CITY
OF SANTA MARIA
MEASURE U
FINANCIAL STATEMENTS
JUNE 30, 2023
Attachment C
City of Santa Maria
MEASURE U FUND
TABLE OF CONTENTS
June 30, 2023
Independent Auditor’s Report………………………………………………………...……………………………1 Balance Sheet………………………………………………………………………………………………………….3 Statement of Revenues, Expenditures, and Changes in Fund Balance………………………………………….4 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual……………………………………………………………………………………………...….5 Notes to Financial Statements……………………………………………………………………………………….6
INDEPENDENT AUDITORS’ REPORT
City Council
City of Santa Maria
Santa Maria, California
Opinion
We have audited the accompanying financial statements of the Measure U Fund of the City of Santa Maria, California (the Fund) as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Measure U Fund of the City of Santa Maria, California as of June 30, 2023, and the changes in financial position and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City of Santa Maria, California, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter
As discussed in Note 1, the financial statements present only the Measure U Fund and do not purport to, and do not, present fairly the financial position of the City of Santa Maria as of June 30, 2023, the changes in its financial position for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control. Accordingly, no such opinion is expressed.
2400 Professional Parkway, Suite 205 Santa Maria, CA 93455 Tel 805.925.2579 Fax 805.925.2147 mlhcpas.com
BEVERLY HILLS
1 Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Santa Maria, California
July 25, 2024
City of Santa Maria
MEASURE U
BALANCE SHEET
June 30, 2023
General
ASSETS:
Cash and investments 13,406,211$
Accounts receivable 4,431,536
Prepaid items 11,468
Total assets 17,849,215
Accounts payable 30,480$
Accrued liabilities 713,667
Total liabilities 744,147
Fund Balances:
Restricted 17,105,068
Total fund balances 17,105,068
LIABILITIES AND FUND BALANCES:
City of Santa Maria
MEASURE U
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES For the Fiscal Year Ended June 30, 2023
General
REVENUES:
Sales Tax 26,461,516$
Use of money and property 642,981
Total revenues 27,104,497
EXPENDITURES:
Legal 142,531
City Manager 19,761
Library 826,690
Recreation and Parks 3,081,764
Fire 10,978,725
Police 11,997,665
Community Development 418,140
Total expenditures 27,465,276
expendituresExcess (deficiency) of revenues over expenditures (360,779) Fund balance at the beginning of fiscal year 17,465,847 Fund balance at the end of fiscal year 17,105,068$
CITY OF SANTA MARIA
MEASURE U
Statement of Revenues, Expenditures, and Changes in Fund Balance For the Fiscal Year Ended June 30, 2023
Variance
Final Over/
Budget Actual (Under)
Revenues
Sales tax 25,688,000$ 26,461,516$ 773,516$
Use of money and property 99,354 642,981 543,627 Total revenues 25,787,354 27,104,497 1,317,143
Expenditures
Legal
Salaries and wages - 68,009 68,009
Materials and supplies - 1,283 1,283
Contracts and services - 7,327 7,327
Equipment and operations - 65,985 65,985
Capital - (73) (73)
Total legal - 142,531 142,531
City Manager
Contracts and services 22,500 19,761 (2,739) Total city manager 22,500 19,761 (2,739) Finance
Contracts and services 2,600 - (2,600)
Total finance 2,600 - (2,600)
Library
Salaries and wages 742,026 581,304 (160,722) Materials and supplies 76,385 55,377 (21,008) Contracts and services 13,000 (325) (13,325) Capital 44,215 - (44,215)
Cost allocation transfer out 190,334 190,334 - Total library 1,065,960 826,690 (239,270) Parks and recreation
Salaries and wages 2,252,192 1,911,686 (340,506) Materials and supplies 174,129 266,644 92,515 Equipment and operations 122,708 122,708 - Contracts and services 337,483 328,100 (9,383) Capital 109,818 90,139 (19,679)
Cost allocation transfer out 362,487 362,487 - Total parks and recreation 3,358,817 3,081,764 (277,053)
Fire
Salaries and wages 9,075,717 8,657,810 (417,907) Materials and supplies 59,016 54,909 (4,107) Equipment and operations 565,211 556,867 (8,344) Contracts and services 534,127 458,613 (75,514) Capital 4,489,795 609,822 (3,879,973)
Cost allocation transfer out 640,069 640,704 - Total fire 15,363,935 10,978,725 (4,385,845)
Police
Salaries and wages 9,593,041 9,505,291 (87,750) Materials and supplies - - -
Equipment and operations 1,100,776 1,100,776 - Contracts and services 391,099 710,875 319,776 Capital 920,915 71,862 (849,053)
Cost allocation transfer out 608,861 608,861 - Total police 12,614,692 11,997,665 (617,027)
Community Development
Salaries and wages 626,890 246,068 (380,822) Materials and supplies 7,327 7,773 446 Equipment and operations 65,985 - (65,985)
Contracts and services 66,611 36,478 (30,133) Capital 149,911 127,821 (22,090)
Total police 916,724 418,140 (498,584) Total expenditures 33,345,228 27,465,276 (5,880,587) Excess (deficiency) of revenues over
Expenditures (7,557,874)$ (360,779) 7,197,730$ Fund balance at beginning of fiscal year 17,465,847
Fund balance at end of fiscal year 17,105,068 -
City of Santa Maria
MEASURE U FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
In a June 5, 2012 election, City of Santa Maria (City) voters approved Measure U, establishing a temporary quarter-cent transaction sales and use tax. The Measure U Fund (Fund) was established to accumulate revenues transmitted by the State Board of Equalization (BOE), the agency responsible for administering and collecting the transactions and use taxes for the City at that time and apportion them to essential services outlined within the approved expenditure plan. In 2017 administration of transaction and use tax was transferred to the California Department of Tax and Fee Administration (CDTFA).
In the November 2018 election, City voters approved to extend and enhance Measure U at a one- cent rate. The rate became effective April 1, 2019.
The financial statements presented only the activity of the Measure U Fund and are not intended to present the financial position and changes in financial position of the City of Santa Maria, in conformity with accounting principles generally accepted in the United States of America.
B. Basis of Accounting
T
he Measure U Fund of the City is maintained on the modified accrual basis of accounting. As such, revenues are recognized when they become susceptible to accrual, that is, when they become both measurable and available to finance expenditures of the current period. Expenditures are recognized in the accounting period in which the liability is incurred (when goods are received or services rendered).
C. Estimates
T
he preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
NOTE 2. CASH AND INVESTMENTS
Cash and investments at June 30, 2023, consist of the following:
Pooled cash and investments with the City of
Santa Maria $ 13,406,211
Please refer to the notes of the City’s June 30, 2023 Annual Comprehensive Financial Report regarding cash and investments for additional detail.