MORELAND AND ASSOCIATES, INC. 1 - 2005

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Moreland & ~ gna CERTIFIED PUBLIC ACCOUNTANTS 1201 DOVE STREET, SUITE 680 NEWPORT BEACH, CALIFORNIA 92660 (949) 221-0025 570 RANCHEROS DRIVE, SUITE 260 SAN MARCOS, CA 92069 (760) 752~3390 EXHIBIT A January 19,2005 Ms. Christine Calderon Treasury Manager City of Santa Ana P. O. Box 1988, M-17 Santa Ana, CA 92702 Dear Ms. Calderon: It was a pleasure discussing with you a proposed plan for monitoring compliance with the City's Transient Occupancy Tax (TOT) Ordinance. We have assisted many cities in developing such a plan. In addition to developing an overall plan, you are interested in quickly performing two TOT audits on an emergency basis. This letter will concentrate on performing the two emergency audits. We are prepared to begin your two emergency TOT audits almost immediately. We will provide you with a sample notification letter to send to the two hotels/motels indicating that our firm will be performing the audit and describing the records to make available to us. The letter will also indicate that Mr. David Cotellesse will be contacting them to arrange a convenient time for the audit We recommend testing three months during the most recent year. If significant exceptions are found, then the testing can be expanded to cover a far more significant period, perhaps one to three years. Because our test work is in the form of agreed-upon procedures, I want you to understand the typical procedures we will perform. I. We will gain an understanding of the hotel/motel system for the collection, accounting, reporting and payment of Transient Occupancy Taxes. 2. We will verify the mathematical accuracy of three monthly TOT returns filed during the prior year. 3. We will verify the timing requirements of the filing of the three monthly TOT returns selected for testing. 4. For the three months selected for testing, we will reconcile rental revenues from the TOT returns to the hotel/motel's monthly revenue summary.