HomeMy WebLinkAboutR-2020-105 CARES Act Funding for Small Business Grant Program to Address COVID-19 - Agreement with YCDAA RESOLUTION RESOLUTION NO. R-2020-105 authorizing an agreement with Yakima County Development Association (YCDA) in the amount of One Million Dollars ($1,000,000.00) in CARES Act grant funds to provide grants to small businesses affected by COVID-19. WHEREAS, YCDA is a non-profit service provider that provides, in part, business planning and grant opportunities to small businesses in Yakima County; and WHEREAS, the Yakima City Council received CARES Act funding to help address losses associated with COVID-19; and WHEREAS, the CARES Act funding may be granted to small businesses that weren't able to operate, or couldn't operate at 100% due to the restrictions imposed on businesses due to the COVID-19 pandemic; and WHEREAS, the grant program allows small businesses, as defined therein, to request grant funding; and WHEREAS, the provision of granting funds to small businesses suffering economic losses meets CARES Act funding guidelines and will provide substantial appropriate public and economic benefits to the City, particularly by providing grants to small businesses that were negatively affected by the COVID-19 pandemic; and WHEREAS, the City Council of the City of Yakima finds that it is in the best interest of the City and its residents to use $1,000,000.00 of its CARES Act money allocated specifically to address COVID-19 issues, to fund a small business grant program, administered by YCDA, now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager is hereby authorized to execute the Agreement Between the City of Yakima and Yakima County Development Association in the amount of One Million dollars ($1,000,000.00) in CARES Act funds to provide grants to small businesses negatively affected by the required closures and operating restrictions imposed due to COVID-19, within the City of Yakima. A copy of the grant agreement is attached hereto and fully incorporated herein. ADOPTED BY THE CITY COUNCIL this 15' day of September, 2020, SSTs nya gar Tee, City Clerk Icia Byers,;; ITEM TITLE: SUBMITTED BY: BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 13. For Meeting of: September 15, 2020 Resolution authorizing an agreement with Yakima County Development Association (YCDA) for $1,000,000 of CARES Act funding for a small business grant program to address the consequences of COVI D-19 Sara Watkins, Senior Assistant City Attorney Kimberly Domine', Financial Services Division Manager SUMMARY EXPLANATION: This Agreement sets forth the terms and conditions for YCDA to receive and administer a small business grant program with CARES Act money that was allocated to the City. The Agreement provides for a grant program for small businesses, as defined in the agreement to be a sole proprietorship, partnership, limited liability company, or corporation with less than twenty-five employees (either part-time or full-time) located within the City of Yakima, legally in operation for at a minimum of 365 days prior to September 1, 2020, which wasn't able to operate, or wasn't (or still isn't) able to operate at 100% due to the required closures and opening restrictions due to COVI D- 19. YCDA has already formulated an application and marketing materials for a similar grant program in Grandview. All grants under this agreement (and the CARES Act requirements) must be made by October 31, 2020. ITEM BUDGETED: Yes STRATEGIC PRIORITY: Economic Development APPROVED FOR SUBMITTAL BY THE CITY MANAGER RECOMMENDATION: Adopt Resolution ATTACHMENTS: Description D es©Iuti©n Aereement Upload Date 9l4/2020 202 Type resolution contract AGREEMENT BETWEEN THE CITY OF YAKIMA AND YAKIMA COUNTY DEVELOPMENT ASSOCIATION THIS AGREEMENT is entered into this 9 day of September, 2020, by and between the City of Yakima (hereinafter referred to as the "Grantee") and the Yakima County Development Association (hereinafter referred to as the "Recipient") WHEREAS, the Grantee has received CARES ACT (CARES) funds to be used for COVID-19 to address effects arising from the pandemic (hereinafter sometimes referred to as "CARES"); and WHEREAS, the Grantee wishes to use those funds to provide economic assistance grants to small businesses as defined in this Agreement; and WHEREAS, the Recipient has agreed to administer the small business assistance grant program, and WHEREAS, the Grantee wishes to engage the Recipient to assist the Grantee in utilizing such funds; NOW, THEREFORE, it is agreed between the parties hereto as follows 1. SCOPE OF SERVICE A. Activities The Recipient will be responsible for administering CARES funding granted to the Grantee to address effects arising from the COVID-19 pandemic in a manner satisfactory to the Grantee and consistent with any standards required as a condition of providing these funds. Such program will include the following activities eligible under the CARES program Program Delivery Activity. Recipient will use CARES funding to provide grants to small businesses to provide short-term assistance, enable retention of jobs, and stabilize small businesses affected by the COVID-19 pandemic General Administration The Recipient will maintain program and financial records documenting eligibility, provisions of services, grants allocated, small business information, advertising and marketing, application review, and decision -making B. CARES Act Objectives All activities funded with these CARES funds must be for the costs of business interruption caused by required closures. The funds must be specifically for COVID related impacts and needed to prevent significant damage to the local economy. The Recipient will provide all documented data collected to Grantee through monthly reports and a final report which will provide all data requested in this Agreement. Additional information may be requested by Grantee and any such information shall be provided by Recipient C Levels of Accomplishment —Goals and Performance Measures Recipient shall administer the grant program for small businesses in the City of Yakima with the goal of providing grant funds to small businesses to keep those businesses viable during the COVID-19 pandemic and beyond. ii. Recipient shall document grant reimbursements, employee numbers, and success or failure of the business on or before December 31, 2020, after the grant funds have been provided. Recipient shall follow up with successful applicants on or before June 30, 2021, after grant funds have been provided to collect data on the business D Staffing Recipient shall provide adequate staffing to administer the grant program Grantee will provide technical assistance when requested Jonathan Smith of YCDA shall be the primary staff person and key personnel for purposes of this Agreement. Any changes in key personnel assigned or their general responsibilities under this Agreement are subject to the prior approval of the Grantee E. Performance Monitoring The Grantee will monitor the performance of the Recipient against goals and performance standards required herein. Substandard performance as determined by the Grantee will constitute noncompliance with this Agreement. If action to correct such substandard performance is not taken by the Recipient within a reasonable period of time after being notified by the Grantee, contract suspension or termination procedures will be initiated. 2. TIME OF PERFORMANCE Services of the Recipient shall start on the effective date of this Agreement and end on the 31st day of October, 2020 Funds will not be available to the Recipient from the CARES program after the completion date, unless otherwise approved by Grantee. 3. BUDGET Funding of One Million Dollars ($1,000,000 00) will be granted to small businesses for items related to the Scope of Service All funds shall be disbursed as part of the program. Recipient shall be allowed to retain a maximum of Five Thousand Dollars ($5,000.00) of the funding for administrative costs and expenses. Any amendments to the budget must be approved in writing by both the Grantee and the Recipient 4. PAYMENT A. It is expressly agreed and understood that the total amount to be paid by the Grantee under this Agreement shall not exceed One Million Dollars ($1,000,000 00). B. Payments may be contingent upon certification of the Recipient's financial management system in accordance with the standards specified in 2 CFR 200 C The Grantee reserves the right to hold payment until adequate documentation has been provided by the Recipient and reviewed by the City The Recipient agrees to the following provisions in satisfying the terms and conditions of this Agreement: D. Recipient shall submit written claims for reimbursement no Tess than monthly. All grants made under this Agreement shall be made on or before October 31, 2020 5. NON-DISCRIMINATION IN CLIENT SERVICES A. The Recipient agrees to make all services available through this Agreement, and shall not, on the grounds of race, color, sex, religion, national origin, creed, marital status, or age i Deny a qualified individual any facilities, financial aid, services or other benefits provided under this Agreement ii. Provide any service(s) or other benefits to a qualified individual which are different, or are provided in a different manner, from those provided to others under this Agreement, separate treatment in any manner related to the receipt of any service(s), or other benefits provided under this Agreement. iii Deny any qualified individual an opportunity to participate in any program provided by this Agreement through the provision of service(s) or otherwise, or will afford the individual an opportunity to do so which is different from that afforded others under this Agreement. B The Recipient shall abide by all provisions of Section 504 of the HEW Rehabilitation Act of 1973 prohibiting discrimination against handicapped individuals either through purpose or intent. 6. NOTICES Notices required by this Agreement shall be in writing and delivered via mail (postage prepaid), commercial courier, or personal delivery. Any notice delivered or sent as aforesaid shall be effective on the date of delivery or sending. All notices and other written communications under this Agreement shall be addressed to the individuals in the capacities listed below, unless otherwise modified by subsequent written notice Communication and details concerning this Agreement shall be directed to the following representatives. Grantee. Recipient: City Manager City of Yakima 129 North 2nd Street Yakima, WA 98901 (509) 575-6000 7. SPECIAL CONDITIONS Jonathan Smith Yakima County Development Association 10 North 9'h Street Yakima, WA 98901 (509) 575-1140 A. Recipient shall formulate all application materials and Grantee shall approve said application materials prior to the granting of any funds under this Agreement. B The grant amount to an applicant shall not exceed Ten Thousand Dollars. Grantee desires to serve as many small businesses as practicable while providing those businesses funds need to continue to operate beyond the COVID-19 pandemic. C. Priority should be given first to small businesses which have not received any other federal or state assistance for their business. In cases where assistance provided was less than $10,000.00, a small business may request the difference between what it already received and the full $10,000.00 and be given priority for that amount. D Applicants must provide proof of a valid City of Yakima business license. E. Applicants must be a small business. A small business is defined, for purposes of this Agreement, as a sole proprietorship, partnership, limited liability company, or corporation with less than twenty employees (either part-time or full-time employees) located within the City of Yakima, legally in operation for at a minimum of 365 days prior to September 1, 2020, which wasn't able to operate, or wasn't (or still isn't) able to operate at 100% due to the required closures and opening restrictions due to COVID-19 F YCDA shall determine the best course in reviewing applications G. Funding should be granted on a rolling basis, until funds run out, but no grants should be awarded later than October 31, 2020. H Recipient shall provide updates to the City Council upon request. 8. GENERAL CONDITIONS The following requirements are applicable to all activities undertaken with CARES funds A. General Compliance The Recipient agrees to comply with all other applicable Federal, state and local laws, regulations, and policies governing the funds provided under this Agreement. The B Independent Contractor Nothing contained in this Agreement is intended to, or shall be construed in any manner, as creating or establishing the relationship of employer/employee between the parties The Recipient shall at all times remain an "independent contractor" with respect to the services to be performed under this Agreement. The Grantee shall be exempt from payment of all federal and/or state Unemployment Compensation, FICA, retirement, life and/or medical insurance and Workers' Compensation Insurance, as the Recipient is an independent contractor. C Hold Harmless and Indemnification Recipient agrees that it is financially responsible for any audit exception or other financial loss to the Grantee which occurs due to its negligence or its failure to comply with the terms of this Agreement. ii Recipient further agrees to defend, indemnify and hold harmless the Grantee, its elected and appointed officials, employees, and agents from and against any and all claims, demands and/or causes of action of any kind or character whatsoever arising out of or in connection with the performance of this Agreement by the Recipient, its employees, subcontractors, agents, or volunteers for any and all claims by any persons for alleged personal injury, death, or damage to their persons or property to the extent caused by the negligent acts, errors or omissions of the Recipient, its employees, agents, subcontractors, volunteers or representatives In the event that any suit or claim for damages based upon such claim, action, loss, or damages is brought against the Grantee, the Recipient shall defend the same at its sole cost and expense, provided that the Grantee retains the right to participate in said suit if any principle of governmental or public law is involved, and if final judgment be rendered against the Grantee and/or its officers, agents, and/or employees or any of them or jointly against the Grantee and the Recipient and its respective officers, agents, subcontractors, employees, volunteers or any of them, the Recipient agrees to fully satisfy the same and the Recipient shall reimburse the Grantee for any cost and expense which the Grantee has incurred as a result of such claim or suit, including, but not limited to attorneys' fees, costs and appeal costs and fees The provisions of this section shall survive the expiration or termination of this Agreement. D Insurance The Recipient shall procure and maintain for the duration of this Agreement, insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work hereunder by the Recipient, its agents, representatives, or employees ii. Recipient's maintenance of insurance as required by the Agreement shall not be construed to limit the liability of the Recipient to the coverage provided by such insurance, or otherwise limit the Grantee's recourse to any remedy available at law or in equity. Recipient shall obtain insurance of the types and coverage described below. a. Commercial General Liability. Commercial General Liability insurance shall be at least as broad as ISO occurrence form CG 00 01 and shall cover liability arising from premises, operations, stop -gap independent contractors and personal injury and advertising injury. Grantee shall be named as an additional insured under the Recipient's Commercial General Liability insurance policy with respect to the work performed for the City using an additional insured endorsement at least as broad as ISO CG 20 26 b. Commercial Automobile Liability Insurance. If Recipient owns any vehicles, before this Agreement is fully executed by the parties, the Recipient shall provide the Grantee with proof of commercial automobile liability insurance Automobile liability shall apply to any auto and be shown on the certificate In the event Recipient does not own any vehicles, or uses non -owned vehicles in its operations, Recipient shall provide proof of coverage for non -owned and hired automobile liability c. Workers' Compensation. Worker's Compensation coverage as required by the Industrial Insurance laws of the State of Washington. d. Professional Liability. Professional Liability insurance appropriate to the Recipient's profession. Professional liability shall include coverage for its employees and officers and all contracts, volunteers and individuals performing professional services for the Recipient. This requirement may be met instead by a combination of the Recipient's professional liability insurance and professional liability insurance of all others performing services for the Recipient in the minimum amounts shown below e. Directors' and Officers' Insurance. Directors' and Officers' insurance appropriate to the Recipient's actions. If the Professional Liability policy covers the actions of the Recipient's directors and officers that would be covered under a Directors' and Officers' policy, this requirement may be met by that liability insurance iv. Recipient shall maintain the following insurance limits. a Commercial General Liability. Recipient shall maintain Commercial General Liability insurance with limits of no less than $1,000,000 00 each occurrence, $2,000,000.00 general aggregate. b. Commercial Automobile Liability. Recipient shall maintain either Commercial Automobile Liability insurance and/or Non -Owned and Hired Automobile Insurance with limits of no less than $1,000,000 00 per occurrence combined single limit body injury and property damage c Professional Liability. Recipient shall maintain Professional Liability insurance with limits of no less than $500,000 00. d Fidelity Insurance. Recipient shall maintain an ERISA Fidelity policy or bond in the amount of $500,000.00 v. If any of the required insurance provides coverage on a claims -made basis. a. The retroactive date must be on or before the date of the Agreement or the beginning of services provided to the Grantee Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after expiration or termination of the Agreement. b If coverage is canceled or non -renewed, and not replaced with another claims -made policy form with a Retroactive Date prior to the contract effective date, Recipient must purchase "extended reporting" coverage for a minimum of five (5) years after completion of services provided by this Agreement. c. Recipient's Commercial General Liability insurance policies are to contain, or be endorsed to contain that they shall be primary insurance as respect to the Grantee. Any insurance, self-insurance, or self -insured pool coverage maintained by the Grantee shall be excess of the Recipient's insurance and shall not contribute with it. Insurance is to be placed with insurers with a current A.M Best rating of not less than A.VII d Recipient shall furnish the Grantee with original certificates and a copy of the amendatory endorsements, including but not necessarily limited to the additional insured endorsement, evidencing the insurance requirements of the Recipient before commencement of the work. e Recipient shall provide the Grantee with written notice of any policy cancellation within five (5) business days of their receipt of such notice f. Failure on the part of the Recipient to maintain the insurance as required shall constitute a material breach of this Agreement, upon which the Grantee may, after giving five (5) business days' notice to the Recipient to correct the breach, immediately terminate the Agreement or, at its discretion, procure or renew such insurance and pay any and all premiums in connection therewith, with any sums so expended to be repaid to the Grantee on demand, or at the sole discretion of the Grantee, offset against funds due the Recipient from the Grantee. g If the Recipient maintains higher insurance limits than the minimums shown above, the Grantee shall be insured for the full available limits of Commercial General and Excess liability maintained by the Recipient, irrespective of whether such limits maintained by the Recipient are greater than those required by this Agreement or whether any certificate of insurance furnished to the Grantee evidences limits of liability lower than those maintained by the Recipient h. The Recipient shall not use or disclose Personal Information, as defined in RCW 19.255.010, in any manner that would constitute a violation of federal law or applicable provisions of Washington State law. Recipient agrees to comply with all federal and state laws and regulations, as currently enacted or revised, regarding data security and electronic data interchange of Personal Information E. Grantee Recognition The Recipient shall insure recognition of the role of the Grantee in providing services through this Agreement. All activities, facilities and items utilized pursuant to this Agreement shall be prominently labeled as to funding source In addition, the Recipient will include a reference to the support provided herein by Grantee in all publications, announcements, or marketing associated with the funds made available under this Agreement. F. Amendments The Grantee or Recipient may amend this Agreement at any time provided that such amendments make specific reference to this Agreement, and are executed in writing, signed by a duly authorized representative of each organization, and approved by the Grantee's governing body Such amendments shall not invalidate this Agreement, nor relieve or release the Grantee or Recipient from its obligations under this Agreement. G Assignment and/or Subcontracting The Recipient shall not assign or subcontract any portion of the services provided within the terms of this Agreement without obtaining prior written approval from the Grantee The Grantee has the sole authority to decide whether assignment and/or subcontracting will be allowed All terms and conditions of this Agreement shall apply to any approved subcontract or assignment related to the Agreement. H Suspension or Termination i Termination for Cause. Grantee may suspend or terminate this Agreement if the Recipient materially fails to comply with any terms of this Agreement, which include, but are not limited to, the following. a. Failure to comply with any of the rules, regulations or provisions referred to herein, or such statutes, regulations, executive orders, policies or directives as may become applicable at any time; b Failure, for any reason, of the Recipient to fulfill in a timely and proper manner its obligations under this Agreement; c Ineffective or improper use of funds provided under this Agreement; or d. Submission by the Recipient to the Grantee reports that are incorrect or incomplete in any material respect. ii Termination for Convenience. This Agreement may be terminated at any time, in whole or in part, upon the written agreement of Recipient and Grantee. iii Termination for Withdrawal, Reduction or Limitation of Funding In the event that funding from the CARES Act is withdrawn, reduced or limited in any way after the effective date of this Agreement, and prior to its normal completion, Grantee may summarily terminate this Agreement as to the funds reduced or limited, notwithstanding any other termination provision of this Agreement. If the level of funding so reduced or limited is so great that the Grantee deems that the continuation of the program covered by this Agreement is no longer in the best interest of the public, the Grantee may summarily terminate this Agreement in whole notwithstanding any other termination provisions of this Agreement. Termination under this section shall be effective upon receipt of written notice by the Recipient. The Grantee agrees to promptly notify the Recipient of any proposed reduction in funding by Federal or other officials. The Recipient agrees that upon receipt of such notice it shall take appropriate and reasonable action to reduce its spending in the affected funding area so that expenditures do not exceed the funding level which would result if said proposed reduction became effective Upon termination of this Agreement under any section above, any CARES funds not already awarded through this Agreement shall revert to the City of Yakima. In the event that termination occurs as a result of Recipient's failure to comply with rules as outlined under subsections (G)(i), (ii), (iii), or (iv) above, Recipient shall return to the Grantee all funds received by Recipient which were expended in violation of the terms of this Agreement. I Close Out In the event that this Agreement is terminated in whole or in part for any reason, the following provisions shall apply i Upon written request by the Recipient, Grantee shall make or arrange for payment to the Recipient of allowable costs not covered by previous payments ii The Recipient shall submit within fifteen (15) days after the date of termination of this Agreement all financial, performance and other reports required by this Agreement, and in addition, will cooperate in a program audit by the Grantee or its designee if requested by Grantee. iii In the event a financial audit has not been performed prior to closeout of this Agreement, the Grantee retains the right to withhold a just and reasonable sum from the final payment to the Recipient after fully considering the recommendation on disallowed costs resulting from the final audit. 9. ADMINISTRATIVE REQUIREMENTS A. Financial Management If the Agency is a governmental entity, the Agency shall comply with the requirements and standards of OMB Circular A-128, "Audits of State and Local Government," and Circular A-87, "Principles for Determining Costs Applicable to Grants and Contracts with State, Local and Federally recognized Indian Tribal Governments," and with 2 CFR Part 200 If the Agency is not a governmental entity, the Agency shall comply with the requirements and standards of 2 CFR Part 200, and all other applicable federal laws, regulations, executive orders and guidelines. B Documentation and Recordkeeping i Records to be Maintained The Recipient shall maintain all records required by the Federal regulations specified in 24 CFR 570 506 that are pertinent to the activities to be funded under this Agreement. Such records shall include but not be limited to' a. Records providing a full description of each activity undertaken, b Records demonstrating that each activity undertaken meets one of the Objectives of the CARES Act, c Records required to determine the eligibility of grant recipients, d Records required to document the use of CARES funds; e. Financial records as required by 24 CFR 570 502 and 2 CFR 200; and f. Other records necessary to document compliance with any other applicable federal or state law or regulation. ii. Retention Required records shall be retained for a period of three (3) years after termination of this Agreement, except as follows (1) Records that are the subject of audit findings shall be retained for three (3) years after the program ends or three years after such findings have been resolved, whichever is longer; and (2) records for nonexpendable property shall be retained for three (3) years after its disposition. Nonexpendable property is defined in 2 CFR 200 333. iii. Client Data a The Recipient shall maintain client data demonstrating client eligibility for services (grant funds) provided. Such data shall include, but not be limited to, client name, address, income level or other basis for determining eligibility, number of employees, business financial information and other relevant business information, and a description of the grant provided and basis for grant amount. Such information shall be made available to Grantee monitors or their designees for review upon request. b. The use or disclosure by any party of an confidential information concerning a recipient or client for any purpose not directly connected with the Grantee's or the Recipient's responsibilities with respect to services provided under this Agreement is prohibited except on written consent of the recipient or client, their attorney or their responsible parent or guardian, or as otherwise provided by law iv. Inspection and Disclosure of Records The Recipient understands that client information collected under this Agreement is private and the use or disclosure of such information, when not directly connected with the administration of the Grantee's or Recipient's responsibilities with respect to services provided under this Agreement, or otherwise required by law, is prohibited unless written consent is obtained from such person receiving service The Agency acknowledges that this Agreement and any other information provided by it to the City and/or relevant to the program(s) described in the Exhibit(s) and Attachment(s) are subject to the Washington State Public Records Act, Chapter 42.56 RCW Records relating to this Agreement shall at all times be subject to inspection by the Grantee. Recipient shall provide the Grantee sufficient, safe and proper facilities and/or send copies of the requested documents to the Grantee upon Grantee's request. All records related to Recipient's services under this Agreement must be made available to Grantee, upon request. They must be produced to third parties, if required pursuant to the Public Records Act, or by law All records relating to Recipient's services under this Agreement must be retained by Recipient for the minimum period of time required pursuant to the Washington State Secretary of State's records retention schedule. This section shall survive any expiration or termination of this Agreement. v. Close -Outs The Recipient's obligation to the Grantee shall not end until all close-out requirements are completed Activities during this close-out period shall include, but are not limited to: making final payments, deobligation of unused funds, disposing of program assets (including the return of all unused materials, equipment, unspent cash advances, program income balances, and accounts receivable to Grantee), and determining the custodianship of records. Notwithstanding the foregoing, the terms of this Agreement shall remain in effect during any period that the Recipient has control over CARES funds, including program income. vi Audits and Inspections The records and documents with respect to all matters covered by this Agreement shall be subject at all times to inspection, review or audit by the Grantee, Federal, or State officials so authorized by law during the performance of this Agreement and during the period of retention specified in this Agreement. a. The Recipient will provide at or before the contract signing, upon request by Grantee, a copy of the Recipient's most recent audit. The Recipient will provide to the Grantee a copy of the Agency's most recent audit for each year in which a contract for use of CARES funds exists with the Grantee, if applicable Failure to provide such audit will be considered a material breach of the Agreement and result in a refund to the Grantee of all moneys paid or due under the Agreement b Audit Requirements. Agencies receiving $750,000.00 or more in federal funds will provide to the Grantee the above required audits conducted in a manner required by 2 CFR Part 200 Uniform Guidance —Subpart F vii. Financial Management. Such records shall identify adequately the source and application of funds for activities within this Agreement, in accordance with the applicable provisions federal or state law, regulation, executive order or guidelines, including, but not limited to 2 CFR Part 200 These records shall contain information pertaining to grant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays, and income viii. Access to Records a. Recipient agrees that Grantee may carry out monitoring and evaluation activities so as to ensure compliance by Recipient with this Agreement, with any CARES compliance requirements, and with all other laws, regulations, and ordinances related to the performance hereof. b. Recipient agrees to provide Grantee with any data determined by Grantee to be necessary for its effective fulfillment of its monitoring and evaluation responsibilities c At any reasonable time and as often as Grantee may deem necessary, Recipient shall make its records available to the Grantee, federal or state auditors, or any of their authorized representatives, and shall permit them to audit, examine, and make excerpts and/or copies of the same Recipient records shall include, but shall not be limited to, the following: payroll, personnel and employment records, procurement bidding documents, contracts, sales closing statements, applications, award notifications, receipts, requests for reimbursement, and invoices d Grantee shall have the right to review and audit all records of the Recipient pertaining to any payment by Grantee Said records shall be maintained for a period of seven years after the completion of the project. e The Recipient shall be required to make reasonable changes in the services as completed or to be completed if said services fall below the standards and specifications set forth in this Agreement and any attachments hereto. C. Reporting and Payment Procedures i. Reports. The Recipient shall submit such reports as required by the Grantee at such times as required by the Grantee, including at any time after this Agreement has expired. Notwithstanding any other provision of this Agreement to the contrary, the reports required by the Grantee shall be submitted by the Recipient no less than on an every -other -month basis. Such reports shall also be submitted prior to contract completion A final report shall be compiled upon termination of this Agreement or spend down of all CARES funding allocated in this Agreement. ii. Program Income There is no anticipated program income under this Agreement. iii Indirect Costs Recipient shall be reimbursed for indirect costs, or any administrative costs associated with the grant program in an amount not to exceed Five Thousand Dollars ($5,000 00). iv Payment Procedures The Grantee will pay to the Recipient funds available under this Agreement based upon information submitted by the Recipient and consistent with any approved budget and Grantee policy concerning payments With the exception of certain advances, if any, payments will be made for eligible expenses actually incurred by Recipient, and not to exceed actual cash requirements. Payments will be adjusted by the Grantee in accordance with advance fund and program income balances available in Recipient accounts In addition, the Grantee reserves the right to liquidate funds available under this Agreement for costs incurred by the Grantee on behalf of Recipient. v Return of Funds The Recipient shall return to the Grantee all monies provided hereunder by the Grantee to the Recipient if any of the following occur: f. The Recipient materially changes the primary purpose and scope of the project as described in Section A above; or g The Recipient is unable to continue and/or provide services as described in this Agreement D Procurement Standards In awarding contracts pursuant to this Agreement, if applicable, but not including the grants awarded as part of the program, the Recipient shall comply with all applicable requirements of local and State law for awarding contracts, including but not limited to procedures for competitive bidding, contractor's bonds, and RCW 60 28 010, which addresses retained percentages. In addition, the Recipient shall comply with the requirements of the U S. Office of Management and Budget, as applicable, relating to bonding, insurance and procurement standards, and all federal laws, regulations, executive orders and guidance documents. Where Federal standards differ from local or State standards, the stricter standards shall apply The Federal standard for competitive bidding shall apply only if the applicable State or local standard for competitive bidding is greater than the federal standard. E. Evaluation The Recipient shall participate with the Grantee in any evaluation project or performance report required by a state or federal agency Further, the Recipient agrees to participate with the Grantee in any reasonable evaluation project or performance report as requested by the Grantee In either situation, the Recipient agrees to make available all information required by any such evaluation process 10. PERSONNEL AND PARTICIPANT CONDITIONS A. Nondiscrimination. i General The Recipient shall comply with all Federal, State and local laws prohibiting discrimination on the basis of age, sex, marital status, race, creed, color, national origin, the presence of any sensory, mental or physical handicap or any other group protected under local, state or federal law existing or hereafter created. These requirements are specified in RCW chapter 49.60; Section 109 of the Housing and Community Development Act of 1974; Civil Rights Act of 1964, Title VI, Civil Rights Act of 1968, Title VIII, Executive Order 11063; Executive Order 11246; Section 3 of the Housing and Urban Development Act of 1968; Section 504 of the Rehabilitation Act of 1973, and, the Age Discrimination Act of 1975 Specifically the Recipient is prohibited from taking any discriminatory actions defined in the HUD Regulations at 24 CFR 570 602(b)(1) and shall take such affirmative and corrective actions as are required by the Regulations at 24 CFR 570.602(b)(4) ii Specific Discriminatory Actions Prohibited: The Recipient may not, under any program or activity to which this Agreement may apply, directly or through contractual or other arrangements, on the grounds of race, color, national origin, or sex: (a) Deny any person facilities, services, financial aid, or other benefits provided under the program or activity; (b) Provide any persons with facilities, services, financial aid, or other benefits which are different, or are provided in a different form, from that provided to others under the same program or activity; (c) Subject any person to segregated or separate treatment in any facility or in any matter or process related to receipt of any service or benefit under the program or activity; (d) Restrict in any way access to, or in the enjoyment of, any advantage or privilege enjoyed by others in connection with facilities, services, financial aid, or other benefits under the program or activity; (e) Treat any person differently from others in determining whether the person satisfies any admission, enrollment, eligibility, membership, or other requirement or condition which individuals must meet in order to be provided any facilities, services or other benefit provided under the program or activity; or (f) Deny any person any opportunity to participate in a program or activity as an employee The Recipient shall not use criteria or methods of administration that have the effect of subjecting individuals to discrimination on the basis of race, color, national origin, or sex, or have the effect of defeating or substantially impairing accomplishment of the objectives of the program or activity with respect to individuals of a particular race, color, national origin, or sex. The Recipient, in determining the site or location of housing or facilities provided in whole or in part with funds under this part, if applicable, may not make selections of such site or location that have the effect of excluding individuals from, denying them the benefits of, or subjecting them to discrimination on the grounds of race, color, national origin, or sex; or which have the purpose or effect of defeating or substantially impairing the accomplishment of the objectives of the Act or of the HUD Regulations. B Notice The Recipient shall include the provisions of the appropriate subsections (a), (b), (c), (d), and (e) of this Section A above entitled "Nondiscrimination" as required by law, and shall send to each labor union or representative of workers with which it has a collective bargaining agreement or other contract or understanding a notice advising the said labor union or worker's representative of the commitments made in these subsections ii. In advertising for employees, goods or services for the activities under this Agreement, the Recipient shall comply with all federal laws, regulations, executive orders and guidelines, including, but not limited to OMB 2CFR-200 Agencies shall be considered to be in compliance with this provision if at least one of the following steps is taken. (a) advertise in a minority publication in addition to publication of general circulation, (b) utilize a minority contractors bidding center; or (c) utilize a local affirmative action office and/or certified minority/women's business enterprise directory C Lobbying. The Recipient certifies, to the best of its knowledge and belief, that: i No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer of employee of any Agency, a Member of Congress, an officer or employee or Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. ii. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any Agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal agreement, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form- LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions iii The Recipient shall require that the language of this certification, or equivalent language, be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U S Code Any person who fails to file the required certification shall be subject to a civil penalty of not Tess than $10,000.00 and not more than $100,000.00 for each such failure. D. Conflict of Interest The Grantee may, by written notice to the Recipient. i. Terminate this Agreement if it is found, after due notice and an opportunity to respond, by the Grantee that gratuities in the form of entertainment, gifts, or otherwise offered or given by the Recipient, or agent or representative of the Recipient, to any officer, elected official or employee of the Grantee, with a view towards securing this Agreement or securing favorable treatment with respect to the awarding or amending or the making of any determinations with respect to this Agreement. ii. In the event this Agreement is terminated as provided in (i) above, Grantee shall be entitled to pursue the same remedies against the Recipient as it could pursue in the event of a breach of the Agreement by Recipient. The rights and remedies of the Grantee provided for in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law. iii The Recipient warrants and covenants that it presently has no interest and shall not acquire any interest, directly or indirectly, which could conflict in any manner or degree with the performance of tis services hereunder. The Recipient further warrants and covenants that in the performance of this Agreement, no person having such interest shall be employed. 11 FEDERAL, STATE AND LOCAL PROGRAM REQUIREMENTS A. Contractors and Suppliers. i No contractor, subcontractor, union, or vender engaged in any activity under this Agreement shall discriminate in the sale of materials, equipment or labor on the basis of age, sex, marital status, race, creed, color, national origin, or the presence of any sensory, mental, or physical handicap Such practices include employment, upgrading, demotion, recruiting, transfer, layoff, termination, pay rate, and advertisement for employment (RCW Chap 49 60, Executive Order 11246 as amended) ii All firms and organizations described above shall be required to submit to the Recipient certificates of compliance demonstrating that they have, in fact, complied with the foregoing provisions; provided, that certificates of compliance shall not be required from firms and organizations with fewer than 25 employees or on contracts and/or yearly sales of less than $10,000.00. iii. To the greatest extent feasible, the Recipient shall purchase supplies and services for activities under this Agreement from vendors and contractors whose businesses are located in the area served by CARES -funded activities or owned in substantial part by program area residents. (Section 3, Housing and Urban Development Act of 1968, as amended) iv. CARES funds shall not be used directly or indirectly to employ, award contracts to, or otherwise engage the services of, or fund any contractor or subrecipient during any period of debarment, suspension, or placement in ineligibility status under the provisions of 24 CFR Part 24 B. Other Federal Requirements. The absence of mention in this Agreement of any other Federal requirements which apply to the award and expenditure of the Federal funds made available by this Agreement is not intended to indicate that those Federal requirements are not applicable to Recipient activities The Recipient shall comply with all other Federal requirements relating to the expenditure of Federal funds, including but not limited to. The Architectural Barriers Act of 1968 (42 U S.0 4151), and the Hatch Act (5 U S C Chapter 15). Additionally, the Recipient shall comply with the Federal requirements described by 24 CFR Part 570, Sections 600 through 603, Section 605, and Sections 607 through 612. C. Nonsubstitution for Local Funding. The CARES funding made available under this Agreement shall be used only for eligible program expenses D. Religious Organizations. The Agency will comply with all federal requirements concerning religious organizations and the use of Community Block Grant funds All services delivered must be dispensed in a clearly non-sectarian manner, devoid of any religious influence 12. RULES OF CONSTRUCTION In the event of an inconsistency in this Agreement/grant award unless otherwise provided herein, the inconsistency shall be resolved by giving precedence in the following order A. Appropriate provisions of state and federal statutes and regulations including CARES Act regulations. B This Agreement. C. Exhibits to this Agreement, if any D. City of Yakima Resolution approving this Agreement. E Any other provisions whether incorporated by reference herein or otherwise, provided that nothing herein shall be construed as giving preference to provisions of this agreement/grant award over any provisions of law 13. GOVERNING LAW AND VENUE A. The venue for any action to enforce or interpret this Agreement shall be in the Superior Court of Washington for Yakima County B. This Agreement has been and shall be construed under the laws of the State of Washington 14. SEVERABILITY It is understood and agreed by the parties hereto that if any part, term, or provision of this Agreement is held by the courts to be illegal, the validity of the remaining provisions shall not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular provision held to be invalid If it should appear that any provision hereof is in conflict with any federal or state statutory provision, said provision which may conflict therewith shall be deemed modified to conform to such statutory provision 15. WAIVER The Grantee's failure to act with respect to a breach by the Recipient does not waive its right to act with respect to subsequent or similar breaches. The failure of the Grantee to exercise or enforce any right or provision shall not constitute a waiver of such right or provision. 16. ENTIRE AGREEMENT This agreement constitutes the entire agreement between the Grantee and the Recipient for the use of funds received under this Agreement and it supersedes all prior or contemporaneous communications and proposals, whether electronic, oral, or written between the Grantee and the Recipient with respect to this Agreement 17. SURVIVAL Any provision of this Agreement which imposes an obligation after termination or expiration of this Agreement shall survive the term or expiration of this agreement and shall be binding on the parties to this Agreement. DATED this day of September, 2020 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above CITY 0 YAKIMA YAKIMA COUNTY DEVELOPMENT ASS'N By: Robert Harrison, City Manager B TTEST: Sonya Claa'r-Tee, City Clerk CITY CONTRACT NO. 4120-I 55 RESOLUTION NO-a)iO J 4' Jonathan z y, 9 r-. rector CONTRACT GENERAL INFORMATION CFDA: 21.999 NAME: Yakima County Development Association TITLE: YCDA CARES ACT PROJECT SUMMARY: CARES Act grants for businesses and non-profit corporations ELIGIBILITY: Economic Assistance CONTRACT START DATE: September 15, 2020 CONTRACT END DATE: November 30, 2020 EIN: 91-1284283 PROJECT LOCATION: City of Yakima CONTACT PERSON: Jonathan Smith TITLE: Executive Director MAILING ADDRESS: 10 North 9th Street, Yakima, WA 98901 LOCATION ADDRESS: Same as Mailing Address PHONE NUMBER: 509-575-1140 EMAIL: jon@ycda.com PERSONS AUTHORIZED TO SIGN VOUCHER REIMBURSEMENT REQUEST AND PROGRAM ACCOMPLISHMENTS FORM: NAME/TITLE: SIGNATURE: (optional) NAME/TITLE: SIGNATURE: FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORT Yakima County Development Association December 31, 2020 and 2019 BLODGETT, MICKELSEN & ADAMSON, P.S. CERTIFIED PUBLIC ACCOUNTANTS CONTENTS PAGE INDEPENDENT AUDITOR'S REPORT 1-3 FINANCIAL STATEMENTS STATEMENTS OF FINANCIAL POSITION 4-5 STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS 6 STATEMENTS OF FUNCTIONAL EXPENSES 7 STATEMENTS OF CASH FLOWS 8 NOTES TO FINANCIAL STATEMENTS 9-17 REPORT REQUIRED BY GOVERNMENT AUDITING STANDARDS 18-20 REPORTS AND SCHEDULES REQUIRED BY UNIFORM GUIDANCE 21-28 BRENT R. MICKELSEN, C.P.A. THOMAS W. BLODGETT, C PA TRAVIS B ADAMSON, C RA DEREK B MOODY, C PA BLODGETT, MICKELSEN & ADAMSON, P.S. CERTIFIED PUBLIC ACCOUNTANTS 7139 W DESCHUTES AVE , SUITE 102 KENNEWICK, WA 99336 TELEPHONE. (509) 735-0379 FACSIMILE: (509) 735-0646 INDEPENDENT AUDITOR'S REPORT To the Board of Directors Yakima County Development Association, Inc. Yakima, Washington MEMBERS WASHINGTON STATE SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS We have audited the accompanying financial statements of Yakima County Development Association, Inc. (the Association) (a nonprofit organization), which comprise the statement of financial position as of December 31, 2020, and the related statements of activities and changes in net assets, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion. 1 Basis for Qualified Opinion As disclosed in Note 2, the Association has chosen to recognize revenue for conditional promises to give. Accounting principles generally accepted in the United States of America do not allow conditional promises to give to be recognized until the condition is met and they become unconditional. If accounting principles generally accepted in the United States of America had been followed, current pledges receivable would decrease by $497,782, long-term pledges receivable would decrease by $814,451, and net assets would decrease by $1,312,233 at December 31, 2020. The impact on the change in net assets for the year ended December 31, 2020 has not been determined. Qualified Opinion In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements referred to above present fairly, in all material respects, the financial position of Yakima County Development Association, Inc. as of December 31, 2020, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on 2019 financial statements The accompanying financial statements of Yakima County Development Association, Inc. for the year ended December 31, 2019 were previously compiled by other accountants, whose report dated December 16, 2020, stated that they have not audited or reviewed the 2019 financial statements and do not express an opinion, a conclusion, nor provide any assurance on those financial statements. In their report, the accountants referred to a departure from accounting principles generally accepted in the United States of America because management had chosen to recognize revenue for conditional pledges. If accounting principles generally accepted in the United States of America had been followed, current pledges receivable would decrease by $498,479 and long-term pledges receivable would decrease by $1,171,081 at December 31, 2019. In addition, the change in net assets without restrictions would decrease by $29,584 and the change in net assets with restrictions would increase by $177,658 for the year ended December 31, 2019. Emphasis of Matter As discussed in Note 10 to the financial statements, the novel coronavirus outbreak during 2020 significantly affected the Association's operations, resulting in increased grant revenue which is shown on the statement of activities net of related awards made. The majority of the awards were completed by November 30, 2020 and it is expected that future revenues and expenses of the Association will be more consistent with those of previous years. However, the extent of this impact is difficult to estimate until more information about the length of the outbreak and its restrictions and their impact on local businesses is known. Our opinion is not modified with respect to this matter. Other Matters Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administration Requirements, Cost Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. 2 The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 27, 2021, on our consideration of Yakima County Development Association, Inc.'s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of Yakima County Development Association, Inc.'s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Yakima County Development Association, Inc.'s internal control over financial reporting and compliance. B4tlptt; Ride/tog & Norio; PS. Kennewick, Washington October 27, 2021 3 Yakima County Development Association, Inc. STATEMENTS OF FINANCIAL POSITION December 31, 2020 (Audited) and 2019 (Unaudited) ASSETS 2020 2019 (Audited) (Unaudited) CURRENT ASSETS (notes 1, 2, 3, and 9) Cash and cash equivalents - unrestricted $ 423,069 $ 182,126 Cash and cash equivalents - restricted 767,648 Certificate of deposit 63,432 63,233 Current pledges receivable, net (Capital Campaign 8) 497,782 498,479 Grants receivable 42,292 32,945 Other receivables 25,500 21,208 Prepaid expenses 6,124 29,085 Total current assets 1,825,847 827,076 PROPERTY AND EQUIPMENT - AT COST (note 1) Leasehold improvements 10,450 10,450 Furniture and equipment 63,293 63,293 less accumulated depreciation LONG-TERM PLEDGES RECEIVABLE, NET (CAPITAL CAMPAIGN 8) (notes 1 and 2) 73,743 73,743 60,172 55,201 13,571 18,542 814,451 1,171,081 $ 2,653,869 $ 2,016,699 The accompanying notes are an integral part of these statements. 4 LIABILITIES AND NET ASSETS 2020 2019 (Audited) (Unaudited) CURRENT LIABILITIES (notes 1 and 3) Accounts payable $ 90,887 $ 2,384 Unexpended grant funds 769,360 Accrued vacation 18,867 12,284 Unearned revenue 3,650 38,087 Total current liabilities and total liabilities 882,764 52,755 COMMITMENTS (notes 4 and 5) NET ASSETS (notes 1, 2 and 8) Without donor restrictions 956,654 792,863 With donor restrictions 814,451 1,171,081 1,771,105 1,963,944 $ 2,653,869 $ 2,016,699 The accompanying notes are an integral part of these statements. 5 Yakima County Development Association, Inc. STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS Years ended December 31, 2020 (Audited) and 2019 (Unaudited) CHANGES IN NET ASSETS WITHOUT DONOR RESTRICTIONS Revenue and support (notes 1, 2, 3 and 10) Capital campaign 8 pledges and contributions Contributions in -kind Grants, net of awards made of $11,687,769 in 2020 and $0 in 2019 Event income Enterprise Challenge income Investment income Other income Total support and revenue Net assets released from donor restrictions (note 8) Expenses (notes 1, 4, 5, 6 and 10) Business recruitment Community leadership Enterprise Challenge Local business COVID-19 response Workforce development Administration Fundraising Total expenses Increase in net assets without donor restrictions CHANGES IN NET ASSETS WITH DONOR RESTRICTIONS Capital campaign 8 pledges and contributions Bad debt expense Net assets released from temporary restrictions (note 8) (Decrease) in net assets with donor restrictions (Decrease) in total net assets NET ASSETS, BEGINNING OF YEAR NET ASSETS, END OF YEAR 2020 (Audited) $ 67,069 4,839 379,636 33,030 20,700 259 15,400 520,933 433,572 954,505 39,001 45,712 40,281 347,693 157,283 7,139 135,097 18,508 790,714 163,791 98,776 (21,834) (433,572) (356,630) (192,839) 1,963,944 2019 (Unaudited) $ 252,049 12,880 134,577 94,104 17,375 207 511,192 458,546 969,738 96,826 77,634 36,731 176,991 64,055 233,447 124,001 809,685 160,053 314,695 (33,807) (458,546) (177,658) (17,605) 1,981,549 $ 1,771,105 $ 1,963,944 The accompanying notes are an integral part of these statements. 6 Yakima County Development Association, Inc STATEMENTS OF FUNCTIONAL EXPENSES Year ended December 31, 2020 (Audited) Program Services Business Community Enterprise Local COVID-19 Workforce recruitment Icadenhip Challenge business response development Administration Fundraisine Total Operating expenses Salaries S 16.928 S 21,093 S 14.865 S 201.343 S 94,793 S 5.488 S 40.857 S 11.158 S 406525 Professional fees and contract services 3,610 10,375 - 36,360 15,447 - 48,468 - 114,260 Subscription and dues 12,065 6,391 364 20,230 5,370 8.152 3,995 56567 Bad debts(•) - - - - - - 33,714 - 33,714 Rent 1.218 1.518 1,071) 14,486 6,820 395 2,939 803 29,249 Payroll and personal property taxes 1,125 1.401 988 13.376 6.297 365 2.714 741 27.007 Event expenses Event hosting and meals - 887 13,806 - 14,693 Speaker fee - - 9500 - - 9500 Advertising - - 324 - - - - - 324 Rent - - 2,075 - 2,075 Printing - - - - - - - - Medical insurance 879 1.1196 772 10,458 4.924 285 2,122 580 21,116 Enterprise Challenge award - 16,350 - - - - 16,350 Advertising 553 1,1)59 2.701 2.235 8,067 - - - 14,615 Office supplies 422 526 371 5,024 4,884 137 1.019 278 12,661 Equipment lease and maintenance 408 908 358 4,852 2.284 132 985 269 9,7% Telephone and utilities - - - - - - 9.598 - 9598 Insurance 372 463 327 4,423 2,1182 121 897 246 8.931 Retirement program 290 361 254 3.447 1,623 94 699 191 6,959 Depreciation 207 258 182 2,462 1,166 67 493 136 4.971 Travel and lodging 730 480 70 1.111 444 26 948 52 3,861 Meetings and seminars 105 72 - 1,446 61)7 - 1524 - 3.754 Pnnhng and postage 89 111 78 1,059 1,562 29 215 59 3,202 Capital Campaign 8 fundraising - - - - - - Misccllancous 320 913 1.587 2.820 Total operating expenses $ 39.001 $ 45,712 $ 40.281 $ 347.693 S 157,283 S 7.139 J__ 156,931 5 18,908 S 812548 Ycar ended December 31, 2019 (Unaudited) Program Services Business Community Entcrpnsc Local COVID-19 Workforce recruitment leadership Challenge business response development Administration Fundraising Total Operating expenses Salaries $ 46 485 $ 39 964 $ 8 881 $ 60 726 $ - $ 12 521 $ 104 571 $ 78,050 $ 351,198 Professional fees and contract services 13,405 2,918 - 29,895 - 40,874 - 87,092 Subscription and dues 6 098 6 746 2 427 7 455 - - 5 296 760 28 782 Bad debts (1 4,475 3,847 855 5,846 - 1,206 43,873 7.512 67,614 Rent 4,605 3,959 880 6.016 1.240 10 360 7 732 34 792 Payroll and personal property taxes 3.859 3 318 737 5 042 - 1 040 8 682 6 481 29 159 Event expenses Event hosting and meals 66 2,144 29.132 29,431 51 - 60 824 Speaker fee - - - 15.850 - - 15,850 Advertising - 611 10 119 - 9 10,739 Rent 434 - 2,000 - 1.787 4,221 Printing - - 107 - - - - 78 185 Medical insurance 4 170 3 585 797 5 448 - 1 123 9 381 7 003 31,507 Enterprise Challenge award - - 17 500 - - 17,500 Adverusmg 4,359 4,050 471 267 - - 1,918 2 100 13 165 Office supplies 1 559 1 340 298 2 037 - 420 3 505 2 617 11,776 Equipment lease and maintenance 1 866 1 568 306 4,424 382 3,270 2,528 14.344 Telephone and utilities 1,231 1,058 235 1,608 - 332 2,770 2,067 9301 Insurance 549 472 105 717 - 148 1 234 919 4,144 Retirement program 528 454 101 690 142 1,188 888 3,991 Depreciation - - - - - 7106 - 7106 Travel and lodging 3 050 2 704 100 2 311 - 142 1 183 882 10,372 Meetings and seminars 526 1,111 7 2,069 - 78 1,299 717 5,807 Printing and postage 61 - - - - 1 190 1,339 2,590 Capital Campaign 8 fundraising - - - - - 18,784 267 19,051 Miscellaneous 40 169 1,189 - - 719 265 2,382 Total operating expenses $ 96.826 $ 77.634 $ 36.731 $ 176.991 S $ 64.055 $ 267.254 $ 124-001 $ 843.492 * Bad debts expense is split between expenses related to net assets without restrictions and net assets with restrictions The accompanying notes are an integral part of these statements. 7 Yakima County Development Association, Inc. STATEMENTS OF CASH FLOWS Years ended December 31, 2020 (Audited) and 2019 (Unaudited) (Audited) (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ (192,839) $ (17,605) Adjustments to reconcile change in net assets to net cash provided by operating activities Depreciation 4,971 7,106 Net operating changes in: Pledges receivable, net (Capital Campaign 8) 357,327 99,590 Grants receivable (9,347) (1,001) Other receivables (4,292) (20,911) Prepaid expenses 22,961 (14,368) Accounts payable 88,503 (2,115) Unexpended grant funds 769,360 Accrued vacation 6,583 (7,774) Unearned revenue (34,437) 38,087 NET CASH PROVIDED BY OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment Leasehold improvements Net increase in certificate of deposit NET CASH USED IN INVESTING ACTIVITIES 1,008,790 81,009 (199) (3,830) (10,450) (189) (199) (14,469) NET INCREASE IN CASH 1,008,591 66,540 Cash and cash equivalents, beginning of year 182,126 115,586 Cash and cash equivalents, end of year $ 1,190,717 $ 182,126 Cash and cash equivalents - unrestricted Cash and cash equivalents - restricted $ 423,069 $ 182,126 767,648 - $ 1,190,717 $ 182,126 The accompanying notes are an integral part of these statements. 8 Yakima County Development Association, Inc. NOTES TO FINANCIAL STATEMENTS December 31, 2020 and 2019 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Organization Yakima County Development Association, Inc. (the Association) is a Washington non-profit corporation formed April 9, 1985. The Association has the following mission statement: "The Yakima County Development Association will enhance the income, quality of life, and employment stability of Yakima County residents by retaining, expanding, and recruiting new business and industry." The Association initiates capital campaigns every five years to solicit pledges and raise funds to support its mission. The principal place of business is in Yakima, Washington. b. Basis of presentation The financial statements are presented in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification (ASC) 958-205 and subsections. During 2018, the Association adopted the provisions of Accounting Standards Update ("ASU") 2016- 14: Not -for -Profit Entities (Topic 958) Presentation of Financial Statements of Not -for -Profit Entities, which improves the current net asset classification and the related information presented in the financial statements and notes about the organization's liquidity, financial performance, and cash flows. c. Fair value of financial instruments The fair value of current assets and current liabilities approximates carrying value because of the short-term nature of these items. d. Cash and cash equivalents The Association considers all highly liquid debt instruments with a maturity of three months or less when purchased to be cash equivalents. e. Restricted cash At December 31, 2020, restricted cash consisted of grant funds received from Yakima County that were unexpended during the grant period and were required to be repaid. The county provided $8 million of funds under the contract and the Association recorded revenue of $7,232,352 leaving $767,648 of unexpended funds which were repaid to the county in January 2021. See notes 1 p and 3. Unexpended grant funds also included $1,712 of other grant funds which were applied against a grant receivable in March 2021. f. Certificate of deposit The Association invested in a certificate of deposit with one financial institution. The certificate is valued at historical cost plus accrued interest. The certificate matures in November, 2021 and has an interest rate of 0.15%. 9 Yakima County Development Association, Inc. NOTES TO FINANCIAL STATEMENTS December 31, 2020 and 2019 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued g• Pledges receivable and contributions revenue Pledges to give that are expected to be collected within one year are recorded at net realizable value. The Association has recorded an allowance for uncollectible pledges to reflect their estimate of pledges that are considered to be uncollectible. This allowance is based on past collection experience applied to ongoing evaluations of its pledges receivable and an assessment of the risks of repayment. Pledges receivable are written off against the allowance when the Association deems the pledge to be uncollectible. Pledges to give that are expected to be collected in future years are recorded at the present value of their estimated future cash flows. The discounts on those amounts are computed using an interest rate that approximates general market conditions near the date ofthe pledge. Amortization of the discounts is included in pledge revenue. The allowance for uncollectable amounts is an estimate that is subject to change upon evaluation of pledge contributors. It is at least reasonably possible that the estimate will change in the near term and could have a material effect on the financial statements. See note 2 for further detail regarding pledges receivable. All pledges are considered to be available for unrestricted use unless specifically restricted by the donor. Pledges that are restricted by the donor are reported as increases in undesignated net assets if the restrictions expire in the fiscal year in which the contributions are recognized. All other donor -restricted contributions are reported as increases in net assets with donor restrictions. When a donor restriction expires; that is, when a stipulated time restriction ends or purpose restriction is accomplished, net assets with donor restrictions are reclassified to net assets without donor restrictions (undesignated) and are reported in the statements of activities and statements of changes in net assets as net assets without donor restrictions. h. Revenue recognition and unearned revenue Pledge contributions are recorded upon notification of a donor's promise to give. Pledge forms used for the Association's most recent capital campaign in 2018 did not meet the criteria for pledges to be considered unconditional promises to give under accounting principles generally accepted in the United States (GAAP). See note 2 for further details of this departure from GAAP. The Association receives several grants from various nonprofit and government entities. Based on the guidance from ASU 2018-08, management determined that grant revenue is considered non -exchange and therefore not subject to Topic 606. The grants are cost reimbursement grants and income is recognized upon request for reimbursement. The grant agreements require that the Association match a certain percentage ofthe grant. If the Association fails to use or manage grant funds in accordance with the grant agreements, it may be required to return funds to the granting agency. 10 Yakima County Development Association, Inc. NOTES TO FINANCIAL STATEMENTS December 31, 2020 and 2019 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued h. Revenue recognition and unearned revenue - continued The Association also sponsors events such as educational forums and conferences. The income and expense related to these events are recorded when the event is held or when the expense is incurred, if different. These events are not held as fundraisers, but rather are intended to provide a benefit to local businesses while not impacting the net assets of the Association. The Association occasionally receives various types of in -kind contributions. Contributed services are recognized at fair value if the services received either create or enhance long-lived assets or require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. The Association received contributed professional services used for the Enterprise Challenge, which are reflected in the statements of activities as contributions in -kind and are offset by like amounts included in expenses or as additions to property and equipment. Unearned revenue at December 31, 2020 and 2019 consisted of Enterprise Challenge and Relocation Guide sponsorship income which was recognized when earned during 2021 and 2020, respectively. Sponsors are provided marketing or other publicity, and therefore, income received is not considered to be restricted. i. Property and equipment Purchased property and equipment are carried at historical cost less accumulated depreciation. The Association's capitalization policy requires individual assets to be capitalized if the original cost or fair value at date of donation exceeds $2,500 or the expenditure substantially increases the useful life of an asset. Maintenance, repairs, and small asset expenditures are expensed as incurred. Donated equipment is recorded at fair value as of the date of the contribution. Depreciation expense is provided over the useful lives of the assets, which range from three to ten years, using the straight-line method. Credit risk Financial instruments which potentially subject the Association to concentrations of credit risk consist principally of cash and cash equivalents, certificates of deposit, and pledges receivables. The Association places its cash and cash investments with a high -quality financial institution. Management periodically evaluates the relative credit standing of the financial institution. The balances are insured by the Federal Deposit Insurance Corporation up to $250,000. At December 31, 2020 and 2019, there were uninsured balances of $1,548,004 and $0, respectively. Concentrations of credit risk with respect to pledges receivable are limited due to the Association's large number of supporters and their dispersion across many different funding sources in the community. Management believes it is not exposed to any significant credit risks. See note 2 for further disclosures related to pledges receivable. 11 Yakima County Development Association, Inc. NOTES TO FINANCIAL STATEMENTS December 31, 2020 and 2019 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued k. Advertising The Association expenses advertising, marketing, and promotional costs as incurred. During the years ended December 31, 2020 and 2019, the Association had advertising costs of $14,615 and $13,165, respectively. 1. Functional allocation of expenses The costs of providing the Association's program services have been summarized on a functional basis in the statement of functional expenses. Most expenses can be directly allocated to either a program, fundraising, or supporting function. Costs that are not directly associated with providing specific program services have been allocated based on the relative time spent by employees in providing these services. Staff members maintain their time by function and certain expenses, such as rent, telephone and utilities, and office supplies are allocated based on the share of employee time recorded to each function. Other expenses are coded to the appropriate functional categories based on the type and nature of the expense. m. Income taxes The Association is exempt from federal income tax under section 501(c)(6) of the Internal Revenue Code. The Association currently has no unrelated business income and accordingly, no provision for income taxes has been recorded. The organization adopted Accounting Standards Codification (ASC) 740-10, relating to accounting for uncertain tax positions. The organization does not have any uncertain tax positions. The organization files an exempt organization tax return in the U.S. federal jurisdiction and is no longer subject to examination by taxing authorities for returns filed more than three years previous. n. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. o. Reclassifications Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. The reclassifications had no effect on the change in total net assets for 2019. 12 Yakima County Development Association, Inc. NOTES TO FINANCIAL STATEMENTS December 31, 2020 and 2019 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued p. Subsequent events These financial statements considered subsequent events though October 27, 2021, the date the financial statements were available to be issued. Effective January 1, 2021, the Association has reorganized to operate as an exempt organization under section 501(c)(3) of the Internal Revenue Code. In January, 2021, the Association returned unspent grant funds of $767,648 to Yakima County. See notes le and 3. In February, 2021, the Association received a PPP loan of $78,270 from Wells Fargo and obtained forgiveness of this loan in September, 2021. NOTE 2 — PLEDGES RECEIVABLE Beginning in 2018, the Association initiated its Capital Campaign 8, which is expected to conclude by December 31, 2023. Included in pledges receivable are the following unconditional promises to give at December 31: Unrestricted Government agencies Other Restricted to future periods Government agencies Other Total unconditional promises to give Less unamortized discount Less allowance for uncollectible pledges Amounts due in Less than one year One to five years 2020 2019 $ 255,250 291,892 $ 225,250 316,575 439,500 644,250 566,100 882,225 1,552,742 2,068,300 (100.431) (233,276) 1,452,311 1,835,024 (140.078) (165,464) $ 1,312,233 $ 1,669,560 $ 497,782 $ 498,479 814,451 1,171,081 $ 1,312,233 $ 1,669,560 The unamortized discount was computed using an annual rate of 8.0% for 2020 and 7.5% for 2019. All Capital Campaign 8 pledges are conditional pledges based primarily on the donor's ability to contribute and pledges made verbally. In accordance with generally accepted accounting principles (GAAP), conditional pledges to give are not recognized until the conditions are substantially met. Management of the Association has chosen to recognize pledges received in the year the pledges are made and treat them like unconditional promises to give. See note lh. This is a departure from GAAP. 13 Yakima County Development Association, Inc. NOTES TO FINANCIAL STATEMENTS December 31, 2020 and 2019 NOTE 2 — PLEDGES RECEIVABLE - Continued If the Association were to comply with generally accepted accounting principles, no Capital Campaign 8 receivables would be recognized, and current pledges receivable would decrease by $497,782 and $498,479 and long-term pledges receivable would decrease by $814,451 and $1,171,081 at December 31, 2020 and 2019, respectively. The Association's net assets would change by the decreases in pledges receivable noted above. The impact on the change in net assets for the years ended December 31, 2020 and 2019 has not been determined. Management of the Association believes that historical actions of and current relationships with the donors support full recognitions of the pledges. Due to recent economic events described in note 10, the Association increased its estimate of uncollectible amounts for 2021 to 10% from its original estimate of 7%. Uncollectible amounts for 2022 and 2023 are estimated to be 7% of pledges outside of any pledges specifically reserved for by the allowance for uncollectible pledges. NOTE 3 — GRANT REVENUE The Association received funding of approximately $11.9 million related to the COVID-19 pandemic (see note 10) during the year ended December 31, 2020. The Association's typical annual operating budget is generally less than $1 million. In a typical year approximately 70% of the operating budget is derived from the collection of campaign pledges from businesses, people, and governmental agencies in Yakima County. As described in note 1 p, in January 2021 the Association repaid $767,648 to Yakima County for grant funds provided to the Association that were not used to provide grants within the community before the grant deadline. Yakima County provided $8,000,000 of grant funds to the Association and this represented the majority of the unexpended grant funds on the statement of financial position at December 31, 2020. Grant revenue listed below is less than the contracts with the respective entities as not all funds were expended. Additionally, the difference between CARES grants revenue and awards made represents administrative costs incurred by the Association and reimbursed through the grants. The majority of the awards made were to aid small businesses throughout the region by providing micro -grants of up to either $5,000 or $10,000, depending on the contact jurisdiction. As a result of these grants being funded by federal funding, the Association was required to obtain a Single Audit under the requirements of 2 CFR Part 200. The required schedule of federal expenditures (SEFA) and related reports and disclosures are included following the footnotes. 14 Yakima County Development Association, Inc. NOTES TO FINANCIAL STATEMENTS December 31, 2020 and 2019 NOTE 3 — GRANT REVENUE - Continued Grant revenue and related awards to sub -recipients consisted of the following for the year ended December 31, 2020: Grant revenue Awards made CARES grants Yakima County $ 7,232,352 $ 7,081,105 City of Yakima 1,967,989 1,952,339 Washington Dept. of Commerce 1,015,800 970,800 City of Grandview 413,674 413,674 City of Toppenish 270,000 270,000 City of Sunnyside 241,270 241,270 City of Union Gap 171,762 171,762 City of Zillah 60,000 60,000 Working Washington, Small Business Emergency Grant Program (WA Dept. of Commerce) 430,920 430,920 Washington, Dept. of Commerce 127,039 - Yakima County, CDBG Grant 95,899 95,899 Other 40,700 Total $ 12,067,405 5 11,687,769 NOTE 4 — COMMITMENTS AND CONTINGENCIES In January, 2018, the Association made an agreement with Washington State University (WSU) through its Small Business Development Center (SBDC) to provide business advising and planning assistance to individuals or groups seeking assistance in the formation, development, growth, or stabilization of a business, along with other items outlined in the agreement. The Association was to pay $2,144 per month and provide in -kind office space worth $356 per month for a total of $2,500 per month. The agreement was effective until December, 2019 and was renewed through December, 2021. Following the renewal, the Association will pay $8,750 per quarter and provide in -kind office space, use, and support worth $4,280 per year. The Association will also provide marketing support and appropriate client referrals to the SBDC Advisor. In connection with the above agreement, in March, 2018, the Association entered into an agreement with the Kittitas County Chamber of Commerce for the provision of the WSU SBDC Business Advisor two days each month. Kittitas County Chamber of Commerce was required to pay $250 per month to the Association to offset the cost the Association paid to WSU. The agreement was effective until December, 2019. 15 Yakima County Development Association, Inc. NOTES TO FINANCIAL STATEMENTS December 31, 2020 and 2019 NOTE 5 — LEASES The Association leases office space under terms of a non -cancellable operating lease that requires minimum monthly payments of approximately $2,700 through April 30, 2022. Total rent expense for the years ending December 31, 2020 and 2019 amounted to $29,249 and $34,792. Future minimum lease payments are approximately as follows: 2021 - $32,400; and 2022 - $10,800. Additional rental costs may be incurred for common area maintenance and other agreed -upon expenses. The Association has an option to renew the lease for an additional three years. The option must be exercised 60 days prior to the April 30, 2022 lease expiration. NOTE 6 — RETIREMENT PLAN The Association has committed to an annual contribution to a retirement savings program for its employees. The Association has elected to match 3% of each eligible employee's compensation, provided the employee defers at least 3% of compensation. If the employee defers less than 3% of compensation, the matching contribution is dollar for dollar. The total contribution from the Association and the individual are limited to a maximum amount determined by reference to Internal Revenue Service regulations. The total amounts contributed by the Association to the retirement program were $6,959 and $3,991 for the years ended December 31, 2020 and 2019, respectively. NOTE 7 — RELATED PARTY TRANSACTIONS New Vision Foundation (the Foundation) was formed in 2004 as a nonprofit organization under IRS code section 501(c)(3). The Foundation was established to provide support to the Association. A separate and independent Board of Directors is responsible for the Foundation. Revenues of the Foundation are paid to the Association as a grant for activities that fulfill the original donor's intent for use of funds that also meet the mission of the Foundation. Approximately $18,500 and $20,000 was transferred to the Association for the years ended December 31, 2020 and 2019, respectively. Approximately $12,500 was transferred in fulfillment of a prior year pledge, and $6,000 for the Enterprise Challenge Program during the year ended December 31, 2020, and approximately $15,000 was transferred in fulfillment of a prior year pledge, and $5,000 for the Enterprise Challenge Program during the year ended December 31, 2019. NOTE 8 — NET ASSETS RELEASED FROM RESTRICTION The Association's net assets with restrictions consist of pledges receivable that are due in more than one year, net of uncollectible amounts and unamortized discounts. See note 2 for details of pledges receivable and related amounts. The net assets released from restriction largely consist of the pledges that were due during the year offset by current period changes in long-term pledges receivable and the bad debt expense related to the long-term pledges receivable. 16 Yakima County Development Association, Inc. NOTES TO FINANCIAL STATEMENTS December 31, 2020 and 2019 NOTE 9 — LIQUIDITY AND AVAILABILITY OF FUNDS The Association's financial assets available for general expenditures, that is, without donor or other restrictions limiting their use (pledges receivable are subject to implied time restrictions, but are expected to be collected within one year), within one year of the statement of financial position date, are as follows: 2020 2019 Cash and cash equivalents $ 1,190,717 $ 182,126 Certificate of deposit 63,432 63,233 Current pledges receivable, net 497,782 498,479 Grants receivable 42,292 32,945 Other receivables 25,500 21,208 Financial assets available to meet cash needs for general expenditures within one year $ 1,819,723 $ 797,991 The Association's goal is to maintain two financial asset reserve funds for the next three years. The first reserve fund consists of cash and cash equivalents of $190,000, to be kept in checking and savings accounts, to provide adequate cash flow for the Association's day-to-day operations, and short-term investments of $110,000, to be easily accessed in the event of unforeseen shortfalls. These amounts represent approximately 50% of the Association's annual personnel and operating expenses. The second reserve fund will build and maintain funds to support the expenses related to the Association's next capital campaign. Once the first reserve is fully funded, the Association will fund the second reserve until it reaches $50,000. These funds are to be held in short-term interest -bearing accounts that can easily be accessed upon the start of the next capital campaign. The cash and cash equivalents as of December 31, 2020 includes funds that were paid back to Yakima County for unexpended grant funds. See notes lo and 4. NOTE 10 — NOVEL CORONAVIRUS OUTBREAK On March 13, 2020, President Trump declared a national emergency over the novel coronavirus or COVID-19. In response to the outbreak, many state and local governments restricted public gatherings for various periods of time. The Association has been impacted in various ways by the pandemic, including disruptions or restrictions on employees' ability to work, collectability of receivables, increased grant contracts to assist with economic stability (note 3). As a result of the $12 million in grant revenue received in 2020, the Association hired additional employees to facilitate the awards made to subrecipients, maintain proper documentation of the grants and related awards, and for compliance with the grants. This revenue and related costs are recorded on the statement of activities on a net basis. The Association received approximately $225,000 of administrative reimbursements from these contracts. Other grants that are typically received on an annual basis were also received during the year in addition to these CARES and Washington Department of Commerce grants. 17 REPORT REQUIRED BY GOVERNMENT AUDITING STANDARDS 18 BRENT R. MICKELSEN, C P.A. THOMAS W BLODGETT, C PA TRAVIS B. ADAMSON, C PA DEREK B. MOODY, C PA BLODGETT, MICKELSEN & ADAMSON, P.S. CERTIFIED PUBLIC ACCOUNTANTS 7139 W. DESCHUTES AVE., SUITE 102 KENNEWICK, WA 99336 TELEPHONE: (509) 735-0379 FACSIMILE: (509) 735-0646 MEMBERS WASHINGTON STATE SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of Directors Yakima County Development Association, Inc. Yakima, Washington We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Yakima County Development Association, Inc. (the Association) (a nonprofit organization), which comprise the statement of financial position as of December 31, 2020, and the related statements of activities, functional expenses, changes in net assets, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated October 27, 2021. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Yakima County Development Association, Inc.'s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Association's internal control. Accordingly, we do not express an opinion on the effectiveness of the Association's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Association's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. 19 Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether Yakima County Development Association, Inc.'s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Association's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Association's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. BIl)4 Rielefte4 & Norio, P, s Kennewick, Washington October 27, 2021 20 REPORTS AND SCHEDULES REQUIRED BY UNIFORM GUIDANCE 21 BRENT R MICKELSEN, C PA THOMAS W BLODGETT, C PA TRAVIS B ADAMSON, C PA DEREK B MOODY, C PA BLODGETT, MICKELSEN & ADAMSON, P.S. CERTIFIED PUBLIC ACCOUNTANTS 7139 W DESCHUTES AVE., SUITE 102 KENNEWICK, WA 99336 TELEPHONE: (509) 735-0379 FACSIMILE. (509) 735-0646 MEMBERS WASHINGTON STATE SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE Board of Directors Yakima County Development Association, Inc. Yakima, Washington Report on Compliance for Each Major Federal Program We have audited Yakima County Development Association, Inc.'s (the Association) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on the Association's major federal programs for the year ended December 31, 2020. The Association's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the Association's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Association's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the Association's compliance. 22 Opinion on Each Major Federal Program In our opinion, Yakima County Development Association, Inc. complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2020. Report on Internal Control over Compliance Management of the Association is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Association's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Association's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Purpose of Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Mitat, /fiia� Sr t4daArear, P.S. Kennewick, Washington October 27, 2021 23 Yakima County Development Association, Inc SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended December 31, 2020 Federal Grantor/Pass-through Grantor/Program Title CFDA Contract Federal Number Number Expenditures Department of Housing and Urban Development Pass -through from Washington State Department of Commerce through Yakima County COVID-19 - Community Development Block Grants 14 228 CDBG-COVID-19-2020 Mod 1 $ 95,899 Total Department of Housing and Urban Development 95,899 Department of Commerce Pass -through from Impact Washington Manufacturing Extension Partnership 11 611 YAKIMA2020IMPACT 14,400 Total Department of Commerce 14,400 Department of the Treasury Pass -through from Washington State Department of Commerce through Yakima County COVID-19 - Coronavirus Relief Fund Pass -through from City of Yakima COVID-19 - Coronavirus Relief Fund Pass -through from Washington State Department of Commerce - Office of Economic Development & Competitiveness COVID-19 - Coronavirus Relief Fund Pass -through from City of Grandview COVID-19 - Coronavirus Relief Fund Pass -through from City of Toppenish COVID-19 - Coronavirus Relief Fund Pass -through from City of Sunnyside COVID-19 - Coronavirus Relief Fund Pass -through from City of Union Gap COVID-19 - Coronavirus Relief Fund Pass -through from City of Zillah COVID-19 - Coronavirus Relief Fund Total Department of the Treasury Total expenditures of federal awards * Major federal program * 21 019 * 21 019 CARES-COVID-19-2020 7,232,353 N/A 1,967,339 * 21 019 SWV0007855-00 1,015,800 * 21.019 N/A 358,000 * 21 019 N/A 270,000 * 21 019 N/A 241,270 * 21 019 CARES-YCDA 171,762 * 21 019 N/A 60,000 11,316,524 $ 11,426,823 See accompanying notes to schedule of expenditures of federal awards. 24 Yakima County Development Association, Inc. NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS December 31, 2020 NOTE 1— BASIS OF PRESENTATION The accompanying and preceding schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of Yakima County Development Association, Inc. (the Association) for the year ended December 31, 2020 and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Basis of accounting Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Association has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. b. Matching costs The Schedule does not include any matching costs or expenditures related to its federal programs. The Association received grant funding from the State of Washington during 2020 that was similar in nature to federal funds obtained and expended. These were not matched funds and are not included in the Schedule. NOTE 3 — COVID-19 GRANTS The Association obtained contracts with multiple local governments as detailed in note 3 of the financial statements. These contracts were primarily funded by the CARES Act with federal funding being passed through to the Association by local city and county governments. The Association was able to utilize approximately 90% of the contracts awarded by providing immediate assistance to small businesses impacted by the COVID-19 pandemic. The contracts predominantly required funds to be provided to impacted local businesses by the end of 2020, although some contracts allowed businesses to obtain funds through June 30, 2021. 25 Yakima County Development Association, Inc. SCHEDULE OF FINDINGS AND QUESTIONED COSTS December 31, 2020 Section I - Summary of Auditor's Results Financial Statements Type of auditor's report issued: Qualified Internal control over financial reporting: • Material weakness identified? Yes X No • Significant deficiency identified? Yes X None Reported • Noncompliance material to financial statements noted? Yes X No Federal Awards Type of auditor's report issued on compliance for major programs: Unqualified Internal control over major federal programs: • Material weakness identified? Yes X No • Significant deficiency identified? Yes X None Reported Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? Identification of major program: CFDA Number 21.019 Yes X No Name of Federal Program Coronavirus Relief Fund Dollar threshold used to distinguish between type A and type B programs: $750,000 Auditee qualified as low -risk auditee? Yes X No 26 Yakima County Development Association, Inc. SCHEDULE OF AUDIT FINDINGS AND QUESTIONED COSTS - CONTINUED December 31, 2020 Section II - Financial Statement Findings There are no findings to report for 2020. Therefore, no corrective action plan is necessary, nor has one been prepared. Section III - Federal Award Findings and Questioned Costs There are no matters to report for 2020. Therefore, no corrective action plan is necessary, nor has one been prepared. 27 Yakima County Development Association, Inc. SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS December 31, 2020 Yakima County Development Association, Inc. (the Association) did not have an audit performed under the Uniform Guidance for the previous year. Therefore, there are no matters to report in this schedule for the year ended December 31, 2019. The requirement to have an audit performed under the Uniform Guidance for the Association arose from various grants awarded during the year under the CARES ACT (Coronavirus Relief Fund) and other government programs. The grants were awarded to be used for providing immediate assistance to small businesses impacted by the COVID-19 pandemic and similar purposes. The Association received nearly $13.5 million in grant awards/contracts in federal funds during 2020 with approximately $11.5 million of federal funds being expended during the year. As federal funds received exceeded $750,000, an audit was performed under the Uniform Guidance. The Association does not regularly receive significant amounts federal funds as part of its normal operations. 28 BRENT R MICKELSEN, C.P.A. THOMAS W BLODGETT, C PA TRAVIS B ADAMSON, C PA DEREK B MOODY, C PA BLODGETT, MICKELSEN & ADAMSON, P.S. CERTIFIED PUBLIC ACCOUNTANTS 7139 W. DESCHUTES AVE., SUITE 102 KENNEWICK, WA 99336 TELEPHONE• (509) 735-0379 FACSIMILE: (509) 735-0646 Board of Directors Yakima County Development Association MEMBERS WASHINGTON STATE SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS We have audited the financial statements of Yakima County Development Association (the Association) for the year ended December 31, 2020 and have issued our report thereon dated October 27, 2021. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter dated August 2, 2021. Professional standards also require that we provide you with the following information related to our audit. Significant Audit Matters Qualitative Aspects ofAccounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Association are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2020. We noted no transactions entered into by the Association during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were the allowance for uncollectible pledges, the discount rate for discounting long-term receivables, and the recovery periods for fixed assets. Management's estimate of the allowance for uncollectible pledges is based on historical loss levels and an analysis of the collectability of individual accounts. The discount rate used for discounting long-term receivables is based on management's estimate of the Association's internal rate of return. Management's estimate of the recovery periods of fixed assets is based on accepted industry standards. We evaluated the key factors and assumptions used by the Association to develop the the allowance for uncollectible pledges, the discount rate for discounting long-term receivables, and recovery periods of fixed assets and determined them to be reasonable in relation to the financial statements taken as a whole. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were: • Pledges receivable • Grant revenue • Novel Coronavirus outbreak The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no difficulties in dealing with management in performing and completing our audit other than difficulties stemming from the COVID-19 pandemic and related restrictions. The Association was well prepared, organized, and provided accurate and timely responses to information requests. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole. Audit adjustments for the year ended December 31, 2020 identified by management and posted during the audit process consisted of the following: • Adjusting entry to record depreciation expense for the year • Adjusting entry to record in -kind contributions for the year • Reclassifying entries to pledges receivables balances and for pledges released from restrictions during the year for reporting purposes Audit adjustments for the year ended December 31, 2020 identified as a result of audit procedures and posted by management during the audit process consisted of the following: • Adjusting entry to record SBDC contract payable as of December 31, 2020 • Adjusting entry to correct prepaid expenses to actual as of December 31, 2020 • Adjusting entry to record AJE-101 from the 2019 compilation that had not yet been posted by the Association Disagreements with Management For purposes of this letter, a disagreement with management is a disagreement on a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit and that all personnel were cooperative and responsive. Management Representations We have requested certain representations from management that are included in the management representation letter dated October 27, 2021. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the Association's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters This information is intended solely for the use of the Board of Directors and management of Yakima County Development Association and is not intended to be, and should not be, used by anyone other than these specified parties. Please contact us to discuss any items in further detail. We appreciate the opportunity to be of service to the Association. Very truly yours, gaper,Addreir &,4Iaerear, Ps Kennewick, Washington October 27, 2021