Hercules City Council
September 10, 2024

Tuesday, September 10, 2024
6:00 PM
City of Hercules
111 Civic Drive
Hercules, CA 94547
City Council
Mayor Dan Romero
Vice Mayor Dion Bailey
Council Member Alex Walker-Griffin
Council Member Chris Kelley
Council Member Tiffany Grimsley
Dante Hall, City Manager
Christie Crowl, City Attorney
Eibleis Melendez, City Clerk
Meeting Agenda
In-Person in Council Chambers or
Zoom ID: 884 9819 8023
Zoom Passcode: 461396
Zoom Phone Number: 1-669-900-6833
1 September 10, 2024City Council Meeting Agenda
See last pages of agenda for information regarding meeting procedures To view webcast of meetings, live or on demand, go to the City's website at www.ci.hercules.ca.us I. CLOSED SESSION – CALL TO ORDER - ROLL CALL - 6:00 P.M. 1A. CONSIDER AND TAKE ACTION ON ANY REQUEST FROM A COUNCIL MEMBER TO

PARTICIPATE IN A MEETING REMOTELY DUE TO JUST CAUSE OR EMERGENCY CIRCUMSTANCES PURSUANT TO AB 2449
1B. SPECIAL MEETING - CLOSED SESSION
II. PUBLIC COMMUNICATION - CLOSED SESSION ITEMS
III. CONVENE INTO CLOSED SESSION
The Hercules City Council will meet in Closed Session regarding the following:

1. 22-944
Pursuant to Government Code Section 54957.6 Conference With Labor Negotiators - City Negotiators: Dante Hall, City Manager; Edwin Gato, Director of Finance; relative to the following employee groups:
a. Teamsters Local 315 Employee Organizations
b. Hercules Police Officers Association
c. Hercules Senior Manager Employee Group
d. Confidential Unrepresented Employee Group
e. Mid Management Employee Group
IV. REGULAR MEETING – CONVENE TO OPEN SESSION - ROLL CALL - 7:00 P.M.

V. REPORT ON ACTION TAKEN IN CLOSED SESSION
VI. PLEDGE OF ALLEGIANCE
VII. MOMENT OF SILENCE
VIII. INTRODUCTIONS/PRESENTATIONS/COMMISSION REPORTS
Mayor Romero would like to acknowledge the following for the Month of September National Hispanic Heritage Month September15th - October 15th Mexican Independence Day - September 16th, 2024
National Falls Prevention Awareness Week September 18th-22nd

2 September 10, 2024City Council Meeting Agenda

1. 22-935 Proclamation- Patriot Day
Patriot Day(9/11 Day of Remembrance) ProclamationAttachments:

2. 22-938 Recyclemore Post Collection Agreement Presentation Presentation - Hercules Draft RFP and PCAAttachments:

IX. AGENDA ADDITIONS/DELETIONS
X. PUBLIC COMMUNICATIONS
This time is reserved for members of the public to address issues not included in the agenda. In accordance with the Brown Act, Council will refer to staff any matters brought before them at this time, and those matters may be placed on a future agenda.

Individuals wishing to address the City Council are asked to complete a form indicating the name and address of the speaker and the general topic to be addressed. Speakers must make their comments from the podium and will be allowed 3 minutes to discuss their concerns. All public comments are recorded and become part of the public record. A limit of 30 minutes will be devoted to taking public comment at this point in the agenda. If any speakers remain at the conclusion of the initial 30 minute period, time will be reserved at the conclusion of the meeting to take the remaining comments.

XI. PUBLIC HEARINGS

1. 22-937
Local Vendor Preference Ordinance
RECOMMENDATION:

Waive first reading and approve for introduction Ordinance (Attachment 1) adding Title 2, Chapter 5, Sections 2-5.01 to 2-5.03 to the Hercules Municipal Code to codify the City’s local vendor preference for the purchase of goods and services.

Staff Report - Local Vendor Preference Ordinance
Attach 1 - Ordinance
Attach 2 - June 25, 2024 Staff Report - Local Business Preference Attachments:

XII. CONSENT CALENDAR

1. 22-936 Meeting Minutes for the Regular Meeting of July 23, 2024 Meeting Minutes for the Regular Meeting of July 23, 2024Attachments:

2. 22-942 Accept the Investment Report for the Quarter Ending June 30, 2024 RECOMMENDATION:

Accept the Investment Report for the Quarter Ending June 30, 2024 Investment Quarterly Report Ending June 30, 2024
Attach 1 - Quarterly Investment Report
Attachments:

3 September 10, 2024City Council Meeting Agenda

3. 22-943 Authorization to Extend the Audit Services with The Pun Group for three years ending June 30, 2025, June 30, 2026, and June 30, 2027, with the option to extend for an additional two fiscal years.

RECOMMENDATION:

Adopt a Resolution authorizing the City Manager to Execute a three-year agreement for independent auditing services with the Pun Group with the option to extend for an additional two fiscal years.

Staff Report - Audit Services Contract Extension
Attach 1 - Resolution
Attach 2 - The Pun Group Proposal
Attachments:

XIII. DISCUSSION AND/OR ACTION ITEMS

1. 22-941 Approval of updated contract with Jarvis Fay LLP for legal services confirming firm name change and Christie Crowl as City Attorney RECOMMENDATION:

Staff recommends that the City Council adopt Resolution (Attachment 1) approving an updated contract for legal services which confirms the firm’s name change and that Christie Crowl will serve in the role of City Attorney following Patrick Tang’s retirement.

Staff Report - City Attorney's Office contract
Attach 1 - Resolution
Exhibit A - Legal Services Agreement 9-1-24
Attachments:

2. 22-940 Authorization for the City Manager to sign the Transition Services Department Student Work Agreement
RECOMMENDATION:

Staff recommends that the City Council:

1. Adopt a resolution establishing a Student Work Agreement in the WCCUSD Transition Services Department; and

2. Authorize the City Manager to sign the Student Work Agreement for a period of September 2024 through July 2025
Staff Report - Transition Services Agreement with WCCUSD Attach 1 - Resolution - Transition Services Student Workers Attach 2 - WCCUSD Contract 2024-25
Attachments:

4 September 10, 2024City Council Meeting Agenda

3. 22-939 Designate the position of Human Resources Manager as the City’s Primary
Board Member and the position of City Clerk as the Alternate Board Member to the Municipal Pooling Authority (MPA)
RECOMMENDATION:

Staff recommends adopting a Resolution designating the position of Human Resources Manager as the City’s Primary Board Member to the Municipal Pooling Authority (MPA) and the position of City Clerk as the Alternate Board Member.

Staff Report - MPA Board Member
Attach 1 - Resolution- MPA Board Member
Attachments:

XIV. PUBLIC COMMUNICATIONS
This time is reserved for members of the public who were unavailable to attend the Public Communications period during Section X of the meeting, or were unable to speak due to lack of time. The public speaker requirements specified in Section X of this Agenda apply to this Section.

XV. CITY COUNCIL/CITY MANAGER/CITY ATTORNEY ANNOUNCEMENTS,

COMMITTEE, SUB-COMMITTEE AND INTERGOVERNMENTAL COMMITTEE REPORTS

AND FUTURE AGENDA ITEMS
This is the time for brief announcements on issues of interest to the community. In accordance with the provisions of the Brown Act, matters which do not appear on this agenda but require City Council discussion may be either (a) referred to staff or other resources for factual information or (b) placed on a future meeting agenda.

1. Regional Committee

2. City Council Committees and Subcommittees

3. Commission Liaisons
XVI. ADJOURNMENT
The next Regular Meeting of the City Council will be held on Tuesday, September 24, 2024 at 7:00p.m. in the Council Chambers.

Agendas are posted in accordance with Government Code Section 54954.2(a) or Section 54956.

Members of the public can view electronic agendas and staff reports by accessing the City website at www.ci.hercules.ca.us and can receive e-mail notification of agenda and staff report postings by signing up to receive an e-notice from the City’s homepage. Agendas and staff reports may also be obtained by contacting the City Clerk at (510) 799-8200 (Posted: September 5, 2024)

5 September 10, 2024City Council Meeting Agenda

INSTRUCTIONS ON HOW TO PARTICIPATE AND WATCH THE HERCULES CITY COUNCIL AND PLANNING

COMMISSION HYBRID MEETINGS
Attend in Person: Hercules City Council Chambers – 111 Civic Drive, Hercules, CA 94547 Attend via Zoom Teleconference: Details provided below and zoom webinar login, passcode and phone numbers provided on the agenda cover.

How to Submit Public Comments
In Person: Attend meeting at the Hercules City Council Chambers, fill out a public speaker card located on the side table and submit it to the City Clerk.

Via Zoom: Members of the public may submit a live remote public comment via Zoom video conferencing Download the Zoom mobile app from the Apple Appstore or Google Play. If you are using a desktop computer, you can test your connection to Zoom by clicking here or go to: https://www.zoom.us/join. Zoom also allows you to join by phone at +1-669-900-6833 or +1-929-205-6099 or +1-253-215-8782.

Written Comments Submitted Electronically: All comments received before 3:00 p.m. the day of the meeting will be provided to the City Council prior to the meeting and posted to the City’s agenda website and located by clicking on the “meeting details” tab. Written comments received after 3:00 p.m. will be provided to City Council and posted to the agenda website the following day. Written comments will not be read aloud during the meeting. Email comments to [email protected]. Please indicate which item on the agenda you are commenting on in the subject line of your email.

Written comments submitted in person or via mail: Additional ways to provide your public comment is to either drop off your comment in person to the front desk receptionist located in the City Hall lobby or to mail your comment to City of Hercules, ATTN: City Clerk – Public Comment (Meeting Date), 111 Civic Drive, Hercules, CA 94547 in time to reach the City Clerk no later than 3:00 p.m. on the day of the meeting or you can submit your comment by telephone by calling (510) 799-8208 no later than 3:00 p.m. on the meeting date.

If you need assistance with public comment, please contact: Eibleis Melendez City Clerk at [email protected] or by calling (510) 799-8208.

All public comments will become part of the official meeting record. As email containing public meeting comments are part of the official record, note that personal contact information may be published if it is included with your email. The City cannot guarantee that its network and/or the website will not be uninterrupted. To ensure that the City Council receives your written comments, you are strongly encouraged to submit your comments in writing in advance of the meeting by 3:00 p.m. on the day of the Council or Commission meeting.

6 September 10, 2024City Council Meeting Agenda

OTHER WAYS TO WATCH THE MEETING
Live on Channel 28: City Council meetings will replay the following Thursday at 7:00 p.m. and Saturday at 1:00 p.m.

Planning Commission meetings will replay the following Wednesday at 7:00 p.m. and Saturday at 9:00 a.m.

Video Streamed Live on the City’s Website:

To view City Council and Planning Commission meeting videos online go to: Hercules Meeting Videos.

Instructions to view Live or On-Demand Videos from the City’s website:

1. Go to: Hercules Meeting Videos or https://hercules.legistar.com/calendar.aspx.

2. Locate the desired meeting and date.

3. Click the associated “Video” link (Video status is as follows):

Video = Video is available for on demand viewing.

In Progress = Video is available for viewing during live recording.

Not Available = Video is either unavailable or has not been recorded.

7 September 10, 2024City Council Meeting Agenda

THE HERCULES CITY COUNCIL ADHERES TO THE FOLLOWING POLICIES,

PROCEDURES AND REGULATIONS REGARDING CITY COUNCIL MEETINGS

1. SPECIAL ACCOMMODATIONS: In compliance with the Americans with Disabilities Act, if you require special accommodations to participate at a City Council meeting, please contact the City Clerk at 510-799-8208 at least 48 hours prior to the meeting.

2. AGENDA ITEMS: Persons wishing to add an item to an agenda must submit the final written documentation 12 calendar days prior to the meeting. The City retains the discretion whether to add items to the agenda. Persons wishing to address the City Council otherwise may make comments during the Public Communication period of the meeting.

3. AGENDA POSTING: Agendas of regular City Council meetings are posted at least 72 hours prior to the meeting at City Hall, the Hercules Swim Center, Ohlone Child Care Center, and on the City’s website (www.ci.hercules.ca.us),

4. PUBLIC COMMUNICATION: Persons who wish to address the City Council should complete the speaker form prior to the Council's consideration of the item on the agenda.

Anyone who wishes to address the Council on a topic that is not on the agenda and is relevant to the Council should complete the speaker form prior to the start of the meeting. Speakers will be called upon during the Public Communication portion of the meeting. In accordance with the Brown Act, the City Council may not take action on items not listed on the agenda. The Council may refer to staff any matters brought before them at this time and those matters may be placed on a future agenda.

In the interests of conducting an orderly and efficient meeting, speakers will be limited to three (3) minutes.

Anyone may also submit written comments at any time before or during the meeting.

5. CONSENT CALENDAR: All matters listed under Consent Calendar are considered to be routine and will be enacted by one motion. There will be no separate discussion of these items unless requested by a member of the Council or a member of the public prior to the time the City Council votes on the motion to adopt.

6. LEGAL CHALLENGES: If you challenge a decision of the City Council in court, you may be limited to raising only those issues you or someone else raised at the meeting or in written correspondence delivered at, or prior to, the meeting. Actions challenging City Council decisions shall be subject to the time limitations contained in Code of Civil Procedure Section 1094.6.

8 INTRODUCTIONS/PRESENTATIONS/

COMMISSION REPORTS

AGENDA ITEMS

1. 22-935

2. 22-938

9 PROCLAMATION
RECOGNIZING SEPTEMBER 11, 2024 AS PATRIOT DAY AND

HONORING THE HEROIC ACTS FOLLOWING THIS DAY OF

REMEMBRANCE
WHEREAS, on September 11, 2001, our nation was brutally attacked in an unprovoked and senseless manner on our own soil by cowardly terrorists as enemies of freedom; and
WHEREAS, innocent civilians on four United States commercial aircrafts were hijacked as instruments of terror and forced into targeted symbols of freedom in New York, Pennsylvania and the Pentagon; and
WHEREAS, those enemies attacked with the intent of killing and injuring thousands of American citizens and permanently disrupting and paralyzing our great country; and
WHEREAS, with ONE heart and mind, the American people rallied from their shock and sorrow, and react ed in a characteristic fashion that has made this country great while displaying the highest level of patriotic fervor not seen since December 7, 1941; and WHEREAS, with a determination to defend our way of life, democracy and constitution, our wonderfu l Union still continues to recover from the unspeakable loss of so many blameless lives, with the indomitable spirit of the United States having been revitalized and given way to numerous expressions of heroism and patriotism; and WHEREAS, along with our nation, our community recognizes and is eternally grateful for the heroic acts of the Fire Fighters, Police Officers, Emergency Medical Personnel, Doctors, Emergency Services Providers and the untold number of ordinary people who came to the aid on this new day of infamy; and WHEREAS, this nation and our community continue to salute the heroism of public safety and rescue workers, volunteers, local officials and those who responded to these tragic events with courage, selfless compassion, determination an d skill and have joined our United States Armed Forces at home and abroad in protecting and securing us as we defend in an ongoing war against terrorism.

NOW THEREFORE, BE IT PROCLAIMED, that I, Dan Romero, Mayor of the City of Hercules, on behalf of the entire City Council, do hereby recognize September 11, 2024 as a Day of Remembrance in the City of Hercules. I further call upon all residents to honor the memory of all those who died by being a service to one another and working towards building an eve n stronger, more perfect Union through volunteerism and a commitment to sustaining our newfound commitment to patriotism.

IN WITNESS WHEREOF, I hereunto set my hand and cause the seal of the City of Hercules to be affixed this 10th day of September 2024. ____________________________
Dan Romero, Mayor
22-935
10 INTRODUCTIONS/PRESENTATIONS/

COMMISSION REPORTS

AGENDA ITEM

2. 22-938

11 Draft Post-Collection RFP &
Draft Post-Collection Agreement
Peter Holtzclaw
Executive Director
RecycleMore/WCCIWMA
9/10/2024
22-938
12 Background
 Current PCA ends 6/30/2025
 Ad Hoc Spring 2023; Ad Hoc Report & Recommendation 11/23  Board vote in 2/2024 for a Post Collection RFP
 Nothing Wasted brought on as a PCA consultant 3/2024
 Draft RFP and Draft Term Sheet provided to regional staff 6/1/2024  Draft PCA provided to regional staff 7/1/2024
 Draft RFP , Term Sheet and PCA modelled on the 2012 RFQ and current PCA  2012 RFQ and current PCA are both examples of strong processes & outcomes  Numerous Meetings with regional staff
 Ample time for input from cities prior to the Board meeting 13 Important Issues
County & El Cerrito Involvement
 Very positive development
 More volume & more ratepayers = better rates
Term/Instituting New Rates
 10-year term with two 5-year extensions
 This is not set in stone, Board can sync with collection franchise terms 14 Important Issues
Scope of Services
 Align with current PCA
 Innovative processes (e.g. Raven) can be included as optional services Pricing/Rates
 Based on the current blended rate structure
 RFP will require proposers to list the material specific per ton rate and initial HHW per ton rate
 RFP will ask for component pricing to be shown, but these prices aren’t binding; only material specific and HHW are binding
15 Important Issues (cont.)
Commodity Revenue Rebate
 Index changing from MP to OCC; ratepayers should see a credit of $500k-$1M more per year
 Will also include language to capture a revenue rebate from hydrogen fuel if that process is included
Outreach
 Much of the current PCA outreach section has been rewritten 16 Important Issues (cont.)
Performance Metrics
 Don’t want to overburden the PCA with a lot of “backseat driver” performance indicators
 Based on CalRecycle’s Pounds-per-Person-per-Day (“PPD”) measurement that relates to the 50% ab939 mandate
Data Tracker Software Application
 Authority staff will have limited access to contractor’s sb1383 date tracking software application based on software permissions
17 Important Issues (cont.)
Liquidated Damages
 Like Performance Metrics, don’t want to burden the PCA with a lot of LD’s  Looking at basics like damages from landfilling organics and recyclables Contract Extension
 A possible short-term extension has been voiced, but this is a bad idea  There’s plenty of time to finish this process and have an agreement by 7/2025 18 Timeframe
July 15 - August 15
 Legal and consultant review Draft RFP & PCA after Board feedback August 17 – August 31
 Staff review legal and consultant work and create Final RFP & PCA September 5th
 Agenda packet goes out with Final RFP and PCA
September 12th
 Board approves with staff publishing RFP soon after, or comes back to Board with revisions in October
19 PUB

LIC HEARINGS

AGENDA ITEM

1. 22-937
20 REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of September 10, 2024
TO: Mayor and Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Christie Crowl, Acting City Attorney
Christina Lawrence, Special Counsel
SUBJECT: Local Vendor Preference Ordinance
RECOMMENDED ACTION:

Waive first reading and approve for introduction Ordinance No. ___ (Attachment 1) adding Title 2, Chapter 5, Sections 2-5.01 to 2-5.03 to the Hercules Municipal Code to codify the City’s local vendor preference for the purchase of goods and services.

BACKGROUND:

At its June 25, 2024 regular meeting, the City Council directed staff and the City Attorney’s office to prepare an ordinance to incorporate the City’s existing local vendor preference, as set forth in the City’s Purchasing Guidelines, into the City’s Municipal Code.

ANALYSIS:

The City’s Purchasing Guidelines, adopted September 10, 2019, include a local vendor preference that applies to City purchases of goods and services, excluding public works and federally-funded procurements. Local vendors contribute to the economic health of the City and to the quality of life of the City’s citizens. Thus, the City encourages the growth of local vendors by means of increasing the participation of these vendors in the City’s purchase of goods and services.

Since adoption of the Purchasing Guidelines in 2019, staff is not aware of any situations in which the local preference has been implemented or applied. In order to better 22-937
21 integrate the preference into the City’s purchasing practices, the City Council has indicated its intent to adopt the local vendor preference by ordinance, so that it can be codified in the City’s Municipal Code. The attached ordinance reflects the City’s existing local vendor preference with the following minor modifications, for purposes of codification in the Municipal Code:

1. The preference in the City’s Purchasing Guidelines includes an exclusion for federal grant funded purchases that relies on defined terms used in the City’s Purchasing Guidelines. For simplicity, staff and the City Attorney’s office propose to incorporate an exclusion for both state and federal grant funded purchases directly into the language of the preference without the use of defined terms.

2. The preference in the City’s Purchasing Guidelines includes a reference to “proposals or quotes,” but otherwise refers to “quotes” throughout the remainder of the preference. Staff and the City Attorney’s office propose deletion of the reference to “proposals” for consistency with the remainder of the preference.

3. The preference in the City’s Purchasing Guidelines states that it applies when two or more quotes are “the same, in unit, quality, service, and total cost.” Staff and the City Attorney’s office propose to clarify that the preference applies when two or more quotes are “comparable in unit, quality, and service,” without reference to “total cost” since the reference to “total cost” is ambiguous in the context of the preference.

4. The preference in the City’s Purchasing Guidelines provides that preference “should be given” to a local vendor if certain criteria are met. Staff and the City Attorney’s office propose to revise the language to provide that preference “may be given” to a local vendor if certain criteria are met in order to afford greater flexibility in the City’s purchasing decisions.

As directed by the Council at its June 25, 2024 meeting, staff and the City Attorney’s office present for introduction an ordinance adding the City’s local vendor preference to the Hercules Municipal Code as Title 2, Chapter 5, Sections 2-5.01 to 2-5.03.

FISCAL IMPACT:

There are no direct fiscal impacts associated with this item.

ATTACHMENTS:

1. Ordinance

2. Staff Report to the City Council from the June 25, 2024 Meeting

22 Ordinance No. ___

ORDINANCE NO. _____

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERCULES ADDING TITLE 2, CHAPTER 5, SECTIONS 2-5.01 TO 2-5.03 TO THE HERCULES MUNICIPAL CODE TO CODIFY THE CITY’S LOCAL VENDOR PREFERENCE FOR THE

PURCHASE OF GOODS AND SERVICES

WHEREAS, on September 10, 2019, the City of Hercules (“City”) adopted Purchasing Guidelines, including a local vendor preference that applies to City purchases of goods and services; and

WHEREAS, local vendors contribute to the economic health of the City and t o the quality of life of the City’s citizens , and thus, t he City encourages the growth of local vendors by means of increasing the participation of these vendors in the City’s purchase of goods and services; and

WHEREAS, strategies that promote the use of local vendors help create a sustainable economy, preserve local business, strengthen employment, and retain local dollars within the community; and

WHEREAS, this ordinance (“Ordinance”) adds the City’s local vendor preference to the Hercules Municipal C ode, which will ensure that the preference is integrated into the City’s purchasing practices; and
c
WHEREAS, adoption of this Ordinance is e xempt from review under the California Environmental Quality Act ( “CEQA”) pursuant to CEQA Guidelines section 15061 (b)(3) because it can be seen with certaint y that it will hav e no impact on the en vironment because it authorizes no construction and is instead an administrative policy; and

WHEREAS, on September 10, 2024, the City Council held a duly noticed public hearing to consider the proposed Ordinance related to the City’s local vendor preference, received the staff report and staff presentation, received comments from the public and interested parties, and discussed the matter; and

WHEREAS, all legal prerequisites to the adoption of the Ordinance have occurred.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HERCULES DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. Recitals. The City Cou ncil hereby incorporates the above recitals into this Ordinance by this reference.

23 Ordinance No. ___

SECTION 2. Amendment. The City Council of the City of Hercules hereby adds Chapter 5, Local Vendor Preference, Sections 2-5.01 to 2 -5.03 to Title 2 (Administration) of the Hercules Municipal Code, which reads as follows:

Hercules Municipal Code

TITLE 2. ADMINISTRATION

Chapter 5. Local Vendor Preference

2-5.01 Title
2-5.02 Purpose
2-5.03 Local Vendor Preference

Sec. 2-5.01 Title

This Chapter shall be known as “Local Vendor Preference.”

Sec. 2-5.02 Purpose

Local vendors contribute to the economic health of the City and to the quality of life of the City’s citizens. The purpose of this Chapter is to encourage the growth of local vendors by means of increasing the participation of these vendors in the City’s purchase of goods and services.

Sec. 2-5.03 Local Vendor Preference

For the purchase of goods or services, excluding public works contracts and state or federal grant funded purchases, when two or more quotes are comparable in unit, quality, and service, preference may be given to the vendor who operates within the planning area as defined in the City’s General Plan if the quote for services or taxable goods is:

(a) less than $10,000 and is within 5% of the lowest quote;

(b) more than $10,000 up to $500,000 and is within 3% of the lowest quote;

(c) more than $500,000 up to $1,000,000 and within 2% of the lowest quote;

(d) more than $1,000,000 and within 1% of the lowest quote.

24 Ordinance No. ___

SECTION 3. CEQA. The City Council finds that ad option of this Ordinance is exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines § 15061(b)(3) – Common Sense Exemption in that the proposed Ordinance would only establish administrative processes and would not facilitate new construction or other groundbreaking activities. It can be seen with certa inty that t here is no possibility that the Ordinance will result in either a direct physical change to the environment or a reasonably foreseeable indirect physical change to the environment.

SECTION 4. No Conflict. This Ordinance is not intended to cre ate any requirement, power, or duty that is in conflict with any federal or state law.

SECTION 5. S everability. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid, such decisions shall not affe ct the validity of the remaining portions of this Ordinance. The Council hereby declares that it would have adopted the Ordinance, and each section, subsection, sentence, cla use, or phrase thereof, irrespective of the fact that any one or more sections, s ubsections, sentences, clauses or phrases be deleted.

SECTION 6. Codification. Section 2 of this Ordinance shall be codified in the Hercules Municipal Code.

SECTION 7. Publication and Effective Date. The City Clerk shall certify the adoption of this Or dinance and shall publish or post the Ordinance as required by law. This Ordinance shall be effective 30 days from the date of final adoption.

THE FOREGOING ORDINANCE was fir st read at a regular meeting of the Hercules City Council o n the 10th day of September, 2024, and was passed and adopted at a regular meeting of the Hercules City Council on the 24th day of September, 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Dan Romero, Mayor

Eibleis Melendez
City Clerk

25 REPORT TO THE CITY COUNCIL

DATE: Regular Meeting of June 25, 2024

TO: Mayor and Members of the City Council

VIA: Dante Hall, City Manager

SUBMITTED BY: Patrick Tang, City Attorney
Christina Lawrence, Special Counsel

SUBJECT: Update on Local Business Preference
Program for Goods and Services

RECOMMENDED ACTION:

Review and discuss report; provide direction to City Attorney’s office and staff.

BACKGROUND:

At the Council meeting of December 13, 2022, the Council approved Council Member Alex Walker-Griffin’s request to schedule a discussion on the merits of developing a local small business preference program to promote local businesses located in and/or in the vicinity of Hercules. At the Council meeting on September 12, 2023, the City Attorney provided a general overview of local small business preferences for goods and services, including an example of a local preference program implemented in the City of San Pablo that could serve as a model for development of a preference program in the City of Hercules. The Council expressed an interest in hearing more information on the City of San Pablo’s program, including the success of the program, implementation, and impacts on staff. This report provides an update to Council on local preference programs, including information related to the City’s existing Local Preference Program, as set forth in its Purchasing Guidelines, and additional information related to the City of San Pablo’s local business preference program.

26 DISCUSSION:

City of Hercules’ Existing Local Preference Program
Following the last meeting on the subject, the City Attorney’s office discovered that in 2019, the City adopted Purchasing Guidelines, which include a Local Preference Program. Section 7.5 of the Purchasing Guidelines provide as follows:

7.5 Local Preference

(A) For the purchase of goods or services, excluding public works contracts, when two or more proposals or quotes are the same, in unit, quality, service and total cost, preference should be given to the vendor who operates within the planning area as defined in the City’s General Plan if the quote for services or taxable goods is:

 less than $10,000 and is within 5% of the lowest quote;

 more than $10,000 up to $500,000 and is within 3% of the lowest quote;

 more than $500,000 up to $1,000,000 and within 2% of the lowest quote;

 more than $1,000,000 and within 1% of the lowest quote.

(B) Notwithstanding the foregoing, for procurements subject to the Federal Procurement Requirements the City may not consider or use geographical preferences in the evaluation of bids or proposals, except as provided in 2 CFR § 200.319.

The City’s Local Preference Program applies to the purchase of goods and services, excluding public works and federally-funded procurements (since local preferences are typically prohibited for those procurements). It provides that preference should be given to a local vendor if the local vendor’s quote is within a certain percentage of the lowest quote and is generally the same in all material respects to the lowest quote (in terms of quality, quantity, etc.).

Example: The City requests quotes from service providers to perform janitorial services for City buildings for a three-year term.

Quote 1: A non-local vendor submits a quote to perform the services for a not-to-exceed amount of $600,000 for the full term.

Quote 2: A local vendor submits a quote to perform the services for a not- to-exceed amount of $610,000 for the full term.
27 Quote 3: A local vendor submits a quote to perform the services for a not- to-exceed amount of $620,000 for the full term.

Assuming the contract for janitorial services is awarded based on the lowest quote, application of the preference would result in award to the local vendor that submitted Quote 2, since Quote 2 is within 2% of the lowest quote.

City staff is not aware of any situations in which the City’s Local Preference Program has been implemented or applied. In order to better integrate the preference program into the City’s procurement procedures, it would be advisable to adopt a preference program by ordinance, so that it can be codified in the City’s Municipal Code. Staff can also engage in efforts to promote awareness of the City’s preference program among local businesses, which may include public outreach and updating the City’s website to include information on the preference.

City of San Pablo Local Preference Program
The City Attorney’s office contacted the City of San Pablo for more information on its preference program, including the success of the program, implementation, and impacts on staff.

Much like the City’s local preference, the City of San Pablo’s preference applies to procurements for goods and services, excluding public works or procurements subject to state or federal funding. San Pablo applies a 5% preference, up to a maximum of $5,000, to bids submitted by small local businesses, provided the bids are otherwise equal in responsibility and quality. The preference applies for purposes of determining the lowest responsible bidder for award of a contract. San Pablo defines a “small local business” as a business that has a place of business within the city; a valid, current business license issued by the city; and that either employs fewer than fifty employees or has average annual gross receipts of two million dollars or less, as evidenced by a local small business affidavit that the business submits with its bid.

Example: San Pablo requests bids for a service provider to perform janitorial services for its buildings for a three-year term.

Bid 1: A non-local business submits a bid to perform the services for a not- to-exceed amount of $600,000 for the full term.

Bid 2: A “small local business” submits a bid to perform the services for a not-to-exceed amount of $610,000 for the full term.

Bid 3: A “small local business” submits a bid to perform the services for a not-to-exceed amount of $620,000 for the full term.

In this example, assuming San Pablo awards the contract on a “low bid” basis, application of the preference would not result in award to a small local business. 28 The 5% preference is capped at a maximum amount of $5,000. Thus, for purposes of comparing bids, Bid 2 is evaluated as $605,000 and Bid 3 is evaluated as $615,000.

In terms of the success of the preference in awarding contracts to local businesses, San Pablo has found that few local businesses have benefitted from the preference. There are a couple potential reasons for this, including that San Pablo may have a limited “small local business” base that can respond to solicitations; San Pablo’s preference factor may not have much of an impact for purposes of comparing the monetary value of bids or quotes, particularly in light of the $5,000 cap; and San Pablo often receives state or federal grant funding, which limits its ability to apply the preference to grant- funded procurements.

The City of San Pablo representative was uncertain as to the number of businesses that had benefited from the preference, and as to the types of businesses benefitting from the preference. The representative also indicated that the city applied the preference on a recent procurement for services, but the pricing proposed by each respondent was high, such that the city’s 5% preference (capped at $5,000) did not affect the ultimate award of the contract.

In terms of the impact on staff and implementation, San Pablo indicated that applying the preference does not require much staff time. Typically, the city articulates the possibility of application of the preference to local businesses in the solicitation document. When evaluating bids or quotes, for those respondents that submit a “local business affidavit” as required for the preference, San Pablo confirms the businesses status as a “small local business” and then applies the preference percentage to the pricing proposed by that business for purposes of evaluating and comparing pricing among all respondents.

ANALYSIS:

If the Council is interested in retaining the existing Local Preference Program set forth in Section 7.5 of the City’s Purchasing Guidelines, staff and the City Attorney’s Office recommend adopting the program by ordinance, so that it can be codified in the Municipal Code. Staff and the City Attorney’s office could also incorporate any desired changes to the program during that process, such as expanding the definition of “local” to include businesses in neighboring communities and/or incorporating a “small” business element. City staff can also promote awareness of the preference program among local businesses, which may include public outreach and updating the City’s website.

29 FISCAL IMPACT:

If Council directs additional measures regarding a local business preference program, there may be staff and legal expenses associated with the development and implementation of those additional measures. Additionally, depending on the type of additional measures adopted, the procurement of goods and services may become marginally more expensive.

ATTACHMENTS:

1. City’s Purchasing Guidelines

2. Report to the City Council from the September 12, 2023 Meeting

30 CONSENT CALENDAR

AGENDA ITEMS

1. 22-936

2. 22-942

3. 22-943

31 111 Civic Drive
Hercules, CA 94547City of Hercules
Meeting Minutes
City Council
Mayor Dan Romero
Vice Mayor Dion Bailey
Council Member Alex Walker-Griffin
Council Member Chris Kelley
Council Member Tiffany Grimsley
Dante Hall, City Manager
Christine Crowl, City Attorney
Eibleis Melendez, City Clerk
6:30 PMTuesday, July 23, 2024
CLOSED SESSION - 6:30 P.M., REGULAR MEETING - 7:00 P.M.

In-Person in Council Chambers or to Listen only: Zoom ID: 856 8845 4721 Zoom Passcode: 718298 Zoom Phone Number: 1-669-900-6833 I. CLOSED SESSION – CALL TO ORDER - ROLL CALL - 6:30 P.M.

Council Member C. Kelley, Council Member A. Walker-Griffin, and Mayor D.

Romero

Present: 3 -
Council Member T. Grimsley, and Vice Mayor D. BaileyAbsent: 2 - II. PUBLIC COMMUNICATION - CLOSED SESSION ITEMS
NONE
III. CONVENE INTO CLOSED SESSION
The Hercules City Council will meet in Closed Session regarding the following:

City Attorney, Patrick Tang, read aloud the Closed Session item to be discussed. Council and Staff convened into Closed Session.

1. 22-911 CONFERENCE WITH LEGAL COUNSEL - POTENTIAL LITIGATION - pursuant to Government Code Section 54956.9(e)(1): in one (1) matter.

Meeting went into Recess
IV. REGULAR MEETING – CONVENE TO OPEN SESSION - ROLL CALL - 7:00 P.M.

Council Member C. Kelley, Council Member A. Walker-Griffin, and Mayor D.

Romero

Present: 3 -
Council Member T. Grimsley, and Vice Mayor D. BaileyAbsent: 2 - V. REPORT ON ACTION TAKEN IN CLOSED SESSION
City Attorney, Patrick Tang, reported out on the Closed Session item.

22-936
32 July 23, 2024City Council Meeting Minutes
There was no final or reportable action on the item discussed in Closed Session.

VI. PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by Council Member Kelley.

VII. MOMENT OF SILENCE
NONE
VIII. INTRODUCTIONS/PRESENTATIONS/COMMISSION REPORTS
NONE
IX. AGENDA ADDITIONS/DELETIONS
NONE
X. PUBLIC COMMUNICATIONS
NONE
This time is reserved for members of the public to address issues not included in the agenda. In accordance with the Brown Act, Council will refer to staff any matters brought before them at this time, and those matters may be placed on a future agenda.

Individuals wishing to address the City Council are asked to complete a form indicating the name and address of the speaker and the general topic to be addressed. Speakers must make their comments from the podium and will be allowed 3 minutes to discuss their concerns. All public comments are recorded and become part of the public record. A limit of 30 minutes will be devoted to taking public comment at this point in the agenda. If any speakers remain at the conclusion of the initial 30 minute period, time will be reserved at the conclusion of the meeting to take the remaining comments.

XI. PUBLIC HEARINGS

1. 22-908
Public Hearing to amend and restate the City of Hercules’ participation in the Statewide Community Infrastructure Program (SCIP) and consideration of a SCIP application from D.R. Horton for the Owl Ranch residential project.

RECOMMENDATION:

Staff recommends that the City Council adopt Resolution No. 24-XX (Attachment 1), an Amended and Restated Resolution making certain findings and authorizing certain actions necessary for the City of Hercules to confirm and expand its participation in SCIP and finding the action exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3).

Staff also recommends that the City Council adopt Resolution No. 24-XX (Attachment 2) authorizing the City Manager to approve the SCIP application from D.R. Horton, dated June 27, 2024 (Attachment 3) and

33 July 23, 2024City Council Meeting Minutes
finding the action exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3).

Staff Report - SCIP
Attach 1 - Resolution - SCIP
Attach 1A - Resolution of Intention
Attach 1B - Acquisition Agreement
Attach 1C - Eligible Facilities & Fees
Attach 1D - Eligible Services
Attach 2 - Resolution - SCIP 24-01 - Owl Ranch
Attach 3 - DR Horton SCIP Application 6.27.24
Attach 4 - Supplemental Memo 5.9.24
Attachments:

Community Development Director, Tim Rood, introduced and presented the item. Representatives from DR Horton Bay, Inc and California Statewide Communities Development Authority(CSCDA), also presented and were present in person and via Zoom to answer any questions.

Council provided comment and asked questions. Director Rood and the consultants provided a response Mayor Romero opened the Public Hearing. No public comment. Mayor Romero closed the public hearing.

Action was taken on this item.

MOTION: A motion was made by Council Member Kelley, seconded by Council Member Walker-Griffin, to adopt Resolution 24-049. The motion carried by the following vote:

Aye: Council Member C. Kelley, Council Member A. Walker-Griffin, and Mayor D.

Romero
3 -

Absent: Council Member T. Grimsley, and Vice Mayor D. Bailey2 - MOTION: A motion was made by Council Member Walker-Griffin, seconded by Council Member Kelley, to adopt Resolution 24-050. The motion carried by the following vote:

Aye: Council Member C. Kelley, Council Member A. Walker-Griffin, and Mayor D.

Romero
3 -

Absent: Council Member T. Grimsley, and Vice Mayor D. Bailey2 -

2. 22-925
Fiscal Year 2024/25 Assessment Rates and Service Levels for Victoria by the Bay Landscaping and Lighting Assessment District (Continued from the June 25 Council Meeting)
RECOMMENDATION:

It is recommended the City Council:
a. Hold a Public Hearing to receive testimony regarding the proposed increase to the maximum assessment rate for the City of Hercules Landscaping and Lighting Assessment District No. 2002-1 (Victoria by the Bay LLAD) commencing with FY 2024/25;

34 July 23, 2024City Council Meeting Minutes
b. Adopt a Resolution Declaring the Results of the Ballot Tabulation Regarding the Proposed Increase to the Maximum Assessment Rate for the Victoria by the Bay LLAD commencing Fiscal Year 2024/25; c. Adopt a Resolution Approving the Final Engineer’s Report, Confirming Diagram and Assessments, and Ordering Levy of Assessments for Fiscal Year 2024/25 for the Victoria by the Bay LLAD pursuant to the Landscaping and Lighting Act of 1972;
d. Provide direction to City Staff on the timing of Service Level Reductions for the Residential Parkway Strips in the Victoria by the Bay LLAD, which Staff recommends occur on September 1, 2024; and
e. Review and provide direction to Staff on a Draft Promissory Note outlining terms for repayment of the Victoria by the Bay LLAD cumulative fund deficit.

Staff Report - FY 2024-25 VBTB
Attach 1 - July 24, 2024 L2202-1 Staff Report
Attach 2 - Resolution Declaring Results of The Protest Balloting 2002-1
Attach 3 - Resolution Confirming Diagram and Assessments 2002-1 Attach 4 - L2002-1-2425 FER (Prop 218 Not Pass & Service Cuts) Continued PHv2
Attach 5 - Promissory Note LLAD No. 2002-1 Victoria by the Bay Attachments:

City Manager, Dante Hall, introduced the item. Public Works Director, Mike Roberts, presented. Council asked questions and provided comment.

Director Roberts and City Attorney, Patrick Tang, provided a response.

Mayor Romero opened the public Hearing. No public comment. Mayor Romero closed the Public Hearing. Council discussion continued. City Manager Hall and Finance Director, Edwin Gato, provided a response.

Action was taken on this item; Resolutions 24-051 and 24-052 were approved.

Council agreed to hold a Special Meeting on August 29th or 30th, based on Council Member availability, to continue part 'd' of this item and bring it back to Council for discussion.

Staff was directed to prepare the Promissory Note(Part e).

MOTION: A motion was made by Council Member Kelley, seconded by Council Member Walker-Griffin, to adopt Resolution 24-052 . The motion carried by the following vote:

Aye: Council Member C. Kelley, Council Member A. Walker-Griffin, and Mayor D.

Romero
3 -

35 July 23, 2024City Council Meeting Minutes

Absent: Council Member T. Grimsley, and Vice Mayor D. Bailey2 - MOTION: A motion was made by Council Member Kelley, seconded by Council Member Walker-Griffin, to adopt Resolution 24-051 . The motion carried by the following vote:

Aye: Council Member C. Kelley, Council Member A. Walker-Griffin, and Mayor D.

Romero
3 -

Absent: Council Member T. Grimsley, and Vice Mayor D. Bailey2 - XII. CONSENT CALENDAR
MOTION: A motion was made by Council Member Kelley, seconded by Council Member Walker-Griffin, to adopt the Consent Calendar. The motion carried by the following vote:

Aye: Council Member C. Kelley, Council Member A. Walker-Griffin, and Mayor D.

Romero
3 -

Absent: Council Member T. Grimsley, and Vice Mayor D. Bailey2 -

1. 22-922
Meeting Minutes for the Regular Meeting of July 9, 2024 Meeting Minutes for the Regular Meeting of July 9, 2024Attachments:

APPROVED

2. 22-923 Annual Fiber Optic Broadband Report
RECOMMENDATION:

Receive Report.

Staff Report - Fiber Optic Annual Report 202425Attachments:

APPROVED

3. 22-929 Approve Pay and Benefit Plans for Executive, Mid-Management & Non-Represented Pay Plans
RECOMMENDATION:

Staff recommends that the City Council Adopt a Resolution Approving Pay and Benefit Plans for Executive, Mid-Management, and Non-Represented Employee Groups and authorize the City Manager to execute the Plans for a one-year term starting July 1, 2024, and ending June 30, 2025.

Staff Report - Pay Plans - Executive-MidMgmt & Unrep
Attach 1 - Resolution Approving Pay and Benefit Plans FY 24-25 Attach 2 - Executive Pay and Benefit Plan Proposed effective 07012024
Attach 3 - Mid Management-Pay and Benefit Plan-Proposed effective 07012024
Attach 4 - Unrepresented Pay and Benefit Plan Proposed effective 07012024
Attachments:

Resolution 24-053, APPROVED

36 July 23, 2024City Council Meeting Minutes

4. 22-924 Quarterly Review of Future Agenda Items List
RECOMMENDATION:

Staff recommends that the City Council receive the staff report on the quarterly review of future City Council agenda items.

Staff Report - Quarterly Review of Future Agenda Items
Attach 1 - Future Agenda Items List
Attachments:

APPROVED
XIII. DISCUSSION AND/OR ACTION ITEMS

1. 22-926 Proposal to Administer the Housing Successor Agency Housing Loan Program and Business Development Loan Program.

RECOMMENDATION:

Adopt a Resolution authorizing the City Manager to execute a $113,000 professional service agreement with RSG to develop and implement a plan to restructure the non-performing loans, including borrower negotiations and amending loan agreements.

Staff Report - Housing Successor Loan
Attach 1 - Resolution
Attach 2 - RSG Loan Program Administration Proposal
Attachments:

City Manager, Dante Hall, introduced the item. Finance Director, Edwin Gato, presented. A representatives from RSG attended via Zoom to answer questions. Council asked questions and provided comment. RSG provided a response. No public comment. Action was taken on this item.

MOTION: A motion was made by Council Member Kelley, seconded by Council Member Walker-Griffin, to adopt Resolution 24-054. The motion carried by the following vote:

Aye: Council Member C. Kelley, Council Member A. Walker-Griffin, and Mayor D.

Romero
3 -

Absent: Council Member T. Grimsley, and Vice Mayor D. Bailey2 -

2. 22-927
Approval of Final Hercules Logo Design
RECOMMENDATION:

Staff recommends that the City Council adopt a resolution approving the final version of the Hercules logo. Upon adoption, Tripepi Smith will generate a logo library of derivative versions, including horizontal, 1-color, and simplified versions for various uses.

Staff Report - Approval of Hercules Final Logo Design
Attach 1 - Resolution
Attach 2 - Proposed Logo Design
Attachments:

37 July 23, 2024City Council Meeting Minutes
City Manager, Dante Hall, introduced the item. A representative from Tripepi Smith presented. Council asked questions and provided comment.

No public comment. Action was taken on this item.

MOTION: A motion was made by Council Member Walker-Griffin, seconded by Council Member Kelley, to adopt Resolution 24-055. The motion carried by the following vote:

Aye: Council Member C. Kelley, Council Member A. Walker-Griffin, and Mayor D.

Romero
3 -

Absent: Council Member T. Grimsley, and Vice Mayor D. Bailey2 -

3. 22-928
Approval Of East Bay Wildfire Prevention Coordinating Group Memorandum of Understanding
RECOMMENDATION:

Staff recommends that the City Council:

1. Adopt a resolution authorizing the City of Hercules to enter into a Memorandum of Understanding (MOU) with other jurisdictions in Alameda and Contra Costa Counties to form a Wildfire Prevention Coordinating Group (WPCG) to improve region-wide collaboration to reduce wildfire risk.

2. Appoint a member of the City Council to serve on the Wildfire Prevention Coordinating Group (WCPG) as the elected official representing the City of Hercules
Staff Report - Wildfire Prevention MOU
Attach 1 - Resolution
Attach 2 - East Bay Hills Wildfire Coordination MOU
Attach 3 - East Bay Wildfire Prevention -NeedsToBeAddressed -RelatedEfforts
Presentation - Wildfire Protection Coordinating Group MOU Attachments:

City Manager, Dante Hall, introduced the item. Representatives from Wildfire Prevention Coordinating Group(WCPG) presented. Council asked questions and provided comment. WCPG provided a response.

Public comment was provided by Marie Bowman. Action was taken on this item.

Council Member Walker-Griffin was appointed as primary, and Council Member Kelley was appointed as the alternate to represent the City of Hercules on the Wildfire Prevention Coordinating Group(WCPG).

MOTION: A motion was made by Council Member Walker-Griffin, seconded by Council Member Kelley, to adopt Resolution 24-056. The motion carried by the following vote:

Aye: Council Member C. Kelley, Council Member A. Walker-Griffin, and Mayor D.

Romero
3 -

38 July 23, 2024City Council Meeting Minutes

Absent: Council Member T. Grimsley, and Vice Mayor D. Bailey2 - XIV. PUBLIC COMMUNICATIONS
This time is reserved for members of the public who were unavailable to attend the Public Communications period during Section X of the meeting, or were unable to speak due to lack of time. The public speaker requirements specified in Section X of this Agenda apply to this Section.

Public Comment was provided by Robert Baum and Marie Bowman.

XV. CITY COUNCIL/CITY MANAGER/CITY ATTORNEY ANNOUNCEMENTS,

COMMITTEE, SUB-COMMITTEE AND INTERGOVERNMENTAL COMMITTEE REPORTS

AND FUTURE AGENDA ITEMS
This is the time for brief announcements on issues of interest to the community. In accordance with the provisions of the Brown Act, matters which do not appear on this agenda but require City Council discussion may be either (a) referred to staff or other resources for factual information or (b) placed on a future meeting agenda.

1. Regional Committee

2. City Council Committees and Subcommittees

3. Commission Liaisons
City Manager, Dante Hall, promoted National Night out and other upcoming community events. City Attorney, Patrick Tang, had no announcements.

1. Regional Committee
Council Member Walker-Griffin attended the Contra Costa Mayors Conference hosted by Orinda. Mayor Romero reported out on the West County Integrated Waste Management Meeting.

2. City Council Committees and Subcommittees
No reports were provided

3. Commission Liaisons
No reports were provided
Community Events-
Council Member Kelley attended the launch of San Francisco Bay Ferry's Hydrogen Zero emission Ferry.

Future Agenda Item Requests-
Mayor Romero requested to have the Executive Director from Recyclemore present at a September meeting providing a preview on the Post Collection Agreement. The Council agreed unanimously to add this item to a meeting in September.

XVI. ADJOURNMENT

39 July 23, 2024City Council Meeting Minutes
Mayor Romero adjourned the meeting at 8:51 p.m.
_________________________________
Dan Romero, Mayor
Attest:
_______________________________
Eibleis Melendez, City Clerk

40 CONSENT CALENDAR

AGENDA ITEM

2. 22-942

41 STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of September 10, 2024
TO: Mayor and Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Edwin Gato, Director of Finance
SUBJECT: Accept the Investment Report for the Quarter Ending June 30, 2024 RECOMMENDED ACTION:

Accept the Investment Report for the Quarter Ending June 30, 2024 EXECUTIVE SUMMARY:

Pursuant to California Government Code section 53646 and the City’s Investment Policy, a quarterly report and certification shall be provided to the City Council, City Manager, and City Auditor. The Quarterly Investment Report shall include a complete description of the portfolio, the type of investments, the issuers, maturity dates, par value and dollar amounts invested in all securities. The certification must provide assurances that investments were made consistent with the City’s Investment Policy and that the City will meet its expenditure obligations for the next six months. The Quarterly Investment Report for the quarter ending June 30, 2024, is provided as Attachment 1.

BACKGROUND:

To comply with state law and city policy, the City is required to present quarterly investment reports detailing the City's investment portfolio to the City Council, City Manager, and City Auditor. The Council's authority to invest or reinvest funds or sell or exchange securities is delegated to the City's Finance Director, who also serves as City Treasurer. Pursuant to the Investment Policy, the City Treasurer may delegate some of their fiduciary responsibility to an outside investment management firm. An investment manager's fiduciary responsibility is a legal requirement related to registration with the Securities and Exchange Commission under the Investment Advisor Act of 1940. Due to the specialized services and 22-942
42 expertise required to assist the City in the varied investment options available, the City has used the Local Investment Agency Fund (LAIF) and PARS experienced investment managers.

ANALYSIS:

This report presents the City’s investment portfolio for the quarter ending March 31, 2024.

It has been prepared to comply with regulations contained in California Government Code Section 53646 and City’s Investment Policy. The report includes all cash and investments managed by the City. It also includes City-related investments held by bond trustees for debt service obligations as well as money held in the irrevocable trust with PARS for pension and other post-employment benefits (OPEB). The report provides information on the investment type, issuer, maturity date, cost, and current market value for each security.

The City utilizes the Local Agency Investment Fund (LAIF) as a money market fund administered by the State Treasurer. LAIF has many governmental agency participants and holds securities through its administrator. LAIF provides local agencies a way to invest cash held in treasury pool that may be withdrawn as needed on a same-day basis to meet the agency’s cash flow needs while realizing interest generated by the Pooled Money Investment Account (PMIA). Moreover, the Investments held by Bond Trustees are administered in accordance with individual bond indentures.

As of June 30 , 2024 , the overall pooled investment portfolio average yield (before adjustments for changes in market value) was 2.51%, which is lower than the rate for two- year U.S. Treasury Note at 4.71% and LAIF average monthly rate of 4.48%. The market value of the pooled portfolio was $222,624 or 0.30% lower than the book value. As the City does not intend to sell its pooled investment portfolio securities prior to maturity, this will have no effect on yield.

80% of the total Investment Portfolio was deposited with LAIF as of June 30, 2024. LAIF has 80.2% of its investments in U.S. Treasuries and agency notes, 9.2% in CDs and bank notes, and 10.6% in other types of investments. Additional economic summaries and specific information related to each of the investment advisors and LAIF are included in the Investment Portfolio Summary Report included in attachment 1.

Amount
Market Over/(Under) Average
Investment Type Value Cost Yield
Petty Cash $2,005 - 0.00%
Cash in Bank 7,231,995 - 0.47% Local Agency Investment Fund (LAIF) 60,208,004 ($222,624) 4.48% Irrevocable Trust (Pension) 2,391,824 - 0.91% Irrevocable Trust (OPEB) 2,888,601 - 0.91% Investments with Bond Trustees 2,353,663 - 4.16% Total Portfolio $75,076,092 ($222,624) 2.51%
43 The City invests its idle cash from all operating funds on a pooled basis to maximize returns.

Earnings are allocated to each fund based on the average cash balance. The timing of revenue collections, such as property tax, business licenses, and franchise tax, affects the quarterly investment income during the year. There is adequate cash to meet expected obligations over the next six months.

Governmental Accounting Standards Board (GASB) Statement 40 requires the City to recognize the fair market value of its investments at the end of each fiscal year. The market values of investments included in this report are obtained from the State Controller’s office for LAIF and from the City’s registered investment managers and bond trustees for all other investments. These market valuations are subject to daily changes. The difference between market value and historical costs, known as Unrealized Investment Gains and Losses, are temporary in nature and are not cash related transactions. Since it is the City’s general intention to hold its investments until maturity, when they would be redeemed at par value, any unrealized gain or loss is only reported at the end of the fiscal year in the City’s Comprehensive Annual Financial Report.

Of the total cash and investments reported above, the portions held in the City’s General Fund (approximately $27.8 million, or 37%) and Internal Service Funds (approximately $1.9 million or 3%) are unrestricted, although a portion of these amounts may be committed for existing obligations or designated for speci fic purposes. The remaining $ 45.6 million, or 61%, of the City’s cash and investments are restricted for specific uses, in accordance with federal, state, or local agency rules and regulations.

FISCAL IMPACT:

This is an information report with no fiscal impact.

ATTACHMENTS:

1. Quarterly Investment Report

44 1

INVESTMENT REPORT
For the Quarter Ending June 30, 2024
City of Hercules, California
45 CITY OF HERCULES

FINANCE DEPARTMENT
111 CIVIC DRIVE
HERCULES, CALIFORNIA 94547-1771
PHONE: 510-799-8200
September 10, 2024
Honorable Mayor and City Council:

I verified that this investment portfolio, as of June 30, 2024, conforms with all state laws and City’s investment policy. The City’s expenditures requirements for the next months are covered by anticipated revenues from City operations and liquidity from cash on deposit.

As of June 30, 2024, the City has sufficient funds to meet its expenditure requirements for the next six months.

Sincerely,
Edwin Gato
Finance Director/City Treasurer
46 City of Hercules, California
Investment Portfolio Summary Report
For the Quarter Ended June 30, 2024
Book % of Average Market
Value Total Yield Value
Cash on Hand $2,005 $2,005
Cash on Deposit 7,231,995 7,231,995
Total Cash on Hand 7,234,000 9.61% 0.47% 7,234,000
Local Agency Investment Fund (LAIF) 60,430,628 80.25% 4.48% 60,208,004 Irrevocable Trust (Pension) 2,391,824 3.18% 0.91% 2,391,824 Irrevocable Trust (OPEB) 2,888,601 3.84% 0.91% 2,888,601 Investments with Bond Trustees 2,353,663 3.13% 4.16% 2,353,663 Total Portfolio $75,298,716 100.00% 2.51% $75,076,092
Amount over (under) Market Value vs. Book Value ($222,624) % of Portfolio -0.30%
Investments by Type
Cash on Hand
LAIF
Irrevocable Trust
(Pension)
Irrevocable Trust
(OPEB)
Investments with
Trustees
47 City of Hercules
Detail for Investment Portfolio Summary Report
For the Quarter Ended June 30, 2024
(DAYS)

BOOK PURCHASE MATURITY LIFE TO REMAINING PAR MARKET

DESCRIPTION VALUE RATE YIELD DATE DATE MATURITY LIFE VALUE VALUE

CASH ON HAND
PETTY CASH 2,005.00 0.00% 0.00% 2,005.00 $2,005.00

CASH IN BANK
MECHANICS BANK - GENERAL CHECKING 2,854,759.75 0.00% 0.00% 2,854,759.75 2,854,759.75 MECHANICS BANK - HERCULES RDA 4,316,704.86 0.00% 0.00% 4,316,704.86 4,316,704.86 MECHANICS BANK - PD ASSET SEIZURE 38,797.98 0.00% 0.00% 38,797.98 38,797.98 CalTRUST 21,732.72 0.47% 0.47% 4/1/2024 6/30/2024 90 - 21,732.72 21,732.72 TOTAL AND AVERAGES 7,231,995.31 0.47% 0.47% 90 - 7,231,995.31 7,231,995.31

LOCAL AGENCY INVESTMENT FUND (LAIF)
LAIF 60,430,628.02 4.48% 4.48% 4/1/2024 6/30/2024 90 - 60,430,628.02 60,208,004.12

IRREVOCABLE TRUST (PENSION/OPEB)
US BANK MUTUAL (PARS-OPEB) 2,888,601.03 0.91% 0.91% 4/1/2024 6/30/2024 90 - 2,888,601.03 2,888,601.03 US BANK MUTUAL (PARS-PENSION) 2,391,823.73 0.91% 0.91% 4/1/2024 6/30/2024 90 - 2,391,823.73 2,391,823.73 TOTAL AND AVERAGES 5,280,424.76 0.91% 0.91% 90 - 5,280,424.76 5,280,424.76

INVESTMENTS WITH BOND TRUSTEES

WEBSTER BANK (STERLING NATIONAL BANK
ESCROW) 118,737.26 0.25% 0.25% 4/1/2024 6/30/2024 90 - 118,737.26 118,737.26 THE BANK OF NEW YORK (BNY) JM 05 1 RESERVE
FUND 2019 55,797.47 0.00% 0.00% 4/1/2024 6/30/2024 90 - 55,797.47 55,797.47

THE BANK OF NEW YORK (BNY) MELLON TRUST
HERCULES PFA WW INTEREST ACCT 21 A 2,887.50 0.00% 0.00% 4/1/2024 6/30/2024 90 - 2,887.50 2,887.50

THE BANK OF NEW YORK (BNY) MELLON TRUST
(HERCULES PFA 09 REVENUE FUND) 652,853.60 5.14% 5.14% 4/1/2024 6/30/2024 90 - 652,853.60 652,853.60

THE BANK OF NEW YORK (BNY) MELLON TRUST
(HERCULES PFA 09 DEBT SERV PRIN ACCT) 278,955.31 5.14% 5.14% 4/1/2024 6/30/2024 90 - 278,955.31 278,955.31

THE BANK OF NEW YORK (BNY) MELLON TRUST
(HERCULES PFA 09 DEBT SERV INT ACCT) 319,648.84 5.14% 5.14% 4/1/2024 6/30/2024 90 - 319,648.84 319,648.84

THE BANK OF NEW YORK (BNY) MELLON TRUST
(HERCULES PFA 09 RESERVE FD) 920,215.00 5.14% 5.14% 4/1/2024 6/30/2024 90 - 920,215.00 920,215.00

THE BANK OF NEW YORK (BNY) MELLON TRUST
(HERCULES 2020 INT FD) 4,567.80 0.00% 0.00% 4/1/2024 6/30/2024 90 - 4,567.80 4,567.80 TOTAL AND AVERAGES 2,353,662.78 4.16% 4.16% 90 - 2,353,662.78 2,353,662.78 TOTAL INVESTMENT REPORT $75,298,715.87 2.51% 2.51% 90 - $75,298,715.87 $75,076,091.97 48 City of Hercules, California
Investment Portfolio Summary Report
For the Quarter Ended June 30, 2024
% of
Cash Description Book Value Total
Bond Trustee $2,353,663 3%
Irrevocable Trust 5,280,425 7%
Restricted 37,990,211 50%
General Fund 27,796,757 37%
Internal Service Funds 1,877,660 2%
Total, Book Value $75,298,716 100%
Restricted:

Wastewater 17,297,344
Successor Housing 5,660,800
Development Impact Fees 3,360,134
Successor Agency 6,085,004
Landscape & Lighting 1,517,677
Gas Tax & Measure J "Street" 1,222,305
Solid Waste 837,372
SB1 RMRA 1,017,172
Agency Fund 748,308
Asset Seizure 221,459
Other 22,636
37,990,211
Bond Trustee
3% Irrevocable Trust
7%
Restricted
50%
General Fund
37%
Internal Service Funds
3%
Cash by Fund
49 June 4.480
May 4.332
April 4.272
March 4.232
February 4.122
January 4.012
PMIA Average Life(1): 217
LAIF Fair Value Factor(1): 0.996316042
PMIA Daily(1): 4.52
PMIA Quarter to Date(1): 4.36
LAIF Apportionment Rate(2): 4.55
LAIF Earnings Ratio(2): 0.00012419067099490
LAIF Administrative Cost(1)*: TBD
Treasuries

56.98%
Agencies

23.22%
Certificates of
Deposit/Bank Notes

9.18%
Time
Deposits

3.14%
Commercial
Paper

6.84%
Corporate
Bonds

0.42%
Loans

0.22%
Notes: The apportionment rate includes interest earned on the CalPERS Supplemental Pension Payment pursuant to Government Code 20825 (c)(1) and interest earned on the Wildfire Fund loan pursuant to Public Utility Code 3288 (a). *The percentage of administrative cost equals the total administrative cost divided by the quarterly interest earnings. The law provides that administrative costs are not to exceed 5% of quarterly EARNINGS of the fund. However, if the 13-week Daily Treasury Bill Rate on the last day of the fiscal year is below 1%, then administrative costs shall not exceed 8% of quarterly EARNINGS of the fund for the subsequent fiscal year.

Source:
(1) State of California, Office of the Treasurer
(2) State of Calfiornia, Office of the Controller
PMIA Average Monthly
Effective Yields(1)
PMIA/LAIF Performance Report
as of 6/30/2024
Daily rates are now available here. View PMIA Daily Rates Quarterly Performance
Quarter Ended 06/30/24
Chart does not include $1,943,000.00 in mortgages, which equates to 0.001%. Percentages may not total 100% due to rounding.

Pooled Money Investment Account
Monthly Portfolio Composition (1)
6/30/24
$162.3 billion
50 CON

SENT CALENDAR

AGENDA ITEM

3. 22-943
51 STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of September 10, 2024
TO: Mayor and Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Edwin Gato, Director of Finance
SUBJECT: Authorization to Extend the Audit Services with The Pun Group for three years ending June 30, 2025, June 30, 2026, and June 30, 2027, with the option to extend for an additional two fiscal years.

RECOMMENDED ACTION:

Adopt a Resolution authorizing the City Manager to Execute a three-year agreement for independent auditing services with the Pun Group with the option to extend for an additional two fiscal years.

BACKGROUND:

The Pun Group has served as the City’s independent auditor for the past five years. It has audited the City’s internal controls and financial statements for fiscal year (FY) 2019- 20 to FY 2023 -24. The City’s contract with the firm has now expired. The Finance Department, with limited staffing, is in the midst of significant special projects, with the development of Long-Range Financial Forecast (LRFF), revenue enhancements initiatives, migrating and implementing subsidiary systems, and rate analysis. Given the excellent service that the Pun Group has provided to the City and has developed an understanding of the City’s operations which resulted in delivering quality audit services, the City Council is requested to authorize the City Manager to enter into an agreement with the Pun Group for additional three years, with the option to extend for two subsequent years.
22-943
52 ANALYSIS:

The City arranges for an annual audit of its financial statements by independent auditors.

The auditors play a critical role in evaluating the City’s system of internal controls and overall financial management and condition. They also assist in the preparation of the Comprehensive Annual Financial Report (CAFR) and aid with the implementation of new Governmental Accounting Standard Board (GASB) pronouncements.

On April 28, 2020, the City entered into a contract for auditing services with the Pun Group for a period of five years, covering audits of the City’s activities for FY 19-20 through FY 23-24. The City’s contract with the firm has now expired.

The Finance Department is in the midst of a significant special project s, with the development of Long -Range Financial Forecast (LRFF), revenue enhancements initiatives, migrating and implementing subsidiary systems, and rate analysis for the Sewer system . It is the opinion of staff that the Pun Group has provided excellent customer service, technical expertise and understanding of the City’s operations. Due to their excellent work, competitive pricing, staff believes that it would be prudent to engage the Pun Group for an additional three years of auditing services with the option to extend for an additional two subsequent years, so that the City will not need to transition to a new firm during this critical period.

The Pun Group is highly qualified to continue to provide both independent audit services to the City and to implement new GASB pronouncements due to their experience, qualifications, and demonstrated ability. The firm continue to meet the independence standards of the U.S. General Accounting Office Government Auditing Standards.

The Pun Group has perfo rmed excellent auditing services to the City over the past five years. The firm has proven to be very knowledgeable and has valuable resources which have assisted the City in implementing new accounting standards, and assist in strengthening the City’s internal control. Staff is recommending extending the contract for three years with the option to extend for additional two fiscal years.

53 FISCAL IMPACT:

The following are the total fixed fees for fiscal years ending June 30, 2025, June 30, 2026, and June 30, 2027, with option for the City to extend the contract for an additional two fiscal years.

 The Single Audit fees is based on (1) major programs. The fee to audit additional major programs will be $3,500 each programs determined to be “major” will be based on OMB Uniform Grant Guidance.

The budget to support the first year of audit services is included in the FY 20 24-25 General Fund Budget under Finance Department Professional Services line item (100- 4625-611.60-00). The budget for the subsequent years’ audit services will be established in the annual budget process.

ATTACHMENTS:

Attach 1- Resolution
Attach 2- The Pun Group Proposal

S ervices F Y 2024-25F Y 2025-26F Y 2026-27F Y 2027-28F Y 2028-29 C ity's F inancial A udit 40,000 $ 42,000 $ 44,100 $ 46,305 $ 48,620 $ A C F R P reparation - $ - $ - $ - $ - $ Management L etter - $ - $ - $ - $ - $ G A S B 87 and 96 3,500 $ 3,675 $ 3,859 $ 4,052 $ 4,254 $ A udit of Hercules' W astewater F und 4,000 $ 4,200 $ 4,410 $ 4,630 $ 4,862 $ A greed Upon P rocedures (A UP ) - Measure B 2,000 $ 2,100 $ 2,205 $ 2,315 $ 2,431 $ A greed Upon P rocedures (A UP ) - Measure N 2,000 $ 2,100 $ 2,205 $ 2,315 $ 2,431 $ A greed Upon P rocedures (A UP ) - G A NN L imit500$ 525$ 551$ 579$ 608$ S tate C ontroler's R eport 4,000 $ 4,200 $ 4,410 $ 4,631 $ 4,862 $ S ingle A udit - 1 Major P rogram 5,000 $ 5,250 $ 5,513 $ 5,788 $ 6,078 $ T otal 61,000 $ 64,050 $ 67,253 $ 70,615 $ 74,146 $ Optional
54 Financial Impact
Description: Auditing Services – Year 1
Funding Source: General Fund – Finance (100-4625-611.60-00) Budget Recap:

Total Estimated cost: $61,000 New Revenue: None
Amount Budgeted: $65,000 Lost Revenue: N/A
New funding required: No New Personnel: N/A
Council Policy Change: Yes No

55 HERCULES CITY COUNCIL
RESOLUTION NO. ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERCULES

AUTHORIZING THE CITY MANAGER TO EXECUTE A THREE -YEAR AGREEMENT

TO CONTINUE THE INDEPENDENT AUDITING SERVICES WITH THE PUN GROUP

WITH THE OPTION TO EXTEND FOR AN ADDITIONAL TWO FISCAL YEARS

WHEREAS, the City is required to have an annual financial audit within six months of each fiscal year end; and

WHEREAS, the City of Hercules has entered into an agreement with the Pun Group for the provision of audit ing services to the City which expires at the conclusion of FY 2023-24 audit; and

WHEREAS, the City of Hercules wants to continue to use the services of the Pun Group to provide auditing services to the City.

NOW, THEREFORE, BE IT RESOLVED by the City Co uncil of the City of Hercules hereby authorizes the City Manager to e xecute an agreement with the Pun Group to provide auditing services for FY 2024 -25, FY 2025-26 and FY 2026 -27, in the amount s of $61,000, $64,050 and $67,253, respectively , with the optio n to extend for an additional two fiscal years in the amounts of $70,615 and $74,146, respectively.

The foregoing Resolution was duly and regularly adopted at a regular meeting of the City Council of the City of Hercules held on the 10th day of September 2024 by the following vote of the Council:

AYES:

NOES:

ABSTAIN:

ABSENT:

____________________________
Dan Romero, Mayor

ATTEST:

________________________________
Eibleis Melendez, City Clerk
56 57
The Pun Group LLP is recognized for its professionalism, integrity and for providing clients with practical solutions unique to their circumstances and issues. You will receive a superior level of service and a quality audit.

Thank You!
Thank you for allowing us to submit our qualifications to provide you with Professional Auditing Services.

The Pun Group LLP
Certified Public Accountants and Business Advisors

WHY CHOOSE
THE PUN GROUP LLP?

Big firm expertise, small firm values
Personal attention meets technical expertise
A unique firm culture
Innovation embraced
Achievable plans to move your organization forward

The Pun Group’s most
valuable asset is our
people, they and their
deep experience drive our
every interaction with
clients.
“
”
Kenneth H. Pun, CPA, CGMA
Founder & Managing Partner
58 City of Hercules

Table of Contents
Transmittal Letter ........................................................................................... 1 Independence ................................................................................................ 3 License to Practice in California..................................................................... 3 Firm Qualifications and Experience ............................................................... 4 Partner, Supervisory, and Staff Qualifications and Experience ..................... 8 Similar Engagements with Other Government Entities ............................... 16 Specific Audit Approach ............................................................................... 28 Cost Proposal............................................................................................... 35 Let’s Get to Work! ........................................................................................ 37 Appendix A – Available Training ..................................................................... i Appendix B – Certificate of Insurance ........................................................... ii 59 For the 4th consecutive year,
The Pun Group has been honored with the
"Best of Accounting" Award.

The Pun Group LLP is proud to have won 2024’s Best of
Accounting® award from ClearlyRated for consistently
delivering exceptional service to its clients for the fourth consecutive year.

Winners of such awards have proven to be industry leaders in service quality based entirely on ratings provided by their clients. On average, clients of 2024 Best of Accounting winners are 70% more likely to be satisfied than those who work with non-winning firms.
“I am pleased to introduce the 2024 Best of Accounting
winners alongside their validated service ratings on
ClearlyRated.com,” said ClearlyRated’s CEO, Eric Gregg. “These firms have demonstrated a remarkable commitment
to delivering amazing experiences despite another year of upheaval and macroeconomic uncertainty. Hats off to these service leaders - it’s truly an honor to recognize and
celebrate their achievements.”
The Pun Group LLP received satisfaction scores of 9 or 10 out of 10 from 94.1% of their clients, significantly higher than the industry’s average of 50%.

Our firm excelled in five key areas: Responsiveness, Quality, Value, Needs Understanding, and Proactive Approach.

About ClearlyRated
Rooted in satisfaction research for professional service firms, ClearlyRated utilizes a Net Promoter® Score survey program to help professional service firms measure their service experience, build an online reputation, and
differentiate on service quality.

The Pun Group is recognized as one of
the Top 500 Firms listed by INSIDE
Public Accounting.

“We started using Pun Group when the
pandemic first started two years ago so had
a little apprehension about doing
everything remotely with a new firm. But
the audit went very well and was
completed on time without problem.”
Kevin W.

State and Local Government Client

“The Firm has consistently exceeded our
expectations as client.”
Clint O.

State and Local Government Client

“An excellent partner and amazing service.”
Jim T.

Private Sector Client
“Excellent customer service and staff and
partners are expert in their fields.”
Lani H.

State and Local Government Client
60 City of Hercules

Transmittal Letter
May 9, 2024
City of Hercules
Mr. Edwin Gato, Finance Director
111 Civic Drive
Hercules, California 94547
Re: RFP for Professional Auditing Services
Dear Mr. Gato:

On behalf of The Pun Group LLP, we are pleased to present our proposal to continue to provide Professional Auditing Services to the City of Hercules (the “City”) for three fiscal years ending June 30, 2025, June 30, 2026, and June 30, 2027, with the option of auditing its financial statements for each of the two subsequent fiscal years.

We sincerely appreciate the opportunity to have served as your auditor in the past, and we look forward to continuing to serve you well in the future.

Our Firm has developed an understanding of the City’s operations which has aided us in delivering quality audit services. With the knowledge we gathered since we started providing services to the City, we have been able to expand our audit efforts and offer observations that have assisted the City’s staff. We have also demonstrated our ability to respond to the City’s requests and our ability to deliver quality services. It’s our further understanding that the City has been satisfied with our efforts.

This letter is an acknowledgment of the Firm’s understanding of the work to be performed. We are offering our commitment to deliver all of the required work, complete the audit, and issue the necessary auditor’s reports within the periods outlined by the City. No subcontractors will be utilized for this engagement.

The Pun Group continues to be the right choice for the City of Hercules because:

We Understand the Demographics and Your Needs. The Pun Group is reputable for its governmental practice. We are the principal auditors for cities in California such as Bell, Coachella, Corona, Fresno, Gardena, Gilroy, Lakewood, Montebello, National City, Palm Springs, Salinas, San Mateo, Santa Clarita, Stockton, Tracy, and several others. Accordingly, the proposed engagement team has a deep understanding of the current issues that municipalities are facing, such as varying demographics, economic environments, and the constantly changing landscape of laws and regulations.

Recognized Leader in the Governmental Industry. We are a small national Firm with licenses in the States of California, Arizona, and Nevada and a proven leader in professional services to the government sector. All key engagement team professionals are licensed to practice as Certified Public Accountants and meet the Continuing Professional Education requirements under US GAO’s Government Auditing Standards to perform the proposed audits. The partners and all employees proposed to perform the requested services do not have a record of substandard audit work nor have any outstanding claim of substandard practice or unsatisfactory performance pending with the State Board of Accountancy or other professional organizations.

In addition, we are members of the national AICPA Audit Quality Center.

We strongly believe that part of our success is credited to our professionals’ participation in various industry-leading organizations. Such affiliations are critical to addressing emerging accounting and auditing issues within the industry environment. 61 City of Hercules
2 | PUNGROUP.CPA
You’ll Work with a Team that Embraces Innovation and Continuous Improvement. Our Firm is committed to continuous improvement as it relates to service delivery. We embrace innovation and identify areas of technological enhancements in our audit and project management approaches. For example:

Secure Data File Transfer System. In order to improve audit efficiency, workflow management software plays an essential role between your organization and our engagement team. We employ a secure data file transfer system called Suralink.

Suralink’s dynamic request list is integrated with our secure file hosting system for seamless document-request coordination, including the upload of large-size files. It means all our requests are in one place, updated in real-time, and accessible by everyone working on the engagement. Not only makes the operation more cost-efficient, but it also enables you and your team to spend your time getting the job done, not reconciling a messy list of outstanding items. In addition, Suralink’s dashboard allows you to visualize the process of document-request fulfillment.

AI Auditor. The Pun Group leverages the technology and research tools required to provide excellent services to its clients. With the usage of Artificial Intelligence ( AI) technology, the Firm is capable of issuing all reports requested faster than other audit firms without exposing the City to unnecessary risks.

Remote Auditing Capability. Remote working arrangements have suddenly become the “new normal” in these trying times. Our Firm has deployed top-notch technology and fully transitioned to “remote auditing,” offering our clients the quality services they deserve while being fully “remote” or operating in a “hybrid” schedule. “On-site” audits are still the Firm’s preferred method, and we’ll continue to offer and promote those as well.

Knowledge is Shared with You. As part of our pledge to keep you updated on new technical accounting and financial issues, we implemented our 2023 Virtual Government Accounting Conference, which qualifies for up to 15 hours of CPE – nearly double what other firms offer.

These online sessions are free of charge and part of the service package provided to you. More details and dates can be found on the “Client Training Webinars” topic under this proposal.

The Pun Group is proud of its inclusive values and is an avid promoter of equality and diversity. In addition, the Firm is an equal opportunity employer and complies with all federal and state hiring requirements.

We’re proud of supporting affirmative-action philosophies and work hard to provide opportunities for self- enhancement to members of disadvantaged groups.

This proposal is a firm and irrevocable offer valid for 120 days following the closing date for the receipt of all proposals.

Finally, we would like to emphasize one additional point: We want to keep your trust and your business! We are confident that the energetic and experienced team we have assembled is the right one for the City.

Our commitment to serving the City of Hercules cannot be adequately conveyed in a letter, and I look forward to continuing the discussion with you. I’m assigned as your primary contact for contract negotiations and stand steadfast to serve as your engagement/lead partner. I’m also authorized to legally bind the Firm. Should you have any questions or wish to discuss this proposal, please do not hesitate to contact me at (949) 777-8809 or by email at [email protected].

Sincerely,
Sophia Kuo, CPA, M.B.A. | Partner | The Pun Group LLP
2121 North California Boulevard, Suite 290, Walnut Creek, CA 94596 62 City of Hercules
3 | PUNGROUP.CPA
Independence
Independence
The Pun Group LLP requires all employees to adhere to strict independence standards concerning the Firm’s clients.

These independence standards exceed, in many instances, the rules promulgated by the American Institute of Certified Public Accountants (AICPA).

The Pun Group LLP certifies that it is independent of the City of Hercules and its component units. The Firm meets independence requirements defined by the United States Government Accountability Office’s (US GAO’s) Government Auditing Standards and the American Institute of Certified Public Accountants (AICPA). Based on that, we have not identified an instance that constitutes a conflict of interest relative to performing the services requested by the City.

The Firm had no relationship with the City of Hercules or its component units during the past five (5) years.

The Firm will give the City of Hercules written notice of any professional relationships entered into during the period of the engagement.

Insurance

If selected, the Firm will obtain and maintain the minimum insurance requirements during the entire execution of the agreement with the City of Hercules. Within ten days from the implementation of the contract, we will furnish the City of Hercules with satisfactory evidence of the insurance requirements and proof that each carrier is required to give at least 30 days prior written notice of the cancellation of any policy during the entire period of the agreement.

The City of Hercules will be named as an additional named insured under the Firm’s policies.

A copy of our current certificate of insurance is presented in the Appendices section of this proposal.

License to Practice in California
License to Practice in California
The Firm and all key professional staff are licensed by the State of California to practice as Certified Public Accountants and meet the Continuing Professional Education requirements under US GAO’s Government Auditing Standards to perform the proposed audits.

Firm Registration:

California State Board of Accountancy Number – PAR 7601 Federal Identification Number – 46-4016990

63 City of Hercules
4 | PUNGROUP.CPA
Firm Qualifications and Experience
Established in 2012, The Pun Group, LLP stands as a limited liability partnership comprising a team of sixty dedicated professionals who specialize in providing auditing, accounting, and advisory services. Our firm, which includes Certified Public Accountants and Business Advisors, has garnered recognition as one of the foremost accounting entities in Orange County, as acknowledged by the Orange County Business Journal.

Additionally, we proudly secure a place among the CalCPA Top 150 firms.

Our distinction within the industry lies in the fusion of hands-on experience and pragmatic knowledge demonstrated by our audit professionals. This combination sets our firm apart. We possess a profound grasp of prevailing regulations and issues bolstered by our technical acumen. Furthermore, our commitment to diligence, integrity, and collaborative teamwork is evident in every engagement we undertake, thus contributing to our clients' success.

The Partners’ Group is a distinguished assembly comprising notable professionals such as Kenneth Pun, Frances Kuo, Coley Delaney, Andrew Roth, John Georger Jr., Jim Fritzsche, and Sophia Kuo. We specialize in providing auditing, accounting, and advisory services to numerous governmental entities across the United States. With a collective experience of over two centuries, we have established ourselves as a trusted business ally and have gained recognition as industry leaders in a rapidly expanding market. Our dedication to the field is evident through our work with nearly 100 government and not-for-profit audit clients, demonstrating our unwavering passion and unparalleled municipal experience.

Moreover, our practices adhere to professional standards embraced nationwide within the United States of America, including the rigorous criteria outlined in the Government Auditing Standards issued by the Comptroller General of the United States.

The Firm’s headquarters are located in Orange County,
California, with five branches in San Diego, Walnut Creek, Sacramento (California), Las Vegas (Nevada), and Phoenix (Arizona).

Our Walnut Creek office, located at 2121 North California Boulevard, Suite 290, Walnut Creek, CA 94596, will perform the requested services for the City. However, we may assign additional staff from our other offices to the engagement at no extra cost to the City. No subcontractors will be used in this engagement.

Global Capabilities
The Pun Group LLP is an independent member of Allinial Global, an association of over 100 independent accounting and
consulting firms. Based in North America, Allinial Global offers international support by connecting its member firms to providers and global networks of accounting firms worldwide.

OUR

AFFILIATIONS

OUR FIRM

AT A GLANCE
60 full-time auditing,
accounting, tax and
advisory professionals
One of the fastest growing
firms serving California,
Nevada and Arizona
6 offices across
3 states
Client retention rate:
90 – 95%
64 City of Hercules
5 | PUNGROUP.CPA
Full-Time Government Auditors
As full-time government auditors, we understand that governmental entities do not operate independently but in an increasingly complex web of local, state, and federal relationships. We know how these relationships work, what they mean at the local level, and how every public organization’s focus on resource management is critical to success.

Also, while many accounting Firms can provide services, not all can build excellent working relationships with their clients. The Pun Group LLP prides itself on developing lasting, personal relationships with our clients. Our hands-on partner involvement and low personnel turnover are crucial tools to our success and are highly beneficial to the City.

Local Office’s Information Technology (IT) Audit Capabilities

The Pun Group LLP continues our efforts to invest in our IT system to enhance our security further and promote audit efficiency.

Top security for your data is the key to our success. When we have your data virtualized, our Firm takes all the preventive steps to avoid putting your information at risk. Our In-House IT administrator maintains our server to ensure our IT environment is continuously updated with the latest security fixes. Through VPN and Microsoft Remote Desktop, our In-House network administrator can lock down files and system access from a single point, limiting the ability of remote sites to take data from our server.

Access to systems from anywhere and anytime. With more mobility being the norm rather than the exception, our engagement team needs robust access to the engagement files when they are working in your office. Accounting and Auditing Software applications are installed in our “Private” server and can be securely accessed through VPN and Microsoft Remote Desktop. The Firm uses CCH ProSystem fx® Engagement for audit documentation, which allows real-time synchronization of the work papers and instant collaboration quality control review.

Secure Data File Transfer System. In order to improve audit efficiency, workflow management software plays an essential role between your organization and our engagement team. We employ a secure data file transfer system called Suralink.

Suralink’s dynamic request list is integrated with our secure file-hosting system for seamless document-request coordination. It means all our requests are in one place, updated in real-time, and accessible by everyone working on the engagement. As a client, you no longer have to manually maintain a spreadsheet amongst several people, only to repeat the process in a day or two. Not only makes the operation more cost-efficient, but it also enables you and your team to spend your time getting the job done, not reconciling a messy list of outstanding items. The Suralink dashboard, as shown below, allows you to visualize the process of document-request fulfillment.

BIG FIRM EXPERTISE.

SMALL FIRM VALUES.

Our professional backgrounds at major national
firms showed us how to solve complicated
business and accounting challenges, but the
sense of personal connection was missing.

We launched The Pun Group because we believe
every client deserves to work with experienced
business advisors and CPAs who have the time –
and take the time – to create an authentic
connection. Every client is our top priority!
A UNIQUE CULTURE.
“Personalization” is not just a buzzword – it’s part
of our firm’s culture. We take a personal approach
to everything we do. We collaborate with our
clients, so they’re always part of the process. We
listen to our staff to make sure they have the right
support and resources to do a great job. Getting to
know others and discovering how we can serve
them better is not just a sign of good business
practices; it’s a sign of good people.

INNOVATION EMBRACED.

New ideas keep you ahead of the game. From
leveraging the value of emerging technologies to
further refining trusted processes, we adopt proven
solutions to meet your needs.

WHERE YOU GO, WE GO.

WHERE YOU GROW, WE GROW.

Our success is defined by how you achieve yours.

Partner with accomplished accounting and
financial professionals who are laser-focused on
taking your business to the next level.
65 City of Hercules
6 | PUNGROUP.CPA
Our Services
Our partners and seasoned professionals are always available, guiding clients through their periods of rapid growth as well as difficult times. We are able to do that by offering a portfolio of accounting services that are as diverse as the jurisdictions and entities themselves. The Pun Group LLP has successfully provided professional auditing, accounting, financial reporting, and management advisory/consulting services to a broad spectrum of governmental entities.

ASSURANCE ADVISORY OTHER SERVICES
Financial statements audits
Compliance audits
Performance audits
Internal audits
Service organization
controls audits
Operational reviews/risk
advisory services
Forensic investigation
Financial condition
analysis
Organizational structure
review
Cash flow analysis
Debt restructuring
consultation
Litigation restructuring
consultation
Assistance with the
preparation and review of the
Annual Comprehensive
Financial Report
Government property lease
excise tax compliance review
Sub-recipient monitoring
Implementation of new GASB
pronouncements
Audit readiness services
Contract Finance
Director/Accountant services
Cannabis Compliance Services
Many cities have authorized commercial cannabis to operate within their local jurisdiction.

Compliance issues are common in California’s newly regulated cannabis industry, which is no surprise given the complexity of the state’s regulatory landscape.

The Pun Group LLP has developed a platform to guide government agencies and commercial enterprises through the new and challenging steps in this emerging market. We have partnered with Simplifya, which has developed a cloud-based government agency/licensee compliance solution. Simplifya, headquartered in Denver, Colorado, and at the forefront since legalization in Colorado, has been an industry leader in commercial cannabis compliance since 2016. This new software allows government agencies to monitor their licensees at every stage of the approval process, from initial licensing to renewal and continuing disclosure requirements. Your communities demand that these new cannabis businesses operate based on the ordinances that you have passed. We can help ensure businesses are working in compliance, and when they are not, your team receives an immediate notification.

The Pun Group LLP has proven itself as a leader in the assurance and advisory field in the government arena. With the addition of Simplifya to our service offering, we have strengthened our position as a leading firm to help with your compliance needs and in unconventional areas as they emerge.

Joint Venture or Consortium
This project will not be accomplished by a Joint Venture or consortium. No subcontractors will be hired and/or utilized to provide the requested services to the City. 66 City of Hercules
7 | PUNGROUP.CPA
Peer Review
Being a member of the American Institute of Certified Public Accountants (AICPA), The Pun Group LLP is required to obtain an independent peer review of our audit and accounting practice every three (3) years. The peer reviewer assessed the Firm’s quality-control policies, reviewed administrative records, interviewed professional personnel, and inspected the Firm’s working papers and reports from a representative sample of accounting and auditing engagements, including governmental audits. The reviewer concluded that the Firm fully complied with the AICPA’s stringent standards for quality control and issued a peer review rating of “Pass.” A copy of our most recent peer review is presented on the following page.

Federal or State Desk Review
No federal or state desk reviews or field reviews have been undertaken of any audits performed by the Firm or any of its partners, managers, or professionals during the past three (3) years.

Disciplinary Action
State regulatory bodies or professional organizations have taken no disciplinary action against the Firm or any of its partners, managers, or professionals during the past three (3) years.

The Firm has no conditions such as bankruptcy, pending litigations, planned office closures, mergers, or any organizational conflict of interest that may affect the ability of the Firm to perform the required duties requested by the City of Hercules.
67 City of Hercules
8 | PUNGROUP.CPA
Partner, Supervisory, and Staff Qualifications and Experience Who We Are
The engagement team was carefully selected to provide the City with all the services needed to successfully complete the audit. Your assigned Engagement and Technical Partners will be personally involved in the project, leading a team that has significant experience in governmental auditing . You can be confident that our broad experience and technical capabilities will allow us to provide technical support, interpret findings, and offer practical solutions to any issues that may arise.

About Your Engagement Team
The personnel assigned to this engagement are fully qualified to perform an effective audit of the City, and their extensive experience will be critical to the audit process. Our professionals are familiar with the complexities of governmental accounting, auditing, and financial reporting, including but not limited to all GASB pronouncements, the Single Audit Act, Uniform Guidance (formerly known as OMB Circular A-133), and fund operations. They have held positions as professional certified public accountants, as well as significant roles within and outside of government agencies. Such qualities will bring to an entity like the City of Hercules the thought leadership, quality, and level of experience it requires.

As full-time government auditors, we understand that governmental entities do not operate independently but in an increasingly complex web of local, state, and federal relationships. We know how these relationships work, what they mean at the local level, and how every public organization’s focus on resource management is critical to success.

Also, while many accounting Firms can provide services, not all can build excellent working relationships with their clients. The Pun Group LLP prides itself on developing lasting, personal relationships with our clients. Our hands-on partner involvement and low personnel turnover are crucial tools to our success and are highly beneficial to the City.

Because of the “familiarity threat” under the professional audit and independence standards that may exist in long- term relationships with audit firms, the Firm is committed and has sufficient resources to rotate engagement partners, managers, and or supervisors assigned to the City’s audit with personnel with similar or higher qualifications and experience in order to overcome this threat.

If the Firm changes key personnel, we will provide the City with a written notification. Engagement partners, managers, and specialists will only be changed with the express prior written permission from the City.

Audit personnel may be replaced only by those with similar or better qualifications and experience.

Sophia Kuo, CPA, M.B.A.

Engagement/Lead Partner
Sophia Kuo is an Assurance Services Partner in the Firm who holds an Advanced Certification in Single Audits through the AICPA. She possesses extensive auditing experience, including cities, counties, special districts, and not-for-profit entities. She will work closely with the engagement partners directing and supervising the audit team in its daily activities and tasks. She is a Certified Public Accountant and possesses a MAcc in Accounting and an M.B.A. in Business Administration.

Ms. Kuo will actively serve as the Engagement/Lead Partner, overseeing the Engagement Team, developing the audit plan, reviewing fieldwork for quality, approving final reports, and communicating with the Finance Department. She will also be responsible for the timely delivery of all services for the City.
68 City of Hercules
9 | PUNGROUP.CPA
Kenneth H. Pun, CPA, CGMA | Relationship Partner
Kenneth Pun is the Managing Partner and an Assurance Partner at the Firm. With over twenty-one years of public accounting experience in the state and local government sector, he specializes in audits, management, and consulting for governmental organizations. Mr.

Pun served as the Contract Deputy Finance Director for the City of San Marino in 2017. He has served as the Chair of the California Society of CPAs Governmental Auditing Accounting Committee. He is a Certified Public Accountant and a Chartered Global Management Accountant.

Mr. Pun, in his role as a relationship partner, assumes the critical responsibility of conducting a secondary review of significant high-risk areas and audit reports and resolving noteworthy accounting, auditing, and reporting matters. This pivotal role ensures a comprehensive and meticulous approach to our services.

John (“Jack”) F. Georger, CPA, CIA, CGMA | GASB Implementation Specialist Throughout his forty years of experience, Mr. Georger has spent many years in the “Big 4” and national firms. He worked diligently alongside numerous governmental municipalities, including cities, counties, and transportation agencies, as well as not-for-profit entities, providing clients with financial and compliance auditing as well as consultation services. Mr.

Georger annually instructs over 300 hours in accounting and auditing subjects and has authored training material in governmental accounting and auditing for the AICPA. Mr.

Georger is also the technical reviewer of the CCH Knowledge-Based Audits™ of State and Local Governments with Single Audits, GAAP Guide (FASB), and Governmental GAAP Guide (GASB), the gold standard for audit firms throughout the United States. He is a Certified Public Accountant, a Certified Internal Auditor, and a Chartered Global Management Accountant.

Mr. Georger is responsible for reviewing all reports issued by the Firm to ensure the utmost quality and compliance with professional standards and the final quality-control assessment within the engagement.

Ross Gotthoffer, CPA | Quality Control Reviewer
Over his two decades of experience, Mr. Gotthoffer has dedicated a significant portion of his career to working with local firms in Florida and California. He has collaborated extensively with various governmental bodies, including cities, special districts, charter schools, and not-for-profit organizations. In these roles, he has provided clients with comprehensive financial and compliance audits, as well as valuable consultation services. Additionally, Mr.

Gotthoffer serves as the technical reviewer for esteemed resources like the CCH Knowledge-Based Audits™ of State and Local Governments with Single Audits, GAAP Guide (FASB), and Governmental GAAP Guide (GASB). These resources are considered the industry standard for audit firms across the United States.

In his capacity as our firm's Quality Officer, Mr. Gotthoffer offers guidance to clients facing intricate accounting inquiries and lends support to the engagement team in addressing audit-related challenges. He holds the title of a Certified Public Accountant registered in the State of Florida and is actively pursuing registration in California.

Mr. Gotthoffer assumes the responsibility of meticulously reviewing all reports issued by our firm. His role ensures the highest level of quality and adherence to professional standards, culminating in the final assessment for quality control within each engagement.

Suzette Reyes, CPA | Engagement Manager
Suzette is an Assurance Services Manager within the Firm. She will secure the effective implementation of the services approach while assisting in the timely delivery of the requested services. She is a Certified Public Accountant.

Ms. Reyes will serve as the primary point of contact for your team and will provide updates on our team’s progress to the engagement leaders and you. 69 City of Hercules
10 | PUNGROUP.CPA
Seniors and Professional Staff
Every member of the assurance team possesses the qualifications necessary to conduct financial and compliance audits. This guarantees a consistent level of staff quality throughout the entire engagement period. In our commitment to both staff growth and the continuity of engagements, we actively promote senior and staff accountants to assume greater responsibilities in their ongoing engagements as part of their professional advancement.

Continuing Education and Professional Development
Because of our commitment to providing the highest quality of services to the City, we provide our professionals with technical training to ensure our people stay current on topics within the industry sectors and better equip themselves to serve our clients.

All professionals are required to obtain continuing education that exceeds the requirements of the American Institute of Certified Public Accountants (AICPA) and, where applicable, Government Auditing Standards . Our professionals participate in continuing education programs through the following means:

Governmental Accounting and Auditing Conference sponsored by AICPA.

Webinar sponsored by AICPA Government Audit Quality Center.

Annual Conference sponsored by California Society Municipal Finance Officers.

Governmental Accounting and Auditing Conference sponsored by CalCPA.

The Pun Group in-house training on government-specific topics, including but not limited to GASB updates, Government Auditing Standards Revision, Fraud in State and Local Governments, COSO Internal Control- Integrated Framework, Audit of State and Local Governments, Single Audit, and Mindbridge AI Auditors™.

In 2023, our government professionals received an average of 52 hours of continuing professional education, compared with the 40 hours of accounting industry requirement.

By expanding our knowledge through these seminars/conferences, we can provide the right solutions to our clients.

Staff Continuity
The Pun Group LLP is committed to maintaining staff continuity throughout audit engagements, and we can assure you that the partners assigned to this audit will be involved throughout the entire contract term.

While we cannot guarantee that our staff-level members will stay with the Firm, we encourage loyalty by paying competitive wages, offering opportunities for promotion, using state-of-the-art equipment, and providing excellent working conditions. Also, we offer benefits, including retirement plans, medical plans, profit-sharing programs, and continuing education.

Quality-Control System
Our Firm meticulously monitors the quality and contents of our reports. The Pun Group LLP is 100% committed to providing only the highest grade of work possible for our clients and for those who rely on our audits. The Firm strives to exceed professional industry standards because of the continuing respect for our clients and our emphasis on creating long-lasting relationships. The Pun Group LLP works exclusively with those who share the same moral integrity and values. Our quality-control system has been crafted with excellence in mind. It not only meets AICPA standards but also matches our own elevated standards, which include following various professional development activities.

Engagement Team Resumes
The City of Hercules deserves experienced professionals who work as a team. The Pun Group LLP will provide qualified professionals to perform the audit. No subcontractors and/or consultants will be utilized to perform the requested services. Resumes for key engagement team members are presented as follows:
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11 | PUNGROUP.CPA

EXPERIENCE
Sophia Kuo is a Director within The Pun Group, LLP’s Assurance division. In her ten years of accounting and auditing experience, Sophia has worked with governmental agencies, not-for- profit entities, and private for-profit entities. She possesses governmental expertise that ranges from GASB audit/reporting, Internal Controls/COSO Framework, Single Audit, Corporate Financial Reporting, Data Analysis, and Taxation.

Ms. Kuo has performed audits and other attestation services for several governmental agencies throughout California. Her portfolio includes cities, counties, redevelopment agencies, public financing authorities, housing authorities, transportation agencies, and special districts. Also, she has helped them publish their Annual Comprehensive Financial Reports in compliance with GASB Statement No. 34.

EDUCATION
Fu Jen Catholic University
B.A. Degree – International Trading and Finance, Emphasis in Finance

Idaho State University
Master of Accounting (MAcc)
Master of Business Administration (M.B.A.)

LEADERSHIP & AFFILIATIONS

Member, American Institute of Certified Public Accountants (AICPA) Member, California Society of Certified Public Accountants (CalCPA)

RELEVANT EXPERIENCE

City of Coachella City of Culver City
City of Desert Hot Springs City of Gardena
City of Laguna Niguel City of Lakewood
City of Monterey City of Monterey Park
City of Perris
City of Stockton
City of Visalia
City of Pomona
City of Hercules
City of Glendora

CONTINUING PROFESSIONAL EDUCATION

Various courses are offered by the Firm online through Thompson Reuters, AICPA, and CalCPA Education Foundation, including:

Governmental and Non-profit Annual Update
Government Auditing Standards
GASB Basic Financial Statements for State and Local Governments Single Audits: Uniform Guidance (formerly OMB Circular A-133) Financial Accounting Standards Board Annual Updates
Statement on Standards for Accounting and Review Services Updates

Has met/exceeded the current CPE educational requirements to perform audits of governmental agencies.

S o p h i a K u o
C P A , M . B . A .

E n g a g e m e n t /
P r o j e c t D i r e c t o r

EMAIL
[email protected]

WEBSITE
www.pungroup.cpa

E x p e r t i s e :

C I T I E S

C O U N T I E S

T R A N S P O R T A T I O N

A G E N C I E S

E N T E R P R I S E

O P E R A T I O N S

H I G H E R

E D U C A T I O N

N O T - F O R - P R O F I T

L i c e n s e d t o P r a c t i c e i n :

C a l i f o r n i a

71 City of Hercules
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EXPERIENCE
Kenneth H. Pun is the Managing Partner and an Assurance Partner at The Pun Group, LLP, which he founded in 2012 after serving in senior-level positions for well-established national and regional firms.

Under his leadership, The Pun Group has become one of the “ Top Accounting Firms” in Orange County, according to the Orange County Business Journal. The Pun Group is also on the list of CalCPA's Top 150 firms.

Prior to founding The Pun Group, Ken served clients in a variety of industries, including small to very large state and local governmental agencies, insurance companies, not-for-profits, healthcare, technology, and manufacturing and distribution clients. His career in public accounting was spent primarily with Regional firms and National firms.

Leveraging more than 21 years of public accounting experience, Ken has earned a reputation of being a trusted advisor to governmental and Healthcare organizations throughout California and neighboring states. Municipalities and public agencies engage him because of his premier level of client service, commitment, and innovative methods of increasing operational efficiencies and reducing costs.

Ken maintains his deep commitment to professional education through his work as an instructor for the California Education Foundation. He has authored training materials in governmental accounting and auditing, such as Financial Reporting for State and Local Governments, 2018 Government Auditing Standards, and Single Audit Fundamentals for California Education Foundation. He is also the technical reviewer of the CCH Knowledge-Based Audits™ of State and Local Governments with Single Audits. He advises clients on those topics at influential industry forums. Internally, Ken mentors audit teams by providing direction and technical guidance to ensure adherence to the firm’s quality controls.

EDUCATION
University of California, Riverside
B.S. Degree – Business Administration, Emphasis in Accounting

LEADERSHIP & AFFILIATIONS
Member, American Institute of Certified Public Accountants (AICPA) Member, California Society of Certified Public Accountants (CalCPA) Past Chair, CalCPA Governmental Accounting and Auditing Committee Member, CalCPA California Committee on Municipal Accounting Member, CalCPA Governmental Accounting and Auditing Conference Planning Committee Member Government Finance Officers Association (GFOA)
Member, California Society of Municipal Finance Officers (CSMFO) Member, CSMFO Professional Standards Committee
Speaker, CSMFO Conference (2014 and 2018)
Instructor, CalCPA Education Foundation
Technical Reviewer, CCH Knowledge-Based Audits™ of State and Local Governments with Single Audits

RELEVANT EXPERIENCE
City of National City City of San Bernardino
City of Palm Springs City of Desert Hot Springs
City of Lakewood City of Stockton
City of Pomona City of Redding
City of Clovis City of Shafter

CONTINUING PROFESSIONAL EDUCATION
Various courses are offered by the Firm online through Thompson Reuters, AICPA, and CalCPA Education Foundation, including:

Governmental and Nonprofit Annual Update
Government Auditing Standards
GASB Basic Financial Statements for State and Local Governments Single Audits: Uniform Guidance (formerly OMB Circular A-133) Financial Accounting Standards Board Annual Updates
Statement on Standards for Accounting and Review Services Updates Has met/exceeded the current CPE educational requirements to perform audits of governmental agencies.

K e n n e t h H . P u n

C P A , C G M A
R e l a t i o n s h i p
P a r t n e r
EMAIL
[email protected]

WEBSITE
www.pungroup.cpa
E x p e r t i s e :

C I T I E S

C O U N T I E S

T R A N S P O R T A T I O N

A G E N C I E S

E N T E R P R I S E

O P E R A T I O N S

H I G H E R

E D U C A T I O N

N O T - F O R - P R O F I T
L i c e n s e d t o P r a c t i c e i n :

C a l i f o r n i a
72 City of Hercules
13 | PUNGROUP.CPA

EXPERIENCE
Jack Georger is the Chief GASB Implementation Specialist within The Pun Group LLP’s Assurance division. By leveraging more than forty years of public accounting and auditing experience in the government, agribusiness, financial services, manufacturing, and nonprofit sectors, Mr. Georger brings in-depth knowledge and practical expertise to each engagement.

Jack coordinates, plans, and manages financial audit activities, consulting activities, federal and state compliance audit activities, performance audits, and numerous quality control and internal control reviews for a broad mix of governmental agencies and programs throughout the United States.

Mr. Georger leads our Peer Review department providing peer review services to other firms under the practice monitoring program of the AICPA.

Mr. Georger is a continuing professional education course instructor for the AICPA. Annually, he instructs over 300 hours in accounting and auditing subjects. Jack has authored training material in governmental accounting and auditing for the AICPA. He is the technical reviewer of the CCH Knowledge-Based Audits™ of State and Local Governments with Single Audits, GAAP Guide (FASB), and Governmental GAAP Guide (GASB).

Mr. Georger is licensed to practice as a certified public accountant in the states of California, New York, Virginia, Maryland, the District of Columbia, Missouri (inactive), Connecticut (inactive), and Wyoming (inactive). He is a Certified Internal Auditor (CIA).

EDUCATION

George Mason University Fairfax, Virginia
B.S. Degree – Accounting

LEADERSHIP & AFFILIATIONS

Member and Instructor, American Institute of Certified Public Accountants (AICPA) Member, Institute of Internal Auditors
Member, California Society of Certified Public Accountants (CalCPA) Member, New York Society of Certified Public Accountants (NYSSCPA) Chairman, NYSSCPA Government Accounting and Auditing Committee Member, NYSSCPA Auditing Standards Committee
Member, NYSSCPA Sustainability Committee
Member, NYSSCPA Not-for-Profit Committee
Nevada Society of Certified Public Accountants (NSCPA)
Member, Government Finance Officers Association (GFOA) – Reviewer Member, Institute of Internal Auditors

CONTINUING PROFESSIONAL EDUCATION

He has instructed over 300 hours of municipal accounting courses offered by the AICPA.

Has met/exceeded the current CPE educational requirements to perform audits of governmental agencies.

J o h n F . G e o r g e r , J r.

C P A , C I A , C G M A

G A S B
I m p l e m e n t a t i o n
S p e c i a l i s t

EMAIL
[email protected]

WEBSITE
www.pungroup.cpa
E x p e r t i s e :

C I T I E S

C O U N T I E S

T R A N S P O R T A T I O N

A G E N C I E S

E N T E R P R I S E

O P E R A T I O N S

H I G H E R

E D U C A T I O N

N O T - F O R - P R O F I T

L i c e n s e d t o P r a c t i c e i n :

C a l i f o r n i a
A r i z o n a
N e v a d a
73 City of Hercules
14 | PUNGROUP.CPA

EXPERIENCE
Ross Gotthoffer, a Director in The Pun Group LLP's Assurance division, boasts over two decades of public accounting and auditing experience across diverse sectors such as government, agribusiness, financial services, manufacturing, and nonprofits. His wealth of knowledge and practical expertise enhances every engagement.

As a seasoned Quality Control Reviewer at the CPA firm, Mr. Gotthoffer ensures the highest standards of accuracy and compliance. His meticulous approach encompasses the evaluation of financial statements, auditing processes, and regulatory adherence. With a proven track record, he actively contributes to enhancing overall quality control protocols, providing valuable insights, and fostering a culture of excellence within the organization.

Mr. Gotthoffer's responsibilities include conducting comprehensive quality reviews of all reports, ensuring that audits align with both firm and professional standards. He serves as a key resource for technical and operational issues, bringing a depth of expertise to the role.

Additionally, Mr. Gotthoffer holds the position of technical reviewer for significant publications like CCH Knowledge-Based Audits™ of State and Local Governments with Single Audits, GAAP Guide (FASB), and Governmental GAAP Guide (GASB). He is a licensed certified public accountant in the state of Florida.

EDUCATION
University of South Florida, Tampa, Florida
Master of Accountancy

LEADERSHIP & AFFILIATIONS
Member, American Institute of Certified Public Accountants (AICPA) Member, Florida Institute of Certified Public Accountants (AICPA) Member, Government Finance Officers Association (GFOA) – Reviewer

CONTINUING PROFESSIONAL EDUCATION
Has met/exceeded the current CPE educational requirements to perform audits of governmental agencies.

R o s s G o t t h o f f e r
C P A
Q u a l i t y C o n t r o l
R e v i e w e r
EMAIL
[email protected]

WEBSITE
www.pungroup.cpa
E x p e r t i s e :

C I T I E S

C O U N T I E S

T R A N S P O R T A T I O N

A G E N C I E S

E N T E R P R I S E

O P E R A T I O N S

H I G H E R

E D U C A T I O N

N O T - F O R - P R O F I T
L i c e n s e d t o P r a c t i c e i n :

F l o r i d a
74 City of Hercules
15 | PUNGROUP.CPA

EXPERIENCE
Suzette Reyes is an Assurance Services Manager within The Pun Group LLP, with nine years of accounting and auditing experience.

Ms. Reyes has successfully performed audits and other attestation services for several governmental and nonprofit agencies.

Suzette will perform a significant amount of fieldwork, supervise all staff accountants, participate in the planning phase of the engagement, including the development of the overall audit plan and programs, and be heavily involved in the review and preparation of all reports.

EDUCATION

University of the East - Philippines
B.S. Degree – Accounting

LEADERSHIP & AFFILIATIONS

Member, California Society of Certified Public Accountants (CalCPA) Member, Association of Certified Fraud Examiner (ACFE)

RELEVANT EXPERIENCE

City of Gardena City of Arvin
City of Palm Springs City of Dessert Hot Springs
City of Seal Beach City of Bell
City of Monterey
City of Montebello
Orange County Business Council
Los Angeles Law Library

CONTINUING PROFESSIONAL EDUCATION

Various courses offered by the Firm, online through Thompson Reuters, AICPA, CalCPA Education Foundation, including:

Governmental and Nonprofit Annual Update
Government Auditing Standards
GASB Basic Financial Statements for State and Local Governments Single Audits: Uniform Guidance (formerly OMB Circular A-133) Financial Accounting Standards Board Annual Updates
Statement on Standards for Accounting and Review Services Updates

Has met/exceeded the current CPE educational requirements to perform audits of governmental agencies.

S u z e t t e R e y e s
C P A

E n g a g e m e n t
M a n a g e r

EMAIL
[email protected]

WEBSITE
www.pungroup.cpa

E x p e r t i s e :

C I T I E S

T R A N S P O R T A T I O N

A G E N C I E S

E N T E R P R I S E

O P E R A T I O N S

N O T - F O R - P R O F I T

L i c e n s e d t o P r a c t i c e i n :

C a l i f o r n i a

75 City of Hercules
16 | PUNGROUP.CPA
Similar Engagements with Other Government Entities
References
The following are examples of some of the engagements with similar requirements as the City of Hercules’s proposal. Please feel free to contact these agencies to learn more about their experiences working with us.

Name of Public Agency San Diego Metropolitan Transit System Contact Info Ms. Erin Dunn, Controller
[email protected] | (619) 557-4536
Total Hours Approximately 1,850 hours
Contract Price $225,000/year
Date of Services 2015 – Present
Scope of Work/
Reports Prepared
Financial Audit and Compliance Services: Annual Comprehensive Financial Report Audit, GFOA Award, San Diego Transit Corporation Employee’s Retirement Plan, AUP/National Transit Database (NTD): MTS, San Diego Transit Corp., San Diego Trolley, Inc., AUP/Transportation Development Act (TDA): MTS, San Diego Transit Corp., San Diego Trolley, Inc., AUP/Indirect Costs, and Public Transportation Modernization Improvement Service Enhancement Account (PTMISEA).

Name of Public Agency City of Stockton
Contact Info Mr. Jay Kapoor, Deputy City Manager
[email protected] | (209) 937-5435
Total Hours 3,000 hours
Contract Price $272,000/year
Date of Services 2012 – Present
Scope of Work/
Reports Prepared
Financial Audit and Compliance Services: Annual Comprehensive Financial Report, GFOA Award, Single Audit, GANN Limit, Measure A, Measure W, Measure M, Entertainment Venues, Revenue and Expenditures related to Downtown Marina, Cannabis License Audits, Review of Major Revenues required by the Bankruptcy Agreement with Assured Guarantee.

Name of Public Agency City of Tracy
Contact Info Ms. Sara Cowell, Director of Finance
[email protected] | (209) 831-6862
Total Hours 960 hours
Contract Price $96,500/year
Date of Services 2021 – Present
Scope of Work/
Reports Prepared
Financial Audit and Compliance Services: Annual Comprehensive Financial Report, GFOA Award, Single Audit, GANN Limit, National Transit Database (NTD), State Controller’s Reports (City, PFA, Operating Partnership JPA, City’s Transit Operator’s General Services, and Specialized Services)
Name of Public Agency City of Desert Hot Springs
Contact Info Mr. Geoffrey Buchheim, Finance Director
[email protected] | (760) 329-6411
Total Hours 700 hours
Contract Price $75,000/year
Date of Services 2013 – Present
Scope of Work/
Reports Prepared
Financial Audit and Compliance Services: Annual Comprehensive Financial Report Audit, GFOA Award, Single Audit, GANN Limit, Desert Hot Springs Successor Agency, Desert Hot Springs Financing Authority, Desert Hot Springs Health and Wellness Foundation, New Market Tax Credit Audit (Desert Hot Springs Health and Wellness Foundation), Annual State Controller’s Reports, AUP/Transient Occupancy Tax, Utility User Tax, DHS Housing Audits.

Name of Public Agency City of National City
Contact Info Mr. Phillip Davis, Financial Analyst
[email protected] | (619) 336-4246
Total Hours 600 hours
Contract Price $70,000/year
Date of Services 2013 – Present
Scope of Work/
Reports Prepared
Financial Audit and Compliance Services: Annual Comprehensive Audit, GFOA Award, Single Audit, GANN Limit, HUD Single Audit/Morgan Towers, Financial and Compliance Reports – Kimball Towers, Annual State Controller’s Report. 76 City of Hercules
17 | PUNGROUP.CPA
List of Current Municipal Clients
The Pun Group LLP has performed numerous audits of organizations subject to financial and compliance audits.

These audits were performed under auditing standards generally accepted in the United States, Government Auditing Standards, Uniform Guidance (formerly known as OMB Circular A-133), and its Compliance Supplement (when applicable), Office of the State Controller’s Minimum Audit Requirements and Reporting Guidelines.

A representative list of our current clients is as follows:

Municipalities Dates Financial
Audit
Single
Audit
GFOA
Certificate
Total
Hours
City of Adelanto 2021 – Present Yes Yes Yes 700
City of Anderson 2023 – Present Yes Yes N/A 530
City of Arvin 2013 – Present Yes Yes N/A 400
City of Baldwin Park 2022 – Present Yes Yes Yes 700
City of Bell 2018 – Present Yes Yes Yes 520
City of Bradbury 2012 – Present Yes N/A N/A 150
City of Calexico 2007 – Present Yes Yes N/A 750
City of Clovis 2006 – Present Yes Yes Yes 500
City of Coachella 2017 – Present Yes Yes Yes 410
City of Commerce 2023 – Present Yes Yes Yes 570
City of Cottonwood, AZ 2007 – Present Yes Yes Yes 400
City of Corona 2021 – Present Yes Yes Yes 640
City of Cudahy 2023 – Present Yes Yes Yes 500
Town of Corte Madera 2022 – Present Yes Yes N/A 400
Town of Danville 1999 – Present Yes Yes Yes 400
City of Douglas, AZ 2020 – Present Yes Yes Yes 300
City of Desert Hot Springs 2013 – Present Yes N/A N/A 700 City of Encinitas 2024 – Present Yes Yes Yes 600
City of Fresno 2022 – Present Yes Yes Yes 1,450
City of Gardena 2007 – Present Yes Yes Yes 700
City of Gilroy 2020 – Present Yes Yes Yes 640
City of Hercules 2020 – Present Yes Yes Yes 450
City of Indio 2024– Present Yes Yes Yes 708
City of Lake Elsinore 2023 – Present Yes Yes Yes 460
City of Lakewood 2013 – Present Yes Yes Yes 380
City of Lynwood 2016 – Present Yes Yes Yes 585
City of Madera 2019 – Present Yes Yes Yes 470
City of Menlo Park 2023 – Present Yes Yes Yes 550
77 City of Hercules
18 | PUNGROUP.CPA
Municipalities Dates Financial
Audit
Single
Audit
GFOA
Certificate
Total
Hours
City of Montebello 2022 – Present Yes Yes Yes 600
County of Monterey 2023 – Present Part of the audit & consulting services pool TBD City of Monterey Park 2023 – Present Yes Yes Yes 612
City of Napa 2019 – Present Yes Yes Yes 750
City of National City 2013 – Present Yes Yes Yes 600
City of Palm Springs 2020 – Present Yes Yes Yes 1,000
City of Paramount 2023 – Present Yes Yes Yes 460
City of Patterson 2017 – Present Yes Yes Yes 450
City of Placerville 2008 – Present Yes Yes N/A 400
City of Pleasanton 2024 – Present Yes Yes Yes 700
City of Pinole 2023 – Present Yes Yes Yes 400
City of Redlands 2022 – Present Yes Yes Yes 650
City of Ridgecrest 2009 – Present Yes Yes Yes 300
City of Rohnert Park 2020 – Present Yes Yes Yes 700
City of Salinas 2022 – Present Yes Yes Yes 800
City of San Mateo 2021 – Present Yes Yes Yes 900
City of Santa Clarita 2022 – Present Yes Yes Yes 1,200
City of Santa Cruz 2023 – Present Yes Yes Yes 800
City of Seal Beach 2017 – Present Yes Yes Yes 410
City of Stockton 2012 – Present Yes Yes N/A 3,000
City of Tracy 2021 – Present Yes Yes Yes 960
Town of Tiburon 2022 – Present Yes Yes Yes 452
City of Vernon 2023 – Present Yes Yes Yes 1000
City of Ventura 2024 – Present Yes Yes Yes 960
City of Visalia 2021 – Present Yes Yes Yes 650
Imperial County Transportation
Commission 2020 – Present Yes Yes Yes 600
Nevada County Transportation
Commission 2021 – Present Compliance
Services N/A N/A 450
San Diego Metropolitan Transit System 2005 – Present Yes Yes Yes 1,850 Shasta Regional Transportation Agency 2015 – Present Yes N/A N/A 400 Carmel Area Wastewater District 2022 – Present Yes Yes N/A 150 CAWD/PBSCD Wastewater Reclamation
Project 2022 – Present Yes N/A N/A 150
Central Basin Water District 2018 – Present Yes Yes N/A 400 78 City of Hercules
19 | PUNGROUP.CPA
Municipalities Dates Financial
Audit
Single
Audit
GFOA
Certificate
Total
Hours
Helix Water District 2024 – Present Yes Yes Yes 320
Los Angeles County Law Library 2020 – Present Yes N/A N/A 180 Marina Coast Water District 2012 – Present Yes N/A Yes 240 Menlo Park Fire Protection District 2015 – Present Yes Yes Yes 240 NALEO Educational Fund and NALEO 2020 – Present Yes N/A N/A 300 Olivenhain Municipal Water District 2019 – Present Yes Yes Yes 200 Padre Dam Municipal Water District 2020 – Present Yes Yes Yes 250 Rancho Santa Fe Fire Protection District 2015 – Present Yes N/A N/A 120 San Bernardino County Preschool
Services Department 2020 – Present Yes Yes N/A 150
San Bernardino County Fire Protection
District 2016 – Present Yes N/A N/A 200
San Elijo Joint Powers Authority 2016 – Present Yes N/A N/A 146 Santa Fe Irrigation District 2019 – Present Yes N/A N/A 250 Sweetwater Authority 2022 – Present Yes Yes Yes 270
South Bay Cities Council of Governments 2020 – Present Yes N/A N/A 100 South Orange County Water Authority 2017 – Present Yes Yes Yes 240 South Bay Regional Public
Communications Authority 2015 – Present Yes N/A N/A 100 Southwestern Community College District 2009 – Present Yes Yes N/A 720 Valley Sanitary District 2015 – Present Yes N/A Yes 140 West Valley Mosquito and Vector Control
District 2016 – Present Yes N/A N/A 100
Zone 7 Water Agency 2020 – Present Yes Yes Yes 400
GFOA Award Program
The Pun Group LLP realizes the importance of maintaining the Certificate for Excellence in Financial Reporting from the GFOA. Our professionals are exceptionally well qualified to assist governments in obtaining and maintaining their certificates.

Our dedication and active engagement in shaping auditing and accounting standards are evident through our enthusiastic participation in the GFOA's financial statements certificate programs. Remarkably, all of our present clients who have submitted their Annual Comprehensive Financial Reports to the GFOA have been honored with these prestigious awards.

Also, our senior partner, Mr. John F. Georger, is a member of the Government Finance Officers Association and participates in the GFOA Special Review Committee.
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Firm’s Experience with Single Audit and Grants
The Pun Group LLP works with numerous organizations that receive extensive governmental funding and are subject to auditing under Uniform Grant Guidance. This Firm’s specialization helps our audit team understand the procedures’ nuances and execute the engagement accordingly. We also assist in preparing the data collection form and preparing the reporting package for submission to the federal audit clearinghouse.

The Firm is a member of the AICPA Governmental Audit Quality Center and has demonstrated its commitment to audit quality, including those performed under Government Auditing Standards and Uniform Guidance. Also, we are a recipient of the Single Audit Resource Center’s Award for Excellence . This award is based on the positive feedback result from our clients in an independent survey, demonstrating our Firm’s highest commitment to quality and client satisfaction.

We utilize standardized audit programs from the federal government’s Compliance Supplement to ensure that our procedures meet federal standards. Our audit programs are continually updated to reflect the revisions of OMB.

Our Uniform Guidance risk-based approach focuses on areas of higher risk of non-compliance. Such an approach truly reflects the federal government's intent by concentrating on the following four steps:

1. Planning & Internal control assessment: The engagement team will obtain an understanding of the City and its operating environment and its internal control over the Schedule of Expenditures of Federal Awards.

The engagement team will perform the major program determination and communicate with the City’s management before conducting major program testing.

2. Testing & compliance assessment: The engagement team will obtain an understanding of internal control over compliance on the direct and material compliance requirements for each major program. The engagement will perform testing on internal controls over compliance to ensure the controls are in place working effectively and properly and that the City is in compliance with the applicable regulations in administering major programs.

3. Reporting & Review: The engagement team will review and prepare the single audit reports and perform quality control procedures following the Quality Control Standards issued by the AICPA. Any comments will be issued to the management or the Charge with Governance, depending on the magnitude of the issues.

Upon obtaining the final approvals from management, the Single Audit report will be issued.

4. Issuance to Clearing House: The engagement team will assist the City in drafting the data collection form and completing the final submission, including uploading the audit package to the Federal Clearing House. 80 City of Hercules
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Our Firm has audited hundreds of millions of dollars in federal expenditures, making our engagement team uniquely experienced in single audits. We are familiar with grantors, such as:

Following are a few examples of the types of federal programs our engagement team has experience auditing:

Corporation for National and Community Services
Department of Agriculture
Department of Education
Department of Health and Human Services
Department of Housing and Urban Development
Department of Transportation
Environmental Protection Agency
Department of Commerce
Department of Labor
Department of Homeland Security
Department of Justice
Department of Treasury
Executive Office of the President
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Firm’s Experience with Finance and Community Development Institutions Our Firm has provided professional services to several Finance Authorities, as well as Community Development Agencies. Some examples are:

Finance Authorities:

City of Bell Public Finance Authority
City of Desert Hot Springs Financing Authority
City of Hercules Public Financing Authority
City of Lakewood Public Financing Authority
City of Madera Financing Authority
City of Palm Springs Public Financing Authority
City of Patterson Financing Authority
West Patterson Financing Authority
City of Perris Public Financing Authority
City of Pomona Public Financing Authority
Town of Danville Financing Authority
Community Development Agencies:

City of Lodi (Special Purpose Audits – Community Development Block Grant/Home Funds) Morgan Towers (Multi-Family Program), National City Community Development Commission National City Community Development Commission
Perris Community Economic Development Corporation
Firm’s Experience with Housing Authorities and Subsidized HUD Programs The assigned engagement team will count on their experience with numerous financial and compliance audits as well as agreed-upon procedures to deliver the requested services. Our team has extensive experience with the following subsidized HUD programs:

Housing Choice Voucher (HCV)
Family Self Sufficiency (FSS)
Shelter Plus Care (SPC)
Housing Opportunities for Persons with AIDS (HOPWA)
Veterans Affairs Supportive Housing (VASH)
Community Development Block Grant (CDBG) – City of Lynwood HOME Investment Partnership Grant (HOME) – City of Lynwood In addition, our Firm has provided professional services to several Housing Authorities. Some examples are:

Calexico Housing Authority
Culver City Housing Authority
Douglas Housing Authority, AZ
Encinitas Housing Authority
Glendora Housing Authority
Lakewood Successor Housing Authority
National City Community Development Commission
Napa Housing Authority
Morgan Towers (Multi-Family Program), National City Community Development Commission Monterey Park Housing Authority
Perris Housing Authority
Pomona Housing Authority
Port Hueneme Housing Authority
Poway Housing Authority
Housing Authority of the Redding
South Gate Housing Authority
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Firm’s Experience Performing Compliance A udits and Agreed-upon Procedures (Measures ) Our Firm has performed several audits with requirements similar to the ones requested by the City. Some examples follow:

Measure A
City of Coachella
City of Hemet
City of Perris
City of Stockton
Measure B
City of Hercules
City of Stockton
Measure BB
City of Seal Beach
Measure C
City of Hercules
Measure D
City of Palm Springs
Imperial County Local Transportation Authority
Measure G
City of Gardena
Measure J
City of Palm Springs
Measure L
City of Huntington Park
Measure M
City of Culver City
City of Stockton
Measure O
City of Hercules
Measure R
City of Culver City
City of Gardena
City of Lynwood
Measure T
City of Madera
Measure U
City of Port Hueneme
Measure W
City of Stockton
Measure X
City of Monterey
Measure Z
Southwestern Community College District
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Firm’s Experience with State Controller’s Reports
The Pun Group LLP has assisted numerous clients with the preparation of the required reports by the California State Controller’s Office. Some of these experiences are as follows:

Cities Financial Transactions Report:

City of Arvin
City of Bell
City of Coachella
City of Culver City
City of Desert Hot Springs
City of Hercules
City of Placentia
City of Laguna Niguel
City of Lakewood
City of Lynwood
City of Monterey
City of Morro Bay
City of Napa
City of National City
City of Palm Springs
City of Perris
City of Rohnert Park
City of South Gate
City of Stockton
Annual Street Report:

City of Desert Hot Springs
City of Laguna Niguel
City of Napa
City of Palm Springs
City of Perris
City of Stockton
Special Districts Financial Transactions Report:

Special District of West End Water Development Treatment and Conservation Joint Powers Authority Special District of West Valley Water District
Special District of Coachella Financing Authority
Special District of Coachella Sanitary District (Riverside) Special District of Coachella Water Authority
Special District of Desert Hot Springs Public Financing Authority Special District of Desert Hot Springs Successor Agency Special District of Perris Public Utility Authority
Special District of Perris Public Financing Authority
Special District of Perris Joint Powers Authority
Special District of Central Basin Municipal Water District Special District of Marina Coast Water District
Special District of Menlo Park Fire Protection District Special District of San Bernardino County Fire Protection District Transit Operators Financial Transactions Report:

City of Arvin
City of Culver City
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Our Professional’s Experience with Pensions and Other Post-Employment Benefits Members of our team have experience in providing professional services to the following employee retirement systems:

California Public Employees' Retirement System (CALPERS) Culver City Other Postemployment Benefit Plan
Nevada Public Employees Retirement Systems
Sacramento County Employees’ Retirement System
San Francisco Community College District
San Diego County Employees Retirement Association
San Diego City Employees’ Retirement System
San Diego Transit Corporation Employee’s Retirement Plan San Jose Employee Retirement System
University of California Pension Plans
In addition, our team draws years of expertise reviewing budget documents as well as various pension and other post-employment benefits (“OPEB”) plan documents, including but not limited to trust agreements, pension, and OPEB actuarial reports, GASB 68 and 75 reports, as well as GASB 75 reports prepared under Alternative Measurement Methods. A relevant list of plans includes:

California Public Employees' Retirement System GASB 68 reports Public Agency Retirement System (“PARS”) GASB 68 reports San Bernardino County Employees’ Retirement Association (“SBCERA”) GASB 68 reports PARS GASB 75 reports
Experience in Performing Program-Specific Audits
The assigned engagement team will count on their experience with numerous financial and compliance audits as well as agreed-upon procedures to deliver the requested services to the City. Our team is extremely experienced with the following:

National Transit Database (“NTD”)
Federal Transit Administration (“FTA”)
Local Transportation Fund (“LTF”)
State Transit Assistance Fund (“STAF”)
State of Good Repair (“SGR”)
Low Carbon Transit Operations Program Accounts (“LCTOP”) Public Transportation Modernization Improvement and Service Enhancement Account (PTMISEA) Proposition 1B
State of California Transportation Development Act (“TDA”), including the requirements of the Southern California Association of Governments’ Transportation Development Act Conformance Auditing Guide Special District, Transit District Reporting, and Transportation Reporting Requirements, as specified by the California State Controller
Sales Tax Measures
Debt Compliance/Bond Debt
We have conducted financial, and compliance audits for transportation clients, such as:

Big Bear City Airport District Culver City Bus Lines
GTrans (Gardena Municipal Bus Lines) Gold Coast Transit Imperial County Local Transportation Authority North County Transit District San Diego Metropolitan Transit System Shasta Regional Transportation Authority SunLine Transit Agency Ventura County Transportation Commission Imperial County Transportation Commission Nevada County Transportation Commission 85 City of Hercules
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Firm’s Expertise and Experience in Governmental Accounting Rules and Regulations, Including Implementation of new GASB Pronouncements
The evolving landscape of federal laws, statutes, ordinances, and compliance provisions has introduced unparalleled complexity into the realm of public accounting. Our GASB Implementation Specialist, Mr. Jack Georger, has been instrumental in guiding our clients through the implementation of new standards while navigating changes within existing ones. Additionally, our partners play key roles in committees that contribute to the formulation of new standards, and they actively engage with industry associations focused on state and local governments.

Through our active participation in industry associations and related activities, we ensure that we stay abreast of the latest developments in the field and their implications for your operations. Rest assured, we are committed to keeping both you and our colleagues within the Firm fully informed about these developments.

Also, our professionals are familiar with the complexities of governmental accounting, auditing, and financial reporting, including but not limited to all GASB pronouncements, the Single Audit Act, and Uniform Guidance (formerly known as OMB Circular A-133) and fund operations. They have held positions as professional certified public accountants and taken on significant roles within and outside government agencies. Such experience brings to our clients the thought leadership, quality, and level of expertise they require.

The Firm is well versed and experienced in assisting our clients with the implementation of the applicable GASB pronouncements every year, such as:

GASB 34
GASB 54
GASB 65
GASB 68
GASB 75
GASB 84
GASB 87
GASB 91
GASB 94
GASB 96
Throughout the engagement, several new GASB pronouncements will become effective. The Engagement Team will pay specific attention to upcoming statements that will become effective and work with the City to create a plan to address new standards before the implementation period. This step will allow the finance department staff the needed time to be prepared.

Special Attention: GASB Pronouncements Effective for Reporting Year 2024 GASB Statement No. 100, Accounting Changes and Error Corrections – an Amendment of GASB Statement No. 62 The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. Application of this statement is effective for the City’s fiscal year ending June 30, 2024.

GASB Statement No. 101, Compensated Absences
The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. Application of this statement is effective for the City’s fiscal year ending June 30, 2025.

GASB Statement No. 102, Certain Risk Disclosures
The objective of this Statement is to provide users of government financial statements with essential information about risks related to a gove rnment’s vulnerabilities due to certain concen trations or constraints. That objective is achieved by requiring governments to assess whether a concentration or constraint makes the primary government reporting unit or other reporting units that report a liability for revenue debt vulnerable to the risk of a substantial impact. The statement also requires a government to assess whether an event or events associated with a concentration or constraint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the date the financial statements are issued. Application of this statement is effective for the City’s fiscal year ending June 30, 2025. Earlier application is encouraged. 86 City of Hercules
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Firm's Experience with Tyler Technologies and Their Solutions Our professionals are extremely familiar with Tyler Technologies and their software solutions. Our team will deploy such experience to hit the ground running with no downtime. Some examples of our clients who utilize Tyler Technologies are:

Client Name Office Industry
Madera, City of Santa Ana Local Government
Encinitas, City of San Diego Local Government
Rohnert Park, City of Walnut Creek Local Government
San Elijo JPA San Diego Special District
Shafter, City of Santa Ana Local Government
Lodi, City of Walnut Creek Local Government
Lakewood, City of Orange County Local Government
Culver City, City of Orange County Local Government
Perris, City of Orange County Local Government
Lynwood, City of Orange County Local Government
Gardena, City of Orange County Local Government
Monterey, City of Orange County Local Government
South Gate, City of Orange County Local Government
South Bay Regional Communications Orange County Local Government 87 City of Hercules
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Specific Audit Approach
Scope of Work, Audit Approach, and Methodology
The City of Hercules is requesting the Firm to perform Professional Auditing Services and issue opinions on the City’s financial statements. The audits are to be completed in accordance with all applicable and generally accepted auditing standards, including, but not limited to, the following:

Generally accepted auditing standards as set forth by the American Institute of Certified Public Accountants (AICPA).

US General Accounting Office’s (GAO) Standard for Audit of Governmental Organizations, Programs, Activities, and Functions.

Local Governments and Governmental Accounting Standards Board (GASB) Pronouncements.

The standards applicable to financial audits contained in the most current version of the Generally Accepted Government Auditing Standards (Yellow Book), issued by the Comptroller General of the United States.

The provisions of the Single Audit Act as amended in 1996.

The provisions of the US Office of Management and Budget (OMB) Uniform Guidance (formerly known as Circular A-133), Audits of State and Local Governments and Non-profit Organizations, and the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.

The Firm will perform the following services:

Financial Statement Audits and issuance of an opinion statement on the Annual Comprehensive Financial Report of the City of Hercules and the financial statements of its component units. The audit will be conducted in accordance with Generally Accepted Government Auditing Standards. The report will be in full compliance with all current GASB pronouncements.

The following component units will be audited as part of the audit of the City’s financial statements:

Component Unit Financial Statements for The Hercules Redevelopment Agency; Component Unit Financial Statements for The Hercules Public Financing Authority; Basic Financial Statements for the Hercules Municipal Utility; and Financial Statements for the Measure Funds (transportation moneys).

In addition, the Firm will assist in meeting the requirements for the Government Finance Officers Association (GFOA) “Certificate of Achievement for Excellence in Financial Reporting .” Prepare a Single Audit Report which will include the following:
o Report on compliance and internal control over financial reporting based on an audit of financial statements performed in accordance with Government Auditing Standards. o Report on compliance with requirements applicable to each major program, internal control over compliance, and on the schedule of expenditures of federal awards in accordance with Uniform Guidance, “Audits of State and Local Governments,” and the Single Audit Act of 1984 (Public Law 98-502).
o Schedule of Expenditures of Federal Awards.
o Notes to Schedule of Expenditures of Federal Awards.
o Schedule of Findings and Questioned Costs.
o Any other required schedules or reports.
o Prepare the Data Collection Form for Reporting on Audits of States, Local Governments, and Non- Profit Organizations.

State Controllers Report (Cities Financial Transaction).

A report based on the auditor’s understanding of the internal control structure and assessment of control risk. In this report, the auditor will also communicate any reportable conditions found during the audit and indicate whether they are material weaknesses.

A separate report on the auditor’s analysis of the internal control structure used in the administration of federal financial assistance programs.

A report on the City’s compliance with laws and regulations related to “major” federal awards including an opinion on compliance with specific requirements applicable to “major” federal awards programs. The report on compliance will include all instances of non-compliance. 88 City of Hercules
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A report on the Redevelopment Agency’s compliance with the laws and regulations identified in the Guidelines for Compliance Audits of California Redevelopment Agencies as issued by the State Controller and a report on the Agency’s internal controls.

A Management Letter addressed to the City Council of the City of Hercules setting forth recommendations (as applicable) for improvements in the City’s accounting systems.

A letter to the City Manager and Finance Director communicating any reportable conditions found during the audit. A reportable condition is defined as a significant deficiency in the design or operation of the internal control structure, which could adversely affect the organization’s ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. “Non-reportable conditions” discovered by the auditor will be communicated in the “Management Letter.”
A report on the City’s compliance with Proposition 111, Article XIII.B of the California State Constitution and Government Code 7900 (et seq.) in its calculation of the “Gann Limit”.

Issue an Auditor’s Communication Letter with any reportable conditions found during the audit. A reportable condition will be defined as a material weakness or significant deficiency.

Provided By Client (PBC) Lists: They will be provided for both interim and final audits according to an agreed- upon timeline between the engagement team and the City in order to be reasonably prepared for a field audit. The engagement team will meet with the City’s management during the initial planning stage to discuss audit schedules and review the prior year's audit findings (if any). We will deliver a list of all documents to be provided by the City’s staff. Once such materials are agreed upon by the engagement team and City’s finance personnel, no other schedules will be requested unless new information comes to light in the course of test work.

Attendance at Meetings and Hearings: The engagement team will participate in as many meetings with staff as needed to perform the work scope tasks, present the audit plan prior to beginning fieldwork, and discuss the draft audit reports. The team will attend public meetings to present and discuss its findings and recommendations.

Once all issues of discussion are resolved, the completed Financial Reports, Single Audit report (if applicable), and other reports will be delivered to the City according to the agreed-upon schedule.

Proposed Audit Adjustments: All proposed adjusting journal entries by the Firm will be discussed and explained in a timely manner with the designated Finance Department personnel. Such proposed adjustments will be in a format that shows the lowest level of posting detail needed for data entry in the general ledger systems.

Supplemental Reports, Audits, or Agreed-Upon Procedures: Other services, such as agreed-upon procedures, may be deemed necessary. These services will be performed at agreed-upon rates and will be added to a written agreement before commencing audit work. The Firm and the City of Hercules will discuss and approve the scope and associated costs of these tasks.

Advice and Consultation: Will be provided throughout the year on matters relating to accounting and financial reporting. Such services do not include any task that entails significant research or a formal report.

GASB Implementation: The Firm will provide technical assistance and training in the implementation of applicable GASB pronouncements not yet in effect. We have a dedicated partner, Mr. Jack Georger, who will be responsible for providing advice and consultation for the implementation of these new standards. The Firm will advise the City on the applicability of accounting and reporting standards and other accounting issues and provide guidance on new note disclosures, GASB implementations, and other reporting requirements. We will also provide training, resources, and information on topics relevant to the City’s financial reporting and operations. ( Based on the scope, additional charges may apply.)
Report of all Irregularities and Illegal Acts: The Firm will make an immediate written report of all irregularities and illegal acts or indications of illegal actions, which we may become aware of to the City Manager and the Finance Director. The engagement team will also make all communications to the City required by the audit standards under which the engagement is performed.

Working Paper Retention and Access to Working Papers : The Firm will retain, at its own expense, all working papers and reports for a minimum of seven (7) years unless the City of Hercules notifies the Firm in writing of the need to extend the retention period. The Firm will make working papers available upon request by the City of Hercules or its designees.

Also, we will comply with reasonable requests from successor auditors and allow them to review working papers that relate to matters of continuing accounting significance. 89 City of Hercules
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Methodology and Segmentation of Engagement
The Firm’s audit approach consists of six phases: Engagement Acceptance and General Planning, Planning and Internal Control Evaluation, Fieldwork, Post Fieldwork, Report Preparation and Review, and Final Production.

1. Engagement Acceptance and General Planning: The engagement partner and manager will meet with City’s management to obtain an update on current City policies and procedures, help identify risk areas a nd new operations, and establish any specific requirements they may have. Our team will work on the identification of unique transactions, implementation of new GASB pronouncements, and develop the audit work plan for the engagement. Proposed timeline: May of each year.

2. Planning and Internal Control Evaluation: The engagement team, including the engagement partner, will assess accounting policies adopted by the City in order to obtain an understanding of its structure and its operating environment. Also, our team will review internal controls on all significant transaction classes, perform walkthroughs and/or tests of internal controls, perform preliminary analytical procedures, develop an initial risk assessment, evaluate Single Audit compliance, identify any audit issues, and prepare confirmation correspondence. The engagement team and City’s Management will establish expectations, including responsibilities and assignments for the year-end fieldwork, and will hold a progress status meeting at the end of the interim phase. Proposed timeline: June of each year.

3. Fieldwork: The engagement team, including the engagement partner, will conduct audit procedures on account balances in the general ledger, finish confirmation procedures, perform data analysis using our AI tools, search for unrecorded liabilities, perform substantial analytical review procedures, complete work on compliance with Federal Assistance, and conclude fieldwork. The engagement team and City’s Management will hold an exit conference at year-end. Periodic update meetings will be held to communicate audit progress to management. Proposed timeline: October of each year.

4. Post Fieldwork: During the phase, the engagement team, including the engagement partner, will review all documents and evaluate commitments and contingencies. The team will perform an assessment of the going concern and jointly plan for the next steps . Proposed timeline: immediately after fieldwork completion.

5. Report Preparation and Review: The Firm will review and prepare audit reports and perform quality control procedures following the Quality Control Standards issued by the AICPA. We will also examine reports for compliance with GFOA reporting guidelines at no additional cost. Any comments will be recorded in a letter to management. At the City’s request, the engagement partner and manager will present the audit to City’s Management and other governing bodies . Proposed timeline: by the end of the first week in November.

6. Final Production: The final phase of our approach entails obtaining the management representation letter and final financial statement report, which may include a final presentation to the City’s Management and other governing bodies (if applicable) . Proposed timeline: final reports will be delivered no later than November 30th of each year.

The Firm will complete the audit fieldwork and issue all reports within the established timeframe, assuming no internal circumstances within the City causes delays in the audit. 90 City of Hercules
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Level of Staff and Number of Hours to be Assigned to Each Segment of the Engagement

The Pun Group LLP understands that the City is not only looking to employ our auditing services but is also seeking to receive value within that professional relationship. We believe that our value derives from the in-depth knowledge, experience, and commitment that our auditing firm employs. We stress and emphasize “employ” because all of the knowledge and expertise listed on paper will not benefit you unless it is applied. That is why we have developed a plan that we feel will accomplish the objectives of the City and your particular needs. Our Firm will utilize the information that you have shared with us and our experience from our previous audits of this nature from various government entities and cities to develop a practical plan for all major areas.

Estimated Total Hours*:
*Does not include CPE hours related to Governmental Webinars and/or optional services.

Sample Size and the Extent to Which Statistical Sampling is to be Used in this Engagement In our audit approach, random and statistical sampling is used in conjunction with our skilled judgment and knowledge of each situation. When designing an audit sample, our auditors consider the purpose of the audit procedure and the characteristics of the population from which the sample will be drawn. We determine a sample size sufficient to reduce sampling risk to an acceptably low level and select items for such a task in a way that we can reasonably expect it to be representative of the relevant sample and likely to provide the auditor with a reasonable basis for conclusions about the population.

Enhancing Auditing Quality with Artificial Intelligence There are plenty of challenges with established audit practices. Outdated CAAT tools, sampling practices, and the explosive growth of big data are some of the examples, and they all present significant barriers to detecting anomalies, intentional or otherwise, in financial data. The Pun Group deploys a comprehensive, risk-based approach, complemented by using MindBridge™'s Artificial Intelligence Platform, to conduct our audit. Through this tool, we can seamlessly analyze thousands and thousands of financial and operating data and records, identifying and cataloging significant risks in mere seconds.

The AI Auditor platform works by our side, augmenting our capacity to detect errors or fraud in the collected data not only by analyzing the entire set but by cross-correlating dozens of testing criteria against pre-established data points and presenting us with a view of every user, vendor, and transaction, by risk. All are happening within moments of ingesting analyzed data, which is something standard audit procedures simply cannot accomplish.

We utilize these tools to allow our audit team to increase efficiency in the audit process, enhance the existing quality of our work, provide directed testing in areas subject to the highest risk, and quickly assimilate large amounts of data your staff would typically be asked to gather. The tools also help us to meet our professional requirements regarding fraud and internal control, allowing us to:

Run Benford’s analysis to check for fraud in transactions.

Increase the value of audit findings with complete, 100% data coverage.

Isolate risk and control issues before they impact your operations.

Improve productivity by automating procedures and eliminating manual tasks.

Conduct more direct, efficient, and effective audits to improve overall service quality.

Partner(s)
Director/
Manager
Supervisory
Staff Staff Clerical Total
Engagement Acceptance & General Planning 2 3 7 9 1 21
Planning & Internal Control Evaluation 2 5 11 13 1 32
Fieldwork 12 24 54 64 5 159
Post Fieldwork 8 16 36 43 3 106
Report Preparation & Review 12 24 54 64 5 159
Final Production 4 8 18 21 2 53
Total* 40 80 180 214 16 530
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Our engagement team easily imports data in a secure environment from the City’s financial software and extracts useful data for testing and analytical procedures particular to the following areas:

Successful Fraud Test Kickback or Conflict-of-Interest Schemes Questionable Invoices Dormant Account Schemes
Phantom Vendor Schemes Money Laundering Schemes
Type and Extent of Analytical Procedures to be Used in the Engagement Analytical procedures are one of many financial audit processes that help an auditor understand the client’s operation and changes in the environment and identify potential risk areas to plan other audit procedures. Such procedures include a comparison of financial information on prior periods, budgets, forecasts, and industry benchmarks. We use trend and ratio analysis to identify any uncertain or unusual events. To perform these analyses, our Firm surveys cities and counties and develops benchmarks on specific vital financial indicators, such as the cost of services to tax revenues ratios, average general fund balance, capital assets, debt-to-capital, and general fund unassigned fund balance to total general fund expenditures, etc. Our engagement members have extensive experience in successfully implanting analytical procedures to the City’s benefit.

Our analytical procedures process is performed during three stages of the audit: (a) at the start, (b) in the middle, and (c) at the end. These three stages are risk assessment procedures, substantive analytical procedures, and final analytical procedures:

Risk assessment procedures are used to assist the auditor in understanding the business better and in planning the nature, timing, and extent of audit procedures.

Substantive analytical procedures are used to obtain evidential matters about particular assertions related to the account balances or classes of transactions. During the interim phase, our engagement team will set up expectations for the year-to-date results and balances and compare them with budgeted and prior-year amounts. This process allows us to forecast year-end amounts, reducing the workload during the year-end phase and allowing us to focus on areas of concern.

Final analytical procedures are used as an overall review of the financial information in the last review stage of the audit. The Engagement Partner(s) and Manager(s) will perform a high-level analytical analysis of the financial information, comparing its data both quantitatively and qualitatively to ensure the amounts are fairly presented in all material respect in the financial statements.

Approach to be Taken to Gain and Document an Understanding of the Internal Control Structure Audit risk assessment is established by an internal control review, combined with the engagement team’s understanding of the City’s operations and accounting software. Using the Committee of Sponsoring Organizations (COSO) Framework, staff members will evaluate the City’s processes and identify any control deficiencies. These diagnostic review procedures allow the engagement team to assess the City’s systems and controls and to provide constructive feedback to management.

During our initial planning phase of the audit, our engagement team, including the engagement Partner and Manager, will obtain an understanding of the entity and its environment. It is an essential aspect of performing an audit under generally accepted auditing standards. That understanding establishes a frame of reference within which the auditor plans the procedures and exercises professional judgment about assessing risks of material misstatement of the financial statements and responding to those risks throughout the examination.

During the interim phase of the audit, our engagement team will perform a walkthrough of all significant accounting systems, including processes for financial reporting, revenue recognition and cash receipts, purchasing/contract management and cash disbursements, payroll and related liabilities, and others. Our auditors will obtain the written policies and procedures, inquiring accounting personnel, and document the process in either a flowchart or narrative summary format. After gaining an understanding of the accounting and internal control systems, our auditor will make a preliminary assessment of control risk, at the assertion level, for each material account balance or class of transactions.
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The form and extent of this documentation are influenced by the size and complexity of the entity and the nature of its accounting and internal control systems. Generally, the more complex the entity’s accounting and internal control systems and the more extensive the auditor’s procedures, the broader our documentation will need to be.

Approach to be Taken in Determining Laws and Regulations that Will be Subject to Audit Test Work The Firm stays continually up to date with audit requirements—including new regulations, compliance supplements, state guidelines, and related contracts—to ensure that we conduct audits under applicable laws and regulations.

We test transactions for compliance with the Single Audit Act, California Government Code, GANN Appropriations Limit, provisions of applicable grant guidelines, requirements of local measures, and others.

For example, the Single Audit Act requires that we determine which grants to include in our audit and select transactions from those grants for detailed testing. While most items will be tested as part of the Interim phase, we cannot determine which grants will be selected for the Single Audit until the year-end/fieldwork stage of the audit.

Our compliance audits of cash, investments, debt covenants, and other areas will be performed following the California Government Code, which has many provisions and regulations covering investments.

Approach to be Taken in Drawing Audit Samples for Purposes of Tests of Compliance To test compliance, we will follow the AICPA’s Audit Sampling Considerations of Uniform Guidance Compliance Audits. We will select an appropriate sample size based on our professional judgment and knowledge. Any deviations from control and compliance requirements will be documented.

Audit Firm’s Expectations of the Role and Participation of City’s Staff in the Audit Process The engagement team will meet with the City’s management during the initial planning stage to discuss audit schedules and review the prior year's audit findings (if any). We will deliver a list of all documents to be provided by the City’s staff. Once such materials are agreed upon by the engagement team and City’s finance personnel, no other schedules will be requested unless new information comes to light in the course of test work.

Our goal is to cause the least amount of interruptions to the City’s daily operations; therefore, to the extent possible, we will use information in the form available from the City’s records.

We believe client/engagement team communication is vital to perform results satisfactorily. With that sentiment in mind, we will hold regular meetings with the City’s management to determine the status of the audit as well as any items which will require special attention. Open and frequent communication is critical.

Objectives of Our Services

Our primary objective for the proposed audit is to examine the City’s financial statements and express our opinion on the fairness of the presentation, following generally accepted accounting principles. Other objectives that will benefit the City include the following:

To offer beneficial observations and recommendations about policies and procedures for accounting and operating controls
To identify opportunities to make City operations more efficient and reduce costs To perform the audit efficiently and effectively. Disruptions to office operations are kept to a minimum To provide continuing advisory services so the City can implement recommendations To meet these objectives at no additional cost to the City

The Engagement Team will perform the audit abiding by the Firm’s quality-control procedures, which include following standard audit programs, careful planning, using industry-standardized software for auditing and internal control documentation, and welcoming an objective review of audit work. In other words, our client-tailored approach emphasizes careful planning, open communication, and proper assignment of responsibilities.

The Firm will supply portable computers to the on-site staff members. 93 City of Hercules
34 | PUNGROUP.CPA
Identification of Anticipated Potential Audit Problems
While we do not expect any problems with the audit, we will carefully investigate and monitor the following relevant accounting issues:

Investments:

Compliance with GASB 31 and GASB 34
Authorization and approval process for City investments Controls to assure the City’s compliance with investment limitations and types of specific investments Monitoring by the City of its investments
Financial Reporting:

Compliance with current reporting and disclosure requirements issued by GASB Compliance with the various GASBs in effect
Perform valuations of OPEB benefits to determine the liability for all benefits promised to active, retired, and inactive plan members as of each valuation date
Compliance with Governmental Accounting Standards Board (GASB) Statements 74 and 75 Compliance with infrastructure obligations and regulatory provisions Internal Control Structure:

City’s internal control functions and compliance with proper internal control philosophies Computer-system processes and controls and adequacy of the control environment 94 City of Hercules
35 | PUNGROUP.CPA
Cost Proposal
Certification
We are committed to the performance of a high-quality audit at the most reasonable fee level possible, both initially and throughout the engagement. Also, our partners will provide advice and consultation as needed at no additional cost to the City of Hercules.

Name of Firm: The Pun Group LLP – Certified Public Accountants and Business Advisors Contact Name: Sophia Kuo, CPA, M.B.A.

Contact Email Address: [email protected]
Authorization to Represent the Firm
I, the undersigned, certify I am duly authorized to represent The Pun Group LLP and am empowered to submit this bid. In addition, I certify I am authorized to contract with the City of Hercules on behalf of the Firm.

May 9, 2024
_________________________________________ ____________________________ Sophia Kuo, CPA, M.B.A.| Partner Date
The Pun Group LLP
Total All-Inclusive Maximum Price
Our proposed fees for Professional Auditing Services for the three fiscal years ending June 30, 2025, June 30, 2026, and June 30, 2027, with the option of auditing its financial statements for each of the two subsequent fiscal years, are as follows:
(1) Single Audit fees based on one (1) major program. The fee for auditing additional major programs will be $5,000 each. The number of programs determined to be “major” will be based on OMB Uniform Guidance.

The Engagement Team will discuss this with the City of Hercules’s Management before starting Single Audit work.

Service: FY2024/25 FY2025/26 FY2026/27
FY2027/28
(Optional)
FY2028/29
(Optional)
City's Financial Audit 40,000$ 42,000$ 44,100$ 46,305$ 48,620$ ACFR Preparation Included Included Included Included Included Management Letter Included Included Included Included Included GASB 87 and 96 3,500$ 3,675$ 3,859$ 4,052$ 4,254$ Audit of Hercules' Wastewater Fund 4,000$ 4,200$ 4,410$ 4,631$ 4,862$ Agreed Upon Procedures (AUP) Measure B -
Transactions and Use Tax Revenues 2,000$ 2,100$ 2,205$ 2,315$ 2,431$ Agreed Upon Procedures (AUP) Measure
-
Utility User's Tax Revenues 2,000$ 2,100$ 2,205$ 2,315$ 2,431$ Agreed Upon Procedures (AUP) GANN Calculation 500$ 525$ 551$ 579$ 608$ State Controller's Report (SCO) 4,000$ 4,200$ 4,410$ 4,631$ 4,862$ Single Audit - 1 Major Program 5,000$ 5,250$ 5,513$ 5,788$ 6,078$ Total for Fiscal Year (not-to-exceed) 61,000$ 64,050$ 67,253$ 70,615$ 74,146$ 95 City of Hercules
36 | PUNGROUP.CPA
Out of Pocket Expenses are Included in the Total All-Inclusive Maximum Price and Reimbursement Rates The Firm’s policy is to maintain flexible billing rates to meet the needs of clients and help them control costs. In the interest of continuing our long-term relationship, we will absorb expenses such as travel and printing costs.

Additionally, our Partners will be available to provide advice and consultation as necessary to the City of Hercules.

The Firm will also absorb these costs.

Rates for Additional Professional Services
Below are the Firm’s hourly billing rates, delineated by staffing levels:

Any supplemental reports, audits, or agreed-upon procedures not covered by this proposal may be added to a written agreement prior to commencing audit work. The Firm and the City will discuss and approve the scope and associated costs of these tasks. Any additional work will be performed at the above-quoted hourly rates.

Manner of Payment
Engagement Team members are required to maintain timesheets detailing the date, number of hours, and work performed for every audit task. The Firm will collect these timesheets and bill the City of Hercules at the rates outlined in the Total All-Inclusive Maximum Price section in four stages: (1) at the conclusion of the planning phase, (2) at the conclusion of the interim phase, (3) at the conclusion of the Year-End phase, (4) and after presentation and acceptance of the final audit reports. Interim billings will cover a period not less than a calendar month. The billing amounts generally break down as follows:

Partner(s) 300$
Director(s) 250$
Senior Manager(s) 225$
Manager(s) 200$
Supervisor(s) 175$
Senior Accountant(s) 150$
Staff Accountant(s) 125$
Clerical 100$
Hourly Billing Rates
Work Performed % of Proposal Amount
Planning 10%
Interim 40%
Fieldwork 40%
Presentation and Acceptance of Reports 10%
96 City of Hercules
37 | PUNGROUP.CPA
Let’s Get to Work!
Benefits of Choosing The Pun Group LLP

The Pun Group LLP is recognized for its professionalism, integrity and for providing clients with practical solutions unique to their circumstances and issues. Our Firm prides itself on being able to provide personalized client services, and with that sentiment in mind, we have carefully chosen our engagement teams. The Pun Group’s primary objective is to offer the City of Hercules solutions and directions led by highly experienced and capable partners who can successfully implement the work and produce the results you expect. This philosophy and mindset allow us to provide a superior level of service and a quality audit.

We trust that this proposal has given you the information needed about the Firm, the engagement team members, the overall audit approach, cost-saving measures, and audit fees. We are committed to exceeding your expectations, and we look forward to bringing our experience and expertise to the City of Hercules while providing you with the excellent level of service that you expect and deserve.

Thank You

Thank you for allowing us to submit our qualifications to continue to provide you with Professional Auditing Services. Please direct inquiries to:

Sophia Kuo, CPA, M.B.A.

Partner
Email: [email protected]
Phone: (949) 777-8809 | Fax: (949) 777-8850

Sincerely,

The Pun Group LLP
Certified Public Accountants and Business Advisors

97 City of Hercules
i | PUNGROUP.CPA
Appendix A – Available Training
Strengthen Your Accounting Knowledge: TPG Client Training Webinars We pride ourselves in leading the governmental auditing profession nationwide and statewide. Members of our team have been assigned to the AICPA and State Government Accounting and Audit committees. Our membership with these two levels of government keeps us current, and such involvement helps our Firm with the constant changes in accounting and auditing standards, laws and regulations, and compliance provisions, which have created an unprecedented complexity in public accounting for state and local governments.

Every year, the Firm hosts a conference to update governmental clients on new technical accounting and financial issues. Since last year, by implementing “Webinars,” we’ve been expanding our horizons and offering our clients 15 hours of Continuing Professional Education (CPE). These sessions are free of charge and part of the service package provided to our clients.

CPE courses we offer:

98 City of Hercules
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Appendix B – Certificate of Insurance
99 100
DI

SCUSSION AND/OR ACTION

AGENDA ITEMS

1. 22-941

2. 22-940

3. 22-939
101
1 STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of September 10, 2024
TO: Mayor and Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Patrick Tang, City Attorney
Christie Crowl, Assistant City Attorney
SUBJECT: Approval of updated contract with Jarvis Fay LLP for legal services confirming firm name change and Christie Crowl as City Attorney RECOMMENDED ACTION:

Staff recommends that the City Council adopt Resolution (Attachment 1) approving an updated contract for legal services which confirms the firm’s name change and that Christie Crowl will serve in the role of City Attorney following Patrick Tang’s retirement.

DISCUSSION:

The City of Hercules has contracted for legal service s with the Jarvis Fay firm for approximately 10 years. At this time, City Attorney Patrick Tang desires to wind down his legal practice so that he can enjoy a well -deserved retirement full of travel and time with his family. Mr. Tang will continue workin g with Jarvis Fay and the City as the Assistant City Attorney at least through the end of 2024. Christie Crowl, who has served as the City’s Assistant City Attorney for nearly 7 years, will serve as the City Attorney. Upon Mr.

Tang’s full retirement, staff and the City Attorney’s Office will update the City Council and request further direction.

The City’s existing legal services contract with the City from 2015 includes a prior iteration of the firm’s name and identifies Mr. Tang as the City Attorney, so staff is requesting that the City Council approve an updated version of the contract. The updated contract does not change the existing rate structure with the City; all rates currently in effect remain the same.
22-941
102
2 FISCAL IMPACT:

The proposed contract approval will have no fiscal impact as no changes are proposed to the existing legal services rate structure.

ATTACHMENTS:

Attach 1 – Draft Resolution
Exhibit A – Legal Services Agreement with Jarvis Fay LLP

103
RESOLUTION NO. 24-__

A RESOLUTION OF THE CITY OF HERCULES APPROVING AN UPDATED

CONTRACT FOR LEGAL SERVICES WITH JARVIS FAY LL P CONFIRMING FIRM

NAME CHANGE AND CITY ATTORNEY ROLE FILLED BY CHRISTIE CROWL

WHEREAS, after providing more than a decade of exemplary service to the City, current City Attorney Patrick Tang, of Jarvis Fay LLP, will be winding down his legal practice beginning on September 1, 2024; and

WHEREAS, Christie Crowl, also of Jarvis Fay LLP, has been providing legal services to the City of Hercules as Assistant City Attorney for the past 7 years, has an abundance of relevant experience, and has been determined to have the skills necessary to provide the City Council and Staff with appropriate counsel; and

WHEREAS, the City Council, being satisfied with the performance of Christie Crowl, desires to continue to retain her services as City Attorney; and

WHEREAS, at the time the Legal Services Agreement between Jarvis Fay LLP and the City of Hercules was signed, the firm was known as “Jarvis, Fay, Doporto & Gibson, LLP,” and the City now desires to update this agreement to reflect subsequent firm ownership changes and the aforementioned change in the firm member serving as the City Attorney.

NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of Hercules that the City Manager is hereby authorized to execute a Legal Services Agreement on behalf of the City that updates the firm name, confirms Christie Crowl as City Attorney, and addresses other minor changes as may be necessary.

PASSED AND ADOPTED by the City Council of the City of Hercules at a regular meeting duly held on the 10th day of September, 2024, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

_____________________________________
Dan Romero, Mayor

ATTEST:

________________________________
Eibleis Melendez, City Clerk
104

Via Email
[email protected]

September 3, 2024

Mayor Dan Romero
City of Hercules
111 Civic Drive
Hercules, CA 94547

Re: Legal Services Agreement

Dear Mayor Romero:

Thank you for selecting Jarvis Fay LLP to continue to provide legal services to the City of Hercules (“City”). This letter sets forth our agreement concerning the legal services we will provide and our fee arrangements for our services. The effective date of this agreement shall be September 10, 2024.

1. Scope of Engagement. We will provide City Attorney General Legal Services to the City, and also provide Special Counsel Services as may be requested from time to time. A writing confirming an agreement to provide legal services on other specified matters shall bring such services within the scope of the terms set forth in this letter.

City Attorney General Legal Services are defined to include routine municipal legal services customarily provided by a city attorney, including attendance at City Council and other public meetings, agenda and contract review, routine legal opinions, routine communications with and on behalf of the City, weekly staff meetings, and office hours on site at City Hall.

2. Fees and Personnel. Christie Crowl will serve as City Attorney for the City with assistance from other members of the firm as needed. For this work we will charge the following rates:

City Attorney General Legal Services $250

Special Counsel Services
Senior Partner/Senior Of Counsel $380
Partner/Of Counsel $340
Senior Associate $305
Associate Attorney $265
Paralegal $135
105
Mayor Dan Romero
September 3, 2024

Cost Recovery Matters
Senior Partner/Senior Of Counsel $440
Partner/Of Counsel $395
Senior Associate $350
Associate Attorney $310
Paralegal $155

All travel for City business will be billed at 50% of the applicable hourly rate. These rates represent the maximum we will charge for our work, but we may charge lesser rates or “no charge” some time, as a matter of billing judgment. We bill for our time in 6-minute increments, with no minimum billable time. Our stated rates will be in effect until the end of FY 2025 (June 30, 2025). All of our hourly rates are subject to reasonable annual adjustments. We will provide you with notice of any such adjustments.

3. Disbursements and Expenses. In addition to hourly fees, we may incur out-of-pocket expenses from outside vendors related to your representation, which we will pass on to the City.

We will advance payment for routine expenses for individual items that cost less than $1,000, but will refer items that cost more directly to the City for payment. We do not bill for in-house copy or fax costs or other overhead.

4. Billing and Payment Responsibilities. We will send monthly statements that are due within 30 days of receipt. If you have any questions about an invoice, please feel free to call me at (510) 318-3004 or to email me at [email protected].

5. Termination of Services. The City may terminate our services at any time by written notice. After receiving such notice, we will cease providing services. We will cooperate with you in the orderly transfer of all related files and records to the City’s new counsel.

We may terminate our services at any time with the City’s consent or for good cause.

Good cause exists if (a) any statement is not paid within 60 days of its due date; (b) the City fails to meet any other obligation under this agreement and continues in that failure for 15 days after we send written notice to the City; (c) the City has misrepresented or failed to disclose material facts to us, refused to cooperate with us, refused to follow our advice on a material matter, or otherwise made our representation unreasonably difficult; or (d) any other circumstance occurs or exists in which ethical rules of the legal profession mandate or permit termination, including situations where a conflict of interest arises. If we terminate our services, the City agrees to execute a substitution of attorneys promptly and otherwise cooperate in effecting that termination. Termination of our services, whether by the City or by us, will not relieve the obligation to pay for services rendered and costs incurred before our services formally ceased.

106
Mayor Dan Romero
September 3, 2024

6. Original Documents and Property. Upon the City’s request, after our representation has concluded or been terminated we will return to the City any original documents and other property the City provided to us in connection with our representation. Unless the City requests any such items, or has made written arrangements with us to retain such items, we reserve the right to destroy or otherwise dispose of these items, without further notice to the City at any time after ten years following the date of the final invoice sent to the City with respect to this matter.

7. Insurance. During the term of this engagement, this law firm shall maintain general liability and property damage insurance in the amount of $2,000,000; professional errors and omissions insurance, in an amount of $3,000,000 per occurrence and $3,000,000 aggregate, which insurance may not be canceled or reduced in required limits of liability unless at least ten days advance written notice be given to the City.

8. No Guarantee of Outcome. Any comments made by us about the potential outcome of this matter are expressions of opinion only and are not guarantees or promises about any outcome or results.

9. Entire Agreement; Full Understanding; Modifications in Writing. This letter contains our entire agreement about our representation. Any modifications or additions to this letter agreement must be made in writing.

To accept this letter of engagement, please sign it below and return a PDF copy of this page to our office via email. If you would also like a paper copy of this letter for your files we will be happy to mail that to you. We appreciate the opportunity to serve as lawyers for the City.

Very truly yours,

JARVIS FAY LLP

Christie Crowl

These terms are accepted and agreed to:

______________________________
Dan Romero
Mayor, City of Hercules

107
Mayor Dan Romero
September 3, 2024

______________________________
Dante Hall
City Manager, City of Hercules

108
DI

SCUSSION AND/OR ACTION

AGENDA ITEM

2. 22-940
109

REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of September 10, 2024
TO: Mayor and Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Christopher Roke, Parks and Recreation Director SUBJECT: Authorization for the City Manager to sign the Transition Services Department Student Work Agreement
RECOMMENDED ACTION:

Staff recommends that the City Council:

1. Adopt a resolution establishing a Student Work Agreement in the WCCUSD Transition Services Department; and

2. Authorize the City Manager to sign the Student Work Agreement for a period of September 2024 through July 2025
BACKGROUND:

The Transition Program offers the continuation of age -appropriate services for special education students (ages 18-22) as mandated by law. Designed to facilitate a successful transition to the adult world, the program introduces quality options through formal planning (involving educators, parents, students and community agencies), age - appropriate curriculum, and a diverse range of experiences to foster a smooth transition.

The Transition Program is supervised and operated by the WCCUSD Special Education Department. Services are provided at the Vista Hills Education Center, as well as community sites including the Contra Cost a Community College campus, City libraries and senior centers, WCCUSD Nutrition Center/ and other offices and other organizations within the community. Total enrollment averages between 95-140 students a year.

The philosophy of the program is to implemen t students’ IEP goals and objectives in a variety of age -appropriate environments. Through direct instruction, hands -on experience, and/or embedded components, the Basics 3 core curriculum framework 22-940
110
provides the foundation for meaningful learning designed to enable students to “transition” to the adult worlds of regular paid employment and independent community living as successfully as possible. Lessons include functional academics, daily living skills, social- emotional development and vocational training.

Some students are employed by the school district to work as “student workers” in various community-based job sites. All students in these positions earn the minimum wage as per the City of Richmond, which as of this writing is $17.20 per hour. These w ork-sites are considered to be an extension of classroom instruction where teachers and special education assistants, ie. job coaches, provide training and instruction to small groups of student workers. Hours spent by students assigned to work -sites may vary, but 4 hours of daily paid work 4 days a week is generally to be expected. Other eligible students may attend mainstream college classes, or be competitively employed.

Classrooms at the Vista Hills Education Center feature a teacher with two or more special education instructional assistants and a class enrollment of 10 -12 students. The unique focus of each class is a reflection of students' needs and interests, and is as varied as exploring the opportunities in culinary arts to developing and maintaining basic functional academics and daily living skills. Emphasis upon the importance of lifelong healthy habits such as diet and exercise is embedded throughout.

Additionally, designated instructional services (DIS) including speech therapist, physical therapist, occupational therapist, adaptive physical education, and support for the medically fragile are provided as specifically detailed in students’ Individual Education Programs (IEPs). Furthermore, in some situations, behavior plans will be implement ed for students needing this critical intervention as indicated in their particular IEP.

At age twenty -two, Transition Program students will exit from special education. In celebration of their accomplishments, the Transition Program hosts an annual ceremony for the graduates and their families in the Grand Courtyard of the Vista Hills Education Center.

ANALYSIS:

As Council contemplates reinstituting this collaboration with the school district, staff agrees with the length of the contract to run through July 2025. These student workers have previously worked at the Hercules Senior Center and have been a welcome addition. If approved t hese student workers would begin to work a Monday through Thursday shift, consisting of 4 hours per day, and perform multiple duties such as setting up tables and chairs, cleaning up from the lunch program, washing windows, raking leaves in the fall, etc. This would be the first time they have worked in Hercules since prior to the pandemic.

111
FISCAL IMPACT:

There are no costs to the city to implement the Transition Program . As previously mentioned, some students are employed by the school district to work as student workers in various community -based job sites and earn the minimum wage as per the City of Richmond of $17.20 per hour. These students are paid by the district.

ATTACHMENTS:

1. Resolution

2. Transition Services Student Work Agreement

112

HERCULES CITY COUNCIL
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERCULES

AUTHORIZING THE CITY MANAGER TO SIGN THE STUDENT WORK AGREEMENT WITH WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT FOR THE 2024 -25

SCHOOL YEAR

WHEREAS, Student wo rk program provide an opportunity to bring special education students to the Hercules Senior Center to assist with programs; and

WHEREAS, this agreement will re-establish the City and District commitment to partner by offering a work opportunity in a safe manner; and

WHEREAS, student workers will perform job tasks for 4 hours per day, 4 days per week during the Extended School Year,

WHEREAS, the District will provide a District paid, on -site trainer to provide supervision of the student workers,

WHEREAS, the District will pay student workers at City of Richmond, CA minimum wage,

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hercules as follows:

1. The City Council hereby authorizes the City Manager to sign the Student Work Agreem ent for a period of September 2024 through July 2025 with West Contra Costa Unified School District to provide a student work program and an opportunity to bring special education students to the Hercules Senior Center to assist with programs.

2. There is no cost to the City.

The foregoing Resolution was duly and regularly adopted at a regular meeting of the City Council of the City of Hercules held on the 10th day of September, 2024 by the following vote of the Council:

AYES:

NOES:

ABSTAIN:

ABSENT:

____________________________
Dan Romero, Mayor
113

ATTEST:

________________________________
Eibleis Melendez, City Clerk
114
115
116
117
118
DI

SCUSSION AND/OR ACTION

AGENDA ITEM

3. 22-939
119

STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of September 10, 2024
TO: Mayors and Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Eibleis Melendez, City Clerk
SUBJECT: Designate the position of Human Resources Manager as the City’s Primary Board Member and the position of City Clerk as the Alternate Board Member to the Municipal Pooling Authority (MPA) RECOMMENDED ACTION:

Staff recommends adopting a Resolution designating the position of Human Resources Manager as the City’s Primary Board Member to the Municipal Pooling Authority (MPA) and the position of City Clerk as the Alternate Board Member.

BACKGROUND:

The MPA was originally formed as a Joint Powers Authority in 1977 among cities in Contra Costa County as a means of “insuring” or sharing risks as a pool because the traditional private insurance market became less of an option for public agencies. The California Government Code allows public agencies to create separate joint power authorities for this purpose.

The MPA is governed by a Board of Directors composed of one representative from each member city. Each member city designates a primary Board Member from their agency, and an alternate Board Member, who may vote at any meeting at which the primary Board Member is absent.

The City of Hercules is a member of the MPA and the governing document s of the MPA require the City Council of each member city to appoint a primary Board Member and an alternate Board Member to the Board of Directors of the Authority. The governing documents of the MPA require that the City shall appoint the staff person s responsible for the City’s risk management function as the primary and alternate Board Members. 22-939
120

ANALYSIS:

The City of Hercules is a member of the Municipal Pooling Authority of Northern California, providing and administering lines of coverage for liability, workers’ compensation and property, offering a comprehensive wellness program and risk control program, for Hercules and other member cities in Contra Costa County.

Currently the City Clerk serves as the primary Board Member and the City Manager is the alternate Board Member. However, the Risk Management Function is split between the City Clerk’s office (overseeing general liability) and the Human Resources office (overseeing workers’ compensation). As such, City staff is recommending that the City Council assign the position of Human Resources Manager to serve as the City’s primary Board Member for the MPA and have the position of the City Clerk serve as the alternate Board Member.

FISCAL IMPACT:

There is no fiscal impact as a result of this recommendation

ATTACHMENTS:

1. Resolution Designating a Board Member and Alternate Board Member to the MPA 121

HERCULES CITY COUNCIL
RESOLUTION NO. 24-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERCULES

DESIGNATING A BOARD MEMBER AND ALTERNATE BOARD MEMBER TO THE

MUNICIPAL POOLING AUTHORITY OF NORTHERN CALIFORNIA

WHEREAS, the City of Hercules is a member of the Municipal Pooling Authority of Northern California; and

WHEREAS, the governing documents of the Municipal Pooling Authority require the City Council of each member City to appoint one Board Member and one Alternate Board Member to the Board of Directors of the Authority; and

WHEREAS, the governing documents of the Municipal Pooling Authority require that the City sh all appoint staff person s responsible for the City’s risk management function as the primary and alternate Board Members; and

WHEREAS, the City of Hercules last appointed the City’s Primary and Alternate Board Members to the Municipal Pooling Authority by Resolution No. 15 -048 adopted by the City Council on July 14, 2015; and

WHEREAS, after a review of positions involved in the Ci ty’s risk management function, it was determined that the position of Human Resources Manager should be identified as the Primary Board Member.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hercules that the position of Human Resources Manager is hereby designated as the City’s Primary Board Member to the Municipal Pooling Authority of Northern California.

BE IT FURTHER RESOLVED that the position of City Clerk is hereby designated as the City’s Alternate Board Member to the Municipal Pooling Authority of Northern California.

The foregoing Resolution was duly and regularly adopted at a regular meeting of the City Council of the City of Hercules held on the 10th day of September 2024, by the following vote of the Council:

AYES:

NOES:

ABSTAIN:

ABSENT:

____________________________
Dan Romero, Mayor

ATTEST:
122

________________________________
Eibleis Melendez, City Clerk
123