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, 2024
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 Utility Users Tax Rate Revenues (UUT) is in accordance with the provisions of this measure for the year ended June 30, 2024. 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, and 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 Utility Users Tax (UUT) to the receipts recorded in the Citys general ledger and recalculated the mathematical accuracy of the following schedules provided by the City for the year ended June 30, 2024:
a. Schedule of Expected UUT vs. Actual UUT:
Type of Utility
Estimated Utility
Billings
(FY 23/24
Utility Billings
as a Base) Expected UUT¹
Actual
UUT Variance % Variance
Electricity 18,895,238 $ 1,511,619 $ 1,708,846$ 197,227 $ 13.05% Telephone 4,939,950 395,196 443,848 48,652 12.31% Gas 7,488,388 599,071 577,391 (21,681) -3.62% Water 9,894,000 791,520 788,337 (3,183) -0.40% Cable 5,740,338 459,227 492,744 33,517 7.30% Totals UUT 46,957,914$ 3,756,633 $ 4,011,166$ 254,532 $ 6.78% ¹ Based on UUT of 8% of estimated utility billings.
FY 2023/24 -Expected UUT vs Actual UUT
To the Honorable Mayor and Members of the City Council
of the City of Hercules
b. Schedule of Increase in Revenues Generated by Measure N:
Type of Utility
Actual UUT
with Measure N¹
Estimated UUT
without Measure
N²
Increase in
Revenue due to
Measure N
Increase/
Decrease in Revenue
per Staff Report³ Variance % Variance
Electricity 1,708,846 $ 1,281,635 $ 427,212 $ 470,686 $ 43,474 $ 9.24% Telephone 443,848 332,886 110,962 90,790 (20,172) -22.22% Gas 577,391 433,043 144,348 192,166 47,818 24.88% Water 788,337 591,253 197,084 201,026 3,942 1.96% Cable 492,744 - 492,744 445,436 (47,308) -10.62% Totals 4,011,166$ 2,638,817 $ 1,372,350$ 1,400,104 $ 27,754 $ 1.98% ¹ Based on the actual UUT collected for FY 2023/2024 at a rate of 8% for the entire year. ² Based on a rate of 6% UUT on electricity, telephone, gas and water, and no UUT on cable. ³ Based on the Adopted Budget for FY 22/23 & FY 23/24.
FY 2023/24 -Increase in Revenue Generated by Measure N
Findings: No findings were noted as a result of the above procedures.
2. We traced and verified that the 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, in accordance with Ordinance 475 Sec 8-8.402 Use of Tax Proceeds and Ordinance 481 Sec 8-8.402 Use of Tax Proceeds.
Findings: No findings were noted as a result of the above procedures.
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, 2024. 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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