Beaumont City Council
March 18, 2025

GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Specific audit approach
Engagement approach
Our engagement approach for your audit is meticulously designed to ensure measurable progress and successful outcomes. This involves setting clear goals and maintaining frequent communication between the engagement partner, lead auditor, and the team. Our approach leverages our extensive knowledge and expertise in governmental accounting and auditing to identify and address key audit and accounting risks specific to the government sector. Each year's audit includes a complete reassessment of the control environment, enabling us to respond to any changes in risk assessment effectively.

Key components of our Engagement Approach are as follows:

Knowledge and Experience: With over 77 years of auditing governmental entities of all sizes, we possess in-depth knowledge of the governmental environment. This enables us to perform efficient and effective audits, conduct detailed risk assessments, and identify significant audit risk areas within the City's control environment.

Intelligent Design: Utilizing advanced audit software and data analytic tools (Engagement and Teammate Analytics), we can analyze large volumes of data quickly, enhancing both the efficiency and effectiveness of our audits.

Professional Oversight: Our partners, managers, and supervisors have extensive experience in governmental audits, allowing us to design and execute audit strategies that are both effective and efficient.

Timeliness: Meeting deadlines is a professional commitment for us. We ensure that all required and agreed -upon deadlines are met.

Open Communication: Maintaining open lines of communication with all parties involved, including City management and staff, helps eliminate surprises and ensures a smooth audit process.

Availability: Our engagement team members are available year-round for any questions or additional consultation. City staff will have direct access to the partner, manager, and supervisory staff during and after the engagement.

Cost -Effectiveness: Our customized audit approach and experienced auditors help reduce overall audit costs while delivering effective audits and high -quality reports.

Risk -Based Approach: We perform detailed risk assessment procedures to understand the City and its environment, including internal controls. This forms the basis for our assessment of risks of material misstatement at the financial statement and relevant assertion levels. We may perform further audit procedures concurrently with risk assessment, as necessary. !•`r
AICPA
GAQC Member
-5-

NEI

City of Beaumont
Proposal for Professional Auditing Services
Specific audit approach (continued)
As stated elsewhere in our proposal, our primary objective is to conduct an audit of the financial statements in accordance with required auditing standards and to express an opinion on those statements. Our engagement approach also offers several value-added benefits at no additional cost:

Efficiency and Minimal Disruption: Our audits are designed to be efficient and effective, minimizing disruption to office operations.

Practical Observations and Recommendations: We provide practical observations and recommendations on internal control issues, accounting standards implementation, and related policies and procedures.

Operating Efficiency Opportunities: We identify opportunities for operating efficiencies that can help reduce the City's operating costs.

By employing this comprehensive engagement approach, we ensure that the City's audit is conducted with the highest standards of quality and professionalism.

Audit approach and proposed audit segmentation
The following is a summary of the audit team's approach for your engagement. The audit will be divided into the following segments:

Segment 1 - Interim Testing: Planning, Pre -Audit Administration, and Internal Control Testing Objectives: During this phase, our principal objectives will be to gather information about the City and its environment, including its internal controls over financial reporting.

Approach:
• Initial Meetings:
o Meet with the City's staff to determine convenient dates to begin our audit and to discuss the assistance to be provided by the City's staff.
• Engagement Team Brainstorming:
o Hold brainstorming sessions with engagement team members to discuss the susceptibility of the City's financial statements to material misstatement and fraud. • Review and Evaluation:
o Review and evaluate the City's accounting and reporting processes by examining the prior year's audit workpapers, City -prepared documents such as budgets, in-house financial reports, policies and procedures manuals, and minutes of governance meetings. o Perform analytical procedures to enhance our understanding of the City and identify areas that may need further assessment and additional testing.
• Regulatory Review:
o Review and retain copies of any pertinent local, state, and federal statutes, regulations, or charters that apply to the City.
�•` AICPA
GAQC Member
-6-

City of Beaumont
Proposal for Professional Auditing Services
Specific audit approach (continued)
• Internal Control Evaluation:
o Obtain a thorough understanding of the City's internal controls over financial reporting and compliance by documenting key internal control components, utilizing questionnaires, walkthroughs, inquiries, and observation.
o Evaluate the design of controls relevant to the audit and test controls, if control risk is to be assessed below maximum, by selecting a sample of transactions and reviewing supporting documentation. • Management Communication:
o Document and review any findings noted during the testing of internal controls with management. o Provide a preliminary management letter with recommendations for improving any weaknesses in operations and suggestions for enhancing the efficiency of the City's operations. • Audit Data Analytics:
o Utilize powerful audit data analytic software to analyze large amounts of data quickly and focus on areas/transactions that are red -flagged.

IT General Controls:
• Security Access Controls:
o Evaluate general system security settings, password parameters, processes for adding, deleting, and changing security access, access capabilities of various user types, access controls to networks and financial applications, data file access controls, and physical access to networks and servers. • Computer Operations:
o Evaluate backup and recovery processes and review procedures for identifying and handling operational problems.
• System Development and Changes:
o Evaluate processes related to system development and system changes, if applicable. • Application Testing:
o Determine the necessity of testing application controls based on professional judgment during the planning stages of the engagement.

Audit Team: This phase will be performed by the audit manager, audit senior, and two to three staff accountants, under the direct supervision of the audit partner.

This comprehensive approach ensures a thorough understanding of the City's financial environment and internal controls, setting a solid foundation for the audit. !•`r
AICPA
-7-

faillild
GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Specific audit approach (continued)
Segment 2 - Year -End Testing: Substantive Testing
Objectives: During this phase, our primary objectives will be to assess the risk of material misstatement at the financial statement level and specific assertions, design overall responses to assessed risks and further audit procedures, perform substantive tests, and complete the audit while evaluating audit findings, if applicable.

Approach:
• Risk Assessment and Audit Plan Development:
o Identify significant risks and develop a detailed audit plan using the results from Segment 1. • Design and Perform Substantive Tests:
o Design substantive tests of account balances tailored to the City's operations and assessed level of risk. Substantive procedures will include testing material balance sheet accounts, material revenue and expenditure/expense accounts, along with various analytical procedures, as necessary. o Confirm various accounts with outside parties (e.g., cash, investments). • Risk Evaluation:
o Determine whether our testing supports the initially assessed level of risk at both the financial statement level and the assertion level.
• Audit Adjustments:
o If any proposed audit adjustments are noted, we will discuss and explain them in detail with the appropriate level of management before posting.

Audit Team: This phase will be performed by the audit manager, audit senior, and two to three staff accountants, under the direct supervision of the audit partner.

Segment 3 - Reporting: Report Preparation and Audit Conclusion (Workpaper Review) Objectives: During this phase, our principal objectives will be to evaluate whether the financial statements, as a whole, are free from material misstatement, form an opinion(s), and issue our report.

Approach:
• Material Misstatement Evaluation:
o Determine, based on our substantive testing and other procedures, whether the financial statements, as a whole, are free of material misstatement. This will provide the basis for our opinion(s). • Workpaper Review:
o Review all audit workpapers to ensure the audit was performed in accordance with required standards (GAAS, GAGAS, etc.) and prepare drafts of all required reports by the agreed -upon dates. • Quality Control Review:
o Conduct an independent review of the financial statement draft by the engagement's quality control partner and issue all reports by the agreed -upon dates.

Audit Team: This phase will be performed by the audit manager, audit senior, and one staff accountant, under the direct supervision of the audit partner. Additionally, the engagement's quality control partner will perform a detailed quality control review of the financial statements. !•`r
AICPA
GAQC Member
-8-

City of Beaumont
Proposal for Professional Auditing Services
Specific audit approach (continued)
Customization and Communication: The procedures listed above are general. After our initial review of the City and our detailed risk assessment, we will customize the engagement to address the specifics of the City and the audit itself. We will determine which procedures to perform based on our risk assessment. All our audits are customized to each entity, ensuring a complete, effective, and efficient audit. Our approach is founded on open communication, a strong knowledge of the City's operations, and detailed planning at the initial stages of the audit.

Timeliness and Resource Allocation: Our firm is dedicated to performing a timely audit engagement. Prior to the start of the audit, we will meet with City staff to agree on adequate timeframes for the performance of the audit and the release of the financial statements. We will allocate the necessary resources to meet these agreed -upon timeframes.

Level of staff and approximate number of hours assigned to each segment Segment Partner Mana•er Senior Staff Total
Segment 1
Segment 2
Segment 3
Totals*
5 6 30 57
9 10 48 75 142
11 9 42 18 80
98 25 25 120 150 320
= excludes Single Audit hours
Sample sizes (including for compliance testing)
Our sample sizes will be determined in accordance with the AICPA's Audit and Accounting Guide, Audit Sampling, and will be selected using professional judgment or our TeamMate Analytics software, depending upon circumstance, as permitted by Statement on Auditing Standards. Our methods are designed to provide the most audit coverage without expending excess time. Our sample sizes will depend upon our preliminary assessment of control risk, our planned substantive testing and analytical procedures as well as our professional judgement.

We utilize our Computer Aided Audit Tools (CAAT) software, Teammate Analytics, to draw our audit samples.

The software allows us to generate random samples, systematic samples, stratified samples, attributes samples as well as monetary unit samples (also called probability -proportional -to -size or dollar unit sampling).

Intelligent audit technology
Our audits leverage advanced technology through powerful software tools such as Engagement and Teammate Analytics. Additionally, all audit team members are connected wirelessly, enabling real-time information sharing. The benefits of our audit technologies include:

Teammate Analytics: This suite of over 200 dynamic Computer Aided Audit Tools (CAATs) allows us to analyze large amounts of data in seconds. Using data directly from the City, we can search for duplicate checks, detect transactions during unusual hours or on holidays/weekends, perform Benford's Law analysis, and identify instances where a vendor has issued multiple invoices with sequential references, among many other tests. This empowers our audit teams to perform powerful and meaningful data analysis, enhancing our value-added services.
k•`r
AICPA
-9-

GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Specific audit approach (continued)
Customized Analytical Schedules: We create our own analytical schedules to easily compare current balances to prior year balances and current vs. budget balances, significantly reducing the time required from City staff.

Real -Time Financial Statement Analysis: Once your trial balances and financial statements are entered into our software, we can review your financial statements in the field, allowing us to notice and address any variances immediately.

Linked Financial Statement Schedules: We link financial statement schedules directly to our audit software trial balances, enabling us to provide the City with fund financial statements almost immediately after importing the trial balances.

Audited Trial Balances: We provide the City with audited trial balances that show the coding of the financial statement schedules, making it easier for City staff to review. These reports include each account coded to a specific financial statement line item/function and journal entries posted during the audit.

Analytical procedures
To effectively utilize analytical procedures, industry background and knowledge are essential. With our firm's extensive experience and qualified staff, we possess the necessary knowledge to apply analytical procedures efficiently throughout our audit of the City.
• Interim Phase:
o Compare current and prior year unadjusted balances to identify areas requiring additional analysis. o Compare current year actual amounts to the City's annual budget (both original and adopted). • Final Phase:
o Perform procedures similar to those in the interim phase. o Compare certain financial ratios for current and prior years. o Conduct reasonableness tests.
o Investigate any significant variances further through inquiry and additional substantive testing until resolved to our satisfaction.
• Post -Fieldwork:
o Compare current and prior year audited balances, considering expected relationships based on our knowledge of the City, similar entities, and the general economic environment. o Utilize additional analytical techniques such as trend analysis as needed.

Unlike other audit firms, we use analytical procedures to supplement, not supplant, our substantive testing, ensuring a thorough and comprehensive audit
Auditing in a remote environment
The evolution of technology has revolutionized the accounting and auditing profession, enabling us to provide high -quality services remotely with efficiency, precision, and timeliness. During the COVID-19 pandemic, our firm adapted quickly to a fully remote audit environment and developed processes that have since become integral to our standard approach. These advancements not only enhanced the quality of our audits but also resulted in significant efficiencies for both our team and our clients. �•` AICPA
GAQC Member
-10-

City of Beaumont
Proposal for Professional Auditing Services
Specific audit approach (continued)
Remote Audit Approach
• Technology Utilization:
o We use secure cloud -based platforms for document sharing and management, such as Engagement Organizer, ensuring client data remains safe and accessible. o Video conferencing tools (e.g., Zoom, Microsoft Teams) facilitate real-time communication with City staff, enabling collaborative discussions and efficient issue resolution. • Workflow and Communication:
o Regular Communication: We maintain routine contact with clients throughout all phases of the audit via email, phone calls, and video meetings.
o Responsiveness: Our team prides itself on quick turnaround times for questions or issues, making remote collaboration as seamless as on -site interactions. • Flexibility for On -Site Presence:
o While we anticipate performing the majority of our work remotely, we understand that some aspects of the audit may benefit from an on -site presence. If desired, we will work with the City to determine an acceptable staffing level for in -person activities, balancing health, safety, and operational needs.

Benefits of Remote Auditing
• Efficiency Gains:
o Remote auditing reduces the need for travel time, allowing both auditor and auditee to focus on the tasks at hand, resulting in faster turnaround on requests and issue resolution. o Immediate access to digital documents and records eliminates delays associated with physical transfers of information.
• Enhanced Quality of Life:
o By minimizing travel, our staff can dedicate more time to client work and professional development, improving overall morale and productivity.
• Environmental Impact:
o Reducing unnecessary travel decreases traffic congestion, lowers fuel consumption, and contributes to improved air quality in Southern California.
• Year -Round Availability:
o Our remote -first approach fosters an ongoing partnership, encouraging clients to reach out throughout the year for guidance on matters that could impact the audit or their financial reporting.

Commitment to client collaboration
We understand that each client's needs are unique, and we remain flexible in our approach to ensure the audit process aligns with the City operational requirements. Our primary goal is to provide a smooth and efficient audit experience, leveraging technology while maintaining the personal connection and professionalism our clients expect. Should the need arise for on -site activities, our team will seamlessly integrate in -person work while maintaining the efficiencies gained through remote auditing practices. !•`r
AICPA
GAQC Member
-11-

©E1

City of Beaumont
Proposal for Professional Auditing Services
Specific audit approach (continued)
Proposed audit timing
• Auditor
transition:

Meet with
prior auditor
to review
workpapers.
• Entrance
conference
to meet with
management
for pre -audit
planning.
• Preliminary
risk
assessment
procedures.

City staff
Audit planning
Segment 1 -
Planning/internal
control
Segment 2 -
Substantive
testing/analysis
Segment 3 -
Report
preparation/work
.a•er review
May/June
Anticipated timing of each segment
October/November
December/January
• Obtain an understanding of
systems, internal controls,
and current -year issues.
• Assess and evaluate design
and implementation of key
internal controls (including
IT related).
• Perform tests of internal
controls as needed.
• Identify control deficiencies
• Perform detailed risk
assessment procedures.
• Draft internal control
comment letter.
• Develop detailed audit plan
— provide management with
a detailed listing of items
needed to perform the audit,
including the timing of when
items are needed.
• Perform substantive audit
fieldwork, including
substantive analytical
procedures.
• Consider whether audit
evidence is sufficient to
form an opinion.
• Conduct exit conference
with management to
discuss proposed entries,
internal control issues, etc.
• Determine whether,
based on our substantive
testing and other
procedures, the financial
statements, taken as a
whole, are free of
material misstatement.
• Review all workpapers.
• Evaluate financial
statements and note
disclosures.
• Perform final analytical
procedures.
• Draft required reports.
• Issue final required
reports by or before
agreed upon date.
• Present to governing
body as needed.

Our firm recognizes that effective communication is critical to the success of any audit engagement, especially when working with municipal clients. We prioritize proactive, transparent, and consistent communication to ensure alignment with City staff, jurisdictional stakeholders, and the public. Our approach includes the following elements:
• Kickoff Meeting: At the outset, we will hold a comprehensive kickoff meeting with City staff and relevant stakeholders to establish expectations, timelines, and key deliverables. This meeting will allow us to identify primary points of contact, preferred communication methods, and any specific concerns or priorities of City staff.
• Regular Status Updates:
o Frequency: Weekly or biweekly check -ins (virtual or in -person) to discuss progress, address concerns, and update City staff on the audit's status.
o Deliverables: Updates will include upcoming deadlines and any potential obstacles requiring City input or action.

AICPA
GAQC Member
-12-

City of Beaumont
Proposal for Professional Auditing Services
City staff (continued)
• Collaborative Stakeholder Engagement:
o Other Jurisdictional Stakeholders: When applicable, we will coordinate meetings or requests with other jurisdictional entities (e.g., pension plan administrators, grantors) to minimize duplication of efforts and ensure consistency in information sharing.
o Public Communication (if necessary): If the audit findings require public presentation, we will collaborate with City staff to prepare materials, ensure transparency, and present information in a manner that is clear and accessible to all stakeholders. • Communication Channels: We will utilize email, virtual collaboration tools (such as Microsoft Teams or Zoom), and secure document -sharing platforms to facilitate efficient communication and minimize disruption to City operations.

Specific tasks required from City staff
To perform the audit efficiently, we will require the following tasks and support from City staff:
• Document Preparation and Provision:
o Trial balances, general ledger details, and reconciliations for key accounts. o Supporting schedules for capital assets, revenues, expenditures, and debt obligations, etc. o Copies of policies, procedures, contracts, and agreements relevant to the scope of the audit. • System Access and Support:
o Access to financial systems, reports, and databases necessary for testing and analysis. o Availability of IT personnel for queries related to system -generated reports, if needed. • Coordination with Departments:
o Assistance in scheduling meetings with department heads and other relevant stakeholders, if needed. o Coordination to ensure timely responses to audit requests. • Feedback on Findings:
o Review and validation of preliminary audit findings to ensure accuracy and provide context.

Respective roles
City Staff Roles:
• Primary Point of Contact: Serve as the liaison between our audit team and City departments to streamline communication and provide requested information promptly. • Information Providers: Deliver accurate and timely data, supporting documentation, and responses to audit inquiries.
• Reviewers: Review draft findings, journal entries, provide feedback, and assist in clarifying any discrepancies.

Our Firm's Roles:
• Project Management: Take full responsibility for planning, executing, and monitoring all aspects of the audit process.
• Data Analysis: Conduct detailed testing and analysis of financial data to ensure compliance and accuracy with generally accepted accounting principles.
!•`r
AICPA
GAQC Member
-13-

City of Beaumont
Proposal for Professional Auditing Services
City staff (continued)
• Issue Resolution: Identify, document, and communicate any discrepancies or concerns, and work collaboratively with City staff to resolve them.
• Reporting: Prepare clear, concise reports summarizing findings, recommendations, and areas for improvement, ensuring compliance with applicable standards.

By maintaining a collaborative and structured approach, we aim to deliver a seamless audit process that meets the City's needs while minimizing disruption to daily operations.

Specific expertise desired
Our firm has substantial experience providing audit and advisory services to municipalities with extensive use of Community Facility Districts (CFDs), Development Impact Fees (DIFs), and land -secured bond issuances.

This specialized expertise allows us to understand the complexities and nuances associated with these financial instruments and funding mechanisms.

Community Facility Districts (CFDs):
• Audit Expertise: Our team has audited numerous CFD issuances, including recording the issuance, testing for compliance, and the proper allocation of funds to authorized uses. • Governance and Oversight: We have experience reviewing the administration of CFDs to ensure compliance with the Mello -Roos Community Facilities Act, including annual reporting requirements, and proper segregation of funds.

Development Impact Fees (DIFs):
• Compliance Audits: We have audited DIF programs for several municipalities, ensuring that fee collections, and expenditures align with applicable legal requirements, including California's Mitigation Fee Act (AB 1600).
• Program Management: Our work includes assessing whether DIFs are used appropriately to fund infrastructure and public facilities directly related to development impacts.

Land -Secured Bond Issuances:
• Issuance and Compliance: We have extensive experience auditing land -secured bonds, such as those used to finance public infrastructure within CFDs. This includes reviewing official statements, assessing compliance with continuing disclosure obligations, and evaluating the use of proceeds. • Debt Service and Credit Analysis: Our team is skilled in analyzing debt service schedules, coverage ratios, and assessing the fiscal health of the issuing district to ensure long-term viability and compliance with bond covenants.

We are confident that our demonstrated expertise in CFDs, DIFs, and land -secured bonds will add significant value to the City's financial oversight and help maintain public trust in these critical funding mechanisms. 'iVr
AICPA
-14-

GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Key personnel
Quality of service and engagement team
The quality of service you receive hinges on the capabilities of the individuals assigned to your engagement and how effectively these personnel resources are organized. Our professionals are highly trained, knowledgeable, and have a deep understanding of the environment in which governmental and not -for-profit entities operate. This expertise is crucial for providing the City with an effective and efficient audit.

Our engagement team brings significant experience and a practical understanding of governmental accounting and auditing, combined with a broad business perspective. Each member has access to a wide range of technical resources and knowledge bases, enabling them to offer practical observations and effective solutions to the City.

Partner and supervisory staff involvement
Our partners and supervisory staff are actively and continuously involved in all aspects of their engagements.

We believe that their involvement is a key aspect of the overall audit process. This includes being on -site for interim and year-end fieldwork, ensuring a proper, efficient, and effective audit with minimal disruption to your staff. The time spent on -site by partners and supervisory staff allows them to understand the City's accounting processes and procedures thoroughly. This understanding helps in evaluating and developing opportunities for efficiency and offering practical advice to improve your accounting processes and procedures.

All professionals on this engagement have extensive experience with audits similar to the City's, eliminating the need for the City to train our team.

Partner, supervisory, and staff qualifications and experience Staff continuity
Maintaining continuity of audit staff is a principal concern for our firm. To retain our staff, we offer competitive wages, advancement opportunities, generous medical packages, a retirement plan, bonus opportunities, and educational benefits. While we strive for continuity, we acknowledge that staff changes may occur. We plan to provide consistent staff year to year, which is in the best interest of both the City and our firm. Continuity ensures an orderly, efficient, and less disruptive audit experience. In case of staff changes, principal supervisory and management staff, including engagement partners, managers, other supervisory staff, and specialists, may be replaced if they leave the firm or are promoted. However, the City reserves the right to accept or reject replacements.

Due to the significant involvement of our partners in all engagements, any staff transition would have a minimal impact on audit efficiency and effectiveness in subsequent years.

Continuing professional education
Our auditor specialists stay current in this technical practice area by adhering to, and typically exceeding, the continuing professional education requirements of Government Auditing Standards and the State Board of Accountancy guidelines. All professionals at our firm participate in continuing professional education (CPE) programs sponsored by various organizations, including the Government Finance Officers Association, the American Institute of Certified Public Accountants, the California State Society of Certified Public Accountants, the California Society of Municipal Finance Officers, and the Association of Government Accountants. These programs ensure our clients are serviced by the best -trained and most proficient government auditors and accountants available. We also provide in-house training conducted by our partners and senior staff using published resources. All staff are required to attend fraud and ethics training. Our goal is to provide professional staff with continuing education that exceeds the minimum standard of 80 hours over two years. �•` AICPA
GAQC Member
-15-

City of Beaumont
Proposal for Professional Auditing Services
Partner, supervisory, and staff qualifications and experience (continued) According to our firm's Quality Control document and Government Auditing Standards (GAS), all staff working on audits subject to GAS must complete CPE in line with GAS standards, requiring 24 hours directly related to governmental accounting and auditing.

To further increase our technical knowledge, we utilize resources such as the Governmental Audit Quality Center Annual Webcast Update, other relevant seminars, and monthly publications from the AICPA, the GFOA, and other sources. We also attend conferences and seminars sponsored by the GFOA, California Society of Municipal Finance Officers, California State Society of Certified Public Accountants, and the California Special Districts Association.

Assigned personnel
Our goal is to provide you with capable, competent, and personable individuals who possess an extensive background in governmental accounting and auditing and general business practices. This allows us to offer practical solutions and technical support, keeping you at the forefront of governmental accounting and helping you navigate complex issues.

Our engagement team has the managerial and supervisory experience to provide the City with a comprehensive audit of the highest quality while focusing on personal service. The resumes of the key engagement personnel assigned to the audit are presented below. These individuals will be assigned to the engagement for the entire contract period.

Scott W. Manno, CPA, CGMA — Partner, Engagement Partner Scott will serve as the Engagement Partner for your municipal audit. He is licensed to practice as a certified public accountant in the State of California and brings over 29 years of public accounting experience, specializing in serving local governments. As the engagement partner, Scott will be responsible for the overall quality of the engagement, ensuring it is performed efficiently and effectively.

He will directly oversee all engagement staff, assist in planning and performing the engagement, and review all workpapers and required reports prepared during the engagement.

Scott, like all our partners, is a working partner and will be actively involved in all aspects of the engagement, ensuring a high standard of service and attention to detail throughout the process.

Brianna Schultz, CPA - Partner, Concurring Partner
Brianna will be the Concurring Partner. She is licensed to practice as a certified public accountant in the State of California. She has over 15 years of practical, governmental accounting and auditing experience.

As the concurring partner Brianna will work directly with Scott in planning and performing the engagement.

In addition, she will provide technical consultation for the engagement team.

Gardenya Duran, CPA, CGMA — Partner, Quality Control Reviewer Gardenya will be the Quality Control Reviewer. She is licensed to practice as a certified public accountant in the State of California and has over 15 years of practical, governmental accounting and auditing experience. Gardenya will be responsible for the final quality control review of all released opinions and related reports.
!•`r
AICPA
GAQC Member
-16-

City of Beaumont
Proposal for Professional Auditing Services
Partner, supervisory, and staff qualifications and experience (continued) Veronica Hernandez, CPA — Audit Manager
Veronica is an Audit Manager with the firm. She is licensed to practice as a certified public accountant in the State of California. Veronica has over 9 years' experience in providing accounting and auditing services for municipalities, special districts and various not -for-profit organizations. As an audit manager, she will work directly with the audit in -charge and partner, while supervising the engagement team during all phases of the engagement. In conjunction with the audit in -charge, she will also oversee the preparation of any required reports.

Devin Feldhut — Audit Senior
Devin is an Audit Senior with our firm, bringing three years of experience in providing accounting and auditing services to municipalities, special districts, and various not -for-profit organizations.

As an Audit Senior, Devin will work closely with the engagement partner and manager. He will be responsible for planning the audit, supervising the staff assigned to the engagement, and reviewing all workpapers prepared for the engagement. Additionally, he will oversee the preparation of any required reports, ensuring thoroughness and compliance with all standards.

Mr. Terry Shea, CPA — Consultant
Terry is a retired municipal audit partner with the firm providing consulting services. He is licensed to practice as a certified public accountant in the State of California. Terry has over 40 years of public accounting experience and has provided accounting, auditing, and consulting services for municipalities, special districts, water agencies, and various not -for-profit organizations. Terry will assist on an as needed basis with the engagement. In addition, he will provide technical consultation for the engagement team.

Staff level accountants
All our staff accountants working on governmental audits are highly qualified to perform these audits. Prior to the audit season, our staff undergoes rigorous training that covers all aspects of our audit process and programs, ensuring they have a solid foundation before starting fieldwork. Each staff member is encouraged to take on increased responsibilities in engagements they have previously worked on, enabling them to grow and continually enhance their skills and knowledge.

In summary, we emphasize the credentials of the professionals who will be directly responsible for the quality of service you will receive. Additionally, our audit team possesses an important, albeit intangible, attribute: the professionals assigned to your audits have previously worked together as a multi -disciplined team. This ensures a smooth, efficient, and effective audit process. We are committed to allocating the necessary resources to ensure continuity of personnel throughout our relationship with the City. 0•`r
AICPA
GAQC Member
-17-

City of Beaumont
Proposal for Professional Auditing Services
Partner, supervisory, and staff qualifications and experience (continued) Engagement team resumes
Scott W. Manno, CPA, CGMA
Engagement Partner
Professional experience
Mr. Manno began his career with Thomas, Bigbie and Smith in 1996 after serving in the United States Army. He spent six years with the firm primarily working on audits of municipalities, special districts and redevelopment agencies as well as various not -for-profit organizations. He joined Rogers, Anderson, Malody & Scott, LLP in July 2001. Currently, Mr.

Manno serves as a technical reviewer for the GFOA ACFR Award program and he is also on the GFOA Special Review Executive Committee. In addition, he is part of the California State Society of Certified Public Accountants Governmental Accounting which meets periodically to discuss current events, pronouncements, etc.

Education/licenses
Bachelor of Science, Business Administration — California State University, San Bernardino Certified Public Accountant — State of California
Chartered Global Management Accountant — American Institute of Certified Public Accountants Related professional experience
Partial listing of relevant governmental agencies served (*includes enterprise fund accounting):

City of El Cajon*
City of Sierra Madre*
City of Moreno Valley*
City of Live Oak*
City of San Jacinto*
Town of Yucca Valley
City of Santa Paula*
City of Beaumont*
City of Perris*
City of Menifee
City of La Mesa*
City of Beaumont*
City of San Marcos*
City of Exeter*
City of Rolling Hills Est.

City of Santee
City of 29 Palms
City of Loma Linda*
City of Woodlake*
City of Ojai*
Mr. Manno has completed over 232 hours of continuing professional education courses over the past three years of which the following select courses are relevant to this engagement:
• Government Risk Assessment
• Audits of State and Local Governments
• Government Accounting and Auditing Update
• State and Local Government Audit Planning Considerations Professional affiliations
Mr. Manno is a member of the following organizations:
• American Institute of Certified Public Accountants (AICPA) • California Society of Certified Public Accountants (CaICPA) • Association of Government Accountants (AGA)
• Association of Certified Fraud Examiners (ACFE)
• Government Finance Officers Association (GFOA)
• California Special Districts Association (CSDA)
• California Society of Municipal Finance Officers (CSMFO) L* L.*
AICPA
-18-

EOM
GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Education
Partner, supervisory, and staff qualifications and experience (continued) Brlanna Schultz, CPA, CGMA
Concurring Partner
Professional experience
Mrs. Schultz began her career with Rogers, Anderson, Malody & Scott, LLP in July 2014, and had over three years' experience with another public accounting firm serving the same industry. Currently, Mrs. Schultz serves as a technical reviewer for the GFOA ACFR Award program. During her time with the firm, she has worked primarily on audits of municipalities, special districts and redevelopment agencies, as well as various non-profit organizations.

Bachelor of Science — California State University, San Bernardino Certified Public Accountant — State of California
Chartered Global Management Accountant — American Institute of Certified Public Accountants Related professional experience
Partial listing of relevant governmental agencies served (*includes enterprise fund accounting):

City of Menifee
City of Glendora*
City of La Verne*
City of La Mesa*
City of Aliso Viejo
City of Rolling Hills Est.

City of Loma Linda*
City of Baldwin Park
City of Claremont*
City of San Bernardino
City of South Pasadena*
City of El Cajon*
City of Chino*
City of Sierra Madre*
City of West Covina*
City of Hawthorne*
Mrs. Schultz obtained the AICPA's Advanced Single Audit Certificate in 2019 and the Intermediate Single Audit Certificate in 2017. She served as the contract Interim Accounting Manager for the City of Glendora in 2016 and the Senior Accountant for the City of Rancho Cucamonga in 2015. Additionally, she is a reviewer for the GFOA ACFR Program.

Continuing professional education
Mrs. Schultz has completed over 160 hours of continuing professional education courses over the past three years of which the following select courses are relevant to this engagement:
♦ Governmental Accounting and Auditing Conference
♦ 2022 Single Audit Update
♦ How to Implement GASBS 87 and Maintain Compliance
Professional Affiliations
Mrs. Schultz is a member of the following organizations:
♦ American Institute of Certified Public Accountants (AICPA) ♦ California Society of Certified Public Accountants (CaICPA) ♦ Government Finance Officers Association (GFOA)
♦ California Society of Municipal Finance Officers (CSMFO) L.` AICPA
-19-

OOZE
GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Partner, supervisory, and staff qualifications and experience (continued) Gardenya Duran, CPA, CGMA
Quality Control Partner
llcjlIll
Education/licenses
Professional experience
Mrs. Duran joined Rogers, Anderson, Malody & Scott, LLP in June 2010. She works primarily on audits of governmental agencies, small to mid -sized businesses, and nonprofit organizations. Currently, Mrs. Duran serves as a technical reviewer for the GFOA ACFR Award program. Prior to joining our firm, she was an Information Systems Technician in the U.S. Navy for nine years.

Bachelor of Science — California State University, San Bernardino Certified Public Accountant — State of California
Chartered Global Management Accountant — American Institute of Certified Public Accountants Related professional experience
Partial listing of relevant governmental agencies served (*includes enterprise fund accounting):

City of Hawthorne*
City of Poway*
City of Canyon Lake
City of La Mesa*
Continuing professional education
City of El Cajon*
City of San Jacinto*
City of San Marcos*
City of Thousand Oaks*
City of Aliso Viejo
City of San Bernardino
City of Redondo Beach*
City of Claremont*
City of Capitola
City of S. Pasadena
City of West Covina*
Mrs. Duran has completed over 110 hours of continuing professional education courses in the past three years of which the following select courses are relevant to this engagement:
♦ GASB Update
♦ Insights from Lease Implementation
♦ Intermediate Governmental Accounting
♦ Audits of State and Local Governments
Professional affiliations
Mrs. Duran is a member of the following professional organizations:
♦ American Institute of Certified Public Accountants (AICPA) ♦ California Society of Certified Public Accountants (CaICPA) ♦ Government Finance Officers Association (GFOA)
♦ California Society of Municipal Finance Officers (CSMFO) �•` AICPA
-20-

RA
©a
GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Education
Partner, supervisory, and staff qualifications and experience (continued) Veronica Hernandez, CPA
Audit Manager
Professional experience
Ms. Hernandez is an audit manager with the firm. She has over 9 years' experience in providing accounting and auditing services for municipalities, special districts and various nonprofit organizations. As an audit manager, she will work closely with the engagement partner and manager and be responsible for planning the audit, supervising the staff assigned to the engagement, and performing reviews of all workpapers prepared for the engagement.

In addition, she will also be responsible for the preparation of any required reports. Currently, Ms. Hernandez serves as a technical reviewer for the GFOA ACFR Award Program Bachelor of Science — California State University, San Bernardino Certified Public Accountant — State of California
Related professional experience
Partial listing of relevant governmental agencies served (*includes enterprise fund accounting):

City of Santa Paula*
City of San Marcos*
City of El Cajon*
City of Aliso Viejo
City of Claremont*
City of Santee
City of La Verne*
City of West Covina*
City of Moorpark*
City of Hawthorne
Continuing professional education
City of Beaumont*
City of Loma Linda*
City of Redondo Beach*
City of San Jacinto*
City of Poway*
City of Moreno Valley*
City of Fillmore*
Town of Yucca Valley
City of La Mesa*
Ms. Hernandez has completed over 100 hours of continuing professional education courses over the past two years of which the following select courses are relevant to this engagement:
♦ Governmental Accounting and Auditing Update: GASB 87 Leases ♦ Promises and Pitfalls of American Rescue Plan Grants & Others ♦ A 360 view of OPEB Trust
♦ Critical Concepts of Accounting for Capital Assets
♦ Discover GFOA Best Practices
Professional affiliations
Ms. Hernandez is a member of the following professional organizations:
♦ American Institute of Certified Public Accountants (AICPA) ♦ California Society of Certified Public Accountants (CaICPA) ♦ California Society of Municipal Finance Officers (CSMFO) AICPA
COME
GAQC Member
-21-

City of Beaumont
Proposal for Professional Auditing Services
Partner, supervisory, and staff qualifications and experience (continued) Devin Feldhut
Audit Senior
Professional experience
Mr. Feldhut joined Rogers, Anderson, Malody & Scott, LLP in 2022, primarily providing accounting and auditing services for municipalities, special districts, and various nonprofit organizations. As an audit senior, he will work closely with the engagement partner and manager and be responsible for planning the audit, supervising the staff assigned to the engagement, and performing reviews of all workpapers prepared for the engagement. In addition, he will also be responsible for the preparation of any required reports.

Education
Bachelor of Arts in Business Administration - California State University, San Bernardino Related professional experience
Partial listing of relevant governmental agencies served (*includes enterprise fund accounting):

City of Goleta
City of Murrieta*
City of Carpinteria*
City of Loma Linda
Continuing professional education
City of Menifee
City of San Marcos*
City of South Pasadena*
City of Los Alamitos*
City of Signal Hill
City of Exeter
City of El Cajon*
City of Woodlake
Mr. Feldhut has completed the following select courses that are relevant to this engagement:
♦ Auditing Notes and Disclosures
♦ Schedule of Expenditures of Federal Awards
♦ GASB 91 Implementation
Professional affiliations
Mr. Feldhut is a member of the following professional organizations:
♦ California Society of Certified Public Accountants (CaICPA) ♦ California Society of Municipal Finance Officers (CSMFO) AICPA
OEM
GAQC Member
-22-

City of Beaumont
Proposal for Professional Auditing Services
Disclosure
We have been the City's auditor for the last five (5) years. We have no current business or personal relationships with any current Beaumont elected official, appointed official, City employee, or family member of any current Beaumont elected official, appointed official, or City employee.

References
Enti : Ci of E/ Ca -on
Scope of work:

Date:

Engagement partner:

Total hours:

Contact person:

City ACFR*/Successor Agency/Public Financing Authority/Single Audit/GANN limit/Measure O
Years ending June 30, 2008 - present
Mr. Scott Manno
Approximately 420 hours each year
Mr. Luca Gonzalez, Finance Manager, (619) 441-1668
Entity: Ci of Thousand Oaks
Scope of work:

Date:

Engagement partner:

Total hours:

Contact person:

Financial Audit/ACFR*/Successor Agency/Single Audit
Years ending June 30, 2018 - present
Mrs. Gardenya Duran
Approximately 420 hours each year
Ms. Elisa Magana, Accounting Manager, (805) 449-2216
nti : Ci of San Marcos
Scope of work:

Date:

Engagement partner:

Total hours:

Contact person:

Financial Audit/ACFR*/Successor Agency/Single Audit
Years ending June 30, 2014 - present
Mr. Terry Shea/Scott Manno
Approximately 400 hours each year
Ms. Donna Apar, Finance Director, (760) 744-1050
Entity: Town of Yucca Valley
Scope of work:

Date:

Engagement partner:

Total hours:

Contact person:

Financial Audit/ACFR*/Successor Agency
Years ending June 30, 2008 - present
Mr. Scott Manno
Approximately 350 hours each year
Mr. Curtis Yakimow, Town Manager (760) 369-7207
nti : Ci of Menifee
Scope of work:

Date:

Engagement partner:

Total hours:

Contact person:

Financial Audit/ACFR*
Years ending June 30, 2014 - present
Mr. Scott Manno
Approximately 350 hours each year
Ms. Ann -Marie Etienne, Finance Manager, (951) 672-6777 Entity: City of San Jacinto
Scope of work:

Date:

Engagement partner:

Total hours:

Contact Person:
�•` AICPA
Financial Audit/ Single Audit/Successor Agency
Years ending June 30, 2011 - present
Mr. Scott Manno/Mrs. Gardenya Duran
Approximately 350 hours each year
Mr. Tom Prill, Deputy City Manager, (951) 487-7330
-23-

GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
References (continued)
Enti
Cit of Im • erial Beach
Scope of work:

Date:

Engagement partner:

Total hours:

Contact person:

Financial Audit
Years ending June 30, 2021 present
Mrs. Gardenya Duran
Approximately 350 hours each year
Mrs. Lily Flyte, Finance Director, (619) 628-1365
Enti
Ci of San Dimas
Scope of work:

Date:

Engagement partner:

Total hours:

Contact person:

Financial Audit
Years ending June 30, 2021 - present
Mrs. Gardenya Duran
Approximately 350 hours each year
Mr. Michael O'Brien Finance Director, (909) 394-6200
Enti :

Ci of Rollin • Hills Estates
Scope of work:

Date:

Engagement partner..

Total hours:

Contact person:

Financial Audit/ACFR
Years ending June 30, 2019 - present
Mr. Scott Manno
Approximately 250 hours each year
Mr. Mike Whitehead, Admin. Services Director, (310) 377-1577, ext.112 Enti
Ci of Woodlake
Scope of Work:

Date:

Engagement partner..

Total hours:

Contact Person:

Financial Audit/Single Audit
Years ending June 30, 2018 - present
Mr. Scott Manno
Approximately 225 hours each year
Mr. Ramon Lara, City Administrator, (559) 564-8055
Enti
Ci of Twen nine Palms
Scope of work:

Date:

Engagement partner.

Total hours:

Contact person:

Financial Audit/Successor Agency/Single Audit
Years ending June 30, 2010 - present
Mrs. Brianna Schultz
Approximately 225 hours each year
Mrs. Abigail Hernandez -Conde, Finance Director/Treasurer, (760) 367- 6799, ext. 1013
Entity:

Scope of work:

Date:

Engagement partner.

Total hours:

Contact person:

City of Loma Linda
Financial Audit/RDA/Successor Agency
Years ending June 30, 2013 - present
Mrs. Brianna Schultz
Approximately 225 hours each year
Ms. Sonia Fabela, Finance Director/Treasurer, (909) 799-2840 Fntity:

Scope of Work:

Date:

Engagement partner.

Total hours:

Contact Person:

City of Exeter
Financial Audit/Transportation Fund Audit
Years ending June 30, 2018 - present
Mr. Scott Manno
Approximately 200 hours each year
Ms. Eekhong Franco, Finance Director, (559) 592-2755
46, AICPA
GAQC Member
-24-

City of Beaumont
Proposal for Professional Auditing Services
Overview and scope of services
Services to be provided
The City desires the auditor to express opinions on the fair presentation of the financial statements for the following: the City of Beaumont accordance with generally accepted accounting principles.

In addition, we shall:
• Prepare the financial statements (ACFR) with management's direct oversight and approval. • Apply certain limited procedures related to Management's Discussion and Analysis and Required Supplementary Information and provide an "in -relation -to" report on the combining and individual fund financial statements and supporting schedules, if applicable. • Provide opinions as to the compliance with the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (OMB Uniform Guidance). RAMS is to provide an "in - relation -to" report on the Schedule of Expenditures of Federal Awards based on the auditing procedures applied during the audit of the financial statements. • Test compliance with Article XIIIB pertaining to the City's appropriation limit and prepare an Agreed - Upon Procedures report to the City Council regarding compliance. • Provide 10 hours of continuing education.
• As needed services.

Our audit(s) will be in accordance with:
• Generally Accepted Auditing Standards as promulgated by the American Institute of Certified Public Accountants, including requirements found in the most recent AICPA audit guide Audits of State and Local Governments.
• Government Auditing Standards issued by the Comptroller of the United States of America. • Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (OMB Uniform Guidance).
• Any other applicable standards for other items outlined in the Scope of Work to be performed and/or reports to be issued.

Reports to be issued:
• A report on the fair presentation of the financial statements in conformity with GAAP. • A 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 (material weaknesses or significant deficiencies).
• A report in compliance with requirements applicable to each major federal program and internal control over compliance in accordance with the Uniform Guidance. • Prepare Management Letter that includes significant and less significant (i.e., reportable and non - reportable) recommendations for improvements to internal control. • We will issue reports to those charged with governance (SAS 114 letters) as required by auditing standards.

RAMS will also perform the following:
• Make an immediate, written notification of all irregularities and illegal acts or indication of illegal acts of which we become aware to the following: City Manager and City Attorney. !•`r
AICPA
GAQC Member
-25-

R
A
M
S
JANUARY 17, 2025

CITY OF BEAUMONT

COST PROPOSAL FOR PROFESSIONAL AUDITING SERVICES
FOR THE FISCAL YEARS ENDING JUNE 30, 2025 THROUGH 2029
(WITH THE OPTION FOR A ONE-YEAR EXTENSION)
CONTACT PERSONS:

SCOTT MANNO, CPA, CGMA
[email protected]

PREPARED BY

ROGERS ANDERSON MALODY & SCOTT, LLP
735 E Carnegie Drive, Suite 100
San Bernardino, CA 92408

BRIANNA SCHULTZ, CPA, CGMA
[email protected] LICENSE #2596
FEIN 95-2662063
909.889.0871

City of Beaumont
Proposal for Professional Auditing Services
Cost Proposal
Cost summary
As highlighted in our technical proposal, we believe our fee estimate represents a fair and reasonable investment, aligned with the high level of service and expertise provided by our audit team members.

While our bid may not be the lowest, our focus is on delivering the best value, and our pricing reflects this commitment.

We understand the importance of cost considerations and do not want fees to be a barrier in the City's selection of an auditor. We are open to discussing and negotiating fee -related matters to ensure they meet the City's needs and expectations.

In accordance with the Request for Proposal for Audit Services issued by the City of Beaumont, Rogers, Anderson, Malody & Scott, LLP hereby submits the following all-inclusive maximum cost proposal:

Fiscal years endinc June 30,
Option years
2025 2026 2027 2028 2029
Basic report to be issued
City audit, including ACFR and related reports $ 58,650 $ 58,650 $ 60,500 $ 62,375 $ 64,250 Total $ 58,650 $ 58,650 $ 60,500 $ 62,375 $ 64,250
Additional Audit Reports as needed
Single Audit* and related reports $ 6,270 $ 6,270 $ 6,520 $ 6,720 $ 6,920 Total $ 6,270 $ 6,270 $ 6,520 $ 6,720 $ 6,920
"= for the first major program, each additional major program $4, 250.

Hours and rates for 2025 audit (and for additional professional services):

Hourly Estimated Estimated
Position rate hours* charges
Partner $ 400 25 $ 10,000
Manager 200 25 5,000
Senior accountant 170 120 20,400
Staff accountant 155 150 23,250
`= excludes Single audit
I hereby certify that the undersigned is authorized to represent the firm stated above, and empowered to submit this bid, and if selected, is authorized to sign a contract with the City, for the services identified in the Request for Proposals.

Firm name: Rogers Anderson Malody & Scott, LLP
Signature:

Printed name: Scott W. Manno, CPA, CGMA
Title: Partner
Date: January 17, 2025
�',t
AICPA
GAQC Member
-1-
©©

City of Beaumont
Proposal for Professional Auditing Services
Cost Proposal
Cost summary (continued)
Governmental Accounting Standards Board Statements (GASBS) implementation One potential problem could be the implementation of any future GASBS. With our deep understanding of governmental accounting and auditing, constant training, and broad resources, we do not anticipate any issues during a GASB implementation. Our approach to any GASB statement implementation would be as follows: gain a thorough understanding of the pronouncement; determine applicability to the City; if applicable, discuss the statement and how it will affect the City with City staff; and provide guidance to City staff on the accounting and financial reporting implications.

Condition of records
Our proposed fee assumes the following: the City will be adequately prepared for the audit and the City's financial operations and working trial balance will be consistent from year to year. If, after we receive the working trial balances, we notice there are excessive new accounts over the prior year; or if there are excessive subsequent journal entries; prepared by client workpapers do not agree to the working trial balances, there are new funds/functions within the City, etc., or other changes that necessitate a significant amount of time to address, we will need to come to an agreed upon change order to address any possible additional costs incurred by the firm. If the need for additional work comes to our attention, we will immediately notify City staff. If you choose to have us perform the additional work, then such work will be performed at the same hourly rates applicable to the audit and set forth in an addendum to the contract between the City and our firm.

Management is also responsible for the implementation of new standards issued by the Governmental Accounting Standards Board. We will provide reasonable assistance in the preparation of the items, but any significant time needed to complete the financial statements will be billed separately.

Our proposed fee is also dependent on all items requested being completed in the format requested or in a mutually agreed upon format and uploaded to the Engagement Organizer hosted by our firm in a timely manner in accordance with the agree -upon audit timeline.

Software conversion/change
We understand that the City may occasionally implement software changes or conversions as part of its ongoing efforts to improve operational efficiency and financial management. Our firm is well- equipped to support clients through these transitions and ensure that the audit process remains seamless.

If the City initiates a software change or conversion, our firm will work closely with City staff to update account numbers, names, coding, and other financial data elements in alignment with the new system.

However, due to the additional time and resources required to accommodate these changes, there will be a minimum charge of $5,000 associated with this work.

This fee covers:
• Data Mapping and Reconciliation:
o Updating account structures and mapping old accounts to the new system. o Verifying accuracy and consistency in account names, numbers, and coding.

AICPA
GAQC Member
-2-

City of Beaumont
Proposal for Professional Auditing Services
Cost Proposal
Cost summary (continued)
• System Testing and Validation:
o Testing reports and financial statements generated from the new system to ensure they align with audit requirements.
o Addressing discrepancies or issues resulting from the conversion. • Process Adjustments:
o Modifying audit procedures to align with the new system's capabilities and reporting outputs. o Providing guidance on system -generated reports required for audit purposes.

We are committed to working efficiently and collaboratively with the City to minimize disruption and ensure a smooth transition. This additional charge reflects the specialized expertise and resources necessary to maintain the integrity and quality of the audit during periods of significant system change. 4•,
t
AICPA
GAQC Member
-3-

City of Beaumont Agreement #
C25-03
EXHIBIT "C"

CERTIFICATES OF INSURANCE AND ENDORSEMENTS
(insert behind this page)

ROGEAND-01

NGARCIA
,acoRO CERTIFICATE OF LIABILITY INSURANCE
��

DATE (MM/DD/YYYY)
12/31/2024
/2024
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(s).

PRODUCER
Orion Business Insurance and Risk Management Services, Inc. 1250 Corona Pointe Court, Suite 302
Corona, CA 92879
CONTACT Noemi Garcia
NAME:

HONNo, Ext):(626) 773-8488 Fax 951 737-5083
) (A/C,No):( )
E-MAILESS: [email protected]

INSURER(S) AFFORDING COVERAGE
NAIC #
INSURER A: Hartford Underwriters Ins Co
30104

INSURED
Rogers, Anderson, Malody & Scott LLP
735 E. Carnegie Drive
Suite 100
San Bernardino, CA 92408
INSURER B: Sequoia Insurance Company
22985
INSURER C: Travelers Cas&Surety Co of Am
31194
INSURER D :

INSURERE:

INSURER F :

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 POLIC ES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

INSR
LTR

TYPE OF INSURANCE
ADDL
INSD
SUBR
WVD

POLICY NUMBER

POLICY EFF
(MM/DD/YYYY)

POLICY EXP
(MM/DD/YYYY)
LIMITS
A
X

COMMERCIAL GENERAL LIABILITY
X
72SBABH1D9C
1/1/2025
1/1/2026

EACH OCCURRENCE
$ 1,000,000

CLAIMS -MADE
X
OCCUR

PP REMIS
REMI ETES((EaRENTEDoccurrence)
$ 1,000,000

MED EXP (Any one person)
$ 10,000

PERSONAL & ADV INJURY
$ 1,000,000
GEN'L

AGGREGATE
POLICY
OTHER:

X

LIMIT APPLIES

JERCOT-
PER:

LOC

GENERAL AGGREGATE
$ 2,000,000

PRODUCTS - COMP/OP AGG
$ 2,000,000
$
A

AUTOMOBILE
X

LIABILITY

ANY AUTO
OWNED

AUTOS ONLY

AUTOS ONLY
x

SCHEDULED
AUTOS

NON -OWNED UU
72SBABH1D9C

1/1/2025
1/1/2026

COMBINED SINGLE LIMIT
(Ea accident)
1,000,000
$
BODILY INJURY (Per person)
$
BODILY INJURY (Per accident)
$

PROPERTY DAMAGE
(Per accident
$
$
A
X

UMBRELLA LIAB

EXCESS LIAB
X
OCCUR

CLAIMS -MADE
72SBABH1D9C
1/1/2025
1/1/2026

EACH OCCURRENCE
$ 3,000,000

AGGREGATE
$ 3,000,000
DED
X
RETENT ON $ 10,000
$
B

WORKERS COMPENSATION

AND EMPLOYERS' LIABILITY

ANY PROPRIETOR/PARTNER/EXECUTIVE
OFFICER/MEMBER EXCLUDED?
(Mandatory in NH)
If yes, describe under
DESCRIPTION OF OPERATIONS below
Y/ N
N / A
QWC1419242
1/1/2025
1/1/2026
OTH-

X STATUTE I ER
E.L. EACH ACCIDENT
1,000,000
$
E.L. DISEASE - EA EMPLOYEE
$ 1,000,000
E.L. DISEASE - POLICY LIMIT
1,000,000
$
C
Errors & Omissions
106850737
1/1/2025
1/1/2026
See Below
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required Professional Liability $4,000,000 Per Claim;$4,000,000 Aggregate; $35,000 Per claim Deductible;Retoactive Date: N/A The City of Beaumont, its elected and appointed officers, employees, agents and volunteers are listed as additional insured as required by written contract with respect to General Liability. Notice of cancellation will be delivered in accordance with the policy provisions.

CERTIFICATE HOLDER

CANCELLATION
City of Beaumont
550 E. 6th Street
Beaumont, CA 92223

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE

THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.

AUTHORIZED REPRESENTATIVE
Vleervu, condo)
ACORD 25 (2016/03)
P�ae 662 of 789 © 1988-2015 ACORD CORPORATION. All rights reserved.

The ACORD name and o are registered marks of ACORD

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

THE

HARTFORD

BLANKET ADDITIONAL INSURED BY CONTRACT
This endorsement modifies insurance provided under the following:

BUSINESS LIABILITY COVERAGE FORM
Except as otherwise stated in this endorsement, the terms and conditions of the Policy apply.

A. The following is added to Section C. WHO IS AN INSURED:

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 contract or written agreement, or when required by a written permit issued by a state or governmental agency or subdivision or political subdivision that such person or organization be added as an additional insured on your Coverage Part, provided the injury or damage occurs subsequent to the execution of the contract or agreement, or the issuance of the permit.

A person or organization is an additional insured under this provision only for that period of time required by the contract, agreement or permit.

However, no such person or organization is an additional insured under this provision if such person or organization is included as an additional insured by any other endorsement issued by us and made a part of this Coverage Part.

The insurance afforded to such additional insured will not be broader than that which you are required by the contract, agreement, or permit to provide for such additional insured.

The insurance afforded to such additional insured only applies to the extent permitted by law.

The limits of insurance that apply to additional insureds are described in Section D. LIABILITY AND MEDICAL EXPENSES 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.
a. Vendors
Any person(s) or organization(s) (referred to below as vendor), but only with respect to "bodily injury" or "property damage" arising out of "your products" which are distributed or sold in the regular course of the vendor's business and only if this Coverage Part provides coverage for "bodily injury" or "property damage" included within the "products -completed operations hazard". (1) The insurance afforded to the vendor is subject to the following additional exclusions:

This insurance does not apply to:
(a) "Bodily injury" or "property damage" for which the vendor 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 that the vendor would have in the absence of the contract or agreement; (b) Any express warranty unauthorized by you;
(c) Any physical or chemical change in the product made intentionally by the vendor; (d) Repackaging, except when unpacked solely for the purpose of inspection, demonstration, testing, or the substitution of parts under instructions from the manufacturer, and then repackaged in the original container;
(e) Any failure to make such inspections, adjustments, tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products;
(f) Demonstration, installation, servicing or repair operations, except such operations performed at the vendor's premises in connection with the sale of the product; Form SL 30 32 06 21 Page 1 of 3
© 2021, The Hartford
(May include copyrighted material EEIgtbk$3 e7na9es Office, Inc., with its permission)

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

THE

HARTFORD
(g) Products which, after distribution or sale by you, have been labeled or relabeled or used as a container, part or ingredient of any other thing or substance by or for the vendor; or (h) "Bodily injury" or "property damage" arising out of the sole negligence of the vendor for its own acts or omissions or those of its employees or anyone else acting on its behalf. However, this exclusion does not apply to:
(i) The exceptions contained in Paragraphs (d) or (f); or (ii) Such inspections, adjustments, tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products.
(2) This insurance does not apply to any insured person or organization from whom you have acquired such products, or any ingredient, part or container, entering into, accompanying or containing such products. b. Lessors Of Equipment
(1) Any person or organization from whom you lease equipment; but only with respect to their 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 or organization. (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;
(b) In the performance of your ongoing operations performed by you or on your behalf; or (c) In connection with "your work" and included within the "products -completed operations hazard", but only if:
(i) The written contract, written agreement or permit 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, 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, including:
(i) 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 (ii) Supervisory, surveying, inspection, architectural or engineering activities.

This exclusion applies even if the claims allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by an insured, if the "bodily injury", "property Form SL 30 32 06 21 Page 2 of 3
© 2021, The Hartford
(May include copyrighted materialEitigaM4eatirat9es Office, Inc., with its permission)

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

THE

HARTFORD
damage", or "personal and advertising injury" arises out of the rendering of or the failure to render any professional service.
e. State Or Governmental Agency Or Subdivision Or Political Subdivision Issuing Permit (1) Any state or governmental agency or subdivision or political subdivision, but only with respect to operations performed by you or on your behalf for which the state or governmental agency or subdivision 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 federal government, 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 in one of the categories or classes listed above in 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 performed by you or on your behalf; (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, written agreement or permit 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, 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 architectural, engineering or surveying services, 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, surveying, inspection, architectural or engineering activities.

This exclusion applies even if the claims allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by an insured, if the "bodily injury", "property damage", or "personal and advertising injury" arises out of the rendering of or the failure to render any professional service described in Paragraphs f.(2)(a) or f.(2)(b) above.

Form SL 30 32 06 21 Page 3 of 3
© 2021, The Hartford
(May include copyrighted material EtIgaJ 01e7na9es Office, Inc., with its permission)

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

THE

HARTFORD

NOTICE OF CANCELLATION TO CERTIFICATE HOLDER(S)
This policy is subject to the following additional Conditions:

A. If this policy is cancelled by the Company, other than for non-payment of premium, notice of such cancellation will be provided at least thirty (30) days in advance of the cancellation effective date to the certificate holder(s) with mailing addresses on file with the agent of record or the Company.

B. If this policy is cancelled by the company for non-payment of premium, or by the insured, notice of such cancellation will be provided within ten (10) days of the cancellation effective date to the certificate holder(s) with mailing addresses on file with the agent of record or the Company.

If notice is mailed, proof of mailing to the last known mailing address of the certificate holder(s) on file with the agent of record or the Company will be sufficient proof of notice.

Any notification rights provided by this endorsement apply only to active certificate holder(s) who were issued a certificate of insurance applicable to this policy's term.

Failure to provide such notice to the certificate holder(s) will not amend or extend the date the cancellation becomes effective, nor will it negate cancellation of the policy. Failure to send notice shall impose no liability of any kind upon the Company or its agents or representatives.

Form SL 90 13 10 18 Page 1 of 1
© 2018, The Hartford
(May include copyrighted material EtIgaJ 01e7ra9es Office, Inc., with its permission)

City of Beaumont Agreement #
C25-03
EXHIBIT "D"

AGREED UPON TIMELINE OF DELIVERABLES
(insert behind this page)

BEAUMONT
-CALIFORNIA-

EXHIBIT D

FINANCIAL AUDTING TIMING CONSIDERATIONS
As outlined in the Request for Proposal, the chosen audit firm is required to ensure the timely completion of all audit tasks and deliverables, in strict adherence to the City's deadline of November 30th for submission of the final report to the City Council. Below, please find the timing requirements for the Financial Audit for the City of Beaumont.

DATE
ITEM
APRIL
Interim
OCTOBER 06, 2025
Entrance Conference commencement

OCTOBER
Field Work

END OF OCTOBER
Field work complete & drafts due
NOVEMBER 30
Final Financials for Council due

'11.11 '1
S
JANUARY 17, 2025

CITY OF BEAUMONT

PROPOSAL FOR PROFESSIONAL AUDITING SERVICES
FOR THE FISCAL YEARS ENDING JUNE 30, 2025 THROUGH 2029
(WITH THE OPTION FOR A ONE-YEAR EXTENSION)
CONTACT PERSONS:

SCOTT MANNO, CPA, CGMA
[email protected]

PREPARED BY

ROGERS ANDERSON MALODY & SCOTT, LLP
735 E Carnegie Drive, Suite 100
San Bernardino, CA 92408

BRIANNA SCHULTZ, CPA, CGMA
[email protected] LICENSE #2596
FEIN 95-2662063
909.889.0871

City of Beaumont
Proposal for Professional Auditing Services
Table of Contents
Page
Transmittal letter i
Firm qualifications and experience 1
Firm information
License to practice in California
Independence
About our firm
Range of services
Governmental Audit Quality Center
Housing Authority and Successor Agency experience
Single audit experience
ACFR preparation
Engagement quality control
Equal opportunity employer
External quality control review
Disciplinary action
Specific audit approach 5
Engagement approach
Audit approach and proposed audit segmentation
Level of staff and approximate number of hours assigned to each segment Sample sizes (including for compliance testing)
Intelligent audit technology
Analytical procedures
Auditing in a remote environment
Commitment to client collaboration
Proposed audit timing
City staff 12
Specific tasks required from City staff
Respective roles
Specific expertise desired 14
Key personnel 15
Quality of service and engagement team
Partner and supervisory staff involvement
Partner, supervisory, and staff qualifications and experience 15 Staff continuity
Continuing professional education
Assigned personnel
Engagement team resumes
Disclosure 23
References 23
Overview and scope of services 25
Services to be provided

CERTIFIED PUBLIC ACCOUNTANTS
January 17, 2025
City of Beaumont
550 E. 6th Street
Beaumont, CA 92223
We are pleased to respond, on behalf of Rogers, Anderson, Melody & Scott, LLP (RAMS), to your request for a proposal regarding professional auditing services. As a recognized industry leader and innovator for over 77 years, our goal has been to provide honest, high -quality, and objective results to all our clients, including governmental organizations such as yours. This dedication has fueled our firm's tremendous organic growth while ensuring personalized, client -focused services, with some clients being with us for over 25 years.

At RAMS, we are committed to achieving the highest quality audit in the most effective manner possible. We understand the complexities of performing governmental audits, which is why we have a dedicated team of auditors with specialized knowledge and experience to ensure our audits are planned and executed efficiently and effectively, providing you with the highest quality services.

We understand that the City of Beaumont (the City) will review other proposals during this process, but we believe that RAMS is the exceptional choice for your audit for the following reasons:

Reputation: We have an established reputation in the governmental and not -for-profit accounting and auditing community for providing excellent, timely service with high -quality reporting.

Advanced Tools: We utilize Teammate Analytics, a suite of over 200 Computer Aided Audit Tools (CAATs), empowering our audit teams to perform powerful data analysis that enhances our substantive audit procedures and helps identify transactions or amounts indicative of potential fraud.

Risk -Based Approach: Our intelligent, risk -based audit allows us to focus on key audit areas, increasing efficiency and resulting in a higher quality audit at a reasonable fee.

Experience: We currently provide auditing services to over 70 governmental agencies and not -for-profit organizations, including over 30 cities with enterprise activities and over 35 special districts.

Remote Capabilities: We have developed a comprehensive remote working environment for our audits. All our staff are equipped to work remotely effectively and efficiently, ensuring a quality audit.

Commitment to Deadlines: We are committed to meeting all reporting/auditing deadlines, resolving any issues encountered during your audit, and providing you with quality audit services.

Minimizing Stress: We understand the audit process can be stressful for you and your staff. We strive to make the audit process as trouble -free as possible by comprehensively planning and utilizing our staff and audit technologies efficiently and effectively while minimizing disruptions and miscommunications.

Personable Team: Our audit team members are personable and easy to work with, yet focused on the audit.

Through open and responsive communication, we aim to minimize operational distractions for your staff while maximizing quality service.

Quality Control: We have an extensive internal quality control review process to ensure your financial reports meet the highest standards. Each report prepared by the engagement team is reviewed by the engagement manager, and thoroughly examined by two partners and at least one professional proofreader.

Award -Winning Assistance: We have assisted many clients with the preparation of their Annual Comprehensive Financial Reports. All our clients who submitted reports for GFOA award have received them.

Our participation as a GFOA reviewer also indirectly benefits our clients in the quality review process. -i-
Tel. 909-889-0871 I www.ramscpa.net j ?35 E. Carnegie Dr. Suite 100, San Bernardino, CA 92408

Value for Inv estment: Our fee estimate provides a fair and reasonable investment, commensurate with the level of se rvice pro vided and the experience of the audit team members. While we may not be the lowest bidder, our focus is on delivering the best value and high -quality services, pricing our engagements accordingly.

Local Presence: As a So uthe rn California firm, our employe es live, wo rk, and shop in the region, all owing local cities to benefit from our sales and property taxes.

Our proposal is prepared clearly, concisely, and in accordance with the request fo r proposal. We believe our firm, staff, and reputation as a leader in governmental auditing exceed the need for the typical excessive information found in other proposals.

Rogers, Anderson, Malody & Scott, LLP is properly licensed to practice in California, including all the professional staff assigned to this engagement. Mrs. Brianna Schultz , Partner and Mr. Manno, Partner, are authorized to represent the firm, submit the bid, and sign a contract with the City. We understand the work to be done as listed in the section of this propo sal titled "Services to be Pro vided," and we are committed to meeting any agreed -upon time frames. This proposal is a firm and irrevocable offer for ninety (90) days.

Thank you for the o pportunity to pre se nt our proposal to the City. We are committed to exceeding y our expectations of an auditor and believe this proposal provides you with comprehensive information about our firm, service team members, and our customized audit approach. We l ook f orward to establishing a long and mutually beneficial relationship with the City. Please feel free to contact us if you have any questions regarding this proposal.

Respectfully y ours,

ROGERS, A NDE RSO N, MALODY & SCOTT, LLP
Scott Manno, CPA, CGMA
Partner
-ii-

City of Beaumont
Proposal for Professional Auditing Services
Firm qualifications and experience
Firm information
Name:

Address:

City, State, Zip Code:

Corporate Structure:

State/County of Incorporation:

Website:

Contact Information:

License to practice in California
Rogers, Anderson Malody & Scott, LLP
735 E. Carnegie Drive, Suite 100
San Bernardino, CA 92408
Limited Liability Partnership
California/San Bernardino
www.ramscpa.net
Scott Manno, CPA, CGMA, Partner, smanno(@ramsci a.net,
909.889.0871
Rogers, Anderson, Malody & Scott, LLP is licensed to practice in the State of California. Our key professional staff, which includes the partners, managers, and supervisors, are all certified public accountants licensed to practice in the State of California and follow all applicable Board of Accountancy standards.

Independence
Rogers, Anderson, Malody & Scott, LLP is independent of the City and any component units, as defined by general standard number two of the generally accepted auditing standards, and by the second general standard for government auditing in the U.S. Government Accountability Office's Government Auditing Standards.

About our firm
We are a local firm, established in 1948, located at 735 E. Carnegie Drive, Suite 100, San Bernardino, California. As a comprehensive accounting firm, we offer a full spectrum of services. With over 75 years of public practice experience, we are one of the oldest, most trusted, and respected CPA firms in Southern California, specializing in auditing, accounting, and management advisory services for governmental agencies and not -for-profit organizations. Annually, we dedicate over eighteen thousand hours to our audit practice, encompassing cities, redevelopment successor agencies, water districts, other special districts, not -for-profit corporations, and joint power authorities. Our focus on government accounting and auditing is a primary commitment, ensuring we deliver top-quality services to local governments.

We recognize the importance of engaging auditors with a deep understanding of the complex and ever - evolving accounting and compliance issues that governments face today. Our firm boasts a rich history in governmental accounting and auditing, equipping us with invaluable experience, in-depth knowledge, and the technical expertise necessary to conduct high -quality governmental audits. This expertise enables us to provide exceptional service and effective solutions at competitive fees, reflecting our value to clients.

Furthermore, our active participation in various industry associations ensures we stay updated on the latest issues in governmental accounting, auditing, and operations. We promptly share any valuable insights with our clients to enhance their benefit.

Our firm has a total staff of fifty-four people, which includes sixteen certified public accountants. The staff consists of six partners, six managers, sixteen supervisors/senior accountants, twenty-two staff accountants, and four support staff. The audit staff consists of thirty-five members who devote over 80% of their time to municipal engagements. The engagement team assigned to the City's engagement will consist of the following full-time staff: one audit partner, one audit manager, one audit supervisor/senior, and two to three staff auditors. All personnel are out of our San Bernardino office. !•`r
AICPA
GAQC Member
-1-

City of Beaumont
Proposal for Professional Auditing Services
Firm qualifications and experience (continued)
Range of services
In addition to auditing services for governmental entities, our firm offers a wide range of other services, including:
• SB 341 compliance (Successor Agencies)
• Internal control agreed -upon procedures
• Finance director and accounting support services
• Studies and evaluations of financial condition and fiscal policies • Transient Occupancy Tax agreed -upon procedures
• Franchise (refuse, cable) agreed -upon procedures
• Development and review of accounting policies and procedures • Cash management studies
• Assistance with financing and public bond offerings
• Support with franchise agreements (ambulance, cable, television, refuse, etc.) Additionally, we provide accounting, auditing, attest, and consulting services to both for-profit and not -for- profit entities. Our services also include tax preparation and consulting for individuals, corporations, and partnerships. We offer complimentary tax consultation services to our municipal audit clients.

Governmental Audit Quality Center
As a member of the American Institute of CPAs Governmental Audit Quality Center (GAQC), we at RAMS are dedicated to maintaining the highest quality standards. Our commitment to the GAQC membership requirements includes designating a partner responsible for the quality of our governmental audit practice, establishing rigorous quality control programs, conducting annual internal inspections, and publicly sharing our peer review report findings. Our goal is to continually enhance our quality initiatives to provide the highest quality audit services possible.

Being a part of the GAQC also grants us access to comprehensive resources that further improve the quality of your audit. Our membership ensures we receive timely information on technical, legislative, and regulatory matters, which we apply to your audit to ensure compliance with current standards and regulatory changes, benefiting our clients.

Housing Authority and Successor Agency experience
Over the past five fiscal years, the firm has audited the Housing Authorities and Successor Agencies for the following entities:

City of South Pasadena
City of Thousand Oaks
City of San Marcos
City of Moorpark
City of Fillmore
City of Sierra Madre
City of El Cajon
Town of Yucca Valley
City of Poway
!•`r
AICPA
GAQC Member
City of San Bernardino
City of La Verne
City of San Jacinto
City of Twentynine Palms
City of La Mesa
City of Rosemead
City of Hawthorne
City of West Covina
City of Claremont
-2-

City of Beaumont
Proposal for Professional Auditing Services
Firm qualifications and experience (continued)
Single audit experience
Many of our municipal clients, as well as other governmental and not -for-profit clients, require audits in accordance with Uniform Guidance. Recently, we have conducted single audits for numerous entities.

Our specialized Single Audits Team is led by Partners and Managers who hold Intermediate and Advanced Single Audit Certifications from the AICPA, ensuring a successful and thorough engagement.

ACFR preparation
We have extensive experience in preparing Annual Comprehensive Financial Reports (ACFR). For the past several years, our team prepared over between 20-30 ACFRs per year, with each entity receiving the Certificate of Achievement for Excellence in Financial Reporting from the GFOA. Additionally, we have assisted many cities and special districts in developing their first -year reports for submission. Four of our audit partners and five of our managers/supervisory staff serve as technical reviewers for the GFOA award program.

We ensure all ACFRs comply with the GFOA certificate program checklist and address any prior year comments to guarantee thorough and compliant reports.

Engagement quality control
Our internal quality control review process ensures your audit meets the highest standards. Financial reports prepared by a senior member of the engagement team undergo multiple levels of review: first by the engagement manager/supervisor, followed by the engagement partner, and finally a technical review by the engagement Quality Control partner. Additionally, all reports are proofread by at least one professional staff member. All audit workpapers are reviewed by the in -charge auditor and the partner in charge of the engagement.

Equal opportunity employer
Our firm is an equal opportunity employer committed to providing employment opportunities to all qualified individuals, regardless of race, color, sex, religion, national origin, or disability. Our diverse staff represents a wide range of cultures and ethnic backgrounds. We offer advancement opportunities based on ability, skill, and desire to progress within the firm.
�•` AICPA
-3-

GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Firm qualifications and experience (continued)
External quality control review
As a member of the AICPA Private
Companies Practice Section, our
firm has actively participated in the
"Peer Review" program since 1993.

Every three years, an independent
firm of certified public accountants
conducts an external review of our
firm. This participation ensures that
our engagements, firm policies, and
audit procedures consistently meet
the standards set by the AICPA, the
Yellow Book, and the California
State Board of Accountancy.

Notably, throughout our
participation in this program, our
firm has consistently received pass
ratings from the peer reviewers.

During each peer review, an
independent firm assesses our
policies and procedures and
inspects a representative sample of
engagement workpapers and
reports, including those related to
governmental entities and
engagements subject to the
Uniform Guidance. For the year
ended November 30, 2020, our firm
received a pass rating. This rating
indicates that our auditing practices
are suitably designed and complied
with, providing reasonable
assurance of performing and
reporting in accordance with
applicable standards. The results
affirm that our custom audit
approach and procedures are
technically sound and compliant
with all relevant standards.

Disciplinary action
Grant Bennett Associates
A MIOFESSICINALCORPON.471011
Repast on the Flor's System of Quality Control
June d, 2021
To the Partners of Rogers, Anderson, Melody & Scott, LLP, and the Peer Review Committee of the California Society of CPAs
We have reviewed the system of quaky control for the accounting and auditing practice of Rogers. Anderson.

Melody & Scott, LLP (the firm) in effect for the year ended November 30. 2020. 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 (Standards).

A summary of Me nature, objectives. scope, limitations of,, and the procedures performed in a System Review as described in the Standards may be found at wvrecarcpa.rrg orsummary. The summary also includes an explanation of how engagements identified as not performed or reported in conformity with applicable professional standards, if arty, are evaluated by a peer reviewer to determine a peer review rating.

Firm's Responsibility
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 it an material respects The nun is also responsible for evaluating actions to promptly remediate engagements deemed as not performed or reported in conformity with professional standards, when appropriate, and liar remediating weaknesses In its system of quality control if any.

Peer Revlewar's Responsibility
Our responsmb&my is to express an opinion on the design of the system of quality control and the firm's compliance therewith based on our review.

Required Selections and Considerations
Engagements selected for review included engagements performed wider GovpmmertAud4Ery Standards, Including a compliance audit under the Single Audit Act and an audit of an employee benefit plan As a part of our peer review, we considered reviews by regulatory enmities as communicated by the firm if applicable, in determining the nature and extent of ow procedures Opinion
In our opinion, the system of quality control for the accounting and auditing practice of Rogers, Anderson, Melody & Scott, LLP in effect for the year ended November 30, 2020. has been suitably designed and complied with to provide the frm with reasonable assurance of performing and repotting In conformity with applicable professional standards in elF material respects. Ferns can receive a rating of putts, pass with delfciexy{ms) or jltiL Rogers Anderson, Melody & Scott LLP has received a peer review rating of pass. .31..4!t la.aMaala.

GRANT BENNETT ASSOCIATES

A PROFESSIONAL CORPORATION
Certified Public Accountants
GBA
P
metribaciwaue
10850 Gold Center Drive. Suite 260
Rancho Cordova, CA 95670
916/922-5109 FAX 916/641-5200
Princeville, HI 96722
888/769-7323
Our firm has a spotless record with no disciplinary actions taken or pending against it by state regulatory bodies or professional organizations. Additionally, there has never been any pending or settled litigation, nor any civil or criminal investigations. We are also not aware of any federal or state desk reviews or field reviews of our audits in the last three years.

Our firm has no record of substandard work.

In addition to external quality control reviews, our firm conducts annual in-house monitoring procedures that mirror the external peer review processes, ensuring ongoing compliance and quality in our audit and attest engagements.
`6` AICPA
-4-

©ti
GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Specific audit approach
Engagement approach
Our engagement approach for your audit is meticulously designed to ensure measurable progress and successful outcomes. This involves setting clear goals and maintaining frequent communication between the engagement partner, lead auditor, and the team. Our approach leverages our extensive knowledge and expertise in governmental accounting and auditing to identify and address key audit and accounting risks specific to the government sector. Each year's audit includes a complete reassessment of the control environment, enabling us to respond to any changes in risk assessment effectively.

Key components of our Engagement Approach are as follows:

Knowledge and Experience: With over 77 years of auditing governmental entities of all sizes, we possess in-depth knowledge of the governmental environment. This enables us to perform efficient and effective audits, conduct detailed risk assessments, and identify significant audit risk areas within the City's control environment.

Intelligent Design: Utilizing advanced audit software and data analytic tools (Engagement and Teammate Analytics), we can analyze large volumes of data quickly, enhancing both the efficiency and effectiveness of our audits.

Professional Oversight: Our partners, managers, and supervisors have extensive experience in governmental audits, allowing us to design and execute audit strategies that are both effective and efficient.

Timeliness: Meeting deadlines is a professional commitment for us. We ensure that all required and agreed -upon deadlines are met.

Open Communication: Maintaining open lines of communication with all parties involved, including City management and staff, helps eliminate surprises and ensures a smooth audit process.

Availability: Our engagement team members are available year-round for any questions or additional consultation. City staff will have direct access to the partner, manager, and supervisory staff during and after the engagement.

Cost -Effectiveness: Our customized audit approach and experienced auditors help reduce overall audit costs while delivering effective audits and high -quality reports.

Risk -Based Approach: We perform detailed risk assessment procedures to understand the City and its environment, including internal controls. This forms the basis for our assessment of risks of material misstatement at the financial statement and relevant assertion levels. We may perform further audit procedures concurrently with risk assessment, as necessary. !•`r
AICPA
GAQC Member
-5-

NEI

City of Beaumont
Proposal for Professional Auditing Services
Specific audit approach (continued)
As stated elsewhere in our proposal, our primary objective is to conduct an audit of the financial statements in accordance with required auditing standards and to express an opinion on those statements. Our engagement approach also offers several value-added benefits at no additional cost:

Efficiency and Minimal Disruption: Our audits are designed to be efficient and effective, minimizing disruption to office operations.

Practical Observations and Recommendations: We provide practical observations and recommendations on internal control issues, accounting standards implementation, and related policies and procedures.

Operating Efficiency Opportunities: We identify opportunities for operating efficiencies that can help reduce the City's operating costs.

By employing this comprehensive engagement approach, we ensure that the City's audit is conducted with the highest standards of quality and professionalism.

Audit approach and proposed audit segmentation
The following is a summary of the audit team's approach for your engagement. The audit will be divided into the following segments:

Segment 1 - Interim Testing: Planning, Pre -Audit Administration, and Internal Control Testing Objectives: During this phase, our principal objectives will be to gather information about the City and its environment, including its internal controls over financial reporting.

Approach:
• Initial Meetings:
o Meet with the City's staff to determine convenient dates to begin our audit and to discuss the assistance to be provided by the City's staff.
• Engagement Team Brainstorming:
o Hold brainstorming sessions with engagement team members to discuss the susceptibility of the City's financial statements to material misstatement and fraud. • Review and Evaluation:
o Review and evaluate the City's accounting and reporting processes by examining the prior year's audit workpapers, City -prepared documents such as budgets, in-house financial reports, policies and procedures manuals, and minutes of governance meetings. o Perform analytical procedures to enhance our understanding of the City and identify areas that may need further assessment and additional testing.
• Regulatory Review:
o Review and retain copies of any pertinent local, state, and federal statutes, regulations, or charters that apply to the City.
!•`r
AICPA
GAQC Member
-6-

City of Beaumont
Proposal for Professional Auditing Services
Specific audit approach (continued)
• Internal Control Evaluation:
o Obtain a thorough understanding of the City's internal controls over financial reporting and compliance by documenting key internal control components, utilizing questionnaires, walkthroughs, inquiries, and observation.
o Evaluate the design of controls relevant to the audit and test controls, if control risk is to be assessed below maximum, by selecting a sample of transactions and reviewing supporting documentation. • Management Communication:
o Document and review any findings noted during the testing of internal controls with management. o Provide a preliminary management letter with recommendations for improving any weaknesses in operations and suggestions for enhancing the efficiency of the City's operations. • Audit Data Analytics:
o Utilize powerful audit data analytic software to analyze large amounts of data quickly and focus on areas/transactions that are red -flagged.

IT General Controls:
• Security Access Controls:
o Evaluate general system security settings, password parameters, processes for adding, deleting, and changing security access, access capabilities of various user types, access controls to networks and financial applications, data file access controls, and physical access to networks and servers. • Computer Operations:
o Evaluate backup and recovery processes and review procedures for identifying and handling operational problems.
• System Development and Changes:
o Evaluate processes related to system development and system changes, if applicable. • Application Testing:
o Determine the necessity of testing application controls based on professional judgment during the planning stages of the engagement.

Audit Team: This phase will be performed by the audit manager, audit senior, and two to three staff accountants, under the direct supervision of the audit partner.

This comprehensive approach ensures a thorough understanding of the City's financial environment and internal controls, setting a solid foundation for the audit. k•`r
AICPA
-7-

Liallild
GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Specific audit approach (continued)
Segment 2 - Year -End Testing: Substantive Testing
Objectives: During this phase, our primary objectives will be to assess the risk of material misstatement at the financial statement level and specific assertions, design overall responses to assessed risks and further audit procedures, perform substantive tests, and complete the audit while evaluating audit findings, if applicable.

Approach:
• Risk Assessment and Audit Plan Development:
o Identify significant risks and develop a detailed audit plan using the results from Segment 1. • Design and Perform Substantive Tests:
o Design substantive tests of account balances tailored to the City's operations and assessed level of risk. Substantive procedures will include testing material balance sheet accounts, material revenue and expenditure/expense accounts, along with various analytical procedures, as necessary. o Confirm various accounts with outside parties (e.g., cash, investments). • Risk Evaluation:
o Determine whether our testing supports the initially assessed level of risk at both the financial statement level and the assertion level.
• Audit Adjustments:
o If any proposed audit adjustments are noted, we will discuss and explain them in detail with the appropriate level of management before posting.

Audit Team: This phase will be performed by the audit manager, audit senior, and two to three staff accountants, under the direct supervision of the audit partner.

Segment 3 - Reporting: Report Preparation and Audit Conclusion (Workpaper Review) Objectives: During this phase, our principal objectives will be to evaluate whether the financial statements, as a whole, are free from material misstatement, form an opinion(s), and issue our report.

Approach:
• Material Misstatement Evaluation:
o Determine, based on our substantive testing and other procedures, whether the financial statements, as a whole, are free of material misstatement. This will provide the basis for our opinion(s). • Workpaper Review:
o Review all audit workpapers to ensure the audit was performed in accordance with required standards (GAAS, GAGAS, etc.) and prepare drafts of all required reports by the agreed -upon dates. • Quality Control Review:
o Conduct an independent review of the financial statement draft by the engagement's quality control partner and issue all reports by the agreed -upon dates.

Audit Team: This phase will be performed by the audit manager, audit senior, and one staff accountant, under the direct supervision of the audit partner. Additionally, the engagement's quality control partner will perform a detailed quality control review of the financial statements. !•`r
AICPA
GAQC Member
-8-

City of Beaumont
Proposal for Professional Auditing Services
Specific audit approach (continued)
Customization and Communication: The procedures listed above are general. After our initial review of the City and our detailed risk assessment, we will customize the engagement to address the specifics of the City and the audit itself. We will determine which procedures to perform based on our risk assessment. All our audits are customized to each entity, ensuring a complete, effective, and efficient audit. Our approach is founded on open communication, a strong knowledge of the City's operations, and detailed planning at the initial stages of the audit.

Timeliness and Resource Allocation: Our firm is dedicated to performing a timely audit engagement. Prior to the start of the audit, we will meet with City staff to agree on adequate timeframes for the performance of the audit and the release of the financial statements. We will allocate the necessary resources to meet these agreed -upon timeframes.

Level of staff and approximate number of hours assigned to each segment Segment Partner Mana•er Senior Staff Total
Segment 1
Segment 2
Segment 3
Totals*
5 6 30 57
9 10 48 75 142
11 9 42 18 80
98 25 25 120 150 320
= excludes Single Audit hours
Sample sizes (including for compliance testing)
Our sample sizes will be determined in accordance with the AICPA's Audit and Accounting Guide, Audit Sampling, and will be selected using professional judgment or our TeamMate Analytics software, depending upon circumstance, as permitted by Statement on Auditing Standards. Our methods are designed to provide the most audit coverage without expending excess time. Our sample sizes will depend upon our preliminary assessment of control risk, our planned substantive testing and analytical procedures as well as our professional judgement.

We utilize our Computer Aided Audit Tools (CAAT) software, Teammate Analytics, to draw our audit samples.

The software allows us to generate random samples, systematic samples, stratified samples, attributes samples as well as monetary unit samples (also called probability -proportional -to -size or dollar unit sampling).

Intelligent audit technology
Our audits leverage advanced technology through powerful software tools such as Engagement and Teammate Analytics. Additionally, all audit team members are connected wirelessly, enabling real-time information sharing. The benefits of our audit technologies include:

Teammate Analytics: This suite of over 200 dynamic Computer Aided Audit Tools (CAATs) allows us to analyze large amounts of data in seconds. Using data directly from the City, we can search for duplicate checks, detect transactions during unusual hours or on holidays/weekends, perform Benford's Law analysis, and identify instances where a vendor has issued multiple invoices with sequential references, among many other tests. This empowers our audit teams to perform powerful and meaningful data analysis, enhancing our value-added services.
k•`r
AICPA
-9-

GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Specific audit approach (continued)
Customized Analytical Schedules: We create our own analytical schedules to easily compare current balances to prior year balances and current vs. budget balances, significantly reducing the time required from City staff.

Real -Time Financial Statement Analysis: Once your trial balances and financial statements are entered into our software, we can review your financial statements in the field, allowing us to notice and address any variances immediately.

Linked Financial Statement Schedules: We link financial statement schedules directly to our audit software trial balances, enabling us to provide the City with fund financial statements almost immediately after importing the trial balances.

Audited Trial Balances: We provide the City with audited trial balances that show the coding of the financial statement schedules, making it easier for City staff to review. These reports include each account coded to a specific financial statement line item/function and journal entries posted during the audit.

Analytical procedures
To effectively utilize analytical procedures, industry background and knowledge are essential. With our firm's extensive experience and qualified staff, we possess the necessary knowledge to apply analytical procedures efficiently throughout our audit of the City.
• Interim Phase:
o Compare current and prior year unadjusted balances to identify areas requiring additional analysis. o Compare current year actual amounts to the City's annual budget (both original and adopted). • Final Phase:
o Perform procedures similar to those in the interim phase. o Compare certain financial ratios for current and prior years. o Conduct reasonableness tests.
o Investigate any significant variances further through inquiry and additional substantive testing until resolved to our satisfaction.
• Post -Fieldwork:
o Compare current and prior year audited balances, considering expected relationships based on our knowledge of the City, similar entities, and the general economic environment. o Utilize additional analytical techniques such as trend analysis as needed.

Unlike other audit firms, we use analytical procedures to supplement, not supplant, our substantive testing, ensuring a thorough and comprehensive audit
Auditing in a remote environment
The evolution of technology has revolutionized the accounting and auditing profession, enabling us to provide high -quality services remotely with efficiency, precision, and timeliness. During the COVID-19 pandemic, our firm adapted quickly to a fully remote audit environment and developed processes that have since become integral to our standard approach. These advancements not only enhanced the quality of our audits but also resulted in significant efficiencies for both our team and our clients. !•` AICPA
GAQC Member
-10-

City of Beaumont
Proposal for Professional Auditing Services
Specific audit approach (continued)
Remote Audit Approach
• Technology Utilization:
o We use secure cloud -based platforms for document sharing and management, such as Engagement Organizer, ensuring client data remains safe and accessible. o Video conferencing tools (e.g., Zoom, Microsoft Teams) facilitate real-time communication with City staff, enabling collaborative discussions and efficient issue resolution. • Workflow and Communication:
o Regular Communication: We maintain routine contact with clients throughout all phases of the audit via email, phone calls, and video meetings.
o Responsiveness: Our team prides itself on quick turnaround times for questions or issues, making remote collaboration as seamless as on -site interactions. • Flexibility for On -Site Presence:
o While we anticipate performing the majority of our work remotely, we understand that some aspects of the audit may benefit from an on -site presence. If desired, we will work with the City to determine an acceptable staffing level for in -person activities, balancing health, safety, and operational needs.

Benefits of Remote Auditing
• Efficiency Gains:
o Remote auditing reduces the need for travel time, allowing both auditor and auditee to focus on the tasks at hand, resulting in faster turnaround on requests and issue resolution. o Immediate access to digital documents and records eliminates delays associated with physical transfers of information.
• Enhanced Quality of Life:
o By minimizing travel, our staff can dedicate more time to client work and professional development, improving overall morale and productivity.
• Environmental Impact:
o Reducing unnecessary travel decreases traffic congestion, lowers fuel consumption, and contributes to improved air quality in Southern California.
• Year -Round Availability:
o Our remote -first approach fosters an ongoing partnership, encouraging clients to reach out throughout the year for guidance on matters that could impact the audit or their financial reporting.

Commitment to client collaboration
We understand that each client's needs are unique, and we remain flexible in our approach to ensure the audit process aligns with the City operational requirements. Our primary goal is to provide a smooth and efficient audit experience, leveraging technology while maintaining the personal connection and professionalism our clients expect. Should the need arise for on -site activities, our team will seamlessly integrate in -person work while maintaining the efficiencies gained through remote auditing practices. �•` AICPA
-11-

GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Specific audit approach (continued)
Proposed audit timing
• Auditor
transition:

Meet with
prior auditor
to review
workpapers.
• Entrance
conference
to meet with
management
for pre -audit
planning.
• Preliminary
risk
assessment
procedures.

City staff
Audit planning
Segment 1 -
Planning/internal
control
Segment 2 -
Substantive
testing/analysis
Segment 3 -
Report
preparation/work
.a•er review
May/June
Anticipated timing of each segment
October/November
December/January
• Obtain an understanding of
systems, internal controls,
and current -year issues.
• Assess and evaluate design
and implementation of key
internal controls (including
IT related).
• Perform tests of internal
controls as needed.
• Identify control deficiencies
• Perform detailed risk
assessment procedures.
• Draft internal control
comment letter.
• Develop detailed audit plan
— provide management with
a detailed listing of items
needed to perform the audit,
including the timing of when
items are needed.
• Perform substantive audit
fieldwork, including
substantive analytical
procedures.
• Consider whether audit
evidence is sufficient to
form an opinion.
• Conduct exit conference
with management to
discuss proposed entries,
internal control issues, etc.
• Determine whether,
based on our substantive
testing and other
procedures, the financial
statements, taken as a
whole, are free of
material misstatement.
• Review all workpapers.
• Evaluate financial
statements and note
disclosures.
• Perform final analytical
procedures.
• Draft required reports.
• Issue final required
reports by or before
agreed upon date.
• Present to governing
body as needed.

Our firm recognizes that effective communication is critical to the success of any audit engagement, especially when working with municipal clients. We prioritize proactive, transparent, and consistent communication to ensure alignment with City staff, jurisdictional stakeholders, and the public. Our approach includes the following elements:
• Kickoff Meeting: At the outset, we will hold a comprehensive kickoff meeting with City staff and relevant stakeholders to establish expectations, timelines, and key deliverables. This meeting will allow us to identify primary points of contact, preferred communication methods, and any specific concerns or priorities of City staff.
• Regular Status Updates:
o Frequency: Weekly or biweekly check -ins (virtual or in -person) to discuss progress, address concerns, and update City staff on the audit's status.
o Deliverables: Updates will include upcoming deadlines and any potential obstacles requiring City input or action.
if4 AICPA
-12-

©d
GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
City staff (continued)
• Collaborative Stakeholder Engagement:
o Other Jurisdictional Stakeholders: When applicable, we will coordinate meetings or requests with other jurisdictional entities (e.g., pension plan administrators, grantors) to minimize duplication of efforts and ensure consistency in information sharing.
o Public Communication (if necessary): If the audit findings require public presentation, we will collaborate with City staff to prepare materials, ensure transparency, and present information in a manner that is clear and accessible to all stakeholders. • Communication Channels: We will utilize email, virtual collaboration tools (such as Microsoft Teams or Zoom), and secure document -sharing platforms to facilitate efficient communication and minimize disruption to City operations.

Specific tasks required from City staff
To perform the audit efficiently, we will require the following tasks and support from City staff:
• Document Preparation and Provision:
o Trial balances, general ledger details, and reconciliations for key accounts. o Supporting schedules for capital assets, revenues, expenditures, and debt obligations, etc. o Copies of policies, procedures, contracts, and agreements relevant to the scope of the audit. • System Access and Support:
o Access to financial systems, reports, and databases necessary for testing and analysis. o Availability of IT personnel for queries related to system -generated reports, if needed. • Coordination with Departments:
o Assistance in scheduling meetings with department heads and other relevant stakeholders, if needed. o Coordination to ensure timely responses to audit requests. • Feedback on Findings:
o Review and validation of preliminary audit findings to ensure accuracy and provide context.

Respective roles
City Staff Roles:
• Primary Point of Contact: Serve as the liaison between our audit team and City departments to streamline communication and provide requested information promptly. • Information Providers: Deliver accurate and timely data, supporting documentation, and responses to audit inquiries.
• Reviewers: Review draft findings, journal entries, provide feedback, and assist in clarifying any discrepancies.

Our Firm's Roles:
• Project Management: Take full responsibility for planning, executing, and monitoring all aspects of the audit process.
• Data Analysis: Conduct detailed testing and analysis of financial data to ensure compliance and accuracy with generally accepted accounting principles.
!•`r
AICPA
GAQC Member
-13-

City of Beaumont
Proposal for Professional Auditing Services
City staff (continued)
• Issue Resolution: Identify, document, and communicate any discrepancies or concerns, and work collaboratively with City staff to resolve them.
• Reporting: Prepare clear, concise reports summarizing findings, recommendations, and areas for improvement, ensuring compliance with applicable standards.

By maintaining a collaborative and structured approach, we aim to deliver a seamless audit process that meets the City's needs while minimizing disruption to daily operations.

Specific expertise desired
Our firm has substantial experience providing audit and advisory services to municipalities with extensive use of Community Facility Districts (CFDs), Development Impact Fees (DIFs), and land -secured bond issuances.

This specialized expertise allows us to understand the complexities and nuances associated with these financial instruments and funding mechanisms.

Community Facility Districts (CFDs):
• Audit Expertise: Our team has audited numerous CFD issuances, including recording the issuance, testing for compliance, and the proper allocation of funds to authorized uses. • Governance and Oversight: We have experience reviewing the administration of CFDs to ensure compliance with the Mello -Roos Community Facilities Act, including annual reporting requirements, and proper segregation of funds.

Development Impact Fees (DIFs):
• Compliance Audits: We have audited DIF programs for several municipalities, ensuring that fee collections, and expenditures align with applicable legal requirements, including California's Mitigation Fee Act (AB 1600).
• Program Management: Our work includes assessing whether DIFs are used appropriately to fund infrastructure and public facilities directly related to development impacts.

Land -Secured Bond Issuances:
• Issuance and Compliance: We have extensive experience auditing land -secured bonds, such as those used to finance public infrastructure within CFDs. This includes reviewing official statements, assessing compliance with continuing disclosure obligations, and evaluating the use of proceeds. • Debt Service and Credit Analysis: Our team is skilled in analyzing debt service schedules, coverage ratios, and assessing the fiscal health of the issuing district to ensure long-term viability and compliance with bond covenants.

We are confident that our demonstrated expertise in CFDs, DIFs, and land -secured bonds will add significant value to the City's financial oversight and help maintain public trust in these critical funding mechanisms. k•`r
AICPA
-14-

GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Key personnel
Quality of service and engagement team
The quality of service you receive hinges on the capabilities of the individuals assigned to your engagement and how effectively these personnel resources are organized. Our professionals are highly trained, knowledgeable, and have a deep understanding of the environment in which governmental and not -for-profit entities operate. This expertise is crucial for providing the City with an effective and efficient audit.

Our engagement team brings significant experience and a practical understanding of governmental accounting and auditing, combined with a broad business perspective. Each member has access to a wide range of technical resources and knowledge bases, enabling them to offer practical observations and effective solutions to the City.

Partner and supervisory staff involvement
Our partners and supervisory staff are actively and continuously involved in all aspects of their engagements.

We believe that their involvement is a key aspect of the overall audit process. This includes being on -site for interim and year-end fieldwork, ensuring a proper, efficient, and effective audit with minimal disruption to your staff. The time spent on -site by partners and supervisory staff allows them to understand the City's accounting processes and procedures thoroughly. This understanding helps in evaluating and developing opportunities for efficiency and offering practical advice to improve your accounting processes and procedures.

All professionals on this engagement have extensive experience with audits similar to the City's, eliminating the need for the City to train our team.

Partner, supervisory, and staff qualifications and experience Staff continuity
Maintaining continuity of audit staff is a principal concern for our firm. To retain our staff, we offer competitive wages, advancement opportunities, generous medical packages, a retirement plan, bonus opportunities, and educational benefits. While we strive for continuity, we acknowledge that staff changes may occur. We plan to provide consistent staff year to year, which is in the best interest of both the City and our firm. Continuity ensures an orderly, efficient, and less disruptive audit experience. In case of staff changes, principal supervisory and management staff, including engagement partners, managers, other supervisory staff, and specialists, may be replaced if they leave the firm or are promoted. However, the City reserves the right to accept or reject replacements.

Due to the significant involvement of our partners in all engagements, any staff transition would have a minimal impact on audit efficiency and effectiveness in subsequent years.

Continuing professional education
Our auditor specialists stay current in this technical practice area by adhering to, and typically exceeding, the continuing professional education requirements of Government Auditing Standards and the State Board of Accountancy guidelines. All professionals at our firm participate in continuing professional education (CPE) programs sponsored by various organizations, including the Government Finance Officers Association, the American Institute of Certified Public Accountants, the California State Society of Certified Public Accountants, the California Society of Municipal Finance Officers, and the Association of Government Accountants. These programs ensure our clients are serviced by the best -trained and most proficient government auditors and accountants available. We also provide in-house training conducted by our partners and senior staff using published resources. All staff are required to attend fraud and ethics training. Our goal is to provide professional staff with continuing education that exceeds the minimum standard of 80 hours over two years. �•` AICPA
GAQC Member
-15-

City of Beaumont
Proposal for Professional Auditing Services
Partner, supervisory, and staff qualifications and experience (continued) According to our firm's Quality Control document and Government Auditing Standards (GAS), all staff working on audits subject to GAS must complete CPE in line with GAS standards, requiring 24 hours directly related to governmental accounting and auditing.

To further increase our technical knowledge, we utilize resources such as the Governmental Audit Quality Center Annual Webcast Update, other relevant seminars, and monthly publications from the AICPA, the GFOA, and other sources. We also attend conferences and seminars sponsored by the GFOA, California Society of Municipal Finance Officers, California State Society of Certified Public Accountants, and the California Special Districts Association.

Assigned personnel
Our goal is to provide you with capable, competent, and personable individuals who possess an extensive background in governmental accounting and auditing and general business practices. This allows us to offer practical solutions and technical support, keeping you at the forefront of governmental accounting and helping you navigate complex issues.

Our engagement team has the managerial and supervisory experience to provide the City with a comprehensive audit of the highest quality while focusing on personal service. The resumes of the key engagement personnel assigned to the audit are presented below. These individuals will be assigned to the engagement for the entire contract period.

Scott W. Manno, CPA, CGMA — Partner, Engagement Partner Scott will serve as the Engagement Partner for your municipal audit. He is licensed to practice as a certified public accountant in the State of California and brings over 29 years of public accounting experience, specializing in serving local governments. As the engagement partner, Scott will be responsible for the overall quality of the engagement, ensuring it is performed efficiently and effectively.

He will directly oversee all engagement staff, assist in planning and performing the engagement, and review all workpapers and required reports prepared during the engagement.

Scott, like all our partners, is a working partner and will be actively involved in all aspects of the engagement, ensuring a high standard of service and attention to detail throughout the process.

Brianna Schultz, CPA - Partner, Concurring Partner
Brianna will be the Concurring Partner. She is licensed to practice as a certified public accountant in the State of California. She has over 15 years of practical, governmental accounting and auditing experience.

As the concurring partner Brianna will work directly with Scott in planning and performing the engagement.

In addition, she will provide technical consultation for the engagement team.

Gardenya Duran, CPA, CGMA — Partner, Quality Control Reviewer Gardenya will be the Quality Control Reviewer. She is licensed to practice as a certified public accountant in the State of California and has over 15 years of practical, governmental accounting and auditing experience. Gardenya will be responsible for the final quality control review of all released opinions and related reports.
!•`r
AICPA
GAQC Member
-16-

City of Beaumont
Proposal for Professional Auditing Services
Partner, supervisory, and staff qualifications and experience (continued) Veronica Hernandez, CPA — Audit Manager
Veronica is an Audit Manager with the firm. She is licensed to practice as a certified public accountant in the State of California. Veronica has over 9 years' experience in providing accounting and auditing services for municipalities, special districts and various not -for-profit organizations. As an audit manager, she will work directly with the audit in -charge and partner, while supervising the engagement team during all phases of the engagement. In conjunction with the audit in -charge, she will also oversee the preparation of any required reports.

Devin Feldhut — Audit Senior
Devin is an Audit Senior with our firm, bringing three years of experience in providing accounting and auditing services to municipalities, special districts, and various not -for-profit organizations.

As an Audit Senior, Devin will work closely with the engagement partner and manager. He will be responsible for planning the audit, supervising the staff assigned to the engagement, and reviewing all workpapers prepared for the engagement. Additionally, he will oversee the preparation of any required reports, ensuring thoroughness and compliance with all standards.

Mr. Terry Shea, CPA — Consultant
Terry is a retired municipal audit partner with the firm providing consulting services. He is licensed to practice as a certified public accountant in the State of California. Terry has over 40 years of public accounting experience and has provided accounting, auditing, and consulting services for municipalities, special districts, water agencies, and various not -for-profit organizations. Terry will assist on an as needed basis with the engagement. In addition, he will provide technical consultation for the engagement team.

Staff level accountants
All our staff accountants working on governmental audits are highly qualified to perform these audits. Prior to the audit season, our staff undergoes rigorous training that covers all aspects of our audit process and programs, ensuring they have a solid foundation before starting fieldwork. Each staff member is encouraged to take on increased responsibilities in engagements they have previously worked on, enabling them to grow and continually enhance their skills and knowledge.

In summary, we emphasize the credentials of the professionals who will be directly responsible for the quality of service you will receive. Additionally, our audit team possesses an important, albeit intangible, attribute: the professionals assigned to your audits have previously worked together as a multi -disciplined team. This ensures a smooth, efficient, and effective audit process. We are committed to allocating the necessary resources to ensure continuity of personnel throughout our relationship with the City. !•` AICPA
GAQC Member
-17-

City of Beaumont
Proposal for Professional Auditing Services
Partner, supervisory, and staff qualifications and experience (continued) Engagement team resumes
Scott W. Manno, CPA, CGMA
Engagement Partner
Professional experience
Mr. Manno began his career with Thomas, Bigbie and Smith in 1996 after serving in the United States Army. He spent six years with the firm primarily working on audits of municipalities, special districts and redevelopment agencies as well as various not -for-profit organizations. He joined Rogers, Anderson, Malody & Scott, LLP in July 2001. Currently, Mr.

Manno serves as a technical reviewer for the GFOA ACFR Award program and he is also on the GFOA Special Review Executive Committee. In addition, he is part of the California State Society of Certified Public Accountants Governmental Accounting which meets periodically to discuss current events, pronouncements, etc.

Education/licenses
Bachelor of Science, Business Administration — California State University, San Bernardino Certified Public Accountant — State of California
Chartered Global Management Accountant — American Institute of Certified Public Accountants Related professional experience
Partial listing of relevant governmental agencies served (*includes enterprise fund accounting):

City of El Cajon*
City of Sierra Madre*
City of Moreno Valley*
City of Live Oak*
City of San Jacinto*
Town of Yucca Valley
City of Santa Paula*
City of Beaumont*
City of Perris*
City of Menifee
City of La Mesa*
City of Beaumont*
City of San Marcos*
City of Exeter*
City of Rolling Hills Est.

City of Santee
City of 29 Palms
City of Loma Linda*
City of Woodlake*
City of Ojai*
Mr. Manno has completed over 232 hours of continuing professional education courses over the past three years of which the following select courses are relevant to this engagement:
• Government Risk Assessment
• Audits of State and Local Governments
• Government Accounting and Auditing Update
• State and Local Government Audit Planning Considerations Professional affiliations
Mr. Manno is a member of the following organizations:
• American Institute of Certified Public Accountants (AICPA) • California Society of Certified Public Accountants (CaICPA) • Association of Government Accountants (AGA)
• Association of Certified Fraud Examiners (ACFE)
• Government Finance Officers Association (GFOA)
• California Special Districts Association (CSDA)
• California Society of Municipal Finance Officers (CSMFO) '•`r
AICPA
-18-

EOM
GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Partner, supervisory, and staff qualifications and experience (continued) Brlanna Schultz, CPA, CGMA
Concurring Partner
Professional experience
Mrs. Schultz began her career with Rogers, Anderson, Malody & Scott, LLP in July 2014, and had over three years' experience with another public accounting firm serving the same industry. Currently, Mrs. Schultz serves as a technical reviewer for the GFOA ACFR Award program. During her time with the firm, she has worked primarily on audits of municipalities, special districts and redevelopment agencies, as well as various non-profit organizations.

Education
Bachelor of Science — California State University, San Bernardino Certified Public Accountant — State of California
Chartered Global Management Accountant — American Institute of Certified Public Accountants Related professional experience
Partial listing of relevant governmental agencies served (*includes enterprise fund accounting):

City of Menifee
City of Glendora*
City of La Verne*
City of La Mesa*
City of Aliso Viejo
City of Rolling Hills Est.

City of Loma Linda*
City of Baldwin Park
City of Claremont*
City of San Bernardino
City of South Pasadena*
City of El Cajon*
City of Chino*
City of Sierra Madre*
City of West Covina*
City of Hawthorne*
Mrs. Schultz obtained the AICPA's Advanced Single Audit Certificate in 2019 and the Intermediate Single Audit Certificate in 2017. She served as the contract Interim Accounting Manager for the City of Glendora in 2016 and the Senior Accountant for the City of Rancho Cucamonga in 2015. Additionally, she is a reviewer for the GFOA ACFR Program.

Continuing professional education
Mrs. Schultz has completed over 160 hours of continuing professional education courses over the past three years of which the following select courses are relevant to this engagement:
♦ Governmental Accounting and Auditing Conference
♦ 2022 Single Audit Update
♦ How to Implement GASBS 87 and Maintain Compliance
Professional Affiliations
Mrs. Schultz is a member of the following organizations:
♦ American Institute of Certified Public Accountants (AICPA) ♦ California Society of Certified Public Accountants (CaICPA) ♦ Government Finance Officers Association (GFOA)
♦ California Society of Municipal Finance Officers (CSMFO) AICPA
OOZE
GAQC Member
-19-

City of Beaumont
Proposal for Professional Auditing Services
Partner, supervisory, and staff qualifications and experience (continued) Gardenya Duran, CPA, CGMA
Quality Control Partner
llcjlIll
Education/licenses
Professional experience
Mrs. Duran joined Rogers, Anderson, Malody & Scott, LLP in June 2010. She works primarily on audits of governmental agencies, small to mid -sized businesses, and nonprofit organizations. Currently, Mrs. Duran serves as a technical reviewer for the GFOA ACFR Award program. Prior to joining our firm, she was an Information Systems Technician in the U.S. Navy for nine years.

Bachelor of Science — California State University, San Bernardino Certified Public Accountant — State of California
Chartered Global Management Accountant — American Institute of Certified Public Accountants Related professional experience
Partial listing of relevant governmental agencies served (*includes enterprise fund accounting):

City of Hawthorne*
City of Poway*
City of Canyon Lake
City of La Mesa*
Continuing professional education
City of El Cajon*
City of San Jacinto*
City of San Marcos*
City of Thousand Oaks*
City of Aliso Viejo
City of San Bernardino
City of Redondo Beach*
City of Claremont*
City of Capitola
City of S. Pasadena
City of West Covina*
Mrs. Duran has completed over 110 hours of continuing professional education courses in the past three years of which the following select courses are relevant to this engagement:
♦ GASB Update
♦ Insights from Lease Implementation
♦ Intermediate Governmental Accounting
♦ Audits of State and Local Governments
Professional affiliations
Mrs. Duran is a member of the following professional organizations:
♦ American Institute of Certified Public Accountants (AICPA) ♦ California Society of Certified Public Accountants (CaICPA) ♦ Government Finance Officers Association (GFOA)
♦ California Society of Municipal Finance Officers (CSMFO) �•` AICPA
-20-

RA
GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Education
Partner, supervisory, and staff qualifications and experience (continued) Veronica Hernandez, CPA
Audit Manager
Professional experience
Ms. Hernandez is an audit manager with the firm. She has over 9 years' experience in providing accounting and auditing services for municipalities, special districts and various nonprofit organizations. As an audit manager, she will work closely with the engagement partner and manager and be responsible for planning the audit, supervising the staff assigned to the engagement, and performing reviews of all workpapers prepared for the engagement.

In addition, she will also be responsible for the preparation of any required reports. Currently, Ms. Hernandez serves as a technical reviewer for the GFOA ACFR Award Program Bachelor of Science — California State University, San Bernardino Certified Public Accountant — State of California
Related professional experience
Partial listing of relevant governmental agencies served (*includes enterprise fund accounting):

City of Santa Paula*
City of San Marcos*
City of El Cajon*
City of Aliso Viejo
City of Claremont*
City of Santee
City of La Verne*
City of West Covina*
City of Moorpark*
City of Hawthorne
Continuing professional education
City of Beaumont*
City of Loma Linda*
City of Redondo Beach*
City of San Jacinto*
City of Poway*
City of Moreno Valley*
City of Fillmore*
Town of Yucca Valley
City of La Mesa*
Ms. Hernandez has completed over 100 hours of continuing professional education courses over the past two years of which the following select courses are relevant to this engagement:
♦ Governmental Accounting and Auditing Update: GASB 87 Leases ♦ Promises and Pitfalls of American Rescue Plan Grants & Others ♦ A 360 view of OPEB Trust
♦ Critical Concepts of Accounting for Capital Assets
♦ Discover GFOA Best Practices
Professional affiliations
Ms. Hernandez is a member of the following professional organizations:
♦ American Institute of Certified Public Accountants (AICPA) ♦ California Society of Certified Public Accountants (CaICPA) ♦ California Society of Municipal Finance Officers (CSMFO) �•` AICPA
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GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Partner, supervisory, and staff qualifications and experience (continued) Devin Feldhut
Audit Senior
Professional experience
Mr. Feldhut joined Rogers, Anderson, Malody & Scott, LLP in 2022, primarily providing accounting and auditing services for municipalities, special districts, and various nonprofit organizations. As an audit senior, he will work closely with the engagement partner and manager and be responsible for planning the audit, supervising the staff assigned to the engagement, and performing reviews of all workpapers prepared for the engagement. In addition, he will also be responsible for the preparation of any required reports.

Education
Bachelor of Arts in Business Administration - California State University, San Bernardino Related professional experience
Partial listing of relevant governmental agencies served (*includes enterprise fund accounting):

City of Goleta
City of Murrieta*
City of Carpinteria*
City of Loma Linda
Continuing professional education
City of Menifee
City of San Marcos*
City of South Pasadena*
City of Los Alamitos*
City of Signal Hill
City of Exeter
City of El Cajon*
City of Woodlake
Mr. Feldhut has completed the following select courses that are relevant to this engagement:
♦ Auditing Notes and Disclosures
♦ Schedule of Expenditures of Federal Awards
♦ GASB 91 Implementation
Professional affiliations
Mr. Feldhut is a member of the following professional organizations:
♦ California Society of Certified Public Accountants (CaICPA) ♦ California Society of Municipal Finance Officers (CSMFO) !�` AICPA
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MIME
GAQC Member

City of Beaumont
Proposal for Professional Auditing Services
Disclosure
We have been the City's auditor for the last five (5) years. We have no current business or personal relationships with any current Beaumont elected official, appointed official, City employee, or family member of any current Beaumont elected official, appointed official, or City employee.

References
Enti : Ci of E/ Ca -on
Scope of work:

Date:

Engagement partner:

Total hours:

Contact person:

City ACFR*/Successor Agency/Public Financing Authority/Single Audit/GANN limit/Measure O
Years ending June 30, 2008 - present
Mr. Scott Manno
Approximately 420 hours each year
Mr. Luca Gonzalez, Finance Manager, (619) 441-1668
Entity: Ci of Thousand Oaks
Scope of work:

Date:

Engagement partner:

Total hours:

Contact person:

Financial Audit/ACFR*/Successor Agency/Single Audit
Years ending June 30, 2018 - present
Mrs. Gardenya Duran
Approximately 420 hours each year
Ms. Elisa Magana, Accounting Manager, (805) 449-2216
nti : Ci of San Marcos
Scope of work:

Date:

Engagement partner:

Total hours:

Contact person:

Financial Audit/ACFR*/Successor Agency/Single Audit
Years ending June 30, 2014 - present
Mr. Terry Shea/Scott Manno
Approximately 400 hours each year
Ms. Donna Apar, Finance Director, (760) 744-1050
Entity: Town of Yucca Valley
Scope of work:

Date:

Engagement partner:

Total hours:

Contact person:

Financial Audit/ACFR*/Successor Agency
Years ending June 30, 2008 - present
Mr. Scott Manno
Approximately 350 hours each year
Mr. Curtis Yakimow, Town Manager (760) 369-7207
nti : Ci of Menifee
Scope of work:

Date:

Engagement partner:

Total hours:

Contact person:

Financial Audit/ACFR*
Years ending June 30, 2014 - present
Mr. Scott Manno
Approximately 350 hours each year
Ms. Ann -Marie Etienne, Finance Manager, (951) 672-6777 Entity: City of San Jacinto
Scope of work:

Date:

Engagement partner:

Total hours:

Contact Person:

AICPA
Financial Audit/ Single Audit/Successor Agency
Years ending June 30, 2011 - present
Mr. Scott Manno/Mrs. Gardenya Duran
Approximately 350 hours each year
Mr. Tom Prill, Deputy City Manager, (951) 487-7330
GAQC Member
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City of Beaumont
Proposal for Professional Auditing Services
References (continued)
Enti
Cit of Im • erial Beach
Scope of work:

Date:

Engagement partner:

Total hours:

Contact person:

Financial Audit
Years ending June 30, 2021 present
Mrs. Gardenya Duran
Approximately 350 hours each year
Mrs. Lily Flyte, Finance Director, (619) 628-1365
Enti
Ci of San Dimas
Scope of work:

Date:

Engagement partner:

Total hours:

Contact person:

Financial Audit
Years ending June 30, 2021 - present
Mrs. Gardenya Duran
Approximately 350 hours each year
Mr. Michael O'Brien Finance Director, (909) 394-6200
Enti :

Ci of Rollin • Hills Estates
Scope of work:

Date:

Engagement partner..

Total hours:

Contact person:

Financial Audit/ACFR
Years ending June 30, 2019 - present
Mr. Scott Manno
Approximately 250 hours each year
Mr. Mike Whitehead, Admin. Services Director, (310) 377-1577, ext.112 Entity:

Scope of Work:

Date:

Engagement partner..

Total hours:

Contact Person:

City of Woodlake
Financial Audit/Single Audit
Years ending June 30, 2018 - present
Mr. Scott Manno
Approximately 225 hours each year
Mr. Ramon Lara, City Administrator, (559) 564-8055
Enti
City of Twentynine Palms
Financial Audit/Successor Agency/Single Audit
Years ending June 30, 2010 - present
Mrs. Brianna Schultz
Approximately 225 hours each year
Mrs. Abigail Hernandez -Conde, Finance Director/Treasurer, (760) 367- 6799, ext. 1013
Scope of work:

Date:

Engagement partner.

Total hours:

Contact person:

Entity:

Scope of work:

Date:

Engagement partner.

Total hours:

Contact person:

City of Loma Linda
Financial Audit/RDA/Successor Agency
Years ending June 30, 2013 - present
Mrs. Brianna Schultz
Approximately 225 hours each year
Ms. Sonia Fabela, Finance Director/Treasurer, (909) 799-2840 Fntity:

Scope of Work:

Date:

Engagement partner.

Total hours:

Contact Person:

City of Exeter
Financial Audit/Transportation Fund Audit
Years ending June 30, 2018 - present
Mr. Scott Manno
Approximately 200 hours each year
Ms. Eekhong Franco, Finance Director, (559) 592-2755
46, AICPA
GAQC Member
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City of Beaumont
Proposal for Professional Auditing Services
Overview and scope of services
Services to be provided
The City desires the auditor to express opinions on the fair presentation of the financial statements for the following: the City of Beaumont accordance with generally accepted accounting principles.

In addition, we shall:
• Prepare the financial statements (ACFR) with management's direct oversight and approval. • Apply certain limited procedures related to Management's Discussion and Analysis and Required Supplementary Information and provide an "in -relation -to" report on the combining and individual fund financial statements and supporting schedules, if applicable. • Provide opinions as to the compliance with the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (OMB Uniform Guidance). RAMS is to provide an "in - relation -to" report on the Schedule of Expenditures of Federal Awards based on the auditing procedures applied during the audit of the financial statements. • Test compliance with Article XIIIB pertaining to the City's appropriation limit and prepare an Agreed - Upon Procedures report to the City Council regarding compliance. • Provide 10 hours of continuing education.
• As needed services.

Our audit(s) will be in accordance with:
• Generally Accepted Auditing Standards as promulgated by the American Institute of Certified Public Accountants, including requirements found in the most recent AICPA audit guide Audits of State and Local Governments.
• Government Auditing Standards issued by the Comptroller of the United States of America. • Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (OMB Uniform Guidance).
• Any other applicable standards for other items outlined in the Scope of Work to be performed and/or reports to be issued.

Reports to be issued:
• A report on the fair presentation of the financial statements in conformity with GAAP. • A 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 (material weaknesses or significant deficiencies).
• A report in compliance with requirements applicable to each major federal program and internal control over compliance in accordance with the Uniform Guidance. • Prepare Management Letter that includes significant and less significant (i.e., reportable and non - reportable) recommendations for improvements to internal control. • We will issue reports to those charged with governance (SAS 114 letters) as required by auditing standards.

RAMS will also perform the following:
• Make an immediate, written notification of all irregularities and illegal acts or indication of illegal acts of which we become aware to the following: City Manager and City Attorney. !•` AICPA
GAQC Member
-25-

R
A
M
S

CERTIFIED PUBLIC ACCOUNTANTS
February 24, 2025
To the City Council
City of Beaumont
The following represents our understanding of the services we will provide the City of Beaumont.

You have requested that we audit the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Beaumont (the entity), as of June 30, 2025, and for the year then ended and the related notes, which collectively comprise the entity's basic financial statements as listed in the table of contents. In addition, we will audit the entity's compliance over major federal award programs for the period ended June 30, 2025. We are pleased to confirm our acceptance and our understanding of this audit engagement by means of this letter.

Our audits will be conducted with the objectives of our expressing an opinion on each opinion unit and an opinion on compliance regarding the entity's major federal award programs. The objectives of our audit of the financial statements are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the United States of America (GAAS) and in accordance with Government Auditing Standards will always detect a material misstatement when it exists. Misstatements, including omissions, can arise from fraud or error and are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

The objectives of our compliance audit are to obtain sufficient appropriate audit evidence to form our opinions and report at the level specified in the governmental audit requirement about whether the entity complied in all material respects with the applicable compliance requirements and identify audit and reporting requirements specified in the governmental audit requirement that are supplementary to GAAS and Government Auditing Standards, if any, and perform procedures to address those requirements.

Accounting principles generally accepted in the United States of America, (U.S. GAAP) as promulgated by the Governmental Accounting Standards Board (GASB) require that supplementary information, such as management's discussion and analysis and budgetary comparison information be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the GASB, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. As part of our engagement, we will apply certain limited procedures to the required supplementary information (RSI) in accordance with auditing standards generally accepted in the United States of America, (U.S. GAAS).

These limited procedures will consist primarily of inquiries of management regarding their methods of measurement and presentation, and comparing the information for consistency with management's responses to our inquiries.
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Tel. 9O9 -889-O871 j www.ramscpa.net j ?'.5 E. Carnegie Dr. Suite 1OO, San Bernardino, CA 924O8

City Council
City of Beaumont
We will not express an opinion or provide any form of assurance on the RSI. The following RSI is required by U.S. GAAP. This RSI will be subjected to certain limited procedures but will not be audited:

1. Management's Discussion and Analysis

2. General and Major Special Revenue Fund Budgetary Comparison Schedules

3. Pension Related Schedules

4. OPEB Related Schedules
Supplementary information other than RSI will accompany the entity's basic financial statements. We will subject the following supplementary information to the auditing procedures applied in our audit of the basic financial statements and perform certain additional procedures, including comparing and reconciling the supplementary information to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and additional procedures in accordance with U.S. GAAS. We intend to provide an opinion on the following supplementary information in relation to the basic financial statements as a whole:

1. Other Major Funds and Non -major Funds Budgetary Comparison Schedules

2. Combining Statements/Schedules
Also, the document we submit to you will include the following other additional information that will not be subjected to the auditing procedures applied in our audit of the basic financial statements:

1. Introductory Section

2. Statistical Section
Schedule of Expenditures of Federal Awards, if applicable We will subject the schedule of expenditures of federal awards to the auditing procedures applied in our audit of the basic financial statements and certain additional procedures, including comparing and reconciling the schedule to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and additional procedures in accordance with auditing standards generally accepted in the United States of America. We intend to provide an opinion on whether the schedule of expenditures of federal awards is presented fairly in all material respects in relation to the financial statements as a whole.

Data Collection Form
Prior to the completion of our engagement, we will complete the sections of the Data Collection Form that are our responsibility. The form will summarize our audit findings, amounts and conclusions. It is management's responsibility to submit a reporting package including financial statements, schedule of expenditure of federal awards, summary schedule of prior audit findings and corrective action plan along with the Data Collection Form to the federal audit clearinghouse. The financial reporting package must be text searchable, unencrypted, and unlocked. Otherwise, the reporting package will not be accepted by the federal audit clearinghouse. We will assist you in the electronic submission and certification. You may request from us copies of our report for you to include with the reporting package submitted to pass -through entities.

The Data Collection Form is required to be submitted within the earlier of 30 days after receipt of our auditors' reports or nine months after the end of the audit period, unless specifically waived by a federal cognizant or oversight agency for audits. Data Collection Forms submitted untimely are one of the factors in assessing programs at a higher risk.
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City Council
City of Beaumont
Audit of the Financial Statements
We will conduct our audits in accordance GAAS, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States of America, and the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). As part of an audit in accordance with these standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of controls.
• Obtain an understanding of the system of internal control in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. However, we will communicate to you in writing concerning any significant deficiencies or material weaknesses in internal control relevant to the audit of the financial statements that we have identified during the audit. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Conclude, based on the audit evidence obtained, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time.

Because of the inherent limitations of an audit, together with the inherent limitations of internal control, an unavoidable risk that some material misstatements may not be detected exists, even though the audit is properly planned and performed in accordance with GAAS and in accordance with Government Auditing Standards. Please note that the determination of abuse is subjective and Government Auditing Standards does not require auditors to detect abuse.

Our responsibility as auditors is limited to the period covered by our audit and does not extend to any other periods.

We will issue a written report upon completion of our audit of the entity's basic financial statements. Our report will be addressed to the City Council. Circumstances may arise in which our report may differ from its expected form and content based on the results of our audit. Depending on the nature of these circumstances, it may be necessary for us to modify our opinions, add an emphasis -of -matter or other - matter paragraph(s) to our auditor's report, or if necessary, withdraw from the engagement. If our opinions on the basic financial statements are other than unmodified, we will discuss the reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable to form or have not formed opinions, we may decline to express opinions or to issue a report as a result of this engagement.

In accordance with the requirements of Government Auditing Standards, we will also issue a written report describing the scope of our testing over internal control over financial reporting and over compliance with laws, regulations, and provisions of grants and contracts, including the results of that testing. However, providing an opinion on internal control and compliance will not be an objective of the audit and, therefore, no such opinion will be expressed.

We also will issue a written report on the Appropriations Limit upon completion of our audit. -3-

City Council
City of Beaumont
Audit of Major Program Compliance
Our audit of the entity's major federal award program(s) compliance will be conducted in accordance with the requirements of the Single Audit Act, as amended; and the Uniform Guidance, and will include tests of accounting records, a determination of major programs in accordance with the Uniform Guidance and other procedures we consider necessary to enable us to express such an opinion on major federal award program compliance and to render the required reports. We cannot provide assurance that an unmodified opinion on compliance will be expressed. Circumstances may arise in which it is necessary for us to modify our opinion or withdraw from the engagement.

The Uniform Guidance requires that we also plan and perform the audit to obtain reasonable assurance about whether material noncompliance with applicable laws and regulations, the provisions of contracts and grant agreements applicable to major federal award programs, and the applicable compliance requirements occurred, whether due to fraud or error, and express an opinion on the entity's compliance based on the audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the entity's compliance with the requirements of the federal programs as a whole.

As part of a compliance audit in accordance with GAAS and Government Auditing Standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks.

Our procedures will consist of determining major federal programs and, performing the applicable procedures described in the U.S. Office of Management and Budget OMB Compliance Supplement for the types of compliance requirements that could have a direct and material effect on each of the entity's major programs, and performing such other procedures as we consider necessary in the circumstances. The purpose of those procedures will be to express an opinion on the entity's compliance with requirements applicable to each of its major programs in our report on compliance issued pursuant to the Uniform Guidance.

Also, as required by the Uniform Guidance, we will obtain an understanding of the entity's internal control over compliance relevant to the audit in order to design and 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 compliance requirements applicable to each of the entity's major federal award programs. Our tests will be less in scope than would be necessary to render an opinion on these controls and, accordingly, no opinion will be expressed in our report. However, we will communicate to you, regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we have identified during the audit.

We will issue a report on compliance that will include an opinion or disclaimer of opinion regarding the entity's major federal award programs, and a report on internal controls over compliance that will report any significant deficiencies and material weaknesses identified; however, such report will not express an opinion on internal control.
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City Council
City of Beaumont
Management's Responsibilities
Our audit will be conducted on the basis that management and, when appropriate, those charged with governance acknowledge and understand that they have responsibility:
• For the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; • For the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error;
• For identifying, in its accounts, all federal awards received and expended during the period and the federal programs under which they were received;
• For maintaining records that adequately identify the source and application of funds for federally funded activities;
• For preparing the schedule of expenditures of federal awards (including notes and noncash assistance received) in accordance with the Uniform Guidance; • For designing, implementing, and maintaining effective internal control over federal awards that provides reasonable assurance that the entity is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards; • For identifying and ensuring that the entity complies with federal laws, statutes, regulations, rules, provisions of contracts or grant agreements, and the terms and conditions of federal award programs, and implementing systems designed to achieve compliance with applicable federal statutes, regulations, and the terms and conditions of federal award programs; • For disclosing accurately, currently, and completely the financial results of each federal award in accordance with the requirements of the award;
• For identifying and providing report copies of previous audits, attestation engagements, or other studies that directly relate to the objectives of the audit, including whether related recommendations have been implemented;
• For taking prompt action when instances of noncompliance are identified; • For addressing the findings and recommendations of auditors, for establishing and maintaining a process to track the status of such findings and recommendations and taking corrective action on reported audit findings from prior periods and preparing a summary schedule of prior audit findings; • For following up and taking corrective action on current year audit findings and preparing a corrective action plan for such findings;
• For submitting the reporting package and data collection form to the appropriate parties; • For making the auditor aware of any significant contractor relationships where the contractor is responsible for program compliance;
• To provide us with:

Access to all information of which management is aware that is relevant to the preparation and fair presentation of the financial statements including the disclosures, and relevant to federal award programs, such as records, documentation, and other matters; Additional information that we may request from management for the purpose of the audit; Unrestricted access to persons within the entity and others from whom we determine it necessary to obtain audit evidence;
A written acknowledgement of all the documents that management expects to issue that will be included in the annual report and the planned timing and method of issuance of that annual report; and
A final version of the annual report (including all the documents that, together, comprise the annual report) in a timely manner prior to the date of the auditor's report. • For adjusting the financial statements to correct material misstatements and confirming to us in the management representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the current year period(s) under audit are immaterial, both individually and in the aggregate, to the financial statements as a whole; -5-

City Council
City of Beaumont
• For identifying and ensuring that the entity complies with the laws and regulations applicable to its activities;
• For acceptance of nonattest services, including identifying the proper party to oversee nonattest work;
• For maintaining adequate records, selecting and applying accounting principles, and safeguarding assets;
• For informing us of any known or suspected fraud affecting the entity involving management, employees with significant role in internal control and others where fraud could have a material effect on compliance;
• For the accuracy and completeness of all information provided; • For taking reasonable measures to safeguard protected personally identifiable and other sensitive information; and
• For confirming your understanding of your responsibilities as defined in this letter to us in your management representation letter.

With regard to the schedule of expenditures of federal awards referred to above, you acknowledge and understand your responsibility (a) for the preparation of the schedule of expenditures of federal awards in accordance with the Uniform Guidance, (b) to provide us with the appropriate written representations regarding the schedule of expenditures of federal awards, (c) to include our report on the schedule of expenditures of federal awards in any document that contains the schedule of expenditures of federal awards and that indicates that we have reported on such schedule, and (d) to present the schedule of expenditures of federal awards with the audited financial statements, or if the schedule will not be presented with the audited financial statements, to make the audited financial statements readily available to the intended users of the schedule of expenditures of federal awards no later than the date of issuance by you of the schedule and our report thereon.

As part of our audit process, we will request from management and, when appropriate, those charged with governance, written confirmation concerning representations made to us in connection with the audit.

We understand that your employees will prepare all confirmations we request and will locate any documents or invoices selected by us for testing.

If you intend to publish or otherwise reproduce the financial statements and make reference to our firm, you agree to provide us with printers' proofs or masters for our review and approval before printing. You also agree to provide us with a copy of the final reproduced material for our approval before it is distributed.

Nonattest Services
With respect to any nonattest services we perform, we will not assume management responsibilities on behalf of the entity. However, we will provide advice and recommendations to assist management of the entity in performing its responsibilities.

The following are nonattest services that may be requested by the entity, which can include, but is not limited to the following:
• To propose adjusting or correcting journal entries to be reviewed and approved by management,
• To assist management with drafting financial statements based on the entity's trial balances, • Other agreed upon procedures,
• To assist management with completing the Data Collection Form and submitting to the Federal Audit Clearinghouse, if applicable, and
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City Council
City of Beaumont
The entity's management is responsible for (a) making all management decisions and performing all management functions; (b) assigning a competent individual to oversee the services; (c) evaluating the adequacy of the services performed; (d) evaluating and accepting responsibility for the results of the services performed; and (e) designing, implementing, and maintaining the system of internal control, including the process used to monitoring the system of internal control.

Our responsibilities and limitations of the nonattest services are as follows:
• We will perform the services in accordance with applicable professional standards, and • The nonattest services are limited to the services previously outlined. Our firm, in its sole professional judgment, reserves the right to refuse to do any procedure or take any action that could be construed as making management decisions or assuming management responsibilities, including determining account coding and approving journal entries.

Other
We understand that your employees will prepare all confirmations we request and will locate any documents or support for any other transactions we select for testing.

If you intend to publish or otherwise reproduce the basic financial statements and make reference to our firm, you agree to provide us with printers' proofs or masters for our review and approval before printing.

You also agree to provide us with a copy of the final reproduced material for our approval before it is distributed.

Regarding the electronic dissemination of audited financial statements, including financial statements published electronically on your Internet website, you understand that electronic sites are a means to distribute information and, therefore, we are not required to read the information contained in these sites or to consider the consistency of other information in the electronic site with the original document.

Professional standards prohibit us from being the sole host and/or the sole storage for your financial and non -financial data. As such, it is your responsibility to maintain your original data and records and we cannot be responsible to maintain such original information. By signing this engagement letter, you affirm that you have all the data and records required to make your books and records complete.

In addition, we will perform an agreed upon procedures engagement related to the entity's Appropriations Limit. The procedures have been agreed to by the entity and the League of California Cities (as presented in the publication entitled Agreed -upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIIIB of the California Constitution) and will be performed solely to assist the entity in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. The entity's management will be responsible for the Appropriations Limit worksheet.

Provisions of Engagement Administration, Timing and Fees During the course of the engagement, we may communicate with you or your personnel via fax or e-mail, and you should be aware that communication in those mediums contains a risk of misdirected or intercepted communications.
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City Council
City of Beaumont
Our firm may transmit confidential information that you provided us to third parties in order to facilitate delivering our services to you. For example, such transmissions might include, but not be limited to exchanging documents via our secure portals. We have obtained confidentiality agreements with all our service providers to maintain the confidentiality of your information and we will take reasonable precautions to determine that they have the appropriate procedures in place to prevent the unauthorized release of confidential information to others. We will remain responsible for the work provided by any third -party service providers used under this agreement. By your signature below, you consent to having confidential information transmitted to entities outside the firm. Please feel free to inquire if you would like additional information regarding the transmission of confidential information to entities outside the firm.

Scott Manno, CPA, CGMA is the engagement partner for the audit services specified in this letter. His responsibilities include supervising our firm's services performed as part of this engagement and signing or authorizing another qualified firm representative to sign the audit report.

Our fee for the financial statement audit will be $58,650, and for the single audit will be $6,270 for the first major program (or examination if allowed per U.S. Department of Treasury exemption for Coronavirus State and Local Fiscal Recovery Funds) and $4,250 for each additional major program. We will notify you immediately of any circumstances we encounter that could significantly affect this initial fee estimate.

Whenever possible, we will attempt to use the entity's personnel to assist in the preparation of schedules and analyses of accounts. This effort could substantially reduce our time requirements and facilitate the timely conclusion of the audit. Further, we will be available during the year to consult with you on financial management and accounting matters of a routine nature.

Our fee for this engagement assumes the following: the entity will be adequately prepared for the audit and the entity's financial operations and working trial balance will be consistent from year to year. If, after we receive the working trial balances, we notice there are excessive new accounts over the prior year, or if there are excessive subsequent journal entries, or prepared by client workpapers that do not agree to the working trial balances, or there are new funds/functions within the entity, or other changes that necessitate a significant amount of time to address, we will need to come to an agreed -upon change order to address any possible additional costs incurred by the firm. If the need for additional work does come to our attention, we will immediately notify entity staff. If you choose to have us perform the additional work, then such work will be performed at the same hourly rates applicable to the audit work and set forth in an addendum to the contract between the entity and our firm.

Management is also responsible for the implementation of new standards issued by the Governmental Accounting Standards Board. We will provide reasonable assistance in the preparation of the items noted herein, but any significant time needed to complete the financial statements will be billed separately.

Our proposed fee is also dependent on all items requested being completed in the format requested or in a mutually agreed -upon format and uploaded to the Engagement Organizer hosted by our firm in a timely manner in accordance with the agree -upon audit timeline.

Government Auditing Standards require that we document an assessment of the skills, knowledge, and experience of management, should we participate in any form of preparation of the basic financial statements and related schedules or disclosures as these actions are deemed a non -audit service.

During the course of the audit we may observe opportunities for economy in, or improved controls over, your operations. We will bring such matters to the attention of the appropriate level of management, either orally or in writing.

You agree to inform us of facts that may affect the basic financial statements of which you may become aware during the period from the date of the auditor's report to the date the financial statements are issued. -8-

City Council
City of Beaumont
We agree to retain our audit documentation or work papers for a period of at least seven years from the date of our report. Upon expiration of this period, we will be free to destroy our records related to the engagement. However, we do not keep original client documents, so we will return those as they are used during each engagement. It is management's responsibility to retain and protect the records for possible future use, including examination by regulators and federal agencies.

We require that a copy of the final trial balance (i.e., a trial balance ready to audit) be delivered to us at least 10 business days prior to the start of the audit, otherwise we may reschedule the start of the audit.

At the conclusion of our audit engagement, we will communicate to the City Council the following significant findings from the audit:
• Our view about the qualitative aspects of the entity's significant accounting practices; • Significant difficulties, if any, encountered during the audit; • Uncorrected misstatements, other than those we believe are trivial, if any; • Disagreements with management, if any;
• Other findings or issues, if any, arising from the audit that are, in our professional judgment, significant and relevant to those charged with governance regarding their oversight of the financial reporting process;
• Material, corrected misstatements that were brought to the attention of management as a result of our audit procedures;
• Representations we requested from management;
• Management's consultations with other accountants, if any; and • Significant issues, if any, arising from the audit that were discussed, or the subject of correspondence, with management.

The audit documentation for this engagement is the property of our firm and constitutes confidential information. However, we may be requested to make certain audit documentation available to regulator's, federal agencies, and to the U.S. Government Accountability Office pursuant to authority given to it by law or regulation, or to peer reviewers. If requested, access to such audit documentation will be provided under the supervision of our firm's personnel. Furthermore, upon request, we may provide copies of selected audit documentation to the regulators. The regulator's may intend, or decide, to distribute the copies of information contained therein to others, including other governmental agencies.

In accordance with the requirements of Government Auditing Standards, we have attached a copy of our latest external peer review report of our firm for your consideration and files.

Non -solicit Clause
We value each and every one of our clients as well as each and every one of our employees. We have spent a great deal of time and resources to locate, train and retain our employees. We respectfully request that you do not solicit our employees to work for you. If you do hire one of our employees within 2 years of when they last worked for our firm, we will be due a finder's fee equal to 50% of the annual salary they were earning as of their last day of employment. Payment will be due within 10 days of your receipt of our invoice.

To ensure that our independence is not impaired under the AICPA Code of Professional Conduct, you agree to inform the engagement partner before entering into any substantive employment discussions with any of our personnel.
-9-

City Council
City of Beaumont
International Alliance Membership
Our firm is an independent member firm of Alliott Global Alliance, which is an international alliance of independent accounting, law, and specialist firms. Alliott Global Alliance and its member firms are legally distinct and separate entities. These entities are not and shall not be construed to be in the relationship of a parent firm, subsidiary, partner, joint venture, agent, or a network. No Alliott Global Alliance member firm has any authority (actual, apparent, implied, or otherwise) to obligate or bind Alliott Global Alliance or any other Alliott Global Alliance member firm in any manner whatsoever. Equally, neither Alliott Global Alliance nor any other member firm has any authority to obligate or bind us or any other member firm. All Alliott Global Alliance members are independent firms, and as such, they each render their services entirely on their own account (including benefit and risk). In connection with the engagement contemplated by this letter or any other services from time to time provided by us, we may seek advice from or may recommend the retention of an Alliott Global Alliance member firm. Alliott Global Alliance and its other member firms shall have no liability for advice rendered by us or such consulted or retained Alliott Global Alliance member firm. Nor shall we have liability for advice rendered by any of the other Alliott Global Alliance member firms, even if consulted or recommended to you by our firm.

Information Exchange (Engagement Organizer)
Our firm does not host any of the entity's information. The Engagement Organizer is used solely as a method of transferring data and is not intended for the storage of the entity's information. Upon conclusion of the engagement, we will provide the entity with a copy of the deliverables and relevant data from the Engagement Organizer relating to the engagement in a mutually agreed -upon format. If the engagement occurs over multiple years, this exchange will occur at least annually. The data and other content will either be removed from the Engagement Organizer or become unavailable to the entity within a reasonable period of time. If the engagement is multi -year, the completion of the engagement occurs each year when the deliverables are completed for that year.

Please electronically sign this letter to indicate your acknowledgement of, and agreement with, the arrangements for our audit of the financial statements, including our respective responsibilities. Please download a copy of the letter for your records once you have completed the signature process.

As a reminder, we will not initiate services until we receive the signed letter.

We appreciate the opportunity to be your financial statement auditors and look forward to working with you and your staff.

Respectfully,
Flo mss, #s 4e-tzou., !►�l �i`, LLP.

RESPONSE:

This letter correctly sets forth our understanding.

Acknowledged and agreed on behalf of the City of Beaumont by:

Name:

Title: _
Date:
-10-

Grant Bennett Associates

A PROFESSIONAL CORPORATION
Report on the Firm's System of Quality Control
August 26, 2024
To Rogers, Anderson, Malody & Scott, LLP and the Peer Review Committee of the California Society of CPAs:

Proud Member of
AlliottGlobalAlliance"
We have reviewed the system of quality control for the accounting and auditing practice of Rogers, Anderson, Malody & Scott, LLP (the firm) in effect for the year ended November 30, 2023. 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 (Standards).

A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as described in the Standards may be found at www.aicpa.org/prsummary . The summary also includes an explanation of how engagements identified as not performed or reported in conformity with applicable professional standards, if any, are evaluated by a peer reviewer to determine a peer review rating.

Firm's Responsibility
The firm is responsible for designing and complying with a system of quality control to provide the firm with reasonable assurance of performing and reporting in conformity with the requirements of applicable professional standards in all material respects. The firm is also responsible for evaluating actions to promptly remediate engagements deemed as not performed or reported on in conformity with the requirements of professional standards, when appropriate, and for remediating weaknesses in its system of quality control, if any.

Peer Reviewer's Responsibility
Our responsibility is to express an opinion on the design of and compliance with the firm's system of quality control based on our review.

Required Selections and Considerations
Engagements selected for review included engagements performed under Government Auditing Standards, including a compliance audit under the Single Audit Act and an audit of an employee benefit plan.

As a part of our peer review, we considered reviews by regulatory entities as communicated by the firm, if applicable, in determining the nature and extent of our procedures.

Opinion
In our opinion, the system of quality control for the accounting and auditing practice of Rogers, Anderson, Malody & Scott, LLP in effect for the year ended November 30, 2023, 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 deficiency(ies) or fail. Rogers, Anderson, Malody & Scott, LLP has received a peer review rating of pass.

GRANT BENNETT ASSOCIATES

A PROFESSIONAL CORPORATION
Certified Public Accountants
10850 Gold Center Drive, Suite 260
Rancho Cordova, CA 95670
916/922-5109 FAX 916/641-5200
Princeville, HI
888/763-7323
Together as One. Grant Bennett Associates is a Member of the Alliott Global Alliance of independent professional firms.

www.gbacpa.com

R
A
M
S

CERTIFIED PUBLIC ACCOUNTANTS
February 24, 2025
To the City Council
City of Beaumont
This letter is provided in connection with our engagement to audit the financial statements and to audit compliance over major federal award programs of the City of Beaumont (the entity) as of and for the year ended June 30, 2025. Professional standards require that we communicate with you certain items including our responsibilities with regard to the financial statement audit, the compliance audit, and the planned scope and timing of our audits.

Our Responsibilities
As stated in our engagement letter dated February 24, 2025, we are responsible for conducting our audits in accordance with auditing standards generally accepted in the United States of America (U.S. GAAS), Government Auditing Standards of the Comptroller General of the United States of America, and the requirements of the Single Audit Act, as amended; and the provisions of the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), for the purpose of forming and expressing opinions on the financial statements, and on major federal award program compliance. Our audit does not relieve you or management of your respective responsibilities.

Our responsibility as it relates to the schedule of expenditures of federal awards is to evaluate its presentation for the purpose of forming and expressing an opinion as to whether it is presented fairly in all material respects in relation to the financial statements as a whole.

Our responsibility relating to other information, whether financial or nonfinancial information (other than financial statements and the auditor's report thereon), included in the entity's annual report includes only the information identified in our report. We have no responsibility for determining whether the introductory or statistical information is properly stated. We require that we receive the final version of the annual report (including all the documents that, together, comprise the annual report) in a timely manner prior to the date of the auditor's report, or if that is not possible, as soon as practicable and, in any case, prior to the entity's issuance of such information.

Planned Scope of the Audit
Our audits will include examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. Our audit procedures will also include determining major federal programs and performing the applicable procedures described in the U.S. Office of Management and Budget OMB Compliance Supplement for the types of compliance requirements that could have a direct and material effect on each of the entity's major programs.

Because of the inherent limitations of an audit, together with the inherent limitations of internal control, an unavoidable risk that some material misstatements or material noncompliance may not be detected exists, even though the audit is properly planned and performed in accordance with U.S. GAAS, Government Auditing Standards of the Comptroller General of the United States of America, the requirements of the Single Audit Act, as amended; and the provisions of the Uniform Guidance. -1-
Tel. 909-889-0871 I www.ramscpa.net j ?'.5 E.Carnegie Dr. Suite 100, San Bernardino, CA 92408

City Council
City of Beaumont
Our audits will include obtaining an understanding of the entity and its environment, including its internal control, sufficient to assess the risks of material misstatement of the financial statements, the risk of material noncompliance in the major federal award programs, and as a basis for designing the nature, timing, and extent of further audit procedures. However, we will communicate to you at the conclusion of our audit, significant matters that are relevant to your responsibilities in overseeing the financial reporting process, including any material weaknesses, significant deficiencies, and violation of laws or regulations that come to our attention. We will also communicate to you:
• Any violation of laws or regulations that come to our attention; • Our views relating to qualitative aspects of the entity's significant accounting practices, including accounting policies, accounting estimates, and financial statement disclosures; • Significant difficulties, if any, encountered during the audit; • Disagreements with management, if any, encountered during the audit; • Significant unusual transactions, if any;
• The potential effects of uncorrected misstatements on future -period financial statements; and • Other significant matters that are relevant to your responsibilities in overseeing the financial reporting process.

Our responsibility as auditors is, of course, limited to the period covered by our audit and does not extend to any other periods.

Certain significant risks are presumptive in most audits and merit attention by the auditors due to the direct impact over financial reporting and internal control processes. Although we are currently in the planning stage of our audit, the following presumptive significant risks are applicable to our audit and require special audit considerations:
• Management's override of internal controls over financial reporting: Auditors must consider and respond to the risk of management override of internal controls, which is the intervention by management in handling financial information and making decisions contrary to internal control policy.
• Revenue recognition: Auditors must consider and respond to the risk of management subversion of generally accepted accounting principles in determining how and when revenue is recognized. • Significant estimates: Auditors must consider and respond to the risk of management bias in significant accounting estimates. Financial statement areas containing significant estimates can include, but are not limited to, net pension liability and related deferred inflows/outflows, net OPEB liability and related deferred inflows/outflows, leases receivable and related deferred inflows of resources, lease and subscription liabilities, right -to -use assets, depreciation and amortization expenses, and fair value measurements.

We have yet to determine a start date for the audit, but would expect to begin the audit in April/May 2025.

Scott Manno, CPA, CGMA is the engagement partner and is responsible for supervising the engagement and signing the report or authorizing another individual to sign it.

This information is intended solely for the information and use of the City Council and management of the entity and is not intended to be and should not be used by anyone other than these specified parties.

Respectfully,
Bloc eA.e, 1icaot 2 ,�c')fi, C.C.P.
-2-

ROGEAND-01

NGARCIA
,acoRO CERTIFICATE OF LIABILITY INSURANCE
��

DATE (MM/DD/YYYY)
12/31/2024
/2024
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(s).

PRODUCER
Orion Business Insurance and Risk Management Services, Inc. 1250 Corona Pointe Court, Suite 302
Corona, CA 92879
CONTACT Noemi Garcia
NAME:

HONNo, Ext):(626) 773-8488 Fax 951 737-5083
) (A/C,No):( )
E-MAILESS: [email protected]

INSURER(S) AFFORDING COVERAGE
NAIC #
INSURER A: Hartford Underwriters Ins Co
30104

INSURED
Rogers, Anderson, Malody & Scott LLP
735 E. Carnegie Drive
Suite 100
San Bernardino, CA 92408
INSURER B: Sequoia Insurance Company
22985
INSURER C: Travelers Cas&Surety Co of Am
31194
INSURER D :

INSURERE:

INSURER F :

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 POLIC ES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

INSR
LTR

TYPE OF INSURANCE
ADDL
INSD
SUBR
WVD

POLICY NUMBER

POLICY EFF
(MM/DD/YYYY)

POLICY EXP
(MM/DD/YYYY)
LIMITS
A
X

COMMERCIAL GENERAL LIABILITY
X
72SBABH1D9C
1/1/2025
1/1/2026

EACH OCCURRENCE
$ 1,000,000

CLAIMS -MADE
X
OCCUR

PP REMIS (
REMI EESTOEaRENTEDoccurrence)
$ 1,000,000

MED EXP (Any one person)
$ 10,000

PERSONAL & ADV INJURY
$ 1,000,000
GEN'L

AGGREGATE
POLICY
OTHER:

X

LIMIT APPLIES

JERCOT-
PER:

LOC

GENERAL AGGREGATE
$ 2,000,000

PRODUCTS - COMP/OP AGG
$ 2,000,000
$
A

AUTOMOBILE
X

LIABILITY

ANY AUTO
OWNED

AUTOS ONLY

AUTOS ONLY
x

SCHEDULED
AUTOS

NON -OWNED UU
72SBABH1D9C

1/1/2025
1/1/2026

COMBINED SINGLE LIMIT
(Ea accident)
1,000,000
$
BODILY INJURY (Per person)
$
BODILY INJURY (Per accident)
$

PROPERTY DAMAGE
(Per accident
$
$
A
X

UMBRELLA LIAB

EXCESS LIAB
X
OCCUR

CLAIMS -MADE
72SBABH1D9C
1/1/2025
1/1/2026

EACH OCCURRENCE
$ 3,000,000

AGGREGATE
$ 3,000,000
DED
X
RETENT ON $ 10,000
$
B

WORKERS COMPENSATION

AND EMPLOYERS' LIABILITY

ANY PROPRIETOR/PARTNER/EXECUTIVE
OFFICER/MEMBER EXCLUDED?
(Mandatory in NH)
If yes, describe under
DESCRIPTION OF OPERATIONS below
Y/ N
N / A
QWC1419242
1/1/2025
1/1/2026
OTH-

X STATUTE I ER
E.L. EACH ACCIDENT
1,000,000
$
E.L. DISEASE - EA EMPLOYEE
$ 1,000,000
E.L. DISEASE - POLICY LIMIT
1,000,000
$
C
Errors & Omissions
106850737
1/1/2025
1/1/2026
See Below
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required Professional Liability $4,000,000 Per Claim;$4,000,000 Aggregate; $35,000 Per claim Deductible;Retoactive Date: N/A The City of Beaumont, its elected and appointed officers, employees, agents and volunteers are listed as additional insured as required by written contract with respect to General Liability. Notice of cancellation will be delivered in accordance with the policy provisions.

CERTIFICATE HOLDER

CANCELLATION
City of Beaumont
550 E. 6th Street
Beaumont, CA 92223

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE

THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.

AUTHORIZED REPRESENTATIVE
Vleervu, condo)
ACORD 25 (2016/03)
P�ae 711 of 789 © 1988-2015 ACORD CORPORATION. All rights reserved.

The ACORD name and o are reglstere marks of ACORD

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

THE

HARTFORD

BLANKET ADDITIONAL INSURED BY CONTRACT
This endorsement modifies insurance provided under the following:

BUSINESS LIABILITY COVERAGE FORM
Except as otherwise stated in this endorsement, the terms and conditions of the Policy apply.

A. The following is added to Section C. WHO IS AN INSURED:

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 contract or written agreement, or when required by a written permit issued by a state or governmental agency or subdivision or political subdivision that such person or organization be added as an additional insured on your Coverage Part, provided the injury or damage occurs subsequent to the execution of the contract or agreement, or the issuance of the permit.

A person or organization is an additional insured under this provision only for that period of time required by the contract, agreement or permit.

However, no such person or organization is an additional insured under this provision if such person or organization is included as an additional insured by any other endorsement issued by us and made a part of this Coverage Part.

The insurance afforded to such additional insured will not be broader than that which you are required by the contract, agreement, or permit to provide for such additional insured.

The insurance afforded to such additional insured only applies to the extent permitted by law.

The limits of insurance that apply to additional insureds are described in Section D. LIABILITY AND MEDICAL EXPENSES 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.
a. Vendors
Any person(s) or organization(s) (referred to below as vendor), but only with respect to "bodily injury" or "property damage" arising out of "your products" which are distributed or sold in the regular course of the vendor's business and only if this Coverage Part provides coverage for "bodily injury" or "property damage" included within the "products -completed operations hazard". (1) The insurance afforded to the vendor is subject to the following additional exclusions:

This insurance does not apply to:
(a) "Bodily injury" or "property damage" for which the vendor 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 that the vendor would have in the absence of the contract or agreement; (b) Any express warranty unauthorized by you;
(c) Any physical or chemical change in the product made intentionally by the vendor; (d) Repackaging, except when unpacked solely for the purpose of inspection, demonstration, testing, or the substitution of parts under instructions from the manufacturer, and then repackaged in the original container;
(e) Any failure to make such inspections, adjustments, tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products;
(f) Demonstration, installation, servicing or repair operations, except such operations performed at the vendor's premises in connection with the sale of the product; Form SL 30 32 06 21 Page 1 of 3
© 2021, The Hartford
(May include copyrighted material EEIgtb7ai2 e7ra9es Office, Inc., with its permission)

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

THE

HARTFORD
(g) Products which, after distribution or sale by you, have been labeled or relabeled or used as a container, part or ingredient of any other thing or substance by or for the vendor; or (h) "Bodily injury" or "property damage" arising out of the sole negligence of the vendor for its own acts or omissions or those of its employees or anyone else acting on its behalf. However, this exclusion does not apply to:
(i) The exceptions contained in Paragraphs (d) or (f); or (ii) Such inspections, adjustments, tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products.
(2) This insurance does not apply to any insured person or organization from whom you have acquired such products, or any ingredient, part or container, entering into, accompanying or containing such products. b. Lessors Of Equipment
(1) Any person or organization from whom you lease equipment; but only with respect to their 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 or organization. (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;
(b) In the performance of your ongoing operations performed by you or on your behalf; or (c) In connection with "your work" and included within the "products -completed operations hazard", but only if:
(i) The written contract, written agreement or permit 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, 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, including:
(i) 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 (ii) Supervisory, surveying, inspection, architectural or engineering activities.

This exclusion applies even if the claims allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by an insured, if the "bodily injury", "property Form SL 30 32 06 21 Page 2 of 3
© 2021, The Hartford
(May include copyrighted material EitigaJ7ihaeatirat9es Office, Inc., with its permission)

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

THE

HARTFORD
damage", or "personal and advertising injury" arises out of the rendering of or the failure to render any professional service.
e. State Or Governmental Agency Or Subdivision Or Political Subdivision Issuing Permit (1) Any state or governmental agency or subdivision or political subdivision, but only with respect to operations performed by you or on your behalf for which the state or governmental agency or subdivision 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 federal government, 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 in one of the categories or classes listed above in 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 performed by you or on your behalf; (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, written agreement or permit 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, 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 architectural, engineering or surveying services, 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, surveying, inspection, architectural or engineering activities.

This exclusion applies even if the claims allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by an insured, if the "bodily injury", "property damage", or "personal and advertising injury" arises out of the rendering of or the failure to render any professional service described in Paragraphs f.(2)(a) or f.(2)(b) above.

Form SL 30 32 06 21 Page 3 of 3
© 2021, The Hartford
(May include copyrighted material EiEIgtgai 4ele7ra9es Office, Inc., with its permission)

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

THE

HARTFORD

NOTICE OF CANCELLATION TO CERTIFICATE HOLDER(S)
This policy is subject to the following additional Conditions:

A. If this policy is cancelled by the Company, other than for non-payment of premium, notice of such cancellation will be provided at least thirty (30) days in advance of the cancellation effective date to the certificate holder(s) with mailing addresses on file with the agent of record or the Company.

B. If this policy is cancelled by the company for non-payment of premium, or by the insured, notice of such cancellation will be provided within ten (10) days of the cancellation effective date to the certificate holder(s) with mailing addresses on file with the agent of record or the Company.

If notice is mailed, proof of mailing to the last known mailing address of the certificate holder(s) on file with the agent of record or the Company will be sufficient proof of notice.

Any notification rights provided by this endorsement apply only to active certificate holder(s) who were issued a certificate of insurance applicable to this policy's term.

Failure to provide such notice to the certificate holder(s) will not amend or extend the date the cancellation becomes effective, nor will it negate cancellation of the policy. Failure to send notice shall impose no liability of any kind upon the Company or its agents or representatives.

Form SL 90 13 10 18 Page 1 of 1
© 2018, The Hartford
(May include copyrighted material Dam 7ahb eT 9es Office, Inc., with its permission)

BEAUMONT

O R N I A -
Staff Report
TO: City Council
FROM: Chris Ramos, Police Captain
DATE March 18, 2025
SUBJECT: Request To Approve Service Agreement with Enterprise Fleet Management
Description To improve fleet acquisition and outfitting efficiency by approving the utilization of Enterprise Fleet Management's services.

Background and Analysis:

The Police Department maintains a fleet of 66 vehicles. In the 2023/2024 fiscal year, the department budgeted the purchase of 12 new vehicles, which were ordered in July 2023 and received in November. Eight of these vehicles sat unused for over a year while waiting for emergency equipment outfitting. Four of those vehicles purchased in July 2023 are still waiting for outfitting. The department has purchased six vehicles for the current fiscal year 2024/2025, with similar outfitting delays anticipated.

These prolonged delays reduce the department's efficiency by increasing the demand on the existing fleet while waiting for new vehicles, leading to excessive wear and tear.

Additionally, vehicles that remain idle for over a year and a half often require maintenance before they can be put into service, including new batteries and the replacement of deteriorating tires.

This issue is not unique to Beaumont. Due to the nationwide demand, other small law enforcement agencies also face extended delays, with one recently experiencing a nearly two-year wait for vehicle outfitting. Unlike larger organizations, smaller agencies often lack the purchasing power to secure priority services from vendors.

Enterprise, one of the country's largest vehicle purchasers and rental car companies, offers a fleet management service that could help mitigate these delays. With its purchasing volume, Enterprise Fleet Management can provide discounted prices to its customers and coordinate emergency equipment outfitting. They typically receive negotiated priority from local outfitters, with vehicle outfitting completed within 60 to 90 days. On average, vehicles ordered through Enterprise are delivered fully outfitted within six months.

Enterprise has reviewed the Beaumont Police Department's patrol vehicle specifications. Based on current rates (excluding potential discounts applied at the time of purchase), purchasing vehicles through Enterprise's fleet management program could save the City approximately $4,691 per vehicle. This includes the cost of the vehicle, emergency equipment, outfitting, and licensing (does not include computer and radio), with no payment required until the vehicle is fully delivered and ready for deployment. This program would simplify the procurement process by consolidating multiple vendor payments into a single transaction. Both the Finance Department and the Vehicle Maintenance Supervisor support this proposal due to its efficiency and streamlined process.

The vehicles are acquired through a lease plan, a modified financing structure, with terms ranging from one to five years, depending on departmental needs. The City owns the vehicles at the end of the lease term. Enterprise evaluates fleet age, mileage, maintenance records, and resale value semi-annually to recommend replacements.

Enterprise Fleet Management also handles all aspects of the vehicle retirement process, including the removal of equipment and the sale of the vehicle. Profits from the vehicle sales, minus a $150 service fee, will be applied to the purchase of future replacement vehicles.

Other law enforcement agencies were contacted with various years of service with Enterprise. These agencies included Santa Ana (25 years), Baldwin Park (6 years), Banning (5 years), Irvine, and Oceanside (both one year). All agencies reported positive reviews and recommended the Enterprise Fleet Management program. Four of these agencies use the "Equity Lease" option, where 50% of the vehicles are paid at the time of delivery, and the rest is paid over the course of the lease until recommended retirement. These agencies reported greater savings because the retirement recommendations consider the resale value to be rolled over into the next purchase.

Under the Equity Lease option, where 50% of the vehicle's cost is paid at the time of delivery, the finance charges would be as follows:

Lease Amount Interest Rate Term Total Interest
$37,180 6.5% 1 year $2,416
$37,180 6.5% 2 years $4,833
$37,180 6.5% 3 years $7,250
Enterprise holds a cooperative contract with Sourcewell (Contract No. 030122), which allows the City to take advantage of discounted rates through membership. The Enterprise Fleet Management program is an open-ended (equity) lease structure, and

the City may cancel the service at any time, provided that any outstanding lease balances are paid in full. There are no mileage limits or penalties for buying out of the lease early. The City Attorney has reviewed and approved the service agreement.

Another advantage of partnering with Enterprise Fleet Management is the ability to order vehicles based on their delivery dates, as payment is not required until the vehicles are delivered. For example, once the FY 2025/2026 budget is finalized, the approved number of vehicles can be ordered immediately with delivery scheduled for the new fiscal year. This streamlined process accelerates the acquisition and deployment of fleet resources, ensuring timely availability to meet operational needs.

Fiscal Impact:

A comparison of current vehicle and outfitting costs with Enterprise's quotes indicates potential savings of approximately $4,691 per vehicle, not including possible dealer and manufacturer rebates. These savings do not factor in lease costs. With a current lease rate of 6.5%, tied to federal interest rates, the overall cost may increase depending on the lease term. Even with the addition of the financing costs, the timely acquisition and deployment of vehicles to the field is paramount. Ensuring officers have reliable, properly outfitted vehicles when needed is crucial for operational effectiveness and outweighs the potential financial savings.

The Police Department currently contributes annual charges to the Vehicle Internal Service Fund for vehicle replacements. The Finance Department will establish a separate account within the Internal Service Fund for the Enterprise Lease agreement and adjust the budgetary charges to cover the costs of the agreement.

The estimated cost to prepare the report is $850.

Recommended Action:

Approve the service agreements with Enterprise Fleet Management for procuring, leasing, outfitting, and retiring fleet vehicles;
Authorize the City Manager to sign the Master Lease Agreement and Service Agreement Addendum; and
Authorize the City Manager to sign the Sourcewell Agreement with Enterprise, Enterprise Agreement to Sell Customer Vehicles, Consignment Auction Agreement, Self Insurance Addedum, and Government Credit Application.

Attachments:

A. Master Lease Agreement with Amendment

B. Agreement to Sell Customer Vehicles
C. Consignment Auction Agreement
D. Government Credit Application
E. Self-insurance to MLA
F. Sourcewell Agreement
G. Service Agreement Addendum

FLEET MANAGEMENT
I

MASTER EQUITY LEASE AGREEMENT
This Master Equity Lease Agreement is entered into this day of ,20 by and between Enterprise FM Trust, a Delaware statutory trust ("Lessor"), and the lessee whose name and address is set forth on the signature page below ("Lessee").

1. LEASE OF VEHICLES: Lessor hereby leases to Lessee and Lessee hereby leases from Lessor the vehicles (individually, a "Vehicle" and collectively, the "Vehicles") described in the schedules from time to time delivered by Lessor to Lessee as set forth below ("Schedule(s)") for the rentals and on the terms and conditions set forth in this Agreement and in the applicable Schedule. References to this "Agreement" shall include this Master Equity Lease Agreement and the various Schedules and addenda to this Master Equity Lease Agreement, each of which are incorporated herein as part of a single, unitary Agreement. Lessor will, on or about the date of delivery of each Vehicle to Lessee, send Lessee a Schedule covering the Vehicle, which will include, among other things, a description of the Vehicle, the lease term and the monthly rental and other payments due with respect to the Vehicle. The terms contained in each such Schedule will be binding on Lessee unless Lessee objects in writing to such Schedule within ten (10) days after the date of delivery of the Vehicle covered by such Schedule. Lessor is the sole legal owner of each Vehicle. This Agreement is a lease only and Lessee will have no right, title or interest in or to the Vehicles except for the use of the Vehicles as described in this Agreement. This Agreement shall be treated as a true lease for federal and applicable state income tax purposes with Lessor having all benefits of ownership of the Vehicles. It is understood and agreed that Enterprise Fleet Management, Inc. or an affiliate thereof (together with any subservicer, agent, successor or assign as servicer on behalf of Lessor, "Servicer") may administer this Agreement on behalf of Lessor and may perform the service functions herein provided to be performed by Lessor.

2. TERM: The term of this Agreement ("Term") for each Vehicle begins on the date such Vehicle is delivered to Lessee (the "Delivery Date") and, unless terminated earlier in accordance with the terms of this Agreement, continues for the "Lease Term" as described in the applicable Schedule.

3. RENT AND OTHER CHARGES:
(a) Lessee agrees to pay Lessor monthly rental and other payments according to the Schedules, Open -End (Equity) Lease Rate Quotes, and this Agreement. The monthly payments will be in the amount listed as the "Total Monthly Rental Including Additional Services" on the applicable Schedule (with any portion of such amount identified as a charge for maintenance services under Section 4 of the applicable Schedule being payable to Lessor as agent for Enterprise Fleet Management, Inc.) and will be due and payable in advance on the first day of each month. Lessee agrees to pay Lessor interest charges, in connection with the acquisition of a Vehicle, for the period between the date Lessor issues payment to acquire such Vehicle and the date the Vehicle is delivered to Lessee.

Such interest charges shall be included in each Schedule. If a Vehicle is delivered to Lessee on any day other than the first day of a month, monthly rental payments will begin on the first day of the next month. In addition to the monthly rental payments, Lessee agrees to pay Lessor a pro -rated rental charge for the number of days that the Delivery Date precedes the first monthly rental payment date. A portion of each monthly rental payment, being the amount designated as "Depreciation Reserve" on the applicable Schedule, will be considered as a reserve for depreciation and will be credited against the Delivered Price of the Vehicle for purposes of computing the Book Value of the Vehicle under Section 3(c). Lessee agrees to pay Lessor the 'Total Initial Charges" set forth in each Schedule on the due date of the first monthly rental payment under such Schedule. Lessee agrees to pay Lessor the "Service Charge Due at Lease Termination" set forth in each Schedule at the end of the applicable Term (whether by reason of expiration, early termination or otherwise). (b) In the event the Term for any Vehide ends prior to the last day of the scheduled Term, whether as a result of a default by Lessee, a Casualty Occurrence or any other reason, the rentals and management fees paid by Lessee will be recalculated in accordance with the rule of 78's and the adjusted amount will be payable by Lessee to Lessor on the termination date.
(c) Lessee agrees to pay Lessor within thirty (30) days after the end of the Term for each Vehicle, additional rent equal to the excess, if any, of the Book Value of such Vehicle over the greater of (i) the wholesale value of such Vehicle as determined by Lessor in good faith or (ii) except as provided below, twenty percent (20%) of the Delivered Price of such Vehicle as set forth in the applicable Schedule. If the Book Value of such Vehicle is less than the greater of (i) the wholesale value of such Vehicle as determined by Lessor in good faith or (ii) except as provided below, twenty percent (20%) of the Delivered Price of such Vehicle as set forth in the applicable Schedule, Lessor agrees to pay such deficiency to Lessee as a terminal rental adjustment after the end of the applicable Term (subject to Lessor's right to recoup any amounts Lessor would owe to Lessee under this Section 3(c) against any obligations of Lessee to Lessor under this Agreement).

Notwithstanding the foregoing, if (i) the Term for a Vehicle is greater than forty-eight (48) months (including any extension of the Term for such Vehicle), (ii) the mileage on a Vehicle at the end of the Term is greater than 15,000 miles per year on average (prorated on a daily basis) (i.e., if the mileage on a Vehicle with a Term of thirty-six (36) months is greater than 45,000 miles) or (iii) in the sole judgment of Lessor, a Vehicle has been subject to damage or any abnormal or excessive wear and tear, the calculations described in the two immediately preceding sentences shall be made without giving effect to clause (ii) in each such sentence. The "Book Value" of a Vehicle means the sum of (i) the "Delivered Price" of the Vehicle as set forth in the applicable Schedule minus (ii) the total Depreciation Reserve paid by Lessee to Lessor with respect to such Vehicle plus (iii) all accrued and unpaid rent and/or other amounts owed by Lessee with respect to such Vehicle. (d) Any security deposit of Lessee will be returned to Lessee at the end of the applicable Term, except that the deposit will first be applied to and recouped against any losses and/or damages suffered by Lessor as a result of Lessee's breach of or default under this Agreement and/or to any other amounts then owed by Lessee to Lessor.
(e) Any rental payment or other amount owed by Lessee to Lessor which is not paid within twenty (20) days after its due date will accrue interest, payable on demand of Lessor, from the date due until paid in full at a rate per annum equal to the lesser of (i) Eighteen Percent (18%) per annum or (ii) the highest rate permitted by applicable law (the "Default Rate").

Initials: EFM Customer

(f) If Lessee fails to pay any amount due under this Agreement or to comply with any of the covenants contained in this Agreement, Lessor, Servicer or any other agent of Lessor may, at its option, pay such amounts or perform such covenants and all sums paid or incurred by Lessor in connection therewith will be repayable by Lessee to Lessor upon demand together with interest thereon at the Default Rate. (g) Lessee's obligations to make all payments of rent and other amounts under this Agreement are absolute and unconditional and such payments shall be made in immediately available funds without setoff, counterclaim or deduction of any kind. Lessee acknowledges and agrees that neither any Casualty Occurrence to any Vehicle nor any defect, unfitness or lack of governmental approval in, of, or with respect to, any Vehicle regardless of the cause or consequence nor any breach by Enterprise Fleet Management, Inc. of any maintenance agreement between Enterprise Fleet Management, Inc. and Lessee covering any Vehicle regardless of the cause or consequence will relieve Lessee from the performance of any of its obligations under this Agreement, including, without limitation, the payment of rent and other amounts under this Agreement. (h) In the event Lessor, Servicer or any other agent of Lessor arranges for rental vehicle(s) with a subsidiary or affiliate of Enterprise Holdings, Inc., Lessee shall be fully responsible for all obligations under any applicable rental agreement.

4. USE AND SURRENDER OF VEHICLES: Lessee agrees to allow only duly authorized, licensed and insured drivers to use and operate the Vehicles. Lessee agrees to comply with, and cause its drivers to comply with, all laws, statutes, rules, regulations and ordinances (including without limitation such federal, state and local laws, statutes, rules, regulations and ordinances governing autonomous vehicles and automated driving systems and any parts, components and products related thereto) and the provisions of all insurance policies affecting or covering the Vehicles or their use or operation. In connection with autonomous vehicles and automated driving systems and the parts, components and products related thereto, Lessee agrees to comply with all applicable guidance and professional standards issued, released or published by governmental and quasi -governmental agencies, including without limitation the federal guidance for automated vehicles published by the Department of Transportation and the Federal Automated Vehicle Policy issued by the U.S. Department of Transportation and the National Highway Traffic Safety Administration. Lessee agrees to keep the Vehicles free of all liens, charges and encumbrances. Lessee agrees that in no event will any Vehicle be used or operated for transporting hazardous substances or persons for hire, for any illegal purpose or to pull trailers that exceed the manufacturer's trailer towing recommendations. Lessee agrees that no Vehicle is intended to be or will be utilized as a "school bus" as defined in the Code of Federal Regulations or any applicable state or municipal statute or regulation. Lessee agrees not to remove any Vehicle from the continental United States without first obtaining Lessor's written consent. At the expiration or earlier termination of this Agreement with respect to each Vehicle, or upon demand by Lessor made pursuant to Section 14, Lessee at its risk and expense agrees to return such Vehicle to Lessor at such place and by such reasonable means as may be designated by Lessor. If for any reason Lessee fails to return any Vehicle to Lessor as and when required in accordance with this Section, Lessee agrees to pay Lessor additional rent for such Vehicle at twice the normal pro -rated daily rent. Acceptance of such additional rent by Lessor will in no way limit Lessor's remedies with respect to Lessee's failure to return any Vehicle as required hereunder.

5. COSTS, EXPENSES, FEES AND CHARGES: Lessee agrees to pay all costs, expenses, fees, charges, fines, tickets, penalties and taxes (other than federal and state income taxes on the income of Lessor) incurred in connection with the titling, licensing, registration, delivery, purchase, sale, rental, and Lessee's use or operation of the Vehicles. If Lessor, Servicer or any other agent of Lessor incurs any such costs or expenses, Lessee agrees to promptly reimburse Lessor for the same.

6. LICENSE AND CHARGES: Each Vehicle will be titled, registered and licensed in the name designated by Lessor at Lessee's expense. Certain other charges relating to the acquisition of each Vehicle and paid or satisfied by Lessor have been capitalized in determining the monthly rental, treated as an initial charge or otherwise charged to Lessee. Such charges have been determined without reduction for trade-in, exchange allowance or other credit attributable to any Lessor - owned vehicle.

7. REGISTRATION PLATES, ETC.: Lessee agrees, at its expense, to obtain in the name designated by Lessor all registration plates and other plates, permits, inspections and/or licenses required in connection with the Vehicles, except for the initial registration plates which Lessor will obtain at Lessee's expense. The parties agree to cooperate and to furnish any and all information or documentation, which may be reasonably necessary for compliance with the provisions of this Section or any federal, state or local law, rule, regulation or ordinance. Lessee agrees that it will not permit any Vehicle to be located in a state other than the state in which such Vehicle is then titled for any continuous period of time that would require such Vehicle to become subject to the titling, licensing and/or registration laws of such other state.

8. MAINTENANCE OF AND IMPROVEMENTS TO VEHICLES:
(a) Lessee agrees, at its expense, to (i) maintain the Vehicles in good condition, repair, maintenance and running order and in accordance with all manufacturer's instructions and warranty requirements and all legal requirements and (ii) furnish all labor, materials, parts and other essentials required for the proper operation and maintenance of the Vehicles. Lessee will not make (or cause to be made) any alterations, upgrades, upfitting, additions or improvements (collectively, "Alterations") to any Vehicle which (i) could impact or impair the "motor vehicle safety" (as defined by the Motor Vehicle Safety Act) of the Vehicle, or (ii) could impact, impair, void or render unenforceable the manufacturer's warranty. Without the prior written consent of Lessor, Lessee will not make (or cause to be made) any Alterations to any Vehicle which (i) detracts, impairs, damages or alters the Vehicle's nature, purpose, economic value, remaining useful life, functionality, utility, software or controls, or (ii) subjects the Vehicle or any part or component of such Vehicle to any lien, charge or encumbrance. Any Alterations of any nature to a Vehicle are made at Lessee's sole cost, risk and liability, including without limitation, any such Alterations approved by, or made with the assistance or at the direction of Lessor. Any replacement parts added to any Vehicle shall be in at least as good an operating condition as the prior part before the replacement (assuming such part was, at the time of the replacement, in the condition required by the terms of this Agreement). Any Alterations to a Vehicle will become and remain the property of Lessor and will be returned with such Vehicle upon such Vehicle's return pursuant to Section 4 and shall be free of any liens, charges or encumbrances; provided, however, Lessor shall have the right at any time to require Lessee to remove any such Alteration at Lessee's sole cost, expense and liability. In no event or instance shall the value of any Alterations be regarded as rent. Lessee and Lessor acknowledges and agrees that Lessor will not be required to make any repairs, replacements or Alterations of any nature or description with respect to any Vehicle, to maintain or repair any Vehicle or to make any Initials: EFM Customer

expenditure whatsoever in connection with any such Vehicle(s) or this Agreement. (b) Lessor and Lessee acknowledge and agree that if Section 4 of a Schedule includes a charge for maintenance, (i) the Vehicle(s) covered by such Schedule are subject to a separate maintenance agreement between Enterprise Fleet Management, Inc. and Lessee and (ii) Lessor shall have no liability or responsibility for any failure of Enterprise Fleet Management, Inc. to perform any of its obligations thereunder or to pay or reimburse Lessee for its payment of any costs and expenses incurred in connection with the maintenance or repair of any such Vehicle(s).

9. SELECTION OF VEHICLES AND DISCLAIMER OF WARRANTIES:
(a) LESSEE ACCEPTANCE OF DELIVERY AND USE OF EACH VEHICLE WILL CONCLUSIVELY ESTABLISH THAT SUCH VEHICLE IS OF A SIZE, DESIGN,

CAPACITY, TYPE AND MANUFACTURE SELECTED BY LESSEE AND THAT SUCH VEHICLE IS IN GOOD CONDITION AND REPAIR AND IS SATISFACTORY IN ALL RESPECTS AND IS SUITABLE FOR LESSEE'S PURPOSE. LESSEE ACKNOWLEDGES THAT LESSOR IS NOT A MANUFACTURER OF ANY VEHICLE OR AN AGENT OF A MANUFACTURER OF ANY VEHICLE.
(b) LESSOR MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO ANY VEHICLE, INCLUDING,

WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY AS TO CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, IT BEING AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY LESSEE. THE VEHICLES ARE LEASED "AS IS," "WITH ALL FAULTS." All warranties made by any supplier, vendor and/or manufacturer of a Vehicle are hereby assigned by Lessor to Lessee for the applicable Term and Lessee's only remedy, if any, is against the supplier, vendor or manufacturer of the Vehicle. (c) None of Lessor, Servicer or any other agent of Lessor will be liable to Lessee for any liability, claim, loss, damage (direct, incidental or consequential) or expense of any kind or nature, caused directly or indirectly, by any Vehicle or any inadequacy of any Vehicle for any purpose or any defect (latent or patent) in any Vehicle or the use or maintenance of any Vehicle or any repair, servicing or adjustment of or to any Vehicle, or any delay in providing or failure to provide any Vehicle, or any interruption or loss of service or use of any Vehicle, or any loss of business or any damage whatsoever and however caused. In addition, none of Lessor, Servicer or any other agent of Lessor will have any liability to Lessee under this Agreement or under any order authorization form executed by Lessee if Lessor is unable to locate or purchase a Vehicle ordered by Lessee or for any delay in delivery of any Vehicle ordered by Lessee. (d) In no event shall Lessor, Servicer or any other agent of Lessor or their respective affiliates be liable for consequential, indirect, incidental, special, exemplary, punitive or enhanced damages, lost profits or revenues or diminution in value, arising out of or relating to this Agreement, including, without limitation, any breach or performance of this Agreement, regardless of (i) whether such damages were foreseeable, (ii) whether or not Lessor, Servicer or any other agent of Lessor or their respective affiliates were advised of the possibility of such damages and/or (iii) the legal or equitable theory (contract, tort or otherwise) upon which a claim, action, cause of action, demand, lawsuit, arbitration, inquiry, proceeding or litigation is based, and notwithstanding the failure of any agreed or other remedy of its essential purpose.

10. RISK OF LOSS: Lessee assumes and agrees to bear the entire risk of loss of, theft of, damage to or destruction of any Vehicle from any cause whatsoever ("Casualty Occurrence"). In the event of a Casualty Occurrence to a Vehicle, Lessee shall give Lessor prompt notice of the Casualty Occurrence and thereafter will place the applicable Vehicle in good repair, condition and working order; provided, however, that if the applicable Vehicle is determined by Lessor to be lost, stolen, destroyed or damaged beyond repair (a "Totaled Vehicle"), Lessee agrees to pay Lessor no later than the date thirty (30) days after the date of the Casualty Occurrence the amounts owed under Sections 3(b) and 3(c) with respect to such Totaled Vehicle. Upon such payment, this Agreement will terminate with respect to such Totaled Vehicle.

11. INSURANCE:
(a) Lessee agrees to purchase and maintain in force during the Term, insurance policies in at least the amounts listed below covering each Vehicle, to be written by an insurance company or companies satisfactory to Lessor, insuring Lessee, Lessor and any other person or entity designated by Lessor against any damage, claim, suit, action or liability, and that Lessor will suffer immediate and irreparable harm if Lessee fails to comply with such obligations:
(i) Commercial Automobile Liability Insurance (including Uninsured/Underinsured Motorist Coverage and No -Fault Protection where required by law) for the limits listed below (Note - $2,000,000 Combined Single Limit Bodily Injury and Property Damage per accident with No Deductible is required for each Vehicle capable of transporting more than 8 passengers):

State of Vehicle Registration Coverage
Connecticut, Massachusetts, Maine, New Hampshire, New Jersey, $1,000,000 Combined Single Limit Bodily Injury and Property Damage per New York, Pennsylvania, Rhode Island, and Vermont accident - No Deductible Florida $500,000 Combined Single Limit Bodily Injury and Property Damage per accident or $100,000 Bodily Injury Per Person Per Accident, $300,000 Per Accident and $50,000 Property Damage per accident (100/300/50) - No Deductible
All Other States $300,000 Combined Single Limit Bodily Injury and Property Damage Per Accident or $100,000 Bodily Injury Per Person Per Accident, $300,000 Per Accident and $50,000 Property Damage Per Accident (100/300/50) Initials: EFM Customer

(ii) Physical Damage Insurance (Collision & Comprehensive): Actual cash value of the applicable Vehicle. Maximum deductible of $1,000 per accident - Collision and $1,000 per accident - Comprehensive).

If the requirements of any governmental or regulatory agency exceed the minimums stated in this Agreement, Lessee must obtain and maintain the higher insurance requirements. Lessee agrees that each required policy of insurance will by appropriate endorsement or otherwise name Lessor and any other person or entity designated by Lessor as additional insureds and loss payees, as their respective interests may appear. Further, each such insurance policy must provide the following: (i) that the same may not be cancelled, changed or modified until after the insurer has given to Lessor, Servicer and any other person or entity designated by Lessor at least thirty (30) days prior written notice of such proposed cancellation, change or modification, (ii) that no act or default of Lessee or any other person or entity shall affect the right of Lessor, Servicer, any other agent of Lessor or any of their respective successors or assigns to recover under such policy or policies of insurance in the event of any loss of or damage to any Vehicle and (iii) that the coverage is "primary coverage" for the protection of Lessee, Lessor, Servicer, any other agent of Lessor and their respective successors and assigns notwithstanding any other coverage carried by Lessee, Lessor, Servicer, any other agent of Lessor or any of their respective successors or assigns protecting against similar risks. Original certificates evidencing such coverage and naming Lessor, Servicer, any other agent of Lessor and any other person or entity designated by Lessor as additional insureds and loss payees shall be furnished to Lessor prior to the Delivery Date, and annually thereafter and/or as reasonably requested by Lessor from time to time. In the event of default, Lessee hereby appoints Lessor, Servicer and any other agent of Lessor as Lessee's attorney -in -fact to receive payment of, to endorse all checks and other documents and to take any other actions necessary to pursue insurance claims and recover payments if Lessee fails to do so. Any expense of Lessor, Servicer or any other agent of Lessor in adjusting or collecting insurance shall be borne by Lessee.

Lessee, its drivers, servants and agents agree to cooperate fully with Lessor, Servicer, any other agent of Lessor and any insurance carriers in the investigation, defense and prosecution of all claims or suits arising from the use or operation of any Vehicle. If any claim is made or action commenced for death, personal injury or property damage resulting from the ownership, maintenance, use or operation of any Vehicle, Lessee will promptly notify Lessor of such action or claim and forward to Lessor a copy of every demand, notice, summons or other process received in connection with such claim or action. (b) Notwithstanding the provisions of Section 11(a) above: (i) if Section 4 of a Schedule includes a charge for physical damage waiver, Lessor agrees that (A) Lessee will not be required to obtain or maintain the minimum physical damage insurance (collision and comprehensive) required under Section 11(a) for the Vehicle(s) covered by such Schedule and (B) Lessor will assume the risk of physical damage (collision and comprehensive) to the Vehicle(s) covered by such Schedule; provided, however, that such physical damage waiver shall not apply to, and Lessee shall be and remain liable and responsible for, damage to a covered Vehicle caused by wear and tear or mechanical breakdown or failure, damage to or loss of any parts, accessories or components added to a covered Vehicle by Lessee without the prior written consent of Lessor and/or damage to or loss of any property and/or personal effects contained in a covered Vehicle. In the event of a Casualty Occurrence to a covered Vehicle, Lessor may, at its option, replace, rather than repair, the damaged Vehicle with an equivalent vehicle, which replacement vehicle will then constitute the "Vehicle" for purposes of this Agreement; and (ii) if Section 4 of a Schedule includes a charge for commercial automobile liability enrollment, Lessor agrees that it will, at its expense, obtain for and on behalf of Lessee, by adding Lessee as an additional insured under a commercial automobile liability insurance policy issued by an insurance company selected by Lessor, commercial automobile liability insurance satisfying the minimum commercial automobile liability insurance required under Section 11(a) for the Vehicle(s) covered by such Schedule. Lessor may at any time during the applicable Term terminate said obligation to provide physical damage waiver and/or commercial automobile liability enrollment and cancel such physical damage waiver and/or commercial automobile liability enrollment upon giving Lessee at least ten (10) days prior written notice. Upon such cancellation, insurance in the minimum amounts as set forth in 11(a) shall be obtained and maintained by Lessee at Lessee's expense. An adjustment will be made in monthly rental charges payable by Lessee to reflect any such change and Lessee agrees to furnish Lessor with satisfactory proof of insurance coverage within ten (10) days after mailing of the notice. In addition, Lessor may change the rates charged by Lessor under this Section 11(b) for physical damage waiver and/or commercial automobile liability enrollment upon giving Lessee at least thirty (30) days prior written notice.

12. INDEMNITY: To the extent permitted by state law, Lessee agrees to defend and indemnify Lessor, Servicer, any other agent of Lessor and their respective successors and assigns from and against any and all losses, damages, liabilities, suits, claims, demands, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) which Lessor, Servicer, any other agent of Lessor or any of their respective successors or assigns may incur by reason of Lessee's breach or violation of, or failure to observe or perform, any term, provision or covenant of this Agreement, or as a result of any loss, damage, theft or destruction of any Vehicle or related to or arising out of or in connection with the use, operation or condition of any Vehicle. The provisions of this Section 12 shall survive any expiration or termination of this Agreement. Nothing herein shall be deemed to affect the rights, privileges, and immunities of Lessee and the foregoing indemnity provision is not intended to be a waiver of any sovereign immunity afforded to Lessee pursuant to the law.

13. INSPECTION OF VEHICLES; ODOMETER DISCLOSURE; FINANCIAL STATEMENTS: Lessee agrees to accomplish, at its expense, all inspections of the Vehicles required by any governmental authority during the Term. Lessor, Servicer, any other agent of Lessor and any of their respective successors or assigns will have the right to inspect any Vehicle at any reasonable time(s) during the Term and for this purpose to enter into or upon any building or place where any Vehicle is located. Lessee agrees to comply with all odometer disclosure laws, rules and regulations and to provide such written and signed disclosure information on such forms and in such manner as directed by Lessor. Providing false information or failure to complete the odometer disclosure form as required by law may result in fines and/or imprisonment. Lessee hereby agrees to promptly deliver to Lessor such financial statements and other financial information regarding Lessee as Lessor may from time to time reasonably request.

14. DEFAULT; REMEDIES: The following shall constitute events of default ("Events of Default") by Lessee under this Agreement: (a) if Lessee fails to pay when due any rent or other amount due under this Agreement and any such failure shall remain unremedied for ten (10) days; (b) if Lessee fails to perform, keep or observe any term, provision or covenant contained in Section 11 of this Agreement; (c) if Lessee fails to perform, keep or observe any other term, provision or covenant contained in this Agreement and any such failure shall remain unremedied for thirty (30) days after written notice thereof is given by Lessor, Servicer or any other agent of Lessor to Lessee; (d) any seizure or confiscation of any Vehicle or any other act (other than a Casualty Occurrence) otherwise rendering any Vehicle unsuitable for use (as determined by Lessor); (e) if any present or future guaranty in favor of Lessor of all or any portion of the obligations of Lessee under this Agreement shall at any time for any reason cease to be in full force and effect or shall be declared to be null and void by a court of competent jurisdiction, or Initials: EFM Customer

if the validity or enforceability of any such guaranty shall be contested or denied by any guarantor, or if any guarantor shall deny that it, he or she has any further liability or obligation under any such guaranty or if any guarantor shall fail to comply with or observe any of the terms, provisions or conditions contained in any such guaranty; (f) the occurrence of a material adverse change in the financial condition, a going concern audit comment of Lessee or any guarantor, or if Lessee admits that it cannot pay its debts as they become due, makes an assignment for the benefit of creditors, is the subject of a voluntary or involuntary petition for bankruptcy, is adjudged insolvent or bankrupt, or a receiver or trustee is appointed for any portion of Lessee's assets or property; (g) if more than one (1) payment by Lessee to Lessor is returned by Lessee's bank for any reason within a twelve (12) month period; or (h) if Lessee or any guarantor is in default under or fails to comply with any other present or future agreement with or in favor of Lessor, Servicer of Lessor, or any direct or indirect subsidiary of Servicer of Lessor, Enterprise Holdings, Inc. or a subsidiary or affiliate of Enterprise Holdings, Inc.. For purposes of this Section 14, the term "guarantor" shall mean any present or future guarantor of all or any portion of the obligations of Lessee under this Agreement.

Upon the occurrence of any Event of Default, Lessor, without notice to Lessee, will have the right to exercise concurrently or separately (and without any election of remedies being deemed made), the following remedies: (a) Lessor may demand and receive immediate possession of any or all of the Vehicles from Lessee, without releasing Lessee from its obligations under this Agreement; if Lessee fails to surrender possession of the Vehicles to Lessor on default (or termination or expiration of the Temi), Lessor, Servicer, any other agent of Lessor and any of Lessor's independent contractors shall have the right to enter upon any premises where the Vehicles may be located and to remove and repossess the Vehicles; (b) Lessor may enforce performance by Lessee of its obligations under this Agreement; (c) Lessor may recover damages and expenses sustained by Lessor, Servicer, any other agent of Lessor or any of their respective successors or assigns by reason of Lessee's default including, to the extent permitted by applicable law, all costs and expenses, including court costs and reasonable attorneys' fees and expenses, incurred by Lessor, Servicer, any other agent of Lessor or any of their respective successors or assigns in attempting or effecting enforcement of Lessor's rights under this Agreement (whether or not litigation is commenced) and/or in connection with bankruptcy or insolvency proceedings; (d) upon written notice to Lessee, Lessor may terminate Lessee's rights under this Agreement; (e) with respect to each Vehicle, Lessor may recover from Lessee all amounts owed by Lessee under Sections 3(b) and 3(c) of this Agreement (and, if Lessor does not recover possession of a Vehicle, (i) the estimated wholesale value of such Vehicle for purposes of Section 3(c) shall be deemed to be $0.00 and (ii) the calculations described in the first two sentences of Section 3(c) shall be made without giving effect to clause (ii) in each such sentence); and/or (f) Lessor may exercise any other right or remedy which may be available to Lessor under the Uniform Commercial Code, any other applicable law or in equity. A termination of this Agreement shall occur only upon written notice by Lessor to Lessee. Any termination shall not affect Lessee's obligation to pay all amounts due for periods prior to the effective date of such termination or Lessee's obligation to pay any indemnities under this Agreement. All remedies of Lessor under this Agreement or at law or in equity are cumulative.

15. ASSIGNMENTS: Lessor may from time to time assign, pledge or transfer this Agreement and/or any or all of its rights and obligations under this Agreement to any person or entity. Lessee agrees, upon notice of any such assignment, pledge or transfer of any amounts due or to become due to Lessor under this Agreement to pay all such amounts to such assignee, pledgee or transferee. Any such assignee, pledgee or transferee of any rights or obligations of Lessor under this Agreement will have all of the rights and obligations that have been assigned to it. Lessee's rights and interest in and to the Vehicles are and will continue at all times to be subject and subordinate in all respects to any assignment, pledge or transfer now or hereafter executed by Lessor with or in favor of any such assignee, pledgee or transferee, provided that Lessee shall have the right of quiet enjoyment of the Vehicles so long as no Event of Default under this Agreement has occurred and is continuing. Lessee acknowledges and agrees that the rights of any assignee, pledgee or transferee in and to any amounts payable by the Lessee under any provisions of this Agreement shall be absolute and unconditional and shall not be subject to any abatement whatsoever, or to any defense, setoff, counterclaim or recoupment whatsoever, whether by reason of any damage to or loss or destruction of any Vehicle or by reason of any defect in or failure of title of the Lessor or interruption from whatsoever cause in the use, operation or possession of any Vehicle, or by reason of any indebtedness or liability howsoever and whenever arising of the Lessor or any of its affiliates to the Lessee or to any other person or entity, or for any other reason.

Without the prior written consent of Lessor, Lessee may not assign, sublease, transfer or pledge this Agreement, any Vehicle, or any interest in this Agreement or in and to any Vehicle, or permit its rights under this Agreement or any Vehicle to be subject to any lien, charge or encumbrance. Lessee's interest in this Agreement is not assignable and cannot be assigned or transferred by operation of law. Lessee will not transfer or relinquish possession of any Vehicle (except for the sole purpose of repair or service of such Vehicle) without the prior written consent of Lessor.

16. MISCELLANEOUS: This Agreement contains the entire understanding of the parties. This Agreement may only be amended or modified by an instrument in writing executed by both parties. Lessor shall not by any act, delay, omission or otherwise be deemed to have waived any of its rights or remedies under this Agreement and no waiver whatsoever shall be valid unless in writing and signed by Lessor and then only to the extent therein set forth. A waiver by Lessor of any right or remedy under this Agreement on any one occasion shall not be construed as a bar to any right or remedy, which Lessor would otherwise have on any future occasion. If any term or provision of this Agreement or any application of any such term or provision is invalid or unenforceable, the remainder of this Agreement and any other application of such term or provision will not be affected thereby. Without Lessor's prior written consent, Lessee shall not use or include Lessor's, Servicer's, any other agent of Lessor's names or trademarks orally or in writing in any media, customer lists or marketing materials. Giving of all notices under this Agreement will be sufficient if mailed by certified mail to a party at its address set forth below or at such other address as such party may provide in writing from time to time. Any such notice mailed to such address will be effective one (1) day after deposit in the United States mail, duly addressed, with certified mail, postage prepaid. Lessee will promptly notify Lessor of any change in Lessee's address. This Agreement may be executed in multiple counterparts (including facsimile and pdf counterparts), but the counterpart marked "ORIGINAL.:' by Lessor will be the original lease for purposes of applicable law. All of the representations, warranties, covenants, agreements and obligations of each Lessee under this Agreement (if more than one) are joint and several.

17. SUCCESSORS AND ASSIGNS; GOVERNING LAW: Subject to the provisions of Section 15, this Agreement will be binding upon Lessee and its heirs, executors, personal representatives, successors and assigns, and will inure to the benefit of Lessor, Servicer, any other agent of Lessor and their respective successors and assigns. This Agreement will be governed by and construed in accordance with the substantive laws of the State of Missouri (determined without reference to conflict of law principles).

18. NON -PETITION: Each party hereto hereby covenants and agrees that, prior to the date which is one year and one day after payment in full of all indebtedness Initials: EFM Customer
Page724of789

of Lessor, it shall not institute against, or join any other person in instituting against, Lessor any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States. The provisions of this Section 18 shall survive termination of this Master Equity Lease Agreement.

19. NON -APPROPRIATION: Lessee's funding of this Agreement shall be on a Fiscal Year basis and is subject to annual appropriations. Lessor acknowledges that Lessee is a municipal corporation, is precluded by the County or State Constitution and other laws from entering into obligations that financially bind future governing bodies, and that, therefore, nothing in this Agreement shall constitute an obligation of future legislative bodies of the County or State to appropriate funds for purposes of this Agreement. Accordingly, the parties agree that the lease terms within this Agreement or any Schedules relating hereto are contingent upon appropriation of funds. The parties further agree that should the County or State fail to appropriate such funds, the Lessor shall be paid all rentals due and owing hereunder up until the actual day of termination. In addition, Lessor reserves the right to be paid for any reasonable damages. These reasonable damages will be limited to the losses incurred by the Lessor for having to sell the vehicles on the open used car market prior to the end of the scheduled term (as determined in Section 3 and Section 14 of this Agreement).

IN WITNESS WHEREOF, Lessor and Lessee have duly executed this Master Equity Lease Agreement as of the day and year first above written.

LESSEE:

Signature: _
By:

Title:

Address:

Date Signed: _
LESSOR: Enterprise FM Trust
By: Enterprise Fleet Management, Inc. its attorney in fact Signature:

By:

Title:

Address:

Date Signed:

Initials: EFM
Customer
Pa• e 725 of 789
®2623 Enterprise Reel Management, Inc. 23_ENT_EFTI_L01464 Gay Equity Fonn_Updaled V2

FLEET MANAGEMENT

AGREEMENT TO SELL CUSTOMER VEHICLES
THIS AGREEMENT is entered into by and among the entities set forth on the attached Schedule 1 (hereinafter each an "Enterprise Entity" and collectively the "Enterprise Entities") and Enterprise Fleet Management, Inc. (hereinafter referred to as "EFM") (the "Enterprise Entities" and "EFM" shall collectively be referred to as "Enterprise") on the one hand and (hereinafter referred to as "CUSTOMER"), on the other hand on this _ day of hereinafter referred to as the "Execution Date").

RECITALS
A. Enterprise FM Trust and CUSTOMER have entered into an agreement whereby Customer has agreed to lease certain vehicles set forth in the agreement between Customer and Enterprise FM Trust; B. EFM is the servicer of the lease agreement between Enterprise FM Trust and Customer; C. Enterprise, from time to time, sells vehicles at wholesale auctions and other outlets; and D. The CUSTOMER and Enterprise wish to enter into an agreement whereby Enterprise will sell at wholesale, CUSTOMER's vehicles set forth on Exhibit A, attached hereto and incorporated herein, as supplemented from time to time (collectively, the "Vehicles").

NOW, THEREFORE, for and in consideration of the mutual promises and covenants hereinafter set forth, the parties agree as follows:

TERMS AND CONDITIONS

1. Right to Sell: Enterprise shall have the non-exclusive right to sell any Vehicles assigned to Enterprise by CUSTOMER, or under consignment from Customer to Enterprise, as the case may be dependent upon applicable law in the jurisdiction in which the Vehicle is to be sold. For Vehicles to be sold under assignment, Customer shall assign the title to Enterprise and deliver the assigned title to Enterprise with the Vehicle. For Vehicles to be sold under consignment, Customer shall execute a consignment agreement granting Enterprise power in any and all matters pertaining to the transfer of Vehicle titles and any papers necessary thereto on behalf of CUSTOMER.

2. Additional Documentation: Where necessary, CUSTOMER shall execute any and all additional documentation, required to effectuate the sale of Vehicle(s).

3. Service Fee: For each Vehicle sold, the CUSTOMER shall pay Enterprise an administrative fee of the lesser of$ or the maximum permitted by law ("Service Fee").

4. Sales Process: Enterprise shall use reasonable efforts in its sole discretion to sell each Vehicle. CUSTOMER may, at its discretion, place a Minimum Bid or Bid to be Approved (BTBA) on any Vehicle by providing prior written notification to Enterprise. Enterprise shall have full discretion to accept any bid at or above the designated minimum bid or BTBA. Absent any such minimum bid or BTBA, Enterprise shall have full discretion to accept any bid on a Vehicle.

5. Time for Payment:
(a) No later than twenty-one (21) business days after the collection of funds by Enterprise for the sale of a Vehicle, Enterprise will remit to the CUSTOMER an amount equal to the Vehicle sale price minus any seller fees, auction fees, Service Fees, towing costs, title service fees, enhancement fees and any expenses incurred by Enterprise while selling Vehicle, regardless of whether the purchaser pays for the Vehicle.
(b) Enterprise's obligations pursuant to Section 5(a) shall not apply to Vehicle sales involving mistakes or inadvertences in the sales process where Enterprise reasonably believes in its sole discretion that fairness to the buyer or seller justifies the cancellation or reversal of the sale. If Enterprise has already remitted payment to CUSTOMER pursuant to Section 5(a) prior to the sale being reversed or cancelled, CUSTOMER agrees to reimburse Enterprise said payment in full. Enterprise will then re -list the Vehicle and pay CUSTOMER in accordance with this Section 5. Examples of mistakes or iiptiltiter2e I but are not limited, to Vehicles sold using inaccurate or incomplete vehicle or title descriptions and bids entered erroneously.

6. Indemnification and Hold Harmless: Except as otherwise provided herein, CUSTOMER agrees to indemnify, defend and hold EFM and each Enterprise Entity and their parents and affiliated entities, employees and agents harmless to the extent any loss, damage, or liability arises from EFM or any Enterprise Entity's use or operation of a vehicle and for the negligence or willful misconduct of Customer, its agents or employees, and for its breach of any term of this Agreement. The parties' obligations under this section shall survive termination of this Agreement.

7. Risk of Loss: Notwithstanding anything to the contrary hereunder, CUSTOMER shall assume all risk of loss for damage to or loss of any Vehicle or any part or accessory regardless of fault or negligence of CUSTOMER, Enterprise, EFM or any other person or entity or act of God.

8. Liens, Judgments, Titles and Defects: CUSTOMER represents and warrants it holds full legal title to each such Vehicle, title to each such Vehicle is clean and not subject to being branded for any reason, or requires any form of additional disclosure to a purchaser and that there are no open recalls on each such Vehicle. CUSTOMER shall defend, indemnify and hold Enterprise, EFM, their parents, employees and agents harmless from and against any and all claims, expenses (including reasonable attorney's fees), suits and demands arising out of, based upon, or resulting from any judgments, liens or citations that were placed on the Vehicle, defects in the Vehicle's title, or mechanical or design defects in the Vehicle.

9. Odometer: Neither EFM nor Enterprise assume responsibility for the correctness of the odometer reading on any Vehicle and the CUSTOMER shall defend, indemnify and hold EFM, Enterprise, their parents, employees and agents harmless from and against any and all claims, expenses (including reasonable attorney's fees), suits and demands arising out of, based upon or resulting from inaccuracy of the odometer reading on any Vehicle or any odometer statement prepared in connection with the sale of any Vehicle, unless such inaccuracy is caused by EFM, Enterprise, their employees or officers.

10. Bankruptcy: Subject to applicable law, in the event of the filing by CUSTOMER of a petition in bankruptcy or an involuntary assignment of its assets for the benefit of creditors, EFM or Enterprise may accumulate sales proceeds from the sale of all Vehicles and deduct seller fees, auction fees, Service Fees, towing costs, title service fees, enhancement fees and any expenses incurred by EFM or Enterprise while selling Vehicle from said funds. EFM or Enterprise will thereafter remit to CUSTOMER the net proceeds of said accumulated sales proceeds, if any.

11. Compliance with Laws: EFM, Enterprise and CUSTOMER shall comply with all federal, state, and local laws, regulations, ordinances, and statutes, including those of any state motor vehicle departments, department of insurance, and the Federal Odometer Act.

12. Insurance: CUSTOMER shall maintain and provide proof of Automobile Liability Insurance until the later of title transfer to purchaser of Vehicle or transfer of sales proceeds to Customer covering liability arising out of maintenance, use or operation of any Vehicle (owned, hired and non -owned) under this Agreement, with limits of not less than one million dollars ($1,000,000) per occurrence for bodily injury and property damage. EFM, Enterprise, and their subsidiaries and affiliates are to be named as Additional Insureds. This insurance shall be written as a primary policy and not contributing with any insurance coverage or self-insurance or other means of owner's financial responsibility applicable to EFM or Enterprise. CUSTOMER must waive and must require that its insurer waive its right of subrogation against EFM and Enterprise and their affiliates, employees, successors and permitted assigns on account of any and all claims CUSTOMER may have against EFM or Enterprise with respect to insurance actually carried or required to be carried pursuant to this Agreement.

13. Term: This agreement is effective on the Execution Date and shall continue until such time as either party shall notify the other party with thirty (30) days prior written notice to terminate the Agreement with or without cause.

14. Modification: No modification, amendment or waiver of this Agreement or any of its provisions shall be binding unless in writing and duly signed by the parties hereto.

15. Entire Acreement: This Agreement constitutes the entire Agreement between the parties and supersedes all previous agreements, promises, representations, understandings, and negotiations, whether written or oral, with respect to the subject matter hereto.

16. Liability Limit: EXCEPT TO THE EXTENT A PARTY HERETO BECOMES LIABLE FOR ANY DAMAGES OF THE TYPES DESCRIBED BELOW TO A

THIRD PARTY AS A RESULT OF A THIRD PARTY CLAIM AND SUCH PARTY IS ENTITLED TO INDEMNIFICATION WITH RESPECT THERETO UNDER

THE PROVISIONS OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY HEREUNDER BE LIABLE TO OTHER PARTY FOR ANY SPECIAL,

INCIDENTAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES (INCLUDING WITHOUT LIMITATION, LOSS OF GOODWILL,

LOSS OF PROFITS OR REVENUES, LOSS OF SAVINGS AND/OR INTERRUPTIONS OF BUSINESS), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

17. Attorney's Fees: In the event that a party hereto institutes any action or proceeding to enforce the provisions of this Agreement, the prevailing party shall be entitled to receive from the losing party reasonable attorney's fees and costs for legal services rendered to the prevailing party.

18. Authorization: Each party represents and warrants to the other party that the person signing this Agreement on behalf of such party is duly authorized to bind such party.

19. Independent Contractor: EFM and Enterprise shall perform the services hereunder as an independent contractor of Customer and no term of this Agreement shall be deemed or construed to render CUSTOMER and EFM or Enterprise as joint venturers or partners.

20. Unsold Vehicles: Should such Vehicle not sell, Customer shall pick up Vehicle within five (5) business days of being provided notice that the Vehicle has not been sold and, for Vehicles assigned to Enterprise by Customer, Enterprise shall assign title back to CUSTOMER. "ENTERPRISE" "CUSTOMER"
Signature:

Printed Name:

Title:

Date Signed:

Schedule 1
Enterprise Leasing Company of STL, LLC
Enterprise Leasing Company of Georgia, LLC
Enterprise Leasing Company of Florida, LLC
Enterprise Leasing Company of KS LLC
EAN Holdings, LLC
Enterprise Leasing Company of Orlando, LLC
Enterprise Leasing Company of Indianapolis, LLC
Enterprise Rent-A-Car Company of Boston, LLC
Enterprise Leasing Company of Denver, LLC
Enterprise Leasing Company of Chicago, LLC
Enterprise RAC Company of Maryland, LLC
Enterprise Leasing Company of Philadelphia, LLC
Enterprise RAC Company of Baltimore, LLC
Enterprise Leasing Company of Minnesota, LLC
Enterprise Leasing Company of Detroit, LLC
Enterprise Leasing Co of Norfolk/ Richmond, LLC
Enterprise Rent-A-Car Co of San Francisco, LLC

ELRAC, LLC

SNORAC, LLC
Signature:

Printed Name:

Title:

Date Signed:

Enterprise Rent-A-Car Company of Sacramento, LLC
Enterprise Rent-A-Car Company of Los Angeles, LLC
Enterprise RAC Company of Cincinnati, LLC

CLERAC, LLC
Enterprise Rent-A-Car Company of Pittsburgh, LLC
Enterprise Rent-A-Car Company of Wisconsin, LLC
Enterprise Rent-A-Car Company of UT, LLC

CAMRAC, LLC
Enterprise Rent-A-Car Company of Rhode Island, LLC
Enterprise Leasing Company of Phoenix, LLC
Enterprise Leasing Company- Southeast, LLC
Enterprise Leasing Company- West, LLC
Enterprise Leasing Company- South Central, LLC

PENRAC, LLC
Enterprise Rent-A-Car Company of KY, LLC
Enterprise Rent-A-Car Company - Midwest, LLC
Enterprise RAC Company of Montana/Wyoming, LLC

FLEET MANAGEMENT

CONSIGNMENT AUCTION AGREEIEMT
THIS AGREEMENT is entered into by and between Enterprise Fleet Management, Inc. a Missouri Corporation (hereinafter referred to as "Enterprise") and (hereinafter referred to as "CUSTOMER") on this day of (hereinafter referred to as the "Execution Date").

RECITALS
A. Enterprise is in the business of selling previous leased and rental vehicles at wholelsale auctions; and B. The CUSTOMER is in the business of
C. The CUSTOMER and Enterprise wish to enter into an agreement whereby Enterprise will sell at wholesale auction, CUSTOMER's vehicles set forth on Exhibit A, attached hereto and incorporated herein, as supplemented from time to time (collectively, the "Vehicles").

NOW, THEREFORE, for and in consideration of the mutual promises and covenants hereinafter set forth, the parties agree as follows:

TERMS AND CONDITIONS

1. Richt to Sell: Enterprise shall have the non-exclusive right to sell any Vehicles consigned to Enterprise by a CUSTOMER within the Geographic Territory.

2. Power of Attorney: CUSTOMER appoints Enterprise as its true and lawful attorney -in -fact to sign Vehicle titles on behalf of CUSTOMER for transfer of same and hereby grant it power in any and all matters pertaining to the transfer of Vehicle titles and any papers necessary thereto on behalf of CUSTOMER. The rights, powers and authorities of said attorney -in -fact granted in this instrument shall commence and be in full force and effect on the Execution Date, and such rights, powers and authority shall remain in full force and effect thereafter until terminated as set forth herein.

3. Assic
nments: Vehicle assignments may be issued to Enterprise by phone, fax, or electronically.

4. Service Fee: For each Vehicle sold, the CUSTOMER shall pay Enterprise a fee of$ ("Service Fee") plus towing at prevailing rates.

5. Sales Process: Enterprise shall use reasonable efforts sell each Vehicle. CUSTOMER may, at its discretion, place a Minimum Bid or Bid to be Approved (BTBA) on any Vehicle by providing prior written notification to Enterprise.

6. Time for Payment:
(a) No later than ten (10) business days after the collection of funds for the sale of a Vehicle, Enterprise will remit to the CUSTOMER an amount equal to the Vehicle sale price minus any seller fees, auction fees, Service Fees, towing costs, title service fees, enhancement fees and any expenses incurred by Enterprise while selling Vehicle, regardless of whether the purchaser pays for the Vehicle. (b) Enterprise's obligations pursuant to Section 6(a) shall not apply to Vehicle sales involving mistakes or inadvertences in the sales process where Enterprise reasonably believes that fairness to the buyer or seller justifies the cancellation or reversal of the sale. If Enterprise has already remitted payment to CUSTOMER pursuant to Section 6(a) prior to the sale being reversed or cancelled, CUSTOMER agrees to reimburse Enterprise said payment in full. Enterprise will then re -list the Vehicle and pay CUSTOMER in accordance with this Section

6. Examples of mistakes or inadvertences include, but are not limited, to Vehicles sold using inaccurate or incomplete vehicle or title descriptions and bids entered erroneously.

7. Indemnification and Hold Harmless: Enterprise and CUSTOMER agree to indemnify, defend and hold each other and its parent, employees and agents harmless to the extent any loss, damage, or liability arises from the negligence or willful misconduct of the other, its agents or employees, and for its breach of any term of this Agreement. The parties' obligations under this section shall survive termination of this Agreement.

8. Liens. Judaments. Titles and Defects: CUSTOMER shall defend, indemnify and hold Enterprise its parent, employees and agents harmless from and against any and all claims, expenses (including reasonable attorney's fees), suits and demands arising out of, based upon, or resulting from any judgments, liens or citations that were placed on the Vehicle, defects in the Vehicle's title, or mechanical or design defects in the Vehicle.

9. Odometer: Enterprise assumes no responsibility for the correctness of the odometer reading on any Vehicle and the CUSTOMER shall defend, indemnify and hold Enterprise its parent, employees and agents harmless from and against any and all claims, expenses (including reasonable attorney's fees), suits and demands arising out of, based upon or resulting from inaccuracy of the odometer reading on any Vehicle or any odometer statement prepared in connection with the sale of any Vehicle, unless such inaccuracy is caused by an employee, Enterprise, or officer of Enterprise.

10. Bankruptcy: Subject to applicable law, in the event of the filing by CUSTOMER of a petition in bankruptcy or an involuntary assignment of its assets for the benefit of creditors, Enterprise may accumulate sales proceeds from the sale ofall Vehicles and deduct seller fees, auction fees, Service Fees, towing costs, title service fees, enhancement fees and any expenses incurred by Enterprise while selling Vehicle from said funds. Enterprise will thereafter remit to CUSTOMER the net proceeds of said accumulated sales proceeds, if any.

11. Compliance with Laws: Enterprise shall comply with all federal, state, and local laws, regulations, ordinances, and statutes, including those of any state motor vehicle departments, department of insurance, and the Federal Odometer Act.

12. Insurance: CUSTOMER shall obtain and maintain in force at all times during the term of this Agreement and keep in place until each Vehicle is sold and title is transferred on each Vehicle, automobile third party liability of $1,000,000 per occurrence and physical damage coverage on all Vehicles. This insurance shall be written as a primary policy and not contributing with any insurance coverage or self-insurance applicable to Enterprise.

13. Term: This agreement is effective on the Execution Date and shall continue until such time as either party shall notify the other party with thirty (30) days prior written notice to terminate the Agreement with or without cause.

14. Modification: No modification, amendment or waiver of this Agreement or any of its provisions shall be binding unless in writing and duly signed by the parties hereto.

15. Entire Acreement: This Agreement constitutes the entire Agreement between the parties and supersedes all previous agreements, promises, representations, understandings, and negotiations, whether written or oral, with respect to the subject matter hereto.

16. Liability Limit: In the event Enterprise is responsible for any damage to a Vehicle, Enterprise's liability for damage to a Vehicle in its possession shall be limited to the lesser of: (1) the actual cost to repair the damage to such vehicle suffered while in Enterprise's possession; or (2) the negative impact to the salvage value of such vehicle. Enterprise shall not be liable for any other damages to a Vehicle of any kind, including but not limited to special, incidental, consequential or other damages.

17. Attorney's Fees: In the event that a party hereto institutes any action or proceeding to enforce the provisions of this Agreement, the prevailing party shall be entitled to receive from the losing party reasonable attorney's fees and costs for legal services rendered to the prevailing party.

18. Authorization: Each party represents and warrants to the other party that the person signing this Agreement on behalf of such party is duly authorized to bind such party.
"ENTERPRISE" "CUSTOMER"
Signature:

Printed Name:

Title
Date Sicned:

Signature:

Printed Name:

Title: