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Proposal Letter <br />City of Santa Ana <br />Communications Support Group, Inc. <br />PROJECT 2 - AT&T Summary Review Project <br />CSG proposes to assist the City to research, correspond and report regarding AT&T's <br />methods of reporting revenues to the City in regard to franchise fees and PEG fees and <br />perform further limited research accordingly. Specifically, CSG agrees to perform the <br />following tasks under this hourly, not to exceed, retainer engagement. <br />Phase I - Fact-finding: <br />1. Investigate facts, review submissions franchise fee and PEG fee remittance <br />statements for calendar years 2008, 2009 and 2010. This work will not constitute an <br />audit and therefore will not trigger audit timing provisions specified in the PUC's video <br />service rules (approximately 4 hours). <br />2. Prepare letters for the City to send to AT&T which suggest plans for a meeting to <br />have AT&T explain AT&T's methods for calculating subscriber and non -subscriber <br />revenues, and understanding the basis of AT&T's various calculations for franchise fees <br />and PEG fees, and in requesting descriptive supporting documents (approximately 8 <br />hours). <br />Phase I I —Analysis: <br />We will identify categories of revenues indicated by AT&T that are included in the <br />computation of gross revenues (non -subscriber revenues such as Home Shopping <br />revenues, advertising, and local origination). We will conduct telephone conferences <br />with AT&T and City staff as needed for clarification. We estimate approximately 8 hours <br />for this phase. <br />Phase III - Follow-up: <br />We will determine whether additional review should be given to recalculating PEG or <br />franchise fees based on new information provided by AT&T, write suggestions, make <br />additional analysis should subsequent information be provided, and summarize findings <br />in a report to the City on findings/recommendations (up to remaining time on the <br />purchase order). This will provide guidance to the City for a time in the future when the <br />City formally performs a three year audit as described in the state franchise. <br />CSG agrees to provide up to 25 hours of consulting and CPA time with a not -to -exceed <br />allocation of $5,000 for all deliverables under Project 2. For limited scope engagements <br />such as Project 2 — AT&T, CSG understands that no additional requirements or <br />additional time or material conditions will be placed on this engagement without mutual <br />©2011 Communications Support Group, Inc. Page 5 of 8 <br />