City of Hercules
Hercules, California
Independent Accountants Report on
Applying Agreed-Upon Procedures
on Measure N Utility Users Tax Rate Revenues
For the Year Ended June 30, 2023
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 assisting the City of Hercules, California (the City) in evaluating whether the Measure N (formerly known as Measure C) Utility Users Tax Rate Revenues (UUT) is in accordance with the provisions of this measure for the year ended June 30, 2023. The City's management is responsible for the receipt of Measure N - Utility Users Tax Rate Revenues and deposit of such proceeds into the City's General Fund. The City is responsible for compliance with Measure N 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 N Utility Users Tax Rate Revenues is in accordance 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 2022/23 - Expected UUT VS Actual UUT
b) FY 2022/23 - Increase in Revenues Generated by Measure N Findings:
a) Actual UUT agreed to receipts recorded in the Citys general ledger with no exceptions. Schedule recalculated for mathematical accuracy with no exceptions.
Type of Utility
Estimated Utility
Billings
(FY 22/23
Utility Billings
as a Base) Ex pected UUT¹
Actual
UUT Variance % Variance
Electricity 17,150,000$ 1,372,000 $ 1,546,371 $ 174,371 $ 12.71% Telephone 6,037,500 483,000 460,077 (22,923) -4.75% Gas 5,625,000 450,000 749,243 299,243 66.50% Water 9,700,000 776,000 713,884 (62,116) -8.00% Cable 6,350,000 508,000 526,699 18,699 3.68%
Totals 44,862,500$ 3,589,000 $ 3,996,274 $ 407,274 $ 11.35% FY 2022/23 - Ex pected 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 recalculated for mathematical accuracy with no exceptions.
Type of UtilityActual UUT with Measure A¹Estimated UUT without Measure A²Increase in Revenue due to Measure AIncrease/Decrease in Revenue per Staff Report³Variance % VarianceElectricity 1,546,371 1,159,779 386,592 404,272 17,680 4.37%Telephone 460,077 345,058 115,019 95,949 (19,070) -19.88%Gas 749,243 561,932 187,311 214,478 27,167 12.67%Water 713,884 535,413 178,471 203,070 24,599 12.11%Cable 526,699 - 526,699 492,750 (33,949) -6.89% Totals 3,996,274 2,602,182 1,394,092 1,410,519 16,427 1.16%¹ Based on the actual UUT collected for FY 2022/2023 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 21/22 & FY 22/23.FY 2022/23 -Increase in Revenue Generated by Measure N (formely known as Measure C)
2. We traced the proceeds of the Measure N 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 the City, with no exceptions.
We were engaged by the City to perform 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 N Utility Users Tax Rate Revenues of the City for the year ended June 30, 2023. 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 meet 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.
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