Response from Carmichael Water District

R1

1 Directors should review their by-laws every four years to assure compliance with applicable laws, ethical practices, and appropriate behavior. CWD Response: Carmichael Water District has by-laws and Board of Director policies in place to assure compliance with applicable laws (See attached by-laws and Policies 7000-7150. By-laws and policies are reviewed every 3 to 4 years or sooner if the need arises to maintain compliance with applicable laws. Directors have a policy in place for Code of Ethics (Policy 7010) to ensure understanding of ethical practices and appropriate behavior. In addition, all Directors attend Ethics training upon membership to the Board and every two years to assure compliance with ethical practices.

R2

1 All [SDs should encourage education and training, but should not make direct monetary (cash) awards for educational achievement. CWD Response: Carmichael Water District encourages its employees to continually improve and grow through continuing education opportunities through District supplied training and other outside training opportunities. Per Policy 4050 —- Employee Training, Education and Conference, the District will reimburse specific expenses to employees on pre-approved educational opportunities. Carmichael Water District does not offer direct monetary (cash) awards for educational achievement through bonuses or one-time cash payments.

R3

1 All ISDs should adopt pension and OPEB plans that are fair, affordable and sustainable. CWD Response: Carmichael Water District policy is that the salary and benefits for the District enable the District to keep pace with the economy and remain reflective of and competitive with water agencies in the region (Policy 4040 — Salary Range — Performance Step Program). The District utilizes the ACWA salary and benefits survey to complete a salary and benefits survey every 3 years of Zone 4 “like agencies”. The agencies include: Citrus Heights Water District, City of Folsom, City of Roseville, City of Sacramento, El Dorado Irrigation District, Elk Grove Water Service, Fair Oaks Water District, Placer County Water District, Sacramento County Water, Sac Suburban Water District and San Juan Water District. In addition, the District completed an analysis of the CalPERS Employer Contribution Rates for FY 2009- 2010 from the CalPERS website. Results of the CalPERS Employer Contribution Rates (see table below) show that Carmichael Water District has the lowest Employer Contribution Rate of all surveyed agencies with a rate of 2.870%. By Policy 4070 — PERS Contribution, the District will pick up a portion of the employee’s contribution when its rate is under 7% to contribute a maximum of 7% total to employee retirement which is fair, affordable and sustainable. TABLE: CalPERS Employer Contribution Rates FY 2009-2010 Tier 1% Tier 2% Carmichael Water District 2.870 Citrus Heights Water District 16.476 City of Folsom 16.180 City of Roseville 15.088 City of Sacramento 11.222 El Dorado Irrigation District 16.703 Elk Grove Water Service 15.021 Fair Oaks Water District 6.929 Placer County Water 14,634 Sacramento County 10,167 Sac Suburban Water District 22.535 9.065 San Juan Water District 25.635 11.698

R4

1 Every ISD in Sacramento County should establish and adhere to a goal of minimizing no-bid purchasing. Essentially all purchases except utilities and emergency construction should be by contracts awarded to the lowest responsive responsible bidders. CWD Response: Carmichael Water District has Regulation 3020 — Purchasing which defines all purchases: Under $500 = request for prices Greater than $500 but less than $25,000 = Request for Bid/Quotation Greater than $25,000 = Formal Bid Process ~ Request for Proposal Emergency affecting public health and safety of operations of the District District staff strictly adheres to this regulation in all purchases by and for the District.

R5

1 All ISDs must complete and file the required annual Independent Financial Audit. CWD Response: Carmichael Water District goes out for Request for Proposal for Audit Services every 4-5 years. A selection committee reviews the proposals and interviews prospective firms to determine a firm for selection and recommendation to the full Board. A firm is engaged as the District’s Independent Financial Auditor upon Board approval for annual audit for a period up to five consecutive years.