City of Hercules
Hercules, California
Independent Accountants’ Report on
Applying Agreed-Upon Procedures
on Measures C Utility Users Tax Rate Revenues
For the Year Ended June 30, 2021
INDEPENDENT ACCOUNTANTS’ REPORT
ON APPLYING AGREED-UPON PROCEDURES
To the Honorable Mayor and Members of City Council
of the City of Hercules
Hercules, California
We have performed the procedures enumerated below on assi sting the City of Hercules (the “City”) in evaluating whether the Measure C Utility Users Tax Ra te Revenues is in accordance with th e provisions of this measure for the year ended June 30, 2021. The City of Hercules' management is responsible for the receipt of Measure C - Utility Users Tax Rate Revenues and deposit of such proceeds into the City's General Fund. The City is responsible for compliance with Measure C Utility Users Tax Rate Revenues.
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of evaluating whether the Measure C U tility Users Tax Rate Revenues is in acco rdance with the provisions of this measure. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.
The procedures and associated findings are as follows:
1. We agreed the actual UUT to the receipts recorded in the City's general ledger and recalculated the mathematical accuracy of the following schedules provided by the City:
a) FY 2020/21 - Expected UUT VS Actual UUT
b) FY 2020/21 - Increase in Revenues Generated by Measure C
Findings:
a) Actual UUT agreed to receipts recorded in the City’s general ledger with no exceptions. Schedule recalculated for mathematical accuracy with no exceptions.
Type of Utility
Estimated Utility
Billings
(FY 20/21
Utility Billings
as a Base) Ex pected UUT*
Actual
UUT V ariance % V ariance
Electricity 15,800,000$ 1,264,000 $ 1,258,342 $ (5,658) $ -0.45% Telephone 8,850,000 708,000 528,509 (179,491) -33.96% Gas 5,212,500 417,000 530,463 113,463 21.39% Water 7,212,500 577,000 753,301 176,301 23.40% Cable 6,525,000 522,000 520,034 (1,967) -0.38% Totals UUT 43,600,000$ 3,488,000 $ 3,590,649 $ 102,649 $ 2.86% FY 2020/21 - Expected UUT vs Actual UUT
* Based on UUT of 8% of est imat ed ut ilit y billings 200 E. Sandpointe Ave., Suite 600, Santa Ana, California 92707 Tel: 949-777-8800 • Fax: 949-777-8850
www.pungroup.c
pa
3939352 Pun & McGeady_L_final.pdf 2 1/14/14 3:48 PM To the Honorable Mayor and Members of the City Council
of the City of Hercules
b) Schedule recalculated for mathematical accuracy with no exceptions.
Type of Utility
Actual UUT
with Measure
A*
Estimated UUT
without
Measure A**
Increase in
Revenue due to
Measure A
Increase/
Decrease in
Revenue per Staff
Report*** V ariance % V ariance
Electricity 1,258,342 $ 943,757 $ 314,586 $ 306,351 $ (8,234) $ -2.69% Telephone 528,509 396,382 132,127 111,992 (20,135) -17.98% Gas 530,463 397,847 132,616 149,728 17,112 11.43% Water 753,301 564,976 188,325 200,096 11,770 5.88% Cable 520,034 - 520,034 519,279 (754) -0.15% Totals 3,590,649$ 2,302,961 $ 1,287,687 $ 1,287,446 $ (241) $ -0.02% * Based on the actual UUT collected for FY 2020/2021 at a rate of 8% for the entire year. ** Based on a rate of 8% UUT on electricity, telephone, gas and water, and no UUT on cable. *** Based on the Adopted Budget for FY 19/20 & FY 20/21.
FY 2020/21 - Increase in Revenue Generated by Measure C
2. We traced the proceeds of the Measure C tax, as listed in procedure 1.a) schedule to the City's General Fund for use by the City, in accordance with Ordinance 475 Sec 8-8.402 Use of Tax Proceeds and Ordinance 481 Sec 8-8.402 Use of Tax Proceeds (amends ordinance 475).
Findings: Proceeds of taxes as listed in schedule presented at 1.a) were paid into the City's General Fund for use by the City, with no exceptions.
We were engaged by the City to perfo rm this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Measure C Utility Users Tax Rate Revenues of the City for the year ended June 30, 2021. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
We are required to be independent of the City and to m eet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
This report is intended solely for the information and use of the City Council and the management of the City of Hercules and is not intended to be and should not be used by anyone other than these specified parties.
Santa Ana, California
January 19, 2022