Item 28 - On -Call Right -of -Way Specialty Services

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Professional Appraisal Practice (USPAP) as it pertains to business valuations. DM&A takes the following steps in the goodwill valuation process: • Communicate with the City of Santa Ana Public Works Agency management and/or representatives to ascertain the scope of the assignment and provide responsive proposals for each task order; • Should the City request a budgetary estimate rather than an appraisal report, DM&A will perform virtual or drive -by site inspections, research the business, perform preliminary industry and market research, and provide a brief letter outlining its preliminary estimates regarding business goodwill; • Communicate with the subject business and/or representatives to commence the data gathering process', • Review and analyze the financial statements of the subject business, including internal income statements and balance sheets as well as tax returns; • Interview the owners and/or managers of the subject business and/or a review of deposition transcripts. Such interviews/depositions are intended to provide DM&A with a thorough understanding of the business' products, operations, management, employees, marketing, competition, and industry, as well as an understanding of recent financial trends and outlook; • Conduct site and area inspections of both the subject location and the business' relocation site, if applicable; • Review leases and other contracts pertinent to the business' operations; • Coordinate with other professionals, such as fixtures and equipment appraisers, real estate appraisers, and relocation consultants, to avoid duplication of compensation; • Research the business' industry, economic factors affecting the business, and the marketplace for sales of businesses similar to the subject; • Advise relocation consultant regarding the suitability of potential relocation sites and consult on which site(s) will result in the least goodwill loss; • Investigate the impacts of the taking and/or of relocation, if applicable, on the business' revenues and profits in the "after" condition taking into consideration potential betterment; • Implement valuation methods, such as the Income Approach (i.e., Discounted Cash Flow Method, Capitalization of Cash Flow Method) and Market Approach (i.e., Discretionary Cash Flow Multiplier Method, EBITDA Multiplier Method), to determine the value of the business' goodwill in both the before condition and in the after condition. The selection of the appropriate methods depends on the nature of the business and its marketplace in light of DM&A's market research; 0 Prepare of a valuation report in compliance with USPAP;