City of Hercules
111 Civic Drive
Hercules, CA 94547
Report to City Council on
Measure B and C Revenue
for Fiscal Year 2021
Prepared by Finance Commission
Measure B and Measure C Sub-Committee:
Commissioner Dennis Esselsagoe
Commissioner Edward Ulle
Prepared May 18, 2022
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
Table of Contents
• Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 • Conclusions
o Measure B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 o Measure C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 • Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 • Reporting Period and Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 • Actions Taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 • Findings
o Measure B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 o Measure C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 • Effect on General Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 • Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 • Appendices
o Appendix 1: Measure “O” Background . . . . . . . . . . . . . . . . . . . . . . . . . . 14 o Appendix 2: Measure “A” Background . . . . . . . . . . . . . . . . . . . . . . . . . . 15 o Appendix 3: Measure “B” and Measure “C” Background . . . . . . . . . . . . 16 o Appendix 4: Finance Commission Background . . . . . . . . . . . . . . . . . . . 17
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
Purpose
This is the Annual Report by the Finance Commission as the Oversight Committee for Measure B - Transactions and Use Tax Revenues (originally adopted as Measure O in June 2012) and Measure C - Utility Users Tax Rate Revenues (originally adopted as Measure A in June 2013). This report fulfills the Finance Commission requirements specified in City of Hercules Municipal Code to:
● Provide oversight under Title 8 (Finance Revenue and Taxation), Chapter 9 (Temporary Transaction and Use Tax).
● Provide oversight under Title 8 (Finance Revenue and Taxation), Article 4 (Continuation of Increase to Utility Users Tax Rate).
Conclusions
Measure B:
For Fiscal Year ending June 30, 2021, the local add-on half cent (0.50%) transaction and sales tax revenues, approved by Hercules voters, was $1,847,749. These tax revenues were spent in accordance with the voter approved Measure O adopted in June 2012 and subsequently extended by the voter approved Measure B adopted November 2015.
Measure B would retain the half cent (0.50%) add-on until such time as the City Council determines it is no longer necessary.
Henceforth in this document, we will use Measure B to reference this voter approved measure.
Measure C:
For Fiscal Year ending June 30, 2021, the incremental two percent (2%) Utility User Tax (UUT) funds, approved by Hercules voters, was $1,287,687. These funds were spent in accordance with the voter approved Measure A adopted in June 2013 and subsequently extended by the voter approved Measure C adopted November 2015.
The City of Hercules established a UUT of six percent (6%) which will expire on January 1, 2025. In 2013 voters approved measure A which established a two percent (2%) increase to the UUT to a total of eight percent (8%) which would expire in 2018. In 2015 voters approved measure C which would extend the two percent (2%) UUT increase until January 1, 2025.
Henceforth in this document, we will use Measure C to reference this voter approved measures.
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
Recommendations
● Recommend that the incremental transaction and use tax provided for in Measure B be retained since the City of Hercules has not yet achieved long term financial stability with adequate financial reserves.
● Recommend that the incremental Utility User tax provided for in Measure C be retained since the City of Hercules has not yet achieved long term financial stability with adequate financial reserves.
● Monitoring of revenue from Measures B and C shall be a part of every regularly scheduled meeting of the Finance Commission.
Reporting Period and Scope
This annual report covers the Fiscal Year ending June 30, 2021. This report focuses on the General Fund because it provides the funding for the concerns expressed on the Measure B and Measure C ballot measures.
Actions Taken
The Finance Commission provided Oversight for Measure “B” and Measure “C” by the following actions:
1. The Finance Commission met seven time in 2021, on Feb. 17, Apr. 14, Apr. 28, May 19, May 26, July 21, Nov. 17, and on Mar. 16, 2022 to review various financial reports submitted to the commission by staff. The May 19 meeting included the review of the Finance Subcommittee Report on Measure B & C for FY 2020. The FY 2020 report was presented to the Hercules City Council at their June 8, 2021 meeting. On Mar. 16, 2022 the audited Measure B & C Revenues for FY 2021 were provided to the commission by staff, at which time a subcommittee was formed to prepare this report.
2. Reviewed the Budgets, Financial Reports and variance analyses for the Fiscal Year ending June 30, 2021.
3. Reviewed periodic Long-Term Forecasts and Working Cash Balance reports prepared by City of Hercules Finance staff.
4. Reviewed City of Hercules audited Annual Financial Reports for the fiscal years ending June 30, 2021.
5. Reviewed The Pun Group report on “Independent Accountants’ Report on Applying Agreed-Upon Procedures on Measure B Transactions and Use Tax Revenue” 6.
6. Reviewed The Pun Group report on “Independent Accountants’ Report on Applying Agreed-Upon Procedures on Measure C Utility Users Tax Rate Revenue” 12.
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
Findings
Measure B:
Measure B Transaction and Use Tax Revenue receipts are summarized as follows:
For Fiscal Year 2021 the tax revenue received for Measure B was $1,847,749. The budgeted tax revenue for Measure B was $1,181,0001. This resulted in a net excess revenue of $666,749.
Fiscal Year
(Ending June 30)
Actual Received Per General Ledger
20142 $952,255
20152 $863,323
20163 $1,181,605
20173 $1,130,251
20183 $1,275,479
20194 $1,403,874
20205 $1,473,913
20216 $1,847,749
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
Transaction and Use Tax revenue received in Fiscal Year 2021 under Measure B has been properly collected and paid into the General Fund as required per Ordinance 470 Section
8.9.12 “Use of Tax Proceeds” which states that “All proceeds of the tax levied and imposed under this Article shall be paid into the general fund for use by the City of Hercules.” This conclusion is based on the Finance Commission’s review of the City’s audited Annual Financial Reports, the Quarterly Financial Statements, and The Pun Group report on “Independent Accountants’ Report on Applying Agreed-Upon Procedures on Measure B Transactions and Use Tax Revenue” - January 19, 2022, which states that “Proceeds of taxes levied and confirmed under Measure B were paid into the City’s General Fund for use by the City with no exceptions”.
Measure C:
Measure C Utility Users Tax (UUT) Rate Revenues are summarized as follows:
For Fiscal Year 2021 the tax revenue received for Measure C was $1,287,687. The budgeted tax revenue for Measure C was $1,263,5001. This resulted in a net excess revenue of $24,187.
Fiscal Year
(Ending June 30)
Actual UUT w/
Measure C
Estimated UUT
w/o Measure C
Increase in
Revenue due
to Measure C
20147 $3,182,013 $2,201,950 $980,063
20157 $3,439,914 $2,163,601 $1,276,313
20168 $3,515,565 $2,224,000 $1,291,565
20179 $3,576,053 $2,306,607 $1,269,446
20189 $3,642,120 $2,310,030 $1,332,091
201910 $3,502,264 $2,219,720 $1,282,545
202011 $3,483,843 $2,200,886 $1,282,957
202112 $3,590,649 $2,302,961 $1,287,687
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
Utility Users Tax revenue received under Measure C has been properly collected and paid into the General Fund per Ordinance 481, Section 8-8.402 “Use of Additional Tax Proceeds” which states that “All proceeds of the tax levied and imposed under this Article shall be paid into the general fund fo r use by the City of Hercules”. This conclusion is based on the Finance Commission’s review of the City’s audited Annual Financial Report for the Fiscal Year ending June 30, 2021, and The Pun Group report on ““Independent Accountants’ Report on Applying Agreed-Upon Procedures on Measure C Utility Users Tax Rate Revenue” – January 19, 2022.
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
Effect on General Fund
The General Fund had a net increase in Fiscal Years ending June 30, 2014-June 30, 2019 as shown by the Annual Reports for each respective year. However, for Fiscal Year ending June 30, 2020 the General Fund had a net decrease, primarily due to the DOF Settlement of $1,812,075. For Fiscal Year ending June 30, 2021 the General Fund had a net surplus of $2,327,475 of which $766,219 was transferred, reducing the surplus to $1,561,256. $150,000 was received due to AB 3229 COPS grant for Public Safety, ($312,194) was transferred out for debt service payment for Suntrust Lease and for 2020 Library Lease Revenue Bond, and ($604,025) was transferred out for Department of Finance Due Diligence Review Annual Settlement payment.
Fiscal Year General Fund
Revenue13
General Fund
Expenses13
(Deficit) / Surplus
2014 $12,638,059 $11,200,782 $1,437,277
2015 $13,573,615 $10,213,252 $3,360,363
2016 $14,018,112 $11,046,540 $2,971,572
2017 $14,859,520 $11,784,637 $3,074,883
2018 $16,490,956 $12,929,170 $3,561,786
2019 $17,563,562 $14,615,734 $2,947,828
2020 $16,706,848 $18,541,346 ($1,834,498)
2021 $16,463,953 $14,136,478 $2,327,475
Measure B and Measure C revenues increased revenue to the General Fund starting in Fiscal Year 2014.
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
The following is a summary for the fiscal years ending June 30, 2014 through June 30, 2021:
Fiscal Year
Revenue Source
General Fund Measure B Measure C Total
2014 $10,844,803 $952,256 $841,000 $12,638,059
2015 $11,588,959 $863,323 $1,121,333 $13,573,615
2016 $11,544,942 $1,181,605 $1,291,565 $14,018,112
2017 $12,459,823 $1,130,251 $1,269,446 $14,859,520
2018 $13,883,386 $1,275,479 $1,332,091 $16,490,956
2019 $14,827,597 $1,403,874 $1,332,091 $17,563,562
2020 $13,949,978 $1,473,913 $1,282,957 $16,706,848
2021 $13,328,517 $1,847,749 $1,287,687 $16,463,953
Fiscal Year
Revenue Source
General Fund Measure B Measure C Total
2014 85.8% 7.5% 6.7% 100%
2015 85.4% 6.4% 8.3% 100%
2016 82.4% 8.4% 9.2% 100%
2017 83.9% 7.6% 8.5% 100%
2018 84.2% 7.7% 8.1% 100%
2019 84.4% 8.0% 7.6% 100%
2020 83.5% 8.8% 7.7% 100%
2021 81.0% 11.2% 7.8% 100%
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
Without the Measure B or Measure C revenues, the City would have had a deficit in Fiscal Year 2014 and would have had much smaller surpluses for the Fiscal Years 2015 through 2019 and a deficit for Fiscal Years 2020 and 2021.
The following is a summary for Fiscal Years ending June 30, 2014 to June 30, 2021 if Measure B and C Revenues were excluded.
Fiscal Year Revenue
(excluding Measures B & C)
Expenditures (Deficit) / Surplus
2014 $10,844,803 $11,200,782 $(355,979)
2015 $11,588,959 $10,213,252 $1,375,707
2016 $11,544,942 $11,046,540 $498,402
2017 $12,459,823 $11,784,637 $675,186
2018 $13,883,386 $12,929,170 $954,216
2019 $14,827,597 $14,615,734 $211,863
2020 $13,949,978 $18,541,346 ($4,591,368)
2021 $13,328,517 $14,136,478 ($807,961)
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
The General Fund is used to account for all revenue and expenditures necessary to carry out basic governmental activities of the City that are not accounted for through other funds. For the City, the General Fund includes such activities as police, planning, engineering, public works, operations and maintenance, and legal and administrative services.
The General Fund provides the funding for the issues expressed in the Measure “O” and Measure “A” ballot language:
1. Measure O (MeasureB): "Local Temporary Emergency Funding Measure. To address Hercules' Fiscal Emergency, stabilize city finances, offset budget shortfalls/the impact of State budget cuts on local services, prevent reductions to the number of police officers/crime investigators, protect/maintain crime prevention, childcare, youth sports and recreation programs and other general City services, shall the City of Hercules establish a 1/2 cent sales tax legally ending after 4 years, with Independent Citizens' Oversight, Independent Audits and no money for Sacramento?”
2. Measure A (Measure C): “City of Hercules Fiscal Accountability/Services Protection Measure. To restore Hercules to financial stability, enhance fiscal accountability, continue to maintain our own local Police Department, and prevent drastic cuts to neighborhood police officers, youth/senior programs, and other services, shall Hercules modernize its utility users tax with equal treatment of taxpayers regardless of technology, increase the rate by 2% for 5 years, maintain current low-income exemptions, with citizens’ oversight, independent audits, and local control of revenues.” Based on the impartial ballot analysis by the City Attorney, Measure “O” did not limit use of Measure “O” funding to a specific purpose:
“Because Measure O does not limit the use of tax revenue to a specific purpose, the proposed tax is a general tax, requiring a majority vote (approval by more than fifty percent (50%) of City voters voting in the election) for passage. Therefore, the City shall use the funds for a variety of purposes, including but not limited to addressing the City's Fiscal Emergency; increasing police officer staffing, which is below Recommended Safety Levels; maintaining cur rent levels of emergency services; providing additional funding for neighborhood police patrols, emergency response times, crime prevention and investigation resources; earthquake preparedness; after-school programs for children and teens; senior services; and parks.”
Based on the impartial ballot analysis by the City Attorney, Measure “A” did not limit the Measure “A” funding to a specific purpose:
“Because Measure A does not limit the use of tax revenue to a specific purpose, the City may use the funds for a variety of purposes, including but not limited to maintaining financial stability and accountability; maintaining the Hercules Police Department;
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
maintaining neighborhood police patrols, improving 9-1-1 response times; expanding neighborhood crime prevention programs; attracting business to Hercules; and preventing cuts to street maintenance.”
The City of Hercules balance in the Fiscal Neutrality Fund is $4,034,517 for Fiscal Year 2021 as reported in the 2020-2021 Annual Comprehensive Report, page 98.
Finance Commission Members:
Andrew Gabriel, Chair
Edward Ulle, Vice-Chair
Dennis Esselsagoe
Lori Risby
Orit Sampson
Report approved by the Finance Commission on May 18, 2022
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
References
1. Fiscal Year 2020-21 Annual Budget Pg. 87 (Measure O)
2. Fiscal Year 2014 and Fiscal Year 2015 were based on Gallina, LLP reports on Agreed Upon Procedures – Measure B for the periods July 1, 2012 through June 30, 2015
3. For periods July 1, 2016 through June 30, 2018 were based on CliftonLarsonAllen, LLP report on Agreed Upon Procedures – Measure O for the period ending June 30, 2016 and Agreed Upon Procedures- Measure B for the period ending June 30, 2017 and June 30, 2018.
4. For period July 1, 2018 through June 30, 2019 is based on CliftonLarsonAllen, LLP report “Measure B – Transaction and Use Tax Revenues, Agreed-Upon Procedures”, November 21, 2019.
5. For period July 1, 2019 through June 30, 2020 is based on The Pun Group report on Independent Accountants’ Report On Applying Agreed-Upon Procedures – Measure B for the period ending June 30, 2020
6. For period July 1, 2020 through June 30, 2021 is based on The Pun Group report on “Independent Accountants’ Report on Applying Agreed-Upon Procedures on Measure B Transactions and Use Tax Revenue” - January 19, 2022
7. For the periods July 1, 2013 through June 30, 2015 based on Gallina LLP’s reports on Agreed Upon Procedures for Measure A
8. For FY 2016 the CliftonLarsonAllen, LLP’s report “Agreed-Upon Procedures Measure A – Utility Users Tax Rate Revenues, June 30, 2016“
9. For FY 2017 and 2018 “Agreed Upon Procedures Measure C- Utility Users Tax Rate Revenues, June 30, 2017 and June 30, 2018”
10. For period July 1, 2018 through June 30, 2019 is based on CliftonLarsonAllen, LLP report on Agreed Upon Procedures – Measure C for the period ending June 30, 2019
11. For period July 1, 2019 through June 30, 2020 is based on The Pun Group report on Independent Accountants’ Report On Applying Agreed-Upon Procedures – Measure C for the period ending June 30, 2020
12. For period July 1, 2020 through June 30, 2021 is based on The Pun Group report on “Independent Accountants’ Report on Applying Agreed-Upon Procedures on Measure C Utility Users Tax Rate Revenue” – January 19, 2022
13. Audited Year End Results, including transfer to reserves and outstanding encumbrances.
14. Fiscal Year 2020-2021 Annual Budget page 31
15. General Fund Audited Results for FY 2021
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
Appendix 1: Measure “O” Background
On July 24, 2012, Measure O, “Transactions and Use Tax Revenues” was passed by a majority vote of the City of Hercules and the Hercules City Council passed and adopted Ordinance 470 amending the Hercules Municipal Code by establishing a four year temporary transactions and use tax of 0.50% to be administered by the State Board of Equal ization.
Per Section 8.9.13 of Ordinance 470:
“The Finance Commission, created pursuant to Title 2, Chapter 2, Article 6, shall meet pursuant to Section 2-2.607 to oversee expenditures of the revenues received by the City from the sales and use taxes imposed pursuant to this Chapter, and to ensure that tax revenues are spent by the City in a manner consistent with the voter approved measure adopting this Chapter as well as any voter approved or Council approved priorities adopted to implement the provisions of this Chapter. (Ord. 528 § 1 (part), 2020: Ord. 488 § 1 (part), 2015: Ord. 481 § 3 (part), 2014: Ord. 470 § 2 (part), 2012)”
Per Section 8-9.14 paragraph (a) of Ordinance 470:
(a) The Commission is charged with the following responsibilities: (1) reviewing all appropriations of revenues received by the City from the sales and use taxes imposed pursuant to the provisions of this Chapter to determine whether such funds are to be used as provided for in this Chapter and the voter approved measure that adopted this Chapter; (2) reviewing the audit prepared by an independent auditor retained by the City to perform the City’s Comprehensive Annual Financial Report to determine whether such funds have been spent as provided for in this Chapter and the voter approved measure; (3) prepare and issue the Commission’s own annual report setting forth their findings in regard to the foregoing; and (4) determining when the City has met its goal of achieving long term financial stability with adequate financial reserves, and issuing a report to Council detailing such findings, pursuant to Sec. 8-9.01(d).
(b) The Commission shall, for the purpose of fulfilling oversight responsibilities pursuant to Measure O, confine itself specifically to funds received by the City from the sales and use taxes imposed pursuant to the provisions of this Chapter.
(c) In order to preserve the integrity and independence of the oversight process, Commission members will not play a formal role in decision -making on spending priorities, financing plans, or tax rate projections or assumptions. (Ord. 488 § 1 (part), 2015: Ord. 481 § 3 (part), 2014:
Ord. 470 § 2 (part), 2012. Formerly 8-9.17)
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
On August 20, 2014, the Measure O Citizen’s Oversight Committee approved the Measure O Annual Report for the Fiscal Year 2013 (July 1, 2012 to June 30, 2013).
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
Appendix 2: Measure “A” Background
On June 4, 2013, Measure A “Utility Users Tax Rate Revenues” was passed by a majority vote of the City of Hercules and the Hercules City Council passed and adopted Ordinance 475 modernizing Title 8, Chapter 8 of the Hercules Municipal Code with respect to the existing 6% Utility Users Tax, and establishing a five year temporary increase of 2% to the Utility Users Tax. The Ordinance established citizens’ oversight with the existing Citizens Finance Advisory Committee (which became the Citizen’s Finance Commission) appointed by the Hercules City Council.
Per Section 8-8.404 of Ordinance 475,:
The Finance Commission, created pursuant to Title 2, Chapter 2, Article 6, or a subcommittee of the Commission established for this purpose, shall meet pursuant to Section 2-2.607 and review all revenues and expenditures under this Chapter in order to ensure that the funds are spent in accordance with the voter approved measure adopting this Chapter as well as any voter approved or Council approved priorities adopted to implement the provisions of this Chapter. (Ord. 528 § 1 (part), 2020: Ord. 489 § 1 (part), 2015: Ord. 481 § 2 (part), 2014: Ord. 475 § 1 (part), 2013)
Per Section 8-8.406 of Ordinance 475:
(a) The Commission is charged with the following responsibilities: (1) reviewing all appropriations of revenues received by the City from the sales and use taxes imposed pursuant to the provisions of this Chapter to determine whether such funds are to be u sed as provided for in this Chapter and the voter approved measure that adopted this Chapter; (2) reviewing the audit prepared by an independent auditor retained by the City to perform the City’s Comprehensive Annual Financial Report to determine whether such funds have been spent as provided for in this Chapter and the voter approved measure; (3) prepare and issue the Commission’s own annual report setting forth their findings in regard to the foregoing; and (4) determining when the City has met its goal of achieving long term financial stability with adequate financial reserves, and issuing a report to Council detailing such findings, pursuant to Section 8-8.409.
(b) In order to preserve the integrity and independence of the oversight process, Commission members will not play a formal role in contracting, project management, construction, or any other aspect of the funding. In addition, the Commission is not charged with decision -making on spending priorities, construction schedules, project details, fun ding source decisions (e.g., leveraged funds, developer fees, etc.), financing plans, tax rate assumptions, or selection of consultants, design, and construction firms. (Ord. 489 § 1 (part), 2015: Ord. 481 § 2 (part), 2014: Ord. 475 § 1 (part), 2013)
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
Appendix 3: Measure “B” and Measure “C” Background
On July 28, 2015 the Hercules City Council unanimously approved placing the City of Hercules Financial Stability and Essential Services Continuation Measures, on the November 3, 2015 ballot to protect and maintain essential city services and fiscal stability.
On November 3, 2015, Measure B, “Transactions and Use Tax Revenues” was passed by a majority vote of the City of Hercules. Measure B extends indefinitely the Measure “O” half-cent per dollar local sales tax previously scheduled to end in 2016.
Measure B states, “Whereas the tax extension would be in effect until the Finance Commission finds, and the City Council approves by a 2/3 vote, that the City has achieved long term financial stability with adequat e financial reserves.” On November 3, 2015, Measure C “Utility Users Tax Rate Revenues” was passed by a majority vote of the City of Hercules. Measure C extends the Measure “A” 2 percent utility user’s tax that was previously scheduled to sunset in 2018, now scheduled to sunset in 2025.
Measure C states, “Measure C would extend the 2013 voter approved two percent (2%) UUT increase. If adopted, Measure C would make the eight percent (8%) total rate effective until January 1, 2025. The City Council could terminate the two percent (2%) increase at any time before January 1, 2025 and reduce the total UUT rate to six percent (6%) either on its own initiative or at the recommendation of the City’s Finance Commission upon a determination that the addition al two percent (2%) increase provide for in Measure C is no longer necessary because the City has met its goal of achieving long term financial stability with adequate financial reserves.”
City of Hercules Finance Commission
Measure B and Measure C Annual Report
Fiscal Year Ending June 30, 2021
Appendix 4: Finance Commission Background
On November 23, 2014, the Hercules City Council passed and adopted Ordinance 481 amending the Hercules Municipal Code as follows:
1. Added Title 2, article 6, Section 202.601 through Section 2-2.609 to create the Finance Commission.
2. Amended Title 8, Chapter 8, Article 4, to provide for the Finance Commission oversight of Measure A, “Utility Users Tax Rate Revenues”
3. Amended Title 8, Chapter 8, Article 9, to provide for the Finance Commission oversight of Measure O, “Transactions and Use Tax Revenues”
Per Section 2.2.609 of Ordinance 481:
The Finance Commission shall be advisory to the City Council with no authority to direct staff, and shall have the following duties:
(a) Quarterly review of City’s financial status; review and comment on audit reports; review and comment on the proposed budget; and review and comment on items of extraordinary financial impact.
(b) Make recommendations to the City Council with respect to budget priorities. (c) Review and comment on the City’s annual operating and capital improvement budgets. (d) Advise the City Council on matters of policy and public interest related to the management of the City’s finances and budget.
(e) Serve as the Oversight Committee for Measure “A,” including providing an annual report, to ensure that utility user tax funds are spent in accordance with the voter approved measure adopted in June 2013.
(f) Serve as the Oversight Committee for Measure “O,” including providing an annual report, to ensure that the sales tax revenues approved by Hercules voters are spent in accordance with the voter approved measure adopted in June 2012.
(g) Take on any additional review and advisory functions assigned by the City Council by duly adopted resolution. (Ord. 519 § 2 (part), 2019: Ord. 481 § 1 (part), 2014)