Cudahy City Council
January 17, 2023

City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2022
42 NOTE 11 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) Actuarial Assumptions
The total OPEB liability for the June 30, 2021 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

The following are the changes in assumptions and benefit terms of the Plan during measurement period ended June 30, 2022.

Discount Rate
The discount rate used to measure the total OPEB liability was 5.50% at June 30,2022 measurement date. The change in discount rate was a result of the City’s commitment to contribute $100,000 to the Plan in addition to retiree benefit payments which are payable from the City assets.

Inflation 2.50%
Aggregate salary increases of 2.75%
Individual salary increases based on CalPERS.

Discount rate 5.50% at June 30, 2022
Medicare: 4.6% for 2023, decreasing to an ultimate
rate of 3.75% in 2076
Non-Medicare: 6.5% for 2022, decreasing to an
ultimate rate of 3.75% in 2076
Dental and vision trend 2.75%
Mortality rates were based on CalPERS 2000-2019 Experience Study Contribution Policy
City contributes $100,000 per year in addition to
retiree benefit payments which are payable from City
assets.

Family Coverage at
Retirement
25% of future retirees cover non-spouse family
members until retiree age 65
Medical trend
Salary increases
Actuarial Assumption June 30, 2021 Measurement Date
Changes of Assumption * Discount rate was updated based on newer capital market assumptions * 25 basis point inflation rate decrease, which reduced the discount rate, medical trend, and salary scale
* Experience study updated to 2000-2019 CalPERS decrement tables * Decreased medical trend rate for Kaiser Senior Advantage * Mortality improvement scale was updated to Scale MP-2021 Changes of Benefit Terms None

City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2022
43 NOTE 11 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) Change in the Net OPEB Liability
Sensitivity of the total OPEB liability to changes in the discount rate The following presents the City’s Total OPEB liability if it were calculated using a discount rate that is 1% point lower (4.50%) or 1% point higher (6.50%) than the current rate:

Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates The following presents the City’s Total OPEB liability if it were calculated using a healthcare cost trend rate that is 1% point lower or 1% point higher than current rate:

Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability
Balance at June 30, 2021 $ 2,019,232 $ $ 359,673 1,659,559 Changes for the year:

Service cost 73,353 - 73,353
Interest on the total OPEB liability 121,345 - 121,345
Actual vs. expected experience 100,010 - 100,010
Changes in assumptions 86,669 - 86,669
Contribution - employer - 240,669 (240,669)
Net investment income - (46,070) 46,070
Benefit payments (140,317) (140,317) -
Administrative expenses - (2,454) 2,454
Net Changes 241,060 51,828 189,232
Balance at June 30, 2022 $ 2,260,292 $ $ 411,501 1,848,791 1% Decrease Current Rate 1% Increase

4.50% 5.50% 6.50%
Net OPEB liability $ 2,120,334 $ 1,848,791 $ 1,622,305
Discount Rate
1% Decrease Current Trend 1% Increase
Total OPEB liability $ 1,653,095 $ 1,848,791 $ 2,054,930 Healthcare Cost Trend Rate

City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2022
44 NOTE 11 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) OPEB Expense and Deferred Inflows and Outflows of Resources Related to OPEB
For the year ended June 30, 2022, the City recognized OPEB expense of $67,016. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as pension expense as follows:

NOTE 12 DEFERRED OUTFLOWS/INFLOWS OF RESOURCES
The deferred inflow of resources recognized in the governmental fund financial statements pertains to unavailable revenues which represent receivables that were not received within the availability period.

Refer to Note 10 for deferred outflows and inflows of resources related to pensions and Note 11 for deferred outflows and inflows of resources related to OPEB.

Deferred Outflows
of Resources
Deferred
Inflows of
Resources
Differences between actual and
expected experience $ 89,256 $ 185,814
Changes in assumprions 77,350 346,477
Net difference between projected and
actual earnings on plan investments 31,541 -
Employer contributions made
subsequent to the measurement date - -
$ 198,147 $ 532,291
Deferred
Year Ending Outflows/(Inflows)
June 30 of Resources
2023 $ (108,378)
2024 (108,207)
2025 (98,222)
2026 (28,258)
2027 (16,778)
Thereafter 25,699
Governmental
Funds Balance at
June 30, 2022
Deferred inflow of resources
Unavailable revenue - accounts receivable, grant reimbursements and Housing Authority receivables that were not received within the availability period and were not recognized as revenues $ 3,343,127

City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2022
45 NOTE 13 PRIOR PERIOD ADJUSTMENTS
The beginning fund balance of the General Fund, Measure R, Measure M, Proposition A and Proposition C Funds were restated to reflect the adjustments related to local return funds reported in Metro Transit Funds reported in June 30, 2021 financial statements.

Accordingly, the beginning net position of the governmental activities was restated as follows:

NOTE 14 SUCCESSOR AGENCY DISCLOSURES
The accompanying financial statements also include the Private-purpose Trust Fund for the Successor Agency to the City’s former Redevelopment Agency (Successor Agency). The City, as the Successor Agency, serves in a fiduciary capacity, as custodian for the assets and to wind down the affairs of the former Redevelopment Agency. Its assets are held in trust for the benefit of the taxing entities within the former Redevelopment Agency’s boundaries and as such, are not available for the use of the City.

In 2014, the State Controller’s Office ordered the transfer of assets from Cudahy Economic Development Corporation (CEDC) back to the Successor Agency. In 2015, the Board of Directors of CEDC and the Oversight Board to the Successor Agency approved the asset transfer agreement. The assets were returned to the Successor Agency with the recording of quit claim deeds on October 19, 2015. The accompanying financial statements of the Successor Agency as of and for the year ended June 30, 2022 reflect the transferred assets with a net book value of $15,296,169.

Disclosures related to assets and long-term liabilities of the Successor Agency are as follows:

General Fund Measure M Measure R Proposition A Proposition C Fund Balance, as previously reported $ 2,013,650 $ 1,249,857 $ 1,773,373 $ 775,823 $ 200,587 Adjustment to correct the balance
of expenditure in the Local Return
Funds in the prior year 436,834 (112,287) (229,035) (170,167) (129,087) Fund balance, as restated $ 2,450,484 $ 1,137,570 $ 1,544,338 $ 605,656 $ 71,500 Net position, beginning, as previously reported $ 26,848,676 Adjustment to correct the balance (203,742)
of expenditure in the Local Return
Funds in the prior year
Net postion, beginning, as restated $ 26,644,934

City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2022
46 NOTE 14 SUCCESSOR AGENCY DISCLOSURES (CONTINUED)
Rental and Other Accounts Receivable
At June 30, 2022, rental and other accounts receivable consisted of the following:

Capital Assets and Land Held for Development
At June 30, 2022, land and buildings are composed of the following:

Rental receivable $ 124,687
Less allowance for bad debts (124,687)
Net $ -
Site Reference Address APN Cost
$ 399,889
1,127,027
1,323,297
2,850,213
3,650,074
1,541,620
407,532
6,608,296
3,315,954
1,116,500
Total land and buildings $ 17,588,641
Land and buildings, cost $ 15,452,544
Less: Accumulated depreciation (2,292,472)
Land and buildings, net 13,160,072
* Land held for development $ 2,136,097
Santa Ana Street 4610 Santa Ana Street
6224-034-900,
-901, -902, -
8420 Atlantic Avenue
4819 Patata Street
Patata Industrial
Property
6224-018-912,
-913, -914, -
915
4720 Santa Ana Street
8110 Atlantic Avenue
8100 Atlantic Avenue
Santa Ana Street
& Atlantic Avenue
6226-022-906, 1,009,070
-910, 909, -
904, -911
7638 Atlantic Avenue
7644 Atlantic Avenue
7630 Atlantic Avenue
7660 Atlantic Avenue
4613 Clara Street
Atlantic Avenue &
Clara Street
2,904,717
1,096,864
Various

8221 Atlantic Avenue
4633 Cecilia Street
8135 Atlantic Avenue
4629 Cecilia Street
Atlantic Avenue &
Cecilia Street
Various 792,961
5256 Elizabeth Street
5260 Elizabeth Street
Elizabeth Street
Residential
2,219,090

City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2022
47 NOTE 14 SUCCESSOR AGENCY DISCLOSURES (CONTINUED)
Long-term Debt
Long-term liability activity of the successor agency for the year ended June 30, 2022 follows:

Note Payable
In 1986-1987, the Agency borrowed a total of $1,000,000 from a financial institution for costs associated with a development project (Parcel A). Payments are due in annual installments equal to the incremental difference between sales tax revenue from Parcel A as of the 1984-1985 tax year and sales tax revenues for each subsequent fiscal year. Sales tax incremental revenue from Parcel A is insufficient to make loan payments. The note is carried at $1,409,928.

Bonds Payable
Taxable Tax Allocation Refunding Bonds, Series 2018 (2018 Bonds) In September 2018, the Successor Agency to the Former Cudahy Community Development Commission issued the Taxable Tax Allocation Refunding Bonds, Series 2018 in the amount of $14,030,000 to (i) to currently refund certain obligations of the Cudahy Community Development Commission (the “Former Agency”) currently outstanding in the aggregate principal amount of $16,460,000, (ii) to purchase a municipal bond insurance policy (the “Policy”) with respect to certain 2018 Bonds; (iii) to purchase a municipal debt service reserve insurance policy for the 2018 Bonds (the “Reserve Policy”), and (iv) to pay certain costs of issuance of the 2018 Bonds.

Accordingly, the old debt was defeased and replaced by the new debt. The difference between the reacquisition price and the net carrying amount of the old debt of $1.8 million was reported as deferred loss on debt refunding and is being amortized as a component of interest expense over the remaining life of the new debt.

Interest on the 2018 Bonds which ranges from 2.8% to 3.8% is payable semiannually on April 1 and October 1 of each year, commencing April 1, 2019, until maturity. The Bonds are payable from the Pledged Tax Revenues deposited in the Redevelopment Property Tax Trust Fund and payable from amounts on deposit therein after payments of certain County of Los Angeles administrative costs and payments to certain taxing agencies.

Balance Balance Due Within
June 30, 2021 Additions Reductions June 30,2022 One Year Note payable $ 1,409,928 $ - $ - $ 1,409,928 $ -
2018 Series Tax Allocation
Refunding Bonds 11,265,000 - (1,450,000) 9,815,000 1,490,000 County deferral 1,277,487 63,875 - 1,341,362 -
Total $ 13,952,415 $ 63,874 $ (1,450,000) $ 12,566,289 $ 1,490,000

City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2022
48 NOTE 14 SUCCESSOR AGENCY DISCLOSURES (CONTINUED)
The 2018 Bonds are insured. In the event of default of the payment of the scheduled principal of or interest on the Insured Bonds when all or some becomes due, the Trustee on behalf of any owner of the Insured Bonds shall have a claim under the Policy for such payments.

The outstanding balance of the 2018 bonds as of June 30, 2022 was $9,815,000.

The following are future scheduled Annual Debt Service Requirements for the Tax Allocation Refunding Bonds, Series 2018:

Pledged Future Revenues
The City pledged future tax revenues associated with bond issuance for Series 2018 Tax Allocation Refunding Bonds. These debt issuance and pledged tax revenues are reported in the Private-Purpose Trust Fund (fiduciary funds). The pledged tax revenues are to be used solely for the repayment of principal and interest on the bonds until they are paid in full through 2027 and are not available for other purposes during the duration that the bonds are outstanding. The total principal and interest remaining is approximately $10,957,511. Management expects that pledged tax revenues will be sufficient to make future principal and interest payments on the bonds.

County Deferrals
The City, Agency and County entered into agreements whereby the County will defer tax increment generated within the project area to meet the Agency's debt service obligations. The outstanding balance accrues interest of five percent (5%) compounded annually and shall be repaid with the property tax revenues received by the Agency in excess of its debt service payment requirements. The County Deferral is recorded as tax revenue when earned and debt in the fiduciary funds.

Year ending
June 30 Principal Interest Total
2023 $ 1,490,000 $ 332,324 $ 1,822,324
2024 1,540,000 280,438 1,820,438
2025 1,590,000 225,147 1,815,147
2026 1,640,000 165,939 1,805,939
2027 1,700,000 103,149 1,803,149
2028 1,855,000 35,514 1,890,514
Total $ 9,815,000 $ 1,142,511 $ 10,957,511

City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2022
49 NOTE 15 GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB) STATEMENTS

ISSUED, NOT YET EFFECTIVE
The Governmental Accounting Standards Board (GASB) has issued several pronouncements, that have effective dates that may impact future financial presentations. Management has not yet determined any impact the implementation of the following statements may have on the financial statements of the City.

GASB No. 94
In May 2020, the Governmental Accounting Standards Board issued Statement No. 94, “Public-Private and Public-Public Partnerships and Availability Payment Arrangements.” The requirements of this Statement are effective for reporting periods beginning after June 15, 2022.

GASB No. 96
In May 2020, the Governmental Accounting Standards Board issued Statement No. 96, “Subscription-Based Information Technology Arrangements.” The requirements of this Statement are effective for reporting periods beginning after June 15, 2022.

GASB No. 97
In June 2020, the Governmental Accounting Standards Board issued Statement No. 97, “Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plan – an amendment of GASB Statements No. 14, 84, and a suppression of GASB Statement No. 32.” The requirements of this Statement are effective for reporting periods beginning after June 15, 2021.

GASB No. 99
In April 2022, the Governmental Accounting Standards Board issued Statement No. 99, “Omnibus 2022”. The requirements of this Statement are effective are effective as follow:
• The requirements related to extension of the use of LIBOR, accounting for Supplemental Nutrition Assistance Program (SNAP) distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging governments, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63 are effective upon issuance.
• The requirements related to leases, public-private and public-public partnerships (PPPs), and subscription-based information technology arrangement (SBITAs) are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter.
• The requirements related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement 53 are effective for fiscal years beginning after June 15, 2023, and all reporting periods thereafter.

GASB No. 100
In May 2022, the Governmental Accounting Standards Board issued Statement No. 100, “Accounting Changes and Error Corrections – An Amendment of GASB Statement No. 62.” The requirements of this Statement are effective for reporting periods beginning after June 15, 2023.

City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2022
50 NOTE 15 GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB) STATEMENTS

ISSUED, NOT YET EFFECTIVE (CONTINUED)
GASB No. 101
In May 2022, the Governmental Accounting Standards Board issued Statement No. 101, “Compensated Absences.” The requirements of this Statement are effective for reporting periods beginning after December 15, 2023.

NOTE 16 IMPACT OF CORONAVIRUS ON THE CITY’S OPERATIONS
In January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of an outbreak of a new strain of coronavirus (“COVID-19 outbreak”) and the risks that are posed to the international community as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in exposure globally.

The City’s operations are primarily dependent on the ability to collect property taxes and sales taxes. The COVID-19 outbreak may have a continued adverse impact on economic and market conditions, triggering a period of global economic slowdown.

This situation is expected to depress the tax bases and other areas in which the City receives revenue during the fiscal year 2021. The COVID-19 outbreak could also have other potential impacts, including disruptions or restrictions on employees’ ability to work. As such, this may hinder the ability of the City to meet the needs of its constituents The City cannot estimate the length or gravity of the impact of the COVID19 outbreak at this time; however, if the pandemic continues, it may have an effect on the City’s results of future operations and financial position in the fiscal year 2022.

NOTE 17 SUBSEQUENT EVENTS
The City has evaluated events subsequent to June 30, 2022 to assess the need for potential recognition or disclosure in the financial statements. Such events were evaluated through December 21, 2022, the date the financial statements were available to be issued. Based upon this evaluation, it was determined that, except for the matter described below, no other subsequent events occurred that require recognition or additional disclosure in the financial statements.

On October 7, 2022, the City issued $5.1 million in tax-exempt lease financing to finance the City-Wide Energy Efficiency Facilities Modernization Project. The interest rate at issuance is 4.9029% with semi-annual payments over 15 years.

City of Cudahy
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Year ended June 30, 2022
51 Variance
with Final
BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Taxes $ 3,350,300 $ 4,393,381 $ 1,043,081
Licenses and permits 2,692,000 2,126,586 (565,414)
Intergovernmental 2,863,248 3,116,744 253,496
Charges for services 276,000 526,369 250,369
Fines, forfeitures and penalties 86,500 296,800 210,300 Use of money and property 6,000 11,071 5,071
Other revenue 556,250 533,797 (22,453)
Total revenues 9,830,298 11,004,748 1,174,450
Expenditures
Current:

General government 4,150,710 4,191,730 (41,020)
Public safety 4,030,440 4,112,642 (82,202)
Community services 1,254,426 615,921 638,505
Community development 676,322 1,425,535 (749,213)
Total expenditures 10,111,898 10,345,828 (233,930)
Excess (deficiency) of revenues
over expenditures (281,600) 658,920 940,520
Other financing sources (uses)
Transfers in - 5,245,790 5,245,790
Transfers out - (712,196) (712,196)
Net other financing sources (uses) - 4,533,594 4,533,594 Change in fund balance (281,600) 5,192,514 5,474,114
Fund balance, beginning of year
as previously reported 2,013,650 2,013,650 -
Prior Period Adjustments 436,834 436,834 -
Fund balances, beginning of year,
as restated 2,450,484 2,450,484 -
Fund balance, end of year $ 2,168,884 $ 7,642,998 $ 5,474,114

City of Cudahy
American Rescue Plan Act (ARPA)
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Year ended June 30, 2022
52 Variance
with Final
BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Taxes $ - $ - $ -
Licenses and permits - - -
Intergovernmental - 4,975,288 4,975,288
Charges for services - - -
Fines, forfeitures and penalties - - -
Use of money and property - - -
Other revenue - - -
Total revenues - 4,975,288 4,975,288
Expenditures
Current:

General government - - -
Public safety - - -
Community services - - -
Community development - - -
Total expenditures - - -
Excess (deficiency) of revenues
over expenditures - 4,975,288 4,975,288
Other financing sources (uses)
Transfers in - - -
Transfers out - (4,975,288) (4,975,288)
Net other financing sources (uses) - (4,975,288) (4,975,288) Change in fund balance - - -
Fund balance, beginning of year - - -
Fund balance, end of year $ - $ - $ -

City of Cudahy
Housing Authority
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Year ended June 30, 2022
53 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Other revenue $ - $ $ - -
Total revenues - - -
Expenditures
Current:

Community development - - -
Total expenditures - - -
Excess (deficiency) of revenues
over expenditures - - -
Other financing sources
Transfer in - -
Other financing sources - - -
Change in fund balance - - -
Fund balance, beginning of year 1,782,945 1,782,945 -
Fund balance (deficit), end of year $ 1,782,945 $ 1,782,945 $ -

City of Cudahy
Schedule of Proportionate Share of the Net Pension Liability Last 10 Years*
54 Notes to Schedule
1 GASB Statement No. 68 defines covered-employee payroll as the total payroll of employees that are provided pensions through the pension plan.
2 The Plan’s proportionate share of aggregate employer contributions may not match the actual contributions made by the employer during the measurement period. The Plan’s proportionate share of aggregate employer contributions is based on the Plan’s proportion of fiduciary net position shown on line 5 of the table above as well as any additional side fund (or unfunded liability) contributions made by the City during the measurement period. * - Fiscal year 2014 was the 1st year of implementation, therefore only eight years are shown.

Measurement
Date
Measurement
Date
Measurement
Date
Measurement
Date
Measurement
Date
Measurement
Date
June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 Classic Second Tier PEPRA Classic Second Tier PEPRA
Proportion of the net pension liability (asset) 0.13398% 0.08932% 0.08993% 0.09081% 0.08980% 0.09058% 0.07024% 0.00051% 0.00017% 0.03347% 0.0001% 0.0000% Proportionate Share of the net pension liability (asset) $ 2,544,002 3,767,399 $ 3,601,385 $ 3,422,376 $ 3,539,977 $ 3,146,658 $ 2,626,208 $ $ 534 (757) $ 2,082,443 $ 4,983 $ 140 Covered payroll (1) $ 1,270,525 1,502,899 $ 1,368,001 $ 1,325,975 $ 1,179,459 $ 1,174,291 $ $ 463,703 $ 452,647 $ 257,941 $ 628,845 320,891 $ 88,443 Proportionate Share of the net pension liability (asset) as percentage of covered payroll 200% 251% 263% 258% 300% 268% 566% 0% 0% 331.15% 1.55% 0.16% Plan's Proportionate Share of the Fiduciary Net Position as 80.28% 70.07% 67.61% 70.91% 69.21% 68.73% 72.59% 99.23% 103.32% 79.87% 83.03% 83.05% a Percentage of the Plan's Total Pension Liability
Plan's Proportionate Share of Aggregate Employer Contributions (2)$ 407,362 $ 394,006 $ 357,579 $ 317,703 $ 301,113 $ 257,534 $ 127,356 $ 41,418 $ 18,506 $ 223,430 659 $ 19 Miscellaneous
Plan
Miscellaneous
Plan
June 30, 2015 June 30, 2014
Measurement Date Measurement Date
Miscellaneous Miscellaneous Plan Miscellaneous Plan
Plan
Miscellaneous
Plan
Miscellaneous
Plan
Miscellaneous
Plan

City of Cudahy
Schedule of Pension Contributions
Last 10 years*
55 * - Fiscal year 2015 was the 1st year of implementation, therefore only eight years are shown.

June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 Classic PEPRA Classic PEPRA
(actuarially determined) $ $ 145,192 $ 109,592 $ 112,357 $ 103,577 $ 101,829 91,846 $ 73,439 $ 14,443 $ 118,139 $ 12,145 Contributions in relation to the actuarially
determined contributions (145,192) (109,592) (112,357) (103,577) (101,829) (91,846) (73,439) (14,443) (118,139) (12,145) Contribution deficiency (excess) $ $ - $ - $ - $ - $ - - $ - $ - $ - $ - Covered payroll $ 1,613,163 $ 1,270,525 $ 1,502,899 $ 1,368,001 $ 1,325,975 $ 1,179,459 $ 916,350 $ 257,941 $ 949,736 $ 88,443 Contributions as a percentage of
covered payroll 9.00% 8.63% 7.48% 7.57% 7.68% 7.79% 8.01% 5.60% 12.44% 13.73% Notes to Schedule
Valuation date
Methods and assumptions used to determine contribution rates:

Actuarial Cost Method Entry-Age Normal Cost Method
Amortization method Level percentage of payroll, closed Remaining amortization period 15 years as of valuation date Asset valuation method 5-year smoothed market
Inflation
Salary increases Varies by entry age and age
Investment rate of return 7.15%, net of pension plan investment expense; includes inflation
Retirement age 57 yrs.

Mortality Rate Table Derived using CalPERS' membership data for all funds June 30, 2020

2.50%
Miscellaneous Plan Miscellaneous Plan
June 30, 2016 June 30, 2015
Miscellaneous
Plan
Contractually required contribution
Miscellaneous
Plan
Miscellaneous
Plan
Miscellaneous
Plan
Miscellaneous
Plan
Miscellaneous
Plan

City of Cudahy
Schedule of Changes in Net OPEB Liability and Related Ratios Last 10 years*
56 Fiscal Year Ending Fiscal Year Ending Fiscal Year Ending Fiscal Year Ending Fiscal Year Ending June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 Total Pension Liability
Service cost $ 73,353 71,216 $ 83,187 $ 118,228 $ 121,259 Interest on total OPEB liability 121,345 118,018 133,413 106,800 98,653 Changes in assumptions 86,669 - (58,153) (609,512) (101,442) Actual vs. expected experience 100,010 - (277,197) - -
Changes in benefit terms - - - - 441
Benefit payments, including refunds of employee contributions (140,317) (131,500) (120,236) (113,023) (110,633) Net change in total OPEB liability 241,060 57,734 (238,986) (497,507) 8,278 Total OPEB liability - beginning of year 2,019,232 1,961,498 2,200,484 2,697,991 2,689,713 Total OPEB liability - end of year (a) $ 2,260,292 2,019,232 $ 1,961,498 $ 2,200,484 $ 2,697,991 Plan Fiduciary Net Position
Net investment income $ (46,070) 51,049 $ 8,394 $ 1,149 $ - Contributions - employer 240,669 231,834 220,541 213,280 - Benefit payments, including refunds of employee contributions (140,317) (131,500) (120,236) (113,023) - Administrative expenses (2,454) (977) (581) (257) -
Net change in plan fiduciary net position 51,828 150,406 108,118 101,149 - Plan fiduciary net position - beginning of year 359,673 209,267 101,149 - - Plan fiduciary net position - end of year (b) $ 411,501 359,673 $ 209,267 $ 101,149 $ - Net OPEB liability - end of year (a)-(b) $ 1,848,791 1,659,559 $ 1,752,231 $ 2,099,335 $ 2,697,991 Plan fiduciary net position as a percentage of the total pension liability 18.21% 17.81% 10.67% 4.60% 0.00% Covered - employee payroll $ 1,613,163 1,502,899 $ 1,502,899 $ 1,368,001 $ 720,987 Total net OPEB liability as percentage of covered-employee payroll 114.61% 110.42% 116.59% 153.46% 374.21% * Fiscal year 2018 was the first year of implementation, therefore only five years are shown.

City of Cudahy
Schedule of OPEB Contributions
Last 10 years**
57 In 2022, the City committed to contributing $100,000 to the Plan annually. Below table shows the City’s contribution to the Plan based on actuarially determined contribution:

June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 Actuarially determined contribution * $ 209,797 $ 203,407 $ 197,212 $ 113,023 110,633 Contributions in relation to the actuarially
determined contributions (240,669) (231,834) (220,541) (213,280) (110,633) Contribution deficiency (excess) $ (30,872) $ (28,427) (23,329) $ (100,257) $ - Covered payroll $ 1,613,163 1,270,525 $ 1,502,899 $ 1,368,001 $ 720,897 Contributions as a percentage of
covered payroll 14.92% 18.25% 14.67% 15.59% 15.34%
* Calculated based on annual required benefit payments. **Fiscal year 2018 was the first year of implementation, therefore only five years are shown.

THIS PAGE INTENTIONALLY LEFT BLANK

City of Cudahy
Description of Nonmajor Special Revenue Funds
June 30, 2022
58 SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to be expended for specific purposes.

Prop 1B Local Street
Improvements
Prop 1B came from bond proceeds issued to fund
maintenance and improvement of local streets and roads.

Proposition A To account for revenues and expenditures for projects from a voter-approved sales tax override for public
transportation purposes.

Proposition C To account for financial transactions in accordance with Proposition C of the Local Transit Assistance Act.

Measure M To account for revenues and expenditures for Measure M Local Return money from LACMTA that are restricted for
specific use.

Measure R To account for revenues and expenditures for projects from a voter-approved sales tax measure (Measure R) for public transportation purposes.

Measure W To account for the Measure W Funds and expenditure allowable under the Measure W – Safe, Clean Water
Program
Air Quality Improvement
(AQMD)
To account for the additional vehicle registration fees received from Southern California Air Quality Management District in accordance with AB 2766, as authorized by the California Clean Air Act of 1988.

Recycling Conservation Grants To account for revenue and expenditure pertaining to recycling grants.

COPS To account for financial transactions in accordance with grant requirements from the California Office of Criminal Justice.

County Park Bond To account for projects and grants funded by the County Park Bond Act.

TDA – Transportation
Development
To account for funds received from the Transportation
Development Authority for transport projects.

Street Lighting To account for revenues and costs associated with the City’s street lighting program.

City of Cudahy
Description of Nonmajor Special Revenue Funds (Continued) June 30, 2022
59 SPECIAL REVENUE FUNDS (CONTINUED)
Cal Home To account for transactions funded by the Cal Home program.

Development Impact Fees To account for monies received from developers restricted to finance the acquisition and develop new parkland space. These monies are restricted under the Quimby Act by ordinance and require the dedication of land or impose a requirement of the payment of fee in lieu.

Surface Transportation
Program Local (STPL)
To account for Federal, state, and local Surface Transportation Program funds received from Los Angeles County Metropolitan Transportation Authority for transportation related projects.

Other Grants To account for State Grants relating to future development in the City including transportation related projects.

State Gas Tax This fund accounts for gas tax revenue received from the State of California to cover costs of street maintenance and
improvements.

Community Development
Block Grant (CDBG)
Accounts for expenses of the Community Development Block Grant received through the County of Los Angeles.

City of Cudahy
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2022
60 Prop 1B
Local Street
Improvements Proposition A Proposition C
Cash and investments $ $ 281 1,318,068 $ 700,824
Accounts receivable - - -
Grants receivable - - -
Notes receivable - - -
Interest receivable - 2,674 964
Total assets $ $ 281 1,320,742 $ 701,788
Accounts payable $ $ - $ 345,570 26,434
Due to other funds - 90,909 97,464
Due to other governments - - -
Total liabilities - 436,479 123,898
Unavailable revenue - - -
Restricted:

Special revenue funds 281 884,264 577,890
- - -
281 884,264 577,890
Total liabilities and fund balances $ $ 281 1,320,742 $ 701,788 ASSETS

LIABILITIES
FUND BALANCES (DEFICIT):

Unassigned
Total fund balances (deficit)

DEFERRED INFLOWS OF RESOURCES
Special Revenue

City of Cudahy
Nonmajor Governmental Funds
Combining Balance Sheet (Continued)
June 30, 2022
61 Recycling
Conservation
Measure M Measure R Measure W AQMD Grants COPS
$ 1,559,928 $ 1,683,394 $ 324,073 $ $ 121,427 23,541 $ 170,961 - - - 7,591 - -
- - - - - -
- - - - - -
3,543 4,549 376 - - -
$ 1,563,471 $ 1,687,943 $ $ 324,449 $ 129,018 23,541 170,961 $ 50,268 $ $ 5,327 $ - $ - $ - 20,000
72,982 109,420 - - - -
- - - - - -
123,250 114,747 - - - 20,000
- - - - - -
1,440,221 1,573,196 324,449 129,018 23,541 150,961
- - - - - -
1,440,221 1,573,196 324,449 129,018 23,541 150,961
$ 1,563,471 $ 1,687,943 $ $ 324,449 $ 129,018 23,541 $ 170,961 Special Revenue

City of Cudahy
Nonmajor Governmental Funds
Combining Balance Sheet (Continued)
June 30, 2022
62 TDA -
County Park Transportation Street
Bond Development Lighting Cal Home
Cash and investments $ 29,412 $ $ - $ - 115,894
Accounts receivable - 17,051 - -
Grants receivable - - - -
Notes receivable - - - 151,000
Interest receivable - - - 75,106
Total assets $ 29,412 $ 17,051 $ $ - 342,000
Accounts payable $ - $ 17,051 $ 12,789 $ -
Due to other funds - - 94,244 -
Due to other governments - - - 225,806
Total liabilities - 17,051 107,033 225,806
Unavailable revenue - - - -
Restricted:

Special revenue funds 29,412 - - 116,194
- - (107,033) -
29,412 - (107,033) 116,194
$ 29,412 $ 17,051 $ $ - 342,000
Unassigned
Total fund balances (deficit)
Special Revenue

City of Cudahy
Nonmajor Governmental Funds
Combining Balance Sheet (Continued)
June 30, 2022
63 Total
Development Surface Nonmajor
Impact Transportation Other State Governmental
Fees Program Local Grants Gas Tax CDBG Funds
$ 70,328 $ $ 836,720 $ - 1,267,172 $ 504,457 $ 8,726,480 - - 530,353 176,369 - 731,364
- - - - 152,754 152,754
- - - - 227,195 378,195
163 - - 2,992 24,700 115,067
$ 70,491 $ $ 836,720 $ 530,353 1,446,533 $ $ 909,106 10,103,860 $ $ - $ 644 59,602 $ 35,152 $ 18,000 $ 590,836
- - 340,585 - - 805,604
- - - - 254,264 480,070
- 644 400,187 35,152 272,264 1,876,510
- - - - - -
70,491 836,076 130,166 1,411,381 636,842 8,334,383
- - - - - (107,033)
70,491 836,076 130,166 1,411,381 636,842 8,227,350
$ 70,491 $ $ 836,720 $ 530,353 1,446,533 $ $ 909,106 10,103,860 Special Revenue

City of Cudahy
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances
Year Ended June 30, 2022
64 Prop 1B
Local Street
Improvements Proposition A Proposition C
Revenues:

Taxes $ - $ - $ -
Intergovernmental 148 610,416 506,327
Charges for services - - 1,965
Use of money and property 69 4,941 1,918
Other revenue - - -
Total revenues 217 615,357 510,210
Expenditures:

Current:

General government - - -
Public safety - - -
Community development - - -
Community services - 336,749 3,820
Capital outlay - - -
Total expenditures - 336,749 3,820
Excess (deficiency) of revenues
over expenditures 217 278,608 506,390
Other financing sources (uses):

Transfers in - - -
Transfers out - - -
Net other financing sources (uses) - - -
Change in fund balance 217 278,608 506,390
Fund balances, beginning of year,
as previously reported 64 775,823 200,587
Prior Period Adjustments - (170,167) (129,087)
Fund balances, beginning of year,
as restated 64 605,656 71,500
Fund balances, end of year $ 281 $ 884,264 $ 577,890
Special Revenue

City of Cudahy
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances (Continued)
Year Ended June 30, 2022
65 Recycling
Conservation
Measure M Measure R Measure W AQMD Grants COPS
$ 429,656 $ $ - - $ - $ - $ -
- 379,685 162,331 30,608 - 101,254
- - - - -
6,868 9,175 571 145 40 234
- - - - - -
436,524 388,860 162,902 30,753 40 101,488
1,575 34,717 - - - -
- - - - - 120,000
24,208 72,000 - 15,076 - -
108,090 223,200 - - - -
- 30,085 - - - -
133,873 360,002 - 15,076 - 120,000
302,651 28,858 162,902 15,677 40 (18,512)
- - 161,547 - - -
- - - - (9) -
- - 161,547 - (9) -
302,651 28,858 324,449 15,677 31 (18,512)
1,249,857 1,773,373 - 113,341 23,510 169,473
(112,287) (229,035) - - - -
1,137,570 1,544,338 - 113,341 23,510 169,473
$ 1,440,221 $ 1,573,196 $ 324,449 $ 129,018 $ 23,541 $ 150,961 Special Revenue

City of Cudahy
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances (Continued)
Year Ended June 30, 2022
66 TDA -
County Park Transportation Street
Bond Development Lighting Cal Home
Revenues:

Taxes $ - $ $ - 67,144 $ -
Intergovernmental - 17,051 - -
Charges for services - - - -
Use of money and property 40 - - 157
Other revenue - - - -
40 17,051 67,144 157
Expenditures:

Current:

General government - - - -
Public safety - - - -
Community development - - - -
Community services - 172,466 -
Capital outlay - 17,051 - -
- 17,051 172,466 -
40 - (105,322) 157
Other financing sources (uses):

Transfers in - - 51,928 -
Transfers out - - (45,620) -
- - 6,308 -
40 - (99,014) 157
Fund balances, beginning of year,
as previously reported 29,372 - (8,019) 116,037
Prior Period Adjustments - - - -
Fund balances, beginning of year,
as restated 29,372 - (8,019) 116,037
Fund balances, end of year $ 29,412 $ $ - (107,033) $ 116,194 Change in fund balance
Total revenues
Total expenditures
Excess (deficiency) of revenues
over expenditures
Net other financing sources (uses)
Special Revenue

City of Cudahy
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances (Continued)
Year Ended June 30, 2022
67 Total
Development Surface Nonmajor
Impact Transportation Other State Governmental
Fees Program Local Grants Gas Tax CDBG Funds
$ $ - $ - $ - $ - $ - 496,800
- - 273,328 1,090,179 294,672 3,465,999
- - - - 1,965
342 1,144 - 5,861 - 31,505
- - 258,831 - (569) 258,262
342 1,144 532,159 1,096,040 294,103 4,254,531
- - - - - 36,292
- - - - - 120,000
- - 441,983 - 294,064 847,331
- - - 717,315 - 1,561,640
- 10,181 37,085 - - 94,402
- 10,181 479,068 717,315 294,064 2,659,665
342 (9,037) 53,091 378,725 39 1,594,866
- - 166,019 956,331 10,275 1,346,100
- - - (956,531) (8,304) (1,010,464)
- - 166,019 (200) 1,971 335,636
342 (9,037) 219,110 378,525 2,010 1,930,502
70,149 845,113 (88,944) 1,032,856 634,832 6,937,424
- - - - - (640,576)
70,149 845,113 (88,944) 1,032,856 634,832 6,296,848
$ 70,491 $ $ 836,076 $ 130,166 1,411,381 $ $ 636,842 8,227,350 Special Revenue

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Prop 1B Local Street Improvements Fund
Year ended June 30, 2022
68 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ - $ 148 $ 148
Use of money and property - 69 69
- 217 217
Change in fund balance - 217 217
Fund balance, beginning of year 64 64 -
Fund balance, end of year $ $ 64 $ 281 217
Total revenues

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Proposition A Fund
Year ended June 30, 2022
69 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ $ 435,938 610,416 $ 174,478
Use of money and property 1,000 4,941 3,941
Total revenues 436,938 615,357 178,419
Expenditures
Current:

Community services - 336,749 (336,749)
Total expenditures - 336,749 (336,749)
Excess (deficiency) of revenues
over expenditures 436,938 278,608 (158,330)
Other financing sources (uses)
Transfer in - - -
Transfer out - - -
Net other financing sources (uses) - - -
Change in fund balance 436,938 278,608 (158,330)
Fund balance, beginning of year
as previously reported 775,823 775,823 -
Prior Period Adjustments (170,167) (170,167) -
Fund balances, beginning of year
as restated 605,656 605,656 -
Fund balance, end of year $ 1,042,594 $ $ 884,264 (158,330)

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Proposition C Fund
Year ended June 30, 2022
70 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ 435,498 $ 506,327 $ 70,829
Charges for services 25,000 1,965 (23,035)
Use of money and property 350 1,918 1,568
460,848 510,210 49,362
Expenditures
Current:

Community services 55,000 3,820 51,180
55,000 3,820 51,180
405,848 506,390 100,542
Other financing sources (uses)
Transfers in - - -
Transfers out - - -
Net other financing sources (uses) - - -
Change in fund balance 405,848 506,390 100,542
Fund balance, beginning of year
as previously reported 200,587 200,587 -
Prior Period Adjustments (129,087) (129,087) -
Fund balances, beginning of year
as restated 71,500 71,500 -
Fund balance, end of year $ 477,348 $ 577,890 $ 100,542 over expenditures
Total revenues
Total expenditures
Excess (deficiency) of revenues

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Measure M Fund
Year ended June 30, 2022
71 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Taxes $ - $ 429,656 $ 429,656
Use of money and property - 6,868 6,868
- 436,524 436,524
Expenditures
Current:

General government - 1,575 (1,575)
Community development - 24,208 (24,208)
Community services 140,000 108,090 31,910
140,000 133,873 6,127
(140,000) 302,651 442,651
Other financing sources (uses)
Transfers in - - -
Net other financing sources (uses) - - -
Change in fund balance (140,000) 302,651 442,651
Fund balance, beginning of year
as previously reported 1,249,857 1,249,857 -
Prior Period Adjustments (112,287) (112,287) -
Fund balances, beginning of year
as restated 1,137,570 1,137,570 -
Fund balance, end of year $ 997,570 $ 1,440,221 $ 442,651 Total revenues
Total expenditures
Excess (deficiency) of revenues
over expenditures

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Measure R Fund
Year ended June 30, 2022
72 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ 271,209 $ $ 379,685 108,476
Use of money and property 1,000 9,175 8,175
Total revenues 272,209 388,860 116,651
Expenditures
Current:

General government - 34,717 (34,717)
Community development - 72,000 (72,000)
Community services - 223,200 (223,200)
Capital outlay 36,320 30,085 6,235
Total expenditures 36,320 360,002 (323,682)
Excess (deficiency) of revenues
over expenditures 235,889 28,858 (207,031)
Other financing sources (uses)
Transfers in - - -
Transfers out - - -
Net other financing sources (uses) - - -
Change in fund balance 235,889 28,858 (207,031)
Fund balance, beginning of year
as previously reported 1,773,373 1,773,373 -
Prior Period Adjustments (229,035) (229,035) -
Fund balances, beginning of year
as restated 1,544,338 1,544,338 -
Fund balance (deficit), end of year $ 1,780,227 $ 1,573,196 $ (207,031)

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Measure W Fund
Year ended June 30, 2022
73 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ - $ $ 162,331 162,331
Use of money and property - 571 571
Total revenues - 162,902 162,902
Excess (deficiency) of revenues
over expenditures - 162,902 162,902
Other financing sources (uses)
Transfers in - 161,547 161,547
Net other financing sources (uses) - 161,547 161,547
Change in fund balance - 324,449 324,449
Fund balance, beginning of year - - -
Fund balance (deficit), end of year $ - $ 324,449 $ 324,449

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Air Quality Improvement (AQMD) Fund
Year ended June 30, 2022
74 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ 25,900 $ $ 30,608 4,708
Use of money and property 100 145 45
26,000 30,753 4,753
Expenditures
Current:

Community development 110,900 15,076 95,824
110,900 15,076 95,824
(84,900) 15,677 100,577
Other financing sources (uses)
Transfers in - - -
Net other financing sources (uses) - - -
Change in fund balance (84,900) 15,677 100,577
Fund balance, beginning of year 113,341 113,341 -
Fund balance (deficit), end of year $ 28,441 $ $ 129,018 100,577 over expenditures
Total expenditures
Excess (deficiency) of revenues
Total revenues

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Recycling Conservation Grants Fund
Year ended June 30, 2022
75 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Use of money and property $ $ - 40 $ 40
- 40 40
- 40 40
Other financing sources (uses)
Transfers out - (9) (9)
Net other financing sources (uses) - (9) (9)
Change in fund balance - 31 31
Fund balance, beginning of year 23,510 23,510 -
Fund balance, end of year $ 23,510 $ 23,541 $ 31
Total revenues
Excess (deficiency) of revenues
over expenditures

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Community Oriented Policing Services (COPS) Grant Fund
Year ended June 30, 2022
76 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ 100,000 $ 101,254 $ 1,254
Use of money and property - 234 234
Total revenues 100,000 101,488 1,488
Expenditures
Current:

Public safety 100,000 120,000 (20,000)
Total expenditures 100,000 120,000 (20,000)
Excess (deficiency) of revenues
over expenditures - (18,512) (18,512)
Change in fund balance - (18,512) (18,512)
Fund balance, beginning of year 169,473 169,473 -
Fund balance (deficit), end of year $ 169,473 $ 150,961 $ (18,512)

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual County Park Bond Fund
Year ended June 30, 2022
77 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Use of money and property $ - $ 40 $ 40
Total revenues - 40 40
Excess (deficiency) of revenues
over expenditures - 40 40
Change in fund balance - 40 40
Fund balance, beginning of year 29,372 29,372 -
Fund balance (deficit), end of year $ 29,372 $ 29,412 $ 40

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual TDA – Transportation Development Fund
Year ended June 30, 2022
78 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ 66,278 $ $ 17,051 (49,227)
Total revenues 66,278 17,051 (49,227)
Expenditures
Capital outlays - 17,051 (17,051)
Total expenditures - 17,051 (17,051)
Excess (deficiency) of revenues
over expenditures 66,278 - (66,278)
Change in fund balance 66,278 - (66,278)
Fund balance, beginning of year - - -
Fund balance (deficit), end of year $ 66,278 $ - $ (66,278)

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Street Lighting Fund
Year ended June 30, 2022
79 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Taxes $ 82,356 $ 67,144 $ (15,212)
Total revenues 82,356 67,144 (15,212)
Expenditures
Current:

Community services 82,356 172,466 (90,110)
Total expenditures 82,356 172,466 (90,110)
Excess (deficiency) of revenues
over expenditures - (105,322) (105,322)
Other financing sources (uses)
Transfers in - 51,928 51,928
Transfers out - (45,620) (45,620)
Net other financing sources (uses) - 6,308 6,308
Change in fund balance - (99,014) (99,014)
Fund balance, beginning of year (8,019) (8,019) -
Fund balance (deficit), end of year $ (8,019) $ (107,033) $ (99,014)

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Cal Home Fund
Year ended June 30, 2022
80 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Use of money and property $ - $ 157 $ 157
Total revenues - 157 157
Excess (deficiency) of revenues
over expenditures - 157 157
Change in fund balance - 157 157
Fund balance, beginning of year 116,037 116,037 -
Fund balance, end of year $ 116,037 $ 116,194 $ 157

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Development Impact Fees
Year ended June 30, 2022
81 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Use of money and property $ $ - 342 $ 342
Total Revenues - 342 342
Excess (deficiency) of revenues
over expenditures - 342 342
Change in fund balance - 342 342
Fund balance, beginning of year 70,149 70,149 -
Fund balance (deficit), end of year $ 70,149 $ 70,491 $ 342

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Surface Transportation Program Local (STPL) Fund
Year ended June 30, 2022
82 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Use of money and property $ - $ 1,144 $ 1,144
Total revenues - 1,144 1,144
Expenditures
Capital outlay 357,629 10,181 347,448
Total Expenditures 357,629 10,181 347,448
Excess (deficiency) of revenues
over expenditures (357,629) (9,037) 348,592
Change in fund balance (357,629) (9,037) 348,592
Fund balance, beginning of year 845,113 845,113 -
Fund balance, end of year $ 487,484 $ 836,076 $ 348,592

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Other Grants Fund
Year ended June 30, 2022
83 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Intergovernmental $ 1,074,000 $ 273,328 $ (800,672)
Other revenue 2,134,449 258,831 (1,875,618)
Total revenues 3,208,449 532,159 (2,676,290)
Expenditures
Current:

Community development 1,384,000 441,983 942,017
Capital outlay - 37,085 (37,085)
Total expenditures 1,384,000 479,068 904,932
Excess (deficiency) of revenues
over expenditures 1,824,449 53,091 (1,771,358)
Other financing sources (uses)
Transfer in - 166,019 166,019
Net other financing sources (uses) - 166,019 166,019
Change in fund balance 1,824,449 219,110 (1,605,339)
Fund deficit, beginning of year (88,944) (88,944) -
Fund balance (deficit), end of year $ 1,735,505 $ 130,166 $ (1,605,339) Revenues

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual State Gas Tax
Year ended June 30, 2022
84 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ 539,726 $ 1,090,179 $ 550,453
Use of money and property - 5,861 5,861
Total revenues 539,726 1,096,040 556,314
Expenditures
Current:

Community services 604,593 717,315 (112,722)
Total expenditures 604,593 717,315 (112,722)
Excess (deficiency) of revenues
over expenditures (64,867) 378,725 443,592
Other financing sources (uses)
Transfer in - 956,331 956,331
Transfer out - (956,531) (956,531)
Net other financing sources (uses) - (200) (200)
Change in fund balance (64,867) 378,525 443,392
Fund balance, beginning of year 1,032,856 1,032,856 -
Fund balance (deficit), end of year $ 967,989 $ 1,411,381 $ 443,392

City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Community Development Block Grant (CDBG)
Year ended June 30, 2022
85 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ 684,939 $ 294,672 $ (390,267)
Other revenue - (569) (569)
Total revenues 684,939 294,103 (390,836)
Expenditures
Current:

Community development 540,968 294,064 246,904
Total expenditures 540,968 294,064 246,904
Excess (deficiency) of revenues
over expenditures 143,971 39 (143,932)
Other financing sources (uses)
Transfer in - 10,275 10,275
Transfer out - (8,304) (8,304)
Net other financing sources (uses) - 1,971 1,971
Change in fund balance 143,971 2,010 (141,961)
Fund balance, beginning of year 634,832 634,832 -
Fund balance (deficit), end of year $ 778,803 $ 636,842 $ (141,961)

THIS PAGE INTENTIONALLY LEFT BLANK

The Auditor’s Communication with Those Charged with Governance Pursuant to Statement on Auditing Standards 114
City of Cudahy, California
Year Ended June 30, 2022
Attachment 2 Page 209 of 473
December 21, 2022
The Honorable Mayor and the Members of the City Council City of Cudahy, California
5220 Santa Ana Street
Cudahy, CA 90201
Dear Ladies and Gentlemen:

We are pleased to present this report related to our audit of the financial statements of the City of Cudahy (the City) as of and for the year ended June 30, 2022. This report summarizes certain matters required by professional standards to be communicated to you in your oversight responsibility for the City’s financial reporting process.

This report is intended solely for the information and use of the City Council and management and is not intended to be, and should not be, used by anyone other than these specified parties. It will be our pleasure to respond to any questions you have about this report. We appreciate the opportunity to continue to be of service to the City.

Very truly yours,

VASQUEZ & COMPANY, LLP
Cristy A. Canieda
Partner

TABLE OF CONTENTS
PAGE
Required Communications 1
Summary of Accounting Estimates 3
Summary of Recorded Audit Adjustments 4
Significant Written Communications Between Management and Our Firm Exhibit A - Management Representation Letter 5
Exhibit B - Letter of Comment to Management 14

1 REQUIRED COMMUNICATIONS
Generally accepted auditing standards (AU-C 260, The Auditor’s Communication With Those Charged With Governance) require the auditor to promote effective two-way communication between the auditor and those charged with governance. Consistent with this requirement, the following summarizes our responsibilities regarding the financial statement audit as well as observations arising from our audit that are significant and relevant to your responsibility to oversee the financial reporting process.

Our Responsibilities with regards to the Financial Statement Audit Our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards issued by the Comptroller General of the United States have been described to you in our arrangement letter dated August 19, 2022. Our audit of the financial statements does not relieve management or those charged with governance of their responsibilities, which are also described in that letter.

Overview of the Planned Scope and Timing of the Financial Statement Audit We have issued a separate communication dated August 19, 2022 regarding the planned scope and timing of our audit and have discussed with you our identification of, and planned audit response, to significant risks of material misstatement.

Accounting Policies and Practices
Adoption of, or Change in, Accounting Policies
Management has the ultimate responsibility for the appropriateness of the accounting policies used by the City. The significant accounting policies used by the City are described in Note 2 to the financial statements. The implementation of Statement No. 87 of the Governmental Accounting Standards Board – Leases did not have an impact on the City’s financial statements.

Significant Accounting Policies
We did not identify any significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Unusual Transactions
We did not identify any significant unusual transactions.

Management’s Judgments and Accounting Estimates
Summary information about the process used by management in formulating particularly sensitive accounting estimates and about our conclusions regarding the reasonableness of those estimates is in the attached Summary of Significant Accounting Estimates.

Audit Adjustments and Uncorrected Misstatement
Audit adjustments proposed by us and recorded by the District are shown in the attached Summary of Recorded Audit Adjustments.

We are not aware of any uncorrected misstatements other than misstatements that are clearly trivial.

2 Observations About the Audit Process
Disagreements with Management
We encountered no disagreements with management over the application of significant accounting principles, the basis for management’s judgments on any significant matters, the scope of the audit, or significant disclosures to be included in the financial statements.

Consultations with Other Accountants
We are not aware of any consultations management had with other accountants about accounting or auditing matters.

Significant Issues Discussed With Management
No significant issues arising from the audit were discussed or were the subject of correspondence with management
Significant Difficulties Encountered in Performing the Audit We did not encounter any significant difficulties in dealing with management during the audit.

Difficult or Contentious Matters That Required Consultation We did not encounter any significant and difficult or contentious matters that required consultation outside the engagement team.

Significant Written Communications Between Management and Our Firm The most significant written communications between our firm and management were the Management Representation Letter and the Letter of Comments to Management attached as Exhibits A and B, respectively.

3 SUMMARY OF ACCOUNTING ESTIMATES
Accounting estimates are an integral part of the preparation of financial statements and are based upon management’s current judgment. The process used by management encompasses their knowledge and experience about past and current events, and certain assumptions about future events. The following describes the significant accounting estimates reflected in the City’s June 30, 2022 financial statements. • The estimated useful lives of the City’s capital assets were based on management’s best estimate and prevailing practices in the local government sector. • Net pension/ other post-employment benefits (OPEB) liabilities were actuarially calculated based on certain assumptions disclosed in Notes 10 and 11 to the financial statements. • The City’s net pension liability is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the PERS Plans is measured as of June 30, 2021, using an annual actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures.
• The City’s total OPEB liability was measured as of June 30, 2022 and the OPEB liability used to calculate the total OPEB liability was determined by an actuarial valuation as of June 30, 2022. • Claims liabilities are estimated when a loss has occurred, and the amount of the loss can be reasonably estimated. Liabilities also include an amount for claims that have been incurred, but not reported as of the end of the year.
• Estimated fair values for investments are obtained from quoted market prices where available. • Collectability of accounts receivables and provision for uncollectible accounts are based on management’s estimates and historical experience.

4 1 6/30/2022 Deposit for General Insurance 001.1301.000 GF01 5006 (19,714) 1 6/30/2022 Deposit for Worker's Comp Ins 001.1302.000 GF01 5006 12,015 1 6/30/2022 Workers Compensation Insurance 001.4020.6490.000 GF01 5006 7,698 To adjust balance based on
confirmation replies.

Number Date Name Account No Credit Recurrence Misstatement Reference
Annotation Debit

SUMMARY OF RECORDED AUDIT ADJUSTMENTS

Significant Written Communications Between
Management and Our Firm

Page | 1

5220 Santa Ana Street
Cudahy, CA, 90201
Phone: (323) 773-5143
Fax: (323) 771-2072
www.cityofcudahy.com
Mayor
Elizabeth Alcantar
Vice Mayor
Jose R. Gonzalez
Councilmember
Jack M. Guerrero
Councilmember
Blanca Lozoya
Councilmember
Daisy Lomeli
City Manager
Alfonso Noyola, ICMA-CM
Incorporated November 10, 1960
December 21, 2022
Vasquez & Company LLP
655 N. Central Avenue, Suite 1550
Glendale, CA 91203
This representation letter is provided in connection with your audit of the financial statements of the City of Cudahy (the City), which comprise the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information as of June 30, 2022, and the respective changes in financial position and the related notes to the financial statements, for the purpose of expressing an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).

We confirm, to the best of our knowledge and belief, that as of December 21, 2022:

Financial Statements
1) We have fulfilled our responsibilities, as set out in the terms of the audit arrangement letter dated August 19, 2022, including our responsibility for the preparation and fair presentation of the financial statements referred to above in accordance with U.S. GAAP and for the preparation of the supplementary information in accordance with the applicable criteria.
2) We acknowledge our responsibility 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. 3) We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud.
4) The methods, data, and significant assumptions used by us in making accounting estimates and their related disclosures, including those measured at fair value, are appropriate to achieve recognition, measurement, or disclosure that is reasonable in the Exhibit A - Management Representation Letter 5

Page | 2
context of U.S. GAAP, and reflect our judgment based on our knowledge and experience about past and current events, and our assumptions about conditions we expect to exist and courses of action we expect to take.
5) The methods, assumptions, and data used to measure accounting estimates are as follows, and result in an estimate that is appropriate for financial statement measurement and disclosure purposes and have been consistently selected and applied in making the estimate:
(1) investment’s fair market value was obtained from the fiscal agent and the California State Treasurer based on observable inputs and amortized cost, (2) the City’s accounts receivables are stated at the amount collectible based on the results of the City’s evaluation, and (4) the estimated useful lives of the City’s capital assets were based on management’s best estimate and prevailing practices in the local government sector. Significant judgments made in making the estimate have taken into account all relevant information of which we are aware. The assumptions listed above properly reflect our intent and ability to carry out the specific courses of action previously communicated to you on behalf of the City. All disclosures related to the estimate, including disclosures describing estimation uncertainty, are complete and reasonable in the context of U.S. GAAP. No subsequent events have occurred that would require adjustment to the estimate and related disclosures included in the financial statements. 6) Related-party relationships and transactions including interfund transactions, transfers and advances have been recorded in accordance with the economic substance of the transaction and appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP.
7) The financial statements properly classify all funds and activities in accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, as amended.
8) The financial statements include all fiduciary activities required by GASB Statement No. 84, Fiduciary Activities, as amended.
9) All events subsequent to the date of the financial statements, and for which U.S. GAAP requires adjustment or disclosure, have been adjusted or disclosed. 10) The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP.
11) Management has followed applicable laws and regulations in adopting, approving and amending budgets.

Exhibit A - Management Representation Letter 6

Page | 3
12) Risk disclosures associated with deposit and investment securities are presented in accordance with GASB requirements.
13) Investments are properly valued.
14) Capital assets, including infrastructure, intangible assets, and right of use assets are properly capitalized, reported and, if applicable, depreciated. 15) Components of net position (net investment in capital assets, restricted, and unrestricted) and classifications of fund balance (nonspendable, restricted, committed, assigned, and unassigned) are properly classified and, if applicable, approved. 16) We have appropriately disclosed the City's policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position is available and have determined that net position is properly recognized under the policy.
17) Revenues are appropriately classified in the statement of activities within program revenues and general revenues.
18) Expenses have been appropriately classified in or allocated to functions and programs in the statement of activities, and allocations have been made on a reasonable basis. 19) Interfund, internal, and intra-entity activity and balances have been appropriately classified and reported.
20) We have no direct or indirect legal or moral obligation for any debt of any organization, public or private, that is not disclosed in the financial statements.

21) We have complied with all aspects of laws, regulations and provisions of contracts and agreements that would have a material effect on the financial statements in the event of noncompliance. In connection therewith, we specifically represent that we are responsible for determining that we are not subject to the requirements of the Single Audit Act because we have not received, expended or otherwise been the beneficiary of the required amount of federal awards during the period of this audit.
22) We have no knowledge of any uncorrected misstatements in the financial statements.

Exhibit A - Management Representation Letter 7

Page | 4
23) We have reviewed the GASB Statement No. 87, Leases, effective for the fiscal year ending June 30, 2022, and concluded the implementation of the Statement did not have a material impact on the basic financial statements.
24) We have no knowledge of any uncorrected misstatements in the financial statements.

Information Provided
25) We have provided you with:
a. Access to all information of which we are aware that is relevant to the preparation and fair presentation of the financial statements such as records, documentation and other matters;
b. Additional information that you have requested from us for the purpose of the audit; c. Unrestricted access to persons within the City from whom you determined it necessary to obtain audit evidence; and
d. Minutes of the meetings of the City Council of the City of Cudahy, or summaries of actions of recent meetings for which minutes have not yet been prepared. 26) All transactions have been recorded in the accounting records and are reflected in the financial statements.
27) It is our responsibility to establish and maintain internal control over financial reporting.

One of the components of internal control is risk assessment. We hereby represent that our risk assessment process includes identification and assessment of risks of material misstatement due to fraud. We have shared with you our fraud risk assessment, including a description of the risks, our assessment of the magnitude and likelihood of misstatements arising from those risks, and the controls that we have designed and implemented in response to those risks.
28) We have no knowledge of allegations of fraud or suspected fraud affecting the City's financial statements involving:
a. Management.
b. Employees who have significant roles in internal control.

Exhibit A - Management Representation Letter 8

Page | 5
c. Others where the fraud could have a material effect on the financial statements.

29) We have no knowledge of any allegations of fraud or suspected fraud affecting the City's financial statements received in communications from employees, former employees, analysts, regulators, short sellers or others.
30) We have no knowledge of noncompliance or suspected noncompliance with laws and regulations.
31) We are not aware of any pending or threatened litigation, claims, whose effects should be considered when preparing the financial statements
32) We are not aware of any new pending claims, litigations or assessments that would materially affect the financial statements.
33) There are no unasserted claims or assessments that our lawyer has advised are probable of assertion and must be disclosed in accordance with Statement of Financial Standard No. 5 and/or GASB Statement No. 10.
34) We have disclosed to you the identity of all of the City’s related parties and all the relatedparty relationships and transactions of which we are aware. 35) We have informed you of all significant deficiencies, including material weaknesses, in the design or operation of internal controls that could adversely affect the City's ability to record, process, summarize and report financial data.
36) There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices. 37) We believe that the actuarial assumptions and methods used by the actuaries for Pension and Other Postemployment Benefit (OPEB) plans funding purposes and for determining accumulated plan benefits are appropriate in the circumstances. We did not give instructions, or cause any instructions to be given, to the specialists with respect to the values or amounts derived in an attempt to bias their work, and we are not otherwise aware of any matters that have had an impact on the independence or objectivity of the plans’ actuaries.

Exhibit A - Management Representation Letter 9

Page | 6
38) We believe that the information obtained from the audited financial statements of and other participant information provided by California Public Employees’ Retirement System Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan is appropriate in the circumstances. We did not give instructions, or cause any instructions to be given, to the Plan or its auditor in an attempt to bias their work, and we are not otherwise aware of any matters that have had an impact on the independence or objectivity of the Plan or its auditor. 39) We have made available to you all financial records and related data and all audit or relevant monitoring reports, if any, received from funding sources. 40) We have identified to you any previous audits, attestation engagements, and other studies related to the audit objectives and whether related recommendations have been implemented.
41) The City has no plans or intentions that may materially affect the carrying value or classification of assets, liabilities, or equity.
42) We are responsible for compliance with the laws, regulations, and provisions of contracts and grant agreements applicable to us, including tax or debt limits and debt contracts; and we have identified and disclosed to you all laws, regulations and provisions of contracts and grant agreements that we believe have a direct and material effect on the determination of financial statement amounts or other financial data significant to the audit objectives, including legal and contractual provisions for reporting specific activities in separate funds. 43) There are no violations or possible violations of budget ordinances, laws and regulations (including those pertaining to adopting, approving, and amending budgets), provisions of contracts and grant agreements, tax or debt limits, and any related debt covenants whose effects should be considered for disclosure in the financial statements, or as a basis for recording a loss contingency, or for reporting on noncompliance. 44) The City has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset been pledged as collateral. 45) The City has complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of noncompliance. 46) The City has no component units as well as any joint ventures with specified equity interest, and properly disclose all other joint ventures and other related organizations.

Exhibit A - Management Representation Letter 10 Page 222 of 473 Page | 7
47) All funds that meet the quantitative criteria in GASBS Nos. 34 and 37 for presentation as major are identified and presented as such and all other funds that are presented as major are particularly important to financial statement users.
48) During the course of your audits, you may have accumulated records containing data that should be reflected in our books and records. All such data have been so reflected. Accordingly, copies of such records in your possession are no longer needed by us.

Supplementary Information
49) With respect to supplementary information presented in relation to the City’s basic financial statements as a whole:
a. We acknowledge our responsibility for the presentation of such information. b. We believe such information, including its form and content, is fairly presented in accordance with U.S GAAP.
c. The methods of measurement or presentation have not changed from those used in the prior period.
d. If the supplementary information is not presented with the audited financial statements, we will make the audited financial statements readily available to the intended users of the supplementary information no later than the date we issue the supplementary information and the auditor's report thereon.
50) With respect to the Required Supplementary Information (RSI) presented as required by GASB to supplement the City’s basic financial statements:
a. We acknowledge our responsibility for the presentation of such required supplementary information.
b. We believe such required supplementary information is measured and presented in accordance with guidelines prescribed by U.S. GAAP.
c. The methods of measurement or presentation have not changed from those used in the prior period.

Exhibit A - Management Representation Letter 11 Page 223 of 473 Page | 8
Compliance Considerations
In connection with your audit conducted in accordance with Government Auditing Standards, we confirm that management:
51) Is responsible for the preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework. 52) Is responsible for compliance with the laws, regulations and provisions of contracts and grant agreements applicable to the auditee.
53) Is not aware of any instances of identified and suspected fraud and noncompliance with provisions of laws, regulations, contracts, and grant agreements that have a material effect on the financial statements.
54) Is responsible 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.
55) Acknowledges its responsibility for the design, implementation and maintenance of controls to prevent and detect fraud.
56) Has a process to track the status of audit findings and recommendations. 57) Has identified for the auditor previous audits, attestation engagements and other studies related to the objectives of the audit and whether related recommendations have been implemented.
58) Is not aware of any investigations or legal proceedings that have been initiated with respect to the period under audit.

59) Acknowledges its responsibilities as it relates to non-audit services performed by the auditor, including that it assumes all management responsibilities; that it oversees the services by designating an individual, preferably within senior management, who possesses suitable skill, knowledge or experience; that it evaluates the adequacy and results of the services performed; and that it accepts responsibility for the results of the services.

Exhibit A - Management Representation Letter 12 Page 224 of 473 Exhibit A - Management Representation Letter 13 Page 225 of 473 City of Cudahy
Letter of Comment to Management
Year Ended June 30, 2022
Exhibit B - Letter of Comment to Management 14 Page 226 of 473 City of Cudahy
Letter of Comment to Management
Year Ended June 30, 2022
Exhibit B - Letter of Comment to Management 15 Page 227 of 473 To the City Manager and Members of the City Council
City of Cudahy
Cudahy, California
In planning and performing our audit of the financial statements of the City of Cudahy, California (City) as of and for the year ended June 30, 2022, in accordance with auditing standards generally accepted in the United States of America, and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A deficiency in design exists when (a) a control necessary to meet the control objective is missing, or (b) an existing control is not properly designed so that, even if the control operates as designed, the control objective would not be met. A deficiency in operation exists when a properly designed control does not operate as designed or when the person performing the control does not possess the necessary authority or competence to perform the control effectively.

A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis.

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Following is a description of an identified deficiency in internal control that we determined did not constitute a significant deficiency or a material weakness:

Exhibit B - Letter of Comment to Management 16 Page 228 of 473

1. Year-End Closing Process
Observation
During the audit, the City provided various journal entries after the trial balance was provided to the auditors. Substantially, the journal entries were to correct the balances reported in the transit funds. These adjustments should have been made before the audit commenced. It is to be noted, however, that the City has taken its best effort to finalize its balances and record all appropriate adjusting entries to reflect complete and accurate financials.

Risk
By not having formally documented reconciliation policies and procedures, the City is exposed to the risk of delays and unexpected breakdowns in the year-end closing process that will prevent the City from producing timely and reliable financial data.

Recommendation
We recommend that the City establish and document proper reconciliation and review processes to record audit adjustments before providing the trial balance and schedules to the auditors.

Management Response
The City agrees with the finding. Going forward, the Finance Department will reconcile trial balance and schedules before providing them to the auditors.
*****
Management’s response to the internal control deficiency identified in our audit were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

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

Glendale, California
December 21, 2022
Exhibit B - Letter of Comment to Management 17 Page 229 of 473 www.vasquez.cpa
Vasquez & Company LLP has over 50 years of experience in performing audit, accounting & consulting services for all types of nonprofit organizations, for-profit companies, governmental entities and publicly traded companies. Vasquez is a member of the RSM US Alliance. RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM™ logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • Ph. (213) 873-1700 • Fax (213) 873-1777

City of Cudahy
Letter of Comment to Management
Year Ended June 30, 2022
Attachment 3 Page 231 of 473
City of Cudahy
Letter of Comment to Management
Year Ended June 30, 2022

1 To the City Manager and Members of the City Council
City of Cudahy
Cudahy, California
In planning and performing our audit of the financial statements of the City of Cudahy, California (City) as of and for the year ended June 30, 2022, in accordance with auditing standards generally accepted in the United States of America, and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A deficiency in design exists when (a) a control necessary to meet the control objective is missing, or (b) an existing control is not properly designed so that, even if the control operates as designed, the control objective would not be met. A deficiency in operation exists when a properly designed control does not operate as designed or when the person performing the control does not possess the necessary authority or competence to perform the control effectively.

A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis.

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Following is a description of an identified deficiency in internal control that we determined did not constitute a significant deficiency or a material weakness:

2 1. Year-End Closing Process
Observation
During the audit, the City provided various journal entries after the trial balance was provided to the auditors. Substantially, the journal entries were to correct the balances reported in the transit funds. These adjustments should have been made before the audit commenced. It is to be noted, however, that the City has taken its best effort to finalize its balances and record all appropriate adjusting entries to reflect complete and accurate financials.

Risk
By not having formally documented reconciliation policies and procedures, the City is exposed to the risk of delays and unexpected breakdowns in the year-end closing process that will prevent the City from producing timely and reliable financial data.

Recommendation
We recommend that the City establish and document proper reconciliation and review processes to record audit adjustments before providing the trial balance and schedules to the auditors.

Management Response
The City agrees with the finding. Going forward, the Finance Department will reconcile trial balance and schedules before providing them to the auditors.
*****
Management’s response to the internal control deficiency identified in our audit were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

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

Glendale, California
December 21, 2022

www.vasquez.cpa
Vasquez & Company LLP has over 50 years of experience in performing audit, accounting & consulting services for all types of nonprofit organizations, for-profit companies, governmental entities and publicly traded companies. Vasquez is a member of the RSM US Alliance. RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM™ logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • Ph. (213) 873-1700 • Fax (213) 873-1777

City of Cudahy, California
Single Audit Report
Year Ended June 30, 2022
with Independent Auditor’s Report
Attachment 4 Page 236 of 473
City of Cudahy, California
Single Audit Report
Year Ended June 30, 2022
with Independent Auditor’s Report

City of Cudahy
Table of Contents
PAGE
INDEPENDENT AUDITOR’S REPORTS
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 1
Report on Compliance for Each Major Federal Program, on Internal Control over Compliance, and on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 3
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 7
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 8
SCHEDULE OF FINDINGS AND QUESTIONED COSTS 10
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS 12

1 Independent Auditor’s 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 The Honorable Mayor and the Members of the City Council City of Cudahy
Cudahy, California
We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Cudahy, California (the City), which comprise the City’s basic financial statements, and have issued our report thereon dated December 21, 2022.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

2 Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
December 21, 2022

3 Independent Auditor’s Report on Compliance for Each Major Federal Program, on Internal Control over Compliance, and on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
The Honorable Mayor and the Members of the City Council City of Cudahy
Cudahy, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Cudahy, California’s (the City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on the City’s major federal program for the year ended June 30, 2022. The City’s major federal program is identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30, 2022.

Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.

4 Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the City’s federal programs.

Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our 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 referred to above 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 City’s compliance with the requirements of its major federal program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance.

Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance 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 identified during the audit.

5 Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis.

A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated December 21, 2022, which contained unmodified opinions on those financial statements. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements.

6 The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

Glendale, California
January 3, 2023 (except for the Schedule of Expenditures of Federal Awards, as to which the date is December 21, 2022)

City of Cudahy
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2022
See accompanying notes to schedule of expenditures of federal awards. 7 Federal Grantor/Pass Through Grantor/Program Title
Assistance Listing
Number
(ALN)
Pass-Through
Entity
Identifying
Number
Passed
Through to
Subrecipients
U.S. Department of Treasury
Passed through State of California
Department of Finance
Coronavirus State and Local Fiscal Recovery Funds 21.027 Not available $ $ - 4,975,288 * Total U.S. Department of Treasury - 4,975,288
U.S. Department of Housing and Urban Development
Passed through County of Los Angeles Community Development Block Grant Program
Community Development Block Grants/Entitlement Grants 14.218 Not available - 294,063 Total U.S. Department of Housing and Urban Development - 294,063 U.S. Department of Transportation
Passed through California Department of Transportation
Active Transportation Program (ATP) 20.205 ATPL-5369(011) - 273,328 Total U.S. Department of Transportation - 273,328
Total Expenditure of Federal Awards $ - $ 5,542,679
* Denotes major program
Federal
Expenditures

City of Cudahy
Notes to Schedule of Expenditures of Federal Awards
Year ended June 30, 2022
8 NOTE 1 BASIS OF PRESENTATION
The accompanying schedule of expenditures of federal awards (SEFA) presents the activity of all federal financial assistance programs of the City of Cudahy, California (the City). For purposes of this schedule, financial awards include federal awards received directly from a federal agency, as well as federal funds received indirectly by the City from a non-federal agency or other organization. Only the portions of program expenditures reimbursable with federal funds are reported in the accompanying schedule. Program expenditures in excess of the maximum reimbursement authorized, if any, or the portion of the program expenditures that were funded with other state, local or other non-federal funds are excluded from the accompanying schedule.

The information in the SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

Because the SEFA presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying SEFA is presented using the modified-accrual basis of accounting which is described in Note 1 of the notes to the City’s basic financial statements, except that the lending of certain federal award monies and acquisition of capital assets are reported as expenditures of federal funds. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

NOTE 3 RELATIONSHIP TO FEDERAL FINANCIAL REPORTS
Grant expenditure reports for the year ended June 30, 2022, which have been submitted to grantor agencies, will, in some cases, differ from the amounts disclosed herein. The reports prepared for grantor agencies are typically prepared at a later date and often reflect refined estimates of the year-end accruals.

NOTE 4 RELATIONSHIP OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS TO

THE ANNUAL FINANCIAL REPORT
Amounts reported in the accompanying SEFA agree, in all material respects, to amounts reported within the Audited Financial Statements as of and for the year ended June 30, 2022.

City of Cudahy
Notes to Schedule of Expenditures of Federal Awards
Year ended June 30, 2022
9 NOTE 5 LOANS RECEIVABLE
Loans made with Community Development Block Grant (CDBG) funds in the amount of $251,895, which includes interest of $24,700, are outstanding as of June 30, 2022.

During fiscal year 2021-22, there were no new loans made with CDBG funds.

City of Cudahy
Schedule of Findings and Questioned Costs
Year ended June 30, 2022
10 Section I – Summary of Auditor’s Results
Financial Statements
Type of Auditor’s report issued on the
financial statements: Unmodified
Internal control over financial reporting:

Material weakness(es) identified? No
Significant deficiency(ies) identified? None reported
Noncompliance material to the financial
statements noted? No
Federal Awards
Internal control over major programs:

Material weakness(es) identified? No
Significant deficiency(ies) identified? None reported
Type of Auditor’s report issued on compliance
for major programs Unmodified
Any audit findings disclosed that are required to be
reported in accordance with Title 2
CFR 200.516(a) of the Uniform Guidance? No
Identification of Major Programs:

Assistance Listing Number Name of Federal Program or Cluster

21.027 Coronavirus State and Local Fiscal
Recovery Funds
Dollar threshold used to distinguish between
Type A and Type B programs: $750,000
Auditee qualified as a low-risk auditee? Yes

City of Cudahy
Schedule of Findings and Questioned Costs
Year ended June 30, 2022
11 Section II – Financial Statement Findings
There were no financial statement findings noted during the fiscal year ended June 30, 2022.

Section III – Federal Award Findings and Questioned Costs There were no federal award findings noted during the fiscal year ended June 30, 2022.

City of Cudahy
Summary Schedule of Prior Audit Findings
Year ended June 30, 2022
12 There was no Single Audit for the year ended June 30, 2021.

www.vasquezcpa.com
Vasquez & Company LLP has over 50 years of experience in performing audit, accounting & consulting services for all types of nonprofit organizations, for-profit companies, governmental entities and publicly traded companies. Vasquez is a member of the RSM US Alliance. RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM™ logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • Ph. (213) 873-1700 • Fax (213) 873-1777

City of Cudahy
Independent Accountant's Report on Agreed-upon Procedures Applied to Appropriations Limit Worksheet No. 6
Year Ended June 30, 2022
Attachment 5 Page 252 of 473
City of Cudahy
Independent Accountant's Report on Agreed-upon Procedures Applied to Appropriations Limit Worksheet No. 6
Year Ended June 30, 2022

City of Cudahy
Appropriations Limit Worksheet No. 6
Table of Contents
PAGE

INDEPENDENT ACCOUNTANT'S REPORT ON AGREED-UPON
PROCEDURES 1
Appropriations Limit Worksheet No. 6 3
Notes to Appropriations Limit Worksheet No. 6 4

1 Independent Accountant's Report on
Agreed-upon Procedures Applied to
Appropriations Limit Worksheet No. 6
Honorable Mayor and Members of City Council
City of Cudahy
We have performed the procedures enumerated below to the accompanying Appropriations Limit Worksheet No. 6 of the City of Cudahy, California for the year ended June 30, 2022. The City of Cudahy's management is responsible for the accuracy of the Appropriations Limit Worksheet No. 6 and for its compliance with the requirements of Section 1.5 of Article XIII B of the California Constitution.

These procedures, which were agreed to and acknowledged by the City of Cudahy, California and the League of California Cities (as presented in the League publication entitled Agreed-upon procedures Applied to the Appropriations Limitation Prescribed by Article XIII B of the California Constitution) were appropriate to meet the requirements of Section 1.5 of Article XIII B of the California Constitution.

This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.

The procedures performed and our findings were as follows:

1. We obtained the completed Worksheet No. 6 for the year ended June 30, 2022 and compared the limit and annual adjustment factors included in that worksheet to the limit and annual adjustment factors that were adopted by the resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheet to those that were selected by a recorded vote of the City Council.

Finding: No exceptions were noted as a result of this procedure.

2. For the accompanying Appropriations Limit Worksheet No. 6, we added last year's limit to the total adjustments and compared the resulting amount to this year's limit.

Finding: No exceptions were noted as a result of this procedure.

3. We compared the current year information presented in the accompanying Appropriations Limit worksheet No. 6 to the other worksheets described in No. 1 above.

Finding: No exceptions were noted as a result of this procedure.

2 4. We compared the prior year appropriations limit presented in the accompanying Appropriations Limit Worksheet No. 6 to the prior year appropriations limit adopted by the City Council for the prior year.

Finding: No exceptions were noted as a result of this procedure.

We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants (AICPA). We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Appropriations Limit Worksheet No. 6. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.

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

However, this report is a matter of public record and its distribution is not limited.

Glendale, California
December 21, 2022

City of Cudahy
Appropriations Limit Worksheet No. 6
Year ended June 30, 2022
Unaudited; see Independent Accountant’s Report on Agreed-Upon Procedures applied to Appropriations Limit Worksheet No. 6 and Accompanying Notes. 3 $ 33,143,215
Inflation Population
Factor Factor Combined
(Note 3) (Note 4) Factor

1.0573 0.992200 1.0491 0.0491
1,627,332
Other adjustments (Note 5) -
Total adjustments 1,627,332
Appropriations limit for fiscal year ended June 30, 2022 $ 34,770,547 Appropriations limit for fiscal year ended June 30, 2021 Adjustment factors for the fiscal year ended June 30, 2022 Adjustment for inflation and population

City of Cudahy
Notes to Appropriations Limit Worksheet No. 6
Year ended June 30, 2022
4 NOTE 1 PURPOSE OF LIMITED PROCEDURES REVIEW
Under Article XIII B of the California Constitution (the Gann Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes. Effective for years beginning on or after July 1, 1990, under Section 1.5 of Article XIII B, the annual calculation of the appropriations limit is subject to an agreed-upon procedures review in connection with the annual audit.

NOTE 2 METHOD OF CALCULATION
Under Section 10.5 of Article XIII B, of the California Constitution for fiscal years beginning on or after July 1, 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-87, adjusted for the inflation and population factors discussed in Notes 3 and 4 below.

NOTE 3 INFLATION FACTORS
A California governmental agency may adjust its appropriations limit by either the annual percentage change in the 4th quarter per capita personal income (which percentages are supplied by the State Department of Finance), or the percentage change in the local assessment roll from the preceding year due to the change of local nonresidential construction. The factor adopted by the City of Cudahy for the fiscal year 2021-2022 represents the annual percentage change in the State's per capita personal income.

NOTE 4 POPULATION FACTORS
A California governmental agency may adjust its appropriations limit by either the annual percentage change of the jurisdiction's own population, or the annual percentage change in population in the County where the jurisdiction is located. The factor adopted by the City of Cudahy for fiscal year 2021-2022 represents the annual percentage change in population for the City.

NOTE 5 OTHER ADJUSTMENTS
A California government agency may be required to adjust its appropriations limit when certain events occur, such as the transfer of responsibility for municipal services to, or from, another government agency or private entity. The City of Cudahy had no such adjustments for the year ended June 30, 2022.

www.vasquez.cpa
Vasquez & Company LLP has over 50 years of experience in performing audit, accounting & consulting services for all types of nonprofit organizations, for-profit companies, governmental entities and publicly traded companies. Vasquez is a member of the RSM US Alliance. RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM™ logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • Ph. (213) 873-1700 • Fax (213) 873-1777

Blank Page

“Serving The People "Sirviendo A La Comunidad"
Staff Report
01/17/2023 Page 1 of 3

STAFF REPORT
Date: January 17, 2023
To: Honorable Mayor/Chair and City Council/Agency Members From: From: Alfonso Noyola, City Manager/Executive Director By: Joshua Calhoun, Finance Director
Subject: Approval of Professional Services Agreement for Municipal Financial Advisory Services

RECOMMENDATION
The City Council is requested to award a Professional Services Agreement (PSA) to NHA Advisors, LLC to conduct as needed Municipal Financial Advisory Services not to exceed $85,000.

BACKGROUND

1. On October 31, 2022, the City issued an RFP for Municipal Financial Advisory Services.

2. On December 1, 2022, the proposal due date closed, and two firms submitted a proposal.

3. On December 15, 2022, NHA Advisors, LLC was notified that it was the top ranked proposal and would be recommended to Council for contract approval.

ANALYSIS
In order to provide as needed financial advisory services for situations that are complex, nonroutine, or require third-party input, the City recommends the Council to approve and agreement with NHA to conduct these studies.

The City received two (2) proposals during the RFP phase. The two submittal summaries are below:

Firm Name Proposal Cost
NHA Advisors, LLC Average hourly rate: $175-$325
KNN Public Finance, LLC Average hourly rate: $245-$375
Item Number
16C

“Serving The People "Sirviendo A La Comunidad"
Staff Report
01/17/2023 Page 2 of 3

Due to its extensive experience, expertise, and cost, the City deemed NHA to be the experienced, responsive, and responsible bidder. If approved, NHA’s project scope would be as follows:

Municipal Financial Advisory Services
Provide ongoing municipal advisory, other general financial services or advice for special projects as agreed to and directed by the City.

Review and analyze costs for feasibility of land and/or property acquisition.

Review and assist in the development of new or alternative programs such as, but not limited to, short-term financing programs, commercial paper programs, securitizations, public-private partnerships.

Develop a financing plan analyzing alternatives based on the City’s needs and the municipal market environment evaluating structuring and pricing options: long or short-term; callable or non-callable features; credit enhancement (Obtain bids if necessary); level debt service versus front or back-loaded debt service; and the consideration of premiums; discounts; or par securities.

Analyze and recommend the method of sale, such as competitive, negotiated, or private placement, including the preparation and evaluation of a Request for Proposal as necessary, which will result in the City receiving the lowest possible borrowing cost and provide the greatest marketability of an issue.

CONCLUSION
The City recommends awarding a Professional Services Agreement (PSA) to NHA Advisors, LLC to conduct as needed Municipal Financial Advisory Services, in the amount not to exceed $85,000.00.

STRATEGIC PLAN CORRELATION
Not applicable.

FINANCIAL IMPACT
The cost to perform this cost is not to exceed $85,000.00, funding by existing departmental available budget for FY2023.

“Serving The People "Sirviendo A La Comunidad"
Staff Report
01/17/2023 Page 3 of 3

ATTACHMENTS
A. Draft Professional Services Agreement by and Between NHA Advisors, LLC and the City of Cudahy.

1 2022

PROFESSIONAL SERVICES AGREEMENT
(Engagement: MUNICIPAL FINANCIAL ADVISORY SERVICES)
(Parties: NHA Advisors, LLC and City of Cudahy)
THIS PROFESSIONAL SERVICES AGREEMENT (hereinafter, “Agreement”) is made and entered into this ___________ day of __________________ 2022 (hereinafter, the “Effective Date”) by and between the CITY OF CUDAHY, a municipal corporation (hereinafter, “CITY”) and NHA Advisors, LLC, (hereinafter, “CONSULTANT”). For the purposes of this Agreement, CITY and CONSULTANT may be referred to collectively by the capitalized term “Parties.” The capitalized term “Party” may refer to CITY or CONSULTANT interchangeably, as appropriate.

RECITALS
WHEREAS, CITY requires municipal financial advisory services; and WHEREAS, CITY staff has determined that CONSULTANT possesses the experience, skills and training necessary to competently provide such services to CITY; and
WHEREAS, the execution of this Agreement was approved by the Cudahy City Council at its Regular Meeting of ___, 2022 under Agenda Item No. _____.

NOW, THEREFORE, for and in consideration of the mutual covenants and conditions herein contained, CITY and CONSULTANT agree as follows:

I.

ENGAGEMENT TERMS

1.1 TERM: This Agreement shall have a term commencing from the Effective Date through three (3) years (hereinafter, the “Term”). Nothing in this Section shall operate to prohibit or otherwise restrict the CITY’s ability to terminate this Agreement at any time for convenience or for cause as provided under Article V (Termination), below.

1.2 SCOPE OF SERVICES:

A. Subject to the terms and conditions of this Agreement, CONSULTANT agrees to provide the services and tasks described in that certain Request for Proposals of CITY entitled “Request for Municipal Financial Advisory Services” (hereinafter, “CITY RFP”) and the written proposal of CONSULTANT entitled “Proposal to Provide Municipal Financial Advisory Services” (hereinafter, the “CONSULTANT Proposal”). The CITY RFP and the CONSULTANT Proposal are attached and incorporated hereto as Exhibit “A” and “B” respectively. The term “Scope of Work” shall be a Attachment A Page 264 of 473
2 collective reference to the CITY RFP and the CONSULTANT Proposal. The capitalized term “Work” shall be a collective reference to all the various services and tasks referenced in the Scope of Work. In the event of any conflict or inconsistency between the provisions of the document entitled CITY RFP and the provisions of the document entitled CONSULTANT Proposal, the requirements of the document entitled CITY RFP shall govern and control but only to the extent of the conflict or inconsistency and no further. In the event of any conflict or inconsistency between the provisions of the Scope of Work and the provisions of this Agreement to which the Scope of Work is attached, the provisions of this Agreement shall govern and control.”

1.3 PROSECUTION OF WORK:

A. CONSULTANT shall perform the Work contemplated under this Agreement on an on-call, as-needed basis. Nothing in this Agreement shall be construed to grant CONSULTANT the exclusive right to perform any of the types of services or tasks contemplated under this Agreement nor shall anything in this Agreement be construed to entitle CONSULTANT to the receipt of any sums under this Agreement, except to the extent CITY requests the performance of any Work in the manner described below and such Work is in fact performed and completed by CONSULTANT and accepted by CITY. CITY requests for the performance of specific services or tasks contemplated under this Agreement shall be made in the form of a written work order(s) issued by the City Representative (each such written request hereinafter referred to as a “Work Order”). Each Work Order shall include the following information:

1. A detailed description of the specific services or tasks requested;

2. The location of where the particular services or tasks are to be performed, if applicable;

3. A not-to-exceed budget for performing the services or tasks;

4. A timeline for completing the requested services or tasks;

5. Any other information CITY deems necessary and relevant to the requested services or tasks; and

6. The signature of the City Representative, confirming that the services or tasks have been authorized by the City Representative.

B. CONSULTANT shall perform no Work under this Agreement without a written request from the City Representative, containing the information set forth in Section 1.3(A) above;
C. CONSULTANT shall perform the Work continuously and with due diligence so as to complete the Work by the completion date indicated in each Work Order. CONSULTANT shall cooperate with CITY and in no manner interfere with the work of CITY, its employees or other consultants, contractors or agents;

3 D. CONSULTANT shall not claim or be entitled to receive any compensation or damage because of the failure of CONSULTANT, or its subconsultants, to have related services or tasks completed in a timely manner; E. CONSULTANT shall at all times enforce strict discipline and good order among CONSULTANT’s employees; and
F. CONSULTANT, at its sole expense, shall pay all sales, consumer, use or other similar taxes required by law.

1.4 COMPENSATION: CONSULTANT shall perform the Work in accordance with the “Compensation Plan” which is attached and incorporated hereto as Exhibit “C” (hereinafter, the “COMPENSATION RATE”). The foregoing notwithstanding, CONSULTANT’s total compensation for the performance of all Work contemplated under this Agreement, will not exceed the aggregate budgeted sum of eighty-five thousand dollars ($85,000) (hereinafter, the “Not-to-Exceed Sum”) during the Term of this Agreement, unless such added expenditure is first approved by the City Council. In the event CONSULTANT’s charges are projected to exceed the Aggregate Not-to-Exceed Sum prior to the expiration of this Agreement, CITY may suspend CONSULTANT’s performance pending CITY approval of any anticipated expenditures in excess of the Aggregate Not-to-Exceed Sum or any other CITY approved amendment to the compensation terms of this Agreement.

1.5 PAYMENT OF COMPENSATION: The Not-to-Exceed Sum will be paid to CONSULTANT in monthly increments as the Work is completed. Following the conclusion of each calendar month, CONSULTANT will submit to CITY an itemized invoice indicating the services performed and tasks completed during the recently concluded calendar month, including services and tasks performed and the reimbursable out-of-pocket expenses incurred. If the amount of CONSULTANT’s monthly compensation is a function of hours worked by CONSULTANT’s personnel, the invoice should indicate the number of hours worked in the recently concluded calendar month, the persons responsible for performing the Work, the rate of compensation at which such services and tasks were performed, the subtotal for each task and service performed and a grand total for all services performed. Within thirty (30) calendar days of receipt of each invoice, CITY will notify CONSULTANT in writing of any disputed amounts included in the invoice.

Within forty-five (45) calendar days of receipt of each invoice, CITY will pay all undisputed amounts included on the invoice. CITY will not withhold applicable taxes or other authorized deductions from payments made to CONSULTANT.

1.6 ACCOUNTING RECORDS: CONSULTANT will maintain complete and accurate records with respect to all matters covered under this Agreement for a period of three (3) years after the expiration or termination of this Agreement. CITY will have the right to access and examine such records, without charge, during normal business hours. CITY will further have the right to audit such records, to make transcripts therefrom and to inspect all program data, documents, proceedings, and activities.

1.7 ABANDONMENT BY CONSULTANT: In the event CONSULTANT ceases to

4 perform the Work agreed to under this Agreement or otherwise abandons the undertaking contemplated herein prior to the expiration of this Agreement or prior to completion of any or all tasks set forth in the Scope of Services, CONSULTANT will deliver to CITY immediately and without delay, all materials, records and other work product prepared or obtained by CONSULTANT in the performance of this Agreement. Furthermore, CONSULTANT will only be compensated for the reasonable value of the services, tasks and other Work performed up to the time of cessation or abandonment, less a deduction for any damages, costs or additional expenses which CITY may incur as a result of CONSULTANT’s cessation or abandonment.

II.

PERFORMANCE OF AGREEMENT

2.1 CITY’S REPRESENTATIVE: The CITY hereby designates Alfonso Noyola, City Manager (hereinafter, the “CITY Representative”) to act as its representative for the performance of this Agreement. The CITY Representative or their designee will act on behalf of the CITY for all purposes under this Agreement.

CONSULTANT will not accept directions or orders from any person other than the CITY Representative or their designee.

2.2 CONSULTANT REPRESENTATIVE: CONSULTANT hereby designates Craig Hill to act as its representative for the performance of this Agreement (hereinafter, “CONSULTANT Representative”). CONSULTANT Representative will have full authority to represent and act on behalf of the CONSULTANT for all purposes under this Agreement. CONSULTANT Representative or their designee will supervise and direct the performance of the Work, using his best skill and attention, and will be responsible for all means, methods, techniques, sequences and procedures and for the satisfactory coordination of all portions of the Work under this Agreement. Notice to the CONSULTANT Representative will constitute notice to CONSULTANT.

2.3 COORDINATION OF SERVICE; CONFORMANCE WITH REQUIREMENTS:

CONSULTANT agrees to work closely with CITY staff in the performance of the Work and this Agreement and will be available to CITY staff and the CITY Representative at all reasonable times. All work prepared by CONSULTANT will be subject to inspection and approval by CITY Representative or his or her designees.

2.4 STANDARD OF CARE; PERFORMANCE OF EMPLOYEES: CONSULTANT represents, acknowledges and agrees to the following:

A. CONSULTANT will perform all Work skillfully, competently and to the highest standards of CONSULTANT’s profession;
B. CONSULTANT shall at all times employ such force, plant, materials, and tools as will be sufficient in the opinion of the CITY to perform the Services within the time limits established, and as provided herein. It is understood and agreed that said tools, equipment, apparatus, facilities, labor, and

5 material shall be furnished and said Services performed and completed as required by the Agreement, and subject to the approval of the CITY’s authorized representative.

C. CONSULTANT will perform all Work in a manner reasonably satisfactory to the CITY;
D. CONSULTANT will comply with all applicable federal, state and local laws and regulations, including the conflict of interest provisions of Government Code Section 1090 and the Political Reform Act (Government Code Section 81000 et seq.) CONSULTANT shall be liable for all violations of such laws and regulations in connection with Services. If CONSULTANT performs any work knowing it to be contrary to such laws, rules and regulations, CONSULTANT shall be solely responsible for all costs arising therefrom; E. CONSULTANT understands the nature and scope of the Work to be performed under this Agreement as well as any and all schedules of performance;
F. All of CONSULTANT’s employees and agents possess sufficient skill, knowledge, training and experience to perform those services and tasks assigned to them by CONSULTANT; and
G. All of CONSULTANT’s employees and agents (including, but not limited to, subcontractors and subconsultants) possess all licenses, permits, certificates, qualifications and approvals of whatever nature that are legally required to perform the tasks and services contemplated under this Agreement and all such licenses, permits, certificates, qualifications and approvals will be maintained throughout the term of this Agreement and made available to CITY for copying and inspection.

The Parties acknowledge and agree that CONSULTANT will perform, at CONSULTANT’s own cost and expense and without any reimbursement from CITY, any services necessary to correct any errors or omissions caused by CONSULTANT’s failure to comply with the standard of care set forth under this Section or by any like failure on the part of CONSULTANT’s employees, agents, contractors, subcontractors and subconsultants. Such effort by CONSULTANT to correct any errors or omissions will be commenced immediately upon their discovery by either Party and will be completed within seven (7) calendars days from the date of discovery or such other extended period of time authorized by the CITY Representative in writing and in her sole and absolute discretion. The Parties acknowledge and agree that CITY’s acceptance of any work performed by CONSULTANT or on CONSULTANT’s behalf will not constitute a release of any deficiency or delay in performance. The Parties further acknowledge, understand and agree that CITY has relied upon the foregoing representations of CONSULTANT, including but not limited to the representation that CONSULTANT possesses the skills, training, knowledge and experience necessary to perform the Work skillfully, competently and to the highest standards of CONSULTANT’s profession.

6 2.5 ASSIGNMENT: The skills, training, knowledge and experience of CONSULTANT are material to CITY’s willingness to enter into this Agreement. Accordingly, CITY has an interest in the qualifications and capabilities of the person(s) who will perform the services and tasks to be undertaken by CONSULTANT or on behalf of CONSULTANT in the performance of this Agreement. In recognition of this interest, CONSULTANT agrees that it will not assign or transfer, either directly or indirectly or by operation of law, this Agreement or the performance of any of CONSULTANT’s duties or obligations under this Agreement without the prior written consent of the CITY. In the absence of CITY’s prior written consent, any attempted assignment or transfer will be ineffective, null and void and will constitute a material breach of this Agreement.

2.6 SUBSTITUTION OF KEY PERSONNEL: CONSULTANT has represented to CITY that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, CONSULTANT may substitute other personnel of at least equal competence upon written approval of CITY. In the event that CITY and CONSULTANT cannot agree as to the substitution of key personnel, CITY shall be entitled to terminate this Agreement for cause. As discussed below, any personnel who fail or refuse to perform the Services in a manner acceptable to the CITY, or who are determined by the CITY to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property, shall be promptly removed from the Project by the CONSULTANT at the request of the CITY.

2.7 CONTROL AND PAYMENT OF SUBORDINATES; INDEPENDENT
CONTRACTOR: The Work will be performed by CONSULTANT or under CONSULTANT’s strict supervision. CONSULTANT will determine the means, methods and details of performing the Work subject to the requirements of this Agreement. CITY retains CONSULTANT on an independent contractor basis and not as an employee. CONSULTANT reserves the right to perform similar or different services for other principals during the term of this Agreement, provided such work does not unduly interfere with CONSULTANT’s competent and timely performance of the Work contemplated under this Agreement and provided the performance of such services does not result in the unauthorized disclosure of CITY’s confidential or proprietary information. Any additional personnel performing the Work under this Agreement on behalf of CONSULTANT are not employees of CITY and will at all times be under CONSULTANT’s exclusive direction and control. CONSULTANT will pay all wages, salaries and other amounts due such personnel and will assume responsibility for all benefits, payroll taxes, Social Security and Medicare payments and the like. CONSULTANT will be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: Social Security taxes, income tax withholding, unemployment insurance, disability insurance, workers’ compensation insurance and the like.

2.8 REMOVAL OF EMPLOYEES OR AGENTS: If any of CONSULTANT’s officers, employees, agents, contractors, subcontractors or subconsultants is determined

7 by the CITY Representative to be uncooperative, incompetent, a threat to the adequate or timely performance of the tasks assigned to CONSULTANT, a threat to persons or property, or if any of CONSULTANT’s officers, employees, agents, contractors, subcontractors or subconsultants fail or refuse to perform the Work in a manner acceptable to the CITY, such officer, employee, agent, contractor, subcontractor or subconsultant will be promptly removed by CONSULTANT and will not be reassigned to perform any of the Work.

2.9 COMPLIANCE WITH LAWS: CONSULTANT will keep itself informed of and in compliance with all applicable federal, state or local laws to the extent such laws control or otherwise govern the performance of the Work. CONSULTANT’s compliance with applicable laws will include, without limitation, compliance with all applicable Cal/OSHA requirements and applicable regulations of the U.S.

Department of Housing and Urbanization.

2.10 NON-DISCRIMINATION: CONSULTANT represents that it is an equal opportunity employer and it shall not discriminate against any subconsultant, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination.

2.11 INDEPENDENT CONTRACTOR STATUS: The Parties acknowledge, understand and agree that CONSULTANT and all persons retained or employed by CONSULTANT are, and will at all times remain, wholly independent contractors and are not officials, officers, employees, departments or subdivisions of CITY.

CONSULTANT will be solely responsible for the negligent acts and/or omissions of its employees, agents, contractors, subcontractors and subconsultants.

CONSULTANT and all persons retained or employed by CONSULTANT will have no authority, express or implied, to bind CITY in any manner, nor to incur any obligation, debt or liability of any kind on behalf of, or against, CITY, whether by contract or otherwise, unless such authority is expressly conferred to CONSULTANT under this Agreement or is otherwise expressly conferred by CITY in writing.

III.

INSURANCE

3.1 DUTY TO PROCURE AND MAINTAIN INSURANCE: Prior to the beginning of and throughout the duration of the Work, CONSULTANT will procure and maintain policies of insurance that meet the requirements and specifications set forth under this Article. CONSULTANT will procure and maintain the following insurance coverage, at its own expense:

A. Commercial General Liability Insurance: CONSULTANT will procure and maintain Commercial General Liability Insurance (“CGL Coverage”) as broad as Insurance Services Office Commercial General Liability coverage (occurrence Form CG 0001) or its equivalent. Such CGL Coverage will have minimum limits of no less than One Million Dollars ($1,000,000.00) per

8 occurrence and Two Million Dollars ($2,000,000.00) in the general aggregate for bodily injury, personal injury, property damage, operations, products and completed operations, and contractual liability.

B. Automobile Liability Insurance: CONSULTANT will procure and maintain Automobile Liability Insurance as broad as Insurance Services Office Form Number CA 0001 covering Automobile Liability, Code 1 (any auto). Such Automobile Liability Insurance will have minimum limits of no less than One Million Dollars ($1,000,000.00) per accident for bodily injury and property damage.

C. Workers’ Compensation Insurance/ Employer’s Liability Insurance: A policy of workers’ compensation insurance in such amount as will fully comply with the laws of the State of California and which will indemnify, insure and provide legal defense for both CONSULTANT and CITY against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by CONSULTANT in the course of carrying out the Work contemplated in this Agreement.

D. Errors & Omissions Insurance: For the full term of this Agreement and for a period of three (3) years thereafter, CONSULTANT will procure and maintain Errors and Omissions Liability Insurance appropriate to CONSULTANT’s profession. Such coverage will have minimum limits of no less than One Million Dollars ($1,000,000.00) per claim.

3.2 ADDITIONAL INSURED REQUIREMENTS: The CGL Coverage and the Automobile Liability Insurance will contain an endorsement naming the CITY and CITY’s elected and appointed officials, officers, employees, agents and volunteers as additional insureds.

3.3 REQUIRED CARRIER RATING: All varieties of insurance required under this Agreement will be procured from insurers admitted in the State of California and authorized to issue policies directly to California insureds. Except as otherwise provided elsewhere under this Article, all required insurance will be procured from insurers who, according to the latest edition of the Best’s Insurance Guide, have an A.M. Best’s rating of no less than A:VII. CITY may also accept policies procured by insurance carriers with a Standard & Poor’s rating of no less than BBB according to the latest published edition the Standard & Poor’s rating guide. As to Workers’ Compensation Insurance/ Employer’s Liability Insurance, the CITY Representative is authorized to authorize lower ratings than those set forth in this Section.

3.4 PRIMACY OF CONSULTANT’S INSURANCE: All policies of insurance provided by CONSULTANT will be primary to any coverage available to CITY or CITY’s elected or appointed officials, officers, employees, agents or volunteers. Any insurance or self-insurance maintained by CITY or CITY’s elected or appointed officials, officers, employees, agents or volunteers will be in excess of CONSULTANT’s insurance and will not contribute with it.

9 3.5 WAIVER OF SUBROGATION: All insurance coverage provided pursuant to this Agreement will not prohibit CONSULTANT or CONSULTANT’s officers, employees, agents, subcontractors or subconsultants from waiving the right of subrogation prior to a loss. CONSULTANT hereby waives all rights of subrogation against CITY, its officials, officers, employees, agents and volunteers.

3.6 VERIFICATION OF COVERAGE: CONSULTANT acknowledges, understands and agrees, that CITY’s ability to verify the procurement and maintenance of the insurance required under this Article is critical to safeguarding CITY’s financial well-being and, indirectly, the collective well-being of the residents of the CITY.

Accordingly, CONSULTANT warrants, represents and agrees that it will furnish CITY with original certificates of insurance and endorsements evidencing the coverage required under this Article on forms satisfactory to CITY in its sole and absolute discretion. The certificates of insurance and endorsements for each insurance policy will be signed by a person authorized by that insurer to bind coverage on its behalf, and will be on forms provided by the CITY if requested. All certificates of insurance and endorsements will be received and approved by CITY as a condition precedent to CONSULTANT’s commencement of any Work or any of the Work. Upon CITY’s written request, CONSULTANT will also provide CITY with certified copies of all required insurance policies and endorsements.

3.7 The insurance coverage requirement set forth under this Article 3 are in addition to any coverage requirements set forth under Section VI-G (Insurance Coverages) of the CITY RFP.

3.8 FAILURE TO MAINTAIN COVERAGE: In the event any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced immediately so as to avoid a lapse in the required coverage, CITY has the right but not the duty to obtain the insurance it deems necessary, and any premium paid by CITY will be promptly reimbursed by CONTRACTOR or CITY will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, CITY may cancel this Agreement effective upon notice.

3.9 SPECIAL RISKS OR CIRCUMSTANCES. City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.

IV.

INDEMNIFICATION

4.1 The Parties agree that CITY and CITY’s elected and appointed officials, officers, employees, agents and volunteers (hereinafter, the “CITY Indemnitees”) should, to the fullest extent permitted by law, be protected from any and all loss, injury, damage, claim, lawsuit, cost, expense, attorneys’ fees, litigation costs, or any other cost arising out of or in any way related to the performance of this

10 Agreement. Accordingly, the provisions of this indemnity provision are intended by the Parties to be interpreted and construed to provide the CITY Indemnitees with the fullest protection possible under the law. CONSULTANT acknowledges that CITY would not enter into this Agreement in the absence of CONSULTANT’s commitment to indemnify, defend and protect CITY as set forth herein Notwithstanding the foregoing, to the extent CONSULTANT’s services are subject to Civil Code Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section 2782.8, to Claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the CONSULTANT.

CONSULTANT’s obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the CITY, its officials, officers, employees, agents or volunteers.

4.2 To the fullest extent permitted by law, CONSULTANT shall indemnify, hold harmless and defend the CITY Indemnitees from and against all liability, loss, damage, expense, cost (including without limitation reasonable attorneys’ fees, expert fees and all other costs, and fees of litigation) of every nature arising out of or in connection with CONSULTANT’s performance of work hereunder or its failure to comply with any of its obligations contained in this Agreement, except such loss or damage which is caused by the sole negligence or willful misconduct of the CITY.

4.3 CITY shall have the right to offset against the amount of any compensation due to CONSULTANT under this Agreement, any amount due to CITY from CONSULTANT as a result of CONSULTANT’s failure to either pay CITY promptly for any costs associated with CONSULTANT’s obligations to indemnify the CITY Indemnitees under this Article, or related to CONSULTANT’s failure to either (i) pay taxes on amounts received pursuant to this Agreement or (ii) comply with applicable workers’ compensation laws.

4.4 The obligations of CONSULTANT under this Article will not be limited by the provisions of any workers’ compensation act or similar act. CONSULTANT expressly waives its statutory immunity under such statutes or laws as to CITY and CITY’s elected and appointed officials, officers, employees, agents, and volunteers.

4.5 CONSULTANT agrees to obtain executed indemnity agreements with provisions identical to those set forth herein this Article from each and every subcontractor or any other person or entity involved by, for, with or on behalf of CONSULTANT in the performance of this Agreement. In the event CONSULTANT fails to obtain such indemnity obligations from others as required herein, CONSULTANT agrees to be fully responsible and indemnify, hold harmless and defend CITY and CITY’s elected and appointed officials, officers, employees, agents, and volunteers from and against any and all claims and losses, costs or expenses for any damage due to death or injury to any person and injury to any property resulting from any alleged intentional, reckless, negligent, or otherwise wrongful acts, errors or omissions of CONSULTANT’s subcontractors or any other person or entity involved by, for, with or on behalf of CONSULTANT in the performance of this Agreement. Such costs and expenses shall include reasonable attorneys’ fees

11 incurred by counsel of CITY’s choice.

4.6 CITY does not, and shall not waive any rights that it may possess against CONSULTANT because of the acceptance by CITY, or the deposit with CITY, of any insurance policy or certificate required pursuant to this Agreement. This hold harmless and indemnification provision shall apply regardless of whether or not any insurance policies are determined to be applicable to the claim, demand, damage, liability, loss, cost, or expense.

4.7 This Article and all provisions contained herein (including but not limited to the duty to indemnify, defend, and hold free and harmless) shall survive the termination or normal expiration of this Agreement and is in addition to any other rights or remedies which the CITY may have at law or in equity.

V.

TERMINATION

5.1 TERMINATION WITHOUT CAUSE: CITY may immediately terminate this Agreement at any time for convenience and without cause by giving prior written notice of CITY’s intent to terminate this Agreement which notice shall specify the effective date of such termination. Upon such termination for convenience, CONSULTANT will be compensated only for those services and tasks which have been performed by CONSULTANT up to the effective date of the termination.

CONSULTANT may not terminate this Agreement except for cause as provided under Section 5.2, below. If this Agreement is terminated as provided herein, CITY may require CONSULTANT to provide all finished or unfinished Documents and Data, as defined in section 6.1 below, and other information of any kind prepared by CONSULTANT in connection with the performance of the Work.

CONSULTANT will be required to provide such Documents and Data within fifteen (15) calendar days of CITY’s written request. No actual or asserted breach of this Agreement on the part of CITY pursuant to Section 5.2, below, will operate to prohibit or otherwise restrict CITY’s ability to terminate this Agreement for convenience as provided under this Section.

5.2 EVENTS OF DEFAULT; BREACH OF AGREEMENT:

A. In the event either Party fails to perform any duty, obligation, service or task set forth under this Agreement (or fails to timely perform or properly perform any such duty, obligation, service or task set forth under this Agreement), an event of default (hereinafter, “Event of Default”) will occur. For all Events of Default, the Party alleging an Event of Default will give written notice to the defaulting Party (hereinafter referred to as a “Default Notice”) which will specify: (i) the nature of the Event of Default; (ii) the action required to cure the Event of Default; (iii) a date by which the Event of Default will be cured, which will not be less than the applicable cure period set forth under Sections 5.2B and 5.2C below or if a cure is not reasonably possible within the applicable cure period, to begin such cure and diligently prosecute such cure to completion. The Event of Default will constitute a breach of this Agreement if the defaulting Party fails to cure the Event of Default within the

12 applicable cure period or any extended cure period allowed under this Agreement.

B. CONSULTANT will cure the following Events of Defaults within the following time periods:
i. Within ten (10) business days of CITY’s issuance of a Default Notice for any failure of CONSULTANT to timely provide CITY or CITY’s employees or agents with any information and/or written reports, documentation or work product which CONSULTANT is obligated to provide to CITY or CITY’s employees or agents under this Agreement.

Prior to the expiration of the 10-day cure period, CONSULTANT may submit a written request for additional time to cure the Event of Default upon a showing that CONSULTANT has commenced efforts to cure the Event of Default and that the Event of Default cannot be reasonably cured within the 10-day cure period. The foregoing notwithstanding, CITY will be under no obligation to grant additional time for the cure of an Event of Default under this Section 5.2B.i. that exceeds seven (7) calendar days from the end of the initial 10-day cure period; or ii. Within fourteen (14) calendar days of CITY’s issuance of a Default Notice for any other Event of Default under this Agreement. Prior to the expiration of the 14-day cure period, CONSULTANT may submit a written request for additional time to cure the Event of Default upon a showing that CONSULTANT has commenced efforts to cure the Event of Default and that the Event of Default cannot be reasonably cured within the 14-day cure period. The foregoing notwithstanding, CITY will be under no obligation to grant additional time for the cure of an Event of Default under this Section 5.2B.ii that exceeds thirty (30) calendar days from the end of the initial 14-day cure period.

In addition to any other failure on the part of CONSULTANT to perform any duty, obligation, service or task set forth under this Agreement (or the failure to timely perform or properly perform any such duty, obligation, service or task), an Event of Default on the part of CONSULTANT will include, but will not be limited to the following: (i) CONSULTANT’s refusal or failure to perform any of the services or tasks called for under the Scope of Work; (ii) CONSULTANT’s failure to fulfill or perform its obligations under this Agreement within the specified time or if no time is specified, within a reasonable time; (iii) CONSULTANT’s and/or its employees’ disregard or violation of any federal, state, local law, rule, procedure or regulation; (iv) the initiation of proceedings under any bankruptcy, insolvency, receivership, reorganization, or similar legislation as relates to CONSULTANT, whether voluntary of involuntary; (v) CONSULTANT’s refusal or failure to perform or observe any covenant, condition, obligation or provision of this Agreement; and/or (vii) CITY’s discovery that a statement representation or warranty by CONSULTANT relating to this Agreement is false, misleading or erroneous in any material respect.

C. CITY will cure any Event of Default asserted by CONSULTANT within fortyPage 275 of 473 13 five (45) calendar days of CONSULTANT’s issuance of a Default Notice, unless the Event of Default cannot reasonably be cured within the 45-day cure period. Prior to the expiration of the 45-day cure period, CITY may submit a written request for additional time to cure the Event of Default upon a showing that CITY has commenced its efforts to cure the Event of Default and that the Event of Default cannot be reasonably cured within the 45-day cure period. The foregoing notwithstanding, an Event of Default dealing with CITY’s failure to timely pay any undisputed sums to CONSULTANT as provided under Section 1.5, above, will be cured by CITY within five (5) calendar days from the date of CONSULTANT’s Default Notice to CITY.

D. CITY, in its sole and absolute discretion, may also immediately suspend CONSULTANT’s performance under this Agreement pending
CONSULTANT’s cure of any Event of Default by giving CONSULTANT written notice of CITY’s intent to suspend CONSULTANT’s performance (hereinafter, a “Suspension Notice”). CITY may issue the Suspension Notice at any time upon the occurrence of an Event of Default. Upon such suspension, CONSULTANT will be compensated only for those services and tasks which have been rendered by CONSULTANT to the reasonable satisfaction of CITY up to the effective date of the suspension. No actual or asserted breach of this Agreement on the part of CITY will operate to prohibit or otherwise restrict CITY’s ability to suspend this Agreement as provided herein.

E. No waiver of any Event of Default or breach under this Agreement will constitute a waiver of any other or subsequent Event of Default or breach.

No waiver, benefit, privilege, or service voluntarily given or performed by a Party will give the other Party any contractual rights by custom, estoppel, or otherwise.

F. The duties and obligations imposed under this Agreement and the rights and remedies available hereunder will be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law. In addition to any other remedies available to CITY at law or under this Agreement in the event of any breach of this Agreement, CITY, in its sole and absolute discretion, may also pursue any one or more of the following remedies:
i. Upon written notice to CONSULTANT, the CITY may immediately terminate this Agreement in whole or in part;
ii. Upon written notice to CONSULTANT, the CITY may extend the time of performance;
iii. The CITY may proceed by appropriate court action to enforce the terms of the Agreement to recover damages for CONSULTANT’s breach of the Agreement or to terminate the Agreement; or
iv. The CITY may exercise any other available and lawful right or remedy.

14 CONSULTANT will be liable for all legal fees plus other costs and expenses that CITY incurs upon a breach of this Agreement or in the CITY’s exercise of its remedies under this Agreement.

G. In the event CITY is in breach of this Agreement, CONSULTANT’s sole remedy will be the suspension or termination of this Agreement and/or the recovery of any unpaid sums lawfully owed to CONSULTANT under this Agreement for completed services and tasks.

5.3 SCOPE OF WAIVER: No waiver of any default or breach under this Agreement will constitute a waiver of any other default or breach, whether of the same or other covenant, warranty, agreement, term, condition, duty or requirement contained in this Agreement. No waiver, benefit, privilege, or service voluntarily given or performed by a Party will give the other Party any contractual rights by custom, estoppel, or otherwise.

5.4 SURVIVING ARTICLES, SECTIONS AND PROVISIONS: The termination of this Agreement pursuant to any provision of this Article or by normal expiration of its term or any extension thereto will not operate to terminate any Article, Section or provision contained herein which provides that it will survive the termination or normal expiration of this Agreement.

VI.

MISCELLANEOUS PROVISIONS

6.1 DOCUMENTS & DATA; LICENSING OF INTELLECTUAL PROPERTY: All Documents and Data will be and remain the property of CITY without restriction or limitation upon their use or dissemination by CITY. For purposes of this Agreement, the term “Documents and Data” means and includes all reports, analyses, correspondence, plans, designs, notes, summaries, strategies, charts, schedules, spreadsheets, calculations, lists, data compilations, documents or other materials developed and/or assembled by or on behalf of CONSULTANT in the performance of this Agreement and fixed in any tangible medium of expression, including but not limited to Documents and Data stored digitally, magnetically and/or electronically. This Agreement creates, at no cost to CITY, a perpetual license for CITY to copy, use, reuse, disseminate and/or retain any and all copyrights, designs, and other intellectual property embodied in all Documents and Data. CONSULTANT will require all subcontractors and subconsultants working on behalf of CONSULTANT in the performance of this Agreement to agree in writing that CITY will be granted the same right to copy, use, reuse, disseminate and retain Documents and Data prepared or assembled by any subcontractor or subconsultant as applies to Documents and Data prepared by CONSULTANT in the performance of this Agreement.

6.2 CONFIDENTIALITY: All data, documents, discussion, or other information developed or received by CONSULTANT or provided for performance of this Agreement are deemed confidential and will not be disclosed by CONSULTANT without prior written consent by CITY. CITY will grant such consent of disclosure

15 as legally required. Upon request, all CITY data will be returned to CITY upon the termination or expiration of this Agreement. CONSULTANT will not use CITY’s name or insignia, photographs, or any publicity pertaining to the Work in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of CITY.

6.3 FALSE CLAIMS ACT: CONSULTANT warrants and represents that neither CONSULTANT nor any person who is an officer of, in a managing position with, or has an ownership interest in CONSULTANT has been determined by a court or tribunal of competent jurisdiction to have violated the False Claims Act, 31 U.S.C., Section 3789 et seq. and the California False Claims Act, Government Code Section 12650 et seq.

6.4 NOTICES: All notices permitted or required under this Agreement will be given to the respective Parties at the following addresses, or at such other address as the respective Parties may provide in writing for this purpose:

CONSULTANT: CITY:

NHA Advisors, LLC
4040 Civic Center Drive, Ste 200
San Rafael, CA 94903
Attn: Craig Hill
Phone: (415) 785-2025
City of Cudahy
Finance Department
5220 Santa Ana Street
Cudahy, CA 90201
Phone: (323) 773-5143
Attn: Joshua Calhoun
Such notices will be deemed effective when personally delivered or successfully transmitted by facsimile as evidenced by a fax confirmation slip or when mailed, forty-eight (48) hours after deposit with the United States Postal Service, first class postage prepaid and addressed to the Party at its applicable address.

6.5 COOPERATION; FURTHER ACTS: The Parties will fully cooperate with one another, and will take any additional acts or sign any additional documents as are reasonably necessary, appropriate or convenient to achieve the purposes of this Agreement.

6.6 SUBCONTRACTING: CONSULTANT will not subcontract any portion of the Work required by this Agreement, except as expressly stated herein, without the prior written approval of CITY. Subcontracts (including without limitation subcontracts with subconsultants), if any, will contain a provision making them subject to all provisions stipulated in this Agreement, including provisions relating to insurance requirements and indemnification.

6.7 CITY’S RIGHT TO EMPLOY OTHER CONSULTANTS: CITY reserves the right to employ other contractors in connection with the various projects worked upon by CONSULTANT.

6.8 PROHIBITED INTERESTS: CONSULTANT warrants, represents and maintains that it has not employed nor retained any company or person, other than a bona fide employee working solely for CONSULTANT, to solicit or secure this

16 Agreement. Further, CONSULTANT warrants and represents that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for CONSULTANT, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, CITY will have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of CITY, during the term of his or her service with CITY, will have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.

6.9 TIME IS OF THE ESSENCE: Time is of the essence for each and every provision of this Agreement.

6.10 GOVERNING LAW AND VENUE: This Agreement will be interpreted and governed according to the laws of the State of California. In the event of litigation between the Parties, venue, without exception, will be in the Los Angeles County Superior Court of the State of California. If, and only if, applicable law requires that all or part of any such litigation be tried exclusively in federal court, venue, without exception, will be in the Central District of California located in the City of Los Angeles, California.

6.11 ATTORNEYS’ FEES: If either Party commences an action against the other Party, legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing Party in such litigation will be entitled to have and recover from the losing Party reasonable attorneys’ fees and all other costs of such action.

6.12 SUCCESSORS AND ASSIGNS: This Agreement will be binding on the successors and assigns of the Parties.

6.13 NO THIRD-PARTY BENEFIT: There are no intended third-party beneficiaries of any right or obligation assumed by the Parties. All rights and benefits under this Agreement inure exclusively to the Parties.

6.14 CONSTRUCTION OF AGREEMENT: This Agreement will not be construed in favor of, or against, either Party but will be construed as if the Parties prepared this Agreement together through a process of negotiation and with the advice of their respective attorneys.

6.15 SEVERABILITY: If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions will continue in full force and effect.

6.16 AMENDMENT; MODIFICATION: No amendment, modification or supplement of this Agreement will be valid or binding unless executed in writing and signed by both Parties, subject to CITY approval. The requirement for written amendments, modifications or supplements cannot be waived and any attempted waiver will be void and invalid.

17 6.17 CAPTIONS: The captions of the various articles, sections and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.

6.18 INCONSISTENCIES OR CONFLICTS: In the event of any conflict or inconsistency between the provisions of this Agreement and any of the exhibits attached hereto, the provisions of this Agreement will control.

6.19 ENTIRE AGREEMENT: This Agreement, including all attached exhibits, constitutes the entire, complete, final and exclusive expression of the Parties with respect to the matters addressed herein and supersedes all other agreements or understandings, whether oral or written, which may have been entered into between CITY and CONSULTANT prior to the execution of this Agreement. Any statements, representations, or other agreements, whether oral or written, made by either Party that is not embodied herein will not be valid or binding on the Parties. No amendment, modification or supplement to this Agreement will be valid and binding unless in writing and duly executed by the Parties pursuant to Section

6.16, above.

6.20 COUNTERPARTS: This Agreement will be executed in three (3) original counterparts each of which will be of equal force and effect. No handwritten or typewritten amendment, modification or supplement to any one counterpart will be valid or binding unless made to all three counterparts in conformity with Section

6.16, above. One fully executed original counterpart will be delivered to CONSULTANT and the remaining two original counterparts will be retained by CITY.
(SIGNATURES ON NEXT PAGE)

18 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed the day and year first appearing in this Agreement, above.

CITY OF CUDAHY:

By:

Alfonso Noyola, City Manager

Date:_______________________
NHA Advisors, LLC
By:

Name: Craig Hill
Title: Managing Principal
Date:_______________________
APPROVED AS TO FORM:

By: _____

City Attorney
Date:____________________________

19 EXHIBIT “A”

CITY RFP

REQUEST FOR PROPOSALS

TO PROVIDE
Municipal Financial Advisory Services
TO THE

CITY OF CUDAHY

IMPORTANT DATES
RFP ISSUED October 31, 2022

DEADLINE TO SUBMIT QUESTIONS

PROPOSAL DUE DATE
November 7, 2022
December 1, 2022
at 3:00 PM
PROPOSALS ARE EVALUATED December 5 - 7, 2022

NOTIFICATION TO PREFERRED

CONSULTANT
December 8, 2022

i
Table of Contents
I. INTRODUCTION.................................................................................................. 1 II. BACKGROUND.................................................................................................... 1 III. SCOPE OF WORK............................................................................................... 1 IV. GENERAL INFORMATION .................................................................................. 2 V. TERMS AND CONDITIONS................................................................................. 6 VI. PROPOSAL CONTENT ....................................................................................... 8 VII. EVALUATION PROCEDURES............................................................................. 9 VIII. PROPOSAL SUBMITTAL................................................................................... 11 IX. STAFF CONTACT.............................................................................................. 11 APPENDIX A – Sample Contract .................................................................................. 12 APPENDIX B – Summary Sheet ................................................................................... 30 APPENDIX C – Certification of Acceptance and Proposal for Modification .................. 31 APPENDIX D – False Claims Form............................................................................... 32 APPENDIX E – Civil Litigation History........................................................................... 35

1 City of Cudahy
5220 Santa Ana, Cudahy, California 90201
(323) 773-5143 Fax (323) 771-2072
October 31, 2022
Municipal Financial Advisory Services
I. INTRODUCTION
The City of Cudahy (“City”) is requesting proposals for Municipal Financial Advisory Services. The selected firm will coordinate with the City on an “as needed” basis and fall under the specific direction of the Finance Director or their designee. The scope of work, proposal format, submittal guidelines, and evaluation and selection process are described in this Request for Proposal (“RFP”).

II. BACKGROUND
Cudahy is located in Southeast Los Angeles County, next to the L.A. River. The City was incorporated on November 10, 1960 and named after its founder, meat-packing baron Michael Cudahy, who purchased the land known as Rancho San Antonio in 1908 for development. Cudahy is 1.1 square miles with a current population of 23,805. The City is a general law city and operates under the council-manager form of government.

It is anticipated that the consultant will enter into a professional services agreement with the City of Cudahy. The length of the agreement will be for three-year term with an option to extend two one-year terms.

III. SCOPE OF WORK
The following is a general outline of the scope of work to be provided by the consultant.

While it is intended that the following scope of work include all elements essential to develop the project, those submitting proposals are advised to perform their own field reconnaissance and include any items which they feel have been overlooked. The description and cost of such items should be noted and outlined separately in the proposal. Services required to complete this project by the consultant shall include:

Provide ongoing municipal advisory, other general financial services or advice for special projects as agreed to and directed in writing by the City’s Director of Finance.

Review and analyze costs for feasibility of land and/or property acquisition.

Review and assist in the development of new or alternative programs such as, but not limited to, short-term financing programs, commercial paper programs, securitizations, public-private partnerships.

2 Develop a financing plan analyzing alternatives based on the City’s needs and the municipal market environment evaluating structuring and pricing options: long or shortterm; callable or non-callable features; credit enhancement (Obtain bids if necessary); level debt service versus front or back-loaded debt service; and the consideration of premiums; discounts; or par securities.

Analyze and recommend the method of sale, such as competitive, negotiated, or private placement, including the preparation and evaluation of a Request for Proposal as necessary, which will result in the City receiving the lowest possible borrowing cost and provide the greatest marketability of an issue.

IV. PROPOSAL SCHEDULE
RFP ISSUED October 31, 2022

DEADLINE TO SUBMIT QUESTIONS

PROPOSAL DUE DATE
November 7, 2022
December 1, 2022
at 3:00 PM
PROPOSALS ARE EVALUATED December 5 - 7, 2022
NOTIFICATION TO PREFERRED CONSULTANT December 8, 2022
IV. GENERAL INFORMATION
The City seeks proposals from outside firms to provide Municipal Financial Advisory Services. The City will select one qualifying firm to provide the services as defined in the Scope of Services section of this RFP.

A. Period of Performance – The City desires to award a contract with a term of three (3) years and with the ability to extend the term of the agreement for a maximum of two (2) one-year extensions in the sole and absolute discretion of the City based on a multiplicity of factors, including but not limited to performance. City also requires that any agreement be structured in a manner so as to permit City to terminate the agreement prior to the expiration of the three-year initial term or any extension term to respond to changing economic conditions, changes in the law and/or judicial interpretations of the law which may impact the City’s ability to contract-out such services.

B. Proposal Validity – The Proposer’s pricing shall be valid for a minimum of 90 days.

C. Request for Information – Questions regarding this RFP are for clarification purposes only and are to be directed by e-mail to: Joshua Calhoun, at

3 [email protected]. The deadline to submit questions will be November 7, 2022.

D. Submission Deadline – Proposals must be received, in a sealed envelope with the words “Request for Proposal – Municipal Financial Advisory Services” clearly labeled along with the name and address of the firm, by the Office of the City Clerk by 3:00 pm on December 1, 2022. The submitted packet shall include three (3) copies of the proposal.

E. Late Submittals – It is strongly recommended that proposals be delivered inperson or via personal courier by or before the submission deadline.

Proposals received after the specified submission deadline will be disqualified and not considered. Proposals postmarked prior to the applicable deadline date but received after the deadline will also be disqualified and not considered. Proposers are responsible to ensure the timely submission of their proposal. Proposals may not be submitted by via facsimile or electronic mail.

F. Withdrawal or Modifications – A proposal may be withdrawn or changed by a written and signed request by the firm prior to the final deadline. If firms do not make this request before the final deadline, the firm shall be obligated to fulfill the terms of their proposal as submitted. In the event a proposer seeks to withdraw and modify a proposal, the modified proposal must be submitted before the applicable submission deadline.

G. Addenda – In the event that any portion of this RFP is changed, the City will provide addenda via fax or e-mail to all firms who have received an RFP. The signed addenda must be included with the RFP submittal. Submittals received without the applicable addenda may be rejected as incomplete.

H. Responsiveness – All submittals will be reviewed by the City to determine compliance with all requirements and instructions as specified in the RFP.

Firms are notified that failure to comply with any part of the RFP may result in the rejection of the submittal as non-responsive.

The City also reserves the right, at its sole and absolute discretion to waive minor administrative irregularities or errors.

I. Costs – The City will not be liable for any costs incurred by the Proposer in preparing and responding to this RFP. The Proposer shall not include any pre-contractual expenses as part of the proposed cost.

J. Legal Authorization – All forms and documentation included in this RFP must be signed and dated by a person authorized to legally bind the Proposer to a contractual relationship with the City.

4 K. Conflict of Interest – Proposer is required to issue a brief statement disclosing potentially conflicting interests including:
a. Any litigation involving the Proposer or the Proposer’s personnel which is adverse to the City; and
b. Consulting services currently being provided or provided within the last four years to any person, corporation, partnership, or other entity that made application to the City for a discretionary land use entitlement or City project.

L. Rejection of Submittals – The City reserves the right at its sole discretion to reject any and all submittals received without penalty as result of this RFP. a. A proposal may be immediately rejected if:
i. It contains misrepresentative or misleading information; ii. It is received at any time after the exact date and time set for receipt of proposals;
iii. It does not meet the required specifications or terms and conditions as prescribed;
iv. It is not prepared in the format outlined in this RFP; v. It is signed by an individual not authorized to represent the Proposer; vi. Proposer is involved in outstanding litigation that could impinge on its ability to complete the responsibilities and obligations of the proposal; vii. Any other reason in the City’s sole and absolute discretion.

M. No Guarantee of Contract – No guarantee is made that any contract will be awarded in response to this RFP.

N. Insurance Coverage – If a Proposer is selected, all insurance documentation will be provided to the City prior to the execution of a contract at the expense of the Proposer. All insurance requirements are included as a provision of the contract.

O. Sub-consultants – Proposer shall identify any sub-consultants and describe the responsibilities that will be assigned to them. The same level of references and background information required for Proposers shall be required of sub-consultants.

5 P. Acceptance of Conditions – Proposer shall include a statement offering the acceptance of all conditions listed in the RFP document (including, but not limited to, all the conditions reflected in the sample Professional Services Agreement) which shall be submitted with the proposal.

Q. Public Record – All proposals submitted in response to this RFP will become the property of the City upon submission and a matter of public record pursuant to applicable law. City reserves the right to make copies of all proposals available for inspection and copying by interested members of the public as records of the City and City shall be under no obligation to the Proposer to withhold such records. In so far as a proposal contains information that the Proposer regards as proprietary and confidential, it shall be the responsibility of the Proposer (and not the City) to specifically identify which items of information are proprietary and clearly identify in writing which specific pieces of information are proprietary. It shall be insufficient for the Proposer to merely identify the entire proposal or an entire page or set of pages of proprietary. With respect to information deemed proprietary, the procedures set forth under subsection (T) below shall be observed. Not-to-exceed sums, hourly rates and the like that may be set forth in a proposal shall not constitute proprietary information nor shall any information readily available to the general public or any other information not regarded as proprietary and confidential under federal or state law.

R. Right to Request Additional Information – During the evaluation process the City reserves the right, where it may serve the City’s best interest, to request additional information or clarifications from Proposers, or to allow corrections of errors or omissions. At the discretion of the City, firms submitting proposals may be requested to make oral presentations as part of the evaluation process.

S. Additional Services – The Scope of Work describes the minimum baseline level of services required for the services contemplated under this RFP, however, cost-effective proposals that exceed the minimum levels of service are welcome. Upon final selection of the firm, the Scope of Work may be modified and refined during negotiations with the City to account for the performance of services that exceed the baseline level called for under this RFP.

T. Conflict of Interest - By signing the Agreement, the successful Proposer declares and warrants that no elected or appointed official, officer or employee of the City has been or shall be compensated, directly or indirectly, in connection with the award of the Agreement or any work for the proposed project. For the term of the Agreement, no elected or appointed official, officer or employee of the City, during the term of his/her service with the City and for two (2) years following his/her termination of office or employment with the City, shall have any direct

6 interest in the Agreement, or obtain any present, anticipated or future material benefit arising therefrom.

U. Confidential Information - City reserves the right to make copies of a Proposer’s proposal available for inspection and copying by members of the public, (including proposals which may contain information the Proposer regards as proprietary in nature), unless the City’s legal counsel determines that the information which the Proposer regards as proprietary may be withheld pursuant to applicable provisions of the California Public Records Act (Govt. Code Section 6250 et seq.) or other applicable state or federal law. In the event City proposes to disclose records containing information the Proposer has specifically identified as being proprietary and confidential, City shall notify the Proposer in writing of its intent to release such information and the Proposer shall have five (5) working days after City’s issuance of its notice to give City written notice of Proposer’s objection to the City’s release of proprietary information. City will not release the proprietary information after receipt of the objection notice from the Proposer unless: (i) the objection notice is not received by the City until after the close of business on the 5th day following City’s issuance of the notice of intent to disclose; (iii) ordered to release the information by a court of competent jurisdiction; or (iii) the Proposer’s objection notice fails to include a fully executed indemnification agreement wherein the Proposer agrees indemnify, defend and hold harmless the City, and its elected and appointed officials, officers, directors, employees and agents from and against all liability, loss, cost or expense (including attorneys’ fees) arising out of any legal action brought to compel the release of records containing the proprietary information which the Proposer wishes to withhold. Again, the Proposer must specifically identify the information it deems proprietary.

V. TERMS AND CONDITIONS
A. Certification
By submitting a proposal, Proposer certifies that it has fully read and understands this RFP and has full knowledge of the nature, scope and scale of services and tasks that are to be performed under this RFP. Proposer also certifies that its proposal was prepared without prior understanding, agreement or connection with any other Proposer submitting a proposal from this RFP, and is in all respects fair and without collusion or fraud, so that all proposals will result from free, open and competitive proposing among all Proposers.

B. Reserving Rights
The City reserves the right to reject any and all proposals received as a result of this RFP. City’s potential award of a contract will not be based on any single factor nor will it be based solely or exclusively on the lowest cost

7 proposal. If a contract is awarded, it will be awarded to the proposer who in the judgment of the City has presented an optimal balance of relevant experience, technical expertise, technological innovation, price, quality of service, work history and other factors which the City may consider relevant and important in determining which proposal is best for the City.

C. Assignment and Guarantee
No assignment by the Proposer of the contract or any part thereof, or of funds to be received hereunder, is binding unless the City has given written consent before such assignment. There is also no guarantee of a minimal amount of work or compensation for any Proposer selected for contract negotiations.

D. Financial Responsibility for Proposal Costs
The City accepts no financial responsibility for any costs incurred by the Proposer in responding to this RFP. Proposals will become the property of the City and may be used by the City in any way deemed appropriate.

Received proposals will not be returned to the Proposer.

E. Clarification
Should discrepancies or omissions be found in this RFP or should there be a need to clarify this RFP, questions or comments should be emailed to Richard Iglesias, City Clerk, at [email protected]. The City shall not be responsible for, nor be bound by, any oral instructions, interpretations or explanations issued by the City.

F. Discrimination
The Proposer and all subcontractors must not discriminate, nor permit discrimination against any person on the grounds of race, national origin, sex, handicap, sexual orientation, or veteran status in their employment practices, in any of their contractual arrangements, in all services and accommodations they offer the public or in their business operations.

G. Indemnification
Proposer, at its own expense and without exception, shall indemnify, defend and pay all damages, costs, expenses, including attorney fees, and otherwise hold harmless the City, its employees and agents from any liability of any nature or kind in regard to the preparation or presentation of a proposal in response to this RFP.

H. Gratuity Prohibition
Proposer shall not offer any gratuities, favors or anything of monetary value to any official, employee or agent of the City for the purpose of influencing consideration of this proposal.

8 VI. PROPOSAL CONTENT
The RFP must provide information in the same order as presented in this document.

A. General Overview/Cover Letter – Introduction of the firm including a general description of the firm’s qualifications and experience, with emphasis on previous projects similar to the one proposed here. Along with introductory remarks, the proposal shall include the following information:
a. Name, address, principal place of business, telephone number, and fax number/e-mail address of legal entity with which contract would be written. b. Name, title, address, e-mail address, and telephone number of each principal officer.
c. Legal status of the firm (partnership, corporation, etc.) and the year the entity was organized to do business as the entity now substantially exists. d. Documentation on the financial status of the firm to ensure the firm will continue in business through the contract period and finance the costs of adequate personnel and other support requirements.

B. Organizational Information – Proposer will include an organizational chart, resumes, and certifications for the firm that clearly demonstrates their abilities, skill level, and experience to accomplish the required tasks.

C. Previous Experience – Proposer will provide a minimum of five (5) examples of comparable work in the last five years which best demonstrates the qualifications and ability of the proposed team to accomplish the work as outlined in the Scope of Services section of this RFP. A minimum of three (3) references and maximum of five (5) references shall be provided. Information submitted shall include the name of the client with current address, telephone number, e-mail address, and contact person for each reference. The City reserves the right to contact any of the listed references at any time and make any other reasonable investigation into the consultant’s background and experience.

D. Procedures and Methodology – The Proposer should demonstrate their understanding of the needs of the City and the objectives of the work proposed. Proposal shall provide a detailed description of the firm’s proposed approach demonstrating how the objectives will be accomplished as outlined in the Scope of Work.

E. Proposed Staffing and Project Team - This section should establish qualifications and experience of staff that will be assigned to the City. Also,

9 identify key personnel to be assigned and their qualifications and experience (detailed).

F. Other Information to Include
• Education, experience, applicable professional credentials of project staff that will be assigned to City
• Provide the identity of key personnel proposed: person’s name, current location, proposed position, current assignment, level of commitment, and how long each person has been with the firm
• A statement that key personnel will be available for the duration of the scope of services and acknowledgement that no person designated as key personnel shall be removed or replaced without the prior written notification to the City.
• It is important that key personnel proposed have the background, experience and qualifications to properly perform the work detailed in the scope of services
G. Insurance - Provide a copy of the firm’s current insurance certificates.

H. Fee - Proposal Sheet with hourly rates of all staff levels anticipated to match the scope of services. Scope of Services broken into task and work to be completed as part of each task including a timeline.

I. Compensation Plan – Consultant shall perform the various services and tasks set forth in the Scope of Work in accordance with the work schedule which will be mutually determined for each project between the Consultant and City staff. Compensation will be paid to the consultant in monthly increments as the Work is completed.

J. Quality Control – The Proposer shall describe the firm’s policies and procedures for assuring high quality work, including monitoring of any proposed sub-contracts.

VII. EVALUATION PROCEDURES
A. Selection Committee
Proposals submitted will be evaluated by City staff, which shall be selected by the City Manager.

B. Review of Proposals
City staff will use a point formula during the review process to individually score Proposals, as outlined in Section C below, “Proposal Evaluation Criteria.” City staff will then be convened to review and discuss the evaluations and combine the individual scores to arrive at an average composite score for each firm. Firms that do not meet the “Mandatory

10 Elements” listed in Section C1 below will be eliminated from further consideration.

After the composite Project Proposal score for each firm has been established based upon the “Qualitative Evaluation” criteria listed in C2, the firms with the three (3) highest score may be recommended by the Finance Director to participate in an oral presentation/interview with the Selection Committee as outlined below.

C. Project Proposal Evaluation Criteria
Proposals will be evaluated using two (2) sets of criteria. Firms meeting the mandatory elements will have their proposals evaluated and scored. The following represent the principal selection criteria which will be considered during the evaluation process. City reserves the right to select any firm that submits a complete and timely proposal notwithstanding the firms overall score in relation to other firms.

1. Mandatory Elements
a. The firm is an independent contractor properly licensed to practice in California.
b. The firm has no conflict of interest with regard to any other work performed by the firm for the City.
c. The firm adheres to the instructions in this RFP on preparing and submitting the proposal.

2. Qualitative Evaluation (Maximum Point = 100)
a. Experience and Performance (50 Points):
i. The firm’s past experience and performance on specific government engagements (i.e. references).
ii. Distinguishing features, skill and/or services (These may include demonstrated experience of the assigned staff to the project). iii. Firm’s statement on why it believes itself to be best qualified (cover letter).
b. Ability to complete work in a timely manner and references (25 points) c. Cost/Value to City (and/or applicants) (25 points)
i. Reasonable rate for Project services

11 ii. Ability to stay within budget.

3. Oral presentation/interview (At the option of the City) The Proposers with the three highest combined scores should expect to be interviewed by the City staff on the date listed in the RFP. Upon completion of the interviews and negotiation of compensation, and/or terms and conditions a contract shall be prepared and submitted to the City Council for approval.

VIII. PROPOSAL SUBMITTAL
Three (3) hard copies of the proposal shall be presented in an envelope or package.

Hard copies should be bound and include the name of the Proposer and the title “City of Cudahy Municipal Financial Advisory Services RFP.” The envelope of package shall bear the name, address, and telephone number of the individual or entity submitting the proposal and shall be addressed as follows:

Office of the City Clerk
City of Cudahy
5220 Santa Ana Street
Cudahy, CA 90201
Proposals can be hand delivered or mailed to the address listed above. Proposals will not be accepted by fax or e-mail.

The proposal shall be delivered to the above address on or before 3:00 P.M. on December 1, 2022.

X. STAFF CONTACT
For inquiries, please contact Joshua Calhoun at (323) 773-5143 or email at [email protected]
Issued by:

CITY OF CUDAHY
Finance Department
____________________________
Joshua Calhoun
Finance Director

APPENDIX A

SAMPLE CONTRACT

PROFESSIONAL SERVICES AGREEMENT
([Replace w/ Name of Consultant - Replace w/ Brief Description of Engagement] ) THIS PROFESSIONAL SERVICES AGREEMENT (“Agreement”) is made and entered into this ___________day of _________________ 20______ (hereinafter, the “Effective Date”), by and between the CITY OF CUDAHY, a municipal corporation (“CITY”) and [____REPLACE WITH NAME OF CONSULTANT____], a [___REPLACE WITH TYPE OF ENTITY, E.G., CORPORATION? PARTNERSHIP? SOLE PROPRIETORSHIP? ETC.____] (hereinafter, “CONSULTANT”). For the purposes of this Agreement CITY and CONSULTANT may be referred to collectively by the capitalized term “Parties.” The capitalized term “Party” may refer to CITY or CONSULTANT interchangeably.

WHEREAS, CITY wishes to engage CONSULTANT to provide the following specialized services:__________________________; and
WHEREAS, CITY’s in-house personnel is presently unable to perform the specialized services and tasks contemplated under this Agreement; and WHEREAS, CONSULTANT possesses the specialized training, skill, expertise and experience required to perform the services contemplated under this Agreement; and WHEREAS, CONSULTANT agrees to perform the various services and tasks set forth under this Agreement subject to the terms and conditions set forth herein; and NOW, THEREFORE, for and in consideration of the mutual covenants and conditions herein contained, CITY and CONSULTANT agree as follows:

I.

ENGAGEMENT TERMS

1.1 SCOPE OF SERVICES: Subject to the terms and conditions set forth in this Agreement and all exhibits attached and incorporated hereto, CONSULTANT agrees to perform the services and tasks set forth in Exhibit “A” (hereinafter referred to as the “Scope of Services”). CONSULTANT further agrees to furnish to CITY all labor, materials, tools, supplies, equipment, services, tasks and incidental and customary work necessary to competently perform and timely complete the services and tasks set forth in the Scope of Services. For the purposes of this Agreement the aforementioned services and tasks set forth in

the Scope of Services shall hereinafter be referred to generally by the capitalized term “Work.”

1.2 TERM: This Agreement shall have a term of [___REPLACE TEXT WITH TERM PERIOD: X# of DAYS? MONTHS? YEARS?] commencing from [_REPLACE TEXT WITH START DATE OF TERM: CAN BE EITHER the “EFFECTIVE DATE”? SOME OTHER DATE?]. [OPTIONAL LANGUAGE: Upon the
conclusion of the Term, this Agreement shall renew automatically for a maximum of [_MAXIMUM NUMBER OF EXTENSION TERMS AND MAXIMUM DURATION OF EACH SUCH EXTENSION TERM. EDITOR’S NOTE: IT IS

RECOMMENDED THAT ANY INDIVIDUAL EXTENSION TERM NOT EXCEED

ONE YEAR IN DURATION AND THAT THE TOTAL NUMBER OF EXTENSION

TERMS NOT EXCEED A MAXIMUM OF TWO YEARS BEYOND THE END OF THE INITIAL TERM] …….., unless CITY issues written notice of its intent not to authorize an additional extension term(s). Nothing in this Section shall operate to prohibit or otherwise restrict the CITY’s ability to terminate this Agreement at any time for convenience or for cause.

1.3 COMPENSATION:

A. CONSULTANT shall perform the various services and tasks set forth in the Scope of Services in accordance with the compensation schedule which is [_____THIS LANGUAGE MAY VARY DEPENDING ON THE LOCATION OF ANY APPLICABLE COMPENSATION SCHEDULE – SOME SCHEDULES

ARE EMBEDDED IN THE SCOPE OF SERVICES WHILE OTHERS CAN BE

FOUND IN A SEPARATE STAND-ALONE SCHEDULE WHICH SHOULD BE ATTACHED AS AN EXHIBIT TO THE AGREEMENT______] (hereinafter, the “Approved Rate Schedule”).

B. Section 1.3(A) notwithstanding, CONSULTANT’s total compensation during the Term of this Agreement or any extension term shall not exceed the budgeted aggregate sum of [___REPLACE WITH NOT-TO-EXCEED SUM____] (hereinafter, the “Not-to-Exceed Sum”), unless such added expenditure is first approved by the CITY acting in consultation with the Superintendent and the Director of Fiscal Services. In the event CONSULTANT’s charges are projected to exceed the Not-to-Exceed Sum prior to the expiration of the Term or any single extension term, CITY may suspend CONSULTANT’s performance pending CITY approval of any anticipated expenditures in excess of the Not-to-Exceed Sum or any other CITY-approved amendment to the compensation terms of this Agreement.

1.4 PAYMENT OF COMPENSATION: Reserved; No text.

1.5 ACCOUNTING RECORDS: CONSULTANT shall maintain complete and accurate records with respect to all matters covered under this Agreement for a period of three (3) years after the expiration or termination of this Agreement.

CITY shall have the right to access and examine such records, without charge, during normal business hours. CITY shall further have the right to audit such records, to make transcripts therefrom and to inspect all program data, documents, proceedings, and activities.

1.6 ABANDONMENT BY CONSULTANT: In the event CONSULTANT ceases to perform the Work agreed to under this Agreement or otherwise abandons the undertaking contemplated herein prior to the expiration of this Agreement or prior to completion of any or all tasks set forth in the Scope of Services, CONSULTANT shall deliver to CITY immediately and without delay, all materials, records and other work product prepared or obtained by CONSULTANT in the performance of this Agreement. Furthermore, CONSULTANT shall only be compensated for the reasonable value of the services, tasks and other work performed up to the time of cessation or abandonment, less a deduction for any damages, costs or additional expenses which CITY may incur as a result of CONSULTANT’s cessation or abandonment.

II.

PERFORMANCE OF AGREEMENT

2.1 CITY’S REPRESENTATIVES: The CITY hereby designates the Superintendent and [____REPLACE WITH TITLE OF CITY REPRESENTATIVE WHO WILL BE

ENGAGED IN THE DAY-TO-DAY ADMINISTRATION OF THE
CONTRACT_______] (hereinafter, the “CITY Representatives”) to act as its representatives for the performance of this Agreement. The Superintendent shall be the chief CITY Representative. The CITY Representatives or their designee shall act on behalf of the CITY for all purposes under this Agreement.

CONSULTANT shall not accept directions or orders from any person other than the CITY Representatives or their designee.

2.2 CONSULTANT REPRESENTATIVE: CONSULTANT hereby designates [__INSERT NAME AND TITLE OF PERSON WHO IS CONSULTANT

REPRESENTATIVE FOR PURPOSES OF CONTRACT
ADMINISTRATION________] to act as its representative for the performance of this Agreement (hereinafter, “CONSULTANT Representative”). CONSULTANT Representative shall have full authority to represent and act on behalf of the CONSULTANT for all purposes under this Agreement. CONSULTANT Representative or his designee shall supervise and direct the performance of the Work, using his best skill and attention, and shall be responsible for all means, methods, techniques, sequences and procedures and for the satisfactory coordination of all portions of the Work under this Agreement. Notice to the CONSULTANT Representative shall constitute notice to CONSULTANT.

2.3 COORDINATION OF SERVICE; CONFORMANCE WITH REQUIREMENTS:

CONSULTANT agrees to work closely with CITY staff in the performance of the Work and this Agreement and shall be available to CITY staff and the CITY

Representatives at all reasonable times. All work prepared by CONSULTANT shall be subject to inspection and approval by CITY Representatives or their designees.

2.4 STANDARD OF CARE; PERFORMANCE OF EMPLOYEES: CONSULTANT represents, acknowledges and agrees to the following:

A. CONSULTANT shall perform all Work skillfully, competently and to the highest standards of CONSULTANT’s profession;
B. CONSULTANT shall perform all Work in a manner reasonably satisfactory to the CITY;
C. CONSULTANT shall comply with all applicable federal, state and local laws and regulations, including the conflict of interest provisions of Government Code Section 1090 and the Political Reform Act (Government Code Section 81000 et seq.);
D. CONSULTANT understands the nature and scope of the Work to be performed under this Agreement as well as any and all schedules of performance;
E. All of CONSULTANT’s employees and agents possess sufficient skill, knowledge, training and experience to perform those services and tasks assigned to them by CONSULTANT; and
F. All of CONSULTANT’s employees and agents (including but not limited subcontractors and subconsultants) possess all licenses, permits, certificates, qualifications and approvals of whatever nature that are legally required to perform the tasks and services contemplated under this Agreement and all such licenses, permits, certificates, qualifications and approvals shall be maintained throughout the term of this Agreement and made available to CITY for copying and inspection.

The Parties acknowledge and agree that CONSULTANT shall perform, at CONSULTANT’s own cost and expense and without any reimbursement from CITY, any services necessary to correct any errors or omissions caused by CONSULTANT’s failure to comply with the standard of care set forth under this Section or by any like failure on the part of CONSULTANT’s employees, agents, contractors, subcontractors and subconsultants. Such effort by CONSULTANT to correct any errors or omissions shall be commenced immediately upon their discovery by either Party and shall be completed within seven (7) calendars days from the date of discovery or such other extended period of time authorized by the CITY Representatives in writing and in their sole and absolute discretion.

The Parties acknowledge and agree that CITY’s acceptance of any work

performed by CONSULTANT or on CONSULTANT’s behalf shall not constitute a release of any deficiency or delay in performance. The Parties further acknowledge, understand and agree that CITY has relied upon the foregoing representations of CONSULTANT, including but not limited to the representation that CONSULTANT possesses the skills, training, knowledge and experience necessary to perform the Work skillfully, competently and to the highest standards of CONSULTANT’s profession.

2.5 ASSIGNMENT: The skills, training, knowledge and experience of CONSULTANT are material to CITY’s willingness to enter into this Agreement. Accordingly, CITY has an interest in the qualifications and capabilities of the person(s) who will perform the services and tasks to be undertaken by CONSULTANT or on behalf of CONSULTANT in the performance of this Agreement. In recognition of this interest, CONSULTANT agrees that it shall not assign or transfer, either directly or indirectly or by operation of law, this Agreement or the performance of any of CONSULTANT’s duties or obligations under this Agreement without the prior written consent of the CITY. In the absence of CITY’s prior written consent, any attempted assignment or transfer shall be ineffective, null and void and shall constitute a material breach of this Agreement.

2.6 CONTROL AND PAYMENT OF SUBORDINATES; INDEPENDENT
CONTRACTOR: The Work shall be performed by CONSULTANT or under CONSULTANT’s strict supervision. CONSULTANT will determine the means, methods and details of performing the Work subject to the requirements of this Agreement. CITY retains CONSULTANT on an independent contractor basis and not as an employee. CONSULTANT reserves the right to perform similar or different services for other principals during the term of this Agreement, provided such work does not unduly interfere with CONSULTANT’s competent and timely performance of the Work contemplated under this Agreement and provided the performance of such services does not result in the unauthorized disclosure of CITY’s confidential or proprietary information. Any additional personnel performing the Work under this Agreement on behalf of CONSULTANT are not employees of CITY and shall at all times be under CONSULTANT’s exclusive direction and control. CONSULTANT shall pay all wages, salaries and other amounts due such personnel and shall assume responsibility for all benefits, payroll taxes, Social Security and Medicare payments and the like.

CONSULTANT shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: Social Security taxes, income tax withholding, unemployment insurance, disability insurance, workers’ compensation insurance and the like.

2.7 REMOVAL OF EMPLOYEES OR AGENTS: If any of CONSULTANT’s officers, employees, agents, contractors, subcontractors or subconsultants is determined by the CITY Representatives to be uncooperative, incompetent, a threat to the adequate or timely performance of the tasks assigned to CONSULTANT, a threat to persons or property, or if any of CONSULTANT’s officers, employees, agents,

contractors, subcontractors or subconsultants fail or refuse to perform the Work in a manner acceptable to the CITY, such officer, employee, agent, contractor, subcontractor or subconsultant shall be promptly removed by CONSULTANT and shall not be re-assigned to perform any of the Work.

2.8 COMPLIANCE WITH LAWS: CONSULTANT shall keep itself informed of and in compliance with all applicable federal, State or local laws to the extent such laws control or otherwise govern the performance of the Work. CONSULTANT’s compliance with applicable laws shall include without limitation compliance with all applicable Cal/OSHA requirements.

2.9 NON-DISCRIMINATION: In the performance of this Agreement, CONSULTANT shall not discriminate against any employee, subcontractor, subconsultant, or applicant for employment because of race, color, creed, religion, sex, marital status, sexual orientation, national origin, ancestry, age, physical or mental disability or medical condition.

2.10 INDEPENDENT CONTRACTOR STATUS: The Parties acknowledge, understand and agree that CONSULTANT and all persons retained or employed by CONSULTANT are, and shall at all times remain, wholly independent contractors and are not officials, officers, employees, departments or subdivisions of CITY. CONSULTANT shall be solely responsible for the negligent acts and/or omissions of its employees, agents, contractors, subcontractors and subconsultants. CONSULTANT and all persons retained or employed by CONSULTANT shall have no authority, express or implied, to bind CITY in any manner, nor to incur any obligation, debt or liability of any kind on behalf of, or against, CITY, whether by contract or otherwise, unless such authority is expressly conferred to CONSULTANT under this Agreement or is otherwise expressly conferred by CITY in writing.

III.

INSURANCE

3.1 DUTY TO PROCURE AND MAINTAIN INSURANCE: Prior to the beginning of and throughout the duration of the Work, CONSULTANT will procure and maintain polices of insurance that meet the requirements and specifications set forth under this Article. CONSULTANT shall procure and maintain the following insurance coverage, at its own expense:

A. Commercial General Liability Insurance: CONSULTANT shall procure and maintain Commercial General Liability Insurance (“CGL Coverage”) as broad as Insurance Services Office Commercial General Liability coverage (occurrence Form CG 0001) or its equivalent. Such CGL Coverage shall have minimum limits of no less than One Million Dollars ($1,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) in the general aggregate

for bodily injury, personal injury, property damage, operations, products and completed operations, and contractual liability.

B. Automobile Liability Insurance: CONSULTANT shall procure and maintain Automobile Liability Insurance as broad as Insurance Services Office Form Number CA 0001 covering Automobile Liability, Code 1 (any auto). Such Automobile Liability Insurance shall have minimum limits of no less than One Million Dollars ($1,000,000.00) per accident for bodily injury and property damage.

C. Workers’ Compensation Insurance/ Employer’s Liability Insurance: A policy of workers’ compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure and provide legal defense for both CONSULTANT and CITY against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by CONSULTANT in the course of carrying out the Work contemplated in this Agreement.

D. Errors & Omissions Insurance: For the full term of this Agreement and for a period of three (3) years thereafter, CONSULTANT shall procure and maintain Errors and Omissions Liability Insurance appropriate to CONSULTANT’s profession. Such coverage shall have minimum limits of no less than One Million Dollars ($1,000,000.00) per occurrence and shall be endorsed to include contractual liability.

3.2 ADDITIONAL INSURED REQUIREMENTS: The CGL Coverage and the Automobile Liability Insurance shall contain an endorsement naming the CITY and CITY’s elected and appointed officials, officers, employees, agents and volunteers as additional insureds.

3.3 REQUIRED CARRIER RATING: All varieties of insurance required under this Agreement shall be procured from insurers admitted in the State of California and authorized to issue policies directly to California insureds. Except as otherwise provided elsewhere under this Article, all required insurance shall be procured from insurers who, according to the latest edition of the Best’s Insurance Guide, have an A.M. Best’s rating of no less than A:VII. CITY may also accept policies procured by insurance carriers with a Standard & Poor’s rating of no less than BBB according to the latest published edition the Standard & Poor’s rating guide.

As to Workers’ Compensation Insurance/ Employer’s Liability Insurance, the CITY Representatives are authorized to authorize lower ratings than those set forth in this Section.

3.4 PRIMACY OF CONSULTANT’S INSURANCE: All polices of insurance provided by CONSULTANT shall be primary to any coverage available to CITY or CITY’s elected or appointed officials, officers, employees, agents or volunteers. Any insurance or self-insurance maintained by CITY or CITY’s elected or appointed

officials, officers, employees, agents or volunteers shall be in excess of CONSULTANT’s insurance and shall not contribute with it.

3.5 WAIVER OF SUBROGATION: All insurance coverage provided pursuant to this Agreement shall not prohibit CONSULTANT or CONSULTANT’s officers, employees, agents, subcontractors or subconsultants from waiving the right of subrogation prior to a loss. CONSULTANT hereby waives all rights of subrogation against CITY.

3.6 VERIFICATION OF COVERAGE: CONSULTANT acknowledges, understands and agrees, that CITY’s ability to verify the procurement and maintenance of the insurance required under this Article is critical to safeguarding CITY’s financial well-being and, indirectly, the collective well-being of the residents of the CITY.

Accordingly, CONSULTANT warrants, represents and agrees that its shall furnish CITY with original certificates of insurance and endorsements evidencing the coverage required under this Article on forms satisfactory to CITY in its sole and absolute discretion. The certificates of insurance and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the CITY if requested. All certificates of insurance and endorsements shall be received and approved by CITY as a condition precedent to CONSULTANT’s commencement of any work or any of the Work. Upon CITY’s written request, CONSULTANT shall also provide CITY with certified copies of all required insurance policies and endorsements.

IV.

INDEMNIFICATION

4.1 The Parties agree that CITY and CITY’s elected and appointed officials, officers, employees, agents and volunteers (hereinafter, the “CITY Indemnitees”) should, to the fullest extent permitted by law, be protected from any and all loss, injury, damage, claim, lawsuit, cost, expense, attorneys’ fees, litigation costs, or any other cost arising out of or in any way related to the performance of this Agreement. Accordingly, the provisions of this indemnity provision are intended by the Parties to be interpreted and construed to provide the CITY Indemnitees with the fullest protection possible under the law. CONSULTANT acknowledges that CITY would not enter into this Agreement in the absence of CONSULTANT’s commitment to indemnify, defend and protect CITY as set forth herein.

4.2 To the fullest extent permitted by law, CONSULTANT shall indemnify, hold harmless and defend the CITY Indemnitees from and against all liability, loss, damage, expense, cost (including without limitation reasonable attorneys’ fees, expert fees and all other costs and fees of litigation) of every nature arising out of or in connection with CONSULTANT’s performance of work hereunder or its failure to comply with any of its obligations contained in this Agreement, except

such loss or damage which is caused by the sole negligence or willful misconduct of the CITY.

4.3 CITY shall have the right to offset against the amount of any compensation due CONSULTANT under this Agreement any amount due CITY from CONSULTANT as a result of CONSULTANT’s failure to pay CITY promptly any indemnification arising under this Article and related to CONSULTANT’s failure to either (i) pay taxes on amounts received pursuant to this Agreement or (ii) comply with applicable workers’ compensation laws.

4.4 The obligations of CONSULTANT under this Article will not be limited by the provisions of any workers’ compensation act or similar act. CONSULTANT expressly waives its statutory immunity under such statutes or laws as to CITY and CITY’s elected and appointed officials, officers, employees, agents and volunteers.

4.5 CONSULTANT agrees to obtain executed indemnity agreements with provisions identical to those set forth here in this Article from each and every subcontractor or any other person or entity involved by, for, with or on behalf of CONSULTANT in the performance of this Agreement. In the event CONSULTANT fails to obtain such indemnity obligations from others as required herein, CONSULTANT agrees to be fully responsible and indemnify, hold harmless and defend CITY and CITY’s elected and appointed officials, officers, employees, agents and volunteers from and against any and all claims and losses, costs or expenses for any damage due to death or injury to any person and injury to any property resulting from any alleged intentional, reckless, negligent, or otherwise wrongful acts, errors or omissions of CONSULTANT’s subcontractors or any other person or entity involved by, for, with or on behalf of CONSULTANT in the performance of this Agreement. Such costs and expenses shall include reasonable attorneys’ fees incurred by counsel of CITY’s choice.

4.6 CITY does not, and shall not, waive any rights that it may possess against CONSULTANT because of the acceptance by CITY, or the deposit with CITY, of any insurance policy or certificate required pursuant to this Agreement. This hold harmless and indemnification provision shall apply regardless of whether or not any insurance policies are determined to be applicable to the claim, demand, damage, liability, loss, cost or expense.

4.7 This Article and all provisions contained herein (including but not limited to the duty to indemnify, defend and hold free and harmless) shall survive the termination or normal expiration of this Agreement and is in addition to any other rights or remedies which the CITY may have at law or in equity.

V.

TERMINATION

5.1 TERMINATION WITHOUT CAUSE: CITY may terminate this Agreement at any time for convenience and without cause by giving CONSULTANT a minimum of five (5) calendar days prior written notice of CITY’s intent to terminate this Agreement. Upon such termination for convenience, CONSULTANT shall be compensated only for those services and tasks which have been performed by CONSULTANT up to the effective date of the termination. CONSULTANT may not terminate this Agreement except for cause as provided under Section 5.2, below. If this Agreement is terminated as provided herein, CITY may require CONSULTANT to provide all finished or unfinished Documents and Data, as defined in Section 7.1 below, and other information of any kind prepared by CONSULTANT in connection with the performance of the Work. CONSULTANT shall be required to provide such Documents and Data within fifteen (15) calendar days of CITY’s written request. No actual or asserted breach of this Agreement on the part of CITY pursuant to Section 5.2, below, shall operate to prohibit or otherwise restrict CITY’s ability to terminate this Agreement for convenience as provided under this Section.

5.2 EVENTS OF DEFAULT; BREACH OF AGREEMENT:

A. In the event either Party fails to perform any duty, obligation, service or task set forth under this Agreement (or fails to timely perform or properly perform any such duty, obligation, service or task set forth under this Agreement), an event of default (hereinafter, “Event of Default”) shall occur. For all Events of Default, the Party alleging an Event of Default shall give written notice to the defaulting Party (hereinafter referred to as a “Default Notice”) which shall specify: (i) the nature of the Event of Default; (ii) the action required to cure the Event of Default; (iii) a date by which the Event of Default shall be cured, which shall not be less than the applicable cure period set forth under Sections 5.2.B and 5.2C below or if a cure is not reasonably possible within the applicable cure period, to begin such cure and diligently prosecute such cure to completion. The Event of Default shall constitute a breach of this Agreement if the defaulting Party fails to cure the Event of Default within the applicable cure period or any extended cure period allowed under this Agreement.

B. CONSULTANT shall cure the following Events of Defaults within the following time periods:
i. Within three (3) business days of CITY’s issuance of a Default Notice for any failure of CONSULTANT to timely provide CITY or CITY’s employees or agents with any information and/or written reports, documentation or work product which CONSULTANT is obligated to provide to CITY or CITY’s employees or agents under this Agreement. Prior to the expiration of the 3-day cure period, CONSULTANT may submit a written request for additional time to cure the Event of Default upon a showing that CONSULTANT has

commenced efforts to cure the Event of Default and that the Event of Default cannot be reasonably cured within the 3-day cure period.

The foregoing notwithstanding, CITY shall be under no obligation to grant additional time for the cure of an Event of Default under this Section 5.2 B.i. that exceeds seven (7) calendar days from the end of the initial 3-day cure period; or
ii. Within fourteen (14) calendar days of CITY’s issuance of a Default Notice for any other Event of Default under this Agreement. Prior to the expiration of the 14-day cure period, CONSULTANT may submit a written request for additional time to cure the Event of Default upon a showing that CONSULTANT has commenced
efforts to cure the Event of Default and that the Event of Default cannot be reasonably cured within the 14-day cure period. The foregoing notwithstanding, CITY shall be under no obligation to grant additional time for the cure of an Event of Default under this Section 5.2B.ii that exceeds thirty (30) calendar days from the end of the initial 14-day cure period.

In addition to any other failure on the part of CONSULTANT to perform any duty, obligation, service or task set forth under this Agreement (or the failure to timely perform or properly perform any such duty, obligation, service or task), an Event of Default on the part of CONSULTANT shall include, but shall not be limited to the following: (i) CONSULTANT’s refusal or failure to perform any of the services or tasks called for under the Scope of Services; (ii) CONSULTANT’s failure to fulfill or perform its obligations under this Agreement within the specified time or if no time is specified, within a reasonable time; (iii) CONSULTANT’s and/or its employees’ disregard or violation of any federal, state, local law, rule, procedure or regulation; (iv) the initiation of proceedings under any bankruptcy, insolvency, receivership, reorganization, or similar legislation as relates to CONSULTANT, whether voluntary of involuntary; (v) CONSULTANT’s refusal or failure to perform or observe any covenant, condition, obligation or provision of this Agreement; and/or (vii) CITY’s discovery that a statement representation or warranty by CONSULTANT relating to this Agreement is false, misleading or erroneous in any material respect.

C. CITY shall cure any Event of Default asserted by CONSULTANT within forty-five (45) calendar days of CONSULTANT’s issuance of a Default Notice, unless the Event of Default cannot reasonably be cured within the 45-day cure period. Prior to the expiration of the 45-day cure period, CITY may submit a written request for additional time to cure the Event of Default upon a showing that CITY has commenced its efforts to cure the Event of Default and that the Event of Default cannot be reasonably cured within the 45-day cure period. The foregoing notwithstanding, an Event of

Default dealing with CITY’s failure to timely pay any undisputed sums to CONSULTANT as provided under Section 1.4, above, shall be cured by CITY within five (5) calendar days from the date of CONSULTANT’s Default Notice to CITY.

D. CITY, in its sole and absolute discretion, may also immediately suspend CONSULTANT’s performance under this Agreement pending
CONSULTANT’s cure of any Event of Default by giving CONSULTANT written notice of CITY’s intent to suspend CONSULTANT’s performance (hereinafter, a “Suspension Notice”). CITY may issue the Suspension Notice at any time upon the occurrence of an Event of Default. Upon such suspension, CONSULTANT shall be compensated only for those services and tasks which have been rendered by CONSULTANT to the reasonable satisfaction of CITY up to the effective date of the suspension. No actual or asserted breach of this Agreement on the part of CITY shall operate to prohibit or otherwise restrict CITY’s ability to suspend this Agreement as provided herein.

E. No waiver of any Event of Default or breach under this Agreement shall constitute a waiver of any other or subsequent Event of Default or breach.

No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise.

F. The duties and obligations imposed under this Agreement and the rights and remedies available hereunder shall be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law. In addition to any other remedies available to CITY at law or under this Agreement in the event of any breach of this Agreement, CITY, in its sole and absolute discretion, may also pursue any one or more of the following remedies:
i. Upon written notice to CONSULTANT, the CITY may immediately terminate this Agreement in whole or in part;
ii. Upon written notice to CONSULTANT, the CITY may extend the time of performance;
iii. The CITY may proceed by appropriate court action to enforce the terms of the Agreement to recover damages for CONSULTANT’s breach of the Agreement or to terminate the Agreement; or iv. The CITY may exercise any other available and lawful right or remedy.

CONSULTANT shall be liable for all legal fees plus other costs and expenses that CITY incurs upon a breach of this Agreement or in the CITY’s exercise of its remedies under this Agreement.

G. In the event CITY is in breach of this Agreement, CONSULTANT’s sole remedy shall be the suspension or termination of this Agreement and/or the recovery of any unpaid sums lawfully owed to CONSULTANT under this Agreement for completed services and tasks.

5.3 SCOPE OF WAIVER: No waiver of any default or breach under this Agreement shall constitute a waiver of any other default or breach, whether of the same or other covenant, warranty, agreement, term, condition, duty or requirement contained in this Agreement. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise.

5.4 SURVIVING ARTICLES, SECTIONS AND PROVISIONS: The termination of this Agreement pursuant to any provision of this Article or by normal expiration of its term or any extension thereto shall not operate to terminate any Article, Section or provision contained herein which provides that it shall survive the termination or normal expiration of this Agreement.

VI.

MISCELLANEOUS PROVISIONS

6.1 DOCUMENTS & DATA; LICENSING OF INTELLECTUAL PROPERTY: All Documents and Data shall be and remain the property of CITY without restriction or limitation upon their use or dissemination by CITY. For purposes of this Agreement, the term “Documents and Data” means and includes all reports, analyses, correspondence, plans, drawings, designs, renderings, specifications, notes, summaries, strategies, charts, schedules, spreadsheets, calculations, lists, data compilations, documents or other materials developed and/or assembled by or on behalf of CONSULTANT in the performance of this Agreement and fixed in any tangible medium of expression, including but not limited to Documents and Data stored digitally, magnetically and/or electronically.

This Agreement creates, at no cost to CITY, a perpetual license for CITY to copy, use, reuse, disseminate and/or retain any and all copyrights, designs, and other intellectual property embodied in all Documents and Data. CONSULTANT shall require all subcontractors and subconslutants working on behalf of CONSULTANT in the performance of this Agreement to agree in writing that CITY shall be granted the same right to copy, use, reuse, disseminate and retain Documents and Data prepared or assembled by any subcontractor or subconsultant as applies to Documents and Data prepared by CONSULTANT in the performance of this Agreement.

6.2 CONFIDENTIALITY: All data, documents, discussion, or other information developed or received by CONSULTANT or provided for performance of this Agreement are deemed confidential and shall not be disclosed by CONSULTANT without prior written consent by CITY. CITY shall grant such consent if disclosure is legally required. Upon request, all CITY data shall be returned to CITY upon the termination or expiration of this Agreement.

CONSULTANT shall not use CITY’s name or insignia, photographs, or any publicity pertaining to the Work in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of CITY.

6.3 FALSE CLAIMS ACT: CONSULTANT warrants and represents that neither CONSULTANT nor any person who is an officer of, in a managing position with, or has an ownership interest in CONSULTANT has been determined by a court or tribunal of competent jurisdiction to have violated the False Claims Act, 31 U.S.C., Section 3789 et seq. and the California False Claims Act, Government Code Section 12650 et seq.

6.4 NOTICES: All notices permitted or required under this Agreement shall be given to the respective Parties at the following addresses, or at such other address as the respective Parties may provide in writing for this purpose:

CONSULTANT: CITY:
[_REPLACE WITH Business Name of
Consultant_]
[_REPLACE WITH Business
Address_]
Attn: [_REPLACE WITH Name/Title of
Consultant’s chief contact ___]
Phone: [_REPLACE WITH Phone
Number_]
Fax: [_REPLACE WITH Fax
Number__]
Email: [_If available, REPLACE WITH
e-mail or simply delete_]
City of Cudahy
[Insert Name of Department/Division]
5220 Santa Ana Street
Cudahy, CA 90201
Attn: [___Title of CITY Contact___]
Phone: [___REPLACE WITH Dept
Phone__]
Fax: [___REPLACE WITH Dept
Fax___]
Such notices shall be deemed effective when personally delivered or successfully transmitted by facsimile as evidenced by a fax confirmation slip or when mailed, forty-eight (48) hours after deposit with the United States Postal Service, first class postage prepaid and addressed to the Party at its applicable address.

6.5 COOPERATION; FURTHER ACTS: The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as is reasonably necessary, appropriate or convenient to achieve the purposes of this Agreement.

6.6 SUBCONTRACTING: CONSULTANT shall not subcontract any portion of the Work required by this Agreement, except as expressly stated herein, without the prior written approval of CITY. Subcontracts (including without limitation subcontracts with subconsultants), if any, shall contain a provision making them subject to all provisions stipulated in this Agreement, including provisions relating to insurance requirements and indemnification.

6.7 CITY’S RIGHT TO EMPLOY OTHER CONSULTANTS: CITY reserves the right to employ other contractors in connection with the various projects worked upon by CONSULTANT.

6.8 PROHIBITED INTERESTS: CONSULTANT warrants, represents and maintains that it has not employed nor retained any company or person, other than a bona fide employee working solely for CONSULTANT, to solicit or secure this Agreement. Further, CONSULTANT warrants and represents that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for CONSULTANT, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, CITY shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of CITY, during the term of his or her service with CITY, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.

6.9 TIME IS OF THE ESSENCE: Time is of the essence for each and every provision of this Agreement.

6.10 GOVERNING LAW AND VENUE: This Agreement shall be interpreted and governed according to the laws of the State of California. In the event of litigation between the Parties, venue, without exception, shall be in the Los Angeles County Superior Court of the State of California. If, and only if, applicable law requires that all or part of any such litigation be tried exclusively in federal court, venue, without exception, shall be in the Central District of California located in the City of Los Angeles, California.

6.11 ATTORNEYS’ FEES: If either Party commences an action against the other Party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing Party in such litigation shall be entitled to have and recover from the losing Party reasonable attorneys’ fees and all other costs of such action.

6.12 SUCCESSORS AND ASSIGNS: This Agreement shall be binding on the successors and assigns of the Parties.

6.13 NO THIRD PARTY BENEFIT: There are no intended third party beneficiaries of any right or obligation assumed by the Parties. All rights and benefits under this Agreement inure exclusively to the Parties.

6.14 CONSTRUCTION OF AGREEMENT: This Agreement shall not be construed in favor of, or against, either Party but shall be construed as if the Parties prepared this Agreement together through a process of negotiation and with the advice of their respective attorneys.

6.15 SEVERABILITY: If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

6.16 AMENDMENT; MODIFICATION: No amendment, modification or supplement of this Agreement shall be valid or binding unless executed in writing and signed by both Parties, subject to CITY approval. The requirement for written amendments, modifications or supplements cannot be waived and any attempted waiver shall be void and invalid.

6.17 CAPTIONS: The captions of the various articles, sections and paragraphs are for convenience and ease of reference only, and do not define, limits, augment, or describe the scope, content, or intent of this Agreement.

6.18 INCONSISTENCIES OR CONFLICTS: In the event of any conflict or inconsistency between the provisions of this Agreement and any of the exhibits attached hereto, the provisions of this Agreement shall control.

6.19 ENTIRE AGREEMENT: This Agreement including all attached exhibits is the entire, complete, final and exclusive expression of the Parties with respect to the matters addressed herein and supersedes all other agreements or understandings, whether oral or written, or entered into between CITY and CONSULTANT prior to the execution of this Agreement. No statements, representations or other agreements, whether oral or written, made by any Party which are not embodied herein shall be valid or binding. No amendment, modification or supplement to this Agreement shall be valid and binding unless in writing and duly executed by the Parties pursuant to Section 6.15, above.

6.20 COUNTERPARTS: .This Agreement shall be executed in three (3) original counterparts each of which shall be of equal force and effect. No handwritten or typewritten amendment, modification or supplement to any one counterparts shall be valid or binding unless made to all three counterparts in conformity with Section 6.16, above. One fully executed original counterpart shall be delivered to CONSULTANT and the remaining two original counterparts shall be retained by CITY.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed the day and year first appearing in this Agreement, above.

CITY OF CUDAHY:

By:______________________________
Alfonso Noyola, City Manager
Date:_____________________________

[REPLACE WITH BUSINESS NAME OF
CONSULTANT, E.G., ACME CORP., A
CALIFORNIA CORPORATION ETC.]:

By:______________________________
Name:____________________________
Title:_____________________________
Date:_____________________________
APPROVED AS TO FORM:

By:______________________________

Date:_____________________________

APPENDIX B

MUNICIPAL FINANCIAL ADVISORY SERVICES RFP

SUMMARY SHEET
Firm Name:____________________________________________________________ Firm Parent or Ownership: ________________________________________________ Firm Address: __________________________________________________________ ______________________________________________________________________ Firm Telephone Number: _____________________ Fax Number: _________________ Firm Email Address: _____________________________________________________ Firm Website: __________________________________________________________ Number of years in existence: _____________________
Management Contact (person authorized to sign an agreement for the firm; and ultimately responsible for services required for this Request for Proposal:

Name: _____________________________________ Title: ______________________ Telephone Number: __________________________ Fax: ______________________ Email: ________________________________________________________________ Types of series provided by your firm: _______________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________

APPENDIX C

MUNICIPAL FINANCIAL ADVIROSY SERVICES RFP
CERTIFICATION OF FIRM’S ACCEPTANCE OF CITY OF
CUDAHY’S PROFESSIONAL SERVICES AGREEMENTAND
PROPOSAL FOR MODIFICATION OF TERMS (if any)
By signing this form below, the firm certifies that the attached Agreement in Appendix B is acceptable to the firm and will be signed upon selection of the firm to perform consulting services for the City of Cudahy, except for request for modification of the agreement (if any), as specifically described below (or listing modifications by number that refer to attached sheets if necessary).

Name and Signature of Firm’s Management Representative authorized to sign an agreement:

Name Title
Signature Date
Firm Name:

APPENDIX D

MUNICIPAL FINANCIAL ADVISORY SERVICES RFP

FALSE CLAIMS FORM

CITY OF CUDAHY

CITY HALL
5220 SANTA ANA STREET
CUDAHY, CALIFORNIA 90201

FALSE CLAIMS/

FALSE CLAIMS ACT CERTIFICATION
(MUNICIPAL FINANCIAL ADVISORY SERVICES RFP)
Proposer shall provide either the certification requested below or the information requested on the next page. Failure to certify or provide the requested information may result in a determination that the Proposer is non-responsive and City may reject the proposal on this basis. Failure to fully and accurately provide the requested certification or information may result in a determination that the Proposer is not responsible and City may reject the proposal on this basis as well. “False Claims Act”, as used herein, is defined as either or both the Federal False Claims Act, 31 U.S.C. Sections 3729 et seq., and the California False Claims Act, Government Code Sections 12650 et seq.

FALSE CLAIMS ACT CERTIFICATION
If the Proposer has no False Claims Act violations as described above, complete the following:

I, , am the ______________________________
(Print name of person responsible for submitting proposal) (Title with proposing entity) of________________________________________________(hereinafter, “Proposer”). (Print Name of Proposing Entity)
In submitting a proposal to the City of Cudahy, I, hereby certify that neither Proposer nor any person who is an officer of, in a managing position with, or has an ownership interest in Proposer has been determined by a court or tribunal of competent jurisdiction to have violated the False Claims Act as defined above.

I declare under penalty of perjury that the foregoing is true and correct.

Executed this day of at ______________________________
(month and year) (city and state)
By
(Signature of Person Responsible for Submitting Proposal on behalf of Proposer)

FALSE CLAIMS ACT VIOLATIONS INFORMATION
(1) Date of Determination of Violation: _ _____
______________________________________________________________________ (2) Identity of tribunal or court and case name or number, if any: _________________ ______________________________________________________________________ (3) Government Contract or project involved: ________________________________ ______________________________________________________________________ (4) Government agency involved: _________________________________________ ______________________________________________________________________ (5) Amount of fine imposed: ______________________________________________ (6) Exculpatory Information: _______________________________________________ ______________________________________________________________________ ______________________________________________________________________

DECLARATION
I, , the _____
(Print name of person responsible for submitting proposal) (Title with proposing entity) of ________________________________________________(hereinafter, “Proposer”) (Print Name of Proposing Entity)
I declare under penalty of perjury that the above information is true and correct.

Executed this day of at ______________________________
(month and year) (city and state)
by ___________________________________________________________________ (Signature of Person Responsible for Submitting Proposal on behalf of Proposer)

END OF DOCUMENT

APPENDIX E

MUNICIPAL FINANCIAL ADVISORY SERVICES RFP

CIVIL LITIGATION HISTORY

CITY OF CUDAHY

CITY HALL
5220 SANTA ANA STREET
CUDAHY, CALIFORNIA 90201

CIVIL LITIGATION HISTORY/

CIVIL LITIGATION CERTIFICATION
(MUNICIPAL FINANCIAL ADVISORY SERVICES RFP)
Proposer shall provide either the certification requested below or information requested on the next page. Failure to provide such certification or information may result in a determination that the Proposer is nonresponsive. Failure to fully and accurately provide the requested certification or information may result in a determination that the Proposer is not responsible. For the five (5) years preceding the date of submittal of this Proposal, identify any civil litigation arising out of the performance of a procurement contract within the State of California in which any of the following was a named plaintiff or defendant in a lawsuit brought by or against the entity soliciting Proposals: the Proposer submitting the instant Proposal, including any person who is an officer of, or in a managing position with, or has an ownership interest in the entity submitting the Proposal. Do not include litigation which is limited solely to enforcement of mechanics' liens or stop notices. Provide on the following page labeled “Civil Litigation History Information:” (i) the name and court case identification number of each case, (ii) the jurisdiction in which it was filed, and (iii) the outcome of the litigation, e.g., whether the case is pending, a judgment was entered, a settlement was reached, or the case was dismissed.

CIVIL LITIGATION CERTIFICATION
If the Proposer has no civil litigation history to report as described above, complete the following:

I, , am the ______________________________
(Print name of person responsible for submitting Proposal) (Title with Proposing Entity) of _______________________________________________(hereinafter, “Proposer”). (Print Name of Proposing Entity)
In submitting a Proposal to the City of Cudahy for Municipal Financial Advisory Services, I, hereby certify that neither Proposer nor any person who is an officer of, in a managing position with, or has an ownership interest in Proposer has been involved in civil litigation as described, above.

I declare under penalty of perjury that the foregoing is true and correct.

Executed this day of at
(month and year) (city and state)
by
(Signature of Person Responsible for Submitting Proposal on behalf of Proposer)

CIVIL LITIGATION HISTORY INFORMATION
(1) Name of Case: _____________________________________________________ ______________________________________________________________________ (2) Court case identification number: _______________________________________ (3) Jurisdiction in which case was filed: _____________________________________ (4) Outcome of the case: ________________________________________________ ______________________________________________________________________ ______________________________________________________________________ (5) Name of Case: _____________________________________________________ ______________________________________________________________________ (6) Court case identification number: _______________________________________ (7) Jurisdiction in which case was filed: _____________________________________ (8) Outcome of the case: ________________________________________________ ______________________________________________________________________ ______________________________________________________________________

DECLARATION
I, ____, the
(Print name of person responsible for submitting Proposal) (Title with Proposing Entity) of (hereinafter, “Proposer”)
(Print Name of Proposing Entity)
I declare under penalty of perjury that the above information is true and correct.

Executed this day of at ______________________________
(month and year) (city and state)
by ___________________________________________________________________ (Signature of Person Responsible for Submitting Proposal on behalf of Proposer)

END OF DOCUMENT

20 EXHIBIT “B”

CONSULTANT PROPOSAL

CITY OF CUDAHY

MUNICIPAL FINANCIAL ADVISORY

SERVICES RFP
BY
DECEMBER 1,
2022

PROPOSAL TO PROVIDE MUNICIPAL FINANCIAL ADVISORY SERVICES - NHA ADVISORS, LLC

TABLE OF CONTENTS
A. GENERAL OVERVIEW/COVER LETTER.......................................................................................................................1 Firm Overview .................................................................................................................................................2 B. ORGANIZATIONAL INFORMATION............................................................................................................................3 C. PREVIOUS EXPERIENCE..........................................................................................................................................4 Examples of Work Comparable to the City’s Scope of Services......................................................................4 References.......................................................................................................................................................7 D. PROCEDURES AND METHODOLOGY .........................................................................................................................8 General Municipal Advisory Services..............................................................................................................8 Land/Property Acquisition ..............................................................................................................................9 Financing Plan/Pricing/Structuring/Credit Enhancement...............................................................................9 E. PROPOSED STAFFING AND PROJECT TEAM .............................................................................................................14 F. OTHER INFORMATION TO INCLUDE .......................................................................................................................15 G. INSURANCE .......................................................................................................................................................15 H. FEE..................................................................................................................................................................16 I. COMPENSATION PLAN ........................................................................................................................................16 J. QUALITY CONTROL.............................................................................................................................................17 APPENDIX A: NHA ADVISORS SUMMARY SHEET
APPENDIX B: ACCEPTANCE OF CITY’S PROFESSIONAL SERVICES AGREEMENT AND PROPOSAL FOR MODIFICATION OF TERMS APPENDIX C: FALSE CLAIMS FORM
APPENDIX D: CIVIL LITIGATION HISTORY
APPENDIX E: NHA’S CALIFORNIA STATE FILING INFORMATION
APPENDIX F: NHA ADVISORS INSURANCE CERTIFICATE
APPENDIX G: NHA STAFF RESUMES
APPENDIX H: REQUIRED DISCLOSURES

PROPOSAL TO PROVIDE MUNICIPAL FINANCIAL ADVISORY SERVICES - NHA ADVISORS, LLC 1 | P AGE
A. GENERAL OVERVIEW/COVER LETTER
December 1, 2022
Joshua Calhoun
Office of the City Clerk
City of Cudahy
5220 Santa Ana Street
Cudahy, CA 90201
RE: City of Cudahy - RFP for Municipal Financial Advisory Services (NHA Advisors, LLC) Dear Joshua,
NHA Advisors, LLC (“NHA”) is pleased to submit our proposal to continue providing municipal advisory services to the City of Cudahy (the “City”). NHA is one of the top municipal advisors for California cities (according to data published by the California State Treasurer from January 2018 - Present). While other financial advisory firms may focus on the State, school districts, counties, and conduit issuers, NHA has established itself as a leader in local government (especially California cities). Since 2000, NHA has worked with over 100 California cities and towns on transactions from under $1,000,000 to over $400,000,000.

NHA worked with the City earlier this year to develop property acquisition funding strategies and analyze the City’s financing capacity. We understand the City has great opportunities in the commercial corridor that it would like to leverage to jumpstart and diversify the City’s future revenue streams. With the recent passage of the City’s Measure BA, the City’s General Fund will benefit from the new revenue stream and the ability to leverage off those funds to generate additional proceeds for economic development opportunities with the goal of sustaining, growing, and diversifying long term revenues.

NHA appreciates the City’s entrepreneurial spirit and has experience working closely with other California cities that also think creatively to implement innovative projects and programs. We are proud to work with communities and your peer cities to advance the goals of financial sustainability and economic vitality. Our work for Lancaster, Riverside, El Monte, Huntington Park, and Torrance (just to name a few) helps build a “library” of great examples that can be implemented as we work with you to develop a strategy and potential financing plan for identified capital improvements.

Additionally, NHA has defined expertise within our 8 practice groups to address key needs including climate change impacts (i.e., wildfire risks, rising sea levels), pensions, public-private partnerships (“P3”)/economic development negotiations, and continuing disclosure.

NHA assumes an active project management approach to any engagement and can bring outside expertise to the table (if required) depending on the direction of any project. We believe that NHA’s essential role is to be the “quarterback” of a project and to be responsible and accountable to our client for realization of their objectives.

Thank you for inviting NHA to submit a proposal to the City. We look forward to discussing your project and our ideas at your earliest convenience.

Sincerely,
Craig Hill, Managing Principal

PROPOSAL TO PROVIDE MUNICIPAL FINANCIAL ADVISORY SERVICES - NHA ADVISORS, LLC 2 | P AGE
Firm Overview
NHA is an Independent Registered Municipal Advisor
headquartered in San Rafael, California. NHA provides
comprehensive financial and consulting services to public agencies throughout California. NHA has provided municipal advisory services since 2000 (formerly as Northcross, Hill & Ach) and currently works with over 85 California cities and special districts to provide financing solutions for capital projects. In addition to traditional bond financing projects, NHA’s consulting practice currently works with over 30 public agencies to develop project funding solutions, financial policies, and pension liability alternatives.

Our experience with public agencies spans from rural,small special districts to major metropolitan agencies - providing the greatest exposure possible to NHA. This allows us to bring creative examples to our clients as opportunities come up that require financial solutions. We understand the time and staff resource constraints required to develop funding strategies and financing plans; therefore, through our “extension of staff” ethos, we integrate with agency staff to assist and manage each project.

NHA is ranked as the #2 municipal advisor, by volume, for California city bond financings, having completed 116 bond financings from 2018 to 2022 (according to the California State Treasurer). NHA has managed financings including utility revenue, general obligation, tax allocation, lease revenue, land secured, pension obligation, and short-term cash flow notes. Our work includes a wide range of financing sizes, from under $1,000,000 to over $400,000,000.

Providing municipal advisory services
to California cities is our core focus as
demonstrated by our continued
professional staffing growth and
increasing number of projects. NHA has
developed a team of ten registered
municipal advisors all focused on
California public agency issues. NHA is
led by its three Principals (Craig Hill,
Mark Northcross, and Eric Scriven), each
of whom have more than 30 years of
public finance experience. These
Principals are supported by three Vice
Presidents, and four additional advisors
serving as support staff.

The following table includes additional
information about NHA (as requested
by the RFP). The financial status of the
firm is strong as demonstrated by the continued expansion of our professional employee base and increasing engagements throughout California. Our ranking improvement over the last five years also shows the continued success of this growing firm. Additional documentation on the firm is included in Appendix E.

NHA Clients Served*
*Dots represent client engagements from 2012 - Present 1Source: California State Treasurer (As of October 2022; excludes conduit financings) 129
116
103 100
94 Urban
Futures
NHA
Advisors
Fieldman Rolapp PRAG PFM
Group

MUNICIPAL ADVISOR RANKINGS FOR CALIFORNIA CITIES
Transactions (January 2018 - Present)¹

PROPOSAL TO PROVIDE MUNICIPAL FINANCIAL ADVISORY SERVICES - NHA ADVISORS, LLC 3 | P AGE
Per the requirements of the City’s RFP, NHA does not have any conflicts of interest, including in regard to the following two items addressed in the City’s RFP: (1) NHA does not have, nor does any NHA personnel have, any litigation involving it which would be adverse to the City, and (2) NHA has not provided consulting services within the last four years to any person, corporation, partnership, or other entity that made application to the City for a discretionary land use entitlement or City project.

Also, per the requirements of the City’s RFP, NHA accepts all conditions listed in the City’s RFP document.

Requested Firm Information
Firm Name NHA Advisors, LLC
Address / Principal Place of Business 4040 Civic Center Drive, Suite 200 San Rafael, CA 94903
Telephone # (415) 785-2025
Fax # (415) 506-3401
Email Address [email protected]
Principals
Craig Hill, Managing Principal
Email: [email protected]
Phone: (415) 785-2025 x2001
Mark Northcross, Principal
Email: [email protected]
Phone: (415) 785-2025 x2002
Eric Scriven, Principal
Email: [email protected]
Phone: (415) 785-2025 x2003
Organization Type California Limited Liability Company (LLC) Organizational History DBA: NHA Advisors, LLC (2011-Present) DBA: Northcross Hill & Ach (2000-2011)
B. ORGANIZATIONAL INFORMATION
NHA has a professional team of ten registered municipal advisors all focused on California public agency issues.

NHA is led by its three Principals (Craig Hill, Mark Northcross, and Eric Scriven) and these Principals are supported by three Vice Presidents, one Assistant Vice President, one Associate, and two Analysts.

All 10 NHA municipal advisors have passed the MSRB Series 50 Exam and are therefore licensed municipal advisor professionals. NHA’s ability, skill, and experience is reflected in the length of time its Principals and Vice Presidents

PROPOSAL TO PROVIDE MUNICIPAL FINANCIAL ADVISORY SERVICES - NHA ADVISORS, LLC 4 | P AGE
have been successful in public finance. NHA’s three Principals have a combined 106 years of public finance experience and NHA’s three Vice Presidents have a combined 52 years of public finance experience. NHA’s support staff directly learns from and works with the Principals and Vice Presidents, ensuring that skills gathered by the senior team members are transferred over time to the junior team members. Detailed biographies of the NHA members assigned to the City can be found in Section E (Proposed Staffing and Project Team). More information on the remaining NHA members can be found in the full set of NHA team resumes included as Appendix G.

C. PREVIOUS EXPERIENCE
Examples of Work Comparable to the City’s Scope of Services Below are five case studies, highlighting NHA’s experience with services that the City outlines in its scope of services. Each of the case studies represents one of the following five topics:
▪ General Financial Services – City of Watsonville Financial Forecasting Model ▪ Land/Property Acquisition – City of Martinez Land Purchase & Financing ▪ Public-Private Partnership – Tahoe Douglas Visitors Authority Tahoe South Events Center Financing ▪ Financing Plan Development and Execution –City of Riverside 2018 Sewer Debt Restructuring & 2020 Pension Education + Pension Obligation Bonds
▪ Competitive Bond Sale/Borrowing Cost Optimization – City & County of San Francisco $127 Million General Obligation Bonds Competitively Sold to Finance Health & Public Safety Improvements Case Study: Watsonville Dynamic Financial Forecasting Model Development In 2019, NHA worked with finance staff using historical financial information to build a new, dynamic financial forecasting model that allows City staff to modify various assumptions and sensitivity scenarios. This model was created and delivered, including staff training, with the intention of being customized for the City and for ease of use by staff without NHA’s continued participation. The model includes multiple scenarios (“Base Case”, “Recession”, “Best Case”, and “Manual Input”) and enables a user to switch easily between scenarios by selecting from a drop-down menu. In addition, this model includes a “dashboard” component (see following snapshot) of the model that was set up so that fully dynamic visuals and charts update with each scenario. This dashboard is optimized to print on a couple of pages and enables ease of sharing with staff, council, or other stakeholders on demand.

A point worth noting regarding the customization of this model: It included an analysis regarding a sales tax measure that is set to sunset in a few years. The City requested that this model include the ability to evaluate the revenues from that sales tax measure separately from the other sales tax revenues and “toggle” those revenues off and on to stress the model.
14

PROPOSAL TO PROVIDE MUNICIPAL FINANCIAL ADVISORY SERVICES - NHA ADVISORS, LLC 5 | P AGE
Case Study: Voter-Approved Options Analysis for Land Purchase for the City of Martinez The City of Martinez had an opportunity to purchase a parcel of undeveloped land to retain its use as open space and parkland for the benefit of the community. However, the City did not have the financial resources to purchase the land and needed to identify a new revenue source or other funding sources. City staff did not believe that the project was eligible for grant funding.

NHA analyzed the City’s property profile, parcel characteristics, and funding requirements to develop multiple funding strategies for the potential acquisition of the property. After extensive City Council discussions, the decision was made to seek voter support for a parcel tax (making the tax more equitable to residential property owners and like-kind properties). Our work included developing a database for all parcels within the City limits and allocating the tax to each parcel.

This allowed for extensive scenarios and sensitivity analysis in order to provide the City Council with the best options including parcel tax, general obligation, and various forms of special tax structures. This presentation included a comparison of a general obligation bond versus a parcel tax as a means for financing public improvements.

Based on NHA’s analysis, the City Council chose to put a parcel tax on the ballot and the measure received approval from voters at the June 2022 election for a parcel tax to fund the land acquisition. In November 2022, the City closed a $19 million lease revenue bond financing based on that parcel tax.

Case Study: Tahoe Douglas Visitors Authority Tahoe South Events Center Financing NHA advised the Tahoe Douglas Visitors Authority for the issuance of $112 million in bonds to finance the construction of the $100 million Tahoe South Events Center (TSEC). The TSEC will be a 138,000 square foot, 6000-seat, multi-use facility to host conventions, conferences, sporting events, trade shows, performing arts, and musical concerts. The project is the realization of over two decades of work in the Tahoe basin for creating such a facility.

NHA worked with the Authority’s financing and
lobbying team to successfully secure the
legislative approval of a new $5/night transient
lodging surcharge on the Nevada side of South
Lake Tahoe. In addition, NHA worked with the
Authority’s financing team to formalize a pledge
from Douglas County, Nevada, to convey a
portion of tax increment revenues from the local
redevelopment project area toward debt service
payments on the bonds. Due to the highly volatile
nature of the pledged revenues (primarily hotel
tax revenues), NHA worked with the Authority’s
financing team to help create an innovative structure that utilized a “revenue stabilization fund” as a secondary reserve while providing a secondary source of operating revenues for the Authority.

NHA was deeply involved with crafting the message and preparing presentations to both the Nevada state legislature and to Douglas County elected officials regarding these revenue streams. NHA worked closely with Authority finance staff to help create a cashflow projection model that tied to the Authority’s budget and projected Authority cash balances on an annual basis through 2051 and on a monthly basis through the projected completion of the TSEC.

The Authority sold their unrated bonds on October 26, 2020, and the bonds were over 7x oversubscribed, receiving broad market demand, a testament to the innovative structure and strong performance of the Authority through the COVID-19 pandemic.

PROPOSAL TO PROVIDE MUNICIPAL FINANCIAL ADVISORY SERVICES - NHA ADVISORS, LLC 6 | P AGE
Case Study: City of Riverside 2018 Sewer Debt Restructuring & Pension Education + 2020 Pension Obligation Bonds
NHA has worked with the City of Riverside over the last several years on both consulting projects and bond financings as described in the following case studies. We worked with the City on pension consulting assignments both pre-and post-issuance of the City’s 2020 Pension Obligation Bonds, for which we also served as Municipal Advisor. In addition, we served as the Municipal Advisor for the City’s 2018 Sewer Debt Restructuring. 2018 Sewer Debt Restructuring
The City of Riverside operates a wastewater treatment plant that has already been partially reconfigured in anticipation of a future Direct Potable Reuse mandates from the State’s Water Boards. NHA served the City as financial advisor on a $150 million+ refunding of existing debt in 2018.

The City’s financing accomplished two critical objectives. We assisted the City in successfully getting the utility’s credit rating upgraded from A+ to AA- by Standard & Poor’s, thereby reducing interest rates when the City’s bonds were sold. In addition, we developed a restructuring that helped generate near term savings to help the City meet its debt service coverage thresholds without having to increase rates on residents.

The restructuring also allowed the city to reduce debt service in the earlier years to increase net revenues and defer the need to implement a rate study during a period that the city council was distracted with other issues.

Strategically avoiding the need to publicly discuss a rate increase benefited all stakeholders and allowed for a systematic approach to managing the enterprise fund. Leading up to the financing process, NHA worked with public works and finance staff to prepare a “common story” to be shared across all public information formats.

Community activists had noted in the past that the rating reports, proposition 218 cost of service studies, and bond disclosure documents had some major inconsistencies. This hurt the city’s credibility with both elected officials and the community. This common story also addressed the issue of a future DPR mandate by showing a long-term rate management strategy that could potentially deliver funding for DPR.

NHA also managed, on behalf of the city, the selection process for the underwriter of the $150 million sewer bond.

This required the initial review of proposals, analysis of their compensation structures, an objective assessment for city staff consideration and selection, and assistance in developing the optimum underwriting syndicate policy to meet the city’s objectives.

The refunding produced $18.9 million of present value savings, or 10% of the refunded par. Over half of the savings was taken in the first 5 years to reduce the amount of sewer rate increases that would be needed to meet minimum coverage requirements.
2020 Pension Education + Pension Obligation Bonds
In 2018, NHA was hired by the City to assist with pension funding strategies, and in the fall of 2019, was hired to manage a Pension Obligation Bond (“POB”) evaluation process and to develop a POB funding plan that balanced risks/rewards while addressing a portion of the City’s projected deficits. The NHA team began the process by conducting several staff workshops in the fall. After presenting a “POBs 101” workshop focused on benefits and risks to the Finance Committee in January and to City Council in February, NHA quarterbacked a very detailed and thorough POB evaluation process that involved working with the City’s actuary, Bond Counsel, and Underwriting team to evaluate over 25 structuring options.

NHA then worked with the team to refine, and stress test the top options for staff and City council to evaluate potential savings under more pessimistic future CalPERS return assumptions. The structure was then further refined with the first year of savings being used as a tool to address COVID-19 revenue impacts. The final structure targeted smoothing-out the City’s “peaking” payment shape without extending any payments relative to the current CalPERS schedule. The 2020 POBs achieved a “AA Stable” rating, a testament to the City’s carefully evaluated POB structure and prudent financial management and adopted policies, including a pension funding policy.

PROPOSAL TO PROVIDE MUNICIPAL FINANCIAL ADVISORY SERVICES - NHA ADVISORS, LLC 7 | P AGE
When it came time for pricing, approximately $430 million of POBs, with a 25-year term, were sold at an All-In Cost of 3.688%. The financing ultimately closed in June 2020.

Case Study: City & County of San Francisco $127 Million General Obligation Bonds Competitively Sold to Finance Health & Public Safety Improvements
NHA assisted the City and County of San Francisco in Fall 2020 on a new money $127 million General Obligation (“GO”) Bond financing health and public safety improvements. This issuance was the first series of the 2016 authorization and was sold through a competitive bidding process.

As the City’s co-municipal advisor on the transaction, NHA’s primary responsibilities were to coordinate the credit evaluation process, coordinate the competitive sale process with Parity and request CUSIPS, lead pricing day cashflow analysis and TIC confirmations, along with other administrative and transactional steps.

NHA was actively involved in the structuring analysis, which resulted in the bonds being sold with a $15 million taxable “nose” (<$2 million maturity series) that was used as a strategy to manage the large premium generated by the $112 million tax-exempt series. Effectively, the small, 1.2-month maturity was repaid using the premium generated on the tax-exempt series.

NHA led the process of posting the Notice of Sale and Preliminary Official Statement for the transaction to the Parity system and contacting a list of competitive desks and firms that had provided bids on the City’s previous competitive sales. During competitive sales, NHA is very active in market research and planning to ensure our clients enter the market at an opportune time. (As a side note, our in-house research also led us to recommend and lead the City of Berkeley through their $38 million Measure O GO Bond issuance in April 2020 – the first competitively sold California GO Bond in the wake of the March 2020 COVID-19 market volatility and lockdowns.) In addition to our role in ensuring the bonds were marketed well and analyzing the bids that San Francisco received on the day of sale, NHA provided thorough review of transactional and legal documents and prepared a closing flow of funds memorandum to facilitate a smooth closing process.

The City of San Francisco’s GO Bonds were sold with a blended TIC of 2.52% on the 25-year financing.

References
The five references below can provide the City with frank, detailed evaluation of our approach and processes towards projects and services similar to those found in the City’s Scope of Work. We encourage you to reach out to these references for more information.

Client Description of Services Key Contact Contact Information City of
Riverside
2018 Bond financing for $150M
Sewer revenue refunding bond;
2020 Bond financing for $430M
POB, including pre-bond analysis,
options evaluation, and scenarios
analysis
Edward
Enriquez,
CFO
3900 Main Street, Riverside, CA 92522
(951) 826-5454
[email protected]
City of
Oxnard
Water Bonds, Wastewater, Lease
Refinancing, Swap Termination,
Credit Rating Upgrade, Line of
Credit, ERP Financing, Gas Tax
Refinancing, Pension/POB
Consulting, Continuing Disclosure
Compliance Services, CFD Formation
Consulting, Development Consulting
Betsy
George, CFO
300 West Third Street, Oxnard, CA 93030
(805) 385-7475
[email protected]

PROPOSAL TO PROVIDE MUNICIPAL FINANCIAL ADVISORY SERVICES - NHA ADVISORS, LLC 8 | P AGE
Client Description of Services Key Contact Contact Information City of
Paso
Robles
Downtown Redevelopment, GO
Bond Program, Water/Sewer
Financing, Infrastructure Financing
Plan, New Residential Development
CFD
Ryan Cornell,
Finance
Director
1000 Spring Street, Paso Robles, CA 93446
(805) 237-3999 ext. 6650
[email protected]
City of
Gilroy
Sports Park/Theme Park Financing,
Police Financing, Library GO Bond,
Ice Rink Financing Plan, Sewer
Financing
Jimmy Forbis,
City
Administrator
7351 Rosanna Street, Gilroy, CA 95020
408-846-0202
[email protected]
City of
Lancaster
Lease Revenue Bonds (2018),
Revenue Bonds (Measure M & R
Street Improvement) (2019), Lease
Revenue Refunding (2021), Taxable
Revenue Refunding (Solar)
Renewable Energy Program) (2021)
George
Harris,
Director of
Finance
44933 Fern Avenue, Lancaster, CA 93534
(661) 723-5988
[email protected]
D. PROCEDURES AND METHODOLOGY
General Municipal Advisory Services
Many clients rely on us for strategic financial planning, policy advice, project management with other consultants and general financial staff support. NHA provides a combination of ongoing municipal advisory consulting and financing services to a variety of cities throughout the state, including nearby cities of Rialto, El Monte, Huntington Park, Torrance, Lancaster, and Riverside.

Since 2016, NHA staff has completed over 300 unique consulting projects, many of which did not result in a financing. While this level of service may not be common with other municipal advisors, our “extension of staff” style has become a core part of our services and a critical benefit to many of our public agency clients.

NHA formed eight practice groups to address issues our clients told us mattered to them. NHA has made it our business to become expert in areas such a climate change impacts (i.e., wildfire risks, rising sea levels), P3 & economic development negotiations, pension liabilities and continuing disclosure to provide meaningful ideas and advice to our clients when those issues arise, and we are called upon to contribute.

PROPOSAL TO PROVIDE MUNICIPAL FINANCIAL ADVISORY SERVICES - NHA ADVISORS, LLC 9 | P AGE
Land/Property Acquisition
In 2022, NHA worked with the City in developing property acquisition financing strategies and financing capacity.

We understand the City has great opportunities in the commercial corridor that they would like to leverage to jumpstart and diversify the City’s future revenue streams.

It was estimated that the City had the financial capacity to leverage $250,000 per year to generate one-time funds for the acquisition and/or improvement of certain property. During the November election, the City’s voters approved Measure BA, Commercial Marijuana Regulation and Tax Measure, an ordinance authorizing and regulating storefront retail cannabis sales and other commercial cannabis activities which would require retailers to pay a 15% gross receipts tax. It is estimated to raise additional revenues of approximately $3,500,000 annually for the City’s General Fund.

Based on the additional revenues, we have prepared capacity analyses to determine how much in proceeds could be generated based on varying annual debt service payments ranging from $250,000 to $1,000,000. The following table details the results for two different final term options for each annual debt service payment analyzed. The analysis assumes a taxable financing given the private (developer) use of funds. Given the existing structure of the City, the financing would require the City’s General Fund as credit support. Until such time as there would be revenues generated off the property, any financing would rely on the General Fund.

The 20-year term options assumes the transaction could be completed as a private placement, while the 30-year assumes a public bond offering. We have assumed no debt service reserve fund will be required for the 20-year financing. The 30-year financing assumes bond insurance and surety reserve. Results are based on estimated current market rates. Proceeds generated will vary based on credit quality, tax-status, interest rates, final term, etc.

Annual Debt
Service Payments
Estimated Proceeds Generated for
Property Acquisition
20-Year Term 30-Year Term
$250,000 $2,900,000 $3,200,000
500,000 5,950,000 6,600,000
750,000 9,000,000 10,000,000
1,000,000 12,050,000 13,400,000
The financing capacity results presented assume the City’s General Fund will have the revenue capacity over the foreseeable future to make the indicated payments. We would work with the City to determine the long-term impact to revenues of the new Measure BA and the additional capacity that could be directed towards debt service payments.

Financing Plan/Pricing/Structuring/Credit Enhancement
As demonstrated by the case studies discussed in Section C (Previous Experience), NHA has experience with developing financing plans, bond structures and managing the issuance process for a wide-range of financings (general fund, general obligation, water/wastewater revenue, pension, land-secured, short-term notes, etc.).

For the financing process, NHA will work closely with bond & disclosure counsel to meet the objectives of the City.

NHA also manages the RFP process to solicit and engage additional financing team members. The scope of services outlined below demonstrates the ways in which NHA adds value to each step of the financing process. Following the scope of services outline are detailed descriptions of select financing processes.

PROPOSAL TO PROVIDE MUNICIPAL FINANCIAL ADVISORY SERVICES - NHA ADVISORS, LLC 10 | P AGE
Financing Procedure NHA Services and Value-Added
Due Diligence / Feasibility
Analysis
Evaluate competitive, negotiated, or private placement bond sale; prepare draft report of opportunities and constraints of project
Creation of Financing
Schedule and Review POS
Draft financing schedule outlining major steps; work with Disclosure Counsel to review and provide input on preliminary Official Statement (“POS”), notices of sale, etc.

Managing Costs of
Issuance Request fee quotes from entire team and negotiate fees Continuing Disclosure
Review Coordinate a review of issuer’s CD practices; remedy any shortcomings Selection of Trustee Evaluate current trustee(s) for competitiveness; if necessary, manage RFP Selection of Underwriter
(UW)
If negotiated sale is chosen, lead the UW selection process, provide issuer with detailed comparison of responsive UW firms, and aid in selection process Selection of Other
Financing Parties
As needed, coordinate selection of entire financing team (including verification agent, financial printer, fiscal consultant, etc.)
Staff Reports and
Presentations
As requested, develop content for all staff reports, memorandums, or other presentation materials for stakeholder education
Determining Optimal Bond
Structure
Determine optimal structure (serial/term bonds, premium/discount bonds) and redemption provisions, monitor markets, provide independent numerical analyses, and advise issuer in all negotiations with underwriter Review of Legal
Documents and Governing
Board Approvals
Review all documentation to ensure issuer’s goals are met and interests are protected; draft staff reports and presentations to governing body (as requested); review issuer’s debt policies and develop a debt management plan in accordance with SB 1029
Credit Review and Rating
Lead due diligence review and create credit presentation document for rating agencies; prepare issuer to be an active, leading participant in the credit rating process
Credit Enhancements Work with issuer and UW to determine benefits of securing credit enhancements; manage negotiations with bond insurers, if applicable Final Bonds Sizing Analysis Prepare / Confirm final bond amortization schedule; verify analysis with UW / bank.

Reviewing the OS Thorough review of the OS throughout the financing; work with disclosure Counsel and financial printer, as needed, to post and distribute the OS Closing
Review all disclosure and financing documents for accuracy; prepare Closing Memo detailing flow of funds at closing; assemble invoices for Cost of Issuance Requisition
Post-Closing Monitor transaction (conduct post-issuance reviews as requested by issuer); if requested, prepare Final Pricing Memo detailing financing Ongoing Continuing
Disclosure
When requested, draft and prepare annual reports and events notices for investor community and submit to EMMA and CDIAC
Preparation of Finance Plans
Being an active municipal advisor for a variety of public agencies in California means that NHA has experience preparing finance plans for projects of all sizes and credits. If the City was looking to finance capital projects, NHA’s methodology for developing a funding strategy starts with a comprehensive impact analysis that incorporates long-term revenue and expenditure projections, anticipated one-time costs and any other items that may affect the overall cash flows of the City. Understanding the structural financial strength prior to developing a financing