Limitation Uniform Guidelines, were performed solely to assist you in meeting the requirements of Section 1.5 of Article XIIIB of the Califomia Constitution. This I report of management and the City Council. This is intended for the information restriction is not intended to limit the distribution of this report, which is a matter of public record. : I · The proce, dures performed and our findings were as follows: I 1. We obtained the completed worksheets (# 1 through #7) presented in the Article XIIIB Appropriations Limitation Uniform Guidelines, and determined that the I limit and annual adjustment factors were adopted by resolution of the City Council. 2. For the accompanying Appropriations Limit worksheet #6, we added line A, last year's limit, to. line E, total adjustments, and agreed the resulting amount to line F, this year's limit. 3. We agreed the current year information presented in the accompanying Appropriations Limit worksheet #6 to the other worksheets described in # 1 above. 4. We agreed the prior year appropriations limit presented in the accompanying Appropriations Limit worksheet #6 to the prior year appropriations limit adopted by the City Council during the prior year. These agreed-upon procedures are substantially less in scope than an audit, the objective of which is the expression of an opinion on the accompanying Appropriations Limit worksheet #6. Accordingly, we do not express such an opinion. I 35 ! I CITY OF BAKERSFIELD, CALIFORNIA Based on the application of the procedures referred to above, nothing came to our attention that caused us to believe that the accompanying Appropriations Limit worksheet #6 was not computed in accordance with Article XIIIB of the California Constitution. Had we performed additional procedures or had we made an audit of the accompanying Appropriations Limit worksheet #6 and the other completed worksheets described in #1 above, matters might have come to' our ~. attention that would have been reported to you. BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN ACCOUNTANCyCORPORATION Bakersfield, Califomia October 6, 2000 I CITY OF BAKERSFIELD, CALIFORNIA .... To the Honorable Mayor, Budget and Finance Committee and Members of the City Council City of Bakersfield, California In planning and performing our audit of the general purpose financial statements · of the City of Bakersfield, California for the year ended June 30, 2000, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control structure. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgement, could adversely affect the City's ability to 'record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements. Certain items came to our attention, that while not material or reportable for Federal and State compliance purposes, offer an opportunity for improvement or efficiencies in the areas of compliance, operations'and internal controls. All' findings have been discussed with the appropriate 'level of management. This letter details those findings for your information and also addresses the status of the recommendations made for the year ended June 30, 1999. STATUS OF PRIOR YEAR RECOMMENDATIONS (As applicable) I CURRENT YEAR FINDINGS AND RECOMMENDATIONS i (As applicable) I CITY OF BAKERSFIELD, CALIFORNIA 1 i This report is intended solely for the information and use of the audit committee, City Council, management, and the California State Controller. I : BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN ACCOUNTANCY CORPORATION Bakersfield, California October 6, 2000 CITY OF BAKERSFIELD, CALIFORNIA ! i COMMUNICATION WITH AUDIT COMMITTEE I October 6, 2000 .: To the Audit Committee City of Bakersfield We have audited the general purpose financial statements of the City of Bakersfield for the year ended June 30, 2000, and have issued our report thereon dated October 6, 2000. Professional standards require that we provide you with the information related audit. · following to Our Our Responsibility under Generally Accepted Auditing Standards-' As stated in our engagement letter dated May 17, 2000, our responsibility, as described by professional standards; is to plan and perform our audit to obtain ." '. reasonable, .but not absolute, assurance about whether the financial statements are free of material misstatement. Because of the concept of reasonable assurance and because we did not perform a detailed examination of all transactions, there is a risk that material errors, irregularities, or illegal acts, including fraud and defalcations, may exist and not be detected by us. As part of our audit, we considered the internal control structure of the City of ~' Bakersfield. Such considerations were solely for the purpose of determining .Our audit procedures and not to provide assurance concerning such internal any control structure. Significant Accounting Policies Management has the responsibility for selection and use of appropriate accounting policies. In accordance with the terms of our engagement letter, we will advise management about the apprOpriateness of accounting policies and their application. The significant accounting policies used by the City of Bakersfield are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2000. We noted no transactions entered into by the City of Bakersfield during the year that were both significant and unusual, and of which, under professional standards, we are required to inform you, or transactions for which there is a lack of authoritative guidance or consensus. 39 CITY OF BAKERSFIELD, CALIFORNIA Management Judgements and Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. Certain accounting estimates are particularly sensitive because of their significance to the possibility that future events affecting financial statements and because of the them may differ significantly from management's current judgments. Management's estimate of the [as applicable] is based on [as applicable]. We . evaluated the key factors and assumptions used to develop the [as applicable] in determining that it is reasonable in relation to the financial statements taken as a whole .... Significant Audit Adjustments For purposes of this letter, professional standards define a significant audit .~. adjustment as a proposed correction of the financial statements that, in our judgment, may not have been detected except through our auditing procedures. These adjustments may include those proposed by us but not recorded by the Companythat could potentially cause future financial statements to be materially misstated,: even thoughwe have concluded that such adjustments are not material. to the current finaficial statements. We proposed no audit adjustments that could, _ our judgment, individually or in the aggregate, have a significant effect in either on the Company's financial reporting process. ::. Other information in documents containing audited financial statements (Appropriate information will be communicated as applicable). Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. 'Consultations with Other Independent Accountants To the best of our knowledge, management has not Consulted with or obtained opinions from other independent accountants during the past year that are subject to the requirements of Statement on Auditing Standards No. 50, "Reports on the Application of Accounting Principles." 40 CITY OF BAKERSFIELD, CALIFORNIA ! Issues Discussed Prior to. Retention of Independent Auditors I We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as I the Company's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a conditiOn to our retention. · . Difficulties Encountered in Performing the Audit ~ I We encountered no significant difficulties in dealing with management in' '. ;. performing our audit. I This information is intended solely for the use of the Audit Committee, City ~ . '.... Council, and management and should not be used for any other purpose. ~ Very truly yours, : .' BROWN ARMSTRONG RANDALL REYES I PAULDEN & McCOWN ACCOUNTANCY, CORPORATION I I CITY OF BAKERSFIELD; CALIFORNIA SPECIAL CONSIDERATIONS As evidenced by our prior engagements, we have proven we are able to provide you with technical assistance in meeting the requirements of the GFOA Certificate of Achievement for Excellence in Financial Reporting Program. Further, we have and will continue to provide the City with timely, accurate advice regarding payroll of the City. 42 . CITY OF BAKERSFIELD, CALIFORNIA PROPOSER GUARANTEES 1. The proposer certifies it can and will provide and make available, as a minimum, all services set forth in Section H, Nature of Services Required, of the City's Request for Proposal dated March 1, 2000 Signature of Official:~ Name: Andrew J. Paul6'6n ~/~" - Title: Principal Firm: Brown Armstro~/ Date: March 27, 20~ CITY OF BAKERSFIELD, CALIFORNIA PROPOSER WARRANTIES 1. Proposer warrants that it is willing and able to comply with State of California laws with respect to foreign (non-state of California) corporations. 2. Proposer warrants that it is willing and able to obtain an errors andomissions insurance policy providing a prudent amount of coverage for the willful or neglegent acts; or omissions of any officers, employees or agents thereof. 3. Proposer warrants that it will not delegate or subcontract its responsibilities under an agreement without the prior written permission of the City of Bakersfield. 4. Proposer warrants that all information provided by it in connection,with this proposal is true and accurate. ~ Signature of Official:~"~ ~'?J~~~ Name: Andrew J. Paulde~~ Title: Principal ~/ Firm: Brown Armstrong Date: March 27, 2000 I I CITY OF BAKERSFIELD, CALIFORNIA EXHIBITS Exhibit I External Quality Control Review Report SMITH, DUKES & BUCKALEW January 15, 1997 I To the Shareholders . '.-- . Brown Armstrong Randall & Reyes, A.C. I reviewed the of control for the and We have system quality accounting auditing, practice of Brown Armstrong Randall 8= Reyes, A.C. (the fi_q=) in effect for the year~ ended October 31, 1996. Oux review was conducted in conformity with standards for I peer reviews promulgated by the peer review committee off the SEC practice section of the AICPA Division for CPA Firms (the section). We tested compliance with the firm's' quality control polities and procedures and w~th the membership requirements of the i section to the extent we considered appropriate. These tests included the application of'the firm's policies and procedures on selected accounting and auditing engagements. In performing our review, we have given consideration to the general I characteristics of a system o~quality control as described in quality control standards issued by the AICPA. Such a system should be appropriately comprehensive and. suitably designed in relation to the firm's organizational structure, its policies, and t~e. nature of its practice. Variance in individual performance can affect the degree of. I compliance with a firm's prescribed quality control policies and proceduxes. Therefore, adherence to all policies and procedures i/t every case may not be possible. As is- customary in a peer review, we are issuing a letter under this date that sets ~orth I comments related to certain policies and procedures or compliance with them. None .. of these matters were considered to be of s~cient sigrdficance to affect the opinion= eXPressed in this report. I In our opinion, the system of quality control for the accounting and auditing practice of Brown Armstrong Randall & Reyes, A.C. in effect for the year ended October 31, 1996, met the objectives of quality control standards established by the I AICPA, and was being complied with during the year then ended to provide the firm with reasonable assurance of conforming with professional standards. Also, in our opinion, the firm was in conformity with the membership requirements of the section i in. all material respects. I I Exhibit II SCO Quality Review Report AUDITOR'S lqF PORT Summary We trove perfm.,ed a quality control review of tine audit working pal:~rs relating to Brown Waits & Armstrong, Accountancy Corporation's audits of the City of Bakr'r$field and th'e B=¥,'rsfield City Element..xry School District for the fiscal year ended June 30, 1990. We determined that the to fully audits referred Rbove complied criteria contained in the K-12 .Audit Guid,' mhd fed=:-al standards znd requirements.. Background Any goveramentaI unit wlxich is subject to a single audit must have the audit performed in accordance with the standards referred to in tlzis report. According to Office of Management and Budget (OM:B) Circulzr A-128, the auditor's work is subject to a quality control review at the discretion of an agency granted cognizant or oversight status by the federal funding agency. . The State Controller's Office has entered into agreements with various federal agencies to retain cogn~.xnt and/or oversight authority for single audits of federal funds subvented to locz! governmental units ia Califorrda. In addition, Education Code Section 14504.2 authorizes the Stzte Controller to perform quality control reviews of working papers for audits of K-12 Local EdhcatioaaI Agencies. Objectives, We conducted our review to determine whether the audits complied Scope, and with the criteria contained in the Star. dar& and ProcedurexforAudirs Methodology of California K-!2 Local Educational Agencies CK-12 Audit Guide) published by' the State Controller's Office. ,-Ns guide encc~mpzss-..s generally accepted auditing standards; the U.S. General Accounting Office's Goverztrnent Audit Standards (1988 Edition); znd the requirements of the Single Audit Act of 1984 and OM3 Circuh.r A-128. Our review was limited to the following procedures: 1. We reviewed the approach and methodology used by the firm in conducting the audits.47 AUDITOR'S RF PORT (cOntinued) 2. Wc rev/owed audit working papa's and they wh¢_~hct- cont~ned ~afficient ~vid~c~ to demot~$trat~ ~dhexexlc,~ 3, ~e re~ew~ aunt worHng to demons~m ~at r~u~emen~ were pro,fly r~ul~ properly I Conclusion. We detm-mlned that the ~ud~ts referred to ~bov¢ fitlly com~)l~ed with thc cHtex'~ cont~ in the K-12 Aunt Grade ~.nd st~.~'d~ ~d I rextuLrcmcnts described in this T'fis report is applicable solely to the audits referred to above mci is I ..~ not intended to pertain to any other audit work of the fu'm. I Views of Brown Wa/ts and Armstrong, Accountmcy Corporat/oa agreed with thc ResponsibIe. conclusions presented ia t~¢ qn~!ity control rcvi:w rcl~..rt. I O fficials I I I ! I CITY OF BAKERSFIELD, CALIFORNIA Exhibit III Resumes Andrew J. Paulden, CPA Burton H. Armstrong, CPA Thomas Young, CPA Gnell Sparks-Babb I Amanda Wilson, staff I Bobby Thomas, staff I I ...... "~::;~:' ""::~::'"'"'"'"'"'"'"' ' '~i:~;:;~::::.'":::::';':.:'~ ~-~ I I I I Principal I Brown Armstrong Randall Reyes Paulden & McCown Accountancy Corporation I Academic Background: California State University, Chico, 1985 Bachelor of Science Degree in Business Administration Concentration in Accounting I Counties: Financial Institutions: Summary of Experience: Cities: City of Bakersfield County O~Tulare · San Joaquin Bank · City of Ridgecrest County of Monterey Mojave Desert Bank i City of Tehachapi County of Kern First Coastal Bank .. City of Delano Taft National Bank City of Fresno Rancho Dominguez Bank City of Arvin i City of Coalinga Publicly Traded Companies . City of Tulare Shafier Recreation & Park District Non-Profit: Royale Energy, Inc. :~. · Boy Scouts of America Petrominerals, Inc. I Greater Bakersfield Legal Assistance Tri-Valley Oil, Inc. -. Bethany Services, Inc. Brush Creek Mining and' Development CO., Inc. Community Education and Research Foundation . Broadcastine: I Owens Broadcasting Company, LLC Retirement Systems: Owens Production Company, InC. Kern County Employees' Retirement Association Ventura County Employees' Retirement Association Health Care: I Fresno City Employees' Retirement Association Tehachapi Valley Hospital District Tulare County Employees' Retirement Association School Districts: : Madera Unified School District Ventura County Employees' Retirement Association Kern High School District i · Fresno City Employees' Retirement Association I Standard School District Tulare County Employees' Retirement Association Taft High School District I Mojave Unified School District Norris School District Yosemite Union High School District Greenfield Union School District I Richgrove School District Cai State Bakersfield Foundation I Continuing Education Courses: Governmental Accounting and Auditing Update, 1999 Solving complex single audit problems, 1999 I The CPA Report: Governmental A & A Specialist, Quarterly Update, 1991 to 1998 Single Audits of Not-for-Profits, 1998 Accounting & Auditing Update, 1998 i School District Conference, 1995 - 1998 Professional Associations: American Institute of Certified Public Accountants I California Society of Certified Public Accountants Governmental Auditing and Accounting Committee, State Committee, Member at Large Council of Petroleum Accountants Society, Bakersfield Chapter I s0 I Audit Coordinator of BroWn Armstrong Randall Reyes Paulden & McCown Accountancy Corporation, with specialization in extractive industry, financial institutions and SEC practice Academic Background: University of California, Berkeley, Political Science Major, 1962 California State University, Northridge, 1967 Bachelor of Science Degree in Accounting Golden Gate University, Los Angeles Campus, 1989 Master of Science Degree in Taxation .. Pan-time auditing lecturer at California State University, Bakersfield, Spring Quaner 1996. Summary of Experience: Brown Armstrong, 1985 to Present Audit and accounting coordinator: SEC audits; extractive, financial institutions and municipal. Fox & Company, Bakersfield, 1970 - 1985: Managing Parmer, local office international accounting finn. Audit and Extractive industry Coordinator. SEC registrations, annual audits i and tax planning. ., KPMG/Peat Marwick, San Diego office, 1967 - 1970. Audit and Tax. High'lights: NASDAQ Companies: .~ · ~ I. Aladdin Oil, Inc., Audit partner 1998-present - Royale Energy, Inc., audit panner, 1994 - present. Petrominerals, Inc., audit partner, 1995 - present ~ Tri-Valley Corporation, audit partner, 1980 - present Brush Creek Mining & Development Co., Inc., audit partner, 1994 - present Banks: San Luis Trust Bank, Audit partner I Mojave Desert Bank. Concfirring audit partner San Joaquin Bank. Auditpartner Sierra National Bank. Audit partner Mission Bank. Auditpartner Finance & Thrift, Audit partner I Public Pension Plans: i Kern County Employees? Retirement Association, Audit Panner 1987-1994, Concurring Panner, 1995-Present Municipalities: I Kern County Water Agency, 1994-2000 County of Kern. Grand jury audits, 1971, 1976. First CAFR audit, 1979. Currently on fourth 3 year contract (11 years completed). CAFR, single audit, component units, compliance audits. I (Teaching Hospital). 1998-2000 Kern Medical Center County ofTulare, Visalia. Concurring audit partner for 5 years, through June 30, 1999. Previously audit partner 1980 - 1981. I City of Bakersfield. Currently concurring audit partner. Currently on second 5year contract (10 years completed). Assisted during 1970s setting up financial statements for GFOA awards, which are now continually earned by the City for its CAFR. I Continuing Education Courses: AICPA Peer Review Team Captain Court, San Diego, CA, 1998. i SEC Accounting and Auditing Update, Dallas, 1994. Two days. AICPA SEC Update, Washington, D.C., 1997 Professional Associations: California Society of Certified Public Accountants, Peer Review Team Captain. i 200 reviews completed. Bakersfield Chapter, California Society of Certified Public Accountants, member, Past Pres. Council of Petroleum Accountants Society} Past President, Bakersfield Chapter California Independent Producers Association, Board member tax committee member. Senior Accountant Brown Armstrong Accountancy Corporation Academic Background: University of California, Davis, 1994 ~:. ~. · Bachelor of Arts Degree in Economics Summary of Experience: Cities: Extractive Industries:: ~.~ Other Government: citY of Tulare Aladdin Oil, Inc North Bakersfield' Parks & CitY of Bakersfield Los Alamos Energy Recreation CitY of Fresno' N-W Oil & Gas Bear Valley Springs Assoc. CitY of Tehachapi Petrominerals Corp. Target Area Programs CitY of Santa Barbara Royale Energy Corp. Kern Council of Government CitY of Ridge~rest. Makoil, Inc. Kern CountY Bar Assoc. Counties:. i'. San Joaquin Refining, lnc Self-Insured Scho°ls CountY of Kern Titan Energy, Inc. Mojave Public Utility District County of Tulare Tri-Valley Oil & Gas, Inc. Tule River Tribal Council County of Monterey Western Drilling, Inc. Westside MosquitO and Vector District School Districts: Bakersfield City School District Publicly Traded Companies: Madera Unified School District Automated Temporary Service Yosemite High School District Out-Takes, Inc. Kern High School District Quintek Corp. Transit DiStricts: ~. Med-Mart - 401K Omni Trans Transit, San Bernadino Contra Costa CountY Transit Financial Institutions: Golden Empire Transit Sierra National Bank San Joaquin Bank Retirement Systems: Mission Bank Kern County Employee Retirement System Mojave Desert Bank Agriculture and Farming: A&P Growers, Inc. Professional Affiliations: Member Voluntary Income Tax Assistance American Institute of Certified Public Accountants California SocietY of CPAs Continuing Education: Accounting and Auditing Update, 1998-1999 Single Audit Update, 1998-1999 Spidell Tax Update, 1999 Business Appraisal and Development, 1999 Government -Efficient audit & analytical procedures review, 1999 Government Accounting and Auditing review, 1999 Qualified State Tuition Re¥iew, 1999. s2 !1 I I Staff Accountant I Brown Armstrong Randall Reyes Paulden & McCown Accountancy Corporation ! Academic Background: California state University, Bakersfield, 1996 .. I Bachelor of Science Degree in Accounting I $~mmary °fExperiencoi'~ Brown Armstrong- Febrnary 1998-present' ' " Cities: ' ' Retirement Associations: City of Bakersfield Tulare County Retirement Association ,! : City of Coalinga City ofTulare. i . City of Fresno ~: Non-Profit: ' Kern County Museum Foundation Counties: i County of Kern School Districts: County &Monterey Madera Unified High School District County of Tulare Kern High School District I Other Cai State Bakersfield Foundation Government: Kern County Water Agency I Financial Institutions: San Joaquin Bank I I I Continuing Education: Spidell California Tax Update, 1998 I Gear Up Tax Seminar, 1999 I 1 I I I I StaffAccountant Brown Armstrong Accountancy Corporation ! Academic Background: California State University, Bakersfield,. 1998 ~ Bachelor of Science Degree in Business Administration I Concentration in Accounting I Summary of Experience: Williams Duffield & Company, 1995-1998 I Cities: City of Coalinga : City of Bakersfield Retirement Systems: Kern County Employees' Retirement Association I Other Governmental: San Joaquin Valley Ai~ Pollution Control District North Bakersfield Recreation and Park District Non-Profit: I Great Bakersfield Legal Assistance Financial Institutions: I Mojave Desert Bank School Districts: I Madera Unified School District Yosemite Union High School District Greenfield Unified School District I I Continuing Education: Gear Up Tax Seminar, 1999 Spidell Califormia Tax Update, 1998, 1999 Commissions Update, 1999 I Governmental Accounting and Auditing "Status, changes, & update" class, 1999 I I 54 StaffAccountant Brown Armstrong Accountancy Corporation Academic Background: California State University, Bakersfield Master of Business Administration with a concentration in Finance Bachelor of Science with a concentration in Accounting ' Summary of Experience: Cities: Counties: City of Santa Barbara County of Kem City of Tulare County of Tulare City of Delano City of Fresno Oil and Gas Audits: City of Bakersfield Crest Resources (joint venture audit) Elk Hills (Chewon) School Districts: Agriculture and Farming: Kem High School District A&P Growers Software Trainine Actively train clients and staffon new audit software "ACL", Excel, ATB, File in Tim, Crystal Reports Past Work Experience Dole Fresh Fruit, Corp. Accountant / MIS Assistant: performed multiple accounting tasks, designed intricate reports, experienced a major solq:ware conversion, consulted other accountants on Excel, JDE and provided automation techniques. I Continuing Education: Governmental Accounting & Auditing Update, 1999 I ! Exhibit IV I BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN CERTIFIED PUBLIC ACCOUNTANTS I SUMMARY OF RECENT GOVERNMENTAL AUDIT EXPERIENCE ICAFR AND SINGLE AUDITS COUNTIES: CITIES: Redevelopment Agencies: I County of Kern City of Arvin Arvin County of Monterey City of Bakersfield Bakersfield County of Tulare City of Coalinga Coalinga i City of Delano Delano City of Fresno Fresno City of Ridgecrest Monterey i City of Tehachapi Ridgecrest City of Tulare Tulare TRANSIT: RECREATION & PARK DISTRICTS: I Authority Recreation & Park District Central Contra Costa Transit North Bakersfield Fresno Council of Govemment Shafter Recreation & Park District,, Kern Council of Government Bear Mountain Recreation & Park. District IFresno Transit Golden Empire Transit Omnitrans (San Bernardino Transit) I TRANSPORTATION DEVELOPMENT ACT AUDITS: ~ Fresno Council of Governments I Kern Council of Governments OTHER LOCAL GOVERNMENTS: HEALTH CARE: I Kern County Employee's Retirement Association Sierra Health Network Tulare County Employee's Retirement Association Tehachapi Valley Hospital Fresno Employees Retirement System Kern Medical Center I Ventura County Employee's Retirement Association MediCo Delano Employee Retirement System Natividad Medical Center,Monterey Kern County Water Agency I Madera Unified School District Yosemite Unified School District SELF INSURANCE: IACCEL (Authority of California City's Excess Liability) sisc (Self Insured Schools of California) I NOT-FOR-PROFIT ORGANIZATIONS Bethany Services ICenter for the Blind and Visually Impaired Kern County Museum Ebony Counseling Center I I 56 ADMINISTRATIVE REPORT MEETING DATE: June 14, 2000 AGENDA SECTION: Hearings ITEM: 9. i. TO: Honorable Mayor and City Council APPROVED FROM' Alan Tandy, City Manager DEPARTMENT HEAD ' DATE: June 8, 2000 CITY.ATTORNEY CITY MANAGER SUBJECT: Public Hearing for the FY 2000-01 Operating, Bakersfield Redevelopment Agency and. Capital Improvement Program Budgets. RECOMMENDATION: Staff recommends Council hear public testimony. {~ACKGROUND: ~_. Each year a public hearing is required prior to adoption of the budget t© hear public comment. The FY 2000-01 budget is proposed at $248,593,003 which includes a $213,243,920 operating budget, a $6,230,192 Bakersfield Redevelopment Agency budget and a $29,118,891 capital improvement budget. Final adoption of the budget is scheduled for June 28, 2000. Prior to this public hearing, individual department budget presentations were made to the Council on May 15, 2000, May 22, 2000 and May 24, 2000. Responses to Council budget questions resulting from the budget presentations were forwarded to each Council member with the general 'information package on May 19, 2000 and June 2, 2000. DVVH:jp S:~Darnell~drnins~J N00budgetpublichearing June 8, 2000, 10:40AM CITY OF BAKERSFIELD FY 2000-01 PROPOSED BUDGET Departmental Appropriations by Fund Budget Summary Operating Budgets City of Bakersfield $14,029,199 $39,775,656 $19,297,555 $54,757,477 $9,422,073 $14,854,185 $9,028,830 $52,078,945 $213,243,920 Bakersfield Redevelop. Agency $0 $0 $0 $0 $0 $0 $116,492 $6,113,700 $6,230,192 · Total Operating $14,029,199 $39,775,656 $19,297,555 $54,757,477 $9,422,073 $14,854,185 $9,145,322 $58,192,645 $219,474,112 Capital Improvements City of'Bakersfield $1,092,600 $500,000 $503,000 $21,375,020 $4,432,500 $705,771 . . $360,000 $0 $28,968,891 Bakersfield Redevelop. Agency $0 $0 $0 $150,000 $0 $0 $0 $0 $150,000 Total Capital Improvements $1,092,600 $500,000 $503,000 $21,525,020 $4,432,500 $705,771 $360,000 $0 $29,118,891 TotalAppropriations $15,121,799 $40,275,656 $19,800,555 $76,282,497 $13,854,573 . $15,559,956 $9,505,322 $58,1921645 $248,593,003 CITY OF BAKERSFIELD FY 2000-01 PROPOSED BUDGET Departmental Appropriations by Fund Operatin.q Bud.qet General Fund $7,842,605 $38,092,736 $19,297,555 $11,759,414 $10,429,045 $5,850,533 $7,478,112 $100,750,000 Transient Lodging Taxes $4,425,140 $4,602,275 $9,027,415 Gas Tax $2,295,827 $2,295,827 Traffic Safety $1,682,920 $1,050,000 $2,732,920 Municipal Improvement Debt $340,373 .. $340,373 Public Financing Authority · $24,000 $12,703,500 $12,727,500 Capital Outlay Fund $0 Arena Project Fund $0 Transportation Development $2,024,932 $2,024,932 Agriculture Water $3,076,154 $1,131,200 $4,207,354 Domestic Water $6,345,919 $1,196,838 $7,542,757 Parking Lots/Structur,es $145,691 $145,691 Park Improvement Fund $1,451,213 $1,451,213 Refuse Collection $21,430,000 $140,000 $21,570,000 Aviation Fund $122.813 $122,813 Self Insurance $5,164,584 $5,164,584 Supplemental Law Enforce. $0 Equipment Management $882,172 $12,117,316 $12,999,488 Wastewater Treatment Plant $35,100 $7,032,107 $13,338,420 $20,405,627 Community Dev. Block'Grant $3,032,606 $340,373 $3,372,979 Assessment Districts $80,738 $6,281,709 $6,362,447 Total Operating $14,029,199 $39,775,656 $19,297,555 $54,757,477 $9,422,073 $14,854,185 $91028,830 $52,078,945 $213,243,920 CITY OF BAKERSFIELD FY 2000-01 PROPOSED BUDGET Departmental Appropriations by Fund I City of Bakersfield Capital Improvements Surfact Transportation (!STEA) $3,805,300 $3,805,300 Transportation (TDA) $0 Gas Tax $2,207,400 $2,207,400 Park Improvement $273,508 $273,508 Captial Outlay Fund $1,092,600 $503,000 $1,055,000 $395,763 $20,000 $3,066,363 Arena Project Fund $0 Transportation Development $1,769,000 $1,769,000 Road and Bridge Bond Funds $0 Agriculture Water $503,250 $503,250 Domestic Water $3,929,250 $3,929,250 Parking Lots/Structures $0 Refuse Collection $122,000 $122,000 Aviation Fund $60,000 $60,000 Amtrak Railway $0 Public Facilities $0 Equipment Management $0 Wastewater Treatment Plant $11,456,000 $11,456,000 Community Dev. Block Grant $900,320 $36,500 $340,000 $1,276,820 Supplemental Law Enforce. 500,000 $500,000 Assessment Districts $0 Total Capital Improvements $1,092,600 $500,000 $503,000 $21,375,020 $4,432,500 $705,771 $360,000" $0 $28,968,891 Total City of Bakersfield $15,121,799 $40,275,656 $19,800,555 $76,132,497 $13,854,573 $15,559,956 $9,388,830 $52,078,945 $242,212,811 CITY OF BAKERSFIELD FY 2000-01 PROPOSED BUDGET Departmental Appropriations by Fund Bakersfield · Redevelopment Agency Operating Bud.qet Downtown $34,793 $1,585,000 $1,619,793 Oldtown Kern Pioneer $13.479 $69,300 '$82,779 Southeast $18,220 $71,400 $89,620 Housin.q Downtown $50,000 $50,000 OIdtown Kern Pioneer Southeast Debt Service $4,388,000 $4,388,000 Total Operating $0 $0 $0 $0 $0 $0 $116,492 $6,113,700 $6,230,192 Capital ImProvements OIdtown Kern Pioneer $75,000 $75,000 Southeast $75,000 $75,000 Total Capital Improvements $0 ' $0 $0 $150,000 $0 $0 $0 $0 $150,000 Total BRDA $0 $0 $0 $150,000 $0 $0 $116,492 $6,113,700 $6,380,192 ADMINISTRATIVE REPORT MEETING DATE: June 14, 2000 AGENDA SECTION: Consent Calendar · ITEM: 8.i. TO: Honorable Mayor and City Council APPROVED FROM: John W. Stinson, Assistant City Manager DEPARTMENT HEAD DATE: June 2, 2000 CITY ATTORNEY ~--~'-~--'--- CITY MANAGER SUBJECT: Amendment No. 2 to Resolution No.101-99 approving and adopting the City of Bakersfield Operating and Capital Improvement Budgets for Fiscal Year 1999-00 to · incorporate previous budget actions approved by the City Council. RECOMMENDATION: Staff recommends adoption of resolution. BACKGROUND: On June 30, 1999, the City Council adopted Resolution No.101-99 approving and adopting the City of Bakersfield Operating and Capital Improvement Budget for the Fiscal Year 1999-00. From January 12, 2000 through June 14, 2000, Council has taken action to transfer and/or appropriate funds for specific services and as a result, the respective budgets must be amended to reflect these changes for the last six months of the fiscal year. The budget amendments from the June 28, 2000 Council agenda will be incorporated into the detailed listing and forwarded to the Council for approval at the June 28, 2000 meeting. The fiscal year 1999-00 Amended Budget is $238,560,910, with the Operating and Debt Service (which includes the-Community Development Block Grant) and the Bakersfield Redevelopment Agency Budget totaling $211,127,801, and the Capital Improvement Program totaling $ 27,433,109, A detailed listing of the items approved by Council action (Exhibit "A'), which amends the 1999-00 budgets, is attached. June 8, 2000 12:06PM S:~Darnell~admins\1999~Amend2 99-00.wpd RESOLUTION NO. AMENDMENT NO. 2 TO RESOLUTION NO. 101- 99 ADOPTING THE OPERATING AND CAPITAL IMPROVEMENT PROGRAM BUDGETS FOR THE CITY OF BAKERSFIELD, CALIFORNIA, FOR THE FISCAL YEAR 1999-00. WHEREAS, in accordance with the Charter of the City of Bakersfield and applicable ordinances, the City Council of said City amended Resolution No. 101-99 amending the Operating and Capital ImprOvement Program Budgets for the City of Bakersfield, California, for the fiscal year 1999-00 on January 12, 2000; and, WHEREAS, the City desires to make amendments thereto; NOW, THEREFORE, BE IT RESOLVED by the Council of the. City of Bakersfield as follows: 1. That the Operating and Capital Improvement Program Budgets for the City of Bakersfield, California, for the fiscal year 1999-00, as adopted by Resolution No. 101-99, are hereby further amended to reflect the applicable changes included in Exhibit 2. That said Budgets for said fisCal year 1999-00, so amended, shall be the Budgets For the City of Bakersfield, California, for said fiscal year 1999-00 as contemplated to be made by this Council. 3. That said Budgets for fiscal year 1999-00 shall total $237,616,219 with the Operating, CDDA and Debt Service (Which includes the Community Development Block Grant) Budget and transfers totaling $210,854,610, and the Capital Improvement Program totaling $26,761,609. 4. That the City Clerk shall certify to the adoptio..n of the resolution, and henceforth and hereafter the same shall be in full force and effect. .......... o0o .......... .., CITY RSFIELD. FY 1999-00 ADOPTED BUDGET Departmental Appropriations by Fund Budget Summary Operatin.q Budgets City of Bakersfield $13,123,684 $36,773,915 $19,159,903 $51,471,700 $9,088,648 $13,289,697 $9,146,503 $49,650,607 $201,704,657 Central District Develop. Agency $0 $0 $0 $0 $0 $0 $90,588 $5,608,000 $5,698,588 Total Operating $13,123,684 $36,773,915 $19,159,903 $51,471,700 $9,088,648 $131289,697 $9,237,091 $55,258,607 $207,403,245 Capital Improvements City of Bakersfield $1,143,300 $0 $342,110 $16,015,750 $2,640,000 $1,207,684 $0 $0 $20,748,844 Central District Develop. Agency $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Capital Improvements $1,143,300 $0 $342,110 $16,015,750 $2,0401000 $1,207,684 $0 $0 $20,748,844 · Total Appropriations $14,266,984 $36,773,915 $19,502,013 $67,487,450 $11,128,648 $14,497,381 $9,237,091 $55,258,607 $228,152,089 CITY OF BAKERSFIELD FY 1999-00 ADOPTED BUDGET Departmental Appropriations by Fund City of Bakersfield Operating Budget General Fund $7,400,732 $36,773,915 $19,159,903 $10,461:,365 $9,059,277 $5,743,202 $5,367,606 $93,966,000 Transient Lodging Taxes $4,230,420 $4,657,590 $8,888,010 Gas Tax · $3,079,708 $3,079,708 Traffic Safety $1,100,000 $1,100,000 Municipal Improvement Debt $386,417 $386,417 Public Financing Authority $13,000 $14,441,600 $14,454,600 Capital Outlay Fund $0 Arena Project Fund. $0 Transportation Development $2,084,736 $2,084,736 Agriculture Water $3,220,221 $1,134,500 $4,354,721 Domestic Water $5,868,427 $1,202,240 $7,070,667 Parking Lots/Structures $142,000 $142,000 Park Improvement Fund $727,850 $727,850 Refuse Collection $20,124,823 $243,890 $20,368,713 Aviation Fund $118,421 $118,421 Self Insurance $4,754,713 : $1,036,000 $5,790,713 Supplemental Law Enforce. $500,000 $500,000 Equipment Management $914,800 $11,125,740 $2,100,000 $14,140,540 Wastewater Treatment Plant ' $6,561,643 $7,861,000 $14,422,643 Community Dev. Block Grant $3,261,301 $336,417 $3,597,718 Assessment Districts $40,439 $6,470,761 $6,511,200 Total Operating $13,123,684 $36,773,915 $19,159,903 $51,471,700 $9,088,648 $13,289,697 $9,146,503 $49,650,607 $201,704,657 CITY !RSFIELD FY 1999-00 ADOPTED BUDGET Departmental Appropriations by Fund City of Bakersfield Capital Improvements Surfact Transportation (ISTEA) $3,566,117 $3,566,117 Transportation (TDA) $0 Gas Tax $3,101,583 $3,101,583 Park Improvement. ~ $308,949 $308,949 Captial Outlay Fund $1.143,300 $342,110 $376,750 $323,200 ~ $2,185,360 Arena Project Fund $0 Transportation Development $1,427,000 $1,427,000 Road and Bridge Bond Funds $0 Agriculture Water $100,000 $720,000 $820,000 Domestic Water $1.320,000 $1,320,000 Parking Lots/Structures $395,000 $395,000 Refuse Collection $154,000 $154,000 Aviation Fund $0 Amtrak Railway $0 Public Facilities ~ $0 Equipment Management $910,000 $910,000 Wastewater Treatment Plant $5,728,000 $5,728,000 Community Dev. Block Grant $652,300 $180,535 $832,835 Assessment Districts ~ $0 Total Capital Improvements $1,143,300 $0 $342,110 $16,015,750 $2,040,000 $1,207,684 $0 $0 $20,748,844 Total City of Bakersfield $14,266,984 $36,773,915 $19,502.013 $67,487,450 $1~1,128.648 $14.497,381 $9,146,503 $49,650,607 $222,453,501 CITY OF BAKERSFIELD FY 1999-00 ADOPTED BUDGET Departmental Appropriations by FUnd Central D/strict Development Agency Operatin_q Budget Operating . $90,588 $1,393.000 $1,483,588 Debt Service $4,215.000 $4,215.000 Total Operating $0 $0 $0 $0 $0! $0 $90,588 $5,608~000 $5,698,588 Capital Improvements Capital $0 Total Capital Improvements $0 $0 $0 $0 $0 $0 $0 $0 $0 Total CDDA $0 $0 $0 $0 $0 $0 $90,588 $5,608,000 $5,698,588 CITY OF BAKERSFIELD 1999-00 APPROPRIATION RECONCILIATION AS OF April 30, 2000 AGENDA # DATE ITEM TRANSFER OPERATING CAPITAL TOTAL Adopted Budget 18,803,217 1881600,028. 20,748,844 228,152,089 235 Encumbrances 4,064,188 18,138,964 22,203,152 668 Mgr Carryovers 10,038,500 4,029,606 .44,605,799 58,673,905 754 Con'ect Encumbrances (50,000) (50,000) 803 City Mgr Correction (9,000) (9,000) 1118 Correct Encumbrances (365,019) (365,019) 1443 Correct Carryovers 258,199 (258,199) 0 1459 Additional Carryovers 232,440 232,440 Beginning Budget 07101199 28,841,717 197,125,461 82.870,389 308,837,867 545 08/11199 81 49,248 49,248 546 08/11199 8m 25,000 25,000 547 08/11199 8u 60,000 60,000 564 07/21199 8m 21.000 21,000 565 07/21199 8q 14,910 14,910 566 07/21/99 8t 135,773 135,773 567 07/21199 8v 97,968 97,968 569 07121199 8ff 82,400 494,400 576,800 577 08/11/99 81 (49,248) (49,248) 659 07/21199 8ee 16,251 16,251 947 09108/99 8f 26,000 26,000 948 09/05/99 8m 150,000 150,000 1120 09/22/99 8v 1,825 1,825 1121 09122/99 8o 24,850 24,850 1142 09122/99 8k 25,000 25,000 1306 10/06199 8o 10,000 10,000 1518 07/21199 n/a 17,625 (17,625) 0 1525 10/20/99 8u 199,377 199,377 1528 10120/99 85 10,000 10,000 1677 11103/99 n/a 446,469 1,863,5:~1 2,310,000 1748 11103/99 8n 120,000 360,000 480,000 1749 11/03/99 8q 58,000 58,000 1750 11/03/99 8v 25,000 25,000 1898 11117199 8s 2,086,000 2,086,000 2303 12/15/99 8v 13,531 13.531 2304 12/15/99 8w 104,065 104,065 2305 12/1 5/99 8ff 95,565 95,565 2390 12/15/99 9a 186,175 186,175 2582 01112/00 8s 75.000 75,000 2583 01/12/00 8j 88,500 88,500 2584 01112/00 8p 10,000 (10,000) 20,000 20,000 2764 01/26100 8f 77,755 77,755 2767 01126100 12a 2,100,000 (2,100,000} 0 2769 01/26/00 8h 25,000 25,000 2770 01126100 8i 68,000 68,000 '2979 02/09100 8f 10,000 57,200 67,200 2987 02/09100 8q 1,100,000 1,100,000 3115 02/23/00 8z 1.500 1,500 3118 02/23/00 8x 20,800 20,800 3119 02/23/00 8y 121,000 100,000 221,000 3121 02/23/00 80 175,000 175,000 350,000 3122 02/23/00 8c 13,200 13,200 3420 03/15100 8d 9.850 9,850 3421 03/15/00 8p 238,000 238,000 3422 03/15/00 10d 0 3423 03/15/00 8c 61.940 61,940 3560 03/29100 8m 22.210 22,210 3561 03/29100 8o ' 50,000 50,000 3562 03129100 .8p 12.000 12,000 3563 03/29100 8v 15,000 15,000 3834 04112/00 8m 9.400 9,400 4008 04/26100 162.805 162,805 4052 05/02/00 (11.120) (11,120) 4131 05/02/00 13,000 13,000 4181 05/10/00 0 Budget Admendments 2.618,400 832.965 6.012.765 9.464,130 Revised Budget 31,460,117 197,958,426 88,883,154 318,301,697 Amended Budget 21,421,617 189.432.993 26,761.609 237,616,219 ADMINISTRATIVE REPORT I MEETING DATE: June 14, 2000 AGENDA SECTION: Consent Calendar ITEM: 8. j. TO: Honorable Mayor and City Council .~/ APPROVED FROM: Carroll Hayden, Human Resources Manager~' DEPARTMENT HEAD DATE: May 17, 2000 CITY ATTORNEY ///~ CITY MANAGER SUBJECT: 1) Amendment No.4 to Resolution No. 66-99 Approving Memorandum of Understanding for employees of the Blue and White Collar Units and adopting salary schedule and related benefits. 2) New Job Specification: Program Coordinator RECOMMENDATION: Staff recommends adoption of the resolution and approval of the new job specification, contingent upon Miscellaneous Civil Service Board approval. BACKGROUND: The Recreation and Parks. Department has a 'need for an entry level Program Coordinator position. This classification will conduct recreation programs. This is being presented to CoUncil first, in order to expedite the processing of this specification which is needed as soon as possible. Summary The job specification will be presented to the Miscellaneous Civil Service Board at their meeting on June 20, 2000. These new. positions will be funded through salary savings from temporary labor. S.E.I.U. concurs with the proposed recommendation'. Staff recommends approval of the new job specification. jm May 17, 2000, 3:27PM S:~ADMINRPT~ProgramCoordinator.wpd RESOLUTION NO. AMENDMENT NO. 4 TO RESOLUTION NO. 66-99 APPROVING MEMORANDUM OF UNDERSTANDING FOR EMPLOYEES OF THE BLUE AND WHITE COLLAR UNITS AND ADOPTING SALARY SCHEDULE AND RELATED BENEFITS. WHEREAS, Resolution No. 66-99 sets salaries 'and related benefits for employees of the Blue and White Collar Units. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Bakersfield that effective immediately, the Salary Schedule, a part of Resolution No. 66-99, is hereby amended as follows: 1. Resolution No. 66-99 is hereby amended by adding the following class title to the White Collar Unit: 26360 _A Program CoOrdinator 13.173 13.834 14.528 15.256 16.017 .... - ..... oOo .......... I HEREBY CERTIFY that the foregOing Resolution was passed and adopted by the Council of the City of Bakersfield at a regular meeting thereof~ held on , by the following vote: AYES: COUNCILMEMBER CARSON,DEMOND,MAGGARD,COUCH ROWLES,SULLIVAN,SALVAGG O NOES: COUNClLMEMBER ABSTAIN: COUNClLMEMBER ABSENT: COUNClLMEMBER CITY CLERK and EX OFFICIO CLERK of the Council of the City of Bakersfield APPROVED BOB PRICE MAYOR of the City of Bakersfield APPROVED aSto form: BART THILTGEN CITY ATTORNEY of the City of Bakersfield 05/17/00 Q:\Resolufion\B&W.Program Goord00.wpd 2 CITY OF BAKERSFIELD CLASS SPECIFICATION: 26360 UNIT: WHITE COLLAR EE04: PARAPROFESSIONALS Class Title: PROGRAM COORDINATOR Class Summary: Under direction, conducts recreation programs at a community center, park or other facility including adult and youth sports, after-school programs, aquatics, program recreation classes, special events and education programs; maintains records and promotes program activities; and performs other duties as required. Representative Duties: The following typical tasks and responsibilities are representative of this class. They are descriptive, not limiting. . Essentia~ Duties: · ~' Conducts recreational activities, sports, arts and crafts,, special events, contests, drama and other related activities at a park, community center, school or related facility; promotes community involvement through activities and programs; trains other staff; monitors associated staff; and performs physical activities such as setting up or taking down chairs and tables, carrying items weighing up to 50 pounds, preparing for special events and standing for long periods. Distinguishing Characteristics: This class is distinguished from Recreation Specialist in that the latter creates and leads recreation programs while the Program Coordinator conducts activities within those programs. Minimum Qualifications: Knowledge~ Skills and Abilities: Knowledge of recreation principles and methods Knowledge of recreatio,nal, social~ cultural needs of all age groups Knowledge of customer service principles Ability to conduct recreation activities Ability to communicate effectively both orally and in writing Ability to establish effective working relationships with individuals and groups Ability to project a positive image of the city Training and Experience: Graduation from high school or GED program and one (1) year of recreation experience or equivalent combination of training and experience which provides the capabilities to perform the described duties. Licenses, Certificates and Special Requirements: PossesSion of a valid California class "C" driver's license. Physical Conditions or Special Working Conditions: Standard indoor environment working Conditions, as well as working in various types of outdoor weather conditions. Must possess sufficient strength and stamina t° lift and carry objects weighing up to 50 pounds. Work may include nights, weekends and holidays ApProved by the Miscellaneous Civil Service Board: Approved by the City Council: S:LlOBSPECS\Pro~ramCoordinator.w~d Summary Comparisons FY 99 - 00 Adopted FY 2000 - 01 Proposed Operating $188,60 0,028 $197,065,719 Capital Im proveme nts $20,748,844 $29,118,891 Transfers $18,80 3,217 $22,40 8,393 Tota I $228,152,0 89 $248,593,003 ADMINISTRATIVE REPORT MEETING DATE: May 10, 2000 I AGENDA SECTION: New Business I ITEM' TO: Honorable Mayor and City Council APPROVED Christensen, Assistant City Manager DEPARTMENT HEAD ~ FROM: Alan DATE: May 2, 2000 CITY ATTORNEY _~'~ CITY MANAGER SUBJECT: Ice Skating Facility: 1) Transfer $50,000 Council Contingency to the Capital Improvement Budget in the Capital Outlay Fund for a feasibility study and cost estimating. 2) Appropriate and transfer $198,395, the balance of unanticipated ERAF reimbursement and $51,605 unanticipated motor vehicle in-lieu revenue for a total of $250,000 to the Capital Improvement Budget (Ice Rink Reserve) in the Capital Outlay Fund. RECOM,MENDATION: The Community Services Committee recommends approval. BACKGROUND: For the past several months, the Community Services Committee has considered a proposal by a group of citizens for the City to facilitate or build an ice skating facility. Staff researched a number of possible approaches to this issue, which included attracting private firms to build and operate a facility or having the City build and own a facility. We found that such a project faces significant challenges to make the project economically feasible. The estimated cost for a newly constructed facility for a single sheet of ice is $3.4 million, without land. That would provide a fairly simple building with locker rooms, gift shop, as well as the initial purchase of equipment, such as a Zamboni. In order to make the proposed ice facility "pencil out," the following contributions and assistance would be necessary: 1) donation or contribution of land, 2) significant cash donations, and 3) business loans and/or public debt issuance to finance a major portion of the construction cost of the facility. Such contributions or assistance would, in effect, reduce the capital cost of construction enough so that the debt of the facility could be paid for throUgh the facility's operations and allow the facility to be profitable. At the April 4th Community Services Committee meeting, Bolthouse Farms put up a $250,000 challenge match. In other words, ifthecommunity raises $250,000, Bolthouse will match it. Also, a number of parties May 2, 2000, 4:40PM S:~AC~Admin Rpts\lceSkatingFacility00may 10.wpd ADMINISTRATIVE REPORT Page 2 have come forward offering land for the facility, including some possibility of County property, Mesa Marin property, and, most recently, North Bakersfield Recreation and Park District Property adjacent to Centennial High School near River Lakes Ddve and Coffee Road. A downtown location is still a possibility as part of the proposed City Center Project. Given the matching funds and the land donation options, staff felt the project was ready to progress to the next step. On MaY Ist, the Community Services Committee considered a recommendation by staff to put forward a $250,000 match of its own. Staff recommended that the Council release $50,000 for preliminary work on economic feasibility, costs estimating, and generation of concept drawings for such a facility. If the full $500,000 is raised by.the private sector, the City should also put up a $200,000 match for a total of $250,000. If these pieces fall together - free land, plus $750,000, we would be getting close to economic feasibility for the project. It was made clear by staff that the City's proposed matching funds would be contingent upon the additional $250,000 of community donations not yet. realized. Staff has identified $250,000 of one-time revenue from an ERAF reimbursement ($198,395) and unanticipated motor vehicle in-lieu revenue ($51,605) that are available for this project. Since these funds are essentiallyone-time in nature, it would be preferable to use them for capital expenditures rather than ongoing operations. The Community Services Committee recommended the following to the full Council: 2) $250,000 of matching funds be reserved to assist in writing down the cost of a proposed ice skating facility. 2) $50,000 of Council Contingency be transferred to the Capital Outlay Fund to pay for a feasibility study and cost estimating work, which would begin as soon as possible. This would bring the recommended total of funds to $300,000. 3) City staff to provide assistance with fund-raising efforts through use of the Bakersfield Foundation, a non- profit foundation created to receive and account for cash donations for public purposes. They also requested that a link be set up on the City's website for interested parties to obtain information on the progress of the project and to facilitate further fund-raising efforts. May 2, 2000, 4:40PM S:~AC~dmin Rpts\lceSkatingFacilityOOmayl O.wpd BAKERSFIELD CITY MANAGER'S OFFICE MEMORANDUM April 27. 2000 TO: COMMUNITY SERVICES COMMITT,~ ~ FROM: ALAN TANDY, CITY MANAGER fi// 'SUBJECT: ICE RINK '"'" On Apdl 4"~, the community Services Committee held a public meeting on the need fo~ a new ice rink in Bakersfield. The meeting had excellent turn out. Several items were identified for investigation. A separate memo from Alan Christensen on those issues.ii' The meeting also generated follow up discussion on possible sites which mig _: ~.i'- ". '. without cost. While nothing is certain, we have had discussions on several siteS owned by the North Bakersfield Recreation and Parks District and one Owned by Marin. The best of those, from a business perspective, would seem-to be on the Bakersfield Recreation and Parks District site off Coffee Road, south of Hagemanl.I ~,:.~ ,.~ .. point where eventually the intersection of Rivedakes RanCh Boulevard will intersect The. North Bakersfield Recreation and Parks District has discussed the concept with' tl~eifi~. ~':?i~, i: Board and they, in concept, seem agreeable.,.,.. '~. ' .'~-. ':'~. Another concept that has arisen as a new possibility is at the proposed City Center site. - An original location that has been considered was next to the City Center at California, :~. between M and N streets. Under the revised concept, the ice facility would become part: of a large recreational complex on a pad within the City Center itself, due south of the" Centennial Garden on what is now, for the most part, a City parking lot. That expanded' concept would also include basketball, volleyball, a-fitness center and, through multi use of space, convertible areas for teen dances, convention space needs, etc. If this concept was pursued, the parking spaces lost would have to be replaced, either-by the City or the ... developer. Again, this is an exploratory concept at this point in time, not a certainty.." The other possibility for free land at the Metropark facility on North Chester is also "out there" and should be kept alive-as a possibility. It may be a competitive process to get that particular site. Community Services Committee April 27, 2000 Page 2 ;- Cash The April 4"~ meeting was also successful in generating some significant contribution offers. The Condors put up an offer that would include operating help. Bolthouse Farms put up a $250,000 challenge match.* la other words, if the community raises $250,000, Bolthouse will match it. Recommendation The potential of land availability, plus up to $500,000 in community contributions, is very significant. Staff is recommending that the City of Bakersfield Put forward a match of'its own. It'is recommended that the Council release up to $50,000 for preliminary work on economic feasibility, cost estimating and generation of concept drawings for such a facility.. If the full $500,000 is raised by the private sector, the City should also Put up a $200,000 match for a total of $250,000. A memo is enclosed .showing how this cOuld come one time monies currently in hand. This is reasonably commensurate with the amount the,.~.~ City paid for the skateboard park. It is also rare that $500,000 could be raised bY" private sector. That certainly justifies the City match. If .these pieces fall together - free land, plus $750,000, we would be getting close. economic feasibility of the project. ': * ·Note: An offer was made to fully fund the project. Funds for such a donation, hoWeVer are not yet in place. If ever they are, that, of course, would be pursued.' . Attachments BAKERSFIELD CITY MANAGER'S OFFICE MEMORANDUM April 26, 2000 TO: Alan Tandy, City Manager FROM: Alan Christensen, Assistant City Manager ~ SUBJECT: Issues Related to a Proposed Ice Skating Facility At the Community Services Committee meeting on April 4, 2000, several ideas a~n'd suggestions were offered during public statements on how to make a public ice skating: facility a reality in Bakersfield. The following are responses to those statements: .~. 1. CalWorks and Enterprise Zone Programs - Tanya AndreWs suggested that'the CalWorks program would provide an inexpensive source of labor to a private Operat0~?. of the proposed facility. She also suggested use of the enterprisezone to advantages to an operator. CalWorks employees could be available to an if they chose to use that program. Also, if the proposed facility were to be. IoCa{e~:!'!!:;;.~i:!! within the Enterprize Zone boundaries, then the tax benefits of that program cObld;, ~- also be available to the operator; again, if they chose to take advantage of therr 2. City_ of Lawndale Facility - Barbara Grimes stated that some years back'the.( Lawndale used a UDAG grant fund from the Dept. of Urban DeVelopment construct a recreation center. This grant no longer exists. Ms. Grimes sugg CDBG Section 108 funding might be used for such a facility. EDCD staff inl that to qualify for the Section 108 program, the project must create jobs for IoW and moderate income persons. The m~ximum amou'nt of funding that HUD will conSidb,~':' is $35,000 per Iow and moderate income job ~reated (full-time equivalent). . ::~: 3. .Boise, Idaho Ice Facility - There is a privately owned ice skating facility.that"is available to the public for hockey teams, figure skating, and general public skatir~g.' '. The Idaho Steelheads hockey team practices at the public skating facility. Recently they were very close to a deal with a Private operator for a second skating facility. That project never materialized. 4. Old Payless Building - Staff researched the feasibility of using the empty building located near the Valley Plaza Mall, formerly occupied by Payless, as a possible site for an ice skating facility. Unfortunately, the dimensions of the building are not large enough to serve an ice skating use. 5. Santa Clarita Ice Rink - A private ice skating/entertainment facility called "The Ice Station" is being constructed in the City of Valencia. It is a privately owned business that is projected to open in June 2000. Among other entertainment attractions, there Page 2 are three sheets of ice planned: 1) Olympic size, 2) NHL size, and 3) a smaller practice size. The City of Santa Clarita has not participated financially in the project. 6. Mr. Oliver Contribution - We have yet to confirm whether or not Mr. Oliver's offer of a significant contribution to the project will materialize. We have contacted Mr. Oliver by phone. He states that funds are forthcoming. 7. ~ - Several individuals have volunteered to help raise private donations. The City has offered to use the Bakersfield Foundation as conduit for collecting donations from individuals and organizations. The volunteers I have spoken to have responded in positively to using the Foundation. The next step will be for. a fundraising committee to have a kickoff meeting. Aisc, attached is a copy of a letter from Andre Radant representing Bolthouse Farms, which has offered a matching grant of $250,000 if the City builds the ice skating facility. ~ - 8. North Bakersfield Recreation and Parks Property - The NBRP Board is open to the " idea of pursuing a facility located on one of their undeveloped park sites. The concept is that they would lease us the needed Property, which is on their proposed park site seast of Centennial High School near Coffee Road. 'ii: '~':. ' .: .. '~. " &-20-2~0 2:&SPH FROM WM BOLTHOUSE FARMS 661.366 8072 W.VL BOLTHOUSE FARMS. 1NC. . ?200 .EAST BRUNDAGE LANE · BAKERSFI]EI..D, CA 93307-3009 661/366-7205 · FAX: §61/366-2834 Apd120, 2000 Mr. Alan Tandy City Manager 1501 Truxtun Ave. Bakersfield, CA 93301 Dear Alan: A municipally owned ice dnk would be a terrific addition to our community. The enthusiasm for ice based activities in Bakersfield has grown tremendously with the addition of the Centennial Garden and the opening of the Ice Palace on Rosedale Hwy. The closing of the Ice Palace has left a real hole in the recreational opportunities for many members of the community. In an effort to bring a municipally owned facility to our community, Wm. Bolthouse Farms, Inc. would like to offer $250,000.00 in the form of a matching gift to the city of Bakersfield, in an effort to contribute $500,000.00 of pdvate funds toward this project. The matching gift will match dollar-for-dollar alI designated gifts for this project and be paid in June 2001. The gift would, of course, be predicated on the city building an ice dnk in Bakersfield. Sincerely. Andre Radandt Executive Vice President Wm. Bolthouse Farms, Inc. 17- CiTY OF 8AKERSFIELL ZONING MAP 102-20 SEC. 20 T. 29m R. ~7~ c,,,-,,,~' I ' 0 LEG ENO lkl ....... Lt · m R-~ Ii) I ~CD. BAKERSFIELD :' CITY MANAGER'S OFFICE MEMORANDUM April 11, 2000 TO: Alan Tandy, City Manager FROM: John W. Stinso~nS~istant City Manager SUBJECT: Possible Matching Funds for Ice Rink This memo is in response to your inquiry regarding possible funding sources for a potential $250,000 city contribution to match the $250,000 offered by Bolthouse and other public · contributions for the proposed Ice Rink. As you will recall the City received a one-time ERAF payment from.the state subsequent to. the · adoption of the FY 1999-2000 budget. In addition we received greater than anticipated m0t0!~;:i' ' .:.,., vehicle license fee revenues, which were treated as a one time revenue due to the cyclical nature .::~ ,..', of this revenue source. The majority of these additional revenues and a reimbursement of booking fees from the state were appropriated to the Gas Tax Fund to eliminate the need for the $2.1 million loan for road repairs and improvements. There still remains approximately' ' ~ '~.:: $250,000 of these funds remaining from the ERAF and motor Vehicle revenues Which coUl~l be" ? - · used for the proposed ice rink project. Since these funds are essentially One-time in .na. tmie it' would be preferable to use them for capital projects rather than ongoing expenditures. Fory~)'-,ur ,./.'~ :i~i.......' information I have attached a spreadsheet prepared by the Finance Director which shows ~the., sources of these funds. S:~JO~TPROJ~Ice Rink Fundin&wpd City of Bakersfield One-Time Revenues 1999 .. Previous Revised Increase Description Estimate Estimate (Decrease) ERAF 88,190 87,204 (986) ERAF (Population) 313,133 512,514 199,381 Sub-Total 401,323 599,718 198,395 Booking Fees 714,431 714,431 - M.V. in Lieu 984,246 1,035,851 51,605 Total 2,100,000 2,350,000 250,000 S:\Darrin\Gregory\Notebk2.QPW 04i'10100 NgY-11-~.TH~ 14:~9 OITY NgNRGER'$' OFFIOE F~× NO, 681~2418~0 P, 03 BAKERSFIELD May 8, 2000 Mr. Marvin Dean $outhea~ Bakersl~eid Community Neighborhood Housing Development Group Post Office Box 2367 Bakersfield, CA 93302 Dear Mr. Dean, Once again, thank you for your 0roposal to address the housing needs in the newly deve~oi=ed Southeast Bakersfield Project Area. Our initial review of your proposal for inflll housing in the Southeast Bakersfield Project Area and your application for Community Housing Development Organizatlon (CHDO) statue has been completed. in order for us to complete our review of your thrill ho~lsing proposal we will need you to submit the following; 1. A complete $ year I~ro forma analysis for the 10roject that will include a projected operating budget, projected start, up budget, projected capital budget and cash flow projections. 2. Documentation giving the cornoarable prices of at least 5 homes in the Southeast Bakersfield Project area. 3. Clarification of exactly how much f'mancial assistance is being requested a~d ' ' what it will be used for. Clarify the purpose of the 3% Interest being c~arged on the $10,000 second mortgage, who will be receiving it, and how it is ooml~unded. 5. What interest rate will be Charged on the first mortgage and will it reflect the current market rate. 6. Additional information on the 8outheast Bakersfield HomeOuyer Program to clarify who operates the program, where does funding come from, and the companies and/or individuals that assist with the program. · City of Baker,~_eld - Economic: and Community Oevebpmenl: DePartment 515 Truxtun Avenue - Bakersfield · CalFomla 95301 (661) 32~3765 · Fax (661~ 328-1548, TDD (661) 324-3631 YIRY-11-O0 THU 14:59 CITY IIRNhGER'S OFFICE FRX NO, 6613241850 P, 04 7. A comprehensive executive summary that WIll outline all the parties fnvolvecl with the project, their roles, and all the funding sources that will be utilized. (Guidelines for the executive summary are included in the HOME application packet) 8, The two most current years financial statements on &he non-profit organic, at/on A. Phillip Randolph Community Development Corporation. In addition, the following information is being requested to complete our review of A. Phitltp Randolph Community Development Corporation's application for CHDO statu~: 1, A copy of the organizatiort's byqaws, 2. Provide resumes for each CHDO board meml3er. Indicate if th® boarM member is e Iowqncome representative and/or resident of a Iow-income area. 3. Documentation showing that the organi:~ation has a demonstrated capacity for carrying out activities assisted with HOME fund.~, as evidenceM by: * resumes and/or statements that desoribe the experience of key staff members who have successfully oompJeted projects similar to thoseto be a~tated with HOME funds, or , contract(s) ~ v'~nsultant firms or individuals who have housing exDeflence similar to projects to be assisted with HOME funds, to train appropriate key staff of the organization, 4. Documentation showing the organization has a history of serving the community whom housing ~o be assisted with HOME funds will be' used as evidenced by: a statement that documents at least one year of expeMenoe in serving the community. When this information has been submitted to our department we will then CO~11plete our n~view of your In1111 housing proposal end CHDO application_ tf you have any questions please contact me at 328-3765. 91ncerel¥, Community Development Coordinator CC: Jake Wager, Economic Development Director ~ == :~.~ J:,~,~v BATH OPTIONS PORCP ~,_ .a. ,_ '. &-'-"_~ ..... 7-2%''. "';'~:" ~ STREET .......... o TYPICAL SITE P~N t~ .-: EEEVATIONS ~' ~200 sq. Ft :: ...... ~_._ ~ . . The Sou[llea$[ Bakersfield Communi[y ('~/Y,,~r~ ,/(~/gZec~ Neighborhood Housing Development Group ~.,. ~,..~.,,,~, ,-~,, ~,~ ,~3-,, ........... ,,,,,,,~0~ ...... INFILL HOUSING DEVELOPMENT ' VISION HOMES Private Sector Group 1. To purchase 25 - 50 scattered site vacant lots within the Southeast Bakersfield Redevelopment Project Area. 2. To construct 25 - 50 new..~l-~ sq. ft., 3 bedroom 2 bath homes for first time homebuyers within the Southeast Bakersfield Redevelopment Project Area. 3. To locate and assist in the pre-qualification of first time homebuyers for home mortgages for the SBCNHDG newly constructed homes, working with banks, CRA programs, Fannie Mae and public agency financial partners. 4. To assist existing property owners with home improvement projects, remodeling and repair work in neighborhoods where SBCNHDG new housing is constructed. 5. To create employment opportunities in the communities where SBCNHDG new housing is constructed. Public Sector Partners: 1. Assist with code enforcement when required in neighborhoods where SBCNHDG new housing is constructed. 2. Assist with community policing and neighborhood watch in neighborhoods where SBCNHDG new housing is constructed. 3. Assist with community development programs in providing SBCNHDG neighborhood property owners with housing rehabilitation loans, handicap accessibility, Iow interest loans and grants for home improvements, remodeling and repair work and down payment assistance to first time homebuyers. 4. Assist SBCNHDG private developers'with incentives from city and or redevelopment agency, i.e. permit fee waivers, site acquisition assistance, on and off site project costs as needed. 5. SBCNHDG will coordinate with community organizations, agencies and churches for job training, employment and homeownership referral. Contact person: Marvin Dean Post Office Box 2367 Bakersfield, CA 93302 (661) 831-5067 Southeast Bakersfield Business and Property Owners Association PROJECT AREA I 23RD ~ -- TRUXTUN AVE - ~ - O 16TH. ~a ST - EURE~ 14TH ST STRE~ VIRGINIA INOAGE GATEWAY DRIVE '! ~'.¢,.~ ~:. MING CASA LOMA / ORIVE WILSON ROAD ,' / WHITE LANE -- PACHECO ROAO -- 0 % ¼ s:v ,dy ar e aB e pmj~Llma p.cdr ,,: i Bakersfield Cenlral Oishicl Development Agency '".-~.u.-~:-,~... [/~ ~'~ ~ SOUTH~ST BAKERSFIELD REDEVELOPMENT PROJECT VISION HOMES DEVELOPMENT SELL PRICE SUMMARY Total Home Valuation $80,716 Based on building fee cost factor. Residence Sq. Ft. - 1200 x $60.34 Garage Sq. Ft. - 400 x $20.77. Also cost of other similar home size and feature. Southeast Project Area Infill Housing Subsidy - $15,000 Development subsidy will help keep homes affordable and promote new Infill housing in Southeast Bakersfield redevelopment project area. Homebuyer's Total Cost $65,716 Homebuyer Mortgage Assistance - $10,000 Southeast homebuyer mortgage assistance project sponsor APRCDC 501 (C) 3 Non-profit will provide $10,000 silent 2~a TD with no payment at 3% interest. Due only upon resells, rifle transfer or change to rental. Buyer Purchase Mortgage Price .$55,716 $55,716.00 Buyers Purchase Mortgage Price 1,671.48 3% down + closing cost $54,044.52 1st TD new bank loan 97%, 30 yrs. Mortgage * NOTE: Homebuyer will only have to qualify for $55,716. * City down payment assistance program will pay up to $3500.00 of closing cost. SOUTHEAST BAKERSFIELD INFILL HOUSING DEVELOPMENT DEVELOPMENT COST BREAKDOWN .............CONTRACT PAID TOi BAL. OFDISBURSE i AMOUNT DATE LOT PREPARATION EXPENSE ! ' . SOILS REPORT ~ 450.00 i J .............. SITE PREPARATION I $1,500.00 -' SUB-TOTAL? $1 ,950.00 ..... iEEES · _ ~ ................................ & ADMINISTRATION ................................... BUILDING PERMIT & SCHOOL FEES $2,858.72 SEWER PERMIT FEE . $2,_0_0~.:0_0_ sTREET CUT INSPECTION FEE .... $ 180.00 TRANSPORTATION IMPACT FEE $2,197.00 -~,6URSE OF CONSTRUCTION INS-U-R-~I~-E- .... ~---3-~-~0-0- ................. i .............................. ARCHITECTURAL FEE i ~,Sb-dTb¥ ......... =:-:: ~ E-N E RA-E- ~-8 ~-D~fi-6-N s~ CONTINGENCY/RESERVE ............ -$~ 7~00]00 [ ~,-~-D ~ --G-u M--p-/:.i.-Ei~ F~-~ ~- ~/E R .................... ;-.$ ---~-~-~;-0-0-! ........... : ...................................... PG & E SERVICE $ 100.00 i i ~,T E P~ -s-E-~ vic~ ..................................... $ - --,~-~)-~-0- ~- ................... ~5 N S-Y ~ 0 -C~ Yi-6-N-'i-~-A-§h-B iN../'D E B~-I~- .......... -$-- ~-~)'~). o 0 ~E-MP CONSTRUCTION STOi~-7,G-~-cT~-A~i;-,~'--2~-oTc~'0-' ;~ ....................... ....................................... S O~Tf~'i'~ f -~ ~';~-§ ~'.-i)-o--i- ' 7 ' ~ ...................... ~ ............ A 'S-ALE C~:l' .............. $ 500~00''~ ...... , : ...... OVERH-E~,I::) ..... :*6.5' LOST OF'-!~'INANCE COST OF LAND $7,500.00 PROFIT '10 HARD COST INDIRECT COST PERMITS INTEREST RESERVE TOTALLOAN *% of Hard Cost ~ SOUTHEAST BAKERSFIELD COMMUNITY .. NEIGHBORHOOD HOUSING DEVELOPMENT GROUP INFILL HOUSING DEVELOPMENT PROJECT SOUTHEAST BAKERSFIELD REDEVELOPMENT PROJECT AREA February 14, 2000 To: George Gonzales, Community Development Coordinator From: Marvin Dean, Representative Re: Request for Assistance from the City of Bakersfield Assistance is hereby requested for the following developer incentives: (1) Assist With site acquisition, estimated cost between $4,500 - $7,500 per lot (2) Assist with building permit and other fee waivers or cost estimated at $3,500 - $5,000 per lot. -~. (3) Assist with on and off site project costs, estimated at $3,000 - $7,500 (Curb and gutter, sidewalks and sewer tie-ins etc.). (4) Assist with housing rehabilitation, handicap accessibility grants and other Iow interest loans for marketing to existing property owners for home improvement work in areas where we construct new homes. (5) Assist and coordinate with code enforcement when required in neighborhoods where we construct new homes. (6) Assist and coordinate with community policing and neighborhood watch in neighborhoods where we construct new homes. (7) Assist our homebuyers with First-Time Homebuyer down Payment Assistance Program. (8) Assist us with any other financing or resources to assist with new single family construction or rehabilitated housing in Southeast Bakersfield redevelopment project area. NOTE: We are requesting a conditional commitment for assistance from the City of Bakersfield. This will allow us to structure the final project development financing. VISION HOMES FINANICAL INSTITUTION Partners Interested in Participating in Project: (1) Washington Mutual Bank (2) Bank of America (3) Union Bank of California (4) Bank of Stockdale (5) Norwest Finanical/Wells Fargo Bank * City of Bakersfield Homebuyers Assistance Programs NOTE: Fannie Mae is very interested to participate in the Southeast Bakersfield Community Neighborhood Housing Development Group Infill Housing Project. They would like to work with Financial Institutes and local Government Agencies. See attached Fannie Mae Bakersfield Redevelopment initiatives partnership opportunities. * Financial institution information attached FanmeMae' s. Vice President - ~ Housirlg and ~' Development 135 North Los Robles Avenue Pasadena, CA 91101-1707 ~-/ 626 396 5494 April 19, 2000 626 396 4639 (fa:O Marvin Dean Chairperson Southeast Bakersfield Community Neighborhood Housing Development Group Post Office Box 2367 Bakersfield, CA 93302 Dear Mr. Dean: Thank you for inviting Fannie Mae to participate in the Southeast Bakersfield Public-Private Partnering Working Group Meeting and to learn more about the Infill Housing Development Project for the Southeast Bakersfield Redevelopment Project area. At the meeting, you asked your partners to step forward and commit to how they can assist in your efforts, and I am pleased to outline for you below how Fannie Mae can Support these efforts through our staff resources, our product offerings, and our lender'partners. People .. Fannie Mae's Housing and Community Development Division is dedicated to making a tangible, visible difference in communities such as Southeast Bakersfield. We have seven offices and thirty people dedicated to'these efforts inthe Western United States alone, and an additional one hundred in Washington, D.C. As we have discussed, our activities in the West are coordinated from our Western Regional Office in Pasadena. Besides myself, people dedicated making our efforts a success include Rosemarie Sabatino, our Director of Housing and Community Development, and Senior Affordable Housing Business Manager, Sandra Adams. We are all available to offer technical assistance and guidance on the products that can best meet Bakersfield's needs. You can reach Sandy directly at (626) 396-5149. Attached, you will find biographical information on us. Products As the largest source of mortgage finance in the country, Fannie lVlae is committed to providing Bakersfield with every product and resource available. We offer a comprehensive array of products through our lender partners. I would like to share a few of the products with you. Construction-to-Permanent To address your desire for new construction on undeveloped lots for in-~l housing, we offer a construction-permanent mortgage loan. By combining construction and permanent financing in one loan, we reduce loan origination fees as well as construction period interest costs. Our construction-to-permanent loan reduces the costs of construction for a developer, thereby reducing the costs to the ultimate home buyer. The Mortgages may be sold to Fannie Mae immediately after the closing of the loan. ..-:.. :,_~,-. ;H~larvin Dean Al~il 19, 2000 Page 2 HomeStyle The HomeStyle product can help rehabilitate housing in the Bakersfield neighborhood. Our HomeStyle first mortgage products permit owner-occupants to finance the cost of rehabilitation along with a home purchase or refinance in a single, low-cost loan. In addition, we offer a variation that permits use by a nonprofit or investor, with sale to a homebuyer after the rehabilitation is completed, so that their expertise is used rather than a new homeowner's having to manage, the rehabilitation. Community Seconds Transactions Fannie Mae's Iow down payment first mortgages may be combined with a down payment assistance program. These second mortgages are typically provided by a federal, state, or local government agency, or nonprofit organization are earmarked for homeownership programs. Flex 9 7 The Flexible 97 mortgage is a first conventional loan which does not require that the downpayment come from the borrower's own funds. By combining a Flex 97 mortgage with a Community Seconds, borrowers with a record of paying their bills on time but with limited savings for a down payment can become homeowners without a down payment from their own funds. Down Payment Assistance Investment Notes (DPAINs) To stretch the dollars you have to provide down payment and closing cost assistance, we can buy a note for downpayment assistance from you. By posting 20% collateral for this note, we can help Bakersfield generate five times as much downpayment assistance as you may be currently offering. For example, if you are now offering $500,000 in down payment assistance grants, you would be able to offer the same amount of assistance by pledging $100,000, thereby freeing up an additional $400,000 for other community development programs. Our estimate indicates that we could leverage such a $100,000 pledge into approximately $15 million of first mortgages, based on 3% assistance per borrower. I have enclosed more details on this product in the notebook. American Communities Fund Leveraging community development investment is a priority that we share. As indicated in your Infill Housing Development Proposal, your goal is to purchase 25-50 scattered site vacant lots and construct 1100 sq. ft., 3 bedroom 2 bath homes for first time homebuyers: Through the American Communities Fund (ACF), we can provide a line of credit to The City of Bakersfield or its Redevelopment Agency to facilitate the purchase, and re-sale of these homes to owner- occupants. Credit Enhancement We are an active purchaser of Mortgage Revenue Bonds. We have been able to generate the lowest-cost financing for a locality's housing priorities by buying bonds whose mortgages are set-aside for a specific purpose or geographic location. For example, Fannie Mae worked with the Michigan Housing Finance Agency to purchase bonds specifically targeted for t."-"c:: ,,,:/-~..,~i~m Dean ?~'~"i~?~'pril 19, 2000 · - ..... Page 3 homeownership programs in the City of Detroit. Please see the overview of public finance products in the enclosed notebook. Publications/Resources Fannie Mae has several publications that can assist potential homebuyers understand the mortgage process. Booklets such as A Guide to Homeownership and Knowing and Understanding Your Credit are available to assist individuals to become familiar with the path to homeownership. Fannie Mae can also provide training to customers on our Community Lending prOducts and initiatives. HomePath Web Site HomePath.com is a consumer Web site on the Intemet addressing three key stages of home buying and mortgage finance: starting, purchasing, and refinancing· By visiting this web site, consumers can use an on-line calculator to figure how much a mortgage payment they can afford, do various "what if" financial scenarios, hypedink to lenders and home-buyer education providers, and get information on various types of mortgages as well as how to refinance a home. HomePath Services The HomePath consumer hotline (1-800-7FANNIE) was established to link anyone who needs assistance in preparing for homeownership with local nonprofit organizations trained to help. Partners Fannie Mae works with a wide variety of partners to help address local affordable housing needs. As we mentioned at the meeting, we would like to work with you to bring together lenders who offer some of the products that will be important to your effort: Fannie Mae's Flexible 97 mortgage, Construction-to-Perm loans, and our Community Lending Programs that would support your efforts. We believe that Fannie Mae's combination of people, products, and partners can greatly contribute to the success of your efforts on the Southeast Infill Housing Development Project. We look forward to working with you on the specific items that match your needs and resources, and to making a tangible difference in the City of Bakersfield. 'iT ~an d~~~. Enclosure cc: Rosemarie Sabatino Sandra Adams , 2:Tm0n Progrm . Mac have ~en ~der press~e from ~AT~NTIC CI~,'N.j.-~e U.S. regulators to do more to'help Mae ,the largest U.S. pro~der of lower-~come~oup~buyhomes. hem9 financing, pledged Wednes- Officials' said the agency would '.day to buy, ~er 10 ye~s, $2 trillion spur lending by offering flexible. in ~ortgages t0 lower-income mortgage 1o~ produc~ ~d ~oups to ~e it easier for 18 ~- pmnershps m~ fo~daaons, ~on f~es ~.o~ a home/ governments, developers and com-?~ The agency 'said'the' p~ogram m~ty-based lenders. .~..~, called the "Americ~ Dream Com- The pl~ is the s~ond such pr~ mitment," ~11 target minorities, ~ to ~ unveiled by ~e agency~:~ young families, new immigrants, ~ r~ent ye~s.'h 1994 it ~ocated f~lies headed by women ~d other $1 t~llion over seven years to help~.2 population segments lagging in 10 million families in.undersexed homeo~ers~p. ~p~a~on segmen~ buy homes. · F~e Mae ~d i~ g~fl.is to ex- F~e Mae ~d ~ed~e Mac o~.~ tend a h~d to the m~y Ame~c~s crate ~der a govement cheer to ~who have not benefited from the expand homeownership, buying . c~ent ~onomic e~sion, includ- mortgages from banks and other lng residents of economically de- lenders ~d packa~ng them ~to s~ ~ssed ~b~ ~d ~fl ~eas. c~ties for ~e to ~vestors. I'~Y il. 'IBO I~P:~IF'M O,S~fP HSG SR'v'CS (CHS) p. lx1 Comprehensive Housin Semites, Inc. Fax 714,847 · 3070 E~I: cmph~g~rvc~t.com May 11~ 2000 Mr. Marvin Dearl A. Phillip Randolph Community Development Corporation P.O, Box 1062 Bakersfield, CA 93302 Dear Sir: Thie letter is a follow-up to our recent conversation regarding your organization's proposed in-fill affordable housing project located within the City of Bakersfield, It is my under~tanding that your agency h~ applied for funding from the City for the purpose of paying land acquisition (hard and soft co~ts) and environmental review costs ~sociated with the development of single family housins units. Thi~ is an eligible use of the federal HOME Program funds. Our firm h~s assisted several communities in the development of affordable housing units utilizing HOME Program funds. We are available to provide support to your agency, as needed, to assist you tn ~guring compliance with ~il of federal regulations concerning eligibility of the buyers, maximum value, etc. The stgtT of Cit$ is able to complete specific ~sstgned tasks at a rate of $75.00 per hour. We look forward to working with you to meet your organization'e affordable housing, goals, With Regards, Consultant 8840 Warner Avenue · Suite 203. Fountain Vatley, CA. 92708 COMMUNITY DEVELOPMENT PROGRAM DEPARTMENT C.D. Program Department BILL MUNGARY Public Services Building Director 2700 M Street, Suite 250 Bakersfield, California 93301 Telephone (805) 861-2041 FAX 325-2825 TDD 321-0524 ~' December 6, 1993 Mr. Marvin Dean, President A. Phillip Randolph Community Development Corporation 1313 California Avenue Bakersfield, California 93304 RE: Qualification as a CHDO Dear Mr. Dean: Thank you for the additional information which you submitted on December 3, 1993, which was in response to my October 25 letter to you and the additional conversations you have had with Bill Mungary and me. With that information you have cleared up the remaining concerns cited in my letter. In particular, with respect to the Financial Accountability Standards you supplied a certification and additional information. After review of that documentation Henry Gutierrez spoke with Mr. Sack of your CPA firm Mickey, Casanova & Sack. As a result of that conversation Mr. Sack faxed us a certification that does meet the required standard. Mr. Sack will mail the original to us. Regarding the other requirement, Demonstrated Capacity, you have supplied us with a document which describes the capacity of Comprehensive Housing Services, Inc. and a copy of a !etter from that firm which indicates that they have been retained by your organization. It appears that firm is qualified under the HOME Program regulations with respect to demonstrating that you and your organization have the capacity to carry out a project. There appears to be no reason A. Phillip Randolph Community Development Corporation would not be qualified as a Community Housing Development Organization under the HOME Program regulations. Please call if you have questions. Very truly yours, MAS:ayb BAKERSFIELD October 28, 1993 o Marvin Dean, President A. Phillip Randolph Community Development Corporation 1313 California Ave. Bakersfield, CA. 93304 RE: Community Housing Development Organization (CHDO) Dear Mr. Dean, We have received a letter from Comprehensive Housing Services, Inc. (CHS) dated August 9, 1993 (copy attached) in support of the A. Phillip Randolf Community Development Corporation's (APRCDC) qualification as a (2HDO. We concur with the CHS that APRCDC does meet the minimum criteria of a CHDO, as defined by the U.S. Department of Housing and Urban Development. As a reciPient of HOME program funds, the City is charged with the responsibility of maximizing the supply of decent affordable housing for the low and very low income segment of our community. In order to accomplish this goal, the City, at its sole discretion, selects CHDO's to carry out eligible HOME projects. While an applicant must meet minimum requirements to be designated a CHDO, the emphasis is placed on the following: 1. The proposed project. 2. The organizational, development, and management abilities of the applicant. For our records, please provide detailed information on thc two previously completed housing projects developed and impiemented by the APRCDC. This infon'nation should include; budgets, locations, construction and a short narrative of the clients served. City of Bakersfield · Fconomic and Community Development Department 515 Truxtun Avenue ° Ba~<ersfie[d · California 93301 (805) 326-3765 · Fax (805) 328-1548 ,, TDD (805) 324-3631 :~r.M~in Dean October 28, 1993 Page 2 We welcome project proposals for future CHDO HOME allocations. We encourage you to call with any questions you may have relating to this matter, should you have any proposals you would like to have considered under the HOME program. Sincerely, Community Dkv. dlopment Coordinator enclosure dR:hotel CHDO MEETING DATE: May 10, 2000 AGENDA SECTION: Consent Calendar ITEM: $. d. TO: Mayor and City Council Members APPROVED FROM: Jake Wager, Economic Development Director DEPARTMENT HEAD ~ DATE: April 28, 2000 CITY ATTORNEY CITY MANAGER SUBJECT: Resolution of the City of Bakersfield to contribute $25,000 to the Bakersfield Senior Center and Retirement Housing Foundation application for 80 senior housing units proposed at 640 4th Street. (WARDS 1) RECOMMENDATION: Staff recommends adoption. BACKGROUND: At the April 12, 2000 City Council meeting, David Strong, Board Member of the Bakersfield Senior Center (BSC) requested financial assistance from the City of Bakersfield to aid efforts to construct an eighty unit senior housing project located adjacent to their facility located at 530 4th Street. Project is located in the Southeast Bakersfield Redevelopment Project Area. This item was referred to the April 19, 2000 Budget and Finance Committee meeting at which staff was directed to work with BSC and their co-sponsor Retirement Housing Foundation (RHF) to develop financial sources that the City could commit to provide the leverage to their Section 202 application for direct HUD assistance to construct this project. The estimated construction cost of BSC - 80 senior unit project is $6.6 million. Last year., BSC submitted a similar application for this project directly to HUD, however their grant application was not approved. HUD identified the lack of local government financial contributions as one of the reasons that BSC's application was denied. BSC had not requested City assistance for their original application. Staff has met with representatives of both BSC and RHF and that in order to meet their May 17, 2000 deadline for submission directly to HUD, it is recommended by staff that the City commit $25,000 to their prdject. The anticipated HUD award date to select the Section 202 projects for this funding round is December 2000. According to the co-sponsor, the City's contribution to this project would not be needed until December 2001. This action will only commit the City's financi.al assistance toward the senior housing project. The most appropriate funding source will be determined at a later date by Staff and will be returned for formal Council action. DIk:S:Wdmins\housing setaside reso city council,wpd May 3, 2000, 11:25AM :, ,,DMINISTRATIVE REPORT '- ~"-, '~ Page 2 In addition, staff will also assist BSC and RHF to secure additional savings for their proposed project, those would include: Traffic Impact fee rebate; school fee waiver, and sewer connection fees reductions. The estimated traffic impact fee reduction for a Iow-income project of 25% will equal $4,180. In addition, the traffic impact fees will be further reduced by $3,924 because of the existing structures located on the proposed housing site. Total project savings from the City from the traffic impact waiver is $8,104. The sewer connection fee required because of the construction of the 80 senior units, estimated at $106,400, will be reduced $3,610 for credit for the existing building site as well. The school fee waiver and County gate fee waiver have been requested however, confirmation has yet to be received and thus the amount is not known at this time. DIk:S:Wdmins\housing setaside reso city council.wpd May 3, 2000, 11:25AM ADMINISTRATIVE REPORT MEETING DATE: April 26, 2000 AGENDA SECTION: Consent Calendar ITEM: 8. u. TO: Honorable Mayor and City Council APPROVED FROM: Raul Rojas, Public Works Director DEPARTMENT HEAD ~-~;~'~',,~-. / DATE: April 19, 2000 CIT~ ATTORNEY CITY MANAGER SUBJECT: Audit Reports: 1. Acceptance of Independent Auditors' Report on Compliance with State Local Transportation Partnership Program. 2. Acceptance of Independent Auditors' Report on Compliance with Contractual Requirements relative to the Bakersfield Subregional Wastewater Management Plan. 3. Acceptance of 1998-99 Transportation Development Act Funds Financial Statement. RECOMMENDATION: Staff recommends acceptance of audit reports. BACKGROUND: The above three audit reports were referred to the Budget and Finance Committee for review and recommendation. The Committee accepted the three audit reports at its Special Meeting of April 19, 2000. Background information for each audit report is as follows: 1. Program guidelines for the State and Local Transportation Partnership Program (SLTPP) states final audits are required for all SLTPP projects with a state share of over $300,000. Two projects are subject to this final audit: · Panama Lane at State Route 99 overcrossing project · Coffee Road overcrossing project ~ The Compliance Report, issued by the outside auditors, indicates that the City complied, in all material respects, with the program's guidelines. PW-GL:mrp April 19, 2000, 8:53 AM G:~GRO U PDAT~ADMINRP'F~.000~.pri126~Audit Reports_3.wpd , ADMINISTRATIVE REPORT Page 2 2. Contract requirements contained in City of Bakersfield Agreement 76-153 as amended by Agreements 76-153(4), 77-44, 85-197 and 92-106 apply to operation of the Bakersfield Subregional Wastewater Management Plan. The City's compliance with contract requirements is audited on an annual basis. The current Compliance Report, issued by the outside auditors, indicates that the City complied, in all material respects, with the program's guidelines. 3. In compliance with the Kern Council of Governments Rules and Regulations, the California Public Utilities Code section 99245, andthe California Code of Regulations section 6664, the attached financial statements for the Transportation Development Act Funds were prepared for the fiscal year ending June 30, 1999. The financial statement summarizes fiscal activity for the Streets and Roads Fund, and the Bikeway and Pedestrian Fund. The accuracy and the fairness of the presentation is the responsibility of the City. · The audit firm of Brown Armstrong Randall and Reyes has issued an unqualified opinion. .. other reports were issued by the accounting firm in regards to the above audit reports. PW-GL:mrp April 19, 2000, 8:53 AM G:~GROUP DAT~ADMIN RP'r~2000V~ori126~Audit Reports_3.wpd RANDALL'REYEs pAULbEN& MCCow~..::' ;.' :i · cERIIFIED PUBLIC ACCOUNTANTS,.:. ~::~' c~' :' ....... ..... '.; .. : :.~ - ..... . ,: o om .e: C. Bro~vn, CP.A ::~on H..&rmstrong, CP.A INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH · .. ?. R~ndall, CP.A, .ABL' STATE LOGAL T~NSPORTATION PARTNERSHIP PROO~M ~m:n P. Reves CP.& ...:..::e:~' ~. Paulden, CRA · '~:,<..~.~,~cow~,C~.~ ~ 0 ~ I ~[ ~ ~r. R~ul ~. Pu~lJo ~o~s Dire~or ~dma Rutherford-HilLCPA City of Bakemfield FEB [ 1 EQOQ .z¥en ~ Starbuck, CPA 1501 TmMun Avenue .i~een K~ter, CPA Bakemfield, California 93301 PUBLIC WORKS DEPARTMENT .vnn R. Krausse, CPA -~cvL.~X~lters, CP.~ We have audRed the City of Bakemfield's Public Wo~s Depa~ment (CRy) ~mpliance with the following requirements, which are identified in the instm~ions of the State of .r;ri5 Nt. Tnornburgh, CP.A California Depa~ment of Transpo~ation. ~cqueline L. Anton, CP.& · The reimbumement claim submRted to the State of California Depa~ment of cP.~ Transpo~ation for the re~nstm~ion and widening proje~ ~roje~ Number cP.~ SB97-5109 (005)) and bridge widening proje~ ~roje~ Number SB98-5109 ~ua~e v. 5a,,'ye~, c~.~ (001)) are supposed by payment vouchem and ~nceled checks. ?r~cH. Xin, CP.& · The charges for the va~ous ~tegoHes for eligible costs incurred by the City are fully supposed. · ineligible costs were not claimed as reimbumable on the proje~. · Lo~l matching funds are from an approved source. Such requirements are appli~ble to the City's reimbumement claim to the State Lo~l Transpoaation Pa~nemhip Program (Program). The management of the City is responsible for the CRy's compliance with those requirements. Our responsibilRy is to express an opinion on compliance wRh those requirements based on our audit. We conduced our audit in a~ordance with generally accepted auditing standards and Government AudRing Standards i~ued by ~e Comptroller General of the UnRed States, and the instm~ions of the State of California Depa~ment of Transpo~ation. Those standards and instructions require the we plan and pedo~ the audR to obtain reasonable assurance about whether the final Repo~ of ~penditures and Ce~ification is free of material noncompliance with the requirements refe~ed to above. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements. We believe that our audit provides a reasonable basis for our oNnion. M[MI~[R Ot SIC Practice Section of the American Institute o[ Certified Public Accountants The results of our audit procedures did not disclose any matedal or immaterial instances of noncompliance with the requirements referred to above. In our opinion, the City complied, in all matedal respects, with the requirements referred to in the first paragraph of this report that are applicable to its reimbursement claim under the program as of January 25, 2000. This report is intended for the information of the City and the State of California Department of Transportation. This restriction is not intended to limit the distribution of this report, which is a matter of public record. BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN ACCOUNTANCY CORPORATION Bakersfield, California January 28, 2000 BROWN ARMSTRONG. RANDALL REYES PAULDEN' & M~CCO~N.,;.... -: 4100 ltu~n;",{veL.~,, ~" ffRIIFID PUBLIC ACCOUNTAI~B ~kersf;~,"t.A' .~ 8053N.4997 . e-moil: ~orrinlo~[~orrcpO.com ': ~ .:5.'-~:m:tr,,r< Z?.~. 2.~",~. ' · '.::.:'.,' ?.'.;:ire."-.'27-'. TO the Technical Advisory Committee ,,..,,' ~o,~.?.. c:'-. of the Bakersfield Subregional Wastewater bfanagement Plan, the City of Bakersfield, ,::?.,. ~=th~,or~-?.::: c~.~ California, the Kern Sanitation Authority, ~:~..~.,. x. s,~r~ck, c:..:, and the East Niles Community Services District · ..-..er ,,,e,.e,. CPA · .r.- .2 krau>~e. CP.-'. We have applied the procedures enumerated below to determine the City of ,-.-..:..' x.,~t~.,.,.c?.:. Bakersfield's compliance with certain provisions of contractual requirements as :--.:: >.~ r,~,,=,~=.-:~ :7.~ specified in City of Bakersfield A~eement 76-153, as amended by Agreements 76- ,::.;.~::.-.~L..~.~,.,,,-.C.'.-'. 153(4), 77-44, 85-197, and 92-106, regarding the Bakersfield Subregional · ,.?.'4 .&naer:on. CT.:.Wastewater Management Plan. These procedures, which were agreed to by the : ::._.. Technical Ad,Asory Committee, were performed solely to assi~ you in meeting the ,,,,.,.~.: c:-'.' requirements of City of Bakersfield Agreement 76-153, as amended by Agreements -:::~ ~: x:.-.., cp.~ 76-153 (4), 77-44, 85-197, and 92-106. This report is intended for the information of the Technical Advisory Commiuee of the Bakersfield Subregional Wastewater bianagement Plan, management, appropriate regulatory agencies, and the City Co,,mcil of the City, of Bakersfield, California. This restriction is not intended to limit the distribution of this report, which is a matter of public record. We reviewed and tested the City o¢ Bakersfield's compliance with certain provisions of contractual requirements as specified in City of Bakersfield Agreement 76-153, as amended by Agreements 76-153(4), 77-44, 85-197, and 92-106. These procedures resulted in no current year finding and recommendation. Status of Prior Year Finding with Current Year Status Prior Year Finding - A~eement Number 76-153, Section 12 - Estimation and Payment of Cos-ts The original agreement states that by March 1 a tentative capital-related and operations and maintenance budget must be submitted to the Techn/cal Advisory Committee and each User Agency. The City Council of the City of Bakersfield must consider the budget at a public meeting by April. A budget must be adopted and the User Agencies notified of the budget and the allocated costs thereofby b, tay 15. The budget for the year ended June 30, 1997 was not formally reviewed by the Technical Advisory Committee by March 1, and the budget was not adopted by May 15. Agreement 76-153(4) dated May 27, 1997 was approved during the fiscal year and in part amends Agreement 76-153 regarding due dates for the submitted and approved budget. Agreement 76-153(4) calls for the tentative budget to be submitted to the Technical Advisory Committee on or before March 1, and specifies adoption of the budget by the Bakersfield City Council no later than July 1. It was noted that the Fiscal Year 1998-99 tentative budget was reviewed the Technical Advisory Committee during their meeting on March 4, 1998, three days after the established deadline of March 1, 1998. Recommendation We recommend compliance with the budget submission and approval dates as specified in A_m'eernent 76-153(4): Response In the future, the Technical Advisory Committee will meet each year on the last Wednesday of February to review the tentative budget. Current Year Status The recommendation has been implemented. These agreed-upon procedures are substantially less in scope than an audit, the objective of which is the expression of an opinion on the City of Bakersfield's compliance with certain provisions of contractual requirements as specified in City of Bakersfield Agreement 76-153, as amended by Agreements 76-153(4), 7744, 85-197, and 92-106. Accordin~y, we do not express such an opinion. Based on the application o£the procedures referred to above, nothing came to our attention that caused us to believe that the City of Bakersfield had not complied with certain provisions of contractual requirements as specified in City of Bakersfield Agreement '/6-153, as amended by Agreements '/6-153 (4), '/-/44, g 5-19-/, and 92-106. Had we performed additional procedures or had we made an audit of the City of Bakersfield's compliance with certain provisions o~' contractual requirements as specified in City of Bakersfield Agreement 78-153, as amended by Agreements -/6- 153(4), '/'/a.a., 85-19'/, and 92-106, matters might have come to our attention that would have been reported to you. BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN ACCOUNTANCY CORPORATION Bakersfield, California September 20, 1999 CITY Of BAKERSFIELD TRANSPORTATION DEVELOPMENT ACT FUNDS FINANCIAL STATEMENTS JUNE 30, 1999 AND 1998 CITY OF BAKERSFIELD T~NSPORTATION DEVELOPMENT ACT FUNDS TABLE OF CONTENTS Page FINANCIAL SECTION Independent Auditor's Report ................................................. ~ ................................................. 1 Financial Statements Streets and Roads Fund Balance Sheets ................................................................................................................. 3 Statements of Revenues, Expenditures, and Changes in Fund Balance ................................................................................................ 4 Bikeway and PedeStrian Fund Balance Sheets ................................................................................................................. 5 Statements of Revenues, Expenditures, and Changes in Fund Balance ............................................................................................... 6 Notes to Financial Statements ................................................................................................. 7 Other Reports Auditor's Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards and the Rules and Regulations of the Transportation Development Act .................................................................................................................... 9 ~ ~.~;,~. :-: .::: .- -. ~¢....:"..:: . 7': :¢ c.... ~. ~' . :~' ~' '~ · .. :.: :~-..:::: :...:-~': .:::~??' ~:: ~:~:¢~." ':~'"T ' . ~;" Peter C. B~, CPA Bu~on H. A~n~ CPA Je~ E. Radali, CPA/ABV INDEPENDENT AUDITOR'8 REPORT ~nja~ E Rey~, CPA .~d~w J. Paulden, CPA TO the CiW Council Han,ey J. M<o~, CPA Ci~ of B~ke~field B~kersfield, California ~d~a Ru~e~ord-~l, CPA S~ev~ R. 5~uck, CPA We have ~udR~ ~e n~mp~nyin~ finanCial ststement$ of the $treets nnd Roads Fund, and A~I~nK~er, CPA ~e Bikeway and P~ian Fund of ~e Ci~ of B~kersfield, Californin, ns of,June 30, L~ E ~aus~, CPA ' ~nd ~ ~8, ~nd for ~e y~ ~en end~. The financial st~temen~ are ~e r~pnsibili~ of ~e . s~. U Walden, CPA Ci~ of B~ke~field, Cnlifomi~'s, management. Our responsibili~ ia to express ~n opinion on these financial statements based on our audit. c~ M. ~ombu~, CPA Jacque~eL.~on, CPA ~e ~ondu~t~ our audit in ~ordaB~ with ~enernlly aCcepted nuditin~ standards. Thos~ standards r~uire ~at we plan 8nd pe~o~ the audit to obtain reasonable assuran~ about Io~M.~d~n, CPA whether th~ financial statements nre free of m~teri~l misstntement. ~ audit inolud~ I. ~, CPA examining, on a test bssis, evidenCe $uppo~in~ the amounts and dis¢lo$ur~ iB ~e finanCial ~Sa~er, CPA ~tatements. ~ audit 81so in~lud~ ass~sing ~e ~o~oun~ng p~n~ipl~ used and signifi~nt e~timates m~de by m~nagement, as well ns evaluating the owr~ll finanoinl statement Eric H. X~, CPA presentation. We believe that our audit provides a re~son~ble b~$i5 for our opinion. As dis~uss~ in Note ~, the finnn~inl statements present only the Streets and Rond$ Fund and the Bikeway ~nd Peri,trion Fund ~nd ~ce not intended to present fairly the position of ~e Ci~ of B~kersfield, California, ~nd the results of its o~er~tion~ and the ~h flows of its propfietn~ Mhd ~pe in ~onfo~i~ wi~ ~enerally a~pt~ a~untin~ principle. lB our opinion, ~e financial $tntement$ referral to in the first paragraph pr~ent fairly, in all material r~, ~e fiBa~i~l po$ifioB of ~e 8~eet$ ~nd Roads Fund ~nd the Bikewny and P~Man Fund of ~e Ci~ of Bake~field, California, ~s of,June 30, ~ aBd ~8, result$ of its opernfions for the year then ended in ~onformiW with ~enerally a~ept~d - a~ounting principles. MEMBER ot SIC Proctice Section of the Americon Institute of Certi[ied Public Accountonts In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued reports dated October 27, 1999 on our consideration of the Streets and Roads Fund, and the Bikeway and Pedestrian Fund of the City of Bakersfield, California's, internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. The City of Bakersfield's TDA financial statements does not present the disclosures required by Government Accounting Standards Board Technical Bulletin 98-1, Di$c/osure$ about Year 2000/$$ue~, as amended by Governmental Accounting Standards Board Technical Bulletin 99-1, that the Government Accountin~ Standards Board has determined are necessary to supplement, although not be a part of, the basic financial statements. In addition, we do not provide assurance that the City of Bakersfield's TDA is or will become year. 2000 compliant, that the City of Bakersfield's TDA year 2000 remediation efforts will be successful in whole or in part, or that parties with which the City of Bakersfield's TDA does business are or will become year 2000 compliant. BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN ACCOUNTANCY CORPORATION Bakersfield, California October 27, 1999 2 CITY OF BAKERSFIELD STREETS AND ROADS FUND BALANCE SHEETS JUNE 30, 1999 AND 1998 1999 1998 ASSETS Cash with City Treasurer $ 3,974 $ 8,435 Accrued Interest Receivable 44 967 TOTAL ASSETS ~. 4.018 $ 9.402 LIABILITIES AND FUND BALANCE Liabilities Accounts Payable $ - $ 5,303 Fund Balance Unreserved 4,018 4,099 TOTAL LIABILITIES AND FUND BALANCE $ 4.016 ~L__9+_4D2. The accompanying notes are an integral part of these financial Statements. 3 CITY OF BAKERSFIELD STREETS AND ROADS FUND STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE FOR THE YEARS ENDED JUNE 30, 1999 AND 1998 1999 1998 REVENUES ~ Interest Income $ 189 $ 4,041 EXPENDITURES Streets and Roads 270 88,597 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (81) (84,556) FUND BALANCES AT BEGINNING OF YEAR 4,099 88~655 FUND BALANCES AT END OF YEAR $ 4.018 ~ The accompanying notes are an integral part of these financial statements. 4 CITY Of BAKERSFIELD BIKEWAY AND PEDESTRIAN FUND BALANCE SHEETS JUNE 30, 1999 AND 1998 1999 1998 ASSETS Cash with Treasurer $ 191,360 $ 54.044 Accrued Interest Receivable 549 743 Due from Local Agencies 9,386 - TOTAL ASSETS ~ $ 54.787 LIABILITIES AND FUND BALANCE .. Liabilities Accounts Payable $ 7 $ - Due to KemCOG 45,558 27 Deferred Revenue 155,959 54,760 Total Liabilities 201,524 54,787 Fund Balance (Deficit) Unreserved (229) - TOTAL LIABILITIES AND FUND BALANCE ~L_Z0._I+2~ $ 54,.787 The accompanying notes are an integral part of these financial statements. 5 CITY OF BAKERSFIELD TDA FUNDS BIKEWAY AND PEDESTRIAN FUND STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE FOR THE YEARS ENDED JUNE 3'0, 1999 AND 1998 1999 1998 REVENUES Local Transportation Funds $ 16,586 $ - Investment Income 1,805 ('27) Total Revenues 18,391 (27) EXPENDITURES Pedestrian and Bicycle 18,620 85 EXCESS (DEFICIENCY) OF REVENUES OVER (229) (112) FUND BALANCES AT BEGINNING OF YEAR - 112 FUND BALANCES (DEFICIT) AT END OF YEAR ~~..,.9.) $ - The accompanying notes are an integral part of these financial statements. 6 CITY OF BAKERSFIELD TRANSPORTATION DEVELOPMENT ACT FUNDS NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 AND 1998 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Transportation Development Act (TDA) Funds of the City of Bakersfield (City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below. Description of the Reportin.q Entity The TDA provides funding of public transportation through regional planning and prOgramming agencies. Funds are allocated to the City through the county transportation planning agency, Kern Council of Governments (KERNCOG). The TDA Funds account for the City of Bakersfield's share of the Transportation Development Act allocations, which are legally restricted for specific purposes aS detailed in applicable sections of the Public Utilities Code. As the TDA Fund's financial statements do not include all funds and component units of the City, they are not intended to present faidy the financial position and results of operations of the City in conformity with generally accepted accounting principles. The financial statements are intended to reflect the financial position, results of operations and compliance with the Transportation Development Act only for the Streets and Roads Fund and the Bikeway and Pedestrian Fund. Basis of Accountinq The City uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. The operations of the TDA funds of the City are accounted for in a separate set of self-balancing'accounts that comprise the Funds' assets, liabilities, fund balance, revenues and expenditures. The Streets and Roads Fund and the Bikeway and Pedestrian Fund are accounted for as special revenue funds within the govemmental category using the modified accrual basis of accounting whereby revenues are recognized when they become measurable and available and expenditures are recognized when the liabilities - are incurred. The City reports deferred revenue on its balance sheet. Deferred revenues arise when a potential revenue does not meet both the "measurable" and "available" criteda for recognition in the current period. In subsequent pedods, when both revenue recognition cdteda are met, or when the City has a legal claim to the resources, the liability for deferred revenue is removed from the combined balance sheet and revenue is recognized. NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIE,C; (Continued) Interfund Receivables/Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as "due from other funds" or "due to other funds" on the balance sheet. Short-term interfund loans are classified as "interfund receivables/payables." Fund Equity Designated fund balances represent tentative plans for future use of financial resources. Comparative Data Comparative data for the prior year are presented in the accompanying financial statements in order to provide an understanding of changes in the fund's financial position and operations. NOTE 2 - CASH AND INVESTMENTS Cash balances of the TDA funds are pooled with those of other funds and invested by the City to maximize investment opportunities and yields. Investment income resulting from this pooling is allocated among the funds based upon each respective fund's average cash balance in relation to the aggregate investment balance. Further information regarding the City's cash and investment may be found in the City's Comprehensive Annual Financial Report. NOTE 3 - DEFERRED REVENUES The Local Transportation Fund (LTF) and State Transit Assistance Fund (STAF) allocate funds to the City to fund its Transportation Development Act (TDA) operation. The TDA requires that any funds not used must be returned to their source. LTF and STAF allocations are considered earned when they are properly spent on approved projects. Allocations received but not earned are recorded as deferred revenues. The following table summarizes the changes in the deferred revenue account for ~the fiscal years ended June 30,: 1999 1998 Bikeway and Pedestrian Fund: Deferred Revenue, Beginning of Year $ 54,760 $ 51,656 Funds Received 153,400 3,104 TDA Funds Allowed (6,643) - Funds Returned to KemCOG (45,558) - _ . Deferred Revenues, End of Year $ 155.959 $ 54.760 OTHER REPORTS REPORT ON COMPLIANCE AND ON INTERNAL PeterC. Brom, CPA CONTROL OVER FINANCIAL REPORTING BASED ON gu,onH. Ammn, Cm AN AUDIT Of FINANCIAL STATEMENTS PERFORMED IN )e~.E. Randali, CPA/ABv ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS AND THE RULES AND REGU~TIONS OF THE ~nja~P. Rey~,CPA T~NSPORTATION DEVELOPMENT ACT And~w J. Paulden, CPA Ha~'ey I. M~om, CPA To the Ci~ Council ~d~a Ru~erfo~-~ll, CPA Ci~ of Bakersfield 5tev~ R. 5m~uck, CPA Bakersfield, California Afl~ K~ter, CPA L~.~aus,,Ce.~ We have audited the financial statements of ~e Streets and Roads Fund and the Bikeway and P~estfian Fund of ~e Ci~ of Bakersfield, California, for ~e year end~ 3une 30, ~999, 5~' L. Wallin, CPA and have issued our repoA thereon dat~ October 27, ~999. We conduct~ our audit in ~.~ombmh, CeA a~ordance wi~ 9enerally ac~pted audi~n9 s~ndards and ~e GOVERNMENT AUDITING lacque~e L. ~ton, CPA STANDARDS, issu~ by the Comp¢oller General of the Unit~ Stat~. Our audit was ~er Jo~M.~de~n, CPA made to dete~ine ~at allo~ons made and ex~nd~ by ~e Ci~ were made in a~rdan~ with the Transpodation Development Act (TDA). Those standards require ~at we plan and cea peffo~ ~e audit to obtain reasonable assuran~ about Whemer the financial statemenm are '. ~we,. c~ free of matedal misstatement. Eric H. ~, CPA Compliance As pad of obtaining reasonable assurance about whether the Ci~ of Bake~field's TDA financial statements are flee of material misstatement, we pe~orm~ tests of its compliance with ~dain provisions of laws, r~ulaUons, contracts and grants, non~mpliance wi~ whi~ could have a direct and matedal effect on ~e determinaUon of financial statement amounts. However, providing an opinion on complian~ with ~ose provisions was not an obj~Uve of our audit and, accordingly, we do no expr~s such an opinion. The r~ults of our t~ts disclos~ no instanc~ of noncompliance ~at are r~uir~ to be repoded under GOVERNMENT AUDITING ST~DARDS. Internal Control Over Financial RepodinR In planning and pedaling our audit, we considered the Ci~ of Bakersfield TDA's internal con¢ol over financial repo~ng in order to determine our audi~ng procures for ~e purpose of expressing our opinion on ~e financial statements and not to provide assurance on the internal ~n¢ol over financial r~ng. Our ~nsideraQon of ~e internal mn¢ol over financial repoding would not necessarily disclose all ma~ers in the internal con~ol over financial repoding that might be material weaknesses. A material weakness is a condition in which the d~ign Or operation of one or more of ~e internal con¢ol mmponents d~ not redu~ to a relatively Iow level the dsk ~at misstatements in amounts that would be matedal in relatiOn to the finandal statemen~ b~ng audit~ may ~r and not be det~t~ ~in a Umely ped~ by employees in the normal course of pedorming their assigned function's. We noted no ma~ers involving the internal control over financial repo~ing and its operation that we consider to be material weaknesses. /~[/~SER of SIC Practice Section o[ the American Institute of Certified Public Accountants This report is intended for the information of management, the City Council, the Kem Council of Govemments, and the State Controller's Office. However, this report, which is a matter of public record and its distribution is not limited. BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN ACCOUNTANCY CORPORATION Bakersfield, California October.27, 1999 '10 ADMINISTRATIVE REPORT I MEETING DATE: April 26, 2000 I AGENDA SECTION: Consent Calendar I I ITEM: 8.1. TO: Honorable Mayor and City Council ~VED FROM: Jake Wager, Economic Development Director DEPARTMENT HEA~ "'-"~.,~ DATE: April 18, 2000 CITY ATTORNEY ~,,/~'L'~/ CITY MANAGER SUBJ£CT: Agreement with Affordable Home, Inc. for $19§,000.00 of HOME Investment Partnership Program Funds to purchase existing single-family for rehabilitation and resell to qualified homebuyers. (City-Wide) RECOMMENDATION: Staff recommends approval. BACKGROUND: At the April 12, 2000 City Council meeting this item was-referred to the Budget and Finance Committee meeting of April 19, 2000 for their review and comment. At that meeting the Committee unanimously approved that the Agreement be returned to the April 26, 2000 City Council meeting for their approval. Affordable Home, Inc. (AHI) a non-profit public benefit corporation has requested HOME Investment Partnership Program (HOME) funds to construct single-family homes, or purchase existing single-family homes, for rehabilitation and resell to qualified homebuyers. Incorporated in 1994, AHI was organized to expand the opportunities to residents and groups to obtain adequate Iow cost housing accommodations by constructing, rehabilitating, and providing decent, safe and sanitary housing. Since it's inception, AHI has developed both single-family and multi-family rehabilitation projects in Los Angeles, Fresno, Lemoore, San Luis Obispo County, Phoenix, and Bakersfield. In the last three years AHI has acquired and rehabilitated a total of 85 single-family units and 154 multi-family units. Seven in the City of Bakersfield. AHI has been certified as a Community Housing Development Organization by the State of California which then allows AHI to access CHDO funds throughout the State. The HOME Program statutes and regulations offer very specific guidance to assure that CHDO's are: · Legally recognized not-for-profit corporations. · Organizations controlled by, and in service to, Iow-income communities, and · Organizations committed to, and capable of engaging in the development of affordable housing. DIk:S:~Admins~ahi admin.wpd April 20, 2000, 8:07AM ADMINISTRATIVE REPORT Page 2 The CHDO allocation for the City (15% of the HOME Allocation) for FY 1999/2000 is $195,000. AHI has requested $195,000 of HOME CHDO funds be allocated to assist them to purchase properties and construct or rehabilitate single-family homes that would be sold to qualified HOME eligible families. No more than $15,000 would be spent per property. The net proceeds of the sale of a home to an eligible homebuyer will be pooled by AHI to purchase other eligible HOME properties rehabilitated and sold. An annual report will be submitted by AHI identifying properties bought and sold to eligible homebuyers. AHI will maintain a HOME eligible revolving pool of funds to continue with their efforts to expand the availability of affordable housing in Bakersfield. The availability of HUD homes in the City of Bakersfield will determine where AHI will purchase homes for this program, AHI will target its efforts city-wide. DIk:S:~dmins\ahi admin.wpd April 20, 2000, 8:07AM AGREEMENT NO. HOME Investment Partnerships Program AFFORDABLE HOMES, INC. THIS AGREEMENT is made and entered on , by and between the CITY OF BAKERSFIELD, a charter city and municipal corporation ("CITY" herein), and AFFORDABLE HOMES, INC., a California non-profit, public-benefit corporation ("AHI" herein). RECITALS WHEREAS, the Congress of the United States has enacted the "HOME Investment Partnerships" Act ("the Program" herein) at 42 USC 12741 et. seq. of the Cranston- Gonzalez "National Affordable Housing Act and amendments ("the Act" herein); and WHEREAS, CITY has submitted certain documents to the Department of Housing and Urban Development ("HUD" herein) hoping to receive funds pursuant to the Program; and WHEREAS, CITY is empowered, under the Program, to administer funds received and to enter into agreements with nonprofit organizations; and WHEREAS, AHI has asked CITY for help in acquiring the Program funds to pay eligible costs to purchase existing single-family homes in order to rehabilitate them and resell them to qualified eligible Homebuyers; and WHEREAS, CITY desires to assist AHI by granting to it, funds from the Program, to be used to construct residential property or acquire residential property for rehabilitation within the incorporated portion of Metropolitan Bakersfield. The residential property is to be built, purchased, rehabilitated and occupied in accordance with the Program requirements. NOW, THEREFORE, incorporating the foregoing recitals herein, CITY and AHI mutually agree as follows: 1. DEFINITIONS. Except t° the extent modified or supplemented by any agreement between CITY and HUD, any term defined in the Act 'or the Program, shall have the same meaning when used herein. A. "Project" means AHI's construction, or purchase and rehabilitation, or resale to an eligible Homebuyer under this Agreement, of residential properties ("Project Properties" herein). HOME Investment Parlnership Programs December6, 1999(8:24AM) Page 1 of 17 Pages S:\Agreement~ahififthversion.wpd B. Eligible Homebuyers" means Iow-income people who qualify under the guidelines set forth at 24 CFR 92.2. C. "Period of Affordability" means a five- or twenty-year time period, beginning at Project Completion, during which period each Project Property must be affordable to eligible Homebuyers in accordance with 24 CFR 92.254. The affordability period shall be twenty (20) years for any new construction. Rehabilitated properties need only be affordable for five (5) years. D. "Project Completion" shall have the meaning set forth at 24 CFR 92.2, the definition of which is attached hereto as Exhibit "A". E. "Project Properties'' means more than one parcel or all parcels of real property purchased pursuant to this Agreement. F. "Project Property" means any single parcel of real property purchased pursuant to this Agreement. G. "Grant" means CITY's grant of the Program funds to AHI to purchase Project Properties. 2. .CONDITIONS OF THE GRANT B. Purpose: The grant is intended to provide money, in the amount set forth in paragraph 3, below, to apply toward the cost of purchasing each Project Property and to pay eligible pre'construction costs. B. Terms of Grant: Subject to the terms and conditions of this Agreement, CITY agrees to grant to AHI, and AHI agrees to receive from CITY, the amount of money set forth in Paragraph 3A. HOME Investment Partnership Programs Oecember 6, 1999 (8:24AM) S:~Agreement~ahififthversion.wpd Page 2 of 17 Pages 3. FUNDS AVAILABLE AND METHOD OF DISBURSEMENT A. Amount of Grant: CITY shall grant, and AHI shall receive no more than ONE HUNDRED N! N ETY-FIVE THOUSAND AND 00/100 DOLLARS ($195,000.00) for the purchase of Project Properties, including .escrow costs and other costs related to the acquisition of each Project Property, as well as pre-construction costs for new construction. No more than FIFTEEN THOUSAND AND, 00/100 DOLLARS ($15,000.00) (including escrow- related costs or eligible pre-construction costs) may be spent on any one Project Property. B. Disbursements of Grant Funds: When AHI locates a property that it desires to purchase, it shall notify CITY of the address. CITY will then begin the environmental review as required by 24 CFR 92.352. AHI will then provide CITY with a preliminary title report from a title company satisfactory to CITY, a termite clearance report and an appraisal by a FHA approved and State licensed real property appraiser satisfactory to CITY. 'Such appraiser shall follow the Uniform Standards of Professional Appraisal Practice (USPAP). All appraisals must be current (dated no earlier than six 6 months prior to close of escrow). Additionally, AHI shall provide CITY with an itemized list of costs associated with the above reports as well as documentation of the amount of HOME funds needed to assist in the acquisition of the Project Property and to close escrow. Upon completion of the environmental review, CITY shall deposit the funds needed into escrow with an escrow company satisfactory to C. Term and Repayment: AHI will receive purchase money from CITY as a grant. After rehabilitation is completed and upon resale of each Project Property to an eligible Homebuyer, AHI, as a Community Housing Development Organization (CHDO), shall use any net income from the resale in accordance with the regulations of HUD and all applicable statutes. AHI shall be solely responsible for such use. AHI shall not close escrow on the initial purchase of a Project Property until CITY conducts the environmental review pursuant to 24 CFR 92.352. HOME Investment Partnership Programs December6, 1999(8:24AM) Page 3 of 17 Pages S:~Agreement~ahififfhversion.wpd CITY shall not be obligated to disburse, or pay to, AHI, any funds until and after CITY receives HOME Program funds, allocated for this Project, from the Federal Government. If CITY does not receive such funds CITY, at its sole option, may terminate or suspend this Agreement, without any liability to AHI, until CITY receives such funds. AHI shall not be entitled to any damages from CITY if CITY refuses to disburse funds until CITY receives funds, even if AHI has detrimentally relied upon this Agreement. This Agreement shall terminate June 30, 2004 unless terminated sooner pursuant to the terms herein. The affordability requirements and record-keeping responsibilities will survive termination of this Agreement. If AHI fails to comply with any terms of this Agreement after having received notice and an opportunity to comply, CITY may terminate this Agreement and AHI must repay all funds granted to AHI. Any funds which were used for a specific Project Property need not be repaid if that Project Property has been purchased by an eligible Homebuyer and that Homebuyer has executed a note and deed of trust in favor of the City of Bakersfield regarding those funds. 4. AHI's OBLIGATIONS A. Applicable Regulations: AHI shall comply with all applicable local, state, and federal regulations. B. Cooperation: AHI shall cooperate fully with CITY in completing the Project competently and professionally. C. PreLCIosing Obligations: Before close of any escrow by which AHI will take title to a Project Property, AHI shall: 1. Provide CITY, and its designees, reasonable access to all portions of the Project Property/Properties; 2. Execute a Deed of Trust for each Project Property in the form attached as Exhibit "B" and incorporated herein by reference; 3. Execute for recordation the Deed Restrictions in the form attached as Exhibit "C" and incorporated herein by reference. HOME Investment Partnership Programs December6, 1999(8:24AM) Page 4 of 17 Pages S:~Agreement~ahififthversion,wpd Such Deed Restrictions must be recorded on every Project Property acquired by AHI with assistance of HOME funds; 4. Provide a preliminary title report, from a title company satisfactory to CITY; a termite clearance report; and an appraisal by a FHA approved real property appraiser satisfactory to CITY; and 5. Pay all costs other than those CITY agrees to pay. D. Marketing: Prior to and during the Period of Affordability AHI shall: 1. Before initially marketing the first Project Property and taking any purchase applications from any person, deliver to CITY, for review, comment, and approval or disapproval, a copy of the marketing plan AHI intends to use to market, and select buyers of, the Project Property; AHI shall change the marketing plan in response to CITY's comments and shall resubmit the marketing plan for CITY review and approVal which shall not be unreasonably withheld; AHI shall follow the marketing plan approved by CITY. CITY acknowledges AHI's proven marketing expertise and will not impose any marketing plan not originated by AHI. 2. Allow CITY, HUD, their agents and designee(s), access to all portions of each Project Property at all reasonable times. If AHI fails to comply with the provisions of this Section (Marketing), and upon written notice to AHI from CITY listing areas of noncompliance, fails to initiate corrective action within thirty (30) days from date of notice, AHI shall be in default. CITY shall thereupon have the right to repayment from AHI for the total amount granted to AHI up to the date of the default. Any funds which were used for a specific Project Property need not be repaid if that Project Property has been purchaSed by an eligible Homebuyer and that Homebuyer has executed a note and deed of trust regarding those funds. E. Sale to Eligible Homebuyers When an eligible Homebuyer agrees to purchase a Project Property, AHI shall ensure that such Homeowner executes a Promissory Note and Deed of Trust on the Project Property in favor of the City of Bakersfield for the total amount of HOME funds expended on that HOME Investment Partnership Programs December6, 1999(8:24AM) Page 5 of 17 Pages S:~Agreement~ahifift hversion,wpd Project Property. The Promissory Note and Deed of Trust shall be in a form acceptable to CITY. Such purchase shall take place via an escrow. Subsequent to the close of escrow with the eligible purchaser, CITY shall reconvey the Deed of Trust executed by AHI at AHI's expense, if any. 5. CITY's OBLIGATIONS. CITY will make available to AHI a copy of any regulation CITY proposes to enact to facilitate administration of the Program prior to such enaction or hearing to consider the same, and shall give due and reasonable consideration to AHI's comments. 6. LAWS AND REGULATIONS A. Federal Law: AHI shall conform to the Act (and any amendments to it), federal regulations and guidelines now existing or hereafter enacted pursuant to the Act, terms of the HOME Program Agreement between HUD and CITY now or hereafter in effect, and regulations now or hereafter enacted by CITY to facilitate its administration of the HOME Program, and any other statute, regulation or guideline applicable to the HOME Program. AHI shall become familiar with the appropriate statutes, regulations, and guidelines governing the HOME Program. B. California Law: AHI shall comply with all provisions of California law applicable to public contracts insofar as such laws shall be applicable to nonprofit organizations and not in conflict with HOME regulations. C. Home Program Regulations: AHI shall comply with all applicable provisions of the HOME Program regulations including, but not limited to, the following: 1. The affordability requirements of 24 CFR 92.254, for a period of five (5) years or twenty (20) years (new construction) after Project Completion. If CITY determines the housing does not meet the affordability requirements, AHI shall immediately pay to CITY all the HOME Program funds CITY has granted to AHI under this Agreement. Any funds which were used for a specific Project Property need not be repaid if that Project Property as been purchased by an eligible Homebuyer and HOME Investment Partnership Programs December 6, 1999(8:24AM) Page 6 of 17 Pages S:~,greement~ahififthversion.wpd that Homebuyer has executed a note and deed of trust regarding-those funds. 2. Housing Quality Standards, state and local housing code requirements, covering each Project Property. 3. The requirements of 24 CFR 92.254 (Qualification as Affordable Housing and Homeownership). D. Marketing Targets: AHI shall market each Project Property only to income eligible persons. The Client Population, however, may not be obtained exclusively through referrals from a single social service agency. AHI shall not give preference or priority to individuals who are referred by specific agencies. AHI shall make a good faith effort to solicit buyers from throughout the City of Bakersfield. AHI shall not deny access to the Project on the basis of race, ethnicity, gender, sexual orientation or age, except for senior projects as to age. 7. ~-.. RECORDS AND AUDITS. AHI shall maintain records sufficient to show it has reasonably complied with all applicable provisions and requirements of this Agreement. A. Records and Reports: AHI shall create and retain accurate records of AHl's efforts to market each Project Property and results of those efforts. At least annually, but more often if requested by CITY, AHI will deliver to CITY, a report which includes, at a minimum, the following: 1. A description of marketing and outreach AHI carried out during the reporting period, including such items as clipped notices, flyers, advertisements, and letters; 2. Identification of each applicant's referral source; 3. Race or ethnicity, and gender of applicant; and 4.- Family income, family size, race or ethnicity, and gender of each purchaser. HOME Investment Partnership Programs December6. 1999 (8:24AM) Page 7 of 17 Pages S:~,greement~ahifift hversion.wpd B. Audits: · AHI shall arrange, at its own expense, for the performance of a "Single Audit" of its entire operations by an independent auditor in accordance with Public Law 98-502 and OMB Circular A-133. C. Delivery of Audit Results to CITY: The auditor shall deliver results of said audit to CITY within thirty (30) days of the audit's completion. CITY's acceptance of AHI's audit reports does not prohibit CITY from performing any additional audit work CITY deems to be necessary or as necessary for CITY to comply with any administrative or audit requirements imposed by the federal or state government. D. Record Retention: As a condition of receiving federal financial assistance under this Agreement, AHI shall comply with 24 CFR 85.42, "Retention and Access Requirements for Records." Any agreement between AHI and its independent auditor shall provide for access, during normal business hours, to the independent auditor's work papers, by federal, state, and CITY auditors, or their authorized agent6. AHI's independent auditor shall retain, for review purposes, audit work papers for three years from date of audit completion, or until three years after all audit-related issues are resolved, whichever occurs later. E. Financial-Management System: AHI shall maintain a financial-management system which complies with 24 CFR 85.20, "Standards for financial management systems," except paragraph (1) thereof. F. Procurement and Allowable Costs: AHI shall comply with the requirements and standards of 24 CFR 85.36, "Procurement" [except paragraph (a)], and 24 CFR 85.22, "Allowable Costs." G." Subawards and Monitoring: AHI shall comply with the standards and requirements of 24 CFR 85.35, "Subawards to Debarred and Suspended Parties"; and 24 CFR HOME Investment Partnership Programs D,~m~,6. ~(6:~.^.) Page 8 of 17 Pages S:~Agreement~ahififthversion.wpd 85.40, "Monitoring and Reporting Program Performance" [except paragraphs (b) through (d) and paragraph (f)]. CITY has the right, but not the obligation, to monitor and supervise the administration and implementation of the Project to insure compliance with the requirements of the Act as it now exists or hereinafter amended, the federal regulations as now exist or hereafter promulgated pursuant to the Act, or guidelines developed by the federal government for administering or implementing the project, or any other statute, rule, regulation, or guideline applicable to the administration or implementation of the HOME Program. H. Enforcement: AHI shall comply with the standards and requirements of 24 CFR 85.43, "Enforcement," and 24 CFR 85.44, "Termination for Convenience." I. Disallowances and Adjustments: AHI shall account to CITY for any and all Program funds expended by AHI or its officers, employees, agents, or representatives, whether or not such officers, employees, agents or representatives were acting within the scope of his or her employment. AHI shall repay CITY, on demand, the full amount of any improperly-expended HOME Program funds, and shall comply with requirements of 24 CFR 85.51, "Later Disallowances and Adjustment." CITY may retain any funds of AHI in CITY's possession to liquidate (in whole or in part) the debt resulting from any such improper expenditure. J. CITY Withholding of Funds: CITY may withhold funds from AHI if AHI is not complying with the Act, federal regulations thereunder, terms of the HOME Program from the federal government to the CITY, regulations of CITY to facilitate the administration of the HOME Program, the terms of this Agreement, or any other statute or regulation applicable to the HOME Program or administration. Should CITY become subject to any penalties because failure by AHI, or AHI's agent, to comply with all applicable federal, state, and local laws and regulations, AHI shall be solely liable to the extent of its culpability for any such penalties and shall fully reimburse CITY for any payments made or funding lost as a result. HOME Investment Partnership Programs December6, 1999(8:24AM) Page 9 of 17 Pages S:t, Agreement~ahififfhversion.wpd 8. POLITICAL ACTIVITY. AHI shall expend no HOME Program funds to finance any political activity in contravention of the Hatch Act (Chapter 15 of Title 5 of the United States Code). 9. LOBBYING. AHI certifies, to the best of its knowledge and belief, no federally-appropriated funds have been paid or will be paid, by or on behalf of AHI, to any person for influencing or attempting to influence an officer or employee of any agency, a member of Congress, an officer or employee of Congress, or an employee of a member of Congress, in connection with the awarding of any federal contract, the making of any federal grant, the making of any federal loan, the entering into of any cooperative agreement, and the extension, Continuation, renewal, amendment, or modification of any federal contract, grant, loan, or Cooperative agreement. If funds, other than federally-appropriated funds, have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a member of Congress, an officer or employee of Congress, or an employee of a member of Congress in connection with this federal contract, grant, loan, or cooperative agreement, AHI shall complete and submit, in accordance with its instructions, Standard Form-LLL, "Disclosure Form to Report Lobbying," Exhibit "D." AHI shall require the language of this certification to be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and all subrecipients shall so certify and disclose accordingly.' 10. FUNDS FOR RELIGIOUS PURPOSF. AHI shall permit no HOME Program funds to be expended for the design, construction, operation, or maintenance of any facility to be used for sectarian instruction or as a place for religious worship, except in situations where such use is incidental and' does not favor one religious group over another. 11. PROHIBITED INTEREST OF OFFICIALS AND EMPLOYEE~. No member of or delegate to the Congress of the United States, and no resident commissioner, shall be admitted to any share or part of this Agreement or to any benefit to arise from it. No member, officer or employee of AHI, or its designees or agents, no member of CITY's Council or any other public official who exercises any functions or responsibilities with respect to the HOME Program during his tenure, or for one year thereafter, shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be .performed pursuant to this Agreement. AHI shall incorporate or cause to be incorporated, a provision prohibiting such interest in all contracts or subcontracts, relating in any manner to this Agreement: 12. EQUAL EMPLOYMENT OPPORTUNITY (NON-DISCRIMINATIOH CLAUSE). AHI shall not discriminate against any employee,' or applicant for employment, because of race, color, religion, sex, national origin, age, disability, or sexual orientation. HOME Investment Partnership Programs December 6, 1999(8:24AM) Page 10 of 17 Pages S:~,greement~ahififthversion.wl:x:l AHI shall take affirmative action to insure that applicants for employment and employees are treated during employment, without regard to race, color, religion, sex, national origin, age, disability, or sexual orientation. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. AHI shall post in conspicuous places, available to employees and applicants for employment, notices to be provided by CITY or HUD setting forth the provisions of this nondiscriminatiOn claUse. AHI shall state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, national origin, age, disability, or sexual orientation. AHI shall be bound by the equal opportunity clause set out in Exhibit"E," attached, with respect to its own employment practices when it participates in federally- assisted construction work; provided, however, the clause is not 'applicable to any agency, instrumentality, or subdivision of AHI which does not participate in work on or under the contract. 13. NON-DISCRIMINATION REQUIREMENTS. Under any related agreements or contracts, AHI shall provide that no person, on the grounds of race, color, national origin, religion, or sex, shall be excluded from participation in, be denied the benefits of, or be subjected' to discrimination under any program or activity funded in whole or in part with HOME Program funds. In addition, HOME Program funds must be made available in accordance with the following: A. The requirements of the Fair Housing Act and implementing regulations at 24 CFR 100. B. Executive Order 11063 (Equal Opportunity in Housing). C. Title VI of the Civil Rights Act of 1964 (PL 88-352) and Title VIII of the Civil Rights Act of 1968 (PL 90-284 nondiscrimination and fair housing on federally assisted programs). In addition to the foregoing, AHI will comply with the nondiscrimination clause listed in Exhibit "F", attached hereto and incorporated herein by this reference as if set forth in full. 14. REHABILITATION ACT OF 1973 AND AMERICANS WITH DISABILITIER ACT. This Agreement is subject to the provisions of Section 503 and. 504 of the Rehabilitation Act of 1973 (PL 930112), 29 USC 706, and attendant regulations at 24 CFR, Part 8, which provide that no otherwise qualified, handicapped individual shall, solely by reason of his handicap, be excluded from participation in, be denied the benefits of or be subjected to discrimination under any program or activity receiving federal financial assistance. AHI shall cause or require to be inserted in full, in all contracts subject to such HOME Investment Partnership Programs December6, 1999(8:24AM) Page 11 of 17 Pages S:~,green3ent~ahififlhversion.wpd regulations, the clause, or any modification thereof, set out in Exhibit "G," attached hereto and herein incorporated by this reference as if set out in full. This Agreement is also subject to The Americans with Disabilities Act of 1990 (amended), 42 USC 12101, et. seq. 15. NON-DISCRIMINATION BECAUSE OF AGF, This Agreement is subject to the Age Discrimination Act of 1975, as amended, (Title III of Public Law 94-135) and attendant Code of Federal Regulations at 48 CFR, Part 22, Subpart 22.9. That Act sets forth that, except as otherwise provided, no person in the United States shall, on the basis of age, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving federal financial assistance. 16. "SECTION 3" TRAINING, EMPLOYMENT, AND BUSINES~ OPPORTUNITIES. This Agreement is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968 (12 USC 1701u) as amended, HUD regulations issued pursuant thereto at 24 CFR 135, and any applicable rules and orders of HUD issued thereunder. AHI shall cause, or require'to be inserted in full in all contracts and subcontracts for work financed, in whole or in part, with assistance provided under this Agreement, the Section 3 clause set forth in Exhibit "H", attached. 17. WOMEN AND MINORITY-OWNED BUSINESS ENTERPRISER. AHI agrees to abide by the requirements of' Executive Orders 11625, 12432 and 12138, the HUD regulations issued pursuant thereto at 41 CFR Part 24; 41 CFR Subpart 1-1.13, and any applicable rules and orders of HUD. The foregoing require the maximum practicable opportunity to participate, in contracts funded in whole or in part with federal funds, be provided to women- and minority-owned business enterprises, as subcontractors and suppliers to contractors performing work, or rendering services as prime contractors or subcontractors, under federally-funded procurement contracts. AHI shall include the Utilization of Minority Business Enterprises clause set forth in Exhibit "1", attached, .in all contracts in amounts which may exceed $10,000 (except for contracts for services which are personal in nature). 18. AFFIRMATIVE ACTION FOR THE VIETNAM-ERA VETERAN,_e. AHI shall comply with 48 CFR, Chapter 1, Subpart 22.13 and shall take affirmative action to employ, advance in employment, and otherwise treat qualified disabled veterans and veterans of the vietnam Era without discrimination based on disability or veteran's status in 'all employment practices such as employment, upgrading, demotion, tranSfer, recruitment, advertising, layoff, or termination, rates of pay or other forms .of compensation, and selection for training, including apprenticeship. In all contracts or agreements of $10,000 or more relating to this Agreement, AHI shall include, or cause to be included, the "Affirmative Action for Special Disabled and the Vietnam Veterans Provisions" clause set out in Exhibit "J", attached. HOME Investment Partnership Programs December6, 1999{8:24AM) Page 12 of 17 Pages S:~Agreement~ahifift hversion,wpd 19. RELOCATION ASSISTANCE AND ACQUISITION POLICIES.' This Agreement is subject to the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 USC 4601), and the HUD implementing regulations. 20. LEAD-BASED PAINT. This Agreement is subject to the Lead-Based Paint Poisoning Prevention Act (42 USC 4821, et. seq.) and its implementing regulations at 24 CFR Part 35. 21. INSURANCE. In addition to any other insurance or bond required under this Agreement, AHI shall procure and maintain for the duration of this Agreement the following types and limits of insurance ("basic insurance requirements" herein): 21.1 Automobile liability insurance, providing coverage on an occurrence basis for bodily injury, including death, of one or more persons, property damage and personal injury, with limits of not less than One Million Dollars ($1,000,000) per occurrence; and the policy shall: 21.2.1 Provide coverage for owned, non-owned and hired autos.' 21.2.2 Contain an additional insured endorsement in favor of HUD, the CITY, its mayor, council, officers, agents and employees. 21.3 Broad form commercial general liability insurance, ISO form CG00 01 11 85 or 88 providing coverage on an occurrence basis for bodily injury, including death, of one or more persons, property damage and personal injury, with limits of not less than One Million Dollars ($1,000,000) per occurrence; and the policy shall: 21.3.1 Provide contractual liability coverage for the terms of this Agreement. 21.3.2 Contain an additional insured endorsement in favor of HUD, the CITY, its mayor, council, officers, agents, employees and designated volunteers. 21.4 Workers' compensation insurance with statutory limits and employer's liability insurance with limits of not leSs than One Million Dollars ($1,000,000) per occurrence; and the policy shall contain a waiver of subrogation endorsement in favor of HUD, the CITY, its mayor, council, officers, agents, employees and designated volunteers. HOME Investment Partnership Programs December 6. 1999(8:24AM) Page 13 of 17 Pages S:~Agreement~ahififthversion.wpd 21.5 All policies required of AHI shall be primary insurance as to the CITY, its mayor, council, officers, agents, employees, or designated volunteers and any insurance or self-insurance maintained by the CITY, its mayor, council, officers, agents, employees, and designated volunteers shall be excess of AHI's insurance and shall not contribute with it. Additional insured endorsement shall use IS(;) form CG20 10 11 85 (in no event with an edition date later than 1990). 21.6 Insurance is to be placed with insurers with a Bests' rating of no less than A:VII. Any deductibles, self-insured retentions or insurance in lesser amounts, or lack of certain types of insurance otherwise required by this Agreement, or insurance rated below Bests' A:VII, must be deClared prior to execution of this Agreement and approved by the CITY in writing. 21.7 All policies shall contain an endorsement providing the CITY With thirty (30) days written notice of cancellation or material change in policy language or terms. All policies shall provide that there shall be continuing liability thereon, notwithstanding any recovery on any policy. 21.8 The insurance required hereunder shall be maintained until all work required to be performed by this Agreement is satisfactorily completed as evidenced by written acceptance by the CITY. 21.9 AHI shall furnish the City Risk Manager with a certificate of insurance and required endorsements evidencing the insurance required. The CITY may withdraw its offer of contract or cancel this contract if certificates of insurance and endorsements required have not been proVided prior to the execution of this Agreement. 21.10 Full compensation for all premiums which AHI is required to pay on all the insurance described herein shall be considered as included in the prices paid for the various items of work to be performed under the Agreement, and no additional allowance will be made therefor or for additional premiums which may be required by extenSions of the policies of insurance. 21.11 It is further understood and agreed by AHI that its liability to the CITY shall not in any way be limited to or affected by the amount of insurance obtained and carried by AHI in connection with this Agreement. 21.12 Unless otherwise approved by the CITY, if any part of the work under this Agreement is subcontracted, the "basic insurance requirements" set forth aboveshall be provided by, or on behalf of, all Subcontractors even if the CITY has approved lesser insurance requirements for AHI. 21.13 Dwelling Fire Special Form Insurance policy in an amount sufficient to cover all prOject Property, and expressly naming CITY as additional loss payee. HOME Investment Partnership Programs De~.ber6, ,999 (9:2.^M) Page 14 of 17 Pages S:~Agreement~ahifi fthversion.wpd 22. INDEMNITY. AHI shall indemnify, defend, and hold harmless HUD, CITY, its officers, agents and employees against any and all liability, claims, actions, causes of action or demands whatsoever against them, or any of them, before administrative or judicial tribunals of any kind whatsoever, arising out of, connected with, or caused by AHI, AHI's employees, agents, independent contractors, companies, or subcontractors in the performance of this Agreement. 23. ASSIGNMENT. Neither this Agreement, nor any interest in it, may be assigned or transferred by any party without the prior written consent of all the parties. Any such assignment will be subject to such terms and 'conditions as CITY may choose to impose. 24. BINDING EFFECT. The rights and obligations of this Agreement shall inure to the benefit of, and be binding upon, the parties to the Agreement and their heirs, administrators, executors, personal representatives, successors and assigns. 25. REMEDIES. The remedies provided in this Agreement are cumulative and are in addition to any other remedies in law or equity which may be available to CITY. The election of one or more remedies shall not bar the use of other remedies unless the circumstances make the remedies incompatible. 26. NON WAIVER OF DEFAULT. The failure of any party to enforce against another a provision of this Agreement shall not constitute a waiver of that party's right to enforce such a provision at a later time, and shall not serve to vary the terms of this Agreement. 27. MERGER AND MODIFICATION. This Agreement sets forth the entire Agreement between the parties and supersedes all other oral or written representations. This Agreement may be modified only in a writing approved by the City Council and signed by all the parties. 28. SEVERABILITY AND PARAGRAPH HEADINGS. The invalidity of any provision of this Agreement, as determined by a court of competent jurisdiction, shall in no way effect the validity of any other provision hereof. If any term, provision, or condition of this Agreement is determined, by a court of competent jurisdiction, to be void, invalid, or unenforceable, the parties intend the remainder to continue in full force. The parties intend interpretation of the remainder to be as if the parties negotiated this Agreement without the void, invalid, or unenforceable terms, provisions, or conditions. The "headings" or "titles" of paragraphs (or sections) of this Agreement are for convenience only, and are not to.be considered part of the Agreement. HOME Investment Partnership Programs December6, 1999(8:24AM) Page 15 of 17 Pages S:~Agreement~ahififthversion.wpd 29. INDEPENDENT CONTRACTOR. This Agreement calls for the performance of the services of AHI as an independent contractor. AHI is not an agent or employee of the CITY for any purPose and is not entitled to any of the benefits provided by CITY to its employees. This Agreement shall not be construed as forming a partnership or any other association with AHI other than that of an independent contractor. 30. FORUM. Any lawsuit pertaining toany matter arising under, or growing out of, this Agreement shall be instituted in Kern County, California. 31. CORPORATE AUTHORITY. Each individual signing this Agreement on behalf of entities represent and warrant that they are, respectively, duly authorized to sign on behalf of the entities and to bind the entities fully to each and all of the obligations set forth in this Agreement. ~. 32. TERMINATION OF AGREEMENT. This Agreement may be terminated by any party upon thirty (30) days written nOtice, served by mail or personal service, to all other parties. 33. THIS AGREEMENT SURVIVES CLOSE OF ESCROW. This Agreement, and all of its terms and conditions, shall survive the close of any of the escrows. 34. EXECUTION. This Agreement is effective upon execution. It is the product of negotiation and all parties are equally responsible for authorship of this Agreement. Section 1654 of the California Civil Code shall not apply to the interpretation of this Agreement. 35. NOTICES. All notices relative to this Agreement shall be given in writing and shall be personally served or sent by certified or registered' mail and be effective upon actual personal service or depositing in the United States mail. The parties shall be addressed as follows, or at any other address designated by notice: CITY: City of Bakersfield City' Hall 1501 Truxtun Avenue Bakersfield, California 93301 HOME Investment Partnership Programs December6, 1999 (8:24AM) Page 16 of 17 Pages S:~Agreement~ahififthversion.wpd AH I: Executive Director Affordable Homes, Inc. P O Box 900 Avila Beach, California 93424 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed the day and year first above written. "CITY" "AHI" CITY OF BAKERSFIELD AFFORDABLE HOMES, INC. By By l~ BOB PRICE HAL ROSEN Mayor Executive Director APPROVED AS TO CONTENT: By JOHN F. WAGER, JR. Economic Development Director APPROVED AS TO FORM: BART J. THILTGEN City Attorney By. JANICE SCANLAN Deputy City Attorney COUNTERSIGNED: By GREGORY J. KLIMKO Finance Director HOME Investment Partnership Programs December6, 1999(8:24AM) Page 17 of 17 Pages S:~Agreement~ahififlhversion.wpd EXHIBIT "A" PROJECT COMPLETION PROJECTION COMPLETION means that all necessary title transfer requirements and construction work have been performed and the project in HUD's judgement complies with the requirements of this part; the final drawdown has been disbursed for the project; and a Project Completion Report has been submitted and processed in the Cash and Information System as prescribed by HUD. For tenant-based rental assistance, the final drawdown has been disbursed for the project and the final payment certification has been submitted and processed in the Cash and Management Information System as prescribed by HUD. HOME Investment Partnership Programs Decernber6, 1999 (8:24AM) --Page A-1-- S:V~greement~ahififthversion.wpd EXHIBIT "B" RECORDING REQUESTED BY, AND WHEN RECORDED, RETURN TO: City of Bakersfield 1501 Truxtun Avenue Bakersfield, CA 93301 Free Recording in Accordance With Section 6103 of the California Government Code SECOND DEED OF TRUST THIS SECOND DEED OF TRUST ("Security Instrument") is made on The trustor is AFFORDABLE HOMES, INC., a California non-profit, public- benefit corporation ("Borrower"). The trustee is ("Trustee"). The beneficiary is THE CITY OF BAKERSFIELD, A MUNICIPAL CORPORATION, and whose address is 1501 TRUXTUN AVENUE, BAKERSFIELD, CALIFORNIA 93301 ("City"). Borrower owes City the principal sum of DOLLARS (U.S. $ ). · ' ' This debt is evidenced by City of Bakersfield Agreement No. dated __ ("the Agreement"). This Security Instrument secures to City: (a) the repayment of the debt under certain circumstances, (b) the payment of all other sums, with interest, advanced under paragraph 5 to protect the security of this Security Instrument; and (c) the performance of Borrower's covenants and agreements under this Security Instrument and the Agreement. For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property located in Kern County, California ("the Property"). SEE ATTACHED LEGAL DESCRIPTION which has the address of , Bakersfield, California 933 ("Property Address"). TOGETHER WITH all the improvements now or hereafter erected on the Property, and all easements, appurtenances, and fixtures now or hereafter a part of the Property. All replacements and additions shall also be covered by this Security Instruments. HOME Investment Partnership Programs o~r.~r6, ~ (8:2.~) -- Page B-1 -- S:'~Agreement~ahififthversion.wpd BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant and convey the Property and that the Property is unencumbered, except for encumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and ,demands, subject to any encumbrances of record. Borrower and City coVenant and agree as follows: 1. Payment of Principal. Borrower shall promptly pay when due the principal of the debt evidenced by the Agreement. 2. Subordinatiom This Second Deed of Trust is subordinate to that the Deed of Trust recorded the same date as this Second Deed of Trust, securing a loan on the Property with as Trustee and as Beneficiary. 3. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines and impositions attributable to the Property Which may attain priority over this Security Instrument, and leasehold payments or ground rents, if any. Borrower shall pay these obligations on time directly to the person owed payment. Borrower shall promptly furnish to City all. notices of amounts to be paid under this paragraph. If Borrower makes these payments directly, Borrower shall promptly furnish to City' receipts evidencing the payments. Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to City, (b) contests in good faith the lien by, or defends against enforcement of the lien in, legal proceedings which in the City's opinion operate to prevent the enforcement of the lien; or (c) secures from the holder of the lien an agreement satisfactory to City subordinating the lien to this Security Instrument. If City determines that any part of the Property is subject to a lien'which may attain priority over this Security Instrument, City may give Borrower a notice identifying the lien. Borrower shall satisfy the hen or take one or more of the actions set forth above within 10 days of the giving of notice. 4. Fire, Flood and Other Hazard Insurance. Borrower shall insure all improvements now existing or hereafter erected on the Property against any hazards, casualties and contingencies, including floods and fire. This insurance shall be maintained in the amounts and for the period that City requires~ The insurance carrier providing the insurance shall be chosen by Borrower subject to City's approval which shall not be unreasonably withheld. If Borrower fails to maintain coverage described above, City may, at City's option, obtain coverage to protect City's rights in the Property in accordance with paragraph 5. HOME Investment Partnership Programs DecamP,r6, ~gg9(8:2.,~) -- Page B-2 S:~Agreement~ahififthversion.wpd -- ,, All insurance policies and renewals shall be acceptable to City and shall include a standard mortgage clause. City shall have the right to hold the policies and renewals. If City requires, Borrower shall promptly give to City all receipts of paid premiums and renewal notices. In the event of loss, Borrower shall give prompt notice to the insurance carrier and City. City may make proof of loss if not made promptly by Borrower. 5. Preservation, Maintenance and Protection of the Property. Borrower shall not destroy, damage or impair the Property, allow the Property to deteriorate, or commit waste on the Property. Borrower shall be in default if any forfeiture action or proceeding, whether civil or criminal, is begun that in City's good faith judgment could result in forfeiture of the Property or otherwise materially impair the lien created by this Security Instrument or City's security interest. Borrower may cure such a default and reinstate, as provided in paragraph 10, by causing the action or proceeding to be dismissed with a ruling that, in City's good faith determination,, precludes forfeiture of the Borrower's interest in the Property or other material impairment of the lien created by this Security Instrument or City's security interest. 6. Borrowers Compliance; Protection of City's Rights in the Property. Borrower shall comply with a Program requirements of the "HOME Investment Partnerships Act at 42 USC 1274.1 et. seq. of the Cranston-Gonzalez National Affordable Housing Act (24 CFR Part 92) and. amendments, including but not limited to the following: Period ofaffordability. The Property shall meetthe HOME Program "affordability' requirements for a period of five/twenty years from the date of recordation of this Security Instrument. This provision shall terminate upon payment in full of the grant amount or upon expiration of the Period of Affordability. if Borrower fails to perform the covenants and agreements contained in this Security InStrument or the Agreement, or there is a legal proceeding that may significantly affect City's rights in the Property (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture or to enforce laws or regulations), then City may do and pay for whatever is necessary to protect the value of the Property and City's rights in the Property. City's actions may include paying any sums secured by a lien which has priority over this Security Instrument, appearing in court, paying reasonable attorneys' fees and entering on the Property to make repairs. Although City may take action under this paragraph, City does not have to do so. Any amounts disbursed by City under this paragraph shall become additional debt of Borrower secured by this Security Instrument. 7. Condemnation. After satisfaction of any claim by a senior lienholder, the proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of any part of the Property, or for conveyance in place of condemnation, are hereby assigned and shall be paid to City to the extent of the full HOME Investment Partnership Programs ~,~,.~, ~. ~ (~:~.~) ,_~Da...e S:~Agreement~lhif~hversion.wpd .... B-3 amount of the indebtedness that remains unpaid under the Agreement and this. Security Instrument. Any excess proceeds over an amount required to pay all outstanding indebtedness under the Agreement and this Security Instrument shall be paid to the entity legally entitled thereto. 8. Inspection. City or its agent may make reasonable entries upon and inspections of the Property. City shall give Borrower notice at the time of or prior to an inspection specifying reasonable cause for the inspection. 9. Grounds for Acceleration of Debt. (a) Default. City may, require immediate payment.in full of all sums secured by this Security Instrument if: (i) Borrower defaults by failing, for a period of thirty days, after having been given written notice, to perform any other obligations contained in this Security Instrument. (ii) Borrower defaults by failing,'for a period of thirty days, after having been given written notice, to perform anY other obligations contained in the Agreement. (b) Transfer of the Property or a Beneficial Interest in Borrower. If all or any part of the Property or any interest in it is sold or transferred (or if a beneficial interest in Borrower is sold or transferred and Borrower is not a natural person) to a person or entity not authorized by the Agreement, without City's prior written consent, City may, at its option, require immediate 'payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by City if exercise is prohibited by federal law as of the date of this Security Instrument. In the event that, via a deed of trust recorded prior to this deed of trust, title to Property is acquired by a mortgagee or the Department of Housing and Urban Development by a deed in lieu of foreclosure, and assignment of the mortgage to the Department of Housing and Urban Development, the restrictions on sale or transfer shall terminate and have no further force and effect. If City exercises this option, City shall give Borrower notice of acceleration. The notice shall provide a period of not less than thirty (30) days from the date the notice is delivered or mailed within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, City may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. 10. Borrower's Right to Reinstate. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earlier of- (a) 5 days (or such other period as HOME Investment Partnership Programs December6, 1999 (8:24AM) --Page B-4-- S:tAgreement~ahififthversion.wpd applicable law may specify for reinstatement) before sale of the Property pursuant to any power of sale contained in this Security Instrument; or (b) entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower: (a) pays City all sums which then would be due under this Security Instrument and the Agreement as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorneys' fees; and (d) takes such action as City may reasonably require to assure that the lien of this Security Instrument, City's rights in the Property and Borrower's obligation to pay the sums secured by this Security Instrument shall continue unchanged. Upon reinstatement by Borrower, this Security Instrument and the obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apPly in the case of acceleration under paragraph 8(b). 11. Successors and Assigns Bound; Joint and Several Liability; Co- signers. The covenants and agreements of this Security Instrument shall bind and benefit the successors and assigns of City and Borrower, subject to the provisions of paragraph 9(b). Borrower's covenants and agreements shall be joint and several. Any Borrower who co-signs this Security Instrument: (a) is co-signing this Security Interest only to mortgage, grant and convey that Borrower's interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums security by this Security Instrument; and (c) agrees that City and any other Borrower may agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Agreement without that Borrower's consent. 12. Notices. Any notice to Borrower provided for in .this Security Instrument shall be given by delivering it or by mailing it by first class mail unless applicable law .... requires use of another method. The notice shall be directed to Borrower at: P.O. Box 900, Avila Beach, California 93424. Any notice to City shall be given by first class mail to City's address stated herein or any other address CitY designates by notice to Borrower. Any notice provided for in this Security Instrument shall be deemed to have been given to Borrower or City when given as provided in this paragraph. 13. Governing Law; Severability. This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located. In the event that any provision or clause of this Security Instrument or the Agreement conflicts with applicable law, such conflict shall nOt affect other provisions of this Security Instrument or the Agreement Which can be given effect without the conflicting provision. To this end · the provisions of this Security Instrument and the Agreement are declared to be severable. 14. Borrower's Copy. Borrower shall be given one cOnformed copy of the Agreement and of this Security Instrument. HOME Investment Partnership Programs o~.~r6, ~999 ~9:2.,~) -- Page B-5 -- S:~Agreement~ahififthversion.wpd 15. Hazardous Substances. Borrower shall not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property that is in violation of any Environmental Law. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property. Borrower shall promptly give City written notice of any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge. If Borrower learns, or is notified by any governmental or regulatory authority, that any removal or other remediation of any Hazardous Substance affecting the Property is necessarY, Borrower shall promptly take all necessary remedial actions in accordance with Environmental Law. As used in this paragraph, "Hazardous Substances" are those substances defined as toxic or hazardous substances by Environmental Law and the following substances: gasoline, kerosene,, other flammable .or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials. As used in this paragraph, "Environmental Law" means federal laws and laws of the jurisdiction where the Property is located that relate to health, safety or environmental protection. ' 16. Assignment of Rents. Subordinate to the rights of any senior lienholder, Borrower unconditionally assigns and transfers to City all the rents and revenues of the Property. Borrower authorizes City or City's agent to collect the rents and revenues and hereby directs each tenant of the Property to pay the rents to City or City's agents. However, prior-to City's notice to Borrower of Borrower's breach of any covenant or agreement in the Security Instrument, Borrower shall collect and receive all rents and revenues of the Property as trustee for the benefit of City and Borrower. This assignment of rents constitutes an absolute assignment and not an assignment for additional security only. If City gives notice of breach to Borrower: (a) all rents received by Borrower shall be held by Borrower as trustee for benefit of City, only to be applied to the sums secured by this Security Instrument, (b) City shall be entitled to collect and receive all of the rents of the Property; and (c) each tenant of the Property shall payail rents due and unpaid to City or City's agent on City's written demand to the tenant. City shall not be required to enter Upon, take control of or maintain the Property before or after giving notice of breach to Borrower. However, City or a judicially appointed receiver may do so at any time there is breach. Any application of rents shall not cure or HOME Investment Partnership Programs December 6, 1999 (8:24AM) S:~Agreement~ahir~hversion.wpd -- "'~,-a~e B-6 -- waive any default or invalidate any other right or remedy of City. This assignment of rents of the Property shall terminate when the debt securedby this Security Instrument is paid in full. 17. Foreclosure Procedure. If City requires immediate payment in full under paragraph 8, City may invoke the power of sale and any other remedies permitted by applicable law. City shall be entitled to collect all expenses incurred in pursuing the remedies provided in this paragraph, including, but not limited to, reasonable attorneys' fees and costs of title evidence. If City invokes the power of sale, City shall execute or cause Trustee to execute a written notice of the occurrence of an event of default and of City's election to cause the Property t be sold. Trustee shall cause this notice to be recorded in each county in which any part of the Property is located. City or Trustee shall mail copies of the notice as prescribed by applicable law to Borrower and to other persons prescribed by applicable law. Trustee shall give public notice of sale to the persons and in the manner prescribed by applicable law. After the time required by applicable, law, Trustee, without demand on Borrower, shall sell the Property at public auction to the highest bidder at the time and place and under the terms designated in the notice of sale in one or more parcels and in any order Trustee determines. Trustee may postpone sale of all or any parcel of the Property by public announcement at the time and place of any previously scheduled sale. City or its designee may purchase the Property at any sale. Trustee shall deliver to the purchase Trustee's deed conveying the Property with..o_.ut any covenant or warranty, express or implied. The recitals in the Trustee's deed shall be prima facie evidence of the truth of the statements made therein. Trustee shall apply the proceeds of the sale in the following order; (a) to all expenses of the sale, including, but not limited to, reasonable Trustee's and attorneys' fees; (b) to all sums secured by this Security Instrument; and (c) any excess to the person or persons legally entitled to it. 18. Reconveyance. Upon payment of all sums secured by this Security Instrument, City shall request Trustee to reconvey the Property and shall surrender this Security instrument and all agreements evidencing debt secured by this Security Instrument to Trustee, Trustee shall reconvey the Property without warranty and without charge to the person or persons legally entitled to it. Such person or persons shall pay any recordation costs. 19. Substitute Trustee. City, at its option, may from time to time appoint a successor trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by City and recorded in the office of the Recorder of the county in which the Property is located. The instrument shall contain the name of the original City, Trustee and BorroWer, the'book and page where this Security Instrument is recorded and HOME Investment Partnership Programs ~,~m~,r6, ~(8:24~) -- Page B-7 -- S:~,greement~ahififthversion.wpcl the name and address of the successor trustee. Without conveyance of the Property, the successor trustee shall succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law. This proCedure for substitution of trustee shall govern to the exclusion of all other provisions for substitution. 20. Request for Notices. Borrower requeSts that copies of the notices of default and sale be sent to Borrower's address which is P.O. Box 900, Avila Beach, California 93424. BY SIGNING BELOW, Borrower accepts and agrees to 'the 'terms and covenants contained in this Security Instrument and recorded with it. (Borrower) NOTARY INFORMATION HOME Investment Partnership Programs December6, 1999(8:24AM) --Page B-8-- S:~Agreemenl~ahififthversion.wpd EXHIBIT "C" RECORDING REQUESTED BY, AND WHEN 'RECORDED, RETURN TO: City of Bakersfield 1501 Truxtun Avenue Bakersfield, CA 93301 Free Recording in Accordance With Section 6103 of the California Government Code DECLARATION OF RESTRICTIONS RECITALS This Declaration of Restrictions is made and entered into on .... . ............. ,.b,y,,AFFORDABLE HOMES, INC., a California non-profit, public-benefit corporation ("AHI' herein). This Declaration is an exhibit to that certain "HOME Investment Partnerships Program" agreement between AHI and the City of Bakersfield, a municipal corporation. Said agreement is "Agreement No. "in the files of City's Clerk. This Declaration of Restrictions affects that certain land (hereinafter called "Project Property") in the City of Bakersfield, Kern. County, California, having the following legal description: SEE LEGAL DESCRIPTION OF PROJECT PROPERTY ATTACHED This Declaration of Restrictions shall be, and is intended to be effective for a period of five/twenty years from the date of Project Completion as that term is defined herein ("Period of Affordability"). After the Period of Affordability has expired, the Project Property shall expire and become extinguished. NOW, THEREFORE, for value received, AHI, on behalf of itself and its successors HOME Investment Partnership Programs December 6, 1999 (8:24AM) S:~Agreement~ahififthversion.wpd -- Page C-1 -- and assigns, hereby declares and adopts the following restrictions as to the Project Property, for the benefit of the Project Property, and acknowledge and assert that said restrictions touch' and concern the Project Property: Section 1. Definitions (a) For purposes of this Declaration, the "Kern County median income" shall be determined pursuant to the regulations published by the United States Department of Housing and Urban Development ("HUD") or its successor. (b) For purposes of this Declaration, the term "Low-lncome.Homebuyer" means persons or families whose annual incomes do not exceed 80 percent of the Kern County median income. (c) For the Purposes of this Declaration, "Period of Affordability" means the five or twenty-year period during which the Project Property must remain affordable to Low Income Homebuyers and during which time the Low-Income Homebuyers'will occupy the Project Property as the principal residence. (d) For the purposes of this Declaration, "Principal Residence'' means the address where the Low-Income Homebuyer resides more than six (6) months of the calendar year. (e) For the purposes of this Declaration, "Project Completion" means that all necessary title transfer requirements and construction work have been performed; the project complies with the requirements of 24 CFR 92; the final drawdown has been disbursed for the project; and the project completion information has been entered in the disbursement and information system established by HUD. Section2. Project Property Shall Remain Affordable to Low-lncome Homebuyers The Project Property will be affordable to LoW-Income HomebuYers throughout the Period of Affordability. If at any time during the Period of Affordability, the Project Property fails to be affordable to Low-Income Persons, the owne~r of the Property Property shall repay the City of Bakersfield all HOME Program funds expended on the Project Property pursuant to Agreement No. Section 3. Occupied as Principal Residence · AHI will only convey the Project Property to a 'Low-Income Homebuyer who will occupy the Project Property as the Principal Residence. If this subsequent owner fails to occupy the Project Property as the Principal Residence, the subsequent owner will either repay the City of Bakersfield all HOME Program funds expended on the Project Property Pursuant to Agreement No. , or resell the Project Property to another HOME Investment Partnership Programs December6, 1999 (8:24AM) --Page C-2 -- S:~Agreement~ahififthversion.wpd eligible Low-Income Homebuyer. Section 4. Record Keeping AHI shall obtain, complete, and maintain on file, an "income certification," dated immediately before their initial sale of the Project Property. Section 5. Independent and Severable Provisions If a court of competent jurisdiction should hold any part of this Declaration to be unenforceable or invalid, such holding shall not render any other part unenforceable or invalid. Each part of this Declaration is severable and independently enforceable to the fullest extent permitted by law. Section 6. Nondiscrimination. AHI and all subsequent owners shall not discriminate against or segregate any person, or group of persons, on the basis of race, color, religion, national origin, sex, sexual orientation, AIDS, AIDS-related condition, age, marital status, disability or handicap, or Vietnam Era veteran status, in the sale, transfer, use, occupancy or enjoyment of the Project Property. AFFORDABLE HOMES, INC. By Hal Rosen, President s:~edcd~cdbg~agrs~rnercy.exi ATTEST HOME Investment Partnership Programs D~m~r6, ~9~(6:2.~) -- Page C-3-- S:~Agreement~ahiflfthversion.wpd EXHIBIT "D" CERTIFICATION REGARDING LOBBYING The undersigned certifies, to the best of his or her knowledge and belief, that: (1) No federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. (2) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its inStructions. (3) The undersigned shall require that the language of this certification be included in the award documents for all sub-awards at all tiers (including subcontractors, sub-grants, and contracts under grants, loans, and cooperative agreements) and that all sub-recipients shall certify and disclose accordingly. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of"this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. Date Executive Director HOME Investment Partnership Programs December 6, 1999 (9:24AM) --Page D-1 S:~Agreement~ahif'~hversion.wpd -- INSTRUCTIONS FOR C~)MPLETION OF SF-LLL DISCLOSURE OF LOBBYING ACTIVITIES This disclosure form shall be completed by the reporting entity, whether: subawardee or prime Federal recipient, at the Initiation or receipt of a covered Federal action, or a material change to a previous filling, pursuant to title 31 U.S.C. section 1352. The filling of a form is required for each payment or agreement to make payment to any lobbying entity for influencing or attempting to influence an officer or employee of any agency, a Member. of Congress, an officer of employee of Congress, or an employee of a member of Congress in connection with a covered Federal action. Use the SF-LLL-A Continuation Sheet for additional information if the space on the form is adequate. Complete all items that apply for both the initial filing and material change report. Refer to the implementing guidance published by the Office of Management and Budget for additional information. 1. Identify the type of covered Federal action for which lobbying activity is and/or has secured to influence the outcome of covered Federal action. 2. Identify the status of the covered Federal action. 3. Identify the appropriate classification on this report. If this is a follow-up report caused by a material change to the information previously reported, enter the year and quarter in which the change occurred. Enter the date of the last previously submitted report by this reporting entity for this covered Federal action. 4. Enter the full name, address, city, state and zip code of the reporting entity, Include Congressional District, if known. Check the appropriate classification of the reporting entity that designates if it is, or expects to be, a prime or subaward recipient. Identity the tier of the subawardee, e.g., the first subawardee of the prime is the 1st their. Subawards include but are not limited to subcontractors, subgrants and contract awards under grants. 5. If the organization filling the report in item 4 checks "Subawardee," then enter the full name, address, city, state and zip code of the prime Federal recipient. Include Congressional District, if known. 6. Enter the name of the Federal agency making the award or loan commitment. Include at least one organizational level below agency name, if known. For example, Department of Transportation, United States Coast Guard. 7. Enter the Federal pi'ogram name or description for the covered Federal action (item 1). If known enter the full Catalog of Federal Domestic Assistance (CFDA) number for grants, cooperative agreements, loans, and loan commitments. 8.~ 'Enter the most appropriate Federal identifying number available for the Federal action identified in item 1 (e.g., Request for Proposal (RFP) number, invitation for Bid (IFB) number, grant announcement, number, the contract, grant, or loan award number, the application/proposal control number assigned by the Federal agency). Include prefixes, e.g., "RFP-DE-90-001." 9. For a covered Federal action where there has been an award or loan commitment by the Federal agency, enter the Federal amount to the award/loan commitment for the prime entity identified in Item 4 or 5. 10. (a) Enter the full name, address, city, state and zip code of the lobbying entity engaged by the reporting entity identified in item 4 to influence the covered Federal action. (2) Enter the full names of the individual(s) performing services, and include full address if different from 19(a). Enter Last Name, First'Name, and Middle Initial (M). 11. Enter the amount of compensation paid or reasonably to be paid by the reporting entity (item 4) to the lobbying entity (item 10). Indicate whether the payment has been made (actual) or will be made (planned). Check all boxes that apply. If this is a material change report, enter the cumulative amount of payment made or planned to be made. 12. Check the appropriate box(es). Check all boxes that apply. If payment is made through an in-kind contribution, specify the nature and value of the in-kind payment. 13. Check the appropriate box(es). Check all boxes that apply. If other, specify nature. 14. Provide a specific and detailed description of the services that the lobbyist has performed, or will be expected to perform, and the date(s) of any services rendered. Include all preparatory and related activity, not just HOME Investment Partnership Programs December 6, 1999 (8:24AM) S:~Agreernent~ahir~hversion.wpd -- Page D-2 -- time spent in actual contract with Federal officials. Identify the Federal official(s) or employee(s) contacted or the officer(s), employee(s), or Member(s) or Congress that were contacted. 15. Check whether or not a SF-LLL-A Continuation Sheet(s) is attached. 16. The certifying official shall sign and date the form, print his/her name, title and telephone number. Public reporting burden for this collection information is estimated to average 30 minutes per response, including time for reviewing Instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding the burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Office of Management and Budget. Paperwork Reduction Project (0348-0046), Washin~lton, D.C. 20503. HOME Investment Partnership prOgrams December 6. 1999 (8:24AM) S:~Agreemenl~ahifdthversion.wpd -- ~'-rage D-3 -- DISCLOSURE OF LOBBYING ACTIVITIES Complete this form to disclose Lobbying activities pursuant to 31 U.S.C. 1352 1. Type of Federal Action: 2. Status of Federal Action: 3. Report Type: ~1 contract ~3 bid/offer/application ~3 initial [3 grant ~1 initial award I~l material change ~ cooperative agreement ~3 post award ~1 loan For Material Change Only: ~ loan guarantee year .quarter ~ loan insurance date of last report 4. Name and Address of Reporting Entity: 5. If Reporting Entity in No. 4 is Subawarded, [3 Prime ~3 Subawardee & tier ' Enter Name and Address of Prime: Congressional District Congressional District: 6. Federal Department/Agency: 7. Federal Program Name/Description: CFDA Number 8. Federal Action Number: 9. Award Amount: $ 10a. Name and Address of Lobbying Entity: 10b. Individual(s) Performing Services: (If individual, last name, first name, MI) (Includes address if different from No. 10a.) 11. Amount of Payment 13. Type of payment: (check all that apply) ~3 retainer $ ~1 actual ~3 ~3 one-time fee planned ~3 commission ~3 contingent fee 12. Form of Payment: ~ deferred [3 other, specify:' ~ Cash nature ~ In-kind, specify value .. 14. Brief Description of Services Performed or to be performed and Date(s) of Service, including officer(s), employee(s), or member(s) contacted, for Payment indicated in item 11: 15. Continuation Sheet(s) attached: ~3 Yes ~1 No (Attach Continuation Sheet(s) if necessary) HOME Investment Partnership Programs December6, 1999(8:24AM) --Page D-4-- S:~Agreement~ahir~thversion.wpd 4. Name and Address of Reporting Entity: 5. If Reporting Entity in No. 4 is Subawarded, D Prime ~3 Subawardee & tier Enter Name and Address of Prime: Congressional District Congressional District: This disclosure is required pursuant to Title 31 United States Code Section 1352. This disclosure of lobbying activities is a material representation of fact upon 16. Signature: which reliance was placed the tier above when this transaction was made or entered into. This information will be reported to the Congress semi-annually and will Print Name! be available for public inspection. Any person who fails to file the required disclosure shall be subject to a civil penalty of not less than $10,000 and not more Title: than $100,000 for each failure. Telephone No.: Date: Federal Use Only: Standard Form LLL HOME Investment Partnership Programs December 6, 1999 (8:24AM) S:~gre.me.,~h~,hver.~on.w~ -- ~'-rage D-5 -- EXHIBIT "E" EQUAL OPPORTUNITY (48 CFR 52.22-26) (April 1984) (a) If, during any 12-month period (including the 12 months preceding the award of this contract), the Contractor has been or is awarded nonexempt Federal contracts and/or subcontracts that have an aggregate value in excess of $10,000, the Contractor shall comply with subparagraphs (b)(1) through (11 ) below. Upon request, the Contractor shall provide information necessary to determine the applicability of this clause. (b) During performing this contract, the Contractor agrees as follows: 1. The Contractor shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. 2. The Contractor shall take affirmative action to ensure that applicants are emplOyed, and that employees are treated during employment, without regard to their race, color, religion, sex, or national origin. This shall include, but not be limited to (i) employment, (ii) upgrading, (iii) demolition, (iv) transfer, (v) recruitment or recruitment advertising, (vi) layoff compensation, and (viii) selection for training, including apprenticeship. 3. The Contractor shall post in conspicuous places available to employees and applicants for employment the notices to be provided by the Contracting Officer that explain this clause. 4. The Contractor shall, in all solicitations or advertisement for employees placed by or on behalf of the Contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin. 5. The Contractor shall send, to each labor union or representative of workers with which it has a collective bargaining agreement or other contract or understanding, the notice to be provided by the Contracting Officer advising the labor union or workers' representative of the Contractor's commitments under this clause, and post copies of the notice in conspicuous places available to employees and applicants for employment. 6. The Contractor shall comply with Executive Order 11246, as amended, and the rules, regulations, and orders of the Secretary of Labor. 7. The Contractor shall furnish to the contracting agency all information required by Executive Order 11246, as amended, and by the rules, regulations, and HOME Investment Partnership Programs December 6, 1999 (8:24AM) s:~g,~..,~.hi,,hvo,.~o..,,~ -- Page E-1 -- orders of the Secretary of Labor. Standard Form 100 (EEO-l), or any successor form, is the prescribed form to be filed within 30 days following the award, unless filed within 12 months preceding the date of award. 8. The Contractor shall permit access to its books, records, and accounts by the contracting agency of the Office of Federal Contract Compliance Programs (OFCCP) for the purposed of investigation to ascertain the Contractor's compliance with the applicable rules regulations, and orders. 9. If the OFCCP determines that the Contractor is not in compliance with this clause or any rule, regulation, or order of the Secretary of Labor, this contract ' may be canceled, terminated, or suspended in whole or in part and the Contractor may be declared ineligible for further Government contracts, under the procedures authorized in Executive Order 11246, as amended. In addition, sanctions may be imposed and remedies invoked against the Contractor as provided in Executive Order 11246, as amended, the rules, regulations, and orders of the Secretary of Labor, or as otherwise provided by law. 10. The Contractor shall include the terms and conditions of subparagraph (b)(1) through (11) of this clause in every subcontract or purchase order that is not exempted by the rules, regulations, or orders of the Secretary of Labor issued under Executive order 11246, as amended, so that these items and conditions will be binding upon each subcontractor or vendor. 11. The Contractor shall take such action with respect to any subcontract or purchase order as the contracting agency may direct as a means of enforcing these terms and conditions, including sanctions for noncompliance; provided, that if the Contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a .result of any direction, the Contractor may request the United States to enter into the litigation to protect the interests of the United States. HOME Investment Partnership Programs D~m~,,6. ~999 (8:2,,~) -- Page E-2 -- S:~,greement~ahififthversion,wpd EXHIBIT "F" NONDISCRIMINATION IN FEDERALLY ASSISTED PROGRAMS OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (24 CFR, Subtitle A, Part 1, Section 1.5 Assurances Required) 1.5 Assurances Required (a) General (1) Every contract for Federal financial assistance to carry out a program or activity to which this Part 1 applies, executed on or after January 3, 1965, and every application for such Federal financial assistance submitted on or after January 3, 1965, shall, as a condition to its approval and the extension of an Federal financial assistance pursuant to such contract or application, contain or be conducted and the housing, accommodations, facilities, services, financial aid, or other benefits to be provided will be operated and administered in compliance with all requirements imposed by or pursuant to this Part 1. In the case of a Contract or application where the Federal financial assistance is to provide or is in the form of personal property or real property or interest therein structures thereon, the assurance shall obligate the recipient or, in the case of a subsequent transfer, the transferee, for the period during which the property is used for a purpose for which the Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits, or for as long as the recipient retains ownership or possession of the property, whichever is longer. In all other cases the assurance shall obligate the recipient for the period during which Federal financial assistance is extended pursuant to the contract or .application. The responsible Department official shall specify the form of the foregoing assurance for such program or activity, and the extent to which like assurances will be required of subgrantees, contractors and subcontractors, transferees, successors in Interest, and other participants of the program or activity. Any such assurance shall include provisions which give the United States a right to seek its judicial enforcement. (2) In the case of real property, structures or improvements thereon, or interests therein,, acquired through a program of Federal financial assistance 'the instrument affecting any disposition by the recipient of such real property, structures or improvements thereon, or interests therein, shall contain a covenant running with the land assuring nondiscrimination for the period during which the real property is used for a purpose for which the Federal financial assistance is extended or for another purpose' involving the provision of similar services or benefits. In the case where Federal financial assistance is provided in the form of a transfer of real property or interests therein from the Federal Government, the instrument affecting or recording the transfer shall contain such a covenant. (3) In program receiving Federal financial assistance in the form, or for the acquisition, of real property or an interest in real property, to the extent that rights to space on, over, or under any such property are included as part of the program receiving HOME Investment Partnership Programs December6, 1999 (8:24AM) --Page F-1-- S:V~kgreementXahififthversion.wpd such assistance, the nondiscrimination requirements of this Part 1 shall extend to any facility located wholly or in part in such space. (b) Pre-existing contracts - funds not disbursed. In any case where a contract for Federal financial assistance, to carry out a program or'activity to which this Part 1 applies, has been executed prior to January 3, 1965, and the funds have not been fully disbursed by the Department, the responsible Department official shall,' where necessary to effectuate the purposes of this Part 1, require an assurance similar to that provided in paragraph (a) of this section as a condition to the disbursement of further funds. (c) Pre-existing contract - periodic payments. In any case where a contract for Federal financial assistance, to carry out a program or activity to, which this Part 1 applies, has been executed prior to January 3, 1965, and provides for periodic payments for the continuation of the program or activity, the recipient shall, in connection with the first application for such periodic payments on or after January 3, 1965: (1) Submit a statement that the program or activity is being conducted in compliance with all requirements imposed by or pursuant to this Part 1; and (2)' The assurance required with respect to an institution of higher education, hospital, or any other institution, insofar as the assurance relates to the institution's practices with respect to admission or other treatment of persons as students, patients, or clients of the institution or to the opportunity to participate in the provision of services or other benefits to such persons, shall be applicable to the entire institution unless the applicant establishes, to the satisfaction of the responsible Department official, that the institution's practices in designated parts or programs of the institution will in no way affect its practices in the program of the institution for which Federal financial assistance is sought, or the beneficiaries of or participants in such program. If in any such case the assistance sought is for the construction of a facility or part of a facility, the assurance shall in any event extend to the entire facility and to facilities operated in connection therewith. (e) Elementary and secondary schools. The requirements of this section with respect to any elementary or secondary school or school system shall be deemed to be satisfied or such school or school system (1) is subject t° a final order of a court of the United States for the desegregation of such school or school system, and provides an assurance, that it will comply with such order,' including any future modification of such order, or (2) submits a plan for the desegregation of such school or school system which the responsible official of the Department of Health and Human Services determines is adequate to accomplish the purposes of the Act and this'Part 1 within the earliest practicable time, and provides reasonable assurance that it will carry out such plan. HOME Investment Partnership Programs December 6, 1999 (8:24AM) S:~Agreement~ahififthversion.wpd -- ~-ra~le F-2 -- Exhibit "G" Rehabilitation Act of 1973 Public law 93-112 NONDISCRIMINATION UNDER FEDERAL GRANTS Section 504. Not otherwise qualified handicapped individual in the United States, as defined in section 7(6), shall, solely be reason of his handicap, be exclUded from the participation in, be denied the benefits of, or be subject to discrimination under any program or activity receiving Federal Financial assistance. Approved September 26, 1973. O-! EXHIBIT "H" SECTION 3 TRAINING EMPLOYMENT AND BUSINESS OPPORTUNITY A.. The work to be performed underthis contract is on a project assisted under a program providing direct Federal financial assistance from the Department of Housing and Urban Development and is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u. Section 3 requires that to the greatest extent feasible opportunities for training and employment be given to lower inCome persons residing within the unit of local.government or the metropolitan area (or non-metropolitan County), as determined by the Secretary of Labor, in which the project is located and contracts for work in connection with the project be awarded to business concerns residing in the same metropolitan area (or non-metropolitan County) as the project. B. The parties to this contract will comply with the provisions of said Section 3 and the regulations issued pursuant thereto by the Secretary of Housing and Urban Development set forth in 24 CFR 135, and all applicable rules and orders of the Department issued thereunder prior to the execution of this contract. The parties to this contract certify and agree that they are under no contractual or other disability which would prevent them from~complying with these requirements. C. The contractor will send to each labor organization or representative of workers with which he has a collective bargaining agreement or other contract or understanding, if any, a notice advising the said labor organization or workers' representative of his commitments under this Section 3 clause and shall post copies of the notice in conspicuous places available to employees and applicants for employment or training. D. The contractor will include this Section 3 clause in every subcontract for work in connection with the project and will, at the direction of the applicant for or recipient of Federal Financial assistance, take appropriate action pursuant to the subcontract upon a finding that the subcontractor is in violation of regulations issued by the Secretary of Housing and Urban Development, 24 CFR 135. The contractor will not subcontract with any subcontractor where it has notice or knowledge that the latter has been found in violation of regulations under 24 CFR 135 and will not let any subcontract unless the subcontractor has first provided it with a preliminary statement of ability to comply with the requirements of theSe regulations. E. Compliance with the provisions of Section 3, the regulations set forth in 24 CFR 135, and all applicable rules and orders of the Department issued thereunder prior to the execution of the contract, shall be a condition of the federal financial assistance provided to the project, binding upon the applicant or recipient for such assistance, its successors, and assigns. Failure to fulfill these requirements shall subject the applicant or recipient, its contractors and subcontractors,, it successors, and assigns to those sanctions specified by the grant or loan agreement or contract through which Federal HOME Investment Partnership Programs December6, 1999(8:24AM) --Page H-1-- S:V~greement~ahififthversion.wpd assistance is provided, and to such sanctions as are specified by 24 CFR 135. HOME Inveslment Partnership Programs December6, 1999(8:24AM) --PageH-2 S:~.greement~ahir~hversion.wpd -- EXHIBIT "1" UTILIZATION OF WOMEN AND MINORITY BUSINESS ENTERPRISES (a) It is the policy of the Government that women and minority owned business enterprises shall have the maximum practiCable opportunity to participate in the performance of Government contracts. (b) The Contractor agrees to use his/her best efforts to carry out this policy in the award of subcontracts to the fullest extent consistent with the efficient performance of this contract. As used in this contract, the term "minority business enterprise" means a business, at least 50 percent of which is owned by minority group members or, in case of publicly owned businesses, at least 51 percent of the stock of which is owned by women or minority group members. For the purposes of this definition, minority group members are Negroes, Spanish-speaking American persons, American-Oriental; American Indians, American-Eskimos, and American Aleuts. Contractors may rely on written representations by subcontractors regarding their status as minority business enterprises in lieu of an independent investigation. HOME Investment Partnership Programs December 6, 1999 (8:24AM) S:~,greement~ahififthversion.wpd -- Page I-1 -- EXHIBIT "J" AFFIRMATIVE ACTION FOR SPECIAL DISABLED AND THE VIETNAM ERA VETERANS PROVISIONS (48 CFR 52.222-35) (October 1985) (A) Definitions. "Appropriate office of the State employment service system," as used in this clause, means the local office of the Federal-State national system of public employment offices assigned to serve the area where the employment opening is t° be filled, including the District of Columbia, Guam, Puerto R!co, Virgin Islands, American Samoa, and the Trust Territory of the Pacific Islands. Opening that the contractor proposed to fill from within its own organization," as used in this clause, means employment openings for which no one outside of the Contractor's organization (including any affiliates, subsidiaries, and the parent companies) will be considered and includes any openings that the Contractor proposed to fill from regularly established "recall" lists. "Openings that the Contractor proposes to fill under a customary and traditional employer-union hiring arrangement," as used in this clause, means employment openings that the Contractor proposes to fill from union halls, under their customary and traditional employer,union hiring relationship. "Suitable employment openings," as used in this clause - (1) includes, but is not limited to, openings that occur in jobs categorized: (i) Production and nonproduction; (ii) Plant and office; (iii) Laborers and mechanics; (iv) Supervisory and nonsupervisory; (v) Technical; and (vi) Executive, administrative and professional positions compensation on a salary basis of less than $25,000 a year; and (2) Includes full-time employment, temporary employment, but not openings that the Contractor proposes to fill from within its own organization or under a customary and traditional employer-union hiring arrangement, nor openings in an educational institution that re restricted to students of that institution. The Contractor agrees as follows: (b) General HOME Investment Partnership Programs D~,r6, ,... <8:~.~) -- Page J-1 -- S:~Agreementlahif~thver sion.wpd The Contractor shall not discriminate against any ernployee or applicant for employment because the individual is a special disabled or Vietnam Era veteran. The Contractor agrees to take affirmative action to employee, advance in employment, and otherwise treat qualified special disabled veterans and Vietnam Era veterans without discrimination based upon their disability or veterans status in all employment practices such as: (i) Employment; (ii) Upgrading; (iii) Demotion or transfer; (iv) Recruitment; (v) Advertising; (vi) Layoff or termination; (vii) Rates of pay or other forms of compensation; and (viii)Selection for training, including apprenticeship. (2) The Contractor agrees to comply with thi9 rules, regulations, and relevant orders of the Secretary of Labor (Secretary) issued under the Vietnam Era Veterans' Readjustment Assistance Act of 1972 (the Act), as amended. (c) Listing Openings.' (1) The Contractor agrees to list all suitable employment openings existing at contract award or occurring during contract performance, at an appropriate office of the State employment service system in the locality where the opening occurs, these openings include those occurring at any Contractor facility, including one not connected with performing this contract. An independent corporate affiliate is exempt from this requirement. (2) State and local government agencies holding Federal contract of $10,000 or more have also list all their suitable openings with the appropriate office of the State employment service. (3) The listing of suitable employment openings with the State employment service system is required at least concurrently with using any other recruitment source or effort and involves the obligations or placing a bona fide job order, including accepting referrals of veterans and nonveterans, this listing does not require hiring any particular job applicant or. hiring from any particular group of job applicants and is not intended to relieve the Contractor from any requirements of Executive orders of regulations concerning nondiscrimination to employment. (4) Whenever the Contractor becomes contractually bond to the listing terms of this clause, it shall advise the State employment service system, in each State where it has establishments, of the name and location of each hiring location in the State. As long as the Contractor is contractually bound to these terms and has so advised the State system, it need not advise the State system of subsequent contracts. The HOME Investment Partnership Programs December 6, 1999 (8:24ANI) S:~.greement~ahififthversion.wpd -- Page J-2 -- Contractor may advise the State system when it is no longer bound by this contract clause. (5) Underthe most compelling circumstances, an employment opening may not be suitable for listing, including situations when (i) the Government's need cannot reasonably be supplied, (ii) listing would be contrary to national security, or (iii) the requirement of listing would not be in the Government's interest. (d) Applicability. (1) This clause does not apply to the listing of employment openings which occur and are filled outside the 50 states, the District of Columbia, Puerto Rico, Guam, Virgin Islands, American Samoa, and the Trust Territory of the Pacific Islands. (2) The terms of paragraph (c) above of this clause do not apply to openings that the Contractor proposes to fill from within its own organization or under a customary and traditional employer-union hiring arrangement. This exclusion does not apply to a particular opening once an employer decides to consider applicants outside of its own organization or employer-union arrangement for that opening. (e) Positions (1) The Contractor agrees to post employment notices stating (i) the contractor's obligation under.the law to take affirmative action to employ and advance in employment qualified special disabled veterans and veterans of the Vietnam Era, and (ii) the rights of applicants and employees. (2) These notices shall be posted in conspicuous places tat are available to employees and applicants for employment. They shall be in a form prescribed by the Director, Office of Federal Contract Compliance Program, Department of Labor (Director), and provided by or through the Contracting Officer. (3) The Contractor shall notify each labor union or representative or workers with which it has a (Jollective bargaining agreement or other contract understanding, that the Contractor is bound by the terms of the Act, and is committed to take affirmative action to employ, and advance in employment, qualified special disabled and Vietnam Era veterans. (f) Noncompliance. If the Contractor does not comply with the requirements of this clause, appropriate actions may be taken under the rules, regulations, and relevant orders of the Secretary issued pursuant to the Act. (g) Subcontracts. The Contractor shall include the terms of this clause in every subcontract HOME Investment Partnership Programs December6, 1999(8:24AM) --Page J-3 S:~Agreement~ahififfhversion.wpd -- or purchase order of $10,000 or more unless exempted by rules, regulations, or orders of the Secretary. The Contractor shall act as specified by the Director to enforce the terms, including action for noncompliance. HOME Investment Partnership Programs Doc~m~r e, ~ (8~2.,,,~) -- Page J-4 -- S:~Agrsement~ahififthversion.wpd , ADMINISTRATIVE REPORT ~c MEETING DATE: April 26, 2000 AGENDA SECTION: Consent Calendar ITEM: 8. o. TO: Honorable Mayor and City Council ~,~VED FROM: Jake Wager, Economic Development Director DEPARTMENT HEAD DATE: April 12, 2000 CITY ATTORNEY CITY MANAGER SUBJECT: Amendment No. 2 to Agreement No. 97-109 with Restoration Community Project, Inc. (RCPI) for $60,000 to complete the rehabilitation of the an 11-room multi-family housing project located at 721 and 725 8th Street. (Ward 1) RECOMMENDATION: Staff recommends approval. BACKGROUND: On May 7, 1997, the City Council approved an agreement with RCPI to provide HOME financial assistance ($100,000) to acquire and rehabilitate an 11 room multi-family housing project (Freise Inn) located at 721 and 725 8th Street. This transitional housing project will provide housing for homeless, alcohol/substance-abusing women and women with children to facilitate their return to independent living within a 12 to 24 month period. The County of Kern Community Development also approved $142,750 of HOME funds to assist in the rehabilitation project. As the work on the rehabilitation of the buildings progressed, additional damage and repairs were identified that were not part of the original scope of work included in the initial request. RCPI and their contractor estimated that the cost of completing the additional work was $60,000. At the July 15, 1999 City Council meeting, Amendment No. 1 was approved to increase the City's share of the additional work ($30,000) for a total of $130,000 in project assistance. The County also approved a $30,000 increase to their original contribution for a total of $180,000. With increases from both the City and County this allowed RCPI to proceed with the work needed to finish the rehabilitation of the Freise Inn. Subsequently additional work was identified as part of a in-depth system by system analysis of the building for potential health and safety repairs. In a letter dated November 9, 1999 to both the City and County, RCPI requested a second increase totaling $120,000. This in-depth analysis was conducted with the assistance of S.C. Anderson as their unpaid technical advisor. The work that was identified would be needed for the issuance of a certificate of occupancy. Items identified include lead base paint removal and abatement, as well as fire and building code improvements. DIk:S:~Admins\rcpi amend no 2.wpd April 12, 2000, 11:12AM ADMINISTRATIVE REPORT Page 2 Staff has held numerous meetings with the City's Building Department, RCPI, Steve Anderson, and County Community Development in order to justify and confirm RCPI's request of additional assistance to complete their project. As a result of these meetings, all parties are in concurrence that RCPI"s requests is necessary and will allow for the filing of a certificate of occupancy. The County Board of Supervisors will be considering RCPI's request for an additional $60,000 of HOME assistance on April 25, 2000. If both the City and County approve their respective amendments to RCPrs agreements for the additional funds, construction could resume by May 1, 2000 and the facility available for clients by July 28, 2000. RCPI has secured $38,000 of private contributions to pay for the furnishings and fixtures necessary for the commencement of services to their clients. The Agreement requires that RCPI deposits at a minimum $38,000 in an escrow account prior to the release of the City's $60,000. Once all work is completed and the certificate of occupancy has been issued RCPI can then begin to access a $600,000 HUD-Supportive Housing Direct Grant for the operation of the Friese Inn for the next three years. DIk: April 13, 2000, 2:54PM AMENDMENT NO. 2 TO AGREEMENT NO. 97-109 HOME Investment Partnerships Program Restoration Community Project, Inc. THIS AMENDMENT NO. 2 TO AGREEMENT NO. 97-109 is made and entered into this, by and between the CITY OF BAKERSFIELD, a California charter city and municipal corporation ("CITY" herein), and RESTORATION COMMUNITY PROJECT, INCORPORATED, a California nonprofit corporation with its office in Bakersfield, California, and doing business within the City of Bakersfield ("RCPI" herein). RECITALS: WHEREAS, the Congress of the United States has enacted the "HOME Investment Partnerships Act" (hereinafter called "said Program") at 42 USC 12741 et. seq. of the Cranston-Gonzalez National Affordable Housing Act and amendments (hereinafter called "said ACT"; and WHEREAS, CITY has submitted certain documents to the Department of Housing and Urban Development (hereinafter called "HUD") hoping to receive funds pursuant to said Program; and WHEREAS, CITY is empowered, under said Program, to administer funds received under said Program and to enter into agreements with nonprofit organizations; and WHEREAS, RCPI asked CITY for help in acquiring said Program funds to help purchase and rehabilitate 725 8th Street, and rehabilitate 721 8th Street, Bakersfield California to be used as transitional housing; and WHEREAS, CITY and RCPI entered into Agreement No. 97-109 on May 7, 1997 whereby CITY granted to RCPI ONE HUNDRED THOUSAND DOLLARS ($100,000.00) and the County of Kern granted RCPI funds for the Project, as well; and WHEREAS, subsequently, additional Project costs were identified which were not anticipated by CITY or RCPI; and WHEREAS, CITY and RCPI entered into Amendment No. 1 to Agreement 97-109 on July 15, 1999 whereby CITY granted RCPI an additional THIRTY THOUSAND DOLLARS ($30,000.00) and the County of Kern granted RCPI additional funds, as well; and Page 1 of 3 Pages WHEREAS, additional required repairs have been identified which must be made before RCPI can begin servicing clients; and WHEREAS, the estimated Cost of the required repairs is ONE HUNDRED TWENTY THOUSAND DOLLARS ($120,000.00); and WHEREAS, RCPI is requesting SIXTY THOUSAND DOLLARS ($60,000.00)in grant funds from CITY and will receive the balance from the County of Kern; and WHEREAS, CITY has been assured by RCPI that with the granting of these additional funds, RCPI will be able to complete the Project and begin servicing clients. NOW, THEREFORE, incorporating the foregoing recitals herein, CITY and RCPI agree as follows: 1. All terms defined in Agreement No. 97-109 shall have the same meaning herein. 2. Paragraph 3 A. of the Agreement No. 97-109 shall be modified to read as follows: "3. Funds Available and Method of Disbursement A. Amount of Grant: City shall not grant, and RCPI does not expect to receive, more than ONE HUNDRED NINETY THOUSAND AND 00/100' DOLLARS ($190,000.00)." 3. Schedule "A" attached hereto shall replace the Schedule "A" attached to Agreement No. 97-109.. 4. RCPI will execute a modification to the Deed of Trust on 'each Project Property which reflects the new grant amount. 5. All other terms of Agreement No. 97-109 shall remain in full force and effect. This Amendment No. 2 to Agreement No. 97-109 is contingent upon RCPI receiving and having in an escrow account at least THIRTY-EIGHT THOUSAND DOLLARS ($38,000.00), exclusive of CITY's or the County of Kern's funds, to pay for furnishing, fixtures and equipment to enable RCPI to commence servicing clients. CITY will not Page 2 of 3 Pages forward any of the SIXTY THOUSAND DOLLARS ($60,000.00) funds to RCPI until it receives satisfactory proof that those escrowed funds are in place and available to RCPI. IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to Agreement No. 97-109 to be executed the day and year first-above written. "CITY" "RCPI" CITY OF BAKERSFIELD RESTORATION COMMUNITY PROJECT,/~~/~INCOR~~ By: By: ~ C'. ANT~01~Y ~' BOB PRICE, Mayor Chairman of the Board APPROVED AS TO FORM: APPROVED AS TO CONTENT: BART J. THILTGEN ECONOMIC AND COMMUNITY City Attorney DEVELOPMENT DEPARTMENT Deputy City Attorney Economic Development Director COUNTERSIGNED: By: GREGORY J, KLIMKO Finance Director Page 3 of 3 Pages Schedule "A" as Amended HOME Investment Partnerships Program Restoration Community Project, Inc. (RCPI) Purpose This project is designed for the purpose of providing the acquisition of a single-family home for development of transitional housing for HOME-qualified Iow income individuals and families. Funds will also be used in the rehabilitation of the Project Property consisting of the acquired property located at 725 8th Street and the property currently owned by RCPI located at 721 8th Street. Description RCPI intends to administer a transitional housing program targeting homeless women recovering from alcohol and substance abuse and their children in addition to de- institutional women with disabilities. RCPI has as its purpoSe facilitating the movement of individuals and families to independent living within a twelve (12) month period or up to 24 months in extreme cases. The project property consists of a 5,131 square foot two story building located at 721 8th Street with approximately 11 bedrooms, 4 restrooms, a kitchen, utility areas, laundry facility and office space. The adjoining property at 725 8th Street consists of a 1,795 square foot single-family dwelling with four bedrooms and two baths. Timeframe The following schedule of the important steps in the process is measured in weeks from the date of Amendment No. 2 to Agreement #97-109 (the sequence of events may occur simultaneously, but all steps will be completed in no more than 30 weeks): Activity Estimated Completion Acquire Property Completed County Funding Secured Completed Rehabilitation Process Begins 2 weeks Rehabilitation Complete 18 weeks Placement of Participants 20 weeks Ribbon Cutting Ceremony 25 weeks C:~WINDOWS~TEMP~,MENDMEN.WPD Revised Apd112, 2000 project Cost Estimate The total amount of City Grant funds payable to RCPI, or its designee(s), under the terms of this Agreement, shall not exceed ONE HUNDRED NINETY THOUSAND DOLLARS' ($190,000). The County HOME funds are expected to total $232,'750. Combined contributions from the City and County total $422,750. This amount will be used for the acquisition and rehabilitation of Project Property. The following table outlines the estimated costs, sources and distribution of project funds. ACTIVITY ESTIMATED SOURCE AMOUNT Property Acquisition and $66,129 City HOME Closing Costs Rehabilitation of 721 and $341,621 City HOME - $123,871 725 8th Street County HOME - $217,750 Project Management $5,000 County HOME Contingency $10,000 County HOME TOTAL $422,750 C:~WINDOWS~TEMP~MENDMEN.WPD Revised April 12, 2000 ADMINISTRATIVE REPORT MEETING DATE: April26, 2000 IAGENDA sECTION: c°nsent CalendarITEM: 8. t.. I TO: Honorable Mayor and City Council . ~PP'-~ \VED FROM: Jake Wager, Economic Development Director DEPARTMENT HEA~ '"~_'--'' DATE: April 13, 2000 CITY ATTORNEY'~'~~ CITY MANAGER ~/~ SUBJECT: 1. Approval of the Consolidated Plan 2005. (ALL WARDS) 2. Approval of the FY 2000/01 Action Plan. (ALL WARDS) RECOMMENDATION: 1. Staff recommends approval of the Consolidated Plan 2005. 2. Staff recommends approval of the FY 2000/01 Annual Action Plan. 3. Staff recommends authorization for City Manager to execute all necessary documents for submission to the Federal Department of Housing and Urban Development (HUD). BACKGROUND: On February 7, 2000, the proposed use of FY 2000/01 HUD funds was reviewed by the Budget and Finance Committee. At that time the Committee authorized staff to initiate the public review period for the draft Consolidated Plan (ConPlan) 2005 and Annual Action Plan (1't year spending plan of the ConPlan 2005). Both the Consolidated Plan 2005 and the FY 2000/01 Action Plan were reviewed at the April 19, 2000 Budget and Finance Committee meeting. The Consolidated Plan 2005 was recommended for City Council action at their April 26, 2000 meeting. The Budget and Finance Committee also recommended that the Action Plan be referred to the full City Council. The Committee did specifically request that any future agreement with Kern County Economic Opportunity Corporation assistance proposed for FY 2000/01 be returned to the Budget and Finance Committee for further review. · The draft ConPlan incorporated citizen comments previously received through 200 completed needs surveys, public meetings and workshops, a ConPlan focus group, and the City's web page. The 30-day review period is designed to allow public access to the draft document at various public sites so that they can review and make written comments before the ConPlan becomes final. DIk: April 20, 2000, 10:58AM ADMINISTRATIVE REPORT Page 2 To date written comments have been received from the Independent Living Center of Kern County, the Chief Administrative Officer of the County of Kern, Greater Bakersfield Legal Assistance, Ms. Stephanie Campbell, and from the Kern County Al DS Advisory Board. We especially reviewed the comments of the Al DS Advisory Board and the majority of the comments have been incorporated in the final ConPlan. In addition, staff met with representatives of the AIDS Advisory Board on Tuesday, April 18, 2000 to make sure that their concerns were addressed in the final ConPlan. The public comment period deadline is, Thursday, April 20, 2000. The public comments, to the greatest extent will be incorporated in the final ConPlan 2005 document. Any changes or comments will be made to the final document and delivered separately to City Council Members on April 24, 2000 for the April 26, Council meeting. On March 21, 2000, the attached public notice was published concerning the availability of the draft Consolidated Plan 2005/Action Plan FY 2000101 for a HUD required 30-day citizen review and comment period 9 (from March 21 to April 20, 2000). The Annual Action Plan outlines the activities to be undertaken to address community development and housing needs listed in the five-year Consolidated Plan 2005. Since the 1st five year ConPlan was adopted in May of 1995 and it is set to expire June 30,2000, the ConPlan 2005 needs to be adopted concurrently with the Annual Action Plan in order to receive 'HUD funding for next fiscal year. Subsequent to the 30-day citizen review and comment period, all written public comments received by staff will be reviewed and addressed prior to submittal of the ConPlan to HUD. The main components of the ConPlan 2005 include: a housing and community development needs assessment; a housing market analysis; a comprehensive analysis of impediments to fair housing choice; a 5 year strategic plan that establishes goals (with measurable objectives) and housing and community development priorities; an annual action plan describing how federal and local resources will be used and allocated to address the needs and objectives identified in the ConPlan; and required federal certifications regarding the City's performance in carrying out its annual activities. The ConPlan identified five general priorities required by HUD. The ConPlan priority needs which are summarized below are city-wide and cover a broad spectrum of issues. This was planned to allow funding requests from potential applicants for HUD assistance to obtain a City certification that identifies their application request as consistent with the priorities of the City's approved ConPlan. Without this consistency letter from the City for-profit and non-profit/public agencies their applications will not be considered for funding by HUD. · Affordable Housing Needs: Owner Occupied Housing, Rental Housing, Public Housing · Homelessness Needs: Assessment & Outreach, Emergency Shelter &Services, Transitional Housing, Permanent Supportive Housing, Supportive Services, · Other Special Needs: Special Facilities (Supportive Housing) and Services · Economic Development Needs: Economic Opportunity · Community Development Needs: Public Facilities and Services, Infrastructure Improvement, Crime Prevention, Planning, Historic Preservation, Fair Housing, The Action Plan budget for next fiscal year is $4,179, 000 and is composed of the following three federal entitlements: Community Development Block Grant - $2,887,000 (includes $100,000 of program income); DIk: April 20, 2000, 10:58AM ADMINISTRATIVE REPORT Page 3 HOME Investment Partnership Act - $1,193,000; and Emergency Shelter Grant - $ 99,000. The ConPlan 2005 and FY 2000/01 Action Plan must be submitted to HUD by May 16, 2000. HUD will then have up to 45 days to review the Plan for compliance with federalregulations. Funds for next fiscal year are expected to be released subsequent to July 1, 2000, after a HUD grant agreement for the three entitlement programs has been executed between the City and HUD. If the Council chooses to further consider the Plan prior to granting approval, this item can be deferred to the May 10, 2000 Council meeting and still meet HUD's May 16, 2000 deadline. DIk: April 20, 2000, 10:58AM PUBLIC NOTICE City of Bakersfield Consolidated Plan 2005 30 Day Public Review - Public Meeting The City of Bakersfield Economic and Community Development Department (ECDD) has prepared a DRAFT Consolidated Plan for a 30 day public review and comment (from March 21 to April 20, 2000). The City of Bakersfield developed a new Consolidated Plan (ConPlan) in order to continue receiving federal funds from the Federal Department of Housing and Urban Development (HUD). This document is a strategic plan and consolidated application for addressing the housing and community development needs of the City. Beginning FY 2000-01, 'the City anticipates receiving an excess of $4 million per year in federal entitlement funds from the Federal Department of Housing and Urban Development OVer the next five years. The funds will be expended to meet the goals and objectives of the ConPlan 2005. Over $25 million annually from various HUD programs benefit Bakersfield residents. In most cases, the federal government requires potential applicants for HUD funding such as non-profit and for-profit agencies to obtain a certification from the City that identifies their application request as consistent with the goals and objectives of the City's approved ConPlan. The first and existing five-year Consolidated Plan which was initially adopted for FY 1995-96, is set to expire July 1,2000. To continue receiving HUD funding, the City developed the Consolidated Plan 2005 for submission to the federal government which will be effective for five years beginning July 1,2000. The main components of the ConPlan include: a housing and community development needs assessment; a housing market analysis; a comprehensive analysis of impediments to fair housing choice; a 3 to 5 year strategic plan that establishes goals (with measurable objectives) and housing and community development priorities; an annual action plan describing how federal'and local resources will be used and allocated to address the needs and objectives identified in the ConPlan; and required federal certifications regarding the City's performance in carrying out its annual activities. The ConPlan also describes strategies for evaluating and reducing lead- based paint hazards, reducing the number of poverty-level families, and enhancing coordination between private, public and assisted housing providers. The consolidated planning process relied heavily on citizen participation from an informed and active public. The consolidated planning process has allowed the city to effectively coordinate its federal programs into more effective housing and community development planning. The ConPlan allows a single consolidated submission process for three formula HUD entitlement programs it currently is eligible to receive: 1) Community Development Block Grants (CDBG); 2) HOME Investment Partnerships ('HOME); and 3) Emergency Shelter Grants (ESG). The five general categories covered in the ConPlan are: 1) affordable housing; 2) homelessness; 3) other special needs; 4) community development; and 5) economic development. The ConPlan priority needs are summarized below: · Affordable Housing Needs: Owner Occupied Housing, Rental Housing, Public Housing · Homelessness Needs: Assessment & Outreach, Emergency Shelter & Services, Transitional Housing, Permanent Supportive Housing, Supportive Services · Other Special Needs: Special Facilities (Supportive Housing) and Services · Economic Development Needs: Economic Opportunity · Community Development Needs: Public Facilities and Services, Infrastructure Improvement, Crime Prevention, Planning, Historic Preservation, Fair Housing A description of activities to be undertak&h by the City for the next fiscal year are summarized below: Summary of Proposed Projects for Action Plan 2000-2001 : , :. : ::'::::i~il ~!'~i:: :i..: :..;~:i')::!::ii::: :': ::':g~:~;:.!i:~ i.::. :' ::::::::::::::::::::::::::::::::::::::::::::::::::::::: '::;? i: i ' : ,~, :':..: i~',.'~ ,, ..,~ :: ::~:i~,~*~ ~::::i' :, :: '.. ::~:.!: i ::: :?,.:: :, :'~: ~:i~'.~ i:::~i,: i:': .~::~i~,: ~ '. ~::,: :~:,-:!:;';!~: ,~ ~,i ~: :.!,: i:~:~i ~ :'~;:.~: : S~:UrCe' Kern County Economic Opportunity Corporation 03E CDBG - (KCEOC) Food Bank Central Kitchen Consolidation Neighborhood $275,000 and Administration of Offices Project Facilities Priority - Acquisition and construction of a new KCEOC facility at 570.201(c) Community the southwest corner of Feliz Drive and Washington Development/ Street. Public Facilities and Services Target Date - Summer 2001 Installation of HVAC System at Oro Vista 03F CDBG - $30,000 Recreation Center Parks, Priority - Installation of HVAC system at Oro Vista Recreation Recreational Community Center. Facilities Development/ 570.201(c) Public Facilities and Services Target Date - Spring 2001 : priorities; & roject Title & Descnption ' : HUD citati~)n.: . . .Target Dates Martin Luther King Jr. Center Exterior Restoration 03F CDBG - $37,500 Preserve the exterior surface of building through paint Parks, Priority - restoration. Recreational Community Facilities Development/ 570.201 (c) Infrastructure improvements Target Date - Fall 2000 Lake Street Area Street Reconstruction Project 03K - Street CDBG - $52,000 (Phase IX) Improvements Priority - Reconstruction of Lake Street from Haley Street to 570.201(c) Community Williams Street to facilitate traffic flow and drainage of Development/ the area. Infrastructure Improvements Target Date - Winter 2000 Casa Loma #6 Street Improvement Project (Phase 03K - Street CDBG - IV) Improvements $277,000 Construction of curb and gutters within the Casa Loma 570.201(c) Priority- ~6 area. Community Development/ Infrastructure Improvements Target Date - Fall 2000 California Avenue Streetscape Project 03K - Street CDBG - Streetscape improvements on California Avenue from Improvements $103,500 Chester Avenue to Union Avenue. 570.201 (c) Priority - Community Development/ Infrastructure Improvements Target Date - Summer 2001 Downtown Streetscape Expansion Project (Phase 03K - Street CDBG - II) Improvements $103,500 Streetscape improvements of 17th, 18th, 19th, 20th, and 570.201 (c) Priority - 21't streets between Eye and K streets. Community Development/ Infrastructure Improvements Target Date - Fall 2000 Median Landscaping in CDBG Targeted Areas 03K - Street CDBG - Landscaping and hardscaping improvements of street Improvements $152,500 medians in CDBG eligible areas. 570.201(c) Priority- Community Development/ Infrastructure Improvements Target Date - Summer 2001 Amounm, ,, Pribiqii~si'& ' :' :' :'.!.~' ~:-': ':': :Project:Title & Oe'S'~Pti0h::'.?.i:~:i'-.i::: !~ili~.':i~:: ?. ::ii:~.:;:, ~:: ::,:'" ::i: HuD:'Cita~0n.i::::i~:::::.::! .-r~ar~'etOates Baker Street Lighting Improvements 03K - Street CDBG - $22,000 Installation of street lights on Baker Street from Improvements Priority - Jackson to Kentucky streets. 570.201(c) Community Development/ Infrastructure Improvements Target Date - Winter 2000 Lincoln School Area Street Lighting Improvements 03K - Street CDBG - $79,820 Street lights in an area bordered by East Truxtun on Improvements Priority - the ~north, Gage Street on the east, California Avenue 570.201(c) Community on the south, and Inyo Street on the west. Development/ Infrastructure Improvements Target Date - Spring 2001 Gwendolyn Street Area Sewer Installation 03K - Street CDBG - $16,000 Sewer line installation in an area bordered by Clara Improvements Priority - Court on the north, Hughes Lane on the east, Fairview 570.201(c) Community Road on the south, and Gwendolyn Street on the west. Development/ Infrastructure Improvements Target Date - Fall 2001 Pacheco #10 Area Sewer Installation 03K - Street CDBG - $35,000 Sewer line installation in an area bordered by Pacheco Improvements Priority - Road on the north, one block east of Elysium Street on 570.201(c) Community the east, Faith Avenue on the south, and one block Development/ west of Centaur Street on the west. Infrastructure Improvements Target Date - Fall 2001 California Avenue Area Sidewalk Reconstruction 03L - Sidewalks CDBG - $83,000 Reconstruction of deteriorated sidewalks within an area 570.201(c) Priority - bordered by California Avenue on the north, Union Community Avenue on the east, Brundage Lane on the south, and Development/ Chester Avenue on the west. Infrastructure Improvements Target Date - Winter 2000 Clearance and Demolition Program 04 - Clearance and CDBG - $53,000 Removal of Health and Safety deficiencies and vacant Demolition Priority - substandard buildings and improvements in Iow- 570.210(d) Community income areas and neighborhoods. Development /Other Public Facilities/ Services Target Date Winter 2000 '~': 'i"!' :': :"-';'":~ ::;'.' : .:' :":: ..i;:':" ::'.';::' i,". :.'"'i"::: !":" ':'" ;'' "'::,:: :: : ';. "'" Sond!!P!urce; ' ' · .... :.:. :: ..:.':. :: .. ::: _ ': ::: ':':: ':":':'": ":::':::' :!'' ':: ': :::!:: :::' :' 'i':?: : '~'': ': ::' :;,:'~'; "i! · : ::' ": ::. i' ' · :' ::, ': '; PrionU~S~ & :;:': :'"'~:: '":::':'"::::.:!::i :: ':':::.':',..: · Pr°jectTifle:&'DescHPfi0n '~',:;.:::; ::' ::?!": ~!?:::':i :::!;.:':i; .?/.::~:::::~':: 'HUDcitafion'.: '.. TargetDates Graffiti Removal Program 05 - Public CDBG - $17,000 Removal of graffiti within various Iow-income areas Services (General) Priority - within the City. 570.201(e) Community Development/ Other Public Facilities/ Services Target Date - Spring 2001 Looking Good Neighborhood Program 05 - Public CDBG - $10,000 Initiate a neighborhood improvement program involving Services (General) Priority - resident empowerment and general public service 570.201(e) Community activities, such as clean-up days, public health Development/ awareness, and educational campaigns. Other Public Facilities/ Services/ Target Date - Spring 2001 Enterprise Zone Area Marketing/Training 05H - Employment CDBG - $15,000 Funding of management and marketing services in Training Priority - conjunction with the County of Kern and Employers 570.201(e) Economic i Training Resources (ETR) to create employment Development/ opportunities for Iow-income persons. Economic Opportunity Target Date - Winter 2001 Fair Housing Program Services 05J - Fair Housing CDBG - $81,805 Implementation of fair housing public services for Activities Priority - qualified residents City-wide. Includes education, 570.201(e) Community intake, screening, testing and mediation/conciliation. Development/ Fair Housing Target Date - Summer 2001 Acquisition and Demolition of Substandard 17A- CI Land CDBG - Properties Program Acquisition/ $343,000 Acquisition and demolition of deteriorated structures in Disposition Priority - economically distressed areas. 570.201(a) Economic Development/ Economic Opportunity Target Date - Winter 2000 Business Loan Program 18A - ED Direct CDBG - Financial assistance to qualified existing private for-. Financial $152,000 profit entities for acquisition and/or construction for Assistance to For- Priority - commercial/industrial improvements within the City. Profits Economic 570.203(b) Development/ Economic Opportunity  Target Date - · Winter 2001 i : : source, · ~ : . Priorities, & Section 108 Loan Repayment for the Bakersfield 19F - Repayment CDBG - Convention Center Hotel of Section 108 $340,375 Seventh of 10 installments of a loan payment regarding Loan Priority - $2.5 million assistance to a develop for the Convention 570.203(b) Economic Center Hotel Project (Holiday Inn Select) at 801 Development/ Truxtun Avenue. Economic Opportunity Target Date - Summer 2001 Home Access Grant Program 10 - Removal of CDBG - $58,000 Grants up to $2,500 for handicap accessibility in Architectural HOME - $30,000 privately or publicly owned residential structures in Barriers Total - $88,000 neighborhoods City-wide. 570.201(k) Priority- Special Needs and Facilities/ Supportive Housing and Services Target Date - Winter 2001 Service Delivery Costs for Housing Related 14H - CDBG - $45,000 Activities Rehabilitation HOME - $41,000 Staff and overhead costs directly related to carry out Administration Total - $86,000 j~I single-family rehabilitation activities. 570.202 Priority - Affordable Housing/Owner Occupied Housing Target Date - N/A New Construction Assistance 12 - Construction HOME - Housing development assistance for costs related to of Housing $253,750 construction of affordable housing. Primarily gap 92.205(a) Priority - financing in the form of loans/grants (City-wide). Affordable Housing/Owner Occupied and Rental Housing Target Date - Winter 2001 First Time Homebuyers Assistance 13 - Direct Home HOME - Downpayment and closing cost assistance for Iow- Ownership $200,000 income families for first time homebuyers (City-wide). Assistance Priority - 92.205(a) Affordable Housing/Rental Housing Target Date - Fall 2001 ject T,tle & Descnpfion HUD C,tafion :i:!T~:~g~t!:b~t~: . Single-Family Rehab Loan Program 14A- Rehab; HOME - .Housing loans for the rehabilitation of single-family Single-Unit $200,000 dwellings for Iow-income persons (deferred and below Residential Priority - market rate loans). 92.205(a) Affordable Housing/Owner Occupied Housing Target Date - Winter 2001 Rehabilitation of Multi-Family Dwellings 14B - Rehab; Multi- HOME - $85,000 Funding of loans for rental rehabilitation (deferred and Unit Residential Priority - below market rate loans). To benefit Iow-income 92.205(a) Affordable persons. Housing/Rental Housing Target Date - Winter 2001 Lead Based Paint Testing and Mitigation 141 - Lead HOME - $75,000 Testing and removal of lead based paint for qualified Based/Lead Priority - lower income residents. Hazard Test/Abate Community 570.202 Development/ Other Public Facilities/ Services Target Date - Summer 2001 CHDO Set Aside 14G - Acquisition HOME - Loans for acquisition of dwellings for rehab and for Rehabilitation $178,950 reselling to eligible Iow-income buyers. To be 92.205(a) Priority - implemented by a Community Housing Development Affordable Organization (CHDO). Housing/Owner Occupied Housing Target Date - Winter 2001 HOME CHDO Operating Expenses 211 - HOME CHDO HOME - $10,000 Expenses incurred for operating costs associated with Operating Costs Priority - a CHDO carrying out its activites. Affordable Housing/Rental Housing Target Date - N/A HOME Administration/Planning Costs 21H - HOME HOME - Costs related to overall management and coordination Admin/Planning $11.9,300 of the HOME program. Costs of PJ Pdority - N/A 570.203(b) Target Date - N/A Alliance Against Family Violence Expansion of 03T - Operating ESG - $15,996 Services Costs of Priority - Expansion of operation, essential services, and Homeless/AIDS Homelessness/ homeless prevention activities at shelter site. Patients Programs Supportive 576.21(a)(3) Services Target Date - Summer 2001 Bakersfield Homeless Center 03T - Operating ESG - $37,946 Funding to support operation and maintenance costs of Costs of Priority - the center. Homeless/AIDS Homelessness/ Patients Programs Supportive 576.21 (a)(3) Services Target Date - Summer 2001 Bakersfield Rescue Mission 03T - Operating ESG - $8,000 Funding to support operation and maintenance costs of Costs of Priority the center. - Homeless/AIDS Homelessness/ Patients Programs Supportive 576.21 (a)(3) Services Target Date -' Summer 2001 Kern Mental Health Association Services 03T - Operating ESG - $11,676 i Funding to support operations, essential services and Costs of Priority - · homeless prevention activities of the association. Homeless/AIDS Homelessness/"" Patients Programs Supportive 576.21 (a)(3) Services Target Date - Summer 2001 Kern Mental Health System of Care 03T - Operating ESG - $20,432 Funding to support operations, essential services, and Costs of Priority - homeless prevention activities of the association. Homeless/AIDS Homelessness/ Patients Programs Supportive 576.21 (a)(3) Services Target Date - Summer 2001 ESG Program Administration 21A - General ESG - $4,950 Cost related to overall management and coordination Program Pdority - N/A of the ESG program. Administration/ Target Date - ESG Handbook N/A 7300.00 1-6A4b Planning and Capacity 20 - Planning CDBG - $45,000 Eligible planning and urban/redevelopment studies 570.205 Priority - consisting of all costs related to data gathering, plans, Community environmental analysis, and preparation of documents Development/ necessary to implement consolidated planning strategies and objectives. Planning Target Date - Summer 2001 :' i~ ..... ~r°JectT'~!P'&:D?O~PPt'PP::::::'.: :i~:::,::: i:::':::: :':::'.: :'HUD.C!~tlon::i: .:, :~i'~'s General Management Oversight and Coordination. 21A - General CDBG - Costs associated with overall program management, Program $315,000 coordination, and monitoring of the CDBG program. Administration Priority - N/A 570.206 Target Date - N/A Indirect Costs 21B - Indirect CDBG - Cost allocation charges from other City departments. Costs $115,000 570.206 Priority - N/A Target Date - N/A Public Information 21C - Public CDBG - $20,000 Provision of public information on federal programs Information Priority - N/A and activities. 570.206 Target Date - N/A Submissions of Applications for Federal Programs 21E - Submission CDBG - $10,000 Preparation of applications for submission to HUD and of Applications for Priority - N/A other government programs. Federal Programs Target Date - 570.206 N/A Total $4,179,000 Subtotal: CDBG $2,887,000 (Entitlement=S2,787,000; Program Income=S100,000) Subtotal: Home $1,193,000 (Entitlement=S1,193,000; Program Income=SO) Subtotal: ESG $99,000 (no program income) Total $4,179,000 The City is seeking written comments from residents regarding the Draft Plan. The Plan is available for review from March 21 to April 20, 2000 (30 Days) at the following places: ECDD, 515 Truxtun Avenue: City Clerk's Office, 1501 Truxtun Avenue: Beale Memorial Library, 701 Truxtun Avenue; Holloway-Gonzales Library, 506 E. Brundage Lane; Baker Street Library, 1400 Baker Street; Northeast Library, 3719 Columbus Avenue; Rathburn Library, 200 W. China Grade Loop; Southwest Library, 8301 Ming Avenue; Wilson Library, 1901 Wilson Road; and CSUB Library, 9001 Stockdale Hwy. A public meeting for interested residents is scheduled for March 30, 2000 (Thursday) at 5:30 p.m. at the Martin Luther King Jr. Community Center at 1000 South Owens Street. The community center meeting room is accessible to the disabled. For special arrangements please call the City seven (7) days prior to the meeting at (661) 326- 3764; TDD (661)324-3631. After a thirty day public review period, it is anticipated that staff will request that the City Council on April 26; 2000 to approve the Consolidated plan .for submission to the federal government. The deadline for submission to HUD is May 16, 2000. Conplan/notice . e'4/ie/2eee ~02:16 · 661324?445 PRP:NEXTHKT: PAGE 0i Fax: (661) 324-7445 Urgent ~/For Review IZI Please Comment D Please Rep · .Comments: 04/~8/2000 02:~6 66~3247445 PRP:NE×T~T~ PA6E 02 TO: CITY COUNCIL MEMBERS FROM~ STEPMANIE CAMPBELL DATE: APRIL 17, 2000 : CC: ALAN TANDY - CITY MANAGER BUDGET AND FINANCE COMMITTEE/ CITY OF BAKERSFIELD DEPARTMENT OF ECONOMIC AND COMMUNITY DEYELOPMENT RE: DRAFT - CONSOLIDATED PLAN 2005 The Consolidated Pfan 2005 (ConPlan), is a comprehensive analysis of a 3 to 5 year strategic plan ~hat establishes goals and housing and community development priorities; an annual action plan describing how federal and local resources will be used and allocated to address the needs and objectives identified in the ConPlan and required federal certifications regarding the City's performance in carrying out its annual activities. In Chapter VIII - Community and Economic Development Needs, there are several responses ranked that do not meet the needs of residents of Southeast Bakersfield. The responses are ranked from 1 to 7,(from high need to no need) in this area the survey information is incorrect. The citizens of Southeast Bakersfield rank ~§ - Direct Financial AsStance/Tecnical Assistance; ~6 - Commercial/Industrial Real Property Acquisition; and ~7 - Micro Enterprise Assistance, as high needs for the community. : Micro Business Enterprises can help alleviate unemployment for minority citizens within the Southeast Bakersfield Area. By ranking Micro Enterprises as no need, the City seems to be taking steps backward in the growth of Economic DeYelopment. The City staff needs to actively promote business within this area and if necessary separate; Southeast Bakersfiel~ as it has done in the formation of a Redevelopment Project Area. By providing Direct Financial Assistance/ Technical Assistance in the proposed plan it would allow Minority owned businesses to begin ma~ing a noticeable impact on the 84/18/2888 82:1G G$13247445 PRP:NEXTMKT: PAGE 83 .£ employment outlook of Minority Citizens. The inclusion of a comprehensive micro enterprise assistance program with technical/financial support to small for-profit businesses should be included and funds designated for that specific purpose. In Economic Perspectives by Thomas D. Boston, professor at Georgia Institute of Technology, a Member of the Black Enterprise Board of Directors Article he sates the "Twenty By Ten" program. The ideal behind the "Twenty By Ten" program comes from the premise that if the government and private sector pursue policies to increase the number of African American-owned firms, then by 2010, these businesses would employ 20% of the African American labor force. In 198Z, the Census Bureau reported that there were 339,239 African American-owned firms, which employed 165,765 workers - or 1.5% of the black labor force at that time. Between 1982 and 1992, the number of black-owned businesses grew at a rate of 7.2% annual while their employment capacity grew 11.02%. Because of this rapid growth, there were 602,912 black businesses in 1992, with a capacity that was equal to 2.3% of the 1992 African American workforce. If the current growth continues, there will be 2.2 million African American fir.ms employing 2.3 workers by 2010. These results mean that there can be no backsliding by communities and government, programs such as micro business assistance and tecnhnical assistance for small business concerns must continue and grow. It is a need to diversify from their traditional roles into nontraditional roles and help establish industries by co- branding with community business development entities by creating grassroot solutlons to business development. In Southeast Bakersfield we have Mt. Elgon Corporation, that is .dedicated to promoting business in the Southeast .Bakersfield Area. Mt. Elgon, has been promoting a Business Incubator Program that would provide a springboard for small businesses locating within the area to build a foundation to grow and expand on. At numerous times the Incubator program has been brought to the city staff's a%~en~ion, now is the time for the Incubator project to be included in the ConPlan with funding allocations to bring needed business growth to the Southeast Bakersfield Area. I am requesting that as you look over the ConPlan, a Business Incubator Project be included under Economic 84/18/2888 82:16 6613247445 PRP:NEXTHKT: P~GE 84 Development. The government and private sector must step up to ~his challenge. If society whlshes %0 see the end of racial employment disparities, the solution is right at your fingertips. Past policies have not worked because they have been centered on promoting all businesses with the assumption that their employment growth will "trickle down" to minorities. But this has not happened. However, we can now see that promoting minority-owned businesses can solve the problem. In addition, it makes good economic sense - and good social sense. Sincerely, Stephanle Campbell Owner - Public Relations Plus/ Next Level Marketing B'A K E R S FIE L D 1501 TRUXTUN AVENUE · BAKERSFIELD CA 93301 PHONE (661) 326-3751 · FAX (661) 324-1850 FAX TRANSMISSION TO: PAT DeMOND DATE: April 18, 2000 FAX #: (661)281-0169 PAGES SENT: 5 INCLUDING COVER FROM: John Stinson Received attached by fax this afternoon. BAKERSFIELD 1501 TRUXTUN AVENUE · BAKERSFIELD CA 93301 PHONE (805) 326-3751 · FAX (805) 324-1850 FAX TRANSMISSION TO: JAKE WAGER FAX #: (661) 328-1548 5 PAGES INCLUDING COVER FROM: John Stinson We received the attached fax this afternoon. Copies will be made available for the meeting tomorrow. BAKERSFIELD 1501 TRUXTUN AVENUE · BAKERSFIELD CA 93301 PHONE (661) 326-3751 · FAX (661) 324-1850 FAX TRANSMISSION TO: MIKE MAGGARD FAX #: (661) 323-1579 PAGES SENT: 5 INCLUDING COVER FROM: John Stinson Received attached by fax this afternoon. ~ P, O1 ~ SEND REPORT ~ aPR-18-O0 TUE 16:59 ~ # DaTE START REOEIVER TX TINE PAGES TYPE NOTE M~ * O1 aPR-17 10:01 3241805 1'43" 3 SEND OK * 02 10:09 8522136 55" 1 SEND OK * 03 ~PR-18 16:16 3281548 3'21" 5 SEND OK ~ 04 16:52 2810169 3'06" 5 SEND OK z 05 16:56 3231579 3'09" 5 SEND OK ~ TOTAL 12' 14~19 * GR~ND TOTAL TIME: 14H 52M 6S PAGES: 26578 BAKERSFIELD Economic and Community Development Department MEMORANDUM April 17, 2000 TO: Jake Wager Economic Development Director FROM: David Chesney Business Manager SUBJECT: Possible Program Savings in CDBG Pursuant to your request, we have reviewed the CDBG projects for possible program savings and identified $105,228 in project savings. Of that amount, $84,804 is available now and $20,424 will be available after July 1, 2000. The projects are as follows: Name Available Before 7/1/00 Available After 7/1/00 Bakersfield Homeless Center $ 61 Looking Good Neighborhood $ 4,207 $10,000 Sewer Connection Fee $ 2,548 $ 8,000 Commercial Facade $18,826 $ 1,424 Substandard and Abandoned Structures $14,000 $ 1,000 URM 95 $ 1,006 URM 97 $ 6,859 URM 98 $ 2,297 Clearance and Demolition - URM $15,000 Rehab-Multi-Unit - URM $20,000 Total $84,804 $20,424 Additionally, the current year' s Action Plan includes $11,000 of CDBG funding for the proposed Precious Years Daycare project. That project appears to be stalled, and they are to respond by April 21, 2000 as to their ability to proceed with the project. If that project is canceled, total CDBG savings available to reprogram will equal $116,228. It will take a formal council-approved amendment which requires approximately 45 days to complete. Budget and Finance Committee backup information for Deferred Business Item 4A. TO: Alan Tandy, City Manager ,[/ FROM: Gregory J. Klimko, Finance Director/~//~ DATE: April 13, 2000 SUBJECT: AUDIT PROPOSAL Background Section 41 of the City's Charter provides that the City Council shall employ, at the beginning of each year, a certified public accountant. In order to keep the cost of this professional service competitive, the City has entered into initial one year contracts with four one year extensions. This has allowed the selected firm to spread their start up costs' over several years. The firm currently known as Brown, Armstrong, Randall, Reyes CPA's completed their second five year engagement with an audit of the 1998-99 fiscal year. Request for Proposals (RFP) Process The Finance Department staff sent inquiries to approximately eighty (80) local CPA firms using the City's business license file and telephone book. Five (5) local firms responded to our initial contact. Subsequently, four local and two non-local firms attended a mandatory pre proposal meeting. The two non-local firms are associated with local firms. The attendees were as follows: 1) Artis, Hare & Co., Inc. of Visalia, associated with J. Steven Pressley of Bakersfield. 2) Brown, Armstrong, Randall, Reyes, Paulden & McCown Of Bakersfield. 3) Conrad and Associates, L.L.P. of Irvine, associated with Carpenter, Kuhen and Sprayberry of Bakersfield. 4) Daniells, Phillips, Vaughan and Bock of Bakersfield. The City received two audit proposals. Enclosed are the proposals submitted by: 1) Brown, Armstrong, Randall, Reyes, Paulden & McCown. 2) Conrad and Associates in association with Carpenter, Kuhen and Sprayberry. City Manager - Audit Proposals April 11,2000 Page 2 Representatives of each firm will be available on Wednesday April 19, 2000 for a shod introduction not to exceed five minutes, and to answer any committee concerns. During your evaluation, the Committee may want to consider the following areas: A. The size and structure of the firm. B. The firm's experience and performance as it relates to auditing governmental entities in general and specifically cities. C. The qualifications of the personnel assigned to the audit team and the firms management support. The typical audit team, at minimum, consists of: ,/ 1 Partner (report review) ,/ 1 Manager (fieldwork review) 1 Senior Accountant (directs fieldwork) ,/ Staff Accountants (perform fieldwork) D. The reasonableness of time estimates to perform the services required. E. The experience of the firm in assisting City staff in maintaining the ability to continue to achieve national (GFOA) and State (CSFMO) awards for high standards in financial reporting. F. The ability to provide support services and consult on: ,/ Debt Refinancing ,/ Arbitrage Calculations ,/ Actuarial Services V' New additional reporting requirements G. Potential conflicts of interest. H. Cost of services to be provided. The audit firm is chosen by and works directly for the City Council. The firm's primary goal is to express an opinion on the annual financial statements prepared by the City Finance Department. While cost is an important factor, it should not be the only factor when considering a professional service contract and appointment of the external audit firm. Staff will prepare a contract at the direction of the committee for consideration by the City Council. Attached is a comparative schedule, which may assist you in your analysis, along with a copy of the City's RFP and the proposals submitted by the CPA firms. S:\Darrin\Gregory\Memo - Tandy - AuditProposal.wpd City of Bakersfield Proposals for Services Audit of 1999-00 FY Firm Size Brown Conrad Partners 7 8 Managers 10 11 Seniors 8 17 Professional Staff 22 25 Support Staff 16 4 Total personnel 63 65 Reference page 5 page 1 Hours Detail Brown Conrad Partners 110 62 Senior Manager 132 Senior Auditor 290 193 Staff 500 388 Total Hours 900 775 Reference page 15 page 27 Alternate A Full Scope Audit "In Relation To" Quote Detail Brown Conrad Brown Conrad City of Bakersfield $27,600 $34,240 $21,600 $32,640 Bakersfield RDA 5,200 5,120 5,200 5,120 Bakersfield PFA 2,200 2,048 2,200 2,048 Single Audit 3,500 7,680 3,500 7,680 Wastewater Management Plan 1,000 512 1,000 512 Total Audit Services $ 39,500 $ 49,600 $ 33,500 $ 48,000 S:\Darrin\Gregory\Wksht - AuditProposalsAnalysis.qpw 04/11/00 BAKERSFIELD CITY MANAGER'S OFFICE MEMORANDUM April 13, 2000 TO: Councilmember Patricia DeMond FROM: John W. Stinso~n,~s~sistant City Manager SUBJECT: Budget and Finance Committee- Scheduling of Agenda Items Due to the large number of agenda items which had been scheduled for the April 19, 2000 Budget and Finance Committee and the limited time available to adequately address all of the issues before the Committee it will be necessary to defer several agenda items to the next meeting in May or subsequent Committee meetings. Pursuant to our phone conversation, the following items will be deferred: · Discussion and possible recommendation regarding building relationships with our State and Federal Elected Officials to obtain additional project funding/lobbying efforts · Discussion regarding the Equipment Management Fund · Discussion and Committee recommendation regarding request from Image Bakersfield 2000 for City of Bakersfield sponsorship · Discussion and Committee recommendation for establishing procedures for evaluating ambulance service rates Staff will continue to prepare these items for presentation to the Committee on future agendas. cc. Alan Tandy, City Manager SSJOHNhMemo Template.wpd DOLLAR COST BID CITY OF BAKERSFIELD. CALIFORNIA March 27. 2000 _.t DOLLAR COST BID CITY OF BAKERSFIELD, CALIFORNIA March 27, 2000 Name of Firm: Brown Armstrong Randall Reyes Paulden & McCown Accountancy Corporation Certification: We certify that Andrew J. Paulden is entitled to represent our firm and is empowered to submit our bid and is authorized to sign agreements with the City of Bakersfield. Price: Financial Statements Full Scope Alternate A City of Bakersfield - Comprehensive Annual Financial Report and Management Letter $ 27,600 $ 21,600 Bakersfield Redevelopment Agency - Annual Financial Report 4,000 4,000 Public Finance Authority - Annual Financial Report 2,200 2,200 Compliance Reports Single Audit 3,500 3,500 Redevelopment Agency 1,200 1,200 Wastewater Management Plan 1,000 1,000 Out-of-Pocket Expense ~ $ 33,500 Authorized Signature: ~. . CITY OF BAKERSFIELD, CALIFORNIA SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 1999-2000 FINANCIAL STATEMENTS Standard Quoted Hourly Hourly Hours Rates Rates Total Partners 110 $140 105 $ 11,550 Senior 290 80 60 17,400 Staff 500 50 37 18,500 Subtotal 900 47,500 Discount <7,950> Total Audit Services 39,500 Total for services described in Section II E of the request for proposals (detail in subsequent schedules) 11700 Out-of-pocket expenses: Meals and lodging _ Transportation . Other (specify): _ Total alMnclusive maximum price for 1999-2000 audit $ 41,200 CITY OF BAKERSFIELD, CALIFORNIA SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 1999-2000 FINANCIAL STATEMENTS: COMBINING SCHEDULE - ALL SERVICES DESCRIBED IN THE REQUEST FOR PROPOSALS SECTION II E Total Nature of Service to be Performed Price 1. GFOA Financial reporting Program (Note 1) $ 2. Interaction with State Controller's Office (Note 1) - 3. Consent and Citation of Expertise 510 4. Comfort letter 954 5. Schedule of expenditures of Federal Awards (Note 2) 6. Consulting - payroll, etc. 236 Total $ 1,700 Note 1 - Brown Armstrong will perform these services free of charge. Note 2 - Included in our annual fee. CITY OF BAKERSFIELD, CALIFORNIA SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 1999-2000 FINANCIAL STATEMENTS: SUPPORTING SCHEDULE FOR CITY OF BAKERSFIELD CONSENT AND CITATION OF EXPERTISE Standard Quoted Hourly Hourly Hours Rates Rates Total Partners 3 $140 90 $ 270 Senior 5 80 48 240 Staff . Subtotal 8 510 Out-of-pocket expenses: Meals and lodging . Transportation Other (specify): Total price for City of Bakersfield $_ 510 ~,,, ~" CITY OF BAKERSFIELD, CALIFORNIA SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 1999-2000 FINANCIAL STATEMENTS: SUPPORTING SCHEDULE FOR CITY OF BAKERSFIELD COMFORT LETTER Standard Quoted Hourly Hourly HOurs Rates Rates Total Partners 1 $140 90 $ 90 Senior 18 80 48 864 Staff Subtotal 19 954 Out-of-pocket expenses: Meals and lodging _ Transportation _ Other (specify): _ Total price for City of Bakersfield ~ CITY OF BAKERSFIELD, CALIFORNIA SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 1999-2000 FINANCIAL STATEMENTS: SUPPORTING SCHEDULE FOR CITY OF BAKERSFIELD CONSULTING - PAYROLL, ETC. Standard Quoted Hourly Hourly Hours Rates Rates Total Partners 1 $140 90 $ 90 Senior 3 80 48 146 Staff - _ Subtotal 4 236 Out-of-pocket expenses: Meals and lodging _ Transportation _ Other (specify): _ Total price for City of Bakersfield $ 236 City of Bakersfield REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES March l, 2000 1501 Truxtun Avenue Bakersfield, CA 93301 City of Bakersfield REOUEST FOR PROPOSALS TABLE OF CONTENTS I. INTRODUCTION A. General Information B. Term of Engagement C. Subcontracting II. NATURE OF SERVICES REQUIRED A. General B. Scope of Work to be Performed C. Auditing Standards to be Followed D. Reports to be Issued E. Special Considerations F. Working Paper Retention and Access to Working Papers III. DESCRIPTION OF THE GOVERNMENT A. Name and Telephone Number of Contact Persons/Organizational Chart/Location of Offices B. Background Information C. Fund Structure D. Budgetary Basis of Accounting E. Federal and State Awards F. Pension Plans G. Component Units H. Joint Ventures I. Magnitude of Finance Operations J. Computer .Systems K. Internal Audit Function L. Availability of Prior Reports and Working Papers IV. TIME REQUIREMENTS A. Proposal Calendar B. Notification and Agreement Dates C. Date Audit May Commence D. Schedule for the 1999-2000 Fiscal Year Audit 1. Interim Work 2. Detail Audit Plan and Programs 3. Fieldwork 4. Draft Repons E. Entrance Conferences, Progress Reporting and Exit Conferences F. Date Final Report is Due V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department and Clerical Assistance B. Management Information Service (MIS) Assistance C. Statements and Schedules to be Prepared by the Staffofthe City of, Bakersfield D. Work Area, Telephone, Photocopying and FAX Machines E. Report Preparation VI. PROPOSAL REQUIREMENTS A. General Requirements 1. Submission of Notification of Interest 2. Preproposal Conference and On-site Inspections 3. Inquiries 4. Submission of Proposals B. Technical Proposal I. General Requirements 2. Independence 3. License to Practice in California 4. Firm Qualifications and Experience 5. Partner, Supervisory and StaffQualifications and Experience 6. Prior Engagements with the City of Bakersfield 7. Similar Engagements with Other Government Entities 8. Specific Audit Approach 9. Identification of Anticipated Potential Audit Problems 10. Report Format C. Sealed Dollar Cost Bid 1. Total Ali-Inclusive Maximum Price 2. Rates by Partner, .Specialist, Supervisory and Staff Level Times Hours Anticipated for Each 3. Out-of-pocket Expenses in the Total All-inclusive Maximum Price and Reimbursement Rates 4. Rates for Additional Professional Services 5. Manner of Payment VII. EVALUATION PROCEDURES A. Audit Committee B. Review of Proposals C. Evaluation Criteria 1. Mandatory Elements 2. Technical Qualifications 3. Price D. Oral Presentations E. Final Selection F. Right to Reject Proposals APPENDICES A. Management Letter for June 30, 1999 audit B. Organizational Chart C. List of Key Personnel, Office Locations and Telephone Numbers D. Proposer Guarantees E. Proposer Warranties F. Format for Schedule of ProfeSsional Fees and Expenses to Support the Total All- Inclusive Maximum Price City of Bakersfield REQUEST FOR PROPOSALS I. INTRODUCTION A. General Information The City of Bakersfield is requesting proposals from qualified firms of certified public accountants to audit its financial statements for the fiscal year ending June 30, 2000, with the option of auditing its financial statements for each of the four (4) subsequent fiscal years. These audits are to be performed in accordance with generally accepted auditing standards, the standards set forth for financial audits in the General Accounting Office's (GAO) Government Auditing Standards (1994), the provisions of the federal Single Audit Act of 1984 (as amended in 1996) and U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States. Local Governments, and Non-Profit Organizations as well as the following additional requirements: 1. Guidelines for Compliance Audits of California Redevelopment Agencies prepared by the State Controller of the State of California. There is no expressed or implied obligation for the City of Bakersfield to reimburse responding firms for any expenses incurred in preparing proposals in response to this request. A mandatory preproposal conference for all the firms interested in submitting a proposal will be held at 11:00 a.m. on Thursday, March 9, 2000 at 1501 Truxtun Avenue in the City Council Chambers to answer questions about the engagement. After this preproposal conference, any inquiries concerning the request for proposals should be addressed to Gregory J. Klimko. All interested audit firms must have a representative at the preproposal conference. To be considered, ten (10) copies of a proposal must be received by Gregory J. Klimko at 1501 Truxtun Avenue, Bakersfield, CA 93301 by 5:00 p.m. on March 27, 2000. The City of Bakersfield reserves the right to reject any or all proposals submitted. Proposals submitted will be evaluated by City staff with recommendation for the City Council. During the evaluation process, the Audit Committee and the City of Bakersfield reserve the right, where it may serve the City of Bakersfield's best interest, to request additional information or clarifications from proposers, or to allow corrections of errors or omissions. At the discretion of the City of Bakersfield, firms submitting proposals may be requested to make oral presentations as part of the evaluation process. The City of Bakersfield reserves the right to retain all proposals submitted and to use any ideas in a proposal regardless of whether that proposal is selected. Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposals, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the City of Bakersfield and the firm selected. It is anticipated the selection of a firm will be completed by April 26, 2000. Following the notification of the selected firm it is expected a contract will be executed between both parties by May 10, 2000. B. Term of Engagement A five (5) year agreement is contemplated, subject to the annual review and recommendation of City staff, the satisfactory negotiation of terms (including a price acceptable to both the City of Bakersfield and the selected firm), the concurrence of the City Council and the annual availability of an appropriation. If any of the above criteria cannot be satisfied, the City retains the right to give a thirty (30) day cancellation notice. C. Subcontracting. Firms submitting proposals are encouraged to consider subcontracting portions of the engagement to small audit firms or audit firms owned and controlled by socially and economically disadvantaged individuals. If this is to be done, that fact, and the name of the proposed subcontracting firms, must be clearly identified in the proposal. Following the award of the audit contract, no additional subcontracting will be allowed without the express prior written consent of the City of Bakersfield. II. NATURE OF SERVICES REQUIRED A. General The City of Bakersfield is soliciting the services of qualified firms of certified public accountants to audit its financial statements for the fiscal year ending June 30, 2000, with the option to audit the City of Bakersfield's financial statements for each of the four (4) subsequent fiscal years. These audits are t° be performed in accordance with the provisions contained in this request for proposals. B. Scope of Work to be Performed The City of Bakersfield desires the auditor to express an opinion on the fair presentation of its general purpose financial statements in conformity with generally accepted accounting principles. In order to make a comprehensive decision regarding the scope of audit, the City will solicit individual prices on two (2) separate types of audit. The first type being a full scope audit, as described in the next paragraph. The second type referred to as "Alternate A" is an "in-relation-to" Full Scope: The City of Bakersfield desires the auditor to express an opinion on the fair presentation of its general purpose financial statements, as well as, its combining and individual fund and account group financial statements and schedules in conformity with generally accepted accounting principals. If applicable, the auditor is to provide an "in-relation-to" repoff on any supporting schedules based on the auditing procedures applied during the audit of the general purpose financial statements and the combining and individual fund financial statements and schedules. The auditor is not required to audit the statistical section of the report. Alternate A: This alternative requires the auditor to express an opinion on the fair presentation of its general purpose financial statements. The auditor is to provide an "in- relation-to" report on the combining and individual fund and account group financial statements and supporting schedules based on the auditing procedures applied during the audit of the general purpose financial statements. The auditor is not required to audit the statistical section of the report. C. Auditing Standards To Be Followed To meet the requirements of this request for proposals, the audit shall be performed in accordance with generally accepting auditing standards as set forth by the American Institute of Certified Public Accountants, the standards for financial audits set forth in the U.S. General Accounting Office's Government Auditing Standards (1994), the provisions of the Single Audit Act of 1984 (as amended in 1996) and the provisions of U.S. Office of Management and Budget (OMB) Circular A- 133, Audits of States, Local Governments, and Non-Profit Organizations, Audits of State and Local Government~, and Guidelines for Compliance Audits of California Redevelopment Agencies (November, 1998 revised) prepared by the State Controller of the State of California. D. Reports to be Issued Following the completion of the audit of the fiscal year's financial statements, the auditor shall issue an independent auditors report to be included in the following financial reports: 1. Comprehensive Annual Financial Reports 2. Bakersfield Redevelopment Agency Annual Financial Report 3. Public Finance Authority Annual Financial Report In addition, the following compliance reports must be issued separately or in conjunction with the reports listed above: 1. Single Audit 2. Bakersfield Redevelopment Agency 3. Wastewater Management Plan 4. Appropriation Limit Also, the Auditor will be responsible for drafting the Notes to the General Purpose Financial Statements. As well as, submitting a Management Letter to the City Council. In the required report[s] on compliance and internal controls, the auditor shall communicate any reportable conditions found during the audit. A reportable condition shall be defined as a significant deficiency in the design or operation of the internal control structure, which could adversely affect the organization's ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements. Reportable conditions that are also material weaknesses shall be identified as such. in the report. Nonreportable conditions discovered by the auditors shall be reported in a separate letter to management, which shall be referred to in the report[s] on compliance and internal controls. The report on compliance and internal controls shall include all material instances of noncompliance. All nonmaterial instances of noncompliance shall be reported in a separate management letter, which shall be referred to in the report on compliance and internal controls. Irregularities and illegal acts. Auditors shall be required to make an immediate, written report of all irregularities and illegal acts or indications of illegal acts of which they become aware to the following parties: Alan E. Tandy, City Manager Bart Thiltgen, City Attomey Gregory J. Klimko, Finance Director Reporting to the audit committee. Auditors shall assure themselves that the City of Bakersfield is informed of each of the following: 1. The auditor's responsibility under generally accepted auditing standards' 2. Significant accounting policies 3. Management judgments and accounting estimates 4. Significant audit adjustments 4 ~' 5. Other information in documents containing audited financial statements 6. Disagreements with management 7. Management consultation with other accountants 8. Major issues discussed with management prior to retention 9. Difficulties encountered in performing the audit E. Special Considerations 1. The City of Bakersfield will send its comprehensive annual financial report to the Government Finance Officers Association of the United States and Canada for review in their Certificate of Achievement for Excellence in Financial Reporting program. It is anticipated that the auditor will be required to provide special assistance to the City of Bakersfield to meet the requirements of that program. 2. The City of Bakersfield has determined that the State Controller's Office of the State of California will function as the cognizant agency in accordance with the provisions of the Single Audit Act of 1984 (as amended' in 1996) and U.S. Office of Management and Budget (OMB) Circular A- 133~_A udits of States, Local Governments, and Non-Profit ' Organizations. 3. The City of. Bakersfield currently anticipates it will prepare one or more official statements in connection with the sale of debt securities which will contain the general purpose financial statements and the auditor's report thereon. The auditor shall be required, if requested by the fiscal advisor and/or the underwriter, to issue a "consent and citation of expertise" as the auditor and any necessary "comfort letters." 4. The City may also require special consulting services such as federal tax advice regarding the payroll of the City. Any charge for such services should be listed separately. 5. The Schedulk of Expenditures of Federal Awards and related auditor's report, as well as the reports on compliance and internal controls are not to be included in the comprehensive annual financial report, but are to be _ issued separately. 6. A list of findings and other weaknesses from the City of Bakersfield's most recent financial statement audit, as well as a list of findings from internal audits conducted during the most recent fiscal period to be audited, are attached to this document (Appendix A). 7. Difficulties are anticipated in implementing and complying with the following specific reporting requirements recently mandated by GASB 34, Basic Financial Statements - and Management's Discussion and Analysis for State and Local Governments. The City must be in compliance for periods beginning after June 15, 2001. Using the new reporting model will be a very complex and complicated undertaking. Specific provisions that may cause difficulties will include researching and documenting infrastructure costs and developing and maintaining the additional information needed to prepare financial statements. The City of Bakersfield will require the auditor's assistance to be in compliance with these new reporting requirements for the 2001-02 Fiscal Year. F. Working Paper Retention and Access to Working Papers All working papers and reports must be retained, at the auditor's expense, for a minimum of five (5) years, unless the firm is notified in writing by the City of Bakersfield of the need to extend the retention periOd.. The auditor will be required to make working papers available, only upon written request by the City's Finance Director. In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting significance. III. DESCRIPTION OF THE GOVERNMENT A. Name and Telephone Number of Contact Persons/Organizational Chart/Location of Offices The auditor's principal contact with the City of Bakersfield will-be Gregory J. Klimko, Finance Director, or a designated representative, who will coordinate the assistance to be provided by the City of Bakersfield to the auditor. An organizational chart (Appendix B) and a list of key personnel with the location of their principal offices (Appendix C) are attached. B. Background Information The City of Bakersfield serves an area of 114 square miles with a population of 230,771. The City of Bakersfield's fiscal year begins on July I and ends on June 30. The City of Bakersfield provides the following services to its citizens: 1. General Government. 2. Public Safety. 3. Public Works. 4. Development and Conservation. 5. Auditorium and Recreational. The City of Bakersfield has a total payroll of 54 million covering 1,180 employees. The City of Bakersfield operates under a Council-Manager form of government and is organized into nine (9) departments and agencies. The accounting and financial reporting functions of the City of Bakersfield are centralized. C. Fund Structure The City of Bakersfield currently uses the following fund types and account groups in its financial reporting: Number of Number With Individual Legally Adopted Fund Type/Account Group Funds ~ General fund 1 1 Special revenue funds 7 7 Debt service funds 2 2 Capital projects funds 6 6 Enterprise funds 6 6 intemal service funds 2 2 Expendable trust funds 0 0 Nonexpendable trust funds 0 0 Pension trust funds 1 0 Agency funds 2 0 General fixed assets account group 2 NA General long-term debt account group 3 NA D. Budgetary Basis of Accounting The City of Bakersfield prepares its budgets on a basis consistent with generally accepted accounting principles. E. Federal and State Awards During the fiscal year to be audited, the City of Bakersfield received the following: CDFA Number U. S. Department of Housing and Urban Development; Direct Program - Community Development Block Grant Entitlement 14.218 Emergency Shelter Grant 14.231 Home Program 14.239 U.S. Department of TransPortation: Passed through California: Surface Transportation 20.205 Transportation Enhancement Act 20.205 Congestion Mitigation and Air Quality Program 20.205 -Highway Bridge Replacement 20.205 Environmental Enhancement 20.205 Federal Emergency Management Agency: Public Assistance Grant 83.544 U.S. Department of Justice: Seized Asset Funds - Federal 16.579 .... Community Oriented Policing Services Universal Hiring Program 16.710 Local Law Enforcement Block Grant 16.592 F. Pension Plans The City of Bakersfield participates in the following pension plans: Multiple-Employer · Single-Employer Cost- Defined Defined Plan Sharing Agent Benefit Contrib. State of California Public Retirement System (PERS) X Fireman's Relief & Pension Fund (FRPF) X Actuarial services for these plans are provided by State of California (PERS) and Peat Marwick Main and Company (FRPF). ~. G. Component Units The City of Bakersfield is defined, for financial reporting purposes, in conformity with the Governmental Accounting Standards Board's Codification of Governmental Accounting and Financial Reporting Standards, Section 2100. Using these criteria, component units are included in the City of Bakersfield's financial statements. The management of the City of Bakersfield identified the following component units for inclusion in the City of Bakersfield's financial statements: 1. Bakersfield Redevelopment Agency a. Redevelopment within the following project areas: · Downtown Bakersfield · Old Town Kern-Pioneer · Southeast Bakersfield b. Fiscal year ending June 30, 2000 2. Public Finance Authority a. Financing of public improvements b. Refunding existing issues c. Fiscal year ending June 30, 2000 The successful audit firm will be expected to provide an opinion on each Component Unit Financial Statement, as well as Compliance Reports. The component units are to be audited as part of the audit of the City of Bakersfieid's financial statements. H. Joint Ventures The City of Bakersfield does participate in joint ventures with other governments. NAME OF NAME OF OTHER TYPE OF JOINT VENTURE PARTICIPATING GOVERNMENT(S) SERVICES PROVIDED Authority for City of: Self Insurance for liability California Cities Anaheim and' Joint Purchase for Excess Liability Modesto Workers Compensation (ACCEL) Monterey Insurance Mountain View Ontario Paio Alto Santa Barbara Santa Cruz 'Santa Monica Visalia I. Magnitude of Finance Operations The finance department is headed by Gregory J. Klimko, Finance Director and consists of thirty-one (31) employees. The principal functions performed and the number of employees assigned to each are as follows: Function Number of Employees Administration 2 Accounting 14 Treasury 9 Purchasing 4 Property Management 2 J. Computer Systems The City of Bakersfield maintains its major financial accounting systems on an IBM AS400 using HTE, Inc. software. The major financial applications include: General Ledger and Budgetary_ Accounting - The City of Bakersfield maintains seventy-seven (75) independent funds which are combined manually to thirty-two (32) reporting funds. During the year, an estimated 6,500 journals will be processed from the following subsystems: 1. Payroll - The City of Bakersfield's payroll system maintains information on approximately 1,180 regular employees paid on a bi-weekly basis. The City of ~. Bakersfield will process approximately 14,000 paychecks and 22,000 direct '~ deposits during the fiscal year. 2. Accounts Payable - The City of Bakersfield's accounts payable system is an automated vouchering system for vendor payments. At the present time, this system maintains a database for approximately 9,000 vendors. The City of Bakersfield will disburse approximately 26,000 accounts payable checks during the fiscal year. 3. Accounts Receivable - The City of Bakersfield's accounts receivable system currently includes utility billing for commercial refuse collection and sewer surcharge ( 4200 monthly), outside City sewer usage (300 bi-monthly) and miscellaneous receivables (2500 monthly). K. Internal Audit Function The City of Bakersfield maintains an internal audit function that is primarily responsible for reconciliation of all the City of Bakersfield's bank accounts. The internal audit function reports to Bill Descary, City Treasurer and is staffed by one (1) employee. L. Availability of Prior Audit Reports and Working Papers Interested proposers who wish to review prior years' audit reports and management letters should contact Gregory J. Klimko at (661) 326-3030. The City of Bakersfield will use its best efforts to make prior audit reports and supporting working papers available to proposers to aid their response to this request for proposals. IV. TIME REQUIREMENTS A. Proposal Calendar The following is a list of key dates up to and including the date proposals are due to be submitted: Request for proposal issued March 1, 2000 Preproposal Conference March 9, 2000 Due.date for notification of interest March 17, 2000 Due date for proposals March 27, 2000 B. Notification and Agreement Dates Selected firm notified April 26, 2000 Agreement date May 10, 2000 C. Date Audit May Commence The City of Bakersfield will have all records ready for audit and all management personnel available to meet with the firm's personnel as of August 21, 2000. D. Schedule for th~ 1999-2000 Fiscal Year Audit (A similar time schedule will be developed for audits of future fiscal years if the City of Bakersfield exercises its option for additional audits). Each of the following should be completed by the auditor no later than the dates indicated. 1. Interim Work The auditor shall complete interim work by July 14, 2000. 2. Detailed Audit Plan The auditor shall provide City of Bakersfield by July 17, 2000 both a detailed audit plan and a list Of all schedules to be prepared by the City of Bakersfield. 3. Fieldwork The auditor shall complete all fieldwork by October 6, 2000. 4. Draft Reports The auditor, shall have drafts of the audit report[s] and recommendations to management available for review by the Finance Director by October 24, 2000. E. Entrance Conferences, Progress Reporting and Exit Conferences (A similar time schedule will be developed for audits of future fiscal years if the City of Bakersfield exercises its option for additional audits). At a minimum, the following conferences should be held by the dates indicated on the schedule: Entrance conference with Finance Director May 31 ~ 2000 12 Entrance conference with all key finance department personnel and department heads of key offices or programs May 31, 2000 The purpose of this meeting will be to discuss prior audit problems and the interim work to be performed. This meeting will also be used to establish overall liaison for the audit and to make arrangements for work space and other needs of the auditor Progress conference with Finance Director and Assistant Finance Director July 14, 2000 The purpose of this meeting will be to summarize the results of the preliminary review and to identify the key internal controls or other matters to be tested Entrance conference with Finance Director to commence year-end audit work August 21, 2000 Exit conference with Finance Director and department heads of key offices or programs October 6, 2000 - The purpose of this meeting will be to summarize the results of the field work and to review significant findings In addition, the auditor shall provide written reports on the progress of the audit on the following dates: September 8, 2000 September 22, 2000 13 F. Date Final Report is Due (Comprehensive Annual Financial Report Only) The City Finance Department shall prepare draft financial statements and all required supplementary schedules (and statistical data) by October 16, 2000. The auditor shall provide the notes to the financial statements in addition to all recommendations, revisions and suggestions for improvement to the Finance Director by October 24, 2000. A final report will be ,delivered to the printer by October 31, 2000. During the period of October 6, 2000 to October 24, 2000 the auditor should be available for any meetings that may be necessary to discuss the audit reports. Once all issued for discussion are resolved, the auditor will be given a final draft of the report. It is anticipated that this process will be completed and the final report delivered to the City Council by November 15, 2000. All other statements and reports are to be completed by December 29, 2000. V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department and Clerical Assistance The finance department staff and responsible management personnel will be available during the audit to assist the firm by providing information, documentation and explanations. The prepara.tion of'confirmations will be the responsibility of the City of.Bakersfield. City staff will prepare trial balances and other supporting schedules that are to remain the property of the City but will be available to auditors. B. Management Information Services (MIS) Assistance The Management Information Services staff, equiprnent and generalized user software have not been used in the past for auditing ]purposes. However, the City is willing to commit a reasonable amount of computer time to assist an audit program. This assistance may vary depending on computer time available. MIS personnel will also be available to provide systems documentation and explanations. C. Statements and Schedules to be Prepared by the Staffofthe City of Bakersfield The staff of City of Bakersfield will prepare the following statements and schedules for the auditor by the dates indicated: Statement or Schedule Date Trial Balance: General Fund August 21 Special Revenue Funds August 21 Debt Service Funds August 21 Capitol Project Funds August 28 Enterprise Funds September 1 Internal Service Funds September 1 Trust and Agency Funds September 1 General Fixed Assets Group August 21 General Long-Term Debt Group August 21 Accounts Payable Reconciliation September 8 Property Tax Reconciliation September 15 Compensated Absences September 1 Federal Financial Assistance September 15 Interest Allocation August 21 Bank Transfers August 21 Appropriations Reconciliation August 21 Statistical Schedules October 6 D. Work Area, Telephones, Photocopying and FAX Machines The City of Bakersfield will provide the auditor with reasonable work space, desks and chairs. The City Finance Department uses a "flex-time" schedule for its employees; therefore, the Finance offices may be available for 9 ½ hour workdays. The auditor will also be provided with access to telephone lines, photocopying facilities 'and FAX machines subject to the following restrictions: 1. All long distance phone calls are to be reimbursed to the City of Bakersfield. E. Report Preparation Financial statement' preparation and printing shall be the responsibility of the City of Bakersfield. The auditor will be responsible for preparing the Notes to the General Purpose Financial Statements, as well as editing and proofing the final draft. VI. 3.$ PROPOSAL REQUIREMENTS A. General Requirements 1. Submission of Notification of Interest Firms interested in submitting a proposal must submit by March 17, 2000 their "Notification of Interest" in the format at~Iached to the letter transmitting this Request for Proposal. Failure: to do so will disqualiSj firms from.submitting a proposal. 2. Preproposal Conference and On-site Inspections A conference for firms interested in submitting; proposals will be held at 11 a.m., March 9, 2000 in the City Council Chambers at City Hall, 1501 Truxtun Avenue. Both verbal and written questions will be accepted during the conference. All audit firms interested in submitting a proposal must attend 3. Inquiries Inquiries concerning the request for proposals and the subject of the request for proposals must be made to: Gregory J. Klimko, Finance Director 1501 Truxtun Avenue Bakersfield, CA 93301 (661) 326-3740 CONTACT WITH PERSONNEL FO THE CITY OF BAKERSFIELD OTHER THAN GREGORy J. KLIMK0 REGARDING THIS REQUEST FOR PROPOSALS MAY BE GROUNDS FOR ELIMINATION FROM THE SELECTION PROCESS. 4. Submission of Proposals The following material is required to be received by March 31, 2000 for a proposing firm to be considered: a. A master copy (so marked) of a Technical Proposal and six (6) copies to include the following: i. Title Page Title page showing the request for proposals subject; the firm's name; the name,, address and telephone number of the contact person; and the date of the proposal. 3.6 ~, ii. Table of Contents iii. Transmittal Letter A signed letter of transmittal briefly stating the proposer's understanding of the work to be done, the commitment to perform the work within the time period, a statement why the firm believes itself to be best qualified to perform the engagement and a statement that the proposal is a firm and irrevocable offer for one hundred and twenty days (120) days. iv. Detailed Proposal The detailed proposal should follow the order set forth in Section VI B of this request for proposals. ' v.Executed copies of Proposer Guarantees and Proposer Warranties, attached to this request for proposal~ D and Appendix E) b. The proposer shall submit an original and 1 (one) copy of a dollar cost bid in a separate sealed envelope marked as follows: SEALED DOLLAR COST BID PROPOSAL FOR City of Bakersfield FOR PROFESSIONAL AUDITING SERVICES 1999-2000 c. Proposers should send the completed proposal consisting of the two separate envelopes to the following address: Gregory J. Klimko 1501 Truxtun Avenue Bakersfield, CA 93301 B. Technical Proposal 1. General Requirements The purpose of the Technical Proposal is to demonstrate the qualifications, competence and capacity of the firms seeking to undertake an independent audit of the City of Bakersfield in conformity with the requirements of this request for proposals. As such, the substance of proposals will carry more weight than their form or manner of 1'7 presentation. The Technical Proposal should demonstrate the qualifications of the firm and of the particular staff to be assigned to this engagement. It should also specify an audit approach that will meet the request for proposals requirements. THERE. SHOULD BE NO DOLLAR UNITS 'OR TOTAL COSTS INCLUDED IN THE TECHNICAL PROPOSAL DOCUMENT. The Technical Proposal should address all the points outlined in the request for proposals (excluding any cost information which should only be included in the sealed dollar cost bid). The Proposal should be prepared simply and economically, providing a straightforward, concise description of the proposer's capabilities to satisfy the requirements of the request for proposals. While additional data may be presented, the following subjects, items Nos. 2 through 10, must be included. They represent the criteria against which the proposal will be evaluated. 2. Independence The firm should provide an affirmative statement that is independent of the City of Bakersfield as defined by the U.S. General Accounting Office's Government Auditing Standards (1994)] The firm also should provide an affirmative statement that it is independent of all of the component units of the City of Bakersfield as defined by those same standards. The firm should also list and describe the firm's (or proposed subcontractors') professional relationships involving the City of Bakersfield or any of its component units or primary government for the past five (5) years, together with a statement explaining why such relationships do not constitute a conflict of in'retest relative to performing the proposed audit. In addition, the firm shall give the City of Bakersfield written notice of any professional relationships entered into during the period of this agreement. 3. License to Practice in California An affirmative statement should be included 'that the firm and all assigned key professional staff are properly licensed to practice in California. 4. Firm Qualifications and Experience The proposer should state the size of the firm, the size of the firm's governmental audit staff, the location of the office from which the work on this engagement is to be performed and the number and nature of the 1.8 professional staff to be employed in this engagement on a full-time basis and the number and nature of the staff to be so employed on a part-time basis. If the proposer is a joint venture or consortium, the qualifications of each firm comprising the joint venture or consortium should be separately identified and the firm that is to serve as the principal auditor should be noted, if applicable. The firm is also required to submit a copy of the report on its most recent external quality control review, with a statement whether that quality control review included a review of specific government engagements. The firm shall also provide information on the results of any federal or state desk reviews or field review, s of its audits during the past three (3) years. In addition, the firm shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three (3) years with state regulatory bodies or professional organizations. 5. Partner, Supervisory and Staff Qualifications and Experience Identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement. Indicate whether each such person is registered or licensed to practice as a certified public accountant in California. Provide information on the government auditing experience of each person, including information on relevant continuing professional education for the past three (3) years and membership in professional organizations relevant to the performance of this audit. Provide as much information as possible regarding the number, qualifications, experience and training, including relevant continuing professional education, of the specific staff to be assigned to this engagement. Indicate how the quality of staff over the term of the agreement will be assured. The proposer should identify the extent to which staffto be assigned to the audit reflect the City of Bakersfield's commitment to Affirmative Action. Engagement panners, managers, other supervisory staff and specialists may be changed if those personnel leave the firm, are promoted or are assigned to another office.. These personnel may also be changed for other reasons with the express prior w~'itten permission of the City of Bakersfield. However, in either case, the City of Bakersfield retains the right to approve or reject replacements. 19 Consultants and firm specialists mentioned in :response to this request for proposal can only be changed with the express, prior written permission of the City of Bakersfield, which retains the right to approve or reject replacements. Other audit personnel may be changed at the discretion of the proposer provided that replacements have substantially the same or better qualifications or experience. 6. Prior Engagements with the City of Bakersfield List separately all engagements within the last five years, ranked on the basis of total staff hours, for the City of Bakersfield by type of engagement (i.e., audit, management advisory services, other). Indicate the scope of work, date, engagement partners, total hours, the location of the firm's office from which the engagement was performed, and the name and telephone number of the principal client contact. 7. Similar Engagements With Other Government Entities For the firm's office that will be assigned responsibility for the audit, list the most significant engagements (maximum - 5) performed in the last five years that are similar to the engagement described in this request for proposal. These engagements should be ranked on the basis of total staff hours. Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact. 8. 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 in Section II of this request for proposal. In developing the work plan, reference should be made to such sources of information as City of Bakersfield'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 segmentation of the engagement b. Level of staff and number of hours to be assigned to each proposed segment of the engagement NO DOLLARS SHOULD BE INCLUDED IN THE TECHNICAL P R__.RQP. Q_$ A L 2O % ~ c. Sample size and the extent to which statistical sampling is to be used in the engagement d. Extent of use of EDP software in the engagement e. Type and extent of analytical procedures to be used in the engagement f. Approach to be taken to gain and document an understanding of the City of Bakersfield's internal control structure g. Approach to be taken in determining laws and regulations that will be subject to audit test work h.' Approach to be taken in drawing audit samples for purposes of tests of compliance 9. Identification of Anticipated Potential Audit Problems The proposal should identify and describe any anticipated potential audit problems, the firm's approach to resolving these problem and any special assistance that will be requested from the City of Bakersfield. 10. Report Format The proposal should include sample formats for required reports. NO DOLLARS SHOULD BE INCLUDED IN THE TECHNICAl, C. Sealed Dollar Cost Bid 1. Total All-Inclusive Maximum Price The sealed dollar cost bid should contain all pricing information relative to performing the audit engagement as described in this request for proposal. The total all-inclusive maximum price to be bid is to contain all direct and indirect costs including all out-of-pocket expenses. The City of Bakersfield will not be responsible for expenses incurred in preparing and submitting the technical proposal or the sealed dollar cost bid. Such costs should not be included in the proposal. The first page of the sealed dollar cost bid should include the following information: a. Name of Firm b. Certification that the person signing the proposal is entitled to represent the firm, empowered to submiit the bid, and authorized to sign an agreement with the City of Bakersfield. c. A Total All-Inclusive Maximum Price for the 2000 engagement. Alternate A Financial Statements Full Scope See page 3 City of Bakersfield - Comprehensive Annual Financial Report and Management Letter $ $ Bakersfield Redevelopment Agency - Annual Financial Report $ $ Public Finance Authority - Annual Financial Report $ $ Compliance Report Single Audit $ $ Redevelopment Agency $ $ Wastewater Management Plan $ $ 2. Rates by Partner, Specialist, Supervisory. and Staff Level Times Hours Anticipated for Each The second page of the sealed dollar cost bid should include a schedule of professional fees and expenses, presented in the format provided in the attachment (Appendix F), that supports the total all-inclusive maximum price. The cost of special services described in Section II E of this request for proposal should be disclosed as separate components of the total all- inclusive maximum price. 3. Out-of-p°cket Expenses Included in the Total All-inclusive Maximum Price and Reimbursement Rates 22 All estimated out-of-pocket expenses to be reimbursed should be presented on the second page of the sealed dollar cost bid in the format provided in the attachment (Appendix F). All expense reimbursements will be charged against the total all-inclusive maximum price submitted by the firm. 4. Rates for Additional Professional Services If it should become necessary for City of Bakersfield to request the auditor to render any additional services to either supplement the services requested in this RFP or to perform additional work as a result of the specific recommendations included in any report issued on this engagement, then such additional work shall be performed only if set forth in an addendum to the agreement between City of Bakersfield and the firm. Any such additional work agreed to. between City of Bakersfield and the firm shall be performed at the same rates set forth in the schedule of fees and expenses included in the sealed dollar cost bid. 5. Manner of Payment Progress payments will be made on the basis of hours of work completed during the course of the engagement and out-of-pocket expenses incurred in accordance with the firm's dollar cost bid proposal. Interim billing shall cover a period of not less than a calendar month. Ten percent (10%) will be withheld from each billing pending delivery of the firm's final reports. VII. EVALUATION PROCEDURES A. Audit Committee Proposals submitted will be evaluated by the Finance Director and Assistant Finance Director. B. Review of Proposals A point formula will be used during the review process to score proposals. A firm with an unacceptably low technical score will be eliminated from further consideration. After the composite technical score for each firm has been established, the sealed dollar cost bid will be opened and additional points will be added to the technical score based on the price bid. The maximum score for price will be assigned to the firm offering the lowest total all-inclusive maximum price. Appropriate fractional scores will be assigned to other proposers. The City of Bakersfield reserves the right to retain all proposals submitted and use any idea in a proposal regardless of whether that proposal is selected. 23 C. Evaluation Criteria Proposals will be evaluated using three sets of criteria. Firms meeting the mandatory criteria will have their proposals evaluated and scored for both technical qualifications and price. The following represent the principal selection criteria which will be considered during the evaluation process. 1. Mandatory Elements a. The audit firm is independent and licensed to practice in California b. The firm has no conflict of interest with regard to any other work performed by the firm for the City of Bakersfield c. The firm adheres to the instructions in this request for proposal on preparing and submitting the proposal d. The firm submits a copy of its last external quality control review report and the firm has a record of quality audit work. e. The audit firm's professional personnel have received adequate continuing professional education witlhin the preceding two years. 2. Technical Quality: (Maximum Points - 70) ::'. a. Expertise and Experience (Maximum Points - 40) (1) The firm's past experience and performance on comparable govemment engagements (with special emphasis on City audits). (2) The quality of the firm's professional personnel to be assigned to the engagement arid the quality of the firm's management support personnel to be available for technical consultation (3) Support services available (i.e. actuarial, bond arbitrage, refinancing, etc.) b. Audit Approach (Maximum Points - 130) (1) Adequacy of proposed staffing plan ~for various segments of the engagement (2) Adequacy of sampling techniques (3) Adequacy of analytical procedures 24 ~, ~ 3. Price: (Maximum Points - 30) COST WILL NOT BE THE PRIMARY FACTOR IN THE SELEt~TIQN OF AN AUDIT FIRM D. Oral Presentations During the evaluation process,' the Audit Committee may, at its discretion, request any one or ali firms to make oral presentations. Such presentations will provide firms with an opportunity to answer any questions the Audit Committee may have on a firm's proposal. Not all firms may be asked to make such oral presentations. E. Final Selection The City Council will select a firm based upon the recommendation of City Staff. It is anticipated that a firm will be selected by April 26 2000. Following notification of the firm selected, it is expected an agreement will be executed between both parties by May 10, 2000. F. Right to Reject Proposals 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 City of Bakersfield and the firm selected. The City of Bakersfield reserves the right without prejudice to reject any or all proposals. APPENDICES A. Findings from Recent External and Internal Audits B. Organizational Chart C. List of Key Officials, Office Locations and Telephone Numbers D. Proposer Guarantees E. Proposer Warranties F.. Format for Schedule of Professional Fees and Expenses to Support the Total All- inclusive Maximum Price 25 APPENDIX A Page 1 FINDINGS FROM RECENT EXTERNAL AND INTERNAL AUDITS ~. .. · .~:.. ,;; '.,, ,~,' ._.a,?~' ....' .~:~,: - ~:: . ~ ~ ' ~.a. · . · . .... ~/:-.~... ' gun~ H. A~s~ In plgn~ng gnd peffo~ng our ~t of the Cit~ ofB~s6eld, C~ifo~a (Ci~) for consider~ its ~t~ ~ntrol ~e in order to d~e~ne o~ ~ting s..~r.s,~.c,., procedures for ~e pu~ of ~re~ing o~ op~on on ~e g~e~. pu~ ,,~ ~,~. c~.~ financi~ stat~en~ md not to pro,de ~ce on ~e internal ~n~l ~e. t,..,r ~,,~.cP, ~r ~mideration of ~e inte~ ~nffol s~e wo~d not n~es~ly di~lo~ ~'L~,~..CP~ all ma~ers in the ~te~ control ~re ~t ~t be mat~ w~es~s ~,~.~.~.c~ under st~d~ds established by the ~e~n Institute of Ceaifi~ ~blic Account~ts. A material w~ne~ is a condition in w~ch the d~ign or operaion ~u~L~.C~a Of one or more of the internal ~n~ol ~m~re elements d~ not r~u~ ~ a ~,~ m .~. c~,, ~elatively low level ~e risk t~t e~ors or i~e~l~ties in amounts t~t would be e,,,~.~. ~,u~.c,.~ material in rel~on to ~e fin~cifl mtements being audited may occ~ ~ not be ~.~v ~...cP~ dete~ed ~n a timely ~fi~ by employes in the no~al ,:o~ of ~ffo~ng e~..x,..c~, their ~slgn~ ~n~ons. How~, we noted no rotters ~volving the inte~l control s~re md its op~aion that we ~mider defined above. ~is report is intend~ ~lely for the i~o~ation md use of ~the Audit Co~.ee, City Council, m~agement, md o~er authored re~latoq~ agencies. However. this repoa is a ma.~ of public r~r¢ md its di~fibution is not limit~. ACCO~CY CO~O~TION B~ersfield. Califo~a ~~ O~ober 8, 19~ 26 APPENDIX A Page 4 FINDINGS FROM RECENT EXTERNAL AND INTERNAL AUDITS Issue§ ~i.~:usse~ Prior tO Retention of Indeoendent Audi~or~ We generally discuss a vadety of matters, including the applicaUon of accounting principles and auditing standards, with management each year prior to retention as the City of Bakersfield's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Difficulties Encountered in Perf0rmina the We encountered no significant difficulties in dealing with management in performing our audit. This information is intended solely for the use of the City of Bakersfield and management of the City of Bakersfield and is not intended to be and should not be used by anyone other than these specified parties. BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN ACCOUNTANCY CORPORATION 29 APPENDIX B ORGANIZATIONAL CHART CITY OF BAKERSFIELD ORGANIZATIONAL CHART i Citizens of ;Bakersfield L Mayor Central Distnct I I -- '-~)~ds andI iDevelopment Commissions I I i" -City Attorney I . [ CTty Manag~ ] I [-'~a, Coun~,,_j ; ....... ~ -- ,_.~ ...... , I I xix 30 APPENDIX C LIST OF KEY PERSONNEL. OFFICE LOCATIONS AND TELEPHONE NUMBER Gregory J. Klimko, Finance Director 326-3030 · Sandra Jimenez, Assistant Finance Director (Acting) 326-3740 Bill Descary, Treasurer 326-3032 Darlene Wisham, Purchasing Officer 326-3745 Vicky Morillo, Internal Auditor 326-3093 Don Anderson, Property Management 326-3061 31 APP~ PROPOSER GUARANTEES I. The proposer certifies it can and will provide and make available, as a minimum, all services set forth in Section II, Nature of Services Required. Signature of Official: Name (typed): Title: Firm: Date: 32 APPENDIX E PROPOSER WARRANTIES A. Proposer warrants that it is willing and able to comply with State of California laws with respect to foreign (non-state of California) corporations. B. Proposer warrants that it is willing and able to obtain an errors and omissions insurance policy providing a prudent amount of coverage for the willful or negligent acts, or omissions of any officers, employees or agents thereof. C. Proposer warrants that it-will not delegate or subcontract its responsibilities under an agreement without the prior written permission of the City of Bakersfield. D. Proposer warrants that all information provided by it in connection with this proposal is true and accurate. Signature of Official: Name (typed):. Title: Firm: Date: 3B APPENDIX F Page 1 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 1999-00 FINANCIAL STATEMENTS Standard Quoted Hourly Hourly Hours Rates _Rates Total Partners Managers .__ Supervisory staff Staff Other (specify): .__ Subtotal Total for services Described in Section II E of the RFP (Detail on subsequent pages) Out-of-pocket expenses: , Meals and lodging Transportation Other (specify): Total all-inclusive maximum price for 2000 audit Note: The rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction from the total all-inclusive maximum price. 34 APPENDIX F Page 2 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 1999-00 FINANCIAL STATEMENTS: COMBINING SCHEDULE - ALL SERVICES DESCRIBED IN RFP SECTION II E Nature of Service To Be Provided Schedule Total Price EACH SERVICE DESCRIBED IN RFP SECTION II E SHOULD BE SUPPORTED BY AN INDIVIDUAL SCHEDULE IN THE FORMAT PROVIDED ON PAGE 3 OF THIS APPENDIX. 35 Appendix F Page 3 SCHEDULE QF PRQFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 1999-00 FINANCIAL STATEMENTS: SUPPORTING SCHEDULE FOR [NAME OF SERVICE] Standard Quoted Hourly Hourly Hour~ Rates Rates Total Partners Managers __ Supervisory staff __ Staff __ Other (specify): ' __ Subtotal Out-of-pocket expenses: Meals and lodging Transportation Other (specify): Total price for [NAME OF SERVICE] Note: The rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction fi.om the total all-inclusive maximum price 36 ADMINISTRATIVE REPORT I MEETING DATE: February 23, 2000 I AGENDA SECTION: Reports ITEM: 10. a. TO: Honorable Mayor and City Council APPROVED FROM: Alan Tandy, City Manager DEPARTMENT HEAD .~.~'_'~. DATE: February 15, 2000 CITY ATTORNEY ~~ CITY MANAGER ~ SUBJECT: Budget and Finance Committee Majority and Minority RePorts regarding funding request for new Kern County Airport Terminal 1) Budget and Finance Committee Majority Report No. 1-00 2) Budget and Finance Committee Minodty Report No. 2-00 RECOMMENDATION: The Committee recommends acceptance of the reports. BACKGROUND: The County Board of Supervisors has requested that the City of Bakersfield contribute $3.0 million dollars towards terminal improvements at the Kern County Airport. The money is needed by 2003 with a commitment needed by this March. The Budget and Finance Committee has considered this matter, met with county officials and has reviewed a considerable volume of information prepared by city staff on the matter. Majority Report The Majodty Report recommends that staff be instructed to negotiate an MOU with Kern County which would, upon approval by the City and County: 1) Contribute from the-City of Bakersfield to Kern County $500,000 per year for two years from one-time revenues for a total of $1,000,000. Said funds to pay for waiting room areas. 2) At Kern County's option (which shall exist until 6/30/01) an additional $500,000 would be transferred from the City Airpark Fund if the County enters into an agreement to operate the City Airpark through the year 2016 expiration of the FAA requirement to operate it as such. February 15, 2000, 3:18PM S:~Admin Rpts~)00~Airport Minority-Majority Rpt 0223(X).wpd lWS:al ADMINISTRATIVE REPORT Page 2 Minority Report The Minority report reCOmmends that staff be instructed to negotiate an MOU with Kern County which would, upon approval by the City and County: 3) Contribute from the City of Bakersfield to Kern County $500,000 per year for five years from one-time revenues for a total of $2,500,000. Said funds to pay for lobby, concessions, hold rooms and ticketing areas. 4) At Kern County's option (which shall exist until 6/30/01) an additional $500,000 would be transferred from the City Airpark Fund if the County enters into an agreement to operate the City Airpark through the year 2016 expiration of the FAA requirement to operate it as such. February 15, :2(:X~, 3:18PM S:~Admin Rpts~:)OO~irport Minority-Majority Rpt 022300.wpd .I'WS:al CITY OF BAKERSFIELD BUDGET AND FINANCE COMMITTEE MAJORITY REPORT NO. 1-00 February 23, 2000 TO: HONORABLE MAYOR AND CITY COUNCIL SUBJECT: FUNDING REQUEST FOR NEW MEADOWS FIELD AIRPORT TERMINAL The County Board of Supervisors has requested that the City of Bakersfield contribute $3.0 million dollars towards a new terminal to be constructed at the Kern County Airport. The money is ~needed by 2003 with a commitment requested from the city by March 2000. The Budget and Finance Committee has considered this matter, met with county officials and has reviewed a cor~siderable.volume of information prepared by city staff on the matter. Recommendation: That staff be instructed to negotiate an MOU with Kern County which would, upon approval by the City and County: 1) Contribute from the City of Bakersfield to Kern County $500,000 per year for two years from one-time "jail booking fee" revenues for a total of $1,000,000. Said funds to be designated for construction of waiting room areas. 2) At Kern County's option (which shall exist until 6/30/01) an additional $500,000 would be transferred from the City Airpark Fund, if the County enters into an agreement to operate the City Airpark through the year 2016 expiration of the FAA requirement to operate it as such. Basis of Position: The question is not the value of having a new terminal, it is what is the most proper and damage free way to fund it. 1) Kern County is to receive $9.4 million in new, unrestricted, funds this year and $8.0 million for nineteen years thereafter from the tobacco settlement for a total of $160+ million dollars. The use of city funds will take away approximately 25% of our average annual capital improvement fund and will damage availability to fund new fire stations, police equipment, parks, streets, and related services. The county's new $160,000,000 is unobli.qated and takes away from none of these activities and is therefore a preferablo source from which to fund the terminal. 2) The prudent use of tax dollars would be for the County to take the first two or three tobacco payments to fund the local share of the project with cash. That avoids interest costs associated with a bond issue. 3) If the County does not receive the first three payments, or the legislature restricts the use of these payments, the majority of the Budget and Finance Committee would recommend revisiting the issue to increase the City's participation. 4) Even at the $1.0 million dollars recommended, 25% of our average capital improvement program for two years is a significant sacrifice of city services to this project. 5) The county proposal double and triple taxes city residents. The county share of the funding will be paid in part by city residents through their county property taxes. Further, since it estimated that city residents make up 60% of the passengers, they will also pay that proportion of facility charges imposed on those using the airport facility. 6) The county has not offered to share the $160,000,000 tobacco settlement money with the 35% of Kern County' residents who reside in Bakersfield. Additionally, they have not contributed to various other improvements of great benefit to metro and county-wide residents, such as Centennial Garden and the Amtrak Station. While the City contributed significant funds to the Beale Library and the Calloway Separation of grade which are both County projects. The Committee majority recommends acceptance of the report and approval of the recommendation. Respectfully submitted, Councilmember Patricia J. DeMond, Chair Councilmember Mark C. Salvaggio CITY OF BAKERSFIELD BUDGET AND FINANCE COMMITTEE MINORITY REPORT NO. 2-00 February 23, 2000 TO: HONORABLE MAYOR AND CITY COUNCIL SUBJECT: FUNDING REQUEST FOR NEW MEADOWS FIELD AIRPORT TERMINAL The County Board of Supervisors has requested that the City of Bakersfield contribute $3.0 million dollars towards a new terminal to be constructed at the Kern County Airport. The money is needed by 2003 with a commitment needed by this March. The Budget and Finance Committee has considered this matter, met with county officials and has reviewed a considerable volume of information prepared by city staff on the matter. Recommendation: That staff be instructed to negotiate an MOU with Kern County which would, upon approval by the City and County: 1) Contribute from the City of Bakersfield to Kern County $500,000 per year for five years from one-time "jail booking fee" revenues for a total of $2,500,000. Said funds to pay for lobby, concessions, hold rooms and ticketing areas. 2) At Kern County's option (which shall exist until 6/30/01) an additional $500,000 would be transferred from the City Airpark Fund if the County enters into an agreement to operate the City Airpark through the year 2016 expiration of the FAA requirement.to operate it as such. Basis of Position: The terminal is an entry point to the City which should convey a positive community image. The benefits to economic development in the community will more than pay the costs. Further, with more attractive and more comfortable facilities fewer people will drive or bus to LAX and Burbank thus improving demand which will improve air service quality. The joint funding represents good intergovernmental cooperation. The City airport transfer would improve the efficiency of airport operations county-wide should Kern County select that option. The city has recently learned that due to the State having adopted AB1662 we will begin to receive "Jail Booking Fee Reimbursement" in the range of $700,000 per year in addition to otherwise anticipated revenues. The city could decide to allocate dollars from this source rather than otherwise earmarked capital improvement dollars. The Committee minority recommends acceptance of the report and approval of the recommendation. Respectfully submitted, Councilmember Mike Maggard The following documents are included for background information: 1. Airport Terminal Funding Request memo from Greg Klimko dated 2/8/00 2. Tobacco Settlement E-mail from Darnell Haynes dated 2/4/00 3. Airport Terminal Funding Request Update memo from Alan Tandy dated 1/7/00 4. Update on status of Kern County budget revenues memo from John Stinson dated 1/6/00 5. List of unfunded Capital Improvement Projects 6. Follow Up Information - Airport Financing memo from Alan Tandy dated 8/27/99 7. Airport memo from Greg Klimko dated 8/31/99 8. Airpark and Airport Information memo from Alan Tandy dated 9/1/99 9. Tobacco Settlement memo from John Stinson dated 9/1/99 10. Air Terminal Funding - Broad Range of Options memo from Alan Tandy dated 9/24/99 11. Request for financial assistance for funding the new air passenger terminal at Meadows Field Airport from Board of Supervisors Chairman, Jon McQuiston dated 10/12/99 12. County Airport memo from Alan Tandy dated 8/18/99 PROPOSAL OF AUDIT SERVICES TO THE CITY OF BAKERSFIELD (Cost Proposal) Submitted by: CONRAD AND ASSOCIATES, L.L.P. 1100 Main Street, Suite C Irvine, California 92614 March 22, 2000 . CONTACT PERSON - MICHAEL A. HARRISON, PARTNER PHONE NO. (949) 474-2020, EXT. 230 FAX NO. (949) 263-5520 CONRAD AND ASSOCIATES, L.L.P. CALIFORNIA LICENSE NO. PAR 6454 CONRAD AND ASSOCIATES, L.L.P. FEDERAL IDENTIFICATION NO. 33-0843820 ASSOCIATES, L.L.I~. IRV[NF, CALIFORNIA 92614 (949) 474-2020 Fax (949) 263-5520 March 22, 2000 Gregory J. Klimko, Finance Director City of Bakersfield 1501 Truxton Ave. Bakersfield, Ca 93301 Dear Mr. Klimko: Enclosed you will find Section I of our Proposal for Audit Services which includes "Our Hourly Rates and Maximum Fe'es to Perform this Engagement." We look forward to serving the City of Glendora. Sincerely, CONRAD AND ASSOCIATES, L.L.P. Michael A. Harrison, C.P.A. Partner MAH:kac Enclosure MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION SECTION I ' OUR HOURLY RATES AND MAXIMUM FEE TO PERFORM THIS ENGAGEMENT The following is a breakdown of the total cost of services including out of pocket expenses for the City of Bakersfield for the year ended June 30, 2000. Description of Services Hours Full Scope Alternate A 1. City of Bakersfield CAFR, Management letter and Agreed-Upon Procedures Letter - Gann limit 535 $34,240 32,640 2. Bakersfield Redevelopment Agency - Financial and Compliance Reports 80 5,120 5,120 3. Financial audit - Bakersfield Public Financing Authority 32 2,048 2,048 4. A-133 Single Audit of Federal Grant Programs 120 7,680 7,680 5. Compliance Procedures and Report on Wastewater Management Plan 8 512 512 77~5 $49,600 $48,000 Hourly rates in effect for services that would be performed outside the scope of the annual audits which would be agreed to by the City in advance would be as follows: For the Fiscal Year Ended June 30, 2000 Hourly Rate Classification Partners $165 Senior Managers 105 Manager 95 Supervisor 85 Senior Auditors 72 Staff Auditors 62 SECTION I, (CONTINUED) Our fees contemplate conditions satisfactory for the performance of the audit, including the City providing at the start of the audit, trial balances, reflecting year end adjustments, necessary subsidiary schedules supporting asset and liability balances, all necessary reconciliations in agreement with general ledger balances, and customary supporting analyses and schedules normally maintained by the Finance Department. The City will type confirmation requests and pull supporting documentation. Additionally, City Finance staff will prepare the individual combining and combined financial statements to be included in the CAFR and RDA Reports. If there are changes in the scope of the audit (additional major federal grant programs, .substantial additional debt issues, added project areas, added enterprise activity, additional component units, changes in the financial reporting model), we would like to discuss these changes with the Finance Director and the effect of these changes on the professional audit hours and costs of the engagement. ;-:' D' ' .... "~'" ' "' '- "'~ "" '' '- ' ......:' "- - ' ASSOCIATES,~.,._~.:'-L'; ' " -. ":.~.~-,..~,~ ~,,.c-~co~^~. _ i ~ :.._:?.:..: ~-'.'-."'.._ -.. -' .... :,'.. ., . . ... -~ , . , ~ - .', : .... · . .-.-.:. :-- __ . - . ' , ~..-,., "' .... "' ~- '- -~ ' ' · . :.:' '.' .'.z--..-~:. .-.(~_' :.]::?: ~- - - ' --' - ' .-'..- ... '.':_ ]. ' . .~. ..... ~:: _. :.: --... ._- ..-: .-.~ .:~ .... ., . '! .~...;' .4. ~. ' -. _ .- · . - -:-.. ._ ' ' ' ...... I I I I " PROPOSAL OF AUDIT SERVICES I TO THE I CITY OF BAKERSFIELD (Technical Proposal) ! I l I 1 '1 I Submitted by: CONRAD AND ASSOCIATES, L.L.P. 1100 Main Street, Suite C I · Irvine, California 92614 March 22, 2000 I CONTACT PERSON - MICHAEL A. HARRISON, PARTNER PHONE NO. (949) 474-2020, 'EXT. 230 FAX NO. (949) 263-5520 I CONRAD AND ASSOCIATES, L.L.P. CALIFORNIA LICENSE NO. PAR 6454 I CONRAD AND ASSOCIATES, L.L.P. FEDERAL IDENTIFICATION NO. 33-0843820 I ! I, I CONRAD AND CERTIFIED PUBLIC ACCOUNTANTS 1100 MAIN STREET, SUITE C ASSOCIATES, (949) 474-2020 I Fax (949) 263-5520 I March 22, 2000 I Gregory J. Klimko, Finance Director City of Bakersfield I 1501 Truxton Ave. Bakersfield, Ca 93301 i Dear Mr. Klimko: Conrad and Associates, L.L.P. is pleased to respond to your request for proposal to serve as independent auditors for the City of Bakersfield and related entities for the year ended June 30, I 2000 (with options for the fiscal years ended June 30, 2004). We are aware that while the City of Bakersfield has solicited numerous proposals, Conrad and I Associates, L.L.P. would be your best selection for the following reasons which are set forth in greater detail in our proposal and Executive Summary: · Conrad and Associates, L.L.P.'s audit team of Michael A. Harrison, Engagement I Partner, Al-Imam, Partner, Dobrenen, Manager Ken Technical Review Steven Senior and Brian Orr, Senior Auditor have a proven track record in serving California cities and redevelopment agencies. I · Conrad and Associates, L.L.P. is one of the largest local accounting firms in Southern California that specializes in local government auditing and consulting. Our firm i employs 65 individuals, including 61 professionals. During calendar year 1999, our professionals performed in excess of 52,000 hours of auditing and consulting services for our governmental and non-profit clients. I · Locally, in Bakersfield we will be subcontracting professional staffing from our sister CPA Firm Carpenter, Kuhen & Sprayberry (CKS). Ms. Ann Braun, CPA and Jennifer Haney, CPA experienced (CKS) auditors will be working with an experienced Conrad I and Associates, L.L.P. audit team. Carpenter, Kuhen & Sprayberry, CPA's have had offices in Bakersfield since 1974. We believe that our audit teamwork will provide local Bakersfield presence and a fresh look from an experienced local Government i Audit Team. · Our firm has an extremely high client retention percentage. We believe the primary reasons for this high satisfaction of our services is responsiveness to client needs, I experienced staffing, timeliness of our services and reasonableness of our fees. · We currently serve as independent auditors for 35 California cities. We also serve the I Redevelopment Agencies of those cities. During 1999, twenty-one of those cities participated in the CSMFO and GFOA Award Programs for Excellence in Financial Reporting. 1 I MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION Gregory J. Klimko, Finance Director City of Bakersfield March 22, 2000 Page Two · We understand the scope of work to be performed and we can and will deliver the services desired by the City in the timeframes desired by the City. Conrad and Associates, L.L.P. is a quality control firm and one of the few C.P.A. firms that has voluntarily participated in the AICPA peer review program since 1979. Our firm has developed quality control standards and procedures which have been subjected to AICPA standards of review. We believe it is important for you to know that Conrad and Associates, L.L.P. has received an unqualified opinion on the quality control of our accounting and auditing practice for each of our peer reviews. Both CKS Business Services (Bakersfield) and Conrad Business Services (Irvine) have experienced tax practitioners that serve as an additional resource to our clients in answering questions that arise concerning tax matters affecting local governments. · Conrad and Associates, L.L.P. will be advising the City of Bakersfield on new accounting developments and will be providing training to our clients on GASB #34 implementation in July 2000. · Conrad Business Services, Inc. has the capabilities to assist the City of Bakersfield in inventorying and valuing infrastructure to with and comply Accounting Reporting new Standards of the GASB. · We believe that our fee estimate and structure will assure the City of Bakersfield of the most reasonable cost (based upon the experience of our audit team) to perform the annual audit examination for the City and the related component units. · Mr. Michael A. Harrison, Engagement Partner, and Mr. Ken Al-Imam, Technical Review Partner, are authorized to bind our firm in contractual matters with the City of Bakersfield. Messrs. Harrison and Al-Imam are also authorized to make representations for our firm. · We have the required insurance coverages indicated in your RFP. · Conrad and Associates, L.L.P.. is licensed and in good standing with the California State Board of Accountancy to practice as independent certified public accountants. Additionally, Conrad and Associates, L.L.P. and Carpenter, Kuhen & Sprayberry (our subcontractor) are independent with respect to the City of Bakersfield within the GAO standards and is an Equal Opportunity Employer. Our CPA Firm's have not had any relationships with the City of Bakersfield in the past five years. We are committed to providing outstanding service to the City and in meeting the requested time deadlines and we will maintain our audit working papers for a period of three years. I Gregory J. Klimko, Finance Director City of Bakersfield March 22, 2000 I Page Three I Our firm thanks the City of Bakersfield for the opportunity to present our proposal qualifications and for the opportunity to serve as your independent auditors. Our proposal remains a firm and irrevocable offer for 120 days. I look forward to you contacting me so that I may answer further any questions which you may have. You may contact me at (949) 474-2020, Ext. 230. I Very truly yours, I CONRAD AND ASSOCIATES, L.L.P. I /~'z"~ '~'~ Michael A. Harrison, C.P.A. Partner I MAH:kac Enclosure 1 I I I I I PROPOSAL OF AUDIT SERVICES : TO THE CITY OF BAKERSFIELD TABLE OF CONTENTS Section Page EXECUTIVE SUMMARY PROFILE OF THE PROPOSER A About Conrad and Associates, L.L.P. 1 A-1 About Our Subcontractor 3 PROPOSER'S QUALIFICATIONS B Qualifications and Related Experience of the Personnel who will Service the City of Bakersfield 4 Our Prior Experience Auditing Cities, Redevelopment C Agencies, and other Local Governments 5 D Assistance in the Implementation of New Accounting Pronouncements 13 E References of Current Local Government Clients 17 F Capabilities in General Consulting and Compliance Auditing 18 APPROACH, SCOPE AND TIMING G Approach, Timing and Work Program of Our Engagement Team 20 H Our Firm's Understanding of the Objectives and Scope of the Engagement 29 AUDIT FEES' I Our Hourly Rates and Maximum Fee Perform to this Engagement (removed and bound separately) Appendix A Resumes of Audit Engagement Team B Results of Most Recent Quality Control Review C Proposer Guarantees D Proposer Warranties I I I I I I I I EXECUTIVE SUMMARY EXECUTIVE SUMMARY We believe that Conrad and Associates; L.L.P. should be selected to serve as independent auditors for the City of Bakersfield for the following reasons set forth in greater detail in our proposal: The engagement team who will service you are vastly experienced in serving California Cities. Mr. Harrison, Partner has 25 years serving municipalities. Mr. Al-Imam, Technical Reviewer is the current statewide chairman of the California Society of CPA's Governmental Accounting and Auditing Committee. Mr. Dobrenen, Senior Manager, has 11 years serving Cities and handles complex City and Agency engagements. Mr. Orr is a experienced senior auditor with significant municipal experience. In addition to Conrad and Associates, L.L.P. audit team, CPA's Ann Braun and Jennifer Haney each with more than 10 years auditing and tax experience with the Bakersfield CPA Firm of Carpenter, Kuhen and Sprayberry will be of the team servicing the City of part Bakersfield. Each will be participating in all Conrad and Associates, L.L.P. Local Government Training Seminars. · We are able to provide local Bakersfield professional staffing from Carpenter, Kuhen & Sprayberry and an experienced local government audit team Partner, Manager and Senior from Conrad and Associates, L.L.P. · Our firm qualifications and references you will find to be outstanding. We currently audit more than 60 municipalities, including 35 Cities and Redevelopment Agencies. Our :professionals are abreast of GASB #34 and are able to assist your staff in technical areas through the years that come in complying with the new Financial Reporting Model. We will keep you abreast through client meetings and periodic seminars on technical topics. · We have an excellent track record in providing continuity of staffing and plan to provide this continuity from year to year for the City of Bakersfield. · We know how to meet deadlines and are timely in our rendering of professional services. Our approach is one of cooperation and thoroughness through our knowledge of City and Redevelopment Agency accounting and auditing issues. We desire to have the City of Bakersfield as a client. You would be an important client of our firm. I I I I I I I I I PROFILE OF THE PROPOSER ! ! ! ! ! ! ! ! ! ! SECTION A ABOUT CONRAD AND ASSOCIATES, L.L.P. Conrad and Associates, L.L.P. is located in Irvine, Califomia and has a staff of sixty (65) individuals, including fifty (61) professionals through its Business Services Firm, Conrad Business Service, Inc. Four of the firm's eight partners devote more than 75% of their time in managing governmental audit and general consulting engagements related to governmental clients. Three of the firm's partners have extensive "Big 5" public accounting experience in addition to extensive local firm experience. One of our partners is currently the Chairman of the state-wide "Governmental Accounting and Committee" of the California of Auditing Society Certified Public Accountants and is also an active member of CCMA (California Committee on Municipal Accounting). One of our tax partners has an advanced degree in taxation as well as being a C.P.A. This tax expertise adds an additional dimension for our local governmental clients in areas of taxation affecting local governments. Since 1971, Conrad and Associates, L.L.P. has specialized in governmental and nonprofit accounting and auditing. For the past 28 years, the firm has been performing accounting and audit services to the private and public sector and not-for-profit organizations. A breakdown of our firm's personnel by level of experience is as follows: Partners 8 Managers/Supervisors 11 Seniors 17 Professional Staff and Consultants 25 Support Staff 4 65 I Conrad and Associates, L.L.P. and all assigned key personnel are licensed to practice in the State of California and have complied with all applicable California Board of Accountancy requirements. The firm's employees have met all of the State's Continuing Education I requirements, and the finn is in compliance with CPA requirements of the Private Companies Practice Section of the MC'PA. A Quality Control Firm For over 19 years, Conrad and Associates, L.L.P. has been one of the few local CPA firms which I has subjected its audit and accounting practice to the scrutiny of the peer review program administered by the Private Companies Practice Section of the American Institute of Certified Public Accountants (AICPA). As a member of the Private Companies Practice Section of the , · AICPA, our audit procedures and working papers are regularly examined by another CPA firm in 'I the firm-on-firm peer review program. In addition, all aspects of the firm's quality control practices have been reviewed, including the firm's commitment to extensive training programs. In every member firm, each member of the professional staff must enroll in continuous I professional education courses. Each is to take at least 120 hours of classes required over a three-year period. Courses cover a wide spectrum of professional and technical subjects, often prepared by the AICPA, to help the practitioner maintain his professional expertise. The I following policies and procedures are evaluated during the peer review. I 1 '! ! I SECTION A, (Continued) : I 1. How a firm implements independence requirements I 2. How personnel are assigned 3. Provision for consultation when technical assistance is required I 4. How field work is supervised 5. Hiring practices I 6. Continuing Professional Education programs I 7. Promotion of personnel 8. Decisions on obtaining and retaining clients I 9. Internal of the firm's work inspection This means that when the City of Bakersfield selects our firm to perform services for you, you will know that our firm has agreed to comply with the strict membership requirements of the section to which we belong and has agreed to have our compliance with those requirements reviewed by others. Thus, there is greater assurance that our personnel are adequately trained and up,to-date on professional developments relating to governmental as well as commerCial auditing. Accordingly, membership in this Division provides additional assurance that our firm will comply with professional accounting and auditing standards. The Governmental Accounting Office (GAO), in their 1994 revisions to the "Yellow Book", Government Auditing Standards, require CPA firms performing governmental audits to participate in quality control "peer" review. We are proud of the fact that Conrad and Associates, L.L.P. received an unqualified opinion on the quality of its accounting and auditing practice for each of its quality control reviews. Conrad and Associates, L.L.P. has participated in voluntary peer review since 1979. A copy of our membership, together with the results and opinion on our most recent (1998) peer review, together with California Society of Certified Public Accountants Peer Review Program (CSCPA) approval of the results of the review, are included in Appendix B. We would like to indicate that during our most recent quality control review several government audits, including single audits of cities and other governmental entities, were reviewed by the review team who found our work to substantially comply with all professional standards. Additionally, our firm has had numerous federal and state desk reviews and field reviews of our audits done by the State Office of Criminal Justice Planning, the U.S. Departments of Labor, Health and Human Services, Environmental Protection Agency and the California State Contro}ler's office. In all instances the federal or state agencies indicated their satisfaction with our work. Our firm has never had a record of substandard audit work. As a local CPA firm, our office contains approximately 10,000 square feet of space for the 65 individuals in our firm. To accommodate our clients, we have an in-house Data Processing System network and numerous compatible personal computers. We use Microsoft Office 2000 and Windows 98 software for the production of reports and other written documents of the highest quality. Our field audit staff teams are equipped with lap-top computers and our audit staff are proficient in several software programs including Microsoft Word, Excel and Word Perfect. Our staff are capable of reading/transferring data in that media with the City. SECTION A- 1 ABOUT OUR SUBCONTRACTOR Carpenter, Kuhen & Sprayberry will be providing experienced audit personnel to wOrk with the experienced audit team from Conrad and Associates, L.L.P. Carpenter, Kuhen & Sprayberry is an independently owned and operated CPA firm with offices in Bakersfield and Oxnard. The firm has been established in Bakersfield since 1974. It's offices are located at 5601 Truxton Ave., Suite 200, Bakersfield. The firm has more than 50 personnel, including 20 CPA's. The principal individuals who will be part of the audit team will be Ann Bruan, CPA and Jennifer Haney, CPA. Each have more than 10 years public accounting audit, accounting and tax experience. I I I I I I I I PROPOSER'S QUALIFICATIONS I I I I I I I I I SECTION B QUALIFICATIONS AND RELATED EXPERIENCE OF THE PERSONNEl, WHO WILL SERVICE THE CITY OF BAKERSFIELD The successful outcome of any audit requires personnel with the managerial and technical skills to perform the work required. The engagement team who will serve the City of Bakersfield have served together as a team of professionals on numerous financial audit examinations of local government entities, including complex governmental agencies. We believe that efficient administrative management and supervision of the audits is an extremely critical factor in achieving the desired results for the City Council of the City of Bakersfield. In that regard, we propose to establish the following procedures. Mr. Michael A. Harrison, Engagement Partner, who has 25 years of local government auditing experience, will be responsible for the coordination of the audit of the City of Bakersfield and requirements City Council of the City of Bakersfield. Mr. Harrison, as fulfillment of the of the the Engagement Partner, will be in the field to plan and coordinate the management of the audit examination of the City of Bakersfield. He will work closely with the Finance Director and Assistant Finance Director and be responsible to the City Council of the City of Bakersfield. He serves as a reviewer for the CSMFO award program for CAFR's and has been a speaker at a number of CSMFO local chapters on matters pertaining to technical issues and new GASB pronouncements. Mr. Ken Al-Imam serves as a partner in the firm's local government auditing practice. He has over 19 years of local governmental auditing experience. Mr. Al-Imam will serve as Technical act as a technical and consulting partner to Review Partner. In this capacity, Mr. AMmam will Mr. Harrison and the Finance Director and Assistant Finance Director. As a second partner reviewer, he will perform quality control reviews of audit reports issued by our firm. Mr. Al- Imam is the current Chairman of both the state-wide "Governmental Accounting and Auditing Committee" for the California Society of Certified Public Accountants and the Governmental Accounting and Auditing Committee for the Long Beach-Orange County Chapter of the California Society of CPA's. He is also an active member of CCMA (California Committee on Municipal Accounting). He has made presentations in public hearings before the Governmental Accounting Standards Board (GASB). Mr. M-Imam is also responsible for the firm-wide training of audit personnel at Conrad and Associates, L.L.P. in the area of local governmental accounting and auditing. Mr. Steven Dobrenen, Senior Manager will serve as Engagement Manager on the audit of the City of Bakersfield. He will participate in the planning and assessment of control risk of the engagement. Mr. Dobrenen will provide direction to the Senior Auditor and will review the audit working papers and all audit reports prepared by the Senior Auditor. Mr. Dobrenen has extensive experience in managing City engagements. Mr. Dobrenen has served as Engagement Manager on numerous complex City and Redevelopment Agency audits. Mr. Brian Orr will serve as Senior Auditor of the audit of the City of Bakersfield. He will work closely with Mr. Dobrenen, Mr. Harrison and Staff of the Finance Department. He will plan and conduct the audit work and supervise the Professional Staff who will work with him. Mr. Orr has extensive local government auditing experience, including performing as Staff and Senior Auditor on several City and Redevelopment Agency audits. SECTION C OUR PRIOR EXPERIENCE AUDITING CITIES, REDEVELOPMENT AGENCIES, HOUSING AUTHORITIES, AND OTHER LOCAL GOVERNMENTS Conrad and Associates, L.L.P. as a firm, under the direction of partners Mr. Ken Al-Imam and Mr. Michael A. Harrison, are vastly experienced in the audits of local government units (all funds audit examinations of cities including single audits performed under OMB Circular A-133, financial and compliance audits of California Redevelopment Agencies, audit examinations of public housing authorities, joint powers authorities and special districts). Among the local government entities which Conrad and Associates, L.L.P. has served during the past fiscal year are the following: All Funds Examinations of California Cities (Approximate budget million) During our served as City of Santa Ana $340 1984-1988 firm auditors for the City at Santa Ana the City Council again selected our firm in 1999 to serve as auditors for the 1999-2003 audits of the City and Agency. The City is one of the largest Cities in Orange County. The City has in excess of $400 million in bonded indebtedness and receives more than $40 million in Federal grant Funding through its Housing, Authority, CDBG and other grant programs. The City also receives the CSMFO and GFOA awards for excellence in financial reporting. City ofBrea (Approximate budget $130 million) During 1992, our firm was selected as auditors among a wide field of competition for this Orange County City. The City has a very active redevelopment During fiscal 1992, the Brea Financing Authority issued nearly agency. year $200,000,000 in tax allocation and lease revenue bonds and defeased four previous issues of the Redevelopment Agency. The Agency has numerous owner participation and developer disposition agreements with significance to the annual audit. The city has a regional shopping mall and receives various sources of grant funding subject to the single audit. The City has received the CSMFO Certificate of Achievement for Excellence in Financial Reporting in 1998 and previous years and has submitted its CAFR for the year ended June 30, 1999 for review by the Government Finance Officers Association and the California Society of.Municipal Finance Officers. City of Palm Springs (Approximate budget $85 million) Conrad and Associates, L.L.P. has served as auditors for this Coachella Valley City since 1986. The Palm Springs Redevelopment Agency, which is part of the reporting entity of the City, has ten project areas. The City operates the Palm Springs Regional Airport and receives various federal funding, including FAA grants subject to the single audit under OMB Circular A-133. Other enterprise funds of the City include the Wastewater and Golf Course activities. The City has received the CSMFO Award for Outstanding Financial Reporting and the GFOA Certificate of Achievement for Excellence in Financial Reporting for its 1989-1998 CAFR's, and has submitted its 1999 CAFR under each of those award programs. SECTION C, (Continued) City of Norwalk (Approximate budget $56 million) Conrad and Associates, L.L.P. has I performed the audit of this Los Angeles County city from 1986 through 1998. We have performed a single audit in accordance with OMB Circular A-133 for each of those years. Our audits include the Norwalk Financing Authority and Norwalk Redevelopment Agency. The City receives grant funding from the U. S. Department of Housing Development for the Section 8 I Housing assistance program as well as CDBG and other federal funding. The City also operates a state funded child care program and a Senior Citizens action program. For each of the years 1986 through 1998, the City has received the CSMFO Award for Outstanding Financial I Reporting and the GFOA Certificate of Achievement for Excellence in Financial The Reporting. City has submitted its 1999 CAFR under each of the foregoing programs. I City of Costa Mesa (Approximate budget of $105 million) Conrad and Associates, L.L.P. was selected to serve as independent auditors in fiscal 1991. Included in the audit are the operations of the Costa Mesa Financing Authority, the Costa Mesa Redevelopment Agency and the Costa i Mesa Sanitary District. The City also operates a municipal golf course and receives various sources of Federal funding subject to single audit under OMB Circular A-133. The City has received the CSMFO Award for Outstanding Reporting and the GFOA Certificate of Achievement for Excellence in Financial Reporting for its 1998 CAFR and has submitted its I 1999 CAFR under each of the foregoing programs. City of Buena Park (Approximate budget of $59 million) During 1982, our professionals I assisted the City in implementing NCGA Statement #3 to incorporate changes in the "Reporting Entity". Additionally, 'in connection with a fixed asset appraisal performed by an outside appraisal firm, we successfully completed audit procedures and assisted the City in recording of i those assets on their books. With the appraisal and audit work, the City was able to remove previous accountants' report qualifications relating to the incompleteness of fixed asset records. Conrad and Associates, L.L.P. further assisted the City finance department in upgrading its annual financial report which has been submitted under both the CSMFO Award Programs and I the Government Financial Officers Association (GFOA) Certificate of Achievement Program. We have served as independent auditors of this City for the past 17 years. I City of San Gabriel (Approximate budget $11 million) Conrad and Associates, L.L.P. conducted the audit examination of this Los Angeles. County City for fiscal 1988 through 1999. A single audit in accordance with OMB Circular A-133 was also conducted for each year. The 1990 through 1998 CAFR received the CSMFO Outstanding Award and GFOA's Certificate of I Reporting. 1999 CAFR has again been submitted Achievement for Excellence in Financial The for review under the CSMFO and GFOA award programs. I City of La Veme (Approximate budget $20 million) Conrad and Associates, L.L.P. conducted the audit examination of this City for fiscal 1988 through 1999. The City and Agency have several owner participation agreements, multiple issues of long-term debt outstanding, and i operates both a water and sewer utility. A single audit in accordance with OMB Circular A-133 was also conducted for each year. The City received the CSMFO Award for outstanding financial reporting for each of the past nine fiscal years. I 6 I SECTION C, (Continued) I City of Gilroy (Approximate budget $35 million) Conrad and Associates, L.L.P. has conducted the audit examination of this Santa Clara County City for fiscal 1989 through 1999. During fiscal 1992 we assisted the City in a conversion to full governmental GAAP for all its funds. During 1989 we also conducted a management audit of the City's waste disposal contractor, and single audits in accordance with OMB Circular A-133 for 1989 through 1999. Town of Apple Valley (Approximate budget $12 million) Conrad and Associates, L.L.P. was selected to serve as independent auditors for this relatively new City in San Bemardino County during 1991. The City has a Water District and several special assessment districts. Our staff is also providing technical support and assistance in various areas to the City staff. The City has received the CSMFO Award for outstanding reporting and the GFOA Award for excellence in financial reporting for its CAFR's during 1994-1998. The 1999 CAFR was submitted under both award programs. of Highland (Approximate budget $6 million) Conrad and Associates, L.L.P. currently City serves as the auditors of this San Bernardino County City. We completed the examination of the City for the years ended June 30, 1989 through June 30, 1999. During 1990 we assisted the City in developing accounting policies and establishing fund structure for a newly formed Redevelopment Agency. The City has received the GFOA and CSMFO awards for its CAFR during each of the past nine years. City of Hemet (Approximate budget $20 million) COnrad and Associates, L.L.P. was selected during 1989 to serve as auditors of this Riverside County City. We have completed our audit of the City, Redevelopment Agency and the single audit in accordance with OMB Circular A-133 years through City has several internal service fund for the ended June 30, 1989 1998. The activities and operates refuse and water utility enterprise funds. City of Hawaiian Gardens (Approximate budget $9 million) Conrad and Associates, L.L.P. was selected in late 1990 to serve as auditors of this Los Angeles County City. Our firm completed the 1989 through 1997 audit examinations of the City, Redevelopment Agency and Public Financing Authority. We also conducted single audits in accordance with OMB Circular A-133. We have provided technical assistance to the City and Redevelopment Agency in accounting matters, and performed special reviews at the Agency's request of the validity of the Redevelopment Agency's tax increment increase from 1988 to 1989. The Redevelopment Agency has engaged in several debt issues, including those the advance involving refunding and defeasance of debt. City of Rancho Mirage (Approximate budget $18 million) Conrad and Associates professionals under Mr. Harrison's direction, performed the examination of this desert City from 1982 through 1988. The City receives significant hotel-motel bed taxes and has numerous special assessment districts subjected to audit. Our firm was again selected in 1992 to perform the audit examinations of the City, Agency, Financing Authority and single audit. The City has received award recognition under the CSMFO and GFOA Award Programs for Excellence in Financial Reporting for its CAFR. 7 SECTION C, (Continued) City of La Quinta (Approximate budget $30 million) Conrad and Associates, L.L.P. was selected in 1992 to serve as auditors of this Coachella Valley City. Included within the audit are the La Quinta Redevelopment Agency and La Quinta Financing Authority. The City has received recognition under the CSMFO award program for its CAFR. City of Indio (Approximate budget $25 million) Conrad and Associates, L.L.P. was selected in 1993 to serve as independent auditors for this Coachella Valley City. Our firm has also assisted the City in technical issues relating to the Redevelopment Agency, pass-through agreements and the Indio Financing Authority. The City received the CSMFO and GFOA awards for its 1998 CAFR. .City of Carlsbad (Approximate budget $80 million) Conrad and Associates, L.L.P. was selected ~n 1993 to serve as auditors for this San Diego County City. The scope of the audit includes the Carlsbad Housing Authority, Carlsbad Redevelopment Agency and the Encina Joint Powers Associates, previously as auditors from 1981-83 Financing Authority. Conrad and L.L.P. served for the City. The City received the CSMFO and GFOA award for its 1997 CAFR and is again submitting its 1999 CAFR under both award programs. City of Whittier (Approximate budget $60 million) We were selected in 1994 to perform the audit of this Los Angeles County City, its Redevelopment Agency and Public Financing Authority. The City's enterprise activities include sewer, water and solid waste. We assisted the City in addressing issues relating to its landfill closure and post-closure cost. The City has received the CSMFO and GFOA Awards for Excellence in Financial Reporting for its CAFR. City of Temple City (Approximate budget $12 million) Conrad and Associates, L.L.P. is under contract through 2003 to perform the audit of the City, Redevelopment Agency, Financing Authority and Single Audit under OMB Circular A-133. We also have provided other technical assistance in the preparation of State Controllers Reports, Employee Benefit Plan tax returns and other budgetary assistance. The City has received the CSMFO and GFOA Awards for Excellence in Financial Reporting for its CAFR. City of Bell (Approximate budget $12 million) We were selected in 1994 to perform the audit of this Los Angeles County City, the Bell Redevelopment Agency and Surplus Property Authority. We also perform a single audit under OMB Circular A-133. The City has received the CSMFO Award for Excellence in Financial Reporting. City of Pomona (Approximate budget $177 million) We were selected to perform the 1995-98 annual audits of this Los Angeles County City. We have performed audits of the City, Agency, Housing Authority, Financing Authority and Single Audit. The City received the GFOA award for its 1995-1997 CAFR's. This City is in an urban setting with extensive grant funding under Housing Assistance, Housing Rehabilitation and Preservation, Home Investment Partnership Act, CDBG, Shelter Care and Emergency Shelter Grants. City of Diamond Bar (Approximate budget $10 million) We were selected in 1995 to perform the audit of this Los Angeles County city. We have also performed special cable television audits for the City during 1995. The City has received the CSMFO and GFOA Awards for Excellence in Financial Reporting during each of our years as auditors. SECTION C, (Continued) City of Escondido (Approximate budget $125 million) During 1983 through 1988, Conrad and Associates, L.L.P. performed the audit examination of this northem San Diego County City. The City operates numerous proprietary activities, including Water and Sewer. The City receives various grant funding sources, including Community Development Block Grant Funds. Single audits were performed for fiscal 1985, 1986, 1987 and 1988 under OMB Circular A-128. In 1995 the City again selected our firm to serve as auditors. The City receives both the CSMFO and GFOA awards for its CAFR. City of Orange (Approximate budget $120 million) This active full service City provides police, fire, water, refuse, and sanitation services. The City and Redevelopment Agency are involved in a number of complex financial transactions with recorded debt of the City and Agency approximating $100 million. The City receives the GFOA and the CSMFO awards for its CAFR. City of Villa Park (Approximate budget $1 million) We were selected in 1997 to perform the audit of this Orange County City. We also assist the City in preparing reports including the State Controllers and Street Reports. City of San Clemente (Approximate budget $53 million) We were selected in 1996 to perform the audit of the City and Redevelopment Agency. We also perform a single audit of grant programs and a financial audit of a joint powers authority for animal control. The City received award recognition for its 1996-98 CAFR's under the CSMFO and GFOA award programs and again has submitted its 1999 CAFR for award recognition. City of South Gate (Approximate budget $60 million) We were selected in 1997 to perform the audit of this Los Angeles County City. We previously served as auditors from 1983-1987. This City has significant grant activity including Section 8 Housing Programs. We performed audits of the City, Redevelopment Agency and Public Financing Authority. The City submitted its CAFR under the CSMFO and GFOA award programs in 1998. City of La Puente (Approximate budget $8 million) We were selected during 1997 to serve this Los Angeles County City. We performed audits of the City and Redevelopment Agency. City ofLaguna Niguel (APproximate budget $18 million) We were selected in 1996 to serve as independent auditors of this Orange County City. We performed audits of the City and Community Services Districts for fiscal years ended June 30, 1996 through 1999. City of Indian Wells (Approximate budget $33 million) We were selected in 1997 to serve as · independent auditors of this Coachella Valley City. We have audited the Redevelopment Agency and performed agreed upon auditing procedures at the City's Golf Course operator and hotel/motel operators. City of Mission Viejo (Approximate budget $42 million) We were selected in 1997 as auditors of this Orange County City. We perform the audit of the City and Redevelopment Agency. The City also submits its CAFR under the CSMFO and GFOA award programs. City of Laguna Beach (Approximate budget $43 million) Conrad and Associates, L.L.P. was selected during 1998 to serve as independent auditors for this beach City. The City operates a municipal transit fund and has dealt with several disasters with FEMA grant reimbursements. The City received an award for it's 1998 CAFR under the CSMFO .Award Program for Outstanding Financing Reporting. 9 I SECTION C, (Continued) i City of Laguna Hills (Approximate budget $18 million) Conrad and Associates, L.L.P. was selected during '1998 to serve as independent auditors for this Orange County City. The City recently sold Certificates of Participation to finance a Community Center and Sports Park, is an active member and proponent in the E1 Toro Reuse Planning Authority for a non-aviation reuse i plan for the E1 Toro Marine Base. The City received the GFOA and CSMFO Awards for Excellence in Financial Reporting for its 1998 CAFR and has submitted its 1999 CAFR for award review with both CSMFO and GFOA. I Clients Receiving GFOA/CSMFO Award for Financial Reporting I Conrad and Associates, L.L.P. has a proven track record in assisting cities in the upgrading of their financial reporting. A number of our clients have received the "Certificate of Achievement for Excellence in Financial Reporting" issued by the Government Finance Officers Association · (GFOA) and the "Certificate of Award for Outstanding Financial Reporting" issued by the I California Society of Municipal Finance Officers In both (CSMFO). addition, Mr. Harrison and Mr. Al-Imam serve as technical reviewers in the CSMFO award program. The following cities received financial reporting awards during the period of time that we served as their auditors: I GFOA Award CSMFO Award Town of Apple Valley X X I City of Bell X City of Carlsbad X X City of Buena Park X X I City of Norwalk X X City of Palm Springs X X City of San Gabriel X X i City of Hemet X City of Highland X X City of La Veme X City of Costa Mesa X X I City of Bred X X City of Azusa X City of Rancho Mirage X X City of Diamond Bar X City of La Quinta X City of Escondido X X City of Whittier X X City of Pomona X City of Temple City X X City of San Clemente X X City of Orange X X City of South Gate X City of Indian Wells X X City of Mission Viejo X X · City of Laguna Hills X X SECTION C, (Continued) Experience with Redevelopment Agencies Conrad and Associates, L.L.P. currently or has previously performed financial and compliance audits of the following redevelOpment agencies: Indio Redevelopment Agency Brea Redevelopment Agency 'Santa Ana Redevelopment Agency. Buena Park Redevelopment Agency Rancho Mirage Redevelopment Agency Stanton Redevelopment Agency Rialto Redevelopment Agency San Marcos Redevelopment Agency Azusa Redevelopment Agency Vista Redevelopment Agency South Gate Redevelopment Agency Downey Redevelopment Agency Temple City Redevelopment Agency San Jacinto Redevelopment Agency Westminster Redevelopment Agency Norwalk Redevelopment Agency Palm Springs Redevelopment Agency . Carlsbad Redevelopment Agency Cathedral City Redevelopment Agency Desert Hot Springs Redevelopment Agency Escondido Redevelopment Agency Banning Redevelopment Agency La Veme Redevelopment Agency Gilroy Redevelopment Agency Hemet Redevelopment Agency Highland Redevelopment Agency Costa Mesa Redevelopment Agency Delano Redevelopment Agency La Quinta Redevelopment Agency Whittier Redevelopment Agency Bell Redevelopment Agency Pomona Redevelopment Agency Hesperia Redevelopment Agency Orange Redevelopment Agency San Clemente Redevelopment Agency La Puente Redevelopment Agency Our experience with redevelopment agencies is extensive and includes the following: · Assistance in the accounting for developer disposition agreements (DDA's) and owner participation agreements · Computations of obligations under pass-through agreements · Assistance in the use of tax-sharing agreements as an economic incentive SECTION C, (Continued) Consultations regarding the financial benefit to the City resulting from redevelopment activities · Tax increment financing of projects Consultations regarding low-moderate income housing requirements ·The establishment, merging, and adding of project areas The use ofrehab loans in redevelopment agencies Assistance in issuance (and refundings) of Tax Allocation Bonds The establishment of redevelopment fund structure · Use of City loans and advances Experience in Auditing Public Housing Authorities and Programs Name of Housing Authority Type of Audit Dates Pomona Housing Authority A-133 Single Audit 6/95-6/98 Hawaiian Gardens Housing Authority A-133 Single Audit 6/94-6/98 Norwalk Housing Authority A-133 Single Audit 6/86-6/99 Carlsbad Housing Authority A-133 Single Audit 6/93-6/99 County of Riverside Housing Authority A-133 Single Audit 6/98 Santa Ana Housing Authority A- 102/A- 128 S ingle Audits 6/83-6/88/6/99 South Gate Housing Authority A-133 Single Audit 6/97-6/99 San Bemardino Housing Authority A-133 Single Audit 9/95-9/99 12 SECTION D ~ I ASSISTANCE IN THE IMPLEMENTATION OF NEW ACCOUNTING PRONOUNCEMENTS i As a part of our service to the Authority, we will assist the Authority in understanding the impact of new accounting pronouncements, such as the following: NEW FINANCIAL REPORTING MODEL In July 1999, the GASB issued as final a new accounting pronouncement entitled GASB Statement No. 34 which sets forth a new financial reporting model for governmental entities. The new model (called the integrated model) will report financial data differently for the government-wide perspective and the fund perspective. The model will include the following: Government-wide Perspective The new model will add a new summary level of reporting in addition to the fund level of reporting currently in use. This highly aggregated summary level of reporting will be called the government-wide perspective. These summary financial statements will (unless the reporting government has discretely presented component units) have just three columns (governmental activities, business-type activities, and a total column). The data in this perspective will be on the full accrual basis of accounting. Fund Perspective The integrated model will also have a second section called the fund perspective. At the fund perspective, data will be on the modified accrual basis of accounting for the governmental funds, as is the current practice. At the fund perspective, there will be separate columns for the general fund, each major fund and a column for all of the nonmajor funds. There will be no columns for the general fixed assets account group or the general long-term debt account group (these will be reflected only at the government-wide perspective level). There will also be no required grouping by fund type. Behind these statements will be the individual fund budget- actual schedules. Budgetary comparisons will only be shown for the general fund and each major special revenue fund that has a legally adopted annual budget. These budget-actual schedules will be presented as required supplementary information. These schedules must include columns for both that fund's original adopted budget, as well as thefinal revised budget for that fund. Summary Financial Data will Use a Different Basis of Accounting Than at the Fund Level At the government-wide level, the full accrual basis of accounting will be used. At the fund perspective level, the modified accrual basis of accounting will be used for governmental funds. This will make it difficult to track numbers from the fund to the perspective government-wide perspective. The new financial reporting model will require a reconciliation between the total equity at the fund perspective (which is on the modified accrual basis of accounting for the governmental funds) with the total equity at the government wide perspective (which Wil.1 be on the full accrual basis of accounting). Although tOtal equity will be reconciled, it will be difficult SECTION D, (Continued) to show how specific numbers change from one level of reporting to the other as a result of the two different bases ofaccounting that are used. Management Discussion and Analysis As a requirement of financial reporting, management must include in the front of the financial statements a section called management discussion and analysis. This will contain information similar to what is being reported currently in the transmittal letter used for annual comprehensive financial reports that are submitted for govemmental financial reporting award programs. This information will include condensed financial data, explanations of major fluctuations from the prior year, major changes in economic conditions, explanations of significant budget variances for the general fund, major differences between the original and final budget for the general fund, description of major capital assets and long-term debt activities during the year, whether the government's financial position has improved or deteriorated during the year, factors or conditions or events that are expected to have a significant impact on the financial position of the government, and an explanation of the differences between the two bases of accounting reflected in the government wide perspective and the fund perspective. Changes in Reporting Fixed Assets A'major change will be required for reporting general fiXed assets in that GASB will require infrastructure assets (streets, etc.) to be included. Generally, local governmental clients will hire an appraisal firm to inventory these assets. The original cost of these assets can be estimated by the appraisal firms by studying local government street maps and estimating the original cost of discounting techniques to estimate construction costs when the these assets by using various assets or improvements were acquired. Impact on the Books of Local Government The modified accrual basis of accounting for governmental funds will still be required for the fund perspective that is required to be presented in the new financial rePorting model. Therefore, most of the changes resulting from this new model will have to be dealt with during the preparation of the year end financial statements. We recommend that governments continue to maintain their fund accounting system as they have in the past. Most local governments will need to engage their auditors to make the modifications the necessary to local government's financial data in order to produce the required government wide perspective of reporting, which will be on the full accrual basis of accounting. We expect that considerable time will be expended to change the combined data from the modified accrual basis of accounting to the full accrual basis of accounting each year. An estimate of the hours required to make these modifications and the related cost will be provided to the client at that time. I I SECTION D, (Continued) Expected Date of Final Statement effective date for the new pronouncement varies depending on the size of the governmental The entity and is as shown below. New infrastructure additions must be capitalized and reported as fixed assets prospectively with the implementation of the new standard. However, compilation of prior year infrastructure records would be not be required until four years after the effective date for the implementation of the new financial reporting model: Prior Year Infrastructure Financial Reporting Model-- Records-- Effective For Required For Total Revenues Fiscal Years Ending Fiscal Years Ending Over $100,000,000 June 30, 2002 June 30, 2006 $10,000,000 - $100,000,000 June 30, 2003 June 30, 2007 Under $10,000,000 June 30, 2004 Retroactive reporting not Required REVENUE RECOGNITION FOR NONEXCHANGE TRANSACTIONS In January 1999, GASB issued GASB Statement No. 33 entitled Accounting and Financial Reporting for Nonexchange Transactions. This new redefines the rules pronouncement of revenue recognition for nonexchange transactions, which include taxes, state subventions, and other significant local government revenue sources that do not involve the providing of goods or services as consideration for the monies received. This new accounting standard classifies nonexchange transactions into four categories: Derived tax revenues--taxes derived' from (or imposed on) exchange transactions that take place between Private parties. · Generally these are recognized in the period in which the underlying exchange transaction between the private parties occurs. · An example would be the tax on sales transactions that take place between merchants and their customers. Imposed nonexchange transactions--imposition is not based upon exchange transactions between private parties. · Generally these are recognized as revenue when an enforceable legal claim to the asset arises unless the revenue is required to be used a specific period. In that case, revenue is recognized over the period for which the tax is levied. · An example would be property taxes whose imposition is based upon property ownership (which is not an exchange transaction). i 15 SECTION D, (Continued) : Government-mandated nonexchange transactions--resources received from another government to finance a mandate imposed upon the recipient government by the providing government. · Generally not recognized until all eligibility requirements have been met. Voluntary nonexchange transactions--donations and most voluntary grants. · Generally not recognized until all eligibility requirements have been met. This new accounting standard is effective for fiscal years ending June 30, 2001. We will assist the City in the interpretation of this standard as it applies to the major revenue sources of the City. We will provide practical advice to help the City make the necessary measurements and accounting distinctions. SECTION E I REFERENCES OF LOCAL GOVERNMENT CLIENTS I For your convenience, we have listed below references with regard to audit work currently being i performed by Conrad and Associates, L.L.P. for several local governments in California. Mr. Al-Imam or Mr. Harrison currently serve as partners on these engagements. Name of City/Contact Person Partner Approximate Hours I 1. City of Brea and related entities Larry D. Hurst, Financial Services Director I (949) 990-7675 Harrison 800 2. City of Arcadia and related entities Tracy Hause, Director of Administrative Services I Harrison 600 (626) 574-5425 3. City of San Clemente and related entities I Paul Gudgierson, Finance Director (949) 361-8341 Harrison 500 i 4. City of Santa Ana and related entities Rod Coloma, Financial Services Director (760) 324-4511 Harrison 1000 I 5. City of Mission Viejo and related entities Irwin Bornstein, Director of Finance (949) 470-3059 Harrison 500 I 6. City of Hemet and related entities Steve Temple, Finance Director (909) 765-2330 Al-Imam 550 I 7. City of Temple City and related entities Francene Maldonado, Director of Finance I (626) 285-2171 Harrison 500 8. City of Bell and related entities I Robert Rizzo, City Manager (213) 588-6211 Harrison 500 i 9. City of Orange and related entities Helen Bell, Finance Director (714) 744-2234 Harrison 800 I 10. City of Palm Springs and related entities Thomas M. Kanarr, Finance Director/Treasurer (760) 323-8229 Harrison 950 I SECTION F I CAPABILITIES IN GENERAL CONSULTING AND COMPLIANCE AUDITING I In addition to our annual auditing services, we have' assisted our clients by performing various management advisory and other accounting services, including: I · Special hotel-motel bed tax audits I · Other gross receipts audits (cable television franchise fees, excavation tax, etc.) · Contractual agreement compliance audits I · Review of central purchasing systems · Review of warehouse controls and inventory systems I · Investment Portfolio reviews and policy on derivative use I · Review of operations in City Treasurers' Office · Reviews of water billing systems I controls in parks and recreation departments · Reviews of cash · Review of investment policies and modifications thereto I · Special EDP reviews I · Review of permitting process within city building departments · Analysis of investment yields I · Special fraud audits' · Assistance in presentations to city councils I · Assistance in setting up special accounting systems for redevelopment agencies i · Assistance to Bond underwriters in providing "comfort letters" on debt issues of municipalities · Consultations regarding the maximizing of tax increment revenue for redevelopment I agencies · Organizational review of finance departments I · Tax advice regarding deferred compensation, employee benefits, use of city vehicles, etc. i · Review of financial forecasts SECTION F, (Continued) · Assistance in cash reconciliation problems · Determination of the cost of excess sewer capacity for a developer/city contractual arrangement Assistance in the selection of qualified finance personnel for employment by the City Assistance in computation of Proposition 111 Gann Limitations · Management reviews of finance and City Treasurer's office Assistance in establishing accounting for development projects and fees to comply with AB 1600 Special Reviews of the Validity of Changes in Tax Increment Revenue from year to year within Redevelopment Agencies · Assistance in Section 8 Housing program portability issues · Assistance in the acquisition of private water companies and the accounting issues related thereto APPROACH, SCOPE AND TIMING SECTION G I APPROACH, TIMING AND WORK PROGRAM OF OUR ENGAGEMENT TEAM The audit approach of Conrad and Associates, L.L.P. is unique with regard to the following: · Our firm is sensitive to the and work priorities requirements of our clients. We work around the schedules of our clients when scheduling segments of the audit or requesting documentation in order to minimize disruption in the Finance Department. · Whenever possible, we use accounting support already prepared by the Finance Department in order to avoid duplication or unnecessary requests for audit supporting schedules. · Because of our firm's expertise in local governmental auditing, our staff are trained and familiar with local government accounting. You will spend no time in training our personnel. · When formulating internal control recommendations, we obtain a thorough understanding of the specific circumstances at your City in order to provide a tailored, practical recommendation. · Throughout the year we are a resource to our clients in providing accounting advice, researching technical questions, dealing with tax problems, and helping with other problems as they arise. On May 31, 2000, following our appointment as auditors of the City, Mr. Harrison, Engagement Partner, Mr. Steven Dobrenen, Engagement Manager, and Mr. Brian Orr, Senior Auditor and professional staff from our subcontractor Carpenter, Kuhen & Sprayberry will meet with Greg Klimko, Finance Director and Sandra Jimenez, (Acting) Assistant Finance Director for the purpose of planning the audit of the City. In addition to establishing an effective and efficient communication link with City personnel, the following will be accomplished: - Dates for audit field work of the various audit examinations will be finalized. - Arrangements will be made with City personnel for the typing of confirmation requests. - Analyticalprocedures will be utilized in planning the audit which will focus on: a) Enhancing our understanding of the City of Bakersfield and the transactions and events that have occurred since your last audit date and; b) Identifying areas that may represent specific risks relevant to the audit (assessment of control risk). Critical audit areas will be identified and the universe of transactions will be identified for purposes of statistical sampling of transactions and other audit tests in conjunction with determining whether reliance can be placed upon the system of internal accounting controls. 20 SECTION G, (Continued) - We will be evaluating the following cycles of the City: ·Purchasing/Receiving/Accounts Payable and Cash Disbursements Cycle; Payroll Cycle. We will also be reviewing internal control structure within the revenue/cash receipts cycle, property and equipment and treasury management cycles. We will identify areas of potential concern to City management. Based upon our planning procedures we will develop levels of materiality for audit testing and develop and tailor our audit program of the City. Following the engagement planning meetings, Mr. Dobrenen and Mr. Orr and our professionals from CKS will coordinate with Ms. Jimenez those items which would be required by our staff in meeting the timing requirements of the various audits. In conjunction with our planning of the engagement, we will perform our interim audit work. We will have evaluated the critical audit areas and assessed control risk (as mentioned above). Our review of internal control structure will be by questionnaire, and procedural write-up of your accounting system. Each of the approaches requires inquiry and observation of City personnel. Comments and recommendations relating to the accounting system will be discussed with appropri, ate City personnel and where appropriate be included in letter which our management will be issued at the conclusion of the examination. Additional procedures that will be accomplished during our interim audit procedures include the following: 1. Reviewing of internal control structure (including controls surrounding the EDP environment) and communication of recommendations to City Management concerning City policies and procedures. 2. Testing of audit areas where reliance can be placed internal control structure for upon audit purposes. 3.Reviewing of minutes of the City Council of the City and related entities. 4.Reviewing of conflict of interest (related party) statements. Following up on from analytical procedures. (We will perform 5. unusual items noted significant comparison and inquiry regarding fluctuations of revenues and expenditures by fund budgets versus actual and actual for the previous year). 6. Reviewing of important contracts, new debt issues, leases and joint power agreements. SECTION G, (Continued) I I 7. Performing required compliance and internal control testing relating to the federal grant programs of the City. 8. Reviewing the City's calculation of its appropriations limit (Gann limit) in accordance I with Article XIII B of the State Constitution. 9. Testing for compliance with City budgetary policies and procedures, including testing I the integrity of the budgetary data reflected in the City's accounting system. 10. Providing the City with suggestions regarding the close of City books after year end. i Our assistance and communication in the closing of the City books is expected to minimize the number of audit adjustments required after the close of City books. As a part of our Single Audit for the in which the City expends than $300,000 in years greater federal funding, we would supplement our approach with the following procedures in performing the single audit. (This would be accomplished as a part of our planning and interim audit work.) 1. Re-review all pertinent federal and AICPA publications including: The Single AUdit'ActAmendments of 1996 (Public Law 104-156) signed into law on July 5, 1996 and effective for the fiscal years ending on or after June 30, 1997. This law amends the Single Audit Act of 1984 (Public Law 98-502) previously applicable to local governments OMB Circular A-133 entitled Audits of States, Local Governments, and Non- Profit Organizations GAO Government Auditing Standards (Yellow Book), 1994 revision AICPA Audit and Accounting Guide Audits of State and Local Government Units (1994 revision) and Statement of Position 98-3, Audits of States, Local Governments, and Not-for-Profit Organizations Receiving Federal Awards · SAS No. 74, Compliance Auditing Considerations in Audits of Governmental Entities and Other Recipients of Federal Financial Assistance Revised Compliance Supplement for Single Audits of State and Local Governments · Catalog of Domestic Assistance Programs OMB Circular A-87 · OMB Circular A-102 2. Identify the federal programs administered by the City of Bakersfield and the amounts expended during the audit period. SECTION G, (Continued) 3. Apply the risk-based auditing approach mandated by the Single Audit Act Amendments of 1996 (Public Law 104-156) and OMB Circular A-133 entitled Audits of States, Local Governments, and Non-Profits Organizations for the determination of major programs to be selected under the single audit process. As prescribed by the directives of the new single audit requirements, this will involve a consideration of the complexity of the program, prior audit findings, changes in personnel, the competency of personnel, the extent to which sub-recipients are used, the extent of overview and monitoring by granting agencies, the extent of recent changes in requirements, program the newness of the program, the size of the program, and the inherent risk of the program. 4. Identify the oversight audit agency. 5. Identify and list the major compliance supplements and subrecipients of the City, if any. 6. Review the administrative control systems to ensure compliance. 7. Execute the sampling plan. 8. PerfOrm audit procedures for the selected transactions. 9. Test compliance with other material compliance requirements. 10. Test matching requirements, if any. 11. Test indirect costs, if any. 12. Review reports and claims for advances and reimbursements to the federal government. 13. Review processing of audit reports for state and local government subrecipients. 14. Prepare the independent auditors' reports required by OMB Circular A-133. 15. Prepare the data collection form required to be filed with the Single Audit Central Clearinghouse. On August 21, 2000 (after the final closing of the books and preparation of final trial balances by City personnel for the year ended June 30), we will commence performing our year- end substantive audit. Our final examination will include tests which we deem necessary, including: 1. Confirmation of cash and investment balances. 2. Testing of bank reconciliations. SECTION G, (Continued) 3. Testing of allocations of interest income to the various funds. 4. Confirmation by third parties of selected sources of City revenue. support and subsequent receipt of significant receivable balances. 5. Examination of 6. Search for unrecorded liabilities. 7. Testing of long term debt balances. 8. Consideration of support and proper valuation of the liabilities for compensated absences and claims and judgments. 9. Testing of support for other significant assets and liabilities of the City. 10. Testing for the proper establishment of reserves and designations. 11. Review of significant events after year end (through the completion of our audit). 12. Review of attorney letters for significant legal matters affecting the City's financial position. 13. Testing of revenues and expenditures through analytical procedures and other substantive procedures as necessary. The aforementioned tests are only a few of the tests performed during the examination and by no means is it meant to be all inclusive. At the completion of the audits each year, Mr. Harrison, Mr. Dobrenen, Mr. Orr and our Bakersfield CKS staff will meet with the Finance Director and Assistant Finance Director to review our audit findings and any adjusting journal entries. Based upon the City records being closed and ready for audit, we plan to comply with the audit timeline for finalization of all audit reports. All City and Agency work will be coordinated with the Assistant Finance Director to facilitate staff scheduling and year-end closing. The Auditors will provide the Finance Director with periodic progress reports during the conduct of the field work. These reports will identify problems encountered or foreseen, deficiencies in work being performed by City or Agency staff, disagreements over the application of accounting principles, or other items which could result in ~delay of the audit work or additional work. We will also make ourselves available to meet with City Council, as necessary. SECTION G, (Continued) Utilization of Computers on Governmental Audits Each audit team member in our firm is assigned and utilizes a portable personal co,m, puter at the job site. The primary software program utilized by our audit staff is "Fast G - the fund system. G, once set up on each local government client will automatically accounting audit Fast produce fund accounting workpapers and financial reports. Journal entries once posted will automatically update individual, combining and combined level financial statements. Our audit staff have received specific training in this software program to facilitate effectiveness on our local governmental audits. Also utilized are Microsoft Word, Excel, Quatro Pro and Word Perfect. All of our field staff are computer literate in the foregoing programs and we could exchange data with the City staff in these programs. Additionally, each of our audit Seniors are knowledgeable of controls surrounding the EDP environment and assessing the effectiveness of those controls within the audit of the local government. Use of Statistical Sampling Based upon our preliminary assessment of control risk for the City's internal control structure, we identify those major transaction cycles where reliance upon the internal control structure is deemed to be the most effective audit approach. At a minimum, this is expected to entail tests of controls for the purchases/disbursements/payables cycle and the payroll cycle. For those transaction systems we utilize statistical sampling techniques to support a lower assessment of control risk. In conducting our tests of controls, we use the parameters set forth in the AICPA Audit Sampling Guide for statistical sampling techniques. The Guide establishes the following sample sizes when a 10% allowable risk of over-reliance is used and when the preliminary review of the internal control structure supports an expectation of no significant weaknesses or errors: Planned Degree on Tolerable Sample Reliance of Controls Rate Sizes Substantial 2% - 7% 32-114 Moderate 6%- 12% 18- 38 Minimal 11% - 20% 11- 20 The actual sample sizes used will depend upon our preliminary assessment of control risk and the extent of our planned substantive tests and analytical procedures. We statistically evaluate the results of our sampling techniques to determine whether or not any modifications need to be made to the nature, timing and extent of our planned substantive tests. Our substantive tests are designed to be responsive to the control risk revealed statistical areas of higher by our sampling. We use our firm's IBM Data Processing System to randomly select the transactions to be tested. Our computer has specialized software designed for this purpose which can produce a statistically random sample even when there are breaks in the City's transaction sequence (for example, different sets of check numbers are used). SECTION G, (Continued) Analytical Procedures to Improve Understanding of Client Analytical procedures are used by our firm in general planning to improve the auditor's understanding of the governmental unit's operations and to identify audit areas for increased attention. SAS No. 56 requires the use of analytical procedures in the and overall planning review stages of all audits. SAS No. 56 states that "analytical procedures should be applied to some extent.., for all audits of financial statements made in accordance with generally accepted auditing standards" for the following purpose among others: To assist the auditor in planning the nature, timing and extent of other auditing procedures. Analytical procedures may be used in both general planning and audit program planning. SAS No. 56 describes the two broad uses of analytical procedures in audit planning as follows: · Enhancing the auditor's understanding of the client's business and the transactions and events that have occurred since the last audit date. · Identifying areas may represent specific risks relevant to the audit. that Comparisons of account balances between accounting periods and ratio and trend analysis usually improve the auditor's understanding of the client and its operations and may identify critical audit areas, e.g., comparing general and special revenue fund expenditures by functions and revenue by source for the past two years provides an understanding of the governmental unit's operations and may identify a revenue source that requires increased attention in the current audit. SAS No. 56 requires use of analytical procedures in audit planning, but does not specify particular procedures that 'are always Our firm believes that in necessary. a governmental engagement, the auditor's preliminary analytical procedures should include, as a minimum, a comparison of current account balances in the working trial balance to similar amounts in the prior annual period's financial statements and the current period's budget. However, a thoughtful consideration of'expected relationships among account balances and periods by an experienced auditor is far more important than a mechanical comparison. The auditor should think about these relationships and bring to bear other knowledge about the governmental unit and government operations. I I SECTION G, (Continued) Consideration of Laws and Regulations Our audit approach recognizes the importance of laws and regulations in planning the audit of a local governmental entity. As a part of the audit, our firm obtains an understanding of those laws and regulations that have a direct and material effect on the determination of financial statement amounts. We then design the audit to provide reasonable assurance of detecting material instances of noncompliance that will have a direct and material effect on the determination of financial statement amounts. Assistance from City Staff Normal cooperation and assistance from City staff is expected by the auditors including typing of confirmation requests, and normal year-end schedule preparation (i.e., lead schedules, bank reconcili:ations and other support for significant asset and liability balances of the City). We would also expect reasonable assistance from City staff in reproducing permanent files or other documents and refiling requested documentation during the audit examination. As set forth in the City's RFP, City staff will prepare all Financial Statement Schedules for Individual, Combining and Combined level financial statements the Auditors will prepare the notes to Financial Statements. Should the City require our technical and accounting assistance, this would be conducted at the hourly rates set forth in our proposal. Breakdown of Professional Hours A breakdown of our professional hours by classification for each audit segment is as follows: Classification Interim Hours Final Hours Total Hours Percent Partners 24 38 62 8% Senior Manager 40 92 132 17% Senior Auditor 80 113 193 25% Professional Staff 160 228 388 50% 30___~4 471 775 100% 1 I I SECTION G, (Continued) Audit Timetable Description Date Selection of our firm April 26, 2000 Execution of contract and City is provided insurance certificates May 10, 2000 Auditors provide City staff a written listing of permanent file documents and other information necessary for the audit May 15, 2000 perform planning, internal control documentation Auditors compliance testwork and interim audit work May 31 - June 13, 2000 Review of Prior Auditor Workpapers June 6, 2000 Auditors provide feedback from interim audit work June 13, 2000 Auditors mail confirmation requests July 7, 2000 · Auditors provide City Finance staff a listing of schedules necessary for the year-end audit and. general audit plan. 1 2000 July 0, Auditors commence final audit fieldwork August 21, 2000 Progress report to Finance Director September 8, 2000 Progress report to Finance Director September 22, 2000 Auditors complete audit fieldwork October 6, 2000 Auditors provide audit adjustments, if any, to City 'Finance staff and discuss audit findings at exit conference October 6, 2000 City staff provide draft schedules for CAFR, RDA and PFA October 16, 2000 Auditors complete review of City draft RDA, PFA and CAFR and provide footnotes for all statements. October 24, 2000 Auditors finalize CAFR, PFA, RDA statements and Agreed Upon Audit Procedures report on Gann Limit. October 31, 2000 Auditors provide draft of Single Audit Report November 15, 2000 Auditors provide final Single Audit Report December 15, 2000 Auditors provide consultation (Throughout the year) SECTION H OUR FIRM'S UNDERSTANDING OF THE OBJECTIVES AND SCOPE OF THE ENGAGEMENT Our understanding of the objectives and scope of the work to be performed is based upon your request for proposal. Based upon the foregoing we understand the objectives and scope of work to be as follows: 1. We will perform an audit examination of all fund types and account groups of the City of Bakersfield for the years ended June 30, 2000 through June 30, 2004. Our examination will be conducted in accordance with generally accepted auditing standards and Government Auditing Standards. The City Finance Staff will draft the individual, combining and combined financial statements and Auditors will draft and word process the footnotes to the CAFR of the City of Bakersfield. 2. We will perform a "Single Audit" of the City of Bakersfield in accordance with the Single Audit Act Amendments of 1996 (Public Law 104-156) and OMB Circular A-133 entitled Audits of States, Local Governments, and Non-Profits Organizations. Our single audit will cover all federal grants received by the City of Bakersfield and its component units either as a primary or secondary recipient. The City will provide to the auditors the Schedule of Federal Financial Assistance encompassing all direct and pass-through federal funds received by the City. We will render our reports on the single audit in' accordance with the single audit requirements as described in Section F of this proposal. 3. We will perform a financial and compliance audit of the City of Bakersfield Redevelopment Agency for the years ended June 30, 2000 through June 30, 2004. Our compliance auditing procedures will meet the State Controllers guidelines for compliance audits of Redevelopment Agencies. The City staff will prepare schedules and we will prepare and word process notes to the financial statements. 4. We will test the City's appropriation limit and provide a letter of Agreed-Upon Procedures for the years ended June 30, 2000 through June 30, 2004. 5. We will perform a financial audit of the Bakersfield Public Financing Authority for the years ended June 30, 2000 through 2004. We will prepare separate component unit financial statements on the PFA. 6. We will perform tests of compliance with respect to the City's adherence to the City Wastewater Management Plan. We will prepare a written letter on compliance. 7. We will provide communication as required under the Auditing Standards for the Audit Committee of the City of Bakersfield. 8. We will prepare a management letter. This letter will include nonreportable conditions (those constructive comments not required to be included in the single audit report). We will discuss those comments with Finance personnel prior to its finalization. ',! SECTION H, (Continued) 9. Conrad and Associates, L.L.P. desires to keep its local government clients abreast of new I · developments affecting local government finance. In July 1999, we held a client training iI seminar for firm clients that focused on the then just recently released GASB Statement No. 34 (issued earlier that month). We were probably the first firm in Southern California to thoroughly research this important new pronouncement line by line and to I immediately provide training to our clients within 30 days of its issuance. We will also advise City staff of new accounting developments during the interim/planning stage of each year's audit. We plan on providing additional client training to our clients in our I July 2000 client training conference with respect to GASB No. 34. 10. Finally, we perceive the scope of our work as being advisors to the City of Bakersfield. i Throughout the year, City personnel will have access to the Engagement Partner, Michael Harrison, Technical Review Partner, Ken Al-Imm, Engagement Manager, Steven Dobrenen, and Senior Auditor, Brian Orr, to seek advice in the application of advise regarding debt issuance, financial statement preparation and content and other matters I relating to the City, including matters of taxation and policy relating to City fringe benefits. I With respect to the City of Bakersfield and its component units, Conrad and Associates, L.L.P. meets the independence requirements of generally accepted accounting standards and the Government Auditing Standards (1994 revision) published by the U.S. General Accounting i Office. Our firm has never had a record of substandard audit work. Conrad and Associates, L.L.P. intends to use prOfessional staff from the Bakersfield office of Carpenter, Kuhen & Sprayberry, CPA's (our subcontractor) to perform a portion of the audit work as a part of our audit team. We (and our subcontractor) are independent with respect to the City of Bakersfield. I No conflicts of interest exists relative to our firm (or our subcontracting) performing the audit. 1 I 1 I 1 I I I I I I I AUDIT FEES I (removed and bound separately) I 1 I 1 I I ,~1 I I ! I I I I APPENDIX A I RESUMES OF AUDIT ENGAGEMENT TEAM ! ! ! ! ! ! ! ! ! ! AUDIT TEAM ORGANIZATION CHART ! City CoUncil City of Bakersfield Alan Tandy City Manager Gregory Klimko Director of Finance Sandra Jimenez Assistant Finance Director (Acting) Michael A. Harrison, C.P.A. Ken Al-Imam, C.P.A. Engagement Partner Technical Review Partner Steven Dobrenen, C.P.A. Engagement Manager Brian Orr Senior Auditor I Professional Staff (Carpenter, Kuhen & Sprayberry) Bakersfield I MICHAEL A. HARRISON~ C.P.A. Engagement Partner I California CPA Certificate No. 19299E, Date Issued - 9/28/73 I iEDUCATION B.A. Accounting - California State University, Fullerton I PROFESSIONAL EXPERIENCE I 9 1/2 years - KPMG Peat Marwick (Senior Manager) 20 years - Conrad and Associates, L.L.P. (Partner) Total Auditing Experience - 29 1/2 years I Supervisory Experience - years Total 27 RELATED EXPERIENCE The following, audits were performed under Mr. Harrison's supervision. Mr. Harrison's experience in the performance of single audits under Circular A-128 and A-133 and in the financial audits of local governmental units entities and other related entities include the following: Organizational Wide Audits of California Cities (All Funds and Account Groups) City Duties Performed Dates Performed City of Orange Partner 06/96-06/99 City of Brea Partner 06/92-06/99 City of Laguna Niguel Partner 06/96-06/99 City of Westminster Partner 06/81-06/89 City of Carlsbad Partner 06/81-06/83 City of Rancho Mirage Partner 06/82-06/87 City of Indio Partner 06/93-06/99 City of Rialto Partner 06/82-06/90 City of Buena Park Manager/Partner 06/78, 06/82-06/89 I Michael A. Harrison, (Continued) Organizational Wide Audits of Califomia Cities (All Funds and Account Groups), (Continued) City Duties Performed Dates Performed City of San Jacinto Partner 06/91-06/95 City of Vista Partner 06/83-06/90 City of Delano Partner 06/91-06/94 City of Stanton Partner 06/83-06/87 City of San Clemente Partner 06/96-06/99 City of Hesperia Partner 06/95-06/97 City Partner 06/83-06/87 of San Marcos City of Escondido Partner 06/83-06/88 City of Santa Ana Partner 06/84-06/87/ 06/99 City of South Gate Partner 06/84-06/88 City of Downey Partner 06/85-06/87 City of Desert Hot Springs Partner 06/85-06/90 City of La Verne Partner 06/88-06/92 City of Azusa Partner 06/87-06/92 City of Palm Springs Partner 06/86-06/99 City of Norwalk Partner 06/86-06/99 City of Los Alamitos Partner 06/86-06/88 City of Beaumont Partner. 06/86-06/91 City of Banning Partner 06/87-06/91 City of San Gabriel Partner 06/88-06/99 City of Highland Partner 06/89-06/99 City of Hemet Partner 06/89-06/93 City of Gilroy Partner 06/89-06/93 I Michael A. Harrison, (Continued) I Organizational Wide Audits of Califomia Cities (All Funds and Account Groups), (Continued) I City Duties Performed Dates Performed i City of Temple City Partner 06/94-06/99 City of Claremont Partner 06/83-06/88 I City of Lomita Partner 06/99 City of Villa Park Partner 06/97-06/99 I City of Redlands Partner 06/99 I Audits of California Redevelopment Agencies (All Funds) Agency Duties Performed Dates Performed I Brea Redevelopment Agency Partner 06/92-06/99 I Orange Redevelopment Agency Partner 06/96-06/99 Indio Redevelopment Agency Partner 06/93-06/99 I Santa Ana Redevelopment Agency Partner 06/84-06/87/ 06/99 I Rialto Redevelopment Agency Partner 06/82-06/89 Rancho Mirage Redevelopment Agency Partner 06/82-06/88, I 06/92 Redlands Redevelopment Agency Partner 06/99 I Cathedral City Redevelopment Agency Partner 06/87-06/96 Buena Park Redevelopment Agency Partner 06/82-06/90 I Claremont Redevelopment Agency Partner 06/83-06/88 i Delano Redevelopment Agency Partner 06/91-06/93 San Jacinto Redevelopment Agency Partner 06/91-06/96 I Carlsbad Redevelopment Agency Partner 06/82-06/84 San Clemente Redevelopment Agency Partner 06/96-06/98 ! I I Michael A. Harrison, (Continued) I Audits of Califomia Redevelopment Agencies (All Funds), (Continued) I Agency Duties Performed Dates Performed i Hesperia Redevelopment Agency Partner 06/95-06/97 Westminster Redevelopment Agency Partner 06/83-06/89 I San Marcos Redevelopment Agency Partner 06/83-06/87 South Gate Redevelopment Agency Partner 06/84-06/88 I Stanton Redevelopment Agency Partner 06/84-06/87 i Downey Redevelopment Agency Partner 06/85-06/87 Desert Hot Springs Redevelopment Agency Partner 06/85-06/90 I La Quinta Redevelopment Agency Partner 06/92 Santee Redevelopment Agency Partner 06/91-06/96 I Norwalk Redevelopment Agency Partner 06/86-06/99 i Palm Springs Redevelopment Agency Partner 06/86-06/99 Banning Redevelopment Agency Partner 06/87-06/91 I Azusa Redevelopment Agency Partner 06/87-06/92 Gilroy Redevelopment Agency Partner 06/89-06/90 I Hemet Redevelopment Agency Partner 06/89-06/92 Highland Redevelopment Agency Partner 06/90-06/99 I Temple City Redevelopment Agency Partner 06/94-06/99 I Audits of Special Districts and Authorities i Duties Dates Entity Type of Entity Performed Performed Los Angeles Park and Open Space District Special District Partner 06/97-06/99 I Palm Springs Public Financing Authority Financing Authority Partner 06/90-06/99 I Yorba Linda Water District Special District Partner 06/81-06/91 I Michael A. Harrison, (Continued) I Audits of Special Districts and Authorities, (Continued) I Duties Dates Entity Type of Entity Performed Performed I County Water District Special District Partner 06/88-06/93 Los Alamitos Orange County Water District Special District Partner 02/86-02/88 I Mesa Consolidated Water District Special District Partner 06/83-06/86 I Azusa Agricultural Water Non-Profit Corp. Partner 06/87-06/93 Water Facilities Authority Joint Powers Authority Partner 06/85-06/93 I Tri-Cities Park Joint Powers Partner Authority Authority 06/92-06/99 Orange County Civic Center Authority Joint Powers Authority Partner 06/82-06/85 I Brea Public Financing Authority Joint Powers Authority Partner 06/92-06/99 Transportation System Development Joint Powers Authority Partner 06/98-06/99 I Authority Palm Springs Public Facilities Corporation Financing Authority Partner 06/85-06/99 I Norwalk Civic Improvement Corporation Financing Authority Partner 06/86-06/92 I Los Angeles County/City of Downey Financing Authority Partner 06/86-06/88 Regional Public Recreation Authority i Downey Civic Center Corporation Financing Authority Partner 06/85-06/87 Downey Water Facilities Corp. Financing Authority Partner 06/85-06/87 I Community Development Commission Financing Authority Partner 06/87-06/88 of the City of Escondido I Capistrano Bay Community Services Special District Partner 06/92-06/93 E1 Barrio Park Authority. Joint Powers Authority Partner 06/83-06/88 I Banning Corporation Financing Authority Partner 06/87-06/91 Public Facilities Capistrano Beach Sanitary District Special District Partner 06/85-06/94 I Buena Park Library District Special District Partner 06/88-06/89 i Southeast Water Coalition Joint Powers Authority Partner 06/93 I Michael A. Harrison, (Continued) I Audits of Special Districts and Authorities, (Continued) I Duties Dates Entity Type of Entity Performed Performed I City Financing Authority Financing Authority Cathedral Public 06/92-06/96 Partner Cathedral City Community Services I District Special District Partner 06/86-06/96 San Gabriel Valley Mosquito Abatement I District Special District Partner 06/93-06/96/ 06/99 I Audits of Public Housing Authorities Authority Duties Performed Dates Performed I San Bernardino Housing Authority Partner 1996-99 i Santa Ana Housing Authority Partner 1999 Hawaiian Gardens Housing Authority Partner 1994-99 I Pomona Housing Authority Partner 1995-98 Norwalk Housing Authority Partner 1986-99 I Carlsbad Housing Authority Partner 1982-84, 1993-96 I County of Riverside Housing Authority Partner 1998 Baldwin Park Housing Authority Partner 1983-84 I 1995 SOuth Gate Housing Authority Partner 1981-83 I PROFESSIONAL AFFILIATIONS AND LEADERSHIP QUALITIES I Mr. Harrison is a member of the AICPA, Government Finance Officers Association and California Society of CPA's. Mr. Harrison is a member of the Governmental Accounting and Auditing Committee of the Long Beach/Orange County Chapter of the California Society of CPA's. IMr. Harrison has been a speaker at California Society of CPA's workshops and to the California Society of Municipal Finance Officers on technical and non-technical matters. Mr. Harrison has, for the past 17 years, served on the Professional and Technical Standards Committee of the California 1 Michael A. Harrison, (Continued) PROFESSIONAL AFFILIATIONS AND LEADERSHIP QUALITIES, (CONTINUED) Society of Municipal Finance Officers. The members evaluate annually the excellence of Comprehensive Annual Financial Reports of California cities. Mr. Harrison, who was with KPMG Peat Marwick for 9 1/2 years prior to joining Conrad and Associates, L.L.P. in 1980 instructed numerous KPMG Peat Marwick courses, including: 1. Regional Staff Audit Training Courses - Staff Accountants - Instructed all modules of this five day regional audit training course 2. Regional Staff Audit Training Courses - Senior Accountants - Instructed all modules of this five day regional audit training course 3. Regional Government Audit Training - Advanced - Instructed this three day course on governmental accounting and auditing for senior accountants and management Audit Training - Basic - Instructed this one day course on 4. California Government governmental accounting and auditing in all of KPMG's seven California offices Mr. Harrison has been the coordinator and/or co-coordinator of Conrad and Associates, L.L.P. In- House Governmental Audit Training Seminars for the past 17 years. He has extensive knowledge of local governmental accounting and auditing issues and serves as an instructor semi-annually in the firm's CPE training. Mr. Harrison has been responsible for numerous consent reviews related to bond offerings. Mr. Harrison served as the firms liaison during their past four quality control reviews in which Conrad and Associates, L.L.P. received an "unqualified opinion" on the quality control of the accounting and audit practice. The following is a list of selected continuing education courses attended by Mike Harrison during the past three years. Date Sponsor Topic 01/19/95 Cal Society of Municipal LAIF Investment Pool Safety Finance Officers 02/24/95 Cai Society of CPA's Reporting Investment Losses Update on CCMA White Paper 04/25-26/95 Conrad and Associates, L.L.P. Local Government Audit Training 1995 Session I 07/24-26/95 Conrad and Associates, L.L.P. Local Government Audit Training 1995 Session II .08/07/95 Chapman University Chapman Non-Profit Seminar 11/01/95 Cal Society of CPA's Understanding Chapter 9 Municipal Bankruptcy ',l I Michael A. Harrison, (Continued) I PROFESSIONAL AFFILIATIONS AND LEADERSHIP QUALITIES, (coNTINUED) I Date Sponsor Topic 12/06/95 Cai-Society of CPA's Current Tax Developments for Nonprofits i and Tax Exempt Organizations 12/19/95 Cai~State University Fullerton Accounting and Auditing Update Accounting Focus Group I 01/22/96 Conrad and Associates, L.L.P. Accounting for Nonprofits: Contributions and Financial Statements I 02/07/96 Cal Society of CPA's Non-profit Investment Guidelines 02/25-27/96 CSMFO Annual Conference I 04/25-26/96 Conrad and Associates, L.L.P. 1996 Local Government Audit Training I 07/26-28/96 Conrad and Associates, L.L.P. 1996 Local Government Audit Training Session II i 0i/27/97 Cal Society of CPA's GASB Update - PERS Disclosures 01/31/97 Conrad and Associates, L.L.P. The New AICPA Accounting and Audit Guide for Nonprofits I 02/23-25/97 CSMFO 1997 Annual Conference I 04/21/97 Cal Society of CPA's The GASB Exposure Draft on the New Financial Reporting Model i 05/01-02/97 Conrad and Associates, L.L.P. 1997 Local Government Audit Training Session I 07/28-30/97 Conrad and Associates, L.L.P. 1997 Local Government Audit Training I Session II 12/18/97 Cai-State University Fullerton Information Technology Update I 01/27/98 CSMFO GASB 32 Accounting for Deferred Compensation Assets I 02/02/98 AICPA SAS #82 Consideration of Fraud in Financial Statement Audits I 02/22-24/98 CSMFO Annual Conference 04/23-24/98 Conrad and Associates, L.L.P. Local Government Audit Training i Session I I Michael A. Harrison, (Continued) PROFESSIONAL AFFILIATIONS AND LEADERSHIP QUALITIES, (CONTINUED) Date Sponsor Topic 06/05/98 Cai Society of CPA's GASB Financial Reporting Model 06/24-25/98 Non-Profit Resource Center Unrelated Business Income Tax and Critical Issues in Maintaining Tax Exempt Status 07/27-29/98 Conrad and Associates, L.L.P. Local Government Audit Training Session II 10/22/98 CSMFO Financial Reporting Model from GASB 11/24/98 CSMFO GASB Technical Bulletin 98-1 Y2K Disclosure Issues 02/28-03/02/99 California Society of Annual Conference Municipal Finance Officers 04/26-27/99 Conrad and Associates, L.L.P. 1999 Local Government Audit Training Session I 05/16/99 National Association of Housing Developing Audit RFP's for Housing and Redevelopment Officials Authorities 12/9-10/99 Conrad and Associates, L.L.P. 1999-2000 Non-Profit Accounting Audit and Tax Update Seminar 05/18-21/99 GFOA Annual Conference Various Technical Topics 07/26-28/99 Conrad and Associates, L.L.P. 1999 Local Government Audit Training - Session II 08/2-3/99 CBSI - CBIZ Management of Accounting Seminar 12/9-10/99 Conrad and Associates, L.L.P. 1999-2000 Non-Profit Organization Audit and Accounting Training I I KEN AL-IMAM~ C.P.A. Technical Review Partner California CPA Certificate No. 32377E, July, 1981 EDUCATION B.A. - California State University, Fullerton (Accounting) Certified Public Accountant - California PROFESSIONAL EXPERIENCE 4 years - Conrad and Associates, L.L.P. (Senior Accountant) 5 years - Conrad and Associates, L.L.P. (Audit Manager) 2 years - Conrad and Associates, L.L.P. (Senior Manager) 7 years - Conrad and Associates, L.L.P. (Partner) Total Auditing Experience - 18 years Total Supervisory Experience - 16 years RELATED EXPERIENCE The following is a summary of Mr. Al-Imam's related eXperience: Audits of California Cities Mr. Al-Imam has been directly responsible for the annual financial audits including single audits conducted under OMB Circular A-133 of the following entities: City Duties Performed Dates Performed City of Costa Mesa Partner 06/91-06/99 City of La Quinta Partner 06/92-06/99 City of Laguna Hills Partner 06/98-06/99 City of Santa Ana Manager 06/84-06/86 City of Laguna Beach Partner 06/98-06/99 City of Buena Park Senior[Manager/Partner 06/82-06/99 City of Rialto Senior/Manager 06/82-06/89 City of Rancho Mirage Partner 06/92-06/99 City of Carlsbad Senior/Partner 06/81-06/83, 06/93 -06/99 I I Ken Al-Imam, (Continued) I Audits of Califomia Cities, (Continued) I City Duties Performed Dates Performed City of Stanton Manager 06/83-06/87 I City of Westminster Senior/Manager 06/81-06/86, 06/88-06/89 I City of Azusa Manager/Partner 06/87-06/97 i City of South Gate Manager/Partner 06/84-06/88, 06/97-06/99 City of Vista Manager/Partner 06/85-06/94 I City of Banning Manager/Partner 06/87-06/91 I City of La Verne Manager/Partner 06/88-06/99 City of San Marcos Manager 06/83-06/87 I City of Indian Wells Partner 06/97-06/98 City of Escondido Manager 06/83-06/88 I City of Downey Manager 06/85-06/86 I City of Norwalk Manager 06/86 City of Hemet Manager/Partner 06/89-06/99 of San Gabriel 06/88 City Manager City of Gilroy Manager/Partner 06/89-06/99 I City of Santee Partner 06/91-06/95 I City of Whittier Partner 06/94-06/99 City of La Puente Partner 06/97-06/99 ! I I I ! I Ken Al-Imam, (Continued) California Redevelopment Agency Audit Experience Agency Duties Performed Dates Performed Costa Mesa Redevelopment Agency Partner 06/91-06/99 Carlsbad Redevelopment Agency Partner 06/93-06/99 Santa Ana Redevelopment Agency Manager 06/84-06/86 La Quinta Redevelopment Agency Partner 06/92-06/99 Buena Park Redevelopment Agency Senior/Manager/Partner 06/82-06/99 Rancho Mirage Redevelopment Partner 06/92-06/99 Rialto Redevelopment Agency Senior/Manager 06/82-06/89 Westminster Redevelopment Agency Senior/Manager 06/83-06/87, 06/89 San Marcos Redevelopment Agency Manager 06/84-06/87 Stanton Redevelopment Agency Manager 06/84-06/87 Downey Redevelopment Agency Manager 06/85-06/86 La Verne Redevelopment Agency Manager/Partner 06/88-06/99 Norwalk Redevelopment Agency Manager 06/86 Azusa Redevelopment Agency Manager/Partner 06/87-06/97 South Gate Redevelopment Agency Manager 06/83-06/88 06/97-06/99 Vista Redevelopment Agency Manager/Partner 06/86-06/94 06/92 Banning Redevelopment Agency Manager/Partner 06/87-06/92/ Gilroy Redevelopment Agency Manager 06/89-06/90 Hemet Redevelopment Agency Manager/Partner 06/89-06/99 La Puente Redevelopment Agency Partner 06/97-06/99 I I Ken Al-Imam, (Continued) I Audits of Special Districts and Authorities I Duties Dates Entity Name Type of Entity Performed Performed I Los Angeles Park and Open Space District District Partner Special 06/97 San Elijo Joint Powers Authority Joint Powers Authority Partner 06/92-06/99 I Big Bear Regional Waste Management Joint Powers Authority Partner 06/94-06/99 Authority I Encina Financing Authority Joint Powers Authority Partner 06/93-06/99 Yorba Linda Water District Special District Senior 06/81-06/82 I California Joint Powers Insurance Joint Powers Authority Partner 06/97-06/98 Authority I Encinitas Fire Protection District Special District Partner 06/92-06/93 i Orange CoUnty Water District Special District Senior 06/83 Azusa Agricultural Water · Non-Profit Corporation Manager/ 06/87-06/97 Partner . I Azusa Public Financing Authority Financing Authority Partner 06/91-06/97 · Water Facilities Authority Joint Powers Authority Manager/ 06/85-06/96 · Partner i La Quinta Public Financing Authority Financing Authority Partner 06/92-06/98 Orange County Civic Center Authority Joint Powers Authority Senior 06/83 I Transportation System Development Joint Powers Authority Manager 12/86 Authority i Norwalk Civic Improvement Corporation Financing Authority Manager 06/86 Los Angeles County/City of Downey Financing Authority Manager 06/86 Regional Public Recreation Authority I Downey Civic Center Corporation Financing Authority Manager 06/86 I Downey Water Facilities Corp. Financing Authority Manager 06/86 Community Development Commission Financing Authority Manager 06/87-06/88 i of the City of Escondido I Ken Al-Imam, (Continued) I Audits of Special Districts and Authorities, (Continued) I Duties Dates Entity Name Type of Entity Performed Performed I Public Facilities Financing Authority Manager 06/87-06/91 Banning Corporation Capistrano Beach Sanitary District Special District Manager/ 06/85-06/95 I Partner I Audits of Public Housing Authorities Authority Duties Performed Dates Performed I Santa Ana Housing Authority Manager 1984-88 Norwalk Housing Authority Manager 1986-88 I Carlsbad Housing Authority Senior/Partner 1982-84, 1993-97 i County of Riverside Housing Authority Manager · 1983-84 Baldwin Park.Housing Authority Manager/Partner 1983-84, 1995-98 I South Gate Housing Authority Senior/Manager 1981-83, 1997 I PROFESSIONAL AFFILIATIONS AND LEADERSHIP QUALITIES Mr. Al-Imam is a member of the American Institute of Certified public Accountants and the I California of Certified Public Accountants. He is also member of the California Society Society a of Municipal Finance Officers (CSMFO) and the Governmental Accounting and Auditing Committee of the Long Beach/Orange County Chapter of the Cai-Society of CPA's. I Mr. Al-Imam serves as partner in charge of the Firm's continuing education training seminars. He has spoken frequently on technical topics to various sections and chapters and at the 1998 Annual I Conference of the California Society of Municipal Finance Officers. Mr. Al-Imam has been a technical reviewer under the CSMFO Award Program for excellence in Financial Reporting for the past eleven years. I The following is a of selected continuing education courses attended by Mr. Al-Imam summary during the past three years. I Date Sponsor Topic 01/19/95 CSMFO LAIF Investment Pool Safety I I I I Ken Al-Imam, (Continued) I PROFESSIONAL AFFILIATIONS AND LEADERSHIP QUALITIES, (CONTINUED) I Date Sponsor Topic i 02/24/95 Cal Society of CPA's Reporting Investment Losses, Update on CCMA White Paper 04/25-26/95 Conrad and Associates, L.L.P. Local Government Audit Training I 1995 Session I 07/20/95 CSMFO Municipal Debt Disclosures I 07/24-26/95 Conrad and Associates, L.L.P. Local Government Audit Training 1995 Session II I Conrad and Associates, L.L.P. Accounting for Nonprofits: Contributions 01/22/96 and Financial Statements I 02/25-27/96 CSMFO 1996 Annual Conference 04/25~26/96 Conrad and Associates, L.L.P. 1996 Local Government Audit Training - I Session I 07/26-28/96 Conrad and Associates, L.L.P. 1996 Local Government Audit Training - Session II I 01/27/97 Cal Society of CPA's GASB Update - PERS Disclosures I 01/31/97 Conrad and Associates, L.L.P. The New AICPA Accounting and Audit Guide for Nonprofits i 02/23-25/97 CSMFO 1997 Annual Conference 04/21/97 Cal Society of CPA's The GASB Exposure Draft on the New Financial Reporting Model I 05/01-02/97 Conrad and Associates, L.L.P. 1997 Local Government Audit Training Session I I 07/28-30/97 Conrad and Associates, L.L.P. 1997 Local Government Audit Training Session II I 12/18/97 Cai-State University Fullerton Information Technology Update 01/27/98 CSMFO GASB #32 Accounting for Deferred I Compensation Assets 01/26/98 Conrad and Associates, L.L.P. Non-Profit Organizations Update I I ' Ken Al-Imam, (Continued) ": I PROFESSIONAL AFFILIATIONS AND LEADERSHIP QUALITIES, (CONTINUED) I Date Sponsor Topic 02/22-23/98 CSMFO Annual Conference I 04/23-24/98 Conrad and Associates, L.L.P. Local Government Audit Training 1998 Session I I 06/05/98 Cal Society CPA's GASB Financial Reporting Model i 07/27-29/98 Conrad and Associates, L.L.P. Local Government Audit Training 1998 Session II 10/22/98 CSMFO Financial Reporting Model from GASB I 11/24/98 CSMFO GASB Technical Bulletin 98-1 Y2K Disclosure Issues I 2/28-03/02/99 CSMFO Annual Conference 04/26-27/99 Conrad and Associates, L.L.P. 1999 Local Government Audit Training I Session I 07/26-27/99 Conrad and Associates, L.L.P. 1999 Local Government Audit Training I Session II 12/9-10/99 Conrad and Associates, L.L.P. Non-Profit Organizations Audit and I Accounting Training I I I I I STEVEN DOBRENEN, C.P.A. Engagement Manager California CPA Certificate 62712E EDUCATION Bachelor of Science - Business Administration (Accounting) - Biola University, La Mirada, California PROFESSIONAL EXPERIENCE 11 years - Conrad and Associates, L.L.P. (Senior Manager) RELATED EXPERIENCE Mr. Dobrenen has been assigned responsibility for numerous audits/special' assignments. This experience has encompassed financial and compliance audits of grants, contracts, cooperative agreements, and initial pricing proposals; indirect cost audits; performance audits; recipient capability audits; single audits; and quality control reviews. Each of these audits included a review of the entity's internal controls and financial management system. Audits of California Cities (including Single audits Under OMB Circular A-133) City 'Type of Audit Dates Performed Brea Annual Audit . 06/92-06/99 Hawaiian Gardens Annual Audit 06/89-06/99 City of Whittier Annual Audit 06/94-06/99 City of Orange Annual Audit 06/96-06/99 Hemet Annual Audit 06/89-06/91 Highland Annual Audit 06/89-06/90 Norwalk Annual Audit 06/89 Cathedral City Annual Audit 06/89-06/93 Annual Audit 06/89-06/91 Banning Palm Springs Annual Audit 06/90-06/91 Audits of California Redevelopment Agencies Agency Type of Audit Dates Performed Brea Redevelopment Agency Annual Audit 06/92-06/99 Hawaiian Gardens Redevelopment Agency Annual Audit 06/89-06/99 Hemet Redevelopment Agency Annual Audit 06/91 Whittier Redevelopment Agency Annual Audit 06/94-06/99 Orange Redevelopment Agency Annual Audit 06/96-06/99 Cathedral City Redevelopment Agency Annual Audit 06/90-06/93 Palm Springs Redevelopment Agency Annual Audit 06/90 Banning Redevelopment Agency Annual Audit 06/90-06/91 I I Steven Dobrenen, (Continued) I Audits of Special Districts and Authorities i Dates Entity Type of Entity Type of Audit Performed Yorba Linda Water' District Special District Financial 06/89 I Norwalk Child Development Program Local Government Financial and 06/89-06/90 Compliance I Audits of Non-Profit Organizations I Organization Type of Audit Dates Performed Legal Aid Society of Orange County Annual Audit/A- 133 01/97-01/99 I YWCA of South Orange County Annual Audit/A- 133 12/94-12/96 Orange County Council of Campfire Annual Audit 12/89-12/90 Orange YMCA Annual Audit 06/89 I Sutton Foundation Annual Audit 06/89 United Agricultural Business League Annual Audit 12/96-12/98 Public Law Center Annual Audit/A- 133 12/94-12/98 i San Femando Valley Neighborhood Legal Services ' Annual Audit/A- 133 12/97-12/98 I COMPUTER SKILLS AND PROFESSIONAL INVOLVEMENT Mr. Dobrenen is proficient in IBM compatible computers including Quatro Pro, Lotus 1-2-3, IMicrosoft Excel and Word, Word Perfect, Accountants Trial Balance and Prentice Hall's Government Fund Accounting Software FAST-G. Mr. Dobrenen is a member of the American Institute of Certified Public Accountants and California Society of Certified Public Accountants. I CONTINUING EDUCATION TRAINING I The following is a summary of pertinent continuing education courses attended by Mr. Dobrenen during the past four years. I Date Sponsor Topic 01/19/94 Cal RDA Association The Community Redevelopment Law Reform Act of 1993 I 04/18-20/94 Conrad and Associates, L.L.P. 1994 Government Audit Training I 07/25-27/94 Conrad and Associates, L.L.P. 1994 Government Audit Training 04/25-26/95 Conrad and Associates, L.L.P. Local Government Audit Training i 1995 Session I I Steven Dobrenen, (Continued) I CONTINUING EDUCATION TRAINING, (CONTINUED) I Date Sponsor ToPic 07/20/95 CSMFO Municipal Debt Disclosures I 07/24-26/95 Conrad and Associates, L.L.P. Local Government Audit Training 1995 Session II I 01/22/96 Conrad and Associates, L.L.P. Accounting for Nonprofits: Contributions and Financial Statements I 04/24-26/96 Conrad and Associates, L.L.P. Local Government Audit Training 1996 Session I I 07/26-28/96 Conrad and Associates, L.L.P. 1996 Local Government Audit Training , Session II I 01/27/97 Cal Society of CPA's GASB Update - PERS Disclosures 01/31/97 Conrad and Associates, L.L.P. The New AICPA Accounting and Audit '1 Guide for Nonprofits 05/01-05/97 Conrad and Associates, L.L.P. Local Government Audit Training 1997 - Session I I 07/28-29/97 Conrad and Associates, L.L.P. Local Government Audit Training 1997 - Session II I 01/26/98 Conrad and Associates, L.L.P. Non-Profit Audit Training 01/27/98 Cal Society of CPA's Accounting for Deferred Compensation I Assets - GASB No. 32 02/23-24/98 CSMFO Various - Annual Conference I 04/23-24/98 Conrad and Associates, L.L.P. Local Government Audit Training I 06/05/98 CSCPA Update on New Financial Report Module 06/10/98 City of Professional Education Auditing Employee Benefit Plans I 07/27-29/98 Conrad and Associates, L.L.P. 1998 Local Government Audit Training 04/26-27/99 Conrad and Associates, L.L.P. 1999 Local Government Audit Training I 12/9-10/99 Conrad and Associates, L.L.P. Non-Profit Organization Audit and Accounting Training I Senior Auditor I EDUCATION Bachelor of Science - Business Administration (Accounting) - Biola University PROFESSIONAL EXPERIENCE 3 Years - Conrad and Associates, L.L.P. RELATED ExpERIENCE Mr. Orr has been assigned responsibility to numerous audits/special assignments. This experience has encompassed financial statement audits of municipalities; compliance audits of grants, contracts and cooperative agreements; nonprofit organization audits; and single audits. Each of these audits included a review of the entity's internal controls and financial management system. Audits of California Cities (including Single Audits conducted under OMB Circular A-133) Performed for City Type of Audit Years Ended La Verne Annual Audit 06/98-06/99 Indio Annual Audit 06/99 South-Gate Annual Audit 06/97-06/98 Buena Park Annual Audit 06/97 Gilroy Annual Audit 06/97 Costa Mesa Annual Audit 06/97 Bell Annual Audit 06/97 Orange Annual Audit 06/97 La Quinta Annual Audit 06/97 Indian Wells Annual Audit 06/98 Pomona Annual Audit 06/98 I Brian Orr, (Continued) I Audits of Califomia Redevelopment Agencies I performed for Agency Type of Audit Years Ended I La Verne Annual Audit 06/98-06/99 Indio Annual Audit 06/99 I South Gate Annual Audit 06/98 Costa Mesa Annual Audit 06/97 I Compliance Audits I Performed for Entity Type of Audit Years Ended i Transient Occupancy Tax for the City of Indian Wells Annual Audit 06/99 Indian Wells Golf Resort Annual Audit 06/98 I Air Quality Management District for the City of Costa Mesa Annual Audit 06/97 I Airborne Law Enforcement for the City of Costa Mesa Annual Audit 06/97 I Audits of Special Districts and Authorities I Performed for Entity Type of Audit Years Ended i San Elijo Joint Powers Authority Joint Powers Authority 06/98 South Bay Regional Public Communications Authority Joint Powers Authority 06/98-06/99 I Independent Living Center Annual Audit 06/97 I California Center for the Arts - Escondido Annual Audit 06/98 Southeast Water Coalition Annual Audit 06/98 I I I Brian Orr, (Continued) Other Audits . Performed for Entity Type of Audit Years Ended Palmetto Health Care Home Health Care Cost Report Audit 12/96-12/97 Wellmark Health Care Home Health Care Cost Report Audit 12/96-12/97 Health Care Financing Authority Health Maintenance Organization Compliance Audit 12/96 Blue Cross of California Skilled Nursing Facility Cost Report Audit 12/96 COMPUTER SKILLS AND PROFESSIONAL INVOLVEMENT Mr. Orr is proficient in IBM compatible computers including Excel, Word Perfect, Word, Accountants Trial Balance and Prentice Hall's Government Fund Accounting Software FAST-G. CONTINUING EDUCATION TRAINING The following is a summary of pertinent continuing education courses attended by Mr. Orr during the past two years. Date Sponsor Topic 07/28-30/97 Conrad and Associates, L.L.P. 1997 Local Government Audit Training Session II 01/26/98 Conrad and Associates, L.L.P. Non-Profit Training 04/23-24/98 Conrad and Associates L.L.P. 1998 Local Government Audit Training Session I 05/27-28/98 Conrad and Associates, L.L.P. Wellmark Home Health Agency Cost Reporting 07/27-29/98 Conrad and Associates L.L.P. 1998 Local Government Audit Training - Session II 11/23-25/98 Conrad and Associates L.L.P. Palmetto Home Health Agency Cost Reporting 04/26-28/99 Conrad and Associates L.L.P. 1999 Local Government Audit Training - Session I 07/26-28/99 Conrad and Associates L.L.P. 1999 Local Government Audit Session II Training 12/9-10/99 Conrad and Associates L.L.P. Non-Profit Organization Audit and Accounting Training 12/6-9/99 Conrad and Associates, L.L.P. Medical Services Audit Group Training APPENDIX B RESULTS OF MOST RECENT QUALITY CONTROL REVIEW PCP -' OFM Conrad & Associates, LLP is admitted to . PCPS/Partnering for CPA'Pract~ce Success The AICPA Alliance for CPA Firms and is entitled to all rights and privileges of membership. I I ~IERIWETHER~ WILSON AND COMPANY~ P.L.C. CERTIFIED PUBLIC ACCOUNTANTS I CRAIG A. DrrSWORTH, CPA OFFICES AT TELEPHONE WILLIAM H. BOORN, CPA 1200 VALLEY WEST DRIVE, SUITE 400, WEST DES MOINES, IOWA 50266WEST DES MOINES ........5! 5/223-0002 i MICHAEL E. RILEY, CPA 1307 . 2nd STREET, PERRY, IOWA 50220 DENNIS L MUELLER. CPA PERRY ........................... ~..5{5/46.5-3591 RICHARD C. BJORLO, CPA DENNIS J. WAGNER, CPA . FAX RICHARD P. McGINN, CPA WEST DES MOINES. ........ 515~223-O430 STEPHEN L KOEHN~ CPA PERRY ............................. 515/465-3593 I SUSAN K. C~D, CPA C. MARK LINCOLN, CPA JOHN E. ORTHAUS, CPA SCOTt W. MILLER, CPA MICHAELT. BURTON, CPA I To the Partners I Conrad & Associates, L.L.P. i We have reviewed the system of quality control for the accounting and auditing practice of Conrad & Associates, L.L.P. (the firm) in effect for the year ended December 31, 1997. Our review was conducted in conformity with standards established by the Peer Review Board of the American Institute of Certified Public Accountants (AICPA). We tested compliance with the firm's quality control policies and procedures to the extent we I considered appropriate. These tests included a review of selected accounting and auditing engagements. In performing our review, we have given consideration to the quality control standards issued by the AICPA. i Those standards indicate that a firm's system of quality control should be appropriately comprehensive and suitably designed in relation to the firm's size, organizational structure, operating policies, 'and the nature of its practice. They state that variance in Individual performance can affect the .degree of compliance with a firm's quality control system and, therefore, recognize that there may not be adherence to all policies and procedures in I every case. In our opinion, the system of quality control for the accounting and auditing practice of Conrad & Associates, i L.L.P. in .effect for the year ended December 31, 1997, met the objectives of quality control standards established by the AICPA and was being complied with during the year then ended tO provide the firm with reasonable assurance of conforming with professional standards in the conduct of. that practice. I Conrad & Associates, L.L.P. is a member of the private companies practice section of the AICPA division for CPA firms (the section) and has agreed to comply with the membership requirements of the section. In connection with our review, we tested the firm's compliance with those requirements to the extent we considered appropriate. In our opinion the firm was in conformity with the membership requirements of the section during the year ended I December 1 in all material 31, 997, respects. ! MERIWETHER, WILSON AND COMPANY, P.L.C. Certified Public Accountants I May 7, 1998 West Des Moines, Iowa ! I MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS ' O I August 28, 1998 California Society I Ce~ed Ronald L. Conrad, CPA Conrad & Associates, LLP Pllblic 1100 Main St., Suite C IAcc0untan~rvine, CA 92614-6730 Peer Dear Mr. Conrad: Review It is my pleasure to notify you that on August 26, 1998 the Program California Peer Review Committee accepted the report on the most i recent peer review of your firm. The report will now be placed in the public files of the Division for CPA Firms. The due date for your next review is June 30, 2001. This is the date by which all review documents should be completed and submitted to the I administering entity. .. As yo'd ·know, the reviewer' s opinion· was unqualified. The I Committee asked me to convey.its congratulations to the-firm. Sincerely, I Linda NcCrone Director, Technical Services I cc: Dennis J Wagner, CPA i Firm Number: 10095453 Review Number: 126105 255 Shoreline Dd~ Red~xt Ci~; CA 94065-1404 {650) 802-2486 F,xx (650) 80Z-2350 x~xt<calcpa.org I I I I I I I I APPENDIX C PROPOSER GUARANTEES 1 I APPENDIX C PROPOSER GUARANTEES 1 i I. The proposer certifies it 'can and will provide and make available, .as a minimum, all services set forth in Section II, Nature of Services Required. ! I Michael A. Harrison I Partner Conrad and Associates, L.L.P. March 22, 2000 I 1 I 1 I ! ! I ! ! I ! I I I I I I I I APPENDIX D, . PROPOSER WARRANTIES I I 1 ! I 1 ! ! ! ! ! I APPENDIX D I PROPOSER WARRANTIES I A. Proposer warrants that it is partnership duly licensed with the California State Board of Accountancy. B. Proposer warrants that it is willing and able to obtain an errors and omissions insurance I providing a prudent amount of coverage for the willful or negligent acts, or policy omissions of any officers, employees or agents thereof. I C. Proposer warrants that it will be subcontracting professional staffing from the Bakersfield office of Carpenter, Kuhen & Sprayberry, CPA's. Conrad and Associates, L.L.P. takes full responsibility for conduct of the work to be performed and supervision of staff of our I subcontractor. D. Prosper warrants that all information provided by it in connection with this proposal is true and accurate. ! I Michael A. Harrison Partner Conrad and Associates, L.L.P. I March 22, 2000 1 I 1 IMAGE *"" ooo 800/591-2788 661/872-9424 Fax: 661/872-0664 ,5330OfflceCenterCoun' Bakersfield. CA93309 Image Bakersfield Campaign: "California's Best Kept Secret" Sponsorship Package and Mission Our mission is to establish a free enterprise co-operative, to .create a "positive image" of Bakersfield and outlying areas in the minds of potential visitors or new citizens, for the purpose of promoting continued growth and economic stability, and developing a sense of community pride within our own poPulation. Results for the Sponsors : As the population and visitors increase so,:...does the potential income of the sponsor. New homes are purchased, more phones and cable are needed, more consumer products are purchased, increased businesses bring more jobs, and leisure activities will encourage more hotels to be booked for conventions and conferences. Improving the image of Bakersfield is good for everyone's business. Premier Sponsorship Co-operative Ad Campaigns in surrounding areas (ie. Los Angeles, San Francisco, and Bakersfield. Premier Sponsors receive: 12 page tabloid, full color - ~A page advertorial Website links Press Releases/monthly Radio and TV bookings, if appropriate Target TV and Radio hosts and celebrities for positive comments Additional 500 tabloids to be used for sponsor's marketing Investment: $25,000 SOUTHEAST BAKERSFIELD PUBLIC-PRIVATE PARTNERSHIP WORKING GROUP MEETING STATEMENT (Disclaimer) · This is not a Southeast Bakersfield Redevelopment (PAC) meeting. The PAC is represented by other community interests as well as the business community. · This is a PAC Business Subcommittee meeting. I serve as the Chairperson of this Committee and was elected to the full PAC to represent the interests of the Southeast Bakersfield business community. If action by the full PAC is necessary a recommendation will be forwarded from this Committee to the full PAC for action. · This meeting is not intended to support or recommend any particular project. It is intended to look at the overall Southeast Bakersfield Redevelopment Project Area to facilitate/develop a business and conceptual master plan. Our effort is to ensure that no area in the Southeast Bakersfield redevelopment Project Area is overlooked and that the community is involved in the process of prioritizing business services needs. · The process will be to hold future Community/Public-Private Padnership. meetings and forums, seek to bring new business services, expand existing business and encourage new small business start-ups in the area. · This meeting is co-sponsored by the Southeast Bakersfield Business and Property Owners Association who helped cover the expenses of this meeting. PURPOSE OF MEETING .. I. Discuss and initiate a public/private partnership-working group to develop an overall business and conceptual master development plan for the Southeast Bakersfield Redevelopment Project Area. The plan is intended to include development of housing, commercial, and industrial projects. " II. Organize and bring together Southeast Bakersfield Redevelopment Project Area stakeholders; the business and properly owners that are the source of the tax increment dollars to be collected from the project area. The tax increment is projected to be $94 million dollars over the next 20-year period. III. Identify all public and private resources, funding and professional services to assist with economic development of the Southeast Bakersfield Redevelopment Project Area. "SUCCESS IS A JOURNEY NOT A DESTINATION" SOUTHEAST BAKERSFIELD PUBLIC-PRIVATE PARTNERSHIP WORKING GROUP MEETING LIST OF INVITED REPRESENTATIVES · Mayor Bob Price · City Councilwoman/Vice Mayor Irma Carson · City Councilman David Couch · City Councilman Randy Rowles · Bakersfield Redevelopment Agency (BRA)- (Chairman Howdy Miller) · BRA- Albert Prince · BRA-GilAnthony · Southeast Bakersfield PAC Chairman - Art Powell · Southeast Bakersfield PAC Marvin Dean · Bakersfield City Manager Alan Tandy · City of Bakersfield Economic Development Department (Jake Wager) and staff · Kern economic Development Corporation · Greater Bakersfield Chamber of Commerce · Vision 2020 · Capital Solutions Group (Redevelopment financial consultant) · David Paul Rosen and Associates (Redevelopment project consultant) · A.C. Lazzaretto and Associates (Redevelopment project consultant) ';," · Cai State University Bakersfield · Bakersfield College '~ · Kern County Superintendent of Schools · Bakersfield City School District · Kern County Board of Supervisors, Supervisor Pete Parra · Fannie Mae · Wells Fargo Bank · Bank of America · Union Bank · Bank of Stockdale · Washington Mutual Bank · West America Bank · U.S. Department of Housing and Urban Development · Eden Housing Corporation · Glen Hierlemeier · Calcot (Business) · Reverend(s) Oscar and Ralph Anthony (Community) · Southeast Bakersfield Business and Property Owners Association · David Cross (Business and Architect) · Eddy Graham (Architect and Planner) · Ken Soren (Architect) · John Spencer (Community) · PAC members · Dorothy Tumble (Community) · Mary Helen Barro (Business) · Other CommUnity Members Co-sponsored by the Southeast Bakersfield Redevelopment PAC Business Subcommittee Southeast Bakersfield Business and Property Owners Association SOUTHEAST BAKERSFIELD REDEVELOPMENT PAC BUSINESS SUBCOMMITTEE PUBLIC-PRIVATE PARTNERSHIP WORKING GROUP MEETING TUESDAY, JANUARY 18, 2000 1 1 :OO A.M.- 1 :OO P.M. AGENDA · Welcome · Purpose of Meeting · Self Introductions · Overview of 8outheast Bakersfield Redevelopment Project Area · HUD Speaker/Remarks ( Community Builder Program) · Questions and Answers · Business/Conceptual Master Plan I SoUtheast Bakersfield (P'rOposal) · Question and Answers " · Public I Private Resources- Discussion · Tax Increment Financing · CRAIBanks · State and Federal funding · Private Sector Business Resources ;.. · Public-Private Partnership Working Group · Future Meetings and Community Forums · Develop recommendations for PAC, BRA and City Council action · Southeast Bakersfield Business and Property Owners Association · Wrap-up and closing remarks Note: Lunch will be catered in at 12:00 noon. Co-sponsored by the Southeast Bakersfield Business and Property Owners Association SOUTHEAST BAKERSFIELD PUBLIC-PRIVATE PARTNERING WORKING GROUP MEETING Tuesday, January 25, 2000 1:00 p.m. - 2:30 p.m. · Welcome · Purpose of meeting · Self Introductions · Overview of Southeast Bakersfield Redevelopment Project Area · HUD Speaker Mr. Raymond Richardson · Economic Development Participation · Job Creation · Shopping Center · Housing · Q&A · Roundtable Workshop Discussion · Review of Business Plan/Conceptual Master Plan for the Southeast Bakersfield Redevelopment Project Area) · Review of Possible Consultants-Similar Projects · City of Monterrey Park Shopping Center Project (500,000 sq. ft.), Consultant- Briggs & Associates · Future Meeting Schedule: Fourth Tuesday of each month, 10:30 - 12:00 noon at the Beale Library. · Wrap-up and Closing Remarks For further information contact: Marvin Dean at 661-831-5067 Co-sponsored by the Southeast Bakersfield Redevelopment PAC Business Subcommittee Southeast Bakersfield Business and Property Owners Association SOUTHEAST BAKERSFIELD COMMUNITY NEIGHBORHOOD HOUSING DEVELOPMENT MEETING Tuesday March 28, 2000 10:30 a.m. - 12 Noon Agenda · Sign in sheet/name, phone, organization Welcome · Self Introduction · Overview of project area and other proposed project and activity, presented by Dave Cross · Homebuyers Education Program, presented by Nancy Johnson · Southeast Bakersfield Infill Housing Project Proposal (Explain package handout and discuss details. We are requesting each Bank to consider committing to one house development with goal of doing minimum of 10 deals each), presented by Marvin Dean · Q&A .. · Around table discussion: concems,-issues and comments. · Adjourn - Next meeting April 11, 2000, 10:30 - 12 Noon - Presentation by Commonwealth Title, discussing Vacant lot acquisition. Consumer Credit Counseling Service of Kern & Tulare Counties Homebuyer Education Program Course Materials: FItA, Homebuyer Education Learning Program Guide Fannie Mae, Guide to Homeownership Fannie Mae, Building a Better Credit Record Fannie Mae, Knowing & Understanding Your Credit Details C~urse requirements include three (3) classroom sessions and one (1) follow-up counseling session. · Each session is four hours long. · Total per student commitment is 16 hours (course can be emended per need). Module I: Budgeting for Your Home Purchase The focus of this module is to highlight the differences between homeownership and renting. Our goal is to provide a good foundation for students to begin to evaluate their own situation and readiness for homeownership. A great deal of emphasis is placed on the importance of budgeting for the downpayment, and the importance of budgeting after you purchase your home. · How to budget. Where to begin and why. · What are your goals? · Do you control your finances? · Keys to successful budgeting. · Case study. · Q &Aperiod. Module 2: Shopping for Your Home This module will cover the beginning steps in looking for a suitable home. · Where will your home be located? · What community amenities are important? · 'What are your needs? · Is adequate transportation available? · Convenience, safety, schools, etc. · Evaluating neighborhoods. · Selecting a Real Estate Agent. !'~,HE BAKERSFIELD ' ' ..~ . ~,.. f :".':" i' . ....1,,. "~: , :" I t~ALIFOR.N,!AN:,',:-:!7"':"~' "' "~:'"' ' ' ' ""' "" " ~" ~ ,., , .,.,:,' -', . . : ~ . ."WWw, bakersfield.com',.,: l: ',,:' ..... :,. : . l .... ,E ./ ' ,. '?~ . ",'~77.'""~,",~ · .~ c'::~c ~,, . . -'~ 'v ,'l. b.,., :, ,,,,' ' ~L" ~'",";'. ;?, : ,,. : ; . ' 31~.95-7413,'fax: 395-7519.:.-, .., , , ..... mai ocal@bakersfield com,, ..... ,% . . ,.t : , ,- ,. , · . · · . ' , , · . · ; ';£~;~::.~;~ ;:"/r'?,'-,~~' ~:'~'"~' "'; ", ";:~-'.~,':;;~b:r;~;h:;" ',. ' ":'~.""~ '"!%~i.'..~?"~.'.~t~'':' '." ,:..'' .' ~, :'I.,~, '~..' .. ~ · .. . . ~ ?"" , .. ,., :. - : ,:,'/, .~,:.? . .. . , · .~";':'"'.'?~:'::'; ...................... ; ................ ;....... ',' '.' "' .' '3, '$' ~ ~ ~'.~'~¥'~'? '' , * ", ' ,' ' .' iOfficials .w!th;controVe ;WraCked; '~:r,~zt~,~ew Ofth i Incor, i '": :'" .age. ncy mak,ng seCond attempt.': ~Mig~.tion",.Z~p.m. :/ .' ,,~ ,' , ~ , , , ,..,. ,, ;efforts to attract id( :-~ . . · ,~ y,C. HR~ BEDELI.,'. ;'=.~.~,~,,,; .~tc]ais.,,~['. me; Ee~ uotm~7, iEc0P0mic..i, .. KCE~C is a ~edem ~.v, ent3;301 ,, ,. .... ?r.:,.ai execuave .(arec~r .a~ter .$e.~ ~. 1i42 S}'P'St;.Free ~,' ' ::'C ... '.: :.,... --.'0: ,..':." '..,' '.t:'~!:';i..;..' :' ~''':" "' .~ ....... '- ..'.' p.m.~,'Wei!l;institUte;'2100,C13esterh; .;} :, i .'~: :... ,.. ,... ?,-.. ,,:, ?:,:-~,,.,:,.~..... ...A. ve.;Eachsessionis$5 ............ '" "1 .,.: "~ ;' ,:.:4, .' '...., .. ; '. ,..:,, ' · I, .:, ;~ree w, orkshops for" ~ a.m.to 1 p m, 5300 Lennox 'Sulte200..Top,cswill.include. getting; ..:.,. ...: . ........ . . . . · '. ;Pm. appro~ediishopp~g'foi'a'home, lv ' ?: ; ..... :: "':" ..... :","? ":',:*J, '"" .'"' .": .:,i..making an.offer; shopping'¥or;a 10a~'i: , , .~.c , ...:; ..,: :...,,:.. ,;.,.. ,;.~ ..:%. ,: ~... ,.-, .. · c.. -' . - ,.- .t.c:-c' .'; ' ..., Limited seating. Details, 324-9628,..,,;. '. '~' "' ~'! !''* ' .... toration; ednesday storytlme; ':! i~ ,~' ' Russo's Marketplace Bo~ks;:l ':? '",'~ ~' "' '" .... , ..'.!, , , , .,; .'., ,.. ',.'.,:/.'.'.' ,.'! .: ~. 'nce upon ='~ie,. "the advent 'of exit;, no~llbound tmvelers found their w~¥ into'down~:.~'~, ,'. ,. ',~:';::' town Bakersfield by tondng: Weight ma'na~iement class;"3 to 5'; ' . "' left; from Union Avenue onto'igth Street.' . SOUTHEAST BAKERSFIELD HOMEBUYER PROGRAM Purpose · To promote homeownership opportunities in the Southeast Bakersfield Redevelopment Project Area for affordable single family housing. Program components: · Homeownership educational information and assistance for first-time homebuyers. · Homeownership preparation and assistance for Iow-income family new homebuyers. · Homeownership counseling and referral assistance for new homebuyers in SOutheast Bakersfield · Homebuyer assistance and special financing programs for homeownership in Southeast Bakersfield. · Homebuyer mortgage loan approval packaging assistance for homeownership in Southeast Bakersfield. · Homebuyer pre-approval for purchase of new, aff.,ordable, single family 1200 sq. ft. 3 bedroom 2 bath homes to be constructed throughout the Southeast Bakersfield Redevelopment Project Area. · Homebuyer program will provide assistance to all major commercial bank with marketing their Community Reinvestment Act (CRA) program requirements for affordable homeownership in targeted neighborhood located in the Southeast Bakersfield Redevelopment Project Area. · Homebuyer program' will provide eligible hOmebuyers with referrals to public financing for homeownership programs for down payment assistance, Iow interest loans, and grants. · Homebuyer program will assist existing homeowners to locate licensed general home improvement contractors to make needed home improvement repairs and arrange for Iow interest repair loans. For information contact: Marvin Dean 661-324-7535 Sponsored by the Southeast Bakersfield Business and Property Owners Association SOUTHEAST BAKERSFIELD PUBLIC-PRIVATE PARTNERING* WORKING GROUP FLEETING Tuesday, February 29, 2000 10:30 a.m. - 12:30 p.m. · Welcome · Introductions · Purpose of Public-Private Partnership · Overview of Conceptual Master Plan for Southeast Bakersfield Redevelopment Project Area · Speaker: Theodore Chandler, Fannie Mae Programs and commitment to affordable housing in targeted neighborhoods · Commercial Banks CRA Housing Programs,,for Homeownership in Southeast Bakersfield Redevelopment Project Area · City-County Housing Programs and Assistance for Homeownership in the Southeast Bakersfield Redevelopment and Enterprise Zone Project Areas · Overview of Southeast Bakersfield Community Neighborhood Infill Housing Development Project · Roundtable discussion on Public-Private Partnership to Develop Affordable Housing in Southeast Bakersfield Redevelopment Project · Future Meeting Schedule: Last TUesday of each month, 10:30 - 12:00 noon at the Beale Library. · Wrap-up and Closing Remarks · Adjournment Co-sponsored by the Southeast Bakersfield Business and Property Owners Association Bakersfield Redevelopment Initiatives' Partnership Opportunities Fannie Mae February 29, 2000 · founded nine years ago. million, or 50 cents a share, compared with $141.1 million, or 45 cents ii.' '~¢ .: Hoagland, who announced p!ans . a share, a year ago, matching expectations. Revenue was up 8% to I~,.. '.,; :/., .to,leave 3ast~ Year, will:'r~~ t~e:$3-' '~ $1.62'billion..'<..Talbots Inc., a retailer of women's and children's '/i:;~ .'i :.'billi~n ~:Hewlett ?'Four/dation?~The .! ?.:clo~g,'said itS,fi~.cal.,f0Ui'th~uarter profitsurged 88% to $15.3:mi~-, ~ (i:i":i?:ii;i?foundation ::.,,vas, started 'by.:: .Bill; !Tii~n," 6i~' 4Silents': a~Sh~e'~ fr0m' $8.12 million, or 26 cents, a. year..ago.. [:.~!!!H~!i~tlt;!;:~h0.C~found.e,d;~l~tt:..?: ~i~ 'Sales!roi~;,l~.,2,%'i/~'.i$3751'6;million..i'. :Specialty retailer~.,Wffiiams-:./ ?~i~!.'Pac~ co:'in'193s: '~;:, ;.~ ": ',: ': '~': :;S~nomi'~', r~l~ed.f~urth-quarter net income of $48.?milliop,'82. ~teN!',i!~ii,i. Th~stanfprd.end°wment has;! ' ~ntsper.shar~cb~p~redwith$43.9million, or75cents, a'yearago. ~ent?.i;l.~It'~d:'~atu~s'.0ff14.2%~a:year,:'bn'i .~ales ros~ 22%~[o!$537.2'million.. '...'Home furnishings retailer. ~ness':,i??aver. age~ OVer:.the .last .decade,' said .i ";: RestoratiOn Ha~d~r~ inc. said fourth-quarter net income fell to .4,¢ H0~gl~ld~ In.th~ fiscal year ended ! $3.9 million, or 23'cents"per share, compared with $6.2'million, or,35 An-,'.!"!'.in'Aug~.~t;it:return~d36.3%.:,,~,.,..., ,....., ,. ., .. . :: :,;',-?. '!centsi'ayear ago.:Sales.rose32% to $116.2.milhon. (BloombergNews) has,,': .. '-:. :,The~top.return for endowments '..' ...... "" .... .... ' ' ' ' .... tor of :~ ..~ith.fiscal years'ended,in jUne was GuidetO'Our Staff;., Need to rea,ch Business section reporters . en(i,y:.,;:i.:.:29':3%ilast~y~ar,'~ccording'to'the.:: i!'oreditors?.lAguide!g0thesectionsstaffcanbefound.q.ti',~ '.: .... :.:: ,e,_r~nlg_(..i:iN~/i0nal Assn; of College' ,and:pnii!: ?.http:{."/w. wWilati~s;~Pin/bizsta/f . ...."..:'. :.' ::;.'.t · ' ~o..s'.;~:~r~itYBUsiness0ffjcers.'!:':;?'~'~:?':','~'"'~" '."~:'~:'~": i" '~'".' :. '. 'i '". ". """. "...' at di :~.,,.......,,,..,,, ,..:..,.... :... ....... . .... ,.,, ...,. ..... ..... . ... ,- ..... ,, , . . t:.', "':':' ~ ' . ~ ,' .... .-. '." :--:,.:,~,': .'-.~,'. '~'-' .: '".? '. ' · .' ..... ,' ':' :/.::. ,.:'.:.:;.'.':'..i :,,:: ,,: ,.;,.. ,Fanm .MaeP[ ,$.2-Trillion program at " i I 'Prom l,reuter~ · ~ . · · ' · ' . ed__. ": "~.' :.',' ,~ ":. ~'~"'"',,; ., . . ,:.:;,.:';.;" · ~aenaveoeenunaerpressure~rom.'.:2 ihich '.. ii ;1 lm~ lJUSliless'BleWs :..:,.;: [,i::':~:.r: .i~;~ :~ ~,,,mt, m~v (~ :~"' ~,~,,,,~o u s. re~ulatbrs to do more to: help: ~Emy..~:.~ i .Oil the Radio',., . .. :-'. '.1' .':','[' ~ao, ,~'o" ~,,~,~,t.'~ s ~roVider of lower-income groups buy homes, · tners C" .. ',. .... ~" ' .... :?,-~-~,. -:--...":~-.~-' w ',.', ' s Officials~ said the agency would ...... :: CGet'u~to4he.mmute reports ' ..[ ,' hem? financing, pledged. W. edne - . . . . . i~:i. ,, ~ '~:; : ~.6n the mark~t'i,,'entertai~en,.t.i:i li!:iday ,t0 bUj,, °ver.10'years, $2. trillion spur. lend!ng by ,o.,ff.ermg~ '.:, ,!. ' .,~a;;~,~,'.~,~;,~,,n r~,,~a~in ':':'~'~? ~;~,.",~,,;~,ooes' ':"to'~' 10~ver:income mortgage mn proauc~s an.~ mrmm~ ' '""~?~"'a .....' ........... ..... : ?[."~" :?";':"'~" "~'"~"~' ' ~', ...... ;'"' ..... '"' . ' artnerships with foundations; local! ,:: ."": ":busmess and0ther news on:..::'.~, J . groups to make it eas!e,r; fpr.18 mil- P ..., . , ...:.. !the KFWB-L0s Angeles ~mes;:;] ii: governmen}s, aevelopers.ana '; No~n :Susine~,Hour; every" ,: ,'. lion families..to own'a home/::/' ;'.' .., [ '['?." !The.'agency? sai'd'i the Ii p~'0gram, munity-based lenders, .' ;, .'..[ weekday,.0'nKl~ .AM (.9,,01..?..i ~alled the ',~[~i5'c~i~'D~e~i~ Com. The plan is the se¢0nd' such pro- '"'iiI:, :The Noon Business Hour.:.:.'i: ,;,' . : '""' ..... '"''' ..... :" "s . . 'matment "vail;target mmo. nt~e, .gram.t0 be Unveiled by the agency .. ,:.. .'. young, families;':new,. ~m$~grants, in .recent Years. ' In11994 it . ;''"?"~l '~[i'P~'t'0f'aG°ldenMike:a'ward":" f~liesheadedb~9'me~i'~d°ther '$1trilli°n°verseyenyears . i.}.f6~ Kl~Bin'e~o.n.'{}',m. ic :" :; [;.)'.! i :n~{i~lati0n ·:'segments. lagging, in 10 million families in underserved ': . population Segments bt~y homes. ' , homeOWnership:,!: ,:. :~;:,}::; .:.. . ...';' :[. [~:: reporti.n,g. ,The a.w. ard, for !,: .: :'):!:'i ........ ' ~._:'?,: I' .] ?KFWBs cov'~rh'g'e'6f, the CBS-" ..: "·:.Viacom'merger, included':'' :' Fannie' Mae mid. its g~al..is':to.ex- .:. Fannie Mae and Preddie:Mac op-~/} ~[~'~"llI '.': :' tend a hahd to the many Ame.ricans 'erato,underagovernmentcharterto" '! · ' reports from The Times' Sallie· !who have not benefited from th~ · expand homeownership, buying Hofmeister and other current economic'expansion, includ- . mortgages from banks and other Company Town reporters..,~ ", ing residents.. ::, of economically., de- lenders and packaging., them into se-' ~1::. _ i!.L---~":' :' ?.'-~'" ': '~-w' :' '-:' :' .,.'"' ...... -;.: . i pressed urbanand rural areas~~.. , ,, ' cui-ities for sale to investors.': "':~[q:!','!, ~, , %. ~ :i. ' :: :!! ' ! , '"; ' " ' · .... '~, ." ,',~:.'.',,,': . ,',.,:,, . '., ,~ · ' i ..... ,, .I.. '., 'r "~ '" "'" ~' '"" ........ .-r "'L."., ;"~1%'11~' ' '. ' :' ' ' ' .... "'! }i" .... ' .:'!" "",".-" :' ' ' ' .,':'~",.! i': "'; " " "', ',::~'~ %1. ,.::. ' ' '" . . · ' ' .',:'!~:.,i..;' f"::f -' ." :'t?,,i:.:. :..'.." ':;~! .... -' ,"". ".": ' .' ~ '"?i?'.'.':, !i.-:.' :.:;.[., ;-i.i: ,,-t ~.;:i', "?.'," ':V': !" [ . . "' : '.. [ ' ' ' i "i -":' ? :"~'.: ' . ,/.,::i~i.,", i.~:i,i: i~' ~ "'. '-~'.' ' " ' :~'.,I//'.. : i.. . ,.. ' . . . ...., ,.' ., .... s' oa!L¥ NONSTo S'To :rae Nsw .!.!' ' ,.,, ,,. ...;. /,., ,., , , ~ ~], , . ,.', .. ,!. , - . . , . ' .,,,,: .... .[,.". ;: .. , · ") .. ,' , , . . '.,:. .. ',:i...: ~:i.. ' '" ""':'"" ': :: '. : "'":::'";" '' " ':t ' v., ' ','': ...... . ' ' :."'::.. ' '[ :.:i,( '~i . . ',,.~: . ,'i.[.' -?~ ' ': COMMUNITY DEVELOPMENT PROGRAM DEPARTMENT C.D. Program Department BILL MUNGARY Public Services Building Director 2700 M Street, Suite 250 Bakersfield, Oalifornia 93301 Telephone (805) 861-2041 FAX 325-2825 TDD 321.-0524 December 6, 1993 Mr. Marvin Dean, President A. Phillip Randolph Community Development Corporation 1313 California Avenue Bakersfield, California 93304 RE: Qualification as a CHDO Dear Mr. Dean: Thank you for the additional information which you submitted on December 3, 1993, which was in response to my October 25 letter to you and the additional conversations you have had with Bill Mungary and me. With that information you have cleared up the remaining concerns cited in my letter. In particular, with respect to the Financial Accountability Standards you supplied a certification and additional information. After review of that documentation Henry Gutierrez spoke with Mr. Sack of your CPA firm Mickey, Casanova & Sack. As a result of that conversation Mr. Sack faxed us a certification that does meet the required standard. Mr. Sack will mail the original to us. Regarding the other requirement, Demonstrated Capacity, you have supplied us with a document which describes the capacity of Comprehensive Housing Services, Inc. and a copy of a !etter from that firm which indicates that they have been retained by your. organization. It appears that firm is qualified under the HOME Program regulations with respect to demonstrating that you and your organization have the capacity to carry out a project. There appears to be no reason A. Phillip Randolph Community Development Corporation would not be qualified as a Community Housing Development Organization under the HOME Program regulations. Please call if you have questions. Mark A. Smith ~ .] Housing Programs Manager-'---'~ MAS:ayb CERTIFIED PUBLIC ACCOUNTANTS December 2, 1993 Mark A. Smith, Housing Programs Manager 2700 M Street, Suite 250 Bakersfield, California 93301 RE: Accountability standards of A-110 Dear Mr. Smith, Enclosed is a copy of the compliance report on A. Philip Randolph Community Development Corporation, for the period ended June 30, 1993, for compliance on accounting standards of Circular A-133 (A-il0). As of June 30, 1993, A. Philip Randolph Community Development Corporation conformed to all of the accountability standards of A-il0 (A-133) . Very truly'yours, MICKEY, CASANOVA & SACK SDS/ljc SILVER D. SACK, C.P.A. enclosure Partner WM E. MICKEY KENNETH J. CASANOVA · SILVER D. SACK CERTIFIED PUBLIC ACCOUNTANTS .INDEPENDENT AUDITOR'S REPORT ON COMPLIANCt,; With Specific Requirements Applicable to Nonmajor Program Transactions Board of Directors A. Philip Randolph Conm~unity Development Corporation Bakersfield, California We have audited the financial statements of A. Philip Randolph Community Development Corporation (a nonprofit organization), as of June 30, 1993 and for the year then ended, and have issued our report thereon dated September 15, 1993. In connection with our audit of the financial statements of A. Philip Randolph Con~nunity Development Corporation and with our consideration -of the Organization,s internal control structure used to administer federal pragr~ms, as required by Office of Management and Budge~t Circular A-133, "Audits of Institutions of Higher Education and Other Nonprofit Institutions,,, we selected certain transactions applicable to certain nonmajor federal programs for the year ended June 30, 1993. As required by OMB Circular A-133, we performed auditing procedures to test compliance with the requirements governing types of services allowed or not allowed, and eligibility, that are applicable to those transactions. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on A. Philip Randolph Community Development Corporation's compliance with these requirements. Accordingly, we do not express such an opinion. With respect to the items tested, the results of our procedures disclosed no material instances of noncompliance with the requirements listed in the preceding paragraph. With respect to-items not tested, nothing came to our attention that caused us to believe that A. Philip Randolph Community Development Corporation had not complied, in all material respects, with those requirements. However, the results of our procedures disclosed immaterial instances of noncompliance with those requirements, which are described in the accompanying Schedule of Findings and Recommendations. Page 15 This report is intended for the information of the management. However, this report is a matter of public record, and its distribution is not limited. MICKEY,~ ~ASANOVA & SACK' September 15, 1993 Certified Public Accountants Page 20 SOUTHEAST BAKERSFIELD COMMUNITY NEIGHBORHOOD HOUSING DEVELOPMENT GROUP April 10, 2000 To: John F. Wager Jr. Economic Development Director c/o: George Gonzales Community Development Coordinator Re: The Southeast Bakersfield Infill Housing Development Project The attached package contains a ten-tab binder providing detailed information on our project, The Southeast Bakersfield Infill Housing Development Project, to be known as Vision Homes. I would like to schedule a meeting to go over the information and answer any questions requiring clarification. We are requesting a project subsidy of $15,000 per house; for a minimum of ten, and a maximum of fifty homes. A brief summary of our proposal is as follows:., We have targeted 5 financial institutions (see tab 5) to provide construction loans for development cost and takeout mortgages to our homebuyers. The plan is for each financial institution to start with one home each; then after completion of the first home, they would roll over the payoff construction loan into the next home repeating the process to get their ten homes each. Our goal is to build a total 50 new single family 3 bedroom 2 bath, 1200 square feet home priced to sell between $55,716 and $65,716 each. The homebuyer's down payment and closing cost as Iow as $756.67 and monthly payment as Iow as $518. (See tab 2) Our $15,000 per house subsidy request from the City of Bakersfield, would be condition upon construction and take out homebuyer mortgage loan to be provided by our financial institution partners. The City subsidy could be provided in any form, provide funds, provide buildable lots, assist with building permit and or other fee waivers, assist with some on or off site development cost. In my February 14,2000 letter and our first meeting held at your office we discuss some of these options and others. This package is intended to be a follow up to our February project briefing meeting. My delay in return this package sooner was, we want to confirm our construction hard cost with license sub contractors contract bid prices. (See tab 6) We look forward to working with you on this community project. Marvin Dean, Projects Coordinator Cc: Alan Tandy, City Manager / Vice Mayor Carson, 1st Ward City Council Woman SOUTHEAST BAKERSFIELD COMMUNITY NEIGHBORHOOD HOUSING DEVELOPMENT GROUP INFILL HOUSING DEVELOPMENT PROJECT SOUTHEAST BAKERSFIELD REDEVELOPMENT PROJECT AREA February 14, 2000 To: George Gonzales, Community Development Coordinator From: Marvin Dean, Representative Re: Request for Assistance from the City of Bakersfield Assistance is hereby requested for the following developer incentives: (1) Assist with site acquisition, estimated cost between $4,500 - $7,500 per lot (2) Assist with building permit and other fee waivers or cost estimate~l"at $3,500 - $5,000 per lot. "-~. (3) Assist with on and off site project costs, estimated at $3,000 - $7,500 (Curb and gutter, sidewalks and sewer tie-ins etc.). (4) Assist with housing rehabilitation, handicap accessibility grants and other Iow interest loans for marketing to existing property owners for home improvement work in areas where we construct new homes. (5) Assist and coordinate with code enforcement when required in neighborhoods where we construct new homes. (6) Assist and coordinate with cOmmunity policing and neighborhood watch in neighborhoods where we construct new homes. (7)' Assist our homebuyers with First:Time Homebuyer down Payment Assistance Program. (8) Assist us with any other financing or resources to assist with new single family construction or rehabilitated housing in Southeast Bakersfield redevelopment project area. NOTE: We are requesting a conditional commitment for assistance from the City of Bakersfield. This will allow us to structure the final project development financing.. VISION HOMES FINANICAL INSTITUTION Partners Interested in Participating in Project: (1) Washington Mutual Bank (2) Bank of America (3) Union Bank of California (4) Bank of Stockdale (5) Norwest Finanical/Wells Fargo Bank * City of Bakersfield Homebuyers Assistance Programs NOTE: Fannie Mae is very interested to participate in the Southeast Bakersfield Community Neighborhood Housing Development Group Infill Housing Project. They would like to work with Financial Institutes and local Government.Agencies. See attached Fannie Mae Bakersfield Redevelopment initiatives partnership opportunities. * Financial institution information attached FLOOR PLAN [ ~,~ ~200 Sq. Ft. i ~'~ The $ou[heas[ Bakersfield Communi~ ~ ! ~_rzz~, ~.~,r,~; a~2~, ~ .... Neig[~b~'hood Housing Developmen[ Group VISION HOMES 2000 :" I ' i, ' ' ........... '~ "' · -~.'~ ..... ':' - .... .-. . - .~Ourts, l~ip ..... .. .... . ...,. ....... - p ,gn 2ooo · · .. 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' ~ ' .' ~'~d ., ~s ~k~' ~d ~;..: :::;:~ B~  Ruth Klein 800/591-2788 661/872-9424 THE MARKETIJVG/TLM£ $0~7RC£ Fax: 661/872-0664 Time & Marketing Coach 5330 Office Center Court Bake~'f~eld, CA 93309 953 Fourth Street, ~301 e-mall: rldelnQruthldeln.com &3nra Monlca, CA 90403 www. ruthldeln.com [~iuciion? lobbyists for real estatemortgage bankers, the National As- Casino CommiSsion said Tuesday ~'ke~s, bani sociation and it has completed tile acquisition of the economy was the technolo Y ~ren t' about Nieoski, l~rlove · 4 ,~ Nico~ teehno[~ weeke ~ake t MEDIA SCHEDULE Contract Attachment ~,l?, or I, Fall 2000 Issue June 26 - Advertorials ready, edited and approved** July 3 - Production begins July 12 - Press Conference August 18 - Tabloid to printer on disk August 22 - LA Times & Bakersfield Californian receives tabloids Sept. 10 - Sunday edition, LA Times (200,000 copies); Californian (72,000) SprinQ 2000 Issue Nov. 8 - Press Conference Nov. 27. - Advertorials ready, edited and approved** Dec. 11 Production begins Jan. 18 - Tabloid to printer on disk Feb. 20 - LA Times and Bakersfield Californian receives tabloids Mar. 11 - Sunday edition, LA Times & S.F. Chronicle (200,000 copies ea.), Bakersfield Californian (75,000 copies) ** I understand that I am responsible to follow the media schedule in order to be in the tabloid as well as receive my placement of choice. I do not hold Klein-Richardson responsible if I fail to meet the deadlines delineated above. (Initials) Signed Date Premier Sponsor -Del., Alfonse D'Amato, R-N.Y., market strategist at Pit}er Jaffrav some ~eir profih~ to work in ~d Max Baucus, D-Mont. ~ in- lac. Investors tradi~ionaBv move o l~fensive imsues. The Dow Jones three members of uduced a resolution calling for th~ eeonomy was the teehnolo~tv £rans~rta~ion. Average gain~ ecommittee ~ Seas. William Ro REAL COSTS BAKERSFIELD IMAGE 2000 INDIVIDUAL COSTS uX" mark is inclusive Market Value cost as quoted by media sources Los Angeles Times Fall Tabloid 2000, 8 page, 4 colorX Spring Tabloid 2001 X One page ad, 4 color Fall Sunday edition $51,100 Spring Sunday edition $51,100 San Francisco Chronicle Spring Tabloid 2001 X One page ad, 4 color $50,000 Bakersfield Californian Fall Tabloid 2000, 8 page, 4 color X Spring Tabloid 2001 X One page ad, 4 color Fall Sunday edition $17,689 Spring Sunday edition $17,689 Cox Cable Paid air time in Bakersfield, SantaX $55,000 Barbara, Orange County, Las Vegas, Phoenix, northern Calif. Press Releases Fall 2000 X $7,000' Spring 2001 X $7,500 Photography X $2,500 Website X $3,000 Total Cost: Co-op Sponsorship $262,578 $25,000, $15,000, $8,000 "Real"Bakersfield Sponsorship Package and Mission: Our mission is to establish a free enterprise co-operative, to create a "positive image" of the Greater Bakersfield Area in the minds of potential visitors and businesses to our area. The purpose of this venture is to promote continued growth and economic stability, and develop a sense of community pride within our own population. Results for the Sponsors As the population and visitors increase so does the potential income of the sponsor. New jobs are created and filled as new businesses move here. As teachers and other professionals are encouraged to move here, more new homes are purchased, more consumer products are purchased, and leisure activities are enjoyed. As the Greater Bakersfield Area becomes accepted as a destination, more tourists will enjoy the facilities, restaurants, and more resorts/hotels will be booked for conventions and conferences. Improving the image of Bakersfield is good for everyone's business or organization. Objectives: Co-operative Ad Campaigns in surrounding areas (ie.) LA, SF, and Bakersfield the sponsors name and logo will be on various different components of the campaign, identifying your business with the "good things" in life. Some of the vehicles for developing that positive image of the Greater Bakersfield area are: · Two, 8-12 page, four color Tabloid type publications · An Internet Site · Direct Mail - when needed · Billboards ( Phase 2, or as sponsorship becomes available) · TV Spots ( Minimum of two per year) · Radio Spots ( Minimum of two per year) · Trade Shows Video/Cd ( As sponsorship becomes available) · Press Release Blitz · Press Conferences or Receptions · Story Development for News Media · Testimonials from those who have been here · Target TV Hosts and celebrities for positive comments. There are many different ways that you may participate. Premier sponsors, Gold sponsors, Silver sponsors and event/image sponsor. Please see the following pages to see which sponsorship package suits your business interests. Thank you for considering building a positive image of Bakersfield. 5330 Office Center Court, Bakersfield, CA 93309 · 661-872-9424 · fax: 661-872-0664 ° email: rklein{~iruthklein.com Sponsorship Levels Co-Op Sponsors for"Real" Bakersfield Image Project will receive.the following benefits: Premiere Sponsor PHASE ONE · We will create two - four color "Keeper' quality tabloids, minimum 8 pages each. · ~ of a page of advertorial in the tabloid - to be provided by the Premier sponsor. · Fall 2000 Tabloid (300,000 editions) to be distributed in the Los. Angeles Times, The'Bakersfield Californian and in local spots around town. September 2000 Sunday Edition. · Summer 2001 Tabloid (500,000) to be distributed in the Los.Angeles Times, San Francisco Chronicle and The Bakersfield Californian, To be distributed by the end of March 2001. · 500 additional Tabs for the Premier sponsors usage · Placement choice determined by paid commitment- first come first served · Website and Links · Three Press Releases per year for Premiere sponsors regarding an important upcoming event or other announcement. ~ · At least one press conference/reception per year · Radio and TV bookings, when appropriate -locally and regionally. (Two per sponsor) · Radio and TV PSA's (At least two per year highlighting our sponsors whenever possible.) Fee Schedule for all of the above is $25,000 Gold Sponsor PHASE:ONE · We will create two - four color "Keeper' quality tabloids, minimum 8 pages each. · '/= of a page of advertorial in the tabloid - to be provided by the Gold sponsor. · Fall 2000 tabloid (300,000 editions) to be distributed in The Los Angeles Times, The Bakersfield Californian and in local spots around town. Gold Sponsorship continued... ~ · Spring 2001 Tabloid (500,000) to be distributed in the Los Angeles Times, San Francisco Chronicle and The Bakersfield Californian. To be distributed by the end of March 2001. · 75 additional Tabs for the Gold sponsors usage · Placement choice determined by paid commitment- first come first served · Website and Links · Radio and TV bookings, when appropriate -locally and regionally. (One Per Sponsor) · One Press Release per year for Sponsor regarding an important event or other announcement. · At least one press conference/reception per year · Radio and TV PSA's (At least two per year highlighting our sponsors whenever possible.) Fee schedule for all of the above is $15,000 Silver Sponsor PHASE ONE · We will create two - four color "Keeper" quality tabloids, minimum 8 pages each. · ~ of a page of advertorial in the tabloid - to be provided by the Silver Sponsor. · Fall 2000 Tabloid (300,000 editions) to be distributed in The Los Angeles Times, The Bakersfield Californian and in local spots around town. September 2000 Sunday Edition · Spring 2001 Tabloid (500,000) to be distributed in The Los Angeles Times, San Francisco Chronicle and The Bakersfield Californian. To be distributed by the end of March 2001 · 25 additional Tabs for the Silver sponsors usage · Placement choice determined by paid commitment- first come first served · Website and Links · One Press Release per year for Silver Sponsors regarding an important upcoming event or other announcement. · At least one press conference/reception per year · Radio and TV PSA's (At least two per year highlighting our sponsors whenever possible.) Fee Schedule for a I of the above is $8,000 Bronze Sponsor/Special Sponsorship for Events, or Topics of Interest PHASE ONE · We will create two - four color "Keeper' quality tabloids, minimum 8 pages each. · 1/8 of of page of information in the tabloid - to be provided by the editors or sponsor on a topic important to promoting the positive image of Bakersfield, Will be: Brought to you by Sponsors Name · Summer 2000 Tabloid (300,000 editions) to be distributed in The Los Angeles .~ Times, The Bakersfield Californian and in local spots around town. The end of September 2000 Sunday edition · Winter 2001 Tabloid (500,000) to be distributed in The Los Angeles Times, San Francisco Chronicle and The Bakersfield Californian. To be distributed by the . end of Uamh 2001 · 10 additional Tabs for the sponsors usage · Placement and topic choice determined by paid commitment- first come first serve · Websit and Links · At least one press conference/reception per year · Radio and TV PSA's (At least two per year highlighting our sPonsors whenever possible.) Fee schedule for all of the above is $5,000 Payment schedules can be arranged for Premiere and Gold sponsors