City of Hercules
Hercules, California
Independent Accountants’ Report on
Applying Agreed-Upon Procedures
on Measure C Utility Users Tax Rate Revenues
For the Year Ended June 30, 2022
200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
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 Rate Revenues (UUT) is in accordance w ith the provisions of this measure for the year ended June 30, 2022. 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.
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 2021/22 - Expected UUT VS Actual UUT
b) FY 2021/22 - 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
Estim ated Utility
Billings
(FY 20/21
Utility Billings
as a Base) Ex pected UUT¹
Actual
UUT V ariance % V ariance
Electricity 16,400,000$ 1,312,000 $ 1,481,317 $ 169,317 $ 11.43% Telephone 7,237,500 579,000 544,949 (34,051) -6.25% Gas 4,912,500 393,000 528,678 135,678 25.66% Water 8,525,000 682,000 739,777 57,777 7.81% Cable 6,787,500 543,000 533,689 (9,311) -1.74% Totals 43,862,500$ 3,509,000 $ 3,828,410 $ 319,410 $ 8.34% FY 2021/22 - Expected UUT vs Actual UUT
* Based on UUT of 8% of estimated utility billings
To the Honorable Mayor and Members of the City Council
of the City of Hercules
b) Schedule reca lculated for mathematical accuracy with no exceptions.
Type of Utility
Actual UUT
with Measure
A¹
Estimated UUT
without
Measure A ²
Increase in
Revenue due to
Measure A
Increase/
Decrease in Revenue
per Staff Report³ V ariance % Variance
Electricity 1,481,317 1,110,987 370,329 383,878 13,549 3.53% Telephone 544,949 408,712 136,237 105,884 (30,353) -28.67% Gas 528,678 396,509 132,170 124,098 (8,071) -6.50% Water 739,777 554,833 184,944 196,503 11,559 5.88% Cable 533,689 - 533,689 615,855 82,166 13.34% Totals 3,828,410 2,471,041 1,357,369 1,426,218 68,849 4.83% ¹ Based on the actual UUT collected for FY 2021/2022 at a rate of 8% for the entire year. ² Based on a rate of 8% UUT on electricity, telephone, gas and water, and no UUT on cable. ³ Based on the Adopted Budget for FY 20/21 & FY 21/22.
FY 2021/22 -Increase in Revenue G enerated 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/deposited into the City's General Fund for use by t
he City, with no exceptions.
We were engaged by the City to perfo r m 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, 2022. 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 31, 2023