HomeMy WebLinkAboutContracts & Agreements_145-2012_CCv0001.pdf AGREEMENT TO PERFORM "AB 1484" DUE DILIGENCE REVIEW SERVICES
This agreement for the provision of "AB 1484" Due Diligence Review services
("Agreement')is made and entered into this 41'day of September,2012("Effective Date"),by and
between the Successor Agency to the former Redevelopment Agency of the City of Redlands
("Successor Agency") and Lance, Solt & Lunghard, LLP Certified Public Accountants
("Consultant"). Successor Agency and Consultant are sometimes individually referred to herein as a
"Party" and, together, as the"Parties." In consideration of the mutual promises contained herein,
Successor Agency and Consultant agree as follows:
ARTICLE I - ENGAGEMENT OF CONSULTANT
1.1 Successor Agency hereby engages Consultant to perform"A13 1984"Due Diligence Review
services for the(the "Services").
1.2 The Services shall be performed by Consultant in a professional manner, and Consultant
represents that it has the skill and the professional expertise necessary to provide the Services
to Successor Agency at a level of competency presently maintained by other practicing
professional consultants in the industry providing like and similar types of Services.
ARTICLE 2 - SERVICES OF CONSULTANT
2.1 The Services that Consultant shall perform are more particularly described in Exhibit
"A," entitled"Scope of Services,"which is attached hereto and incorporated herein by
reference.
2.2 Consultant shall comply with applicable federal, state and local laws and regulations in
the performance of this Agreement including,but not limited to, the Americans with
Disabilities Act, the Fair Employment and Housing Act and prevailing wage laws.
ARTICLE 3 - RESPONSIBILITIES OF SUCCESSOR AGENCY
3.1 Successor Agency shall make available to Consultant information in its possession that
may assist Consultant in performing the Services.
3.2 Successor Agency designates Tina Kundig, the City of Redlands' Finance Director, as
Successor Agency's representative with respect to performance of the Services, and such
person shall have the authority to transmit instructions, receive information,interpret and
define Successor Agency's policies and decisions with respect to performance of the
Services.
ARTICLE 4 - PERFORMANCE OF SERVICES
4.1 During the term of this Agreement, Successor Agency may request that Consultant
perform Extra Services. As used herein, "Extra Services"means any work that is
I
L\ca\djm\Agre=ents\LSL Agreement.8.29.12.doc
determined necessary by Successor Agency for the proper completion of the Services, but
which the Parties did not reasonably anticipate would be necessary at the time of
execution of this Agreement. Provided the Extra Services do not exceed twenty percent
(20%)of the compensation to be paid by Successor Agency to Consultant for the
Services, such Extra Services may be agreed to by the Parties by written amendment to
this Agreement, executed by a duly authorized Successor Agency official in accordance
with Chapter 2.16 of the Redlands Municipal Code. Consultant shall not perform, nor be
compensated for, Extra Services without such written authorization from Successor
Agency.
ARTICLE 5 - PAYMENTS TO CONSULTANT
5.1 The total compensation for Consultant's performance of the Services shall not exceed the
amount of Twenty Thousand Dollars ($20,000). Consultant shall be compensated for the
Services at the rates and in the fixed amounts set forth in Exhibit "B," which is attached
hereto and incorporated herein by reference.
5.2 Consultant shall submit monthly invoices to Successor Agency describing the Services
performed during the preceding month.
5.3 All notices shall be given in writing by personal delivery or by mail. Notices sent by mail
should be addressed as follows:
Successor Agency Consultant
Tina T. Kundig Rich Kikuchi, Partner
Finance Director/City Treasurer Lance, Soll and Lunghard, LLP
City of Redlands 203 North Brea Boulevard
P.O. Box 3005 Suite 203
Redlands, CA 92373 Brea, CA 92821
When so addressed, such notices shall be deemed given upon deposit in the United States
Mail. Changes may be made in the names and addresses of the person to whom notices and
payments are to be given by giving notice pursuant to this section 5.3.
ARTICLE 6 - INSURANCE AND INDEMNIFICATION
6.1 Insurance required by this Agreement shall be maintained by Consultant for the duration
of its performance of the Services. Consultant shall not perform any Services unless and
until required insurance listed below is obtained by Consultant. Consultant shall provide
Successor Agency with certificates of insurance and endorsements evidencing such
insurance prior to commencement of the Services. Insurance policies shall include a
provision prohibiting cancellation or modification of the policy except upon thirty(30)
days' prior written notice to Successor Agency; provided, however,the policies shall
allow for ten(10) days notice for cancellation to Successor Agency due to non-payment
of premium.
2
1:\ca\djm\Agreements\LSL Agreement.8.29.12.doc
6.2 Consultant shall secure and maintain Workers' Compensation and Employer's Liability
insurance throughout the duration of its performance of the Services in accordance with
the laws of the State of California, with an insurance carrier acceptable to Successor
Agency as described in Exhibit "C," entitled"Workers' Compensation Insurance
Certification,"which is attached hereto and incorporated herein by this reference.
6.3 Consultant shall secure and maintain in force throughout the Tenn of this Agreement
comprehensive general liability insurance with carriers acceptable to Successor Agency.
Minimum coverage of One Million Dollars ($1,000,000)per occurrence and Two Million
Dollars($2,000,000) aggregate for public liability, property damage and personal injury is
required. Successor Agency shall be named as an additional insured and the insurance
policy shall include a provision prohibiting modification of coverage limits or
cancellation of the policy except upon thirty(30)days prior written notice to Successor
Agency. Such insurance shall be primary and non-contributing to any insurance or self-
insurance maintained by Successor Agency.
6.4 Consultant shall have business auto liability coverage,with minimum limits of One
Million Dollars ($1,000,000)per occurrence, combined single limit for bodily injury
liability and property damage liability. This coverage shall include all Consultant owned
vehicles used in connection with Consultant's provision of the Services,hired and non-
owned vehicles, and employee non-ownership vehicles. Successor Agency shall be
named as an additional insured and such insurance shall be primary and non-contributing
to any insurance or self insurance maintained by Successor Agency.
6.5 Consultant shall defend, indemnify and hold harmless Successor Agency and its elected
officials, employees and agents from and against any and all claims,losses or liability,
including attorneys' fees, arising from injury or death to persons or damage to property
occasioned by any negligent act, omission or failure to act by Consultant, its officers,
employees and agents in performing the Services.
ARTICLE 7 - CONFLICTS OF INTEREST
7.1 Consultant covenants and represents that it does not have any investment or interest in
any real property that may be the subject of this Agreement or any other source of
income, interest in real property or investment that would be affected in any manner or
degree by the performance of Consultant's Services. Consultant further covenants and
represents that in the performance of its duties hereunder, no person having any such
interest shall perform any Services under this Agreement.
7.2 Consultant agrees it is not a designated employee within the meaning of the Political
Reform Act because Consultant:
A. Does not make or participate in:
3
I:\ca\djm\Agre,ements\LSL Agreement.8.29.12.doe
(i)the making or any Successor Agency governmental decisions regarding
approval of a rate, rule or regulation, or the adoption or enforcement of laws;
(ii)the issuance, denial, suspension or revocation of Successor Agency permits,
licenses, applications, certifications, approvals, orders or similar authorizations or
entitlements;
(iii) authorizing Successor Agency to enter into, modify or renew a contract;
(iv) granting Successor Agency approval to a contract that requires Successor
Agency approval and to which Successor Agency is a party, or to the specifications for
such a contract;
(v)granting Successor Agency approval to a plan, design,report, study or similar
item;
(vi) adopting, or granting Successor Agency approval of, policies, standards or
guidelines for Successor Agency or for any subdivision thereof
B. Does not serve in a staff capacity with Successor Agency and in that capacity,
participate in making a governmental decision or otherwise perform the same or
substantially the same duties for Successor Agency that would otherwise be performed by
an individual holding a position specified in Successor Agency's Conflict of Interest
Code under Government Code section 87302.
7.3 In the event Successor Agency determines that Consultant must disclose its financial
interests by completing and filing a Fair Political Practices Commission Form 700,
Statement of Economic Interests. Consultant shall file the subject Form 700 with the
Successor Agency Clerk's office pursuant to the written instructions provided by the
Office of the City Clerk.
ARTICLE 8 - GENERAL CONSIDERATIONS
8.1 In the event any action is commenced to enforce or interpret any of the terms or
conditions of this Agreement the prevailing Party shall, in addition to any costs and other
relief,be entitled to the recovery of its reasonable attorneys' fees, including fees for the
use of in-house counsel by a Party.
8.2 Consultant shall not assign any of the Services, except with the prior written approval of
Successor Agency and in strict compliance with the terms, and conditions of this
Agreement.
8.3 Consultant is for all purposes under this Agreement an independent contractor and shall
perform the Services as an independent contractor. Neither Successor Agency nor of its
agents shall have control over the conduct of Consultant or Consultant's employees,
4
L\Ca',djm\AgreementsTSL Agreement.8.29.12.doe
except as herein set forth. Consultant shall supply necessary tools and instrumentalities
required:to perform the Services. Assigned personnel employed by Consultant are for its
account only,and in no event shall Consultant or personnel retained by it be deemed to
have been employed by Successor Agency or engaged by Successor Agency for the
account of,or on behalf of Successor Agency. Consultant shall have no authority, express
or implied,to act on behalf of Successor Agency in any capacity whatsoever as an agent,
nor shall Consultant have any authority, express or implied, to bind Successor Agency to
any obligation.
8.4 This Agreement may be terminated by Successor Agency,in its sole discretion, by
providing ten(10)days prior written notice to Consultant(delivered by certified mail,
return receipt requested)of Successor Agency's intent to terminate. if this Agreement is
terminated by Successor Agency, an adjustment to Consultant's compensation shall be
made,but(1)no amount shall be allowed for anticipated profit or unperformed Services,
and(2)any payment due Consultant at the time of termination may be adjusted to the
extent of any additional costs to Successor Agency occasioned by any default by
Consultant. Upon receipt of a termination notice, Consultant shall immediately:
discontinue its provision of the Services and,within five(5)days of the date of the
termination notice,deliver or otherwise make available to Successor Agency, copies (in
both hard copy and electronic form,where applicable)reports, and such other information
and materials as may have been accumulated by Consultant in performing the Services.
Consultant shall be compensated on a pro-rata basis for Services completed up to the date
of termination:
8.5 Consultant shall maintain books, ledgers, invoices,accounts and other records and
documents evidencing costs and expenses related to the Services for a period of three(3)
years,or for any longer period required by law, from the date of final payment to
Consultant pursuant to this Agreement. Such books shall be available at reasonable times
for examination by Successor Agency at the office of Consultant.
8.6 This Agreement, including the Exhibits incorporated herein by reference,represents the
entire agreement and understanding between the Parties as to the matters contained
herein,and any prior negotiations,written proposals or verbal agreements relating to such
matters are superseded by this Agreement.Except as otherwise provided for herein, an
amendment to this Agreement shall be in writing,approved by Successor Agency and
signed by Successor Agency and Consultant.
8.7 This Agreement shall be governed by and construed in accordance with the laws of the
State of California.
8.8 if one or more of the sentences, clauses,paragraphs or sections contained in this
Agreement is declared invalid, void or unenforceable by a court of competent jurisdiction,
the same shall be deemed severable from the remainder of this Agreement and shall not
affect,impair or invalidate the remaining sentences, clauses, 'paragraphs or sections
contained herein,unless to do so would deprive a Party of a material benefit of its bargain
5
1.\ca\djm\Agreements\LSL Agreement.8.24.12.doc
under this Agreement,
I [NESS WHEREOF,duty authorized representatives of the Successor Agency and
Consultant have seed in confirtnation of this Agreement
SUCCESSOR AGENCY: LANCE, SOLL&LUNGHARD,LLC:
ALf
By: ,
Pete Ammar,Chairman chi,Partner
Attest:
Sin hvin,.S
6
1Acalj ents\M A ment.11.29.12.doc
EXHIBIT "A"
SCOPE OF SERVICES
1:\ca\djm\Agreetnents\LSL Agreement.8.29.12.doc
� r
A # a # S 3
� � � .
• .s t e s s s r - : s t t t • - i � • • -
1 ! 4 t i 1 t ! i � ' � t -
e
- s " _t - s ' s- • - • t -s • -ts • -s e e
• •- - - sa a_ -e s- _ - ..e - a - a • - s • • s-s •
- • • s • s • • s- s s -• -• r • s- -r s s t
- s - s - - • - • s :+s- s
i - i •- e • s s:- • • s • s- a -s s - # - s `.s_ e -
e s s s s - - s • - # s - 16-s. s - s • sac i
- # - a :s- s # ss- i • - .ss • - - s • - i-a_ s - s
s • - m s -
�-•.. t s - •- - • • • s-s s _ # - s :s. s t- a m - -s •
s - e- ° ! t� s s t •- a -s- • # - s .s. s s s s
a s" • - • : W a- i 's i # f ii- 0 i - M '' a'
� # � � ° #
•s- • t • • • - • • # - • - l-s- s - s
i-a.. a ;t • s • s • - •- - s s s s s -• -
-• - s • • - - e s - -
�'s- - • - - • - •- - • e s •-s s - # s .•a a e- s s - 's •
4 i ! •
.ss ♦s -
+ .ii. • !i • .! '4 '0
1, � •
•- • t s s^ � � # s- - • • -s s - • -• + • s : s s - #
Redevelopment- Meet and Confer Page 2 of 2
Department of Finance.Additionally, the FAQ below provides answers to frequently asked questions regarding due
diligence reviews.
Procedures for Due Diligence Review(,pdf, <1 MB)
Reconciliation Worksheet(Due Diligence Review)(.xis, <1 MB)
Example Summary Schedule (Due Diligence Review)(,xis, <1 MB)
Due Diligence Review FAQs(.Pdf, <1 MB)
Webpage last updated August 27, 2012
Conditions of Use I Privacy Policy
Copyright Q 2011 State of California
V. 8-27-12
List of Procedures for Due Diligence Review
General information regarding these procedures:
I. The procedures associated with Sections 34179.5(c)(1) through 34179.5(c)(3) and
Sections 34179.5(c)(5) through 34179.5(c)(6) are to be applied separately to (a) the Low
and Moderate Income Housing Fund of the Successor Agency and to (b) all other funds
of the Successor Agency combined (excluding the Low and Moderate Income Housing
Fund).
2. The due date for the report associated with the Low and Moderate Income Housing Fund
is October 1,2012.
3. The due date for the report associated with all other funds of the Successor Agency
combined (excluding the Low and Moderate Income Housing Fund) is December 15,
2012.
4. Because the procedures required by Section 34179.5(c)(4) pertain to the Successor
Agency as a whole, these procedures should be addressed in the report that is due on
December 15, 2012.
Fiscal year references below refer to fiscal years ending on June 30. This language should be
I —
modified for those agencies that have a different fiscal year-end.
For purposes of the procedures below and the related exhibits, the amount of the assets presented
should be based upon generally accepted accounting principles (GAAP), unless otherwise noted.
To the extent the procedures listed below are duplicative to the agreed upon procedures that were
performed pursuant to HSC 34182 (a)(1), it is acceptable to obtain and use information from the
HSC 34182 (a)(1) procedures for purposes of this due diligence review without having to re-
perform the procedures. When this is done, the due diligence report should refer to the report that
was issued for the agreed upon procedures performed under HSC 34182 (a)(1).
Certain assets may qualify as a deduction under more than one category of deduction. In such
cases, care should be taken to ensure that such assets have been included as a deduction in the
summary schedule only once.
Citation:
34179.5(c)(1) The dollar value of assets trap,(erred from the former redevelopment agency
to the successor agency on or about February 1, 2012.
Suggested Procedure(s):
1, Obtain from the Successor Agency a listing of all assets that were transferred from the
former redevelopment agency to the Successor Agency on February 1, 2012. Agree the
amounts on this listing to account balances established in the accounting records of the
Successor Agency. Identify in the Agreed-Upon Procedures (AUP) report the amount of
the assets transferred to the Successor Agency as of that date.
1
V. 8-27-12
Citation:
34179.5(c)(2) The dollar value of assets and cash and cash equivalents transferred after
,January 1, 2011, through June 30, 2012, by the redevelopment agency or the successor
agency to the city, county, or city and county that formed the redevelopment agency and the
purpose of each transfer, The review shall provide documentation of any enforceable
obligation that required the transfer.
Suggested Procedure(s):
2. If the State Controller's Office has completed its review of transfers required under both
Sections 34167.5 and 34178.8 and issued its report regarding such review, attach a copy
of that report as an exhibit to the AUP report. If this has not yet occurred, perform the
following procedures:
A. Obtain a listing prepared by the Successor Agency of transfers (excluding payments
for goods and services) from the former redevelopment agency to the city, county, or
city and county that formed the redevelopment agency for the period from January 1,
2011 through January 31, 2012. For each transfer, the Successor Agency should
describe the purpose of the transfer and describe in what sense the transfer was
required by one of the Agency's enforceable obligations or other legal requirements.
Provide this listing as an attachment to the AUP report.
B. Obtain a listing prepared by the Successor Agency of transfers (excluding payments
for goods and services) from the Successor Agency to the city, county, or city and
county that formed the redevelopment agency for the period from February 1, 2012
through June 30, 2012. For each transfer, the Successor Agency should describe the
purpose of the transfer and describe in what sense the transfer was required by one of
the Agency's enforceable obligations or other legal requirements. Provide this listing
as an attachment to the AUP report.
C. For each transfer, obtain the legal document that formed the basis for the enforceable
obligation that required any transfer. Note in the AUP report the absence of any such
legal document or the absence of language in the document that required the transfer.
Citation:
34179,5(c)(3) The dollar value oj'any cash or cash equivalents transferred after.lanuary 1,
2011, through June 30, 2012, by the redevelopment agency or the successor agency to any
other public agency or private party and the purpose of each transfer. The review shall
provide documentation of any enforceable obligation that required the transfer.
Suggested Procedure(s):
3. If the State Controller's Office has completed its review of transfers required under both
Sections 34167.5 and 34178.8 and issued its report regarding such review, attach a copy
of that report as an exhibit to the AUP report. If this has not yet occurred, perform the
following procedures:
2
V. 8-27-12
A. Obtain a listing prepared by the Successor Agency of transfers (excluding payments
for goods and services) [from the former redevelopment agency to any other public
agency or to private parties for the period from January 1, 2011 through January 31,
2012. For each transfer, the Successor Agency should describe the purpose of the
transfer and describe in what sense the transfer was required by one of the Agency's
enforceable obligations or other legal requirements. Provide this listing as an
attachment to the AUP report.
B. Obtain a listing prepared by the Successor Agency of transfers (excluding payments
for goods and services) [from the Successor Agency to any other public agency or
private parties for the period from February 1, 2012 through June 30, 2012. For each
transfer, the Successor Agency should describe the purpose of the transfer and
describe in what sense the transfer was required by one of the Agency's enforceable
obligations or other legal requirements. Provide this listing as an attachment to the
AUP report.
C. For each transfer, obtain the legal document that formed the basis for the enforceable
obligation that required any transfer. Note in the AUP report the absence of any such
legal document or the absence of language in the document that required the transfer.
Citation:
34179.5(c)(4) The review shall provide expenditure and revenue accounting information and
identify transfers and funding sources for the 2010-11 and 2011-12 fiscal years that
reconciles balances, assets, and liabilities of the successor agency on June 30, 2012 to those
reported to the Controller for the 2009-10 fiscal year.
Suggested Procedure(s):
4. Perform the following procedures:
A. Obtain from the Successor Agency a summary of the financial transactions of the
Redevelopment Agency and the Successor Agency in the format set forth in the
attached schedule for the fiscal periods indicated in the schedule. For purposes of this
summary, the financial transactions should be presented using the modified accrual
basis of accounting. End of year balances for capital assets (in total) and long-term
liabilities (in total) should be presented at the bottom of this summary schedule for
information purposes.
B. Ascertain that for each period presented, the total of revenues, expenditures, and
transfers accounts fully for the changes in equity from the previous fiscal period.
C. Compare amounts in the schedule relevant to the fiscal year ended June 30, 2010 to
the state controller's report filed for the Redevelopment Agency for that period.
D. Compare amounts in the schedule for the other fiscal periods presented to account
balances in the accounting records or other supporting schedules. Describe in the
report the type of support provided for each fiscal period.
3
V. 8-27-12
Citation:
34179.5(c)(5)A separate accounting for the balance for the Low and lvfoderale Income
Housing Fund for all other funds and accounts combined shall be made as, ollows:
(A)A statement of the total value of each fund as of,lune 30, 2012.
Suggested Procedure(s):
5. Obtain from the Successor Agency a listing of all assets of the Low and Moderate
Income Housing Fund as of June 30, 2012 for the report that is due October 1,2012 and a
listing of all assets of all other funds of the Successor Agency as of June 30, 2012
(excluding the previously reported assets of the Low and Moderate Income Housing
Fund)for the report that is due December 15, 2012. When this procedure is applied to the
Low and Moderate Income Housing Fund, the schedule attached as an exhibit will
include only those assets of the Low and Moderate Income Housing Fund that were held
by the Successor Agency as of June 30, 2012 and will exclude all assets held by the entity
that assumed the housing function previously performed by the former redevelopment
agency.Agree the assets so listed to recorded balances reflected in the accounting records
of the Successor Agency. The listings should be attached as an exhibit to the appropriate
AUP report.
Citation:
34179.5(c)(5)(B)An itemized statement listing any amounts that are legally restricted as to
purpose and cannot be provided to taxing entities. This could include the proceeds of any
bonds, grant funds, or funds provided by other governmental entities that place conditions on
their use.
Suggested Procedure(s):
6. Obtain from the Successor Agency a listing of asset balances held on June 30, 2012 that
are restricted for the following purposes:
A. Unspent bond proceeds:
i. Obtain the Successor Agency's computation of the restricted balances (e.g., total
proceeds less eligible project expenditures, amounts set aside for debt service
payments, etc.)
ii. Trace individual components of this computation to related account balances in
the accounting records, or to other supporting documentation (specify in the AUP
report a description of such documentation).
iii. Obtain from the Successor Agency a copy of the legal document that sets forth the
restriction pertaining to these balances. Note in the AUP report the absence of
language restricting the use of the balances that were identified by the Successor
Agency as restricted.
4
V.8- 7-12
B. Grant proceeds and program income that are restricted by third parties:
i. Obtain the Successor Agency's computation of the restricted balances(e.g., total
proceeds less eligible project expenditures).
ii. Trace individual components of this computation to related account balances in
the accounting records, or to other supporting'documentation(specify it the AU
report a description of such documentation).
iii. Obtain from the Successor Agency a copy of the grant agreement that sets forth
the restriction pertaining to these balances. Note in the AUP report the absence of
language restricting the use of the balances that were identified by the Successor
Agency as restricted,
C. Other assets consideredto be legally restricted:
i. Obtain the Successor Agency's computation of the restricted balances (e.g., total
proceeds less eligible project expenditures).
ii. Trace individual components of this computation to related account balances in
the accounting records, or to other supporting documentation (specify in the AUP
report a description of such documentation).
iii. Obtain from the Successor Agency a copy of the legal document that sets forth the
restriction pertaining to these balances. Note in the AUP report the absence of
language restricting the use of the balances that were identified by Successor the
Agency as restricted.
D. Attach the above mentioned Successor Agency prepared schedule(s) as an exhibit to
the AUP report. For each restriction identified on these schedules, indicate in the
report the period of time for which the restrictions are in effect. If the restrictions are
in effect until the related assets are expended for their intended purpose, this should
be indicated in the report.
Citation.
34179.5(c)(5)(C)An itemized statement of`the values of any assets that are not cash or cash
equivalents. This may includc,physical assets; land, records, and equipment For the purpose
a j. this accounting, physical assets may be valued at purchase dist or at any recently
estimated market value. The,statement.shall list separately housing-related assets.
Suggested Procedure(s):
7. Perform the following procedures:
A. Obtain from the Successor Agency a listing of assets as of June 30, 2012 that are not
liquid or otherwise available for distribution (such as capital assets, land held for
resale, king-term receivables, etc.) and ascertain if the values are listed at either
purchase cast (based on boob value reflected in the accounting records of the
Successor Agency)or market value as recently estimated by the Successor Agency.
B. if the assets listed at 7(A) are listed at purchase cast, trace the amounts to
previously audited financial statement (or to the accounting records of the Successor
Agency)and nate any differences,
5
V. 8-27-12
C. For any differences noted in 7(B), inspect evidence of disposal of the asset and
ascertain that the proceeds were deposited into the Successor Agency trust fund. If the
differences are due to additions (this generally is not expected to occur), inspect the
supporting documentation and note the circumstances.
D. If the assets listed at 7(A) are listed at recently estimated market value, inspect the
evidence (if any) supporting the value and note the methodology used. If no evidence
is available to support the value and\or methodology, note the lack of evidence.
Citation:
34179.5(c)(5)(D)An itemized listing(?f any current balances that are legally or contractually
dedicated or restricted for the funding of an enforceable obligation that identifies the nature
of the dedication or restriction and the specf1c enforceable obligation. In addition, the
successor agency shall provide a listing of all approved enforceable obligations that includes
a projection of annual spending requirements to satisfy each obligation and a projection of
annual revenues available to fund those requirements. IJ'a review finds that future revenues
together with dedicated or restricted balances are insuJf1cient to fund future obligations and
thus retention of current balances is required, it shall identify the amount of current balances
necessary for retention. The review shall also detail the projected property tax revenues and
other general purpose revenues to be received by the successor agency, together with both
the amount and timing oj*the bond debt set-vice payments of the successor agency,for the
period in which the oversight board anticipates the successor agency will have insufficient
property tax revenue to pay the specified obligations.
Suggested Procedure(s):
8. Perform the following procedures:
A. If the Successor Agency believes that asset balances need to be retained to satisfy
enforceable obligations, obtain from the Successor Agency an itemized schedule of
asset balances (resources) as of June 30, 2012 that are dedicated or restricted for the
funding of enforceable obligations and perform the following procedures. The
schedule should identify the amount dedicated or restricted, the nature of the
dedication or restriction, the specific enforceable obligation to which the dedication
or restriction relates, and the language in the legal document that is associated with
the enforceable obligation that specifies the dedication of existing asset balances
toward payment of that obligation.
i. Compare all information on the schedule to the legal documents that form the
basis for the dedication or restriction of the resource balance in question.
ii. Compare all current balances to the amounts reported in the accounting records of
the Successor Agency or to an alternative computation.
iii. Compare the specified enforceable obligations to those that were included in the
final Recognized Obligation Payment Schedule approved by the California
Department of Finance.
iv. Attach as an exhibit to the report the listing obtained from the Successor Agency.
Identify in the report any listed balances for which the Successor Agency was
6
V. 8-27-12
unable to provide appropriate restricting language in the legal document
associated with the enforceable obligation.
B. If the Successor Agency believes that future revenues together with balances
dedicated or restricted to an enforceable obligation are insufficient to fund future
obligation payments and thus retention of current balances is required, obtain from
the Successor Agency a schedule of approved enforceable obligations that includes a
projection of the annual spending requirements to satisfy each obligation and a
projection of the annual revenues available to fund those requirements and perform
the following procedures:
i. Compare the enforceable obligations to those that were approved by the
California Department of Finance. Procedures to accomplish this may include
reviewing the letter from the California Department of Finance approving the
Recognized Enforceable Obligation Payment Schedules for the six month period
from January 1, 2012 through June 30, 2012 and for the six month period July 1,
2012 through December 31, 2012.
ii. Compare the forecasted annual spending requirements to the legal document
supporting each enforceable obligation.
a. Obtain from the Successor Agency its assumptions relating to the forecasted
annual spending requirements and disclose in the report major assumptions
associated with the projections.
iii. For the forecasted annual revenues:
a. Obtain from the Successor Agency its assumptions for the forecasted annual
revenues and disclose in the report major assumptions associated with the
projections.
C. If the Successor Agency believes that projected property tax revenues and other
general purpose revenues to be received by the Successor Agency are insufficient to
pay bond debt service payments (considering both the timing and amount of the
related cash flows), obtain from the Successor Agency a schedule demonstrating this
insufficiency and apply the following procedures to the information reflected in that
schedule.
i. Compare the timing and amounts of bond debt service payments to the related
bond debt service schedules in the bond agreement.
ii. Obtain the assumptions for the forecasted property tax revenues and disclose
major assumptions associated with the projections.
iii. Obtain the assumptions for the forecasted other general purpose revenues and
D
disclose major assumptions associated with the projections.
D. If procedures A, B, or C were performed, calculate the amount of current unrestricted
balances necessary for retention in order to meet the enforceable obligations by
performing the following procedures.
i. Combine the amount of identified current dedicated or restricted balances and the
amount of forecasted annual revenues to arrive at the amount of total resources
available to fund enforceable obligations.
7
V. 8-27.12
ii. Reduce the amount of total resources available by the amount forecasted for the
annual spending requirements. A negative result indicates the amount of current
unrestricted balances that needs to be retained.
iii. Include the calculation in the AUP report.
Citation:
34179.5(c)(5)(E)An itemized list and analysis of any amounts of current balances that are
needed to satisfy obligations that will be placed on the Recognized Obligation Payment
Schedules for the current fiscal year.
Suggested Procedure(s):
9. If the Successor Agency believes that cash balances as of June 30, 2012 need to be
retained to satisfy obligations on the Recognized Obligation Payment Schedule (BOPS)
for the period of July 1, 2012 through June 30, 2013, obtain a copy of the final ROPS for
the period of July 1, 2012 through December 31, 2012 and a copy of the final ROPS for
the period January 1, 2013 through June 30, 2013. For each obligation listed on the
ROPS, the Successor Agency should add columns identifying (1) any dollar amounts of
existing cash that are needed to satisfy that obligation and (2) the Successor Agency's
explanation as to why the Successor Agency believes that such balances are needed to
satisfy the obligation. Include this schedule as an attachment to the AUP report.
Citation:
34179.5(c)(6) The review shall total the net balances available after deducting the total
amounts described in subparagraphs (B) to (E), inclusive, of paragraph (5). The review shall
add any amounts that were transferred`as identified in paragraphs (2) and(3) of subdivision
(c) if an enforceable obligation to make that transfer did not exist. The resulting sum shall be
available for allocation to affected'taxing entities pursuant to Section 34179.6. It shall be a
rebuttable presumption that cash and cash equivalent balances available to the successor
agency are available and sufficient to disburse the amount determined in this paragraph to
taxing entities. If the review finds that there are insufficient cash balances to transfer or that
cash or cash equivalents are specifically obligated to the purposes described in
subparagraphs (B), (D), and (E) of paragraph (5) in such amounts that there is insufficient
cash to provide the full amount determinedpursuant to this paragraph, that amount shall be
demonstrated in an additional itemized.schedule.
Suggested Procedure(s):
10. Include (or present) a schedule detailing the computation of the Balance Available for
Allocation to Affected Taxing Entities. Amounts included in the calculation should agree
to the results of the procedures performed in each section above. The schedule should
also include a deduction to recognize amounts already paid to the County Auditor-
Controller on July 12, 2012 as directed by the California Department of Finance. The
amount of this deduction presented should be agreed to evidence of payment. The
attached example summary schedule may be considered for this purpose. Separate
schedules should be completed for the Love and Moderate Income Housing Fund and for
all other funds combined (excluding the Low and Moderate Income Housing Fund).
8
V. 8-27-12
Suggested Procedure(s):
11. Obtain a representation letter from Successor Agency management acknowledging their
responsibility for the data provided to the practitioner and the data presented in the report
or in any attachments to the report. Included in the representations should be an
acknowledgment that management is not aware of any transfers (as defined by Section
34179.5) from either the former redevelopment agency or the Successor Agency to other
parties for the period from January 1, 2011 through June 30, 2012 that have not been
properly identified in the AUP report and its related exhibits. Management's refusal to
sign the representation letter should be noted in the AUP report as required by attestation
standards.
9
V. 8-27-12
SUMMARY OF BALANCES AVAILABLE FOR ALLOCATION TO AFFECTED TAXING ENTITIES
Total amount of assets held by the successor agency as of June 30,2012 (procedure 5)
Add the amount of any assets transferred to the city or other parties for which an enforceable
obligation with a third party requiring such transfer and obligating the use
of the transferred assets did not exist(procedures 2 and 3)
Less assets legally restricted for uses specified by debt
covenants, grant restrictions, or restrictions imposed by other
governments(procedure 6)
Less assets that are not cash or cash equivalents (e.g.,physical assets)-(procedure 7)
Less balances that are legally restricted for the funding of an enforceable
obligation(net of projected annual revenues available to fund those obligations)-(procedure 8)
Less balances needed to satisfy ROPS for the 2012-13 fiscal year(procedure 9)
Less the amount of payments made on July 12,2012 to the County Auditor-Controller as
directed by the California Department of Finance
Amount to be remitted to county for disbursement to taxing entities
Note that separate computations are required for the Low and Moderate Income Housing Fund held by the
Successor Agency and for all other funds held by the Successor Agency.
NOTES: For each line shown above, an exhibit should be attached showing the composition of the summarized amount.
If the review finds that there are insufficient funds available to provide the full
amount due, the cause of the insufficiency should be demonstrated in a separate schedule.
EXHIBIT v,Bm
'
~�
L r"Yff
kINJU
CERTIFIED PUILIC ACCOUNTANTS
,Brandon W.Burrows,CPA
~David E.Hate.CPA,CFP
*otesmrial
^Donald G.Slater,cm
^Richard K.Kikuchi,CPA
~Susan pMatz,CPA
~Shelly xJmxley,CPA
^Bryan u.Gruber,CPA
^Deborah uHarper,CRA
August 28.2O12
K4o. Tina Kundig
City o(Redlands
35Cajon Street
Redlands, [AS2373
Dear Ms. Nundig:
Lance, GuU & Lunghard. LLP (LSL) is pleased to provide this quote to perform your AB 1484 Due
Diligence Review for the City of Redlands. As o leader in the field of governmental accounting and
auditing, vmsappreciate this opportunity given us to-present our professional qualifications. Because of
our extensive government experience (including Redevelopment Agencies) and since LSL currently
provides auditing services to your cihy, we are certain that Lance, Soil & LunQhapd. LLP is the most
qualified accounting firm toprovide this service.
|nperforming this Due Diligence Review, LSL will:
• Conduct a due diligence review to determine the unobligated balances available for transfer
botaxing entities aastated inAB1484Sec.1Y34179.5(o).
° This review will be summarized in an Agreed Upon Procedures Report which will summarize
the procedures performed and the results thereof.
Per Section 18 34178.6. "By October 1. 2012. each successor agency shall provide tothe oversight
boapd, the county auditor-contnoUer. the Contno|kar, and the Department ofFinance the results of the
review conducted pursuant to Section 34179.5 for the Low and yWode/oba Income Housing Fund and
specifically the amount of cash and cash equivalents determined to be available for allocation to taxing
entities. ByDecember 15. 2012. each successor agency shall provide tothe oversight board, the county
auditor-controller, the ControUer, and the department the results of the review conducted pursuant to
Section 3417A.5for all of the other fund and account be/gnnem and specifically the amount ofcash and
cash equivalents determined to be aw*i|eb/a for allocation to taxing entities.* Since the required
procedures for the Due Diligence Review were just approved on August 27, 2012, the time frame in order
toaccomplish these procedures inetimely manner{asdbest challenging. LSL will make every effort to
abide by the dead|ines, huwevor, due to the late approval of these procedurea, we cannot and do not
guarantee that wawill complete the review bythe required filing dates. |twill be the City's responsibility(o
provide the attached requested documentation in its entirety atthe timelines stated. Any pending items
will further the delay inthe issuance ofour report.
Lnnnm. Soil&Loqkmd.LLP 203 North Brea Boulevard ' Suite 203 ` Brea,C*S8021 ^ T8:714�072.O022 ` Fax: 714,672-0331 www.|x|npmx.onm
01aoqwCuuallx ° Temecula Valley ° Silicon Valley
~
LSE
City of Redland
August 28, 2013
Towards this end, we would like to propose a not to exceed contract of$20,000 to perform your due
diligence review. Pimmme sign be/ow to acknowledge your understanding of these time constraints and
oouepdonmm of this agreement and return to my attention. Should you or any other representative of the
City ofRedlands have additional questions regarding this agnmemnent, please do not hesitate tocontact
Rich Kikuchi. Partner at(714)G72-O022,
Very truly yours,
'ZI 9—' 4za' V�o'zl
Tina Kundig, City of Redlands
Date
BI's'T'
AVO RKERS'COMPENSATION INSURANCE CERTIFICATION
TO PERFORM FOR THE CITY OF REDL
Every employer except the State, shall secure the payment of compensation in one or more of the
following ways:
(a) By being insured against liability to pay compensation in one or more insurer duly
authorized to write compensation insurance in this State.
(b) By securing from the Director of Industrial Relations,a certificate o to self.
insure,either as an individual employer or as one employer in a group of employers,
which may be given upon ftmiishing proof satisfactory to the Director of Industrial
Relations of ability to self-insure and to pay any compensation that maybecome due
to his or her employees.
I am aware of the provisions of Section 3700 ofthe or Code which requires every employer to be
insured against liability for Workers' Compensation or to undertake self-insurance in accordance
with the provisions of that Code, and I will comply with such provisions before commencing the
performance of the work of this Agreement. (Labor Code§1861),
LANCE SOL &LUNIGHARD, LLP
By:
j.P
R�ichi,PDate:
I--1----1Ajm1Agrc==tsUSL Agrement.8.29.12.doc