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COMMUNICATIONS SUPPORT GROUP, INC. <br />1255 Somerset Lane Newport Beach, CA 92660 VOICE: (714) 788-8566 <br />EMAIL: jrisk(ga.csgaudits.com <br />WEB: www.csgaudits.com <br />January 18, 2011 <br />Mr. Robert J. Carroll <br />Senior Management Analyst <br />City of Santa Ana <br />Parks, Recreation and Community Services <br />26 Civic Center Plaza, M-75 <br />P.O. Box 1988 <br />Santa Ana, CA 92702 <br />SUBJECT: CONSULTING PROPOSAL <br />Dear Mr. Carroll, <br />We are pleased to present our proposal to provide cursory franchise fee and specialized <br />PEG fee consulting services for the City of Santa Ana. As described within, we are <br />proposing separate agreed-upon procedures reviews of the respective company's <br />subscriber revenue practices, franchise fee payments, and PEG fee payments. Both <br />projects are independent and stand alone. The initial Time Warner project will produce <br />a deliverable allowing the City to better understand PEG fee payments, determine the <br />likelihood that additional PEG fees are due to the City, estimate what those fees may <br />amount to, and better enable the City to conduct a subsequent review of franchise fees <br />and PEG fees for the three year period ending December 31, 2010. The AT&T project <br />is a summary review to establish mutual understandings of AT&T's accounting <br />methodologies. The AT&T project will result in a deliverable allowing the City to better <br />understand franchise and PEG fee payments, determine the likelihood that additional <br />franchise and/or PEG fees are due to the City and estimate what those fees may <br />amount to. Both projects secure the City's rights to review fees back to calendar year <br />2008. <br />To best meet the needs of the City, we have combined the resources of our firm <br />Communications Support Group, Inc. ("CSG"), a California-based consulting firm with <br />extensive experience in performing franchise fee and PEG fee reviews on cable <br />television companies, with the resources of Diehl, Evans & Company, LLP ("DE&CO"), a <br />Southern California-based CPA firm. If we are retained for this engagement, DE& CO <br />would work as a subcontractor of CSG. Our two firms have worked successfully <br />together over the past seven years, having provided joint cable television consulting <br />services for over thirty California cities and counties, including many Time Warner <br />systems. We view our two firms as the best qualified to provide telecommunications and <br />cable television consulting services for the City. <br />©2011 Communications Support Group, Inc. Page 1 of 8 <br />