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Home My WebLink About2019-318Resolution No. 2019-318 RESOLUTION NO. 2019-318 RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND HINDERLITER, DE LLAMA & ASSOCIATES (HdL) FOR CANNABIS MONITORING AND FINANCIAL AUDIT SERVICES WHEREAS, on May, 2019, the Mayor and City Council directed staff to prepare and distribute a Request for Proposal (RFP) for Cannabis Monitoring and Financial Audit Services; and WHEREAS, the City received seven (7) proposals from a wide range of consultants; and WHEREAS, the written proposals were evaluated by a selection committee comprised of City staff representing the Community & Economic Development Department; and WHEREAS, Hmderliter, de Llamas & Associates (HdL) was selected as the top candidate by the selection committee due to its experience and status as an industry leader in cannabis development, implementation and enforcement. BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. The above recitals are true and correct and are incorporated herein by this reference. SECTION 2. The City Manager is hereby authorized and directed to execute a Professional Services Agreement with Hinderliter, de Llamas & Associates (HdL) attached hereto as Exhibit "A", in an amount not to exceed $378,000.00 for a term ending December 30, 2022 with Two (2) One year extensions. SECTION 3. The authorization to execute the above -referenced amendment is rescinded if the amendment is not executed and returned to the Office of the City Clerk within sixty (60) days following the effective date of this Resolution. SECTION 4. The City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Resolution No. 2019-318 SECTION 5. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable. SECTION 6. Effective Date. This Resolution shall become effective immediately. APPROVED and ADOPTED by the City o nc an fined by the Mayor and attested by the City Clerk this 4a' day of December 2019. John Valdivia, Mayor City of San Bernardino Attest: Georgeann fU na; MM ., City Clerk Approved as -to form: / -ear<` Gary D. Saenz, City Attorney Resolution No. 2019-318 CERTIFICATION STATE OF CALIFORNIA) COUNTY OF SAN BERNARDINO) ss CITY OF SAN BERNARDINO ) I, Georgeann Hanna, MMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2019-318, adopted at a regular meeting held on the 4thdayof December 2019 by the following vote: Council Members: AYES NAYS ABSTAIN ABSENT SANCHEZ n 113ARRA x FIGUEROA X SHORETT NICKEL RICHARD Y MULVIHILL WITNESS my hand and official seal of the City of San Bernardino this 4th day of December 2019. Geo: eann Hanna, . MC, City Clerk City of San Bernardino PROP®,iAL FOR C4N ABIS MONITORING AND FINACIAL AUDIT SERVICES RFP NO. F-19-53 July 17, 2019 HdLO Companies Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 TABLE OF CONTENTS A. COVER LETTER...........................................................................................................1 B. BACKGROUND AND PROJECT SUMMARY...............................................................3 C. METHODOLOGY..... ................4 D. STAFFING....................................................................................................................10 E. QUALIFICATIONS... F. FEE PROPOSAL ..................... .................14 18 G. INSURANCE.................................................................................................................20 H. LITIGATION..................................................................................................................20 I. OTHER INFORMATION ...... J. APPENDICES............ ATTACHMENT 1 (Staff Resumes) HdT Companies .................................................................... 20 ............................................................ 20 .................................................... 21 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 A. COVER LETTER July 17, 2019 Jim Slobojan Procurement Services Manager City of San Bernardino 290 North D Street San Bernardino, California 92401 Re: Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 Thank you for the opportunity to submit this proposal for cannabis management services for the City of San Bernardino. The enclosed scope of services provides for annual financial audits and one (1) onsite regulatory compliance inspection for each permitted cannabis businesses operating within the City. The scope also offers assistance with plan checks for proposed tenant improvements of cannabis facilities to ensure compliance with physical requirements of State and local law. In addition, the scope offers up to 30 hours of technical assistance and subject matter expertise, to be used as needed at the City's request. All prices, terms and conditions of this proposal are valid for 180 days from July 17th, 2019. HdL is recognized as the industry leader in the development, implementation and enforcement of cannabis management programs for local governments throughout California. We have partnered with over 125 California cities and counties on cannabis - related programs, including ordinance development and review, community outreach, merit - based applications and permitting processes, cost recovery studies, regulatory compliance reviews, financial audits, fiscal analysis and law enforcement training. Our cannabis team has unmatched expertise, with over 46 years of combined experience developing and managing cannabis regulatory and taxation programs. Our staff have completed specialized training and have expertise in cannabis cultivation practices, odor mitigation issues, manufacturing, dispensary management, land use issues and regulatory compliance. In addition, our cannabis team members have experience conducting over 16,000 cannabis compliance inspections and financial audits in Colorado, California and Nevada, and have reviewed, scored and processed over 1,800 cannabis business applications in the last three years in California.. HdL has a proven track record providing the exact services the City is seeking. Our qualifications are unmatched in the industry. 1 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 HdL is a California S -Corporation, incorporated in 1985 and is a 100% employee owned company. The firm's headquarters are located at 120 S. State College Blvd., Suite 200, Brea, CA 92821 with additional offices located in Pleasanton and San Dimas. Over 50 employees work out of the Brea headquarters, with over 150 employees nationally. This contract will be managed through the office shown below. The person authorized to clarify, negotiate and obligate HdL for this proposal is: Andrew Nickerson, President/CEO Hinderliter, de Llamas and Associates 120 S. State College Blvd., Suite 200 Brea, CA 92821 714.879.5000 Fax: 909.861.7726 anickerson @ hdlcompanies.con, We look forward to the opportunity to continue working with the City of San Bernardino to meet the City's cannabis management needs. If you have any questions or require additional information, please feel free to contact me by email at anickerson@hdicompanies.com or David McPherson at dmcphersonPi.....,ompanies.com or by phone at 714.879.5000. Sincerely, Andy Nickerson President, HdL Companies 2 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 B. BACKGROUND AND PROJECT SUMMARY The City of San Bernardino has retained the services of HdL since 2017 to assist with the development and implementation of a regulatory and taxation program for commercial cannabis businesses in the City. Prior cannabis -related services provided the City have included review and analysis of the citizen initiative Measure O, development of a new cannabis regulatory ordinance, design and implementation of a merit -based application review and selection process, conducting application reviews, site inspections and interviews, and developing a cannabis tax measure (Measure W) which was approved by the City's voters on November 6, 2018. HdL worked closely with the City Council, City staff, the Citizen's Advisory Committee, stakeholders and the community in developing the City's comprehensive cannabis regulation and tax strategy. Pursuant to this work, the City Council has since awarded 16 permits for commercial cannabis businesses, including 5 retailers, 5 microbusinesses, 4 cultivation facilities,1 cannabis manufacturer and 1 distributor. The City is now requesting additional assistance through this RFP to provide oversight and monitoring of permitted cannabis businesses to ensure compliance with all State and local laws and regulations, including proper reporting and payment of the City's cannabis business tax under Section 5.18 of the City of San Bernardino Municipal Code (SBMC). Such monitoring shall include all of the following: • Annual financial audits to ensure compliance with business tax reporting and remittance requirements, sales and inventory tracking, and all other requirements of Section 5.18 of the SBMC. • Onsite inspections of each commercial cannabis facility to ensure compliance with all State and local laws and regulations, including physical security measures, standard operating procedures, inventory track and trace controls, limited access areas, surveillance systems, locks and alarms, records retention and other requirements. • Technical assistance and policy/subject matter expertise • Plan check services for proposed tenant improvements to ensure compliance with all State and local requirements • Background checks for all owners, managers and principals associated with cannabis business applications, as well as for all employees or line staff as needed. HdL was instrumental in developing the City's comprehensive cannabis regulation and tax strategy, and is conducted application reviews, site inspections and interviews for all of the City's existing cannabis businesses. In addition, our cannabis team members have experience conducting over 16,000 cannabis compliance inspections and financial audits in Colorado, California and Nevada, and have reviewed, scored and processed over 1,800 cannabis business applications in the last three years in California. This experience makes HdL uniquely familiar with the City's needs and makes us uniquely qualified to provide the requested services. 3 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 C. METHODOLOGY Annual Financial Audits HdL will conduct an annual financial audit of each cannabis business operating legally within the City to ensure compliance with the requirements of Chapter 5.18 (Cannabis Business Tax) of the San Bernardino Municipal Code (SBMC) and to verify that tax revenues submitted to the City are correct and based upon the true amount of gross receipts or square footage for the business. If our audit should reveal any unreported revenue, HdL will recommend a tax assessment and any penalties due, consistent with the SBMC. Our audit process includes sending a notification letter and request for records to the auditee; conducting kickoff meetings to discuss audit nature, scope, and expectations with stakeholders; reviewing records for completeness and accuracy; monitoring audit status and schedule; documenting findings and conclusions; holding exit conferences and issuing final reports. HdUs process divides the audit schedule into 4 distinct phases. Phase 1 includes pre -audit work, such as issuance of an audit notification letter to the business, providing a list of all financial records that will be required, allowing an appropriate timeframe for receipt of those records, and scheduling an initial site visit. The City will provide HdL with an updated list of all licensed or permitted cannabis businesses, including their permit issuance or renewal date, and shall inform HdL when any additional cannabis business receives permission to operate (i.e., through the issuance of a development agreement, conditional use permit, certificate of occupancy or other indication the business has opened). HdL will then work with the City to schedule financial audits and compliance reviews. HdL will help the City prepare a notification letter to be sent to each licensed cannabis business to start the audit. The letter will contain pertinent information about the audit, including a list of all required records, books and documentation and a request to provide remote query -only access to the business' point of sale system. HdL recommends the notification letter be sent by the City to encourage cooperation from the business and to communicate HdUs authority to access and examine any books or records necessary to conduct the audit as described in Section 5.18.190 of the SBMC. If the City prefers, HdL shall send the letter directly to the licensee. In Phase 2, HdL will conduct an initial review of all records submitted by the business and schedule an initial meeting with business representatives either in person or via conference call. This initial review may identify the need for additional documentation. Once all necessary documentation has been obtained, HdL shall move forward with Phase 3, which involves a full, detailed review of all required records and the drafting of initial findings. In Phase 4 HdL shall hold an exit conference with business representatives then draft the final report, which shall include discussion of any findings of non-compliance or deficiencies which were not corrected by the business in Phase 3. HdL shall also recommend any needed adjustments, penalties or other corrective actions. 4 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 Lastly, HdUs proposed workplan provides a contingency period to accommodate any additional work that may be necessary for specific businesses. Our 4 -phase process is staggered across a 5 -month period, with 4 to 5 businesses falling into each of the various phases during any particular month. By doing so, HdL ensures that the workload is reasonably distributed to allow for timely performance. HdUs workplan and staffing can accommodate additional businesses as they become licensed and functioning over time. HdL shall review the cannabis business tax declaration statement submitted by each business using a variety of testing methods and audit techniques to determine the accuracy and timeliness of gross receipts and/or square footage reported and submitted for the time period and to ensure compliance with all requirements of Section 5.18 of the SBMC. As part of the process, HdL will conduct an analytical review of the business using the proprietary Cannabis Analytical Tracking Solution (CATS IVA) program that allows us to identify if a cannabis operator is under -reporting its taxes or diverting product from its facility. The CATSTm program also allows us to evaluate consistency between gross receipts and/or square footage as reported to the City and sales tax information provided to the California Department of Tax and Fee Administration (CDTFA) for the same period. HdL shall employ a variety of audit techniques including but not limited to interviewing the business owners, touring the business, testing gross receipts, validating square footage data, examination of documentary evidence, evaluating internal controls, and analyzing bank accounts as available. HdL audit staff will also use any relevant information gathered as a part of the compliance reviews under Objective 2 to assist with the financial audit. HdL will also review video surveillance footage, membership records, visitor logs, patient complaints or other records as applicable or necessary to verify concentration of sales, investigate financial anomalies or validate other key findings which may be identified from the CATST" program. HdL's audit program contains other proprietary processes to ensure compliance with local cannabis business tax requirements. Each audit shall include: • Field visit • Gross receipts verification • Cultivation Square footage verification (If applicable) • CATST" Analytic Review • Inventory review (subject to access to the track and trace system) • POS data entry requirements review • Examination of software systems • Review of operations • Preparation and issuance of report • Exit conference with the City 5 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 As part of the process, HdL's team will also use data generated by our internal Tax Analytical Remittance Report (TARR) analysis, which monitors trends over multiple periods to identify discrepancies, outliers or other potential issues that may warrant further investigation. Our TARR analysis considers all of the following: • Compare business to other similar business types in the City; • Compare business to similar business types in other jurisdictions in the region (if applicable); • Compare business account data from previous quarter and provide percentage increase/decrease in revenues; • Compare last four quarters from YTD and provide average increase/decrease in revenues; • Compare business from previous FY year and provide percentage of increase/decrease in revenues; • Cultivation businesses will be analyzed per yield per square foot for each quarter; • Cultivation businesses will be monitored per yield per harvest cycle for each quarter; • Cultivation businesses will be analyzed per yield per year compared to previous year; • Create reports by districts in the City (if applicable); • Risk assessment summaries of each business related to tax liabilities and compliance issues. HdL will provide a full audit report to the City following the completion of each cannabis business tax financial and operational audit, detailing all findings and observations. HdL will work collaboratively with the licensee's ownership/management team to provide them an opportunity to offer supplemental information or documentation to clarify any discrepancies discovered in the course of the audit. HdL will adjust any tax assessment accordingly prior to issuing the final report to the City. HdUs audit report for each cannabis business shall include a finding as to whether the business has properly and accurately reported and submitted the appropriate cannabis business taxes for the review period. If any deficiencies are noted, HdL shall recommend an appropriate assessment including any underpaid or overpaid taxes and any applicable penalties consistent with Section 5.18.100 of the SBMC. HdL's report and findings shall be sufficiently supported by documents and records obtained during the course of the audit so as to allow the City to initiate collections or prepare a refund, as may be necessary. If HdL is unable to make a finding or express an opinion, the reasons why will be stated in the report, along with any recommended further action. Each report shall also note any other deficiencies or areas of non-compliance discovered in the course of the audit and shall provide recommendations for improving future compliance. All documentation obtained by HdL shall be provided to the City upon request. 6 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 - July 17, 2019 HdL's audit team shall be available to provide support as needed or requested by the City for any challenge or appeal of the audit report and any findings, assessment or penalties (at additional cost). Such support shall include attendance and support at any administrative hearings. HdL shall retain all pertinent records, papers, documents or reports for a minimum of 3 years and shall make them available to the City upon request. This period shall be extended upon written request by the City. Onsite Compliance Inspections HdL will conduct one (1) on-site compliance review for each permitted cannabis business to determine compliance with State laws and with Section 5.10 of the San Bernardino Municipal Code (SBMC) as may be applicable. If HdL identifies any non-compliant activities, we will provide the City with a recommended appropriate action to address the deficiency and to ensure future compliance by the permittee. Our compliance review process includes sending a notification letter to the auditee; conducting an onsite visit at the business; documenting findings and conclusions and issuing reports. HdL will coordinate with the City on the timing for each review. The City will provide HdL with a list of all licensed or permitted cannabis businesses, including their permit issuance or renewal date, and shall inform HdL when any additional cannabis business receives permission to operate (i.e., through the issuance of a development agreement, conditional use permit, certificate of occupancy or other indication the business has opened). HdL will then work with the City to schedule compliance reviews. HdL will coordinate with the City as the time for each review approaches. If the City chooses to notify the businesses in advance of the pending review, HdL will help the City prepare a notification letter to be sent to each business. The letter will contain pertinent information about the audit, including the scheduled date and time. HdL recommends the notification letter be sent by the City to encourage cooperation from the business and to communicate HdI!s authority to access and examine the facility and any books or records necessary to conduct the audit pursuant to Section 5.10.410 of the SBMC. HdUs team will use data generated by our cannabis business tax audits and from our internal Tax Analytical Remittance Report (TARR) analysis, which monitors trends over multiple periods, to identify discrepancies, outliers or other potential issues that may warrant further investigation during the site inspection. HdL will also utilize information from our proprietary CATSTM program which gathers and analyzes information on cannabis business operations throughout the State. HdL will provide the City with a full compliance audit report on each business, presenting all findings and observations from the audit, and specifically detailing any occurrence of the business operating outside the parameters of its cannabis business permit. HdL's auditors shall fully document any such findings and provide any and all such evidence or documentation to the City to support appropriate enforcement action. If desired by the City, HdL will also prepare language for a draft notice of violation, staff report, or other follow-up actions. 7 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 HdUs compliance reviews shall specifically include all of the following: • Notifying permittee of pending inspection • 2 -hour on-site inspection to ensure that each business complies with applicable State laws and with all regulatory requirements and protocols of Section 5.10 of the SBMC, including all of the following: o Inventory management o RFID tags or other product identification o Cash handling procedures o Access control o Employee records o Video surveillance and retention o Product safety o Alarm system maintenance and safety o Lock standards o Packaging and labeling requirements o Waste management o Transportation documentation and manifests o Surveillance equipment maintenance o Occupational badges o Business records o Tax records o Maintenance and certification of extraction equipment o MSDS and hazardous materials records and storage o Other items as necessary or as requested by the City • Preparation of a draft report detailing the findings of the inspection and providing recommendations for improvement where needed. If the inspection identifies any violations of law or other non-compliance issues, then HdL will prepare a notice to comply as an included part of the report. • All travel costs associated with the inspection HdL shall retain all pertinent records, papers, documents or reports for a minimum of 3 years and shall make them available to the City upon request. Such records shall include all phone, email and other communications involved in preparing for, scheduling and coordinating the inspections and providing the report. This period may be extended upon written request by the City. The cost for compliance reviews does not include any follow-up re -inspection or review of any supplemental documents provided to address or contest any findings of non-compliance, nor does it include any assistance with the appeal of any enforcement action by the City. Any costs associated with such additional services would be billed at HdUs hourly rate. 8 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 Technical Assistance and Subject Matter Expertise HdL shall provide a total of up to 30 hours of general consulting in the form of subject matter expertise and/or technical assistance for each year of the contract. This expertise will be provided to City staff upon request and may include assisting with interpretation of Sections 5.10 or 5.18 of the SBMC, monitoring changes to State laws and regulations, assisting with inquiries from cannabis businesses regarding the imposition of cannabis business taxes, understanding of the industry, participation in conference calls, responding to staff inquires via phone and email, reviewing staff reports to the City Council, or other issues to be determined. These hours may be used for any related services not otherwise contemplated by this proposal, excluding additional audits, compliance reviews, or support or assistance with any appeals. Any additional request shall be subject to the HdL hourly rate. Background Checks HdL shall provide supplemental background checks for principals of the business as part of the application process. In addition, HdL can also provide background checks for employees who will be working at the regulated businesses. This service includes an employee identification card designed by HdL with the City's logo which meets all State requirements. Plan Check Assistance HdL shall provide assistance with plan checks for proposed tenant improvements of cannabis facilities to ensure compliance with physical requirements of State and local law. This service shall be provided on an hourly basis as needed or requested by the City. HdL estimates that each plan check will take approximately 2.5 hours which includes any report that may be required. HdL shall provide the plan check report to the City no later than 10 business days from receiving the information or at a mutually agreed time period between the City and the Consultant. If desired, HdL staff can also accompany City staff on a pre -permit site inspection as a part of the plan check process. This additional service would take approximately 2 hours per inspection which would be billed at the HdL hourly rate. Involvement of City Staff HdL understands the value and costs associated with staff time and will make every effort to minimize the amount of City staff time necessary to carry out the objectives of this program. The City's role shall be to provide guidance on City -specific regulations and priorities and to communicate and enforce HdUs authority to conduct audits on the City's behalf if a business resists participating. HdL personnel will initially meet with designated City officials to review all service objectives and to develop a proposed timeline and schedule. HdL will work with the City to determine whether the City wishes for the compliance reviews to be unannounced or to be pre -arranged with the business. If the latter, then City staff will be requested to communicate with the business in advance. HdL requests that City staff also participate in a kickoff meeting to establish audit processes and priorities. HdL requests that the City identify a staff member to serve as the primary contact for HdL staff and who will be available to answer occasional questions about specific audit concerns and assist with invoicing and collection activities after audit reports are issued. 9 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 Based on HdL staff's vast experience of conducting over 16,000 cannabis audits and compliance inspections, we expect cumulative City time required for financial and audits and compliance reviews combined to be on average no more than one hour per business. Any direct participation by City staff in the audits or compliance reviews is not anticipated by this proposal and would be in addition to the time stated here. D. STAFFING Staff Bios Our team of professionals has over 46 years of direct experience establishing and implementing medical and adult -use cannabis regulatory and taxation programs which include establishing land -use regulations, permit processes, staffing plans, cost recovery fees, structuring cannabis business tax fees, regulatory compliance, business license tax audits and law enforcement training. Our team has conducted over 16,000 cannabis compliance inspections and investigations in Colorado, California and Nevada. Bios for all HdL staff who may be involved in providing services under this proposal are provided below. Complete resumes are provided in Attachment 1. HdL will notify the City for approval if any personnel changes are needed during the project. David McPherson Cannabis Compliance Director David McPherson works with local agencies to prepare them to mitigate regulatory issues surrounding Proposition 64. Prior to joining the firm, David served 28 years in local government for the County of Orange and the cities of Newport Beach, San Jose and Oakland. David's experience as a law enforcement officer, compliance auditor, and tax administrator has provided him a wealth of experience that makes him uniquely qualified to lead Hdl.'s Cannabis Management Program. While working for the City of Oakland, he became the first Tax Administrator in the Country to successfully tax, regulate and audit medical marijuana businesses. David has over 10 years of experience working with Cannabis regulatory programs. He worked closely with the League of Cities and lobbyists on the development of the Medical Cannabis Regulation and Safety Act (MCRSA) and helped shaped SB94, the Medicinal and Adult -Use Cannabis Regulation and Safety Act (MAUCRSA). David provides technical support on cannabis -related matters to the League of Cities, the Police Chief's Association, Rural County Representatives of California, and the California State Association of Counties. In addition, David is working collaboratively with the Department of Consumers Affairs, Department of Food & Agriculture, Department of Health Services and the California Department of Tax and Fee Administration (previously known as the State Board of Equalization) on the implementation of best practices for regulating the Cannabis Industryfor local agencies. David received his Bachelor's Degree in History from California State University, Fullerton and his Master's Degree in Public Administration from California State University, Long Beach. While at Long Beach, he was named "Future Urban Administrator of the Year". 10 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 Matt Eaton, Cannabis Compliance Manager Matt Eaton is a Cannabis Services Manager at HdL and plays a critical role in implementing the Cannabis Compliance Program for local agencies. Prior to joining the firm, he was a progressive law enforcement professional with 29 years' experience conducting criminal/regulatory investigations and corporate/individual background investigations. While working as a Supervisory Investigator at the Colorado Department of Revenue in the Marijuana Enforcement Division (MED) Matt managed Criminal Investigators and civilian staff in the Denver Metro and Longmont Field Offices. During his six-year tenure at the MED, he conducted approximately 10,000 criminal investigations and compliance reviews which included regulatory and financial investigations. In addition, he is a subject matter expert on track and trace systems. He understands the complexity of reviewing data to ensure businesses are in compliance with state and local regulations. Matt was also responsible for planning, developing and implementing report and field inspection protocols for the agency. Matt received his Bachelors of Science Degree from Biola University and currently maintains a Colorado Post Certificate. He has also served as an Adjunct Instructor teaching law enforcement principle related to criminology, correctional processes, procedural law, interviews, interrogations and criminal evidence at AIMS Community College in Greeley, Colorado. Billie jo Naysmith, Cannabis Compliance Manager Billie jo Naysmith is a Cannabis Services Manager at HdL and plays a critical role in implementing the Cannabis Compliance Program for local agencies. Prior to joining HdL, Billie-jo spent over 23 years in Colorado law enforcement. She served a5 a Supervisory Criminal Investigator at Colorado's Marijuana Enforcement Division (MED) where she managed criminal and civilian investigations in the Denver and Longmont field offices. During her tenure with the MED, Billie-jo conducted over 5,000 regulatory and compliance reviews. Most recently, Billie-jo served as a Criminal Investigator II with the Colorado Attorney General's Office where she conducted complex financial fraud investigations involving cannabis businesses. Billie-jo earned a Bachelor of Science degree in Business Administration from Colorado Christian University. Tim Cromartie, Cannabis Senior Advisor Tim Cromartie is a Senior Advisor at HdL. His primary role isto address cannabis regulatory and tax policies at the state and local municipalities. Tim will also be assisting in the implementation process with the local agencies. Prior to joining the HdL team, Tim served as the legislative representative covering public safety issues for the League of California Cities with an emphasis on shaping legislation governing state and local regulation of marijuana. He has been actively involved in educating cities on changes in the law resulting from the Medical Cannabis Regulation and Safety Act, as well as Proposition 64, the Adult Use of MarijuanaAct. 11 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 When these two Acts were merged into a single regulatory structure in 2017, Tim successfully advocated for clarification of local government's regulatory and enforcement authority in the cannabis context, and for related environmental safeguards in cultivation operations, protections against over -concentration of businesses, regulation of testing labs, and the inclusion of fire safety standards and a definition of volatile solvents in state law governing cannabis manufacturing operations. Since then he has been engaged in educating local governments on the more recent Medical and Adult Use Cannabis Regulation and Safety Act (MAUCRSA), as well as advocating for a reduction in the cumulative state tax rate for cannabis, improvements in the state's track- and- trace program, and the restoration of a statewide cultivation cap. Furthermore, Tim served on the State Treasurer's Banking Advisory Group addressing cannabis business banking issues and establishing banking recommendations. He has a Bachelor of Arts degree in Political Science from the University of California at Berkeley and a degree from Hastings College of the Law. Kami Miller, Cannabis Senior Auditor Kami Miller is the Cannabis Senior Auditor at HdL. Her primary role is to ensure cannabis compliance and identify the risk assessment in the supply chain process of each permitted business. Kami has also played a major role in reviewing applications, facilitating applicant interviews, and conducting background checks. Prior to joining the firm, she served three years as a Marijuana Compliance Manager for the Department of Public Behavior and Health (DPBH) for the State of Nevada. During this time Kami played a key role in Nevada's implementation of its Medical Marijuana Program in which she was responsible for statewide monitoring of medical marijuana facilities that included cultivation, production, testing labs and retail stores. While working as a Marijuana Compliance Manager for the DPBH for the State of Nevada, Kami managed compliance auditors and support staff in their Las Vegas Office. During her three-year tenure at the DPBH, she conducted approximately 1,000 compliance and financial inspections in which she developed the documentation for the inspection protocols in order to establish comprehensive reports. In addition, her experience in Nevada provided her the opportunity to learn the various track and trace systems that allowed her to develop industry chain practices for the Department of Taxation. Kami received her bachelor's degree in Business Administration in E -Commerce and Supply Chain Management from Tennessee State University. Mark Lovelace, Cannabis Policy Advisor Mark Lovelace is the Cannabis Policy Advisor at HdL. His primary role is to provide fiscal analysis, and technical research for local agencies. In addition, Mark will be reviewing Performa plans of cannabis applicants to ensure their sustainability in the local jurisdiction. Furthermore, he will be involved in the analytical review of financial audit information from the HdL CATSTm program to analyze TARR summary reports. Mark Lovelace has 16 years of broad experience in public policy, community engagement and advocacy and is recognized as a leader in advancing the statewide discussion of medical and adult -use cannabis as a policy issue in California. 12 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 Mark served on the Humboldt County Board of Supervisors from 2009 through 2016, where he was instrumental in developing a comprehensive approach to regulating cannabis, including a voter -approved tax on commercial cultivation and an innovative track and trace pilot program. Mark established and co-chaired the Medical Marijuana Working Group for the California State Association of Counties (CSAC) and helped draft CSACs legislative platform for cannabis issues. Mark pioneered the first-ever six -county regional summit on cannabis issues in 2015, which resulted in the North Coast Counties Marijuana Policy Statement. His work and input were pivotal in guiding the development of SB 643 and AB 243, two components of the Medical Cannabis Regulation and Safety Act (MCRSA). Mark has worked extensively with public agencies and statewide associations on cannabis issues, including CSAC, Rural County Representatives of California (RCRC), the Association of California Water Agencies, the North Coast Resource Partnership, California Department of Fish and Wildlife, the State Water Board, the North Coast Regional Water Board, the Bureau of Cannabis Control, State legislators, the Department of Justice, Members of Congress and others. Mark received his Bachelor of Science Degree in Industrial and Product Design from California State University, San Jose. Prior to his time on the Board, he worked for many years as a respected advocate on land use, planning, development and environmental issues. Elizabeth Eumurian, Cannabis Senior Auditor Elizabeth Eumurian is the Cannabis Senior Auditor at HdL. Her primary role is to conduct business license tax audits, evaluate cannabis applications and conduct background checks. As part of the audit program, she will be conducting and preparing analytical information through the CATS'" program to prepare Tax Analytical Remittance Reports (TARR) summaries to evaluate under reporting or anomalies in the remittance of tax payments to local jurisdictions. Elizabeth previously worked for a large financial institution analyzing data for reporting anomalies and performing business license tax audits. She has also worked as a senior auditor in the entertainment industry. In this role, Elizabeth executed testing procedures for targeted audit programs, analyzed findings and prepared audit and compliance reports. She earned her Bachelor of Arts degree in History from California State University, Fullerton. She has also received a certificate in CannaBusiness from Oaksterdam University. Alfredo Marquez, Cannabis Senior Auditor Alfred Marquez is a Cannabis Senior Auditor at HdL. His primary role is to conduct business license tax audits, evaluate cannabis applications and conduct background checks. Alfredo previously worked for a publicly traded corporation as a Senior Internal Auditor where he performed risk assessments of new business acquisitions, financial and Sarbanes & Oxley audits. He also conducted compliance audits in the areas of government contracts, export and import activities, and general information technology controls. In these roles he worked with people at various levels within the organization across North America, Latin America, Europe, and Asia in order to meet organizational objectives. 13 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 Michelle Shaw, Cannabis Compliance Inspector Michelle is a Cannabis Compliance Inspector at HdL and is tasked with conducting onsite inspections, examinations and other actions to monitor compliance with established standards for local licensed cannabis businesses. Prior to joining HdL, she was a Compliance Specialist Officer at a large, multinational bank where she managed, validated and oversaw the effectiveness and accuracy of numerous compliance issues within the consumer retail space. Throughout her eight years of experience at the bank, she performed onsite assessments of affiliate businesses to determine compliance/non-compliance of their processes and procedures pursuant to bank standards and state regulations. A graduate of Cypress College, Michelle holds a Foundations of Banking Risk certificate from the Global Association of Risk Professionals and a paralegal certificate from the Southern California College of Business and Law. E. QUALIFICATIONS 1. Company Capability and Key Staff Founded in 1983, HdL Companies is a consortium of three companies established to maximize local government revenues by providing a variety of audits, analytical services and software products. Hinderliter, de Llamas & Associates (HdL) provides tax administration services for sales, use and transaction taxes, economic development consulting and programs for regulating and taxing medicinal and adult -use cannabis. HdL Coren & Cone provides audit and information services related to property taxes. The third affiliated company, HdL Software was formed in 1996 to provide innovative software processing tools for other city revenues and tax administration services. HdUs systematic approach to revenue management and economic data analysis is currently utilized by over 500 agencies in six states. HdL is a California S -Corporation, incorporated in 1985 and is a 100% employee owned company. The firm's headquarters are located at 120 S. State College Blvd., Suite 200, Brea, CA 92821 with additional offices located in Pleasanton and San Dimas. Over 50 employees work out of the Brea headquarters, with over 150 employees nationally. HdL Companies is a Corporate Partner of the League of California Cities and California State Association of Counties and works extensively with the State Association of City Auditors, California Society of Municipal Finance Officers (CSMFO) and California Municipal Revenue and Tax Association (CMRTA) on anticipation and planning of programs to strengthen local government revenues. HdUs Cannabis Management services are led by David McPherson, who is one of the state's most recognized experts in cannabis policies, regulations and taxation strategies. When Mr. McPherson was the Revenue & Tax Administrator in the City of Oakland, he became a pioneer by being the first person in the Country to tax, regulate and audit the cannabis industry. He uses his experience and understanding of horticulture, processing and dispensary operations to assist local and state agencies with developing cannabis policies for regulatory compliance, auditing and economic development. 14 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 Another key member of the team is Matt Eaton, Cannabis Compliance Manager, who's previous experience as a Supervisory Criminal Investigator with the Colorado Department of Revenue in the Marijuana Enforcement Division (MED) provided him the opportunity to conduct thousands of criminal investigations and compliance audits of marijuana -related businesses. 2. Technical Capability Hinderliter, de Llamas and Associates is proud to have served local governments and special districts for over 35 years. During that span of time, HdL has grown from one employee to over 150 employees. In 2007, HdVs employees purchased the corporation from the founding partners and the company is now 100% employee owned. This structure provides every employee a personal investment in serving our clients. Rather than focusing on short-term quarterly profits to appease investors, our employee -owners believe in a long-term strategy of continually investing in new technology, databases and service upgrades to support our client's needs for precise auditing, budgeting and economic information. This approach has led to the steady long-term growth, financial stability, capacity and resources that the City of San Bernardino requires from its vendors. In 2015, HdL established a cannabis services division with expert staff that works closely with the Department of Consumer Affairs, Department of Food and Agriculture, Department of Public Health and the California Department of Tax and Fee Administration (formally The State Board of Equalization) in the implementation of the Medical Cannabis Regulatory and Safety Act (MCRSA) and Proposition 64 Adult Use Marijuana Act (AUMA) and most recently SB 94 Medicinal and Adult -Use Cannabis Regulation and Safety Act (MAUCRSA). In addition, our staff has partnered with the League of California Cities, CSAC, RCRC and California Police Chiefs Association to develop policy and regulatory strategies to manage the Cannabis Industry in California. We offer the resources and expertise to assist cities and counties with the design and implementation of all aspects of their regulatory and taxation policies and programs. Of interest to the City of San Bernardino is our knowledgeable team of professionals who have direct experience establishing and implementing cannabis management programs for both medicinal and adult -use. Our team has over 46 years of experience developing and managing cannabis regulatory and taxation programs. Additionally, our team has conducted over 16,000 cannabis compliance inspections and investigations in Colorado, California and Nevada. What Differentiates HdL from Others? • HdL is the only firm with staff that have significant government cannabis regulatory experience and taxation policy expertise in the implementation and development of cannabis management programs at the state, county and local level. • HdL cannabis team members have previous law enforcement experience and the capability to conduct background checks to thoroughly evaluate the quality of applicants. 15 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 f HdL is the only company that has developed proprietary software to review confidential financial and management inventory data information for cannabis businesses in California. HdL staff have completed specialized training and have expertise in cannabis horticulture practices, manufacturing, dispensary management, odor mitigation, land use issues and regulatory compliance. • HdL has been recognized as the industry leader in developing and implementing cannabis management programs for local governments throughout California having partnered with over 125 jurisdictions to date for cannabis policy development and program management. 3. Local Experience HdL was retained by the City of San Bernardino in 2017 to assist with the development and implementation of a regulatory and taxation program for commercial cannabis businesses in the City. Prior cannabis -related services provided the City have included review and analysis of the citizen initiative Measure O, development of a new cannabis regulatory ordinance, design and implementation of a merit -based application review and selection process, conducting application reviews, site inspections and interviews, and developing a cannabis tax measure (Measure W) which was approved by the City's voters on November 6, 2018. Over the past three years, HdL has partnered with over 125 California agencies on cannabis -related consulting projects. Our experience includes ordinance development and review, community outreach, merit -based application development, permitting processes, cost recovery studies, fiscal analysis, regulatory/financial compliance reviews and law enforcement training. Our staff has reviewed, scored and processed over 1,800 cannabis business applications in the last three years. HdL has been recoanized as an industry leader, providing government solutions by industry professionals. City of Desert Hot Springs Proiect Description: HdL currently provides Cannabis Auditing and Consulting services. Contract Amount: Not to Exceed $30,000 Dates: October 2016 —June 2019 (Contract extension pending) Contact: Linda Kelly, Finance Director Phone: 760.329.6411 Ext 289 Email: l kei ly0cityofdhs.com City of Mammoth Lakes Proiect Description: HdL currently provides Cannabis Auditing and Consulting services. Contract Amount: Not to Exceed $16,000 Dates: January 2018 — December 2020 Contact: Rob Patterson, Finance Director Phone: 760.965.3661 Email: rpatterson@townofmammothiakes.ca.gov 16 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 City of Modesto Project Description: HdL currently provides Cannabis Auditing and Consulting services. Contract Amount: Not to Exceed $1,164,250 Dates: July 2018 —July 2020 with optional 3 -year extension. Contact: Steve Mitchell Phone: 209.577.5287 Email: smitchell@modestogov.com City of Perris Project Description_: HdL currently provides Cannabis Auditing and Consulting services. Contract Amount: Not to Exceed $200,000 Dates: May 2017— May 2019 (Contract Extension Pending) Contact: Clara Miramontes, Assistant City Manager City of Perris Phone: 951.943.5003 Ext 272 Email: cmiramontes@cRyofperris.orp City of Vallejo Proiect Description: HdL currently provides Cannabis Auditing and Consulting services. Contract Amount: Not to Exceed $270,000 Dates: October 2017 —June 2020 Contact: Joanna Altman, Assistant to the City Manager Phone: 707.648.4362 Email: Joanna.altman cit ofvalle'o.nei 4. Financial Stability HdL has the staff and financial resources to assist the City with this project. HdL has been in business for over 35 years. The firm will be happy to provide our latest financial statements upon request. 17 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 F. FEE PROPOSAL Cost Proposal for Financial Audits and Operational Audits HdUs rates for financial and compliance reviews would be billed per cannabis business. The total cost would depend upon the number of cannabis businesses being audited and reviewed, and the number of reviews being performed annually for each business. This proposal anticipates one financial audit per year and one compliance review per year for each cannabis business, as stated in the RFP. Vertically integrated businesses operating multiple licenses or permits under the same business name at the same location shall be considered a single business for purpose of inspections and audits. Objective 1: Conduct Annual Financial Audits HdL shall conduct one (1) financial audit annually for each permitted cannabis business at a rate of $6,000 each. Objective 2: Conduct One Annual Compliance Review HdL shall conduct one (1) compliance review for each permitted cannabis business at a rate of $1,250 per review. Objective 3: Background Checks HdL shall provide supplemental background checks for principals of the business as part of the application process. In addition, HdL can also provide background checks for employees who will be working at the regulated businesses. The cost to provide this service is $300 per person for management staff and $150 per person for line staff. Price includes an employee identification card designed by HdL with the City's logo which meets all State requirements. However, should the City desire to conduct annual background checks HdL will only charge $150 per person for Management staff and $100 per person for line staff. Objective 4: Technical Assistance and Subject Matter Expertise HdL shall provide a total of up to 30 hours of general consulting in the form of subject matter expertise and/or technical assistance at no charge for each year of the contract. Any additional request shall be subject to the HdL hourly rate. The proposed services are broken down into specific line items in the cost table below. Some of these services may include both fixed costs for developing and initiating each of the various components of the program and variable costs based on the number of applicants or businesses. HdUs fees are based on time, materials and travel -related expenses associated with the execution of the services. The cost for the services outlined in this proposal does not include any follow-up re -inspection or review of any supplemental documents provided to address or contest any findings of non- compliance, nor does it include any assistance with the appeal of any enforcement action by the City. Any costs associated with such additional services would be billed at HdL's hourly rate. 18 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 All costs under objectives 1, 2 and 3 of this proposal may be borne by the cannabis business as a part of their initial or annual permit cost. The hours and costs in the table below do not include any additional items that are not contemplated by this scope of services. Prices are valid for 180 days from July 17th, 2019. Scope of Service Objectives Estimated Cost Objective 1: Conduct annual financial audits of all licensed $6,000 per cannabis businesses'. permittee Matt Eaton per year Objective 2: Conduct up to 2 regulatory compliance reviews $1,250 per annually for each cannabis business, as desired by the City, to permittee ensure ongoing compliance with State and local regulations'. per year Objective 3: Provide plan check assistance $250 per hour; Cannabis Policy Advisor estimate 2.5 hours Kami Miller per business Objective 4: Provide up to 30 hours of technical assistance or No chargee subject matter expertise, to be used as needed by the City. $195 TOTAL $7,875 per $195 permittee Business Application Reviewer per year 'Costs may be borne by each cannabis business Cannabis Compliance Inspector 'Provided at no charge only in combination with Objectives 1 and 2 Additional Costs For additional work that is not covered in the City's RFP, those services would be provided on an hourly basis. HdL Staff Title Hourly Rate David McPherson Cannabis Compliance Director $300 Matt Eaton Cannabis Compliance Manager $250 Billie-jo Naysmith Cannabis Compliance Manager $250 Tim Cromartie Cannabis Senior Advisor $250 Mark Lovelace Cannabis Policy Advisor $250 Kami Miller Cannabis Senior Compliance Inspector $195 Elizabeth Eumurian Cannabis Senior Auditor $195 Alfredo Marquez Cannabis Senior Auditor $195 Teresa Schneider Business Application Reviewer $195 Michelle Shaw Cannabis Compliance Inspector $195 Additional Costs Rate Travel cost to the city associated with Objective 3 & 4 if needed $250 per day 19 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 G. INSURANCE HdL meets the City's insurance requirements. H. LITIGATION HdL does not have any past or pending litigation to report. I. OTHER INFORMATION Successful Cannabis Projects: HdL is recognized as the industry leader in the development, implementation and enforcement of cannabis management programs for local governments throughout California. We have partnered with over 125 California cities and counties on cannabis -related programs, including ordinance development and review, community outreach, merit -based applications and permitting processes, cost recovery studies, regulatory compliance reviews, financial audits, fiscal analysis and law enforcement training. Community Involvement: HdL has an HdL Cares team that works in the Southern California area supporting walks, community organizations and the local community. Recent events include donating personal hygiene bags for homeless, providing school supplies and shoes for underprivileged children and donating holiday gifts to children at local foster agencies. Previous Involvement with the City: HdL has been a provider of sales and use tax audit and management services since 2010. The firm began providing cannabis services in 2017 and provided economic development services in 2017. Conflicts of Interest: HdL does not have any conflicts of interest to report. J. APPENDICES Exceptions: HdL would like to have the word federal law as it relates to cannabis removed from page 3 of the City's Professional Service Agreement since cannabis is only legal through state law. 20 Proposal for Cannabis Monitoring and Financial Audit Services RFP NO. F-19-53 July 17, 2019 Appendix 1— Staff Resumes 21 David McPherson Hinderliter, de Llamas & Associates - Cannabis Compliance Director. 2015 - Present ■ Currently working on implementation and regulatory requirements for Prop. 64 with local agencies to prepare them to mitigate several issues surrounding the ballot measure. Continues to provide technical support to the League of California Cities, the Police Chiefs Association, Rural County Representatives of California and the California State Association of Counties. Also, currently working collaboratively with the Department of Consumers Affairs, Department of Food & Agriculture, Department Health Services and the State Board of Equalization on implementing best practices for regulating the Cannabis Industry. City of Oakland - Revenue & TaxAdministrator: 2010-2015 ■ Implemented several programs to assist with generating revenue for the City, and implemented policies and procedures for audit functions to ensure the proper application of business tax classifications assessments. Managed the revenue collection, payment processing and appeals for parking administration. Prepared oral and written reports to City Council/Finance Committee to make recommendations on business tax and other revenues in order to ensure accurate revenue forecasting. Conducted presentations and training to professional organizations such as NBBLO, CSMFO, CMRTA, GRCA, and CMTA. Also conducted administrative oversight for Board of Review Hearing appeals for Business, Uniform Transient Occupancy, and Parking Taxes. Successfully passed Ballot Measures F and V for the Cannabis Business Tax which generated millions for the City. Worked closely with the League of California Cities and lobbyists on the development of AB 243, SB 243 and AB 266 which established the Medical Cannabis Regulation and Safety Act (MCRSA). City of San Jose - Deputy Director: 2006-2010 ■ Created a revenue collection strategic plan which assisted in generating revenue for the City. Implemented a new business tax system which manages billing and collections for the City's accounts, and a policy and procedures to ensure bad debt write-offs are properly reserved. Also implemented an in-house program saving the City additional costs on consulting fees. Conducted presentations throughout the country on revenue enhancement strategies, and coordinated technology changes with other agencies and departments. Responded to inquires and complaints from customers and City Council. City of San Jose - Senior Revenue Auditor: 1997 - 2006 ■ Successfully generated new revenues for the City resulting from auditing sales and business taxes. Designed and implemented several programs. Conducted training for various municipal organizations for revenue enhancement strategies, and coordinated technology changes with other agencies and departments. Planned and prepared budget for Revenue Audit Unit, and evaluated the efficiencies and effectiveness of revenue collections and made recommendations to streamline many processes. Served as a Technical Advisor for the League of California Cities on Revenue and Taxation issues. City of Newport Beach - Revenue Technician: 1993-1997 ■ Analyzed and evaluated City's sales tax revenue for misallocation. Administered City's transient occupancy tax program and implemented revisions to the trainset occupancy tax ordinance. Reviewed and designed a variety of revenue collections forms, and analyzed miscellaneous revenue receivables. Developed a strategy to consolidate the collection efforts. Implemented changes to various tax laws, and business improvement district fee system. Recommended and assisted in the implementation for Revenue Division policies and procedures, and responded to complaints and request for information from the public and other departments. Planned and organized special projects and surveys and coordinated activities with private consultants. City of Newport Beach - License Inspector. 1989 -1993 ■ Designed sales tax misallocation program which generated revenue. Implemented City's sales tax self -accrual program. Performed inspections for compliance with business tax and regulatory permits. Created reports for the enforcement of business tax. Investigated complaints from the public and other agencies. Coordinated business tax enforcement strategy by utilizing Fire Department Staff. Enforced the collections of delinquent revenues and issued citations in the field. 56 Education ■ Master of Public Administration - California State University, Long Beach 1993 ■ Bachelor of Arts, History - California State University, Fullerton Professional ■ California Municipal Revenue & Tax Association ■ Certified Revenue Officer ■ Certified Licensing Official ■ National Bureau of Business Licensing Officials ■ Government Revenue Collection Association ■ California Society of Municipal Finance Officers ■ California Public Parking Association ■ Government Finance Officers 1986 57 Matt Eaton Hinderliter, de Llamas & Associates - Cannabis Compliance Manager: 2017 - Present ■ Assist agencies and law enforcement with community outreach and education. Provide technical matter expertise for Marijuana regulation and application processes. "Rule Maker' for MSRCA and Proposition 64. Assist with compliance audits. Assist in the development of track and trace systems. Department of Revenue, Colorado - Criminal Investigator II: 2011-2016 ■ Conducted complex criminal and regulatory investigations for the Medical Marijuana Enforcement Division, Denver Metro and Longmont Field Offices. Planned, conducted and supervised regulatory investigations as they relate to the Colorado Marijuana Code. Conducted professional financial investigations which included experience in financial auditing and accounting. Prepared background investigations of companies and individuals to determine suitability for licensure. Responsible for recommending modifications to current regulations and identify needs for new legislation. Supervised project management responsibilities for development for new area field office. Assisted with the planning, development and implementation of report writing standards and field inspection protocols. Berthoud Police Department, Colorado - Patrol Offlcer: 2007-2011 ■ Patrolled town to enforce laws and local ordinances, prevent crime, and arrest violators. Addressed neighborhood issues by working with community to reduce crime potential. Secured grants, drafting and submitting grant requests for patrol equipment, vehicles and communication upgrades. Implemented improvements in securing and processing evidence, researched and audited current evidence inventory procedure, purged unnecessary items, and redesigned evidence booking operations to meet current industry standards. Researched and audited current report management policies, identified deficiencies, redesigned investigative report outlines and developed standardized internal controls for report routing procedures. Montclair Police Department, Montclair - Technical Services Offlcer: 2004-2006 ■ Supported department by overseeing budget, purchasing equipment, and managing fleet. Supervised civilian employees, volunteers and reserve officers. Conducted background investigations for employees. Ensured that new officers were properly equipped and trained on firearms. Conducted annual financial and equipment rental. Researched, wrote and managed multiple grants and associated funds requirements. Assisted in the development and implementation of general operation policies designed to reduce the number of citizen complaints received as a result of field contacts made by the civilian staff. Montclair Police Department; Montclair - Patrol Officer: 2002-2004 ■ Performed patrol responsibilities as well as field trained new and lateral officers. Taught advanced training courses and supervised tactical firearms training. Montclair Police Department, Montclair - Senior Detective: 1996-2002 ■ Managed caseload which included investigations into complex sexual and major physical assault crimes. Oversaw detective bureau budget, determining best use of resource allocations and monitoring expenditures. Assisted in development of countywide child abuse investigation protocol, writing protocol for first responders in order to provide consistent approach to child abuse investigations. Conducted multi -agency investigation into million dollar medical fraud investigation which lead led to the successful prosecution of several licensed dentists in four separate dental practices. Montclair Police Department, Montclair - Patrol Officer: 1989-1996 ■ Conducted community -oriented policing. Served as Field Training Officer, teaching and mentoring new officers, performed covert patrols. Created and implemented county's first sex registrant compliance enforcement effort, including developing prosecutable criteria for sex registration violations in addition to organizing compliance sweep to identify violators. Organized and executed Bait Car enforcement detail, conducted crime analysis of potential high crime areas throughout the city. Based on findings, requested and received grant funding for multi -agency Bait Car enforcement program which lead to a dramatic decrease in auto theft 58 AIMS Community College, Greeley Co & Everest College: 2006-2009 ■ Subjects taught: Correctional Process, Criminology, Procedural Law, Interviews and Interrogations, Introduction to Corrections, and Criminal Evidence Education ■ Bachelor of Science, Organizational Leadership - Biola University, La Mirada ■ Associates of Science, Administrative of Justice (Law Enforcement Option) Mt. San Antonio College, Walnut ■ Certificate of Completion, Basic Police Academy San Bernardino County Sheriffs Regional Training Center, San Bernardino ■ Colorado POST Certificate (2007) ■ California POST Instructor Certification (2000), Advanced (1999), Intermediate (1993), and Basic (1990) POST Certificates Professional Completed 2,000+ hours of training, including these selected courses: ■ Criminal Investigation ■ Securities Fraud Investigation ■ Regulatory Investigation ■ Canine Handler Course ■ Sexual Assault Investigation ■ Caine Narcotic Detection ■ Narcotic Interdiction Investigation ■ White Collar Crimes Investigation ■ Background Investigation ■ Grant Development ■ Advanced Gang Investigation ■ P.O.S.T. Train the Trainers ■ Grant Writing & Asset Procurement Training ■ Peer Support Counseling ■ Field Training Officer ■ Firearms Instructor's Course ■ Advanced FTO Training ■ STAR Supervisor Training 59 Billie-jo Naysmith Hinderliter, de Llamas & Associates - Cannabis Compliance Manager. 2019 - Present ■ Assist agencies and law enforcement with community outreach and education. Provide technical matter expertise for Marijuana regulation and application processes. "Rule Maker" for MSRCA and Proposition 64. Assist with compliance audits. Assist in the development of track and trace systems. Colorado Department of Law - Financial Fraud Unity Securities Fraud Investigator - Criminal Investigator II: 2017-2019 ■ Identify and investigate allegations of criminal conduct as set forth in the Colorado revised statutes ■ Conduct document -intensive insurance investigations that include criminal elements of securities fraud ■ Work well with a legal team of paralegals and attorneys to successfully file criminal cases and try them in the appropriate judicial district ■ Prepare comprehensive reports of investigations, affidavits, warrants and suspect statements Provide testimony to the statewide grand jury as well as in the appropriate judicial district Colorado Department of Revenue - Marijuana Enforcement Division - Criminal Investigator Il: 2015 - 2017 ■ Supervise a team of Criminal and Compliance Investigators in the Longmont Field Office, Administrative and temporary staff in Longmont Field Office and a team of Criminal and Compliance Investigators in the Denver Field Office ■ Support and assist investigators with analysis of data ■ Conduct complex criminal investigations related to licensed marijuana businesses and complex regulatory investigations related to licensed marijuana businesses ■ Act as a subject matter expert in marijuana enforcement practices ■ Provide training for investigators, law enforcement agencies, and local licensing authorities Colorado Department of Revenue - Marijuana Enforcement Division - Criminal Investigator L• 2013 - 2015 ■ Work with other law enforcement agencies and local licensing authorities to collaboratively conduct investigations and form positive working relationships Recommend suitability for licensing with Marijuana Enforcement Division ■ Conduct due diligence inspections and investigations on licensed medical and retail marijuana businesses in the State of Colorado ■ Conduct complex financial and fraud investigations related to the regulated marijuana industry ■ Conduct complex regulatory investigations related to the marijuana industry Denver Civil Service Commission- Background Investigator: 2012 - 2013. ■ Conduct pre-employment background investigations for Denver Police and Fire Departments ■ Work independently from home, with little oversight ■ Interview applicants and personal, professional, military, and financial references ■ Investigate personal, professional and financial information ■ Thoroughly document all aspects of investigations and forward reports for review by the Board of Commissioners Education ■ Bachelor of Science Degree in Business Administration - Colorado Christian University 2016 Professional ■ Colorado P.O.S.T. - PID# 115513 60 Kami Miller Experience Hinderliter, de Llamas & Associates - Senior Auditor: 2017 - Present ■ Ensures cannabis compliance and identifies the risk assessment in the supply chain process of each permitted business. State of Nevada, DPBH -Medical Marijuana Compliance Auditor: 2014 - 2017 ■ Developed industry supply chain practices for the Department of Taxation. Tasked with the statewide monitoring of privately owned medical marijuana facilities including cultivation, production, labs and retail environments. Worked directly with federal agencies and technology vendors that met compliance standards. Document inspection findings and complete comprehensive reports which included details of compliance with laws and regulations, deficiencies regarding controls, procedures and operations, supporting facts and documentation and recommendations for corrective action. GMR Marketing - Marketing Manager: 2014 - 2016 ■ Marketing Manager for enterprise and consumer tech companies for tradeshows/conferences. Assisted with implanting grassroots and guerilla marketing strategies at events and led the team in Brand activations above 100% within the first quarter. Worked resulted in new projects during the economic downturn representing a small percentage of company turnover. Created auditing program. Lexmark - Supply Chain Analyst: 2010-2014 ■ Led global supply chain operations team. Created reports for technical documents, procurement and material regulations, FEA and audit reports. Also in charge of gaining visibility into its logistics operations and synchronizing product data. Education ■ Bachelors of Science, Business Administration, E Commerce and Supply Chain Program Tennessee State University 2010 61 Tim Cromartie Hinderliter, de Llamas & Associates - Cannabis Compliance SeniorAdvisor: 2018 - Present ■ Assists local and state governments with developing cannabis regulatory and tax policies and facilitates public policy engagement for elected officials, public safety groups and community stakeholders. League of California Cities - Legislative Representative: 2013-2018 ■ Lobbyist for Public Safety issues, including marijuana policy, Realignment, Corrections, emergency response, community policing, and unmanned aircraft systems. Lead staff on legislation co-sponsored with California Police Chiefs Association to establish statewide framework for medical marijuana regulation, SB 1262 (Correa, 2014) and AB 266 (Bonta), Chapter 689, Statues of 2015. Crafted regulations for ground emergency medical transport with Office of Emergency Services (OES) Task Force. Liaison to OES, Police Chief, League Fire Chiefs Department and California Fire Chiefs Association. Assembly Member Mike Davis- Capitol Director. 2011-2012 ■ Management and supervision of legislative staff, coordinating press activities and administration in Assembymember Davis' Capitol office. Crafting and guiding legislative bill package to advance Member's policy and political agendas. Responsible for major economic development legislation to incentivize private investment in small business in low- income area via tax credits. State Senator Gloria Romero - Legislative Director. 2007 - 2010 ■ Crafted and implemented Senator Romero's legislative agenda, in concert with the Senior Education Consultant. Supervised legislative staff; advised staff and Member on questions of legislative procedure; working closely with policy staff and lobbyists, crafted tactical strategy on bills. Planned and staffed the May 2007 Senate Public Safety Investigate Hearing on the San Quentin Death Chamber. Senator Kevin Murray, Democratic Caucus Chair- Consultant: 2005-2006 ■ Staffed technology legislation (computer spyware penalties, span, phishing and broadband access). Orchestrated negotiations re: Good Samaritan provision between anti-spyware companies and Consumer Attorneys for spyware penalties bill. Staffed resolution on Net Neutrality opposing concept of tiered access, means to finance capital outlay for fiber optic cable network Organized hearing promoting online child safety in coordination with Select Committee on Technology, Crime and the Consumer. Advised the Senator on Transportation; Banking, Finance & Insurance; and public pension funds. California Public Employees' Retirement Systems Office of Governmental Affairs - Legislative Analyst: 2003-2005 ■ Review, analysis and persuasive advocacy pertaining to legislation affecting CAPERS' retirement and investment programs. Consulted with in-house program specialist lobbyists, and legislative staff in analyzing effects of legislation. Drafted bill analyses for Ca1PERS' Board of Directors and the Governor's office. Assembly Member Gloria Negrete McLeod - Legislative Aide. 2002-2003 ■ Advised member on health, housing and public safety issues. Staffed Appropriations Committee, and bills on prison health care reform (Hepatitis C education in prisons), swimming pool safety and Medi -Cal reform Served as Interim Legislative Director. Department of Housing & Community Development - Housing PolicyAnalyst: 2000-2001 ■ Reviewed local jurisdictions' housing elements for compliance with state law requiring affordable housing construction; reviewed local redevelopment agency activity for same. Conducted fiscal policy research for effect on housing construction. Assembly Majority Leader Kevin Shelley - Floor Director. 1999-2000 ■ Provided analysis of political and procedural matters affecting legislation and the operation of Assembly Session. Liaison with Speaker's Office, SOMS, and individual Members' offices. Backup to Majority Leader during Session. Staffed Assembly Appropriations and Elections committees. Served as field representative and personal aide in the district during legislative interim. 62 State ControllerKathleen Connell -Legislative Associate. 1998-1999 ■ Tracked legislation affecting State Controller's Office. Coordinated efforts with legislative offices and others to lobby targeted legislation. Conducted budget reform research. Assistant to Deputy Controller for PERS and STRS, representing the Controller on these state employee retirement fund boards. State Senator Barbara Lee - District Representative. 1997-1998 ■ Field Representative for Ninth Senate District. Supervised district office. Monitored local political and community developments and facilitated state action to assist constituents. Coordinated political organization of African- American faith community. Planned series of town hall meeting re: CA Dept of Education grant programs implementing Ca1WORKS. Martin & Glantz Communications -Associate. 1996-1997 ■ Provided political consulting and communications strategies for two pilot sites for statewide anti -youth violence campaign, Resources for Youth, under a $6 million grant from the California Wellness Foundation. Supervised organizers of three downlink sites participating in statewide videoconference which capped the campaign. Assemblymember fulie Bornstein, Democratic Caucus Chair - Assembly Fellow. 1993-1994 ■ Responsible for housing public safety, public utilities issues. Staffed bills on judicial review of California Public Utilities Commission ratepayer decisions; mediation of real estate contract disputes; bond measure for juvenile day treatment centers; and reduction of utility rates. Education ■ Jesse M. Unruh Assembly Fellowship Program 1993 -1994 ■ University of California, Hastings College of The Law, J.D. 1992 ■ Bachelor of Arts, Political Science -University of California, Berkeley 1988 63 Mark Lovelace Experience Hinderliter, de Llamas & Associates - Cannabis Policy Advisor. 2017 - Present ■ Provides subject matter expertise on water conservancy, land use and CEQA issues related to cannabis cultivation and manufacturing. Performs outreach to policymakers, community groups, MMJ patients and cannabis business owners. Monitors and review state legislation and regulatory proposals. Project lead for projects in Northern California. Assist in the development of local cannabis regulatory programs. Humboldt County - 3^d District Supervisor. 2009-2017 ■ Board experience in all areas of local government including budget, land use, public safety, policy development, State and Federal legislation and media relations. Selected appointments include California State Association of Counties, National Association of Counties, Redwood Region Economic Development Commission, Workforce Development Board, First 5 Humboldt, North Coast Resource Partnership, Klamath Basin Coordinating Committee and Medical Marijuana Subcommittee. Regional and Statewide appointments include Founding Co -Chair for CSAC Medical Marijuana Working Group, Co -Chair for Coastal Counties Association, County Medical Services Program Governing Board, Redwood Coast Connect Broadband Consortium and Ocean Renewable Energy Protocols Team. Humboldt Watershed Council - President: 2003-2008 ■ Chief executive of 501(c)(3) environmental organization. Led successful efforts to protect water quality through improved regulation of timber management. Represented HWC in meetings and administrative hearings with local, State and Federal agencies, officials and elected representatives. Managed grants, budgets, committees, litigation, fundraising, media and contracts. Authored two successful appeals to the State Water Board. Healthy Humboldt Coalition - Project Coordinator. 2003-2008 ■ Developed a coalition of environmental and community organizations to achieve a conservation -oriented General Plan Update for the Humboldt Partnered with public health, affordable housing and transportation advocates. Managed contracts, consultants, media relations, budgets and grants. Organized and coordinated numerous workshops, forums and presentations. Sunnybrae/Arcata Neighborhood Alliance - Founder and Director. 2000-2006 ■ Led successful community effort to purchase and establish a 175 -acre community forest Worked closely with State and Federal agencies and numerous funding partners. Helped raised millions in funding and thousands in direct community donations. Design Link - Owner. 2001-2008 ■ Established design and product -development consultancy for small manufacturers. Developed high -efficiency production methods for clients around the country, and created graphics, training and promotional materials. Wildwood Company - Production Manager. 1989-2001 ■ Managed all aspects of production for a high-tech wood products manufacturer. Increased output by 500% while improving both quality and consistency. Trained employees, developed standardized processes and operations manuals. Education ■ Bachelor of Science, Industrial and Product Design- San Jose State University, San Jose 1987 64 Selected Accomplishments ■ Guided development of the first MMRSA compliant cannabis regulation program in California, including a cannabis excise tax and a pilot track -and -trace program ■ Initiated first of its kind six -counties regional cannabis policy summit ■ Developed successful strategy for passage of public safety sales tax initiative ■ Obtained permanent protection of over 100,000 acres of working lands, including 3 community forests ■ Advanced largest dam removal project in history ■ Secured Federal recognition of 1959 water rights contract ■ Facilitated tri -county broadband deployment project Selected Events, Presentations, and Speaking Engagements ■ "Health Impact Assessments for Better Planning", National Association of Counties, Washington DC ■ Coastal Commission joint Workshop with Coastal Counties and Cities, San Francisco ■ "The Emerging Cannabis Labor Market", Workforce Development Board, Eureka, ■ "Regulating Legal Cannabis", California Association of Counties, Sacramento ■ "Environmental Impact of Marijuana Cultivation", Association of California Water Agencies, South Lake Tahoe ■ "What to Expect from Cannabis Legalization", California Growers Association, Eureka ■ 'RePower Humboldt", University of California, Davis ■ Guest lecturer, Humboldt State University, 2001- Present 6S Elizabeth Eumurian Hinderliter, de Llamas & Associates - Senior Analyst 2017 - Present ■ Develops revenue models for cannabis industry taxation. Analyzes accounting information, sales tax allocations and business license data for compliance programs. Executes testing procedures for targeted audit programs, analyzes findings and prepares audit and compliance reports. Nigro, Karlin, Segal & Feldstein, LLC - Senior Auditor: 2014-2016 ■ Complied, manipulated and analyzed data as part of a targeted audit program to ensure compliance with pre- established rules and regulations. Drafted audit reports by identifying and gathering support for potential issues. Supported client efforts to collect on report findings by analyzing auditee responses. Assisted in developing and executing testing procedures for new testing areas. Also, assisted management with planning activities, such as assignments and budgets projections. Prepared reports and updates for regular status meeting with clients. ECCU - Fulfillment Representative: 2013-2014 ■ Reviewed various financial reports for inaccuracies or anomalies and make recommendations regarding further action. Performed monthly audits of department work to ensure minimum 95% QC and 98% SLA rates. Prepared various written communications such as letters/emails, policy and procedure change notifications and recommendations. Richard Nixon Presidential Library and Museum - Museum Technician: 2011-2012 ■ Created and maintained records using MS Access -based database software. Standardized record data to adhere to the workplace guidelines. Designed queries and created reports for use in analyzing data, and assisted in mapping data for transfer to an updated database. Education ■ Bachelors of Arts, History - California State University, Fullerton 2010 ■ Associates of Art, History and Liberal Studies - Santiago Canyon College, Orange 2007 W Alfredo Marquez Hinderliter, de Llamas &Associates - SeniorAuditor: 2018 - Present ■ Ensure adequate resource planning to meet contractual obligations for business application reviews, audits and inspections of cannabis operations in our client communities throughout California. ■ Initiate and develop presentation materials and works with clients to ensure the delivery of program services. Los Angeles County Metropolitan Transportation Authority -Senior Auditor: 2017 - 2018 ■ Examine, verify, analyze, and evaluate organizational procedures and perform financial, operational, compliance, and IT audits to the extent necessary and sufficient. ■ Obtain and analyze accounting records, systems data, background information, management reports and all other document necessary to execute audits. ■ Interview departmental management and personnel ■ Review, analyze, monitor and audit internal controls, relating to information systems and/or procedures. Document audit findings and compile and organize work papers in accordance with audit guidelines. ■ Respond to supervisory and quality assurance review notes. ■ Follow up on audit recommendations to ensure corrective actions are taken. Teledyne Technologies Incorporated - Senior Internal Auditor: 2008-2016 ■ Participate and contribute in the annual risk assessment process to identify business risk associated with domestic and international Strategic Business Units (SBU's). ■ Plan nature and scope of audit for SBU's based on the results of the strategic audit plan. ■ Prepare electronic audit work -papers using audit software (Teammate). ■ Request audit documents from SBU's. ■ Review internal controls and financial documents/transactions for accuracy, completeness and compliance with management established policies and procedures based on GAAP. Oppenheimer Group - Divisional Financial Accountant: 2006-2007 ■ Audit cash advance and settlement wire payment requests to International Clients. ■ Prepare journal entries as necessary. ■ Prepare and provide summary analysis of Cash Flow reports to the Controller. ■ Create and Analyze At -Risk reports and provide summary analysis to management. ■ Prepare Annual Operating Plan and Forecast updates. ■ Manage assigned accrual accounts for accuracy and minimizing risks to the company. Vulcan Materials Company - Accounting Clerk III: 2004-2006 ■ Audit account adjustment forms for proper management approvals and accuracy. ■ Reconcile production reports to ensure sales are invoiced and posted to income statement. ■ Ensure regional sales are accumulated and posted to P&L statement at month end closing. ■ Maintain rapports with Billing Team Members, internal, and external customers. ■ Engage in various projects as requested by management to meet company objectives. Education ■ Bachelor of Science, Accounting -University of La Verne, California 2003 67 Michelle Shaw Experience Hinderliter, de Llamas & Associates - Auditor, Cannabis Management Services. 2019 - Present ■ Develop a thorough understanding of California cannabis policy reforms and business regulations for all types of commercial cannabis enterprises with respect to business operations, security and compliance procedures. Research regulations by reviewing regulatory bulletins and other sources of information. ■ Review and rate cannabis -related license application materials and oral interviews. ■ Plan, identify and define audit scope and criteria for each compliance inspection. ■ Conduct on-site inspections, examinations and other actions to monitor compliance with established standards for local licensed cannabis enterprises. Observe activities for compliance deficiencies. ■ Review and analyze information, document findings, and communicate recommendations for improvement and corrective action regarding compliance risks with respect to State and local regulations. ■ Follow up with business enterprise on corrective action plans and report final audit results to the client. ■ Ensure quality of service by enforcing standards, managing interactions, and reporting progress and issues. ■ Prepare responses to client periodic compliance requests and certifications. ■ Support the implementation of new compliance program requirements. Bank ofAmerica - Offlcer, Compliance Specialist 2010 - 2019 ■ Managed Third Party Affiliate and Vendor compliance processes for bank ■ Monitored risk and compliance assessments, reviews and reporting ■ Provided independent compliance oversight of vendors and third party affiliates ■ Thoroughly tested scripts, processes and procedures relating to Dodd -Frank Act; UDAAP (Unfair, Deceptive, Abusive Acts or Practices); HIPAA Privacy Rule; AML (Anti -Money Laundering); SCRA (Service Member Relief Act); ADA (American with Disabilities Act); Regulation Z (Truth in Lending-TILA); and RESPA (Real Estate Settlement and Procedures Act). CPS Insurance Services - Senior Licensing Specialist 2003 - 2010 ■ Oversaw application, management and acquisition of insurance licenses for thirty agents/corporations throughout all fifty states ■ Designed organizational structure to monitor expiration of business and insurance licenses for corporate agents/partners ■ Developed excellent working relationships with government agencies and personnel Education ■ Associate of Arts in Liberal Studies - Cypress Junior College 1992 ■ Certificate in Paralegal Studies - Southern California College of Business & Law 1993 68