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HomeMy WebLinkAboutWHITE NELSON DIEHL EVANS LLP (3) -2016IN✓SIIiIWL ON Ep,t WORK MAY PROCEED UNTIL INSURAW EXIPIR_E" CLERK OFCOUNCI JZN� DATE: F�N A-2016-0gg Ivi AGREEMENT FOR PROVISION OF FINANCIAL AUDIT SERVICES THIS AGREEMENT, made and entered into this 4"' day of May by and between White Nelson Diehl Evans LLP (hereinafter "AUDITOR"), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California (hereinafter "CITY"). .Q RECITALS n` A. The CITY issued a Request for Proposals, dated February 11, 2016, for an. independent audit of its financial statements and records. C� B. Pursuant to said invitation, AUDITOR submitted a proposal which is hereby accepted by CITY for provision of said professional service. C. AUDITOR is recognized as a competent and qualified certified public accountant, duly authorized to practice and licensed as such by the California State Board of Accountancy. D. In undertaking the performance of this Agreement, AUDITOR represents that it is knowledgeable in its field and that any services performed by AUDITOR under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. SCOPE OF SERVICES AUDITOR shall perform its Annual Independent Audit for the two fiscal years ending June 30, 2016 through June 30, 2411 fiscal years, as set forth in CITY's Request for Proposals, attached hereto as Exhibit A, and incorporated by this reference. Said services shall be performed in accordance with the process set forth in AUDITOR'S Proposal, attached hereto as Exhibit B. The Executive Director of Finance and .Management for the City can request that AUDITOR provide other auditing services upon request in lieu of the two agreed upon procedure reviews identified in Exhibit C. In All exhibits referenced herein and attached hereto shall be incorporated by reference as though attached in their entirety. 2. REPRESENTATIVES For purposes of implementing this Agreement, the representative of CITY shall be the Executive Director of the Finance and Management Services Agency, or his designated representative, and the representative of the AUDITOR shall be NITIN P. PATEL, CPA Engagement Partner. Except as may be otherwise stated herein, such representatives shall have the authority to act on behalf of their respective parties in carrying out the terms of this Agreement. Page 1 of 9 3. DELIVERY OF WORK PRODUCT - OWNERSHIP AUDITOR warrants and represents that it has the absolute right to enter into and perform this Agreement and will perform its obligations hereunder in accordance with standards and practices prevailing in the industry. AUDITOR's contribution to the Project, including works to be produced by AUDITOR hereunder, will not infringe or misappropriate the proprietary or personal rights of any third person or party. AUDITOR shall deliver to CITY any work product which results from the services provided. Said work product shall be submitted in hard copy and produced in a form compatible with CITY's information systems, as agreed between the Project Manager and AUDITOR. In regard to all material produced as a deliverable under this Agreement, including but not limited to records, papers, drawings, specifications, programs, systems and other materials prepared by AUDITOR, AUDITOR agrees, for itself and its affected officers, employees, agents, contractors, and volunteer workers, that (a) other such material shall be the property of the CITY, and may not be copyrighted without prior review from the CITY, and (b) the authors of all such material, whether copyrighted or not, award to the CITY, and to its officers, agents and employees acting within the scope of their official duties, as a condition of payment to the AUDITOR, a royalty -free, nonexclusive, irrevocable license throughout the world for governmental purposes to disclose, publish, translate, reproduce, and use such materials. 4. COMPENSATION a. CITY agrees to pay, and AUDITOR agrees to accept as total payment for its services, the rates and charges identified in AUDITOR's Cost Proposal, attached hereto as Exhibit C. The total sum to be expended under this Agreement shall not exceed per fiscal year during the terns of this Agreement is FY 2015-16 is $180,630 and FY 2016-17 is $186,045. b. Payments to AUDITOR shall be made within thirty (30) days after receipt by CITY of invoices from AUDITOR, which shall be rendered not more often than monthly. Special examinations, surveys, or detailed reports of any nature outside the scope of this Agreement shall be billed separately by AUDITOR and must be specifically authorized in writing by CITY in advance of such additional services proposed to be provided. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by CITY. �1"I k The tern of this Agreement shall be for a period of two (2) consecutive years, beginning with the fiscal year ending June 30, 2016 and June 30, 2017. CITY shall retain an option in its sole discretion to extend auditing services for one additional two-year period, exercisable by the City Manager, for the fiscal year ending June 30, 2018 and June 30, 2019, subject to non - substantive changes approved by the City Manager and City Attorney. Page 2 of 9 6. INDEPENDENT CONTRACTOR AUDITOR shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the CITY. This Agreement is not intended nor shall it be construed to create an employer-employee relationship, a joint venture relationship, or to allow the CITY to exercise discretion or control over the professional manner in which AUDITOR performs the services which are the subject matter of this Agreement; however, the services to be provided by AUDITOR shall be provided in a manner consistent with all applicable standards and regulations governing such services. AUDITOR shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. INSURANCE Prior to undertaking performance of work under this Agreement, AUDITOR shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: a. Commercial General Liability Insurance. AUDITOR shall maintain commercial general liability insurance which shall include, but not be limited to protection against claims arising from bodily and personal injury, including death resulting therefrom and damage to property, resulting from any act or occurrence arising out of AUDITOR's operations in the performance of this Agreement, including, without limitation, acts involving vehicles. The amounts of insurance shall be not less than the following: single limit coverage applying to bodily and personal injury, including death resulting therefrom, and property damage, in the total amount of $1,000,000 per occurrence, $1,000,000 in the aggregate. Such insurance shall (a) name the CITY, its officers, employees, agents, volunteers and representatives as additional insured(s); (b) be primary with respect to insurance or self-insurance programs maintained by the CITY; and (e) contain standard separation of insureds provisions. b. Business automobile liability insurance, or equivalent form, with a combined single limit of not less than $1,000,000 combined single limit. Such insurance shall include coverage for owned, hired and non -owned automobiles. c. Worker's Compensation Insurance. In accordance with the provisions of Section 3300 of the Labor Code, AUDITOR, if AUDITOR has any employees, is required to be insured against liability for worker's compensation or to undertake self-insurance. Prior to commencing the performance of the work under this Agreement, AUDITOR agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. d. Professional liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim, and $1,000,000 in the aggregate. e. The following requirements apply to the insurance to be provided by AUDITOR pursuant to this section: Page 3 of 9 (i) AUDITOR shall maintain all insurance required above in full force and effect for the entire period covered by this Agreement. (ii) Certificates of insurance shall be furnished to the CITY upon execution of this Agreement and shall be approved in fonn by the City Attorney. (iii) Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the CITY. f. If AUDITOR fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the CITY with required proof that insurance has been procured and is in force and paid for, the CITY shall have the right, at the CITY's election, to forthwith terminate this Agreement. Such termination shall not effect AUDITOR's right to be paid for its time and materials expended prior to notification of termination. AUDITOR waives the right to receive compensation and agrees to indemnify the CITY for any work performed prior to approval of insurance by the CITY. 8. INDENINIFICATION AUDITOR agrees to and shall indemnify and hold harmless the CITY, its officers, agents, employees, consultants, special counsel, and representatives from liability: (1) for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including death, and claims for property damage, which may arise from the negligent operations of the AUDITOR or its contractors, subcontractors, agents, employees, or other persons acting on their behalf which relates to the services described in section I of this Agreement; and (2) from any claim that personal injury, damages, just compensation, restitution, judicial or equitable relief is due by reason of the terms of or effects arising from this Agreement. This indemnity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered, or alleged to have been suffered, by reason of the events referred to in this Section or by reason of the tenns of, or effects, arising from this Agreement. The AUDITOR further agrees to indemnify, hold harmless, and pay all costs for the defense of the CITY, including fees and costs for special counsel to be selected by the CITY, regarding any action by a third party challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement. CITY may make all reasonable decisions with respect to its representation in any legal proceeding. Notwithstanding the foregoing, to the extent AUDITOR's services are subject to Civil Code §2782.8, the above indemnity shall be limited, to the extent required by Civil Code §2782.8, to claims that arise of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the AUDITOR. Page 4 of 9 9. CONFIDENTIALITY All information gained by AUDITOR in perfonnance of this Agreement shall be considered confidential and shall not be released by AUDITOR without CITY'S prior written authorization excepting that information which is a public record and subject to disclosure pursuant to the California Public Records Act, government Code Section 6250 et seq. AUDITOR, its officers, employees, agents, or subcontractors, shall 'not voluntarily provide declarations, letters of support, testimony at depositions, response to interrogatories or other information concerning the project or cooperate in any way with a party who may be adverse to CITY or whom AUDITOR reasonably should know may be adverse in any subsequent litigation. AUDITOR shall incur no liability under this Agreement for materials submitted by it which are later released by CITY, its officers, employees, or agents. AUDITOR shall also incur no liability for statements made by it at any public meeting, or for any document released by it for which prior written CITY authorization was obtained. If AUDITOR or any of its officers, employees, consultants, or subcontractors does voluntarily provide information in violation of this Agreement, CITY has the right to reimbursement and indemnity from AUDITOR for any damages caused by AUDITOR'S conduct --including attorney's fees. AUDITOR shall promptly notify CITY should AUDITOR, its officers, employees, agents or subcontractors be served with any Summons, Complaint, Subpoena, Notice of Deposition, Request for Documents, Interrogatories, Request for Admissions or other discovery requests from any party regarding this agreement and the work perfonned hereunder. CITY retains the right, but not the obligation, to represent AUDITOR and/or to be present at any deposition, hearing, or similar proceeding. AUDITOR agrees to cooperate fully with CITY and to provide CITY with the opportunity to review any response to discovery requests provided by AUDITOR. However, CITY'S right to review any such response does not imply or mean the right by CITY to control, direct, or rewrite said response. CITY warrants that AUDITOR will have fully met the requirements of this provision by obtaining CITY'S written approval prior to providing documents, testimony, or declarations; Consulting with CITY before responding to a Subpoena or court order; in the case of depositions upon providing Notice to CITY of same; or providing CITY opportunity to review discovery responses prior submission. For purposes of this section, a written authorization from CITY shall include a "faxed" letter. 10. CONFLICT OF INTEREST CLAUSE AUDITOR covenants that neither it nor any officer or principal of their firm have any interests, nor shall they acquire any interest, directly or indirectly which will conflict in any manner or degree with the performance of their services hereunder. AUDITOR further covenants that in the performance of this Agreement, no person having such interest shall be employed by them as an officer, employee, agent, or subcontractor. Page 5 of 9 11. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by facsimile or other telegraphic communication in the manner provided in this Section, to the following persons: To CITY: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, CA 92702-1988 Facsimile (714) 647-6956 With courtesy copies to: Mrs Executive Director of the Finance and Management Services Agency City of Santa Ana 20 Civic Center Plaza (M-17) P.O. Box 1988 Santa Ana, California 92702 Facsimile (714) 647-5414 City Attorney City of Santa Ana 20 Civic Center Plaza (M-29) P.O. Box 1988 Santa Ana, California 92702 Facsimile (714) 647-6515 To AUDITOR: White Nelson Diehl Evans LLP Certified Public Accountants and Consultants 2875 Michelle Drive, Suite 300 Irvine, CA 92606-5165 (714) 978 -1300 -Telephone npatelCa ndecpa.com A party may change its address by giving notice in writing to the other party. Thereafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by facsimile, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. Page 6 of 9 12. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the CITY and AUDITOR, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the CITY and by an authorized representative of AUDITOR. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate AUDITOR nor the CITY. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 13. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of AUDITOR, AUDITOR may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the CITY and any such assignment, transfer, delegation or subcontract without the CITY's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the CITY's ability to have any of the services which are the subject to this Agreement performed by CITY personnel or by other consultants retained by CITY. 14. TERMINATION If, at any time during the term of this Agreement, CITY determines that AUDITOR is not faithfully abiding by any term or condition contained herein, CITY may notify AUDITOR in writing of such defect or failure to perform; which notice must give AUDITOR a ten (10) -day notice of time thereafter in which to perform said work or cure the deficiency. If AUDITOR has not performed the work or cured the deficiency within the ten (10) days specified in the notice, such shall constitute a breach of this Agreement and CITY may terminate this Agreement immediately by written notice to the AUDITOR to said effect. Thereafter, neither party shall have any further duties, obligations, responsibilities or rights under this Agreement except, however, any and all obligations of AUDITOR'S surety shall remain in full force and effect, and shall not be extinguished, reduced, or in any manner waived by the termination hereof. In said event, AUDITOR shall be entitled to the reasonable value of its services performed from the beginning of the period in which the breach occurs up to the day it received CITY'S Notice of Termination, less any offset from such payment representing the CITY'S damages from such breach. CITY reserves the right to delay any such payment until completion or confirmed abandonment of the project, as may be determined in the CITY'S sole discretion, so as to permit a full and complete accounting of costs. In no event, however, shall AUDITOR be entitled to receive in excess of the compensation quoted in its bid Page 7 of 9 15. ATTORNEYS FEES In the event an action is commenced by either party to enforce any rights under this Agreement, the prevailing party shall be entitled to recover reasonable attorney's fees and court costs, in addition to any other relief granted by the Court. 16. DISCRIMINATION AUDITOR shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities or any activities under this Agreement. AUDITOR affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 17. JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 18. PROFESSIONAL LICENSES AUDITOR shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. AUDITOR shall notify the CITY immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 19. MISCELLANEOUS PROVISIONS a. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully, including reasonable costs and attorney's fees, for any injuries or damages to CITY in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. b. Captions and headings in this Agreement, including the title of this Agreement, are for convenience only and are not to be considered in construing this Agreement. c. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. Page 8 of 9 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. CITY OF SANTA ANA ATTEST: 4��a `tel ,- . MARIA D. HUIZAR DAVID CAVAZOS Clerk of the Council City Manager APPROVED AS TO FORM: Sonia R. Carvalho City Attorney By: S SANDOVA of Assistant City Attorney RECOMMENDED FOR APPROVAL: CONSULTANT: A%Wv� �'�z,>�L w�,'+Q !G'L,I FRANCISCO GUITERREZ ✓t✓ �� P Executive Director Finance and Management Services By: /VA -F°i`V�K T"v Tax ID# 33 0 6, 6 3 O Page 9 of 9 EXHIBIT A REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES RFP 16-014 CITY OF SANTA ANA Finance & Management Services Agency 20 Civic Center Plaza Santa Ana, CA 92701 Sergio Vidal Assistant Director of Finance & Management Services Agency (714) 647-5295 svidal@santa-ana.orq KEY RFP DATES (Subiect to change): Issue Date: February 11, 2016 Deadline for Questions about RFP: February 19, 2016 Proposal Due Date: March 4, 2016, by 4:00 p.m. Review of Proposals: March 7 — 22, 2016 Projected Award Date: April 5, 2016 � t i REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES 16-014 NOTICE OF REQUEST FOR PROPOSALS NOTICE IS HEREBY GIVEN that proposals will be received from qualified firms to provide Professional Auditing Services. Responses to the Request for Proposal (RFP) will be accepted until Friday, March 4.2016 by 4:00 o.m, All notifications, updates and addenda will be posted on the City's online bid management and publication system page at www.Santa-ana.orglfinancelvendor__registration.asp. Proposers shall be responsible for monitoring the site to obtain information regarding this solicitation. Failure to respond to required updates may result in a determination of a nonresponsive proposal. MAILED, DELIVERED BY HAND, or COURIERED proposals will be accepted at: City of Santa Ana Attn: Executive Director of Finance and Management Services Finance Department, V Floor 20 Civic Center Plaza M-17 Santa Ana, CA 92701 It is the responsibility of the proposer to ensure that any proposals submitted shall have sufficient time to be received by the City of Santa Ana prior to the proposal due date and time. Questions regarding this Request for Proposal shall be made in writing via e-mail to Sergio Vidal at svidal!2santa-ana.orc. Enter "PROFESSIONAL AUDITING SERVICES RFP 16-014" as the Subject title on all e-mail correspondence. The receiving time in the Finance Department, 20 Civic Center Plaza, Santa Ana, CA 92701 will be the governing time for acceptability of proposals. Late proposals will NOT be considered and will be returned to proposer unopened. Telegraphic, electronic, and facsimile proposals will not be accepted. ONLY SEALED PROPOSALS ARE ACCEPTABLE, DO NOT E-MAIL RFP RESPONSES. CITY OF SANTA ANA REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES 16-014 TABLE OF CONTENTS EXHIBIT A- SAMPLE AGREEMENT 12 EXHIBIT B - REFERENCES 19 EXHIBIT C - PROPOSER'S STATEMENT 20 EXHIBIT D - NONCOLLUSION AFFIDAVIT 21 PAGE 1) PROJECT PURPOSE 4 2) BACKGROUND 4 3) SCOPE OF SERVICES 5 4) TIME REQUIREMENTS 7 5) ASSISTANCE TO BE PROVIDED TO THE AUDITOR 8 6) MINIMUM QUALIFICATIONS 8 7) RESPONSE TO RFP 8 8) SELECTION PROCESS AND CRITERIA 10 9) PROTESTS 11 10) RFP TIMETABLE 11 EXHIBIT A- SAMPLE AGREEMENT 12 EXHIBIT B - REFERENCES 19 EXHIBIT C - PROPOSER'S STATEMENT 20 EXHIBIT D - NONCOLLUSION AFFIDAVIT 21 CITY OF SANTA ANA REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES 16-014 1) PROJECT PURPOSE The City of Santa Ana (the City) is requesting proposals from qualified Certified Public Accountant firms to perform its Annual Independent Audit for the two fiscal years ending June 30, 2016 through June 30, 2017, with the option to renew the contract for one additional two- year term for a total of four years. The audits are to be performed in accordance with the provisions contained in this Request for Proposals (RFP). 2) BACKGROUND The City of Santa Ana is a Charter City in the State of California located in northern Orange County. The City was incorporated in 1886 and operates under a Council -Manager form of government. The City currently occupies a land area of 27.2 square miles and serves a population of approximately 335,000. The City is bordered by Garden Grove, Tustin, Orange, Costa Mesa, Fountain Valley, and Westminster. The City's fiscal year begins on July 1 and ends on June 30. The City of Santa Ana is a full service City of approximately 960 full-time and 440 part-time employees with eight (8) agencies (departments). City services include police, water, sewer, road maintenance, recreation, library, planning and building, and engineering services. The City contracted with the Orange County Fire Authority to outsource its fire services in 2012. The City Council is composed of an elected Mayor and six (6) Council Members. A. Fund Structure The following funds and account groups are currently presented in the City's Comprehensive Annual Financial Report: 1. General Fund for the general operations of the City. 2. Nine Internal Service Funds including public works administration, equipment maintenance and risk management. 3. Seven Enterprise Funds including water and sewer. 4. Seven Special Revenue Funds including the Housing Authority Fund. 5. Six Capital Project funds 6. One Debt Service Fund 7. Agency Funds held by the City in a trustee capacity. 8. Private -Purpose Trust Fund for Successor Agency B. Budgetary Basis of Accounting The City's budget is adopted annually by the City Council and is prepared for each fund in accordance with its basis of accounting (generally modified accrual). The City Manager is responsible for preparation and implementation of the annual budget. While all unencumbered appropriations are lapsed at year-end, valid outstanding encumbrances (those for which performance under executory contract is expected in the next year) are re -appropriated and become part of the subsequent year's budget. The City Council and the City Manager have the authority to amend the budget during the year. The City's FY2015-16 total budget is approximately $476 million with the General Fund budget totaling approximately $226 million. The City maintains budgetary controls to ensure compliance with legal provisions embodied in the appropriated budget approved by the City Council. The level of budgetary control is established by function and activity within each fund. C. Component Units The City identified the Successor Agency to the Community Redevelopment Agency as a Fiduciary Component Unit and Housing Authority of the City of Santa Ana and the Santa Ana Financing Authority as Blended Component Units. D. Federal, State and Local Assistance The City receives financial assistance in the form of state and federal programs which vary from year to year. Accordingly, compliance with the Single Audit Act of 1996 and implementing regulations issued by the United States Office of Management and Budget (OMB) Circular A- 133, and the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200) will be required. E. The City's Comprehensive Annual Financial Reports (CAFR) for the last ten years are available on the City's website at: http://www.ci.santa-ana.ca.us/finance/cafr/ The audits of the City for the past eight (8) fiscal years were performed by Macias Gini & O'Connell LLP. It is anticipated that their work papers will be available for review. 3) SCOPE OF SERVICES A. Terms The City is selecting auditors to perform an examination and issue an opinion on the financial statements of all fund types and account groups of the City for the two consecutive years beginning with the fiscal year ending June 30, 2016 with the option for one additional two-year period. B. Auditing Standards to be followed The audits shall be performed in accordance with: • Auditing standards generally accepted in the United States of America as set forth by the American Institute of Certified Public Accountants; • The standards set forth for financial audits in the General Accounting Office's (GAO) Government Audit Standards (1994) issued by the Comptroller General of the United States; • The provisions of the Federal Single Audit Act as amended; • U.S. Office of Management and Budget (OMB) Circular A-133, Audits of State and Local Governments: • The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200); and • Other or new pronouncements or regulations in place now or in the future C. Reports to be issued • Comprehensive Annual Financial Report ("CAFR") — all funds including Fiduciary Funds, Successor Agency and Housing Authority Financial Report • Single Audit of Federal Grants and Other Financial Information • Air Quality Improvement Fund Audit Report • Report on the City's GANN Limit computation • City's Investment Policy Compliance Review • Annual on-line attestation of Financial Data Schedule (FDS) for the Santa Ana Housing Authority • Annual State Controller's Report • Agreed Upon Procedures Report (two annually), to review the City's internal control processes. The scope of review will include but not limited to the following: o Cash handling o Purchasing o Assist in the Development of an Internal Audit Department framework D. The auditor shall assist the City with the finalization of the CAFR. The audit timeline must take into consideration that the City submits the CAFR to the Government Finance Officers Association (GFOA) for review in their Certificate of Achievement for Excellence in Financial Reporting program. The City also requires a management letter containing comments and recommendations regarding the auditor's review and evaluation of the systems of internal control and accounting procedures. E. It is expected that the auditor will be available throughout the year for general consultation regarding matters of accounting. The auditor may be asked to provide guidance on implementation of new GASB and SAS requirements and provide expertise and recommendations regarding specific of Federal and State regulations as to how they may impact local government accounting. C F. If requested, the auditor may be required to meet with staff and Council Members to review the Management Letter and Audit. Attendance at Council meetings may also be requested. G. If requested by the member of the bond "consent and citation of expertise" and financial statements and auditors' report, in connection with sale of debt securities, H. Internal Audit Function financing team, the auditor may be asked to issue a any necessary "comfort letters" in relationship to City which are included in the Official Statement prepared The City is currently developing an internal audit program via the hiring of an Internal Auditor (Senior Accountnant). Due to the City currently developing its internal audit program, the auditors would be responsible for conducting Agreed Upon Procedures to review the City's internal control processes in addition to the regular annual audit. The scope of the review will be defined by the Finance and Management Services Agency. A report from the auditors would be required giving the scope of the work performed and recommendations the City should implement to improve internal controls in the areas examined. I. Working Paper Retention and Access to Working Papers Working papers are to be retained for a period of five years and are to be made available (upon reasonable notice) to City staff as well as any third parties authorized by the City. Subcontracting Should any firm submitting a proposal consider subcontracting portions of the engagement, that fact must be clearly identified in the proposal along with the name of the proposed subcontractor. Following the award of the audit contract, no additional subcontracting will be allowed without prior written consent by the City's Executive Director of Finance and Management Services Agency, 4) TIME REQUIREMENTS It is anticipated that the audit work will be performed in two phases, Interim and Final Fieldwork: A. Interim Fieldwork Interim fieldwork shall take place in late May or early June and would consist of planning and interim audit procedures (such as gaining an understanding of relevant systems, procedures and internal controls, selected compliance and transaction testing, etc.) Final Fieldwork Final fieldwork would involve completing the examination of the General Purpose Financial Statements, preparing opinion letters and other relevant financial reports. The final fieldwork is to begin no earlier than October 1, and shall be completed no later than November 15. This schedule may be altered only by mutual agreement between the City and the auditor. Any proposed audit adjustments must be identified no later than the conclusion of audit field work. C. Draft Reports The CAFR will be prepared by City staff. The Auditor will review the draft CAFR prepared by the City and provide recommendations. The complete final draft of the City and its component units' financial statements, including footnotes and supplementary schedules shall be completed by third week of November. Drafts of the GANN Limit Reports and review of the City's Investment Policy are due no later than November 30. A draft of the management letter is due no later than November 30. The City will review and provide comments or responses to the auditors within 10 calendar days of receipt of each of the draft reports. A draft of Single Audit report is due no later 60 days from the date of the completion of the CAFR. 5) ASSISTANCE TO BE PROVIDED TO THE AUDITOR A. Finance Department and Clerical Assistance City staff will be available to assist in the audit. City staff will prepare any necessary schedules, provide documents (invoices, checks, council meeting minutes, etc.) and prepare all confirmations. In addition, we will be available to respond to any questions which may arise during the audit. B. The City will provide the auditors with suitable workspace, telephone, access to FAX machine and photocopier. 6) MINIMUM QUALIFICATIONS Firms submitting bids shall meet the following minimum qualifications: A. Firm shall have successfully completed audits of a minimum of ten (10) government agencies including cities, in the preceding twelve months. B. Staff assigned to the engagement shall have a minimum of one-year of experience in the audit of municipalities. Managers or supervisors assigned to the engagement shall have a minimum of five years of experience in the audit of municipalities. Partners assigned to the engagement shall have a minimum of five years of experience in the audit of municipalities. C. Firm shall have prepared and issued a minimum of five Single Audit reports in the preceding twelve months. 7) RESPONSE TO RFP A. Submission requirements: Proposals shall contain the following information: A general summary of the audit engagement plan including nature of interim and final fieldwork testing procedures and the extent of support which will be required from City staff (i.e. pulling invoices, checks, schedule preparation, etc.) Due to the City's limited staff, the City will not be able to provide copying services. 2. A discussion of your firm's qualifications and relevant experience including recent experience in compliance auditing under the Single Audit Act. 3. A list of the firm's most significant engagements in the last five (5) years. 4. A discussion of educational background and relevant experience of the Partner, Supervisor(s) and Staff which will be assigned to this engagement. 5. A summary of recent audit engagements of other similarly sized governmental agencies, including individuals from four recent engagements whom we may contact for reference. 6. A preliminary schedule including tentative dates for completion of interim and final field work, preparation of financial statements, footnotes, opinion letters and the management letter. 7. A proposed budget including estimated hours for each member of the engagement team, hourly billing rates, out-of-pocket expenses and a total proposed cost for each of the four years. The budget must include an all-inclusive maximum price (including out-of-pocket expenses) for all services outlined in Section 3C of this RFP. The budget should be broken down by the items noted in Section 3C of this RFP by each fiscal year. 8. A listing of billing rates, by staffing level, which would apply to any supplemental services which may be requested by the City during the term of this contract. 9. A statement that the firm is independent of the City and that it is unaware of potential conflicts of interest. 10. An affirmative statement verifying the firm and all assigned key professional staff are properly licensed to practice in California. 11. A copy of a report on its most recent external quality control review (peer review), with a statement whether that quality control review included a review of specific government engagements (required by Government Audit Standards). 12. Information on the results of any Federal or State desk reviews or field reviews of its audits during the past three (3) years. In addition, the Proposer shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three (3) years with State regulatory bodies or professional organizations. 13. A description of limits on liability, if any. 14. A warrant that the firm maintains a prudent amount of errors and omissions insurance that covers negligent acts and is applicable to the work requested in this RFP. 15. An acknowledgement by signature that the signer is authorized to contractually bind the firm. 16. Any pending legal actions against the firm. 17. Proposer's Statement - Exhibit C 18. Noncollusion Affidavit — Exhibit D B. Sealed Proposals: Proposals to the RFP should be addressed to City of Santa Ana, Finance Department 3rd Floor, 20 Civic Center Plaza M-17, Santa Ana, CA 92701, and are due no later than 4:00 p.m. March 4, 2016 . Five (5) copies of bound and sealed proposals are required. It is the responsibility of the proposer to ensure that the proposal is delivered on time. Any proposal received after the deadline will be disqualified. 0 C. Proposals will be accepted only from parties that are free of all obligations and interests that might conflict with the best interest of the City of Santa Ana. The City will not be liable for any costs incurred in preparing proposals or associated travel costs. The proposer shall furnish the City with such additional information as the City may reasonably require. The City reserves the right to conduct pre -contract negotiations with any or all potential proposers. D. Any questions regarding this Request for Proposal shall be made in writing via e-mail to Sergio Vidal at svidal(a)santa-ana.oro. Enter "PROFESSIONAL AUDITING SERVICES RFP 16-014" as the Subject title on all e-mail correspondence. E. Costs for developing proposals are entirely the responsibility of the respondent. F. The respondent grants permission for the City to contact any individuals listed as references. G. All submitted proposals, and information included therein and attached thereto, shall become public records upon receipt by the City Council for consideration of selection of auditor. H. All proposals must be valid for a period of not less than ninety (90) days from the closing date of submission. I. The proposer receiving the award will provide Certificates of Insurance to the City to verify coverage in relationship to these services prior to commencing work. 8) SELECTION PROCESS AND CRITERIA A. Selection Committee All proposals will be reviewed by a selection committee designated by the Executive Director of Finance and Management Services Agency. The selection process will involve the review of the proposal for compliance with the requirements of the RFP, qualifications of the firm and references. Based upon the selection committee's review of the proposals, interviews may be scheduled at the City of Santa Ana City Hall with the most qualified proposers. Finalists will be notified of specific times and will be allowed a total of thirty minutes for their presentation and to answer questions from the selection committee. The selection committee will rank the audit firms and recommend the top ranked firm to the City Council for award of contract. The City is under no obligation to accept any proposal and reserves the right to negotiate with respondents as to fees and terms. The City may reject proposals at its sole discretion. If a proposal fails to satisfy any requirements outlined in this RFP, it may be considered non-responsive and the proposal may be rejected. The audit firms will be ranked based on the following criteria: 1. Technical qualifications and experience of key members of the engagement team and the firm (20%) 2. Experience with similarly sized governmental agencies in providing the types of services outlined in this RFP (15%) 10 9) Capability of handling all aspects of the engagement as defined as well as providing ongoing support and technical assistance throughout the year (10%) Ability to provide continuity of staff from year to year (10%) Thoroughness of auditors proposed scope of work (10%) Clearly defined schedule of work to be performed and ability to meet required completion dates for key parts of the audit (20%) Reasonableness and competitiveness of cost budget (15%) The award of the contract will not be based on the lowest fee proposed, but on a combination of all of the above factors. PROTESTS Firms may file a "protest" to an RFP with the Finance & Management Services Department. In order for a protest to be considered valid, the protest must: 1. Be filed in writing within five (5) business days of either the RFP issued date or before 5:00 p.m. of the 5th business day following the posting of Notice of Intent to Award Contract on the City's website; 2. Clearly identify the specific irregularity or accusation; 3. Clearly identify the specific City staff determination or recommendation being protested; 4. Specify, in detail, the grounds of the protest and the facts supporting the protest; and 5. Include all relevant, supporting documentation with the protest at time of filing. If the protest does not comply with each of these requirements, it will be rejected as invalid. If the protest is valid, the Finance Executive Director, or other designated City staff member, shall review the basis of the protest and all relevant information. The Finance Executive Director will provide a written decision to the protestor within ten (10) business days from receipt of protest. The decision from the Finance Executive Director, or her/her designee, is final and no further appeals will be considered. 10) RFP TIMETABLE (SUBJECT TO CHANGE) Issue Date: Deadline for Questions about RFP Proposal Due Date: Review of Proposals: Projected Award Date: February 11, 2016 February 19, 2016 March 4, 2016, by 4:00 P.M. March 7 — 22, 2016 April 5, 2016 11 EXHIBIT A CITY OF SANTA ANA REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES SAMPLE AGREEMENT AGREEMENT FOR PROVISION OF FINANCIAL AUDIT SERVICES THIS AGREEMENT, made and entered into this DAY day of MONTH, YEAR by and between NAME OF AUDIT FIRM (hereinafter "AUDITOR"), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California (hereinafter "CITY',). RECITALS A. The CITY issued a Request for Proposals, dated DATE, YEAR, for an independent audit of its financial statements and records. B. Pursuant to said invitation, AUDITOR submitted a proposal which is hereby accepted by CITY for provision of said professional service. C. AUDITOR is recognized as a competent and qualified certified public accountant, duly authorized to practice and licensed as such by the California State Board of Accountancy. D. In undertaking the performance of this Agreement, AUDITOR represents that it is knowledgeable in its field and that any services performed by AUDITOR under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. SCOPE OF SERVICES AUDITOR shall provide financial auditing services for CITY's 20YX-20XX fiscal years, as set forth in CITY's Request for Proposals, attached hereto as Exhibit A, and incorporated by this reference. Said services shall be performed in accordance with the process set forth in AUDITOR'S Proposal, attached hereto as Exhibit B. All exhibits referenced herein and attached hereto shall be incorporated by reference as though attached in their entirety. 2. REPRESENTATIVES For purposes of implementing this Agreement, the representative of CITY shall be the Executive Director of the Finance and Management Services Agency, or his designated representative, and the representative of the AUDITOR shall be NAME I TITLE Except as may be otherwise stated herein, such representatives shall have the authority to act on behalf of their respective parties in carrying out the terms of this Agreement. 12 3. DELIVERY OF WORK PRODUCT - OWNERSHIP AUDITOR warrants and represents that it has the absolute right to enter into and perform this Agreement and will perform its obligations hereunder in accordance with standards and practices prevailing in the industry. AUDITOR's contribution to the Project, including works to be produced by AUDITOR hereunder, will not infringe or misappropriate the proprietary or personal rights of any third person or party. AUDITOR shall deliver to CITY any work product which results from the services provided. Said work product shall be submitted in hard copy and produced in a form compatible with CITY's information systems, as agreed between the Project Manager and AUDITOR. In regard to all material produced as a deliverable under this Agreement, including but not limited to records, papers, drawings, specifications, programs, systems and other materials prepared by AUDITOR, AUDITOR agrees, for itself and its affected officers, employees, agents, contractors, and volunteer workers, that (a) other such material shall be the property of the CITY, and may not be copyrighted without prior review from the CITY, and (b) the authors of all such material, whether copyrighted or not, award to the CITY, and to its officers, agents and employees acting within the scope of their official duties, as a condition of payment to the AUDITOR, a royalty -free, nonexclusive, irrevocable license throughout the world for governmental purposes to disclose, publish, translate, reproduce, and use such materials. 4. COMPENSATION a. CITY agrees to pay, and AUDITOR agrees to accept as total payment for its services, the rates and charges identified in AUDITOR's Cost Proposal, attached hereto as Exhibit C. The total sum to be expended under this Agreement shall not exceed $ MAXIMUM FEE per fiscal year, during the term of this Agreement. b. Payments to AUDITOR shall be made within thirty (30) days after receipt by CITY of invoices from AUDITOR, which shall be rendered not more often than monthly. Special examinations, surveys, or detailed reports of any nature outside the scope of this Agreement shall be billed separately by AUDITOR and must be specifically authorized in writing by CITY in advance of such additional services proposed to be provided. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by CITY. 5. TERM The term of this Agreement shall be for a period of two (2) consecutive years, beginning with the fiscal year ending June 30, 20XX. CITY shall retain an option in its sole discretion to extend auditing services for one additional two-year period. 6. INDEPENDENT CONTRACTOR AUDITOR shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the CITY. This Agreement is not intended nor shall it be construed to create an employer-employee relationship, a joint venture relationship, or to allow the CITY to exercise discretion or control over the professional manner in which AUDITOR performs the services which are the subject matter of this Agreement; however, the services to be provided by AUDITOR shall be provided in a manner consistent with all applicable standards and regulations governing such services. AUDITOR shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. INSURANCE Prior to undertaking performance of work under this Agreement, AUDITOR shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: 13 a. Commercial General Liability Insurance. AUDITOR shall maintain commercial general liability insurance which shall include, but not be limited to protection against claims arising from bodily and personal injury, including death resulting therefrom and damage to property, resulting from any act or occurrence arising out of AUDITOR's operations in the performance of this Agreement, including, without limitation, acts involving vehicles. The amounts of insurance shall be not less than the following: single limit coverage applying to bodily and personal injury, including death resulting therefrom, and property damage, in the total amount of $1,000,000 per occurrence, $2,000,000 in the aggregate. Such insurance shall (a) name the CITY, its officers, employees, agents, volunteers and representatives as additional insured(s); (b) be primary with respect to insurance or self- insurance programs maintained by the CITY; and (c) contain standard separation of insureds provisions. b. Business automobile liability insurance, or equivalent form, with a combined single limit of not less than $2,000,000 combined single limit. Such insurance shall include coverage for owned, hired and non -owned automobiles. c. Worker's Compensation Insurance. In accordance with the provisions of Section 3300 of the Labor Code, AUDITOR, if AUDITOR has any employees, is required to be insured against liability for worker's compensation or to undertake self-insurance. Prior to commencing the performance of the work under this Agreement, AUDITOR agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. d. Professional liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim, and $2,000,000 in the aggregate. section: e. The following requirements apply to the insurance to be provided by AUDITOR pursuant to this (i) AUDITOR shall maintain all insurance required above in full force and effect for the entire period covered by this Agreement. (ii) Certificates of insurance shall be furnished to the CITY upon execution of this Agreement and shall be approved in form by the City Attorney. (iii) Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the CITY. I. If AUDITOR fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the CITY with required proof that insurance has been procured and is in force and paid for, the CITY shall have the right, at the CITY's election, to forthwith terminate this Agreement. Such termination shall not effect AUDITOR's right to be paid for its time and materials expended prior to notification of termination. AUDITOR waives the right to receive compensation and agrees to indemnify the CITY for any work performed prior to approval of insurance by the CITY. S. INDEMNIFICATION AUDITOR agrees to and shall indemnify and hold harmless the CITY, its officers, agents, employees, consultants, special counsel, and representatives from liability: (1) for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including death, and claims for property damage, which may arise from the negligence, recklessness or willful misconduct of the AUDITOR or its contractors, subcontractors, agents, employees, or other persons acting on their behalf which relates to the services described in section I of this Agreement; and (2) from any claim that personal injury, damages, just compensation, restitution, judicial or equitable relief is due by reason of the negligence, recklessness or willful misconduct of AUDITOR arising from this Agreement. The AUDITOR further agrees to indemnify, hold harmless, and pay all costs for the defense of the CITY, including fees and costs for special counsel to be selected by the CITY, regarding any action by a third party asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the 14 terms of, or effects arising from this Agreement. CITY may make all reasonable decisions with respect to its representation in any legal proceeding. 9. CONFIDENTIALITY All information gained by AUDITOR in performance of this Agreement shall be considered confidential and shall not be released by AUDITOR without CITY'S prior written authorization excepting that information which is a public record and subject to disclosure pursuant to the California Public Records Act, government Code Section 6250 et sec. AUDITOR, its officers, employees, agents, or subcontractors, shall not voluntarily provide declarations, letters of support, testimony at depositions, response to interrogatories or other information concerning the project or cooperate in any way with a party who may be adverse to CITY or whom AUDITOR reasonably should know may be adverse in any subsequent litigation. AUDITOR shall incur no liability under this Agreement for materials submitted by it which are later released by CITY, its officers, employees, or agents. AUDITOR shall also incur no liability for statements made by it at any public meeting, or for any document released by it for which prior written CITY authorization was obtained. If AUDITOR or any of its officers, employees, consultants, or subcontractors does voluntarily provide information in violation of this Agreement, CITY has the right to reimbursement and indemnity from AUDITOR for any damages caused by AUDITOR'S conduct --including attorney's fees. AUDITOR shall promptly notify CITY should AUDITOR, its officers, employees, agents or subcontractors be served with any Summons, Complaint, Subpoena, Notice of Deposition, Request for Documents, Interrogatories, Request for Admissions or other discovery requests from any party regarding this agreement and the work performed hereunder. CITY retains the right, but not the obligation, to represent AUDITOR and/or to be present at any deposition, hearing, or similar proceeding. AUDITOR agrees to cooperate fully with CITY and to provide CITY with the opportunity to review any response to discovery requests provided by AUDITOR. However, CITY'S right to review any such response does not imply or mean the right by CITY to control, direct, or rewrite said response. CITY warrants that AUDITOR will have fully met the requirements of this provision by obtaining CITY'S written approval prior to providing documents, testimony, or declarations; Consulting with CITY before responding to a Subpoena or court order; in the case of depositions upon providing Notice to CITY of same; or providing CITY opportunity to review discovery responses prior submission. For purposes of this section, a written authorization from CITY shall include a "faxed" letter. 10. CONFLICT OF INTEREST CLAUSE AUDITOR covenants that neither it nor any officer or principal of their firm have any interests, nor shall they acquire any interest, directly or indirectly which will conflict in any manner or degree with the performance of their services hereunder. AUDITOR further covenants that in the performance of this Agreement, no person having such interest shall be employed by them as an officer, employee, agent, or subcontractor. 11. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by facsimile or other telegraphic communication in the manner provided in this Section, to the following persons: 15 To CITY: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, CA 92702-1988 facsimile (714) 647-6956 With courtesy copies to: and To AUDITOR: Executive Director of the Finance and Management Services Agency City of Santa Ana 20 Civic Center Plaza (M-17) P.O. Box 1988 Santa Ana, California 92702 facsimile (714) 647-5414 City Attorney City of Santa Ana 20 Civic Center Plaza (M-29) P.O. Box 1988 Santa Ana, California 92702 facsimile (714) 647-6515 A party may change its address by giving notice in writing to the other party. Thereafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by facsimile, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 12. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the CITY and AUDITOR, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the CITY and by an authorized representative of AUDITOR. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate AUDITOR nor the CITY. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 13. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of AUDITOR, AUDITOR may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the CITY and any such assignment, transfer, delegation or subcontract without the CITY's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the CITY's ability to have any of the services which are the subject to this Agreement performed by CITY personnel or by other consultants retained by CITY. 16 14. TERMINATION If, at any time during the term of this Agreement, CITY determines that AUDITOR is not faithfully abiding by any term or condition contained herein, CITY may notify AUDITOR in writing of such defect or failure to perform; which notice must give AUDITOR a ten (10) -day notice of time thereafter in which to perform said work or cure the deficiency. If AUDITOR has not performed the work or cured the deficiency within the ten (10) days specified in the notice, such shall constitute a breach of this Agreement and CITY may terminate this Agreement immediately by written notice to the AUDITOR to said effect. Thereafter, neither party shall have any further duties, obligations, responsibilities or rights under this Agreement except, however, any and all obligations of AUDITOR'S surety shall remain in full force and effect, and shall not be extinguished, reduced, or in any manner waived by the termination hereof. In said event, AUDITOR shall be entitled to the reasonable value of its services performed from the beginning of the period in which the breach occurs up to the day it received CITY'S Notice of Termination, less any offset from such payment representing the CITY'S damages from such breach. CITY reserves the right to delay any such payment until completion or confirmed abandonment of the project, as may be determined in the CITY'S sole discretion, so as to permit a full and complete accounting of costs. hi no event, however, shall AUDITOR be entitled to receive in excess of the compensation quoted in its bid 15. ATTORNEYSFEES In the event an action is commenced by either party to enforce any rights under this Agreement, the prevailing party shall be entitled to recover reasonable attorney's fees and court costs, in addition to any other relief granted by the Court. 16. DISCRIMINATION AUDITOR shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. AUDITOR affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 17. JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 18. PROFESSIONAL LICENSES AUDITOR shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. AUDITOR shall notify the CITY immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 19. MISCELLANEOUS PROVISIONS a. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully, including reasonable costs and attorney's fees, for any injuries or damages to CITY in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. 17 b. Captions and headings in this Agreement, including the title of this Agreement, are for convenience only and are not to be considered in construing this Agreement. c. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. CITY OF SANTA ANA ATTEST: Clerk of the Council City Manager APPROVED AS TO FORM: City Attorney By: AUDITOR 18 EXHIBIT B CITY OF SANTA ANA REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES REFERENCES List and describe fully the contracts performed by your firm which demonstrate your ability to provide the supplies, equipment or services included in the scope of the proposal specifications. Attach additional pages if required. The City reserves the right to contact each of the references listed for additional information regarding your firm's qualifications. Reference Customer Address: Contract Amount: Description of supplies, equipment, or services provided: Reference Customer Address: Contract Amount: Description of supplies, equipment, or services provided: Reference Customer Address: Contract Amount: Description of supplies, equipment, or services provided: Contact Individual: Phone Number: Facsimile Number: Year: Contact Individual: Phone Number: Facsimile Number: Year: Contact Individual: Phone Number: Facsimile Number: Year: THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. 19 EXHIBIT C CITY OF SANTA ANA REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES PROPOSER'S STATEMENT Proposer understands and agrees that this written RFP (or any part thereof specifically designated and accepted by the City of Santa Ana, hereinafter City) shall constitute the entire agreement between proposer and the City only after it has been accepted by the City Council, endorsed by the Clerk of the Council with her signature and official seal noting hereon the action of approval of the Council, signed by the Executive Director or his duly authorized agent, and signed by the City Attorney, denoting his approval of the form of this document, and its execution, and when it or an exact copy of it has been either delivered to proposer or deposited with the United States Postal Service properly addressed to the proposer with the correct postage affixed thereto. Proposer further agrees that upon delivery (as defined above) of the accepted agreement he/she will furnish City all required bonds and certificate of liability insurance within ten (10) days (excluding Saturdays, Sundays and City's legal holidays), or the funds, check, draft, or proposer's bond substituted in lieu thereof accompanying this proposal shall become the property of the City and shall be considered as payment of damages due to the delay and other causes suffered by City because of the failure to furnish the necessary bonds and because it is distinctly agreed that the proof of damages actually suffered by City is difficult to ascertain; otherwise said funds, check drafts, or proposer's bond substituted in lieu thereof shall be returned to the undersigned. Proposer understands that a proposal is required for the entire work, that the estimated quantities set forth in the RFP schedule are solely for the purpose of comparing proposals, and that final compensation under the contract will be based upon the actual quantities of work satisfactorily completed. All terms contained in the specifications, the certification of nondiscrimination by contractors, and the required insurance certificates are to be incorporated by reference into this agreement and are made specifically as part of this RFP. Signed and Printed Name: Title Date THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. 20 EXHIBIT D CITY OF SANTA ANA REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES NONCOLLUSION AFFIDAVIT NON -COLLUSION AFFIDAVIT (Title 23 United States Code Section 112 and Public Contract Code Section 7106) To the CITY OF SANTA ANA In accordance with Title 23 United States Code Section 112 and Public Contract Code 7106 the proposer declares that the proposal is not made in the interest of, or on behalf of, any undisclosed person, partnership, company, association, organization, or corporation; that the proposal is genuine and not collusive or sham; that the proposer has not directly or indirectly induced or solicited any other proposer to put in a false or sham proposal, and has not directly or indirectly colluded, conspired, connived or agreed with any proposer or anyone else to put in a sham proposal, or that anyone shall refrain from bidding; that the proposer has not in any manner, directly or indirectly, sought by agreement, communication, or conference with anyone to fix the proposal price of the proposer or any proposer, or to fix any overhead, profit, or cost element of the proposal price, or of that of any other proposer, or to secure any advantage against the public body awarding the contract of anyone interested in the proposed contract; that all statements contained in the proposal are true; and, further, that the proposer has not, directly or indirectly, submitted his or her proposal price or any breakdown thereof, or the contents thereof, or divulged information or data relative thereto, or paid, and will not pay, any fee to any corporation, partnership, company association, organization, bid depository, or to any member or agent thereof to effectuate a collusive or sham proposal. Note: The above noncollusion affidavit is part of the proposal. Signing this proposal on the signature portion thereof shall also constitute signature of this noncollusion affidavit. Proposers are cautioned that making a false certification may subject the certifier to criminal prosecution. State of California, County of Subscribed and sworn to (or affirmed) before me on this day of , 20 , by , proved to me on the basis of satisfactory evidence to be the person(s) who appeared before me. Notary Public Signature Notary Public Seal THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. 21 CITY OF SANTA ANA PROFESSIONAL AUDITING SERVICES PROPOSAL RFP 16-014 FOR THE TWO YEARS ENDING JUNE 30, 2017 (WITH AN OPTION FOR THE TWO YEARS ENDING JUNE 30, 2019) Submitted By: TITLE PAGE RFP Subject: Certified Audits on the City of Santa Ana For the Two Years Ending June 30, 2017 (With an Option for the Two Years Ending June 30, 2019) Name of Proposer: White Nelson Diehl Evans LLP Certified Public Accountants and Consultants Local Address: 2875 Michelle Drive, Suite 300 Irvine, CA 92606-5165 Telephone: (714) 978-1300 Fax: (714) 978-7893 Federal Identification Number: 33-0686301 California CPA License Number: PAR 6123 Website: www.wndecpa.com Email: npatel@wndecpa.com Contact Persons: Nitin P. Patel, CPA Engagement Partner Daphnie Munoz, CPA Partner Date: March 4, 2016 CITY OF SANTA ANA TABLE OF CONTENTS March 4. 2016 Page Number Letter of Transmittal 1-2 Firm Profile and Qualifications: Firm Organization Chart 3 Licensing and Independence 4 Size and Location of Firm 4 Range of Activities 4 Participation in "Quality Review" Programs 5 Education Programs 5 Participation in Professional Organizations 6 GFOA Awa rd Program 7 Computer Auditing Capabilities 8 Insurance 8 Partner, Supervisory and Staff Qualifications and Experience: Audit Team 9 Commitment Related To Personnel 9 Nondiscrimination Policy 9 Resumes of Audit Team Personnel 10-16 Firm Experience with Governmental Entities: Similar Engagements with Other Municipal Entities 17-18 City Client References 18 Enterprise Fund Experience 19 Single Audit Experience 20 Experience with Preparation of State -Mandated Reports 20 Special Districts 21 Nonprofit Corporations and Joint Power Authorities 21 Scope of Work, Timing and Audit Approach: Entities to Be Included in Audit 22 Reports to Be Issued and Due Dates 22 Audit Timing 23 Commitment to Deliver Reports on a Timely Basis 23 Audits to Be in Accordance with GAAS and Other Requirements 23-24 Audit Approach 24-25 Audit Approach Redevelopment Agency/Successor Agency 26 Approach to Internal Control 26 Single Audit Approach 27 Determining Laws and Regulations Subject to Audit 27 CITY OF SANTA ANA TABLE OF CONTENTS (CONTINUED) March 4, 2016 Discussion of Relevant Accounting Issues: Page GASB Statement No. 72 Number Scope of Work, Timing and Audit Approach (Continued): 30 Method of Sampling 27 Analytical Procedures 28 Management Letters 28 Potential Audit Problems 28 Retention of and Access to Audit Workpapers 28 Other Professional Services 28 Irregularities and Illegal Acts 28 Segmentation of the Audit Hours, By Partner and Staff Level 29 Segmentation of the Audit Hours, By Phases of the Audit 29 Discussion of Relevant Accounting Issues: GASB Statement No. 72 30 GASB Statement No. 73 30 GASB Statement No. 74 30 GASB Statement No. 75 30 GASB Statement No. 76 31 GASB Statement No. 77 31 GASB Statement No. 78 31 GASB Statement No. 79 31 Work Required by City Staff 32 Consulting Services Department: Overview of Services Provided 33 Attachment I: Current City Client References Lists of City and Special District Engagements - Performed in the Last 5 Years Attachment II - Results of Outside Quality Review Attachment III - Documents Requested in Request for Proposal: Exhibit B - References Exhibit C - Proposer's Statement Exhibit D - Noncollusion Affidavit March 4, 2016 Mr. Sergio Vidal, Assistant Director of Finance and Management Services Agency City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 Dear Mr. Vidal: We are pleased to present our proposal to serve as independent auditors for the City of Santa Ana. We have prepared this information in accordance with the guidelines set forth in your request for proposal. Who We Are White Nelson Diehl Evans LLP is a California certified public accounting and consulting firm with offices in Irvine, Carlsbad and Escondido. Our firm has specialized in providing services to the governmental industry for over 80 years and has no intentions of discontinuing these services. Why We Are The Best Qualified Firm We consider ourselves to be the best qualified firm to perform auditing and accounting services for the City of Santa Ana. Please consider these qualifications: • A significant part of our practice is devoted to providing professional services to the governmental industry and over the past year, the firm provided services to approximately 100 governmental organizations and on an annual basis our firm issues over 150 reports on audits of local governmental agencies including, Cities, the Successor Agency to Redevelopment Agencies, Special Districts and Joint Power Authorities. • Our firm has devoted a substantial amount of time and resources in order to provide governmental agencies with quality audits. Our knowledge of the industry is best demonstrated by the fact that our clients who apply for the "Certificate of Achievement in Financial Reporting' Issued by the Government Finance Officers Association (GFOA) consistently receive that award. A list of these clients is presented on page 7 of this proposal. • We are in a professional alliance with BDO Seidman, a National Accounting Firm, and a network of accounting firms allowing us the ability to provide quality attestation services. The BDO Alliance provides us access to BDO's personnel and technical resources which allows White Nelson Diehl Evans LLP to deliver the range of services and capabilities of a large national firm, including the use of specialists to support the needs of our clients. • We are a full service CPA firm. Our Consulting Services Department can provide the City with a variety of services, including investment policy compliance reviews, litigation support, dispute resolution services, and consulting on a wide array of governmental issues. • Our audits include extensive use of information technology as described in detail on page 8 of this proposal. 2875 Michelle Drive, inure 300, Irvine, CA 92606 • Tel: 714.978.1300 •Fax: 714.978,7893 OP,ej located an Onu?ge marl Slue Diego Counties Why We Are The Best Qualified Firm (Continued) We understand that we provide a service to the City. We are committed to providing an effective and efficient audit that will meet the proposed timing of the project deliverables by assigning experienced governmental auditors. Understanding the size of the City of Santa Ana and the scope of work requested in the proposal, we are proposing an engagement team with extensive governmental audit experience. The staffing plan includes two partners, Nitin Patel, CPA, the engagement partner with 30 years of experience and Daphnie Munoz, CPA, a partner with 18 years of experience, two managers, Kassie Radermacher, CPA and Robert Perl, CPA, with 11 and 10 years of experience, respectively, who will manage the audit and two supervisors, Tiffany Fung, CPA and Jesse Pattison, CPA, with 6 and 5 years of experience, respectively, who will be on-site supervising and performing the audit fieldwork. We are confident that the proposed staffing plan with an engagement team experienced in governmental audits and who are familiar with municipal procedures will result in an effective and efficient audit that meets the project timing and deliverables requirements with minimum disruption to your staff. The scope of our services for the two years ending June 30, 2017 would be as follows: • A financial audit of the basic financial statements of the City of Santa Ana, including the Successor Agency and Housing Authority's transactions, in accordance in with auditing standards generally accepted in the United States of America and Government Auditing Standards issued by the Comptroller General of the United States, to be included in the Comprehensive Annual Financial Report (CAFR), and assistance with the finalization of the CAFR. • A Single Audit of Federal Grants to be performed to meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirementfor Federal Awards (Uniform Guidance). • A financial and compliance audit of the Air Quality Improvement Fund. • An agreed-upon procedures review of the calculation of the City's GANN Appropriations Limit (GANN), as required by Section 1.5 of Article XIIIB of the California Constitution. • A compliance review of the City's Investment Policy. • Preparation and submission of the Sana Ana Housing Authority's Financial Data Schedule • Preparation and submission of the City's annual State Controller's Report. • Two agreed-upon procedures reviews annualy regarding the City's internal control processes. • A management letter containing any comments or recommendations resulting from our review of the systems of internal controls in connection with the financial audits. • A report communicating information related to the audit to those in charge of governance at the conclusion of the audits. We make a commitment to deliver all necessary reports based on the timetable presented herein on page 22. Also, a more detailed discussion of our understanding of the work to be performed is set forth on pages 22 through 29. Our goal is to provide the City with the highest quality of service, including a CAFR which meets all required reporting standards. We are confident that our service and experience will be of benefit to the City and will provide added value over and above the performance of the audit itself. Throughout the year, you should feel comfortable in calling us for advice regarding accounting and auditing matters, as we are never too busy to meet the needs of our clients. We thank the City for the opportunity to present our proposal. Please feel free to contact me, or Ms. Daphnie Munoz, CPA, , at (714) 978-1300 if you have any questions. This proposal constitutes a firm and irrevocable offer for 90 days from the date of this letter. Ms. Munoz and I are authorized to represent our firm, and bind the firm to a contract. Very truly yours, WHITE NELSON DIEHL EVANS LLP ,. 0 Pra'L Nitin R Patel, CPA Engagement Partner FIRM PROFILE AND QUALIFICATIONS FIRM ORGANIZATION CHART ` A/R Audit Department;,,Tax Department Partners 11.= -Partners 11 -Supervisory Staff 14 Consulting Division -Supervisory Staff 15 Seniors and Staff -Seniors and Staff Accountants 23 Accountants 34 l i * The staffing levels described above have remained fairly constant for the past four years. 3 LICENSING AND INDEPENDENCE Our firm, and all of our certified personnel, are properly licensed to practice public accounting in California. Also, we meet the independence requirements of "Government Auditing Standards", as published by the U.S. General Accountability Office. We have no conflict of interest with the City and will provide written notice to the City of any professional relationships contemplated with the City during our term as auditors. We have not provided auditing or any other services to the City during the past five years. SIZE AND LOCATION OF THE FIRM White Nelson Diehl Evans LLP is a California accounting firm with offices in Irvine, Carlsbad and Escondido. Our firm has approximately 140 employees, which includes 22 partners with separate assurance and tax departments. Your City would be served by the assurance department from our Irvine office, which has approximately 48 professional staff members, including 11 partners, and 14 managers and supervisors. The Irvine Office assurance department staff with governmental experience consists of four partners, four managers, seven supervisors, six seniors and twelve staff accountants. White Nelson Diehl Evans LLP has extensive experience in providing auditing, accounting and consulting services in the governmental sector. Over twenty thousand hours per year are devoted to this area of our practice for over 100 governmental units including cities, successor agencies, special districts, nonprofit corporations and joint power authorities. RANGE OF ACTIVITIES White Nelson Diehl Evans LLP is a full service CPA firm. We offer a broad range of services, including: Certified Audits Tax Planning and Consulting Compilations and Reviews Income Tax Preparation and Representation Agreed -Upon Procedure Reviews Consulting Services Financial Services Litigation Support Services Our specific services available to governmental agencies are more fully set forth in this proposal. 2 PARTICIPATION IN "QUALITY REVIEW" PROGRAMS In July 2015, our firm underwent a quality review, by an independent CPA firm, under provisions of the AICPA Quality Review Program. This review is required every three years and covered our audits of governmental agencies. A final report dated July 22, 2015 with a pass rating on our systems and procedures was received. A copy of the independent CPA firm's report is included herein at Attachment ll. Accordingly, we are confident that our current auditing standards and techniques meet all existing requirements. No regulatory action has ever been taken against any office of our firm due to substandard work. We had no significant deficiencies noted in any federal or state desk reviews over the past three years. EDUCATION PROGRAMS White Nelson Diehl Evans LLP has a formal continuing education program. All firm auditors are required to obtain 80 hours of continuing education every two years in the accounting and auditing area as required by Government Auditing Standards, and at least 24 hours of government related continuing education courses. Our staff is continually expanding their knowledge of the governmental industry through our in-house training programs, programs offered by the AICPA, GFOA, the California Society of Certified Public Accountants and other professional organizations, and through on-the-job training. Noted below is a description of certain in-house education courses taken by our partners and staff to meet the governmental continuing education requirements. All personnel involved with governmental auditing are required to attend these courses. • Understanding the Risk Assessment Standards • Understanding of GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments • Understanding, and Auditing, Deposits and Investments of California Governmental Units • Reviews of Internal Controls in Accordance With Statements on Auditing Standards • Assessing Audit Risk and Materiality in Conducting An Audit • Consideration of Fraud in a Financial Statement Audit • Computer Auditing in the Governmental Environment • The Single Audit - New Provisions under Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirement for Federal Awards (Uniform Guidance). • Laws and Regulations in the Government Sector • Understanding GASB Statement 54 related to Fund Balance Reporting and Governmental Fund Type Definitions • Understanding GASB Statement 65 related to reporting of Deferred Outflows and Deferred Inflows of Resources • Understanding the new GASB Pension Standards PARTICIPATION IN PROFESSIONAL ORGANIZATIONS Our partners and staff are actively involved in professional organizations in the governmental accounting field. Noted below is a summary of our participation in various national and California governmental organizations. AICPA Our firm is a member of the AICPA Governmental Audit Quality Center. The Center is a firm -based voluntary membership Center whose primary purpose is to promote the importance of quality governmental audits to purchasers of governmental audit services. The Center provides members with an online forum tool for sharing best practices, as well as discussions on audit, accounting, and regulatory issues. As a member of the Center, the firm receives updates on changes in auditing and accounting standards that effect governmental audits. The quality control partner is required to attend an annual web cast to discuss auditing and reporting issues effecting governmental audits. Our firm uses the resources of the Center to maintain the quality of our governmental audits. GFOA, GASB and FASB Our firm is an associate member of the Government Finance Officers Association of the United States and Canada (GFOA). Also, we have web based access to the latest pronouncements issued by the Governmental Accounting Standards Board (GASB) and the Financial Accounting Standard Board (FASB), including Interpretations, Technical Pronouncements and Newsletters. We regularly analyze these pronouncements and advise our governmental clients of changes in accounting rules. CSMFO Our Irvine office partners and our Director of Consulting Services are associate members of the California Society of Municipal Finance Officers (CSMFO). Our personnel regularly attend local CSMFO chapter meetings throughout Southern California, and the annual statewide conference. We often provide public speakers for these meetings. CSCPA Several partners and principals of the firm have been members of the Governmental Accounting and Auditing (GAA) Committee of the Orange County Chapter of the California Society of Certified Public Accountants (CSCPA). Mr. Patel, Mr. Ludin and Mr. Morgan have each served as chairman of this committee. Firm personnel have been involved over the years in preparing position papers issued for professional organizations on governmental accounting matters. Currently, Mr. Patel and Mr. Callanan are members of the State Governmental Accounting and Auditing Committee. 11 GFOA AWARD PROGRAM The partner and manager will be involved in all phases of report preparation or review. Reporting checklists will be used to assure compliance with all reporting requirements. In addition, another member of the firm, not associated with the audit, and with extensive governmental auditing and accounting experience, will review each financial statement audited and related reports. Based on the high quality of our review process, we have been able to assist various clients in obtaining the GFOA "Certificate of Achievement for Excellence in Financial Reporting". The recent clients that have received the award are: Cities: Cities (Continued): Alhambra Palm Desert Bellflower Pico Rivera Beverly Hills Rancho Santa Margarita Burbank San Buenaventura Camarillo San Gabriel Campbell Sanger Colton Signal Hill Costa Mesa Stanton Cypress Tustin Del Mar West Covina Downey West Hollywood Fountain Valley Westminster Gilroy Goleta Special Districts: Hawaiian Gardens Costa Mesa Sanitary District Highland Inland Empire Utilities Agency Lake Forest Las Virgenes Municipal Water District Lakewood Olivenhain Municipal Water District Lancaster Otay Water District Newport Beach Rancho California Water District Santa Ana Watershed Project Authority Yorba Linda Water District 7 COMPUTER AUDITING CAPABILITIES White Nelson Diehl Evans LLP uses technology to make the audit process more effective. We utilize a paperless audit software, ProSystem fx Engagement, which allows us to manage our audit documentation electronically. Some of the benefits of paperless audit are: • Receive the City's schedules in either hard copy or electronic format. • Import and integrate trial balance data from virtually any accounting system. We avoid the time and expense of keying in account numbers, descriptions and account balances. We simply take your electronic trial balance and import it directly into our audit software. • Create our own lead sheets, which can include prior year balances. This helps us to easily identify significant fluctuations between fiscal years. • CAFR schedules are linked to trial balances. CAFR is updated automatically for any last minute journal entries, if any. Our approach includes using IDEA (Interactive Data Extraction and Analysis) which is a data analysis software that can be used to analyze large amounts of information. It allows the firm to extract data from the City's accounting records to tailor specific audit tests based on risk assessments. Some audit procedures that IDEA can be utilized for are: • Mechanical accuracy of worksheets or general ledgers. • Exception and gap/completeness testing for missing check numbers. • Cross checking different data bases for common information such as employee names. • Duplicate testing of invoice numbers. • Completeness of general ledger balances. The firm also has document management software which allows our clients to access our web portal. We utilize the web portal to transfer data files that are confidential or too large to be sent by e-mail. INSURANCE The firm has the following insurance coverage: (1) Section 7 of the sample contract requires $2,000,000 combined limit for automobile insurance. We would request the City accept our existing automobile liability insurance. Each Occurrence Aggregate Insurance Type Limit Limit Deductible Umbrella Policy $ 4,000,000 $ 4,000,000 $ 10,000 General Liability 1,000,000 2,000,000 - Auto Liability - Hired & Nonowned (1) 1,000,000 1,000,000 Workers' Compensation 1,000,000 1,000,000 - Professional Liability 5,000,000 10,000,000 100,000 (1) Section 7 of the sample contract requires $2,000,000 combined limit for automobile insurance. We would request the City accept our existing automobile liability insurance. PARTNER SUPERVISORY AND STAFF QUALIFICATIONS AND EXPERIENCE AUDIT TEAM The audit team assembled consists of individuals who have extensive experience auditing governmental agencies and are familiar with municipal accounting. In addition, each team member's skill and experience developed working in other industries our firm serves can be applied to the individual requirements of the City of Santa Ana. The personnel assigned to the engagement team are as follows: The engagement partner will be Mr. Nitin P. Patel, CPA.. Mr. Patel has over 30 years of experience with audits of local governments. He will be involved with all phases of the audit including (a) the planning phase of the audit to assess risks related to the audit (b) a final review of all the work papers and financial reports, and (c) attending any meetings with City's management and City council at the conclusion of the audit. He will be responsible for assuring that all work for the City is performed in a complete and timely manner. Ms. Daphnie Munoz, CPA, will be the partner in charge of the Single Audit. Ms. Munoz has over 18 years of experience with audits of local governments. She will perform a detailed review of the Single Audit workpapers and assure the Single Audit is completed in a timely manner. Mr. Robert J. Callanan, CPA, will be the Technical Review Partner and will perform a quality review of all reports issued in connection with the audit. Mr Callanan has over 26 years of experience with audits of local governments. He will also consult on the accounting treatment of unusual transactions or audit issues. Ms. Kassie Radermacher, CPA will serve as the senior audit manager. Ms. Radermacher has over 11 years of experience with audits of local governments. She will be the primary contact for the City and related audits. Mr. Robert Perl, CPA, will serve as the audit manager responsible for the Single Audit and related reports. Mr. Perl has over 10 years of experience with audits of local governments. They will (a) perform the initial review of the work papers including a review of the work completed related to internal controls, (b) supervise the completion of the financial reports and management letter and (c) assist in the audit of any complex or unusual audit areas. The audit supervisors will be Ms. Tiffany Fung, CPA and Mr. Jesse Pattison, CPA. They have 6 and 5 years of experience with audits of local governments. They will be on-site supervising staff accountants and performing the fieldwork including performing tests of internal controls, substantive tests of account balances, and analytical tests. Resumes for the above partners and personnel are included at pages 10 through 16 COMMITMENT RELATED TO PERSONNEL We make a commitment to retain the same personnel on the City from year to year, except where such personnel leave the firm, or where the change is approved by the City. If a staff member is replaced, we make a commitment to replace that person with staff of at least equal experience. NONDISCRIMINATION POLICY Our firm has a policy to provide equal employment opportunities to all qualified persons without regard to race, color, age, sex, religion, national origin or handicap. P NITIN P. PATEL, CPA Position Engagement Partner Education University of California at Irvine, Bachelor of Arts in Economics California State University at Long Beach Masters of Accounting Program Licensing Certified Public Accountant in California since 1988 Professional Organizations American Institute of Certified Public Accountants California Society of Certified Public Accountants California Society of Municipal Finance Officers (CSMFO) - Associate Member Governmental Accounting and Auditing Committee of Orange County - Committee Chairman (2001-2002) California Governmental Accounting and Auditing Committee Member Range of Experience Has been with the firm since 1986 with emphasis in governmental accounting and financial reporting and is responsible for firm's in-house governmental accounting and auditing training programs. Experience includes supervision of over one hundred audits of governmental agencies including cities, successor agencies/redevelopment agencies, non-profit corporations, joint powers authorities and special districts. CSMFO Report Reviewer for Award Program. GFOA Report Reviewer for Award Program - Certificate of Achievement for Excellence in Financial Reporting. Other experience includes providing consulting services for governmental agencies including special internal control reviews, cost allocation plans, cable television rate reviews, reviews of City Treasurer operations and transient occupancy tax reviews of city hotels/motels. Mr. Patel was the engagement partner on the following local government audits in 2015: Cities: Cities (Continued): Alhambra Stanton Artesia West Hollywood Bellflower Westminster Burbank Colton Special Districts: Costa Mesa Chino Basin Desalter Authority Cypress Costa Mesa Sanitary District Gilroy Cypress Recreation and Park District Lake Forest Inland Empire Regional Composting Authority Laguna Hills Inland Empire Utilities Agency Laguna Woods La Habra Heights County Water District Newport Beach La Puente Valley County Water District Norwalk Orchard Dale Water District Palm Desert Rancho California Water District Rialto Yorba Linda Water District San Gabriel Continuing Professional Education Total hours were 186 in the last three years, of which 144 hours were for meeting the requirements of the Government Audit Standards. 10 DAPHNIE MUNOZ, CPA Position Partner Education De La Salle University, Philippines Bachelor of Science in Accounting, 1995 Licensing Certified Public Accountant in California since 2001 Professional Organizations American Institute of Certified Public Accountants California Society of Certified Public Accountants California Society of Municipal Finance Officers (CSMFO) Range of Experience Has been with the firm since 1998 with emphasis in governmental accounting and financial reporting. Other experience includes providing consulting services for governmental agencies including special internal control reviews, and transient occupancy tax reviews of city hotels/motels. CSMFO Report Reviewer for Award Program. GFOA Report Reviewer for Award Program - Certificate of Achievement for Excellence in Financial Reporting. Speaker on numerous presentations of accounting, auditing, tax and personnel topics at in-house training programs and instructor at firm's in-house governmental accounting and auditing seminars. Experience includes of audits of various governmental agencies including cities, successor agencies/redevelopment agencies, water districts, other special districts, non-profit corporations and joint power authorities, including: Cities: Cities (Continued): Alhambra Tustin Buena Park West Covina Burbank West Hollywood Colton Westminster Diamond Bar Downey Special Districts: Goleta Chino Basin Desalter Authority Healdsburg Coachella Valley Association of Governments Highland Downey Cemetery District Huntington Beach EI Toro Water District Irvine Inland Empire Regional Composting Authority Lake Elsinore Inland Empire Utilities Agency Lancaster Laguna Beach County Water District Mission Viejo Las Virgenes Municipal Water District Newport Beach Midway City Sanitary District Oceanside Municipal Water District of Orange County Palm Desert Orange County Water District Pico Rivera Placentia Library District San Buenaventura Rancho California Water District San Fernando South Coast Water District Sanger Southeast Area Animal Control Authority Santa Clarita Ventura Port District Yorba Linda Water District Continuing Professional Education Total hours were 177 in the last three years, of which 151 hours were for meeting the requirements of the Government Audit Standards. 11 ROBERT J. CALLANAN, CPA Position Technical Review Partner Education Aquinas College, Grand Rapids, Michigan Bachelor of Arts, Business Administration, 1988 Bachelor of Science, Accounting, 1988 Licensing Certified Public Accountant in California since 1993 Professional Organizations American Institute of Certified Public Accountants - Member California Society of Certified Public Accountants - Member California Society of Municipal Finance Officers (CSMFO) - Associate Member California Governmental Accounting and Auditing Committee Member Range of Experience Twenty-six years with the firm specializing in governmental audit, accounting, and consulting services. Two years of experience as Chief Financial Officer of a mortgage lending corporation. Responsible for the firm's in-house governmental accounting and auditing training programs. GFOA Report Reviewer for Award Program - Certificate of Achievement for Excellence in Financial Reporting. Mr. Callanan was the engagement partner on the following local government audits in 2015: Cities: Camarillo Campbell Del Mar Hawaiian Gardens Norco Pico Rivera Rancho Santa Margarita San Buenaventura Special Districts: Laguna Beach County Water District Pico Rivera Water Authority Pomona -Walnut -Rowland Joint Water Line Commission Rowland Water District Southeast Water Coalition Sunset Beach Sanitary District Surfside Colony Stormwater Protection District Surfside Community Services District Ventura Port District Continuing Professional Education Total hours were 209 in the last three years, of which 157 hours were for meeting the requirements of the Government Audit Standards. 12 KASSIE RADERMACHER, CPA Position Senior Audit Manager Education West Virginia University Masters of Professional Accountancy, 2005 Bachelor of Science, 2003 Licensin¢ Certified Public Accountant in California since 2010 Certified Public Accountant in Virginia since 2006 Professional Organizations California Society of Certified Public Accountants (CSCPA) Range of Experience Ms. Radermacher has been with the firm since June 2009. Ms. Radermacher has performed all phases of local governmental audits including cities, successor agencies/redevelopment agencies, single audit of federal grants, special districts, compliance audits and agreed-upon procedures engagements. As an audit manager, she is involved with planning the audit, performing fieldwork for all aspects of the audit, supervising staff accountants and preparation of financial statements. Ms. Radermacher served as the Audit Manager on the following local government audits in 2015: City of Artesia City of Bellflower City of Cypress City of Fountain Valley City of Laguna Hills City of Lake Forest City of Newport Beach City of Norwalk City of Rancho Santa Margarita City of Rialto City of San Gabriel City of Stanton La Puente Valley County Water District Lake Elsinore & San Jacinto Watersheds Authority Local Agency Formation Commission (LAFCO) - Orange County Midway City sanitary District Orchard Dale Water District Orange County Mosquito & Vector Control District Pico Water District Rancho California Water District Santa Ana Watershed Project Authority Yorba Linda Water District Prior to joining the firm, Ms. Radermacher was senior in -charge of compilations, reviews, single audits, and financial audits for non-profit and business clients with Rager, Lehman & Houck, P.C. in Frederick, MD. She was also responsible for educating and monitoring the staff. Continuing Professional Education Total hours were 209 in the last three years, of which 189 hours were for meeting the requirements of the Government Audit Standards. 13 ROBERT PERIL, CPA Position Audit Manager Education Brigham Young University- Hawaii, Laie, Hawaii Bachelors of Accounting, 2006 Licensing Certified Public Accountant in California since October 2010 Mr. Perl has been with the firm since August 5, 2013. Mr. Perl has performed all phases of local governmental audits including cities, successor agencies/redevelopment agencies, single audit of federal grants, special districts, school districts, tribal councils, and compliance audits. As an audit manager, he is involved with planning the audit, performing fieldwork for all aspects of the audit, supervising staff accountants and preparation of financial statements. Mr. Perl served as the Audit Manager on the following local government audits in 2015: City of Burbank City of Gilroy City of Lancaster City of Rialto Monterey Peninsula Regional Park District In recent years, Mr. Perl has also been involved with the following governmental clients: City of Downey Prior to joining the firm, Mr. Perl was also involved with the following governmental clients: City of Arvin City of Delano City of Tehachapi Kern High School District Tule River Tribal Council Continuing Professional Education Total hours were 208 in the last three years, of which 137 hours were for meeting the requirements of the Government Audit Standards. 14 TIFFANY FLING, CPA Position Audit Supervisor Education University of California, Irvine Bachelor of Economics with a minor in Accounting, 2010 Licensin¢ Certified Public Accountant in California since July 2013 Ranee of Experience Ms. Fung has been with the firm since March 2011. Ms. Fung has performed all phases of local governmental audits including cities, successor agencies/redevelopment agencies, single audit of federal grants, special districts, and agreed-upon procedures engagements. As an audit supervisor, she is involved with planning the audit, performing fieldwork for all aspects of the audit, supervising staff accountants and preparation of financial statements. Ms. Fung worked on the following local government audits in 2015: Cities: City of Newport Beach City of Norwalk City of Palm Desert City of San Gabriel City of Westminster Special Districts: Inland Empire Regional Composting Authority Inland Empire Utilities Agency Lake Elsinore & San Jacinto Watersheds Authority Santa Ana Watershed Project Authority In recent years, Ms. Fung has also been involved with the following governmental clients: Cities: City of Avalon City of Colton City of Costa Mesa City of Downey City of Tustin City of West Covina Special Districts: Chino Basin Desalter Authority Costa Mesa Sanitary District EI Toro Water District Laguna Beach County Water District Rancho California Water District South Coast Water District Walnut Valley Water District Continuing Professional Education Total hours were 159 in the last three years, of which 143 hours were for meeting the requirements of the Government Audit Standards. 15 JESSE PATTISON, CPA Position Audit Supervisor Education University of Arizona Masters of Accounting, 2011 Bachelors of Science, 2010 Licensing Certified Public Accountant in California since December 2014 Range of Experience Mr. Pattison has been with the firm since August 2012. Mr. Pattison has performed all phases of audits including Non-profit Corporations, Cities, Single Audit of Federal Grants, Special Districts, Compliance Audits, Business Entities, and Agreed -Upon Procedures engagements. He has been involved with planning the audit, performing fieldwork for all aspects of the audit and preparation of financial statements. Mr. Pattison has been involved with the following Non-profit, Governmental and Business clients: Governmental: Non-profit Corporations: City of Alhambra Boys and Girls Clubs of Garden Grove City of Artesia Casa Romantica City of Bellflower Child Abuse Prevention Center City of Beverly Hills Collwood Terrace City of Burbank Human Options, Inc. City of Gilroy Westview Services, Inc. City of Highland City of Hawaiian Gardens Business Entities: City of La Habra Heights Aubrey Group City of Laguna Hills Ganahl Lumber Company City of Lake Forest Independent Capital Management City of Newport Beach Ironman City of Sanger Kellogg Supply California Joint Powers Insurance LeVecke Corporation Authority Meridian Graphics Los Angeles Local Agency Pacific American Fish, Co. Formation Commission Park West Orchard Dale Water District PGP Title, Inc. Pool Water Products Premier Land Title Insurance Security Signal Devices, Inc. Specialist in Customer Software Styles for Less, Inc. Trussed, Inc. Venus Textiles, Inc. Prior to joining the firm, Mr. Pattison was a staff accountant and performed reviews, single audits, and financial audits for non-profit and business clients with Eide Bailly in Phoenix, Arizona. Continuing Professional Education Total hours were 126 in the last three years, of which 87 hours were for meeting the requirements of the Government Audit Standards. 16 FIRM EXPERIENCE WITH GOVERNMENTAL ENTITIES SIMILAR ENGAGEMENTS WITROTHER MUNICIPAL ENTITIES Your request for proposal called for similar engagements. We are including 10 similar engagements, listed alphabetically with total staff hours. These are set forth below: Total Engagement Staff City Partner Hours Scope of Work Beverly Hills Ludin 785 City and Single Audits Burbank Patel 715 City, AQMD, Water and Utility Enterprise Fund and Single Audits Colton Munoz 705 City, Single and Child Care Program Audits; State Controller's Report Lancaster Callanan 635 City and Single Audits; State Controller's Reports for City and Power Authority Newport Beach Patel 375 City & Single Audits; State Controller's Report Norwalk Patel 810 City, AQMD, Public Financing Authority, Transit Other Component Units and Single Audits; State Controller's Reports - City & Transit Palm Desert Patel 620 City, RDA, Recreation Authority, Housing Authority and Single Audits Rialto Patel 720 City and Single Audits San Buenaventura Callanan 660 City, RDA Public Financing Authority and Single Audits; State Controller's Report Tustin Munoz 615 City, RDA and Single Audits; State Controller's Report Certified audits were performed on the financial statements of all of these cities and their component units for the past year. 17 SIMILAR ENGAGEMENTS WITH OTHER MUNICIPAL ENTITIES (CONTINUED) Client references for the cities listed on page 17 are included below. City of Beverly Hills City of Lancaster Mr. Don Rhoads Ms. Pamela Statsmann Finance Director Assistant Finance Director (310)285-2429 (661)723-6038 City of Burbank City of Newport Beach Mr. Dino Balos Mr. Dan Matusiewicz Accounting Manager Director of Finance (818) 238-5518 (949) 644-3126 City of Camarillo City of Norwalk Mr. Ronnie Campbell Ms. Jana Stuard Finance Director Director of Finance (805) 388-5320 (562) 929-5056 City of Palm Desert Mr. Paul Gibson Director of Finance (760)346-0611 City of Rialto Mr. George Harris, II Director of Administrative and Community Services (909) 421-7219 City of San Buenaventura Ms. Bridgette Mclnally Accounting Manager (805) 654-7892 City of Tustin Ms. Jenny Leisz Finance Manager (714)573-3079 A complete list of similar engagements for the past five years is included in Attachment I of this proposal. CITY CLIENT REFERENCES One means of judging the high quality of our auditing and accounting services would be contact with some of our clients over the past year. We are including the names and phone numbers of the city clients as presented in Attachment I of this proposal. We encourage you to contact any of these individuals and verify our level of service. LU ENTERPRISE FUND EXPERIENCE Most cities audited by our firm have a water utility enterprise fund. Noted below is a partial listing of other enterprise funds audited by our firm in recent years: City Enterprise Alhambra Water, Sewer, Storm Drain, Sanitation, Golf Course Artesia Residential Refuse Service Bellflower Water Beverly Hills Water, Solidwaste, Wastewater, Stormwater Burbank Water Reclamation, Sewer, Golf, Electric Utility Water Utility, Refuse Collection and Disposal Camarillo Water, Sanitary, Solidwaste, Transit Colton Electric Utility, Water Utility, Wastewater Utility Cypress Sewer Del Mar Water, Wastewater, Cleanwater Downey Water, Sewer, Golf Course, Transit System Fountain Valley Water, Solidwaste Gilroy Water, Sewer Hesperia Water, Sewer Laguna Hills Property Leasing Lakewood Water Lancaster Power Authority Newport Beach Water, Sewer Norco Water, Sewer Norwalk Transit System, Water, Sewer, Golf Course Palm Desert Golf Course Pico Rivera Water, Sports Arena, Golf Rialto Airport, Cemetery, Recreation, Wastewater, Water San Buenaventura Water, Sewer Sanger Water, Sewer, Disposal, Ambulance Signal Hill Water Stanton Sewer Tustin Water West Covina Simulator, Computer West Hollywood Sewer District, Sewer Charge, Solid Waste, Landscape District and Street Maintenance Westminster Water 19 SINGLE AUDIT EXPERIENCE We perform single audit services for most of our cities and special districts that receive federal funds as required by the Uniform Guidance. In recent years, Single Audits were performed for the following cities and special districts. Cities: City of Alhambra City of Laguna Woods City of Artesia City of Lake Forest City of Bellflower City of Lakewood City of Beverly Hills City of Lancaster City of Burbank City of Newport Beach City of Camarillo City of Norco City of Campbell City of Norwalk City of Colton City of Palm Desert City of Costa Mesa City of Pico Rivera City of Cypress City of Rancho Santa Margarita City of Del Mar City of Rialto City of Downey City of San Buenaventura City of Fountain Valley City of San Gabriel City of Gilroy City of Sanger City of Goleta City of Signal Hill City of Hawaiian Gardens City of Stanton City of Hesperia City of Tustin City of Highland City of West Covina City of La Habra Heights City of West Hollywood City of Laguna Hills City of Westminster Special Districts: Inland Empire Utilities Agency Las Virgenes Municipal Water District Olivenhain Municipal Water District Rancho California Water District Valley Wide Recreation and Park District EXPERIENCE WITH PREPARATION OF STATE -MANDATED REPORTS We have experience with the preparation of various state -mandated reports, such as the State Controller's Report and the Annual Street Report. Specifically, with regard to cities, we have prepared the state mandated reports, in recent years, for the Cities of Alhambra, Bellflower, Colton, Del Mar, Goleta, La Habra Heights, Laguna Hills, Lancaster, Norco, Norwalk, Pico Rivera, San Buenaventura, Sanger, Tustin and West Hollywood. 20 SPECIAL DISTRICTS Noted below is a listing of special districts audited by our firm in recent years: Borrego Water District Calleguas Municipal Water District Chino Basin Desalter Authority Chino Basin Regional Financing Authority Costa Mesa Sanitary District Cypress Recreation and Park District Downey Cemetery District EI Toro Water District Grossmont Healthcare District Heber Public Utilities District Inland Empire Regional Composting Authority Inland Empire Utilities Agency La Habra Heights County Water District La Puente Valley County Water District Laguna Beach County Water District Lake Elsinore and San Jacinto Joint Powers Authority Las Virgenes Municipal Water District Leucadia Wastewater District Orange County Development Authority - Eco -Rapid Transit Orange County Vector Control District Orchard Dale Water District Otay Water District Padre Dam Municipal Water District Pico Water District Placentia Library District Rancho California Water District Rincon del Diablo Municipal Water District Rowland Water District Santa Ana Watershed Project Authority South Coast Water District South County Regional Wastewater Authority Sunset Beach Sanitary District Surfside Colony Stormwater Drainage District Surfside Community Services District Vallecitos Water District Midway City Sanitary District Valley Wide Recreation and Park District Monterey Peninsula Regional Park District Ventura Port District Olivenhain Municipal Water District Yorba Linda Water District NONPROFIT CORPORTIONS AND JOINT POWER AUTHORITIES Noted below is a partial listing of nonprofit corporations and joint power authorities audited by our firm over the past year. Some of these entities are "component units" which are combined into the basic financial statements of governmental organizations which exercise oversight responsibility. American Family Housing Anaheim District of the Churches of the Nazarene Cal State L.A. Metrolink Authority California Transplant Casa de las Campanas Casa Romantica Cultural Center Child Abuse Prevention Center Palm Desert Recreational Facilities Corporation Pomona -Walnut -Rowland Joint Water Line Commission Public Cable Television Authority The RARE Project Trinity Children's Foundation Trinity Youth Services United Cerebral Palsy Association Valencia Heights Water Company Westview Services, Inc. 21 SCOPE OF WORK, TIMING AND AUDIT APPROACH ENTITIES TO BE INCLUDED IN AUDIT City of Santa Ana Successor Agency to the Community Redevelopment Agency Housing Authority of the City of Santa Anan Santa Ana Financing Authority REPORTS TO BE ISSUED AND DUE DATES Draft Final Due Dates Due Dates Independent Auditor's Report on the City's Comprehensive Annual Financial Report N/A December 10 Management Letter November 30 December 10 Audit Committee Letter November 30 December 10 Report on Compliance with Article XIIIB Appropriation Limit (GANN Limit Review) November 30 December 10 Single Audit Reports: 2 weeks 60 days after Before Completion of Due Date the CAFR • Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards • Independent Auditors' Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance and on the Schedule of Expenditures of Federal Awards. Air Quality Improvement Fund - Annual Financial Report November 30 December 10 Review of the City's Investment Policy November 30 December 10 City's State Controller's Report N/A January 31 Housing Authority's Financial Data Schedules 60 days after Completion of N/A the CAFR Agreed -Upon Procedures Reviews TBD TBD N/A - Not Applicable TBD - To be Determined 22 AUDIT TIMING Assuming that the City's books are closed and ready for examination and that all necessary schedules and documents are available for our use by October 1st each year, the suggested time schedule for the various phases of the audit would be approximately as follows: Entrance conference with key City staff. Discussion of any prior audit concerns and the performance of interim work. Interim audit fieldwork and management review Final audit fieldwork and management review Exit conference to summarize the results of the fieldwork and to review significant findings Deliver draft copies of reports Deliver final reports Completed By Late May Late May/Early June November 15 November 30 See page 22 See page 22 COMMITMENT TO DELIVER REPORTS ON A TIMELY BASIS If all books and records, schedules and documents are made available to us by October 1't, we make a commitment to have audit team members available and to provide all reports by the due dates specified above. AUDITS TO BE IN ACCORDANCE WITH GRAS AND OTHER REQUIREMENTS We will audit the financial statements of the City and the component units noted on the preceding page. The financial statements of all entities where the City exercises oversight will be combined with the City's financial statements, in accordance with GASB requirements. Our audit will be in accordance with auditing standards generally accepted in the United States of America as set forth by the AICPA, and will include such auditing procedures as we consider necessary under the circumstances. We will apply certain limited procedures, which consist principally of inquiries of management regarding methods of measurement and presentation of required supplementary information. However, we do not audit such information and do not express an opinion on it. Any supplemental financial statements will be subjected to auditing procedures as we consider necessary in relation to the financial statements taken as a whole. The scope of our audit will not include any statistical information, and we will not express an opinion concerning it. Our audits will conform with the guidelines set forth in the AICPA's Industry Audit Guide, Audits of State and Local Governmental Units. Also, each examination will comply with the standards for financial and compliance audits contained in the Government Auditing Standards, issued by the U.S. General Accounting Office, the provisions of the Single Audit Act and the provisions of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirementfor Federal Awards (Uniform Guidance). 23 AUDITS TO BE IN ACCORDANCE WITH GRAS AND OTHER REQUIREMENTS (CONTINUED) Also, we will perform an agreed-upon procedures review of the City's Gann Spending Limitation Computation as required by Section 1.5 of Article XIIIB of the California Constitution. Our review will be performed in conformance with the provision of the "League of California Cities Uniform Guidelines". FILIJMMM''.i' • Our audit approach is tailored to meet the technical requirements while maintaining professional skepticism without forgetting that we provide a service. The following aspects of our audit approach will add additional value to the audit services and minimize the amount of time spent by the City's staff in dealing with the audit. • We will assign experienced staff auditors including the in -charge field auditor having at least 3 years of experience. For first year engagements, all other staff will have at least 1 year of experience. You will not spend time training our auditors. • Whenever possible, we will use same format for audit supporting schedules used in prior years for the current year audit. This will reduce time spent by the City staff in dealing with the audit when a different audit firm is chosen. • Throughout the year we are available as a resource to our clients in researching technical questions, dealing with new pronouncements, reviewing complex financial entries and helping with any other issues as they arise. • The work papers will be reviewed by the manager or partner as field work is being completed to minimize additional questions after the fieldwork is completed. Our firm uses a governmental audit program which will be modified to the City of Santa Ana's operations to accommodate specific client circumstances. Our audit programs are organized by the financial statement approach and general procedures. The requirements by the Standards for assessing risk are utilized to modify the audit programs to focus on the higher risk areas of the financial statements. 1. Audit Planning Procedures: • Pre -audit conference with the City to establish process of communication between the audit team and City staff. • Discuss any new accounting pronouncements to be implemented in the current year. • Establish scope of work and timing of fieldwork. TO AUDIT APPROACH (CONTINUED) 2. Interim Fieldwork: Gather information about the City and its environment, including internal control: Evaluate the design of internal controls that are relevant to the audit and determine whether the control, either individually or in combination is capable of effecting, preventing or detecting and correcting material misstatements. Determine that the controls have been implemented, that is, that the controls exist and that the City is using it. Specific areas to review include: - Accounts payable/cash disbursements - Accounts receivable/cash receipts - Payroll disbursements - Utility billing process - Investment compliance - Property and equipment Review of minutes of the City of Santa Ana. Review of important contracts and debt agreements. Interim exit conference with the City to review results of interim fieldwork, including any findings. 3. final Audit Work: During the final audit work, we will assess "risk" of material misstatement based on understanding of the City's audit environment, including its internal control, to identify account balances to audit that appear in the City's financial statements. Our audit programs will be specifically tailored to address any significant risks identified. The Prepared by Client (PBC) list will be provided at least one month in advance of fieldwork. Our work may include: • Confirmation of cash and investments balances and testing of bank reconciliations. • Confirm significant receivable balances or review subsequent cash receipts to verify receivable balance. • Search for unrecorded liabilities. • Testing of interfund balances and transfers. • Test capital asset additions and depreciation expense. • Confirm long-term debt balances and review the accounting treatment of debt issued or refunded. • Test support for other significant assets or liabilities. • Analytical procedures on balance sheet and revenue and expenditure accounts, to evaluate and explain unusual fluctuations from prior year balances or current year budgeted amounts. • Review of attorney letters for significant legal matters affecting the City's financial position. • An exit conference will be held to review any significant adjustments or findings. The audit workpapers will be reviewed by our management team as the work is being performed in the field so that at the conclusion of the fieldwork we are able to report any adjustments or findings. 25 AUDIT APPROACH REDEVELOPMENT AGENCY/SUCCESSOR AGENCY Recent legislation related to the dissolution of Redevelopment Agencies will impact our audit approach as detailed below. Our procedures will include: • Audit the balances reported for cash, investments, receivables, payables, capital assets and long term liabilities as of end of the year. • Review the activity reported on ROPS. • Review the activities of the Successor Agency to ensure compliance with AB 26, AB 1484 and other relevant legislation enacted. APPROACH TO INTERNAL CONTROL Our audit will include obtaining an understanding of the entity and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of further audit procedures. Our understanding of the internal controls will be completed by completing narratives and checklists for various processes related to internal control. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are material to the financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the financial statements. Our tests, if performed, will be less in scope than would be necessary to render an opinion on internal control and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to Government Auditing Standards. As required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirement for Federal Awards (Uniform Guidance), we will perform tests of controls over compliance to evaluate the effectiveness of the design and operation of controls that we consider relevant to preventing or detecting material noncompliance with compliance requirements applicable to each major federal award program. However, our tests will be less in scope than would be necessary to render an opinion on those controls and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to the Uniform Guidance. An audit is not designed to provide assurance on internal control or to identify significant deficiencies. However, during the audit, we will communicate to management and those charged with governance internal control related matters that are required to be communicated under AICPA professional standards, Government Auditing Standards, and the Uniform Guidance. 26 SINGLE AUDIT APPROACH The single audit will be performed in accordance with all the requirements of the Single Audit Act, the Uniform Guidance and Government Auditing Standards issued by the GAO (the "Yellow Book") for cities that expend greater than $750,000 in federal awards in fiscal year 2015-2016 and subsequent years. • We will identify the Major and Nonmajor Federal Programs of the City through the risk-based approach required by the Uniform Guidance. This approach includes consideration of current and prior audit experience, oversight by Federal agencies and pass-through entities, and the inherent risk of the federal program. • We will review all federal and industry -specific publications and guidance and inform the City of any recent changes. • We will perform tests of controls to evaluate the effectiveness of the design and operation of controls that we consider relevant to preventing or detecting material noncompliance with applicable compliance requirements. If weaknesses in the internal controls are noted, we will modify our audit program as needed. • Our audit will include tests of transactions related to major federal award programs for compliance with applicable compliance requirements and certain provisions of laws, regulations, contracts and grant agreements. • Our procedures will consist of the applicable procedures described in the Uniform Guidance for the types of compliance requirements that could have a direct and material effect on each of the City's major programs. The purpose of those procedures will be to express an opinion on the City's compliance with requirements applicable to major programs in our report on compliance issued pursuant to the Uniform Guidance. • We will assist the City in completing and filing the Data Collection Form. DETERMINING LAWS AND REGULATIONS SUBJECT TO AUDIT Under provisions of AICPA Auditing Standards, management of the City is responsible for identifying to its outside auditors any laws and regulations which would have a significant effect on the audit. This would include federal laws (such as federal grant regulations), State laws (such as permitted investments under the California Government Code) and local laws (such as restrictions on special revenues levied by the City). After our selection as auditors, we will consult with City officials regarding these matters, to determine what laws and regulations need to be evaluated in connection with our audit. If a City is not able to identify specific laws and regulations that effect it, we have references (California Government Code and Health and Safety Code) to the more common laws, rules and regulations in our standard audit programs for the usual activities of a California City or Successor Agency to the Redevelopment Agency which will assist us in identifying laws and regulations to review in the audit. METHOD OF SAMPLING Our approach is to utilize random sampling based in our testing of the internal control systems related to cash receipts, cash disbursements, payroll and utility billings. Based on a statistical conclusion used by the firm our sample sizes can range from 25 to 60 transactions for each system. A random sample selection allows each item in the population of an equal chance of being selected. In addition, for disbursements, we may select a stratified sample of all transactions over a specified dollar amount for review. 27 ANALYTICAL PROCEDURES Analytical procedures are used in the planning and final stages of the audit. In the planning phase, we use analytical procedures to identify unusual financial transactions and comparing relationships to expected results. We compare current year information to the prior years for balance sheet items, revenues and expenditures. In addition, revenues and expenditures are compared to budgets to identify unexpected results. In the final stages of the audit, the financial statements are reviewed to identify expected relationships such as comparing debt paid to expenditures recorded on governmental funds, transfers between funds, depreciation expense, etc. For all significant relationships identified, explanations are obtained as to why the situation occurred and additional audit procedures are applied to resolve any concerns. MANAGEMENT LETTERS In connection with each audit, a complete review of internal controls will be made of all significant accounting procedures. Our firm uses an internal control questionnaire, computer systems questionnaire and narration to gain an understanding of the internal control process as part of our audit. We will identify weaknesses and after discussion with the appropriate City staff, we will submit a management letter which will identify weaknesses observed during these reviews and throughout the audit. The management letter will also assess the effect of the management letter comments on the financial reporting process and recommend steps towards eliminating the weaknesses. POTENTIAL AUDIT PROBLEMS We do not anticipate any significant potential audit problems. If any potential audit problems are identified, we will immediately discuss them with the City's management. Our approach is to coordinate the resolution of any problems with the City's management. Considering our experience with auditing governmental entities and resources, we expect minimal disruption to the City's management in resolving any identified audit problems. RETENTION OF AND ACCESS TO AUDIT WORKPAPERS In accordance with provisions of the Uniform Guidance, GAO requirements, and the California Board of Accountancy, our audit workpapers will be maintained for at least seven years after the date of the report. These workpapers will be made available as necessary to your cognizant audit agency (or its designee), to GAO representatives, or to any other federal or state agency needing access to the workpapers. Also, our firm will respond to any reasonable inquiries of successor auditors and we will allow any successor auditors to review our workpapers. OTHER PROFESSIONAL SERVICES We will be available for any other professional assistance you require to research and answer accounting and reporting problems raised by the City, regardless of the time of year. Such assistance may include, but is not limited to, tax questions, the review of bond documents, cost allocation programs and employee benefit programs. We have provided several tax opinions to City audit clients for matters relating to deferred compensation, fringe benefits, stipends and allowances, and other issues. We also will keep the City informed of new developments affecting municipal finance and reporting, changes in grant rules and regulations, etc. IRREGULARITIES AND ILLEGAL ACTS We will make an immediate, written report of all irregularities, illegal acts or indications of illegal acts of which we become aware, to those charged with governance. 0 SEGMENTATION OF THE AUDIT HOURS, BY PARTNER AND STAFF LEVEL SEGMENTATION OF THE AUDIT HOURS. BY PHASES OF THE AUDIT Supervisory Description of Services Partners Managers Staff Staff Clerical Total City audit, including management 8 16 24 40 - 88 and audit committee letters 40 80 240 440 - 800 Single Audit of Federal Grants 8 32 80 180 2 302 AQMD audit of the Air Quality Total Hours 53 Improvement Fund 1 4 - 24 - 29 GANN Limit Review - 1 - 8 - 9 Compliance Review of the City's Investment Policy 2 12 - 16 - 30 Preparation of the Santa Ana Housing Authority's Financial Data Schedule 2 4 - - - 6 Preparation of the City's State Controller's Report - 8 - 40 - 48 Total Hours 53 141 320 708 2 1,224 Two Agreed -Upon Procedures Reviews, Annually (1) 8 18 44 64 4 138 (1) The hours for the agreed-upon procedures are estimated and subject to negotiation, once the scope of each agreed- upon procedures are determined. SEGMENTATION OF THE AUDIT HOURS. BY PHASES OF THE AUDIT go Supervisory Partners Managers Staff Staff Clerical Total Planning 8 16 24 40 - 88 Interim Fieldwork 16 32 72 120 - 240 Final Fieldwork and Review 29 93 224 548 2 896 Total Hours 53 141 320 708 2 1,224 go DISCUSSION OF RELEVANT ACCOUNTING ISSUES GASB STATEMENT N0.72 GASB Statement No. 72, "Fair Value Measurement and Application", is effective for periods beginning after June 15, 2015. This Statement addresses accounting and financial reporting issues related to fair value measurement. The definition of fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This Statement provides guidance for determining a fair value measurement for financial reporting purposes. This Statement also provides guidance for applying fair value to certain investments and disclosures related to all fair value measurements. GASB STATEMENT NO. 73 GASB Statement No. 73, 'Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68", is effective for periods beginning after June 15, 2015 - except for those provisions that address employers and governmental nonemployer contributing entities for pensions that are not within the scope of Statement 68, which are effective for periods beginning after June 15, 2016. The requirements of this Statement extend the approach to accounting and financial reporting established in Statement 68 to all pensions, with modifications as necessary to reflect that for accounting and financial reporting purposes, any assets accumulated for pensions that are provided through pension plans that are not administered through trusts that meet the criteria specified in Statement 68 should not be considered pension plan assets. It also requires that information similar to that required by Statement 68 be included in notes to financial statements and required supplementary information by all similarly situated employers. GASB STATEMENT NO. 74 GASB Statement No. 74, "Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans", is effective for periods beginning after June 15, 2016. The objective of this Statement is to improve the usefulness of information about postemployment benefits other than pensions (other postemployment benefits or OPEB) included in the general purpose external financial reports of state and local governmental OPEB plans for making decisions and assessing accountability. This Statement also includes requirements to address financial reporting for assets accumulated for purposes of providing defined benefit OPEB through OPEB plans that are not administered through trusts that meet the specified criteria. GASB STATEMENT NO. 75 GASB Statement No. 75, 'Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions", is effective for periods beginning after June 15, 2017. The scope of this Statement addresses accounting and financial reporting for postemployment benefits other than pension (other postemployment benefits or OPEB) that is provided to the employees of state and local governmental employers. This Statement establishes standards for recognizing and measuring liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures for defined benefit and defined contribution plans. WH=NEIS0DIFHI EVANS I -LP GASB STATEMENT N0.76 GASB Statement No. 76, "The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments", is effective for periods beginning after June 15, 2015. The requirements of this Statement improve financial reporting by (1) raising the category of GASB Implementation Guides in the GAAP hierarchy, (2) emphasizing the importance of analogies to authoritative literature when the accounting treatment for an event is not specified in authoritative GAAP; (3) requiring the consideration of consistency with the GASB Concepts Statements when evaluating accounting treatments specified in nonauthoritative literature. GASB STATEMENT N0.77 GASB Statement No. 77, "Tax Abatement Disclosures", is effective for periods beginning after December 15, 2015. This Statement requires governments that enter into tax abatement agreements to disclose the following information: Brief descriptive information, such as the tax being abated, the authority under which tax abatements are provided, eligibility criteria, the mechanism by which taxes are abated, provisions for recapturing abated taxes, and the types of commitments made by tax abatement recipients. The gross dollar amount of taxes abated during the period. Commitments made by a government, other than to abate taxes, as part of a tax abatement agreement. Governments should organize those disclosures by major tax abatement program and may disclose information for individual tax abatement agreements within those programs. GASB STATEMENT NO. 78 GASB Statement No. 78, "Pensions Provided Through Certain Multiple -Employer Defined Benefit Pension Plans", is effective for periods beginning after December 15, 2015. This Statement amends the scope and applicability of Statement 68 to exclude pensions provided to employees of state or local governmental employers through a cost-sharing multiple -employer defined benefit plan that (1) is not a state or local governmental pension plan, (2) is used to provide defined benefit pensions both to employees of state or local governmental employers and to employees of employers that are not state or local governmental employers, and (3) has no predominant state or local governmental employer (either individually or collectively with other state or local governmental employers that provide pensions through the pension plan). This Statement establishes requirements for recognition and measurement of pension expense, expenditures, and liabilities; note disclosures; and required supplementary information for pensions that have the characteristics described above. GASB STATEMENT NO. 79 GASB Statement No. 79, "Certain External Investment Pools and Pool Participants", is effective for periods beginning after June 15, 2015, except for certain provisions on portfolio quality, custodial credit risk, and shadow pricing, those provisions are effective for reporting periods beginning after December 15, 2015. This Statement addresses accounting and financial reporting for certain external investment pools and pool participants. It establishes criteria for an external investment pool to qualify for making the election to measure all of its investments at amortized cost for financial reporting purposes. An external investment pool qualifies for that reporting if it meets certain applicable criteria established in this Statement. It establishes additional note disclosure requirements for qualifying external investment pools that measure all of their investment at amortized cost for financial reporting purposes and for government that participate in those pools. 31 WORK REQUIRED BY CITY STAFF Our fixed annual fees contemplate that conditions satisfactory to the normal progress and completion of the examination will be encountered and that City accounting personnel will furnish the agreed-upon assistance in connection with the audit. However, if unusual circumstances are encountered which make it necessary for us to do additional work, we shall report such conditions to the responsible City officials and provide the City with an estimate of the additional accounting fees involved. Noted below is a listing of work required by City staff to assist in the audit. 1. Technical assistance in familiarizing our staff with: • The flow of information through the various departments and accounting systems. • Reports generated by your accounting system. • The system of internal controls. • Controls established to monitor compliance with federal grants. 2. Preparation of trial balances for all funds, after posting of all year end journal entries. 3. Preparation of schedules supporting all major balance sheet accounts, and selected revenue and expenditure accounts. 4. Typing of all confirmation requests. 5. Pulling and refiling of all supporting documents required for audit verification. 6. Preparation of the CAFR and footnotes, including the introductory section, management's discussion and analysis and the statistical section for the CAFR. 32 CONSULTING SERVICES DEPARTMENT OVERVIEW OF SERVICES PROVIDED White Nelson Diehl Evans LLP offers a wide range of consulting services to governmental agencies. This section of our proposal summarizes the primary types of services provided by the firm. The firm's Director of Consulting Services is Mr. William S. Morgan, CPA. Mr. Morgan has over thirty years of experience in providing accounting, auditing and consulting services to California cities, counties, successor agencies/redevelopment agencies, water districts, special districts, joint power authorities and nonprofit corporations. Many of the firm's consulting projects are planned, supervised and reviewed by Mr. Morgan. Our firm provides the following types of services: • Governmental Tax Consulting • Performance and Operational Studies • Redevelopment Consulting Services • Reviews of City Treasurer Operations • Cable Television and Broadband Consulting Services • Reviews of Solid Waste Haulers and Assistance With Trash Rate Negotiations • Litigation Support and Dispute Resolution Services • Fraud Investigations • Hotel/Motel Transient Occupancy Tax Reviews • Business License Operation Reviews With regard to these engagements, we would intend to perform limited procedures reviews in connection with each assignment, in accordance with the AICPA's attestation standards. Under the provisions of the attestation standards, the City would designate what specific procedures it wishes to have performed. We would then perform those procedures and report on our findings. This type of engagement would not constitute a certified audit in accordance with auditing standards generally accepted in the United States of America. Such special services are not part of our standard fee arrangements and would be subject to a separate fee quotation. 33 ATTACHMENT I CURRENT CITY CLIENT REFERENCES AND LISTS OF CITY AND SPECIAL DISTRICT ENGAGEMENTS PERFORMED IN THE LAST 5 YEARS CURRENT CITY CLIENT REFERENCES One means of judging the high quality of our auditing and accounting services would be contact with some of our existing clients. We are including the names and phone numbers of our city clients overthe past year. We encourage you to contact any of these individuals. City of Alhambra City of Gilroy City of Palm Desert Mr. Paul Espinoza Ms. Christina Turner Mr. Paul Gibson Finance Director Finance Director Director of Finance (626) 570-5027 (408) 846-0750 (760) 346-0611 City of Artesia City of Goleta City of Pico Rivera Ms. Justine Menzel Ms. Genie Wilson Mr.Kambiz Borhani Deputy City Manager Finance Director Senior Finance Manager (562) 865-6249 (805) 961-7527 (562) 801-4395 City of Bellflower City of Hawaiian Gardens City of Rancho Santa Margarita Mr. Tae Rhee Ms.Llnda Hollinsworth Ms. Stefanie Turner Director of Finance Finance Director/Treasurer Finance Director (562) 804-1424 (562) 420-2641 x236 (949) 635-1812 City of Beverly Hills City of Hesperia City of Rialto Mr. Don Rhoads Mr. Brian Johnson Mr. George Harris, II Finance Director Director of Administrative Services Director of Administrative (310) 285-2429 (760) 947-1442 and Community Services (909) 421-7219 City of Burbank City of Highland City of San Buenaventura Mr. Dino Balos Mr. Chuck Dantuono Ms. Bridgette Mclnally Accounting Manager Director of Administrative Services Accounting Manager (818) 238-5518 (909) 864-6861 (805) 654-7892 City of Camarillo City of Laguna Hills City of San Gabriel Mr. Ronnie Campbell Ms. Janice Mateo -Reyes Mr. Thomas Marston Finance Director Finance Manager Director of Finance (805) 388-5320 (949) 707-2623 (626) 308-2812 City of Campbell City of Laguna Woods City of Sanger Mr. Jesse Takahashi Ms. Margaret Cady Ms. Patty Hartman Finance Director Administrative Services/ Interim Finance Director (408) 866-2113 City Treasurer (559) 876-6300 (949) 639-0500 City of Colton City of Stanton Ms. Anita Agramonte City of Lake Forest Mr. Stephen Parker Finance Director Mr. Keith Neves Director of Administrative Services (909) 370-5039 Director of Finance (714) 890-4226 (949)461-3400 City of Costa Mesa City of Tustin Ms. Colleen O'Donoghue City of Lancaster Ms. Jenny Leisz Assistant Finance Director Ms. Pamela Statsmann Finance Manager (714) 754-5421 Assistant Finance Director (714) 573-3079 (661) 723-6038 City of Cypress City of West Covina Mr. Matt Burton City of Newport Beach Ms. Christa Buhagiar Director of Finance & Administrative Services Mr. Dan Matusiewicz Finance Director (714) 229-6718 Director of Finance (626) 939-8463 (949) 644-3126 City of Del Mar City of West Hollywood Ms. Teresa McBroome City of Norco Ms, Lorena Quijano Director of Finance/Treasurer Ms. Olivia Hoyt Accounting Services Manager (858) 755-9354 Accounting Manager (323) 848-6513 (951)270-5652 City of Fountain Valley City of Westminster Mr. David Cain City of Norwalk Ms. Sherry Johnson Finance Director/Treasurer Ms. lana Stuard Accounting Manager (714) 593-4501 Director of Finance (714) 898-3311 (562) 929-5056 LIST OF CITY ENGAGEMENTS We have listed below the cities which were under contract with us during the past five fiscal years. Legend: AQMD - Air Quality Management District Audit CA- City Audit OCU - Other Component Unit Audits PFA- Public Financing Authority PI - Public Improvement PP - Pension Plans RA - Recreation Authority RDA - Former Redevelopment Agency Audit SA - Single Audit SCR - State Controllers' Reports SR - Street Report T - Transportation Substantially all of the above engagements were performed through the firm's Irvine office. Period of Service City From To Scope of Work Alhambra 2005 Present CA, RDA, SA, SCR Artesia 2012 Present CA, RDA, SA Avalon 2006 2012 CA, RDA, OCU, SCR Bellflower 2013 Present CA, SA, SCR, Financing Authority, Public Facilities Corp. Beverly Hills 2012 Present CA, SA Burbank 2013 Present CA, AQMD, SA, Water & Utility Enterprise Fund Camarillo 2012 Present CA, RDA, SA Campbell 2013 Present CA, SA, T, Solid Waste Management Authority Colton 2014 Present CA, SA, SCR, Child Care Program Costa Mesa 2012 Present CA, RDA, PFA, SA, Housing Authority Cypress 2012 Present CA, RDA, RA, SA Del Mar 2014 Present CA, SA, SCR Downey 1987 2013 CA, RDA, AQMD, PFA, SA, OCU Fountain Valley 2013 Present CA, SA, Housing Authority, Financing Authority Gilroy 2013 Present CA, SA Goleta 2013 Present CA, SA, SCR, SR Hawaiian Gardens 2012 Present CA, RDA, PFA, SA Hesperia 1997 Present CA, RDA, SA Highland 2012 Present CA, SA La Habra Heights 2008 2013 CA, SA, SCR Laguna Hills 2015 Present CA, SA, SCR. SR Laguna Woods 2015 Present CA, SA Lake Elsinore 2005 2012 CA, RDA, PFA, RA, SA Lake Forest 2011 Present CA, RDA, SA, Housing Authority Lakewood 1974 2013 CA, RDA, SA Lancaster 2013 Present CA, SA, SCR - City, SCR - Power Authority Newport Beach 2011 Present CA, SA Norco 2015 Present CA, SA, SCR Norwalk 2015 Present CA, AQMD, PFA, SA, T, OCU, SCR - City & Transit Oxnard 2013 2014 CA, SA, OCU Palm Desert 2008 Present CA, RDA, SA, Housing Authority Pico Rivera 2012 Present CA, PFA, SA, SCR, Water Authority Port Hueneme 2012 2014 CA, SA, Housing Authority, Surplus Property Authority Rancho Palos Verdes 2008 2012 CA, RDA, PI, SA, SCR, SR Rancho Santa Margarita 2012 Present CA, SA Rialto 2013 Present CA, SA San Buenaventura 2011 Present CA, RDA, PFA, SA, SCR San Fernando 2007 2011 CA, RDA, SA San Gabriel 2013 Present CA, SA Sanger 2011 Present CA, RDA, PFA, SA, SCR Signal Hill 1962 2013 CA, RDA, SA Stanton 2012 Present CA, RDA, SA Tustin 2011 Present CA, RDA, SA, SCR West Covina 2011 Present CA, RDA, AQMD, SA West Hollywood 2014 Present CA, SA, SCR Westminster 1997 Present CA, RDA, AQMD, SA Legend: AQMD - Air Quality Management District Audit CA- City Audit OCU - Other Component Unit Audits PFA- Public Financing Authority PI - Public Improvement PP - Pension Plans RA - Recreation Authority RDA - Former Redevelopment Agency Audit SA - Single Audit SCR - State Controllers' Reports SR - Street Report T - Transportation Substantially all of the above engagements were performed through the firm's Irvine office. LIST OF SPECIAL DISTRICT ENGAGEMENTS We have listed below the special districts which were under contract with us during the past five fiscal years. Period of Service Client Name From To Borrego Water District 2006 2013 Calleguas Municipal Water District 2015 Present Chino Basin Desalter Authority 2011 Present Chino Basin Regional Financing Authority 2015 Present Costa Mesa Sanitary District 2005 2014 Cypress Recreation and Park District 2012 Present Downey Cemetery District 1987 2013 EI Toro Water District 2008 2013 Encina Wastewater Authoirty 2012 Present Grossmont Healthcare District 2011 Present Heber Public Utilities District 2014 Present Inland Empire Regional Composting Authority 2011 Present Inland Empire Utilities Agency 2011 Present La Habra Heights County Water District 2002 Present La Puente Valley County Water District 1986 Present Laguna Beach County Water District 2002 Present Lake Elsinore and San Jacinto Joint Powers Authority 2013 Present Las Virgenes Municipal Water District 2007 2013 Leucadia Wastewater District 2010 Present Metro Wastewaster Joint Powers Authority 2013 Present Midway City Sanitary District 2012 Present Monterey Peninsula Regional Park District 2015 Present Municipal Water District of Orange County 2007 2011 Olivenhain Municipal Water District 2009 Present Orange County Development Authority - Eco -Rapid Transit 2015 Present Orange County Vector Control District 2013 Present Orchard Dale Water District 2012 Present Otay Water District 2009 2013 Padre Dam Municipal Water District 2009 Present Pico Water District 2010 Present Placentia Library District 2015 Present Puente Basin Water Agency 2005 2011 Rancho California Water District 2012 Present Rancho Santa Fe Community Service District 2011 Present Rincon del Diablo Municipal Water District 2015 Present Rowland Water District 2007 Present Santa Ana Watershed Project Authority 2013 Present South Bay Irrigation District 2012 Present South Coast Water District 2011 2014 South County Regional Wastewater Authority 2013 Present Sunset Beach Sanitary District 1986 Present Surfside Colony Stormwater Drainage District 2010 Present Surfside Community Services District 2010 Present Sweetwater Authority 2012 Present Vallecitos Water District 2010 2014 Valley Wide Recreation and Park District 1986 Present Ventura Port District 2011 Present ATTACHMENT II RESULTS OF OUTSIDE QUALITY REVIEW Heidenreich & Heidenreich, CPAs, PLLC 102015. SV Street, Suite #170 Phoenix, AZ 85044 (480)704-6301 fax 785-4619 System Review Report July 22, 2015 To the Owners of White Nelson Diehl Evans LLP and the Peer Review Committee of the CA Society of CPAs We have reviewed the system of quality control for the accounting and auditing practice of White Nelson Diehl Evans LLP (the firm) in effect for the year ended March 31, 2015. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants... As a - part of our peer review, we considered reviews by regulatory entities, if applicable, in determining the nature and extent of our procedures. The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Our responsibility is to express an opinion on the design of the system of quality control and the firm's compliance therewith based on our review. The nature, objectives, scope, limitations of, and the procedures performed in a System Review are described in the standards at www.aicpa.org/prsummary. As required by the standards, engagements selected for review included engagements performed under the Government Auditing Standards and audits of employee benefit plans. In our opinion, the system of quality control for the accounting and auditing practice of White Nelson Diehl Evans LLP in effect.for the year ended March 31, 2015, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with defrciencylies) or fail. White Nelson Diehl Evans LLP has received a peer review rating of pass. Heidenreich & Heidenreich, CPAs, PLLC ATTACHMENT III DOCUMENTS REQUESTED IN REQUEST FOR PROPOSAL EXHIBIT B CITY OF SANTA ANA REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES REFERENCES List and describe fully the contracts performed by your firm which demonstrate your ability to provide the supplies, equipment or services included In the scope of the proposal specifications. Attach additional pages if required. The City reserves the right to contact each of the references listed for additional information regarding your firm's qualifications. Reference Customer Name: City ofBurbank Address: 275 East Olive Avenue Burbank, CA 91510 Contract Amount: $116,485 Contact Individual: Mr. Dino Balos Phone Number: 818-238-5518 Facsimile Number: Year: 2016 Description of supplies, equipment, or services provided: City, AQMD, Water and Utility Enterprise Fund and Single Audits Reference Customer Name: City of Rialto Address: 150 South Palm Avenue Rialto, CA 92376 Contract Amount: $90,366 Description of supplies, equipment, or services provided: City and Slnlgle Audits Reference Customer Name: City of Palm Desert Address: 73-510 Fred Waring Druive Palm Desert, CA 92260 Contract Amount: $92,676 Contact Individual: _ Mr. George Harris, II Phone Number: 909-421-7219 Facsimile Number: Year: 2016 Contact Individual Mr. Paul Gibson Phone Number: 760-346-0611 Facsimile Number: 760-340-0574 Year: 2016 Description of supplies, equipment, or services provided: City Successor Agency, Recreation Authority, Housing Authority and Single Audits, TOT Reviews THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. W1 EXHI BIT C CITY OF SANTA ANA REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES PROPOSER'S STATEMENT Proposer understands and agrees that this written RFP (or any part thereof specifically designated and accepted by the City of Santa Ana, hereinafter City) shall constitute the entire agreement between . proposer and the City only after it has been accepted by the City Council, endorsed by the Clerk of the Council with her signature and official seal noting hereon the action of approval of the Council, signed by the Executive Director or his duly authorized agent, and signed by the City Attorney, denoting his approval of the form of this document, and its execution, and when it or an exact copy of it has been either delivered to proposer or deposited with the United States Postal Service properly addressed to the proposer with the correct postage affixed thereto. Proposer further agrees that upon delivery (as defined above) of the accepted agreement he/she will furnish City all required bonds and certificate of liability insurance within ten (10) days (excluding Saturdays, Sundays and City's legal holidays), or the funds, check, draft, or proposer's bond substituted in lieu thereof accompanying this proposal shall become the property of the City and shall be considered as payment of damages due to the delay and other causes suffered by City because of the failure to furnish the necessary bonds and because it is distinctly agreed that the proof of damages actually suffered by City is difficult to ascertain; otherwise said funds, check drafts, or proposer's bond substituted in lieu thereof shall be returned to the undersigned. Proposer understands that a proposal is required for the entire work, that the estimated quantities set forth in the RFP schedule are solely for the purpose of comparing proposals, and that final compensation under the contract will be based upon the actual quantities of work satisfactorily completed. All terms contained in the specifications, the certification of nondiscrimination by contractors, and the required insurance certificates are to be incorporated by reference into this agreement and are made specifically as part of this RFP. White Nelson Diehl Evans LLP Signed and Printed Name: A/� P /i Nitin P. Patel, CPA Title Partner Date March 4, 2016 THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. 20 EXHIBIT D CITY OF SANTA ANA REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES NONCOLLUSION AFFIDAVIT NON -COLLUSION AFFIDAVIT (Title 23 United States Code Section 112 and Public Contract Code Section 7106) To the CITY OF SANTA ANA In accordance with Title 23 United States Code Section 112 and Public Contract Code 7106 the proposer declares that the proposal is not made in the interest of, or on behalf of, any undisclosed person, partnership, company, association, organization, or corporation; that the proposal is genuine and not collusive or sham; that the proposer has not directly or indirectly induced or solicited any other proposer to put in a false or sham proposal, and has not directly or indirectly colluded, conspired, connived or agreed with any proposer or anyone else to put in a sham proposal, or that anyone shall refrain from bidding; that the proposer has not in any manner, directly or indirectly, sought by agreement, communication, or conference with anyone to fix the proposal price of the proposer or any proposer, or to fix any overhead, profit, or cost element of the proposal price, or of that of any other proposer, or to secure any advantage against the public body awarding the contract of anyone interested in the proposed contract; that all statements contained in the proposal are true; and, further, that the proposer has not, directly or indirectly, submitted his or her proposal price or any breakdown thereof, or the contents thereof, or divulged information or data relative thereto, or paid, and will not pay, any fee to any corporation, partnership, company association, organization, bid depository, or to any member or agent thereof to effectuate'a collusive or sham proposal. Note: The above noncollusion affidavit is part of the proposal. Signing this proposal on the signature portion thereof shall also constitute signature of this noncollusion affidavit. Proposers are cautioned that making a false certification may subject the certifier to criminal prosecution. State of California, County of Subscribed and sworn to (or affirmed) before me on this_ day of March 201 s by Nitin P. Patel , proved to me on the basis of satisfactory evidence to be the person(s) who appeared before me. N ry Public Signature BRANDI MELENDEZ commission # 2034862 Notary Public • California i 0ranpe County �64comm,Ex Vnas Jul 27 2Dt7 Notary Public Seal THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. 21 EXHIBIT C SEALED COST PROPOSAL FOR PROFESSIONAL AUDITING SERVICES CITY OF SANTA ANA, CALIFORNIA FOR THE TWO YEARS ENDING JUNE 30, 2017 (WITH AN OPTION FOR TWO YEARS ENDING JUNE 30, 2019) Submitted by: 2875 Michelle Drive, Suite 300 Irvine, CA 92606 (714)978-1300 March 4, 2016 Mr. Sergio Vidal, Assistant Director of Finance and Management Services Agency City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 Dear Ms. Vidal: At your request, we have submitted our statement of qualifications under a separate cover. The following information is included herein: 1. Schedule of Professional Fees and Expenses for the four years ending June 30, 2019. 2. Hourly Rates for Special Services. By signing below, I am certifying to you that I am entitled to represent the firm, empowered to submit this bid, and authorized to sign a contract with the City. Please contact us if there are any questions regarding the fees or hourly rates quoted herein. Very truly yours, WHITE NELSON DIEHL EVANS LLP ✓ , (D (wU�t- Nitin P. Patel, CPA Engagement Partner 1 7.8-i Michelle Dime, Su¢c 100, In-inc<< 1 9360, ^ lel: -149-8 1 30u •Ian- -1 J.'T8 -893 U//L,-lo.%drd .ii Onur(r �[;rd S,ep lh.r�u C nv;�h, CITY OF SANTA ANA TOTAL ALL-INCLUSIVE MAXIMUM PRICE Our maximum fees for the four years ending June 30, 2019 will be as follows: Fiscal Year Option Years Description of Services 2015.16 2016-17 2017-18 2018-19 City audit, including management and audit committee letters $ 107,000 $ 110,210 $ 113,515 $ 116,920 Single Audit of Federal Grants 38,720 39,880 41,075 42,305 AQMD audit of the Air Quality Improvement Fund 3,475 3,580 3,690 3,800 GANN Limit Review 895 920 950 980 Compliance Review of the City's Investment Policy 4,550 4,685 4,825 4,970 Preparation of the Santa Ana Housing Authority's Financial Data Schedule 1,350 1,390 1,430 1,475 Preparation of the City's State Controller's Report 5,600 5,770 5,945 6,120 Total All -Inclusive Maximum Price $ 161,590 $ 166,435 $ 171,430 $ 176,570 Two Agreed -Upon Procedures Reviews, Annually (1) $ 19,040 $ 19,610 $ 20,200 $ 20,805 (1) The hours and fees for the agreed-upon procedures are estimated and subject to negotiation, once the scope of each agreed-upon procedures are determined. 2 CITY OF SANTA ANA HOURLY RATES FOR ADDITIONAL PROFESSIONAL SERVICES If the City wishes us to perform consulting or other services outside the scope of the services described herein, a separate written request from the City will be required. Our hourly rates for these services during each year under the basic contract will be as follows: Option Years Position 2015-16 2016-17 2017-18 2018-19 Partners $ 275 $ 283 $ 292 $ 300 Managers 200 206 212 219 Supervisory Staff 150 155 159 164 Staff 100 103 106 109 Clerical 60 62 64 66 3 ACC>Rff CERTIFICATE OF LIABILITY INSURANCE DATE 5'i4i16 ' THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the pollcy(les) must be endoXsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the SILVER CREEK INSURANCE AGENCY 17742 IRVINE BLVD SUITE 203 TUSTIN CA 92780 INSURED WHITE NELSON DIEHL EVANS LLP 2875 MICHELLE, SUITE 300 IRVINE, CA. 92606 -838- SENTINEL INS. CO. LTD COVERAGES CERTIFICATE NUMBER' REVISION NLIMRFR- THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. .,._.--..�....____._,._,.v.__-___�.__ _ NSR ADA4 SUER -------------'-__,._'..-'_,._'--,-POLICY EFF- POLICY EXP LTRttpE OF INSURANCE POLICY NUMaE0. I LIMITS GENERAL LIABILITY COMMERCIALGENERALLIABILI7Y N DATE THEREOF, NOTICE WILL BE DELIVERED IN 57SBABH5586 �pl�y_Yy 6/1/15 6/Z/16 EACHOCCURRENCE -gAfxAJSe5dRacecurnmo-- V4 $ 1000000 800000 J�/ CLAIMS -MADE OCCUR 20 Civic Center Plaza AUTL100. MLSE_„�S.f€,Aoccurrance _ M EX_L AFee an) $ _,_.�.,-_____�_ $ 10000 A X PERSONAL &ADV INJURY S _ 1000000 GENERAL AGGREGATE $ 2000000 GEN'LAGGREGATE LIMIT APPLIESPER PRODUCTS - COMP/OP AGO $ 2000000 POLICY PRO - 71 LDO JECT 6 AUTOMOBILE �._. LIABILITY 57SBABH5586 ! X6/1/15 6/1/16 lEe aecidentL_,� 1000�.,Q0, i ANV AUTO � ! BODILY INJURY (Per person) S A �._. ALLOWNED SCHEDULED AUTOS iw_ AUTOS X BODILY INJURY (Per adoiI $ HIRED AUTOS AUTOS ED -CPsra cl DAMAGE— $ umeaaLU LIAR OCCUR 1578BABH5586 6/1/15 6/1/16 EACH OCCURRENCE $ 4000000 A �y It/ CXCESS UAB CLAIMS -MAGE X AGGREGATE $ 4000000 C DEp T RETENTION 10 000 $ WORKERS COMPENSATION �ANOEMPLOYERVLIABILITY 57WECDX4283 6/1/15 6/1/i6 WC STATU- OTH- 4RV LIMIT YIN I B ANY PROPRIETORIPARTNERIEXECUTIVE [:]N/A E.L. EACH ACCIDENT $ -T _3.000000 - OFFICFRIMEMBER EXCLUDED? (MandatoryinNH) EL, DISEASE - EA EMPLOYE $ 1000000 Ryes, dae0dbn under DESCRIPTION OF OPERATIONS below � !j' E.L. DIS[ASE- PgLICY LIMIT $ -_10,0 A (Business Interruption I 57SBABH5586 6/1/15 6/1/16 ==^^^r^• ^_••^_ _�^• ^^•r•=^•< OFSCRIPTION OF OPERATIONS I LOCATIONS / VEHICLES (Attach ACORD 101, Additional Rams s $chedule, II mom space le regvlred) Those usual to the insured -s operations. The City of Santa Ana, its officers, employees, agents, volunteers and representatives are named as additional insured per additional insured form SS0008 attached to this policy. Business liability wavier of subrogation applies to the certificate holder per form SS0008, Coverage is primary and non-contributory per the business liability coverage form 550008. 30 day advanced notice of cancellation, 10 day notice for non-payment cancellation. , CERTIFICATE HOLDER CANCEL I. ATION Cs71988.2010 ACORD CORPORATION. All rights reserved. ACORD 25 (2010/05) The ACORD name and logo are r istered marks of ACORD SHOULD ANY F THE ABOVE DESCRIBED POLICIES BE CANCELLED SEPORE THE EXPI N DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORD C WITH THE POLICY PROVISIONS. City of Santa Ana 20 Civic Center Plaza AUTL100. ESENTATIVE Santa Ana CA 92701 --- Cs71988.2010 ACORD CORPORATION. All rights reserved. ACORD 25 (2010/05) The ACORD name and logo are r istered marks of ACORD ATE (MMIODN" CERTIFICATE OF LIABILITY.INSURANCE D5/02016 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR(NEGATIVELY AMEND, EXTEND OR ALTER THE 'COVERAGE,AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED m CAM ICO Insurance Services 1.800 Gateway Drive, Suite 300 San Mateo, CA 94404 White Nelson Diehl Evans LLP 2875 Michelle Drive, Suite 300 Irvine, CA 92606 THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE SEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY RECUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERM$, EXCLUSIONS ANO CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAYHAVE BEEN REDUCED BY PAID CLAIMS. 611,01I.Rf— --- - - - —14INLI&I _lAommul-01IMP TYPE OF INSURANCE POLICY SUMMER LIMITS P=DN ROMSID4S. I A A GENERALLIAMILITY � AUTHORIZED REPRESENTATIVE EACH OCCURRENCE COMMERCIAL GENERAL LIABILITYDWAKFE F F 707RIEN I e 0 $ ,j CLAIMS -MAGE E] OCCUR ------- - -PERSONAL&AOVINJURY—$----,--, GENERAL AGGREGATE $ GEN'L AGGREGATE LIMITAPPLIESPRR', PROD CTS-COMP/OPAGG $ POLICY(LOC $ AUTOMOBILE LIABILBY COMMINEDSIN04E LIMIT $ ANYAUTO I 7 f7 (Ea aaidenq ALL OWNED AUTOS -T;- - — 60D1WjU�yp.0Q�.() F $ SCHEOULEDAUTOS -PHGP5RT��UAMA.-._...v_-__ E'----- ---- HIREOAU-I NON-OWNEDAUTOS UMBNEULA WAS OCCUR EACH OCCURRENCE__ EXCESS LIAR CLAIMS -MADE 171 AGGREGATE $ DEDUCTIBLE RETENTION $ NTfRN RB COMPENSATION C OT AND EMPLOYERS' LIABILITY YIN ` IMFS— E-' ------- ANYPRQPRIETORIPARTNERIEXECUTIVR r-- OFF)CERIMEMIDER EXCLUDED? N)A f7EL EACH kGGIDBNr $ Mandatory In NH) El- DISEASE -FA EMPLOYE ------ - S. — -- ---- ryas 4051 b. 4�.r PROVISInNA bt." E.L, DISEASE- P(11 A( I WIT $ X Professional Liability 17 F CA 17 Per Claim: $5,000,000 Insurance Policy. Aggregate $10,000,000 re.imodar,vortim City of Santa Ana fwt SHOULD ANY Of THE ABOVE LICIES OR CANCELLED BEFORE THE RTL 20 Civic Center Plaza LED E ACCORDANCE WITH THE a LIVENED 114 DAM THEREOF, tb�nca Santa Ana, CA 92701 P=DN ROMSID4S. I A A AUTHORIZED REPRESENTATIVE 9) 1988- 2UG9 ACORD CORPORATION. All rights reserved. ACORD 2$ (200WOO) The ACORD name and logo are registered marks of ACORD �2eweAn�et a1 56(rgh 90 tix[ DA rE M2H),Q M'XYYp CERTIFICATE OF LIABILITY' INSURANCE, r_� 7 12/16 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW, THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN 'THE iSSUING IN'SURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED', the pollcy(ies) must be endorsed, If SUBROGATION IS 'WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT STEVE SCHNEIDER NAME. SILVER CREEK, INSURANCE AGENCY PHONE 714-838-0693 rlrX 714-838-9438 IMC, Ne, Ext): (AIC, No)} _ 17742 IRVINE BLVD SUITE 203 ADDRIESS' STEV @1SILVERCR EKAGENCY.COM -_.. INSURERISI AFFORDING COVERAGE_ NAIL #Y.... TUSTIN CA 42780 INSURERA: SENTINEL INSURANCE CO. . INSURED INSU'RE-:R8, SENT INE L INSURANCE CO WHITE NELSON DIEHL E'aVA.NS LLP INSURER C: 2875 MICHELLE, SUITE 300 -INSURER D IRVINE, CA. 9,2606 IN>•IIRERE ....... ........ ......... ....... ........ __. ...._. INSURER F COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTTFY TIIA'I° THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INMCATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE "TERMS EXCLUSIONS AND CONDITIONS OF SUCH POLICIES, LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS INS R ........ ._... . S ._.,.. �.. ADDL(841WVCi�r-..___........... � I'a0I_I(.Y YY 14'MiD Y EXE".S ..__ ..... LTIi _�. ...TYPE CJE INSURANCE � POLI("''Y NIIMeErt-(tt4IdIDDIYYYYI MM1DOlYYYY1 LIMIT GEGENERAL ErABII.ITY J EACH OCCURRENCE =5 1000000: 57SBA,BH5586 6/1/16 6/1/x1,7 DAMAGE IGRI NI[EIJ CO s 300000 CLAIMS MADE +� OCCUR i PREMISES ILa ncu.urr�nrrsp �;ISI >e r�ir SAY o iA a .I MED EXII (Any ore person) �� 10000 I - A X PERSCNAI AADV INJURY s 1000000 GENERAL AGGREGATE .i..S .:2000000 ,EhPLA c,REI;ATr:aRmIITALrEIRLaI=eER PRCIDUCI'S -GC.)MIP10PA7�rI I5 2000000 PI ILIGY ._ .....___..L ............._,. 1C7C.._._..........m._..,..._.......r--...m...°._i...,. ..,..,...,.._....,,� ....._ ...,,.,.....,..w,_.............,._ � ,....__------. � ._.____ AU'romOBILE LIABILITY 'jCC3Mt34NEl'.) SINGLE 1 RNm1a7 � 57SBABH5586 6/1,/'16 6/1/17 I (Ea accident) 10000.00_ ANY A07 I I EIOMI Y INA IRY ff'ier person ` $ A ALLOWNED EI I RE DULI-D X RtaDiL Y INJURY pP'etr na odenll ; S NON-d,T+NPdf=D PROPERTY DAMAGE ..� H RED AUTOS � � ALHOS UMBRELLA LAB ����p �� 157SB,A,BH5586 6/7./16 6/1/17 r ACH OCCURRENCE S 4000000 A EXCESSLIAD CIS ms -MAIZE, X AGGREGAIF „5 4000000 i DED _ HE"u NT'ION5 WORKERS COMPENSATIONWf"�tp fIl@- I- ANDIMPIOYERSLIABILITY 57WEC'DX4233 6/1/16 G/1,/17 reIF2Y LIhIIT;a ER AN`dI IIVE EL EACH ACCOEN II ° S 1000000 B FFILE R/ IENIBE R EXCLUDED,, ,NIA _ I JIVIandatory InNR -._ EI UtSFASE EAEMPLOYEri_ 1000000_ I e des,nbe: under - - ury c;prlPrR(7hla;1 LE'E.Ia,�7luNtaEtelow EE. DISEASE °POUCYLIMIT E' l0 —00-9- A 0A BUSINESS INTERRUPTION 57SBABH5586 6/1/16 1 6/1./17 ACTUAL LOSS SUSTA NETD DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (Attach ACORD 101, Additional Remarks Schodute,,. it mores pace ins required RE '.Those usual to the insured"s operations. The City of Santa Ana, its officers, employees, agents, volunteers and representatives are named as additional insured per additional insured form SS000080405 attached to this policy. Business liability wavier of subrogation applies to the certificate holder per form SS"000080405. Coverage is primary and non-contributory per the business liability coverage form SS00080405. 30 day advanced notice of cancellation, 10 day notice for non-payment cancellation. CERTIFICATE HOLDER . .CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE VI,IITH THE POLICY PROVISIONS,. City of Santa Ana 20 Civic Center Plaza AUTHORIZE EIREPRFr ATIVF Santa Ana CA 42701 f 1988-20'10 ACORD CORPORATION. All rights reserved AC CORD 251201101051 The ACORD' nanne and logo are registers marks of ACORD BUSINESS LIABILITY COVERAGE FORM Form SS 00 08 04 05 © 2005, The Hartford QUICK REFERENCE BUSINESS LIABILITY COVERAGE FORM READ YOUR POLICY CAREFULLY BUSINESS LIABILITY COVERAGE FORM A. COVERAGES Business Liability Medical Expenses Coverage Extension - Supplementary Payments B. EXCLUSIONS C. WHO IS AN INSURED D. LIABILITY AND MEDICAL EXPENSES LIMITS OF INSURANCE Beginning on Page 1 1 2 2 3 10 14 E. LIABILITY AND MEDICAL EXPENSES GENERAL CONDITIONS 15 1. Bankruptcy 15 2. Duties In The Event Of Occurrence, Offense, Claim Or Suit 15 3. Financial Responsibility Laws 16 4. Legal Action Against Us 16 5. Separation Of Insureds 16 6. Representations 16 7. Other Insurance 16 8. Transfer Of Rights Of Recovery Against Others To Us 17 F. OPTIONAL ADDITIONAL INSURED COVERAGES 18 Additional Insureds 18 G. LIABILITY AND MEDICAL EXPENSES DEFINITIONS 20 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties and what is and is not covered. Throughout this policy the words "you" and "your" refer to the Named Insured shown in the Declarations. The words "we", "us" and 'bur" refer to the stock insurance company member of The Hartford providing this insurance. The word "insured" means any person or organization qualifying as such under Section C. - Who Is An Insured. Other words and phrases that appear in quotation marks have special meaning. Refer to Section G. - Liability And Medical Expenses Definitions. A. COVERAGES 1. BUSINESS LIABILITY COVERAGE (BODILY INJURY, PROPERTY DAMAGE, PERSONAL AND ADVERTISING INJURY) Insuring Agreement a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury", "property damage" or "personal and advertising injury" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury", "property damage" or "personal and advertising injury" to which this insurance does not apply. We may, at our discretion, investigate any "occurrence" or offense and settle any claim or "suit" that may result. But: (1) The amount we will pay for damages is limited as described in Section D. - Liability And Medical Expenses Limits Of Insurance; and (2) Our right and duty to defend ends when we have used up the applicable limit of insurance in the payment of judgments, settlements or medical expenses to which this insurance applies. No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Coverage Extension - Supplementary Payments. b. This insurance applies: (1) To "bodily injury" and "property damage" only if: (a) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory"; (b) The "bodily injury" or "property damage" occurs during the policy period; and (c) Prior to the policy period, no insured listed under Paragraph 1. of Section C. — Who Is An Insured and no "employee" authorized by you to give or receive notice of an 'occurrence" or claim, knew that the "bodily injury" or "property damage" had occurred, in whole or in part. If such a listed insured or authorized "employee" knew, prior to the policy period, that the "bodily injury" or "property damage" occurred, then any continuation, change or resumption of such "bodily injury" or "property damage" during or after the policy period will be deemed to have been known prior to the policy period. (2) To "personal and advertising injury" caused by an offense arising out of your business, but only if the offense was committed in the "coverage territory" during the policy period. c. "Bodily injury" or "property damage" will be deemed to have been known to have occurred at the earliest time when any insured listed under Paragraph 1. of Section C. — Who Is An Insured or any "employee" authorized by you to give or receive notice of an 'occurrence" or claim: (1) Reports all, or any part, of the "bodily injury" or "property damage" to us or any other insurer; Form SS 00 08 04 05 Page 1 of 24 © 2005, The Hartford BUSINESS LIABILITY COVERAGE FORM (2) Receives a written or verbal demand or b. We will make these payments regardless of claim for damages because of the "bodily fault. These payments will not exceed the injury" or "property damage"; or applicable limit of insurance. We will pay (3) Becomes aware by any other means that reasonable expenses for: "bodily injury" or "property damage" has (1) First aid administered at the time of an occurred or has begun to occur. accident; d. Damages because of "bodily injury" include (2) Necessary medical, surgical, x-ray and damages claimed by any person or dental services, including prosthetic organization for care, loss of services or devices; and death resulting at any time from the "bodily (3) Necessary ambulance, hospital, injury". professional nursing and funeral e. Incidental Medical Malpractice services. (1) "Bodily injury" arising out of the 3. COVERAGE EXTENSION - rendering of or failure to render SUPPLEMENTARY PAYMENTS professional health care services as a a. We will pay, with respect to any claim or physician, dentist, nurse, emergency "suit" we investigate or settle, or any "suit" medical technician or paramedic shall against an insured we defend: be deemed to be caused by an "occurrence", but only if: (1) All expenses we incur. (a) The physician, dentist, nurse, (2) Up to $1,000 for the cost of bail bonds emergency medical technician or required because of accidents or traffic paramedic is employed by you to law violations arising out of the use of provide such services; and any vehicle to which Business Liability Coverage for "bodily injury" applies. We (b) You are not engaged in the do not have to furnish these bonds. business or occupation of providing such services. (3) The cost of appeal bonds or bonds to release attachments, but only for bond (2) For the purpose of determining the amounts within the applicable limit ofinsurance. limits of insurance for incidental medical We do not have to furnish malpractice, any act or omission these bonds. together with all related acts or omissions in the furnishing of these (4) All reasonable expenses incurred by the services to any one person will be insured at our request to assist us in the considered one "occurrence". investigation or defense of the claim or "suit", including actual loss of earnings 2. MEDICAL EXPENSES up to $500 a day because of time off Insuring Agreement from work. a. We will pay medical expenses as described (5) All costs taxed against the insured in below for "bodily injury" caused by an the "suit". accident: (6) Prejudgment interest awarded against (1) On premises you own or rent; the insured on that part of the judgment (2) On ways next to premises you own or we pay. If we make an offer to pay the rent; or applicable limit of insurance, we will not (3) Because of your operations; pay any prejudgment interest based on that period of time after the offer. provided that: (7) All interest on the full amount of any (1) The accident takes place in the judgment that accrues after entry of the "coverage territory" and during the judgment and before we have paid, policy period; offered to pay, or deposited in court the (2) The expenses are incurred and reported part of the judgment that is within the to us within three years of the date of applicable limit of insurance. the accident; and Any amounts paid under (1) through (7) (3) The injured person submits to above will not reduce the limits of insurance. examination, at our expense, by physicians of our choice as often as we reasonably require. Page 2 of 24 Form SS 00 08 04 05 b. If we defend an insured against a "suit" and an indemnitee of the insured is also named as a party to the "suit", we will defend that indemnitee if all of the following conditions are met: (1) The "suit" against the indemnitee seeks damages for which the insured has assumed the liability of the indemnitee in a contract or agreement that is an "insured contract"; (2) This insurance applies to such liability assumed by the insured; (3) The obligation to defend, or the cost of the defense of, that indemnitee, has also been assumed by the insured in the same "insured contract"; (4) The allegations in the "suit" and the information we know about the "occurrence" are such that no conflict appears to exist between the interests of the insured and the interest of the indemnitee; (5) The indemnitee and the insured ask us to conduct and control the defense B of that indemnitee against such "suit" and agree that we can assign the same counsel to defend the insured and the indemnitee; and (6) The indemnitee: (a) Agrees in writing to: (i) Cooperate with us in the investigation, settlement or defense of the "suit"; (ii) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the "suit"; (iii) Notify any other insurer whose coverage is available to the indemnitee; and (iv) Cooperate with us with respect to coordinating other applicable insurance available to the indemnitee; and (b) Provides us with written authorization to: (i) Obtain records and other information related to the "suit"; and (ii) Conduct and control the defense of the indemnitee in such "suit". BUSINESS LIABILITY COVERAGE FORM So long as the above conditions are met, attorneys' fees incurred by us in the defense of that indemnitee, necessary litigation expenses incurred by us and necessary litigation expenses incurred by the indemnitee at our request will be paid as Supplementary Payments. Notwithstanding the provisions of Paragraph 1.b.(b) of Section B. — Exclusions, such payments will not be deemed to be damages for "bodily injury" and "property damage" and will not reduce the Limits of Insurance. Our obligation to defend an insured's indemnitee and to pay for attorneys' fees and necessary litigation expenses as Supplementary Payments ends when: (1) We have used up the applicable limit of insurance in the payment of judgments or settlements; or (2) The conditions set forth above, or the terms of the agreement described in Paragraph (6) above, are no longer met. EXCLUSIONS 1. Applicable To Business Liability Coverage This insurance does not apply to: a. Expected Or Intended Injury (1) "Bodily injury" or "property damage" expected or intended from the standpoint of the insured. This exclusion does not apply to "bodily injury" or "property damage" resulting from the use of reasonable force to protect persons or property; or (2) "Personal and advertising injury" arising out of an offense committed by, at the direction of or with the consent or acquiescence of the insured with the expectation of inflicting "personal and advertising injury". b. Contractual Liability (1) "Bodily injury" or "property damage"; or (2) "Personal and advertising injury" for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages because of: (a) "Bodily injury", "property damage" or "personal and advertising injury" that the insured would have in the absence of the contract or agreement; or Form SS 00 08 04 05 Page 3 of 24 BUSINESS LIABILITY COVERAGE FORM (b) "Bodily injury" or "property damage" assumed in a contract or agreement that is an "insured contract", provided the "bodily injury" or "property damage" occurs subsequent to the execution of the contract or agreement. Solely for the purpose of liability assumed in an "insured contract", reasonable attorneys' fees and necessary litigation expenses incurred by or for a party other than an insured are deemed to be damages because of "bodily injury" or "property damage" provided: (i) Liability to such party for, or for the cost of, that party's defense has also been assumed in the same "insured contract", and (ii) Such attorneys' fees and litigation expenses are for defense of that party against a civil or alternative dispute resolution proceeding in which damages to which this insurance applies are alleged. c. Liquor Liability "Bodily injury" or "property damage" for which any insured may be held liable by reason of: (1) Causing or contributing to the intoxication of any person; (2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or (3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages. This exclusion applies only if you are in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages. d. Workers' Compensation And Similar Laws Any obligation of the insured under a workers' compensation, disability benefits or unemployment compensation law or any similar law. e. Employer's Liability "Bodily injury" to: (1) An "employee" of the insured arising out of and in the course of: (a) Employment by the insured; or (b) Performing duties related to the conduct of the insured's business, or (2) The spouse, child, parent, brother or sister of that "employee" as a consequence of (1) above. This exclusion applies: (1) Whether the insured may be liable as an employer or in any other capacity; and (2) To any obligation to share damages with or repay someone else who must pay damages because of the injury. This exclusion does not apply to liability assumed by the insured under an "insured contract". f. Pollution (1) "Bodily injury", "property damage" or "personal and advertising injury" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants": (a) At or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to any insured. However, this subparagraph does not apply to: (i) "Bodily injury" if sustained within a building and caused by smoke, fumes, vapor or soot produced by or originating from equipment that is used to heat, cool or dehumidify the building, or equipment that is used to heat water for personal use, by the building's occupants or their guests; (ii) "Bodily injury" or "property damage" for which you may be held liable, if you are a contractor and the owner or lessee of such premises, site or location has been added to your policy as an additional insured with respect to your ongoing operations performed for that additional insured at that premises, site or location and such premises, site or location is not and never was owned or occupied by, or rented or loaned to, any insured, other than that additional insured; or Page 4 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM (iii) "Bodily injury" or "property released as part of the damage" arising out of heat, operations being performed smoke or fumes from a by such insured, contractor or "hostile fire"; subcontractor; (b) At or from any premises, site or (ii) "Bodily injury" or "property location which is or was at any damage" sustained within a time used by or for any insured or building and caused by the others for the handling, storage, release of gases, fumes or disposal, processing or treatment vapors from materials brought of waste; into that building in connection (c) Which are or were at any time with operations being performed transported, handled, stored, by you or on your behalf by a treated, disposed of, or processed contractor or subcontractor; or as waste by or for: (iii) "Bodily injury" or "property (i) Any insured; or damage" arising out of heat, smoke or fumes from a (ii) Any person or organization for hostile fire"; or whom you may be legally responsible; (e) At or from any premises, site or location on which any insured or any (d) At or from any premises, site or contractors or subcontractors location on which any insured or working directly or indirectly on any any contractors or subcontractors insured's behalf are performing working directly or indirectly on operations if the operations are to any insured's behalf are test for, monitor, clean up, remove, performing operations if the contain, treat, detoxify or neutralize, "pollutants" are brought on or to or in any way respond to, or assess the premises, site or location in the effects of, "pollutants". connection with such operations by such insured, contractor or (2) Any loss, cost or expense arising out subcontractor. However, this of any: subparagraph does not apply to: (a) Request, demand, order or statutory (i) "Bodily injury" or "property or regulatory requirement that any damage" arising out of the insured or others test for, monitor, escape of fuels, lubricants or clean up, remove, contain, treat, other operating fluids which are detoxify or neutralize, or in any way needed to perform the normal respond to, or assess the effects of, electrical, hydraulic or "pollutants"; or mechanical functions (b) Claim or suit by or on behalf of a necessary for the operation of governmental authority for "mobile equipment" or its parts, damages because of testing for, if such fuels, lubricants or other monitoring, cleaning up, removing, operating fluids escape from a containing, treating, detoxifying or vehicle part designed to hold, neutralizing, or in any way store or receive them. This responding to, or assessing the exception does not apply if the effects of, "pollutants". "bodily injury" or "property However, this paragraph does not damage" arises out of the apply to liability for damages because intentional discharge, dispersal of "property damage" that the insured or release of the fuels, would have in the absence of such lubricants or other operating request, demand, order or statutory or fluids, or if such fuels, regulatory requirement, or such claim lubricants or other operating or "suit" by or on behalf of a fluids are brought on or to the governmental authority. premises, site or location with the intent that they be discharged, dispersed or Form SS 00 08 04 05 Page 5 of 24 BUSINESS LIABILITY COVERAGE FORM g. Aircraft, Auto Or Watercraft "Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and 'loading or unloading". This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the 'occurrence" which caused the "bodily injury" or "property damage" involved the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft that is owned or operated by or rented or loaned to any insured. This exclusion does not apply to: (1) A watercraft while ashore on premises you own or rent; (2) A watercraft you do not own that is: (a) Less than 51 feet long; and (b) Not being used to carry persons for a charge; (3) Parking an "auto" on, or on the ways next to, premises you own or rent, provided the "auto" is not owned by or rented or loaned to you or the insured; (4) Liability assumed under any "insured contract' for the ownership, maintenance or use of aircraft or watercraft; (5) "Bodily injury" or "property damage" arising out of the operation of any of the equipment listed in Paragraph f.(2) or f.(3) of the definition of "mobile equipment'; or (6) An aircraft that is not owned by any insured and is hired, chartered or loaned with a paid crew. However, this exception does not apply if the insured has any other insurance for such "bodily injury" or "property damage", whether the other insurance is primary, excess, contingent or on any other basis. h. Mobile Equipment "Bodily injury" or "property damage" arising out of: (1) The transportation of "mobile equipment' by an "auto" owned or operated by or rented or loaned to any insured; or (2) The use of "mobile equipment' in, or while in practice or preparation for, a prearranged racing, speed or demolition contest or in any stunting activity. War "Bodily injury", "property damage" or "personal and advertising injury", however caused, arising, directly or indirectly, out of: (1) War, including undeclared or civil war; (2) Warlike action by a military force, including action in hindering or defending against an actual or expected attack, by any government, sovereign or other authority using military personnel or other agents; or (3) Insurrection, rebellion, revolution, usurped power, or action taken by governmental authority in hindering or defending against any of these. j. Professional Services "Bodily injury", "property damage" or "personal and advertising injury" arising out of the rendering of or failure to render any professional service. This includes but is not limited to: (1) Legal, accounting or advertising services; (2) Preparing, approving, or failing to prepare or approve maps, shop drawings, opinions, reports, surveys, field orders, change orders, designs or drawings and specifications; (3) Supervisory, inspection, architectural or engineering activities; (4) Medical, surgical, dental, x-ray or nursing services treatment, advice or instruction; (5) Any health or therapeutic service treatment, advice or instruction; (6) Any service, treatment, advice or instruction for the purpose of appearance or skin enhancement, hair removal or replacement or personal grooming; (7) Optical or hearing aid services including the prescribing, preparation, fitting, demonstration or distribution of ophthalmic lenses and similar products or hearing aid devices; Page 6 of 24 Form SS 00 08 04 05 (8) Optometry or optometric services including but not limited to examination of the eyes and the prescribing, preparation, fitting,demonstration or distribution of ophthalmic lenses and similar products; (9) Any: (a) Body piercing (not including ear piercing); (b) Tattooing, including but not limited to the insertion of pigments into or under the skin; and (c) Similar services; (10) Services in the practice of pharmacy; and (11) Computer consulting, design or programming services, including web site design. Paragraphs (4) and (5) of this exclusion do not apply to the Incidental Medical Malpractice coverage afforded under Paragraph 1.e. in Section A. - Coverages. k. Damage To Property "Property damage" to: (1) Property you own, rent or occupy, including any costs or expenses incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another's property; (2) Premises you sell, give away or abandon, if the "property damage" arises out of any part of those premises; (3) Property loaned to you; (4) Personal property in the care, custody or control of the insured; (5) That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the "property damage" arises out of those operations; or (6) That particular part of any property that must be restored, repaired or replaced because "your work" was incorrectly performed on it. BUSINESS LIABILITY COVERAGE FORM Paragraphs (1), (3) and (4) of this exclusion do not apply to "property damage" (other than damage by fire) to premises, including the contents of such premises, rented to you for a period of 7 or fewer consecutive days. A separate Limit of Insurance applies to Damage To Premises Rented To You as described in Section D. - Limits Of Insurance. Paragraph (2) of this exclusion does not apply if the premises are "your work" and were never occupied, rented or held for rental by you. Paragraphs (3) and (4) of this exclusion do not apply to the use of elevators. Paragraphs (3), (4), (5) and (6) of this exclusion do not apply to liability assumed under a sidetrack agreement. Paragraphs (3) and (4) of this exclusion do not apply to "property damage" to borrowed equipment while not being used to perform operations at a job site. Paragraph (6) of this exclusion does not apply to "property damage" included in the "products -completed operations hazard". I. Damage To Your Product "Property damage" to "your product" arising out of it or any part of it. m. Damage To Your Work "Property damage" to "your work" arising out of it or any part of it and included in the "products -completed operations hazard". This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor. n. Damage To Impaired Property Or Property Not Physically Injured "Property damage" to "impaired property" or property that has not been physically injured, arising out of: (1) A defect, deficiency, inadequacy or dangerous condition in "your product" or "your work"; or (2) A delay or failure by you or anyone acting on your behalf to perform a contract or agreement in accordance with its terms. This exclusion does not apply to the loss of use of other property arising out of sudden and accidental physical injury to "your product" or "your work" after it has been put to its intended use. Form SS 00 08 04 05 Page 7 of 24 BUSINESS LIABILITY COVERAGE FORM o. Recall Of Products, Work Or Impaired (c) Title of any literary or artistic work; Property (8) Arising out of an offense committed by Damages claimed for any loss, cost or an insured whose business is: expense incurred by you or others for the (a) Advertising, broadcasting, loss of use, withdrawal, recall, inspection, publishing or telecasting; repair, replacement, adjustment, removal (b) Designing or determining content or disposal of: of web sites for others; or (1) "Your product"; (c) An Internet search, access, (2) "Your work"; or content or service provider. (3) "Impaired property"; However, this exclusion does not if such product, work or property is apply to Paragraphs a., b. and c. withdrawn or recalled from the market or under the definition of "personal and from use by any person or organization advertising injury" in Section G. — because of a known or suspected defect, Liability And Medical Expenses deficiency, inadequacy or dangerous Definitions. condition in it. For the purposes of this exclusion, p. Personal And Advertising Injury placing an "advertisement" for or "Personal and advertising injury": linking to others on your web site, by (1) Arising out of oral, written or electronic itself, is not considered the business publication of material, if done by or at of advertising, broadcasting, the direction of the insured with publishing or telecasting; knowledge of its falsity; (9) Arising out of an electronic chat room (2) Arising out of oral, written or electronic or bulletin board the insured hosts, publication of material whose first owns, or over which the insured publication took place before the exercises control; beginning of the policy period; (10) Arising out of the unauthorized use of (3) Arising out of a criminal act committed another's name or product in your e-mail by or at the direction of the insured; address, domain name or metatags, or any other similar tactics to mislead (4) Arising out of any breach of contract, another's potential customers; except an implied contract to use "advertising (11) Arising out of the violation of a another's idea" in your "advertisement"; persons right of privacy created by any state or federal act. (5) Arising out of the failure of goods, However, this exclusion does not products or services to conform with apply to liability for damages that the any statement of quality or insured would have in the absence of performance made in your such state or federal act; "advertisement"; (6) Arising out of the wrong description of (12) Arising out of: the price of goods, products or services; (a) An "advertisement" for others on (7) Arising out of any violation of any your web site; intellectual property rights such as (b) Placing a link to a web site of copyright, patent, trademark, trade others on your web site; name, trade secret, service mark or (c) Content from a web site of others other designation of origin or displayed within a frame or border authenticity. on your web site. Content includes However, this exclusion does not information, code, sounds, text, apply to infringement, in your graphics or images; or "advertisement", of (d) Computer code, software or (a) Copyright; programming used to enable: (b) Slogan, unless the slogan is also (i) Your web site; or a trademark, trade name, service (ii) The presentation or functionality mark or other designation of origin of an "advertisement" or other or authenticity; or content on your web site; Page 8 of 24 Form SS 00 08 04 05 (13) Arising out of a violation of any anti- trust law; (14) Arising out of the fluctuation in price or value of any stocks, bonds or other securities; or (15) Arising out of discrimination or humiliation committed by or at the direction of any "executive officer", director, stockholder, partner or member of the insured. q. Electronic Data Damages arising out of the loss of, loss of use of, damage to, corruption of, inability to access, or inability to manipulate "electronic data". r. Employment -Related Practices "Bodily injury" or "personal and advertising injury" to: (1) A person arising out of any: (a) Refusal to employ that person; (b) Termination of that person's employment; or (c) Employment-related practices, policies, acts or omissions, such as coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation or discrimination directed at that person; or (2) The spouse, child, parent, brother or sister of that person as a consequence of "bodily injury" or "personal and advertising injury" to the person at whom any of the employment-related practices described in Paragraphs (a), (b), or (c) above is directed. This exclusion applies: (1) Whether the insured may be liable as an employer or in any other capacity; and (2) To any obligation to share damages with or repay someone else who must pay damages because of the injury. s. Asbestos (1) "Bodily injury", "property damage" or "personal and advertising injury" arising out of the "asbestos hazard". (2) Any damages, judgments, settlements, loss, costs or expenses that: BUSINESS LIABILITY COVERAGE FORM (a) May be awarded or incurred by reason of any claim or suit alleging actual or threatened injury or damage of any nature or kind to persons or property which would not have occurred in whole or in part but for the "asbestos hazard"; (b) Arise out of any request, demand, order or statutory or regulatory requirement that any insured or others test for, monitor, clean up, remove, encapsulate, contain, treat, detoxify or neutralize or in any way respond to or assess the effects of an "asbestos hazard"; or (c) Arise out of any claim or suit for damages because of testing for, monitoring, cleaning up, removing, encapsulating, containing, treating, detoxifying or neutralizing or in any way responding to or assessing the effects of an "asbestos hazard". t. Violation Of Statutes That Govern E - Mails, Fax, Phone Calls Or Other Methods Of Sending Material Or Information "Bodily injury", "property damage", or "personal and advertising injury" arising directly or indirectly out of any action or omission that violates or is alleged to violate: (1) The Telephone Consumer Protection Act (TCPA), including any amendment of or addition to such law; (2) The CAN -SPAM Act of 2003, including any amendment of or addition to such law; or (3) Any statute, ordinance or regulation, other than the TCPA or CAN -SPAM Act of 2003, that prohibits or limits the sending, transmitting, communicating or distribution of material or information. Damage To Premises Rented To You — Exception For Damage By Fire, Lightning or Explosion Exclusions c. through h. and k. through o. do not apply to damage by fire, lightning or explosion to premises rented to you or temporarily occupied by you with permission of the owner. A separate Limit of Insurance applies to this coverage as described in Section D. - Liability And Medical Expenses Limits Of Insurance. Form SS 00 08 04 05 Page 9 of 24 BUSINESS LIABILITY COVERAGE FORM 2. Applicable To Medical Expenses Coverage e. A trust, you are an insured. Your trustees We will not pay expenses for "bodily injury": are also insureds, but only with respect to their duties as trustees. a. Any Insured To any insured, except "volunteer workers". 2. Each of the following is also an insured: b. Hired Person a. Employees And Volunteer Workers To a person hired to do work for or on behalf Your "volunteer workers" only while of any insured or a tenant of any insured. performing duties related to the conduct of your business, or your "employees", other c. Injury On Normally Occupied Premises than either your executive officers (if you To a person injured on that part of are an organization other than a premises you own or rent that the person partnership, joint venture or limited liability normally occupies. company) or your managers (if you are a d. Workers' Compensation And Similar limited liability company), but only for acts Laws within the scope of their employment by To a person, whether or not an you or while performing duties related to "employee" of any insured, if benefits for the conduct of your business. the "bodily injury" are payable or must be However, none of these "employees" or provided under a workers' compensation "volunteer workers" are insureds for: or disability benefits law or a similar law. (1) "Bodily injury" or "personal and e. Athletics Activities advertising injury": To a person injured while practicing, (a) To you, to your partners or instructing or participating in any physical members (if you are a partnership exercises or games, sports or athletic or joint venture), to your members contests. (if you are a limited liability f. Products -Completed Operations Hazard company), or to a co -"employee" while in the course of his or her Included with the "products -completed employment or performing duties operations hazard". related to the conduct of your g. Business Liability Exclusions business, or to your other Excluded under Business Liability Coverage. "volunteer workers" while performing duties related to the C. WHO IS AN INSURED conduct of your business; 1. If you are designated in the Declarations as: (b) To the spouse, child, parent, a. An individual, you and your spouse are brother or sister of that co - insureds, but only with respect to the "employee" or that "volunteer conduct of a business of which you are the worker" as a consequence of sole owner. Paragraph (1)(a) above; b. A partnership or joint venture, you are an (c) For which there is any obligation insured. Your members, your partners, and to share damages with or repay their spouses are also insureds, but only with someone else who must pay respect to the conduct of your business. damages because of the injury c. A limited liability company, you are an described in Paragraphs (1)(a) or insured. Your members are also insureds, (b) above; or but only with respect to the conduct of your (d) Arising out of his or her providing business. Your managers are insureds, but or failing to provide professional only with respect to their duties as your health care services. managers. If you are not in the business of d. An organization other than a partnership, providing professional health care joint venture or limited liability company, you services, Paragraph (d) does not apply are an insured. Your "executive officers" and to any nurse, emergency medical directors are insureds, but only with respect technician or paramedic employed by to their duties as your officers or directors. you to provide such services. Your stockholders are also insureds, but only (2) "Property damage" to property: with respect to their liability as stockholders. (a) Owned, occupied or used by, Page 10 of 24 Form SS 00 08 04 05 (b) Rented to, in the care, custody or control of, or over which physical control is being exercised for any purpose by you, any of your "employees", "volunteer workers", any partner or member (if you are a partnership or joint venture), or any member (if you are a limited liability company). b. Real Estate Manager Any person (other than your "employee" or "volunteer worker"), or any organization while acting as your real estate manager. c. Temporary Custodians Of Your Property Any person or organization having proper temporary custody of your property if you die, but only: (1) With respect to liability arising out of the maintenance or use of that property; and (2) Until your legal representative has been appointed. d. Legal Representative If You Die Your legal representative if you die, but only with respect to duties as such. That representative will have all your rights and duties under this insurance. e. Unnamed Subsidiary Any subsidiary and subsidiary thereof, of yours which is a legally incorporated entity of which you own a financial interest of more than 50% of the voting stock on the effective date of this Coverage Part. The insurance afforded herein for any subsidiary not shown in the Declarations as a named insured does not apply to injury or damage with respect to which an insured under this insurance is also an insured under another policy or would be an insured under such policy but for its termination or upon the exhaustion of its limits of insurance. 3. Newly Acquired Or Formed Organization Any organization you newly acquire or form, other than a partnership, joint venture or limited liability company, and over which you maintain financial interest of more than 50% of the voting stock, will qualify as a Named Insured if there is no other similar insurance available to that organization. However: a. Coverage under this provision is afforded only until the 180th day after you acquire or form the organization or the end of the policy period, whichever is earlier; and BUSINESS LIABILITY COVERAGE FORM b. Coverage under this provision does not apply to: (1) "Bodily injury" or "property damage" that occurred; or (2) "Personal and advertising injury" arising out of an offense committed before you acquired or formed the organization. 4. Operator Of Mobile Equipment With respect to "mobile equipment" registered in your name under any motor vehicle registration law, any person is an insured while driving such equipment along a public highway with your permission. Any other person or organization responsible for the conduct of such person is also an insured, but only with respect to liability arising out of the operation of the equipment, and only if no other insurance of any kind is available to that person or organization for this liability. However, no person or organization is an insured with respect to: a. "Bodily injury" to a co -"employee" of the person driving the equipment; or b. "Property damage" to property owned by, rented to, in the charge of or occupied by you or the employer of any person who is an insured under this provision. 5. Operator of Nonowned Watercraft With respect to watercraft you do not own that is less than 51 feet long and is not being used to carry persons for a charge, any person is an insured while operating such watercraft with your permission. Any other person or organization responsible for the conduct of such person is also an insured, but only with respect to liability arising out of the operation of the watercraft, and only if no other insurance of any kind is available to that person or organization for this liability. However, no person or organization is an insured with respect to: a. "Bodily injury" to a co -"employee" of the person operating the watercraft; or b. "Property damage" to property owned by, rented to, in the charge of or occupied by you or the employer of any person who is an insured under this provision. 6. Additional Insureds When Required By Written Contract, Written Agreement Or Permit The person(s) or organization(s) identified in Paragraphs a. through f. below are additional insureds when you have agreed, in a written Form SS 00 08 04 05 Page 11 of 24 BUSINESS LIABILITY COVERAGE FORM contract, written agreement or because of a (e) Any failure to make such permit issued by a state or political inspections, adjustments, tests or subdivision, that such person or organization servicing as the vendor has be added as an additional insured on your agreed to make or normally policy, provided the injury or damage occurs undertakes to make in the usual subsequent to the execution of the contract or course of business, in connection agreement, or the issuance of the permit. with the distribution or sale of the A person or organization is an additional products; insured under this provision only for that (f) Demonstration, installation, period of time required by the contract, servicing or repair operations, agreement or permit. except such operations performed However, no such person or organization is an at the vendor's premises in connection with the sale of the additional insured under this provision if such product; person or organization is included as an additional insured by an endorsement issued (g) Products which, after distribution by us and made a part of this Coverage Part, or sale by you, have been labeled including all persons or organizations added or relabeled or used as a as additional insureds under the specific container, part or ingredient of any additional insured coverage grants in Section other thing or substance by or for F. — Optional Additional Insured Coverages. the vendor; or a. Vendors (h) "Bodily injury" or "property Any person(s) or organization(s) (referred to damage" arising out of the sole negligence of the vendor for its below as vendor), but only with respect to own acts or omissions or those of "bodily injury" or "property damage" arising its employees or anyone else out of "your products" which are distributed acting on its behalf. However, this or sold in the regular course of the vendor's exclusion does not apply to: business and only if this Coverage Part provides coverage for "bodily injury" or (i) The exceptions contained in "property damage" included within the Subparagraphs (d) or (f); or "products -completed operations hazard". (ii) Such inspections, adjustments, (1) The insurance afforded to the vendor tests or servicing as the vendor is subject to the following additional has agreed to make or normally exclusions: undertakes to make in the usual This insurance does not apply to: course of business, in connection with the distribution (a) "Bodily injury" or "property or sale of the products. damage" for which the vendor is (2) This insurance does not apply to any obligated to pay damages by insured person or organization from reason of the assumption of whom you have acquired such products, liability in a contract or agreement. or any ingredient, part or container, This exclusion does not apply to entering into, accompanying or liability for damages that the containing such products. vendor would have in the absence of the contract or agreement; b. Lessors Of Equipment (b) Any express warranty (1) Any person or organization from unauthorized by you; whom you lease equipment; but only with respect to their liability for "bodily (c) Any physical or chemical change injury", "property damage" or in the product made intentionally "personal and advertising injury" by the vendor; caused, in whole or in part, by your (d) Repackaging, except when maintenance, operation or use of unpacked solely for the purpose of equipment leased to you by such inspection, demonstration, testing, person or organization. or the substitution of parts under instructions from the manufacturer, and then repackaged in the original container; Page 12 of 24 Form SS 00 08 04 05 (2) With respect to the insurance afforded to these additional insureds, this insurance does not apply to any "occurrence" which takes place after you cease to lease that equipment. c. Lessors Of Land Or Premises (1) Any person or organization from whom you lease land or premises, but only with respect to liability arising out of the ownership, maintenance or use of that part of the land or premises leased to you. (2) With respect to the insurance afforded to these additional insureds, this insurance does not apply to: (a) Any 'occurrence" which takes place after you cease to lease that land or be a tenant in that premises; or (b) Structural alterations, new construction or demolition operations performed by or on behalf of such person or organization. d. Architects, Engineers Or Surveyors (1) Any architect, engineer, or surveyor, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: (a) In connection with your premises; or (b) In the performance of your ongoing operations performed by you or on your behalf. (2) With respect to the insurance afforded to these additional insureds, the following additional exclusion applies: This insurance does not apply to "bodily injury", "property damage" or "personal and advertising injury" arising out of the rendering of or the failure to render any professional services by or for you, including: (a) The preparing, approving, or failure to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders, designs or drawings and specifications; or (b) Supervisory, inspection, architectural or engineering activities. BUSINESS LIABILITY COVERAGE FORM e. Permits Issued By State Or Political Subdivisions (1) Any state or political subdivision, but only with respect to operations performed by you or on your behalf for which the state or political subdivision has issued a permit. (2) With respect to the insurance afforded to these additional insureds, this insurance does not apply to: (a) "Bodily injury", "property damage" or "personal and advertising injury" arising out of operations performed for the state or municipality; or (b) 'Bodily injury" or "property damage" included within the "products - completed operations hazard". f. Any Other Party (1) Any other person or organization who is not an insured under Paragraphs a. through e. above, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: (a) In the performance of your ongoing operations; (b) In connection with your premises owned by or rented to you; or (c) In connection with "your work" and included within the "products - completed operations hazard", but only if (i) The written contract or written agreement requires you to provide such coverage to such additional insured; and (ii) This Coverage Part provides coverage for "bodily injury" or "property damage" included within the "products - completed operations hazard". (2) With respect to the insurance afforded to these additional insureds, this insurance does not apply to: "Bodily injury", "property damage" or "personal and advertising injury" arising out of the rendering of, or the failure to render, any professional architectural, engineering or surveying services, including: Form SS 00 08 04 05 Page 13 of 24 BUSINESS LIABILITY COVERAGE FORM (a) The preparing, approving, or failure to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders, designs or drawings and specifications; or (b) Supervisory, inspection, architectural or engineering activities. The limits of insurance that apply to additional insureds are described in Section D. — Limits Of Insurance. How this insurance applies when other insurance is available to an additional insured is described in the Other Insurance Condition in Section E. — Liability And Medical Expenses General Conditions. No person or organization is an insured with respect to the conduct of any current or past partnership, joint venture or limited liability company that is not shown as a Named Insured in the Declarations. D. LIABILITY AND MEDICAL EXPENSES LIMITS OF INSURANCE 1. The Most We Will Pay The Limits of Insurance shown in the Declarations and the rules below fix the most we will pay regardless of the number of: a. Insureds; b. Claims made or "suits" brought; or c. Persons or organizations making claims or bringing "suits". 2. Aggregate Limits The most we will pay for: a. Damages because of "bodily injury" and "property damage" included in the "products -completed operations hazard" is the Products -Completed Operations Aggregate Limit shown in the Declarations. b. Damages because of all other "bodily injury", "property damage" or "personal and advertising injury", including medical expenses, is the General Aggregate Limit shown in the Declarations. This General Aggregate Limit applies separately to each of your "locations" owned by or rented to you. "Location" means premises involving the same or connecting lots, or premises whose connection is interrupted only by a street, roadway or right-of-way of a railroad. This General Aggregate limit does not apply to "property damage" to premises while rented to you or temporarily occupied by you with permission of the owner, arising out of fire, lightning or explosion. 3. Each Occurrence Limit Subject to 2.a. or 2.b above, whichever applies, the most we will pay for the sum of all damages because of all "bodily injury", "property damage" and medical expenses arising out of any one 'occurrence" is the Liability and Medical Expenses Limit shown in the Declarations. The most we will pay for all medical expenses because of "bodily injury" sustained by any one person is the Medical Expenses Limit shown in the Declarations. 4. Personal And Advertising Injury Limit Subject to 2.b. above, the most we will pay for the sum of all damages because of all "personal and advertising injury" sustained by any one person or organization is the Personal and Advertising Injury Limit shown in the Declarations. 5. Damage To Premises Rented To You Limit The Damage To Premises Rented To You Limit is the most we will pay under Business Liability Coverage for damages because of "property damage" to any one premises, while rented to you, or in the case of damage by fire, lightning or explosion, while rented to you or temporarily occupied by you with permission of the owner. In the case of damage by fire, lightning or explosion, the Damage to Premises Rented To You Limit applies to all damage proximately caused by the same event, whether such damage results from fire, lightning or explosion or any combination of these. 6. How Limits Apply To Additional Insureds The most we will pay on behalf of a person or organization who is an additional insured under this Coverage Part is the lesser of: a. The limits of insurance specified in a written contract, written agreement or permit issued by a state or political subdivision; or b. The Limits of Insurance shown in the Declarations. Such amount shall be a part of and not in addition to the Limits of Insurance shown in the Declarations and described in this Section. Page 14 of 24 Form SS 00 08 04 05 If more than one limit of insurance under this policy and any endorsements attached thereto applies to any claim or "suit", the most we will pay under this policy and the endorsements is the single highest limit of liability of all coverages applicable to such claim or "suit". However, this paragraph does not apply to the Medical Expenses limit set forth in Paragraph 3. above. The Limits of Insurance of this Coverage Part apply separately to each consecutive annual period and to any remaining period of less than 12 months, starting with the beginning of the policy period shown in the Declarations, unless the policy period is extended after issuance for an additional period of less than 12 months. In that case, the additional period will be deemed part of the last preceding period for purposes of determining the Limits of Insurance. E. LIABILITY AND MEDICAL EXPENSES GENERAL CONDITIONS 1. Bankruptcy Bankruptcy or insolvency of the insured or of the insured's estate will not relieve us of our obligations under this Coverage Part. 2. Duties In The Event Of Occurrence, Offense, Claim Or Suit a. Notice Of Occurrence Or Offense You or any additional insured must see to it that we are notified as soon as practicable of an "occurrence" or an offense which may result in a claim. To the extent possible, notice should include: (1) How, when and where the "occurrence" or offense took place; (2) The names and addresses of any injured persons and witnesses; and (3) The nature and location of any injury or damage arising out of the "occurrence" or offense. b. Notice Of Claim If a claim is made or "suit" is brought against any insured, you or any additional insured must: (1) Immediately record the specifics of the claim or "suit" and the date received; and (2) Notify us as soon as practicable. You or any additional insured must see to it that we receive a written notice of the claim or "suit" as soon as practicable. c. Assistance And Cooperation Of The Insured You and any other involved insured must: BUSINESS LIABILITY COVERAGE FORM (1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or "suit"; (2) Authorize us to obtain records and other information; (3) Cooperate with us in the investigation, settlement of the claim or defense against the "suit"; and (4) Assist us, upon our request, in the enforcement of any right against any person or organization that may be liable to the insured because of injury or damage to which this insurance may also apply. d. Obligations At The Insured's Own Cost No insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent. e. Additional Insured's Other Insurance If we cover a claim or "suit" under this Coverage Part that may also be covered by other insurance available to an additional insured, such additional insured must submit such claim or "suit" to the other insurer for defense and indemnity. However, this provision does not apply to the extent that you have agreed in a written contract, written agreement or permit that this insurance is primary and non-contributory with the additional insured's own insurance. f. Knowledge Of An Occurrence, Offense, Claim Or Suit Paragraphs a. and b. apply to you or to any additional insured only when such "occurrence", offense, claim or "suit" is known to: (1) You or any additional insured that is an individual; (2) Any partner, if you or an additional insured is a partnership; (3) Any manager, if you or an additional insured is a limited liability company; (4) Any "executive officer" or insurance manager, if you or an additional insured is a corporation; (5) Any trustee, if you or an additional insured is a trust; or (6) Any elected or appointed official, if you or an additional insured is a political subdivision or public entity. Form SS 00 08 04 05 Page 15 of 24 BUSINESS LIABILITY COVERAGE FORM This Paragraph f. applies separately to you and any additional insured. 3. Financial Responsibility Laws a. When this policy is certified as proof of financial responsibility for the future under the provisions of any motor vehicle financial responsibility law, the insurance provided by the policy for "bodily injury" liability and "property damage" liability will comply with the provisions of the law to the extent of the coverage and limits of insurance required by that law. b. With respect to "mobile equipment" to which this insurance applies, we will provide any liability, uninsured motorists, underinsured motorists, no-fault or other coverage required by any motor vehicle law. We will provide the required limits for those coverages. 4. Legal Action Against Us No person or organization has a right under this Coverage Form: a. To join us as a party or otherwise bring us into a "suit" asking for damages from an insured; or b. To sue us on this Coverage Form unless all of its terms have been fully complied with. A person or organization may sue us to recover on an agreed settlement or on a final judgment against an insured; but we will not be liable for damages that are not payable under the terms of this insurance or that are in excess of the applicable limit of insurance. An agreed settlement means a settlement and release of liability signed by us, the insured and the claimant or the claimant's legal representative. 5. Separation Of Insureds Except with respect to the Limits of Insurance, and any rights or duties specifically assigned in this policy to the first Named Insured, this insurance applies: a. As if each Named Insured were the only Named Insured; and b. Separately to each insured against whom a claim is made or "suit" is brought. 6. Representations a. When You Accept This Policy By accepting this policy, you agree: (1) The statements in the Declarations are accurate and complete; (2) Those statements are based upon representations you made to us; and (3) We have issued this policy in reliance upon your representations. b. Unintentional Failure To Disclose Hazards If unintentionally you should fail to disclose all hazards relating to the conduct of your business at the inception date of this Coverage Part, we shall not deny any coverage under this Coverage Part because of such failure. 7. Other Insurance If other valid and collectible insurance is available for a loss we cover under this Coverage Part, our obligations are limited as follows: a. Primary Insurance This insurance is primary except when b. below applies. If other insurance is also primary, we will share with all that other insurance by the method described in c. below. b. Excess Insurance This insurance is excess over any of the other insurance, whether primary, excess, contingent or on any other basis: (1) Your Work That is Fire, Extended Coverage, Builder's Risk, Installation Risk or similar coverage for "your work"; (2) Premises Rented To You That is fire, lightning or explosion insurance for premises rented to you or temporarily occupied by you with permission of the owner; (3) Tenant Liability That is insurance purchased by you to cover your liability as a tenant for "property damage" to premises rented to you or temporarily occupied by you with permission of the owner; (4) Aircraft, Auto Or Watercraft If the loss arises out of the maintenance or use of aircraft, "autos" or watercraft to the extent not subject to Exclusion g. of Section A. — Coverages. (5) Property Damage To Borrowed Equipment Or Use Of Elevators If the loss arises out of "property damage" to borrowed equipment or the use of elevators to the extent not subject to Exclusion k. of Section A. — Coverages. Page 16 of 24 Form SS 00 08 04 05 (6) When You Are Added As An Additional Insured To Other Insurance That is other insurance available to you covering liability for damages arising out of the premises or operations, or products and completed operations, for which you have been added as an additional insured by that insurance; or (7) When You Add Others As An Additional Insured To This Insurance That is other insurance available to an additional insured. However, the following provisions apply to other insurance available to any person or organization who is an additional insured under this Coverage Part: (a) Primary Insurance When Required By Contract This insurance is primary if you have agreed in a written contract, written agreement or permit that this insurance be primary. If other insurance is also primary, we will share with all that other insurance by the method described in c. below. (b) Primary And Non -Contributory To Other Insurance When Required By Contract If you have agreed in a written contract, written agreement or permit that this insurance is primary and non-contributory with the additional insured's own insurance, this insurance is primary and we will not seek contribution from that other insurance. Paragraphs (a) and (b) do not apply to other insurance to which the additional insured has been added as an additional insured. When this insurance is excess, we will have no duty under this Coverage Part to defend the insured against any "suit" if any other insurer has a duty to defend the insured against that "suit". If no other insurer defends, we will undertake to do so, but we will be entitled to the insured's rights against all those other insurers. BUSINESS LIABILITY COVERAGE FORM When this insurance is excess over other insurance, we will pay only our share of the amount of the loss, if any, that exceeds the sum of: (1) The total amount that all such other insurance would pay for the loss in the absence of this insurance; and (2) The total of all deductible and self- insured amounts under all that other insurance. We will share the remaining loss, if any, with any other insurance that is not described in this Excess Insurance provision and was not bought specifically to apply in excess of the Limits of Insurance shown in the Declarations of this Coverage Part. c. Method Of Sharing If all the other insurance permits contribution by equal shares, we will follow this method also. Under this approach, each insurer contributes equal amounts until it has paid its applicable limit of insurance or none of the loss remains, whichever comes first. If any of the other insurance does not permit contribution by equal shares, we will contribute by limits. Under this method, each insurer's share is based on the ratio of its applicable limit of insurance to the total applicable limits of insurance of all insurers. 8. Transfer Of Rights Of Recovery Against Others To Us a. Transfer Of Rights Of Recovery If the insured has rights to recover all or part of any payment, including Supplementary Payments, we have made under this Coverage Part, those rights are transferred to us. The insured must do nothing after loss to impair them. At our request, the insured will bring "suit" or transfer those rights to us and help us enforce them. This condition does not apply to Medical Expenses Coverage. b. Waiver Of Rights Of Recovery (Waiver Of Subrogation) If the insured has waived any rights of recovery against any person or organization for all or part of any payment, including Supplementary Payments, we have made under this Coverage Part, we also waive that right, provided the insured waived their rights of recovery against such person or organization in a contract, agreement or permit that was executed prior to the injury or damage. Form SS 00 08 04 05 Page 17 of 24 BUSINESS LIABILITY COVERAGE FORM F. OPTIONAL ADDITIONAL INSURED COVERAGES If listed or shown as applicable in the Declarations, one or more of the following Optional Additional Insured Coverages also apply. When any of these Optional Additional Insured Coverages apply, Paragraph 6. (Additional Insureds When Required by Written Contract, Written Agreement or Permit) of Section C., Who Is An Insured, does not apply to the person or organization shown in the Declarations. These coverages are subject to the terms and conditions applicable to Business Liability Coverage in this policy, except as provided below: 1. Additional Insured - Designated Person Or Organization WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: a. In the performance of your ongoing operations; or b. In connection with your premises owned by or rented to you. 2. Additional Insured - Managers Or Lessors Of Premises a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured - Designated Person Or Organization; but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to you and shown in the Declarations. b. With respect to the insurance afforded to these additional insureds, the following additional exclusions apply: This insurance does not apply to: (1) Any 'occurrence" which takes place after you cease to be a tenant in that premises; or (2) Structural alterations, new construction or demolition operations performed by or on behalf of such person or organization. 3. Additional Insured - Grantor Of Franchise WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured - Grantor Of Franchise, but only with respect to their liability as grantor of franchise to you. 4. Additional Insured - Lessor Of Leased Equipment a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured — Lessor of Leased Equipment, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your maintenance, operation or use of equipment leased to you by such person(s) or organization(s). b. With respect to the insurance afforded to these additional insureds, this insurance does not apply to any 'occurrence" which takes place after you cease to lease that equipment. 5. Additional Insured - Owners Or Other Interests From Whom Land Has Been Leased a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured — Owners Or Other Interests From Whom Land Has Been Leased, but only with respect to liability arising out of the ownership, maintenance or use of that part of the land leased to you and shown in the Declarations. b. With respect to the insurance afforded to these additional insureds, the following additional exclusions apply: This insurance does not apply to: (1) Any 'occurrence" that takes place after you cease to lease that land; or (2) Structural alterations, new construction or demolition operations performed by or on behalf of such person or organization. 6. Additional Insured - State Or Political Subdivision — Permits a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the state or political subdivision shown in the Declarations as an Additional Page 18 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM Insured — State Or Political Subdivision - (e) Any failure to make such Permits, but only with respect to inspections, adjustments, tests or operations performed by you or on your servicing as the vendor has agreed behalf for which the state or political to make or normally undertakes to subdivision has issued a permit. make in the usual course of b. With respect to the insurance afforded to business, in connection with the these additional insureds, the following distribution or sale of the products; additional exclusions apply: (f) Demonstration, installation, This insurance does not apply to: servicing or repair operations, except such operations performed (1) "Bodily injury", "property damage" or at the vendor's premises in "personal and advertising injury" connection with the sale of the arising out of operations performed for product; the state or municipality; or (g) Products which, after distribution (2) "Bodily injury" or "property damage" or sale by you, have been labeled included in the "product -completed or relabeled or used as a operations" hazard. container, part or ingredient of any 7. Additional Insured —Vendors other thing or substance by or for a. WHO IS AN INSURED under Section C. is the vendor; or amended to include as an additional (h) "Bodily injury" or "property insured the person(s) or organization(s) damage" arising out of the sole (referred to below as vendor) shown in the negligence of the vendor for its Declarations as an Additional Insured - own acts or omissions or those of Vendor, but only with respect to "bodily its employees or anyone else injury" or "property damage" arising out of acting on its behalf. However, this "your products" which are distributed or exclusion does not apply to: sold in the regular course of the vendor's (i) The exceptions contained in business and only if this Coverage Part Subparagraphs (d) or (f); or provides coverage for "bodily injury" or "property damage" included within the (ii) Such inspections, "products -completed operations hazard". adjustments, tests or servicing as the vendor has agreed to b. The insurance afforded to the vendor is make or normally undertakes subject to the following additional exclusions: to make in the usual course of (1) This insurance does not apply to: business, in connection with (a) "Bodily injury" or "property the distribution or sale of the damage" for which the vendor is products. obligated to pay damages by (2) This insurance does not apply to any reason of the assumption of insured person or organization from liability in a contract or agreement. whom you have acquired such This exclusion does not apply to products, or any ingredient, part or liability for damages that the container, entering into, vendor would have in the absence accompanying or containing such of the contract or agreement; products. (b) Any express warranty 8. Additional Insured — Controlling Interest unauthorized by you; WHO IS AN INSURED under Section C. is (c) Any physical or chemical change amended to include as an additional insured in the product made intentionally the person(s) or organization(s) shown in the by the vendor; Declarations as an Additional Insured — (d) Repackaging, unless unpacked Controlling Interest, but only with respect to solely for the purpose of inspection, their liability arising out of: demonstration, testing, or the a. Their financial control of you; or substitution of parts under b. Premises they own, maintain or control instructions from the manufacturer, while you lease or occupy these premises. and then repackaged in the original container; Form SS 00 08 04 05 Page 19 of 24 BUSINESS LIABILITY COVERAGE FORM This insurance does not apply to structural alterations, new construction and demolition operations performed by or for that person or organization. 9. Additional Insured — Owners, Lessees Or Contractors — Scheduled Person Or Organization a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured — Owner, Lessees Or Contractors, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: (1) In the performance of your ongoing operations for the additional insured(s); or (2) In connection with "your work" performed for that additional insured and included within the "products - completed operations hazard", but only if this Coverage Part provides coverage for "bodily injury" or "property damage" included within the "products -completed operations hazard". b. With respect to the insurance afforded to these additional insureds, this insurance does not apply to "bodily injury", "property damage" or "personal an advertising injury" arising out of the rendering of, or the failure to render, any professional architectural, engineering or surveying services, including: (1) The preparing, approving, or failure to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders, designs or drawings and specifications; or (2) Supervisory, inspection, architectural or engineering activities. 10. Additional Insured — Co -Owner Of Insured Premises WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or Organization(s) shown in the Declarations as an Additional Insured — Co - Owner Of Insured Premises, but only with respect to their liability as co-owner of the premises shown in the Declarations. The limits of insurance that apply to additional insureds are described in Section D. — Limits Of Insurance. How this insurance applies when other insurance is available to an additional insured is described in the Other Insurance Condition in Section E. — Liability And Medical Expenses General Conditions. G. LIABILITY AND MEDICAL EXPENSES DEFINITIONS 1. "Advertisement" means the widespread public dissemination of information or images that has the purpose of inducing the sale of goods, products or services through: a. (1) Radio; (2) Television; (3) Billboard; (4) Magazine; (5) Newspaper; b. The Internet, but only that part of a web site that is about goods, products or services for the purposes of inducing the sale of goods, products or services; or c. Any other publication that is given widespread public distribution. However, "advertisement" does not include: a. The design, printed material, information or images contained in, on or upon the packaging or labeling of any goods or products; or b. An interactive conversation between or among persons through a computer network. 2. "Advertising idea" means any idea for an "advertisement". 3. "Asbestos hazard" means an exposure or threat of exposure to the actual or alleged properties of asbestos and includes the mere presence of asbestos in any form. 4. "Auto" means a land motor vehicle, trailer or semi -trailer designed for travel on public roads, including any attached machinery or equipment. But "auto" does not include "mobile equipment". 5. "Bodily injury" means physical: a. Injury; b. Sickness; or c. Disease sustained by a person and, if arising out of the above, mental anguish or death at any time. 6. "Coverage territory" means: Page 20 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM a. The United States of America (including its b. You have failed to fulfill the terms of a territories and possessions), Puerto Rico contract or agreement; and Canada; if such property can be restored to use by: b. International waters or airspace, but only if a. The repair, replacement, adjustment or the injury or damage occurs in the course removal of "your product" or "your work"; of travel or transportation between any or places included in a. above; b. Your fulfilling the terms of the contract or c. All other parts of the world if the injury or agreement. damage arises out of: 12. "Insured contract" means: (1) Goods or products made or sold by you in the territory described in a. above; a. A contract for a lease of premises. However, that portion of the contract for a (2) The activities of a person whose home lease of premises that indemnifies any is in the territory described in a. person or organization for damage by fire, above, but is away for a short time on lightning or explosion to premises while your business; or rented to you or temporarily occupied by (3) "Personal and advertising injury" you with permission of the owner is offenses that take place through the subject to the Damage To Premises Internet or similar electronic means of Rented To You limit described in Section communication D. — Liability and Medical Expenses Limits provided the insured's responsibility to pay of Insurance. damages is determined in the United States of b. A sidetrack agreement; America (including its territories and c. Any easement or license agreement, possessions), Puerto Rico or Canada, in a including an easement or license "suit" on the merits according to the agreement in connection with construction substantive law in such territory, or in a or demolition operations on or within 50 settlement we agree to. feet of a railroad; 7. "Electronic data" means information, facts or d. Any obligation, as required by ordinance, programs: to indemnify a municipality, except in a. Stored as or on; connection with work for a municipality; b. Created or used on; or e. An elevator maintenance agreement; or c. Transmitted to or from f. That part of any other contract or computer software, including systems and agreement pertaining to your business applications software, hard or floppy disks, (including an indemnification of a CD-ROMS, tapes, drives, cells, data municipality in connection with work processing devices or any other media which performed for a municipality) under which are used with electronically controlled you assume the tort liability of another equipment. party to pay for "bodily injury" or "property 8. "Employee" includes a "leased worker". damage" to a third person or organization, "bodily "property "Employee" does not include a "temporary provided the injury" or worker". damage" is caused, in whole or in part, by you or by those acting on your behalf. 9. "Executive officer" means a person holding Tort liability means a liability that would be any of the officer positions created by your imposed by law in the absence of any charter, constitution, by-laws or any other contract or agreement. similar governing document. Paragraph f. includes that part of any 10. "Hostile fire" means one which becomes contract or agreement that indemnifies a uncontrollable or breaks out from where it was railroad for "bodily injury" or "property intended to be. damage" arising out of construction or 11. "Impaired property" means tangible property, demolition operations within 50 feet of any other than "your product" or "your work", that railroad property and affecting any railroad cannot be used or is less useful because: bridge or trestle, tracks, road -beds, tunnel, a. It incorporates "your product" or "your work" underpass or crossing. that is known or thought to be defective, However, Paragraph f. does not include deficient, inadequate or dangerous; or that part of any contract or agreement: Form SS 00 08 04 05 Page 21 of 24 BUSINESS LIABILITY COVERAGE FORM (1) That indemnifies an architect, (1) Power cranes, shovels, loaders, engineer or surveyor for injury or diggers or drills; or damage arising out of: (2) Road construction or resurfacing (a) Preparing, approving or failing to equipment such as graders, scrapers prepare or approve maps, shop or rollers; drawings, opinions, reports, e. Vehicles not described in a., b., c., or d. surveys, field orders, change above that are not self-propelled and are orders, designs or drawings and maintained primarily to provide mobility to specifications; or permanently attached equipment of the (b) Giving directions or instructions, following types: or failing to give them, if that is the (1) Air compressors, pumps and primary cause of the injury or generators, including spraying, damage; or welding, building cleaning, (2) Under which the insured, if an geophysical exploration, lighting and architect, engineer or surveyor, well servicing equipment; or assumes liability for an injury or (2) Cherry pickers and similar devices damage arising out of the insured's used to raise or lower workers; rendering or failure to render professional services, including those f. Vehicles not described in a., b., c., or d. listed in (1) above and supervisory, above maintained primarily for purposes inspection, architectural or other than the transportation of persons or engineering activities. cargo. 13. "Leased worker" means a person leased to However, self-propelled vehicles with the you by a labor leasing firm under an following types of permanently attached agreement between you and the labor leasing equipment are not "mobile equipment" but firm, to perform duties related to the conduct of will be considered "autos": your business. "Leased worker" does not (1) Equipment, of at least 1,000 pounds include a "temporary worker". gross vehicle weight, designed 14. "Loading or unloading" means the handling of primarily for: property: (a) Snow removal; a. After it is moved from the place where it is (b) Road maintenance, but not accepted for movement into or onto an construction or resurfacing; or aircraft, watercraft or "auto"; (c) Street cleaning; b. While it is in or on an aircraft, watercraft or (2) Cherry pickers and similar devices "auto"; or mounted on automobile or truck c. While it is being moved from an aircraft, chassis and used to raise or lower watercraft or "auto" to the place where it is workers; and finally delivered; (3) Air compressors, pumps and but "loading or unloading" does not include the generators, including spraying, movement of property by means of a mechanical welding, building cleaning, device, other than a hand truck, that is not geophysical exploration, lighting and attached to the aircraft, watercraft or "auto". well servicing equipment. 15. "Mobile equipment" means any of the following 16. "Occurrence" means an accident, including types of land vehicles, including any attached continuous or repeated exposure to substantially machinery or equipment: the same general harmful conditions. a. Bulldozers, farm machinery, forklifts and 17. "Personal and advertising injury" means injury, other vehicles designed for use principally including consequential "bodily injury", arising off public roads; out of one or more of the following offenses: b. Vehicles maintained for use solely on or a. False arrest, detention or imprisonment; next to premises you own or rent; b. Malicious prosecution; c. Vehicles that travel on crawler treads; d. Vehicles, whether self-propelled or not, on which are permanently mounted: Page 22 of 24 Form SS 00 08 04 05 c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that the person occupies, committed by or on behalf of its owner, landlord or lessor; d. Oral, written or electronic publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; e. Oral, written or electronic publication of material that violates a person's right of privacy; f. Copying, in your "advertisement", a person's or organization's "advertising idea" or style of "advertisement"; g. Infringement of copyright, slogan, or title of any literary or artistic work, in your "advertisement"; or h. Discrimination or humiliation that results in injury to the feelings or reputation of a natural person. 18. "Pollutants" means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed. 19. "Products -completed operations hazard"; a. Includes all "bodily injury" and "property damage" occurring away from premises you own or rent and arising out of "your product" or "your work" except: (1) Products that are still in your physical possession; or (2) Work that has not yet been completed or abandoned. However, "your work" will be deemed to be completed at the earliest of the following times: (a) When all of the work called for in your contract has been completed. (b) When all of the work to be done at the job site has been completed if your contract calls for work at more than one job site. (c) When that part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project. BUSINESS LIABILITY COVERAGE FORM Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed. The "bodily injury" or "property damage" must occur away from premises you own or rent, unless your business includes the selling, handling or distribution of "your product" for consumption on premises you own or rent. b. Does not include "bodily injury" or "property damage" arising out of: (1) The transportation of property, unless the injury or damage arises out of a condition in or on a vehicle not owned or operated by you, and that condition was created by the "loading or unloading" of that vehicle by any insured; or (2) The existence of tools, uninstalled equipment or abandoned or unused materials. 20. "Property damage" means: a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of "occurrence" that caused it. As used in this definition, "electronic data" is not tangible property. 21. "Suit" means a civil proceeding in which damages because of "bodily injury", "property damage" or "personal and advertising injury" to which this insurance applies are alleged. "Suit" includes: a. An arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with our consent; or b. Any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent. 22. "Temporary worker" means a person who is furnished to you to substitute for a permanent "employee" on leave or to meet seasonal or short-term workload conditions. 23. "Volunteer worker" means a person who: a. Is not your "employee"; Form SS 00 08 04 05 Page 23 of 24 BUSINESS LIABILITY COVERAGE FORM b. Donates his or her work; c. Acts at the direction of and within the scope of duties determined by you; and d. Is not paid a fee, salary or other compensation by you or anyone else for their work performed for you. 24. "Your product": a. Means: (1) Any goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by: (a) You; (b) Others trading under your name; or (c) A person or organization whose business or assets you have acquired; and (2) Containers (other than vehicles), materials, parts or equipment furnished in connection with such goods or products. b. Includes: (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your product"; and (2) The providing of or failure to provide warnings or instructions. c. Does not include vending machines or other property rented to or located for the use of others but not sold. 25. "Your work": a. Means: (1) Work or operations performed by you or on your behalf; and (2) Materials, parts or equipment furnished in connection with such work or operations. b. Includes: (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your work"; and (2) The providing of or failure to provide warnings or instructions. Page 24 of 24 Form SS 00 08 04 05 tiles a CERTIFICATE OF LIABILITY INSURANCE dA;E (MMpDDfYYYY) 05/0212017 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER, IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate /holder in lieu of such endorsement($). PRODUCER I 'or"" STEVE SCHNEID'ER. NAME: _ PHONEn. Exll:(714) 838-0693 j Noy: (714) 838-943$ Silver Creek insurance Agency, Inc. E-MAIL .com sieve Silvercreeka enc ADDRESS: g y 17742 Irvine Blvd INSURERS t AFFORDING COVERAGE Suite 203 INSURERA: SENTINEL INS CO LTD 11000 Tustin CA 92780 INSURED a : _INSURER INSURER c White Nelson Diehl Evans LLP ollsuRER o 2875 Michelle Ste 300 INSURER E :. �..� T 0 9 Irvine CA 9260ti INSURER F HL_ COVERAGES CERTIFICATE NUMBER. REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. LTR n.._..., TYPE OF INSURANCE A'r�DL 5 11BF! .._ ... POLICY NUMBER M. DDY EFF MI POLICY EXP LIMITS Santa Ana CA 92701 X COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE $ 1,000,4700 CLAIMS -MADE D OCCUR 4 DAMAGE TGRENTED PREMISES nca $ 1,000,000 MED EXP (Any ore person) $ 10,000 PERSONAL a ADV INJURY S 1.000,000 A 57SBABV15586 06/01/2017 06101/2018 GEN'L AGGREGATE LIMIT APP PER: GENERAL. AGGREGATE S 2,000,00 11 �LIES - 1 POLICY r JEGOT Y' LOC PRODUCTS - COMPIOP AGG s 2,000,000 S OTHER: AUTOMOBILE LIABILITY E, MBIIIED4SINGLE. LIMIT $ 1,000,000 BODILY INJURY (Per person) S ANY AUTO A OWNED SCHEDULED AUTOS ONLY AUTOS 57SBABH5586 06/01/2017 06/01/2018 BODILY INJURY (Per aecddenil'S PROPERTY DAMAGE Per accident S. HIRED I NON -OWNED AUTOS ONLY 4 AUTOS ONLY S d UMBRELLA LIAR X OCCUR EACH OCCURRENCE s 4,000,000 AGGREGATE s 4,000,000 A EXCESS LIAO oLAIMS-MADE 57SBABH5586 06/0112017 06/01/2018 DED X RETENTIONS 10000 PRICOMP OPS AGG s 4,000,000 A WORKERS COMPENSATION AND EMPLOYERS' LIABIUTY YIN ANY PROPRIETOR/PARTNEPJEXECUTIVE �N° OFFICEWMEMSER EXCLUDED? i '(Mandatary in NH) N I' A � 57WECDX4233 06/01/2017 06/0112018 PER OTH.. STATUTE ER E.L.. EACH ACCIDENT $ 1,000,000 E.L. DISEASE - EA EMPLOYEO S 1,000,000 IP yes, desCrihc under DE86RIPTIONOFOPERATIONS below `t E.L. DISEASE - POLiCYLIMIT $ 1.,000„000 I DESCRIPTION OF OPERATIONS 1 LOCATIONS i VEHICLES (AC ORD 101'., Additional Remarks Schedule, may be attachedif more space is required) Those usual to the insured's operations. The City of Santa Ana, its officers, employees, agents, volunteers and representatives are named as additional insured per additional Insured form 55000080405 attached to this policy. Business liability waiver of subrogation applies, Coverage is primary and non-contrubutory. 30 day advanced notice of cancellation, 10 day for non-payment. CERTIFICATE HOLDER CANCELLATION ACORD 25 (2016103) (D 1988-2015 ACORD CORPORATION„ All rights resented. The ACORD name and logo are registered marks of ACORD SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS, City of Santa Ana AUTHORIZED REPRESENTATIVE 20 Civic Center Plaza Santa Ana CA 92701 ACORD 25 (2016103) (D 1988-2015 ACORD CORPORATION„ All rights resented. The ACORD name and logo are registered marks of ACORD