HomeMy WebLinkAbout1990-03-20; Municipal Water District; 007; Selecting Auditor for Audit of CMWDI . * . . . . B# d&Y &w
ITG..3/20/90
EPT.CMWD
f==lWD - AGENDA “ILL
I/’ -.
TITLE:
SELECTING AUDITOR FOR AUDIT OF CARLSBAD
MUNICIPAL WATER DISTRICT FOR PERIOD
ENDING DECEMBER 31, 1989
3ECOMMENDED ACTION:
Accept Resolution No. 650 accepting the proposal of KPMG Peat Marwick
for audit services and evaluation of the financial condition of Carlsbad
Municipal Water District and authori.zing the President to execute an
agreement to provide services for the period ending December 31, 1989.
ITEM EXPLANATION:
The City of Carlsbad assumed control of the Carlsbad Municipal Water
District (CMWD) on January 1, 1990. In order to fully integrate the
District as a subsidiary of the City of Carlsbad, audited financial
statements as of December 31, 1989 are necessary. Further, an independent
assessment of the District's organizational, operational, and financial
condition would greatly assist staff, the Board and Council in obtaining a
better understanding of the District's business activities.
Staff is recommending that the services of KPMG Peat Marwick be retained to
conduct the audit and perform the evaluation. KPMG Peat Marwick performed
the District's audit for the period ending June 30, 1989.
The proposed sources include:
1) A financial audit of records for the period ending 12/31/89.
2) A business review of operating practices, procedures and policies.
3) A general review of the condition of the entity including
investments, assets, contracts, budgets and insurance.
The proposed program of audit and business review will give the Board a base
line for operation of CMWD after the merger with the City.
FISCAL IMPACT:
The proposed audit and business review services will cost $30,000. Funding
for this expense will be provided through an appropriation of $30,000 from
the CMWD Unappropriated Operational Reserves to the Special Studies Account.
The appropriation of these funds will reduce the unappropriated reserve
balance to $513,000.
EXHIBITS:
1. Exhibit A, Resolution No. . L5b accepting the Proposal of KPMG Peat
Marwick for audit services and evaluation of the financial condition of
Carlsbad Municipal Water District and authorizing the President to
execute an agreement to provide services for the period ending December
31, 1989.
Page Two of Agenda Bill No. &Qd~
2. Exhibit B, Agreement between the City of Carlsbad and KPMG Peat Marwick
to provide professional services related to the Carlsbad Municipal Water
District for the Period Ended December 31, 1989.
3. Exhibit C, KPMG Peat Marwick letter dated March 5, 1990.
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RESOLUTION NO. 5 650
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, ACCEPTING THE PROPOSAL OF KPMG PEAT MARWICK
FOR THE PROVISION OF PROFESSIONAL SERVICES TO CARLSBAD
MUNICIPAL WATER DISTRICT FOR THE PERIOD ENDING DECEMBER 31,
1989 AND AUTHORIZING THE PRESIDENT TO EXECUTE AN AGREEMENT
FOR AUDIT SERVICES
WHEREAS, the District is desirous of performing an audit of the
financial statements of Carlsbad Municipal Water District and obtaining
an evaluation of the District's organizational, operational and financial
condition as of December 31, 1990; and
WHEREAS, the firm of KPMG Peat Marwick performed the District's
audit for the period ending June 30, 1989; and
WHEREAS, City staff has recommended that the services of KPMG Peat
Marwick be retained to perform the District's six month audit from July
1, 1989 to December 31, 1989; and
WHEREAS, KPMG Peat Marwick has also proposed to perform a business
review of the District for the period ended December 31, 1989.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the
Carlsbad Municipal Water District as follows:
1. That the above recitations are true and correct.
2. That the proposal of KPMG Peat Marwick is hereby accepted.
3. That the President is authorized to sign the agreement for
services shown in Exhibit B attached hereto.
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1 4. That the amount of $30,000 is hereby appropriated to the Special
2 Studies Account from the Unappropriated Operational Reserve to support the
3 costs of these services.
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5 PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad
6 Municipal Water District Board of Directors held on the 20th day of
7 March , 1990, by the following vote, to wit:
8 AYES: Board Members Lewis, Kulchin, Pettine, Mamaux and Larson
9 NOES: None
10 /I ABSENT: None
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13 ATTEST:
14 d&aPk&
ALETHA L. RAUTENKRANZ, Secretarp
15 (SEAL)
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AGREEMENT TO PROVIDE
SERVICES RELATED TO THE REVIEW OF OPERATIONS
CARLSBAD MUNICIPAL WATER DISTRICT
FOR THE PERIOD ENDING DECEMBER 31, 1989
THIS AGREEMENT, entered into this 27& day of 1990, and
effective immediately by and between KPMG Peat Marwick (hereinafter'called the
"Auditor") and the Carlsbad Municipal Water District (hereinafter called "CMWD"),
WITNESSETH THAT,
WHEREAS, CMWD intends to conduct an audit of its financial condition; and
WHEREAS, Auditor possesses the necessary skills and qualifications to provide
the services required by CMWD, and;
WHEREAS, CMWD desires to engage Auditor to perform the services as described in
the scope of services below.
NOW, THEREFORE, the parties hereto mutually agree as follows:
(1) Employment of Auditor. CMWD agrees to engage Auditor and Auditor hereby
agrees to perform the following services.
(2) ScoDe of Services. Auditor shall do, perform, and carry out in a good
and professional manner the following services:
A) Audit Operations:
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2.
3.
4.
Objective. Auditor is to audit CMWD's financial statements and
assist District staff and Board in assessing the organizational,
operational, and financial aspects of CMWD as of and for the six
months ended December 31, 1989.
Audit Standards. Auditor shall conduct the examination in
accordance with generally accepted auditing standards and
procedures applicable to governmental units.
Procedures. Auditor is to perform tests of the accounting
records and such other procedures as described in the KPMG Peat
Marwick letter dated March 5, 1990 (Exhibit A).
Reporting. Auditor is to provide audited financial statements
and a written evaluation of the District. Auditor shall provide
one reproducible copy of the report to the City of Carlsbad
Finance Director.
B) Operation Review:
Auditor is to provide a business review as described in Auditor's
letter dated March 5, 1990, Exhibit B attached hereto. The scope
of services, reporting, procedures and emphasis shall be as shown
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
in Exhibit B. One reproducible copy of the fiscal report shall be provided to the City of Carlsbad Finance Director.
Time of Performance. The services to be performed hereunder by Auditor shall be undertaken and completed in such sequence as to assure their
expeditious completion and best carry out the purposes of the agreement.
All services required hereunder shall be completed by April 30, 1990.
Comoensation. City agrees to pay Auditor a sum not to exceed thirty
thousand dollars ($30,000) for all services required herein. Billing
shall be on an actual time and materials basis up to this limit.
Method of Pavment. Payment will be made by CMWD to Auditor up to the
amount agreed upon in Paragraph 4 as follows: Auditor will provide a
progress billing to CMWD. Final payment will be made upon acceptance
of the complete audit by CMWD.
Chanses. CMWD may, from time to time, require changes in the scope of
services of Auditor to be performed hereunder. Such changes, which are
mutually agreed upon by and between CMWD and Auditor, shall be
incorporated in written amendment to this agreement.
Services and Materials to be Furnished bv CMWD. CMWD shall provide
Auditor with reasonable access to any material in the possession of CMWD.
CMWD will further make appropriate CMWD staff available to provide
direction and input into the review process as necessary.
Termination of Aqreement for Cause. If, through any cause, Auditor
shall fail to fulfil1 in timely and proper manner his obligation under
this agreement, CMWD shall thereupon have the right to terminate this
agreement by giving written notice to Auditor of such termination and
specifying the effective data thereof, at least five (5) days before
the effective date of such termination.
Information and ReDOrtS. Auditor shall, at such time and in form as CMWD
may require, furnish periodic reports concerning the status of the
project.
Records and Insoection. Auditor shall maintain full and accurate records
within respect to all matters covered under this agreement. CMWD shall
have free access at all proper times to such records, and the right to
examine and audit the same and to make transcripts therefrom, and to
inspect all data, documents, proceedings, and activities.
Accomplishment of Project. Auditor shall commence, carry on, and
complete the project with all practicable dispatch, in a sound,
economical, and efficient manner in accordance with the provisions
thereof and all applicable laws.
Matters to be Disreqarded. The titles of the several sections,
subsections, and paragraphs set forth in this contract are inserted for
convenience of reference only and shall be disregarded in construing or
interpreting any of the provisions of this contract.
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(13) Completeness of Contract. This agreement and any additional or
supplementary document or documents incorporated herein by specific
reference contain all the terms and conditions agreed upon by the parties
hereto, and no other agreements, oral or otherwise, regarding the subject
matter of this contract or any part thereof shall have any validity or
bind any of the parties hereto.
(14) CMWD Not Obliqated to Third Parties. CMWD shall not be obligated or
liable hereunder to any party other than Auditor.
(15) When Riqhts and Remedies Not Waived. In no event shall the making by
CMWD of any payment to Auditor constitute or be construed as a waiver
by CMWD of any breach of covenant, or any default which may then exist,
on the part of Auditor, and the making of any such payment by CMWD while
any such breach or default shall exist in no way impair or prejudice any
right or remedy available to CMWD in respect to such breach or default.
(16) Personnel. Auditor represents that he has, or will secure at his own
expense, all personnel required in performing the services under this
agreement. All of the services required hereunder will be performed by
Auditor or under his supervision, and all personnel engaged in the work
shall be qualified to perform such services.
(17) Notices. Any notices, bills, invoices, or reports required by this
agreement shall be sufficient if sent by the parties in the United States
mail, postage paid, to the address noted below:
Carlsbad Municipal Water District
James F. Elliott, Finance Director
1200 Elm Avenue
Carlsbad, CA 92008
KPMG Peat Marwick
750 B Street
San Diego, CA 92101
W3) Covenant aqainst Continqent Fees. Auditor warrants that their firm has
not employed or retained any company or person, other than a bona fide
employee working for Auditor, to solicit or secure this agreement, and
that Auditor has not paid or agreed to pay any company or person, other
than a bona fide employee, any fee, commission, percentage, brokerage
fee, first or any other consideration contingent upon, or resulting from,
the award or making this agreement. For beach or violation of this
warranty, City shall have the right to annul this agreement without
liability, or, in its discretion, to deduct from the agreement price or
consideration, or otherwise recover, the full amount of such fee,
commission, percentage, brokerage fee, gift or contingent fee.
WV Nondiscrimination Clause. Auditor shall comply with applicable State
and Federal laws regarding nondiscrimination.
(20) Termination of Contract. In the event of Auditor's failure to prosecute,
deliver or perform the work as provided for in this agreement, CMWD may
terminate this agreement for nonperformance by notifying Auditor by
certified mail of the termination of the agreement. Auditor, thereupon,
has five (5) working days to deliver any and all documents owned by CMWD
under this agreement and all work in progress to the City of Carlsbad
Finance Director. The City of Carlsbad Finance Director shall make a
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(21)
(22)
determination of fact based upon the documents delivered to CMWD the
percentage of work which Auditor has performed that is usable and of
worth to CMWD having the agreement completed. Based upon that funding
as reported to the Board of Directors, the Board of Directors shall
determine the final payment of the agreement.
Disoutes. If a dispute should arise regarding the performance of work
under this agreement, the following procedure shall be used to resolve
any questions of fact or interpretation not otherwise settled by
agreement between parties. Such questions, if they become identified
as a part of a dispute among persons operating under the provisions of
this agreement, shall be reduced to writing by the principal of Auditor
or the City of Carlsbad Finance Director. A copy of such documented
dispute shall be forwarded to both parties involved along with
recommended methods of resolution which would be of benefit to both
parties. The City of Carlsbad Finance Director or principal receiving
the letter shall reply to the letter along with a recommended method of
resolution within ten (10) calendar days. If the resolution thus
obtained is unsatisfactory to the aggrieved party, a letter outlining
the dispute shall be forwarded to the Board of Directors for their
resolution through the office of the Executive Manager. The Board of
Directors may then opt to consider the directed solution to the problem.
In such cases, the action of the Board of Directors shall be binding
upon the parties involved,, although nothing in this procedure shall
prohibit the parties seeking remedies available to them at law.
Susoension or Termination of Services. This agreement may be terminated
by either party upon tendering thirty (30) days written notice to the
other party. In the event of such suspensions or termination, upon
request of CMWD, Auditor shall assemble the work product and put same
in order to proper filing and closing and deliver said product to CMWD.
In the event of termination, Auditor shall be paid for work performed
to the termination date; however, the total shall not exceed the
guaranteed total maximum. CMWD shall make the final determination as
to the portions of tasks completed and the compensation to be made.
Compensation is to be made in compliance with the Code of Federal
Regulations.
(23) Status of the Auditor. Auditor shall perform the services provided for
herein in Auditor's own way as an independent contractor and in pursuit
of Auditor's independent calling, and not as an employee of CMWD.
Auditor shall be under control of CMWD only as to the result to be
accomplished and the personnel assigned to the project, but shall consult
with CMWD as provided for in the request for proposal.
Auditor is an independent contractor of CMWD. The payment made to
Auditor pursuant to this agreement shall be the full and complete
compensation to which Auditor is entitled pursuant this agreement. CMWD
shall not make any federal or state tax withholdings on behalf of
Auditor. CMWD shall not be required to pay any workers' compensation
insurance on behalf of Auditor. Auditor agrees to indemnify CMWD for
any tax, retirement contribution, social security, overtime payment,
workers' compensation payment which CMWD may be required to make on
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behalf of Auditor payment which CMWD may be required to make on behalf
of Auditor or any employee of Auditor for work done under this agreement.
Auditor shall be aware of the requirements of the Immigration Reform
and Control Act of 1985 (8 USC Sec. 1101 - 1525) and shall comply with
those requirements, including, but not limited to, verifying the
eligibility for employment of all agents, employees, sub-contractors
and consultants that are included in this agreement.
(24) Ownership of Documents. All plans, studies, sketches, drawings, and
reports and specifications as herein required are the property of CMWD,
whether the work for which they are made be expected or not. In the
event this contract is terminated, all documents, plans, specifications,
drawings, reports and studies shall be delivered forthwith to CMWD.
Auditor shall have the right to make one copy of all documents for
his/her records.
IN WITNESS WHEREOF, City and Auditor have executed this agreement as of the date
first written above.
President
ATTEST:
By:
John H. Davis
Partner
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Mr. Jamq F. Elliott Finance lIze!ctor Ci of Carlsbad 2% El4 Avenue lB2uW~cl, California 92008= 1989
Dear Jim:
As requested, we are writing to provide statements of Carlsbad Municipal understanding of that engagement
We will conduct our audit in accordance with generally accepted auditing standards with the objective of expressing an opinion on the District’s financial statements as of and for the six
months ended December 31, 1989. It should be understood that these financial statements are the responsibility of management.
In conducting OUT audit, we will perform tests of the accounting records and such other procedures as we consider necessary in the circumstances to provide a reasonable basis for our option on the financial statements. We will examine, on a test basis, evidence supporting the amounts and disclosures in the financial statements. We will also assess the accounting principles used and signifkant estimates made by management, as well as evaluate the overall financial statement presentation.
An audit is designed to provide reasonable assurance of detecting errors and irregularities that are material to your financial statements. Your internal accounting control structure should provide reasonabjj assurance, although not absolute assurance, against the possibility of such ertors and irrtgulaxities. We will furnish to you recommendations about your internal control structure we note durirq our audit. We will also furnish our recommendations about other aspects of your operations in which we obscrvc opportunities for improvement.
Our fees, which will be billed as the work progresses, are based on hourly rates plus reimbursement of out-of-pocket expenses. Our fees for the audit will not exceed $lS,WO, If the proposed services are completed in an amount of time which is less than anticipated in the above amounts, the District, of course, will be billed for the lesser amount. We will utilize efficiencies available to reduce our time through close cooperation and coordination with the District’s accounting officials.
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Mr. James F. Elliott City of CNsbad
iFarch 57 lggo
0~ estate Of fees iS aho based on the assumptl
Financial and accounting officials wll our audit. ’ /-limmsio work GiLis ciuring
We will be provided with a December 31, 1989 trial balance and a year-too-date detailed account analysis. We understand that the trial balance will not be adjusted for duprociation since July 1, 1989, fixed assets to be capital&d since July 1, 1989, inventory, accounts payable and accrued expenses.
We will be provided with a schedule of investments that includes a calculation of accrued interest at December 31,1989.
We will be provided with bank reconciliations.
In the event irregularities or unforeseen conditions should deveiop which require investigation more extensive than is anticipated in our estimate fur the audit of the basic fmancial statements of the District, such irregularities or conditions would be reported to you. If authorized, we would proce& &th such additional work and receive such additional fees as agreed upon at that time,
If the terms of our engagement as outlined in this letter are acceptable to you, please sign and return the enclosed copy of this letter, We are prepared to commence our work upon your acceptance of this letter and we will schedule our work to be able to issue the Districts December 31, 1989 financial statements by April 30,199O. matter, please do not hesitate to call me, If you have any questions reganling this letter or any other
We look #orward to w0rk.Q with you on this engagement.
Very truly yours,
John H. Davis Partner
Acknowledged:
Date
March 5, 1990
Mr, Ja&em F, Blliatt Finance Director
City of Crrlsbad
1200 Elin Avenue
Carlrbad, California 92008-1989
Dear Jim: TENTATIVE AND Ff?ELC,SINARY DRAF-T
Thie leitter is to confirm our
to review certain operating Water Dietrict (the District). It describea the objective of the review and the nature of the eervicea we will provide. Thir letter ale0 list0 the proctdurte we intend to perform, deiscribte the type of report we intend ,to iseue, includes the name8 and qualifications of certain of the individtialr expected to perform the review, l atablimhes an estimated timetable for completion of our work, and includeo an eetimatt of our foes, I
Objective
Our review ia to be performed in connection with the District becoming a eubeidihg diatrict of the City of Carlobsd, Our objective it to assirt
you in your arraeecmenc of the organizational, operational, and financial
aspects of the District, We will perform certain procedure8 for the
purpose of araisireting you in obtaining a better underetanding of the District’e bueineaa activities. Our review will be directed toward those
business activities and related data which you have identified ae being of concern to you.
Our ability to complete cur work and to gather the information you require will bB dependent upon the availability of the information and the
cooperation and availability of the management of the District. We will keep you informed as to the etatusr of the engagement ae well ae any aigniflcrnt findings, as our work progressea.
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Procedures MTATIVE AND PRELlMlNARY ORAn
The proce4urca WC illtend to perform there which you have determined will limited ifiLVMCJlr~ &@~!@tent to
and as such will not neccsrarily diaclwe all eignificant matters about the District or reveal errore and irregularities, if any, in the Dietrict’a underlying information. Unless otherwise indicated, our
inquires will be directed at, and the data gathered will be obtained from
Dietrict personnel. The procedures are outlined below:
l For each bank account in exirtence at December 31, 1989, ruuunarize the following information:
- account number
- bank name
- type of account
- current interest rate, if interelat bearing
- authorized eignaturts
- balance per general ledger
2. I:’ rives tma :
l Write a narrative aumrnary of the District’s investment policies
including the names of the lndividuale who carry them aut.
l Prepare a eummary of invcrtments held at December 31, 1989
including the followinn information:
- Type of investment - Issuer
- Date purchared - Maturity date - Coupon rate - Location of security
3. R&iVU :
l Provide details of all individual recelvablcr in exceae of $10,000.
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4. Inventories: I TENTATlVE AND PRELIMINARY DRAFT
FOR REVIEW AND DISCBSSION
l Obtain detail of inventory at Dcctmb r 31, 1989UBlECT TO CHANGE k -UI.*
0 Write a narrative eummary of the Diatrict’r procedurea relating to inventory, including eoa t mtthed, frequency of physical inventory cwntx, type of record8 maintained (perpetual or periodic), cuetody
and who can purchase additional items.
5. -alant:
0 Write a narrative runwry of the Diatrict’r procedurer relating to inventory/physical cuetody of therae alstt8, type of detail records
maintained and depreciation methods used.
l I Prepare/obtain a detailed lieting of secrets with individual coata greater than $10,000.
l Obtain copy of lo--term capital improvement plan. Summarize
financing plane for the needed Improvements. Evaluat t the
adequacy of the existing long-term capital improvement plan.
l Review the District’s plana for funding required maintenance
expenditures for exiotiu utility plant,
6. Dejferred comu~ion u !
l Obtain cow Of Plan*
l ! Summariee balances at Dcctmber 31, 1989 for the plan at a whole
! and for each participant.
7. &$ounta ruble and accrued ggpeneeq:
l Obtain a listing of amounts in exceat of $10,000 at December 31, I 1989,
l Provide dctaflr of any disputed amount@ or aamnts more than 60 ! dayo patt due.
a. Constructi~oeit~:
l Prepare an explanation of the purporee of theBe depasfte and how they are handled.
l Obtain a listing of deporitx received,
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9, Debt: TENi/WK AND PRELIMINARY DRAFT
FOR REV!EN AND DISCUSSlOW
l Obtain a eummary of certificates of pa
payable at December 31, 1989, tmmmtrizc~-txIBL~~’
following:
- Kaaut data
- Dollar amount of irruc
- Intereet rate(s)
- Maturity schedule
- Dollar amount outstanding at December 31, 1989
- Summary of significant covenants
- Unspent procseds and details ef expenditures
l Beviaw the Dietrict’e post-1986 debt for any income tax implication relating to arbitrage earninga.
l Obtain/eummarize the following information:
- Current rate schedule
- Date rate6 became effective - Procedures for reviewing retee:
4 How frequently it is done q Who perform the analyris
l What typee of coats were the rate6 set to recover
l Actual volume of melee compared to those projected
11. war f,&.&&iee fees:
Q ’ Review the process uecd to eetablirh the major facilitier fees,
Discuer with management the agplicsbility of AD 1600 and the etepe
, that have been taken to comply with its requirementa.
12, Bm DIOW :
l prepare an explanation of the annual operating budget Drecesa,
Include details of how actual results are compared to budget,
I &xnznarize how capital itemrs are handled in the annual budgeting
proceee,
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13. Q,&woua eaDiOYm: TENTATIVE AND PRELlMlNARY DRAR
l Obtain the following informrtion abou the Dist,~~q~~~~g~~$E and tmployeee:
- lbme, age and poeition;
- yeare of wrvict; and
- salary, bonus, employment contracta and fringe benefice
l Review the conflict of intereet farms for the 1988 calendar year
md any that are on file for the 1989 calendar year.
14. me relatioqp:
l Inquire about the Dittrict’t relationship with ita employees, includiw union contracta, salary and fringe btncfits, pension
plane and employment contract@, Summarfzt tht lateret available information relating to the District’e participation in the California Public Emplayw4’ Retirement Syetem.
15. mcontracte?
t Review all tmploymcnt agreements identical in step 13 above and litt the significant grovitlont of tach one,
16. Irksurance:
l Inquire about inturancc coverage and obtain a listing of inturance
policitt in force. Identify policies by type and extent of coverage. Aactrtain the extent that the Dittrict haa used
stlf-inturanca.
17. pacl;a groctg~:
t knnuariza the following information about the Diatrict’t data
proceeeing tyatem:
- Type of hardware
* - Software applicrtions
- Age of hardwars and software - Maintenance agrcemsntt - Progr~ing Capabilitita
- Security
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18, ma TENTATIVE AND PRELIMINARY DRAFT
l Inquire about whether the District purchase commitments at: contracta or
uat of the District’s arsoete.
19. e: .
l Perform such other procedures 68 may be requaleted by you.
Rel?orting
Upon the completion of our buaintaaman’s reviaw WC will report to you in writing our commtnts and observationa which will be baaed on the rseultsl of performing the aforementioned procedures. All of our commenta and
observation8 regarding the organisational, operational and financial
aspectsi of the Dietrict will be covered in one long-form rtport.
We will review a final. draft of our report with the management of the Dietriat for the pUrpO89 of verifying the factual accuracy of the
inform&ion contained therein.
Becausci of its special nature, our report may not be euittd for any purgoes other thaa to alariat you in your evaluation of thia mtrgcr and, aa ouch, la intended Bolely for the uee of managemtnt and membcrm of the City
Council of the City of Carlsbad and management and members of the Board of
Directorsi of the Carlsbad Municipal Water Dirtrict, Thfa restriction is
not intended to limit the dirtribution of thie report, which upon
acceptance by the City of Carlabad, $8 a matter of public record.
Our rebort will indicate that we have no obligation to update our report or to rtviae tha information contained therein becauee of events and
tranaactione occurring sublsequent to the data of the report.
Staffi& and Qualificationa
I will’ have overall reagonaibility for the conduct of our buaine88man’e
review .’ I will be aaeieted by Mr. Rob Grict, a senior manager in our Catlsbad office, In addition, we will be rssileted by Mr, Kurt A. Barney, a
senior manager in our Weetern Region Government Consulting Practice. Ae Mr, G&t and I have previously provided prafeerional arrvices to the City
of Carlsbad and the Dietrice, I did not include any biographical information on thtm, A biographical &etch of Mr, Ramey $61 attached a8 Exhibit A.
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T ‘iming
We are prepared to commence our review upon estimated to be March 20, 1990, and to April .l990,
Our fees are baaed on the actual time required to completa the agreed-upon
WwJk, 13 addition to PUT feel we are reimbursed for travel, report
preparation, and such other out-of-pocket expenees aa are incurred on connection with the engaguaent, It ie our practice to render progreee
billinge on a biweekly baeis.
It ie difficult to determine precisely the amount of time required to complsre our werk, Several factore outside of our direct control could have an impact, such a8 the cooperation of the District’8 management and
the availability of requested data. Based on our experience in performing
erimilar engagementr, however, we estimate that our total fcce, excluding out-of-pocket expcnarcs, would not exceed $15,000. If for Borne reason after we begin our review you decide not to proceed with the engagement,
we would terminate our work and would bill you only for feee and expenrses
incurred to that point in time.
It is underrtaod in accepting this letter that neither fee8 nor payment thereof ia contingent upon the reoultsl of the review or the completion of the prqposred acquisition.
Please i indicate your acceptance of theae arrangements by eigning and retum$q one copy of this letter to ~8.
Very duly your,
KEWG Paat Harwick
John ?I,’ Davis, Partner
w:
City of Carlabad
By:
Date: .
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Mr. Ramey is a Senior Manager in the KPMG
Government Coneultin& Practice, where he direct8 our Public Finance
Croup, Mr. Barney haa significant experience providing finamcial
conrulting to Bovernslente, including feasibility studiee, financial support impact analysis, financial formation, forccmtiag gmcl public
offeringa, In addition, Mr, Ramcy haa a etron$ understanding of government informAtion eyatame And financial modeling,
Mr, R-y’s experience includes the followfng:
l Manager in charge of a water rate and connection fee study for the
Mojave Water Agency to support a proposed 70-mile pigeline, Thie pipeline wound deliver entitled water from the CAlifornia Water Project . Low growth, spar- population and fixed incomea were considered in developing the rate and connection fee etructure
necessary to conetruct and operate the pipeline,
l Manager: in charga of our ragagement for the San Diego Aseociation
of Governments (SAIIDAG) to examine ttansportAtion ealee tax revenue for An upcoming revenue bond offering. Evaluation of the
data, eupport and methodologiee utilized by SANDAG’s economic
forecaetiu model ibl included in this project.
l Manager in charge of our project to develop the mandated proceseing fee structure required by the @tateVe Department of Conservation for the new recycling program. Under the program, each type of material met be economically recyclable, and I coat study Bnd rate setting proceee are required to aseesa annual eubsidy requirements for uneconomical materiala, ‘shim procesr
includes the survey of over 100 locations throughout the etate,
development of rate-setting regulation@, economic impact anAlyria
and eetabliahment of ratae.
A Management and performance of a feasibility etudy project for the
California Fairs Financing Authority. The feA8ibility study evaluatee the funds thAt may be available to service revenue bonds
for the construction of eatellite wagering facilitiee At
fairground0 in the etate,
l Management an4 performance of a project to develop a five-year
forecalet for an ambulatory aurgery center. Beeponeibflities
included market snalyrsis, evaluation of A&aUllptiOTlB, model development and report preparation.
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Management and develop A five-year dletributed AT!4 Loan. The netarcsrk, which would include over 100 ATMa, 12 financial institution@ and numerous data centere, ~a61 evaluated
for technical feasibility, coat, financial return And marketability, The resultant coAt prejcctions were baaed on A Atrategic implementation plan for bringing up institutions, implementing capabilitiaa and performing aprcial projects over a five-year period.
I Feaeibility areeesment And formation support for the Plarrtic Becyciing Corporatioa of California, a not-for-profit organisation
formed to promote plawtics recycling in the atate, !Cht entity was
formed to comply with the mandatee of the new beverags container recycling program in the state, Revenues, expeneee and funding level8 were aeeersed to determine the appropriate duer to be levied on industry memberrs,
l Directed the derign of a financiA1 oyetem to support Califomia’a
new beverage container recycling program for the Department of Coneervation. The aystam, which will be ueed by numerous industries needed flexibility and rtate-oriented control,
Mr. Rsmcy received a brchelor of ecience degree in burineoa rdminietration with an accounting mphA8i8 from the California State University, Chino and is a Certified Public Accountant licensed in the atate of Californis,
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