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JWC Agenda 02-05-2025
AGENDA JOINT WATER COMMISSION February 5, 2025 – 1:30 pm Remote Attendance: Members of the public may attend this meeting via Microsoft Teams by calling 1-872-256-4160 and entering access code 119 801 16#. Questions/Comments: Members of the public who have questions about the commission or any items on the agenda should contact the staff commission liaison – Matthew Rowedder, Utilities Supervisor, City of New Hope, mrowedder@newhopemn.gov, 763-592-6760 1.Call to Order—Roll Call 2.Approval of Minutes – January 6, 2025 3.Review Proposals for Audit Services 4.TAC Update 5.Adjournment Joint Water Commission, January 6, 2025 Page 1 of 2 JOINT WATER COMMISSION MINUTES Golden Valley - Crystal - New Hope Meeting of January 6, 2024 The Golden Valley - Crystal - New Hope Joint Water Commission (JWC) meeting was called to order at 1:00 pm. Roll Call Present Noah Schuchman, City Manager, Golden Valley Adam Bell, City Manager, Crystal Reece Bertholf, City Manager, New Hope Staff Present Tim Kieffer, Public Works Director, Golden Valley Dave Lemke, Operations Manager, New Hope Matt Rowedder, Utilities Maintenance Supervisor, New Hope Patrick Sele, Utilities Superintendent, Crystal Analeigh Moser, Accountant, Golden Valley Lyle Hodges, Finance Director, Golden Valley Bernie Weber, Public Works Director, New Hope Carrie Nelson, Engineering Assistant, City of Golden Valley Approval of Minutes – November 6, 2024 Moved by Bertholf and seconded by Bell to approve the minutes from the November 6, 2024 Joint Water Commission (JWC) Meeting. Upon a roll call vote the following voted in favor: Schuchman, Bell and Bertholf. The following voted against: None. Motion carried. Approve 48” Gate Valve Installation at the Golden Valley Pump House Moved by Bell and seconded by Schuchman to approve the 48-inch Gate Valve Installation at the Golden Valley Pumphouse. Upon a roll call vote the following voted in favor: Schuchman, Bell and Bertholf. The following voted against: None. Motion carried. JWC 2024 Auditing Services Moved by Bertholf and seconded by Bell to authorize the Golden Valley Finance Director to solicit quotes for audit services. Upon a roll call vote the following voted in favor: Schuchman, Bell and Bertholf. The following voted against: None. Motion carried. JWC Financial Services Moved by Bell and seconded by Bertholf to authorize the Golden Valley Finance Director to pursue alternate financial services for the JWC over the next couple of months and bring back to the JWC at the appropriate time. Upon a roll call vote the following voted in favor: Schuchman, Bell and Bertholf. The following voted against: None. Motion carried. Joint Water Commission, January 6, 2025 Page 2 of 2 Adjournment Chair Schuchman adjourned the meeting at 1:15 pm. ATTEST: Carrie Nelson, Recording Secretary Chair Noah Schuchman C:\Users\cnelson\OneDrive - goldenvalleymn\Desktop\Misc\3 - 2-5-2025 Memo for JWC Audit and Accounting Services.docx Joint Water Commission February 5, 2025 Agenda Item #3 3. Review Proposals for Audit Services Prepared by Lyle Hodges, Golden Valley Finance Director Summary At the January 6th meeting of the Joint Water Commission, the Golden Valley Finance Director asked for authority to seek quotes for both audit and accounting services. Since that time, quotes for both services have been received. Those quotes and service options will be reviewed at this meeting. Attachments None Recommended Action Review the quotes received from the accounting firms for audit services and select a vendor to complete the 2024 audit for the JWC. 1 ©2025 CliftonLarsonAllen LLP January 31, 2025 Proposal to provide professional auditing services to: Golden Valley – Crystal – New Hope Joint Water Commission Prepared by: Christopher G. Knopik, CPA, CFE, Principal Christopher.knopik@claconnect.com Direct (612)397‐3266 | Mobile (320)266‐6424 CLAconnect.com CPAS | CONSULTANTS | WEALTH ADVISORS CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer. Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC‐registered investment advisor. 2 ©2025 CliftonLarsonAllen LLP iv. Detailed Proposal ....................................................................................................................3 1. Independence ...........................................................................................................................3 Professional relationships involving the JWC ................................................................................ 3 Written notice of professional relationships ................................................................................. 3 2. License to Practice in Minnesota ...............................................................................................3 3. Firm Qualifications and Experience ...........................................................................................4 Size of the firm .............................................................................................................................. 4 Size of firm governmental audit staff ............................................................................................ 4 Office location assigned to manage the engagement ................................................................... 7 Number and nature of professional staff to be employed on this engagement............................ 7 Quality control procedures and peer review report ...................................................................... 8 Good standing ............................................................................................................................. 10 Federal or state desk or field reviews ......................................................................................... 10 Disciplinary action ....................................................................................................................... 10 4. Partner, Supervisory and Staff Qualifications and Experience ................................................. 11 Your Service Team ....................................................................................................................... 11 Commitment to continuing professional education (CPE) .......................................................... 12 Continuity of service ................................................................................................................... 13 Right to approve or reject replacements .................................................................................... 13 5. Similar Engagements with Other Government Entities ........................................................... 14 6. Specific Audit Approach .......................................................................................................... 15 Proposed work plan .................................................................................................................... 15 Financial statement audit approach and methodology ............................................................... 16 Single audit approach .................................................................................................................. 19 Data analytics .............................................................................................................................. 21 CLA Intelligence Platform: Digital services and generative AI ..................................................... 23 Use of technology in the audit .................................................................................................... 24 Communication process .............................................................................................................. 25 7. Compensation ........................................................................................................................ 26 Appendix .................................................................................................................................... 28 Your service team biographies .................................................................................................... 28 January 31, 2025 Golden Valley – Crystal – New Hope Joint Water Commission 7800 Golden Valley Road Golden Valley, MN 55427 Thank you for inviting us to provide a quote. We look forward to the opportunity to provide services to the Golden Valley – Crystal – New Hope Joint Water Commission (the JWC). We are confident that our extensive experience serving similar governmental entities, bolstered by our client‐ oriented philosophy and depth of resources, will make CLA a top qualified candidate to fulfill the scope of your engagement. The following differentiators are offered for the JWC’s consideration: Industry‐specialized insight and resources – As one of the nation’s leading professional services firms, and one of the largest firms who specialize in regulated industries, CLA has the experience and resources to assist the JWC with their audit needs. In addition to your experienced local engagement team, the JWC will have access to one of the country’s largest and most knowledgeable pools of regulated industry resources. Strong methodology and responsive timeline – In forming our overall audit approach, we have carefully reviewed the RFP and other information made available and considered our experience performing similar work for other municipalities. Our local government clients are included amongst the more than 4,200 governmental organizations we serve nationally. Our staff understands your complexities not just from a compliance standpoint, but also from an operational point of view. The work plan also helps minimize the disruption of your staff and operations and provides a blueprint for timely delivery of your required reports. Communication and proactive leadership – the JWC will benefit from a high level of hands‐on service from our team’s senior professionals. We can provide this level of service because, unlike other national firms, our principal‐to‐staff ratio is similar to smaller firms – allowing our senior level professionals to be involved and immediately available throughout the entire engagement process. Our approach helps members of the engagement team stay abreast of key issues at the JWC and take an active role in addressing them. A focus on providing consistent, dependable service – We differ from other national firms in that our corporate practice focuses on the needs of non‐SEC clients, thus allowing us to avoid the workload compression typically experienced by firms that must meet public companies’ SEC filing deadlines. CLA is organized into industry teams, affording our clients with specialized industry‐specific knowledge supplemented by valuable local service and insight. Therefore, the JWC will enjoy the service of members of our state and local government services team who understand the issues and environment critical to governmental entities. Fresh perspective – By engaging CLA, the JWC will benefit from a fresh look at its business operations, information systems, and financial risk management policies and procedures. You will be served by an engagement team with enthusiasm and a desire to meet and exceed expectations. We are confident that our industry experience will bring to the JWC new ideas, creative approaches, and fresh opportunities to meet the financial management and accountability challenges before the JWC. CliftonLarsonAllen LLP CLAconnect.com ©2025 CliftonLarsonAllen LLP | 2 Verification statements I, Christopher G. Knopik, your engagement principal‐in‐charge, will serve as the JWC’s primary contact person for this engagement. This proposal is valid for sixty (60) days from the date of receipt. Furthermore, as a principal of CLA, I am authorized to sign, bind, and commit the firm to the obligations contained in this proposal and the JWC’s RFP. My contact information is as follows: Christopher G. Knopik, CPA, CFE, Principal Office: (612)397‐3266 / Mobile: (320)266‐6424 Email: Christopher.knopik@claconnect.com We want to serve you and we have the qualifications to deliver quality, timely work. Throughout this proposal, we take you on a journey outlining how we’ll work together and the value you can expect Please contact me if I can provide additional information on our firm or our proposal. Sincerely, CliftonLarsonAllen LLP Christopher Knopik, CPA, CFE Principal 612‐397‐3266 christopher.knopik@CLAconnect.com ©2025 CliftonLarsonAllen LLP | 3 iv. Detailed Proposal 1. Independence CLA is independent of the JWC under the American Institute of Certified Public Accountant’s Code of Professional Conduct and its interpretations, the U.S. Government Accountability Office’s Government Auditing Standards, as required. Our firm‐wide quality control policies and procedures foster strict compliance with these professional standards. In addition, the individuals assigned to your engagement are independent of the JWC. Professional relationships involving the JWC CLA has performed Utility Billing Procedure Compilation Services for The Golden Valley – Crystal – New Hope Joint Water Commission in the past five years, the only engagement for the JWC was January of 2024. CLA was required to and has maintained its independence regarding these entities in accordance with both GAAS established by the American Institute of Certified Public Accountants (AICPA) and Government Audit Standards as established by the GAO. During this engagement CLA did not make any management decisions for the JWC. We met with JWC staff to understand the current utility billing process, made some process recommendations to Management, and then compiled the current process into an easy to use document for training and documentation purposes. We have no conflicts of interest, either inherent or explicit with either the JWC or any of its component units. In situations where we perform services for a primary government and its component units, we generally assign independent engagement principals to each unit. We would not propose on an entity in which we determined there was an inherent or explicit conflict of interest or a lack of independence that existed either in fact or appearance. Written notice of professional relationships CLA will give the JWC written notice of any professional relationships entered into during the period of this agreement. 2. License to Practice in Minnesota CLA is a limited liability partnership and is duly licensed to practice public accountancy in the state of Minnesota. All assigned key professional staff are licensed certified public accountants. A copy of our state license is provided below: ©2025 CliftonLarsonAllen LLP | 4 3. Firm Qualifications and Experience Size of the firm Create opportunities CLA exists to create opportunities for our clients, our people, and our communities through industry‐focused wealth advisory, digital, audit, tax, consulting, and outsourcing services. Our broad professional services allow us to serve clients more completely — from startup to succession and beyond. Our professionals are immersed in the industries they serve and have specialized knowledge of their operating and regulatory environments. With nearly 9,000 people in more than 130 U.S. locations and a global vision, we promise to know you and help you. It takes balanceTM With CLA by your side, you can find everything you need in one firm. Professionally or personally, big or small, we can help you discover opportunities and bring balance to get you where you want to go. CLA has been recertified as a Great Place to Work in January 2024. Size of firm governmental audit staff You can benefit from a close personal connection with a team of professionals devoted to governments. Our goal is to become familiar with all aspects of your operations — not just the information needed for the year‐ end audit so that we can offer proactive approaches in the areas that matter most to you: Finding new ways to operate more effectively and efficiently Responding to regulatory pressures and complexities Maintaining quality services in the face of revenue reductions Providing transparent, accurate, and meaningful financial information to stakeholders, decision‐makers, and your constituents ©2025 CliftonLarsonAllen LLP | 5 We understand the legislative changes, funding challenges, compliance responsibilities, and risk management duties that impact you. Our experienced government services team can help you navigate the challenges of today, all while seamlessly strategizing for the future. Deep industry connections CLA actively supports industry education as a thought leader and industry speaker. We focus on supporting the educational needs of the industry through nationally sponsored trade events. Our team of professionals is sought after, both as educators and as experienced speakers who are invited to speak and teach at major professional events by leading trade associations, including those shown here. We are also actively involved in and/or are members of the following professional organizations: American Institute of Certified Public Accountants (AICPA) AICPA’s State and Local Government Expert Panel AICPA’s Government Audit Quality Center (GAQC) Government Finance Officers Association (GFOA) Special Review Committee for the GFOA’s Certificate of Achievement for Excellence in Financial Reporting (Certificate) Program AICPA Single Audit Quality Task Force Association of Government Accountants Our involvement in these professional organizations, combined with various technical services we subscribe to, allows use to be at the forefront of change in the constantly changing government environment. We take our responsibility for staying current with new accounting pronouncements, auditing standards, other professional standards and laws and regulations seriously. ©2025 CliftonLarsonAllen LLP | 6 Insight to strengthen your organization When you’re ready to go beyond the numbers to find value‐added strategies, we offer resources to help you respond to challenges and opportunities including: National webinars — Access complimentary professional development opportunities for your team. Articles and white papers — Stay current on industry information as issues arise. Curious: We care, we listen, we get to know you. Support at every turn With dedicated services specific to state and local governments, you have access to guidance on all aspects of your operations. Affordable Care Act (ACA) reporting and compliance Audit, review, and compilation of financial statements Compliance audits (HUD, OMB Single Audits) COVID‐19 funding support Cybersecurity Enterprise risk management Forensic accounting, auditing, and fraud investigation Fraud risk management Grant compliance Implementation assistance for complex Governmental Accounting Standards Board (GASB) statements Internal audit Outsourced business operations Performance auditing Purchase card (p‐card) monitoring and analytics Risk assessments Strategic, financial, and operational consulting Telecom management services Independence can easily become impaired when providing consulting services; therefore, we do not provide any services to our audit clients beyond those allowed. If additional work is requested by the JWC outside of the scope of the audit, we will discuss with you our proposed fee for additional services prior to beginning the new services. ©2025 CliftonLarsonAllen LLP | 7 Office location assigned to manage the engagement Our firm matches the necessary skill set to an engagement before considering the geographic location of the staff. Assigning team members who specialize in working with similar clients can provide the JWC higher‐quality services and allows us to complete the engagement in a more efficient and effective manner with little interruption to your staff. The JWC will be served by an industry‐specialized engagement team located in our Minneapolis office. CLA Minneapolis 220 South Sixth Street Suite 300 Minneapolis, MN 55402‐1436 Number and nature of professional staff to be employed on this engagement The table below provides a breakdown by staff level and denotes full‐ or part‐time status of the engagement team that will serve the JWC. This team has extensive experience working with clients similar to the JWC. Level of Staff Full-Time Staff Part-Time Staff Principal/Signing Director 1 1 Director/Manager 1 0 Senior 1 0 Associate 1 0 Total 4 1 ©2025 CliftonLarsonAllen LLP | 8 Quality control procedures and peer review report In the most recent peer review report, dated November 2022, we received a rating of pass, which is the most positive report a firm can receive. We are proud of this accomplishment and its strong evidence of our commitment to technical excellence and quality service. The full report is provided on the following page. This quality control review included a review of specific government engagements. In addition to an external peer review, we have implemented an intensive internal quality control system to provide reasonable assurance that the firm and our personnel comply with professional standards and applicable legal and regulatory requirements. Our quality control system includes the following: A quality control document that dictates the quality control policies of our firm. In many cases, these policies exceed the requirements of standard setters and regulatory bodies. Firm leadership promotes and demonstrates a culture of quality that is pervasive throughout the firm’s operations. To monitor our adherence to our policies and procedures, and to foster quality and accuracy in our services, internal inspections are performed annually. Quality control standards as prescribed by the AICPA. The engagement principal is involved in the planning, fieldwork, and post‐fieldwork review. In addition, an appropriately experienced professional performs a risk‐ based second review of the engagement prior to issuance of the reports. Hiring decisions and professional development programs designed so personnel possess the competence, capabilities, and commitment to ethical principles, including independence, integrity, and objectivity, to perform our services with due professional care. An annual internal inspection program to monitor compliance with CLA’s quality control policies. Workpapers from a representative sample of engagements are reviewed and improvements to our practices and processes are made, if necessary, based on the results of the internal inspection. Strict adherence to the AICPA’s rules of professional conduct, which specifically require maintaining the confidentiality of client records and information. Privacy and trust are implicit in the accounting profession, and CLA strives to act in a way that will honor the public trust. A requirement that all single audit engagements be reviewed by a designated single audit reviewer, thereby confirming we are in compliance with the standards set forth in the Uniform Guidance. ©2025 CliftonLarsonAllen LLP | 9 ©2025 CliftonLarsonAllen LLP | 10 Good standing CLA and the supervising certified public accountants are in good standing and our firm does not have a record of substandard audit work. Federal or state desk or field reviews CLA has been subject to several federal and state desk reviews by state oversight agencies during the past three years, and we have resolved all findings. In addition, our government audits are subject to review by each agency’s Office of Inspector General, as well as the U.S. Government Accountability Office, and we have also resolved all findings identified in those reviews. Disciplinary action From time to time, individuals in the firm are parties to an inquiry from a regulatory or ethics body. In all cases the individual, with the firm's backing, shall cooperate in providing the information required to respond appropriately to the inquiry. The firm and professionals within the firm presently do not have any regulatory or ethics inquiries outside the normal course of our practice. ©2025 CliftonLarsonAllen LLP | 11 4. Partner, Supervisory and Staff Qualifications and Experience Your Service Team The true value in working with our team is developing a personal and professional relationship with leaders who understand your industry, challenges, and opportunities — with the full support of an entire CLA family behind them. Meet your service team below. All proposed engagement team members are registered or licensed to practice as a certified public accountant in Minnesota. Engagement Team Member Role Experience Christopher Knopik, CPA, CFE Relationship and engagement principal – Christopher Knopik will serve as the JWC’s relationship principal. He will have overall engagement responsibility including planning the engagement, developing the audit approach, supervising staff, and maintaining client contact throughout the engagement and throughout the year. Christopher is responsible for total client satisfaction through the deployment of all required resources and continuous communication with management and the engagement team. 21+ years Anita Supinski, CPA Quality assurance principal – Anita Supinski will complete the quality review of all work performed and of all audit reports prior to issuance. The focus of this review is to confirm adherence to industry and firm quality control guidelines and to make sure the work performed supports the audit opinions issued. 30+ years Ezra Koetz, CPA Engagement manager – Ezra Koetz will act as the lead manager on the engagement. In this role, Ezra will assist the engagement principal with planning the engagement and performing complex audit areas. He will perform a technical review of all work performed and is responsible for the review of the annual comprehensive financial report and all related reports. 6+ years ©2025 CliftonLarsonAllen LLP | 12 Engagement Team Member Role Experience Frost Bowen‐Bailey, CPA Senior – Frost Bowen‐Bailey will be responsible for the day‐to‐day activities for this engagement, including the supervision of all staff assigned. 3+ years Additional staff – We will assign additional staff to your engagement based on your needs and their experience providing services to similar clients. Information of the government auditing experience of each person can be found in the detailed biographies in the Appendix of this proposal. Collaborative: Support from a responsive local team complemented by national resources. We consider the whole of your organization, bringing innovative teams to the table. Commitment to continuing professional education (CPE) With one of the largest regulated industry groups in the nation, CLA is committed to providing regular and robust training to our government practitioners. We hold regular governmental accounting and single audit updates throughout the year. All of our staff assigned to the JWC audit will have the required Yellow Book (Government Auditing Standards) CPE. ©2025 CliftonLarsonAllen LLP | 13 Continuity of service We are committed to providing continuity throughout this engagement. It is our policy to maintain the same staff throughout an engagement, providing maximum efficiency and keeping the learning curve low. With a solid, steady engagement team, each year brings the additional benefits of trust and familiarity. We are also flexible in exploring alternative strategies to non‐mandatory rotation policies. In any business, however, turnover is inevitable. If and when it happens, we will provide summaries of suggested replacements and will discuss re‐assignments prior to finalizing. We have a number of qualified staff members to provide the JWC with quality service over the term of the engagement. CLA is committed to maintaining high staff retention rates, which we believe are a strong indicator of service quality. High retention rates also indicate that our staff members have the resources they need to perform their tasks and maintain a positive work/life balance. Right to approve or reject replacements Engagement principals, managers, other supervisory staff, and professionals may be changed if those personnel leave the firm, are promoted, or are assigned to another office. These personnel may also be changed for other reasons with the express prior written permission of the JWC. In all instances, the JWC would retain the right to approve or reject replacements. Consultants and firm specialists mentioned in the response to this request for proposal may be changed with express prior written permission of the JWC, which retains the right to approve or reject replacements. Any other audit personnel may be changed at the discretion of the proposer, provided that replacements have substantially the same or better qualifications or experience. ©2025 CliftonLarsonAllen LLP | 14 5. Similar Engagements with Other Government Entities The below table lists three references for the JWC to utilize. This is a very small sample size of our over 250 Minnesota governmental clients. Client Name Scope of Work Client Contact Serpent Lake Sanitary District Financial statement audit, Minnesota Legal Compliance, Financial statement drafting, and single audit, when required Michelle Muggli, Bookkeeper serpdist@yahoo.com 218‐821‐1283 Shakopee Public Utilities Financial statement audit, Minnesota Legal Compliance, Financial statement drafting, and single audit, when required Kelley Willemssen, Finance Director kwillemssen@shakopeeutilities.com 952‐233‐1516 Delano Municipal Utilities Current services include outsourced finance director services. Prior to that, CLA was the auditor for the Utility Paul Twite, General Manager ptwite@delanomn.us 763‐972‐0557 ©2025 CliftonLarsonAllen LLP | 15 6. Specific Audit Approach Proposed work plan Easing the transition We recognize that a move to a new firm presents an opportunity as well as a challenge. Over our 60‐year history, we have transitioned many clients and have a collegial and professional relationship with many firms. The CLA Seamless Assurance Advantage (SAA) The CLA Seamless Assurance Advantage (SAA) is an innovative approach to auditing that utilizes leading technologies, analytics, and audit methods to help solve client problems and create a seamless experience. ©2025 CliftonLarsonAllen LLP | 16 Financial statement audit approach and methodology Phase 1: Planning and strategy The main objective of the planning phase is to identify significant areas and design efficient audit procedures. Conduct an entrance meeting. Christopher Knopik and staff will meet with the JWC personnel to agree on an outline of responsibilities and time frames ○ Establish audit approach and timing schedule ○ Determine assistance to be provided by the JWC personnel ○ Discuss application of generally accepted accounting principles ○ Address initial audit concerns ○ Establish report parameters and timetables ○ Progress reporting process ○ Establish principal contacts Gain an understanding of your operations, including any changes in organization, management style, and internal and external factors influencing the operating environment Identify significant accounts and accounting applications, critical audit areas, significant provisions of laws and regulations, and relevant controls over operations Determine the likelihood of effective Information Systems (IS) ‐ related controls Perform a preliminary overall risk assessment Confirm protocol for meeting with and requesting information from relevant staff Establish a timetable for the fieldwork phase of the audit Determine a protocol for using TeamMate Analytics and Expert Analyzer (TeamMate), our data extraction and analysis software, to facilitate timely receipt and analysis of reports from management Compile an initial comprehensive list of items to be prepared by the JWC, and establish deadlines We will document our planning through: Entity profile — This profile will help us understand the JWC's activities, organizational structure, services, management, key employees, and regulatory requirements. Preliminary analytical procedures — These procedures will assist in planning the nature, timing, and extent of auditing procedures that will be used to obtain evidential matter. They will focus on enhancing our understanding of the financial results and will be used to identify any significant transactions and events that have occurred since the last audit date, as well as to identify any areas that may represent specific risks relevant to the audit. General risk analysis — This will contain our overall audit plan, including materiality calculations, fraud risk assessments, overall audit risk assessments, effects of our IS assessment, timing, staffing, client assistance, a listing of significant provisions of laws and regulations, and other key planning considerations. ©2025 CliftonLarsonAllen LLP | 17 Account risk analysis — This document will contain the audit plan for the financial statements, including risk assessment and the extent and nature of testing by assertion. Prepared by client listing — This document will contain a listing of schedules and reports to be prepared by the JWC personnel with due dates for each item. Assurance Information Exchange (AIE) — CLA uses a secure web‐based application to request and obtain documents. This application allows clients to view detailed information, including due dates for all items CLA is requesting. Clients can attach electronic files and add commentary directly on the application. A key element in planning this audit engagement will be the heavy involvement of principals and managers. We will clearly communicate any issues in a timely manner and will be in constant contact as to what we are finding and where we expect it will lead. Using the information we have gathered and the risks identified, we will produce an audit program specifically tailored to the JWC that will detail the nature and types of tests to be performed. We view our programs as living documents, subject to change as conditions warrant. Phase 2: Systems evaluation We will gain an understanding of the internal control structure of the JWC for financial accounting and relevant operations. Next, we will identify control objectives for each type of control material to the financial statements, and then identify and gain an understanding of the relevant control policies and procedures that effectively achieve the control objectives. Finally, we will determine the nature, timing, and extent of our control testing and perform tests of controls. This phase of the audit will include testing of certain key internal controls: Electronic data, including general and application controls reviews and various user controls Financial reporting and compliance with laws and regulations We will test controls over certain key cycles, not only to gather evidence about the existence and effectiveness of internal control for purposes of assessing control risk, but also to gather evidence about the reasonableness of an account balance. Our use of multi‐purpose tests allows us to provide a more efficient audit without sacrificing quality. Our assessment of internal controls will determine whether the JWC has established and maintained internal controls to provide reasonable assurance that the following objectives are met: Transactions are properly recorded, processed, and summarized to permit the preparation of reliable financial statements and to maintain accountability over assets Assets are safeguarded against loss from unauthorized acquisition, use, or disposition Transactions are executed in accordance with laws and regulations that could have a direct and material effect on the financial statements We will finalize our audit programs during this phase. We will also provide an updated prepared by client listing based on our test results and anticipated substantive testing. During the internal control phase, we will also perform a review of general and application information services/information technology (IS/IT) controls for applications significant to financial statements to conclude whether IS general controls are properly designed and operating effectively. ©2025 CliftonLarsonAllen LLP | 18 Based on our preliminary review, we will perform an initial risk assessment of each critical element in each general control category, as well as an overall assessment of each control category. We will then assess the significant computer‐related controls. For IS/IT‐related controls we deem to be ineffectively designed or not operating as intended, we will gather sufficient evidence to support findings and will provide recommendations for improvement. For IS controls we deem to be effectively designed, we will perform testing to determine if they are operating as intended through a combination of procedures, including observation, inquiry, inspection, and re‐performance. Phase 3: Testing and analysis The extent of our substantive testing will be based on results of our internal control tests. Audit sampling will be used only in those situations where it is the most effective method of testing. After identifying individually significant or unusual items, we will decide the audit approach for the remaining balance of items by considering tolerable error and audit risk. This may include (1) testing a sample of the remaining balance; (2) lowering the previously determined threshold for individually significant items to increase the percent of coverage of the account balance; or (3) applying analytical procedures to the remaining balance. When we elect to sample balances, we will use TeamMate to efficiently control and select our samples. Our workpapers during this phase will clearly document our work as outlined in our audit programs. We will provide the JWC with status reports and be in constant communication with the JWC to determine that all identified issues are resolved in a timely manner. We will hold a final exit conference with the JWC to summarize the results of our fieldwork and review significant findings. Phase 4: Reporting and follow up Reports to management will include oral and/or written reports regarding: Independent Auditors' Report Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Independent Auditors' Report on Compliance for Each Major Federal Program, Report on Internal Control Over Compliance, and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance Management Letter Written Communication to Those Charged with Governance, which includes the following areas: ○ Our responsibility under auditing standards generally accepted in the United States of America ○ Changes in significant accounting policies or their application ○ Unusual transactions ○ Management judgments and accounting estimates ○ Significant audit adjustments ○ Other information in documents containing the audited financial statements ○ Disagreements with the JWC ○ the JWC’s consultations with other accountants ○ Major issues discussed with management prior to retention ○ Difficulties encountered in performing the audit ○ Fraud or illegal acts ©2025 CliftonLarsonAllen LLP | 19 Once the final reviews of working papers and financial statements are completed, our opinion, the financial statements, and management letter will be issued. The JWC will be given a draft of any comments we propose to include in the management letter. Items not considered major may be discussed verbally with management instead of in the management letter. Our management letter will include items noted during our analysis of your operations. We will make a formal presentation of the audit results to those charged with governance, if requested. Elevating with artificial intelligence (AI) CLA is committed to harnessing cutting‐edge technology to enhance client service. We may use AI to enhance your audit engagements. This can include: Research and document drafting: CLA professionals may use CLAgpt, our secure, proprietary tool to ask questions and make requests of generative AI trained on several CLA‐specific resources. Document summarization: We may use CLA Family Assistant to help extract and summarize information relevant to our audits, including minutes review, leases, debt agreements, and other document types. Invoice extraction: CLA may use AI tools to extract relevant fields from invoices and other documents. When AI is used, the work is supervised by CLA professionals who verify results before making final decisions. Client information remains confidential when working with these tools. Single audit approach The OMB’s Uniform Guidance (2 CFR Part 200) is effective for federal grants made on or after December 26, 2014. This affects how federal grants are managed and audited and impacts every organization that receives federal assistance. Grant compliance can be a confusing topic and many of our clients rely on their federal funding as a major revenue source, so it is important that they understand what these changes mean to their organization. As a leader in the industry, CLA was out in front of these changes and informed our clients of how to be proactive about these changes and how they could impact their entity. CLA professionals are available to provide guidance and tools tailored to the JWC’s needs, and to assist in compliance with these rules. The AICPA clarified auditing standard, AU‐C 935 “Compliance Audits,” requires risk‐based concepts to be used in all compliance audits including those performed in accordance with 2 CFR Part 200. Our risk‐based approach incorporates this guidance. We will conduct our single audit in three primary phases, as shown, below: ©2025 CliftonLarsonAllen LLP | 20 Phase 1: Risk assessment and planning The risk assessment and planning phase will encompass the overall planning stage of the single audit engagement. During this phase, we will work closely with the JWC’s management to determine that programs and all clusters of programs are properly identified and risk‐rated for determination of the major programs for testing. We will also review the forms and programs utilized in the prior year to determine the extent of any changes which are required. We will accomplish this by following the methodology below: Determine the threshold to distinguish between Type A and B programs, including the effect of any loans and loan programs Utilizing the preliminary Schedule of Expenditure of Federal Awards, we will identify the Type A and significant Type B programs (25% of Type A threshold) in accordance with the Uniform Guidance Identify the programs tested and the findings reported for the past two fiscal years. Determine and document the program risk based on the past two single audits Prepare and distribute Type B program questionnaires to determine risk associated with Type B programs Determine the major programs to be tested for the current fiscal year based on the previous steps Based on our determination of the major programs, we will obtain the current year compliance supplement to aid in the determination of direct and material compliance requirements, and customize the audit program accordingly Determine the preferred methods of communication during the audit Phase 2: Major program testing We will determine the programs to be audited based on the risk assessment performed in the planning phase. We will perform the audit of the programs in accordance with UG. To accomplish this, we will perform the following: Schedule an introductory meeting and notify the JWC’s management of the major programs for the current fiscal year Plan and execute the testing of the expenditures reported on the Schedule of Expenditures of Federal Awards Perform tests of compliance and internal controls over compliance for each major program identified Schedule periodic progress meetings to determine that schedules are adhered to and identify issues as they arise Conduct entrance and exit conference meetings with each grant manager Phase 3: Final assessment and reporting We will re‐perform the steps noted in the preliminary assessment and planning stage once the final Schedule of Expenditures of Federal Awards is received to determine if additional major programs were identified. Based on the final determination of the programs we will perform the following: Identify Type A and significant Type B programs which were not previously identified Re‐assess the risk and determine if we are required to audit additional programs Perform compliance testing at the entity wide level related to procurement and cash management requirements ©2025 CliftonLarsonAllen LLP | 21 Perform testing to validate the status of prior year findings for those programs not selected for audit Prepare the Schedule of Findings and Questioned Costs Conduct exit conference with the JWC’s management to review drafts of required reports: ○ Independent Auditors’ Report on Internal Control over financial reporting and on compliance and other matters based on an audit of Financial Statements Performed in accordance with Government Auditing Standards ○ Independent Auditor’s Report on Compliance for Each Major Federal Program, Report on Internal Control Over Compliance, and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance Throughout the single audit, we will maintain communication through periodic progress meetings with those designated by the JWC. These meetings will be on a set schedule, but as frequently as the JWC determines. During these meetings, we will discuss progress impediments and findings as they arise. Data analytics In addition to standard auditing methodology, a distinguishing aspect of CLA’s audit services incorporates the power of data analytics to multiply the value of the analyses and the results we produce for clients. CLA’s data methodology is a six‐phase, systematic approach to examining an organization’s known risks and identifying unknown risks. Successful data analysis is a dynamic process that continuously evolves throughout the duration of an engagement and requires collaboration of the engagement team. Data analytics are utilized throughout our audit process, our Risk Assessment, Data Analytics and Review (“RADAR”) is a specific application of general ledger data analytics that has been implemented on all audit engagements. RADAR is an innovative approach created and used only by CLA that aims to improve and replace traditional preliminary analytics that were being performed. The phases in our data analytics process are as follows: 1. Planning In the planning stage of the engagement, the use of data analysis is considered and discussed to determine that analytics are directed and focused on accomplishing objectives within the risk assessment. Areas of focus, such as journal entries, cash disbursements, inventory, and accounts receivable are common. 2. Expectations We consider the risks facing our client and design analytics to address these risks. Through preliminary discussions with management and governance, we develop and document expectations of financial transactions and results for the year. These expectations will assist in identifying anomalies and significant audit areas in order to assess risk. ©2025 CliftonLarsonAllen LLP | 22 3. Data acquisition Sufficient planning, a strong initial risk assessment, and an adequate understanding of your systems will serve as the foundation necessary to prepare our draft data request list. We will initially request information in written format and conduct follow‐up conversations helping CLA practitioners share a mutual understanding of the type of data requested and the format required. If there are going to be any challenges/obstacles related to obtaining data, or obtaining data in the preferred format, they will generally be discovered at this point. 4. Technical data analysis Technical analysis of the data requires the skillful blend of knowledge and technical capability. Meaningful technical analysis provides the engagement team with a better understanding of the organization. The additional clarity assists the engagement team to better assess what is “normal” and, in turn, be better suited to spot anomalies, red flags, and other indications of risk. Analytics generally fall into five categories, each looking into the data set in a different way and deployed with a different purpose. 5. Interpret results and subsequent risk assessment Trends and anomalies will be identified through the performance of the above referenced analytics. Comments regarding the interpretation of those trends and anomalies will be captured. When trends are identified, they are reconciled against expectations. For anomalies identified, the approach to further audit procedures will be considered. 6. Response and document The last process is to capture responses and determine that our procedures are properly documented. Abstracts, charts, or summaries of both trends and anomalies are retained in audit documentation to support our identification of risks. Our analysis can be tailored and customized to help analyze an array of information, including client‐specific and proprietary data. Key benefits of data analytics include: Built‐in audit functionality including powerful, audit specific commands and a self‐documenting audit trail 100% data coverage, which means that certain audit procedures can be performed on entire populations, and not just samples Unlimited data access allows us to access and analyze data from virtually any computing environment Eliminates the need to extrapolate information from errors (a common effort when manually auditing data) and allows for more precise conclusions ©2025 CliftonLarsonAllen LLP | 23 The below figure illustrates typical data analytics scenarios. CLA Intelligence Platform: Digital services and generative AI Let us help you harness cutting‐edge technology to transform the way your teams work and uncover deeper business and financial insights. Digital transformation is no longer optional, it’s a necessity. With CLA, you’ll find a comprehensive suite of capabilities spanning automation and integration, data analytics, software, and cybersecurity — offering you new opportunities to navigate and thrive in the digital age. ©2025 CliftonLarsonAllen LLP | 24 By leveraging digital product solutions and services, you can improve your business operations and achieve big goals, whether that’s streamlining processes, enhancing customer experiences, embracing generative artificial intelligence (AI), or driving innovation. We help you put digital solutions in place to: Use of technology in the audit We’re reimagining the audit process through technology to elevate your experience! Assurance Information Exchange (AIE) ― CLA off ers a secure web‐based application to request and obtain documents necessary to complete client engagements. This application allows clients to view detailed information, including due dates for items that CLA requests. Additionally, the application allows clients to attach electronic files and add commentary related to the document requests directly on the application. AIE is provided at no additional cost, subject to the terms of the Assurance Information Exchange Portal Agreement. Assurance Integrated System (AIS) – AIS is CLA’s new assurance methodology platform and includes audit programs, risk assessments, and many of our template forms that can be completed and updated online by individuals that you designate. TeamMate Analytics and Expert Analyzer (TeamMate) ― To analyze and understand large data sets, we use TeamMate Analytics and Expert Analyzer. We customize the application by industry in order to perform the most applicable procedures. This allows us to go beyond sampling and instead analyze the entire general ledger for targeted anomalies. Far beyond the audit application, our six‐phase process of Risk Assessment, Data Analytics and Review (RADAR) can also provide actionable insights to help you understand your entity better. ©2025 CliftonLarsonAllen LLP | 25 Microsoft® Teams ― Our services approach focuses on impacƞul interacƟons. We’ve said goodbye to the days of setting up camp in our clients’ conference rooms for weeks on end. We know our clients have organizations to run, so our interactions have purpose. To assist with communications when we are not onsite, we utilize tools such as Microsoft Teams, which allow for two‐way screen sharing and video. We’ve found this helps reduce disruptions in our clients’ environments while continuing to effectively communicate with each other. Communication process Effective communication is critical to a successful engagement. This includes weekly status meetings where observations, potential exceptions, and leading practices are discussed. To avoid surprises at the end of the engagement, we discuss and document our observations, clarify fact patterns, and confirm management’s understanding and agreement with our findings. CLA adheres to all auditing standards related to reporting observations, recommendations, and findings. All significant deficiencies and material weaknesses will be reported to the audit committee/governance in writing. Best practices, observations, and other matters will be reported to management in a management letter that can be used as a tool to track the implementation of our recommendations. Report to those charged with governance — In addition to observations and recommendations, we will inform the audit committee of: Significant accounting policies Management judgments and accounting estimates Significant audit adjustments and passed adjustments, if any Disagreements with management, if any Management consultation with other accountants, if any Major issues discussed with management prior to retention Difficulties encountered in performing the audit, if any We are sensitive and understanding of the fact that we report to those charged with governance, and our audit professionals maintain objectivity and independence in issuing audit opinions. If we identify significant fraud, illegal acts, or significant delays during the audit process, we will alert the audit committee immediately. Information related to overall fiscal health or other concerns of your organization observed during audit testing will be presented in the exit presentation and as part of the management letter. We will also help you create opportunities for improvement through recommendations and suggestions for strengthening your policies, accounting procedures, and processes. ©2025 CliftonLarsonAllen LLP | 26 7. Compensation Total all‐inclusive price Having upfront conversations builds relationships. The value we can provide your organization starts with helping you uncover revenue opportunities and put dollars in your pocket. While we are addressing your compliance needs, our insights and strategies also represent a return on your investment. See below for a breakdown of the fees by services. Professional Services 2024 2025 2026 Financial statements audit $15,000 $15,500 $16,000 Technology and client support fee (5%) $750 $775 $800 Total (Not including travel costs) $15,750 $16,275 $16,800 Our fixed‐fee quote is designed with an understanding that: The JWC personnel will provide documents and information requested in a timely fashion. The operations of your organization do not change significantly and do not include any future acquisitions or significant changes in your business operations. If there is additional time due to errors that require prior period adjustments, that time will be discussed with the JWC and billed at our standard hourly rates, which range from $140 to $550 per hour, depending on the level of the assistance, required. There are not significant changes to the scope, including no significant changes in auditing, accounting, or reporting requirements. The 5% technology and client support fee supports our continuous investment in technology and innovation to enhance your experience and protect your data. For the first year of engagement, the year ended December 31, 2024, CLA would work on the audit as soon as possible, however based on the current schedule it is anticipated it will be started in June or July 2025. Fee increase Our fees are based on professional standards and regulations currently in effect and barring any changes in the nature or requirements of the engagement, our annual fees will increase in accordance with the increases in our payroll and overhead costs. In addition, costs could increase due to substantial changes in your office locations, asset size and/or operational structure. If fee increases are expected outside of the ranges provided above, we would discuss with management prior to the completion of the work. ©2025 CliftonLarsonAllen LLP | 27 No surprises Our clients don’t like fee surprises. Neither do we. If changes occur, we will discuss a revised fee proposal with you before beginning any work. For any “out‐of‐scope” work, we will provide an estimate for your approval. We’re invested in our relationships and strongly encourage intentional and frequent communication. Contact us year‐round as changes or questions arise — we do not bill for routine inquiries or advice. We are committed to creating a long‐standing relationship. If you have concerns about the fee structure, give us a call and let’s discuss. Transparent: Clear, authentic communication and market-based fees. ©2025 CliftonLarsonAllen LLP | 28 Appendix Your service team biographies ©2022 CliftonLarsonAllen LLP | 29 Christopher Knopik, CPA, CFE CLA (CliftonLarsonAllen LLP) Principal 612‐397‐3266 Minneapolis, Minnesota christopher.knopik@CLAconnect.com Profile Christopher is a principal at CLA and has more than 20 years of public accounting experience. He works exclusively with state and local government clients (including colleges and universities, cities, towns, counties, special districts, and state agencies) and has extensive experience with Uniform Guidance single audits of federal grant programs. Technical experience State and local government experience Higher education Single audit under Uniform Guidance Education and professional involvement Bachelor of science in accounting from Bemidji State University, Bemidji, Minnesota Certified Public Accountant, Minnesota, Texas, and Hawaii Oregon Municipal Auditor American Institute of Certified Public Accountants Minnesota Society of Certified Public Accountants Minnesota Government Finance Officers Association o Executive Board, At‐large member o Education Committee o Social Committee Association of Certified Fraud Examiners National Association of College and University Business Officers Certified Fraud Examiner Government auditing experience City of Stillwater, Minnesota (ACFR Award) City of Mahtomedi, Minnesota (ACFR Award) City of Lakeville, Minnesota (ACFR Award) Dakota County, Minnesota (ACFR Award) Carver County, Minnesota (ACFR Award) Sherburne County, Minnesota (ACFR Award) Minnesota Zoo Minnesota Sports Facilities Authority (ACFR Award) Minnesota State Colleges and Universities West Virginia University West Virginia University – Parkersburg West Virginia University Research Corporation West Virginia State University Southwestern Oregon Community College Auxiliary and ancillary organizations of Eastern Washington University St. Paul Public Schools Hopkins Public Schools Eastern Carver County Public Schools Roseville Public Schools Legislative Coordinating Commission Continuing professional education Single Audit Training Yellow Book Training MN School Districts internal training Government conference internal training Annual A&A updates ©2024 CliftonLarsonAllen LLP | 30 Anita M. Supinski, CPA CLA (CliftonLarsonAllen LLP) Principal 218‐825‐2919 Brainerd, Minnesota anita.supinski@CLAconnect.com Profile Anita is a CLA national assurance technical group principal who started with the firm in 1989 and works primarily with state and local government engagements. Anita serves as the CLA state and local government industry assurance leader and manages the efforts of the CLA GASB GAAP implementation task force. Additionally, her responsibilities include being a firm wide technical resource for the governmental agencies audit and assurance practice and quality review of assurance engagements of government agencies. Anita also develops and conducts training sessions for audit and accounting staff within the firm. Anita is an experienced member of peer review teams and is involved with the firm’s peer review and internal inspection process. Technical experience Anita assists governmental audit engagement teams and clients with technical audit and accounting issues and works with the CLA state and local governments group to formulate audit and financial statement report planning. She has experience working with more than 300 audits including states, schools, counties, local municipalities, as well as numerous special‐purpose governments across the nation. Additionally, she consults with engagement teams on technical issues related to audits of federal and state awards and Government Auditing Standards. Education and professional involvement Participates as a reviewer in the AICPA’s enhanced peer review oversight program Past member of the AICPA State and Local Government Expert Panel Bachelor of science in accounting from St. Cloud State University, St. Cloud, Minnesota American Institute of Certified Public Accountants Minnesota Society of Certified Public Accountants Certified Public Accountant, Minnesota Speaking engagements AICPA National Governmental Accounting and Auditing Update and other AICPA learning webcasts Presenter for internal annual CLA audit and accounting updates CLA external Local Government Training Academy Presenter Instructor for firm’s annual Minnesota School District update as well as other internal learning sessions ©2024 CliftonLarsonAllen LLP | 31 Ezra Koetz, CPA CLA (CliftonLarsonAllen LLP) Manager 612‐376‐4790 Minneapolis, Minnesota ezra.koetz@CLAconnect.com Profile Ezra is a senior with eight years of experience. He works exclusively with state and local government clients, including cities, towns, counties, public schools, charter schools, fire reliefs, and other governmental entities. Technical experience State and local government Audits Education and professional involvement Bachelor of arts in public accounting and Spanish from Gustavus Adolphus College, St. Peter, Minnesota Certified Public Accountant in the state of Minnesota Government auditing experience Dakota County Carver County Goodhue County City of Mahtomedi City of Elk River City of Delano City of Gem Lake City of Wyoming City of Orono City of Grant White Bear Township Town of May Lakeville Fire Relief Elk River Fire Relief Wyoming Fire Relief Hastings Fire Relief Buffalo Fire Relief Prior Lake‐Savage Public Schools Hopkins Public Schools Minnetonka Public Schools Rosemount ‐Apple‐Valley‐Eagan Public Schools Glencoe Public Schools Roseville Public Schools Mankato Public Schools Big Picture Academy Bluffview Montessori Cologne Academy HOPE Community Academy Math and Science Academy Minnesota Internship Center Nerstrand Elementary Sojourner Truth Academy St. Paul Conservatory for Performing Arts St. Croix Preparatory Academy St. Paul Port Authority Minnesota Armory Building Commission Minnesota Sports Facility Authority Continuing professional education Single Audit Training Yellow Book Training Minnesota school districts internal training Government conference internal training Annual A&A updates ©2024 CliftonLarsonAllen LLP | 32 Frost Bowen-Bailey, CPA CLA (CliftonLarsonAllen LLP) Senior 612‐215‐1763 Minneapolis, Minnesota frost.bowen‐bailey@CLAconnect.com Profile Frost is a senior associate at CLA and has over 3 years of public accounting experience. He works exclusively with state and local government clients (including school districts, charter schools, state agencies, special districts, cities, and counties) and has a passion for serving and connecting with clients. Technical experience State and local government experience Education and professional involvement Bachelor of the Arts in Accounting and Music from Luther College Certified Public Accountant, Minnesota American Institute of Certified Public Accountants Minnesota Society of Certified Public Accountants Minnesota Government Finance Officers Association Key relevant clients City of Minnetrista, Minnesota (ACFR Award) City of Lakeville, Minnesota (ACFR Award) City of Hermantown, Minnesota City of Grant, Minnesota Dakota County, Minnesota (ACFR Award) Sherburne County, Minnesota (ACFR Award) Scott County, Minnesota (ACFR Award) Isanti County, Minnesota Hopkins Public Schools Minnesota Zoo Minnesota Sports Facilities Authority (ACFR Award) Vadnais Lake Area Water Management Organization CLAconnect.com CPAS | CONSULTANTS | WEALTH ADVISORS CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer. Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC‐registered investment advisor. ©2024 CliftonLarsonAllen LLP | 33 FOR THE YEARS ENDING DECEMBER 31, 2024 DECEMBER 31, 2025 Date Submitted: January 13, 2025 Conway, Deuth & Schmiesing, PLLP 331 3rd St. SW, Ste 2 | Willmar, MN 56201 | Visit us online at: cds.cpa YOUR AUDIT EXPERTS Proposal for Audit Services for Golden Valley-Crystal-New Hope Joint Water Commission CONTACT PERSON Justin McGraw, CPA and Partner Direct (320) 221-8016 Fax (320) 693-7502 Toll-free (888) 388-1040 jmcgraw@cdscpa.com PROPOSAL FOR PROFESSIONAL AUDIT SERVICES FOR GOLDEN VALLEY-CRYSTAL-NEW HOPE JOINT WATER COMMISSION 2 TABLE OF CONTENTS Table of Contents 2 Transmittal Letter 3 Our Services for Golden Valley-Crystal-New Hope Joint Water Commission 4 Firm Qualifications and Experience 5 Engagement Team Members 6 Professional Fee Schedule 7 PROPOSAL FOR PROFESSIONAL AUDIT SERVICES FOR GOLDEN VALLEY-CRYSTAL-NEW HOPE JOINT WATER COMMISSION 3 January 13, 2025 Jennifer Hoffman Golden Valley-Crystal-New Hope Joint Water Commission jhoffman@goldenvalleymn.gov Dear Ms. Hoffman: On behalf of Conway, Deuth & Schmiesing, PLLP (CDS), we are pleased to submit this two-year proposal for the preparation and audit of the financial statements for Golden Vallely-Crystal-New Hope Joint Water Commission for the fiscal years ending December 31, 2024 and 2025. We appreciate the opportunity to bid these services and your consideration of our firm. The attached proposal addresses the qualifications of our firm, the depth and breadth of the services we will provide your Organization, and our commitment to perform the work within the time period while providing the highest quality work through a process that is both efficient and effective. If you have any questions regarding the content of our proposal, please feel free to call me at (320) 221-8016. We look forward to hearing from you soon. Sincerely, CONWAY, DEUTH & SCHMIESING, PLLP Justin McGraw, CPA Partner PROPOSAL FOR PROFESSIONAL AUDIT SERVICES FOR GOLDEN VALLEY-CRYSTAL-NEW HOPE JOINT WATER COMMISSION 4 OUR SERVICES FOR GOLDEN VALLEY-CRYSTAL-NEW HOPE JOINT WATER COMMISSION Our services would include the following: Performing an audit of your financial statements for the fiscal years ending December 31, 2024 and 2025, in accordance with generally accepted auditing standards; Government Auditing Standards; and Uniform Guidance, and other federal, state, and local requirements, as applicable. Issuing a report on the fair presentation of the financial statements and an “in-relation to” report on the supporting schedules in conformity with generally accepted accounting principles. Providing separate reports required by Government Auditing Standards, the Uniform Guidance (as applicable), and the Minnesota Office of the State Auditor pursuant Minnesota Statutes. Preparing and submitting the Federal Audit Clearinghouse Form, if applicable. Providing information on upcoming GASB Statements. Preparation of the financial statements for your Organization. Presenting audit results and comments relating to your financial statements and internal controls to the Audit Committee. Additional accounting and analyzing services requested would be discussed with you prior to completing the tasks. Ongoing access throughout the year to answer your questions. PROPOSAL FOR PROFESSIONAL AUDIT SERVICES FOR GOLDEN VALLEY-CRYSTAL-NEW HOPE JOINT WATER COMMISSION 5 FIRM QUALIFICATIONS AND EXPERIENCE CDS is a local, multi-office firm with offices in Willmar, Benson, Morris, Litchfield, and Sartell, Minnesota. Our team is ninety-five strong, including thirteen partners, and thirty Certified Public Accountants. We have a dedicated audit team that is aware of and committed to meeting your Organization’s needs and the reporting deadlines. The proposed audit engagement for Golden Valley-Crystal-New Hope Joint Water Commission would be served by staff from our Willmar and Litchfield offices. Justin McGraw, CPA and Partner, would be the person in charge of your engagement. Additionally, one Manager and one Quality Technical Review Partner will be assigned to the engagement. Only the Quality Technical Review Partner would be employed on a part-time basis. We are members of the American Institute of Certified Public Accountants (AICPA), Minnesota Society of Certified Public Accountants (MNCPA), Minnesota Clerks and Finance Officers Association (MCFOA), National Government Finance Officers Association (GFOA), Minnesota Government Finance Officers Association (MNGFOA), Association of Certified Fraud Examiners (ACFE), and Governmental Audit Quality Center through the AICPA. We are best qualified to perform the engagement for Golden Valley-Crystal-New Hope Joint Water Commission based on our core values which are at the foundation of our firm. PROPOSAL FOR PROFESSIONAL AUDIT SERVICES FOR GOLDEN VALLEY-CRYSTAL-NEW HOPE JOINT WATER COMMISSION 6 ENGAGEMENT TEAM QUALIFICATIONS AND EXPERIENCE Our experienced team will provide you with the highest standard of excellence throughout your engagement. The following staff from our Willmar and Litchfield offices would be assigned to work on your engagement. In Charge of Engagement and Partner – Justin McGraw, CPA joined CDS in 2014. Prior to CDS, he worked in auditing for over two years. He graduated from University of North Dakota in Grand Forks, ND with a Bachelor of Accountancy degree. In 2015, Justin was promoted to Senior Accountant and in 2017, he was promoted to Manager. Justin was admitted as a Partner in 2021. His focus areas are governmental, quasi-governmental, and non-profit auditing, and Virtual CFO services. Quality Technical Review Partner – Kari Steinbeisser, CPA, CFE joined CDS in 2011. She graduated from St. Cloud State University in St. Cloud, MN, with a Bachelor of Science degree in Accounting. In 2014, Kari was promoted to Senior Accountant, and in 2015, to Manager. She was admitted as a Partner in 2021. Kari's focus areas are governmental, quasi-governmental, and non-profit auditing, and forensic accounting. Manager – Crystal Vossen Seiffert joined CDS in 2024. Prior to CDS, she worked in accounting and auditing for nine years, including operating as a Controller and Chief Financial Officer for a for profit company for four years. Crystal graduated from Minnesota State University Mankato in Mankato, MN with Bachelor of Science degrees in Accounting and Corporate Finance, with a minor in Business Administration. She specializes in governmental auditing. PROPOSAL FOR PROFESSIONAL AUDIT SERVICES FOR GOLDEN VALLEY-CRYSTAL-NEW HOPE JOINT WATER COMMISSION 7 PROFESSIONAL FEE SCHEDULE Firm Name: Conway, Deuth & Schmiesing, PLLP Date: January 13, 2025 Two-Year Proposal Fee Schedule All-Inclusive Audit Fees First Year Setup Fee Total Audit Fees Year Ended December 31, 2024 $14,000 $1,000 - $2,000 $15,000 - $16,000 Year Ended December 31, 2025 $15,250 N/A $15,250 Fee for Single Audit would be $3,500, if applicable. This fee includes one major program. Each additional program will be $1,500 each. We would be available throughout the year for any additional accounting and consulting services at your request. We are a full-service firm able to assist you with a wide variety of tasks. These services would be billed at our normal hourly rates of $50 - $290. Rates for accounting and consulting services vary according to the degree of experience of the personnel assigned. Additional accounting services requested or required will be discussed with you prior to procedures performed. Payment will be made upon successful conclusion and acceptance of the audit by the Organization and distribution of paper and electronic final audit documents. I certify that I am entitled to represent Conway, Deuth & Schmiesing, PLLP (CDS), empowered to submit this bid, and authorized to sign a contract with Golden Valley-Crystal-New Hope Joint Water Commission. ____________________________ Justin McGraw, CPA and Partner Joint Water Commission TAC Meeting Thursday January 16, 2025, 10:00 AM 1) Towers a) MLR tower i) Move construction to 2025. Updated budget to 3 million for construction and engineering. This will include a new altitude valve and hydrant at tower location within the fenced in area. Pre-bid meeting Jan 2. Council authorized bids. ii) Parts storage (1) Connex containers will be needed for storage of existing parts during construction. Dave will be looking into the box rental iii) T-Mobile plans to remove their antennas (most likely permanently) Still pending b) Tower replacement i) GV tower to get replaced 2028/2029. c) GV tower Done 2) Projects a) MCC / motor, pump, VFD replacement at both pump houses – pump and motor removed Jan 6 (GV) and 8 (Crystal) i) GV construction 2024/2025 (pump #4) (1) Switch Gear / Transfer Switch (a) Consulting engineer is following up on lead times for equipment at the GV station. Q2 of 2025 ii) Crystal construction 2025/2026 (pump #3) (1) Review change order for new door between pump room and control room. b) Effluent Meters i) GV (1) Access the condition of the existing structures when time allows. ii) Crystal construction 2026/2027 tentative (1) After the MCC project is complete, the effluent meters along with 3 valves will be replaced. (2) Have meters on site. c) Reservoirs i) Golden Valley (1) MPLS will be installing a 48” valve in September of this year to isolate intake 1 and 2 in case of emergency. (a) This changed to spring of 2025 for construction (b) Low bid was Pci Road at $349,224.35. (50/50 split) ii) Crystal (1) KLM completed the robotic inspection in 2023. Working with KLM to review inspection. d) SCADA i) Met with Total Control (1) Total Control recommended security upgrades at all JWC properties which included cameras, door fobs, etc. Will be done after the MCC project. Schedule for late 2026. e) Valve replacement. i) GV (1) 18” @ Olympia and Louisiana Ave – Two quotes were received. Valley Rich at $21,200 and United Water & Sewer at $26,400. Staff will get City Council approval in September. -moved to 2025 3) Miscellaneous a) Emergency Wells i) GV (1) TAC proposes to look for a suitable site in Golden Valley. Currently under review with the TAC and legal. ii) Crystal (1) Run both wells, and test water in September of 2024 (a) 6.25.23 well 1 893 GPM (b) 6.25.23 well 2 1335 GPM iii) New Hope (1) Run well and test water in 2024. (a) 900 GPM 2023 iv) JWC winter January average last 3 years (1) 146,605,333 gallons billed by MPLS (a) January monthly average 4,886,844 per day (b) JWC well production 4,504,320 per day b) County will be replacing pavement on Douglas from Medicine Lake Road to Broadway in ADA and pavement in 2027. (12-15 valves) possible lining? c) County will be replacing pavement on County Road 66 in 2027 ADA in 2026. (2 valves) d) Asset condition assessment – consultant e) Teams channel - GV